Interim Results and Dividend Announcement

29 September 2008 GSC Property Holdings plc Interim results for the 6 months to 30 June 2008 Highlights: * Profit before interest rises 18.7% to GBP3,105,874 (2007: GBP2,615,743) * Income up 4.4% to GBP3,980,948 (2007: GBP3,814,684) * Dividend to be 2.0 pence (net) per share (2007: 2.5 pence) Mark Rubin, Chief Executive commented: "While GSC is not immune to the current market turbulence, the impact is small. The company has a conservative balance sheet characterised by long term bank finance at fixed rates and a portfolio of well let commercial investments. We are poised to act quickly should investment opportunities arise which we believe are in the interest of shareholders." For further information please contact: Mark Rubin, Chief Executive 01702 293 300 Jonathan Williams, Bishop Fleming (Corporate Adviser) 0117 910 0250 Anthony Spiro, Spiro Financial (Press and Investor Relations) 020 8336 6196 ------------------------------------ GSC Property Holdings specialises in commercial property investment in the UK. The company's strategy is to spread risk through building a diverse portfolio to minimise exposure to any single end use or geographical area. Our objective is to add maximum value for shareholders. ------------------------------------ CHAIRMAN'S STATEMENT FOR THE CONSOLIDATED UNAUDITED GROUP RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2008 I am pleased to report that rental revenue in the six months to 30 June 2008 increased over four per cent to £3,980,948 (2007: £3,814,684). Operating profit for the period rose over 20 per cent to £3,105,874 (2007: £2,575,743). The directors have declared a dividend of 2.0 pence per share (2007: 2.5 pence per share). It will be paid on 7 November 2008 to shareholders on the register on 20 October 2008. Conditions in the UK property market became increasingly difficult during the first half of the trading year as the "credit crunch" and associated lack of liquidity put over-borrowed businesses under pressure. GSC is riding out the turbulence well because its long established, conservative and low risk strategy has ensured that the company is soundly financed with long term debt arrangements at fixed rates. The continuing financial turbulence coupled with uncertainty on valuations has significantly reduced activity in the property investment market. GSC did not complete any transactions during the period although it monitored conditions very closely and is well placed to act quickly should a suitable opportunity arise. The major refurbishment of the Metro Palace Court Hotel in Bournemouth was completed in June 2008. As Golden Tulip has been acquired by Whitbread the Metro Palace Court Hotel has been rebranded as a Premier Hotel. The hotel reopened in early July and is trading well. There is no doubt that the combination of high borrowing costs and extremely tight bank lending is creating very difficult conditions for imprudently financed property investors. We are confident that these tough conditions will over time generate significant and attractive investment opportunities as owners who made speculative purchases at unrealistically low yields come under severe financing pressure. Outlook While GSC is not immune to the current market turbulence, the impact is small. The company has a conservative balance sheet characterised by long term bank finance at fixed rates and a portfolio of well let commercial investments. We are poised to act quickly should investment opportunities arise which we believe are in the interest of shareholders. Alan Gerschlick Chairman 29 September 2008 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the half year ended 30 June 2008 note 6 months to 6 months to 12 months to 30 Jun 2008 30 Jun 2007 31 Dec 2007 (unaudited) (unaudited) (audited) GBP GBP GBP Turnover 2 3,980,948 3,814,684 7,496,055 ------------ ------------ ------------ Gross profit 3,908,348 3,748,084 7,166,647 Administrative and distribution (802,474) (1,172,341) (2,505,726) expenses Assets held for Sale - Fair - - (865,909) Value Adjustment ------------ ------------ ------------ Operating profit 3,105,874 2,575,743 3,795,012 Profit / (Loss) on disposal of 3 - 40,000 (180,001) fixed assets ------------ ------------ ------------ Profit before interest 3,105,874 2,615,743 3,615,011 Interest payable (net) (2,567,154) (2,003,440) (5,162,842) ------------- ------------- ------------- Profit/(Loss) on ordinary 538,720 612,303 (1,547,831) activities before tax Tax on profit on ordinary 4 - (183,182) - activities ----------- ------------- ------------- Profit/(Loss) for the period 538,720 429,121 (1,547,831) ====== ======= ======== Earnings per ordinary share (p) 6 5.15 7.99 (96.77) Statement of total realised gains and losses 6 months to 6 months to 12 months to 31 Dec 2007 30 Jun 2008 30 Jun 2007 (audited) (unaudited) (unaudited) GBP GBP GBP Profit/(Loss) for the 538,720 429,121 (1,547,831) financial period Unrealised surplus / - 400,000 (8,538,886) (deficit) on revaluation of property ---------- ----------- -------------- Total recognised gains and 538,720 829,121 (10,086,717) losses for the period ====== ====== ======== CONSOLIDATED BALANCE SHEET At 30 June 2008 Unaudited Unaudited 31 December 2007 as at as at (audited) 30 June 2008 30 June 2007 Note GBP GBP GBP Fixed Assets Intangible assets 290,657 308,273 299,465 Tangible assets 3,724,596 3,734,664 3,751,302 Investment properties 7 93,894,000 105,257,590 93,894,000 --------------- --------------- -------------- 97,909,253 109,300,527 97,944,767 ========= ========= ======== Current assets Stock 13,569 13,352 13,124 Asset held for sale 22,500,000 22,721,562 22,500,000 Debtors 1,915,714 2,336,598 1,308,953 Other short-term 200 200 200 investments Cash at bank and in hand 2,130,397 2,970,768 3,237,947 -------------- -------------- -------------- 26,559,880 28,042,480 27,060,224 ======== ======== ======== Creditors: amounts falling due (13,304,443) (10,692,821) (24,886,613) within one year ------------- --------------- -------------- Net current assets 13,255,437 17,349,659 2,173,611 ------------- --------------- -------------- Total assets less current 111,164,690 126,650,186 100,118,378 liabilities Creditors: amounts falling (79,284,804) (83,674,112) (68,463,212) due in more than one year Provisions: deferred tax - - - -------------- -------------- ---------------- Total assets 31,879,886 42,976,074 31,655,166 ======== ======== ========== Capital and reserves Called up share capital 104,680 104,680 104,680 Share premium account 1,414,350 1,514,350 1,414,350 Revaluation reserve 21,659,521 30,952,674 21,659,521 Profit and loss account 8,701,335 10,404,370 8,476,615 -------------- -------------- --------------- Shareholders' funds 31,879,886 42,976,074 31,655,166 ======== ======== ========== NOTES TO THE INTERIM REPORT 2008 1. BASIS OF PREPARATION The accounting policies used for the audited financial statements at 31 December 2007 have been used in the preparation of this interim report. The interim report is unaudited and does not comprise full financial statements. The results for the year to 31 December 2007 are an abridged summary of the financial statements for that year which have been delivered to the Registrar of Companies and on which the auditors' report was unqualified. 2. TURNOVER Turnover represents rental income on the group's investment portfolio and turnover from hotels, invoiced in the period and is stated net of VAT. Included within turnover is GBP 670,700 of revenues from hotel operations (2007: GBP 768,200). 3. EXCEPTIONAL ITEMS The profit on disposal of fixed assets arises on sales of properties from the group's investment portfolio. 4. TAX CHARGE No provision has been made for corporation tax for the current half year because of tax losses being brought forward from last year. The tax charge relating to the previous half year was calculated at 30% of the profit before tax and was based on the current estimate at that time of the effective tax rate for the full year. The Group adopts the provisions of the UK Financial Reporting Standard 19, however no adjustments have been made as the effect is not material. 5. DIVIDENDS PROPOSED The directors propose an interim dividend of 2p per share (GBP 209,360) which will be paid on 7 November 2008 to shareholders on the register at the close of business on 20 October 2008. In accordance with FRS21 the company recognises dividends in the financial statements in the period in which they are paid. 6. EARNINGS PER SHARE Earnings per share have been calculated to include total earnings attributable to equity shareholders arising in the period: 6 months 6 months 12 months to to 30 June to 30 June 31 December 2008 2007 2007 GBP GBP GBP Total earnings/losses arising 538,720 829,121 (10,086,717) in the period Weighted average shares in 10,468,000 10,370,762 10,423,616 issue Total earnings per share (p) 5.15 7.99 (96.77) 7. INVESTMENTS In the 6 months to 30 June 2008 there were no purchases or sales of properties. The directors of GSC Property Holdings plc accept responsibility for this announcement

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