Half-year Report

FOR IMMEDIATE RELEASE
31 August 2016

LONDON & ASSOCIATED PROPERTIES PLC
HALF YEAR RESULTS TO 30 JUNE 2016

London & Associated Properties PLC is a main market listed group which invests in UK shopping centres and retail property whilst also managing property assets for institutional clients.

It holds a substantial investment in Bisichi Mining PLC (main market listed) which operates coal mines in South Africa and owns UK property investments.

HIGHLIGHTS

• Steady progress achieved in challenging market conditions
• Strengthened income quality from longer leases and improved tenant mix saw group property income, pre-management fees, rise to £3.66m against £3.61m
•  Group cash and cash equivalents increased to £4.15m from £2.57m at last year end following sale of interest in Langney Shopping Centre
• Results of LAP (excluding Bisichi and Dragon) affected by non-cash item of £0.5m increasing losses to £1.1m (2015: £0.6m)
• Sheffield, Orchard Square improves quality of tenant portfolio by completing
  • new 10 year £475,000 a year reversionary lease to TK Maxx at Orchard Square, Sheffield
  • Letting to Virgin Money at £345,000 a year
• New lettings at Kings Square, West Bromwich generate annualised income of £163,000
•  â€œIt is still too early to know the full impact of the result of the referendum on Europe. However, we believe that our property portfolio is well placed to meet the challenges that the United Kingdom faces and remain confident about the future,” commented on the interim results, Sir Michael Heller, Chairman, and John Heller, Chief Executive.

-more-

Contact:

          London & Associated Properties PLC                         Tel: [phone]
            John Heller, Chief Executive 

          Baron Phillips Associates                                         Tel: [phone]
            Baron Phillips

Half year results for the period ended
30 June 2016

Half year review

We are pleased to report on another six months of steady progress against challenging headwinds for London & Associated Properties group (‘’Group’’), which includes our interest in Bisichi Mining PLC (“Bisichi”).  Group property income, pre-management fees, rose marginally from £3.61 million to £3.66 million. This is a satisfactory result, as we continue to strengthen the quality of our income by negotiating longer leases and improving the quality of our tenant mix.  We report more fully on these asset management initiatives below.

London & Associated Properties’ (“LAP”) losses before tax were higher at £1.1 million compared to           Â£0.6 million for the same period last year.  However, this half year’s figures are distorted by a non-cash item.  As a result of record low interest rates, we have suffered a charge of £0.5 million from marking to market our interest rate derivatives.  These derivatives are swaps taken out to hedge 50% of our Santander loan.  The other 50% is hedged by a cap.  As we do not intend to break the swap, this non-cash loss will be reversed either as a result of higher interest rates or as the swap matures towards its expiry in mid-2019.

LAP finance expenses were lower at £1.92 million over the first 6 months compared to £1.97 million last year.  This is due to lower debenture payments following the early repayment of £1.25 million of 11.6% debenture stock in the first half of last year.  Further debenture stock will be due for repayment in the next 2 years and finance expenses will reduce further as a result.

Group net assets were also affected by the non-cash liability of £1.05 million (2015: £0.52 million) for interest rate derivatives noted above. Net assets per share at 30 June 2016 were 45.70 pence (31 December 2015: 47.26 pence).

Cash reserves improved following the sale of our equity interest in Langney Shopping Centre Unit Trust (LSCUT). Cash and cash equivalents increased to £4.15 million at 30 June 2016 (31 December 2015: £2.57 million).

Langney

In March LSCUT, in which LAP and Bisichi each owned a 12.5% equity interest, sold the Langney Shopping Centre for £19.3 million.  Acquired in 2011 for £16.5 million and associated costs, the Centre was held in a closed-ended joint venture with Schroders.  During our period of investment and management, we obtained planning consent for a significant extension to one side of the Centre.  LAP received £1.1million for its 12.5% stake, and our total cash return including dividends was £1.36 million over the 5 years that we owned and managed the Centre. Bisichi received a similar amount for its 12.5% share.  Additionally, during our period of investment, we received fees for managing the Centre.

Our property portfolio continues to trade well:

Sheffield

Our largest directly held asset is now Orchard Square in Sheffield and the shopping centre was effectively fully let at the balance sheet date.

The most significant event during the period under review was the completion in June of a 10 year reversionary lease to TK Maxx at £475,000 a year.  While this is a significant drop from the £625,000 that it was paying previously, this transaction secures the major anchor tenant of the scheme for the long term.  TK Maxx had a tenant-only break in 2018 and was being pursued actively by a number of other property owners in Sheffield.  We believe that this transaction is a significant validation of the quality of our shopping centre, and will help us to attract top quality tenants should any units become vacant.

We also completed a letting at the front of the centre to Virgin Money at a rent of £345,000 a year.  The unit is now open, and represents the latest in banking space.  In addition to traditional banking facilities, the unit also has a bowling alley, cinema, champagne bar, and children’s’ play area as well as meeting rooms and lounges.  We understand that this is the Virgin Money Group’s most dramatic fit-out so far, and brings an exciting new retail experience to Sheffield City centre and to Orchard Square.

Elsewhere, we completed a letting to Costa Coffee at £70,000 a year, which equates to a Zone A rent of £80 psf.  This underpins the rental values of the internal units at the centre.

Finally, we refurbished a floor of offices and have interest from a number of occupiers. We expect to let this space during the second half of the year.

Brixton

At Brixton, our markets continue to thrive and gross rental income is growing satisfactorily.  There is continued demand/enquiries about vacant unit at the markets. We are in the process of agreeing an increased share of the net income with The Market Village Company (formerly In-Shops), our tenant.         The benefit of any agreed increases in net income will be reported in future periods.

Also in Brixton, we obtained planning consent for a redevelopment of our smaller property in Coldharbour Lane.  The tenant, whose lease expired in November 2015, subsequently applied for a judicial review of the planning process.  Lambeth Council, the planning authority, declined to defend the application and the consent was consequently quashed.  Our application is automatically returned to the Council for consent a second time, and we remain confident that we will be successful. 

The tenant is also resisting yielding-up vacant possession, and we are using legal process to remove them.  Our lawyers are confident that we will prevail and we have allocated funds to pursue this matter to conclusion.

West Bromwich

At Kings Square, West Bromwich, we have competed lettings to Pep & Co and Everyone’s Choice, a local multiple discounter.  These lettings will improve our cash flow by £163,000 on an annualised basis.

Elsewhere our Group portfolio remains virtually fully let with a void rate of just 2.5% (31 December 2015: 2.1%) by rental value.

Joint Venture

Our joint venture with Oaktree Capital Management, which owns three shopping centres, continues to trade well.  We are pursuing exciting asset management opportunities at all three of them.  The more significant ones are well underway, and I look forward to reporting on them in due course.

Bisichi

For the six month period to 30 June 2016, Bisichi Mining PLC, of which we own 42%, achieved earnings before interest, tax, depreciation and amortisation of £1.0 million (2015: £1.2 million).

Although Black Wattle, Bisichi’s directly owned coal mining asset in South Africa, continued to operate in an environment of low international coal prices, demand for its coal has remained strong. In anticipation of the Blue Nightingale reserves coming to an end, plans are in place to increase production from Black Wattle’s own reserves.  These new opencast areas are expected to reach full production by the end of the year.

As part of Black Wattle’s production plan for the period, the mine combined production from its existing reserves with coal received from Blue Nightingale (under an agreement to purchase Run of Mine coal) and generated total production for the first six months of the year of 795,000 metric tonnes (2015: 838,000 metric tonnes).

Looking forward to the rest of this year, Bisichi intends to focus on maintaining low production costs and improving production levels from existing reserves at Black Wattle and remains confident in its continuing ability to achieve significant value from the South African mining operations.

Finally, Bisichi’s UK retail property portfolio, managed by London & Associated Properties PLC, continues to perform well with voids across the portfolio at the low level of 2.0% (2015: 2.3%).

Outlook and general

These results reflect the hard work of all the LAP directors, employees and advisors in challenging times.  It is still too early to know the full impact of the result of the referendum on Europe.  However, we believe that our property portfolio is well placed to meet the challenges that the United Kingdom faces, and remain confident about the future.

The Board is not proposing a half year dividend (2015: nil).

Sir Michael Heller                                                                                         John Heller
Chairman                                                                                                        Chief Executive
30 August 2016

Consolidated income statement

for the six months ended 30 June 2016

		6 months ended 30 June 2016 (unaudited)		6 months ended 30 June 2015 (unaudited)	Year ended 31 December 2015 (audited)
	Notes		£’000	£’000	£’000
Group revenue	1		14,319	17,335	32,666
Operating costs			(12,707)	(15,539)	(30,675)
Income from listed investments held for trading			3	1	3
Operating profit	1		1,615	1,797	1,994
Finance income	2		65	63	123
Finance expenses	2		(2,099)	(2,163)	(4,221)
Debenture break cost			–	(158)	(158)
Result before valuation and other movements			(419)	(461)	(2,262)
Non–cash changes in valuation of assets and liabilities and other movements
Decrease in value of investment properties			–	–	(185)
Loss on disposal of investment properties			–	–	(32)
(Decrease)/increase in trading investments			2	(18)	(1)
(Decrease)/increase  in value of other investments			11	(1)	(11)
Adjustment to interest rate derivative			(477)	141	84
Share of profit of joint ventures, net of tax			–	208	71
Loss on reclassification of asset as held for sale			–	–	(276)
Result including revaluation and other movements			(883)	(131)	(2,612)
Profit from discontinued operations			–	–	519
Loss for the period before taxation	1		(883)	(131)	(2,093)
Income tax (charge)/credit	3		(366)	(105)	47
Loss for the period			(1,249)	(236)	(2,046)
Attributable to:
Equity holders of the Company			(1,327)	(443)	(1,889)
Non–controlling interest			78	207	(147)
Loss for the period			(1,249)	(236)	(2,046)
(Loss)/profit per share – basic and diluted – continuing operations			(1.56)p	(0.52)p	(2.85)p
(Loss)/profit per share – basic and diluted – discontinued operations			–	–	0.61p
Total	4		(1.56)p	(0.52)p	(2.24)p

Consolidated statement of comprehensive income

for the six months ended 30 June 2016

	30 June 2016 (unaudited)	30 June 2015 (unaudited)	31 December  2015 (audited)
	£'000	£'000	£'000
Loss for the period	(1,249)	(236)	(2,046)
Other comprehensive income:
Items that may be subsequently recycled to the income statement:
Exchange differences on translation of foreign operations	491	(217)	(1,167)
Transfer of gain/(loss) on available for sale investments	63	(27)	(201)
Taxation	(13)	6	41
Other comprehensive income/(expense) for the period, net of tax	541	(238)	(1,327)
Total comprehensive expense for the period, net of tax	(708)	(474)	(3,373)
Attributable to:
Equity shareholders	(1,126)	(531)	(2,414)
Non–controlling interest	418	57	(959)
	(708)	(474)	(3,373)

Consolidated balance sheet

at 30 June 2016

		30 June 2016 (unaudited)	30 June 2015 (unaudited)	31 December 2015 (audited)
	Notes	£'000	£'000	£'000
Non–current assets
Market value of properties attributable to Group		104,496	103,700	104,388
Present value of head leases		4,772	4,785	4,784
Property	5	109,268	108,485	109,172
Mining reserves, plant and equipment		6,478	6,348	5,552
Investments in joint ventures		325	3,463	325
Loan to joint venture		1,105	1,029	900
Held to maturity investments		1,874	2,102	1,995
Other investments		28	158	14
Deferred tax		2,027	2,306	2,390
		121,105	123,891	120,348
Current assets
Inventories		2,117	1,394	1,049
Assets for sale		–	–	2,335
Trade and other receivables		7,262	8,606	6,502
Interest rate derivatives	6	4	–	15
Corporation tax recoverable		–	31	29
Available for sale investments		654	768	594
Investments held for trading		22	105	20
Cash and cash equivalents		7,123	6,579	4,809
		17,182	17,483	15,353
Total assets		138,287	141,374	135,701
Current liabilities
Trade and other payables		(12,407)	(11,287)	(10,497)
Borrowings		(2,981)	(5,083)	(2,267)
Current tax liabilities		(145)	(24)	(10)
		(15,533)	(16,394)	(12,774)
Non–current liabilities
Borrowings		(65,104)	(63,647)	(64,951)
Interest rate derivatives	6	(1,053)	(515)	(587)
Present value of head leases on properties		(4,772)	(4,785)	(4,784)
Provisions		(1,028)	(919)	(847)
Deferred tax liabilities		(2,155)	(2,412)	(2,106)
		(74,112)	(72,278)	(73,275)
Total liabilities		(89,645)	(88,672)	(86,049)
Net assets		48,642	52,702	49,652
Equity attributable to the owners of the parent
Share capital		8,554	8,554	8,554
Share premium account		4,866	4,866	4,866
Translation reserve (Bisichi Mining PLC)		(962)	(776)	(1,145)
Capital redemption reserve		47	47	47
Retained earnings (excluding treasury shares)		26,681	29,794	28,238
Treasury shares		(294)	(422)	(482)
Retained earnings		26,387	29,372	27,756
Total equity attributable to equity shareholders		38,892	42,063	40,078
Non – controlling interest		9,750	10,639	9,574
Total equity		48,642	52,702	49,652
Net assets per share	7	45.7p	49.5p	47.26p
Diluted net assets per share	7	45.7p	49.5p	47.26p

Consolidated statement of changes in shareholders’ equity

for the six months ended 30 June 2016

	Share capital £’000	Share premium £’000	Translation reserves £’000	Capital redemption reserve £’000	Treasury shares £’000	Retained earnings excluding treasury shares £’000	Total excluding Non– Controlling Interests £’000	Non–controlling Interests £’000	Total equity £’000
Balance at 1 January 2015	8,554	4,866	(696)	47	(883)	30,659	42,547	10,826	53,373
Loss for the period	–	–	–	–	–	(443)	(443)	207	(236)
Other comprehensive expense:
Currency translation	–	–	(80)	–	–	–	(80)	(137)	(217)
Loss on available for sale investments  (net of tax)	–	–	–	–	–	(8)	(8)	(13)	(21)
Total other comprehensive expense	–	–	(80)	–	–	(8)	(88)	(150)	(238)
Total comprehensive income/(expense)	–	–	(80)	–	–	(451)	(531)	57	(474)
Transactions with owners: Share options issued	–	–	–	–	–				11
Dividends – equity holders	–	–	–	–	–	(133)	(133)	–	(133)
Dividends – non–controlling Interests	–	–	–	–	–	–	–	(250)	(250)
Acquisition of own shares	–	–	–	–	(51)	–	(51)	–	(51)
Disposal of own shares	–	–	–	–	226	–	226	–	226
Loss on transfer of own shares	–	–	–	–	286	(286)	–	–	–
Transactions with owners	–	–	–	–	461	(414)	47	(244)	(197)
Balance at 30 June 2015 (unaudited)	8,554	4,866	(776)	47	(422)	29,794	42,063	10,639	52,702
Balance at 1 January 2015	8,554	4,866	(696)	47	(883)	30,659	42,547	10,826	53,373
Loss for year	–	–	–	–	–	(1,899)	(1,899)	(147)	(2,046)
Other comprehensive expense:
Currency translation	–	–	(449)	–	–	–	(449)	(718)	(1,167)
Loss on available for sale investments  (net of tax)	–	–	–	–	–	(66)	(66)	(94)	(160)
Total other comprehensive expense	–	–	(449)	–	–	(66)	(515)	(812)	(1,327)
Total comprehensive expense	–	–	(449)	–	–	(1,965)	(2,414)	(959)	(3,373)
Transaction with owners:
Share options issued	–	–	–	–	–	13	13	18	31
Share options cancelled	–	–	–	–	–	(45)	(45)	(64)	(109)
Dividends – equity holders	–	–	–	–	–	(133)	(133)	–	(133)
Dividends –  non–controlling Interests	–	–	–	–	–	–	–	(250)	(250)
Change in equity held by LAP	–	–	–	–	–	(5)	(5)	3	(2)
Acquisition of own shares	–	–	–	–	(111)	–	(111)	–	(111)
Disposal of own shares	–	–	–	–	226	–	226	–	226
Loss on transfer of own shares	–	–	–	–	286	(286)	–	–	–
Transactions with owners	–	–	–	–	401	(456)	(55)	(293)	(348)
Balance at 31 December 2015 (audited)	8,554	4,866	(1,145)	47	(482)	28,238	40,078	9,574	49,652

Consolidated statement of changes in shareholders’ equity - continued

for the six months ended 30 June 2016

	Share capital £’000	Share premium £’000	Translation reserves £’000	Capital redemption reserve £’000	Treasury shares £’000	Retained earnings excluding treasury shares £’000	Total excluding Non– Controlling Interests £’000	Non–controlling Interests £’000	Total equity £’000
Balance at 1 January 2016	8,554	4,866	(1,145)	47	(482)	28,238	40,078	9,574	49,652
Loss for the period	–	–	–	–	–	(1,327)	(1,327)	78	(1,249)
Other comprehensive income:
Currency translation	–	–	183	–	–	–	183	308	491
Gain on available for sale investments  (net of tax)	–	–	–	–	–	18	18	32	50
Total other comprehensive income	–	–	183	–	–	18	201	340	541
Total comprehensive (expense)/income	–	–	183	–	–	(1,309)	(1,126)	418	(708)
Transactions with owners:
Equity share options	–	–	–	–	–	6	6	8	14
Dividends – equity holders	–	–	–	–	–	(136)	(136)	–	(136)
Dividends – non–controlling interests	–	–	–	–	–	–	–	(250)	(250)
Disposal of own shares	–	–	–	–	70	–	70	–	70
Loss on transfer of own shares	–	–	–	–	118	(118)	–	–	–
Transactions with owners	–	–	–	–	188	(248)	(60)	(242)	(302)
Balance at 30 June 2016 (unaudited)	8,554	4,866	(962)	47	(294)	26,681	38,892	9,750	48,642

Consolidated cash flow statement

for the six months ended 30 June 2016

	6 months ended 30 June 2016 (unaudited)	6 months ended 30 June 2015 (unaudited)	Year ended 31 December 2015 (audited)
	£'000	£'000	£'000
Operating activities
Operating profit                           – continuing operations	1,615	1,797	1,994
– discontinued operations	–	–	8
Depreciation and amortisation	751	722	1,329
(Loss)/profit on disposal of non–current assets	(18)	11	–
Share based payment expense	14	–	31
Gain on investment held for trading	–	–	122
Exchange adjustments	–	–	497
Change in inventories	(824)	275	393
Change in receivables                       – continuing operations	(586)	(1,840)	581
Change in receivables                      â€“ discontinued operations	424	–	(424)
Change in payables	792	54	(156)
Cash generated from operations	2,168	1,019	4,375
Income tax paid	27	–	(1)
Cash inflows from operating activities	2,195	1,019	4,374
Investing activities
Repayment of loans held to maturity	121	94	201
Investment in shares and loan stock in joint ventures	(38)	–	–
Acquisition of investment properties, mining reserves, plant and equipment	(898)	(1,225)	(3,339)
Sale of plant and equipment                 – continuing operations	18	–	368
Sale of assets held for sale	2,335	–	–
Interest received                                 – continuing operations	99	132	88
Interest received                                 – discontinued operations	–	–	87
Distribution received from joint ventures	133	176	210
Cash inflows/(outflows) from investing activities	1,770	(823)	(2,385)
Financing activities
Purchase of treasury shares	–	(51)	(111)
Sale of treasury shares	70	226	226
Interest paid                                          â€“ continuing operations	(1,962)	(2,165)	(3,996)
Interest on obligation under finance leases     – continuing operations	(71)	(99)	(247)
Debenture stock break costs paid		(158)	(158)
Receipt of bank loan – Bisichi Mining PLC	16	–	18
Repayment of bank loan – Bisichi Mining PLC	(79)	(111)	(66)
Receipt of bank loan – Dragon Retail Properties Ltd	17	–	1,250
Repayment of bank loan – Dragon Retail Properties Ltd	–	–	(1,900)
Repayment of bank loan                             – continuing operations	–	(133)	(201)
Repayment of debenture stocks	–	(1,250)	(1,250)
Equity dividends paid	–	(133)	(133)
Equity dividends paid – non–controlling interests	(63)	(63)	(250)
Cancelled share options – Bisichi Mining PLC	–	–	(109)
Cash outflows from financing activities	(2,072)	(3,937)	(6,927)

Consolidated cash flow statement - continued

for the six months ended 30 June 2016

	6 months  ended  30 June 2016 (unaudited)	6 months  ended  30 June 2015 (unaudited)	Year  ended  31 December  2015 (audited)
	£'000	£'000	£'000
Net increase/(decrease) in cash and cash equivalents	1,893	(3,741)	(4,938)
Cash and cash equivalents at beginning of period	2,575	7,118	7,118
Exchange adjustment	(318)	95	395
Cash and cash equivalents at end of period	4,150	3,472	2,575

The cash flows above relate to continuing and discontinued operations.

Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts:

Cash and cash equivalents (before bank overdrafts)	7,123	6,579	4,809
Bank overdrafts	(2,973)	(3,107)	(2,234)
Cash and cash equivalents at end of period	4,150	3,472	2,575

Notes to the half year report
for the six months ended 30 June 2016                                    

1. Segmental analysis	6 months  ended 30 June 2016 (unaudited)	6 months  ended 30 June 2015 (unaudited)	Year  ended  31 December 2015 (audited)
	£'000	£'000	£'000
Revenue
LAP
- Rental Income	3,040	3,027	6,129
- Management income from third parties	264	329	696
Bisichi
- Rental Income	530	488	1,014
- Mining	10,395	13,392	24,640
Dragon
- Rental Income	90	99	187
	14,319	17,335	32,666
Operating profit/ (loss)
LAP	1,253	1,251	1,956
Bisichi	298	477	(65)
Dragon	64	69	103
	1,615	1,797	1,994
(Loss)/ profit before taxation
LAP	(1,057)	(554)	(1,886)
Bisichi	142	389	(217)
Dragon	32	34	10
	(883)	(131)	(2,093)
2. Finance costs	6 months  ended 30 June 2016 (unaudited)	6 months  ended 30 June 2015 (unaudited)	Year  ended  31 December 2015 (audited)
	£'000	£'000	£'000
Finance income	65	63	123
Finance expenses:
Interest on bank loans and overdrafts	(1,131)	(1,075)	(2,258)
Other loans	(659)	(748)	(1,359)
Unwinding of discount (Bisichi Mining PLC)	(38)	(42)	(79)
Interest on derivatives	(145)	(148)	(295)
Interest on obligations under finance leases	(126)	(150)	(230)
Total finance expenses	(2,099)	(2,163)	(4,221)
	(2,034)	(2,100)	(4,098)
Notes to the half year report - continued
3. Income tax	6 months  ended 30 June 2016 (unaudited)	6 months  ended 30 June 2015 (unaudited)	Year  ended  31 December 2015 (audited)
	£'000	£'000	£'000
Current tax	141	2	(10)
Deferred tax	225	103	(37)
	366	105	(47)

4. Earnings per share	6 months  ended 30 June 2016 (unaudited)	6 months  ended 30 June 2015 (unaudited)	Year  ended  31 December 2015 (audited)
Group loss after tax (£’000)	(1,327)	(443)	(1,899)
Weighted average number of shares in issue for the period ('000)	85,053	85,004	84,951
Basic earnings per share	(1.56)p	(0.52)p	(2.24)p
Diluted number of shares in issue ('000)	85,053	85,004	84,951
Diluted earnings per share	(1.56)p	(0.52)p	(2.24)p

5. Property    

Properties at 30 June 2016 are included at valuation as at 31 December 2015, plus additions in the period.

During the six months ended 30 June 2016 the group had property additions of £0.1 million (30 June 2015: £0.045 million, 31 December 2015:  £0.36 million).

No properties were sold during the six months ended 30 June 2016 (carrying value of properties sold at 30 June 2015: £Nil, 31 December 2015: £Nil).

6. Interest rate derivatives

At 30 June 2016 the fair value liability was £1,053,000 as valued by the hedge provider (30 June 2015: £515,000, 31 December 2015: £587,000).

At 30 June 2016 the fair value asset was £4,000 as valued by the hedge provider (30 June 2015: £Nil, 31 December 2015: £15,000).

Under IFRS 13 the hedges are not deemed to be eligible for hedge accounting and any movement in the value of the hedge is charged directly to the consolidated income statement.

Notes to the half year report - continued

7. Net assets per share	30 June 2016 (unaudited)	30 June 2015 (unaudited)	31 December 2015 (audited)
Shares in issue ('000)	85,094	84,975	84,808
Net assets per balance sheet (£'000)	38,892	42,063	40,078
Basic net assets per share	45.7p	49.5p	47.26p
Shares in issue diluted by outstanding share options ('000)	85,094	84,975	84,808
Net assets after issue of share options (£'000)	38,892	42,063	40,078
Fully diluted net assets per share	45.7p	49.5p	47.26p

8. Related party transactions

The related parties and the nature of costs recharged are as disclosed in the group’s annual financial statements for the year ended 31 December 2015. 

The group, during the period, was repaid the remaining £127,000 of the unsecured loan by Langney Shopping Centre Unit Trust (a joint venture).

The assets held for sale in Langney Shopping Centre Unit Trust were sold during the period for £2,335,000.

9. Dividends

There is no interim dividend payable for the period (30 June 2015: Nil).

The final dividend in respect of 2015 of 0.16p per share, amounting to £136,000, was paid on 15 July 2016.  As the 2015 final dividend was approved by the shareholders at the Annual General Meeting held on 9 June 2016, it is included as a liability in these interim financial statements.

10. Risks and uncertainties

The group’s principal risks and uncertainties are reported on pages 20 and 21 in the 2015 Annual Report.  They have been reviewed by the Directors and remain unchanged for the current period.

The largest area of estimation and uncertainty in the interim financial statements is in respect of the valuation of investment properties (which are not revalued at the half year) and the valuation of interest rate derivatives.

For our subsidiary, Bisichi Mining PLC, it also relates to currency movements and coal mining activities in South Africa, including depreciation, impairment and the provision for rehabilitation (relating to environmental rehabilitation of mining areas).

Notes to the half year report - continued

11. Financial information

The above financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  The figures for the year ended 31 December 2015 are based upon the latest statutory accounts, which have been delivered to the Registrar of Companies; the report of the auditor’s on those accounts was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

As required by the Disclosure and Transparency Rules of the UK's Financial Services Authority, the interim financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and in accordance with both IAS 34 'Interim Financial Reporting' as adopted by the European Union and the disclosure requirements of the Listing Rules.

The half year results have not been audited or subject to review by the company's auditor.

The annual financial statements of London & Associated Properties PLC are prepared in accordance with IFRS as adopted by the European Union.  The same accounting policies are used for the six months ended 30 June 2016 as were used for the year ended 31 December 2015.

As stated in the 2015 Annual Report in the group accounting policies, Bisichi Mining PLC and Dragon Retail Properties Limited are consolidated with LAP, as required by IFRS 10. 

The assessment of new standards, amendments and interpretations issued but not effective, is that these are not anticipated to have a material impact on the financial statements.

There is no material seasonal impact on the group’s financial performance.

Taxes on income in the interim periods are accrued using tax rates expected to be applicable to total annual earnings.

The interim financial statements have been prepared on the going concern basis as the Directors are satisfied the group has adequate resources to continue in operational existence for the foreseeable future.

12. Board approval

The half year results were approved by the Board of London & Associated Properties PLC on 30 August 2016.                                          

Directors' responsibility statement              

The Directors confirm that to the best of their knowledge:                                                                          

(a) the condensed set of financial statements have been prepared in accordance with applicable accounting standards and IAS 34 Interim Financial Reporting as adopted by the EU;                           

(b) the interim management report includes a fair review of the information required by:

 (1) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements ; and a description of the principal risks and uncertainties for the remaining six months of the year;  and

(2) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.                                                        

This report contains forward-looking statements. These statements are based on current estimates and projections of management and currently available information. Future statements are not guarantees of the future developments and results outlined therein. Rather, future developments and results are dependent on a number of factors; they involve various risks and uncertainties and are based upon assumptions that may not prove to be accurate. Risks and uncertainties identified by the Group are set out on pages 20 and 21 of the 2015 Annual Report & Accounts. We do not assume any obligation to update the forward-looking statements contained in this report.

Signed on behalf of the Board on 30 August 2016

Sir Michael Heller                Anil Thapar
Director                              Director

Directors and advisors

Directors Executive directors * Sir Michael Heller MA FCA (Chairman) John A Heller LLB MBA (Chief Executive) Anil K Thapar FCCA (Finance Director)

Non-executive directors † Howard D Goldring BSC (ECON) ACA #†Clive A Parritt  FCA CF FIIA Robin Priest  MA

* Member of the nomination committee # Senior independent director † Member of the audit, remuneration and nomination committees.

Secretary & registered office Anil K Thapar FCCA 24 Bruton Place, London W1J 6NE

Registrars & transfer office Capita Asset Services Shareholder Services The Registry, 34 Beckenham Road Beckenham, Kent  BR3 4TU

Telephone [phone] (Calls cost 12p per minute + network extras, lines are open Mon-Fri 9.00am to 5.30pm) or [phone] for overseas callers Website: www.capitaassetservices.com E-mail: [e-mail]

Company registration number 341829 (England and Wales)

Website www.lap.co.uk

E-mail [e-mail]