Final Results

Helical Bar PLC 07 June 2007 7 June 2007 H E L I C A L B A R P L C ('Helical'/'Company'/'Group') P r e l i m i n a r y R e s u l t s For the year to 31 March 2007 HELICAL DOUBLES NET ASSET VALUE PER SHARE OVER THREE YEARS Financial Highlights • Adjusted diluted net asset value, including trading and development stock surplus, up 21% to 374p per share (2006: 309p). • Profit before tax of £60.1m (2006: £57.1m) - up 5% • Gain on sale and revaluation of investment properties of £40.6m (2006:£43.6m) • Valuation of investment properties up 14.4% (2006: 17.3%) • Adjusted diluted earnings per share of 16.6p (2006: 12.2p) - up 36% • Final dividend proposed of 2.75p per share (2006: 2.45p) - up 12% Giles Weaver, Chairman, commented: 'As a specialist in adding value through development, refurbishment and planning, Helical is not dependent on yield shift to deliver consistently good returns. A 21% net asset value per share increase has led to a doubling of net asset value per share over the last three years. We believe the diversity of projects we have accumulated leave us well placed to outperform in the future'. For further information, please contact: Helical Bar plc 020 7629 0113 Michael Slade (Managing Director) Nigel McNair Scott (Finance Director) Address: 11-15 Farm Street, London W1J 5RS Fax: 020 7408 1666 Website: www.helical.co.uk Financial Dynamics 020 7831 3113 Stephanie Highett/Dido Laurimore FINANCIAL HIGHLIGHTS Year To Year To 31 March 31 March Notes 2007 2006 £m £m Net rental income 14.8 16.5 Development profits 13.6 4.6 Trading profits 2.1 13.4 Gain on investment properties 40.6 43.6 Profits before tax 60.1 57.1 Pence Pence Basic earnings per share 58.0 54.7 Diluted earnings per share 53.7 51.8 Adjusted diluted earnings per share 1 16.6 12.2 Dividends per share (paid in year) 4.05 3.65 Adjusted diluted net assets 2 374 309 per share, including trading and development stock surplus Adjusted diluted net assets 3 334 278 per share £m £m Value of investment portfolio 316.0 294.6 Trading and development stock at cost 110.8 86.1 Net borrowings 134.0 112.7 Net assets 282.2 230.1 Net gearing 47% 49% 1. Calculated in accordance with IAS 33 and the best practice recommendations of the European Public Real Estate Association ('EPRA') (see note 9) 2. Calculated in accordance with the best practice recommendations of EPRA (see note 24). 3. As per 2, but excluding the adjustment for the fair value of development stock. Chairman's Statement Helical has a history of producing good financial results and the year to 31 March 2007 is no exception. The 21% increase in net assets per share in the year means that the Company has more than doubled its diluted EPRA net asset value per share in the last three years. This performance has been reflected in our share price which has increased by over 150% over the same period. Results Profits before tax increased to £60.1m (2006: £57.1m) as higher development profits and lower net finance costs exceeded reduced trading profits and gains on investment properties. Adjusted diluted earnings per share increased to 16.6p (2006: 12.2p). The gain on sale and revaluation of the investment portfolio was £40.6m (2006: £43.6m) reflecting a like for like valuation increase of 14.4% (2006: 17.3%) and sales of investment properties at 17.1% over book values. The Group's diluted EPRA net asset value per share rose by 21% to 374p (2006: 309p). The directors' valuation of trading and development stock shows a surplus of £36m (2006: £29m). Excluding this valuation, the adjusted diluted net asset value per share rose by 20% to 334p (2006: 278p). The Company's prospects for 2007/8 allow the Board to recommend to shareholders a final dividend of 2.75p per share (2006: 2.45p), an increase of 12%. Under IFRS dividends are accounted for once declared and, as a consequence, this final dividend is not reflected in these accounts. However, taken with the interim dividend paid in December 2006 of 1.60p (2006: 1.45p) it represents a total dividend of 4.35p (2006: 3.90p), an increase of 12%. The Board In July 2006, John Southwell retired after almost 25 years involvement with the Company, the majority of that time as Chairman of the Board. The Board thanks John for his important contribution to the success of the Company and wishes him well in his retirement. Wilf Weeks is to be congratulated on receiving an OBE for services to the Arts in London. Outlook The Company's consistent success is derived from an ever-widening portfolio of activities, many involving highly professional and specialist joint venture partners who share in this success. As yield compression ceases and total returns for the property market move into single figures, the diversification of our activities will drive our performance over the next few years. The Company is poised to benefit from a number of exciting schemes, whether through major mixed use developments, change of planning use, retirement villages and nursing homes, outsourcing, office and retail developments and many other opportunities. As a specialist in adding value through development, refurbishment and planning, Helical is not dependent on yield shift to deliver consistently good returns. A 21% net asset value increase has led to a doubling of net asset value per share over the last three years. We believe that the diversity of projects we have accumulated leave us well placed to outperform in the future. Giles Weaver Chairman 7 June 2007 Managing Director's Statement State of the Market Recent investment performance data show that the commercial property market is levelling off. The overall figures, however, mask a sharp contrast between central London offices, which could produce double digit capital growth, and the other sectors which are now showing little capital appreciation. Helical's current stance is to adopt a relatively defensive approach to our investment portfolio while we remain committed to buy trading and development opportunities where we are continuing to find attractive margins. Unlocking shareholder value in competitive markets requires increasingly creative means. Helical is constantly reinventing itself and has established a very successful model of setting up joint ventures with talented specialist management teams. This augments our core business helping to keep Helical at the forefront of the property market and continuing to outperform its peers. Real Estate Investment Trusts (REIT) The REIT legislation was enacted in 2006 and, from 1 January 2007, qualifying listed property companies have been able to convert into REITs. Companies in the new REIT asset class are required to maintain a far greater percentage of their business devoted to investments than we would wish. We believe that at this point in the current cycle, it is from development and trading, rather than investment, whence the majority of our future profits will flow. Conversion to a REIT is not appropriate for Helical. Our objective is to take advantage of the flexibility that we retain to generate sufficient profits net of tax to outperform the more tax efficient REITs. Senior Management A cornerstone on which Helical is built is the alignment of shareholders' interests with those of the senior management of the Company. The Board of Directors have always had a significant shareholding in Helical and at 31 March 2007 this shareholding stood at 17.6%. Including the shares held by the Company's Employee Share Ownership Plan Trust ('ESOP') this shareholding is 23.8%. The average term of office for our talented team is almost 17 years for our executive directors, with the equivalent for management below Board level being over 11 years. I take this opportunity to express my thanks to the home team and all our various joint venture partners for their contributions to these results. Michael Slade Managing Director Business Review Our business Helical Bar is a property development and investment company. We create shareholder value through a wide variety of high margin activities with property investment at our core. Whilst a profit centre in its own right, property investment provides a stable income stream to cover all our overheads and interest costs. Our spread of activities gives us the flexibility to deploy capital rapidly across our business and focus on whatever opportunities offer the best returns at different points of the property cycle. Our goals We seek to make excellent returns for our shareholders over the short, medium and long term whilst avoiding the pitfalls of the commercial property cycle. We aim to achieve this through a broadly based, diversified property business, which has access to a very wide range of opportunities. We do this with a small, long-serving management team who have a significant proportion of their own wealth invested in a 18% stake in the company and have no competing interests. We try to keep execution risk to a minimum, working with first rate joint venture partners when we move into new areas of property business. Our performance IPD (all monthly and quarterly valued funds) ungeared returns Our unleveraged returns are measured against the industry benchmark produced by IPD. Total Returns %pa %pa %pa %pa %pa Annualised over 1 yr 3 yrs 5 yrs 10 yrs 17 yrs Helical 24.1 25.9 19.5 20.8 18.5 IPD Benchmark 15.8 17.8 14.9 13.3 9.7 Percentile rank 5 3 3 1 0 * '0' means the top ranked fund The returns noted above take no account of the £36m (2006:£29m) surplus of trading and development stock above book value arising from the directors' valuation. Investment Portfolio Valuation Yields Initial Reversionary Equivalent True Equivalent London offices 6.2% 7.0% 6.0% 6.3% In town retail 3.2% 5.1% 5.1% 5.3% Out of town retail 4.9% 5.0% 4.9% 5.1% Industrial 6.1% 7.5% 7.4% 7.8% Total 5.2% 6.4% 5.9% 6.2% Portfolio Balance Offices Offices Retail Central South Retail Out of Change London East In town town Industrial of use Total Investment 32.8% 1.2% 20.4% 6.0% 8.9% 2.4% 71.7% Trading & development - 2.6% 1.0% 2.3% 13.1% 9.3% 28.3% Total 32.8% 3.8% 21.4% 8.3% 22.0% 11.7% 100.0% Total Shareholder Return Total Shareholder Return ('TSR') measures the return to shareholders from share price movements and dividend income and is used to compare returns between companies listed on the Stock Exchange. Total Shareholder Return measured over 1 year 3 years 5 years 10 years 15 years 20 years From From From From From From 31/03/2006 31/03/2004 31/03/2002 31/03/1997 31/03/1992 31/03/1987 %pa %pa %pa %pa %pa %pa Helical Bar plc 9.7 % 37.2% 23.6% 24.0% 29.5% 19.2% UK equity market 11.1 % 18.0% 8.6% 7.7% 10.8% 10.1% Listed real estate 22.1% 31.7% 23.5% 14.7% 16.0% 10.8% sector index Direct property 15.6% 18.1% 15.5% 13.5% 12.1% 11.6% Source: New Bridge Street Consultants/Datastream Our approach - how we create value Planning We are specialists in unlocking value by obtaining planning consents for more valuable uses. This year we gained consent for a retirement village of 144 units on the site of a disused hospital in Liphook, Hants, resulting in a £9 million increase in site value. We currently have brownfield sites in Cambridge, Horsham and Great Alne (west of Stratford upon Avon) where we are seeking retirement village consents. Residential use is being sought on industrial sites in Fleet and Whitstable and on a greenfield site in Telford. In Vauxhall, London we are working with the National Grid UK Pension Fund to secure a large residential allocation on an industrial estate fronting the Thames. Our biggest project is at White City where on behalf of a consortium of landowners we are master planning 4.5 million sq ft of residential and commercial space on 33 acres. In Milton Keynes we are in the process of gaining consent for a 300,000 sq ft retail warehouse and leisure scheme and a trade park on separate sites. Mixed use development In recent years we have sought to create more sustainable development with a variety of complementary uses. In particular, we have incorporated residential uses into a number of our schemes. These include 700 student housing units above 180,000 sq ft retail in Nottingham and 56 flats in our department store conversion in Cardiff which were all sold on the first morning of the launch, a year before completion. At C4.1 in Milton Keynes, with local developers Abbeygate, we are building 440 flats above a new 110,000 sq ft Sainsbury supermarket. These have been forward sold to Barratts and social landlord Genesis. At Parkgate, Shirley the construction of an 80,000 sq ft Asda supermarket together with 120,000 sq ft of retail and 200 residential units is planned to commence in 2008. In Wolverhampton an 11 acre site has been divided and sold into land parcels for residential, hotel, car showroom and public houses with a listed building to be converted into a casino. Office development We have a twenty year track record of building Grade A Central London office buildings, often in partnership with institutions and other landowners. We have recently been appointed by Pace Investments (City) Limited to manage the development in the City of 320,000 sq ft of offices pre-let to Man Group as their new headquarters. We are also partnering the National Grid UK Pension Fund on the refurbishment of 35,000 sq ft of offices and 23,000 sq ft of leisure and restaurants at Clareville House SW1. At Mitre Square, EC3 we have obtained planning consent for a 350,000 sq ft office scheme and plan to commence in 2008. At Bracknell we are moving forward through planning a major mixed use scheme which will comprise over 300,000 sq ft of offices and residential. Office refurbishment We like to breathe new life into unloved, empty office buildings in and around central London introducing some design flair and creating new hubs or communities of occupiers. In Battersea we recently converted an empty TV studio into offices with a communal bar and meeting space, which is now let to over twenty different businesses. We have just obtained planning consent to double the floor space, building a further 50,000 sq ft on part of the car park. Investment properties Rex House, SW1, Shepherds Building, W12 and 61 Southwark Street, SE1 represent over £100 million of buildings that we have refurbished in the past and retained for their growth potential. Retail development Through our joint ventures with Oswin and Overton, we have been building retail parks and shopping centres for over a decade. Last month we completed a retail park in Luton let to DFS, SCS, Carpetright, Harveys and sold to the Hercules Unit Trust for £36m. Planning consent is being sought for a 25,000 sq ft bulky goods retail warehouse scheme in Crewe. Retail asset management Reconfiguring and combining small retail units enables us to attract desirable new retailers into our retail centres. At the old Morgan's Department Store in Cardiff we have created units for Borders, TK Maxx, Moss Bros and Rossiters. At Letchworth we nearly doubled rental values over a three year period. We introduced a dozen new retailers to the town more than doubling the capital value and generating a near five-fold return on equity. Industrial development In partnership with Chancerygate we are building around 140 units totalling over 580,000 sq ft for onward sale to owner occupiers at two sites in Oxford and at Southampton, Southall (West London) and Stockport. We are also building 93,000 sq ft of mainly industrial space but also trade counters, creche and a convenience store in Hailsham with Quadrant Estates. In recent years we have completed successful schemes in Slough with Chancerygate and in Cambridge, Edenbridge and Harlow in partnership with Dencora. These schemes often include sales of parcels of land for hotels, car showrooms and self-storage and the development of trade counter schemes. Retirement villages As part of our planning business, we obtained retirement village consents and in the past sold off the sites for development. At Cawston, Rugby we retained an interest in the development as a consortium member and following its success we have elected to build out our recently consented scheme at Liphook. Outsourcing Our outsourcing venture, The Asset Factor, has made good progress during the year - evolving its positioning as an asset manager and property operator. We have secured a 50% stake in an internal property management business in partnership with Nelson Bakewell. Currently managing support services to a portfolio of over 30 million square feet in over 600 locations; it is one of the top three managers of multi- tenanted buildings in the UK. Our strategy is to invest in new management, improved systems and best practice processes to create and grow a premium branded, market leading property and facilities management business. We have also launched a new corporate services office business as a joint venture with fast growing sector specialist Avanta. Our first surplus space deal was signed in December 2006 with Prudential on 22,000 sq ft property in Dukesbridge House in Reading. The facility has since been refurbished and commenced operations in April 2007. Poland Helical Poland continues to make good progress. Sosnica Retail Park, Gliwice, will comprise a 64,000 sq m retail park anchored by a 12,000 sq m Carrefour hypermarket. The site is at the intersection of the new A1 and A4 motorways and will be completed to coincide with the new junction in the second half of 2009. At Wroclaw, a retail scheme for 10,000 sq m is planned adjacent to the existing Korona Retail Centre. Pre-lets have already been agreed with Electroworld and Carpetright. Work will start on site at the end of 2007 and terms have been agreed to forward sell the completed scheme to an Irish investor. A number of other retail schemes are under consideration. Held in the accounts as: I - Investment D - Development T - Trading Properties sold / Description Helical share projects completed during year Garden Square, Letchworth 150,000 sq ft shopping centre 95% Rental values increased from £35 psf to £65 psf Zone A during I ownership Sold for more than double 2003 purchase price Luton 80,000 sq ft retail park development 80% Pre-let to DFS, Carpetright, Harveys, SCS D Sold to Hercules for £36.2 million over 20% profit on cost Sandiacre, 145,000 sq ft industrial sold to Tesco for potential 75% Nottingham supermarket development T 32% profit on cost over one year Weston-super-Mare 29,000 sq ft retail warehouse development pre-let to Wickes 75% and presold to Scottish Widows D Completed October 2006 Profit over 40% on cost St Austell 36,000 sq ft Homebase sold for circa 100% above 2002 purchase 75% price I Worthing 26,000 sq ft Wickes sold for 69% above 2003 purchase price 75% I Sawston, Cambridge Final sales completed of 65,000 sq ft of offices and 67% industrial units developed for freehold sales. I/T 25% profit on cost Portfolio - schedules Held in the accounts as: I - Investment D - Development T - Trading Mixed use Description Helical share Developments Morgan Department Store, 160,000 sq ft retail - Borders, TK Maxx, and Moss Bros. 100% Cardiff Completion summer 2007. I 56 flats, all sold. Completion late 2007 Trinity Square, Nottingham 180,000 sq ft retail - Borders, TK Maxx, Dixons 65% 700 student units D Forward sold to Morley for over £100m Completion 2007 C4.1, Milton Keynes 110,000 sq ft Sainsbury's (forward sold) 50% 440 residential units (forward sold) D 35,000 sq ft of retail and offices. Completion 2008 White City, London W12 Planning consent to be sought for 4.5 million sq ft of Consortium commercial and residential on 33 acres landowner & development manager D Amen Corner, Bracknell Land and options held for a gateway office/mixed use 100% development off A329M D Bluebrick, Wolverhampton 11 acre site. Individual land sales completed for 208 75% flats, 20,000 D sq ft showroom, 88 bed hotel, 7,000 sq ft pub A casino use is proposed for the remaining listed building Ropemaker Park, Hailsham 70,000 sq ft light industrial, 27,000 sq ft trade counter, 50% 12,000 sq ft D car showroom, 4,000 sq ft convenience store and 4,000 sq ft creche Construction started 2006 Leisure Plaza, Milton Keynes Resolution to grant planning consent for 165,000 sq ft ILVA 50% store, 65,000 sq ft casino, 50,000 sq ft ice rink, plus a D further 25,000 sq ft of retail Tiviot Way, Stockport A planning application will be submitted in 2007 for 100,000 80% sq ft D industrial, 49,000 sq ft trade counter, 20,000 sq ft self storage, 20,000 sq ft builders merchant and car showroom Parkgate, Shirley, 200,000 sq ft retail - Asda (80,000 sq ft supermarket) 50% Birmingham 200 residential units D Construction to commence 2007 Hagley Road West, Quinton, 16,000 sq ft retail plus 15 residential units 75% Birmingham Under construction D Office Description Helical share Developments Mitre Square, London EC3 350,000 sq ft 50% Due to start on site 2008 D Riverbank House, London 320,000 sq ft pre-let to Man Group Development EC4 Due to start on site 2007 management role D Clareville House, London Refurbishment of 35,000 sq ft offices plus 23,000 sq ft of Development SW1 restaurant, nightclub and retail. management role Construction started D Battersea Studios (Phase 2), 50,000 sq ft of new office development commencing 75% London SW8 I Forestgate, Crawley Refurbishment of 24,000 sq ft completed 75% Scheme for two new buildings of 21,000 sq ft and 18,000 sq D ft Industrial Description Helical share Developments Watlington Road, Cowley, 71,000 sq ft of industrials and offices of which 25,000 sq 80% Oxford ft of offices sold and 27,000 sq ft of industrials sold or D under offer Longford Lane, Kidlington 140,000 sq ft of industrial units for freehold sales 80% Construction of Phase 1 due to complete summer 2007 D Scotts Road, Southall, West 250,000 sq ft of industrial units for freehold sales 80% London Construction to commence 2007 D Millbrook Trading Estate, 50,000 sq ft of industrial units, 65,000 sq ft of trade 80% Southampton counters, 20,000 sq ft of self storage to commence 2007 plus a further 4 acres of industrial land Retail Description Helical share developments Hatters Retail Park, Luton 80,000 sq ft retail warehouse - DFS, SCS, Carpetright, 80% Harveys, D Paul Simon Completion 2007 25,000 sq ft industrial to rear Macon Way, Crewe 25,000 sq ft bulky goods scheme 50% Subject to planning consent D Gliwice, Poland 64,000 sq m out of town retail 50% construction to commence 2007/08 D Wroclaw, Poland 10,000 sq m out of town retail 50% construction due to commence 2007 D Retirement Village Description Helical share Developments Lime Tree Village, Rugby 154 bungalows, cottages and apartments being constructed in 33% phases D 104 sold to date Bramshott Place, Liphook Planning consent granted for 144 units resulting in an 90% increase of over £9 million in site value D Construction to commence 2007 Projects with change of Description Helical use potential share Maudslay Park, Great Alne 314,000 sq ft industrial estate on a 20 acre site subject 90% to a planning appeal for 175 retirement home units D Waterside, Fleet 54,000 sq ft of industrial property on 5 acres with 75% planning application for 207 residential units I Upper High Street, Epsom Site with residential consent subject to a planning appeal 100% for an 80,000 sq ft supermarket D Vauxhall, London SW8 In partnership with National Grid UK Pension Fund we Profit share are seeking to gain an allocation for a large residential D led mixed use development on a Thames-side industrial estate. Ely Road, Milton, Cambridge 32,000 sq ft of industrial on 20 acres 90% Planning application to be submitted in 2007 for 120 unit D retirement village Thanet Way, Whitstable 80,000 sq ft of industrial on 6 acres with potential for 90% residential development D Cherry Tree Yard, Faygate, Former sawmill on 15 acres 90% Horsham Planning application to be submitted in 2007 for 175 D retirement home units Arleston, Telford 19 acre greenfield site with residential potential 90% D Winterhill, Milton Keynes 28,000 sq ft of warehouses and offices with retail 50% warehouse or trade counter potential I Cardiff Royal Infirmary Vacant hospital on a peppercorn lease with residential 75% potential I Income producing assets Offices Description Helical share Rex House, Lower Regent 80,000 sq ft office building refurbished in 2001 100% Street, London SW1 Short leasehold expiring 2035 I Acquired vacant in 2000 Shepherds Building, 150,000 sq ft of studio offices refurbished in 2001 and let 90% Shepherds Bush, London to over I W14 50 tenants Acquired vacant in 2000 61 Southwark Street, London 66,000 sq ft of offices that have been subject to a rolling 100% SE1 refurbishment and a new penthouse floor I Acquired 1998 Battersea Studios, London 55,000 sq ft of media style offices refurbished in 2006 75% SW8 Acquired vacant in 2005 I Amberley Court, Crawley Partial refurbishment of 31,000 sq ft 90% Office campus I Description Helical share Retail - in town Morgan & Royal Arcades, 56 units to be subject to intensive management on 100% Cardiff completion of I the adjoining development at the David Morgan Department Store Acquired 2005 1-5 Queens Walk, East 37,000 sq ft of retail opposite a proposed new retail 87% Grinstead scheme I Acquired 2005 Glasgow Portfolio Three unit shop investments and part of a multi-let office 100% block, I/T all in Glasgow City Centre acquired 2005 Retail - Description Helical share out of town Otford Road Retail Park, 43,000 sq ft with open A1 consent let to Wickes, Currys and 75% Sevenoaks Carpetright I Acquired 2003 Stanwell Road, Ashford 32,000 sq ft Focus DIY store 75% Acquired 2004 I 215 Brixham Road, Paignton 24,000 sq ft Focus store with open A1 consent 67% Acquired 2005 I Industrial Description Helical share Hawtin Park, Blackwood 251,000 sq ft estate, part vacant 100% Acquired 2003 I Fordham, Newmarket 70,000 sq ft of R&D space and offices on a 32 acre 53% landscaped I site let on a long lease Acquired 2007 Westgate, Aldridge 208,000 sq ft part vacant 80% Acquired 2006 I Dales Manor, Sawston, 70,000 sq ft multi-let estate 67% Cambridge Acquired 2003 I/D Golden Cross, Hailsham 102,000 sq ft unit let on a long RPI lease 100% Acquired 2001 I Standard Industrial Estate, 50,000 sq ft estate, recently refurbished 60% North Woolwich Acquired 2002 I Bushey Mill Lane, Watford 24,000 sq ft income producing with development potential 80% acquired 2006 D Financial Review Consolidated Income Statement Profits Profits before tax increased to £60.1m (2006: £57.1m) with higher development profits, an increased contribution from the company's joint ventures and lower net finance costs exceeding the reduction in trading profits and gains on investment properties. Adjusted profits before tax, which excludes the gains on sale and revaluation of investment properties, increased to £19.5m (2006: £13.6m). Profits after tax and minority interest increased to £52.1m (2006: £47.4m). Rental income Net rental income for the year fell to £14.8m (2006: £16.5m) reflecting, for a second year, the sale of let investment and trading properties and their replacement with vacant or partially let properties with refurbishment and rental growth prospects. During the year £48m of investment and trading properties yielding £2.1m of rental income were sold. £30m was used to add to the investment portfolio, principally through the refurbishment of existing properties, and £42m was used to purchase sites and properties to be re-developed. Together these currently produce a passing rent of £1.0m. Rent reviews and new lettings, net of lease expiries and rent free periods, added rental income of £1.6m on the remaining portfolio. Rental costs fell from £3.6m to £3.3m as vacant space at refurbished properties began to be let. Trading and other profits Trading profits of £2.1m were down on last year (2006: £13.4m) and arose from the sale of number of properties at Nottingham, Curtain Road, London EC2 and in Glasgow. Development profits The development programme produced profits at the retail schemes at Weston-super-Mare, Luton and Nottingham, office schemes at Ropemaker Place, London EC2, Chertsey and Hailsham and industrial/offices schemes in Oxford and Cambridge. 2007 2006 2005 Developments £ 000 £ 000 £ 000 Profits 13,587 4,594 12,664 Share of results of joint ventures During the year the main contributor to profits was the mixed use scheme at C4.1 Milton Keynes. Administrative expenses Administrative expenses increased to £17.5m (2006:£16.6m), principally as the result of an increased charge for share based payments. Administrative expenses, before impairment of goodwill and executive bonuses, remained at £6.1m (2006: £6.1m). Gain on sale and revaluation of investment properties During the year to 31 March 2007 the Group sold investment properties with book values of £45.6m (2006: £57.6m) on which it made £7.5m (2006: £7.8m) of profit. The properties sold included the shopping centre at Letchworth, retail warehouses in St. Austell and Worthing and a number of small units in Glasgow. The revaluation surplus for the year was £33.2m (2006: £35.7m). Finance costs and finance income Increases in interest rates on higher levels of debt during most of the year led to an increase in interest costs. However, capitalised interest more than offset the higher interest costs reducing net finance costs to £2.7m (2006: £7.4m). Finance income earned on cash deposits remained constant at £1.3m (2006:£1.3m) 2007 2006 2005 Net finance costs £ 000 £ 000 £ 000 Interest payable on bank 8,437 7,638 8,330 Loans Other interest payable 228 2,346 2,243 Finance arrangement costs 114 234 457 Interest capitalised (6,069) (2,797) (2,296) 2,710 7,421 8,734 Interest receivable (1,335) (1,295) (1,948) Taxation The tax charge for the year is less than the standard rate of 30% due to the use of capital allowances and tax losses. It is expected that the tax charge in the year to 31 March 2008 will be less than the standard rate of 30% due to the use of capital allowances. The deferred tax charge for the year reflects a provision for tax on revaluation surpluses and on temporary differences between the carrying amount of assets and liabilities in the financial statements and their corresponding tax bases in accordance with IFRS. Dividends The Board is recommending to shareholders at the Annual General Meeting on 25 July 2007 a final dividend of 2.75p per share (2006: 2.45p) to be paid on 27 July 2007 to shareholders on the register on 29 June 2007. This final dividend, amounting to £2.5m (2006:£2.2m) has not been included as a liability at 31 March 2007, in accordance with IFRS. 2007 2006 2005 Dividends pence pence pence Interim 1.60 1.45 1.32 Prior period final 2.45 2.20 2.00 Total 4.05 3.65 3.32 In the year to 31 March 2005 a 400p per share dividend was paid to shareholders holding 14,143,020 A ordinary 5p shares as part of the Return of Cash on 23 December 2004. Earnings per share Earnings per share in the year to 31 March 2007 were 58.0p (2006: 54.7p) per share and on a diluted basis were 53.7p (2006: 51.8p) per share. 2007 2006 2005 Earnings per share pence Pence pence Earnings per share 58.0 54.7 56.3 Diluted earnings per share 53.7 51.8 53.7 Diluted EPRA earnings per share 16.6 12.2 14.1 Diluted EPRA earnings per share excludes from earnings the IFRS effects of including the gain on sale and revaluation of investment properties (net of tax) and fair value movement on derivative financial instruments. Consolidated balance sheet Investment portfolio During the year investment properties with a book value of £45.6m were sold and partly replaced by £10.4m of new properties. In addition, around £18.6m of capital expenditure was spent on refurbishing various office, industrial and retail buildings. At 31 March 2007 there was a revaluation surplus of £33.2m (2006: £35.7m) on the investment portfolio. 2007 2006 2005 Investment portfolio £ 000 £ 000 £ 000 Cost or valuation at 1 April 294,583 271,315 335,114 Additions at cost 28,965 40,230 26,957 Disposals (45,638) (57,564) (124,210) Joint venture share of revaluation 4,938 4,869 3,357 Revaluation 33,180 35,733 30,097 Amortisation of finance lease (3) - - Cost or valuation at 31 March 316,025 294,583 271,315 Net asset values The performance of the Company in the year to 31 March 2007 has increased equity shareholders funds, on which the net asset value per share is calculated, by £52.1m. This has led to a 21% increase in diluted net assets per share to 307p (2006: 253p). Taking into account the directors' valuation of trading and development stock of £36m (2006: £29m), the diluted EPRA net assets per share increased by 21% to 374p (2006: 309p). 2007 2006 2005 Net asset values per ordinary share pence pence pence Diluted - 1 307 253 205 Adjusted diluted 334 278 224 Diluted EPRA - 2 374 309 238 Diluted EPRA triple NAV - 3 346 284 219 1 - net asset value diluted for share options. 2 - net asset value diluted for share options and adding back deferred tax on revaluation surpluses and capital allowances and fair value of financial instruments and trading stock. 3 - net asset value as per 2 less the deferred tax on revaluation surpluses and capital allowances. Borrowings and financial risk The Group's purchases of development sites have increased debt and, at 31 March 2007, net debt had increased from £112.7m to £134.0m. Taken with an increase in net assets of £52.1m, the increase in net debt combined to reduce the Group's net gearing from 49% to 47%. 2007 2006 2005 Net debt and gearing Net debt £134.0m £112.7m £125.0m Gearing 47% 49% 67% The Group seeks to manage financial risk by ensuring that there is sufficient financial liquidity to meet foreseeable needs and to invest surplus cash safely and profitably. At the year end, Helical had £74m of undrawn bank facilities and cash of £3.4m (2006: £10.1m). In addition it had £195m (2006: £158m) of uncharged property on which the Group could borrow funds. As at 7 June 2007, Helical's average interest rate was 6.4%. Performance measures In order to evaluate its overall performance against other small to mid-size capital companies, both here and abroad, Helical looks at equity value added. Equity value added Year ended 31 March 2007 2006 2005 Capital employed £m 411 336 347 Return on capital % 21.6 19.7 24.2 Weighted average cost of capital % 7.7 7.0 6.7 Spread % 13.9 12.7 17.5 Equity value added £m 46.7 44.1 60.9 Nigel McNair Scott Finance Director Unaudited Consolidated Income Statement For the year to 31 March 2007 Year To Year To 31 March 31 March 2007 2006 Notes £000 £000 Revenue 3 123,176 119,274 Net rental income 4 14,771 16,524 Trading profits 2,094 13,441 Development profits 13,587 4,594 Share of results of joint ventures 6,196 437 Other operating income 766 235 Gross profit before gain and sale on investment properties 37,414 35,231 Gains on sale and revaluation of 5 40,637 43,551 investment properties Gross profit 78,051 78,782 Administrative expenses 6 (17,544) (16,582) Operating profit 60,507 62,200 Finance costs 7 (2,710) (7,421) Finance income 1,335 1,295 Change in fair value of derivative financial instruments 956 1,046 Profit before tax 60,088 57,120 Tax 8 (8,000) (9,676) Profit after tax 52,088 47,444 - attributable to minority interests 300 (124) - attributable to equity shareholders 51,788 47,568 Profit for the year 52,088 47,444 Basic earnings per share 9 58.0p 54.7p Diluted earnings per share 9 53.7p 51.8p Unaudited Consolidated Balance Sheet At 31 March 2007 At At 31 March 31 March 2007 2006 Notes £000 £000 Non-current assets Investment properties 10 316,025 294,583 Owner occupied property, 11 351 489 plant and equipment Investment in joint ventures 6,188 295 Goodwill 12 30 68 322,594 295,435 Current assets Land, developments and trading Properties 13 110,815 86,076 Available-for-sale investments 14 912 66 Derivative financial instruments 345 - Trade and other receivables 15 70,526 33,925 Cash and cash equivalents 16 3,389 10,135 185,987 130,202 Total assets 508,581 425,637 Current liabilities Trade payables and other payables 17 (64,203) (49,506) Tax liabilities (3,909) (3,394) Borrowings 18 (31,560) (42,683) (99,672) (95,583) Non-current liabilities Borrowings 18 (105,847) (80,160) Derivative financial instruments - (610) Deferred tax provision 8 (20,697) (19,005) Obligations under finance leases 19 (179) (182) (126,723) (99,957) Total liabilities (226,395) (195,540) Net assets 282,186 230,097 Unaudited Consolidated Balance Sheet At 31 March 2007 At At 31 March 31 March 2007 2006 Notes £000 £000 Equity Called-up share capital 20 1,222 1,209 Share premium account 23 42,520 42,490 Revaluation reserve 23 79,664 64,820 Capital redemption reserve 23 7,478 7,478 Other reserves 23 291 291 Retained earnings 23 157,006 120,948 Own shares held 22/23 (5,995) (7,139) Equity shareholders' funds 282,186 230,097 Minority interests - - Total equity 282,186 230,097 Net assets per share Basic 24 311p 259p Diluted 24 307p 253p Adjusted Diluted 24 334p 278p Diluted EPRA 24 374p 309p Unaudited Consolidated Cash Flow Statement For the year to 31 March 2007 Year To Year To 31 March 31 March 2006 2007 £000 £000 Cash flows from operating activities Profit before tax 60,088 57,120 Depreciation 180 179 Gain on investment properties (40,637) (43,551) Other non-cash items (6,294) 4,626 Cash flows from operations before changes in working capital 13,337 18,374 Change in trade and other receivables (36,317) 3,232 Change in land, developments and trading properties (19,705) 11,989 Change in trade and other payables 14,828 (30,779) Cash (outflow) / inflow from operations (27,857) 2,816 Finance costs (8,035) (10,256) Finance income 574 1,295 Minority interest dividends paid (300) (3,545) Dividends from joint ventures 303 2,337 Tax paid (2,602) (4,743) (10,060) (14,912) Cash flows from operating activities (37,917) (12,096) Cash flows from investing activities Purchase of investment property (27,772) (39,055) Sale of investment property 53,446 65,991 Purchase of investments (4,164) - Sale of investments 3,909 - Purchase of shares by ESOP (5,084) (85) Sale of plant and equipment 7 47 Purchase of plant and equipment (48) (140) 20,294 26,758 Cash flows from financing activities Issue of shares 43 3,418 Borrowings drawn down 46,206 35,146 Borrowings repaid (31,616) (65,647) Equity dividends paid (3,615) (3,127) Return of cash-B share repurchase - (2,451) Refinancing costs (141) (69) 10,877 (32,730) Net decrease in cash and cash equivalents (6,746) (18,068) Cash and cash equivalents at 1 April 2006 10,135 28,203 Cash and cash equivalents at 31 March 2007 3,389 10,135 Unaudited Consolidated Statement of Recognised Income and Expense For the year to 31 March 2007 Year To Year To 31 March 31 March 2007 2006 £000 £000 Profit for the year 52,088 47,444 Fair value movements on available for-sale-investments (24) (14) Total recognised income and expense for the year 52,064 47,430 Unaudited Notes to the Preliminary Announcement 1. Financial Information The financial information contained in this report does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The full accounts for the year ended 31 March 2006, which received an unqualified report from the Auditors, and did not contain a statement under s237(2) or (3) of the Companies Act 1985, have been filed with the Registrar of Companies. Financial statements for the year ended 31 March 2007 will be presented to the Members at the Annual General Meeting on 25 July 2007. The auditors have indicated that their report on these Financial Statements will be unqualified. 2. Principal Accounting Policies Basis of preparation The preliminary announcement has been prepared in accordance with International Financial Reporting Standards ('IFRS') but does not contain sufficient information to comply fully with IFRS. The Financial Statements to be presented to Members at the 2007 AGM are expected to fully comply with IFRS. The preliminary announcement has been prepared under the historical cost convention as modified by the revaluation of investment properties, available for sale investments and derivative financial instruments. The measurement and principal accounting policies are set out below. Basis of consolidation The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to 31 March 2007. Subsidiary undertakings are those entities over which the Group has the ability to govern the financial and operating policies through the exercise of voting rights. Unrealised gains on transactions between the Company and its subsidiaries and between subsidiaries are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of impairment of the asset transferred. Revenue recognition Property revenue consists of gross rental income on an accruals basis, together with sales of trading and development properties, excluding sales of investment properties. Rental income receivable in the period from lease commencement to the earlier of lease expiry and any tenant option to break is spread evenly over that period. Any incentive for lessees to enter into a lease agreement and any costs associated with entering into the lease are spread over the same period. Revenue in respect of investment and other income represents investment income, fees and commissions earned on an accruals basis and profits or losses recognised on investments held for the short-term. Dividends are recognised when the shareholders' right to receive payment has been established. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate. A property is regarded as sold when the significant risks and returns have been transferred to the buyer. For conditional exchanges, sales are recognised as the conditions are satisfied. Income tax The charge for current taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or substantively enacted by the balance sheet date. Tax payable upon realisation of revaluation gains recognised in prior periods is recorded as a current tax charge with a release of the associated deferred taxation. Deferred tax is provided using the balance sheet liability method in respect of temporary differences between the book value and tax base of relevant assets and liabilities. Deferred tax is provided on all temporary differences. Deferred tax is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. It is recognised in the Income Statement except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Investments Investments are classified as available-for-sale investments or trading investments dependent on the purpose for which they were acquired. Available-for-sale investments, being investments intended to be held for an indefinite period, are revalued to fair value at the balance sheet date. For listed investments, fair value is the bid market listed value ruling at the balance sheet date. Gains or losses arising from changes in fair value are included in the revaluation reserve except to the extent that losses are attributable to impairment, in which case they are recognised in the income statement. Upon disposal, accumulated fair value adjustments are included in the income statement. Trading investments, acquired principally for the purpose of generating a profit from short-term fluctuations in price, are included in current assets and revalued to fair value. Realised and unrealised gains or losses arising from changes in fair value are included in the income statement in the period in which they arise. Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits with banks, other short term, highly liquid investments with original maturities of three months or less, net of bank overdrafts. Investment in joint ventures Entities whose activities are jointly controlled by the Group and by other ventures independent of the Group are accounted for using the equity method of accounting. Under IFRS the Group's share of the results and of the net assets of the joint ventures are shown in the Consolidated Income Statement and Consolidated Balance Sheet respectively. Goodwill Goodwill representing the excess of the cost of acquisition over the fair value of the Group's share of identifiable net assets acquired, is capitalised and reviewed annually for impairment. Goodwill is carried at cost less accumulated impairment losses. Negative goodwill is recognised immediately after acquisition in the income statement. Depreciation In accordance with IAS 40 on Investment Property, depreciation is not provided for on freehold investment properties or on leasehold investment properties. The Group do not own the freehold land and buildings which it occupies. Costs incurred in respect of leasehold improvements to the Group's head office at 11-15 Farm Street, London W1J 5RS are capitalised and held as short term leasehold improvements. Leasehold improvements, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Residual values are re-assessed annually. Depreciation is charged so as to write off the cost of assets less residual value over their estimated useful lives, using the straight line method, on the following basis: Short leasehold improvements - 10% or length of lease if shorter Plant and equipment - 25% Investment properties Investment properties are properties owned or leased by the group which are held for long-term rental income and for capital appreciation. Investment properties are initially recognised at cost and revalued at the balance sheet date to fair value as determined by professionally qualified external valuers. In accordance with IAS40, investment properties held under the leases are stated gross of the recognised finance lease liability. Gains or losses arising from changes in the fair value of investment properties are included in other operating income in the income statement of the period in which they arise. In accordance with IAS 40, as the group uses the fair value model, no depreciation is provided in respect of investment properties including integral plant. When the group redevelops an existing investment property for continued future use as investment property, the property remains an investment property measured at fair value and is not reclassified. Interest is capitalised before tax relief until the date of practical completion. Leases Leases are classified according to the substance of the transaction. A lease that transfers substantially all the risks and rewards of ownership to the lessee is classified as a finance lease. All other leases are classified as operating leases. In accordance with IAS 40, finance and operating leases of investment property are accounted for as finance leases and recognised as an asset and an obligation to pay future minimum lease payments. The investment property asset is included in the balance sheet at fair value, gross of the recognised finance lease liability. Lease payments are allocated between the liability and finance charges so as to achieve a constant financing rate. Assets leased out under operating leases are included in investment property, with rental income recognised on a straight-line basis over the lease term. Land, developments and trading properties Land, developments and trading properties held for sale are inventory and are included in the balance sheet at the lower of cost and net realisable value. Derivative financial instruments Derivative financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. The Group enters into derivative transactions such as interest, caps and floors in order to manage the risks arising from its activities. Derivatives are initially recorded at fair value and are subsequently remeasured to fair value based on market prices, estimated future cash flows and forward rates as appropriate. Any change in the fair value of such derivatives is recognised immediately in the income statement as a finance cost. Share based payments The Company provides share-based payments in the form of share options, performance share plan awards and a share incentive plan. All share-based payment arrangements granted after 7 November 2002 that had not vested prior to 1 January 2005 are recognised in the financial statements. The Company uses the Stochastic valuation model and the resulting value is amortised through the Income Statement over the vesting period of the share-based payments. For the performance share plan and share incentive plan awards, where non-market conditions apply, the expense is allocated over the vesting period, to the Income Statement based on the best available estimate of the number of awards that are expected to vest. Estimates are subsequently revised if there is any indication that the number of awards expected to vest differs from previous estimates. Borrowing and borrowing costs Interest bearing loans and overdrafts are recorded at fair value, net of finance and other costs yet to be amortised. Finance and other costs incurred in respect of the obtaining and maintenance of borrowings are accounted for on an accruals basis and written-off to the Income Statement over the length of the associated borrowings. Borrowing costs directly attributable to the acquisition and construction of new development and investment properties are added to the costs of such properties until the earliest of: • the date when the development or investment becomes fully let; • the date when the income exceeds the outgoings; and, • the date of completion of the development or investment. All other borrowing costs are recognised in the income statement in the period in which they are incurred. Trade receivables Trade receivables do not carry any interest and are initially recognised at fair value and subsequently at amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts. Trade and other payables Trade and other payables are not interest bearing and are initially recognised at fair value and subsequently at amortised cost. Net asset value per share Net asset values per share have been calculated in accordance with the best practice recommendations of the European Public Real Estate Association ('EPRA'). Earnings per share Earnings per share have been calculated in accordance with IAS 33 and the best practice recommendations of EPRA. Use of estimates and judgements To be able to prepare accounts according to generally accepted accounting principles, management must make estimates and assumptions that effect the asset and liability items and revenue expense amounts recorded in the financial accounts. These estimates are based on historical experience and various other assumptions that management and the Board of Directors believe are reasonable under the circumstances. The results of this form the basis for making judgements about the carrying value of assets and liabilities that are not readily available from other sources. Areas requiring the use of estimates and critical judgement that may significantly impact on the Group's earnings and financial position are revenue and cost recognition on developments, valuation of investment properties, calculation of deferred tax liabilities, calculation and assessment of recoverability of deferred tax assets and the recognition of share-based payment charges. Dividends Dividend distributions to the Company's shareholders are recognised as a liability in the financial statements in the period in which dividends are declared. 3. Revenue Year To Year To 31 March 31 March 2006 2007 £000 £000 Rental income 18,044 20,102 Trading property sales 12,355 72,101 Developments 88,685 26,756 Other income 4,092 315 123,176 119,274 4. Net rental income Year To Year To 31 March 31 March 2007 2006 £000 £000 Gross rental income 18,044 20,102 Rents payable (137) (489) Other property outgoings (3,136) (3,089) Net rental income 14,771 16,524 5. Gain on sale and revaluation of investment properties Year To Year To 31 March 31 March 2007 2006 £000 £000 Net proceeds from the sale of investment properties 53,446 65,992 Book value (note 10) (45,638) (57,565) Lease incentive and letting costs adjustment (351) (609) Gain on sale of investment properties 7,457 7,818 Revaluation gains on investment properties 33,180 35,733 Gain on sale and revaluation of investment properties 40,637 43,551 6. Administrative expenses Year To Year To 31 March 31 March 2007 2006 £000 £000 Administrative expenses 17,544 16,582 Operating profit is stated after: Staff costs 10,131 9,488 Share-based payments charge 4,578 3,458 Depreciation 180 179 Auditors' remuneration 135 137 Administrative expenses includes salaries and cash bonuses in respect of the directors of £5,786,000 (2006: £5,666,000) plus cash bonuses payable to directors arising out of their exercise of share options of £754,000 (2006: £693,000). 7. Finance costs Year To Year To 31 March 31 March 2007 2006 £000 £000 Interest payable on bank loans and overdrafts 8,437 7,638 Other interest payable and similar charges 228 2,346 Finance arrangement costs 114 234 Interest capitalised (6,069) (2,797) Finance costs 2,710 7,421 8. Taxation Year To Year To 31 March 31 March 2007 2006 £000 £000 The tax charge is based on the profit for the period and represents: United Kingdom corporation tax at 30% (2006: 30%) - Group corporation tax 6,449 5,983 - adjustments in respect of prior periods (141) - Current tax charge 6,308 5,983 Deferred tax -capital allowances (7) (804) -other temporary differences (929) (872) -revaluation surpluses 2,628 5,369 Deferred tax 1,692 3,693 Tax on profit 8,000 9,676 Deferred tax Capital gains 23,555 20,927 Capital allowances 2,168 2,175 Other temporary differences (5,026) (4,097) Deferred tax provision 20,697 19,005 9. Earnings per share The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year. Shares held by the ESOP, which has waived its entitlement to receive dividends, are treated as cancelled for the purposes of this calculation. The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares and the post tax effect of dividends on the assumed exercise of all dilutive options. The earnings per share are calculated in accordance with IAS 33 and the best practice recommendations of the European Public Real Estate Association ('EPRA'). Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below. Year To Year To 31 March 31 March 2007 2006 000's 000's Ordinary shares in issue 94,372 90,506 Weighting adjustment (5,028) (3,540) Weighted average ordinary shares in issue for calculation of basic earnings 89,344 86,966 per share Weighting adjustments 7,122 4,918 Weighted average ordinary share in issue for calculation of diluted earnings 96,466 91,884 per share Earnings used for calculation of basic and diluted earnings per share 51,788 47,568 Basic earnings per share 58.0p 54.7p Diluted earnings per share 53.7p 51.8p Earnings used for calculation of basic and diluted earnings per share 51,788 47,568 Gain on sale and revaluation of investment properties (40,637) (43,551) Fair value movement on derivative financial instruments (955) (1,046) Deferred tax in respect of investment properties 2,621 4,565 Tax on profit on disposal of investment properties 3,191 3,632 Earnings used for calculation of diluted EPRA earnings per share 16,008 11,168 Diluted EPRA earnings per share 16.6p 12.2p 10. Investment properties Freehold Leasehold Total Freehold Leasehold Total 31.03.07 31.03.07 31.03.07 31.03.06 31.03.06 31.03.06 £000 £000 £000 £000 £000 £000 Group Fair value at 1 April 211,451 83,132 294,583 203,683 67,632 271,315 Additions at cost 32,445 1,458 33,903 39,800 5,300 45,100 Disposals (15,174) (30,464) (45,638) (57,565) - (57,565) Revaluation surplus 24,974 8,206 33,180 25,533 10,200 35,733 Amortisation - (3) (3) - - - Fair value at 31 March 253,696 62,329 316,025 211,451 83,132 294,583 Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £1,192,000 (2006: £300,000). Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of £2,505,000 (2006: £1,313,000). 11. Owner occupied property, plant and equipment Short Vehicles Short Vehicles leasehold and office Leasehold and office improvements equipment Total Improvements equipment Total 31.03.07 31.03.07 31.03.07 31.03.06 31.03.06 31.03.06 £000 £000 £000 £000 £000 £000 Cost at 1 April 646 866 1,512 646 853 1,499 Additions at cost - 49 49 - 142 142 Disposals - (137) (137) - (129) (129) Cost at 31 March 646 778 1,424 646 866 1,512 Depreciation at 1 April 505 518 1,023 458 501 959 Provision for the year 47 133 180 47 132 179 Eliminated on disposals - (130) (130) - (115) (115) Depreciation at 31 March 552 521 1,073 505 518 1,023 Net book amount at 31 March 94 257 351 141 348 489 12. Goodwill At At 31 March 31 March 2007 2006 £000 £000 Cost at 1 April 1,515 1,515 Additions - - Cost at 31 March 1,515 1,515 Impairment at 1 April 1,447 1,333 Impairment for the year 38 114 Impairment at 31 March 1,485 1,447 Fair value at 31 March 30 68 13. Land, developments and trading properties At At 31 March 31 March 2007 2006 Cost £000 £000 Development sites 109,165 76,762 Properties held as trading stock 1,650 9,314 110,815 86,076 The directors' valuation of trading and development stock showed a surplus of £36m above book value at 31 March 2007 (2006: £29m). Interest capitalised in respect of the development of sites is included in stock to the extent of £4,523,000 (2006: £2,867,000). Interest capitalised during the period in respect of development sites amounted to £4,877,000 (2006: £2,497,000) During the year properties held as trading stock at 31 March 2006 with a book value of £36,914,000 have been re-categorised as development sites. 14. Available-for-sale investments At At 31 March 31 March 2007 2006 £000 £000 UK listed investments at fair value 12 66 Unlisted investment at fair value 900 - 912 66 15. Trade and other receivables At At 31 March 31 March 2007 2006 £000 £000 Trade receivables 50,850 13,156 Other receivables 6,575 5,999 Prepayments and accrued income 13,101 14,770 70,526 33,925 16. Cash and cash equivalents At At 31 March 31 March 2007 2006 £000 £000 Rent deposits and cash held at managing agents 1,852 1,980 Cash secured against debt and cash held at solicitors 1,045 189 Cash held to fund future development costs - 382 Cash deposits 492 7,584 3,389 10,135 17. Trade payables and other payables At At 31 March 31 March 2007 2006 £000 £000 Trade payables 9,841 8,424 Other payables 8,552 7,372 Accruals and deferred income 45,810 33,710 64,203 49,506 18. Borrowings At At 31 March 31 March 2007 2006 Bank overdraft and loans - maturity £000 £000 Due within one year 31,560 42,683 Due after more than one year 105,847 80,160 137,407 122,843 At At 31 March 31 March 2007 2006 Undrawn committed bank facilities £000 £000 Expiring in one year or less 44,200 45,000 Expiring in more than one year but not more than two years 27,456 2,011 Expiring in more than two years 2,000 8,691 73,656 55,702 Interest Rates % Expiry At 31 March 2007 £000 Fixed rate borrowings - fixed 9.050 Feb 2009 6,815 - swap rate plus bank margin 5.939 Sep 2009 14,324 - swap rate plus bank margin 6.231 Feb 2008 5,800 - swap rate plus bank margin 6,052 Jan 2011 4,200 - swap rate plus bank margin 5.341 Jun 2011 4,536 - swap rate plus bank margin 6,052 Nov 2010 5,200 Weighted average 6.189 Nov 2009 40,875 Floating rate borrowings 6.326 June 2009 96,802 Total borrowings 137,677 Deferred arrangement costs (270) 137,407 Floating rate borrowings bear interest at rates based on LIBOR. Hedging In addition to the fixed rates, borrowings are also hedged by the following financial instruments: Instrument Value Rate Start Expiry £000 % Current - cap 80,000 7.000 Jan 2006 Sept 2009 Gearing At At 31 March 31 March 2007 2006 £000 £000 Total borrowings 137,407 122,843 Cash (3,389) (10,135) Net borrowings 134,018 112,708 Net assets 282,186 230,097 Gearing 47% 49% Net borrowings exclude the Group's share of borrowings in joint ventures of £22,666,000 (2006: £11,718,000). 19. Obligations under finance leases At At 31 March 31 March 2007 2006 £000 £000 Lease payments under finance leases fall due: Not later than one year 14 14 Later than one year and not later than five years 46 46 Later than five years 119 122 Present value of finance lease obligations 179 182 20. Share capital At At 31 March 31 March 2007 2006 £000 £000 Authorised 39,577 39,577 39,577 39,577 The authorised share capital of the Company is £39,576,626.60 divided into ordinary shares of 1p each, 5.25p convertible cumulative redeemable preference # shares 2012 of 70p each and deferred shares of 1/8p each Allotted, called up and fully paid - 95,719,432 ordinary shares of 1p each 957 944 - 212,145,300 deferred shares of 1/8 p each 265 265 1,222 1,209 As at 1 April 2006, the Company had 94,371,925 ordinary 1p shares in issue. On 30 June 2006, options over 654,792 ordinary 1p shares were exercised increasing the issued share capital of the Company to 95,026,717 ordinary 1p shares. On 29 September 2006, options over 33,895 ordinary 1p shares were exercised. On 4 December 2006, options over 229,320 ordinary 1p shares were exercised. On 21 December 2006, options over 429,500 ordinary 1p shares were exercised. At 31 March 2007, there were 95,719,432 ordinary 1p shares in issue. Share options At 31 March 2007 unexercised options over 1,956,070 (31 March 2006: 3,655,510) new ordinary 1p shares in the Company and 3,964,695 (31 March 2006: 6,234,695) purchased ordinary 1p shares held by the ESOP had been granted to directors and employees under the Company's share option schemes. During the period, no new options were granted. Options over 1,699,440 new ordinary 1p shares and 2,270,000 purchased ordinary 1p shares were exercised. 21. Dividends Year To Year To 31 March 31 March 2007 2006 £000 £000 Attributable to equity share capital Ordinary -interim paid of 1.60p (2006: 1.45p) per share 1,441 1,296 -prior period final paid 2.45p (2006: 2.20p) per share 2,174 1,831 Total dividends paid 4.05p (2006 : 3.65p) 3,615 3,127 The interim dividend of 1.60p was paid on 29 December 2006 to shareholders on the register on 8 December 2006. The final dividend, if approved by shareholders at the AGM on 25 July 2007, amounting to £2,480,000 representing 2.75 pence per share, will be paid on 27 July 2007 and has not been included as a liability as at 31 March 2007. 22. Own shares held Following approval at the 1997 Annual General Meeting the Company established the Helical Bar Employees' Share Ownership Plan Trust (the 'Trust') to be used as part of the remuneration arrangements for employees. The purpose of the Trust is to facilitate and encourage the ownership of shares by or for the benefit of employees by the acquisition and distribution of shares in the Company. The Trust purchases shares in the Company to satisfy the Company's obligations under its Share Option Schemes and Performance Share Plan. At 31 March 2007, the Trust held 5,174,701 (31 March 2006: 5,648,080) ordinary shares in Helical Bar plc. At 31 March 2007, options over 3,964,695 (31 March 2006: 6,234,695) ordinary shares in Helical Bar plc had been granted through the Trust. At 31 March 2007, awards over 5,960,675 (31 March 2006: 4,514,380) ordinary shares in Helical Bar plc had been made under the terms of the Performance Share Plan. 23. Statement of Changes in Equity Capital Profit Own Share Share Revaluation redemption Other and loss shares Capital premium reserve reserve reserves account held Total £000 £000 £000 £000 £000 £000 £000 £000 At 1 April 2005 1,170 39,110 54,530 7,467 291 86,822 (6,893) 182,497 Issue of shares 39 3,380 - - - - - 3,419 Purchase of shares - 11 (11) (472) (472) Revaluation surplus 30,364 (30,364) - Realised on disposals (20,074) 20,074 - Total recognised 47,430 47,430 income Dividends paid (3,127) (3,127) Performance share plan 3,128 3,128 Provision for ESOP purchase (3,128) (3,128) Share options 226 226 exercised Minority Interest 124 124 As at 31 March 2006 1,209 42,490 64,820 7,478 291 120,948 (7,139) 230,097 Issue of shares 13 30 43 Revaluation surplus 30,552 (30,552) Realised on disposals (15,708) 15,708 Total recognised 52,064 52,064 income Dividends paid (3,615) (3,615) Purchase of shares (5,155) (5,155) Share options 71 71 exercised Performance share plan 8,981 8,981 Own shares held (6,228) 6,228 - Minority interest (300) (300) As at 31 March 2007 1,222 42,520 79,664 7,478 291 157,006 (5,995) 282,186 24. Net assets per share At At 31 March 31 March At 2007 At 2006 31 March Number of 31 March Number of 2007 Shares Pence per 2006 Shares Pence per £000 000's share £000 000's share Net asset value 282,186 95,719 230,097 94,372 Own shares held by ESOP (5,174) (5,648) Less deferred shares (265) (265) Basic net asset value 281,921 90,545 311 229,832 88,724 259 Unexercised share options 2,002 1,956 3,506 3,655 Diluted net asset value 283,923 92,501 307 233,338 92,379 253 - Fair value of financial (345) 427 instruments 2,168 2,175 - Deferred tax on capital allowances 23,555 20,927 - Deferred tax on chargeable gains Adjusted diluted net asset value 309,301 92,501 334 256,867 92,379 278 - Fair value of trading properties 36,480 28,704 Diluted EPRA net asset value 345,781 92,501 374 285,571 92,379 309 - Fair value of financial statements 345 (427) - Deferred tax on capital allowances (2,168) (2,175) - Deferred tax on capital gains (23,555) (20,927) Diluted EPRA NNNAV 320,403 92,501 346 262,042 92,379 284 This information is provided by RNS The company news service from the London Stock Exchange

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