Final Results

Peel Hldgs PLC
30 June 2004





                              PEEL HOLDINGS p.l.c.

                                 PRESS RELEASE

The preliminary announcement of the audited results of Peel Holdings p.l.c. for
the year ended 31 March 2004 was made today 30 June 2004.

                                                                       Changes
                                                                          from
                                                  2004       2003    last year
                                       Note      £'000      £'000        £'000                   
Turnover                                       214,490    161,181       53,309
-------------------------------------------------------------------------------         
Profit on ordinary activities before
taxation                                        29,387     30,151         (764)

Tax on profit on ordinary activities           (14,427)   (12,743)      (1,684)
Minority interests                                  (9)      (101)          92
-------------------------------------------------------------------------------   
Profit for the financial year                   14,951     17,307       (2,356)
-------------------------------------------------------------------------------  
Earnings per ordinary share
Basic earnings                            2      22.78p     26.66p       (3.88)p
Diluted earnings                          2      22.27p     25.78p       (3.51)p
-------------------------------------------------------------------------------  
Ordinary dividend                         1        4.8p      15.0p       (10.2)p
-------------------------------------------------------------------------------  

                                                                   Changes from
                                                  2004        2003    last year
                                                 £'000       £'000        £'000

Shareholders' funds                          1,238,724     873,205      365,519
-------------------------------------------------------------------------------  
Net assets                                   1,244,461     875,409      369,052
------------------------------------------------------------------------------- 
Net assets per ordinary share
Basic                                     3     1,845p      1,404p         441p
Diluted                                   3     1,845p      1,301p         544p
Adjusted diluted                          3     1,205p        759p         446p
------------------------------------------------------------------------------- 

APPENDED ARE:

(1) The Preliminary Announcement of the results to the London Stock Exchange.

(2) Extracts from the Chairman's Statement and the Operating and Financial
Review.




                Peel Holdings p.l.c. and subsidiary undertakings
                Preliminary announcement of the audited results
                        for the year ended 31 March 2004

Group Profit and Loss Account for the year ended 31 March 2004

                                                             2004          2003
                                               Note         £'000         £'000
Turnover                                                  214,490       161,181
------------------------------------------------------------------------------- 
Group operating profit                                    105,679        99,316
Share of operating profit in
joint ventures                                              3,039           217
Profit on disposal of fixed                                         
assets                                                     11,509         6,431
------------------------------------------------------------------------------- 
                                                                                 
Profit on ordinary activities
before interest and taxation                              120,227       105,964
Net interest payable and similar
charges                                                   (90,840)      (75,813)
------------------------------------------------------------------------------- 
Profit on ordinary activities
before taxation                                            29,387        30,151
Tax on profit on ordinary
activities                                                (14,427)      (12,743)
------------------------------------------------------------------------------- 
Profit on ordinary activities
after taxation                                             14,960        17,408
Minority interests                                             (9)         (101)
------------------------------------------------------------------------------- 
Profit for the financial year                              14,951        17,307
Dividends                                       1          (3,807)      (10,057)
------------------------------------------------------------------------------- 
Retained profit for the financial
year                                                       11,144         7,250
------------------------------------------------------------------------------- 
Earnings per ordinary share
Basic earnings                                  2          22.78p        26.66p
Diluted earnings                                2          22.27p        25.78p
------------------------------------------------------------------------------- 

The Group's turnover is stated net of turnover for joint ventures and the
Group's reported net interest payable and taxation includes the share of results
of joint ventures. These are not material to the Group results and accordingly
are not separately disclosed in this announcement.

All results have arisen from continuing activities.

The acquisition of 75 per cent. of Teesside International Airport Limited on 1
April 2003 contributed £9,787,000 and a £682,000 loss to the reported Group
turnover and Group operating profit respectively.

The acquisition of the remaining 40 per cent. share of Glasgow Harbour Limited
on 7 October 2003 contributed £4,478,000 and a profit of £3,380,000 to the
reported Group turnover and Group operating profit respectively.





Group Balance Sheet as at 31 March 2004
                                                            2004        2003
                                                Note       £'000       £'000
Fixed assets
Intangible assets
Goodwill                                                  30,629      39,336
Negative goodwill                                         (2,874)          -
Tangible assets
Investment properties                                  2,128,999    1,707,819
Other fixed assets                                       236,838      202,886
Joint ventures
-------------------------------------------------------------------------------
Share of gross assets                                     30,842       57,435
Share of gross liabilities                               (26,936)     (42,581)
Loan accounts                                              7,894       12,935
-------------------------------------------------------------------------------
                                                          11,800       27,789
Investments                                               34,942       34,942
-------------------------------------------------------------------------------  
                                                       2,440,334    2,012,772
------------------------------------------------------------------------------- 
Current assets
Stocks                                                    51,632       11,234
Debtors                                                   72,516       44,257
Cash at bank and in hand                                 123,454      103,883
------------------------------------------------------------------------------- 
                                                         247,602      159,374
Creditors (amounts falling due within one year)         (128,766)    (239,825)
------------------------------------------------------------------------------- 
Net current assets/(liabilities)                         118,836      (80,451)
------------------------------------------------------------------------------- 
Total assets less current liabilities                  2,559,170    1,932,321
Creditors (amounts falling due after more than
one year)                                             (1,258,029)  (1,005,568)
Provisions for liabilities and charges                   (53,443)     (43,546)
------------------------------------------------------------------------------- 
Net assets excluding pension liability                  1,247,698     883,207
Pension liability                                          (3,237)     (7,798)
------------------------------------------------------------------------------- 
Net assets including pension liability                  1,244,461     875,409
------------------------------------------------------------------------------- 
Financed by capital and reserves
Consolidated capital and reserves                       1,299,052     933,533
Shares held by Largs Limited in Peel Holdings
p.l.c.                                                    (60,328)    (60,328)
------------------------------------------------------------------------------- 
Shareholders' funds                                     1,238,724     873,205
Equity minority interests                                   5,737       2,204
------------------------------------------------------------------------------- 
                                                        1,244,461     875,409
------------------------------------------------------------------------------- 
Net assets per ordinary share
Basic                                              3       1,845p      1,404p
Diluted                                            3       1,845p      1,301p
Adjusted diluted                                   3       1,205p        759p
------------------------------------------------------------------------------- 





Group Cash Flow Statement for the year ended 31 March 2004
                                                              2004       2003
                                                   Note      £'000      £'000
Cash inflow from operating activities              4(a)    126,372    107,165
Returns on investments and servicing of finance    4(b)    (91,701)   (81,876)
Taxation                                                    (6,539)      (104)
Capital expenditure and financial investment       4(c)    (79,486)   (37,967)
Acquisitions and disposals                         4(d)     (3,888)  (152,500)
Equity dividends paid                                       (9,332)    (9,330)
------------------------------------------------------------------------------- 
Cash outflow before management of liquid
resources and financing                                    (64,574)  (174,612)
Management of liquid resources                     4(e)       3,426     34,205
Financing                                          4(f)      82,573     89,746
------------------------------------------------------------------------------- 
Increase/(decrease) in cash in the year                      21,425    (50,661)
------------------------------------------------------------------------------- 

Reconciliation of Cash Flow to Movement in Net Debt
for the year ended 31 March 2004
                                                              2004        2003
                                                             £'000       £'000
Movement in cash in the year                                24,933     (53,929)
Cash movement from management of liquid resources           (3,426)    (34,205)
Movement in overdrafts                                      (3,508)      3,268
Net movement in other debt due within one year              16,603      (7,467)
Net movement in debt due after more than one year          (94,278)    (81,924)
Translation and other non-cash adjustments                  (2,474)     (1,841)
Arising on acquisition                                     (31,108)     (2,787)
------------------------------------------------------------------------------- 
Change in net debt in the year                             (93,258)   (178,885)
Net debt at 1 April 2003/1 April 2002                   (1,044,184)   (865,299)
------------------------------------------------------------------------------- 
Net debt at 31 March 2004/31 March 2003                 (1,137,442) (1,044,184)
------------------------------------------------------------------------------- 



Statement of Total Recognised Group Gains and Losses
for the year ended 31 March 2004

                                                              2004        2003
                                                             £'000       £'000
Profit for the financial year                               14,951      17,307
------------------------------------------------------------------------------- 
Other recognised gains and losses
Unrealised net surplus on revaluation of investment
properties                                                 354,981     125,558
Deferred taxation in respect of the revaluation of
investment properties                                       (1,737)         -
Foreign exchange adjustments                                (7,627)    (5,335)
Actuarial gain/(loss) relating to the pension fund           8,758     (9,741)
------------------------------------------------------------------------------- 
                                                           354,375    110,482
------------------------------------------------------------------------------- 
Total recognised net gains and losses for the financial
year                                                       369,326    127,789
------------------------------------------------------------------------------  


Reconciliation of Movements in Group Shareholders' Funds
for the year ended 31 March 2004
                                                               2004       2003
                                                              £'000      £'000
Profit for the financial year                                14,951     17,307
Dividends                                                    (3,807)   (10,057)
Other recognised gains and losses for the financial year    354,375    110,482
Purchase of own shares                                            -       (111)
------------------------------------------------------------------------------- 
Net increase in shareholders' funds                         365,519    117,621
------------------------------------------------------------------------------- 
Shareholders' funds at 1 April 2003/1 April 2002            873,205    755,584
------------------------------------------------------------------------------- 
Shareholders' funds at 31 March 2004/31 March 2003        1,238,724    873,205
-------------------------------------------------------------------------------  

Notes

1. Dividends

                                                               2004      2003
                                                              £'000     £'000
Convertible preference (paid)                                   621       725
Ordinary (proposed)                                           3,186     9,332
------------------------------------------------------------------------------- 
Total dividends                                               3,807    10,057
------------------------------------------------------------------------------- 

An interim dividend of 4.8p (2003: 4.8p) per ordinary share was paid on 6 April
2004. The directors do not recommend the payment of a final ordinary dividend
(2003: 10.2p). The total distribution for the year is 4.8p (2003: 15.0p) per
ordinary share.

2. Earnings per Ordinary Share

The calculation of earnings per ordinary share is based on profit after tax,
non-equity dividends and minority interests of £14,330,000 (2003: £16,582,000)
and on 62,911,577 ordinary shares (2003: 62,209,237) being the weighted average
number of ordinary shares in issue during the year ended 31 March 2004. The
calculation of diluted earnings per share is based on profit after tax and
minority interests of £14,951,000 (2003: £17,307,000) and on 67,127,727 ordinary
shares (2003: 67,121,137). This has been adjusted for the effect of the
conversion of all the 5.25 per cent. convertible cumulative non-voting
preference shares of £1 each.
                                Basic       Diluted        Basic       Diluted
                                 2004          2004         2003          2003
                                    p             p            p             p
Earnings per ordinary share     22.78         22.27        26.66         25.78
------------------------------------------------------------------------------- 

3. Net Assets per Ordinary Share

Net assets per ordinary share are calculated as follows:
                                                             2004         2003
                                                            £'000        £'000
Shareholders' funds per Group balance sheet             1,238,724      873,205
------------------------------------------------------------------------------- 
Effect of FRS 13, 'mark to market'adjustment of
financial liabilities                                     (91,973)    (119,511)
Effect of contingent tax liability                       (337,772)    (244,200)
------------------------------------------------------------------------------- 
Adjusted shareholders' funds                              808,979      509,494
------------------------------------------------------------------------------- 

                                                            2004          2003
                                                          Number        Number
Ordinary shares in issue at 31 March 2004/31
March 2003                                           103,913,142    99,001,243
Shares held by Largs Limited in Peel Holdings
p.l.c.                                               (36,785,416)  (36,785,416)
------------------------------------------------------------------------------- 
                                                      67,127,726    62,215,827
Assumed conversion of nil (2003: 13,753,430)
5.25 per cent. (plus tax credit)                                    
convertible cumulative non-voting
preference shares of £1 each                                   -     4,911,900    
-------------------------------------------------------------------------------
Number of ordinary shares deemed to be in issue
at 31 March 2004/31 March 2003                        67,127,726    67,127,727
------------------------------------------------------------------------------- 
Net assets per ordinary share
Basic                                                      1,845p        1,404p
Diluted                                                    1,845p        1,301p
Adjusted diluted                                           1,205p          759p
------------------------------------------------------------------------------- 

The adjustment for FRS13 represents the adjustment for the market value of the
Group's fixed rate debt.

The adjustment for contingent tax represents the contingent liability to
corporation tax on capital gains if investment properties and certain other
fixed assets were sold at their revalued amounts.


4. Notes to the Group Cash Flow Statement
                                                             2004         2003
                                                            £'000        £'000
(a) Cash flow from operating activities
      Group operating profit                              105,679       99,316
      Non-cash adjustments:
      - current cost of servicing
        pension                                             1,933        1,088
      - depreciation                                       12,450        7,707
      - amortisation of prepayment
        premia                                                648          648
      - amortisation and
        impairment of goodwill                              8,377          510
      - grant release                                      (1,210)        (997)
      Movement in stocks                                     (611)       2,616
      Movement in debtors                                 (13,143)       3,060
      Movement in creditors                                12,249       (6,783)
------------------------------------------------------------------------------- 
                                                          126,372      107,165
------------------------------------------------------------------------------- 
(b) Returns on investments and servicing of finance
      Interest received                                     2,473        4,947
      Interest paid (including
      capitalised)                                        (93,084)     (80,778)
      Finance lease interest paid                            (227)        (315)
      Exceptional interest charges
      paid                                                      -       (5,000)
      Non-equity dividends paid                              (863)        (730)
------------------------------------------------------------------------------- 
                                                          (91,701)     (81,876)
------------------------------------------------------------------------------- 
(c) Capital expenditure and financial investment
      Purchase of fixed assets                           (120,103)     (80,606)
      Sale proceeds from fixed
      assets                                               41,076       44,899
      Loans to joint ventures                                (459)      (2,260)
------------------------------------------------------------------------------- 
                                                          (79,486)     (37,967)
-------------------------------------------------------------------------------
(d) Acquisitions and disposals
      Acquisitions                                         (3,888)    (152,495)
      Purchase of interests in joint
      ventures                                                  -           (5)
-------------------------------------------------------------------------------
                                                           (3,888)    (152,500)
-------------------------------------------------------------------------------
(e) Management of liquid resources
------------------------------------------------------------------------------- 
      Movements from cash deposits                          3,426       34,205
-------------------------------------------------------------------------------
                                                                        
(f) Financing
      Purchase of own shares                                    -         (111)
      New loans                                           234,439      181,141
      Other movement in loans                            (155,545)     (92,117)
      Movement in finance lease
      creditor                                             (1,219)        (281)
      Grants received                                       4,898        1,114
-------------------------------------------------------------------------------
                                                           82,573       89,746
-------------------------------------------------------------------------------

Teesside International Airport Limited contributed £296,000 to the Group's net
operating cash flow, received £27,000 in respect of net returns on investments
and servicing of finance, received £28,000 in respect of taxation and utilised
£1,434,000 for capital expenditure.

Glasgow Harbour Limited contributed £6,576,000 to the Group's net operating cash
flow, paid £620,000 in respect of net returns on investments and servicing of
finance, utilised £1,741,000 for capital expenditure and received £342,000 in
respect of financing.


5. The board of directors approved the above results on 30 June 2004.


6. The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 March 2004 or 2003, but is derived
from those accounts. Statutory accounts for 2003 have been delivered to the
Registrar of Companies and those for 2004 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under section 237
(2) or (3) of the Companies Act 1985. The financial information set out above
has been prepared under the same accounting policies noted in the 2003 Financial
Statements.





Chairman's Statement

Introduction

After an indifferent start to the financial year confidence levels improved
during the second half. More recently political concerns have resurfaced as well
as concerns over the sustainability of economic recovery and the outlook for
interest rates, house prices, consumer spending and property yields is less
positive. Despite these testing market conditions, I am pleased to report that
the Group has made further progress during the year ended 31 March 2004. These
results include, for the first time, a full twelve months contribution from
Clydeport and Teesside International Airport.

In a separate announcement issued today, the Board of Peel announced that it had
agreed terms with the majority shareholders of Peel in relation to a proposal by
them to buy-out the minority shareholdings by way of a scheme of arrangement
('the Proposal'). Further details of the Proposal are set out in the separate
announcement, and in the circular to be sent to shareholders later today.


Results

Group pre-tax profits for the year were slightly lower than last year at £29.39
million (2003: £30.15 million). After stripping out fixed asset sales, the
underlying performance of the Group saw a decrease in pre-tax profits from
£23.72 million to £17.88 million, mainly due to an impairment of goodwill in the
year of £6.40 million.

During the year to 31 March 2004, all of the land and property investments of
the Group were externally valued. This produced a substantial uplift of £354.98
million increasing the net asset value per share on a diluted basis to 1,845p
(2003: 1,301p). The Trafford Centre accounted for £316.50 million of this
increase, brought about principally by the five yearly rent reviews. The
adjusted net assets of the Group which are adjusted for the contingent liability
to corporation tax on capital gains if investment properties and certain other
fixed assets were sold at their revalued amounts and the FRS 13 'mark-to-market'
adjustment of financial assets and liabilities, were £808.98 million and 1,205p
per share (2003: £509.49 million and 759p per share). Shareholders should note
that the adjusted net asset value, commonly referred to as 'triple net asset
value', is more in line with the calculation of net asset value that will be
reported by the Group in future years following the introduction of new
international accounting standards in 2005/06.

The compulsory conversion of the small number of convertible preference shares
remaining in issue into ordinary shares was triggered in March 2004.

In light of the Proposal announced today, the Company has not declared a final
dividend for the year ended 31 March 2004. If the scheme of arrangement (and
consequently the Proposal) does not become effective, the Company will make a
further announcement regarding the declaration and payment of a dividend as and
when appropriate.



Operations

The Group's results are generated from a diverse spread of activities within the
property, ports and airports sectors, which are influenced, not only by the
general economic climate but also market conditions within these sectors. The
majority of the Group's real estate assets are focused in the out-of-town retail
sector, and it is gratifying that this sector has continued to perform well. In
the retail market, occupier demand is very much dependent on the consumer and
although consumer spending continues to be fairly resilient, the outlook is less
positive due to the risk of increases in interest rates. With the planning
environment increasingly complex and time consuming, the Group continues to seek
to influence planning issues. The Government's suggestions of a possible
development land tax, potential lease reforms which question the continuation of
upward only rent reviews and changes to the planning laws that are expected to
bring the construction of mezzanine floors within planning control are unwelcome
and will not only increase the burden of taxation but also add more onerous
regulation, thereby increasing costs which will be detrimental to long term
investment and growth.

During the year, the Group's operations were re-organised into four operational
divisions, The Trafford Centre, Peel Land and Property, Peel Ports and Peel
Airports.

The Trafford Centre has been open since 1998 and has seen visitor numbers
increase from 23.5 million in its first financial year to 27.5 million in 2004,
although recently the Centre has seen only moderate increases to visitor
numbers. Having had the first five yearly rent reviews, it is pleasing to report
that rental growth is in line with expectations. Against this background, the
Centre was externally valued as at 31 March 2004 at £1,230 million, producing a
significant uplift of £316.50 million in its market value reflecting the
underlying growth in rental levels. The considerable work undertaken in
maintaining the Centre's appeal and trading performance should not be
underestimated and warrants active management of the tenant line up. In this
context, we were delighted to announce in August 2003, a prestigious new 225,000
sq. ft. department store for John Lewis plc, which will replace the Festival
Village when it opens in mid-2005.

Peel Land and Property division encompasses the Group's core land and property
business. During the year, the Group increased the size of the Peel South East
10 per cent. First Mortgage Debenture Stock 2026 raising net proceeds of £114
million. The greater part of the proceeds was used to repay shorter-term bank
debt mainly on completed developments that had been brought into the investment
portfolio. The Group continued with its long standing preference for largely
non-speculative development and a significant proportion of the Group's current
developments involve extensions, refurbishments or reconfigurations to existing
retail parks. Developments completed in the financial year or shortly after the
year end include retail warehouse units at Longsight in Manchester, Stockport
and Trafford as well as office developments at Trafford and Wakefield. The land
and property investment portfolio was externally valued during the year
producing a valuation increase of £33.98 million.

Peel Ports encompasses the ports of Clydeport and the Manchester Ship Canal and
is now operating as a single unit under a single management team with the
additional skills and knowledge the combined business can bring. The performance
of the Port operations is in line with expectations. Shortly after the year end,
a new seven year contract to supply coal to the Longannet power station for
ScottishPower through Hunterston and Rosyth Dock commenced adding some important
long term revenue stability, although at a reduced rate, which resulted in an
impairment of £6.40 million to the overall goodwill.

During the year, short-term bank facilities used for the acquisition of
Clydeport were refinanced and replaced with a ten year £200 million loan
facility with Bank of Scotland. This coincided with the early repayment of the
£24 million Manchester Ship Canal Company Amortising Bonds. At the same time as
the refinancing of the debt within Peel Ports, Bank of Scotland's equity
interest in the Glasgow Harbour project was acquired by the Group, enabling the
future development to be handled in line with the Group's development
philosophy.

Peel Airports division mainly comprises airports at Liverpool, Teesside and
Doncaster with interests in small business and general aviation at Sheffield and
Barton, near Manchester. Significant capital investment continues to be made
within the airports division to encourage operators to develop new services or
attract operators and passengers. However, the aviation industry has come under
considerable external pressures in recent times, and this year intense price
competition developed in the low cost short haul scheduled sector, stemming from
increased competition and significant growth in capacity from existing operators
and new entrants. Low cost operators are still predicting reductions in fares
and yields, added to which there has been a weakness in the charter market and
increases in fuel prices. Given these conditions, there are downward pressures
on airport charges, and the need to maintain lean operational efficiency is
increasingly important.

At Liverpool John Lennon Airport, the phased investment has increased capacity
to enable the airport to handle 4.5 million passengers per annum. At Teesside
International Airport, investment is being phased so as to align the development
programme with forecast improvements in passenger growth, which has already
started with the new bmibaby services. At Robin Hood Airport Doncaster
Sheffield, considerable investment and work is being undertaken on the
construction of new airport facilities, capable of handling up to 3 million
passengers per annum. The construction programme is on schedule for a Spring
2005 opening and Thomson and Thomsonfly will be the first operators based at the
airport.

A more detailed report on each of the Group's operations is set out in the
Operating and Financial Review.

Board and Employees

I would like to extend my sincere thanks to the directors and all employees of
the Group for their dedication and hard work during the year.

John Whittaker
Chairman
30 June 2004



Operating and Financial Review

Financial Review

Earnings

Operating profit (including the Group's share of operating profit in joint
ventures) increased by £9.19 million (9.2 per cent.) to £108.72 million (2003:
£99.53 million).

With regard to the individual operating divisions, operating profit for The
Trafford Centre increased by £6.00 million to £59.78 million (2003: £53.78
million), operating profit for Peel Land and Property decreased by £2.92 million
to £36.05 million (2003: £38.97 million), operating profit for Peel Ports
increased by £6.57 million to £15.93 million (2003: £9.36 million), Peel
Airports reported an operating loss of £0.54 million (2003: £0.002 million loss)
an increase of £0.54 million and unallocated Group overheads decreased by £0.07
million to £2.51 million (2003: £2.58 million). The operating profit of Peel
Ports includes a goodwill impairment of £6.40 million (2003: £nil).

The profit on disposal of fixed assets increased by £5.08 million to £11.51
million (2003: £6.43 million), which was principally derived from an increased
profit of £11.44 million (2003: £6.39 million) from the disposal of investment
properties from total proceeds of £42.86 million (2003: £54.51 million). The
profit on disposal of fixed assets also included a profit on the disposal of
other fixed assets and investments of £0.07 million (2003: £0.04 million).

The net interest charge increased by £15.03 million (19.8 per cent.) to £90.84
million (2003: £75.81 million). However, this was partially offset by an
increase in net rental income resulting in a decrease in the cover of net rental
income to total net interest to 125.6 per cent. (2003: 137.6 per cent.).
Capitalised interest in the year totalled £1.22 million (2003: £0.10 million).

As a result of all of the above factors, profit before tax decreased by £0.76
million (2.5 per cent.) to £29.39 million (2003: £30.15 million).

Tax on profit on ordinary activities was £14.43 million (2003: £12.74 million),
an effective rate of 49.1 per cent. of pre-tax profit which included a non-cash
deferred tax charge of £6.78 million (2003: £7.52 million).

Basic earnings per share decreased by 3.88p (14.6 per cent.) to 22.78p (2003:
26.66p), mainly as a result of the goodwill impairment and the increase in the
tax charge compared to last year.

After minority interests and preference dividends, the profit attributable to
ordinary shareholders for the year amounted to £14.33 million (2003: £16.58
million). In light of the Proposal announced today, the Company has not declared
a final dividend for the year ended 31 March 2004. If the scheme of arrangement
(and consequently the Proposal) does not become effective, the Company will make
a further announcement regarding the declaration and payment of a dividend as
and when appropriate.

Balance Sheet

Consolidated shareholders' funds increased by £365.51 million to £1,238.72
million (2003: £873.21 million), producing diluted net assets per ordinary share
of 1,845p (2003: 1,301p), an increase of 544p.

The table below calculates the adjusted net assets of the Group which are
adjusted for the contingent liability to corporation tax on capital gains if
investment properties and certain other fixed assets were sold at their revalued
amounts and the FRS 13 'mark-to-market' adjustment of financial assets and
liabilities, as follows

-------------------------------------------------------------------------------
                                   2004                        2003
                     Shareholders'     Diluted net   Shareholders'  Diluted net
                            Funds       assets per         Funds     assets per
                                             share                       share
                            £'000                p          £'000            p
-------------------------------------------------------------------------------
Shareholders'
Funds per
Group balance
sheet                   1,238,724            1,845        873,205         1,301
Less:
Adjustment for
FRS13                     (91,973)            (137)      (119,511)        (178)
Adjustment for
contingent tax
liabilities              (337,772)            (503)      (244,200)        (364)
-------------------------------------------------------------------------------
Adjusted
Shareholders'
Funds                     808,979            1,205        509,494          759
-------------------------------------------------------------------------------

The increase in shareholders' funds was mainly as a result of professional
valuations of investment properties in the year which generated an uplift of
£354.98 million (2003: £125.56 million), the retained profit for the year of
£11.14 million (2003: £7.25 million) and a £8.76 million actuarial gain (2003:
£9.74 million loss) resulting from the application of FRS17, offset by a £7.63
million foreign exchange loss (2003: £5.34 million).

The investment property portfolio of the Group at 31 March 2004 totalled £2,129
million and is analysed over the various property sectors as follows:

-------------------------------------------------------------------------------
                  Undeveloped                             Capital      Capital
                         Land    Sq. Ft.   Sq. Metres       Value        Value
                        Acres       '000         '000       £'000     per cent.
-------------------------------------------------------------------------------
The Trafford                -      1,319          123   1,230,000         57.8
Centre               

Out-of-town                 7      2,190          204     423,595         19.9
retail               

Town centre                 -         46            4       5,374          0.2
retail               

Offices                    15        972           90     108,816          5.1

Industrial                 59      1,455          135      65,454          3.1

Sports and                284        439           41      35,248          1.7
leisure              

Land                   11,195        963           90     180,601          8.5

Environment and
resource                2,600          -            -      13,597          0.6
development          

Overseas land and          32        220           20      38,717          1.8
property
investment           

Clydeport
investment                342      1,119          104      27,597          1.3
properties           
-------------------------------------------------------------------------------
                       14,534      8,723          811   2,128,999        100.0
-------------------------------------------------------------------------------   

The Group's portfolio of stock properties increased to £51.63 million (2003:
£11.23 million), mainly due to the acquisition of the remaining equity interest
in Glasgow Harbour.

Cash Flow

The Group's net debt increased by £93.26 million to £1,137.44 million (2003:
£1,044.18 million) at the financial year end. The principal reasons for the
increase in borrowings was that capital expenditure exceeded cash generated from
operations (including interest) and proceeds from the sale of fixed assets, the
impact of the acquisition of the remaining 40 per cent. investment in Glasgow
Harbour and the 75 per cent. investment in Teesside International Airport.

Borrowings and Financial Resources

The Group's net borrowings at 31 March 2004 of £1,137.44 million produced a
lower gearing ratio of net debt to shareholders' funds at 91.8 per cent. (2003:
119.6 per cent.), the increased debt being more than offset by the increase in
shareholders' funds.

The amount of fixed long term debt in the Group at the financial year end was
£961.48 million (2003: £868.61 million) representing 76.3 per cent. of total
gross borrowings (2003: 75.7 per cent.) and was held at a fixed annual borrowing
cost of 8.0 per cent. (2003: 7.9 per cent.).

During the year, the Group continued to comply with all of its borrowing
covenants. The principal covenants relate to net worth, gearing, asset cover and
interest cover, all of which were satisfied by a substantial margin at the
financial year end. At 31 March 2004, the Group had unused bank facilities of
£97.29 million (2003: £89.61 million).

Other than a £70 million ten year interest rate swap, the Group did not enter
into any further interest rate swaps, currency swaps, and forward contracts or
any other derivative financial instruments in the year ended 31 March 2004.

For the purposes of FRS 13, the present market value of the Group's fixed rate
debt shows a post-tax 'mark to market' value of £91.97 million in excess of book
value (2003: £119.51 million).

Accounting Standards and Policies

The financial statements comply with all accounting standards issued by the
Accounting Standards Board applicable to financial statements at 31 March 2004.
The Group's accounting policies have been applied consistently throughout the
year and the preceding year.


Operating Review

The Trafford Centre

Visitor numbers at the Centre were 1.5 per cent. higher than in 2003 although
this growth is below the 4 per cent. reported last year. The Centre is now
seeing the results of the five yearly rent reviews coming through in the
financial results. Turnover for the year was £65.04 million (2003: £58.32
million) including turnover rents of £1.85 million (2003: £5.66 million), which
are payable in so far as they exceed the base rents and therefore reduce as the
base rents increase.

During the year, the introduction of John Lewis, as a major new 225,000 sq.ft.
anchor tenant replacing the Festival Village, which closed in January 2004, was
announced. John Lewis are aiming for a store opening midway through 2005 and the
Group is confident that their addition will increase the attractiveness of the
Centre to a slightly older age group and the range of goods will also complement
the existing retail offer of the Centre as a whole.

Once again, we have been pleased to welcome a number of new names to the Centre.
This year saw the arrival of O'Neill, Virgin Ware, Jane Shilton, Coast, Office
and Faith Shoes. On the catering side, Frankie & Benny's have taken a new lease
of The Orangery for their New York Italian Diner and inside the Orient,
EstEstEst are due to open in the Summer of 2004 and three new cafes/kiosks have
been introduced on the first floor.

The Group continues to be disappointed and frustrated by the lack of progress in
extending the Metrolink system. The Group has pledged a major land and cash
contribution to help bring a new line through Trafford Park to The Trafford
Centre, but the decision to proceed still rests with the Government and Greater
Manchester Passenger Transport Executive.

Peel Land and Property

The Peel Land and Property division comprises the Group's property investment,
property development, development land, rural estates, environment resource and
development, advertising, telecommunications and utilities activities. The
division produced turnover of £46.81 million and an operating profit of £36.05
million for the year.

Property Investment

The Group's well established strategy over the last few years has been to focus
on the better performing properties whilst disposing of certain properties
producing limited long term rental and capital growth. In the year to 31 March
2004, this policy resulted in disposals producing capital receipts of £24.09
million, generating a profit of £0.59 million over book value and a reduction in
rental income of £1.84 million per annum. The majority of the properties sold
were within the office sector where the occupational market continues to be
difficult to predict.

Acquisitions of properties for long term investment amounted to £26.73 million
with an annualised rental income of £1.58 million. As with the real estate
market, the Group's strongest performing investment assets continued to be
retail parks which at the year end produced annualised rental income of £22.54
million (2003: £22.26 million).

The recent completion of a speculative office development adjacent to The
Trafford Centre called Venus with a net lettable area of 92,000 sq. ft.
increased the amount of vacant properties to 372,000 sq. ft. (2003: 279,000 sq.
ft.). However, shortly after the year end, terms were agreed with a proposed
tenant to occupy 46,000 sq. ft.

Beyond the minor reduction in rental income resulting from the sales and
purchases programme, there were numerous new lettings, lease renewals and rent
reviews which produced additional rental income of £4.31 million per annum which
was partially offset by new vacancies totalling £2.27 million per annum of lost
rental. In overall terms the annualised rental income of the UK property
investment portfolio was £35.89 million per annum as at 31 March 2004 (2003:
£34.10 million per annum).

The Group's overseas assets include a shopping mall and offices in Hamilton,
Bermuda and two offices in Nassau, Bahamas. Of these properties, Beaumont House,
Nassau has recently been refurbished following a fire in 2001. The remaining
properties are either fully or substantially let and generate rental income of
£3.09 million per annum (2003: £3.73 million).

Property Development

The strategy for property development is to concentrate activity on land already
owned by the Group, which is where the department can maximise returns.
Development opportunities are occasionally undertaken in other locations, but
generally only where substantial pre-lets from occupiers or forward sales can be
secured.

Developments completed during the year or shortly after the year end include
retail warehouse units at Trafford of 130,000 sq. ft. let to B&Q, 14,000 sq. ft.
at Stockport let to SCS Furniture and 14,000 sq. ft. at Longsight, Manchester,
developed for and forward sold to Lidl. Office developments completed include
20,000 sq. ft. at Wakefield, let and sold, and 108,000 sq. ft. of prestige space
at Trafford called Venus, which is to be retained. Developments in progress
include extensions to retail parks at Edinburgh, 50,000 sq. ft., at Barnsley,
70,000 sq. ft., and a new leisure scheme of 109,000 sq. ft. at Blackburn, which
is now fully pre-let and will move to the construction phase shortly.

The development team have also completed land sales for residential development
at Runcorn and Salford Quays. Planning approval has been obtained for 600
residential units and 160,000 sq. ft. of offices on a joint development with
Manchester City Council and Artisan at Great Ancoats Street, Manchester, in
which the Group has a minority interest.

Land Investment, Development and Planning

The strategy to concentrate on the urban and brownfield landholdings within the
portfolio has produced residential land sales with a profit of £3.52 million,
which included sales at Ellesmere Port and at Farnworth near Bolton.

The planning regime continues to tighten for residential developments,
particularly within the North West Region. The Group is particularly concerned
about the increasing use of moratoria by local authorities against the granting
of planning permission even on brownfield sites for new housebuilding. These
policies of restraint are considered to be too rigid and damaging to the North
West economy as a whole, particularly when significant growth is being allowed
in the South East.

During the year residential planning permissions were achieved at Bolton and
Latchford, Warrington. In addition a planning inquiry is to be held in July 2004
for a 35 acre Employment Park at Astley, Wigan. The Group has appealed against
non-determination of the planning application by Wigan Metropolitan Borough
Council.

Work continues on the Estuary site in South Liverpool. The site now has a
planning consent for 3.3 million sq. ft. of B1, B2 and B8. The complementary 
Coastal Reserve adjacent to the Estuary site is regarded as an example of 
environmental best practice attracting European attention and implementation of
the scheme on site is running smoothly.

The revised planning application and environmental assessment for the new
Manchester Racecourse and Salford Forest Park is being completed and will be
submitted shortly.

Environment and Resource Development

Output from the Group's two hard rock quarries was down on last year's record
level. Income from the Group's two major landfill interests remained broadly in
line with the previous year.

Dialogue is ongoing with Salford City Council to facilitate the determination of
the planning application submitted in October 2002 for the continued extraction
of peat at Astley Moss, Salford and the subsequent extraction of some 3 million
tonnes of sand and gravel. Planning permission for a waste recycling facility at
Partington, Trafford was secured following a planning appeal in November 2003.
An application for consent to build a wind farm on Scout Moor near Bury was
submitted to the DTi in partnership with United Utilities and is likely to be
considered at a public inquiry. A scheme for a wind farm development at
Hunterston terminal on the west coast of Scotland, was refused planning
permission in December 2003 and an appeal against this decision has been lodged.

Advertising, Telecommunications and Utilities

During the year, the advertising department installed additional poster sites in
and around Liverpool John Lennon Airport and a new poster scheme commenced at
Teesside International Airport. Branded Visa credit cards were also launched at
The Trafford Centre and Liverpool John Lennon Airport.

Since its inception in 2003, the telecommunications department has taken a more
focused approach to the requirements for masts and fibre optic installations on
the Group's landholdings and towards fixed line telephony services.

During the year, Peel Utilities was formed for the purpose of consolidating the
Group's charging structure for drainage discharges and the unit rates paid for
its own utility consumption.

Peel Ports

The Peel Ports division comprises the combined port activities of Clydeport and
The Manchester Ship Canal, together with property investment and development
activity on land adjacent to the Clyde and Manchester Ship Canal. In its first
full year of reporting, the division produced a turnover of £67.67 million and
operating profit of £15.93 million.


Clydeport

At Hunterston Coal Terminal, while tonnages imported for Scottish and Northern
Ireland based generators were marginally ahead of last year, overall imported
tonnages were down some 1.3 million tonnes at 3.1 million tonnes as a result of
a reduction in imports on behalf of English based generators. Shortly after the
year end, a new seven year contract to supply coal to ScottishPower commenced
and as part of the division's obligations, a new facility within Babcock's
premises at Rosyth on the east coast of Scotland, has been established. This
facility successfully handled its first shipments of coal and will complement
the primary coal import facility at Hunterston.

At the traditional ports, in overall terms, while dry bulk tonnages decreased,
the mix of products contained higher value products. Greenock experienced growth
in container traffic, which increased from 67,000 to almost 82,000. Due to the
high cost of vessel chartering, Maersk have taken the decision to withdraw from
the Greenock service, and while this will impact on volumes, every effort is
being made to replace this lost volume. The Cruise liner traffic has recovered
and in the coming year over 30 vessels are expected to visit Greenock. At KGV
Dock, although animal feed imports and scrap activity on the river declined in
comparison with the equivalent period last year, overall volumes increased.

Manchester Ship Canal

The Ship Canal achieved a satisfactory, although slightly declining performance
in terms of profitability. Overall, the level of bulk liquids and dry cargoes
handled through the Canal during the year was virtually unchanged at 6.40
million tonnes (2003: 6.41 million tonnes). A fire at Ellesmere Port, which
damaged a warehouse and disabled the cranes, caused the loss of some business.
This was offset by increased activity at the Runcorn Salt Works, higher scrap
exports and the import of maize for Cerestar. The result for the period
benefited from the successful conclusion of a one-off recovery of rates and a
rebate in respect of waste water.

The operation of a container terminal at Irlam, Salford will commence shortly,
which at first will handle one feeder service from Southampton, with prospects
of additional feeder services being attracted to the facility.

Property

At the same time as the refinancing of the debt within Peel Ports with Bank of
Scotland, the Group acquired Bank of Scotland's equity interest in the Glasgow
Harbour Project. At Glasgow Harbour, in the coming year attention will focus on
the design options for the retail and leisure elements planned for the scheme,
together with detailed planning consent for Phase II of the housing element. In
tandem with this, it is intended to proceed with significant off-site roads
infrastructure to provide the necessary transport links. Elsewhere, sales of
properties were achieved at Renfrew, Cartsdyke, Rothesay Dock, Irlam, Runcorn
and Warrington.

Peel Airports

The Group's Airports division comprises Liverpool John Lennon Airport, Teesside
International Airport and Robin Hood Airport Doncaster Sheffield, formerly
Doncaster Finningley, and investments in the general aviation sector at
Sheffield City Airport and Barton Aerodrome near Manchester. The Airports
division produced turnover of £34.97 million and an operating loss of £0.54
million. Capital investment in Peel Airports totalled £19.10 million in the year
(2003: £3.47 million) and it is estimated that capital investment in the current
year will total approximately £86.06 million, due principally to the opening of
Robin Hood Airport in Spring 2005.


Liverpool John Lennon Airport

Passenger throughput for the year to 31 March 2004 increased to 3.15 million
(2003: 3.02 million), an increase of 4.4 per cent., a positive figure in a year
which has been difficult for the global aviation industry.

easyJet remain the core of the Airport's business. The year to 31 March 2004 was
a period of consolidation for easyJet, with growth figures of 3.9 per cent.
taking their total passenger throughput for the year to almost 2.2 million.
easyJet also confirmed the delivery of their eighth aircraft for Liverpool at
the end of the financial year together with the announcement of three new routes
to Basle, Berlin and Cologne. Ryanair's traffic grew by 21 per cent. to 346,000
passengers and, although the Charleroi service was withdrawn in January 2004,
this was immediately replaced with a daily flight to Gerona. British Airways'
decision to withdraw from the Isle of Man route took effect from the end of
March 2004 and has stimulated additional flights from Euromanx and also the
introduction of Emerald Airways onto the route under the brand of flyjem.com.
The Airport was successful in attracting VLM to operate a five times a day
service to London City which commenced in February 2004 and initial passenger
numbers have been encouraging.

In a difficult year, freight throughput fell by 15.8 per cent.. The impact of
newspapers now being printed in Ireland affected tonnages. In addition, the
decision taken by Royal Mail to scale back their Liverpool operation as part of
the rationalisation of their domestic route network also impacted significantly
on throughput. Commercial income from the retailers was in line with
expectations as was income from car parking.

Construction work on the £21 million terminal development project was completed
after the year end raising capacity to 4.5 million passengers per annum. Plans
to expand the airport's capacity beyond the 4.5 million passengers per annum are
currently being developed.

Teesside International Airport

Passenger throughput for the year to 31 March 2004 increased to 721,000 (2003:
691,000), an increase of 4.3 per cent.. Passenger numbers increased largely
through both organic growth on existing scheduled services and the introduction
of the bmibaby scheduled programme in October 2003 to Belfast, Geneva and
Malaga. In January 2004, bmibaby commenced selling additional new routes to
Prague, Jersey, Alicante, Nice and Palma in advance of the scheduled launch of
its fourth UK base at Teesside in April 2004.

The initial phase of the Group's investment programme commenced in January 2004,
with enhancements to passenger terminal facilities, improvements to terminal
traffic flows and a 30 per cent. increase in car park capacity. This work is
designed to deliver upgraded facilities to attract both airlines and passengers.
Contract work on a new access road to the airport began in March 2004, which
will provide enhanced public access.

Robin Hood Airport Doncaster Sheffield

There are significant works to be completed during 2004 in preparation for the
commencement of commercial airport operations in Spring 2005.

The Airport was re-branded Robin Hood Airport Doncaster Sheffield which was
significant in introducing the airport to the aviation industry and played an
important part in securing TUI as the lead airline. The start-up will see four
based aircraft from the TUI low cost airline ThomsonFly which will commence
services to a wide range of European destinations from Spring 2005 as well as a
Thomson based aircraft for charter holidays from Summer 2005. The Group is
cautiously optimistic that other passenger and freight operators will complement
the TUI operation by time of opening.

Sheffield City Airport

Realignment of the Airport's operation to support fixed wing and helicopter
general aviation has led to an increase in the number of based operating
companies. Relocation of Leeds Flying School from Leeds Bradford Airport,
combined with the construction of two aircraft hangars, increased the overall
number of aircraft based at Sheffield.

Barton Aerodrome

Following its acquisition, the Group is looking at options to improve business
and general aviation at the aerodrome as well as retaining and working with
Lancashire Aero Club.








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