Interim Results

Real Estate Investors PLC 30 September 2004 REAL ESTATE INVESTORS PLC ("REI" or "the Company") Interim Results for the period ended 30 June 2004 REI, the commercial property investment company, today announces its interim results for the period from commencement of the Company's trading on AIM, on the 10 June 2004, to 30 June 2004. Chairman's Statement In June 2004 we floated on AIM, having raised cash of £2.27 million and issued £650,000 in new ordinary shares and loan stock. At the same time, we announced the Company's first two acquisitions. The proceeds of the Placing were to provide working capital and fund future acquisitions of commercial property assets and property interests with investment potential. As stated at the time of the flotation, one of the cornerstones of our business strategy lies in the structuring of acquisition finance through a mixture of cash and long term debt funding and, where possible, by the issue to vendors of REI ordinary shares. I am pleased to be able to report solid progress since our successful flotation and can announce that we have unconditionally exchanged contracts on an industrial investment property in Coventry, the details of which we shall announce in the near future. In August 2004, we raised additional funds of £504,000 (before expenses), by way of a share placing at a 20% premium to the flotation placing price. In addition, we are about to conclude a refinancing of our retail and office investment in Crawley town centre which will add to our cash reserves. Outlook The commercial property market remains highly competitive, with a plentiful supply of debt finance available. As a consequence, there is very strong competition for quality investment properties, although I believe that we are beginning to see the first signs of caution emerging from lenders and a clear increase in the number of attractive opportunities available to us. Your Board's extensive experience and contacts are enabling us to source suitable acquisitions, both corporate and private, and I expect to be able to report to you, in more detail, on our continuing progress, over the coming weeks. John Jack Chairman 30 September 2004 For further information, please contact: Real Estate Investors PLC: 01923 776633 Peter Lewin, Chief Executive Malcolm Lewin, Finance Director www.reiplc.com mj2 ltd: 020 7491 7776 Richard Sunderland/ Tim McCall INTERIM CONSOLIDATED RESULTS for the period to 30 June 2004 Period to 30 June 2004 (Unaudited) £'000 Turnover 20 Cost of sales (3) ------------ Gross profit 17 Administrative expenses (14) ------------ Operating profit 3 Interest receivable 3 Interest payable (11) ------------ Loss on ordinary activities before taxation (5) Taxation - ------------ Retained loss for the period (5) ============ CONSOLIDATED BALANCE SHEET as at 30 June 2004 30 June 2004 (Unaudited) £'000 Fixed assets Tangible assets 4,211 Intangible assets 153 ------------ 4,364 ------------ Current assets Debtors 78 Cash at bank 1,102 ------------ 1,180 Current liabilities Creditors - amounts falling due within one year (413) ------------ Net current assets 767 ------------ Total assets less current liabilities 5,131 Creditors - amounts falling due after more than one year (2,711) ------------ Net assets 2,420 ============ Capital and reserves Share capital 264 Share premium 2,161 Profit and loss account (5) ------------ 2,420 ============ GROUP CASH FLOW STATEMENT for the period to 30 June 2004 Period to 30 June 2004 (Unaudited) £'000 Net cash inflow from operating activities (Note 1) 54 ------------ Returns on investments and servicing of finance Interest received 3 ------------ Net cash inflow from returns on investments and servicing of finance 3 ------------ Capital expenditure and financial investment Purchase of tangible fixed assets (11) ------------ Acquisitions and disposals Purchase of subsidiary undertakings (Note 2) (219) Payment of amounts owed by subsidiaries to vendors (837) ------------ (1,056) ------------ Cash outflow before financing (1,010) Financing Issue of ordinary share capital 2,315 Expenses of flotation (215) ------------ 2,100 ------------ Increase in cash in the period 1,090 ============ NOTES TO GROUP CASH FLOW STATEMENT 1.Net cash inflow from operating activities £'000 Operating profit 3 Increase in debtors (74) Increase in creditors 125 ---------- 54 ---------- 2.Purchase of subsidiary undertakings £'000 Net assets acquired at fair values Tangible fixed assets 4,200 Debtors 4 Cash at bank 12 Creditors (929) Corporation tax (43) Loans (2,528) ---------- 716 Goodwill 92 Acquisition costs 61 ---------- 869 ========== Satisfied by Shares allotted 325 Unsecured Convertible Loan Notes 325 issued Cash 219 ---------- 869 ========== 3.Analysis of net debt Cash flow Acquisitions At 30 June 2004 £'000 £'000 £'000 Cash at bank 1,090 12 1,102 Debt due within one year (141) (141) Debt due after one year (2,711) (2,711) ---------- ---------- --------- 1,090 (2,840) (1,750) ========== ========== ========= NOTES 1.Basis of preparation The company was incorporated on 16 February 2004 and was admitted to trading on AIM on 10 June 2004, on which date it acquired its two subsidiary companies Boothmanor Limited and Eurocity (Crawley) Limited. The company's year end is 31 December, and the results shown in the profit and loss account relate to the period from commencement of trading on 10 June 2004 to 30 June 2004, the group's interim accounting date. 2. Principal accounting policies 2.1 Accounting convention The interim financial information has been prepared in accordance with applicable United Kingdom accounting standards and under the historical cost convention modified to include the revaluation of certain fixed assets. The information is unaudited and does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The principal accounting policies adopted are set out below. 2.2. Turnover Turnover comprises rental income from property. 2.3. Investment properties Investment properties are accounted for in accordance with SSAP 19 as follows: (i) investment properties are revalued annually by the directors and by independent professional valuers at intervals of not more than five years. The surplus or deficit on a revaluation is transferred to the revaluation reserve unless a deficit, or its reversal, on an individual investment property is expected to be permanent, in which case it is recognised in the profit and loss account for the year; and (ii) no depreciation is provided in respect of leasehold investment properties with over 20 years to run. 2.4. Goodwill Goodwill arising on the acquisition of group undertakings, calculated as the excess of cost over the fair value of net assets acquired, is capitalised in the year in which it arises and amortised to the profit and loss account over 20 years or its useful life, whichever is the shorter. 3. Copies of report Copies of this report are available from the Company's business address at REI House, Bury Lane, Rickmansworth, Hertfordshire WD3 1ED. This information is provided by RNS The company news service from the London Stock Exchange

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