Final Results

Final Results

Gresham House plc

27 April 2012

GRESHAM HOUSE PLC

(the “Company” or the “Group”)

PRELIMINARY FINANCIAL STATEMENT

YEAR ENDED 31 DECEMBER 2011

Gresham House plc (GHE.L), the property and early-stage investment trust, is pleased to announce its preliminary results for the year ended 31 December 2011.

CHAIRMAN’S STATEMENT

I am pleased to report on the full year results of the Group to 31 December 2011.

The Results

The revenue loss after taxation has decreased from £701,000 for the year to 31 December 2010 to £361,000 for the year ended 31 December 2011. Trading profits on the sale of development properties in 2011 were £795,000 reflecting the realised gain on our 75% joint venture interest in the development of the headquarters for Hallin Marine in Aberdeen. Significant cost reductions have been made, principally administration overheads which decreased by 25% from £1,221,000 in 2010 to £913,000 in 2011 and the reduction in finance costs from £1,039,000 in 2010 to £695,000 in 2011 primarily due to the calculation of the fair value of interest rate swaps falling by £237,000 as at year end.

Against these positive reductions in costs was a fall in rental income from £1,435,000 in 2010 to £1,036,000 in 2011. This was primarily due to the reduced rent at Newton-le-Willows where vacant possession is progressively being obtained by 2013 for the whole site following the grant of planning for residential, and at Vincent Lane, Dorking where the site is being cleared for sale.

Net Asset Value per share

As a result of the revaluation carried out at 31 December 2011 the value of the property investment portfolio was reduced by £1,804,000 to £27,443,000. The principal reduction amounting to £1,237,000 was in respect of the residential site at Newton-le-Willows where residential values have been underperforming due to the lack of demand in the North which has, in turn, led to a lack of construction activity on new sites. This revaluation deficit, when combined with the revenue loss of £361,000 and the losses within the securities portfolio of £203,000, result in the net asset value per share falling from 476.9p to 447.0p.

In addition, in the opinion of the Board, the net asset value attributable to equity shareholders is overstated because of the requirements of IFRS 3 to show minority stakes in subsidiaries with a negative net worth as a debit to equity of the Company. This requirement results in the overstatement of the value of the net assets attributable to shareholders by £1,043,000 or 19.4p per share. Adjusting for this reduces the net asset value per share to 427.6p at 31 December 2011.

Property Portfolio

The property investments were valued by Jones Lang LaSalle at 31 December 2011. Capital expenditure on the portfolio amounted to £627,000 during the year.

There has been little sign of improvement in the secondary property sector, principally as banks have been reluctant to lend and the lack of liquidity is continuing to have an adverse impact on this market. Having said that, we have been encouraged by planning gain opportunities at two of our sites.

At Newton-le-Willows, where consent for residential was granted on our 28 acres, we are now exploring the possibility of a food retail consent on 10 acres adjacent to the town centre. The local planning authority appears to be supportive and in April 2012 we submitted a planning application for a 6,500 sq.m. food superstore, petrol filling station and 460 car park spaces. The granting of a planning consent should lead to a significant uplift in the value of this asset and we anticipate a determination in the second half of 2012. We also believe that this would have a positive impact on the balance of the site where house builders have been reluctant to commit to a purchase and the potential sale of 18 acres to a national house builder fell through earlier this year.

We are pleased to report that planning consent has finally been granted on 1.2 acres at Vincent Lane, Dorking for a Lidl discount food store and we expect to complete the sale of the land in the second half of 2012. On the balance of the site, where we have exchanged conditional contracts for a sale to Persimmon Homes, the planners are due to determine our application for 30 houses in mid 2012.

At Southern Gateway, Speke, our principal tenant is continuing to expand its occupational space and we are in negotiations with potential tenants for the remaining vacant space.

Investment Portfolio

During the year we sold £3.9m of investments of which £3.3m were bonds that we had acquired in 2010. The sales showed total realised losses of £453,000, of which £185,000 related to the bonds.

The current investment portfolio of £9.1m is being sold in order to be in a position to liquidate the Company by the end of next year. Since the year end we have sold £721,000 of bonds and plan to progressively dispose of further bonds and equities during the current year.

Cash

Our cash at 31 December 2011 was £6,193,000 (2010: £2,831,000) whilst our borrowings amounted to £20,108,000 (2010: £17,744,000).

Debt of £15.0m is secured on the property portfolio of £27.4m which represents a loan to value of 55%. These loans mature in May and July 2012 but following detailed negotiations with the banks concerned the Board are confident that both these facilities will be extended.

There is in addition an overdraft facility in a subsidiary amounting to £5,071,000 which is secured against cash held by the Company.

The Future

We are progressing with our policy of disposing of all the assets of the Group. Each property and investment has an on-going strategy to maximise value prior to disposal. Providing that there is no further significant deterioration in the commercial property market we believe that we are on course to achieve our proposed liquidation of the Group by the end of 2013.

26 April 2012

Tony Ebel

Chairman

CHIEF EXECUTIVE’S REPORT

Dear Shareholder,

The secondary property market has had another difficult year which has been exacerbated by the significant lack of funding by banks for such assets. We are planning the disposal of our properties in one of the worst markets seen for bank funding with our only property sale in 2011 being an office development in Aberdeen sold to a cash buyer for £5.5m. We are however still very focused on maximising value through planning gain and securing additional lettings at our properties and we anticipate that we should be able to dispose of these by the end of 2013.

Results for Year to 31 December 2011

The operating profit for the year, after taking into account the results of our joint venture, was £334,000 compared to £338,000 for the previous year ended 31 December 2010. The comparison between both years is as follows:

  2011   2010
£’000 £’000
Dividend and investment income 386 446
Rental income 1,036 1,435
Other income 81 186
Property outgoings (1,051) (1,068)
Administration overheads (913) (1,221)
Other - 1
Trading profit 795 559
334 338

The significant variances are as follows:

The decrease in rental income was as a result of our policy to vacate the industrial estates at Newton-le-Willows and at Vincent Lane, Dorking in order to secure vacant possession of both sites ready for sale.

Administrative overheads have decreased from £1,221,000 in 2010 to £913,000 in 2011 largely due to a substantial reduction in legal fees incurred in 2010 and a £71,000 loan provision in 2010 of which £30,000 was released in 2011, thereby resulting in a £101,000 favourable variance for 2011. Administrative overheads are now running at just under £1million per annum and are being carefully controlled.

Property Portfolio

The principal assets of the Group are the property investments consisting of five properties or sites which were independently valued at a total of £27,443,000 as at 31 December 2011. These investments represent 62% of the total assets of the Group. As a result of the deteriorating market, particularly in the North, the properties were written down by £1,804,000 at the year end with the principal reduction of £1,237,000 being at Newton-le-Willows which is now valued at £11,683,000. We have taken positive action to improve the value of the site by seeking a food retail planning consent on 10 acres which should substantially increase the value and have a positive effect on selling the remaining 18 acres of residential site.

Southern Gateway, Speke and Northern Gateway, Knowsley each have valuations of over £5m. The latter is a relatively newly constructed distribution/industrial warehouse of 148,000 sq.ft. for which we have seen more enquiries in the last few months than for some time. We remain optimistic of being able to report a letting or sale by the end of this year.

Vincent Lane, Dorking is now moving forward to the eventual sale of the whole site as contracts have been exchanged with Lidl for a food store at a price of £1.88m and a conditional contract has been exchanged with Persimmon Homes for the balance of the site for a sum of £3.085m. This latter sale is however subject to obtaining residential planning consent.

Securities Portfolio

At 31 December 2011 the value of our investment portfolio had decreased from £12,386,000 in 2010 to £9,078,000 as a result of disposals of £3,948,000 and acquisitions of £843,000. The realised losses on sales amounted to £453,000 whilst the unrealised gains on the portfolio amounted to £250,000.

Our principal unquoted investment is that in Memorial Holdings Ltd of £2,568,000 which represents a minority holding in Kemnal Park Cemetery. The construction of the cemetery has been delayed by 12 months due to planning issues on the chapel but is expected to be partially operational in the summer of this year with the chapel construction completed by the end of the year.

The UK Bonds held at the end of the year amounted to £2,183,000. Since the year end we have sold a further £721,000, with plans for the balance to be sold during the first six months of this year.

Our principal AIM quoted shareholding is SpaceandPeople plc which markets and sells promotional space on behalf of shopping centres. The company recently announced a 30% rise in basic EPS on a like-for-like basis in respect of its year ending 31 December 2011. These results have had a positive impact on the share price since the year end.

There are strategies in place for the disposal of the whole of our investment portfolio over the next 18 months which, in turn, will result in a further decrease in our investment income.

Cash at Bank

As a result of our strategy to dispose of the Group’s assets the cash at bank has increased to £6,193,000 as at 31 December 2011 from £2,831,000 at 31 December 2010. We do however have to continue to make investments in our property portfolio to maximise the value for eventual sale and, as a result, a further £627,000 was expended on our portfolio during 2011.

Borrowings

Borrowings in the Group increased from £17,744,000 at 31 December 2010 to £20,108,000 at 31 December 2011. The major part of this increase was to acquire long leasehold interests at Newton-le-Willows to enable vacant possession to be obtained on the site.

Borrowings consist of loans totalling £15,037,000 secured against our property investment portfolio and £5,071,000 of overdraft facilities secured against our cash balances. The loan facility is split between the Co-operative Bank in the sum of £9,932,000 which expires in May 2012 and with Royal Bank of Scotland in the sum of £5,105,000 which expires in July 2012. Confirmation has been received from the Co-operative Bank that it will extend the facility for a further 12 month period on similar terms but subject to a new condition which the directors fully expect to be able to meet; and in addition, confirmation has been received from Royal Bank of Scotland that it is not aware of any reason for seeking full repayment of the borrowing at this time and is considering favourably extending the facilities.

Disposal Strategy

We continue to work to our business plan of disposing of all your Company’s assets by the end of 2013. I would like to thank all of our staff for their continued support whilst the Company is being wound down.

26 April 2012

Derek Lucie-Smith

Chief Executive

GRESHAM HOUSE PLC

PRELIMINARY FINANCIAL STATEMENT

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2011

2011

 

2010

Revenue   Capital   Total Revenue   Capital   Total
£' 000 £' 000 £' 000 £' 000 £' 000 £' 000
Income:
Dividend and interest income 386 - 386 446 - 446
Rental income 1,036 - 1,036 1,435 - 1,435
Sale of development in hand - - - 3,025 - 3,025
Other operating income 81   -   81 186   -   186
Total Income 1,503 - 1,503 5,092 - 5,092
Operating costs:
Costs of sale of development in hand - - - (2,434) - (2,434)
Property outgoings (1,051) - (1,051) (1,068) - (1,068)
Administrative overheads (913)   -   (913) (1,221)   (297)   (1,518)
Net trading (loss)/profit (461) - (461) 369 (297) 72
Gains & (losses) on investments:
Gains & (losses) on investments held at fair value - (203) (203) - 813 813
Movement in fair value of property investments - (1,804) (1,804) - 490 490
Profit on disposal of plant & equipment -   -   - 1   -   1
Group operating (loss)/profit (461) (2,007) (2,468) 370 1,006 1,376
Finance costs (695) - (695) (1,039) - (1,039)
Share of joint venture operating profit/(loss) 795   -   795 (32)   -   (32)
Group and share of joint venture operating profit/(loss) before taxation (361) (2,007) (2,368) (701) 1,006 305
Taxation -   -   - -   -   -
(Loss)/profit and total comprehensive income (361)   (2,007)   (2,368) (701)   1,006   305
 
Attributable to:
Equity holders of the parent 264 (1,816) (1,552) (217) 1,173 956
Non-controlling interest (625)   (191)   (816) (484)   (167)   (651)
(361)   (2,007)   (2,368) (701)   1,006   305
Basic and diluted (loss)/earnings per ordinary share 4.9p   (33.8p)   (28.9p) (4.3p)   23.5p   19.2p

Notes

(i) The total column of this statement represents the Group’s Statement of Comprehensive Income, prepared in accordance with IFRSs.

(ii) The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

(iii) All revenue and capital items in the above statement derive from continuing operations.

(iv) Dividends - Ordinary shares:

Proposed final dividend of 1p per share (2010: 1p) payable on 15 June 2012 to shareholders on the register at 25 May 2012 at a total cost of £53,699 (2010: £53,699).

(v) The summary of results for the year ended 31 December 2011 does not constitute statutory accounts within the meaning of s435(1) of the Companies Act 2006. The financial information has been extracted from the Group’s full statutory accounts for the year ended 31 December 2011 in which the auditors’ report was neither qualified, nor contained any reference to emphasis of matter, nor any statement under section 498(2) or section 498(3) of the Companies Act 2006. The full statutory accounts will be available on the Company’s website www.greshamhouse.com and will be posted to shareholders shortly.

(vi) The basic and diluted (loss) / earnings per share figure is based on the net loss for the year attributable to the equity shareholders of £1,552,000 (2010: profit £956,000) and on 5,369,880 (2010: 4,990,176) ordinary shares, being the weighted average number of ordinary shares in issue during the period.

There were no potentially dilutive ordinary shares as at 31 December 2011.

GRESHAM HOUSE PLC

PRELIMINARY FINANCIAL STATEMENT

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

YEAR ENDED 31 DECEMBER 2011
  Ordinary share capital   Share premium   Share option reserve   Capital reserve   Retained earnings   Equity attributable to equity share-holders   Non-controlling interest   Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 31 December 2010 1,342 2,302 14 35,902 (13,949) 25,611 (227) 25,384
(Loss)/profit for the period being total comprehensive income for the year - - - (1,816) 264 (1,552) (816) (2,368)
Ordinary dividends paid -   -   -   -   (54)   (54)   -   (54)
Balance at 31 December 2011 1,342   2,302   14   34,086   (13,739)   24,005   (1,043)   22,962

 

YEAR ENDED 31 DECEMBER 2010
Ordinary share capital Share premium Share option reserve Capital reserve Retained earnings Equity attributable to equity share-holders Non-controlling interest Total equity
  £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 31 December 2009 1,220 847 14 34,729 (13,683) 23,127 424 23,551
Profit/(loss) for the year being total comprehensive income for the period - - - 1,173 (217) 956 (651) 305
Ordinary dividends paid - - - - (49) (49) - (49)
Issue of shares (net of costs of £46,000) 122   1,455   -   -   -   1,577   -   1,577
Balance at 31 December 2010 1,342   2,302   14   35,902   (13,949)   25,611   (227)   25,384

GRESHAM HOUSE PLC

PRELIMINARY FINANCIAL STATEMENT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011

    2011   2010
Assets £'000 £'000
Non current assets
Investments – securities 6,808 12,386
Property investments 22,193 28,620
Investment in joint venture - 908
Other investments - -
Plant and equipment - -
29,001 41,914
Current assets
Trade and other receivables 243 268
Accrued income and prepaid expenses 512 609
Other current assets 802 1,008
Cash and cash equivalents 6,193 2,831
Non current assets held for sale
Investments – securities 2,270 -
Property investments 5,250 -
Total current assets and non current assets held for sale 15,270 4,716
 
Total assets 44,271 46,630
 
Current liabilities
Trade and other payables 1,122 3,186
Short term borrowings 14,858 14,634
Other financial liabilities 79 88
Liabilities of a disposal group classified as held for sale
Short term borrowings 5,250   -
21,309 17,908
   
Total assets less current liabilities 22,962 28,722
 
Non-current liabilities
Long term borrowings - 3,110
Other financial liabilities - 228
Deferred taxation - -
- 3,338
   
Net assets 22,962 25,384
 
Capital and reserves
Ordinary share capital 1,342 1,342
Share premium 2,302 2,302
Share option reserve 14 14
Capital reserve 34,086 35,902
Retained earnings (13,739) (13,949)
Equity attributable to equity shareholders 24,005 25,611
Non-controlling interest (1,043) (227)
Total equity 22,962 25,384
 
Basic and diluted net asset value per ordinary share 447.0p 476.9p

Notes

Basic and diluted net asset value per ordinary share is based on Equity attributable to equity shareholders at the year end and on 5,369,880 (2010: 5,369,880) ordinary shares being the number of ordinary shares in issue at the year end. No shares were deemed to have been issued at nil consideration as a result of options granted and hence there were no potentially dilutive ordinary shares as at 31 December 2011.

GRESHAM HOUSE PLC

PRELIMINARY FINANCIAL STATEMENT

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2011

  2011   2011   2010   2010
£'000 £'000 £'000 £'000
Cash flow from operating activities
Investment income received 65 63
Interest received 508 73
Rental income received 989 1,635
Other cash payments (1,795) (2,172)
Net cash utilised in operations (233) (401)
 
Interest paid on property loans (848) (838)
(848) (838)
 
Net cash flow from operating activities (1,081) (1,239)
 
Cash flows from investing activities
Purchase of investments (843) (9,346)
Receipt from / (investment in) joint venture 1,703 (940)
Sale of investments 3,955 10,197
Sale of tangible fixed assets - 3
Repayment of loans 167 -
Expenditure on investment properties (2,832) (1,191)
Sale of developments in hand - 3,025
Purchase of developments in hand (17) (249)
2,133 1,499
Cash flows from financing activities
Repayment of loans (484) (10,222)
Receipt of loans 2,848 2,222
Share capital issued - 1,577
Equity dividends paid (54) (49)
2,310 (6,472)
 
Increase/(decrease) in cash and cash equivalents 3,362 (6,212)
 
Cash and cash equivalents at start of year 2,831 9,043
   
Cash and cash equivalents at end of year 6,193 2,831

NOTES TO THE GROUP STATEMENT OF CASH FLOWS

  2011   2010
£’000 £’000
Revenue return before taxation (361) (701)
Interest payable 598 877
Profit on disposal of property, plant & equipment - (1)
Share of joint venture (profits)/losses (795) 32
(558) 207
Decrease/(increase) in current assets 169 (158)
Increase/(decrease) in current liabilities 156 (450)
(233) (401)

GRESHAM HOUSE PLC

PRELIMINARY FINANCIAL STATEMENT

SEGMENTAL REPORTING

  Investment   Property Investment   Elimination   Consolidated
2011   2010 2011   2010 2011   2010 2011   2010
Revenue £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
External income 466 479 1,032 4,599 - - 1,498 5,078
Inter – segment income 1,133 916 - - (1,133) (916) - -
Total revenue 1,599 1,395 1,032 4,599 (1,133) (916) 1,498 5,078
 
(Loss)/gain on investments at fair value (203) 813 - - - - (203) 813
Movement on property investments at fair value - - (1,804) 490 - - (1,804) 490
Profit on disposal of property, plant and equipment - - - 1 - - - 1
Total income and gains 1,396 2,208 (772) 5,090 (1,133) (916) (509) 6,382
 
Segment expenses - (47) (1,051) (3,502) - - (1,051) (3,549)
Inter – segment expense - - (1,133) (916) 1,133 916 - -
Interest expense (134) (113) (561) (926) - - (695) (1,039)
Segment profit/(loss) 1,262 2,048 (3,517) (254) - - (2,255) 1,794
Unallocated corporate expenses (913) (1,471)
Operating (loss)/profit (3,168) 323
Share of joint venture profit/(loss) 795 (32)
Interest income 5 14
(Loss)/profit before taxation (2,368) 305
 
The Group’s policy is to invest in both securities and commercial properties. Accordingly management reporting is split on this basis under the headings “Investment” and “Property Investment” respectively. Inter-segment income consists of management fees and interest on inter-company loans. Unallocated corporate expenses relate to those costs which cannot be readily identified to either segment.

 

All activity and revenue is derived from operations within the United Kingdom. Three customers accounted for £692,000 of the external income for the Property Investment segment. Property operating expenses relating to property investments that did not generate any rental income were £105,000 (2010: £nil).

 
Other Information Investment Property Investment Unallocated Consolidated
2011 2010 2011 2010 2011 2010 2011 2010
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Segment assets 16,147 16,413 28,124 30,217 - - 44,271 46,630
Segment liabilities (5,415) (2,464) (15,894) (18,782) - - (21,309) (21,246)
10,732 13,949 12,230 11,435 - - 22,962 25,384
Capital expenditure 843 9,297 627 3,530 - - 1,470 12,827
Depreciation - - - - - - - -
Non-cash expenses other than depreciation - - - - - - - -
All non current assets are located within the United Kingdom.

GRESHAM HOUSE PLC

PRELIMINARY FINANCIAL STATEMENT

The principal accounting policies adopted by the Group are fundamentally the same as the previous year other than the Basis of preparation note and a new policy for Assets held for sale which are reproduced in full below. Full disclosure of the principal accounting policies and related party transactions are included in the financial statements which will be available on the Company’s website www.greshamhouse.com shortly.

Basis of preparation

(a) Basis of preparation

The financial statements of the Group and the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

During 2011 the following accounting standards and guidance were adopted by the Group and were mandatory for the accounting period, but either had no material impact on the Group’s financial statements or were not relevant to the operations of the Group:

(i) Amendment to IFRS 1 First time adoption of IFRS

(ii) Amendment to IAS 32 Financial instruments: Presentation

(iii) Amendment to IAS 24 Related party disclosures

(iv) IFRIC 14 Prepayments of a minimum funding requirement

The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice (“the SORP”) for investment trusts issued by the Association of Investment Companies (“the AIC”) is consistent with the requirements of IFRS and appropriate in the context of the Company’s activities, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

Other standards and interpretations have been issued which will be effective for future reporting periods but have not been adopted in these financial statements as set out in note (v).

As the Group’s investment objective is now the orderly realisation of the Group’s assets over a period of approximately two years with a view to returning capital to shareholders thereafter, the Group technically ceases to be a going concern as it is the intention to realise assets and return capital to shareholders in due course. During the realisation period the Group expects to trade in an orderly fashion and, in the directors’ opinion, the valuation bases applied to the assets and liabilities (as disclosed elsewhere within the accounting policies) are such that there would be no material adjustments to the financial statements if they had been prepared on a going concern basis.

The Group has short term bank borrowings of £20.1m due within one year including a loan of £9.9m from the Co-operative Bank repayable by 31 May 2012 and a further loan of £5.1m from Royal Bank of Scotland repayable by 16 July 2012. Confirmation has been received from the Co-operative Bank plc that it will extend the facility for a further 12 month period on similar terms but subject to a condition that needs to be met by the end of May 2012. The directors fully expect to be able to meet this additional requirement in the timescale stated. In addition confirmation has been received from the Royal Bank of Scotland plc that it is not aware of any reason for seeking full repayment of the borrowing at this time and is considering favourably extending the facilities.

On this basis the directors are of the opinion that the Group will have sufficient working capital to fund ongoing activities for at least the next 12 months.

(b) Assets held for sale

Non-current assets held for sale are measured at the lower of carrying amount and fair value less costs to sell (except where the exemptions of paragraph 5 of IFRS 5 apply) and are classified as such if their carrying amount will be recovered through a sale transaction rather than through continuing use.

This is the case when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets and the sale is considered to be highly probable. A sale is considered to be highly probable if the appropriate level of management is committed to a plan to sell the asset, and a further active programme to locate a buyer and complete the plan has been initiated, Further, the asset has to be marketed for sale at a price that is reasonable in relation to its current fair value. In addition, the sale is expected to qualify for recognition as a completed sale within one year from the date that it is classified as held for sale.

GRESHAM HOUSE PLC

PRELIMINARY FINANCIAL STATEMENT

DIRECTORS’ RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the directors' report, the directors' remuneration report and the financial statements in accordance with applicable law and regulations. They are also responsible for ensuring that the annual report includes information required by the Listing Rules of the Financial Services Authority.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and have elected to prepare the parent company financial statements in accordance with those standards. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

In preparing these financial statements the directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgments and accounting estimates that are reasonable and prudent;
  • state whether the financial statements have been prepared in accordance with IFRSs as adopted by the European Union; and
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions, to disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in annual reports may differ from legislation in other jurisdictions.

The directors confirm, to the best of their knowledge:

  • that the Group financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and
  • that the management report included within the directors' report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

Further information:

Derek Lucie-Smith (Chief Executive, Gresham House plc) 020 7592 7020

Brian Hallett (Finance Director, Gresham House plc) 01489 570 861

Richard Johnson (Westhouse Securities Limited) 020 7601 6100

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