Half-yearly Report

Half-yearly Report

Gresham House plc

GRESHAM HOUSE plc

INTERIM RESULTS 2010

CHAIRMAN’S INTERIM STATEMENT AND MANAGEMENT REPORT

I am pleased to report on the half year results for the period ended 30th June, 2010 which show an overall loss attributable to equity shareholders of £210,000 and a reduction in net asset value from 473.7p at 31st December, 2009 to 468.4p at 30th June, 2010. As per our normal policy, no independent property valuations have been undertaken at the interim stage.

REVENUE ACCOUNT

The loss for the half year of £83,000 showed an improvement over the previous reported half year losses to 30th June, 2009 of £140,000 and the half year to 31st December, 2009 of £761,000.

The principal reason for this improvement was the sale of the development property at Curtis Road, Dorking for a net amount of £2,907,000 against a book value of £2,308,000, thereby showing a profit on sale of £599,000. This sale will reduce ongoing losses as the property was not income producing and the related bank debt of £1.4 m was repaid.

Rental income decreased by £203,000 from the second half of last year due to the loss of income at Newton le Willows where income from our industrial units has decreased by £395,000 as a result of residential planning consent being obtained earlier this year. Rental income at Southern Gateway, Speke increased in this half year from £333,000 (half year to 31 December 2009) to £513,000 due to the receipt of a £250,000 premium received from a former tenant which terminated its lease in March 2010 with a resulting annualised loss of rent of £168,000 per annum.

Dividend and interest income increased from £60,000 (half year to 31st December, 2009) to £211,000 principally due to the acquisition of £5.5 m of corporate bonds which yielded interest of £122,000 during the period under review. As previously reported these bonds were purchased from the proceeds of the sale of our investment in Hallin Marine in February 2010 following a successful takeover bid. The Hallin Marine shares were low yielding and we anticipate greater overall dividend and interest income from our investments over the full year.

As required by accounting standards, Other operating income includes an amount of £3,025,000 representing the gross sale proceeds of our development property at Curtis Road mentioned above. The net costs associated with this sale of £2,426,000 have been included in Property outgoings.

Excluding the costs mentioned above, Property outgoings reduced from £818,000 (half year to 31st December, 2009) to £607,000, the main variances being an overall reduction in vacant unit costs of £130,000 between the two periods and a provision of £92,000 being included in the amount for the six months to 31st December, 2009 against the Curtis Road development in hand. Administrative overheads increased from £372,000 (half year to 31st December, 2009) to £684,000 due primarily to the combined effect of an increase in the provision made for the settlement of litigation brought by a former employee and associated legal costs, loan fees incurred in respect of a working capital facility secured by the group and the figure for the six months ended 31st December, 2009 benefitting from a loan redemption discount of £146,000.

Finance costs consist of bank interest and fees and the movement in the fair value of interest rate swaps. Bank interest is comparable with the amount incurred in the second half of 2009 with the movement in fair value being £267,000 in 2009 and £112,000 for the period under review.

CAPITAL ACCOUNT

The capital losses for the half year to 30th June, 2010 attributable to equity shareholders amounted to £153,000, representing a decrease in net asset value of 3.1p per share. The principle reason for the decrease is due to providing for the capital expenditure incurred on the investment properties during the period under review as a result of the valuations as at 31st December, 2009 being maintained. As per our normal policy, no independent valuations have been undertaken as at 30th June, 2010.

PROPERTY PORTFOLIO

At Newton-le-Willows, I am pleased to report that we have obtained an outline planning consent for 440 houses and a 3,000 square metre commercial hub. We are currently in discussions with a number of house builders and, despite the fragile state of the residential market, we are progressing to finalise terms on the sale of the site.

At Southern Gateway, Speke, as mentioned above, a major tenant terminated its lease in March 2010 with an annualised loss of rent of £168,000. We have however agreed terms with our principal tenant to extend its space and improve the longevity of the lease. The Inhalations Building has been re-branded as the Liverpool Science Centre and it is our intention to provide 5,000 square metres of specialist pharmaceutical facilities with potential rental income in excess of £500,000 per annum.

At Vincent Lane, Dorking, we are close to signing conditional sale contracts with a discount food retailer and a national house builder. A planning application will be submitted later in the year.

During the period under review we have seen an increase in the number of parties looking to rent our recently built warehouse at Northern Gateway, Knowsley. As a result, we remain confident that despite the continued fragility of the occupier market, the quality of our product will attract a tenant in the near future.

In April 2010 we completed the acquisition of a 2.4 acre site in Aberdeen having secured both a pre-let to Hallin Marine and a detailed planning consent for their UK Headquarters. Construction of these premises is scheduled for completion in April 2011 and we envisage that a sale will generate a good return.

We have recently also acquired a 25% stake in a potential residential development site in the centre of Edinburgh for a net investment of £875,000. This site is currently a disused Royal Mail sorting office. Our partners intend to secure residential planning during the course of the year.

INVESTMENTS

As reported in my statement included in the 2009 Report and Accounts, during the half year under review we received £8.6m from the sale of our investment in Hallin Marine Subsea International plc of which £5.5m was invested in corporate bonds with maturity dates between 2013 and 2018. These bonds have a weighted average yield of 6.5% and are rated from BBB- to A+. In addition we received a sum of £957,000 from the liquidator of Welsh Industrial Investment Trust plc following the decision by its shareholders in April 2010 to liquidate the company. This showed a £156,000 realised gain over the 31st December, 2009 book value.

We continue to review our investment portfolio with a view to realising these over a period of time once we have maximised value. One such investment is our 5% stake in Kemnal Manor Memorial Cemetery in the London Borough of Bromley. Development has started on this 55 acre site which will be fully operational in the spring next year. As we believe this investment has significant potential, consideration is being given to acquiring a further interest in the near future.

THE FUTURE

We are currently reviewing various options to enlarge the capability of further property investments. Despite the market being very fragmented at present, your management team believes that there are a number of opportunities for secondary and tertiary properties where there is potential to secure capital gains in the medium term.

Tony Ebel
Chairman

24th August, 2010

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

  Half year ended     Half year ended     Year ended
30th June, 2010 30th June, 2009 31st December, 2009
Revenue   Capital   Total Revenue   Capital   Total Revenue   Capital   Total
£' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000 £' 000
 
Income:
Dividend and Interest income 211 - 211 140 - 140 200 - 200
Rental income 882 - 882 1,027 - 1,027 2,112 - 2,112
Other operating income 3,076 - 3,076 46 - 46 62 - 62
Total Revenue 4,169 - 4,169 1,213 - 1,213 2,374 - 2,374
Gains / (losses) on investments held at fair value - (12) (12) - 2,861 2,861 - 5,872 5,872
Movement in fair value of property investments - (157) (157) - (233) (233) - (1,524) (1,524)
Profit on disposal of property, plant & equipment 1 - 1 - - - - - -
Total income and gains / (losses) on investments 4,170 (169) 4,001 1,213 2,628 3,841 2,374 4,348 6,722
Operating Costs

Property outgoings and impairments (note 7)

(3,033) - (3,033) (559) - (559) (1,377) - (1,377)
Administrative overheads (684) - (684) (464) - (464) (836) - (836)
(3,717) - (3,717) (1,023) - (1,023) (2,213) - (2,213)
Group operating profit / (loss) 453 (169) 284 190 2,628 2,818 161 4,348 4,509
Finance costs (note 8) (536) - (536) (320) - (320) (1,052) - (1,052)
Share of joint venture operating loss - - - (10) - (10) (10) - (10)
Group and share of joint venture operating loss before taxation (83) (169) (252) (140) 2,628 2,488 (901) 4,348 3,447
Taxation - - - - - - - - -
Profit/(loss) and total comprehensive income for the period (83) (169) (252) (140) 2,628 2,488 (901) 4,348 3,447
 
Attributable to:
Equity holders of the parent (57) (153) (210) (312) 2,646 2,334 (1,012) 4,366 3,354
Non-controlling interest (26) (16) (42) 172 (18) 154 111 (18) 93
(83) (169) (252) (140) 2,628 2,488 (901) 4,348 3,447
 

Basic and diluted (loss) / earnings per Ordinary Share (note 10)

(4.3p) 47.8p 68.7p
 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

 
         

 

     
Half year ended 30th June, 2010
Equity
Ordinary Share attributable Non-
share Share option Capital Retained to equity controlling
capital premium reserve reserve earnings shareholders interest Total
£'000 £'000 £'000 £'000 £'000 £’000 £’000 £'000
Balance at 31st Dec 2009 1,220 847 14 34,729 (13,683) 23,127 424 23,551

Loss for the period being total comprehensive income for the period

- - - (153) (57) (210) (42) (252)
Ordinary dividend paid (note 9) - - - - (49) (49) - (49)
Balance at 30th June 2010 1,220 847 14 34,576 (13,789) 22,868 382 23,250

 

 
Half year ended 30th June, 2009
Equity
Ordinary Share attributable Non-
share Share option Capital Retained to equity controlling
capital premium reserve reserve earnings shareholders interest Total
£'000 £'000 £'000 £'000 £'000 £’000 £’000 £'000
Balance at 31st Dec 2008 1,220 847 42 30,363 (12,650) 19,822 331 20,153

Profit/(Loss) for the period being total comprehensive income for the period

- - - 2,646 (312) 2,334 154 2,488
Ordinary dividend paid (note 9) - - - - (49) (49) - (49)
Balance at 30th June 2009 1,220 847 42 33,009 (13,011) 22,107 485 22,592

 

 
Year ended 31st December, 2009
Equity
Ordinary Share attributable Non-
share Share option Capital Retained to equity controlling
capital premium reserve reserve earnings shareholders interest Total
£'000 £'000 £'000 £'000 £'000 £’000 £’000 £'000
Balance as at 31st Dec 2008 1,220 847 42 30,363 (12,650) 19,822 331 20,153

Profit/(Loss) for the period being total comprehensive income for the period

- - - 4,366 (1,012) 3,354 93 3,447
Ordinary dividend paid (note 9) - - - - (49) (49) - (49)
Share based payments - - (28) - 28 - - -
Balance at 31st Dec 2009 1,220 847 14 34,729 (13,683) 23,127 424 23,551
 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30th JUNE, 2010

   

30th June,
2010

   

30th June,
2009

 

 

31st December,
2009

Assets £'000 £'000 £'000
Non current assets
Investments - securities 10,142 9,017 12,723
Property investments 24,600 25,750 24,600
Investment in joint venture - - -
Property, plant and equipment - 3 2
Total non current assets 34,742 34,770 37,325
 
Current assets
Trade and other receivables 237 358 504
Accrued income and prepaid expenses 728 514 714
Other current assets 3,101 3,361 3,408
Cash and cash equivalents 3,278 2,741 9,043
Total current assets 7,344 6,974 13,669
Total assets 42,086 41,744 50,994
 
Current liabilities
Trade and other payables 2,286 1,374 1,432
Short term borrowings 11,006 7,363 19,037
Total current liabilities 13,292 8,737 20,469
 
Total assets less current liabilities 28,794 33,007 30,525
 
Non current liabilities
Long term borrowings 5,165 10,415 6,707
Other financial liabilities 379 - 267
Deferred taxation - - -
5,544 10,415 6,974
Net assets 23,250 22,592 23,551
 
Capital and reserves
Ordinary share capital (note 11) 1,220 1,220 1,220
Share premium 847 847 847
Share option reserve 14 42 14
Capital reserve 34,576 33,009 34,729
Retained earnings (13,789) (13,011) (13,683)
Equity attributable to equity shareholders 22,868 22,107 23,127
Non-controlling interest 382 485 424
Total equity 23,250 22,592 23,551
 

Basic and diluted net asset value per ordinary share (note 12)

468.4p 452.8p 473.7p
 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE HALF YEAR ENDED 30th JUNE, 2010

    6 months to 30th June, 2010     6 months to 30th June, 2009  

 

12 months to 31st December, 2009

£'000 £'000 £'000
Cashflow from operating activities
Investment income received 197 117 142
Interest received 14 23 58
Rental income received 1,090 1,027 1,819
Other cash payments (578) (984) (2,053)
Net cash generated from operations (note 15) 723 183 (34)
 
Interest paid on bank loans and overdrafts (434) (331) (717)
Net cash flows from operating activities 289 (148) (751)
 
Cash flows from investing activities
Purchase of investments (7,012) (31) (1,252)
Investment in joint venture - (10) (10)
Sale of investments 9,582 564 1,089
Sale of tangible fixed assets 3 980 980
Expenditure on investment properties (157) (233) (374)
Disposal of developments in hand 2,695 - -
Purchase of developments in hand (1,542) (10) (234)
3,569 1,260 199
Cash flows from financing activities
Repayment of loans (9,983) (10,804) (18,090)
Receipt of loans 409 10,643 25,895
Share capital issued - - -
Equity dividends paid (49) (49) (49)
(9,623) (210) 7,756
 
(Decrease) / increase in cash and cash equivalents (5,765) 902 7,204
 
Cash and cash equivalents at start of period 9,043 1,839 1,839
     
Cash and cash equivalents at end of period 3,278 2,741 9,043
 

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1 REPORTING ENTITY

Gresham House plc (“the Company”) is a company incorporated in England. The unaudited condensed consolidated interim financial statements of the Company as at and for the six months ended 30th June, 2010 comprise the Company and its subsidiary undertakings (together referred to as the “Group”). All intra-group transactions, balances, income and expenses are eliminated on consolidation.

2 STATEMENT OF COMPLIANCE

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting. They do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.

The unaudited condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements of the Group and Company as at and for the year ended 31st December, 2009 which were prepared in accordance with IFRS as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS, and have been reported on by the Company’s auditors. The auditors’ report was unqualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The unaudited condensed consolidated interim financial statements were approved by a duly appointed and authorised committee of the Board of Directors on 24th August, 2010. The financial information for the half years ended 30th June, 2010 and 30th June, 2009 has not been audited and the auditors have not reported on or reviewed these interim financial statements. The information for the year ended 31st December, 2009 has been extracted from the latest published audited financial statements.

3 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Group in these unaudited condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31st December, 2009.

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.

The interim financial statements highlight that the Group has loans of £11.0m due within one year. On the basis that The Co-operative Bank plc facility of £10.4m is technically repayable on demand but has an expiry date of 31st May, 2012 these financial statements have been prepared on a going concern basis.

After making enquiries, and having due regard to the above, the directors believe that the Group has access to sufficient working capital for the foreseeable future and therefore remains a going concern.

4 ESTIMATES

The preparation of the unaudited condensed consolidated interim financial statements requires management to make judgements estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these unaudited condensed consolidated interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31st December, 2009.

5 FINANCIAL RISK MANAGEMENT

The Group’s financial risk management objectives and policy are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31st December, 2009.

6 INCOME

  Half year ended 30th June, 2010     Half year ended 30th June, 2009  

 

Year ended 31st December, 2009

£’000 £'000 £'000
 
Income from investments:
 
Dividend income – Listed UK 58 117 142
Interest receivable – Bank & brokers 8 9 27

       – Other

145 14 31
211 140 200
Rental income 882 1,027 2,112
     
1,093 1,167 2,312
 
Other operating income
Dealing profits and losses (12) (7) (54)
Management fees receivable 30 44 79
Sale of development in hand (note 7) 3,025 - -
Other 33 9 37
3,076 46 62
     
Total income 4,169 1,213 2,374
 
Total income comprises:
Dividends 58 117 142
Interest 153 23 58
Rental income 882 1,027 2,112
Other operating income 3,076 46 62
     
4,169 1,213 2,374
 

7 OPERATING COSTS

Included in property outgoings and impairments is a sum of £2,426,000 in respect of the net costs associated with the sale of the development site at Curtis Road, Dorking. This sum consists of the net realisable value as at 31st December, 2009 of £2,200,000 together with £226,000 in respect of additional costs incurred during the period.

8 FINANCE COSTS

Half year ended 30th June, 2010     Half year ended 30th June, 2009  

 

Year ended 31st December, 2009

£’000 £'000 £'000
 
Interest payable on loans and overdrafts 424 320 785
Movement in fair value of interest rate swaps 112 - 267
536 320 1,052
 
In addition:
Interest capitalised on development properties

-

43 43
 

9 DIVIDENDS

Half year ended 30th June, 2010     Half year ended 30th June, 2009  

 

Year ended 31st December, 2009

£’000 £'000 £'000
Amounts recognised as distributions to equity holders in the period:
 
Final dividend for the year ended 31st December, 2009 of 1p (2008: 1p) per share 49 49 49
     
49 49 49
 

10 EARNINGS PER SHARE

Basic and diluted (loss) / earnings per share

The basic and diluted (loss) / earnings per share figure is based on the net loss attributable to equity holders of the parent for the half year of £210,000 (half year ended 30th June, 2009: £2,334,000; year ended 31st December, 2009: £3,354,000) and on 4,881,880 ordinary shares, being the weighted average number of ordinary shares in issue during each respective period.

The calculation for diluted earnings per share for the periods ended 30th June, 2010 and 30th June, 2009 and the year ended 31st December, 2009 should have included a figure in respect of shares deemed to have been issued at nil consideration as a result of options granted. However as this would have reduced the weighted average number of shares in issue and hence result in the diluted earnings per share being greater than the basic earnings per share they have not been recognised

The (loss)/earnings per ordinary share figures detailed above can be further analysed between revenue and capital as follows:-

  Half year ended 30th June, 2010     Half year ended 30th June, 2009     Year ended 31st December, 2009
£’000 £’000 £’000
Net revenue loss attributable to equity holders of the parent (57) (312) (1,012)

Net capital (loss)/gain attributable to equity holders of the parent

(153) 2,646 4,366

Net total (loss)/gain

(210) 2,334 3,354
 
Weighted average number of ordinary shares in issue during the period
Basic and diluted 4,881,880 4,881,880 4,881,880
 
 
Basic and diluted (loss) / earnings per share Pence Pence Pence
Revenue (1.2) (6.4) (20.7)
Capital (3.1) 54.2 89.4
Total basic and diluted (loss) / earnings per share (4.3) 47.8 68.7
 

11 ORDINARY SHARE CAPITAL

  30th June, 2010     30th June, 2009     31st December, 2009
Share Capital £’000 £’000 £’000
Allotted: Ordinary – 4,881,880 (30th June, 2009 & 31st December, 2009: 4,881,880) fully paid shares of 25p each 1,220 1,220 1,220
 

12 NET ASSET VALUE PER SHARE

Basic and diluted net asset value

Basic and diluted net asset value per ordinary share is based on Equity attributable to equity shareholders as at 30th June, 2010, 30th June, 2009 and 31st December, 2009 and on 4,881,880 ordinary shares being the number of ordinary shares in issue at each respective period end.

The calculation for diluted net asset value should have included a figure in respect of shares deemed to have been issued at nil consideration as a result of options granted. However as this would have reduced the number of ordinary shares in issue at the period end and hence result in the diluted net asset value per share being greater than the basic net asset value per share they have not been recognised.

13 INVESTMENTS - SECURITIES

As at 30th June, 2010 the Company’s ten largest investments were:-

  Market Value     % of Portfolio
£’000
UK Listed Securities
HSBC plc 5.75% bond 960 9.5
HSBC plc 9.875% bond 1,039 10.2
Marks and Spencer plc 5.625% bond 594 5.9
National Grid plc 6.125% bond 684 6.7
Scottish and Southern Energy plc 5.75% bond 913 9.0
Standard Charter plc 6% bond 1,098 10.8
 
Securities dealt in under AIM
SpaceandPeople plc 1,031 10.2
 

Unquoted Securities

AudioGravity Holdings Limited 395 3.9
Abacus Land (BR) Limited Loan Notes 875 8.6
Memorial Holdings Limited 686 6.8
   
8,275 81.6
 

14 RELATED PARTY TRANSACTIONS

Management fees totalling £30,075 (half year ended 30th June, 2009: £33,615; year ended 31st December, 2009: £53,265) were invoiced to Watlington Securities Limited, a company in which Mr A. G. Ebel has a controlling interest. There were no balances outstanding at any period end. The Group also paid £12,500 (half year ended 30th June, 2009: £nil, year ended 31st December, 2009: £25,000) to Microdisc Limited, a company in which Mr A. G. Ebel has an interest, for consultancy services.

In recognition of his considerable past services to the Group since 1976 and most recently his contribution in maximising the value of the realisation of the Group’s investment in Hallin Marine Subsea International plc, the Remuneration Committee awarded Mr A. G. Ebel a sum of £250,000 by way of a contribution to his personal pension scheme.

Mr D Lucie-Smith has an interest in Prince’s Place LLP and Pelham (London) Limited which invoiced the Group a sum of £83,500 (half year ended 30th June, 2009: £74,004; year ended 31st December, 2009: £147,753) in respect of his services and associated office costs. At the period end there remained balances outstanding of £nil (half year ended 30th June, 2009: £nil; year ended 31st December, 2009: £4,016).

Conversely, during the period, the Group invoiced City Real Estate Acquisitions Limited £8,759 (half year ended 30th June, 2009: £nil; year ended 31st December, 2009: £10,109), Parkwood Asset Management Limited £1,149 (half year ended 30th June, 2009: £nil; year ended 31st December, 2009: £2,614) and Prince's Place LLP £1,935 (half year ended 30th June, 2009: £nil; year ended 31st December, 2009: £2,170) for rent and associated office costs. Mr D. Lucie-Smith has an interest in each of these companies. At the period end Parkwood Asset Management Limited owed £1,350 (half year ended 30th June, 2009: £nil; year ended 31st December, 2009: £nil).

Mr J. A. C. Lorimer has an interest in New Park Lane Limited which invoiced the Group a sum of £66,875 (half year ended 30th June, 2009: £50,000; year ended 31st December, 2009: £108,250) in respect of his services during the period. Conversely the Group invoiced New Park Lane Limited a sum of £623 (half year ended 30th June, 2009: £nil; year ended 31st December, 2009: £617). There were no amounts outstanding at any period end.

The Rowe Trust holds an interest of 644,209 (half year ended 30th June, 2009 and year ended 31st December, 2009: 644,209) ordinary shares in the Company. Mrs R. H. Chopin-John is a trustee of the Rowe Trust but has no beneficial interest.

During the period under review the members of Parkwood Property Investments LLP (“Parkwood”), a significant shareholder in the Company, advanced a sum of £409,216 by way of an unsecured loan to DIPS (Aberdeen) LLP (“DIPS”) representing 30% of the equity requirement to complete the development in hand currently being undertaken by DIPS. The loan carries no interest but entitles Parkwood to a 25% share in the profits made from the development in hand. DIPS is a limited liability partnership whose members are Parkwood Property Investments LLP (2) and Deacon Industrial Projects Limited, a wholly owned subsidiary of the Company. Both Mr D. Lucie-Smith and Mr J. Lorimer have a beneficial interest in Parkwood and Parkwood Property Investments LLP(2).

15 RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS

30th June 2010     30th June 2009     31st December 2009
£’000 £’000 £’000
Revenue return before taxation (83) (140) (901)
Interest payable 536 320 1,052
Profit on disposal of property, plant and equipment (1) - -
Depreciation of property, plant and equipment - - 1

Share of joint venture losses

- 10 10
452 190 162
(Increase)/decrease in current assets (143) 310 142
Increase/(decrease) in current liabilities 414 (317) (338)
723 183 (34)
 

16 SEGMENTAL REPORTING

As at 30th June, 2010 the Group is organised into two main operating segments – Investment in Securities and Property Investment. These segments are the basis on which the Group reports its segment information for management purposes.

The following table sets out the revenue and profit/(loss) information for the Group’s operating segments:

 

  Investment  

Property
InvestmentInvestment

     Consolidated
£’000 £’000 £’000
Half year ended 30th June, 2010
Revenue 94 3,922 4,016
Result 66 213 279
Unallocated corporate expenses (684)
Operating loss (405)
Interest income 153
Loss before taxation (252)
 

Half year ended 30th June, 2009

Revenue 163 1,027 1,190
Result 3,024 (85) 2,939
Unallocated corporate expenses (464)
Operating loss 2,475
Share of joint venture loss (10)
Interest income 23
Profit before taxation 2,488
 

Year ended 31st December, 2009

Revenue 183 2,133 2,316
Result 6,055 (1,820) 4,235
Unallocated corporate expenses (836)
Operating loss 3,399
Share of joint venture loss (10)
Interest income 58
Profit before taxation 3,447

All revenue is derived from operations within the United Kingdom.

 

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF YEARLY FINANCIAL REPORT

We confirm that to the best of our knowledge:

(a) the unaudited condensed consolidated interim financial statements, which have been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Group;

(b) the Chairman’s interim statement and management report includes a fair review of the information required by:

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

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

Principal risks and uncertainties

The Board consider the principal risks and uncertainties relating to the Group for the next six months to be the same as detailed in the consolidated financial statements for the year ended 31st December, 2009. Full details of the risks and uncertainties are detailed under the Investment Policy section and in Note 23 of those financial statements.

The principal risks to the business include:-
EconomicEconomic
Strategic and investmentStrategic and investment
RegulatoryRegulatory
Financial and operatingFinancial and operating
Market and market liquidity; andMarket and market liquidity; and
Asset liquidity.Asset liquidity.

A G Ebel                                                                         D Lucie-Smith
Chairman Chief Executive Officer
 

Inquiries:

Gresham House plc
Derek Lucie-Smith, Chief Executive OfficerDerek Lucie-Smith, Chief Executive Officer
020 7590 7500 020 7590 7500

Brian Hallett
Finance Director and Company SecretaryFinance Director and Company Secretary
01489 570 861 01489 570 861

Arbuthnot Securities Limited
Hugh FieldHugh Field
020 7012 2000020 7012 2000

Companies

Gresham House (GHE)
UK 100
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