Final Results

29 May 2009 GSC Property Holdings plc PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE 12 MONTHS TO 31 DECEMBER 2008 Key points: * Rental income rises 4 per cent to GBP 7,793,240 (2007: GBP 7,496,055) * Full year dividend 3.5 pence (net) per share (2007: 5.5 pence) * Net asset value at year end 175 pence per share (2007: 302 pence) Mark Rubin, Chief Executive commented: "Our portfolio has held firm and our low risk strategy has underpinned our performance. GSC is well financed with long term borrowings unaffected by recent volatility. Very tough market conditions provide opportunities for companies like GSC that are able to move quickly and with the necessary financial resources." ------------------------------------ For further information please contact: Mark Rubin, Chief Executive 01702 293300 Jonathan Williams, Bishop Fleming (Corporate Adviser) 0117 910 0250 Anthony Spiro, Spiro Financial (Press and Investor Relations) 020 8336 6196 ------------------------------------ GSC Property Holdings specialises in commercial property investment in the UK. The company's strategy is to spread risk through building a diverse portfolio to minimise exposure to any single end use or geographical area. Our objective is to add maximum value for shareholders. ------------------------------------ CHAIRMAN'S STATEMENT The year to 31 December 2008 has been the toughest in the Company's history. Against a background of extremely difficult and worsening economic circumstances I am pleased to report that our property investment business delivered a creditable set of results. At the interim stage I referred to GSC not being immune from the market turbulence; conditions in the second half made the first half seem calm in comparison yet GSC was able to maintain its steady performance principally as a result of its cautious and low risk strategy. The Company's rental revenue was four per cent higher at GBP 7,793,240 compared with GBP 7,496,055 in 2007. The operating profit for the period was GBP 2,663,125 (2007: GBP 3,795,012). In the current circumstances your Board feels it is prudent to conserve cash and consequently the directors are recommending a final dividend of 1.5 pence per share (2007: 3.0 pence per share). The total dividend for the year is 3.5 pence per share (2007: 5.5 pence per share). It will be paid on 30 June 2009 to shareholders on the register on 12 June 2009. The Annual General Meeting of the Company will be held on 30 June 2009 at Courtway House, 129 Hamlet Court Road, Westcliff on Sea, Essex at 2pm. GSC's balance sheet remains sound and most of the company's borrowings are long term and at fixed rates. The current very low level of the Bank of England's Minimum Lending Rate is not reflected in commercial lending and we remain comfortable with our banking arrangements. Our principal bankers are Norwich Union and Lloyds TSB and these relationships stretch back many years. We review our banking arrangements regularly and during the year decided to end our relationship with Anglo Irish Bank. This was a very difficult decision and cost the company £604,812 in loan termination fees. Nevertheless we are confident that it was in the best interests of the Company and its shareholders. In 2008 we experienced a series of economic events, unparalleled in recent memory, including the near collapse of the global banking system. The ensuing credit and liquidity crisis impacted most severely on the property sector with market activity virtually ceasing to exist. The over heated property market of recent years, fuelled by excessive and uncontrolled bank lending, was always going to come to an end. The pace and extent of the unwinding of these positions has taken even the most cautious market participants by surprise. Our strategy is based on securing good quality commercial properties with unrealised potential available at attractive yields; the general absence of such investments meant we were not active participants in the property market during 2008, extending the caution we demonstrated in 2007. The Company did invest £1 million in its Maitland House property in Southend to upgrade its facilities and maximise occupancy. The net asset value of our properties is independently assessed annually. The NAV at 31 December 2008 was 175 pence per share, down from 302 pence per share twelve months earlier. While this is a significant reduction it reflects management's cautious approach to ensure that its properties are valued realistically especially in the current extraordinary conditions. GSC has always focused on owning quality commercial properties with first class covenants. The Company owns 32 properties with 78 tenants and during 2008 one tenant failed. A replacement has been secured at a higher rent. This has been a year unlike any other in the Company's history. Our portfolio has held firm and our low risk strategy has underpinned our performance. GSC is well financed with long term borrowings unaffected by recent volatility. Very tough market conditions provide opportunities for companies like GSC that are able to move quickly and with the necessary financial resources. Alan Gershlick 29 May 2009 EXTRACT FROM AUDITED FULL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2008 CONSOLIDATED PROFIT AND LOSS ACCOUNT Note 2008 2007 £ £ TURNOVER Continuing Operations 7,793,240 7,496,055 --------------- --------------- Group Turnover 7,793,240 7,496,055 Cost of sales (154,887) (329,408) --------------- --------------- GROSS PROFIT 7,638,353 7,166,647 Distribution costs (11,162) (25,079) Administrative expenses (2,464,066) (2,480,647 Assets held for sale - Fair Value Adjustment (2,500,000) (865,909) --------------- --------------- OPERATING PROFIT Continuing Operations 2,663,125 3,967,451 Discontinued Operations - (172,439) --------------- --------------- Group Operating Profit 2,663,125 3,795,012 Exceptional Item Loan exit fee (604,812) - Loss on disposal of fixed assets and investments - (180,001) Interest receivable and similar income 98,164 165,669 Interest payable (5,669,580) (5,328,511) --------------- --------------- Loss on ordinary activities before taxation (3,513,103) (1,547,831) Tax on profit on ordinary activities - - --------------- --------------- (Loss) for the Financial Year (3,513,103) (1,547,831) =============== =============== Basic Earnings per share (pence) (33.56) (14.85) Adjusted Earnings per share (pence) (122.37) (96.77) Weighted average number of ordinary shares 10,468,000 10,423,616 in issue S TATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES 2008 2007 £ £ (Loss) for the financial year attributable to (3,513,103) (1,547,831) the shareholders Unrealised (deficit)/surplus on investment (9,296,711) (8,538,886) properties ------------- ------------- Total gains and losses recognised since the last (12,809,814) (10,086,717) annual report ============= ============= NOTE OF GROUP HISTORICAL COST PROFIT AND LOSS 2008 2007 £ £ (Loss) before tax (1,013,103) (1,547,831) Realisation of valuation gains of previous periods - 829,266 ------------- ------------- Historical cost Profit / (Loss) before tax (1,013,103) (718,565) ============= ============= CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2008 2008 2007 £ £ FIXED ASSETS Intangible assets 281,849 299,465 Tangible assets 4,376,262 3,751,302 Investment Properties 86,521,001 93,894,000 --------------- --------------- 91,179,112 97,944,767 --------------- --------------- CURRENT ASSETS Stock 13,236 13,124 Assets held for sale 20,000,000 22,500,000 Debtors 1,422,021 1,308,953 Investments 200 200 Cash at bank 1,280,991 3,237,947 --------------- --------------- 22,716,448 27,060,224 --------------- --------------- CREDITORS: Amounts falling due within one year (7,071,027) (24,886,613) --------------- --------------- NET CURRENT ASSETS 15,645,421 2,173,611 --------------- --------------- TOTAL ASSETS LESS CURRENT LIABILITIES 106,824,533 100,118,378 CREDITORS: Amounts falling due after more than (88,502,598) (68,463,212) one year --------------- --------------- 18,321,395 31,655,166 =============== =============== CAPITAL AND RESERVES Called-up equity share capital 104,680 104,680 Share premium account 1,414,350 1,414,350 Revaluation Reserve 12,362,810 21,659,521 Profit and loss account 4,440,095 8,476,615 --------------- --------------- SHAREHOLDERS' FUNDS 18,321,935 31,655,166 =============== =============== NOTES TO THE FINAL RESULTS 1. DIVIDENDS 2008 2007 £ £ Interim dividend paid at 2p per share (2007 - 209,360 261,700 2.5p) Prior period final dividend paid at 3p per share 314,055 277,347 (2007 - 2.701p) ------------- ------------- 523,415 539,047 ============= ============= 2. EARNINGS PER SHARE Basic earnings per share have been calculated to report only distributable earnings arising in the period and do not include movements through the revaluation reserve. Adjusted earnings per share have been calculated to include total earnings attributable to equity shareholders arising in the period. The reconciliation between the two is shown below: 2008 2007 £ £ (Loss) / Profit after tax attributable to (3,513,103) (1,547,831) the shareholders Unrealised (losses) / gains arising on the (9,296,711) (8,538,886) revaluation of investment property ---------------- ---------------- Total (losses) / gains attributable to the (12,809,814) (10,086,717) shareholders ================ ================ Adjusted shares in issue 10,468,000 10,423,616 Pence Pence Basic earning per share (33.56) (14.85) Unrealised (losses) / gains arising on the (88.81) (81.92) revaluation of investment ------------- ------------- Adjusted earnings per share (122.37) (96.77) ======== ======== 3. SHARE CAPITAL Authorised share capital 2008 2007 £ £ 100,000,000 Ordinary shares of 1,000,000 1,000,000 1p each ======== ======== 2008 2008 2007 2007 No £ No £ Allotted and called up Ordinary shares of 1p each 10,468,000 104,680 10,468,000 104,680 ======== ======= ======== ======== 4. GROUP RESERVES Share premium account 2008 2007 £ £ Balance brought forward 1,414,350 716,350 Premium on shares issued in the year - 698,000 ------------- ------------- Balance carried forward 1,414,350 1,414,350 ======= ======= Revaluation reserve 2008 2007 £ £ Balance brought forward 21,659,521 31,027,674 Revaluation of investments in the year (9,296,711) (8.538,887) Transfer to profit and loss account on - (829,266) disposal of properties --------------- --------------- Balance carried forward 12,362,810 21,629,521 =============== =============== Profit and loss account 2008 2007 £ £ Balance brought forward 8,476,613 9,734,225 (Loss) / profit for the year (3,513,103) (1,547,831) Transfer from revaluation reserve on disposal of - 829,266 properties Equity dividends paid (523,415) (539,047) -------------- -------------- 4,440,095 8,476,613 ======== ======== 5. ANNUAL GENERAL MEETING The Annual General Meeting of the Company will be held on 30 June 2009 at Courtway House, 129 Hamlet Court Road, Westcliff on Sea, Essex at 2pm.

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