3rd Quarter Results - Part 2

RNS Number : 8565G

British Land Co PLC

09 February 2010

 



Consolidated Income Statement for the nine month period ended 31 December 2009
Year ended 31 March 2009					Nine months ended 31 December 2009			Nine months ended 31 December 2008
Audited					Unaudited			Unaudited
Underlying	Capital				Underlying	Capital		Underlying	Capital
pre tax*	and other	Total			pre tax*	and other	Total	pre tax*	and other	Total
£m	£m	£m		Note	£m	£m	£m	£m	£m	£m
554		554	Gross rental and related income	2	327		327	420		420
453		453	Net rental and related income	2	279		279	366		366
18		18	Fees and other income	2	7		7	13		13
	(14)	(14)	Amortisation of intangible assets			(11)	(11)		(11)	(11)
55	(822)	(767)	Funds and joint ventures (see also below)		52	189	241	38	(605)	(567)
(51)		(51)	Administrative expenses		(41)		(41)	(45)		(45)
	(3,241)	(3,241)	Net valuation movement (includes profits & losses on disposals)	2		133	133		(2,491)	(2,491)
			Net financing costs
52		52	- financing income		20		20	19		19
(259)	(119)	(378)	- financing charges		(130)		(130)	(184)	(41)	(225)
(207)	(119)	(326)			(110)		(110)	(165)	(41)	(206)
268	(4,196)	(3,928)	Profit (loss) on ordinary activities before taxation		187	311	498	207	(3,148)	(2,941)
			Taxation
	(2)	(2)	- current tax income (expense)	2		22	22		(1)	(1)
	49	49	- deferred tax (expense) income	2		(9)	(9)		43	43
	47	47		2		13	13		42	42
		(3,881)	Profit (loss) for the period after taxation attributable to shareholders of the Company				511			(2,899)
		(616)p	Earnings (loss) per share:                                                                                         basic	1			60p			(472)p**
		(614)p	diluted	1			60p			(470)p**
			Share of results of funds and joint ventures
55		55	Underlying profit before taxation		52		52	38		38
	(833)	(833)	Net valuation movement (includes profits & losses on disposals)			202	202		(616)	(616)
			Non-recurring items			(9)	(9)
	2	2	Current tax (expense) income			(4)	(4)		4	4
	9	9	Deferred tax income						7	7
55	(822)	(767)		4	52	189	241	38	(605)	(567)
*	As defined in note 1
**	As restated for the Rights Issue

Consolidated Income Statement for the three month period ended 31 December 2009
Year ended 31 March 2009					Three months ended 31 December 2009			Three months ended 31 December 2008
Audited					Unaudited			Unaudited
Underlying	Capital				Underlying	Capital		Underlying		Capital
pre tax*	and other	Total			pre tax*	and other	Total	pre tax*		and other	Total
£m	£m	£m		Note	£m	£m	£m	£m		£m	£m
554		554	Gross rental and related income	2	87		87	137			137
453		453	Net rental and related income	2	71		71	118			118
18		18	Fees and other income	2	1		1	4			4
	(14)	(14)	Amortisation of intangible assets			(4)	(4)			(4)	(4)
55	(822)	(767)	Funds and joint ventures (see also below)		20	236	256	11		(348)	(337)
(51)		(51)	Administrative expenses		(12)		(12)	(15)			(15)
	(3,241)	(3,241)	Net valuation movement (includes profits & losses on disposals)	2		321	321			(1,284)	(1,284)
			Net financing costs
52		52	- financing income		2		2	9			9
(259)	(119)	(378)	- financing charges		(24)		(24)	(64)		(41)	(105)
(207)	(119)	(326)			(22)		(22)	(55)		(41)	(96)
268	(4,196)	(3,928)	Profit (loss) on ordinary activities before taxation		58	553	611	63		(1,677)	(1,614)
			Taxation
	(2)	(2)	- current tax income (expense)	2		19	19			3	3
	49	49	- deferred tax (expense) income	2		(7)	(7)			24	24
	47	47		2		12	12			27	27
		(3,881)	Profit (loss) for the period after taxation attributable to shareholders of the Company				623				(1,587)
		(616)p	Earnings (loss) per share:         basic	1			72p				(258)p**
		(614)p	diluted	1			72p				(257)p**
			Share of results of funds and joint ventures
55		55	Underlying profit before taxation		20		20	11			11
	(833)	(833)	Net valuation movement (includes profits & losses on disposals)			246	246			(351)	(351)
			Non-recurring items			(9)	(9)
	2	2	Current tax income
	9	9	Deferred tax (expense) income			(1)	(1)			3	3
55	(822)	(767)		4	20	236	256	11		(348)	(337)
*	As defined in note 1
**	As restated for the Rights Issue

Consolidated Statement of Comprehensive Income
for the period ended 31 December 2009
	Year ended			Three months ended		Nine months ended
	31 March			31 December		31 December
	2009			2009	2008	2009	2008
	Audited			Unaudited	Unaudited	Unaudited	Unaudited
	£m		Note	£m	£m	£m	£m
	(3,881)	Profit (loss) for the period after taxation		623	(1,587)	511	(2,899)
		Other comprehensive income:
		Valuation movements
	(44)	- on development properties	2				(44)
	(3)	- on owner-occupied property	2				(3)
	(88)	- on other investments	2		(15)		(88)
	(135)				(15)		(135)
		Gains (losses) on cash flow hedges
	(182)	- Group		2	(226)	(3)	(210)
	(46)	- Funds and joint ventures		7	(51)	10	(50)
		Transferred to the income statement
		(cash flow hedges)
	(30)	- foreign currency derivatives			(19)	12	(28)
	109	- interest rate derivatives		7	38	21	27
	79			7	19	33	(1)
	5	Exchange differences on translation of foreign operations		1	8		8
	(2)	Actuarial loss on pension scheme			(1)		(2)
	24	Tax on items taken directly to equity			6		24
	(257)	Other comprehensive income for the period		17	(260)	40	(366)
	(4,138)	Total comprehensive income for the period		640	(1,847)	551	(3,265)

Consolidated Statement of Changes in Equity
for the period ended 31 December 2009
	Share		Share	Other	Retained
	capital	*	premium	reserves	earnings	Total
	£m		£m	£m	£m	£m
Nine month movements in Equity
Balance at 1 April 2009	217		1,244	(139)	1,887	3,209
Total comprehensive income for the period				75	476	551
Dividends payable in the nine month period					(159)	(159)
Adjustment for scrip dividend element	2		(2)		44	44
Balance at 31 December 2009	219		1,242	(64)	2,248	3,645
Balance at 1 April 2008	131		1,269	335	5,055	6,790
Total comprehensive income for the period				(583)	(2,682)	(3,265)
Share issues			2			2
Adjustment for share and share option awards					3	3
Dividends payable in the nine month period					(138)	(138)
Balance at 31 December 2008	131		1,271	(248)	2,238	3,392
Three month movements in Equity
Balance at 1 October 2009	218		1,243	(116)	1,696	3,041
Total comprehensive income for the period				52	588	640
Adjustment for share and share option awards					(1)	(1)
Dividends payable in the three month period					(56)	(56)
Adjustment for scrip dividend element	1		(1)		21	21
Balance at 31 December 2009	219		1,242	(64)	2,248	3,645
Balance at 1 October 2008	131		1,271	11	3,876	5,289
Total comprehensive income for the period				(259)	(1,588)	(1,847)
Adjustment for share and share option awards					(1)	(1)
Dividends payable in the three month period					(49)	(49)
Balance at 31 December 2008	131		1,271	(248)	2,238	3,392
Prior year movements in Equity
Balance at 1 April 2008	131		1,269	335	5,055	6,790
Total comprehensive income for the period				(474)	(3,664)	(4,138)
Share issues	86		(25)	682		743
Transfer				(682)	682
Adjustment for share and share option awards					(1)	(1)
Dividends payable in the year					(185)	(185)
Balance at 31 March 2009	217		1,244	(139)	1,887	3,209
* See note 11 for a summary of the number of shares in issue

Consolidated Balance Sheet as at 31 December 2009
31 March				31 December		31 December		30 September
2009				2009		2008		2009
Audited				Unaudited		Unaudited		Unaudited
£m			Note	£m		£m		£m
		Assets
		Non-current assets
5,436		Investment properties	3	3,703		7,258		5,313
358		Development properties	3			374		202
30		Owner-occupied property	3	30		39		25
5,824				3,733		7,671		5,540
		Other non-current assets
952		Investments in funds and joint ventures	4	1,391		973		973
38		Other investments	5	302		51		65
25		Intangible assets		13		29		17
6,839				5,439		8,724		6,595
		Current assets
123		Debtors		103		98		72
616		Cash and short-term deposits	6	342		475		638
739				445		573		710
7,578		Total assets		5,884		9,297		7,305
		Liabilities
		Current liabilities
(49)		Short-term borrowings and overdrafts	6	(38)		(123)		(51)
(524)		Creditors		(357)		(665)		(467)
(573)				(395)		(788)		(518)
		Non-current liabilities
(3,716)		Debentures and loans	6	(1,769)		(5,021)		(3,673)
(45)		Other non-current liabilities		(31)		(55)		(34)
(35)		Deferred tax liabilities		(44)		(41)		(39)
(3,796)				(1,844)		(5,117)		(3,746)
(4,369)		Total liabilities		(2,239)		(5,905)		(4,264)
3,209		Net assets		3,645		3,392		3,041
		Equity
217		Share capital		219		131		218
1,244		Share premium		1,242		1,271		1,243
(139)		Other reserves		(64)		(248)		(116)
1,887		Retained earnings		2,248		2,238		1,696
		Total equity attributable to shareholders
3,209		of the Company		3,645		3,392		3,041
398	p	EPRA NAV per share*	1	438	p	595	p**	372	p
* As defined in note 1
** As restated for the Rights Issue

Consolidated Statement of Cash Flows
for the period ended 31 December 2009
Year		Three months		Nine months
ended		ended		ended
31 March		31 December		31 December
2009		2009	2008	2009	2008
Audited		Unaudited		Unaudited
£m		£m	£m	£m	£m
455	Rental income received from tenants	48	120	248	355
30	Fees and other income received	2	4	13	26
(79)	Operating expenses paid to suppliers and employees	(18)	(21)	(66)	(62)
406	Cash generated from operations	32	103	195	319
(270)	Interest paid	(36)	(51)	(138)	(185)
20	Interest received	2	11	7	18
16	UK corporation tax received (paid)	1	19	(1)	17
33	Distributions received from funds and joint ventures	18	6	34	17
205	Net cash inflow from operating activities	17	88	97	186
	Cash flows from investing activities
(107)	Purchase of investment properties	(42)	(107)	(42)	(107)
(436)	Development and other capital expenditure	(39)	(99)	(128)	(358)
904	Sale of investment properties	43	87	241	864
(6)	REIT conversion charge paid				(6)
	Purchase of investments	(43)		(43)
	Sale of investments	13		13
3	Indirect taxes in respect of investing activities	1	(6)	(4)	(4)
115	Establishment of Meadowhall Joint Venture
	Establishment of Broadgate Joint Venture	31		31
	Investment in Shopping Centres Joint Venture with Tesco	(26)		(26)
(57)	Investment in and loans to funds and joint ventures	(3)	(15)	(55)	(42)
2	Capital distributions received from funds and joint ventures	7		7	2
418	Net cash (outflow) inflow from investing activities	(58)	(140)	(6)	349
	Cash flows from financing activities
743	Issue of ordinary shares				2
(188)	Dividends paid	(39)	(50)	(116)	(136)
(11)	Repayment of debt acquired with subsidiary undertaking
(76)	Movement in other financial liabilities	(6)	(45)	(16)	5
	Establishment of Broadgate Joint Venture - cash collateral	(266)		(266)
(714)	Increase (decrease) in bank and other borrowings	56	242	33	(173)
(246)	Net cash (outflow) inflow from financing activities	(255)	147	(365)	(302)
377	Net (decrease) increase in cash and cash equivalents	(296)	95	(274)	233
239	Opening cash and cash equivalents	638	377	616	239
616	Closing cash and cash equivalents	342	472	342	472
	Cash and cash equivalents consists of:
616	Cash and short-term deposits	342	475	342	475
	Overdrafts		(3)		(3)
616		342	472	342	472

Notes to the accounts (unaudited)
1.     Performance measures
Year ended				Nine months ended			Nine months ended
31 March 2009				31 December 2009			31 December 2008
Earnings	Pence per share	Earnings (loss) per share (diluted)		Earnings	Pence per share		Earnings		Pence per share
£m				£m			£m
268		Underlying pre tax profit - income statement		187			207
(9)		Tax charge relating to underlying profit		(4)			(6)
259	41p	Underlying earnings per share		183	21	p	201		32	p*
(119)		Realisation of cash flow hedges/ non-recurring items		(9)			(41)
140	22p	EPRA earnings per share		174	20	p	160		26	p*
(3,881)	(614)p	Profit (loss) for the period after taxation		511	60	p	(2,899)		(470)	p*
Year ended				Three months ended			Three months ended
31 March 2009				31 December 2009			31 December 2008
Earnings	Pence per share	Earnings (loss) per share (diluted)		Earnings	Pence per share		Earnings		Pence per share
£m				£m			£m
268		Underlying pre tax profit - income statement		58			63
(9)		Tax charge relating to underlying profit		(1)			(2)
259	41p	Underlying earnings per share		57	7	p	61		10	p*
(119)		Realisation of cash flow hedges/ non-recurring items		(9)			(41)
140	22p	EPRA earnings per share		48	6	p	20		3	p*
(3,881)	(614)p	Profit (loss) for the period after taxation		623	72	p	(1,587)		(257)	p*
* As restated for the Rights Issue
The European Public Real Estate Association (EPRA) issued Best Practices Recommendations in July 2009, which gives guidelines for performance measures.  The EPRA earnings measure excludes investment property revaluations and gains or losses on disposals, intangible asset movements and their related taxation.
Underlying earnings consists of the EPRA earnings measure, with additional company adjustments.  Adjustments include realisation of cash flow hedges.
The weighted average number of shares in issue for the three month period was: basic: 860m (nine months ended 31 December 2009: 855m; year ended 31 March 2009: 630m; three months ended 31 December 2008 restated: 614m; nine months ended 31 December 2008 restated: 614m); diluted for the effect of share options: 863m (nine months ended 31 December 2009: 858m; year ended 31 March 2009: 632m; three months ended 31 December 2008 restated: 617m; nine months ended 31 December 2008 restated: 617m).  Basic undiluted earnings per share for the three month period was 72p (nine months ended 31 December 2009: 60p; year ended 31 March 2009: 616p loss; three months ended 31 December 2008 restated: 258p loss; nine months ended 31 December 2008 restated: 472p loss). Earnings per share shown in the table above are diluted.
31 March					31 December		31 December		30 September
2009		Net asset value (NAV)			2009		2008		2009
£m					£m		£m		£m
3,209		Balance sheet net assets			3,645		3,392		3,041
25		Deferred tax arising on revaluation movements			39		33		30
153		Mark to market on effective cash flow hedges and related debt adjustments			100		257		128
		Dilution effect of share options			29		10		1
3,387		EPRA NAV			3,813		3,692		3,200
398p		EPRA NAV per share			438	p	595	p*	372	p
* As restated for the Rights Issue
The EPRA NAV per share excludes the mark to market on effective cash flow hedges and related debt adjustments, deferred taxation on revaluations and is calculated on a fully diluted basis.
At 31 December 2009, the number of shares in issue was: basic: 862m (31 March 2009: 850m; 30 September 2009: 857m; 31 December 2008 restated: 616m); diluted for the effect of share options: 871m (31 March 2009: 851m; 30 September 2009: 860m; 31 December 2008 restated: 620m).
Total return per share for the three months ended 31 December 2009 of 19.5% includes dividends paid of 6.5p (see note 7) in addition to the increase in EPRA NAV of 66p. Total return per share for the nine months ended 31 December 2009 of 15.3% includes dividends paid of 20.77p (see note 7) in addition to the increase in EPRA NAV of 40p. Total return per share for the year ended 31 March 2009 was minus 61.6%.

2.     Income statement notes
Year ended			Three months ended		Nine months ended
31 March			31 December		31 December
2009			2009	2008	2009	2008
£m			£m	£m	£m	£m
	Gross and net rental income
462	Rent receivable		69	117	262	357
34	Spreading of tenant incentives and guaranteed rent increases		5	8	19	26
1	Surrender premiums
497	Gross rental income		74	125	281	383
57	Service charge income		13	12	46	37
554	Gross rental and related income		87	137	327	420
(57)	Service charge expenses		(13)	(12)	(46)	(37)
(44)	Property operating expenses		(3)	(7)	(2)	(17)
453	Net rental and related income		71	118	279	366
	Fees and other income
14	Performance & management fees (from funds and joint ventures)		1	3	5	10
4	Other fees and commission			1	2	3
18			1	4	7	13
	Net revaluation movements on property and investments
	Income statement
(2,994)	Revaluation of properties		333	(1,197)	159	(2,356)
(177)	Result on property disposals		(12)	(30)	(14)	(78)
(69)	Revaluation of investments			(57)	(12)	(57)
(1)	Other revaluations and losses
(3,241)			321	(1,284)	133	(2,491)
(833)	Share of profits (losses) of funds and joint ventures (note 4)		246	(351)	202	(616)
(4,074)			567	(1,635)	335	(3,107)
	Consolidated statement of comprehensive income
(44)	Revaluation of development properties					(44)
(3)	Revaluation of owner-occupied property					(3)
(88)	Revaluation of investments			(15)		(88)
(4,209)			567	(1,650)	335	(3,242)
	Tax income (expense)
(6)	Current tax:	UK corporation tax (28%)	(1)	3	(2)	(1)
(1)		Foreign tax
(7)			(1)	3	(2)	(1)
5	Adjustments in respect of prior periods		20		24
(2)	Total current tax income (expense)		19	3	22	(1)
49	Deferred tax on revaluations		(7)	24	(9)	43
47	Group total taxation (net)		12	27	13	42
11	Attributable to funds and joint ventures		(1)	3	(4)	11
58	Total taxation		11	30	9	53
Tax expense attributable to underlying profits for the three months ended 31 December 2009 was £1m (nine months ended 31 December 2009: £4m; year ended 31 March 2009: £9m; three months ended 31 December 2008: £2m; nine months ended 31 December 2008: £6m).

3.     Property
Total property interests are £7,899m at 31 December 2009 comprising properties held by the Group of £3,726m, share of properties held by funds of £820m and share of properties held by joint ventures of £3,353m. Properties were valued on the basis of market value, supported by market evidence, in accordance with the Appraisal and Valuation Standards published by The Royal Institution of Chartered Surveyors.
31 March				31 December	31 December	30 September
2009				2009	2008	2009
£m				£m	£m	£m
5,436	Investment properties			3,703	7,258	5,313
358	Development properties				374	202
30	Owner-occupied property			30	39	25
5,824	Carrying value of properties on balance sheet			3,733	7,671	5,540
(14)	Head lease liabilities			(7)	(20)	(8)
5,810	Total British Land Group property portfolio valuation			3,726	7,651	5,532
At 31 December 2009 Group properties valued at £2,128m were subject to a security interest (31 March 2009: £3,665m; 30 September 2009: £3,667m; 31 December 2008: £5,286m) and other properties of non-recourse companies amounted to £nil (31 March 2009: £1m; 30 September 2009: £nil; 31 December 2008: £2m).
4.     Funds and joint ventures
Summary of British Land's share of investments in funds and joint ventures at 31 December 2009
	Underlying		Underlying
	profit		profit
	(nine		(three	Net	Gross	Gross
	months)		months)	Investment	assets	liabilities
	£m		£m	£m	£m	£m
Share of funds	11		3	405	994	(589)
Share of joint ventures	41		17	986	3,575	(2,589)
Total	52		20	1,391	4,569	(3,178)
At 31 December 2009 the investment in Joint Ventures included within the total net investment in Funds and Joint Ventures was £988m (31 March 2009: £585m; 30 September 2009: £600m; 31 December 2008: £500m).
Amounts owed to joint ventures at 31 December 2009 were £39m (31 March 2009: £33m; 30 September 2009: £39m; 31 December 2008: £31m).
British Land's share of the results of funds and joint ventures
Year ended			Three months ended		Nine months ended
31 March			31 December		31 December
2009			2009	2008	2009	2008
£m			£m	£m	£m	£m
153	Gross rental income		60	34	148	107
145	Net rental and related income		57	33	140	102
(5)	Other income and expenditure		(5)	(1)	(8)	(3)
(85)	Net financing costs		(32)	(21)	(80)	(61)
55	Underlying profit before taxation		20	11	52	38
(833)	Net valuation and disposal movements		246	(351)	202	(616)
	Non-recurring items - debt break costs		(9)		(9)
(778)	Profit (loss) on ordinary activities before taxation		257	(340)	245	(578)
2	Current tax				(4)	4
9	Deferred tax		(1)	3		7
(767)	Profit (loss) on ordinary activities after taxation		256	(337)	241	(567)
All joint ventures are non-recourse to the Group. Where a joint venture has net liabilities, as required under IFRS, the Group does not account for its share of the deficit in its total share of joint venture results.
5.     Other investments
The increase in other investments in the quarter to December 2009 is substantially due to the commercial loan to the Broadgate Joint Venture of £209m and the investment in the HUT convertible bond of £43m.

6.     Net Debt
31 March		31 December		31 December		30 September
2009		2009		2008		2009
£m		£m		£m		£m
1,991	Securitisations			2,834		1,968
1,168	Debentures	1,166		1,169		1,167
139	Bank loans and overdrafts	188		677		134
467	Other bonds and loan notes	453		464		455
3,765	Gross debt	1,807		5,144		3,724
109	Interest rate and currency derivative liabilities	36		214		86
(16)	Interest rate and currency derivative assets	(1)		(16)		(1)
3,858		1,842		5,342		3,809
(616)	Cash and short-term deposits	(342)		(475)		(638)
3,242	Net debt	1,500		4,867		3,171
Gross debt includes £38m due within one year at 31 December 2009 (31 March 2009: £49m; 30 September 2009: £51m; 31 December 2008: £123m).
Undrawn committed bank facilities at 31 December 2009 amounted to £2,830m.
The financial covenants applicable to the Group unsecured debt are:
a.  Net Borrowings not to exceed 175% of Adjusted Capital and Reserves.  At 31 December 2009 the ratio is 37%:
i. Net Borrowings are £1,519m, being the principal amount of gross debt of £1,799m plus amounts owed to joint ventures of £39m (see note 4) and TPP Investments Ltd of £23m (see note 9), less the cash and short-term deposits of £342m; and
ii. Adjusted Capital and Reserves are £4,151m, being share capital and reserves of £3,645m (balance sheet), adjusted for £39m of deferred tax (see note 1), £100m mark to market on interest rate swaps (see note 1) and £367m exceptional refinancing charges (being the cumulative net amortised exceptional items relating to the refinancings in the years ended 31 March 2005, 2006 and 2007); and
b.   Net Unsecured Borrowings not to exceed 70% of Unencumbered Assets. At 31 December 2009 the ratio is 13%:
i. Net Unsecured Borrowings are £300m, being the principal amount of gross debt of £1,799m plus amounts owed to joint ventures of £39m (see note 4) less cash and deposits not subject to a security interest of £123m less the principal amount of secured and non-recourse borrowings of £1,415m; and
ii. Unencumbered Assets are £2,303m being properties of £3,726m (see note 3) plus investments in funds and joint ventures of £1,391m (balance sheet) and other investments of £302m (balance sheet) less investments in joint ventures of £988m (see note 4) and encumbered assets of £2,128m (see note 3).
The Group Loan to Value ratio at 31 December 2009 is 27%, being gross debt of £1,807m less cash and short-term deposits of £342m, divided by total Group property of £3,726m (see note 3) plus investments in Funds and Joint Ventures of £1,391m (balance sheet) and other investments of £302m (balance sheet).
7.     Dividends
The third quarter dividend of 6.5 pence per share, totalling £56 million, is payable on 14 May 2010 to shareholders on the register at close of business on 9 April 2010. This dividend will be entirely a 'normal' dividend i.e. not a PID (Property Income Distribution).
The 2010 second quarter dividend of 6.5 pence per share, totalling £56m, is payable on 12 February 2010.
In respect of the 2010 first quarter dividend of 6.5 pence per share, totalling £56m, 39% of shareholders opted for the enhanced scrip alternative in lieu of £22m in cash dividends. The remaining cash element of £34m was paid on 13 November 2009.
The Consolidated Statement of Changes in Equity shows total dividends in the nine months to 31 December 2009 of £159m, £48m being the third 2009 interim dividend of 7.77 pence per share (restated for Rights Issue) paid on 15 May 2009, £55m being the fourth 2009 interim dividend of 6.5 pence per share and £56m being the first 2010 interim dividend disclosed above.
An enhanced scrip alternative with a 5% bonus (above the equivalent cash value) is being offered to shareholders with the third quarter dividend. Shareholders will be able to choose between cash or shares.  If a scrip dividend mandate form has already been completed, and not withdrawn, no action needs to be taken to receive this dividend payment as shares.
If required, scrip dividend scheme mandate forms are available from our registrars, Equiniti, whose helpline is 0871 384 2268 and the form must be returned to the Registrars no later than 5.00pm on 22 April 2010.
The scrip dividend booklet provides further details of the scheme and is available on our website - http://www.britishland.com/investors/dividends/scrip.

8.     Segment information
The Group allocates resources to investment and asset management according to the sectors it expects to perform over the medium term. Its two principal sectors are currently offices and retail.
	Offices		Retail		Other		Total
	2009	2008	2009	2008	2009	2008	2009	2008
	£m	£m	£m	£m	£m	£m	£m	£m
Nine months ended 31 December
Revenue	177	201	140	215	17	17	334	433
Net rental income	134	175	135	176	10	15	279	366
Segment assets	1,520	3,926	3,415	4,510	949	861	5,884	9,297
Capital expenditure	197	312	24	148	12		233	460
Three months ended 31 December
Revenue	40	65	43	71	5	5	88	141
Net rental income	27	58	41	55	3	5	71	118
Capital expenditure	109	74	14	116	10		133	190
Revenue is derived from the rental of buildings, fund management and performance fees and investments. Corporate costs, including administrative and interest expenses, are not allocated to the segments shown, therefore a sectoral profit or loss is not disclosed. Segment assets include the Group's investment in funds and joint ventures. No customer exceeds 10% of the Group's revenues.
9.     Contingent liabilities
TPP Investments Limited, a wholly owned ring-fenced special purpose subsidiary, is a partner in The Tesco British Land Property Partnership and, in that capacity, has entered into a secured bank loan under which its liability is limited to £23m (31 March 2009: £23m, 30 September 2009: £23m,  31 December 2008: £23m) and recourse is only to the partnership assets.
10.     Related party transactions
Details of transactions with funds and joint ventures including debt guarantees by the Company are given in notes 2 and 9. Amounts owed to joint ventures are detailed in note 4.
There have been no material changes in the related party transactions described in the last annual report.
11.     Note to the Consolidated Statement of Changes in Equity
At 31 December 2009, of the issued 25p ordinary shares, 2m were held in the ESOP Trust (31 March 2009: 2m; 30 September 2009: 2m; 31 December 2008: 2m), 11m were held as Treasury shares (31 March 2009: 11m; 30 September 2009: 11m; 31 December 2008: 11m) and 862m shares were in free issue (31 March 2009: 850m; 30 September 2009: 857m; 31 December 2008: 510m). All shares are fully paid.
12.     Basis of preparation
The financial information for the year ended 31 March 2009 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report, and did not contain statements under section 237(2) or (3) of the Companies Act 1985.
The financial information included in this announcement has been prepared on a going concern basis using accounting policies consistent with International Financial Reporting Standards (IFRS) and in accordance with IAS 34 'Interim Financial Reporting'. The same accounting policies, estimates, presentation and methods of computation are followed in the quarterly report as applied in the Group's latest annual audited financial statements, with the exception of the adoption of the amendments to IAS 1 (Revised) Presentation of Financial Statements, IAS 40 Investment Property and IAS 16 Property, Plant and Equipment. The current period financial information presented in this document is unaudited.
The Group's business activities, financial position, cash flows, liquidity position and financing structure are discussed on pages 3 to 13. The Directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.
The interim financial information was approved by the Board on 8 February 2010.

Table A
Summary income statement based on proportional consolidation for the period ended 31 December 2009
The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto.  It presents the results of the Group, with its share of the results of funds and joint ventures included on a line by line, i.e. proportional basis.  The underlying profit before taxation and total profit after taxation are the same as presented in the consolidated income statement.
Year
ended		Three months ended				Nine months ended
31 March		31 December		31 December		31 December		31 December
2009		2009		2008		2009		2008
£m		£m		£m		£m		£m
650	Gross rental income	134		159		429		490
598	Net rental income	128		151		419		468
20	Fees and other income	1		4		7		14
(58)	Administrative expenses	(17)		(16)		(49)		(49)
(292)	Net interest costs	(54)		(76)		(190)		(226)
268	Underlying profit before taxation	58		63		187		207
(4,074)	Net valuation movement (includes profits and losses on disposal)	567		(1,635)		335		(3,107)
(119)	Realisation of cash flow hedges/non-recurring items	(9)		(41)		(9)		(41)
(14)	Amortisation of intangible assets	(4)		(4)		(11)		(11)
(3,939)	Profit (loss) on ordinary activities before taxation	612		(1,617)		502		(2,952)
(9)	Tax charge relating to underlying profit	(1)		(2)		(4)		(6)
58	Deferred tax	(8)		27		(9)		50
9	Other taxation	20		5		22		9
(3,881)	Profit (loss) for the period after taxation	623		(1,587)		511		(2,899)
41p	Underlying earnings per share - diluted basis	7	p	10	p*	21	p	32	p*
* As restated for the Rights Issue
The underlying earnings per share is calculated on underlying profit before taxation of £187m, tax attributable to underlying profits of £4m and 858m shares on a diluted basis, for the nine months ended 31 December 2009 and underlying profit before taxation of £58m, tax attributable to underlying profits of £1m and 863m shares on a diluted basis, for the three months ended 31 December 2009.

Summary balance sheet based on proportional consolidation as at 31 December 2009
The following pro forma information is unaudited and does not form part of the consolidated primary statements or the notes thereto.  It presents the composition of the EPRA net assets of the Group, with its share of the net assets of funds and joint ventures included on a line by line, i.e. proportional basis and assuming full dilution.
31 March			31 December		31 December		30 September
2009			2009		2008		2009
£m			£m		£m		£m
4,867		Retail properties	5,254		6,018		4,760
3,570		Office properties	2,458		3,925		3,350
188		Other properties	187		228		183
8,625		Total properties	7,899		10,171		8,293
38		Other investments	197		51		65
25		Intangible assets	13		29		17
(360)		Other net liabilities	(239)		(455)		(351)
(4,941)		Net debt	(4,057)		(6,104)		(4,824)
3,387		EPRA NAV (note 1)	3,813		3,692		3,200
398	p	EPRA NAV per share (note 1)	438	p	595	p*	372	p
		Total property valuations including share of funds and joint ventures
5,810		British Land Group	3,726		7,651		5,532
		Share of funds and joint ventures
2,775		Investment properties	4,181		2,526		2,735
49		Development properties					35
(9)		Head lease liabilities	(8)		(6)		(9)
2,815			4,173		2,520		2,761
8,625		Total property portfolio valuation	7,899		10,171		8,293
		Calculation of EPRA NNNAV per share
3,387		EPRA NAV	3,813		3,692		3,200
(25)		Deferred tax arising on revaluation movements	(39)		(33)		(30)
(153)		Mark to market on effective cash flow hedges and related debt adjustments	(100)		(257)		(128)
1,116		Mark to market on debt	387		1,022		725
4,325		EPRA NNNAV	4,061		4,424		3,767
508	p	EPRA NNNAV per share	466	p	861	p*	438	p
*As restated for the Rights issue
EPRA NNNAV is the EPRA NAV adjusted to reflect the fair value of the debt and derivatives and to include the deferred taxation on revaluations.

INDEPENDENT REVIEW REPORT TO THE BRITISH LAND COMPANY PLC
We have been engaged by the company to review the condensed set of financial statements in the quarterly financial report for the nine months ended 31 December 2009 which comprises the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet, the Consolidated Statement of Cash flows and the related notes 1 to 12. We have read the other information contained in the quarterly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board.  Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The quarterly financial report is the responsibility of, and has been approved by, the directors.  The directors are responsible for preparing the quarterly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
As disclosed in note 12, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union.  The condensed set of financial statements included in this quarterly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the quarterly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the quarterly financial report for the nine months ended 31 December 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
Deloitte LLP
Chartered Accountants and Statutory Auditors
London, United Kingdom
8 February 2010

 

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