Half Yearly Report

RNS Number : 0666Y

Boot(Henry) PLC

27 August 2009

 



HENRY BOOT PLC

HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2009

Henry Boot PLC, the land promotion, property development and investment, construction and plant hire business, today announces its Half-yearly Results for the six months ended 30 June 2009.

HIGHLIGHTS

Trading profits of £3.7m (2008: £30.2m)

Revaluation deficit on investment properties of £23.6m (2008: £8.2m)

Loss before tax of £20.3m (2008: profit £20.4m)

Basic loss per share of 11.8p (2008: earnings 10.5p)

Maintained interim dividend of 1.25p (2008: 1.25p)

Net asset value per share of 129p (31 December 2008: 146p)

Net debt of £53.3m (31 December 2008: £49.3m); reduction in net debt of around £20m post period end

Commenting on the results, John Reis, Chairman, Henry Boot PLC said:

'In what is acknowledged as the most difficult market the property industry has faced for many years, I am pleased to report on a satisfactory set of results for the half year to 30 June 2009.' 

'Looking ahead, our banking facilities have been put onto a three-year term and asset sales achieved after the period end have reduced net debt by some £20m. There are now indications that we are reaching the bottom of the recessionary cycle but we believe that the recovery will be rather slow. In the short-term, we will maximise returns in this difficult market whilst carefully managing debt levels, cash flow and our net asset position. In the longer term, as economic recovery takes hold, Henry Boot has a good mix of property-related businesses, which are well funded and possess opportunities that are capable of generating excellent profits as conditions in our markets improve.'

For further information, please contact:

Henry Boot PLC

Jamie Boot, Group Managing Director

John Sutcliffe, Group Finance Director

Tel: [phone]

www.henryboot.co.uk

Evolution Securities Limited

Joanne Lake

Tel: [phone]

Citigate Dewe Rogerson

Fiona Tooley

Mobile: [phone]

Tel: [phone]

CHAIRMAN'S HALF-YEARLY REVIEW

RESULTS

In what is acknowledged as the most difficult market the property industry has faced for many years, I am pleased to report on a satisfactory set of results for the half year to 30 June 2009.

Income Statement

As expected, our trading profits were significantly reduced at £3.7m (2008: £30.2m) on turnover of £67.0m (2008: £119.3m). The key change compared with last year's results was substantially reduced land sales offset by higher property division trading income and a good contribution from the construction division. Administrative costs, including pensions, fell to £7.5m (2008: £7.7m) after reduced expenses, particularly payroll, were partially offset by higher defined benefit pension charges. The disposal of a Group occupied property for £1.8m created a profit of £0.7m in the period. Net interest costs at £0.5m (2008: £2.0m) were helped by lower rates on reduced average debt levels compared with last year. Renegotiation of our banking facilities earlier this year to three-year revolving terms will result in interest costs rising in the second half of the current financial year, though we expect full year costs to be around half the prior year's level. The revaluation of investment properties resulted in a deficit of £23.6m (2008: £8.2m) as, in common with many other property investment companies, values have continued to decline in the first half of the year. The loss before tax was £20.3m (2008: profit £20.4m), with a loss attributable to equity shareholders of £15.2m (2008: profit £13.6m) and a basic loss per share of 11.8p (2008: earnings 10.5p).

Balance Sheet

We continue to invest in the development portfolio to complete those developments in progress and anticipate that this investment will be completed by the end of the second half. Despite incurring a £23.6m revaluation deficit, the value of property, plant and equipment and investment property is £208.4m (31 December 2008: £227.0m) after further expenditure on schemes in Rotherham, Stoke-on-Trent and Mansfield. Land and development inventories remained very similar to the year end at £59.4m (31 December 2008: £59.0m). Net borrowings were slightly higher than those at the year end at £53.3m (31 December 2008: £49.3m) with gearing at 32% (31 December 2008: 26%). At 30 June 2009, the Group had total committed facilities available of £101m. Of this amount, cash facilities were £86m, with £33m undrawn at that date.

Defined benefit pension liabilities under IAS 19 increased to £25.9m (31 December 2008: £22.6m). The benefit on the scheme liabilities resulting from lower long-term inflation estimates was offset by lower long-term interest rates and negative investment returns from the pension scheme's equity and bond assets. The calculation of liabilities also reflects the more aggressive mortality assumptions applied in the last triennial valuation that took place in 2007.

Net assets now stand at £168.3m (31 December 2008: £190.1m) and net asset value per share decreased to 129p (31 December 2008: 146p).

Cash Flows

Operating cash inflows before movements in working capital were £5.7m (2008: £32.7m), with the comparative including the high level of land sales achieved in that period. There was a slight increase in the value of land inventories and net payables, offset by a reduction in receivables. Net interest payments and tax were £2.6m and £7.3m lower respectively than the prior period, resulting in a net cash inflow from operating activities of £7.6m (2008: £61.8m). The net investment in property development and investment and plant and equipment, offset by disposal proceeds, equated to £6.1m (2008: £23.5m) as investment on developments in progress is now almost complete. After dividend payments of £5.6m (2008: £5.4m), total net cash outflows in the period were £4.1m compared with net inflows of £32.9m in the comparative period and £21.7m for the full year in 2008.

Dividend

The Directors have agreed to declare an unchanged interim dividend of 1.25p per share (2008: 1.25p), which will be paid on 22 October 2009 to shareholders on the register at the close of business on 2 October 2009. However, whilst the results achieved in the first half again show the resilience provided by the spread of different profit streams across the Group, the economic background continues to be difficult, particularly in terms of investment property values and the market for residential land. Whilst we believe that we are close to the bottom of the recessionary cycle, these difficult markets are likely to continue for some time. Against this backdrop it is unlikely that any recovery this year will be strong enough for the Directors to recommend a full year total dividend exceeding 2.5p (2008: 5.0p).

REVIEW OF ACTIVITIES

Land

Hallam Land, our land promotion business, continues to promote the extensive portfolio of opportunities available to it. At 30 June 2009 it held interests in 8,201 acres of land, up from 7,635 acres at 31 December 2008, with 1,666 acres owned, 4,458 acres optioned and 2,077 acres under agency agreements across more than 160 sites throughout the UK. The total inventory value of this land is £54.6m (31 December 2008: £53.9m). 

Whilst there is no doubt that the consented land market has become much more difficult than for many years, Hallam Land aims to add value over the long-term by securing the best land opportunities and promoting sites through the planning system to gain the most valuable consents possible. It is only at this point that sites are sold, with this process taking up to 15 years. The opportunities we are promoting are all greenfield sites, with a bias towards the South of England, as we believe that this area will be the first to benefit when the recovery begins to take hold.  

During the period under review, we submitted a detailed planning application for 150 homes in St Albans and outline applications for 245 homes in Monmouth and 250 homes in Bolsover. In all cases there are affordable housing elements to these applications. As previously notified, our appeal against a planning refusal at Wragley Way, Derby, was rejected with the result that costs of £1.5m were written off in the period.

Though the major house builders have continued to highlight the relatively low level of house sales and land buying, the three sites we anticipated marketing this year are progressing well, at prices in line with current expectations, albeit these are below previous peak levels. The 100-home option site at Chudleigh, Devon, was sold in the period and the other two should complete in the second half.

We recognise that new house sales will only begin to improve once the credit squeeze eases, less expensive mortgages become available and the level of deposit required falls. There is some evidence that this is beginning to happen but any recovery is very patchy and primarily arising in the South. Mortgage availability and confidence regarding job security and prospects are key to that recovery gaining strength. Our experience of previous downturns is that in the initial phases of the recovery house builders focus on their best sites. In our view, these will be smaller developments of family homes in the most prosperous areas of each region and we believe that we have sites which fit these criteria. 

Developments and investments

After many years of increasing property values, the last two years have seen them decline rapidly. Indications suggest that property values have now fallen by some 50% from the peak. In common with many other property investment companies, we have continued to see the value of our investment property reduce in the first six months of the year. Lower valuations arose across the investment portfolio but vacant space at both Ayr and Bromley continued to impact on these two properties. In particular, the valuation at Ayr has declined by £8.0m since December 2008. Although there are some tentative indications that property investment yields are beginning to stabilise at current levels, rents are under pressure in many sectors and we believe that the market will remain difficult for some time.

During the period we completed the 186,000 sq ft industrial unit for the pharmaceutical division of the Co-operative Group Limited at Meir Park, Stoke-on-Trent and we accepted an offer of around £10m and completed the sale this August. Furthermore, we agreed sales of our retail developments at Bromborough, the Wirral, and Clifton Moor, York, which completed this July for total proceeds of £8.4m. We also completed the construction of a 51,000 sq ft terrace of eight industrial units at Waterloo Court, Markham Vale. These are now being marketed for either sale or lease; it is pleasing to report that we are experiencing acceptable levels of interest and have agreed terms on several units. We also completed the sale of an investment property in West London for £1.8m. 

We also constructed the first phase of our retail and industrial development in Rotherham which completed in July 2009 including 51,000 sq ft fully pre-let to B&Q and 10,000 sq ft of industrial space. Fully developed, this site can accommodate 100,000 sq ft of retail space and approximately 100,000 sq ft of industrial space. The remainder of the site is being marketed, although we will only develop out the remaining space once a pre-let is in place.

Planning consent has been granted at Westfield One, Cumbernauld, for 83,000 sq ft of light industrial/distribution units of between 10,000-28,000 sq ft, which have the potential to be sub-divided if required. Westfield is an established industrial area, which is very well placed to access Central Scotland's motorway networks. Once again development will only happen once a pre-let is in place. 

We continue to investigate investment and development opportunities throughout the UK, however, the prevailing level of investment yields continues to make it challenging for any new development scheme to meet our stringent investment criteria. We still believe that there will be opportunities to profit in future through selectively developing well-located sites with good pre-lets, but realistically yields will have to recover some way before this is possible in most cases.

Construction

Our construction division achieved another very solid result. Henry Boot Construction carried a strong order book into the year and has maintained this momentum through the first half. We continue to work with Councils in Sheffield, Doncaster and Rotherham on major Decent Homes schemes to improve their social housing stock, completing over 3,000 units in the last year. It is anticipated this work will continue through to 2011 and beyond in some cases. 

In addition, frameworks with the Prison Alliance and Rotherham, Lancashire and Cheshire Local Authorities are providing satisfactory workloads and further opportunities at present but this is not taken for granted as we approach the next General Election. Finally, we are still seeing opportunities within general contracting, though margins continue to be tight and levels of activity are lower than a year ago. 

Road Link A69 has continued to perform in-line with expectations and previous years. The slowing economy has marginally reduced the flow of commercial traffic but this has been offset by higher toll tariffs and efficient cost control. We remain confident that the Company's long-term maintenance programme will continue to prove cost- effective and aid profitability through the remaining years of the concession.

Banner Plant, our plant hire subsidiary, traded in-line with management expectations in the first half. We saw robust demand for accommodation, air compressors and access equipment, although general plant, especially that aimed at residential development and groundworks, has continued to be affected by the weak housing market. We have curtailed capital expenditure and reduced the size of the general plant register and this has generated strong cash flow from this business; we expect this process to continue throughout the second half of the year. 

OUTLOOK

Land 

It is very likely that the UK house building industry will complete fewer units this year than at any time in the last twenty years. However, commentators have recently indicated that prices are stabilising, there is very little stock in the system and that, selectively, residential developers are in the market for good quality, greenfield land. We believe that the initial phase of any recovery will focus on the highest quality, most attractive sites and this is exactly where Hallam Land's portfolio is focused. Indeed, we have agreed or are in discussion for sales on all the sites where we have achieved a planning consent. We have increased our land holdings in the period and are continuing to find good-quality, well-located, competitively-priced sites to replenish our land stocks for the future. With our existing sites we are working hard to secure as many planning consents as possible now in order to be in position to meet house builders' requirements when the market recovers.

Developments and investments

In our opinion the best relative and absolute property returns in the long-term will be achieved through judicious investment, development and retention of assets which have the best prospects for rental and capital growth and we have a number of such opportunities within our development portfolio. However, the outward yield movement has made some of these opportunities uneconomic at present and therefore we remain very cautious about development unless it is substantially pre-let and can offer an immediate return on the capital invested through disposal.

Construction

Current trading remains robust, underpinned by public sector spending on social housing, prisons and local authority frameworks. However, we have seen a slowdown in the general, private sector contracts, although we are securing a satisfactory level of work in this area. Our PFI project, Road Link A69, continues to perform well and, though the recession has reduced commercial traffic volumes, this has not affected profitability as we improve costs and maintenance efficiency to compensate for this. Our plant hire business is likely to continue to see weaker demand for general plant until the new build housing market improves. In the meantime the reduction in plant investment will result in the business being strongly cash generative this year. 

Board changes

Douglas Greaves has signalled his intention to retire after the AGM in 2010 by which time he will be 72 years of age and will have worked for the Group for 55 years. Douglas has worked tirelessly over this period and, on behalf of the Board and shareholders, I would like to thank him for his help in creating the strong, broadly based business Henry Boot is today and wish him all the very best for his retirement. 

Group risks and uncertainties

The Directors set out the key risks that could have a material impact on the Group in the 2008 Annual Report and Financial Statements. The Directors do not consider that the risks identified at that time have changed materially since then. On the positive side, our banking facilities have been put onto a three-year term and asset sales achieved after the period end have reduced net debt by some £20m. There are now indications that we are reaching the bottom of the recessionary cycle but we believe that the recovery will be rather slow. In the short-term, we will maximise returns in this difficult market whilst carefully managing debt levels, cash flow and our net asset position. In the longer term, as economic recovery takes hold, Henry Boot has a good mix of property-related businesses, which are well funded and possess opportunities that are capable of generating excellent profits as conditions in our markets improve.

John Reis

Chairman

27 August 2009

CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

For the half year ended 30 June 2009

	Half year ended 30 June 2009 Unaudited £'000	Half year ended 30 June 2008 Unaudited £'000	Year  ended 31 December 2008  Audited £'000
REVENUE	66,983	119,273	193,679
Cost of sales	(56,445)	(81,391)	(134,992)
Gross profit	10,538	37,882	58,687
Other income	16	-	31
Administrative expenses	(5,718)	(6,951)	(12,518)
Profit on sale of Group occupied properties	680	-	-
Pension expenses	(1,787)	(764)	(2,211)
	3,729	30,167	43,989
Decrease in fair value of investment properties	(23,585)	(8,189)	(19,592)
Impairment of properties under construction	-	-	(2,812)
Profit on sale of investment properties	74	481	530
(Loss) profit from operations	(19,782)	22,459	22,115
Investment income	625	230	585
Finance costs	(1,148)	(2,252)	(3,427)
(LOSS) PROFIT BEFORE TAX	(20,305)	20,437	19,273
Tax	5,840	(6,009)	(3,671)
(LOSS) PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS	(14,465)	14,428	15,602
Attributable to:
Equity holders of the Parent Company	(15,244)	13,566	13,861
Minority interest	779	862	1,741
	(14,465)	14,428	15,602
BASIC (LOSS) EARNINGS PER ORDINARY SHARE	(11.8)p	10.5p	10.8p
DILUTED (LOSS) EARNINGS PER ORDINARY SHARE	(11.7)p	10.4p	10.6p
DIVIDEND	1.25p	1.25p	5.0p

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

for the half year ended 30 June 2009

	Half year ended 30 June 2009 Unaudited £'000	Half year ended 30 June 2008 Unaudited £'000	Year ended 31 December 2008 Audited £'000
(Loss) profit for the period	(14,465)	14,428	15,602
Other comprehensive (loss) income
Revaluation of Group occupied property	206	(197)	(490)
Deferred tax on property revaluations	(224)	55	107
Actuarial loss on defined benefit pension scheme	(3,252)	(12,152)	(182)
Deferred tax on actuarial loss	911	3,403	51
Movement in fair value of cash flow hedges	24	270	(69)
Share-based payments	95	269	269
Arising on employee share schemes	418	(269)	862
Other comprehensive (loss) income for the period	(1,822)	(8,621)	548
Total comprehensive (loss) income for the period	(16,287)	5,807	16,150

Attributable to: Equity holders of the Parent Company	(17,066)	4,945	14,409
Minority interest	779	862	1,741
	(16,287)	5,807	16,150

CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)

at 30 June 2009

	30 June 2009 Unaudited £'000	30 June 2008 Unaudited £'000	31 December  2008 Audited £'000
ASSETS
Non-current assets
Intangible assets	13,137	14,315	13,671
Property, plant and equipment	91,216	166,740	100,732
Investment property	117,214	72,196	126,279
Trade and other receivables	1,286	-	5,344
Deferred tax assets	10,574	12,118	7,006
	233,427	265,369	253,032
Current assets
Inventories	59,406	57,111	59,011
Trade and other receivables	28,866	18,732	27,229
Cash and cash equivalents	3,334	2,957	2,579
	91,606	78,800	88,819
LIABILITIES
Current liabilities
Trade and other payables	55,140	57,599	51,885
Current tax liability	3,866	12,784	3,285
Borrowings	50,868	34,028	45,463
Provisions	11,414	11,221	11,057
	121,288	115,632	111,690
Net current liabilities	(29,682)	(36,832)	(22,871)
Non-current liabilities
Trade and other payables	3,614	-	7,233
Borrowings	5,813	6,975	6,394
Employee benefits	25,888	34,606	22,636
Deferred tax liabilities	135	4,230	3,778
Provisions	20	144	20
	35,470	45,955	40,061
NET ASSETS	168,275	182,582	190,100
EQUITY
Share capital	13,424	13,424	13,424
Revaluation reserve	3,542	4,657	4,438
Retained earnings	147,719	160,475	168,868
Other reserves	2,615	2,902	2,577
Cost of shares held by ESOP trust	(669)	(764)	(764)
Equity attributable to equity holders of the Parent Company	166,631	180,694	188,543
Minority interests	1,644	1,888	1,557
TOTAL EQUITY	168,275	182,582	190,100

CONDENSED BUSINESS SEGMENTS (UNAUDITED)

For the half year ended 30 June 2009

Revenue	Half year ended 30 June 2009 Unaudited				Half year ended 30 June 2008 Unaudited				Year ended 31 December 2008 Audited
	External sales £'000	Inter- segment  sales £'000	Total £'000		External sales £'000	Inter- segment sales £'000	Total £'000		External  sales  £'000	Inter- segment sales £'000	Total £'000
Property investment and development	21,522	162	21,684		11,175	127	11,302		21,338	346	21,684
Land development	1,595	-	1,595		57,825	-	57,825		74,692	140	74,832
Construction	43,866	5,885	49,751		50,273	840	51,113		97,649	2,459	100,108
Group overheads and other	-	296	296		-	327	327		-	628	628
	66,983	6,343	73,326		119,273	1,294	120,567		193,679	3,573	197,252
Eliminations	-	(6,343)	(6,343)		-	(1,294)	(1,294)		-	(3,573)	(3,573)
	66,983	-	66,983		119,273	-	119,273		193,679	-	193,679

Result	£'000	£'000	£'000
Property investment  and development	(19,093)	(6,050)	(17,345)
Land development	(2,442)	26,291	35,478
Construction	4,531	5,294	9,388
Group overheads and other	(2,778)	(3,082)	(5,460)
Segment result	(19,782)	22,453	22,061
Eliminations	-	6	54
Operating (loss) profit	(19,782)	22,459	22,115
Investment income	625	230	585
Finance costs	(1,148)	(2,252)	(3,427)
(Loss) profit before tax	(20,305)	20,437	19,273
Tax	5,840	(6,009)	(3,671)
(Loss) profit for the period	(14,465)	14,428	15,602

For management purposes, the Group is currently organised into four business segments: Property investment and development, Land development, Construction and Group overheads and other.

As operations are carried out entirely within the UK, there is no secondary segmental information.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)

For the half year ended 30 June 2009

		Half year ended 30 June 2009 Unaudited £'000	Half year ended 30 June 2008 Unaudited £'000	Year ended 31 December 2008 Audited £'000
Cash flows from operating activities
(Loss) profit from operations		(19,782)	22,459	22,115
Adjustments for non-cash items:
Depreciation of property, plant and equipment		1,716	1,987	3,982
Property impairment		106	40	2,862
Impairment of intangible assets		649	645	1,289
Share-based payment expense		418	-	862
Revaluation decrease in investment properties		23,585	8,189	19,592
Movements in fair value of cash flow hedges		40	-	(307)
Gain on disposal of property, plant and equipment		(955)	(95)	(354)
Gain on disposal of investment properties		(74)	(481)	(500)
Operating cash flows before movements in working capital		5,703	32,744	49,541
(Increase) decrease in inventories		(247)	25,810	23,750
Decrease (increase) in receivables		2,707	10,077	(3,495)
(Decrease) increase in payables		(143)	3,449	4,119
Cash generated from operations		8,020	72,080	73,915
Interest received		434	230	585
Interest paid		(752)	(3,161)	(4,110)
Tax		(103)	(7,355)	(13,156)
Net cash from operating activities		7,599	61,794	57,234
Cash flows from investing activities
Purchase of property, plant and equipment		(9,460)	(25,682)	(38,647)
Purchase of investment property		(85)	-	(2,101)
Purchase of intangible assets		(115)	(40)	(40)
Proceeds on disposal of property, plant and equipment		2,413	500	7,445
Proceeds on disposal of investment properties		1,133	1,758	5,729
Net cash from investing activities		(6,114)	(23,464)	(27,614)
Cash flows from financing activities
Dividends paid	- ordinary	(4,836)	(4,823)	(6,431)
	- minorities	(708)	(611)	(1,514)
	- preference	(10)	(10)	(21)
Net cash from financing activities		(5,554)	(5,444)	(7,966)
Net (decrease) increase in cash and cash equivalents		(4,069)	32,886	21,654
Opening net debt		(49,278)	(70,932)	(70,932)
Closing net debt		(53,347)	(38,046)	(49,278)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)

for the half year ended 30 June 2009

	Half year ended 30 June 2009 Unaudited £'000	Half year ended 30 June 2008 Unaudited £'000	Year ended 31 December  2008 Audited £'000
(Loss) profit for the period	(15,244)	13,566	13,861
Equity dividends	(4,846)	(4,833)	(6,448)
Revaluation of Group occupied property	206	(197)	(490)
Deferred tax on property revaluations	(224)	55	107
Actuarial loss on defined benefit pension scheme	(3,252)	(12,152)	(182)
Deferred tax on actuarial loss	911	3,403	51
Movement in fair value of cash flow hedges	24	270	(69)
Share-based payments	95	269	269
Arising on employee share schemes	418	(269)	862
Movement in equity	(21,912)	112	7,961
Equity at start of period	188,543	180,582	180,582
Equity at end of period	166,631	180,694	188,543

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

For the half year ended 30 June 2009

1.	The half-yearly financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting' using the same accounting policies and methods of computation as compared with the annual Financial Statements for the year ended 31 December 2008, except for as described below. The following standards and interpretations are mandatory for the first time for the financial year ending 31 December 2009: IFRIC 12 'Service Concession Arrangements' IFRIC 16 'Hedges of a Net Investment in a Foreign Operation' IAS 1 (Revised) 'Presentation of Financial Statements' IAS 23 (Revised) 'Borrowing Costs' IAS 32 (Amendment) 'Financial Instruments: Presentation' and IAS 1 (Amendment) 'Presentation of Financial Statements' IFRS 1 (Amendment) 'First Time Adoption of IFRS' and IAS 27 (Amendment) 'Consolidated and Separate Financial Statements' IFRS 2 (Amendment) 'Share-based Payments' IFRS 8 'Operating Segments' The adoption of these standards and interpretations has not had a significant impact on the Group. Following the adoption of IFRIC 12 'Service Concession Arrangements' our PFI asset has been reclassified as an intangible asset. The following restatements have been made: - reclassification of £11,025,000 from Property, plant and equipment to Intangible assets at 30 June 2008; and - reclassification of £10,483,000 from Property, plant and equipment to Intangible assets at 31 December 2008. The restatement has no impact on the Income Statement or Net Assets.
2.	The Financial Statements for the year ended 31 December 2008, which were prepared under IFRS, have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under Section 237(2) or (3) of the Companies Act 1985.
3.	The financial information set out above ('the Condensed Set of Financial Statements') does not comprise statutory accounts within the meaning of Section 240 of the Companies Act 1985 and is unaudited.
4.	During the half year ended 30 June 2009, Hallam Land Management Limited lost a planning appeal on a site in Derby. The resulting write-down of inventories amounted to £1,492,000.
5.	Earnings per ordinary share are calculated on the weighted average number of shares in issue.
6.	The interim dividend amounting to £1,610,331 (2008: £1,607,792) will be paid on 22 October 2009 to shareholders whose names are on the register at the close of business on 2 October 2009. The proposed interim dividend has not been approved at the balance sheet date and so has not been included as a liability in these Financial Statements.
7.	Corporation tax is calculated at 28% (2008: 28.5%) of the estimated assessable profit for the year.
8.	The assumptions that have been used in the calculations of the defined benefit pension scheme by our actuaries were as follows: 30 June 2009 % 30 June 2008 % 31 December 2008 % Rate of inflation 2.75 4.00 3.00 Long-term rate of increase in salaries 3.75 5.00 4.00 Rate of increase to pensions in payment liable for Limited Price Indexation 2.65 3.80 2.90 Revaluation of deferred pensions 2.75 4.00 3.00 Liabilities discount rate 6.30 6.50 6.50 Expected rate of return on scheme assets 5.70 6.64 5.70
9.	At the Board Meeting on 26 August 2009 the Directors formally approved the issue of these statements which have not been reviewed by the auditors.

RESPONSIBILITY STATEMENTS OF THE DIRECTORS

We confirm that to the best of our knowledge:

a)	the unaudited Condensed Consolidated Financial Statements have been prepared in accordance with IAS 34 'Interim Financial Reporting';
b)	the Half-yearly Review includes a fair review of the information required by Section DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
c)	the Half-yearly Review includes a fair review of the information required by Section DTR 4.2.8R (disclosure of related parties transactions and changes therein).

On behalf of the Board

E J BOOT Director 26 August 2009

J T SUTCLIFFE Director 26 August 2009

 

END

 

 

IR SESFIMSUSELA