Interim Results

Solitaire Group PLC
21 September 2005


21 September 2005
                              SOLITAIRE GROUP Plc
    Solitaire is a leading national provider of property management services

                                INTERIM RESULTS

                    FOR THE SIX MONTHS ENDED 30 JUNE 2005

         'Solitaire invests to sustain strong pipeline of new business'

  • Turnover - increased by 14.6 per cent to £5.2 million
  • Profit before tax, amortisation and exceptional costs - up 7.5 per cent
    to £1.7 million
  • Earnings per share under FRS 22 - up 3.8 per cent to 16.2p
  • Interim dividend up 8.3 per cent to 3.9p per share
  • Organic growth - The number of new developments where the group has
    contracts to manage, and will receive income in future years, continues to
    grow apace and the pipeline now represents over £1.3 million per annum of
    future income

George Brutton, Chairman of Solitaire Group Plc, commented:

'This half year has provided further exciting opportunities for the group, with
the number of future new business contracts continuing to grow and the
continuing trend towards the group managing larger residential and mixed use
developments'.

'We anticipate that the rate at which properties are handed over to us for
management will increase in the second half and this together with the energetic
management of our existing portfolio will result in a satisfactory outcome for
the year'.

For further information:

Graham Shapiro, Joint Managing       Tel: [phone]
Director
Solitaire Group Plc
Tarquin Edwards / Chris Steele       07879 458 364 / 07979 604 687 or
Binns & Co PR                        Tel: [phone]

Chairman's statement

This half year has provided further exciting opportunities for the group, with
the number of future new business contracts continuing to grow and the
continuing trend towards the group managing larger residential and mixed use
developments. At the same time we are actively managing our on-going portfolio
and this has led to increased trading profits. This period has also seen us
winning some substantial management contracts from new clients.

Moss Kaye Pembertons, which operates in a difficult commercial property market,
has experienced a marked temporary slowdown in the fees generated from sales and
lettings, which has affected these results.

Currently your company has more than 9,000 units in the pipeline which, when all
are handed over for management, will add over £1.3 million to annual gross
revenue over the next few years. Expenses have been closely controlled, but we
have been mindful of the need to invest in the business to administer this
contracted increase in property management.

We are also continuing to invest in our regional offices and the ongoing costs
incurred are reflected in these results. The Leicester office is just beginning
to generate additional income over revenue transferred when it was opened,
whilst the Southampton office was only opened at the beginning of 2005 and the
benefit of additional business from new developers in the area will be seen in
future years. Interest costs have risen as we continue to invest in revenue
generating freehold reversions.

We have seen some effect from the subdued nature of the housing market, where
consumers have shown more caution, which in turn has slowed the speed at which
some house builders are able to sell properties. This caution has led to a slow
down in a few major developments passing to Solitaire for management, with an
ensuing temporary effect on revenue. As the housing market stabilises and the
number of transactions increases, the rate at which developments are handed over
to us for management will return to normal.

Results

Turnover increased by 14.6% to £5,171,000 (2004: £4,511,000).
The operating profit for the six months ended 30 June 2005, before writing off
exceptional costs, goodwill amortisation and interest, increased by 7.5% to
£1,710,000 (2004: £1,590,000).

Accordingly, after exceptional costs, interest and goodwill amortisation,
pre-tax profits were up by £39,000 or 3.3% to £1,217,000 (2004: £1,178,000) and
earnings per share under FRS 22 were up by 3.8% to 16.2p (2004: 15.6p). Adjusted
earnings per share, before exceptional costs, goodwill amortisation and after
interest were 20.4p (2004: 20.3p).

The board is recommending the payment of an increased interim dividend of 3.9p
(2004: 3.6p) per share, an increase of 8.3% over 2004. The interim dividend will
be paid on 21 November 2005 to shareholders on the register on 30 September
2005.

Business development

Our Leicester office continues to drive some of the new business growth with a
number of new developer clients contributing to current earnings and forward
contracts for future management. Our Southampton office opened in the early part
of this year and we are in the process of transferring further existing
management contracts to this office. We look forward to growing our business in
the South and South West of England from this base.

People

The continuing growth of our core property management business has led to an
increase in staff to support the needs of both residents and our developer
clients. We have also secured some additional office space in Barnet in order to
accommodate our anticipated space requirements.

In order to deal with the substantial increase in property management over the
next few years and to ensure that we continue to control our costs and improve
efficiency, we have recruited Roy Barnett as Chief Operating Officer for
Solitaire Property Management Company Ltd, our principal property management
subsidiary. Roy was previously Chief Information Officer for Kensington
Mortgages plc and he will be a strong addition to the group's senior management
team.

Current trading and prospects
Looking forward to the second half of 2005, the fundamentals of the UK housing
Market appear sound. We anticipate that the rate at which properties are handed
over to us for management will increase in the second half and this together
with the energetic management of our existing portfolio will result in a
satisfactory outcome for the year.

George Brutton FRICS

Chairman
21 September 2005


Unaudited consolidated profit and loss account

                                                   Six      Six     
                                                months   months     Year
                                                 to 30    to 30    to 31
                                                  June     June     Dec.
                                                  2005     2004     2004
                                      Notes      £'000    £'000    £'000

Turnover                                         5,171    4,511    9,105

Operating expenses
External fees and commissions                      147      123      325
Other administration expenses                    3,314    2,798    5,680

                                                 1,710    1,590    3,100
Amortisation of goodwill                           208      205      410
Exceptional costs                                    -       27       73

Operating profit                                 1,502    1,358    2,617

Net interest paid                                (285)    (180)    (432)

Profit on ordinary activities before             1,217    1,178    2,185
taxation

Taxation on ordinary activities                    414      415      784

Profit on ordinary activities after                803      763    1,401
taxation

Dividends                             2            193      177      609

Retained profit for the period                     610      586      792

Basic and diluted earnings per share  3          16.2p    15.6p    28.5p

Dividend per share                    2           3.9p     3.6p    12.3p


Earnings per share note
Basic and diluted earnings per share  3          16.2p    15.6p    28.5p
Adjustment for amortisation                       4.2p     4.2p     8.3p
Adjustment for exceptional costs                     -     0.5p     1.5p

Adjusted earnings per share           3          20.4p    20.3p    38.3p

Unaudited consolidated balance sheet

                                              30 June  30 June  31 Dec.
                                                 2005     2004     2004
                                                £'000    £'000    £'000
Fixed assets
Intangible assets                               6,941    7,349    7,149
Tangible assets
Office equipment                                  563      502      485
Freehold land and buildings                       261      261      261
Freehold reversions                            17,605   13,581   16,014

                                               18,429   14,344   16,760

                                               25,370   21,693   23,909

Current assets
Debtors                                         5,142    3,334    4,051
Cash and deposits                                 378      551      391

                                                5,520    3,885    4,442

Creditors: amounts falling due
within one year
Borrowings                                      2,557    1,517    2,299
Other liabilities                               2,663    2,524    2,336

                                                5,220    4,041    4,635
Net current (liabilities) / assets                300    (156)    (193)

Total assets less current                      25,670   21,537   23,716
liabilities

Creditors: amounts falling due after
more than one year
Borrowings                                      8,152    5,705    6,460
Other liabilities                                 262    1,550      610

                                                8,414    7,255    7,070
Provisions for liabilities and
charges
Deferred taxation                                  20        -       20

Net Assets                                     17,236   14,282   16,626

Capital and reserves
Called-up share capital                           495      491      495
Share premium account                           3,825    3,691    3,825
Revaluation reserve                             8,731    6,731    8,731
Profit and loss account                         4,185    3,369    3,575

Equity shareholders' funds                     17,236   14,282   16,626


Unaudited consolidated cash flow statement

                                                  Six       Six      
                                               months    months      Year
                                                to 30     to 30     to 30
                                                 June      June      Dec.
                                                 2005      2004      2004
                                                £'000     £'000     £'000

Cash flow from operating activities               891     1,564     2,033

Returns on investments and servicing of
finance
Interest received                                  12        10        21
Interest paid                                   (297)     (190)     (453)

Net cash outflow from returns on                          (180)     (432)
investment and servicing of finance             (285)

UK corporation tax                              (336)     (335)     (801)

Capital expenditure and financial
investment
Office equipment                                (210)     (131)     (239)
Purchase of freehold reversions               (1,592)     (838)   (1,303)
Disposal of freehold reversions                     -         -        32

Net cash outflow from capital expenditure     (1,802)     (969)   (1,510)
and financial investment

Deferred consideration of acquisition of            -         -     (779)
subsidiary
Equity dividends paid                           (431)     (392)     (570)

Cash outflow before use of liquid             (1,963)     (312)   (2,059)
resources and financing

Management of liquid resources and
financing
Financing                                       1,798       109     1,128

Decrease in cash in the year                    (165)     (203)     (931)

                                                 2005      2004      2004
Reconciliation of net cash flow to              £'000     £'000     £'000
movement in net debt

Decrease in cash in the year                    (165)     (203)     (931)
Cash inflow from increased debt               (1,798)     (109)   (1,078)

Movement in net debt                          (1,963)     (312)   (2,009)
Non cash deferred taxation provision                          -      (20)
Opening net debt                              (8,388)   (6,359)   (6,359)

Closing net debt                             (10,351)   (6,671)   (8,388)


SOLITAIRE GROUP Plc

Notes

1     Basis of preparation of unaudited interim information
      The results for the six months ended 30 June 2005 have been
      reviewed by MacIntyre Hudson and have been prepared on the basis
      of the accounting policies set out in the consolidated financial
      statements at 31 December 2004. The comparatives for the year
      ended 31 December 2004 have been extracted from the audited
      consolidated financial statements for that period.
      The audited consolidated financial statements for the year ended
      31 December 2004 have been filed with the Registrar of Companies
      and include an unqualified audit report. The comparatives
      included in this report do not constitute statutory accounts
      within the meaning of section 240 of the Companies Act 1985.

2     Dividends

      The board has declared an interim dividend of 3.9p (2004: 3.6p)
      per ordinary share, payable on 21 November 2005 to shareholders
      on the register on 30 September 2005.

3     Earnings per share

      The calculation of earnings per share for the six months ended 30
      June 2005 is based upon a profit of £803,000 (2004: £763,000) and
      the average number of ordinary 10p shares in issue of 4,952,469
      (2004: 4,895,666). The group considers that the additional
      disclosure by way of note of the adjusted earnings per share
      before the effect of amortisation and exceptional costs more
      truly reflects its operational performance.

4     Interim report

      Copies of the interim report for the six months ended 30 June
      2005 will be sent to shareholders on 21 October 2005. Further
      copies will be available from the Company Secretary, Solitaire
      Group Plc, Lynwood House, 10 Victors Way, Barnet, Hertfordshire,
      EN5 5TZ and at the group's website, www.solitairegroup.com.



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