Interim Results

Terrace Hill Group PLC
07 July 2005

For embargoed release at 7am                      7 July 2005


TERRACE HILL GROUP PLC

HALF YEARLY REPORT FOR THE SIX MONTHS to 30 APRIL 2005

CHAIRMAN'S STATEMENT

I am pleased to present the Group's Unaudited Accounts for the six months to 30
April 2005 and my Report on that half year where Triple Net Asset Value has
shown an encouraging 10% increase to 44.02p per share in the period.  We have
continued to make excellent progress with our commercial development programme,
acquiring a number of new sites, obtaining favourable planning consents, letting
and disposing of several mature assets.

Two office buildings, which we held in our books as investments for the long
term in anticipation of rental growth, have been sold at a keen price due to the
strong demand from investors.  At 11 Berkeley Street, our joint venture office
refurbishment in Mayfair, we sold the investment to clients of ING for £13.7
million at a yield of 5.37%.  Following the letting of our joint venture office
development UB1 in Uxbridge to Hertz Corporation, investor demand was so strong
that we decided to sell the building, selling to NFU  (pension fund) for £25.2
million at a yield of 5.68%.

New office and industrial development sites in London and the South East are
also under offer or in solicitors hands which will help to strengthen our
ongoing development programme and expand our land bank.

Substantial interest has also been shown in the investment sale of our completed
joint venture development at 16 Berkeley Street.  Further office and industrial
units were sold to owner occupiers in new phases of our schemes in Guildford and
Tunbridge Wells, showing continued strong demand in this sector. We are looking
to commence similar developments at our sites near Farnborough and Wokingham.

In the regions we have continued to make good progress with healthy levels of
occupier demand for our new developments.  In the North East final preparations
are underway for the construction of our 83,000 sq. ft. office development at
Gallowgate in Newcastle, where we are already seeing considerable tenant
interest.

At Manhattan Gate in Middlehaven, Middlesbrough's 50 acre flagship regeneration
project, our first joint venture development is nearing completion with good
tenant interest being shown.  At Baltic Business Quarter infrastructure works on
the first phase are nearing completion.  We have recently received planning
consents for retail warehouse use on our sites in Blyth and Bishop Auckland
totalling 116,000 sq. ft. and are now arranging pre-lets prior to commencement
on site.  In Galashiels, we anticipate obtaining an open A1 retail consent for
45,000 sq. ft. this summer.

In the South West and South Wales our developments have progressed well with
Templar House, our 90,000 sq. ft. office development in Bristol City Centre,
under offer to an owner occupier.  In Swansea, the Welsh Development Agency has
pre-let the whole of Cyprium, our 40,000 sq. ft. office development on the
Swansea waterfront.  We have also been selected by the WDA to develop the next
phase of offices in the same area.

The residential division continued to focus on its core holdings in Scotland,
Newcastle and Manchester disposing of 48 flats and houses in the six months.
There remain 371 units in the investment portfolio.  The Glasgow Green
development is progressing smoothly.  Further land has been added improving
access at Shotts in Lanarkshire, where a planning application for residential
development will be made shortly.

Triple Net Asset Value

Our proforma Triple Net Asset Value ('TNAV') per share at 30 April 2005 was
44.02p up from 39.99p at October 2004, an increase of 10.08%.  The principal
adjustments we make in arriving at a TNAV are to revalue current
work-in-progress and to allow for tax that would be payable were we to realise
our assets at the revalued amounts.  TNAV is the principal means by which we
measure our performance.

Our Net Asset Value, after allowing for minority interests, has risen from
£70.84 million to £74.25 million, an increase of £3.41 million.  Net Asset Value
per share was up from 38.12p at 31 October 2004 to 39.66p at 30 April 2005.

Balance Sheet at 30 April 2005

Total Group assets at 30 April 2005 were £175.3 million compared to £180.6
million at 31 October 2004, and net assets, after minority interest, were £74.2
million (31 October 2004: £70.8 million) an increase of £3.4 million.

Bank debt of £80.0 million net of £8.7 million cash stood at 107% of equity (31
October 2004: 81.6%). Properties held as investments were £76.4 million (£36.7
million residential and £39.7 million commercial) compared to £91.1 million at
October 2004.  Work in progress at £67.8 million (£63.9 million commercial and
£3.9 million residential) is up from £55.7 million in October 2004.

Profit & Loss Account

Profit before and after tax for the period was £386,534 (6 months to April 2004:
£776,000).  Operating profit, at £1.186 million, (6 months to April 2004: £2.082
million) reflected fewer development disposals in the period.  The timing of
sales of developments impacts on realisation of profit.

Corporate Acquisitions

As announced on 19 April 2005 we acquired the minority interest in Terrace Hill
North East Limited from our Managing Director Philip Leech at a cost of £1.1m
with 50% payable in cash and 50% in shares.  A subsidiary SERAH Properties plc
('SERAH') acquired and cancelled 95,400 of its own ordinary shares at a cost of
£74,787 and as a result the group's interest in the share capital of SERAH has
increased to 86.69%.

Dividend

The Directors have decided to pay an interim dividend in respect of the half
year under review of 0.5p per share (half year to 30 April 2004: 0.3p).  This
will be paid on 26 August 2005 to shareholders on the Register at 12 August
2005.  This dividend increase reflects our progressive dividend policy and our
confidence in the future.

The Future

We have strengthened our professional team with the appointment of new
development surveyors and project coordinators in London and the South West, who
are helping to manage our existing development programme and to add to our land
bank through judicious acquisitions of new opportunities.

We have also appointed an experienced fund manager from Morley who will be
joining us in September with a remit to help create an asset management and
co-investment business to augment our existing development activities leveraging
off the strong Terrace Hill brand.  I continue to be extremely encouraged by the
expansion of our development programme and the underlying strengths of the
occupier and investment markets in our specialist sectors.  Currently, we are
working on an institutional development fund which will considerably assist the
build up of our development programme.

I believe we will show a further good growth in Triple Net Asset value over the
rest of the year and beyond.

Robert F M Adair

Chairman



7 July 2005






TERRACE HILL GROUP PLC

UNAUDITED CONSOLIDATED PROFIT & LOSS ACCOUNT

                                  6 months to      Year to 6 months to
                                    30-Apr-05    31-Oct-04   30-Apr-04
                                         £000         £000        £000
                                   (unaudited)    (audited) (unaudited)

TURNOVER
Group and share of joint venture       11,924       27,495       9,290
Less: share of joint venture           
turnover                               (1,256)          (4)          -
                                     --------     --------    --------
Group turnover: continuing             
operations                             10,668       27,491       9,290
                                     --------     --------    --------
GROUP OPERATING PROFIT
Continuing operations                     927        5,302       2,082
Share of joint venture operating          
profit/(loss)                             259          (43)          -
                                     --------     --------    --------
TOTAL OPERATING PROFIT                  1,186        5,259       2,082
Continuing operations:
Amounts written off unlisted                
investments                                 -         (144)          4
(Loss)/gain on disposal of fixed           
asset investments                          (1)           1           -
Net gain on disposal of investment        
property                                  997        3,252         456
Permanent diminution in value of an         
investment property                         -         (279)          -
Discontinued operations:
(Loss)/gain on liquidation of            
former subsidiary                        (123)         143         143

Net interest payable                   (1,672)      (4,148)     (1,909)
                                     --------     --------    --------
PROFIT ON ORDINARY
ACTIVITIES BEFORE TAX                     387        4,084         776
Taxation credit                             -            3           -
                                     --------     --------    --------
PROFIT ON ORDINARY
ACTIVITIES AFTER TAX                      387        4,087         776
Minority interest                           5         (256)        (71)
                                     --------     --------    --------
PROFIT ATTRIBUTABLE TO
MEMBERS OF PARENT COMPANY                 392        3,831         705
Dividends                                (936)      (1,487)       (561)
                                     --------     --------    --------
TRANSFER TO RESERVES                     (544)       2,344         144
                                     --------     --------    --------
Basic and diluted earnings per          
share                                   0.211p       2.238p      0.453p
                                     --------     --------    --------
                                     --------     --------    --------


TERRACE HILL GROUP PLC

UNAUDITED SUMMARISED CONSOLIDATED BALANCE SHEET

                                    30-Apr-05    31-Oct-04     30-Apr-04
                                         £000         £000          £000
                                   (unaudited)    (audited)   (unaudited)

FIXED ASSETS
Intangible Assets
Positive goodwill                       3,079        2,468       2,586
Negative goodwill                      (1,864)      (1,921)     (2,857)
                                     --------     --------    --------
                                        1,215          547        (271)
Tangible Assets
Investment properties                  76,414       91,165     103,306
Other tangible assets                     186          216         206
                                     --------     --------    --------
                                       76,600       91,381     103,512

Investments
Joint venture- share of gross           
assets                                  3,573        4,033           -
Joint venture-share of gross           
liabilities                            (3,243)      (3,940)          -
                                     --------     --------    --------
                                          330          93            -
Investments in associates                   -            -         528
Other fixed asset investments             123          446         101
                                     --------     --------    --------
                                          453          539         629
                                     --------     --------    --------
                                       78,268       92,467     103,870
CURRENT ASSETS
Work in progress                       67,752       55,687      21,972
Debtors                                20,601       14,627      24,491
Cash at bank and in hand                8,700       17,801       5,696
                                     --------     --------    --------
                                       97,053       88,115      52,159

CREDITORS: amounts falling due
within one year
Borrowings                            (19,454)     (30,928)    (27,260)
Other creditors                       (10,660)     (33,295)     (8,263)
                                     --------     --------    --------
                                      (30,114)     (64,223)    (35,523)
                                     --------     --------    --------
NET CURRENt ASSETS                     66,939       23,892      16,636
                                     --------     --------    --------
TOTAL ASSETS LESS CURRENT             
LIABILITIES                           145,207      116,359     120,506

CREDITORS: amounts falling due        
after more than one year              (70,487)     (44,672)    (51,482)
PROVISIONS FOR LIABILITIES AND           
CHARGES                                  (122)        (122)       (477)
                                     --------     --------    --------
NET ASSETS                             74,598       71,565      68,547
                                     --------     --------    --------
                                     --------     --------    --------
CAPITAL AND RESERVES
Called up share capital                 3,716        3,716       3,737
Shares to be issued                       558            -           -
Share premium account                  19,369       19,369      19,369
Revaluation reserve                    21,332       21,492      21,170
Capital redemption reserve                849          849         821
Merger reserve                          7,875        8,115       8,686
Profit and loss account                20,550       17,300      11,735
                                     --------     --------    --------
EQUITY SHAREHOLDERS FUNDS              74,249       70,841      65,518

MINORITY INTERESTS                        349          724       3,029
                                     --------     --------    --------
                                       74,598       71,565      68,547
                                     --------     --------    --------
                                     --------     --------    --------

TERRACE HILL GROUP PLC

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                                    6 months to     Year to 6 months to
                                    30-Apr-2005   31-Oct-04   30-Apr-04
                                           £000        £000        £000
                                     (unaudited)   (audited) (unaudited)

Profit attributable to members of
the parent company excluding share 
of profit/(loss) of                         
joint venture company                       155       3,888         705
Share of joint venture profit/              
(loss) for period                           237         (57)          -
                                       --------    --------    --------
Profit attributable to members of           
the parent company                          392       3,831         705

Unrealised surplus on revaluation         
of properties                             3,391      13,161       9,737

Unrealised surplus on revaluation             
of unlisted investments                       3          11          11
                                       --------    --------    --------
Total recognised gains and losses         
relating to period                        3,786      17,003      10,453
                                       --------    --------    --------
                                       --------    --------    --------

GROUP STATEMENT OF CASH FLOWS
                                    6 months to     Year to 6 months to
                                      30-Apr-05   31-Oct-04   30-Apr-04
                                           £000        £000        £000
                                     (unaudited)   (audited) (unaudited)

Cash (outflow) from operating           
activities                              (50,788)     (7,086)     (7,042)
Returns on investments and               
servicing of finance                     (1,806)     (3,987)     (1,965)
Taxation                                   (769)         (7)          -
Capital expenditure and financial        
investment                               32,363      20,306       8,162
Acquisitions and disposals                 (216)     (9,682)     (8,002)
Equity dividends paid                      (929)       (788)       (231)
                                       --------    --------    --------
Cash (outflow) before liquid            
resources and financing                 (22,145)     (1,244)     (9,078)
Financing                                13,168       5,093       2,231
                                       --------    --------    --------
(Decrease)/increase in cash              (8,977)      3,849      (6,847)
                                       --------    --------    --------
                                       --------    --------    --------


Reconciliation of group operating profit to net cash (outflow) from operating
activities

                                          £000       £000           £000

Operating profit                           927      5,302          2,082
Depreciation                                47         81             17
Loss on sale of other tangible              
fixed assets                                12          -              -
Positive goodwill amortisation and          
impairment losses                           69        169             81
(Increase) in stock                    (22,854)   (36,758)        (3,136)
(Increase)/decrease in debtors          (7,925)     1,805         (4,306)
(Decrease)/increase in creditors       (21,064)    22,315         (1,780)
                                      --------   --------       --------
Net cash (outflow) from operating      
activities                             (50,788)    (7,086)        (7,042)
                                      --------   --------       --------


GROUP RECONCILIATION OF SHAREHOLDERS' FUNDS

                                  6 months to     Year to     6 months to
                                    30-Apr-05   31-Oct-04      30-Apr-04
                                         £000        £000           £000
                                   (unaudited)   (audited)    (unaudited)

Total recognised gains and losses       3,786      17,003         10,453
New shares issued                           -         665            657
Shares to be issued                       558        (193)          (193)
Share premium arising on new shares         
issued                                      -       7,546          7,546
Merger reserve arising on new               
shares issued                               -       1,184          1,084
Purchase of ordinary shares                 -        (409)             -
Dividend paid to ordinary                
shareholders                             (936)     (1,487)          (561)
                                     --------    --------       --------
Total movements during the year         3,408      24,309         18,986
Opening shareholders' funds            70,841      46,532         46,532
                                     --------    --------       --------
Closing shareholders' funds            74,249      70,841         65,518
                                     --------    --------       --------
                                     --------    --------       --------


NOTES

BASIS OF PREPARATION

These interim accounts are unaudited but have been reviewed by the auditors
whose review report is set out in the half-yearly report.  The abridged
financial information relating to the year ended 31 October 2004 is based on an
extract from the latest financial statements, which have been filed with the
Registrar of Companies.  The report of the auditors on these financial
statements was unqualified and did not contain a statement under section 237(2)
or (3) of the Companies Act 1985. The financial information summarised above
does not constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985.

EARNINGS PER ORDINARY SHARE

The calculation of basic and diluted earnings per ordinary share is based on the
following:

                                    6 months to       Year to    6 months to
                                      30-Apr-05     31-Oct-04      30-Apr-04
                                           £000          £000           £000

Surplus                                     392         3,831            705
                                    -----------   -----------    -----------
                                    -----------   -----------    -----------
The weighted average number of
ordinary shares in issue during 
the period:
Basic and diluted                   185,923,602   171,192,098    155,704,845
                                    -----------   -----------    -----------
                                    -----------   -----------    -----------
DIVIDEND

The company intends to pay an interim dividend of 0.50p per share.

HALF-YEARLY REPORT

The half-yearly report will be posted to shareholders shortly and copies will be
available, free of charge for one month, from the Company Secretary, Terrace
Hill Group PLC, James Sellars House, 144 West George Street, Glasgow, G2 2HG.

For further information please contact:

Robert Adair, Chairman, Terrace Hill Group PLC                Tel: [phone]

Philip Leech, Group Managing Director, Terrace Hill Group PLC Tel: [phone]

Alasdair Robinson, Noble & Company Limited                    Tel: [phone]

Hugo de Salis, St Brides Media & Finance Ltd                  Tel: [phone]


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