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Benchmark Group PLC (BMK)

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Thursday 28 February, 2002

Benchmark Group PLC

Interim Results

Benchmark Group PLC
28 February 2002



For immediate release                                      28 February 2002


                                INTERIM RESULTS

                   For the Six Months Ended 31 December 2001


Benchmark Group PLC ('Benchmark'), the specialist central London property
investment and development company, announces results for the six months ended
31 December 2001


Financial Highlights for the six months to 31 December 2001



  • Pre-tax profits: £9.6m (2000: restated £14.6m, include £6.5m from the sale
    of shares in Nexus Estates PLC)



  • Adjusted earnings per share: 4.3p (2000: restated 3.1p)



  • Adjusted net assets of £363.8m (30 June 2001: restated £462.3m)



  • Adjusted net assets per share: 373.6p and 366.1p on a diluted basis (30
    June 2001: restated 379.9p and 370.9p)



  • First interim dividend per share of 60p (2000: Nil) paid in November 2001



  • Second interim dividend per share of 1.95p (2000: 1.95p) payable in April
    2002



  • Net gearing of 58.2% compared to 58.6% as at 30 June 2001





Corporate Highlights



  • Total annualised net rental income, including Benchmark's share of its
    joint ventures, increased by 4.8% to £52.6m from £50.2m as at 24 September
    2001



  • Total properties under management up 10.5% from 30 June 2001 to £1,139.5m
    as at 31 December 2001



  • Total acquisitions of £84.2m, of which £56.4m were by our joint ventures



  • Total sales of £261.7m at a net pre-tax profit of £8.6m.  Of these sales
    £249.5m were achieved from the sale of a portfolio of properties into The
    West End of London Property Unit Trust (WELPUT)



Note:      The comparable figures for earlier periods have been restated to take
account of the adoption of Urgent Issues Task Force Abstract 28 'Operating Lease
Incentives' (UITF28) and Financial Reporting Standard 19 'Deferred Tax' (FRS19)
and the share consolidation.





Tan Sri Quek Leng Chan, Chairman of Benchmark, said: 'We have weathered well the
more difficult general economic conditions prevalent in the first half of our
current financial year and our balance sheet is well positioned to meet the
immediate future resolutely.  Against the background of continuing uncertainty
of US and European corporate confidence we will seek to enhance the returns on
our existing investments while, at the same time, exploring the benefits of
further acquisition opportunities.  We will continue to make disposals whilst
there continues to be strong interest from investors in central London property.






'Our aim is to strive for the best performance possible in more difficult
markets in 2002 and to be well placed to take advantage of anticipated
improvements in 2003 and beyond.'



For further information:
Benchmark Group PLC                                     Tavistock Communications Ltd
Nigel Kempner, Chief Executive                          Jeremy Carey / Bella Pagdin
Tel: 020 7287 6881                                      Tel: 020 7600 2288
www.benchmarkgroup.plc.uk

www.benchmarkdirect.com



CHAIRMAN'S STATEMENT



Following the tragic events in September 2001 in the USA, stock market
volatility and high profile corporate failures have led to a lack of general
business confidence that has translated, in the property sector, into a slowdown
in tenant demand for offices particularly in London during the last quarter of
2001.



London continues to experience weaker conditions, particularly in the West End
where the majority of our assets are concentrated. The City of London and Canary
Wharf have also now begun to feel the effects of the weakening trend and,
overall, in London top quality office rents have declined by just under 10% from
June 2001 levels.  However, retail rents have remained remarkably robust and
there are few vacant quality shop units in the West End.



West End office vacancy rates are now running at about 8% and in the City at
about 6%, but in each case under 1% of the vacant space is what we would
describe as Grade A quality.  This is however a marked increase of total
availability since June 2001 and there are less potential tenants in the market
ready to make commitments now with more space from which they can choose.



Over 50% of the vacant office space is tenant controlled rather than landlord
controlled, which may lead to further reductions in rents, as existing occupiers
try to reduce their costs, although there is currently little transactional
evidence of this.



Demand for good property investments has remained strong with historically low 5
year interest rates compared with rack rented property yields and has even shown
signs of strengthening as direct property investment currently appears to become
a more attractive asset class compared to alternative forms of investment in the
current economic environment.



Speculative non-recourse development finance remains almost impossible to obtain
and, coupled with tight planning controls in The West End, the supply of newly
built office space coming onto the market over the next three years will
continue to be low.  Once business confidence returns, tenant demand will
improve and rents will increase again, possibly as early as 2003.





NET ASSET VALUE



Our external valuers, DTZ Debenham Tie Leung Limited, Chartered Surveyors,
valued our investment properties, including those held in our joint venture with
JER Partners, at 31 December 2001.  Also at that date, CB Hillier Parker Limited
and Atis Real Weatheralls Limited valued the properties in The West End of
London Property Unit Trust ('WELPUT').  These valuations showed an overall net
reduction of £17.8m, or 2% in the value of properties held as at 31 December
2001, on a consolidated basis including our share of joint ventures.
Interestingly, the reduction in value was as a result of a fall in market rents
and estimates of future rents for offices rather than a shift in yields.



Net asset value per share at 31 December 2001 has been affected by several
events.  The required adoption, effective for the first time in this financial
year, of the Urgent Issues Task Force Abstract 28 'Operating Lease Incentives'
(UITF 28) and the Financial Reporting Standard 19 'Deferred Tax' (FRS 19) have
necessitated the restatement of the comparative figures for the six month period
to 31 December 2000 and for the previous financial year end, 30 June 2001.  The
restated basic and diluted net asset values per share as at 30 June 2001 to take
account of these accounting changes are 375.5p and 367.0p respectively compared
with 383.3p and 373.9p previously reported.



These figures are reported following the full adoption of FRS 19, as stated
above.  Adjusted net assets of £363.8m (30 June 2001: restated £462.3m) have
been calculated excluding the additional deferred tax liability in respect of
capital allowances of £5.7m (30 June 2001: £5.3m) as it is the Group's informed
belief that such a liability is unlikely to crystallise in practice.  Adjusted
net assets as at 31 December 2001 are 373.6p and 366.1p on a diluted basis.



During the period, we paid a special interim dividend of 60p per share to
shareholders.  Simultaneously, we carried out a share consolidation of 8 new
62.5p shares for every 10 50p shares held.  The WELPUT transaction also
triggered a capital gains tax liability of £12.0m.  All these together with the
revaluation deficit of £17.8m, resulted in a reduction in adjusted net assets as
at 31 December 2001 to £363.8m.  This represents a 6.6% reduction from adjusted
and restated net assets as at 30 June 2001.





RESULTS



Net rental income for the period, excluding rental income from joint ventures,
increased by 3% from £15.0m to £15.4m.



Pre-tax profits for the six months to 31 December 2001 were £9.6m (2000:
restated £14.6m), a reduction of 34% over the same period last year.  In the
same period last year we achieved a £6.5m profit on the sale of our controlling
interest in Nexus Estates PLC, our business centre subsidiary.  Adjusted
earnings per share were 4.3p (2000: restated 3.1p) representing an increase of
38.7% over the same period last year.



The net rental income on an annualised basis at the date of this report,
including our share in the joint ventures, is now £52.6m from 398 tenants.  This
compares with £50.2m at 24 September 2001, the date of our last report.



Our net borrowings at 31 December 2001 were £208.3m, resulting in a gearing of
58.2% compared to 58.6% as at 30 June 2001.  If our share of the non-recourse
joint venture borrowings was included, the gearing would be 124.4% (30 June
2001: 80.0%).





DIVIDEND



We paid a first interim dividend on 16 November 2001 of 60p per share (2000:
Nil) amounting to £73 million.



The Directors have declared a second interim dividend of 1.95p (2000: 1.95p)
which will be paid on 9 April 2002 to shareholders on the register at 15 March
2002.





ACQUISITIONS AND DISPOSALS



We bought properties in central London for £27.8m during the period.  Also,
Benchmark JER 1 and JER 2 Limited Partnerships, in which we have interests,
acquired properties for £56.4m.



We sold properties for £261.7m in the period at a net pre-tax profit of £8.6m of
which £2.1m was recognised in the profit and loss account and the balance as an
increase in the revaluation reserve. This net profit represents a surplus of
3.4% above our book value.  The surplus over historic cost was £83.0m of which
£22.2m was recognised in the period to 31 December 2001.



Of these sales £249.5m was achieved from a sale of a portfolio of our properties
into WELPUT where our share of net assets at 31 December 2001 was £61.1m. During
the year we will be seeking to raise new money for WELPUT and reduce our
effective interest below 50%.





ASSET MANAGEMENT INITIATIVES



We have strengthened our management team by the addition of Paul Connellan,
previously Chief Surveyor at Equitable Life, as head of asset management, and
Marc Wilder, previously at Hemingway Properties, as a senior asset manager.



We have set up our own direct office leasing initiative called Benchmark Direct
to improve our relations and access with potential office tenants.  We are also
setting up Benchmark Customer Centre, which will improve our contact with and
provision of building services to our occupiers.





CONCLUSION



We have weathered well the more difficult general economic conditions prevalent
in the first half of our current financial year and our balance sheet is well
positioned to meet the immediate future resolutely.  Against the background of
continuing uncertain US and European corporate confidence, we will seek to
enhance the returns on our existing investments while, at the same time,
exploring the benefits of further acquisition opportunities.  We will continue
to make disposals whilst there continues to be strong interest from investors in
central London property.



Our aim is to strive for the best performance possible in more difficult markets
in 2002 and to be well placed to take advantage of anticipated improvements in
2003 and beyond.





Tan Sri Quek Leng Chan

Chairman

27 February 2002





 Financial Highlights

Six months ended 31 December 2001




                                                                     31 Dec 01        30 June 01           %
                                                                   (unaudited)         (audited)

                                                                                      (restated)
Total properties (£ million)                                             895.7             888.8         0.8
Properties under management (£ million)                                1,139.5           1,030.8        10.5
Adjusted net assets (£ million)                                          363.8            389.3*        -6.6
Adjusted net assets per share - diluted (pence)                          366.1             370.9        -1.3
Net gearing (%)                                                           58.2              58.6        -0.7




                                                                  Six months to    Six months to           %
                                                                      31 Dec 01        31 Dec 00
                                                                    (unaudited)      (unaudited)

                                                                                      (restated)
Net rental income (£ million)                                              15.4             15.0         2.7
Profit before tax and sale of shares in Nexus (£ million)                   9.6              8.1        18.5
Profit from sale of shares in Nexus (£ million)                               -              6.5           -
Profit before tax (£ million)                                               9.6             14.6       -34.2
Adjusted earnings per share (pence)                                         4.3              3.1        38.7
Dividend per share (pence)                                                 1.95             1.95           -
Special dividend per share (pence)                                         60.0                -           -



* After deducting the special dividend of £73m



Consolidated Profit and Loss Account

                       Six months ended 31 December 2001


                                                                 Six months to   Six months to       Year to
                                                                     31 Dec 01       31 Dec 00     30 Jun 01
                                                                   (unaudited)     (unaudited)     (audited)

                                                                         £'000      (restated)    (restated)
                                                          Note                           £'000         £'000
GROSS RENTAL INCOME
Group and share of joint ventures                                       26,959          19,415        45,268
Less:  share of joint ventures                                         (8,885)         (1,740)       (7,252)
                                                                        18,074          17,675        38,016
Ground rents                                                           (1,093)           (874)       (2,024)
Irrecoverable property costs                                           (1,146)         (1,440)       (2,723)
Amortisation of leasehold properties                                     (454)           (400)         (823)
NET RENTAL INCOME                                                       15,381          14,961        32,446
Net operating profit from Nexus Estates PLC                  3               -             593           593
Profit on disposal of trading properties                                     -             645           745
Administration expenses                                                (2,099)         (1,577)       (4,297)
GROUP OPERATING PROFIT                                                  13,282          14,622        29,487
Share of operating profit in joint ventures                 10           8,074           1,660         6,035
TOTAL OPERATING PROFIT                                                  21,356          16,282        35,522
Profit on disposal of investment properties                  4           2,060           2,474         3,101
Profit on disposal of shares in Nexus Estates PLC                            -           6,500         6,500
PROFIT ON ORDINARY ACTIVITIES BEFORE INTEREST                           23,416          25,256        45,123
Group net interest payable and similar charges               5         (6,005)         (9,399)      (17,507)
Share of net interest payable in joint ventures             10         (7,818)         (1,279)       (5,008)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION                            9,593          14,578        22,608
Taxation                                                     6         (3,791)         (4,923)       (7,742)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION                             5,802           9,655        14,866
Minority interests                                                       (374)             363           450
PROFIT FOR THE FINANCIAL PERIOD                                          5,428          10,018        15,316
Dividends                                                    7        (74,904)         (2,362)       (5,538)
RETAINED (LOSS)/PROFIT FOR THE PERIOD                                 (69,476)           7,656         9,778
EARNINGS PER SHARE  - BASIC                                  8            4.7p            8.3p         12.6p
   - DILUTED                                                 8            4.7p            8.0p         12.6p
ADJUSTED EARNINGS PER SHARE                                  8            4.3p            3.1p          7.4p



                           Consolidated Balance Sheet

                             As at 31 December 2001


                                                                            As at           As at           As at
                                                                        31 Dec 01       31 Dec 00       30 Jun 01
                                                                      (unaudited)     (unaudited)       (audited)

                                                             Note                      (restated)      (restated)
                                                                            £'000           £'000           £'000
FIXED ASSETS
Investment and development properties                           9         522,241         707,609         746,819
Joint ventures
Share of gross assets                                                     382,845         136,860         146,837
Share of gross liabilities                                              (284,183)       (104,506)       (106,191)
                                                               10          98,662          32,354          40,646
Investments                                                                 3,213           3,213           3,213
Other tangible assets                                                         276             258             272
                                                                          624,392         743,434         790,950
CURRENT ASSETS
Debtors                                                                    13,305          38,078           8,993
Investments                                                                   916             916             916
Cash at bank and in hand                                                    6,215           4,731           7,818
                                                                           20,436          43,725          17,727
CREDITORS - AMOUNTS FALLING DUE WITHIN ONE YEAR                          (41,199)        (39,901)        (46,365)
NET CURRENT (LIABILITIES)/ASSETS                                         (20,763)           3,824        (28,638)
TOTAL ASSETS LESS CURRENT LIABILITIES                                     603,629         747,258         762,312
CREDITORS - AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR                (165,198)       (238,617)       (226,250)
                                                                        
CONVERTIBLE UNSECURED LOAN STOCK                                         (49,337)        (49,291)        (49,318)
PROVISIONS FOR LIABILITIES AND CHARGES                         11        (12,668)        (11,504)        (12,306)
NET ASSETS                                                                376,426         447,846         474,438
CAPITAL AND RESERVES
Called up share capital                                                    60,861          60,543          60,850
Share premium account                                          12         151,418         150,297         151,392
Revaluation reserve                                            12         129,442         146,412         168,449
Other reserves                                                 12              51              51              51
Profit and loss account                                        12          16,354          74,176          76,298
SHAREHOLDERS' FUNDS                                                       358,126         431,479         457,040
Minority interests                                                         18,300          16,367          17,398
TOTAL CAPITAL EMPLOYED                                                    376,426         447,846         474,438

NET ASSETS PER SHARE - BASIC                                    8          367.8p          356.3p          375.5p
- DILUTED                                                       8          361.1p          350.1p          367.0p
ADJUSTED NET ASSETS PER SHARE - BASIC                           8          373.6p          360.3p          379.9p
- DILUTED                                                       8          366.1p          353.6p          370.9p





Group Statement of Total Recognised Gains and Losses

                       Six months ended 31 December 2001


                                                              Six months to     Six months to          Year to
                                                                  31 Dec 01         31 Dec 00        30 Jun 01
                                                                (unaudited)       (unaudited)        (audited)

                                                                                   (restated)       (restated)
                                                                      £'000             £'000            £'000
Profit for the financial period                                       5,428            10,018           15,316
Share of (deficit)/surplus arising on revaluation of
investment properties                                                                  20,862           43,828
                                                                   (18,376)
UITF28 adjustment to property valuation                               (526)             (157)          (1,086)
Tax on realisation of revaluation surpluses on investment
property disposals                                                                    (4,872)          (4,872)
                                                                   (10,573)
Total recognised gains and losses for the period                   (24,047)            25,851           53,186
Prior year adjustments (note 2)                                     (9,398)                 -                -
Total recognised gains and losses since last accounts              (33,445)            25,851           53,186




                   Note of Historical Cost Profits and Losses

                       Six months ended 31 December 2001
                                                            Six months to    Six months to      Year to
                                                                31 Dec 01        31 Dec 00    30 Jun 01
                                                              (unaudited)      (unaudited)    (audited)

                                                                    £'000       (restated)   (restated)
                                                                                     £'000        £'000
Profit on ordinary activities before taxation                       9,593           14,578       22,608
Realisation of property revaluation surpluses in prior             20,105           19,333       19,333
periods
Historical cost profit on ordinary activities before               29,698           33,911       41,941
taxation
Historical cost (loss)/profit retained after tax, minority       (59,944)           22,117       24,239
interests and dividends
                                                                 





               Reconciliation of Movements in Shareholders' Funds

                       Six months ended 31 December 2001

                                                          Six months to         Six months to          Year to
                                                          31 Dec 01                 31 Dec 00        30 Jun 01
                                                          (unaudited)             (unaudited)        (audited)

                                                                                   (restated)       (restated)
                                                                      £'000             £'000            £'000
Total recognised gains and losses for the period                   (24,047)            25,851           53,186
Dividends                                                          (74,904)           (2,362)          (5,538)
Issue of shares                                                          37                88            1,490
(Decrease)/increase in total capital employed                      (98,914)            23,577           49,138

                                                                   
Opening shareholders' funds (originally £466.4m                     457,040           407,902          407,902
before prior year adjustment of £9.4m)
Closing shareholders' funds                                         358,126           431,479          457,040





                        Consolidated Cash Flow Statement

                       Six months ended 31 December 2001


                                                                    Six months to 31   Six months to     Year to
                                                                              Dec 01       31 Dec 00   30 Jun 01
                                                                         (unaudited)     (unaudited)   (audited)
                                                                                          (restated)  (restated)
                                                               Note                            £'000       £'000
                                                                               £'000
OPERATING ACTIVITIES
Net cash inflow before sales of and additions to trading                       4,776          20,815      45,922
properties
Net cash inflow from sales of and additions to trading                             -
properties                                                                                     5,537       5,637
NET CASH INFLOW FROM OPERATING ACTIVITIES                     13(a)            4,776          26,352      51,559
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received                                                                539             185         547
Interest paid                                                                (6,823)        (10,228)    (20,801)
NET CASH OUTFLOW FOR RETURNS ON INVESTMENTS AND SERVICING                    (6,284)        (10,043)    (20,254)
OF FINANCE                                                                                  
TAXATION
Corporation tax paid                                                         (3,885)           (180)     (4,018)
CAPITAL EXPENDITURE
Acquisition of investment properties                                        (47,958)        (54,518)    (69,380)
Disposals and other capital receipts                                         262,097          54,372      77,121
Purchase of other fixed assets                                                  (39)           (990)     (1,036)
NET CASH INFLOW/(OUTFLOW) FOR CAPITAL EXPENDITURE                            214,100         (1,136)       6,705
ACQUISITIONS AND DISPOSALS
Purchase of joint ventures                                                  (73,144)        (28,438)    (31,039)
NET CASH OUTFLOW FOR ACQUISITIONS AND DISPOSALS                             (73,144)        (28,438)    (31,039)
                                                                                            
EQUITY DIVIDENDS PAID                                                       (76,170)         (2,785)     (5,158)
CASH INFLOW/(OUTFLOW) BEFORE USE OF LIQUID RESOURCES AND
FINANCING                                                                     59,393        (16,230)     (2,205)
                                                                              
FINANCING
Issue of shares                                                                   37              88       1,490
(Decrease)/increase in debt                                   13(b)         (61,033)          19,556       7,216
NET (OUTFLOW)/INFLOW FROM FINANCING                                         (60,996)          19,644       8,706
(DECREASE)/INCREASE IN CASH IN THE PERIOD                     13(b)          (1,603)           3,414       6,501





                             Notes to the Accounts



1                     ABRIDGED ACCOUNTS



The results for the six months ended 31 December 2001 do not constitute full
statutory accounts within the meaning of Section 240 of the Companies Act 1985.



The Accounting Standards Board (ASB) has issued a non-mandatory statement '
Interim Reports', which seeks to codify best practice in the presentation of
interim results.  The Interim Results, which incorporate a revaluation of
investment properties as at 31 December 2001, have been prepared having regard
to the guidance in the ASB statement and on the basis of the accounting polices
set out in the Group's audited accounts for the year ended 30 June 2001 except
that in these interim results the Group has adopted the Urgent Issues Task Force
Abstract 28 'Operating Lease Incentives' (UITF28) and Financial Reporting
Standard 19 'Deferred Tax' (FRS19) and restated comparative figures accordingly.



UITF28 requires property companies to treat any incentive for lessees to enter
into lease agreements as a revenue cost and also to account for rental income
from the commencement and not, as was the Group's practice, the expiry date, of
any rent-free period.  The Group has, therefore, changed its accounting policy
for leases commencing on or after 1 July 2000.  The cost of all lease incentives
(such as rent-free periods or contributions to fitting out costs) is now offset
against the total rent due and the net rental income is then spread evenly over
the period from the start of the lease to the date of the next rent review or
the lease end date.



FRS19 requires that deferred tax is recognised in full in respect of
transactions or events that have taken place by the balance sheet date and which
could give the Group an obligation to pay more or less tax in the future.
However, the FRS requires that deferred tax is not recognised on revaluation
gains and losses where these are not taken to the profit and loss account unless
there is a contract for sale in place.  The Group's accounting policy had been
to account for deferred tax to the extent that liabilities or assets were
expected to be payable or receivable in the foreseeable future.  In accordance
with FRS19, the Group has now changed its policy to make full provision for
reversing timing differences, which, in the Group's case, arise primarily from
capital allowances and capitalised interest.  Following the sale of a property,
any deferred tax provisions not required will be released to the profit and loss
account.



The comparative figures for the financial year ended 30 June 2001 are not the
Group's statutory accounts for that financial year.  Those accounts have been
reported on by the Company's auditors and delivered to the Registrar of
Companies.  The report of the auditors was unqualified and did not contain a
statement under section 237 (2) or (3) of the Companies Act 1985.



The Interim Results for the six months ended 31 December 2001 were approved by
the directors on 27 February 2001.





2                     RESTATEMENT OF COMPARATIVES



The effects of adopting UITF28 (Operating Lease Incentives) and FRS19 (Deferred
Tax) for the current and comparative periods are as follows:


                                 Gross   Taxation     Profit     Earnings per   Share-holders'      Net assets per
                              property                 after    share (pence)            funds       share (pence)
                                income              taxation
                                 £'000      £'000      £'000  Basic   Diluted            £'000     Basic   Diluted
Year ended 30 June 2001
As previously reported          36,930    (5,737)    15,785   13.4      13.3          466,438     383.3     373.9
Effect of adopting UITF28        1,086      (326)       760    0.6       0.5             (326)     (0.3)     (0.3)
Effect of adopting FRS19             -    (1,679)    (1,679)  (1.4)     (1.2)          (9,072)     (7.5)     (6.6)
As restated                     38,016    (7,742)    14,866   12.6      12.6          457,040     375.5     367.0
Six months ended 31 December 2000
As previously reported          17,518    (3,999)    10,422    8.9       8.6          439,796     363.2     356.1
Effect of adopting UITF28          157       (47)       110    0.1       0.1              (47)     (0.1)        -
Effect of adopting FRS19             -      (877)      (877)  (0.7)     (0.7)          (8,270)     (6.8)     (6.0)
As restated                     17,675    (4,923)     9,655    8.3       8.0          431,479     356.3     350.1
Six months ended 31 December 2001
Without adoption of UITF28
and FRS19                       17,472    (3,248)     5,743    4.6       4.6          368,044     378.0     369.9
Effect of adopting UITF28          602      (181)       421    0.4       0.4             (484)     (0.5)     (0.4)
Effect of adopting FRS19             -      (362)      (362)  (0.3)     (0.3)          (9,434)     (9.7)     (8.4)
As reported                     18,074    (3,791)     5,802    4.7       4.7          358,126     367.8     361.1





3          NET OPERATING PROFIT FROM NEXUS ESTATES PLC


                                                            Six months to      Six months to          Year to
                                                                31 Dec 01          31 Dec 00        30 Jun 01
                                                              (unaudited)        (unaudited)        (audited)
                                                                    £'000              £'000            £'000
Gross operating income                                                  -             2,764            2,764
Operational overheads                                                   -            (1,926)          (1,926)
Gross operating profit                                                  -               838              838
Central overheads                                                       -              (245)            (245)
Operating profit                                                        -               593              593





4          PROFIT ON DISPOSAL OF INVESTMENT PROPERTIES

The profit on disposal of investment properties for the period ended 31 December
2001 comprises:



                                                                                     £'000
Aggregate consideration                                                           261,718
Less:  sales costs                                                                 (1,623)
Net proceeds                                                                      260,095
Less:  historical cost of properties                                             (177,080)
Historical cost profit                                                             83,015
Less:  revaluation surpluses in prior periods                                     (74,382)
                                                                                    8,633
Less: profit on retained interests                                                 (6,573)
                                                                                    2,060





5          GROUP NET INTEREST PAYABLE AND SIMILAR CHARGES


                                                          Six months to      Six months to           Year to
                                                              31 Dec 01          31 Dec 00         30 Jun 01
                                                            (unaudited)        (unaudited)         (audited)
                                                                  £'000              £'000             £'000
Amounts payable on bank loans and overdrafts                     5,071              9,419            17,498
5.75% Convertible Unsecured Loan Stock 2013                      1,477              1,469             2,923
Less:  interest capitalised                                          -             (1,314)           (2,378)
                                                                 6,548              9,574            18,043
Interest receivable                                               (543)              (175)             (536)
                                                                 6,005              9,399            17,507



6          TAXATION
                                                             Six months to   Six months to           Year to
                                                                 31 Dec 01       31 Dec 00
                                                               (unaudited)     (unaudited)          30 Jun 01
                                                                                                    (audited)
                                                                                (restated)
                                                                                                   (restated)
                                                                     £'000           £'000
                                                                                                        £'000
Taxation based on profit for the period:
Corporation tax at 30% (2000 - 30%)                                  2,126           1,303              2,940
Deferred tax                                                           362             877              1,679
Tax on operating activities                                          2,488           2,180              4,619
Tax arising on capital items                                         1,255           2,629              2,815
Group tax charge                                                     3,743           4,809              7,434
Share of tax in joint ventures                                          48             114                308
                                                                     3,791           4,923              7,742





7          DIVIDENDS

A special dividend of 60p per share was paid on 16 November 2001.  A second
interim dividend of 1.95p (2000 interim: 1.95p) net per share is payable on 9
April 2002 to shareholders on the register at 15 March 2002 based on 97,377,866
ordinary shares of 62.5p each (2000 interim: 121,085,930 ordinary shares of 50p
each) in issue.





8          EARNINGS/NET ASSETS PER SHARE



Earnings per share

The weighted average number of shares in issue during the period was 115,091,705
(2000: 121,060,413) and the earnings attributable to ordinary shares was
£5,428,000 (2000: restated £10,018,000).



Adjusted earnings per share are calculated on the same weighted average number
of shares but exclude the post-tax profit arising on sales of trading and
investment properties of £805,000 (2000: £2,246,000) and the disposal of shares
in Nexus Estates PLC of £nil (2000: £4,550,000) and the deferred taxation charge
of £362,000 (2000: £483,000) in respect of capital allowances arising on the
adoption of FRS19.  The deferred tax is excluded as the Group's experience is
that it is very unusual for capital allowances to be claimed back through
balancing charges on the disposal of a property.



Diluted earnings per share have been calculated for all periods adopting the
method set out in Financial Reporting Standard 14 - Earnings per Share.



In calculating diluted earnings per share at 31 December 2001, the weighted
average number of shares have been increased to 115,282,419 to take account of
the dilutive effect of share options.  The 5.75% Convertible Unsecured Loan
Stock 2013 ('CULS') do not dilute earnings and are therefore excluded from the
diluted earnings per share calculation.  The diluted earnings per share at 31
December 2000 reflect both the potential exercise of conversion rights relating
to the CULS and share options.  Earnings have been adjusted to £11,046,000
(restated) and the weighted average number of shares increased to 137,645,300.



Net assets per share

The number of shares in issue at 31 December 2001 was 97,377,866 (2000:
121,085,930) and the net assets attributable to shareholders at 31 December 2001
was £358,126,000 (2000: restated £431,479,000).



Adjusted net assets per share have been calculated on the same number of shares
but exclude the additional deferred tax liability in respect of capital
allowances of £5,673,000 (2000: £4,828,000) arising from the adoption of FRS19.
Adjusted net assets have been calculated on this basis as the Group's experience
is that deferred tax on capital allowances in relation to investment properties
is unlikely to crystallise in practice.



Diluted net assets per share, reflecting the potential exercise of conversion
rights relating to the CULS, were 361.1p as at 31 December 2001 (2000: restated
350.1p), based on net assets of £407,463,000 (2000: restated £480,770,000) and
shares in issue of 112,839,084 (2000: 137,340,117).



Diluted adjusted net assets per share, were 366.1p as at 31 December 2001 (2000:
353.6p), based on net assets of £413,136,000 (2000: restated £485,598,000) and
shares in issue of 112,839,084 (2000: 137,340,117).





9          FIXED ASSETS - INVESTMENT AND DEVELOPMENT PROPERTIES

Investment and development properties are stated on the basis of their open
market values as at 31 December 2001.  The valuation was carried out by DTZ
Debenham Tie Leung Limited, Chartered Surveyors ('DTZ'), acting as External
Valuers and in accordance with the Appraisal and Valuation Manual of the Royal
Institution of Chartered Surveyors.  The open market values are contained in the
DTZ report dated 18 February 2002.  Additions and disposals are recognised upon
unconditional exchange of contracts provided that completion takes place around
30 days thereafter.





10         JOINT VENTURES
                                                                                                       £'000
At 1 July 2001 at valuation                                                                           40,646
Net equity investments                                                                                73,144
Deficit on revaluation of investment properties                                                      (15,271)
Share of retained profit for the period                                                                  143
Share of net assets at 31 December 2001                                                               98,662



In August 2001 Benchmark sold for a total consideration of £249.5 million its
entire partnership interests in Benchmark (Jersey) No.1 LP to WEL Property
Limited Partnership ('WEL Partnership'), a Jersey Limited Partnership in which
The West End of London Property Unit Trust ('WELPUT'), a Jersey unit trust, has
a 50.1% interest.  Benchmark has retained a 49.9% interest in WEL Partnership
and has a 46% interest in WELPUT.



Under the terms of the WEL Partnership deed and the WELPUT Trust deed, Benchmark
does not have the right to control either entity.  However, in view of
Benchmark's effective joint control it has accounted for its WELPUT interests as
a joint venture in accordance with Financial Reporting Standard 9 - Associates
and Joint Ventures.  During 2002, Benchmark will be seeking to reduce its
effective interest below 50%.



During the period the Group established a 49.9% partnership interest in
Benchmark JER 2 Limited Partnership, which operates in the United Kingdom.



Summarised aggregated financial statements:


                                         Benchmark JER Benchmark JER           WEL
                                             1 Limited     2 Limited   Partnership
                                           Partnership   Partnership    and WELPUT

                                                 £'000         £'000         £'000       Total        Total

                                                                                          2001         2000

                                                                                         £'000        £'000
Percentage interest at period end                50.0%         49.9%        72.9%*
Profit and loss accounts - Group Share

Period from 1 July to 31 December 2001
Operating profit                                4,002              -        4,072       8,074        1,660
Net interest payable                           (3,811)             -       (4,007)     (7,818)      (1,279)
Profit on ordinary activities before              191              -           65         256          381
taxation
Taxation                                          (48)             -            -         (48)        (114)
Profit for the period                             143              -           65         208          267



  Balance sheets - Group Share

  As at 31 December 2001
                                                                                           Total        Total

                                                                                            2001         2000

                                                    £'000        £'000        £'000        £'000        £'000
Investment properties at valuation               124,310       28,693      206,218      359,221      114,665
Trading properties                                14,238            -            -       14,238       18,696
Cash                                               1,966            -        6,264        8,230        2,182
Other current assets                                 192            -          964        1,156        1,317
Current liabilities                               (4,100)     (27,325)      (7,288)     (38,713)      (4,328)
Borrowings                                      (100,424)           -     (145,046)    (245,470)    (100,178)
                                                  36,182        1,368       61,112       98,662       32,354



*The Group has a 49.9% interest in WEL Partnership and a 46% interest in WELPUT
which has a 50.1% interest in WEL Partnership giving an effective economic
interest of 72.9%.



The investment properties are stated on the basis of their open market values as
at 31 December 2001.  The valuations were carried out by DTZ Debenham Tie Leung
Limited, CB Hillier Parker Limited and Atis Real Weatheralls Limited, Chartered
Surveyors, acting as External Valuers and in accordance with the Appraisal and
Valuation Manual of the Royal Institution of Chartered Surveyors.



All joint venture borrowings are non-recourse to the Group.



11         PROVISIONS FOR LIABILITIES AND CHARGES

Provisions for liabilities and charges comprise deferred tax in respect of short
term timing differences.



12         RESERVES
                                                                                        Profit

                                                Share    Revaluation        Other     and loss
                                              premium        reserve     reserves      account        Total
                                                                                         £'000
                                                £'000          £'000        £'000                     £'000
At 1 July 2001                                151,392       169,535            51      84,610      405,588
Prior year adjustments (UITF28 & FRS19)             -        (1,086)            -      (8,312)      (9,398)
At 1 July 2001 as restated                    151,392       168,449            51      76,298      396,190
Premium on shares issued                           26              -            -           -           26
Share of deficit arising on revaluation
of investment properties                            -       (18,376)            -           -      (18,376)


Revaluation surpluses realised on
investment property disposals                       -       (20,105)            -      20,105            -


UITF28 adjustment to property valuation             -          (526)            -           -        (526)
Tax on realisation of revaluation
surpluses on investment property                    -             -             -     (10,573)     (10,573)
disposals


Profit for the financial period                     -             -             -       5,428        5,428
Dividends                                           -             -             -     (74,904)     (74,904)
At 31 December 2001                           151,418       129,442            51      16,354      297,265



13         NOTES TO THE CONSOLIDATED CASHFLOW STATEMENT



(a)        Reconciliation of operating profit to operating cash flows
                                                          Six months to      Six months to           Year to
                                                              31 Dec 01          31 Dec 00         30 Jun 01
                                                            (unaudited)        (unaudited)       (audited)
                                                                                (restated)        (restated)
                                                                                     £'000             £'000
                                                                 £'000
Operating profit                                                13,282             14,622            29,487
Depreciation                                                        35                464               497
Profit on sale of trading properties                                 -               (645)             (745)
Amortisation of leasehold properties                               454                400               823
(Increase)/decrease in debtors                                  (6,231)             5,598            14,991
Increase in investments                                              -               (166)             (166)
(Decrease)/increase in creditors                                (2,764)               542             1,035
Net cash inflow before sales of and additions to
trading properties                                               4,776             20,815            45,922
                                                                 

Net cash inflow from sales of and additions to
trading properties                                                   -              5,537             5,637
                                                                     

Net cash inflow from operating activities                        4,776             26,352            51,559




(b)        Reconciliation of net cash flow to movement in net debt
                                                            Six months to      Six months to         Year to
                                                                31 Dec 01          31 Dec 00       30 Jun 01
                                                              (unaudited)        (unaudited)       (audited)
                                                                    £'000              £'000           £'000
(Decrease)/increase in cash in the period                         (1,603)             3,414           6,501
Cash outflow/(inflow) from decrease/(increase) in debt            61,033            (19,556)         (7,216)
Movement in net debt                                              59,430            (16,142)           (715)
Net debt at start of period                                     (267,750)          (267,035)       (267,035)
Net debt at end of period                                       (208,320)          (283,177)       (267,750)



(c)        Analysis of net debt
                                                                  As at                                As at
                                                              31 Dec 01           Cashflow         30 Jun 01
                                                            (unaudited)        (unaudited)         (audited)
                                                                  £'000              £'000             £'000
Cash at bank and in hand                                         6,215             (1,603)            7,818
Debt due after more than one year                             (214,535)            61,033          (275,568)
Net debt                                                      (208,320)            59,430          (267,750)



14         REPORT CIRCULATION

Copies of the interim report are available from the Company's Registered Office
at 25 Sackville Street, London, W1S  3EL.





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