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Benchmark Group PLC (BMK)

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Thursday 27 February, 2003

Benchmark Group PLC

Interim Results

Benchmark Group PLC
27 February 2003

                                INTERIM RESULTS

                   For the Six Months Ended 31 December 2002



Benchmark Group PLC ('Benchmark'), the specialist Central London property
investment and development company, announces results for the six months ended
31 December 2002.





Financial Highlights for the six months to 31 December 2002



  • Pre-tax profits: £3.6 million (2001: £9.6 million)



  • Adjusted earnings per share: 3.6 pence (2001: 4.3 pence)



  • Adjusted net assets of £313.6 million (2001: £363.8 million)



  • Adjusted diluted net assets per share: 321.5 pence (2001: 366.1 pence)



  • Interim dividend per share of 1.95 pence (2001: 1.95 pence)



  • Net gearing excluding share of joint venture net debt of 81.5% compared to
    65.4% as at 30 June 2002





Corporate Highlights



  • Total annualised net rental income is £52.9 million compared with £53.0
    million as at 17 September 2002



  • Current vacancy level of 4.1% in terms of rental value



  • Total value of properties under management down 8.7% to £1,084.6 million
    from £1,188.2 million



  • Effective interest in WELPUT reduced to 55.3% from 73.0% previously





Tan Sri Quek Leng Chan, Chairman of Benchmark, said: 'The condition of the
rental market has caused the value of our own portfolio to decline over the last
6 months, particularly where we have pending or existing vacancies.  In stronger
markets these would provide the opportunities for value enhancement but in more
difficult times the values are heavily discounted by valuers.



'These are challenging times for a London property owner and, as a Central
London specialist, we are concentrating our efforts on leasing vacant space,
where we have recently seen more tenant interest.



'As long-term investors and developers, we are beginning to see interesting
opportunities in our specialist areas from which we can build the portfolio for
the future so as to be a beneficiary of the West End recovery when it arrives.'



For further information:
Benchmark Group PLC                                 Tavistock Communications Ltd
Nigel Kempner, Chief Executive                      Jeremy Carey / Molly Dover
Tel: 020 7659 0500                                  Tel: 020 7600 2288
www.benchmarkgroup.plc.uk
www.benchmarkdirect.com



The Company will make a presentation to analysts at 10.00 am on Thursday, 27
February 2003 at 1 Cornhill, EC3.  A copy of the slide presentation is available
on www.benchmarkgroup.plc.uk.





CHAIRMAN'S STATEMENT



The demand for Central London office investments that benefit from leases to
good covenants on unexpired terms of at least 15 years has remained strong,
enhanced by the lowest interest rates we have seen for many years.  Returns from
property have remained attractive compared with many other asset classes.
According to independent market commentary, Central London has seen property
investment activity during 2002 of around £7.5 billion, significantly in excess
of the £6.8 billion recorded in 2001.



The West End market does however continue to be affected by weak tenant demand
for offices, though not as severely as the City.  The encouraging factor is that
little new office development is taking place in the West End, where 88% of our
assets by value are located, and leasing transactions continue to be completed.



Vacancy levels in the West End have remained at around 10% in the last 6 months
but tenant controlled space probably represents about 75% of all available
offices.  Incentives to tenants have been increasing and rental levels for good
modern offices in St James's and Mayfair have come down by around 20% during the
last 12 months.



The condition of the rental market has caused the value of our own portfolio to
decline over the last 6 months, particularly where we have pending or existing
vacancies.  In stronger markets these would provide the opportunities for value
enhancement but in more difficult times the values are heavily discounted by
valuers.





NET ASSET VALUE



The adjusted diluted net asset value per share as at 31 December 2002 was 321.5p
compared with 366.1p as at 31 December 2001, a reduction of 12.2% over the year.
Compared with 382.4p as at 30 June 2002, this represents a reduction of 15.9%.



DTZ Debenham Tie Leung Limited valued our investment properties, including those
held in our joint venture with JER Partners, on the basis of open market value
as at 31 December 2002.  CB Hillier Parker Limited and Atis Real Weatheralls
Limited valued the properties in the West End of London Property Unit Trust ('
WELPUT').  The value of the properties held at 31 December 2002 reduced by £76.9
million, a decline of 8.4% compared to the valuation as at 30 June 2002.  This
represents a decline of £59.4 million (6.6%) over the 31 December 2001
valuation.



It is interesting that in the second half of 2002, 8.9% of the reductions in
value were caused by falls in rents and estimated rents.





RESULTS



Pre-tax profits for the six months to 31 December 2002 were £3.6 million (2001:
£9.6 million).  This reduction of 62.5% over the same period last year resulted
from a combination of a lower level of disposals and losses from disposals and
provision against investments totalling £1.6 million (2001: £2.1 million
profit).



Net rental income for the period, including our share of joint ventures,
increased by 9.6% to £26.3 million (2001: £24 million).



Including our sales and acquisitions since 31 December 2002, annualised net
rental income, including our share of joint ventures is £52.9 million per annum,
compared with £53.0 million per annum as at 17 September 2002.



Our net borrowings at 31 December 2002 were £251.4 million resulting in a
gearing of 81.5% compared with 65.4% as at 30 June 2002.  The increase was
largely the result of the decline in property values that reduced shareholders'
funds to £308.5 million from £377.8 million as at 30 June 2002.  If our share of
the non-recourse joint venture borrowings was included, the gearing would be
159.4% (30 June 2002: 129.6%).





DIVIDEND



The Directors have declared an interim dividend of 1.95p (2001: 1.95p) which
will be paid on 9 April 2003 to shareholders on the register at 14 March 2003.





ACQUISITIONS AND DISPOSALS



There were no acquisitions by Benchmark during the six month period to 31
December 2002.  During the same period, disposals amounted to £29.0 million
which included the freehold of 147/148 Leadenhall Street, EC3, the long
leasehold of 65/68 South Molton Street, W1, our 50% share of 100 Fetter Lane,
EC4 and 4 flats at The Halkins, Belgravia, SW1.  The book loss on the disposals
totalled £1.5 million.





THE WEST END OF LONDON PROPERTY UNIT TRUST ('WELPUT')



In September 2002, the WEL Property Limited Partnership ('WEL LP') contracted to
acquire the freehold of Invensys House, Carlisle Place, SW1 from the trustee of
the Schroder Exempt Property Unit Trust ('SEPUT') for £26.1 million.  The
acquisition was completed on 9 January 2003 and SEPUT subscribed for £15.1
million of units in WELPUT.  Also in January, WEL LP purchased the long
leasehold of Regent Arcade House, Regent Street, W1 for £29.0 million from
Allied Dunbar Assurance PLC, who subscribed for £10.5 million of units in
WELPUT.  In January 2003 WEL LP sold the freehold of 24/28 Sackville Street, W1
for £22.95 million.



Following these transactions, Benchmark's effective interest in WELPUT has been
reduced from 73.0% to 55.3%.  This may rise to 59.1% if certain units in WELPUT
are redeemed by Allied Dunbar in December 2003.





MANAGEMENT INITIATIVES



Our direct office leasing initiative, Benchmark Direct, set up in 2002, has been
successful in a difficult market and since 30 June 2002 has been involved in
lettings of around 70,000 sq ft in our portfolio under management, generating an
annualised total income of £2.9 million.   This is equivalent to 4.8% of our
share of the annualised rent roll.



The current vacancy level in our portfolio is 4.1% in terms of rental value.
This may increase to 11.8% later this year when our current refurbishment
schemes become available for letting.



To improve further the overall operations of the Company, we have set up an
Executive Committee to assist the Chief Executive in implementing the corporate
strategy set by the Board.  The Chief Executive, Nigel Kempner, will chair the
Executive Committee and the other members are K C Wong, the Managing Director of
Finance, and Paul Connellan, the Head of Property.





CONCLUSION



These are challenging times for a London property owner and, as a Central London
specialist, we are concentrating our efforts on leasing vacant space, where we
have recently seen more tenant interest.



As long-term investors and developers, we are beginning to see interesting
opportunities in our specialist areas from which we can build the portfolio for
the future so as to be a beneficiary of the West End recovery when it arrives.





Tan Sri Quek Leng Chan
Chairman
26 February 2003




                              Financial Highlights

                       Six months ended 31 December 2002


                                              31 Dec 02          30 June 02                   %
                                            (unaudited)           (audited)
Total properties owned including                  864.5               942.5                -8.3
share of joint ventures
(£ million)*

Properties under management (£                  1,084.6             1,188.2                -8.7
million)*

Adjusted net assets (£ million) +                 313.6               382.4               -18.0

Adjusted net assets per share -                   321.5               382.4               -15.9
diluted (pence) +

Net gearing excluding share of                     81.5                65.4                24.6
joint venture net debt (%)




                                    Six months to             Six months to                   %
                                               31 Dec 02          31 Dec 01
                                             (unaudited)        (unaudited)
Net rental income including share
of joint ventures
(£ million)                                         26.3               24.0                 9.6

Profit before tax (£ million)                        3.6                9.6               -62.5

Profit after tax (£ million)                         2.0                5.8               -65.5

Adjusted earnings per share (pence)                  3.6                4.3               -16.3

Dividend per share (pence)                          1.95               1.95                   -

Special dividend per share (pence)                     -               60.0                   -




*   See note 9 for details

+    See note 8 for details



                      Consolidated Profit and Loss Account

                       Six months ended 31 December 2002


                                                                     Six months to   Six months to        Year to
                                                                         31 Dec 02       31 Dec 01      30 Jun 02
                                                            Note       (unaudited)     (unaudited)      (audited)
                                                                             £'000           £'000          £'000
GROSS RENTAL INCOME

Group and share of joint ventures                                          29,582          26,959         54,737
Less:  share of joint ventures                                            (11,016)         (8,885)       (19,375)
                                                                           18,566          18,074         35,362
NET RENTAL INCOME
Group and share of joint ventures                                          26,269          24,018         48,554
Less:  share of joint ventures                                            (10,385)         (8,637)       (18,523)
                                                               2           15,884          15,381         30,031
Administration expenses                                                    (2,526)         (2,099)        (5,968)
GROUP OPERATING PROFIT                                                     13,358          13,282         24,063
Share of operating profit in joint ventures                   10            9,097           8,074         17,801
TOTAL OPERATING PROFIT                                                     22,455          21,356         41,864
Profit on disposal of investment properties                    3              760           2,060          2,287
Share of loss on disposal of investment properties             3           (1,094)              -              -
  in joint ventures
Provision against investments                                  4           (1,260)              -              -
PROFIT ON ORDINARY ACTIVITIES BEFORE
INTEREST                                                                   20,861          23,416         44,151
Group net interest payable and similar charges                 5           (8,199)         (6,005)       (13,914)
Share of net interest payable in joint ventures               10           (9,089)         (7,818)       (16,674)
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION                                                                    3,573           9,593         13,563
Taxation                                                       6           (1,605)         (3,791)        (1,734)
PROFIT ON ORDINARY ACTIVITIES AFTER
TAXATION                                                                    1,968           5,802         11,829
Minority interests                                                           (520)           (374)          (107)
PROFIT FOR THE FINANCIAL PERIOD                                             1,448           5,428         11,722
Dividends                                                      7           (1,899)        (74,904)       (77,925)
RETAINED LOSS FOR THE PERIOD                                                 (451)        (69,476)       (66,203)
EARNINGS PER SHARE  - BASIC                                    8              1.5p            4.7p          11.0p
   - DILUTED                                                   8              1.5p            4.7p          11.0p
ADJUSTED EARNINGS PER SHARE                                    8              3.6p            4.3p           9.6p


All income was derived from within the United Kingdom from continuing
operations.





                           Consolidated Balance Sheet

                             As at 31 December 2002


                                                                             As at           As at         As at
                                                                         31 Dec 02       31 Dec 01     30 Jun 02
                                                                       (unaudited)     (unaudited)     (audited)
                                                            Note             £'000           £'000         £'000
FIXED ASSETS

Investment and development properties                          9          508,682         522,241       571,112
Joint ventures
Share of gross assets                                                     367,736         382,845       382,361
Share of gross liabilities                                               (282,507)       (284,183)     (278,471)
                                                              10           85,229          98,662       103,890
Investments                                                                   104           3,213         3,213
Other tangible assets                                                         582             276           255
                                                                          594,597         624,392       678,470
CURRENT ASSETS
Debtors                                                                    18,090          13,305        14,902
Investments                                                                   916             916           916
Cash at bank and in hand                                                    6,501           6,215         5,172
                                                                           25,507          20,436        20,990
CREDITORS - AMOUNTS FALLING DUE
WITHIN ONE YEAR                                                           (31,660)        (41,199)      (39,866)

NET CURRENT LIABILITIES                                                    (6,153)        (20,763)      (18,876)

TOTAL ASSETS LESS CURRENT LIABILITIES                                     588,444         603,629       659,594

CREDITORS - AMOUNTS FALLING DUE
AFTER MORE THAN ONE YEAR                                                 (208,539)       (165,198)     (202,734)

CONVERTIBLE UNSECURED LOAN STOCK                                          (49,392)        (49,337)      (49,365)

PROVISIONS FOR LIABILITIES AND
CHARGES                                                       11          (10,817)        (12,668)      (10,225)

NET ASSETS                                                                319,696         376,426       397,270

CAPITAL AND RESERVES
Called up share capital                                                    60,906          60,861        60,906
Share premium account                                         12          151,490         151,418       151,490
Revaluation reserve                                           12           74,907         129,442       145,769
Other reserves                                                12               51              51            51
Profit and loss account                                       12           21,117          16,354        19,627

SHAREHOLDERS' FUNDS                                                       308,471         358,126       377,843
Minority interests                                                         11,225          18,300        19,427

TOTAL CAPITAL EMPLOYED                                                    319,696         376,426       397,270

NET ASSETS PER SHARE
- BASIC                                                        8            316.5p          367.8p        387.7p
- DILUTED                                                      8            316.5p          361.1p        378.4p

ADJUSTED NET ASSETS PER SHARE
- BASIC                                                        8            321.8p          373.6p        392.4p
- DILUTED                                                      8            321.5p          366.1p        382.4p





          Consolidated Statement of Total Recognised Gains and Losses

                       Six months ended 31 December 2002


                                                          Six months to         Six months to          Year to
                                                          31 Dec 02                 31 Dec 01        30 Jun 02
                                                          (unaudited)             (unaudited)        (audited)
                                                                      £'000             £'000            £'000
Profit for the financial period                                      1,448             5,428           11,722
Share of deficit arising on revaluation of investment
  properties                                                       (68,370)          (25,475)          (7,968)
Unrealised profit on sale to WELPUT                                      -             6,573            5,393
Tax on realisation of revaluation surpluses on
  investment property disposals                                       (551)          (10,573)         (10,573)
Total recognised gains and losses for the period                   (67,473)          (24,047)          (1,426)







                   Note of Historical Cost Profits and Losses

                       Six months ended 31 December 2002


                                                            Six months to        Six months to          Year to
                                                            31 Dec 02                31 Dec 01        30 Jun 02
                                                            (unaudited)            (unaudited)        (audited)
                                                                       £'000             £'000            £'000
Profit on ordinary activities before taxation                          3,573            9,593           13,563
Realisation of property revaluation surpluses in prior                 2,492           20,105           20,105
periods
Historical cost profit on ordinary activities before                   6,065           29,698           33,668
taxation
Historical cost profit/(loss) retained after tax, minority
  interests and dividends                                              1,490          (59,944)         (56,671)





               Reconciliation of Movements in Shareholders' Funds

                       Six months ended 31 December 2002


                                                          Six months to         Six months to          Year to
                                                          31 Dec 02                 31 Dec 01        30 Jun 02
                                                          (unaudited)             (unaudited)        (audited)
                                                                      £'000             £'000            £'000
Total recognised gains and losses for the period                   (67,473)          (24,047)          (1,426)
Dividends                                                           (1,899)          (74,904)         (77,925)
Issue of shares                                                          -                37             154
Decrease in total capital employed                                 (69,372)          (98,914)         (79,197)
Opening shareholders' funds                                        377,843           457,040          457,040
Closing shareholders' funds                                        308,471           358,126          377,843





                        Consolidated Cash Flow Statement

                       Six months ended 31 December 2002


                                                                       Six months to   Six months to      Year to
                                                                           31 Dec 02       31 Dec 01    30 Jun 02
                                                                Note     (unaudited)     (unaudited)    (audited)
                                                                               £'000           £'000        £'000
NET CASH INFLOW FROM OPERATING ACTIVITIES                      13(a)          9,939           4,776       15,315
DIVIDENDS FROM JOINT VENTURES AND ASSOCIATES                                    184               -          341
RETURNS ON INVESTMENTS AND SERVICING OF
FINANCE
Interest received                                                               161             539          785
Interest paid                                                                (8,106)         (6,823)     (15,230)

NET CASH OUTFLOW FOR RETURNS ON INVESTMENTS AND SERVICING                    (7,945)         (6,284)     (14,445)
OF FINANCE

TAXATION
Corporation tax paid                                                         (5,868)         (3,885)      (7,301)

CAPITAL EXPENDITURE
Property additions and other capital expenditure                            (10,782)        (47,958)     (83,629)
Disposals and other capital receipts                                         19,292         262,097      263,179
Purchase of other fixed assets                                                 (413)            (39)         (65)
Repayment of loan notes by associate                                          1,848               -            -

NET CASH INFLOW FOR CAPITAL EXPENDITURE                                       9,945         214,100      179,485

ACQUISITIONS AND DISPOSALS
Investment in joint ventures                                                 (7,738)        (73,144)     (74,658)

NET CASH OUTFLOW FOR ACQUISITIONS AND DISPOSALS                              (7,738)        (73,144)     (74,658)

EQUITY DIVIDENDS PAID                                                        (3,020)        (76,170)     (78,068)

CASH (OUTFLOW)/INFLOW BEFORE USE OF LIQUID
RESOURCES AND FINANCING                                                      (4,503)         59,393       20,669

FINANCING
Issue of shares                                                                   -              37          154
Increase/(decrease) in debt                                    13(b)          5,832         (61,033)     (23,469)

NET INFLOW/(OUTFLOW) FROM FINANCING                                           5,832         (60,996)     (23,315)

INCREASE/(DECREASE) IN CASH IN THE PERIOD                      13(b)          1,329          (1,603)      (2,646)





                             Notes to the Accounts



1.      ABRIDGED ACCOUNTS



The results for the six months ended 31 December 2002 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 2002, have been prepared having regard
to the guidance in the ASB statement and on the basis of the accounting policies
set out in the Group's audited accounts for the year ended 30 June 2002.



The comparative figures for the financial year ended 30 June 2002 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 2002 were approved by
the directors on 26 February 2003.



2.      NET RENTAL INCOME


                                                                      Six months     Six months           Year
                                                                    to 31 Dec 02   to 31 Dec 01   to 30 Jun 02
                                                                     (unaudited)    (unaudited)      (audited)
                                                                           £'000          £'000          £'000
Group gross rental income                                                18,566         18,074         35,362
Ground rents                                                             (1,067)        (1,093)        (2,230)
Irrecoverable property costs                                             (1,165)        (1,146)        (2,227)
Amortisation of leasehold properties                                       (450)          (454)          (874)
Net rental income                                                        15,884         15,381         30,031





3.      PROFIT/(LOSS) ON DISPOSAL OF INVESTMENT PROPERTIES


                                                           Six months to    Six months to          Year to
                                                               31 Dec 02        31 Dec 01        30 Jun 02
                                                             (unaudited)      (unaudited)        (audited)
                                                                   £'000            £'000            £'000

Aggregate consideration                                          29,046          261,718          262,731
Less:  sales costs                                                 (373)          (1,623)          (1,551)

Net proceeds                                                     28,673          260,095          261,180
Less:  historical cost of properties                            (27,715)        (177,080)        (179,118)

Historical cost profit                                              958           83,015           82,062
Less:  revaluation surpluses in prior periods                    (2,492)         (74,382)         (74,382)
                                                                 (1,534)           8,633            7,680
Add: write back of excess accruals                                1,200                -                -
Less: profit on retained interests                                    -           (6,573)          (5,393)
                                                                   (334)           2,060            2,287
Attributable to:
Group                                                               760            2,060            2,287
Share of joint ventures                                          (1,094)               -                -
                                                                   (334)           2,060            2,287





4.      PROVISION AGAINST INVESTMENTS



Provision has been made against investments to reflect the Directors' estimate
of current values.



5.      GROUP NET INTEREST PAYABLE AND SIMILAR CHARGES


                                                          Six months to      Six months to           Year to
                                                              31 Dec 02          31 Dec 01         30 Jun 02
                                                            (unaudited)        (unaudited)         (audited)
                                                                  £'000              £'000             £'000
Amounts payable on bank loans and overdrafts                     6,894              5,071            11,788
5.75% Convertible Unsecured Loan Stock 2013                      1,480              1,477             2,930
                                                                 8,374              6,548            14,718
Interest receivable                                               (175)              (543)             (804)
                                                                 8,199              6,005            13,914



6.      TAXATION
                                                             Six months to   Six months to            Year to
                                                                 31 Dec 02       31 Dec 01          30 Jun 02
                                                               (unaudited)     (unaudited)          (audited)
                                                                     £'000           £'000              £'000
Taxation based on profit for the period:
Corporation tax at 30% (2001 - 30%)                                 1,232            2,126             2,272
Tax arising on capital items                                         (135)           1,255             1,512
Prior year over-provision                                            (140)               -                 -
                                                                      957            3,381             3,784
Deferred taxation on revenue profit                                   592              362             1,325
Release of deferred taxation                                            -                -            (3,406)


Group tax charge                                                    1,549            3,743             1,703
Share of tax in joint ventures                                         56               48                31
                                                                    1,605            3,791             1,734



Factors affecting the tax charge for the period

The tax assessed for the period is lower than the standard rate of corporation
tax in the UK of 30% (2001 - 30%).  The differences are explained below:


                                                                 Six months to    Six months to         Year to
                                                                     31 Dec 02        31 Dec 01       30 Jun 02
                                                                   (unaudited)      (unaudited)       (audited)
                                                                         £'000           £'000            £'000
Profit on ordinary activities before taxation                           3,573           9,593           13,563
Profit on ordinary activities multiplied by the standard
  rate of corporation tax at 30%                                        1,072           2,878            4,069
Capital allowances                                                       (694)           (362)          (1,567)
(Reduced)/additional tax on property sales                                (35)            637              826
Expenses disallowed                                                       810             276              487
Prior year over-provision                                                (140)              -                -
Share of tax from joint ventures                                          (56)            (48)             (31)
Tax on profit on ordinary activities                                      957           3,381            3,784



7.      DIVIDENDS

An interim dividend of 1.95p (2001: 1.95p) per share is payable on 9 April 2003
to shareholders on the register at 14 March 2003 based on 97,450,278 ordinary
shares of 62.5p each (2001 interim: 97,377,866) in issue.



8.      EARNINGS/NET ASSETS PER SHARE

Earnings per share

The weighted average number of shares in issue during the period was 97,450,246
(2001: 115,091,705) and the earnings attributable to ordinary shares were
£1,448,000 (2001: £5,428,000).



Adjusted earnings per share are calculated on the same weighted average number
of shares but exclude the post-tax loss arising on sales of trading and
investment properties and the provision against investments totalling £1,459,000
(2001: profit £805,000) and the deferred taxation charge of £592,000 (2001:
£362,000) 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 has been calculated for all periods adopting the
method set out in Financial Reporting Standard 14 - Earnings per Share.



In calculating diluted earnings per share, the weighted average number of shares
has been increased to 97,567,859 (2001: 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.



Net assets per share

The number of shares in issue at 31 December 2002 was 97,450,278 (2001:
97,377,866) and the net assets attributable to shareholders at 31 December 2002
were £308,471,000 (2001: £358,126,000).



Adjusted net assets per share has been calculated on the same number of shares
but excludes the additional deferred tax liability in respect of capital
allowances of £5,123,000 (2001: £5,673,000) and £4,531,000 as at 30 June 2002
arising from the adoption of FRS19.  Adjusted net assets has 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.
Accordingly, the adjusted net assets as at 31 December 2002 was £313,594,000
(2001: £363,799,000) and as at 30 June 2002 was £382,374,000.



Diluted net assets per share, reflecting the potential exercise of conversion
rights relating to the CULS, was 361.1p as at 31 December 2001 based on net
assets of £407,463,000 and shares in issue of 112,839,084.  Net assets per share
as at 31 December 2002 was not diluted by the potential exercise of conversion
rights relating to the CULS.



Diluted adjusted net assets per share was 321.5p as at 31 December 2002 (2001:
366.1p), based on net assets of £362,986,000 (2001: £413,136,000) and shares in
issue of 112,911,457 (2001: 112,839,084).  Diluted adjusted net assets per share
was 382.4p as at 30 June 2002 based on net assets of £431,739,000 and shares in
issue of 112,911,458.



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 2002.  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 20 January 2003.  Additions and disposals are recognised upon
unconditional exchange of contracts provided that completion takes place around
30 days thereafter.





Analysis of property portfolio:
                                                                             Our             Under
                                                                           share        management

                                                                           £'000             £'000
100% owned                                                               508,682           508,682
BJER 1 & 2                                                               140,004           280,120
WELPUT                                                                   215,800           295,835
Total                                                                    864,486         1,084,637





10.  JOINT VENTURES
                                                                           £'000
At 1 July 2002 at valuation                                             103,890
Net equity investments                                                    7,738
Deficit on revaluation of investment properties                         (24,203)
Share of retained loss for the period                                    (2,196)
Share of net assets at 31 December 2002                                  85,229





Summarised aggregated financial statements:


                                                  Benchmark   Benchmark       WEL Property
                                                      JER 1       JER 2            Limited
                                                    Limited     Limited        Partnership      Total      Total
                                                Partnership Partnership         and WELPUT       2002       2001
                                                      £'000         £'000            £'000      £'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 2002


Operating profit                                     2,908           772            5,417      9,097      8,074
Loss on disposal of investment properties           (1,094)            -                -     (1,094)         -
Net interest payable                                (3,448)         (660)          (4,981)    (9,089)    (7,818)
Profit on ordinary activities before
  taxation                                          (1,634)           112             436     (1,086)       256
Taxation                                               (56)            -                -        (56)       (48)

(Loss)/profit for the period                        (1,690)          112              436     (1,142)       208





Balance sheets - Group Share

As at 31 December 2002
                                                                                            Total        Total
                                                                                             2002         2001
                                                      £'000       £'000        £'000        £'000        £'000
Investment properties at valuation                 105,717      27,862      215,800      349,379      359,221
Trading properties                                   6,425           -            -        6,425       14,238
Cash                                                 2,364         383        6,211        8,958        8,230
Other current assets                                   404         194        2,376        2,974        1,156
Current liabilities                                 (4,176)       (905)     (28,192)     (33,273)     (38,713)
Borrowings                                         (82,847)    (21,229)    (145,158)    (249,234)    (245,470)
                                                    27,887       6,305       51,037       85,229       98,662



*The Group has a 49.9% interest in WEL Property Limited Partnership ('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%.  Under the terms of
the WEL Partnership deed and the WELPUT Trust deed, Benchmark does not control
or 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.  In January 2003, Benchmark's effective interest reduced to 55.3% as a
result of the transactions referred to in note 14.



The investment properties are stated on the basis of their open market values as
at 31 December 2002.  The valuations were carried out by DTZ Debenham Tie Leung
Limited (BJER 1 & 2 portfolios), CB Hillier Parker Limited and Atis Real
Weatheralls Limited (WELPUT portfolio), 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
                                                   Share   Revaluation       Other      Profit and
                                                 premium       reserve    reserves    loss account        Total
                                                   £'000         £'000       £'000           £'000        £'000
At 1 July 2002                                   151,490      145,769           51         19,627      316,937
Share of deficit arising on revaluation of
  investment properties                                -      (68,370)           -              -      (68,370)
Revaluation surpluses realised on
  investment property disposals                        -       (2,492)           -          2,492            -
Tax on realisation of revaluation
surpluses
  on investment property disposals                     -            -            -           (551)        (551)
Profit for the financial period                        -            -            -          1,448        1,448
Dividends                                              -            -            -         (1,899)      (1,899)

At 31 December 2002                              151,490       74,907           51         21,117      247,565





13.  NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT



(a)        Reconciliation of operating profit to operating cash flows


                                                          Six months to      Six months to           Year to
                                                              31 Dec 02          31 Dec 01         30 Jun 02
                                                            (unaudited)        (unaudited)         (audited)
                                                                  £'000              £'000             £'000
Operating profit                                                13,358             13,282            24,063
Depreciation                                                        86                 35                82
Amortisation of leasehold properties                               450                454               874
Increase in debtors                                             (2,322)            (6,231)           (7,878)
Decrease in creditors                                           (1,633)            (2,764)           (1,826)

Net cash inflow from operating activities                        9,939              4,776            15,315



(b)        Reconciliation of net cash flow to movement in net debt
                                                             Six months to      Six months to         Year to
                                                                 31 Dec 02          31 Dec 01       30 Jun 02
                                                               (unaudited)        (unaudited)       (audited)
                                                                     £'000              £'000           £'000
Increase/(decrease) in cash in the period                           1,329             (1,603)         (2,646)
Cash (inflow)/outflow from (increase)/decrease in debt             (5,832)            61,033          23,469
Movement in net debt                                               (4,503)            59,430          20,823
Net debt at start of period                                      (246,927)          (267,750)       (267,750)

Net debt at end of period                                        (251,430)          (208,320)       (246,927)





(c)        Analysis of net debt
                                                                  As at                                As at
                                                              31 Dec 02          Cash flow         30 Jun 02
                                                            (unaudited)        (unaudited)         (audited)
                                                                  £'000              £'000             £'000
Cash at bank and in hand                                         6,501              1,329             5,172
Debt due after more than one year                             (257,931)            (5,832)         (252,099)

Net debt                                                      (251,430)            (4,503)         (246,927)





14.  POST BALANCE SHEET EVENTS



In September 2002, the WEL Property Limited Partnership ('WEL LP') entered into
contractual arrangements to acquire the freehold of Invensys House, Carlisle
Place, SW1 for £26.07 million from the Trustee of the Schroder Exempt Property
Unit Trust ('SEPUT').  The acquisition was completed on 9 January 2003 and SEPUT
subscribed for further units in WELPUT at a cost of £15.1 million.  In January
2003, WEL LP also purchased the long leasehold of Regent Arcade House, Regent
Street, W1 for £29.0 million from Allied Dunbar Assurance PLC and Allied Dunbar
subscribed for £10.5 million of units in WELPUT.  WEL LP also sold the freehold
of 24/28 Sackville Street, W1 for £22.95 million in January 2003.  Following
these transactions, Benchmark's effective interest in WELPUT and WEL Partnership
reduced to 55.3%.  This may rise to 59.1% if certain units in WELPUT, issued as
part of the Regent Arcade House transaction, are redeemed by 31 December 2003.




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