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Gander Properties (GPP)

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Friday 27 August, 1999

Gander Properties

Results to 30 June 1999

27 August 1999

                            Gander Properties PLC                             

            Preliminary Results for the Period Ended 30 June 1999             

Chairman's Statement

On 10 August 1999 the directors of Gander Properties PLC ('Gander') and Orb
Estates PLC ('Orb') announced the terms of a recommended proposal, pursuant to
which Orb will acquire the whole of the issued and to be issued ordinary share
capital of Gander by way of a scheme of arrangement under section 425 of the
Companies Act 1985.  The proposal offers for each Gander share 10p in cash and
a listed convertible loan note 2003 of 2p nominal value in Orb. 
In the opinion of the board, the opportunities for adding value to the assets
of the group are now limited and it would therefore be in the best interests
of shareholders for the value that has already been added to be realised.

The board has reached this conclusion for a number of reasons. First, the
development and refurbishment of our property portfolio has now nearly been
completed. Since January 1994 the group has raised £30.1 million from
shareholders and £50 million in bank borrowings to fund development of its
high quality property portfolio, which was valued by FPD Savills Limited for
the balance sheet at 30 June 1999 at £96.9 million, excluding properties in
the course of construction. Secondly, the directors believe that opportunities
to purchase further properties whose value can be enhanced by development and
refurbishment will for the time being be limited. Thirdly, the stock market
has, in recent years, valued shares in smaller property companies
significantly below their net asset value per share. Finally, upon the initial
formation of Gander Holdings PLC the directors indicated that it was their
intention to return funds to shareholders before the millennium.

Therefore, the directors believe that an opportunity for shareholders to sell
their shares for a value which is approximately equivalent to net asset value
per share is an attractive opportunity.

Since my last Chairman's Statement in March 1999 the group has moved forward
as follows:

(1) Operational Issues

(a) Income from the Lexham, our serviced apartment block, continues to be in
line with expectations;
(b) The rest of the property portfolio continues to let well;
(c) Running costs have been reduced at the residential properties;
(d) Our substantial development at Queen's Gate Terrace has been completed;
(e) Our property in Harrington Gardens was sold during the period for £1.6
million.  Subsequent to 30 June 1999 we completed the sale of a further
property, in Collingham Gardens, for £1.7 million. 

(2) Corporate Issues

(a) The merger with Gander Holdings PLC was completed successfully;
(b) An EGM on 8 July 1999 approved resolutions to substantially reduce the
accumulated deficit on the company's profit and loss account (which arose
prior to the merger with Gander Holdings PLC) by cancelling both the Company's
share premium account and the 46.5 million deferred shares in issue, and on 11
August the High Court approved these cancellations.

This report covers the 18 month period from 1 January 1998 to 30 June 1999 and
includes the results of Gander Properties PLC (formerly Anagen PLC), Gander
Holdings PLC and Barrasford Holdings PLC combined under merger accounting
rules for the period.

Prior year figures have been restated to show the position as if the group had
been merged throughout.

Financial Review

The merged group made a loss before exceptional items and taxation of £1.01
million for the period. This was primarily due to an interest payable charge
to the profit and loss account of £4.8 million, including £1.25 million of
loan interest relating to the development at Queen's Gate Terrace which other
property companies would include in their cost of construction on the balance
sheet. Profitability was also affected by a depreciation charge of £915,000 on
furnishings at the properties. 

Gross rental income for the group rose from £3.80 million to £8.49 million in
the eighteen month period. 

Property running costs for the merged group increased from 34% in 1997 to 35%.
This is due to The Lexham's commencement of trading as a start-up operation in
late 1997 with a higher cost base appropriate to serviced apartments.  In
fact, running costs at our residential properties decreased from 25% of rental
income in the period to 31 January 1999 to 23% in the 5 months to 30 June

Exceptional items of £1.77 million comprise £1.56 million of merger costs
incurred on the Barrasford and Gander mergers and £0.21 million of loan
refinancing and main stock market admission costs.

Properties Recently Completed/Under Development

These are as follows:

(1) Queen's Gate Terrace 
This conversion of a Victorian terrace of 8 houses into 32 luxury residential
apartments has been completed and is valued at £27.6 million at 30 June 1999,
excluding a mews house at its rear still under construction.

(2) Courtfield Gardens
This is another development of 5 Victorian properties into apartments which
will be completed in 2000. 


The group has net assets of 10.9p per share pre-tax on a fully diluted basis
at 30 June 1999.  The directors have been looking to sell Gander for the last
two years. No satisfactory bids have been received hitherto. Discussions with
Orb have resulted in the above proposal that the directors consider would be
in the interests of shareholders.

T.F. Vaughan
27 August 1999
Consolidated Profit and Loss Account

                                Before      Exceptional  Period    Year
                                exceptional items        ended     ended
                                items       (note 6)     30 June   31 December
                                                         1999      1997
                                £'000       £'000        £'000     £'000

Turnover-continuing operations  1,600       -            1,600     1,190  
Cost of sales                  (1,689)      -           (1,689)     (939)
Gross profit                      (89)      -              (89)      251  
Net rental income               4,598       -            4,598     2,183  
Other income                      -         -             -          267  
Total income                    4,509       -            4,509     2,701  
Administrative expenses        (1,049)    (207)         (1,256)     (772)
Operating profit on continuing  
operations                      3,460       -            3,253     1,929
Merger expenses                 -       (1,560)         (1,560)      -  
(Loss)/profit on                  
sale of fixed assets              (77)      -              (77)        2
Provision against fixed asset                    
investments                     -           -             -          (60)
Profit on liquidation of subsidiary    
company                         -           -             -           68  
Profit before interest         3,383        -            1,616     1,939  
Interest - net                (4,396)       -           (4,396)   (1,720)
(Loss)/profit before taxation (1,013)       -           (2,780)      219  
Taxation                         (10)       -              (10)       25  
(Loss)/profit for the financial 
period/year                   (1,023)       -           (2,790)      244  
Dividend                        -           -             -           -  
Retained (loss)/profit 
for the period/year           (1,023)     (1,767)       (2,790)      244  
(Loss)/earnings per ordinary share - basic               (0.52p)    0.05p 
                                   - fully diluted       (0.51p)    0.06p 
Adjusted (loss)/earnings per ordinary share;
                                   - basic               (0.19p)    0.05p
                                   - fully diluted       (0.19p)    0.05p


Consolidated Balance Sheet
At 30 June 1999

                                         Group                 Group
                                         30 June               31 December 
                                         1999                  1997
                                         £'000                 £'000
Fixed assets                     
Investment properties                   107,957               89,907  
Other tangible assets                         3                  103  
                                        107,960               90,010  
Current assets                     
Debtors                                     473                  937  
Bank balances and cash                    3,075                2,880  
                                          3,548                3,817  
Creditors due within one year            (2,817)              (1,710)
Net current assets                          731                2,107
Total assets less current liabilities   108,691               92,117
Creditors due after more than one year  (49,523)             (27,692)
Net assets                               59,168               64,425  
Capital and reserves                     
Called up share capital                   5,268                5,138  
Share premium account                    17,981               18,111  
Revaluation reserve                      27,935               30,158  
Merger reserve                           33,044               32,999  
Capital redemption reserve                  209                 -  
Profit and loss account                 (29,914)             (26,626)
Shareholders' equity funds               54,523               59,780  
Called up share capital - deferred        4,645                4,645  
Total shareholders' funds                59,168               64,425  
Net assets per share - shares in issue     11.2p                12.5p  
Net assets per share - fully diluted       10.9p                12.2p

Gander Properties PLC

Consolidated Cash Flow Statement
For the period ended 30 June 1999
                                             Period ended          Year ended
                                             30 June               31 December
                                             1999                  1997
                                   £'000     £'000       £'000     £'000

Net cash inflow from operating 
activities                                   6,491                 4,832
Outflow relating to merger expenses           (830)                   -

Returns on investments and servicing
of finance
Interest received                     419                  451
Interest paid                      (4,588)              (2,067)
Dividends received                      -                    1

Net cash outflow from returns on            
investments and servicing of finance        (4,169)              (1,615)

Tax paid at source                              (9)                 (57)

Capital expenditure and 
financial investment              
Additions to investment properties(22,146)             (21,215)     
Payment of fixed asset creditors      (23)                  -
Purchase of other tangible 
fixed assets - net                    (59)              (1,285)
Sale of fixed asset investments         -                   40
Completion monies included in creditors -                   23
Net cash outflow from capital   
expenditure and financial investment        (22,228)            (22,437)
Cash outflow before management of liquid 
resources and financing                     (20,745)            (19,277)

Issues of ordinary share capital     283                12,081
New secured loans                 40,562                 7,999
Loan repayments                  (18,643)                 (344)
Receipt of shareholder's loan         -                    150
Payments to repurchase ordinary share 
capital                           (1,262)                   -
Expenses paid in connection with share 
issues                                -                   (389)
Net cash inflow from management of 
liquid resources and financing               20,940                19,497  
Increase/(decrease) in cash in the 
period/year                                     195                  (220)

Notes to the Accounts

1. Basis of preparation

The financial information set out herein does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985.

The financial statements have been prepared under merger accounting principles
in relation to the merger of Gander Properties PLC and Gander Holdings PLC and
the prior merger of Gander Holdings PLC and Barrasford Holdings PLC. Under
merger accounting the results and cash flows of Gander Properties PLC, Gander
Holdings PLC and Barrasford Holdings PLC are combined from the beginning of
the financial period in which the merger occurred. Comparative figures have
been restated on the combined basis.

The merger basis of accounting has been applied to the combination of Gander
Properties PLC and Gander Holdings PLC in order to show a true and fair view,
as in the opinion of the directors the combination had the substance of a

2. Turnover

Turnover comprises the aggregate of gross selling prices of all residential

3. Taxation 

                                                 Period ended      Year ended
                                                 30 June           31 December
                                                 1999              1997
                                                 £'000             £'000
Tax charge/(credit):
Corporation tax payable based on the result for the  
period/ year                                         -                  9
Over provision of corporation tax in prior period    -                 (7)
Deferred tax                                        10                (27)
                                                    10                (25)

No corporation tax charge arises on the results for the period due to losses

4. Loss/earnings per share

The calculation of basic (loss)/earnings per share has been based on the
(loss)/profit on ordinary activities after tax of £2,790,000 (1997 - profit
£244,000) and on the weighted average of 537,806,494 (1997 - 460,034,237)
ordinary shares in issue during the period/year.  

The calculation of fully diluted (loss)/earnings per share is based on
546,682,300 shares (1997 - 475,384,237) including warrants and options.

The calculation of adjusted (loss)/earnings per share excludes exceptional
items of £1.77m.

5. Net rental income

                                          Period ended            Year ended
                                          30 June                 31 December
                                          1999                    1997
                                          £'000                   £'000

Rent receivable                           8,490                   3,802
Less: general property expenses          (2,976)                 (1,272)
                                          5,514                   2,530
Less: depreciation of furnishings 
at properties                              (916)                   (347)
Net rental income                         4,598                   2,183  
All rental income arose in the United Kingdom.

6. Exceptional items 
                                         Period ended        Year ended
                                         30 June             31 December
                                         1999                1997
                                         £'000               £'000

Loan refinancing costs                     171                   -
Admission of shares to main stock market    36                   -
                                           207                   -
Merger expenses relating to Gander 
Holdings PLC and Barrasford Holdings PLC
                                         1,560                   -
                                         1,767                   -

7. Investment properties

Investment properties are comprised as follows:                    30 June 
Completed investment properties at valuation                      96,947
Investment properties in the course of construction at cost       11,010  

Completed investment properties were valued by FPD Savills, International
Property Consultants, at 30 June 1999 on the basis of their open market value.

8.   Reconciliation of movements in shareholders' funds

                                            Period ended           Year ended
                                            30 June                31 December
                                            1999                   1997
                                            £'000                  £'000
(Loss)/profit on ordinary activities 
after taxation                              (2,790)                 244
Other recognised gains and losses           (1,459)              19,869
Issue of ordinary shares                       -                 12,088
Goodwill on consolidation written off          -                     (7)
Share issue costs                              -                   (389)
Repurchase of shares                       (1,262)                   -
Merger reserve adjustments                    254                    -  
Net (decrease in)/addition 
to shareholders' funds                     (5,257)               31,805       
Shareholders' funds at 1 January 1998      64,425                32,620  
Shareholders' funds at 30 June 1999        59,168                64,425  

9. Reconciliation of net cash flow to movement in net debt

                                                   Period ended    Year ended
                                                   30 June         31 December
                                                   1999            1997
                                                   £'000           £'000
Increase/(decrease) in cash in the period/year       195            (220)
Cash inflow from net increase in debt financing  (21,919)         (7,655)
Movement in net debt in the period/year          (21,724)         (7,875)
Net debt at 1 January 1998                       (25,174)        (17,299)
Net debt at 30 June 1999                         (46,898)        (25,174)

10.  Dividends

The directors do not recommend the payment of a dividend.


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