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Primary Health Props (PHP)

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Thursday 21 September, 2006

Primary Health Props

Final Results

Primary Health Properties PLC
21 September 2006

20 September 2006



                     PRIMARY HEALTH PROPERTIES PLC ('PHP')

            Modern accommodation for the Provision of Primary Health

                                 Care Services



                     Preliminary Results for the Year Ended

                                  30 June 2006



Primary Health Properties PLC, one of the UK's largest providers of modern
primary healthcare facilities, is pleased to announce its Preliminary Results
for the year ended 30 June 2006.



Group Financial Highlights



•  Profit after tax increased by 25% to £15.9m (2005: £12.7m)

•  Adjusted diluted NAV per share increased 23% to 392.4p (2005:
   320.2p) **

•  Interim and final dividends during the financial year ended 30 June
   2006 increased 12.5% to 13.5p (2005: 12.0p)

•  Portfolio revaluation surplus increased by £15.0m (2005: £16.6m)

•  Purchases of properties amounted to £27.5m during the year

•  Group Rental Income up 16% to £10.9m (2005: £9.4m)

•  Portfolio owned, leased and committed increased by 20% to £224.8m
   (2005: £187.2m)

•  Adjusted diluted earnings per share increased by 34% to 16.5p (2005:
   12.3p) *

•  Intention to convert to REIT status



*Adjusted diluted earnings per share - excludes deferred tax and revaluation
gains on property.

** Adjusted diluted net asset value per share - excludes deferred tax.





Harry Hyman, Managing Director, commented:


"I am pleased to report another year of strong performance for Primary Health
Properties. Our product is in demand from both the occupier and the investment
market, resulting in continuing growth in our rental income and a significant
uplift in total valuation and net asset value. The prospects for the sector,
with its long lease lengths, good quality covenants and importantly the
continuing commitment by Government to renew the primary care estate, continue
to remain strong.


We retain a leading position in our niche market and our strong links with
developers mean that we currently have a strong forward pipeline of new
products. The expected arrival of REITs next year - and we have stated that we
are favourably considering converting - should further enhance investor interest
in the healthcare property sector. The Board looks forward to the future with
confidence."





Enquiries:



Bell Pottinger Corporate and Financial
David Rydell/Victoria Geoghegan
Tel: 020 7861 3232



Primary Health Properties PLC
Harry Hyman
Managing Director
Tel: 01483 306912
Mobile: 07973 344768




Chairman's Statement



In common with most public companies in the United Kingdom, this is the first
time that the full year results for Primary Health Properties PLC have been
prepared using International Financial Reporting Standards ("IFRS").
Accordingly, the Group's results for the comparative periods have been restated.



As reported at the Interim stage, this change of accounting basis has no effect
on the underlying business performance or strategy of the Group.



This was another year of substantial progress for the Group. The Group's profit
after taxation for the year ended 30 June 2006 totalled £15.9m (2005: £12.7m),
an increase of 25%. Adjusted for the revaluation surplus and the deferred
taxation charge, profits for the period were £3.8m (2005: £2.8m). Profit before
tax for the year ended 30 June 2006 totalled £18.4m (2005: £19.4m), a marginal
decrease - largely caused by increased administration and financing costs.



Adjusted diluted earnings per share were 16.5p*, 34% higher than the 12.3p*
reported for the previous year.



The Board has recommended a final dividend of 6.75p per Ordinary Share for
declaration by Shareholders at the Annual General Meeting, which, together with
the Interim dividend, makes a total of 13.5p per share for the year, an increase
of 12.5% over the 12.0p paid in respect of the previous year.



The year end valuation of the property portfolio carried out by Lambert Smith
Hampton has resulted in a revaluation surplus of £15.0m for the year. To this
must be added the £0.4m surplus generated from the sale, in the second half, of
our properties in Charlotte Street and Newcastle. Of this £15.4m, £7.8m was
accounted for at the Interim stage. The adjusted diluted net asset value per
share has risen by 23% to 392.4p** from 320.2p** per share, reflecting both
rental increases and current yields in the market.



Rent reviews during the year have again performed well, and together with new
deliveries, helped increase our year end rent roll from £10.0m to £11.3m, an
increase of 13%.



Purchases of properties during the year amounted to £27.5m and commitments at
the year end totalled £20.9m. Our portfolio, including commitments, was £225m at
30 June 2006, an increase of £38m from £187m at the previous year end.

The table below sets out the portfolio as at 30 June 2006:


                                                             30 June              30 June
                                                                2006                 2005
                                                                  £m                   £m
Investment properties                                          197.5                160.0
Properties in the course of development                          2.1                  2.3
Total investment properties                                    199.6                162.3
Development loans (including accrued interest)                   1.7                  2.3
Finance leases                                                   2.5                  2.5
Total owned and leased                                         203.8                167.1
Deposit paid                                                     0.1                  0.4
Committed                                                       20.9                 19.7
Total owned, leased and committed                              224.8                187.2



Expansion during the year has been financed by further drawings on our committed
medium term finance facilities.  Since the end of the financial year we have
agreed a further increase of £25m in our banking facilities. With these
resources we believe we can grow our total portfolio to £385m.



We have continued to monitor our exposure to interest rates and have entered
into several new swap arrangements both before the year end and shortly
thereafter. As a result of this and previous activity, for the year to 30 June
2007 we have covered approximately 82% of our exposure to interest rates which
falls to 62% for years 2016 to 2026 at an average rate before margin of 4.75%.



As we informed you at the Interim stage the Board has decided that the expense
of a scrip dividend scheme is no longer justified and has made alternative
arrangements with Capita IRG Trustees Limited, to offer a dividend reinvestment
scheme for Shareholders who wish to receive their dividend as Shares. A letter
explaining the Dividend Reinvestment Scheme, together with its terms and
conditions and an application form, will be posted to Shareholders with the
Annual Report.



As at the date of this statement, the PHP Share Plan has 34 members holding
76,355 Shares. Further details can be found in the Annual Report, at the
Company's website www.phpgroup.co.uk and at http://www.capitaregistrars.com/php.



The Board has considered the legislation contained in this year's Finance Act
concerning the introduction of REITs and has reviewed the draft regulations
currently being finalised.  It is the Board's current intention to ask
Shareholders to approve conversion of the Company into a REIT and the process
involves the Company applying to HM Revenue & Customs for REIT status, making
changes to the Articles of Association, and may affect the taxation of income
and gains of the Company's Shareholders.  A circular will be posted to
Shareholders at the appropriate time.



The market for primary care has remained very competitive. Administrative and
funding deficits have affected the rate at which new projects are being approved
by the NHS. However our strong links with a number of developers mean that we
have a strong forward pipeline. The recent White Paper foresees more activity in
Primary Care including the transfer of 5% of the NHS budget into the Primary
Care Sector.  The arrival of REITs next year is expected to further enhance
investor interest in the healthcare property market.



The portfolio, at the date of this report, has 78 properties with a further 5
contracted for delivery during the next 12 months and 1 contracted for
completion by August 2007. The portfolio has performed well in both capital and
income terms and we believe that the prospects for investment in the sector,
with its long lease lengths and good quality covenants, make the portfolio
attractive.



Paul Sandford, who has been with us since March 2001, resigned as a Director on
27 July 2006.  The Board thanks him for his valuable contribution and services
to the Company.



The Group is well positioned to add further to its portfolio of investments in
the coming year.





G A Elliot
Chairman
20 September 2006

* excludes deferred tax and revaluation gains on property
** excludes deferred tax

Managing Director's Report


Property portfolio

The table in the Chairman's Statement sets out the development of our portfolio
during the year under review. We took delivery of twelve new developments (2005,
eight new developments) and entered into a further seven development commitments
(2005, twelve development commitments). At the year end the portfolio, when
commitments are included, reached £224.8m (2005, £187.2m).





Portfolio Purchases during the Year



The Group completed the purchases of a number of properties during the year,
details of which are set out below:


Property                                  Acquisition Cost £m     Occupational Tenants
Alma Street Medical Centre, Stockton on                   1.8     Doctors Practice
Tees
Birchgrove Surgery, Cardiff                               1.6     Doctors Practice and Pharmacy
Hednesford Valley Health Centre                           2.8     Doctors Practice and Pharmacy
Haddenham Medical Centre                                  2.3     Doctors Practice and Pharmacy
Wolverhampton Road Surgery, Stafford                      1.3     Doctors Practice
Teams Medical Practice, Gateshead                         2.1     Doctors Practice and Pharmacy
Broxbourne Medical Centre                                 2.1     Doctors Practice
Kirton Medical Centre                                     2.1     Doctors Practice and Pharmacy
Blackthorn Health Centre, Hamble                          3.2     Doctors Practice, Pharmacy and
                                                                  Dental Suite
Mawsley Medical Centre                                    2.0     Doctors Practice
Churchfield Medical Centre, Luton                         4.6     Doctors Practice and Pharmacy
Rainbow Medical Centre, St Helens                         1.6     Doctors Practice and Pharmacy
TOTAL:                                                   27.5



Property Disposals during the Year



As mentioned in the Chairman's Statement the Group disposed of two properties
during the year, both to special purchasers at prices above their investment
values. The properties were valued at £6.8m at 30 June 2005, and revalued to
£7.3m at December 2005 and disposed of in March 2006 for £7.7m, realising a gain
of £0.4m.



The properties were:
Scotswood House, Newcastle
James Pringle House, Charlotte Street, London W1



Revaluation



As reported in the Chairman's Statement, the portfolio valuations have resulted
in an uplift of £15.0m, which has been incorporated into the Balance Sheet,
giving a closing property investment valuation (including finance leases) of
£203.8m. This increase amounted to 66.1p per share on an undiluted basis and
61.8p per share on a fully diluted basis. The valuation surplus reflects the
impact, during the year, of our successful rent reviews. There has also been a
further hardening of investment yields during the year. Notwithstanding this and
an increased number of players in the market, the Group has a good pipeline of
investments.



Portfolio Rental Levels



The average rent for medical centres across the whole portfolio is approximately
£162 per square metre ("psm") (2005: £158 psm).  The average rent on
accommodation let to the NHS (either directly or through the Doctors Rent and
Rates Scheme) is approximately £157 psm (2005: £154 psm) and the average
pharmacy rent is approximately £220 psm (2005: £213 psm).  The weighted average
length of time to the next review is 1.8 years across the portfolio.



Tenancy split by Floor Area



The table below indicates the tenancy split by floor area (psm):


GP's                                                    83%
PCTs                                                    10%
Pharmacy                                                 6%
Other                                                    1%
TOTAL                                                  100%



Rent Reviews



The Group completed a number of rent reviews during the year and there are a
number of reviews outstanding that we expect to see resolved during the coming
year. The results of the reviews completed during the year added £136,000 to our
rent roll. There are further reviews due from the past year which amount to some
£1.94m of rent passing. We have accounted for an amount based on expected
outcomes. The pace of reviews is now picking up as more evidence is presented
through the market and more premises go through the review process. The average
increase in rent as a percentage of passing rent over the three year review
process has been 11% equating to 3.39% per annum.






Finance and Interest Rate Hedging



Bank borrowings increased from £88.8m to £112.8m during the year, of which the
amounts shown in the table below have been hedged as swap contracts at an
average weighted cost rate of 4.89% (2005: 5.08%) (excluding the lenders'
margins).



During the period a number of interest rate swaps have been entered into
extending the maturity and quantum of the Group's cover under hedging
arrangements as shown below.


Year                                             Swaps (£m)
2006/2007                                              92.5
2007/2008                                              90.0
2008/2009                                              85.0
2009/2010                                              82.5
2010/2011                                              82.5
2011/2012                                              85.0
2012/2013                                              89.9
2013/2014                                              90.0
2014/2015                                              90.0
2015/2016                                              92.5
2016/2017                                              70.0
2017/2018                                              70.0
2018/2019                                              70.0
2019/2020                                              70.0
2020/2021                                              70.0
2021/2022                                              70.0
2022/2023                                              70.0
2023/2024                                              70.0
2024/2025                                              70.0
2025/2026                                              70.0





The table above shows the level of fixed rate financing for each of the next
twenty financial years from hedging swaps.





Portfolio Characteristics



Users



The table below shows the percentage of our portfolio by rent roll derived from
each of our major tenant classes, GPs, PCTs, Health Authorities, pharmacy
operators and others. Some 99% (2005: 99%) of our rent roll comes directly or
indirectly from the NHS, GPs, PCTs and pharmacy operators.





Covenant Analysis by Annual Rent


GP's                                         82%
Pharmacy                                      8%
PCT's                                         7%
Health Authorities                            2%
Other                                         1%
TOTAL                                       100%


Length of Leases



Analysis of Annual Rent by Term Unexpired



The table below shows an analysis of rent by term unexpired.


6 - 15 years                                    5%
15 - 20 years                                  43%
More than 20 years                             52%
TOTAL                                         100%



Security of Income by Lease Expiry

The table below shows the length of leases by lease expiry as a percentage of
current passing rent.


Year                                  % of Passing
                                              Rent
1                                             100%
5                                             100%
10                                             98%
15                                             94%



Security of Income by Term Certain

The table below shows the security of rental income by term certain.


Year                                  % of Passing
                                              Rent
1                                             100%
5                                             100%
10                                             98%
15                                             93%






Geographical Spread



The table below shows the percentage of the portfolio by rent roll derived from
each of the NHS regions.



Annual Rent by Region


East Midlands                                 12%
London                                        10%
North                                          2%
North West                                    10%
South East                                    28%
South West                                     1%
West Midlands                                 19%
Yorkshire & Humberside                         7%
Scotland                                       7%
Wales                                          4%
TOTAL                                        100%



Forthcoming Rent Reviews



The table below shows the annual amount of rent falling due for review in each
of the next 3 years.


Year                                     Rent (£m)
2006/2007                                    2.986
2007/2008                                    3.349
2008/2009                                    3.793





The Primary Care Market



The last year has seen continued development of the Government's NHS LIFT
programme.  So far, a handful of projects have been completed and it is
interesting to note that since the NHS LIFT programme started at the beginning
of 2001, we have completed the purchase of over 30 schemes totalling around
£67m.  Of these, 19 schemes (approximately £42m) were six months or more from
going on site at the start of 2001.  To the best of our knowledge there are 12
NHS LIFT buildings open to the public and whilst there are expected to be more
opening over the next few months, it is our view that it has not been the most
effective approach to solving the lack of investment in deprived areas.



Both within LIFT and outside the LIFT remit, available premises funding for new
Primary Care Schemes is being carefully controlled.  Government's perceived
desire to see Primary Care as the cornerstone of a modern NHS is undermined by
the lack of premises funding reaching the front line.  However, the advent of
Practice Based Commissioning and Alternative Providers of Medical Services
(APMS) will allow PCTs and GP Practices to be far more innovative in sourcing
funding streams and we believe that this is an exciting time for Primary Care as
a whole.



Throughout the country, demand for new medical centres continues.  There is more
cohesion within PCTs to see the Primary Care framework evolved and to take the
lead in estates strategy to improve health service delivery in the local health
economy.



Increased competition in the marketplace for new purpose built medical
facilities has made these types of investment more attractive and has driven
purchase yields down.  This has a positive effect on the existing portfolio, but
means new acquisitions are more costly and we must continue to purchase
properties where we believe there to be good long term growth prospects.  During
the year we bid for two portfolios of Primary Care centres, but due to the
increased interest from other investors the price was pushed above what we
considered to be their intrinsic worth and therefore we withdrew our bids.



We have continued to add value to properties in the portfolio by negotiating new
lease terms and refurbishing premises.  For example, during the year we
successfully negotiated a substantial extension in building area and a new lease
term at our Droitwich property, which was originally purchased in 1997.



Future Prospects



There are a great number of changes occurring within Primary Care and pharmacy
relating to the structure and organisation of the sector - including the
introduction of practice-based commissioning and the opening up of the sector to
private operators through APMS. In addition competition is increasing through
the entry of new participants. Although in the short term this may lead to
delays in approval of new projects, we remain confident that the need to renew
the Primary Care estate remains a top Government priority and that the Group has
a good pipeline of deals to complete over the next 12 months.



In the meantime our existing portfolio continues to perform very well and we are
working hard to add value from rent reviews and lease re-gearings.




Harry Hyman

Managing Director


20 September 2006


GROUP INCOME STATEMENT

for the year ended 30 June 2006           
                                                                              Year ended      Year ended
                                                                                 30 June         30 June
                                                                                    2006            2005
                                                                                   £'000           £'000

Rental income                                                                     10,850           9,339

Finance lease income                                                                 281             274

Rental and related income                                                         11,131           9,613


Net valuation gain on property portfolio                                          14,997          16,602
Net gain on disposal of property                                                     401               -
Administrative expenses                                                           (2,689)         (2,207)

                                                                                  12,709          14,395


Operating profit                                                                  23,840          24,008

Finance income                                                                       258             278
Finance costs                                                                     (5,695)         (4,899)

Profit on ordinary activities before taxation                                     18,403          19,387


Current taxation                                                                     465               -
Deferred taxation                                                                 (2,931)         (6,713)
Taxation expense                                                                  (2,466)         (6,713)


Profit for the period*                                                             15,937         12,674


Earnings per share - basic                                                          70.3p           59.1p

                   - diluted                                                        67.7p           55.4p

Adjusted earnings per share - basic                                                 17.1p           13.0p
                            - diluted                                               16.5p           12.3p

* Wholly attributable to equity shareholders of Primary Health Properties
plc ("PHP Plc")

All activities are continuing.




GROUP BALANCE SHEET

as at 30 June 2006
                                                                                   At 30 June    At 30 June
                                                                                         2006          2005
                                                                                        £'000         £'000
Non current assets

Investment properties                                                                 199,569       162,311
Development loans                                                                       1,712         2,310
Net investment in finance leases                                                        2,492         2,504
Derivatives                                                                             1,415             -

                                                                                      205,188       167,125
Current assets

Trade and other receivables                                                             1,470         1,655
Net investment in finance leases                                                           12            19
Cash and cash equivalents                                                               3,973         1,112


                                                                                        5,455         2,786

Total assets                                                                          210,643       169,911

Current liabilities

Trade and other payables                                                               (5,070)       (5,499)
Derivatives                                                                               (74)            -
Corporation tax payable                                                                  (181)         (681)


Net current liabilities                                                                (5,325)       (6,180)



Non current liabilities

Term loan                                                                            (112,800)      (88,800)
Deferred taxation                                                                     (21,193)      (17,860)


                                                                                     (133,993)     (106,660)


Total liabilities                                                                    (139,318)     (112,840)



Net assets                                                                             71,325        57,071


Equity

Share capital                                                                          11,339        11,326
Share premium                                                                          12,022        11,952
Capital reserve                                                                         1,618         1,618
Cash flow hedging reserve                                                                 939             -
Retained earnings                                                                      45,407        32,175


Total equity *                                                                         71,325        57,071


Net asset value per share                - basic                                       314.52p       251.94p

                                         - diluted                                     305.06p       246.60p



Adjusted net asset value per share       - basic                                       407.97p       330.78p

                                         - diluted                                     392.35p       320.24p

* Wholly attributable to equity shareholders of Primary Health Properties
plc ("PHP Plc")





Group Statement of Changes in Net Equity

for the year ended 30 June 2006


                                                                              Cash flow
                                                 Share       Share   Capital    hedging   Retained
                                               capital     premium   reserve    reserve   earnings      Total
                                                £'000       £'000     £'000      £'000      £'000       £'000




30 June 2005                                   11,326      11,952     1,618          -     32,175     57,071
Opening adjustment to reserves for IAS 39           -           -         -     (1,292)         -     (1,292)

                                                    

As restated 1 July 2005                        11,326      11,952     1,618     (1,292)    32,175     55,779

Profit for the period                               -           -         -          -     15,937     15,937

Transfer to income statement on cash flow            -           -         -       238          -        238
hedge
                                                                                   

Income and expense recognised directly in
equity:

Gains on cashflow hedges taken to equity            -           -         -      2,949          -      2,949

                                                    
Deferred tax on cashflow hedges taken to
equity                                              -           -         -       (956)         -       (956)
                                                    

Total recognised income and expense for the
period                                              -           -         -      2,231     15,937     18,168
                                                    
Issue of shares                                    13          74         -          -          -         87
Issue expenses                                      -          (4)        -          -          -         (4)
Share based payment charge                          -           -         -          -        185        185
Dividends paid and declared:
Final dividend for the year ended 30 June
2005 (6.0p)                                         -           -         -          -     (1,359)    (1,359)
                                                    
Interim dividend for the year ended 30 June
2006 (6.75p)                                        -           -         -          -     (1,531)    (1,531)
                                                    

30 June 2006                                   11,339      12,022     1,618        939     45,407     71,325






Group Statement of Changes in Net Equity

for the year ended 30 June 2005






                                               Share Share premium     Capital     Retained
                                             capital                   reserve     earnings        Total
                                              £'000         £'000       £'000        £'000        £'000




1 July 2004                                   9,074         7,459       1,618       21,553       39,704
Profit for the period                             -             -           -       12,674       12,674

Total recognised income and expense for
the period                                        -             -           -       12,674       12,674
Issue of shares                               2,252         4,813           -            -        7,065
Issue expenses                                    -          (320)          -            -         (320)
Share based payment charge                        -             -           -          245          245
Dividends paid and declared
Final dividend for the year ended 30
June 2004 (5.5p)                                  -             -           -         (998)        (998)
Interim dividend for the year ended 30
June 2005 (6.0p)                                  -             -           -       (1,299)      (1,299)
                                                  

30 June 2005                                 11,326        11,952       1,618       32,175       57,071








GROUP CASH FLOW STATEMENT

for the year ended 30 June 2006
                                                                           30 June 2006  30 June 2005

                                                                                  £'000         £'000
Operating activities
Group operating profit before financing costs and financing income               23,840        24,008


Adjustments to reconcile group operating profit to net cash flows from
operating activities

Less: Revaluation gains on property                                             (14,997)     (16,602)
Less: Gains on disposal of property                                                (401)             -
Plus: Shares based payment expense                                                  185           245
Increase in trade and other receivables                                             (54)         (158)
Increase in trade and other payables                                                212           240

Cash generated from operations                                                    8,785         7,733
Interest received from developments                                                 219           267
Taxation paid                                                                       (34)            -


Net cash flow from operating activities                                           8,970         8,000

Investing activities

Receipts from disposal of investment properties                                   7,711             -
Payments to acquire investment properties                                       (25,770)      (17,451)
Development loans advanced                                                       (2,612)       (2,550)
Bank interest received                                                               47            33
Deposits paid                                                                         -          (393)


Net cash flow used in investing activities                                      (20,624)      (20,361)

Financing activities

Ordinary share issue (net of expenses)                                               (4)        2,680
Proceeds from term bank loan                                                     24,000        16,590
Interest paid                                                                    (6,678)       (4,275)
Equity dividends paid                                                            (2,803)       (2,231)


Net cash flow from financing activities                                          14,515        12,764

Increase in cash and cash equivalents for the period                              2,861           403


Cash and cash equivalents at start of period                                      1,112           709

Cash and cash equivalents at end of period                                        3,973         1,112









NOTES:

The above results for the year to 30 June 2006 are audited.



1. Earnings per share

   The calculation of earnings per share is based on the following:

               As at 30 June 2006                As at 30 June 2005                
             Net profit   Ordinary            Net profit     Ordinary          
           attributable     shares          attributable       shares       
            to ordinary  (weighted      Per  to ordinary    (weighted      Per      
           shareholders    average)   share shareholders     average)    share            
                  £'000      number   pence        £'000       number    pence   
                                                                                
Basic           15,937   22,667,946    70.3       12,674   21,459,735     59.1  
earnings                                                                        
per share                                                                       
Option               -      861,960                    -      549,187           
conversion *                                                                               
Convertible          -            -                   42      926,276           
Loan stock                                                                      
conversion**                                                                              
                                                                                
                                                                                
Diluted         15,937   23,529,906    67.7       12,716   22,935,198     55.4  
earnings                                                                        
per share                                                                       



* Excess of the total number of potential shares on option exercise over the
number

that could be issued at fair value as calculated in accordance with
International Accounting Standard No. 33: Earnings per share.



** The total number of potential shares on conversion of the convertible loan
stock.




The calculation of the adjusted earnings per share is based on the following:

             As at 30 June 2006                As at 30 June 2005                
             Net profit     Ordinary           Net profit     Ordinary     
           attributable       shares         attributable       shares    
            to ordinary    (weighted     Per  to ordinary    (weighted      Per            
           shareholders     average)   share shareholders     average)    share            
                  £'000       number   Pence        £'000       number    pence   
                                                                                 
Basic            15,937   22,667,946    70.3       12,674   21,459,735     59.1  
earnings per                                                                     
share                                                                            
Adjustments:                                                                     
Deferred tax      2,931                             6,713                        
charge                                                                           
Net             (14,997)                          (16,602)                       
valuation                                                                        
gains on                                                                         
valuation of                                                                     
property                                                                         
                                                                                 
Adjusted          3,871   22,667,946    17.1        2,785   21,459,735     13.0  
basic                                                                            
earnings per                                                                     
share                                                                            
Option                -      861,960                    -      549,187           
conversion *                                                                     
Convertible           -            -                   42      926,276           
Loan stock                                                                       
conversion **                                                                     
                                                                                
                                                                                 
                                                                                 
Adjusted          3,871   23,529,906    16.5        2,827   22,935,198     12.3  
diluted                                                                          
earnings per                                                                     
share                                                                            





* Excess of the total number of potential shares on option exercise over the
number that could be issued at fair value as calculated in accordance with
International Accounting Standard No. 33: Earnings per share.



** The total number of potential shares on conversion of the convertible loan
stock.











2. At the Annual General Meeting, a resolution to declare a final dividend of
6.75p per share will be put to the members and, if passed, will be paid on 
22 November 2006 to holders on the register of members at the close of business 
on 6 October 2006.

3. Diluted net asset value has been calculated as follows:


                                                                                     30 June           30 June   
                                                                                        2006              2005
                                                                                       £'000             £'000

Net assets:
Per Group Balance Sheet                                                               71,325            57,071

Add - Receipts from the exercise of Management options                                 2,736             2,736


                                                                                      74,061            59,807


                                                                               No. of shares     No. of shares
Ordinary shares:
Issued share capital                                                              22,677,718        22,652,776
New shares issued assuming the exercise of Management options                      1,600,000         1,600,000


                                                                                  24,277,718        24,252,776


Diluted net asset value per share                                                     305.06p           246.60p






Diluted adjusted net asset value has been calculated as follows:


                                                                                     30 June           30 June   
                                                                                        2006              2005
                                                                                       £'000             £'000

Net assets:
Per Group Balance Sheet                                                               71,325            57,071
Adjustments to add back:
Deferred tax on timing differences                                                     6,186             4,561
Deferred tax on revaluation gains                                                     14,605            13,299
Deferred tax on derivatives                                                              402                 -

Adjusted net assets                                                                   92,518            74,931

Add - Receipts from the exercise of Management options                                 2,736             2,736


                                                                                      95,254            77,667


                                                                               No. of shares     No. of shares
Ordinary shares:
Issued share capital                                                              22,677,718        22,652,776
New shares issued assuming the exercise of Management options                      1,600,000         1,600,000


                                                                                  24,277,718        24,252,776


Diluted adjusted net asset value per share                                            392.35p           320.24p



Calculations assume that the dilution takes place on the respective Balance
Sheet dates.





4.  The statutory accounts for the year ended 30 June 2006 will be delivered to
Registrar of Companies following the Company's Annual General Meeting.   The
Annual Report was signed on 20 September 2006 and will be posted to shareholders
and those on the mailing list on 9 October 2006, together with details of the
dividend reinvestment plan, a Form of Election and Notice of Entitlement. The
Annual Report will thereafter be available on request from the Company
Secretary, J O Hambro Capital Management Limited, Ground Floor, Ryder Court, 14
Ryder Street, London, SW1Y 6QB.  The Annual General Meeting is to be held on 16
November 2006 at 10.30am in the Board Room, at Ground Floor, Ryder Court, 14
Ryder Street, London, SW1Y 6QB.





5.  The financial information set out above does not constitute the Company's
statutory financial statements for the years ended 30 June 2006 or 2005 (but is
derived from and has been prepared on the same basis as the 2006 financial
statements with the 2005 figures being restated for IFRS). Statutory financial
statements for 2005 were prepared under UK Generally Accepted Accounting
Practice and have been delivered to the Registrar of Companies and those for
2006 will be delivered following the Company's Annual General Meeting.  The
auditors have reported on those financial statements; their reports were
unqualified and did not contain statements under section 237 (2) or (3) of the
Companies Act 1985.






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