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Property Recyling Group plc (PROP)

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Tuesday 11 September, 2007

Property Recyling Group plc

Half-yearly report






Embargoed for release at 7.00 a.m. on 11 September 2007

                    PROPERTY RECYCLING GROUP PLC

                           Interim results

Property Recycling  Group  plc  (the "Company")  (AIM:  PROP),  which
acquires and  prepares brownfield  sites for  development,  announces
interim results for the six months ended 30 June 2007.  These are the
first  figures  prepared  under  International  Financial   Reporting
Standards and  the comparative  amounts have  been restated  on  that
basis.

Financials
Ø      Profit before tax of £46,658 on a turnover of £406,190 (2006
figures of £277,489 and £984,251 respectively, reflect a property
sale of £400,000 and some one off sales of aggregates).
Ø      Interim dividend of 0.5p (2006: 0.5p) per share.

Portfolio
Ø       The Group currently owns  six freehold sites totalling  207.9
hectares, all of which have planning approval for either  industrial,
commercial or leisure use.
Ø      Acquisition of an 8.09 hectare site at Colsterworth, Lincs,
which has current rental income of £410,000 per annum and
considerable potential.
Ø      Grant of option at Brigg over five hectares for biomass  power
station
Ø       Stanton  has the benefit of  a valuable planning  permission.
Following advice that  IKEA does  not intend to  exercise its  option
over the  site,  we are  reassessing  strategy to  include  marketing
existing and alternative planning potential.

Paul Rackham, the chairman of Property Recycling Group plc, said: "We
have made  good progress  in improving  the portfolio  this year  and
continue to seek further properties where we can see opportunities to
create value."

                               -Ends-
For further information please contact:
Paul Rackham, Chairman
Property Recycling Group plc
01953 717176 www.propertyrecycling.co.uk

Noelle Greenaway / Peter Ward
Insinger de Beaufort (Nominated Adviser)
020 7190 7000 www.insinger.com

John Webb
Marshall Securities Limited (Broker)
020 7490 3788

Rachel Drysdale / Jeremy Carey
Tavistock Communications
0207 920 3150

PROPERTY RECYCLING GROUP PLC

                     EXECUTIVE CHAIRMAN'S REPORT

Introduction

I am  pleased  to  present Property  Recycling  Group  plc's  interim
results for the six months ended 30 June 2007.

Background

Our objective  is  to  create  shareholder  value  through  recycling
brownfield sites, which represent an attractive alternative source of
development land.

Government policy  is to  increase  significantly the  proportion  of
development land sourced from brownfield sites. It was  re-emphasised
in the recent Housing Green Paper that using recycled land in any new
development is a priority.

Property portfolio

The Group currently owns six freehold sites totalling 207.9 hectares,
all  of  which   have  planning  approval   for  either   industrial,
commercial, residential  or leisure  use.   It  is our  intention  to
progress further the value of these sites by remediation and new  and
improved planning permissions.

We  have  completed  the  purchase   of  an  8.09  hectare  site   at
Colsterworth in  Lincolnshire for  £4.75  million. The  site  already
provides rental income of £410,000 per annum from short term tenants.
There is scope to increase the letting income in the short term  with
the potential  to  increase the  number  of buildings  or  completely
redevelop the site.

We continue to enhance value at our Brigg site, increasing short term
rental income by £60,000 per annum.   On 31 August 2007 we  announced
the grant of an option to ECO2 North Lincs Limited over 5 hectares on
the 50 hectare site. Under the terms of the option agreement ECO2 has
paid an  upfront  fee of  £30,000  for an  option  for 36  months  to
purchase the land  for development  of a biomass  power station.  The
purchase price under the agreement is £2 million. ECO2 is responsible
for preparing and submitting the planning application.

We have been advised that IKEA does not intend to exercise its option
over the site at Stanton because of  a change in its needs. The  site
has the benefit of a valuable planning permission granted in 2006. We
are currently re-assessing our strategy which will include  marketing
existing and alternative planning potential.

Financial results

These are  the  first  results  of  the  Group  to  be  stated  under
International  Financial   Reporting   Standards   (IFRS)   and   the
comparatives have been restated on this basis.  The principal  impact
of IFRS on the results  has been in relation  to the recognition of
deferred
tax on  a gain  that would  arise  if the  revalued property  on  the
balance sheet was  sold without any  rollover relief being  obtained.
The effect of  these adjustments  on the  results, income  statement,
balance sheet and equity of the Group are set out in note 9.

In the period the  Group achieved turnover  of £406,190, compared  to
£984,251 in the same  period last year  which included £400,000  from
realisations and some  one off  income from the  sale of  aggregates.
There were no realisations in the  first half of 2007. The  operating
loss was £87,340 (2006:  profit £206,985) and  profit before tax  was
£75,405 (2006: £379,439). Earnings per share were 0.13p (2006: 0.77p)
all of which is attributable  to continuing operations.  The  results
of future  periods will  be  affected by  the timing  of  significant
realisations.

At 30 June 2007 the Group had  net funds of £5.4m (2006: £6.4m)  with
cash and short term bank deposits of £6.7m (2006: £7.8m).  Since  the
period end £4.75m consideration for Colsterworth has been paid.

Dividend

The Board  is recommending  an  interim dividend  of 0.5p  per  share
(2006: 0.5p)  payable  on 24  October  2007 to  shareholders  on  the
register at the close of business on 21 September 2007. Dividends for
the full year  will be considered  in the light  of achieved  profits
which will be significantly affected by the timing of realisations.

Prospects

We see  continued  demand for  land  for industrial,  commercial  and
residential development  especially in  the  South East  and  Eastern
England.  The   recent  Green   Paper  on   Housing  reiterates   the
Government's policy  for  further  land  to  be  made  available  for
residential development, in particular affordable housing.

Within the portfolio we have improved the level of rental income  and
made progress  with local  planning authorities  to achieve  planning
improvements on two of our larger sites which we believe offer  mixed
use potential.

We continue to investigate  properties available for acquisition  and
are flexible in our  approach. We would  consider joint ventures  and
company acquisitions to secure the right profile. The Group's bankers
have agreed in principle to provide  facilities of up to £30  million
to fund suitable future acquisitions..

I hope to report  progress in the development  of the Group over  the
coming months.

Paul Rackham

Executive chairman
11 September 2007




PROPERTY RECYCLING GROUP PLC


Unaudited Consolidated Income Statement
for the six months ended 30 June 2007


                                             Six months Year ended 31
                         Notes    Six months   ended 30 December 2006
                               ended 30 June  June 2006     Restated*
                                        2007  Restated*             £
                                           £          £

Turnover                   3         406,190    984,251     1,158,132
Cost of sales                              -  (188,119)     (188,119)
Gross profit                         406,190    796,132       970,013
Share based payments to
directors & employees               (33,308)   (31,284)      (65,146)
Other administrative               (460,222)  (557,863)     (969,696)
expenses
Administrative expenses            (493,530)  (589,147)   (1,034,842)
Operating (loss)/profit             (87,340)    206,985      (64,829)

Net interest receivable              162,745    172,454       308,217
Profit on ordinary
activities before                     75,405    379,439       243,388
taxation
Tax on profit on
ordinary activities        4        (28,747)                 (16,936)
                                              (101,950)
Retained profit for the
financial period                      46,658    277,489       226,452

Earnings per share -       5
(pence)
Basic                                   0.13       0.77
                                                            0.63
Diluted                                 0.13       0.77          0.63



The results for the period are derived from continuing activities.
*Restated to reflect the adoption of IFRS as per note 9.

There was no recognised income  or expenditure other than the  profit
for the period/year.  Accordingly, no Statement of Recognised  Income
and Expenditure has been prepared.



PROPERTY RECYCLING GROUP PLC

Unaudited Consolidated Balance Sheet as at 30 June 2007

                                                    As at       As at
                          Notes         As at     30 June 31 December
                                      30 June        2006        2006
                                         2007   Restated*   Restated*
                                            £           £           £
Fixed assets
Tangible assets                     2,962,531   2,964,027   2,963,761
                                    2,962,531   2,964,027   2,963,761

Current assets
Stocks                              7,605,823   2,549,441   2,558,797
Debtors
       - due within one               773,335     600,866   1,012,668
      year
       - due after more
      than one  year                   96,468   1,108,918     498,176
Investments - short term
bank deposits                       6,658,735   7,658,121   6,725,330
Cash at bank and in hand               21,278     135,681      85,795
                                   15,155,639  12,053,027  10,880,766

Creditors: amounts
falling due within one            (5,325,930) (1,771,937)   (817,948)
year

Net current assets                  9,829,709  10,281,090  10,062,818

Total assets less current
liabilities                        12,792,240  13,245,117  13,026,579

Creditors: amounts
falling due after more            (1,125,780) (1,236,183) (1,191,145)
than one year
Deferred taxation           4       (526,541)   (546,010)   (561,787)

Net assets                         11,139,919  11,462,924  11,273,647


Capital and reserves
Called up share capital             1,810,000   1,810,000   1,810,000
Share premium account               6,428,529   6,428,529   6,428,529
Equity reserve                         98,454      31,284      65,146
Merger reserve                        821,833     821,833     821,833
Revaluation reserve                 1,684,961   1,636,357   1,645,255
Profit & loss account                 296,142     734,921
                                                            502,884

Equity shareholders'        7      11,139,919  11,462,924  11,273,647
funds


* Restated to reflect the adoption of IFRS as per note 9.


PROPERTY RECYCLING GROUP PLC

Unaudited Consolidated Cash Flow Statement
for the six months ended 30 June 2007


                             Notes Six months  Six months  Year ended
                                     ended 30    ended 30 31 December
                                    June 2007 June   2006        2006
                                            £           £           £
Net cash inflow/(outflow)
from operating activities      8       26,982   (263,238)   (545,155)

Returns on investments and
servicing of finance
Interest paid                        (43,191)    (52,287)   (131,016)
Interest received                     205,936     224,741     439,233

Net cash inflow from returns
on investment and servicing           162,745     172,454     308,217
of finance

Taxation                                    -           -   (606,669)

Equity dividends paid               (253,400)   (362,000)   (543,000)


Net cash outflow before
management of liquid                 (63,673)   (452,784) (1,386,607)
resources and financing

Management of liquid
resources
Movement in current asset              66,595     348,662   1,281,453
investments

Net cash inflow/(outflow)
after                                   2,922   (104,122)   (105,154)
management of liquid
resources

Financing
Repayment of loans                   (67,439)    (88,183)   (137,037)

Net cash outflow from                (67,439)    (88,183)   (137,037)
financing
Decrease in cash                     (64,517)   (192,305)   (242,191)



PROPERTY RECYCLING GROUP PLC

NOTES TO THE FINANCIAL INFORMATION

1.        Basis of preparation
The Group's previous financial statements have been prepared under UK
Generally  Accepted  Accounting  Principles  (UK  GAAP).    For   the
financial year  ending 31  December 2007,  the Group  has decided  to
prepare its annual  consolidated financial  statements in  accordance
with IFRS as adopted  by the European Union  (EU) and implemented  in
the UK.

The Group's date of  transition to IFRS was  1 January 2006 at  which
date the  Group  prepared  its  opening  IFRS  balance  sheet.    The
financial information  for  the six  months  ended 30  June  2007  is
unaudited and  has  been  prepared in  accordance  with  the  Group's
accounting policies, based  on IFRS  standards that  are expected  to
apply for the financial year 2007.  The financial information for the
six months ended 30 June 2006 is also unaudited and has been restated
under IFRS.

The presentation of financial information  under IFRS is governed  by
IFRS 1.  In some cases this will require the presentation of an  item
in a different position, or the use of a different description in the
IFRS income statement or balance sheet to that adopted in the UK GAAP
profit and loss  account or balance  sheet.  These  reclassifications
have been described in the explanatory notes.

An explanation  of  how the  transition  from  UK GAAP  to  IFRS  has
affected the Group's  results and  income statements  for the  period
ended 30 June 2006 and the year ended 31 December 2006 and the equity
and balance sheets as at 1 January 2006 (the date of transition),  30
June 2006 and 31 December 2006 is set out in note 9.

The interim financial information has  not been audited and does  not
constitute statutory accounts  within the meaning  of Section 240  of
the Companies Act  1985.   The Company's statutory  accounts for  the
year ended  31  December 2006,  prepared  under UK  GAAP,  have  been
delivered to the Registrar of  Companies; the report of the  auditors
on these accounts  was unqualified  and did not  contain a  statement
under Section 237 (2) or (3) of the Companies Act 1985.


2.       Accounting policies
The principal accounting policies adopted in the preparation of these
interim financial statements are set out below.  These policies  have
been consistently applied to all periods presented, unless  otherwise
stated.

Property Recycling's  principal  activity is  to  recycle  brownfield
sites realising value through property  sales and property rentals.
The Directors believe  that the  Group has sufficient  funds for  the
foreseeable future  and therefore  the interim  financial  statements
have been prepared on the going concern basis.

Accounting convention
The financial  statements  are  prepared under  the  historical  cost
convention,  as   modified   by  the   revaluations   of   investment
properties.

Revenue recognition
Turnover is recognised on the sale of properties held at the date  of
unconditional exchange of the contract, other income including rental
income and option  fees are recognised  in the period  to which  they
relate.

Financial instruments
Financial assets  and financial  liabilities  are recognised  in  the
Group's  balance  sheet  when  the  Group  becomes  a  party  to  the
contractual provisions of the instrument.

Trade receivables
Trade receivables are measured at initial recognition at fair value.
Appropriate  allowances  for  estimated  irrecoverable  amounts   are
recognised in the  profit and  loss account when  there is  objective
evidence that the asset is impaired.

Cash and short term bank deposits
Cash and short term  bank deposits comprise cash  on hand and  demand
deposits, and  other short-term  highly liquid  investments that  are
readily convertible to a known amount  of cash and are subject to  an
insignificant risk of changes in value.

Bank borrowings
Interest-bearing bank  loans  and  overdrafts  are  recorded  at  the
proceeds received,  net  of direct  issue  costs.   Finance  charges,
including premiums  payable on  settlement or  redemption and  direct
issue costs, are accounted for on an accruals basis in the profit and
loss account using the effective  interest rate method and are  added
to the carrying amount of the instrument to the extent that they  are
not settled in the period in which they arise.

Trade payables
Trade payables are initially measured at fair value.

Equity instruments
Equity instruments issued by the Company are recorded at the proceeds
received, net of direct issue costs.

Provisions
Provisions are recognised when the Group has a present obligation  as
a result of a past event, and  it is probable that the Group will  be
required to settle the  obligation.  Provisions  are measured at  the
directors' best estimate  of the expenditure  required to settle  the
obligation at the balance sheet  date, and are discounted to  present
value where the effect is material.

Tangible fixed assets
Tangible fixed assets other than investment properties are stated  at
cost less depreciation.    Depreciation is provided on cost in  equal
annual instalments over the  estimated useful lives  of the assets.
The rates of depreciation are as follows:


Plant and machinery 20 per cent.  per annum
Computing equipment 20 per cent.  per annum
Motor vehicles      25 per cent.  per annum


Investments
Fixed asset  investments  are  stated  at  cost  less  provision  for
impairment.

Current asset investments  are stated at  the lower of  cost and  net
realisable value.

Stocks
Stocks include  properties  that are  not  presently intended  to  be
retained in the Group's investment  portfolio.  Stock properties  are
stated at the lower of cost and net realisable value.  Cost  includes
the  cost  of  acquisition,   professional  and  planning  fees   and
construction  and  infrastructure  costs  but  excludes  overheads.
Revenue arising on the sale  of properties is recognised on  exchange
of contracts or, if exchange is conditional, on the date all material
conditions have been satisfied.   Rental income is recognised on  the
basis of amounts invoiced.

In the  event  that it  is  decided that  a  stock property  will  be
retained  as  an  investment,  it  is  transferred  to  the   Group's
investment property portfolio at the lower of cost and net realisable
value at the date of transfer.

Other stocks are stated at the lower of cost and net realisable value
after making due allowance for obsolete and slow moving stocks.

Share based payments
The Group  issues  equity-settled  share based  payments  to  certain
employees.  Equity-settled share based payments are measured at  fair
value at the date of grant.   The fair value determined at the  grant
date of  the equity-settled  share based  payments is  expensed on  a
straight line basis  over the  vesting period, based  on the  Group's
estimate of the number  of shares that will  eventually vest.   There
are both non-market and market based performance conditions  attached
to the vesting and exercising of  equity instruments.  Fair value  is
measured by use  of the Monte  Carlo Simulation.   The expected  life
used in  the model  has  been adjusted,  based on  management's  best
estimate,  for   the   effects   of   non-transferability,   exercise
restrictions and behavioural considerations.

Charges made to the profit and loss account in respect of share-based
payments are credited to retained earnings.

Deferred taxation
Deferred tax is  the tax  expected to  be payable  or recoverable  on
differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in  the
computation of taxable profit, and is accounted for using the balance
sheet  liability  method.  Deferred  tax  liabilities  are  generally
recognised for  all taxable  temporary differences  and deferred  tax
assets are recognised to the extent that it is probable that  taxable
profits  will  be  available   against  which  deductible   temporary
differences can  be utilised.  Such assets  and liabilities  are  not
recognised if  the  temporary  differences  arise  from  the  initial
recognition of goodwill or from  the initial recognition (other  than
in a  business combination)  of  other assets  and liabilities  in  a
transaction that affects  neither the tax  profit nor the  accounting
profit.

Deferred  tax  liabilities  are  recognised  for  taxable   temporary
differences arising on  investments in  subsidiaries and  associates,
and interests in joint  ventures, except where the  Group is able  to
control the reversal of the temporary differences and it is  probable
that the temporary  differences will not  reverse in the  foreseeable
future.

Current taxation
Current tax is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or  substantively
enacted by the balance sheet date.

3.        Turnover
Turnover comprises  the invoiced  value of  property sales,  property
rentals and other goods  and services which  fall within the  Group's
ordinary activities  after deduction  of  trade discounts  and  value
added tax.  The turnover and operating (loss)/profit for the  period,
all of which arises  in the United Kingdom,  are attributable to  the
Group's principal activity.

4.         Taxation
(i).        Analysis of tax charge/credit on ordinary activities.


                               Six months    Six months Year ended 31
                            ended 30 June ended 30 June December 2006
                                     2007          2006             £
                                        £             £
Current tax:
Corporation tax                    24,287       101,950        64,408
Prior year adjustment                   -             -      (76,606)

Total current tax                  24,287       101,950      (12,198)
Deferred tax:
Deferred tax charge                 4,460             -        29,134

Total tax on profit on
ordinary activities                28,747       101,950        16,936


(ii).       Deferred taxation liability/(asset)
The amounts included in the  accounts and the amounts not  recognised
are as follows:


                         Six months ended    Six months Year ended 31
                             30 June 2007 ended 30 June December 2006
                                        £          2006             £
                                                      £
Included:
Investment property               419,457       468,061       459,163
Accelerated capital
allowances                        107,084        77,949       102,624
                                  526,541       546,010       561,787
Not recognised:
Trading losses                  (110,291)     (114,795)     (111,193)


(iii).      Factors that may affect the future tax charge.
No deferred  tax  asset has  been  recognised in  respect  of  timing
differences relating primarily to tax losses as there is insufficient
evidence that the  asset would  be recoverable.   The  asset will  be
recoverable if the Group generates suitable taxable profits.

5.         Earnings per share
Basic
Basic earnings  per  ordinary share  is  calculated by  dividing  the
profit after taxation for the periods by the weighted average  number
of ordinary shares in issue as shown in the table.

                                 Six months    Six months  Year ended
                              ended 30 June ended 30 June 31 December
                                       2007          2006        2006

Profit for period                   £46,658      £277,489    £226,452

Weighted average number of       36,200,000    36,200,000  36,200,000
shares

Earnings per ordinary share
(pence)
      - Continuing operations          0.13          0.77        0.63






Diluted
Diluted earnings per  ordinary share is  calculated by adjusting  the
weighted average number  of ordinary shares  to assume conversion  of
share options as shown in the table.


                                 Six months    Six months  Year ended
                              ended 30 June ended 30 June 31 December
                                       2007          2006        2006

Profit for period                   £46,658      £277,489    £226,452

Weighted average number of       36,200,000    36,200,000  36,200,000
shares
Adjustments for share options             -        59,997           -
Weighted average number of
shares for diluted earnings      36,200,000    36,259,997  36,200,000
per share

Earnings per ordinary share
(pence)
      - Continuing operations          0.13          0.77        0.63


The Company had ordinary shares in issue of 36,200,000 as at 30 June
2007.

6.         Dividend

                                  Six months Six months Year ended 31
                               ended 30 June   ended 30 December 2006
                                        2007       June         pence
                                       pence       2006
Ordinary Dividend:                                pence

Final paid in respect of
year ended 31 December 2005
(£362,000)                                 -       1.00          1.00
Interim paid in respect of
year ended 31 December 2006
(£181,000)                                 -          -          0.50
Final paid in respect of
year ended 31 December 2006
(£253,400)                              0.70          -             -

                                        0.70       1.00          1.50


On 11 September 2007 the Board  declared an interim dividend for  the
year ended 31  December 2007 of  0.5p per share  (2006 - 0.5p)  which
totals £181,000.  In  accordance with IAS 10,  as this was  announced
after the  balance  sheet  date,  it does  not  represent  a  present
obligation at  that  date,  and  as such,  is  not  included  in  the
financial statements presented herein.  The dividend is payable on 24
October 2007 to shareholders on the register at the close of business
on 21 September  2007.

7.         Reconciliation of movements in equity shareholders' funds


                         Six months ended    Six months Year ended 31
                             30 June 2007 ended 30 June December 2006
                                        £          2006             £
                                                      £
Profit for the                     46,658       277,489       226,452
financial period
Dividends paid (note            (253,400)     (362,000)     (543,000)
6)
Revaluation reserve
adjustment                         39,706        10,805        19,703
Equity reserve                     33,308        31,284        65,146
adjustment

Net (decrease) in
shareholders' funds             (133,728)      (42,422)     (231,699)

Opening shareholders'          11,273,647    11,505,346    11,505,346
funds

Closing shareholders'          11,139,919    11,462,924    11,273,647
funds



8.         Reconciliation of operating (loss)/profit to operating
cash inflow/(outflow)


                                   Six months Six months   Year ended
                                ended 30 June   ended 30  31 December
                                         2007       June         2006
                                            £       2006            £
                                                       £

Operating  (loss)/profit             (87,340)    206,985     (64,829)
Depreciation charge                     1,230        266          532
Share based payments to
directors & employees                  33,308     31,284       65,146
Increase in stocks                (5,047,026)   (33,256)     (42,612)
Decrease/(increase) in                641,041  (682,465)    (483,525)
debtors
Increase/(decrease) in
creditors                           4,485,769    213,948     (19,867)
Net cash inflow/(outflow)
from operating activities              26,982  (263,238)    (545,155)



9.         Explanation of the transition to IFRS
For all periods up to and including the year ended 31 December  2006,
the Group prepared its financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (UK GAAP).

In preparing  these  interim  financial  statements,  the  Group  has
started from  an opening  balance  sheet as  at  1 January  2006  the
Group's date of transition to IFRS, and made these
changes in  accounting policies  and other  restatements required  by
IFRS1, for the first time adoption of IFRS.

The principal impact  of IFRS on  these interim financial  statements
has been in relation to the following:

a.                   The scope of IAS12 "Income Taxes" is wider  than
the corresponding UK GAAP standards, and requires deferred tax to  be
provided  on  all  temporary  differences  rather  than  just  timing
differences under  UK  GAAP.   In  particular this  has  resulted  in
deferred tax  assets  and liabilities  being  set up  in  respect  of
differences between the  accounts balance  sheet value  and tax  base
cost of assets.  It is  the Group's intention to retain the  revalued
property held  for the  foreseeable future.   Deferred  tax has  been
recognised on gains that would arise if the property was sold without
any rollover relief being obtained.

The reconciliation between UK  GAAP and IFRS  for the Group's  profit
and income statements for the period ended  30 June 2006 and the year
ended 31 December 2006  and
the total equity and balance sheets as at 1 January 2006 (the date of
transition), 30 June 2006 and 31 December 2006 are presented below:

Reconciliation of profit for the period ended 30 June 2006
and the year ended 31 December 2006


                                             Unaudited Unaudited Year
                                            six months          ended
                                                 ended    31 December
                                               30 June           2006
                                                  2006              £
                                                     £

Profit after tax under UK GAAP                 277,489        226,452
Deferred tax liability - investment                  -              -
property                  a.

Profit after tax under IFRS                    277,489        226,452


Reconciliation of income statement for the six months ended
30 June 2006


                                                  UK   IFRS
                                                GAAP effect      IFRS
                                                   £      £         £

Turnover                                     984,251      -   984,251
Cost of sales                              (188,119)      - (188,119)

Gross profit                                 796,132      -   796,132

Administration expenses                    (589,147)      - (589,147)

Operating profit                             206,985      -   206,985

Net interest receivable                      172,454      -   172,454

Profit before tax                            379,439      -   379,439
Taxation                                   (101,950)      - (101,950)
a.

Profit after tax                             277,489      -   277,489




Reconciliation of income statement for the year ended
31 December 2006


                                                  UK   IFRS
                                                GAAP effect        IFRS
                                                   £      £           £

Turnover                                   1,158,132   -      1,158,132
Cost of sales                              (188,119)   -      (188,119)

Gross profit                                 970,013   -        970,013

Administration expenses                  (1,034,842)   -    (1,034,842)

Operating loss                              (64,829)   -       (64,829)
Net interest receivable                      308,217   -        308,217

Profit before tax                            243,388   -        243,388
Taxation                                    (16,936)   -       (16,936)
a.

Profit after tax                             226,452   -        226,452



Reconciliation of equity as at 1 January 2006 (date of transition),
30 June 2006 and 31 December 2006


                                                  Unaudited   Unaudited   Unaudited
                                                  1 January     30 June 31 December
                                                       2006        2006        2006
                                                          £           £           £

Total equity under UK GAAP                       11,984,212  11,930,985  11,732,810
Deferred tax liability - investment
property                                          (478,866)   (468,061)   (459,163)
a.

Total equity under IFRS                          11,505,346  11,462,924  11,273,647



Reconciliation of balance sheet presentation at 1 January 2006
(Date of transition to IFRS)


                                   UK                IFRS
                                 GAAP              effect        IFRS
                                    £                   £           £
Fixed assets
Tangible assets             2,964,293                   -   2,964,293
                            2,964,293                   -   2,964,293

Current assets
Stocks                      2,516,185                   -   2,516,185
Debtors
       - due within one       276,100                   -     276,100
      year
       - due after more
      than one  year          751,219                   -     751,219
Investments - short
term bank deposits          8,006,783                   -   8,006,783
Cash at bank and in           327,986                   -     327,986
hand
                           11,878,273                   -  11,878,273

Creditors: amounts
falling due within one    (1,453,600)                   - (1,453,600)
year

Net current assets         10,424,673                   -  10,424,673

Total assets less
current liabilities        13,388,966                   -  13,388,966

Creditors: amounts
falling due after more    (1,331,264)                   - (1,331,264)
than one year
Deferred                     (73,490)           (478,866)   (552,356)
taxation
     a.

Net assets                 11,984,212           (478,866)  11,505,346


Capital and reserves
Called up share capital     1,810,000                   -   1,810,000
Share premium account       6,428,529                   -   6,428,529
Equity reserve                      -                   -           -
Merger reserve                821,833                   -     821,833
Revaluation                 2,104,418           (478,866)
reserve              a.                                    1,625,552
Profit & loss                 819,432                         819,432
account                                        -

Equity shareholders'       11,984,212           (478,866)  11,505,346
funds


Reconciliation of balance sheet presentation at 30 June 2006


                                     UK                IFRS
                                   GAAP              effect        IFRS
                                      £                   £           £
Fixed assets
Tangible assets               2,964,027                   -   2,964,027
                              2,964,027                   -   2,964,027

Current assets
Stocks                        2,549,441                   -   2,549,441
Debtors
        - due within one        600,866                   -     600,866
       year
        - due after more
       than one  year         1,108,918                   -   1,108,918
Investments - short term
bank deposits                 7,658,121                   -   7,658,121
Cash at bank and in hand        135,681                   -     135,681
                             12,053,027                   -  12,053,027

Creditors: amounts
falling due within one      (1,771,937)                   - (1,771,937)
year

Net current assets           10,281,090                   -  10,281,090

Total assets less current
liabilities                  13,245,117                   -  13,245,117

Creditors: amounts
falling due after more      (1,236,183)                   - (1,236,183)
than one year
Deferred                       (77,949)           (468,061)   (546,010)
taxation
a.

Net assets                   11,930,985           (468,061)  11,462,924


Capital and reserves
Called up share capital       1,810,000                   -   1,810,000
Share premium account         6,428,529                   -   6,428,529
Equity reserve                   31,284                   -      31,284
Merger reserve                  821,833                   -     821,833
Revaluation                   2,104,418           (468,061)   1,636,357
reserve              a.
Profit & loss                   734,921                         734,921
account                                          -

Equity shareholders'         11,930,985           (468,061)  11,462,924
funds


Reconciliation of balance sheet presentation at 31 December 2006


                                     UK               IFRS
                                   GAAP             effect        IFRS
                                      £                  £           £
Fixed assets
Tangible assets               2,963,761                  -   2,963,761
                              2,963,761                  -   2,963,761

Current assets
Stocks                        2,558,797                  -   2,558,797
Debtors
        - due within one      1,012,668                  -   1,012,668
       year
        - due after more
       than one  year           498,176                  -     498,176
Investments - short term
bank deposits                 6,725,330                  -   6,725,330
Cash at bank and in hand         85,795                  -      85,795
                             10,880,766                  -  10,880,766

Creditors: amounts
falling due within one        (817,948)                  -   (817,948)
year

Net current assets           10,062,818                  -  10,062,818

Total assets less current
liabilities                  13,026,579                  -  13,026,579

Creditors: amounts
falling due after more      (1,191,145)                  - (1,191,145)
than one year
Deferred                      (102,624)          (459,163)   (561,787)
taxation
a.

Net assets                   11,732,810          (459,163)  11,273,647


Capital and reserves
Called up share capital       1,810,000                  -   1,810,000
Share premium account         6,428,529                  -   6,428,529
Equity reserve                   65,146                  -      65,146
Merger reserve                  821,833                  -     821,833
Revaluation                   2,104,418          (459,163)   1,645,255
reserve              a.
Profit & loss                   502,884                        502,884
account                                         -

Equity shareholders'         11,732,810          (459,163)  11,273,647
funds



10.        The Interim Statement  will be posted to shareholders  and
will be available from the Company's Registered Office at Manor Farm,
Bridgham,  Norwich,  NR16  2RX   and  from  the  Company's   website:
www.propertyrecycling.co.uk.

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a d v e r t i s e m e n t