Alpha Pyrenees Trust Limited Replacement Annual Financial Report (9341C)

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Alpha Group International Plc	LSE:ALPH	London	Ordinary Share	GB00BF1TM596	ORD 0.2P

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TIDMALPH

RNS Number : 9341C

Alpha Pyrenees Trust Limited

21 March 2014

ALPHA PYRENEES TRUST LIMITED

Replacement Annual Financial Report

RNS Number : 2902C

The following amendment has been made to the 'Annual Financial Report' announcement released on 14 March 2014 at 07:00 under RNS No. 2902C.

One paragraph has been changed in the Directors' and corporate governance report: on the first page of the report, the penultimate paragraph under heading 'The Board', with regards to Directors to retire and submit themselves for re-election at the Annual General Meeting ('AGM'):

Serena Tremlett and Dick Kingston are due to retire and submit themselves for re-election by the shareholders at the upcoming AGM rather than David Rowlinson.

All other details remain unchanged.

14 March 2014

ALPHA PYRENEES TRUST LIMITED

("ALPHA PYRENEES TRUST" OR THE "TRUST" OR THE "COMPANY")

ALPHA PYRENEES TRUST POSTS RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013:

CURRENCY HEDGE TERMINATED AND LIABILITY FINANCED

23,810 SQUARE METRES OF NEW LEASES AND LEASE EXTENSIONS

NET ASSET VALUE 22.8p PER SHARE (ADJUSTED)

Alpha Pyrenees Trust Limited, the property company investing primarily in commercial real estate in France, today posts its results for the year ended 31 December 2013.

The Trust announced adjusted earnings of GBP0.1 million for the year, representing adjusted earnings per share of 0.1p. The Trust does not currently propose to pay dividends.

Key points for the year to 31 December 2013 include:

   --      Currency hedge terminated and liability financed to February 2015

-- New leases and lease extensions covering 23,810 square metres (9% of the Trust's portfolio by area) achieved since 1 January 2013

-- Weighted average lease length of 7.9 years to expiry and 4.0 years to next break following lease extensions

   --      83% of rental income derives from Grade A tenants 
   --      92% of the Trust's portfolio by value is in France; 83% is in the Paris region 
   --      Current portfolio valuation yield of 8.2% 
   --      NAV (adjusted) of 22.8p per share as at 31 December 2013 (31 December 2012: 34.0p)

-- Adjusted earnings of GBP0.1 million for the twelve months to 31 December 2013 (adjusted earnings per share of 0.1p)

Dick Kingston, Chairman of Alpha Pyrenees Trust, commented:

"During the year, the Trust finalised a solution to the settlement of the currency hedge liability that was scheduled for repayment in October 2013. The Investment Manager has continued to focus on active asset management within the existing portfolio with particular emphasis on the extension of lease terms and the letting of vacant units to secure the Trust's income. The Board is pleased to note the important progress achieved on this front in the face of a challenging business climate that has created an environment where generally, the corporate decision making process has been extended and hence the leasing environment is characterised by longer periods to complete new leasing agreements. For the Trust, the reduction in earnings reflects this difficult leasing market."

Paul Cable, Fund Manager, Alpha Real Capital LLP, commented:

"The Trust owns a diversified portfolio of properties focused primarily on the French property market which represents 92% of the total portfolio by value with 83% by value located in the Ile-de-France region which remains one of Europe's most economically important and stable markets. Despite the challenging business environment, since 1 January 2013 new leases or lease extensions were achieved on 23,810 square metres representing around 9% of the portfolio by area and 83% of the Trust's current rent roll is secured by leases to Grade A tenants. The Investment Manager will continue to concentrate on active asset management and property management initiatives to secure the Trust's income and to investigate selective opportunities to add value within the Trust's portfolio."

Contact:

Dick Kingston

Chairman, Alpha Pyrenees Trust Limited

01481 231100

Paul Cable

Fund Manager, Alpha Real Capital LLP

020 7268 0300

For more information on the Trust please visit www.alphapyreneestrust.com.

For more information on the Trust's Investment Manager please visit www.alpharealcapital.com.

FORWARD-LOOKING STATEMENTS

These results contain forward-looking statements which are inherently subject to risks and uncertainties because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Forward-looking statements are based on the Board's current view and information known to them at the date of this statement. The Board does not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in these results should be construed as a profit forecast.

About the Trust

Objective

Alpha Pyrenees Trust Limited ("the Trust" or "the Company") primarily invests in higher-yielding properties in France, particularly in the Ile-de-France region around Paris, focusing on commercial property in the office, industrial, logistics and retail sectors let to tenants with strong covenants.

The Trust seeks to provide shareholders with regular earnings whilst also having the potential for capital growth in the long term from a combination of rent increases (leases are typically indexed to increase in line with inflation) and active asset management.

The Trust seeks to diversify risk by investing in a portfolio of properties spread across different property sectors with a variety of tenants.

Dividends

The Trust does not currently propose to pay dividends.

Listing

The Trust is a closed-ended Guernsey registered investment company which has been declared under the relevant legislation to be an Authorised Closed-Ended Collective Investment Scheme. Its shares are listed on the Official List of the UK Listing Authority and traded on the London Stock Exchange.

Management

The Trust's Investment Manager is Alpha Real Capital LLP ("the Investment Manager"). Control of the Trust rests with the non-executive Guernsey-based Board of Directors.

ISA/SIPP status

The Trust's shares are eligible for Individual Savings Accounts (ISAs) and Self Invested Personal Pensions (SIPPs).

Website

www.alphapyreneestrust.com

Financial highlights

 
                                                 Year ending   Half year ending         Year ending   Half year ending 
                                            31 December 2013       30 June 2013    31 December 2012       30 June 2012 
----------------------------------------  ------------------  -----------------  ------------------  ----------------- 
 Net asset value (adjusted) (GBP'000)*                26,834             33,509              39,939             43,718 
----------------------------------------  ------------------  -----------------  ------------------  ----------------- 
 Net asset value per ordinary share 
  (adjusted)*                                          22.8p              28.5p               34.0p              37.2p 
----------------------------------------  ------------------  -----------------  ------------------  ----------------- 
 Net asset value per ordinary share                    12.7p              14.7p               17.5p              20.5p 
----------------------------------------  ------------------  -----------------  ------------------  ----------------- 
 Earnings per share (adjusted - basic & 
  diluted)**                                            0.1p               0.2p                1.9p               1.1p 
----------------------------------------  ------------------  -----------------  ------------------  ----------------- 
 Earnings per share (basic & diluted)                 (4.7)p             (2.3)p                2.2p               4.8p 
----------------------------------------  ------------------  -----------------  ------------------  ----------------- 
 Dividend per share (paid during the 
  period)***                                            0.6p               0.6p                3.0p               2.4p

*The net asset value and net asset value per ordinary share have been adjusted for the fair value movement on revaluation of the interest component of the currency swap (up to maturity in October 2013 at which point this element unwound), the interest rate swap derivatives and 50% of the deferred tax provisions; full analysis is given in note 10 to the accounts.

**The adjusted earnings per share includes adjustments for the effect of the fair value mark-to-market revaluation of the properties, currency swap (settled in October 2013) and interest rate swap derivatives, deferred tax provisions, capital element of investment managers fee, rental guarantee income and foreign exchange gains and losses. A full analysis is given in note 9 to the accounts.

*** This includes dividends paid in relation to prior periods.

Chairman's Statement

During the period, the Trust concentrated on finalising a solution to the settlement of the currency hedge liability that was scheduled for repayment in October 2013 and the Investment Manager has continued to focus on active asset management within the existing portfolio with particular emphasis on the extension of lease terms and the letting of vacant units to secure the Trust's income. The Board is pleased to note the important progress achieved on this front. Since 1 January 2013 new leases or lease extensions were achieved on a total of 23,810 square metres representing around 9% of the portfolio by area. Further detail on asset management progress appears in the Property Review section. The Investment Manager is also investigating selective opportunities to add value within the Trust's portfolio.

Results and dividend

Results for the year show adjusted earnings of GBP0.1 million and adjusted earnings per share of 0.1p (note 9). The reduction in earnings reflects the difficult leasing market and the consequent level of vacancy that persists in the portfolio.

The challenging business climate has created an environment where generally the corporate decision making process has been extended and hence the leasing environment is characterised by longer periods to complete new leasing agreements. The Trust currently has vacant space with an estimated annual rental value of approximately GBP3.3 million (EUR3.9 million) and against this backdrop it is difficult to predict the timing and level of re-leasing that will be achieved. The Trust's earnings have also been constrained by the low interest earned on cash reserves (GBP5.9 million).

The Trust has not paid any dividends for the year to 31 December 2013 and does not currently propose to pay dividends.

Revaluation and Net Asset Value

Investment properties are included in the balance sheet at an independent valuation of GBP248.1 million (EUR297.2 million) providing an average valuation yield across the portfolio of 8.2% as at 31 December 2013. The next revaluation will take place as at 30 June 2014.

The portfolio totals approximately 262,100 square metres (approximately 2.8 million square feet) and many of the tenants are well known companies belonging to large groups with strong covenants such as: Alcatel-Lucent, Aldi, Aviva, BNP Paribas, Dia, Etanco, Furnotel, Husqvarna, Klöckner Group, La Poste, MediaMarkt, McDonalds, Norauto, OCP and Vinci Group. Grade A tenants also include government or quasi-government bodies and together the rent from such tenants accounts for 83% of the Trust's rental income.

The weighted average lease length within the portfolio is currently 7.9 years to expiry and 4.0 years to the next break.

As at 31 December 2013, the adjusted net asset value per ordinary share is 22.8p (31 December 2012: 34.0p per share) (note 10). The decrease in the year is primarily due to the revaluation of investment properties combined with adverse foreign currency movements.

Portfolio Summary

 
  Country             Property       Sqm             Description   Valuation   Valuation 
                                                                        GBPm        EURm 
---------  -------------------  --------  ----------------------  ----------  ---------- 
   France    Villarceaux-Nozay    78,800           Business park       110.5       132.3 
---------  -------------------  --------  ----------------------  ----------  ---------- 
   France        Aubervilliers     8,750                 Offices        18.2        21.8 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                                                   Warehouse and 
   France        Goussainville    20,500                 offices        12.3        14.8 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                    Champs sur 
   France                Marne     5,930                 Offices         9.9        11.9 
---------  -------------------  --------  ----------------------  ----------  ---------- 
   France        Aubergenville    27,700               Logistics         9.8        11.7 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                                                  Logistics with 
   France           Athis Mons    23,280                 offices         9.4        11.3 
---------  -------------------  --------  ----------------------  ----------  ---------- 
   France       St Cyr L'Ecole     6,340                 Offices         8.1         9.8 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                                                    Offices with 
   France        Gennevilliers     3,330        light industrial         7.7         9.2 
---------  -------------------  --------  ----------------------  ----------  ---------- 
   France             Mulhouse     5,250                 Offices         7.6         9.1 
---------  -------------------  --------  ----------------------  ----------  ---------- 
   France     Roissy-en-France     7,800   Offices and warehouse         7.0         8.4 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                                                  Logistics with 
   France               Evreux    14,130                 offices         6.8         8.1 
---------  -------------------  --------  ----------------------  ----------  ---------- 
   France           Nîmes     3,100      Offices and retail         6.7         8.1 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                                                   Warehouse and 
   France       Ivry-sur-Seine     7,420                 offices         4.9         5.9 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                                                   Warehouse and 
   France              Fresnes     6,540                 offices         4.8         5.7 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                                                   Warehouse and 
   France      Vitry-sur-Seine     5,180                 offices         4.4         5.3 
---------  -------------------  --------  ----------------------  ----------  ---------- 
    Spain         Córdoba    16,880             Retail park        13.8        16.5 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                   Alcalá 
    Spain     de Guadaíra     5,700         Shopping centre         2.4         2.9 
---------  -------------------  --------  ----------------------  ----------  ---------- 
    Spain           Écija     5,950         Shopping centre         2.3         2.7 
---------  -------------------  --------  ----------------------  ----------  ---------- 
    Spain             Zaragoza     9,520              Warehouses         1.5         1.7 
---------  -------------------  --------  ----------------------  ----------  ---------- 
                         Total   262,100                               248.1       297.2

Finance

As previously reported, in November 2013 the Trust concluded an agreement with the currency hedge counterparty, Barclays Bank PLC (or "Barclays"), to finance the settlement of the net currency hedge liability until 10 February 2015, a date coterminus with the current borrowings, also provided by Barclays, which are secured against the Group's property portfolio.

The facility to finance the currency hedge liability is provided in the form of a Euro denominated loan of EUR25.0m. The Trust is permitted to repay the loan at any time after repayment of the existing secured borrowings. Interest is charged at a margin of 10% above three month Euribor and will be rolled up throughout the term. Barclays has been provided with a charge over the Trust's Nîmes property. A cash pooling arrangement over the Trust's cash flows from the whole property portfolio has been established to provide further security to the loan but still providing the Trust with working capital for its operations. No arrangement fees were incurred.

As part of the arrangements, the loan-to-value covenant on all the Trust's existing secured facilities of EUR242.4m has been waived.

Going forward the Trust does not currently propose to hedge its equity for movements in foreign currency. The Trust has a substantial natural hedge through the fact that its borrowings are denominated in the same currency as the majority of its assets.

As at 31 December 2013, the Trust has total borrowings of GBP223.2 million (EUR267.4 million) under its facilities with Barclays.

The key features of the Trust's borrowings are:

-- No loan to value ("LTV") covenant test until maturity in February 2015 on any of the Trust's properties.

-- 90% of borrowings have interest rates that are fixed to maturity at a weighted average rate of 5.26% per annum.

   --      9% of borrowings have interest rates charged at a margin of 10% above three month Euribor.

-- 1% of borrowings have interest rates charged at a margin of 2.65% above three month Euribor.

-- Interest cover ratio ("ICR") covenant on the senior borrowings is set at 115% - the Trust's weighted average ICR over the six months to 31 December 2013 was 150%.

Market outlook

-- Overall leasing activity in the French and Spanish markets has been subdued over the period reflecting economic conditions but despite this backdrop the Trust has achieved lease extensions and new leases on 23,810 square metres (9% of its portfolio) since 1 January 2013.

-- Take-up in our principal occupational markets has been adversely affected by the difficult business climate. However, in the Paris region (Ile-de-France), where 83% of the Trust's portfolio is situated, office vacancy remains at relatively low levels and significant oversupply appears unlikely in the medium term.

-- Valuation yields have been stable and investment confidence in our principal market continues.

Summary

-- The Trust owns a diversified freehold portfolio of properties totalling GBP248.1 million (EUR297.2 million) with an average valuation yield of 8.2% at the December valuation.

-- 83% of the Trust's rental income derives from Grade A tenants with a strong capacity to pay.

-- The weighted average lease length within the portfolio has increased to 7.9 years to expiry and 4.0 years to the next break.

Dick Kingston

Chairman

13 March 2014

Property review

Portfolio overview

The Trust owns a portfolio of fifteen properties in France and four properties in Spain totalling approximately 262,100 square metres (approximately 2.8 million square feet) of commercial real estate. The properties are generally well let, well located and offer good value accommodation to occupiers. Of the total property portfolio, 92% is invested in France and 8% in Spain in terms of capital value.

The valuation of the portfolio as at 31 December 2013 was approximately GBP248.1 million (EUR297.2 million) giving an average valuation yield of 8.2% with the French portfolio producing an average valuation yield of 8.2% and the Spanish portfolio 8.6% respectively. The portfolio as a whole showed a valuation decrease of 2.3% on a Euro like-for-like basis compared to 31 December 2012. This consisted of a decrease of 2.0% in the French portfolio and a decrease of 6.5% in the Spanish portfolio. The average capital value of the portfolio is approximately GBP947 (EUR1,134) per square metre (equivalent to GBP88 per square foot) and the average rental value is approximately GBP80 (EUR96) per square metre per annum (equivalent to GBP7.4 per square foot). Of the overall portfolio, 83% by value is located within the Ile-de-France region around Paris. The portfolio has 68% exposure to the French office and business park sector of which 62% of the total portfolio is in the Ile-de-France region. The reinstatement cost of the portfolio buildings has been assessed at GBP258 million (EUR309 million) representing approximately 104% of current value.

The Trust's portfolio is diversified across business sectors with 68% in offices and business park property, 25% in warehouses and 7% in retail.

The portfolio benefits from strong credit tenants with 83% of its current rent roll secured by leases to Grade A tenants (large international/national companies or public sector). Examples of those categorised as Grade A are given in the Chairman's Statement.

The portfolio has an overall level of average occupancy of 84% (unchanged from 31 December 2012) measured by rental income as a percentage of potential total income with vacancy representing 16%.

The weighted average lease length within the portfolio is currently 7.9 years to expiry and 4.0 years to the next break. The top ten tenants by rental value provide 71% of passing rent and have a weighted average lease length of 8.0 years to expiry and 4.9 years to next break.

Asset management review

The Investment Manager maintains close contact with the Trust's tenants to understand their needs and wherever possible to produce solutions which deliver value to both the tenants and investors. We constantly seek to maintain and, where possible, improve the income from each of the Trust's assets and look for opportunities to create income through value-adding refurbishment, extension and reconfiguration.

Over the period we have continued to concentrate on active asset management and property management initiatives to secure the Trust's income and we are pleased to report a number of important achievements since 1 January 2013 in the following areas:

   --      extending the lease maturity profile of the property portfolio through lease extensions and 
   --      letting of vacant units.

The Investment Manager remains vigilant to ensuring service charges are controlled, the annual level of property costs is closely monitored and additional sources of income are identified.

Since 1 January 2013, new leases and lease extensions covering approximately 23,810 square metres (9% of the Trust's portfolio by area) have been achieved. As detailed in the half year report, new leases and lease extensions covered a total of approximately 16,580 square metres. Since the half year report, new leases and lease extensions covering approximately 7,230 square metres have been completed and these are detailed below.

FRANCE

Vitry - existing tenant, Mediapost extended their lease until March 2017 on their light industrial unit of 895 square metres and a new 3/6/9 year lease from October 2013 was signed with SG Aixin, a painting and decorating company, on a 350 square metre light industrial.

Mulhouse - Eiffage, a leading construction company, agreed a new 3/6/9 year lease on 560 square metres of vacant offices from June 2014 with a break option at the end of the second year and Randstad, a global employment agency, have taken a new 3/6/9 year lease from March 2014 on 390 square metres of vacant offices.

Ivry - JC Decaux the leading outdoor advertising company, has taken a lease to December 2014 on a vacant warehouse unit of 1,190 square metres.

SPAIN

Cordoba - existing tenants, Elefante Azul, McDonalds and Jugetilandia have extended their leases to December 2014, January 2015 and February 2015 respectively on retail units totalling 2,040 square metres.

Alcala - existing tenant Aldi has extended their lease to October 2015 on a 1,225 square metre supermarket unit and Bon Sabor a specialist meat supermarket has signed a new 10 year lease with 2 year rolling break options on a vacant unit of 580 square metres.

Market overview

France

The French economy remained broadly flat in 2013 with little or no growth in gross domestic product. Manufacturing output was 0.9% higher year-on-year. The unemployment rate for mainland France has risen to 10.5% and linked to this and the wider economic context, household spending remains muted. Inflation has moderated further with the growth rate of the Consumer Prices Index standing at 0.7% per annum at the end of December 2013. The economy is expected to remain generally subdued in 2014.

Against this challenging economic background, the investment market remained robust with approximately EUR15.5 billion invested in commercial real estate in France over the course of 2013 compared to EUR14.5 billion in 2012. Traditional French investors represented approximately 60% of the market with the next largest group being North American investors representing 12%. Office investment remained the highest volume sector and accounted for EUR10.4 billion representing 67% of total investment in France. Logistics and industrial investment increased to total EUR1.5 billion, an increase of 14% on 2012.

Of the Trust's total property portfolio, 92% is in France, 83% is in the Ile-de-France and 62% is in Ile-de-France office and business park space.

The Economy of Ile-de-France

Paris and the surrounding region, better known as Ile-de-France, accounts for about a fifth of the French population but contributes nearly one third of French GDP. It is one of the main players in the global economy and is the largest European region by GDP. By population the Ile-de-France metropolis ranks twentieth globally, but ranked by GDP it is the fifth major metropolis in the world after the metropolitan areas of Tokyo, Greater New York, Los Angeles and Osaka.

In Europe, the only city that can compare to Paris is London and taking the wider metropolitan areas these two regions can be considered broadly similar in GDP terms. However it should be noted that the GDP of these two metropolitan areas far exceeds those of all other European cities, whether considering the Dutch Randstad, the conurbation Rhine-Ruhr and Rhine-Main, Brussels or Berlin.

With over 5.3 million jobs, Ile-de-France holds a prominent place in the national economy and many national and international companies have their headquarters in the region because of its high quality as a business location. The Ile-de-France has the world's third largest concentration of Fortune 500 head offices.

The Ile-de-France economy remains extremely diverse compared to other cities of its size with a large industrial base and one of the most important agricultural areas in France as well as being a pre-eminent global tourist destination.

Its economy is more diversified than London (with its emphasis on financial markets) or Los Angeles (film and entertainment) and Paris is not overly dependent on any one sector. Even categorizing Ile-de-France as predominantly a services-based economy, its industrial base which accounts for 16% of the region's GDP, remains very important as the region is a major European production centre, which has preserved its competitiveness by increasing its proportion of investment in research and development where it ranks as Europe's number one region for R&D expenditure and personnel. All of these activities are supported by an integrated freight and transport network.

Office take-up in the Ile-de-France for 2013 was affected by the poor economic climate and unclear business outlook. In this environment companies have been reluctant to commit to new premises and many have postponed plans to move, instead opting to renegotiate leases with existing landlords. Take-up reached close to 1.85 million square metres, a decline of about 25% over the previous year. However, take up in the fourth quarter of 2013 was the most active for the year and at just over 0.5 million square metres was 15% higher than the preceding quarter. The most active business sectors were the industrial sector (23% of take-up by volume), the finance and insurance sector (19%) the public sector (12%) and the legal and consultancy sector (11%) together accounting for 65% of the total take-up in 2013.

The average office rent in Ile-de-France was broadly stable over the year at EUR294 per square metre per annum. The office vacancy rate for the Paris region remains low but increased slightly to 7%. On the supply side there will be little speculative development due to the difficulty in finding finance and the risks associated with the current market conditions.

National take-up in the logistics sector reached approximately 2.6 million square metres in 2013, which was 19% above the level in 2012. The largest share of transaction volume took place in Ile-de-France with take-up of 0.5 million square metres, a similar volume to 2012, representing just under 20% of national take-up.

Spain

Gross domestic product contracted by 0.1% overall in 2013. However, in recent quarters there have been more encouraging signs of growth. In Q3 and Q4 2013 gross domestic product showed quarter-on-quarter growth rates of 0.1% and 0.3% respectively and these represented the first quarterly growth rates since Q1 2011. The government's efforts to reform the labour market appear to be starting to have an effect with the unemployment rate having decreased 1% from Q2 2013 to stand at 26% in the fourth quarter of 2013. The near term outlook for the Spanish economy remains subdued.

Rental indexation

After thirteen consecutive quarters of annualised growth, the INSEE Construction Cost Index, applicable to the Trust's leases in France, turned negative as at Q2 2013 (-1.74%) and the annual indexation base as at Q3 2013 stood at -2.18%. The Spanish Consumer Price Index, applicable to the Trust's leases in Spain, was running at an annualised rate of increase of 0.3% as at the end of December 2013.

Paul Cable

For and on behalf of the Investment Manager

13 March 2014

Directors

Dick Kingston (aged 66)

Chairman

Dick Kingston qualified as a Chartered Accountant and was, until December 2006, an executive director of Slough Estates Plc (now SEGRO Plc) ("Slough"), one of the largest London Stock Exchange listed property companies. He was chairman of their continental European real estate activities for his last three years at Slough and Group Finance Director there for nine years up to December 2005. Previously he was Group Financial Controller at Slough for nine years and prior to that was responsible for group financial control at Hawker Siddeley Group.

He was non-executive chairman of listed company Sirius Real Estate Limited and was a non-executive director of Mersey Docks and Harbour Company.

David Rowlinson (aged 51)

Director

David has 30 years' experience in the financial services industry. The majority of David's experience has been gained from working in the fiduciary sector in Guernsey. However, he has also worked in Gibraltar and Switzerland and served in a key role working for an investment management company in Guernsey.

After playing a major part in establishing a large trust company in Guernsey in 1997 which he left in June 2006, David established Liberation Management Limited ("LML") in 2007. David is the Managing Director of LML.

David has been a full member of The Society of Trust and Estate Practitioners since 1994.

David Jeffreys (aged 54)

Director

David Jeffreys qualified as a Chartered Accountant with Deloitte Haskins and Sells in 1985. He works as an independent non-executive director to a number of Guernsey based investment fund companies and managers and is a Guernsey resident.

From 2007 until 2009 David was the Managing Director of EQT Funds Management Limited, the Guernsey management office of the EQT group of private equity funds. He was previously the Managing Director of Abacus Fund Managers (Guernsey) Limited between 1993 and 2004, a third party administration service provider to primarily corporate and fund clients.

In addition to the Company, David is a director of the following listed companies: Alpha Real Trust Limited, Ingenious Media Active Capital Limited, PFB Data Centre Fund Limited and Tetragon Financial Group Limited.

Phillip Rose (aged 54)

Director

Phillip Rose is a Fellow of the Securities Institute and holds a Master of Law degree. He has over 30 years' experience in the real estate, funds management and banking industries in Europe, the USA and Australasia. He has been the Head of Real Estate for ABN AMRO Bank, Chief Operating Officer of European shopping centre investor and developer TrizecHahn Europe, Managing Director of retail and commercial property developer and investor Lend Lease Global Investment and Executive Manager of listed fund General Property Trust.

Phillip is currently CEO of Alpha Real Capital LLP and is a member of the Management Committee of the Hermes Property Unit Trust and its Audit Committee.

Serena Tremlett (aged 49)

Director

Serena has over 25 years' experience in financial services, specialising in closed-ended property and private equity funds and fund administration over the last 17 years.

She is a non-executive director on the listed company boards of Alpha Pyrenees Trust, Alpha Real Trust, Ingenious Media Active Capital and those of Stenham Property, in addition to various unlisted property and private funds and general partners. Serena was previously company secretary (and a director) of Assura Group, at that time a FTSE 250 company listed on the London Stock Exchange, investing in primary healthcare property and ran Assura's Guernsey head office.

Prior to working for Assura, Serena was head of Guernsey property funds at Mourant International Finance Administration (now State Street) for two years and worked for Guernsey International Fund Managers (now Northern Trust) for seven years where she sat on a number of listed and unlisted fund boards. Since 2008, Serena is co-founder and managing director of Morgan Sharpe Administration, a specialist closed-ended fund administrator.

Directors' and corporate governance report

The Directors present their report and financial statements of the Company and the Group for the year ended 31 December 2013.

Principal activities and status

Since its incorporation on 16 November 2005, the Company, an authorised closed-ended Guernsey registered investment company, has carried on the business of a property investment company, investing in commercial property in France and Spain.

Its shares are listed on the Official List of the UK Listing Authority and have been traded on the London Stock Exchange since 29 November 2005.

Business review, results and dividends

The Chairman's statement contains a review of the Group's business for the year.

The results for the year are set out in the financial statements.

One dividend has been paid during the year under review as follows:

 
                           Payment date   Amount per 
                                               share 
-----------------------  --------------  ----------- 
 Third interim for the        7 January 
  prior year                       2013         0.6p

The Trust does not currently propose to pay further dividends.

Corporate governance

The Company is authorised by the Guernsey Financial Services Commission ('GFSC') and for this reason is required to follow the principles and guidance set out in the Finance Sector Code of Corporate Governance issued by the GFSC and effective from 1 January 2012 ('Guernsey Code').

As a Guernsey registered company, the Company is not required to comply with The UK Corporate Governance Code ('UK Code'). However, the Directors do take into consideration the UK Code in determining its governance procedures whilst also taking into account the size of the Company, the nature of its business and its entirely non-executive board.

The Board

Biographies of the Directors are set out above.

The Directors' interests in shares of the Company as at 31 December 2013 are set out below and there have been no changes in such interests up to the current date:

 
                    Number of ordinary   Number of ordinary 
                           shares 2013          shares 2012 
-----------------  -------------------  ------------------- 
 Dick Kingston                 710,616              199,125 
-----------------  -------------------  ------------------- 
 David Jeffreys                250,000              250,000 
-----------------  -------------------  ------------------- 
 Phillip Rose                1,290,079            1,290,079 
-----------------  -------------------  ------------------- 
 David Rowlinson                     -                    - 
-----------------  -------------------  ------------------- 
 Serena Tremlett               121,472               23,486

Non-executive Directors are not appointed for specified terms. However, appointments of Board members can be terminated at any time without penalty and the Company's Articles of Association ("Articles") require each Director to retire and submit himself/herself to re-election by the shareholders at every third year. In addition, the Board believes that continuity and experience adds to its strength.

The Annual General Meeting of the Company will take place on 25 April 2014. At this meeting, Phillip Rose, Serena Tremlett and Dick Kingston will retire and submit themselves for re-election. The remainder of the Board recommend their re-appointment. Phillip Rose is a member of the Investment Manager and, under the terms of the Company's Prospectus dated 23 November 2005, submits himself for annual re-election.

Individual Directors may seek independent legal advice in relation to their duties on behalf of the Company.

Senior Independent Director

The Board has appointed David Jeffreys as its Senior Independent Director and has agreed that he will be available for discussions with shareholders independently of his peers, to the extent appropriate.

Operations of the Board

The Board's primary role is to review matters which are of strategic importance to the Company, including the following:

1) Setting, and continuing to review, the objectives and strategy of the Company, taking into account market conditions.

   2)    Reviewing the capital structure of the Company including gearing.

3) Appointing the Investment Manager, administrator and other appropriately skilled service providers; monitoring their effectiveness and performance through regular reports and meetings.

4) Reviewing the Company's performance including net asset value, earnings per share and payment of dividends.

The Board considers these matters at its quarterly meetings and at an additional annual strategy session.

The Board meets at least four times per annum and on an ad-hoc basis to consider specific issues reserved for decision by the Board including all potential acquisitions and disposals, significant capital expenditure and leasing matters and decisions relating to the Company's financial gearing.

Certain matters relating to the implementation of strategy are delegated either to the Investment Manager or the administrator but the performance of such delegation by these independent agents is regularly monitored by the Board.

At the Board's quarterly meetings it considers papers circulated in advance including reports provided by the Investment Manager and the administrator in its capacity as Company Secretary. The Investment Manager's report comments on:

-- The French and Spanish property markets including recommendations for any changes in strategy that the Investment Manager considers may be appropriate.

   --      Performance of the Group's portfolio and key asset management initiatives.

-- Transactional activity undertaken over the previous quarter and being contemplated for the future.

   --      The Group's financial position including relationships with bankers and lenders.

The administrator provides a quarterly compliance, company secretarial and regulatory report.

Together, these reports enable the Board to assess the success with which the Group's strategy is being implemented, consider any relevant risks (such as the general economic climate) and to consider how they should be properly managed.

Board and Director appraisals

The Board carries out an annual review of its composition and performance (including the performance of individual Directors) and that of its standing committees. Such appraisal includes reviewing the performance and composition of the Board (and whether it has an appropriate mix of knowledge, skills and experience), the relationships between the Board and the Investment Manager and administrator, the processes in place and the information provided to the Board and communication between Board members.

Board meeting attendance

The table below shows the attendance at quarterly Board meetings during the year to 31 December 2013:

 
 Director           No of meetings   No of meetings 
                       attended         eligible 
                                        to attend 
-----------------  ---------------  --------------- 
 Dick Kingston            8                12 
-----------------  ---------------  --------------- 
 David Jeffreys           11               12 
-----------------  ---------------  --------------- 
 Phillip Rose             4                12 
-----------------  ---------------  --------------- 
 David Rowlinson          8                12 
-----------------  ---------------  --------------- 
 Serena Tremlett          12               12

Directors' and officers' insurance

An appropriate level of Directors' and Officers' insurance is maintained whereby Directors are indemnified against liabilities to third parties to the extent permitted by Guernsey company law.

Board Committees

The Board has established three standing committees, all of which operate under detailed terms of reference, copies of which are available on request from the Company Secretary.

Audit Committee

The Audit Committee consists of David Jeffreys (Chairman), Dick Kingston, David Rowlinson and Serena Tremlett. The Board is satisfied that David Jeffreys continues to have the requisite recent and relevant financial experience to fulfil his role as Chairman of the Audit Committee.

Role of the Committee

The role of the Audit Committee, which meets at least twice a year, includes:

-- The engagement, review of the work carried out by and the performance of the Company's external auditor.

-- To monitor and review the independence, objectivity and effectiveness of the external auditor.

-- To develop and apply a policy for the engagement of the external audit firm to provide non-audit services.

-- To assist the Board in discharging its duty to ensure that financial statements comply with all legal requirements.

-- To review the Company's financial reporting and internal control policies and to ensure that the procedures for the identification, assessment and reporting of risks are adequate.

   --      To review regularly the need for an internal audit function.

-- To monitor the integrity of the Company's financial statements, including its annual and half year reports and announcements relating to its financial performance, reviewing the significant financial reporting issues and judgements which they contain.

   --      To review the consistency of accounting policies and practices.

-- To review and challenge where necessary the financial results of the Company before submission to the Board.

The Audit Committee makes recommendations to the Board which are within its terms of reference and considers any other matters as the Board may from time to time refer to it.

Committee meeting attendance

 
 Director           No of meetings   No of meetings 
                       attended         eligible 
                                        to attend 
-----------------  ---------------  --------------- 
 David Jeffreys           4                4 
-----------------  ---------------  --------------- 
 Dick Kingston            3                4 
-----------------  ---------------  --------------- 
 David Rowlinson          2                4 
-----------------  ---------------  --------------- 
 Serena Tremlett          4                4

Policy for non audit services

The Committee has adopted a policy for the provision of non-audit services by its external auditor, BDO Limited and reviews and approves all material non-audit related services in accordance with the need to ensure the independence and objectivity of the external auditor. No services, other than audit-related ones, were carried out by BDO Limited during 2013.

Internal audit

The Board relies upon the systems and procedures employed by the Investment Manager and the administrator which are regularly reviewed and are considered to be sufficient to provide it with the required degree of comfort. Resulting from this and the fact that the Group only has one employee, the Board continues to believe that there is no need for an internal audit function, although the Audit Committee considers this annually, reporting its findings to the Board.

Nomination Committee

The Nomination Committee consists of Serena Tremlett (Chairman), David Jeffreys, Dick Kingston, Phillip Rose and David Rowlinson.

The Committee's principal task is to review the structure, size and composition of the Board in relation to its size and position in the market and to make recommendations to fill Board vacancies as they arise and it meets at least annually.

Committee meeting attendance

 
 Director           No of meetings   No of meetings 
                       attended         eligible 
                                        to attend 
-----------------  ---------------  --------------- 
 Serena Tremlett          1                1 
-----------------  ---------------  --------------- 
 David Jeffreys           1                1 
-----------------  ---------------  --------------- 
 Dick Kingston            1                1 
-----------------  ---------------  --------------- 
 Phillip Rose             1                1 
-----------------  ---------------  --------------- 
 David Rowlinson          -                1

Remuneration Committee and attendance

The Remuneration Committee consists of the independent non-executive Directors being David Jeffreys (Chairman), Dick Kingston, David Rowlinson and Serena Tremlett.

The Board has approved formal terms of reference for the Committee and a copy of these is available on request from the Company Secretary.

As the Company comprises only non-executive directors, the Committee's main role is to determine their remuneration within the cap set out in the Company's Articles. The Remuneration Committee met once during 2013.

Remuneration report

The aggregate fees payable to the Directors are limited to GBP200,000 per annum under the Company's Articles and the annual fees payable to each Director have not changed since the Company's shares were listed in 2005. The fees payable to the Directors are expected to reflect their expertise, responsibilities and time spent on the business of the Company, taking into account market equivalents, the activities and the size of the Company and market conditions. Under their respective appointment letters, each director is entitled to an annual fee together with a provision for reimbursement for any reasonable out of pocket expenses.

During the year the Directors received the following emoluments in the form of fees from the Company:

 
                              Year ending         Year ending 
                         31 December 2013    31 December 2012 
                                      GBP                 GBP 
---------------------  ------------------  ------------------ 
 Dick Kingston                     30,000              30,000 
---------------------  ------------------  ------------------ 
 Christopher Bennett                    -              12,554 
---------------------  ------------------  ------------------ 
 David Jeffreys                    23,000              23,000 
---------------------  ------------------  ------------------ 
 Phillip Rose                      20,000              20,000 
---------------------  ------------------  ------------------ 
 David Rowlinson                   20,000              13,333 
---------------------  ------------------  ------------------ 
 Serena Tremlett                   20,000              20,000 
---------------------  ------------------  ------------------ 
 Total                            113,000             118,887

Internal control and risk management

The Board understands its responsibility for ensuring that there are sufficient, appropriate and effective systems, procedures, policies and processes for internal control of financial, operational, compliance and risk management matters in place in order to manage the risks which are an inherent part of business. Such risks are managed rather than eliminated in order to permit the Company to meet its financial and other objectives.

As the Company has only one employee, the Board reviews the internal procedures of both its Investment Manager and its administrator upon which it is reliant. The Investment Manager has a schedule of matters which have been delegated to it by the Board and upon which it reports to the Board on a quarterly basis. These matters include quarterly management accounts and reporting both against key financial performance indicators and its peer group. Further, a compliance report is produced by the administrator for the Board on a quarterly basis.

The Company maintains a risk management framework which considers the non-financial as well as financial risks and this is reviewed by the Audit Committee prior to submission to the Board.

Investment management agreement

The Company has an agreement with the Investment Manager. This sets out the Investment Manager's key responsibilities, which include proposing a property investment strategy to the Board, identifying property investments to recommend for acquisition and arranging appropriate lending facilities. The Investment Manager is also responsible to the Board for all issues relating to property asset management.

Substantial shareholding

Shareholders with holdings of more than 3 per cent of the issued ordinary shares of the Company as at 20 February 2014 were as follows:

 
 Name of investor                    No. of   % held 
                                   ordinary 
                                     shares 
------------------------------  -----------  ------- 
 Antler Investment Holdings 
  Limited                        21,437,393    18.22 
------------------------------  -----------  ------- 
 Alpha Real Capital LLP           9,400,000     7.99 
------------------------------  -----------  ------- 
 Hargreaves Lansdown Asset 
  Management                      7,525,014     6.40 
------------------------------  -----------  ------- 
 Barclays Wealth Management 
  (UK)                            6,586,766     5.60 
------------------------------  -----------  ------- 
 TD Direct Investing              5,912,497     5.03 
------------------------------  -----------  ------- 
 Mrs Rosemary J. Skelley          5,857,607     4.98 
------------------------------  -----------  ------- 
 Investec Wealth & Investment     4,400,618     3.74

On 28 February 2014, the Company announced that Mr Richard Peskin reached a 5.10% shareholding (6,000,000 ordinary shares).

Shareholder relations

The Board places high importance on its relationship with its shareholders, with members of the Investment Manager's Investment Committee making themselves available for meetings with key shareholders and sector analysts. Reporting of these meetings and market commentary is received by the Board on a quarterly basis to ensure that shareholder communication fulfils the needs of being useful, timely and effective. One or more members of the Board and the Investment Manager will be available at the Annual General Meeting to answer any questions that shareholders attending may wish to raise.

Directors' Responsibilities Statement

Company law requires the Directors to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the Company and of the Group at the end of the year and of the profit or loss of the Company and the Group for that year.

In preparing those financial statements, the Directors are required to:

   (1)   select suitable accounting policies and then apply them consistently; 
   (2)   make judgements and estimates that are reasonable and prudent;

(3) state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

(4) prepare the financial statements on the going concern basis unless it is appropriate to assume that the Company and Group will not continue in business.

So far as each of the Directors are aware, there is no relevant information of which the Company's auditor is unaware, and they have taken all the steps they ought to have taken as Directors to make themselves aware of any relevant information and to establish that the Company's auditor is aware of that information.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and of the Group and to enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Company and Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors confirm that they have complied with the above requirements in preparing the financial statements.

Going concern

The Group's existing borrowing facilities with Barclays Bank PLC terminate on 10 February 2015 and this represents a significant medium-term liability. This creates a material uncertainty that could cast significant doubt about the Group and Company's ability to continue as a going concern. However, whilst recognising this uncertainty, the Board has a reasonable expectation that a combination of realising equity in selective asset sales, combined with the potential availability of alternative financing options, will support the settlement of the bank borrowings as they mature in February 2015. Therefore, the Board believes it is appropriate to continue to prepare the Group and Company financial statements on a going concern basis.

Annual General Meeting

The AGM will be held in Guernsey at 9 a.m. on 25 April 2014 at Old Bank Chambers, La Grande Rue, St Martin's, Guernsey. The meeting will be held to receive the Annual Report and Financial Statements, re-elect Directors and propose the reappointment of the auditor and that the Directors be authorised to determine the auditor's remuneration.

Auditor

BDO Limited has expressed its willingness to continue in office as auditor of the Company.

By order of the Board,

David Jeffreys Serena Tremlett

Director Director

Directors' statement pursuant to the Disclosure and Transparency Rules

Each of the Directors, whose names and functions are listed in the Directors Report confirm that, to the best of each person's knowledge and belief:

-- The financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group and Company, and

-- The Chairman's Statement and the Property Review includes a fair review of the development and performance of the business and the position of the Company and Group and note 21 to the financial statements provides a description of the principal risks and uncertainties that they face.

By order of the Board,

David Jeffreys Serena Tremlett

Director Director

Corporate responsibility - benefits, risks and controls

The Board has reviewed the Company's Corporate Responsibility Policy and considers this to be appropriate for the Company. The Company's policy is as follows:

Alpha Pyrenees is committed to delivering sustainable investment returns in a way that delivers positive environmental, social and economic benefits. The Company recognises that the way in which buildings are designed, built, managed and occupied, significantly influences their impact on the environment and affected communities and it seeks to manage these issues.

The Company believes that through the implementation of socially responsible policies the Company can manage effectively our sustainability related risks, associated with, for example, climate change (more severe and regular floods, increasing storm damage costs and rising energy prices), site contamination and remediation, use of hazardous materials, waste management (rising landfill and disposal costs) and local community relations.

The Company's standard business process ensures that appropriate environmental reports are obtained as part of the due diligence process for property acquisitions and the Company assesses the accessibility of each property acquisition to public transportation.

The Company's managers and appointed agents are required to comply with all relevant laws and regulations affecting the Company's business, and managers are expected to be aware of the environmental issues associated with property investment including environmental health and safety legislation, energy use, pollution and waste management.

Independent auditors' report

To the members of Alpha Pyrenees Trust Limited

We have audited the financial statements of Alpha Pyrenees Trust Limited for the year ended 31 December 2013 which comprise the Group and Parent Company Balance Sheets, the Group and Parent Company Statements of Comprehensive Income, the Group and Parent Company Statements of Cash Flows, the Group and Parent Company Statements of Changes in Equity and the related notes 1 to 22. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the Company's members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. Our audit work is undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the directors and auditor

As explained more fully in the Directors' Responsibilities Statement within the Directors' Report, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council's (FRC's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group's and Parent Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non--financial information in the annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent misstatements or inconsistencies we consider the implications for our report.

Opinion on the financial statements

In our opinion the financial statements:

-- give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 31 December 2013 and of the Group's loss and the Parent Company's loss for the year then ended;

   --      have been properly prepared in accordance with IFRSs as adopted by the European Union; and

-- have been properly prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.

Emphasis of matter

In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosures made in note 2 to the financial statements concerning the Group and Company's ability to continue as a going concern.

As disclosed in note 2 the Group's borrowings are due for repayment on 10 February 2015. Should the strategy of realising equity in selective asset sales, combined with the potential availability of alternative financing options not be completed as planned, then the Group would require continued financing facilities beyond that date. This indicates the existence of a material uncertainty which may cast doubt about the Group and Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:

   --      proper accounting records have not been kept by the Parent Company; or 
   --      the financial statements are not in agreement with the accounting records; or

-- we have failed to obtain all the information and explanations, which, to the best of our knowledge and belief, are necessary for the purposes of our audit.

.......................................................

Richard Michael Searle FCA

For and on behalf of BDO Limited

Chartered Accountants and Recognised Auditor

Place du Pré

Rue du Pré

St Peter Port

Guernsey

Date: 13 March 2014

Consolidated statement of comprehensive income

 
                                            For the year ended               For the year ended 
                                             31 December 2013                 31 December 2012 
-----------------------------------  -------------------------------  ------------------------------- 
                                       Revenue    Capital      Total    Revenue    Capital      Total 
                              Notes    GBP'000    GBP'000    GBP'000    GBP'000    GBP'000    GBP'000 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Income 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 Revenue                          3     22,699          -     22,699     22,909          -     22,909 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 Property operating 
  expenses                             (6,502)          -    (6,502)    (6,143)          -    (6,143) 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 Net rental income                      16,197          -     16,197     16,766          -     16,766 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Expenses 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 Net change in losses 
  on revaluation of 
  investment properties          12          -    (6,934)    (6,934)          -    (1,366)    (1,366) 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 Investment Manager's 
  fee                                  (1,933)      (828)    (2,761)    (1,879)      (805)    (2,684) 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 Other administration 
  costs                           5    (1,229)          -    (1,229)    (1,316)          -    (1,316) 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Operating profit/(loss)                13,035    (7,762)      5,273     13,571    (2,171)     11,400 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Finance income                   4         23      8,778      8,801         88      8,146      8,234 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 Finance costs                    6   (12,933)    (5,444)   (18,377)   (11,461)      (862)   (12,323) 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Profit/(loss) before 
  taxation                                 125    (4,428)    (4,303)      2,198      5,113      7,311 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Taxation                         7          -    (1,273)    (1,273)          -    (4,714)    (4,714) 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Profit/(loss) for 
  the year                                 125    (5,701)    (5,576)      2,198        399      2,597 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Other comprehensive 
  income 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 Foreign exchange 
  gains/(losses) on 
  translation of foreign 
  operations (translation 
  reserve)                                   -        680        680          -      (289)      (289) 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Other comprehensive 
  income/(expense) 
  for the year                               -        680        680          -      (289)      (289) 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Total comprehensive 
  income/(expense) 
  for the year                             125    (5,021)    (4,896)      2,198        110      2,308 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Earnings per share 
  - basic & diluted               9                           (4.7)p                             2.2p 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  --------- 
 
 Adjusted earnings 
  per share 
  - basic & diluted               9                             0.1p                             1.9p 
--------------------------  -------  ---------  ---------  ---------  ---------  ---------  ---------

The total column of this statement represents the Group's statement of comprehensive income, prepared in accordance with IFRS. The revenue and capital columns are supplied as supplementary information permitted under IFRS. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of the parent company. There are no non-controlling interests.