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CAL Capital & Regional Plc

51.90
0.10 (0.19%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Capital & Regional Plc LSE:CAL London Ordinary Share GB00BL6XZ716 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.10 0.19% 51.90 51.40 52.40 260,816 16:35:01
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Capital & Regional plc Half-year Report (5882N)

10/08/2017 7:01am

UK Regulatory


Capital & Regional (LSE:CAL)
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From Mar 2019 to Mar 2024

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TIDMCAL

RNS Number : 5882N

Capital & Regional plc

10 August 2017

10 August 2017

Capital & Regional plc

Half Year Results to 30 June 2017

Capital & Regional plc (LSE: CAL), the UK focused REIT with a portfolio of dominant in-town community shopping centres, today announces its half year results to 30 June 2017.

Lawrence Hutchings, Chief Executive, said: "This is a strong set of results which reflect that whilst elements of the retail sector may face challenges, the continued strong occupier demand for our centres as well as the local and convenient nature of our assets, which cater for the non-discretionary and value-orientated needs of our shoppers, gives us great comfort over the security of our income. This, allied with our proven track record of driving income and delivering results through selective but significant capital expenditure investment, underpins the future growth potential of the business. We also see opportunity to further enhance profitability by seeking greater efficiency in our operating platform and streamlining our structure through various initiatives. Some of these are already delivering tangible results and we are initially targeting annualised savings of at least GBP1.8 million by 2018, equivalent to a c 20% reduction in 2016 central costs.

"Reflecting the strong feeling of confidence in the future growth prospects of the business, the Board has announced an Interim dividend of 1.73p, representing a 6.8% increase on the prior year. With the second half of the year set to comparatively benefit from several major lettings coming on stream and the timing of recent acquisitions and disposals we expect the Full Year 2017 Dividend will be at the top end of our targeted growth range of at least 5% to 8% per annum."

Highlights:

Income growth underpins strong financial results and supports an increased dividend, with further improvements expected in H2

-- Adjusted Profits(1) up 6.6% to GBP14.5 million (June 2016: GBP13.6 million) setting the business on track for its fourth consecutive year of Adjusted Profit growth

   --     IFRS Profit for the period of GBP12.1 million (June 2016: Loss of GBP4.4 million) 

-- Like-for-like(2) Net Rental Income up 0.5% despite the loss of H1 2016 BHS income, up 4.4%, once adjusted for this

-- 34 new lettings and renewals achieved at an average 21%(3) premium to previous rents and an 8.4%(3) premium to ERV. Passing rent up 1.7% on a like-for-like basis

-- Full period benefit of Ilford acquisition, and timing of Camberley sale in November 2016, will strengthen comparative second half year-on-year performance

-- Enhanced focus on cost efficiencies targeting annualised savings of at least c GBP1.8 million by 2018

-- Interim dividend increased by 6.8% to 1.73p per share (June 2016: 1.62p). Second half improvements underpin target for total Full Year 2017 dividend at top end of the stated 5% to 8% per annum growth range

Capex investment and specialist asset management continue to drive performance

   --     GBP80 million Capex plan gathering further momentum with a number of significant initiatives substantially completed during the period, including: 

o Blackburn - Wilko opening in September 2017 from the refurbished former BHS unit

o Walthamstow - new units to Lidl, The Gym and Gökyüzü due to open in Q4 2017

o Wood Green - GBP6.4 million new Travelodge scheduled for Q3 2017 opening

-- These lettings will bring GBP1.4 million of annualised rent on stream in H2 2017 from a total capex spend of GBP11.6 million

-- Planning applications to deliver leisure transformation at Hemel Hempstead and Walthamstow extension submitted

-- Strong occupier demand reflected in continued high occupancy at 95.5% (31 December 2016: 95.4%)

-- 35.4 million shopper visits in first half of the year representing a modest 0.9% like-for-like(2) fall, though once again significantly outperforming the national index which was -2.7%

Robust balance sheet with long term debt security

-- Basic and EPRA NAV per share resilient, at 68p and 67p respectively (December 2016: both 68p)

-- GBP30 million Revolving Credit Facility extended to January 2022, meaning all Group debt has minimum tenure of 4.5 years. Weighted average debt maturity of 7.8 years(4)

-- Cost of debt reduced to 3.25%(5) following GBP372.5 million January 2017 refinancing leading to annual saving of c GBP0.5 million

 
                                      6 months         Year     6 months 
                                            to           to           to 
                                     June 2017     Dec 2016    June 2016 
 Net Rental Income(6)                 GBP25.0m     GBP50.4m     GBP25.4m 
 Adjusted Profit(1)                   GBP14.5m     GBP26.8m     GBP13.6m 
 Adjusted Earnings per share(1)          2.06p        3.82p        1.94p 
 IFRS Profit/(Loss) for 
  the period                          GBP12.1m    GBP(4.4)m      GBP7.2m 
 Total dividend per share                1.73p        3.39p        1.62p 
 
 Net Asset Value (NAV) per 
  share                                    68p          68p          71p 
 EPRA NAV per share                        67p          68p          71p 
 
 Group net debt(6,7)                 GBP403.1m    GBP398.1m    GBP403.1m 
 Net debt to property value(6,7)           46%          46%          46% 
 

(1) Adjusted Profit is as defined in the Glossary. It incorporates profits from operating activities and excludes revaluation of properties and financial instruments, gains or losses on disposal, exceptional items and other defined terms. A reconciliation of this, and Adjusted Earnings per share, to the statutory result is provided in the Financial Review. EPRA figures and a reconciliation to EPRA EPS are shown in Note 7 to the Financial Statements. The EPRA measures used throughout this report are industry best practice performance measures established by the European Public Real Estate Association. They are defined in the Glossary to the Financial Statements.

(2) Like-for-like excludes the impact of property purchases and sales on year to year comparatives. Like-for-like footfall also excludes entrances impacted by development work. A reconciliation of Like-for-like Net Rental Income to total Net Rental Income for the period is provided in the Financial Review.

(3) For lettings and renewals (excluding development deals) with a term of five years or longer and which did not include a turnover element.

(4) As at 30 June 2017, adjusted for RCF extension completed on 3 August 2017 and assuming exercise of all extension options.

(5) Assuming RCF fully drawn.

(6) Wholly-owned assets

(7) December 2016 figures are proforma, adjusted for the refinancing of Mall assets completed on 4 January 2017, Ipswich disposal completed on 17 February 2017 and Ilford acquisition completed on 8 March 2017.

For further information:

 
 
   Capital & Regional:         Tel: +44 (0)20 7932 
                               8000 
 Lawrence Hutchings, Chief 
  Executive 
 Charles Staveley, Group 
  Finance Director 
 
 FTI Consulting:             Tel: +44 (0)20 3727 
                              1000 
 Richard Sunderland          Email: Capreg@fticonsulting.com 
  Claire Turvey 
 

Notes to editors:

About Capital & Regional plc

Capital & Regional is a UK focused retail property REIT specialising in shopping centres that dominate their catchment, serving the non-discretionary and value orientated needs of the local communities. It has a strong track record of delivering value enhancing retail and leisure asset management opportunities across a c. GBP1 billion portfolio of in-town shopping centres. Capital & Regional is listed on the main market of the London Stock Exchange and has a secondary listing on the Johannesburg Stock Exchange.

Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. It also has a 20% joint venture interest in the Kingfisher Centre in Redditch. Capital & Regional manages these assets through its in-house expert property and asset management platform.

For further information see www.capreg.com.

Forward looking statements

This document contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or implied by these statements. Many of these risks and uncertainties relate to factors that are beyond the Group's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of government regulators and other risk factors such as the Group's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Group operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this document. The Group does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document. Information contained in this document relating to the Group should not be relied upon as a guide to future performance.

Operating review

The core strength and expertise of Capital & Regional lies in its ability to create and deliver specialist asset management improvements across its GBP1.0 billion portfolio of UK shopping centres, which is underpinned by a strong London and South East bias. A key characteristic of our assets is their dominance in their locality coupled with their ability to offer occupiers attractive, affordable and high footfall space which caters for the non-discretionary and value-orientated needs of the local community.

Delivery of specialist asset management initiatives

In the first six months of the year we spent GBP7.8 million of the GBP80 million of capital expenditure investment planned over 2017-2019. We expect the pace of investment to increase in the second half of the year to approximately double this.

A number of significant initiatives have substantially completed during the period:

-- At Blackburn the refurbished former BHS unit has been handed over to Wilko and will open in September 2017. Sports Direct, also continues to trade from the unit, now via a direct lease.

-- At Walthamstow we have successfully handed over units to Lidl and The Gym and both are due to open in Q4. We have also commenced works to create a new Turkish restaurant for local operator Gökyüzü, which has traded very successfully at our Wood Green centre for a number of years, and two further retail units totalling 5,000 sq ft. All of the above have been created from the former BHS store.

-- At Wood Green the new 78 bedroom Travelodge is due to be handed over imminently and will open for trade following a GBP6.4 million investment project.

The above units will deliver a combined annual rent of GBP1.4 million from a total Capex spend of approximately GBP11.6 million. To date, the completed lettings of former BHS units have secured an aggregate annual rent that is equivalent to 104% of the rent being paid by BHS when they ceased trading in August 2016. This is with the two further retail units created from the space at Walthamstow and the whole unit at Maidstone, where we are pursuing a number of alternative options, still to be let.

In April we submitted a planning application for the extension at Walthamstow, having completed a public consultation which was very well received. Our plans include the addition of 90,000 sq ft of new retail and leisure space and 470 new residential apartments. A development agreement is in place with the London Borough of Waltham Forest, which remains supportive of our ambitions for the scheme, and we anticipate a positive decision later in the year.

In Hemel Hempstead work has commenced to renew the atrium roof, the cost of which is being met by the previous owner. In addition, our plans to transform the scheme are gathering pace with a planning application submitted to create a leisure hub anchored by a cinema, for which heads of terms have been agreed with a leading operator, and with up to six new restaurant units.

New lettings, renewals and rent reviews

There were 34 new lettings and renewals in the period at a combined average premium of 21%(1) to previous passing rent and an 8.4%(1) premium to ERV.

 
                             6 months 
                                   to 
                            June 2017 
 New Lettings 
 Number of new lettings            22 
 Rent from new lettings       GBP1.5m 
  (GBPm) 
 Comparison to ERV(1) 
  (%)                          +13.6% 
------------------------  ----------- 
 Renewals settled 
 Renewals settled                  12 
 Revised rent (GBPm)          GBP0.5m 
 Comparison to ERV(1) 
  (%)                           -3.1% 
------------------------  ----------- 
 Combined new lettings 
  and renewals 
 Comparison to previous 
  rent(1)                        +21% 
 Comparison to ERV(1)           +8.4% 
------------------------  ----------- 
 Rent reviews 
 Reviews settled                   13 
 Revised passing rent         GBP1.9m 
  (GBPm) 
 Uplift to previous 
  rent (%)                      +1.8% 
------------------------  ----------- 
 
 

(1) For lettings and renewals (excluding development deals) with a term of five years or longer which do not include a turnover rent element.

At Walthamstow, in addition to the new Lidl letting, Smiggle has taken a 10 year lease on an 850 sq ft store. At Luton, Kiko and Scotts have signed up to take a split of the former USC unit while KFC has taken a 10 year lease in the new food court.

At Wood Green, Five Guys has taken a 3,750 sq ft unit on a 15 year term whilst at Blackburn significant five year renewals include Superdrug, The Perfume Shop and Thorntons. Superdrug has also signed a new 10 year letting in Maidstone.

The outperformance of new lettings versus ERV demonstrates the affordability and attractiveness of our schemes to occupiers and this evidence will be supportive of rental tones in the future. Whilst lease renewals were settled at a little below ERV this reflects what has become a growing trend in renewal discussions of tenants seeking a lower headline rent rather than rent free incentives. The net effective rent achieved, assuming that all renewals in the first half were for a five year term was, at 97.3% of ERV, 1.8% higher than assumed by the Group's valuers.

Since 30 June 2017 the positive letting momentum has continued with Superdrug and Aldo both renewing at Wood Green, Boots renewing at Luton and Maidstone, as well as new lettings to Republic at Luton and Card Factory at Ilford.

Rental income and occupancy

 
  Like for like excluding    30 June   30 December   30 June 
   The Exchange, Ilford         2017          2016      2016 
 Contracted rent (GBPm)         57.8          57.5      57.2 
 Passing rent (GBPm)            53.9          53.0      53.1 
 Occupancy (%)                  95.6          95.4      96.4 
--------------------------  --------  ------------  -------- 
 

The GBP0.6 million year-on-year increase in contracted rent represents an excellent performance given the loss of GBP1.0 million of rent in the second half of 2016 as a consequence of the BHS administration. At 30 June 2017 there was GBP2.5 million of contracted rent where the tenant is in a rent free period; of this GBP1.8 million will convert to passing rent this year. There is a further GBP1.5 million of committed transactions where works are being undertaken prior to the handover of the units to tenants.

Occupancy has increased from December 2016 despite the seasonal impact of Christmas trading. The fall in year-on-year occupancy of 0.8% is driven primarily by the impact of the BHS store at Maidstone.

Administrations

 
                       6 months   12 months        6 months 
                             to          to              to 
                      June 2017    December    June 2016(1) 
                                    2016(1) 
 Administrations 
  (units)                    11          18              12 
 Passing rent of 
  administrations 
  (GBPm)                    0.5         2.4             1.9 
------------------  -----------  ----------  -------------- 
 

(1) Comparatives exclude the impact of The Mall, Camberley which was disposed of in November 2016.

The number of administrations is broadly in line with 2016, but the value is much reduced owing to the impact of BHS last year. The most significant insolvency was Blue Inc involving five units with a total rent of GBP0.3 million. As at 30 June 2017 three of the 11 units affected by administration had been re-let and two, with a combined rent of GBP0.3 million, were continuing to trade as usual.

Operational performance

There were 35.4 million visits to our centres in the first half of the year. While this represented a slight like-for-like decrease of 0.9%(1) , we significantly outperformed the national index which declined by 2.7%. Footfall in July was down 0.4%(1) year on year compared to the national index at -2.7%. Car Park usage has been stable and car park income, at GBP4.7 million, is up 11% on a like-for-like basis.

Our C&R Trade Index showed retailers' sales in our schemes up 0.3% for the six months, with June up 1.7%. Our Collect+ service continues to expand with in excess of 20,000 packages handled in the first half, an increase of 34% year on year.

(1) Like for like excluding The Exchange Centre, Ilford and entrances impacted by development work.

Other assets and operations

The Kingfisher Centre, Redditch (C&R ownership 20%)

The former BHS unit was re-let during the period to The Range which opened in July 2017. Other significant lettings include Delightful Desserts and Shake Dog Red although the scheme was impacted by the insolvencies of 99p Stores and Linens Direct as well as the closure of Argos. The property was valued at GBP147.0 million, reflecting a net initial yield of 6.50%. Capital expenditure in the period was GBP0.4 million.

Snozone

Snozone enjoyed another successful trading period with revenues increasing to GBP5.5 million and profit to just over GBP1.0 million. The development of initiatives including SnoAcademy and the Disability Snowschool have supplemented Snozone's core offering and helped contribute to the strong financial performance. The operational expertise of Snozone is also regularly utilised to assist our property business, particularly with regard to initiatives involving the leisure sector.

FINANCIAL REVIEW

 
                                       Six months         Year   Six months 
                                               to           to           to 
                                        June 2017     Dec 2016         June 
 Wholly-owned assets                                                   2016 
 Profitability 
 Net Rental Income (NRI)(1)              GBP25.0m     GBP50.4m     GBP25.4m 
 Adjusted Profit(2)                      GBP14.5m     GBP26.8m     GBP13.6m 
 Adjusted Earnings per share                2.06p        3.82p        1.94p 
 IFRS Profit/(Loss) for the 
  period                                 GBP12.1m    GBP(4.4)m      GBP7.2m 
 EPRA cost ratio (excluding 
  vacancy costs)                            25.3%        27.4%        26.4% 
 Net Administrative Expenses 
  to Gross Rent                             12.1%        13.6%        12.7% 
 
 Investment returns 
 Net Asset Value (NAV) per share              68p          68p          71p 
 EPRA NAV per share                           67p          68p          71p 
 Dividend per share                         1.73p        3.39p        1.62p 
 Dividend pay-out                           84.0%        88.7%        83.5% 
 Return on equity                            2.5%       (0.9)%         1.4% 
 
 Financing(3) 
 Group net debt                         GBP403.1m    GBP398.1m    GBP403.1m 
 Group net debt to property 
  value                                       46%          46%          46% 
 Average maturity of Group debt(4)      7.8 years    8.0 years    3.1 years 
 Cost of Group debt(5)                      3.25%        3.25%        3.46% 
-----------------------------------  ------------  -----------  ----------- 
 

(1) Wholly-owned assets.

(2) Adjusted Profit is as defined in the Glossary. It incorporates profits from operating activities and excludes revaluation of properties and financial instruments, gains or losses on disposal, exceptional items and other defined terms. A reconciliation to the statutory result is provided below. EPRA figures and a reconciliation to EPRA EPS are shown in Note 7 to the Financial Statements.

(3) December 2016 comparative figures in this section are adjusted for the refinancing of Mall assets completed on 4 January 2017, Ipswich disposal completed on 17 February 2017 and Ilford acquisition completed on 8 March 2017.

(4) 30 June 2017 adjusted to reflect RCF extensions completed on 3 August 2017. December 2016 figure is as at date of results (9 March 2017) reflecting debt drawn on Ilford acquisition. Calculations assume exercise of all extension options.

(5) Assuming RCF fully drawn.

The above results are discussed on the following pages.

Profitability

Components of Adjusted Profit and reconciliation to IFRS Profit

 
 Amounts in GBPm                     Six months                 Year to      Six months 
                                             to                December              to 
                                      June 2017                    2016       June 2016 
                                                                                Year to 
                                                                               December 
                                                                                   2016 
                                                       Year        Year 
                                                         to          to 
                                                   December    December 
                                                       2016        2016 
 Net Rental Income (NRI) 
      Wholly-owned assets 
       (see analysis on next 
       page)                               25.0                    50.4            25.4 
      Kingfisher, Redditch(1)               0.7                     1.7             0.9 
      Buttermarket, Ipswich(2)                -                     0.5             0.1 
                                  -----  ------  ----------  ----------  -----  ------- 
                                           25.7                    52.6            26.4 
 Net interest (see analysis 
  on page 11)                             (9.4)                  (20.3)          (10.5) 
 Snozone profit (indoor 
  ski operation)                            1.0                     1.4             1.0 
 Central operating costs 
  net of external fees                    (2.7)                   (6.9)           (3.2) 
 Tax                                      (0.1)                       -           (0.1) 
 Adjusted Profit                           14.5                    26.8            13.6 
 Adjusted Earnings 
  per share (pence)(3)             2.1p             3.8p                  1.9p 
 
 Reconciliation of Adjusted 
  Profit to statutory 
  result 
 Adjusted Profit                           14.5                    26.8            13.6 
 Property revaluation 
  (including Deferred 
  Tax)                                    (2.8)                  (14.5)           (8.6) 
 (Loss)/profit on disposals                   -                   (2.6)             4.3 
 Gain/(loss) on financial 
  instruments                               0.6                   (2.5)           (1.8) 
 Refinancing costs                            -                  (11.0)               - 
 Other items(4)                           (0.2)                   (0.6)           (0.3) 
--------------------------------  -------------  ----------  ----------  -----  ------- 
 Profit/(loss) for the 
  period                                   12.1                   (4.4)             7.2 
--------------------------------  -------------  ----------  ----------  -----  ------- 
 

(1) See note 9d to the Financial Statements.

(2) See note 9e to the Financial Statements.

(3) EPRA figures and a reconciliation to EPRA EPS are shown in Note 7 to the Financial Statements.

(4) Includes GBP0.4 million for the non-cash accounting charge in respect of share-based payments (Year to December 2016: GBP0.5 million, Six months to June 2016: GBP0.3 million)

Adjusted Profit increased by 6.6% on the prior year driven by an increase in like-for-like NRI, lower interest costs following the refinancing of the Mall assets and a GBP0.5 million reduction in net central operating costs.

NRI fell on an absolute basis due to the timing of acquisitions and disposals, with the impact of the Camberley and Ipswich sales not fully offset by the Ilford acquisition, which was purchased part way through the current period, and the full period benefit of Hemel Hempstead which was purchased part way through the first half of 2016. Further details are provided in the wholly-owned NRI section below.

Net interest fell by GBP1.1 million compared to the prior year period due to the timing of acquisitions and disposals and a lower average interest cost arising from the refinancing of the Mall assets and the new debt drawn on Ilford.

Net central operating costs improved by GBP0.5 million compared to H1 2016. As the benefit of completed and further cost initiatives continue to flow through we expect the full year rate of improvement to accelerate.

Wholly-owned assets net rental income (NRI)

 
 Amounts in GBPm                   Six months   Six months 
                                           to           to 
                                    June 2017    June 2016 
--------------------------------  -----------  -----------  ------ 
 Like for like excluding 
  BHS 
  (Blackburn, Luton, Maidstone, 
  Walthamstow, Wood Green)               21.5         20.6   +4.4% 
--------------------------------  -----------  -----------  ------ 
 Impact of BHS                           -0.3         +0.5 
--------------------------------  -----------  -----------  ------ 
 Like for like 
  (Blackburn, Luton, Maidstone, 
  Walthamstow, Wood Green)               21.2         21.1   +0.5% 
--------------------------------  -----------  -----------  ------ 
 Hemel Hempstead - acquired 
  February/March 2016                     2.0          1.6 
--------------------------------  -----------  ----------- 
 Camberley (sold November 
  2016) and other disposals                 -          2.7 
--------------------------------  -----------  ----------- 
 Ilford - acquired 8 March                1.8            - 
  2017 
--------------------------------  -----------  ----------- 
 Net rental income (NRI)                 25.0         25.4 
--------------------------------  -----------  ----------- 
 

Like-for-like NRI growth was 0.5%, despite the net impact of GBP0.8 million from the loss of the three BHS units which ceased trading in August 2016. Excluding this it was 4.4%. The openings of the new Wilko in Blackburn, and Lidl and The Gym at Walthamstow, created from the former BHS space, will drive NRI growth in the second half of the year, together with the new Travelodge at Wood Green.

Net Asset Value (NAV)

NAV at GBP481.1 million and EPRA NAV at GBP482.9 million increased marginally during the period (December 2016: GBP477.6 million and GBP481.5 million respectively) with profit for the period offsetting the payment of the Final 2016 Dividend. The valuation of the wholly-owned portfolio at 30 June 2017 was GBP879.8 million, reflecting a net initial yield of 5.97%. This is in line with the 30 December 2016 valuation of GBP794.1 million after allowing for capital expenditure in the period of GBP7.7 million and the GBP78.0 million acquisition of The Exchange Centre, Ilford in March 2017, excluding acquisition costs of c GBP1.0 million.

On a per share basis Basic NAV was stable at 68p. EPRA NAV fell by 1p to 67p due to a slightly higher number of dilutive shares and shares in issue.

Property portfolio valuation

 
 Property at independent     30 June 2017     30 December 
  valuation                                       2016 
                              GBPm   NIY %    GBPm   NIY % 
-------------------------  -------  ------  ------  ------ 
 Wholly-owned portfolio      879.8    5.97   794.1    6.01 
-------------------------  -------  ------  ------  ------ 
 

Financing

Net interest on a see-through basis

 
 Amounts in GBPm                       Six months        Year to     Six months 
                                       to 30 June    30 December          to 30 
                                             2017      2016 2016      June 2016 
                                                                    30 December 
                                                                      2016 2016 
                                     ------------  -------------  ------------- 
 
 
 Wholly-owned assets 
      Net Interest on loans                   6.9           14.0            7.0 
      Amortisation of refinancing 
       costs                                  0.4            1.4            0.8 
      Notional interest 
       charge on head leases(1)               1.7            3.6            1.8 
                                     ------------  -------------  ------------- 
                                              9.0           19.0            9.6 
 Kingfisher, Redditch                         0.3            0.8            0.4 
 Buttermarket, Ipswich                          -            0.1            0.2 
 Central                                      0.1            0.4            0.3 
-----------------------------------  ------------  -------------  ------------- 
 Net Group interest                           9.4           20.3           10.5 
-----------------------------------  ------------  -------------  ------------- 
 
 

(1) Notional interest charge with offsetting opposite and materially equal credit within other property operating expenses.

Net interest fell by GBP1.1 million compared to the prior year period due to the timing of acquisitions and disposals and the lower average cost of debt (3.25% at 30 June 2017 v 3.47% at 30 June 2016) arising from the refinancing of the Mall assets that completed in January 2017 and the new GBP39 million of debt on the Ilford acquisition that was fixed at an all-in rate of 2.76%.

Group debt

 
                    DebtP(1)   Cash(2)     Net     Loan         Net      Average   Fixed   Duration      Duration 
                                          debt       to        debt     interest                 to          with 
                                                  value          to         rate               loan    extensions 
                                                    (3)    value(3)                          expiry 
 30 June 2017           GBPm      GBPm    GBPm        %           %            %       %      Years         Years 
-----------------  ---------  --------  ------  -------  ----------  -----------  ------  ---------  ------------ 
 Four Mall 
  assets               255.0     (9.1)   245.9      48%         46%         3.36     100        7.7           9.1 
 Luton                 107.5     (8.6)    98.9      51%         47%         3.14     100        6.5           6.5 
 Hemel Hempstead        26.9     (1.2)    25.7      50%         48%         3.32     100        4.5           5.5 
 Ilford                 39.0     (3.6)    35.4      49%         44%         2.76     100        6.7           6.7 
 Group RCF(4)              -     (2.8)   (2.8)        -           -         3.33       -        4.6           4.6 
-----------------  ---------  --------  ------  -------  ----------  -----------  ------  ---------  ------------ 
 On balance 
  sheet debt           428.4    (25.3)   403.1      49%         46%         3.25      94        6.9           7.8 
-----------------  ---------  --------  ------  -------  ----------  -----------  ------  ---------  ------------ 
 

(1) Excluding unamortised issue costs.

(2) Excluding cash beneficially owned by tenants.

   (3)   Debt and net debt divided by investment property at valuation. 
   (4)   At 30 June 2017, adjusted for RCF extension completed on 3 August 2017. 

Our target range for net debt to property value remains 40%-50% with an intention to bring this to the lower end of that range in the medium term.

Group Revolving Credit Facility (RCF)

The GBP30 million facility was extended on 3 August 2017 for a further three years such that it now matures on 22 January 2022. Interest on the facility is charged at a margin of 3.0% per annum above LIBOR. A non-utilisation fee of 1.5% is payable. No amount was drawn at 30 June 2017.

Covenants

The Group and its Redditch joint venture were compliant with their banking and debt covenants at 30 June 2017.

Going concern

As stated in note 2 to the condensed financial statements, the directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, being a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the consolidated financial statements.

Dividend

The Board is proposing an interim dividend of 1.73 pence per share, all of which will be paid as a Property Income Distribution (PID). This represents an increase of 6.8% from the 2016 Interim dividend. A Scrip dividend alternative may be offered.

The key dates in relation to the payment of the dividend are:

-- Confirmation of ZAR equivalent dividend 26 September 2017

   --      Last day to trade on Johannesburg Stock Exchange (JSE)             3 October 2017 

-- Shares trade ex-dividend on the JSE 4 October 2017

   --      Shares trade ex-dividend on the London Stock Exchange (LSE)     5 October 2017 

-- Record date for LSE and JSE 6 October 2017

-- Dividend payment date 26 October 2017

If a Scrip dividend alternative is offered the deadline for submission of valid election forms will be 6 October 2017. South African shareholders are advised that the dividend will be regarded as a foreign dividend. Further details relating to Withholding Tax for shareholders on the South African register will be provided within the announcement detailing the currency conversion rate on 26 September 2017. Share certificates on the South African register may not be dematerialised or rematerialised between 4 October 2017 and 6 October 2017, both dates inclusive. Transfers between the UK and South African registers may not take place between 26 September 2017 and 6 October 2017, both dates inclusive.

Outlook

Whilst elements of the retail sector may face challenges, the continued strong occupier demand for our centres as well as the local and convenient nature of our assets, which cater for the non-discretionary and value-orientated needs of our shoppers, gives us great comfort over the security of our income. This, allied with our proven track record of driving income and delivering results through selective but significant capital expenditure investment, underpins the future growth potential of the business.

Reflecting the strong feeling of confidence in the future growth prospects of the business, the Board has announced an Interim dividend of 1.73p, representing a 6.8% increase on the prior year. With the second half of the year set to comparatively benefit the timing of recent acquisitions and several major lettings coming on stream we expect the Full Year 2017 Dividend will be at the top end of our targeted growth range of at least 5% to 8% per annum.

Principal risks and uncertainties

There are a number of risks and uncertainties which could have a significant impact on future performance and could cause actual results to differ materially from expected or historical results. The Group carries out a regular review of the major risks it faces and monitors the controls that have been put in place to mitigate them.

A detailed explanation of the principal risks and uncertainties was included on pages 28 to 31 of the Group's 2016 Annual Report. A further review was carried out for the 30 June 2017 half year. This review concluded that the nature of the Group's risks had not significantly changed in the last six months and therefore the principal risks to the Group remain those disclosed in the 2016 Annual Report. These have been summarised below.

Property risks:

-- Property investment market risks - Weak economic conditions and poor sentiment in commercial real estate markets may lead to low investor demand and a market pricing correction. Small changes in property market yields can have a significant effect on property valuation and the impact of leverage could magnify the effect on the Group's net assets.

-- Impact of the economic environment (tenant risks) - Tenant insolvency or distress and a prolonged downturn in tenant demand could put pressure on rent levels. Tenant failures and reduced tenant demand could adversely affect rental income revenues, lease incentive costs, void costs, available cash and the value of properties owned by the Group.

-- Valuation risk - The risk that a lack of relevant transactional evidence makes property valuations increasingly subjective and open to a wider range of possible outcomes.

-- Threat from the internet - The trend towards online shopping may adversely impact footfall in shopping centres and potentially reduce tenant demand for space and the levels of rents which can be achieved.

-- Concentration and scale risks - By having a less diversified portfolio the business is more exposed to specific tenants or types of tenant. Failures of such tenants could therefore have a significant impact on rental income revenues impacting Adjusted Profit and property valuations.

-- Competition risk - The threat to the Group's property assets of competing in town and out of town retail and leisure schemes.

-- Business disruption from a major incident - The threat of a major incident, such as a terrorist attack, impacting one of the Group's assets.

-- Development risk - There is a risk that where capital expenditure and development projects are undertaken, that delays and other issues may lead to increased cost and reputational damage. There is also the risk that planned realisation of value is not achieved, for example if the property cannot subsequently be sold for the anticipated amount or if tenants are not contracted on sufficiently attractive terms.

Funding and treasury risks:

-- Liquidity and funding - Inability to fund the business or to refinance existing debt on economic terms may result in the inability to meet financial obligations when due and put a limitation on financial and operational flexibility. Cost of financing could be prohibitive in the future.

-- Covenant compliance risks - Breach of any loan covenants could cause default on debt and possible accelerated maturity. Unremedied breaches can trigger demand for immediate repayment of loans.

-- Interest rate exposure risks - Exposure to rising or falling interest rates. If interest rates rise and are unhedged, the cost of debt facilities can rise and ICR covenants could be broken. Hedging transactions used by the Group to minimise interest rate risk may limit gains, result in losses or have other adverse consequences.

Other risks:

-- Execution of business plan - the failure to execute the Group's business plan in line with internal and external expectations could lead to potential loss of income or value and reputational damage, negatively impacting investor market perception.

-- Property acquisition/disposal strategy - The Group is exposed to risks around overpayment for acquisitions and that acquisitions do not deliver the returns forecast. In addition, if the portfolio is not effectively managed through the property cycle, with sales and deleveraging at the appropriate time, the Group is exposed to risks in not being able to take advantage of other investment opportunities as they arise and the potential for LTVs to move adversely, with adverse consequences for covenants and shareholder value.

-- Tax risks - Changes in tax legislation or the interpretation of tax legislation or previous transactions where the tax authorities disagree with the tax treatment adopted could result in tax related liabilities and other losses arising.

-- Regulation risks - Exposure to changes in existing or forthcoming property related or corporate regulation could result in financial penalties or loss of business or credibility.

-- Loss of key management - The Group's business is partially dependent on the skills of a small number of key individuals. Loss of key individuals or an inability to attract new employees with the appropriate expertise could reduce the effectiveness with which the Group conducts its business.

-- Historical Transaction Risk - the risk of issues or liabilities emerging from historical transactions most likely through warranties or indemnities provided in asset or business disposals.

The risks noted above do not comprise all those potentially faced by the Group and are not intended to be presented in any order of priority. Additional risks and uncertainties currently unknown to the Group, or which the Group currently deems immaterial, may also have an adverse effect on the financial condition or business of the Group in the future. These issues are kept under constant review to allow the Group to react in an appropriate and timely manner to help mitigate the impact of such risks.

Responsibility statement

The directors confirm that to the best of their knowledge:

-- the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting", as adopted by the European Union;

-- the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

-- the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

By order of the Board

   Lawrence Hutchings                                        Charles Staveley 
   Chief Executive                                                  Group Finance Director 
   9 August 2017                                                   9 August 2017 

INDEPENT REVIEW REPORT TO CAPITAL & REGIONAL PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 which comprises the consolidated income statement, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and related notes 1 to 17. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review 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 company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2017 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Statutory Auditor

London, United Kingdom

9 August 2017

Condensed consolidated income statement

For the six months to 30 June 2017

 
                                               Unaudited     Unaudited 
                                              Six months    Six months     Audited 
                                                   to 30            to      Year to 
                                                    June       30 June    30 December 
                                                    2017          2016       2016 
                                      Note          GBPm          GBPm           GBPm 
-----------------------------------  -----  ------------  ------------  ------------- 
 Continuing operations 
 Revenue                               3b           43.9          43.9           87.2 
 Cost of sales                                    (16.6)        (16.1)         (32.5) 
-----------------------------------  -----  ------------  ------------  ------------- 
 Gross profit                                       27.3          27.8           54.7 
 Administrative costs                              (4.8)         (5.2)         (10.9) 
 Share of (loss)/profit in 
  associates and joint ventures        9a          (1.1)           1.9            0.3 
 Loss on revaluation of investment 
  properties                           8a          (1.3)        (10.3)         (14.2) 
 Other gains and losses                5             0.3           4.4          (1.8) 
-----------------------------------  -----  ------------  ------------  ------------- 
 Profit on ordinary activities 
  before financing                                  20.4          18.6           28.1 
 Finance income                                      0.8           0.2            0.4 
 Finance costs                                     (9.1)        (11.6)         (33.0) 
-----------------------------------  -----  ------------  ------------  ------------- 
 Profit before tax                                  12.1           7.2          (4.5) 
 Tax                                   6               -             -            0.1 
-----------------------------------  -----  ------------  ------------  ------------- 
 Profit/(loss) for the period                       12.1           7.2          (4.4) 
-----------------------------------  -----  ------------  ------------  ------------- 
 
 Basic earnings per share              7            1.7p          1.0p         (0.6)p 
 Diluted earnings per share            7            1.7p          1.0p         (0.6)p 
 
 EPRA basic earnings per 
  share                                7            2.0p          1.9p           3.7p 
 EPRA diluted earnings per 
  share                                7            2.0p          1.9p           3.7p 
-----------------------------------  -----  ------------  ------------  ------------- 
 

Condensed consolidated statement of comprehensive income

For the six months to 30 June 2017

 
                                 Unaudited     Unaudited 
                                six months    six months        Audited 
                                        to            to        Year to 
                                   30 June       30 June    30 December 
                                      2017          2016           2016 
                                      GBPm          GBPm           GBPm 
----------------------------  ------------  ------------  ------------- 
 Profit for the period                12.1           7.2          (4.4) 
 Other comprehensive income              -             -              - 
 Total comprehensive income 
  for the period                      12.1           7.2          (4.4) 
----------------------------  ------------  ------------  ------------- 
 

The results for the current and preceding periods are fully attributable to equity shareholders.

The EPRA measures used throughout this report are industry best practice performance measures established by the European Public Real Estate Association. They are defined in the Glossary to the Financial Statements. EPRA Earnings and EPRA EPS are shown in Note 7 to the Financial Statements. EPRA net assets and EPRA triple net assets are shown in Note 13 to the Financial Statements.

Condensed consolidated balance sheet

At 30 June 2017

 
                                             Unaudited        Audited 
                                               30 June    30 December 
                                                  2017           2016 
                                      Note        GBPm           GBPm 
----------------------------------   -----  ----------  ------------- 
 Non-current assets 
 Investment properties                 8         924.2          838.5 
 Plant and equipment                               1.1            0.9 
 Fixed asset investments                           2.0            1.9 
 Receivables                                      13.4           14.3 
 Investment in associates              9b         12.6           13.9 
 Total non-current assets                        953.3          869.5 
-----------------------------------  -----  ----------  ------------- 
 
 Current assets 
 Receivables                                      19.5           13.4 
 Cash and cash equivalents             10         31.1           49.1 
 Assets classified as held for 
  sale                                               -           13.9 
 Total current assets                             50.6           76.4 
-----------------------------------  -----  ----------  ------------- 
 
 Total assets                                  1,003.9          945.9 
-----------------------------------  -----  ----------  ------------- 
 
 Current liabilities 
 Bank loans                            11            -        (334.6) 
 Trade and other payables                       (35.2)         (41.3) 
 Liabilities directly associated 
  with assets held for sale                          -          (0.4) 
 Total current liabilities                      (35.2)        (376.3) 
-----------------------------------  -----  ----------  ------------- 
 Net current assets                               15.4        (299.9) 
-----------------------------------  -----  ----------  ------------- 
 
 Non-current liabilities 
 Bank loans                            11      (422.2)         (26.2) 
 Other payables                                  (4.0)          (4.4) 
 Obligations under finance leases               (61.4)         (61.4) 
 Total non-current liabilities                 (487.6)         (92.0) 
-----------------------------------  -----  ----------  ------------- 
 
 Total liabilities                             (522.8)        (468.3) 
-----------------------------------  -----  ----------  ------------- 
 
 Net assets                                      481.1          477.6 
-----------------------------------  -----  ----------  ------------- 
 
 Equity 
 Share capital                         16          7.1            7.0 
 Share premium                         16        161.5          158.2 
 Other reserves                                   60.3           60.3 
 Capital redemption reserve                        4.4            4.4 
 Own shares held                                 (0.4)          (0.4) 
 Retained earnings                               248.2          248.1 
-----------------------------------  -----  ----------  ------------- 
 Equity shareholders' funds                      481.1          477.6 
-----------------------------------  -----  ----------  ------------- 
 
 Basic net assets per share            13      GBP0.68        GBP0.68 
 EPRA triple net assets per share      13      GBP0.67        GBP0.67 
 EPRA net assets per share             13      GBP0.67        GBP0.68 
-----------------------------------  -----  ----------  ------------- 
 

Condensed consolidated statement of changes in equity

For the six months to 30 June 2017

 
 
 
                                                                      Capital      Own 
                                       Share     Share    Merger   redemption   shares   Retained    Total 
                                     capital   premium   reserve      reserve     held   earnings   Equity 
                                        GBPm      GBPm      GBPm         GBPm     GBPm       GBPm     GBPm 
----  -------------------------------  -----  --------  --------  -----------  -------  ---------  ------- 
 Balance at 30 
  December 2015                          7.0     157.2      60.3          4.4    (0.6)      274.9    503.2 
                                       -----  --------  --------  -----------  -------  ---------  ------- 
 Profit for 
  the period                               -         -         -            -        -        7.2      7.2 
 Other comprehensive 
 loss for the 
 period                                    -         -         -            -        -          -        - 
                                       -----  --------  --------  -----------  -------  ---------  ------- 
 Total comprehensive 
 income for 
 the period                                -         -         -            -        -        7.2      7.2 
 
 Credit to 
  equity for 
  equity-settled 
  share-based 
  payments                                 -         -         -            -        -        0.3      0.3 
 Dividends 
  paid (note 
  16)                                      -         -         -            -        -     (11.3)   (11.3) 
 Balance at 
  30 June 2016 
  (unaudited)                            7.0     157.2      60.3          4.4    (0.6)      271.1    499.4 
                                       -----  --------  --------  -----------  -------  ---------  ------- 
 Profit for 
  the period                               -         -         -            -        -     (11.6)   (11.6) 
 Other comprehensive 
 loss for the 
 period                                    -         -         -            -        -          -        - 
                                       -----  --------  --------  -----------  -------  ---------  ------- 
 Total comprehensive 
 income for 
 the period                                -         -         -            -        -     (11.6)   (11.6) 
 
 Credit to 
  equity for 
  equity-settled 
  share-based 
  payments                                 -         -         -            -        -        0.2      0.2 
 Dividends 
  paid (note 
  16), net of 
  Scrip                                    -         -         -            -        -     (10.4)   (10.4) 
 Shares issued, 
  net of costs                             -       1.0         -            -        -      (1.0)        - 
 Other movements                           -         -         -            -      0.2      (0.2)        - 
 Balance at 30 
  December 2016                          7.0     158.2      60.3          4.4    (0.4)      248.1    477.6 
                                       -----  --------  --------  -----------  -------  ---------  ------- 
 Profit for 
  the period                               -         -         -            -        -       12.1     12.1 
 Other comprehensive 
 loss for the 
 period                                    -         -         -            -        -          -        - 
                                       -----  --------  --------  -----------  -------  ---------  ------- 
 Total comprehensive 
 income for 
 the period                                -         -         -            -        -       12.1     12.1 
 
 Credit to 
  equity for 
  equity-settled 
  share-based 
  payments                                 -         -         -            -        -        0.4      0.4 
 Dividends 
  paid (note 
  16) , net 
  of Scrip                                 -         -         -            -        -      (9.0)    (9.0) 
 Shares issued, 
  net of costs                           0.1       3.3         -            -        -      (3.4)        - 
 Balance at 
  30 June 2017 
  (unaudited)                            7.1     161.5      60.3          4.4    (0.4)      248.2    481.1 
-------------------------------  ----  -----  --------  --------  -----------  -------  ---------  ------- 
 
 

Condensed consolidated cash flow statement

For the six months to 30 June 2017

 
                                             Unaudited   Unaudited 
                                                   Six         Six     Audited 
                                                months      months        Year 
                                                 to 30          to       to 30 
                                                  June     30 June    December 
                                                  2017        2016        2016 
                                      Note        GBPm        GBPm        GBPm 
 Operating activities 
 Net cash from operations              12         19.8        21.5        41.1 
 Distributions received from 
  associates/investments                           0.7         0.5         4.7 
 Interest paid                                   (6.7)       (7.1)      (14.6) 
 Interest received                                 0.1           -         0.1 
 Cash flows from operating 
  activities                                      13.9        14.9        31.3 
-----------------------------------  -----  ----------  ----------  ---------- 
 
 Investing activities 
 Acquisition of The Exchange, 
  Ilford                                        (79.0)           -           - 
 Acquisitions in Hemel Hempstead                     -      (56.6)      (56.6) 
 Disposal of Buttermarket, 
  Ipswich                                          9.7           -           - 
 Disposal of The Mall, Camberley                     -           -        85.7 
 Other disposals                                     -         0.4         0.7 
 Purchase of plant and equipment                 (0.3)       (0.3)       (0.5) 
 Capital expenditure on investment 
  properties                                     (6.8)      (11.2)      (20.6) 
 Cash flows from investing 
  activities                                    (76.4)      (67.7)         8.7 
-----------------------------------  -----  ----------  ----------  ---------- 
 
 Financing activities 
 Dividends paid (net of Scrip) 
  including withholding tax                      (8.9)      (11.4)      (21.7) 
 Bank loans drawn down                           401.5        43.6        26.9 
 Bank loans repaid                             (334.6)       (0.2)      (45.4) 
 Loan arrangement costs                         (13.5)       (0.6)       (0.6) 
 Cash flows from financing 
  activities                                      44.5        31.4      (40.8) 
-----------------------------------  -----  ----------  ----------  ---------- 
 
 Net (decrease)/increase in 
  cash and cash equivalents                     (18.0)      (21.4)       (0.8) 
 Cash and cash equivalents 
  at the beginning of the period                  49.1        49.9        49.9 
-----------------------------------  -----  ----------  ----------  ---------- 
 Cash and cash equivalents 
  at the end of the period             10         31.1        28.5        49.1 
-----------------------------------  -----  ----------  ----------  ---------- 
 

Notes to the condensed financial statements

For the six months to 30 June 2017

1 General information

The comparative information included for the year ended 30 December 2016 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor has reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The Group's financial performance does not suffer materially from seasonal fluctuations.

2 Accounting policies

Basis of preparation

The annual financial statements of Capital & Regional plc are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union.

The principal exchange rates used to translate foreign currency denominated amounts are:

Balance sheet: GBP1 = EUR1.137 (30 June 2016: GBP1 = EUR1.210; 31 December 2016: GBP1 = EUR1.168)

Income statement: GBP1 = EUR1.162 (30 June 2016: GBP1 = EUR1.285; 31 December 2016: GBP1 = EUR1.224).

The Half-Year Report was approved by the Board on 9 August 2017.

Going concern

The Group prepares cash flow and covenant compliance forecasts to demonstrate that it has adequate resources available to continue in operation for the foreseeable future, being at least 12 months from the date of this report. In these forecasts the directors specifically consider anticipated future market conditions and the Group's principal risks and uncertainties. Further information on the Group's financing position is contained within the Financial Review with additional details of the Group's cash position and borrowing facilities provided in notes 10 and 11 of the condensed financial statements.

In summary the directors believe that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future and accordingly continue to adopt the going concern basis in preparing the annual report and financial statements.

Change in accounting policies

The condensed consolidated interim financial information has been prepared on the basis of the accounting policies, significant judgements, key assumptions and estimates as set out in the notes to the Group's annual financial statements for the year ended 30 December 2016. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

The following accounting standards or interpretations were effective for the period beginning 31 December 2016 and have been applied in preparing these financial statements to the extent they are relevant to the preparation of financial information:

-- IFRS 11 'Accounting for acquisitions of interests in joint operations - amendments to IFRS 11'

   --                      IAS 1 'Disclosure initiative - amendments to IAS 1' 

-- IAS 16 and IAS 38 (amendments) 'Clarification of Acceptable Methods of Depreciation and Amortisation'

   --                      IAS 27 (amendment) 'Equity Method in Separate Financial Statements' 

None of the standards above have impacted the Group's reporting.

A number of new standards and amendments to standards have been issued but are not yet effective for the Group. The most significant of these, and their potential impact on the Group's accounting, are set out below:

-- IFRS 15 Revenue from Contracts with Customers (effective for year ending 30 December 2019) - does not apply to gross rental income, but does apply to service charge income, other fees and trading property disposals. The Group does not expect adoption of IFRS 15 to have a material impact on the measurement of revenue recognition, but additional disclosures will be required with regards to the above sources of income.

-- IFRS 9 Financial Instruments (effective for year ending 30 December 2019) - will impact both the measurement and disclosures of financial instruments. The Group has not yet completed its evaluation of the effect of the adoption but it may impact the measurement and presentation of the Group's financial liabilities.

-- IFRS 16 Leases (effective for year ending 30 December 2020) - will result in the Group recognising on balance sheet assets its leases along with a corresponding liability. The primary lease contracts that this will impact are the lease on the Group's head offices and the leases of the Snozone business for its Castleford and Milton Keynes operations. In addition, IFRS 16 could have an indirect impact on the Group's business if it leads to a change in occupier behaviour. Examples of this would be if its adoption results in tenants or potential tenants typically seeking shorter lease terms and/or more prevalent use of turnover-related, as opposed to fixed rents.

3 Operating segments

3a Operating segment performance

The Group's reportable segments under IFRS 8 are Wholly-owned assets, Other UK Shopping Centres, Snozone and Group/Central. Wholly-owned assets consists of the shopping centres at Blackburn, Hemel Hempstead, Ilford (from acquisition on 8 March 2017), Luton, Maidstone, Walthamstow and Wood Green and, in the prior year periods, Camberley, until its disposal on 11 November 2016. Other UK Shopping Centres consists of the Group's interests in Kingfisher Limited Partnership (Redditch) and, in the prior year, until its reclassification as held for sale on 30 December 2016, Buttermarket Ipswich Limited. Group/Central includes management fee income, Group overheads incurred by Capital & Regional Property Management, Capital & Regional plc and other subsidiaries and the interest expense on the Group's central borrowing facility.

Wholly-owned assets and Other UK Shopping Centres derive their revenue from the rental of investment properties. The Snozone and Group/Central segments derive their revenue from the operation of indoor ski slopes and the management of property funds or schemes respectively. The split of revenue between these classifications satisfies the requirement of IFRS 8 to report revenues from different products and services. Depreciation and charges in respect of share-based payments represent the only significant non-cash expenses.

 
                                                         UK Shopping 
                                                            Centres 
                                               ------------------------------ 
                                                                        Other 
                                                                  UK Shopping 
                                                                      Centres 
                                                 Wholly-owned     (Kingfisher 
                                                       assets       Redditch)    Snozone    Group/Central      Total 
-------------------------------  -----  -----  --------------  --------------  ---------  ---------------  --------- 
  Six months to 30 June 
   2017                                                  GBPm            GBPm       GBPm             GBPm       GBPm 
---------------------------------------------  --------------  --------------  ---------  ---------------  --------- 
  Rental income from 
   external sources                                      30.9             1.1          -                -       32.0 
  Property and void costs                               (5.9)           (0.4)          -                -      (6.3) 
                                               --------------  --------------  ---------  ---------------  --------- 
  Net rental income                                      25.0             0.7          -                -       25.7 
  Net interest expense                                  (9.0)           (0.3)          -            (0.1)      (9.4) 
  Snozone income/Management 
   fees(1)                                                  -               -        5.5              1.1        6.6 
  Management expenses                                       -               -      (4.4)            (3.4)      (7.8) 
  Investment income                                         -               -          -              0.2        0.2 
  Depreciation                                              -               -      (0.1)                -      (0.1) 
  Variable overhead (excluding 
   non-cash items)                                          -               -          -            (0.6)      (0.6) 
  Tax (charge)/credit                                       -           (0.1)          -                -      (0.1) 
  Adjusted Profit                                        16.0             0.3        1.0            (2.8)       14.5 
  Revaluation of properties                             (1.3)           (1.5)          -                -      (2.8) 
  Profit on disposal                                        -               -          -                -          - 
  (Loss)/gain on financial 
   instruments                                            0.5             0.1          -                -        0.6 
  Share-based payments 
   (non-cash)                                               -               -          -            (0.4)      (0.4) 
  Other items                                               -               -          -              0.2        0.2 
                                               --------------  --------------  ---------  --------------- 
  Profit after 
   tax                                                   15.2           (1.1)        1.0            (3.0)       12.1 
                                               --------------  --------------  ---------  ---------------  --------- 
 
  Total assets                                          979.2            30.8        3.4              8.7    1,022.1 
  Total liabilities                                   (516.8)          (18.2)      (1.7)            (4.3)    (541.0) 
                                               --------------  --------------  ---------  ---------------  --------- 
  Net assets                                            462.4            12.6        1.7              4.4      481.1 
-------------------------------  -----  -----  --------------  --------------  ---------  ---------------  --------- 
 
 

(1) Asset management fees of GBP2.0 million charged from the Group's Capital & Regional Property Management entity to Wholly-owned assets have been excluded from the table above.

3a Operating segment performance

 
                                                         UK Shopping 
                                                            Centres 
                                               ------------------------------ 
                                                                        Other 
                                                 Wholly-owned     UK Shopping 
                                                       assets      Centres(1)    Snozone    Group/Central      Total 
-------------------------------  -----  -----  --------------  --------------  ---------  ---------------  --------- 
  Six months to 30 June 
   2016                                                  GBPm            GBPm       GBPm             GBPm       GBPm 
---------------------------------------------  --------------  --------------  ---------  ---------------  --------- 
  Rental income from 
   external sources                                      30.8             1.5          -                -       32.3 
  Property and void costs                               (5.4)           (0.5)          -                -      (5.9) 
                                               --------------  --------------  ---------  ---------------  --------- 
  Net rental income                                      25.4             1.0          -                -       26.4 
  Net interest expense                                  (9.6)           (0.6)          -            (0.3)     (10.5) 
  Snozone income/Management 
   fees(2)                                                  -               -        5.4              1.3        6.7 
  Management expenses                                       -               -      (4.3)            (3.8)      (8.1) 
  Depreciation                                              -               -      (0.1)            (0.1)      (0.2) 
  Variable overhead (excluding 
   non-cash items)                                          -               -          -            (0.6)      (0.6) 
  Tax (charge)/credit                                       -           (0.1)          -                -      (0.1) 
  Adjusted Profit                                        15.8             0.3        1.0            (3.5)       13.6 
  Revaluation of properties                            (10.3)             3.3          -                -      (7.0) 
  Profit on disposal                                      0.6               -          -              0.1        0.7 
  (Loss)/gain on financial 
   instruments                                          (1.6)           (0.2)          -                -      (1.8) 
  Share-based payments 
   (non-cash)                                               -               -          -            (0.3)      (0.3) 
  Other items                                               -           (1.5)          -              3.5        2.0 
                                               --------------  --------------  ---------  --------------- 
  Profit after 
   tax                                                    4.5             1.9        1.0            (0.2)        7.2 
                                               --------------  --------------  ---------  ---------------  --------- 
 
  Total assets                                          982.6            57.5        2.8              8.1    1,051.0 
  Total liabilities                                   (501.8)          (28.4)      (1.1)           (20.3)    (551.6) 
                                               --------------  --------------  ---------  ---------------  --------- 
  Net assets                                            480.8            29.1        1.7           (12.2)      499.4 
-------------------------------  -----  -----  --------------  --------------  ---------  ---------------  --------- 
 
 

(1) Buttermarket Ipswich and Kingfisher Redditch.

(2) Asset management fees of GBP1.8 million charged internally from the Group's Capital & Regional Property Management entity to Wholly-owned assets have been excluded from the table above which has also been restated to exclude other internal cost recharges.

 
 
        3a Operating segment 
             performance                     UK Shopping Centres 
                                  ------------------------------ 
                                                           Other 
                                    Wholly-owned     UK Shopping 
                                          assets      Centres(1)    Snozone    Group/Central      Total 
------------------------------    --------------  --------------  ---------  ---------------  --------- 
  Year to 30 December 
   2016                                     GBPm            GBPm       GBPm             GBPm       GBPm 
--------------------------------  --------------  --------------  ---------  ---------------  --------- 
  Rental income from 
   external sources                         62.0             3.4          -                -       65.4 
  Property and void 
   costs                                  (11.6)           (1.2)          -                -     (12.8) 
                                  --------------  --------------  ---------  ---------------  --------- 
  Net rental income                         50.4             2.2          -                -       52.6 
  Net interest expense                    (19.0)           (0.9)          -            (0.4)     (20.3) 
  Snozone income/Management 
   fees(2)                                     -               -       10.2              2.4       12.6 
  Management expenses                          -               -      (8.7)            (7.8)     (16.5) 
  Investment income                            -               -          -              0.3        0.3 
  Depreciation                                 -               -      (0.1)                -      (0.1) 
  Variable overhead 
   (excluding non-cash 
   items)                                      -               -          -            (1.8)      (1.8) 
  Tax (charge)/credit                          -           (0.1)          -              0.1          - 
  Adjusted Profit                           31.4             1.2        1.4            (7.2)       26.8 
  Revaluation of properties               (14.2)             1.2          -                -     (13.0) 
  Deferred tax on 
   revaluation of properties                   -           (1.5)          -                -      (1.5) 
  Loss on disposal(3)                      (5.9)           (0.6)          -                -      (6.5) 
  Income from Euro 
   B Note(4)                                   -               -          -              3.9        3.9 
  Loss on financial 
   instruments                             (2.5)               -          -                -      (2.5) 
  Refinancing costs(5)                    (11.0)               -          -                -     (11.0) 
  Share-based payments 
   (non-cash)                                  -               -          -            (0.5)      (0.5) 
  Other items                                  -               -          -            (0.1)      (0.1) 
                                  --------------  --------------  ---------  ---------------  --------- 
  Profit after 
   tax                                     (2.2)             0.3        1.4            (3.9)      (4.4) 
                                  --------------  --------------  ---------  ---------------  --------- 
 
  Total assets                             885.9            32.1        4.0             42.1      964.1 
  Total liabilities                      (460.9)          (18.2)      (2.1)            (5.3)    (486.5) 
                                  --------------  --------------  ---------  ---------------  --------- 
  Net assets                               425.0         13.9(6)        1.9          36.8(6)      477.6 
------------------------------    --------------  --------------  ---------  ---------------  --------- 
 
 

(1) Includes Buttermarket Ipswich and Kingfisher Redditch. For further information see Note 9.

(2) Asset management fees of GBP3.6 million charged from the Group's Capital & Regional Property Management entity to Wholly-owned assets have been excluded from the table above.

(3) Includes GBP0.6 million impairment of Ipswich trading property recognised on reclassification as held for sale.

(4) GBP3.9 million of monies were received in 2016 through the holding of a share in the German Euro B-Note junior loan instrument which had previously been fully impaired. The monies were distributed following the sale of properties by the liquidator of the underlying entities.

(5) Refinancing costs consist of those triggered by serving notice on the existing debt facility on five Mall assets on 28 December 2016. They comprised GBP7.6 million of fixed rate loan redemption costs and the write off

of the GBP3.4 million of financing costs that were unamortised at    30 December 2016. 

(6) Net assets of the Buttermarket Ipswich joint venture were included within Group following its reclassification as held for sale on 30 December 2016. The results for the year are reflected in the Other UK Shopping Centres column.

3b Reconciliations of reportable revenue, assets and liabilities

 
                                                  Unaudited    Unaudited       Audited 
                                                 Six months   Six months 
                                                         to           to       Year to 
                                                    30 June      30 June   30 December 
                                                       2017         2016          2016 
 Revenue                                 Note          GBPm         GBPm          GBPm 
-------------------------------------  -------  -----------  -----------  ------------ 
 Rental income from external 
  sources                                 3a        32.0            32.3          65.4 
 Service charge income                              7.1              7.2          14.0 
 Management fees                          3a        1.1              1.3           2.4 
 Snozone income                           3a        5.5              5.4          10.2 
--------------------------------------  ------                            ------------ 
 Revenue for reportable segments                    45.7            46.2          92.0 
 Elimination of inter-segment 
  revenue                                          (0.7)           (0.8)         (1.4) 
 Rental income earned by associates 
  and joint ventures                               (1.1)           (1.5)         (3.4) 
 Revenue per consolidated income 
  statement                                         43.9            43.9          87.2 
--------------------------------------  ------  -----------  -----------  ------------ 
 
 
 

Revenues during the year and in the preceding periods were solely derived from the UK.

 
                                             Unaudited    Unaudited       Audited 
                                            Six months   Six months 
                                                    to           to       Year to 
                                               30 June      30 June   30 December 
                                                  2017         2016          2016 
 Balance sheet                       Note         GBPm         GBPm          GBPm 
----------------------------------  -----  -----------  -----------  ------------ 
 Total assets of reportable 
  segments                            3a       1,022.1      1,051.0         964.1 
 Adjustment for associates 
  and joint ventures                            (18.2)       (28.4)        (18.2) 
 Group assets                                  1,003.9      1,022.6         945.9 
----------------------------------  -----  -----------  -----------  ------------ 
 
 Total liabilities of reportable 
 segments                             3a       (541.0)      (551.6)       (486.5) 
 Adjustment for associates 
  and joint ventures                              18.2         28.4          18.2 
 Group liabilities                             (522.8)      (523.2)       (468.3) 
----------------------------------  -----  -----------  -----------  ------------ 
 
 Net assets by country 
 UK                                              480.9        499.2         477.5 
 Germany                                           0.2          0.2           0.1 
----------------------------------  -----  -----------  -----------  ------------ 
 Net assets by country                           481.1        499.4         477.6 
----------------------------------  -----  -----------  -----------  ------------ 
 
 

4 Revenue

 
                                            Unaudited    Unaudited       Audited 
                                           Six months   Six months 
                                                   to           to       Year to 
                                              30 June      30 June   30 December 
                                                 2017         2016          2016 
 Statutory                          Note         GBPm         GBPm          GBPm 
---------------------------------  -----  -----------  -----------  ------------ 
 Gross rental income                             25.1         25.8          51.0 
 Ancillary income                                 5.8          5.0          11.0 
                                          -----------  -----------  ------------ 
                                                 30.8         30.8          62.0 
 Service charge income                            7.1          7.2          14.0 
 External management fees                         0.4          0.5           1.0 
 Snozone income                      3a           5.5          5.4          10.2 
 Revenue per consolidated 
 income statement - continuing 
 operations                          3b          43.9         43.9          87.2 
---------------------------------  -----  -----------  -----------  ------------ 
 
 

Management fees represent revenue earned by Capital & Regional Plc and the Group's wholly-owned CRPM subsidiary. Fees charged to Wholly-owned assets have been eliminated on consolidation.

5 Other gains and losses

Other gains and losses in the prior year related primarily to losses on the sale of The Mall, Camberley of GBP6.3 million, partially offset by GBP3.9 million recovered through the German Euro B-Note junior loan instrument, a GBP0.4 million profit on the sale of a unit in Maidstone and a GBP0.2 million receipt related to a property disposed of in a prior year. The German Euro B-Note junior loan instrument had previously been fully impaired. The GBP3.9 million was received following the sale of properties by the liquidator of the underlying German portfolio. A further GBP0.3 million was received in the current period.

6 Tax

 
                                Unaudited     Unaudited       Audited 
                               Six months    Six months 
                                       to            to       Year to 
                                  30 June       30 June   30 December 
                                     2017          2016          2016 
 Tax charge                          GBPm          GBPm          GBPm 
--------------------------   ------------  ------------  ------------ 
 UK corporation tax                     -             -             - 
 Adjustments in respect 
  of prior years                         -            -         (0.1) 
 Total current tax charge                -            -         (0.1) 
---------------------------   ------------  -----------  ------------ 
 
 Deferred tax                           -             -             - 
--------------------------   ------------  ------------  ------------ 
 Total tax charge                        -            -         (0.1) 
---------------------------   ------------  -----------  ------------ 
 
 
                                      Unaudited    Unaudited       Audited 
                                     Six months   Six months 
                                             to           to       Year to 
                                        30 June      30 June   30 December 
                                           2017         2016          2016 
 Tax charge reconciliation                 GBPm         GBPm          GBPm 
---------------------------------  ------------  -----------  ------------ 
 Profit before tax on continuing 
  operations                               12.1          7.2          97.6 
----------------------------------  -----------  -----------  ------------ 
 Profit multiplied by the 
  UK corporation tax rate of 
  19.25% (30 June 2016 and 
  30 December 2016: 20%)                    2.3          1.4          19.8 
 REIT exempt income and gains             (2.5)        (0.4)        (18.5) 
 Non-allowable expenses and 
  non-taxable items                         0.2        (0.4)             - 
 Utilisation of tax losses                  0.1          0.1           0.3 
 Unrealised gains on investment 
  properties not taxable at 
  the Group                                   -        (0.7)         (1.5) 
 Temporary timing differences                 -            -         (0.1) 
 Adjustments in respect of 
  prior years                             (0.1)            -             - 
----------------------------------               -----------  ------------ 
 Total tax charge - continuing 
  operations                                  -            -             - 
----------------------------------  -----------  -----------  ------------ 
 
 

The UK corporation tax main rate was reduced to 19% with effect from 1 April 2017. A further reduction in the rate of corporation tax to 17% from 1 April 2020 was substantively enacted in Finance Act 2016. Consequently the UK corporation tax rate at which deferred tax is booked in the financial statements is 17% (2016: 17%).

The Group has recognised a deferred tax asset of GBP0.1 million (30 December 2016: GBP0.1 million). No deferred tax asset has been recognised in respect of temporary differences arising from investments or investments in associates or in joint ventures in the current or prior years as it is not certain that a deduction will be available when the asset crystallises.

The Group has GBP14.1 million (30 December 2016: GBP13.9 million) of unused revenue tax losses, all of which are in the UK. No deferred tax asset has been recognised in respect of these losses due to the unpredictability of future profit streams and other reasons which may restrict the utilisation of the losses (30 December 2016: GBPnil). The Group has unused capital losses of GBP30.5 million (30 December 2016: GBP30.5 million) that are available for offset against future gains but similarly no deferred tax has been recognised in respect of these losses owing to the unpredictability of future capital gains and other reasons which may restrict the utilisation of the losses. The losses do not have an expiry date.

7 Earnings per share

The European Public Real Estate Association ("EPRA") has issued recommendations for the calculation of earnings per share information as shown in the following table:

 
                                          Six months                  Six months                  Year to 30 
                                           to 30 June                  to 30 June                December 2016 
                                        2017 (unaudited)            2016 (unaudited)               (audited) 
                                                    Adjusted                    Adjusted                    Adjusted 
                            Note   Profit    EPRA     Profit   Profit    EPRA     Profit   Profit    EPRA     Profit 
-------------------------  -----  -------  ------  ---------  -------  ------  ---------  -------  ------  --------- 
 Profit (GBPm) 
 Profit/(loss) 
  for the year                       12.1    12.1       12.1      7.2     7.2        7.2    (4.4)   (4.4)      (4.4) 
 Revaluation loss/(gain) 
 on investment 
 properties (net 
 of tax)                     3a         -     2.8        2.8        -     8.6        8.6        -    14.5       14.5 
 (Profit)/loss 
  on disposal of 
  properties (net 
  of tax)                    3a         -       -          -        -   (0.7)      (0.7)        -     6.5        6.5 
 Income from German 
  B Note                                -   (0.3)      (0.3)        -   (3.6)      (3.6)        -   (3.9)      (3.9) 
 Changes in fair 
  value of financial 
  instruments                3a         -   (0.6)      (0.6)        -     1.8        1.8        -     2.5        2.5 
 Refinancing costs                      -       -          -        -       -          -        -    11.0       11.0 
 Share-based payments        3a         -       -        0.4        -       -        0.3        -       -        0.5 
 Other items                            -       -        0.1        -       -          -        -       -        0.1 
                                  -------  ------  ---------  -------  ------  ---------  -------  ------  --------- 
 Profit                              12.1    14.0       14.5      7.2    13.4       13.6    (4.4)    26.2       26.8 
                                  -------  ------  ---------  -------  ------  ---------  -------  ------  --------- 
 
 Earnings per 
  share (pence)                      1.7p    2.0p       2.1p     1.0p    1.9p       1.9p   (0.6)p    3.7p       3.8p 
 Diluted earnings 
  per share (pence)                  1.7p    2.0p       2.0p     1.0p    1.9p       1.9p   (0.6)p    3.7p       3.8p 
 
   None of the current or prior year earnings related 
   to discontinued operations. 
 
 
 
 Weighted average           Six months    Six months   Year to 30 
  number of shares          to 30 June    to 30 June     December 
  (m)                             2017          2016         2016 
-----------------------   ------------  ------------  ----------- 
 Ordinary shares 
  in issue                       703.9         700.8        701.0 
 Own shares held                 (0.6)         (1.0)        (0.6) 
                          ------------  ------------  ----------- 
 Basic                           703.3         699.8        700.4 
 Dilutive contingently 
  issuable shares 
  and share options               10.5           5.5         10.0 
                          ------------  ------------  ----------- 
 Diluted                         713.8         705.3        710.4 
------------------------  ------------  ------------  ----------- 
 

At the end of the period, the Group had 13.6 million (30 December 2016: 11.9 million) additional share options and contingently issuable shares granted under share-based payment schemes that could potentially dilute basic earnings per share in the future but which have not been included in the calculation because they are not dilutive or the performance conditions for vesting were not met based on the position at 30 June 2017.

Headline earnings per share

 
                                           Six months        Six months           Year to 
                                                   to                to       30 December 
                                         30 June 2017           30 June              2016 
                                                                   2016 
                                      Basic   Diluted   Basic   Diluted   Basic   Diluted 
----------------------------  ----   ------  --------  ------  --------  ------  -------- 
 Profit (GBPm) 
 Profit for the period                 12.1      12.1     7.2       7.2   (4.4)     (4.4) 
 Revaluation of investment 
  properties (net of 
  tax)                                  2.8       2.8     8.6       8.6    14.5      14.5 
 Profit on disposal of 
  investment properties 
  (net of tax)                            -         -   (0.7)     (0.7)     6.5       6.5 
 Profit on German 
  B Note (Note 5)                     (0.3)     (0.3)   (3.6)     (3.6)   (3.9)     (3.9) 
                                                       ------  -------- 
 Headline earnings                     14.6      14.6    11.5      11.5    12.7      12.7 
 
 Weighted average 
  number of shares 
  (m) 
 Ordinary shares 
  in issue                            703.9     703.9   700.8     700.8   701.0     701.0 
 Own shares held                      (0.6)     (0.6)   (1.0)     (1.0)   (0.6)     (0.6) 
 Dilutive contingently 
  issuable shares and share 
  options                                 -      10.5       -       5.5       -      10.0 
                                     ------  --------  ------  --------  ------  -------- 
                                      703.3     713.8   699.8     705.3   700.4     710.4 
                                     ------  --------  ------  --------  ------  -------- 
 Headline Earnings 
  per share (pence)                    2.1p      2.0p    1.6p      1.6p    1.8p      1.8p 
                                     ------  --------  ------  --------  ------  -------- 
 
 

8 Investment properties

8a Wholly-owned properties

 
                              Freehold    Leasehold      Total 
                            investment   investment   property 
                            properties   properties     assets 
                                  GBPm         GBPm       GBPm 
------------------------   -----------  -----------  --------- 
 Cost or valuation 
 At 30 December 2016             357.9        480.6      838.5 
 Acquired (The Exchange 
  Centre, Ilford)                 79.0            -       79.0 
 Capital expenditure               4.3          3.5        7.8 
 Valuation deficit(1)            (2.9)          1.8      (1.1) 
 At 30 June 2017                 438.3        485.9      924.2 
-------------------------  -----------  -----------  --------- 
 

(1) GBP1.3 million per Note 3a includes letting fee amortisation adjustment of GBP0.2 million.

Acquisition of the Exchange Centre, Ilford

On 8 March 2017 the Group completed the acquisition of The Exchange Centre, Ilford from a Meyer Bergman fund for GBP78 million, reflecting a Net Initial Yield of 6.70%. Acquisitions costs were approximately GBP1 million. The acquisition, which comprised the purchase of a holding company that owns the property was funded from the Group's existing cash resources as well as through a new seven year debt facility of GBP39 million, secured on the asset, with DekaBank Deutsche Girozentrale.

8b Property assets summary

 
                                            30 June 2017                30 December 
                                                                               2016 
                                                            Group             Group 
                                                    100%    share     100%    share 
                                                    GBPm     GBPm     GBPm     GBPm 
----------------------------------  ----   -------------  -------  -------  ------- 
 Wholly-owned 
 Investment properties at 
  fair value                                       879.8    879.8    794.1    794.1 
 Head leases treated as finance 
  leases on investment properties                   61.4     61.4     61.3     61.3 
 Unamortised tenant incentives 
  on investment properties                        (17.0)   (17.0)   (16.9)   (16.9) 
                                           -------------  -------  -------  ------- 
 IFRS Property Value                               924.2    924.2    838.5    838.5 
                                           -------------  -------  -------  ------- 
 Associates 
 Investment properties at 
  fair value                                       147.0     29.4    154.1     30.8 
 Unamortised tenant incentives 
  on investment properties                         (4.3)    (0.9)    (4.1)    (0.8) 
                                           -------------  -------  -------  ------- 
 IFRS Property Value                               142.7     28.5    150.0     30.0 
                                           -------------  -------  -------  ------- 
 
 
 
 Total at property 
  valuation               1,026.8   909.2   948.2   824.9 
                         --------  ------  ------  ------ 
 Total IFRS Property 
  Value                   1,066.9   952.7   988.5   868.5 
                         --------  ------  ------  ------ 
 

8c Valuations

External valuations were carried out on all of the property assets detailed in the table above. The valuations at 30 June 2017 were carried out by independent qualified professional valuers from CBRE Limited and Knight Frank LLP in accordance with RICS standards. These valuers are not connected with the Group and their fees are charged on a fixed basis that is not dependent on the outcome of the valuations.

Real estate valuations are complex and derived from data that is not widely publicly available and involves a degree of judgement. For these reasons, the valuations are classified as Level 3 in the fair value hierarchy as defined by IFRS 13. The valuations are sensitive to changes in rent profile and yields.

9 Investment in associates and joint ventures

 
 9a Share of results                  Unaudited    Unaudited       Audited 
                                     Six months   Six months 
                                             to           to       Year to 
                                        30 June      30 June   30 December 
                                           2017         2016          2016 
                                   Note    GBPm         GBPm          GBPm 
--------------------------------  -----  ------  -----------  ------------ 
 Share of results of associates     9b    (1.1)            -         (1.5) 
 Share of results of joint 
  ventures                          9c        -          1.9           1.8 
                                          (1.1)          1.9           0.3 
--------------------------------  -----  ------  -----------  ------------ 
 
 
 
 9b Investment in associates                      Unaudited       Audited 
                                                 Six months 
                                                         to       Year to 
                                                    30 June   30 December 
                                                       2017          2016 
                                          Note         GBPm          GBPm 
---------------------------------------  -----  -----------  ------------ 
 At the start of the period                            13.9          15.9 
 Share of results of associates            9d         (1.1)         (1.5) 
 Dividends and capital distributions 
  received                                            (0.2)         (0.5) 
 At the end of the period                  9d          12.6          13.9 
---------------------------------------  -----  -----------  ------------ 
 
 

The Group's only significant associate at 30 June 2017 and 30 December 2016 was its 20% interest in the Kingfisher Limited Partnership which owns the Kingfisher Shopping Centre in Redditch. The Group exercises significant influence through its representation on the General Partner board and through acting as the property and asset manager.

As detailed in Note 17 the Kingfisher Limited Partnership refinanced its debt on 7 July 2017. The Group's net investment in the Partnership is expected to reduce to approximately GBP7.8 million after allowing for its share of distributions and costs arising from this refinancing.

 
 9c Investment in joint 
  ventures 
                                                                            Audited 
                                                           Unaudited           Year 
                                                          Six months             to 
                                                          to 30 June    30 December 
                                                                2017           2016 
                                                Note            GBPm           GBPm 
-------------------------------------------  ---------  ------------  ------------- 
 At the start of the period                                        -           11.7 
 Share of results of joint ventures              9e                -            1.8 
 Reclassification of Buttermarket 
  Centre, Ipswich as held for 
  sale                                                             -         (13.5) 
 At the end of the period                        9e                -              - 
-------------------------------------------  ---------  ------------  ------------- 
 
 

9d Analysis of investment in associates

 
                                                 Unaudited   Unaudited        Audited 
                                                       Six         Six 
                                                    months      months           Year 
                                         Other       to 30       to 30             to 
                                            UK        June        June    30 December 
                                      Shopping        2017        2016           2016 
                                       Centres       Total       Total          Total 
                               Note       GBPm        GBPm        GBPm           GBPm 
---------------------------   -----  ---------  ----------  ----------  ------------- 
 Income statement 
  (100%) 
 Revenue - gross 
  rent                                     5.6         5.6         5.8           11.5 
 Property and management 
  expenses                               (1.2)       (1.2)       (0.9)          (2.0) 
 Void costs                              (0.5)       (0.5)       (0.4)          (1.0) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Net rent                                  3.9         3.9         4.5            8.5 
 Net interest payable                    (1.7)       (1.7)       (2.0)          (3.8) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Contribution                              2.2         2.2         2.5            4.7 
 Revaluation of investment 
  properties                             (7.4)       (7.4)       (1.2)         (11.8) 
 Fair value of interest 
  rate swaps                               0.4         0.4       (0.9)          (0.2) 
 Profit before tax                       (4.8)       (4.8)         0.4          (7.3) 
 Tax                                     (0.4)       (0.4)       (0.5)          (0.7) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Profit after tax 
  (100%)                                 (5.2)       (5.2)       (0.1)          (8.0) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 
 Balance sheet (100%) 
 Investment properties                   142.7       142.7       159.4          150.0 
 Other assets                             11.1        11.1        10.8           10.4 
 Current liabilities                    (83.9)      (83.9)       (7.1)          (6.5) 
 Non-current liabilities                 (6.1)       (6.1)      (85.1)         (84.0) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Net assets (100%)                        63.8        63.8        78.0           69.9 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 
 Income statement 
  (Group share) 
 Revenue - gross 
  rent                                     1.1         1.1         1.2            2.3 
 Property and management 
  expenses                               (0.3)       (0.3)       (0.2)          (0.4) 
 Void costs                              (0.1)       (0.1)       (0.1)          (0.2) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Net rent                                  0.7         0.7         0.9            1.7 
 Net interest payable                    (0.3)       (0.3)       (0.4)          (0.8) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Contribution                              0.4         0.4         0.5            0.9 
 Revaluation of investment 
  properties                             (1.5)       (1.5)       (0.2)          (2.3) 
 Fair value of interest 
  rate swaps                               0.1         0.1       (0.2)              - 
 Profit before tax                       (1.0)       (1.0)         0.1          (1.4) 
 Tax                                     (0.1)       (0.1)       (0.1)          (0.1) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Profit after tax 
  (Group share)                 9b       (1.1)       (1.1)           -          (1.5) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 
 Balance sheet (Group 
  share) 
 Investment properties                    28.5        28.5        31.9           30.0 
 Other assets                              2.2         2.2         2.1            2.1 
 Current liabilities                    (16.8)      (16.8)       (1.4)          (1.4) 
 Non-current liabilities                 (1.3)       (1.3)      (17.0)         (16.8) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Net assets (Group 
  share)                        9b        12.6        12.6        15.6           13.9 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 

9e Analysis of investment in joint ventures

 
                                                 Unaudited   Unaudited        Audited 
                                                       Six         Six 
                                                    months      months           Year 
                                         Other          to          to             to 
                                            UK     30 June     30 June    30 December 
                                      Shopping        2017     2016(1)           2016 
                                       Centres       Total       Total          Total 
                               Note       GBPm        GBPm        GBPm           GBPm 
---------------------------   -----  ---------  ----------  ----------  ------------- 
 Income statement 
  (100%) 
 Revenue - gross 
  rent                                       -           -         0.8            2.2 
 Property and management 
  expenses                                   -           -       (0.4)          (0.7) 
 Void costs                                  -           -       (0.3)          (0.6) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Net rent                                    -           -         0.1            0.9 
 Net interest payable                        -           -       (0.3)          (0.3) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Contribution                                -           -       (0.2)            0.6 
 Revaluation of investment 
  properties                                 -           -         7.1            7.2 
 Profit on sale of 
  investment properties                      -           -           -          (2.9) 
 Fair value of interest 
  rate swaps                                 -           -           -          (1.2) 
 Profit before tax                           -           -         6.9            3.7 
 Tax                                         -           -       (3.2)              - 
---------------------------   -----  ---------  ----------  ----------  ------------- 
 Profit after tax 
  (100%)                                     -           -         3.7            3.7 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 
 Balance sheet (100%) 
 Investment properties                       -           -        43.1              - 
 Other assets                                -           -         3.9              - 
 Current liabilities                         -           -       (5.4)              - 
 Non-current liabilities                     -           -      (14.6)              - 
---------------------------   -----  ---------  ----------  ----------  ------------- 
 Net assets (100%)                           -           -        27.0              - 
---------------------------   -----  ---------  ----------  ----------  ------------- 
 
 Income statement 
  (Group share) 
 Revenue - gross 
  rent                                       -           -         0.4            1.1 
 Property and management 
  expenses                                   -           -       (0.2)          (0.3) 
 Void costs                                  -           -       (0.1)          (0.3) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Net rent                                    -           -         0.1            0.5 
 Net interest payable                        -           -       (0.2)          (0.1) 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 Contribution                                -           -       (0.1)            0.4 
 Revaluation of investment 
  properties                                 -           -         3.6            3.5 
 Profit on sale of 
  investment properties                      -           -           -          (1.5) 
 Fair value of interest 
  rate swaps                                 -           -           -          (0.6) 
 Profit before tax                           -           -         3.5            1.8 
 Tax                                         -           -       (1.6)              - 
---------------------------   -----  ---------  ----------  ----------  ------------- 
 Profit after tax 
  (Group share)                 9c           -           -         1.9            1.8 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 
 Balance sheet (Group 
  share) 
 Investment properties                       -           -        21.6              - 
 Other assets                                -           -         2.0              - 
 Current liabilities                         -           -       (2.7)              - 
 Non-current liabilities                     -           -       (7.3)              - 
---------------------------   -----  ---------  ----------  ----------  ------------- 
 Net assets (Group 
  share)                        9c           -           -        13.6              - 
----------------------------  -----  ---------  ----------  ----------  ------------- 
 

(1) The Group's investment in Buttermarket Ipswich Limited was reclassified as held for sale at 30 December 2016. On reclassification Management assessed the fair value of its share of the investment to be GBP13.9 million with the associated costs to sell the entity expected to be GBP0.4 million and these amounts were shown on the balance sheet at year end.

10 Cash and cash equivalents

 
                                     Unaudited       Audited 
                                       30 June   30 December 
                                          2017          2016 
                                          GBPm          GBPm 
---------------------------------   ----------  ------------ 
 Cash at bank                             25.3          45.8 
 Security disposals held in 
  rent accounts                            0.8           0.7 
 Other restricted balances                 5.0           2.6 
----------------------------------  ---------- 
 Total cash and cash equivalents          31.1          49.1 
----------------------------------  ----------  ------------ 
 

11 Borrowings

Summary of borrowings

The Group's borrowings are arranged to ensure an appropriate maturity profile and to maintain short term liquidity. There were no defaults or other breaches of financial covenants that were not waived under any of the Group borrowings during the current year or the preceding year.

 
                                     30 June   30 December 
                                        2017          2016 
 Borrowings at amortised cost           GBPm          GBPm 
---------------------------------   --------  ------------ 
 Secured 
 Fixed and swapped bank loans          428.4         260.2 
 Variable rate bank loans                  -         101.3 
                                    --------  ------------ 
 Total secured borrowings before 
  costs                                428.4         361.5 
 
 
 Unamortised issue costs               (6.2)         (0.7) 
 Total borrowings after costs          422.2         360.8 
                                    --------  ------------ 
 
 Analysis of total borrowings 
  after costs 
 Current                                   -         334.6 
 Non-current                           422.2          26.2 
 Total borrowings after costs          422.2         360.8 
----------------------------------  --------  ------------ 
 

During the period GBP39.0 million of new debt was drawn in respect of the acquisition of The Exchange, Ilford, and GBP362.5 million in respect of the refinancing of the Mall assets completed on 4 January 2017. See note 17a of the financial statements for the year ended 30 December 2016 for further details.

The fair value of total borrowings before costs as at 30 June 2017 was GBP429.0 million (30 December 2016: GBP363.9 million).

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value. All of the assets listed were classified as Level 2, as defined in note 1 to the financial statements for the year ended 30 December 2016. There were no transfers between Levels in the year.

 
                                        30 June   30 December 
                                           2017          2016 
                                           GBPm          GBPm 
------------------------------------   --------  ------------ 
 Interest rate caps                           -           0.1 
 Interest rate swaps                     (1.5)          (2.1) 
 Foreign exchange forward contracts        -                - 
                                       --------  ------------ 
                                          (1.5)         (2.0) 
                                       --------  ------------ 
 

12 Notes to the cash flow statement

 
                                     Unaudited    Unaudited       Audited 
                                    Six months   Six months 
                                            to           to       Year to 
                                       30 June      30 June   30 December 
                                          2017         2016          2016 
                                          GBPm         GBPm          GBPm 
 ---------------------------------------------  -----------  ------------ 
 Profit/(loss) for the period             12.1          7.2         (4.4) 
 
 Adjusted for: 
 Finance income                          (0.8)        (0.2)         (0.4) 
 Finance expense                           9.1         11.6          33.0 
 Income tax credit                           -            -         (0.1) 
 Loss on revaluation of wholly-owned 
 properties                                1.3         10.3          14.2 
 Share of loss/(profit) in 
  associates and joint ventures            1.1        (1.9)         (0.3) 
 Other gains and losses                  (0.3)        (4.4)           1.8 
 Depreciation of other fixed 
  assets                                   0.1          0.2           0.1 
 (Increase)/Decrease in receivables      (5.2)          0.1         (0.1) 
 Increase/(Decrease) in payables           2.0        (1.7)         (3.2) 
 Non-cash movement relating 
  to share-based payments                  0.4          0.3           0.5 
 Net cash from operations                 19.8         21.5          41.1 
--------------------------------------  ------  -----------  ------------ 
 
 

13 Net assets per share

EPRA has issued recommended bases for the calculation of certain net assets per share information as shown in the following table:

 
                                                                     Unaudited       Audited 
                               Unaudited                               30 June   30 December 
                              30 June 2017                                2016          2016 
      ----------------------------------------------------------- 
                                                              Net 
                                                 Number    assets 
                                          Net        of       per   Net assets    Net assets 
                                       assets    shares     share    per share     per share 
                                         GBPm   million       GBP          GBP           GBP 
-----  --------------------------------------  --------  --------  -----------  ------------ 
 Basic net assets                       481.1     708.5      0.68         0.71          0.68 
 Own shares held                                  (0.6) 
 Dilutive contingently 
  issuable shares and share 
  options                                          10.5 
 Fair value of fixed rate 
  loans (net of tax)                    (0.6) 
-------------------------------------  ------  --------  --------  -----------  ------------ 
 EPRA triple net assets                 480.5     718.4      0.67         0.69          0.67 
 Exclude fair value of 
  fixed rate loans (net 
  of tax)                                 0.6 
 Exclude fair value of 
  see-through interest 
  rate derivatives                        1.9 
 Exclude deferred tax 
 on unrealised gains/capital 
 allowances                             (0.1) 
-------------------------------------          --------  --------  -----------  ------------ 
 EPRA net assets                        482.9     718.4      0.67         0.71          0.68 
-------------------------------------  ------  --------  --------  -----------  ------------ 
 
 

The number of Ordinary shares issued and fully paid at 30 June 2017 was 708,477,735 (30 December 2016: 702,342,500, 30 June 2016: 700,752,626). There have been no changes to the number of shares from 30 June 2017 to the date of this announcement.

14 Return on equity

 
                                   Unaudited    Unaudited       Audited 
                                  Six months   Six months 
                                          to           to       Year to 
                                     30 June      30 June   30 December 
                                        2017         2016          2016 
                                        GBPm         GBPm          GBPm 
------------------------------   -----------  -----------  ------------ 
 Total comprehensive income 
  attributable to equity 
  shareholders                          12.1          7.2         (4.4) 
 Opening equity shareholders' 
  funds                                477.6        503.2         503.4 
 Return on equity                       2.5%         1.4%        (0.9)% 
-------------------------------  -----------  -----------  ------------ 
 

15 Related party transactions

There have been no material changes to, or material transactions with, related parties as described in note 31 of the annual audited financial statements for the year ended 30 December 2016, except for:

Distributions received from related parties

During the period, the Group received cash distributions of GBP0.2 million from related parties as disclosed in notes 9b.

Management fee income from related parties

During the period, the Group received management fee income in the normal course of business of GBP0.3 million from related parties.

16 Dividends

 
                                         Unaudited    Unaudited       Audited 
                                        Six months   Six months          Year 
                                                to           to            to 
                                           30 June      30 June   30 December 
                                              2017         2016          2016 
                                              GBPm         GBPm          GBPm 
-------------------------------------  -----------  -----------  ------------ 
 Final dividend per share for 
  year ended 30 December 2015 of 
  1.62p                                          -         11.3          11.3 
 Interim dividend per share for 
  year ended 30 December 2016 of 
  1.62p                                          -            -          11.4 
 Final dividend per share for 
  year ended 30 December 2016 of 
  1.77p                                       12.4            -             - 
-------------------------------------  -----------  -----------  ------------ 
 Amounts recognised as distributions 
  to equity holders in the period             12.4         11.3          22.7 
-------------------------------------  -----------  -----------  ------------ 
 Interim dividend per share for 
  year ended 30 December 2017 of 
  1.73p(1)                                    12.3            -             - 
-------------------------------------  -----------  -----------  ------------ 
 

(1) In line with the requirements of IAS 10 - 'Events after the Reporting Period', this dividend has not been included as a liability in these financial statements.

The Company issued 6,135,235 new ordinary shares on 16 May 2017 to shareholders who elected to receive their 2016 final dividend in shares under the Company's Scrip dividend scheme. The value of the Scrip shares was calculated in accordance with the scheme rules at 56.48 pence. As a result the Company's share capital increased by GBP61,352 and share premium by GBP3,403,828.

17 Events after the balance sheet date

On 7 July 2017 the Kingfisher Limited Partnership refinanced its existing debt with a new GBP113 million package. The Group has a 20% interest in the Partnership which owns the Kingfisher Redditch shopping centre. Part of the new financing is being used to fund a distribution to the joint venture partners. The Group's share is expected to be around GBP4.6 million. The Group's net investment in the Kingfisher Limited Partnership is expected to be approximately GBP7.8 million after allowing for the distribution and its share of refinancing costs.

 
 Glossary of terms 
 
   Adjusted Profit is the total                                                Net initial yield (NIY) is 
   of Contribution from wholly-owned                                           the annualised current rent, 
   assets and the Group's joint                                                net of revenue costs, topped-up 
   ventures and associates, the                                                for contractual uplifts, 
   profit from Snozone and property                                            expressed as a percentage 
   management fees less central                                                of the capital valuation, 
   costs (including interest excluding                                         after adding notional purchaser's 
   non-cash charges in respect                                                 costs. 
   of share-based payments) after 
   tax. Adjusted Profit excludes                                               Net debt to property value 
   revaluation of properties, profit                                           is debt less cash and cash 
   or loss on disposal of properties                                           equivalents divided by the 
   or investments, gains or losses                                             property value. 
   on financial instruments and 
   exceptional one-off items. Results                                          Net interest is the Group's 
   from Discontinued Operations                                                share, on a see-through basis, 
   are included up until the point                                             of the interest payable less 
   of disposal or reclassification                                             interest receivable of the 
   as held for sale.                                                           Group and its associates 
                                                                               and joint ventures. 
   C&R is Capital & Regional plc, 
   also referred to as the Group                                               Net rent is the Group's share, 
   or the Company.                                                             on a see-through basis, of 
                                                                               the rental income, less property 
   C&R Trade index is an internal                                              and management costs (excluding 
   retail tracker using data from                                              performance fees) of the 
   approximately 300 retail units                                              Group and its associates 
   across C&R's shopping centre                                                and joint ventures. 
   portfolio. 
                                                                               Nominal equivalent yield 
   CRPM is Capital & Regional Property                                         is a weighted average of 
   Management Limited, a subsidiary                                            the net initial yield and 
   of Capital & Regional plc, which                                            reversionary yield and represents 
   earns management and performance                                            the return a property will 
   fees from the Mall assets and                                               produce based upon the timing 
   certain associates and joint                                                of the income received, assuming 
   ventures of the Group.                                                      rent is received annually 
                                                                               in arrears on gross values 
   Contracted rent is passing rent                                             including the prospective 
   and the first rent reserved                                                 purchaser's costs. 
   under a lease or unconditional 
   agreement for lease but which                                               Passing rent is gross rent 
   is not yet payable by a tenant.                                             currently payable by tenants 
                                                                               including car park profit 
   Contribution is net rent less                                               but excluding income from 
   net interest, including unhedged                                            non-trading administrations 
   foreign exchange movements.                                                 and any assumed uplift from 
                                                                               outstanding rent reviews. 
   Capital return is the change 
   in market value during the year                                             Occupancy cost ratio The 
   for properties held at the balance                                          proportion of a retailer's 
   sheet date, after taking account                                            sales compared with the total 
   of capital expenditure calculated                                           cost of occupation being: 
   on a time weighted basis.                                                   rent, business rates, service 
                                                                               charge and insurance. Retailer 
   Debt is borrowings, excluding                                               sales are based on estimates 
   unamortised issue costs.                                                    by third party consultants 
                                                                               which are periodically updated 
   Dividend pay-out is the ratio                                               and indexed using relevant 
   of dividend per share to Adjusted                                           data from the C&R Trade Index. 
   Earnings per share. 
                                                                               Occupancy rate is the ERV 
   EPRA earnings per share (EPS)                                               of occupied properties expressed 
   is the profit / (loss) after                                                as a percentage of the total 
   tax excluding gains on asset                                                ERV of the portfolio, excluding 
   disposals and revaluations,                                                 development voids. 
   movements in the fair value 
   of financial instruments, intangible                                        Rent to sales ratio is Contracted 
   asset movements and the capital                                             rent excluding car park income, 
   allowance effects of IAS 12                                                 ancillary income and anchor 
   "Income Taxes" where applicable,                                            stores expressed as a percentage 
   less tax arising on these items,                                            of net sales. 
   divided by the weighted average 
   number of shares in issue during                                            REIT - Real Estate Investment 
   the year excluding own shares                                               Trust. 
   held. 
                                                                               Return on equity is the total 
   EPRA net assets per share include                                           return, including revaluation 
   the dilutive effect of share-based                                          gains and losses, divided 
   payments but ignore the fair                                                by opening equity plus time 
   value of derivatives, any deferred                                          weighted additions to and 
   tax provisions on unrealised                                                reductions in share capital, 
   gains and capital allowances,                                               excluding share options exercised. 
   any adjustment to the fair value 
   of borrowings net of tax and                                                Reversionary percentage is 
   any surplus on the fair value                                               the percentage by which the 
   of trading properties.                                                      ERV exceeds the passing rent. 
 
   EPRA triple net assets per share                                            Reversionary yield is the 
   include the dilutive effect                                                 anticipated yield to which 
   of share-based payments and                                                 the net initial yield will 
   adjust all items to market value,                                           rise once the rent reaches 
   including trading properties                                                the ERV. 
   and fixed rate debt. 
                                                                               See-through balance sheet 
   Estimated rental value (ERV)                                                is the pro forma proportionately 
   is the Group's external valuers'                                            consolidated balance sheet 
   opinion as to the open market                                               of the Group and its associates 
   rent which, on the date of valuation,                                       and joint ventures. 
   could reasonably be expected 
   to be obtained on a new letting                                             See-through income statement 
   or rent review of a unit or                                                 is the pro forma proportionately 
   property.                                                                   consolidated income statement 
                                                                               of the Group and its associates 
   ERV growth is the total growth                                              and joint ventures. 
   in ERV on properties owned throughout 
   the year including growth due                                               Temporary lettings are those 
   to development.                                                             lettings for one year or 
                                                                               less. 
   Gearing is the Group's debt 
   as a percentage of net assets.                                              Total Property return incorporates 
                                                                               net rental income and Capital 
   Interest rate cover (ICR) is                                                return expressed as a percentage 
   the ratio of either (i) Adjusted                                            of the capital value employed 
   Profit (before interest, tax,                                               (opening market value plus 
   depreciation and amortisation);                                             capital expenditure) calculated 
   or (ii) net rental income to                                                on a time weighted basis. 
   the interest charge. 
                                                                               Total return is the Group's 
   IPD is Investment Property Databank                                         total recognised income or 
   Limited, a company that produces                                            expense for the year as set 
   an independent benchmark of                                                 out in the consolidated statement 
   property returns.                                                           of comprehensive income expressed 
                                                                               as a percentage of opening 
   Like-for-like figures, unless                                               equity shareholders' funds. 
   otherwise stated, exclude the 
   impact of property purchases                                                Total shareholder return 
   and sales on year to year comparatives.                                     (TSR) is a performance measure 
                                                                               of the Group's share price 
   Loan to value (LTV) is the ratio                                            over time. It is calculated 
   of debt excluding fair value                                                as the share price movement 
   adjustments for debt and derivatives,                                       from the beginning of the 
   to the Market value of properties.                                          year to the end of the year 
                                                                               plus dividends paid, divided 
   Market value is an opinion of                                               by share price at the beginning 
   the best price at which the                                                 of the year. 
   sale of an interest in a property 
   would complete unconditionally                                              Variable overhead includes 
   for cash consideration on the                                               discretionary bonuses and 
   date of valuation as determined                                             the costs of awards to directors 
   by the Group's external or internal                                         and employees made under 
   valuers. In accordance with                                                 the 2008 LTIP and SAYE schemes 
   usual practice, the valuers                                                 which are spread over the 
   report valuations net, after                                                performance period. 
   the deduction of the prospective 
   purchaser's costs, including 
   stamp duty, agent and legal 
   fees. 
 
   Net assets per share (NAV) are 
   shareholders' funds divided 
   by the number of shares held 
   by shareholders at the year 
   end, excluding own shares held. 
  EPRA performance measures 
 
                                        30 June   30 June   30 December 
                                           2017      2016          2016 
                                       --------  --------  ------------ 
   EPRA earnings (GBPm)                    14.0      13.4          26.2 
   EPRA earnings per share (diluted)       2.0p      1.9p          3.7p 
 
   EPRA net assets (GBPm)                 482.9     502.6         481.5 
   EPRA net assets per share                67p       71p           68p 
 
   EPRA triple net assets (GBPm)          480.5     489.3         475.2 
   EPRA triple net assets per share         67p       69p           67p 
 
 
 
  EPRA Cost ratios 
                                           30 June   30 June   30 December 
                                               2017      2016          2016 
                                               GBPm      GBPm          GBPm 
   --------------------------------------  --------  --------  ------------ 
    Cost of sales (adjusted for 
     IFRS head lease differential)             16.8      16.4          33.0 
    Administrative costs                        4.8       5.2          10.9 
    Service charge income                     (7.1)     (7.2)        (14.0) 
    Management fees                           (0.4)     (0.5)         (1.0) 
    Snozone (indoor ski operation) 
     costs                                    (4.5)     (4.4)         (8.8) 
    Share of joint venture & associate 
     expenses                                   0.4       0.5           1.2 
    Less inclusive lease costs recovered 
     through rent                             (0.9)     (1.0)         (1.9) 
                                           --------  --------  ------------ 
    EPRA costs (including direct 
     vacancy costs)                             9.1       9.0          19.4 
    Direct vacancy costs                      (1.6)     (1.2)         (2.9) 
                                           --------  --------  ------------ 
    EPRA costs (excluding direct 
     vacancy costs)                             7.5       7.8          16.5 
                                           --------  --------  ------------ 
 
    Gross rental income                        30.9      30.8          62.0 
    Less ground rent costs                    (1.5)     (1.6)         (3.1) 
    Share of joint venture & associate 
     gross rental income less ground 
     rent costs                                 1.1       1.5           3.4 
    Less inclusive lease costs recovered 
     through rent                             (0.9)     (1.0)         (1.9) 
                                           --------  --------  ------------ 
    Gross rental income                        29.6      29.7          60.4 
                                           --------  --------  ------------ 
 
    EPRA cost ratio (including direct 
     vacancy costs)                           30.7%     30.3%         32.2% 
    EPRA cost ratio (excluding vacancy 
     costs)                                   25.3%     26.4%         27.4% 
   --------------------------------------  --------  --------  ------------ 
 
 
 
 Wholly-owned assets portfolio information 
 At 30 June 2017 
-------------------------------------------------- 
 
 
 Physical data 
 Number of properties                          7 
 Number of lettable units                    769 
 Lettable space (sq feet 
  - million)                                 4.2 
---------------------------------------  ------- 
 
 Valuation data 
 Properties at independent 
  valuation (GBPm)                         879.8 
 Adjustments for head 
  leases and tenant incentives 
  (GBPm)                                    44.4 
                                         ------- 
 Properties as shown 
  in the financial statements 
  (GBPm)                                   924.2 
                                         ------- 
 
 Initial yield (%)                           6.0 
 Equivalent yield (%)                        6.3 
 Reversion (%)                              13.0 
 Loan to value ratio 
  (%)                                         49 
 Net debt to value ratio 
  (%)                                         46 
---------------------------------------  ------- 
 
 Lease length (years) 
 Weighted average lease 
  length to break (years)                    6.4 
 Weighted average lease 
  length to expiry (years)                   7.7 
---------------------------------------  ------- 
 
 Passing rent (GBPm) 
  of leases expiring in: 
 Six months to 30 December 
  2017                                       8.4 
 Year to 30 December 
  2018                                       3.2 
 Three years to 30 December 
  2021                                      14.3 
 
 ERV (GBPm) of leases 
  expiring in: 
 Six months to 30 December 
  2017                                       8.3 
 Year to 30 December 
  2018                                       3.7 
 Three years to 30 December 
  2021                                      15.6 
 
 Passing rent (GBPm) 
  subject to review in: 
 Six months to 30 December 
  2017                                       5.4 
 Year to 30 December 
  2018                                       3.0 
 Three years to 30 December 
  2021                                       9.6 
 
 ERV (GBPm) of passing 
  rent subject to review 
  in: 
 Six months to 30 December 
  2017                                       5.2 
 Year to 30 December 
  2018                                       3.0 
 Three years to 30 December 
  2021                                      10.6 
---------------------------------------  ------- 
 
 Rental Data 
 Contracted rent at period 
  end (GBPm)                                63.8 
 Passing rent at period 
  end (GBPm)                                59.9 
 ERV at period end (GBPm 
  per annum)                                67.6 
 Occupancy rate (%)                         95.5 
---------------------------------------  ------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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