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RDI Rdi Reit P.l.c.

121.20
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Rdi Reit P.l.c. LSE:RDI London Ordinary Share IM00BH3JLY32 ORD 40P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 121.20 121.20 121.40 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Redefine International PLC Interim Results for the Half Year End (3274D)

26/04/2017 7:00am

UK Regulatory


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TIDMRDI

RNS Number : 3274D

Redefine International PLC

26 April 2017

REDEFINE INTERNATIONAL P.L.C.

("Redefine International" or the "Company" or the "Group")

(Registration number 010534V)

LSE share code: RDI

JSE share code: RPL

ISIN: IM00B8BV8G91

INTERIM RESULTS FOR THE six monthsED 28 february 2017

committed to being the UK's leading income-focused REIT

Redefine International, the FTSE 250 income-focused UK-REIT, which has a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange, today announces its results for the six months ended 28 February 2017.

Financial Highlights

 
                                               Six months     Six months 
                                                    ended          ended   Year ended 
                                              28 February    29 February    31 August 
 Income statement                                    2017           2016         2016 
==========================================  =============  =============  =========== 
 EPRA earnings (GBPm)                                23.8           23.1         44.1 
==========================================  =============  =============  =========== 
 Underlying earnings (re-based) (1) 
  (GBPm)                                             24.3           21.5         46.3 
==========================================  =============  =============  =========== 
 Underlying earnings per share (re-based) 
  (p)                                                1.35            1.4          2.8 
==========================================  =============  =============  =========== 
 Dividend per share (p)                               1.3          1.625          3.2 
==========================================  =============  =============  =========== 
 
 Balance sheet 
==========================================  =============  =============  =========== 
 Portfolio valuation (incl. JV share, 
  GBPm)                                           1,459.4        1.524.4      1,529.0 
==========================================  =============  =============  =========== 
 Loan-to-value (%) (2)                               49.9           52.5         53.4 
==========================================  =============  =============  =========== 
 EPRA NAV per share (p)                              40.4           40.3         40.0 
==========================================  =============  =============  =========== 
 

(1) Refer to Glossary for explanation

(2) LTV as reported at 28 February 2016 was pro-forma adjusted for AUK completion on 1 March 2016 and excludes The Hague

   --     Underlying earnings per share of 1.35 pence, in line with guidance 
   --     Weighted average cost of debt reduced to 3.3% (31 August 2016: 3.4%) 
   --     Interest cover improved to 3.1 times (31 August 2016: 2.7 times) 
   --     Cash and available facilities of GBP100.3 million (31 August 2016: GBP57.3 million) 

Operating Highlights

-- Disposals totalling GBP95.0 million at an average premium of 12.4% to August 2016 market value

-- 40 new leases completed in the period for a gross annual rent of GBP2.2 million, 2.3% ahead of ERV

   --     Occupancy increased to 98.0% (31 August 2016: 97.7%) 
   --     Weighted average unexpired lease term of 7.5 years (31 August 2016: 7.8 years) 

-- Acquisition of controlling interest in the German supermarket portfolio, previously held in joint venture, for EUR49.4 million (GBP42.2 million) including costs, post period end

Greg Clarke, Chairman, commented:

"Against an uncertain backdrop, Redefine International has delivered a solid performance underpinned by a strategy which is expected to deliver a much stronger Company, portfolio and capital structure for the benefit of shareholders over the long-term. Following a number of transactions, the portfolio is now well on the way to being successfully repositioned for future income growth, meaning we can look to the future with renewed confidence."

Mike Watters, Chief Executive, commented:

"The disposals achieved during the period, in addition to the selective re-investment of proceeds, illustrate our commitment to improving the overall quality of the portfolio. Simultaneously, we have strengthened our capital structure, underpinning sustainable shareholder value and enhanced long-term growth prospects. Our first-class asset management team continues to identify new opportunities to create value and sustain high occupancy levels, supporting our ability to deliver superior income-led total returns in this historic low interest rate environment.

"With optimism in the long-term outlook of the markets we operate in, we remain committed to driving Redefine International forward to cement the Company's position as the UK's leading income-focused diversified REIT."

Results presentation, webcast and conference call

A meeting for analysts and investors will take place at 9.00 a.m. (UK time) at 'etc.venues', Monument, 8 Eastcheap, London, EC3M 1AE. The presentation and a live webcast will be available at 9.00 a.m. (UK time), 10.00 a.m. (SA time) which can be accessed via the homepage of the Company's website: www.redefineinternational.com.

Conference call dial-in numbers

United Kingdom Local: 020 3059 8125

South Africa Local: 0318 197 008 or 0800 999 282

All other locations: +44 20 3059 8125

Conference code: Redefine

For further information, please contact:

 
Redefine International P.L.C. 
Mike Watters, Stephen Oakenfull   Tel: +44 (0) 20 7811 0100 
 
FTI Consulting 
UK Public Relations Adviser 
Dido Laurimore, Claire Turvey,    Tel: +44 (0) 20 3727 1000 
 Ellie Sweeney 
 
Instinctif Partners 
SA Public Relations Adviser 
Frederic Cornet, Lizelle du Toit   Tel: +27 (0) 11 447 3030 
 
JSE Sponsor 
Java Capital                      Tel: + 27 (0) 11 722 3050 
 
 

Disclaimer

This release includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Redefine International P.L.C. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any information contained in this release on the price at which shares or other securities in Redefine International P.L.C. have been bought or sold in the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance.

STRATEGIC REPORT

Chief Executive's Report

In February 2017, the Company held its first Capital Markets Day where it set out its strategic priorities. With the Company experiencing a period of significant growth, we recognised the need to strengthen our portfolio and balance sheet in order to continue to deliver sustainable shareholder value and enhance growth prospects for the future.

I am pleased to report that we have already delivered solid progress against these objectives including a reduction in leverage to 49.9 per cent, the successful disposal of GBP95.0 million of assets at a 12.4 per cent premium to the August 2016 market value and the re-investment post period end of EUR49.4 million (including transaction costs) to acquire control of the German supermarket portfolio, previously held in a joint venture.

Results and dividends

Re-based underlying earnings increased by 13.0 per cent to GBP24.3 million (29 February 2016: GBP21.5 million) due to the full period impact of the AUK acquisition, the second tranche of which completed in March 2016. EPRA NAV per share increased by 1.0 per cent to 40.4 pence (31 August 2016: 40.0 pence) which was largely the result of both realised and unrealised gains on the property portfolio.

The Board has declared an interim dividend of 1.3 pence per share (29 February 2016: 1.625 pence per share), on earnings of 1.35 pence per share, which is in line with our re-based earnings metric and highlights progress towards our distribution pay-out target previously communicated.

Strategic priorities

Scalable business

There are a number of long-term benefits associated with greater scale, including enhanced access to capital markets, greater liquidity, lower cost of capital, overhead efficiencies and operational flexibility. However, these benefits will remain secondary to securing the right investment opportunities and the actions we are currently taking, including strengthening the balance sheet, places the Company in a stronger position to capitalise on future opportunities that may arise whilst weathering any potential Brexit volatility.

Income-focused portfolio

The portfolio continues to be enhanced through capital recycling and re-investment into income-led asset management opportunities within the existing portfolio. The disposals completed in the period reflected an average net initial yield of 6.1 per cent and an average reversionary yield of 5.8 per cent, illustrating our strategy of recycling out of assets with weak rental or income growth potential and concentrating the portfolio on assets with stronger growth prospects.

Efficient capital structure

The Group's loan-to-value ratio reduced to 49.9 per cent (31 August 2016: 53.4 per cent) largely as a result of a GBP58.3 million reduction in our proportionate share of debt to GBP792.3 million (31 August 2016: GBP850.6 million) and an increase in cash balances to GBP63.7 million (31 August 2016: GBP34.3 million). A further GBP29.0 million of disposals have been completed or are under offer post period end.

The Group's weighted average cost of debt reduced to 3.3 per cent (31 August 2016: 3.4 per cent) following a period of pro-active refinancing which has continued post period end, providing visibility of further reductions in the cost of debt and creating greater interest cost certainty as debt facilities are extended.

The long-term debt secured against four of our UK shopping centres has been successfully restructured post period end to reduce leverage and interest costs. The aggregate facility of GBP167.8 million has been reduced to GBP146.1 million and extended to April 2042. This restructuring included the termination of the historic profit share arrangement on Grand Arcade, Wigan. The aggregate prepayment and restructuring costs of GBP27.6 million will provide a marginal return of c.10 per cent, which will be accretive to earnings and efficient in terms of reduction in leverage.

Financial discipline

As previously announced, our earnings metric has been revised to an EPRA based measure which better aligns our earnings and dividend policy to operating cashflow. The dividend announced today of 1.3 pence reflects a pay-out against underlying earnings of 96 per cent. Our medium-term guidance on the pay-out ratio remains 90 - 95 per cent of underlying earnings, with dividends in the shorter term likely to be at the higher end of that range.

The combination of lower leverage and a reduced cost of debt has improved interest cover at a Group level to 3.1 times (31 August 2016: 2.7 times).

Outlook

The UK economy has proved more resilient since the June 2016 EU referendum than was widely anticipated, with growth forecasts recently revised upwards to 2.0 per cent for 2017. Unemployment has remained low and recent growth appears to be widespread across most regions. Notwithstanding this, the UK faces a number of uncertainties including an imminent General Election and the subsequent Brexit negotiations, as well as rising inflation.

The UK triggered Article 50 on 29 March 2017 which started the formal process of leaving the European Union. Despite the possibility of a protracted period of negotiation and market volatility, the UK continues to be a truly global real estate market supported by many factors including its skills base. London now employs more people in the information and communications sector than it does in the traditional finance and insurance sectors, evidenced by the continued strength in the occupier market in recent months.

The outlook for the German economy appears stable with modest growth and one of the lowest unemployment rates in Europe at 4.3 per cent. Prime yields in Germany's core markets are now at, or below, their last peak, but continuing scarcity of investment product and strong investment demand, particularly for prime assets, suggests ongoing support for valuations.

Our diversified portfolio, which includes a 21 per cent weighting to Germany (25 per cent following the German supermarket portfolio acquisition) and no direct exposure to the financial services markets in London, gives us relative confidence in our outlook.

Inflation and interest rates will continue to be closely monitored. General expectations are for official UK interest rates to rise in the next 24 months but for future increases to be gradual. Interest rates in Europe are also anticipated to remain low for an extended period, although the European Central Bank monetary stimulus is likely to be reduced. Our pro-active approach to refinancing and extending debt maturities early in the current low interest rate environment places us in a strong position over the medium term in respect of interest cost certainty and mitigates refinancing risk.

Whilst there is ongoing political and economic uncertainty, we are focused on our strategic priorities and the fundamentals of our business. We will continue to enhance our portfolio by allocating capital to assets and opportunities that can provide sustainable and growing rental income and we will deliver that income to shareholders efficiently from a robust balance sheet.

Based on the results for the first half and current trading conditions, the Company's earnings guidance remains unchanged for the 2017 financial year, between 2.7 to 2.8 pence per share.

Mike Watters

Chief Executive

26 April 2017

STRATEGIC REPORT

Operating review

Portfolio Overview

The income characteristics of the portfolio continue to be enhanced through disciplined capital allocation and active asset management. We are focused on all aspects of income growth including income-led development, asset management opportunities and ancillary income generation through our commercialisation process. With long-term real estate returns proven to be driven largely by income returns, the portfolio is being progressively positioned to provide consistent and sustainable income with potential for capital growth:

-- 32.3 per cent of the portfolio is subject to inflation-linked or fixed rental increases providing guaranteed income growth in a rising inflationary environment.

-- Our weighted average lease length of 7.5 years is complemented by only 21 per cent of leases by rental income being subject to tenant breaks or expiries in the next five years.

-- Our portfolio, diversified by sector and geography, provides a broad range of high quality tenants with little concentration risk.

-- Our internally managed commercialisation function is actively enhancing the quality of advertising and promotional activity within our retail assets. Commercialisation income of GBP1.1 million has already been secured in 2017, a 20 per cent increase on the same period last year.

 
                                                                                                        EPRA 
                                                                                                       voids 
                                 Annualised 
                                      gross                         EPRA 
                        Market       rental             EPRA      topped   Reversionary 
 Portfolio summary       value       income       ERV    NIY    up yield          yield             (by ERV)   Indexed 
                                                                                           WAULT 
  28 February 2017      (GBPm)       (GBPm)    (GBPm)    (%)         (%)            (%)    (yrs)         (%)       (%) 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 UK Retail               537.0         40.3      40.3    6.2         6.4            7.0      8.3         2.5      15.6 
 UK Commercial           386.1         24.9      25.4    5.6         5.9            6.1      5.9         3.3      25.6 
 UK Hotels               229.3         15.3      15.5    6.2         6.2            6.3      9.8           -       5.2 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 Total UK              1,152.4         80.5      81.2    6.0         6.2            6.6      7.8         2.3      16.7 
 Europe                  307.0         19.6      20.4    5.3         5.4            6.2      6.1         1.0      96.5 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 Total                 1,459.4        100.1     101.6    5.9         6.0            6.5      7.5         2.0      32.3 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 
 Wholly owned          1,359.6         92.4      94.2    5.8         6.0            6.5      7.5         2.1      27.7 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 Held in joint 
  ventures 
  (proportionate)         99.8          7.7       7.4    6.6         6.6            6.9      8.1         0.8      88.2 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 

Leasing activity

Portfolio occupancy by ERV increased to 98.0 per cent (31 August 2016: 97.7 per cent) driven largely by successful lettings in the UK Commercial portfolio totalling 42,500 sqft (3,900 sqm).

 
 Leasing activity summary 
--------------------------------------------  --------------- 
 
 New lettings and lease renewals 
--------------------------------------------  --------------- 
 Number                                                    40 
 Annualised rental income from new lettings    GBP2.2 million 
 Comparison to ERV                                       2.3% 
 
 Rent reviews 
--------------------------------------------  --------------- 
 Number                                                    57 
 Passing rent agreed                           GBP3.8 million 
 Comparison to previous passing rent                     4.2% 
 Comparison to ERV                                       8.4% 
--------------------------------------------  --------------- 
 

Key leasing activity completed during the period:

-- City Point, Leeds - all of the remaining vacant space at City Point, Leeds, comprising 10,900 sqft (1,000 sqm) on the second floor, was filled following the signing of a 10 year lease to Blacks Solicitors in January 2017, which was completed at GBP25.0 psf, in line with ERV. The 61,500 sqft (5,700 sqm) office building is now fully occupied and has a strong tenant mix including Ashcourt Rowan p.l.c., GVA, Savills, JLL, Starbucks and HSBC.

-- Schloss Strassen Centre, Berlin - REWE has agreed to a 10 year reversionary lease creating a 15 year unbroken term which will see it increase its floor area by approximately 1,900 sqft (200 sqm) subject to obtaining vacant possession of a neighbouring unit. The agreed annualised rent of EUR0.4 million p.a. is in line with the current passing rent of the combined units.

Rateable values

In January 2016 the UK Valuation Office Agency published an updated rating list for England and Wales which has been adopted from 1 April 2017. The change in rateable values for commercial real estate will have a direct impact on business rates and therefore the total cost of occupation to tenants and the cost of vacant space to landlords. In general, rates are expected to increase materially in London while many regional centres are anticipated to see a reduction in rateable values. Across our UK portfolio (excluding the UK Hotel portfolio) our expectation is for rates to reduce by approximately 6.9 per cent. Our hotels, which are largely London focused, are anticipated to see a 51 per cent increase in rates. The impact of the change in rates is to be phased in over a three year period, however, the change is now reflected in hotel property values.

Acquisitions

On 7 April 2017, the Company announced the acquisition of a controlling interest in the Leopard portfolio from its joint venture partner, Redefine Properties.

The Leopard portfolio comprises 66 properties and totals 1,505,500 sqft (140,000 sqm) of lettable area. It includes a mixture of stand-alone supermarkets, foodstore anchored retail parks and cash & carry stores. The properties are well located within their respective micro markets, with 86.4 per cent of the total annual rental income located in Western Germany and Berlin and the remainder in Eastern Germany.

Key portfolio attributes include:

   --      Gross rental income of EUR13.9 million. 

-- Edeka, Netto, Real and Rossmann account for over 85.6 per cent of gross rental income, providing strong tenant covenants.

   --      WAULT of 8.4 years. 
   --      Portfolio occupancy of 99.2 per cent by estimated market rental value. 

-- 99.2 per cent of gross rental income is indexed, typically between 60 - 70 per cent of German CPI, subject to cumulative indexation reaching a hurdle of 10 per cent since the last rent review date.

The portfolio provides exposure to high quality, secure, indexed-linked cashflows with opportunities to extend existing stores and re-gear leases.

 
                                     Annualised 
   Leopard portfolio     Market    gross rental                        Reversionary 
   28 February            value          income       ERV   EPRA NIY          yield    WAULT   Indexed 
   2017                  (EURm)          (EURm)    (EURm)        (%)            (%)    (yrs)       (%) 
---------------------  --------  --------------  --------  ---------  -------------  -------  -------- 
 Edeka                     90.8             6.8       6.5        7.1            6.7      9.7     100.0 
 Netto                     25.4             2.1       2.0        7.7            7.3      8.9     100.0 
 Real                      28.8             2.4       2.2        7.9            7.1      6.3     100.0 
 Multi-let                 30.5             2.6       2.5        7.9            7.7      6.3      93.2 
---------------------  --------  --------------  --------  ---------  -------------  -------  -------- 
 Total                    175.5            13.9      13.2        7.4            7.0      8.4      99.2 
---------------------  --------  --------------  --------  ---------  -------------  -------  -------- 
 

The acquisition provides an efficient re-investment of capital from recent disposals into a portfolio in which the Company already held a 50 per cent share. The acquisition also further simplifies the Company's portfolio and structure, with the Leopard portfolio assets now under our control, providing greater flexibility over future asset management and investment decisions.

Disposals

It has been an active period with GBP95.0 million of assets sold in seven separate transactions, with a further GBP29.0 million completed or under offer post period end. Our disposal strategy has focused on assets where business plans have been successfully executed and values maximised, as well as assets with negative rental and/or capital growth expectations. Disposals completed during the period reflected a 12.4 per cent premium to August 2016 market value. Net rental income associated with these disposals totals GBP6.1 million.

 
                                                                                              Reversionary 
                                            Market value                           EPRA NIY          yield 
                                               31 August     Sales   Net rental    on sales       on sales 
                                                    2016     price       income       price          price 
 Disposals since 
  31 August 2016               Completion         (GBPm)    (GBPm)       (GBPm)         (%)            (%) 
---------------------------  ------------  -------------  --------  -----------  ----------  ------------- 
                                September 
 Brandenburg, Germany                2016            0.1       0.2            -        15.4           12.1 
 Exchange House,                  October 
  Watford                            2016           11.8      13.3          1.0         6.9            5.8 
                                  January 
 VBG portfolio, Germany              2017           40.6      44.4          3.3         7.2            4.9 
                                  January 
 201 Deansgate, Manchester           2017           25.5      29.2          1.1         3.6            7.0 
 Parliament Square,              February 
  Edinburgh                          2017            3.5       4.0          0.4         9.3            4.1 
                                 February 
 Delta 900, Swindon                  2017            2.7       3.6          0.3         7.3            8.0 
 Recklinghausen,                 February 
  Germany                            2017            0.3       0.3            -         6.1            7.6 
---------------------------  ------------  -------------  --------  -----------  ----------  ------------- 
 Total                                              84.5      95.0          6.1         6.1            5.8 
-----------------------------------------  -------------  --------  -----------  ----------  ------------- 
 
 

Exchange House, Watford

As announced with our prior year end results, the sale of Exchange House was completed in October 2016 for GBP13.3 million, a 12.7 per cent premium to August 2016 market value. The sale price reflects a net initial yield of 6.9 per cent and a reversionary yield of 5.8 per cent. The 63,000 sqft (5,900 sqm) office building is occupied by the Department of Work and Pensions until March 2023 with a break option in March 2018. The annual passing rent was GBP1.0 million.

VBG

On 18 January 2017, the Company completed on the sale of four German office assets for a gross consideration of EUR106.0 million. The assets, which were disposed of via a share sale and included related debt facilities, were held in a joint venture with the Menora Mivtachim Group. The Company's 49 per cent share reflects an 8.6 per cent premium to the August 2016 market value in Euro terms. The Company's net proceeds of EUR24.9 million, which includes a performance fee of EUR2.4 million, delivered an IRR of 27 per cent over the investment period.

The properties, situated in Berlin, Dresden, Cologne and Stuttgart, total 485,900 sqft (45,100 sqm), and are let to a German government-backed social insurance body, VBG, on a combined WAULT of just under seven years. The portfolio generated a total annual gross rental income of EUR8.1 million, of which EUR4.0 million was attributable to Redefine International.

Deansgate, Manchester

On 31 January 2017, the Company completed on the disposal of 201 Deansgate in Manchester for GBP29.2 million. The property provides 83,700 sqft (7,800 sqm) of office space and delivered an annual net rental income of GBP1.1 million, with a WAULT of 4.1 years. The office was originally acquired as part of the AUK Portfolio in March 2016 and the sales price represents a net initial yield of 3.6 per cent and a 14.3 per cent premium to the last reported market value. The geared IRR over the investment period was 22 per cent.

Development and capital expenditure

Development activity is focused on refurbishing existing assets and adding incremental space and income to meet additional occupier demand.

 
                                                             Capital                          Yield on 
                                                         expenditure                              cost 
 Scheme                      Description                      (GBPm)     Start   Completion        (%) 
--------------------------  -------------------------  -------------  --------  -----------  --------- 
 City Arcaden, Ingolstadt    Primark development                15.8   Q1 2016      Q3 2017        5.4 
 Holiday Inn Express,        12 room extension 
  Southwark                   and refurbishment                  3.6   Q4 2016      Q3 2017        6.0 
 Albion Street, 
  Derby                      Redevelopment (pre-let)             2.2   Q1 2016      Q2 2018        9.7 
 Retail Parks                5 additional units                  2.6   Various    2017/2018       12.2 
 Foodstore extensions, 
  Germany                    3 extensions                        4.3   Various    2017/2018        7.7 
--------------------------  -------------------------  -------------  --------  -----------  --------- 
 Total                                                          28.5                               6.8 
-----------------------------------------------------  -------------  --------  -----------  --------- 
 

City Arcaden, Ingolstadt

The redevelopment of this prime retail asset is anticipated to be completed in June 2017 and will transform the existing retail pitch. The completed scheme will total approximately 129,000 sqft (12,000 sqm) including two retail units let to Primark and H&M of approximately 100,000 sqft (9,500 sqm). The scheme is anticipated to generate EUR2.1 million in rental income resulting in a yield on cost of 5.4 per cent.

Holiday Inn Express, Southwark

The twelve room extension and upgrade to the front and rear façade is on target with development works anticipated to be completed in the third quarter of 2017. The hotel's operating business continues to deliver consistent underlying revenue growth with revenue up 1.3 per cent year-to-date despite the disruptions from the extension and refurbishment works.

Albion Street, Derby

Terms have been agreed for a new 15 year lease with an international discount fashion retailer at a rent of GBP0.2 million p.a. The introduction of a well-known international brand will strengthen the retail pitch considerably and support the letting of the remaining vacant shop units.

Retail Parks

Four additional pods are at advanced stages of planning approval and the new Pure Gym unit at Banbury Cross Retail Park is under construction. In total, the new units will provide an additional GBP0.3 million of rental income reflecting a yield on cost of 12.2 per cent.

Foodstore extensions, Germany

Three extensions to foodstore units are being progressed which include extending the existing leases to new 15 year terms. The extensions for tenants such as REWE, Edeka and Netto will provide long-term indexed-linked income returns from strong covenants. They total over 12,900 sqft (1,200 sqm) and are expected to provide a yield on cost of 7.7 per cent.

UK Retail

UK consumer confidence has recovered quickly post the initial shock of the EU referendum result. However, inflationary pressure following Sterling weakness and its impact on import prices is yet to be fully reflected in economic terms. The outlook therefore remains cautious with value oriented retailers likely to be more resilient.

Occupancy across the UK Retail portfolio declined marginally to 97.5 per cent (31 August 2016: 98.7 per cent). The portfolio value was broadly unchanged at GBP537.0 million (31 August 2016: GBP537.1 million). UK Shopping Centres declined 0.7 per cent largely as a result of a 0.5 per cent reduction in gross rental income reflecting a 150 bps increase in vacancy. Conversely, UK Retail Parks and Other Retail increased by 1.1 per cent to GBP202.0 million (31 August 2016: GBP199.9 million).

 
                                                                                                        EPRA 
                                                                                                       voids 
                                 Annualised 
                                      gross                         EPRA 
                        Market       rental             EPRA      topped   Reversionary 
 UK Retail               value       income       ERV    NIY    up yield          yield             (by ERV)   Indexed 
                                                                                           WAULT 
  28 February 2017      (GBPm)       (GBPm)    (GBPm)    (%)         (%)            (%)    (yrs)         (%)       (%) 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 UK Shopping Centres     335.0         26.2      27.2    6.2         6.4            7.6      7.7         3.4      22.6 
 UK Retail Parks         169.8         11.7      10.8    6.2         6.5            6.0      7.9           -       3.1 
 UK Retail - Other        32.2          2.4       2.3    6.4         6.4            6.7     16.6         3.3         - 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 UK Retail               537.0         40.3      40.3    6.2         6.4            7.0      8.3         2.5      15.6 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 

Shopping Centres

Occupancy across the UK shopping centre portfolio declined to 96.6 per cent (31 August 2016: 98.1 per cent). Rental income across the shopping centre portfolio declined marginally with annualised gross rental income down 0.5 per cent. ERVs have remained broadly unchanged. The 41,300 sqft (3,800 sqm) former BHS unit at Grand Arcade, Wigan is now under offer to a national operator.

Asset management activity has been targeted at income-led opportunities including the refurbishment of the food court and the reconfiguration of retail space at West Orchards, Coventry to drive new lettings, including 4,000 sqft (400 sqm) let to Footasylum. In aggregate, asset management initiatives at West Orchards are targeting additional net rental income of GBP0.5 million which would reflect an approximate yield on cost of 18.0 per cent.

Retail Parks

Our retail park portfolio remains fully occupied which, when combined with generally low vacancy rates across the sector, gives us cautious optimism in relation to occupier demand and rental value growth.

Asset management activity is focused on adding marginal income through the introduction of convenience food and beverage offerings, extensions for leisure use and commercialisation opportunities across the portfolio. Pre-let agreements have been secured for GBP0.3 million of rental income including a new 10 year lease with Pure Gym at Banbury Cross Retail Park. The 7,500 sqft (700 sqm) extension will deliver GBP0.2 million of rental income and a yield on cost of 15.0 per cent.

UK Commercial

The regional office market has remained robust with the availability of Grade A space well below historic averages.

Occupancy across the UK Commercial portfolio increased to 96.7 per cent (31 August 2016: 94.6 per cent) following over 42,500 sqft (3,900 sqm) of new lettings and renewals in the office portfolio and the sale of 201 Deansgate, Manchester which included 16,600 sqft (1,500 sqm) of vacant office space.

The portfolio value increased by 2.7 per cent on a like-for-like basis to GBP386.1 million. The overall increase was driven predominantly by strong uplifts in the distribution and industrial assets and in the office at Charing Cross Road, London, reflecting a strong investment market and clear evidence of underlying rental growth.

 
                                                                                                        EPRA 
                                                                                                       voids 
                                 Annualised 
                                      gross                         EPRA 
                        Market       rental             EPRA      topped   Reversionary 
 UK Commercial           value       income       ERV    NIY    up yield          yield             (by ERV)   Indexed 
                                                                                           WAULT 
  28 February 2017      (GBPm)       (GBPm)    (GBPm)    (%)         (%)            (%)    (yrs)         (%)       (%) 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 UK Offices - 
  Greater 
  London                  87.1          3.4       4.4    3.0         3.5            4.7      7.1           -      19.9 
 UK Offices - 
  Regional               127.9         11.0      10.6    7.3         7.8            7.7      3.7         5.2      25.5 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 UK Offices              215.0         14.4      15.0    5.6         6.1            6.5      4.5         3.7      24.2 
 UK Distribution 
  and Industrial         104.1          6.2       7.0    5.3         5.6            6.3      5.5         4.0         - 
 UK Automotive            67.0          4.3       3.4    6.0         6.0            4.7     11.3           -      67.2 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 UK Commercial           386.1         24.9      25.4    5.6         5.9            6.1      5.9         3.3      25.6 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 

Office Portfolio

An active period of leasing combined with the sale of 201 Deansgate, Manchester has increased occupancy across the portfolio to 96.3 per cent (31 August 2016: 93.1 per cent). Three leases totalling 15,100 sqft (1,400 sqm) were completed in the period providing rental income of GBP0.3 million, marginally ahead of ERV.

Our office at Charing Cross Road continues to benefit from the large-scale investment in the immediate area in connection with the Crossrail Tottenham Court Road Station which is due to start operating in 2018. Crossrail will link the West End to Canary Wharf in twelve minutes, Stratford in thirteen and Heathrow in less than 30, bringing an additional 1.5 million people to within a 45 minute commute of the popular retail and entertainment district. We have received strong occupational and investment demand providing a range of asset management options for the property. A pre-planning application has been submitted and the detailed planning process is on-going.

The major letting during the period was to Blacks Solicitors at City Point, Leeds. The firm of solicitors took the remaining 10,900 sqft (1,000 sqm) on a 10 year lease at a headline rent of GBP25.0 psf which was in line with ERV.

Distribution and Industrial Portfolio

The distribution and industrial sectors remain beneficiaries of the ongoing change in all aspects of retail. Demand from online retailers resulted in a record 34 million sqft of warehouse space being transacted in the UK during 2016. This demand, coupled with relatively low levels of supply and a relatively modest development pipeline, should be supportive of rents.

Given the strength of the occupational market, the investment market has been equally strong with GBP2.6 billion of acquisitions in 2016. Prime yields stand at around 5.0 per cent although investment demand is placing further downward pressure on yields.

These trends are evident in our own portfolio, particularly at Camino Park, Crawley where GBP1.6 million of rental income is subject to rent review in late 2017. Average passing rents on acquisition in March 2016 were GBP7.5 psf. Recent lettings have been completed at GBP10.3 psf and more recent evidence indicates rents of GBP13.0 psf which would reflect an increase of approximately 73 per cent on passing rent since acquisition.

The refurbishment of 53,400 sqft (5,000 sqm) of vacant space at Colchester has been completed and is now being actively marketed.

UK Hotels

Following a relatively weak start to the financial year, underlying trading during recent months has recovered strongly with revenue figures for the six month period to 28 February 2017 ahead of management's budgets and the prior period performance by 1.3 and 3.9 per cent respectively. This recent strong trading performance has been partly offset by the anticipated impact of higher rates, particularly across the London portfolio.

The outlook for London hotels is mixed with uncertainty around the impact of the vote to leave the EU, security concerns and tighter corporate travel budgets offset by the positive impact of the significant fall in Sterling which is expected to support tourism and investment demand. Occupancy and RevPar are forecast by PwC to grow by 0.9 per cent and 3.3 per cent respectively. We have experienced a similar trend, with current trading performance showing modest growth over the same period last year. Supply of hotel space is expected to grow by approximately five per cent in London over 2017 with the majority still focused on budget hotels.

The portfolio value remained broadly unchanged at GBP229.3 million (31 August 2016: GBP229.2 million).

 
                                                                                                        EPRA 
                                                                                                       voids 
                                 Annualised 
                                      gross                         EPRA 
                        Market       rental             EPRA      topped   Reversionary 
 UK Hotels               value       income       ERV    NIY    up yield          yield             (by ERV)   Indexed 
                                                                                           WAULT 
  28 February 2017      (GBPm)       (GBPm)    (GBPm)    (%)         (%)            (%)    (yrs)         (%)       (%) 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 Greater London 
  Portfolio              181.2         12.0      12.2    6.2         6.2            6.3      8.8           -         - 
 Edinburgh, 
  DoubleTree 
  by Hilton               33.1          2.6       2.6    7.2         7.2            7.2      9.0           -       3.4 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 RBDL Managed Hotels 
  (1)                    214.3         14.6      14.8    6.4         6.4            6.4      8.8           -       0.6 
 London, Enfield 
  Travelodge              15.0          0.7       0.7    4.5         4.5            4.5     30.4           -     100.0 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 UK Hotels               229.3         15.3      15.5    6.2         6.2            6.3      9.8           -       5.2 
--------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 

(1) Subject to annual review with reference to forecast EBITDA of the RedefineBDL managed portfolio.

RedefineBDL

The Company's 30.4 per cent stake in RedefineBDL, the largest independent hotel management company in the UK, produced underlying earnings of GBP0.3 million during the period, a decrease of GBP0.9 million over the same period last year which included a GBP1.1 million contract termination fee.

International Hotel Properties Limited

The Company's 17.2 per cent investment in International Hotel Properties Limited ("IHL") had a market value of GBP9.8 million at 28 February 2017 resulting in a fair value gain of GBP1.0 million for the first half of the year. No dividend has yet been declared in respect of the current financial period.

Europe

Strong fundamentals in Germany combined with low interest rates and uncertainty in other European investment markets has led to sustained capital flows into commercial real estate and significant competition for good quality investment opportunities. These dynamics have led to yields reaching historic lows in many markets, particularly for core assets. Given the strength of the investment market, returns will be increasingly reliant on income and rental growth with further yield compression likely to be limited.

The European portfolio occupancy increased to 99.0 per cent (31 August 2016: 98.5 per cent) following 64,200 sqft (6,000 sqm) of new lettings and renewals.

The portfolio value increased by 0.2 per cent on a like-for-like basis in local currency terms to EUR337.1 million. The shopping centre portfolio, including development property, increased in value by 2.0 per cent to EUR192.4 million reflecting strong investment demand, particularly for core assets in Berlin and Hamburg.

 
                                                                                                       EPRA 
                                                                                                      voids 
                                Annualised 
                                     gross                         EPRA 
                       Market       rental             EPRA      topped   Reversionary 
 Europe                 value       income       ERV    NIY    up yield          yield             (by ERV)   Indexed 
                                                                                          WAULT 
  28 February 2017     (GBPm)       (GBPm)    (GBPm)    (%)         (%)            (%)    (yrs)         (%)       (%) 
-------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 Shopping Centres       164.3          8.8       9.8    4.3         4.5            5.6      4.9         0.1      95.8 
 Supermarkets and 
  Retail Parks          142.7         10.8      10.6    6.4         6.4            6.9      7.1         1.9      97.0 
-------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 Europe                 307.0         19.6      20.4    5.3         5.4            6.2      6.1         1.0      96.5 
-------------------  --------  -----------  --------  -----  ----------  -------------  -------  ----------  -------- 
 

Asset management activity has focused on the Schloss-Strassen Centre in Berlin with plans to modernise the existing food court and improve the food offering, as well as increase the allocation of space to food and convenience offerings.

Bakery Junge, have taken 1,900 sqft (200 sqm) of previously vacant space at an annual rent of EUR0.1 million. The national operator provides a popular concept and will broaden the food offer to cater for commuter footfall associated with the centre's strong transport links.

REWE has agreed to a conditional lease extension which would create a 15 year unbroken term and increase its floor area by approximately 1,900 sqft (200 sqm). The agreed annualised rent of EUR0.4 million p.a. is in line with the current passing rent of the combined units.

The pharmacy chain, dm, has also agreed to extend their floor area by 1,100 sqft (100 sqm) into the neighbouring vacant unit on a new 10 year lease for a total rent of EUR0.3 million.

STRATEGIC REPORT

Financial review

Overview

The Group had an active first half of 2017, particularly with respect to capital recycling and leverage reduction. In total, GBP95.0 million of assets were disposed at an aggregate premium of GBP10.5 million (12.4 per cent) on 31 August 2016 valuations. Most notable were the disposals of the VBG portfolio in Germany and an office building in Deansgate, Manchester which achieved IRRs over the investment period of 27 per cent and 22 per cent respectively.

The proceeds generated reduced the Group's loan-to-value ratio and supported re-investment into assets with improved property fundamentals, post period end. Three small facilities were also refinanced, typically at lower gearing levels and with lower associated margins.

The Company hosted a Capital Markets Day in early February to provide an update on business activities and give further guidance and explanation of the strategic rationale surrounding the change to the Group's key earnings measure and dividend policy.

The combined effect of aligning earnings to an EPRA based measure, whilst lowering the Group's pay-out ratio, has provided headroom to operational cashflow, a degree of financial flexibility for investment, progression of asset management initiatives and leverage reduction.

The Group's key earnings metric, underlying earnings, is based on EPRA earnings. This is then adjusted to remove the impact of foreign exchange gains and losses and non-cash IFRS debt accretion charges which are recurring in nature and significant in size. Underlying earnings as reported for the first half of 2016 were GBP25.4 million (1.7 pence per share). Re-basing the comparative period, which removes the impact of discontinued company adjustments, would have resulted in earnings of GBP21.5 million (1.4 pence per share). The reduction in earnings per share to 1.35 pence for the first half of 2017 is attributable to both the income lost following disposals and certain non-recurring administrative costs, discussed in more detail below.

The Board has today declared a distribution of 1.3 pence per share for the first half of 2017 representing a 96 per cent pay-out ratio on re-based underlying earnings, slightly above our medium-term target range of 90 - 95 per cent. Group LTV has reduced to 49.9 per cent from 53.4 per cent at 31 August 2016, bringing us within the upper end of our medium-term LTV target range of 45 - 50 per cent.

EPRA NAV per share increased by one per cent to 40.4 pence, driven primarily by both realised and unrealised gains on the Group's property portfolio.

Presentation of financial information

Internally the Board focuses on and reviews information and reports presented on a proportionately consolidated basis, which includes the Group's share of interests in joint ventures. To align with how the Group is managed, this financial review has therefore been presented on the same basis.

 
 Income statement                                          Six months ended               Six months ended 
                                                           28 February 2017               29 February 2016 
                                                    -----------------------------  ----------------------------- 
                                                                  Joint     Group                Joint     Group 
                                                       IFRS    Ventures     Total     IFRS    Ventures     Total 
                                                       GBPm        GBPm      GBPm     GBPm        GBPm      GBPm 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 
 Gross rental income                                   45.8         5.0      50.8     40.2         4.7      44.9 
 Property operating expenses                          (4.3)       (0.5)     (4.8)    (2.5)       (0.5)     (3.0) 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 Net rental income                                     41.5         4.5      46.0     37.7         4.2      41.9 
 Other income                                           4.8       (2.0)       2.8      1.3         0.5       1.8 
 Administrative expenses                              (8.4)       (0.4)     (8.8)    (5.2)       (0.3)     (5.5) 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 Net operating income                                  37.9         2.1      40.0     33.8         4.4      38.2 
 Net finance costs                                   (11.6)       (3.4)    (15.0)   (12.2)       (3.2)    (15.4) 
 Loss from joint ventures (EPRA)                      (1.2)         1.2         -    (0.4)         0.4         - 
 Tax, FX, NCI and other                               (1.3)         0.1     (1.2)      1.9       (1.6)       0.3 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 EPRA earnings                                         23.8           -      23.8     23.1           -      23.1 
 Company Adjustments: 
 Debt fair value accretion adjustments                  0.5           -       0.5      1.1           -       1.1 
 Foreign exchange gain                                    -           -         -    (2.7)           -     (2.7) 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 Underlying earnings (re-based)                        24.3           -      24.3     21.5           -      21.5 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 Net gain on sale of joint ventures interests           5.2       (0.2)       5.0        -           -         - 
 Fair value gain/(loss) on investment property          2.6       (0.6)       2.0   (17.3)       (0.5)    (17.8) 
 Gain on disposal of investment property                5.9           -       5.9      3.4           -       3.4 
 Fair value gain on listed securities                   1.0           -       1.0      1.0           -       1.0 
 Fair value movement on derivatives                     4.4         0.9       5.3    (2.5)       (1.4)     (3.9) 
 Other finance expenses                               (1.5)           -     (1.5)    (0.8)                 (0.8) 
 Loss from joint ventures (non-underlying)            (1.5)         1.5         -    (0.6)         0.6         - 
 Tax, NCI and other                                     0.4       (1.6)     (1.2)      2.1         1.3       3.4 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 IFRS profit 
  attributable to 
  shareholders                                         40.8           -      40.8      6.8           -       6.8 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 Diluted weighted average ordinary shares (millions)                      1,804.4                        1,494.8 
 EPRA earnings per share (pence)                                              1.3                            1.5 
 Underlying earnings per share (re-based) (pence)                            1.35                            1.4 
--------------------------------------------------  -------  ----------  --------  -------  ----------  -------- 
 

In comparison to the first half of 2016, EPRA earnings have increased by GBP0.7 million or 3.0 per cent. This is due to the additional net rental income from the integrated AUK portfolio, offset by a termination fee of GBP1.2 million in respect of the cancellation of the portfolio's historic asset management contract which remained in place at acquisition.

Gross rental income increased by GBP5.9 million, the result of an additional GBP6.7 million in gross rent following completion of the second tranche of the AUK acquisition on 1 March 2016, offset by income lost following disposals during the first half of the year.

As illustrated below, like-for-like income across the UK portfolio was flat. UK Commercial increased 1.8 per cent following a number of rent reviews. UK Hotels recorded a marginal decrease as a result of lease incentive payments extended for general improvements to the portfolio.

In Sterling terms, European like-for-like income increased 14.6 per cent, the result of Sterling's weakness in the first half of 2017 compared to the same period last year. The underlying currency performance recorded a decrease in like-for-like income following a fall in turnover rents which can vary depending on tenants' trading performance.

Included within acquisitions is income from the AUK acquisition which completed on 1 March 2016, resulting in the overall increase in rental income. Although not yet like-for-like, the portfolio's performance over the six months to 28 February 2017, compared to the six months to 31 August 2016, saw an improvement of GBP0.3 million or 2.2 per cent in gross rental income.

 
                       Six months              Six months ended                                         Local currency 
                            ended              29 February 2016                                                 Change 
                      28 February                          GBPm                                                      % 
 Gross rental                2017                                                  Change 
 income                      GBPm                                                       % 
----------------  ---------------  ----------------------------  ------------------------  --------------------------- 
 UK Retail                   14.7                          14.7                         -                            - 
 UK Commercial                5.7                           5.6                       1.8                          1.8 
 UK Hotels                    7.4                           7.5                     (1.3)                        (1.3) 
----------------  ---------------  ----------------------------  ------------------------  --------------------------- 
 UK Total                    27.8                          27.8                         -                            - 
 Europe                       9.4                           8.2                      14.6                        (2.1) 
----------------  ---------------  ----------------------------  ------------------------  --------------------------- 
 Like-for-like 
  gross rental 
  income                     37.2                          36.0                       3.3                        (0.5) 
 Acquisitions                12.1                           5.4 
 Disposals                    1.4                           3.3 
 Development                  0.1                           0.2 
----------------  ---------------  ----------------------------  ------------------------  --------------------------- 
 Total gross 
  rental income              50.8                          44.9 
----------------  ---------------  ----------------------------  ------------------------  --------------------------- 
 

Property operating expenses have increased in line with the enlarged portfolio.

Other income of GBP2.8 million includes a GBP2.0 million performance fee generated following the sale of the VBG portfolio in January 2017. The Group, which provided asset management services to the joint venture, was due a performance fee based on the IRR achieved on exit. This represents the Group's proportionate share of the fee payable by Menora Mivtachim, the joint venture partner. The proceeds from the sale of the VBG portfolio have been re-invested post period end through the acquisition of the controlling interest in the German supermarket portfolio, also previously held in joint venture.

Administrative expenses of GBP8.8 million reflect a significant increase on the prior period. As previously guided, the first half of 2017 includes a non-recurring charge of GBP1.2 million relating to the termination of the AUK asset management contract previously held with Kames Capital. The recurring cost base has increased in line with the enlarged portfolio as, amongst other services, asset management activities are now performed in-house.

A GBP5.0 million gain was recognised following the disposal of the VBG portfolio, which includes cumulative foreign currency gains now realised in the income statement that arose during the investment period.

Net finance costs decreased by GBP0.4 million despite the larger portfolio, reflecting the Group's continuing efforts to drive down the overall cost of debt.

Other finance costs include GBP1.3 million charged in respect of the profit share arrangement with Aviva, the senior debt lender with security on the Grand Arcade shopping centre, Wigan. Terms were agreed post period end to refinance the facility and in doing so, terminate the existing profit share arrangement. In total, a profit share provision of GBP5.5 million was fully provided at 28 February 2017 and this was settled on refinancing in April 2017.

Gains on disposals of investment property of GBP5.9 million were recorded following the sale of six properties, most notably 201 Deansgate, Manchester and Exchange House, Watford.

 
 Balance sheet                                28 February 2017                 31 August 2016 
                                       ------------------------------  ------------------------------ 
                                                      Joint     Group                 Joint     Group 
                                           IFRS    Ventures     Total      IFRS    Ventures     Total 
                                           GBPm        GBPm      GBPm      GBPm        GBPm      GBPm 
-------------------------------------  --------  ----------  --------  --------  ----------  -------- 
 Property portfolio                     1,367.7        99.8   1,467.5   1,396.4       140.9   1,537.3 
 Net debt                               (673.8)      (51.2)   (725.0)   (733.6)      (74.5)   (808.1) 
 Other assets, liabilities and 
  NCI                                      26.5      (48.6)    (22.1)      37.0      (66.4)    (29.4) 
-------------------------------------  --------  ----------  --------  --------  ----------  -------- 
 IFRS NAV                                 720.4           -     720.4     699.8           -     699.8 
-------------------------------------  --------  ----------  --------  --------  ----------  -------- 
 Fair value of derivatives                                        7.5                            12.4 
 Deferred tax                                                     5.7                             5.2 
-------------------------------------  --------  ----------  --------  --------  ----------  -------- 
 EPRA NAV                                                       733.6                           717.4 
-------------------------------------  --------  ----------  --------  --------  ----------  -------- 
 Diluted number of shares (millions)                          1,814.2                         1,795.4 
 EPRA NAV per share (pence)                                      40.4                            40.0 
-------------------------------------  --------  ----------  --------  --------  ----------  -------- 
 

EPRA NAV per share increased one per cent, or 0.4 pence, to 40.4 pence. This was the result of realised and unrealised gains on the property portfolio and the net impact of earnings for the period, less dividends paid.

Property portfolio

Overall the portfolio increased in value on a like-for-like basis by 0.6 per cent.

UK IPD All Property Index reported a 1.4 per cent increase in capital values since August 2016 with the retail sector recording a more modest 0.3 per cent increase. Capital values have remained relatively flat in the Group's UK Retail portfolio, the result of a good performance in retail parks offsetting the weaker valuation performance of the UK shopping centres.

Asset management initiatives across the UK Commercial portfolio have resulted in some strong valuation gains at an asset level, particularly from the AUK portfolio.

UK Hotel valuations remained broadly unchanged, down 1.0 per cent when adjusted for capital expenditure. Increased business rates, particularly with respect to the London based hotels offset an otherwise positive trading performance year-to-date.

In Europe, modest gains on the Group's shopping centre assets in Berlin and Hamburg drove valuations up 0.2 per cent in local currency terms, 0.8 per cent in Sterling terms on a like-for-like basis.

 
                                                                                                                 Local 
                                                                                     Valuation (1)            currency 
                                           28 February 2017   31 August 2016   Gain/(loss)   Gain/(loss)   Gain/(loss) 
 Market value of the property portfolio                GBPm             GBPm          GBPm             %             % 
----------------------------------------  -----------------  ---------------  ------------  ------------  ------------ 
 UK Retail                                            537.0            537.1         (1.8)         (0.3)         (0.3) 
 UK Commercial                                        386.1            374.0          10.2           2.7           2.7 
 UK Hotels                                            229.3            229.2         (2.2)         (1.0)         (1.0) 
----------------------------------------  -----------------  ---------------  ------------  ------------  ------------ 
 UK Total                                           1,152.4          1,140.3           6.2           0.5           0.5 
 Europe                                               288.0            285.7           2.3           0.8           0.2 
----------------------------------------  -----------------  ---------------  ------------  ------------  ------------ 
 Like-for-like property portfolio                   1,440.4          1,426.0           8.5           0.6 
 Disposals                                                -             84.5 
 Development                                           19.0             18.5 
----------------------------------------  -----------------  ---------------  ------------  ------------  ------------ 
 Total property portfolio                           1,459.4          1,529.0 
----------------------------------------  -----------------  ---------------  ------------  ------------  ------------ 
 

(1) Valuation includes the effect of capital expenditure, amortisation of head leases, tenant lease incentives and foreign currency translation where applicable.

Debt and gearing

During the first half of 2017, GBP50.7 million was refinanced, repaid or prepaid. This included the repayment of the GBP5.4 million AIB facility secured on Newington House and the refinancing of the asset under the AUK facility. The transfer of UK assets into this facility on refinancing has allowed the Group to benefit from a ratcheted margin structure, and with it reduce the overall cost of debt.

The EUR11.6 million facility on Ingolstadt was repaid in full and a GBP5.2 million prepayment was made against the facility secured over West Orchards, Coventry in November 2016.

These interventions continue to improve the Group's cost of debt and importantly have reduced LTV to 49.9 per cent from 53.4 per cent at 31 August 2016.

Re-investment of sale proceeds from mature assets will continue to focus on opportunities to lower the Group's LTV.

Key debt and gearing metrics are presented in the table below.

 
                                                              28 February 
                                                                     2017  31 August 2016 
                                                                     GBPm            GBPm 
---------------------------------------  --------------------------------  -------------- 
Nominal value of drawn debt                                         792.3           850.6 
Cash and short-term deposits                                       (63.7)          (34.3) 
---------------------------------------  --------------------------------  -------------- 
Net debt                                                            728.6           816.3 
Market value of the property portfolio                            1,459.4         1,529.0 
---------------------------------------  --------------------------------  -------------- 
LTV (%)                                                              49.9            53.4 
Weighted average debt maturity (years)                                6.8             6.9 
Weighted average interest rate (%)                                    3.3             3.4 
Interest cover (times) (1)                                            3.1             2.7 
Debt with interest rate protection (%)                               97.0            95.4 
---------------------------------------  --------------------------------  -------------- 
 

(1) Net rental income divided by net finance costs

The Group's weighted average debt maturity has been maintained at just under 7 years, with over 85 per cent maturing in 2020 or later. Interest cover has improved from 2.7 to 3.1 times.

The proportion of debt with interest rate protection, which includes the use of interest rate caps and swaps, has increased from 95.4 per cent to 97.0 per cent at the half year. This is in line with the Group policy that at least 75 per cent of debt carries interest rate certainty. The net fair value liability of these hedging instruments on a proportionate basis at 28 February 2017 was GBP11.1 million.

 
 Cash flow                                    Six months ended               Six months ended 
                                               28 February 2017               29 February 2016 
                                        ----------------------------  ------------------------------ 
                                                      Joint    Group                 Joint     Group 
                                           IFRS    Ventures    Total      IFRS    Ventures     Total 
                                           GBPm        GBPm     GBPm      GBPm        GBPm      GBPm 
--------------------------------------  -------  ----------  -------  --------  ----------  -------- 
 Operating cash flows                      29.0         1.5     30.5      17.9         2.0      19.9 
 
 Purchase and development of property     (7.8)           -    (7.8)   (272.1)       (0.2)   (272.3) 
 Disposals                                 66.8       (0.6)     66.2     107.5           -     107.5 
 Other                                      0.6       (0.6)        -       6.1       (0.9)       5.2 
======================================  -------  ----------  -------  --------  ----------  -------- 
 Investing cash flows                      59.6       (1.2)     58.4   (158.5)       (1.1)   (159.6) 
 
 Issue of shares                              -           -        -     110.2           -     110.2 
 Net debt (repaid)/drawn                 (35.4)       (0.6)   (36.0)     110.6       (1.2)     109.4 
 Dividends paid                          (21.6)           -   (21.6)    (13.2)           -    (13.2) 
 Other                                    (2.0)           -    (2.0)     (7.2)           -     (7.2) 
--------------------------------------  -------  ----------  -------  --------  ----------  -------- 
 Financing cash flows                    (59.0)       (0.6)   (59.6)     200.4       (1.2)     199.2 
 
 Net cash flow                             29.6       (0.3)     29.3      59.8       (0.3)      59.5 
--------------------------------------  -------  ----------  -------  --------  ----------  -------- 
 

Operating cash flows increased by GBP10.6 million to GBP30.5 million during the six months ended 28 February 2017 relative to the comparative interim period, primarily as a result of the increased net rental income from the AUK acquisition and a reduction in net working capital.

Investing cash inflows were generated from disposal proceeds, the most significant being the disposal of the Group's joint venture interest in the VBG portfolio in Germany and an office building in Deansgate, Manchester. Cash outflows of GBP7.8 million were applied primarily towards developments at Ingolstadt in Germany and a twelve bedroom extension to our Southwark Hotel on London's Southbank.

Financing activities comprised the net repayment and prepayment of debt and dividends paid, including withholding tax arising in respect of the second interim dividend for the year ended 31 August 2016. Scrip take-up of 27.3 per cent resulted in a cash saving of GBP6.6 million.

Cash balances, including the proportionate share of cash in joint ventures, were GBP63.7 million at 28 February 2017, with an additional GBP36.6 million available from committed undrawn facilities.

Principal risks and uncertainties

The Directors have concluded that there have been no significant changes to the principal risks and uncertainties faced by the Group, nor is there anticipated to be any significant changes during the remaining six months to 31 August 2017. Full disclosure of risks and uncertainties faced by the Company are set out within the 2016 Annual Report.

Dividends

The Directors have declared an interim dividend for the period of 1.3 pence per share representing a 96 per cent pay-out ratio on underlying earnings. This reflects an annualised yield of 6.4 per cent when based on 28 February 2017 EPRA NAV and 7.0 per cent when compared to the Group's share price at the same date.

The Directors intend to offer shareholders the option of receiving a cash dividend or a scrip dividend by way of an issue of new Redefine International shares. An announcement containing details of the tax components of the dividend, the timetable and the scrip dividend will be released separately on Friday 28 April 2017. The dividend payment date has been set for Monday 26 June 2017 to all shareholders on the register at Friday 9 June 2017.

Donald Grant

Chief Financial Officer

26 April 2017

Statement of Directors' responsibilities

The Directors are responsible for preparing the condensed consolidated interim financial statements, in accordance with applicable laws and regulations.

We confirm to the best of our knowledge:

-- the condensed consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting';

-- the condensed consolidated interim financial statements include a true and fair view of the information required by Sections DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

The operating and financial review refers to important events which have taken place during the period.

Related party transactions are set out in Note 29 to the condensed consolidated interim financial statements.

By order of the Board

Mike Watters Donald Grant

Chief Executive Officer Chief Financial Officer

26 April 2017

Independent review report to Redefine International P.L.C.

Introduction

We have been engaged by Redefine International P.L.C. ("the Company") to review the condensed set of consolidated financial statements in the half-yearly financial report for the six months ended 28 February 2017 which comprise the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and the related explanatory notes. The financial reporting framework that has been applied in their preparation is International Financial Reporting Standards as issued by the IASB ("IFRSs"). Our review was conducted in accordance with the International Standard on Review Engagements ("ISRE") 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of consolidated financial statements in the half-yearly report for the six months ended 28 February 2017 is not prepared, in all material respects, in accordance with IAS 34 'Interim Financial Reporting' and the Disclosure and Transparency Rules of the UK's Financial Conduct Authority.

Basis of our report, responsibilities and restriction on use

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 UK's Financial Conduct Authority. As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with IFRSs as issued by the IASB. The Directors are responsible for ensuring that the condensed set of consolidated financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 'Interim Financial Reporting'. Our responsibility is to express to the Company a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.

We conducted our review in accordance with the International Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'. A review of interim financial information consists of making enquiries, 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 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.

We read the other information contained in the half-yearly financial report to identify material inconsistencies with the information in the condensed set of consolidated financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the review. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the Disclosure and Transparency Rules of the UK's Financial Conduct Authority. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this 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 reached.

N. Marshall 26 April 2017

For and on behalf of

KPMG

Chartered Accountants, Statutory Audit Firm,

1 Harbourmaster Place

International Financial Services Centre

Dublin 1

Ireland

Condensed Consolidated Income Statement

for the six months ended 28 February 2017

 
                                                                 Re-presented 
                                                       Reviewed      Reviewed 
                                                     Six months    Six months      Audited 
                                                          ended         ended   Year ended 
                                                    28 February   29 February    31 August 
                                                           2017          2016         2016 
Continuing operations                        Note          GBPm          GBPm         GBPm 
-------------------------------------------  ----  ------------  ------------  ----------- 
Revenue                                         3          50.6          41.5         89.6 
-------------------------------------------  ----  ------------  ------------  ----------- 
Rental income                                   4          45.8          40.2         86.6 
Rental expense                                            (4.3)         (2.5)        (6.2) 
-------------------------------------------  ----  ------------  ------------  ----------- 
Net rental income                                          41.5          37.7         80.4 
Other income                                    5           4.8           1.3          2.5 
Administrative costs and other fees             6         (8.4)         (5.2)       (10.9) 
-------------------------------------------  ----  ------------  ------------  ----------- 
Net operating income                                       37.9          33.8         72.0 
Gain/(loss) on revaluation of investment 
 property                                                   2.6        (17.3)       (42.5) 
Gain on disposal of investment property                     5.9           3.4          3.2 
Gain on disposal of subsidiary                  7             -             -         12.2 
Distributions from investment at fair 
 value                                                        -             -          0.5 
Gain/(loss) on revaluation of investment 
 at fair value                                              1.0           1.0        (0.8) 
Amortisation of intangible assets                         (0.1)         (0.1)        (0.2) 
Gain on disposal of non-current assets 
 held for sale                                                -           0.2          0.2 
Foreign exchange gain                                         -           2.7          0.9 
-------------------------------------------  ----  ------------  ------------  ----------- 
Profit from operations                                     47.3          23.7         45.5 
Net finance expense                             8        (11.6)        (12.2)       (26.4) 
Other finance expenses                          9         (1.5)         (0.8)        (1.9) 
Change in fair value of derivative 
 financial instruments                                      4.4         (2.5)       (11.1) 
-------------------------------------------  ----  ------------  ------------  ----------- 
                                                           38.6           8.2          6.1 
Net gain on sale of joint venture 
 interests (1)                                 10           5.0             -            - 
Net impairment reversal/(impairment) 
 of joint ventures and associate interests                  0.7         (0.7)        (0.6) 
Share of post-tax (loss)/profit from 
 joint ventures                                           (2.6)         (0.3)          1.4 
Share of post-tax profit from associate                     0.3           1.2          1.7 
-------------------------------------------  ----  ------------  ------------  ----------- 
Profit before tax                                          42.0           8.4          8.6 
Taxation                                       11         (1.0)         (0.1)        (1.1) 
Profit for the period                                      41.0           8.3          7.5 
-------------------------------------------  ----  ------------  ------------  ----------- 
Profit attributable to: 
Equity holders of the Parent                               40.8           6.8          7.9 
Non-controlling interests                                   0.2           1.5        (0.4) 
                                                           41.0           8.3          7.5 
-------------------------------------------  ----  ------------  ------------  ----------- 
Earnings per share 
Basic earnings per share (pence)               30          2.3p          0.5p         0.5p 
Diluted earnings per share (pence)             30          2.3p          0.5p         0.5p 
-------------------------------------------  ----  ------------  ------------  ----------- 
 

(1) Net gain on sale of joint venture interests relates to the disposal of the property-owning subsidiaries of one of the Group's joint ventures, Wichford VBG Holding S.à.r.l. While the holding structure has been retained, the business of the joint venture has been disposed and Wichford VBG Holding S.à.r.l. holds only residual cash to settle working capital and deferred consideration receivable.

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed Consolidated Statement of Comprehensive Income

for the six months ended 28 February 2017

 
                                                                 Re-presented 
                                                       Reviewed      Reviewed 
                                                     Six months    Six months      Audited 
                                                          ended         ended   Year ended 
                                                    28 February   29 February    31 August 
                                                           2017          2016         2016 
Continuing operations                        Note          GBPm          GBPm         GBPm 
-------------------------------------------  ----  ------------  ------------  ----------- 
Profit for the period                                      41.0           8.3          7.5 
Other comprehensive income/(expense) 
Items that are or may be subsequently reclassified to the income statement: 
Transfer of foreign currency translation 
 to the income statement on disposal 
 of subsidiaries                                7             -             -        (3.6) 
Transfer of foreign currency translation 
 to the income statement on disposal 
 of joint venture interests                    10         (2.2)             -            - 
Foreign currency translation on subsidiary 
 foreign operations                                         2.1           2.4          8.9 
Foreign currency translation on joint 
 ventures held by subsidiary foreign 
 operations                                                 0.4           0.9          8.6 
Total other comprehensive income                            0.3           3.3         13.9 
Total comprehensive income for the 
 period                                                    41.3          11.6         21.4 
-------------------------------------------  ----  ------------  ------------  ----------- 
Total comprehensive income attributable 
 to: 
Equity holders of the Parent                               41.1          10.1         21.1 
Non-controlling interests                                   0.2           1.5          0.3 
                                                           41.3          11.6         21.4 
-------------------------------------------  ----  ------------  ------------  ----------- 
 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed Consolidated BALANCE SHEET

as at 28 February 2017

 
                                               Note       Reviewed  Re-presented 
                                                       28 February       Audited 
                                                              2017     31 August 
                                                              GBPm          2016 
                                                                            GBPm 
--------------------------------------------  -----  -------------  ------------ 
Non-current assets 
Investment property                              12        1,328.0       1,396.4 
Investment at fair value through profit or 
 loss                                            13            9.8           7.9 
Investment in joint ventures                     14            3.0           5.8 
Loans to joint ventures                          14           40.5          52.9 
Investment in associate                          15           10.0          10.2 
Intangible assets                                              1.2           1.3 
Property, plant and equipment                                  0.1           0.1 
Derivative financial instruments                 20            0.9           0.8 
Trade and other receivables                      16            7.1           4.7 
--------------------------------------------  -----  -------------  ------------ 
Total non-current assets                                   1,400.6       1,480.1 
--------------------------------------------  -----  -------------  ------------ 
Current assets 
Trade and other receivables                      16            6.7          26.7 
Cash and cash equivalents                        17           61.7          32.0 
--------------------------------------------  -----  -------------  ------------ 
                                                              68.4          58.7 
Non-current assets held for sale                 18           41.0             - 
Total current assets                                         109.4          58.7 
--------------------------------------------  -----  -------------  ------------ 
Total assets                                               1,510.0       1,538.8 
--------------------------------------------  -----  -------------  ------------ 
Non-current liabilities 
Borrowings, including finance leases             19        (713.9)       (752.8) 
Derivative financial instruments                 20          (8.2)        (12.6) 
Deferred tax                                     21          (3.8)         (3.4) 
--------------------------------------------  -----  -------------  ------------ 
Total non-current liabilities                              (725.9)       (768.8) 
--------------------------------------------  -----  -------------  ------------ 
Current liabilities 
Borrowings, including finance leases             19         (21.6)        (12.8) 
Trade and other payables                         22         (20.2)        (21.4) 
Tax liabilities                                              (1.7)         (2.4) 
--------------------------------------------  -----  -------------  ------------ 
Total current liabilities                                   (43.5)        (36.6) 
--------------------------------------------  -----  -------------  ------------ 
Total liabilities                                          (769.4)       (805.4) 
--------------------------------------------  -----  -------------  ------------ 
Net assets                                                   740.6         733.4 
--------------------------------------------  -----  -------------  ------------ 
 
Equity 
Share capital                                    23          144.9         143.6 
Share premium                                    23          507.4         502.1 
Other components of equity                                    68.1          54.1 
--------------------------------------------  ----- 
Total attributable to equity holders of the 
 Parent                                                      720.4         699.8 
Non-controlling interests                        25           20.2          33.6 
--------------------------------------------  -----  -------------  ------------ 
Total equity                                                 740.6         733.4 
--------------------------------------------  -----  -------------  ------------ 
 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

The condensed consolidated interim financial statements were approved by the Board of Directors on 26 April 2017 and were signed on its behalf by:

Mike Watters Donald Grant

Chief Executive Officer Chief Financial Officer

Condensed Consolidated Statement of Changes In Equity

for the six months ended 28 February 2017

 
                                                                                                Total 
                                                                                         attributable 
                                                                                Foreign     to equity 
                                               Reverse                         currency       holders 
                           Share    Share  acquisition  Retained     Other  translation            of  Non-controlling   Total 
                         capital  premium      reserve      loss  reserves      reserve    the Parent        interests  equity 
                   Note     GBPm     GBPm         GBPm      GBPm      GBPm         GBPm          GBPm             GBPm    GBPm 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
Balance at 1 
 September 2016            143.6    502.1        134.3    (94.2)       3.2         10.8         699.8             33.6   733.4 
 
Profit for the 
 period                        -        -            -      40.8         -            -          40.8              0.2    41.0 
Transfer of 
 foreign 
 currency 
 translation 
 to the income 
 statement on 
 disposal 
 of joint 
 venture 
 interests           10        -        -            -         -         -        (2.2)         (2.2)                -   (2.2) 
Foreign currency 
 translation on 
 subsidiary 
 foreign 
 operations                    -        -            -         -         -          2.1           2.1                -     2.1 
Foreign currency 
 translation on 
 joint venture 
 interests held 
 by 
 subsidiary 
 foreign 
 operations          14        -        -            -         -         -          0.4           0.4                -     0.4 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
Total 
 comprehensive 
 income for 
 the period                    -        -            -      40.8         -          0.3          41.1              0.2    41.3 
 
Transactions 
with equity 
holders 
of the Parent 
Dividends paid                 -        -            -    (21.6)         -            -        (21.6)                -  (21.6) 
Scrip dividends      23      1.3      5.3            -     (6.6)         -            -             -                -       - 
Fair value of 
 share-based 
 payments                      -        -            -         -       0.5            -           0.5                -     0.5 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
                             1.3      5.3            -    (28.2)       0.5            -        (21.1)                -  (21.1) 
 
Changes in 
ownership 
interest 
in subsidiaries 
Decrease in 
 non-controlling 
 interest            25        -        -            -         -         -            -             -            (0.3)   (0.3) 
Dividends paid 
 to 
 non-controlling 
 interests           25        -        -            -         -         -            -             -            (0.6)   (0.6) 
Acquisition of 
 non-controlling 
 interests           26        -        -            -       0.6         -            -           0.6           (12.7)  (12.1) 
                               -        -            -       0.6         -            -           0.6           (13.6)  (13.0) 
 
Balance at 28 
 February 2017             144.9    507.4        134.3    (81.0)       3.7         11.1         720.4             20.2   740.6 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed Consolidated Statement of Changes In Equity

for the six months ended 29 February 2016

 
                                                                                                Total 
                                                                                         attributable 
                                                                                Foreign     to equity 
                                               Reverse                         currency       holders 
                           Share    Share  acquisition  Retained     Other  translation            of  Non-controlling   Total 
                         capital  premium      reserve      loss  reserves      reserve    the Parent        interests  equity 
                   Note     GBPm     GBPm         GBPm      GBPm      GBPm         GBPm          GBPm             GBPm    GBPm 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
Balance at 1 
 September 2015            117.9    395.0        134.3    (48.8)       2.0        (2.4)         598.0             38.8   636.8 
 
Profit for the 
 period                        -        -            -       6.8         -            -           6.8              1.5     8.3 
Foreign currency 
 translation on 
 subsidiary 
 foreign 
 operations                    -        -            -         -         -          2.4           2.4                -     2.4 
Foreign currency 
 translation on 
 joint venture 
 interests held 
 by 
 subsidiary 
 foreign 
 operations                    -        -            -         -         -          0.9           0.9                -     0.9 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
Total 
 comprehensive 
 income for 
 the period                    -        -            -       6.8         -          3.3          10.1              1.5    11.6 
 
Transactions 
with equity 
holders 
of the Parent 
Shares issued 
 for cash            23     21.7     87.4            -         -         -            -         109.1                -   109.1 
Dividends paid                 -        -            -    (13.2)         -            -        (13.2)                -  (13.2) 
Scrip dividends      23      1.7      9.5            -    (11.2)         -            -             -                -       - 
Fair value of 
 share-based 
 payments                      -        -            -         -       0.5            -           0.5                -     0.5 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
                            23.4     96.9            -    (24.4)       0.5            -          96.4                -    96.4 
 
Changes in 
ownership 
interest in 
subsidiaries 
Decrease in 
 non-controlling 
 interests                     -        -            -         -         -            -             -            (0.2)   (0.2) 
Dividends paid 
 to 
 non-controlling 
 interests                     -        -            -         -         -            -             -            (0.5)   (0.5) 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
                               -        -            -         -         -            -             -            (0.7)   (0.7) 
 
Balance at 29 
 February 2016             141.3    491.9        134.3    (66.4)       2.5          0.9         704.5             39.6   744.1 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed Consolidated Statement of Changes In Equity

for the year ended 31 August 2016

 
                   Note                                                                         Total 
                                                                                         attributable 
                                                                                Foreign     to equity 
                                               Reverse                         currency       holders 
                           Share    Share  acquisition  Retained     Other  translation            of  Non-controlling   Total 
                         capital  premium      reserve      loss  reserves      reserve    the Parent        interests  equity 
                            GBPm     GBPm         GBPm      GBPm      GBPm         GBPm          GBPm             GBPm    GBPm 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
Balance at 1 
 September 2015            117.9    395.0        134.3    (48.8)       2.0        (2.4)         598.0             38.8   636.8 
 
Profit for the 
 year                          -        -            -       7.9         -            -           7.9            (0.4)     7.5 
Transfer of 
 foreign 
 currency 
 translation 
 to the income 
 statement on 
 disposal 
 of subsidiary        7        -        -            -         -         -        (3.6)         (3.6)                -   (3.6) 
Foreign currency 
 translation on 
 subsidiary 
 foreign 
 operations                    -        -            -         -         -          8.2           8.2              0.7     8.9 
Foreign currency 
 translation on 
 joint venture 
 interests held 
 by 
 subsidiary 
 foreign 
 operations          14        -        -            -         -         -          8.6           8.6                -     8.6 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
Total 
 comprehensive 
 income for 
 the year                      -        -            -       7.9         -         13.2          21.1              0.3    21.4 
 
Transactions 
with equity 
holders 
of the Parent 
Shares issued 
 for cash            23     21.7     87.4            -         -         -            -         109.1                -   109.1 
Dividends paid                 -        -            -    (29.4)         -            -        (29.4)                -  (29.4) 
Scrip dividends      23      4.0     19.7            -    (23.7)         -            -             -                -       - 
Fair value of 
 share-based 
 payments                      -        -            -         -       1.2            -           1.2                -     1.2 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
                            25.7    107.1            -    (53.1)       1.2            -          80.9                -    80.9 
 
Changes in 
ownership 
interest 
in subsidiaries 
Decrease in 
 non-controlling 
 interests           25        -        -            -         -         -            -             -            (1.2)   (1.2) 
Dividends paid 
 to 
 non-controlling 
 interests           25        -        -            -         -         -            -             -            (2.2)   (2.2) 
Acquisition of 
 non-controlling 
 interests           26        -        -            -     (0.2)         -            -         (0.2)            (2.1)   (2.3) 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
                               -        -            -     (0.2)         -            -         (0.2)            (5.5)   (5.7) 
 
Balance at 31 
 August 2016               143.6    502.1        134.3    (94.2)       3.2         10.8         699.8             33.6   733.4 
----------------  -----  -------  -------  -----------  --------  --------  -----------  ------------  ---------------  ------ 
 

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

Condensed Consolidated Statement of CASH FLOWs

for the six months ended 28 February 2017

 
                                                                   Re-presented       Audited 
                                                        Reviewed       Reviewed    Year ended 
                                                      Six months     Six months     31 August 
                                                           ended          ended          2016 
                                                     28 February    29 February          GBPm 
                                                            2017           2016 
Continuing operations                         Note          GBPm           GBPm 
--------------------------------------------  ----  ------------  -------------  ------------ 
Cash generated from operations                  27          40.7           31.5          69.2 
Interest received                                            3.5            2.5           3.3 
Interest paid                                             (13.9)         (13.0)        (27.8) 
Net tax paid                                               (1.3)          (3.1)         (5.1) 
Net cash inflow from operating activities                   29.0           17.9          39.6 
--------------------------------------------  ----  ------------  -------------  ------------ 
Cash flows from investing activities 
Net cash disposed on sale of subsidiary                        -              -         (0.4) 
Purchase and development of investment 
 property                                                  (7.8)        (272.1)       (489.9) 
Net proceeds on sale of investment 
 property                                                   48.7           34.2          38.8 
Distributions from investments at fair 
 value                                                       0.5              -             - 
Disposal of investment at fair value                           -           80.2          80.2 
Acquisition of investment at fair value                        -          (6.9)         (8.4) 
Net proceeds received on sale of joint 
 venture interests (1)                                      18.1              -             - 
Increase in loans to joint ventures                            -          (0.5)         (0.5) 
Decrease in loans to joint ventures                          0.6            1.4           2.6 
Distributions from associate                                 1.1            1.4           2.0 
Disposal of non-current assets held 
 for sale                                                      -            0.2           0.2 
Increase in loan to external party                         (1.6)              -             - 
Increase in loans to related parties                           -          (2.0)         (2.0) 
Decrease in loans to related parties                           -            5.7           7.7 
Purchase of property, plant and equipment                      -          (0.1)             - 
Net cash inflow/(outflow) from investing 
 activities                                                 59.6        (158.5)       (369.7) 
--------------------------------------------  ----  ------------  -------------  ------------ 
Cash flows from financing activities 
Issue of share capital                                         -          115.0         115.0 
Share issue costs paid                                         -          (4.8)         (5.9) 
Proceeds from borrowings                                    16.8          155.0         332.5 
Repayment of borrowings                                   (52.2)         (44.4)       (134.7) 
Payment of Aviva profit share                              (1.1)              -         (0.3) 
Other finance expenses                                     (0.2)          (3.1)         (4.0) 
Derivative financial instruments purchased 
 and settled                                               (0.1)          (2.4)         (2.4) 
Dividends paid to equity holders                          (21.6)         (13.2)        (29.4) 
Dividends paid and loans re-paid to 
 non-controlling interests                                 (0.6)          (0.7)         (2.3) 
Acquisitions from non-controlling interests                    -              -         (2.3) 
Movement in restricted cash and cash 
 equivalents                                                   -          (1.0)           4.6 
Net cash (outflow)/inflow from financing 
 activities                                               (59.0)          200.4         270.8 
--------------------------------------------  ----  ------------  -------------  ------------ 
Net increase/(decrease) in unrestricted 
 cash and cash equivalents                                  29.6           59.8        (59.3) 
Effect of exchange rate fluctuations on 
 cash and cash equivalents                                   0.1            0.7           2.3 
Unrestricted cash and cash equivalents at 
 1 September                                                28.7           85.7          85.7 
--------------------------------------------------  ------------  -------------  ------------ 
Unrestricted cash and cash equivalents 
 at end of the period                                       58.4          146.2          28.7 
Restricted cash and cash equivalents                         3.3            8.9           3.3 
--------------------------------------------  ----  ------------  -------------  ------------ 
Cash and cash equivalents at end of 
 the period                                                 61.7          155.1          32.0 
--------------------------------------------  ----  ------------  -------------  ------------ 
 

(1) Net proceeds of GBP18.1 million received by 28 February 2017 on disposal of joint ventures interests of Wichford VBG Holding S.à.r.l. are comprised of the Group's 49 per cent share of the proceeds received of GBP36.9 million after the deduction of the performance fee of GBP4.0 million (gross cash proceeds: GBP40.9 million) and includes the repayment of loans advanced by the Group to the joint venture of GBP12.3 million. The performance fee received has been separately presented under operating activities.

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

for the six months ended 28 February 2017

   1.         General Information 

Redefine International P.L.C. was incorporated in the Isle of Man on 28 June 2004 (Registered Number: 111198C) and was re-registered under the Isle of Man Companies Act 2006 on 3 December 2013 (Registered Number: 010534V).

On 4 December 2013, the Company converted to a UK-REIT and moved its tax residence from the Isle of Man to the United Kingdom ("UK").

The Company holds a primary listing on the Main Market of the London Stock Exchange ("LSE") and a secondary listing on the Main Board of the Johannesburg Stock Exchange ("JSE").

   2.         Significant Accounting Policies 
   2.1       Statement of Compliance 

These condensed consolidated interim financial statements ("interim financial statements") for the six months ended 28 February 2017, have been prepared in accordance with IAS 34 'Interim Financial Reporting' ("IAS 34") as issued by the International Accounting Standards Board ("IASB").

Selected explanatory notes are included to explain events and transactions that are significant to understanding the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 31 August 2016.

The financial information contained in these interim financial statements does not constitute a complete set of financial statements and does not include all of the information required for full annual financial statements (including all comparative figures and all required notes) prepared in accordance with International Financial Reporting Standards ("IFRS"). The interim financial statements should therefore be read in conjunction with the consolidated financial statements as at and for the year ended 31 August 2016 which are available on the Group's website, www.redefineinternational.com.

The relevant new standards, amendments and interpretations that have been adopted during the period are set out in the following table:

 
 International Financial Reporting Standard                            Effective annual periods beginning on or after: 
--------------------------------------------------------------------  ------------------------------------------------ 
 Annual improvements to IFRSs 2012-2014 cycle 
---------------------------------------------------------------------------------------------------------------------- 
 IFRS 5 'Non-Current Assets Held for Sale and Discontinued             1 January 2016 
 Operations' (amendment) ("IFRS 5") 
--------------------------------------------------------------------  ------------------------------------------------ 
 IFRS 7 'Financial Instruments: Disclosures' (amendment) ("IFRS 7")    1 January 2016 
--------------------------------------------------------------------  ------------------------------------------------ 
 IAS 34 'Interim Financial Reporting'                                  1 January 2016 
--------------------------------------------------------------------  ------------------------------------------------ 
 Other amendments 
---------------------------------------------------------------------------------------------------------------------- 
 IAS 1 'Presentation of Financial Statements' (amendment) ("IAS 1")    1 January 2016 
--------------------------------------------------------------------  ------------------------------------------------ 
 IAS 16 'Property, Plant and Equipment' (amendment) ("IAS 16")         1 January 2016 
--------------------------------------------------------------------  ------------------------------------------------ 
 IAS 27 'Consolidated and Separate Financial Statements' ("IAS 27")    1 January 2016 
--------------------------------------------------------------------  ------------------------------------------------ 
 IAS 38 'Intangible Assets' (amendment) ("IAS 38")                     1 January 2016 
--------------------------------------------------------------------  ------------------------------------------------ 
 Investment Entities: Applying the Consolidation Exception 
 [Amendments to IFRS 10 'Consolidated 
 Financial Statement' ("IFRS 10"), IFRS 12 'Disclosure of Interests 
 in Other Entities' (amendment) 
 ("IFRS 12"), IAS 28 'Investments in Associates and Joint Ventures' 
 (amendment) ("IAS 28")]                                               1 January 2016 
--------------------------------------------------------------------  ------------------------------------------------ 
 IFRS 11 'Joint Arrangements' (amendment) ("IFRS 11")                  1 January 2016 
--------------------------------------------------------------------  ------------------------------------------------ 
 

The adoption of these improvements and amendments has not had a material impact on the interim financial statements of the Group and otherwise the accounting policies applied by the Group are the same as those applied in the audited consolidated financial statements as at and for the year ended 31 August 2016, as set out on pages 91-95 of the 2016 Annual Report.

The relevant new standards, amendments and interpretations that have been issued by the IASB but are not yet effective, or have not been adopted early, are disclosed in the table below. The impact of these improvements and amendments on the consolidated financial statements of the Group is being assessed.

 
 International Financial Reporting Standard                          Effective annual periods beginning on or after: 
------------------------------------------------------------------  ------------------------------------------------ 
 Annual improvements to IFRSs 2014-2016 cycle 
------------------------------------------------------------------  ------------------------------------------------ 
 IFRS 12 'Disclosure of Interests in Other Entities' (amendment)     1 January 2017 
------------------------------------------------------------------  ------------------------------------------------ 
 IAS 28 'Investments in Associates and Joint Ventures' (amendment)   1 January 2018 
------------------------------------------------------------------  ------------------------------------------------ 
 Other amendments 
------------------------------------------------------------------  ------------------------------------------------ 
 IAS 7 'Statement of Cash Flows' (amendment) ("IAS 7")               1 January 2017 
------------------------------------------------------------------  ------------------------------------------------ 
 IAS 12 'Income Taxes' (amendment) ("IAS 12")                        1 January 2017 
------------------------------------------------------------------  ------------------------------------------------ 
 IFRS 2 'Share Based Payment' (amendment) ("IFRS 2")                 1 January 2018 
------------------------------------------------------------------  ------------------------------------------------ 
 IFRS 9 'Financial Instruments' (amendment) ("IFRS 9")               1 January 2018 
------------------------------------------------------------------  ------------------------------------------------ 
 IFRS 15 'Revenue from Contracts with Customers' ("IFRS 15")         1 January 2018 
------------------------------------------------------------------  ------------------------------------------------ 
 IAS 40 'Investment Property' (amendment) ("IAS 40")                 1 January 2018 
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 IFRS 16 'Leases' ("IFRS 16")                                        1 January 2019 
------------------------------------------------------------------  ------------------------------------------------ 
 
   2.2       Basis of Preparation 

The interim financial statements are presented in Great British Pounds, which is the functional currency of the Company and the presentational currency of the Group, rounded to the nearest hundred thousand pounds. They are prepared using the historical cost basis except for investment property, certain assets held for sale, derivative financial instruments and financial instruments designated at fair value through profit and loss, all of which are carried at fair value.

Going Concern

The Directors are satisfied that the Group has adequate resources to continue in operational existence for the foreseeable future and for this reason the interim financial statements have been prepared on a going concern basis.

Re-presentation of Prior Period Comparatives

Consistent with the presentation in the financial statements for the year ended 31 August 2016, the Group has re-presented its interests in joint venture entities for the comparative interim period, 29 February 2016. Payments of equity which are permanent and loss absorbing in nature are disclosed as 'Investments in joint ventures', while advances of loans with either contractual maturities or amounts that are callable on demand, are disclosed as 'Loans to joint ventures'. Interest payments made by joint ventures under loan agreements are presented as finance income whereas distributions received from investments reduce the carrying value of the Group's investment in joint ventures.

The impact of this change on the key financial statement line items for the period ended 29 February 2016 was as follows:

 
Consolidated income statement                                       GBPm 
-------------------------------------------------  -------------  ------ 
Net finance expense                                   reduced by     1.2 
Share of post-tax profit from joint ventures          reduced by   (1.2) 
-------------------------------------------------  -------------  ------ 
Consolidated statement of cash flows                                GBPm 
-------------------------------------------------  -------------  ------ 
Interest received                                   increased by     1.1 
Distributions from joint ventures and associates      reduced by   (1.1) 
-------------------------------------------------  -------------  ------ 
Consolidated balance sheet (1)                                      GBPm 
-------------------------------------------------  -------------  ------ 
Investments in joint ventures                         reduced by  (11.0) 
Loans to joint ventures                             increased by    11.0 
-------------------------------------------------  -------------  ------ 
 

(1) The consolidated balance sheet as at 29 February 2016 is not presented in these condensed consolidated financial statements. The re-presentations required are disclosed for information purposes only.

As there has been no change in either net asset value or profit for the period, there has been no impact on net asset value per share or earnings per share. There has also been no impact on net cash flows.

Certain other presentational changes were made to the comparative balance sheet to ensure consistency with the current period. This has resulted in a reclassification of tenant lease incentives of GBP3.8 million and other receivables of GBP0.9 million as non-current assets in line with the requirements of IAS 1, Paragraph 60, as at 31 August 2016 these amounts would not have been settled or recovered within twelve months of the balance sheet date. In addition, current tax liabilities of GBP2.4 million as at 31 August 2016 have been presented separately on the consolidated balance sheet in accordance with IAS 1, Paragraph 54 (n). Current tax liabilities were previously included in trade and other payables.

   2.3       Key Judgements and Estimates 

The preparation of the interim financial statements in conformity with IFRS requires the use of judgements and estimates that affect the reported amounts of assets and liabilities at the reporting date and the reported amounts of revenues and expenses during the period. Although these estimates are based on the Directors' best knowledge of the amount, event or actions, actual results may differ materially from those estimates.

The principal areas where such judgements and estimates have been made are detailed below:

   2.3.1        Investment Property Valuation 

The Group uses valuations performed by independent valuers in accordance with IFRS 13 'Fair Value Measurement' ("IFRS 13") as the fair value of its investment property. The valuations are based upon assumptions including estimated rental values, future rental income, anticipated maintenance costs, future development costs and appropriate market yields. The valuers also make reference to market evidence of transaction prices for similar properties. Further details are provided in Note 12.

   2.3.2        Property Acquisitions 

Where properties are acquired through the acquisition of corporate interests, the Directors have regard to the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business. Where such acquisitions are not considered to be an acquisition of a business, the transactions are accounted for as if the Group had acquired the underlying property directly. Accordingly, no goodwill arises on initial recognition of the asset purchase. Corporate acquisitions are otherwise accounted for as business combinations.

   2.3.3        Classification of Investment Property for UK Hotels 

The UK Hotels are held for capital appreciation and to earn rental income. Apart from one of the properties, the hotels have been let to Redefine Hotel Management Limited ("RHML") and Redefine Earls Court Management Limited ("RECML"), on lease terms which are subject to annual review. At each review, the revised rent is set with reference to the forecast EBITDA of the hotels. RHML and RECML run the hotels' operating business and are therefore exposed to fluctuations in the underlying trading performance of each hotel under management. They are responsible for the key decision making of the business operations and the day-to-day upkeep of the properties.

The Group cumulatively holds a 30.4% shareholding in RedefineBDL Hotel Group Limited ("RedefineBDL"), which in turn controls RHML and RECML. Having considered the guidance in IFRS 10, the respective rights of each of the shareholders in RedefineBDL and the relative size of the Group's shareholding, the Directors have determined that the Group has the ability to exercise significant influence over RedefineBDL. The Group does not control RedefineBDL and hence does not control RHML or RECML. The investment in RedefineBDL is classified as an associate.

Aside from the payment of rental income to the Group, which is reset annually, and the Group's shareholding in RedefineBDL, the Group is not involved with the operation of the hotel management business. There are also limited transactions between the two entities and, as a result, the hotels are classified as investment property in line with IAS 40.

2.3.4 Classification of the Group's Investment in International Hotel Properties Limited ("IHL") at Fair Value through Profit or Loss

On 14 October 2015, the Company acquired, by way of private placement, 3.8 million shares in the newly listed International Hotel Properties Limited (formerly International Hotel Group Limited) for GBP3.8 million. On the date of listing this investment represented 25.4% of the entity's issued share capital and the investment was recognised as an associate of the Group under the equity method. On 20 October 2015, the Group ceased to recognise IHL as an associate when its shareholding was diluted to 13.2% and the investment was reclassified as a financial instrument at fair value through profit or loss. At 31 August 2016, the Group held a 15.5% interest in IHL. During the six months ended 28 February 2017, the Group's shareholding increased by 1.7% to 17.2%. Refer to Note 13 for further details on changes in the Group's ownership interests in IHL.

The degree of judgement relating to this classification has increased given that the Company currently has representation on IHL's board of directors. In drawing their conclusion, the Directors have considered the criteria for significant influence in paragraphs 5-9 of IAS 28, the relative size of the Group's shareholding and the fact the Group does not have the right to appoint a director. Having considered all the facts and circumstances, the Directors believe that the designation of the Company's investment as a financial asset at fair value through profit or loss continues to be appropriate.

   2.3.5        Aviva Profit Share and Capital Appreciation Rights 

As part of the Aviva debt restructure in 2013, Aviva, the lender with security over the Group's shopping centre asset, Grand Arcade, Wigan had a right under the facility agreement to participate in 50 per cent of the valuation uplifts of the property in excess of the value of the drawn debt ("capital appreciation right"). Once the value of the property exceeded GBP90 million, Aviva had the additional right to realise tranches of the excess valuation at any time, with corresponding reductions to their right to profit share participation.

While the Group has recognised a financial liability in respect of Aviva's right to participate in the profits of the shopping centre in prior periods and as at 28 February 2017, a provision has not been recognised to date in respect of Aviva's capital appreciation right. A reliable estimate of the provision could not be made and it has not been considered probable that a payment to Aviva would be required. In prior periods, the contractual obligation has been disclosed as a contingent liability. At 28 February 2017, the possibility of payment was considered remote based on the revised terms under negotiation in the debt restructure that completed post period end. Disclosure of the contingent liability was therefore not required.

Both Aviva's existing capital appreciation and profit participation rights have been formally extinguished on completion of the debt restructure after the reporting date.

   3.         Segmental Reporting 

As required by IFRS 8 'Operating Segments' ("IFRS 8"), the information provided to the Board, which is the Chief Operating Decision Maker, has been classified into the following segments:

 
UK Retail:      the Group's portfolio of shopping centres, retail parks and other retail assets; 
UK Commercial:  the Group's portfolio of offices, motor trade outlets, roadside service stations and logistics 
                distribution centres; 
UK Hotels:      the Group's hotel portfolio which comprises eight hotels in Greater London and South East England and 
                one hotel in Edinburgh, Scotland; 
                The Group's 30.4% associate interest in RedefineBDL (5.1% of which is classified as held for sale) 
                which leases and manages all of the Group's hotel properties except for the 
                Enfield Travelodge; and 
                The Group's 17.2% interest in IHL, a hotel and leisure focused property investment company listed on 
                the Euro MTF Market of the Luxembourg Stock Exchange ("LUXSE") and the 
                AltX of the JSE; 
Europe:         the Group's portfolio in Germany. The portfolio is comprised of shopping centres, discount 
                supermarkets and, until 1 January 2017, Government-let offices. In the comparative 
                periods, the Group's interest in the last legacy asset, The Hague, which was disposed on 31 August 
                2016 is also included; and 
Other:          the Group's holding and subsidiary management companies that carry out the head office and centralised 
                asset management activities of the Group. 
 

Management information, as presented to the Chief Operating Decision Maker, is prepared on a proportionately consolidated basis. Segmental reporting is therefore reported in line with management information, with the Group's share of joint ventures presented line-by-line. Joint venture adjustments are disclosed to reconcile segmental performance and position to the condensed consolidated financial statements.

 
                                                                                                         Joint 
                                                    UK           UK       UK                           Venture    IFRS 
Segmental income statement                      Retail   Commercial   Hotels   Europe  Other   Total       Adj   Total 
 for the six months ended 28 February 2017        GBPm         GBPm     GBPm     GBPm   GBPm    GBPm      GBPm    GBPm 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
Continuing operations 
Revenue 
Rental income                                     19.9         12.8      7.4     10.7      -    50.8     (5.0)    45.8 
Other income (1)                                     -            -        -        -    2.8     2.8       2.0     4.8 
Total revenue                                     19.9         12.8      7.4     10.7    2.8    53.6     (3.0)    50.6 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
 
Rental income                                     19.9         12.8      7.4     10.7      -    50.8     (5.0)    45.8 
Rental expense                                   (2.8)        (0.6)    (0.1)    (1.3)      -   (4.8)       0.5   (4.3) 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
Net rental income                                 17.1         12.2      7.3      9.4      -    46.0     (4.5)    41.5 
Other income (1)                                     -            -        -        -    2.8     2.8       2.0     4.8 
(Loss)/gain on revaluation of investment 
 property                                        (1.8)         10.3    (2.2)    (4.3)      -     2.0       0.6     2.6 
Gain on disposal of investment property              -          5.9        -        -      -     5.9         -     5.9 
Gain on revaluation of investment at fair 
 value                                               -            -      1.0        -      -     1.0         -     1.0 
Finance income                                       -            -        -      2.4    0.5     2.9         -     2.9 
Finance expense                                  (8.1)        (3.3)    (1.6)    (4.9)      -  (17.9)       3.4  (14.5) 
Other finance expenses                           (1.3)        (0.1)        -        -  (0.1)   (1.5)         -   (1.5) 
Change in fair value of derivative financial 
 instruments                                       1.6          2.5    (0.1)      1.3      -     5.3     (0.9)     4.4 
Group gain on sale of joint venture 
 interests (2)                                       -            -        -      5.2      -     5.2     (0.2)     5.0 
Joint venture loss on sale of subsidiaries 
 (2)                                                 -            -        -    (0.2)      -   (0.2)       0.2       - 
Reversal of impairment of investment in 
 associate                                           -            -      0.6        -      -     0.6         -     0.6 
Share of post-tax profit from associate              -            -      0.3        -      -     0.3         -     0.3 
Total per reportable segments                      7.5         27.5      5.3      8.9    3.2    52.4       0.6    53.0 
 
Unallocated income and expenses: (3) 
Administrative costs and other fees (1)                                                        (8.8)       0.4   (8.4) 
Amortisation of intangible assets                                                              (0.1)         -   (0.1) 
Profit before tax                                                                               43.5       1.0    44.5 
Taxation                                                                                       (1.6)       0.6   (1.0) 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
                                                                                                41.9       1.6    43.5 
Joint venture adjustments: 
Movement of losses restricted in joint 
 ventures (4)                                                                                  (0.9)       0.9       - 
Reversal of impairment of loans to joint 
 ventures                                                                                          -       0.1     0.1 
Share of post-tax loss from joint ventures                                                         -     (2.6)   (2.6) 
IFRS profit for the period                                                                      41.0         -    41.0 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
 

(1) Other income includes management fee income from joint ventures of GBP4.4 million on an IFRS basis, of which GBP4.0 million relates to the Performance Fee on disposal of joint venture interests (Refer to Note 5). On a proportionate basis, and for segmental reporting purposes, the net Performance Fee of GBP2.0 million fee has been recognised in other income with the related Group share of the joint venture expense of GBP2.0 million reclassified from administrative costs and other fees.

(2) The GBP5.2 million gain recognised by the Group and the loss of GBP0.2 million recognised by the joint venture relate to the share sale of the property-owning subsidiaries of Wichford VBG Holding S.à.r.l. on 1 January 2017. The net gain on sale of GBP5.0 million has been recognised as single line item within the consolidated income statement under 'Net gain on sale of joint venture interests' (Refer to Note 10).

(3) Unallocated income and expenses are items incurred centrally which are neither directly attributable nor can be reasonably allocated to individual segments.

(4) As detailed in Note 14, the Group's interest in 26 Esplanade No 1 Limited joint venture ("the Esplanade") has reduced to GBPNil in the financial statements in line with IAS 28. On a proportionate basis, the Group's share of the net assets of the Esplanade is included line-by-line. Movements in the losses of the Esplanade not recognised during each reporting period on an equity accounted basis are presented to reconcile segmental information to the IFRS statements.

 
                                                                                                       Joint 
                                                   UK           UK       UK                          Venture    IFRS 
Other segmental information                    Retail   Commercial   Hotels   Europe  Other  Total       Adj   Total 
 for the six months ended 28 February 2017       GBPm         GBPm     GBPm     GBPm   GBPm   GBPm      GBPm    GBPm 
-------------------------------------------  --------  -----------  -------  -------  -----  -----  --------  ------ 
Inter-segmental revenue and expense: 
Management fee income                               -            -        -        -    0.5    0.5         -     0.5 
Management fee expense                              -            -        -    (0.5)      -  (0.5)         -   (0.5) 
                                                    -            -        -    (0.5)    0.5      -         -       - 
-------------------------------------------  --------  -----------  -------  -------  -----  -----  --------  ------ 
 

Inter-segmental revenue and expense relate to intercompany investment management fees that eliminate on consolidation.

 
                                                                                                        Joint 
                                                         UK           UK       UK                     Venture     IFRS 
Segmental balance sheet                              Retail   Commercial   Hotels   Europe    Total       Adj    Total 
 as at 28 February 2017                                GBPm         GBPm     GBPm     GBPm     GBPm      GBPm     GBPm 
--------------------------------------------------  -------  -----------  -------  -------  -------  --------  ------- 
Investment property                                   526.4        369.5    228.8    303.1  1,427.8    (99.8)  1,328.0 
Investment at fair value through profit or loss           -            -      9.8        -      9.8         -      9.8 
Investment in associate                                   -            -     10.0        -     10.0         -     10.0 
Trade and other receivables                             5.8          2.8      1.1      3.0     12.7     (1.6)     11.1 
Cash and cash equivalents                               8.9          7.4      5.5      9.3     31.1     (2.0)     29.1 
Non-current assets held for sale                       16.8         17.4      1.3      5.5     41.0         -     41.0 
Borrowings, including finance leases                (333.1)      (171.3)  (111.2)  (173.1)  (788.7)      53.2  (735.5) 
Trade and other payables                              (9.7)        (5.7)    (1.7)    (2.8)   (19.9)       2.0   (17.9) 
Segmental net assets                                  215.1        220.1    143.6    145.0    723.8    (48.2)    675.6 
Unallocated assets and liabilities: 
Other non-current assets                                                                        1.3         -      1.3 
Trade and other receivables                                                                     2.7         -      2.7 
Cash and cash equivalents                                                                      32.6         -     32.6 
Net derivative financial instruments                                                         (11.1)       3.8    (7.3) 
Deferred tax                                                                                  (5.7)       1.9    (3.8) 
Trade and other payables                                                                      (2.3)         -    (2.3) 
Tax liabilities                                                                               (1.7)         -    (1.7) 
                                                                                              739.6    (42.5)    697.1 
Joint venture adjustments: 
Fair value adjustment on acquisition of joint 
 venture interest                                                                               0.9     (0.9)        - 
Joint venture non-controlling interest                                                        (0.6)       0.6        - 
Cumulative losses restricted in joint ventures (1)                                              0.7     (0.7)        - 
Investment in joint ventures                                                                      -       3.0      3.0 
Loans to joint ventures                                                                           -      40.5     40.5 
IFRS net assets                                                                               740.6         -    740.6 
--------------------------------------------------  -------  -----------  -------  -------  -------  --------  ------- 
 

(1) As detailed in Note 14, the Group's interest in the Esplanade has reduced to GBPNil in the financial statements in line with IAS 28. On a proportionate basis, the Group's share of the Esplanade is included line-by-line. The cumulative losses of this joint venture that the Group has not recognised at the reporting date on an equity accounted basis are presented to reconcile segmental information to the IFRS statements.

 
                                                                               Joint 
                                   UK           UK       UK                  Venture    IFRS 
Other segmental information    Retail   Commercial   Hotels  Europe  Total       Adj   Total 
 as at 28 February 2017          GBPm         GBPm     GBPm    GBPm   GBPm      GBPm    GBPm 
----------------------------  -------  -----------  -------  ------  -----  --------  ------ 
Additions to investment property during the period per reportable segment: 
Capitalised expenditure           0.9          0.7      1.2     5.2    8.0         -     8.0 
Capitalised finance costs           -            -      0.2     0.2    0.4         -     0.4 
----------------------------  -------  -----------  -------  ------  -----  --------  ------ 
                                  0.9          0.7      1.4     5.4    8.4         -     8.4 
----------------------------  -------  -----------  -------  ------  -----  --------  ------ 
 
 
                                                                                            Re-presented 
                                                                                                   Joint  Re-presented 
Segmental income statement                UK           UK       UK                               Venture          IFRS 
for the six months ended 29           Retail   Commercial   Hotels   Europe  Other   Total           Adj         Total 
February 2016                           GBPm         GBPm     GBPm     GBPm   GBPm    GBPm          GBPm          GBPm 
----------------------------------  --------  -----------  -------  -------  -----  ------  ------------  ------------ 
Continuing operations 
Revenue 
Rental income                           17.4          9.3      7.5     10.7      -    44.9         (4.7)          40.2 
Other income (1)                           -          0.5        -      0.4    0.9     1.8         (0.5)           1.3 
Total revenue                           17.4          9.8      7.5     11.1    0.9    46.7         (5.2)          41.5 
----------------------------------  --------  -----------  -------  -------  -----  ------  ------------  ------------ 
 
Rental income                           17.4          9.3      7.5     10.7      -    44.9         (4.7)          40.2 
Rental expense                         (1.7)        (0.3)        -    (1.0)      -   (3.0)           0.5         (2.5) 
----------------------------------  --------  -----------  -------  -------  -----  ------  ------------  ------------ 
Net rental income                       15.7          9.0      7.5      9.7      -    41.9         (4.2)          37.7 
Other income (1)                           -          0.5        -      0.4    0.9     1.8         (0.5)           1.3 
(Loss)/gain on revaluation of 
 investment property (2)              (20.8)          4.9    (0.6)    (1.3)      -  (17.8)           0.5        (17.3) 
Gain on disposal of investment 
 property                                  -          3.4        -        -      -     3.4             -           3.4 
Gain on revaluation of investment 
 at fair value                             -            -      1.0        -      -     1.0             -           1.0 
Gain on disposal of non-current 
 assets held for sale                      -          0.2        -        -      -     0.2             -           0.2 
Foreign exchange gain                      -            -        -        -    2.7     2.7             -           2.7 
Finance income                             -            -        -        -    3.2     3.2             -           3.2 
Finance expense                        (8.0)        (3.1)    (1.9)    (5.6)      -  (18.6)           3.2        (15.4) 
Other finance expenses                 (0.7)        (0.1)        -        -      -   (0.8)             -         (0.8) 
Change in fair value of derivative 
 financial instruments                 (1.0)        (1.9)      0.2    (1.2)      -   (3.9)           1.4         (2.5) 
Share of post-tax profit from 
 associate                                 -            -      1.2        -      -     1.2             -           1.2 
Total per reportable segments         (14.8)         12.9      7.4      2.0    6.8    14.3           0.4          14.7 
 
Unallocated income and expenses: 
(3) 
Administrative costs and other 
 fees                                                                                (5.5)           0.3         (5.2) 
Amortisation of intangible assets                                                    (0.1)             -         (0.1) 
Profit before tax                                                                      8.7           0.7           9.4 
Taxation                                                                             (0.3)           0.2         (0.1) 
----------------------------------  --------  -----------  -------  -------  -----  ------  ------------  ------------ 
                                                                                       8.4           0.9           9.3 
Joint venture adjustments: 
Movement of losses restricted in 
 joint ventures (4)                                                                  (0.1)           0.1             - 
Impairment of loans to joint 
 ventures                                                                                -         (0.7)         (0.7) 
Share of post-tax loss from joint 
 ventures                                                                                -         (0.3)         (0.3) 
IFRS profit for the period                                                             8.3             -           8.3 
----------------------------------  --------  -----------  -------  -------  -----  ------  ------------  ------------ 
 

(1) Other income in the 'Other' segment includes management fee income from joint ventures of GBP0.1 million.

(2) Included in (loss)/gain on revaluation of investment property is GBP22.6 million of costs incurred on the acquisition of the AUK portfolio.

(3) Unallocated income and expenses are items incurred centrally which are neither directly attributable nor can be reasonably allocated to individual segments.

(4) As detailed in Note 14, the Group's interest in the Esplanade has reduced to GBPNil in the financial statements in line with IAS 28. On a proportionate basis, the Group's share of the net assets of the Esplanade is included line-by-line. Movements in the losses of the Esplanade not recognised during each reporting period on an equity accounted basis are presented to reconcile segmental information to the IFRS statements.

 
                                                                                                       Joint 
                                                   UK           UK       UK                          Venture    IFRS 
Other segmental information                    Retail   Commercial   Hotels   Europe  Other  Total       Adj   Total 
 for the six months ended 29 February 2016       GBPm         GBPm     GBPm     GBPm   GBPm   GBPm      GBPm    GBPm 
-------------------------------------------  --------  -----------  -------  -------  -----  -----  --------  ------ 
Inter-segmental revenue and expense: 
Management fee income                               -            -        -        -    0.4    0.4         -     0.4 
Management fee expense                              -            -        -    (0.4)      -  (0.4)         -   (0.4) 
                                                    -            -        -    (0.4)    0.4      -         -       - 
-------------------------------------------  --------  -----------  -------  -------  -----  -----  --------  ------ 
 

Inter-segmental revenue and expense relate to intercompany investment management fees that eliminate on consolidation.

 
                                                                                                        Joint 
                                                UK           UK       UK                              Venture     IFRS 
Segmental balance sheet                     Retail   Commercial   Hotels   Europe             Total       Adj    Total 
 as at 29 February 2016                       GBPm         GBPm     GBPm     GBPm              GBPm      GBPm     GBPm 
-----------------------------------------  -------  -----------  -------  -------  ----------------  --------  ------- 
Investment property                          560.1        418.6    235.8    320.7           1,535.2   (129.0)  1,406.2 
Investment at fair value through profit 
 or loss                                         -            -      7.9        -               7.9         -      7.9 
Investment in associate                          -            -      7.8        -               7.8         -      7.8 
Trade and other receivables                    4.2          1.4     11.1      4.0              20.7     (1.0)     19.7 
Cash and cash equivalents                     13.1          6.2      1.5     10.4              31.2     (2.1)     29.1 
Borrowings, including finance leases       (283.8)      (147.9)  (109.9)  (208.7)           (750.3)      71.5  (678.8) 
Trade and other payables                    (59.9)      (165.0)    (1.0)    (5.2)           (231.1)       3.2  (227.9) 
Segmental net assets                         233.7        113.3    153.2    121.2             621.4    (57.4)    564.0 
Unallocated assets and liabilities: 
Other non-current assets                                                                        1.6         -      1.6 
Trade and other receivables                                                                    16.3         -     16.3 
Cash and cash equivalents                                                                     126.0         -    126.0 
Net derivative financial instruments                                                          (7.4)       4.5    (2.9) 
Other non-current liabilities                                                                 (8.4)       5.4    (3.0) 
Trade and other payables                                                                      (8.2)       0.8    (7.4) 
                                                                                              741.3    (46.7)    694.6 
Joint venture adjustments: 
Fair value of retained joint venture 
 interest                                                                                       1.4     (1.4)        - 
Cumulative losses restricted in joint 
 ventures (1)                                                                                   1.4     (1.4)        - 
Re-presented investment in joint ventures                                                         -       4.3      4.3 
Re-presented loans to joint ventures                                                              -      45.2     45.2 
IFRS net assets                                                                               744.1         -    744.1 
-----------------------------------------  -------  -----------  -------  -------  ----------------  --------  ------- 
 

(1) As detailed in Note 14, the Group's interest in the Esplanade has reduced to GBPNil in the financial statements in line with IAS 28. On a proportionate basis, the Group's share of the Esplanade is included line-by-line. The cumulative losses of this joint venture that the Group has not recognised at the reporting date on an equity accounted basis are presented to reconcile segmental information to the IFRS statements.

 
                                                                                                     Joint 
                                                         UK           UK       UK                  Venture    IFRS 
Other segmental information                          Retail   Commercial   Hotels  Europe  Total       Adj   Total 
 as at 29 February 2016                                GBPm         GBPm     GBPm    GBPm   GBPm      GBPm    GBPm 
--------------------------------------------------  -------  -----------  -------  ------  -----  --------  ------ 
Additions to investment property during the period per reportable segment: 
Additions from acquisition of investment property     213.1        276.6        -       -  489.7         -   489.7 
Acquisition costs                                      10.5         12.1        -       -   22.6         -    22.6 
Capitalised expenditure                                 1.9            -      1.3     1.1    4.3     (0.1)     4.2 
--------------------------------------------------  -------  -----------  -------  ------  -----  --------  ------ 
                                                      225.5        288.7      1.3     1.1  516.6     (0.1)   516.5 
--------------------------------------------------  -------  -----------  -------  ------  -----  --------  ------ 
 
 
                                                                                                         Joint 
                                                    UK           UK       UK                           Venture    IFRS 
Segmental income statement                      Retail   Commercial   Hotels   Europe  Other   Total       Adj   Total 
 for the year ended 31 August 2016                GBPm         GBPm     GBPm     GBPm   GBPm    GBPm      GBPm    GBPm 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
Continuing operations 
Revenue 
Rental income                                     37.0         22.2     15.0     22.3    0.1    96.6    (10.0)    86.6 
Other income (1)                                     -          0.8        -      0.4    1.9     3.1     (0.6)     2.5 
Distributions from investment at fair value          -            -      0.5        -      -     0.5         -     0.5 
Total revenue                                     37.0         23.0     15.5     22.7    2.0   100.2    (10.6)    89.6 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
 
Rental income                                     37.0         22.2     15.0     22.3    0.1    96.6    (10.0)    86.6 
Rental expense                                   (4.1)        (0.9)        -    (2.3)      -   (7.3)       1.1   (6.2) 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
Net rental income                                 32.9         21.3     15.0     20.0    0.1    89.3     (8.9)    80.4 
Other income (1)                                     -          0.8        -      0.4    1.9     3.1     (0.6)     2.5 
(Loss)/gain on revaluation of investment 
 property (2)                                   (40.1)          5.0    (7.3)      1.2      -  (41.2)     (1.3)  (42.5) 
Gain on disposal of investment property              -          3.2        -        -      -     3.2         -     3.2 
Gain on disposal of subsidiary                       -            -        -     12.2      -    12.2              12.2 
Distributions from investment at fair value          -            -      0.5        -      -     0.5         -     0.5 
Loss on revaluation of investment at fair 
 value                                               -            -    (0.8)        -      -   (0.8)         -   (0.8) 
Gain on disposal of non-current assets held 
 for sale                                            -          0.2        -        -      -     0.2         -     0.2 
Foreign exchange gain                                -            -        -        -    0.9     0.9         -     0.9 
Finance income                                       -            -        -        -    6.3     6.3         -     6.3 
Finance expense                                 (16.1)        (7.1)    (3.8)   (12.3)  (0.1)  (39.4)       6.7  (32.7) 
Other finance expenses                           (1.5)        (0.3)    (0.1)    (0.1)      -   (2.0)       0.1   (1.9) 
Gain on financial liabilities                        -            -        -      2.5      -     2.5     (2.5)       - 
Change in fair value of derivative financial 
 instruments                                     (5.0)        (5.5)    (0.7)    (1.6)      -  (12.8)       1.7  (11.1) 
Impairment of investment in associate                -            -    (3.2)        -      -   (3.2)         -   (3.2) 
Share of post-tax profit from associate              -            -      1.7        -      -     1.7         -     1.7 
Total per reportable segments                   (29.8)         17.6      1.3     22.3    9.1    20.5     (4.8)    15.7 
 
Unallocated income and expenses: (3) 
Administrative costs and other fees                                                           (11.4)       0.5  (10.9) 
Amortisation of intangible assets                                                              (0.2)         -   (0.2) 
Profit before tax                                                                                8.9     (4.3)     4.6 
Taxation                                                                                       (1.6)       0.5   (1.1) 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
                                                                                                 7.3     (3.8)     3.5 
Joint venture adjustments: 
Movement of losses restricted in joint 
 ventures (4)                                                                                    0.2     (0.2)       - 
Impairment of loans to joint ventures                                                              -       2.6     2.6 
Share of post-tax profit from joint ventures                                                       -       1.4     1.4 
IFRS profit for the year                                                                         7.5         -     7.5 
--------------------------------------------  --------  -----------  -------  -------  -----  ------  --------  ------ 
 

(1) Other income in the 'Other' segment includes management fee income from joint ventures of GBP0.7 million. Refer to Note 29 for further details.

(2) Included in (loss)/gain on revaluation of investment property is GBP22.6 million of costs incurred on the acquisition of the AUK portfolio.

(3) Unallocated income and expenses are items incurred centrally which are neither directly attributable nor can be reasonably allocated to individual segments.

(4) As detailed in Note 14, the Group's interest in the Esplanade has reduced to GBPNil in the financial statements in line with IAS 28. On a proportionate basis, the Group's share of the net assets of the Esplanade is included line-by-line. Movements in the losses of the Esplanade not recognised during each reporting period on an equity accounted basis are presented to reconcile segmental information to the IFRS statements.

 
                                                                                                 Joint 
                                             UK           UK       UK                          Venture    IFRS 
Other segmental information              Retail   Commercial   Hotels   Europe  Other  Total       Adj   Total 
 for the year ended 31 August 2016         GBPm         GBPm     GBPm     GBPm   GBPm   GBPm      GBPm    GBPm 
-------------------------------------  --------  -----------  -------  -------  -----  -----  --------  ------ 
Inter-segmental revenue and expense: 
Management fee income                         -            -        -        -    3.9    3.9         -     3.9 
Management fee expense                    (1.4)        (1.1)        -    (0.8)  (0.6)  (3.9)         -   (3.9) 
                                          (1.4)        (1.1)        -    (0.8)    3.3      -         -       - 
-------------------------------------  --------  -----------  -------  -------  -----  -----  --------  ------ 
 

Inter-segmental revenue and expense relate to intercompany investment management fees that eliminate on consolidation.

 
                                                                                                        Joint 
                                                         UK           UK       UK                     Venture     IFRS 
Segmental balance sheet                              Retail   Commercial   Hotels   Europe    Total       Adj    Total 
 as at 31 August 2016                                  GBPm         GBPm     GBPm     GBPm     GBPm      GBPm     GBPm 
--------------------------------------------------  -------  -----------  -------  -------  -------  --------  ------- 
Investment property                                   541.9        419.0    229.6    346.8  1,537.3   (140.9)  1,396.4 
Investment at fair value through profit or loss           -            -      7.9        -      7.9         -      7.9 
Investment in associate                                   -            -     10.2        -     10.2         -     10.2 
Trade and other receivables                             4.8          3.3      1.7      5.9     15.7     (1.0)     14.7 
Cash and cash equivalents                               8.3          2.5      2.0      9.0     21.8     (2.3)     19.5 
Borrowings, including finance leases                (324.9)      (201.6)  (109.9)  (206.0)  (842.4)      76.8  (765.6) 
Trade and other payables                              (6.6)        (6.4)    (1.7)    (7.7)   (22.4)       3.9   (18.5) 
Segmental net assets                                  223.5        216.8    139.8    148.0    728.1    (63.5)    664.6 
Unallocated assets and liabilities: 
Other non-current assets                                                                        1.4         -      1.4 
Trade and other receivables                                                                    16.7         -     16.7 
Cash and cash equivalents                                                                      12.5         -     12.5 
Net derivative financial instruments                                                         (16.5)       4.7   (11.8) 
Deferred tax                                                                                  (5.3)       1.9    (3.4) 
Trade and other payables                                                                      (2.9)         -    (2.9) 
Tax liabilities                                                                               (2.4)         -    (2.4) 
                                                                                              731.6    (56.9)    674.7 
Joint venture adjustments: 
Fair value on acquisition of joint venture 
 interest                                                                                       0.9     (0.9)        - 
Joint venture non-controlling interest                                                        (0.7)       0.7        - 
Cumulative losses restricted in joint ventures (1)                                              1.6     (1.6)        - 
Investment in joint ventures                                                                      -       5.8      5.8 
Loans to joint ventures                                                                           -      52.9     52.9 
IFRS net assets                                                                               733.4         -    733.4 
--------------------------------------------------  -------  -----------  -------  -------  -------  --------  ------- 
 

(1) As detailed in Note 14, the Group's interest in the Esplanade has reduced to GBPNil in the financial statements in line with IAS 28. On a proportionate basis, the Group's share of the Esplanade is included line-by-line. The cumulative losses of this joint venture that the Group has not recognised at the reporting date on an equity accounted basis are presented to reconcile segmental information to the IFRS statements.

 
                                                                                                     Joint 
                                                         UK           UK       UK                  Venture    IFRS 
Other segmental information                          Retail   Commercial   Hotels  Europe  Total       Adj   Total 
 as at 31 August 2016                                  GBPm         GBPm     GBPm    GBPm   GBPm      GBPm    GBPm 
--------------------------------------------------  -------  -----------  -------  ------  -----  --------  ------ 
Additions to investment property during the year per reportable segment: 
Additions from acquisition of investment property     213.1        276.6        -       -  489.7         -   489.7 
Acquisition costs                                      10.5         12.1        -       -   22.6         -    22.6 
Capitalised expenditure                                 3.0          0.3      1.8     2.8    7.9     (0.1)     7.8 
--------------------------------------------------  -------  -----------  -------  ------  -----  --------  ------ 
                                                      226.6        289.0      1.8     2.8  520.2     (0.1)   520.1 
--------------------------------------------------  -------  -----------  -------  ------  -----  --------  ------ 
 
   4.         Rental INcome 
 
                                                Reviewed      Reviewed     Audited 
                                             28 February   29 February   31 August 
                                                    2017          2016        2016 
                                                    GBPm          GBPm        GBPm 
------------------------------------------  ------------  ------------  ---------- 
Gross lease payments from third parties             38.8          33.0        71.9 
Gross lease payments from related parties 
 (1)                                                 7.0           7.2        14.7 
------------------------------------------  ------------  ------------  ---------- 
Rental income                                       45.8          40.2        86.6 
------------------------------------------  ------------  ------------  ---------- 
 
The future aggregate minimum rentals receivable under non-cancellable 
 operating leases for the period are as follows: 
Not later than 1 year                               87.6          72.0        91.1 
Later than 1 year not later than 5 years           290.0         221.4       302.2 
Later than 5 years                                 331.8         293.5       366.2 
------------------------------------------  ------------  ------------  ---------- 
                                                   709.4         586.9       759.5 
------------------------------------------  ------------  ------------  ---------- 
 

(1) Amounts received from RedefineBDL as a result of lease agreements in place between the Group, RHML and RECML (wholly owned subsidiaries of RedefineBDL).

   5.         Other Income 
 
                                            Reviewed      Reviewed     Audited 
                                         28 February   29 February   31 August 
                                                2017          2016        2016 
                                                GBPm          GBPm        GBPm 
--------------------------------------  ------------  ------------  ---------- 
Performance fee (1)                              4.0             -           - 
Investment management fees from joint 
 ventures                                        0.4           0.1         0.7 
Insurance rebates                                0.2           0.5         0.5 
Salary recharges                                 0.1           0.2         0.3 
Other income from related parties                  -           0.3         0.3 
Other property related income                    0.1           0.2         0.7 
Other income                                     4.8           1.3         2.5 
--------------------------------------  ------------  ------------  ---------- 
 

(1) The Group was responsible for the investment management of the property portfolio of the Wichford VBG Holding S.à.r.l. joint venture. The Group was incentivised during the investment period by a performance fee dependent on the internal rate of return achieved on disposal. The return on disposal on 1 January 2017 resulted in a fee of GBP4.0 million payable from the joint venture to the Group. The income has been recognised within other income and the Group share of the related expense incurred by the joint venture has been recognised within share of post-tax (loss)/profit from joint ventures. On a proportionate basis, and for segmental reporting purposes, the net performance fee of GBP2.0 million fee earned by the Group has been recognised in other income. Refer to Note 3.

   6.         ADMINISTRATIVE COSTS and other fees 
 
                                                  Reviewed      Reviewed     Audited 
                                               28 February   29 February   31 August 
                                                      2017          2016        2016 
                                                      GBPm          GBPm        GBPm 
--------------------------------------------  ------------  ------------  ---------- 
Administrative and other operating expenses            2.0           1.4         2.3 
Professional fees                                      2.7           1.1         2.5 
Staff costs                                            3.2           2.2         4.9 
Share-based payments                                   0.5           0.5         1.2 
Administrative costs and other fees                    8.4           5.2        10.9 
--------------------------------------------  ------------  ------------  ---------- 
 
   7.         DISPOSAL of subsidiaries 

No entities were disposed of during the six months ended 28 February 2017.

On 31 August 2016, the Group disposed of its 100% shareholding in Cooperative Redefine International Real Estate UA (Netherlands) for a consideration of EUR1. The disposed subsidiary undertaking holds the entire issued share capital of Redefine International Dan Haag B.V (Netherlands). This company is the beneficial and legal owner of the Group's investment in The Justice Center, The Hague.

The impact of the disposal on the Group and the net cash flow is shown below:

 
                                                                                                         Audited 
                                                                                                       31 August 
                                                                                                            2016 
                                                                                                            GBPm 
---------------------------------------------------------------------------------------------------   ---------- 
Carrying value of net liabilities/(assets) 
Investment property                                                                                        (5.5) 
Trade and other receivables                                                                                (0.7) 
Cash and cash equivalents                                                                                  (0.4) 
Borrowings                                                                                                  15.0 
Trade and other payables                                                                                     0.2 
Net liabilities disposed                                                                                     8.6 
 
Consideration                                                                                                  - 
Transfer of foreign currency translation on disposal of foreign operations to the income statement           3.6 
----------------------------------------------------------------------------------------------------  ---------- 
Gain on disposal of subsidiary                                                                              12.2 
----------------------------------------------------------------------------------------------------  ---------- 
 
   8.         net Finance expense 
 
                                                          Re-presented 
                                                Reviewed      Reviewed     Audited 
                                             28 February   29 February   31 August 
                                                    2017          2016        2016 
                                                    GBPm          GBPm        GBPm 
------------------------------------------  ------------  ------------  ---------- 
Finance income on bank deposits                        -           0.1         0.2 
Finance income on loans to joint ventures            2.4           2.5         5.0 
Finance income on loans to other related 
 parties                                             0.5           0.6         1.1 
Finance income                                       2.9           3.2         6.3 
 
Finance expense on secured bank loans             (12.9)        (13.1)      (27.3) 
Amortisation of debt issue costs                   (0.7)         (0.7)       (1.5) 
Accretion of fair value adjustments (1)            (0.5)         (1.1)       (3.1) 
Finance lease interest                             (0.4)         (0.5)       (0.8) 
------------------------------------------  ------------  ------------  ---------- 
Finance expense                                   (14.5)        (15.4)      (32.7) 
 
Net finance expense                               (11.6)        (12.2)      (26.4) 
------------------------------------------  ------------  ------------  ---------- 
 

(1) The accretion during the year ended 31 August 2016 included the release of the residual fair value adjustments on refinanced facilities.

   9.         Other Finance Expenses 
 
                                              Reviewed      Reviewed     Audited 
                                           28 February   29 February   31 August 
                                                  2017          2016        2016 
                                                  GBPm          GBPm        GBPm 
----------------------------------------  ------------  ------------  ---------- 
Aviva profit share: 
- share of earnings for the period                   -         (0.7)       (1.5) 
- re-measurement of financial liability          (1.3)             -           - 
Termination of derivative financial 
 instruments                                         -         (0.1)       (0.2) 
Other finance costs                              (0.2)             -       (0.2) 
Other finance expenses                           (1.5)         (0.8)       (1.9) 
----------------------------------------  ------------  ------------  ---------- 
 
   10.       NET GAIN ON SALE OF JOINT VENTURE interests 

On 1 January 2017, Wichford VBG Holding S.à.r.l. ("Wichford VBG"), exchanged contracts to dispose of all of its property-owning subsidiaries. The value attributed by the purchaser to the properties held by these subsidiaries was EUR106.0 million (GBP90.6 million). The carrying value was EUR97.6 million (GBP83.4 million) at 31 August 2016. Total consideration was agreed at EUR49.7 million (GBP42.5 million), subject to final completion adjustments, and the transaction completed on the 13 January 2017. The equity of the subsidiaries was acquired for nominal value and so the consideration receivable was comprised of:

-- EUR29.4 million (GBP25.1 million) in settlement of the Shareholder Loans outstanding to the joint venture partners (Group share: EUR14.4 million/GBP12.3 million); and

-- EUR20.3 million (GBP17.4 million) in settlement of loans that had been advanced by the retained structure of Wichford VBG ("Finco Loans") to the disposed subsidiaries (Group share: EUR9.9 million/GBP8.5 million). The Finco Loans had eliminated on consolidation of the joint venture.

Cash consideration of EUR47.9 million (GBP40.9 million) was received by the joint venture after the deduction of transaction costs of EUR0.8 million (GBP0.7 million) by the purchaser. In addition, EUR1.0 million (GBP0.9 million) was deferred pending the outcome of certain conditions. The conditions precedent were subsequently satisfied and, as a result, the deferred consideration has been recognised as a receivable at the balance sheet date. The net assets of the subsidiaries on disposal were EUR11.2 million (GBP9.6 million) and, after adjusting for the Shareholder Loans and additional transaction costs incurred of EUR1.7 million (GBP1.4 million), an initial gain on sale of EUR6.6 million (GBP5.7 million) was recognised by the joint venture. The Group share of this gain was EUR3.2 million (GBP2.8 million). The Group recognised a total gain of GBP5.0 million after the recycling of cumulative foreign currency translation of GBP2.2 million to the consolidated income statement. The Directors believe that the recycling of the translation reserve is appropriate as the retained Wichford VBG structure only has a receivable in relation to the deferred consideration and cash to settle final working capital balances prior to liquidation at 28 February 2017.

The Finco Loans originated during the Wichford VBG restructuring in September 2012, when a financing vehicle of the retained structure acquired the residual bank debt from the existing lender for nominal value. Loan notes of EUR1 ("Finco Loan Notes") were issued to the joint venture partners by the vehicle to finance the acquisition of the Finco Loans. Under the terms of the Finco Loan Notes, any termination payments received under the Finco Loans would be payable to the Finco Loan Note holders after settlement of the Performance Fee (refer to Note 5) and any interest outstanding so that surplus cash could be repatriated efficiently to the joint venture partners. Following the disposal of the Finco Loans, a loss was therefore recognised in the financial statements of the joint venture on settlement of Finco Loan Notes (Group share: EUR3.4 million/GBP3.0 million) and a corresponding gain was recognised by the joint venture partners. The net impact of the Finco Loan Note settlement is GBPNil in the Group consolidated financial statements. For presentation purposes and to reflect the substance of the transaction, all gains and losses incurred by both the Group (GBP5.2 million gain) and the joint venture on an equity accounted basis (GBP0.2 million loss), as a result of the disposal, are included within one line in the consolidated income statement, 'Net gain on sale of joint venture interests'.

The table below illustrates the financial impact of the transaction on the joint venture and on the Group on a total basis, eliminating the effect of the Finco Loan Note settlement for simplicity.

 
                                                                                                  GBPm 
----------------------------------------------------------------------------------------------  ------ 
Carrying value of net (assets)/liabilities 
Investment property                                                                             (83.4) 
Trade and other receivables                                                                      (0.4) 
Cash and cash equivalents                                                                        (0.5) 
Borrowings                                                                                        48.0 
Loans from joint venture partners                                                                 25.1 
Derivative financial instruments                                                                   0.4 
Deferred tax                                                                                       1.1 
Trade and other payables                                                                           0.1 
Net assets disposed by joint venture                                                             (9.6) 
Settlement of loans from joint venture partners                                                 (25.1) 
----------------------------------------------------------------------------------------------  ------ 
Adjusted net assets disposed by joint venture                                                   (34.7) 
Cash consideration received                                                                       40.9 
Deferred consideration receivable                                                                  0.9 
Additional transaction costs incurred                                                            (1.4) 
----------------------------------------------------------------------------------------------  ------ 
Gain on sale of subsidiaries attributable to joint venture                                         5.7 
Elimination of joint venture partners' interest                                                  (2.9) 
Gain on sale of joint venture interests attributable to Group                                      2.8 
Transfer of foreign currency translation to the income statement on disposal of joint venture 
 interests                                                                                         2.2 
----------------------------------------------------------------------------------------------  ------ 
Net gain on sale of joint venture interests                                                        5.0 
----------------------------------------------------------------------------------------------  ------ 
Attributable to: 
Joint venture (Group share)                                                                      (0.2) 
Group                                                                                              5.2 
----------------------------------------------------------------------------------------------  ------ 
 

Total cash proceeds received by the Group at the balance sheet date on disposal were GBP22.1 million, including the receipt of the Performance Fee of GBP4.0 million (refer to Note 5). In the consolidated statement of cash flows, the Performance Fee has been presented under operating activities and the balance of GBP18.1 million has been presented under investing activities.

   11.       taxation 

a) Tax recognised in the condensed consolidated income statement:

 
                                              Reviewed                          Reviewed     Audited 
                                           28 February                       29 February   31 August 
                                                  2017                              2016        2016 
                                                  GBPm                              GBPm        GBPm 
----------------------------------------  ------------  --------------------------------  ---------- 
Current income tax 
Income tax in respect of current period            0.6                               0.4         0.6 
Adjustments in respect of prior periods              -                             (1.1)       (0.7) 
Deferred tax 
On fair value of investment property               0.2                               0.8       (0.2) 
On accelerated capital allowances                  0.2                                 -         1.4 
Tax charge for the period recognised 
 in the income statement                           1.0                               0.1         1.1 
----------------------------------------  ------------  --------------------------------  ---------- 
 

There was no tax recognised in equity or other comprehensive income during the period (29 February 2016: GBPNil, 31 August 2016: GBPNil).

b) Reconciliation

The tax rate for the period is lower than the standard rate of corporation tax in the UK of 20 per cent (29 February 2016: 20 per cent, 31 August 2016: 20 per cent). The differences are explained below:

 
                                                     Reviewed      Reviewed     Audited 
                                                  28 February   29 February   31 August 
                                                         2017          2016        2016 
                                                         GBPm          GBPm        GBPm 
-----------------------------------------------  ------------  ------------  ---------- 
Profit before tax                                        42.0           8.4         8.6 
Profit before tax multiplied by standard 
 rate of corporation tax                                  8.4           1.7         1.7 
Effect of: 
 - (Gain)/loss on revaluation of exempt 
  UK investment property                                (0.5)           4.1         8.4 
  - Deferred tax adjustment on revaluation 
   of European investment 
   property                                               0.2             -       (0.2) 
  - Accelerated capital allowances on European 
   investment property                                    0.2             -         1.4 
  - Gain on disposal of exempt investment 
   property                                             (1.2)         (0.7)       (0.6) 
  - Gain on disposal of subsidiary                          -             -       (2.4) 
  - Change in fair value of derivative 
   financial instruments                                (0.9)           0.5         2.2 
  - Income not subject to UK income tax                 (6.7)         (5.2)       (9.7) 
  - Non-resident landlord tax attributable 
   to non-controlling interest                            0.5           0.2         0.4 
  - Group relief utilised                                   -             -       (0.1) 
  - Unutilised losses carried forward                     0.9           0.6         0.3 
  - Other taxable income                                    -             -         0.1 
  - Expenses not deductible for tax                       0.1             -         0.3 
  - Adjustments in respect of prior periods                 -         (1.1)       (0.7) 
-----------------------------------------------  ------------  ------------  ---------- 
Tax charge for the period recognised 
 in the income statement                                  1.0           0.1         1.1 
-----------------------------------------------  ------------  ------------  ---------- 
 

In the reconciliation above for the period ended 28 February 2017, the effective tax rate of the Group was 2.4 per cent (29 February 2016: 1.2 per cent, 31 August 2016: 12.8 per cent).

On 4 December 2013, the Group converted to a UK-REIT. As a result, the Group does not pay UK Corporation Tax on the profits and gains from qualifying rental business in the UK provided certain conditions are met. Non-qualifying profits and gains of the Group continue to be subject to corporation tax. The Directors intend for the Group to continue as a REIT for the foreseeable future, with the result that deferred tax is no longer recognised on temporary differences relating to the UK property rental business which is within the REIT structure.

   12.       investment property 
 
                                           UK           UK       UK      (1) 
                                       Retail   Commercial   Hotels   Europe    Total  Freehold  Leasehold 
28 February 2017                         GBPm         GBPm     GBPm     GBPm     GBPm      GBPm       GBPm 
------------------------------------  -------  -----------  -------  -------  -------  --------  --------- 
Opening carrying value at 
 1 September 2016                       541.9        407.3    229.6    217.6  1,396.4   1,052.2      344.2 
Capitalised expenditure                   0.9          0.7      1.2      5.2      8.0       2.6        5.4 
Capitalised finance costs                   -            -      0.2      0.2      0.4       0.2        0.2 
Disposals through the sale 
 of property                                -       (42.6)        -        -   (42.6)    (40.8)      (1.8) 
Transfer to non-current assets 
 held for sale (Note 18)               (16.8)       (17.4)        -    (5.5)   (39.7)    (33.8)      (5.9) 
Head lease additions and 
 disposals                                2.2        (0.5)        -        -      1.7         -        1.7 
(Loss)/gain on revaluation 
 of investment property                 (1.8)         10.2    (2.2)    (3.6)      2.6      13.6     (11.0) 
Foreign exchange movement 
 in foreign operations                      -            -        -      1.2      1.2       1.0        0.2 
                                                                                       --------  --------- 
IFRS carrying value at 28 
 February 2017                          526.4        357.7    228.8    215.1  1,328.0     995.0      333.0 
Adjustments: 
Non-current assets held for 
 sale (Note 18)                          16.8         17.4        -      5.5     39.7      33.8        5.9 
Minimum payments under head 
 leases 
 (Note 19)                             (10.1)        (2.6)    (0.4)    (1.6)   (14.7)         -     (14.7) 
Tenant lease incentives (Note 
 16)                                      3.9          1.8      0.9        -      6.6       3.9        2.7 
Market value of Group portfolio 
 at 28 February 2017                    537.0        374.3    229.3    219.0  1,359.6   1,032.7      326.9 
Joint ventures 
Share of joint ventures investment 
 property (Note 14)                         -         11.8        -     88.0     99.8      99.8          - 
------------------------------------  -------  -----------  -------  -------  -------  --------  --------- 
Market value of total portfolio 
 at 28 February 2017 
 (on a proportionately consolidated 
 basis)                                 537.0        386.1    229.3    307.0  1,459.4   1,132.5      326.9 
------------------------------------  -------  -----------  -------  -------  -------  --------  --------- 
 
 
                                           UK           UK       UK            (1) 
                                       Retail   Commercial   Hotels         Europe    Total  Freehold  Leasehold 
31 August 2016                           GBPm         GBPm     GBPm           GBPm     GBPm      GBPm       GBPm 
------------------------------------  -------  -----------  -------  -------------  -------  --------  --------- 
Opening carrying value at 
 1 September 2015                       355.4        153.8    235.1          190.1    934.4     642.6      291.8 
Additions from acquisition 
 of property (2)                        213.1        276.6        -              -    489.7     407.9       81.8 
Acquisition costs                        10.5         12.1        -              -     22.6      20.1        2.5 
Capitalised expenditure                   3.0          0.3      1.8            2.7      7.8       4.8        3.0 
Disposals through the sale 
 of property (2)                            -       (40.3)        -              -   (40.3)    (10.7)     (29.6) 
Disposals through the sale 
 of subsidiary 
 (Note 7)                                   -            -        -          (5.5)    (5.5)     (5.5)          - 
Disposal of head leases                     -        (0.4)        -              -    (0.4)         -      (0.4) 
(Loss)/gain on revaluation 
 of investment property                (40.1)          5.2    (7.3)          (0.3)   (42.5)    (35.2)      (7.3) 
Foreign exchange movement 
 in foreign operations                      -            -        -           30.6     30.6      28.2        2.4 
                                                                                             --------  --------- 
IFRS carrying value at 31 
 August 2016                            541.9        407.3    229.6          217.6  1,396.4   1,052.2      344.2 
Adjustments: 
Minimum payments under head 
 leases 
 (Note 19)                              (7.9)        (3.1)    (0.4)          (1.6)   (13.0)         -     (13.0) 
Tenant lease incentives (Note 
 16)                                      3.1          1.6        -              -      4.7       1.9        2.8 
                                                                                             --------  --------- 
Market value at 31 August 
 2016                                   537.1        405.8    229.2          216.0  1,388.1   1,054.1      334.0 
------------------------------------  -------  -----------  -------  -------------  -------  --------  --------- 
Joint ventures 
Share of joint ventures investment 
 property (Note 14)                         -         11.7        -          129.2    140.9     140.9          - 
                                                                                             --------  --------- 
Market value at 31 August 
 2016 
 (on a proportionately consolidated 
 basis)                                 537.1        417.5    229.2          345.2  1,529.0   1,195.0      334.0 
------------------------------------  -------  -----------  -------  -------------  -------  --------  --------- 
 

(1) Included within the Europe segment at 28 February 2017 is property under development of GBP19.0 million (31 August 2016: GBP18.5 million)

(2) Additions from acquisitions and disposals through the sale of property in UK Commercial have been grossed up to reflect the acquisition and subsequent sale of 16 Grosvenor Street.

The tables above present both segmental and market value investment property information prepared on a proportionately consolidated basis. Properties that have been classified as held for sale in the current period are also included so that the market value of the total portfolio can be determined. This format is not a requirement of IFRS and is for informational purposes only as it is used in reports presented to the Group's Chief Operating Decision Maker.

Recognition

In accordance with IAS 40, Paragraph 14, judgement is needed to determine whether a property qualifies as an investment property. The Group has developed criteria so that it can exercise its judgement consistently in recognising investment property. These include property held for long-term capital appreciation, property owned (or under finance leases) and leased out under one or more operating leases and property that is being developed for future use as investment property. The recognition and classification of property as investment property principally assumes that the Group does not retain significant exposure to the variation in cash flows arising from the underlying operations of properties.

Investment property comprises a number of retail and commercial properties in the UK and Europe that are leased to unconnected third parties. In addition, the hotel properties are held for capital appreciation and to earn rental income. The properties have been let to RHML and RECML (with the exception of Travelodge, Enfield) for a fixed rent which is subject to annual review. The annual rent review takes into account the forecast EBITDA for the hotel portfolio when setting the revised rental level. As detailed in the key judgements and estimates in Note 2.3.3, aside from the Group's shareholding in RedefineBDL and the receipt of rental income, Redefine International is not involved in the hotel management business and there are limited transactions between Redefine International, RHML and RECML. As a result, the Directors consider it appropriate to classify the hotel properties as investment property in line with IAS 40.

Valuation

The carrying amount of investment property is the fair value of the property as determined by appropriately qualified independent valuers and adjusted for minimum payments under head leases and tenant lease incentives. Valuations are based on what is determined to be the highest and best use. When considering the highest and best use a valuer will consider, on a property by property basis, and in limited circumstances, in aggregation with other assets, its actual and potential uses which are physically, legally and financially viable. Where the highest and best use differs from the existing use, the valuer will consider the cost and the likelihood of achieving and implementing this change in arriving at its valuation.

The fair value of the Group's property for the period ended 28 February 2017 was assessed by the valuers in accordance with the Royal Institute of Chartered Surveyors ("RICS") standards and IFRS 13. The valuations performed by the independent valuers are reviewed internally by senior management and by the Audit and Risk Committee. This includes discussion of the assumptions used by the external valuers, as well as a review of the resulting valuations.

Valuation inputs

The fair value of the property portfolio has been determined using either a discounted cash flow or a yield capitalisation technique, whereby contracted and market rental values are capitalised at a market capitalisation rate. The resulting valuations are cross-checked against the net initial yield and the fair market values per square foot derived from comparable recent market transactions.

The valuation techniques described above are consistent with IFRS 13 and uses significant unobservable inputs. Valuation techniques can change at each valuation round depending on prevailing circumstances and the property's highest and best use at the reporting date.

The Group considers that all of its investment property falls within 'Level 3', as defined by IFRS 13 (refer to Note 28). There has been no transfer of property within the fair value hierarchy over the period.

Committed expenditure

The Group was contractually committed to expenditure of GBP12.3 million for the future development and enhancement of investment property at 28 February 2017 (31 August 2016: GBP15.8 million).

Disposals

The Group disposed of four assets in the UK Commercial portfolio during the period realising a gain, after disposal costs, of GBP5.9 million:

 
                       Sales                           Tenant        Net sales 
                    proceeds  Disposal costs       incentives         proceeds  Carrying value  Gain on disposal 
28 February 2017        GBPm            GBPm             GBPm             GBPm            GBPm              GBPm 
----------------   ---------  --------------  ---------------  ---------------  --------------  ---------------- 
201. Deansgate, 
 Manchester             29.2           (0.3)                -             28.9            25.5               3.4 
Exchange House, 
 Watford                13.3           (0.2)                -             13.1            11.8               1.3 
1A Parliament 
 Square, 
 Edinburgh               4.0               -                -              4.0             3.5               0.5 
Delta 900, 
 Swindon                 3.6           (0.1)            (1.0)              2.5             1.8               0.7 
-----------------  ---------  --------------  ---------------  ---------------  --------------  ---------------- 
Disposals during 
 the period             50.1           (0.6)            (1.0)             48.5            42.6               5.9 
-----------------  ---------  --------------  ---------------  ---------------  --------------  ---------------- 
 
   13.       investment at fair value THROUGH Profit or loss 

The following table details the movement in investments designated at fair value through profit or loss:

 
                                                       Reviewed     Audited 
                                                    28 February   31 August 
                                                           2017        2016 
                                                           GBPm        GBPm 
-------------------------------------------------  ------------  ---------- 
Opening balance at 1 September                              7.9           - 
Transfer from investment in associate (Note 15)               -         3.8 
Addition of investment at fair value                        0.9         4.9 
Gain/(loss) on revaluation of investment at fair 
 value                                                      1.0       (0.8) 
Closing balance                                             9.8         7.9 
-------------------------------------------------  ------------  ---------- 
 

On 14 October 2015, the Company acquired, by way of private placement, 3.8 million shares in the newly listed International Hotel Properties Limited (formerly International Hotel Group Limited) for GBP3.8 million. On the date of listing this represented 25.4% of the group's issued share capital and the shareholding was recognised as an investment in associate under the equity method.

On 20 October 2015, the Company acquired 3.1 million additional shares for GBP3.1 million as part of a GBP13.0 million private placement by IHL, diluting the Group's interest to 13.2%. Significant influence over the operations of IHL was deemed to have ceased from this date and therefore the shareholding was re-classified from investment in associate to investment at fair value through profit or loss (refer to Note 15).

On 31 March 2016, the Company acquired an additional 1.5 million shares in IHL for GBP1.5 million, as a result of a GBP7.0 million private placement, thereby increasing its interest to 15.3%.

On 20 April 2016, IHL acquired RBDL Capital Managers Limited from RedefineBDL for consideration of GBP1.0 million which was settled in the form of 1.0 million shares in IHL. RedefineBDL distributed these shares in relative proportion to its shareholders, of which the Group received 254,084 shares.

On 7 February 2017, as part of a settlement of the balance outstanding from 4C UK Investments Limited ("4C Investments"), the Company assumed 1,000,000 shares in IHL (refer to Note 29). The value attributed to the shares by the Group as part of this settlement was GBP1.0 per share. The fair value of these shares on transfer was GBP0.95 and the shares were recognised at fair value. The transfer of the shares increased the Group's investment in IHL by 1.7% to 17.2%.

As at 28 February 2017, the Group's investment at fair value of GBP9.8 million (31 August 2016: GBP7.9 million) relates to its investment in 9,656,834 shares of IHL's 56 million issued shares (31 August 2016: 8,656,834).

No change in the Group's influence over IHL has occurred since 20 October 2015, when the investment was initially classified as fair value through profit or loss. Refer to Note 2.3.4 for further information on the classification of IHL as an investment at fair value through profit or loss.

   14.       INvestment in and loans to joint ventures 
 
                                                           Reviewed      Audited 
                                                        28 February    31 August 
                                                               2017         2016 
Investment in joint ventures                                   GBPm         GBPm 
----------------------------------------------------  -------------  ----------- 
Opening balance at 1 September                                  5.8          3.6 
Loss on disposal of joint venture interests                   (0.2)            - 
Share of post-tax (loss)/profit from joint ventures           (2.6)          1.4 
Foreign currency translation                                      -          0.8 
----------------------------------------------------  -------------  ----------- 
Closing balance                                                 3.0          5.8 
----------------------------------------------------  -------------  ----------- 
                                                           Reviewed      Audited 
                                                        28 February    31 August 
                                                               2017         2016 
Loans to joint ventures                                        GBPm         GBPm 
----------------------------------------------------  -------------  ----------- 
Opening balance at 1 September                                 52.9         44.6 
Increase in loans to joint ventures                               -          0.5 
Disposal of loan to joint venture                            (12.3)            - 
Repayment of loans by joint ventures                          (0.6)        (2.6) 
Reversal of impairment of loans to joint ventures               0.1          2.6 
Foreign currency translation                                    0.4          7.8 
Closing balance                                                40.5         52.9 
----------------------------------------------------  -------------  ----------- 
 
Carrying value of interests in joint ventures                  43.5         58.7 
----------------------------------------------------  -------------  ----------- 
 

The Group's joint ventures consist of the following material investments as presented in the tables of this note:

(i) 50% interest in Leopard Holding Germany 1 S.à.r.l., Leopard German Property Ed1, Ed2, Ed3 and Ed4, LGP ME1 and ME2 S.à.r.l. and LGP Ed2 GmbH & Co KG, a joint venture with Redefine Properties Limited ("RPL"), the Company's largest shareholder. These companies hold 56 retail properties in Germany comprising a mix of stand-alone supermarkets, food-store anchored retail parks and cash & carry stores. Collectively known as the Leopard portfolio, the joint venture also includes two entities in which the Group previously held a 100% ownership interest, Ciref Berlin 1 Limited and CEL Portfolio 2 Limited & Co.KG, and that hold ten retail properties;

(ii) 50.5% interest in RI Menora German Holdings S.à.r.l., a joint venture with Menora Mivtachim, which ultimately owns properties in Waldkraiburg, Huckelhoven and Kaiserslautern, Germany. Notwithstanding the economic shareholding the contractual terms provide for joint control and so the Company does not control the entity;

(iii) 49% interest in Wichford VBG Holding S.à.r.l., a joint venture with Menora Mivtachim, which owned government-let properties in Dresden, Berlin, Stuttgart and Cologne, Germany until 1 January 2017; and

(iv) 50% interest in 26 Esplanade No 1 Limited, a joint venture with Rimstone Limited, which owns an office building in St. Helier, Jersey.

The Group's interest in joint venture entities is in the form of:

   1)   an interest in the share capital of the joint venture companies; and 

2) loans advanced to the joint venture entities. The loans outstanding at 28 February 2017 bear interest at 4.75 - 8.0 per cent and have remaining maturities of 10 years.

RI Menora German Holdings S.à.r.l. and Wichford VBG Holding S.à.r.l. both have accounting year ends of 31 December which differ from the year-end of the Group, the purpose of which is to align with the year-end of the joint venture partner, Menora Mivtachim.

Interest in joint ventures not recognised

Under the equity method, the Esplanade is carried at GBPNil value in the opening joint venture balance of the Group's financial statements at 1 September 2016 and remains at GBPNil at 28 February 2017. This investment is in a net liability position with the cumulative losses exceeding the cost of the Group's investment. The Group does not recognise losses below its original cost in this joint venture but continues to impair the loans advanced to their recoverable amount in line with IAS 28. The Group share of losses amounted to GBP0.7 million at 28 February 2017 (31 August 2016: GBP1.6 million). On a proportionate basis and for segmental reporting purposes, the Group's interest in the Esplanade is recognised line-by-line. Refer to Note 3.

Wichford VBG Holding S.à.r.l.

On 1 January 2017, Wichford VBG Holding S.à.r.l. exchanged on the sale of its four German office assets. The disposal was structured as a share sale of the joint venture's property-owning subsidiaries. The joint venture recognised a net loss on disposal of these subsidiaries of GBP0.4 million (Group share: GBP0.2 million). See Note 10 for further details.

Summarised Financial Information

The summarised financial information of the Group's material joint ventures are set out separately below:

 
                                                        RI                                  Elimination 
                                  Wichford          Menora                                     of joint 
                                       VBG          German                                      venture 
                                   Holding        Holdings     Leopard                        partners'  Proportionate 
                             S.à.r.l.   S.à.r.l.   Portfolio  Esplanade    Total     interest          Total 
28 February 2017                      GBPm            GBPm        GBPm       GBPm     GBPm         GBPm           GBPm 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Percentage ownership 
 interest                              49%           50.5%         50%        50% 
Summarised Income 
Statement 
Rental income                          2.3             0.9         6.0        0.9     10.1        (5.1)            5.0 
Rental expense                       (0.3)               -       (0.8)          -    (1.1)          0.6          (0.5) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Net rental income                      2.0             0.9         5.2        0.9      9.0        (4.5)            4.5 
Administrative costs and 
 other fees (1)                      (4.2)           (0.1)       (0.5)          -    (4.8)          2.4          (2.4) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Net operating 
 (expense)/income                    (2.2)             0.8         4.7        0.9      4.2        (2.1)            2.1 
(Loss)/gain on revaluation 
 of investment property                  -           (0.8)       (0.6)        0.2    (1.2)          0.6          (0.6) 
Loss on sale of 
 subsidiaries                        (0.4)               -           -          -    (0.4)          0.2          (0.2) 
Net finance expense                  (2.0)           (0.5)       (3.6)      (0.7)    (6.8)          3.4          (3.4) 
Change in fair value of 
 derivative 
 financial instruments                 0.2             0.1         0.1        1.3      1.7        (0.8)            0.9 
(Loss)/profit before tax             (4.4)           (0.4)         0.6        1.7    (2.5)          1.3          (1.2) 
Taxation                             (0.9)               -       (0.3)          -    (1.2)          0.6          (0.6) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
(Loss)/profit and total 
 comprehensive 
 (expense)/income                    (5.3)           (0.4)         0.3        1.7    (3.7)          1.9          (1.8) 
Reconciliation to IFRS: 
Elimination of 
 non-controlling 
 and joint venture 
 partners' 
 interest                              2.7             0.2       (0.2)      (0.8)      1.9        (1.9)              - 
Movement in losses 
 restricted 
 in joint ventures                       -               -           -      (0.9)    (0.9)            -          (0.9) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Group share of joint 
 venture 
 results                             (2.6)           (0.2)         0.1          -    (2.7)            -          (2.7) 
Presented as: 
Reversal of impairment of 
 loans to joint ventures                 -               -         0.1          -      0.1            -            0.1 
Loss on disposal of joint 
 venture interests (2)               (0.2)               -           -          -    (0.2)            -          (0.2) 
Share of post-tax loss 
 from 
 joint ventures                      (2.4)           (0.2)           -          -    (2.6)            -          (2.6) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
 
Summarised Balance Sheet 
Investment property                      -            25.8       149.9       23.6    199.3       (99.5)           99.8 
Derivative financial 
 instruments                             -               -         0.1          -      0.1        (0.1)              - 
Trade and other 
 receivables                           1.1             0.9         1.0        0.1      3.1        (1.5)            1.6 
Cash and cash equivalents              0.7             0.4         2.3        0.5      3.9        (1.9)            2.0 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Total assets                           1.8            27.1       153.3       24.2    206.4      (103.0)          103.4 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
External borrowings                      -          (15.0)      (73.4)     (17.8)  (106.2)         53.0         (53.2) 
Loans from joint venture 
 partners                                -           (7.6)      (83.3)      (6.6)   (97.5)         48.8         (48.7) 
Derivative financial 
 instruments                             -           (0.1)       (0.1)      (7.3)    (7.5)          3.7          (3.8) 
Deferred tax                             -           (1.1)       (2.7)          -    (3.8)          1.9          (1.9) 
Trade and other payables             (0.1)           (0.6)       (2.8)      (0.5)    (4.0)          2.0          (2.0) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Total liabilities                    (0.1)          (24.4)     (162.3)     (32.2)  (219.0)        109.4        (109.6) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Non-controlling interests                -           (0.5)       (0.4)          -    (0.9)          0.3          (0.6) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Net assets/(liabilities)               1.7             2.2       (9.4)      (8.0)   (13.5)          6.7          (6.8) 
Reconciliation to IFRS: 
Elimination of joint 
 venture 
 partners' interests                 (0.9)           (1.1)         4.7        4.0      6.7        (6.7)              - 
Fair value on acquisition 
 of joint venture interest               -               -         0.9          -      0.9            -            0.9 
Loan to joint ventures (3)               -             3.8        41.6          -     45.4            -           45.4 
Interest in joint ventures 
 not recognised                          -               -           -        3.3      3.3            -            3.3 
Cumulative losses 
 restricted 
 (4)                                     -               -           -        0.7      0.7            -            0.7 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Carrying value of 
 interests 
 in joint ventures                     0.8             4.9        37.8          -     43.5            -           43.5 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
 
 
                                                        RI                                  Elimination 
                                  Wichford          Menora                                     of joint 
                                       VBG          German                                      venture 
                                   Holding        Holdings     Leopard                        partners'  Proportionate 
                             S.à.r.l.   S.à.r.l.   Portfolio  Esplanade    Total     interest          Total 
31 August 2016                        GBPm            GBPm        GBPm       GBPm     GBPm         GBPm           GBPm 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Percentage ownership 
 interest                              49%           50.5%         50%        50% 
Summarised Income 
Statement 
Rental income                          6.2             1.6        10.8        1.5     20.1       (10.1)           10.0 
Rental expense                       (0.4)           (0.2)       (1.7)          -    (2.3)          1.2          (1.1) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Net rental income                      5.8             1.4         9.1        1.5     17.8        (8.9)            8.9 
Other income                             -               -         0.1        1.0      1.1        (0.5)            0.6 
Administrative costs and 
 other fees                          (0.5)           (0.1)       (0.3)      (0.1)    (1.0)          0.5          (0.5) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Net operating income                   5.3             1.3         8.9        2.4     17.9        (8.9)            9.0 
Gain/(loss) on revaluation 
 of investment property                2.7             0.5       (0.2)      (0.4)      2.6        (1.3)            1.3 
Net finance expense                  (5.7)           (0.8)       (5.9)      (0.9)   (13.3)          6.6          (6.7) 
Other finance expense                    -           (0.1)       (0.1)          -    (0.2)          0.1          (0.1) 
Gain/(loss) on financial 
 liabilities                           7.3           (0.6)       (1.4)          -      5.3        (2.8)            2.5 
Change in fair value of 
 derivative financial 
 instruments                             -             0.1       (1.5)      (2.1)    (3.5)          1.8          (1.7) 
Profit/(loss) before tax               9.6             0.4       (0.2)      (1.0)      8.8        (4.5)            4.3 
Taxation                             (0.3)           (0.2)       (0.5)          -    (1.0)          0.5          (0.5) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Profit/(loss) and total 
 comprehensive 
 income/(expense)                      9.3             0.2       (0.7)      (1.0)      7.8        (4.0)            3.8 
Reconciliation to IFRS: 
Elimination of 
 non-controlling 
 and joint venture 
 partners' 
 interest                            (4.7)           (0.1)         0.3        0.5    (4.0)          4.0              - 
Movement in losses 
 restricted 
 in joint ventures                       -               -           -        0.2      0.2            -            0.2 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Group share of joint 
 venture 
 results                               4.6             0.1       (0.4)      (0.3)      4.0            -            4.0 
Presented as: 
Impairment reversal / 
 (impairment) 
 of loans to joint 
 ventures                              3.6           (0.3)       (0.4)      (0.3)      2.6            -            2.6 
Share of post-tax profit 
 from joint ventures                   1.0             0.4           -          -      1.4            -            1.4 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
 
Summarised Balance Sheet 
Investment property                   82.9            26.5       150.4       23.4    283.2      (142.3)          140.9 
Derivative financial 
 instruments                             -               -         0.1          -      0.1            -            0.1 
Trade and other 
 receivables                             -             1.0         1.0        0.1      2.1        (1.1)            1.0 
Cash and cash equivalents              1.5             0.3         2.4        0.4      4.6        (2.3)            2.3 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Total assets                          84.4            27.8       153.9       23.9    290.0      (145.7)          144.3 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
External borrowings                 (47.7)          (15.0)      (73.7)     (18.0)  (154.4)         77.6         (76.8) 
Loans from joint venture 
 partners                           (24.9)           (7.7)      (83.8)      (6.6)  (123.0)         61.7         (61.3) 
Derivative financial 
 instruments                         (0.6)           (0.2)       (0.1)      (8.7)    (9.6)          4.8          (4.8) 
Deferred tax                             -           (1.0)       (2.9)          -    (3.9)          2.0          (1.9) 
Trade and other payables             (4.2)           (1.0)       (2.9)      (0.4)    (8.5)          4.6          (3.9) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Total liabilities                   (77.4)          (24.9)     (163.4)     (33.7)  (299.4)        150.7        (148.7) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Non-controlling interests            (0.1)           (0.3)       (0.3)          -    (0.7)            -          (0.7) 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Net assets/(liabilities)               6.9             2.6       (9.8)      (9.8)   (10.1)          5.0          (5.1) 
Reconciliation to IFRS: 
Elimination of joint 
 venture 
 partners' interests                 (3.5)           (1.4)         5.0        4.9      5.0        (5.0)              - 
Fair value on acquisition 
 of joint venture interest               -               -         0.9          -      0.9            -            0.9 
Loan to joint ventures (4)            12.2             3.9        41.9          -     58.0            -           58.0 
Interest in joint ventures 
 not recognised                          -               -           -        3.3      3.3            -            3.3 
Cumulative losses 
 restricted 
 (5)                                     -               -           -        1.6      1.6            -            1.6 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
Carrying value of 
 interests 
 in joint ventures                    15.6             5.1        38.0          -     58.7            -           58.7 
--------------------------  --------------  --------------  ----------  ---------  -------  -----------  ------------- 
 

(1) Included within administrative costs and other fees of Wichford VBG is the Performance Fee of GBP4.0 million payable to the Group on disposal of the property portfolio.

(2) Presented within 'Net gain on sale of joint venture interests' in the consolidated income statement.

(3) Loans to joint ventures include the opening balance, any advances or repayments and foreign currency movements during the period.

(4) Cumulative losses restricted represent the Group's share of losses in the Esplanade which exceed the cost of the Group's investment. As a result, the carrying value of the investment is GBPNil in accordance with the requirements of IAS 28.

   15.       Investment in associate 
 
                                                          Reviewed     Audited 
                                                       28 February   31 August 
                                                              2017        2016 
                                                              GBPm        GBPm 
----------------------------------------------------  ------------  ---------- 
Opening balance at 1 September                                10.2         8.0 
Additions                                                        -         9.8 
Transfer to investment at fair value through profit 
 or loss (Note 13)                                               -       (3.8) 
Share of post-tax profit from associate                        0.3         1.7 
Distributions from associate                                 (1.1)       (2.3) 
Impairment reversal/(impairment) of investment in 
 associate                                                     0.6       (3.2) 
Carrying value of net investment in associate                 10.0        10.2 
----------------------------------------------------  ------------  ---------- 
 

On 14 October 2015, the Company acquired, by way of private placement, 3.8 million shares in the newly listed IHL for GBP3.8 million. On the date of listing this represented 25.4% of the entity's issued share capital and the investment was classified as an associate on initial recognition. On 20 October 2015, this interest was diluted to 13.2% resulting in reclassification to investment at fair value through profit or loss (refer to Note 13).

On 30 August 2016, the Group settled amounts advanced to RedefineBDL by way of an equity contribution of GBP6.0 million. The equity contribution did not result in a further issue of shares to the Group or increase the Group's percentage interest in the associate. The equity contribution has been recognised in other reserves in the underlying financial statements of RedefineBDL.

During the period ended 28 February 2017, the Group's cumulative investment in RedefineBDL increased from 25.3% to 30.4%. On 7 February 2017, the Group acquired an additional 5.1% interest in RedefineBDL as part consideration (GBP1.3 million) for the settlement of the loan advanced to 4C Investments. This portion of the Group's investment has been classified as held for sale on initial recognition as the shares were acquired exclusively with a view to subsequent re-sale. Refer to Note 18 for further information. The table above presents movements in the Group's existing 25.3% interest in RedefineBDL.

Following an impairment review at 28 February 2017, the Directors consider that the recoverable amount of the Group's net investment in RedefineBDL is consistent with the attributed value at 31 August 2016 of circa GBP10 million. This has resulted in a reversal of the prior year impairment by GBP0.6 million (31 August 2016: impairment charge of GBP3.2 million) as distributions received had exceeded share of earnings.

Distributions from associate for the period ended 28 February 2017 of GBP1.1 million (31 August 2016: GBP2.3 million) comprised cash distributions only (31 August 2016: GBP0.3 million of the GBP2.3 million distributed related to the distribution in specie of 254,084 shares in IHL).

Summarised Financial Information

The summarised financial information of RedefineBDL is set out below.

 
                                                                     Reviewed     Audited 
                                                                  28 February   31 August 
                                                                         2017        2016 
                                                                         GBPm        GBPm 
---------------------------------------------------------------  ------------  ---------- 
Summarised Income Statement 
Revenue                                                                   7.3        12.6 
Other income                                                              1.6         6.3 
Expenses                                                                (6.8)      (10.9) 
---------------------------------------------------------------  ------------  ---------- 
Profit from operations                                                    2.1         8.0 
Taxation                                                                (0.9)       (1.4) 
---------------------------------------------------------------  ------------  ---------- 
Profit for the period                                                     1.2         6.6 
---------------------------------------------------------------  ------------  ---------- 
Elimination of third party interest                                     (0.9)       (4.9) 
---------------------------------------------------------------  ------------  ---------- 
Share of post-tax profit from associate                                   0.3         1.7 
 
Summarised Balance Sheet 
Non-current assets                                                        7.5         7.8 
Intangible asset                                                         28.1        28.1 
Trade and other receivables                                               3.7         6.7 
Cash and cash equivalents                                                 2.6         3.2 
---------------------------------------------------------------  ------------  ---------- 
Total assets                                                             41.9        45.8 
---------------------------------------------------------------  ------------  ---------- 
Current liabilities                                                     (9.6)      (10.6) 
---------------------------------------------------------------  ------------  ---------- 
Total liabilities                                                       (9.6)      (10.6) 
---------------------------------------------------------------  ------------  ---------- 
Net assets                                                               32.3        35.2 
---------------------------------------------------------------  ------------  ---------- 
Elimination of third party interest                                    (24.2)      (26.3) 
---------------------------------------------------------------  ------------  ---------- 
Share of net assets attributable to the Group                             8.1         8.9 
Net contributions attributable to Group less impairment charge            1.9         1.3 
---------------------------------------------------------------  ------------  ---------- 
Carrying value of net investment in associate                            10.0        10.2 
---------------------------------------------------------------  ------------  ---------- 
 
   16.       trade and other receivables 
 
                                                                   Re-presented 
                                                                            (1) 
                                                         Reviewed       Audited 
                                                      28 February     31 August 
                                                             2017          2016 
                                                             GBPm          GBPm 
--------------------------------------------------  -------------  ------------ 
Non-current 
Tenant lease incentives (2)                                   5.3           3.8 
Loans to external parties                                     1.3           0.7 
Letting costs                                                 0.5           0.2 
--------------------------------------------------  -------------  ------------ 
Total non-current trade and other receivables                 7.1           4.7 
--------------------------------------------------  -------------  ------------ 
Current 
Amounts receivable from related parties (Note 29)             0.7          20.0 
Loans to external parties                                     1.6             - 
Rent receivable                                               0.3           1.5 
Prepayments and accrued income                                1.2           1.2 
Tenant lease incentives (2)                                   1.3           0.9 
Other receivables                                             1.6           3.1 
--------------------------------------------------  -------------  ------------ 
Total current trade and other receivables                     6.7          26.7 
--------------------------------------------------  -------------  ------------ 
Total trade and other receivables                            13.8          31.4 
--------------------------------------------------  -------------  ------------ 
 

(1) Prior period trade and other receivables have been re-presented to correctly classify certain receivables as non-current and ensure consistency with the current period. Refer to Note 2.2.

(2) Total tenant lease incentives of GBP6.6 million (31 August 2016: GBP4.7 million) have been deducted from investment property in determining fair value at the balance sheet date. Refer to Note 12.

   17.       cash and cash equivalents 
 
                                             Reviewed     Audited 
                                          28 February   31 August 
                                                 2017        2016 
                                                 GBPm        GBPm 
---------------------------------------  ------------  ---------- 
Bank balances                                    58.4        28.7 
Unrestricted cash and cash equivalents           58.4        28.7 
Restricted cash and cash equivalents              3.3         3.3 
---------------------------------------  ------------  ---------- 
Cash and cash equivalents                        61.7        32.0 
---------------------------------------  ------------  ---------- 
 

At 28 February 2017, cash and cash equivalents to which the Group did not have instant access amounted to GBP3.3 million (31 August 2016: GBP3.3 million). This amount is held with Aviva in relation to the shopping centre developments at Byron Place Seaham, Birchwood Warrington, Weston Favell and proposed developments at Grand Arcade Wigan. The amounts held with Aviva were released subsequent to the balance sheet date as part of the Aviva debt restructure (refer to Note 33).

Cash and cash equivalents at 28 February 2017 were GBP61.7 million (31 August 2016: GBP32.0 million). The Group's share of cash and cash equivalents, including its share of joint venture cash, at 28 February 2017 was GBP63.7 million (31 August 2016: GBP34.3 million), with a further GBP36.6 million undrawn committed facilities available.

   18.       Non-Current assets held for sale 
 
                                           Investment property     Investment   Total 
                                                          GBPm   in associate    GBPm 
                                                                         GBPm 
-----------------------------------------  -------------------  -------------  ------ 
Opening balance at 1 September                               -              -       - 
Transfers from investment property (Note 
 12)                                                      39.7              -    39.7 
Additions of investment in associate                         -            1.3     1.3 
-----------------------------------------  -------------------  -------------  ------ 
Closing balance at 28 February                            39.7            1.3    41.0 
-----------------------------------------  -------------------  -------------  ------ 
 

Investment property held for sale

At 28 February 2017, five investment properties, comprising of one UK Retail property (GBP16.8 million), three UK Commercial offices (GBP17.4 million) and one German supermarket (GBP5.5 million), have been classified as held for sale. Four assets are being actively marketed and management are committed to a plan for their sale. It is considered highly probable that the carrying amount of these four assets will be recovered through a sale transaction, rather than through continuing use, within the next twelve months. The Company completed the disposal of one of these assets, The Observatory, Chatham, post period end (refer to Note 33).

The Company exchanged contracts for the disposal of the fifth asset held for sale, a UK Commercial office in 2 Duchess Place, Edgbaston, on 16 September 2016 for GBP1.6 million. The purchaser has the right to call completion at any point up to 1 April 2018. As there is a firm commitment from the purchaser to acquire the property and from the Company for its disposal, the asset has been classified as held for sale at 28 February 2017.

Investment in associate held for sale

On 7 February 2017, as part of the settlement of the loan outstanding from 4C Investments (refer to Note 29), the Company acquired 659 shares in RedefineBDL for an attributed value of GBP1,942 per share (an approximation of fair value on the date of acquisition). This represented 5.1% of the issued share capital of RedefineBDL. As part of the settlement agreement, 4C Investments has the right to buy back the shares at the transfer price of GBP1.3 million on or before 31 January 2018. If this right is not exercised the remaining shareholders of RedefineBDL will be offered the shares in proportion to their shareholding at the transfer price. It is considered highly probable that the value of the investment will be recovered through re-sale on or before 31 January 2018 and therefore the investment acquired has been classified as held for sale at 28 February 2017. The Directors have determined that the value inherent in the option to reacquire the shares is not material.

The Group considers that all non-current assets held for sale fall within 'Level 3', as defined by IFRS 13 (refer to Note 28). Accordingly, there has been no transfer within the fair value hierarchy during the period.

   19.       borrowings, including Finance Leases 
 
                                                             Reviewed     Audited 
                                                          28 February   31 August 
                                                                 2017        2016 
                                                                 GBPm        GBPm 
-------------------------------------------------------  ------------  ---------- 
Non-current 
Bank loans                                                      723.2       759.8 
Less: unamortised debt issue costs                              (4.4)       (4.1) 
Less: fair value adjustments                                   (18.9)      (19.4) 
Aviva profit share                                                  -         4.2 
Finance leases                                                   14.0        12.3 
-------------------------------------------------------  ------------  ---------- 
Total non-current borrowings, including finance leases          713.9       752.8 
-------------------------------------------------------  ------------  ---------- 
Current 
Bank loans                                                       15.8        13.8 
Less: unamortised debt issue costs                              (0.3)       (1.2) 
Less: fair value adjustments                                    (1.1)       (1.1) 
Other external loans                                              1.0         0.6 
Aviva profit share                                                5.5           - 
Finance leases                                                    0.7         0.7 
Total current borrowings, including finance leases               21.6        12.8 
-------------------------------------------------------  ------------  ---------- 
Total borrowings, including finance leases                      735.5       765.6 
-------------------------------------------------------  ------------  ---------- 
 

Bank loans

 
                                     28 February 2017                 31 August 2016 
                                                            ----------------------------------- 
                                 Carrying  Nominal    Fair            Carrying  Nominal    Fair 
                                    Value    Value   Value               Value    Value   Value 
                                     GBPm     GBPm    GBPm                GBPm     GBPm    GBPm 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
Non-current liabilities 
Bank loans                          723.2    723.2   735.0               759.8    759.8   781.6 
Less: unamortised debt 
 issue costs                        (4.4)        -       -               (4.1)        -       - 
Less: fair value adjustments       (18.9)        -       -              (19.4)        -       - 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
Total non-current bank 
 loans                              699.9    723.2   735.0               736.3    759.8   781.6 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
Current liabilities 
Bank loans                           15.8     15.8    15.8                13.8     13.8    13.8 
Less: unamortised debt 
 issue costs                        (0.3)        -       -               (1.2)        -       - 
Less: fair value adjustments        (1.1)        -       -               (1.1)        -       - 
Total current bank loans             14.4     15.8    15.8                11.5     13.8    13.8 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
Total IFRS bank loans               714.3    739.0   750.8               747.8    773.6   795.4 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
Joint ventures 
Share of joint ventures 
 bank loans                          53.3     53.3    53.3                77.0     77.0    77.0 
Share of joint ventures 
 unamortised debt issue 
 costs                              (0.1)        -       -               (0.2)        -       - 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
Total bank loans (on a 
 proportionately consolidated 
 basis)                             767.5    792.3   804.1               824.6    850.6   872.4 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
Cash and cash equivalents          (61.7)   (61.7)  (61.7)              (32.0)   (32.0)  (32.0) 
Share of joint ventures 
 cash and cash equivalents          (2.0)    (2.0)   (2.0)               (2.3)    (2.3)   (2.3) 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
Net debt (on a proportionately 
 consolidated basis)                703.8    728.6   740.4               790.3    816.3   838.1 
-------------------------------  --------  -------  ------  ------------------  -------  ------ 
 

The table above presents bank loans, cash and cash equivalents and net debt information prepared on a proportionately consolidated basis. This format is not a requirement of IFRS and is presented for informational purposes only as it is used in reports presented to the Group's Chief Operating Decision Maker.

The Group's bank loans are secured over investment property of GBP1,335.3 million (31 August 2016: GBP1,383.0 million) and are carried at amortised cost. On a proportionately consolidated basis, bank loans are secured over investment property of GBP1,435.2 million (31 August 2016: GBP1,523.9 million).

The Group has reduced the nominal value of drawn debt (on a proportionate basis) during the period to GBP792.3 million (31 August 2016: GBP850.6 million) following a number of successful refinancings. Firstly, in November 2016 the facility held against West Orchards Coventry was restructured after the repayment of GBP5.2 million which reduced the balance outstanding to GBP11.9 million and extended maturity to 2021. This was not considered a significant modification and no extinguishment of the existing loan is deemed to have occurred. In December 2016 and January 2017, the Group drew down on funds from the revolving credit facility ("RCF") secured against the AUK portfolio and repaid loans previously held with AIB Group (UK) p.l.c. (GBP5.4 million) and Commerzbank AG (GBP9.7 million). During the six month period ended 28 February 2017, the Group sold four properties secured against the AUK facility and applied GBP30.0 million of sales proceeds against the RCF to maintain a lower interest rate margin of 1.75 per cent (ratcheted based on LTV). As noted in Notes 10 and 14, Wichford VBG disposed of its property-owning subsidiaries including associated bank debt with DG Hyp (Group share: GBP23.5 million), effective 1 January 2017. Other small refinancings have occurred across the portfolio during the period and continue to be negotiated as highlighted in the subsequent events note (refer to Note 33).

The Group considers that all bank loans fall within 'Level 3', as defined by IFRS 13 (refer to Note 28).

The fair value of fixed rate borrowings has been calculated by discounting cash flows under the relevant agreements at a market interest rate for similar debt instruments. The market interest rate has been determined having regard to the term, duration and security arrangements of the relevant loan and an estimation of the current rates charged in the market for similar instruments issued to companies of similar sizes. The nominal value of floating rate borrowings is considered to be a reasonable approximation of fair value.

The maturity of Group bank loans, gross of unamortised debt issue costs and fair value adjustments is as follows:

 
                                      Reviewed     Audited 
                                   28 February   31 August 
                                          2017        2016 
                                          GBPm        GBPm 
--------------------------------  ------------  ---------- 
Non-current 
Between one year and five years          545.3       471.8 
More than five years                     177.9       288.0 
                                         723.2       759.8 
--------------------------------  ------------  ---------- 
Current 
Less than one year                        15.8        13.8 
--------------------------------  ------------  ---------- 
                                          15.8        13.8 
--------------------------------  ------------  ---------- 
 

Certain borrowing agreements contain financial and other covenants that, if contravened, could alter the repayment profile.

Aviva profit share

As part of the Aviva debt restructure in 2013, Aviva retained the right to participate in 50 per cent of the income generated by Grand Arcade Shopping Centre, Wigan (after all costs, expenses and interest). The profit share participation right was recognised as a financial liability, initially at fair value and subsequently measured at amortised cost. At 28 February 2017, the profit share financial liability has been increased by GBP1.3 million to GBP5.5 million (31 August 2016: GBP4.2 million), being the best estimate of the agreed cost to the Company to extinguish Aviva's right to the profit participation. The terms of the Aviva debt restructure have been finalised post period end as detailed in Note 33.

Finance leases

Obligations under finance leases at the reporting date are as follows:

 
                                                               Reviewed     Audited 
                                                            28 February   31 August 
                                                                   2017        2016 
                                                                   GBPm        GBPm 
---------------------------------------------------------  ------------  ---------- 
Minimum lease payments under finance leases obligations: 
Not later than one year                                             0.7         0.7 
Later than one year not later than five years                       3.3         3.0 
Later than five years                                             117.4        88.6 
                                                                  121.4        92.3 
Less: finance charges allocated to future periods               (106.7)      (79.3) 
---------------------------------------------------------  ------------  ---------- 
Present value of minimum lease payments                            14.7        13.0 
---------------------------------------------------------  ------------  ---------- 
 
Present value of minimum finance lease obligations: 
Not later than one year                                             0.7         0.7 
Later than one year not later than five years                       2.8         2.5 
Later than five years                                              11.2         9.8 
Present value of minimum lease payments                            14.7        13.0 
---------------------------------------------------------  ------------  ---------- 
 

Finance lease obligations relate to the Group's leasehold interests in investment property. Finance leases are effectively secured obligations, as the rights to the leased asset revert to the lessor in the event of default.

   20.       derivative financial instruments 

The Group enters into interest rate swap and interest rate cap agreements to manage the risks arising from the Group's operations and its sources of finance.

Interest rate swaps and caps are employed by the Group to manage the interest rate profile of financial liabilities. In accordance with the terms of bank debt arrangements, the Group has entered into interest rate swaps to convert the rates from floating to fixed which has eliminated potential exposure to interest rate fluctuations. Likewise, interest rate caps are used to limit the downside exposure to significant changes to the current low interest rates prevailing in the market.

The Group has also entered into a forward foreign currency option agreement whereby the Group has the right but not the obligation to convert a fixed amount of Euro currency to Sterling quarterly at an agreed rate between 1 November 2016 and 31 August 2017. The fair value of the contract was negligible at 28 February 2017.

It is the Group's policy that no economic trading in derivatives is undertaken.

 
                                           Reviewed     Audited 
                                        28 February   31 August 
                                               2017        2016 
                                               GBPm        GBPm 
-------------------------------------  ------------  ---------- 
Derivative Assets 
Non-current 
Interest rate cap                               0.7         0.8 
Interest rate swaps                             0.2           - 
                                                0.9         0.8 
Derivative Liabilities 
Non-current 
Interest rate swaps                           (8.2)      (12.6) 
                                              (8.2)      (12.6) 
-------------------------------------  ------------  ---------- 
 
Net derivative financial instruments          (7.3)      (11.8) 
-------------------------------------  ------------  ---------- 
 

The Group's interest rate cap asset is at a rate of 3.0 per cent and matures in November 2021. The interest rate swap assets are held at a rate of 0.4 per cent, maturing in September 2020. Interest rate swap liabilities have maturities from January 2019 until April 2021, at a range of swap rates of 0.7 - 2.0 per cent.

   21.       Deferred tax 

The table below presents the recognised deferred tax liability and movement during the period:

 
                                           Fair value of  Accelerated 
                                              investment      capital 
                                                property   allowances  Total 
                                                    GBPm         GBPm   GBPm 
-----------------------------------------  -------------  -----------  ----- 
Opening balance 1 September 2015                     0.6          1.6    2.2 
(Income)/expense for the year recognised 
 in the income statement                           (0.2)          1.4    1.2 
-----------------------------------------  -------------  -----------  ----- 
Opening balance 1 September 2016                     0.4          3.0    3.4 
Expense for the period recognised in the 
 income statement                                    0.2          0.2    0.4 
-----------------------------------------  -------------  -----------  ----- 
Closing balance at 28 February 2017                  0.6          3.2    3.8 
-----------------------------------------  -------------  -----------  ----- 
 

Net deferred tax assets not recognised at 28 February 2017 amounted to GBP0.3 million (31 August 2016: GBP7.3 million).

   22.       trade and other payables 
 
                                Reviewed  Restated (1) 
                             28 February       Audited 
                                    2017     31 August 
                                    GBPm          2016 
                                                  GBPm 
-------------------------  -------------  ------------ 
Rent received in advance             4.4           4.8 
Trade payables                       1.5           0.5 
Accrued interest                     2.5           2.9 
VAT payable                          4.5           4.3 
Accruals                             5.5           3.8 
Other payables                       1.8           5.1 
Trade and other payables            20.2          21.4 
-------------------------  -------------  ------------ 
 

(1) Current tax liabilities of GBP2.4 million that were previously presented within trade and other payables at 31 August 2016 have been separately presented on the face of the consolidated balance sheet. Refer to Note 2.2.

   23.       share capital and share premium 
 
Authorised                                                             Authorised 
                                                        Number of   Share Capital 
                                                           Shares            GBPm 
--------------------------------------------------  -------------  -------------- 
- At 31 August 2016 (Ordinary shares of 8 pence 
 each)                                              3,000,000,000           240.0 
- At 28 February 2017 (Ordinary shares of 8 pence 
 each)                                              3,000,000,000           240.0 
--------------------------------------------------  -------------  -------------- 
 
 
Issued, Called Up and Fully Paid                               Share     Share 
                                                             capital   premium 
                                          Number of Shares      GBPm      GBPm 
---------------------------------------  -----------------  --------  -------- 
At 31 August 2015                            1,474,331,331     117.9     395.0 
Scrip dividend - issued December 2015           21,235,556       1.7       9.5 
Share placement - issued February 2016         270,588,236      21.7      87.4 
Scrip dividend - issued June 2016               28,443,527       2.3      10.2 
                                         -----------------  --------  -------- 
At 31 August 2016                            1,794,598,650     143.6     502.1 
Scrip dividend - issued December 2016           17,141,172       1.3       5.3 
                                         -----------------  --------  -------- 
At 28 February 2017                          1,811,739,822     144.9     507.4 
---------------------------------------  -----------------  --------  -------- 
 

Share capital and Share premium

In October 2015, the Company declared a second interim dividend of 1.65 pence per share for the six months ended August 2015 and offered shareholders an election to receive either a cash dividend or a scrip dividend by way of an issue of new Redefine International shares credited as fully paid up. The Company received election forms from shareholders holding 699.1 million ordinary shares of 8 pence each representing a 47 per cent take up by shareholders, in respect of which 21.2 million scrip dividend shares were issued in December 2015.

In February 2016, the Company completed a placing of 270.6 million new ordinary shares of 8 pence each for an aggregate nominal value of GBP21.7 million. The placing generated proceeds of GBP109.1 million (net of costs).

In April 2016, the Company declared an interim dividend of 1.625 pence per share for the six months ended 29 February 2016 and offered shareholders an election to receive either a cash dividend or a scrip dividend by way of an issue of new Redefine International shares credited as fully paid up. The Company received election forms from shareholders holding 907.4 million ordinary shares of 8 pence each representing a 51 per cent take up by shareholders, in respect of which 28.4 million scrip dividend shares were issued in June 2016.

In October 2016, the Company declared a second interim dividend of 1.575 pence per share for the six months ended 31 August 2016 and offered shareholders an election to receive either a cash dividend or a scrip dividend by way of an issue of new Redefine International shares credited as fully paid up. The Company received election forms from shareholders holding 489.1 million ordinary shares of 8 pence each representing a 27.3 per cent take up by shareholders, in respect of which 17.1 million scrip dividend shares were issued in December 2016.

   24.       RESERVES 

Reverse acquisition reserve

The reverse acquisition reserve of GBP134.3 million arose on the reverse acquisition of Wichford P.L.C. (subsequently renamed Redefine International) by Redefine International Holdings Limited ("RIHL") and comprises the difference between the capital structure of the Company and RIHL.

Other Reserves

Share-Based Payment Reserve

The share-based payment reserve at 28 February 2017 of GBP2.7 million (31 August 2016: GBP2.2 million) arises from conditional awards of shares in the Company made to certain employees and the Executive Directors. The awards will vest on the third anniversary of grant, subject to certain performance conditions.

Other Reserves

Other reserves of GBP1.0 million (31 August 2016: GBP1.0 million) arose from the acquisition of subsidiaries.

Foreign Currency Translation Reserve

The foreign currency translation reserve at 28 February 2017 of GBP11.1 million (31 August 2016: GBP10.8 million) represents exchange differences arising from the translation of the net investment in foreign operations. GBP2.2 million cumulative translation was transferred to the income statement during the period on disposal of joint venture interests (31 August 2016: GBP3.6 million on disposal of subsidiary).

   25.       Non - controlling Interests 
 
                                                         Reviewed     Audited 
                                                      28 February   31 August 
                                                             2017        2016 
                                                             GBPm        GBPm 
---------------------------------------------------  ------------  ---------- 
Opening balance at 1 September                               33.6        38.8 
Comprehensive income/(expense) for the year: 
Profit/(loss) for the period attributable to 
 non-controlling interest                                     0.2       (0.4) 
Foreign currency translation on subsidiary foreign 
 operations                                                     -         0.7 
Changes in ownership interest in subsidiaries: 
Acquisition of non-controlling interest (Note 
 26)                                                       (12.7)       (2.1) 
Repayment of non-controlling interest shareholder 
 loans                                                          -       (0.1) 
Reclassification of non-controlling interest 
 shareholder loans to liabilities                           (0.3)       (1.1) 
Dividends paid to non-controlling interest                  (0.6)       (2.2) 
---------------------------------------------------  ------------  ---------- 
Total non-controlling interests                              20.2        33.6 
---------------------------------------------------  ------------  ---------- 
 

The following table summarises the financial information relating to the Group's only subsidiary that has a material NCI, RHHL, before any intra-group eliminations.

 
                                                                                         Re-presented 
                                       Reviewed 28 February 2017                     Audited 31 August 2016 
-----------------------------  ------------------------------------------  ----------------------------------------- 
                                 Redefine         Other             Total   Redefine         Other             Total 
                                    Hotel  individually   non-controlling      Hotel  individually   non-controlling 
                                 Holdings    immaterial          interest   Holdings    immaterial          interest 
                                  Limited  subsidiaries              GBPm    Limited  subsidiaries              GBPm 
                                     GBPm          GBPm                         GBPm          GBPm 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
                                   United                                     United 
Principal place of business       Kingdom                                    Kingdom 
Country of incorporation              BVI                                        BVI 
NCI %                              17.52%                                     28.95% 
Summarised balance sheet 
Investment property and other 
 non-current assets                 215.1                                      216.2 
Current assets                        9.8                                        7.0 
Non-current liabilities           (111.2)                                    (109.9) 
Current liabilities                 (1.5)                                      (1.7) 
Elimination of tax paid 
 wholly attributable NCI              0.6                                        0.4 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
Adjusted net assets                 112.8                                      112.0 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
NCI share of adjusted net 
 assets                              19.8                                       32.4 
Tax attributable to NCI             (0.6)                                      (0.4) 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
Carrying amount of NCI               19.2           1.0              20.2       32.0           1.6              33.6 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
 
Summarised statement of 
comprehensive income 
Revenue                               7.0                                       14.7 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
Profit/(loss) for the year            2.8                                      (0.7) 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
Profit/(loss) attributable to 
 NCI (1)                              0.5         (0.3)               0.2      (0.6)           0.2             (0.4) 
Other comprehensive income 
 attributable to NCI                    -             -                 -          -           0.7               0.7 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
Dividends paid to NCI                 0.5           0.1               0.6        1.8           0.4               2.2 
 
Summarised cash flow 
statement 
Cash inflow from operating 
 activities                           5.6                                       10.5 
Cash outflow from investing 
 activities                         (1.4)                                      (0.9) 
Cash outflow from financing 
 activities                         (0.7)                                      (7.8) 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
Net increase in cash and cash 
 equivalents                          3.5                                        1.8 
-----------------------------  ----------  ------------  ----------------  ---------  ------------  ---------------- 
 
 

(1) Profit/(loss) attributable to NCI includes a non-resident landlord tax charge of GBP0.5 million (31 August 2016: GBP0.4m) which is fully attributable to the minority shareholders of RHHL. The cumulative tax attributable to the remaining 17.52% minority shareholder in RHHL for 2016 and 2017 is GBP0.6m.

   26.       TRANSACTIONS WITH non--controlling interests 

On 1 June 2016, Ciref Europe Limited, a subsidiary of the Group, acquired the non-controlling interests in its subsidiaries CEL Portfolio 1 Ltd & Co. KG and Chelvey Holdings Limited, of 20.0% and 33.0% respectively, from Ellis Ventures Limited. Consideration for this transaction was GBP2.3 million (EUR2.7 million) including the acquisition of shareholder loans for GBP1.9 million (EUR2.2 million). A loss on acquisition of non-controlling interest of GBP0.2 million was recognised directly in equity.

At 31 August 2016, 4C Investments was a non-controlling shareholder of RHHL with an 11.43% equity interest (1,938 shares) in the issued share capital. The Company had a loan balance outstanding from 4C Investments (refer to Note 29), for which a share charge was created in favour of the Company over 4C Investment's entire shareholding in RHHL. The total loan balance outstanding, of both principal and interest, was GBP14.2 million on maturity at 31 December 2016. In the absence of repayment, the Company exercised its security over the shares. On 7 February 2017, the 1,938 shares formally transferred to the Company for an agreed transfer price of GBP6,295 per share, valuing the total shareholding at GBP12.1 million. The carrying value of the non-controlling interest on transfer was GBP12.7 million and, as a result, a gain of GBP0.6 million has been recognised directly in equity.

4C Investments has the right to reacquire the RHH shares on or before 31 January 2018 at the transfer price of GBP12.1 million. The exercise of this right is considered improbable however and the Directors are satisfied that there is no material value attributable to the option. The other non-controlling interest has formally waived the pre-emptive right to acquire its relative proportion of the shares on 31 January 2018. Dividends from these shares are payable to the Company on transfer and 4C Investments has no representation on the Board of RHHL in the intervening period.

 
                                                                                 Reviewed                Audited 
                                                                              28 February              31 August 
                                                                                     2017                   2016 
                                                                                     GBPm                   GBPm 
Carrying amount of non-controlling interest acquired                                 12.7                    2.1 
Consideration paid to non-controlling interest                                          -                  (2.3) 
Transfer value attributed to non-controlling interest                              (12.1)                      - 
---------------------------------------------------------------------------  ------------  --------------------- 
Increase/(decrease) in equity attributable to equity holders of the Parent            0.6                  (0.2) 
---------------------------------------------------------------------------  ------------  --------------------- 
 
   27.       cash GENERATED FROM OPERATIONS 
 
                                                                   Re-presented 
                                                         Reviewed      Reviewed     Audited 
                                                      28 February   29 February   31 August 
                                                             2017          2016        2016 
Continuing operations                          Note          GBPm          GBPm        GBPm 
---------------------------------------------  ----  ------------  ------------  ---------- 
Cash flows from operating activities 
Profit before tax                                            42.0           8.4         8.6 
Adjustments for: 
Straight lining of rental income                            (0.8)           0.2       (1.5) 
Depreciation                                                    -           0.1           - 
(Gain)/loss on revaluation of investment 
 property                                                   (2.6)          17.3        42.5 
Gain on disposal of investment property                     (5.9)         (3.4)       (3.2) 
Gain on disposal of subsidiary                    7             -             -      (12.2) 
Distributions from investment at fair 
 value                                                          -             -       (0.5) 
(Gain)/loss on revaluation of investment 
 at fair value                                              (1.0)         (1.0)         0.8 
Amortisation of intangible asset                              0.1           0.1         0.2 
Gain on disposal of non-current assets 
 held for sale                                                  -         (0.2)       (0.2) 
Foreign exchange gain                                           -         (2.7)       (0.9) 
Net finance expense                               8          11.6          12.2        26.4 
Other finance expenses                            9           1.5           0.8         1.9 
Change in fair value of derivative financial 
 instruments                                                (4.4)           2.5        11.1 
Net gain on sale of joint venture interests      10         (5.0)             -           - 
Net (impairment reversal)/impairment 
 of joint ventures and associate interests                  (0.7)           0.7         0.6 
Share of post-tax loss/(profit) from 
 joint ventures                                               2.6           0.3       (1.4) 
Share of post-tax profit from associate                     (0.3)         (1.2)       (1.7) 
Fair value of share-based payments                6           0.5           0.5         1.2 
                                                             37.6          34.6        71.7 
Changes in working capital                                    3.1         (3.1)       (2.5) 
---------------------------------------------  ----  ------------  ------------  ---------- 
Cash generated from operations                               40.7          31.5        69.2 
---------------------------------------------  ----  ------------  ------------  ---------- 
 
   28.       fair value of Financial Instruments 

basis for determining fair values

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements.

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments, the Group determines fair values using net present value and discounted cash flow models and comparisons to similar instruments for which market observable prices exist. Assumptions and inputs used in valuation techniques include risk-free and benchmark interest rates, credit spreads and other premia used in estimating discount rates, foreign currency exchange rates and expected price volatilities and correlations. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of the financial instrument at the reporting date that would have been determined by market participants acting at arm's length.

The Group uses widely recognised valuation models for determining the fair value of common and more simple financial instruments such as interest rate swaps and caps that use only observable market data and require little management judgement and estimation. Observable prices and model inputs are usually available in the market for simple over the counter derivatives, e.g. interest rate swaps. Availability of observable market prices and model inputs reduces the need for management judgement and estimation and also reduces the uncertainty associated with determination of fair values. Availability of observable market prices and inputs varies depending on the products and markets and is prone to changes based on specific events and general conditions in the financial markets.

The tables below present information about the Group's financial assets and liabilities measured at fair value as of 28 February 2017 and 31 August 2016.

 
                                      Level 1   Level 2   Level 3        Total 
                                         GBPm      GBPm      GBPm   Fair Value 
                                                                          GBPm 
-----------------------------------  --------  --------  --------  ----------- 
28 February 2017 
Financial assets 
Investment at fair value (Note 13)        9.8         -         -          9.8 
Derivative financial assets (Note 
 20)                                        -       0.9         -          0.9 
-----------------------------------  --------  --------  --------  ----------- 
                                          9.8       0.9         -         10.7 
-----------------------------------  --------  --------  --------  ----------- 
Financial liabilities 
Derivative financial liabilities 
 (Note 20)                                  -     (8.2)         -        (8.2) 
-----------------------------------  --------  --------  --------  ----------- 
                                            -     (8.2)         -        (8.2) 
-----------------------------------  --------  --------  --------  ----------- 
31 August 2016 
Financial assets 
Investment at fair value (Note 13)        7.9         -         -          7.9 
Derivative financial assets (Note 
 20)                                        -       0.8         -          0.8 
-----------------------------------  --------  --------  --------  ----------- 
                                          7.9       0.8         -          8.7 
-----------------------------------  --------  --------  --------  ----------- 
Financial liabilities 
Derivative financial liabilities 
 (Note 20)                                  -    (12.6)         -       (12.6) 
-----------------------------------  --------  --------  --------  ----------- 
                                            -    (12.6)         -       (12.6) 
-----------------------------------  --------  --------  --------  ----------- 
 

No financial instruments were transferred between levels during the period.

The investment in IHL has been categorised as a Level 1 investment and priced using quoted prices in an active market; the AltX of the JSE. Derivative financial instruments have been categorised as Level 2 as although they are priced using directly observable inputs, the instruments are not traded in an active market.

As stated in Note 12, 18 and 19 respectively, the Group considers investment property, non-current assets held for sale and loan borrowings to be categorised as Level 3.

The carrying values of loans to joint ventures, trade and other receivables, cash and cash equivalents, finance leases and trade and other payables are considered to be a reasonable approximation of fair value.

   29.       related party transactions 

Related parties of the Group include: associate undertakings; joint ventures; Directors and key management personnel; connected parties; the major Shareholder Redefine Properties Limited ("RPL"); as well as entities connected through common directorships.

 
                                                                Reviewed     Audited 
                                                             28 February   31 August 
                                                                    2017        2016 
                                                                    GBPm        GBPm 
----------------------------------------------------------  ------------  ---------- 
Related Party Transactions 
----------------------------------------------------------  ------------  ---------- 
Revenue Transactions 
Rental income 
RedefineBDL                                                          7.0        14.7 
----------------------------------------------------------  ------------  ---------- 
 
Other income 
International Hotel Properties Limited                                 -         0.3 
 
Joint Ventures 
Leopard Portfolio                                                    0.3         0.5 
Wichford VBG Holding S.à.r.l. (including Performance 
 Fee of GBP4.0 million)                                              4.1         0.1 
RI Menora German Holdings S.à.r.l.                                -         0.1 
                                                                     4.4         1.0 
Distributions from investments at fair value 
International Hotel Properties Limited                                 -         0.5 
----------------------------------------------------------  ------------  ---------- 
 
Finance income 
Joint Ventures 
Leopard Portfolio                                                    1.5         2.6 
Wichford VBG Holding S.à.r.l.                                   0.8         2.2 
RI Menora German Holdings S.à.r.l.                              0.1         0.2 
 
International Hotel Properties Limited                                 -         0.1 
4C UK Investments Limited                                            0.5         1.0 
                                                                     2.9         6.1 
Capital Transactions 
Investment property (capitalised expenditure) 
Project monitoring fee to RedefineBDL - construction 
 works                                                                 -         0.3 
----------------------------------------------------------  ------------  ---------- 
 
Investment at fair value through profit or loss 
International Hotel Properties Limited (shares acquired 
 at cost)                                                            9.7         8.7 
 
Investment in associate 
Acquisition of 4C UK Investments Limited's interests 
 in RedefineBDL                                                      1.3           - 
Capital contribution to RedefineBDL                                    -         6.0 
Dividends received from RedefineBDL                                (1.1)       (2.3) 
----------------------------------------------------------  ------------  ---------- 
 
Non-controlling interests 
Acquisition of 4C UK Investments Limited's interests 
 in RHHL                                                            12.1           - 
----------------------------------------------------------  ------------  ---------- 
 
Related Party Balances 
----------------------------------------------------------  ------------  ---------- 
Loans to joint ventures 
Leopard Portfolio                                                   36.7        36.8 
Wichford VBG Holding S.à.r.l.                                     -        12.2 
RI Menora German Holdings S.à.r.l.                              3.8         3.9 
----------------------------------------------------------  ------------  ---------- 
                                                                    40.5        52.9 
Trade and other receivables 
Leopard Portfolio                                                    0.5         1.9 
Wichford VBG Holding S.à.r.l.                                     -         1.7 
4C UK Investments Limited                                              -        14.2 
RedefineBDL                                                          0.2         1.7 
International Hotel Properties Limited                                 -         0.5 
                                                                     0.7        20.0 
Related Party Transactions with equity holders of 
 the Parent 
Redefine Properties Limited - capital raise                            -        34.6 
Redefine Properties Limited - underwriting fee                         -         2.5 
Redefine Properties Limited - cash dividends                         8.5         8.0 
Redefine Properties Limited - scrip dividends                          -         8.0 
----------------------------------------------------------  ------------  ---------- 
 

4C UK Investments Limited

On 7 February 2017, the Company exercised its security against a loan extended to 4C Investments. In settlement of the GBP14.2 million balance outstanding, the following investments were transferred to the Group:

- 4C Investments non-controlling interest in RHHL for a transfer price of GBP12.1 million (Note 26)

   -       4C Investments shareholding in RedefineBDL for a transfer price of GBP1.3 million (Note 18) 
   -       4C Investments shareholding in IHL for a transfer price of GBP1.0 million (Note 13) 

As the total transfer price for the shares was GBP14.4 million, GBP0.2 million cash was paid back by the Company to 4C Investments. The treatment on initial recognition of the transferred shares is explained in the referenced notes.

On the same date, the Company entered into a lock-up agreement with 4C Investments whereby the latter has the right to buy back the transferred shares in RHHL and RedefineBDL on or before 31 January 2018 at the transfer price. Under the terms of the lock-up agreement:

   -       the Company cannot dispose of the transferred shares; 
   -       4C Investments must be notified of material transactions; and 
   -       any dividends declared by RHHL and RedefineBDL will be payable to the Company. 

4C Investments is controlled by Bashir Nathoo. Bashir Nathoo was a Director of RHHL and RedefineBDL. Bashir Nathoo resigned from his directorships with immediate effect on transfer of the shares.

Redefine Properties Limited

During the year ended 31 August 2016, the Group paid Redefine Properties a fee of GBP2.5 million in consideration for the financial guarantee to support the AUK Portfolio acquisition by underwriting up to GBP70.0 million in the capital raise. On completion, Redefine Properties was allocated 81,373,179 shares, representing 30.07% of the total placing and this equated to an aggregate amount of GBP34.6 million of the total funds raised.

At 28 February 2017, Redefine Properties held a 29.79% interest in the issued share capital of the Company.

Directors

Non-executive Directors and Executive Directors represent key management personnel. The remuneration paid to Non-executive Directors for the period ended 28 February 2017 was GBP0.3 million (29 February 2016: GBP0.2 million) which represents Directors fees only. The remuneration paid to Executive Directors for the period ended 28 February 2017 was GBP1.3 million (29 February 2016: GBP1.2 million), representing salaries, benefits and bonuses. 4.9 million contingent share awards were issued to Executive Directors during the period (29 February 2016: 5.0 million). The share-based payment charge associated with the cumulative contingent share awards outstanding was GBP0.5 million (29 February 2016: GBP0.5 million) for the period.

Certain Directors acquired shares on 27 February 2017 as follows:

 
                            Number of        Price per 
                      ordinary shares   ordinary share 
 Name                        acquired         acquired 
------------------   ----------------  --------------- 
Stephen Oakenfull              50,000           36.57p 
Adrian Horsburgh               50,000           36.45p 
Donald Grant                   50,000           36.32p 
-------------------  ----------------  --------------- 
 

Certain Directors participated in the February 2016 share placing as follows:

 
                    Number of         Number of      Percentage 
                      placing   ordinary shares     of enlarged 
                       shares           held on   share capital 
 Name                                 admission             (%) 
-----------------  ----------  ----------------  -------------- 
Mike Watters          352,941         6,515,638            0.37 
Adrian Horsburgh       10,000            10,000            0.00 
Robert Orr             23,529            23,529            0.00 
Gavin Tipper          100,000           508,630            0.03 
Marc Wainer           195,000         1,676,545            0.09 
-----------------  ----------  ----------------  -------------- 
 
   30.       earnings per share 

Earnings per share is calculated on the weighted average number of shares in issue and the profit attributable to shareholders.

 
                                                     Reviewed      Reviewed     Audited 
                                                  28 February   29 February   31 August 
                                                         2017          2016        2016 
                                                         GBPm          GBPm        GBPm 
-----------------------------------------------  ------------  ------------  ---------- 
Profit attributable to equity holders of 
 the Parent                                              40.8           6.8         7.9 
Group Adjustments: 
(Gain)/loss on revaluation of investment 
 property                                               (2.6)          17.3        42.5 
Gain on disposal of investment property                 (5.9)         (3.4)       (3.2) 
Gain on disposal of subsidiary                              -             -      (12.2) 
(Gain)/loss on revaluation of investment 
 at fair value                                          (1.0)         (1.0)         0.8 
Amortisation of intangible assets                         0.1           0.1         0.2 
Gain on disposal of non-current asset held 
 for sale                                                   -         (0.2)       (0.2) 
Re-measurement of financial liability                     1.3             -           - 
Refinancing costs                                         0.2           0.1         0.2 
Change in fair value of derivative financial 
 instruments                                            (4.4)           2.5        11.1 
Gain on sale of joint venture interests                 (5.2)             -           - 
Impairment reversal of investment in associate          (0.6)             -           - 
Capital gains tax refund on disposal of 
 Swiss properties                                           -         (1.1)       (1.4) 
Deferred tax adjustments                                  0.4           0.8         1.2 
Joint Venture Adjustments: 
Loss/(gain) on revaluation of investment 
 property                                                 0.6           0.5       (1.3) 
Loss on sale of subsidiaries                              0.2             -           - 
Change in fair value of derivative financial 
 instruments                                            (0.9)           1.4         1.7 
Deferred tax adjustments                                  0.7           0.1         0.3 
Elimination of joint venture unrecognised 
 losses (1)                                               0.8         (0.8)       (1.2) 
Non-Controlling Interest Adjustments: 
Loss on revaluation of investment property              (0.8)         (0.1)       (2.2) 
Change in fair value of derivative financial 
 instruments                                                -           0.1       (0.1) 
Impairment reversal of investment in associate            0.1             -           - 
EPRA earnings                                            23.8          23.1        44.1 
Adjustments: 
Accretion of fair value adjustments                       0.5           1.1         3.1 
Foreign exchange gain                                       -         (2.7)       (0.9) 
Underlying earnings (re-based)                           24.3          21.5        46.3 
Discontinued Company adjustments                            -           3.9         5.9 
Distributable earnings                                   24.3          25.4        52.2 
 
Number of ordinary shares 
 - Weighted average                                   1,802.0       1,493.4     1,637.2 
 - Diluted weighted average                           1,804.4       1,494.8     1,637.9 
-----------------------------------------------  ------------  ------------  ---------- 
 
Earnings per share (pence) 
 - Basic                                                 2.3p          0.5p        0.5p 
 - Diluted                                               2.3p          0.5p        0.5p 
 
EPRA earnings per share (pence)                          1.3p          1.5p        2.7p 
Diluted EPRA earnings per share (pence)                  1.3p          1.5p        2.7p 
 
Underlying earnings per share (re-based) 
 (2)                                                    1.35p         1.40p       2.80p 
 
Distributable earnings per share (pence)                1.35p         1.70p       3.20p 
 
Dividend per share (pence)                              1.30p        1.625p       3.20p 
First interim dividend per share (pence)                1.30p        1.625p      1.625p 
Second interim dividend per share (pence)                   -             -      1.575p 
-----------------------------------------------  ------------  ------------  ---------- 
 

(1) As per Note 14, the Group has ceased to recognise the Esplanade in the IFRS statements as the cumulative losses of the joint venture exceed the cost of the Group's investment. This adjustment eliminates the restricted losses for the period attributable to the Esplanade.

(2) The calculation of underlying earnings was revised during the six months ended 28 February 2017 to align to the EPRA earnings metric as adjusted for foreign exchange and debt fair value movements only. The Directors consider this to be a more appropriate measure of recurring earnings that provides better alignment with operational cash flow. Additional distributable and other non-recurring adjustments made in the prior periods have now been discontinued and are presented on an aggregate basis within 'Discontinued Company adjustments' above. The calculation of prior period re-based underlying earnings has been disclosed for informational and comparative purposes.

Headline earnings per share is calculated in accordance with Circular 2/2015 issued by the South African Institute of Chartered Accountants ("SAICA"), a requirement of the Group's JSE listing. This measure is not a requirement of IFRS.

 
                                                 Reviewed      Reviewed     Audited 
                                              28 February   29 February   31 August 
                                                     2017          2016        2016 
                                                     GBPm          GBPm        GBPm 
-------------------------------------------  ------------  ------------  ---------- 
Profit attributable to equity holders of 
 the Parent                                          40.8           6.8         7.9 
Group Adjustments: 
(Gain)/loss on revaluation of investment 
 property                                           (2.6)          17.3        42.5 
Gain on disposal of investment property             (5.9)         (3.4)       (3.2) 
Gain on disposal of subsidiary                          -             -      (12.2) 
Gain on disposal of non-current assets 
 held for sale                                          -         (0.2)       (0.2) 
Gain on sale of joint venture interests             (5.2)             -           - 
Deferred tax                                          0.4           0.6         1.2 
Joint Venture Adjustments: 
Loss/(gain) on revaluation of investment 
 property                                             0.6           0.5       (1.3) 
Loss on sale of subsidiaries                          0.2             -           - 
Deferred tax                                          0.7           0.1         0.3 
Elimination of joint venture unrecognised 
 losses (1)                                           0.1         (0.1)       (0.2) 
Non-Controlling Interest Adjustments: 
Loss on revaluation of investment property          (0.8)         (0.1)       (2.2) 
Headline earnings attributable to equity 
 holders of the Parent                               28.3          21.5        32.6 
 
Number of ordinary shares 
 - Weighted average                               1,802.0       1,493.4     1,637.2 
 - Diluted weighted average                       1,804.4       1,494.8     1,637.9 
-------------------------------------------  ------------  ------------  ---------- 
 
Headline earnings per share (pence) 
 - Basic                                             1.6p          1.4p        2.0p 
 - Diluted                                           1.6p          1.4p        2.0p 
-------------------------------------------  ------------  ------------  ---------- 
 

(1) As per Note 14, the Group has ceased to recognise the Esplanade in the IFRS statements as the cumulative losses of the joint venture exceed the cost of the Group's investment. This adjustment eliminates the restricted losses for the period attributable to the Esplanade.

   31.       net asset value per share 
 
                                                       Reviewed     Audited 
                                                    28 February   31 August 
                                                           2017        2016 
                                                           GBPm        GBPm 
-------------------------------------------------  ------------  ---------- 
Net assets attributable to equity holders of the 
 Parent                                                   720.4       699.8 
Group Adjustments: 
Fair value of derivative financial instruments              7.3        11.8 
Deferred tax adjustments                                    3.8         3.4 
Joint Venture Adjustments: 
Fair value of derivative financial instruments              3.8         4.7 
Elimination of unrecognised derivative financial 
 instruments (1)                                          (3.7)       (4.3) 
Deferred tax adjustments                                    1.9         1.9 
Non-Controlling Interest Adjustments: 
Fair value of derivative financial instruments              0.1         0.2 
Deferred tax adjustments                                      -       (0.1) 
EPRA NAV                                                  733.6       717.4 
Group Adjustments: 
Fair value of derivative financial instruments            (7.3)      (11.8) 
Excess of fair value of debt over carrying value         (31.8)      (42.4) 
Deferred tax adjustments                                  (3.8)       (3.4) 
Joint Venture Adjustments: 
Fair value of derivative financial instruments            (3.8)       (4.7) 
Elimination of unrecognised derivative financial 
 instruments (1)                                            3.7         4.3 
Deferred tax adjustments                                  (1.9)       (1.9) 
Non-Controlling Interest Adjustments: 
Fair value of derivative financial instruments            (0.1)       (0.2) 
Deferred tax adjustments                                      -         0.1 
-------------------------------------------------  ------------  ---------- 
EPRA NNNAV                                                688.6       657.4 
 
Number of ordinary shares 
 - In issue                                             1,811.7     1,794.6 
 - Diluted                                              1,814.2     1,795.4 
-------------------------------------------------  ------------  ---------- 
Net asset value per share (pence): 
 - Basic                                                  39.8p       39.0p 
 - Diluted                                                39.7p       39.0p 
 
EPRA diluted NAV per share (pence)                        40.4p       40.0p 
EPRA diluted NNNAV per share (pence)                      38.0p       36.6p 
-------------------------------------------------  ------------  ---------- 
 

(1) As per Note 14, the Group has ceased to recognise the Esplanade in the IFRS statements as the cumulative losses of the joint venture exceed the cost of the Group's investment. This adjustment eliminates the derivative financial instruments attributable to the Esplanade from the proportionate adjustments.

   32.       contingencies, guarantees and commitments 

At 28 February 2017, the Group was contractually committed to expenditure of GBP13.4 million (31 August 2016: GBP15.8 million), of which GBP12.3 million was committed to the future development and enhancement of investment property.

   33.       SUBSEQUENT events 

On 28 March 2017, the Group disposed of its investment property at The Observatory, Chatham for GBP4.0 million. The carrying value of the property at the date of disposal was GBP3.6 million.

On 7 April 2017, the Group reached a conditional agreement to acquire the controlling interest in the Leopard Portfolio which is currently held as a joint venture with Redefine Properties. Redefine Properties is the majority shareholder of Redefine International P.L.C. and, due to the related party nature of the transaction, shareholder approval was sought and subsequently received on 25 April 2017. The transaction, which completes today, took effect from 1 March 2017 and resulted in aggregate consideration paid of EUR49.0 million, EUR0.3 million with respect to the equity interest acquired and EUR48.7 million in respect of the shareholder loans acquired. The net asset value of the portfolio at 28 February 2017, adjusted to reflect shareholder loans, was EUR86.3 million (EUR43.2 million being attributed to Redefine Properties).

On 10 April 2017, the Group refinanced GBP167.8 million of existing debt facilities secured over four of its UK Shopping Centre assets with Aviva. Following a repayment of GBP21.7 million, the four facilities were amalgamated into one facility carrying a fixed rate of interest of 5.52 per cent (previous range: 5.7 per cent - 6.4 per cent). In addition, following a payment of GBP5.5 million, the Group terminated the historic profit and capital appreciation arrangement with Aviva in respect to the Grand Arcade, Wigan.

On 25 April 2017, the Group formally agreed a refinancing of its HSH Nordbank facility, secured over CMC Shopping Center Altona, Hamburg. The refinancing will take effect from 28 April 2017 with the facility will be extended to February 2024. Following a prepayment of EUR6.5 million, the nominal value of debt outstanding under the facility was reduced to EUR45.0 million.

GLOSSARY

 
Annualised gross         Annualised gross rent generated by the asset at the 
 rental income            balance sheet date, which is made up of the contracted 
                          rent, including units that are in rent-free periods, 
                          and estimates of turnover rent. 
-----------------------  --------------------------------------------------------------- 
AUK                      Aegon UK property portfolio 
----------------------- 
Aviva                    Aviva Commercial Finance Limited 
----------------------- 
Board                    The Board of Directors of Redefine International P.L.C. 
Brexit / Article         Article 50 of the Lisbon Treaty gives any European Union 
 50                       member the right to withdraw from the EU and outlines 
                          the procedure for doing so. On 29 March 2017, Article 
                          50 was triggered by the UK Government following the 
                          vote to leave in June 2016 (the "EU Referendum") which 
                          is colloquially referred to as Brexit, and must be concluded 
                          by March 2019. 
BVI                      British Virgin Islands 
Discontinued Company     Items previously added back to distributable earnings, 
 adjustments              for example, debt issue costs and share based payment 
                          charges. 
EBITDA                   Earnings Before Interest, Tax, Depreciation and Amortisation 
----------------------- 
EPRA                     European Public Real Estate Association 
----------------------- 
EPRA earnings            Earnings from operational activities as defined by EPRA's 
                          Best Practice guidelines 
----------------------- 
EPRA NAV                 European Public Real Estate Association Net Asset Value 
----------------------- 
EPRA NIY                 European Public Real Estate Association Net Initial 
                          Yield. The annualised rental income based on the cash 
                          rents passing at the balance sheet date, less non-recoverable 
                          property operating expenses, divided by the gross market 
                          value of the property. 
----------------------- 
EPRA NNNAV               European Public Real Estate Association Triple Net Asset 
                          Value 
----------------------- 
EPRA topped-up initial   Net initial yield adjusted for the expiration of rent 
 yield                    free periods or other incentives. 
----------------------- 
EPRA voids               Voids are expressed as a percentage of ERV and represent 
                          a measure of unlet space 
----------------------- 
EPS                      Earnings per share 
----------------------- 
ERV                      The estimated market rental value of lettable space 
                          which could reasonably be expected to be obtained on 
                          a new letting or rent review. 
----------------------- 
EU                       European Union 
----------------------- 
EUR or Euro              Euro, the lawful common currency of participating member 
                          states of the European Monetary Union. 
----------------------- 
GBP, Pound or Sterling   Great British Pound, the legal currency of the UK 
----------------------- 
IASB                     International Accounting Standards Board 
----------------------- 
IFRS                     International Financial Reporting Standards 
----------------------- 
IHL                      International Hotel Properties Limited (formerly: International 
                          Hotel Group Limited) 
----------------------- 
Indexed leases           A lease with rent review provisions which are dependent 
                          upon calculations with reference to an index such as 
                          the consumer price index or the retail price index 
----------------------- 
IPD                      Investment Property Databank 
----------------------- 
IRR                      Internal rate of return 
----------------------- 
JSE                      JSE Limited, licensed as an exchange and a public company 
                          incorporated under the laws of South Africa and the 
                          operator of the Johannesburg Stock Exchange. 
----------------------- 
Lease incentives         Any incentives offered to occupiers to enter into a 
                          lease. Typically, the incentive will be an initial rent-free 
                          period, or a cash contribution to fit out or similar 
                          costs. 
----------------------- 
Like-for-like income     Income generated by assets which were held by the Group 
                          throughout both the current and comparable periods for 
                          which there has been no significant development which 
                          materially impacts upon income and used to illustrate 
                          change in comparable income values. 
----------------------- 
Like-for-like property   Property which has been held at both the current and 
                          comparative balance sheet dates for which there has 
                          been no significant development and used to illustrate 
                          change in comparable capital values. 
----------------------- 
LSE                      The London Stock Exchange 
----------------------- 
Loan-to-value or         The ratio of net debt divided by the market value of 
 LTV                      investment property. Calculated on a proportionate (share 
                          of value) basis. 
----------------------- 
LUXSE                    The Luxembourg Stock Exchange 
----------------------- 
NAV                      Net Asset Value 
----------------------- 
NCI                      Non-controlling interest 
----------------------- 
Net debt                 Total nominal value of borrowings less cash and cash 
                          equivalents 
----------------------- 
RCF                      Revolving Credit Facility 
----------------------- 
Redefine International,  Redefine International P.L.C., also referred to as the 
 RI PLC, the Company      "Company" taken together with all its subsidiaries and 
 or the Group             Group undertakings are collectively referred to as the 
                          "Group". 
----------------------- 
RedefineBDL or RBDL      RedefineBDL Hotel Group Limited 
----------------------- 
Redefine Properties      Redefine Properties Limited, listed on the JSE, 29.79% 
 or RPL                   Shareholder of the Company. 
----------------------- 
RECML                    Redefine Earls Court Management Limited 
----------------------- 
Reversionary yield       The anticipated yield to which the initial yield will 
                          rise (or fall) once the rent reaches the ERV. 
----------------------- 
RevPar                   Revenue per available room 
----------------------- 
RICS                     Royal Institute of Chartered Surveyors 
----------------------- 
RIHL                     Redefine International Holdings Limited 
----------------------- 
RIMH                     Redefine International Management Holdings Limited 
----------------------- 
RHHL                     Redefine Hotel Holdings Limited 
----------------------- 
RHML                     Redefine Hotel Management Limited 
----------------------- 
SAICA                    South African Institute of Chartered Accountants 
----------------------- 
UK                       United Kingdom 
----------------------- 
UK-REIT                  A UK Real Estate Investment Trust. A REIT must be a 
                          publicly quoted company with at least three-quarters 
                          of its profits and assets derived from a qualifying 
                          property rental business. Income and capital gains from 
                          the property rental business are exempt from tax but 
                          the REIT is required to distribute at least 90 per cent 
                          of those profits to shareholders. Tax is payable on 
                          non-qualifying activities of the residual business. 
----------------------- 
Underlying earnings      The calculation of underlying earnings was revised during 
 (re-based)               the six months ended 28 February 2017 to align to the 
                          EPRA earnings metric as adjusted for foreign exchange 
                          gains and debt fair value accretion adjustments only. 
----------------------- 
WAULT                    Weighted average unexpired lease term 
----------------------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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April 26, 2017 02:00 ET (06:00 GMT)

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