Helical Bar interim results for the half year to 30 September 2004 (UK)

Since the start of the financial year Helical has continued to take advantage of a buoyant investment market, selling over £150m of investment properties including its two industrial estates at Aycliffe & Peterlee, due to complete on 23 November 2004. The effect on the balance sheet of Helical of these, and previous investment sales, will be to reduce the Company’s net gearing to below 15%.

This is an inappropriate level for a Company such as Helical which traditionally has enhanced returns on shareholders’ equity by the judicious use of gearing.

The Company is therefore considering a tax efficient return of cash to shareholders of £4 a share following the completion of the sale of Aycliffe & Peterlee. It is expected that the return of cash will be structured to give shareholders a choice between receiving the
payment either in the form of income or of capital. In addition, shareholders will have a
limited opportunity to receive further ordinary shares in lieu of their entitlement to a cash
payment albeit at an effective premium to the market price.

As part of the return of cash scheme it is proposed there be a share reorganisation so that, subject to normal market movements, the Helical Bar share price following the return is approximately equal to the share price prior to the return of cash with shareholders accordingly holding a proportionately smaller number of shares.
Further details on the return of cash and subsequent share reorganisation will be included in the circular which is expected to be posted to shareholders shortly.
Such a return of cash will be in addition to the £4.5m spent buying back shares in the half year. It should be noted that since July 2003 the Company has spent £26.0m buying in shares for cancellation at an average share price of 756p per share, enhancing future returns to shareholders.

Pre-tax profits for the half year to 30 September 2004 increased by 47% to £9.5m (2003:
£6.4m). Adjusted profits, after excluding the profit on sale of investment properties, rose by 30% to £6.9m (2003: £5.3m).

Rental income for the period fell to £12.3m (2003: £13.1m) following continued sales of
investment properties. A development profit of £0.2m was made (2003: loss £0.7m).
The profit on sale of investment properties was £2.6m (2003: £1.2m).

Earnings per share increased by 105% to 28.7p (2003: 14.0p) and on a diluted basis by
103% to 27.6p (2003: 13.6p). Adjusted earnings per share, after excluding exceptional
items and adding back the FRS19 deferred tax provision, increased by 40% to 13.7p (2003: 9.8p).

As part of the preparation for the return of cash to shareholders, the investment portfolio was revalued at 30 September 2004. As a consequence of this the Company’s basic net asset value per share increased by 10.5% to 1012p (31.03.2004: 916p) and, on a diluted basis, by 11.2% to 974p (31.03.2004: 876p). Net asset value per share adjusted for the addback of the deferred tax provision and the cost of the investment in own shares held by the Company’s Employee Share Ownership Plan Trust increased by 10.5% to 966p (31.03.2004: 874p) and by 11.2% to 886p (31.03.2004: 797p) on a “triple net” basis.

Sales of investment properties have contributed to reductions in net debt to £78m
(31.03.2004: £130m) and net gearing to 28% (31.03.2004: 52%). On legal completion of
contracted purchases and sales, gearing will fall to below 15% with net debt below £40m.

The Interim Statement includes, exceptionally, a revaluation of the investment portfolio to assist in the preparation of the return of cash to shareholders. This revaluation shows a surplus of £22.6m or 9.3%.

Recent sales of investment properties have reduced the Company’s deferred tax provision to £1.65m or 6p per share (31.03.2004: 8p). Unprovided deferred tax on revaluation surpluses amounts to £22.0m or 76p per share (31.03.2004: 70p).

The Interim Statement adopts the provisions of UITF38 on the Accounting for Employee
Trusts. The effect of the adoption of this standard is a redu

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