Liberty International first half year pre-tax profit falls

Donald Gordon, Chairman of Liberty International, commented:
“Despite the turbulent conditions currently prevailing in the world’s financial and securities markets, I am gratified that our chosen sectors in the real estate markets, particularly our shopping centre business, have produced a remarkably sound outcome in a highly volatile environment.”

“The resilience of our prime regional shopping centre assets is becoming more extensively recognised and the 20 per cent improvement in the Liberty International share price in the first half year is an encouraging and timely vindication of our strategy, focus and efforts.”

Net asset value per share (adjusted *) increased from 827p at 31 December 2001 to 836p at 30 June 2002 (30 June 2001 – 812p) after providing for 11.25p interim dividend

Six month revaluation surplus of £19.6 million (UK regional shopping centres 0.5 per cent, UK retail and commercial - unchanged, USA 1.8 per cent)

Total return for the six month period (net asset value per share growth and dividend) of 2.5 per cent

Net property investment income increased by 9 per cent to £108.1 million (30 June 2001 - £99.3 million) with an underlying increase of 6 per cent on a like-for-like basis

Profit before taxation and exceptional items of £37.9 million (30 June 2001 - £39.1 million), with a small reduction reflecting £3.6 million lower trading profits and approximately £2 million of additional interest incurred in financing the property shares which produced the exceptional gains

Earnings per share before exceptional items (adjusted*) of 10.82p (30 June 2001 – 11.38p)

Exceptional profits of £12.6 million (30 June 2001 - £13.1 million) increasing profit before taxation to £50.5 million (30 June 2001 - £ 52.2 million).

Exceptional profits include £6.5 million on disposal of shares in other property companies and £8.1 million on repurchase of CSC unsecured bonds. The overall profit before tax on realisation of other property company shares amounted to £13.3 million in the current period of which £6.8 million does not appear in the profit and loss account either in the current or previous periods as it had been recognised in revaluation reserves in 2001

Basic earnings per share including exceptional profits of 12.96p (30 June 2001 - 13.99p restated)

Interim dividend increased by 4.7 per cent from 10.75p per share to 11.25p per share

Financial Position
Debt to assets ratio constant at 40 per cent with aggregate net debt unchanged at £1.70 billion

Completion of £211 million 12 year, non-recourse term financing secured on The Chimes, Uxbridge and The Glades, Bromley, further strengthening the group’s long term debt structure

In accordance with overall financing strategy of concentrating on non-recourse asset specific debt, repurchase of a further £103 million of CSC unsecured bonds. The original £350 million of CSC unsecured bonds in public issue reduced to £135 million at 30 June 2002 (7 per cent of aggregate debt) and further reduced since 30 June to £122 million

Weighted average debt maturity of 12 years and weighted average interest rate, largely fixed rate, of 6.9 per cent (6.4 per cent excluding £230 million of historic Capital & Counties first mortgage debenture stocks)

Cash balances of £186 million and unutilised committed facilities of some £500 million at 30 June 2002
Property activities

Commitment to major 510,000 sq.ft. regional shopping centre at Norwich being developed by Lend Lease Europe. Construction scheduled to start in 2002 for completion in 2005. CSC’s commitment estimated at £275 million, subject to the level of rental income achieved which is currently estimated at £18 million per annum

Outline planning permission obtained for Braehead Phase 2 development, a major regeneration project on 145 acres, involving a mix of leisure, residential and office uses anticipated to create over 2000 further jobs at Braehead

Completion by Capital & Counties of £70 million King’s Reach, Southwark, London and $119 million Serram

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