7th May 2008 07:01
Liberty International PLC07 May 2008 7 May 2008 LIBERTY INTERNATIONAL PLC QUARTERLY REPORT FOR THE PERIOD ENDED 31 MARCH 2008 Attached is the quarterly report for the period ended 31 March 2008: Highlights Summary of Investment and Development Properties Operating and Financial Review Unaudited Financial Information Sir Robert Finch, Chairman of Liberty International, commented: "Liberty International's net asset value per share (diluted, adjusted) hasdeclined from 1264p to 1181p reflecting unsettled property market conditions inthe UK. However, our prime UK regional shopping centres which constitute some 75 percent of our business continue to demonstrate their defensive merits with stableand resilient income streams and a 98.5 per cent occupancy level. We have substantially expanded the business of Capital & Counties in recentyears and these activities, including the Covent Garden Estate, Earls Court &Olympia, the Great Capital Partnership and our international businesses,continue to trade encouragingly. In addition to the high quality developments on which we are currently engaged,especially at St David's, Cardiff and Eldon Square, Newcastle, we are pursuing abroad range of active management initiatives and development prospects withinour existing £8.3 billion of investment properties. While such activity issubject to suitable market conditions, these prospects provide substantial scopefor future organic growth. Liberty International has a business of exceptional quality, a high degree ofspecialisation on prime retail which constitutes around 90 per cent of ourassets, the benefits of scale and financial strength with a prudent debt toassets ratio and long-term fixed-rate debt. We remain confident in the ability of the company to respond to the moredifficult conditions now prevailing in commercial property and retail markets." 7 May 2008 This announcement includes statements that are forward-looking in nature.Forward-looking statements involve known and unknown risks, uncertainties andother factors which may cause the actual results, performance or achievements ofLiberty International PLC to be materially different from any future results,performance or achievements expressed or implied by such forward-lookingstatements. Any information contained in this announcement on the price atwhich shares or other securities in Liberty International PLC have been boughtor sold in the past, or on the yield on such shares or other securities, shouldnot be relied upon as a guide to future performance. A conference call with analysts and investors will take place at 9.30am on 7 May2008. Enquiries: Liberty International PLC: Sir Robert Finch Chairman +44 (0)20 7960 1273David Fischel Chief Executive +44 (0)20 7960 1207Ian Durant Finance Director +44 (0)20 7960 1210 Public relations: UK: Michael Sandler, Hudson Sandler +44 (0)20 7796 4133 SA: Gareth David, +44 (0)20 7457 2020 College Hill Associates Nicholas Williams, +27 (0)11 447 3030 College Hill Associates Background on Liberty International LIBERTY INTERNATIONAL PLC is one of the UK's largest listed property companiesand a constituent of the FTSE-100 Index of the UK's leading listed companies.Liberty International converted into a UK Real Estate Investment Trust (REIT) on1 January 2007. Liberty International owns 100 per cent of Capital Shopping Centres ("CSC"), thepremier UK regional shopping centre business, and of Capital & Counties, aretail and commercial property investment and development company. At 31 December 2007, Liberty International held £8.6 billion of total propertiesof which UK regional shopping centres comprised 75 per cent and retail propertyin aggregate 88 per cent. Shareholders' funds (diluted, adjusted) amounted to£4.7 billion. Assets of the group under control or joint control amounted to£11.0 billion at that date. CAPITAL SHOPPING CENTRES has interests in 14 UK regional shopping centresamounting to 12.6 million sq.ft. in aggregate including 8 of the UK's top 21regional shopping centres with a market value of £6.5 billion at 31 December2007. CSC's largest centres are Lakeside, Thurrock; MetroCentre, Gateshead;Braehead, Renfrew, Glasgow; The Harlequin, Watford; and Manchester Arndale. Inaddition, CSC has three major development projects in progress or with planningpermission in Cardiff, Newcastle and Oxford. CAPITAL & COUNTIES owned assets of £2.2 billion at 31 December 2007 amounting to7.2 million sq.ft. in aggregate. Capital & Counties had around £664 millioninvested in the Covent Garden area including the historic Covent Garden Market,and around £353 million in Central London, primarily through the Great CapitalPartnership, a joint venture with Great Portland Estates plc. Capital & Countiesacquired 50 per cent of EC&O Venues (Earls Court and Olympia Group) in 2007 fora sum that valued the assets at approximately £375 million. In addition, Capital& Counties had interests in the USA amounting to £381 million (2.7 millionsq.ft.), predominantly comprising retail assets in California, including the856,000 sq.ft. Serramonte Shopping Centre, Daly City, San Francisco. LIBERTY INTERNATIONAL PLC HIGHLIGHTS -------------------------------------------------------------------------------- Quarter Quarter Year ended ended ended 31 March 31 March 31 December 2008 2007 2007-------------------------------------------------------------------------------- Net rental income £104m £91m £374m Profit before tax (underlying)* £34m £36m £131m (Deficit)/gain on revaluation and sale ofinvestment properties £(345)m £156m £(279)m (Loss)/profit before tax £(335)m £293m £(125)m Total properties £8,341m ***£8,540m £8,666mNet debt £3,639m ***£3,293m £3,668mNet assets (diluted, adjusted) £4,448m £5,190m £4,757m Basic earnings per share (84.7p) 75.4p (29.0p)Adjusted earnings per share 8.4p 9.8p 36.0pDividend per share 34.1pNet assets per share (diluted, adjusted)** 1181p 1376p 1264p-------------------------------------------------------------------------------- * Before valuation and exceptional items. ** Net assets per share (diluted, adjusted) would increase by 100p per share to 1281p at 31 March 2008 (31 March 2007 - by 100p to 1476p, 31 December 2007 - by 104p to 1368p) if adjusted for notional acquisition costs amounting to £375 million (31 March 2007 - £377 million, 31 December 2007 - £390 million). *** Restated numbers for quarter ended 31 March 2007 now include 100 per cent of MetroCentre, Gateshead rather than the 60 per cent previously reported - see note 1 to the 31 March 2008 accounts Note 15 to the 31 March 2008 accounts sets out full details and calculations ofbasic and adjusted earnings per share and net assets (diluted, adjusted). HIGHLIGHTS OF QUARTER ENDED 31 MARCH 2008 • Stable and resilient operating performance of CSC's £6.2 billion UK regional shopping centres - like-for-like net rental income growth of 1.8 per cent - high occupancy level of 98.5 per cent • Valuation outcome Quarter ended Year ended 31 March 31 December 2008 2007 - UK regional shopping centres - 4.5% - 3.9% - UK non-shopping centre properties - 2.0% - 0.2% - USA - 0.4% + 6.5% - Total - 4.0% - 3.5% • Change in valuation yields as follows: Nominal equivalent yields ------------------------- 31 March 31 December 2008 2007 - UK regional shopping centres + 26bp 5.34% 5.08% - UK non-shopping centre properties + 7bp 5.23% 5.16% • Total return for the period minus 6.5 per cent, with net asset value per share (diluted, adjusted) reduced from 1264p to 1181p. • Additions of £100 million including £51 million development expenditure and £30 million as part of the Great Capital Partnership's asset swap with the Crown Estate. • Disposals of £75 million at £1 million surplus to 31 December 2007 book values • Committed expenditure to complete current development programme around £300 million including - St David's 2, Cardiff opening Autumn 2009 - Eldon Square, South, Newcastle opening Spring 2010 • Robust financial position - 44 per cent debt to assets ratio - over £640 million cash and undrawn committed facilities - no significant debt maturities before 2011 - debt mostly fixed-rate and asset-specific SUMMARY OF INVESTMENT AND DEVELOPMENT PROPERTIES -------------------------------------------------------------------------------------- Market value Revaluation deficit Net rental income ---------------------------------------------------------------------- 31 December 31 March 31 March 31 March 2007 2008 Increase/ 2007 2008 Increase/ £m £m £m (Decrease) £m £m (Decrease)-------------------------------------------------------------------------------------- UK regionalshopping centresLakeside,Thurrock 1,247.9 1,194.3 (53.3) (4.3)%MetroCentre,Gateshead 1,010.0 962.3 (48.7) (4.8)%Braehead,Glasgow 730.3 688.3 (46.2) (6.3)%The Harlequin,Watford 506.2 481.7 (24.6) (4.9)%Victoria Centre,Nottingham 444.8 429.1 (15.8) (3.6)%Arndale,Manchester 418.5 400.9 (18.3) (4.3)%Chapelfield,Norwich 324.5 311.7 (11.1) (3.5)%Cribbs Causeway,Bristol 296.3 282.8 (13.5) (4.5)%The Potteries,Stoke-on-Trent 278.3 271.9 (6.6) (2.4)%The Chimes,Uxbridge 261.8 255.3 (7.0) (2.7)%The Glades,Bromley 257.2 248.2 (10.1) (3.7)%St David's,Cardiff 101.2 98.9 (3.2) (3.1)%Xscape, Braehead 39.8 38.5 (1.9) (5.2)% --------------------------- -------------------Like-for-likecapital and income 5,916.8 5,663.9 (260.3) (4.4)% 68.3 69.5 1.8% Metro RetailPark 77.0 67.0 (10.0) (13.0)%Eldon Square,Newcastle uponTyne 258.0 255.9 (9.7) (3.6)% --------------------------- -------------------Like-for-likecapital 6,251.8 5,986.8 (280.0) (4.5)% 70.7 73.6 4.1% Redevelopmentsand developments 229.3 232.0 (17.4) (7.0)% 1.1 0.9 --------------------------- -------------------Total UK regionalshopping centres 6,481.1 6,218.8 (297.4) (4.6%) 71.8 74.5 3.8% --------------------------- ------------------- UK non-shoppingcentre propertiesLike-for-likecapital and income 674.5 654.1 (20.9) (3.1)% 8.0 7.7 (3.7)%Like-for-like other 875.7 897.0 (10.0) (1.1)% 0.4 16.0 --------------------------- ------------------- Like-for-likecapital 1,550.2 1,551.1 (30.9) (2.0)% 8.4 23.7 Acquisitions - 19.1 (2.8) (12.9)% - 0.3Redevelopmentsand developments 151.8 149.7 (14.0) (8.4)% 0.7 0.3Disposals 71.0 - - 5.4 0.4 --------------------------- -------------------Total UK non-shoppingcentre Properties 1,773.0 1,719.9 (47.7) (2.7)% 14.5 24.7 70.3% --------------------------- ------------------- US properties*Like-for-likecapital andincome 327.8 326.4 (1.2) (0.4)% 4.6 4.6 0.5%Like-for-like other 53.0 52.7 (0.4) (0.8)% 0.4 0.5 --------------------------- -------------------Like-for-likecapital 380.8 379.1 (1.6) (0.4)% 5.0 5.1 --------------------------- -------------------Total USproperties 380.8 379.1 (1.6) (0.4)% 5.0 5.1 2.0% --------------------------- ------------------- Total investmentproperties 8,634.9 8,317.8 (346.6) (4.0)% 91.3 104.3 14.2% --------------------------- ------------------- *Like-for-like percentage changes are in local currency Property analysis by use and type-------------------------------------------------------------------------------- Revaluation Market value Deficit ------------------------------------ ----------- 31 December 31 March 2007 2008 % of total Increase / £m £m properties (Decrease)-------------------------------------------------------------------------------- Regional shopping centres andother retailUK regional shopping centres 6,481.1 6,218.8 74.8% (4.6)%UK other retail 807.7 775.5 9.3% (2.2)%US regional shopping centres 138.6 137.4 1.7% (0.5)%US other retail 130.0 128.8 1.5% (0.9)% --------------------------------Total regional shoppingcentres and other retail 7,557.4 7,260.5 87.3% (4.2)% -------------------------------- OfficeUK business space 583.8 553.6 6.7% (4.0)%US business space 78.6 79.8 1.0% 1.1% --------------------------------Total office 662.4 633.4 7.6% (3.4)% -------------------------------- ExhibitionUK Exhibition 381.4 390.9 4.7% (1.9)% -------------------------------- ResidentialUS residential 33.7 33.1 0.4% (1.7)% -------------------------------- Total investment properties 8,634.9 8,317.8 100.0% (4.0)% -------------------------------- Analysis of UK non-shopping centres and US properties by location and type-------------------------------------------------------------------------------- Market value Revaluation deficit Net rental income -------------------- -------------------- ----------------- 31 December 31 March 31 March 31 March 31 March 2007 2008 2008 Increase / 2007 2008 £m £m £m (Decrease) £m £m--------------------------------------------------------------------------------UK non-shoppingcentre propertiesCapco CoventGarden 663.6 649.4 (15.0) (2.2)% 5.2 6.5Capco Earls Court 381.4 390.9 (7.4) (1.9)% - 10.9Capco London (inc.Great CapitalPartnership) 353.2 352.6 (4.0) (1.1)% 4.2 3.1Capco Opportunities 220.5 208.7 (10.7) (5.0)% 3.1 3.1Capco Urban 154.3 118.4 (10.7) (8.4)% 2.0 1.2 -------------------------- ------------------Total UK non-shoppingcentre properties 1,773.0 1,719.9 (47.7) (2.7)% 14.5 24.7 -------------------------- ------------------ US propertiesUS retail 268.6 266.2 (1.9) (0.7)% 3.7 3.7US business space 78.6 79.8 0.9 1.1% 1.0 1.1US residential 33.6 33.1 (0.6) (1.7)% 0.3 0.3 -------------------------- ------------------Total US properties 380.8 379.1 (1.6) (0.4)% 5.0 5.1 -------------------------- ------------------ 2,153.8 2,099.0 (49.4) (2.3)% 19.5 29.8 -------------------------- ------------------ UK investment property valuation data-------------------------------------------------------------------------------- Market Nominal equivalent Net rental value yield income ERV 31 March 31 March 31 March 2008 31 December 31 March 2008 2008 £m 2007 2008 £m £m-------------------------------------------------------------------------------- UK regional shoppingcentresLakeside, Thurrock 1,194.3 4.90% 5.15%MetroCentre, Gateshead(including Retail Park) 1,029.3 5.03% 5.28%Braehead, Glasgow 688.3 5.02% 5.27%The Harlequin, Watford 481.7 4.95% 5.25%Victoria Centre, 429.1 5.00% 5.25%NottinghamArndale, Manchester 400.9 5.13% 5.37%Chapelfield, Norwich 311.7 5.20% 5.45%Cribbs Causeway, Bristol 282.8 5.06% 5.29%The Potteries,Stoke-on-Trent 271.9 5.50% 5.75%Eldon Square, Newcastleupon Tyne 255.9 5.25% 5.60%The Chimes, Uxbridge 255.3 5.35% 5.60%The Glades, Bromley 248.2 5.40% 5.65%St. David's, Cardiff 98.9 5.26% 5.44%Xscape, Braehead 38.5 6.21% 6.43% -------Like-for-like capital 5,986.8 5.08% 5.34% 73.6 341.9Other 232.0 0.9 5.3 ------- -----------------Total UK regionalshopping centres 6,218.8 74.5 347.2 ------- ----------------- UK non-shopping centrepropertiesCapco Covent Garden 649.4 4.63% 4.70%Capco London (inc. GreatCapital Partnership) 305.6 5.68% 5.56%Capco Opportunities 146.7 6.29% 6.57%Capco Urban 72.4 5.57% 5.79% ------- 1,174.1 5.16% 5.23% 12.9 71.2Exhibition 377.0 10.8 ------- -----------------Like-for-like-capital 1,551.1 23.7 71.2Exhibition - Acquisitions 13.9 0.1Other 154.9 0.9 15.3 ------- -----------------Total UK non-shoppingcentre properties 1,719.9 24.7 86.5 ------- ----------------- The passing rent as at 31 March 2008 was £284.5m in respect of the UK ShoppingCentres (£281.3m at 31 December 2007) and £60.7m in respect of UK Non-Shopping Centres (£61.3m at 31 December 2007). Glossary----------ERV (Estimated Rental Value)The external valuers' estimates of the group's share of the current annualmarket rent of all lettable space net of any non-recoverable charges, before baddebt provision and adjustments to comply with International Accounting Standardsregarding tenant lease incentives. Like-for-like incomeThe category of investment properties which have been owned throughout bothperiods without significant capital expenditure in either period, so both incomeand capital can be compared on a like-for-like basis. Like-for-like capitalThe category of investment properties which includes like-for-like incomeproperties, plus those which have been owned throughout the current period butnot the whole of the prior period, without significant capital expenditure inthe current period, so capital values but not income can be compared on alike-for-like basis. Net rental incomeThe group's share of net rents receivable as shown in the Income Statement,having taken due account of non-recoverable charges, bad debt provisions andadjustments to comply with International Accounting Standards regarding tenantlease incentives. Nominal equivalent yieldEffective annual yield to a purchaser from the assets individually at marketvalue after taking account of notional acquisition costs but assuming rent isreceivable annually in arrears rather than reflecting the actual rental cashflows. Passing RentThe group's share of contracted annual rents receivable at the balance sheetdate. This takes no account of accounting adjustments made in respect of rentfree periods or tenant incentives, the reclassification of certain leasepayments as finance charges or any irrecoverable costs and expenses, and doesnot include excess turnover rent, additional rent in respect of unsettled rentreviews or sundry income such as from car parks etc. OPERATING AND FINANCIAL REVIEW CAPITAL SHOPPING CENTRES ('CSC') CSC's prime regional shopping centres are demonstrating their stability andresilience in the more difficult retail market conditions currently beingexperienced. We have continued to conclude lettings with retailers keen to acquire wellconfigured space in CSC's prime locations. Occupancy levels remain high. As at 31 March 2008, the occupancy level was 98.5per cent, compared with 98.7 per cent at 31 December 2007. Progress with settlement of 2006 and 2007 rent reviews has continued to bepositive with the bulk of reviews now concluded and at anticipated levels. Weare currently engaged in 2008 reviews which predominantly relate to The Mall atCribbs Causeway, Bristol. The two major regional shopping centre developments under construction are the967,500 sq.ft. St David's, Cardiff extension, anchored by the John LewisPartnership, opening in Autumn 2009 and the 480,000 sq.ft. redevelopment ofEldon Square, Newcastle where the largest phase opens in Spring 2010. At St David's, Cardiff, lettings continue to progress satisfactorily with over40 per cent of the space either exchanged or in solicitors' hands (27 per centby income). At Eldon Square, over 60 per cent of the largest phase, the SouthernGateway, is committed by income. The compulsory purchase order to facilitate the redevelopment of the WestgateCentre in Oxford has now been confirmed. We are currently reviewing ourfinancing options for this project following the rearrangement of thepartnership structure in 2007 which increased our participation in the project. We are engaged on a considerable number of other active management and expansionprojects across our CSC centres notably at The Glades, Bromley; MetroCentre,Gateshead; Braehead, Glasgow and Cribbs Causeway, Bristol. CAPITAL & COUNTIES Capital & Counties has had a good start to 2008. We are progressively implementing our masterplan for the £650 million CoventGarden Estate. The Great Capital Partnership, our £660 million joint venture with GreatPortland Estates, has reported a substantial and positive restructuring with TheCrown Estate involving over £350 million of assets. The partnership has alsoconcluded a £225 million non-recourse secured loan maturing in 2013 to refinancethe partners' equity investment in the joint venture and also provide financialresources for asset repositioning and investment projects. The Earls Court & Olympia business is trading well and we are actively pursuingthe opportunity to intensify use at these locations. Aggregate disposals for the period amounted to £75 million at a surplus of £1million over 31 December 2007 book values, including £45 million of non-coreassets held by Capco Urban and Capco Opportunities and £30 million as part ofthe restructuring of Great Capital Partnership assets with the Crown Estate. In the USA, our business is performing very satisfactorily and we have recordeda $10 million disposal of a non-core asset. In addition to the group's activities in the USA, other internationalinitiatives in India and China progressed well. Our joint venture in India,Prozone Liberty, is focused on delivering its first regional shopping centre inAurangabad in 2009 and is planning to commence work on three similar projects inother major second-tier Indian cities. In China, our first investment alongsideChina Resources in a real estate fund managed by Harvest Capital progressedpositively and further co-operation with our partners is anticipated. PROPERTY VALUATIONS AND NET ASSET VALUE ESTIMATE We noted on 13 February 2008 when announcing Liberty International's 2007 annualresults that upward pressure on commercial property valuation yields hadcontinued into 2008. The group's first quarter results to 31 March 2008 contain full details ofproperty valuations. At our UK regional shopping centres, which at 31 December 2007 comprised 75 percent of Liberty International's aggregate £8.6 billion of investment properties,the nominal equivalent yields used for valuations (which averaged 5.08 per centat the year end) increased by 26 basis points in the quarter to 5.34 per cent.UK shopping centre valuations reduced by 4.5 per cent, with 5.1 per centattributable to the change in yields offset by a 0.6 per cent rise in rentalvalues used by the valuers. The remaining 25 per cent of the group's assets held by Capital & Counties sawan overall reduction in valuation in the first quarter of a more modest 2.3 percent with strong performances from Central London assets and the US business. In aggregate, predominantly reflecting valuation movements, adjusted net assetvalue per share reduced from 1264p at 31 December 2007 to 1181p at 31 March2008. Although shareholders buying our shares only pay stamp duty at 0.5 per cent onshare transactions, the assumption contained within the valuations is that ourassets would be sold individually to purchasers who would pay the full 4 percent stamp duty land tax applicable to large property transactions and othernotional acquisition costs. This factor would have increased net asset value at31 March 2008 by around £375 million, representing around 100p per share overand above the adjusted net asset value per share of 1181p (31 December 2007 -104p per share over the published figure of 1264p per share). BASIS OF PREPARATION OF RESULTS FOR THE QUARTER ENDED 31 MARCH 2008 The comparative columns for the first quarter of 2007 have been restated toreflect fully consolidated accounting for the group's interest in theMetroCentre Partnership with a minority interest rather than the proportionateconsolidation shown in the first quarter last year. This revised treatmentreflects the contractual relationship between the parties. In addition, the results reflect an impairment charge of £21.6 million relatingto the goodwill associated with the Covent Garden restaurants, acquired in thelast quarter of 2007. The acquisition of these restaurants provided the accessto leases which will in time be reflected in the uplift of the property values.In the meantime in accordance with IAS 36, the cashflow from these units hasbeen reviewed and the group has determined that it is not appropriate tomaintain the goodwill on the balance sheet. UNDERLYING PROFIT BEFORE TAX The underlying profit before tax and excluding valuation and exceptional itemswas as follows: Three months ended Three months ended Year ended 31 March 2008 31 March 2007 31 December 2007 £m £m £m Net rental income 104.3 91.3 374.3Other income 1.5 0.4 2.0Administration expenses (14.5) (7.4) (45.2)Interest payable lessreceivable (57.4) (48.4) (200.5) -------------------------------------------------------Underlying profitbefore tax 33.9 35.9 130.6 ======================================================= Net rental income increased by 14 per cent from £91.3 million in the firstquarter of 2007 to £104.3 million in 2008 with the bulk of the increase comingfrom recent Capital & Counties' acquisitions, especially Earls Court and Olympiawhich contributed £10.9 million in the quarter (31 March 2007 - nil, 31 December2007 - £10.1 million). Underlying finance costs increased from £48.4 million in the first quarter of2007 to £57.4 million (year ended 31 December 2007 - £200.5 million) reflectinginvestment expenditure in 2007. Including £2.5 million from Earls Court and Olympia, administration expensesincreased to £14.5 million (31 March 2007 - £7.4 million, 31 December 2007 -£45.2 million including £5.2 million from Earls Court and Olympia). The increased administration expenses also reflect CSC's active developmentprogramme and the substantial recent expansion of the activities of Capital &Counties, with the recruitment of experienced personnel to pursue activemanagement and development opportunities within Covent Garden, Earls Court andOlympia, Capco Urban, and overseas activities. Administration expenses in thefirst quarter of 2007 benefited from the write-back of excess provisions fromthe previous year. Reflecting the above factors, underlying profit before tax reduced from £35.9million for the quarter ended 31 March 2007 to £33.9 million for the quarterended 31 March 2008 (year ended 31 December 2007 - £130.6 million). After takingaccount of tax and minority interests, adjusted earnings per share for thequarter amounted to 8.4p (31 March 2007 - 9.8p, 31 December 2007 - 36.0p). FINANCIAL POSITION Liberty International has a strong financial position with unutilised committedfinancial facilities at 31 March 2008 of £510 million and cash balances of £130million, substantially in excess of our commitments. The group's debt structure is robust with predominantly fixed-rate,asset-specific and non-recourse financing with no significant maturities before2011. At 31 March 2008, Liberty International's net debt was £3,639 million,representing a debt to assets ratio of 44 per cent (31 December 2007 - 42 percent). The weighted average maturity of the group's debt was 6.6 years and the weightedaverage cost of debt was approximately 6.0 per cent and fully hedged againstinterest rate movements. The group's borrowings are predominantly secured on property assets on anon-recourse basis. The market value of charged property assets was £6,979million (31 December 2007 - £6,894 million) with attached debt of £3,540 million(31 December 2007 - £3,501 million), giving rise to a loan to value ratio of 51per cent (31 December 2007 - 51 per cent). At 31 March 2008, the market value of the uncharged property assets or interestswas £1,339 million (31 December 2007 - £1,805 million) with unsecured net debtof £99 million (31 December 2007 - £124 million). During the first quarter of 2008, the spreads on traded CommercialMortgage-Backed Securities ('CMBS') debt widened significantly and the grouprepurchased £95.4 million nominal of bonds related to certain of CSC's shoppingcentres for a consideration of £83.6 million. These bonds will be held by thegroup as part of its ongoing treasury operations and the £11.8 million profitearned was recognised in the Income Statement in the quarter ended 31 March 2008as exceptional finance income. At 31 March 2008 long-term interest rates were little changed from the level of31 December 2007, with the 10 year sterling swap rate decreasing by 7 basispoints from 5.02 per cent to 4.95 per cent. As a result, there was nosignificant valuation movement on the group's derivative financial instrumentsduring the first quarter. DEVELOPMENTS Contemporary development demands a rigorous approach to the creation of largescale composite projects. The group has been a leader in this area for manyyears and possesses extensive experience in all aspects of development andproject-execution skill sets. These have now been focused respectively in thenewly-formed business units of Liberty International Developments and LibertyInternational Project Management which will spearhead future initiatives inretail-led mixed-use development. The group's investment and development commitments at 31 March 2008 amounted to£328 million. Details of redevelopment and development properties are set out below: Property Development Revaluation for Market Value Cost to complete expenditure in quarter ended 31 March 2008 as at 31 March quarter ended 31 March 2008 2008 31 March 2008 £m £m £m £mCapital ShoppingCentresSt David's 2, Cardiff 14.2 (7.8) 145.2 178.0Westgate, Oxford 6.0 (7.4) 35.0 Uncommitted at 31 March 2008Other - (2.2) 51.8 Uncommitted at 31 March 2008 ------------------------------------------------------------- 20.2 (17.4) 232.0 178.0Capital & Counties 11.7 (14.0) 149.7 31.0 -------------------------------------------------------------Redevelopments anddevelopments 31.9 (31.4) 381.7 209.0 ------------------------------------------------------------- In addition, £6.7 million was incurred in the quarter on the Southern Gatewayredevelopment at Eldon Square, Newcastle which is included within completedinvestment properties, with CSC's share of costs to complete amounting to £50million at 31 March 2008. Other commitments at 31 March 2008 amounted to £69 million including £37 millionfor overseas investments and £32 million on existing completed investmentproperties. PROSPECTS In the view of the directors of Liberty International, further upward movementin valuation yields may well be experienced in 2008 as investment propertymarkets remain unsettled in the light of ongoing uncertainty in financialmarkets and the general tightening of credit conditions. It is currently tooearly to assess the full impact of these factors on the general performance ofthe UK economy and specifically for the property industry. In particular, rentallevels are likely in the next few years to become an increasingly importantfactor in valuation performance. In addition to the high quality developments on which we are currently engaged,especially at St David's, Cardiff and Eldon Square, Newcastle, we are pursuing abroad range of active management initiatives and development prospects withinour existing £8.3 billion of investment properties. While such activity issubject to suitable market conditions, these prospects provide substantial scopefor future organic growth. The directors believe that Liberty International's continued focus onpredominantly retail assets of the highest quality positions the company well inthe more difficult real estate market conditions now prevailing. 7 May 2008 CONSOLIDATED INCOME STATEMENT (unaudited)For the three months ended 31 March 2008 -------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 Notes £m £m £m-------------------------------------------------------------------------------- Revenue 2 172.0 129.0 574.6-------------------------------------------------------------------------------- Rental income 162.9 128.7 546.7Rental expenses (58.6) (37.4) (172.4)--------------------------------------------------------------------------------Net rental income 2 104.3 91.3 374.3 Other income 1.5 0.4 2.0Gain/ (deficit) on revaluation andsale of investment and developmentproperty 3 (345.5) 156.3 (279.1)-------------------------------------------------------------------------------- (239.7) 248.0 97.2Administration expensesOngoing expenses (14.5) (7.4) (45.2)Impairment of goodwill 4 (21.6) - ---------------------------------------------------------------------------------Operating profit / (loss) (275.8) 240.6 52.0-------------------------------------------------------------------------------- Interest payable 5 (58.4) (49.7) (209.3)Interest receivable 1.0 1.3 8.8Exceptional finance income/ (costs) 5 2.1 (8.3) (3.3)Change in fair value of derivativefinancial instruments (3.5) 109.2 27.0--------------------------------------------------------------------------------Net finance costs (58.8) 52.5 (176.8)-------------------------------------------------------------------------------- Profit/(loss) before tax (334.6) 293.1 (124.8)--------------------------------------------------------------------------------Taxation 6 3.6 (20.4) (30.4)--------------------------------------------------------------------------------Profit/(loss) for the period (331.0) 272.7 (155.2)Minority interests 7 24.8 - 50.2--------------------------------------------------------------------------------Profit/(loss) for the periodattributable to equity shareholders (306.2) 272.7 (105.0)-------------------------------------------------------------------------------- Ordinary dividends - paid and proposed - - 123.3 - pence per share - - 34.1p-------------------------------------------------------------------------------- Basic earnings per share 15 (84.7)p 75.4p (29.0)p--------------------------------------------------------------------------------Diluted earnings per share 15 (81.2)p 72.8p (26.6)p-------------------------------------------------------------------------------- Adjusted earnings per share are shown in note 15. CONSOLIDATED BALANCE SHEET (unaudited) As at 31 March 2008 ------------------------------------------------------------------------------- As at As at As at 31 March 31 March 31 December 2008 2007 2007 Notes £m £m £m-------------------------------------------------------------------------------Non-current assetsGoodwill 4 5.2 - 26.6Investment and development property 9 8,303.0 8,492.1 8,622.8Plant and equipment 1.0 0.9 1.2Investments 52.8 7.5 51.0Trade and other receivables 11 78.1 69.0 78.5------------------------------------------------------------------------------- 8,440.1 8,569.5 8,780.1-------------------------------------------------------------------------------Current assetsTrading property 10 37.6 47.7 43.7Trade and other receivables 11 180.6 345.8 160.3Cash and cash equivalents 129.9 60.5 188.4------------------------------------------------------------------------------- 348.1 454.0 392.4------------------------------------------------------------------------------- Total assets 8,788.2 9,023.5 9,172.5------------------------------------------------------------------------------- Current liabilitiesTrade and other payables (331.4) (230.1) (341.7)Tax liabilities (4.0) (0.2) (5.7)Borrowings, including finance leases 12 (74.7) (152.8) (152.3)Derivative financial instruments (94.6) (45.0) (97.8)------------------------------------------------------------------------------- (504.7) (428.1) (597.5)-------------------------------------------------------------------------------Non-current liabilitiesBorrowings, including finance leases 12 (3,694.5) (3,200.7) (3,704.0)Deferred tax provision 6 (69.8) (62.3) (73.7)Other provisions (1.4) (3.7) (1.4)Other payables (95.0) (143.8) (87.0)------------------------------------------------------------------------------- (3,860.7) (3,410.5) (3,866.1)------------------------------------------------------------------------------- Total liabilities (4,365.4) (3,838.6) (4,463.6)------------------------------------------------------------------------------- Net assets 4,422.8 5,184.9 4,708.9------------------------------------------------------------------------------- EquityCalled up share capital and reserves 4,201.1 5,008.5 4,507.0Minority interests 221.7 176.4 201.9------------------------------------------------------------------------------- Total equity 16 4,422.8 5,184.9 4,708.9------------------------------------------------------------------------------- Diluted, adjusted net assets per 15 1181p 1376p 1264pshare Basic net assets per share 15 1161p 1384p 1246p------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE (unaudited) -------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Profit/(loss) for the period as per theconsolidated income statementbefore minority interest (331.0) 272.7 (155.2) Other recognised income and expense in theperiod:Actuarial losses on defined benefitpension schemes - - (2.0)Tax on items taken directly to equity - - 0.5Gains on revaluation of investments, netexchange translation differences andother movements 0.2 2.3 6.4 Net losses recognised in equity due tominority interests (on the above) - - (0.7)-------------------------------------------------------------------------------- Net gains recognised in equity 0.2 2.3 4.2-------------------------------------------------------------------------------- Total recognised income and (expense) forthe period (330.8) 275.0 (151.0)Total recognised expense attributable tominority interests 24.8 - 50.9-------------------------------------------------------------------------------- Total recognised income and (expense) forthe period attributable to equity shareholders (306.0) 275.0 (100.1)-------------------------------------------------------------------------------- A summary of changes in group equity is shown in note 16. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) -------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Cash flows from operating activitiesOperating profit/(loss) (275.8) 240.6 52.0Adjustments for non-cash items:Unrealised net revaluation (gains)/losses on investment property 346.6 (140.2) 316.5Profit on sale of investment property (1.1) (16.1) (37.4)Depreciation and amortisation 0.1 - 0.3Impairment of goodwill 21.6 - -Amortisation of lease incentives andother direct costs (1.9) 0.9 (1.6)--------------------------------------------------------------------------------Cash flows from operations beforechanges in working capital 89.5 85.2 329.8Change in trade and other receivables 15.3 9.4 (6.4)Change in trading properties 6.1 (14.6) 8.5Change in trade and other payables 23.3 (63.5) (65.1)--------------------------------------------------------------------------------Cash generated from operations 134.2 16.5 266.8Interest paid (61.3) (48.4) (222.0)Interest received 1.1 1.6 9.8Tax paid (23.1) - (12.9)--------------------------------------------------------------------------------Cash flows from operating activities 50.9 (30.3) 41.7--------------------------------------------------------------------------------Cash flows from investing activitiesPurchase and development of property (85.5) (170.1) (575.5)Sale of property 0.7 10.5 459.2Purchase of subsidiary companies - - (80.0)Purchase of non-current asset investments (3.5) (7.5) (39.2)--------------------------------------------------------------------------------Cash flows from investing activities (88.3) (167.1) (235.5)--------------------------------------------------------------------------------Cash flows from financing activitiesIssue and repurchase of shares 0.1 1.1 (3.1)Borrowings drawn 142.5 115.0 382.6Borrowings repaid (79.2) (180.0) (197.0)Repurchase of CMBS notes (84.5) - -Equity dividends paid - - (122.1)--------------------------------------------------------------------------------Cash flows from financing activities (21.1) (63.9) 60.4--------------------------------------------------------------------------------Net decrease in cash and cash equivalents (58.5) (261.3) (133.4)Cash and cash equivalents at beginningof period / year 188.4 321.8 321.8--------------------------------------------------------------------------------Cash and cash equivalents at end ofperiod / year 129.9 60.5 188.4-------------------------------------------------------------------------------- NOTES TO THE ACCOUNTS (unaudited) 1 Basis of preparation The Interim Report is unaudited and does not constitute statutory accountswithin the meaning of s240 of the Companies Act 1985. The auditor's opinion onthe statutory accounts for 2007, which were prepared in accordance withInternational Financial Reporting Standards as endorsed by the European Union("IFRS"), IFRIC interpretations and with those parts of the Companies Act 1985applicable to companies reporting under IFRS, was unqualified and did notcontain a statement made under s237(2) or s237(3) of the Companies Act 1985. The financial information has been prepared using the accounting policies setout on pages 26 and 27 of the Group's Annual Report for 2007. In the financial accounts for the year ended 31 December 2007 the MetroCentrePartnership was consolidated as a subsidiary, with effect from the formationdate of 25 March 2007, reflecting the control exercised by LibertyInternational. This had previously been treated on a proportional consolidationbasis. The directors therefore believe it to be appropriate that this revisedtreatment is reflected in the figures for 31 March 2007 and have re-stated thefigures accordingly. The overall impact on net asset value of the group is £nil. However, the impacton the individual lines is as follows: -------------------------------------------------------------------------------- Three months Six months Nine months ended ended ended 31 March 30 June 31 September 2007 2007 2007 £m £m £m-------------------------------------------------------------------------------- Balance sheetIncrease in property value 423.7 436.8 436.8Increase in current assets - IFRSadjustment 2.3 2.3 2.3Increase in current liabilities (16.0) (16.0) (43.0)Increase in finance loan (233.6) (232.8) (232.0) Overall increase in minority interest 176.4 190.3 164.1-------------------------------------------------------------------------------- Income statementDecrease in profit on sale of property (16.0) (16.0) (16.0)Increase in property valuation gain 16.0 16.0 16.0 Increase in net rental income - 5.2 9.6Increase in valuation movement - 2.4 0.4Increase in finance interest charge - (3.6) (7.2) Movement in minority interest - 4.0 2.8-------------------------------------------------------------------------------- No adjustment has been made to the net income generated for the period from thepartnership formation on 25 March 2007 to 31 March 2007 the end of quarter oneas it is not considered to be material. 2 Segmental analysis-------------------------------------------------------------------------------- Three months ended 31 March 2008 ----------------------------------------------------- UK Other shopping commercial Other Group centres properties Exhibition activities total £m £m £m £m £m--------------------------------------------------------------------------------Revenue 118.7 33.3 19.5 0.5 172.0--------------------------------------------------------------------------------Rental income including service charge and otherincome 114.0 29.4 19.5 - 162.9Rent payable andother outgoings (39.5) (10.5) (8.6) - (58.6)--------------------------------------------------------------------------------Net rental income 74.5 18.9 10.9 - 104.3Property tradingprofits 0.3 0.6 - - 0.9Other income - 0.1 - 0.5 0.6Deficit on revaluation andsale of investment anddevelopment property (297.3) (40.8) (7.4) - (345.5)--------------------------------------------------------------------------------Segment result before overheads and financecosts (222.5) (21.2) 3.5 0.5 (239.7)-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Three months ended 31 March 2007 ---------------------------------------------------- UK Other shopping commercial Other Group centres properties Exhibition activities total £m £m £m £m £m--------------------------------------------------------------------------------Revenue 104.6 24.1 - 0.3 129.0--------------------------------------------------------------------------------Rental income includingservice charge and otherincome 104.6 24.1 - - 128.7Rent payable andother outgoings (32.8) (4.6) - - (37.4)--------------------------------------------------------------------------------Net rental income 71.8 19.5 - - 91.3Other income - 0.1 - 0.3 0.4Gain on revaluation and sale of investment anddevelopment property 126.2 30.1 - - 156.3--------------------------------------------------------------------------------Segment result beforeoverheads and financecosts 198.0 49.7 - 0.3 248.0-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Year ended 31 December 2007 ---------------------------------------------------- UK Other shopping commercial Other Group centres properties Exhibition activities total £m £m £m £m £m--------------------------------------------------------------------------------Revenue 424.8 126.3 24.7 (1.2) 574.6--------------------------------------------------------------------------------Rental income includingservice charge and otherincome 411.7 110.3 24.7 - 546.7Rent payable andother outgoings (122.9) (34.9) (14.6) - (172.4)--------------------------------------------------------------------------------Net rental income 288.8 75.4 10.1 - 374.3Property trading profits 1.5 1.4 - - 2.9Other income - 0.3 - (1.2) (0.9)Gain/ (deficit) on revaluationand sale of investment anddevelopment property (284.5) 0.6 4.8 - (279.1)--------------------------------------------------------------------------------Segment result beforeoverheads and financecosts 5.8 77.7 14.9 (1.2) 97.2-------------------------------------------------------------------------------- 3 Gain/ (deficit) on revaluation and sale of investment and development property-------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Gain/ (deficit) on revaluation ofinvestment and development property (346.6) 156.2 (316.5)Gain on sale of investment property 1.1 0.1 37.4--------------------------------------------------------------------------------Gain/ (deficit) on revaluation and sale ofinvestment and development property (345.5) 156.3 (279.1)-------------------------------------------------------------------------------- 4 Impairment of goodwill Following an impairment test, required under IAS 36, the goodwill arising on theacquisition of the Covent Garden Restaurants has been written off in full. As aresult, a charge of £21.6million has been made to the Income Statement in thequarter. This is due to the advanced state of the plans to reconfigure thebuildings in which they are located. These plans are however, subject tocommercial agreement. 5 Finance costs-------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Gross interest payable - recurring 63.0 52.8 224.4Interest capitalised on developments (4.6) (3.1) (15.1)--------------------------------------------------------------------------------Interest payable 58.4 49.7 209.3--------------------------------------------------------------------------------Costs of termination of financialinstruments 9.7 7.4 2.0Profit on repurchase of CMBS notes (11.8) - -Issue costs written off on redemptionof loans - 0.9 1.3-------------------------------------------------------------------------------- Exceptional finance (income)/ costs (2.1) 8.3 3.3-------------------------------------------------------------------------------- 6 Taxation-------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Current tax on profits excludingexceptional items and property disposals (0.4) 0.7 2.7-------------------------------------------------------------------------------- Deferred tax:On investment and development properties (7.7) 1.9 8.7On derivative financial instruments 2.7 20.2 15.6On other temporary differences 0.9 (0.2) (0.5)--------------------------------------------------------------------------------Deferred tax on profits excludingexceptional items and property disposals (4.1) 21.9 23.8-------------------------------------------------------------------------------- Tax on profits excluding exceptionalitems and property disposals (4.5) 22.6 26.5 REIT entry charge 0.9 0.9 3.9 Tax on exceptional items and propertydisposals:- current tax - (3.1) ---------------------------------------------------------------------------------Exceptional tax and tax on exceptionalitems and property disposals - (3.1) ---------------------------------------------------------------------------------Taxation (credit)/charge (3.6) 20.4 30.4-------------------------------------------------------------------------------- Under IAS 12 (Income Taxes), provision is made for the deferred tax liabilityassociated with the revaluation of investment properties at the corporate taxrate expected to apply to the group at the time of use. For those propertiesqualifying as REIT properties the relevant tax rate will remain 0 per cent, forother properties the relevant tax rate will remain 28 per cent. The deferred tax provision on the revaluation of investment propertiescalculated under IAS 12 is £32.7 million at 31 March 2008 (31 December 2007 -£35.8 million, 31 March 2007 - £34.1 million). This IAS 12 calculation does notreflect the expected amount of tax that would be payable if the assets weresold. The group estimates that calculated on a disposal basis the liability is£76.9 million at 31 March 2008 (31 December 2007 - £86.8 million, 31 March 2007- £50.4 million). If upon sale the group retained all the capital allowances,which is within the control of the group, the deferred tax provision in respectof capital allowances of £45.5 million may also be released, and further capitalallowances of £24.6 million may be available to reduce the amount of tax payableon sale. Where gains such as revaluation of development properties and other assets andactuarial movements on pension funds are dealt with in reserves, any deferredtax is also dealt with in reserves. Movements in the provision for deferred tax-------------------------------------------------------------------------------- As at As at 31 December Recognised Recognised 31 March 2007 in income in equity 2008 £m £m £m £m--------------------------------------------------------------------------------Revaluation of investmentand development property 35.8 (3.2) 0.1 32.7Capital allowances 49.9 (4.5) 0.1 45.5Derivative financialinstruments (14.7) 2.7 - (12.0)Other temporary differences 2.7 0.9 - 3.6--------------------------------------------------------------------------------Net deferred tax provision 73.7 (4.1) 0.2 69.8-------------------------------------------------------------------------------- All deferred tax liabilities are expected to have a maturity of more than oneyear. 7 Minority interests Minority interests comprise third party shares of the MetroCentre, theExhibition business and other assets; £3.0 million underlying profit and £27.8million deficit on revaluation after taxation (31 December 2007 - loss of £1.9million and £48.3 million deficit on revaluation after taxation). 8 Dividends-------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Ordinary sharesPrior period final dividend paid of nilper share (31 December 2007 - 17.25p) - - 62.4Interim dividend paid of nil per share(31 December 2007 - 16.5p) - - 59.7--------------------------------------------------------------------------------Dividends paid - - 122.1--------------------------------------------------------------------------------Proposed dividend of nil per share (31 December 2007 - 17.6p) - - 63.6-------------------------------------------------------------------------------- 9 Investment and development property-------------------------------------------------------------------------------- UK Other shopping commercial centres properties Total £m £m £m--------------------------------------------------------------------------------At 31 December 2007 6,466.0 2,156.8 8,622.8Additions 35.0 65.0 100.0Disposals (1.2) (72.6) (73.8)Foreign exchange fluctuations - 0.6 0.6Deficit on valuation (297.3) (49.3) (346.6)--------------------------------------------------------------------------------At 31 March 2008 6,202.5 2,100.5 8,303.0-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UK Other shopping commercial centres properties Total £m £m £m--------------------------------------------------------------------------------At 31 December 2006 6,542.8 1,644.3 8,187.1Additions 17.6 142.8 160.4Disposals (4.8) (5.6) (10.4)Foreign exchange fluctuations - (1.2) (1.2)Surplus on valuation 126.2 30.0 156.2--------------------------------------------------------------------------------At 31 March 2007 6,681.8 1,810.3 8,492.1-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UK Other shopping commercial centres properties Total £m £m £m--------------------------------------------------------------------------------At 31 December 2006 6,542.8 1,644.3 8,187.1Additions 226.8 835.0 1,061.8Disposals (14.2) (289.2) (303.4)Foreign exchange fluctuations - (6.2) (6.2)Deficit on valuation (289.4) (27.1) (316.5)--------------------------------------------------------------------------------At 31 December 2007 6,466.0 2,156.8 8,622.8-------------------------------------------------------------------------------- The group's interests in investment and development properties were valued as at31 March 2008, 31 December 2007 and 31 March 2007 by independent externalvaluers in accordance with the Appraisal and Valuation Manual of RICS, on thebasis of market value. Market value represents the figure that would appear in ahypothetical contract of sale between a willing buyer and a willing seller. -------------------------------------------------------------------------------- As at As at As at 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Balance sheet carrying value of investmentand development property 8,303.0 8,492.1 8,622.8Adjustment in respect of head leases andincentives 14.8 19.9 12.1--------------------------------------------------------------------------------Market value of investment and developmentproperty 8,317.8 8,512.0 8,634.9-------------------------------------------------------------------------------- 10 Trading property The estimated replacement cost of trading properties based on market valueamounted to £39.2 million (31 December 2007 - £46.1 million, 31 March 2007 -£52.6 million). 11 Trade and other receivables-------------------------------------------------------------------------------- As at As at As at 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Amounts falling due after more than one year:Other receivables 17.7 12.8 17.9Prepayments and accrued income 60.4 56.2 60.6-------------------------------------------------------------------------------- 78.1 69.0 78.5--------------------------------------------------------------------------------Amounts falling due within one year:Rents receivable 33.7 21.1 27.3Derivative financial instruments 20.4 42.9 25.4Other receivables 81.1 236.6 60.4Prepayments and accrued income 45.4 45.2 47.2-------------------------------------------------------------------------------- 180.6 345.8 160.3-------------------------------------------------------------------------------- 12 Borrowings, including finance leases-------------------------------------------------------------------------------- As at As at As at 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Amounts falling due within one year:Secured borrowingsBank loans and overdrafts 39.8 124.6 118.8Commercial mortgage backed securities("CMBS") notes 29.2 21.6 27.4Finance lease obligations 5.7 6.6 6.1--------------------------------------------------------------------------------Amounts falling due within one year 74.7 152.8 152.3--------------------------------------------------------------------------------Amounts falling due after more than one year:Secured borrowings - non recourseCMBS notes 2015 1,062.0 1,165.6 1,131.3CMBS notes 2011 599.7 638.6 633.7Bank loans 2017 117.2 - 117.2Bank loans 2016 681.2 511.8 652.2Bank loans 2013 251.3 251.1 251.2-------------------------------------------------------------------------------- 2,711.4 2,567.1 2,785.6Other secured borrowingsDebentures 2027 226.1 225.8 226.1Other loans 540.4 183.5 428.9-------------------------------------------------------------------------------- 3,477.9 2,976.4 3,440.6Unsecured borrowingsCSC bonds 2013 26.6 26.6 26.6CSC bonds 2009 31.4 41.4 31.4Other loans - - 43.0-------------------------------------------------------------------------------- 3,535.9 3,044.4 3,541.6£111.3 million 3.95% convertible bonds due2010 111.3 109.5 111.3Finance lease obligations 47.3 46.8 51.1--------------------------------------------------------------------------------Amounts falling due after more than one year 3,694.5 3,200.7 3,704.0-------------------------------------------------------------------------------- Total borrowings, including finance leases 3,769.2 3,353.5 3,856.3Cash and cash equivalents (129.9) (60.5) (188.4)--------------------------------------------------------------------------------Net borrowings 3,639.3 3,293.0 3,667.9-------------------------------------------------------------------------------- 13 Fair values of financial instruments-------------------------------------------------------------------------------- As at As at As at 31 March 2008 31 March 2007 31 December 2007 -------------------- ------------------- ------------------ Balance Fair Balance Fair Balance Fair sheet value value sheet value value sheet value value £m £m £m £m £m £m--------------------------------------------------------------------------------Debentures andother fixed rateloansSterlingC&C 5.562%debenture 2027 226.1 296.3 225.8 345.0 226.1 342.0CSC 6.875%unsecuredbonds 2013 26.6 27.3 26.6 26.2 26.6 26.2CSC 5.75%unsecuredbonds 2009 31.4 31.4 41.4 40.4 31.4 31.5US dollarsFixed rateloans 160.7 161.4 158.1 159.8 161.0 160.6-------------------------------------------------------------------------------- 444.8 516.4 451.9 571.4 445.1 560.3--------------------------------------------------------------------------------Convertible bonds- fixed rate 111.3 140.9 109.5 174.4 111.3 152.7-------------------------------------------------------------------------------- The adjustment in respect of the above, after credit for tax relief, to thediluted net assets per share (which does not require adjustment for the fairvalue of convertible bonds) would amount to 13p per share (31 December 2007 -21p, 31 March 2007 - 22p). All other financial assets and liabilities included in the balance sheet arestated at fair values. Derivative financial instruments-------------------------------------------------------------------------------- As at As at As at 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Current assets (note 11) 20.4 42.9 25.4Current liabilities (94.6) (45.0) (97.8)-------------------------------------------------------------------------------- (74.2) (2.1) (72.4)-------------------------------------------------------------------------------- Interest rate swaps-------------------------------------------------------------------------------- Notional principal Average contracted rate-------------------------------------------------------------------------------- 31 March 31 March 31 December 31 March 31 March 31 December 2008 2007 2007 2008 2007 2007 £m £m £m % % %Effective on orafter:1 year 3,313 2,642 3,319 5.27 5.31 5.275 years 3,211 2,818 3,220 5.16 5.10 5.1610 years 2,425 2,350 2,543 4.69 4.68 4.7215 years 2,100 2,025 2,100 4.58 4.57 4.5820 years 2,100 2,025 2,100 4.58 4.57 4.5825 years 1,625 1,550 1,625 4.40 4.38 4.40-------------------------------------------------------------------------------- 14 Capital commitments At 31 March 2008, the group was contractually committed to £327.8 million offuture expenditure for the purchase, construction, development and enhancementof investment property (31 December 2007 - £317.0 million, 31 March 2007 -£375.6 million). 15 Per share details (a) Earnings per share-------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 Number Number Number millions millions millions--------------------------------------------------------------------------------Weighted average ordinary shares in issuefor calculation of basic earnings per share 361.6 361.7 361.7Weighted average ordinary shares to beissued on conversion of bonds andunder employee incentive arrangements 14.6 14.8 14.7--------------------------------------------------------------------------------Weighted average ordinary shares in issuefor calculation of diluted earnings pershare 376.2 376.5 376.4-------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Earnings used for calculation of basicearnings per share (306.2) 272.7 (105.0)Reduction in interest charge fromconversion of bonds, net of tax 0.8 1.3 5.0--------------------------------------------------------------------------------Earnings used for calculation of dilutedearnings per share (305.4) 274.0 (100.0)-------------------------------------------------------------------------------- Basic earnings per share (pence) (84.7)p 75.4p (29.0)p--------------------------------------------------------------------------------Diluted earnings per share (pence) (81.2)p 72.8p (26.6)p-------------------------------------------------------------------------------- Earnings used for calculation of basicearnings per share (306.2) 272.7 (105.0)Add back exceptional finance (income)/costs (2.1) 8.3 3.3Add back REIT entry charge 0.9 0.9 3.9Less other exceptional tax - (3.1) -(Less)gain/ add back deficit on revaluationand sale of investment anddevelopment property 345.5 (156.3) 279.1Add back/ (less) fair value movement onderivative financial instruments 3.5 (109.2) (27.0)Add back/(less) deferred tax in respect ofinvestment and development property (3.2) 2.2 4.2Add back deferred tax in respect ofderivative financial instruments 2.7 20.2 15.6Add back/(less) deferred tax on capitalallowances (4.5) (0.3) 4.5Add back impairment of goodwill 21.6 - -Less amounts above due to minorityinterests (27.8) - (48.3)--------------------------------------------------------------------------------Earnings used for calculation of adjustedearnings per share 30.4 35.4 130.3--------------------------------------------------------------------------------Adjusted earnings per share (pence) 8.4p 9.8p 36.0p-------------------------------------------------------------------------------- Earnings used for calculation of adjustedearnings per share 30.4 35.4 130.3Reduction in interest charge fromconversion of bonds, net of tax 0.8 1.3 5.0-------------------------------------------------------------------------------- Earnings used for calculation of adjusted,diluted earnings per share 31.2 36.7 135.3--------------------------------------------------------------------------------Adjusted, diluted earnings per share (pence) 8.3p 9.7p 35.9p-------------------------------------------------------------------------------- (b) Net assets-------------------------------------------------------------------------------- As at As at As at 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Basic net asset value 4,201.1 5,008.5 4,507.0Fair value of derivative financialinstruments (net of tax) 62.2 (9.8) 57.7Deferred tax on revaluation surpluses 32.7 34.1 35.8Deferred tax on capital allowances 45.5 31.3 49.9Unrecognised surplus on trading properties(net of tax) 1.4 4.9 1.7Minority interests on the above (18.0) - (15.9)-------------------------------------------------------------------------------- 4,324.9 5,069.0 4,636.2Effect of dilution:On conversion of bonds 111.3 109.5 111.3On exercise of options 11.6 11.6 9.7--------------------------------------------------------------------------------Diluted, adjusted net asset value 4,447.8 5,190.1 4,757.2-------------------------------------------------------------------------------- (c) Shares in issue-------------------------------------------------------------------------------- As at As at As at 31 March 31 March 31 December 2008 2007 2007 £m £m £m--------------------------------------------------------------------------------Shares in issue, excluding those held byESOP trust and treated as cancelled 361.6 361.8 361.6Effect of dilution:On conversion of bonds 13.9 13.9 13.9On exercise of options 1.2 1.4 1.0--------------------------------------------------------------------------------Diluted shares in issue 376.7 377.1 376.5-------------------------------------------------------------------------------- (d) Convertible debt 3.95 per cent convertible bonds due 2010 At 31 March 2008, 31 December 2007 and 31 March 2007 3.95 per cent convertiblebonds with a nominal value of £111.3 million were in issue. The holders of the 3.95 per cent bonds have the option to convert their bondsinto ordinary shares at any time on or up to 23 September 2010 at 800p perordinary share. The 3.95 per cent bonds may be redeemed at par at the company'soption after 14 October 2008 subject to the Liberty International ordinary shareprice having traded at 120 per cent of the conversion price of 800p per sharefor a specified period. 16 Summary of changes in equity-------------------------------------------------------------------------------- Three months Three months Year ended ended ended 31 March 31 March 31 December 2008 2007 2007 £m £m £m-------------------------------------------------------------------------------- Opening equity shareholders' funds 4,507.0 4,732.4 4,732.4Issue of shares 0.1 1.1 4.7Cancellation of shares - - (7.9)-------------------------------------------------------------------------------- 4,507.1 4,733.5 4,729.2Total recognised income and (expense)for the period (306.0) 275.0 (100.1)-------------------------------------------------------------------------------- 4,201.1 5,008.5 4,629.1 Dividends paid - - (122.1)--------------------------------------------------------------------------------Closing shareholders' equity 4,201.1 5,008.5 4,507.0-------------------------------------------------------------------------------- Minority interestOpening minority interest 201.9 - -Additions 1.6 176.4 252.8Reclassification of debt 43.0 - ---------------------------------------------------------------------------------Total recognised income and (expense)for the period (24.8) - (50.9)-------------------------------------------------------------------------------- Closing minority interest 221.7 176.4 201.9-------------------------------------------------------------------------------- Total equity 4,422.8 5,184.9 4,708.9-------------------------------------------------------------------------------- ---ENDS--- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
INTU.L