Half Yearly Report

20 September 2013

Public Service Properties Investments Limited

("PSPI", "the Company" or "the Group")

Unaudited Results for six months ended 30 June 2013

PSPI (AIM: PSPI), the specialist European real estate investment and financing company, announces unaudited results for the six months ended 30 June 2013.

Highlights

A. Refocused portfolio of core assets

· Total rental income, business licence fees and finance lease income of £4.0 million, including a 3.3% increase on income from the UK portfolio effective 19 February 2013.

· Net profit of £3.0 million (2012 - loss of £36.9 million).

· Investment property assets independently valued at £85.0 million at 30 June 2013 (£84.0 million at 31 December 2012).

· £8.5 million refinancing secured against seven UK properties and income from a UK domiciliary care business completed in April 2013 with a maturity date of 12 April 2016.

· Total debt of £34.4 million secured on the Group's assets at 30 June 2013 (£32.9 million at 31 December 2012), net of amortised debt issue expenses.

· Consolidated Loan to Value ratio¹ of retained assets of 36.5% at 30 June 2013 (35.3% at 31 December 2012).

· Net Asset Value per share² of 58.1p per share (54.9p per share at 31 December 2012).

· Adjusted Net Asset Value per share, excluding deferred taxation liabilities, of 62.2p per share (58.9p per share at 31 December 2012).

· Adjusted earnings per share³ of 2.05p per share.

B. Group Strategy

· The Company will continue to test the market for the Group's remaining assets.

· Cost savings measures are continuing.

Patrick Hall, the Chairman of PSPI, reports that:

"The Board and its advisers continue to evaluate all assets that remain in the Group following recent disposals and last year's restructuring of a major portion of the UK portfolio. The consolidated leverage has been materially reduced as a result of transactions completed over the last twelve months, and debt refinancings in both Germany and the UK have improved the debt maturity profile and lowered the rate of amortisation. The Company continues to work closely with its tenants, who continue to operate in challenging markets." 

¹ Total short and long term borrowing expressed as a percentage of total non-current assets, excluding goodwill, loans and receivables, net of amortised debt issue costs.

²Total equity divided by the number of ordinary shares in issue at 30 June 2013 and 31 December 2012.

³Earnings adjusted to exclude the impact of non-cash and one-off items as disclosed in note 7 to the unaudited financial statements.

For further information please visit www.pspiltd.com or call:

CHAIRMAN'S STATEMENT FOR THE SIX MONTHS TO 30 JUNE 2013

I am pleased to report the Group's unaudited consolidated financial results for the six months ended 30 June 2013.

Refocused portfolio of core assets

The Company has reported a net profit of £3.0 million for the first six months of 2013 compared to a loss of £36.9 million for the equivalent period in 2012. The interim results for the six months ended 30 June 2013 include £1.6 million from continuing operations and £1.4 million from discontinued operations.

Revenue from continuing operations was £3.4 million for the first half of 2013 compared to £7.7 million in 2012. Revaluation losses on investment properties at 30 June 2013 were £0.7 million compared to £38.6 million at 30 June 2012.

Following completion of disposals reported in the last twelve months, the Group owns portfolios of properties in the UK and Germany which will generate gross rental income of £7.1 million¹ and finance lease income of £0.9 million for the current financial year. The retained investment properties have been independently valued at 30 June 2013 at an aggregate gross value of £85.0 million², excluding the finance lease asset, with debt totalling £34.4 million², following the £8.5 million refinancing which completed in April 2013, secured against certain UK assets. The Group's weighted average interest rate is currently 5.0% per annum, and the debt will be amortised at the rate of £1.6 million per annum. The Asset Manager's Review below describes the financial position in more detail.

The UK healthcare market remains challenging with a number of external pressures affecting all operators of care homes, including low levels of fee increase negotiations with local authorities and declining occupancy rates. The Company's UK tenant, European Care, has experienced these pressures along with the rest of the market. In Germany, the Company derives approximately 75% of its rental income from the Marseille Kliniken group, which is a listed operator of care homes in Germany. Trading conditions in Germany are comparatively stable.

Strategic Review

The Board will continue to test the market for the Group's assets and refinance debt facilities, as they fall due, at longer maturities and/or reduced amortisation profiles. Pending the outcome of these matters, the Board will continue to keep its dividend policy under review.

Patrick Hall

Chairman

20 September 2013

¹ Figures in Euros for current income are reflected at an exchange rate of €1.1698:£1

² Figures in Euros at 30 June 2013 are reflected at an exchange rate of €1.1698: £1 (31 December 2012 €1.2234:£1)

ASSET MANAGER'S REVIEW

Business Outlook

After the disposal of certain assets in the UK, Switzerland, Germany and the US which completed between July 2012 and February 2013, the Company's retained portfolios focus on assets in the UK and Germany. All of the assets in the UK are leased and licensed to the European Care Group ("EC") which is owned by Esquire Group ("Esquire") and which was subject to a major restructuring in 2012, including an agreed five-year banking platform and the retention of a highly experienced management team. Approximately 75% of the rental income from assets in Germany is now derived from properties leased to Marseille Kliniken AG ("MK").

In December 2012, the Group secured a €17.5 million, seven-year refinancing of the assets leased to MK from Coreal Bank AG, the existing lender. In addition, the Group completed an £8.5 million three-year refinancing of a part of the UK assets and businesses in April 2013 with the Bank of London and The Middle East PLC ("BLME"), the same bank that has provided debt secured on the rest of the UK assets.

The difficulties facing the UK Government's finances is expected to continue to provide challenging market conditions for operators in the care home sector with occupancy and fee rate increases under continued pressure. The German care home market has generally been more stable; however there are regulatory changes being planned in parts of Germany which may make conditions more difficult for some operating units in the years ahead.

UK

The Group owns nine care homes catering for 432 residents, a school and resource centre catering for 30 children and 70 adults with learning difficulties and a domiciliary care business providing care to individuals in their own residence. Rental income for the UK portfolio is adjusted annually at the rate of increases in the Retail Price Index ("RPI"), subject to a cap of 5% per annum. In February 2013, the Group's income from these assets and businesses increased by 3.3% to £4.9 million per annum, including £0.9 million per annum in respect of finance lease income due in respect of the domiciliary care business.

Following the restructuring of Esquire, the management of the European Care business is focused on improving operational performance across its many services over the medium term, including operation of the Company's remaining leased assets and licenced businesses in the UK, which represents 11% of EC's Older People business and 19% of EC's Specialist business.

Germany

The care home property market in Germany remains comparatively more stable than in the UK, although access to debt financing is also challenging in current market conditions. The Group owns six properties catering for 563 residents in care homes and 154 assisted living flats. The Group uses three different operators in Germany with current gross rental income of €3.6 million. The rents for the German portfolio increase every three or four years by a proportion of the increase in the German Consumer Price Index.

Financial Review

The unaudited consolidated income statement and balance sheet are presented to reflect income and expenses from continuing and discontinued operations, in accordance with International Financial Reporting Standards. As a result, the interim consolidated statement of income reflects a re-stated presentation for the results for the six months ended 30 June 2012 to allow a meaningful comparison to the results for the period to 30 June 2013, and the balance sheet reflects the format reported in the Company's audited consolidated financial statements for the year ended 31 December 2012. Discontinued operations reflect the historical results of assets held in Switzerland and the US, which were disposed of in December 2012 and February 2013, respectively. Income from discontinued operations for the first six months of 2013 include net rental income from the assets previously held in the US up to 28 February 2013 plus foreign exchange adjustments to reflect timing differences in the disposal of discontinued operations compared to previously reported results.

Continuing operations

The Group's revenues from continuing operations were £3.4 million for the six months ended 30 June 2013 compared to £7.7 million for the same period in 2012. The results for 2012 included rental income from the UK assets sold in July 2012 and two German investment properties sold in December 2012.

Following the £8.5 million refinancing completed in April 2013, BLME is the single debt provider secured by the UK assets and businesses with maturities in December 2013 and April 2016 with an aggregate loan to value ratio of 39% based on the gross independent valuation of the assets at 30 June 2013, including value attributed to income derived from the finance lease. The April refinancing was used to repay existing indebtedness, prepayment penalties and transaction costs with approximately £1.2 million used to augment working capital. The two debt facilities are cross collateralised and guaranteed by the Company. The Company has commenced discussions with BLME to refinance the £10.6 million facility maturing in December 2013.

In December 2012, the Company announced that it had refinanced the loan for €17.5 million with a revised maturity date of 31 December 2020 secured against six of the eight properties owned in Germany. Another property is provided as security for a loan of €1.2 million which matures in May 2014 whilst the remaining property in Germany is free of any debt. Aggregate debt secured on German assets reflected a loan to value ratio of 42% based on the gross independent valuation of the assets at 30 June 2013.

The Group currently has no commitments to capital expenditure, although the Group has retained €0.5 million in cash and has a contingent liability to contribute a further €1.5 million should it be necessary to re-develop one of the properties leased to MK in Germany. There are currently no plans for such a development.

Certain operational information by jurisdiction for continuing operations is provided below for the six months ended 30 June 2013. The data is stated before the allocation of management costs and other general charges.

Investment properties were independently valued at 30 June 2013 at a gross valuation of £85.0 million compared to £84.0 million at 31 December 2013. The half year valuations reflect a reduction of £0.7 million offset by a favourable exchange rate movement of £1.7 million on the German portfolio. The UK investment properties were independently valued at 30 June 2013 at a gross value of £46.9 million compared to £47.3 million at 31 December 2012. This reflects an average Capitalisation Rate¹ of 8.55% at 30 June 2013 compared to 8.27% at 31 December 2012. The German investment properties were independently valued at 30 June 2013 at a gross value of £38.1 million (€44.6 million) compared to £36.7 million (€45.0 million) at 31 December 2012. The portfolio was valued at an average Capitalisation Rate² of 7.83% at 30 June 2013 compared to 7.78% at 31 December 2012.

The Group's short and long term borrowings from continuing operations at 30 June 2013 were £11.5 million and £22.8 million, respectively, compared to £12.3 million and £20.6 million at 31 December 2012. The overall increase was as a result of the refinancing referred to above and adverse movements in the foreign exchange rates on loans denominated in Euros.

The table below summarises the Group's debt by jurisdiction following the recent refinancing noted above.

The Company has guaranteed the debt secured against the UK assets and liabilities and has a contingent liability to fund up to €1.5 million should one of the properties in Germany require redevelopment.

Deferred taxation on fair value gains and business combinations was stated at £4.3 million at 30 June 2013, the same level as reported at 31 December 2012. These deferred tax liabilities would be incurred if the Company sold the assets at the balance sheet values in the UK or Germany, respectively.

Total equity increased from £57.8 million at 31 December 2012 to £61.3 million at 30 June 2013 reflecting the net profit for the period and a £0.3 million improvement in the movement in the cash flow hedging reserve.

Administration costs were £1.1 million for the six months ended 30 June 2013 compared to £1.5 million for the comparable period in 2012. The reduction primarily reflected a reduction of £0.4 million in asset management fees.

RP&C International

20 September 2013

¹ Capitalisation rate is derived by dividing the gross rental income by the gross independent valuation of the assets, expressed as a percentage.

² Capitalisation rate is derived by dividing the net rental income by the gross independent valuation of the assets, expressed as a percentage.

PUBLIC SERVICE PROPERTIES INVESTMENTS LIMITED

INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT

PUBLIC SERVICE PROPERTIES INVESTMENTS LIMITED

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

PUBLIC SERVICE PROPERTIES INVESTMENTS LIMITED

INTERIM CONDENSED CONSOLIDATED BALANCE SHEET

PUBLIC SERVICE PROPERTIES INVESTMENTS LIMITED

INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT

PUBLIC SERVICE PROPERTIES INVESTMENTS LIMITED

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

Attributable to equity holders of the Company

PUBLIC SERVICE PROPERTIES INVESTMENTS LIMITED

INTERIM CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Public Service Properties Investments Limited was incorporated in 2001 and is domiciled in the British Virgin Islands (registered office at Nerine Chambers, Road Town, Tortola, British Virgin Islands) and is the parent company of the PSPI Group. Public Service Properties Investments Limited and its subsidiaries (together "the Group" or "the Company"), is an investment property Group with a portfolio in the UK, and Continental Europe. It is principally involved in leasing real estate where the rental income is primarily generated directly or indirectly from governmental sources.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these interim condensed consolidated financial statements have been consistently applied to all the periods presented, unless otherwise stated.

2.1 Basis of preparation

The interim condensed consolidated financial statements of the Group have been prepared in accordance with IAS 34 "Interim Financial Reporting", published by the International Accounting Standards Board (IASB). The interim condensed consolidated financial statements are reported in Pound Sterling unless otherwise stated.

These interim condensed financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's most recent Annual Financial Statements, pages 14 to 22, in respect of the year ended 31 December 2012, which have been prepared in accordance with International Financial Reporting Standards ('IFRS'). These condensed consolidated interim financial statements for the six months ended 30 June 2013 and the comparative figures for the six months ended 30 June 2012 are unaudited. The extracts from the Group's Annual Financial Statements for the year ended 31 December 2012 represent an abbreviated version of the Group's full accounts for that year, on which the Auditors issued an unqualified audit report.

The interim condensed consolidated financial statements are prepared under the historical cost convention as modified by the revaluation of investment properties, other financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results can differ from those estimates.

The Group has adopted the following new standards, amendments to standards and interpretations for the financial period ended 30 June 2013, and year ended 31 December 2012.

Amendments to IAS 1 'Presentation of items of other comprehensive income', (effective for annual periods beginning on or after 1 July 2012, retrospective application, earlier application permitted). The amendment did not have a material impact on the financial statements, and the indication was made on the statement of OCI.

IFRS 10, 'Consolidated financial statements', (effective for annual periods beginning on or after 1 January 2013, retrospective application, earlier application permitted if together with IFRS 11, IFRS 12, IAS 27R and IAS 28R). IFRS 10 replaces all of the guidance on control and consolidation in IAS 27 and SIC-12. IAS 27 is renamed and continues to be a standard dealing solely with separate financial statements.

The amendment did not have a material impact on the financial statements.

IFRS 11, 'Joint arrangements', (effective for annual periods beginning on or after 1 January 2013, earlier application permitted if together with IFRS 10, IFRS 12, IAS 27R and IAS 28R). The amendment did not have a material impact on the financial statements.

IFRS 12, 'Disclosure of interests in other entities', (effective for annual periods beginning on or after 1 January 2013, earlier application permitted). The amendment did not have a material impact on the financial statements.

Amendments to IFRS 10, 12 and IAS 27 - 'Investment entities' (effective for annual periods beginning on or after 1 January 2013). The amendments did not have a material impact on the financial statements.

Amendments to IFRS 10, 11 and 12 (effective for annual periods beginning on or after 1 January 2013) - 'consolidated financial statements, Joint arrangements and Disclosure of interest in other entities: Transition Guidance'. The amendments did not have a material impact on the financial statements.

2.1 Basis of preparation (continued)

IFRS 13, 'Fair value measurement', (effective prospective for annual periods beginning on or after 1 January 2013, earlier application permitted). The amendment did not have a material impact on the financial statements.

2.2 Principles of consolidation

2.2.1 Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in circumstances where the size of the Group's voting rights relative to the size and dispersion of holdings of other shareholders give the Group the power to govern the financial and operating policies, etc. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Accounting for business combinations under IFRS 3 only applies if it is considered that a business has been acquired. The Group may invest in subsidiaries that hold properties but do not constitute a business. These transactions are therefore treated as asset acquisitions rather than business combinations.

For acquisitions meeting the definition of a business combination, the acquisition method of accounting is used. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

For acquisitions of subsidiaries not meeting the definition of a business, the Group allocates the cost between the individual identifiable assets and liabilities in the Group based on their relative fair values at the date of acquisition. Such transactions or events do not give rise to goodwill.

Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

All the Group companies have 31 December as their year-end. Consolidated financial statements are prepared using uniform accounting policies for like transactions. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

2.2.2 Changes in ownership interests in subsidiaries without change in control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions - that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

2.2.3 Disposal of subsidiaries

When the Group ceases to have control, any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

2.2.4 Associates

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The Group's investment in associates includes goodwill identified on acquisition.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group's share of post-acquisition profit or loss is recognised in the income statement, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to 'share of profit/(loss) of associates' in the income statement.

Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Dilution gains and losses arising in investments in associates are recognised in the income statement.

2.3 Amendments to accounting and valuation principles 

There have been no amendments to accounting or valuation principles during the period ended 30 June 2013.

3. FINANCIAL RISK MANAGEMENT

3.1 Financial risk factors

The Group's activities expose it to a variety of financial risks: market risk (including currency and price risk), cash flow and fair value interest rate risk, credit risk and liquidity rate risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.

Risk management is carried out by the senior management of the asset manager under policies approved by the board of directors. Senior management identifies, evaluates and hedges financial risks. The board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments and investment of excess liquidity.

The interim condensed consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2012. There have been no significant changes in the risk management area since year end or in risk management policies.

3.2 Liquidity risk

The Group's investment property assets are substantially financed by concentrated debt facilities. As per the debt agreements, £10.6 million (approximately 32%) of the total borrowings are scheduled to be repaid in December 2013 to a sole lender. In addition, as per the debt agreements £5.5 million (approximately 17%) of the total borrowings were scheduled to be repaid in February 2014 to a sole lender. A three year refinancing of this debt facility was concluded in April 2013 with the same institution that provided the debt facility due in December 2013. If this is not renewed with the existing lender, the Group will seek other lenders to arrange a repayment, although there is a risk that this may not be completed by December 2013.

 The Group will monitor the situation.

3.3 Fair value estimation

In 2013, there were no significant changes in the business or economic circumstances that affect the fair value of the Group's financial assets and financial liabilities. In 2013 there were no reclassifications of financial assets or liabilities

Valuations of the investment properties were made at the end of each period/year by independent property consultants. The valuations are based on both the duration of the leases and the future cash flows and after due consideration of transaction activity in the market.

3.4 Other risk factors

The Group is exposed to property price and market rental risks. Wherever possible the Group builds into the terms of its leases indexation linked to consumer price indices, in order to manage its market rental risk.

FOREIGN EXCHANGE RATES

4. REVENUE

Rental income is stated after reallocation of £102,295 (30 June 2012 - £313,915 and 31 December 2012 - £437,691) to interest income.

The future continuing aggregate minimum rentals receivable under non-cancellable operating leases are as follows:

The investment properties in the UK are leased for an initial period of 35 years. The leases terminate in 2039, although the lessee has the right to renew the leases two years before their expiry, for a further period of 35 years subject to agreement on the revised rent. Each lease is subject to an upward only market rent review every five years from the start of the lease. In the event that a UK property is damaged or destroyed by any insured risk and is not reinstated by the Group within a period of 3 years, the lessee has the right to terminate the lease in respect of that UK property. The lessor may terminate each lease, subject to the senior lender's consent, for various reasons including the breach of material clauses of the lease. In July 2012, the Group disposed of most of its UK property portfolio (see Note 14).

The majority of investment properties in Germany are leased for an initial period of 20 years; however the lessee has the right to renew the leases for a further period of 5 or 10 years, subject to the agreement of the revised rent. The rent on the majority of leases is changed every four years from the anniversary of inception, with reference to the German Consumer Price Index.

Discontinued operations

The investment property in Switzerland has been included in discontinued operations in 2012 and future minimum annual rentals are therefore not included in the table above (see Note 14).

Investment properties in the United States of America have been included in discontinued operations in 2012 and future minimum annual rentals are therefore not included in the table above (see Note 14). The investment properties were leased to the United States Postal Service under a master lease executed in March 1997 and amended on 29 January 1999. The lease expired on 28 February 2022. The rent under the lease is fixed for the entire period of the lease. The lessee had the right to unilaterally relinquish use of up to 25 of the post office properties provided that the resultant reduction in annual rent payable under the lease does not exceed a maximum of $300,000 (£193,911) per annum or 13% of the annual rental. Management had factored this into their analysis of minimum lease payments, and had no reason to believe that this right will be exercised in the foreseeable future.

5. ADMINISTRATIVE EXPENSES

6. a) FINANCE INCOME

b) FINANCE COSTS

7. EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net (loss)/profit attributable to shareholders by the weighted average number of ordinary shares outstanding during the period.

ADJUSTED EARNINGS PER SHARE - NON GAAP

The Directors have chosen to disclose "adjusted earnings per share" in order to provide an indication of the Group's underlying business performance. Accordingly it excludes the effect of the items as detailed below: