Half Yearly Report

28 March 2013

SOUTH AFRICAN PROPERTY OPPORTUNITIES PLC

('SAPRO' or the 'Group')

Interim results for the six months ended 31 December 2012

South African Property Opportunities plc (AIM: SAPO), an investment company established to invest in real estate opportunities in South Africa, announces its unaudited interim results for the six months ended 31 December 2012.

For further information please contact

Paul Fincham +44 (0) 20 7886 2713

Robert Naylor +44 (0) 20 7886 2714

Panmure Gordon

Ian Dungate/Suzanne Jones + 44 (0) 1624 692600

Galileo Fund Services Limited

A copy of the results announcement will be available on the Company's website at www.saprofund.com

Chairman's Statement

On behalf of the Board, I am pleased to present the interim results for South African Property Opportunities plc ("SAPRO" or "the Company") for the six months ended 31 December 2012.

Financial Overview

As at 31 December 2012 the unaudited EPRA net asset value per share "NAV" (taking into account property revaluations, estimated sales and distribution costs) was 80 pence (30 June 2012: 87 pence).

The fall in NAV is represented primarily by foreign exchange losses equivalent to 6 pence per share (over the six month period the Rand/Sterling exchange rate moved from 12.8277 to 13.7202). The Group (SAPRO and its subsidiaries) does not hedge its currency exposure.

Over the period, portfolio values rose (on a like for like basis) by around 1%. Administration expenses and management fees for the six month period totalled £586,000 or 1 pence per share (£646,000 for equivalent period in 2011). In January 2013, the Company announced that a series of cost savings had been negotiated which would reduce annual expenses to approximately £1m, with full effect from June 2013.

Bank loans have fallen from £7m as at 30 June 2012 to £2m as at 31 December 2012. Accordingly the majority of receipts from current and future asset sales will be available to the Group.

As at the period end the Group had cash balances of £1.8m (30 June 2012: £0.6m).

South African Economy and Property Market

These are covered in the Report of the Investment Manager on pages 4 to 7 but, in summary, the economic environment in South Africa remains difficult with relatively low economic growth, high and increasing unemployment and the increasing labour unrest contributing to the fall in the Rand. Despite this, the property market has seen a slight upturn in values and in development activity. This has been helpful in allowing the Company to continue to make progress on sales.

Future Receipts

The Group has announced contracted sales in respect of Gosforth Park, Sandton (Wedgewood and Starleith properties), Longland and Emberton. Additionally periodic sales of units continue at Acacia Park and Kindlewood. Proceeds arising from these sales are expected throughout 2013 and 2014. It is difficult to determine the exact dates of receipt because cash receipts are largely dependent on factors outside of the Group's control such as Competition Commission, zoning and registration approvals. However as guidance (and based upon the announced sales) the Group anticipates receipts of at least ZAR 200m (after allowing for tax, Group Five costs and future operating expenditure) in 2013. The Group anticipates that a substantial portion of these receipts (after costs and repayment of debt) will be available for distribution to shareholders. However it should be noted that timings are uncertain and that receipts might be adversely affected by a number of factors including: failure of counterparties to complete, taxation and exchange controls.

Portfolio Activity

The sale transactions reported reflect the robustness of our SA team in dealing with our partners to achieve liquidity of the Company's stake in each project. Progress has also been made in this respect at African Renaissance and at Imbonini, where in both instances the Company has bought out restrictive partner rights to achieve a 100% controlling interest. In African Renaissance this is already opening the way to discussions with potential purchasers.

Progress has also been made on zoning and servicing at a number of the residual assets.

The Company's strategy remains to keep costs under control, sell the property assets and return capital to investors. A subdued market for development land, and the need to restructure many of the Company's legacy rights in its joint ventures, have constrained this process in the past but the Board is pleased that real progress has been made towards delivering the strategy.

David Hunter

Chairman

27 March 2013

Report of the Investment Manager

South African Economy

Interest rates are expected to remain flat (at 8.5% prime rate) for the foreseeable future. Growth rates have slowed significantly to 1.2% in Q3 2012 and at 3.1% for calendar year 2012 and are predicted to remain below 2.5% over the next 24 months. The South African Rand (ZAR) experienced significant volatility to the downside over the last quarter 2012. Unemployment figures deteriorated to 25.5% from 23.9% a year ago. Inflation has remained steady at 5.4% and remains in the target range of between 3% and 6%.

Adverse direct foreign investment indicators for the property sector specifically have added to the slowdown in growth prospects - a position that is likely to remain in place until a resolution to socio-economic, political and labour issues delivers stability.

Despite the above negative indicators, the country remains positively disposed to an economic turn-around. Infrastructure spend of ZAR 3.2 trillion to September 2020 has been planned and is in the roll out phase. Increased business confidence, combined with increased construction activity, provides some positive signals for a start to an anticipated economic recovery.

Property Market

Despite some location specific commercial development appetite, the period to 31 December 2012 remained fairly flat for the overall sector. Development and construction activity has begun to increase with order books showing better signs of recovery for the next twelve to twenty four month period. The listed sector was again active for income producing assets given the slow-down in development activities and the lack of new yield producing assets being brought to market. The residential sector suffered negative growth for the six month period whilst retailers have seen their equity positions under pressure. Retail trade has however remained steady over the period.

Development activity has however seen some progress. The number of building plans that were approved in Q4 2012 was up on the prior period. Requests for proposals are indeed in greater supply indicative of a changing environment and construction order books are up across the real estate sector.

Sale transactions

Since 30 June 2012 and to the date of this report ZAR 366.9m of sales have been signed subject to defined conditions. ZAR 73.2m of such deals have completed to date with proceeds received. The remainder are anticipated to complete over the next three to six months. These sales are summarised below:

*It is anticipated that the net proceeds arising from these sales will be free cash available to the Group and not required to be offset against debt. Sales values above are either actual receipt values or are anticipated receipt values. Values in this table are shown before taxes but after sales costs. They represent the SAPRO only share of receipts.

Sales values have largely been achieved at or above Broll valuation levels. At Acacia Park, certain units were sold at a discount to valuation (around 10%).

Asset Management progress

Significant asset management initiatives are detailed below.

Valuation

Interim valuations were conducted by Broll (an affiliate of CBRE) during the months of December 2012 and January 2013. Such values were finalised in early February. Overall the portfolio valuation declined from ZAR 1,120.2m to ZAR 972.6m due to the sales / property transfers that had taken place in the period. However on a like for like basis the portfolio saw a marginal increase in value of some 1.07% when compared with the full year 30 June 2012 valuation. Such increase is again reflective of the positivity starting to emerge in the property sector.

Portfolio Gearing

* - this debt is not on the Group's balance sheet, as it is held by associates

Outlook

We are reviewing and negotiating possible exits from certain assets while pursuing development rights for those assets that require full developmental rights to maximise potential returns.

Our focus remains to sell the property assets at a realistic market price, within an optimum time period with due regard to the Group's expenses. Significant progress has been made over the two year period we have been involved with the Group and we remain positive about future sales activity.

Group Five Property Developments (Pty) Limited

Investment Manager

27 March 2013

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Statement of Changes in Equity

Consolidated Cash Flow Statement

Notes to the Financial Statements

1 General Information

South African Property Opportunities plc (the "Company") was incorporated and registered in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 27 June 2006 as a public limited company with registered number 117001C. On 7 January 2011 with the approval of Shareholders in general meeting, the Company was re-registered as a company under the Isle of Man Companies Act 2006 with registered number 006491v. South African Property Opportunities plc and its subsidiaries' (the "Group") investment objective is to achieve capital growth from a portfolio of real estate assets in South Africa.

The Company's investment activities are managed by Group Five Property Developments (Pty) Limited ("Group Five") ("the Investment Manager"). The Company's administration is delegated to Galileo Fund Services Limited (the "Administrator"). The registered office of the Company is Millennium House, 46 Athol Street, Douglas, Isle of Man, IM1 1JB.

Pursuant to a prospectus dated 20 October 2006 there was an authorisation to place up to 50 million shares. Following the close of the placing on 26 October 2006, 30 million shares were issued at a price of 100p per share.

The shares of the Company were admitted to trading on the AIM Market of the London Stock Exchange ("AIM") on 26 October 2006 when dealings also commenced. On the same date the shares of the Company were admitted to the Official List of the Channel Islands Stock Exchange (the "CISX").

As a result of a further fundraising in May 2007, 32,292,810 shares were issued at a price of 106p per share, which were admitted to trading on AIM on 22 May 2007.

The Company's agents and its Investment Manager perform all functions, other than those carried out by the Board's executive and non-executive directors. The Group has two employees.

Financial year end

The financial year end of the Company is 30 June in each year.

2 Summary of significant accounting policies

Except as described below, the accounting policies applied by the Group in the preparation of these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 30 June 2012.

2.1 Basis of preparation

These interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 30 June 2012 which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

The interim financial statements for the six months ended 31 December 2012 are unaudited. The comparative interim figures for the six months ended 31 December 2011 are also unaudited.

2.2 Critical accounting estimates and assumptions

Management makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below:

(a) Going concern

These financial statements have been prepared on a going concern basis, which assumes that the Group will be able to meet its liabilities as and when they fall due for the foreseeable future.

The Directors have prepared forecasts that indicate that the Group will be able to meet its financial obligations from existing cash resources and the projected sales proceeds from sale of inventory.

(b) Estimated impairment of inventory, investment in associates and loans to associates

The Group obtains third party semi-annual valuations performed by Broll. These are used in conjunction with the strategic plan for each development in order to determine any impairment of inventory, investments in associates and loans to associates.

During the period there were impairment charges in relation to loans due from associates (see note 10.2) and inventory (see note 12).

(c) Estimated impairment of goodwill

The Group tests annually for whether goodwill has suffered any impairment, in accordance with its accounting policy. The recoverable amount of the cash generating unit has been determined using fair value less cost to sell. This calculation requires the use of estimates, see note 11 for further details.

3 Segment Information

The entity is domiciled in the Isle of Man. All of the reported revenue, £11,040,086 (31 December 2011: £369,456), is from South Africa.

The total of non-current assets other than financial instruments is £7,432,334 (30 June 2012: £7,571,793) and all of these are located in South Africa.

For the six months ended 31 December 2012 revenues of £10,361,433 (ZAR 139,918,723) were derived from single external customers attributable to the Gosforth development (31 December 2011: £nil (ZAR nil)).

4 Operating leases

The Group leases out certain parts of its inventory under operating leases whilst it is in the process of seeking a buyer. The future minimum lease payments receivable by the Group under non-cancellable leases are as follows:

5 Cost of sales

6 Investment Manager's fees

Annual fees

The Investment Manager is entitled to a management fee of £500,000 per annum payable monthly in arrears. Since the period end this fee has been reduced to £290,000 per annum under the new investment management agreement (see note 22). Management fees for the period ended 31 December 2012 paid to Group Five Property Developments (Pty) Limited amounted to £250,423 (ZAR 3,381,664) (31 December 2011: £250,156 (ZAR 3,028,119)).

During the period, pursuant to the investment management agreement, the Investment Manager was also entitled to recharge to the Group any costs and disbursements reasonably incurred by it in the performance of their duties, including costs of travel save to the extent that such costs are staff costs or other internal costs of the Investment Manager.

Sales fee

The Investment Manager was entitled to a sales fee of up to 3 per cent. of the gross proceeds on disposal of the Group's projects (such fee is net of external brokerage costs incurred). This fee has been eliminated under the new investment management agreement (see note 22). These fees are payable on sale and have been considered when determining the net realisable value of the inventory (see note 12). Fees payable for the period ended 31 December 2012 payable to Group Five Property Developments (Pty) Limited amounted to £220,397 (ZAR 2,976,202) (31 December 2011: £nil (ZAR nil)).

Performance fees

The Group accrued a performance fee due to the Investment Manager based upon the market value of the portfolio which only becomes payable on the eventual sale of these assets so long as the sales values are better than certain agreed benchmarks. The decrease in performance fees accrued for the period ended 31 December 2012 amounted to £178,605 (ZAR 2,411,846) (31 December 2011: decrease of £63,673 (ZAR 770,760)). Under the new investment management agreement there is a performance fee to be calculated based on 1.5% on the net proceeds of the sale of each asset (see note 22).

7 Other administration fees and expenses

Included within other administration fees and expenses are the following:

Directors' remuneration

The maximum amount of basic remuneration payable by the Company by way of fees to the Non-executive Directors permitted under the Articles of Association is £200,000 per annum. All Directors are each entitled to receive reimbursement of any expenses incurred in relation to their appointment. During the period of these accounts, the Non-executive Directors (excluding the Chairman) were entitled to receive an annual fee of £40,000 each and the Chairman £75,000. From 1 July 2012 David Saville reduced his annual fee from £40,000 to £20,000. From 1 April 2013 the Chairman reduced his annual fee to £40,000, Stephen Coe reduced his annual fee to £35,000 and David Saville reduced his annual fee to £15,000. Stephen Coe was also entitled to additional remuneration of £30,000 in December 2011 for his work.

Executive Directors' fees

During the period of these accounts, the Executive Directors received annual basic salaries of £40,000. From 1 April 2013 John Chapman reduced his annual basic salary to £30,000. Pursuant to the terms of their service agreements, Craig McMurray and John Chapman are entitled to incentive payments of, respectively, 1.5 per cent. and 0.5 per cent. of all sums distributed to shareholders. Their service agreements also provide for payments of the same percentages, following termination of their employment, for distributions paid or payable from cash generated during their employment.

All directors' remuneration and fees

Total fees, basic remuneration (including VAT where applicable) paid to the Directors for the period ended 31 December 2012 amounted to £117,000 (31 December 2011: £159,667) and was split as below. Directors' insurance cover amounted to £19,012 (31 December 2011: £22,016). Following the period end, directors fees were reduced as previously announced.

8 Income tax expense

The tax on the Group's profit before tax is higher than the standard rate of income tax in the Isle of Man of zero per cent. The differences are explained below:

9 Basic and diluted loss per share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Group by the weighted average number of shares in issue during the period.

The Company has no dilutive potential ordinary shares; the diluted earnings per share is the same as the basic earnings per share.

10 Investments in and loans to associates

10.1 Investments in associates

The Group's share of the results of its principal associates, all of which are unlisted, and its aggregate assets (including goodwill) and liabilities, is as follows:

The Group's share of losses made by associates not recognised in the financial statements as the carrying value of the investment is £nil, is as follows:

10.2 Loans due from associates

The loans due from associates are as follows:

* repayable after the senior debt funding provided by Investec Bank Limited has been repaid in full.

** repayment date is four years + one day following the receipt of the Recordal from the Development Facilitation Act, 1995 (DFA) Tribunal approving the planning application.

*** repayable as and when the directors of Imbonini Park Phase 2 (Pty) Limited resolve that repayment shall be effected, provided there are sufficient cash reserves available to do so and proportionately to each shareholder.

**** repayable at the discretion of the directors of Blue Waves Properties 2 (Pty) Ltd.

The fair value of these loans approximates their carrying value.

11 Intangible assets

The above goodwill relates entirely to the Group's investment in the shares of Living 4 U Developments (Pty) Ltd, (the African Renaissance development). The recoverable amount of this cash generating unit has been determined using fair value less cost to sell. The recoverable amount has been assessed as £8,153,717 (ZAR 111,870,627). The key assumption used to determine the fair value less cost to sell is the third party valuation of the land held and is valued at £9,730,179 (ZAR 133,500,000) at 31 December 2012. Considering all factors within the calculation of the recoverable amount of this cash generating unit, the recoverable amount would have to fall by £2,622,699 (ZAR 35,983,961) before impairment would be required.

12 Inventories

Current assets

During the period, the Group capitalised costs of £535,906 (ZAR 7,236,764) (30 June 2012: £279,831 (ZAR 3,443,483)) and expensed property costs previously capitalised of £1,004,252 (ZAR 13,561,213) (30 June 2012: £nil (ZAR nil)) (see note 5), in order to develop these assets for future re-sale, and accordingly they were classified as inventory. Borrowing costs of £nil (ZAR nil) (30 June 2012: £27,768 (ZAR 341,705)) have been included in capitalised costs.

At 31 December 2012 the net realisable values of Brakpan, Driefontein, Emberton, Gosforth, Kindlewood, Kyalami, Lenasia and Starleith were lower than cost, therefore their inventory values have been impaired to a value of £20,807,713 (ZAR 285,485,980) (30 June 2012: Brakpan, Driefontein, Emberton, Kindlewood, Kyalami, Lenasia, Starleith and Wedgewood were impaired to a value of £30,398,192 (ZAR 389,938,890)). Net realisable value has been assessed using valuations determined by Broll less estimated selling expenses. Included within these selling expenses is a 3 per cent. sales fee due to the Investment Manager on disposal of inventory (see note 6).

The Directors consider all inventories to be current in nature. It is not possible to determine with accuracy when specific inventory will be realised, as this will be subject to a number of issues such as availability of finance and delays due to obtaining permits.

Security

At 31 December 2012, there are three first rank mortgages secured over the inventory held by Driefontein, Kindlewood and Lenasia which totals £10,132,879 (ZAR 139,025,130) (30 June 2012: Clayville, Driefontein, Kindlewood and Lenasia £11,973,614 (ZAR 153,593,930)) (see note 19).

13 Trade and other receivables

The fair value of trade and other receivables approximates their carrying value.

14 Cash at bank

Included within the bank deposit balances figure is an amount of £60,156 (ZAR 825,351) (30 June 2012: £63,440 (ZAR 813,790)) represented by bank guarantees retained by the bank under fixed deposit (detailed below). This is the only figure excluded from the above balances for analysing the movements of cash and cash equivalents in the cash flow statement.

Bank guarantees

The subsidiary SAPSPV Holdings RSA (Pty) Ltd has a contingent liability of £60,156 (ZAR 825,351) in connection with senior debt obligations of its associate Imbonini Park (Pty) Ltd.

15 Share capital

The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

Business Venture Investments No 1269 (Pty) Limited (the Wedgewood development) has issued preference shares ZAR 100 to its minority holders. The holders of the preference shares are entitled to the first ZAR 22,000,000 (£1,603,475) in dividends declared by Business Venture Investments No 1269 (Pty) Limited.

16 Net asset value ("NAV") per share

The NAV per share is calculated by dividing the net assets attributable to equity holders of the Group by the number of ordinary shares in issue.

The Group publishes an adjusted NAV that is calculated in accordance with the guidelines of the European Public Real Estate Association ("EPRA"). The primary difference between EPRA and IFRS is that, in general, under IFRS the Group's development properties are classified as inventory and held at cost while EPRA permits the incorporation of open market valuations. In order to produce the EPRA numbers the Group has retained Broll's Johannesburg office to conduct semi-annual valuations. The EPRA numbers incorporate the Broll valuations and are net of tax.

The below figures also take into consideration any profit share agreements with development partners, fees due on sale of properties (see note 6) and incentive fees due to the Executive Directors (see note 7).

17 Loans from third parties

The loans from third parties are as follows:

* in relation to their combined ownership of 25 per cent. of Crimson King Properties 378 (Pty) Limited and the Gosforth Business Estate development.

** in relation to its 50 per cent. interest in subsidiary company, Madison Park Properties 40 (Pty) Ltd, and the Brakpan development.

*** in relation to its 10 per cent. interest in subsidiary company, Madison Park Properties 34 (Pty) Ltd, and the Kyalami Residential Estate development.

**** in relation to its 25 per cent. interest in subsidiary company, Breeze Court 31 (Pty) Ltd, and the Starleith development.

All of the above loans are unsecured and carry no fixed terms of repayment.

The fair value of these loans approximate their carrying value.

18 Trade and other payables

The fair value of trade and other payables approximates their carrying value.

19 Borrowings

Current liabilities

Terms and debt repayment schedule:

* relates to the Kindlewood development, a mortgage bond has been registered over the Kindlewood property. This facility is subject to certain sales targets which will be first tested on 30 September 2013.

** related to SAPSPV Holdings RSA (Pty) Limited, secured by the Group's investments in the Starleith, Wedgewood and Clayville projects as security for the facility and a mortgage bond has been registered over the Clayville property. This facility was repaid in full and not renewed.

*** relates to the Gosforth development; mortgage bonds have been registered over the Lenasia and Driefontein properties.

The fair value of the borrowings approximate their carrying value.

20 Contingent liabilities and commitments

As at 31 December 2012 the Group has contingent liabilities which have corresponding bank guarantees. See note 14 for further details.

21 Related party transactions

Parties are considered to be related if one party has the ability to control the other party or to exercise significant influence over the other party in making financial or operational decisions.

The Investment Manager, Group Five Property Developments (Pty) Limited, and the Directors of the Company are considered to be related parties by virtue of their ability to make operational decisions for the Group. Fees in relation to the Investment Manager are disclosed in note 6 and fees in relation to the Directors are disclosed in note 7.

Group Five Property Developments (Pty) Limited is a related party to Group Five Construction (Pty) Limited, which is a partner in the Wedgewood and Starleith developments. There is a loan in respect of the Starleith development which is disclosed in note 17.

Related party transactions with associates are disclosed in note 10.

The principal subsidiary undertakings within the Group as at 31 December 2012 are:-

* this also represents the percentage of ordinary share capital and voting rights held - 2012

** the Group controls the company by means of direct control of the board

The following companies were deregistered in the period to 31 December 2012 and therefore no longer form part of the Group:

22 Post balance sheet events

Subsequent to the period end the Group has entered into legally binding agreements in respect of the sales of the following properties or part properties: Wedgewood £8.47m (ZAR 116.2m), Starleith £2.77m (ZAR 38m) and Emberton £3.64m (ZAR 50m). The Group's expected share of the proceeds is £7.73m (ZAR 106m), £1.31m (ZAR 18m) and £3.64m (ZAR 50m) respectively.

Subsequent to the period end the Group has entered into a legally binding agreement in respect of the repurchase of the shares of Longland for £7,423,401 (ZAR 101,850,545).

Subsequent to the period end the Group has entered into a legally binding agreement in respect of the purchase of 35% of the shares of African Renaissance for £0.36m (ZAR 5m).

Subsequent to the period end the Group has entered into a legally binding agreement in respect of the purchase of 50% of the shares of Imbonini for £62,025 (ZAR 851,000).

Since the period end a new investment management agreement has been executed reducing the annual fee from £500,000 to £290,000, the performance fee to a flat 1.5 per cent and removing the brokerage commission.