Half Yearly Report

Warner Estate Holdings PLC

Warner Estate Holdings PLC ("Warner Estate" or "Group"), the property investment and management company has today announced its results for the half year ended 30 September 2012.

Performance Summary

·; Revenue £11.3million (September 2011: £13.9million).

·; Total loss before income tax £15.5million (September 2011: £15.1million loss).

·; September quarter day cash collection remains at or above 98% within 28 days.

Key Business Events

·; Consensual appointment of joint fixed charge receivers in Warner Estate Investments Limited and Warner Estate Development (Folkestone) Limited, to dispose of certain secured property assets to maxmise the return to the lender.

·; Disposal of 50% equity interest in Agora Shopping Centres Limited, completing the divestment programme of the Group's property investment joint ventures.

Date: 29 November 2012

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Chairman's Statement

The Group's primary focus continues to be negotiations with its three lenders; Barclays Bank PLC ("Barclays"), Lloyds Banking Group ("Lloyds") and an affiliate of The Royal Bank of Scotland ("the RBS Affiliate") (in which a Blackstone fund has a minority interest and which is advised by Blackstone Real Estate Debt Advisors ("BREDA")) (together the "Lenders"). As previously announced during these negotiations the Group remains reliant on the continuing support of the Lenders and the outcome of the negotiations will determine the Group's future. Further detail on these negotiations is given below.

As previously reported the Board believes that there is little or no value to existing shareholders, whatever the outcome of the negotiations with the Lenders.

Financing Negotiations and Going Concern

In anticipation of the maturity of the Group's facilities on 31 December 2012 and the inability of the Group to meet repayment obligations at that date, the Group's negotiations with its Lenders continue and there remains uncertainty as to what will happen after that date.

From the Group's perspective, the ultimate aim of these negotiations is to dispose of the investment property business and, subject to addressing any remaining security charges, continue thereafter as an asset management business, initially based on the existing asset management contracts for the Ashtenne Industrial Fund ("AIF") and the Apia Regional Offices Fund ("Apia").

As previously announced on 17 August 2012, the directors of two of the Group subsidiaries, Warner Estate Investments Limited ("WEI")and Warner Estate Development (Folkestone) Limited ("WDF"), consensually agreed with the RBS Affiliate to appoint fixed charge receivers over certain secured real estate assets of those two companies as the preferred option to maximise the return to the lender. The Group continues negotiations with the RBS Affiliate in relation to the remaining assets over which it has security. The Group agreed with Barclays and Lloyds last year to market and dispose of secured properties in order to repay some of the outstanding debt by 31 December 2012. If the disposals are completed by 31 December 2012 then it is expected that any outstanding debt, exit fees and accrued interest will be treated in a way that will allow the relevant subsidiary companies to be put into members' voluntary liquidation on a solvent basis. If the disposals are not completed by 31 December 2012 then the Group will be reliant on reaching an alternative agreement with the relevant lender.

The fixed charge receivers of WEI and WDF are responsible for the day to day management of certain property assets and the disposal plans and intentions for the remaining property assets of these subsidiaries. Having relinquished control, the Directors have concluded that the assets and liabilities of these companies should be derecognised, in accordance with IAS 27, and the results for the period classified on the income statement as discontinued operations. The Directors have also concluded that certain other assets and liabilities of the Group's property investment business, used as security for the Lenders, are classified as a disposal group held for sale, in accordance with IFRS 5, and that the results for the period are classified as discontinued operations.

As previously announced on 17 August 2012, the Group completed the divestment of its joint venture property investments with the disposal of its 50% equity interest in Agora Shopping Centres Limited for £1 to 24 Bruton Place Limited. The investment has been held at £Nil on the Company's balance sheet for a number of years.

Although the Group has net liabilities, mainly due to unrealised valuation movements, the Board is satisfied that, following a review of appropriately stress tested cash flow forecasts for both the property investment and asset management business, subject to the satisfactory outcome of negotiations with the Lenders and the continued support of the Lenders and certain other creditors, the Group will be able to meet its liabilities as and when they fall due for the foreseeable future. These cash flow forecasts are based on a number of assumptions and at certain points over the coming months and beyond, the level of cash held by the business will be low and headroom will be marginal. The key business risks and material uncertainties are set out in Note 1 to the financial statements. The forecasts include the payment by instalments of the outstanding REIT conversion charge liability, which totalled £0.6million as at September 2012, due to HMRC in relation to the investment property business. The first instalment of £0.15million, as agreed with HMRC, was paid in October 2012. The remaining instalments will be settled over the next nine months. The forecasts exclude any payment in relation to the provision in the balance sheet for onerous contracts of £3.2million as detailed in Note 13 to the interim financial statements. The portfolio of onerous contracts was assigned to the Group in 2005 and, given the inability of the relevant entities within the Group to meet those liabilities, the original assignor has in practice reassumed the liability for the remaining contracts and has not sought to pursue any Group entity.

Having taken all the above matters into account, together with the key business risks and material uncertainties set out in Note 1 to the financial statements and the status of the ongoing negotiations with the Lenders, the Directors have concluded that, whilst material uncertainties regarding the Group's future exist, which may cast significant doubt over the ability of the Group to continue as a going concern, it remains appropriate to prepare the financial statements on a going concern basis. Accordingly, the consolidated financial statements do not include the adjustments that would result from a failure to remain a going concern.

Results Overview

Total Revenue has fallen from £13.9million to £11.3million. This is largely due to a £2.1million fall in total rental income to £5.7million. The asset management income has remained broadly consistent with the prior half year at £3.9million, although this includes a £0.4million non-recurring transition fee in relation to the Agora Shopping Centres Limited management contract. Overall the Group made a post tax loss of £15.5million (September 2011: £15.1million loss), mainly due to fair value adjustments on investment properties and investments as well as realised losses on the disposal of investment properties.

The net finance expense for the period has reduced to £5.5million (September 2011: £9.2million) primarily driven by the part repayment of bank loans in the period. Group net debt has been reduced to £80.7million (March 2012: £229.4million) as a result of the disposal of investment properties and derecognising debt, although a financial guarantee contract of £48.9million has been provided for as per note 15. The net cash outflow for the year was £1.8million primarily arising from interest paid in the period.

The Board has considered the likely future headroom under the remaining financial covenants and concluded that, based on best current estimates and the Group's income and positive cash generation, the Group will have adequate headroom for the foreseeable future.

There will be no payment of an interim dividend (2011: nil).

Asset Management Review

The decline in total assets under management to just over £660million since March 2012 has arisen through a combination of the appointment of fixed charged receivers over certain assets held at £54.3million, sales of £58.8million and adverse valuation movements of £7.1million. The wholly owned investment properties held for sale, £41.5million as at 30 September 2012, are not included in assets under management.

The recent refinancing of AIF has provided a stable basis for the continuation of the Group's intensive asset management of the Fund. In challenging occupational markets, the Ashtenne asset management business has completed a total of 586 new lettings or lease renewals across the UK, securing c.£6.5millon of annual income. Sales amounted to £19.4million across 14 transactions, on average 14% ahead of December 2011 valuations.

Set against the backdrop of weak overall take up in the regional office market in 2012, the Group's continued asset management of Apia has, during the last six months, secured income of £1.67million (114,100 sq ft), through a mixture of new lettings and renewals. There have been several significant asset management initiatives. In Brighton, the comprehensive Grade A refurbishment of One Gloucester Place (37,700 sq ft) led to the letting of 21,500 sq ft within three months of practical completion at £20.00 per sq ft, the largest letting in Brighton for 18 months; in Leeds, the tired 1960s office building, Yorkshire House, was transformed, retaining law firm, Lupton Fawcett LLP, in 30,000 sq ft; and, in the face of surplus Government space being available elsewhere, the Crown Prosecution Service was retained at Sunlight House, Manchester in 37,700 sq ft.

Within the Space Northwest business, a joint venture partnership between AIF and the Home and Communities Agency, the asset management team has successfully delivered £5.92million of sales from five transactions. Since April 2012, an additional £0.75million of rental income has been secured from 39 letting transactions (181,000 sq ft). Ongoing asset refurbishment and remodelling projects to the partnership's two dominant assets, when completed, are expected to enhance their market profile with a view to attracting new and retaining existing occupiers.

Board Changes

The Board has reviewed its own structure in the light of the considerable changes to the Group's strategy and outlook. Mr J R Avery and Mr K A Holman have given notice that they will resign with effect from 31 December 2012. Their counsel and expertise have been great assets to the Board and I thank them for their contribution to our deliberations.

Outlook

Following the completion of the divestment of the Group's property assets and satisfactory arrangements being reached with the Lenders along the lines described above, the Group's objective is to continue as an asset management business. Initially this would be based on the existing asset management contracts for the Ashtenne Industrial Fund and Apia Regional Offices Fund. Addressing the security over the asset management business is fundamental and the continuing viability of the asset management business is dependent on the timing and quantum of management fee income and the implementation of further cost savings.

Philip Warner

Chairman

UNAUDITED INTERIM CONSOLIDATED INCOME STATEMENT

For the six months ended 30 September 2012

UNAUDITED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2012

UNAUDITED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 UNAUDITED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 September 2012

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 September 2012

UNAUDITED NOTES TO THE FINANCIAL STATEMENTS

1. basis of preparation & accounting policies

Basis of preparation

These condensed consolidated interim financial statements for the six months ended 30 September 2012 have been prepared on a going concern basis and in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 'Interim financial reporting' as adopted by the European Union ("EU"), and on the basis of accounting policies set out in the Group's Annual Report and Accounts for the year ended 31 March 2012.

The condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2012 were approved by the Board of Directors on 31 July 2012 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain any statement under section 498(2) of the Companies Act 2006. The condensed consolidated interim financial information has been reviewed, not audited.

The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 March 2012, which have been prepared in accordance with IFRSs as adopted by the EU.

There is no material seasonal impact on the Group's financial performance.

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis. In doing so, the Directors have produced cash flow forecasts which indicate that the Group will continue to be able to meet its liabilities as and when they fall due until the facilities mature on 31 December 2012, at which time the borrowings, exit fees and accrued interest become payable. The Directors have taken into account the following key business risks and uncertainties in preparing their going concern assessment:

·; whether there will be a satisfactory outcome to the negotiations with BREDA, regarding the debt held by the RBS affiliate, which the Group will be unable to repay upon its maturity in December 2012;

·; whether a satisfactory agreement can be reached with BREDA to address the security charge over the Group's asset management business;

·; whether the Lenders, which currently control the bank accounts into which net rental income is received, continue to authorise all the necessary payments in relation to the investment property business;

·; the ability of the Group to successfully execute the disposal plans in relation to the secured assets under the Lloyds and Barclays facilities prior to 31 December 2012 or, if this is not achieved, reaching an alternative agreement with those lenders;

·; in relation to the asset management business cash flow forecast:

o whether the levels of asset management fee income will be adversely affected by property valuation movements in the funds which the Group manages and on which the Group's fees are based;

o whether the volume of future asset management transactions, such as lettings and disposals, will impact the timing and quantum of asset management fee income;

o whether the original party to the onerous leases will take on all future obligations resulting in no further payments being required from the Group as has been assumed in the cash flow forecast;

o whether the actual timing and quantum of asset management expenditure conforms with the assumed timing and amounts; and

o the ability to execute certain cost saving initiatives, and the timing of these initiatives;

·; whether the Lenders and certain other creditors will continue to be supportive.

Having taken into account these key business risks and uncertainties and the ongoing discussions with the Lenders in relation to potential solutions, the Directors have concluded that, whilst material uncertainty exists which may cast significant doubt over the ability of the Group to continue as a going concern, having identified the asset management business as continuing operations, it is appropriate to prepare the interim consolidated financial statements on a going concern basis. Accordingly, the unaudited condensed interim consolidated financial statements do not include the adjustments that would result from a failure to remain a going concern.

Accounting policies

Except as described below, the condensed consolidated interim financial statements have been prepared on the basis of the accounting policies, methods of computation, significant judgements, key assumptions, estimates and presentation as set out in note 1 of the Group's Annual Report for the year ended 31 March 2012.

• IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' - assets that meet the criteria to be classified as held for sale to be presented separately in the statement of financial position and the results of discontinued operations to be presented separately in the statement of comprehensive income.

• IAS 39 'Financial Instruments: Recognition and Measurement' - a financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Such financial liabilities are initially measured at fair value and subsequently measured at the higher of the amount determined in accordance with IAS 37 and the amount initially recognised.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

The following Accounting Standards or Interpretations are not yet effective and have not been early adopted by the Group:

• IFRS 9 'Financial Instruments' (effective 1 January 2015)

• IFRS 10 'Consolidated Financial Statements' (effective 1 January 2014)

• IFRS 11 'Joint Arrangements' (effective 1 January 2014)

• IFRS 12 'Disclosure of Interests in Other Entities' (effective 1 January 2014)

• IFRS 13 'Fair Value Measurement' (effective 1 January 2014)

• Amendment to IAS 19 'Employee Benefits' (effective 1 January 2013)

2. Discontinued operations

In anticipation of the maturity of the Group's debt facilities on 31 December 2012 and the inability of the Group to meet repayment obligations at that date, the Group's negotiations with its Lenders continue and there remains uncertainty as to what will happen after that date.

From the Group's perspective, the ultimate aim of these negotiations is to dispose of the investment property business and continue thereafter as an asset management business, initially based on the asset management contracts for the Ashtenne Industrial Fund and the Apia Regional Offices Fund.

The Group agreed with Barclays and Lloyds last year to market and dispose of secured properties in order to repay some of the outstanding debt by 31 December 2012. In accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations', the assets and liabilities, comprehensive income and cash flows of the companies which own these properties are presented as discontinued operations.

On the 17 August 2012, it was consensually agreed with the RBS Affiliate that joint fixed charge receivers were to be appointed over the assets of Warner Estate Investment Limited and Warner Estate Development (Folkestone) Limited. The joint fixed charge receivers are responsible for the day to day running of the companies, in order to realise value through the disposal of the assets. This has resulted in a loss of control for the Directors and in accordance with IAS 27 'Consolidated and Separate Financial Statements', the assets and liabilities have been derecognised from the interim consolidated financial statements. The comprehensive income and cash flows to 17 August 2012 have been presented in discontinued operations. £48.9million has been provided for as a financial guarantee contract arising from the group cross guarantee and being the estimated fair value of the residual amount of The Royal Bank of Scotland loan at 17 August 2012, after deducting the other assets and liabilities which have been derecognised, which is considered to be an ongoing liability of the group.

The Group continues negotiations with the RBS Affiliate in relation to the remaining assets over which it has security. In line with the group strategy to continue as an asset management business, the associated assets and liabilities, comprehensive income and cash flows of the companies that own these properties are presented as discontinued operations.

On 30 August 2012, at a meeting of the members of Principal Leasehold Properties Limited, a group company with a number of onerous leases assigned to it, resolutions were passed to wind up the company voluntarily and to appoint joint liquidators for this purpose. This has resulted in a loss of control for the Directors and in accordance with IAS 27 'Consolidated and Separate Financial Statements', the assets and liabilities of this company have been derecognised from the interim consolidated financial statements. The comprehensive income and cash flows to 30 August 2012 have been presented in discontinued operations. £3.2 million has been provided for in continuing operations, being the estimate of the liability of the onerous lease portfolio, which will remain a liability until settled or discharged.

The post tax profit or loss of discontinued operations has been disclosed in the interim consolidated income statement, with comparison against prior periods.

The cash flows of discontinued operations have been presented in the interim consolidated cash flow statement and note 16.

The following table presents the assets and liabilities of the various disposal groups within Warner Estate Holdings PLC, classified as assets and liabilities held for sale in the consolidated statement of financial position.

3. segmental reporting

business segments

The business has been divided into Discontinued Property Investment, Asset Management, Investments in Funds and Unallocated and Other Continuing Activities.

4. finance income

5. Finance expense for discontinued operations

6. taxation

The taxation charge for the period of £nil has been estimated from the expected taxable profits of the Group's non-REIT activities after taking account of capital allowances available.

7. earnings per share

Basic losses per share on continuing operations of 7.63p (six months to 30 September 2011: losses 3.18p; year to 31 March 2012: losses 7.68p) are calculated on the loss for the period from continuing operations of £4.2million (six months to 30 September 2011: loss £1.7million; year to 31 March 2012: loss £4.2million) and the weighted average of 55,089,902 (six months to 30 September 2011: 55,054,373; year to 31 March 2012: 55,180,538) shares in issue throughout the period.

Basic losses per share on discontinued operations of 20.51p (six months to 30 September 2011: losses 24.34p; year to 31 March 2012: losses 62.52p) are calculated on the loss for the period from discontinued operations of £11.3million (six months to 30 September 2011: loss £13.4million; year to 31 March 2012: loss £34.5million) and the weighted average of 55,089,902 (six months to 30 September 2011: 55,054,373; year to 31 March 2012: 55,180,538) shares in issue throughout the period.

Total basic losses per share of 28.14p (six months to 30 September 2011: losses 27.52p; year to 31 March 2012: losses 70.20p) are calculated on the loss for the period of £15.5million (six months to 30 September 2011: loss £15.1million; year to 31 March 2012: loss £38.7million) and the weighted average of 55,089,902 (six months to 30 September 2011: 55,054,373; year to 31 March 2012: 55,180,538) shares in issue throughout the period.

Dilution by employee incentive shares and share warrants would decrease the loss per share, so only the basic loss per share has been reported.

8. Goodwill

Goodwill is not amortised but is subject to an half yearly impairment test. Goodwill of £0.6million is derived from the cash generating unit ("CGU") defined as the asset management business of Ashtenne Asset Management Limited. The recoverable amount of the asset management business has been used to assess whether the goodwill is impaired. The recoverable amount of the CGUs has been calculated based on the value-in-use calculations. These calculations use cash flow projections based on financial projections approved by management covering the period to the termination of the asset management contract. Year 1 is based on the budget as approved by management. This is determined by past experience and management's expectations of the current market conditions. Cash flows beyond year 1 are based on the assumption of nil growth in management fee income and no increase or decrease in associated administrative costs. A discount rate of 2.78% has been used to calculate the recoverable amount. The impairment arises from the Group reassessing a number of factors including the maturity of the contract in 2016 and the potential impact on management fees of uncertain capital values given that the fees of this business are based on gross asset values.

9. investment properties

Investment properties have been analysed between non-current and held for sale as follows:

10. investments in funds

Barclays Bank PLC has a combination of a charge and negative pledge over the investment in AIF, relating to the debt which is held in Warner Estate Property Limited.

The Royal Bank of Scotland has a charge over the investment in Apia, relating to the debt which is held in Warner Estate Investments Limited and which has been derecognised, as per note 2.

11. investments in unlisted shares

12. deferred taxation

13. borrowings, cash and cash equivalents

During the period £57.5million of bank loans were repaid.

On the 17 August 2012, joint fixed charge receivers were appointed over the assets of Warner Estate Investment Limited and Warner Estate Development (Folkestone) Limited. The joint fixed charge receivers are responsible for the day to day running of the companies, in order to realise value through the disposal of the assets. This has resulted in a loss of control for the Directors and on this basis the assets and liabilities have been derecognised, in accordance with IAS 27 'Consolidated and Separate Financial Statements'. The bank debt owed to the Royal Bank of Scotland at 17 August 2012 has therefore also been derecognised and £48.9million has been provided for as a financial guarantee contract arising from the group cross guarantee and being the estimated fair value of the residual amount of debt, after deducting the other assets and liabilities of the disposal group, which is considered to be an ongoing liability of the group. The following table is a reconciliation of the movement in debt for the period.

14. provisions for other liabilities and charges

The onerous lease provision is made in relation to onerous contracts on leasehold properties which are vacant or sublet at a level which renders the properties loss-making over the remaining life of the lease. The provision represents the Directors' estimate of the liability, which will remain a liability until settled or discharged. Provisions have been analysed between current and non-current as follows:

15. financial guarantee contract

In accordance with IAS 39 'Financial Instruments: Recognition and Measurement', a provision for a financial guarantee contract was made in the period. This is an estimate of the fair value of the residual debt in Warner Estate Investments Limited, owed to the Royal Bank of Scotland, after deducting the property value and other net assets as at 17 August 2012, of Warner Estate Investment Limited and Warner Estate Development (Folkestone) Limited. This is considered to be an ongoing liability of the group.

16. reconciliation of operating profit to net cash flow

The following table presents the reconciliation of operating profit to net cash flow for continuing operations.

The following table presents the reconciliation of operating profit to net cash flow for discontinued operations.

17. related party transactions

In accordance with IAS 27 "Consolidated and Separate Financial Statements," transactions between the company and subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Remuneration of key management personnel:

Details of transactions between the Group and joint ventures are as set out below.

There are no outstanding loan balances between the Group and its joint ventures.

Directors' statement of responsibilities

The Directors confirm that this consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union, and that the Half Yearly Report herein includes a fair review of the information as required by 4.2.7R and 4.2.8R of the Disclosure and Transparency Rules, namely:

·; An indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·; Material related-party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

The Directors of Warner Estate Holdings PLC are as stated in the Group's Annual Report for the year ended 31 March 2012.

The Chairman's Statement on pages 2 to 3 refers to important events which have taken place in the period.

The principal risks and uncertainties facing the business are as set out on page 9 of the Annual Report and Accounts.

Any material related party transactions which have taken place in the period are set out in note 17.

By the order of the Board

D J Lanchester

Secretary

29 November 2012

Independent review report to Warner Estate Holdings PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated cash flow statement and the related explanatory notes. We have read the other

information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with the terms of our engagement. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

 As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review

procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Emphasis of matter - going concern

In forming our conclusion on the condensed consolidated half yearly financial statements, which is not modified, we have considered the disclosures made in Note 1 to the condensed consolidated half yearly financial statements concerning the group's ability to continue as a going concern.

These disclosures indicate that there is a material uncertainty as to whether agreement can be reached with the group's three lenders in relation to the continuation of various borrowing facilities. These conditions, along with other matters disclosed in Note 1, indicate the existence of a material uncertainty which may cast significant doubt over the group's ability to continue as a going concern. The condensed consolidated half yearly financial statements do not include the adjustments that would result if the group was unable to continue as a going concern.

PKF (UK) LLP

London, UK

29 November 2012