15th Mar 2007 07:04
Primary Health Properties PLC15 March 2007 Primary Health Properties PLC PRIMARY HEALTH PROPERTIES PLC ('PHP PLC') Modern accommodation for the Provision of Primary Health Care Services Interim Results for the six months ended 31 December 2006 Group Financial Highlights *Portfolio revaluation increased by £13.4m to £260.3m *Diluted NAV per share increased 38% to 420.9p (30 June 2006: 305.1p) *Portfolio owned, leased and committed increased by 40% to £293.8m (2005:£209.9m) *Pre tax profits totalled £9.0m (2005: £9.4m) *Basic earnings per share increased by 268% to 125.4p (2005: 34.1p) *Adjusted earnings per share increased by 6% to 6.9p (2005: 6.5p) *Dividend increased by 11% to 7.5p (2005: 6.75p) *Successful acquisition and integration of CHH for £30.9m in December 2006 * Placing of £32m underwritten by Numis Securities Limited and Open Offer of £8mannounced 15 March 2007 Harry Hyman, Managing Director, commented: "The first half of our financial year has started strongly with all of our keyperformance indicators rising. The commercial property market continued toenjoy strong investor demand and rental appreciation has been positive. We tookthe opportunity to make the strategic acquisition of CHH which has now beenfully integrated and is performing well. I am pleased to announce today thatthe Company is, subject to Shareholder approval, raising up to £40m of newequity to further develop the business. The second half has started well andthe Board looks forward to the future with confidence." Enquiries: Bell Pottinger Corporate & FinancialDavid Rydell/Victoria GeogheganTel: 020 7861 3232 Primary Health Properties PLCHarry HymanManaging DirectorTel: 01483 306912Mobile: 07973 344768 Chairman's Statement In June 2006, the Group announced its intention to convert to a real estateinvestment trust ("UK-REIT") and on 1 January 2007 the Group's conversion to aUK-REIT became effective. The Group also, with effect from 1 January 2007, changed its accountingreference date to 31 December. The current accounting period, which commenced on1 July 2006, will therefore comprise 18 months ending 31 December 2007. Inaddition to the publication of these financial statements for the six monthsended 31 December 2006, the Group will prepare a second interim report for thesix months ending 30 June 2007 and final financial statements for the 18 monthsending 31 December 2007. The results of the Group for the six months ended 31 December 2006 reflectfurther progress. The Group has continued to expand its portfolio of modernpurpose built primary care properties, both through individual asset purchasesfrom a number of developers and by portfolio acquisitions, having recentlycompleted, in December 2006, the acquisition of Cathedral Healthcare (Holdings)Limited ("CHH") with its portfolio of nine properties, for a cash considerationof £30.9m. The total gross assets acquired as a result of the CHH acquisition, once fullydeveloped, are expected to amount to £39.2m. It is expected that these assetswill generate an annual rental income of approximately £2.0m, reflecting aninitial yield of approximately 5%. As a result of the regular six monthly review, the property portfolio hasincreased by £13.4m, with the diluted net asset value per share increasing by38% to 420.9p per share compared to 305.1p at 30 June 2006. This increasereflects both higher rents and the tightening of yields in the market. As a consequence of the CHH acquisition, continued individual propertyacquisitions and the revaluation surplus, the Group's investment portfolio, at31 December 2006, had risen to £260.3m. The Group's closing portfolio, includingdevelopment loans, leases and commitments, totalled £293.8m. The Group's profit before taxation, for the six months to 31 December 2006,totalled £9.0m (2005: £9.4m), a decrease of 4.2%. After the UK-REIT conversioncharge and release of the deferred tax provision, profit after tax for theperiod was £29.6m (2005: £7.7m). Diluted earnings per share, which include thebenefit of revaluation gains on investment properties, were 125.4p, an increaseof 280% over the first half of last year (33.0p). Adjusted diluted earnings pershare for the first half were 6.9p, 6% higher than the interim period last year(6.5p). The Board proposes to pay an interim dividend of 7.5p per share, a rise of 0.75pper share over last year's interim dividend. The dividend will be paid on 22 May2007 to Shareholders on the Register of Members on 23 March 2007. During the six months ended 31 December 2006, the Group has taken delivery of£34.9m of completed and fully let properties at Didsbury, Clowne, Hythe,Wombwell, Sheerness, Clapham, Hoddesden, Milton Keynes, Oxted and Norwich andentered into new commitments totalling £34.5m during the period at Penkridge,Kettering, Sheerness, Sutton, Handcross, Wednesbury, Hoddesden (extension) andMilton Keynes (extension). The table below sets out the portfolio as at 31 December 2006: 31 December 30 June 31 December 2006 2006 2005 £m £m £mInvestment properties 245.5 197.5 180.2Development properties 9.5 - -Properties in the course of development 2.8 2.1 3.2Total investment properties 257.8 199.6 183.4Finance leases 2.5 2.5 2.5Total owned and leased 260.3 202.1 185.9Development loans 1.2 1.7 1.8Total owned and leased (including development loans) 261.5 203.8 187.7Deposits paid 0.1 0.1 0.2Committed 32.2 20.9 22.0Total owned, leased and committed 293.8 224.8 209.9 Although there have been reports of funding delays within the NHS, the Group hasa strong forward pipeline of transactions. The annualised rent roll hasincreased from £11.3m at 30 June 2006 to £13.3m at 31 December 2006,representing both new deliveries and rental increases. Rental increases securedduring the period amounted to £0.3m. On balance, the Group continues to obtainsatisfactory rent reviews. The Group continues to monitor its exposure to interest rates and, during theperiod, has consolidated the RBS interest rate swaps. The gearing of the Groupwas 59% as at 31 December 2006 (based on the value of property covering debt)and the Group has covered 59% of its exposure to interest rates for theremainder of the financial period. The Group has broadly similar hedging inplace for the next eight years. The share save scheme currently has 35 members representing 83,779 shares.Further details can be found on the website: www.phpgroup.co.uk. The Board has made alternative arrangements with the Registrar, Capita IRG, tooffer a dividend reinvestment scheme for Shareholders who wish to reinvest theirdividend as shares. A letter explaining this scheme, together with terms andconditions and an application form, will be posted to new Shareholders with thepublished Interim Report. On 21 September 2006, the Joint Managers exercised their options to acquire 1.6mshares at a price of £1.71 per share pursuant to the Management Optionsagreement dated 17 September 2003. The number of shares in issue as at 31December 2006 was 24,277,718. On 16 November 2006, Shareholders approved the amendments to the ManagementAgreement by way of a Deed of Variation whereby the Joint Managers will beentitled to a performance incentive fee. On 14 February 2007, the Group negotiated a £20m increase in loan facilities to£140m from The Royal Bank of Scotland plc and a £20m increase to £50m fromAllied Irish Banks, p.l.c. The portfolio now has some 89 properties with a further seven contracted fordelivery and two extensions also contracted for delivery. The portfolio hasperformed extremely well and the Board believes that the combination of thehigh-quality property portfolio, long lease lengths and strong covenant qualitymake a desirable portfolio for future income and capital appreciation. G A ElliotChairman14 March 2007 GROUP INCOME STATEMENTfor the six months ended 31 December 2006 Six months ended Year ended Six months ended 31 December 30 June 31 December Note 2006 2006 2005 £'000 £'000 £'000 (unaudited) (audited) (unaudited) Rental income 6,410 10,850 5,303 Finance lease income 141 281 140 Rental and related income 6,551 11,131 5,443 Net valuation gain on property portfolio 13,442 14,997 7,837Net gain on disposal of property 44 401 -Administrative expenses (2,271) (2,689) (1,308)Exceptional items:Goodwill impairment 2 (5,339) - -UK-REIT conversion costs (175) - - Operating profit before financing costs 12,252 23,840 11,972 Finance income 110 258 161Finance costs (3,394) (5,695) (2,768) Profit before tax 8,968 18,403 9,365 Current taxation 7 - 465 -Deferred taxation charge for the period 7 (3,880) (2,931) (1,639)Deferred taxation release on conversion to 7 29,622 - -UK-REITConversion to UK-REIT charge (5,157) - - Taxation credit/(expense) 20,585 (2,466) (1,639) Profit for the period* 29,553 15,937 7,726 Earnings per share - basic 4 125.4p 70.3p 34.1p - diluted 4 125.4p 67.7p 33.0p Adjusted earnings per share - basic 4 6.9p 17.1p 6.7p - diluted 4 6.9p 16.5p 6.5p Dividends paid: 6 £'000 £'000 £'000Final dividend for the year ended 30 June 2006 1,639 - -(6.75p)Interim dividend for the year ended 30 June - 1,531 -2006 (6.75p)Final dividend for the year ended 30 June 2005 - 1,359 1,359(6.0p) * Wholly attributable to equity shareholders of Primary Health Properties PLC All activities are continuing. GROUP BALANCE SHEETas at 31 December 2006 Note At 31 At 30 At 31 December June December 2006 2006 2005 £'000 £'000 £'000 (unaudited) (audited) (unaudited)Non current assets Investment properties 3 248,316 199,569 183,430Development properties 3 9,525 - -Development loans 1,184 1,712 1,758Net investment in finance leases 2,487 2,492 2,510Derivative interest rate swaps 1,901 1,415 - 263,413 205,188 187,698 Current assets Trade and other receivables 1,855 1,470 1,678Net investment in finance leases 12 12 -Cash and cash equivalents 3,829 3,973 2,236 5,696 5,455 3,914 Total assets 269,109 210,643 191,612 Current liabilities Derivative interest rate swaps - (74) -Corporation tax payable (201) (181) (681)UK-REIT conversion charge payable 1 (645) - -Deferred rental income (2,988) (2,466) (2,347)Trade and other payables (4,591) (2,604) (3,472) (8,425) (5,325) (6,500) Non current liabilities Term Loan (153,250) (112,800) (102,000)Deferred tax 7 - (21,193) (18,930)UK-REIT conversion charge payable 1 (4,512) - -Derivative interest rate swaps (735) - (1,896) (158,497) (133,993) (122,826) Total liabilities (166,922) (139,318) (129,326) Net assets 102,187 71,325 62,286 Equity Share capital 12,139 11,339 11,339Share premium 13,943 12,022 12,022Capital reserve 1,618 1,618 1,618Cash flow hedging reserve 1,166 939 (1,327)Retained earnings 73,321 45,407 38,634 Total equity * 102,187 71,325 62,286 Net asset value per share Note - basic 8 420.9p 314.5p 274.7p - diluted 8 420.9p 305.1p 267.8p Adjusted net asset value per share - basic 8 420.9p 408.0p 358.1p - diluted 8 420.9p 392.4p 345.8p * Wholly attributable to equity holders of Primary Health Properties PLC These financial statements have been prepared in accordance with the accountingpolicies set out in the latest Annual Report for the year ended 30 June 2006. Group Statement of Changes in Equityfor the six months ended 31 December 2006 Cash flow Share Share Capital hedging Retained capital premium reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 30 June 2006 11,339 12,022 1,618 939 45,407 71,325 Profit for the period - - - - 29,553 29,553Transfer to income statement on cash flow hedges - - - 5 - 5 Income and expense recognised directly inequity:Loss on cashflow hedges taken to equity - - - (180) - (180)Deferred tax on loss on cashflow hedges for 52 52the period - - - -Deferred tax on cashflow hedges released * - - - 350 - 350 Total recognised income and expense for the period - - - 227 29,553 29,780Issue of shares (net of expenses) 800 1,921 - - - 2,721Dividends paid:Final dividend for the year ended 30 June2006 (6.75p) - - - - (1,639) (1,639) 31 December 2006 12,139 13,943 1,618 1,166 73,321 102,187 *Deferred tax has been released due to impending conversion to UK-REIT. Group Statement of Changes in Equityfor the year ended 30 June 2006 Cash flow Share Share Capital hedging Retained capital premium reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 1 July 2005 11,326 11,952 1,618 (1,292) 32,175 55,779 Profit for the period - - - - 15,937 15,937Transfer to income statement on cashflow hedges - - - 238 - 238 Income and expense recognised directly inequity: Gains on cashflow hedges taken to equity - - - 2,949 - 2,949Deferred tax on cashflow hedges taken toequity - - - (956) - (956) Total recognised income and expense for theperiod - - - 2,231 15,937 18,168Issue of shares 13 74 - - - 87Issue expenses - (4) - - - (4)Share based payment charge - - - - 185 185Dividends paid:Final dividend for the year ended 30 June2005 (6.0p) - - - - (1,359) (1,359)Interim dividend for the year ended 30 June2006 (6.75p) - - - - (1,531) (1,531) 30 June 2006 11,339 12,022 1,618 939 45,407 71,325 Group Statement of Changes in Equityfor the six months ended 31 December 2005 Cash flow Share Share Capital hedging Retained capital premium reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 1 July 2005 11,326 11,952 1,618 (1,292) 32,175 55,779 Profit for the period - - - - 7,726 7,726Transfer to income statement on cashflow hedges - - - 118 - 118 Income and expense recognised directly inequity: Losses on cashflow hedges taken to equity - - - (168) - (168)Deferred tax on cashflow hedges taken toequity - - - 15 - 15Total recognised income and expense for theperiod - - - (35) 7,726 7,691Issue of shares 13 74 - - - 87Issue expenses - (4) - - - (4)Share based payment charge - - - - 92 92Dividends paid:Final dividend for the year ended 30 June2005 (6.0p) - - - - (1,359) (1,359) 31 December 2005 11,339 12,022 1,618 (1,327) 38,634 62,286 Group Cash Flow Statementfor the six months ended 31 December 2006 Six months Year Six months ended ended ended 31 December 30 June 31 December 2006 2006 2005 £'000 £'000 £'000 (unaudited) (audited) (unaudited) Operating activities Group operating profit before financing costs 12,252 23,840 11,972 Adjustments to reconcile group operating profit to netcash flows from operating activities: Less: Revaluation gains on property (13,442) (14,997) (7,837)Less: Gains on disposal of property (44) (401) -Plus: Goodwill impairment 5,339 - -Plus: Share based payment expense - 185 92Decrease/(increase) in trade and other receivables 430 (54) (196)Increase in trade and other payables 734 212 160 Cash generated from operations 5,269 8,785 4,191Interest received from developments 107 219 102Taxation paid - (34) - Net cash flow from operating activities 5,376 8,970 4,293 Investing activities Receipts from disposal of investment properties 465 7,711 -Payments to acquire investment properties (12,891) (25,770) (10,459)Development loans advanced (1,133) (2,612) (749)Bank interest received 28 47 12Acquisition of subsidiary (30,393) - - Net cash flow from investing activities (43,924) (20,624) (11,196) Financing activities Expenses on issue of shares (5) (4) (4)Cash received on exercise of Management Options 2,726 - -Term bank loan 40,450 24,000 13,200Interest paid (3,128) (6,678) (3,897)Equity dividends paid (1,639) (2,803) (1,272) Net cash flow from financing activities 38,404 14,515 8,027 (Decrease)/increase in cash and cash equivalents for (144) 2,861 1,124the period Cash and cash equivalents at start of period 3,973 1,112 1,112 Cash and cash equivalents at end of period 3,829 3,973 2,236 NOTES: 1. Accounting Policies Basis of preparation/ Statement of compliance The Group's financial statements for the six months to 31 December 2006 havebeen presented under International Financial Reporting Standards ("IFRS") asadopted by the European Union and on the basis of the accounting policies setout in the statutory accounts for the year ended 30 June 2006, which are alsoexpected to apply for the period ending 31 December 2007.This report is preparedin compliance with IAS34:"Interim Financial Reporting". The financial information contained in this report does not constitute statutoryaccounts within the meaning of Section 240 Companies Act 1985. The auditors'report on the full financial statements under section 235 Companies Act 1985,for the year ended 30 June 2006, did not contain a statement under Section 237(2) or (3) Companies Act 1985. This audit report, which was unqualified, wasdelivered to the Registrar of Companies together with financial statements forthe year ended 30 June 2006. Convention The financial statements are presented in Sterling rounded to the nearestthousand. Segmental reporting The Group operates under one business segment and one geographical segment,being investment in primary health care property within the United Kingdom. Basis of consolidation The Group's financial statements consolidate the financial statements of PrimaryHealth Properties PLC and its wholly owned subsidiary undertakings. Subsidiariesare consolidated from the date of their acquisition, being the date on which theGroup obtained control and continue to be consolidated until the date that suchcontrol ceases. Control comprises the power to govern the financial andoperating policies of the investee so as to obtain benefit from its activitiesand is achieved through direct or indirect ownership of voting rights; currentlyexercisable or convertible potential voting rights; or by way of contractualagreement. The financial statements of the subsidiary undertakings are preparedfor the accounting reference period ending 31 December each year, usingconsistent accounting policies. All intercompany balances and transactions,including unrealised profits arising from them, are eliminated. Conversion to UK-REIT The Group's conversion to UK REIT status was effective from 1 January 2007. Conversion to a UK-REIT means that, where the relevant UK-REIT criteria are met,the Group's property profits, both income and gains, should be exempt from UKtaxation from 1 January 2007. The deferred tax liabilities as at 31 December2006 of £30.0m are therefore released with £29.6m credited to the Group IncomeStatement and £0.4m taken direct to the cashflow hedging reserve. On conversion to UK-REIT, the Group is subject to a taxation charge based on thevalue of properties as at the date of conversion, amounting to £5.2m. The amountis payable over four years. Change of accounting reference date The Group changed its accounting reference date to 31 December, with effect from1 January 2007. The current accounting reference period, which commenced on 1July 2006, will therefore comprise 18 months ending 31 December 2007. Inaddition to these interim financial statements for the six months ended 31December 2006, the Group will prepare a second interim report for the six monthsending 30 June 2007 and final financial statements for the 18 month periodending 31 December 2007. 2. Acquisition of Cathedral Healthcare (Holdings) Ltd ("CHH") On 22 December 2006, the Group exchanged contracts to acquire 100% of CHH for acash consideration of £30.9m. CHH was the holding company of a group ofcompanies that owned nine primary healthcare facilities across the UK which havebeen incorporated into the Group portfolio. Of the nine facilities, three are under construction and are expected to becompleted by 31 December 2007. In addition, two of the completed facilities areundergoing extension work, which is expected to be finished in 2007. Consideration of £30.9m was paid upon completion. Cash acquired upon acquisitionof CHH amounted to £0.2m. The total gross assets acquired once fully developed are expected to amount to£39.2m. These assets are expected to generate a total annual rental income ofapproximately £2.0m, reflecting an initial yield of approximately 5%. Details of the acquisition of CHH: £'000 Total cost of acquisition 30,852 Investment and development property acquired (30,825) Other net liabilities acquired 5,312 Goodwill arising on acquisition 5,339 Prior to the acquisition of CHH, the investment and development properties wereincluded in the books of CHH at £21.5m. A fair value exercise was carried out byLambert Smith Hampton as at 1 December 2006 resulting in an uplift in value ofthese properties of £9.3m to £30.8m. A deferred tax liability arose on thisuplift of £2.8m. As the Group paid consideration equal to the value of the acquired properties,goodwill arises in respect of the other assets and liabilities, principally adeferred tax liability of £4.9m. On conversion to UK-REIT, the deferred taxliability is eliminated resulting in an impairment of goodwill arising onacquisition. The impact of post-acquisition trading on the Group Income Statement is notmaterial. 3 Investment Properties The freehold, leasehold and development properties have been independentlyvalued at fair value by Lambert Smith Hampton Chartered Surveyors and Valuers,for the six months ended 31 December 2006. The revaluation gain for the six months ended 31 December 2006 amounted to£13.4m. Property additions during the period amounted to £45.3m (including the acquiredCHH properties of £30.8m). Properties disposed of during the period, valued at£0.4m as at 30 June 2006, realised a gain of £0.04m. 4 Earnings per share The calculation of basic and diluted earnings per share as at 31 December 2006 is based on the following: Earnings per share as at 31 December 2006 Net profit Ordinary Per share attributable to shares pence Ordinary (weighted Shareholders average) £'000 number Basic and diluted earnings per 29,553 23,573,370 125.4share Adjusted earnings per share as at 31 December 2006 Net profit Ordinary Per share attributable to shares pence Ordinary (weighted Shareholders average) £'000 number Basic and diluted earnings per share 29,553 23,573,370 125.4 Adjustments to remove:Incentive fee accrual 752Goodwill impairment 5,339UK-REIT conversion charge 5,157Deferred tax charge 3,880Deferred tax release (29,622)Net valuation gains on valuation of property (13,442) Adjusted basic and diluted earnings per share 1,617 23,573,370 6.9 Following the exercise of the Management options by the Joint Managers on 21September 2006, there is no dilution. Earnings per share as at 30 June 2006 Net profit Ordinary Per share attributable to shares pence Ordinary (weighted Shareholders average) £'000 number Basic earnings per share 15,937 22,667,946 70.3 Option exercise* - 861,960 ** Diluted earnings per share 15,937 23,529,906 67.7 Adjusted earnings per share as at 30 June 2006 Net profit Ordinary Per share attributable to shares pence Ordinary (weighted Shareholders average) £'000 number Basic earnings per share 15,937 22,667,946 70.3 Adjustments to remove:Deferred tax charge 2,931Net valuation gains on valuation of (14,997)property Adjusted basic earnings per share 3,871 22,667,946 17.1Option exercise* - 861,960 ** Adjusted diluted earnings per share 3,871 23,529,906 16.5 Earnings per share as at 31 December 2005 Net profit Ordinary Per share attributable to shares pence Ordinary (weighted Shareholders average) £'000 number Basic earnings per share 7,726 22,658,334 34.1 Option exercise* - 782,328 ** Diluted earnings per share 7,726 23,440,662 33.0 Adjusted earnings per share as at 31 December 2005 Net profit Ordinary Per share attributable to shares pence Ordinary (weighted Shareholders average) £'000 number Basic earnings per share 7,726 22,658,334 34.1 Adjustments to remove:Deferred tax charge 1,639Net valuation gains on valuation of (7,837)property Adjusted basic earnings per share 1,528 22,658,334 6.7Option exercise* - 782,328 ** Adjusted diluted earnings per share 1,528 23,440,662 6.5 * Excess of the total number of potential shares on option exercise over thenumber that could be issued at fair value as calculated in accordance withInternational Accounting Standard No.33: Earnings per share. ** All Management Options were exercised in full on 21 September 2006. The purpose of calculating an adjusted earnings per share calculation is toprovide a better indication of the normalised pre-tax tax trading performancefor the period. 5 Performance incentive scheme On 16 November 2006, Shareholders approved the amendments to the ManagementAgreement whereby the Joint Managers will be entitled to a performance incentivefee of 15% of any performance in excess of an 8% per annum increase in theCompany's "Total Return" as derived from the audited financial statements forthe respective financial period. The Total Return shall be determined by comparing the variation in the statednet asset value per share (on a fully diluted basis, adjusting for deferred taxand the REIT conversion charge and adding back gross dividends paid or declaredin such period) against the fully diluted net asset value per share from theprevious period's audited accounts. Included in Administration Expenses within the Income Statement is an estimatedincentive fee expense of £752,000. This amount has been calculated based on 50%of the expected performance incentive fee for the 12 month period to 30 June2007. 6. Dividends paid Dividends paid in the period are as follows: No of shares Six months to Year to Six months to dividend paid 31 December 30 June 31 December upon 2006 2006 2005 £'000 £'000 £'000 Final dividend for the year 1,639 - -ended 30 June 2006 (6.75p) 24,277,718Interim dividend for the year - 1,531 -ended 30 June 2006 (6.75p) 22,677,718Final dividend for the year - 1,359 1,359ended 30 June 2005 (6.0p) 22,677,718 1,639 2,890 1,359 The Directors propose to pay a dividend of 7.5p per Ordinary Share for the sixmonths to 31 December 2006, payable on 22 May 2007, amounting to £1,820,829. 7. Taxation 31 December 2006 30 June 2006 31 December 2005 £'000 £'000 £'000 Taxation in the Income Statement:Current tax UK Corporation tax - 181 -Adjustment in respect of prior year - (646) -UK-REIT conversion charge 5,157 - - 5,157 (465) - Deferred tax Deferred tax charge for the period 3,880 2,931 1,639Deferred tax release on conversion to UK-REIT (29,622) - -(see note 1) (25,742) 2,931 1,639 Taxation (credit)/charge in the Income (20,585) 2,466 1,639Statement Taxation in the Balance Sheet:Deferred tax liability - on timing differences - 6,186 5,045 - on revaluation gains - 14,605 14,454 - on derivative interest rate swaps - 402 (569) Deferred tax liability at end of period - 21,193 18,930 8. Net asset value calculations Net asset values have been calculated as follows: 31 December 2006 30 June 2006 31 December 2005 £'000 £'000 £'000 (unaudited) (audited) (unaudited) Net assets per Group Balance Sheet * 102,187 71,325 62,286Add - Receipts from the exercise of Management Options - 2,736 2,736 Diluted net assets 102,187 74,061 65,022 No. of shares No. of shares No. of sharesOrdinary shares:Issued share capital * 24,277,718 22,677,718 22,677,718Add - New shares issued assuming the exercise of the Management Options - 1,600,000 1,600,000 Diluted number of Ordinary Shares 24,277,718 24,277,718 24,277,718 Net asset value per share 420.9p 314.5p 274.7pDiluted net asset value per share 420.9p 305.1p 267.8p * figures for basic net asset value calculations Calculations assume that the dilution takes place on the respective balancesheet dates. Following the exercise of the Management Options by the Joint Managers on 21September 2006, there is no dilution and therefore there is no differencebetween the basic and diluted net asset values as at 31 December 2006. Diluted adjusted net asset values per share 31 December 2006 30 June 2006 31 December 2005 £'000 £'000 £'000 (unaudited) (audited) (unaudited) Net assets per Group Balance Sheet * 102,187 71,325 62,286Adjustments to add back:Deferred tax on timing differences - 6,186 5,045Deferred tax on revaluation gains - 14,605 14,454Deferred tax on derivative interest rate swaps - 402 -Adjustment to remove:Deferred tax on derivative interest rate swaps - - (569) Adjusted net assets 102,187 92,518 81,216 Add - Receipts from the exercise of Management Options - 2,736 2,736 Diluted adjusted net assets 102,187 95,254 83,952 No. of shares No. of shares No. of sharesOrdinary shares:Issued share capital * 24,277,718 22,677,718 22,677,718Add - New shares issued assuming the exercise of the Management Options - 1,600,000 1,600,000 Diluted number of Ordinary Shares 24,277,718 24,277,718 24,277,718 Adjusted net asset value per share 420.9p 408.0p 358.1pDiluted adjusted net asset value per share 420.9p 392.4p 345.8p * figures for basic net asset value calculations There is no difference between the normal and adjusted net asset values as at 31December 2006, due to the release of all deferred tax liabilities due toconversion to UK-REIT. Calculations assume that the dilution takes place on the respective balancesheet dates. Following the exercise of the Management Options by the Joint Managers on 21September 2006, there is no dilution as at 31 December 2006 and therefore thereis no difference between adjusted basic and diluted net asset values as at 31December 2006. 9. The Interim Report will be posted to Shareholders on 3 April 2007, and tothose on the mailing list as soon as practicable thereafter. It will also beavailable on request from the Company Secretary, J O Hambro Capital ManagementLimited, Ground Floor, Ryder Court, 14 Ryder Street, London, SW1Y 6QB. END This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Primary Health