30th Nov 2006 08:39
Quintain Estates & Development PLC30 November 2006 Correction - Amendment to date headings in financial highlights (Profit and Loss Account and Balance Sheet). Second column should read 2005. 30 November 2006 Quintain Estates and Development PLC ("Quintain"/"Company"/"Group") Interim Results for the six months ended 30 September 2006 Quintain reports good progress with 18% rise in pre-tax profits Highlights • Profit before tax excluding discontinued items up 18.3% to £5.6m (£4.7m)• Earnings per share before discontinued activities up 22.6% to 3.8p (3.1p)• Earnings per share after discontinued activities up 171.4% to 3.8p (1.4p)• Interim dividend up 7.7% to 3.5p (3.25p)• Good progress in the year to date across the Group's three business areas: o Special Projects • Construction commenced on first residential building at Wembley • First land sale at Greenwich • BioRegional Quintain: Agreement signed for first phase development at Middlehaven o Quintain Fund Management • Healthcare funds under management increased to £530.0m • Strong interest in proposed new student accommodation fund o Investment Portfolio • £24.1m of investment properties acquired • £15.3m proceeds from property disposals• John Plender to become Chairman from 1 April 2007• Tonianne Dwyer, Head of Quintain Fund Management, appointed to the Board with immediate effect. Nigel Ellis, Chairman of Quintain, commented: "This is the last statement I shall be making to shareholders and I am delightedto report that we have continued to make good progress in the six months underreview. Our activity at Wembley continues to accelerate and we have madeencouraging progress in our Fund Management division. We are confident thatQuintain is strongly positioned to deliver significant growth in the future." For further information, please contact: Quintain Estates and Development PLCRebecca Worthington/Hilary Reid Evans 020 7495 8968 Financial DynamicsStephanie Highett/Dido Laurimore 020 7831 3113 Financial highlights for the six months to 30 September 2006 Profit and Loss Account 30 Sept 30 Sept Annual Year to 2006 2005 change 31 March % 2006Group turnover (£000) 20,253 20,509 (1.2) 42,051 Profit before tax and 5,583 4,721 18.3 64,953discontinued operations(£000)Profit before tax and after 5,531 1,580 250.0 60,911discontinued operations(£000)Basic earnings per share(pence)Before discontinued operations 3.8 3.1 22.6 46.1After discontinued operations 3.8 1.4 171.4 43.9Dividends per share (pence) 3.5 3.25 7.7 10.5 Balance Sheet 30 Sept 30 Sept Annual As at 2006 2005 change 31 March % 2006Basic net asset value per share 525 431 21.8 526(pence)Diluted net asset value per 516 424 21.7 516share (pence)Gearing (%) 39 39 36 CHAIRMAN'S STATEMENT Our results for the six months to 30 September 2006 demonstrate that goodprogress continued to be made across the Group's divisions during the periodunder review. Our confidence in the Group's ongoing ability to deliver increasedvalue is demonstrated by the fact that the Board is once again increasing theinterim dividend, by 7.7% to 3.5p. Business overview We are, for the first time, including an Operating and Financial Review at thehalf-year stage. Although the detailed report on the progress of our activitiesis contained in this section, a commentary on the highlights of the period isincluded below. In our Special Projects division, we have moved from the planning to theimplementation stage of our major regeneration projects. At Wembley, forexample, we have started work on construction of our first building, which isprimarily residential. Sales of the private residential units it contains havebeen highly successful with contracts having been exchanged for 116 of the 145private apartments and a further 15 units reserved. Despite the challenge of finding deals offering good value in the current marketconditions, we have invested £75.4m in the period on new property, includingbuildings for the planned new student accommodation fund, 'iQ'. The search forfurther opportunities is ongoing. Quintain Fund Management continues to expand its activities, not only growingits funds under management in the first half but also making good progress inthe extension of its business into the specialist areas of student accommodationand science parks. Performance Although, as previously, we have not formally valued the property portfolio atthe half year, the directors have, in conjunction with our valuers, undertakenan informal review of the portfolio, focusing on the most significant assets.This review resulted in the value of Wembley rising by £31.2m to £435m, anincrease of 7.7%, after taking account of expenses in the period. Over the sameperiod, the value of our investment at Greenwich increased by 19% or £27.7m,after allowing for additional expenditure, to £175m. From next year we will becarrying out a formal revaluation of the portfolio at the half year which willbe included in the interim results. Overall, our approach to property valuation remains conservative, althoughmarket dynamics are taken into consideration when valuing our propertyportfolio. Share capital Our share buyback programme remains in place. During the period, we purchased atotal of 1 million shares in the market, at an average price of 604p inclusiveof costs, which are being treated as treasury shares. These purchases wereeffected in order to hedge a proportion of our liabilities in relation tovarious share incentive schemes. Share price During the six month period, our share price rose by 2.9% and closed at 700p on30 September 2006. Since then, we have seen continued rises with the sharesclosing at 839p on 29 November 2006. Over the six months to 30 September 2006,our share price underperformed the FTSE Real Estate Index by 2.1% butoutperformed the FTSE 350 Index by 2.78%. From 1 April 2006 to 28 November 2006,however, the Group's share price outperformed the FTSE Real Estate Index and theFTSE 350 Index by 7.0% and 18.9% respectively. The Board I have been Chairman of Quintain for over 11 years now. During this time, Ibelieve that the Company has achieved excellent returns for its shareholders andpositioned itself as one of the UK's leading development and regenerationcompanies. However, given the length of time I have been in office and the factthat I am 67 years old, I feel it is now time to stand down as Chairman andtherefore will be doing so on 31 March 2007. Thereafter, I shall remain on theboard as a non-executive director until the Annual General Meeting in 2007, atwhich time it is not my intention to seek re-election. I am delighted to report that John Plender, who has been a non-executivedirector of the Company since July 2002, will take over from me as Chairman from1 April 2007. John, a Chartered Accountant by training, is a highly respectedfinancial commentator and will bring to the role his wide experience ofinvestment and corporate governance matters. I am immensely proud of all that the Group has achieved since listing in 1996and will continue to watch its progress with enormous interest. As a reflection of Quintain Fund Management's success and its increasingsignificance to the Group, the Directors have asked Tonianne Dwyer to join theBoard with immediate effect. Tonianne, who has headed Quintain's fundmanagement business since she joined Quintain in June 2003, qualified as asolicitor and barrister in Western Australia. Prior to joining the Company, shewas employed from 1987 to 2003 by SG Hambros Bank in their corporate financedivision, latterly as a director. As ever, we are highly dependent on our people to deliver our success and arefortunate in having an outstanding team of executive directors and staff whom Iwould like to thank for their hard work. Outlook The Company has made good progress across the business in the first half. Ouractivity at Wembley continues to accelerate, our Investment Portfolio has made anumber of acquisitions, where we perceive potential to enhance value, and wehave made ongoing encouraging progress in our Fund Management division. We are confident that Quintain is strongly positioned to continue to deliversignificant growth in the future. Nigel EllisChairman30 November 2006 OPERATING AND FINANCIAL REVIEW Significant progress has been made on our major projects, yet Quintain remainsambitious. This is part of our culture. We continuously seek out sectors andsituations where our particular skills can add value and where we can continueto be highly entrepreneurial. This is central to our strategy. During the period under review, the Group has made good progress across each ofthe three business areas in which we operate. Special Projects This business encompasses our major regeneration projects at Wembley and atGreenwich, as well as other significant development schemes including City ParkGate Birmingham, Emerson's Green Bristol and Silvertown London. We also have ajoint venture, Bioregional Quintain, which seeks to lead the market in thecreation of sustainable zero carbon communities. Quintain benefits from thisassociation when presenting the increasingly important environmental impactaspects of our proposals for future regeneration projects. Investment Portfolio This business comprises an income producing secondary investment propertyportfolio with the potential to create capital value through active managementincluding lease renewals, restructuring, marriage value and refurbishment. Theportfolio is spread throughout the UK and is currently composed primarily ofoffice and industrial properties. Quintain Fund Management Also known as QFM, Quintain Fund Management co-invests in specialist sectorssuch as healthcare, student accommodation and science parks. Quintain benefitsthrough these funds from asset management, transaction and performance-relatedfees. Our objectives and our strategy Our objectives are straightforward - they are to outperform the InvestmentProperty Databank ("IPD") benchmark and to make a real total shareholder returnof at least 10%, measured by the increase in net asset value per share addingback the dividend. Over the ten years to 31 March 2006, Quintain's performancewas in the top percentile of IPD. Our strategy is to continue to apply our rigorous stock-picking approach,focusing on the financial characteristics of properties to identify assets andspecial situations where we can use our skills to add value. With regard to oururban regeneration portfolio, we are pioneering the concept that ownership offreeholds or long leaseholds affords the opportunity to run towns as businesses,creating diverse income streams including the exploitation of non-rentalcommercial opportunities such as advertising, naming rights, telecommunicationsand power. While property market conditions remain ambiguous, we continue to exercisecaution. Our strategy remains to sell when we judge we can no longer add valueand to reinvest the proceeds into areas that offer the potential for greaterreturns. Performance As in previous years, we have not undertaken a formal valuation of the propertyportfolio at the half year. However, the directors have carried out, inconjunction with our valuers, an informal review of the portfolio, withparticular focus on the major special projects. We are pleased to report that,on this basis, the total value of Wembley rose by £31.2m or 7.7% over the firsthalf year to £435m. During the same period, the value of our landholding andparticipation in Meridian Delta Limited increased by £27.7m (19%) to £175m. Asfrom next year we intend to carry out a formal revaluation of the portfolio atthe interim stage which will be reflected in the accounts. Special Projects Wembley - We have continued to make good progress at Wembley. Construction beganduring the half year on the first residential development, currently known asW01. This mixed-use development will house a total of 286 apartments on thefirst floor and above, of which 86 will be shared ownership and 55 will besocially rented. A joint venture was signed with the Genesis and Family HousingAssociations during August in relation to this block. Contracts for 116 of the145 private apartments have been exchanged to date and a further 15 reserved. Discussions are ongoing with a number of prospective partners regarding theformation of joint ventures for a further four residential blocks. Following the success of W01, we have now made a reserved matters application toBrent Council for a further 636 apartments for those blocks known as W03 andW04. It is intended that W03 will be a 100% private residential development.Subject to the success of this application, we hope to begin construction ofthese buildings during the next calendar year. It is also anticipated thatduring the course of 2007 reserved matters applications will be made for a4-star 400 room Hilton Hotel. This application is linked to the signing of adevelopment agreement for approximately 660 student units. Both developmentsform part of the same structure and are at the design and costing stage. The acquisition of the 3-star Hilton Plaza Hotel, which is adjacent toQuintain's existing Wembley landholdings, took place during the six months to 30September 2006. We are also in discussions with a number of parties regarding the formation of aretail joint venture. The Wembley development includes planning consent for560,000 sq ft of retail, 350,000 sq ft of leisure facilities and 167,000 sq ftof bars and restaurants, with the first phase of the retail offer currentlyscheduled for opening by September 2010. We are exploring a number of innovative opportunities to exploit the commercialrights presented by our ownership at Wembley. For example, a 'request forproposal' was issued in September to a number of interested parties and partnersare currently being sought for the various utilities required for the Wembleyscheme. This will enable us to minimise the risks involved whilst gainingfunding from the successful partners. Demolition of the Wembley Conference Centre, Elvin House and Exhibition Halls 1and 2 began in late summer, with work scheduled for completion in mid-2007.Tenants from Elvin House have been relocated to the York House office building. Following the August 2006 decision by Brent Council to withdraw its applicationfor consideration of the borough as a location for the one 'Super' casino, wehave made good progress with our alternative plans and it is expected that aplanning application for a further 1.6m to 2.2m sq ft of mixed use developmentwill be submitted in relation to this site in autumn 2007. The refurbished Wembley Arena has successfully attracted a large number ofartists since its reopening in April 2006. Managers Live Nation are reporting arunning rate of 170 shows per annum, making this the busiest year for the Arenain over a decade. The completed Arena Square is also becoming a performance destination in its ownright, with the Square of Fame concept proving popular with both artists and thepublic since its introduction in September 2006. Popular music icons Madonna andCliff Richard have had their handprints immortalised in the Square and a numberof other artists are expected to participate during the coming months. Since itsopening Arena Square has hosted a number of other events including a Bollywooddance celebration. The valuation of the Group's holdings at Wembley remains largely landsales-based, with adjustments made to that valuation as and when joint venturesor developments crystallise. In the current market conditions, we believe thatthese valuations are both prudent and conservative. Greenwich - We believe that the rate of progress is now set to accelerate atGreenwich, where, in conjunction with our 51 per cent joint venture partner LendLease we are regenerating the 190 acre Peninsula. This scheme has an estimatedgross development value of £5bn. We have secured the first land sale to BellwayHomes, which will deliver a high-quality block of 229 riverside apartments onthe southern part of the site. Overlooking the Thames, the apartments will beadjacent to Greenwich Millennium Village and in close proximity to the retailand community facilities already on the Peninsula. Subject to reserved mattersconsent, Bellway anticipates starting on site in 2007 with the apartments readyfor occupation in 2009. Meridian Delta Limited is currently in negotiationsregarding two further plots, which lie to the south and to the north east of thePeninsula. In the north west of the area, Quintain and Lend Lease are progressing theirintended joint venture to develop Peninsula Quays, as principals. We are in theprocess of selecting a Chief Executive for the joint venture to deliver thisscheme. The land has consent for 3.2m sq ft of mainly residential space andrepresents the opportunity for the development of prime residential properties,with substantial river frontage, views across to Canary Wharf and the City, andwithin a short walk of the Underground and other transport links. The new Peninsula Square (previously known as Millennium Square) is expected toopen in early 2007. A giant sculpture, the Peninsula Spire, which will form afocal point for the redevelopment of the area, was erected in the square in lateOctober. Silvertown - The Carlsberg Tetley lease on this 330,000 sq ft mixed-useindustrial estate expired in October, giving Quintain vacant possession. The 12acre site is strategically located at the gateway to the Olympic lands anddiscussions are taking place with our partners, the London Development Agency,to combine this in a larger scheme, part of which is expected to provide spacefor occupiers relocated from the Olympics lands. The site, which has bothwharfage and easy waterfront access to the Olympics construction areas, providessubstantial potential for related development. We are also continuing ourmasterplanning initiatives for the delivery of a major mixed-use community, post2012. City Park Gate, Birmingham - During 2005, Quintain signed a DevelopmentAgreement with Birmingham City Council, in joint venture with CountrysideProperties plc , to develop out this four acre site, which is immediately to theeast of the Bull Ring and Moor Street Station. Although the site has an existingoutline consent, for 630,000 sq ft, we have filed a further outline applicationfor a total of 1m sq ft, including up to 844 apartments. Enabling work has begunon site for this scheme. Emerson's Green, Bristol - Quintain owns 26 hectares (65 acres) of a 106 hectaresite at Emerson's Green, which has been designated as mixed-use by the LocalAuthority. The current proposal includes the creation of 2,650 dwellings,employment, retail and supporting facilities. Quintain has delayed agreeing arevised planning application pending an equalisation agreement with adjoininglandowners and clarity on S106 and affordable housing requirements. We areexcited by the potential to exploit synergies with this development as Quantum,Quintain's specialist science park partnership with Morley Fund Management, isnow close to signing an 800,000 sq ft development agreement, having beenselected in April 2006 as the preferred developer for adjacent land at Emerson'sGreen by the South West of England Regional Development Agency. Gracechurch Street, London and Arundel Gate, Sheffield - After 31 March 2006,contracts were completed for the sale of 36-41 Gracechurch Street, EC3 for£24.75m, giving rise to a profit on valuation of £3.5m and on book cost of£5.4m. Contracts were also completed for the sale of Arundel Gate, Sheffield, amulti-let retail and leisure property, for £9.0m, giving rise to a profit onvaluation of £0.4m and £2.1m on book cost. BioRegional Quintain - BioRegional Quintain continues to make good progress.BioRegional Quintain is a joint venture with BioRegional Properties Limited,whose objective is to build sustainable communities. Quintain has the right tofund all developments by way of loan stock. • Brighton - In joint venture with Crest Nicholson plc, BioRegional Quintain is expected to deliver 172 residential units, including affordable housing, 24,000 sq ft of commercial space and 10,000 sq ft of pre-let community space. The grant of planning consent is expected in early 2007. • Middlehaven, Middlesbrough - In November 2006 BioRegional Quintain signed a development agreement with English Partnerships and Tees Valley Regeneration for a first-phase mixed use development of 765 residential units, 200,000 sq ft of offices and 70,000 sq ft of leisure and retail space on a 40-acre site. We believe this will be the largest zero carbon development in the UK. Grant funding for the development has been approved by The Treasury. • West Molesley, Surrey - In joint venture with Crest Nicholson, BioRegional Quintain is the preferred developer for the delivery of 100 residential homes. Investment portfolio Of the £75.4m of acquisitions undertaken by the Group during the first half ofthe year, £24.1m were investment properties, purchased at an average net initialyield of 8.34%. Acquisitions on behalf of both Special Projects and QuintainFund Management amounted to £51.3m. Investment portfolio property disposals in the period generated proceeds of£15.3m at an average yield of 4.1%, which generated profits of £0.9m over bookvalue. We expect the sales rate to increase in the second half of the year. The letting market remains challenging except for good quality space in primelocations. Successes include Leamington Spa, Maldon, Birmingham, Colchester andLeeds. At the Royal Exchange, Manchester, practical completion has been received and wecontinue to target high quality retail operators on a flexible leasing basis. Quintain Fund Management Quintain Fund Management ("QFM") has continued to make good progress in thefirst half of the year. Quercus, our healthcare fund, continues to perform well, with resultsunderpinned by the continuing strength of the healthcare market. Funds undermanagement grew to £530.0m. Total properties purchased in the period were£25.7m. Since the period end we have acquired properties valued at a further£50.2m. The fund currently comprises 206 properties, which are leased to 33tenants, who operate nursing homes, learning disability and specialist carefacilities and private hospitals. Net asset management fees received during thehalf amounted to £0.7m, with performance fees to be determined during the secondhalf year. During the the current financial year, Quintain has to datecommitted a further £7.3m of equity to Quercus. We anticipate investingadditional equity during the first quarter of the next calendar year. Quantum Property Partnership, a science park fund which is operated as a jointventure with Morley Fund Management, is expected to sign a development agreementshortly with South West Regional Development Agency in relation to the Bristoland Bath Science Park. The science park will be located on 54 acres of landadjacent to Quintain's own landholding at Emerson's Green, Bristol. Quantumwill fund and procure primary infrastructure and associated servicing for thefirst phase of the park, including a 35,000 sq ft innovation centre and 20,000sq ft of 'grow on' space for companies as they expand. Later phases of thedevelopment will be market led. Several other interesting opportunities are alsobeing pursued. Preparation for iQ, our proposed student accommodation fund, is progressingwell. Development of the first schemes, in Sheffield and Nottingham, has beencompleted, with both properties opening on time and very well received bystudents and the Universities. Both properties are performing aboveexpectations, with the Sheffield scheme running at full occupancy and theNottingham scheme at 97.5%. Nottingham has a rent guarantee in place for thefirst year of operation. We have also exchanged on schemes in Birmingham,Salford and Kingston, which will have a combined value on completion of £73m.Construction is well underway on all sites with Birmingham and Salford due forcompletion in late summer 2007, and Kingston in late summer 2008. We haveagreed terms on a further £195m of schemes for delivery over the next threeyears and have a strong pipeline of further opportunities. Our strategy, whichis to build a pipeline of investments on our own balance sheet before seeking tolaunch a fund, has been rewarded by the strong interest shown in partnering withus. We have narrowed the field to three potential partners and expect to moveinto final negotiations in the short term. Longer term, consideration is being given to further fund opportunities,including in relation to residential property. People Nigel Ellis will stand down as Chairman at the end of this financial year. Hehas provided wise counsel and invaluable support to the Company over the last 11years, a time which has seen significant change across the business. We owe himan immense debt of gratitude both corporately and personally for which I wish toconvey my huge thanks. John Plender will step up from his non-executive position to take on this rolefrom 1 April 2007. Since joining the Board in July 2002, John has gained therespect of all and I look forward to working with him in his new role as ourChairman. Outlook The Group has continued to make good progress during the first half. Activitiesat Wembley are progressing rapidly and developments are in line with ourexpectations. Both the investment portfolio and QFM are performing well andBioRegional Quintain is proving its potential with projects such as Brighton andMiddlehaven. This performance underpins our belief we can continue to delivershareholder value in the future. We consider that few companies have the opportunity to significantly enhancetheir net asset value against a background of stabilising total returns in theproperty market. We believe that Quintain is a notable exception and lookforward to a continuing track-record of market out-performance. FINANCIAL REVIEW Headline results Earnings per share rose by 171% to 3.8p per share (30/9/05: 1.4p). Excludingdiscontinued items earnings per share of 3.8p were 23% ahead of last year's 3.1pper share. Profits before tax excluding discontinued items rose by 18% to £5.6mfrom £4.7m in the comparable period. Reported net assets per share were 525p per share (year to 31 March 2006: 526p).This reflects the dividend accounted for in the period in which it was paid. Norevaluations are incorporated for the interim. From next year we intend to carryout a formal revaluation at the interim stage and reflect these in the accounts.Adjusted diluted net asset per share, the measure recommended by EPRA was 609p(year to 31 March 2006: 612p). Income Statement Gross rental income for the half year fell by 11.6% to £13.1m (30/9/05: £14.8m).This reflects the continued investment property sales programme. Income lostfrom sales was £3.9m against which purchases contributed £1.1m and theguaranteed payment from Wembley Arena added £1.8m. Rents passing at 30 September2006 for the directly owned portfolio totalled £25.6m, with an estimated rentalvalue (ERV) of £35.1m. Voids overall are marginally down, however the unintentional element hasincreased to 14.9% of ERV (31 March 2006: 8.0%). This includes properties thatwere previously being refurbished but are now available to be let such as theRoyal Exchange at Manchester (£0.8m) and The Synergy Building in Sheffield(£0.9m). Planned voids in relation to development opportunities make up 6.7% ofERV (31 March 2006: 15.4%). Income from leisure operations related to the ongoing Wembley businesses, whichdelivered a profit of £0.7m (30/9/05: £0.5m), mainly from the Sunday market. Thefirst-time income from hotel operations of £0.4m is for one month's contributionfrom the Plaza Hotel at Wembley. This is a Hilton operated hotel that wasacquired as part of a strategic deal with Hilton to build a 4-star 400 bedhotel. Profit from other revenue rose to £3.5m from £1.5m. Of this fees after costsfrom Quercus generated £0.7m. A surrender premium of £1.7m was received in theperiod in relation to Smallbrook Queensway of which £0.5m is being invested inrefurbishment. The property derivative contributed a profit of £0.9m. This £15mcontract for difference runs to February 2007 with LIBOR swapped against the AllProperty IPD Index to 31 December 2006. Continuing administration expenses increased by 16% to £14.5m (30/9/05: £12.5m).Discontinued administration expenses were £0.6m (30/9/05: £1.4m). The majorincreases were professional fees (£0.4m), office costs (£0.4m) and bonuses(£0.3m) and related to the increased overall level of operational activitywithin the Group. Further information is given in note three to the accounts. Profit over valuation on the disposal of non-current assets was £7.8m (30/9/05:£6.9m). The largest contributors being £3.5m on the sale of 36-41 GracechurchStreet, London, EC3 and £3.0m on the disposal into a joint venture of the landfor the first residential plot at Wembley. Proceeds on sales were £56.7m with aprofit on historic cost of £16.6m. Net finance expenses were £3.6m (30/9/05: £6.1m). Of this, the change in fairvalue of our forward start swaps gave rise to a profit of £0.2m compared with aloss of £1.6m in the same period last year. Further details are given in thetable below. Of the interest capitalised, £2.6m related to Wembley and £0.9m toGreenwich. 30 September 30 September 2006 2005 £m £mInterest payable 9.1 8.8Interest capitalised (4.3) (3.6)Interest receivable (1.0) (0.7)Change in fair value ofineffective interest rateswaps (0.2) 1.6Net finance expenses 3.6 6.1 The profit from joint ventures in the six months was £2.0m (30/9/05: £2.3m). Ofthis £2.1m came from our 28.3% ownership in Quercus (30/9/05: £1.8m). The schemeat Merton Abbey Mills, which is now materially sold, contributed £0.5m in theprior period. Our effective tax charge has been included in the interim accounts at 20% basedon our best estimate of the charge for the full year. This remains below thestandard rate of 30% due to the availability of balancing allowances onproperties sold, indexation and capitalised interest. Balance Sheet At 30 September, excluding directors' valuations, the book value of investmentproperties was £327.5m (30/9/05: £296.6m) and the book value of developmentproperties was £612.5m (30/9/05: £489.4m). During the six months £18.0m ofcapital was invested and acquisitions of £75.4m made. Against this disposalswith a book value of £46.6m gave sale proceeds of £56.7m. Capital commitments of £116m include £60m for student accommodation, where wehave committed to buy properties currently under construction subject to theirdelivery on time and to an agreed quality. We anticipate these commitments willbe passed on to the iQ fund before the end of the financial year. During the six months, the Employee Benefit Trust purchased 500,000 shares at anaverage price of 607p to cover allocations under the Executive Directors'Performance Share Plan. Quintain also purchased 500,000 treasury shares at anaverage price of 590p to cover obligations under various share incentiveschemes. Of the £127.7m net investment in joint ventures, £90.3m relates to our 28.3%share in Quercus, the healthcare fund. Whilst our holding on the GreenwichPeninsula is included within development properties, Meridian Delta Limited, thecompany charged with overseeing the redevelopment of the Peninsula, which isowned 49% by Quintain and 51% by Lend Lease, is treated as a joint venture. Ourcurrent investment in this is £26.3m. Other joint ventures includeQuintessential Homes (WO1), City Park Gate, BioRegional Quintain and South EastProperties (Redhill) Limited. Our gearing level was 39% at 30 September 2006, compared with 36% at theprevious year end. Of the £261.0m of net debt, 63% is hedged with swaps. During the period we amended some of the covenants on our £475m corporate loan.The banks removed the requirement for the loan to be matched 1:1 with investmentproperties and in return we reduced the maximum gearing limit from 130% to 110%.These changes give us the flexibility to use the funds for our regenerationprojects. Cashflow Statement The increase in cash and cash equivalents of £13.9m mainly came from financingactivities, with net investment offsetting the cash outflow from operatingactivities. Expenditure on property assets of £75.9m was less than the proceedsof £89.7m, partly reflecting the timing of sales, with £54.6m of cash receivedin relation to contracts for sale in place at the year end. Internal audit During the period we appointed Grant Thornton to act as independent internalauditors. A risk register has been agreed and a rolling schedule of audit workidentified. Independent Review Report to Quintain Estates and Development Plc Introduction Review work performed We have been instructed by the Company to review the We conducted our review in accordance with guidancefinancial information for the six months ended 30 contained in Bulletin 1999/4: Review of interimSeptember 2006 which comprises the Consolidated financial information issued by the AuditingIncome Statement, the Consolidated Balance Sheet, Practices Board for use in the UK. A reviewthe Consolidated Cash Flow Statement, the consists principally of making enquiries ofConsolidated Statement of Recognised Income and management and applying analytical procedures to theExpense, the Consolidated Statement of Changes in financial information and underlying financial dataEquity and the related notes. We have read the and, based thereon, assessing whether the accountingother information contained in the interim report policies and presentation have been consistentlyand considered whether it contains any apparent applied unless otherwise disclosed. A reviewmisstatements or material inconsistencies with the excludes audit procedures such as tests of controlsfinancial information. and verification of assets, liabilities and transactions. It is substantially less in scope that an audit performed in accordance with International Standards on Auditing (UK and Ireland)This report is made solely to the Company in and therefore provides a lower level of assuranceaccordance with the terms of our engagement to than an audit. Accordingly, we do not express anassist the company in meeting the requirements of audit opinion on the financial information.the Listing Rules of the Financial ServicesAuthority. Our review has been undertaken so thatwe might state to the Company those matters we arerequired to state to it in this report and for no Review conclusionother purpose. To the fullest extent permitted bylaw, we do not accept or assume responsibility to On the basis of our review we are not aware of anyanyone other than the Company for our review work, material modifications that should be made to thefor this report, or for the conclusions we have financial information as presented for the sixreached. months ended 30 September 2006. Directors' responsibilities KPMG Audit Plc Chartered AccountantsThe interim report, including the financial 8 Salisbury Squareinformation contained therein, is the responsibility Londonof, and has been approved by, the directors. The EC4Y 8BB 30 November 2006Directors are responsible for preparing the interim report in accordance with the Listing Rules of theFinancial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accountsexcept where any changes, and the reasons for them,are disclosed. Consolidated income statementFor the six months ended 30 September 2006 Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Sept 2006 30 Sept 2005 31 March 2006 Notes £000 £000 £000 _______ _______ _______ Revenue from continuing operations 2 20,253 20,509 42,051 Cost of sales in respect of continuing operations 2 (6,569) (6,322) (15,295) _______ _______ _______Gross profit from continuing operations 13,684 14,187 26,756 Administrative expenses 3 (14,474) (12,516) (22,660) _______ _______ _______Operating (loss) profit before recognition of results from non-current asset sales and revaluation (790) 1,671 4,096 Profit from sale of non-current assets 7,801 6,933 14,188Gains on revaluation of investment properties 177 - 23,911Deficits on revaluation of investment properties - (58) (1,777)Deficits on revaluation of development properties - - (1,834)Reversal of deficits on revaluation ofdevelopment properties - - 3,598 _______ _______ _______Net operating profit before net finance 7,188 8,546 42,182expenses Interest payable (4,776) (5,200) (9,041)Change in fair value of derivative financial instruments 150 (1,590) (2,994) Finance expenses (4,626) (6,790) (12,035)Finance income 1,043 671 1,549 Net finance expenses 4 (3,583) (6,119) (10,486)Share of profit from joint ventures 1,978 2,294 32,864Share of profit from associates - - 393 _______ _______ _______Profit before tax 5,583 4,721 64,953 Current tax (1,690) (591) (3,033)Deferred tax 1,035 (154) (2,429) Tax charge for the period 5 (655) (745) (5,462) _______ _______ _______Profit after tax but before results from discontinued operations 4,928 3,976 59,491 Loss from discontinued operations, net of tax 6 (37) (2,199) (2,829) _______ _______ _______Profit for the financial period 4,891 1,777 56,662 ====== ====== ======Earnings per share before discontinued 7(a)operations: basic 3.8p 3.1p 46.1p ====== ====== ====== diluted 3.8p 3.1p 45.2p ====== ====== ======Earnings per share after discontinued 7(b)operations: basic 3.8p 1.4p 43.9p ====== ====== ====== diluted 3.8p 1.4p 43.0p ====== ====== ====== The Board has proposed an interim dividend of 3.50p per share (interim dividend for the year ended 31March 2006: 3.25p) which will be paid on 18 January 2007 to shareholders who are on the register on 15December 2006. Consolidated statement of recognised income and expenseFor the six months ended 30 September 2006 Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Sept 2006 30 Sept 2005 31 March 2006 £000 £000 £000 _______ _______ _______ Foreign currency translation differences (377) (6) 278(Deficit) gain on revaluation of development properties (65) (5) 100,798Effective portion of changes in fair value of cashflow hedges, net of recycling 2,477 (4,499) (1,676)Share of recognised income and expense in joint ventures, net of tax - - (102)Tax on income and expense recognised directly in equity (75) 1,350 (31,435) _______ _______ _______Net income and expense recognised directly in equity 1,960 (3,160) 67,863 Profit for the financial period 4,891 1,777 56,662 _______ _______ _______Total recognised income and expense for the financial period 6,851 (1,383) 124,525 ====== ====== ====== Consolidated statement of changes in equityFor the six months ended 30 September 2006 Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Sept 2006 30 Sept 2005 31 March 2006 £000 £000 £000 _______ _______ _______ Opening shareholders' funds 676,675 565,653 565,653Recognised income and expense for the period 6,851 (1,383) 124,525Issue of shares less costs 951 178 247Purchase of own shares for cancellation - (107) (108)Purchase of own shares as treasury shares (6,034) (1,063) (1,955)Cost relating to share-based payment schemes 711 629 1,180Cost relating to share-based element of bonus schemes 2,342 - -Dividends paid in period (9,299) (8,683) (12,867) _______ _______ _______Closing shareholders' funds 672,197 555,224 676,675 ====== ====== ====== Consolidated balance sheetAs at 30 September 2006 Unaudited Unaudited Audited As at As at As at 30 Sept 2006 30 Sept 2005 31 March 2006 Notes £000 £000 £000 ________ ________ ________Non-current assets Investment properties 9 327,480 296,604 290,088Development properties 9 612,516 489,366 599,455Owner-occupied properties, plant and equipment 750 8,658 942Investment in joint ventures 127,675 82,809 120,076Investment in associates 1,677 1,800 1,677 Other non-current investments 2,402 188 2,716 ________ ________ ________Total non-current assets 1,072,500 879,425 1,014,954 ________ ________ ________Current assetsTrading properties 6,834 8,796 6,814Trade and other receivables 32,284 36,309 72,312 Current investments 4 19 7Cash and cash equivalents 21,778 17,494 7,954 ________ ________ ________ Total current assets 60,900 62,618 87,087 ________ ________ ________ Total assets 1,133,400 942,043 1,102,041 ======= ======= =======Current liabilitiesBank loans and other borrowings 10 (2,947) (48) (4,432)Trade and other payables (55,182) (49,080) (49,104)Current tax liability 5 (2,688) (804) (1,521) ________ ________ ________Total current liabilities (60,817) (49,932) (55,057) ________ ________ ________Non-current liabilitiesBank loans and other borrowings (including convertible debt) 10 (277,701) (233,701) (246,626)Deferred tax liability 5 (105,260) (77,789) (106,800)Obligations under finance leases (12,381) (20,587) (12,213)Other payables (5,044) (4,810) (4,670) ________ ________ ________Total non-current liabilities (400,386) (336,887) (370,309) ________ ________ ________ Total liabilities (461,203) (386,819) (425,366) ======= ======= ======= Net assets 672,197 555,224 676,675 ======= ======= =======EquityIssued capital 11 32,432 32,316 32,324Share premium account 12 49,963 47,065 47,265Revaluation reserve 12 246,323 168,618 248,836Other capital reserves 12 108,922 113,225 113,227Cashflow hedge reserve 12 (3,076) (6,682) (4,808)Translation reserve 12 28 121 405Retained earnings 12 246,923 203,163 242,920Investment in own shares 13 (9,318) (2,602) (3,494) ________ ________ ________Equity shareholders' funds 672,197 555,224 676,675 ======= ======= =======Net asset value per share: 14 basic 525p 431p 526p ====== ====== ====== diluted 516p 424p 516p ====== ====== ====== Consolidated cashflow statementFor the six months ended 30 September 2006 Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Sept 2006 30 Sept 2005 31 March 2006 Notes £000 £000 £000 ________ ________ ________Operating activities Profit for the financial period 4,891 1,777 56,662Adjustments: Short leasehold amortisation 248 232 408 Depreciation of plant and equipment 247 131 441 Cost relating to share-based payment schemes 711 629 1,180 Cost relating to share-based element of bonus schemes 2,342 - - Net finance expenses 3,583 6,119 10,486 Profit from sale of non-current (7,801) (6,933) (14,188) assets Gains on revaluation of investment properties (177) - (23,911) Deficits on revaluation of investment properties - 58 1,777 Deficits on revaluation of development properties - - 1,834 Reversal of deficits on revaluation of development properties - - (3,598) Share of profit from joint ventures (1,978) (2,294) (32,864) Share of profit from associates - - (393) (Profit) loss on sale of plant and equipment (10) 6 30 Impairment of other investments 379 - 632 Tax on continuing operations 655 745 5,462 Tax on discontinued operations (15) (942) (1,213) ________ ________ ________ 3,075 (472) 2,745(Increase) decrease in trade and other receivables (4,439) 5,785 7,830(Decrease) increase in trade and other payables (9,807) 1,106 430(Increase) decrease in trading (20) 1,487 3,313properties ________ ________ ________Cash generated from operations (11,191) 7,906 14,318Interest paid (7,884) (6,778) (15,395)Interest received 297 207 1,526Tax paid (64) (2,003) (231) ________ ________ ________Net cash from operating activities (18,842) (668) 218 ======= ======= =======Investing activitiesPurchase and development of property assets (75,949) (57,247) (112,058)Purchase of property, plant and (54) (1,093) (2,365)equipmentProceeds from property sales 89,660 35,914 88,390Tax paid on property sales (1,024) (2,750) (5,486)Acquisition of subsidiary companies - (7,232) (7,335)Proceeds from sale of interest in 6,776 - -subsidiaryAcquisition of investment in joint (1,042) - (553)venturesLoans to joint ventures (5,505) (11,325) (24,474)Distributions received from joint 5,389 1,933 3,002venturesAcquisition of other investments - - (3,160)Proceeds from sales of current - - 12investments ________ ________ ________Net cash from investing activities 18,251 (41,800) (64,027) ======= ======= =======Financing activitiesIssue of shares 951 178 247Purchase of own shares for cancellation - (107) (108)Investment in own shares (6,034) (1,063) (1,955)Proceeds from new borrowings 156,000 127,004 281,004Repayment of borrowings (126,432) (68,053) (205,150)Payment of loan issue costs (288) (273) (400)Payment of finance lease liabilities (440) (149) (190)Equity dividends paid (9,299) (8,683) (12,867) ________ ________ ________Net cash from financing activities 14,458 48,854 60,581 ======= ======= =======Net increase (decrease) in cash and cash equivalents 13,867 6,386 (3,228)Cash and cash equivalents at start of 7,954 11,090 11,090periodEffect of foreign exchange fluctuations on cash held (43) 18 92 ________ ________ ________Cash and cash equivalents at end of 21,778 17,494 7,954period ======= ======= ======= Net cash from discontinued operations included in net cash from operating activities 6 (403) (2,199) (2,374) ======= ======= ======= Notes to the accountsFor the six months ended 30 September 2006 1. Accounting policies These interim results are unaudited and do not constitute statutory accounts asdefined in section 240 of the Companies Act 1985. The statutory accounts for2005/06, which were prepared in accordance with International FinancialReporting Standards as endorsed by the European Union (IFRS) and with thoseparts of the Companies Act 1985 applicable to companies reporting under IFRS,have been delivered to the Registrar of Companies. The auditors' report onthose accounts was unqualified and did not contain a statement made undersection 237(2) or 237(3) of the Companies Act 1985. The financial information contained in these interim results has been preparedin accordance with the Listing Rules of the Financial Services Authority and thesignificant accounting policies set out in pages 62 to 65 of the 2005/06 AnnualReport and Accounts which is available on the Company's website(www.quintain-estates.com). The accounting policies have been consistentlyapplied to all periods presented in the interim results. 2. Revenue, cost of sales and gross profit Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited Six months Six months Six months Six months Six months Six months Year Year Year ended ended ended ended ended ended ended ended ended 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March 31 March 2006 2006 2006 2005 2005 2005 2006 2006 2006 Revenue Cost of Gross Revenue Cost of Gross Revenue Cost of Gross sales profit sales profit sales profit £000 £000 £000 £000 £000 £000 £000 £000 £000 _______ _______ _______ _______ _______ _______ _______ _______ _______ Rental income 13,098 (3,783) 9,315 14,809 (2,792) 12,017 29,075 (7,580) 21,495Income from sale of trading properties - - - 2,245 (2,048) 197 4,065 (3,687) 378Income from leisure operations 1,141 (466) 675 1,087 (610) 477 1,686 (833) 853Income from hotel operations 443 (210) 233 - - - - - -Fees, commissions and other income 5,571 (2,110) 3,461 2,368 (872) 1,496 7,225 (3,195) 4,030 _______ _______ _______ _______ _______ _______ _______ _______ _______Continuing operations 20,253 (6,569) 13,684 20,509 (6,322) 14,187 42,051 (15,295) 26,756Discontinued operations (note 6) 1,295 (726) 569 2,894 (4,671) (1,777) 5,848 (6,738) (890) _______ _______ _______ _______ _______ _______ _______ _______ _______ 21,548 (7,295) 14,253 23,403 (10,993) 12,410 47,899 (22,033) 25,866 ====== ====== ====== ====== ====== ====== ====== ====== ====== Income from hotel and leisure operations is incidental to the Group'sdevelopment activities. 3. Administrative expenses Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Sept 2006 30 Sept 2005 31 March 2006 £000 £000 £000 _______ _______ _______ Directors' remuneration 2,931 2,579 4,148Staff costs 7,780 8,326 13,857Cost relating to share-based payment schemes 711 638 1,180Reorganisation provision for discontinued - - 650operationsLegal and professional fees 1,400 977 1,817Office costs 1,336 941 2,817Depreciation 247 166 441(Profit) loss on disposal of plant and (10) 6 30equipmentOperating lease payments 448 102 480General expenses 252 145 392 _______ _______ _______ 15,095 13,880 25,812 ====== ====== ====== Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Sept 2006 30 Sept 2005 31 March 2006 £000 £000 £000 _______ _______ _______ Continuing operations 14,474 12,516 22,660Discontinued operations (note 6) 621 1,364 3,152 _______ _______ _______ 15,095 13,880 25,812 ====== ====== ====== 4. Net finance expenses Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Sept 2006 30 Sept 2005 31 March 2006 £000 £000 £000 _______ _______ _______ Interest payable on bank loans and overdrafts 8,051 8,104 15,328Interest payable on other loans 606 597 1,307Interest on obligations under finance leases 434 106 230 _______ _______ _____ 9,091 8,807 16,865Interest capitalised (4,315) (3,607) (7,824) _______ _______ _____Interest payable 4,776 5,200 9,041Change in fair value of interest rate swaps (150) 1,590 2,994Finance income (1,043) (671) (1,549) _______ _______ _______ 3,583 6,119 10,486 ====== ====== ====== 5. Tax Audited Unaudited as at as at 31 March 2006 30 Sept 2006 Tax Payments Tax liabilities in Recognised Recognised liabilities period in income in equity £000 £000 £000 £000 £000 _______ _______ _______ _______ _______ Current tax 1,521 (1,088) 1,675 580 2,688 ====== ====== ====== ====== ====== Deferred tax: Capital gains less capital 105,257 - (1,368) (1,250) 102,639losses Capital allowances 5,776 - 638 - 6,414 Derivative financial instruments (2,986) - - 745 (2,241) Other items (1,247) - (305) - (1,552) _______ _______ _______ _______ _______ 106,800 - (1,035) (505) 105,260 ====== ====== ====== ====== ====== Total tax 108,321 (1,088) 640 75 107,948 ====== ====== ====== ====== ====== Continuing operations 655Discontinued operations (note 6) (15) _____ 640 ==== 6. Discontinued operations The results in the six months relating to the Conference Centre and ExhibitionHalls at Wembley, which ceased operation at the end of July 2006, have beenclassified as discontinued. This treatment is consistent with that adopted inthe 2005/06 Annual Report and Accounts, which also identified the operation ofthe Wembley Pavilion, a temporary structure, as a discontinued operation. TheConference Centre and Exhibition Halls are scheduled for demolition and thePavilion was dismantled in January 2006. An analysis of the results from discontinued operations for the period was asfollows: Unaudited Unaudited Audited Six months ended Six months ended Year ended 30 Sept 2006 30 Sept 2005 31 March 2006 £000 £000 £000 _______ _______ _______ Revenue 1,295 2,894 5,848Cost of sales (726) (4,671) (6,738) _______ _______ _______Gross profit (loss) 569 (1,777) (890)Administrative expenses (621) (1,364) (3,152) _______ _______ _______Loss before tax on discontinued operations (52) (3,141) (4,042)Tax credit 15 942 1,213 _______ _______ _______Loss from discontinued operations, net of tax (37) (2,199) (2,829) ====== ====== ====== During the period, the Group paid reorganisation costs of £523,000 which hadbeen provided for as at 31 March 2006 and which, after adjusting for tax, isreflected in the Consolidated cash flow statement for the current period. There was no impact on basic and diluted earnings per share of the loss fromdiscontinued operations. In the comparative period, the loss from discontinuedoperations reduced basic and diluted earnings per share by 1.7p. 7. Earnings per share a) Before discontinued operations Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited Six Six Six Six Six Six Year Year Year months months months months months months ended ended ended ended ended ended ended ended ended 31 March 31 March 31 March 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 2006 2006 2006 2006 2006 2006 2005 2005 2005 Profit after Weighted Earnings Profit after Weighted Earnings Profit after Weighted Earnings tax and average per tax and average per tax and average per before number share before number share before number share discontinued of shares pence discontinued of shares pence discontinued of shares pence operations 000 operations 000 operations 000 £000 £000 £000 _______ _______ _______ _______ _______ _______ _______ _______ _______ Basic 4,928 128,512 3.8 3,976 128,903 3.1 59,491 128,937 46.1 ====== ====== ======Adjustments: Interest on 8% Convertible unsecured loan stock 122 2,000 118 2,000 235 2,000 Employee share -based payment schemes - 1,197 - 1,121 - 1,237 _______ _______ _______ _______ _______ _______Diluted 5,050 131,709 3.8 4,094 132,024 3.1 59,726 132,174 45.2 ====== ====== ====== ====== ====== ====== ====== ====== ====== b) After discontinued operations Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited Six Six Six Six Six Six Year Year Year months months months months months months ended ended ended ended ended ended ended ended ended 31 March 31 March 31 March 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 2006 2006 2006 2006 2006 2006 2005 2005 2005 Profit after Weighted Earnings Profit after Weighted Earnings Profit after Weighted Earnings tax and average per tax and average per tax and average per discontinued number share discontinued number share discontinued number share operations of shares pence operations of shares pence operations of shares pence £000 000 £000 000 £000 000 _______ _______ _______ _______ _______ _______ _______ _______ _______ Basic 4,891 128,512 3.8 1,777 128,903 1.4 56,662 128,937 43.9 ====== ====== ======Adjustments: Interest on 8% Convertible unsecured loan stock 122 2,000 118 2,000 235 2,000 Employee share -based payment schemes - 1,197 - 1,121 - 1,237 _______ _______ _______ _______ _______ _______Diluted 5,013 131,709 3.8 1,895 132,024 1.4 56,897 132,174 43.0 ====== ====== ====== ====== ====== ====== ====== ====== ====== The weighted average number of shares above excludes the number of shares heldby Group-sponsored ESOP Trusts, which has been treated as cancelled. 8. Dividends The proposed interim dividend of 3.50p (2005: 3.25p) per ordinary share wasapproved by the Board on 28 November 2006 and is payable on 18 January 2007 toshareholders on the register at the close of business on 15 December 2006. Thedividend has not been included as a liability as at 30 September 2006. The final dividend of £9,299,000 for the year ended 31 March 2006, representing7.25p per share, was paid on 8 September 2006 and is included in the reconciliation of movements in equity. 9. Investment and development properties Investment and development properties are valued annually at the end of eachfinancial year and are shown in the balance sheet as at 30 September 2006 at theprevious year end valuations adjusted for subsequent expenditure at cost anddisposals, and movements on lease incentives per SIC 15, 'Operating Leases:Incentives'. Investment Development Total properties properties properties £000 £000 £000 _______ _______ _______ Balance 1 April 2006 290,088 599,455 889,543Foreign exchange adjustment (344) - (344)Additions 51,867 41,508 93,375Interest capitalised 229 4,086 4,315Disposals (14,360) (32,285) (46,645)Short leasehold amortisation - (248) (248) _______ _______ _______Balance 30 September 2006 327,480 612,516 939,996 ====== ====== ====== 10. Bank loans and other borrowings The maturity profile of the Group's debt was as follows: 30 Sept 2006 30 Sept 2005 31 March 2006 £000 £000 £000 _______ _______ _______ Within one year 2,947 48 4,432Between one and two years - 7,172 2,893Between two and five years 277,701 221,659 238,863Over five years - 4,870 4,870 _______ _______ _______ 280,648 233,749 251,058 ====== ====== ====== Undrawn committed facilities were as follows: 30 Sept 2006 30 Sept 2005 31 March 2006 £000 £000 £000 _______ _______ _______ Between two and five years 220,000 271,000 254,000 ====== ====== ====== 11. Share capital Number Nominal of shares value 000 £000 _______ _______ Shares in issue as at 1 April 2006 129,295 32,324Issue of shares under share-based payment schemes 435 108 _______ _______Shares in issue as at 30 September 2006 129,730 32,432 ====== ====== 12. Reserves Share Revaluation Other Cashflow Translation Retained premium reserve capital hedge reserve earnings account reserves reserve £000 £000 £000 £000 £000 £000 _______ _______ _______ _______ _______ _______ Balance 1 April 2006 47,265 248,836 113,227 (4,808) 405 242,920Recognised income and expense in period - (65) - 1,732 (377) 5,561Issue of shares less costs 2,698 - - - - (1,855)Cost relating to share-basedpayment schemes - - - - - 711 Cost relating to share-basedelement of bonus schemes - - - - - 2,342 Cost of shares awarded to employees under bonus schemes - - - - - (210)Short leasehold amortisation - (12) - - - 12Realisation of revaluation gains in period - (2,436) - - - 2,436Transfer between reserves - - (4,305) - - 4,305Dividends paid in period - - - - - (9,299) _______ _______ _______ _______ _______ _______Balance 30 September 2006 49,963 246,323 108,922 (3,076) 28 246,923 ====== ====== ====== ====== ====== ====== 13. Investment in own shares £000 _______ Balance 1 April 2006 3,494Purchase of own shares 6,034Cost of shares awarded to employees under bonus schemes (210) _______Balance 30 September 2006 9,318 ====== During the period, 1,000,000 of Quintain's own shares were purchased and held byGroup-sponsored ESOP Trusts and 37,398 shares held in the Trusts were used todischarge bonus commitments. The number of shares held in the Trusts at the endof the period was 1,622,198. 14. Net asset value per share Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Audited As at As at As at As at As at As at As at As at As at 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 30 Sept 31 March 31 March 31 March 2006 2006 2006 2005 2005 2005 2006 2006 2006 Equity Number Net asset Equity Number Net asset Equity Number Net asset shareholders' of shares value shareholders' of shares value shareholders' of shares value funds per share funds per share funds per share £000 000 pence £000 000 pence £000 000 pence _______ _______ ____ _______ _______ ____ _______ _______ ____ Basic 672,197 128,107 525 555,224 128,764 431 676,675 128,635 526 === === ===Adjustments: 8% Convertible unsecured loan stock 2,947 2,000 2,845 2,000 2,893 2,000 Employee share -based payment schemes 9,732 2,640 10,364 3,180 9,766 2,925 _______ _______ _______ _______ _______ _______Diluted 684,876 132,747 516 568,433 133,944 424 689,334 133,560 516 ====== ====== === ====== ====== === ====== ====== === The number of shares in issue has been adjusted for 1,622,198 (2005: 500,000)shares held by Group-sponsored ESOP Trusts. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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