Preliminary results

15th Dec 2008 07:00



Wichford P.L.C.

("Wichford" or the "Company")

FINAL RESULTS

Wichford P.L.C., the property investment company, announces its preliminary results for the year ended 30 September 2008.

Financial Highlights

Other highlights

Philippe de Nicolay, Chairman of Wichford, commented today:

"This has been a challenging period for everyone with the most difficult economic conditions in years. Inevitably, the downturn had a negative impact on the value of our property portfolio. However, Wichford's income remains robust and secure because of the nature of our tenants. As a result, we continue to make profits on a trading operations basis that proved relatively strong in the context of the commercial property sector.

I believe that Wichford has the strength to weather the current turbulence without compromising its proven strategy: to generate robust income streams by renting quality real estate to quality tenants." 

Enquiries:

Wichford P.L.C.

Philippe de Nicolay 00 33 1 40 74 42 79

Wichford Property Management Ltd

Jamie Hambro 020 7747 5678

Philip Cooper  020 7495 7111

Michael Watters  020 7811 0100

Citigate Dewe Rogerson 020 7638 9571George CazenoveHannah Seward

Notes to editors

Wichford P.L.C. (UK Listed: WICH) is a property investment company, with a portfolio focused on investment property occupied exclusively by Central and State Government bodies. Approximately a quarter of the portfolio comprises public sector rented properties in Germany, the Netherlands and France.

CHAIRMAN'S STATEMENT

2007-08 was a challenging period for everyone with the most difficult economic conditions in years. Inevitably, the downturn had a negative impact on the value of our property portfolio. However, our income remains secure and we continue to make profits on a trading performance that proved relatively strong in the context of the commercial property sector.

I believe that Wichford has the strength to weather the current turbulence without compromising its proven strategy: to generate robust income streams by renting quality real estate to quality tenants.

Financial results

The profit from Trading Operations for the year to 30 September 2008 was £10.3 million, down 9.6 per cent on the prior year. The value of the Group's portfolio fell by £141.3 million.

Following this valuation reduction, the overall result for the year is a loss of £130.4 million. Net assets at 30 September 2008 were £118.0 million against £276.7 million the previous year.

The earnings per share (eps) from trading operations under IFRS were 7.77 pence (2007 eps: 9.70 pence). The total basic eps for the year ended 30 September 2008 is a loss of 98.23 pence per share compared to a loss of 8.40 pence per share the previous year.

Key events

On 28 December 2007, we listed on the London Stock Exchange's Main Market, having joined the AIM in August 2004. In July 2008, we completed the acquisition of Haagse Veste1 in The Hague, Netherlands, for a consideration of €35.0 million. In August 2008, we signed an agreement with Land Securities Trillium that extended our leases on 16 properties occupied by UK Central Government tenants until 2023, linking their rents to the UK consumer price index (CPI).

Funding

Amongst the casualties of the credit crunch was Lehman Bros, who structured the funding vehicles that provided the majority of our borrowings. The principal funding through these vehicles is unaffected by Lehman's demise, although there have been some issues with interest rate hedges, as explained in the Business Review. 

People

This is my first year as Chairman of Wichford P.L.C., having succeeded Michael Sheehan upon his retirement on 8 November 2007. Once again, I would like to thank Michael for laying such solid foundations during his term.

I would also like to welcome three new Board members: Richard Melhuish and Mark Taylor, who were both appointed  on 8 November 2007; and Wolf Cesman, who was appointed on 22 May 2008. I am certain that their expertise and experience will be an invaluable asset as we build on Michael's legacy.

Corporate reporting

This year's Annual Report looks very different from its predecessors. It reflects our commitment to achieving the highest standards of governance and transparency for our investors and other Stakeholders. Giving them the information they need to assess our strategy and performance accurately is an important way of reciprocating their loyalty.

Dividend

In light of the uncertainty regarding the Company's interest rate hedges and of prevailing economic conditions we took a decision to reduce our total dividend for the year to between 7 pence and 8 pence per share. The Directors are recommending a final dividend of 3.15 pence per share, which, with the interim dividend of 4.1 pence per share, will make a total dividend of 7.25 pence per share for the year. The final dividend, if approved by Shareholders, will be paid on 20 February 2009 to Shareholders on the register of members at the close of business on 30 January 2009. In future years, we intend to split the dividend for the year into two equal payments.

Outlook

Our rental income remains secure despite the current economic instability. Because our tenants are all Central and State Government bodies, there is a very low risk of them defaulting on rent and as our tenant turnover is so low, we have the advantage of long-term stability.

With the likelihood of more turbulence ahead during 2009, we will be aiming to maintain this stability rather than expanding our portfolio. However, I am cautiously optimistic that we will see signs of recovery the following year. In preparation, we are conducting a comprehensive review of our financial arrangements, our portfolio and our strategy to ensure our business is in a good position to take advantage of the recovery when it arrives.

Philippe de Nicolay

Chairman

15 December 2008

BUSINESS REVIEW

Operating Review

Our objective is to create sustainable Shareholder value by buying properties let to Central and State Government tenants, to extend unexpired lease terms and re-gear the rentals to secure reliable, index-linked rental income streams.

In the year ended 30 September 2008, amid the toughest trading climate for years, we delivered a pre-tax profit from Trading Operations of £10.3 million on a revenue that rose 26.9 per cent from £33 million in the previous 12 months to £42 million. This rise is primarily due to a full year's contribution of our European properties, which were mainly acquired towards the end of the last financial year.

Inevitably, the unfavourable market conditions impacted on the value of Wichford's assets despite the secure income stream of our portfolio. The UK market, in particular, was affected with values falling throughout the year. At 30 September 2008, the 72 properties in our UK portfolio were independently valued at £447 million compared to £526 million the previous year. Our portfolio of seven properties in Continental Europe was valued at £151 million by the end of the year. Overall, the value of our properties fell 11.1 per cent from £673 million at 30 September 2007.

The limited number of UK disposals and acquisitions Wichford made during the year reflects the uncertain state of the market and the scarcity of banking finance for commercial property. In total, we completed just one disposal and two acquisitions. 

Share price

Overall, our portfolio performance was in line with the IPD All Property Index. However, the economic downturn had a negative impact on share prices across the commercial property sector and Wichford shares were not immune to this downward trend.

Key events

Despite the economic slowdown, Wichford's year was notable for a number of important events. 

Main Market Listing

On 28 December 2007, Wichford listed on the London Stock Exchange's Main Market, having joined the AIM in August 2004. While the AIM provided our business with a strong base during our early years as a publicly quoted company, stepping up to the Main Market demonstrates Wichford's growing maturity and confidence.

Lease re-negotiations

During the year, we reached agreement to extend the leases on 17 properties occupied by UK Central Government tenants until 2023, linking their rents to the UK consumer price index (CPI). Such deals are attractive to both parties with the tenants obtaining security of tenure and Wichford security of income.

Hague acquisition

In July 2008, Wichford completed the acquisition of Haagse Veste1 in The Hague, The Netherlands, for a consideration of €35.0 million. The building is leased to the Royal Dutch Government for use by the International Criminal Court. It provides a total net lettable space of approximately 12,350 sq metres plus 155 car parking spaces. It is let for a term of six years from July 2008 with a tenant's option to extend for a further four years. The initial rent is €2.1 million and is indexed to the Dutch CPI on a yearly basis. The tenant undertook a substantial fit-out programme prior to taking occupancy of the building.

Lloyds TSB loan

In May 2008, Wichford signed a new three-year loan deal with Lloyds TSB Bank plc for £58.5 million. Given the shortage of bank finance for the commercial property sector, this deal represents a strong vote of confidence in the Company. 

Corovest

In May 2008, Corovest Fund Managers (UK) Limited, a fund management group with a strong property background, acquired 50 per cent of Wichford's Property Adviser, Wichford Property Management Limited (WPML), formerly held by Laird Capital Limited. J O Hambro Capital Management Limited, one of the founders of Wichford, retains its 50 per cent interest in WPML. The breadth and depth of Corovest's experience in the property market will further reinforce the strength of WPML's management capability.

Market commentary

Overview

Thanks to the quality of its tenants, Wichford is strongly positioned to weather the current economic turmoil in the UK and abroad. Focusing on Central and State Government occupiers means our business faces a very low risk of its tenants defaulting on rent. At the same time, we enjoy the long-term stability that comes with low tenant turnover.

With the UK Government taking active steps to mitigate the impact of the economic downturn, Wichford's rental income  is strongly protected. Public use of many buildings in our portfolio is likely to remain stable as the economy continues to slow down. Public use of some properties, such as Government job centres, will probably increase if forecasts of rising unemployment prove accurate.

UK property market

Since it began trading in the UK, our business had enjoyed highly favourable market conditions, with strong investment demand, low interest rates and easily accessible bank finance.

In Autumn 2007, these conditions changed dramatically and have continued to deteriorate ever since. The downturn began with the collapse of the US sub-prime market, which triggered a global banking crisis that has severely restricted the availability of bank finance for commercial property and virtually closed the securitisation market. This, in turn, has seen a significant rise in the yields that investors demand for commercial real estate and a consequent fall in values.

Due to concern over property values and shortage of credit, banks are still reluctant to lend money to finance commercial property transactions which in turn has slowed transaction volumes in the market. Furthermore, banks are charging increased margins on loans, reducing the impact of interest rate cuts. 

Despite the quality of our tenants and the reliability of our rental streams, the downturn has inevitably impacted on our growth plans. For example, the squeeze on liquidity makes it difficult to take advantage of a buyers' market by acquiring new properties at competitive prices.

Nevertheless, we remain optimistic that market conditions will improve in time and we are working hard to ensure that we are positioned to take full advantage of the upturn when it comes. 

European property market

Market trends across Continental Europe are between three and six months behind the UK. Here, the downward correction in property values began at the end of 2007 and continued through 2008. By the middle of the year, Continental Europe was still attracting capital, but from a falling number of investors. However, the situation has deteriorated further within the last two months with little market activity now.

This is another reflection of the weak confidence that is affecting markets worldwide and making it increasingly difficult to value commercial property accurately.

PORTFOLIO OVERVIEW

Indexation

Index-linking as many of its tenancies as possible is core to Wichford's business model. By the end of the year, 61 per cent of our rents were either fixed or subject to indexation compared to 45 per cent at the end of the previous year. 17 properties owned by the Group benefited from lease extensions or renewals over the last 12 months and were transferred from the Active Portfolio to the Core Portfolio. This continued the Company's successful Active Portfolio strategy. Across the portfolio, there are 19 principal tenants: 14 in the UK, two in France, two in Germany and one in the Netherlands. All tenants are Central or State Government bodies. A list of the Company's properties and its tenants is given at the end of this announcement.

At 30 September 2008, Wichford's portfolio comprised 79 properties, with 72 UK properties independently valued at £447 million; and seven European properties independently valued at £151 million. 

Of these, one is in France, five are in Germany and one is in The Netherlands. 

Disposals

In October 2007, we completed the sale of Archway Tower in Islington, London, for £11.0 million, reflecting a satisfactory profit over a book cost of £10.2 million and over the September 2007 valuation of £9.5 million. Significantly, this transaction was completed just as the market was beginning to weaken.

Acquisitions

During the year, we acquired two properties for a total of £42 million. The first acquisition, completed on 30 May 2008, involved St Anne House, Croydon, for a total cost of £15.25 million. The second acquisition, completed in July 2008, was Haagse Veste1 in The Hague, Netherlands for a consideration of €35.0 million.

The key events section includes more details about the acquisition of this flagship building, which was fitted out by the Dutch Government to a significantly higher specification than comparable office buildings in The Hague. 

UK Core Portfolio

Wichford's Core Portfolio includes most of our assets and generates most of its income. It is made up of properties with lease terms of more than seven years until expiry or a possible lease break date at the tenant's option.

Key facts (at 30 September 2008)
Properties	49
Total area (1,885,307 sq ft)	175,151 sq m
Gross asset value	£322.0 million
Annualised rental income	£22.6 million
Average rental yield by area (£12.19 per sq ft)	£131.18 per sq m
Net initial yield on valuation	6.65 per cent
Average term of unexpired leases	10.16 years
Property rentals index-linked	63.2 per cent

UK Active Portfolio

Wichford's Active Portfolio is made up of properties with lease terms of less than seven years to expiry or a possible lease break date at the tenant's option. Here, our focus is on individual properties where we can enhance value through active asset management, including lease renewals.

Key facts (at 30 September 2008)
Properties	23
Total area (765,918 sq ft)	71,156 sq m
Gross asset value	£124.6 million
Annualised rental income	£10.4 million
Average rental yield by area (£13.61 per sq ft)	£146.45 per sq m
Net initial yield on valuation	7.86 per cent
Average term of unexpired leases	3.77 years
Property rentals index-linked	14.4 per cent

Continental European Portfolio

By the end of the year, our Continental European Portfolio made up 25 per cent of our total assets. Covering France, Germany and The Netherlands, this portfolio comprises seven properties, all of them occupied by Central and State Government bodies. Its most recent addition is the Haagse Veste1 building in The Hague. Let to the Royal Dutch Government, this flagship property is home to the International Criminal Court.

Key facts (at 30 September 2008)
Properties	7
Total area (1,024,551 sq ft)	95,181 sq m
Gross asset value	£151.3 million
Annualised rental income	£9.8 million
Average rental yield by area (£9.57 per sq ft)	£102.96 per sq m
Net initial yield on valuation	6.2 per cent
Average term of unexpired leases	12.59 years
Property rentals index-linked	100 per cent

FINANCIAL REVIEW

Debt

Credit market conditions became increasingly challenging over the second half of the financial year and new lending for investment into property has contracted sharply. Where credit is available, market terms now reflect both higher margins and lower loan-to-value ratios. In light of current market conditions the Company has taken the opportunity to engage independent advisers to review all its financial arrangements. 

Loan Facilities at 30 September 2008

Facility		Lender	£m	Maturity	Effective Interest Rate Sept 2008	Key Covenants
Delta		Windermere XI CMBS Ltd.	114.6	October 2012*	5.72%	ICR
Gamma		Windermere VIII CMBS Ltd.	199.7	October 2012*	5.56%	ICR
Hague		SNS Property Finance	17.5	July 2014	6.09%	ICR
	Halle	Windermere XIV CMBS Ltd.	29.5	April 2014	5.05%	ICR
	VBG1	Talisman 3	55.9	January 2010	4.27%	ICR, LTV
	VBG2	Talisman 4	44.6	April 2011	5.03%	ICR, LTV
	Zeta**	Lloyds TSB	31.0	May 2011	6.62%	LTV
	Total		492.8

* Subject to a WAULT of 7.5 years from October 2012, but calculated as at October 2010.

** Zeta swap rate applies to £26m, the remainder forms part of a short term VAT facility which is un-hedged.

 

Lehman Brothers

Lehman Brothers had originally provided the business with loans totalling £344 million which were subsequently securitised into three CMBS vehicles known as Windermere VIII, Windermere XI and Windermere XIV ("Windermere"). On completion of the securitisation, Lehman Brothers ceased to be the lender and the securitisation conduits took over this role. However, Lehman Brothers Special Finance, Inc. (LBSF) remained counter-party to the interest rate swaps with the CMBS vehicles from which the Group benefits and treats as hedging arrangements, and these arrangements were guaranteed by Lehman Brothers International (Europe) ("LBI"). LBI remained as the agent and security agent to the CMBS vehicles, although in practice these responsibilities were discharged by Hatfield Philips.

Following Lehman Brothers Holdings Inc. being placed into Chapter 11 protection and LBI into administration, the Company made an announcement on the 7th of October 2008 which emphasised that these events did not constitute an event of default on the loans. This announcement highlighted also the absence of loan-to-value covenants. Notwithstanding the fact that it was not itself in administration, the potential inability of LBSF to perform as counterparty to these hedging arrangements was also identified. As previously stated, this may have implications for the interest rate setting mechanism and the interest rate hedges that have been put in place by the Windermere vehicles. 

The Company has been notified, and it is expected that, until such time as the future hedging arrangements for the Windermere vehicles are resolved, the Company will continue to pay interest at the pre-existing fixed rate profiles. The Company has appointed NM Rothschild & Sons' specialist debt team to advise on this matter. 

Re-basing our dividend

In the same statement, we announced that we intended to lower our annual dividend to between 7 pence and 8 pence per share. This year, the Directors are recommending a final dividend of 3.15 pence per share, which, with the interim dividend of 4.1 pence, will make a total dividend of 7.25 pence for the year. When we listed on the AIM, we pledged to pay an annual dividend. Although the business has consistently fulfilled this pledge, limited rental growth meant we effectively financed our dividend increases by profits realised from selling properties. With 61 per cent of our rentals now indexed-linked, we are now in a position to cover our dividend from recurring, secure rental income. As a result, the dividend level now has a more sustainable base.

Rental Growth

Open market rents are likely to remain static for some time. In response, we are taking steps to index-link rents and re-gear our leases wherever possible.

Administrative Expenses

These totalled £7.4 million (2007: £3.8 million). The cost of the Company moving from AIM to a full listing was £0.7 million and this has been shown in the 'Other Items' column of the trading statement.

The change in the level of charge between 2007 and the current year is partially due to the 2007 charge benefiting from a credit of £1.5 million following the reversal of a provision for accrued performance fees, made in earlier years, whilst the current year charge includes the full year expenses of the French and German investments, the first of which was acquired at the end of June 2007.

Further details of the Group's administrative expenses are shown in Note 5 to the accounts.

Finance cost

The total finance cost for the year was £25.8 million (2007: £19.7 million). The majority of the increase results from the inclusion in this financial year of a full year's finance cost associated with the investments in Continental Europe made during the last four months of the previous financial year, together with the finance cost of the new Zeta and Hague facilities taken out from May onwards.

Investment Properties

The carrying cost of the investment properties at 30 September 2008 was £587.0 million (2007: £663.6 million) with further detail shown in Note 11. The principle reason for this decline is due to the values assigned to the Group's properties by the external valuers as described in the Operating Review.

Trade and other receivables

The total at 30 September 2008 was £31.3 million (2007: £18.9 million) with further detail shown in Note 12. The major increase is due to the accrued rental incentives associated with the 17 lease re-negotiations during the year; these balances will be amortised over the life of the new lease terms.

Borrowings

During the year the Group took out two new facilities, referred to as the Zeta and Hague facilities. These have been the main contributions to the increase in borrowings to a total of £490.5 million (2007: £424.6 million).

MANAGING RISK

For a review of the principal risks and uncertainties facing the Company, please see the Report of the Directors.

LOOKING AHEAD

While the current economic turbulence continues, we will continue to play to the strengths that underpin the portfolio growth we have achieved to date. At the same time, we realise that standing still in the current climate is not an option. Given the profound and permanent changes that our sector is undergoing, it is clear that we must evolve further to ensure that we are in a position to capitalise on emerging opportunities once the global economy begins to recover. 

 

With the immediate focus on stability and security rather than growth, this means working with our tenants, partners and other stakeholders to sustain Shareholder value by refining the proven business model that we first brought to the market.

Achieving stability, preparing to grow

We derive two important strengths from this business model: high quality Central and State Government tenants paying reliable rental revenue, most of it index-linked. With the focus on achieving stability, we will continue to derive Shareholder value from these strengths, which present a strong defence against economic turbulence.

In parallel, we plan to undertake a comprehensive review of our financing structure while tailoring our strategy to map a clear path towards renewed growth once recovery begins.

REPORT OF THE DIRECTORS

The Directors present their report and the audited financial statements for the year ended 30 September 2008. 

Results and dividends

The Group loss for the year after taxation amounted to £130.4 million (2007: loss of £9.8 million). The Directors recommend the declaration of a final dividend of 3.15 pence per share and accordingly a resolution will be put to the Annual General Meeting on 29 January 2009 to declare a final dividend in respect of the year ended 30 September 2008 payable on 20 February 2009 to those Shareholders on the register at the close of business on 30 February 2009. 

 

Principal activity

The principal activity of the Company and its subsidiaries is the generation of rental income and capital growth through investment in properties across the UK and Continental Europe, which are occupied by Central or State Government bodies.

Review of the business and future activities 

The Chairman's Statement and the Business Review contain a review of the business and an indication of future developments.

Principal risks and uncertainties facing the Company

The following identifies what the Company believes to be its principal risks and the ways in which it manages and controls these risks:

(i)The inability to identify additional return enhancing properties - the Group manages this process by thoroughly evaluating each acquisition introduced to it by the Property Manager or others;

(ii)The risk of tenants exercising their break options or leases not being renewed at the end of their term, both resulting in properties lying vacant - this risk is managed by the Group aiming to keep the Active Portfolio at around 20 per cent of the whole portfolio;

(iii)The risk of a general downturn in the property market negatively impacting on the valuation of individual properties - whilst the Group cannot influence the property market, it has negotiated with its lenders that, on most of its facilities, there is no continuing loan to value covenant and therefore there will be no requirement to repay any part of the UK loans as a result of any such downturn;

(iv)The risk of operating in a complex regulatory and legislative environment - the Group manages these risks by appointing managers, administrators and advisers, who are familiar with regulatory requirements, to ensure that the activities of the Group are compliant with all applicable regulations.

The financial risks and the ways in which the Group manages them are listed below. 

(i)Interest Rate Risk

The Group finances its operations through equity, retained profits and bank borrowings. The Group then uses interest rate derivatives to manage its exposure to interest rate fluctuations. At the year end all of the Group's borrowings were at fixed rates after taking account of interest rate swaps (see note [••] of the financial statements).

(ii)Debt Financing

The bank borrowings are secured by fixed and floating charges over the assets and income streams of the Company and the Group. The principal covenants relating to these borrowings are an interest cover ratio and a weighted average unexpired lease term but there is no loan to value covenant on most of its facilities. 

(iii)Exchange Rate Risk

As the Group acquires properties in Continental Europe, there is now the additional risk of movements in exchange rates - the Group minimises the initial exposure to foreign currency exchange rate movements by matching, as much as possible, the revenue streams (net of interest) and acquisition costs in the same currency. 

Company's objectives, policies and strategies in respect of financial instruments

The Group's treasury operations are co-ordinated and managed in accordance with policies and procedures approved by the Board. They are designed to mitigate the financial risks faced by the Group, which primarily relate to funding and interest rate exposure.

The Group's financial instruments comprise bank borrowings, interest rate swaps, interest rate collars, and other items such as trade debtors and creditors that arise directly from its operations. 

Further details of financial instruments are given in Note 17. The Board reviews and agrees policies for managing financial risks, which are summarised above.

Share capital

As at 30 September 2008, the Company had 132,761,948 Ordinary Shares of 10 pence each in issue. 

On 30 September 2008, the middle market quotation per Ordinary Share was 70 pence. The comparable figure at 28 September 2007 was 152.25 pence. 

Notified shareholdings

As at the date of this report, the following interests in the Ordinary Shares of the Company of 3 per cent and above of the issued share capital had been notified to the Company:

	% of Issued
	No. of shares	Share Capital
The REAL Co. (Jersey) Holdings Limited	13,300,000	10.02
Jupiter Asset Management Limited	12,427,800	9.37
Ciref Limited	12,205,308	9.19
AXA S.A.	10,385,688	7.82
Rathbone Brothers Plc	7,807,680	5.88
New Star Asset Management Limited	7,572,441	5.70
Rensburg Fund Management Limited	6,368,300	4.80
F&C Asset Management Plc	6,234,973	4.70
Blackrock, Inc.	6,046,295	4.55
J O Hambro Capital Management Limited	5,991,430	4.51
Legal & General Group Plc	5,409,627	4.07
J O Hambro Investment Management Limited	5,192,406	3.91

Directors

Michael Sheehan retired as Chairman and a Director of the Company on 8 November 2007. Philippe de Nicolay has replaced him as Chairman.

Wolf Cesman was appointed a Director of the Company on 22 May 2008.

According to Article 95 of the Articles of Association of the Company at each Annual General Meeting, one third of the Directors shall retire from office by rotation. The Directors to retire by rotation at the forthcoming Annual General Meeting are H R Ward and I M McArdle. The Director to retire in accordance with Article 90 of the Articles of Association and seeking re-election, having been appointed during the year, is W E Cesman.

 

Directors' interests

The interests of the Directors in the share capital of the Company (all of which are beneficial unless otherwise stated) as at  30 September 2008 are set out below:

	Number of Shares	Number of Shares
Director	as at 30 Sept 2008	as at 30 Sept 2007
P E J F de Nicolay	30,000	-
I M McArdle	15,000	5,000
H R Ward	10,000	10,000
D T D Harrel	43,174	-
R M Melhuish	10,000	-
R M Taylor	-	-
W E Cesman	-	-

These interests remain unchanged as at the date of this report.

Disclosure of information to the Independent Auditor

So far as the Directors are aware, there is no relevant audit information of which the Company's Independent Auditor, in connection with the preparation of its report is unaware and each Director has taken all reasonable steps to make himself aware of any relevant audit information and to establish that the Company's Independent Auditor is aware of that information.

Annual General Meeting

The Annual General Meeting of the Company will be held on 29 January 2009 at midday at the offices of Simcocks Trust Limited.

The Ordinary Business comprises receipt of the Directors' Report and audited financial statements for the year ended 30 September 2008; approval of the Directors' Remuneration Report; the declaration of a final dividend; the re-appointment of three Directors; the re-appointment of Grant Thornton as Independent Auditor and authorisation of the Directors to determine the Independent Auditor's remuneration. Resolutions 1 to 7 deal with these matters.

The Special Business comprises the authorisation of the Directors to allot Ordinary Shares up to a maximum nominal amount of £4,425,398 during the period to expire on the date of the Annual General Meeting to be held in 2010. The Special Business also comprises the authorisation of the Directors to make market purchases (within the meaning of Section 13 of the Isle of Man Companies Act 1992) of Ordinary Shares, provided that:

(a)the maximum number of Ordinary Shares authorised to be acquired is 10.00 per cent of the issued Ordinary Shares at the date of this report;

(b)the minimum price which may be paid for any such Ordinary Share is 10 pence;

(c)the maximum price which may be paid for any such Ordinary Share is the amount equivalent to 105 per cent of the arithmetical average of the middle market quotations (as derived from the Daily Official List of the London Stock Exchange plc) for the five business days immediately preceding the day on which the Ordinary Share is purchased; and

(d) the authority shall expire on the date of the Annual General Meeting of the Company to be held in 2010.

The current authorities for the Directors to allot shares and to make market purchases expire on the date of the 2009 Annual General Meeting, to be held on 29 January 2009. Resolutions 8 and 9 deal with these matters.

The next item of Special Business will renew the Directors' authority to disapply pre-emption rights. The current authority will expire on the date of the 2009 Annual General Meeting, to be held on 29 January 2009. Resolution 10 will deal with this matter.

Resolution 11, a Special Resolution, will authorise the Directors to cancel £50 million of the Company's Share Premium account, subject to the confirmation of the court, in order to provide further flexibility for the Company's financial structure.

Resolution 12, also a Special Resolution, will be put to the meeting recommending that the Company's Articles of Association are amended in relation to the borrowing powers of the Company.

The Notice of the Annual General Meeting and the resolutions to be put to the meeting are included as a separate document which you should receive with the Annual Report and financial statements.

Creditor payment policy

It is the Group policy to settle suppliers' accounts in accordance with their individual terms of business. As at 30 September 2008, the Company had £0.1 million of trade creditors representing 15 creditor days (2007: £1,387,000 of trade creditors representing 25 creditor days).

Statement of Directors' responsibilities

Isle of Man company law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that year. In preparing these financial statements, the Directors have:

•selected suitable accounting policies and applied them consistently;

•made judgements and estimates that are reasonable and prudent;

•followed applicable International Financial Reporting Standards ("IFRS"); and 

•prepared the financial statements on a going concern basis. 

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and to enable them to ensure that the financial statements comply with the Isle of Man Companies Acts 1931 to 2004 (as amended). They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

CONSOLIDATED INCOME STATEMENT (unaudited)

for the year ended 30 September 2008

	Notes	Year ended 30 September 2008			Year ended 30 September 2007
		Trading  Operations* £m	Other Items** £m	Total £m	Trading  Operations* £m	Other Items** £m	Total £m
Revenue	4	42.0	-	42.0	33.1	-	33.1
Deficit on revaluation of investment properties	11	-	(140.8)	(140.8)	-	(22.6)	(22.6)
Profit on disposal of investment properties		-	0.8	0.8	-	1.4	1.4
Administrative expenses		(6.7)	(0.7)	(7.4)	(3.8)	-	(3.8)
OPERATING PROFIT/(LOSS)	5	35.3	(140.7)	(105.4)	29.3	(21.2)	8.1
Finance income	7	1.2	-	1.2	2.0	-	2.0
Finance cost	7	(25.8)	-	(25.8)	(19.7)	-	(19.7)
PROFIT/(LOSS) BEFORE TAX		10.7	(140.7)	(130.0)	11.6	(21.2)	(9.6)
Income tax expense	8	(0.4)	-	(0.4)	(0.2)	-	(0.2)
PROFIT/(LOSS) FOR THE YEAR	20	10.3	(140.7)	(130.4)	11.4	(21.2)	(9.8)
Earnings per share from continuing operations
Basic/Diluted - pence	9	7.77	(106.00)	(98.23)	9.70	(18.10)	(8.40)

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE (unaudited)

for the year ended 30 September 2008

	Notes	Year ended 30 September 2008			Year ended 30 September 2007
		Trading  Operations* £m	Other Items** £m	Total £m	Trading  Operations* £m	Other Items** £m	Total £m
Income and expense recognised  directly in equity
(Loss)/gains on cash flow hedges	20	-	(13.8)	(13.8)	-	12.9	12.9
(Loss)/gain foreign currency translation	20	-	1.2	1.2	-	0.6	0.6
NET INCOME RECOGNISED IN EQUITY		-	(12.6)	(12.6)	-	13.5	13.5
PROFIT/(LOSS) FOR THE YEAR	20	10.3	(140.7)	(130.4)	11.4	(21.2)	(9.8)
TOTAL RECOGNISED INCOME AND  EXPENSE FOR THE YEAR	20	10.3	(153.3)	(143.0)	11.4	(7.7)	3.7

All activities are continuing.

*Operations: This excludes the Other Items and reflects the trading activities of the Group.

**Other Items: Includes the profits and losses on the sales of investment properties and items of a non-trading nature such as valuation adjustments arising from the fair value of investment properties and derivative financial instruments.

CONSOLIDATED BALANCE SHEET (unaudited)

As at 30 September 2008

	Notes	30 September 2008 £m	30 September 2007 £m
NON-CURRENT ASSETS
Investment properties	11	587.0	663.6
Derivative financial assets	17	1.3	15.1
		588.3	678.7
CURRENT ASSETS
Trade and other receivables	12	31.3	18.9
Cash at bank	13	15.1	20.3
		46.4	39.2
ASSETS HELD FOR SALE	14	-	10.9
TOTAL ASSETS		634.7	728.8
CURRENT LIABILITIES
Trade and other payables	15	(25.5)	(25.8)
		(25.5)	(25.8)
NON-CURRENT LIABILITIES
Borrowings	16	(490.5)	(424.6)
Deferred tax liabilities	8	(0.7)	(0.4)
		(491.2)	(425.0)
LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE	14	-	(1.3)
TOTAL LIABILITIES		(516.7)	(452.2)
NET ASSETS		118.0	276.7
EQUITY
Share capital	19	13.3	13.3
Share premium	20	168.7	168.7
Retained earnings	20	(65.2)	81.2
Cash flow hedges reserve	20	(0.6)	12.9
Currency translation reserve	20	1.8	0.6
TOTAL EQUITY ATTRIBUTABLE TO THE ORDINARY  EQUITY HOLDERS OF THE PARENT COMPANY		118.0	276.7
NET ASSET VALUE
Basic/Diluted - pence per share	10	88.9	208.5

CONSOLIDATED CASH FLOW STATEMENT (unaudited)

for the year ended 30 September 2008

	Year ended 30 September 2008 £m	Year ended 30 September 2007 £m
OPERATING PROFIT FOR THE YEAR	(105.4)	8.1
Adjust non-cash items:
Decrease in fair value of investment properties	140.8	22.6
(Profit) on sale of investment properties	(0.8)	(1.2)
Performance fee adjustment	-	(1.5)
Accrued rental income	(0.3)	(0.4)
Rent incentives	(11.8)	0.2
Foreign exchange loss	(5.7)	-
Working capital adjustments:
Decrease/(Increase) in trade and other receivables	0.1	(5.7)
(Decrease)/Increase in trade and other payables	(0.6)	12.2
Finance costs paid	(26.0)	(19.2)
Finance costs received	1.3	2.0
Finance lease interest	(0.2)	(0.2)
CASH FLOWS FROM OPERATING ACTIVITIES	(8.6)	16.9
INVESTING ACTIVITIES
Purchase of investment properties	(42.4)	(251.3)
Sale of investment properties	11.0	13.3
CASH FLOW USED IN INVESTING ACTIVITIES	(31.4)	(238.0)
FINANCING ACTIVITIES
Ordinary Shares issued (net of expenses)	-	73.3
Increase in bank debt	48.5	161.0
Equity dividends paid	(13.7)	(10.2)
CASH FLOWS FROM FINANCING ACTIVITIES	34.8	224.1
(Decrease)/INCREASE IN CASH AND CASH EQUIVALENTS	(5.2)	3.0
Cash and cash equivalents at beginning of period	20.3	17.3
CASH AND CASH EQUIVALENTS AT YEAR END	15.1	20.3

NOTES TO THE FINANCIAL STATEMENTS

1.Basis of preparation 

The financial information in this report is abridged and does not constitute the Group's full Financial Statements for the years ended 30 September 2008 and 30 September 2007, and has been prepared under International Financial Reporting Standards

(IFRS).

Full Financial Statements for the year ended 30 September 2007, which were prepared under IFRS, received an unqualified auditors' report and did not contain a statement under Section 15 (4)(b) or (6) of the Isle of Man Companies Act 1982, have been filed with the Isle of Man Registrar of Companies.

Financial Statements for the year ended 30 September 2008 will be presented to the Members at the forthcoming Annual General Meeting; the Auditor's report on these Financial Statements is unqualified. 

These accounting policies have been consistently applied to all the periods presented.

The financial statements are prepared on the historical cost basis, except for investment property and derivative financial instruments that are measured at fair value. The financial statements are presented in millions of pounds sterling (£m) except where otherwise indicated. 

2.Significant accounting policies

A summary of the principle accounting policies is set out below and the most significant ones are italicised:

Basis of consolidation

The financial statements comprise the historical financial information of Wichford P.L.C. and its subsidiaries ("the Group") for the period ended 30 September 2008. Wichford P.L.C. is a public listed company incorporated in the Isle of Man. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred from the Group. Control comprises the power to govern the financial and operating policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting rights; currently exercisable or convertible potential voting rights; or by way of contractual agreement.

The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies. All intra-group transactions are eliminated as part of the consolidation process. 

Revenue

Revenue recognised in the income statement represents property rental income and interest income, net of VAT and other sales-related taxes, as follows:

Rental income receivable under operating leases

Rental income receivable under operating leases is recognised on a straight-line basis over the term of the lease, except for contingent rental income which is recognised when it arises.

Incentives for lessees to enter into lease agreements are spread evenly over the non-cancellable period of the lease, even if the payments are not made on such a basis.

Premiums received to terminate leases are recognised in the income statement when they arise.

The lease term is the non-cancellable period of the lease together with any further term for which the tenant has the option to continue the lease, where, at the inception of the lease, the Directors are reasonably certain that the tenant will not exercise that option.

Service charges

Where the Group invoices service charges, these amounts are not recognised as income as the risks in relation to the provision of these goods and services are primarily borne by the Group's customers. Any servicing expenses suffered by the Group are included within direct costs.

Interest income

Interest income is recognised as it accrues using the effective interest rate basis.

Insurance premiums

Insurance premiums recharged to tenants are not reflected in either income or expense.

Property acquisitions

Where properties are acquired through the acquisition of corporate interests the Directors have regard to the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business.

Where such acquisitions are not judged to be an acquisition of a business the transactions are accounted for as if the Group had acquired the underlying property directly. Accordingly, no goodwill arises, rather the cost of the corporate entity is allocated between the identifiable assets and liabilities of the entity based on their relative fair values at the acquisition date.

Otherwise corporate acquisitions are accounted for as business combinations.

Business combinations and goodwill

Business combinations are accounted for under IFRS 3 using the purchase method of accounting.  The cost of acquisition is the consideration given in exchange for the identifiable net assets. This consideration includes any cash paid plus the fair value at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued by the Group. The cost of acquisition also includes directly attributable costs.

The acquired net assets are initially recognised at fair value. Where the Group does not acquire 100 per cent ownership of the acquired company, a minority interest is recorded as the minority's proportion of the fair value of the acquired net assets. Any adjustment to the fair values is recognised within twelve months of the acquisition date.

Goodwill on acquisitions comprises the excess of the fair value of the consideration plus any associated costs for investments in subsidiaries over the fair value of the identifiable net assets acquired. Any goodwill and fair value adjustments are recorded as assets and liabilities of the acquired company for the purposes of consolidation and are recorded in the local currency of that company. The costs of integrating and reorganising acquired businesses are charged to the post-acquisition income statement.

Goodwill is carried at cost less accumulated impairment losses.

The Group's goodwill is reviewed at each balance sheet date on an annual basis, or more frequently if there is an indication that the goodwill is impaired, to determine whether events or changes in circumstances exist that indicate that their carrying amount may not be recoverable. If such an indication exists, the asset's recoverable amount is estimated. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. An impairment loss is recognised in the income statement for the amount by which the asset's carrying amount exceeds its recoverable amount.

Investment property

Property held to earn rent or for capital appreciation, or both, is classified as investment property and recognised initially at cost, including directly attributable transaction costs.

Property held under leases for the same purpose is also classified as investment property, accounted for as held under a finance lease and initially recognised at the sum of any premium paid on acquisition and the present value of any further minimum lease payments. The corresponding liability to the superior leaseholder is included in the balance sheet as a finance lease obligation.

Thereafter investment property is measured at fair value, which reflects market conditions at the balance sheet date. For the purposes of the historical financial information, the assessed fair value is:

•  reduced by the carrying amount of any accrued income resulting from the spreading of lease incentives 

and/or minimum lease payments; and

•  increased by the carrying amount of any liability to the superior leaseholder included in the balance sheet

as a finance lease obligation.

The annual valuations of investment property are based upon estimates and subjective judgements that may vary from the actual values and sales prices that may be realised by the Group upon ultimate disposal. The critical assumptions made relating to valuations have been disclosed in note 11 to the financial statements.

Gains or losses arising from changes in the fair value of investment property are included in the income statement in the year in which they arise. Profits or losses on the disposal of investment property are recognised at contract completion for the disposal.

Non-current assets held for sale

Investment property is transferred to non-current assets held for sale when it is expected that the carrying amount will be recovered principally through sale rather than from continuing use due to advanced sale discussions. On re-classification, investment property continues to be measured at fair value.

Finance leases

Finance leases are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the income statement as they arise.

Cash and short-term deposits

Cash and short-term deposits in the balance sheet comprise cash at bank, short-term deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

For the purpose of presenting the "Consolidated cash flow statement", cash and cash equivalents consist of cash and short-term deposits as defined above, net of outstanding bank overdrafts.

Trade and other receivables

Trade and other receivables are recognised and carried at the lower of their original invoiced value and recoverable amount. A provision for impairment of trade receivables is established where there is objective evidence that the Group will not be able to collect all amounts due according to original terms of the receivables concerned. Balances are written off when the probability of recovery is assessed as being remote.

Trade and other payables

Trade and other payables are recognised at fair value and subsequently measured at amortised cost.

Loans and borrowings

Loans and borrowings are initially recognised at fair value less directly attributable transaction costs.

After initial recognition, interest and non-interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement.

Borrowing costs are recognised in the income statement using the effective interest rate method.

Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised in finance income and finance expense respectively.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and recognition of new liability, and the difference in the respective carrying amounts is recognised in the income statement.

Derivative financial instruments

The Group uses derivative financial instruments, such as interest rate swaps, to hedge its risks associated with interest rate fluctuations. The Group does not hold or issue derivatives for trading purposes. Such derivative financial instruments are initially recognised at fair value on the date at which a derivative contract is entered into and are subsequently remeasured at fair value at each reporting date.

For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are taken directly to the income statement for the year. For derivatives that qualify for hedge accounting, the effective portions of the gains or losses arising from changes in fair value are recognised in equity as net unrealised gains or losses, while any ineffective portion is recognised immediately in profit or loss.

For the purpose of hedge accounting, interest rate swaps are designated as cash flow hedges where they hedge exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a forecast transaction.

Hedge accounting is discontinued when the hedging instrument expires, is sold, terminated, exercised or no longer qualifies for hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in equity is kept in equity until the forecast transaction occurs. At the time of the forecast transaction, the net cumulative gain or loss recognised in equity is transferred to the income statement for the year.

Fair values of financial instruments

The fair value of quoted instruments is determined by reference to bid prices at the close of business on the balance sheet date. Where there is no active market, fair value is determined using valuation techniques. These include using recent arms-length market transactions; reference to the current market value of another instrument which is substantially the same; discounted cash flow analysis and pricing models.

Share-based payments

A performance fee is payable as part of the contract with the Property Adviser, and this is to be satisfied by the issuance of new shares in the parent company. This performance fee is related to the total return to Shareholders, based on the share price and dividends paid. The resulting performance fee for a particular performance period will be settled by the issuance of shares to the Property Adviser, subject to certain vesting conditions, at the end of the subsequent two years.

The performance fee is charged to the income statement over the vesting period in accordance with IFRS 2 Share-based payment. Until the issuance of any shares under this contract, and in accordance with IFRS 2 guidance, the charge to the income statement is added back to distributable reserves, as it does not result in cash leaving the Group.

On the issuance of any shares under this contract, the full market value of the shares issued will be charged to the parent company's distributable reserves.

Current taxation

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the balance sheet date.

Deferred taxation

Deferred income tax is provided using the liability method on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes with the following exceptions:

•  where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a

transaction that is not a business combination that at the time of the transaction affects neither accounting

nor taxable profit or loss;

• in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of

the reversal of the temporary differences can be controlled and it is probable that the temporary differences

will not reverse in the foreseeable future; and

•  deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be

available against which deductible temporary differences, carried forward tax credits or tax losses can be

utilised.

The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted, or substantively enacted, at the balance sheet date.

In determining the expected manner of realisation of an asset, the Directors consider that the Group will recover the residual value of an asset through sale and the depreciable amount through use. Whilst investment property is measured at fair value, it is intrinsically depreciable. Consequently deferred tax relating to that portion of the carrying amount of the investment property that would be considered depreciable under IAS 16 is measured on an "in use", not an "on sale" basis. The element of the total carrying amount of the investment property represented by the land is considered non-depreciable and the Directors estimate the depreciable amount and residual value of the building element on a case-by-case basis.

Foreign currency translation

Transactions in foreign currencies are initially recorded in the functional currency by applying the spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the balance sheet date. All differences are taken to the income statement. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on a monetary item that forms part of a reporting entity's net investment in a foreign operation shall be recognised in profit or loss in the separate financial statements of the reporting entity or the individual financial statements as appropriate. In the financial statements that include the foreign operations and the reporting entity (the Group accounts), such exchange differences shall be recognised initially in a separate component of equity and recognised in profit or loss on disposal of the foreign operation.

The assets and liabilities of foreign operations are translated into sterling at the rate of exchange ruling at the balance sheet date. Income and expenses of foreign operations are translated at weighted average exchange rates for the accounting period. The resulting exchange differences are taken directly to a separate component of equity.

Operating profit

Operating profit is profit stated after profit/loss on disposal of investment properties and the revaluation of the property portfolio but before finance income and costs.

Exceptional items

The Group presents as exceptional items on the face of the income statement, those material items of income and expense which, because of the nature and expected infrequency of the events giving rise to them, merit separate presentation to allow Shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.

Equity

Equity comprises the following:

• "Share Capital" represents the nominal value of equity shares.

• "Share Premium" represents the excess over nominal value of the fair value of consideration received for

equity shares, net of expenses of share issues.

• "Retained earnings" represents retained profits.

• "Cash flow hedges reserve" represents changes in the carrying amount of cash flow hedges.

• "Currency translation reserve" represents the differences arising from translation of investments in overseas

subsidaries.

New standards and interpretations not applied

The International Accounting Standards Board ("IASB") and International Financial Reporting Interpretations Committee ("IFRIC") have issued the following standards and interpretations with effective dates after the date of these financial statements that have not yet been adopted by the Group.

IASB

Amendment to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation (effective 1 January 2009).

IAS 27 Consolidated and Separate Financial Statements (Revised 2008) (effective 1 July 2009).

Amendment to IFRS 2 Share-based Payment - Vesting Conditions and Cancellations (effective 1 January 2009).

Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements - Costs of Investment in a Subsidiary, Jointly Controlled Entity or Associate (effective 1 January 2009).

Amendment to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items (effective 1 July 2009).

Improvements to IFRSs (effective 1 January 2009 other than certain amendments effective 1 July 2009).

IFRS 3 Business Combinations (Revised 2008) (effective 1 July 2009).

IFRS 8 Operating Segments (effective 1 January 2009).

IFRIC

IFRIC 15 Agreements for the Construction of Real Estate (effective 1 January 2009).

IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective 1 October 2008).

None of the above Standards or Interpretations is expected to have a material impact.

The Company has adopted IFRS 7 "Financial Instruments: Disclosures" for these financial statements.

Critical Judgements and estimates

The preparation of financial statements in conformity with IFRS requires the use of judgements and estimates that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the period reported. Although these estimates are based on the Directors' best knowledge of the amount, event or actions, actual results may differ from those estimates.

The principal areas where such judgements and estimates have been made are:

Investment property valuation

The Group uses the valuation performed by its independent valuers as the fair value of its investment properties. The valuation is based upon assumptions including estimated rental values, future rental income, anticipated maintenance costs, future development costs and appropriate discount rates. The valuers also make reference to market evidence of transaction prices for similar properties.

Deferred taxation

The Group considers that the value of the property portfolio is likely to be realised by sale rather than use over time. Therefore, no provision has been made for deferred taxation on valuation uplift.

The Group bases its deferred taxation provision on the assumption that the residual value of the investment properties is not less than the present value as provided by its external valuers.

Derivative financial instruments

The Group uses the valuation provided by its bankers as the fair value of its cash flow hedges. The valuation is based upon assumption including market process and estimated cash flows.

3.Segment information

The primary reporting segment of the Group is the entire business. The business activity of the Group is property investment in the UK and Continental Europe which the Board considers to be the only business segment. Therefore information provided elsewhere in the historical financial information relates to that segment.

Secondary reporting format - Geographic segments

The following table presents revenue, expenditure and certain asset information regarding the Group's geographical segments:

Year ended 30 September 2008	UK £m	Rest of Europe £m	Total £m
Segment revenue	33.0	9.0	42.0
Carrying amount of Segment assets
Segment assets	441.4	194.0	635.4
Segment capital expenditure
Acquisition of investment properties	15.2	28.6	43.8

Year ended 30 September 2007	UK £m	Rest of Europe £m	Total £m
Segment revenue	31.3	1.8	33.1
Carrying amount of Segment assets
Segment assets	572.7	156.1	728.8
Segment capital expenditure
Acquisition of investment properties	110.4	149.6	260.0

4. Revenue

	Year ended 30 September 2008 £m	Year ended 30 September 2007 £m
Rental income	42.0	33.0
Other income	-	0.1
	42.0	33.1
Finance income (note 7)	1.2	2.0
	43.2	35.1

5.Operating profit

The following items have been charged in arriving at operating profit:

	Year ended 30 September 2008 £m	Year ended 30 September 2007 £m
Property Advisor's fees
- for advisory services	3.9	3.4
- for accrued performance fees	-	(1.5)
Property Manager's fees	0.1	0.2
Independent Auditor's remuneration
- for audit	0.2	0.1
- for review of tax provision	-	-
- for tax compliance work	0.2	0.2
- for other advisory services	0.1	-
Legal fees	1.4	0.4

In addition to the fees shown above as the Independent Auditor's remuneration, the Independent Auditor also charged nil (2007: £0.1 million) for due diligence and advisory services. These fees have been either capitalised as part of the cost of acquiring properties or charged to the Share Premium account as an expense of raising additional share capital. The total fees payable to the auditor in the year were £0.5 million (2006: £0.4 million).

The performance fee is payable by Wichford P.L.C. to Wichford Property Management Limited (WPML) and takes the form of a share incentive scheme, under which WPML will acquire Ordinary Shares in Wichford P.L.C. at no cost, by way of an annual profit-sharing participation.

The amount of the annual award is calculated as 20 per cent of the amount by which the total return on the Ordinary Shares in Wichford P.L.C. exceeds 10 per cent for the preceding financial year. A separate calculation of the amount of the annual award is made in relation to each separate tranche of Ordinary Shares in Wichford P.L.C. issued during the relevant financial year. 

The award of these shares will only vest if the annualised return over the three-year period from the beginning of the relevant financial year to the end of the period two years later, is not less than 10 per cent per annum and will only be issued if Wichford P.L.C.'s net asset per share value is greater than, or equal to, its net asset per share value as at 5 August 2004.

Wichford P.L.C. estimates the accrual for the performance fee for each half-yearly and year-end financial report.

The amounts accrued in the past two years and the resultant charges to the consolidated income statement are nil and £0.9 million respectively.

In the previous year, the share price fell and therefore the amount in the financial statements had been adjusted accordingly to reflect the fact that the annualised return had not been achieved over the past three years. As a result, there had been a reduction in the performance fee accruals and a resultant credit to the consolidated income statement of £1.5 million.

Included in the administrative expenses in the consolidated income statement of £7.4 million are the costs of the move from AIM to the Main Market of the London Stock Exchange plc, which amounted to £0.7 million and are shown in the Other Items column.

6.Directors' emoluments

There were no employees other than the Directors of the parent company. Directors' emoluments paid in the year were £152,470 (2007: £175,250) and all relate to fees; there being no other benefits or payments.

7.Finance revenue and costs

	Year ended 30 September 2008 £m	Year ended 30 September 2007 £m
Finance revenue
Interest receivable	1.2	2.0
Fair value adjustment of interest rate swap	-	-
Total finance revenue	1.2	2.0
Finance costs
Bank interest	25.1	19.0
Amortisation of loan agreement fees	0.5	0.4
Finance lease interest	0.2	0.2
Other	-	0.1
Total finance expense	25.8	19.7

8.Income tax

(a)Tax on profit from ordinary activities

	Year ended	Year ended
	30 September 2008 £m	30 September 2007 £m
Profit for the period not subject to UK income tax	(123.4)	(9.6)
Profit before tax	(123.4)	(9.6)
Current income tax
Adjustments in respect of previous period	-	-
Income tax on interest receivable	-	-
Total current income tax	-	-
Deferred tax
Origination and reversal of temporary differences	0.4	0.2
Income tax expense reported in the income statement	0.4	0.2

(b)Deferred tax

Deferred tax included in the balance sheet is as follows: 

	30 September 2008 £m	30 September 2007 £m
Deferred tax liability
Lease accounting temporary differences	0.7	0.4
Deferred tax liability	0.7	0.4

The deferred tax included in the income statement is as follows:

	Year ended 30 September 2008 £m	Year ended 30 September 2007 £m
Lease accounting temporary differences	0.4	0.2
Deferred income tax expense	0.4	0.2

9.Earnings per share 

Basic earnings per share for the year ended 30 September 2008 is based on the loss attributable to equity shareholders of £130.4 million (2007: loss of £9.8 million) and a weighted average number of Ordinary Shares outstanding during the year ended 30 September 2008 of 132,726,728 (2007: 116,904,399).

Diluted earnings per share are the same as basic earnings per share.

	Year ended 30 September 2008 £m	Year ended 30 September 2007 £m
Loss attributable to equity shareholders	(130.4)	(9.8)
Weighted average number of Ordinary Shares (000s)	132,727	116,904
Earnings per share - pence
Basic loss per share	(98.23)	(8.40)

10.Net assets per share

Net assets per share is calculated by dividing the net assets at 30 September 2008 attributable to the equity holders of the parent of £118.0 million (2007: £276.7 million) by the number of Ordinary Shares as at 30 September 2008 of 132,761,948 (2007: 132,703,055)

	30 September 2008	30 September 2007
Net assets attributable to equity holders of the parent (£m)	118.0	276.7
Number of Ordinary Shares (000s)	132,762	132,70
Net assets per share (pence)	88.9	208.5

11.Investment properties

		Freehold
	Freehold/	and long	Long
	Feuhold	leasehold	leasehold	Total
2008	£m	£m	£m	£m
At 30 September 2007	515.0	37.1	111.5	663.6
Foreign exchange differences	20.5	-	-	20.5
Purchases during the year	43.5	-	-	43.5
Disposals during the year	-	-	(10.2)	(10.2)
Valuation gains/(losses)	(113.6)	(5.0)	(22.7)	(141.3)
Transferred from assets held for sale	-	-	10.9	10.9
Reclassifications	3.1	(9.7)	6.6	-
At 30 September 2008	468.5	22.4	96.1	587.0

During the year to 30 September 2008 the Group acquired two properties for a total consideration of £42.4 million. In addition, the Group disposed of one property for £11.0 million, producing a profit in excess of £0.8 million. As a result of these transactions, at 30 September 2008, the Group owned 79 properties throughout the UK, France, Germany and the Netherlands. 

		Freehold
	Freehold/	and long	Long
	Feuhold	leasehold	leasehold	Total
2007	£m	£m	£m	£m
At 30 September 2006	308.1	29.7	113.6	451.4
Purchases during the year	245.9	14.2	-	260.1
Disposals during the year	(16.9)	-	-	(16.9)
Valuation gains/(losses)	(24.5)	(6.8)	8.8	(22.5)
Transferred to assets held for sale (Note 14)	-	-	(10.9)	(10.9)
Payment on account for asset in course of construction	2.4	-	-	2.4
At 30 September 2007	515.0	37.1	111.5	663.6

All the Group's investment properties were externally valued as at 30 September 2008 and 30 September 2007 on the basis of open market value by professionally qualified valuers in accordance with the Appraisal and Valuation Standards of the Royal Institution of Chartered Surveyors. The Group's valuer is Atisreal Limited in the UK and DTZ for Continental Europe for the valuations as at 30 September 2008. For the previous year's valuation the Continental Europe properties were valued by DTZ in France together with Savills and JLL in Germany.

The value of each of the properties has been assessed in accordance with the relevant parts of the Red Book. In particular, the Market Value has been assessed in accordance with PS 3.2. Under these provisions, the term "Market Value" means "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms-length transaction after proper marketing wherein the parties have each acted knowledgeably, prudently and without compulsion". 

In undertaking the valuations on the basis of Market Value, the valuers have applied the interpretative commentary which has been settled by the International Valuation Standards Committee and which is included in PS 3.2. The RICS considers that the application of the Market Value definition provides the same result as Open Market Value, a basis of value supported by previous editions of the Red Book.

The valuation does not include any adjustments to reflect any liability to taxation that may arise on disposal, nor for any costs associated with disposals incurred by the owner. No allowance has been made to reflect any liability to repay any government or other grants, or taxation allowance that may arise on disposals. Deductions have been made to reflect purchasers' acquisition costs. These have been applied according to value on a sliding scale, representative of the typical costs that would be incurred in the market.

A reconciliation of investment and development property valuations to the balance sheet carrying value of property is shown below:

	30 September	30 September
	2008	2007
	£m	£m
Investment property at Market Value as determined by external valuers	597.9	673.5
Add minimum payment under head leases separately included as a payable in the balance sheet	2.0	3.5
Less accrued incentives separately included as a receivable in the balance sheet	(11.8)	(4.2)
Less accrued rental income separately included as a receivable in the balance sheet	(1.2)	(0.8)
Add accrued rental income separately included as a payable in the balance sheet	0.1	0.1
	587.0	672.1
Add payment on account for asset in the course of construction	-	2.4
Less property transferred to assets held for sale	-	(10.9)
Balance sheet carrying value of investment property	587.0	663.6

12.Trade and other receivables

	30 September	30 September
	2008	2007
	£m	£m
Trade receivables	6.9	7.2
VAT recoverable	5.5	0.1
Accrued rental incentives	11.8	4.2
Accrued rental income	0.5	0.8
Other prepayments	5.3	6.2
Service charge	1.3	0.4
	31.3	18.9

Trade receivables are non-interest bearing and generally have a 14-day term. Due to their short maturities, the fair value of trade and other receivables approximates to their book value. 

As at 30 September 2008 nil trade receivables were impaired (2007: nil). As at 30 September 2008, nil trade receivables were overdue but not impaired (2007: nil).

13.Cash and cash equivalents

	30 September	30 September
	2008	2007
	£m	£m
Cash at bank	15.1	20.3

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods dependent on the immediate cash requirements of the Group. The book value of cash and cash equivalents approximates their fair value.

14.Assets held for sale

As at 30 September 2008 the Group was not holding any assets for sale.

As at 30 September 2007 the long leasehold property at Archway, Islington, in London with an external valuation of £9.5 million, was classified as held for sale. The carrying value of the property (£10.9 million) and the present value of the Archway finance lease (£1.3 million) were presented separately on the balance sheet. The disposal of this property was completed on 11 October 2007.

15.Trade and other payables

	30 September	30 September
	2008	2007
	£m	£m
Rents received in advance	9.7	8.3
VAT payable	1.1	0.5
Other payables and accruals	13.4	16.5
Accrued rental income	-	0.1
Service charge	1.3	0.4
	25.5	25.8

Trade and other payables are non-interest bearing and it is the Group's policy to pay within the stated terms which typically vary from 30-45 days. Due to their short maturities, the fair value of trade payables approximates to their book value. 

16.Borrowings

	30 September	30 September
	2008	2007
	£m	£m
Non-current
Bank loans	492.8	425.3
Less: deferred finance costs	(4.3)	(2.7)
Finance leases	2.0	3.4
Less: finance lease classified as held for sale	-	(1.4)
	490.5	424.6

a)Bank Loans

At 30 September 2008, the bank borrowings of £492.8 million (2007: £425.3 million) are secured by fixed and floating charges over the assets and income streams of the Group. It comprised of seven separate borrowing facilities each secured on a number of discrete assets with no common assets. 

These facilities are summarised as below:

		30 September	30 September
		2008	2007
Facility	Lender	£m	£m
Delta	Windermere XI CMBS Ltd	114.6	114.6
Gamma	Windermere VIII CMBS Ltd	199.7	199.7
Hague	SNS Property Finance	17.5	-
Halle	Windermere XIV CMBS Ltd	29.5	22.2
VBG1	Talisman 3	55.9	49.5
VBG2	Talisman 4	44.6	39.3
Zeta	Lloyds TSB	31.0	-
		492.8	425.3

The Gamma and Delta facilities are non-amortising and have final repayment dates in October 2012 and both have been put into securitisation conduits by the lender. 

The Hague facility is non-amortising and has a final repayment date in July 2014.

The Halle facility is non-amortising and has a final repayment date in April 2014. 

The VBG facilities are amortising dependent upon expected rent rises with final repayment dates in January 2010 for VBG1 and April 2011 for VBG2. However, on acquisition, part of the purchase price was paid into escrow accounts such that all expected amortisation of these bank loans will be funded by the escrow accounts. These facilities have been put into securitisation conduits by the lender.

The Zeta facility is non-amortising and has a final repayment date in May 2011.

All of the facilities are subject to the interest rate swaps detailed in note 17. The only exception is £5.0 million of the Zeta facility that is not subject to an interest rate swaps as it is expected that this amount will be repaid in the near future.

The book value of borrowings is not materially different to the fair value.

b)Finance Leases

Obligations under finance leases at the balance sheet dates are analysed as follows:

	30 September	30 September
	2008	2007
	£m	£m
Gross finance lease liabilities repayable:
In one year or less	0.1	0.2
In more than one year, but not more than five years	0.5	0.8
In more than five years	18.3	18.6
	18.9	19.6
Less: finance charges allocated to future periods	(16.9)	(16.2)
Present value of minimum lease payments	2.0	3.4

	30 September	30 September
	2008	2007
	£m	£m
Present value of finance lease liabilities repayable:
In one year or less	-	-
In more than one year, but not more than five years	0.1	-
In more than five years	1.9	3.4
Present value of minimum lease payments	2.0	3.4

The present values of minimum lease payments have been calculated by using the market cost of external borrowings available to the Group at the inception of the lease. The Directors consider that the carrying amount of these finance lease obligations approximate their fair value.

17. Derivative financial instruments

The Group enters into interest rate swaps and forward currency contracts. The purpose is to manage the interest rate and currency risks arising from the Group's operations and its sources of finance.

It is the Group's policy that no trading in derivatives shall be undertaken.

a)Interest rate swap agreements

In accordance with the terms of the borrowing arrangements, the Group has entered into interest swap agreements.

The interest rate swaps are used to manage the interest rate profile of financial liabilities. The Group has employed interest rate swaps to eliminate future exposure to interest rate fluctuations. As a result of the use of interest rate swaps, the fixed rate profile of the Group was:

The total amount of notional value of these interest rate swaps at 30 September 2008 was £487.8 million (2007:£425.3 million) and the blended fixed rate achieved by these interest rate swaps was 4.58% (2007: 4.55%).

The interest rate swaps which were originally taken out by the Group as interest rate hedges on the Delta, Gamma and Halle facilities were novated to or were taken out with a Lehman Brothers company. From then a fixed rate interest became payable, equivalent to that under the swaps. Since, by this means the Group has the economic interest in these swaps, it has recognized them in its accounts.

However the interest rate swaps held by the securitisation vehicles have a Lehman Brothers' company as counter-party. As the status of this counter-party's ability to fulfill it obligations under these interest rate swaps is uncertain the Company has decided to assign a zero fair value to them.

The Group is still receiving the benefit of these interest rate swaps as the agent for the securitisation vehicles is continuing to charge interest according to the profiles of these interest rate swaps while the trustees of the securitisation vehicles consider how best to replace them.

The interest rate hedges from which the Group benefits have not been terminated at the time of this report.

 

The Group also has entered into the following additional interest rate swap contract that commences after the year end as follows:

				30 September	30 September
				2008	2007
Effective Date	Maturity Date	Swap Rate		£m	£m
01/11/2011	15/10/2012	4.90%	*	113.7	113.7

The overall effect of the derivatives in the above tables is to maintain a constant total nominal value of the amount hedged. This is achieved by the nominal value of a number of the above derivatives reducing over time, offset by the nominal value of another increasing over the total period of the borrowings.

	30 September	30 September
	2008	2007
	£m	£m
Fair value of the Group's derivative arrangements	1.3	15.1

Hedge accounting

The loss of £13.8 million on the fair value of the interest rate swaps (2007: gain of £12.9 million) in the 12 months to 30 September 2008 is reported in the reserves as the Group has applied hedge accounting to their swap agreements. The cash flow hedges have been assessed as highly effective. The swap agreements are designated a cash flow hedge against interest rate fluctuations.

The hedge arrangements have resulted in a benefit to cash flow of the Group of £0.9 million.

b) Forward Exchange Agreements

The Group has entered into short-term foreign exchange sale and purchase contracts for the purpose of mitigating the Group's exposure to foreign exchange rate movements on its equity investment in foreign property acquisitions. The Group chooses not to designate these contracts as hedging instruments.

Due to the short-term nature of these contracts, the fair value approximates to their book value.

c) Financial assets

The financial assets of the Group comprise cash deposits and hedging instruments held at fair value. The fair value of the cash deposits equates to the amount in the various Group bank accounts.

d) Financial liabilities

The financial liabilities of the Group comprise the Group's bank loans. These are held at amortised cost.

18.Financial risk management objectives and policies

The Group's principal financial instruments, other than derivatives (note 17), comprise bank loans, finance lease liabilities and cash. The main purpose of these financial instruments is to finance the Group's operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables that arise directly from its operations. 

The main risks arising from the Group's financial instruments are interest rate risk, exchange rate risk, credit risk and liquidity risk. The Board of Directors reviews and agrees policies for managing each of these risks which are summarised below.

The financial risks and the ways in which the Group manages them are listed as follows:

(a)Interest rate risk

The Group finances its operations through equity, retained profits and bank borrowings. All of the Group's bank borrowings are charged at variable interest rates. 

The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's long-term debt obligations with floating interest rates. The Group uses interest rate derivatives to fully mitigate its exposure to interest rate fluctuations. At the year end, as a result of the use of interest rate swaps, the majority of the Group's borrowings were at fixed interest rates.

	30 September	30 September
	2008	2007
Fixed rate bank borrowings weighted average interest rate	5.44%	5.36%
Weighted average period for which rate is fixed in years	4 years	7 years

The Group's profit before tax therefore has no exposure to interest rate fluctuations.

(b)Exchange rate risk

As the Group acquires properties in Continental Europe, there is now the additional risk of movements in €/£ exchange rates - the Group minimises the exposure to foreign currency exchange rate movements by matching, as much as possible, the investment properties and associated loans in the same currency.

The following table demonstrates the sensitivity to a reasonably possible change in the €/£ exchange rate, with all variables held constant, of the Group's profit before tax (due to changes in value of revenue and interest streams) and the Group's equity (due to changes in the value of investment properties and associated loans). 

		Effect on
		profit	Effect on
	Increase/decrease	before tax	equity
	in €/£ exchange rate	£m	£m
2008	+5%	(2.1)	(2.4)
	-5%	2.1	2.4
2007	+5%	-	(0.1)
	-5%	-	0.1

The €/£ exchange rate as at 30 September 2008 was 1.2582 (2007: 1.4359). The average rate for the year was 1.31738 (2007: 1.4359).

(c)Credit risk

The Group trades only with recognised, creditworthy third parties. It is the Group's policy that all tenants who wish to trade on credit terms are subject to credit verification procedures. In addition, the Group further manages the credit risks by employing specialist property managers to monitor the properties. The result is that the Group's exposure to bad debt is not significant. The maximum exposure is the carrying amount as disclosed in Note 12.

With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents and certain derivative instruments, the Group's exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

(d)Liquidity risk

The Group monitors its risk to a shortage of funds through the use of both short-term and long-term cash flow forecasts. The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans.

The table below summarise the maturity profile of the Group's borrowings at 30 September 2008 based on contractual undiscounted payments.

		Finance
		lease
	Bank loans	liabilities
At 30 September 2008	£m	£m
In one year or less	1.6	0.1
In more than one year, but not more than two years	56.1	0.1
In more than two years, but not more than three years	73.8	0.1
In more than three years, but not more than four years	-	0.1
In more than four years, but not more than five years	314.3	0.1
In more than five years	47.0	18.4
	492.8	18.9

		Finance
		lease
	Bank loans	liabilities
At 30 September 2007	£m	£m
In one year or less	0.4	0.2
In more than one year, but not more than two years	1.1	0.2
In more than two years, but not more than three years	49.0	0.2
In more than three years, but not more than four years	38.3	0.2
In more than four years, but not more than five years	-	0.2
In more than five years	336.5	18.6
	425.3	19.6

(e)Capital Management

The Company's Articles of Association set out the borrowing powers of the Company. This defines a maximum amount that could be borrowed to be five times the issued share capital of the Company and the capital and revenue reserves of the Company. This gives a maximum borrowing power at 30 September 2008 of £656 million (2007: £1,383 million). The Company expects to remain within this maximum for the foreseeable future. The borrowings at 30 September 2008 are shown in note 16.

In addition, the Group is principally managed by reference to the loan to value ratios and expects to maintain this ratio between 60 per cent and a maximum of 85 per cent.

As a mechanism for managing the exposure to foreign currency exchange rate movements, the Group expects to borrow additional funds in the functional currency relevant to the acquisition it funds.

19.Authorised and issued share capital

	30 September	30 September
	2008	2007
AUTHORISED
Ordinary Shares of 10 pence each
- number	180,000,000	180,000,000
- £m	18.0	18.0
ISSUED, CALLED UP AND FULLY PAID
- number	132,761,948	132,703,055
- £m	13.3	13.3

Holders of the Ordinary Shares are entitled to receive dividends and other distributions and to attend and vote at any general meeting.

Ordinary Shares of 10 pence each	30 September	30 September
Number	2008	2007
- ranking for dividends for the current year	132,761,948	97,325,697
- not ranking for interim dividend for the previous year	-	35,377,358
	132,761,948	132,703,055

Ordinary Shares of 10 pence each	30 September	30 September
£m	2008	2007
- ranking for dividends for the current year	13.3	9.7
- not ranking for interim dividend for the current period	-	3.6
	13.3	13.3

20. Equity

				Cash flow	Currency
	Share	Share	Retained	hedges	translation
	capital	premium	earnings	reserve	reserve	Total
2008	£000	£000	£000	£000	£000	£000
At 30 September 2007	13.3	168.7	81.2	12.9	0.6	276.7
Foreign exchange differences	-	-	(2.3)	0.3	-	(2.0)
Total recognised income for the period	-	-	(130.4)	(13.8)	1.2	(143.0)
Dividends paid	-	-	(13.7)	-	-	(13.7)
At 30 September 2008	13.3	168.7	(65.2)	(0.6)	1.8	118.0

				Cash flow	Currency
	Share	Share	Retained	hedges	translation
	capital	premium	earnings	reserve	reserve	Total
2007	£000	£000	£000	£000	£000	£000
At 30 September 2006	9.7	149.0	52.7	-	-	211.4
Shares issued	3.6	71.4	-	-	-	75.0
Share issue costs	-	(1.7)	-	-	-	(1.7)
Transfer to distributable reserves		(50.0)	50.0	-	-	-
Total recognised income for the year	-	-	(9.8)	12.9	0.6	3.7
Credit relating to performance fee of Property Advisor	-	-	(1.5)	-	-	(1.5)
Dividends paid	-	-	(10.2)	-	-	(10.2)
At 30 September 2007	13.3	168.7	81.2	12.9	0.6	276.7

21.Dividends

	30 September	30 September
	2008	2007
Ordinary dividends paid	£m	£m
Final dividend for 2006 - 6.5 pence per share	-	6.3
Interim dividend for 2007 - 4 pence per share	-	3.9
Final dividend for 2007 - 6.2 pence per share	8.2	-
Interim dividend for 2008 - 4.1 pence per share	5.5	-
	13.7	10.2

The Directors are proposing a final dividend for the year of 3.15 pence per share (amounting to £4.2 million). Shareholders will be asked to approve this dividend at the forthcoming Annual General Meeting and, if approved, the dividend will be paid on 20 February 2009 to all those Shareholders on the register as the close of business on 30 January 2009.

A final dividend for 2007 of 6.2 pence per share (amounting to £8.2 million) was approved by the Shareholders at the Annual General Meeting and was paid on 18 February 2008 to all those Shareholders on the register at the close of business on 8 February 2008.

22.Capital commitments

As at 30 September 2008, the Group had no capital commitments (2007: £21 million).

As at 30 September 2007, the Group had commitments of £21 million in relation to one property in The Hague, The Netherlands, on which purchase contracts had been exchanged but the purchase had not been completed. This purchase was subsequently completed on 21 July 2008.

23.Events after the balance sheet date

Following the financial year ended 30 September 2008, the Group has been in discussions with the administrators to the CMBS vehicles over the situation of the interest rate swaps put in place to fix the effective interest rate to the Group. These discussions are ongoing and relate to loans of £314 million and €37 million.

24. Annual Report and audited financial statements

The Annual Report and audited financial statements will shortly be mailed to Shareholders and will then be available to download from the Company's website www.wichford.com or on request from Simcocks Trust Limited, Top Floor, 14 Athol Street, Douglas, Isle of Man IM1 1JA.

 

4 YEAR REVIEW

			30 September 2008	30 September 2007	30 September 2006	30 September 2005*
Financial
Revenue		£m	42.0	33.1	24.2	16.0
Profit Before Tax
	Trading Operations	£m	10.7	11.6	8.0	(5.3)
	Total	£m	(130.0)	(9.6)	53.0	4.8
Earnings per Share
	Trading Operations	Pence	7.8	9.7	8.1	(11.6)
	Total	Pence	(98.2)	(8.4)	54.2	10.4
Net Assets		£m	118.0	276.7	211.4	164.1
Gearing		%	403	146	117	58
Net Assets per Share		Pence	88.9	208.5	217.2	168.6
UK Portfolio
Number of properties			72	72	61	46
Total area		Square metres	246,307	244,776	208,734	138,037
Annualised total rent		£m	33.0	32.5	27.3	17.6
Valuation		£m	446.6	526.3	455.8	267.1
Average rent		£ per sq metre	135.39	132.80	130.80	136.40
Occupancy		Percentage	99	98	99	99
Continental European Portfolio
Number of properties			7	6	-	-
Total area		Square metres	95,181	77,314	-	-
Annualised total rent		£m	9.8	7.8	-	-
Valuation		£m	151.3	147.1	-	-
Average rent		£ per sq metre	102.96	100.73	-	-
Occupancy		Percentage	100	100	-	-

\* This is a 15 month period.

LIST OF PROPERTIES

Address	Value Band	Area (sq m)	Tenant/occupier
Atholl House, Guild Street, Aberdeen, AB11 6AR	♦	5,110	First Secretary of State
Lord Cullen House, Fraser Place, Aberdeen, AB25 3TP	♦	3,046	Health and Safety Executive
Cooper House, 59 Peel Street, Barnsley, S70 2RL	♦	2,016	Secretary of State for Environment
Great Oaks House, Great Oaks, Basildon, SS14 1JE	♦	5,077	Secretary of State for Environment
Woodlands, Manton Industrial Estate, Manton Lane, Bedford, Bedfordshire, MK41 7LW	○	10,398	Highways Agency
Chailey House, 30 Cardington Road, Bedford, Bedfordshire, MK42 0EX	■	1,546	Secretary of State for Transport, Local Government and the Regions
Theatre Buildings, Kingsway, Billingham, TS23 2NA	■	648	Secretary of State for Environment
Great Western House, Chester Street, Woodside, Birkenhead, CH41 6DA	○	7,752	Secretary of State for Environment
Aqueous 2, Aqueous Business Village, Birmingham, B6 5RQ	♦	3,408	Secretary of State for Health
2308 Coventry Road, Sheldon, Birmingham, B26 3JZ	♦	2,693	Secretary of State for Transport,  Local Government and the Regions
Hanover House, Northgate Street, Bridgwater, Somerset, TA6 3HG	■	1,944	Secretary of State for Environment
Centenary Court, St Blaise Way, Bradford, BD1 4DB	+	9,769	Secretary of State for Environment
Phoenix House, Rushton Avenue, Thornbury, Bradford, BD3 7BH	♦	3,637	First Secretary of State
31-49 Newfoundland Street & 1 Newfoundland Court, Bristol, BS2 9AP	♦	2,947	Secretary of State for Health
Unicorn House, 28 Elmfield Road, Bromley, BR1 1NX	○	5,365	Secretary of State for Environment
Rivers House, Fortran Way, St Mellons, Cardiff, CF3 0EY	■	2,010	Environment Agency
Ty Cambrian House, 29 Newport Road, Cardiff, CF24 0TP	♦	3,201	Environment Agency
Rufus House, Castle Street, Carlisle, CA3 8RX	■	2,545	Secretary of State for Environment
The Observatory, Brunel, Chatham Maritime, Kent, ME4 4NT	■	1,993	Secretary of State for Transport, Local Government and the Regions
Wren House, Hedgerows Business Park, Chelmsford, Essex, CM2 5FP	■	1,287	First Secretary of State
Chantry House, 55, 57 and 59 City Road and 28 Crewe Street, Chester, CH1 3AQ	■	3,219	Secretary of State for Environment
Cyppa Court, Avenue La Fleche, Chippenham, Wiltshire, SN15 3ER	■	1,167	Secretary of State for Environment
St Anne House, 20-26 Wellesley Road,  Croydon	○	6,808	Secretary of State for Transport, Local Government and the Regions
7/15 Buccleuch Street,  Dalkeith, EH22 1HB	■	661	First Secretary of State
Lindsay House, 18/30 Ward Road, Dundee, DD1 1QB	♦	3,672	Secretary of State for Environment
Sidlaw House, 4 Explorer Road, Dundee, DD2 1DX	♦	5,502	Secretary of State for Transport, Local Government and the Regions
2 Duchess Place,  Edgbaston, B16 8NS	♦	4,309	Secretary of State for Transport, Local Government and the Regions
Ladywell House, Ladywell Road, Edinburgh, EH12 7TB	♦	4,728	Secretary of State for Environment
2 Derby Street, Grays, RM16 8QQ	■	1,112	Secretary of State for Environment
Lyon House, Lyon Road, Harrow, HA1 2DG	○	9,246	Secretary of State for Environment
Ward Jackson House, Raby Road, Hartlepool, TS24 8AA	■	1,935	Secretary of State for Environment
St Clare House, Princes Street, Ipswich, IP1 1PH	○	7,667	Secretary of State for Environment
Castle House, Lisbon Street, Leeds, LS1 4LX	○	7,271	Secretary of State for Environment
Jefferson House, 27 Park Place, Leeds, LS1 2SZ	♦	2,959	Secretary of State for Environment
Waterside Court, Kirkstall Road, Leeds, LS4 2DD	♦	3,344	Secretary of State for Environment
Prudential Buildings, 36 Dale Street, Liverpool, L2 5UZ	■	2,309	Her Majesty's Court Services
Maes Newydd, Britannic Way, Llandarcy, Neath, SA10 6JQ	■	1,352	Environment Agency
63/67 Newington Causeway, London, SE1 6LS	♦	2,211	Secretary of State for Environment
Armstrong Road, London, W3 7JL	○	3,790	Secretary of State for Environment
1009 Oldham Road, Newton Heath, Manchester, M40 2EP	■	1,433	Secretary of State for Environment
Centralofts, 1 Waterloo Square, Newcastle Upon Tyne, NE1 4DR	■	521	Secretary of State for Communities and Local Government
St Katherine's House, 50 Gold Street, Northampton, NN1 2LG	■	2,703	Secretary of State for Environment
1 Theatre Street,  Norwich, NR2 1RG	■	816	Department for Works and Pensions
Trentside, Scarrington Road, West Bridgeford,  Nottingham, NG2 5FA	♦	3,368	Environment Agency
Tweedale House, 75 Union Street, Oldham, OL1 1LH	■	1,916	Environment Agency
47/51 High Street, Paisley, PA1 2AN	■	1,293	Secretary of State for Environment
Clifton House Broadway & 126/128 Park Road, Peterborough, PE1 1QZ	○	5,503	Secretary of State for Environment
Bretonside, Exeter Street, Plymouth	○	5,700	Department for Work & Pensions
West Street and Centre Point, Plymouth	■	2,590	Secretary of State
Brooklands Office Campus, Plymouth, PL6 5XR	■	1,813	Secretary of State for Environment
Portland House, West Dyke Road, Redcar, TS10 1DH	■	883	Secretary of State for Environment
Osprey House, Albert Street, Redditch, B97 4DE	■	2,759	Secretary of State for Health
Pilsworth Road, Heywood, Rochdale	○	9,173	Secretary of State
Bradmarsh Business Park, Bow Bridge Close, Rotherham, S60 1BY	■	1,340	Environment Agency
Units 1 & 2 Dallas Court, South Langworthy Road, Salford Quays, M50 2GF	■	1,536	Secretary of State for Environment
Kings Court, Hanover Way, Sheffield, S3 7UF	○	5,037	Secretary of State for Environment
Trinity House, High Street, Smethwick, B66 3AD	■	1,151	Secretary of State for Environment
St Cross House, 18 Bernard Street, Southampton, SO14 3PJ	♦	3,993	Secretary of State for Environment
Heynesfield House, Stoney Lane, Sparkhill, B12 8AF	■	1,088	Secretary of State for Environment
Netcom House, St Asaph, LL17 0JG	♦	2,381	North Wales Police Authority
Gregson House, 2 Central Street, St Helens, WA10 1UF	■	2,828	Secretary of State for Environment
Unit 5, Sandringham Park, Swansea Vale, Swansea, SA7 0AA	■	2,795	Secretary of State for Transport, Local Government and the Regions
Delta 900, Delta Business Park, Great Western Way, Swindon, SN5 7XQ	■	2,833	Secretary of State for Environment
Sapphire House, Stafford Park 10, Telford, TF3 3AB	○	8,327	Secretary of State for Environment
The Grange, Uxbridge County Court, Uxbridge, UB4 8HL	■	1,066	First Secretary of State
Cheviot House, Washington, NE37 1HE	■	2,750	First Secretary of State
Exchange House, 60 Exchange Road, Watford, WD18 0GG	○	5,846	Secretary of State for Environment
Brocol House, King Street, Wigan, WN1 1EA	■	4,127	Secretary of State for Environment
Temple House, Temple Street, Wolverhampton, WV2 4AU	■	2,551	Secretary of State for Environment
Molineux House, Temple Street, Wolverhampton, WV2 4AN	■	3,013	Secretary of State for Environment
Saxon House, Little High Street, Worthing Sussex	■	1,464	Environment Agency
Kettlestring Lane, Clifton Moor, York, YO30 4XF	■	2,155	First Secretary of State
Margrafenstrasse 17/18, 10969 Berlin, Germany	○	7,173	VBG
Wiener Platz, 01069 Dresden, Germany	+	17,449	VBG
Kolner Strasse 20, 51429 Berisch-Gladbach, Cologne, Germany	○	8,240	VBG
Martin-Luther-Strasse 79, 71636 Ludwigsburg, Stuttgart	+	12,455	VBG
Thuringer Strasse, Halle an der Saale, Germany	+	34,689	State of Saxony-Anhalt
Haagse Veste 1, The Hague, The Netherlands	+	12,878	Royal Dutch Government
Le Riverside, 22-23 Quai Carnot, Saint Cloud 92210, France	♦	2,297	ACE

■ £0-5 million

♦ £5-10 million

○ £10-20 million

+ >£20 million

ENDFR UURKRWKRUAAA

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