Results for Six Months Ended 29 February 2012

30 April 2012

REDEFINE INTERNATIONAL P.L.C.

('Redefine International' or the 'Company')

RESULTS FOR THE SIX MONTHS ENDED 29 FEBRUARY 2012

Redefine International, the diversified income focused property company, today announces its half-year results for the six months ended 29 February 2012. These results reflect the first set of half-year results for the enlarged Group following the reverse acquisition of Wichford.

Financial Highlights

·; Earnings available for distribution of £12.9 million (February 2011: £8.4 million), an increase of 53.6%

·; Interim dividend of 2.10 pence per share (February 2011: 2.03 pence), an increase of 3.5%

·; IFRS loss per share of 10.67 pence (February 2011: 2.32 pence profit), due to non-cash valuation declines

·; Adjusted fully diluted EPRA NAV per share of 46.77 pence

·; Fully diluted NAV per share of 35.08 pence (August 2011: 46.59 pence)

·; Fully diluted EPRA NAV per share of 38.23 pence (August 2011: 50.72 pence)

Operational Highlights

·; Greg Clarke assumes Chairmanship with effect from 1 December 2011

·; Strong performance from Cromwell and the Hotel portfolio, supporting the Company's diversification strategy

·; Secure cashflows delivered from the UK Stable Income and European portfolios despite further valuation declines, principally from the former Wichford portfolio

·; Detailed negotiations on Delta and Gamma refinancing are progressing in line with the Company's strategy and exposure to regional offices is anticipated to reduce significantly

·; Substantial progress with the disposal of legacy Wichford assets (VBG 1, 2 and Halle)

·; Disposal of 7 - 11 High Street, Reigate for an effective price of £3.15 million, 5.9% above the carrying value of the property and in line with discussions to consolidate the portfolio and focus on larger better quality assets

·; Additional £24.2 million investment in Cromwell securing Redefine International's strategic shareholder position

Greg Clarke, Chairman, said:

"I am pleased to report on my first half-year results which also reflect the first set of interim results for the enlarged Group following the successful reverse acquisition between Redefine International plc and Wichford P.L.C.

Notwithstanding the continuing adverse business conditions in the UK and Europe, the Company has met its earnings targets and continues to be well placed to benefit from any up-turn in economic growth going forward. Despite the valuation decline of the UK Stable Income portfolio, the diversification of the Group's portfolio means that shareholders have benefited from the excellent performance of the Australian and hotel investments, clearly supporting the Company's strategy to invest in these markets at a low point in the economic cycle.

The Company continues to meet its targets and expects to deliver on the earnings forecast and strategic objectives set out in the prospectus at the time of the reverse acquisition of Wichford P.L.C. in the summer of 2011"

Meeting and conference call

A meeting for analysts and institutional investors will take place today at 09.00 (UK local time) at Redefine International, 2nd Floor, 30 Charles II Street, London, SW1Y 4AE. The meeting can also be accessed via a conference call dial in facility, starting at 09.15, using the details below. The presentation will be made available on the Company's website http://www.redefineinternational.com/investor-relations/financial-reports

Dial in number: + 44 (0)20 3106 4822 UK Local

+27 11 019 7075 South Africa Local

Confirmation Code: 2854143

For further information, please contact:

Group Overview

Introduction

Redefine International is an income focused property investment company with exposure to a broad range of properties and geographical areas. The Company is domiciled in the Isle of Man and has investments in the UK, Germany, Switzerland, the Channel Islands, the Netherlands and Australia.

Investment strategy

The Group's strategy is focused on delivering sustainable and growing income returns through investment into income yielding assets let to high quality occupiers on long leases. Development exposure is generally limited to asset management and ancillary development of existing assets in order to enhance and protect capital values. The Group aims to distribute the majority of its earnings available for distribution on a semi-annual basis, providing investors with attractive income returns and exposure to capital growth opportunities. 

Investment markets

The Group is focused on real estate investment in large, well developed economies with established and transparent real estate markets. The investment portfolio is geographically diversified across the UK, Europe and Australia providing exposure to the retail, office, industrial and hotel sectors.

Group structure

Redefine International is listed on the main market of the London Stock Exchange (the "LSE") and is part of the Redefine Properties Limited group. The ultimate holding company, Redefine Properties Limited ("Redefine Properties"), is listed on the Johannesburg Stock Exchange (the "JSE") and has a market capitalisation of approximately £2 billion.

This announcement makes various references to companies within the Redefine International Group which are summarised below.

Board and Management

The Board is responsible for setting the Group's strategy and providing leadership to the Company. It supports the principles of good corporate governance as set out in the UK Corporate Governance Code published by the Financial Reporting Council in May 2010. Following the listing of RIN on the JSE, the Board has resolved to comply with the provisions of the third King Report on Governance for South Africa 2009.

The Board of the Company is entirely non-executive and comprises nine directors. The Chairman and five other directors are considered to be independent of the Investment Adviser.

The Company is pleased to confirm the appointment of Stewart Shaw Taylor as Chairman of the Audit Committee. Stewart is a Chartered Accountant with extensive financial experience and, having recently stepped down from the Board of Redefine International Fund Managers Limited, is deemed to be an independent non-executive Director. Stewart replaces Gavin Tipper who, as Chairman of Redefine Properties International Limited, is not regarded as independent.

The Group is advised on an exclusive basis by RIPML. The Investment Adviser has a management team with extensive property and finance experience in the listed property sector, which has been active in the UK and Europe for over a decade.

Chairman's statement

The half-year results for the six months ended 29 February 2012 reflect the first set of interim results for the enlarged Group following the successful reverse acquisition between Redefine International plc and Wichford.

The reporting period has continued to be dominated by the Eurozone sovereign debt and EU banking crises. This uncertain and volatile economic environment together with tighter regulatory reforms in the banking sector, continues to impact the performance of the commercial property market in the UK and Western Europe. Although there are limited signs of renewed economic activity, a lack of bank funding and a general liquidity squeeze is continuing to restrict growth and dampen consumer sentiment.

Notwithstanding these tough business conditions, the Company's underlying performance remains sound. The tenant covenant strength of the UK Stable Income portfolio, strong performance of the Hotel and European portfolios and a very solid contribution from Cromwell, the Australian listed property trust in which the Company holds a 23% interest, have more than offset the weaker performance of the UK Retail and Stable Income portfolios, illustrating the benefit of Redefine International's diversified portfolio.

Financial results

It is pleasing to report that the new enlarged Group is on track to meet the Company's distributable earnings forecast for the year ending 31 August 2012 as set out in the reverse acquisition prospectus (dated 13 July 2011) with earnings available for distribution of 2.23 pence per share for the half-year period.

EPRA net asset value decreased to 38.23 pence per share from 50.72 pence at 31 August 2011, largely as a result of valuation declines in the UK regional office (former Wichford) properties. This was partially offset by gains in the Cromwell investment and fair value adjustments to interest rate swap agreements.

The Board has declared an interim dividend of 2.10 pence per share. This reflects an increase of 3.5% from the comparable period in 2011.

Operations

Overall performance of the Group's investment portfolio was supported by sound underlying performance of Cromwell and the Hotel portfolio. Values in the UK Retail and UK Stable Income portfolios suffered from weak tenant and investment demand, however occupancies remained resilient at 96.4% despite tough trading conditions.

The Company strengthened its strategic holding in Cromwell by supporting Cromwell's capital raising in December 2011 and increasing its interest to 23.16% (August 2011: 22.36%). Cromwell continues to deliver on earnings targets and the recent capital raising to support the acquisition of the HQ North office in Brisbane for AUD186 million provides a stronger platform for continued growth.

Although the impact of lower UK GDP growth is starting to feed through, 2012 is still expected to be a record year for London with major attractions such as the Olympics and the Queen's Jubilee.  This would in turn be expected to have an impact on the value of the Hotel portfolio.

The UK Retail portfolio maintained a healthy overall occupancy rate of 95%, which has stabilised since February 2012 and compares favourably with recent research suggesting the average void rate in secondary UK towns is 12.7% (source: Colliers CRE October 2011). The redevelopment of 46,000 sq ft of new retail space at the Birchwood Warrington Shopping Centre, to accommodate larger unit requirements of certain key tenants, is on track for practical completion in November 2012.

The European portfolio continues to deliver stable and increasing rental income. The Company's strategic focus on discount retail stores in Germany has proved defensive despite Eurozone sovereign debt issues. The Company has agreed, in respect of two separate transactions, to acquire a 50% interest in two newly developed German retail stores for a total consideration of £13.4 million, which is expected to complete post period end. Both assets are newly constructed, fully let retail units anchored by multinational discount retailers.

Prospects/Strategy

The remainder of 2012 will be focused on agreeing a refinancing and/or restructuring of the Delta and Gamma debt facilities and the associated capital raising. Negotiations with the servicer to these debt facilities has progressed materially in the first half of this financial year and it is the Company's intention to approach shareholders once terms on the debt restructuring have been agreed. It is currently anticipated that the previously announced capital raising will take place after the current financial year end.

Real progress has been made with the sale of the VBG and Halle assets, both of which are non-core to the Company's strategy. As a result these assets are held for sale as at 29 February 2012 and it is anticipated that completion of the sales process will take place before the end of the current financial year.

Once completed, the sale of the VBG1, VBG2 and Halle assets is expected to have a significant impact on the Group's overall gearing ratios, removing £118.96 million of debt associated with those assets from the statement of financial position which will result in an approximate 2.45 pence increase in NAV. These sales, together with the restructuring of the Delta and Gamma facilities, are significant steps towards securing a stable capital structure and exiting legacy assets.

As previously stated, the Company is closely monitoring changes to existing legislation to assess the possibility of converting to a UK REIT.

The Group's diversified asset base continues to provide exposure to performing markets, offsetting the challenges currently experienced in UK retail and regional office markets. With a defined strategy to strengthen the Company's balance sheet and take advantage of future investment opportunities, Redefine International remains on track to become a significant participant in the UK listed real estate market.

Greg Clarke

Chairman

Business review

Top 15 properties by value

Notes:

1 Redefine Hotel Management Limited

2Assets are classified as held for sale

Overview

The integration of Redefine International plc and Wichford has been completed with limited disruption and operationally the Group is well set for the future.

The period under review was the first full half-year reporting period for the Group as a merged entity.

The challenges brought about by the acquisition of the Wichford legacy assets and the expiring debt facilities are being addressed and prioritised by the management team. It is expected that by the end of the financial year substantial progress will have been made in restructuring the Company's statement of financial position and either refinancing or exiting a number of funding agreements.

Highlights for the period included:

·; Contracts exchanged, in respect of two separate acquisitions for a 50% stake in two German retail properties (located in Kaiserslautern and Waldkraiburg for an aggregate purchase consideration of €16.0 million (£13.4 million). These acquisitions are being made in a joint venture with a major pension fund and are expected to complete post period end.

·; Significant progress made in debt restructuring discussions with the loan servicer for the Delta and Gamma facilities

·; The AUD 35 million (£22.6 million), participation in the Cromwell entitlement offer, increasing the Company's interest to 23.16% from 22.36% as at 31 August 2011

·; The raising of £4.7 million of new capital through a share placement with RIN

·; Disposal of 7 - 11 High Street, Reigate for an effective price of £3.15 million, 5.9% above the carrying value of the property

·; Substantial progress with the disposal of legacy Wichford assets (VBG 1, 2 and Halle)

Performance

In a difficult economic environment, the Group's investment portfolio has benefited from diversification across both sectors and geographies. While regional office markets and UK retailers have suffered, exposure to discount retail units in Germany, Greater London limited service hotels and the Company's Australian investment, Cromwell has benefited the Company as these segments have performed well. Overall occupancy of 96.4%, a weighted average unexpired lease length of 8.8 years and in excess of 37% of rental income subject to indexation or fixed uplifts, provides for defensive income returns.

Business Segments

Property portfolio - by business segment at 29 February 2012

Notes:

1 UK Retail includes the Grand Arcade, Wigan Shopping Centre which is held through a joint venture. Lettable area excludes the Wigan APCOA parking space of 326,315 sq ft.

2 Figures reflect Redefine International's effective 23.16% share of Cromwell's property assets and net rental income. The investment value is £129.8 million (based on a GBP:AUD exchange rate of £1.00:AUD1.479).

Figures assume 100% ownership of property assets in subsidiaries and joint ventures.

UK Stable Income

The UK Stable Income portfolio performed ahead of expectations at an operating level. Occupancy levels remained robust at 95%, supporting strong income returns. A number of government leases with break options have been renewed or are at advanced stages of negotiation which is providing encouraging evidence that cost effective space remains an operational requirement to deliver front line government services. 

Despite this strong operational performance, investment sentiment together with structural supply/demand imbalances has however resulted in a sharp decline in transactional activity and the values of many regional properties. Overall exposure to regional office markets is anticipated to reduce significantly as part of the refinancing of the Delta and Gamma portfolios, leaving a core portfolio of assets with better long term growth potential. In the near term the focus will remain on maintaining occupancy levels and protecting income.

Rent reviews during the period provided an additional £0.63 million of income resulting from rent reviews subject to CPI indexation or fixed increases. Rental income subject to inflation or fixed increases rose slightly to 55.3% (2011: 54.6%).

Lyon House and Equitable House, Harrow

As announced in January 2012, the planning application for a residential-led mixed use scheme for the adjoining Lyon House and Equitable House sites in Harrow was submitted in November 2011. The application is for a new development comprising approximately 316,000 sq ft of residential and commercial space including 223 private residential units and 85 affordable housing units. A conditional development agreement has been concluded with Metropolitan Housing Trust for the affordable element of the scheme.

A post application meeting has been held with the local Council in order to assess the design of certain elements of the scheme and a revised scheme proposal has subsequently been submitted. Subject to a further public consultation period, a hearing date is anticipated in May this year.

UK Retail

The Group's UK Retail portfolio consists of five sub-regional shopping centres which dominate their catchment areas and a town centre redevelopment scheme located in Crewe. The centres have generally performed well and delivered consistent returns against a backdrop of severe stress in the retailing environment caused by low consumer confidence, weak economic conditions, debt-burdened retailers and the growing impact of technology on shopping patterns.

Against this difficult economic backdrop, the retail market is becoming increasingly polarised as the influence of technology gathers pace and those retailers failing to invest are beginning to underperform. Successful retailers are focusing on a seamless shopping experience whether it be through their mobile website, traditional website, call centre or physical shops.

The success of the luxury brands, particularly in London, and volume retailers continues. Exposure to volume brands impacts positively on the UK Retail portfolio as borne out by the healthy footfall figures. Space requirements for retailers are also changing, with a tendency towards fewer but larger format stores for the major high street fashion brands.

The current economic climate has seen a 'flight to prime' for some national and international brands, although it is unclear whether this will become a structural feature of the market or one typified by the poor economic climate.

There were a number of high profile insolvencies during the period, of which Peacocks, Bon Marche, La Senza and Game affected the portfolio (three Peacocks, one Bon Marche, two La Senza and two Game units). However, Redefine International has only lost three out of the eight units let to these tenants, equating to 0.6% of total floor space, reflecting the portfolio's locally dominant status.

Despite the number of retailer administrations, the Company has succeeded in maintaining footfall across its portfolio and an occupancy rate of 95%.

The investment market for shopping centres continued to soften during the period. Although the portfolio declined 4.1% in value, this reflected a relatively positive outcome with the wider market seeing larger negative yield shifts. This reinforces the strength of the portfolio and reflects Redefine International's strategy to acquire assets with a dominant hold over their catchment area.

UK Retail at a glance

Figures assume 100% ownership of property assets in subsidiaries and joint ventures

1 Excludes Crewe

2. Reflects increase in footfall against the comparable 12 month period to February 2011

Hotels

The Group owns six hotel properties branded as Holiday Inn, Holiday Inn Express and Crowne Plaza, five of which are located in Greater London and one in Reading. The focus on branded, limited service hotels in Greater London provides for defensive underlying occupancies in line with the Company's income focus.

Although the Greater London hotel market is beginning to feel the impact of lower UK GDP growth and Eurozone uncertainty as the private and public sector cut back on meetings and accommodation demand, 2012 is still seen as a potential record year due to anticipated strong demand over the third calendar quarter with the Queen's Jubilee, the bi-annual Farnborough Air Show and the Olympics.

The tenant, Redefine Hotel Management Limited, performed in line with its competitors for the period under review. 

Key activity during the period included:

Hotels

The Southwark Holiday Inn Express is awaiting planning approval for an additional 50 rooms which, if approved, will see an investment of up to £13 million to double the existing capacity of the hotel. The extension is being driven by high occupancy and excess demand and, although there has been significant room capacity growth in Central and East London it is anticipated that with the continual growth in international leisure, particularly from the East, will result in this surplus being absorbed in a short time period.

The initial phase of a modernisation and refurbishment programme for the Southwark and Royal Dock hotels is underway. The Royal Dock public area "new look" has been completed and work on the Southwark and Royal Docks bedrooms and corridors are largely complete.

The Limehouse hotel will have the new public area refurbished before the Olympics whilst the Park Royal hotel lobby upgrade has been completed.

The Brentford hotel will undergo a refurbishment of the food and beverage area in co-operation with the Intercontinental Hotel Group and a new "HUB" food concept, launched recently in the USA, will be put into operation at the hotel.

Europe

Despite a backdrop of continued macro-economic instability and the sovereign debt crisis, the European portfolio has performed strongly at an operating level with occupancy levels close to 100% and consistent cash flows from rental income. The results of a concerted effort over the past 12 months to reduce non-recoverable costs have started to take effect, with significant expense reductions having been achieved.

Several lease extensions with anchor tenants, ranging from five to 13 years, were agreed. Further lease extensions involving anchor tenants within the portfolio are at advanced stages of negotiations.

VBG portfolio

A marketing process has been completed in relation to the sale of the VBG tenanted properties located in Dresden, Berlin, Cologne and Stuttgart (part of the former Wichford portfolio). A number of offers were submitted and negotiations are currently in place with a preferred party to finalise a sale and purchase agreement. It is anticipated that completion of the sales process will take place before the end of the current financial year. Further information is provided within the Financial Review.

Cromwell

On 16 December 2011 the Company announced that it had increased its strategic stake in the ASX-listed Cromwell to 24.32% (22.36% at 31 August 2011) by subscribing for 51,470,588 new Cromwell stapled securities for an amount of AUD35 million (£22.6 million), in terms of an underwriting agreement. The subscription formed part of an institutional placement and pro-rata non-renounceable entitlement offer (the "entitlement offer") undertaken by Cromwell to fund the acquisition of 'HQ North' office tower in Fortitude Valley, Brisbane for AUD186 million. AUD9,424,997 (£6,098,348) of the subscription was funded through an existing facility with Investec Bank (Australia) Limited and the balance was funded from available cash resources. The Company received a fee of AUD875,000 (£566,160) from Cromwell in consideration for providing an AUD35 million underwriting commitment for the entitlement offer.

The new Cromwell stapled securities were admitted to trading on the ASX on 21 December 2011 and entitled holders to receive a pro-rata share of the distributions from Cromwell for the quarter ended 31 December 2011.

The increase of Redefine International's interest in Cromwell is in line with one of the Company's objectives of increasing its presence in the Australian property market and is expected to be earnings enhancing for shareholders in the medium to long term.

The Cromwell distribution, amounting to AUD3.8 million (£2.6 million) for the quarter ended 31 December 2011, was received on 16 February 2012.

The total net distributions received for the six months ended 29 February 2012 amounted to AUD 7.5 million (£4.9 million).

On 1 February 2012 the Company exercised its option to place new shares with RIN at the sterling equivalent of AUD7.5 million at 37.0 pence per share to cover part of the cost of the underwriting. 

Cromwell's performance and outlook

Cromwell produced strong operating and financial results for their half-year ending 31 December 2011. Highlights included:

·; Operating earnings of AUD37.0 million (3.8 cents per security), up 13%

·; Statutory accounting loss of AUD6.8 million (0.7 cents per security) impacted by fair value adjustment on interest rate swaps

·; Earnings from property investments of AUD37.5 million, up 15%

·; Acquisition of HQ North Tower, Brisbane for AUD186 million

·; Agreed terms to re-acquire Bundall Corporate Centre, Gold Coast for AUD63.4 million

·; Successful completion of a two year capital raising programme which places the Group in a position to drive earnings and Net Tangible Asset growth from capital recycling opportunities and funds management activities

·; Commenced AUD49 million equity raising for unlisted Ipswich City Heart Trust

·; Launch of Cromwell Real Estate Partners, targeting wholesale opportunity fund investors

·; Guidance for FY12 operating earnings maintained at 7.3 cents per security and distributions of 7.0 cents per security

Portfolio summary

Portfolio overview by business segment

Business segments - market values

Notes:

1. Figures reflect Redefine International's effective 23.16% share of Cromwell's property assets and net rental income. The investment value is £129.8 million.

The Cromwell property portfolio consists of 23 assets with a market value of AUD 1.66 billion as at 31 December 2011

Figures (excluding Cromwell1) assume 100% ownership of property assets held in subsidiaries and joint ventures

Business segments - income

Notes:

1. Cromwell rental income reflects 23.16% stake

Figures (excluding Cromwell) assume 100% ownership of property assets held in subsidiaries and joint ventures

Business segments - valuation movement

Notes:

1. Cromwell reflects investment value at a closing share price of 72.5 Australian cents per security as at 29 February 2012

2. Acquisition of 51.47 million Cromwell stapled securities

3. Includes effect of currency changes

Portfolio overview by sector

Property sectors at 29 February 2012

Notes:

Excludes Cromwell and assumes 100% ownership of property assets held in subsidiaries and joint ventures

Financial review

Overview

These results reflect the first set of half-year results for the enlarged Group following the reverse acquisition.

As reverse acquisition accounting was applied on the transaction between RIHL and Wichford with RIHL being identified as the accounting acquirer, the comparative figures shown are those of RIHL.

Consequently, gross rental income is £38.6 million, up 233% on the comparable period and total investment property assets (including assets held for sale) have increased from £348 million to £914 million. Earnings available for distribution are £12.9 million, up 54.1% from the six month period ended 28 February 2011.

The Group delivered a loss attributable to equity holders of the parent of £60.7 million for the six months ended 29 February 2012.

Key items impacting the results of the Group for the period since 31 August 2011 include:

·; A net decrease in the fair value of the Group's investment property of £57.8 million (5.6% decrease) of which £44.3 million relates to the historic "Wichford" UK portfolio.

·; £17.8 million increase in finance costs due to the amortisation of the fair value adjustment of the VBG, Gamma and Delta facilities as at the date of the reverse acquisition of Wichford. These are non-cash, IFRS adjustments, which may reverse upon sale or re-structuring of the underlying assets on which the loans are secured.

·; The placement of 12,750,000 shares to RIN on 1 February 2012, at a price of 37.0 pence per share to assist with the underwriting commitment in connection with the Cromwell capital raising. 

·; A net fair value increase in the interest rate derivatives held by the Group of £5.3 million. The gain was principally due to the near-term expiry of the Delta and Gamma interest rate swaps, as indicative five year swap rates moved from 1.97% to 1.58% during the period.

·; AUD7.5 million (£4.9 million) of distributions received from Cromwell, including the AUD148,000 (£97,000) pro-rata distribution received from the additional 51.47 million shares acquired during the period and a AUD875,000 (£566,166) fee received in respect of the underwriting commitment.

The effect of certain of the above items has led to a decrease in the EPRA net asset value per share from 50.72 pence as at 31 August 2011 to 38.23 pence per share as at 29 February 2012.

The net asset value, however, includes items which, in the opinion of the Board need to be adjusted in order to allow shareholders to gain a better understanding of the underlying value of the Group. An "adjusted EPRA net asset value" has therefore been calculated as presented below:

Notes

1. In accordance with IFRS, the assets and liabilities of Wichford as at 31 August 2011 following the reverse acquisition were acquired at fair value. Consequently, the VBG debt was valued at an amount of £83.87 million, which was £20.97 million below the outstanding principal value. The interest charge reflected in the accounts includes an amount of £14.9 million, relating to the accretion of the fair value of the loan to its principal value over the remaining term of the loan. This amount may however reverse upon disposal of the assets and loan and therefore has been added back in the calculation.

2. The net Delta and Gamma portfolio debt values are in excess of the current investment property values. Should the proposed restructuring take place, it may remove the negative net asset value position, leading to a positive effect on net asset value per share of 6.09 pence.

Earnings available for distribution

The Company's policy is to distribute the majority of its earnings available for distribution in the form of dividends to shareholders. Considering the earnings available for distribution at the period end, the Board has declared an interim dividend of 2.10 pence per share and is on track to achieve the forecast distribution per share for the year ending 31 August 2012 in the reverse acquisition prospectus.

The earnings available for distribution excludes any capital and one-off items and the figure is used by the Board as its measure of underlying earnings performance. The statement of earnings available for distribution is presented as follows:

Financial position

The nominal value of senior debt facilities at 29 February 2012 was £855.4 million (£898.2 million including the Group's attributable share of debt in subsidiaries and joint ventures). Overall gearing levels have been influenced by a decrease in property values, however, significant progress has been made towards the restructure of the Delta and Gamma facilities.

The key financing statistics are summarised in the table below:

UK REIT Update

The revised UK REIT rules, as communicated in the Annual Report, will take effect from the date on which the Finance Act 2012 receives Royal Assent (expected to be in late July or early August 2012). If conversion were to take place prior to the date on which Finance Act 2012 receives Royal Assent, the advantages afforded by the new legislation would not be available.

An initial feasibility study has been performed and once the Finance Act 2012 has been enacted, the Company will make a decision as to whether conversion to REIT status is in the best interests of shareholders.

Principal risks and uncertainties

The principal risk for the upcoming period is liquidity risk linked to the debt maturity profile of the Group's funding. As at 29 February 2012 the Group has current loan liabilities of £458.4 million. These liabilities are classified as current due to maturities within the next 12 months and or as a result of on-going covenant breaches. 

With respect to the VBG 1 and VBG 2 loan facilities totalling £93.37 million the loan servicer is marketing the associated assets for sale and it is expected that they will be disposed of and the loans settled within the next 6-12 months. As a result the associated assets are classified as held for sale as at 29 February 2012. It should be noted that the liabilities are non-recourse to the Group.

Discussions are on-going with the finance providers in respect of the Delta and Gamma which total £312.84 million and have a maturity date of October 2012 as well as with the finance provider for the Delamere Place Crewe facility which totals £17.15 million and with the funding providers for the other facilities which are due to mature in the next 6 to 12 months. 

There can be no certainty that agreement will be reached on restructuring the facility but the Board is of the view that this will not impact the continued operations of the Group. The Board has a reasonable expectation that the Company and Group have adequate resources to continue in operation for the foreseeable future.

Statement of Directors' Responsibilities

Each of the Directors confirms that to the best of each person's knowledge and belief:

a) the condensed consolidated interim financial statements comprising the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

b) The interim management commentary includes a fair review of the information required by:

i) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year;

ii) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during the period; and any changes in the related party transactions described in the last annual report that could do so.

The Board of Directors

30 April 2012

Independent Auditors' Review Report to Redefine International P.L.C.

We have been engaged to review the condensed consolidated set of financial statements in the half-yearly financial report of Redefine International P.L.C. for the six months ended 29 February 2012 which comprise the condensed consolidated statement of financial position, the condensed consolidated statement of comprehensive income, the condensed consolidated cash flow statement, the condensed consolidated statement of changes in equity and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with our engagement letter to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Services Authority ("the FSA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the FSA.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU.

The Directors are responsible for ensuring that the condensed consolidated set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

Our Responsibility

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

Scope of Review

We conducted our review in accordance with the International Standards on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated set of financial statements in the half-yearly report for the six months ended 29 February 2012 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU and the DTR of the UK FSA.

Darina Barrett

Senior Statutory Auditor

For and on behalf of KPMG

Chartered Accountants

Registered Auditor

Dublin, Ireland

30 April 2012

Financial Statements

Condensed Consolidated Statement of Comprehensive Income

For the six months ended 29 February 2012

Condensed Consolidated Statement of Financial Position

As at 29 February 2012

Condensed Consolidated Statement of Changes in Equity

For the period ended 29 February 2012

Condensed Consolidated Statement of Cash Flows

For the six months ended 29 February 2012

Notes to the Condensed Consolidated Financial Statements

For the six months ended 29 February 2012

1. General information

Redefine International P.L.C. was incorporated on 28 June 2004 under the laws of the Isle of Man and is listed on the Main Market of the London Stock Exchange. On 23 August 2011 the Company's financial year end was changed to 31 August from 30 September.

With effect from 23 August 2011, Redefine International plc (subsequently renamed Redefine International Holdings Limited ("RIHL")) was legally acquired by Wichford P.L.C. ("Wichford") subsequently renamed Redefine International P.L.C. As a result of the terms of the transaction, reverse acquisition accounting has been applied under IFRS 3 Business Combinations (2008) and RIHL has been identified as the accounting acquirer. Consequently, the comparative figures shown for the condensed consolidated statement of financial position 28 February 2011 and the condensed consolidated statement of comprehensive income are those of RIHL. The condensed consolidated statement of financial position reflects the reserves, assets and liabilities of RIHL and the capital, reserves, assets and liabilities of Redefine International (formerly Wichford), effectively acquired by RIHL at fair value as at 31 August 2011. As Wichford was the legal acquirer, the Wichford capital structure remains that of the Company.

The preparation of the condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ materially from these estimates. The significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty are discussed further in Note 2.4 Basis of preparation.

These condensed consolidated financial statements have been prepared on a going concern basis as the Directors consider this the most appropriate basis.

2. Basis of preparation

2.1 Statement of compliance

These condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the period ended 31 August 2011.

Comparative figures for 2011 have been regrouped on a basis consistent with the current year. A reverse acquisition reserve has been created so that the capital structure of the Group reflects that of the Company. Certain balances have also been reclassified in the statement of cashflows to more accurately reflect the activity to which they relate.

Both half-year figures for the six months ended 29 February 2012 and the comparative amounts for the six months ended 28 February 2011 are unaudited and does not constitute statutory accounts as defined in the Isle of Man Companies Act 1931-2004 (as amended). Both sets of interim figures have however been reviewed by the Auditors. The summary financial statements for the year ended 31 August 2011, as presented in the condensed consolidated interim financial statements, represent an abbreviated version of the Group's full accounts for that period, on which independent auditors issued an unqualified audit report.

The consolidated financial statements of the Group as at and for the period ended 31 August 2011 are available upon request from the Company's Registered Office at Top Floor, 14 Athol Street, Douglas, Isle of Man, IM1 1JA or at www.redefineinternational.com.

The condensed consolidated interim financial statements were approved by the Board of Directors on 27 April 2012.

2.2 Basis of measurement and functional currency

The condensed consolidated financial statements of the Company for the 6 months ended 29 February 2012 consolidate the Company and its subsidiaries (together referred to as the "Group"). They are presented in pound sterling which represents the functional currency of the Company and are rounded to the nearest thousand. The report is prepared on the historical cost basis except for investment properties, derivative financial instruments and financial instruments designated at fair value through profit or loss.

2.3 Significant Accounting policies

The accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its audited financial statements as at and for the year ended 31 August 2011, except for the additional accounting policies noted below:

Disposal groups and non-current assets held for sale

A non-current asset or a disposal group comprising assets and liabilities is classified as held for sale if it is expected that its carrying amount will be recovered principally through sale rather than through continuing use, it is available for immediate sale and the sale is highly probable to occur within one year. For the sale to be highly probable, the appropriate level of management must be committed to a plan to sell the asset or disposal group.

On initial classification as held for sale, generally, non-current assets and disposal groups are measured at the lower of the previous carrying amount and fair value less costs to sell, with any adjustments taken to the income statement. The same applies to gains and losses on subsequent re-measurement. However, certain items such as financial assets within the scope of IAS 39 and investment property in the scope of IAS 40 continue to be measured in accordance with those standards.

Impairment losses subsequent to classification of assets as held for sale are recognised in the income statement. Increases in fair value less costs to sell assets that have been classified as held for sale are recognised in the income statement to the extent that the increase is not in excess of any cumulative impairment loss previously recognised in respect of the asset. Assets classified as held for sale are not depreciated.

Gains and losses on re-measurement and impairment losses subsequent to classification as disposal groups and non-current assets held for sale are shown within continuing operations in the income statement, unless they qualify as discontinued operations.

Disposal groups and non-current assets held for sale are presented separately from other assets and liabilities on the statement of financial position. Prior periods are not reclassified.

New standards and interpretations not yet adopted

The Directors have considered all IFRSs and interpretations that have been issued, but which are not yet effective and are currently assessing whether they will have a significant impact on how the results of operations and financial position of the Group are prepared and presented.

2.4. Critical judgements and estimates

The preparation of the condensed consolidated financial statements in conformity with IFRS requires the use of judgements and estimates that affect the reported amounts of assets and liabilities at the reporting 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:

Application of the going concern basis of accounting

These financial statements have been prepared on a going concern basis as the Directors consider this the most appropriate basis.

After considering the relevant factors, the Directors have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future.

The principal issues the Board considered in its enquiries included, inter alia, the maturity of the Delta and Gamma facilities which total £312.84 million in October 2012, the maturities of the VBG2 and VBG1 facilities totalling £93.37 million (both of which have expired but are the subject of a standstill agreement with the facility provider until 14 April 2012), the maturity of the Crewe facility which total £17.15 million in March 2012 and the maturity of a number of other facilities totalling £35 million over the next 12 months.

Following the conclusion of the reverse acquisition the Group's capital structure improved benefiting from RIHL's attractive long term facilities as well as a commitment from its major shareholder to support a proposed capital raising of their share of up to £100 million (i.e. £67 million). The Directors are confident that the maturity of the Delta and Gamma facilities will be addressed.

With regard to both the VBG1 and VBG2 facilities the Board is confident that these facilities will not be required to be repaid at maturity. The Board notes that these facilities are ring-fenced to certain investment properties with no recourse to any other assets pledged to other Group facilities. 

Discussions are on-going with respect to the sale of the VBG and Halle assets, both non-core to the Company's strategy. As a result, the VBG1 and VBG2 assets are included in assets held for sale as at 29 February 2012.

There can however be no certainty as to the outcome of current negotiations or sales proceedings however the Board remains of the view that there would be no impact on the continued operations of the Group.

Discussions are on-going on the refinancing of the Crewe facility. Aviva credit approval has been obtained to extend the expiration of the Delamere Place Crewe facility until 31 May 2012, from its previous expiry date of 16 March 2012, to allow for further time for the re-financing of the facility. The Board notes that this facility is ring-fenced with no recourse to any other assets pledged to other Group facilities. There can be no certainty that agreement will be reached on restructuring the facility but the Board is of the view that this will not impact the continued operations of the Group.

Discussions are also on-going on the other facilities maturing in the next 12 months. Again, these facilities are recourse only to the properties on which they are secured.

The Board has a reasonable expectation that the Company and Group have adequate resources to continue in operation for the foreseeable future.

Investment Property Valuation

The Group uses the valuation performed by its independent valuers as a 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.

Classification of Investment Property

The hotel properties are held for capital appreciation and to earn rental income. The properties have been let to Redefine Hotel Management Limited ("RHML") for a fixed rent which is subject to annual review. RHML operates the hotel business on its own account and is exposed to the fluctuations in the underlying trading performance of the hotels. It is responsible for the day to day upkeep of the properties and retains the key decision making responsibility for the business. Aside from the payment of rental income to Redefine International there are limited or no transactions between the two entities. As a result, in line with guidance in IAS 40, Redefine International classifies the hotel properties as investment properties.

Taxation

The Group is exposed to the risk of changes to tax legislation in the various countries in which the Group operates. It is also exposed to different interpretations of tax regulations between the tax authorities and the Group.

Deferred Taxation

The Group considers that the value of the property portfolio is likely to be realised by both the sale and the use over time. 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.

The Group makes an initial estimate of the length of time that each property will be held in order to determine the initial recognition exemption for both the in use and on sale elements for each property. Periodically the Group will review the length of time for which each property will continue to be held and this can be significantly different from the residual of the time from the initial estimate.

The resulting provision, being subject to assumptions on the length of the time that each property will be held by the Group which can change over time, can lead to significantly different results for each property from one period to another.

The recoverability of any deferred tax asset is assessed and, where it is thought unlikely that a recovery will be made, is not included in the Group's provision.

3. Segment reporting

The Group's identified reportable segments are set out below. These segments are generally managed by separate management teams. As required by IFRS 8, Operating Segments, the information provided to the Board of directors, who are the Chief Operating Decision Makers, can be classified in the following segments:

Relevant revenue, assets and capital expenditure information is set out below:

i. Information about reportable segments