Metric Prop Inv PLC METP Half Yearly Report

  Metric Prop Inv PLC (METP) - Half Yearly Report

RNS Number : 7196Q
Metric Property Investments PLC
09 November 2012




9 November 2012

                       METRIC PROPERTY INVESTMENTS PLC

                  ("Metric" or the "Group" or the "Company")

         HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

         METRIC CONTINUES TO BUILD STRONG UNDERLYING EARNINGS GROWTH

Metric, the UK specialist retail real estate investment trust, today announces
its half yearly results for the six months ended 30 September 2012.

HIGHLIGHTS:^1

                        Six months ended  Six months ended Twelve months ended
                       30 September 2012 30 September 2011       31 March 2012
EPRA^2 NAV per share                 107               104                 107
(p)
NAV per share (p)                    105               103                 106
EPRA^2 EPS (p)                       1.8               2.1                 3.5
Dividend per share (p)               1.8               1.0                 3.3
EPRA Profit before tax               3.5               3.9                 6.6
(£m)
Revaluation surplus                  0.7               3.4                 8.1
(£m)
Profit after tax (£m)                3.1               6.0                13.2
Debt facilities (£m)^4             189.7             114.7               114.7





Financial:

· EPRA profit before tax £3.5 million (September 2011: £3.9 million);
recurring income has increased by 35% excluding one-off surrender premiums
received in H1 2011 of £1.3 million

· EPRA EPS of 1.8p (September 2011: 2.1p); increase of 35% excluding one
off surrender premiums received in H1 2011 of £1.3 million or 0.7p

· Interim dividend of 1.8p to be paid on 7 December 2012, an increase of
80% (September 2011: 1.0p)

· EPRA net asset value per share remained stable at 107p compared with
March 2012, a 3% increase since September 2011

· £75 million loan facility with Deutsche Pfandbriefbank AG signed for the
MIPP joint venture, bringing total debt facilities to £189.7 million (£139.7
million at share)

· Low loan to value ratio of 22% with a weighted average cost of debt
3.7%^3



Operational^1:

· Portfolio valued at £266.2 million across 25 retail assets, following
four new acquisitions for £35.9 million (£18.8 million at share) and two
further acquisitions completed post period end for £14.9 million (£5.0 million
at share)

· Total property returns of 3.1%, compared to the IPD All Retail Quarterly
Universe of 0.5%, delivering outperformance of 2.6%

· Valuation surplus of £0.7 million, or 0.3%; contributing to a capital
return of 0.5% compared to IPD All Retail Quarterly Universe of -2.3% driven
by asset management activities offset by 15bps outward yield movement

· Strong rental growth driven by acquisitions and new lettings:

o 13.1% increase in annualised rent roll to £17.3 million (March 2012: £15.3
million)

o 2.8% increase in like-for-like rental growth of £0.4 million

· Investment portfolio continues to exhibit income longevity and security,
supported by active management initiatives:

o Six new lettings across 53,000 sq ft, securing £0.9 million of rental
income

o Occupancy level improved to over 99% (March 2012: 97.5%)

o Long unexpired leases averaging 11.5 years (10.8 years to first break)

o Average passing rents remain low at £14.75 psf

o Only 6% of leases expire in the next three years

· Planning gains of almost 65,000 sq ft during the period with a further
27,000 sq ft received post period end at Bishop Auckland Phase 2; planning for
a new 103,000 sq ft Open A1 Shopping Park at St Austell recently submitted

· Developments at Bishop Auckland and Cannock nearing completion - 100%
and 87% pre-let, respectively, including agreements under offer

· Major refurbishment commenced at Longwell Green, Bristol and Channons
Hill Retail Park, Bristol - 100% and 80% pre-let, respectively, including
agreements in solicitors' hands.

· Ongoing progress with MIPP joint venture:

o MIPP portfolio now at 50% of target investment with AUM of £75 million
following two acquisitions post period end (£60.3 million at September 2012)

o MIPP management fees now at £0.3 million on an annualised basis and
expected to rise to £0.6 million when fund is fully invested

1. Unless otherwise stated, all figures in this half year report
include Metric's one-third share of its MIPP joint venture with USS.

2. Calculated in accordance with European Public Real Estate
Association (EPRA) guidelines (after adjusting for £1.1 million loss on
mark-to-market on derivatives see note 7 and 16).

3. Weighted average cost of debt once fully drawn.

4. Total debt facilities including 100% of the MIPP £75 million
facility at £189.7 million (at share £139.7 million)



Andrew Jones, Chief Executive of Metric, commented:

"Metric has delivered a robust performance across our key metrics despite a
backdrop of a difficult property market and challenging wider macroeconomic
conditions. We have delivered a strong increase in our level of recurring
income, both through acquisition activity and active asset management, with
increasing like-for-like rental growth. Furthermore, our occupier centric
model has significantly contributed in our aim to be the real estate provider
of choice to our retailers and we now enjoy a portfolio occupancy level of
over 99%.

"In light of the increasing underlying earnings growth, the board has decided
to increase the interim dividend paid by 80% compared to the pervious interim
dividend, demonstrating its confidence in the future growth and success of the
Company.

"I am also delighted to report that we have been able to conclude negotiations
for a merger with London & Stamford Property Plc. I do not cover this fully
here as details will be announced immediately following the release of this
Report."



For further information, please contact:

Metric Property Investments plc +44 (0)20
7129 7000

Andrew Jones (Chief Executive)

Sue Ford (Finance Director)

Juliana Weiss Dalton (Investor
Relations)

FTI
Consulting
+44 (0)20 7831 3113

Stephanie Highett

Dido Laurimore

Daniel O'Donnell

About Metric Property Investments

Metric Property is a UK retail focused Real Estate Investment Trust (REIT)
established in early 2010 to invest in retail assets located across the UK.
It aims to deliver attractive returns for shareholders through a strategy of
increasing income and improving capital values. The occupier sits at the
heart of Metric's investment strategy, where retailer demand and occupier
contentment are key to driving rents through our asset management programme of
leasing, rent reviews, lease renewals, extensions and redevelopments.

This Half Year Report and presentation are available on Metric's website
www.metricproperty.co.uk



Neither the content of Metric's website nor any other website accessible by
hyperlinks from Metric's website are incorporated in, or form, part of this
announcement nor, unless previously published by means of a recognised
information service, should any such content be relied upon in reaching a
decision as to whether or not acquire, continue to hold, or dispose of, shares
in Metric.

Forward looking statements: This announcement may contain certain
forward-looking statements with respect to Metric's expectations and plans,
strategy, management objectives, future developments and performance, costs,
revenues and other trend information. These statements and forecasts involve
risk and uncertainty because they relate to events and depend upon
circumstances that may occur in the future. There are a number of factors
which could cause actual results or developments to differ materially from
those expressed or implied by these forward-looking statements and forecasts.
Certain statements have been made with reference to forecast price changes,
economic conditions and the current regulatory environment. Any
forward-looking statements made by or on behalf of Metric speak only as of the
date they are made. Metric does not undertake to update forward-looking
statements to reflect any changes in Metric's expectations with regard thereto
or any changes in events, conditions or circumstances on which any such
statement is based. Nothing in this announcement should be construed as a
profit forecast. Past share price performance cannot be relied on as a guide
to future performance.



Business review

                             Overview of results

Despite the current challenges presented by the economic environment we have
continued to focus on delivering strong underlying earnings growth.

Our profit before tax for the six month period was £3.1 million, which
includes a revaluation surplus of £0.7 million. The EPRA profit before tax was
£3.5 million or 1.8 pence per share, a like for like increase of 35% over the
same period last year (£2.6 million or 1.4p). Including the one-off surrender
premiums of £1.3 million received in the first half of last year the EPRA
earnings decreased by 11%.

The benefits of our focus on earnings growth is clear with a further six new
lettings achieved in the six month period which has increased the investment
portfolios' occupancy rate to over 99%. These asset management initiatives,
together with the short cycle development programme, will continue to deliver
earnings growth in the second half of the year and more significantly in
2013/14. Reflecting the current and expected future growth in earnings, the
Board has declared an increased interim dividend of 1.8 pence per share to be
paid on 7 December 2012, representing an 80% increase over last year's interim
dividend.

The portfolio was valued at £266.2 million across 25 retail properties
delivering a revaluation surplus in the six month period of £0.7 million or a
0.3% increase in the value since March 2012. This surplus along with our
retained profits and offset by dividends paid has contributed to a stable
adjusted net asset value at 107 pence per share compared to the year-end. We
have delivered a total ungeared property return of 3.1% outperforming the IPD
All Retail Quarterly Universe, which delivered a return of 0.5%.

Post period end two acquisitions have taken the assets under management in the
MIPP joint venture to £75 million, across eight assets. The joint venture has
now committed 50% of the fund's target investment value of £150 million. The
fund's running yield is 7% and an additional 0.4% management fee will continue
to contribute to earnings growth.

Our development programme now totals 371,000 sq ft at six schemes.
Developments at Bishop Auckland Phase 1 and Cannock have progressed well and
both are nearing completion and are 100% and 87% pre-let respectively. We have
also continued to build on the planning successes achieved last year,
receiving a further four consents in the six month period totalling 65,000 sq
ft, including consent for a new 22,500 sq ft M&S store at Berkhamsted. Post
period end we received an Open A1 planning consent for our 27,000 sq ft Bishop
Auckland Phase 2 development. Planning applications for a further 113,000 sq
ft have been submitted, most notably an application for a 103,000 sq ft Open
A1 shopping park at St Austell.

The portfolio is now well positioned to weather the challenges presented in
the current economic environment. A deep and proven knowledge of the occupier
market and careful and considered stock selection has allowed us to avoid many
of the retailer administrations over the last six months, which is evidenced
by the investment portfolio's occupancy rate of over 99%.



                       Investment and occupier outlook



The market continues to witness ongoing outward yield movement, caused by
reduced appetite for risk across all investments with the majority of
investors targeting prime and liquid assets. Consequently the divergence
between prime and secondary assets has widened. Accordingly, we have
deliberately slowed down the pace of our investment acquisitions in the last
six months, acquiring just four properties in the period to September; two of
which were for our MIPP joint venture. However assets owned by distressed
vendors have presented some opportunistic acquisitions, with vendors of all
four of our acquisitions in the period having been receivers or bank motivated
vendors. We envisage this trend to continue as domestic banks continue to
focus on improving their core tier one ratios and return to domestic consumer
lending.

Income security and longevity, as well as occupier contentment, continue to be
the key valuation metrics. These continue to drive our approach to new retail
opportunities, as we focus our capital on higher yielding, sustainable income
opportunities and new short cycle redevelopments.

We continue to believe that assets with long and strong income offer good
value relative to the low cost of borrowing; especially where there is limited
asset obsolescence and inherent value in the planning consents on the
underlying land. This contrasts sharply to many retail opportunities available
today where the initial yield at first sight may look attractive, however
chronic over-renting, short security of income, weakening covenants,
increasing obsolescence, high irrecoverable costs and low occupier contentment
offer a very different perspective on likely returns. We will only invest in
assets that we are happy to own, even if the market were to shut down for many
years.

Retailer conditions continue to remain challenging although we are starting to
see a number of more encouraging economic indicators.

Retailers' real estate portfolios continue to come under ever increasing focus
as the retail market continues to evolve with polarisation of shopping habits
and the increasing adoption of a multi channel strategy. This evolution will
continue over the next few years as many occupational leases expire, allowing
retailers to relocate their existing offers into the fewer locations both in
and out of town, as well as renegotiating rentals in some more marginal
locations.

We expect retail vacancies to continue to increase with a corresponding
downward pressure on rental values, particularly in-town, as impending lease
expiries allow retailers to vacate poorly performing units and further
retailer insolvencies occur. A number of the weaker retailers have already
failed, so we anticipate the rate of failures will start to decline and the
retailers who have survived will continue to benefit from the reduced capacity
and grow their market share.

Understanding these occupier trends continues to be critical to invest
successfully in the retail real estate sector today. The dynamic nature of the
retail market is such that increased occupier mobility will undoubtedly create
opportunities. We continue to try to position ourselves as the preferred real
estate providers to the retail industry and will continue to stay close to our
customers, building and delivering modern retail space that is fit for purpose
in today's market.



Investments

              Six acquisitions focused on higher yielding assets

We have concentrated on our MIPP joint venture, securing higher yielding,
smaller retail parks with long unexpired lease terms enabling us to take
advantage of the c.300 bps differential between the cost of debt and property
yields to deliver, post leverage, double digit returns on equity.
Consequently, in the last six months, we have deliberately slowed the pace of
our larger multi let retail warehouse acquisitions as we continue to see less
value in this market.

During the period we made four new acquisitions totalling £35.9 million net of
acquisition costs (£18.8 million at share). The four properties acquired have
an average yield on cost of 7.4% and a weighted unexpired lease length of
nearly 15 years. Post period end MIPP acquired two further properties for
£14.9 million (£5.0 million at share) with an average yield on cost of 6.8%
and average unexpired lease term of 15.6 years.

In June 2012 we completed the acquisition of a high street investment in
Bedford let to Next and Iceland for £5.7 million based on a yield of 7%, on
lease terms of 10 and 15 years, respectively. We also completed the
acquisition, in August 2012, of an out of town retail unit in St Albans let to
Dunelm plc for £4.6 million off a yield of 7.8%.

We acquired two properties during the period for our MIPP joint venture. In
May, MIPP acquired Faustina Retail Park, Londonderry for £17.4 million
reflecting a yield of 7.5% and in June MIPP acquired Camborne Retail Park,
Cornwall for £8.2 million off a yield of 7.3%. Both properties are let to B&Q
and have weighted average unexpired lease terms of 18 and 15 years,
respectively.

Post period end MIPP has acquired two properties; Lichfield Retail Park, a
well let five unit scheme anchored by Wickes (c. 18 years unexpired) in
Lichfield for £11.0 million reflecting a yield of 6.6% rising to 7.2% based on
fixed uplifts in 2015. In addition, a standalone Wickes unit in Nottingham was
acquired for £3.9 million reflecting a yield of 7.3% and with 18 years
remaining on the lease.

At 30 September, assets under management in MIPP totalled £60.3 million rising
to £75 million including post period end acquisitions and reaching 50% of the
fund's target investment of £150 million when launched in November last year.
The fund now has eight properties in total which produce a running yield of
7.0% with 36% of the portfolio benefiting from RPI linked income.

Post period end Metric and USS committed their remaining balance of equity to
MIPP and future acquisitions will now be financed by the new £75 million loan
facility signed with Deutsche Pfandbriefbank AG.

 Conditionally exchanged 90 acre site in St Austell, Cornwall for development

During the period we conditionally exchanged contracts to acquire 90 acres for
£5.5 million to the south west of St Austell, where we have been working up
proposals to develop a new 103,000 sq ft Open A1 shopping park. We have
already exchanged contracts with Sainsbury's on a freehold land sale for a new
68,000 sq ft supermarket. The additional space beyond the shopping park
scheme will be promoted for mixed use commercial and residential development.

The purchase is conditional on obtaining an implementable planning consent and
pre-lets on the park of 60% based on rental income. The purchase will only be
recognised on balance sheet once these conditions are satisfied and the risks
of ownership pass to Metric. Since the conditional acquisition we have been
working up design of the shopping park and post period end we have submitted a
detailed planning application. Our discussions to date with the local planning
authority and key stakeholders have on the whole been generally supportive and
we anticipate the application being determined and an implementable consent
obtained during 2013.



Asset management

                            Occupier transactions

During the period, we concluded six new lettings across 53,000 sq ft, on
average lease terms of 14 years (12 years to first break). These lettings have
further improved our occupancy rate across the investment portfolio which is
now over 99%. We have only three vacant units, totalling 7,000 sq ft, in the
wholly owned investment portfolio with the MIPP portfolio fully occupied.

We have concluded five rent reviews in the period with a resulting increase
over the previous passing rent of nearly £30,000 per annum.

Rental growth on the existing investment portfolio has been delivered by
growing passing rents through rent reviews and lease re-gears, as well as by
creating new sources of rental income through additional onsite development
and ancillary tenants. Average rents on the investment portfolio are now
£14.75 psf, which is about £1 psf or 7.2% higher than at the time of
acquisition, based on an average hold period of 19 months.

Our ability to execute new lettings on long leases in a challenging
occupational market across our investment and redevelopment portfolios
highlights our strong retailer relationships, the appeal of our assets and the
attractiveness of our low rents.

During the period we let the unit previously occupied by Peacocks at
Launceston, who went in administration last year. In the first six months of
the current year we have not suffered from any tenant insolvencies, however,
post period end Comet went into administration impacting one unit at Kings
Lynn and representing 0.6% of our rental income. Over the period we have been
working up a planning application to extend the unit which will be submitted
shortly, and negotiations have been under way for some time with a specific
retailer to reoccupy the unit.



                               Letting Summary

Scheme name                Asset management initiatives
St Mary's Road,            · Remaining unit of 8,600 sq ft let to Wren
Sheffield                  Kitchens on 15 year lease (10 years to first break)

                           · DFS opened in April 2012 and trading above
                           expectations

                           · Refurbishment works completed
Tindale Crescent,          · New lettings to Pets at Home for 15 years (10
Bishop Auckland            years to first break)

                           · 82% of development now let

                           · Remainder of the space is under offer to Burger
                           King and Poundland
Kirkstall, Leeds           · New letting to M&S (10,100 sq ft) for new 15
                           year lease

                           · Further 1,850 sq ft unit in solicitors' hands to
                           Costa

                           · 43% of development now pre-let or under offer
Channons Hill Retail Park, · New letting to Iceland (8,000 sq ft) for new 15
Bristol                    year lease
                           (10 years to first break)

                           · Refurbishment and reconfiguration works due to
                           complete early 2013

                           · Further 12,000 sq ft unit under offer
Havens Head Retail Park,   · New letting to Home Bargains on 15 year lease
Milford Haven              taking space due to be vacated by Littlewoods
Launceston Retail Park,    · New letting to 99p Stores on 10 year lease
Launceston                 taking the unit previously occupied by Peacocks who
                           went into administration last year
Longwell Green,            · Planning consent received for new 2,500 sq ft
Bristol                    pod unit; lettings to Costa Coffee and Subway are
                           in solicitors' hands





Development

             Building out our short cycle redevelopment pipeline

We are continuing to build an attractive pipeline of short cycle
redevelopments in locations where there is strong retailer demand and a
favourable planning outlook.

We have successfully completed our redevelopments at Sheffield (28,600 sq ft)
and Inverness (10,000 sq ft). These are now both income producing and 100%
let. Inverness was also forward sold to the MIPP joint venture with the sale
completing in May 2012. Sheffield now sits within our investment portfolio.

Our current redevelopment programme includes six schemes totalling over
371,000 sq ft at Bishop Auckland, Cannock, Bristol, Leeds, St Austell and at
Berkhamsted, our first in-town high street development.

The redevelopment at Bishop Auckland Phase 1 (49,000 sq ft) and Cannock
(24,500 sq ft) are both progressing well and are due to complete in the coming
weeks. At Bishop Auckland, we are 100% pre-let, including agreements under
offer, with leases agreed with Next, Boots, Costa, Brantano, M&S Simply Food
and Pets at Home. Cannock is 87% pre-let, to DFS and Sleepright, with only one
remaining unit of 3,600 sq ft to let.

At Leeds (105,000 sq ft), we are now 43% pre-let, including agreements in
solicitors' hands and under offer. In the period we completed the pre-letting
of 10,100 sq ft to M&S. We anticipate commencing on site in late spring of
2013 once we have secured sufficient additional pre-lets.

Planning has now been received for the reconfiguration at Channons Hill Retail
Park, Bristol and we are now onsite. 23,000 sq ft has been let to B&M with a
further 8,000 sq ft pre-let to Iceland. Work is due to complete early in 2013
and occupancy is now 80%. 

Following the recent planning consent for the redevelopment of the former Post
Office at Berkhamsted we will start work in the late spring 2013. We have
agreed a new 20 year lease with M&S Simply Food to occupy 18,000 sq ft with
the remaining 4,500 sq ft being marketed to high quality restaurant occupiers.

At Bishop Auckland we have successfully received Open A1 planning consent for
an additional 27,000 sq ft Phase 2 development. The proposed scheme is to be
built on land adjacent to the current Phase 1 development that we had under
option and recently acquired for £0.5 million.

At St Austell we have been working up proposals to develop a new 103,000 sq ft
Open A1 shopping park and post period end we submitted a planning application.
Our discussions to date with local planning authority have been positive and
we remain cautiously optimistic the application will be approved.

                                      

                             Development summary:

Scheme name          Description                         Progress
Tindale Crescent,    49,000 sq ft Open A1  · Planning consent received
Bishop Auckland      new retail
                     park development      · 82% pre-let, 18% in solicitors'
                                           hands

                                           · Practical completion due
                                           November 2012 and tenants currently
                                           fitting out

                                           · Development expected to be open
                                           for trade in December 2012
Phase 2,             27,000 sq ft Open A1  · Planning consent received
Bishop Auckland      new retail
                     park development      · Land acquired
Longford Island,     24,500 sq ft 3-unit   · Planning consent received
Cannock              redevelopment
                                           · 87% pre-let to Sleepright and
                                           DFS

                                           · Practical completion expected in
                                           November 2012
Channons Hill Retail 40,000 sq ft          · Planning application to split
Park, Bristol        redevelopment         30,000 sq ft Focus DIY unit
                                           received

                                           · Planning application to split
                                           10,000 sq ft unit received

                                           · New lettings to B&M and Iceland
Kirkstall Bridge,    105,000 sq ft Open A1 · Planning consent received
Leeds                shopping
                     park development      · Pre-let to M&S, BHS and Outfit

                                           · 43% pre-let or in solicitor's
                                           hands
M&S, Berkhamsted     22,500 sq ft food     · Planning consent received
                     store
                     development           · 77% pre-let to M&S Simply Food

                                           · Redevelopment expected to
                                           commence in late spring 2013 and
                                           complete in early 2014
St Austell           103,000 sq ft Open A1 · Planning application submitted
                     shopping
                     park development      · Contracts exchanged for freehold
                                           land sale for a new 68,000 sq ft
                                           supermarket with Sainsbury





               Continued planning gains on existing investments

In the six months to September 2012 we have continued our strong momentum of
planning wins receiving a further four planning consents on 65,000 sq ft.

At Channons Hill Retail Park, Bristol we obtained two consents totalling
40,000 sq ft. Firstly, to subdivide the former 30,000 sq ft Focus DIY store
into two units of which nearly 23,000 sq ft has been let to B&M. Secondly, to
subdivide another 10,000 sq ft unit of which 8,000 sq ft has been let to
Iceland. The unit is currently occupied by What! Stores, who are relocating to
a vacant unit at the same property.

At Berkhamsted, we received planning consent to develop 22,500 sq ft of which
18,000 sq ft has been pre-let to M&S Simply Food. Tenants are being actively
sought for two smaller restaurant units at the development.

At Longwell Green, Bristol (MIPP JV) we have received permission to build a
new 2,500 sq ft pod and both units are currently in solicitors' hands to Costa
Coffee and Subway.

Post period end, we received Open A1 planning consent at Bishop Auckland for
our 27,000 sq ft (Phase 2) development on land recently acquired which is
adjacent to the existing retail park development. We will progress lettings
with interested parties prior to commencing construction.

                               Planning Summary

Scheme name                Planning success
Channons Hill Retail Park, · Sub-division of 30,000 sq ft former Focus unit
Bristol                    into 2 smaller units

                           · Sub-division of 10,000 sq ft unit into 2 smaller
                           units
Berkhamsted                · 22,500 sq ft redevelopment of former Post Office
                           site

                           
Longwell Green, Bristol    · 2,500 sq ft pod unit

(MIPP JV)
Post period end
Bishop Auckland Phase 2    · 27,000 sq ft Open A1 new retail park development



Planning applications have also been submitted for a further 113,000 sq ft.
Most notably at St Austell where an application to develop a new 103,000 sq ft
Open A1 shopping park has been submitted post period end. At Damolly Retail
Park, Newry, permission is being sought to relax the existing use over a 9,700
sq ft unit to enable the surrender from the current occupier and a re-letting
to Home Bargains to proceed.



Property portfolio

                       Valuation uplift of £0.7 million

The portfolio valuation as at 30 September 2012 was £266.2 million, reflecting
a valuation uplift of 0.3% (£0.7 million) or 0.6% (£1.7 million) underlying
(excluding acquisition costs) over the six month period. The average period of
ownership for the portfolio now stands at 19 months.

The development portfolio generated a revaluation surplus of £3.3 million
driven mainly by planning and pre-letting progress at Bishop Auckland,
Kirkstall and Berkhamsted. Despite continued asset management progress the
investment portfolio suffered from 15 bps of outward market yield movement.
The impact of this yield shift would have been greater but was partly
mitigated by income growth. The resulting revaluation deficit was £2.6
million.

                            Valuation contributors

                              % valuation surplus/(deficit)
New lettings and rent reviews                          1.0%
New space                                              0.8%
Asset management yield shift                           0.6%
Market yield shift                                   (2.1%)
Total valuation uplift                                 0.3%

                           Robust portfolio metrics

Our investment portfolio is over 99% occupied and generates secure and
dependable cash flows on long-term leases delivering a contracted yield on
cost of 6.8%. The longevity of our income adds further security with average
unexpired lease terms of 11.5 years (10.8 years to first break). Our lease
expiry profile is well staggered with only 6% of our income due to expire in
the next three years. This compares favourably with the broader market where
15% of out-of-town leases and 51% of shopping centre and high street leases
are due to expire by the end of 2015.

                 Lease expiry profile on investment portfolio

0-3 years     6%
3-10 years   36%
10-15 years  40%
15 years +   18%
Total       100%

Includes pre-lets on committed developments

The average passing rent on the investment portfolio is £14.75 psf, which on a
like-for-like basis is £1 psf higher than at acquisition, with further
reversionary potential as we look to move towards sustainable rental levels
over time.

16% of the investment portfolio's income is subject to fixed rental uplifts
(Metric: 13%, MIPP: 36%).

                    Tenant diversity and covenant strength

The diversity of income within the portfolio is spread across the key retail
subsectors with 18% of income derived from food operators, one of the few
retail subsectors demonstrating organic rental growth. This represents our
largest sector exposure.

                               Sector Exposure

                   (% of contracted rental income)
Food                                            18%
General Merchandise                             17%
DIY                                             15%
Home Furnishings                                15%
Electrical                                      13%
Furniture                                       11%
Discount                                         6%
Other                                            5%
Total                                          100%

Our top ten customers account for 61% of the total contracted rent. The
granularity and diversity of income has improved as we have grown the
portfolio and we expect this to continue as we undertake further asset
management initiatives and acquire more assets. Our largest tenant exposure is
to Currys/PC World at 12.0%, declining from 13.9% at September 2011 and 24.6%
at September 2010.

                     Tenant exposure (weighted by income)

                        Rent p.a.
Trading name                  £m % of total rent
Currys/PC World               2.1            12.0
B&Q                           1.7             9.8
DFS                           1.3             7.2
Dunelm                        1.1             5.9
Morrisons                     1.0             5.7
Carpetright                   0.9             4.9
M&S                           0.9             4.9
Next                          0.8             4.2
Homebase                      0.6             3.5
Tesco                         0.5             2.9
Total top ten customers      10.9            61.0
Other                         6.9            39.0
Total income                 17.8           100.0

1. Including £0.4 million of rental income from post period end  acquisitions, 
deals in solicitors' hands and outstanding rent reviews.



Financial review

The results for the six months ended 30 September 2012 continue to benefit
from the investments made in 2011/12 together with the asset management
initiatives which are now starting to flow through to the income statement.

                   Income statement and earnings per share

The Group made a profit after tax of £3.1 million in the six months to 30
September 2012 which equates to earnings per share of 1.6p. The profit arose
mainly from the EPRA earnings of £3.5 million (see note 7) and a gain on
revaluation and profit arising on the sale of investment properties of £0.7
million. These profits were offset by a loss of £1.1 million arising on the
valuation of the derivative financial instruments arising in the period.
Excluding the revaluation surplus, profit on sale of investment properties and
loss on the derivative financial instruments the Group made an EPRA profit
after tax of £3.5 million or EPRA earnings per share of 1.8p - a decrease of
11% over the prior period. However, if the one-off surrender premiums of £1.3
million received in the first half 2011/12 are excluded the underlying
adjusted earnings increased by 35%.

Net rental income in the six months to 30 September 2012 was £6.2 million an
increase of £1.0 million compared to £5.2 million in the prior period
excluding one-off surrender premiums received of £1.3 million. The effect of
acquisitions made in the current period and prior year contributed £1.0
million to net rental income. New lettings arising from asset management
initiatives contributed a further £0.5 million although this was offset by the
loss of income which arose as a result of insolvencies in 2011/12 of £0.5
million, primarily Focus DIY and Peacocks.

The MIPP joint venture contributed £0.5 million to the operating profit
reflecting the continued investment build up in the period. MIPP also
contributed a further £0.1 million in management fees. The revaluation of the
MIPP portfolio resulted in a deficit of £0.6 million which arose as a result
of the outward yield movement on the portfolio together with the absorption of
acquisition costs arising in the period.

Administration expenses continue to be tightly controlled with no change over
the prior period at £2.1 million, despite the current period reflecting a full
six months of cost for staff hired partway through the previous period.

Net interest payable was £1.1 million, reflecting the interest on debt drawn
to finance acquisitions and capital expenditure along with the amortisation of
loan arrangement fees and commitment fees incurred on the facilities. During
the period, the average interest cost increased to 3.5% reflecting fixed rate
swaps entered into in the previous year, this rate will continue to increase
in the future to about 3.7% when fully drawn based on current LIBOR and swap
rates. A loss of £1.2 million was incurred on the mark to market valuation of
the derivative portfolio reflecting the continued decline in anticipated libor
rates. The five fixed rate interest rate swaps completed to date have been set
at a weighted average rate of 1.7% (excluding loan margins and costs). 

                         Dividend and dividend policy

The Board of Directors has declared an interim dividend of 1.8p per share or
£3.4 million, an increase of 80% over the 1.0p declared for the first half of
2011/12. The dividend will be paid on 7 December 2012 to shareholders on the
register at the close of business on 23 November 2012. The dividend will be
paid entirely as a Property Income Distribution (PID). The 2011/12 final PID
dividend of 2.3p per share or £4.4 million was paid during the period and has
been recognised in these financial statements.

                      Balance sheet and net asset value

As at 30 September 2012 the Group's portfolio was valued at £246.1 million
(£266.2 million including Metric's share of MIPP). Expenditure in the period
on property acquisitions was £10.8 million and a further £8.0 million was
spent on tenant incentives and capital expenditure relating to the
redevelopment and refurbishment of the portfolio. After acquisition costs and
capital expenditure the wholly owned property portfolio generated a
revaluation surplus of £1.3 million.

The Group's investment in MIPP was valued at £20.4 million as at 30 September
2012 and generated a revaluation deficit of £0.6 million after acquisition
costs.

Including MIPP, total acquisitions (net of acquisition costs) in the period
were £35.9 million (£18.8 million at share).

The net asset value per share at the period end was 105p and the EPRA net
asset value was 107p. The table below sets out the reasons for the movement in
the EPRA net asset value since 31 March 2012:

                                                               pence
                                                         £m    per share
Net asset value as at 31 March 2012                      201.3 106
Fair value of derivative financial instruments (note 16) 1.6   1
EPRA net asset value 31 March 2012                       202.9 107
EPRA profit after tax (note 7)                           3.5   2
Revaluation surplus and profit on disposal               0.7   -
Dividends paid                                           (4.3) (2)
EPRA net asset value as at 30 September 2012             202.8 107
Fair value of derivative financial instruments (note 16) (2.7) (2)
Net asset value as at 30 September 2012                  200.1 105

                                  Financing

As at 30 September 2012, the Group had net debt of £57.9 million with an LTV
of 24% or 22% on a 'look through' basis including the Group's net share of
MIPP.

Including our share of MIPP, the Group is committed to spend a further £21.0
million of which £2.8 million relates to acquisition costs; £15.7 million of
expenditure is committed relating to redevelopments currently on site or about
to commence; and a further £2.5 million is conditionally committed dependant
on obtaining planning and/or pre-lets.

The Group is also committed to investing a further £4.8 million in the MIPP
joint venture being the balance of the £25 million initial investment. This
commitment was invested post period end following the acquisition of Lichfield
Retail Park and Wickes, Nottingham by MIPP.

A further £30.1 million has been earmarked for developments at Leeds, Bishop
Auckland (Phase 2), Congleton, and St Austell but is not yet committed.

The Group has two committed loan facilities totalling £114.7 million (£80.0
million expiring in four years; £34.7 million expiring in three and a half
years). Post period end the MIPP joint venture signed a £75 million loan
facility with Deutsche Pfandbriefbank AG. The Group also continues its ongoing
discussions with a number of other lenders with a view to entering into
additional loan facilities in the future.

The Deutsche Pfandbriefbank AG facility provides MIPP with a £75 million
facility to acquire further retail investments. The anticipated all in cost of
debt for the facility is expected to be 4.0% once fully drawn and the required
amount of hedging has been put in place. The principal financial covenants of
the facility are:

· Interest cover ratio - projected net rental income to be not less than
2.0 times projected net interest payable, calculated on a 12 month forward
looking basis;

· Loan to value - total drawings not to exceed 60% of the total value of
the properties secured

The Group has hedged 68% of its available facilities. The derivatives were
valued at fair value with a net liability to the Group of £2.3 million or 1.2p
per share which has been included on the balance sheet.

As at 30 September 2012 and including anticipated future debt facilities and
capital expenditure committed and earmarked, the Group has firepower totalling
about £67 million in Metric and £87 million in MIPP, calculated as follows:

                                                            Metric  MIPP
                                                                £m    £m
Cash at bank and on deposit                                    4.8   1.7
Undrawn committed bank facilities                             52.0  75.0
Investment in MIPP joint venture                             (4.8)  14.4
Less capital commitments (including conditional)            (20.3) (4.1)
Total firepower excluding earmarked developments              31.7  87.0
Earmarked development expenditure                           (30.1)     -
Anticipated debt on above developments once completed^(1,2)   65.4     -
Total anticipated firepower at 30 September 2012              67.0  87.0

1. Based on leveraging existing and anticipated properties at a 50% LTV and
the availability of funds.

2. The availability of these facilities is dependent upon the timing of
completion of anticipated developments.



Post period end, MIPP has acquired a property in Lichfield for £11.6 million
and Nottingham for £4.1 million (including acquisition costs) which reduced
the available firepower in MIPP to £71 million.



Key risks and uncertainties

Whilst the ultimate responsibility for risk management rests with the board,
the management of risks is engrained across our organisation and in how we
approach all aspects of our business. The close involvement of senior
management in all significant decisions, combined with our cautious analytical
approach and open communication with the board provide the framework to manage
risks effectively.

Strategic risks

Risk                               Mitigation
Investment acquisitions            Specialist retail operator undertaking
underperform financial objectives  detailed financial and operational
                                   appraisal process for all acquisitions,
                                   including due diligence reviews, prior to
                                   committing to an investment
Failure to identify business       Research into the economy and the
opportunities and                  investment and occupational market is
innovate                           evaluated as part of the Group's strategy
                                   process, covering key areas such as
                                   investment, leasing and asset management
Property markets are cyclical.     Extensive experience of the Directors
Performance depends on general     provides a privileged insight into the
economic conditions and in         strengths, weaknesses and opportunities
particular the retail sector       within potential investments

                                   Pro-active asset management including
                                   right-sizing, extensions, refurbishments,
                                   tenant mix, lease extensions and improving
                                   planning consents
Development risks                  Developments only in areas of high occupier
                                   demand

                                   Development acquisitions conditional on
                                   achieving planning consents

                                   Significant level of pre-lets achieved
                                   before commitment to develop made

                                   Highly experienced project management team
Development projects fail to       Contractor performance closely monitored
deliver expected returns due to    within project management process. Regular
increased costs, delays or changes monitoring against budget and forecasting
in property market values          of project costs


Financial risks
Risk                               Mitigation
Inability to raise finance to      £114.7 million of credit facilities signed
implement strategy                 with The Royal Bank of Scotland plc and
                                   Eurohypo AG

                                   £75 million credit facility signed with
                                   Deutsche Pfandbriefbank AG for MIPP joint
                                   venture

                                   Relationships with several banks and new
                                   entrants to real estate lending have been
                                   established
Adverse interest rate movements    The Company has hedged £78 million or 68%
                                   of available debt facilities and
                                   established a hedging strategy and hedging
                                   effectiveness is regularly monitored



Financial risks - continued                                                  
Risk                        Mitigation                                       
Failure to comply with loan Loan covenants are actively monitored and
covenants                   considered, including stress testing and         
                            headroom analysis, as part of the budgeting,
                            forecasting and Board reporting process
Failure to comply with REIT The Group actively monitors its compliance with
conditions                  REIT conditions as part of its budgeting and
                            forecasting process, the results of which are    
                            reported to the Board of Directors. The effect
                            of all acquisitions and disposals on REIT
                            conditions is monitored and considered
Counterparty credit risk    Deposits are placed with counterparties who have
resulting in loss of cash   a credit rating of at least AA- or are           
                            government backed. Documented treasury process
deposit                     approved by the Board


Asset management risks
Risk                        Mitigation
Tenant failure              Tenant covenant strength and concentration
                            assessed for all acquisitions and leasing
                            transactions
Failure to let vacant units Specialist retail market contacts and knowledge
                            and detailed appraisal of each investment
                            including potential tenant demand


Operational risks
Risk                        Mitigation
Loss of key staff           Remuneration structure reviewed and benchmarked
                            and a substantial part of remuneration share based
                            with period of time before vesting

                            Executive Directors have made a substantial equity
                            investment with lock-in provisions
Failure to comply with      Property health and safety has been outsourced to
health and safety           specialist retail property managing agents who
requirements                carry out regular risk assessments
Failure to adequately       A reinstatement valuation is carried out for each
insure the property         acquisition and is insured at a value increased by
portfolio                   30%. Loss of rental income is insured for three
                            years
Environmental liabilities   Environmental surveys carried out as part of the
                            due diligence for all acquisitions





Group income statement

Six months ended 30 September 2012

                                           (Unaudited)   (Unaudited) (Audited)

                                         Six months to Sixmonthsto   Year to
                                          30 September  30September  31 March
                                                  2012          2011      2012
                                    Note          £000          £000      £000
Gross rental income                    3         6,358         6,579    12,771
Property operating expenses            3         (115)          (74)     (222)
Net rental income                                6,243         6,505    12,549
Administrative expenses                4       (2,092)       (2,118)   (4,722)
Gain arising on valuation of
investment properties                  9         1,332         3,443     7,668
Profit on sale of investment
properties                                          12             -       122
Share of (losses)/profits of joint
venture                               10         (116)             -       558
Operating profit                                 5,379         7,830    16,175
Finance income                                      11            71        93
Finance costs                          5       (1,141)         (500)   (1,367)
Change in fair value of derivative
financial instruments                 15       (1,190)       (1,389)   (1,702)
Profit before and after tax                      3,059         6,012    13,199
Earnings per share - basic and
diluted                                7          1.6p          3.2p      6.9p
EPRA earnings per share                7          1.8p          2.1p      3.5p

All amounts relate to continuing activities.

There were no items of other comprehensive income or expense and therefore the
profit for the current and prior period also reflects the Group's total
comprehensive income.



Group balance sheet

As at 30 September 2012

                                                (Audited)
                                 (Unaudited) asat   (Unaudited)
                                       as at    31March         as at
                                30 September                     30September
                                        2012                2012          2011
                           Note         £000                £000          £000
Non-current assets
Investment properties         9      246,100             225,907       228,932
Investment in joint
venture                      10       20,401               8,820             -
Plant and equipment                       60                  90           105
Derivative financial
instruments                  15           35                  73           152
                                     266,596             234,890       229,189
Current assets
Trade and other
receivables                  11        2,723              12,041         1,721
Cash and short-term
deposits                     12        4,849               4,215         7,024
                                       7,572              16,256         8,745
Total assets                         274,168             251,146       237,934
Current liabilities
Trade and other payables     13     (10,164)            (15,166)      (11,934)
                                    (10,164)            (15,166)      (11,934)
Non-current liabilities
Bank loans                   14     (61,632)            (33,498)      (29,088)
Derivative financial
instruments                  15      (2,310)             (1,158)         (924)
                                    (63,942)            (34,656)      (30,012)
Total liabilities                   (74,106)            (49,822)      (41,946)
Net assets                           200,062             201,324       195,988
Equity
Share capital                          1,900               1,900         1,900
Other reserve                        180,672             180,672       180,672
Retained earnings                     17,490              18,752        13,416
Total equity                         200,062             201,324       195,988
Net assets per share         16         105p                106p          103p
EPRA net assets per share    16         107p                107p          104p



Group statement of changes in equity

Six months ended 30 September 2012 (Unaudited)

                                     Share   Other
                                   capital reserve Retained earnings   Total
                                      £000    £000              £000    £000
At 1 April 2012                      1,900 180,672            18,752 201,324
Profit for the period                    -       -             3,059   3,059
Dividends paid                           -       -           (4,370) (4,370)
Adjustment for share based awards        -       -                49      49
Total equity at 30 September 2012    1,900 180,672            17,490 200,062



Year ended 31 March 2012 (Audited)

                                     Share   Other
                                   capital reserve Retained earnings   Total
                                      £000    £000              £000    £000
At 1 April 2011                      1,900 180,672             8,495 191,067
Profit for the period                    -       -            13,199  13,199
Dividends paid                           -       -           (3,040) (3,040)
Adjustment for share based awards        -       -                98      98
Total equity at 31 March 2012        1,900 180,672            18,752 201,324



Six months ended 30 September 2011 (Unaudited)

                                     Share   Other
                                   capital reserve Retained earnings   Total
                                      £000    £000              £000    £000
At 1 April 2011                      1,900 180,672             8,495 191,067
Profit for the period                    -       -             6,012   6,012
Dividends paid                           -       -           (1,140) (1,140)
Adjustment for share based awards        -       -                49      49
Total equity at 30 September 2011    1,900 180,672            13,416 195,988



Group cash flow statement

Six months ended 30 September 2012

                                                        (Unaudited)  (Audited)
                                                       Six month to    Year to
                                          (Unaudited)
                                     Six months to 30 30 September  31 March
                                       September 2012          2011       2012
                                                 £000          £000       £000
Cash flows from operating activities
Operating profit                                5,379         7,830     16,175
Adjustments for non-cash items:
Gain arising on valuation of
investment properties                         (1,332)       (3,443)    (7,668)
Profit on sale of investment
properties                                       (12)             -      (122)
Share of losses/(profits) of joint
venture                                           116             -      (558)
Lease incentives and unsettled rent
reviews recognised                              (733)         (475)    (1,070)
Share based awards                                 49            49         98
Depreciation                                       31            28         58
Cash flows from operations before
changes in working capital                      3,498         3,989      6,913
(Increase)/decrease in trade and
other receivables                               (416)           249      (374)
Decrease in trade and other payables            (199)       (1,236)      (107)
Net cash flows from operations                  2,883         3,002      6,432
Interest received                                  12           105        128
Interest paid                                 (1,157)         (266)    (1,036)
Corporation tax: REIT conversion
charge paid                                         -         (206)      (208)
Net cash flows from operating
activities                                      1,738         2,635      5,316
Cash flows from investing activities
Purchase of investment properties            (16,428)      (48,231)   (53,754)
Sale of investment properties                   9,733             -     10,817
Redevelopment and other capital
expenditure                                   (6,334)       (2,849)    (7,459)
Investment in/loans advanced to
joint venture                                (11,990)             -    (8,399)
Distributions received from joint
venture                                           287             -         75
Purchase of plant and equipment                   (2)           (6)       (21)
Net cash flows from investing
activities                                   (24,734)      (51,086)   (58,741)
Cash flows from financing activities
Dividends paid                                (4,370)       (1,140)    (3,040)
Bank loans drawn down                          28,000        30,000     48,700
Bank loans repaid                                   -             -   (14,000)
Loan arrangement fees paid                          -         (804)    (1,439)
Purchase of derivative financial
instruments                                         -         (617)      (617)
Net cash flows from financing
activities                                     23,630        27,439     29,604
Net increase/(decrease) in cash  and 
short-term deposits                               634      (21,012)   (23,821)
Cash and short-term deposits at
beginning of period                             4,215        28,036     28,036
Cash and short-term deposits at end
of the period                                   4,849         7,024      4,215



Notes to the financial statements

               1. Basis of preparation and general information



Basis of preparation

The condensed consolidated financial information included in this half yearly
report has been prepared in accordance with the Disclosure and Transparency
Rules of the Financial Services Authority and with IAS 34 "Interim Financial
Reporting", as adopted by the European Union. The same accounting policies,
estimates, presentation and methods of computation are followed in this half
year report as applied in the Group's latest annual audited financial
statements. The current period information presented in this document is
reviewed but unaudited and does not constitute statutory accounts within the
meaning of S435 of the Companies Act 2006.



The financial information for the year to 31 March 2012 does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A
copy of the statutory accounts for that period has been delivered to the
Registrar of Companies. The auditor's report on those accounts was not
qualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying the report, and did not
contain statements under section 498(2) or (3) of the Companies Act 2006.



These condensed financial statements were approved by the Board of Directors
on 8 November 2012.



Going concern

The Directors are satisfied that the Group has the resources to continue in
operational existence for the foreseeable future. For this reason, the
financial statements are prepared on a going concern basis.

The Group's business activities, together with the factors affecting its
performance, position and future development are set out in the Business
Review. The finances of the Group, its liquidity position and borrowing
facilities are set out in the Financial Review and in notes 12 and 14 of the
condensed consolidated financial information.

The Directors have reviewed the current and projected financial position of
the Group, making reasonable assumptions about future trading performance. As
part of the review the Directors have considered the Group's cash balances,
debt maturity profile of its undrawn facilities, and the long-term nature of
tenant leases. On the basis of this review, and after making due enquiries,
the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the
Half Year Report.

                           2. Segmental information

During the period and comparative periods, the Group operated in and was
managed as one business segment, being retail property investment, with all
properties located in the United Kingdom.

                        3. Gross and net rental income

                                    (Unaudited)                      (Audited)
                                                     (Unaudited)
                                  Six months to                        Year to
                                                Six months to 30
                              30 September 2012   September 2011 31 March 2012
                                           £000             £000          £000
Rent receivable                           5,709            4,993        10,853
Spreading of tenant
incentives and guaranteed
rent increases                              649              258           590
Surrender premiums                            -            1,328         1,328
Gross rental income                       6,358            6,579        12,771
Service charge income                       252              242           583
Management fee income                        99                -            27
Gross rental and related
income                                    6,709            6,821        13,381
Service charge expenses                   (275)            (242)         (621)
Property operating expenses               (191)             (74)         (211)
Net rental and related income             6,243            6,505        12,549

                          4. Administrative expenses

                                    (Unaudited)                      (Audited)
                                                     (Unaudited)
                                  Six months to                        Year to
                                                Six months to 30
                              30 September 2012   September 2011 31 March 2012
                                           £000             £000          £000
Employee costs                            1,697            1,625         4,037
Other administrative expenses               515              481         1,039
Share-based awards                           49               49            98
Depreciation of plant and
equipment                                    31               28            58
Staff costs capitalised                   (200)             (65)         (510)
Total administrative expenses             2,092            2,118         4,722

                               5. Finance costs

                                    (Unaudited)                      (Audited)
                                                     (Unaudited)
                                  Six months to                        Year to
                                                Six months to 30
                              30 September 2012   September 2011 31 March 2012
                                           £000             £000          £000
Interest payable on bank                                                   637
loans and overdrafts                        870              149
Loan commitment fees                        268              264           580
Amortisation of loan issue
costs                                       135              102           287
Total borrowing costs                     1,273              515         1,504
Less amounts capitalised on                                              (137)
the development of properties             (132)             (15)
Total interest payable and                                               1,367
other finance charges                     1,141              500

                                      

                                    6. Tax

The Group converted to a REIT on 24 March 2010 and as such is largely exempt
from corporation tax on its rental profits and chargeable gains relating to
its property rental business.

                                                                             

Factors affecting the tax charge for the period:

                                    (Unaudited)                      (Audited)
                                                     (Unaudited)
                                  Six months to                        Year to
                                                Six months to 30
                              30 September 2012   September 2011 31 March 2012
                                           £000             £000          £000
Profit before tax                         3,059            6,012        13,199
Profit before tax at the
standard rate of income tax
in the UK of 24% / 26%                      734            1,563         3,432
Effects of:
REIT tax exemption                        (734)          (1,563)       (3,432)
Total tax charge                              -                -             -

                            7. Earnings per share

                         (Unaudited)          (Unaudited)        (Audited)

                        Six months to        Six months to        Year to

                      30 September 2012    30 September 2011   31 March 2012
                                           Profit/           Profit/
                                 Earnings/         Earnings/         Earnings/
                         Profit/            (loss)            (loss)
                                    (loss)            (loss)            (loss)
                    (loss) after             after             after
                             tax per share     tax per share     tax per share
                            £000     pence    £000     pence    £000     pence
Basic and diluted          3,059      1.6p   6,012      3.2p  13,199      6.9p
Gain on revaluation
of investment
properties               (1,332)    (0.7)p (3,443)    (1.8)p (7,668)    (4.0)p
Profit on sale of
investment
properties                  (12)         -       -         -   (122)         -
Share of joint
venture loss/(gain)
on revaluation of
investment
properties                   622      0.3p       -         -   (419)    (0.2)p
Change in fair
value of derivative
financial
instruments                1,128      0.6p   1,332      0.7p   1,584      0.8p
EPRA                       3,465      1.8p   3,901      2.1p   6,574      3.5p
Weighted average number
of shares (000)
Ordinary shares in issue           190,000           190,000           190,000
Potentially dilutive share
awards issued in period                304               101               254
Total                              190,304           190,101           190,254

Adjusted earnings per share have been calculated in accordance with European
Public Real Estate Association (EPRA) guidelines. The change in the fair
value of financial instruments reflects the fair value movement from inception
of the derivative financial instrument until the balance sheet date of
£1,190,000 as well as the amortisation, on a straight line basis, of the
premium paid on entering into the interest rate cap of £62,000 (six months
ended 30 September 2011: £57,000; year ended 31 March 2012: £118,000).

                                 8. Dividends

The Board of Directors has proposed an interim dividend of 1.8p per share
which was approved by the Board of Directors on 8 November 2012 and will
result in a distribution of £3,420,000. The dividend will be paid on 7
December 2012 to shareholders on the register at the close of business on 23
November 2012. The dividend will be paid entirely as a PID (Property Income
Distribution). This dividend has not been recognised in the condensed
consolidated financial statements.

The Group Statement of Changes in Equity shows total dividends in the six
months to 30 September 2012 of £4,370,000 (2.3p per share) being the final
dividend for the year to 31 March 2012 which was approved at the Annual
General Meeting in July 2012. The dividend was paid entirely as a PID.

PID dividends are paid, as required by REIT legislation, after deduction of
withholding tax at the basic rate of income tax (currently 20%).

                           9. Investment properties

Six months ended 30                                                (Unaudited)
September 2012                                    (Unaudited)
                             (Unaudited)                                 Total
                                                   Investment
                              Investment     properties under       investment
                              properties          development     properties 
                                    £000                 £000             £000
At 1 April 2012                  209,282               16,625          225,907
Acquisition of
properties                        10,807                   32           10,839
Redevelopment and
refurbishment
expenditure                        1,147                6,142            7,289
Total additions                   11,954                6,174           18,128
Reclassification on
completion of
redevelopment                      6,725              (6,725)                -
Revaluation
(deficit)/surplus                (1,736)                3,068            1,332
                                 226,225               19,142          245,367
Tenant incentives
and accrued rental
income                               450                  283              733
At 30 September 2012             226,675               19,425          246,100
Year ended 31 March 2012                              (Unaudited)  (Unaudited)

                                                       Investment        Total
                                        (Unaudited)    properties
                                                            under   investment
                              Investment properties   development  properties
                                               £000          £000         £000
At 1 April 2011                             192,387             -      192,387
Acquisition of properties                    26,727         9,640       36,367
Redevelopment and
refurbishment expenditure                     4,995         3,812        8,807
Total additions                              31,722        13,452       45,174
Reclassification on
commencement of
redevelopment                               (8,050)         8,050            -
Disposals                                  (10,817)       (9,575)     (20,392)
Revaluation surplus                           3,078         4,590        7,668
                                            208,320        16,517      224,837
Tenant incentives and
accrued rental income                           962           108        1,070
At 31 March 2012                            209,282        16,625      225,907

                     9. Investment properties (continued)

Six months ended 30 September 2011                                 (Unaudited)
                                                      (Unaudited)
                                     (Unaudited)                         Total
                                                       Investment
                                      Investment properties under   investment
                                      properties      development  properties
                                            £000             £000         £000
At 1 April 2011                          192,387                -      192,387
Acquisition of properties                 26,739            2,445       29,184
Redevelopment and refurbishment
expenditure                                3,060              383        3,443
Total additions                           29,799            2,828       32,627
Reclassification on commencement of
redevelopment                            (8,050)            8,050            -
Revaluation surplus                        2,186            1,257        3,443
                                         216,322           12,135      228,457
Tenant incentives and accrued rental
income                                       435               40          475
At 30 September 2011                     216,757           12,175      228,932

The Company's freehold and leasehold investment properties were valued as at
30 September 2012 by Glyn Harper MRICS on behalf of the external valuer, CBRE
Limited, in accordance with the requirements of the RICS Valuation -
Professional Standards 2012 ("the Red Book"), on the basis of Fair Value
assuming that the properties would be sold subject to any existing leases.
The valuations were prepared by an RICS Registered Valuer, whose opinion of
Fair Value was primarily derived using comparable recent market transactions
on arm's length terms. We confirm that 'Fair Value' for the purposes of
financial reporting under International Financial Reporting Standards is
effectively the same as 'Market Value'. The total fees earned by CBRE for this
assignment represent less than 5% of their total UK revenues. The valuer has
continuously been the signatory of valuations for the Company since September
2010. CBRE has carried out Valuation and professional services on behalf of
the Company for less than five years.

The historic cost of investment properties and investment properties under
development amounts to £230,165,000 (31 March 2012: £211,304,000; 30 September
2011: £217,871,000) and the cumulative valuation surplus amounted to
£15,935,000 (31 March 2012: £14,603,000; 30 September 2011: £11,061,000).

Long leasehold properties, which are treated as finance leases and included in
investment properties above, amounted to £35,925,000, (31 March 2012:
£35,550,000; 30 September 2011: £34,400,000).

Properties with a value of £91,170,000 (31 March 2012: £91,965,000; 30
September 2011: £56,250,000) had been secured under the bank loan facility
with The Royal Bank of Scotland plc and properties with a value of £69,180,000
(31 March 2012: £72,385,000; 30 September 2011: £73,300,000) had been secured
under the bank loan facility with Eurohypo AG.

Investment properties under development only include those currently under
construction or refurbishment. The factors affecting the valuation of
investment properties are included in the Business Review on pages 4 to 13.

Capital commitments

Capital commitments have been entered into amounting to £16,336,000 (31 March
2012: £20,622,000; 30 September 2011: £5,830,000) which have not been provided
for in the condensed consolidated financial statements.

                       10. Investment in joint venture

Share of profits of joint          (Unaudited)
venture - Metric Income Plus                                         (Audited)
Limited Partnership              Six months to      (Unaudited)
                                                                       Year to
                                 30 September Six months to 30
                                          2012   September 2011  31 March 2012
                                          £000             £000           £000
Gross rental income                        554                -            157
Property operating expenses               (41)                -           (11)
Net rental income                          513                -            146
Administrative expenses                    (7)                -            (7)
Adjusted profit before and after
tax                                        506                -            139
(Loss)/gain on valuation of
investment properties                    (622)                -            419
(Loss)/profit before and after                                             558
tax                                      (116)                -
Summarised balance sheet -                            (Audited)
Metric Income Plus Limited         (Unaudited)            as at    (Unaudited)
Partnership                              as at         31 March          as at
                                  30 September                    30 September
                                         2012             2012           2011
                                          £000             £000           £000
Non-current assets - investment
properties                              60,300           34,825              -
Trade and other receivables                104               63              -
Cash and short-term deposits             1,713            1,755              -
Total current assets                     1,817            1,818              -
Total assets                            62,117           36,643              -
Current liabilities - trade and
other payables                           (914)         (10,183)              -
Total net assets                        61,203           26,460              -
Group share of net assets               20,401            8,820              -

As at 30 September 2012 the Group owns a one-third stake in Metric Income Plus
Limited Partnership ("MIPP"). MIPP's freehold and leasehold investment
properties were valued as at 30 September 2012 by Glyn Harper MRICS on behalf
of the external valuer, CBRE Limited, in accordance with the requirements of
the RICS Valuation - Professional Standards 2012 ("the Red Book"), sixth
edition, on the basis of Fair Value assuming that the properties would be sold
subject to any existing leases. The valuations were prepared by an RICS
Registered Valuer, whose opinion of Fair Value was primarily derived using
comparable recent market transactions on arm's length terms.

Investment by the Group -                          (Audited)
Metric Income Plus Limited
Partnership                           (Unaudited)    Year to       (Unaudited)

                                    Six months to   31 March     Six months to

                                30 September 2012       2012 30 September 2011
                                             £000       £000              £000
At start of period                          8,820          -                 -
Investment in and loans
advanced                                   11,990      8,399                 -
Share of profit after tax                   (116)        558                 -
Profit eliminated on sale of
investment property to MIPP                   (6)       (62)                 -
Distributions received                      (287)       (75)                 -
At end of period                           20,401      8,820                 -
During the period the Group advanced loans totalling £11,990,000 (year to 31
March 2012: £8,230,000; six months to 30 September 2011: £nil).



                       11. Trade and other receivables

                                                   (Audited)

                                       (Unaudited)   31March       (Unaudited)

                                 30 September 2012      2012 30 September 2011
                                              £000      £000              £000
Amounts due from tenants                       532       319               239
Other taxes                                    748     1,069                16
Other debtors                                  439       146                32
Investment property sale
proceeds                                        25     9,758                 -
Prepayments and accrued income                 979       749             1,434
At end of period                             2,723    12,041             1,721

The Directors consider that the carrying amount of trade and other receivables
approximates their fair values. The Group's credit risk is primarily
attributable to amounts due from tenants, which consist of rent and service
charge monies. A provision for doubtful debts is provided for based on
estimated irrecoverable amounts determined by past experience and knowledge of
the individual tenant's circumstances. The amount charged to the income
statement in respect of doubtful debts was £46,000 (six months to 30 September
2011: £83,000; year to 31 March 2011: £105,000). Trade and other receivables
are initially measured at invoiced value and have settlement dates within one
year.

                       12. Cash and short-term deposits

                                      (Audited)

                          (Unaudited)   31March       (Unaudited)

                    30 September 2012      2012 30 September 2011
                                 £000      £000              £000
Cash at bank                      849       382               701
Short-term deposits             4,000     3,833             6,323
At end of period                4,849     4,215             7,024

As at 30 September 2012 £3,310,000 (31 March 2012: £2,719,000; 30 September
2011: £2,249,000) was held in rent and restricted accounts which are not
readily available to the Group for day-to-day commercial purposes.

The credit risk on cash and short-term deposits is limited because the
counterparties are banks and money market funds with credit ratings of at
least AA- or government backed, and strict counterparty limits ensure the
Group's exposure to bank failure is minimised and consequently there is an
insignificant risk of changes in value.

                         13. Trade and other payables

                                                   (Audited)

                                       (Unaudited)   31March       (Unaudited)

                                 30 September 2012      2012 30 September 2011
                                              £000      £000              £000
Rents invoiced in advance                    1,931     1,854             2,022
REIT conversion charge payable                   -         -                 2
Other taxes                                    829       611               597
Accrued capital expenditure in
respect of property acquisitions
and redevelopment expenditure                3,962    10,089             7,994
Other trade payables and
accruals                                     3,442     2,612             1,319
At end of period                            10,164    15,166            11,934

Trade payables are interest free and have settlement dates within one year.
The Directors consider that the carrying amount of trade and other payables
approximates their fair value.

                                14. Bank loans

                                            (Audited)

                                (Unaudited)   31March       (Unaudited)

                          30 September 2012      2012 30 September 2011
                                       £000      £000              £000
Secured bank loans                   62,700    34,700            30,000
Unamortised finance costs           (1,068)   (1,202)             (912)
At end of period                     61,632    33,498            29,088

The bank loans are secured by fixed charges over certain of the Group's
investment properties with a carrying value of £160,350,000 (31 March 2012;
£164,350,000; 30 September 2011: £129,550,000) and are repayable within two to
five years of the balance sheet date.

Maturity of undrawn committed borrowing facilities:

                                         (Audited)

                             (Unaudited)   31March       (Unaudited)

                       30 September 2012      2012 30 September 2011
                                    £000      £000              £000
Expiring
In more than two years            52,000    80,000            54,700
At end of period                  52,000    80,000            54,700

                                      

15. Derivative financial instruments

The Group is exposed to market risk through interest rate fluctuations. It is
the Group's policy that a significant portion of external bank borrowings are
at either fixed or capped rates of interest. The Group will use interest rate
derivatives including swaps and caps to manage its interest rate exposure and
hedge future interest rate risk for the term of the respective bank loan.
This policy does not entirely eliminate the risk although the Directors
believe it provides an appropriate balance of exposure.

All derivative financial instruments are carried at fair value and would be
classified as level 2 fair value measurements, as defined by IFRS 7, being
those derived from inputs other than quoted prices (included within level 1)
that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices). Details of the Group's
derivative financial instruments that were in place at 30 September 2012 are
provided below.

                                                                  (Unaudited)
                                                       (Unaudited)
                                          (Unaudited)                Movement
                                                            Market
                                               Market              recognised
                                                             Value
                                                Value               in income
                                                          31 March
                                         30 September               statement
                                                  2012        2012
                        Protected                                         £000
                          rate    Expiry          £000        £000
Non-current assets
                          3.0%     April            35          73        (38)
£17.5m cap                         2016
Total non-current                                   35          73        (38)
assets
Non-current liabilities
                          3.3%     April         (976)       (868)       (108)
£10.5m swap                        2016
                          1.5%    October        (709)       (235)       (474)
£20.0m swap                        2016
£10.0m forward starting   1.6%    October        (304)        (55)       (249)
swap*                              2016
£10.0m forward starting   1.2%    October        (167)           -       (167)
swap*                              2016
£10.0m forward starting   1.2%    October        (154)           -       (154)
swap#                              2016
Total non-current                              (2,310)     (1,158)     (1,152)
liabilities
Total all derivative financial                 (2,275)     (1,085)     (1,190)
instruments

* commences January 2013

# commences April 2013

  All derivative financial instruments are non-current and are interest rate
                                 derivatives.

                                      

                             16. Net asset value

                               (Unaudited)       (Audited)      (Unaudited)

                            30 September 2012  31March 2012  30 September 2011
                                         Pence         Pence             Pence
                                                 Total           Total
                                           per           per               per
                            Total equity        equity          equity
                                    £000 share    £000 share      £000   share
Basic and diluted net asset
value                            200,062  105p 201,324  106p   195,988    103p
Fair value adjustment in
respect of derivative
financial instruments              2,712    2p   1,584    1p     1,332      1p
EPRA net asset value             202,774  107p 202,908  107p   197,320    104p

The basic net asset value per share has been calculated based on 190,000,000
shares in issue at 30 September 2012, 31 March 2012 and 30 September 2011.

EPRA net asset value per share has been calculated based on 190,303,828 shares
in issue at 30 September 2012, 31 March 2012 and 30 September 2011. This net
asset value has been calculated in accordance with European Public Real Estate
Association (EPRA) guidelines.

The change in the fair value of financial instruments reflects the fair value
movement from inception of the derivative financial instrument until the
balance sheet date of £2,892,000 as well as the amortisation, on a straight
line basis, of the premium paid on entering into the interest rate cap of
£180,000 (31 March 2012: £118,000; 30 September 2011: £57,000).

                        17. Post balance sheet events



On 30 October 2012 the Group has made a further loan of £3,854,000 to the MIPP
joint venture to enable it to complete the acquisition of Lichfield Retail
Park, Lichfield which completed on 31 October 2012.

On 7 November 2012 the Group committed to make a further loan of £927,000 to
the MIPP joint venture to enable it to complete the acquisition of Wickes,
Mansfield Road, Nottingham, on 13 November 2012. This loan completes the £25
million of partner loans committed by Metric.

On 7 November 2012 the MIPP joint venture entered into a £75,000,000 credit
facility with Deutsche Pfandbriefbank AG.



Directors' responsibility statement

The Directors are responsible for preparing the condensed set of financial
statements, in accordance with applicable law and regulations. The Directors
confirm that, to the best of their knowledge:



· This condensed set of financial statements has been prepared in
accordance with IAS 34 "Interim Financial Reporting", as adopted by the
European Union, and

· This condensed set of financial statements includes a fair review of the
information required by Sections DTR 4.2.7R and DTR 4.2.8R of the Disclosure
and Transparency Rules of the United Kingdom's Financial Services Authority.





By order of the Board





Andrew Jones

Chief Executive





Sue Ford

Finance Director



8 November 2012



Independent review report to Metric Property Investments plc

We have been engaged by the company to review the condensed set of financial
statements in the half yearly financial report for the six months ended 30
September 2012 which comprises the income statement, the balance sheet, the
statement of changes in equity, the cash flow statement and related notes 1 to
17. 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 International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our work has been undertaken so that
we might state to the company those matters we are required to state to it in
an independent review 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 formed.

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

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

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

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

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

Deloitte LLP

Chartered Accountants and Statutory Auditors

London, United Kingdom

8 November 2012

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


IR KMMGMGRNGZZZ -0- Nov/09/2012 07:00 GMT
 
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