Quintain Estates QED Results for the six months ended 30 September 2012

  Quintain Estates (QED) - Results for the six months ended 30 September 2012

RNS Number : 9444R
Quintain Estates & Development PLC
26 November 2012






26 November 2012


                                      

                     Quintain Estates and Development PLC

                      ("Quintain" / "Company" / "Group")

                                      

              Results for the six months ended 30 September 2012



Quintain Estates and Development PLC today announces its Interim results to 30
September 2012.



KEY POINTS:



· Repositioning of the Company underway, with a primary focus on London

· Balance sheet being strengthened, with £70m net debt reduction to date
and further maturity

extensions

· Company committed to reducing net debt to sub-£400m by 31 March 2014

· Momentum building at Greenwich with enhanced MoU and planning
applications for 500 homes submitted,

and at Wembley with Phase One of development (1.8m sq ft) on schedule to
complete next year



HIGHLIGHTS OF THE PERIOD:



The newly  appointed management  team is  repositioning the  Company to  be  a 
leading London development  and investment specialist.  The team has  improved 
the pace of delivery  on the major regeneration  schemes and is  strengthening 
the Company's financial position.



At Greenwich, the  new Knight  Dragon joint  venture, which  was announced  in 
June, is already driving momentum on  the scheme, on which outline consent  is 
held by Quintain for, inter alia, 10,000 homes. The Company announces today an
enhanced  Memorandum  of  Understanding  with  the  Greater  London  Authority 
regarding 11  initial  residential  plots, which  will  deliver  2,870  homes. 
Detailed planning applications regarding 506  of these homes, on three  plots, 
have been submitted and a decision is expected in February.



At Wembley,  the Hilton  hotel and  student accommodation  scheme opened  this 
summer and construction of the London Designer Outlet ("LDO") is on track  for 
the shopping centre to open next autumn. This opening will mark the completion
of the 1.8 million sq ft first phase  of development on the 8.5 million sq  ft 
Wembley scheme. The LDO has been  boosted during the period by the  completion 
of the line-up of anchor  tenants and a range of  food & beverage lettings.  A 
new letting to LK Bennett is announced today.



The balance  sheet has  been  strengthened during  the  period with  net  debt 
reduced by £70 million to £465 million as a result of £145 million of  capital 
recycling. Maturities on a  further £85 million  of bank facilities  extended, 
providing additional financial flexibility over the medium term.



FINANCIAL HIGHLIGHTS



Income Statement                   Six months Year ended  Six months ended

                                        ended  31 March 30 September 2011

                                 30 September       2012

                                         2012
Gross profit (£m)                        15.3       24.9              14.0
Adjusted profit before tax (£m)¹          4.3        5.8               3.3
Loss before tax (£m)                   (29.1)     (43.5)               3.7


Earnings per share (pence):
Basic                                   (4.3)      (6.8)               0.8
Adjusted diluted (EPRA)                   0.1        0.3               0.9



¹Adjusted  for  capital  and   revaluation  movements  and  trading   property 
provisions.





Balance Sheet                    At 30 September At 31 March                At

                                            2012        2012 30 September 2011
Net debt (£m)                            (465.2)     (535.0)           (533.7)
Bank gearing                                 78%         87%               79%
Basic net asset value per share              106         110               116
(pence)
EPRA net asset value per share               109         116               126
(pence)



Max James, Chief Executive of Quintain, said:

"We are  repositioning Quintain  to become  a leading  London development  and 
investment specialist, supported  by robust  recurring income  from the  asset 
management business.  We  are  making material  progress  towards  creating  a 
capital structure that complements our assets through the de-leveraging of the
balance sheet, introducing new capital and developing new income streams.  Our 
focus is now firmly on driving delivery at our two outstanding London schemes.



"Our objective over  the next eighteen  months is to  reinforce the  financial 
platform and transform  the operational  delivery of the  Company. This  will 
enable us to deliver value for shareholders in the years ahead."





Meeting and conference call

A meeting for analysts  and institutional investors will  take place today  at 
09.00 at the City  Marketing Suite, Guildhall,  80 Basinghall Street,  London, 
EC2V 5AR. The  meeting can also  be accessed  via a conference  call dial  in 
facility, using the following details:





Dial in number: +44 (0) 20 3059 8125

Password:  Quintain



In addition, a live webcast of the presentation will be available on the
Company's website at www.quintain.co.uk.





For further information, please contact



Quintain Estates and Development  PLC 
RLM Finsbury

Cressida
Curtis
Jenny Davey

Tel:  +44  (0)20  7495   8968 
 Tel: +44 (0)20 7251 3801





Chief Executive's Statement



1. Overview



In May  2012,  the  Board appointed  a  new  team of  executive  directors  to 
re-position Quintain  and lead  the next  phase of  the Company's  growth.  To 
achieve our objective of delivering and  maximising the value inherent in  our 
portfolio, we are sharpening the  focus of the Company, improving  operational 
delivery and  implementing  a  strategy  through which  we  are  confident  of 
creating substantial value for shareholders.



The strategy  will position  Quintain as  a leading  property development  and 
investment specialist  with  a primary  focus  on London.  We  are  allocating 
resources to capitalise  on London's  position as  a global  city through  our 
major  regeneration  schemes,  while  ensuring  the  Group  is   appropriately 
supported by recurring income from investment in specialist sectors.



We are in the process of developing two large London urban regeneration sites,
Greenwich Peninsula and Wembley, which represent over two-thirds of our assets
by value. Combined, these  assets benefit from  outline planning consents  for 
over 22 million sq ft of development  and have the potential to deliver  circa 
15,000 residential units and 7.5 million sq ft of commercial space.



Through the  development of  these sites,  Quintain will  create two  new  and 
exciting districts in which  Londoners can work, be  entertained and live,  as 
well as deliver strong returns to our shareholders.

In addition to these development assets, Quintain acts as property adviser  on 
£2.2 billion of  assets which are  principally in three  funds, comprising  iQ 
(student accommodation), Quercus (healthcare) and WELPUT (West End  offices). 
These funds provide a balance of income for the Group and have performed  well 
in their respective markets.



2. Results



We are pleased to  report that, in  the six months to  30 September 2012,  the 
Company delivered a £1.1 million increase in adjusted pre-tax profit, to  £4.3 
million, compared  with  the same  period  last year.  This  demonstrates  the 
growing strength of the  business, with an emphasis  on income generation  and 
cost control.



Reflecting the wider  UK economic  environment, the  portfolio experienced  an 
overall 1.7 per cent. reduction in gross assets to £1.1bn, principally  driven 
by falls in the value of secondary assets.



Due to the gearing effect, the net asset value fell over the period by 3.8 per
cent. from £572.0  million to  £550.5 million,  equivalent to  106p per  share 
(March 2012: 110p).



3. Delivery



a) Greenwich



The  development  opportunity  at  Greenwich  has  been  transformed  by   the 
establishment in the period of the 40:60 joint venture with Knight Dragon, the
private investment vehicle of Dr Henry  Cheng Kar-Shun. The joint venture  has 
the benefit of  a £300 million  financing facility provided  by Knight  Dragon 
which will now fully-fund the roll-out of development.



This partnership is already delivering positive results, with a full review of
the opportunity completed and agreement  of an enhanced development  strategy. 
We announce today that we have now agreed with our public sector  stakeholders 
an enhanced Memorandum of Understanding regarding the delivery and composition
of 11 initial residential  plots that enable the  joint venture to  accelerate 
the delivery of  approximately 2,870  of the 10,000  homes for  which we  hold 
outline consent.  As  a result  of  this  agreement, we  have  also  submitted 
detailed planning  applications  for the  first  three plots,  comprising  506 
homes, which will be  considered by the Planning  Committee next February.  We 
anticipate marketing the first homes within the next twelve months.



b) Wembley



Over the  last six  months,  Wembley has  also progressed  well,  particularly 
through the  opening of  the  4-star Hilton  Hotel  and the  adjacent  student 
accommodation scheme. Completion of  the 250,000 sq  ft (NIA) London  Designer 
Outlet centre ("LDO") remains  on schedule to take  place in less than  twelve 
months' time. The opening of  the LDO will mark  the completion of the  first 
1.8 million sq ft phase of  this four-phase scheme and, importantly,  position 
Wembley as a unique and exciting retail and leisure destination, together with
the existing National Stadium and Wembley  Arena. Contracts for 52 per  cent. 
(by base rent) of  space within the  LDO are now  exchanged or in  solicitors' 
hands and a further  13.4% are under negotiation.  We have also completed  the 
line-up of anchor retailers and  signed the first aspirational retail  brands. 
Construction is well advanced, with steel work in place.



c) Asset Management



With the acquisition of Grafton Advisors  earlier this year, we now advise  on 
three high quality portfolios of scale, namely iQ, Quercus and WELPUT, with  a 
combined gross asset value in excess  of £2.0 billion. Quintain co-invests  in 
iQ and Quercus, with our share of  profits from these two vehicles being  £8.0 
million for  the  period under  review  (September 2011:  £6.2  million).  In 
addition, asset management activities have  delivered £3.0 million of fees  to 
the Company during the period, predominantly from the three main funds.



4. Finance



We are  making significant  progress  in creating  a capital  structure  which 
complements our  assets and  their inherent  potential, in  de-leveraging  the 
balance sheet  and  by introducing  a  new  partner and  capital  provider  at 
Greenwich.



In addition to seeking to reduce the amount of leverage on the balance  sheet, 
we are actively managing  our debt maturities. During  the period we  extended 
£85 million of maturities with three of  our lenders and reduced our net  debt 
from £535 million to  £465 million. We  have now set  an initial target  debt 
level of  sub-£400  million  by  31 March  2014,  which  will  strengthen  the 
financial platform from which Quintain operates.



5. Management



During the period, in addition to my own appointment as Chief Executive, there
were material changes at Board level. Richard Stearn, who joined Quintain  in 
January from  the Berkeley  Group,  was promoted  to Finance  Director.  Nigel 
Kempner, who  has 35  years' experience  in  the industry  and is  a  founding 
partner of Grafton Advisors, was appointed Executive Director, bolstering  the 
property experience at a senior  level. Rebecca Worthington resigned from  the 
Board having  been with  the  Company for  14 years,  11  of them  as  Finance 
Director. Becky made an  immense contribution to the  Company and we wish  her 
well in the next stage of her career.



6. Outlook



The priorities of the new management team are clear: we will continue to bring
greater structure and clarity  to the business; we  will sharpen our focus  on 
London; we will  ensure delivery  at Greenwich and  Wembley; we  will seek  to 
increase income  generation  from  our  investment  activities;  and  we  will 
progressively and permanently  reduce the  level of debt  through the  orderly 
disposal of non-core assets  and the judicious introduction  and use of  third 
party capital.



Our objective over  the next  eighteen months  is to  reinforce the  financial 
platform and transform  the operational  delivery of the  Company. This  will 
enable us to deliver returns for shareholders in the years ahead.



We  remain  aware  of  the  difficult  economic  environment,  but  also   the 
overwhelming demand for new residential accommodation and quality leisure  and 
retail facilities in London. This is why  our core strategy is to continue  to 
develop both Greenwich and Wembley, bringing in new capital where  appropriate 
whilst reducing long term debt.



Despite some small reductions in valuations, affected by the current  economic 
conditions,  we  have  reviewed  the  opportunities  in  developing  out  both 
Greenwich and Wembley over the medium term and are confident that the ultimate
profit to  be realised  from  these sites  will  provide additional  value  to 
shareholders.



The management team will continue  to work hard streamlining, structuring  and 
focusing efforts to ensure this value is maximised and efficiently delivered.



FINANCE REVIEW



Our immediate  objective  is  to  strengthen the  financial  position  of  the 
business to  ensure the  successful delivery  of the  strategy. Currently,  we 
therefore have two principal financial priorities: firstly, to reduce net debt
and balance  sheet  gearing  materially, whilst  still  enabling  the  further 
development of Wembley, and secondly, to improve underlying earnings  growth. 
Progress has been made on both counts  over the first six months of the  year. 
Despite capital expenditure  of £49.6 million,  net debt has  been reduced  by 
£69.8 million to  £465.2 million  and adjusted pre-tax  profit(our measure  of 
recurring profit,  which  excludes disposals,  valuation  and mark  to  market 
adjustments) increased by £1.0 million to £4.3 million.



In addition  to reducing  net  debt, bank  facility extensions  regarding  £85 
million of debt have been  secured providing additional financial  flexibility 
over the  medium  term. Importantly  for  the future  strength  of  Quintain's 
balance sheet,  the new  Knight Dragon  joint venture  at Greenwich  Peninsula 
secures the future funding  for the development of  the entire scheme  without 
the need for Quintain to invest further capital. From this point forward,  the 
development will be cash-generative for the Company through the repayment,  as 
the development progresses, of previous investment in infrastructure and  land 
funding. In addition, we will also receive development profits in due course.



New income  streams  have been  secured  in the  form  of the  opening  of  iQ 
Shoreditch, development management fees at Greenwich Peninsula and  additional 
asset management fees from the Grafton team.



1. Results for the period



Operating profit,  before non-current  asset sales  and revaluation,  for  the 
period increased £0.4 million to £3.7  million and Quintain's share of  profit 
from joint ventures rose  to £6.7 million, compared  to £6.1 million in  2011. 
Despite these improvements in  underlying income, the  overall result for  the 
period was a  pre-tax loss of  £29.1 million (2011:  profit of £3.7  million), 
reflecting a revaluation deficit of £24.6  million and a £9.7 million loss  on 
the disposal of non-current  assets. The latter was  largely due to the  £10.7 
million loss that arose on entering into the new joint venture arrangements at
Greenwich Peninsula, as identified at  the time the transaction was  announced 
in June. Net  finance costs fell  £0.8 million  to £5.2 million  and the  loss 
after tax was £22.5 million (2011:  profit of £4.2 million), with the  benefit 
of a £6.6 million tax credit (2011: £0.5 million credit).



2. Operating profit before non-current asset sales and revaluation



Before non-current asset sales and revaluation, operating profit has increased
from £3.3 million  to £3.7  million, compared to  the same  period last  year. 
Within this movement, gross  profit has improved by  £1.3 million, from  £14.0 
million last year to £15.3 million.



Net rental income has  fallen from £7.4  million to £6.9  million due to  both 
disposals  and  refurbishment   expenditure.  The  Plaza   Hotel  at   Wembley 
contributed £3.0 million of the  other income last year  but was sold in  July 
2012 and, hence, the contribution in the current period was reduced. This  was 
more than offset by increased commercialisation income at Wembley, enhanced by
the Olympics and  the first  development management  fees from  the new  joint 
venture arrangements at Greenwich Peninsula.



Fees from Asset Management  have increased from £2.6  million to £3.0  million 
following the acquisition of Grafton  Advisors, strategic property adviser  to 
WELPUT, at the end of last year.



The £0.9  million increase  in administrative  expenses largely  reflects  the 
inclusion of the Grafton team and the increase in the Greenwich team following
the establishment of the Knight Dragon joint venture. Both of these increases
are more than covered by associated income streams.



Operating profit            30 September 2012                30 September 2011
                                       Total                            Total
                                                          
                     Urban                                                  
                    Regen-       Asset                Urban       Asset
                   eration Manag-ement       Regen-eration Manag-ement      
                        £m          £m     £m            £m          £m     £m
Net rental income      3.9         3.0    6.9           3.3         4.1    7.4
Trading sales            -           -      -           0.1           -    0.1
Fees from asset
management               -         3.0    3.0             -         2.6    2.6
Other income           5.1         0.3    5.4           4.2         0.9    5.1
Trading property
provisions               -           -      -         (1.2)           -  (1.2)
Gross profit           9.0         6.3   15.3           6.4         7.6   14.0
Administrative
costs                    -           - (11.6)             -           - (10.7)
Operating profit                          3.7                              3.3



Quintain conducts  a  significant proportion  of  its business  through  joint 
ventures. The  table  below  sets  out the  combined  net  rental  income  and 
demonstrates that the fall in net rental income from owned operations is  more 
than offset by the increase in net rental income from joint ventures.



Net rental
income                       30 September 2012               30 September 2011
                                         Total                           Total

                                                                            
                       Urban       Asset               Urban       Asset
               Regen-eration Manag-ement      Regen-eration Manag-ement     
                          £m          £m    £m            £m          £m    £m
Group net
rental income            3.9         3.0   6.9           3.3         4.1   7.4
Share of JV
net rental
income                   0.4         6.6   7.0           0.1         5.5   5.6
Combined net
rental income            4.3         9.6  13.9           3.4         9.6  13.0



3. Sales of non-current assets



A progressive disposal programme is underway  to release capital to assist  in 
funding the development of Wembley and to reduce overall Group debt.



Sales of non-current assets  realised £138.4 million (net  of costs) of  which 
£91.6 million was received  in cash in the  period with the balance  deferred, 
giving rise to  a pre-tax loss  of £9.7 million.  The largest contributor  to 
this was  the  new  joint  venture  arrangements  at  Greenwich  which  had  a 
significant impact  on  the Group  balance  sheet  as the  Group  reduced  its 
investment in the site to 40%, as illustrated below:



Impact of the new Greenwich Joint Venture



Net assets disposed:                            £m
Reduction in investment property           (167.8)
Increase in investment in joint ventures      93.3
Increase in other net assets                   1.1
Total non-current assets                    (73.4)
Net proceeds:
Cash and cash equivalents                     22.2
Deferred receivable                           42.1
                                              64.3
Movement in net assets                       (9.1)
Loss from sale of non-current assets        (10.7)
Tax credit on transaction                      1.6
                                             (9.1)





4. Result of Joint Ventures



The Group's share  of profits from  joint ventures increased  to £6.7  million 
(2011: £6.1 million). The trading profit after interest was £2.8 million,  an 
increase of £1.1 million on the  £1.7 million earned in the comparable  period 
last year. This  included £1.6m from  Quercus (2011: £1.5  million) and  £1.2m 
from iQ (2011: £0.4m).  The net revaluation surplus  was £5.6 million or  £3.9 
million after tax  (2011: £6.7  million surplus  or £4.4  million after  tax), 
reflecting strong capital growth in iQ, which saw the opening of iQ Shoreditch
in the period and rental growth across the portfolio.



5. Net Finance Expenses



Net finance  expenses  decreased  from  £6.0 million  to  £5.2  million.  Bank 
interest payable  was  £8.8  million,  a reduction  of  £0.6  million  on  the 
comparable period last  year, with the  average cost of  debt falling to  3.0% 
(September 2011: 3.2%). The net charge attributable to hedging adjustments  on 
financial instruments decreased from £6.1 million to £5.4 million.



6. Valuation



The valuation of the Group's properties as at 30 September 2012, including our
share of gross assets in joint ventures and associates, was £1,108.1  million, 
a decrease of 1.7%, or £19.1 million on a like for like basis, net of  capital 
expenditure, since  31 March  2012.  This reflects  the market  for  secondary 
property assets and  a modest reduction  in the value  of development land  at 
Wembley.



7. Contractual capital commitments



As at 30 September 2012, the Group's contractual capital commitments of  £32.8 
million (31  March 2012:  £25.0 million)  related almost  entirely to  ongoing 
construction and infrastructure  work at Wembley.  Capital commitments  within 
joint ventures were reduced to just  £0.2 million from £25.7 million at  March 
with completion of iQ Shoreditch in the period.



8. Cashflow



The cash profit  generated from  operations before  working capital  movements 
amounted to £4.1 million (September 2011: £4.5 million). Net operating  income 
distributed by joint  ventures contributed a  further £1.5 million  (September 
2011: £2.0 million). This operating income was offset by net interest payments
of £5.0 million (September 2011: £8.4 million) leading to an operational  cash 
surplus of £0.6 million in the first  six months of the year (September  2011: 
deficit £1.9 million).



The disposal programme, together with the refinancing of iQ Shoreditch,  which 
allowed the Group's loan to  iQ to be repaid,  generated net cash proceeds  of 
£128.1 million (September  2011: £4.7  million). Investment  continued on  the 
development pipeline, most notably the completion of student accommodation and
the Hilton Hotel at Wembley and  construction activity on the London  Designer 
Outlet. £39.3 million was invested in  the period together with £10.3  million 
through joint ventures.



The net cash generated from disposals  allowed £67.5 million of borrowings  to 
be repaid during  the period  with net debt  reducing from  £535.0 million  at 
March to £465.2 million at the period end.



9. Risk Management



The core risks to  the business remain  as presented in  the Annual Report  in 
May, namely economic risk in  relation to real estate valuations,  development 
risk and treasury risks  in relation to banking  covenants and liquidity.  The 
treasury position is set out in a separate note below.



10. Financing strategy and capital structure



Our financing  strategy in  the  medium term  is to  manage  a level  of  debt 
appropriate to  the  nature and  risk  profile  of the  Group's  assets.  Our 
financing structure needs to be flexible and cost-effective, taking account of
the availability of debt. This has  been achieved through securing funding  at 
the corporate level, giving us the scope tofund efficiently all areas of  the 
portfolio which otherwise would  be more challenging as  well as providing  us 
with liquidity and operational flexibility.



Our initial target is to reduce net debt levels permanently to below £400m  by 
March 2014. In  order to give  us operational flexibility  and the ability  to 
fund the current development pipeline,  we have also been actively  re-phasing 
short term maturities in addition to extending debt out to March 2016.



Since we announced  our results for  the full  year in May,  we have  extended 
maturities, either  directly  or through  options,  on £85  million  of  debt, 
comprising a £20 million  facility extended from 2014  to 2015, a £35  million 
facility extended from  March 2013 to  September 2014 and  the removal of  £30 
million of scheduled facility amortisation.



The extension option on one of our facilities requires further amortisation of
£25 million in  June 2013.  The £403 million  of facilities  extended to  2016 
takes account of this amortisation. The facilities could be subject to further
amortisation on the exercise of elections, at the Company's request, to adjust
for losses for interest cover purposes.



Debt summary

                                Covenant   Period end      Year end

                                         30 Sept 2012 31 March 2012
Net debt                                      £465.2m       £535.0m
Weighted average debt maturity¹             2.9 years     3.2 years
Weighted average interest rate                   3.0%          3.1%
% of debt fixed                                 69.0%         60.5%
% of debt capped                                31.0%         39.5%
Interest cover²                    1.25x        12.3x          2.9x
Gearing³                            110%          78%           87%
Undrawn committed facilities                    £109m          £72m

^

^1Assumes that Quintain exercises option to extend Lloyds facilities to  2016, 
which reduces the facilities available by £25 million in 2013.

^2Interest cover, per our  banking covenants, is  defined as operating  profit 
before net finance expenses  plus realised surpluses  on disposals divided  by 
net finance costs excluding  mark to market  adjustments. September number  is 
shown on a rolling 12 month basis.

^3Gearing, per  our  banking  covenants,  is  defined  as  the  ratio  of  net 
borrowings of the Company and its wholly owned subsidiaries to equity.



11. Financial Outlook



Quintain's financial  strength  has  improved  over the  period  and  we  will 
continue to focus on bolstering this solid platform to enable the business  to 
deliver returns for  shareholders in the  years ahead. Our  priorities in  the 
immediate future  will therefore  remain the  permanent reduction  of debt  to 
below £400 million,  which we  intend to  achieve by  31 March  2014, and  the 
delivery of further income streams from both the Urban Regeneration and  Asset 
Management businesses.









OPERATING REVIEW



URBAN REGENERATION



1. Overview



Quintain holds outline planning consent for 22 million sq ft of development at
Wembley and  Greenwich  in  London,  including 15,000  homes  across  the  two 
schemes.



Our confidence in the future performance of both schemes is underpinned by the
significant imbalance between the low rate of delivery of new housing stock in
London and the continually increasing demand for homes. Wembley and  Greenwich 
are two of only a small number of large-scale London regeneration schemes and,
uniquely, both  benefit from  planning  consent and  transport  infrastructure 
already being in place.



With the National Stadium and Arena at Wembley, and The O2 at Greenwich, there
are world-famous entertainment venues  firmly embedded within both  localities 
that give them a clear identity and location and already attract an  estimated 
14 million visitors to our sites every year.



2. Greenwich



During the period  under review, a  new joint venture  was formed with  Knight 
Dragon, the investment vehicle ultimately owned  by the Chairman of New  World 
Development, Dr Henry Cheng Kar-Shun.



This partnership,  which  replaces the  original  agreement with  Lend  Lease, 
reduced Quintain's interest in the development potential of the scheme by  10% 
to 40% and, importantly, secured access to the funding required to deliver the
entire scheme. Quintain  retains a substantial  proportion of the  development 
profits for the Company and will  earn development fees under the deal,  which 
are expected to be  approximately £4 million per  annum once construction  has 
achieved momentum.



Since the  deal received  overwhelming shareholder  approval in  July and  the 
transaction completed,  the  team  has  delivered  significant  progress.  The 
masterplan, which covers  140 acres across  the river from  Canary Wharf,  has 
been reviewed in detail and a  new delivery strategy that maximises value  for 
shareholders agreed by the partners.



Subsequently, the team worked with the  Greater London Authority to agree  the 
components of the first phase of  the delivery programme, which will  comprise 
11 residential  plots.  This  agreement  is underpinned  by  a  Memorandum  of 
Understanding that we announce today.



As part of this Memorandum,  detailed planning applications were submitted  to 
the Council for three plots in the southern quarter, Peninsula Riverside.  The 
planning committee is expected to  consider the applications in February  and, 
if consent is granted, the team will start construction of the first 506 homes
next summer, following expiry of the judicial review period. The joint venture
will start marketing the residential units within the next 12 months.



During the  period, Quintain  made  key appointments  across the  business  to 
increase the management  and operational capabilities  of the delivery  teams. 
Anthony Gill, who  joined the  Company as Development  Director for  Greenwich 
from Grosvenor in  July is  now driving  delivery of  the Greenwich  Peninsula 
scheme.



3. Wembley



Quintain has  delivered significant  progress  at Wembley  since  construction 
began five years ago, and we are  on schedule to complete next year the  first 
of four development phases.



This first phase, which comprises 1.8  million sq ft of development,  includes 
leisure and retail  components that  will form  the entertainment  hub of  the 
wider, 8 million sq ft scheme.



A significant milestone was reached during the summer with the delivery of the
361-bedroom  Hilton  Hotel.  The   hotel,  which  offers   the  only  4   star 
accommodation within five miles of the  Stadium and Arena, is trading in  line 
with  expectations.  The  powerful  combination  of  the  National   Stadium's 
conference facilities, the Arena's entertainment  events and the hotel's  high 
quality accommodation  is  proving  popular  with  organisations  looking  for 
corporate event locations.



Alongside the hotel, the 660-bedroom  student accommodation scheme, which  was 
forward-sold by Quintain to Keystone & Partners Real Estate in 2011, was  also 
opened. It is being run by Quintain's student accommodation team on behalf  of 
Keystone.



Construction of the LDO - the shopping  and leisure hub at the heart of  Phase 
One - continued during the period. With completion now less than a year  away, 
the LDO has attracted increasing levels of interest from retailers and  leases 
covering 52% of the centre by base rent are signed or in solicitors' hands. In
October, the internationally-recognised footwear  brand, Clarks, joined  Nike, 
Marks & Spencer and GAP to complete the LDO's line-up of anchor stores and  we 
have also announced during the period leases to restaurant operators  Lavazza, 
Nandos and Las Iguanas. Today we announce that a lease has been signed with LK
Bennett for 1,900 sq ft of space  in the scheme, joining high profile  fashion 
brands Guess and Max Studio at the LDO.



As with Greenwich, we  have clarified the leadership  of the delivery team  at 
Wembley during the period with the  appointment of Ben Giddens as  Development 
Director. Ben has been with  Quintain since 2006 and  has a deep knowledge  of 
the Wembley  scheme, most  recently leading  the successful  outline  planning 
application for  Phase  Two  and securing  the  favourable  re-negotiation  of 
affordable housing quotas across Phases One  and Four. As reported earlier  in 
the year,  this directly  links the  sales receipts  achieved from  Registered 
Providers with  the  level of  affordable  housing required,  and  provides  a 
developer election to offset up to 25% of the requirement with the payment  of 
a commuted sum set at £46.50 per square foot.



With Phase One now nearing completion, preparations are well underway for  the 
development of Phase Two, which is  located close to Wembley Park  Underground 
station and will comprise 1,300 homes as well as the London Borough of Brent's
new Civic Centre and square, which  will open next summer. This new  building, 
which faces the  Stadium and the  Arena across Arena  Square, was designed  by 
Hopkins Architects and, when opened, will accommodate 2,000 employees as  well 
as welcoming an estimated one million visitors per year.









ASSET MANAGEMENT



1. Overview



The key role of  the Asset Management business  within Quintain is to  deliver 
robust  income  streams  from  specialist  property  sectors  to  support  the 
day-to-day operations  of the  Group and  to deliver  strong returns  for  the 
respective Funds' investors.



A  substantial  proportion  of  the  Group's  recurring  income  is  currently 
delivered by this  business, primarily  derived from funds  invested in  three 
sectors: West End of London commercial property; healthcare; and purpose built
student accommodation.  The strategy  is to  deliver outperformance  in  these 
sectors, increasing  income from  management and  performance fees  and,  over 
time, to reduce the level of equity that Quintain has invested in the vehicles
relative to assets under management.



The period under review  has been productive. Income  from this business  grew 
year on  year, reflecting  both the  emergence  of fees  from Grafton  and  an 
increasing contribution from the enlarged iQ portfolio.



We will continue to drive income from management and performance fees in  this 
business. However, as the delivery of our London developments builds  momentum 
and new income streams  are created, we intend  to reduce the equity  Quintain 
has invested in  the Asset  Management vehicles, thereby  contributing to  the 
corporate debt reduction programme  and increasing the focus  of the Group  on 
its development activities.



2. Student Accommodation - iQ



Major sector operators such as iQ, in which Quintain holds a 50% interest, had
predicted and  prepared for  the impact  of this  year's significant  rise  in 
tuition fees on  student applications. The  result is that  iQ's portfolio  is 
currently a healthy 96% let (2011: 99%) whilst also delivering a 5.0% increase
in average rent (excluding  the new scheme at  Shoreditch) compared with  last 
year. The net initial yield is 6.6%.



Some universities  compounded  the impact  of  a fee-driven  fall  in  student 
applications by  enforcing their  demands  for AAB  A  level grades  and  have 
consequently failed to fill  their quota of places.  Some students seeking  to 
avoid higher  tuition fees  sacrificed  a gap  year,  reducing the  number  of 
deferrals. However, indicators for the 2013/14 academic year suggest that  the 
issues experienced by the sector this year are unlikely to re-occur. Deferrals
are back to their  pre-2012 levels and  UCAS has reported  a higher number  of 
early applications than in the previous five years.



Our new scheme in Shoreditch opened for the current academic year,  increasing 
the portfolio to 13 properties. This  scheme, located in London's Zone 1,  has 
660 bedrooms, 23 common rooms and is close to Old Street underground  station. 
Despite being  a new  scheme, lettings  have been  strong, with  93% of  rooms 
occupied. This  substantial expansion  of the  portfolio has  led to  a  37.5% 
increase in the rent  roll which, together with  the 5.0% increase in  average 
rent  across  the  established  portfolio,  has  improved  significantly   the 
contribution iQ will this year deliver to Quintain.



Over the six months, iQ's total return to investors was 14.8% at Fund level.



3. Healthcare - Quercus



The Quercus Healthcare Fund was established  in 1998 as a partnership  between 
Quintain and Aviva. In addition to  generating fees from asset management  and 
procurement, Quintain holds an 11.2% interest in the vehicle, earning a  share 
of the Fund's profits.



The current challenges  faced by  the sector are  well-documented and  include 
public spending cuts and increasing wage bills and energy costs. At the end of
the period under review, five operators, managing  25 of the 261 homes in  the 
Quercus portfolio, were in administration.  However, in recent years the  Fund 
has also  diversified its  base to  include more  specialist care  facilities, 
which continue to deliver robust performance.  27% of the Fund by gross  asset 
value currently delivers this type of specialist care.



The LTV of the  Fund at 30 September  2012 was 45.4% and  the average cost  of 
debt 4.1%. Rental collection remains steady and the distribution yield of  the 
Fund over the last twelve months is 5.9%.



4. West End Offices - WELPUT



Quintain's acquisition of Grafton Advisors in February 2012 not only  expanded 
the Group's assets  under management  to in excess  of £2.0  billion, it  also 
added exposure  to the  more resilient  London commercial  market through  the 
WELPUT Fund  and strengthened  the specialist  property knowledge  within  the 
Group.



Quintain now earns  base fees  of £1.5  million per  annum through  activities 
connected with WELPUT,  which has  80 investors,  12 assets  and is  currently 
valued at £846 million, thereby  constituting a significant proportion of  our 
assets under management. The  Group can also  earn development management  and 
performance fees from the Fund.



During the period,  Stratton House  in Mayfair  was sold  for £166.0  million. 
£97.0 million  of the  proceeds was  re-invested in  two acquisitions:  3,  St 
James's Square, SW1, and 143-157 Farringdon Road, EC1 and the majority of  the 
rest contributed to reducing the Fund's debt,  which stood at 26.0% of ATV  at 
the period end.



The redevelopment of One Chapel Place, W1 was completed this summer and is now
being marketed.





Responsibility Statement of the directors

in respect of the half-yearly financial report



We confirm that to the best of our knowledge:



The condensed set of financial statements has been prepared in accordance with
IAS 34 Interim Financial Reporting as adopted by the EU.



The interim  management  report includes  a  fair review  of  the  information 
required by:

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

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



On behalf of the Board



Maxwell   James    Richard 
Stearn

Chief     ExecutiveFinance 
Director

26 November  2012  26  November 
2012







Forward looking statements



This  document  contains  certain  "forward-looking"  statements   reflecting, 
amongst other things, current views on our markets, activities and prospects.
By their  nature,  forward-looking  statements involve  risk  and  uncertainty 
because they relate  to future events  and circumstances that  may or may  not 
occur and which may  be beyond Quintain Estates  and Development's ability  to 
control  or  predict   (such  as  changing   political,  economic  or   market 
circumstances). Actual outcomes  and results may  differ materially from  any 
outcomes or results expressed or implied by such forward-looking  statements. 
Any forward-looking statements made  by or on behalf  of Quintain Estates  and 
Development speak  only  as  of  the  date on  which  they  are  made  and  no 
representation or warranty is given in relation to them, including as to their
completeness or accuracy or the basis  on which they were prepared. Except  to 
the extent  required  by  law,  Quintain  Estates  and  Development  does  not 
undertake to  update  or  revise forward-looking  statements  to  reflect  any 
changes in Quintain Estates and Development's expectations with regard thereto
or any changes in  information, events, conditions  or circumstances on  which 
any such statement is based.





Independent review report to Quintain Estates and Development plc



Introduction

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 Consolidated Income Statement, Consolidated
Statement of Comprehensive  Income, Consolidated  Balance Sheet,  Consolidated 
Statement of Changes  in Equity  and Consolidated Cashflow  Statement and  the 
related explanatory notes. We have read the other information contained in the
half-yearly financial report and considered  whether it contains any  apparent 
misstatements  or  material  inconsistencies  with  the  information  in   the 
condensed set of financial statements.



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



Directors' responsibilities

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



As disclosed  in note  1, the  annual financial  statements of  the Group  are 
prepared in accordance with IFRSs as adopted  by the EU. The condensed set  of 
financial statements included  in this half-yearly  financial report has  been 
prepared in accordance with IAS 34  Interim Financial Reporting as adopted  by 
the EU.



Our responsibility

Our responsibility is to express to the company a conclusion on the  condensed 
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  UK. A review of interim financial  information 
consists of making enquiries, primarily  of persons responsible for  financial 
and accounting matters, and applying analytical and other review procedures. A
review is substantially less  in scope than an  audit conducted in  accordance 
with International Standards  on Auditing  (UK and  Ireland) and  consequently 
does not enable  us to  obtain assurance  that we  would become  aware of  all 
significant matters that might be identified  in an audit. Accordingly, we  do 
not express an audit opinion.



Conclusion

Based on our  review, nothing  has come  to our  attention that  causes us  to 
believe that  the condensed  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  IAS 34 as adopted by the EU  and 
the DTR of the UK FSA.



Stephen Bligh

for and on behalf of KPMG Audit Plc

Chartered Accountants

15 Canada Square

London

E14 5GL

26 November 2012





Quintain Estates & Development PLC

Introduction and table of contents







In preparing these interim financial statements we have changed the format and
layout having regard to the principles set out in the Financial Reporting
Council's publication "Cutting Clutter". We have made these changes to make
Quintain's interim financial statements easier to follow and to be more
intuitive to provide readers with a clearer understanding of what drives the
financial performance of the Group. In doing so, the notes to the interim
financial statements have been grouped together under the following headings:



· Performance for the period (including segmental information and adjusted
profit)

· Property assets, joint ventures and associates

· Disposals

· Other assets and liabilities

· Funding (net debt and equity)





Primary statements

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated balance sheet

Consolidated statement of changes in equity

Consolidated cashflow statement



Section 1: Preparation of financial statements

1.1 Accounting policies

1.2 Significant judgements and estimates

1.3 Going concern



Section 2: Performance for the period

2.1 Adjusted results for the period

2.2 Segmental analysis

2.3 Revenue, cost of sales and gross profit

2.4 Property revaluation movements

2.5 Net finance expenses

2.6 Taxation

2.7 Net asset value per share



Section 3: Property assets, joint ventures and associates

3.1 Investment properties

3.2 Capital commitments

3.3 Investment in joint ventures



Section 4: Disposals

4.1 Disposals



Section 5: Other assets and liabilities

5.1 Non-current receivables

5.2 Current trade and other receivables

5.3 Other payables (non-current)

5.4 Current trade and other payables



Section 6: Funding

6.1 Bank loans and other borrowings





Consolidated Income Statement

For the six months ended 30 September 2012

                                    Notes  Unaudited        Unaudited  Audited

                                          Six months Six months ended     Year

                                               ended                     ended
                                             30 Sept          30 Sept 31 March

                                                2012             2011     2012
                                                  £m               £m       £m
Revenue                               2.3       24.4             24.2     45.4
Cost of sales                         2.3      (9.1)           (10.2)   (20.5)
Gross profit                                    15.3             14.0     24.9
Administrative expenses                       (11.6)           (10.7)   (22.0)
Operating profit before recognition                                         
of results from non-current asset
sales and revaluation                            3.7              3.3      2.9
Loss from sale of non-current                  (9.7)            (1.2)    (3.9)
assets
(Deficit) surplus on revaluation of
investment properties                 2.4     (24.6)         1.6   (40.5)
Share of profit from joint ventures   3.3        6.7              6.1      8.6
Share of loss from associates                      -            (0.1)    (0.1)
Operating (loss) profit                       (23.9)           9.7  (33.0)
Finance expense                       2.5      (8.0)            (9.3)   (16.7)
Finance income                        2.5        2.8              3.3      6.2
(Loss) profit before tax                      (29.1)              3.7   (43.5)
Tax credit for the period             2.6        6.6              0.5      8.0
(Loss) profit for the financial                                   4.2   (35.5)
period                                        (22.5)
Attributable to:
Equity shareholders                           (22.5)              4.2   (35.5)
Non-controlling interest                           -                -        -
                                              (22.5)              4.2   (35.5)


Earnings per share (pence):
Basic and diluted                              (4.3)              0.8    (6.8)





Consolidated Statement of Other Comprehensive Income

For the six months ended 30 September 2012



                                    Notes  Unaudited                   Audited

                                         Six months        Unaudited     Year

                                              ended Six months ended    ended
                                             30 Sept          30 Sept 31 March

                                                2012             2011     2012
                                                  £m               £m       £m
Foreign currency translation
differences                                        -            (0.4)    (0.4)
Deficit on revaluation of other
non-current investments                        (0.5)            (0.2)    (0.2)
Effective portion of changes in
fair value of cashflow hedges                  (0.9)            (5.0)    (4.4)
Recycling of fair value adjustment
on cashflow hedges                               4.7              4.4      9.1
Share of other comprehensive income
in joint ventures, net of tax         3.3      (1.1)              0.6      3.2
Tax on other comprehensive income     2.6      (1.3)              0.2      1.2
Other comprehensive income for the
financial period, net of tax                     0.9            (0.4)      8.5
(Loss) profit for the financial
period                                        (22.5)              4.2   (35.5)
Total comprehensive (loss) profit
for the financial period, net of
tax                                           (21.6)              3.8   (27.0)





Consolidated Balance Sheet

As at 30 September 2012

                               Notes  Unaudited        Unaudited Audited Year

                                      Six months Six months ended        ended

                                           ended
                                        30 Sept          30 Sept     31 March

                                            2012             2011         2012
                                             £m               £m           £m
Non-current assets
Investment properties             3.1      608.9            864.2        825.9
Owner-occupied properties,                   0.2              2.3          0.8
plant and equipment
Intangible assets                            7.2                -          7.5
Investment in joint ventures      3.3      339.4            267.0        273.6
Investment in associates                     1.4              1.4          1.5
Non-current receivables           5.1       61.3             14.1         14.9
Total non-current assets                 1,018.4          1,149.0      1,124.2
Current assets
Trading properties                          20.5             24.8         21.3
Trade and other receivables       5.2       32.7             25.0         23.1
Cash and cash equivalents                    9.8              3.9          7.5
Total current assets                        63.0             53.7         51.9
Total assets                             1,081.4          1,202.7      1,176.1
Current liabilities
Bank loans and other borrowings   6.1     (76.1)            (1.7)       (76.1)
Trade and other payables          5.4     (38.2)           (38.2)       (42.0)
Current tax liability                      (1.3)            (1.3)        (1.4)
Total current liabilities                (115.6)           (41.2)      (119.5)
Non-current liabilities
Bank loans and other borrowings   6.1    (397.3)          (532.6)      (464.2)
Deferred tax liability            2.6          -           (11.4)        (4.8)
Obligations under finance                 (11.1)           (11.1)       (11.1)
leases
Other payables                    5.3      (6.9)            (3.9)        (4.5)
Total non-current liabilities            (415.3)          (559.0)      (484.6)
Total liabilities                        (530.9)          (600.2)      (604.1)
Net assets                                 550.5            602.5        572.0
Equity
Issued capital                             130.2            130.2        130.2
Share premium account                      137.3            137.3        137.3
Other capital reserves                     107.0            107.5        107.5
Cashflow hedge reserve                    (17.8)           (28.1)       (19.2)
Retained earnings                          201.3            264.0        224.6
Own shares held reserve                    (7.8)            (8.7)        (8.7)
Equity shareholders' funds                 550.2            602.2        571.7
Non-controlling interest                     0.3              0.3          0.3
Total equity                               550.5            602.5        572.0
Net asset value per share         2.7
(pence):
Basic                                        106              116          110
Diluted                                      106              116          110



Consolidated Statement of Changes in Equity

For the six months ended 30 September 2012

               Issued   Share    Other Cashflow Retained     Own        Equity Non-controlling Unaudited
              capital          capital    hedge earnings  shares shareholders'        interest
                      premium reserves  reserve             held         funds                     Total
                      account                            reserve
                                                                                                  equity
                   £m      £m       £m       £m       £m      £m            £m              £m        £m
Balance 1
April 2012      130.2   137.3    107.5   (19.2)    224.6   (8.7)         571.7             0.3     572.0
Loss for the
financial
period              -       -        -            (22.5)       -        (22.5)               -    (22.5)
Other
comprehensive
income for
the

period, net
of tax              -       -    (0.5)      1.4        -       -           0.9               -       0.9
Shares
awarded to
employees
under

share based                                                                                     
payment
schemes             -       -        -        -    (0.9)     0.9             -               -         -
Costs
relating to
share-based
payment
schemes             -       -        -        -      0.1       -           0.1               -       0.1
Balance 30
September
2012            130.2   137.3    107.0   (17.8)    201.3   (7.8)         550.2             0.3     550.5





Consolidated Statement of Changes in Equity

For the six months ended 30 September 2011

               Issued   Share    Other Cashflow Retained     Own        Equity Non-controlling Unaudited
              capital          capital    hedge earnings  shares shareholders'        interest
                      premium reserves  reserve             held         funds                     Total
                      account                            reserve
                                                                                                  equity
                   £m      £m       £m       £m       £m      £m            £m              £m        £m
Balance 1       130.2   137.3    108.1   (28.3)    260.6   (9.6)         598.3             0.3     598.6
April 2011
Profit for          -       -        -        -      4.2       -           4.2               -       4.2
the financial
period
Other                                                                                          
comprehensive
income for          -       -    (0.6)      0.2        -       -         (0.4)               -     (0.4)
the

period, net
of tax
Shares                                                                                         
awarded to
employees           -       -        -        -    (0.9)     0.9             -               -         -
under

share based
payment
schemes
Costs                                                                                          
relating to
share-based         -       -        -        -      0.1       -           0.1               -       0.1
payment

schemes
Balance 30      130.2   137.3    107.5   (28.1)    264.0   (8.7)         602.2             0.3     602.5
September
2011



Consolidated Statement of Changes in Equity

For the year ended 31 March 2012

               Issued   Share    Other Cashflow Retained     Own        Equity Non-controlling       Audited
                      premium             hedge earnings  shares shareholders'        interest
              capital account  capital  reserve                          funds                 Total
                              reserves                      held                                      equity

                                                         reserve
                   £m      £m       £m       £m       £m      £m            £m              £m            £m
Balance     1   130.2   137.3    108.1   (28.3)    260.6   (9.6)         598.3             0.3         598.6
April 2011
Loss for  the       -       -        -        -   (35.5)       -        (35.5)               -        (35.5)
financial
year
Other                                                                                              
comprehensive
income    for       -       -    (0.6)      9.1        -       -           8.5               -           8.5
the

year, net  of 
tax
Shares
awarded to
employees
under

share-based
payment
schemes             -       -        -        -    (0.9)     0.9             -               -             -
Costs                                                                                              
relating to
share-based         -       -        -        -      0.4       -           0.4               -           0.4

payment
schemes
Balance 31      130.2   137.3    107.5   (19.2)    224.6   (8.7)         571.7             0.3         572.0
March 2012





Consolidated Cashflow Statement

For the six months ended 30 September 2012

                                          Unaudited        Unaudited  Audited

                                          Six months Six months ended     Year

                                               ended                     ended
                                            30 Sept          30 Sept 31 March

                                                2012             2011     2012
                                                 £m               £m       £m
Operating activities
(Loss) profit for the financial period        (22.5)              4.2   (35.5)
Adjustments for:
Depreciation of plant and equipment                -              0.4      0.6
Amortisation of intangibles                      0.3                -        -
Costs relating  to share-based  payment                           0.1
schemes                                          0.1                       0.4
Net finance expenses                             5.2              6.0     10.5
Foreign exchange gains                             -            (0.5)    (0.4)
Loss on sale of non-current assets               9.7              1.2      3.9
Deficit (surplus) on revaluation of                                         
investment properties
                                                24.6            (1.6)     40.5
Share of profit from joint ventures            (6.7)            (6.1)    (8.6)
Share of loss from associates                      -              0.1      0.1
Provision  in  book  value  of  trading                           1.2
properties                                         -                       2.9
Tax on continuing operations                   (6.6)            (0.5)    (8.0)
                                                 4.1              4.5      6.4
Increase in trade and other receivables        (6.4)            (3.8)    (1.8)
Increase in trade and other payables             3.9              3.5      4.0
Decrease    (increase)    in    trading                         (3.1)
properties                                       0.7                     (1.5)
Cash generated from operations                   2.3              1.1      7.1
Interest paid                           i      (8.1)           (21.9)   (30.7)
Interest received                                3.1              1.1      1.6
Tax paid                                           -                -      0.1
Net cashflow from operating activities         (2.7)         (19.7)   (21.9)
Investing activities
Proceeds from sale of investment                                  4.7
properties                                      91.6                      49.6
Purchase and development of investment
properties                                    (39.3)           (54.2)   (95.5)
Purchase of owner-occupied properties,                                      
plant and equipment
                                               (0.1)                -    (0.1)
Refund of capital from other
non-current investments                            -                -      0.5
Purchase of subsidiary net of cash                                  -
acquired                                       (4.1)                     (5.5)
Capital invested in joint ventures            (10.3)                -        -
Loans advanced to joint ventures               (2.8)           (45.1)   (45.3)
Capital and loan repayments received                                
from joint ventures
                                                36.5                -      1.5
Distributions received from joint                                 2.0
ventures                                         1.5                       3.5
Net cashflow from investing activities          73.0           (92.6)   (91.3)
Financing activities
Proceeds from new borrowings                       -            160.5    110.5
Repayment of borrowings                       (67.5)           (62.8)    (7.9)
Payment of loan issue costs                    (0.1)            (0.9)    (0.9)
Payment of finance lease liabilities           (0.4)            (0.4)    (0.8)
Net cashflow from financing activities        (68.0)             96.4    100.9
Net increase/(decrease) in cash and
cash equivalents                                 2.3           (15.9)   (12.3)
Cash and cash equivalents at start of                            19.8
period                                           7.5                      19.8
Cash and cash equivalents at end of                               3.9
period                                           9.8                       7.5



Notes:

i. In the six months ended 30 September 2011, interest paid included a payment
of £12.4m (year ended 31 March 2012: £12.4m) relating to the repricing of  the 
Group's swaps. 





Notes to the accounts

For the six months ended 30 September 2012



Section 1: Preparation of financial statements



1.1 Accounting policies



The financial  information  contained  in  this  half  year  report  does  not 
constitute statutory accounts as defined in  section 435 of the Companies  Act 
2006. The results for the year ended 31 March 2012 are an abridged version  of 
the full accounts for that year, which received an unqualified report from the
auditors, did not  contain a statement  under section  498 (2) or  (3) of  the 
Companies Act 2006 or include a reference to any matter to which the  auditors 
drew attention by way of matter  of emphasis without qualifying their  report, 
and have been  filed with  the Registrar  of Companies.  The annual  financial 
statements are prepared in  accordance with IFRSs as  adopted by the  European 
Union. The condensed set of financial  statements included in this report  has 
been prepared in  accordance with  IAS 34, 'Interim  Financial Reporting',  as 
adopted by the European Union.



Significant accounting policies



The same accounting policies, presentation  and key sources of estimation  are 
followed in the condensed set of financial statements as applied to the latest
audited annual financial statements.



1.2 Significant judgements and estimates



The preparation of the  interim financial statements  under IFRS requires  the 
Board  to  make  judgements,  estimates   and  assumptions  that  affect   the 
application  of  accounting  policies,  the  reported  amount  of  assets  and 
liabilities at the date of the financial statements and the reported amount of
revenue and expense during the reporting period. The estimates and  associated 
assumptions are based on historical experience and various other factors  that 
are believed to be  reasonable under the circumstances,  the results of  which 
form the basis  of making the  judgements that are  not readily apparent  from 
other sources. However, the actual results may differ from the estimates.



In preparing these financial statements the key judgements and estimates  made 
by the Board are consistent with those applied in the financial statements  as 
of, and for the year ended, 31 March 2012.



There have been no material changes to reportable contingent liabilities since
31 March 2012 and the Group's financial performance does not suffer materially
from seasonal fluctuations.



1.3 Going concern



The Group financial statements have been prepared on a going concern basis.
This policy is supported by the detailed cashflow forecasts prepared by the
Group at 30 September 2012 which show that there are adequate undrawn
facilities to finance all committed capital expenditure and other outflows and
thus the Group will be able to meet its liabilities as they fall due for the
foreseeable future.

Section 2: Performance for the period



2.1 Adjusted results for the period



Adjusted results for the year are provided to enable readers of the accounts
to differentiate between items of an underlying operating nature and those
relating to capital or revaluations.

                              Unaudited                 Unaudited                   Audited

                              six months                six months                      Year

                                   ended                     ended                     ended

                            30 Sept 2012              30 Sept 2011             31 March 2012
              Adjusted Capital^1  Total Adjusted Capital^1  Total Adjusted Capital^1  Total
                    £m        £m     £m       £m        £m     £m       £m        £m     £m
Revenue            24.4         -   24.4     24.2         -   24.2     45.4         -   45.4
Cost of sales     (9.1)         -  (9.1)    (9.0)     (1.2) (10.2)   (17.6)     (2.9) (20.5)
Gross profit                                 15.2     (1.2)   14.0
(loss)             15.3         -   15.3                               27.8     (2.9)   24.9
Administrative                             (10.7)         - (10.7)
expenses         (11.6)         - (11.6)                             (22.0)         - (22.0)
Operating
profit (loss)
before
recognition of
results from

non-current
asset sales
and
revaluation         3.7         -    3.7      4.5     (1.2)    3.3      5.8     (2.9)    2.9
Loss from the
sale of

non-current
assets                -     (9.7)  (9.7)        -     (1.2)  (1.2)        -     (3.9)  (3.9)
(Deficit)
surplus on
revaluation of
investment
properties            -    (24.6) (24.6)        -       1.6    1.6        -    (40.5) (40.5)
Share of
profit from
joint ventures      2.9       3.8    6.7      1.0       5.1    6.1      4.4       4.2    8.6
Share of loss
from
associates            -         -      -        -     (0.1)  (0.1)        -     (0.1)  (0.1)
Operating
profit (loss)
before finance
expenses and
tax                 6.6    (30.5) (23.9)      5.5       4.2    9.7     10.2    (43.2) (33.0)
Interest
payable           (5.1)         -  (5.1)    (5.5)         -  (5.5)   (10.6)         - (10.6)
Change of fair
value of
derivative
financial
instruments           -     (2.9)  (2.9)        -     (3.8)  (3.8)        -     (6.1)  (6.1)
Finance
expenses          (5.1)     (2.9)  (8.0)    (5.5)     (3.8)  (9.3)   (10.6)     (6.1) (16.7)
Finance Income      2.8         -    2.8      3.3         -    3.3      6.2         -    6.2
Net finance
expenses          (2.3)     (2.9)  (5.2)    (2.2)     (3.8)  (6.0)    (4.4)     (6.1) (10.5)
Profit (loss)
before tax          4.3    (33.4) (29.1)      3.3       0.4    3.7      5.8    (49.3) (43.5)
Tax credit
(charge) for
the period            -       6.6    6.6    (0.1)       0.6    0.5    (0.1)       8.1    8.0
Profit (loss)
for the
financial
period
attributable
to equity
shareholders        4.3    (26.8) (22.5)      3.2       1.0    4.2      5.7    (41.2) (35.5)



¹For these purposes revaluation movements and trading property provisions are
included with capital items.









2.2 Segmental analysis



The Group has seven reportable segments. The Urban Regeneration (UR) segments
include Wembley, Greenwich and Other UR. The Quintain Asset Management (QAM)
segments include Quercus, iQ, SeQuel and Other QAM. No customer accounts for
more than 10% of the Group's revenue. All of the Group's revenues are derived
from external customers. There are no inter-segmental revenues. As disclosed
at 31 March 2012, following a revision to the reporting provided to the Board,
the Group's segment disclosures have been amended. The comparative period's
segment results for period ended September 2011 and balance sheet has been
restated accordingly.



The segmental analysis of the Group's results for the six months ended 30
September 2012 was as follows:

               Wembley Greenwich Other  Total Quercus   iQ SeQuel Other Total  Total

                                    UR     UR                       QAM   QAM
                    £m        £m    £m     £m      £m   £m     £m    £m    £m     £m
Revenue           12.1       0.7   1.2   14.0     1.3  1.4    4.5   3.2  10.4   24.4
Cost of sales    (4.4)         - (0.6)  (5.0)   (0.3)    -  (1.3) (2.5) (4.1)  (9.1)
Gross profit       7.7       0.7   0.6    9.0     1.0  1.4    3.2   0.7   6.3   15.3
(Loss)  profit 
from the  sale 
of non-current

assets           (1.2)    (10.7)     - (11.9)       -    -      -   2.2   2.2  (9.7)
(Deficit)
surplus on
revaluation of

investment
properties      (14.4)       0.1 (1.5) (15.8)       -    -  (6.9) (1.9) (8.8) (24.6)
Share       of 
profit  (loss) 
from     joint 
ventures           0.1     (1.6)     -  (1.5)   (0.8)  8.8      -   0.2   8.2    6.7
Operating
(loss)  profit 
before

administrative
expenses         (7.8)    (11.5) (0.9) (20.2)     0.2 10.2  (3.7)   1.2   7.9 (12.3)
Administrative
expenses                                                                      (11.6)
Net    finance 
expenses                                                                       (5.2)
Loss    before 
tax                                                                           (29.1)
Adjusted           7.8       0.3   0.6    8.7     2.7  2.6    3.2   1.0   9.5   18.2
Capital^1       (15.6)    (11.8) (1.5) (28.9)   (2.5)  7.6  (6.9)   0.2 (1.6) (30.5)
Operating
(loss)  profit 
before

administrative
expenses         (7.8)    (11.5) (0.9) (20.2)     0.2 10.2  (3.7)   1.2   7.9 (12.3)



¹For these purposes revaluation movements and trading property provisions are
included with capital items.





2.2 Segmental analysis (continued)



The segmental analysis of the Group's results for the six months ended 30
September 2011 was as follows:

            Wembley Greenwich Other Total Quercus  iQ SeQuel      Other Total  Total

                                 UR    UR                           QAM   QAM
                 £m        £m    £m    £m      £m  £m     £m         £m    £m     £m
Revenue        12.7       0.1   0.6  13.4     2.2 1.2    4.4        3.0  10.8   24.2
Cost     of   (5.5)     (0.1) (1.4) (7.0)   (1.0)   -  (0.9)      (1.3) (3.2) (10.2)
sales
Gross           7.2         - (0.8)   6.4     1.2 1.2    3.5        1.7   7.6   14.0
profit
(loss)
(Loss)                                                The story
profit from                                                  has been
the sale of   (1.0)         -     - (1.0)       -   -    0.3 truncated,
non-current                                                 
[TRUNCATED]