Mucklow(A&)Group. - Half Yearly Report

Mucklow (A ∓ J) Group plc

Half-Yearly Report

22 February 2012

Embargoed: 7.00am

Rupert Mucklow, Chairman commented: "I am pleased to report good progress being made in the first six months of our financial year, with a 19% improvement in underlying pre-tax profit and a 3% increase in the interim dividend."

Financial Summary

for the six months ended 31 December 2011

Income statement	Six (SNP: ^SIXY - news) months ended	Six months ended
	31 December 2011	31 December 2010
Underlying pre-tax profit (£m) (1)	6.8	5.7
Net (Frankfurt: A0Z22E - news) rental income received (£m)	9.7	8.5
Basic EPS (p)	3.15	8.02
EPRA EPS (p) (2)	11.30	9.64
Interim dividend per share (p)	8.52	8.27

Balance sheet	31 December 2011	30 June 2011
Net assets (£m)	184.3	188.6
Basic NAV per share (p)	306	314
EPRA NAV per share (p) (3)	309	318
Net debt (£m)	61.6	67.7
Gearing (%)	33	36

Property portfolio	31 December 2011	30 June 2011
Occupancy rate (%)	93.5	92.7
Current passing rent (£m pa)	19.9	19.9
Portfolio value (£m) (4)	255.8	261.3
Initial yield on investment properties (%)	7.8	7.5
Equivalent yield (%)	8.5	8.3

The interim dividend of £5,127,280 will be paid on 29 June 2012 to holders registered on 1 June 2012.

(1)	See the investment/development column in the underlying financial performance tables in note 7 for details.
(2)	Excludes the profit on disposal of investment and trading properties and the revaluation of investment and development properties and financial instruments. See note 8.
(3)	Excludes the fair value of financial instruments and includes the surplus on trading properties. See note 8.
(4)	See note 9.

For further information please contact:

Rupert Mucklow, Chairman Tel: 0121 504 2121 Fiona Tooley Tel: 0121 362 4009

David Wooldridge, Finance Director Tel: 0121 504 2108 Citigate Dewe Rogerson

A ∓ J Mucklow Group plc

Chairman's Statement

50^th Anniversary

In April 2012, A ∓ J Mucklow Group will be celebrating 50 years as a listed company. Its (Euronext: ALITS.NX - news) principal objective has always been to deliver steady, long-term income and capital growth for its shareholders.

The Group's financial performance has been exemplary since it was floated on the London Stock Exchange (LSE: LSE.L - news) in 1962. The ordinary dividend has increased in 45 out of the last 50 years and never been cut.

An investment of £1,000 in Mucklow shares in 1962 would today be worth around £1.6m, assuming dividends were reinvested. The total shareholder return has averaged over 16% per annum for the last 50 years‡.

Current overview

I am pleased to report good progress being made in the first six months of our financial year, with a 19% improvement in underlying pre-tax profit and a 3% increase in the interim dividend.

The occupancy level has risen to 93.5%, despite the current economic environment; however, property values have started to drift, reflecting a decline in investor appetite for risk and uncertainty in the debt markets.

Results for the six months to 31 December 2011

The underlying pre-tax profit†, which excludes revaluation movements and profits from the sale of investment and trading properties, increased by £1.1m during the first six months to £6.8m (2010: £5.7m). Net rental income received from investment properties rose by £1.2m to £9.7m (2010: £8.5m).

Pre-tax profit for the half year was lower at £1.9m (2010: £4.8m). The reduction was mainly due to a £6.6m deficit on the revaluation of investment properties and development land at 31 December 2011 (2010: deficit £1.0m). A trading profit of £1.5m was realised in the first six months (2010: £0.0m).

EPRA net asset value per share* reduced marginally during the half year from 318p to 309p per share as a result of the decline in property values. Shareholders' funds were £184.3m at 31 December 2011 (30 June 2011: £188.6m), while borrowings net of cash amounted to £61.6m, representing 33% of shareholders' funds (30 June 2011: £67.7m and 36%).

Dividend

The directors have declared an interim dividend of 8.52p per Ordinary share, an increase of 3% over last year (31 December 2010: 8.27p), which will be paid as a PID on 29 June 2012 to shareholders on the register at the close of business on 1 June 2012.

Property review

After a very quiet summer, letting activity surprisingly picked up a little before Christmas and has continued into the New Year. As a consequence, we managed to reduce our void rate to 6.5% at 31 December 2011 (30 June 2011: 7.3%), our lowest level since 2007.

Most of our lettings were to existing tenants, looking to consolidate or expand into modern properties. A shortage of good quality industrial space in the Midlands continues to help us maintain rental levels and a high occupancy rate.

The regional investment market was relatively quiet during the first half year, with few properties becoming available or transactions being concluded. Towards the end of the period, there was an increase in the number of older, secondary properties being released by Banks and distressed sellers, at heavily discounted prices, which started to affect property values.

The yield gap between prime and non-prime assets is widening, as concerns grow over the risk of secondary properties becoming vacant and potentially difficult to re-let. The values of modern properties with short leases (less than 5 years) have also deteriorated over the last few months, due to a lack of available bank finance to fund short-term income.

Prime (Berlin: 48P.BE - news) properties with long leases (20 years +) are hotly contested by institutional investors, but very little stock is available. A modern building, in a prime location, could be valued on a yield of between 5% and 15% in the current market, depending on the lease terms.

DTZ Debenham Tie Leung reviewed the value of our investment properties at 31 December 2011. The investment portfolio, including development land was valued at £255.8m, which showed a revaluation deficit for the period of £6.7m (2.5%).

The initial yield on our investment properties was 7.8% (30 June 2011: 7.5%), increasing to 8.1% on the expiry of rent free periods, while the equivalent yield was 8.5% (30 June 2011: 8.3%).

We did not acquire any investment properties during the period. However, since the half year end, we have bought a 15,800 sq ft office building in Coventry, with 81 car parking spaces, for £1.5m. The property is adjacent to an existing holding and was built in 2000 to a high specification and is currently let at a rent of £237,500 pa, on a lease expiring in 2015. The initial yield was 14.7%.

A joint outline planning application with Helical Retail has been submitted for a mixed use development including our 20 acre site at Tyseley, in Birmingham. The combined area of the land is 33 acres and the proposal is to regenerate the area with much needed highway improvements; a supermarket; non food retail; housing and industrial units, which would create over 1,000 jobs.

DTZ Debenham Tie Leung also reviewed the value of our trading properties at 31 December 2011. The total value was £1.9m, which showed an unrecognised surplus of £1.4m over book value. We sold a farm at Penn, near Wolverhampton, in September 2011 for £1.7m, realising a trading profit of £1.5m. The property comprised a farm house, barn and approximately 270 acres of land.

Our total net borrowings reduced at our half year end, from £67.7m at the beginning of the period, to £61.6m at 31 December 2011. Undrawn banking facilities totalled £21.5m and net debt to equity gearing was 33% (30 June 2011: 36%).

Principal risks and uncertainties

There have been no changes to the principal risks and uncertainties of the Group, which remain as disclosed on page 20 of the Annual Report for the year ended 30 June 2011.

Outlook

We are entering our second half century as a listed company in very good shape. We are not anticipating any significant change in occupancy levels during the next six months and remain on target for another satisfactory year to 30 June 2012.

Property values may fluctuate a little during these uncertain times, but current market conditions provide us with opportunities to acquire modern investment properties on attractive yields and allow us to continue to maximise income and value from our other assets.

Rupert J Mucklow

Chairman

21 February 2012

‡ Source: Daily Official List and Datastream.

† See the investment/development column in the underlying financial performance tables in note 7 for details.

* EPRA (European Public Real Estate Association) net asset value, including the surplus on trading properties and excluding the mark to market of debt and the fair value of financial instruments. See note 8 for details.

Group Condensed Statement of Comprehensive Income

for the six months to 31 December 2011

			Unaudited	Unaudited	Audited
			six months to	six months to	year to
			31 December 2011	31 December 2010	30 June 2011
	Notes		£000	£000	£000
Revenue	2		11,827	8,757	18,349
Gross rental income relating to investment properties			10,127	8,752	18,344
Property outgoings			(460)	(263)	(645)
Net rental income relating to investment properties			9,667	8,489	17,699
Proceeds on sale of trading properties			1,700	5	5
Carrying value of trading properties sold			(165)	-	-
Property outgoings relating to trading properties			(5)	(2)	(2)
Net income from trading properties			1,530	3	3
Administration expenses			(1,418)	(1,459)	(2,884)
Operating profit before net (losses)/gains on investments			9,779	7,033	14,818
Profit on disposal of investment properties			238	15	1,348
Revaluation of investment and development properties			(6,558)	(955)	(369)
Operating profit	3		3,459	6,093	15,797
Net finance costs	4		(1,562)	(1,281)	(2,905)
Profit before tax	3		1,897	4,812	12,892
Tax (charge)/credit	5		(3)	-	576
Profit for the financial period			1,894	4,812	13,468
Other comprehensive income:
Revaluation of owner occupied property			(128)	(14)	(11)
Total (Other OTC: TTFNF.PK - news) comprehensive income for the period			1,766	4,798	13,457

All operations are continuing.

Basic and diluted earnings per share

8

3.15p

8.02p

22.43p

Group Condensed Statement of Changes in Equity

for the six months ended 31 December 2011

	Ordinary	Capital		Share-based
	share	redemption	Revaluation	payment	Retained	Total
	capital	reserve	reserve	reserve	earnings	equity
	£000	£000	£000	£000	£000	£000
Balance at 1 July 2011	15,021	11,162	262	261	161,912	188,618
Profit for the period	-	-	-	-	1,894	1,894
Other comprehensive income	-	-	(128)	-	-	(128)
Total comprehensive income	-	-	(128)	-	1,894	1,766
Share-based payment	-	-	-	86	-	86
Ordinary share issue	23	-	-	-	-	23
Exercise of share options	-	-	-	(154)	154	-
Dividends paid	-	-	-	-	(6,162)	(6,162)
Balance 31 December 2011 (unaudited)	15,044	11,162	134	193	157,798	184,331
Balance 1 July 2010	14,998	11,162	273	239	159,236	185,908
Profit for the period	-	-	-	-	4,812	4,812
Other comprehensive income	-	-	(14)	-	-	(14)
Total comprehensive income	-	-	(14)	-	4,812	4,798
Share-based payment	-	-	-	82	-	82
Ordinary share issue	23	-	-	-	-	23
Exercise of share options	-	-	-	(140)	140	-
Dividends paid	-	-	-	-	(5,963)	(5,963)
Balance 31 December 2010 (unaudited)	15,021	11,162	259	181	158,225	184,848
Balance 1 July 2010	14,998	11,162	273	239	159,236	185,908
Profit for the period	-	-	-	-	13,468	13,468
Other comprehensive income	-	-	(11)	-	-	(11)
Total comprehensive income	-	-	(11)	-	13,468	13,457
Share-based payment	-	-	-	162	-	162
Ordinary share issue	23	-	-	-	-	23
Exercise of share options	-	-	-	(140)	140	-
Dividends paid	-	-	-	-	(10,932)	(10,932)
Balance 30 June 2011 (audited)	15,021	11,162	262	261	161,912	188,618

Group Condensed Balance Sheet

at 31 December 2011

		Unaudited	Unaudited	Audited
		31 December	31 December	30 June
		2011	2010	2011
	Notes	£000	£000	£000
Non-current assets
Investment and development properties	9	254,814	247,763	260,200
Property, plant and equipment		1,240	1,421	1,404
Derivative financial instruments		56	324	164
Trade and other receivables		373	559	508
		256,483	250,067	262,276
Current assets
Trading properties		447	553	559
Trade and other receivables		2,195	3,546	3,066
Cash and cash equivalents		6,571	6,774	1,453
		9,213	10,873	5,078
Total assets		265,696	260,940	267,354
Current liabilities
Trade and other payables		(12,909)	(12,496)	(8,693)
Tax liabilities		(294)	-	(914)
		(13,203)	(12,496)	(9,607)
Non-current liabilities
Borrowings		(68,162)	(63,596)	(69,129)
Total liabilities		(81,365)	(76,092)	(78,736)
Net assets		184,331	184,848	188,618
Equity
Called up ordinary share capital		15,044	15,021	15,021
Revaluation reserve		134	259	262
Share-based payment reserve		193	181	261
Redemption reserve		11,162	11,162	11,162
Retained earnings		157,798	158,225	161,912
Total equity		184,331	184,848	188,618
Net asset value per share
- Basic and diluted	8	306p	308p	314p
- EPRA	8	309p	312p	318p

Group Condensed Cash Flow Statement

for the six months to 31 December 2011

		Unaudited	Unaudited	Audited
		six months to	six months to	year to
		31 December	31 December	30 June
		2011	2010	2011
		£000	£000	£000
Cash flows from operating activities
Operating profit		3,459	6,093	15,797
Adjustments for non-cash items
-	Unrealised net revaluation losses on investment and development properties	6,558	955	369
-	Profit on disposal of investment properties	(238)	(15)	(1,348)
-	Depreciation	44	50	97
-	Share-based payment	86	82	162
-	Profit on sale of fixed assets	-	(3)	(7)
-	Other non-cash items	(1,165)	(1,278)	(1,403)
Other movements arising from operations
-	Decrease/(increase) in trading properties	112	-	(11)
-	Decrease in receivables	970	1,439	699
-	(Decrease)/increase in payables	(2,606)	(1,000)	1,812
Net cash inflow from operations		7,220	6,323	16,167
Interest received		40	-	218
Interest paid		(1,398)	(1,189)	(2,635)
Preference dividends paid		(24)	(24)	(47)
Corporation (BSE: CORPBANK.BO - news) tax refunded		34	-	838
Net cash inflow from operating activities		5,872	5,110	14,541
Cash flows from investing activities
Acquisition and property development		(7)	(14,084)	(26,210)
Sales of investment properties		238	1,865	4,838
Expenditure on property, plant and equipment		(8)	(25)	(49)
Net cash inflow/(outflow) from investing activities		223	(12,244)	(21,421)
Cash flows from financing activities
Net (decrease)/increase in borrowings		(1,000)	13,000	18,500
Equity share issue		23	23	23
Payment for derivative financial instrument		-	-	(143)
Equity dividends paid		-	-	(10,932)
Net cash (outflow)/inflow from financing activities		(977)	13,023	7,448
Net increase in cash and cash equivalents		5,118	5,889	568
Cash and cash equivalents at beginning of period		1,453	885	885
Cash and cash equivalents at end of period		6,571	6,774	1,453

Notes to the Half-Yearly Report

1 Accounting policies

Basis of preparation of half-yearly financial information

The annual financial statements of A ∓ J Mucklow Group plc are prepared in accordance with IFRS's 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 and the disclosure requirements of the Listing Rules.

The Group's condensed set of financial statements for the period ended 31 December 2011 were authorised for issue by the Board of directors on 21 February 2012. The half-yearly financial information is unaudited but has been reviewed by Deloitte LLP and their report appears on page 17 of this half-yearly report.

The information for the year ended 30 June 2011 does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditor reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The condensed set of financial statements are prepared under the historical cost convention, except for the revaluation of investment and development properties and owner-occupied properties and deferred tax thereon and certain financial assets, with consistent accounting policies to the prior year.

As at 31 December 2011 the Group had £21.5m of undrawn banking facilities, comprising the £5.0m overdraft and £16.5m of the £40.0m 2014 Revolving Credit Facility, and had fully drawn down £20.0m from its HSBC (LSE: HSBA.L - news) 2014 Term Loan. The Group's £5.0m overdraft is the only banking facility due for renewal within 12 months of the date of this document. The £20.0m 2023 Lloyds Bank Term Loan remains fully drawn. Given these facilities, the Group's low gearing level of 33% and £110.2m of unencumbered properties, significant capacity exists to raise additional finance or to provide additional security for existing facilities, should property values fall. Accordingly, the directors continue to adopt the going concern basis in preparing the condensed set of financial statements.

The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Group's latest annual audited financial statements, except that in accordance with IAS 1 "Presentation of Financial Statements" the Group has elected to present a single statement of comprehensive income.

2 Revenue

	Unaudited	Unaudited	Audited
	six months to	six months to	year to
	31 December	31 December	30 June
	2011	2010	2011
	£000	£000	£000
Total rental income from investment and development properties	10,127	8,752	18,344
Income received from trading properties	1,700	5	5
	11,827	8,757	18,349
Finance income (note 4)	40	8	233
Total revenue	11,867	8,765	18,582

3 Segmental analysis

The Group has two reportable segments: investment and development properties and trading property.

		Unaudited	Unaudited	Audited
		six months to	six months to	year to
		31 December	31 December	30 June
		2011	2010	2011
		£000	£000	£000
Investment and development properties
-	Net rental income	9,667	8,489	17,699
-	Profit on disposal	238	15	1,348
-	Deficit on revaluation of investment and development properties	(6,558)	(955)	(369)
		3,347	7,549	18,678
Trading properties
-	Income received from trading properties	1,700	5	5
-	Carrying value on sale	(165)	-	-
-	Property outgoings	(5)	(2)	(2)
		1,530	3	3
Net income from property portfolio before administration expenses		4,877	7,552	18,681
Administration expenses		(1,418)	(1,459)	(2,884)
Operating profit		3,459	6,093	15,797
Net financing costs		(1,562)	(1,281)	(2,905)
Profit before tax		1,897	4,812	12,892

The property revaluation deficit has been recognised as follows:

		Unaudited	Unaudited	Audited
		six months to	six months to	year to
		31 December	31 December	30 June
		2011	2010	2011
		£000	£000	£000
Statement of comprehensive income
-	Investment properties	(6,558)	(954)	(369)
-	Development properties	-	(1)	-
		(6,558)	(955)	(369)
Other comprehensive income
-	Owner-occupied properties	(128)	(14)	(11)
Total revaluation deficit for the period		(6,686)	(969)	(380)

3 Segmental analysis (continued)

Segmental information on assets and liabilities, including a reconciliation to the results reported in the group condensed balance sheet, are as follows:

		Unaudited	Unaudited	Audited
		six months to	six months to	year to
		31 December	31 December	30 June
		2011	2010	2011
		£000	£000	£000
Balance sheet - segment assets
Investment and development properties
-	Segment assets	256,597	251,082	262,941
-	Segment liabilities	(4,471)	(4,453)	(5,655)
-	Net borrowings	(61,591)	(56,822)	(67,676)
		190,535	189,807	189,610
Trading properties
-	Segment assets	447	553	559
-	Segment liabilities	-	-	-
		447	553	559
Other activities
-	Unallocated assets	2,081	2,531	2,401
-	Unallocated liabilities	(8,732)	(8,043)	(3,952)
		(6,651)	(5,512)	(1,551)
Net assets		184,331	184,848	188,618
Capital expenditure
Investment and development properties		7	13,432	27,007
Other activities		8	51	84
		15	13,483	27,091
Depreciation
Other activities		44	50	97
		44	50	97

All operations and income are derived from the United Kingdom and therefore no geographical segmental information is provided.

4 Net finance costs

	Unaudited	Unaudited	Audited
	six months to	six months to	year to
	31 December	31 December	30 June
	2011	2010	2011
	£000	£000	£000
Finance cost on:
Debenture stock	242	242	483
Preference share dividend	24	24	47
Capitalised interest	-	(55)	(55)
Fair value movement of financial instrument	108	35	338
Bank overdraft and loan interest payable	1,228	1,043	2,325
Total finance costs	1,602	1,289	3,138
Finance income on:
Short-term deposits	-	1	16
Other interest receivable	40	7	217
Total finance income	40	8	233
Net finance costs	1,562	1,281	2,905

5 Taxation

		Unaudited	Unaudited	Audited
		six months to	six months to	year to
		31 December	31 December	30 June
		2011	2010	2011
		£000	£000	£000
Tax charge/(credit)
Current tax
-	Corporation tax	143	-	-
-	Prior year adjustment	(140)	-	(576)
Total tax charge/(credit) recognised in the statement of comprehensive income		3	-	(576)

There is no deferred tax charge or credit for any of the periods stated.

The Company elected to become a Real Estate Investment Trust (REIT) with effect from 1 July 2007. As a result of this, rental income and capital gains of the REIT business are not subject to tax. The tax charge for the six months ended 31 December 2011 shown above represents the tax payable on the non-REIT business, mainly profits on the disposal of trading properties and interest receivable.

6 Dividends

	Unaudited	Unaudited	Audited
	six months to	six months to	year to
	31 December	31 December	30 June
	2011	2010	2011
	£000	£000	£000
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 30 June 2011 of 10.24p (2010: 9.94p) per share	6,162	5,963	5,963
Interim dividend for the year ended 30 June 2011 of 8.27p per share	-	-	4,969
	6,162	5,963	10,932

The directors propose an interim dividend of 8.52p (2010: 8.27p) per Ordinary share. This dividend has not been included as a liability in these financial statements.

The interim dividend will be paid on 29 June 2012 to shareholders on the register at the close of business on 1 June 2012.

7 Underlying financial performance

Presented below is a non-statutory analysis of the underlying rental performance before tax, as shown in the investment/development column, which excludes the profit on sale of investment and trading properties and other items (capitalised interest, property revaluation movements and the fair value movement on derivative financial instruments). The directors consider that this further analysis of our statement of comprehensive income gives shareholders a useful comparison of our underlying performance for the periods shown in the condensed set of financial statements.

	Unaudited	Unaudited Investment/	Unaudited Trading	Unaudited Other
	Total	development	properties	Items
Six months to 31 December 2011	£000	£000	£000	£000
Rental income	10,127	10,127	-	-
Property outgoings	(460)	(460)	-	-
Net rental income	9,667	9,667	-	-
Proceeds on sale of trading properties	1,700	-	1,700	-
Carrying value of trading properties sold	(165)	-	(165)	-
Property outgoings on trading properties	(5)	-	(5)	-
Net income from trading properties	1,530	-	1,530	-
Administration expenses	(1,418)	(1,418)	-	-
Operating profit before net losses on investment	9,779	8,249	1,530	-
Net losses on revaluation	(6,558)	-	-	(6,558)
Profit on disposal of investment properties	238	-	-	238
Operating profit	3,459	8,249	1,530	(6,320)
Finance income	40	40	-	-
Gross finance costs	(1,494)	(1,494)	-	-
Fair value movement on derivative financial instruments	(108)	-	-	(108)
Total finance costs	(1,602)	(1,494)	-	(108)
Profit before tax	1,897	6,795	1,530	(6,428)

7 Underlying financial performance (continued)

	Unaudited	Unaudited Investment/	Unaudited Trading	Unaudited Other
	Total	development	properties	Items
Six months to 31 December 2010	£000	£000	£000	£000
Rental income	8,752	8,752	-	-
Property outgoings	(263)	(263)	-	-
Net rental income	8,489	8,489	-	-
Proceeds on sale of trading properties	5	-	5	-
Property outgoings on trading properties	(2)	-	(2)	-
Net income from trading properties	3	-	3	-
Administration expenses	(1,459)	(1,459)	-	-
Operating profit before net losses on investment	7,033	7,030	3	-
Net losses on revaluation	(955)	-	-	(955)
Profit on disposal of investment properties	15	-	-	15
Operating profit	6,093	7,030	3	(940)
Finance income	8	8	-	-
Gross finance costs	(1,309)	(1,309)	-	-
Capitalised interest	55	-	-	55
Fair value movement on derivative financial instruments	(35)	-	-	(35)
Total finance costs	(1,289)	(1,309)	-	20
Profit before tax	4,812	5,729	3	(920)

8 Earnings per share and net asset value per share

Earnings per share

The basic and diluted earnings per share of 3.15p (31 December 2010: 8.02p) has been calculated on the basis of the weighted average of 60,102,542 (31 December 2010: 59,995,572) Ordinary shares and a profit of £1.89m (31 December 2010: £4.81m).

The European Public Real Estate Association (EPRA) has issued recommended bases for the calculation of earnings per share and net asset value per share information and these are included in the tables below.

EPRA earnings per share has been amended from the basic and diluted earnings per share by the following:

	Unaudited	Unaudited	Audited
	six months to	six months to	year to
	31 December	31 December	30 June
	2011	2010	2011
	£000	£000	£000
Earnings	1,894	4,812	13,468
Profit on disposal of investment and development properties	(238)	(15)	(1,348)
Net losses on revaluation of investment and development properties	6,558	955	369
Profit on sale of trading properties	(1,530)	(3)	(3)
Fair value movement on derivative financial instruments	108	35	338
EPRA earnings	6,792	5,784	12,824
EPRA earnings per share	11.30p	9.64p	21.36p

8 Earnings per share and net asset value per share (continued)

The Group presents an EPRA earnings per share figure as the directors consider that this is a better indicator of the performance of the Group.

There are no dilutive shares. Options over 137,432 Ordinary shares were granted in the period (2010: 136,172 Ordinary shares) under the 2007 Performance Share Plan. The vesting conditions for these shares have not been met, so they have not been treated as dilutive in these calculations. The second three-year award under the 2007 Performance Share Plan vested in the period, with 93,696 Ordinary shares being issued and 11,715 shares lapsed (2010: 93,656 issued and 26,772 lapsed).

Net asset value per share

The net asset value per share of 306p (31 December 2010: 308p) has been calculated on the basis of the number of equity shares in issue of 60,179,342 (31 December 2010: 60,085,646) and net assets of £184.33m (31 December 2010: £184.85m). The number of equity shares in issue has increased during the period by 93,696 due to the exercise of share options under the 2007 Performance Share Plan.

The EPRA net asset value per share has been calculated as follows:

	Unaudited	Unaudited	Audited
	six months to	six months to	year to
	31 December	31 December	30 June
	2011	2010	2011
	£000	£000	£000
Total equity	184,331	184,848	188,618
Valuation of land held as trading properties	1,871	3,583	3,336
Book value of land held as trading properties	(447)	(553)	(559)
Fair value of derivative financial instruments	(56)	(324)	(164)
EPRA net asset value	185,699	187,554	191,231
EPRA net asset value per share	309p	312p	318p

9 Properties

	Unaudited
	£000
DTZ valuation as at 31 December 2011	255,815
Owner-occupied property included in property, plant and equipment	(953)
Other adjustments	(48)
Investment and development properties as at 31 December 2011	254,814

The properties are stated at market value as at 31 December 2011 and are valued by DTZ Debenham Tie Leung, professionally qualified external valuers, in accordance with the RICS Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors.

10 Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

11 Post-Balance Sheet Events

On 6 February 2012 the Group acquired an investment property for £1.5m.

Responsibility Statement

We confirm that to the best of our knowledge:

a) the condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting";

b) the half-yearly report includes a fair review of the information required by DTR (SNP: ^DTRY - news) 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c) the half-yearly report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transaction and changes therein).

Signed on behalf of the Board who approved the half-yearly report on 21 February 2012.

Rupert J Mucklow

Chairman

David Wooldridge

Finance Director

Independent Review Report to A ∓ J Mucklow Group 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 31 December 2011 which comprises the Group condensed statement of comprehensive income, the Group condensed statement of changes in equity, the Group condensed balance sheet, the Group condensed cash flow statement and related notes 1 to 11. 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 (Xetra: A0Q8L3 - news) ) 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 them 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 Group 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 31 December 2011 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 Auditor

Birmingham, United Kingdom

21 February 2012