Daejan Plc – Half Year Report

·    The profit before tax for the period was £65.1 million (2015: £58.9 million) after accounting for the net valuation gain on investment properties of £38.6 million (2015: £35.5 million).

·    The property portfolio has been valued by the Directors based on the recommendations of the Group's external advisers and continues to show modest growth in both the UK and USA.

·    We continue to see some increase in rental income in the UK and USA. The significant reduction in the sterling/dollar exchange rate in this period has resulted in USA reported rental income increasing by £2.4 million and has, on the balance sheet, produced an overall net translation gain of £20.0 million (2015: £3.7 million loss).

·    The tax charge in the period has benefited from a one-off adjustment to the cumulative deferred tax balance following a reduction in the rate of corporation tax.

·    My last annual report was written shortly after the decision had been taken for the UK to leave the European Union. Despite some positive short term indicators since that time, it is still far too soon to be able to form a balanced judgement as to what lies ahead for the UK economy as a whole and the property sector in particular. In the USA we now have the uncertainty of a new and largely unknown President whose impact on the USA economy and the property sector cannot be foreseen at this stage. Against this background we will continue to pursue our long term, low risk approach to creating growth in net asset value.

·    The principal risk factors affecting the remainder of the financial year continue to be exposure to movements in the valuation of the Group's investment properties and financial instruments, movements in the sterling/dollar currency rate of exchange and the incidence of voids and bad debts.

·    An interim dividend of 35p per share will be paid on 10 March 2017 to shareholders on the register on 10 February 2017.