Canary Wharf Group - Interim Results
RNS No 3293e
CANARY WHARF GROUP PLC
28 April 1999
CANARY WHARF GROUP PLC
INTERIM RESULTS
Preliminary announcement of results for the six months ended 31 December
1998.
FINANCIAL HIGHLIGHTS:
Six months to 31 Six months to 31 Change
Dec 1998 Dec 1997
£m £m %
Turnover-rents and service charges 35.6 21.7 64.1
Gross profit 21.1 10.3 104.9
Operating profit/(loss) 5.0 (3.8) -
Loss on ordinary activities before
and after tax (36.5) (44.6) 18.2
Basic and diluted loss per share
(based on share capital prior to
listing) (14.6p) (892.0p) -
AT 31 DECEMBER:
* The Group's investment portfolio (totalling 3.4 million square feet) was
99% let.
* Properties under or about to commence construction totalled 2.4 million
square feet of which 2.2 million was pre-let or subject to agreements to be
sold upon completion.
DURING THE PERIOD:
* An agreement to construct a 1.1 million square foot headquarters building for
the HSBC Group was signed in October 1998.
* Infrastructure works on the former Heron Quays commenced.
* Two new financings were completed, a construction loan secured on a new
198,000 square foot building which has been pre-let to CSFB, and a 5 year
facility secured on the Group's completed retail properties.
* £24.6 million of principal and interest was repaid on the Group's Senior
Secured Notes.
SUBSEQUENT TO THE PERIOD END:
* An agreement for the lease of approximately 600,000 square feet in a new
1.2 million square foot tower was signed with Citigroup.
* The company's shares were admitted for listing on the London Stock
Exchange generating net proceeds of £576.4 million.
* Concurrent with the flotation Sir Martin Jacomb, Sir John Carter, Christopher
Jonas, Michael Price, Robert Speirs and Andrew Tisch were appointed as
non-executive directors.
* The principal and accrued interest on the Group's Senior Secured and Capital
Notes totalling £337.4 million was repaid.
* The company entered into an agreement with London Underground Limited (LUL)
whereby all of the remaining land and security mortgaged in connection with
the Group's contributions to the Jubilee Line Extension were released and the
company agreed to pay LUL in full and final satisfaction of all monies due to
it £50.2 million on 1 November 2000.
Paul Reichmann, the Chairman, stated:
"We are proud to report that Canary Wharf Group plc is now a publicly listed
company on the London Stock Exchange. This represents an exceptional achievement
for the company and is a clear reflection of the dedicated effort that each of
our employees has made to achieve this important corporate milestone."
CONTACTS
George lacobescu, Chief Executive Canary Wharf Group plc
Peter Anderson, Managing Director of Finance Telephone: 0171-418 2000
A copy of the interim results will be sent to shareholders and copies will be
made available to the public on request to the Secretary at the registered
office, One Canada Square, Canary Wharf, London E14 5AB.
CANARY WHARF GROUP PLC
INTERIM STATEMENT
SIX MONTHS ENDED 31 DECEMBER 1998
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
We are proud to report that Canary Wharf Group plc is now a publicly listed
company on the London Stock Exchange. This represents an exceptional achievement
for the company and is a clear reflection of the dedicated effort that each of
our employees has made to achieve this important corporate milestone.
During the six month period covered by these interim statements:
- The agreement to construct and sell a 1.1 million square foot building to the
HSBC Group for their world headquarters was formally signed in October 1998.
Construction commenced in January this year.
- Infrastructure works were commenced to construct the cofferdams creating the
sub-structure levels of the 2.7 million square foot development on the former
Heron Quays. Once there is a commitment to construct new buildings, these
infrastructure works will accelerate their construction by almost a year.
- Two new financings were completed, a construction loan secured on a new
198,000 square foot building in Columbus courtyard pre-let to CSFB, and a £50
million 5 year facility secured on Cabot Place, the Group's existing retail
properties.
During the first quarter of 1999 the Group has signed an agreement for lease
with Citigroup for approximately 600,000 square feet in a new 1.2 million square
foot tower being constructed adjacent to the Citibank headquarters building
currently nearing completion. The two buildings will be linked to house the
combined Citibank and Salomon Smith Barney operations. In total, Citigroup will
occupy over 1.1 million square feet at Canary Wharf.
The Group's shares were admitted for listing on the London Stock Exchange on 1
April 1999. 26.9% of the Group's shares were issued at 330 pence per share and
generated net proceeds of £576.4 million to the Group. These proceeds enabled us
to considerably strengthen the balance sheet by repaying the principal and
accrued interest on the Group's Senior Secured and Capital Notes totalling
£337.4 million. The remaining proceeds from the flotation will be used to fund
our development programme and further reductions of debt.
Being a public company has many intangible benefits. Significant among these is
the opportunity to expand the Board and gain the advice and insight from
non-executive directors. We are very pleased to welcome Sir Martin Jacomb, Sir
John Carter, Christopher Jonas, Michael Price, Robert Speirs and Andrew Tisch to
the Board.
PAUL REICHMANN GEORGE IACOBESCU
CHAIRMAN CHIEF EXECUTIVE OFFICER
1
BUSINESS REVIEW
Property portfolio
At the time of approving this interim report over 99% of the existing available
space in the Group's ownership (totalling 3.4 million sq ft NIA) was let and
seven buildings (totalling 3.6 million sq ft NIA) were under or about to
commence construction. In addition the Group owns land on which it proposes to
build a further 5.2 million sq ft. Properties under construction during the six
months to December 1998 comprised:
Approx. Net
Internal Area Expected
Completion
Property Address (sq ft) Date Status
17 Columbus Courtyard 198,000 June 1999 Pre-let to CSFB
20 Columbus Courtyard 275,000 July 1999 Agreed to be sold to CSFB
33 Canada Square 560,000 December 1999 Agreed to be leased to Citibank
(subject to put & call options)
Canada Square Retail
Centre 65,000 December 1999 Partially pre-let
1,098,000
In October 1998 the Group entered into an agreement for the sale upon completion
of a new 1.1 million sq ft building for the HSBC Group (8 Canada Square).
Construction commenced in January 1999 with completion forecast for April 2002.
In February 1999 the Group entered into an agreement with Citigroup for the
lease (subject to certain third party conditions) of approximately 600,000 sq ft
in a new 1.2 million sq ft tower (25 Canada Square). Construction of this
building is due to commence shortly. The Group is also about to commence
construction of a building (15 Westferry Circus) which, when completed in the
summer of 2000, will provide approximately 155,000 sq ft of office space.
Further, the Group has commenced piling and construction of coffer dams along
the southern boundary of the former Heron Quays, as a preliminary to the
development of that part of the estate. Construction of further buildings will
commence as and when market conditions allow.
The Group's investment properties are under lease to a roster of high quality
tenants which provides a diversified income stream. At the date of approving the
interim report the weighted average un-expired lease term for the office
portfolio was approximately 19.9 years (or 14.6 years after taking account of
tenant break options). Only 21.6% of the square footage under lease will expire
or is capable of being terminated during the next ten years. As a result of the
expiry of rent free periods, stepped rents and rent reviews, the Group's
aggregate rental income will increase significantly over the coming years.
At 31 December 1998, the Group's investment portfolio was carried at an amount
of £1,346.1 million being the amount of the valuation carried out at 30 June
1998 by the Group's external valuers, FPD Savills and CB Hillier Parker plus the
cost of subsequent fit-outs. The portfolio of Group properties under and held
for development was carried at an amount of £328.8 million at 31 December 1998,
representing their historical cost.
On 1 March 1999 the Group's external property advisers valued its investment
properties on an open market value basis in connection with the listing of the
Group's shares on the London Stock Exchange at £1,430 million and valued the
Group's development properties on the same basis at £1,194 million. In addition
the Group's external property advisers provided an opinion that the present
value of the Net Realisable Value of the properties under construction and the
properties awaiting development were £907 million and £1,529 million
respectively, representing an uplift of £2,107.2 million over the amount at
which those properties were carried in the Group's consolidated balance sheet at
31 December 1998.
Operating results
Turnover for the six months ended 31 December 1998 was £35.6 million, against
£21.7 million for the six months ended 31 December 1997. Rental income doubled
from £11.3 million to £22.6 million, due primarily to increased letting levels,
and the expiry of rent free or rent reduced periods. Service charge income
increased from £7.6 million to £9.2 million, an increase of £1.6 million or
21.1%, due primarily to the increased level of occupancy on the estate.
Miscellaneous income also increased from £2.8 million to £3.8 million over the
period.
Rents payable and property management costs for the six months ended 31 December
1998 were £14.5 million, in comparison with £11.4 million for the same period in
1997. The increase in cost is the result of the increased occupancy on the
estate.
For the six months ended 31 December 1998 gross profit was £21.1 million, an
increase of £10.8 million over the previous year. The gross profit ratio for the
six months was 59.3%, in comparison with 51.6% for the year to June 1998 and
47.5% for the six months ended December 1997. The increase in the gross profit
ratio is attributable to the increase in turnover.
Administrative expenses for the six months ended 31 December 1998 were £16.7
million. This includes costs totalling £2.6 million relating to the flotation of
the Group on the London Stock Exchange which will be taken to the share premium
reserve for the purposes of the Group's statutory accounts for the year ending
30 June 1999. Administrative costs for the six months to December 1997 were
£15.0 million.
For the six months ended 31 December 1998 operating profit was £5.0 million, in
comparison with a loss of £3.8 million for the six months ended 31 December
1997. The improvement in the operating profit earned by the Group is primarily
attributable to the increase in turnover.
Net interest payable for the period to December 1998 was £41.4 million, against
£40.8 million for 1997. After interest the loss on ordinary activities for the
period was £36.5 million, down by £8.1 million over the equivalent period in
1997, driven primarily by the increase in rental income.
Borrowings
At 31 December 1998, net debt (after allowing for cash in hand and cash
collateral) stood at £503.6 million, down from £772.0 million at the previous
statutory year end, comprising:
At 31 December At 30 June
1998 1998
£m £m
Senior Secured & Capital Notes 329.8 342.7
Securitised debt 554.5 552.8
Loans 130.3 7.5
Finance lease obligations 473.6 471.9
Total borrowings 1,488.2 1,374.9
Less: cash collateral for borrowings (409.9) (408.1)
Less: other cash collateral excluding
prepayments (see below) (75.7) (20.1)
1,002.6 946.7
Less: cash deposits (129.8) (97.5)
Net debt excluding prepayments 872.8 849.2
Cash deposits arising from
prepayments in respect of buildings
contracted to be sold (369.2) (77.2)
The increase in gross borrowings (as set out above) from £1,374.9 million to
£1,488.2 million is attributable primarily to drawings under the Group's
construction loan facilities and a new facility secured on the Group's retail
and parking properties. The increase in gross borrowings was accompanied by an
increase in cash and term deposits to £984.6 million from £602.9 million
primarily as a result of prepayments in respect of buildings contracted to be
sold upon completion of development. At 31 December 1998 the Group had undrawn
committed construction facilities of £179.1 million. At that date the weighted
average cost of the Group's debt was 8.0% (30 June 1998 8.5%).
On 6 April 1999 the Senior Secured and Capital Notes were repaid from the
proceeds of the Group's flotation which was completed on 1 April 1999.
Cash flow
Net cash inflow from operating activities for the six months ended 31 December
1998 was £75.0 million in comparison with £1.2 million for the six months to
December 1997. The improvement was partly attributable to the increase in rental
income and partly to movements in working capital balances.
Capital expenditure and financial investment for the six months ended 31
December 1998 was a net inflow of £246.4 million, as compared with a net inflow
of £69.8 million for the six months to 31 December 1997, the increased inflow
being attributable to prepayment proceeds from the agreements for the sale of
certain buildings on completion being in excess of construction costs incurred
in the period.
For the six months ended 31 December 1998, financing cash flows were £80.4
million reflecting drawdowns under certain new loan facilities, against £617.9
million for the equivalent period in 1997, which reflected the completion of the
Group's £555 million securitisation and certain finance leases.
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED
31 DECEMBER 1998
Unaudited Unaudited
Audited Six months Six months
Year ended ended 31 ended 31
30 June December December
1998 Notes 1998 1997
£m £m £m
52.3 Turnover - rents and service charges 35.6 21.7
Cost of sales
- rents and property management costs
(25.3) (14.5) (11.4)
27.0 GROSS PROFIT 21.1 10.3
(21.5) Administrative expenses (16.7) (15.0)
3.0 Other operating income 0.6 0.9
8.5 OPERATING PROFIT/(LOSS) 5.0 (3.8)
(0.1) Share of operating loss of
associates (0.1) -
29.0 Interest receivable - group 2 18.0 9.0
Interest payable 2
(106.6) - group before exceptional item (59.4) (49.8)
(27.1) - exceptional item - -
(96.3) LOSS ON ORDINARY ACTIVITIES
BEFORE TAX (36.5) (44.6)
- Tax on loss on ordinary
activities 3 - -
LOSS ON ORDINARY ACTIVITIES
(96.3) AFTER TAX TRANSFERRED TO
RESERVES (36.5) (44.6)
(103.6p) Basic and diluted loss
per share 4 (14.6p) (892.0p)
The above results relate to the continuing activities of the Group and its share
of associates.
The interim results for the six months ended 31 December 1998 were approved by
the Board of Directors on 27 April 1999.
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31
DECEMBER 1998
Unaudited Unaudited
Audited Six months Six months
Year ended ended 31 ended 31
30 June December December
1998 1998 1997
Notes
£m £m £m
NET CASH INFLOW FROM
9.4 OPERATING ACTIVITIES 75.0 1.2
(56.3) Returns on investments and (13.1) (37.0)
servicing of finance
5.3 Capital expenditure and financial 246.4 69.8
investment
(2.4) Acquisitions (7.0) (2.4)
(53.4) 226.3 30.4
(44.0) Cash outflow before 301.3 31.6
management of liquid
resources and financing
(361.5) Management of liquid resources (349.4) (561.0)
468.8 Financing 80.4 617.9
63.3 INCREASE IN CASH 6 32.3 88.5
Reconciliation of operating profit to operating cash flows
Year ended Six months Six months
30 June ended 31 ended 31
1998 December 1998 December
1997
£m £m £m
8.5 Operating profit/(loss) 5.0 (3.8)
0.1 Depreciation charges 0.1 0.1
(21.5) Increase in debtors (0.5) (17.8)
22.3 Increase in creditors 70.4 22.7
9.4 Net cash inflow from operating 75.0 1.2
activities
Capital expenditure and financial investment
£m £m £m
(94.8) Additions to investment properties and (155.4) (30.3)
properties under development
- Purchase of tangible fixed assets (0.8) -
100.1 Deferred income relating to agreements 402.6 100.1
to sell property
5.3 246.4 69.8
Financing
£m £m £m
(116.9) Repayment of Senior Secured Notes (24.6) (116.9)
(76.0) Decrease in short term borrowings - (76.0)
(188.8) Repayment of secured loan - (188.8)
555.0 Issue of securitised debt - 555.0
Drawdown of secured loan and finance lease
295.5 premiums 105.0 444.6
468.8 Net cash inflow 80.4 617.9
The above cash flows relate to the continuing activities of the Group.
NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 1998
1 BASIS OF PREPARATION
The interim results and cash flow have been prepared having regard to the
guidance in the non-mandatory statement issued by the Accounting Standards
Board, 'Interim Reports', and on the basis of the accounting policies set
out in the Group's financial statements for the year ended 30 June 1998.
The interim results do not incorporate any adjustment for revaluation of
investment properties at 31 December 1998 and therefore no summarised
balance sheet has been produced. In view of the fact that there has been no
revaluation, in the opinion of the directors, a summarised balance sheet
would not provide any additional useful information to that contained in
the Unaudited Consolidated Profit and Loss Account and the Unaudited
Consolidated Cash Flow statement for the six months ended 31 December 1998
and accompanying notes.
The financial information for the year ended 30 June 1998 has been
extracted from the Group's financial statements to that date. These
statements received an unqualified auditors' report and have been filed
with the Registrar of Companies.
2 INTEREST
Year Six months Six months
ended ended 31 ended 31
30 June December December
1998 1998 1997
£m Receivable: £m £m
35.3 Bank interest receivable 18.0 9.0
Interest relating to development financing
(6.3) transferred to development properties - -
29.0 18.0 9.0
Payable:
58.1 Notes and debentures 38.4 30.9
43.1 Bank loans and overdrafts 1.9 0.1
40.2 Finance lease charges 21.0 18.8
141.4 61.3 49.8
Less:
Interest on development financings
transferred to
(7.7) development properties (Note 5) (1.9) -
133.7 59.4 49.8
During the year ended 30 June 1998 certain of the Group's indebtedness
was prepaid resulting in an exceptional charge of £27.1 million.
3 TAXATION
No provision for corporation tax has been made in the consolidated results
of the Group in view of the loss for the six months to December 1998 and
previous periods.
4 LOSS PER SHARE
The basic loss per share is calculated by reference to the loss
attributable to ordinary shareholders and on the weighted average of 250.0
million shares in issue (June 1998 - 92.9 million, December 1997- 5.0
million).
The diluted loss per share is calculated in accordance with FRS 14, which
requires that only instruments which are dilutive are recognised. As a
result the ordinary shares arising on conversion of warrants held by EIB
and the exercise of share options have been excluded.
5 INVESTMENT PROPERTIES AND PROPERTIES UNDER DEVELOPMENT
Investment Properties under
Properties development
£m £m
Freehold properties held as tangible
fixed assets:
As at 1 July 1998 1,341.6 87.3
Additions including interest on
development financing 4.5 28.3
As at 31 December 1998 1,346.1 115.6
Of which, subject to lease and
finance leaseback
Arrangements 729.9
Historical cost 734.9 115.6
Freehold properties held as current
assets: £m
As at 1 July 1998 83.6
Additions including interest on
development financing 129.6
As at 31 December 1998 213.2
The Group's investment properties were valued as at 30 June 1998 by either
FPD Savills, Chartered Surveyors, or CB Hillier Parker, Chartered
Surveyors, on the basis of Open Market Value in accordance with the
Statements of Asset Valuation Practice and Guidance Notes of the Royal
Institution of Chartered Surveyors. The carrying value at 31 December 1998
represents the valuation at 30 June 1998, plus subsequent additions at
cost.
Properties under development at 31 December 1998 which are to be retained
are carried at their fair value at the time of the acquisition of the
Canary Wharf Holdings Limited Group by the company in December 1995, less
subsequent disposals plus additions at cost, subject to provision for
diminution in value. Properties under development which are contracted to
be sold are carried at the lower of cost (namely fair value at date of
acquisition plus subsequent additions at cost) and net realisable value.
6 NET DEBT
The amounts at which borrowings are stated comprise:
Senior
Secured/
Securitised Capital Construction Term Finance lease
debt Notes Loans Loan obligations Total
£m £m £m £m £m £m
At 30 June
1998 552.8 342.7 7.5 - 471.9 1,374.9
Drawn down in
period - - 71.4 50.0 - 121.4
Deferred
financing
expenses 0.2 0.1 0.2 (0.4) - 0.1
Accrued
finance
Charges 1.5 11.6 1.6 - 1.7 16.4
Repaid in
period - (24.6) - - - (24.6)
At 31 December
1998 554.5 329.8 80.7 49.6 473.6 1,488.2
Payable within
one year or on
demand 10.9 69.0 27.1 - - 107.0
Payable in
more
than one year 543.6 260.8 53.6 49.6 473.6 1,381.2
554.5 329.8 80.7 49.6 473.6 1,488.2
During December 1998 the Group concluded a one year £60 million
construction loan facility and a five year £50 million term loan. The new
construction loan, of which £27.3 million was drawn down prior to the
period end, is secured by first ranking fixed and floating charges over the
property which is subject to the financing. The five year term loan is
secured on the retail and car parking income from the initial phases of
Canary Wharf. Both facilities bear interest at rates linked to LIBOR.
6 NET DEBT (Continued)
The Senior Secured Notes and the Capital Notes were repaid on 6 April
1999.
At 31 December 1998 the Group held sterling cash deposits totalling
£984.6 million (30 June 1998 - £602.9 million), comprising deposits
placed on money market at call and term rates. Total cash deposits
included £409.9 million (30 June 1998 - £408.1 million) held by third
parties as cash collateral for the Group's borrowings, £369.2 million
(30 June 1998 - £77.2 million) of prepayments in respect of buildings
contracted to be sold upon completion of development and a further
£75.7 million (30 June 1998 - £20.1 million) was charged to third
parties as security for the Group's obligations. Unsecured cash
deposits totalled £129.8 million at 31 December 1998 (30 June 1998 -
£97.5 million).
The movement in net debt for the six months ended 31 December 1998 was
as follows:
Other
non-cash
1 July changes
1998 Cash flow 31 Dec 1998
£m £m £m £m
Cash in hand, at bank 602.9 381.7 - 984.6
Amounts on deposit not
available on demand (505.4)(349.4) - (854.8)
32.3
Debt due after 1 year (836.2) (71.4) - (907.6)
Debt due within 1 year (66.8) (27.1) (13.1) (107.0)
Finance leases (471.9) 16.5 (18.2) (473.6)
(82.0)
Amounts on deposit not
available on demand 505.4 349.4 854.8
Net debt (772.0) 299.7 (31.3) (503.6)
Six months
Ended 31 Dec 1998
£m
Increase in cash in the six months 381.7
Increase in debt and lease financing (82.0)
Change in net debt resulting from cash flows 299.7
Non-cash movement in net debt (31.3)
Movement in net debt in six months 268.4
Net debt at 1 July 1998 (772.0)
Net debt at 31 December 1998 (503.6)
7 SUBSEQUENT EVENTS
On 29 January 1999 the directors declared an interim dividend of
£44.6 million (17.8 pence per share) to shareholders on the register
at the close of business on 31 December 1998 which was paid on 6
April 1999. The directors do not expect to declare a final dividend.
On 27 February 1999, the Group entered into an agreement with
Citigroup for the lease (subject to certain third party conditions)
of approximately 600,000 sq ft in a new 1.2 million sq ft tower at
Canary Wharf.
On 5 March 1999, a special resolution was passed increasing the
authorised share capital of the company by £7,000,000 to £10,000,000
by the creation of 700,000,000 Ordinary shares of l p each ranking
pari passu in all respects as one class of shares with the existing
Ordinary shares and authorising the allotment and issue of
250,000,000 Ordinary shares by way of a bonus issue to the ordinary
shareholders pro rata to their holdings of such shares immediately
prior to the admission for listing of the Group's Ordinary shares on
the London Stock Exchange.
On 1 April 1999 167,000,000 Ordinary shares were issued and the
Group's Ordinary shares were admitted for listing on the London Stock
Exchange. A further 16,700,000 Ordinary shares were issued on 26
April 1999 under the terms of an over-allotment option established
prior to the listing.
7 SUBSEQUENT EVENTS (Continued)
On 31 March 1999 options were granted over a further 10,354,167
shares. On the same date awards over shares to the value of £1.51
million were made under the terms of a Long Term Incentive Plan.
Prior to and conditional upon the company's listing, warrants over
26,867,000 shares were granted to IPC Advisors Limited, a company
owned by a trust for the benefit of (inter alios) the Paul Reichmann
family. These warrants are exercisable at a price of 450 pence per
share (subject to adjustment in certain circumstances) during the
period to 26 December 2005.
At 31 December 1998, the present value of the instalments due to
London Underground Limited (LUL) in respect of the Jubilee Line
Extension (applying the discount rate provided for in the company's
agreement with LUL) amounted to £81.6 million, assuming that the
Extension becomes operational on the most recently announced date,
namely 1 November 1999.
Subsequent to 31 December 1998, the company released from the mortgage
in favour of LUL two building sites which served to reduce the present
value of the future instalments due to LUL. On 26 April 1999, the
company entered into an agreement with LUL under which all of the
remaining land and other security mortgaged to secure the monies due
to LUL were released from the mortgage and the company agreed to pay
LUL, in full and final satisfaction of all monies due or to become due
to it, the sum of £50,181,378 on 1 November 2000. LUL has the right on
3 months' notice to call for earlier payment in which case the amount
due will be discounted at the contractual rate. The agreement is
conditional upon the satisfaction of certain conditions which it is
expected will be met during May 1999.
ARTHUR ANDERSEN REVIEW REPORT
We have reviewed the interim financial information for the six months
ended 31 December 1998 set out on pages 4 to 9 which is the
responsibility of, and has been approved by, the company's directors,
Our responsibility is to report on the results of our review.
Our review was carried out having regard to the Bulletin 'Review of
Interim Financial Information' issued by the Auditing Practices Board.
This review consisted principally of obtaining an understanding of the
process involved in the preparation of the information, applying
analytical procedures to the underlying financial data, assessing
whether accounting policies have been consistently applied and making
inquiries of persons responsible for financial and accounting matters.
The review was substantially less in scope, and provides less assurance,
than an audit performed in accordance with Auditing Standards.
Accordingly, we do not express an audit opinion on the interim financial
information.
Based on our review:
1 in our opinion the interim financial information has been prepared
using accounting policies consistent with those adopted by Canary Wharf
Group plc in its financial statements for the year ended 30 June 1998;
and
2 we are not aware of any material modifications that should be made to the
interim financial information as presented.
Arthur Andersen
Chartered Accountants
1 Surrey Street
London 27 April 1999
WC2R 2PS
SHAREHOLDER INFORMATION
Directors of Canary Wharf Group plc:
Paul Reichmann+= Registered Office:
Executive Chairman One Canada Square
Canary Wharf
George lacobescu London
Chief Executive Officer E14 5AB
A Peter Anderson II
Managing Director of Finance Registrars:
IRG plc
Sir Martin Jacomb^* 34 Beckenham Road
Senior Non-Executive Director Beckenham
Kent BR3 4TU
Sir John Carter^*+=
Non-Executive Stockbrokers:
Cazenove & Co
Christopher Jonas^= 12 Tokenhouse Yard
Non-Executive London EC2R 7AN
Michael Price^+ Credit Suisse First Boston
Non-Executive One Cabot Square
Canary Wharf
Robert Speirs^*+= London
Non-Executive E14 4Q,l
Andrew Tisch^= Bankers:
Non-Executive Barclays Bank Plc
54 Lombard Street
Company Secretary- London
John Garwood EC3P 3AH
Auditors:
Arthur Andersen
1 Surrey Street
London
WC2R 2PS
^Non-executive directors appointed on 5 March 1999. On that date R U John
and G Rothman resigned as directors
*Member of Audit Committee
+Member of Remuneration Committee.
=Member of Nominations Committee
-Appointed 27 January 1999
END
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