(OTE.L) O Twelve Estates Ltd Buy/Sell

Commenting on the results, Phillip Rhodes, Chairman of O Twelve, said: "There are signs that the unprecedented falls in UK property valuations over the past two years have now bottomed-out, although the extent and duration of the present rally in capital values remains highly uncertain. However, with the assistance of our Property Advisers, and the support of our lenders, your Board will continue its focus on cash preservation and generation and portfolio management to ensure the long-term prospects of the Group and increase shareholder value."

David Tye of Rugby Asset Management added: "Whilst prospects for the real estate market generally now appear to be improving, we believe that O Twelve's Target Area is looking forward to a particularly bright future. The Olympic Games are approaching quickly and we are now starting to see the effect of the unprecedented public and private investment driving Europe's largest single regeneration project around Stratford, London's East End and the Thames Gateway. This, coupled with the Target Area's historically low capital and rental base values augurs well for future growth."

For further information please contact:

David Tye / Andrew Wilson Rugby Asset Management Limited Tel: +44 (0)20 7016 0050

Jeremy Porter / Simon Bennett / Laura Littley Fairfax I.S. PLC Tel: +44 (0)20 7598 5368

Stephanie Highett / Rachel Drysdale / Dido Laurimore Financial Dynamics Tel: +44 (0)20 7831 3113

CHAIRMAN'S STATEMENT

I am pleased to present the results of O Twelve Estates Limited together with its subsidiaries for the six months ended 30 September 2009.

The global financial crisis has had a significant impact on property values. Capital values for UK commercial properties generally, which were down 30% for the year ended 31 March 2009, appear to have bottomed-out during the period under review. Continuing value falls from April to July reversed and started to deliver increases in August and September, with the end result being the IPD All Property Monthly Capital Value Index reporting an overall fall of 3.5% for the six months ended 30 September 2009.

At 30 September 2009, the Group's property investment portfolio was valued by CB Richard Ellis ("CBRE") at £171.5 million (31 March 2009: £173.6 million). After taking into account capital expenditure and the disposal of three vacant units at Redwing Court, the like-for-like fall of just 0.4% in the six months ended 30 September 2009 compares favourably with the 3.5% fall for UK commercial properties generally for the same period. The rental value of the portfolio has decreased by 4.3%, matching the IPD All Property Monthly Index over the same period.

Results The Group reported a net profit for the six months ended 30 September 2009 of £2.9 million (30 September 2008: loss of £16.9 million, 31 March 2009: loss of £92.3 million), representing a profit per Ordinary Share of 2.38p (30 September 2008: loss of 13.77p, 31 March 2009: loss of 75.34p). The consolidated net liability at 30 September 2009 was £4.5 million (31 March 2009: net liability of £7.4 million), being a net liability per Ordinary Share of 3.65p (31 March 2009: net liability per Ordinary Share of 6.03p). Consolidated net assets, before adjusting for the fair value of the interest rate swap, was £11.07 million, 9.03p per share (30 September 2008: £70.80 million, 57.79p per share, 31 March 2009: £10.86 million, 8.87p per share).

The Company was established to take advantage of the urban regeneration and infrastructure projects taking place in the Target Area and for which the 2012 Olympic Games are a major catalyst. Letting activity over the past six months has been very positive, with 11 new lettings totalling 157,000 sq ft completed and generating nearly £840,000 of annual income, thus reducing the void rate from 12.5% of estimated rental value at 31 March 2009 to 9.4% at 30 September 2009. If lettings which have been agreed and are currently in solicitors' hands are completed, the void rate would reduce further to 6.7%. This activity confirms the underlying resilience of the Group's Target Area.

In line with the Board's aim of reducing costs and in light of the current economic environment, a number of changes were made to the terms of the Property Adviser Agreement ("PAA") with Rugby Asset Management Limited. The combination of these revised terms, which took effect from 1 April 2009, and the lower property valuations on which the fee is calculated, reduced management fees by 58% from £1.3 million to £0.5 million for the period ended 30 September 2009, compared to the same period in 2008.

As I have noted before, despite the ongoing difficult market conditions it is heartening to see that, where we can influence and control matters, your Group's efforts are showing some positive outcomes.

Phillip Rhodes Chairman 11 December 2009 PROPERTY ADVISER'S REPORT

Rugby Asset Management

Rugby Asset Management Limited ("RAM"), a member of the Rugby Estates Plc group, was appointed Property Adviser to O Twelve Estates Limited ("O Twelve" or the "Group") on its admission to AIM on 27 March 2006. Our role is to identify property opportunities for recommendation to and consideration by the Board of the Company and to negotiate on its behalf. We undertake, on a day to day basis, under delegated authority from the Board, all aspects of assembling, managing and financing O Twelve's property portfolio. Rugby Estates Plc also holds a 5.5% interest in O Twelve Estates Limited.

Market Comment

In the four months to July 2009 capital values continued to fall, with the IPD All Property Monthly Index showing that values fell by a further 4.8% from March. However, this trend changed in August 2009 with a rise of 0.2%, ending twenty five consecutive months of downward price correction. When we last reported in July, we expected that values would stabilise in either the latter part of 2009 or early 2010. This stabilisation has now started to take place, with capital values starting to rise. In September, the IPD Monthly Index reported an increase in capital values of 1.13%, followed by a further rise in October of 1.9%. This trend is expected to continue for the remainder of 2009.

The occupational market remains challenging and is, as we expected, lagging the recovery in the investment market. One of our principal aims at the start of the year was to maximise the cashflow with a particular focus on minimising voids and reducing associated property outgoings. Since March we are pleased to report that 157,000 sq ft of vacant space has been let with eleven new leases and the void rate within the portfolio has fallen from 12.5% to 9.4%, a 25% reduction. Contracted annual rent from these lettings is nearly £840,000 once relevant rent free periods expire. By contrast, only seven new leases, covering a total of 58,000 sq ft, were completed in the entire twelve months to 31 March 2009.

Portfolio Review as at 30 September 2009

* 22 properties, having an average lot size of £7.8 million

Capital Value Split by Sector
Industrial 40%
Retail 36%
Offices 20%
Residential 4%

Valuation

The external valuation of the Group's properties as at 30 September 2009 was £171.51 million. On a like-for-like basis, after taking into account capital expenditure and disposals, the value of the portfolio fell during the last six months by just 0.4%. This compares positively with the IPD Monthly All Property Capital Value Index, which showed a fall of 3.5% over the same period. All sectors of the O Twelve portfolio performed better than the corresponding fall in the IPD index. The best performing sector within the portfolio was retail which increased in value by 1.7% over the period compared with a fall of 3.1% for the retail sector in the IPD Monthly Index.

The equivalent yield for the portfolio has reduced by 48 basis points over the period from 9.0% to 8.5%. This compares with an average equivalent yield for the IPD Monthly Index of 9.1% at September, which has reduced by 8 basis points over the six months to September.

Capital Value Movement compared to IPD Monthly Index
O Twelve IPD
All Property -0.4% -3.5%
Retail 1.7% -3.1%
Office -4.5% -4.8%
Industrial -0.2% -2.7%

Rental value levels within the portfolio decreased, by 4.3%, on a like-for-like basis, exactly in line with the IPD All Property Monthly Index which also showed a fall of 4.3% over the same period.

Rental Value Movement compared to IPD Monthly Index
O Twelve IPD
All Property -4.3% -4.3%
Retail -4.0% -3.8%
Office -4.9% -6.3%
Industrial -4.3% -2.6%

Reversion by Sector
ERV £ million Rent £ million
Retail 6.2 5.7
Office 3.1 2.9
Industrial 6.8 5.3
Residential 0.5 0.5

Activity

No acquisitions were made during the period.

Three vacant units at Redwing Court were sold for an aggregate of £1.8 million, 7.5% below the March valuation.

Once again, our focus has been on asset management and we are delighted to report that eleven new leases have been contracted over the period, accounting for 157,000 sq ft and nearly £840,000 of annual rental income after rent free periods. Particularly:

Five rent reviews have been concluded over the period realising just under £90,000 of reversionary income. The rents achieved on these reviews reflect a 20% increase on the rental income prior to the review and a premium of 8% over our valuer's opinion of rental value at March.

Despite a generally difficult occupational market some 74,000 sq ft remains under offer and good progress continues to be made in reducing the void rate.

Rental Value Analysis - 30 September 2009
£ million
Current annualised income 13.8
Rent free periods 0.6
Total contracted rent 14.4
Available for letting 1.6
Reversions 0.6
Estimated rental value 16.6

Void Analysis

Due to the success in letting activity over the period the void rate within the portfolio has reduced by 25% since March 2009 and at 30 September stood at 9.4% by rental value. The rental value of vacant space at 30 September was £1.6 million of which £0.5 million was under offer. Assuming these potential lettings complete the void rate will fall to 6.7%. During the coming year our focus will continue to be on reducing the void rate further and minimising associated void costs.

Income Security

Given the current uncertainty in the economy and in the wider banking and financial markets, investors are increasingly focusing on security of income and tenant covenant strength. Some 53% of current rental income is contracted for more than five years. Where leases have less than five years to run, opportunities exist to refurbish or consider changes of use in order to maximise value. In our view the portfolio offers a good balance between income security and opportunities to add value.

Rent Collection

Despite the difficult trading conditions the rent collection statistics remain encouraging with an average of 96% of rental income collected within the quarter. There has been no significant change in the rate of rent collection in the last four quarters. Maintaining a high level of rent collection remains one of our key objectives.

Income Expiry Profile - 30 September 2009
Less than 5 years 47%
5 to 10 years 27%
More than 10 years 26%

Of the portfolio's 149 tenants, 20 account for 53% of the contracted rental income with the top 10 accounting for 37%. Tenants of, in our view, undoubted or of a "national" standard account for 81% of the contracted rent, while smaller regional and local businesses account for 19% of the contracted rent.

Tenant Covenant Strength by Contracted Rent
Grade A (very strong) 36%
Grade B (national) 45%
Grade C (regional) 9%
Grade D (local) 10%

Tenants in the portfolio include:
Bank of New York Mellon Sainsbury Supermarkets Ltd
Chelmsford Star Co - Operative Society Ltd Secretary of State
Chubb Electronic Security Ltd Smyths Toys Ltd
Coutts Retail Communications Ltd Somerfield Stores Ltd
GE Transportation Systems Ltd Staples
Halfords Target Express Parcels Ltd
Hitachi Kokusai Electric UK Ltd Telford Homes plc
London Eastern Railways Ltd Toyota Tsusho Automobile London Holdings Ltd
Moss Bros Group Plc WH Smith Plc
O2 (UK) Ltd Wilkinson Hardware Stores Ltd

Portfolio at 30 September 2009
Valuation band at
30 September 2009
£ million
Property Type
Gascoigne Road, Barking Distribution warehousing 5 - 10
QED, Thurrock Distribution warehousing 5 - 10
Western Avenue, Thurrock Distribution warehousing 5 - 10
Bakers Court, Basildon Industrial 0 - 5
Barratt Industrial Estate, Bow Industrial 0 - 5
Larkfield Mill, Aylesford Industrial 10 - 15
Mill River Trading Estate, Industrial 5 - 10

Enfield
The Interchange, Swanley Industrial 15 - 20
Baytree Shopping Centre, Shopping centre 20 - 25

Brentwood
George Yard, Braintree Shopping centre 15 - 20
The Mall, Dagenham Shopping centre 10 - 20
214/216 Heathway, Dagenham Retail 0 - 5
38-42 High Street, Brentwood Retail 0 - 5
75 High Street, Brentwood Retail 0 - 5
Grove Farm, Chadwell Heath Retail park 5 - 10
Inspira House, Welwyn Garden Office 0 - 5

City
Mellon House, Brentwood Office 5 - 10
Queensgate, Waltham Cross Office 5 - 10
Redwing Court, Romford Office 0 - 5
Solar House, Stratford Office 5 - 10
34 St Thomas Road, Brentwood Residential 0 - 5
Salway Place, Stratford Residential 5 - 10

Going Forward

As interest rates look set to remain at their present historic low level for some time, a convincing case for property as an investment asset class can be made, perhaps for the first time in two years. As values stabilise and grow, property offers a high yielding alternative investment to other traditional investment areas, a return that is further enhanced for overseas investors by the weak pound, particularly in relation to the euro and dollar. We expect that availability of debt will improve to follow the equity available as investors look to take advantage of the next property cycle as 2009 turns into 2010. Our objective remains the creation of value through successfully implementing new asset management initiatives.

Whilst prospects for the real estate market generally now appear to be improving, we believe that O Twelve's Target Area is looking forward to a particularly bright future. The Olympic Games are approaching quickly and we are now starting to see the effect of the unprecedented public and private investment driving Europe's largest single regeneration project around Stratford, London's East End and the Thames Gateway. This, coupled with the Target Area's historically low capital and rental base values augurs well for future growth.

David Tye Andrew Wilson

Rugby Asset Management Limited

11 December 2009

for the six months ended 30 September 2009 (unaudited)

1 April 2009 to 30 1 April 2008 to 30 1 April 2008 to 31
September 2009 September 2008 March 2009 (audited)
(unaudited) (unaudited)
£'000 £'000 £'000

Income
Rent receivable 7,168 7,042 14,289
Bank interest 21 227 292
Other interest 12 26 32
Service charges receivable 1,709 1,824 3,609

Total income 8,910 9,119 18,222

Expenses
Administration fees (90) (124) (234)
Service charges payable (1,709) (1,824) (3,609)
Management fees (532) (1,266) (2,441)
Other operating expenses (1,026) (824) (2,021)

Total expenses (3,357) (4,038) (8,305)

Investment gains and losses
Movement in unrealised loss on (77,653)
revaluation of investment (514) (18,102)

properties
Realised loss from sale of (194) - -

investment properties

Total investment gains and (708) (18,102) (77,653)

losses

Net profit/(loss) from 4,845 (13,021) (67,736)

operating activities

Movement in fair value of 2,714 1,511 (13,989)

interest rate swap
Interest payable and similar (4,594) (5,303) (10,397)

charges

Total financing gains and (1,880) (3,792) (24,386)

losses

Profit/(loss) before taxation 2,965 (16,813) (92,122)
Taxation (49) (53) (175)

Total comprehensive
profit/(loss) for the 2,916 (16,866) (92,297)

period/year attributable to the owners of the Company

Profit/(loss) per Ordinary 2.38p (13.77)p (75.34)p

Share - basic and diluted

Items in the above statement are derived from continuing operations.

There was no other comprehensive income in the period (30 September 2008 and 31 March 2009: nil).

for the six months ended 30 September 2009 (unaudited)

Share capital Other reserves

Total
£'000 £'000 £'000
Balance at 1 April 2009 1,225 (8,607) (7,382)

Profit for the period attributable - 2,916 2,916

to the owners of the Company

Total comprehensive profit for the - 2,916 2,916

period attributable to the owners of the Company

Balance at 30 September 2009 1,225 (5,691) (4,466)

for the six months ended 30 September 2008 (unaudited)

Share capital Other reserves

Total
£'000 £'000 £'000
Balance at 1 April 2008 1,225 83,690 84,915

Loss for the period attributable - (16,866) (16,866)

to the owners of the Company

Total comprehensive loss for the - (16,866) (16,866)

period attributable to the owners of the Company

Balance at 30 September 2008 1,225 66,824 68,049

for the year ended 31 March 2009 (audited)

Share capital Other reserves Total

£'000 £'000 £'000
Balance at 1 April 2008 1,225 83,690 84,915

Loss for the year attributable to - (92,297) (92,297)

the owners of the Company

Total comprehensive loss for the - (92,297) (92,297)

year attributable to the owners of the Company

Balance at 31 March 2009 1,225 (8,607) (7,382)

as at 30 September 2009 (unaudited)

30 September 2009 30 September 2008 31 March 2009
(unaudited) (unaudited) (audited)
£'000 £'000 £'000

Non-current assets
Investment property 171,510 232,945 173,634
Restricted cash and cash 2,574 - 3,059

equivalents

174,084 232,945 176,693

Current assets
Receivables and prepayments 8,745 5,795 5,381
Cash and cash equivalents 3,056 8,928 4,928

11,801 14,723 10,309

Total assets 185,885 247,668 187,002

Current liabilities
Payables and accruals (6,650) (7,216) (6,454)
Bank loan (168,169) - (169,684)
Fair value of interest rate (15,532) - (18,246)

swap

(190,351) (7,216) (194,384)

Non-current liabilities
Bank loan - (169,657) -
Fair value of interest rate - (2,746) -

swap

- (172,403) -

Total liabilities (190,351) (179,619) (194,384)

Net (liabilities)/assets (4,466) 68,049 (7,382)

Capital and reserves attributable to owners of the Company
Called-up share capital 1,225 1,225 1,225
Other reserves (5,691) 66,824 (8,607)

Attributable to owners of the (4,466) 68,049 (7,382)

Company

Net (liability)/asset value (3.65)p 55.55p (6.03)p

per Ordinary Share - basic and diluted

for the six months ended 30 September 2009 (unaudited)

1 April 2009 to 30 1 April 2008 to 30 1 April 2008 to 31
September 2009 September 2008 March 2009 (audited)
(unaudited) (unaudited)
£'000 £'000 £'000

Operating activities
Profit/(loss) for the 2,916
period/year attributable to (16,866) (92,297)

the owners of the Company Adjustments for:
Movement in unrealised loss on 514 77,653
revaluation of investment 18,102

properties
Realised loss from sale of 194 - -

investment properties
Movement in fair value of (2,714) (1,511) 13,989

interest rate swap
Loan interest payable and 4,594 5,303 10,397

similar charges
Taxation 49 53 175
Purchase/refurbishment of (340) (1,282) (1,522)

investment property
Sale of investment property 1,756 - -

Net cash inflow from operating 6,969 3,799 8,395

activities before working capital changes
(Increase)/decrease in (3,293) 6,232 6,646

receivables and prepayments
Increase/(decrease) in 198 (681) (1,016)

payables and accruals

Net cash inflow from operating 3,874 9,350 14,025

activities Financing activities
Repayment of loan (1,545) - -
Loan interest and similar (4,615) (5,234) (10,589)

charges paid

Net cash outflow from (6,160) (5,234) (10,589)

financing activities
Taxation paid (71) (14) (275)

(Decrease)/increase in cash (2,357) 4,102 3,161

and cash equivalents

Cash and cash equivalents at 7,987 4,826 4,826

beginning of period/year
(Decrease)/increase in cash (2,357) 4,102 3,161

and cash equivalents

Cash and cash equivalents at 5,630 8,928 7,987

end of period/year

Cash and cash equivalents at end of period/year comprise:
Non-current cash and cash 2,574 - 3,059

equivalents
Cash and cash equivalents 3,056 8,928 4,928

5,630 8,928 7,987

1. The financial information set out in this announcement does not constitute the Group's statutory financial
statements for the periods ended 30 September 2009, 30 September 2008 or

for the year ended 31 March 2009 but
is derived from those accounts.

2. Half yearly report

The half yearly report will be posted to shareholders by the end of

December 2009. Copies of the half yearly
report will be available from the Company's office at No.1 Le Truchot,

St Peter Port, Guernsey, GY1 3JX and on
its website, www.otwelveestates.com

3. Dividends

The Directors do not propose an interim dividend for the period ended 30

September 2009.

4. Profit/(loss) per Ordinary Share

The profit/(loss) per Ordinary Share is based on a profit of £2,916,000

(30 September 2008: loss of £16,866,000,
31 March 2009: loss of £92,297,000) and on a weighted average number of

122,500,002 (30 September 2008 and
31 March 2009: 122,500,002) Ordinary Shares in issue.
The average price of the Ordinary Shares of 5.86p during the period (30

September 2008: 28.24p, 31 March 2009:
17.51p) was below the exercise price of the Options (exercise price

100.00p). Therefore, in accordance with IAS
33: Earnings per share, there is no dilution.

5. Net (liability)/asset value per Ordinary Share

Basic

The net liability per Ordinary Share is based on the net liabilities attributable to equity shareholders of £4,466,000

(30 September 2008: net assets of £68,049,000, 31 March 2009: net liabilities of £7,382,000) and on 122,500,002
(30 September 2008 and 31 March 2009: 122,500,002) Ordinary Shares in

issue at the end of the period.

Diluted

The 30 September 2009 price of the Ordinary Shares of 8.63p (30 September 2008: 20.00p, 31 March 2009: 3.50p)
was below the exercise price of the Options (exercise price of 100.00p).

Therefore, there is no dilution (30
September 2008 and 31 March 2009: no dilution).

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

IR GUGWWPUPBGMG