The profit before tax for the half year to 30 September 2018 was £29.1m (2017: £1.2m) with a Total Property Return of £43.2m (2017: £15.4m). The reduction in net rents to £11.7m (2017: £17.9m) reflects the sale of £276m of investment assets over the preceding 12 months. Developments contributed profits of £4.1m (2017: £3.3m) before provisions of £6.2m (2017: £11.5m). The gain on sale and revaluation of the investment portfolio contributed £33.6m (2017: £5.7m).
Total see-through finance costs were £8.4m (2017: £14.1m), offset by interest receivable of £1.0m (2017: £1.2m) to give net finance costs of £7.4m (2017: £12.9m). An increase in expected future interest rates led to a credit from the valuation of the Group’s derivative financial instruments of £0.3m (2017: £2.9m). The valuation of the Group’s Convertible Bond gave rise to a credit of £1.0m (2017: charge of £0.1m). Recurring administration costs were £5.6m (2017: £5.6m) and the provision for performance related remuneration, including associated NIC, was £2.3m (2017: £0.5m).
The sale of The Shepherds Building for £125.2m, which exchanged on 13 September and completed on 5 October, has crystallised the payment of a tax liability which had previously been provided for through deferred tax. As a consequence, a corporation tax charge of £11.2m (2017: £nil) has been recognised in the Half Year Results, offset by a reduction in the Group’s deferred tax provision of £8.0m. A net tax charge of £3.2m (2017: £0.8m) has been provided for.
The profit for the period, after recognition of this tax charge, was £25.9m (2017: £0.4m) and this strong performance allows the Board to declare an Interim Dividend of 2.60p (2017: 2.50p), an increase of 4.0%.