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TWST: Let’s begin with a quick introduction and update on Ashtenne Holdings (London: AHH.L)?

Mr. Watson: You will recall that Ashtenne was started in January 1989 by me and my joint chief executive, Morgan Jones. I was an ex-lawyer; he was an ex-accountant. So we were unhindered by any property expertise whatsoever! But we managed to develop a formula whereby the business bought what’s called in the U.K. high yielding multi-let industrials; effectively everyday type mama-and-papa industrial units and estates. So large lots of industrials in portfolios or large industrial areas where there was an initial yield that showed a surplus above the cost of borrowings and a concrete reason why we felt we could make that piece of property worth more -- normally with an element of vacant. A classic sort of template was the first big deal we did in 1990, where we bought 21 industrial estates from the government in Scotland. They had a low average let rent of just £2.64 and we felt we could drive up the rent with some vigorous management They had low average occupancy; I think it was just over 80% occupied, and having been round, talked to the tenants, looked at the units, looked at the markets in these areas, we were confident, again, that with a very energetic approach to marketing these units we could get the occupancy up. So we felt that having raised the rent and raised the occupancy we could sell the properties profitably and that’s exactly what we did. That became the template for much of what we have done since. So when you think of Ashtenne, the first thing to think of is complex under managed property situations usually on the industrial or commercial side where we can get amongst it and enjoy a high initial yield as a comfort while we are working through the capital adding opportunities, add the value and then sell the properties profitably. As the business has developed, we have developed what we regard as a unique pan-U.K. structure. So we now have offices in Glasgow, Newcastle, Doncaster, York, Preston, Merthyr Tydfil as well as London. And in those regions we have young, highly incentivized, entrepreneurial teams of people recruited from the region and based in the region, who really get to know the tenant base. Their job is to market the vacant property, to improve the lease terms with the tenant, sell units to the tenants, access purchase opportunities and sale opportunities. So they act as mini-Ashtenne’s really. The business floated in 1997 off a share price of £1.25 and a NAV of £1.31. Today the share price is around £2.58 and a NAV as of December 31st of £2.72. The other key development in the business was 18 months ago we formed a big limited partnership with Morley the fund management arm of Aviva over here, a big fund management house. And we sold £250 million of our industrial properties, which at that time was the bulk of our industrial properties, into that limited partnership. We then reinvested £60 million, the fund invested £120 million, and we put a debt facility of another £180 million pounds against that to make a potential fund size of £360 million. During the last year we grew that further with another £30 million investment from Hermes, the big investment fund over in the U.K. and from Foreign and Colonial. So that’s a growing fund where, on top of the returns from our investment in that fund, we get fees, management fees, transaction fees and a performance fee. The idea is that on that half of the business, we are getting an enhanced return on our capital and we’ve also got a kind of relatively bomb-proof income stream which should in time cover the overheads and the dividend from the business. On the other side of the business, which is currently debt free effectively with virtually nil gearing on the balance sheet side, the idea is that we do the more mixed complex, but hopefully lumpier profit type transactions like the purchase of the subsidiaries and Ascot PLC that we bought a couple of years ago, or Sittingbourne or the Marconi portfolio we bought last year.

TWST: What benchmarks and metrics should investors use when tracking your progress?

Mr. Watson: We have always judged ourselves in terms of absolute return, i.e. total return, NAV plus dividend, and in terms of real return to shareholders, i.e. share price plus dividend. So there are two things we always have our eyes on. Other useful benchmarks are the underlying yield of the portfolio, because we believe our shareholders can take comfort from the fact that even if we stopped selling properties the underlying yield is still much higher than most of the other quoted property companies On the fund side, again it’s the absolute return, total return, but also the relative return in terms of the performance around IPD. I think we are fortunate in that we probably punch beyond our weight in terms of analyst coverage for the size of company we are. So investors can look at quite a lot of independent analyst coverage. Obviously our brokers, Casanove, produce research on us, but also Merrill Lynch, Credit Lyonnaise, CFSB, and Peel Hunt. These are independent analyst houses that are looking at the business and you can get a good picture of where the business is likely to be, financial performance wise, by taking a few soundings from some of their research.