Interim Results

Northacre PLC 24 November 2006 NORTHACRE PLC Interim Results Six months to 31 August 2006 Overview With its substantial track record, Northacre is now well established as a market leader in the business of developing residential property in Central London. Financial Results Turnover for the period was £2,410,837 (2005 - £1,584,000) with gross profit of £1,789,819 (2005 - £941,000). Pre-tax profit was £123,401 (2005: loss £345,000) before amortisation of goodwill of £630,604 (2005 - £630,604) with a basic loss per share of 2.23 pence (2005 - loss 4.3 pence). The Board is not declaring an interim dividend. Operational Review Following the acquisition of two major new revival schemes at The Odeon Cinema, Kensington High Street and Lancaster Gate, opposite Hyde Park, the Group has seen an increase in fee income. New appointments are also in hand for both the Architectural and Interior Design companies. There remains one unsold apartment at the Phillimores. Upon the sale of this apartment the outstanding balance of our entitlement will be secured, which we anticipate by the end of our financial year to February 2007. The appeal against the Planning Inspectorate's Vicarage Gate decision in October 2005 is due to be heard in the High Court within the next four months. A positive outcome is anticipated, upon which a further application will be submitted. Following the successful launch of the Ambassadorial Show Apartment at 44-46 Park Street in October 2006 we expect that the majority of sales will be complete by the end of our financial year to February 2007. Depending on the timing of these sales, some profitshare entitlement can be expected during this financial year subject to completion of the scheme. Following an intensive period of consultation, a planning application for the proposed cinema and residential scheme for the Odeon site in Kensington High Street was submitted on 14th November 2006. A decision is due in the Spring of 2007, with a start on site in the same year. At Lancaster Gate, preparations for submitting a planning application will be complete by the end of November for a submission this year. This proposed variation to the existing residential consent comprising fewer larger family sized apartments for the revival of this imposing listed terrace. As ever, other new opportunities for acquisition are under review. Enquiries Northacre PLC Tel: 020 7349 8000 John Hunter, Chief Executive Manish Santilale, Finance Director Summarised Consolidated Profit and Loss Account (Unaudited) 6 Months 6 Months Year to to ended Note 31.8.2006 31.8.2005 28.2.2006 Unaudited Unaudited Audited £'000 £'000 £'000 Turnover 3 2,411 1,584 7,875 Cost of sales (621) (643) (2,125) ------- ------- ------- Gross Profit 1,790 941 5,750 Administrative expenses 4 (2,300) (1,964) (4,800) Other operating income 37 21 67 ------- ------- ------- Operating (Loss)/Profit (473) (1,002) 1,017 Share of profit from - - 13 associated undertakings ------- ------- ------- (Loss)/Profit on Ordinary Activities before Interest and (473) (1,002) 1,030 Investment Income Dividends received 30 40 70 Net interest payable (64) (14) (60) ------- ------- ------- (Loss)/Profit on Ordinary Activities before Taxation (507) (976) 1,040 Taxation 5 - - - ------- ------- ------- Retained (Loss)/Profit for 7 (507) (976) 1,040 the Period ======= ======= ======= Basic (loss)/profit per 8 (2.23)p (4.30)p 4.58p ordinary share Summarised Consolidated Balance Sheet (Unaudited) As at As at As at 31.8.2006 31.8.2005 28.2.2006 Note Unaudited Unaudited Audited £'000 £'000 £'000 Fixed Assets Intangible assets 8,198 9,459 8,829 Tangible assets 25 20 21 Investments 47 34 47 Investment in joint ventures 2,151 965 1,596 ------- ------- ------- 10,421 10,478 10,493 ------- ------- ------- Current Assets Stock and work in progress 113 21 24 Debtors 897 773 885 Cash at bank and in hand - - 427 ------- ------- ------- 1,010 794 1,336 Creditors: Amounts falling due within one year 6 (2,165) (5,189) (2,180) ------- ------- ------- Net Current Liabilities (1,155) (4,395) (844) ------- ------- ------- Total Assets less Current 9,266 6,083 9,649 Liabilities Creditors: Amounts falling due after more than one year (1,674) - (1,550) ------- ------- ------- Net Assets 7,592 6,083 8,099 ======= ======= ======= Capital and Reserves Share capital 568 568 568 Share premium account 17,449 17,449 17,449 Profit and loss account (10,425) (11,934) (9,918) ------- ------- ------- Shareholders' Funds 7 7,592 6,083 8,099 ======= ======= ======= Summarised Consolidated Cash Flow Statement (Unaudited) 6 Months 6 Months Year to to ended 31.8.2006 31.8.2005 28.2.2006 Note Unaudited Unaudited Audited £'000 £'000 £'000 Net Cash (Outflow)/Inflow from Operating Activities 9 (349) (306) 458 Returns on Investments and Servicing of Finance Interest received 7 2 7 Interest paid (71) (16) (67) Dividends received 30 40 70 ------- ------- ------- Net Cash (Outflow)/Inflow from Returns on Investments and Servicing of Finance (34) 26 10 ------- ------- ------- Taxation Corporation tax paid - - - ------- ------- ------- Capital Expenditure and Financial Investment Purchase of other tangible assets (10) - (9) ------- ------- ------- Net cash (outflow)/inflow for capital expenditure (10) - (9) ------- ------- ------- Acquisitions and Disposals Investment in joint venture (555) - (631) ------- ------- ------- Cash (Outflow)/Inflow before Management of Liquid Resources and Financing (948) (280) (172) Financing Increase/(decrease) in debt 124 - 490 ------- ------- ------- Net cash inflow/(outflow) from management of liquid resources and financing 124 - 490 ------- ------- ------- (Decrease)/Increase in Cash in the Period 10 (824) (280) 318 ======= ======= ======= Notes to the Unaudited Interim Financial Statements for the period ended 31st August 2006 1. Accounting Policies The interim financial statements have been prepared on the basis of the accounting policies set out in the 2006 Northacre PLC Annual Report. Going Concern The company and group meet their day to day working capital requirements partly through monies loaned from the Northacre PLC Directors Retirement and Death Benefit Scheme, partly from the group's bankers and partly from other loans. These facilities have been renewed during the period and are expected to remain in place for the forseeable future. In particular: (i) One of the loans due to the Northacre PLC Directors Retirement and Death Benefit Scheme of £1million is not due for repayment until 31st July 2008. (ii) Two further loans of £275,000 each, from the Northacre PLC Directors Retirement Benefit Scheme and from a third party are not repayable until the return of equity and/or realisation of profit share from one specific project, which is not expected to occur before August 2007. (iii) The group's current banking facilities are in place until August 2007. The directors have prepared detailed cash flow projections for the period ended 31st August 2007 making reasonable assumptions about the levels and timing of income and expenditure, and in particular the timing of receipt of certain fees due from major developments. These projections show that the group can operate within the available facilities. On this basis the directors consider it appropriate to prepare these interim financial statements on a going concern basis. 2 Financial Information The financial information contained in this document does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The comparative figures for the financial period ended 31st August 2005 have been extracted from the company's interim report for that financial period. The statutory accounts for the period ended 28th February 2006 have been given an unqualified audit report and have been filed with the Registrar of Companies. 3 Turnover The group's turnover has been analysed by principal activity as follows: 6 Months to 6 Months to Year ended 31.8.2006 31.8.2005 28.2.2006 Unaudited Unaudited Audited £'000 £'000 £'000 Profit Shares - - - 4,305 property development Development 795 496 1,647 management Interior design 777 677 1,214 Architect design 839 411 709 -------- -------- -------- 2,411 1,584 7,875 ======== ======== ======== 4. Administrative Expenses The administrative expenses of £2,300,335 (6 months to 31st August 2005: £1,963,973) include amortisation of goodwill of £630,604 (6 months to 31st August 2005: £630,604). 5. Taxation There is no taxation charge due to the availability of losses. 6. Creditors due within one year 31.8.2006 31.8.2005 28.2.2006 Unaudited Unaudited Audited £'000 £'000 £'000 Bank loans and overdrafts 397 170 - Trade creditors 453 531 250 Social security and other taxes 614 378 692 Other creditors 516 3,407 1,049 Accruals and deferred income 185 703 189 -------- -------- -------- 2,165 5,189 2,180 ======== ======== ======== 7. Shareholders' Funds £'000 The reconciliation of movements in shareholders' funds is as follows: Shareholders' funds at 1st March 2006 8,099 Retained loss for the period (507) -------- Shareholders' funds at 31st August 2006 7,592 ======== 8. Earnings Per Share The basic loss per share has been calculated on the loss on ordinary activities after tax of £507,203 (2005 - £975,793) and on the weighted average number of shares in issue in the six months to 31st August 2006 of 22,713,644 (2005 - 22,713,644). 9. Reconciliation of Operating (Loss)/Profit to Net Cash Flow from Operating Activities 6 Months to 6 Months to Year ended 31.8.2006 31.8.2005 28.2.2006 £'000 £'000 £'000 Group operating (loss)/profit (473) (1,002) 1,017 Depreciation 7 11 20 (Increase)/Decrease in work (89) 162 158 in progress (Increase)/Decrease in (13) (278) (389) debtors (Decrease)/Increase in (412) 170 (1,609) creditors Amortisation of goodwill 631 631 1,261 -------- -------- -------- Net cash (outflow)/inflow (349) (306) 458 from operating activities ======== ======== ======== 10. Reconciliation of Net Cash Flow to Movement in Net Debt 6 Months to 6 Months to Year ended 31.8.2006 31.8.2005 28.2.2006 £'000 £'000 £'000 (Decrease)/Increase in cash in the period (824) (280) 318 Cash (inflow)/outflow resulting from (increase)/decrease in debt (124) - (490) Net debt at start of period (1,123) (950) (951) -------- -------- -------- Net debt at end of period (2,071) (1,230) (1,123) ======== ======== ======== 11. Analysis of changes in Net Debt At Cash At 1.3.2006 Flow 31.8.2006 £'000 £'000 £'000 -------- Cash at bank and in hand 427 (427) - Bank loans and overdrafts - (397) (397) -------- (824) - -------- -------- Debt due within one year - - - Debt due after more than one year (1,550) (124) (1,674) -------- (124) -------- -------- -------- -------- (1,123) (948) (2,071) ======== ======== ======== 12 Dividends The directors do not recommend the payment of an interim dividend. 13 Other Information A copy of the interim statement will be posted to shareholders and made available to the public for a period of 14 days from today at the company's registered office: 48 Old Church Street, London SW3 5BY. Independent Review Report to Northacre Plc Introduction We have been instructed by the company to review the financial information for the six months ended 31st August 2006 which comprises the consolidated profit and loss account, the consolidated balance sheet, the consolidated cash flow statement and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed. Directors' Responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The Listing Rules of the London Stock Exchange require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31st August 2006. Kingston Smith LLP Chartered Accountants Devonshire House 60 Goswell Road London EC1M 7AD Date: 21 November 2006 This information is provided by RNS The company news service from the London Stock Exchange

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