Final Results

RNS Number : 8791L

Northacre PLC

30 April 2015

 

NORTHACRE PLC

(the ''Company'' or ''Group'')

Results for the period ended 31^st December 2014

Northacre PLC is pleased to announce its financial results for the period ended 31^st December 2014. The Annual Report and Accounts for the period then ended and Notice of the Company's Annual General Meeting, to be held at the Company's registered office at 10am on 2^nd June 2015, will be available shortly on the Company's website www.northacre.com and are being posted to those shareholders who have elected to receive hard copies.

Extracts from the Company's Annual Report and Accounts are shown below.

Enquiries:

Northacre PLC

Niccolò Barattieri di San Pietro (Chief Executive Officer)

020 7349 8000

finnCap Limited (Nominated Adviser and Broker)

Stuart Andrews

Henrik Persson

020 7220 0500

Chairman's Statement

There is a marked slowdown of activities in the London housing market with many potential purchasers waiting for the outcome of the May 2015 elections. Despite of the results, we don't believe that there will be any radical changes to the market's perception of London as the number one city in the world as a destination for ultra-high net worth individuals.

The London property market has a tendency to adjust itself and absorb whatever changes there may be, if any.

There is the inevitable pause in the London housing market as many potential purchasers await the outcome of the 2015 election. Irrespective of the results of the election, we do not believe that there will be a radical change in the market perception of London as the number one city in the world, a destination for ultra-high net worth individuals. The London residential market has historically adjusted itself and absorbed the various changes brought about by different governments.

The housing debate is steadily rising up the UK political agenda, and will continue to be a key issue. The construction of new homes at an affordable level will be at the forefront of future government programmes, and is likely to affect the attitude of the planning authorities towards the development of private housing for sale at the upper end of the market. The current re-focusing of the market towards the private rented sector could, however, open up further opportunities for companies prepared to invest in well-conceived and properly governed models for rental housing at both ends of the scale.

Klas Nilsson

Non-Executive Chairman

Date: 30^th April 2015

Chief Executive's Statement

The last ten months have seen Northacre PLC make good progress across all of our developments. We have also strategically rebranded our interior design business which is now called "N Studio", which signifies a more sophisticated approach intended to reflect and capture the increasingly discerning taste of high net worth individuals and our target market.

Current developments

1 Palace Street

We have been making steady progress throughout the period and every milestone has been achieved in accordance with our programme. On 11^th November 2014 we received planning consent for our revised scheme and by 30^th November 2014 we were already onsite starting the strip-out and demolition phase.

Vicarage Gate House

The complications we have encountered with the windows have escalated and this has caused delay to our practical completion date which has now been moved to mid-October 2015. The vast majority of the windows have now been installed hence the rest of the fit-out can move forward at a much faster pace.

In respect of sales throughout the period, we have exchanged on five units. We are seeing more appetite from buyers as they can now get a much better feel for the development and the overall quality we are producing.

33 Thurloe Square

As highlighted in my statement last year, prior to starting the redevelopment of this site we received an unsolicited bid of £12.75m representing a significant premium to the market value of similar properties in similar condition. The transaction was completed on 25^th June 2014 and resulted in a net IRR of over 30% to our investors and a substantial return for Northacre PLC in terms of development management fees, performance fee and return on our invested equity.

13&14 Vicarage Gate

The last few months have seen significant progress on-site. All the structural alterations have been completed and the partition walls are mostly in place. We are expecting to have practical completion by January 2016.

On the sales front we will do a soft launch in June 2015 which will then become more proactive once the show apartment is ready at the end of August 2015.

Chester Square (with mews at the rear)

We have received planning approval for the creation of a basement and also to interconnect the two properties. The basement contractor has been selected and will be onsite as soon as all the preconditions have been discharged. The project is progressing well towards implementing our plans.

22 Prince Edward Mansions

On 1^st August 2014 we announced the completion of the acquisition of 22 Prince Edward Mansions by Northacre Capital (7) Limited, a wholly owned subsidiary of Northacre PLC. The unit was purchased in keeping with our new strategy for N Studio, and for the purpose of refurbishment and resale.

We are currently onsite and expect to reach practical completion by the end of 2015.

The Lancasters

The freehold interest in the property has now been transferred to the residents. We are in the process of finalising the last outstanding item which we hope to complete by the end of summer 2015.

Outlook

As a result of the upcoming general election in May 2015 the market in general has been quiet as expected. Nevertheless, it has been interesting to see that the market has become more selective and has been rewarding premium properties which satisfy all the requirements of buyers. On the other hand less impressive properties have struggled to sell. We believe that this trend will continue as buyers become more selective.

At Northacre, our differentiating value-add is the quality of our work and attention to detail which places our final product ahead of the crowd. We hope to continue to see ourselves as market leaders in the coming years.

Niccolò Barattieri di San Pietro

Chief Executive Officer

Date: 30^th April 2015

Financial Review

In the period under review our development management team was engaged on various projects including Vicarage Gate House, 1 Palace Street, 33 Thurloe Square, 13 & 14 Vicarage Gate and Chester Square. Increased activity on all of these projects was reflected in the results for the period to 31^st December 2014.

Consolidated Income Statement

Group revenue for the period increased to £3.9m (28^th February 2014: £3.0m), which reflected increased activity on the project development side of the business and a lower level of activity in N Studio, the Group's interior design business. Development management fee income increased to £3.6m (28^th February 2014: £1.0m) while N Studio's revenue fell by 89% to £0.2m (28^th February 2014: £2.0m). Between October 2014 and February 2015 N Studio rebranded and we expect increased activity in the coming years.

Administrative expenses decreased to £4.4m (28^th February 2014: £4.9m) reflecting the shorter 10 months financial period.

On 25^th June 2014 the Group announced the sale of the 33 Thurloe Square project. Under the terms of the Development Management Agreement Northacre PLC was entitled to development management and performance fees which are included in the revenue above. The Group was also entitled to a return on the invested equity of £1.5m and dividends received of £0.4m (28^th February 2014: The Lancasters dividends £15.0m) are recognised as investment revenue in the Consolidated Income Statement.

The Group reported a loss before tax of £1,858 (28^th February 2014: profit before tax £12.3m).

Consolidated Statement of Financial Position

As at 31^st December 2014 the Group had cash and cash equivalents of £2.5m (28^th February 2014: £21.2m). The decrease in cash held was primarily due to dividends paid of £15.0m, the additional investment of £1.2m in available for sale financial assets being the 1 Palace Street Development and the £4.2m purchase and associated development costs of 22 Prince Edward Mansions.

Financing

On 19^th September 2014 a loan facility of £3.2m was made available by the Royal Bank of Scotland in respect of the property at 22 Prince Edward Mansions. The loan is available on a drawdown basis and incurs interest at 3.25% above the LIBOR rate. The loan is due to be repaid the earlier of the latest expiry date of the current interest period outstanding as at the date of completion of sale of the property or the date which falls 18 months after the date on which the loan is drawn. As at 31^st December 2014 £1.0m was drawn. The loan is expected to be repaid in full prior to the end of the next financial year.

In the next financial year, the Group will focus on progressing and completing current projects while looking for new exciting opportunities.

Kasia Maciborska-Singh

Group Financial Controller

Consolidated Income Statement

For the 10 months ended 31^st December 2014

	Note		10 months ended 31st Dec 2014			12 months ended 28th Feb 2014
			£			£
Group
Group revenue	3		3,856,841			2,955,797
Cost of sales			25,092			(1,294,225)
Gross profit			3,881,933			1,661,572
Administrative expenses			(4,377,515)			(4,868,726)
Group loss from operations			(495,582)			(3,207,154)
Investment revenue	4		493,727			15,063,052
Profit on disposal of available for sale financial assets	5		-			111,213
Other gains	6		-			336,264
Finance costs	7		(3)			(100)
(Loss)/Profit for the year before taxation	8		(1,858)			12,303,275
Taxation	10		266,095			(102,993)
Profit for the year attributable to equity holders of the Company			264,237			12,200,282
Profit per Ordinary share
Basic - Continuing and total operations	22		0.62p			39.51p
Diluted - Continuing and total operations	22		0.62p			39.51p

Company
Profit for the year attributable to equity holders of the Company			5,402,344		44,703,358

Consolidated Statement of Comprehensive Income

For the 10 months ended 31^st December 2014

	Note		10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
			£		£
Group
Profit for the period attributable to equity holders of the Company			264,237		12,200,282
Other comprehensive loss:
Changes in fair value of available for sale financial assets	14(a)		-		(15,000,000)
Total comprehensive income/(loss) for the period			264,237		(2,799,718)

Company
Profit for the period attributable to equity holders of the Company			5,402,344		44,703,358
Other comprehensive income			-		-
Total comprehensive profit for the period	11		5,402,344		44,703,358

Consolidated Statement of Financial Position

As at 31^st December 2014 

	Note				31st Dec 2014				28th Feb 2014
					£				£
Non-current assets
Goodwill	12				8,007,417				8,007,417
Property, plant and equipment	13				721,525				822,739
Available for sale financial assets	14(a)				10,000,019				8,824,659
					18,728,961				17,654,815
Current assets
Inventories	15				4,192,123				168,559
Trade and other receivables	16				787,210				6,667,711
Cash and cash equivalents					2,510,305				21,239,909
					7,489,638				28,076,179
Total assets					26,218,599				45,730,994
Current liabilities
Trade and other payables	17				838,384				6,615,535
Borrowings, including lease finance	18				1,000,000				-
					1,838,384				6,615,535
Non-current liabilities
Borrowings, including lease finance					-				-
					-				-
Total liabilities					1,838,384				6,615,535
Equity
Share capital	23				1,058,388				1,058,388
Share premium account	23				22,565,286				22,565,286
Merger reserve	23				-				8,086,293
Retained earnings					756,541				7,405,492
Total equity					24,380,215				39,115,459
Total equity and liabilities					26,218,599				45,730,994
Approved by the Board on 30th April 2015
N. Barattieri di San Pietro.................................................

   Director

   Company registration no. 03442280

Company Statement of Financial Position

As at 31^st December 2014

	Note				31st Dec 2014				28th Feb 2014
					£				£
Non-current assets
Property, plant and equipment	13				728,963				823,633
Investments	14(b)				18,006,328				16,830,968
					18,735,291				17,654,601
Current assets
Trade and other receivables	16				8,999,218				10,110,093
Cash and cash equivalents					1,036,842				18,808,382
					10,036,060				28,918,475
Total assets					28,771,351				46,573,076
Current liabilities
Trade and other payables	17				1,576,073				9,780,661
Borrowings, including lease finance	18				-				-
					1,576,073				9,780,661
Non-current liabilities
Borrowings, including lease finance					-				-
					-				-
Total liabilities					1,576,073				9,780,661
Equity
Share capital	23				1,058,388				1,058,388
Share premium account	23				22,565,286				22,565,286
Merger reserve	23				-				8,086,293
Retained earnings					3,571,604				5,082,448
Total equity					27,195,278				36,792,415
Total equity and liabilities					28,771,351				46,573,076
Approved by the Board on 30th April 2015
N. Barattieri di San Pietro.................................................

  Director

  Company registration no. 03442280

Consolidated and Company Statements of Cash Flows

For the 10 months ended 31^st December 2014

		Group				Company
		10 months ended 31st Dec 2014		12 months ended 28th Feb 2014		10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
		£		£		£		£
Cash flows from operating activities
(Loss)/profit for the period before tax		(1,858)		12,303,275		5,350,239		44,227,761
Adjustments for:
Investment revenue		(493,727)		(15,063,052)		(7,763,727)		(42,756,665)
Finance costs		3		100		-		-
Loss on disposal of investments		-		1,108		-		1,108
Goodwill on acquisition less stamp duty paid		-		(368,287)		-		-
Profit on sale of available for sale financial assets		-		(111,213)		-		-
Fair value adjustment		-		(7,148,575)		-		-
Depreciation and amortisation		125,037		148,181		94,670		113,604
Increase in inventories		(4,023,564)		(13,748)		-		-
Decrease/(increase) in trade and other receivables		5,893,986		(4,834,599)		326,464		(8,849,164)
(Decrease)/increase in trade and other payables		(5,790,636)		5,350,579		(8,166,245)		(21,055,109)
Cash used in operations		(4,290,759)		(9,736,231)		(10,158,599)		(28,318,465)
Interest paid		(3)		(100)		-		-
Corporation tax - consortium relief refunded		266,095		3,292,776		798,173		2,375,362
Net cash used in operating activities		(4,024,667)		(6,443,555)		(9,360,426)		(25,943,103)
Cash flows from investing activities
Purchase of property, plant & equipment		(23,823)		(51,691)		-		-
Increase in available for sale financial assets/investments		(1,175,360)		(8,824,655)		(1,175,360)		(8,824,655)
Acquisition of subsidiary, net of cash acquired		-		10,502,191		-		-
Interest received		64,854		63,052		64,854		49,606
Dividends received		428,873		15,000,000		7,698,873		42,707,059
Net cash (used in)/generated from investing activities		(705,456)		16,688,897		6,588,367		33,932,010
Cash flows from financing activities
Proceeds from issue of shares		-		12,489,516		-		12,489,516
Proceeds from borrowings		1,000,000		-		-		-
Repayment of borrowings		-		-		-		-
Repayment of finance leases		-		-		-		-
Dividends paid		(14,999,481)		(10,689,457)		(14,999,481)		(10,689,457)
Net cash (used in)/generated from financing activities		(13,999,481)		1,800,059		(14,999,481)		1,800,059
(Decrease)/increase in cash and cash equivalents		(18,729,604)		12,045,401		(17,771,540)		9,788,966
Cash and cash equivalents at the beginning of the period		21,239,909		9,194,508		18,808,382		9,019,416
Cash and cash equivalents at the end of the period		2,510,305		21,239,909		1,036,842		18,808,382

Consolidated and Company Statements of Changes in Equity

For the 10 months ended 31^st December 2014

				Called Up		Share
				Share		Premium		Merger		Retained
Group				Capital		Account		Reserve		Earnings		Total
				£		£		£		£		£
As at 1st March 2013				668,091		18,552,361		-		20,894,667		40,115,119
Profit for the period				-		-		-		12,200,282		12,200,282
Other comprehensive loss for the period:
Changes in fair value of available for sale financial assets				-		-		-		(15,000,000)		(15,000,000)
Transactions with owners of the Company:
Issue of Ordinary shares				390,297		4,012,925		8,086,293		-		12,489,515
Dividends				-		-		-		(10,689,457)		(10,689,457)
As at 28th February 2014				1,058,388		22,565,286		8,086,293		7,405,492		39,115,459
As at 1st March 2014				1,058,388		22,565,286		8,086,293		7,405,492		39,115,459
Profit for the period				-		-		-		264,237		264,237
Transactions with owners of the Company:
Dividends				-		-		(8,086,293)		(6,913,188)		(14,999,481)
As at 31st December  2014				1,058,388		22,565,286		-		756,541		24,380,215
				Called Up		Share
				Share		Premium		Merger		Retained
Company				Capital		Account		Reserve		Earnings		Total
				£		£		£		£		£
As at 1st March 2013				668,091		18,552,361		-		(28,931,453)		(9,711,001)
Total comprehensive profit for the period				-		-		-		44,703,358		44,703,358
Transactions with owners of the Company:
Issue of Ordinary shares				390,297		4,012,925		8,086,293		-		12,489,515
Dividends				-		-		-		(10,689,457)		(10,689,457)
As at 28th February 2014				1,058,388		22,565,286		8,086,293		5,082,448		36,792,415
As at 1st March 2014				1,058,388		22,565,286		8,086,293		5,082,448		36,792,415
Total comprehensive profit for the period				-		-		-		5,402,344		5,402,344
Transactions with owners of the Company:
Dividends				-		-		(8,086,293)		(6,913,188)		(14,999,481)
As at 31st December 2014				1,058,388		22,565,286		-		3,571,604		27,195,278

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014

1.              Principal accounting policies

                The principal accounting policies are as follows:

Accounting basis and standards

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

The Company and its subsidiaries have shortened their reporting periods to 31^st December 2014 to be co-terminous with the ultimate parent undertaking Abu Dhabi Financial Group Limited. The amounts presented in the financial statements for the period ended 31^st December 2014 are thus not entirely comparable to the comparative amounts.

During the period ended 31^st December 2014 the Group adopted a number of new IFRS standards, interpretations, amendments and improvements to existing standards. These included IFRS10, IFRS11, IFRS12, IFRS13 and IAS1. These new standards and changes did not have any material impact on the Company's financial statements.

The following new standards, amendments to standards or interpretations are mandatory for the Group for the first time for the financial year beginning 1^st January 2015, but are not currently considered to be relevant to the Group (although they may affect the accounting for future transactions and events):

·      IFRS 9, 'Financial Instruments', issued in November 2009 and effective from 1^st January 2015. IFRS 9 represents the first phase of the IASB's project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. It sets out the classification and measurement criteria for financial assets and liabilities and requires all financial assets, including assets currently classified under IAS 39 as available for sale, to be measured at fair value through profit and loss unless the assets can be classified as held at amortised cost. Qualifying equity investments held at fair value may have their fair value changes taken through other comprehensive income by election.

·      IAS 19 (Revised), 'Employee Benefits' effective for periods beginning on or after 1^st July 2014. These amendments are intended to provide a clearer indication of an entity's obligations resulting from the provision of defined benefit pension plan and how those obligations will affect its financial position, financial performance and cash flow.

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1^st January 2015 and have not been early adopted:

·      IFRS9, 'Financial Instruments', effective for periods commencing on or after 1^st January 2018 but not yet adopted by the EU. This is the second and third phases of the project to replace IAS39 'Financial Instruments: Recognition and Measurement'.

·      IFRS15, 'Revenue from Contracts with Customers', effective for periods commencing on or after 1^st January 2017 but not yet adopted by the EU. This standard replaces IAS18, 'Revenue Recognition' and revenue recognition standards under US GAAP and aims to unify revenue recognition under IFRS and US GAAP. The standard focuses on entitlement to consideration as opposed to percentage completion under existing IFRS and introduces a five step approach to recognising income.

Business combinations and goodwill

Goodwill relating to acquisitions prior to 1^st March 2006 is carried at the net book value on that date and is no longer amortised but is subject to annual impairment review.  On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition.  Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill.  Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition.  Goodwill is tested annually for impairment.

Going Concern

The Company and Group currently meet their day-to-day working capital requirements through fees receivable from its projects: Vicarage Gate House, 13-14 Vicarage Gate, 1 Palace Street and Chester Square and also through the bank loan.

The Directors have prepared detailed cash flow projections for the period ending 31^st December 2019 making reasonable assumptions about the levels and timings 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 meet its on-going working capital requirements. On this basis the Directors consider it appropriate to prepare the financial statements on a going concern basis.

Significant judgements and estimates of areas of uncertainty

In preparing these financial statements the Directors are required to make judgements and best estimates of the outcome of and in particular, the timing of revenues, expenses, assets and liabilities based on assumptions. These assumptions are based on historical experience and various other factors that are considered reasonable under the various circumstances. The estimates and assumptions are reviewed on a regular basis with any revisions being applied in the relevant period. The material areas where estimates and assumptions are made are:

-     The valuation of goodwill

-     The valuation of available for sale financial assets

-     The status and progress of the developments and projects

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

1.              Principal accounting policies (continued)

Basis of consolidation

The Group financial statements include the financial statements of the Company and its subsidiary undertakings. Subsidiary undertakings are all entities over which the Group has the power to govern the financial and operating policies of the subsidiary and therefore exercises control. The existence and effect of both current voting rights and potential voting rights that are currently exercisable or convertible are considered when assessing whether control of an entity is exercised. Subsidiaries are consolidated from the date at which the Group obtains the relevant level of control and are de-consolidated from the date at which control ceases.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Property, plant and equipment

Property, plant and equipment are stated at historical cost, net of any depreciation and any provision for impairment.

Depreciation has been calculated on a straight line basis and aims to write off the costs, less estimated residual value of each property, plant and equipment over their expected useful lives using the following periods:

                Leasehold improvements                                          over the period of the lease

Fittings and office equipment                                    25% straight line

Computer equipment                                                                33 1/3% straight line

Impairment of assets

Assets that have an indefinite useful life are not subject to amortisation but are instead tested annually for impairment and are subject to additional impairment testing if events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Assets that are subject to depreciation and amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Indicators of impairment are reviewed annually.

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Any impairment charge is recognised in profit or loss in the year in which it occurs. When an impairment loss, other than an impairment loss on goodwill, subsequently reverses due to a change in the original estimate, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, up to the carrying amount that would have resulted, net of depreciation, had no impairment loss been recognised for the asset in prior years.

Inventories

Work in progress is valued at the lower of cost and net realisable value.  Cost of work in progress includes overheads appropriate to the stage of development.  Net realisable value is based upon estimated selling price less further costs expected to be incurred to completion and disposal.

Revenue

Revenue represents amounts earned by the Group in respect of services rendered during the period net of value added tax.  Shares in development profits and performance fees are recognised when the amounts involved have been finally determined and agreed criteria for recognition have been fulfilled. Fees in respect of project management and interior and architectural design are recognised in accordance with the stage of completion of the contract.

Current taxation

The tax expense for the year represents the total of current taxation and deferred taxation. The charge in respect of current taxation is based on the estimated taxable profit for the year. Taxable profit for the year is based on the profits as shown in profit or loss, as adjusted for items or expenditure, which are not deductible for tax purposes.

The current tax liability for the year is calculated using tax rates, which have either been enacted or substantively enacted at the reporting date.

Deferred taxation

Deferred tax is provided in full on all temporary differences arising between the tax base of assets and liabilities and their carrying values in the financial statements. The deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of transaction affects neither accounting nor taxable profit or loss.

Deferred tax is determined using tax rates which have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

 

1.              Principal accounting policies (continued)

Leased assets

Assets held under finance leases and hire purchase contracts are capitalised in the statement of financial position and depreciated over their expected useful lives.  The interest element of the rental obligations is charged to profit or loss over the period of the lease on a straight-line basis.

Rentals under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Investments

Investments in subsidiaries, associates and joint ventures, and other investments are presented in the Parent financial statements at cost, less any necessary provision for impairment.

Associates

Associates are all entities over which the Group exercise significant influence but does not exercise control. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost, which includes goodwill identified on acquisition, net of any accumulated impairment loss. The Group's share of its associate's profits or losses after acquisition of its interest is recognised in profit or loss and cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Where the Group's share of losses of an associate equals or exceeds the carrying amount of the investment, the Group only recognises further losses where it has incurred obligations or made payments on behalf of the associate.

Financial assets

Available for sale financial assets consist of equity investments in other companies or limited partnerships where the Group does not exercise either control or significant influence. The investments reflect loans and capital contributions made in respect of projects undertaken with other partners in which the Group will be entitled to an eventual profit share.

Available for sale financial assets are shown at fair value at each reporting date with changes in fair value being shown in Other Comprehensive Income, or at cost less any necessary provision for impairment where a reliable estimate of fair value is not able to be determined. In cases where the Group can reliably estimate fair value of the available for sale financial assets, fair value will be determined in reference to practical completion of each development project.

All assets for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

·      Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

·      Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

·      Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

The valuation technique applied to the available for sale financial assets in the current and preceding period is a Level 3 technique.

Pensions

The Group operates a defined contribution pension scheme under which fixed contributions are payable. Pension costs charged to the income statement represent amounts payable to the scheme during the year.

Foreign currency translation

Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Assets and liabilities are translated at the rate of exchange ruling at the reporting date. Exchange differences are taken into account in arriving at Group operating profit.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are charged to the share premium account.

Equity balances

·      Called up share capital represents the aggregate nominal value of ordinary shares in issue.

·      The share premium account represents the incremental paid up capital above the nominal value of ordinary shares issued.

·      The merger reserve represents the excess over nominal value of the fair value of consideration received for equity shares issued directly to acquire another entity meeting the specific requirements of section 612 of the Companies Act 2006.

Financial assets - loans and receivables

Trade receivables, loans and other receivables are classified as 'trade and other receivables' and are measured at cost less any provisions. Interest income is recognised by applying the appropriate interest rate of the contractual arrangement.

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

1.              Principal accounting policies (continued)

Financial liabilities - loans and payables and borrowings

Trade payables, other payables and borrowings are classified as 'trade and other payables' and 'borrowings, including lease finance'. These are measured at amortised cost and the interest expense is recognised by applying the appropriate interest rate of the contractual arrangement.

Borrowings

Interest-bearing borrowings are recognised initially at fair value, net of any transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective interest method with any differences between the proceeds (net of transaction costs) and the redemption value being recognised over the period of borrowings.

All borrowings are classified as current unless the Group has an unconditional right to defer payment of the borrowings until at least twelve months from the reporting date.

Borrowing costs which relate directly to a development which is included within inventories are capitalised as part of the cost of the inventory.

2.             Capital and financial risk management

The Group manages its capital to ensure that the Group will be able to continue as a going concern, while maximising the return to shareholders through the optimisation of its debt and equity balance.

The capital structure of the Group consists of cash and cash equivalents, debt and equity attributable to equity holders of the Parent Company, comprising issued capital, share premium account and retained earnings.

The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends payable to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt or increase capital.

The Board regularly reviews the capital structure, with an objective to minimise net debt whilst investing in the development opportunities.

The Group's activities expose it to a variety of financial risks and those activities involve the analysis, evaluation, acceptance and management of some degree of risk or combination of risks. Taking risk is core to the property business and the operational risks are an inevitable consequence of being in business. The Group's aim is to achieve an appropriate balance between risk and return and minimise potential adverse effects on the Group's performance.

The Group's risk management policies are designed to identify and analyse these risks, to set appropriate risk limits and controls, and to monitor the risks by means of a reliable up-to-date information system. The Group regularly reviews its risk management policies and systems to reflect changes in markets, products and emerging best practice.

Risk management is carried out by the Board of Directors. Directors are responsible for the identification of the major business risks faced by the Group and for determining the appropriate course of action to manage those risks. The most important types of risk are credit risk, liquidity and market risk. Market risk includes currency, interest rate and other price risks.

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

3.	Segmental information
	Segmental information is presented in respect of the Group's business segments. The business segments are based on the Group's corporate and internal reporting structure. Segment results and assets include items directly attributable to a segment as well as those that can be allocated to a segment on a reasonable basis. The segmental analysis of the Group's business as reported internally to management is as follows:
	Revenue
									10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
	Principal activities:								£		£
	Development management								3,554,800		900,705
	Interior design								214,541		1,991,837
	Architectural design								87,500		63,255
									3,856,841		2,955,797
	(Loss)/profit before taxation								10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
									£		£
	Development management								505,910		12,364,592
	Interior design								(585,943)		(105,086)
	Architectural design								78,175		43,769
									(1,858)		12,303,275
	Assets								31st Dec 2014		28th Feb 2014
									£		£
	Development management								26,017,628		45,138,754
	Interior design								86,839		454,183
	Architectural design								114,132		138,057
									26,218,599		45,730,994
	Liabilities								31st Dec 2014		28th Feb 2014
									£		£
	Development management								365,962		5,259,612
	Interior design								769,522		550,923
	Architectural design								702,900		805,000
									1,838,384		6,615,535
	A geographical analysis of the Group's revenue, assets and liabilities is given below:
	Revenue								10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
									£		£
	United Kingdom								3,880,379		2,536,571
	Saudi Arabia								(23,538)		396,162
	USA								-		23,064
									3,856,841		2,955,797
	Included in the revenue above are revenues in respect of customers who account for over 10% of the Group's total revenue.
									10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
									£		£
	Customer A (Interior design)								(23,538)		396,162
	Customer B (Development management)								642,486		-
	Customer C (Interior design)								-		707,113
	Customer D (Development management & interior design)								438,462		326,669
	Customer E (Interior design)								-		422,206
	Customer F (Development management)								2,420,487		509,783

 

 

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

3.	Segmental information (continued)
	Assets							31st Dec 2014		28th Feb 2014
								£		£
	United Kingdom							26,218,599		45,618,042
	Saudi Arabia							-		112,952
								26,218,599		45,730,994
	Liabilities							31st Dec 2014		28th Feb 2014
								£		£
	United Kingdom							1,838,384		6,544,924
	Saudi Arabia							-		70,611
								1,838,384		6,615,535

4.	Investment revenue							10 months		12 months
								ended		ended
								31st Dec 2014		28th Feb 2014
								£		£
	Interest received							64,854		63,052
	Dividends received							428,873		15,000,000
								493,727		15,063,052

5.	Profit on disposal of available for sale financial assets							10 months		12 months
								ended		ended
								31st Dec 2014		28th Feb 2014
								£		£
	Derecognition of available for sale financial assets							-		(7,148,575)
	Change in fair value of available for sale financial assets previously recognised in Other Comprehensive Income							-		7,259,788
								-		111,213

The profit on disposal of available for sale financial assets arose following the acquisition of Lancaster Gate (Hyde Park) Limited on 16^th December 2013.         The loss of £7.1m represented all gains recognised and booked to Other Comprehensive Income up to the time of derecognition of available for sale financial assets, as these gains are required to be transferred to the Consolidated Income Statement after the available for sale financial assets have been sold.

6.	Other gains							10 months		12 months
								ended		ended
								31st Dec 2014		28th Feb 2014
								£		£
	Written off share capital of dissolved dormant Group's subsidiaries							-		(1,108)
	Negative goodwill arising on acquisition of Lancaster Gate (Hyde Park) Limited							-		337,372
								-		336,264

7.	Finance costs											10 months		12 months
												ended		ended
												31st Dec 2014		28th Feb 2014
												£		£
	Interest on:
		Other interest										3		-
		Tax penalties										-		100
												3		100

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

8.	(Loss)/Profit before taxation							10 months		12 months
								ended 31st Dec 2014		ended 28th Feb 2014
								£		£
	(Loss)/Profit before taxation is stated after charging:
	Depreciation and amounts written off property, plant and equipment:
	Owned assets							125,037		148,181
	Operating lease rentals:
	Land and buildings							104,969		125,062
	Foreign exchange loss							-		41
	Fees payable to the Company's auditors for:
	- the audit of the Company's annual accounts							55,857		44,446
	Fees payable to the Company's auditors for other services to the Group:
	- the audit of the Company's subsidiaries							33,600		42,828
	Total audit fees							89,457		87,274
	Fees payable to the Company's auditors for:
	- taxation compliance services							-		10,537
	- other taxation advisory services							5,000		4,000
	- other services							16,762		31,158
	Total other fees							21,762		45,695

9.	Employees						10 months		12 months
							ended		ended
							31st Dec 2014		28th Feb 2014
							Number		Number
	The average weekly number of employees (including Directors) during the year was:
	Office and management						12		12
	Design and management						12		11
							24		23
							10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
	Staff costs for the above employees:						£		£
	Wages and salaries						1,691,496		1,821,228
	Social security costs						184,657		62,702
	Other pension costs - money purchase schemes						65,344		74,068
							1,941,497		1,957,998
	Remuneration in respect of Directors was as follows:						10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
							£		£
	Aggregate emoluments (including benefits in kind)						475,000		655,264
	Consultancy fees						100,050		57,150
	Other fees						25,000		40,000
							600,050		752,414
	Company contribution to money purchase pension schemes						27,500		23,354

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

9.	Employees (Continued)
	Remuneration for each Director (including benefits in kind)						10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
							£		£
	M. Kheriba						-		-
	J. Alseddiqi						-		-
	N. Barattieri di San Pietro						416,667		213,000
	K.B. Nilsson						158,383		127,150
	E.B. Harris						25,000		30,000
	M.F. Williams (resigned 27th March 2013)						-		10,000
	K. MacRae (resigned 19th June 2013)						-		344,764
	M.A. AlRafi (resigned 25th June 2013)						-		10,000
	A. de Rothschild (resigned 11th February 2014)						-		17,500
							600,050		752,414
	Remuneration of £25,000 (28th February 2014: £30,000) for Director E.B. Harris is payable to EC Harris LLP.
	Remuneration in respect of the highest paid Director was as follows:						10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
							£		£
	Aggregate emoluments (including benefits in kind)						416,667		344,764
	Company contribution to money purchase pension scheme						27,500		6,854
							444,167		351,618
	The total emoluments of £416,667 (28th February 2014: £344,764) above includes compensation for loss of office of £nil (28th February 2014: £251,500) and bonus of £187,500 (28th February 2014: £nil). The Directors consider that the key management personnel for reporting purposes as defined by IAS24 'Related Party Disclosures' are the Directors themselves only.

10.	Taxation						10 months			12 months
							ended			ended
							31st Dec 2014			28th Feb 2014
							£			£
	(a) Analysis of charge in year
	Current tax:
	Corporation tax credit						-			-
	Adjustment in respect of prior periods						(347,727)			311,298
	Total current tax						(347,727)			311,298
	Deferred tax:
	Deferred tax charge/(credit)						81,632			(208,305)
	Total deferred tax charge/(credit)						81,632			(208,305)
	Total tax (credit)/charge						(266,095)			102,993
	(b) Factors affecting the tax charge for the year
	The tax assessed for the year is lower than the standard rate of corporation tax in the UK of 21% (2014: 23%).
	The differences are explained below:
								10 months ended 31st Dec 2014		12 months ended 28th Feb 2014
								£		£
	(Loss)/Profit on ordinary activities before tax							(1,858)		12,303,275
	(Loss)/Profit on ordinary activities multiplied by the standard rate of corporation tax of 21% (2014: 23%)							(390)		2,829,753
	Effects of:
	Expenses not deductible for tax purposes							2,339		19,851
	Depreciation for the period in excess of capital allowances							26,258		18,919
	Dividends and distributions received							(90,063)		(3,450,000)
	Utilisation of tax losses							(314,450)		666,704
	Other timing differences							(103,709)		(328,727)
	Loss carried forward							480,015		243,500
	Consortium relief in respect of prior periods							(347,727)		311,298
	Current tax (credit)/charge for the period							(347,727)		311,298

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

  10.        Taxation (continued)

(c) Factors that may affect future tax charges

The standard rate of corporation tax was reduced to 21% from 1^st April 2014.

   11.            Profit of the parent company

As permitted by section 408 of the Companies Act 2006, the profit or loss element of the Parent Company Income Statement is not presented as part of these financial statements.  The Group profit for the period ended 31st December 2014 of £264,237 (28th February 2014: £12,200,282) includes a profit of £5,402,344 (28th February 2014: £44,703,358), which was dealt with in the financial statements of the Company.

12.	Goodwill
	Group								31st Dec 2014		28th Feb 2014
									£		£
	Cost								14,940,474		14,940,474
	Amortisation and impairment
	At the beginning of the year								6,933,057		6,933,057
	Impairment charge for the year								-		-
	At the end of the year								6,933,057		6,933,057
	Net book value								8,007,417		8,007,417

	The Group performs an annual goodwill impairment review in accordance with IAS 36 'Impairment of Assets' based on its cash generating units (CGUs). The CGU that has associated goodwill allocated to it is the Group as a whole. This is the smallest identifiable group of assets that generate cash inflows to which goodwill is allocated.  Although the interior design business is a separate CGU goodwill was not specifically allocated to it when the goodwill arose because it was treated as an integrated business when the Group was originally restructured. The Directors consider that it is now not appropriate to allocate goodwill to this CGU. Recoverable amount In accordance with IAS 36 the recoverable amount of the CGU is calculated, being the higher of value in use and fair value less costs to sell. The fair value less costs to sell of the CGU is determined using cash flow projections derived from the business plan covering a five year period which has been approved by the Board. They reflect the Directors' expectations of the level and timing of revenue, expenses, working capital and operating cash flows, based on past experience and future expectations of business performance particularly future development projects. Discount rates The pre-tax discount rate applied to the cash flow projections are derived from the Group's weighted average cost of capital. The discount rate applied is 6% (28th February 2014: 6%) reflecting the future expected cost of capital for the Group. Growth rates Due to the nature of the Group's development business growth rates are not relevant. The cash flow projections assume a 100% probability of receiving a level of development fees over the five years and make assumptions on the probability of achieving certain development performance fee criteria. The business growth rates have been assumed to be 5% (28th February 2014: nil) for the N Studio Limited interior design business. Sensitivity analysis The following percentage changes in assumptions would cause the recoverable amount to fall below the current carrying value: • A 91.5% increase in the discount rate to 97.5% for the latter five year period • A 28% decrease in the development revenue cash flows over the five year period • A decrease to nil in the other interior design revenue cash flows over the five year period would not cause the recoverable amount to fall below the current carrying value.

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

13.	Property, plant and equipment
							Fittings
	Group				Leasehold		and Office		Computer
					Improvements		Equipment		Equipment		Total
	Cost				£		£		£		£
	At 1st March 2013				1,115,434		70,672		208,469		1,394,575
	Additions				-		2,754		48,937		51,691
	At 28th February 2014				1,115,434		73,426		257,406		1,446,266
	Additions				-		594		23,229		23,823
	At 31st December 2014				1,115,434		74,020		280,635		1,470,089
	Depreciation
	At 1st March 2013				236,677		45,643		193,026		475,346
	Charge for the year				113,604		10,544		24,033		148,181
	At 28th February 2014				350,281		56,187		217,059		623,527
	Charge for the year				94,670		8,922		21,445		125,037
	At 31st December 2014				444,951		65,109		238,504		748,564
	Net book value
	At 31st December 2014				670,483		8,911		42,131		721,525
	At 28th February 2014				765,153		17,239		40,347		822,739
	At 28th February 2013				878,757		25,029		15,443		919,229

							Fittings
	Company				Leasehold		and Office		Computer
					Improvements		Equipment		Equipment		Total
	Cost				£		£		£		£
	At 1st March 2013				1,173,914		-		-		1,173,914
	Disposals				-		-		-		-
	At 28th February 2014				1,173,914		-		-		1,173,914
	Additions				-		-		-		-
	At 31st December 2014				1,173,914		-		-		1,173,914
	Depreciation
	At 1st March 2013				236,677		-		-		236,677
	Charge for the year				113,604		-		-		113,604
	At 28th February 2014				350,281		-		-		350,281
	Charge for the year				94,670		-		-		94,670
	At 31st December 2014				444,951		-		-		444,951
	Net book value
	At 31st December 2014				728,963		-		-		728,963
	At 28th February 2014				823,633		-		-		823,633
	At 28th February 2013				937,237		-		-		937,237

There were no assets held under finance lease or hire purchase contracts.

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

(a)	Available for sale financial assets
14.		Investments
		Group				31st Dec 2014			31st Dec 2014		28th Feb 2014		28th Feb 2014
						£			£		£		£
		At 1st March							8,824,659				22,148,579
		Dividend received				-					(15,000,000)
		Derecognition				-					(7,148,575)
		Increase in 1 Palace Street fair value				1,175,360					8,824,655
		Net movement transferred to/(from) comprehensive income							1,175,360				(13,323,920)
		At 31st December 2014							10,000,019				8,824,659
		Net book value
		At 31st December 2014							10,000,019				8,824,659
		The increase in available for sale financial assets represents the additional investment in the 1 Palace Street Development. The Company was committed to invest £10.0m into the 1 Palace Street Development. At 31st December 2014 the Company had paid the commitment. The £15 investment in 33 Thurloe Square represents a 15% equity stake. The 33 Thurloe Square Development was sold during the period and the £15 investment will be refunded in the next financial year.

(b)	Other investments
	Company
										Subsidiary				Other					Total
										Undertakings				Investments
										£				£					£
	Cost
	At 1st March 2014									14,492,681				8,824,655					23,317,336
	Additions									-				1,175,360					1,175,360
	As at 31st December 2014									14,492,681				10,000,015					24,492,696
	Impairment
	At 1st March 2014									6,486,368				-					6,486,368
	Impairment in the year									-				-					-
	As at 31st December 2014									6,486,368				-					6,486,368
	Net book value as at 31st December 2014									8,006,313				10,000,015					18,006,328
	Net book value as at 28th February 2014									8,006,313				8,824,655					16,830,968

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

(b)	Other investments (continued)
	Company
										Subsidiary				Other					Total
										Undertakings				Investments
										£				£					£
	Cost
	At 1st March 2013									14,492,681				-					14,492,681
	Additions									-				8,824,655					8,824,655
	As at 28th February 2014									14,492,681				8,824,655					23,317,336
	Impairment
	At 1st March 2013									6,485,260				-					6,485,260
	Impairment in the year									1,108				-					1,108
	As at 28th February 2014									6,486,368				-					6,486,368
	Net book value as at 28th February 2014									8,006,313				8,824,655					16,830,968
	Net book value as at 28th February 2013									8,007,421				-					8,007,421

(c)

Group shareholdings

The Group has shareholdings in the following companies, all incorporated in England and Wales:

Subsidiary undertakings

Holding

Proportion held

Nature of Business

Waterloo Investments Limited

Ordinary shares

100%

Development management services

N Studio Limited

Ordinary shares

100%

Interior design

Northacre Development Management

Ordinary shares

100%

Development management services

Services Limited

Nilsson Architects Limited

Ordinary shares

100%

Design architects

Northacre Capital (1) Limited

Ordinary shares

100%

Dormant

Northacre Capital (3) Limited

Ordinary shares

100%

Dormant

Northacre Capital (5) Limited

Ordinary shares

100%

Property development

Northacre Capital (7) Limited

Ordinary shares

100%

Property development

Northacre International Limited

Ordinary shares

100%

Dormant

Lancaster Gate (Hyde Park) Limited

Ordinary shares

100%

Property development

Intarya Limited changed its name to N Studio Limited on 9th October 2014.

The holding in Lancaster Gate (Hyde Park) Limited is held by Northacre Capital (5) Limited.

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

15.	Inventories									Group
										31st Dec 2014		28th Feb 2014
										£		£
	Stock									2,928		9,099
	Work in progress									4,189,195		159,460
										4,192,123		168,559
	The Company had no stock or work in progress in either the prior or current reporting period.

16.	Trade and other receivables					Group				Company
						31st Dec 2014		28th Feb 2014		31st Dec 2014		28th Feb 2014
						£		£		£		£
	Trade receivables					31,568		3,763,209		-		-
	Amounts owed by group undertakings					-		-		8,567,254		7,096,422
	Other receivables					220,038		2,734,177		110,908		2,891,453
	Prepayments and accrued income					535,604		170,325		321,056		122,218
						787,210		6,667,711		8,999,218		10,110,093
	At the period end there was no provision for doubtful debts (28th February 2014: £nil). Included within other receivables is a total of £nil (28th February 2014: £1,459,774) which represented amounts paid on behalf of  Bassamey Property Holdings Limited, a vehicle which acquired the 33 Thurloe Square project. The shareholder loan was repaid following the sale of the project in June 2014.
	A deferred tax asset of £nil (28th February 2014: £208,305) has been recognised on losses carried forward and is included in other receivables.

17.	Trade and other payables					Group				Company
						31st Dec 2014		28th Feb 2014		31st Dec 2014		28th Feb 2014
						£		£		£		£
	Trade payables					67,555		297,211		34,720		54,223
	Amounts owed to group undertakings					-		-		1,141,065		8,411,065
	Social security and other taxes					199,440		534,829		130,186		16,092
	Other payables					2,064		5,055		1,589		2,270
	Accruals and deferred income					569,325		5,778,440		268,513		1,297,011
						838,384		6,615,535		1,576,073		9,780,661

18.	Borrowings, including lease finance					Group				Company
	Current Liabilities					31st Dec 2014		28th Feb 2014		31st Dec 2014		28th Feb 2014
						£		£		£		£
	Bank loan					1,000,000		-		-		-
						1,000,000		-		-		-
	A loan facility of £3,150,000 was made available by the Royal Bank of Scotland from the 19th September 2014 to Northacre Capital (7) Limited in respect of the property at 22 Prince Edward Mansions. The loan is available on a drawdown basis and as at 31st December 2014 £1,000,000 was drawn. The loan incurs interest at 3.25% above the LIBOR rate and is charged quarterly. The loan is due to be repaid the earlier of the latest expiry date of the current interest period outstanding as at the date of completion of sale of the property or the date which falls 18 months after the date on which the loan is drawn. The loan is expected to be repaid in full prior to the end of the next financial year. The loan is secured via a first legal charge over the property included within inventories under the heading of work in progress, a guarantee for £120,000 given by Northacre PLC and a charge over certain cash balances.

19.	Corporation tax					Group				Company
						31st Dec 2014		28th Feb 2014		31st Dec 2014		28th Feb 2014
						£		£		£		£
	Corporation Tax					-		-		-		-
						-		-		-		-

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

20.	Future financial commitments
	Operating leases					Group				Company
						31st Dec 2014		28th Feb 2014		31st Dec 2014		28th Feb 2014
						£		£		£		£
						Land & Buildings		Land & Buildings		Land & Buildings		Land & Buildings
	Net amount payable on operating leases which expire:
	Within one year					147,975		147,975		147,975		147,975
	In two to five years					591,900		591,900		591,900		591,900
	In over five years					206,760		330,815		206,760		330,815
						946,635		1,070,690		946,635		1,070,690

						Group				Company
	Operating leases					31st Dec 2014		28th Feb 2014		31st Dec 2014		28th Feb 2014
						£		£		£		£
						Other		Other		Other		Other
	Net amount payable on operating leases which expire:
	Within one year					29,148		31,804		12,920		12,920
	In two to five years					7,042		33,465		6,460		19,380
	In over five years					-		-		-		-
						36,190		65,269		19,380		32,300

21.

Capital commitments

At the reporting date there were no outstanding commitments for capital expenditure.

22.

Earnings per share

Profit per share of 0.62p (28th February 2014: 39.51p) is calculated on the profit attributable to Ordinary shares of £264,237 (28th February 2014: £12,200,282) divided by the weighted number of Ordinary shares in issue during the period.

Computation of basic earnings per share:

31st Dec 2014

28th Feb 2014

Net profit

£264,237

£12,200,282

Weighted average number of shares outstanding

42,335,538

30,879,049

Basic profit per share

0.62p

39.51p

Diluted profit per share

0.62p

39.51p

There were no potentially dilutive instruments in issue during the current or preceding period. All amounts shown relate to continuing operations.

23.	Equity
	Share capital									31st Dec 2014			28th Feb 2014
											£		£
	Called up, allotted and fully paid:
	42,335,538 (28th February 2014: 42,335,538) Ordinary shares of 2.5p each										1,058,388		1,058,388
											1,058,388		1,058,388
	Share premium account and reserves										Share premium		Merger reserve
											£		£
	At 1st March 2014										22,565,287		8,086,293
	Dividends paid										-		(8,086,293)
	At 31st December 2014										22,565,287		-
	The share premium account represents the incremental paid up capital above the nominal value of the Ordinary shares of 2.5p issued.
	The merger reserve was created in December 2013 on the issue of 10,433,927 shares to Spadille Limited in consideration for the acquisition of NTA CB

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

  23.       Equity (continued)

Limited (Cash Box Acquisition) with sole assets of £8,347,142. NTA CB Limited has been dissolved following the completion of the transaction. The merger reserve was cancelled on declaration of dividends in August 2014.

 24.        Dividends

										31st Dec 2014			28th Feb 2014
											£		£
	A special dividend paid during the period of 35.43p (28th February 2014: 40p)										14,999,481		10,689,457
											14,999,481		10,689,457
	No further dividends have been declared prior to the approval of these financial statements and the Board will continue to actively consider the payment of dividends.

  25.      Contingent liabilities

The Company is included in a group registration for VAT purposes and is therefore jointly and severally liable for all other group companies' VAT liabilities amounting to £nil (28^th February 2014: £477,048).

26.	Related party transactions
	Group
	The Group's related parties as defined by International Accounting Standard 24 (revised), the nature of the relationship and the amount of transactions
	with them during the period were as follows:
			Nature of		10 months ended 31st Dec 2014				12 months ended 28th February 2014
	Related Party		Relationship		£		£		£	£		Nature of Transactions
					Total transactions in the period		Balance at the period end		Total transactions in the year	Balance at the year end
	K. Nilsson		1		100,050		-		57,150	(57,150)		Consultancy fees for services
												provided for the 1 Palace Street project for the period March 2014 to December 2014. The consultancy fees were invoiced to Palace Revive Development Limited and paid by that company post year end
	E.B. Harris		2		25,000		(25,000)		30,000	(30,000)		Non-executive Directors' fees for
												the March 2014 to December 2014 invoiced from E.C. Harris LLP
	M. Williams		3		-		-		10,000	-		Non-executive Directors' fees for
												March 2013
	M.A. AlRafi		4		-		-		10,000	-		Executive Directors' fees for the
												period March 2013 to June 2013
	M.A. AlRafi		4		-		-		-	(975,000)		Bonus of £1,000,000 was payable
												from The Lancasters Development dividends. £25,000 was paid on 28th November 2012 and the balance of £975,000 was paid on 28th March 2014
	A. de Rothschild		5		-		(17,500)		17,500	(17,500)		Non-executive Directors' fees for
												the period July 2013 to February 2014
	ADCM Limited		6		1,042,466		-		1,100,000	-		Consultancy fees charged for the
												period March 2014 to December 2014 with £1,200,000 being paid in the period
	ADCM Limited		6		63,310		1,882		116,544	27,596		Expenses charged by ADCM
												Limited as per the consultancy agreement. £1,882 represents a credit from ADCM Limited outstanding at the period end

Notes to the Consolidated Financial Statements

For the 10 months ended 31^st December 2014 (Continued)

26.		Related party transactions (continued)
				Nature of			10 months ended 31st Dec 2014					12 months ended 28th February 2014
		Related Party		Relationship			£			£		£			£			Nature of Transactions
							Total transactions in the period			Balance at the period end		Total transactions in the year			Balance at the year end
		Palace Revive		7			-			-		2,705,004			-			Development management fees
		Development Limited																invoiced for the period January 2014 to December 2014 as per the development management agreement. £2,705,004 was received in advance in the prior year for the period January 2014 to December 2014
		Palace Revive		7			166,317			-		58,949			10,770			Expenses paid on behalf of Palace
		Development Limited																Revive Development Limited. The £10,770 at the prior year end represented expenses paid but not reclaimed
		Palace Real Estate		8			1,175,360			10,000,000		8,824,640			8,824,640			Amount invested by Northacre PLC
		Partners LP																into Palace Real Estate Partners LP to develop the 1 Palace Street project
	Nature of Relationships
1	K.B. Nilsson is a Director of the Company.
2	E.B. Harris is a Director of the Company, and a member of E.C. Harris LLP.
3	M. Williams was a Director of the Company (resigned on 27th March 2013).
4	M.A. AlRafi was a Director of the Company (resigned on 25th June 2013).
5	A. de Rothschild was a Director of the Company (resigned on 11th February 2014)
6	ADCM Limited is a fully owned subsidiary of ADFG, the Group's ultimate parent company.
7	Palace Revive Development Limited is a company set up to develop the 1 Palace Street Development and is controlled by ADCM Limited.
8	Palace Real Estate Partners LP is a partnership that controls Palace Revive Development Limited. Northacre PLC is a limited member of Palace Real Estate
	Partners LP.

Company

The Directors' and pension fund transactions in the Company are included in the Group disclosure above. In addition to these, the Company has the following related party transactions as defined by International Accounting Standard 24 (revised).

Nature of

10 months ended 31st Dec 2014

12 months ended 28th February 2014

Related Party

Relationship

£

£

£

£

Nature of Transactions

Total transactions in the period

Balance at the year period

Total transactions in the year

Balance at the year end

Group entities

1

216,712

-

231,000

-

Management fees receivable

in the period from Group

subsidiaries provided at arm's length

Group entities

1

(42,655)

-

(60,000)

-

Management fees payable in

the period to Group subsidiaries  provided at arm's

length

Nature of Relationships

1

The Group entities are wholly owned subsidiaries of the Company.

The balances at the reporting date are shown under notes 16 and 17 of the Consolidated Financial Statements.

27.     Immediate and ultimate parent undertakings

The immediate and ultimate parent undertakings are Spadille Limited, a company incorporated in England and Wales, and Abu Dhabi Financial Group LLC, a company incorporated in United Arab Emirates, respectively.

 

END

 

 

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