Final Results

For release: 7am 30 September 2008 Trafalgar New Homes plc (the "Company") Final Results KEY DEVELOPMENT DURING THE PERIOD: - March 2008: New funding facility signed with Bank of Ireland. KEY DEVELOPMENT POST PERIOD: - July 2008: Construction started on site in Mitcham, Surrey. CHAIRMAN'S STATEMENT: The results for the year ended 31 March 2008 reflect the fact that the Company had no activity during the period in terms of trading or development. Despite this, I am pleased to report that following the successful refinancing with Bank of Ireland in July 2008, construction work started on our development site of 9 town houses in Heyford Road, Mitcham, Surrey. The Bank of Ireland provided funding of up to £2.05m for the development. In addition, I loaned the Company £335,000, entered into personal guarantees amounting to £150,000 and extended an additional cost overrun personal guarantee of a further £150,000. This is a testament to my belief in the value of our primary project. Notwithstanding the difficult market conditions, we remain optimistic about the future of the Company and are actively seeking further opportunities to enhance shareholder value. I would like to take this opportunity to thank the founding Directors, Ashley Sheldrick and Kulvir Virk for their efforts and time with the Company. Ashley and Kulvir resigned as Directors in March 2008 but remain key shareholders in the Company and we look forward to their continued support. We will continue to update shareholders with our progress on the Mitcham development and with regards to any further opportunities that arise during the course of this year. Robert McKendrick Executive Chairman The Directors of the issuer accept responsibility for this announcement. For further information please contact: Trafalgar New Homes plc 07836 722840 Andy Moore SVS Securities plc 020 7638 5600 Ian Callaway Peter Manfield For further information about the Company: www.trafalgar-newhomes.co.uk FINANCIAL RESULTS: PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2008: 2008 2007 Notes £ £ TURNOVER - - Administrative expenses 72,573 14,857 OPERATING LOSS 3 (72,573) (14,857) Interest payable and similar 4 6,024 1,249 charges LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (78,597) (16,106) Tax on loss on ordinary 5 - - activities LOSS FOR THE FINANCIAL YEAR AFTER TAXATION (78,597) (16,106) Earnings per share expressed in pence per share: 6 Basic -1.17 -0.25 Diluted -1.17 -0.25 CONTINUING OPERATIONS None of the company's activities were acquired or discontinued during the current year or previous year. TOTAL RECOGNISED GAINS AND LOSSES The company has no recognised gains or losses other than the losses for the current year or previous year. BALANCE SHEET AS AT 31 MARCH 2008: 2008 2007 Notes £ £ £ £ FIXED ASSETS Tangible assets 7 633 844 CURRENT ASSETS Stocks 8 1,347,486 1,241,020 Debtors 9 14,821 4,375 1,362,307 1,245,395 CREDITORS Amounts falling due within one year 10 1,227,681 1,032,383 NET CURRENT ASSETS 134,626 213,012 TOTAL ASSETS LESS CURRENT LIABILITIES 135,259 213,856 CAPITAL AND RESERVES Called up share capital 13 67,435 67,435 Share premium 14 194,393 194,393 Profit and loss account 14 (126,569) (47,972) SHAREHOLDERS' FUNDS 19 135,259 213,856 CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2008: 2008 2007 Notes £ £ £ £ Net cash outflow from operating activities 1 (142,349) (192,100) Returns on investments and servicing of finance 2 (6,024) (1,249) (148,373) (193,349) Financing 2 127,932 188,280 Decrease in cash in the period (20,441) (5,069) Reconciliation of net cash flow to movement in net debt 3 Decrease in cash in the period (20,441) (5,069) Cash outflow/(inflow) from decrease/(increase) in debt 233,628 (93,297) Change in net debt resulting from cash flows 213,187 (98,366) Movement in net debt in the period 213,187 (98,366) Net debt at 1 April (989,355) (890,989) Net debt at 31 March (776,168) (989,355) NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2008: 1. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2008 2007 £ £ Operating loss (72,573) (14,857) Depreciation charges 211 281 Increase in stocks (106,466) (158,970) (Increase)/Decrease in debtors (10,446) 657 Increase/(Decrease) in creditors 46,925 (19,211) Net cash outflow from operating activities (142,349) (192,100) 2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT 2008 2007 £ £ Returns on investments and servicing of finance Interest paid (6,024) (1,249) Net cash outflow for returns on investments and (6,024) (1,249) servicing of finance Financing New loans in year 725,000 93,297 Loan repayments in year (958,628) - Amount introduced by directors 361,560 - Amount withdrawn by directors - (8,534) Share issue - 8,248 Share premium - 95,269 Net cash inflow from financing 127,932 188,280 3. ANALYSIS OF CHANGES IN NET DEBT At 1.4.07 Cash flow At 31.3.08 £ £ £ Net cash: Cash at bank and in hand - - - Bank overdraft (30,727) (20,441) (51,168) (30,727) (20,441) (51,168) Debt: Debts falling due within one year (958,628) 233,628 (725,000) (958,628) 233,628 (725,000) Total (989,355) 213,187 (776,168) NOTES TO THE FINANCIAL STATEMENTS: 1. ACCOUNTING POLICIES Accounting convention The financial statements have been prepared under the historicalcost convention and are in accordance with applicable accounting standards. Tangible fixed assets Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. Fixtures and fittings - 25% on reducing balance Stocks Work in progress is valued at the lower of cost and net realisable value. Deferred tax Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. 2. STAFF COSTS 2008 2007 £ £ Wages and salaries 25,500 - The average monthly number of employees during the year was as follows: 2008 2007 Management 4 3 3. OPERATING LOSS The operating loss is stated after charging: 2008 2007 £ £ Depreciation - owned assets 211 281 Auditors' remuneration 2,500 2,500 Directors' emoluments 25,500 - 4. INTEREST PAYABLE AND SIMILAR CHARGES 2008 2007 £ £ Bank interest 6,024 1,249 5. TAXATION Analysis of the tax charge No liability to UK corporation tax arose on ordinary activities for the year ended 31 March 2008 nor for the year ended 31 March 2007. 5. TAXATION - continued Factors affecting the tax charge The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: 2008 2007 £ £ Loss on ordinary activities before tax (78,597) (16,106) Loss on ordinary activities multiplied by the standard rate of corporation tax in the UK of 20% (2007 - 19%) (15,719) (3,060) Effects of: Losses carried forward 15,719 3,060 Current tax charge - - Factors that may affect future tax charges The company has losses carried forward of £126,000 (2007 £45,000) to set against future taxable profits. No deferred tax asset has been recognised in respect of these losses due to the lack of profits being achieved since incorporation. 6. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. Reconciliations are set out below. 2008 Weighted average number Per-share Earnings of amount £ shares pence Basic EPS Earnings attributable to ordinary (78,597) 6,743,519 -1.17 shareholders Effect of dilutive securities - - - Diluted EPS Adjusted earnings (78,597) 6,743,519 -1.17 6. EARNINGS PER SHARE - continued 2007 Weighted average number Per-share Earnings of amount £ shares pence Basic EPS Earnings attributable to ordinary (16,106) 6,331,119 -0.25 shareholders Effect of dilutive securities - - - Diluted EPS Adjusted earnings (16,106) 6,331,119 -0.25 As per Note 17 of the financial statements, 2,014,000 ordinary £0.01 shares were issued after the year end. If these shares had been in issue during the whole of the year to 31 March 2008 then the loss per share for the period would have been 0.90p. 7. TANGIBLE FIXED ASSETS Fixtures and fittings £ COST At 1 April 2007 and 31 March 2008 1,500 DEPRECIATION At 1 April 2007 656 Charge for year 211 At 31 March 2008 867 NET BOOK VALUE At 31 March 2008 633 At 31 March 2007 844 8. STOCKS Work in progress comprises one land development which is included at its original cost of £775,000 together with subsequent development costs. Included within these "development costs" is interest arising on loans specifically incurred for the land development. During the year interest of £83,166 (2007 £72,297) was taken to work in progress. A professional valuation was carried out by Stevens Scanlan LLP on 23 July 2007 which valued the land at £1,100,000 based upon planning consent for nine dwellings being constructed on the site and a maximum period of 12 months to dispose of the site. The same valuation assessed the Gross Development Value of the site, when the scheme is complete, to be £3,385,000. As the company already has planning permission and taking into account subsequent development works, the directors consider the market value of the development at 31 March 2008 to be not less than the costs incurred to date as shown on the balance sheet. 9. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 2008 2007 £ £ Other debtors 1,468 328 VAT 2,649 372 Prepayments and accrued income 10,704 3,675 14,821 4,375 10. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 2008 2007 £ £ Bank loans and overdrafts (see 776,168 989,355 note 11) Trade creditors 32,205 11,009 Directors' current accounts 391,308 29,748 Accrued expenses 28,000 2,271 1,227,681 1,032,383 11. LOANS An analysis of the maturity of loans is given below: 2008 2007 £ £ Amounts falling due within one year or on demand: Bank overdrafts 51,168 30,727 Bank loans 725,000 958,628 776,168 989,355 The bank overdraft at the year end was subject to floating interest rates of 3% above the banks base rate. Bank loans from the start of the year were also subject to this interest rate, however these were renegotiated during the year, when refinanced through the Bank of Ireland, to a rate of 1.75% above the banks base rate. The loan at 31 March 2008 is repayable upon the earlier of 12 months from the year end or the date of disposal of the completed units. 12. SECURED DEBTS The following secured debts are included within creditors: 2008 2007 £ £ Bank overdrafts 51,168 30,727 Bank loans 725,000 958,628 776,168 989,355 The bank loan and overdraft are secured by a fixed and floating charge over the assets of the company. Subsequent to the year end , a fixed and floating charge was created on 27 May 2008 over the assets of the company, for a sum of £325,000, in favour of R J McKendrick a director of the company. Subsequent to the year end , the company assigned part of the charge due to the bank on 20 June 2008, to the names of J E Upchurch, a director of the company, and K Virk, a former director of the company, as security against contracts entered into on 30 April 2008 to purchase two plots of the existing land development. 13. CALLED UP SHARE CAPITAL Authorised: Number: Class: Nominal 2008 2007 value: £ £ 20,000,000 Ordinary £0.01 200,000 200,000 Allotted, issued and fully paid: Number: Class: Nominal 2008 2007 value: £ £ 6,743,519 Ordinary £0.01 67,435 67,435 In the 2007 financial statements 309,300 Ordinary shares of £0.01 were recorded at nil consideration. A prior year adjustment has been made to correctly restate the issue at par value and accordingly reduce the share premium by £3,093. 14. RESERVES Profit and loss Share account premium Totals £ £ £ At 1 April 2007 (47,972) 194,393 146,421 Deficit for the year (78,597) (78,597) At 31 March 2008 (126,569) 194,393 67,824 15. TRANSACTIONS WITH DIRECTORS During the year the company was recharged £54,766 (2007 £nil) by R J McKendrick, a director of the company, for business expenditure incurred on its behalf. R J McKendrick also personally discharged in March 2008, an outstanding bank loan liability of the company totalling £335,000. The amount owed to R J McKendrick at the year end was £361,560 (2007 £nil). 16. RELATED PARTY DISCLOSURES During the year the company paid a fee of £nil (2007 £5,625) to SVS Securities PLC, a company controlled by K Virk, a former director of the company. 17. POST BALANCE SHEET EVENTS On 8 April 2008 the company issued 2,014,000 ordinary £0.01 shares at par. The shares were issued in favour of R J McKendrick, a director of the company and the consideration of £20,140 was offset against the existing loan due to him. Further to the issue of these shares, the company's issued share capital was 8,757,519 Ordinary £0.01 shares. 18. ULTIMATE CONTROLLING PARTY No individual has overall control of the company. 19. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2008 2007 £ £ Loss for the financial year (78,597) (16,106) Shares issued - 8,248 Share premium - 95,269 Net (reduction)/addition to shareholders' funds (78,597) 87,411 Opening shareholders' funds 213,856 126,445 Closing shareholders' funds 135,259 213,856 2008 2007 £ £ £ £ Income - - Cost of sales Opening work in progress 1,241,020 1,082,050 Direct costs 106,466 158,970 1,347,486 1,241,020 Closing work in progress (1,347,486) (1,241,020) - - GROSS PROFIT - - Expenditure Rent 7,200 2,151 Rates and water 233 - Insurance 482 - Light and heat - 64 Directors' fees 25,500 - Telephone 2,608 761 Post and stationery 72 80 Advertising 930 4,907 Travelling 1,326 - Site security costs 3,936 - Sundry expenses 217 98 Ofex/Plus subscriptions 1,307 1,499 Accountancy 1,350 740 Legal and professional fees 24,203 1,192 Auditors' remuneration 2,500 2,500 Entertainment 163 - 72,027 13,992 (72,027) (13,992) Finance costs Bank charges 335 584 Bank interest 6,024 1,249 6,359 1,833 (78,386) (15,825) Depreciation Fixtures and fittings 211 281 NET LOSS (78,597) (16,106)

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