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Kingsbridge Hldgs (PNC)

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Thursday 30 January, 2003

Kingsbridge Hldgs

Final Results

Kingsbridge Holdings PLC
30 January 2003

                            KINGSBRIDGE HOLDINGS PLC

               Preliminary Results for the year to 31 August 2002

Kingsbridge Holdings Plc ('Kingsbridge'), provider of financial services and
advice, focusing on sports and high net worth clients, announces a period of
rationalisation and maintained financial performance in a year of poor stock
market conditions.

  • Turnover increased 63% to £11.99 million (2001: £7.35 million)

  • Profit before goodwill amortisation, exceptional items and taxation
    unchanged at £1.5 million

  • Loss before tax £25.69 million (2001: profit £0.82 million) following
    £25.29 million exceptional item, from valuation write-down of assets and

  • Eric Cater, a current Non-Executive Director, to become Chairman.  Charles
    Green to step down as Chairman but remains a Non-Executive Director

  • Group reorganisation and rationalisation almost complete with resulting
    annual cost savings

  • Professional indemnity insurance secured

  • Sports Division at 43% of Group turnover -client numbers grow to almost

  • Non Sports Division at 57% of Group turnover - severely impacted by the
    stock market downturn, rationalisation is in progress

Charles Green, Chairman, commented:

' Set against a year of weak investor confidence and poor stock market
performance and when judged against others in our quoted peer group, the results
achieved are quite satisfactory.  We are confident that the envisaged regulatory
changes in our industry will continue to provide opportunities and do nothing to
lessen the appetite of high net worth individuals for professional independent
financial advice.

'Whilst the Board remains cautious about the outlook for the current year, it
will nevertheless work hard to ensure that the Group is correctly positioned to
take full advantage of any opportunities.'

30 January 2003


Kingsbridge Holdings Plc                                   Tel:  01423 53 33 11
Martin Greenwood, Chief Executive

College Hill                                                Tel:  020 7457 2020
Nicholas Nelson/Richard Pearson


I set out below the results achieved by the Group for the year ended 31 August
2002 which have been achieved against a background of the most difficult trading
conditions many advisers can remember.

Following the terrorist attacks on 11 September 2001 there was a severe fall in
investor confidence and a period of sustained stock market weakness.  Investor
confidence eventually showed signs of recovery but ultimately has proved unable
to overcome the continuing poor stock market performance.  The sustained press
attacks on our industry as a result of the poor performance of split capital
investment trusts, predicted shortfalls on endowment mortgage maturities and the
constant headlines accompanying the closure of each major employers' final
salary pension scheme have not helped sentiment.  The stock market fall has
severely affected the liquidity ratios of many product providers which has led
to speculation of another Equitable Life style collapse of a household name in
financial services.

In light of this background, it is hardly surprising that a significant
proportion of our client base was reluctant to commit new or additional funds to
products provided by the financial services industry.  Moreover, in common with
the rest of the industry, our income streams which are related to the level of
funds invested also declined.

Set against the above and when judged against the performance of others in our
quoted peer group, the results which Kingsbridge has achieved are, in the
opinion of the Board, quite satisfactory.


The turnover for the year was £11.99 million (2002: £7.35 million - 17 months)
an increase of 63 % on the prior period.  Profit before goodwill amortisation,
exceptional items and taxation was £1.52 million (2001: £1.51 million).
Goodwill arising from acquisitions totalling £1.9 million (2001: £0.68 million)
was amortised in the year together with an impairment write off of
£23.70million.  These charges together with other exceptional items, amounting
to £1.60 million (2001: Nil) have resulted in a loss before taxation of £25.69
million (2001: £0.82 million profit).  The basic earnings per share for the year
was a loss of 26.75 pence (2001: 0.63p year earnings) whilst the earnings per
share before goodwill amortisation and exceptional items was 1.11 pence (2001:
1.81p).  At 31 August 2002 the Group had cash reserves of £0.6 million (2001:
£0.28 million).


Shares in the Group are traded on the Alternative Investment Market and have
been subject to a turbulent 12 months.  We cannot hope to be immune from general
market conditions either in terms of share price or trading performance and as a
result we have had to accept that, with our shares trading at a low level for
much of the year, our acquisition ambitions have had to be put on hold.  This
has been disappointing not least because we believe good value opportunities
currently exist.

In light of this restriction we have concentrated on reorganising the Group as
described in my earlier statements.  We have also responded to the downturn in
trading performance experienced within our non-sports division by reorganising
and critically examining the level of support costs incurred by the Group.
Steps have already been taken to reduce costs and this exercise continues.

Despite the extremely difficult trading conditions, management accounts for the
Stafford Group Limited ('Stafford') and its principal trading subsidiary The
Independent Financial Partnership Limited ('IFP') show that they have achieved
their earnout.

Similarly, Benson McGarvey Limited ('Benson McGarvey'), a main rival to
Kingsbridge prior to its acquisition, has produced management accounts which
also show it has achieved its earnout.  In both cases, achievement of the
earnout is subject to audit.

In the case of Benson McGarvey any consideration becoming due was to be
satisfied by the issue of ordinary shares at the mid-market price for the 30
days immediately prior to its earnout being agreed.  As previously announced, in
view of the depressed state of Kingsbridge's share price, the vendors of Benson
McGarvey have agreed to accept convertible loan notes subject to certain

Turning to our smaller acquisitions;  Kingweb operates the League Managers
Association website under a licence agreement.  Whilst the number of visits to
the site on a monthly basis has been impressive, advertising and sponsorship
revenues have not materialised as expected and as a consequence the Board is
negotiating the early settlement of contractual obligations.  MaxDelta was
acquired from Keysports Management Limited to provide introductions to high net
worth entertainers.  Whilst introductions have been forthcoming converting them
into clients has proved difficult and disappointing and not in any way helped by
the current economic climate.

Directors and Management

During the course of the year a number of Board changes were announced to ensure
that its composition and size were more in line with best practice.  In a
further development, whilst remaining with the Group, Ross Hyett has resigned
from the Board with immediate effect in order to participate in the potential
management buyout of part of the Group.  Also, as a consequence of my other
business commitments, particularly my role as Chief Executive of Medical
Solutions plc, I have decided, with immediate effect, to step down as Chairman
and will continue as a Non Executive Director.  Eric Cater has agreed to take
over the Chairmanship and I look forward to supporting him in his new position.

The last financial year has proved to be difficult and challenging.  The
Directors and staff have had to contend with difficult trading conditions and a
great deal of organisational change.  Everyone has responded purposefully and I
would like to thank them for all their hard work.


The Board continues to believe that the original strategy of growing the company
organically by attracting high quality IFAs, through targeted acquisitions of
organisations with a similar focus to ourselves and by expansion to take account
of identified opportunities in Europe, is the correct one.  However in the
current economic trading climate it has not been possible to fulfil all these
ambitions.  The Group has instead and of necessity had to focus on maintaining
current income streams and reducing costs which had increased in anticipation of
our expansion plans.  The changing regulatory climate has also created

Looking to the future we are confident that the regulatory changes now envisaged
will continue to provide opportunities and do nothing to lessen the appetite of
high net worth individuals for professional independent financial advice.
Whilst the Board remains extremely cautious about the outlook for the current
year it will nevertheless work hard to ensure that the Group is correctly
positioned to take full advantage of any opportunities.

                                                                   Charles Green
                                                                 30 January 2003


The first full financial year following my appointment has proved to be a year
of considerable difficulty and challenge.  It is against a background of
structural turbulence and lack of investor confidence that we have achieved the
results set out below.


The financial year ended 31 August 2002 has seen profits on ordinary activities
before goodwill amortisation and exceptional items maintained at £1.52 million
(2001: £1.51 million).

Following a detailed review of the value of its investments, the Board has
decided to write down the carrying value of its various initiatives and
acquisitions to reflect the changed environment and trading conditions from that
at the time of completion.  The write downs, including annual amortisation,
amounting to £27.05 million also ensure that the valuations are more in line
with current market  activity.  Also within exceptional items is a charge of
£0.11 million incurred with regard to certain targeted acquisitions which have
been abandoned for the time being.  Growth through acquisition was a key element
of our strategy and it is a disappointment that these plans have had to be put
on hold pending the recovery of our share price.

Turnover has increased from £7.35 million to £11.99 million an increase of 63%
but with significant bias towards the first half of the year.

Whilst we believe our headline results compare favourably with our peer group
the pattern of performance across the Group has been mixed.

In response to these difficult trading conditions we have critically reviewed
both our organisational structure and the level of overhead costs incurred by
the Group.  As a result of this exercise we have rationalised our operations in
Scotland with the closure of one office without loss of advisers or detriment to
the service provided to our clients.  We have also identified further annualised
salary and related cost savings of approximately £600,000 per annum through
redundancy and natural wastage of approximately 20 staff.

Despite the difficult trading conditions we have pressed ahead with the
reorganisation of the Group as described in our interim results statement so
that, with the exception of Benson McGarvey, we now operate through one main
regulated and one main non-regulated subsidiary companies.  The operations,
including Benson McGarvey, are then further sub-divided between a sports and
non-sports division.

Sports Division

The sports division has accounted for over 43% of the Group's turnover and over
75% of operating profits before costs associated with the holding company,
amortisation of goodwill or exceptional items.

Comparison of the turnover between the first and second six months shows only a
slightly stronger first half, demonstrating the relative robustness of sports
related clients over non sports clients.

During the second half of the year we have successfully continued to grow the
client base with the Group now advising some 380 UK based footballers, up from
315 at the half year.  The proportion contracted to the Premiership has remained
firm at 55% with a further 27% representing Nationwide First Division teams.  Of
those associated with the First Division, 47% are ex-premiership players.

Of significance is our increasing involvement with the football club academies
where client numbers, included in the 380 above, have increased to almost 100 up
from 30 at the half year.  It is from among the young players at the academies
that we hope the future stars of the premier league will emerge.

In addition to the players, the Group also advises 40 managers and a further 103
coaching staff from across the 92 clubs.

An analysis of our clients' age profile reveals that 48% are below age 25
indicating longevity of income streams.  Moreover with 128 players consolidated
in the generally higher earnings 26-30 age group and 70 players in the 30 plus
bracket there is an ideal split of young potential versus maturing wealth.

Players are currently able to draw a pension from age 35 years, an Inland
Revenue concession granted to specific special case groups.  However, this
concession may be changed following publication of the Government's pensions
reform papers.  The Board does not perceive that the planned changes represent a
threat for the business.

Looking to the future further organic growth in our UK football related client
base will be added to by expansion into Europe.  Useful dialogue is already
underway with representatives of potential clients in Holland, Denmark, Spain
and Italy.  We are confident that significant volumes of business can be
generated once regulatory hurdles have been overcome.

In addition to our football clients the sports division also advises clients
from other sports such as cricket, rugby, golf, racing and media and
entertainment.  Client numbers have increased to 75 from 56 at the half year
across these areas.

Non Sports Division

Unlike the Sports Division, non-sports has been severely impacted by the
downturn in client confidence.  Although the division accounted for 57%  (£6.9
million) of the Group's turnover £4.3 million or 62% of that total was generated
in the first half of the year.

While it was hoped that the market downturn would not continue, further falls
were experienced during the year and as a result radical reorganisation of the
division is in progress with inevitable job losses.

Following the reorganisation, our non-sports division will focus on high net
worth clients and on the provision of group scheme management services for
clients.  The Group continues to classify high net worth clients within the
division as those with £200,000 of assets under investment and in excess of 600
clients continue to fall within this category.  The attraction of these focus
areas is that income from such clients is generated by a mix of fees, fund based
/renewal commission and initial commissions.

Regulatory Environment

For some time, the structure of the industry has been the subject of debate.
The debate has focused on the differentiation between independent financial
advisers (IFAs) able to select their recommended products from all those
available in the market place and tied advisers who are limited to the products
provided by their host company.  This differentiation is known as polarisation.

The initial conclusions of the regulator were published in Consultative Paper
121 (CP121) and included proposals on income generation which many believed
would force some IFAs to become multi-tied (as allowed by CP121).  Following
intensive lobbying by the industry these initial proposals have been
substantially modified and we anticipate that the final proposals will not have
any negative effect on the independent sector.

Amongst the other important reviews being undertaken, perhaps the most
significant was the Sandler Report.  A key recommendation of this report was the
development of a suite of stakeholder equivalent products with total charges
limited to 1 per cent.  Further margin erosion is a threat to the industry at
both manufacturing and retailing levels and there are signs that the
manufacturers will resist this proposal.

On 1 November 2002 we announced that in common with many other advisers the
Group, excluding Benson McGarvey, had been unable to purchase professional
indemnity insurance.  The Group has kept the FSA fully informed of developments
on a continuing basis.

Notwithstanding the difficulties, those companies affected are now covered on
terms commensurate with market conditions.  The Board is pleased to note that on
10 December 2002 the Office of Fair Trading announced a fact finding study into
public, product, professional and employers liability insurance.  The Board also
welcomes the FSA's initiative to launch a consultation paper in early 2003 to
address the problem.

Independent Financial Partnership Ltd

In April 2001 the company acquired the entire issued share capital of the
Independent Financial Partnership Limited ('IFP').

Notifications have been received from certain clients of IFP stating that they
will seek to hold IFP responsible for loss which may be suffered by those
clients arising out of certain investments originally made prior to the
acquisition by the company of IFP in Imperial Consolidated Mutual Limited ('ICM
').  IFP has denied any liability in relation to such claims.

The Board of the company has investigated the circumstances surrounding these
matters.  Taking account of various defences open to IFP and certain rights of
recourse available against third parties, these investigations have led the
Board to form the opinion that no material liability will ultimately fall upon
the Kingsbridge Group as a result of investments made by IFP clients in the
Alpha + Fund.

To further protect the Group steps have been taken to implement available
remedies.  In addition, preliminary discussions are taking place with certain of
the vendors of IFP with a view to resolving this situation.  Shareholders will
be kept informed of all material developments.

Current Trading

The continuing poor performance of the world's stock markets has done little to
restore consumer confidence and thus the outlook for the current year is
extremely uncertain.  To date the sports division has proved resilient in the
face of the malaise affecting most other client groups but there is a danger
that this may not last if the general financial climate does not start to
improve.  To combat the threat of lower activity levels in the UK sports client
base new overseas markets are being attacked.

On the positive side the risk of negative impact from regulatory change within
the industry has reduced.  Nonetheless, we still believe size and scale will be
important in the future and so will return to our original strategy of growth by
acquisition and recruitment of high quality advisers as soon as circumstances

                                                                Martin Greenwood
                                                                 Chief Executive
                                                                 30 January 2003

Consolidated Profit and Loss Account
For the year ended 31 August 2002

                                                                                                 17 months ended
                                                                                 Year ended            31 August
                                                                                  31 August                 2001
                                                                                       2002                    £
                                                                 Notes                    £

Turnover                                                           2            11,987,459            7,346,793
Cost of sales                                                                   (1,368,682)          (1,539,147)

Gross profit                                                                    10,618,777            5,807,646
Administrative expenses                                                        (36,297,863)          (5,024,768)

Operating (loss) profit                                                        (25,679,086)             782,878
Net interest (payable) receivable                                  3               (11,736)              41,369

(Loss) profit on ordinary activities before taxation               4           (25,690,822)             824,247
- after goodwill amortisation and exceptional items                            (25,690,822)             824,247
- goodwill amortisation                                                          1,915,064              683,619

Exceptional items
- goodwill impairment                                                           23,696,014                    -
- licence impairment                                                             1,437,500                    -
- other exceptional items                                          5               159,362                    -

Profit on ordinary activities before taxation, goodwill
amortisation and exceptional items
                                                                                 1,517,118            1,507,866
Tax on (loss) profit on ordinary activities                                       (429,171)            (457,221)

(Loss) profit retained for the year                                            (26,119,993)             367,026

(Loss) earnings per share                                          6

Basic                                                                              (26.75p)                0.63p
Basic EPS excluding goodwill amortisation and exceptional items                       1.11p                1.81p
Diluted                                                                            (26.75p)                0.62p

The results for the year derive from continuing operations.

There are no other gains or losses other than the (loss) profit for the year.

The accompanying notes are an integral part of this consolidated profit and loss

Consolidated Balance Sheet
31 August 2002

                                                                                       2002                 2001
                                                                                          £                    £
Fixed assets
Licences                                                                                 -            1,437,500
Goodwill                                                                        12,242,759           37,394,035

Intangible assets                                                               12,242,759           38,831,535
Tangible assets                                                                  1,397,669              948,888
Investments                                                                         11,195               11,195
                                                                                13,651,623           39,791,618
Current assets
Debtors                                                                          1,932,644            3,617,315
Investment - Loan note deposit                                                  10,213,405           11,626,092
Cash at bank and in hand                                                           601,959              681,750
                                                                                12,748,008           15,925,157
Creditors: amounts falling due within one year                                 (12,231,368)         (10,998,710)

Net current assets                                                                 516,640            4,926,447

Total assets less current liabilities                                           14,168,263           44,718,065

Creditors: amounts falling due after more than one year                         (2,200,000)          (6,663,126)
Provisions for liabilities and charges                                             (33,317)                   -

Net assets                                                                      11,934,946           38,054,939

Capital and reserves
Called up share capital                                                            981,472              970,075
Share premium account                                                           20,112,810           20,112,810
Shares to be issued                                                              4,350,000            5,159,155
Merger reserve                                                                  12,243,631           11,445,873
Profit and loss                                                                (25,752,967)             367,026

Equity shareholders' funds                                                      11,934,946           38,054,939

Consolidated Cash Flow Statement
For the year ended 31 August 2002

                                                                                                       17 months
                                                                                 Year ended                ended
                                                                                  31 August            31 August
                                                                                       2002                 2001
                                                                                          £                    £

Net cash inflow from operating activities                                        1,871,128              587,961

Returns on investments and servicing of finance                                    (11,736)             151,277
Taxation paid                                                                     (914,105)             (55,320)
Capital expenditure and financial investment                                      (710,311)            (250,159)
Acquisitions and disposals                                                          88,182           (9,328,614)

Cash inflow (outflow) before management of liquid resources and                    323,158           (8,894,855)
Management of liquid resources                                                           -          (11,533,126)
Financing                                                                           (5,443)          20,712,225

Increase in cash in the year                                                       317,715              284,244


1.         Financial information

The financial information set out herein does not comprise the company's full
financial statements.  Full financial statements for the period ended 31 August
2001 have been delivered to the Register of Companies.  These financial
statements contain an unqualified auditors' report which did not contain any
statements under section 237 (2) or (3) of the Companies Act 1985.  Full
financial statements for the year ended 31 August 2002, contain an unqualified
report from the auditors, which again does not contain any statements under the
section 237 (2) or (3) of the Companies Act 1985, will be posted to shareholders
on 5 February 2003 and delivered to the Registrar of Companies following the
Annual General Meeting.

2.         Segment information

All turnover is derived from a single class of business, being the group's
principal activity of the provision of financial services and advice.  All
turnover originates from and has its destination in the United Kingdom.

3.         Net interest (payable) receivable
                                                                                                   17 months
                                                                            Year ended                 ended
                                                                             31 August             31 August
                                                                                  2002                  2001
                                                                                     £                     £
Interest payable and similar charges
- bank loans and overdrafts                                                  (491,230)             (206,692)
-finance leases and hire purchase contracts                                         -               (37,311)
Interest receivable and similar income                                        479,494               285,372
                                                                              (11,736)               41,369

4.         (Loss) profit on ordinary actives before taxation

                                                                                                   17 months
                                                                            Year ended                 ended
                                                                             31 August             31 August
                                                                                  2002                  2001
                                                                                     £                     £
(Loss) profit on ordinary activities before taxation is stated after
charging (crediting):
Depreciation and amount written off tangible fixed assets
- owned                                                                       246,907               113,118
- held under finance lease and hire purchase contracts                            455                12,225
Profit on sale of tangible fixed assets                                       (11,556)                    -
Goodwill amortisation                                                       1,915,064               683,619
Goodwill impairment                                                        23,696,014                     -
Amortisation and impairment of licences                                     1,437,500                62,500
Operating lease rentals - plant and machinery                                  59,302                62,917
                                      - other                                 495,026               105,635
Auditor's remuneration - audit services                                       150,000               164,000
                                      - non audit services                    127,000                19,867

5.         Other exceptional items
                                                                                                  17 months
                                                                       Year ended                     ended
                                                                        31 August                 31 August
                                                                             2002                      2001
                                                                                £                         £

Costs of aborted transactions                                             109,362                         -
Reorganisation costs                                                       50,000                         -
                                                                          159,362                         -

The above items, goodwill amortisation and impairment and the licence impairment
have been charged to administrative expenses.  The costs of the aborted
transactions and the reorganisation costs have reduced the tax charge in the

6.         (Loss) earning per share

The calculations of earnings per share are based on the following                                     
profits and numbers of shares:                                                                     17 months
                                                                             Year ended                ended
                                                                              31 August            31 August
                                                                                   2002                 2001
                                                                                      £                    £

(Loss) profit on ordinary activities after taxation                        (26,119,993)             367,026
- goodwill amortisation                                                       1,915,064              683,619
Exceptional items
- goodwill impairment                                                       23,696,014                    -
- licence impairment                                                         1,437,500                    -
- other exceptional items                                                      159,362                    -

Profit before goodwill amortisation and exceptional items                    1,087,947            1,050,645

                                                                                       2002              2001
                                                                           Number of shares         Number of
Weighted average number of shares:
For basic (loss) earnings per share                                              97,628,887        57,984,106
Contingently issuable shares                                                              -           748,662
Exercise of share options                                                                 -           847,525
For diluted (loss) earnings per share                                            97,628,887        59,580,293

(Loss) earnings per share continued                                                               17 months
                                                                          Year ended                  ended
                                                                           31 August              31 August
                                                                                2002                   2001
                                                                     pence per share        pence per share

Basic                                                                       (26.75p)                  0.63p
Basic EPS excluding goodwill amortisation and impairments,                     1.11p                  1.81p
exceptional items and licence impairment
Diluted                                                                     (26.75p)                  0.62p

The directors have presented an alternative earnings per share figure to give a
better indication of the long-term results of the business.  FRS14 requires
presentation of diluted EPS when a company could be called upon to issue shares
that would decrease net profit or increase net loss per share.  For a
loss-making company with outstanding share options, net loss per share would
only be increased by the exercise of out-of-the-money options and warrants.
Since it seems inappropriate to assume that option and warrant holders would act
irrationally, no adjustment has been made to diluted EPS for out-of-the-money
share options and warrants.

7.         Contingent Liabilities

Notifications have been received from certain clients of Independent Financial
Partnership Limited ('IFP') stating that they will seek to hold IFP responsible
for loss which may be suffered by those clients arising out of certain
investments originally made prior to the acquisition by the Company of IFP in
Imperial Consolidated Mutual Limited ('ICM'). IFP has denied any liability in
relation to such claims.

ICM established a licensed mutual fund in the Bahamas and operated a sub-fund
known as ('the Alpha + Fund'). The relevant investments were made by clients of
IFP by means of portfolio investment bonds provided by a number of reputable
Life Offices and on the basis of an offering memorandum issued by ICM in July
2000 ('the Offering Memorandum').

Under the terms of the Offering Memorandum, Investments in the Alpha + Fund were
to be lent to Imperial Consolidated Financiers Limited ('ICFL') a sister company
of ICM registered in England. The relevant funds so received were then to be
lent via solicitors (who were conducting personal injury litigation for clients
on a contingency fee basis) to their individual clients.

Approximately £11 million was invested by some 27 IFP clients in the Alpha +
Fund. In June 2002 ICFL was placed into administration and in July 2002
provisional liquidators were appointed to ICM. The Company had previously
obtained on behalf of IFP clients a guarantee from ICFL of repayments of the
investments made in the Alpha + Fund. Demands for repayment under the guarantee
have been made but not met. The relevant IFP investors should therefore be
creditors in the insolvency of both ICM and ICFL. Proceedings in respect of
claims of breach of fiduciary duty have been brought by ICM/ICFL against certain
directors and officers of these companies. It is unclear what distributions will
be available to unsecured creditors, but in any event there will not be any
distributions for a lengthy period of time.

The board of the Company has instigated investigations into the circumstances
surrounding these matters. Taking account of various defences open to IFP and
certain rights of recourse available against third parties, these investigations
have led the Board to form the opinion that no material liability will
ultimately fall upon Kingsbridge Group as a result of investments made by IFP
clients in the Alpha + Fund.

In addition, preliminary discussions are taking place with certain of the
vendors of IFP with a view to resolving this situation. Shareholders will be
kept informed of all material developments.

8.         The Annual Report and Account will be posted to Shareholders shortly.
  Further copies may be obtained from the Company's registered office:
Kingsbridge House

                15 Castle Gate
                NG1 7AQ

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