Interim Results
Northacre PLC
12 November 2004
NORTHACRE PLC
('Northacre' or 'the Group')
Interim Results for the six months to 31 August 2004
Northacre PLC, the premier developer of landmark residential property schemes in
Central London, today announces interim results for the six months to 31 August
2004.
•KINGS Chelsea development complete with only 5 of the 289 units remaining
unsold - anticipate bonus fees and profits in 2005
•The Phillimores (QEC) continues to be on schedule for practical
completion by the end of 2004 with the bulk of our deferred consideration
anticipated before the end of the current financial year
•Vicarage Gate planning decision delayed now expected Autumn 2005 with
construction due to commence before the end of 2005
• Improved activity and new assignments in hand for Lifestyles (Interiors)
and Nilsson Design
• Successful sale and leaseback of the Group's offices resulting in full
settlement of our debt to our former bankers, Coutts & Co.
• Detailed review of subsidiary companies to generate further reductions
in the Group operating overhead
• Focus on securing new smaller development opportunities with lower risk
of planning and construction delays
12 November 2004
Enquires:
Northacre Plc Tel : 020 7349 8000
John Hunter, Chief Executive
Manish Santilale, Finance Director
Overview
The focus of Northacre's business involves adding premium value through
effective management of the development process, concentrating on high quality
prime residential developments in Central London
Financial Results
Turnover for the period was £1,309,000 (2003 - £1,806,000) with gross profit of
£792,000 (2003 - £1,271,000). Pre-tax loss was £929,000 (2003 - £822,000) before
amortisation of goodwill with a basic loss per share of 6.87 pence (2003 - 5.32
pence). The Board is not declaring an interim dividend.
Operational Review
During the period under review the operating subsidiaries have all seen reduced
fee income in response to lower levels of activity in the market. The Group is
undergoing a detailed review of its business plan with the aim of reducing
further the level of operating overhead. There are also however, some
encouraging new business opportunities and assignments in hand for both
Lifestyles (Interiors) and Nilsson Design.
KINGS Chelsea development is now complete. There remain 5 unsold apartments and
we expect these sales will be complete within the next few months. Within this
timescale, the Group anticipates receipt of its full entitlement to deferred
fees and profit share.
The Phillimores (QEC) continues to progress towards practical completion by the
end of 2004. Depending on the outcome of the remaining sales we therefore
anticipate receiving the bulk of our deferred consideration by the end of the
current financial year.
Following further discussions with the Local Authority in respect of securing a
planning decision on Vicarage Gate, it is now anticipated that the decision will
be taken by the Inspectorate on appeal in August 2005 with the aim of
construction commencing before the end of 2005. With our partners, First Islamic
Investment Bank, we are confident of a positive outcome.
Following the sale and leaseback of our offices in September 2004 we have fully
redeemed our debt to Coutts & Co. and transferred our banking arrangements to
the Bank of Scotland.
Further discussions are in progress with new investors for securing a programme
of smaller developments. To this end we are confident the flow of work to the
Group will steadily improve over the short to medium term.
Summarised Profit and Loss Account (Unaudited)
6 Months 6 Months Year
to to ended
Note 31.8.2004 31.8.2003 29.2.2004
Unaudited Unaudited Audited
£'000 £'000 £'000
Turnover 3 1,309 1,806 3,835
Cost of sales (517) (535) (1,334)
-------- -------- --------
Gross Profit 792 1,271 2,501
Administrative expenses 4 (2,174) (2,385) (5,282)
Provision for loss making contract - - (350)
Other operating income 10 9 19
-------- -------- --------
Operating Loss (1,372) (1,105) (3,112)
Share of loss from associated
undertakings - - (77)
-------- -------- --------
Loss on Ordinary Activities
before Interest and Investment
Income (1,372) (1,105) (3,189)
Dividends received 40 50 80
Interest (net) (228) (155) (327)
-------- -------- --------
Loss on Ordinary Activities
before Taxation (1,560) (1,210) (3,436)
Taxation 5 - - (9)
-------- -------- --------
Retained Loss for the Period 7 (1,560) (1,210) (3,445)
======== ======== ========
Basic loss per ordinary share 8 (6.87)p (5.32)p (15.16)p
Fully diluted loss per ordinary
share (6.68)p (5.08)p (14.72)p
Summarised Consolidated Balance Sheet (Unaudited)
31.8.2004 31.8.2003 29.2.2004
Note Unaudited Unaudited Audited
£'000 £'000 £'000
Fixed Assets
Intangible assets 10,720 12,224 11,351
Tangible assets 2,907 2,937 2,918
Investments 47 133 47
Investment in joint venture 920 812 870
--------- ------- -------
14,594 16,106 15,186
--------- ------- -------
Current Assets
Stock and work in progress 62 88 197
Debtors 678 1,007 391
Cash at bank and in hand 208 127 90
--------- ------- -------
948 1,222 678
Creditors: Amounts falling due
within one year 6 (5,700) (5,591) (6,012)
--------- ------- -------
Net Current Liabilities (4,752) (4,369) (5,334)
--------- ------- -------
Total Assets less Current
Liabilities 9,842 11,737 9,852
Creditors: Amounts falling due
after more than one year (1,830) - -
Provisions for Liabilities
and Charges (70) - (350)
--------- ------- -------
Net Assets 7,942 11,737 9,502
========= ======= =======
Capital and Reserves
Share capital 568 568 568
Share premium account 17,449 17,449 17,449
Profit and loss account (10,075) (6,280) (8,515)
--------- ------- -------
Shareholders' Funds 7 7,942 11,737 9,502
========= ======= =======
Summarised Consolidated Cash Flow Statement (Unaudited)
6 Months 6 Months Year
to to ended
31.8.2004 31.8.2003 29.2.2004
Note Unaudited Unaudited Audited
£'000 £'000 £'000
Net Cash Outflow from
Operating Activities 9 (1,551) (1,846) (1,656)
Returns on Investments and
Servicing
of Finance
Interest received 2 8 10
Interest paid (230) (163) (332)
Interest element of
finance lease rentals - (2) (5)
Dividends received 40 50 80
-------- -------- --------
Net Cash (Outflow) from
Returns on
Investments and Servicing
of Finance (188) (107) (247)
-------- -------- --------
Taxation
Corporation tax paid - - -
-------- -------- --------
Capital Expenditure and
Financial Investment
Purchase of other
tangible assets (4) (32) (43)
Sale of other tangible
assets 1 475 475
-------- -------- --------
Net cash (outflow)/inflow
for capital expenditure (3) 443 432
-------- -------- --------
Acquisitions and Disposals
Investment in joint
venture (50) (577) (490)
Proceeds on disposal of
investment in joint
venture - 5,166 5,020
-------- -------- --------
Cash (Outflow)/Inflow before Management
of Liquid
Resources and Financing (50) 4,589 4,530
-------- -------- --------
Financing
Capital element of
finance lease rentals (16) (3) (3)
Increase/(decrease) in
debt 1,830 (1,150) (1,150)
-------- -------- --------
Net cash inflow/(outflow)
from management
of liquid resources and
financing 1,814 (1,153) (1,153)
-------- -------- --------
Increase in Cash in the
Period 10 22 1,926 1,906
======== ======== ========
Notes to the Unaudited Interim Financial Statements for the period ended 31st
August 2004
1 Accounting Policies
The interim financial statements have been prepared on the basis of the
accounting policies set out in the 2004 Northacre PLC Annual Report.
Going Concern
The company and group meet their day to day working capital requirements
partly through monies loaned from the Northacre Plc Directors Retirement and
Death Benefit Scheme and partly from the group's bankers. Since the period
end the directors have implemented a number of measures to re-finance the
group's activities, including the following:
i) On the 20th September 2004 the company completed on the sale of its
freehold offices at 48 Old Church Street, London for £2.85
million.
ii) Documentation has recently been agreed, and is shortly to be
executed, for the issue of £500,000 of convertible loan stock to a
third party investor. The resultant cash injection is expected to
be received in November 2004.
The directors have prepared detailed cash flow projections for the period
ended 30th September 2005 making prudent assumptions about the levels and
timing of income and expenditure. These projections show that the group can
operate within the available facilities in the light of the changes mentioned
above. On this basis the directors consider it appropriate to prepare these
interim financial statements on a going concern basis.
2 Financial Information
The financial information contained in this document does not constitute
statutory accounts within the meaning of section 240 of the Companies Act
1985. The comparative figures for the financial period ended 31st August 2003
have been extracted from the company's interim report for that financial
period. The statutory accounts for the period ended 29th February 2004 have
been given an unqualified audit report and have been filed with the Registrar
of Companies.
3 Turnover
The group's turnover has been analysed by
principal activity as follows:
6 Months to 6 Months to Year ended
31.8.2004 31.8.2003 29.2.2004
£'000 £'000 £'000
Development profit - 350 350
share
Development 111 194 252
management
Interior design 989 685 1,877
Architect design 209 577 1,356
-------- -------- -------
1,309 1,806 3,835
======== ======== =======
4 Administrative Expenses
The administrative expenses of £2,173,108 (6 months to 31st August 2003:
£2,384,631) include amortisation of goodwill of £630,604 (6 months to 31st
August 2003: £388,065).
5 Taxation
There is no taxation charge due to the availability of
losses.
6 Creditors due within one year
31.8.2004 31.8.2003 29.2.2004
Unaudited Unaudited Audited
£'000 £'000 £'000
Bank loans and overdrafts 2,161 2,082 2,065
Trade creditors 784 909 781
Social security and other 471 405 655
taxes
Other creditors 1,547 1,504 1,599
Obligations under finance leases
and
hire purchase contracts - 16 16
Accruals and deferred income 737 675 896
-------- -------- -------
5,700 5,591 6,012
======== ======== =======
7 Shareholders' Funds £'000
The reconciliation of movements in shareholders'
funds is as follows:
Shareholders' funds at 1st March 9,502
2004
Retained loss for the period (1,560)
-------
Shareholders' funds at 31st 7,942
August 2004 =======
8 Earnings Per Share
The basic loss per share has been calculated on the loss on ordinary
activities after tax of £1,559,892 (2003 - £1,209,388) and on the weighted
average number of shares in issue in the six months to 31st August 2004 of
22,713,644 (2003 - 22,713,644).
The fully diluted loss per share has been calculated on the loss on ordinary
activities after tax (as adjusted for convertible loan stock) of £1,559,824
(2003 - £1,204,114) and on the weighted average number of shares in issue in
the six months to 31st August 2004 (as adjusted for the dilutive effect of
options treated as exercisable at the period end) of 23,360,553 (2003 -
23,715,997).
9 Reconciliation of Operating
Loss to Net Cash Flow
from Operating
Activities
6 Months to 6 Months to Year ended
31.8.2004 31.8.2003 29.2.2004
£'000 £'000 £'000
Group operating loss (1,372) (1,105) (3,112)
Depreciation 15 25 48
(Increase)/decrease in 135 (72) (181)
work in progress
(Increase)/decrease in (288) (371) 257
debtors
Decrease in creditors (672) (711) 76
Amortisation of 631 388 1,261
goodwill
Profit on disposal of - - (5)
fixed assets --------- --------- ---------
Net cash outflow from (1,551) (1,846) (1,656)
operating activities ========= ========= =========
10 Reconciliation of Net Cash
Flow to Movement in Net
Debt
6 Months to 6 Months to Year ended
31.8.2004 31.8.2003 29.2.2004
£'000 £'000 £'000
Increase in cash in the 22 1,926 1,906
period
Cash (inflow)/outflow
resulting from (increase)/
decrease
in debt and lease (1,814) 1,153 1,153
financing
Net debt at start of (3,051) (6,110) (6,110)
period --------- --------- ---------
Net debt at end of (4,843) (3,031) (3,051)
period ========= ========= =========
11 Analysis of changes in At Cash At
Net Debt 1.3.2004 Flow 31.8.2004
£'000 £'000 £'000
---------
Cash at bank and in 90 118 208
hand
Bank loans and (2,065) (96) (2,161)
overdrafts ---------
22
---------
---------
Debt due within one (1,060) - (1,060)
year
Finance leases (16) 16 -
Debt due after more than - (1,830) (1,830)
one year ---------
(1,814)
---------
--------- --------- ---------
(3,051) (1,792) (4,843)
========= ========= =========
12 Dividends
The directors do not recommend the payment
of an interim dividend.
13 Post Balance Sheet Events
On the 20th September 2004 the company completed on the sale of its
freehold offices at 48 Old Church Street, London for £2.85 million. The
proceeds have been used to fully redeem the debt to Coutts & Co. and
reduce the creditor position.
14 Other Information
The interim statement was approved by the directors
on 11 November 2004
A copy of the interim statement will be posted to shareholders and made
available to the public for a period of 14 days from today at the
company's registered office: 48 Old Church Street, London SW3 5BY.
Independent Review Report to Northacre PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31st August 2004 which comprises the consolidated profit
and loss account, the consolidated balance sheet, the consolidated cash flow
statement and the related notes. We have read the other information contained in
the interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The Listing
Rules of the London Stock Exchange require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and based thereon, assessing
whether the accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31st August 2004.
Kingston Smith
Chartered Accountants
Devonshire House
60 Goswell Road
London EC1M 7AD
11 November 2004
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