Final Results

Northacre PLC 28 August 2002 NORTHACRE PLC ('Northacre' or 'the Group') Preliminary Results for the year ended 28 February 2002 Northacre, the premier developer of landmark residential property schemes in Central London, today announces preliminary results for the year ended 28 February 2002 • Planning consent secured on The Phillimores development - early marketing activities have generated in excess of £50 million of sales • South Audley Street planning consent granted - agreed extension to completion contract with works to commence in 2003 • KINGS Chelsea is now firmly established as one of London's finest new residential developments - over 90% of the total units pre-sold, securing over £200 million of gross revenue to the scheme • Nilsson Design and Lifestyles (Interiors) continue to provide strong growth and consistent income • Exciting new opportunities being created from the strength of Northacre's brand John Hunter, Chief Executive, commented: 'The Group has made further significant progress over the last year with planning consents secured on two important schemes at The Phillimores and South Audley Street. Our current work in progress represents more certainty for securing revenues and profits for the future. Northacre's strong branding and reputation for producing quality schemes is now providing further avenues of opportunity for the Group, which we intend to build upon going forward.' 28 August 2002 Enquiries: Northacre PLC Tel: 020 7349 8000 John Hunter, Chief Executive Simon Elgar, Finance Director College Hill Associates Tel: 020 7457 2020 Kate Pope NORTHACRE PLC Chairman's Statement Northacre plc announces preliminary results for the year ended 28 February 2002 Financial Results Pre-tax loss for the period was £641,000 before amortisation of goodwill (2001: £814,000 pre-tax profit) on a reduced turnover of £7.7 million (2001: £8.7 million). These results were impacted by the continued delay in the final settlement of profits from Earls Terrace. Loss per share was 5.70 pence (2001: 0.43 pence). The Board is not declaring a dividend payment for the period. The Board of Northacre has now taken the decision to provide in full against the anticipated profit share due from the Earl's Terrace development. This outstanding profit share is now subject to arbitration and whilst the Board is confident that settlement of the full payment will be met, the timing of the receipt remains uncertain. As previously indicated, the projects that the Group undertakes are of a long-term nature. Each project can take between three to five years to complete and therefore the timing of the receipt of profits from each project can be unpredictable. Overview I am delighted to report that planning consent has now been secured on two of our major developments. The Phillimores, a joint venture with the Westcity Group, has now received planning consent and work has commenced on site. The prospects for this scheme are excellent and substantial pre-sales have already been secured at this early stage. We anticipate that group fees and a share of development profits will provide a strong profit flow for the future. The securing of planning consent on South Audley Street is another significant achievement. We have agreed with the vendors to a further extension to completion of the contract and we expect to make an announcement on the progress of this development shortly. KINGS Chelsea, in which Northacre acts as both development manager and auditing architect, continues to make steady progress. Despite difficult market conditions in the latter half of last year, further sales were achieved in the period with over 90% of units now pre-sold. Completion is expected during 2003. Board Appointments The Board is delighted to announce the appointment of Simon Elgar (42) as Finance Director with immediate effect. Simon qualified as a Chartered Accountant with BDO Stoy Hayward in 1985. He has worked for twelve years in the property industry for both private and public companies. Since 1996, he has been the Finance Manager and Company Secretary of MAB Limited, the UK subsidiary of a Dutch development company. Prior to that, he was Financial Controller of Compco plc, a quoted property company. On 28 March 2002 Northacre announced the appointment of Paul Vesty as Project Director. I would like to take this opportunity to welcome them both to the Board of Northacre where their knowledge and skills will assist in strengthening the Board. Outlook With planning consent now secured on two major developments, Northacre is now clearly demonstrating its ability to provide significant revenues for the future. The Northacre brand continues to be the premier name for quality residential development. Our reputation as a developer of landmark sites is now attracting interest from major London landowners who wish to engage the Group in developing property interests. We continue to pursue these and other new opportunities. Our strategy remains clear. We believe that Northacre, with its current developments and with further future prospects, is now in a strong position to create long-term growth and value. Peter Catto Non Executive Chairman NORTHACRE PLC Chief Executive's Review I am delighted to report significant progress on our current portfolio of projects with the securing of planning consent on two sites, particularly The Phillimores development in London, W8. The Phillimores While planning consent on The Phillimores has taken longer to secure than originally anticipated, it is of considerable significance that this is now in place. Works have commenced and early forward sales have already secured £50 million of revenue to date. Lifestyles (Interiors) will soon have created a completed show apartment in the existing building two years ahead of the development's completion. This will substantially enhance the prospects of further sales this year. This joint venture, with the Westcity Group, will create one of London's finest residential landmark schemes since our scheme at The Bromptons. The project will generate fee income to the Group of up to £1 million per annum as well as a significant profit share participation over the three-year period. South Audley Street Planning consent has now been secured on the Thomas Goode site in South Audley Street. This period Mayfair landmark property will be developed into 2 houses and 11 residential apartments as well as a refurbished retail premises for Thomas Goode. With a further extension of our contract agreed, we anticipate that works will commence on site in 2003. KINGS Chelsea In association with European Land, the KINGS Chelsea development continues to make good progress with 260 of the 288 units pre-sold, generating over £200 million of gross revenue. The completion date has been revised to mid 2003, at which point we expect the majority of the remaining units to have been sold. We continue to receive development fees for all three Group companies, of which £996,468 is in the period under review. The Group will receive a performance related profit share on completion of the scheme, which is due to fall within Northacre's financial year to February 2004. In the period under review, we have recognised £1.135 million of profit. Earls Terrace Despite the fact that the Earls Terrace development was successfully completed over a year ago with all houses sold, the balance of profits due to Northacre remains outstanding. It is with regret that the Board has now taken the necessary action to secure the outstanding balance with an application for the appointment of an Arbitrator. By making full provision in these financial results for our outstanding profits, the Group has recognised that the likely timing of these receipts remains uncertain. Nilsson Design and Lifestyles (Interiors) Limited Nilsson Design and Lifestyles (Interiors) achieved another year of good growth with both companies now well established as leading firms comprising specialist and highly skilled teams of designers. Following new appointments and the strengthening of the Lifestyles team this Group company is actively campaigning to secure new business opportunities. We anticipate that both Nilsson Design and Lifestyles will continue to provide strong revenue streams for the future. The Future In the period under review, the Group has made strong progress on all our developments. We continue to seek and acquire equity interests in similar schemes in order to strengthen and build on our portfolio of projects. Whilst the appetite for London's prime residential property market continues to grow, so too does the competition for acquiring suitable opportunities for development. However, not withstanding these circumstances, it is evident that Northacre's brand and strong reputation for producing quality schemes is providing further avenues of opportunity for the Group, which we intend to build upon. John Hunter Chief Executive Consolidated Profit and Loss For the year ended 28 February 2002 Note 2002 2001 £ £ Turnover including share of associates 7,779,610 8,758,169 Share of turnover of associates (246,887) (236,057) Group Turnover - Continuing Activities 2 7,532,723 8,522,112 Cost of sales (2,349,327) (2,302,399) Gross Profit 5,183,396 6,219,713 Administrative expenses (6,236,658) (6,225,708) Other operating income 196,800 140,639 Group Operating (Loss)/Profit (856,462) 134,644 Share of operating profit/(loss) of: Associates 20,044 27,786 Joint ventures (65,662) - Operating (loss)/profit including share of associates (902,080) 162,430 Profit on sale of investment properties - 169,440 (Loss)/Profit on Ordinary Activities before Interest (902,080) 331,870 Interest receivable 2,648 30,213 Interest payable and similar charges (517,954) (323,569) (Loss)/Profit on Ordinary Activities before Taxation (1,417,386) 38,514 Taxation 130,039 (122,800) Retained Loss for the Year withdrawn from Reserves (1,287,347) (84,286) Basic loss per ordinary share (5.70)p (0.43)p Fully diluted loss per ordinary share (5.25)p (0.20)p NORTHACRE PLC Consolidated Balance sheet at 28 February 2002 Note 2002 2002 2001 2001 £ £ £ £ Fixed Assets Intangible fixed assets 13,388,214 14,164,344 Tangible fixed assets 4,087,156 3,806,774 Investments 1,250,000 1,250,000 Investments in joint venture 5,709,610 5,480,123 Investment in associates 54,262 34,218 24,489,242 24,735,459 Current Assets Work in progress 45,286 13,039 Debtors due within one year 3,537,409 2,635,319 Cash at bank and in hand 8,059 1,565 3,590,754 2,649,923 Creditors: Amounts falling due within one year (8,674,497) (7,617,230) Net Current Liabilities (5,083,743) (4,967,307) Total Assets less Current Liabilities 19,405,499 19,768,152 Creditors: Amounts falling due after more than one year (644,331) (734,471) Net Assets 18,761,168 19,033,681 Capital and Reserves Called up share capital - equity interests 567,841 530,568 Share premium account 17,449,610 16,836,883 Revaluation reserve 494,834 130,000 Profit and loss account 248,883 1,536,230 Shareholders' Funds 18,761,168 19,033,681 NORTHACRE PLC Consolidated Cash Flow Statement For the year ended 28 February 2002 Note 2002 2002 2001 2001 £ £ £ £ Net Cash Inflow from Operating Activities 443,359 2,611,263 Returns on Investments and Servicing of Finance Interest received 2,648 30,213 Interest paid (496,822) (304,685) Interest element of finance lease rental payments (21,132) (18,884) (515,306) (293,356) Taxation Corporation tax (497,224) (254,492) Capital Expenditure and Financial Investment Purchase of properties (25,116) (780,560) Purchase of other tangible assets (24,342) (2,961,035) Sale of investment properties - 950,000 Sale of other tangible assets 19,327 18,494 Non-returnable deposit in respect of potential acquisition - (1,250,000) Net cash outflow for capital expenditure (30,131) (4,023,101) Acquisitions Investment in joint venture (295,149) (5,480,123) Net cash outflow for acquisitions (295,149) (5,480,123) Financing Issues of ordinary share capital (net of expenses) 650,000 2,401,000 Capital element of finance lease rental payments (65,751) (54,833) (Decrease)/increase in debt (533,198) 1,357,368 Net cash inflow from financing 51,051 3,703,535 Decrease in Cash in the Year (843,400) (3,736,274) NORTHACRE PLC Notes to the Preliminary Results For the year ended 28 February 2002 1. Principal Accounting Policies The principal accounting policies, which are unchanged from last year, are as follows: Accounting basis and standards The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold property, and in accordance with applicable accounting standards. Basis of Consolidation The group accounts include the accounts of the company and its subsidiary undertakings, together with the group's share of the results of joint ventures and associates. Depreciation Depreciation on fixed assets is provided at rates estimated to write off the cost or revalued amounts, less estimated residual value, of each asset over the expected useful life as follows: Freehold buildings Nil Fixtures, fittings and office equipment 25% straight line Computer equipment 331/3% straight line Motor vehicles 25% straight line It is the company's practice to maintain its freehold buildings in a continual state of sound repair and to make improvements thereto from time to time. The directors' review the valuation of the buildings annually for impairment in its value and as they consider that the residual value at the end of the useful economic life will not be less than its present carrying value, no depreciation is chargeable. Work in Progress 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. Turnover Turnover represents amounts invoiced by the group in respect of services rendered during the period and accrued profit shares stated net of value added tax. Deferred Taxation Deferred tax is recognised as a liability or asset if the transactions or events that give the company an obligation to pay more tax in future or a right to pay less tax in future have occurred by the balance sheet date. Leased Assets Assets held under finance leases and hire purchase contracts are capitalised in the balance sheet and depreciated over their expected useful lives. The interest element of the rental obligations is charged to profit and loss account over the period of the lease on a straight-line basis. Rentals under operating leases are charged to income on a straight-line basis over the lease term. Investments Fixed asset investments are stated at cost less amounts written off. Goodwill Goodwill is determined by comparing the amount paid on the acquisition of a business and the aggregate fair value of its separable net assets and is written off over its estimated minimum economic life of 20 years. Pension Scheme Arrangements The group operates a money purchase scheme on behalf of two of its directors. It also contributes to certain employees' personal pension schemes. Pension costs charged represent the amounts payable to the schemes in respect of the period. 2 Turnover The group's turnover was derived from its principal activities: 2002 2001 £ £ Introduction fees 70,000 90,000 Profit shares - property development 1,135,000 3,517,235 Development management 1,245,941 798,225 Interior design 3,037,786 3,232,500 Architect design 2,043,996 884,152 7,532,723 8,552,112 3 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. This information is provided by RNS The company news service from the London Stock Exchange

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