Final Results

Northacre PLC
26 August 2003

                                 NORTHACRE PLC
                          ('Northacre' or 'the Group')

            Preliminary Results for the year ended 28 February 2003

Northacre PLC, the premier developer of landmark residential property schemes in
Central London, today announces preliminary results for the year to 28 February
2003.

•       KINGS Chelsea development sales continue with delayed construction
completion now imminent.

•       The Phillimores development (Queen Elizabeth College) remains on
programme with further sales in progress.

•       Our new joint venture with First Islamic Investment Bank ('FIIB')
provides us with strong financial support for a rolling plan of new
developments, with the first acquisition (Vicarage Gate House) now complete.

•       Disposal of Northacre's equity interest in The Phillimores has
strengthened the balance sheet, increased working capital and provided funds for
further commitment to our new developments with FIIB.

•       Following a slowdown in market activity there are positive signs of an
improvement feeding through to further sales.



John Hunter, Chief Executive, commented:

'Our joint venture with FIIB provides us with the resources to fund new
opportunities in the prime residential sector.  Whilst the residential property
market in Central London has experienced some slowing down in activity our
unrivalled brand, quality of product combined with our skills and experience
gives us a clear advantage in the pursuit of potential development sites.'



                                                                 26 August 2003


Enquiries:

Northacre PLC                                            Tel: [phone]
John Hunter, Chief Executive
Simon Elgar, Finance Director

College Hill Associates                                  Tel: [phone]
Kate Pope






                                 NORTHACRE PLC
                          ('Northacre' or ' the Group')

                        Preliminary Results Announcement


Overview

Northacre's core focus is in the business of adding value through the
development of prime residential opportunities.  The Northacre brand continues
to be synonymous with top grade quality schemes in well established landmark
locations.

Financial Results

Turnover, including share of associates, for the period was £3,845,825 (2002:
£6,644,610 as restated) with gross profit of £3,418,809 (2002: £4,048,396 as
restated).  Pre-tax loss was £2,412,656 (2002: £1,776,256 as restated) before
amortisation of goodwill with a basic loss per share of 14.26 pence (2002: 10.73
pence as restated).  The Board is not declaring an interim dividend payment.



These results have been adversely impacted by further delays at the KINGS
Chelsea development, a change in accounting policy, provision taken against the
South Audley Street investment and reduced income from Lifestyles (Interiors).



On 16 May 2003 Northacre announced the disposal of its interest in The
Phillimores development to its joint venture partner, Westcity (QEC) Limited,
for the book value of £5.4 million, less interest of £382,000.  The proceeds
from the sale have been used to strengthen our balance sheet, increase working
capital and to fund our commitment to Vicarage Gate House.



Accounting Policy

The Board has carefully re-examined the Group's revenue recognition accounting
policy to assess its continuing suitability given the nature of the Group's
business.   Revenue represents amounts invoiced by the Group in respect of
services rendered during the period net of value added tax.  Our participation
in development profits and bonus fees are now recognised when the amounts have
been finally determined.  This represents a change in accounting policy.
Previously such profit shares and fees were recognised in some cases over the
life of the developments.  The Board believes this new policy is more prudent
and reflects the nature of our business.  Consequently the financial statements
for the year to 28 February 2002 have been restated.



This change in accounting policy has no impact on underlying cash flows and is
simply one of timing.  The effect of the change has resulted in an increased
loss for the period under review.



Operating Subsidiaries

Against challenging market conditions, our operating subsidiaries have all seen
reduced income in the period.  Lifestyles (Interiors) has been through a
difficult period of low activity as well as some management restructuring.
However, the pipeline of new business has been strong since the year-end, with a
healthy increase in the private client base - we are now more confident of a
significant improvement in turnover for 2004.





Operational Review



Vicarage Gate House

On 16 May 2003 we announced the acquisition of Vicarage Gate House in a joint
venture with First Islamic Investment Bank (FIIB).  A planning application has
been submitted to demolish the existing building in order to enable the
construction of a prime residential scheme.  We anticipate planning will be
achieved in 2004.



Northacre has a 10% equity interest in the development together with a
substantial profit share scheme on the successful completion of the project.
All three of the Group's divisions are involved in this project.



The Phillimores (Sir John Atkins / Queen Elizabeth College)

The Queen Elizabeth College scheme is on programme and practical completion
anticipated by the end of 2004.  Following the recovery of our equity  in the
scheme  Northacre has secured a carried interest in the form of a deferred
consideration amounting to a  maximum of £2.75 million dependent on the sales
revenues generated from the completed project.  Northacre remains responsible
for delivering the completed scheme as Development Managers as well as
Architects through Nilsson Design Limited.



During the period, Northacre received development and design fees in relation to
The Sir John Atkins scheme for which it recently secured a planning consent. The
company is no longer involved in this second Phillimores project.



KINGS Chelsea

As previously announced, the KINGS Chelsea development has been subject to
construction delays. We now anticipate practical completion of the scheme in
September 2003.  Under the new accounting policy, no profit has been recognised
for this scheme in the period under review.



South Audley Street

Negotiations with our joint venture partner have continued.  However, given the
absence of tangible progress, the Board has taken the prudent decision of
providing in full against the value of our equity stake of £1.25 million.



Earls Terrace

Post our February year-end, we have reached a settlement of outstanding profits
due to the company relating to this scheme for the sum of £350,000, albeit this
figure is well below our expectations it was felt that commercially it would be
more prudent to settle the matter.  This amount will be included in our next
financial year.



Outlook

There is no doubt that our new venture in conjunction with FIIB provides us with
the financial muscle necessary to secure some exciting new opportunities in this
niche sector of the London market where our brand is well established.  In
addition we are now more able to charge market level fees for our operating
companies.



Whilst during this financial year, the London market has suffered from some
uncertainties, the general view remains that, while London continues to perform
as a global financial centre, a healthy demand for The Northacre style of
development will be maintained.



On 15 August 2003 the company made the following announcement on the Stock
Exchange:



'Northacre PLC ('Northacre' or 'the Group') notes the recent movement in its
share price and confirms it has received a preliminary approach from Messrs
Nilsson and Hunter, Chairman and Chief Executive respectively, that may or may
not lead to an offer for Northacre.  An independent committee of the Board has
been formed to consider any resultant proposal.  This approach is at an early
stage and a further announcement will be made in due course.'



                          Consolidated Profit and Loss
                      For the year ended 28 February 2003

                                                                             Note          2003            2002
                                                                                              £               £
                                                                                                  (as restated)

          Turnover including share of associates                                      3,845,825       6,644,610
          Share of turnover of associates                                             (251,207)       (246,887)
          Group Turnover - Continuing Activities                                2     3,594,618       6,397,723
          Cost of sales                                                               1,001,939     (2,349,327)
          Less: Exceptional item                                                3     (826,130)               -
                                                                                      (175,809)     (2,349,327)
          Gross Profit                                                                3,418,809       4,048,396
          Administrative expenses                                                   (4,686,559)     (6,236,658)
          Other operating income                                                         19,904         196,800
          Group Operating Loss                                                      (1,247,846)     (1,991,462)
          Share of operating profit/(loss) of:                                                                 
          Associates                                                                    111,964          20,044
          Joint ventures                                                                      -        (65,662)
          Operating Loss including share of associates and joint ventures           (1,135,882)     (2,037,080)
          Provisions against investments                                        4   (1,566,077)               -
          Loss on Ordinary Activities before Interest                                                          
          and Investment Income                                                     (2,701,959)     (2,037,080)
          Income from investments                                                        81,000               -
          Interest receivable                                                                 -           2,648
          Interest payable and similar charges                                        (567,827)       (517,954)
          Loss on Ordinary Activities before Taxation                               (3,188,786)     (2,552,386)
          Taxation                                                                     (50,972)         130,039
          Retained Loss for the Year withdrawn from Reserves                        (3,239,758)     (2,422,347)
          Basic loss per ordinary share                                                (14.26)p        (10.73)p
          Fully diluted loss per ordinary share                                        (11.60)p        (10.05)p


                    Consolidated Balance Sheet at 28 February 2003
                                                                                                                 
                                                     Note          2003          2003          2002          2002
                                                                      £             £             £             £
                                                                                                      as restated
       Fixed Assets                                                                                              
       Intangible fixed assets                                             12,612,084                  13,388,214
       Tangible fixed assets                                                3,404,791                   4,087,156
       Investments                                                                  -                   1,250,000
       Investments in joint venture                                         5,401,000                   5,709,610
       Investment in associates                                               132,636                      54,262

                                                                           21,550,511                  24,489,242
       Current Assets                                                                                            
       Work in progress                                          15,866                      45,286              
       Debtors due within one year                              635,808                   1,457,409              
       Cash at bank and in hand                                 199,358                       8,059              
                                                                851,032                   1,510,754              
       Creditors: Amounts falling due                                                                            
       within one year                                      (9,454,967)                 (8,674,497)              
       Net Current Liabilities                                            (8,603,935)                 (7,163,743)
       Total Assets less Current Liabilities                               12,946,576                  17,325,499
       Creditors: Amounts falling due                                                                            
       after more than one year                                                     -                   (644,331)
       Net Assets                                                          12,946,576                  16,681,168
       Capital and Reserves                                                                                      
       Called up share capital - equity interests                             567,841                     567,841
       Share premium account                                               17,449,610                  17,449,610
       Revaluation reserve                                                          -                     494,834
       Profit and loss account                                            (5,070,875)                 (1,831,117)
       Shareholders' Funds                                                 12,946,576                  16,681,168

                          Consolidated Cash Flow Statement
                         For the year ended 28 February 2003

                                                                                                                 
                                                             Note        2003        2003        2002        2002
                                                                            £           £           £           £
       Net Cash (Outflow)/Inflow                                                                                 
       from Operating Activities                                                 (27,681)                 443,359
       Returns on Investments and Servicing                                                                      
       of Finance                                                                                                
       Interest received                                                    -                   2,648            
       Interest paid                                                (558,507)               (496,822)            
       Interest element of finance lease rental payments              (9,320)                (21,132)            
       Dividend received                                               81,000                       -            
                                                                                (486,827)               (515,306)
       Taxation                                                                                                  
       Corporation tax                                                             18,123               (497,224)
       Capital Expenditure and Financial Investment                                                              
       Purchase of properties                                               -                (25,116)            
       Purchase of other tangible assets                             (18,110)                (24,342)            
       Sale of other tangible assets                                   85,190                  19,327            
       Net cash inflow/(outflow) for capital expenditure                                                         
       and financial investment                                                    67,080                (30,131)
       Acquisitions                                                                                              
       Investment in joint venture                                    (7,467)               (295,149)            
       Net cash outflow for acquisitions                                          (7,467)               (295,149)
       Financing                                                                                                 
       Issues of ordinary share capital (net of expenses)                   -                 650,000            
       Capital element of finance lease rental payments             (106,919)                (65,751)            
       Increase/(Decrease) in debt due within one year                350,633               (533,198)            
       Net cash inflow from financing                                             243,714                  51,051
       Decrease in Cash in the Year                                             (193,058)               (843,400)



Notes to the Preliminary Results
For the year ended 28 February 2003

1. Principal Accounting Policies

The principal accounting policies, which are unchanged from last year with the
exception of turnover as detailed below, 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                                        33% straight line
Motor vehicles                                            25% straight line

It is the group'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 net of value added tax.  Shares in development
profits and bonus fees are recognised when the amounts involved have been
finally determined.  This represents a change in accounting policy.  Previously
such profit shares and fees were recognised in some cases over the life of the
developments in question.  The directors believe that the new policy more fairly
reflects the nature of these transactions.



Deferred Taxation

Deferred tax is recognised as a liability or asset if the transactions or events
that give the group 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 directors' and 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.

                                                                   2003        2002
                                                                      £           £
                                    Principal activities:                          
                                    Introduction fees                 -      70,000
                                    Development management      865,060   1,245,941
                                    Interior design           1,145,797   3,037,786
                                    Architect design          1,583,761   2,043,996
                                                              3,594,618   6,397,723

3. Exceptional Item

The credit represents the release of a provision no longer required in respect
of a third party's entitlement to a profit share on a completed development.

4. Provisions Against Investments

                                                                        2003                        2002
                                                                           £                           £

Diminution in value of joint ventures                                316,077                           -
Diminution in value of other investments                           1,250,000                           -

                                                                   1,566,077                           -


5. Prior Year Adjustment

The prior year adjustment relates to the change in accounting policy for
turnover as described in note 1.  This gives rise to a cumulative charge of
£2,080,000 to the reserves of the group as at 28th February 2003 of which
£1,135,000 relates to the 2002 accounts and £945,000 to 2001.  The comparative
figures for 2002 have been restated in these accounts in accordance with the new
accounting policy, resulting in an increase in the group's loss for that year of
£1,135,000.  Had the new accounting policy not been adopted in the current year,
the group's retained loss for the year would have been £2,819,758 instead of
£3,239,758.


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