Final Results

Northacre PLC
21 August 2006


                                 Northacre Plc
                  Results for the year ending 28 February 2006


Northacre today announces its results for the year ended 28 February 2006.


  • Turnover increased to £8.1 million (2005:£3.0 million) and pre-tax
    profit before amortisation of goodwill, of £2.3 million. (2005: Loss £1.18
    million).


  • Final sales completed and a commercial settlement agreed for payment of
    the KINGS Chelsea profitshare entitlement in the financial year.


  • Majority of sales complete and the sales overage entitlement agreed for
    payment on The Phillimores since the financial year-end.


  • Further planning delays at Vicarage Gate House now likely to involve a
    High Court decision in 2006 and a second Public Inquiry in 2007.


  • Mayfair development on programme at 44-46 Park Street for practical
    completion in 2006 with the potential for the receipt of some profitshare
    entitlement in the financial year to February 2007.


  • Joint Venture acquisition of The Odeon Cinema site in Kensington High
    Street completed in the financial year for commencement of the residential
    development in 2007, subject to securing the appropriate planning consent.


  • Further Joint Venture acquisition of 75 - 89 Lancaster Gate (former
    Thistle Hotel) with residential consent exchanged in the financial year and
    since completed for residential development in 2007.


  • Since the financial year-end there has been additional fee income
    secured by all Group subsidiaries, enhancing future growth prospects.


  • Further new opportunities under consideration for further fee income and
    additional profitshare through joint venture acquisitions in prime Central
    London as well as Central European sites.


  • Market conditions remain buoyant and favourable for future growth.


'Northacre has made considerable progress this year. The Group has at last
managed to reach a settlement of its profitshare entitlement on two major
schemes at KINGS Chelsea and The Phillimores. Although these amounts were less
than anticipated, the receipts have been effective in reducing the Group's debt
position.


A new programme of development activity is underway with two new major prime
development schemes, acquired in partnership with Minerva PLC at The Odeon,
Kensington High Street and Lancaster Gate, Hyde Park. With Park Street and
Vicarage Gate House in progress, Group fee income has improved with the prospect
of profit growth in the short to medium term.



Copies of the Annual Report and Accounts will be available at the office of
Northacre Plc at 48 Old Church Street, London SW3 5BY and are being posted to
shareholders.


                                                           21st August 2006


Enquiries:

Northacre Plc                        Tel : [phone]
John Hunter, Chief Executive
Manish Santilale, Finance Director




Overview


Northacre's brand name is now firmly established at the forefront of the market
for prime residential development market in Central London. The company's
revival concept for breathing new life and purpose into old period style
buildings has now become the Group's trademark. With its skilled team of
development managers, architects and interior designers, creating added value
through the development process continues to be the Group's forte. Together with
the work in progress at Park Street and Vicarage Gate House, the Group has
acquired two new revival opportunities in the financial year both in partnership
with Minerva PLC at The Odeon Cinema in Kensington High Street and Lancaster
Gate (former Thistle Hotel) opposite Hyde Park. The combination of these schemes
has lead to improved fee income and is likely to improve the short to medium
term prospects for continued profit growth.


Financial Results


Turnover, including share of associates, for the period was £8,122,417 (2005
£3,039,401) with gross profit of £5,749,558 (2005 £1,445,348). Pre-tax profit
was £2,301,360 (2005 loss £1,182,267) before amortisation of goodwill with a
basic earnings per share of 4.58 pence (2005 loss 10.76 pence) The Board is not
declaring a dividend payment.


Securing the profitshare entitlements on KINGS Chelsea and The Phillimores has
had a positive impact on these results albeit these receipts were later than
forecast and of an amount lower than anticipated. On KINGS Chelsea the
entitlement has been settled at £1.6m and on The Phillimores the sales overage
entitlement of £2.7m has been agreed with these funds received since the year
end. These amounts have been fully utilised in reducing the Group's debt
position.


Board Changes


The Board is delighted to announce the appointment of Edward Harris as
Non-Executive Director effective from 5th December 2005. Edward Harris, whose
background is in Cost and Project Management, has previously worked as a
consultant on a number of Northacre schemes. Edward replaces Shemeel Khan who
resigned on 5th December 2005.


Operating Subsidiaries


As a result of planning and construction delays, the operating subsidiaries have
suffered from lower activity and fee income. Measures were implemented to reduce
overheads throughout the Group during the period. More recently, following the
appointment of a new Managing Director in our interior design company, new
assignments have been secured. Since the financial year-end, improved income
from all subsidiaries is now generating a positive contribution to the Group.



Operational Review


KINGS Chelsea


Construction delays in completing the development at KINGS Chelsea resulted in
slower than anticipated sales. The Board took the commercial view to accept
£1.6m as full and final settlement of the Group's entitlement to profitshare in
order that the Group could focus its resources on new projects in hand.


The Phillimores


Although two apartments remain unsold at The Phillimores, the sales overage
entitlement has been agreed at £2.7m. An amount remains due for the two unsold
apartments when these sales are completed.


Vicarage Gate House


Following the unconditional acquisition of Vicarage Gate House in May 2003, the
proposed residential scheme has since been immersed in a planning struggle, as
yet unresolved. To the surprise of many, the scheme was refused at a Public
Inquiry in October 2005. Although this was disappointing, we are confident that
with the Secretary of State's decision not to support the Inspector's refusal, a
positive outcome will be reached in the High Court by the end of 2006. This will
require that the scheme returns to another Public Inquiry before a residential
scheme can be granted. Accordingly, the site loan with Deutsche Postbank has
been formally extended.


44-46 Park Street


Construction work at 44-46 Park Street continues on programme for practical
completion by the end of 2006. The marketing of the scheme is planned with the
launch of the 'Ambassadorial' show apartment by Lifestyles Interiors in October
2006. Subject to sales activity, we anticipate some payment of profitshare
entitlement in the financial year to February 2007. In the meantime, the Group
receives Development Management, Architectural and Interior Design fees from
this ongoing development.


The Odeon and Lancaster Gate


The acquisition of these two new prime Central London opportunities comes at a
time when the market is experiencing high levels of demand. Moreover, both
schemes ideally lend themselves to the revival treatment that was so successful
at The Bromptons and The Phillimores. Odeon will become a high profile landmark
site for a new mixed use multiscreen cinema and residential scheme, while
Lancaster Gate will generate circa 100 apartments overlooking Hyde Park. In both
schemes, the Group has secured an exciting prospect for profit participation.


Outlook


Although the receipts of profitshare entitlement on both KINGS Chelsea and The
Phillimores were late and lower than anticipated, these receipts have had a
positive impact on the results. The planning struggle at Vicarage Gate House
continues with a final outcome anticipated in 2007. In the meantime, the Park
Street development is on schedule for producing profitshare receipts in the
current financial year to February 2007.


Two new major development sites at The Odeon, Kensington and Lancaster Gate Hyde
Park have been transacted during the financial period under review. Although The
Odeon requires planning consent for change of use to residential, the site is
identified within the local plan as a site for major residential development. It
is planned that these new projects will commence works on site in 2007. The
company has secured itself a substantial entitlement to profits from both of
these schemes at a level more commensurate with its investment and operating
role.


It is evident in the market that generally, there appears to be an almost
insatiable appetite for high quality residential developments in prime Central
London. It is also clear however that, while there is a tendency for this
buoyancy to be overstated, the Group is now well placed, with its portfolio of
revival schemes, to take full advantage of these favourable market conditions.


Our strategy is to continue to seek and acquire equity interest in similar
residential schemes to generate fee income and development profits. Our market
remains buoyant, there continues to be new opportunities where the skills and
market knowledge inherent within our Group are able to create enhanced value to
our shareholders.


On a final note, and in view of the recent changes in our business, the Board
have decided to review their accounting policy for the future in respect of the
recognition of profit shares and bonus fees from our new developments. Following
discussions with our auditors it is the Board's intention to implement a policy
of recognising revenue at an earlier stage based on the progress value of each
development on an annual basis and subject to them reaching certain development
milestones over the life of the scheme.



Consolidated Profit and Loss Account
For the year ended 28th February 2006

                                                      2006          2005
                                                         £             £
Turnover including share of associates           8,122,417     3,039,401
Share of turnover of associates                   (247,363)     (227,761)
                                                 ----------    ----------

Group Turnover - continuing activities           7,875,054     2,811,640
Cost of Sales                                   (2,125,496)   (1,366,292)
                                                 ----------    ----------

Gross Profit                                     5,749,558     1,445,348
Administration Expenses                         (4,799,714)   (3,611,761)
Other operating income                              67,085        30,927
                                                 ----------    ----------

Group Operating Profit/(Loss) - continuing       1,016,929    (2,135,486)
activities

Share of profit / (loss) of associate               12,823       (12,497)
                                                 ----------    ----------
                                                
Operating Profit/(Loss) including share of       1,029,752    (2,147,983)
associates and joint ventures
                                                 ----------    ----------

Profit/(Loss) on Ordinary Activities before      1,029,752    (2,147,983)
Interest and Investment Income
Income from investments                             70,000        70,000
Interest receivable                                  7,481        66,828
Interest payable and similar charges               (67,081)     (432,320)
                                                 ----------    ----------

Profit/(Loss) on Ordinary Activities before      1,040,152    (2,443,475)
Taxation
Taxation                                                 -             -
                                                 ----------    ----------

Retained Profit/(Loss) for the Year              1,040,152    (2,443,475)
                                                 ==========    ==========

Basic profit/(loss) per ordinary share                4.58p      (10.76)p
                                                 ==========    ==========





Consolidated Balance Sheet at 28th February 2006

                                 2006         2006         2005         2005
                                    £            £            £            £

Fixed Assets
Intangible fixed assets                  8,828,460                10,089,668
Tangible fixed assets                       20,748                    30,934
Investments in joint ventures            1,596,225                   965,225
Investments in associates                   47,317                    34,494
                                         ---------                 ---------
                                        10,492,750                11,120,321

Current Assets
Work in progress               24,267                   182,681
Debtors                       884,075                   495,141
Cash at bank and in hand      427,443                   109,758
                            ---------                 ---------

                            1,335,785                   787,580
                           
Creditors: Amounts falling (2,179,779)               (4,849,297)
due within one year
                            ---------                 ---------

Net Current Liabilities                   (843,994)               (4,061,717)
                                         ---------                 ---------

Total Assets less Current                9,648,756                 7,058,604
Liabilities

                                      
Creditors: Amounts falling              (1,550,000)                        -
due after more than one year
                                         ---------                 ---------

Net Assets                               8,098,756                 7,058,604
                                         =========                 =========

Capital and Reserves
Called up share capital -                  567,841                   567,841
equity interests
Share premium account                   17,449,610                17,449,610
Profit and loss account                 (9,918,695)               (10,958,847)
                                         ---------                 ---------
                                         8,098,756                 7,058,604
                                         =========                 =========



Consolidated Cash Flow Statement
For the year ended 28th February 2006

                                      2006       2006        2006        2006
                                         £          £           £           £

Net Cash Inflow / (Outflow) from              457,559                (352,062)
Operating Activities

Returns on Investments and
Servicing of Finance
Interest received                    7,481                 66,828
Interest paid                      (67,081)              (432,320)
Interest element of finance              -                      -
lease rental payments
Dividend received                   70,000                 70,000
                                  --------               --------
                                               10,400                (295,492)

Taxation
Corporation Tax                                     -                       -

Capital Expenditure and
Financial Investment
Sale of property                         -              2,849,740
Purchase of other tangible          (9,274)                (6,516)
assets
Sale of other tangible assets            -                    250
                                  --------               --------

Net cash (outflow)/inflow for                  (9,274)              2,843,474
capital expenditure and
financial investment

Acquisitions and disposals
Investment in joint venture       (631,000)               (95,000)
                                  --------               --------

Net cash (outflow)/inflow for                (631,000)                (95,000)
acquisitions and disposals

Financing
Capital element of finance lease         -                (15,805)
rental payments
Increase/(decrease) in debt due  (1,060,000)                    -
within one year
Increase/(decrease) in debt due  1,550,000                      -
in more than one year             --------               --------
                                            
Net cash inflow / (outflow) from              490,000                 (15,805)
financing
                                             --------                --------

Increase in Cash in the Year                  317,685               2,085,115
                                             ========                ========



Notes to the Financial Statements
For the year ended 28th February 2006


1. Principal Accounting Policies


The principal accounting policies, which are unchanged from the previous year,
are as follows:


Accounting basis and standards

The financial statements have been prepared under the historical cost convention
and in accordance with applicable accounting standards.


The company and group currently meet their day to day working capital
requirements partly through monies loaned from the Northacre PLC Directors
Retirement and Death Benefits Scheme, partly from the group's bankers and partly
from other loans. The directors expect the facilities currently agreed to remain
in place for the foreseeable future and to be renewed on equally favourable
terms in due course. In particular:


(i) One of the loans due to Northacre PLC Directors Retirement and Death Benefit
Scheme of £1 million is not due for repayment until 31st July 2008


(ii) Two further loans of £275,000 each, from the Northacre PLC Directors
Retirement and Death Benefit Scheme and from a third party are not repayable
until the return of equity and/or realisation of profit share from one specific
project, which is not expected to occur before August 2007.


(iii) The group's bankers have recently agreed revised facilities until August
2007


The directors have prepared detailed cash flow projections for the period ended
31st August 2007 making reasonable assumptions about the levels and timings of
income and expenditure, and in particular the timing of receipt of certain fees
due from major developments. These projections show that the group can operate
within the available facilities. On this basis the directors consider it
appropriate to prepare the financial statements on a going concern basis.

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:

Fixtures, fittings and office equipment         25% straight line
Computer equipment                              33 1/3% straight line
Motor vehicles                                  25% straight line

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 earned 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.

Deferred Taxation

In accordance with FRS19, deferred tax is recognised as a liability or asset if
transactions or events that give the group the 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 the 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 useful life of 10 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. Sales were made
in the following geographical markets:



                                                 2006           2005
                                                    £              £

United Kingdom                              7,875,054      2,811,640
                                           ===========    ===========

                                                 2006           2005
                                                    £              £
Principal activities:
Profit shares - property development        4,305,017              -
Development management                      1,646,455        450,600
Interior design                             1,214,134      1,898,034
Architectural design                          709,448        463,006
                                           -----------    -----------

                                            7,875,054      2,811,640
                                           ===========    ===========








                      This information is provided by RNS
            The company news service from the London Stock Exchange