Final Results

Northacre PLC
21 August 2007



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


Results for the year ending 28 February 2007


Northacre Plc today announces its' results for the year ended 28 February 2007.



  • Group turnover increased to £8.1m (2006: £7.9m) with pre-tax profit
    before goodwill amortisation improving by 12% to £2.6m (2006 : Profit
    £2.3m).


  • Completion of Park Street achieved in the financial year resulting in a
    performance bonus fee of c. £2.6m of which an on account payment of £2.4m
    has been received in April 2007.


  • Planning consent granted for The Lancasters in May 2007. Works are due
    to commence on site in September 2007.


  • Favourable decision for Vicarage Gate at the High Court hearing in April
    2007 enhancing prospects of an early solution to this long outstanding
    planning dispute.


  • Planning to be determined on The Kensington (Odeon) before the end of
    2007 with works due to commence on site in the Spring of 2008.


  • Group subsidiaries continue to generate improved levels of fee income as
    a result of an increase in the volume of activity.


  • Senior Management further strengthened with new appointments in
    Marketing, Design and Construction.

  • Anticipate further growth with improved performance in the short to
    medium term.



'Northacre has had another year of significant progress. Following the
successful marketing of our Mayfair scheme at 44-46 Park Street, the Group
secured the bulk of its bonus fee entitlement during the period. These monies
have impacted on the Group's balance sheet position.


Further positive progress has been achieved with all three of our current
developments. The Lancasters was granted planning consent in May 2007. A High
Court judgement determined that the previous planning refusal by The Royal
Borough of Kensington & Chelsea on Vicarage Gate should be quashed and on The
Kensington (Odeon) a prolonged campaign for a new cinema and residential scheme
is making good progress.


The position of the company at the end of the year under review demonstrates a
substantial recovery in comparison with the period 2003-2005. Furthermore the
results for the year confirm that our company is once again at the forefront of
the prime residential market. The principal risks or uncertainties in our
business continue to be planning and procurement based. In relation to the
market, there are at least no current signs of a downturn in the global appeal
for Central London prime residential property.'




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 2007




ENQUIRIES:

NORTHACRE PLC               020 7349 8000

John Hunter                 Chief Executive
Manish Santilale            Finance Director



KBC PEEL HUNT               020 7418 8900

Capel Irwin
Nicholas Marren




CHIEF EXECUTIVE REVIEW


OVERVIEW

Northacre has completed its recovery phase and is now re-establishing itself as
the leading brand with the most acclaimed track record in the business of prime
residential property development in Central London. To meet the increasing
demands of this niche sector, the Group has strengthened its team of development
managers, architects and interior designers. With three major schemes on the
production line, these landmark developments will without a doubt become some of
the finest addresses in Central London. Further growth and improved performance
is anticipated in the short to medium term.


FINANCIAL RESULTS

Turnover for the period was £8,087,325 (2006 £7,875,054) with gross profit of
£6,588,707 (2006 £5,749,558). Pre-tax profit was £2,597,861 (2006 £2,301,360)
before amortisation of goodwill with a basic earnings per share of 5.64 pence
(2006 4.58 pence). The Board do not recommend a dividend payment as the
company's funds are fully employed. In light of these results and the
anticipated future growth prospects, the Board of Directors are committed to
review the Company's long term finances with a view to implementing a dividend
policy.

Completion of the Mayfair scheme at 44-46 Park Street has had a positive impact
on these results with an anticipated final bonus fee entitlement of £2.6m of
which £2.4m has been received since the year end. This has enabled the Group to
further reduce its debt position. Improved fee income from the subsidiaries has
also contributed to the results providing further evidence of sustained growth.


BOARD CHANGES

The Board is delighted to welcome Malcolm Williams as Non-Executive Director
effective from 17th April 2007. Malcolm brings to the Board a wealth of
financial knowledge and experience after spending 38 years with Dresdner
Kleinwort Wassertein Limited (formerly Kleinwort Benson Limited).


OPERATING SUBSIDIARIES

The operating subsidiaries have seen an increase in fee income following the
strong performance of their improved development and private client business. In
particular the interior design company has seen excellent progress throughout
the year with the launch of two show apartments at Park Street and the widening
of its client base to include projects in Dubai and Saudi Arabia. The
architectural practice has also risen to the challenge with full design
production in progress on The Lancasters as well as additional private client
work.


OPERATIONAL REVIEW

The Phillimores

The remaining two apartments at The Phillimores have been sold and the final
amount, due under the overage entitlement, has now been received. Having
completed this scheme the Group can now focus on the current projects in hand.

Park Street

Our Agents described Northacre's Park Street as 'The development that sets new
standards for Mayfair', indeed following a successful marketing campaign, all
apartment sales were exchanged prior to practical completion of the works. From
commencement of this scheme, less than two years ago, the anticipated final
bonus fee of £2.6 million demonstrates a healthy return for the Group.

Vicarage Gate

Following a favourable outcome at the High Court hearing in April 2007, it is
the Group's intention to seek an early settlement of this difficult planning
struggle at Vicarage Gate. Although our planning application is due to return to
another Public Inquiry, we plan in the meantime to explore whether an early
mutually satisfactory solution can be reached with the Royal Borough of
Kensington and Chelsea (RBK&C).

The Kensington

Following extensive and detailed public consultation with local residents and
the Planning Department of RBK&C a revised application has been submitted on The
Kensington. This application is due to be determined by the Planning Committee
before the end of 2007. The Group is confident of a positive outcome and looks
forward to commencing the works on site in the spring of 2008.

The Lancasters

Planning consent for The Lancasters was secured in May 2007. The consented
scheme is designed to create 193,000 square feet of residential accommodation
comprising 92 apartments of which 11 units are to provide for affordable
housing. The joint venture plans to explore the prospects of identifying a donor
site with the capacity to provide a larger number of affordable units elsewhere
in the local vicinity. Works are programmed to commence on site in September
2007 with the first phase of completed apartments available for occupation in
2010.

Financial Review

Evaluating Performance

As noted in our previous year's annual report it is the Board's intention to
implement a more transparent method of recognising the significant value added
during the life of the development of our schemes. In previous years the amounts
due under the contracts have only been recognised when they have been finally
determined which is usually at the end of the project. However it is the Board's
view that when certain critical milestone events are achieved through the
duration of each project, significant value is, theoretically, added to the
value of our equity investment in that project. Accordingly, in the future, we
feel that this value should be noted in the results each year. We are in the
process of agreeing suitable terminology with our auditors.

Review of Results

Headlines

Net Assets per share increased to 41.3 pence (2006 : 35.7 pence). Net profit for
the year is £1.3m (2006 : £1.0m) with an earnings per share of 5.64 pence (2006
: 4.58 pence).

Profit and Loss Account

Operating profit before tax and amortisation of goodwill for the year is £2.6m
(2006 : £2.3m.

Although the Group's turnover has only increased slightly to £8.1m (2006 :
£7.9m) it can be noted, compared to the previous year, that a larger proportion
of the turnover is fees receivable to the Group rather than profit shares or
bonus fees. The Group fee income in the year increased to £5.5m (2006 : £3.5m)
reflecting the greater volume of work in progress in the year. In particular the
Group's subsidiaries have all seen very significant increases to their fee
income this year and are now at a level which we feel is commensurate with our
expectations. The interior design company saw an increase of fee income to £2.0m
(2006 : £1.2m) and the architectural design company saw an increase to £1.6m
(2006 : £0.7m).

Administration costs for the year increased to £5.2m (2006 : £4.8m) partly due
to additional staff and partly due to additional general expenses as a result of
the increase in business.

After including the above items the Group recorded a net profit before tax of
£1.3m (2006 : £1.0m).

Balance Sheet

The investment in joint ventures represents the cash equity invested in each of
our development schemes. The investment in the year increased to £2.4m (2006 :
£1.6m) representing the additional equity invested in The Lancasters scheme.

Debtors at the year end include the anticipated final performance bonus fee of
£2.6m (2006 : £nil) due on the completion of Park Street of which a payment of
£2.4m has been received in April 2007. This amount has been fully utilised in
reducing the Group's debt position and in funding the additional equity
investment in The Lancasters.

Financing

The Group's activities are financed through a mixture of equity, cash and bank
borrowings.

The Group aims to gear property acquisitions with appropriate structured bank
debt allowing the Group to maximise its return from the equity invested. The
Group has secured, together with its partners, a total of £296m of committed
facilities to finance the development of the three principal developments in
hand.

Since the year end, The Lancasters joint venture has completed a refinancing of
the senior debt loan facility. The new £215m facility for the joint venture has
allowed the Group's equity investment to date to be returned. This has been
placed with selected financial institutions to provide security, liquidity and
flexibility for investment in future opportunities.

The priority of the Group's finances continue to be invested in schemes that can
deliver strong and sustainable shareholder returns whilst ensuring there is a
sound capital and leverage discipline.


OUTLOOK

The completion of Park Street is itself another fine example of a Northacre
prime residential development. Since the year end, the receipt of our bonus fee
entitlement has enabled the Group to reduce its debt position. The performance
of our operating subsidiaries has also contributed to these good results.

Following receipt of our new planning consent for The Lancasters, it is clear
that a substantial uplift in value has been created for the joint venture. The
main works for procuring this high quality scheme will commence in September. By
building out this 'Revival' development we plan to exploit the full potential
for further enhanced value from our branded marketing campaign on this Hyde Park
project.

After a period of extensive consultation in the public arena, a new mixed-use
cinema and residential scheme for The Kensington (Odeon) site has emerged with
good prospect of success at planning for a decision later this year. We plan to
commence the works immediately thereafter and hence anticipate a start date
early 2008.

It is our fervent hope that an early solution can be reached to resolve the
Vicarage Gate planning struggle without the need to re-run a Public Inquiry.
This may well involve revisiting the original proposal for transferring the
existing use, for elderly persons accommodation, elsewhere in the local
community.

Despite rising interest rates there continues to be an almost insatiable global
appetite for high quality residential schemes in Central London. With the
developments in hand and under consideration, Northacre is once again in a
strong position to provide for this growing demand with a branded product of
exceptional design and quality.

Based on its skills for generating added value through the development process,
the Group continues to seek further opportunities to acquire an equity position,
together with a structured performance related entitlement to profits. In this
manner, we anticipate achieving further improvement in fee income and growth for
enhanced shareholder value.


Consolidated Profit and Loss Account
For the year ended 28th February 2007


                                                 Note                  2007                   2006
                                                                          £                      £
Group Turnover - continuing activities             2              8,087,325              7,875,054

Cost of sales                                                    (1,498,618)            (2,125,496)
                                                                  ---------              ---------

Gross Profit                                                      6,588,707              5,749,558

Administrative expenses                                          (5,243,275)            (4,799,714)
Other operating income                             3                 62,239                 67,085
                                                                  ---------              ---------
Group Operating Profit -
continuing activities                                             1,407,671              1,016,929

Share of profit of associate                    11(a)                23,359                 12,823
                                                                  ---------              ---------
Operating Profit including share of associates
and joint ventures                                                1,431,030              1,029,752
                                                                  ---------              ---------
Profit on Ordinary Activities before Interest
and Investment Income                                             1,431,030              1,029,752

Income from investments                                              60,000                 70,000
Interest receivable                                                   8,983                  7,481
Interest payable and similar charges               4               (163,360)               (67,081)
                                                                  ---------              ---------
Profit on Ordinary Activities before Taxation      5              1,336,653              1,040,152

Taxation                                           7                (55,906)                     -
                                                                  ---------              ---------

Retained Profit for the Year                      19              1,280,747              1,040,152
                                                                  =========              =========

Basic earnings per ordinary share                 18                   5.64p                  4.58p
                                                                    =======                =======

There are no recognised gains or losses other than as stated above.






Consolidated Balance Sheet
at 28th February 2007


                                        Note        2007          2007         2006          2006
                                                       £             £            £             £
Fixed Assets
Intangible fixed assets                   9                  7,567,252                  8,828,460
Tangible fixed assets                    10                     21,075                     20,748
Investments in associates              11(a)                    66,238                     47,317
Investments in joint ventures          11(b)                 2,412,830                  1,596,225
                                                              --------                   --------
                                                            10,067,395                 10,492,750
Current Assets
Work in progress                         12      113,682                     24,267
Debtors                                  13    3,924,886                    884,075
Cash at bank and in hand                          32,952                    427,443
                                                --------                   --------
                                               4,071,520                  1,335,785
Creditors: Amounts falling due
within one year                          14   (3,209,412)                (2,179,779)
                                                --------                   --------

Net Current Assets / (Liabilities)                             862,108                   (843,994)
                                                              --------                   --------
Total Assets less Current Liabilities                       10,929,503                  9,648,756

Creditors: Amounts falling due
after more than one year                 15                 (1,550,000)                (1,550,000)
                                                              --------                   --------
Net Assets                                                   9,379,503                  8,098,756
                                                              ========                   ========


Capital and Reserves
Called up share capital - equity
interests                                19                    567,841                    567,841
Share premium account                    19                 17,449,610                 17,449,610
Profit and loss account                  19                 (8,637,948)                (9,918,695)
                                                              --------                   --------
Shareholders' Funds                      19                  9,379,503                  8,098,756
                                                              ========                   ========




Consolidated Cash Flow Statement
For the year ended 28th February 2007

                                                   Note      2007         2007          2006        2006  
                                                                £            £             £           £

Net Cash (Outflow) / Inflow                          1                (564,799)                  457,559
from Operating Activities

Returns on Investments and Servicing
of Finance
Interest received                                           8,983                      7,481
Interest paid                                             (47,619)                   (67,081)
Dividends received                                         60,000                     70,000
                                                         --------                   --------
                                                                        21,364                    10,400

Taxation
Corporation tax                                                              -                         -

Capital Expenditure and Financial Investment
Purchase of other tangible assets                         (12,237)                    (9,274)
                                                         --------                   --------

Net cash (outflow)/inflow for capital expenditure
and financial investment                                               (12,237)                   (9,274)

Acquisitions and disposals
Investment in joint venture                              (816,605)                  (631,000)
                                                         --------                   --------

Net cash (outflow) for acquisitions
and disposals                                                         (816,605)                 (631,000)

Financing
Decrease in debt due within one year                            -                 (1,060,000)
Increase in debt due in more than one year                      -                  1,550,000
                                                         --------                   --------

Net cash inflow from financing                                               -                   490,000
                                                                      --------                  --------

(Decrease) / Increase in Cash in the Year            2              (1,372,277)                  317,685
                                                                      ========                  ========









                       Notes to the Financial Statements
                     For the year ended 28th February 2007



 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 United Kingdom Accounting 
     Standards (United Kingdom Generally Accepted Accounting Practice), which
     have been applied consistently.

     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 
     July 2008.

     The directors have prepared detailed cash flow projections for the period 
     ended 28th February 2009 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 its expected useful life as follows:

     Fixtures, fittings and office equipment          25% straight line
     Computer equipment                               33 1/3% 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. Fees in respect of project management and interior and 
     architectural design are recognised in accordance with the stage of 
     completion of the contract.

     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.



                                 Northacre PLC
                       Notes to the Financial Statements
               For the year ended 28th February 2007 (Continued)



 1   Principal Accounting Policies (Continued)

     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:

                                                          2007            2006
                                                             £               £

     United Kingdom                                  8,087,325       7,875,054
                                                      ========        ========

                                                          2007            2006
                                                             £               £
     Principal activities:
     Profit shares and bonus fees - 
      property development                           2,619,385       4,305,017
     Development management                          1,870,815       1,646,455
     Interior design                                 1,985,474       1,214,134
     Architectural design                            1,611,651         709,448
                                                      --------        --------
                                                     8,087,325       7,875,054
                                                      ========        ========










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