Interim Results - 6 Months to 31 August 1999
Northacre PLC
21 December 1999
NORTHACRE PLC
Northacre plc ('Northacre'), the premier developer of landmark
residential property schemes in Central London, today announces
interim results for the six months to 31 August 1999.
* Northacre's strategy is to acquire equity interests in prime
residential opportunities for development and investment where
value can be significantly enhanced through Northacre's skills
* First results announced since Northacre listed on AIM in May
1999:turnover of £1,055,482 with pre-tax loss of £769,316
* Northacre's brand and three core business areas - prime
residential development, architectural design and interior
design - are key to its growth strategy
* Development Management Agreement with European Land for 552
King's Road, the largest development in Kensington & Chelsea
Borough since the Chelsea Harbour development ten years ago,
effectively demonstrates strategy for growth
* Successful completion of The Bromptons, London SW3: all 73
apartments sold profit share income from The Bromptons
development not included in these results
* First phase of Earls Terrace completed; development completion
due Spring 2000 with profit share income due in 2000
* Further residential development opportunities under negotiation
John Hunter, Chief Executive of Northacre, commented:
'Northacre has been and will continue to be exposed to some of the
most complex, but at the same time rewarding property schemes in
Central London. Financially the 2nd half of our year will include
income from the Bromptons, Earls Terrace and 552 Kings Road. There
are many opportunities currently in the market. However, going
forward, Northacre will only involve itself in landmark projects
where there is equity leverage to create shareholder value.'
Enquiries:
Northacre PLC Tel (today): 0207 457 2020
John Hunter, Chief Executive Tel (thereafter): 0207 349 8000
College Hill Tel: 0207 457 2020
Kate Pope
Matthew Smallwood
NORTHACRE PLC
Chief Executive's Review
I am pleased to report Northacre's interim results for the six months
to 31 August 1999. These results are the first announced since
Northacre listed on AIM in May 1999 through the reverse takeover of
Property Asset Holdings plc.
Northacre is widely regarded as one of the premier developers of
landmark residential property schemes in Central London. It
comprises three principal businesses: residential development,
architectural services through Nilsson Design and interior design
through Lifestyles Interiors. Our focused strategy for growth is to
acquire equity interests in prime residential opportunities for
development and investment where value can be significantly enhanced
through Northacre's unique skills.
Financial Results
The turnover for the period was £1,055,482 with pre-tax loss at
£769,316. These results do not include income arising from The
Bromptons development, which has now been successfully completed
subsequent to 31 August 1999, or from income received from the sale
of the first phase of Earls Terrace. Loss per share was 7p.
The Board is not declaring an interim dividend payment for the six
months to 31 August 1999.
Operating Activities
The Bromptons, London SW3
I am delighted to announce the successful completion, subsequent to
31 August 1999, of The Bromptons development, started in 1995. All
73 apartments have been sold achieving sales in the order of £90
million, an average of £760 per square foot.
The Bromptons has received universal acclaim and is generally
considered as one of the finest new addresses in the world. Nilsson
Design secured planning consent for the restoration and conversion of
the existing listed main building, built in 1854, as well as the
construction of the two new purpose-built apartment blocks in a
similar Tudor Gothic style.
Northacre will receive up to 16% of the development profit and this
is expected to be included in the second half figures.
1-25 Earls Terrace, London W8
We continue our development of Earls Terrace which started in late
1994 and comprises 25 Grade II listed Georgian houses situated
between High Street Kensington and Edwardes Square, London W8. The re-
conversion of 125 flats in a dilapidated condition has been hugely
complex due to the detailed requirements of English Heritage for
preserving listed buildings.
However, Phase One of the development has now been completed and 3
six-bedroom, freehold family houses have now been sold, including the
show house designed by Lifestyles (Interiors). The houses are
contracted to achieve prices of between £3,150,000 and £3,800,000.
Under the development agreement, Northacre receives 18% of the
development profit.
Works to the remaining houses are expected to be complete by Spring
2000.
552 Kings Road, London SW10
As part of our focused growth strategy, we announced on 27 October
1999, that we had signed a development management agreement with 552
Kings Road Limited, a subsidiary of European Land. It will be the
largest development in the Borough of Kensington & Chelsea since the
Chelsea Harbour development ten years ago and will comprise 274
apartments and 14 houses located on the 7.5 acres site in a parkland
setting. The development includes underground car parking and its own
leisure complex with swimming pool. All three Group companies will
provide services. Work has already commenced on the site and the
first phase of the development is expected to be completed in 2002.
This is the first of four sites targeted for residential
redevelopment.
Under the terms of the contract, Northacre will be paid a
consideration amounting to £2.6 million over a period of forty
months plus, on the achievement of a pre-established level of
development profit, the sum of a further £1.0 million. More
importantly within the agreement there is a substantial performance
related profit share scheme based on added valued achieved.
Lifestyles (Interiors) Limited
Whilst we do not break down turnover and profits within the three
divisions, I am delighted to report that Lifestyles has achieved
excellent progress within the first half. Its role within the
Northacre Group has been rapidly expanding and is now building up a
significant private client base outside Northacre's projects. It has
established a reputation for sophisticated quality and design and
recent assignments have included two private Benetti yachts and most
notably the Coral Reef Club in Barbados.
The Board
We are currently undergoing a review of our Main Board with the aim
of recruiting a Finance Director and a further Non Executive Director
within the next three to six months.
Outlook
The first half of our financial year, whilst showing a pre-tax loss,
is, I believe, more significant for our expansion activities. Our
goal of building a substantial residential development company with a
unique offering continues. The three core businesses - residential
development, architectural design and interior design - are key to
our growth strategy.
It is anticipated that the successfully completed development of The
Bromptons will have a positive impact on our second half figures.
There is also significant long term potential to be achieved from the
Earls Terrace development, which is on track for completion. The
recent sale of 3 further properties will positively impact to a small
degree on the second half.
We are delighted with our development appointment for the 552 King's
Road project which represents an excellent opportunity to secure a
substantial performance related profit share whilst earning
sufficient fees to contribute substantially towards our fixed costs.
We continue to seek further residential opportunities within Central
London where we can exploit our market knowledge and skills ensuring
enhanced shareholder value. We will also look at other suitable
investment opportunities that may arise. I feel that Northacre has
an exciting future and I am looking forward to reporting strong
progress for the year ending 28 February 2000.
John Hunter
Chief Executive
NORTHACRE PLC
Interim Results for the six months to 31 August 1999
Consolidated Profit and Loss Account (Unaudited)
6 months to 31 August 1999 6 months
to
30
Note September
continuing
Operations Acquisition Total 1998
£'000 £'000 £'000 £'000
Turnover - 1,055 1,055 -
Cost of sales - (669) (669) -
Gross Profit - 386 386 -
Administrative 3 (351) (766) (1,117) (40)
Expenses
Other operating 58 10 68 58
income
Operating (293) (370) (663) 18
(Loss)/Profit
Loss on sale of
investment property (71) - (71) -
(Loss)/Profit on
Ordinary Activities (364) (370) (734) 18
before Interest
Interest (net) (35) 92
(Loss)/Profit on
Ordinary Activities (769) 110
before Taxation
Taxation 4 (2) (27)
Retained (Loss)
/Profit for the
Period (771) 83
Basic
(loss)/earnings per
ordinary share 5 (7p) 0.06p
Fully diluted
(loss)/ earnings per
ordinary share (6p) 0.05p
NORTHACRE PLC
Interim Results for the six months to 31 August 1999
Consolidated Balance Sheet (Unaudited)
31 August 30
September
1999 1998
£000 £000
Fixed Assets
Intangible assets 15,329 -
Tangible assets 675 3
Investment properties - 2,463
Investments 2 -
16,006 2,466
Current Assets
Stock and work in progress 7 -
Properties held for disposal - 923
Debtors 814 12
Bank balances and cash 1,059 1,522
1,880 2,457
Creditors - due within one year (2,765) (63)
Net Current (Liabilities) / Assets (885) 2,394
Total Assets less Current
liabilities 15,121 4,860
Creditors - due after more than one
year (1,075) (199)
Net Assets 14,046 4,661
Capital and Reserves
Share capital 399 136
Share premium accounts 14,168 4,376
Profit and loss account (521) 149
14,046 4,661
NORTHACRE PLC
Interim Results for the six months to 31 August 1999
Cash Flow Statement (unaudited)
6 months 6 Months
to 31 to 30 Sept
August 1999 1998
£'000 £'000
Net Cash Inflow from
operating activities 2,688 36
Returns on Investments and
Servicing of Finance
Interest received 6 92
Interest paid (41) -
Net Cash (Outflow) Inflow
from Returns on
Investments and Servicing of
Finance (35) 92
Taxation
Corporation tax paid (37) -
Capital Expenditure and
Financial Investment
Additions to investment
properties - (1,647)
Purchase of other tangible
assets - net (31) (1)
Sale of investment
investment properties 1,575 -
Sale of other tangible
assets 35 -
Net cash inflow/(outflow)
for capital expenditure 1,579 (1,648)
Acquisitions
Purchase of subsidiary
undertaking (3,492) -
Net overdraft acquired (411) -
Net cash outflow for
acquisitions (3,903) -
Cash Inflow/(Outflow) before
Management of Liquid
Resources and Financing 292 (1,520)
Financing
Issues of ordinary share
capital 35 -
Repayment of convertible
loan note - (511)
Increase in debt 536 -
Net cash inflow/(outflow)
from management of liquid
resources and financing 571 (511)
Increase/(Decrease) in Cash
in the period 863 (2,031)
NORTHACRE PLC
Notes to the Interim Financial Statements
For the period ended 31 August 1999
1. Accounting Policies
The interim financial statements have been prepared on the basis of
the accounting policies set out in the 1999 Northacre plc Annual
Report as modified by the requirements of FRS 10 Goodwill and
Intangible Assets.
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 30 September 1998 have been extracted from the company's
interim report for that financial period. The statutory accounts for
the period ended 28 February 1999 have been given an unqualified
audit report and have been filed with the Registrar of Companies.
The interim report for the period to 30 September 1998 was not
subject to review by the auditors.
3. Administrative Expenses
The administrative expenses of £1,117,307 include amortisation of
goodwill of £194,032.
4. Taxation
The taxation charge for the period is calculated on the costs of the
average tax rate achieved in the financial period.
5. Earnings Per Share
The earnings per share has been calculated on the result on ordinary
activities after tax and on the weighted average number of shares in
issue in the six months to 31 August 1999 of 11,024,845 (30 September
1998 136,390,020).
6. Shareholders' Funds
£'000
The reconciliation of movements in
shareholders' funds is as follows:
Shareholders' funds at 1 March 1999 4,782
Warrants exercised during the period 28
Issue of ordinary shares on acquisition
of Northacre Holdings Ltd 10,000
Issue of 'A' ordinary shares 7
14,817
Retained loss (771)
Shareholders' funds at 31 August 1999 14,046
7. Acquisition
The acquisition of Northacre Holdings Limited £'000
has been accounted for as follows:
Tangible fixed assets 709
Investments 2
Stock 6
Debtors 580
Creditors (1,917)
Total liabilities acquired (620)
Bank overdrafts taken over (411)
Goodwill and costs capitalised 15,523
Total cost of acquisition 14,492
8. Dividends
The Directors do not recommend the payment of an interim dividend.
9. Other Information
The interim statement was approved by the Directors on 21 December
1999.
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 set out on pages 6 to 10 and 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.
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 31 August 1999.
Kingston Smith
Chartered Accountants
And Registered Auditors
Devonshire House
60 Goswell Road
London EC1M 7AD
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