TIDMNTA
RNS Number : 6968Q
Northacre PLC
09 November 2012
NORTHACRE PLC (the "Company" or "Group")
Interim Report for the six months ended 31st August 2012
9th November 2012
Northacre PLC today announces its interim results for the six
months ended 31 August 2012.
Northacre has produced some of the most successful residential
developments in central London and has been at the forefront of the
prime market for over 20 years.
The Company has created some of the most recognisable prime
addresses including The Phillimores, The Bromptons, and The
Lancasters and 44-46 Park Street, and a striking modern prime
development is now being added to our portfolio at Vicarage Gate,
Kensington, with completion due by early 2015. This spectacular
development of lateral apartments and duplexes will demonstrate our
capability in the new-build realm and is set to become another
iconic London address.
Chairman's Statement
We were delighted to receive an interim dividend of GBP3.0m in
May 2012 from our Lancasters joint venture. This was the second
receipt and has contributed to us recording virtually a break-even
position for the first half of the year. Added to this is the
dividend received and announced in September 2012, of GBP13.6m,
which has meant that total profit share from the Lancasters now
stands at GBP17.7m. As at the date of today's announcement, only
five units remain unsold, and we are confident of this development
being 100% sold by early in the New Year. Considering there were 77
high-value units in the development, this is a tremendous
achievement by the whole project team, and we are grateful in
particular to our partners, Minerva, and the sales teams at
Hamptons and Savills.
The development at Vicarage Gate, where Northacre is retained to
manage construction and sales, is progressing well. Construction of
the basement is underway with full completion of the development
works expected by early 2015. The large modern lateral apartments
at Vicarage Gate will benefit from 24-hour concierge, secure
parking, and outdoor space, with an outlook towards Kensington
Palace Gardens, and will undoubtedly be at the top end of the prime
market in terms of quality and pricing. Marketing of the units has
not yet commenced although drawings are being finalised in order to
enable off-plan sales.
Our interiors business, Intarya, has delivered several new show
apartments at the Lancasters and worked on private apartments at
the development, and continues to make good progress. We are
encouraged by the momentum of the business in what is a competitive
market sector.
Outlook
The prime central London market continues to be a competitive
and dynamic environment. Given Northacre's and Intarya's strong
capability and brand, and with the cashflow coming from the
Lancasters strengthening our finances, we are well-placed for the
future.
Klas Nilsson
Chairman
Chief Executive's & Financial Review
For the first time in many years, we are benefiting from profit
shares substantially in excess of our overheads. This is reflected
only to a modest extent in the period under review (due to the
timing of receipts) and will be more apparent at the year-end.
After the period under review, we received further dividends from
the Lancasters and consequently now have a good net cash position,
which will improve further as more dividends are received.
Consolidated Interim Statement of Comprehensive Income
(Unaudited)
The Group's revenue for the six month period decreased to
GBP1.538m (2011: GBP1.884m) reflecting reduced activity and fee
income from The Lancasters Development. The loss before taxation
was reduced to GBP0.006m (2011: GBP3.194m). This performance has
been helped by the start of a stream of profit share from The
Lancasters Development and reflects a second interim dividend
received of GBP3m (2011: GBPnil). A further dividend of GBP13.559m
was received after the reporting period taking the total dividend
received to date to GBP17.750m. Net assets per share is higher as
at 31st August 2012, at 155.55 pence (2011: 119.87 pence). The Net
Asset Value (NAV) reflects a number of factors, including the
reserves and the Board's opinion of the value attributable to the
Group's share of profits accruing from The Lancasters Development,
in so far as this can be valued considering that the project has
not been fully sold. However, it does not take account of the
effect of future working capital dilution, the costs of delivering
Vicarage Gate project or any adjustment to goodwill, which may in
future have a negative impact on the NAV. Following revaluation the
fair value of The Lancasters Development amounted to GBP45.244m
(2011: GBP31.608m). This valuation is represented by the GBP49.394m
fair value, less the GBP4.15m dividend received by the end of the
reporting period. Although the loss attributable to equity holders
is GBP0.006m (2011: GBP3.194m), the consolidated comprehensive
income for the period is GBP4.427m (2011: GBP7.209m). This reflects
the net position for the period after recognising the estimate of
value in The Lancasters Development profit share entitlement.
Administrative expenses decreased by over 30% to GBP2.262m
(2011: GBP3.295m) as a result of measures undertaken to reduce
overheads. The full impact of cost reduction measures will be
realised in the full year. The Group reported an increase in
finance costs to GBP1.417m (2011: GBP0.619m) due to increased debt
levels during the reporting period in comparison to the same period
last year. Again, with much of the debt repaid in the 2nd half and
only a small balance remaining, finance costs ought to be
eliminated next year.
In accordance with International Accounting Standards we have
made a fair valuation of our investment in The Lancasters
Development with reference to secured and forecast sales as at 31st
August 2012. The change in fair value reported for the period was
an increase of GBP7.433m (2011: GBP10.353m) from the year-end
figure.
Consolidated Interim Statement of Financial Position
(Unaudited)
The Group has an improved cash position and as at 31st August
had cash and cash equivalents of GBP5.236m (2011: overdraft:
GBP0.176m). The Group had debt of GBP14.305m (2011: GBP0.278m) as
it had drawdown GBP13.0m on the GBP15.0m loan facility during the
period, although GBP11.75m plus interest of GBP0.793m of the new
loan facility was repaid post period end leaving only GBP1.25m plus
accrued interest currently outstanding as at November 2012, and we
now have a healthy net cash position.
In accordance with International Accounting Standards, the
investments in development projects (classified as available for
sale financial assets in the Consolidated Interim Statement of
Financial Position (Unaudited)) represent, where appropriate, the
equity value in each of our secured development schemes and any
fair value adjustments. As mentioned above, we have calculated the
fair value of our investment at The Lancasters Development and,
including this fair value adjustment, the available for sale
financial assets amounted to GBP45.244m (2011: GBP31.608m) which
principally reflects our opinion of the entitlement to profits from
The Lancasters joint venture project.
Capital and reserves
As we noted at the year-end, the Board considers the payment of
a dividend to Shareholders a priority, just as soon as sufficient
profits are received from The Lancasters Development. In
anticipation of this, we are constrained in making any declaration
of a dividend until such time as our reserves are sufficient. Given
the extent of historic accrued losses, we may need to re-structure
our reserves in order to enable a dividend to be declared. In this
event, the Board will write to Shareholders in relation to this
matter at a future date.
Outlook
The wider economic environment remains unpredictable, with
austerity measures by governments across Europe contributing to a
bleak economic backdrop across the continent. The London prime
residential market continues to display a certain detachment from
this although it is not possible to know for how long this can
continue.
The market continues to be extremely competitive and affected by
the reduced appetite of banks for development financing. However,
we continue to evaluate suitable development opportunities and
remain cautiously optimistic for the future, while our strengthened
financial position means we are better placed than in recent
years.
Ken MacRae
Chief Executive Officer & Finance Director
Copy of the announcement will be available on our website:
www.northacre.com.
Enquiries:
Northacre PLC
Klas Nilsson (Chairman)
Ken MacRae (Chief Executive Officer & Finance Director)
020 7349 8000
Hudson Sandler Limited
Michael Sandler
020 7796 4133
Peel Hunt LLP (Nominated Adviser and Broker)
Capel Irwin
Harry Florry
020 7418 8900
Northacre PLC
Consolidated Interim Statement of Comprehensive Income
(Unaudited)
6 Months 6 Months Year
ended ended ended
Note 31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
Restated
GBP'000 GBP'000 GBP'000
Continuing Operations
Group Revenue 2 1,538 1,884 3,021
Cost of sales (877) (1,189) (2,069)
-------------- ---------- ----------
Gross Profit 661 695 952
Administrative expenses (2,262) (3,295) (7,432)
-------------- ---------- ----------
Group Loss from Operations (1,601) (2,600) (6,480)
Investment revenue 3,012 25 1,177
Other gains 3 - - 313
Finance costs (1,417) (619) (2,054)
Impairment of goodwill - - (821)
Loss before Taxation (6) (3,194) (7,865)
Taxation - - 577
-------------- ---------- ----------
Loss for the period attributable
to equity holders of the
Company (6) (3,194) (7,288)
============== ========== ==========
Other comprehensive income:
Changes in fair value of
available for sale financial
assets 6 4,433 10,403 19,605
-------------- ---------- ----------
Total comprehensive income for
the period 4,427 7,209 12,317
============== ========== ==========
Loss per ordinary share 4
Basic (0.02)p (11.95)p (22.27)p
Diluted (0.02)p (11.95)p (22.27)p
Northacre PLC
Consolidated Interim Statement of Financial Position
(Unaudited)
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Non-Current Assets
Goodwill 8,007 8,828 8,007
Property, plant and equipment 992 1,169 1,063
Non-current asset held
for sale 5 - 42 -
Available for sale financial
assets 6 45,244 31,608 40,811
---------- ---------- ----------
54,243 41,647 49,881
---------- ---------- ----------
Current Assets
Inventories 32 124 118
Trade and other
receivables 566 961 998
Cash and cash equivalents 5,236 - 917
---------- ---------- ----------
5,834 1,085 2,033
---------- ---------- ----------
Total Assets 60,077 42,732 51,914
========== ========== ==========
Current Liabilities
Trade and other
payables 7 4,203 9,670 3,559
Borrowings, including
lease finance 8 14,305 278 10,513
---------- ---------- ----------
18,508 9,948 14,072
---------- ---------- ----------
Non-Current Liabilities
Borrowings, including
lease finance - 750 700
---------- ---------- ----------
- 750 700
---------- ---------- ----------
Total Liabilities 18,508 10,698 14,772
========== ========== ==========
Equity
Share capital 668 668 668
Share premium account 18,552 18,552 18,552
Retained earnings 22,349 12,814 17,922
---------- ---------- ----------
Total Equity 41,569 32,034 37,142
---------- ---------- ----------
Total Equity and
Liabilities 60,077 42,732 51,914
========== ========== ==========
Northacre PLC
Consolidated Interim Statement of Cash Flows (Unaudited)
6 Months 6 Months Year
ended ended ended
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss for the period before tax (6) (3,194) (7,866)
Adjustments for:
Investment revenue (3,012) (25) (1,177)
Finance costs 1,417 619 2,054
Loss on disposal of investment - - (128)
Depreciation and amortisation 79 118 224
Goodwill impairment - - 821
Decrease in working capital 1,161 465 (1,391)
------------ ---------- ----------
Cash used in operations (361) (2,017) (7,463)
Interest paid (1,417) (619) (2,054)
Corporation tax - consortium relief
refunded - - 577
------------ ---------- ----------
Net cash used in operating activities (1,778) (2,636) (8,940)
------------ ---------- ----------
Cash flows from investing activities
Proceeds from sale of investment
in associate - - 170
Purchase of property, plant and
equipment (7) (35) (35)
Interest received 14 5 7
Dividends received 2,998 20 1,170
------------ ---------- ----------
Net cash generated (used in) from
investing activities 3,005 (10) 1,312
------------ ---------- ----------
Cash flows from financing activities
Proceeds from borrowings 13,605 2,800 10,491
Repayment of borrowings (10,490) (32) (1,568)
Repayment of finance leases (23) (79) (159)
------------ ---------- ----------
Net cash inflow from financing
activities 3,092 2,689 8,764
------------ ---------- ----------
Increase in cash and cash equivalents 4,319 43 1,136
Cash and cash equivalents at beginning
of period 917 (219) (219)
------------ ---------- ----------
Cash and cash equivalents at end
of the period 5,236 (176) 917
============ ========== ==========
Cash and cash equivalents at 31st August 2012 represent bank deposits
held by the Group.
Cash and cash equivalents at 31st August 2011 represent bank deposits
and bank overdrafts repayable on demand and are as included within
'Borrowings, including lease finance' in the Consolidated Interim
Statement of Financial Position (Unaudited).
Northacre PLC
Consolidated Interim Statement of Changes in Equity
(Unaudited)
Called
Up Share Retained Total
Share Premium Earnings
Capital Account
GBP'000 GBP'000 GBP'000 GBP'000
As at 1st March 2011 668 18,552 5,605 24,825
Total Comprehensive Income
for the period - - 7,209 7,209
-------- -------- --------- --------
As at 31st August 2011 668 18,552 12,814 32,034
Total Comprehensive Income
for the period - - 5,108 5,108
-------- -------- --------- --------
As at 29th February 2012 668 18,552 17,922 37,142
Total Comprehensive Loss for
the period - - (3,003) (3,003)
-------- -------- --------- --------
As at 31st August 2012 668 18,552 14,919 34,139
Northacre PLC
Notes to the Unaudited Interim Financial Statements
For the Six Months ended 31st August 2012
1. Basis of Preparation and Accounting Policies
Basis of preparation
The interim financial information for the six months ended 31st
August 2012 and 31st August 2011 is unaudited. The interim
financial information was approved by the Board of Directors on 9th
November 2012.
The statutory financial statements for the year ended 29th
February 2012, prepared under International Financial Reporting
Standards (IFRS), have been reported on by the Group auditors and
delivered to the Registrar of Companies. The audit report was
unqualified and did not contain a statement under s498 of the
Companies Act 2006.
These accounts have been prepared in accordance with
International Accounting (IAS) 34 'Interim Financial
Reporting'.
The interim financial information does not constitute statutory
financial statements within the meaning of the Companies Act
2006.
Accounting Policies
The accounting policies adopted are consistent with those
applied as at 29th February 2012 and those that the Directors
expect to be adopted as at 28th February 2013. They are set out in
full in the financial statements for the year ended 29th February
2012.
Going Concern
The Company and Group currently meet their day-to-day working
capital requirements through monies loaned from a third party loan
as detailed below:
(i) The loan due to Northacre PLC Directors Retirement and Death
Benefit Scheme of GBP699,602 (2011: GBP750,000) is not repayable
until 31st July 2013. Due to a pension fund split which was signed
on 11th January 2012, the Group repaid GBP50,398 of the loan. The
balance is due to be repaid on 31st July 2013.
(ii) A Eurobond loan facility of GBP10,500,000 was agreed with
Abu Dhabi Capital Management LLC ("ADCM") on 20th October 2011 and
drawn down in full on 31st October 2011. This loan allowed the
Group to repay its bankers facility and all Directors and related
party loans. A fixed premium of GBP800,000 was due on signature of
the agreement. According to the agreement, the Group had a right to
early redemption and after receiving the first dividend payment
from The Lancasters Development, the Group repaid GBP1,051,448 of
the loan on 18th January 2012 plus GBP76,050 accrued interest. When
the Group secured new financing, the Eurobond was repaid in full on
30th May 2012. The total amount repaid was GBP11,276,653 including
interest of GBP1,828,101.
(iii) A new loan facility of GBP15,000,000 was agreed with
Auster Real Estate Opportunities S.a.r.l. on 1st May 2012 and
GBP13,000,000 was drawn down on 30th May 2012. This loan allowed
the Group to repay the ADCM loan and secure more flexible loan
terms for the Group. A fixed premium of 2% of the facility amount
was due on draw down of the loan. The loan is due to be repaid in
18 months from the date of the draw down unless sufficient
dividends are received from The Lancasters Development. If
dividends received from The Lancasters Development are greater than
the remaining liabilities, the loan will have to be repaid within 5
business days from the date of the dividend distribution. According
to the agreement, the Group had a right to early redemption and
after receiving the third dividend from The Lancasters Development
of GBP13,559,500, the Group repaid part of the loan on 27th
September 2012. The total amount repaid was GBP12,543,339 including
interest of GBP793,339. The remaining balance amounts to
GBP1,250,000 and is due to be repaid in 18 months from the date of
the draw down unless sufficient dividends are received from The
Lancasters Development.
The Directors have prepared detailed cash flow projections for
the period ended 28th February 2015 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 current available facilities. On this basis the
Directors consider it appropriate to prepare the financial
statements on a going concern basis.
Significant judgements and estimates of areas of uncertainty
In preparing these financial statements the Directors are
required to make judgements and best estimates of the outcome of
and in particular, the timing of revenues, expenses, assets and
liabilities based on assumptions. These assumptions are based on
historical experience and various other factors that are considered
reasonable under the various circumstances. The estimates and
assumptions are reviewed on a regular basis with any revisions
being applied in the relevant period. The material areas where
estimates and assumptions are made are:
- The valuation of goodwill
- The valuation of available for sale financial assets
- The status and progress of the developments and projects
Basis of Consolidation
The Group financial statements include the financial statements
of the Company and its subsidiary undertakings. The Group's
proportion of the voting rights of Lancaster Gate (Hyde Park)
Limited increased from to 5% to 25.1% on 30th June 2010. Lancaster
Gate (Hyde Park) Limited continues to be treated as an available
for sale financial asset. The Directors do not regard Lancaster
Gate (Hyde Park) Limited as an associate because the Directors
consider that the Group does not exercise significant influence
over its operating and financial activities, despite the fact that
the Group holds in excess of 20% of the voting rights in Lancaster
Gate (Hyde Park) Limited, because the control of the Board by
Minerva PLC, the controlling shareholding they hold and their power
to exercise, and actual exercise of, the commercial decision making
for Lancaster Gate (Hyde Park) Limited preclude the Group from
exercising such influence.
Revenue
Revenue 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.
Investments
Fixed asset investments are stated at cost less amounts written
off.
Associates
Associates are all entities over which the Group exercise
significant influence but does not exercise control. Investments in
associates are accounted for using the equity method of accounting
and are initially recognised at cost, which includes goodwill
identified on acquisition, net of any accumulated impairment loss.
The Group's share of its associate's profits or losses after
acquisition of its interest is recognised in profit or loss and
cumulative post-acquisition movements are adjusted against the
carrying amount of the investment. Where the Group's share of
losses of an associate equals or exceeds the carrying amount of the
investment, the Group only recognises further losses where it has
incurred obligations or made payments on behalf of the
associate.
Financial Assets
Available for sale financial assets consist of equity
investments in other companies where the Group does not exercise
either control or significant influence. The investments reflect
loans and capital contributions made in respect of projects
undertaken with other partners in which the Group will be entitled
to an eventual profit share.
Available for sale financial assets are shown at fair value at
each reporting date with changes in fair value being shown in Other
Comprehensive Income, or at cost less any necessary provision for
impairment where a reliable estimate of fair value is not able to
be determined.
Impairment of Assets
Assets that have an indefinite useful life are not subject to
amortisation but are instead tested annually for impairment and are
subject to additional impairment testing if events or changes in
circumstances indicate that the carrying amount of an asset may not
be recoverable.
Assets that are subject to depreciation and amortisation are
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable.
Indicators of impairment are reviewed annually.
An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less
costs to sell and value in use. Any impairment charge is recognised
in profit or loss in the year in which it occurs. When an
impairment loss, other than an impairment loss on goodwill,
subsequently reverses due to a change in the original estimate, the
carrying amount of the asset is increased to the revised estimate
of its recoverable amount, up to the carrying amount that would
have resulted, net of depreciation, had no impairment loss been
recognised for the asset in prior years.
Business Combinations and Goodwill
Goodwill relating to acquisitions prior to 1st March 2006 is
carried at the net book value on that date and is no longer
amortised but is subject to annual impairment review. On
acquisition, the assets, liabilities and contingent liabilities of
a subsidiary are measured at their fair values at the date of
acquisition. Any excess of the cost of acquisition over the fair
values of the identifiable net assets acquired is recognised as
goodwill. Any deficiency of the cost of acquisition below the fair
values of the identifiable net assets acquired (i.e. discount on
acquisition) is credited to profit or loss in the period of
acquisition. Goodwill is tested annually for impairment.
Capital and Financial Risk Management
The Group manages its capital to ensure that the Group will be
able to continue as a going concern, while maximising the return to
shareholders through the optimisation of its debt and equity
balances.
The capital structure of the Group consists of debt, which
includes the borrowings disclosed in notes 19 and 20, cash and cash
equivalents and equity attributable to equity holders of the Parent
Company, comprising issued capital, share premium account and
retained earnings.
The Group manages the capital structure and makes adjustments to
it in the light of changes in economic conditions. In order to
maintain or adjust the capital structure, the Group may adjust the
amount of dividends payable to shareholders, return capital to
shareholders, issue new shares or sell assets to reduce debt or
increase capital.
The Board regularly reviews the capital structure, with an
objective to reduce net debt over time whilst investing in the
business.
The Group's activities expose it to a variety of financial risks
and those activities involve the analysis, evaluation, acceptance
and management of some degree of risk or combination of risks.
Taking risk is core to the property business and the operational
risks are an inevitable consequence of being in business. The
Group's aim is to achieve an appropriate balance between risk and
return and minimise potential adverse effects on the Group's
performance.
The Group's risk management policies are designed to identify
and analyse these risks, to set appropriate risk limits and
controls, and to monitor the risks by means of a reliable
up-to-date information system. The Group regularly reviews its risk
management policies and systems to reflect changes in markets,
products and emerging best practice.
Risk management is carried out by the Board of Directors. In
addition, the internal financial control board is responsible for
the identification of the major business risks faced by the Group
and for determining the appropriate course of action to manage
those risks. The most important types of risk are credit risk,
liquidity and market risk. Market risk includes currency, interest
rate and other price risks.
2. Segmental Information
Segmental information is presented in respect of the Group's
business segments. The business segments are based on the Group's
corporate and internal reporting structure. Segment results and
assets include items directly attributable to a segment as well as
those that can be allocated to a segment on a reasonable basis. The
segmental analysis of the Group's business as reported internally
to management is as follows:
6 Months 6 Months
Revenue ended ended Year ended
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Restated
Development management 150 261 693
Interior design 1,340 1,501 2,192
Architectural design 48 122 136
---------- ---------- -----------
1,538 1,884 3,021
========== ========== ===========
6 Months 6 Months
Loss before taxation ended ended Year ended
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Restated
Development management 163 (2,315) (6,176)
Interior design 25 (373) (818)
Architectural design (194) (506) (871)
---------- ---------- -----------
(6) (3,194) (7,865)
========== ========== ===========
Assets
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Development management 58,804 38,549 50,795
Interior design 1,241 2,418 1,076
Architectural design 32 1,723 43
---------- ---------- ----------
60,077 42,690 51,914
Non-current asset held
for sale - 42 -
---------- ---------- ----------
60,077 42,732 51,914
========== ========== ==========
Liabilities
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Development management 16,139 6,210 12,726
Interior design 1,425 2,268 1,285
Architectural design 944 2,220 761
---------- ---------- ----------
18,508 10,698 14,772
========== ========== ==========
3. Other Gains
6 Months 6 Months
ended ended Year ended
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Profit on disposal of interest in Campden
Estates Limited - - 128
Decrease in provision for acquisition
of Templeco 643 Limited in lieu of settlement - - 135
Decrease in provision for Northacre
PLC Directors Retirement and Death Benefit
Scheme profit share - - 50
- - 313
=========== ============================================================ ===========
4. Loss Per Share
6 Months 6 Months Year
ended ended ended
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
Weighted average number of shares
in issue 26,723,643 26,723,643 26,723,643
Loss for the period attributable
to equity holders of the Company
(GBP'000) (6) (3,194) (7,288)
=========== =========== ===========
Basic Loss Per Share
(pence) (0.02) (11.95) (27.27)
=========== =========== ===========
Diluted Loss Per
Share (pence) (0.02) (11.95) (27.27)
=========== =========== ===========
There were no potentially dilutive instruments in issue during
the current or preceding periods. All amounts shown relate to
continuing and total operations.
5. Non-Current Asset Held for Sale
The investment in Campden Estates Limited was presented as held
for sale following a Board decision on 1st July 2011 to sell the
interest in the associated undertaking. The completion date for the
transaction was 27th September 2011.
6. Available for Sale Financial Assets
Unaudited
GBP'000
At 1st March 2011 21,205
Increase in fair value transferred
to equity 10,403
---------------
At 31st August 2011 31,608
Increase in fair value
transferred to equity 10,353
Dividend received (1,150)
---------------
At 29th February 2012 40,811
Increase in fair value
transferred to equity 7,433
Dividend received (3,000)
---------------
At 31st August 2012 45,244
===============
A fair valuation exercise has been undertaken based
predominantly on the Group's expected profit from secured sales on
The Lancasters Development as at 31st August 2012. As at 31st
August 2012 the Group had received GBP4,147,559 of the expected
profits from The Lancasters Development. A further dividend of
GBP13,559,500 was received on 21st September 2012.
7. Trade and Other Payables
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade payables 274 758 304
Social security
and other taxes 173 260 196
Other payables 21 50 368
Accruals and deferred
income 2,535 1,266 1,491
Directors loans - 4,986 -
Loan settlement costs and profit share
payable 1,200 2,350 1,200
---------- ----------
4,203 9,670 3,559
========== ========== ==========
On 22nd June 2010, the Company entered into an agreement to
acquire the entire issued share capital of Templeco 643 Limited for
a consideration of GBP1,250,000. The Company acquired Templeco 643
Limited as settlement in lieu of the loan arrangement agreement to
share in the profits of The Abingdons Partnership. Of the
consideration, two payments of GBP75,000 each were made on 22nd
June 2010 and 16th August 2010. The balance of GBP1,100,000 was due
from the proceeds of the dividends from The Lancasters Development.
The balance payable was renegotiated to GBP965,000 payable in
instalments. The Group repaid GBP625,000 on 31st January 2012,
GBP175,000 on 30th March 2012, GBP150,000 on 31st May 2012 and the
balance of GBP15,000 on 30th June 2012.
A provision of GBP1,200,000 (2011: GBP1,250,000) included within
loan settlement costs and profit share payable, represents the
profit share payable to the Northacre PLC Directors Retirement and
Death Benefit Scheme in relation to sale of Group's interest in The
Abingdons Partnership. The amount represents the maximum possible
profit share and will be paid from dividends received from The
Lancasters Development.
8. Borrowings, including lease finance
31.8.2012 31.8.2011 29.2.2012
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Bank Overdraft - 176 -
Finance Lease - 102 23
Other Loans 13,605 - 10,490
Loan from pension scheme 700 - -
---------- ----------
14,305 278 10,513
========== ========== ==========
The bank overdraft facility of GBP500,000 was repaid on 31st
October 2011 and cancelled on 1st November 2011.
As at 31st August 2012 the Group had no obligations under
finance leases that were secured on related assets.
Other loans represent the Auster Real Estate Opportunities
S.a.r.l. loan facility and Eurobond loan facility as detailed in
note 1 paragraph (ii) and (iii). The loan facility is secured by
way of a first fixed charge over the 100 ordinary shares of GBP1
each of Northacre Capital (5) Limited, a fully owned subsidiary of
Northacre PLC.
The loan from the pension scheme of GBP699,602 (2011:
GBP750,000) in non-current liabilities is in respect of the
Northacre PLC Directors Retirement and Death Benefit Scheme. The
loan is due to be repaid on 31st July as detailed in note 1
paragraph (i).
9. Related Party Transactions
Nature
of 31.8.2012 31.8.2011 29.2.2012 Nature of
Relationship Unaudited Unaudited Audited Transactions
GBP'000 GBP'000 GBP'000
----------------------- ------------- ---------- ---------- ---------- --------------------------
Management fees
Northacre PLC receivable from
Directors Retirement the Scheme representing
and Death Benefit a balance at the
Scheme 1 - 3 - end of the period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Loan repayable
to the Scheme by
Northacre PLC.
Balance at the
Northacre PLC end of the period.
Directors Retirement GBP50,000 was repaid
and Death Benefit on 22nd December
Scheme 1 (700) (750) (700) 2011
----------------------- ------------- ---------- ---------- ---------- --------------------------
Interest payable
to the Scheme on
the loan to Northacre
Northacre PLC PLC representing
Directors Retirement a balance outstanding
and Death Benefit at the end of the
Scheme 1 - (116) - period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Interest payable
to the Scheme on
Northacre PLC the loan to Northacre
Directors Retirement PLC representing
and Death Benefit interest accrued
Scheme 1 (16) (17) (38) during the period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Disbursements paid
by Northacre PLC
Northacre PLC on behalf of the
Directors Retirement Scheme representing
and Death Benefit a balance at the
Scheme 1 - 108 - end of the period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Profit share payable
to the Scheme in
Northacre PLC relation to the
Directors Retirement sale of Group's
and Death Benefit interests in The
Scheme 1 (1,200) (1,250) (1,200) Abingdons Partnership
----------------------- ------------- ---------- ---------- ---------- --------------------------
Amount owed to
K.B. Nilsson from
K.B. Nilsson 2 - (109) - Northacre PLC
----------------------- ------------- ---------- ---------- ---------- --------------------------
Interest payable
to K.B. Nilsson
on the loan to
K.B. Nilsson 2 - (104) - Northacre PLC
----------------------- ------------- ---------- ---------- ---------- --------------------------
K.B. Nilsson 2 - - - K.B. Nilsson personal
guarantee of GBP570,000
to the Group's
bankers as a security
in respect of all
liabilities of
the Group to the
bank. The guarantee
was released on
7th November 2011
----------------------- ------------- ---------- ---------- ---------- --------------------------
Non-executive Directors
Fees representing
a balance at the
E.B. Harris 3 (45) (15) (30) end of the period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Non-executive Directors
Fees representing
amounts accrued
E.B. Harris 3 (15) (15) (30) during the period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Non-executive Directors
Fees representing
amounts paid during
M. Williams 4 (15) (15) (30) the period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Loan repayable
to MTAF Group (M.A.
AlRafi) by Northacre
M.A. AlRafi 5 - (300) - PLC
----------------------- ------------- ---------- ---------- ---------- --------------------------
Interest payable
to MTAF Group (M.
A. AlRafi) on GBP300,000
loan to Northacre
M.A. AlRafi 5 - (58) - PLC
----------------------- ------------- ---------- ---------- ---------- --------------------------
Loan and premium
repayable to MTAF
Group (M.A. AlRafi)
M.A. AlRafi 5 - (350) - by Northacre PLC
----------------------- ------------- ---------- ---------- ---------- --------------------------
Interest payable
to M. A. AlRafi
on GBP350,000 loan
M.A. AlRafi 5 - (20) - to Northacre PLC
----------------------- ------------- ---------- ---------- ---------- --------------------------
Executive Directors
fees representing
balance at the
M.A. AlRafi 5 - (3) - end of the period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Executive Directors
fees representing
amounts paid and
accrued during
M.A. AlRafi 5 (60) (15) (60) the period
----------------------- ------------- ---------- ---------- ---------- --------------------------
Loan repayable
to A. AlRafi by
A. AlRafi 6 - (3,600) - Northacre PLC
----------------------- ------------- ---------- ---------- ---------- --------------------------
Interest payable
to A. AlRafi on
the GBP3.6m loan
A. AlRafi 6 - (449) - to Northacre PLC
----------------------- ------------- ---------- ---------- ---------- --------------------------
Nature of Relationship
1. K.B. Nilsson is a trustee and beneficiary of the Northacre
PLC Directors Retirement and Death Benefit Scheme.
2. K.B. Nilsson is a Director of the Company.
3. E.B. Harris is a Director of the Company, and a member of
E.C. Harris LLP.
4. M. Williams is a Director of the Company.
5. M.A. AlRafi is a Director of the Company.
6. A. AlRafi is the father of M.A.AlRafi.
10. Contingent Liabilities
A third party brought a claim against a subsidiary Company,
Waterloo Investments Limited, regarding payment of a profit share
of a completed development. Legal proceedings were commenced by the
third party in 2001. The amount claimed is GBP744,008. Waterloo
Investments Limited has counterclaimed against the third party for
GBP333,708 plus interest and costs. No provision has been made in
these financial statements for this liability as the Board is of
the opinion that there is no prospect that the claim against
Waterloo Investments Limited will be successful.
The Company is included in a group registration for VAT purposes
and is therefore jointly and severally liable for all other group
companies' VAT liabilities amounting to GBP38,038 (2011:
GBP25,658).
On receipt of sufficient dividends from The Lancasters
Development, it is the Board's intention to make the following
payments, with this priority:
i. repayment of existing debt including interest
ii. repayment of the pension fund loan and profit share
iii. other accrued liabilities
iv. to pay a dividend to the Company's shareholders.
After retaining sufficient cash to fund future development
projects and if, following the payment of dividends as referred to
above, there are sufficient retained profits and funds available
(which is at present uncertain), the Board then intends to make
bonus payments to staff and directors, reflecting the success of
The Lancasters Development. Should all expected dividends from The
Lancasters Development be received, and there are sufficient cash
resources remaining after satisfying the aforementioned priorities
including a substantial dividend, the aggregate of these bonus
payments could amount to c12.5% of the anticipated total profit
share from The Lancasters Development.
11. Events after the Reporting Date
On 21st September 2012 the Group received a third distribution
from The Lancasters Development. The total amount received was
GBP13,559,500. The Group received to date GBP17,707,059 of the
total expected profits from The Lancasters Development. Following
receipt of the third distribution the Group repaid GBP12,543,339
including accrued interest of the Auster Real Estate Opportunities
S.a.r.l. loan leaving only GBP1,250,000 outstanding.
12. Other Information
The interim statement was approved by the Directors on 9th
November 2012.
A copy of the announcement will be made available on our
website:
www.northacre.com
Independent Review Report to
Northacre PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31st August 2012 which comprises the consolidated
statement of comprehensive income, the consolidated statement of
financial position, the consolidated statement of cash flows, the
consolidated statement of changes in equity and the related notes.
We have read other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information
contained in the condensed set of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
'Review of Interim Financial Information Performed by the
Independent Auditor of the Entity' issued by the Auditing Practices
Board for use in the United Kingdom. Our work is undertaken so that
we might state to the Company those matters we are required to
state to them in an independent review report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company, for our
review work, for this report, or for the conclusions we have
formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the Rules of the Alternative Investment Market.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRS as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting' as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly report
based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months to 31st
August 2012 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Rules of the Alternative Investment
Market.
Kingston Smith LLP
Chartered Accountants
Devonshire House
60 Goswell Road
London EC1M 7AD
9th November 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GMMGMKRFGZZM
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