NTA.L Regulatory News (NTA)

20 Nov 2007 11:41

Northacre PLC20 November 2007 Northacre PLC (the "Group" or "Company") Interim Results Six Months to 31 August 2007 Overview Northacre has re-established itself at the forefront of the residentialdevelopment market, with a portfolio of five schemes across prime CentralLondon. Although recent turmoil in the financial sector has impacted on thelevels of activity in the speculation and investment end of the market, therecontinues to be a good appetite for Northacre's revival style of high qualityresidential developments. Financial Results Turnover for the period was £3,052,244 (2006 - £2,410,837) with gross profit of£2,546,484 (2006 - £1,789,819). Pre-tax profit was £150,465 (2006: £123,401)with a basic profit per share of 0.60 pence (2006 - 0.55 pence). The anticipatedbonus fee of £2.6m from the Park Street scheme has been received in the periodand has been fully utilised in redeeming the Group's debt position. Followingthe successful re-financing of The Lancasters senior debt funding, the Group'sequity investment to date of £980,000 has been returned and placed on depositfor investment in future schemes. As announced on 5th November 2007 the Companyhas, through a joint venture, exchanged contracts for the West London TelephoneExchange site. The contract has the benefit of a delayed completion untilDecember 2008. The Group's equity commitment is £600,000 representing 5% of thetotal equity requirement but also entitles Northacre to a profit share rangingfrom 5% to 50% of the development returns. The Board is not declaring an interimdividend. Operational Review Park Street Successful completion of the scheme has been achieved with, as anticipated, thebonus fee received in April 2007. This Park Street development has been a usefulexercise as a forerunner to the Lancasters and its quality of design and finish. Vicarage Gate Further discussions with the Royal Borough of Kensington and Chelsea arecontinuing in the hope of finding a solution to this long outstanding planningstruggle. We anticipate returning to a new public inquiry by the end of thefirst quarter of 2008 if an agreement cannot be reached. The Kensington Following a lengthy period of detailed public consultation we now expect aplanning hearing and a decision on this landmark site at the Kensington Odeon bythe end of this year. Works for commencing the development of this scheme areprogrammed to begin during the first half of 2008. The Lancasters With the development funding secured, the main demolition works for developingthis revival scheme overlooking Hyde Park at The Lancasters is well underway.The first phase of the marketing campaign is due to be launched in the earlypart of 2008. The response to our art hoarding installed around the site hasbeen overwhelming. Leinster House Hotel It is our intention to secure a planning consent in the short term for aconversion of this hotel to residential apartments opposite The Lancasters. West London Telephone Exchange In our first joint venture with Bomac, an Irish investment group, the Group hasnow exchanged contracts for the acquisition of the West London TelephoneExchange site in Warwick Road W8. This site together with three otherneighbouring sites represents the assembly of a substantial regeneration schemein the central zone of Kensington. The Council has prepared a planning briefsetting out their planning policy for the treatment of this important new "ecovillage". Once this planning brief is adopted, Northacre expects to secure aplanning consent for its new residential scheme in Warwick Road during the firsthalf of 2008. The operating subsidiaries of Nilsson Architects and Lifestyles (Interiors) havesecured new assignments in the period under review. We are confident theirpositive contribution to the Group fee income will be maintained. The Group continues to review further new opportunities, which meet ourinvestment criteria that provide additional fee income together with risingprofit participation according to the performance of its schemes. Enquiries : Northacre Plc Tel : (020) 7349 8000 John Hunter, Chief Executive Manish Santilale, Finance Director KBC Peel Hunt Ltd Tel : (020) 7418 8900 Capel Irwin Nicholas Marren Summarised Consolidated Interim Income Statement (Unaudited) 6 Months 6 Months Year ended ended ended Note 31.8.2007 31.8.2006 28.2.2007 Unaudited Unaudited Unaudited Restated Restated £'000 £'000 £'000 Group Revenue 2 3,052 2,411 8,087 Cost of sales (506) (621) (1,498) Gross Profit 2,546 1,790 6,589 Administrative expenses (2,398) (1,669) (3,982) Other operating income 12 37 62 Group Profit from Operations 160 158 2,669 Finance Income 60 30 69 Finance Expense (69) (64) (163) Share of profit from associated - 23undertakings Profit before Taxation 151 124 2,598 Taxation 3 (14) - (56) Profit for the period attributable to equity holders of the Company 4 137 124 2,542 Profit per ordinary share - 5 continuing operations Basic 0.60p 0.55p 11.19p There were no acquisitions or disposals of any activities in the period. Summarised Consolidated Interim Balance Sheet (Unaudited) 31.8.2007 31.8.2006 28.2.2007 Note Unaudited Unaudited Unaudited Restated Restated £'000 £'000 £'000 Non Current Assets Goodwill 8,828 8,828 8,828Property, plant and equipment 52 25 21Investments 66 47 66Investment in joint 1,693 2,151 2,413ventures 10,639 11,051 11,328 Current Assets Inventories 263 113 114Trade and other 1,790 897 3,925receivables Cash and cash 1,143 - 33equivalents 3,196 1,010 4,072 Total Assets 13,835 12,061 15,400 Current Liabilities Trade and other 1,507 1,768 2,231payables Borrowings, including lease 1,000 397 978finance 2,507 2,165 3,209 Non Current Liabilities Borrowings, including lease 550 1,674 1,550finance 550 1,674 1,550 Total Liabilities 3,057 3,839 4,759 Equity Share capital 568 568 568Share premium account 17,449 17,449 17,449Retained Earnings (7,239) (9,795) (7,376) Total Equity 4 10,778 8,222 10,641 Total Equity and 13,835 12,061 15,400Liabilities Summarised Consolidated Interim Cash Flow Statement (Unaudited) 6 Months 6 Months Year ended ended ended 31.8.2007 31.8.2006 28.2.2007 Unaudited Unaudited Unaudited Restated Restated £'000 £'000 £'000 Net Cash Flow from Operating Activities Profit from Operations 160 158 2,669Adjustments for: Depreciation and amortisation 8 7 12Decrease/(increase) in working 1,373 (514) (3,245)capital Interest Paid (69) (71) (48) Net cash inflow/(outflow) from 1,472 (420) (612)operations Net Cash Flow from Investing Activities Purchase of property, plant (39) (10) (12)and equipment Purchase of interest in joint (260) (555) (817)venture Return of equity in joint 980 - -venture Net cash used in investing 681 (565) (829)activities Net Cash Flow from Financing Activities Interest received 20 7 9Dividends received 40 30 60New loans - 124 -Transfer to short term loan (1,000) - -Loan repayment (125) - - Net cash from financing (1,065) 161 69activities Increase/(Decrease) in Cash and Cash Equivalents 1,088 (824) (1,372) Cash and cash equivalents at (945) 427 427beginning of period Cash and cash equivalents at 143 (397) (945)end of period Notes to the Unaudited Interim Financial Statements For the Six Months ended 31st August 2007 1 Basis of Preparation and Accounting Policies Basis of Preparation The interim financial information is unaudited. The interim financial information was approved by the Board of Directors on 19th November 2007. The results, assets and liabilities of the comparative period to 31 August 2006 and the year ended 28 February 2007 have been restated in order to adopt International Financial Reporting Standards for the first time. The information for the year ended 28 February 2007 is based on the statutory financial statements for the year but has been adjusted to comply with International Financial Reporting Standards. The adjustments have not been subject to audit. The statutory financial statements for the year ended 28 February 2007, prepared under applicable UK accounting standards, 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 s237 (2) or s237 (3) of the Companies Act 1985. The interim financial information does not constitute statutory accounts within the meaning of the Companies Act 1985. Accounting Convention The statutory financial statements for the year ended 28 February 2008 will be prepared in accordance with International Financial Reporting Standards (IFRS) and therefore, the interim financial information has also been prepared in accordance with those IFRS that are expected to apply at the year end, except that IAS34 "Interim Financial Statements", which is not mandatory for AIM companies, has not been adopted in the preparation of this statement. The Group's financial statements were previously prepared under UK GAAP. Details of the effects of changes are given below. IFRS 1 permits those companies adopting IFRS for the first time to take certain exemptions from the full requirements of IFRS in the transition period. The Group has taken advantage of the following exemptions: (a) IFRS 3 " Business Combinations" - IFRS 3 has not been retrospectively applied to acquisitions that took place prior to 1 March 2006. The principal change to accounting policies arising from the adoption of IFRS is as follows: Business Combinations and Goodwill Goodwill relating to acquisitions prior to 1 March 2006 is carried at the net book value on that date, is no longer amortised and 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 the income statement in the period of acquisition. Goodwill is tested annually for impairment. The effect of this change is shown in note 6. Notes to the Unaudited Interim Financial Statements For the Six Months ended 31st August 2007 Going Concern The company and group meet their day to day working capital requirements partly through monies loaned from the Northacre PLC Directors Retirement and Death Benefit Scheme, partly from the group's bankers and partly from other loans. These facilities are expected to remain in place for the foreseeable future. In particular: (i) One of the loans due to the Northacre PLC Directors Retirement and Death Benefit Scheme of £1million is not due for repayment until 31st July 2008. (ii) Two further loans of £275,000 each, from the Northacre PLC Directors Retirement 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 31st August 2008. (iii) The group's current banking facilities are in place 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 timing 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 these interim financial statements on a going concern basis. 2 Segmental Information The group's revenue has been analysed by principal activity as follows: 6 Months ended 6 Months ended Year ended 31.8.2007 31.8.2006 28.2.2007 Unaudited Unaudited Unaudited £'000 £'000 £'000 Profit shares and bonus fees - 45 - 2,619 property development Development management 977 795 1,871 Interior design 883 777 1,985 Architectural design 1,147 839 1,612 3,052 2,411 8,087 3 Taxation 31.8.2007 31.8.2006 28.2.2007 Unaudited Unaudited Unaudited £'000 £'000 £'000 Current taxation 14 - 56 Notes to the Unaudited Interim Financial Statements For the Six Months ended 31st August 2007 4 Consolidated Interim Statement of Changes in Shareholders' Equity Share Share Retained Total Capital Premium Earnings £'000 £'000 £'000 £'000 As at 1 March 2006 568 17,449 (9,919) 8,098 Profit for the period - - 124 124 As at 31 August 2006 568 17,449 (9,795) 8,222 Profit for the period - - 2,419 2,419 As at 28 February 2007 568 17,449 (7,376) 10,641 Profit for the period - - 137 137 As at 31 August 2007 568 17,449 (7,239) 10,778 5 Earnings Per Share 6 Months 6 Months Year ended ended ended 31.8.2007 31.8.2006 28.2.2007 Unaudited Unaudited Unaudited Restated Restated Weighted average number of shares in 22,713,644 22,713,644 22,713,644 issue Profit for the period attributable to 137 124 2,542 equity holders of the Company (£'000) Basic Earning Per Share 0.60 p 0.55 p 11.19 p (pence) The diluted earnings per share is not given as there are no diluting instruments in issue. Notes to the Unaudited Interim Financial Statements For the Six Months ended 31st August 2007 6 Restatement of Prior Periods to IFRS The effect of the changes in accounting policies and other restatements described in note 1 on the previously reported results, assets and liabilities for the periods are, in summary, as follows: IFRS Adjustments Goodwill As Previously Amortisation As Stated Written back Restated £'000 £'000 £'000 Six months ended 31 August 2006 Revenue 2,411 - 2,411 EBITDA 127 - 127 Group (loss)/profit from (472) 630 158 operations (Loss)/profit before and (506) 630 124 after taxation Goodwill 8,198 630 8,828 Property, plant and 25 - 25 equipment Investments 47 - 47 Investment in Joint 2,151 - 2,151 Ventures Current Assets 1,010 - 1,010 Total Assets 11,431 630 12,061 Current 2,165 - 2,165 Liabilities Non-current 1,674 - 1,674 Liabilities Total Liabilities 3,839 - 3,839 Equity 7,592 630 8,222 Total Equity and 11,431 630 12,061 Liabilities Year ended 28 February 2007 Revenue 8,087 - 8,087 EBITDA 2,619 - 2,619 Group profit from 1,408 1,261 2,669 operations Profit before and after 1,281 1,261 2,542 taxation Goodwill 7,567 1,261 8,828 Property, plant and 21 - 21 equipment Investments 66 - 66 Investment in Joint 2,413 - 2,413 Ventures Current Assets 4,072 - 4,072 Total Assets 14,139 1,261 15,400 Current 3,209 - 3,209 Liabilities Non-current 1,550 - 1,550 Liabilities Total Liabilities 4,759 - 4,759 Equity 9,380 1,261 10,641 Total Equity and 14,139 1,261 15,400 Liabilities The above IFRS adjustments relates to the write-back of amortised goodwill since 1 March 2006. Notes to the Unaudited Interim Financial Statements For the Six Months ended 31st August 2007 7 Opening Reserves at 1st March 2006 No adjustments were required to be made to opening reserves or the opening balance sheet as at 1st March 2006 in order to comply with IFRS after having taken into account the exemptions permitted on transition to IFRS and summarised in note 1. 8 Other Information The interim statement was approved by the directors on 19 November 2007. 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 for the six months ended 31st August 2007 which comprises the consolidated income statement, the consolidated balance sheet, the consolidated cash flow statement andthe related notes. 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. This report is made solely to the company in accordance with Bulletin 1999/4 issuedby the Auditing Practices Board. Our work has been 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 permittedby 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 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 preparingthe 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 31st August 2007. Kingston Smith LLP Chartered Accountants Devonshire House 60 Goswell Road London EC1M 7AD Date: 19th November 2007 This information is provided by RNS The company news service from the London Stock Exchange