RNS Number:7903Q
Northacre PLC
10 October 2003
NORTHACRE PLC
("Northacre" or "the Group")
Interim Results for the six months to 31 August 2003
Northacre PLC, the premier developer of landmark residential property schemes in
Central London, today announces interim results for the six months to 31 August
2003.
* Progress on developments continues to be in line with our expectations
* KINGS Chelsea close to practical completion with only 14 of the 289
apartments remaining for sale
* Vicarage Gate House planning application submitted
* The Phillimores (QEC) on schedule for completion by end of 2004
* Improved activity for Lifestyles (Interiors) with new assignments secured
* Central London prime residential market showing signs of improved activity.
Group continues to actively pursue new opportunities
10 October 2003
Enquiries:
Northacre PLC Tel: 020 7349 8000
John Hunter, Chief Executive
Simon Elgar, Finance Director
College Hill Associates Tel: 020 7457 2020
Kate Pope
NORTHACRE PLC
("Northacre" or " the Group")
Interim Results for the six months to 31 August 2003
Overview
Northacre's core focus is the development of prime residential opportunities.
The Northacre brand continues to be synonymous with top grade quality schemes in
landmark locations.
Financial Overview
Turnover, including share of associates, for the period was #1,806,000 (2002:
#1,648,000 as restated) with gross profit of #1,271,000 (2002: #1,249,000 as
restated). Pre-tax loss was #822,000 (2002: #877,000 as restated) before
amortisation of goodwill with a basic loss per share of 5.32 pence (2002: 5.57
pence as restated). The Board is not declaring an interim dividend payment.
The Group is currently in discussions with our bankers and the trustees of the
Northacre PLC Directors' Retirement and Death Benefit Scheme regarding the
extension of loan facilities provided by these parties.
Operational Overview
In the period under review, Northacre disposed of its equity interest in The
Phillimores to its joint venture partner, Westcity (QEC) Limited for the book
value of #5.4 million, less interest of #382,000. Northacre continues as joint
development manager on the scheme. The scheme is expected to complete by the
end of 2004. The Group's profit participation is dependent on sales revenues
achieved and is realisable in stages, capped at a maximum of #2.75 million.
We completed the purchase of Vicarage Gate House, Kensington during the first
half of our financial year. This development is a joint venture with First
Islamic Investment Bank. A planning application has now been submitted for the
proposed scheme of 12 lateral family-sized apartments. We anticipate a consent
will be secured in 2004.
Progress on our developments continued well during the period. KINGS Chelsea is
close to practical completion with only 14 apartments remaining to be sold. Upon
the sale of these units the Group can expect to realise their full entitlement
to profits.
Our operating subsidiaries of Lifestyles (Interiors) and Nilsson Design continue
to face challenging market conditions. The first half did, however, see improved
activity for Lifestyles (Interiors) with more secured work. Nilsson Design
suffered from reduced revenues in the period, mainly as a result of the loss of
the Sir John Atkins project.
Discussions Update
On 15 August 2003, it was announced that Northacre had received a preliminary
approach from Klas Nilsson and John Hunter, respectively Executive Chairman and
Chief Executive, that may or may not lead to an offer for the Group.
At Northacre's Annual General Meeting on 24 September 2003, the Group confirmed
that discussions were progressing but remained at an early stage. This situation
remains unchanged.
All of the directors of Northacre have or may have an interest in any such offer
or a continuing role subsequent to the completion of any such offer, and
therefore would have a conflict of interest that would preclude them from
providing advice to shareholders on the terms of an offer. Northacre PLC has
appointed, in accordance with the requirements of the City Code on Takeovers and
Mergers, Navigatorltd Limited ("Navigator"), to provide independent advice to
the company in relation to the terms of any offer and the substance of such
advice will be made known to shareholders. Klas Nilsson and John Hunter will be
appointing their own independent financial advisor.
10 October 2003
NORTHACRE PLC
Interim Results for the six months to 31 August 2003
Summarised Profit and Loss Account (Unaudited)
6 Months to 6 Months to Year ended
Note 31.8.2003 31.8.2002 28.2.2003
Unaudited Unaudited Audited
#'000 #'000 #'000
(as restated)
Turnover 3 1,806 1,648 3,595
Cost of sales (535) (399) (1,002)
Exceptional item - - 826
Gross Profit 1,271 1,249 3,419
Administrative expenses 4 (2,385) (2,304) (4,687)
Other operating income 9 9 20
Operating Loss (1,105) (1,046) (1,248)
Share of profit from - - 112
associated undertakings
Provision against - - (1,566)
investments
Loss on Ordinary
Activities
before Interest and (1,105) (1,046) (2,702)
Investment Income
Dividends received 50 51 81
Interest (net) (155) (270) (568)
Loss on Ordinary
Activities
before Taxation (1,210) (1,265) (3,189)
Taxation 5 - - (51)
Retained Loss for the 8 (1,210) (1,265) (3,240)
Period
Basic loss per ordinary 7 (5.32p) (5.57p) (14.26p)
share
Fully diluted loss per (5.08p) (5.22p) (11.60p)
ordinary share
NORTHACRE PLC
Interim Results for the six months to 31 August 2003
Summarised Consolidated Balance Sheet (Unaudited)
31.8.2003 31.8.2002 28.2.2003
Note Unaudited Unaudited Audited
#'000 #'000 #'000
(as restated)
Fixed Assets
Intangible assets 12,224 13,000 12,612
Tangible assets 2,937 4,015 3,405
Investments 133 1,304 133
Investment in joint venture 812 5,337 5,401
16,106 23,656 21,551
Current Assets
Stock and work in progress 88 - 16
Debtors 1,007 765 636
Bank balances and cash 127 1 199
1,222 766 851
Creditors due within one year 6 (5,591) (9,006) (9,455)
Net Current Liabilities (4,369) (8,240) (8,604)
Net Assets 11,737 15,416 12,947
Capital and Reserves
Share capital 568 568 568
Share premium account 17,449 17,449 17,449
Revaluation reserve - 495 -
Profit and loss account (6,280) (3,096) (5,070)
Shareholders' Funds 8 11,737 15,416 12,947
NORTHACRE PLC
Interim Results for the six months to 31 August 2003
Summarised Consolidated Cash Flow Statement (Unaudited)
6 Months to 6 Months to Year ended
31.8.2003 31.8.2002 28.2.2003
Note Unaudited Unaudited Audited
#'000 #'000 #'000
Net Cash Outflow from 9 (1,846) (193) (28)
Operating Activities
Returns on Investments and
Servicing
of Finance
Interest received 8 - -
Interest paid (163) (266) (559)
Interest element of finance (2) (5) (9)
lease rentals
Dividends received 50 51 81
Net Cash Outflow from
Returns on
Investments and Servicing (107) (220) (487)
of Finance
Taxation
Corporation tax paid - (79) 18
Capital Expenditure and
Financial
Investment
Purchase of other tangible (32) (8) (18)
assets
Investment in joint venture (431) - -
Disposal of interest in 5,020 307 -
joint ventures
Sale of other tangible 475 40 85
assets
Net cash inflow for capital 5,032 339 67
expenditure
Acquisitions
Purchase of subsidiary - - (7)
undertaking
Cash Inflow/(Outflow)
before Management
of Liquid Resources and 3,079 (153) (437)
Financing
Financing
Capital element of finance (3) (53) (107)
lease rentals
(Decrease)/increase in debt (1,150) - 351
Net cash (outflow)/inflow
from management
of liquid resources and (1,153) (53) 244
financing
Increase/(Decrease) in Cash 10 1,926 (206) (193)
in the Period
NORTHACRE PLC
Interim Results for the six months to 31 August 2003
Notes to the Unaudited Interim Financial Statements for the period
ended 31st August 2003
1 Accounting Policies
The interim financial statements have been prepared on the basis of the
accounting policies set out in the 2003 Northacre PLC Annual Report.
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 31st August 2002
have been extracted from the company's interim report for that financial
period as restated in respect of the change in accounting policy described in
note 13 to this report. The statutory accounts for the period ended 28th
February 2003 have been given an unqualified audit report and have been filed
with the Registrar of Companies.
3 Turnover
The group's turnover has been analysed by principal activity as follows:
6 Months to 6 Months to Year ended
31.8.2003 31.8.2002 28.2.2003
#'000 #'000 #'000
Development profitshare 350 - -
Development management 194 437 865
Interior design 685 506 1,146
Architect design 577 705 1,584
1,806 1,648 3,595
4 Administrative Expenses
The administrative expenses of #2,384,631 (6 months to 31st August 2002:
#2,303,666) include amortisation of goodwill of #388,065 (6 months to 31st
August 2002: #388,065).
5 Taxation
There is no taxation charge due to the availability of losses.
6 Creditors due within one year
31.8.2003 31.8.2002 28.2.2003
#'000 #'000 #'000
Bank loans and overdrafts 2,082 3,894 4,080
Trade creditors 909 1,118 898
Social security and other taxes 405 604 753
Other creditors 1,504 2,028 2,397
Obligations under finance leases and
hire purchase contracts 16 73 19
Accruals and deferred income 675 1,289 1,308
5,591 9,006 9,455
7 Earnings Per Share
The basic loss per share has been calculated on the loss on ordinary
activities after tax of #1,209,388 (2002 - #1,265,260) and on the weighted
average number of shares in issue in the six months to 31st August 2003 of
22,713,644 (2002 - 22,713,644).
The fully diluted loss per share has been calculated on the loss on ordinary
activities after tax (as adjusted for convertible loan stock) of #1,204,114
(2002 - #1,243,677) and on the weighted average number of shares in issue in
the six months to 31st August 2003 (as adjusted for the dilutive effect of
options treated as exercisable at the period end) of 23,715,997 (2002 -
23,815,681).
8 Shareholders' Funds
The reconciliation of movements in shareholders' funds is as follows:
#'000
Shareholders' funds at 1st March 2003 12,947
Retained loss (1,210)
Shareholders' funds at 31st August 2003 11,737
9 Reconciliation of Operating Loss to Net Cash Flow from Operating Activities
6 Months to 6 Months to Year ended
31.8.2003 31.8.2002 28.2.2003
#'000 #'000 #'000
Group operating loss (1,105) (1,046) (1,248)
Depreciation 25 51 281
(Increase)/decrease in work in (72) 45 29
progress
(Increase)/decrease in debtors (371) 758 707
Decrease in creditors (711) (379) (413)
Amortisation of goodwill 388 388 776
Profit on disposal of fixed assets - (10) (30)
Revaluation of property - - (130)
Net cash outflow from operating (1,846) (193) (28)
activities
10 Reconciliation of Net Cash Flow to Movement in Net Debt
6 Months to 6 Months to Year ended
31.8.2003 31.8.2002 28.2.2003
#'000 #'000 #'000
Increase/(decrease) in cash in the 1,926 (206) (193)
period
Cash outflow/(inflow) resulting
from decrease/(increase)
in debt and lease financing 1,153 53 (244)
Net debt at start of period (6,110) (5,429) (5,673)
Net debt at end of period (3,031) (5,582) (6,110)
11 Analysis of changes in Net Debt
At Cash At
1.3.2003 Flow 31.8.2003
#'000 #'000 #'000
Cash at bank and in hand 199 (72) 127
Bank loans and overdrafts (4,080) 1,998 (2,082)
1,926
Debt due within one year (2,210) 1,150 (1,060)
Finance leases (19) 3 (16)
1,153
(6,110) 3,079 (3,031)
12 Dividends
The directors do not recommend the payment of an interim dividend.
13 Prior Year Adjustment
The group changed the accounting policy for turnover during the year ended 28th
February 2003. Shares in development profits and bonus fees are now recognised
when the amounts involved have been finally determined. Previously such profit
shares were recognised in some cases over the life of the developments in
question.
In accordance with this change the results for the 6 months to 31st August 2002
have been restated in this report. This has resulted in a charge to reserves of
the group of #2,500,000 as at 31st August 2002.
Had this new accounting policy not been adopted for that period, the retained
loss would have been #845,260 instead of #1,265,260.
14 Other Information
The interim statement was approved by the directors on 10 October 2003.
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.
NORTHACRE PLC
Interim Results for the six months to 31 August 2003
Independent Review Report to Northacre PLC
Introduction
We have been instructed by the company to review the financial information set
out on pages 3 to 8 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 31st August 2003.
Kingston Smith
Chartered Accountants
Devonshire House
60 Goswell Road
London EC1M 7AD
Date: 10 October 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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