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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Northacre | LSE:NTA | London | Ordinary Share | GB0006877939 | ORD 2.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 95.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jul 2019 to Jul 2024
TIDMNTA
RNS Number : 2314J
Northacre PLC
12 July 2013
NORTHACRE PLC
(the "Company" or "Group")
Results for the year ended 28(th) February 2013
Northacre PLC is pleased to announce its financial results for the year ended 28(th) February 2013. The Annual Report and Accounts for the year then ended and Notice of the Company's Annual General Meeting, to be held at the Company's registered office at 9.30am on 19(th) August 2013, will be available shortly on the Company's website www.northacre.com and are being posted to those shareholders who have elected to receive hard copies.
Extracts from the Company's Annual Report and Accounts are shown below.
Enquiries:
Northacre PLC
Klas Nilsson (Non-Executive Chairman)
020 7349 8000
finnCap Limited (Nominated Adviser and Broker)
Stuart Andrews
Henrik Persson
020 7220 0500
Chairman's Statement
The dominant event of the year has been the acquisition of the controlling shareholding in Northacre PLC by Spadille Limited, a company wholly owned and controlled by Abu Dhabi Capital Management LLC ("ADCM").
The acquisition was facilitated through the sale of my own shareholding and another major shareholder on January 17(th) 2013. ADCM have since consolidated their holdings during the offer period to 66.8% of the issued Ordinary share capital of Northacre PLC.
Northacre PLC has as such entered a new prosperous era, and as the founder and Non-Executive Chairman, I welcome ADCM on board to complete my vision for the Company in an ever increasingly competitive market. Our joint vision is to re-establish Northacre PLC firmly back as the number one prime residential development manager in London.
We are further planning to project the Company internationally and capitalise on the inherent strength and established pedigree of the Northacre brand, and where our experience and expertise can add value.
Since the year end, we have received the resignations of three Directors namely the Chief Executive Officer and Finance Director Ken MacRae, Executive Director Mohamed AlRafi and Non-Executive Director Malcolm Williams. The Company wishes to express its appreciation to those Directors for their contribution to the Company as Directors and Board members over the past years.
Jassim Alseddiqi and Mustafa Kheriba, Chief Executive Officer and Chief Operating Officer of ADCM, were appointed Executive Directors and members of the Board on the 27(th) February 2013. The Company has identified a new Chief Executive Officer who will join Northacre on the 2(nd) September 2013. Details of this appointment will be disclosed in due course.
The Group is happy to announce that all apartments at The Lancasters Development have now been sold and dividends of GBP42.7m have been received from the joint venture company, being Northacre's share of the profits. A further GBP7.1m are expected within the next 12 months.
Our development team is focusing their attention on the Vicarage Gate Development expected to complete in spring 2015.
As a result of Jassim Alseddiqi and Mustafa Kheriba taking up their executive roles, the Company has renewed its efforts to secure the next development opportunity - now with evidence of substantial funding.
London has achieved a global city status with an increasing number of international purchasers who wish to work, live and or study in the capital, and with London being the fastest growing city in Europe with an expected growth of one million people over the next decade, there is an increasing demand for good residential stock.
We remain optimistic. Our product should command that extra premium in a market place where the discerning purchaser is ever more demanding.
Klas Nilsson
Non-Executive Chairman
Executive Director's Statement
Northacre PLC has been successful in developing and delivering landmark properties over the past two decades. The recent completion of The Lancasters Development enhanced the resilience of our mantra and placed our balance sheet in vigorous health.
Building on last year's results, the Company made good progress as more competitive market conditions emerged during the year. While we are actively seeking to acquire new schemes, our view still holds strong that patience will be required to acquire the right opportunities that are suitable for a Northacre branded development and at the right price.
This is an exciting time in the life cycle of Northacre PLC. Our objectives are clear, and our stakeholders have specific, identifiable commitments which focus on every area of the business. These commitments have been assiduously and earnestly embraced by all. We adamantly believe that we have the right mix of strategy, commitment to excellence and personnel to implement the Company's plan, and to cement the Company's reputation and stronghold as a leading development manager in the prime Central London arena.
Healthy Pipeline
Post the delivery of The Lancasters Development, Northacre PLC is currently developing Vicarage Gate House. The Vicarage Gate House scheme is looking to be one of the most prestigious residential developments in Central London and will be the talk of the town once completed.
Furthermore, the Business Development team maintains a strong and healthy pipeline of opportunities, and we will continue to manage the pipeline carefully to ensure we chose the right opportunity for Northacre. With the assistance and support of ADCM, we have set out a clear set of priorities. The development team will continually look for ways to create shareholder value by being better at sourcing and securing new opportunities. The Company now encourages a culture where outperformance is expected and where everyone is measured on the value they create.
Outlook
The prime residential market in London continued to experience strong growth into 2013. Prime London property has proven a favourable investment asset class for the world's wealthy in the current environment, and has been resilient to stagnant domestic economic growth and the government's new stamp duties.
Northacre PLC is well-positioned with a healthy cash balance and a new strong and harmonising relationship with ADCM, allowing the Company to source and finance new development opportunities with more ease.
Culminating with the successful completion of The Lancasters Development this year, Northacre PLC has further solidified its position in the prime Central London residential market with its exceptional track record, strong brand pedigree, and experienced team.
Last but not least, we seek to embark on expanding the pedigree and brand of Northacre globally, and are presently exploring opportunities to carve a new niche globally.
Mustafa Kheriba
Executive Director
Financial Review
Financial Highlights
-- Net Asset Value (NAV) increased to 150.11 pence per share (2012: 138.99 pence per share) -- Revenue increased by 17% to GBP3.5m (2012: GBP3.0m) -- Operating loss for the year is GBP7.7m (2012: GBP6.5m) -- Profit before tax is GBP16.8m (2012: loss GBP7.9m) -- Dividends received during the year were GBP26.6m (2012: GBP1.2m) -- Further dividends of GBP15m were received after the reporting date
Review of Financial Results
Consolidated Income Statement
This has been a successful year during which the Group received over 50% of our total expected profit share from The Lancasters Development which, at the date of this report, was fully sold. The total dividend income received from The Lancasters Development in the year was GBP26.6m (2012: GBP1.2m) with a further GBP15.0m received after the year end.
Group revenue for the year increased by 17% to GBP3.5m (2012: GBP3.0m), which reflected a higher level of activity in Intarya, the Group's interior design business. Intarya's revenue increased by 45% to GBP3.2m (2012: GBP2.2m).Development management fee income fell by 58% to GBP0.349m (2012: GBP0.829m) as expected due to the reduced role required as The Lancasters Development was sold.
Administrative expenses increased to GBP8.9m (2012: GBP6.7m). The increase was driven by additional legal and professional fees of GBP0.5m in relation to the offer made by ADCM and the full bonus provision of GBP3.4m for staff and directors following the receipt of significant dividends from The Lancasters Development. Our cost base is driven by the employment of skilled teams of professionals to manage current and potential developments. The Group has streamlined the cost base in recent years to reflect the lower activity on The Lancasters Development and lack of new projects. Excluding the bonus provision, Group staff costs were reduced by GBP0.3m to GBP3.1m (2012: GBP3.4m).
The receipt of dividends from The Lancasters Development allowed the Group to repay all of its debt during the year. Loan arrangement costs decreased by 81% to GBP0.3m (2012: GBP1.6m). Finance costs were at a similar level of GBP2.1m (2012: GBP2.1m) and are forecasted to be GBPnil in the next year as the Group's positive cash position allows it to meet the day-to-day working capital requirements.
Our profit before tax is GBP16.8m (2012: loss GBP7.9m) and the significant increase is a reflection of investment revenue of GBP26.6m (2012: GBP1.2m) received during the year.
Consolidated Statement of Comprehensive Income
In accordance with International Accounting Standards we have measured fair value of the available for sale financial asset, being The Lancasters Development, with reference to the secured sales. The change in fair value reported for the year was a decrease of GBP18.7m (2012: increase GBP19.6m), which reflected an increase in the fair value of GBP7.9m (2012: GBP20.8m) and dividends received of GBP26.6m (2012: GBP1.2m).
Consolidated Statement of Financial Position
The receipt of significant dividends from The Lancasters Development in the year was the main driver of the change in the constituent assets and liabilities of the Northacre PLC Consolidated Statement of Financial Position.
The Group secured a new loan facility of GBP15m (of which only GBP13m was drawn down) with Auster Real Estate Opportunities S.a.r.l. on 1(st) May 2012. Following receipt of significant dividends from The Lancasters Development, the loan of GBP14.3m, including interest, was repaid on 29(th) November 2012. As at 28(th) February 2013 Group borrowings were GBPnil (2012: GBP11.2m) and total liabilities were reduced by 68% to GBP4.7m (2012: GBP14.8m).
The dividends from The Lancasters Development improved the Northacre PLC cash position from GBP0.9m at the start of the year to GBP9.2m at February 2013. After the reporting date our cash position improved further following a receipt of an additional Lancaster's dividends of GBP15m. Northacre PLC's cash position as at the date of this report is circa GBP20m with a further GBP7.1m expected from The Lancasters Development in the next 12 months.
Looking forward, the Group will focus on securing new projects and will increase both its development income and investment income. Supported by ADCM and with its substantial funding support we expect to be in good position to manage further developments in the future.
Kasia Maciborska
Group Financial Controller
Consolidated Income Statement
For the year ended 28(th) February 2013
Hot Features
Premium
Note 2013 2012
Continuing Operations GBP GBP
Group
Group Revenue 3 3,521,402 3,021,353
Cost of sales (2,235,379) (2,068,876)
------------ ------------
Gross Profit 1,286,023 952,477
Administrative expenses (8,943,929) (6,676,018)
Other operating costs:
Exceptional items 4 - (756,879)
Group Loss from Operations (7,657,906) (6,480,420)
Investment revenue 5 26,577,553 1,177,224
Other gains 6 - 312,832
Finance costs 7 (2,117,427) (2,054,269)
Impairment of goodwill 12 - (821,043)
Profit/(Loss) for the year before
Taxation 8 16,802,220 (7,865,676)
Taxation 10 4,832,506 577,204
------------ ------------
Profit/(Loss) for the year attributable
to equity holders of the Company 21,634,726 (7,288,472)
============ ============
Profit/(Loss) per ordinary share
Basic - Continuing and total operations 24 80.96p (27.27)p
Diluted - Continuing and total
operations 24 80.96p (27.27)p
Company
Loss for the year attributable
to equity holders of the Company (5,074,317) (12,629,475)
============ =============
Consolidated Statement of Comprehensive Income
For the year ended 28(th) February 2013
Note 2013 2012
Continuing Operations GBP GBP
Group
Profit/(Loss) for the period attributable
to equity holders of the Company 21,634,726 (7,288,472)
------------- ------------
Other comprehensive income:
Changes in fair value of available
for sale financial assets 14(b) (18,662,028) 19,605,236
------------- ------------
Total comprehensive income for
the period 2,972,698 12,316,764
============= ============
Company
Loss for the period attributable
to equity holders of the Company (5,074,317) (12,629,475)
------------ -------------
Other comprehensive income - -
------------ -------------
Total comprehensive loss for the
period 11 (5,074,317) (12,629,475)
============ =============
Consolidated Statement of Financial Position
As at 28(th) February 2013
Note 2013 2012
GBP GBP
Non-Current Assets
Goodwill 12 8,007,417 8,007,417
Property, plant and equipment 13 919,229 1,062,598
Available for sale financial
assets 14(b) 22,148,579 40,810,580
----------- -----------
31,075,225 49,880,595
----------- -----------
Current Assets
Inventories 15 1,378 118,006
Trade and other receivables 16 4,585,083 998,556
Cash and cash equivalents 9,194,508 916,963
----------- -----------
13,780,969 2,033,525
----------- -----------
Total Assets 44,856,194 51,914,120
Current Liabilities
Trade and other payables 17 4,741,075 3,558,655
Borrowings, including
lease finance 19 - 10,513,442
----------- -----------
4,741,075 14,072,097
----------- -----------
Non-Current Liabilities
Borrowings, including
lease finance 20 - 699,602
- 699,602
----------- -----------
Total Liabilities 4,741,075 14,771,699
----------- -----------
Equity
Share capital 25 668,091 668,091
Share premium account 18,552,361 18,552,361
Retained earnings 20,894,667 17,921,969
----------- -----------
Total Equity 40,115,119 37,142,421
----------- -----------
Total Equity and Liabilities 44,856,194 51,914,120
Company Statement of Financial Position
As at 28(th) February 2013
Note 2013 2012
GBP GBP
Non-Current Assets
Property, plant and equipment 13 937,237 1,055,842
Investments 14(c) 8,007,421 8,007,421
---------------- -----------------
8,944,658 9,063,263
---------------- -----------------
Current Assets
Trade and other receivables 16 3,218,933 7,412,064
Cash and cash equivalents 9,019,416 753,669
---------------- -----------------
12,238,349 8,165,733
---------------- -----------------
Total Assets 21,183,007 17,228,996
Current Liabilities
Trade and other payables 17 30,894,008 21,150,311
Borrowings, including
lease finance 19 - 15,767
---------------- -----------------
30,894,008 21,166,078
---------------- -----------------
Non-Current Liabilities
Borrowings, including
lease finance 20 - 699,602
- 699,602
---------------- -----------------
Total Liabilities 30,894,008 21,865,680
---------------- -----------------
Equity
Share capital 25 668,091 668,091
Share premium account 18,552,361 18,552,361
Retained earnings (28,931,453) (23,857,136)
---------------- -----------------
Total Equity (9,711,001) (4,636,684)
---------------- -----------------
Total Equity and Liabilities 21,183,007 17,228,996
Consolidated and Company Statements of Cash Flows
For the year ended 28(th) February 2013
Group Company
2013 2012 2013 2012
GBP GBP GBP GBP
Cash flows from operating
activities
Profit/(Loss) for the period
before tax 16,802,220 (7,865,676) (8,511,585) (12,876,022)
Adjustments for:
Investment revenue (26,577,553) (1,177,224) (20,443) (191,575)
Finance costs 2,117,427 2,054,269 2,119,810 2,003,907
Profit on disposal of investment
in associate - (127,832) - -
Depreciation and amortisation 150,069 223,808 118,605 183,072
Goodwill impairment - 821,043 - -
Provision against investments - - - 2,082,358
Decrease in inventories 116,628 218,002 - -
(Increase)/decrease in trade
and other receivables (946,061) (134,967) 6,089,337 7,625,926
Increase/(decrease) in trade
and other payables 1,076,897 (1,474,399) 9,615,255 5,686,498
------------------------- ------------ ------------ ---------------
Cash (used in)/generated
from operations (7,260,373) (7,462,976) 9,410,979 4,514,164
Interest paid (2,117,427) (2,054,269) (2,119,810) (2,003,907)
Corporation tax - consortium
relief refunded 2,297,536 577,204 1,669,504 246,547
------------------------- ------------ ------------ ---------------
Net cash (used in)/generated
from operating activities (7,080,264) (8,940,041) 8,960,673 2,756,804
------------------------- ------------ ------------ ---------------
Cash flows from investing
activities
Proceeds from sale of investment
in associate - 170,000 - 170,000
Purchase of plant, property
& equipment (6,700) (35,458) - -
Interest received 20,494 7,224 20,443 1,875
Dividends received 26,557,059 1,170,000 - 20,000
------------------------- ------------ ------------ ---------------
Net cash generated from investing
activities 26,570,853 1,311,766 20,443 191,875
------------------------- ------------ ------------ ---------------
Cash flows from financing
activities
Proceeds from borrowings 13,000,000 10,490,740 - -
Repayment of borrowings (24,190,342) (1,568,247) (699,602) (1,843,247)
Repayment of finance leases (22,702) (158,570) (15,767) (130,832)
------------------------- ------------ ------------ ---------------
Net cash (used in)/generated
from financing activities (11,213,044) 8,763,923 (715,369) (1,974,079)
------------------------- ------------ ------------ ---------------
Increase in cash and cash
equivalents 8,277,545 1,135,648 8,265,747 974,600
Cash and cash equivalents
at the beginning of the year 916,963 (218,685) 753,669 (220,931)
------------------------- ------------ ------------ ---------------
Cash and cash equivalents
at the end of the year 9,194,508 916,963 9,019,416 753,669
========================= ============ ============ ===============
Consolidated and Company Statements of Changes in Equity
For the year ended 28(th) February 2013
Called
Up Share
Share Premium Retained
Group Capital Account Earnings Total
GBP GBP GBP GBP
As at 1(st) March 2011 668,091 18,552,361 5,605,205 24,825,657
Loss for the period - - (7,288,472) (7,288,472)
Other Comprehensive Profit
for the period:
Changes in fair value of
available for sale financial
assets - - 19,605,236 19,605,236
As at 29(th) February
2012 668,091 18,552,361 17,921,969 37,142,421
======== =========== ================= ===============
As at 1(st) March 2012 668,091 18,552,361 17,921,969 37,142,421
Profit for the period - - 21,634,726 21,634,726
Other Comprehensive Loss
for the period:
Changes in fair value of
available for sale financial
assets - - (18,662,028) (18,662,028)
As at 28(th) February
2013 668,091 18,552,361 20,894,667 40,115,119
======== =========== ================= ===============
Called
Up Share
Share Premium Retained
Company Capital Account Earnings Total
GBP GBP GBP GBP
As at 1(st) March 2011 668,091 18,552,361 (11,227,661) 7,992,791
Total Comprehensive Loss
for the period - - (12,629,475) (12,629,475)
As at 29(th) February
2012 668,091 18,552,361 (23,857,136) (4,636,684)
======== =========== ================= ===============
As at 1(st) March 2012 668,091 18,552,361 (23,857,136) (4,636,684)
Total Comprehensive Loss
for the period - - (5,074,317) (5,074,317)
As at 28(th) February
2013 668,091 18,552,361 (28,931,453) (9,711,001)
======== =========== ================= ===============
Notes to the Consolidated Financial Statements
For the year ended 28(th) February 2013
1. Principal Accounting Policies
The principal accounting policies are as follows:
Accounting Basis and Standards
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.
The following new standards, amendments to standards or interpretations are mandatory for the Group for the first time for the financial year beginning 1(st) March 2012, but are not currently considered to be relevant to the Group (although they may affect the accounting for future transactions and events):
-- Amendment to IFRS 1, 'Presentation of Financial Statements' on Other Comprehensive Income.' The amendment confirms the treatment of borrowing costs relating to qualifying assets for which the commencement date for capitalisation is before the date of transition to IFRSs.
-- Amendments to IFRS 7 'Financial Instruments: Disclosures'. These amendments are intended to provide greater transparency around risk exposures when a financial asset is transferred but the transferor retains some level of continuing exposure in the asset. The amendments also require disclosures where transfers of financial assets are not evenly distributed throughout the period.
-- Amendment to IAS 12, 'Income taxes'. Deferred tax accounting for investment property at fair value' IAS 12 requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40 Investment Property. The amendment provides a practical solution to the problem by introducing a presumption that recovery of the carrying amount will, normally, be through sale.
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1(st) March 2012 and have not been early adopted:
-- IFRS 9, 'Financial instruments', issued in November 2009 and effective from 1(st) January 2015. IFRS 9 represents the first phase of the IASB's project to replace IAS 39 'Financial Instruments: Recognition and Measurement'. It sets out the classification and measurement criteria for financial assets and liabilities and requires all financial assets, including assets currently classified under IAS 39 as available for sale, to be measured at fair value through profit and loss unless the assets can be classified as held at amortised cost. Qualifying equity investments held at fair value may have their fair value changes taken through other comprehensive income by election.
-- IFRS 10, 'Consolidated Financial Statements', effective from 1(st) January 2013. This standard builds on existing principles by identifying the concept of control as the determining factor in which an entity should be included within the consolidated financial statements. The standard provides additional guidance to assist in determining control where this is difficult to assess.
-- IFRS 11, 'Joint arrangements', effective from 1(st) January 2013. This standard establishes principles for financial reporting by parties to a joint arrangement.
-- IFRS 12, 'Disclosure of interests in other entities', effective from 1(st) January 2013. This standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, structured entities and other off balance sheet vehicles.
-- IFRS 13, 'Fair value measurement', effective from 1(st) January 2013. This standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP.
-- IAS 1, 'Other Comprehensive Income', effective from 1(st) January 2013. The main change resulting from these amendments is a requirement for entities to group items presented in other comprehensive income on the basis of whether they are potentially reclassifiable to profit or loss subsequently. The amendments do not address which items are presented in other comprehensive income.
-- IAS 19 (Revised), 'Employee Benefits' effective from 1(st) January 2013. These amendments are intended to provide a clearer indication of an entity's obligations resulting from the provision of defined benefit pension plan and how those obligations will affect its financial position, financial performance and cash flow.
-- IAS 27 (Revised), 'Separate Financial Statements' (Revised), effective from 1(st) January 2013 has the objective of setting standards to be applied in accounting for investments in subsidiaries, joint ventures, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements.
-- IAS 28 (Revised), 'Associates and Joint Ventures' (Revised), effective from 1(st) January 2013 prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures.
-- Amendment to IAS 32, 'Offsetting Financial Assets and Liabilities', effective from 1(st) January 2013 clarifies that the tax effect of a distribution to holders of equity instruments should be accounted for in accordance with IAS 32.
Business Combinations and Goodwill
Goodwill relating to acquisitions prior to 1(st) 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 the income statement in the period of acquisition. Goodwill is tested annually for impairment.
Going Concern
The Company and Group currently meet their day-to-day working capital requirements through monies received from The Lancasters Development dividends. All of the Groups' loan facilities have been repaid during the year under review. In particular:
(i) The loan due to Northacre PLC Directors Retirement and Death Benefit Scheme of GBP699,602 (2012: GBP699,602) was repaid on 17(th) December 2012. The total amount repaid was GBP711,300 including interest of GBP11,698.
(ii) A Eurobond loan facility of GBP10,500,000 was agreed with Abu Dhabi Capital Management LLC ("ADCM") on 20(th) October 2011 and drawn down in full on 31(st) 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 18(th) January 2012 plus GBP76,050 accrued interest. After securing new financing the Eurobond was repaid in full on 30(th) May 2012. The total amount repaid was GBP11,276,653 including interest of GBP1,828,101.
(iii) A loan facility of GBP15,000,000 was agreed with Auster Real Estate Opportunities S.a.r.l. ("Auster") on 1(st) May 2012 and GBP13,000,000 was drawn down on 30(th) 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 was due to be repaid in 18 months from the date of the draw down unless sufficient dividends were received from The Lancasters Development. Following receipt of a further GBP10m dividends from The Lancasters Development on 23(rd) November 2012 the Group repaid the Auster loan in full on 29(th) November 2012. The total amount repaid during the year was GBP14,300,000 including interest of GBP1,300,000.
The Directors have prepared detailed cash flow projections for the period ended 28(th) February 2018 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 meet its ongoing working capital requirements. 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 30(th) 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.
Depreciation
Depreciation on property, plant and equipment 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:
Leasehold improvements over the period of the lease
Fittings and office equipment 25% straight line
Computer equipment 33 1/3% straight line
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.
Inventories
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.
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.
Current Taxation
The tax expense for the year represents the total of current taxation and deferred taxation. The charge in respect of current taxation is based on the estimated taxable profit for the year. Taxable profit for the year is based on the profits as shown in profit or loss, as adjusted for items or expenditure, which are not deductible for tax purposes.
The current tax liability for the year is calculated using tax rates, which have either been enacted or substantively enacted at the reporting date.
Deferred Taxation
Deferred tax is provided in full on all temporary differences arising between the tax base of assets and liabilities and their carrying values in the financial statements. The deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of transaction affects neither accounting nor taxable profit or loss.
Deferred tax is determined using tax rates which have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
Leased Assets
Assets held under finance leases and hire purchase contracts are capitalised in the statement of financial position and depreciated over their expected useful lives. The interest element of the rental obligations is charged to profit or loss over the period of the lease on a straight-line basis.
Rentals under operating leases are charged to profit or loss on a straight-line basis over the lease term.
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.
Pension Scheme Arrangements
The Group operates a money purchase scheme on behalf of one 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.
Foreign Currency Translation
Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Assets and liabilities are translated at the rate of exchange ruling at the reporting date. Exchange differences are taken into account in arriving at Group operating profit.
Financial Assets - Loans and Receivables
Trade receivables, loans and other receivables are classified as 'trade and other receivables' and are measured at cost less any provisions. Interest income is recognised by applying the appropriate interest rate of the contractual arrangement.
Financial Liabilities - Loans and Payables and Borrowings
Trade payables, other payables and borrowings are classified as 'trade and other payables' and 'borrowings, including lease finance'. These are measured at amortised cost and the interest expense is recognised by applying the appropriate interest rate of the contractual arrangement.
Borrowings
Interest-bearing borrowings are recognised initially at fair value, net of any transaction costs incurred. Borrowings are subsequently stated at amortised cost using the effective interest method with any differences between the proceeds (net of transaction costs) and the redemption value being recognised over the period of borrowings.
All borrowings are classified as current unless the Group has an unconditional right to defer payment of the borrowings until at least twelve months from the reporting date.
2. 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 balance.
The capital structure of the Group, following the repayment of the Auster loan consists of 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.
3. 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:
Revenue
2013 2012
Principal activities: GBP GBP
Development management 300,350 692,615
Interior design 3,172,369 2,192,233
Architectural design 48,683 136,505
---------------------- ---------------------
3,521,402 3,021,353
====================== =====================
Profit/(Loss) before
Taxation 2013 2012
GBP GBP
Development management 17,092,734 (6,176,058)
Interior
design 3,001 (818,044)
Architectural
design (293,515) (871,574)
---------------------- ---------------------
16,802,220 (7,865,676)
====================== =====================
Assets 2013 2012
GBP GBP
Development management 43,762,088 50,795,189
Interior design 928,793 1,075,965
Architectural design 165,313 42,966
---------------------- ---------------------
44,856,194 51,914,120
Liabilities 2013 2012
GBP GBP
Development management 2,941,712 12,725,626
Interior design 920,447 1,284,968
Architectural design 878,916 761,105
---------------------- ---------------------
4,741,075 14,771,699
====================== =====================
A geographical analysis of the Group's revenue,
assets and liabilities is given below:
Revenue 2013 2012
GBP GBP
United Kingdom 2,385,562 1,925,772
Ireland - 7,563
Saudi Arabia 1,135,840 874,158
United Arab Emirates - 50,400
Thailand - 41,251
Switzerland - 122,209
3,521,402 3,021,353
====================== =====================
Included in the revenue above are revenues in respect of customers
who account for over 10% of the Group's total revenue.
2013 2012
GBP GBP
Customer A (Interior design) 1,135,840 874,158
Customer B (Interior design) 40,952 515,892
Customer C (Development
management) - 407,615
Customer C (Interior design) 807,000 174,311
Customer D (Interior design) 1,095,712 -
---------------------- ---------------------
3,079,504 1,971,976
====================== =====================
Assets 2013 2012
GBP GBP
United Kingdom 44,180,739 51,169,630
Ireland - 2,453
United Arab Emirates - 10,803
Saudi Arabia 675,455 731,234
44,856,194 51,914,120
=========== ===========
Liabilities 2013 2012
GBP GBP
United Kingdom 4,384,169 4,162,779
United Arab Emirates 1,648 10,503,566
Hong Kong - 2,365
USA (104) 2,925
Spain (828) -
Italy (241) -
Saudi Arabia 356,431 100,064
----------- -----------
4,741,075 14,771,699
=========== ===========
4. Exceptional Items 2013 2012
GBP GBP
Payments to former Directors - 756,879
=============== =============
Payments to former Directors during the prior year included compensation
for loss of office and payments in respect of the claim by a
former Director against the Company for wrongful and unfair dismissal
which has been resolved by way of a comprehensive settlement
of all claims against the Group, including entitlement to benefits
arising from loans made by the Northacre PLC Directors Retirement
and Death Benefit Scheme to the Company. The Company agreed to
waive the former Director's loan account and also pay to him
a settlement sum. The payment of these amounts were not due until
sufficient dividends were received from The Lancasters Development.
Following sufficient receipt of The Lancasters Development dividends
all amounts due were settled during that prior year.
5. Investment Revenue 2013 2012
GBP GBP
Interest
received 20,494 7,224
Dividends received 26,557,059 1,170,000
26,577,553 1,177,224
=========== ==========
6. Other Gains 2013 2012
GBP GBP
Profit on disposal of interest in Campden
Estates Limited - 127,832
Decrease in provision for acquisition of
Templeco 643 Limited in lieu of settlement - 135,000
Decrease in provision for Northacre PLC Directors
Retirement and Death Benefit Scheme profit
share - 50,000
----------- --------
- 312,832
=============================================================== ========
7. Finance Costs 2013 2012
GBP GBP
Interest on:
Bank loans and overdrafts - 10,325
Overdue tax 272 1,028
Tax (refund)/penalties (6,490) 32,866
Other loans 2,123,645 2,010,050
---------- ----------
2,117,427 2,054,269
========== ==========
Profit/(loss) Before
8. Taxation 2013 2012
GBP GBP
Profit/(loss) before taxation is stated after
charging:
Depreciation and amounts written
off property, plant and equipment:
Owned assets 150,069 223,808
Operating lease rentals:
Land and buildings 130,663 153,699
Foreign exchange loss 75 148
======== ========
Fees payable to the Company's auditors
for:
- the audit of the Company's
annual accounts 47,054 39,344
Fees payable to the Company's auditors for
other services to the Group:
- the audit of the
Company's subsidiaries 33,680 25,906
-------- --------
Total audit fees 80,734 65,250
======== ========
Fees payable to the Company's auditors
for:
- taxation compliance
services 13,888 13,375
- other taxation
advisory services 41,113 25,311
- other services 17,260 17,054
-------- --------
Total other fees 72,261 55,740
======== ========
9. Employees 2013 2012
Number Number
The average weekly number of
employees (including Directors)
during the year was:
Office and management 14 14
Design and management 10 24
----------------------- ----------
24 38
======================= ==========
2013 2012
Staff costs for
the above employees: GBP GBP
Wages and salaries 5,839,966 3,248,121
Social security
costs 786,068 432,247
Other pension costs
- money purchase schemes 115,040 183,568
----------------------- ----------
6,741,074 3,863,936
======================= ==========
Remuneration in respect of Directors
was as follows: 2013 2012
GBP GBP
Aggregate emoluments (including
benefits in kind) 2,280,866 765,060
Consultancy fees - 375,000
Compensation for
loss of office - 65,000
Fees 186,125 60,000
----------------------- ----------
2,466,991 1,265,060
======================= ==========
Company contribution to money
purchase pension schemes 66,280 71,542
======================= ==========
Remuneration for each Director
(including benefits in kind) 2013 2012
GBP GBP
K.B. Nilsson 797,216 265,340
K. MacRae 418,150 201,436
M.K. Santilale - 361,088
M.A. AlRafi 1,120,000 60,000
M.F. Williams 65,500 30,000
E.B. Harris 66,125 30,000
J. McGivern - 317,196
----------------------- ----------
2,466,991 1,265,060
======================= ==========
Included in the prior year figures were consultancy fees of GBP375,000
which represented amounts accrued but not paid in 2012. These
amounts were paid after sufficient dividends were received from
The Lancasters Development in September 2012.
Remuneration of GBP1,120,000 (2012: GBP60,000) for Director M.A.
AlRafi is payable to MTAF Group. Remuneration of GBP66,125 (2012:
GBP30,000) for Director E.B. Harris is payable to EC Harris LLP.
The amounts above include remuneration
in respect of the highest paid Director
as follows: 2013 2012
GBP GBP
Aggregate emoluments (including
benefits in kind) 1,120,000 361,088
Company contribution to money
purchase pension scheme - 5,624
----------------------- ----------
1,120,000 366,712
======================= ==========
The total emoluments of GBP1,120,000 (2012: GBP361,088) above
includes: fees of GBP120,000 and bonus of GBP1,000,000 (2012:
salary of GBP96,088; compensation for loss of office GBP65,000
and consultancy fees GBP200,000). The consultancy fees of GBP200,000
were not due till sufficient dividends from The Lancasters Development
were received.
10. Taxation 2013 2012
GBP GBP
(a) Analysis of
charge in year
Current tax:
Corporation tax credit (2,534,970) (577,204)
Adjustment in respect
of prior periods (2,297,536) -
Total current tax (4,832,506) (577,204)
================== =====================
(b) Factors affecting
the tax charge for the
year
The tax assessed for the year is lower than the standard rate
of corporation tax in the UK of 24% (2012: 26%).
The differences
are explained below:
2013 2012
GBP GBP
Profit/(loss) on ordinary
activities before tax 16,802,220 (7,865,676)
================== =====================
Profit/(loss) on ordinary activities
multiplied by the standard rate
of
corporation tax of 24% (2012:
26%) 4,032,533 (2,045,076)
Effects of:
Expenses not deductible
for tax purposes 134,847 50,391
Depreciation for the period in
excess of capital allowances 16,277 (26,331)
Dividends and distributions
received (6,373,694) (304,200)
Utilisation of tax
losses 1,630,864 1,391
Other timing differences 562,240 -
Loss carried forward - 2,323,825
Group relief - (577,204)
Consortium relief (2,538,037) -
Consortium relief in respect
of prior periods (2,297,536) -
Current tax credit for
the year (4,832,506) (577,204)
(c) Factors that may
affect future tax charges
No deferred tax asset has been recognised on losses carried forward
due to the uncertainty of the timing of taxable profits. The
total amount of the unprovided asset is GBP1,063,261 (2012: GBP4,574,968).
The standard rate of corporation tax in the UK changed to 24%
from 1(st) April 2012 and to 23% from 1(st) April 2013.
11. Profit of the Parent Company
As permitted by section 408 of the Companies Act 2006, the profit
or loss element of the Parent Company Income Statement is not
presented as part of these financial statements. The Group profit
for the financial year of GBP21,634,726(2012: loss GBP7,288,472)
includes a loss of GBP5,074,317 (2012: GBP12,629,475), which
was dealt with in the financial statements of the Company.
12. Goodwill
Group 2013 2012
GBP GBP
Cost 14,940,474 14,940,474
----------- -----------
Amortisation and impairment
At the beginning
of the year 6,933,057 6,112,014
Impairment charge for
the year - 821,043
----------- -----------
At the end
of the year 6,933,057 6,933,057
----------- -----------
Net book value 8,007,417 8,007,417
=========== ===========
The Group performs an annual goodwill impairment review in accordance with IAS 36 'Impairment of Assets' based on its cash generating units (CGUs). The CGU that has associated goodwill allocated to it is the Group as a whole. This is the smallest identifiable group of assets that generate cash inflows to which goodwill is allocated. Although the interior design business is a separate CGU goodwill was not specifically allocated to it when the goodwill arose because it was treated as an integrated business when the Group was originally restructured. The Directors consider that it is now not appropriate to allocate goodwill to this CGU.
Recoverable amount
In accordance with IAS 36 the recoverable amount of the cash generating unit is calculated, being the higher of value in use and fair value less costs to sell.
The fair value less costs to sell of the CGU is determined using cash flow projections derived from the business plan covering a five year period which has been approved by the Board. They reflect the Directors' expectations of the level and timing of revenue, expenses, working capital and operating cash flows, based on past experience and future expectations of business performance particularly future development projects.
Discount rates
The pre-tax discount rate applied to the cash flow projections are derived from the Group's weighted average cost of capital. The discount rate applied is 6% reflecting the future expected cost of capital for the Group.
Growth rates
Due to the nature of the Group's development business growth rates are not relevant. The cash flow projections assume a 100% probability of winning a level of development projects over the five years and make assumptions on the probability of achieving certain development performance fee criteria.
The business growth rates have been assumed to be nil for the Intarya interior design business.
Sensitivity analysis
The following changes in assumptions would cause the recoverable amount to fall below the current carrying value:
-- A 6.8% increase in the discount rate to 12.8% for the latter three year period
-- A 9% decrease in the development revenue cashflows over the five year period
-- A 53.4% decrease in the other interior design revenue cash flows over the five year period
Property, plant and
13. equipment
Fittings
Group Leasehold and Office Computer
Improvements Equipment Equipment Total
Cost GBP GBP GBP GBP
At 1(st) March
2011 1,115,434 252,862 489,881 1,858,177
Additions - 17,442 21,465 38,907
Disposals - (199,632) (129,577) (329,209)
-------------
At 29(th) February
2012 1,115,434 70,672 381,769 1,567,875
============= ===================== ==================== ===================
Additions - - 6,700 6,700
Disposals - - (180,000) (180,000)
At 28(th) February
2013 1,115,434 70,672 208,469 1,394,575
============= ===================== ==================== ===================
Depreciation
At 1(st) March
2011 - 212,385 394,844 607,229
Charge for
the year 123,072 15,537 85,199 223,808
Disposals - (196,183) (129,577) (325,760)
At 29(th) February
2012 123,072 31,739 350,466 505,277
============= ===================== ==================== ===================
Charge for
the year 113,605 13,904 22,560 150,069
Disposals - - (180,000) (180,000)
------------- --------------------- -------------------- -------------------
At 28(th) February
2013 236,677 45,643 193,026 475,346
============= ===================== ==================== ===================
Net Book Value
At 28(th) February
2013 878,757 25,029 15,443 919,229
============= ===================== ==================== ===================
At 29(th) February
2012 992,362 38,933 31,303 1,062,598
============= ===================== ==================== ===================
At 28(th) February
2011 1,115,434 40,477 95,037 1,250,948
============= ===================== ==================== ===================
Fittings
Company Leasehold and Office Computer
Improvements Equipment Equipment Total
Cost GBP GBP GBP GBP
At 1(st) March
2011 1,173,914 - 180,000 1,353,914
Additions - - - -
At 29(th) February
2012 1,173,914 - 180,000 1,353,914
============= =========== ========== ==========
Additions - - - -
Disposals - - (180,000) (180,000)
At 28(th) February
2013 1,173,914 - - 1,173,914
============= =========== ========== ==========
Depreciation
At 1(st) March
2011 - - 115,000 115,000
Charge for
the year 123,072 - 60,000 183,072
-------------
At 29(th) February
2012 123,072 - 175,000 298,072
============= =========== ========== ==========
Charge for
the year 113,605 - 5,000 118,605
Disposals - - (180,000) (180,000)
------------- ----------- ---------- ----------
At 28(th) February
2013 236,677 - - 236,677
============= =========== ========== ==========
Net Book Value
At 28(th) February
2013 937,237 - - 937,237
============= =========== ========== ==========
At 29(th) February
2012 1,050,842 - 5,000 1,055,842
============= =========== ========== ==========
At 28(th) February
2011 1,173,914 - 65,000 1,238,914
============= =========== ========== ==========
Included above were assets held under finance lease or hire purchase
contracts as follows:
Fittings
Group and Office Computer
Equipment Equipment Total
Cost GBP GBP GBP
At 1(st) March
2011 11,710 57,799 69,509
Disposals (9,399) (1,799) (11,198)
At 29(th) February
2012 2,311 56,000 58,311
=============== ============ =================
Additions - - -
At 28(th) February
2013 2,311 56,000 58,311
=============== ============ =================
Depreciation
At 1(st) March
2011 8,726 51,710 60,436
Charge for
the year 578 6,089 6,667
Disposals (7,050) (1,799) (8,849)
At 29(th) February
2012 2,254 56,000 58,254
=============== ============ =================
Charge for
the year 57 - 57
At 28(th) February
2013 2,311 56,000 58,311
=============== ============ =================
Net Book Value
At 28(th) February
2013 - - -
=============== ============ =================
At 29(th) February
2012 57 - 57
=============== ============ =================
At 28(th) February
2011 2,984 6,089 9,073
=============== ============ =================
Fittings
Company and Office Computer
Equipment Equipment Total
Cost GBP GBP GBP
At 1(st) March
2011 - 180,000 180,000
Additions - - -
At 29(th) February
2012 - 180,000 180,000
=============== ============ =================
Disposals - (180,000) (180,000)
At 28(th) February
2013 - - -
=============== ============ =================
Depreciation
At 1(st) March
2011 - 115,000 115,000
Charge for
the year - 60,000 60,000
At 29(th) February
2012 - 175,000 175,000
=============== ============ =================
Charge for
the year - 5,000 5,000
Disposals - (180,000) (180,000)
--------------- ------------ -----------------
At 28(th) February
2013 - - -
=============== ============ =================
Net Book Value
At 28(th) February
2013 - - -
=============== ============ =================
At 29(th) February
2012 - 5,000 5,000
=============== ============ =================
At 28(th) February
2011 - 65,000 65,000
=============== ============ =================
14. Investments
Interest in
Associated
(a) Undertaking
Group 2013 2013 2012 2012
GBP GBP GBP GBP
Cost
At 1(st) March - 300
Disposal of interest in associated
undertaking - (300)
-------------------------------------------------- -----------------------
At 28(th)
/29(th)
February - -
------------------------ -----------------------
Group's Share
of
Undistributed
Post
Acquisition
Results of
Associated
Undertaking
At 1(st) March - 41,868
Share of
undistributed
profit - -
Taxation - -
------------------------ ------------------------
- -
------------------------ -----------------------
Disposal of interest in associated
undertaking - (41,868)
28(th) /29(th)
February - -
-------------------------------------------------- -----------------------
Net Book Value
28(th) /29(th)
February - -
================================================== =======================
On 27(th) September 2011 Northacre PLC sold its 25% interest in Campden
Estates Limited for a total cash consideration of GBP170,000 resulting
in a profit on disposal of GBP127,832 (Note 6).
Available for Sale Financial
(b) Assets
Group 2013 2013 2012 2012
GBP GBP GBP GBP
At 1(st) March 40,810,580 21,205,344
Disposals - -
Increase in fair value 7,895,058 20,755,236
Dividend received (26,557,059) (1,150,000)
------------- ------------
Net movement transferred (from)/to
comprehensive income (18,662,001) 19,605,236
----------------------- -----------------
At 28(th) /29(th) February 22,148,579 40,810,580
======================= =================
Net Book Value
At 28(th) /29(th) February 22,148,579 40,810,580
======================= =================
A fair valuation exercise has been undertaken based predominantly
on the Group's expected profit from secured sales on The Lancasters
Development as at 28(th) February 2013. As at 28(th) February 2013
the Group had received GBP27,707,059 of the expected profits from
The Lancasters Development. Two further dividend payments of GBP10,000,000
and GBP5,000,000 were received after the year end on 8(th) April
2013 and 2(nd) July 2013.
(c) Other Investments
Subsidiary Associated Total
Company Undertakings Undertaking
GBP GBP GBP
Cost
At 1(st) March 2012
and 28(th) February
2013 14,492,681 - 14,492,681
============= ====================== ===========
Impairment
At 1(st) March 2012 6,485,260 - 6,485,260
Impairment in the year - - -
As at 28(th) February
2013 6,485,260 - 6,485,260
============= ====================== ===========
Net book value as at
28(th) February 2013 8,007,421 - 8,007,421
============= ====================== ===========
Net book value as at
29(th) February 2012 8,007,421 - 8,007,421
============= ====================== ===========
Company Subsidiary Associated Total
Undertakings Undertaking
GBP GBP GBP
Cost
At 1(st) March 2011 14,492,681 300 14,492,981
Disposals - (300) (300)
As at 29(th) February
2012 14,492,681 - 14,492,681
============= ====================== ===========
Impairment
At 1(st) March 2011 4,402,902 - 4,402,902
Impairment in the year 2,082,358 - 2,082,358
As at 29(th) February
2012 6,485,260 - 6,485,260
============= ====================== ===========
Net book value as at
29(th) February 2012 8,007,421 - 8,007,421
============= ====================== ===========
Net book value as at
28(th) February 2011 10,089,779 300 10,090,079
============= ====================== ===========
(d) Group Shareholdings
The Group has shareholdings in the following
companies, all incorporated in England and Wales:
Proportion
Subsidiary undertakings Holding held Nature of Business
Waterloo Investments Ordinary Development management
Limited shares 100% services
Ordinary
Intarya Limited shares 100% Interior design
Northacre Development Ordinary
Management shares 100% Development management
Services Limited services
Nilsson Architects Ordinary Design
Limited shares 100% architects
Northacre Capital Ordinary
(1) Limited shares 100% Dormant
Northacre Capital Ordinary
(3) Limited shares 100% Dormant
Northacre Capital Ordinary
(5) Limited shares 100% Property development
Northacre Capital Ordinary
(7) Limited shares 100% Dormant
Northacre Capital Ordinary
(8) Limited shares 100% Property development
Templeco 643 Ordinary
Limited shares 100% Dormant
Available for
sale financial
assets
Lancaster Gate (Hyde Ordinary
Park) Limited shares 25.1% Property development
On 22(nd) 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. At the acquisition date Templeco 643 Limited had
net liabilities at fair value of GBP4,115 resulting in goodwill
of GBP1,254,115 potentially arising on acquisition. The Company
acquired Templeco 643 Limited as settlement in lieu of the loan
arrangement agreement to share in profits of The Abingdons Partnership.
In accordance with the share purchase agreement the date of acquisition
is the date the final payment of the consideration is made which
is also the date at which control of Templeco 643 Limited passed
to the Company. In the financial statements to 28(th) February
2010 the full consideration of GBP1,250,000 was expensed in the
Consolidated Statement of Comprehensive Income as, based on the
fair value of the net liabilities acquired, it was not considered
to have any ongoing value to the Company.
On 31(st) January 2012 a Deed of Variation reduced the final consideration
to GBP1,115,000 with the resulting GBP135,000 adjustment being
included in the consolidated financial statements for the year
ended 29(th) February 2012.
The final payment of the consideration was made on 17(th) July
2012 and at that date the issued share capital of Templeco 643
Limited was transferred to the Company and control passed to the
Company. At that date the fair value of the net assets of Templeco
643 Limited were nil. There have been no transactions in Templeco
643 Limited in the period 17(th) July 2012 to 28(th) February 2013
and the Directors have applied to strike off Templeco 643 Limited.
As a result there are no balances or transactions to be included
in the Group financial statements for the year ended 28(th) February
2013.
The following subsidiary undertakings were struck off on 14(th)
August 2012 as there had been no trading activity during the prior
and current reporting periods:
Northacre Capital (2) Limited
Northacre Capital (6) Limited
Northacre Residential Limited
Nilsson Design
Limited
Northacre Land
Limited
Northacre Holdings
Limited
Northacre Design Limited
Northacre Capital Limited
Northcare Management Limited
Northcare Management Services Limited
Lifestyles (Interiors) Limited
15. Inventories Group
2013 2012
GBP GBP
Stock 1,316 -
Work in progress 62 118,006
------------- -----------------
1,378 118,006
============= =================
The Company had no stock or work in progress in either the prior or
current reporting period.
16. Trade and other receivables Group Company
2013 2012 2013 2012
GBP GBP GBP GBP
Trade receivables 701,485 136,517 - -
Amounts owed by group
undertakings - - 339,408 7,309,782
Other receivables 3,818,280 79,831 2,853,322 79,048
Prepayments and accrued
income 65,318 782,208 26,203 23,234
---------- -------- ---------- ----------
4,585,083 998,556 3,218,933 7,412,064
========== ======== ========== ==========
At the year end there was no provision
for doubtful debts (2012: GBPnil).
17. Trade and other payables Group Company
2013 2012 2013 2012
GBP GBP GBP GBP
Trade payables 89,194 304,255 39,122 165,343
Amounts owed to group
undertakings - - 28,847,596 18,632,851
Social security and
other taxes 81,607 196,496 40,753 88,029
Other payables 16,290 1,566,810 9,522 1,451,616
Accruals and deferred
income 4,553,984 1,491,094 1,957,015 812,472
---------- ---------- ----------- -----------
4,741,075 3,558,655 30,894,008 21,150,311
========== ========== =========== ===========
18. Corporation Tax Group Company
2013 2012 2013 2012
GBP GBP GBP GBP
Corporation Tax - - - -
----- ----- ----- -----
- - - -
===== ===== ===== =====
Borrowings, including
19. lease finance Group Company
Current Liabilities 2013 2012 2013 2012
GBP GBP GBP GBP
Finance leases - 22,702 - 15,767
Other loans - 10,490,740 - -
- 10,513,442 - 15,767
============================================== =============== ======= =========
Finance leases were secured on the related assets.
Other loans represented the Eurobond loan facility as detailed in
note 1. The Eurobond loan facility was secured on all issued share
capital of Northacre Capital (5) Limited.
Borrowings, including
20. lease finance Group Company
Non-Current Liabilities 2013 2012 2013 2012
GBP GBP GBP GBP
Loan from pension
scheme - 699,602 - 699,602
- 699,602 - 699,602
==================================================== =========== ======= ===========
The loan from the pension scheme of GBP699,602 (2012: GBP699,602) in
respect of the Northacre PLC Directors Retirement and Death Benefit
Scheme was repaid on 17(th) December 2012 following a further dividend
distribution from The Lancasters Development. The total amount repaid
including interest was GBP711,300.
As at 28(th) February 2013 the Group and Parent Company had no obligations
under finance leases that were secured on related assets as set out
below:
Group Company
2013 2012 2013 2012
Gross amounts payable: GBP GBP GBP GBP
Within one year - 22,702 - 15,767
- 22,702 - 15,767
---------------------------------------------------- ---------- ------ ----------
Less: finance charges allocated
to future periods - (9,457) - (6,372)
- 13,245 - 9,395
==================================================== ========== ====== ==========
21. Provisions for other liabilities Group Company
2013 2012 2013 2012
GBP GBP GBP GBP
Loan settlement costs and profit
share payable
At 1(st) March - 2,350,000 - 2,020,000
Payment in year - (625,000) - (437,500)
Write back of provision
in year - (185,000) - (144,500)
Transfer to current liabilities:
trade and other payables - (1,540,000) - (1,438,000)
------------- -------------- ------ -------------
At 28(th) /29(th)
February - - - -
============= ============== ====== =============
On 22(nd) 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 22(nd) June 2010 and 16(th) 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 31(st) January
2012, GBP175,000 on 30(th) March 2012, GBP150,000 on 31(st) May 2012
and the balance of GBP15,000 on 30(th) June 2012.
A provision of GBP1,200,000 (2012: GBP1,200,000) which was transferred
to current liabilities: trade and other payables, represented 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 represented the maximum possible profit share and was paid
on 30(th) November 2012 from dividends received from The Lancasters
Development.
22. Future financial commitments
Operating Leases Group Company
2013 2012 2013 2012
GBP GBP GBP GBP
Land & Land & Land & Land &
Buildings Buildings Buildings Buildings
Net amount payable on operating
leases which expire:
Within one year 147,975 147,777 147,975 147,777
In two to five years 591,900 591,900 591,900 591,900
In over five years 478,790 626,765 478,790 626,765
----------- ----------- ----------- -----------
1,218,665 1,366,442 1,218,665 1,366,442
=========== =========== =========== ===========
Group Company
Operating Leases 2013 2012 2013 2012
GBP GBP GBP GBP
Other Other Other Other
Net amount payable on operating
leases which expire:
Within one year 34,077 35,247 12,920 12,920
In two to five years 58,588 92,665 32,300 45,220
In over five years - - - -
92,665 127,912 45,220 58,140
======= ======== ======= =======
23. Capital Commitments
At the reporting date there were no outstanding commitments for
capital expenditure.
Earnings per
24. Share
Profit per share of 80.96p (2012: loss 27.27p) is calculated on
the profit attributable to Ordinary shares of GBP21,634,726 (2012:
loss GBP7,288,472) divided by the weighted number of Ordinary shares
in issue during the period.
Computation of basic
earnings per share: 2013 2012
Net profit/(loss) GBP21,634,726 (GBP7,288,472)
Weighted average number of shares
outstanding 26,723,643 26,723,643
Basic loss per share 80.96p (27.27)p
Diluted loss per share 80.96p (27.27)p
There were no potentially dilutive instruments in issue during the
current or preceding year. All amounts shown relate to continuing
operations.
25. Share Capital 2013 2012
GBP GBP
Called up, allotted and
fully paid:
26,723,643 Ordinary shares
of 2.5p each 668,091 668,091
Nil 'A' shares
of 2.5p each - -
-------- --------
668,091 668,091
======== ========
26. Contingent Liabilities
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 GBPnil (2012: GBP123,804).
27. Related Party Transactions
Group
The Group's related parties as defined by International Accounting
Standard 24 (revised), the nature of the relationship and theamount
of transactions
with them during the period were as
follows:
Nature
of 2013 2012
Nature of
Related Party Relationship GBP GBP GBP GBP Transactions
Total Balance Total Balance
transactions at the transactions at the
in the year in the year
year end year end
Northacre Management fee
PLC 1 - - (3,000) 3,000 receivable
Directors
Retirement
and from the Scheme
Death Benefit
Scheme
Northacre Loan repayable
PLC 1 699,602 - 50,398 (699,602) to the Scheme
Directors
Retirement by Northacre PLC.
and Loan was repaid
Death Benefit on 27th December
Scheme 2012
Northacre
PLC
Directors
Retirement
and Death Interest payable
Benefit Scheme 1 24,859 - 98,883 - to the Scheme on
the loan to
Northacre
PLC. All
interest was paid
on 27(th) December
2012
Northacre Disbursements paid
PLC 1 - - (108,465) - by Northacre
Directors
Retirement PLC on behalf of
and the Scheme
Death Benefit
Scheme
Provision in
Northacre respect
PLC 1 1,200,000 - 50,000 (1,200,000) of profit share
Directors to the Scheme in
Retirement relation to the
and sale
of Group's
Death Benefit interests
Scheme in The
Abingdons
Partnership.
The profit share
was paid on 30(th)
November 2012
Amount owed to
K.B. Nilsson 2 - - 140,617 - K.B. Nilsson from
Northacre PLC.
The loan was repaid
on 31(st) October
2011
Interest payable
K.B. Nilsson 2 - - (23,498) - to K.B Nilsson
on the loan to
Northacre PLC.
The interest was
paid on 31(st)
October 2011
K.B. Nilsson
provided
K.B. Nilsson 2 - - - - a
personal guarantee
for GBP570,000
to the Group's
bankers as security
in respect of all
liabilities of
the Group to the
bank. The guarantee
was released on
7(th) November
2011
Non-executive
Directors
E.B. Harris 3 66,125 (30,000) 20,000 (30,000) fees for
March 2012 -
February
2013 invoiced from
E.C. Harris LLP
Non-executive
Directors
M. Williams 4 65,500 (5,000) (30,000) - fees for
March 2012 -
February
2013
Loan repayable
M.A. AlRafi 5 - - 300,000 - to MTAF Group
(M.A. AlRafi) by
Northacre PLC.
Loan was repaid
on 31(st) October
2011
Interest payable
M.A. AlRafi 5 - - (19,889) - to MTAF Group
(M.A. AlRafi)on
the GBP300,000
loan
to Northacre PLC.
Interest was paid
on 31(st) October
2011
Premium paid on
M.A. AlRafi 5 - - (390,000) - the early
redemption of the
GBP300,000 loan
to Northacre PLC.
Premium was paid
on 31(st) October
2011
Executive Directors
M.A. AlRafi 5 120,000 - (60,000) - fees for
March 2012 - February
2013
Loan repayable
M.A. AlRafi 5 - - 350,000 - to MTAF Group
(M.A. AlRafi) by
Northacre PLC
Including a GBP50,000
fixed premium.
Loan was repaid
on 31(st) October
2011
Interest payable
M.A. AlRafi 5 - - (23,493) - to MTAF Group
(M.A. AlRafi) on
the GBP350,000
loan
to Northacre PLC.
Interest was paid
on 31(st) October
2011
Premium paid on
M.A. AlRafi 5 - - (260,000) - the early
redemption of the
GBP350,000 loan
to Northacre PLC.
Premium was paid
on 31(st) October
2011
Bonus of GBP1,000,000
M.A. AlRafi 5 1,000,000 (975,000) - - is payable from
The Lancasters
Development dividends.
GBP25,000 was paid
on 28(th) November
2012 and the balance
of GBP975,000 will
be paid after the
year end
Loan repayable
A. AlRafi 6 - - (3,200,000) - to A. AlRafi
by Northacre PLC.
Loan was repaid
on 31(st) October
2011
Interest payable
to A. AlRafi on
A. AlRafi 6 - - (631,169) - the
GBP800,000 loan
to Northacre PLC.
Interest was paid
on 31(st) October
2011
Nature of Relationships
K.B. Nilsson is a trustee and beneficiary of the Northacre PLC Directors
1 Retirement and Death Benefit Scheme.
K.B. Nilsson is a Director
2 of the Company.
E.B. Harris is a Director of the Company,
3 and a member of E.C. Harris LLP.
M. Williams was a Director of the Company
4 (resigned on 27(th) March 2013).
M.A. AlRafi was a Director of the Company
5 (resigned on 25(th) June 2013).
A. AlRafi is the father
6 of M.A. AlRafi.
Company
The Directors' and pension fund transactions in the Company are included
in the Group disclosure above. In addition to these, the Company has
the following related party transactions as defined by International
Accounting Standard 24 (revised).
Nature
of 2013 2012
Nature of
Related Party Relationship GBP GBP GBP GBP Transactions
Total Balance Total Balance
transactions at the transactions at the
in the year in the year
year end year end
Management Fees
Group entities 1 264,931 - 321,357 - receivable
in year from
Group
subsidiaries
provided at
arm's length
Management Fees
Group entities 1 (51,372) - (30,417) - payable in
year to Group
subsidiaries
provided at
arm's length
Nature of Relationships
The Group entities are wholly
1 owned subsidiaries of the Company.
The balances at the reporting date are shown under notes 16 and 17 of
the consolidated financial statements.
28. Events after the Reporting Date
On 8(th) April 2013 Northacre PLC received a fifth distribution of GBP10,000,000 from The Lancasters Development with a further GBP5,000,000 received on 2(nd) July 2013. Together with the previous distributions of GBP27,707,059 the Group has received to date GBP42,707,059 of the total expected profits from The Lancasters Development.
On 17(th) January 2013, Spadille Limited announced a mandatory cash offer to acquire the entire issued and to be issued share capital of Northacre PLC, the full terms and conditions of which and the procedures for acceptance were set out in the offer document posted to Northacre Shareholders on 7(th) February 2013. On 15(th) February 2013, Spadille Limited announced that the offer was wholly unconditional. On 1(st) March 2013, Spadille Limited announced that the offer would remain open for acceptances until 1.00 p.m. (London time) on 14(th) March 2013. On 15(th) March 2013 the Group announced that the offer was no longer open for further acceptances. Together with the 13,365,000 Northacre PLC shares acquired by Spadille Limited prior to 15(th) February 2013, the number of Northacre PLC shares acquired by Spadille Limited or for which valid acceptances had been received by Spadille Limited before 14(th) March 2013 is 17,861,400 Northacre PLC shares, representing 66.84 per cent of Northacre's PLC issued share capital.
On 19(th) June 2013 the Group announced that Ken MacRae had resigned as Chief Executive Officer and Finance Director of Northacre PLC.
On 25(th) June 2013 the Group announced that Mohamed AlRafi had resigned as a Director of Northacre PLC.
On 27(th) June 2013 the Group announced that it has entered into a consultancy agreement with ADCM under which ADCM will provide a range of advice, analysis and management support services to the Company. ADCM will also seek to introduce the Company to its network of real estate finance and development professionals, investors, and actively seek to source new opportunities for the Company across local and wider markets. Under the terms of the seven-year agreement, which the Company may terminate at each anniversary date, the Company shall pay to ADCM an annual fee of GBP1.2 million and ADCM shall be entitled to receive a fee of 35% of profits earned by the Company as a result of engagements entered into during the term of the agreement. Any profits arising in relation to The Lancasters Development are specifically excluded from this fee arrangement. Jassim Alseddiqi and Mustafa Kheriba, both Directors of the Company, are deemed to be related parties of ADCM and the Company.
On 3(rd) July 2013 the Group announced that Alexandre de Rothschild had been appointed as a Non-Executive Director of Northacre PLC.
29. Immediate and Ultimate Parent Undertakings
The immediate and ultimate parent undertakings are Spadille Limited and Abu Dhabi Capital Management LLC respectively.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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