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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 |
TIDMNTA
RNS Number : 8791L
Northacre PLC
30 April 2015
NORTHACRE PLC
(the "Company" or "Group")
Results for the period ended 31(st) December 2014
Northacre PLC is pleased to announce its financial results for the period ended 31(st) December 2014. The Annual Report and Accounts for the period then ended and Notice of the Company's Annual General Meeting, to be held at the Company's registered office at 10am on 2(nd) June 2015, 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
Niccolò Barattieri di San Pietro (Chief Executive Officer)
020 7349 8000
finnCap Limited (Nominated Adviser and Broker)
Stuart Andrews
Henrik Persson
020 7220 0500
Chairman's Statement
There is a marked slowdown of activities in the London housing market with many potential purchasers waiting for the outcome of the May 2015 elections. Despite of the results, we don't believe that there will be any radical changes to the market's perception of London as the number one city in the world as a destination for ultra-high net worth individuals.
The London property market has a tendency to adjust itself and absorb whatever changes there may be, if any.
There is the inevitable pause in the London housing market as many potential purchasers await the outcome of the 2015 election. Irrespective of the results of the election, we do not believe that there will be a radical change in the market perception of London as the number one city in the world, a destination for ultra-high net worth individuals. The London residential market has historically adjusted itself and absorbed the various changes brought about by different governments.
The housing debate is steadily rising up the UK political agenda, and will continue to be a key issue. The construction of new homes at an affordable level will be at the forefront of future government programmes, and is likely to affect the attitude of the planning authorities towards the development of private housing for sale at the upper end of the market. The current re-focusing of the market towards the private rented sector could, however, open up further opportunities for companies prepared to invest in well-conceived and properly governed models for rental housing at both ends of the scale.
Klas Nilsson
Non-Executive Chairman
Date: 30(th) April 2015
Chief Executive's Statement
The last ten months have seen Northacre PLC make good progress across all of our developments. We have also strategically rebranded our interior design business which is now called "N Studio", which signifies a more sophisticated approach intended to reflect and capture the increasingly discerning taste of high net worth individuals and our target market.
Current developments
1 Palace Street
We have been making steady progress throughout the period and every milestone has been achieved in accordance with our programme. On 11(th) November 2014 we received planning consent for our revised scheme and by 30(th) November 2014 we were already onsite starting the strip-out and demolition phase.
Vicarage Gate House
The complications we have encountered with the windows have escalated and this has caused delay to our practical completion date which has now been moved to mid-October 2015. The vast majority of the windows have now been installed hence the rest of the fit-out can move forward at a much faster pace.
In respect of sales throughout the period, we have exchanged on five units. We are seeing more appetite from buyers as they can now get a much better feel for the development and the overall quality we are producing.
33 Thurloe Square
As highlighted in my statement last year, prior to starting the redevelopment of this site we received an unsolicited bid of GBP12.75m representing a significant premium to the market value of similar properties in similar condition. The transaction was completed on 25(th) June 2014 and resulted in a net IRR of over 30% to our investors and a substantial return for Northacre PLC in terms of development management fees, performance fee and return on our invested equity.
13&14 Vicarage Gate
The last few months have seen significant progress on-site. All the structural alterations have been completed and the partition walls are mostly in place. We are expecting to have practical completion by January 2016.
On the sales front we will do a soft launch in June 2015 which will then become more proactive once the show apartment is ready at the end of August 2015.
Chester Square (with mews at the rear)
We have received planning approval for the creation of a basement and also to interconnect the two properties. The basement contractor has been selected and will be onsite as soon as all the preconditions have been discharged. The project is progressing well towards implementing our plans.
22 Prince Edward Mansions
On 1(st) August 2014 we announced the completion of the acquisition of 22 Prince Edward Mansions by Northacre Capital (7) Limited, a wholly owned subsidiary of Northacre PLC. The unit was purchased in keeping with our new strategy for N Studio, and for the purpose of refurbishment and resale.
We are currently onsite and expect to reach practical completion by the end of 2015.
The Lancasters
The freehold interest in the property has now been transferred to the residents. We are in the process of finalising the last outstanding item which we hope to complete by the end of summer 2015.
Outlook
As a result of the upcoming general election in May 2015 the market in general has been quiet as expected. Nevertheless, it has been interesting to see that the market has become more selective and has been rewarding premium properties which satisfy all the requirements of buyers. On the other hand less impressive properties have struggled to sell. We believe that this trend will continue as buyers become more selective.
At Northacre, our differentiating value-add is the quality of our work and attention to detail which places our final product ahead of the crowd. We hope to continue to see ourselves as market leaders in the coming years.
Niccolò Barattieri di San Pietro
Chief Executive Officer
Date: 30(th) April 2015
Financial Review
In the period under review our development management team was engaged on various projects including Vicarage Gate House, 1 Palace Street, 33 Thurloe Square, 13 & 14 Vicarage Gate and Chester Square. Increased activity on all of these projects was reflected in the results for the period to 31(st) December 2014.
Consolidated Income Statement
Group revenue for the period increased to GBP3.9m (28(th) February 2014: GBP3.0m), which reflected increased activity on the project development side of the business and a lower level of activity in N Studio, the Group's interior design business. Development management fee income increased to GBP3.6m (28(th) February 2014: GBP1.0m) while N Studio's revenue fell by 89% to GBP0.2m (28(th) February 2014: GBP2.0m). Between October 2014 and February 2015 N Studio rebranded and we expect increased activity in the coming years.
Administrative expenses decreased to GBP4.4m (28(th) February 2014: GBP4.9m) reflecting the shorter 10 months financial period.
On 25(th) June 2014 the Group announced the sale of the 33 Thurloe Square project. Under the terms of the Development Management Agreement Northacre PLC was entitled to development management and performance fees which are included in the revenue above. The Group was also entitled to a return on the invested equity of GBP1.5m and dividends received of GBP0.4m (28(th) February 2014: The Lancasters dividends GBP15.0m) are recognised as investment revenue in the Consolidated Income Statement.
The Group reported a loss before tax of GBP1,858 (28(th) February 2014: profit before tax GBP12.3m).
Consolidated Statement of Financial Position
As at 31(st) December 2014 the Group had cash and cash equivalents of GBP2.5m (28(th) February 2014: GBP21.2m). The decrease in cash held was primarily due to dividends paid of GBP15.0m, the additional investment of GBP1.2m in available for sale financial assets being the 1 Palace Street Development and the GBP4.2m purchase and associated development costs of 22 Prince Edward Mansions.
Financing
On 19(th) September 2014 a loan facility of GBP3.2m was made available by the Royal Bank of Scotland in respect of the property at 22 Prince Edward Mansions. The loan is available on a drawdown basis and incurs interest at 3.25% above the LIBOR rate. The loan is due to be repaid the earlier of the latest expiry date of the current interest period outstanding as at the date of completion of sale of the property or the date which falls 18 months after the date on which the loan is drawn. As at 31(st) December 2014 GBP1.0m was drawn. The loan is expected to be repaid in full prior to the end of the next financial year.
In the next financial year, the Group will focus on progressing and completing current projects while looking for new exciting opportunities.
Kasia Maciborska-Singh
Group Financial Controller
Consolidated Income Statement
For the 10 months ended 31(st) December 2014
Note 10 months 12 months ended ended 31(st) 28(th) Dec Feb 2014 2014 GBP GBP Group Group revenue 3 3,856,841 2,955,797 Cost of sales 25,092 (1,294,225) ------------ ------------ Gross profit 3,881,933 1,661,572 Administrative expenses (4,377,515) (4,868,726) Group loss from operations (495,582) (3,207,154) Investment revenue 4 493,727 15,063,052 Profit on disposal of available for sale financial assets 5 - 111,213 Other gains 6 - 336,264 Finance costs 7 (3) (100) (Loss)/Profit for the year before taxation 8 (1,858) 12,303,275 Taxation 10 266,095 (102,993) ------------ ------------ Profit for the year attributable to equity holders of the Company 264,237 12,200,282 ============ ============ Profit per Ordinary share Basic - Continuing and total operations 22 0.62p 39.51p Diluted - Continuing and total operations 22 0.62p 39.51p Company Profit for the year attributable to equity holders of the Company 5,402,344 44,703,358 ========== ===========
Consolidated Statement of Comprehensive Income
For the 10 months ended 31(st) December 2014
Note 10 months 12 months ended ended 31(st) 28(th) Dec Feb 2014 2014 GBP GBP Group Profit for the period attributable to equity holders of the Company 264,237 12,200,282 ---------- ------------- Other comprehensive loss: Changes in fair value of available for sale financial assets 14(a) - (15,000,000) ---------- ------------- Total comprehensive income/(loss) for the period 264,237 (2,799,718) ========== ============= Company Profit for the period attributable to equity holders of the Company 5,402,344 44,703,358 ---------- ----------- Other comprehensive income - - ---------- ----------- Total comprehensive profit for the period 11 5,402,344 44,703,358 ========== ===========
Consolidated Statement of Financial Position
As at 31(st) December 2014
31(st) 28(th) Dec Feb Note 2014 2014 GBP GBP Non-current assets Goodwill 12 8,007,417 8,007,417 Property, plant and equipment 13 721,525 822,739 Available for sale financial assets 14(a) 10,000,019 8,824,659 ----------- ----------- 18,728,961 17,654,815 ----------- ----------- Current assets Inventories 15 4,192,123 168,559 Trade and other receivables 16 787,210 6,667,711 Cash and cash equivalents 2,510,305 21,239,909 ----------- ----------- 7,489,638 28,076,179 ----------- ----------- Total assets 26,218,599 45,730,994 Current liabilities Trade and other payables 17 838,384 6,615,535 Borrowings, including lease finance 18 1,000,000 - ----------- ----------- 1,838,384 6,615,535 ----------- ----------- Non-current liabilities Borrowings, including lease finance - - - - ----------- ----------- Total liabilities 1,838,384 6,615,535 ----------- ----------- Equity Share capital 23 1,058,388 1,058,388 Share premium account 23 22,565,286 22,565,286 Merger reserve 23 - 8,086,293 Retained earnings 756,541 7,405,492 ----------- ----------- Total equity 24,380,215 39,115,459 ----------- ----------- Total equity and liabilities 26,218,599 45,730,994 Approved by the Board on 30(th) April 2015 N. Barattieri di San Pietro.................................................
Director
Company registration no. 03442280
Company Statement of Financial Position
As at 31(st) December 2014
31(st) 28(th) Dec Feb Note 2014 2014 GBP GBP Non-current assets Property, plant and equipment 13 728,963 823,633 Investments 14(b) 18,006,328 16,830,968 --------------- --------------- 18,735,291 17,654,601 --------------- --------------- Current assets Trade and other receivables 16 8,999,218 10,110,093 Cash and cash equivalents 1,036,842 18,808,382 --------------- --------------- 10,036,060 28,918,475 --------------- --------------- Total assets 28,771,351 46,573,076 Current liabilities Trade and other payables 17 1,576,073 9,780,661 Borrowings, including lease finance 18 - - --------------- --------------- 1,576,073 9,780,661 --------------- --------------- Non-current liabilities Borrowings, including lease finance - - - - --------------- --------------- Total liabilities 1,576,073 9,780,661 --------------- --------------- Equity Share capital 23 1,058,388 1,058,388 Share premium account 23 22,565,286 22,565,286 Merger reserve 23 - 8,086,293 Retained earnings 3,571,604 5,082,448 --------------- --------------- Total equity 27,195,278 36,792,415 --------------- --------------- Total equity and liabilities 28,771,351 46,573,076 Approved by the Board on 30(th) April 2015 N. Barattieri di San Pietro.................................................
Director
Company registration no. 03442280
Consolidated and Company Statements of Cash Flows
For the 10 months ended 31(st) December 2014
Group Company 10 months 12 months 10 months 12 months ended ended ended ended 31(st) 28(th) 31(st) 28(th) Dec 2014 Feb 2014 Dec 2014 Feb 2014 GBP GBP GBP GBP Cash flows from operating activities (Loss)/profit for the period before tax (1,858) 12,303,275 5,350,239 44,227,761 Adjustments for: Investment revenue (493,727) (15,063,052) (7,763,727) (42,756,665) Finance costs 3 100 - - Loss on disposal of investments - 1,108 - 1,108 Goodwill on acquisition less stamp duty paid - (368,287) - - Profit on sale of available for sale financial assets - (111,213) - - Fair value adjustment - (7,148,575) - - Depreciation and amortisation 125,037 148,181 94,670 113,604 Increase in inventories (4,023,564) (13,748) - - Decrease/(increase) in trade and other receivables 5,893,986 (4,834,599) 326,464 (8,849,164) (Decrease)/increase in trade and other payables (5,790,636) 5,350,579 (8,166,245) (21,055,109) ------------- ------------- ------------- ------------- Cash used in operations (4,290,759) (9,736,231) (10,158,599) (28,318,465) Interest paid (3) (100) - - Corporation tax - consortium relief refunded 266,095 3,292,776 798,173 2,375,362 ------------- ------------- ------------- ------------- Net cash used in operating activities (4,024,667) (6,443,555) (9,360,426) (25,943,103) ------------- ------------- ------------- ------------- Cash flows from investing activities Purchase of property, plant & equipment (23,823) (51,691) - - Increase in available for sale financial assets/investments (1,175,360) (8,824,655) (1,175,360) (8,824,655) Acquisition of subsidiary, net of cash acquired - 10,502,191 - - Interest received 64,854 63,052 64,854 49,606 Dividends received 428,873 15,000,000 7,698,873 42,707,059 ------------- ------------- ------------- ------------- Net cash (used in)/generated from investing activities (705,456) 16,688,897 6,588,367 33,932,010 ------------- ------------- ------------- ------------- Cash flows from financing activities Proceeds from issue of shares - 12,489,516 - 12,489,516 Proceeds from borrowings 1,000,000 - - - Repayment of borrowings - - - - Repayment of finance leases - - - - Dividends paid (14,999,481) (10,689,457) (14,999,481) (10,689,457) ------------- ------------- ------------- ------------- Net cash (used in)/generated from financing activities (13,999,481) 1,800,059 (14,999,481) 1,800,059 ------------- ------------- ------------- ------------- (Decrease)/increase in cash and cash equivalents (18,729,604) 12,045,401 (17,771,540) 9,788,966 Cash and cash equivalents at the beginning of the period 21,239,909 9,194,508 18,808,382 9,019,416 ------------- ------------- ------------- ------------- Cash and cash equivalents at the end of the period 2,510,305 21,239,909 1,036,842 18,808,382 ============= ============= ============= =============
Consolidated and Company Statements of Changes in Equity
For the 10 months ended 31(st) December 2014
Called Up Share Share Premium Merger Retained Group Capital Account Reserve Earnings Total GBP GBP GBP GBP GBP As at 1(st) March 2013 668,091 18,552,361 - 20,894,667 40,115,119 Profit for the period - - - 12,200,282 12,200,282 Other comprehensive loss for the period: Changes in fair value of available for sale financial assets - - - (15,000,000) (15,000,000) Transactions with owners of the Company: Issue of Ordinary shares 390,297 4,012,925 8,086,293 - 12,489,515 Dividends - - - (10,689,457) (10,689,457) As at 28(th) February 2014 1,058,388 22,565,286 8,086,293 7,405,492 39,115,459 ========== =========== ============ ============= ============= As at 1(st) March 2014 1,058,388 22,565,286 8,086,293 7,405,492 39,115,459 Profit for the period - - - 264,237 264,237 Transactions with owners of the Company: Dividends - - (8,086,293) (6,913,188) (14,999,481) ---------- ----------- ------------ ------------- ------------- As at 31(st) December 2014 1,058,388 22,565,286 - 756,541 24,380,215 ========== =========== ============ ============= ============= Called Up Share Share Premium Merger Retained Company Capital Account Reserve Earnings Total GBP GBP GBP GBP GBP As at 1(st) March 2013 668,091 18,552,361 - (28,931,453) (9,711,001) Total comprehensive profit for the period - - - 44,703,358 44,703,358 Transactions with owners of the Company: Issue of Ordinary shares 390,297 4,012,925 8,086,293 - 12,489,515 Dividends - - - (10,689,457) (10,689,457) As at 28(th) February 2014 1,058,388 22,565,286 8,086,293 5,082,448 36,792,415 ========== =========== ============ ============= ============= As at 1(st) March 2014 1,058,388 22,565,286 8,086,293 5,082,448 36,792,415 Total comprehensive profit for the period - - - 5,402,344 5,402,344 Transactions with owners of the Company: Dividends - - (8,086,293) (6,913,188) (14,999,481) ---------- ----------- ------------ ------------- ------------- As at 31(st) December 2014 1,058,388 22,565,286 - 3,571,604 27,195,278 ========== =========== ============ ============= =============
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014
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 Company and its subsidiaries have shortened their reporting periods to 31(st) December 2014 to be co-terminous with the ultimate parent undertaking Abu Dhabi Financial Group Limited. The amounts presented in the financial statements for the period ended 31(st) December 2014 are thus not entirely comparable to the comparative amounts.
During the period ended 31(st) December 2014 the Group adopted a number of new IFRS standards, interpretations, amendments and improvements to existing standards. These included IFRS10, IFRS11, IFRS12, IFRS13 and IAS1. These new standards and changes did not have any material impact on the Company's financial statements.
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) January 2015, but are not currently considered to be relevant to the Group (although they may affect the accounting for future transactions and events):
-- 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.
-- IAS 19 (Revised), 'Employee Benefits' effective for periods beginning on or after 1(st) July 2014. 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.
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1(st) January 2015 and have not been early adopted:
-- IFRS9, 'Financial Instruments', effective for periods commencing on or after 1(st) January 2018 but not yet adopted by the EU. This is the second and third phases of the project to replace IAS39 'Financial Instruments: Recognition and Measurement'.
-- IFRS15, 'Revenue from Contracts with Customers', effective for periods commencing on or after 1(st) January 2017 but not yet adopted by the EU. This standard replaces IAS18, 'Revenue Recognition' and revenue recognition standards under US GAAP and aims to unify revenue recognition under IFRS and US GAAP. The standard focuses on entitlement to consideration as opposed to percentage completion under existing IFRS and introduces a five step approach to recognising income.
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 fees receivable from its projects: Vicarage Gate House, 13-14 Vicarage Gate, 1 Palace Street and Chester Square and also through the bank loan.
The Directors have prepared detailed cash flow projections for the period ending 31(st) December 2019 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 on-going 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
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
1. Principal accounting policies (continued)
Basis of consolidation
The Group financial statements include the financial statements of the Company and its subsidiary undertakings. Subsidiary undertakings are all entities over which the Group has the power to govern the financial and operating policies of the subsidiary and therefore exercises control. The existence and effect of both current voting rights and potential voting rights that are currently exercisable or convertible are considered when assessing whether control of an entity is exercised. Subsidiaries are consolidated from the date at which the Group obtains the relevant level of control and are de-consolidated from the date at which control ceases.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Property, plant and equipment
Property, plant and equipment are stated at historical cost, net of any depreciation and any provision for impairment.
Depreciation has been calculated on a straight line basis and aims to write off the costs, less estimated residual value of each property, plant and equipment over their expected useful lives using the following periods:
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 performance fees are recognised when the amounts involved have been finally determined and agreed criteria for recognition have been fulfilled. 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.
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
1. Principal accounting policies (continued)
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
Investments in subsidiaries, associates and joint ventures, and other investments are presented in the Parent financial statements at cost, less any necessary provision for impairment.
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 or limited partnerships 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. In cases where the Group can reliably estimate fair value of the available for sale financial assets, fair value will be determined in reference to practical completion of each development project.
All assets for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
-- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
-- Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The valuation technique applied to the available for sale financial assets in the current and preceding period is a Level 3 technique.
Pensions
The Group operates a defined contribution pension scheme under which fixed contributions are payable. Pension costs charged to the income statement represent amounts payable to the scheme during the year.
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.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are charged to the share premium account.
Equity balances
-- Called up share capital represents the aggregate nominal value of ordinary shares in issue.
-- The share premium account represents the incremental paid up capital above the nominal value of ordinary shares issued.
-- The merger reserve represents the excess over nominal value of the fair value of consideration received for equity shares issued directly to acquire another entity meeting the specific requirements of section 612 of the Companies Act 2006.
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.
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
1. Principal accounting policies (continued)
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.
Borrowing costs which relate directly to a development which is included within inventories are capitalised as part of the cost of the inventory.
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 consists of cash and cash equivalents, debt 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 minimise net debt whilst investing in the development opportunities.
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. Directors are 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.
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
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 10 months 12 months ended ended 31(st) 28(th) Dec 2014 Feb 2014 Principal activities: GBP GBP Development management 3,554,800 900,705 Interior design 214,541 1,991,837 Architectural design 87,500 63,255 ----------- -------------------- 3,856,841 2,955,797 =========== ==================== 10 months 12 months ended ended (Loss)/profit 31(st) 28(th) before taxation Dec 2014 Feb 2014 GBP GBP Development management 505,910 12,364,592 Interior design (585,943) (105,086) Architectural design 78,175 43,769 ----------- -------------------- (1,858) 12,303,275 =========== ==================== 31(st) 28(th) Assets Dec 2014 Feb 2014 GBP GBP Development management 26,017,628 45,138,754 Interior design 86,839 454,183 Architectural design 114,132 138,057 ----------- -------------------- 26,218,599 45,730,994 31(st) 28(th) Liabilities Dec 2014 Feb 2014 GBP GBP Development management 365,962 5,259,612 Interior design 769,522 550,923 Architectural design 702,900 805,000 ----------- -------------------- 1,838,384 6,615,535 =========== ==================== A geographical analysis of the Group's revenue, assets and liabilities is given below: 10 months 12 months ended ended 31(st) 28(th) Revenue Dec 2014 Feb 2014 GBP GBP United Kingdom 3,880,379 2,536,571 Saudi Arabia (23,538) 396,162 USA - 23,064 3,856,841 2,955,797 =========== ==================== Included in the revenue above are revenues in respect of customers who account for over 10% of the Group's total revenue. 10 months 12 months ended ended 31(st) 28(th) Dec 2014 Feb 2014 GBP GBP Customer A (Interior design) (23,538) 396,162 Customer B (Development management) 642,486 - Customer C (Interior design) - 707,113 Customer D (Development management & interior design) 438,462 326,669 Customer E (Interior design) - 422,206 Customer F (Development management) 2,420,487 509,783 =========== ====================
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
Segmental information 3. (continued) 31(st) 28(th) Dec Feb Assets 2014 2014 GBP GBP United Kingdom 26,218,599 45,618,042 Saudi Arabia - 112,952 26,218,599 45,730,994 =========== =========== 31(st) 28(th) Dec Feb Liabilities 2014 2014 GBP GBP United Kingdom 1,838,384 6,544,924 Saudi Arabia - 70,611 ----------- ----------- 1,838,384 6,615,535 =========== =========== 4. Investment revenue 10 months 12 months ended ended 31(st) 28(th) Dec 2014 Feb 2014 GBP GBP Interest received 64,854 63,052 Dividends received 428,873 15,000,000 493,727 15,063,052 ========== =========== 5. Profit on disposal of available for sale financial assets 10 months 12 months ended ended 31(st) 28(th) Dec 2014 Feb 2014 GBP GBP Derecognition of available for sale financial assets - (7,148,575) Change in fair value of available for sale financial assets previously recognised in Other Comprehensive Income - 7,259,788 - 111,213 ============ ============
The profit on disposal of available for sale financial assets arose following the acquisition of Lancaster Gate (Hyde Park) Limited on 16(th) December 2013. The loss of GBP7.1m represented all gains recognised and booked to Other Comprehensive Income up to the time of derecognition of available for sale financial assets, as these gains are required to be transferred to the Consolidated Income Statement after the available for sale financial assets have been sold.
6. Other gains 10 months 12 months ended ended 28(th) 31(st) Feb Dec 2014 2014 GBP GBP Written off share capital of dissolved dormant Group's subsidiaries - (1,108) Negative goodwill arising on acquisition of Lancaster Gate (Hyde Park) Limited - 337,372 - 336,264 ============ ========== 7. Finance costs 10 months 12 months ended ended 28(th) 31(st) Feb Dec 2014 2014 GBP GBP Interest on: Other interest 3 - Tax penalties - 100 ---------- ---------- 3 100 ========== ==========
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
(Loss)/Profit 8. before taxation 10 months 12 months ended ended 28(th) 31(st) Feb Dec 2014 2014 GBP GBP (Loss)/Profit before taxation is stated after charging: Depreciation and amounts written off property, plant and equipment: Owned assets 125,037 148,181 Operating lease rentals: Land and buildings 104,969 125,062 Foreign exchange loss - 41 ========== ========== Fees payable to the Company's auditors for: - the audit of the Company's annual accounts 55,857 44,446 Fees payable to the Company's auditors for other services to the Group: - the audit of the Company's subsidiaries 33,600 42,828 ---------- ---------- Total audit fees 89,457 87,274 ========== ========== Fees payable to the Company's auditors for: - taxation compliance services - 10,537 - other taxation advisory services 5,000 4,000 - other services 16,762 31,158 ---------- ---------- Total other fees 21,762 45,695 ========== ========== 9. Employees 10 months 12 months ended ended 31(st) 28(th) Dec Feb 2014 2014 Number Number The average weekly number of employees (including Directors) during the year was: Office and management 12 12 Design and management 12 11 ---------- ---------- 24 23 ========== ========== 10 months 12 months ended ended 31(st) 28(th) Dec Feb 2014 2014 Staff costs for the above employees: GBP GBP Wages and salaries 1,691,496 1,821,228 Social security costs 184,657 62,702 Other pension costs - money purchase schemes 65,344 74,068 ---------- ---------- 1,941,497 1,957,998 ========== ========== 10 months 12 months ended ended 31(st) 28(th) Remuneration in respect Dec Feb of Directors was as follows: 2014 2014 GBP GBP Aggregate emoluments (including benefits in kind) 475,000 655,264 Consultancy fees 100,050 57,150 Other fees 25,000 40,000 ---------- ---------- 600,050 752,414 ========== ========== Company contribution to money purchase pension schemes 27,500 23,354 ========== ==========
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
9. Employees (Continued) 10 months 12 months ended ended Remuneration for each 31(st) 28(th) Director (including benefits Dec Feb in kind) 2014 2014 GBP GBP M. Kheriba - - J. Alseddiqi - - N. Barattieri di San Pietro 416,667 213,000 K.B. Nilsson 158,383 127,150 E.B. Harris 25,000 30,000 M.F. Williams (resigned 27(th) March 2013) - 10,000 K. MacRae (resigned 19(th) June 2013) - 344,764 M.A. AlRafi (resigned 25(th) June 2013) - 10,000 A. de Rothschild (resigned 11(th) February 2014) - 17,500 ---------- ---------- 600,050 752,414 ========== ========== Remuneration of GBP25,000 (28(th) February 2014: GBP30,000) for Director E.B. Harris is payable to EC Harris LLP. 10 months 12 months ended ended Remuneration in respect of the 31(st) 28(th) highest paid Director was as Dec Feb follows: 2014 2014 GBP GBP Aggregate emoluments (including benefits in kind) 416,667 344,764 Company contribution to money purchase pension scheme 27,500 6,854 ---------- ---------- 444,167 351,618 ========== ========== The total emoluments of GBP416,667 (28(th) February 2014: GBP344,764) above includes compensation for loss of office of GBPnil (28(th) February 2014: GBP251,500) and bonus of GBP187,500 (28(th) February 2014: GBPnil). The Directors consider that the key management personnel for reporting purposes as defined by IAS24 'Related Party Disclosures' are the Directors themselves only. 10. Taxation 10 months 12 months ended ended 31(st) 28(th) Dec Feb 2014 2014 GBP GBP (a) Analysis of charge in year Current tax: Corporation tax credit - - Adjustment in respect of prior periods (347,727) 311,298 Total current tax (347,727) 311,298 =========== ============ Deferred tax: Deferred tax charge/(credit) 81,632 (208,305) Total deferred tax charge/(credit) 81,632 (208,305) =========== ============ Total tax (credit)/charge (266,095) 102,993 =========== ============ (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 21% (2014: 23%). The differences are explained below: 10 months 12 months ended ended 31(st) 28(th) Dec Feb 2014 2014 GBP GBP (Loss)/Profit on ordinary activities before tax (1,858) 12,303,275 ========== ============ (Loss)/Profit on ordinary activities multiplied by the standard rate of corporation tax of 21% (2014: 23%) (390) 2,829,753 Effects of: Expenses not deductible for tax purposes 2,339 19,851 Depreciation for the period in excess of capital allowances 26,258 18,919 Dividends and distributions received (90,063) (3,450,000) Utilisation of tax losses (314,450) 666,704 Other timing differences (103,709) (328,727) Loss carried forward 480,015 243,500 Consortium relief in respect of prior periods (347,727) 311,298 Current tax (credit)/charge for the period (347,727) 311,298
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
10. Taxation (continued)
(c) Factors that may affect future tax charges
The standard rate of corporation tax was reduced to 21% from 1(st) April 2014.
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 period ended 31(st) December 2014 of GBP264,237 (28(th) February 2014: GBP12,200,282) includes a profit of GBP5,402,344 (28(th) February 2014: GBP44,703,358), which was dealt with in the financial statements of the Company. 12. Goodwill 31(st) 28(th) Group Dec 2014 Feb 2014 GBP GBP Cost 14,940,474 14,940,474 ----------- ----------- Amortisation and impairment At the beginning of the year 6,933,057 6,933,057 Impairment charge for the year - - ----------- ----------- 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 CGU 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% (28(th) February 2014: 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 receiving a level of development fees 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 5% (28(th) February 2014: nil) for the N Studio Limited interior design business. Sensitivity analysis The following percentage changes in assumptions would cause the recoverable amount to fall below the current carrying value: -- A 91.5% increase in the discount rate to 97.5% for the latter five year period -- A 28% decrease in the development revenue cash flows over the five year period -- A decrease to nil in the other interior design revenue cash flows over the five year period would not cause the recoverable amount to fall below the current carrying value.
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
Property, plant 13. and equipment Fittings Group Leasehold and Office Computer Improvements Equipment Equipment Total Cost GBP GBP GBP GBP At 1(st) March 2013 1,115,434 70,672 208,469 1,394,575 Additions - 2,754 48,937 51,691 At 28(th) February 2014 1,115,434 73,426 257,406 1,446,266 ============= ===================== ========== ========== Additions - 594 23,229 23,823 At 31(st) December 2014 1,115,434 74,020 280,635 1,470,089 ============= ===================== ========== ========== Depreciation At 1(st) March 2013 236,677 45,643 193,026 475,346 Charge for the year 113,604 10,544 24,033 148,181 At 28(th) February 2014 350,281 56,187 217,059 623,527 ============= ===================== ========== ========== Charge for the year 94,670 8,922 21,445 125,037 At 31(st) December 2014 444,951 65,109 238,504 748,564 ============= ===================== ========== ========== Net book value At 31(st) December 2014 670,483 8,911 42,131 721,525 ============= ===================== ========== ========== At 28(th) February 2014 765,153 17,239 40,347 822,739 ============= ===================== ========== ========== At 28(th) February 2013 878,757 25,029 15,443 919,229 ============= ===================== ========== ========== Fittings Company Leasehold and Office Computer Improvements Equipment Equipment Total Cost GBP GBP GBP GBP At 1(st) March 2013 1,173,914 - - 1,173,914 Disposals - - - - At 28(th) February 2014 1,173,914 - - 1,173,914 ============= =========== ========== ========== Additions - - - - At 31(st) December 2014 1,173,914 - - 1,173,914 ============= =========== ========== ========== Depreciation At 1(st) March 2013 236,677 - - 236,677 Charge for the year 113,604 - - 113,604 At 28(th) February 2014 350,281 - - 350,281 ============= =========== ========== ========== Charge for the year 94,670 - - 94,670 At 31(st) December 2014 444,951 - - 444,951 ============= =========== ========== ========== Net book value At 31(st) December 2014 728,963 - - 728,963 ============= =========== ========== ========== At 28(th) February 2014 823,633 - - 823,633 ============= =========== ========== ========== At 28(th) February 2013 937,237 - - 937,237 ============= =========== ========== ==========
There were no assets held under finance lease or hire purchase contracts.
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
Available for sale financial (a) assets 14. Investments 28(th) 31(st) 31(st) 28(th) Feb Group Dec 2014 Dec 2014 Feb 2014 2014 GBP GBP GBP GBP At 1(st) March 8,824,659 22,148,579 Dividend received - (15,000,000) Derecognition - (7,148,575) Increase in 1 Palace Street fair value 1,175,360 8,824,655 ---------- ------------- Net movement transferred to/(from) comprehensive income 1,175,360 (13,323,920) ----------- ------------- At 31(st) December 2014 10,000,019 8,824,659 =========== ============= Net book value At 31(st) December 2014 10,000,019 8,824,659 =========== ============= The increase in available for sale financial assets represents the additional investment in the 1 Palace Street Development. The Company was committed to invest GBP10.0m into the 1 Palace Street Development. At 31(st) December 2014 the Company had paid the commitment. The GBP15 investment in 33 Thurloe Square represents a 15% equity stake. The 33 Thurloe Square Development was sold during the period and the GBP15 investment will be refunded in the next financial year. (b) Other investments Company Subsidiary Other Total Undertakings Investments GBP GBP GBP Cost At 1(st) March 2014 14,492,681 8,824,655 23,317,336 Additions - 1,175,360 1,175,360 As at 31(st) December 2014 14,492,681 10,000,015 24,492,696 ============== ============ ============ Impairment At 1(st) March 2014 6,486,368 - 6,486,368 Impairment in the year - - - As at 31(st) December 2014 6,486,368 - 6,486,368 ============== ============ ============ Net book value as at 31(st) December 2014 8,006,313 10,000,015 18,006,328 ============== ============ ============ Net book value as at 28(th) February 2014 8,006,313 8,824,655 16,830,968 ============== ============ ============
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
(b) Other investments (continued) Company Subsidiary Other Total Undertakings Investments GBP GBP GBP Cost At 1(st) March 2013 14,492,681 - 14,492,681 Additions - 8,824,655 8,824,655 As at 28(th) February 2014 14,492,681 8,824,655 23,317,336 ============== ============ ============ Impairment At 1(st) March 2013 6,485,260 - 6,485,260 Impairment in the year 1,108 - 1,108 As at 28(th) February 2014 6,486,368 - 6,486,368 ============== ============ ============ Net book value as at 28(th) February 2014 8,006,313 8,824,655 16,830,968 ============== ============ ============ Net book value as at 28(th) February 2013 8,007,421 - 8,007,421 ============== ============ ============ (c) Group shareholdings The Group has shareholdings in the following companies, all incorporated in England and Wales: Subsidiary Proportion undertakings Holding held Nature of Business Waterloo Investments Ordinary Development Limited shares 100% management services Ordinary N Studio Limited shares 100% Interior design Northacre Development Ordinary Development Management shares 100% management services Services Limited Nilsson Architects Ordinary Design Limited shares 100% architects Northacre Capital (1) Ordinary Limited shares 100% Dormant Northacre Capital (3) Ordinary Limited shares 100% Dormant Northacre Capital (5) Ordinary Limited shares 100% Property development Northacre Capital (7) Ordinary Limited shares 100% Property development Northacre International Ordinary Limited shares 100% Dormant Lancaster Gate (Hyde Park) Ordinary Limited shares 100% Property development Intarya Limited changed its name to N Studio Limited on 9(th) October 2014. The holding in Lancaster Gate (Hyde Park) Limited is held by Northacre Capital (5) Limited.
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
15. Inventories Group 31(st) 28(th) Dec Feb 2014 2014 GBP GBP Stock 2,928 9,099 Work in progress 4,189,195 159,460 ---------------- ------------ 4,192,123 168,559 ================ ============ The Company had no stock or work in progress in either the prior or current reporting period. Trade and other 16. receivables Group Company 31(st) 28(th) 31(st) 28(th) Dec Feb Dec Feb 2014 2014 2014 2014 GBP GBP GBP GBP Trade receivables 31,568 3,763,209 - - Amounts owed by group undertakings - - 8,567,254 7,096,422 Other receivables 220,038 2,734,177 110,908 2,891,453 Prepayments and accrued income 535,604 170,325 321,056 122,218 -------- ---------- ---------- ----------- 787,210 6,667,711 8,999,218 10,110,093 ======== ========== ========== =========== At the period end there was no provision for doubtful debts (28(th) February 2014: GBPnil). Included within other receivables is a total of GBPnil (28(th) February 2014: GBP1,459,774) which represented amounts paid on behalf of Bassamey Property Holdings Limited, a vehicle which acquired the 33 Thurloe Square project. The shareholder loan was repaid following the sale of the project in June 2014. A deferred tax asset of GBPnil (28(th) February 2014: GBP208,305) has been recognised on losses carried forward and is included in other receivables. Trade and other 17. payables Group Company 31(st) 28(th) 28(th) Dec Feb 31(st) Feb 2014 2014 Dec 2014 2014 GBP GBP GBP GBP Trade payables 67,555 297,211 34,720 54,223 Amounts owed to group undertakings - - 1,141,065 8,411,065 Social security and other taxes 199,440 534,829 130,186 16,092 Other payables 2,064 5,055 1,589 2,270 Accruals and deferred income 569,325 5,778,440 268,513 1,297,011 838,384 6,615,535 1,576,073 9,780,661 ======== ========== ========== ========== Borrowings, including 18. lease finance Group Company 31(st) 28(th) 31(st) 28(th) Dec Feb Dec Feb Current Liabilities 2014 2014 2014 2014 GBP GBP GBP GBP Bank loan 1,000,000 - - - ----------- -------- ------- ------- 1,000,000 - - - =========== ======== ======= ======= A loan facility of GBP3,150,000 was made available by the Royal Bank of Scotland from the 19(th) September 2014 to Northacre Capital (7) Limited in respect of the property at 22 Prince Edward Mansions. The loan is available on a drawdown basis and as at 31(st) December 2014 GBP1,000,000 was drawn. The loan incurs interest at 3.25% above the LIBOR rate and is charged quarterly. The loan is due to be repaid the earlier of the latest expiry date of the current interest period outstanding as at the date of completion of sale of the property or the date which falls 18 months after the date on which the loan is drawn. The loan is expected to be repaid in full prior to the end of the next financial year. The loan is secured via a first legal charge over the property included within inventories under the heading of work in progress, a guarantee for GBP120,000 given by Northacre PLC and a charge over certain cash balances. Corporation 19. tax Group Company 31(st) 28(th) 28(th) Dec Feb 31(st) Feb 2014 2014 Dec 2014 2014 GBP GBP GBP GBP Corporation Tax - - - - ------- ------- ---------- ------- - - - - ======= ======= ========== =======
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
20. Future financial commitments Operating leases Group Company 31(st) 28(th) 31(st) 28(th) Dec Feb Dec Feb 2014 2014 2014 2014 GBP GBP GBP GBP Land Land Land Land & Buildings & Buildings & Buildings & Buildings Net amount payable on operating leases which expire: Within one year 147,975 147,975 147,975 147,975 In two to five years 591,900 591,900 591,900 591,900 In over five years 206,760 330,815 206,760 330,815 ------------- ------------- ------------- ------------- 946,635 1,070,690 946,635 1,070,690 ============= ============= ============= ============= Group Company Operating leases 31(st) 28(th) 31(st) 28(th) Dec Feb Dec Feb 2014 2014 2014 2014 GBP GBP GBP GBP Other Other Other Other Net amount payable on operating leases which expire: Within one year 29,148 31,804 12,920 12,920 In two to five years 7,042 33,465 6,460 19,380 In over five years - - - - 36,190 65,269 19,380 32,300 ======= ======= ======= ======= 21. Capital commitments At the reporting date there were no outstanding commitments for capital expenditure. Earnings 22. per share Profit per share of 0.62p (28(th) February 2014: 39.51p) is calculated on the profit attributable to Ordinary shares of GBP264,237 (28(th) February 2014: GBP12,200,282) divided by the weighted number of Ordinary shares in issue during the period. Computation of basic earnings 31(st) 28(th) per share: Dec 2014 Feb 2014 Net profit GBP264,237 GBP12,200,282 Weighted average number of shares outstanding 42,335,538 30,879,049 Basic profit per share 0.62p 39.51p Diluted profit per share 0.62p 39.51p There were no potentially dilutive instruments in issue during the current or preceding period. All amounts shown relate to continuing operations. 23. Equity 28(th) 31(st) Feb Share capital Dec 2014 2014 GBP GBP Called up, allotted and fully paid: 42,335,538 (28(th) February 2014: 42,335,538) Ordinary shares of 2.5p each 1,058,388 1,058,388 ------------ -------------- 1,058,388 1,058,388 ============ ============== Share premium account Share Merger and reserves premium reserve GBP GBP At 1(st) March 2014 22,565,287 8,086,293 Dividends paid - (8,086,293) At 31(st) December 2014 22,565,287 - ============ ============== The share premium account represents the incremental paid up capital above the nominal value of the Ordinary shares of 2.5p issued. The merger reserve was created in December 2013 on the issue of 10,433,927 shares to Spadille Limited in consideration for the acquisition of NTA CB
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
23. Equity (continued)
Limited (Cash Box Acquisition) with sole assets of GBP8,347,142. NTA CB Limited has been dissolved following the completion of the transaction. The merger reserve was cancelled on declaration of dividends in August 2014.
24. Dividends 31(st) 28(th) Dec 2014 Feb 2014 GBP GBP A special dividend paid during the period of 35.43p (28(th) February 2014: 40p) 14,999,481 10,689,457 ----------- ----------- 14,999,481 10,689,457 =========== =========== No further dividends have been declared prior to the approval of these financial statements and the Board will continue to actively consider the payment of dividends. 25. 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 (28(th) February 2014: GBP477,048).
Related party 26. transactions Group The Group's related parties as defined by International Accounting Standard 24 (revised), the nature of the relationship and the amount of transactions with them during the period were as follows: 10 months 12 months ended ended Nature 31(st) Dec 28(th) February of 2014 2014 Related Nature of Party Relationship GBP GBP GBP GBP Transactions Balance Total Balance Total at transactions at transactions the in the in the period the year period end year end Consultancy fees for K. Nilsson 1 100,050 - 57,150 (57,150) services provided for the 1 Palace Street project for the period March 2014 to December 2014. The consultancy fees were invoiced to Palace Revive Development Limited and paid by that company post year end Non-executive Directors' E.B. Harris 2 25,000 (25,000) 30,000 (30,000) fees for the March 2014 to December 2014 invoiced from E.C. Harris LLP Non-executive Directors' M. Williams 3 - - 10,000 - fees for March 2013 Executive Directors' M.A. AlRafi 4 - - 10,000 - fees for the period March 2013 to June 2013 Bonus of GBP1,000,000 M.A. AlRafi 4 - - - (975,000) was payable from The Lancasters Development dividends. GBP25,000 was paid on 28(th) November 2012 and the balance of GBP975,000 was paid on 28(th) March 2014 Non-executive A. de Directors' Rothschild 5 - (17,500) 17,500 (17,500) fees for the period July 2013 to February 2014 Consultancy fees charged ADCM Limited 6 1,042,466 - 1,100,000 - for the period March 2014 to December 2014 with GBP1,200,000 being paid in the period Expenses charged ADCM Limited 6 63,310 1,882 116,544 27,596 by ADCM Limited as per the consultancy agreement. GBP1,882 represents a credit from ADCM Limited outstanding at the period end
Notes to the Consolidated Financial Statements
For the 10 months ended 31(st) December 2014 (Continued)
Related party 26. transactions (continued) 10 months 12 months ended ended Nature 31(st) Dec 28(th) February of 2014 2014 Related Nature of Party Relationship GBP GBP GBP GBP Transactions Balance Total Balance Total at transactions at transactions the in the in the period the year period end year end Development Palace management Revive 7 - - 2,705,004 - fees Development invoiced for Limited the period January 2014 to December 2014 as per the development management agreement. GBP2,705,004 was received in advance in the prior year for the period January 2014 to December 2014 Expenses paid Palace on behalf of Revive 7 166,317 - 58,949 10,770 Palace Development Revive Limited Development Limited. The GBP10,770 at the prior year end represented expenses paid but not reclaimed Amount invested Palace by Northacre Real Estate 8 1,175,360 10,000,000 8,824,640 8,824,640 PLC Partners into Palace LP Real Estate Partners LP to develop the 1 Palace Street project Nature of Relationships K.B. Nilsson is a Director of the 1 Company. E.B. Harris is a Director of the Company, and a member of 2 E.C. Harris LLP. M. Williams was a Director of the Company (resigned on 3 27(th) March 2013). M.A. AlRafi was a Director of the Company (resigned on 4 25(th) June 2013). A. de Rothschild was a Director of the Company (resigned on 5 11(th) February 2014) ADCM Limited is a fully owned subsidiary of ADFG, 6 the Group's ultimate parent company. Palace Revive Development Limited is a company set up to develop the 1 Palace Street Development and 7 is controlled by ADCM Limited. Palace Real Estate Partners LP is a partnership that controls Palace Revive Development Limited. Northacre 8 PLC is a limited member of Palace Real Estate Partners LP. 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). 10 months 12 months ended ended Nature 31(st) Dec 28(th) February of 2014 2014 Nature of Related Party Relationship GBP GBP GBP GBP Transactions Total Balance Total Balance transactions at transactions at in the in the the year the year period period year end Management Group entities 1 216,712 - 231,000 - fees receivable in the period from Group subsidiaries provided at arm's length Management fees payable Group entities 1 (42,655) - (60,000) - in the period to Group subsidiaries provided at arm's length Nature of Relationships The Group entities are wholly owned subsidiaries 1 of the Company. The balances at the reporting date are shown under notes 16 and 17 of the Consolidated Financial Statements. 27. Immediate and ultimate parent undertakings
The immediate and ultimate parent undertakings are Spadille Limited, a company incorporated in England and Wales, and Abu Dhabi Financial Group LLC, a company incorporated in United Arab Emirates, respectively.
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