TIDMNTA
RNS Number : 1484M
Northacre PLC
14 July 2014
NORTHACRE PLC
(the "Company" or "Group")
Results for the year ended 28(th) February 2014
Northacre PLC is pleased to announce its financial results for
the year ended 28(th) February 2014. The Annual Report and
Accountsfor 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 26(th) August 2014,will be available shortly on the
Company'swebsite 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
It is Northacre's ambition to reposition itself as London's No.
1 prime residential developer. This will only manifest itself
through increased trading and profitability - a process which has
begun with the investment in 33 Thurloe Square and 1 Palace Street
as well as the on-going participation in the development of
Vicarage Gate.
Northacre's activities in the bidding process for development
opportunities has increased nearly fivefold compared to previous
years, thanks to our major shareholder's ability to raise finance
in a market that, whilst challenging, continues to show long term
increases in values. As a result there are clear signs of an
increasingly positive attitude in the market towards Northacre and
its prospects.
As the founder of Northacre I am pleased to see how well the
integration of our new CEO, Niccolò Barattieri di San Pietro has
worked with staff and our major shareholder as well as external
stakeholders.
The Group now has the real prospect of achieving its ambition to
become London's No. 1 developer in the prime residential sector, in
particular with the opportunity created by our major redevelopment
of 1 Palace Street which is destined to become one of the most
significant residential developments in London.
Klas Nilsson
Non-Executive Chairman
Executive Director's Statement
This year has been one of positive momentum for Northacre PLC.
In one year we have signed four development management agreements,
more than in any other year in the history of the Company. We have
also committed over GBP12m of capital to projects: this is the most
ever committed by Northacre PLC in a 12 month period.
It should be noted that we are able to operate successfully in a
very competitive market which is testament to the impact our
majority shareholder has had on the business.
Business Development
Acquiring properties which meet our stringent criteria, both
from a development and investment perspective, has become
increasingly challenging. However, in the last twelve months we
have expanded our contact base considerably and feel confident that
we are uniquely positioned to secure further opportunities. Our
track record in the last twelve months should be a testament to
that. The collaboration with our shareholder, Abu Dhabi Capital
Management LLC (ADCM), has enabled us to pursue opportunities of
substantial size, where there are fewer investors pursuing
them.
Developments
1 Palace Street
1 Palace Street will be the only residential development
overlooking the gardens of Buckingham Palace. This unique attribute
along with its imposing Grade II listed façade will facilitate us
in delivering the best residential development in London.
This opportunity was sourced and completed by ADCM with
Northacre PLC committing to contribute GBP10m of equity. Since
completion took place in early January 2014, we have been working
closely with Squire and Partners in order to fully redesign the
approved scheme. We expect to submit a new planning application by
the middle of July 2014. Should we receive planning approval in the
autumn, we will be starting demolition in January 2015.
Vicarage Gate House
Vicarage Gate House is progressing according to the development
plan with practical completion scheduled for March 2015. The
construction phase has been running very smoothly and no major
issues have arisen. Sales have been progressing well and three
units have been reserved/exchanged. We have achieved over GBP4,000
per square foot on the penthouse which is a record for the
area.
33 Thurloe Square
33 Thurloe Square is an imposing Grade II listed property
overlooking the Victoria & Albert Museum. It was the original
residence of Sir Henry Cole the first director of the museum, hence
of historic importance for the area. This opportunity was sourced
by ADCM and Northacre PLC contributed 15% of the equity.
All our planning objectives were achieved. We secured listed
building consent to increase the square footage of the existing
property along with consent to build a double basement. This
increased the total square footage from 4,777 to 6,500 square
feet.
As we were about to start work on site we received an
unsolicited offer for GBP12,750,000 which represents a significant
premium to the market. We exchanged contracts on 6(th) June 2014
and completed on 24(th) June 2014.
We achieved a net IRR of over 30% for our investors along with a
substantial return for Northacre PLC in terms of development
management fees, performance fee and return on our invested
equity.
13 & 14 Vicarage Gate
This site is adjacent to Vicarage Gate House and is a
development of 8 apartments. These two interconnected period
buildings will allow us to develop four lateral flats which are
very rare in these kinds of buildings. We started works on site at
the end of June 2014 with completion due twelve months after.
Chester Square
This is a two year project for a private client. Northacre PLC
was appointed as a development manager and Intarya, the Group's
interior design team, will be working on the interior architecture
and furnishings. The client selected Northacre PLC as he wanted a
company who had a strong track record in achieving complicated
planning and one with a true understanding of the high-end
market.
The Lancasters
This project has proved to be an excellent long term investment
with a total dividend income of GBP50m. Following the acquisition
of Lancaster Gate (Hyde Park) Limited in December 2013, Northacre
PLC realised its full profit from this project and we are now in
the process of completing the snagging with a view to transferring
the freehold to the residents by the end of the year.
Outlook
With the general elections next year and after such a protracted
period of strong growth, we feel that the year ahead will be one of
price consolidation for the prime central London residential
market. However, in the longer term we firmly believe that the
high-end residential market is underpinned by a multitude of
factors which will continue to push prices higher.
At present Northacre PLC has about 4% market share in the super
prime residential development sphere in London putting us amongst
the top ten developers by Gross Development Value (GDV). Our goal
is to be in the top three over the next three to five years.
Northacre PLC, with its unique track record, healthy cash
balance and strong relationship with our major shareholder, is
uniquely positioned to fully exploit the positive trend. We are
fully committed to building Northacre PLC into a substantial luxury
brand.
Niccolò Barattieri di San Pietro
Chief Executive Officer
Financial Review
The Group's financial position improved significantly during the
year under review with various events affecting the Group's results
and Consolidated Statement of Financial Position at the year
end.
Consolidated Income Statement
Group revenue for the year decreased to GBP3.0m (2013: GBP3.5m),
which reflected a lower level of activity in Intarya, the Group's
interior design business. Intarya's revenue fell by 37% to GBP2.0m
(2013: GBP3.2m) while development management fee income increased
by 150% to GBP1.0m (2013: GBP0.4m) due to the new agreements signed
for the 1 Palace Street and 33 Thurloe Square projects.
Administrative expenses fell by 45% to GBP4.9m (2013: GBP8.9m).
The decrease reflected the fact that there was no bonus provision
in the financial year ended February 2014 in comparison to GBP4.6m
of bonuses and NI accrued in the financial year ended February
2013. The Group achieved significant savings of GBP0.4m in legal
and other professional fees. As forecasted, loan arrangement fees
and finance costs decreased to GBPnil (2013: GBP0.3m and GBP2.1m
respectively) due to the fact that all of the Group's debt was
repaid in prior periods.
On 16th December 2013 the Group acquired Minerva's interest in
Lancaster Gate (Hyde Park) Limited. GBP15m dividends were received
during the year with a final payment of GBP7.3m received following
the acquisition. The total dividends received from The Lancasters
Development amounted to GBP50m.
The Group reported a profit before tax of GBP12.3m (2013:
GBP16.8m).
Consolidated Statement of Comprehensive Income
The change in fair value of the interest in Lancaster Gate
reported for the year, being a decrease of GBP15m (2013: GBP18.7m),
was due to the realisation of the dividends received of GBP15m.
Consolidated Statement of Financial Position
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