Interim Results

NORTHACRE PLC

(the ''Company'' or ''Group'')

Results for the six months ended 30th June 2015

15th September 2015

Northacre PLC is pleased to announce its interim financial results for the six months ended 30th June 2015. The Interim Report and Accounts for the period then ended will be available shortly on the Company's website: www.northacre.com

Extracts from the Company's Interim 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

020 7220 0500

Chairman's Statement

The two major projects currently being managed by Northacre, New Scotland Yard and Palace Street, have propelled the Company into the top ranks of the London property market. The vigour with which Northacre has driven the design and planning process on New Scotland Yard, resulting in an early planning application for this massive project, is testament to Northacre's management expertise. The flagship development in Palace Street has shown yet again Northacre's ability to lead the market in untested locations, with a third of the apartments exchanged off plans at top London prices.

The success should be attributed to the team whose passion and attention to detail is underpinning the legacy of Northacre as the leading prime residential developer in London today.

Klas Nilsson

Non-Executive Chairman

Chief Executive's Statement

The last six months have seen Northacre make good progress across the board.

Business Development

On the business development side we are very pleased to have been appointed as Development Managers for the redevelopment of the New Scotland Yard site. This is one of the largest redevelopment sites in central London (1.7 acres) and one where we will be creating a unique mixed use scheme. We have been able to take on substantially more business whilst also reducing our administrative costs from £2.6m (30 June 2014) to £2.1m (30 June 2015). This is a reflection of efficiencies which we have been working on for the past two years.

Current developments

New Scotland Yard

We submitted a full planning application in August 2015 and we are now expecting to be considered for Determination in December 2015.

1 Palace Street

We are progressing according to program and will be finishing the demolition stage by the end of November 2015. The soft marketing of the apartments started in late April and we are pleased to report that approximately one third of the units have now exchanged.

Vicarage Gate House

We have experienced some delays onsite mostly due to the incredibly tight subcontractor market. This has caused Practical Completion to be moved from April 2015 to November 2015. On the positive side, the quality of the finishing is exceptional and overall the scheme is being well received.

13&14 Vicarage Gate

This development has been fully designed by N Studio with Rackham Construction as the chosen contractor. Progress onsite has been very good and Practical Completion is due in late December 2015. We expect to start marketing in early October.

26 Chester Square

The basement construction is well under way and will be finished in December 2015. N Studio is in the progress of submitting the tender documentation so that we can select the General Contractor by the time the basement is completed.

22 Prince Edward Mansions

Obtaining Licence to Alter from the residents has taken considerably longer than expected, however since then, progress onsite has been very swift. We expect Practical Completion to occur in December 2015.

Outlook

The high end of the market has been in a consolidating phase. In our view this is natural following many years of strong price appreciation. It should be noted that buyers have become much more sophisticated and hence, now more than ever, the quality of the development determines its overall success.

Niccolò Barattieri di San Pietro

Chief Executive Officer

Financial Review

Consolidated Interim Statement of Comprehensive Income (Unaudited)

The Group's revenue for the six month period decreased by £1.1m to £2.0m (2014: £3.1m) due to the recognition of the development management fee and performance fee in respect of 33 Thurloe Square in the previous period. N Studio's revenue remained consistent with the previous period as expected. The reported development fee income of £1.7m included fees from all current projects: Vicarage Gate House, 13 & 14 Vicarage Gate, 1 Palace Street, 26 Chester Square and New Scotland Yard.

Administrative expenses have decreased to £2.1m (2014: £2.6m). The Group reported a loss before taxation of £0.4m (2014: Profit £0.01m).

Consolidated Interim Statement of Financial Position (Unaudited)

The Group's cash position has remained stable in comparison to the 31 December 2014 position and as at 30 June 2015 had cash and cash equivalents of £2.0m (31 December 2014: £2.5m).

In accordance with International Accounting Standards, the investments in development projects that have been classified as available for sale financial assets in the Consolidated Interim Statement of Financial Position (Unaudited) represent, where appropriate, the equity value in each of the development schemes and any fair value adjustments. As at 30 June 2015 the total of £10.0m represents the fair value of the investment in the 1 Palace Street development.

The Group's development of 22 Prince Edward Mansions, has continued in the period and the £4.6m cost at 30 June 2015 is included within inventories. The development has been funded by reserves and a loan from the Royal Bank of Scotland which is due to be repaid in full on sale of the property which is expected by the end of the current period.

Capital and Reserves

The Directors do not recommend the payment of an interim dividend as the funds of the Company are fully employed.

Victoria Goryashina

Interim Group Financial Controller

Northacre PLC

Consolidated Interim Statement of Comprehensive Income (Unaudited)

Northacre PLC

Consolidated Interim Statement of Financial Position (Unaudited)

Northacre PLC

Consolidated Interim Statement of Cash Flows (Unaudited)

Northacre PLC

Consolidated Interim Statement of Changes in Equity (Unaudited)

Northacre PLC

Notes to the Unaudited Interim Financial Statements

For the Six Months ended 30th June 2015

1. Basis of Preparation and Accounting Policies

Basis of Preparation

The interim financial information for the six months ended 30th June 2015 and 30th June 2014 is unaudited. The interim financial information was approved by the Board of Directors on 14th September 2015.

The statutory financial statements for the period ended 31st December 2014, prepared under International Financial Reporting Standards (IFRS), have been reported on by the Group auditors and delivered to the Registrar of Companies. The audit report was unqualified and did not contain a statement under s498 of the Companies Act 2006.

These accounts have been prepared in accordance with International Accounting (IAS) 34 'Interim Financial Reporting'.

The interim financial information does not constitute statutory financial statements as defined in Section 434 of the Companies Act 2006.

Accounting Policies

The accounting policies adopted are consistent with those applied as at 31st December 2014 and those that the Directors expect to be adopted as at 31st December 2015. They are set out in full in the financial statements for the period ended 31st December 2014.

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, 26 Chester Square, 1 Palace Street and New Scotland Yard.

The Directors have prepared detailed cash flow projections for the period ending 31st 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; and

- 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. 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.

Northacre PLC

Notes to the Unaudited Interim Financial Statements

For the Six Months ended 30th June 2015 (Continued)

1. Basis of Preparation and Accounting Policies (Continued)

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.

Investments

Investments in subsidiaries, associates and joint ventures, and other investments are presented in the Group and Parent financial statements at cost, less any necessary provision or impairment.

Associates

Associates are 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 entities where the Group does not exercise either control or significant influence. The investments reflect 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.

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.

Northacre PLC

Notes to the Unaudited Interim Financial Statements

For the Six Months ended 30th June 2015 (Continued)

1. Basis of Preparation and Accounting Policies (Continued)

Business Combinations and Goodwill

Goodwill relating to acquisitions prior to 1st 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 profit or loss in the period of acquisition. Goodwill is tested annually for impairment.

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 and equity attributable to equity holders of the Parent Company, comprising issued capital, share premium account and retained profits.

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 risks 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 risk and market risk. Market risk includes currency, interest rate and other price risks.

2. 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:

Northacre PLC

Notes to the Unaudited Interim Financial Statements

For the Six Months ended 30th June 2015 (Continued)

2. Segmental Information (Continued)

Northacre PLC

Notes to the Unaudited Interim Financial Statements

For the Six Months ended 30th June 2015 (Continued)

There were no potentially dilutive instruments in issue during the current or preceding periods. All amounts shown relate to continuing and total operations.

Northacre PLC

Notes to the Unaudited Interim Financial Statements

For the Six Months ended 30th June 2015 (Continued)

6. Trade and other receivables

7. Trade and Other Payables

8. Borrowings, including lease finance

A loan facility of £3,150,000 was made available by the Royal Bank of Scotland from the 19th 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 30th June 2015 £1,662,378 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 current financial year. The loan is secured via a first legal charge over the property included within inventories, a guarantee for £120,000 given by Northacre PLC and a charge over certain cash balances.

Northacre PLC

Notes to the Unaudited Interim Financial Statements

For the Six Months ended 30th June 2015 (Continued)

9. Related Party Transactions