Northacre (LON:NTA) has had a hard life on London;s Aim market over the last 10 years, building fantastic, quality multi million pound houses and flats, but never making any real profits. That appears to be about to change with its flagship project The Lancasters overlooking Hyde park.
Northacre purchased the former Thistle hotel at Lancaster Gate in 2006 for £67M in a joint venture with Minerva
In 2007 Northacre gained planning for 74 super flats and two town houses. Days later Minerva pulled off a trick of a lifetime refinanceing the land loan, [ on the back of the increased land value.] A new £215M land, build, and interest loan was agreed just hours prior to the 2007 credit crunch.
Today , a year away from completion, 50% of the scheme has been pre sold at prices double the going rate in Westminster back in 2006 when the site was aquired. Total projected sales are now looking to come in around £500 Million
Very few large projects ever come out on budget , so it might be advisable to slap on an extra £50M in costs and remove £35M from projected sales[ if the market turns down a tad.] The joint venture equity is split 95% Minerva 5% Northacre, with Northacre able to earn up to 50% of the profits. Clues as to the actual amount Northacre will recive can be found in Minervas accounts, as they re value their trading property, and "book their share" twice a year. Northacres share of the pot so far stands in at £40M. Even on a poor day The Lancaster appeas to be about to clear £200M, an outstanding amount. Minerva looks like clearing £120M and Northacre £80M. Northacre trades at 30p, all its shares at that price come to £8.5M
Is Northacre unloved for so long, about to have its day.?