REG - Develop North PLC - Half-year Report
11/08/2025 07:00
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RNS Number : 6904U Develop North PLC 11 August 2025
DEVELOP NORTH PLC
Interim Report & Financial Statements for the six months ending 31 May
2025
Announcement of Interim Results
LEI: 213800EXPWANYN3NEV68
This announcement contains regulated information.
Chairman's Statement
Highlights
· Net Asset Value total return of 2.5% for the six months to 31 May
2025.
· Dividends of 2.0 pence per share paid or declared during the
period, equivalent to an annualised yield of 5.1%.
· Loan to value ("LTV") of the portfolio reduced to 68.7% (30
November 2024: 71.2%).
· Three exits during the period, bringing the number of exits to 26
since inception.
· 66% of the portfolio now deployed in the North East of England.
Introduction
I am pleased to present the Company's results for the half year ended 31 May
2025, during which the Company entered its ninth year of trading. The
financial reporting period has included two cuts in UK interest rates,
reducing the base rate to 4.25%. At the time of writing (August 2025), there
had been a further rate cut of 0.25%, taking interest rates to 4.0%. UK
Consumer Price Inflation (CPI) is also proving difficult to rein in, running
at 3.4% over the twelve months to May 2025, down a mere 0.1% from a year
earlier. The UK's GDP growth forecast for 2025 is generally expected to be
around 1%, with some forecasts ranging slightly higher or lower.
Turning to the housing market, impending Stamp Duty changes accelerated the
rate of transactions earlier in the year, leading to an easing of sales in
more recent months. This one-off effect is now working through, with house
prices predicted to grow by a moderate 2% during 2025 but to gather pace to 5%
or more in 2026. These points are described more fully in the Investment
Adviser's Report.
Net Asset Value
The Company's Net Asset Value ('NAV') per share decreased from 79.81p to
79.79p over the six months ended 31 May 2025. Taking the effects of dividend
distributions into account, this has resulted in a NAV Total Return for the
period of 2.5%.
This figure may be placed into context by the total return figures over the
same period of the Association of Investment Companies' (AIC's)
'Property-Debt' sector, of which Develop North is a component member, of 1.4%
and of the AIC's 'Debt-Loans' sector of (1.9%).
Dividends
A quarterly dividend of 1 penny per share was paid on 27 June 2025 in respect
of the quarter ended 28 February 2025. As set out in the Annual Report, the
Company expects to pay dividends at a rate of 1 penny per share per quarter,
equivalent to 4 pence per share per year in aggregate.
Depending on market conditions and the performance of the investment
portfolio, a final balancing payment may be made at the end of the current
financial year so as to at least fulfil the UK investment company
qualification requirements.
Share Buybacks
In December 2023 the Company announced the extension of the share buyback
programme which began in November 2023. A further 566,369 Ordinary shares were
purchased under this extension. In April 2024 the Company announced a new
share buyback programme to purchase further Ordinary shares for up to a total
maximum consideration of £500k. The Company repurchased 689,655 Ordinary
shares under the new programme.
No share buybacks were completed during the period under report. The authority
to buy back shares was renewed at the recent AGM. The Board will continue to
monitor the discount to NAV at which the shares trade and consider embarking
upon further buy backs as and when appropriate.
Investment Portfolio
The total value of the Company's portfolio now stands at £21.6 million, from
15 live projects.
New Investments:
The Company agreed two new facilities during the period: a £2.4 million, 11
month facility to fund a roadside retail development in South Tyneside.
Secondly, a £1.2million, 18 month loan to finance a boutique smart hotel in
Edinburgh. In total, £2.6 million was deployed into five projects including
the two new projects mentioned above. The quality of the loan book continues
to be maintained with the Loan to Value moving from 71.2% at 30 November 2024
to 68.7% at 31 May 2025.
Exits:
Three portfolio exits were completed during the period, bringing the number of
exits to twenty-six since inception.
Impairments:
As specified by the requirements of accountancy standard IFRS 9, the Company
has continued to recognise an impairment charge should interest not be paid by
the borrower and there is not a clear expectation that this can be recovered
subsequently. During the period, two projects were unable to meet their
interest obligations in full. IFRS 9 also requires the Company to consider
various credit loss scenarios and assign a risk weighting to these. This
calculation generates a provision which is taken as a further impairment for
the period. In the six months ended 31 May 2025 the Company has set the
provision at £64,000. This is an increase of £15,000 from the general
provision at 30 November 2024. This provision is based on forward looking
scenarios and is designed to withstand market-related shocks, reflecting
current economic uncertainties. The loan portfolio is discussed more fully in
the Investment Adviser's review.
Gearing
The Company continues to benefit from a gearing facility with Shawbrook Bank
Limited, which is expected to be renewed for a further year in August 2025. At
the period end £2.85m had been drawn down under this facility.
New Director
I am delighted to welcome Dr Sameer Al Ansari as a Non-Executive Director and
Deputy Chairman with effect from 2 May 2025.
Dr Al-Ansari, an internationally respected figure in finance, investment and
corporate governance, will play a key role in shaping Develop North's future
investment and wider fund strategy. His appointment will also support the
fund's ambitions to raise its international profile, drive new investment into
the Company, and promote economic growth across the North East region.
Outlook
For Develop North and its shareholders, not to mention the North East of
England, these are exciting and potentially transformative times, as the post-
reporting period note below explains. In the nearer term, the intention is to
continue the process of creating and managing a diversified portfolio of fixed
rate loans secured over land and/or property, predominantly but not
exclusively in our local region here in the North East.
To make an accurate assessment of the company's outlook, it is necessary to
look past the torrent of alarming headlines faced daily whether domestically
or on the global stage. It is obviously important to keep abreast of
developments covering everything from conflicts in the Middle East and Ukraine
to the effects of US tariffs on international trade to political developments
as the Labour government approaches its second year in office. To assess the
investment outlook for our company, however, it is important to look at the
prospects and background factors a little nearer home.
The Office for Budget Responsibility (OBR) forecasts 1.0% growth in 2025 for
the UK economy, while the Treasury's June 2025 survey of independent forecasts
produces a similar figure averaging 1.1%.These are not exciting numbers - but
whatever the external backdrop, people will always need houses. Bank and
building societies will also always need to offer mortgages to millions of
people to make their own businesses work. Last but not least, there is
widespread agreement that there is a crucial shortage of housing stock across
the UK.
Develop North and its management team stands ready to play its part over the
coming months and years.
John Newlands
Chairman
8 August 2025
Post-reporting period Note
On 9 July 2025, the Company announced via the London Stock Exchange a proposed
change to its investment policy and potential fundraise to enhance shareholder
value through a broader, more diversified portfolio of investments
predominantly focused in the North East of England.
As announced, the revised investment policy will enable the Company to
allocate the capital that it intends to raise across a wider range of asset
classes, pursuing investments across three core areas: Real Estate Lending,
Commercial Real Estate and Residential Real Estate.
Supporting Tier One Capital in managing the Company through its next phase of
growth is an experienced and regionally embedded asset management team,
comprising Homes or Houses, specialists in residential acquisitions and
leasing; and Broadoak Asset Management, experts in commercial real estate
investment.
The proposed changes to the Investment Policy will enable the Company to take
advantage of a growing investment opportunity in the North East, with two
major recent events contributing to a far higher level of focus in the region
than before, including the formalisation of a £1.4 billion devolution
agreement in May 2024 and the increased international profile following the
acquisition of Newcastle United by the Saudi Public Investment Fund.
A potential fundraise would enable the Company to invest at greater scale and
take advantage of the new opportunities identified in the new Investment
Policy.
Further details may be found in the Company's RNS announcement dated 9 July
2025:
https://www.investegate.co.uk/announcement/rns/develop-north--dvno/change-to-investment-policy-potential-fundraise/8969899
(https://www.investegate.co.uk/announcement/rns/develop-north--dvno/change-to-investment-policy-potential-fundraise/8969899)
Investment Adviser's Review
REVIEW OF THE 6 MONTHS TO 31 MAY 2025
Investment Adviser's highlights:
· NAV Total Return of 2.5% for the 6 months to 31 May 2025.
· Funds deployed into two new projects
· Three exits during the period, bringing the number of exits to
twenty-six since inception
· Loan to Value (LTV) of portfolio reduced to 68.7%
· Dividends totalling 2p per share paid or declared for the six
months to 31 May 2025, equivalent to an annualised dividend yield of 5.1%.
· 66% of funds deployed in North East England reflecting the
Company's ongoing commitment to focus operations on our chosen regional
markets.
This Interim Report and Accounts covers the end of the eighth and the
beginning of the ninth year of performance of the Company, since it's listing
in January 2017.
The Company's investment objective is to provide debt finance to the property
sector. The Company also benefits from a small number of equity positions
attained at nil cost in four of the borrowing entities which it supports. In
addition, the Company benefits from exit fees on redemption of other projects
that additionally contribute to the Senior and Profit lending type.
Progress on the Company's Strategic Objectives:
· Weighted Average interest generated was 9.8% - up from 9.4% on
the prior year end.
· Prudent cost control saw overheads maintained at last years level
- a below inflation rise.
· Portfolio LTV improved at 68.7%
· Further progress in managing non-performing assets and
improvement in loan book quality.
· Fund liquidity further improved, with the continuation of the
share buy-back exercise.
Economic Backdrop and Outlook:
The first six months of the financial year have seen two interest rate cuts
with the base rate at 4.25% at the period end. At the time of writing (August
2025), there had been a further rate cut of 0.25%, taking interest rates to
4.0%. The Bank of England has been understandably cautious and the most recent
minutes from 7 May 2025 suggest "a gradual and careful approach to the further
withdrawal of monetary policy restraint remains appropriate". Many
commentators are interpreting this as a sign that the Bank will continue to
cut rates during the rest of 2025 and into 2026.
2025 has been up and down for the housing market with the stamp duty changes
accelerating transactions earlier in the year leading to a softening of the
market in more recent months. Commentators are now expecting house prices to
grow by only 2% during 2025 but for 2026 to grow by 5%.
Build cost inflation and labour in the construction sector have broadly
returned to normal levels with BICS all-in tender price index, which measurers
the trend of contractors pricing levels in accepted tenders, showing annual
growth of 2.3% in the second quarter of this year. Labour remain the main
driver of project costs, with increases to employers' National Insurance
Contributions and the National Living Wage feeding into an expected 7.1%
annual increase in the BCIS Labour cost index in Q2 2025
The Company has used the first six months to continue to support quality
borrowers with strong business plans which is reflected in the consistent
recurring income that is being generated across the portfolio.
We are pleased to report an active period for new transactions, deployments to
existing projects together with full and partial exits:
The Company agreed two new facilities during the period:
· South Tyneside - £2.4m 11-month facility
· Edinburgh - £1.2m 18-month facility
During the period a total of £2.6m was deployed into five projects including
the two new projects mentioned above.
At the period end, fund deployment totalled £21.6m. The quality of the loan
book continues to be maintained with the Loan to Value moving from 71.2% at 30
November 2024 to 68.7% at 31 May 2025.
Portfolio Exits
There was three portfolio exits during the period, bringing the number of
exits to twenty-six since inception.
Partial Redemptions Update
During the period there was £2.9m of partial redemptions across four of the
portfolio projects including the three exits in the period.
Impairments
In accordance with IFRS 9 the Company recognises the gross interest receivable
on all its loans, and then recognises an impairment charge if that interest is
not paid by the borrower and there is not a clear expectation that this can be
recovered subsequently. During the period, two projects were unable to meet
their interest obligations in full.
IFRS 9 also requires the Company to consider various credit loss scenarios and
assign a risk weighting to these. This calculation generates a provision which
is taken as a further impairment for the period. In the six months ended 31
May 2025 the Company has set the provision at £64,000. This is an increase of
£15,000 from the general provision at 30 November 2024.This provision is
based on forward looking scenarios and is designed to withstand market-related
shocks, reflecting current economic uncertainties.
Gearing
The Company has agreed to renew its committed revolving credit facility with
Shawbrook Bank for a further year. Again, the key driver was headroom and
liquidity. This renewal for a seventh year demonstrates the support that the
Company has from its lender, and the growing confidence in future deployment
given the current strength of pipeline.
BUYBACK PROGRAMME
In November 2023, the Company announced the commencement of a share buyback
programme. To date the Company has purchased 1,945,862 shares in the market.
The shares will be held as treasury shares on the Company's balance sheet.
OUTLOOK
Residential
As at 31 May 2025, 74.9% of deployed funds were invested across 9 projects
with a residential focus with a further £0.481m committed to live projects.
Commercial
As at 31 May 2025, 25.1% of deployed funds were invested across 5 projects
with a commercial focus.
PIPELINE
There is currently £4.7m at various stages of due diligence across two
projects, all in the North East.
PERFORMANCE SINCE 2018
Since 1 June 2018, the company has provided £50.1m across twenty-five new
projects. These projects have generated an average IRR of 9.4% with only 0.2%
of capital write offs which have been more than covered by associated exit and
plot fees. These projects have also been lower risk projects with the LTVs
than the historic projects.
The quality and experience of each management team that we are in discussions
with will continue to enhance the Company's portfolio and strengthen its
reputation in the market. This should lead to the creation of shareholder
value that is sustainable in the longer term.
Ian McElroy
Tier One Capital Ltd
8 August 2025
THE INVESTMENT PORTFOLIO AS AT 31 MAY 2025
Sector % LTV* (May 25) Loan Value (May 25) £'000s LTV* Loan Value (Nov 24) £'000s
Portfolio (Nov 24)
Residential 73.8% 71.0% 16,194 75.3% 17,032
Commercial 24.7% 61.7% 5,417 53.9% 4,082
Cash 1.5% - 331 - 118
General Impairment - - (64) - (49)
Total/Weighted Average 100.0% 68.7% 21,878 71.2% 21,183
*LTV has been calculated using the carrying value of the loans as at the
balance sheet date
Interim Management Report
The principal and emerging risks and uncertainties that could have a material
impact on the Company's performance have not changed from those set out on
pages 15 and 16 of the Company's Annual Report for the year ended 30 November
2024.
The Directors consider that the Chairman's Statement and the Investment
Adviser's Review, the disclosure on related party transactions and the
Statement of Directors' Responsibilities together constitute the Interim
Management Report of the Company for the six months ended 31 May 2025 and
satisfy the requirements of the Disclosure Guidance and Transparency Rules
4.2.3 to 4.2.11 of the Financial Conduct Authority.
The Interim Report has not been reviewed or audited by the Company's Auditor.
The Directors believe, having considered the Company's investment objectives,
risk management policies, capital management policies and procedures, the
nature of the portfolio and expenditure projections, that the Company has
adequate resources, an appropriate financial structure and suitable management
arrangements in place to continue in operational existence for the foreseeable
future and, more specifically, that there are no material uncertainties
pertaining to the Company that would prevent its ability to continue in such
operational existence for at least twelve months from the date of the approval
of this Interim Report. For these reasons they consider that there is
sufficient evidence to continue to adopt the going concern basis in preparing
the accounts.
Directors' Responsibilities Statement
We confirm that to the best of our knowledge:
· The condensed set of financial statements has been prepared in
accordance with FRS 104 'Interim Financial Reporting' and gives a true and
fair view of the assets, liabilities, financial position and profit of the
Company, as at 31 May 2025, as required by the Disclosure Guidance and
Transparency Rule 4.2.4R;
· The Interim Report includes a fair review of the information
required by the Disclosure and Transparency Rule 4.2.7R, being an indication
of important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements,
and a description of the principal risks and uncertainties for the remaining
six months of the financial year; and
· The Interim Report includes a fair review of the information
concerning related party transactions as required by Disclosure Guidance and
Transparency Rule 4.2.8R.
On Behalf of the Board
John Newlands
Chairman
8 August 2025
CONDENSED INCOME STATEMENT
Six months ended Six months ended Year ended
31 May 2025 (unaudited) 31 May 2024 (unaudited) 30 November 2024
(audited)
Note Revenue Capital Total Total Total
£'000 £'000 £'000 £'000 £'000
REVENUE
Investment interest 1,036 - 1,036 953 1,938
Total revenue 1,036 - 1,036 953 1,938
Losses on investments held at fair value through profit or loss
5 - - - - (143)
Amortisation of exit fees 5, 6 - 13 13 - 126
Total net income 1,036 13 1,049 953 1,921
Expenditure
Investment adviser fee 2 (30) - (30) (31) (61)
Impairments on investments held at amortised cost
6 - (15) (15) (30) (122)
Other expenses (277) (152) (429) (248) (484)
Total expenditure (307) (167) (474) (309) (667)
Profit/(loss) before finance costs and taxation
729 (154) 575 644 1,254
Finance costs
Interest payable (81) - (81) (39) (84)
Profit/(loss) before taxation 648 (154) 494 605 1,170
Taxation - - - - -
Profit/(loss) for the period/year and total comprehensive profit for the
period/year
648 (154) 494 605 1,170
Basic earnings per share 3 2.59p (0.61)p 1.98p 2.38p 4.64p
The notes form an integral part of the financial statements.
The total column of this statement represents the Company's Statement of
Comprehensive Income, prepared in accordance with UK-adopted International
Accounting Standards. The supplementary revenue return and capital return
columns are both prepared under guidance published by the Association of
Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations. There is no other comprehensive income as all income is recorded
in the statement above.
CONDENSED Statement of Financial Position
As at As at As at
31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
Notes £'000 £'000 £'000
Non-current assets 6 1,000 3,064 1,000
Loans at amortised cost
1,000 3,064 1,000
Current assets
Investments held at fair value 5 2,942 3,056 2,899
Loans at amortised cost 6 18,800 14,759 18,146
Other receivables and prepayments 3 16 17
Cash and cash equivalents 332 239 115
22,077 18,070 21,177
Total assets 23,077 21,134 22,177
Current liabilities
Loan facility (2,850) (1,125) (2,100)
Other payables and accrued expenses (297) (138) (141)
Total liabilities (3,147) (1,263) (2,241)
Net assets 19,930 19,871 19,936
Share capital and reserves
Share capital 7 269 269 269
Share premium 9,094 9,094 9,094
Special distributable reserve 10,973 10,973 10,973
Capital reserve (1,316) (1,071) (1,162)
Revenue reserve 910 606 762
Equity shareholders' funds 19,930 19,871 19,936
Net asset value per ordinary share 8 79.79p 79.55p 79.81p
The accompanying notes form an integral part of the financial statements.
The financial statements on pages 11 to 20 were approved by the Board of
Directors of Develop North PLC (a public limited company incorporated in
England and Wales with company number 10395804) and authorised for issue on 8
August 2025.
They were signed on its behalf by:
John Newlands
Chairman
CONDENSED Statement of Changes in Equity
For the six months ended Special distributable
31 May 2025 Share capital Share premium reserve Capital reserve Revenue reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
At beginning of the period 269 9,094 10,973 (1,162) 762 19,936
Total comprehensive income for the period:
Profit for the period - - - (154) 648 494
Transactions with owners recognised directly in equity:
Dividends paid (note 4) - - - - (500) (500)
Repurchase of shares into treasury - - - - - -
At 31 May 2025 269 9,094 10,973 (1,316) 910 19,930
For the six months ended Special distributable
31 May 2024 Share capital Share premium reserve Capital reserve Revenue reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
At beginning of the period 269 9,094 12,267 (1,059) 133 20,704
Total comprehensive income for the period:
Profit for the period - - - (1) 606 605
Transactions with owners recognised directly in equity:
Dividends paid (note 4) - - (386) - (133) (519)
Repurchase of shares into treasury - - (908) (11) - (919)
At 31 May 2024 269 9,094 10,973 (1,071) 606 19,871
For the year ended Special distributable
30 November 2024 Share capital Share premium reserve Capital reserve Revenue reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
At beginning of the year 269 9,094 12,267 (1,059) 133 20,704
Total comprehensive income for the year:
Profit for the year - - - (92) 1,262 1,170
Transactions with owners recognised directly in equity:
Dividends paid (note 4) - - (386) - (633) (1,019)
Repurchase of shares into treasury - - (908) (11) - (919)
At 30 November 2024 269 9,094 10,973 (1,162) 762 19,936
Condensed Cash Flow Statement
Six months to Six months to Year ending
31 May 31 May 30 November
2025 2024 2024
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Profit before taxation 494 605 1,170
Losses on investments held at fair value through profit and loss - - 143
Impairments on loans at amortised cost 6 15 30 75
Amortisation of exit fees (13) - (126)
Interest expense 1,036 39 84
Changes in working capital
Increase in loan interest receivable on investments held at fair value through 5 (55) (34) (84)
profit and loss
Increase in loan interest receivable on loans at amortised cost
Increase/(decrease) in other receivables
6 (163) (268) (152)
14 (3) (4)
Increase/(decrease) in other payables 156 (53) (50)
Net cash inflow from operating activities AFTER TAXATION 1,484 316 1,056
Investing activities
Loans given (3,456) (3,291) (9,151)
Loans repaid 2,974 2,412 6,978
Net cash OUTFLOW from investing activities (482) (879) (2,173)
Financing
Equity dividends paid (500) (519) (1,019)
Repurchase of shares into Treasury - (919) (919)
Bank loan drawn down 2,250 2,325 6,125
Repayment of bank loan (1,500) (1,200) (4,025)
Interest paid (1,035) (39) (84)
Net cash (outfloW)/INflow from financing (785) (352) 78
INCREASE/(DEcrease) in cash and cash equivalents
217 (915) (1,039)
Cash and cash equivalents at the start of the year 115 1,154 1,154
Cash and cash equivalents at the end of the period/year 332 239 115
Increase/(decrease) in other receivables
5
(55)
(34)
(84)
6
(163)
(268)
(152)
14
(3)
(4)
Increase/(decrease) in other payables
156
(53)
(50)
Net cash inflow from operating activities AFTER TAXATION
1,484
316
1,056
Investing activities
Loans given
(3,456)
(3,291)
(9,151)
Loans repaid
2,974
2,412
6,978
Net cash OUTFLOW from investing activities
(482)
(879)
(2,173)
Financing
Equity dividends paid
(500)
(519)
(1,019)
Repurchase of shares into Treasury
-
(919)
(919)
Bank loan drawn down
2,250
2,325
6,125
Repayment of bank loan
(1,500)
(1,200)
(4,025)
Interest paid
(1,035)
(39)
(84)
Net cash (outfloW)/INflow from financing
(785)
(352)
78
INCREASE/(DEcrease) in cash and cash equivalents
217
(915)
(1,039)
Cash and cash equivalents at the start of the year
115
1,154
1,154
Cash and cash equivalents at the end of the period/year
332
239
115
Notes to the Condensed Financial Statements (unaudited)
1. INTERIM RESULTS
The condensed financial statements have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting' and the
accounting policies set out in the statutory accounts of the Company for the
year ended 30 November 2024.The condensed financial statements do not include
all of the information required for a complete set of financial statements and
should be read in conjunction with the financial statements of the Company for
the year ended 30 November 2024, which were prepared in accordance with
UK-adopted International Accounting Standards as applicable to companies
reporting under international accounting standards. There have been no
significant changes to management judgements and estimates.
The condensed financial statements have been prepared on the going concern
basis. In assessing the going concern basis of accounting the Directors have
had regard to the guidance issued by the Financial Reporting Council. After
making enquiries, and bearing in mind the nature of the Company's business and
assets, the Directors consider that the Company has adequate resources to
continue in operational existence for the foreseeable future. For this reason
they continue to adopt the going concern basis in preparing these financial
statements.
2. INVESTMENT ADVISER
In its role as the Investment Adviser, Tier One Capital Ltd is entitled to
receive from the Company an investment adviser fee which is calculated and
paid quarterly in arrears at an annual rate of 0.25 per cent. per annum of the
prevailing Net Asset Value if less than £100m; or 0.50 per cent. per annum of
the prevailing Net Asset Value if £100m or more.
There is no balance accrued for the Investment Adviser for the period ended 31
May 2025 (31 May 2024: £nil;
30 November 2024: £nil)
There are no performance fees payable.
31 May 2025 30 November 2024
£'000 £'000
Investment Adviser fee 30 61
ALTERNATIVE INVESTMENT FUND MANAGER'S DIRECTIVE ('AIFMD')
The Company has been approved by the Financial Conduct Authority as a Small
Registered UK Alternative Investment Fund Manager ('AIFM').
3. EARNINGS PER SHARE
The revenue, capital and total return per ordinary share is based on each of
the profit after tax and on 24,978,201 ordinary shares, being the weighted
average number of ordinary shares in issue throughout the period.
Six months ended 31 May 2025 Six months ended 31 May 2024 Year ended 30 November 2024
£'000 Pence per share £'000 Pence per share £'000 Pence per share
Revenue earnings 648 2.59 606 2.38 1,262 5.00
Capital earnings (154) (0.61) (1) 0.00 (92) (0.36)
Total earnings 494 1.98 605 2.38 1,170 4.64
Average number of shares in issue 24,978,201 25,515,318 25,246,760
Earnings for the period to 31 May 2025 should not be taken as a guide to the
results for the year to 30 November 2025.
4. DIVIDENDS
Six months ended 31 May 2025 Six months ended 31 May 2024 Year ended 30 November 2024
£'000 £'000 £'000
Dividends paid in the year relating to previous year:
Interim dividend for the quarter ended August, paid in December 250 262 262
Interim dividend for the quarter ended November, paid in March 250 257 257
Dividends paid during and relating to the current year:
Interim dividend for the quarter ended February, paid in June - - 250
Interim dividend for the quarter ended May, paid in September - - 250
Total 500 519 1,019
The Company intends to distribute at least 85% of its distributable income
earned in each financial year by way of interest distribution. On 4 June 2025,
the Company declared an interim dividend of 1.00 pence per share for the
quarter ended 28 February 2025, paid on 27 June 2025.
5. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
The Company's investment held at fair value through profit or loss represents
its profit share arrangements whereby the Company owns at least 25.1% or has
an exit fee mechanism for four companies.
31 May 31 May 30 November
2025 2024 2024
£'000 £'000 £'000
Opening Balance 2,899 3,024 3,024
Principal repayments (25) (2) (66)
Movements in interest receivable 55 34 84
Unrealised (losses)/gains on investments held at fair value through profit or - - (143)
loss
Amortisation of exit fees 13 - -
Total investments held at fair value through profit and loss 2,942 3,056 2,899
Split:
Non-current assets: Investments held at fair value through profit and loss due - - -
for repayment after one year
Current assets: Investments held at fair value through profit and loss due for 2,942 3,056 2,899
repayment under one year
6. LOANS AT AMORTISED COST
31 May 31 May 30 November
2025 2024 2024
£'000 £'000 £'000
Opening Balance 19,146 16,704 16,704
Loans deployed 3,457 3,291 9,151
Principal repayments (2,951) (2,410) (6,912)
Movements in interest receivable 163 268 152
Movement in impairments (15) (30) (75)
Amortisation of exit fees - - 126
Total Loans at amortised cost 19,800 17,823 19,146
Split:
Non-current assets: Loans at amortised cost due for repayment after one year 1,000 3,064 1,000
18,800 14,759 18,146
Current assets: Loans at amortised cost due for repayment under one year
The Company's loans held at amortised cost are accounted for using the
effective interest method. The carrying value of each loan is determined after
taking into consideration any requirement for impairment provisions during the
year, allowances for impairment losses amounted to £15,000 (May 2024:
£30,000; November 2024: £75,000).
7. SHARE CAPITAL
Allotted, issued and fully paid:
31 May 2025 31 May 2024 30 November 2024
£'000 £'000 £'000
24,978,201 (May 2024: 24,978,201; November 2024: 24,978,201) ordinary shares 250 249 250
of 1p each
1,945,862 (May 2024: 1,945,862; November 2024: 1,945,862) ordinary shares of 19 20 19
1p held in Treasury
269 269 269
*The Ordinary Shares (excluding shares held in Treasury) are eligible to vote
and have the right to participate in either an interest distribution or
participate in a capital distribution (on winding up).
8. NET ASSET VALUE PER ORDINARY SHARE
The net asset value per ordinary share is based on net assets of £19,929,613
(31 May 2024: £19,870,979; 30 November 2024: £19,936,700) and on 24,978,201
ordinary shares (31 May 2024: 24,978,201; 30 November 2024: 24,978,201), being
the number of ordinary shares in issue at the period/year end.
9. RELATED PARTIES
The Directors are considered to be related parties. No Director has an
interest in any transactions which are, or were, unusual in their nature or
significant to the nature of the Company.
The Directors of the Company received £46,000 fees for their services during
the period to 31 May 2025 (30 November 2024: £85,000; 31 May 2024: £43,000).
£nil was payable at the period and prior year end.
Ian McElroy is Chief Executive of Tier One Capital Ltd and is a founding
shareholder and director of the firm.
Tier One Capital Ltd received £30,000 investment adviser's fee during the
period (30 November 2024: £61,000, 31 May 2024: £31,000) and £nil was
payable at the period end (30 November 2024: £nil; 31 May 2024: £nil). Tier
One Capital Ltd receives up to a 20% margin and arrangement fee for all loans
it facilitates.
There are various related party relationships in place with the borrowers as
below:
The following related parties arise due to the opportunity taken to advance
the profit share contracts:
· Coalsnaughton
Develop North PLC owns 40.1% of the borrower Kudos Partnership. The loan
amount outstanding as at 31 May 2025 was £1.9m (30 November 2024: £1.9m; 31
May 2024: £2.0m). Transactions in relation to loans made during the year
amounted to £nil (30 November 2024: £nil; 31 May 2024: £nil). Interest due
to be received as at 31 May 2025 was £567,000 (30 November 2024: £513,000;
31 May 2024: £459,000). Interest received during the period amounted to £nil
(30 November 2024: £20,000; 31 May 2024: £nil).
· Oswald Street
Develop North PLC owns 25.1% of the Riverfront Property Limited Partnership.
The loan amount outstanding as at 31 May 2025 was £448,000 (30 November
2024: £448,000; 31 May 2024: £448,000). Transactions in relation to loans
made during the year amounted to £nil (30 November 2024: £nil; 31 May 2024:
£nil). Interest due to be received as at 31 May 2025 was £8,000 (30 November
2024: £8,000; 31 May 2024: £5,000). Interest received during the period
amounted to £12,000 (30 November 2024: £47,000; 31 May 2024: £25,000).
10. OPERATING SEGMENTS
The Board has considered the requirements of IFRS 8 'Operating Segments'. The
Board is of the view that the Company is engaged in a single unified business,
being the investment of the Company's capital in financial assets comprising
loans and joint venture equity contracts and in one geographical area, the
United Kingdom, and that therefore the Company has no segments. The Board of
Directors, as a whole, has been identified as constituting the chief operating
decision maker of the Company. The key measure of performance used by the
Board to assess the Company's performance is the total return on the Company's
net asset value. As the total return on the Company's net asset value is
calculated based on the IFRS net asset value per share as shown at the foot of
the Consolidated Statement of Financial Position, the key performance measure
is that prepared under IFRS. Therefore no reconciliation is required between
the measure of profit or loss used by the Board and that contained in the
financial statements.
11. FAIR VALUE HIERARCHY
Accounting standards recognise a hierarchy of fair value measurements for
financial instruments which gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities (Level 1) and the
lowest priority to unobservable inputs (Level 3). The classification of
financial instruments depends on the lowest significant applicable input, as
follows:
· Level 1 - Unadjusted, fully accessible and current quoted prices in
active markets for identical assets or liabilities. Examples of such
instruments would be investments listed or quoted on any recognised stock
exchange.
· Level 2 - Quoted prices for similar assets or liabilities, or other
directly or indirectly observable inputs which exist for the duration of the
period of investment. Examples of such instruments would be forward exchange
contracts and certain other derivative instruments.
· Level 3 - External inputs are unobservable. Value is the Directors' best
estimate, based on advice from relevant knowledgeable experts, use of
recognised valuation techniques and on assumptions as to what inputs other
market participants would apply in pricing the same or similar instrument. All
loans are considered Level 3.
12. INTERIM REPORT STATEMENT
These are not full statutory accounts in terms of Section 434 of the Companies
Act 2006 and are unaudited. Statutory accounts for the year ended 30 November
2024, which received an unqualified audit report and which did not contain a
statement under Section 498 of the Companies Act 2006, have been lodged with
the Registrar of Companies. No full statutory accounts in respect of any
period after 30 November 2024 have been reported on by the Company's auditor
or delivered to the Registrar of Companies.
For further information regarding Develop North PLC (LEI:
213800EXPWANYN3NEV68) please call:
Develop North PLC +44 (0) 191 222 0099
Ian McElroy
Tier One Capital Ltd (Investment Adviser) +44 (0) 191 222 0099
Brendan O'Grady
Apex Fund Administration Services (UK) Limited (Secretary) +44 (0) 1245 398984
Suzanna Waterhouse
Cavendish Capital Markets Limited (Sponsor, Broker and Financial Adviser) +44 (0) 207 220 0500
Andrew Worne
Develop North PLC is a closed-end investment company listed on the main market
of the London Stock Exchange and specialises in providing finance to the
residential and commercial property sector.
The Company's investment adviser is Newcastle upon Tyne based Tier One Capital
Ltd. Tier One Capital is a wealth management and fund management firm
providing financial advice services and bespoke tailored lending to the
property development market.
ENDS
Interim Report 2025
The Interim Report will shortly be available on the Company's website
(www.developnorth.co.uk (http://www.tocpropertybackedlendingtrust.co.uk) ) or
in hard copy format from the Company's Registered Office.
A copy of the Interim Report will be submitted to the FCA's National Storage
Mechanism and will be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
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