DJ Zentra Group plc: Interim Results for the six months ending 31 December 2024
Zentra Group plc (ZNT)
Zentra Group plc: Interim Results for the six months ending 31 December 2024
28-March-2025 / 07:00 GMT/BST
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28 March 2025
ZENTRA GROUP PLC
("Zentra", "the Company" or "the Group" or "ZNT")
Interim Results for the six months ending 31 December 2024
Zentra Group PLC, the Manchester based residential developer focused on the North of England, announces its half year
results for the six months ended 31 December 2024.
Financial highlights
-- Revenue of GBP1.97m (H1 FY24 for the six-month period to 31 December 2023: GBP9.15m). This primarily reflects
a reduction in development sales and construction service activity.
-- Gross loss increased by GBP0.87m to GBP0.71m (H1 FY24: profit GBP0.16m) as a result of increased impairments in
the current year with the strategy to market bulk sales of some inventory, with a charge of GBP1.0m (H1 FY24: GBP0.33m)
being recognised in the period. However, the Group recorded a smaller loss before tax of GBP0.07m (H1 FY24: loss
GBP1.94m) following the disposal of four entities during the period.
-- Basic loss per share (pence) of 0.2 (H1 FY24: 5.2).
-- Net debt of GBP11.24m (H2 FY24: GBP16.98m) a decrease of GBP5.74m reflecting the disposal of entities with debt
obligations and a GBP2.1m shareholder debt waiver.
-- Inventory reduced in the period by GBP7.42m to GBP5.85m (H2 FY24: GBP13.27m) reflecting completed sales and
entity disposals.
Operational highlights
-- Significant debt reduction and restructuring, including the writing off of GBP2.1m in shareholder debt (as
well as securing a lower interest rate) has strengthened our balance sheet, reducing financial risk, and increasing
investment capacity for future developments.
-- Expanding our development pipeline with the GBP3 million investment in One Victoria, Manchester, a
high-profile development project.
-- Transitioned from the Main Market of the London Stock Exchange to the Access Segment of AQUIS Stock
Exchange.
Post Period Events
-- Sale of 19 of the 24 plots at One Meadow, Eccleshill to a Registered Housing Provider for GBP4.0m.
-- Contract exchange on the acquisition of a parcel of land at Old Mill St, Manchester for GBP1.4m.
-- Extended a GBP0.5m unsecured loan to 15th March 2026 at a reduced interest rate of 6% (previously 8%).
-- Securing a sale at auction of land at Churchgate, Leicester for GBP0.25m.
Outlook
-- On track to continue to sell down of inventory in FY25, including 5 plots at One Meadow, Eccleshill and
land at Seaton House, Stockport.
-- Continued development management of the 129-unit One Victoria project in Manchester and commencement of a
project in New Islington, Manchester.
-- With a determined focus on finding good development and development management opportunities, we are
cautiously exploring several promising options in core city centre locations for apartments, as well as high-demand
areas for new build housing projects.
Commenting on the Group's performance, Jason Upton, Chief Executive Officer said:
"This has been a pivotal period for the Group, marked not only by significant operational and financial progress but
also by our successful rebranding as Zentra and our transition to the Aquis Stock Exchange. These changes reflect our
ambition to create a more focused, agile, and opportunity-driven business, positioning us for the next phase of growth.
We have materially strengthened our balance sheet through asset disposals, debt reduction, and the waiver of
shareholder loans, giving us a stronger foundation and greater financial flexibility. While the decision to actively
market some inventory has impacted short-term margins, it has been the right step in aligning the Group for sustainable
value creation.
The expansion of our pipeline, including the investment into One Victoria in Manchester and New Islington, underlines
our commitment to delivering high-quality developments in city centre and high-demand housing locations across the
North. With a revitalised brand, an experienced team, and a clearer strategic direction, we are well-placed to
capitalise on future opportunities and deliver long-term shareholder value.
Contacts
Zentra Group plc
Jason Upton
Chief Executive Officer
Email: jason.upton@zentragroup.co.uk
Nick Courtney
Finance Director
Email: nick.courtney@zentragroup.co.uk
Hybridan LLP (AQSE Corporate Adviser and AQSE Broker)
Claire Louise Noyce
Email: claire.noyce@hybridan.com
Tel: +44 (0)203 764 2341
About Zentra Group plc
Zentra Group is a property development and management Company. It focuses on the residential sector primarily in the
North of England, seeking out value and maximising opportunities for investors. The Company is currently listed on the
Access Segment of the Aquis Stock Exchange Growth Market, trading under the ticker ZNT.
CHIEF EXECUTIVE'S REVIEW
This update provides an overview of our activities for the six months ended 31 December 2024.
During this period, our principal focus has been on positioning ourselves better to take advantages of opportunities in
the property development sector and to deal with the accompanying challenges, while progressing with the direct
development and development management projects currently on our books.
Strategic Restructuring and Financial Position Improvement
During the period, we implemented a strategic restructuring that significantly strengthened our financial position at
the same time as undertaking a comprehensive review of our operations to enhance efficiency and focus solely on core
activities and our listing status.
Key outcomes of this restructuring include:
-- Streamlining operations by reducing non-core activities, particularly in property services, to
concentrate on residential development and land acquisition. We have decided to exit the co-living market, as it no
longer aligns with our long-term objectives. This shift allows us to focus on family homes and residential
apartment developments, which offer greater returns and reduced operational complexity. We now have two brands
Zentra Living, which offers city centre apartments, and Zentra Homes, which provides family housing.
-- Debt Reduction and Restructuring: Writing off GBP2 million in shareholder debt (as well as securing a lower
interest rate) has strengthened our balance sheet, reducing financial risk, and increasing investment capacity for
future developments.
-- Expanding our development pipeline with the GBP3 million investment in One Victoria, Manchester, a
high-profile development project.
-- Transitioning to the Access Segment of the Aquis Stock Exchange. This move provides us with greater
flexibility in capital markets and is a market more aligned with the entrepreneurial spirit within our
organisation.
Delivering Our Existing Projects
We have made notable progress on key developments:
-- One Meadow, Eccleshill: In October 2024, we completed this development, marking the successful delivery
of 24 high-specification family homes under the Zentra Homes brand.
-- One Victoria, Manchester: 129 apartments. In view of some construction delays, completion is now expected
in Q3 2025. Key milestones include the completion of Steel Framing Systems (SFS) installation, façade works,
glazing, and significant progress on interior partitions, joinery, and mechanical, electrical, and plumbing (MEP)
installations. The show apartment marketing suite is now complete and available for viewings.
-- New Islington, Manchester: Post the end of December 2024 reporting period, in March 2025, after months of
negotiation, we entered into a conditional contract to acquire a parcel of land on Old Mill Street, Manchester, M4
6BX. Legal completion is subject to planning approval and reliance documentation, expected in April 2025. The
development will contain 40 residential apartments and 1 commercial unit with construction targeted to commence in
Q4 2025 lasting 18-months. This is the first acquisition under our newly launched Zentra Living brand, focused on
delivering design-led residential apartments for urban professionals.
Sales of Property and Land
Generating cash flow through sales is a key priority. Our recent sales activity includes:
-- One Meadow, Eccleshill: Again, post reporting period, in February 2025, we completed the sale of 19 out
of 24 units to a registered housing provider, allowing full repayment of the development finance facility. Of the
remaining 5 units, 2 are reserved and 3 are being marketed for private sale.
-- Seaton House, Stockport: The building was sold in July 2024 for GBP600,000, and contracts have been
exchanged for the sale of the rear land (an existing car park) for GBP400,000, with completion expected in Q2 2025.
-- Churchgate, Leicester: A recently resolved rights-of-light dispute allowed us to bring this land back to
market and it sold at auction in March 2025 (see Note 17 to the financial statements).
-- One Victoria, Manchester: 59 units have been reserved or exchanged, with 70 units remaining unsold. We
aim to secure pre-sales for all remaining units before practical completion of the project in Q3 2025.
Strengthening the Leadership Team
During the period under review, we made key senior hires to enhance our strategic capabilities:
-- Nick Courtney joined as Finance Director, bringing 25 years' expertise in real estate, construction, and
corporate advisory services.
-- Scott Nicol was appointed as Group Head of Investment, bringing 20 years' experience in the UK real
estate market including direct involvement in the origination and execution of over GBP3 billion in investment and
development projects
-- Ben Scandrett took on the role of Group Development Director, leading our development activities. Ben has
over 25 years' experience in both residential and commercial property markets managing complex, multi-stakeholder
projects across the UK.
Market Environment and Outlook
Despite macroeconomic challenges such as rising interest rates and inflationary pressures, we remain confident in the
long-term prospects of residential development, particularly in the northern cities where we operate. Demand for
high-quality homes remains strong, and we believe our strategic focus on the right markets will yield positive results
in the second half of FY25.
Our key priorities moving forward include:
-- Delivering key projects, including completing One Victoria, Manchester (Q3 2025) and commencing
construction at New Islington, Manchester (Q4 2025).
-- Maximising sales, including selling the remaining 70 units at One Victoria, Manchester and 5 unsold units
at One Meadow, Eccleshill.
-- Expanding our development pipeline through strategic land acquisitions and partnerships.
Conclusion
We have made significant progress during the period under review, overcoming challenges with decisive action and a
clear strategic direction. As we move forward, our focus remains on delivering value to shareholders, employees, and
the communities we serve. With a strengthened leadership team and a streamlined business model, we are well positioned
for continued success.
FINANCE REVIEW
For the six months ended 31 December 2024, revenue decreased by GBP7.18m (-78%) to GBP1.97m (H1 FY24: GBP9.15m). This
primarily reflects reduced activity in development sales and construction services.
H1 FY25 H1 FY24 Change Change
Revenue
GBPm GBPm GBPm %
Development management fees & other income 0.27 0.29 (0.02) (7%)
Development sales 1.31 4.99 (3.68) (74%)
Construction * 0.23 3.70 (3.47) (94%)
Property Services 0.10 0.11 (0.01) (9%)
Corporate 0.06 0.06 - -
TOTAL 1.97 9.15 (7.18) (78%)
* Construction revenues from the refurbishment of Co-Living properties are being phased out in line with the current strategic focus.
Notwithstanding the reduction in activity compared to the prior period, developments sales revenue remained the largest contributor to Group revenue, accounting for 66% of total revenue. This revenue was driven mainly by the sale of the building at Seaton House, Stockport for GBP600,000, two completions at Oscar House and one completion at St Petersgate, Stockport.
Construction services delivered revenue of GBP0.23m in the period (H1 FY24: GBP3.70m), reflecting building activity supplied to related parties (predominantly Robin Hood Property Development Ltd) on Co-Living properties. The reduction in revenue reflects the Group's continued strategic move away from the provision of Co-Living and property management services.
There was a small reduction in development management fee income of GBP0.02m to GBP0.27m (H1 FY24: GBP0.29m), and this was delivered from three projects: related party projects at One Victoria, Manchester, at One Heritage Tower, Salford, and Bee Kitchens, Salford.
Property Services also saw a small decrease over the same period last year from GBP0.11m in H1 FY24 to GBP0.10m in H1 FY24. The GBP0.10m of revenue relates to property management fees.
Gross profit reduced by GBP0.87m to a loss of GBP0.71m (H1 FY24: profit GBP0.16m) as a result of higher impairments in the current year. The impairment charge in the period of GBP1.05m (H1 FY24: GBP0.33m) predominantly relates to the plots at One Meadow, Eccleshill following a shift in strategy to market the majority of plots as a bulk sale rather than as individual sales, as well as an impairment to the value of the plot at Churchgate, Leicester. The gross margin was also lower than targeted due to a number of schemes within the Group having previously been impaired and therefore there is no margin to be recognised on these schemes as we complete on sales in the current period.
Administrative expenses were GBP1.35m in the period (H1 FY24: GBP1.53m). This represents an overall GBP0.18 decrease in overheads arising from a decrease in staff costs and consultancy costs. The Group remains focused on a tight control of overheads, whilst introducing some investment in cost to benefit revenue streams.
The Group recorded an operating profit of GBP0.50m (H1 FY24: loss of GBP1.37m). Whilst this was largely due to the profit of GBP2.56m (H1 FY24: Nil) on disposal of four entities from the Group shown in Note 8 to the financial statements, this was offset by the increased asset impairment charges in the period. Finance costs were flat compared to last year at GBP0.57m (H1 FY24: GBP0.57m). Basic loss per share was 0.2 pence (H1 FY24: loss 5.2 pence).
There have been some significant changes to the Group balance sheet in the period to 31 December 2024.
On 28 October 2024, One Heritage Bank Street Limited and One Heritage Lincoln House Limited and the related party OH UK Holdings 2 Limited entered into a 12 month loan facility agreement with Hilco Real Estate Finance UK Ltd of GBP2.33m secured against the completed properties held by those companies, of which GBP1.6m is attributable to Bank Street, Sheffield and Lincoln House, Bolton.
On 22 November 2024, the Company completed on the acquisition of a 30% stake in the entity that owns the One Victoria project by purchasing debt and shares to the value of GBP3.0m from One Heritage Property Development Limited in Hong Kong ("OHPD"). The acquisition was funded by drawing down GBP3.0m from the then remaining shareholder loan facility ("Previous Facility"). The impact of this acquisition is shown in Note 10 to the financial statements.
Simultaneous to the investment in One Victoria, Manchester, the Company completed the sale of a portfolio of completed residential and commercial properties, valued at approximately GBP7.0m, to OH UK Holdings Limited ("OHUK"), a company connected with OHPD. This portfolio included residential properties at Bank Street, Sheffield, Lincoln House, Bolton and Oscar House, Manchester, as well as the commercial unit at St Petersgate, Stockport. With approximately GBP2.0m of debt linked to Oscar House, the net proceeds of the portfolio sale were GBP5.0m and those proceeds were applied to reduce the Previous Facility from GBP13.8m million to GBP8.8m.
As part of that restructuring, OHPD entered into a new loan agreement with OHUK at an interest rate of 6%. The loan has a repayment date of 31 December 2025, with an option to extend for up to 36 months. OHUK is a related party, sharing the same majority shareholders as the Company and OHPD. GBP6.7m of this new loan was drawn down on completion and used to partially repay the Previous Facility. The balance of GBP2.1m of the Previous Facility was then written off by OHPD as part of the restructuring, and the Previous Facility was settled in full at completion and terminated. At the same time, a new loan facility of GBP7.0m (the "New Facility") was provided to the Group by OHUK at an interest rate of 6%, lower than the previous rate of 7%, such facility to become available from the date of completion of the property transactions outlined above. The loan has a repayment date of 31 December 2025, with an option for the Group to extend for a period of up to 36 months. OHUK also agreed to provide access to an additional GBP1.0m of funding (on the same terms as the New Facility) for a period up to 18 months to support the Group with short-term liquidity whilst development inventory is realised.
As a result of the above transactions, net debt at 31 December 2024 was GBP11.24m (30 June 2024: GBP16.98m), a reduction of GBP5.74m or 34%. Inventory reduced in the period by GBP7.42m to GBP5.85m (30 June 2024: GBP13.27m) reflecting the bulk disposal to OHUK outlined above as well as the continued sell-down of inventory on a property-by-property basis.
The surplus of proceeds over net assets (following the write-off of intercompany positions owed to the Group) from the disposals to OHUK described above of GBP2.56m has been recognised as an Exceptional Item in the Consolidated Statement of Comprehensive Income. The loan waiver of GBP2.1m has been recognised as a Capital Contribution Reserve in the Consolidated Statement of Financial Position. The latter is also shown in the Consolidated Statement of Changes in Equity.
RISK MANAGEMENT AND PRINCIPAL RISKS
The ability of the Group to operate effectively and achieve its strategic objectives is subject to a range of potential risks and uncertainties. The Board and the broader management team take a pro-active approach to identifying and assessing internal and external risks. The potential likelihood and impact of each risk is assessed and mitigation policies are set against them that are judged to be appropriate to the risk level. Management constantly updates plans and these are monitored by the Audit and Risk Committee and reported to the Board.
The principal risks that the Board sees as impacting the Group in the coming period are divided into six categories, and these are set out below together with how the Group mitigates such risks.
1. Strategy: Government regulation, planning policy and land availability.
2. Delivery: Inadequate controls or failures in compliance will impact the Group's operational and financial performance.
3. Operations: Availability and cost of raw materials, sub-contractors and suppliers.
4. People & Culture: Attracting and retaining high-calibre employees.
5. Finance & Liquidity: Availability of finance and working capital.
6. External Factors: Economic environment, including housing demand and mortgage availability.
1. Strategy: Government regulation, planning policy, and land availability
A risk exists that changes in the regulatory environment may affect the conditions and time taken to obtain planning approval and technical requirements including changes to Building Regulations or Environmental Regulations, increasing the challenge of providing quality homes where they are most needed. Such changes may also impact our ability to meet our margin or site return on capital employed (ROCE) hurdle rates (this ratio can help to understand how well a company is generating profits from its capital as it is put to use). An inability to secure sufficient consented land and strategic land options at appropriate cost and quality in the right locations to enhance communities, could affect our ability to grow sales volumes and/or meet our margin and site ROCE hurdle rates. The Group mitigates against these risks by liaising regularly with experts and officials to understand where and when changes may occur. In addition, the Group monitors proposals by the Government to ensure the achievement of implementable planning consents that meet local requirements and that exceed current and expected statutory requirements. The Group regularly reviews land currently owned, committed and pipeline prospects, underpinned with robust key business control where all land acquisitions are subject to formal appraisal and approved by the senior executive team.
2. Delivery: Inadequate controls or failures in compliance will impact the Group's operational and financial performance
A risk exists of failure to achieve excellence in construction, such as design and construction defects, deviation from environmental standards, or through an inability to develop and implement new and innovative construction methods. This could increase costs, expose the Group to future remediation liabilities, and result in poor product quality, reduced selling prices and sales volumes.
To mitigate this the Group liaises with technical experts to ensure compliance with all regulations around design and materials, along with external engineers through approved panels. It also has detailed build programmes supported by a robust quality assurance.
3. Operations: Availability and cost of raw materials, sub-contractors and suppliers
A risk exists that not adequately responding to shortages or increased costs of materials and skilled labour or the failure of a key supplier, may lead to increased costs and delays in construction. It may also impact our ability to achieve disciplined growth in the provision of high quality homes.
Following a strategic review, the Group has taken the opportunity to cease our participation in in-house construction of residential development projects, and this will take effect upon the completion of our current projects under construction.
4. People & Culture: Attracting and retaining high-calibre employees
A risk exists that increasing competition for skills may mean we are unable to recruit and/or retain the best people. Having sufficient skilled employees is critical to delivery of the Group's strategy, whilst maintaining excellence in all of our other strategic priorities.
To mitigate this the Group has a number of People Strategy programmes which include development, training and succession planning, remuneration benchmarking against competitors, and monitoring of employee turnover, absence statistics and feedback from exit interviews.
5. Finance & Liquidity: Availability of finance and working capital
A risk exists that lack of sufficient borrowing and surety facilities to settle liabilities and/or an ability to manage working capital, may mean that we are unable to respond to changes in the economic environment, and take advantage of appropriate land buying and operational opportunities to deliver strategic priorities.
To minimise this risk, the Group has a disciplined operating framework with an appropriate capital structure, and management have stress tested the Group's resilience to ensure the funding available is sufficient. This process has regular management and Board attention to review the most appropriate funding strategy to drive the Group's growth ambitions.
6. External Factors: Economic environment, including housing demand and mortgage availability
A risk exists that changes in the UK macroeconomic environment may lead to falling demand or tightened mortgage availability, upon which most of our customers are reliant, thus potentially reducing the affordability of our homes. This could result in reduced sales volumes and affect our ability to deliver profitable growth.
To mitigate this risk, the wider Group has a significant presence in Hong Kong, China and Singapore and the majority of overseas purchasers are cash buyers. The Group continually monitors the market at Board, Executive Committee and team levels, leading to amendments in the Group's forecasts and planning, as necessary. In addition there are comprehensive sales policies, regular reviews of pricing in local markets and development of good relationships with mortgage lenders. This is underpinned by a disciplined operating framework with an appropriate capital structure and strong balance sheet.
STATEMENT OF DIRECTOR'S RESPONSIBILITIES
in respect of the half-yearly financial report
We confirm that to the best of our knowledge: - the condensed set of financial statements has been prepared in accordance with IAS 34 Interim FinancialReporting as adopted for use in the UK; - the interim management report includes a fair review of the information required by:
-- DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important eventsthat have occurred during the first six months of the financial year and their impact on the condensed set offinancial statements; and a description of the principal risks and uncertainties for the remaining six months ofthe year; and
-- DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that havetaken place in the first six months of the current financial year and that have materially affected the financialposition or performance of the entity during that period; and any changes in the related party transactionsdescribed in the last annual report that could do so.
The directors of Zentra Group PLC are listed on the company website, www.zentragroup.co.uk
By order of the Board
Jason Upton
Chief Executive Officer
27 March 2025
FINANCIAL STATEMENTS
Consolidated statement of comprehensive income
For the six months ended 31 December 2024
Six months to Six months to
GBP unless stated Notes 31 December 31 December
2024 2023
Revenue 6 1,972,209 9,153,637
Revenue - Development management fees & other income 270,307 290,411
Revenue - Development sales 1,315,573 4,998,598
Revenue - Construction 234,446 3,696,623
Revenue - Property services 95,883 112,005
Revenue - Corporate 56,000 56,000
Cost of sales 6 (2,678,931) (8,991,637)
Cost of sales - Development management fees & other income (107,585) -
Cost of sales - Development sales (1,263,356) (5,095,322)
Cost of sales - Construction (224,607) (3,519,421)
Cost of sales - Property services (37,914) (50,781)
Cost of sales - Impairment of inventory (1,045,469) (326,113)
Gross profit/(loss) (706,722) 162,000
Other income 83
Administration expenses 7 (1,348,885) (1,534,662)
Exceptional item 8 2,558,986 -
Operating profit/(loss) 503,379 (1,372,579)
Finance expense (569,588) (565,495)
Profit/(loss) before taxation (66,209) (1,938,074)
Taxation (26,514) (67,301)
Profit/(loss) after taxation (92,723) (2,005,375)
Other comprehensive income - -
COMPREHENSIVE LOSS attributable to shareholders (92,723) (2,005,375)
Weighted average shares in issued over the period 38,678,333 38,440,561
(Loss) per share (GBp) (0.2) (5.2)
The accompanying notes form an integral part of the financial statements.
Consolidated statement of financial position
As at 31 December 2024
As at
As at
GBP unless stated Notes 30 June
31 December 2024
2024
ASSETS
Non-current assets
Property, plant and equipment 137,582 177,204
Intangible asset - 1,680
137,582 178,884
Current assets
Cash and cash equivalents 125,284 88,161
Inventory 9 5,854,794 13,273,743
Investment in associate 10 3,000,000 -
Trade and other receivables 11 1,117,810 1,312,476
10,097,888 14,674,380
TOTAL ASSETS 10,235,470 14,853,264
LIABILITIES
Non-current liabilities
Borrowings 13 59,381 11,097,615
59,381 11,097,615
Current liabilities
Trade and other payables 12 941,459 1,826,470
Borrowings 13 11,183,516 5,877,673
12,124,975 7,704,143
TOTAL LIABILITIES 12,184,356 18,801,758
EQUITY
Share capital 14 386,783 386,783
Share premium 14 4,753,325 4,753,325
Capital contribution reserve 13 2,092,331 -
Retained earnings (9,181,325) (9,088,602)
TOTAL EQUITY (1,948,886) (3,948,494)
TOTAL LIABILITIES AND EQUITY 10,235,470 14,853,264
Shares in issue 38,678,333 38,678,333
Net asset value per share (GBp) (5.0) (10.2)
The accompanying notes on form an integral part of the financial statements.
Consolidated statement of cash flows
For the six months ended 31 December 2024
Six months to Six months to
GBP unless stated 31 December 31 December
2024 2023
Cash flows from operating activities
Loss for the period before tax (66,209) (1,938,074)
Adjustments for:
Finance expense 569,588 565,495
Profit on disposal of subsidiary (2,558,986) -
Profit on disposal of fixed assets 8,733 -
Amortisation of intangible asset 1,680 116
Depreciation of property, plant and equipment 32,529 52,330
Movement in working capital:
(Increase)/Decrease in trade and other receivables* (289,302) (2,344,471)
Decrease/(Increase) in inventories* 874,885 3,540,306
Increase in trade and other payables* 6,981,924 548,102
Cash from operations 5,554,842 423,804
Taxation paid (26,514) (67,601)
Net cash generated from / (used in) operating activities 5,528,328 356,203
Cash flows from investing activities
Investment in associate (3,000,000) -
Purchases of property, plant and equipment (1,475) (1,423)
Net cash (used in)/generated from investing activities (3,001,475) (1,423)
Financing cash flows
Issue of share capital - -
Interest paid (655,913) (2,151,731)
Proceeds of third party borrowing 688,248 4,067,218
Payment of third party loans* 2,011,153 (4,118,054)
Proceeds of related party borrowing 10,700,630 1,712,654
Payment of related party loans (15,137,225) -
Payments made in relation to lease liabilities (86,623) (43,312)
Net cash (used in)/generated from financing activities (2,479,730) (533,225)
Net change in cash and cash equivalents 47,123 (178,445)
Opening cash and cash equivalents at 1 July* 78,161 303,816
Closing cash and cash equivalents at 31 December 125,284 125,371
* Figures have been adjusted to remove the net assets of the disposed entities at 30 June 2024 as shown in Note 8.
The accompanying notes on form an integral part of the financial statements.
Consolidated statement of changes in equity
For the six months ended to 31 December 2024
Share Share Total
GBP Retained earnings Capital contribution reserve
capital premium Equity
Balance at 01 July 2024 386,783 4,753,325 (9,088,602) - (3,948,494)
Loss for the period - - (92,723) 2,092,331 1,999,608
Other additions - - - - -
Balance at 31 December 2024 386,783 4,753,325 (9,181,325) 2,092,331 (1,948,886)
For the six months ended 31 December 2023
Share Share Total
GBP Retained earnings Capital contribution reserve
Capital premium Equity
Balance at 01 July 2023 386,783 4,753,325 (5,708,824) - (568,716)
Loss for the period - - (2,005,375) - (2,005,375)
Other additions - - - - -
Balance at 31 December 2023 386,783 4,753,325 (7,714,199) - (2,574,091)
For the year ended 30 June 2024
Share Share Retained Capital contribution Total
GBP earnings reserve equity
capital premium
Balance at 01 July 2023 386,783 4,753,325 (5,708,824) - (568,716)
Loss for the period - - (3,379,378) - (3,379,378)
Other comprehensive income for the - - - - -
period
Balance at 30 June 2024 386,783 4,753,325 (9,088,602) - (3,948,494)
The accompanying notes form an integral part of the financial statements.
Notes to the interim financial statements
For the six months ended to 31 December 2024 1. Reporting entity
Zentra Group PLC (the "Company") is a public limited company, limited by shares, incorporated in England and Wales under the Companies Act 2006. The address of its registered office and its principal place of trading is 80 Mosley Street, Manchester, M2 3FX. The principal activity of the company is that of property development.
These condensed consolidated interim financial statements ("interim financial statements") as at the end of the six month period to 31 December 2024 comprise of the Company and its subsidiaries. 2. Basis of preparation
These interim financial statements for the six months ended 31 December 2024 have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK, and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 30 June 2024 ("last annual financial statements"). They do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS Standards. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements.
The annual financial statements of the Group are prepared in accordance with UK-adopted international accounting standards. As required by the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the company's published consolidated financial statements for the year ended 30 June 2024.
These interim financial statements were authorised for issue by the Company's board of directors on 27 March 2025.
Going concern
Notwithstanding net liabilities of GBP1,948,886 as at 31 December 2024 (30 June 2024: net liabilities GBP3,948,494) and a loss for the interim period then ended of GBP92,723 (H1 FY24: GBP2,005,375), the financial statements have been prepared on a going concern basis which the Directors consider to be appropriate for the following reasons.
The directors have prepared a cash flow forecast on a consolidated basis for the period to 30 June 2026 which indicates that, taking account of reasonably possible downsides, the Group will have sufficient funds to meet its liabilities as they fall due for that period using the proceeds from:
-- existing resources held by the Group
-- the forecast continued sale of development property inventory; and
-- in the event of need, an additional GBP1m increase to the debt facility provided by OH UK Holdings Limitedwhich can be drawn down as required.
As with any company placing reliance on other group/related entities for financial support, the Directors acknowledge that although there can be no absolute certainty that this support will continue, at the date of approval of these financial statements, they have substantive reasons to believe that it will do so.
Consequently, the directors are confident that the Company and its subsidiaries will have sufficient funds to continue to meet their liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis. 3. Use of judgements and estimation uncertainty
In preparing these Interim Financial Statements, management has made judgements, estimates and assumptions that affect the application of the Group's accounting policies and the reported amounts in the financial statements. The management continually evaluate these judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses based upon historical experience and on other factors that they believe to be reasonable under the circumstances. Actual results may differ from the judgements, estimates and assumptions.
The key areas of judgement and estimation are: - The carrying value of inventory: Under IAS 2: Inventories the Group must hold developments at the lowerof cost and net realisable value. The Group applies judgement to determine the net realisable value of developmentsat a point in time that the property is partly developed and compares that to the carrying value. The Group hasundertaken an impairment review of all of the Inventory and determined that an impairment is appropriate on two ofthe developments. - Going concern: The Directors have prepared forecast financial information for the period to June 2026.This forecast requires management to make judgements and assumptions with regard to future performance, such as thetiming of completion of development projects, and subsequent sales of inventory as well as the availability ofresources to meet liabilities as they fall due. - Recognition of investment in associate: The Group applies judgement to determine how to recognise theequity investment acquired in Zentra Great Ducie Street Limited. The Directors have assessed that the level ofinfluence over that entity is insufficient to recognise it as a subsidiary of the Group. Accordingly the investeehas been treated as an associate and recognised using equity accounting. 4. Accounting policies
The accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 30 June 2024. The accounting policies will also be reflected in the Group's consolidated financial statements as at and for the year ending 30 June 2025.
No new accounting standards were adopted in the year that had a significant impact on these financial statements. 5. Operating segments
The Group operates four segments: Developments, Construction, Property Services and Corporate.
All the revenues generated by the Group were generated within the United Kingdom. Segment operating profit or loss is used as a measure of performance as management believe this is the most relevant information when evaluating the performance of a segment.
For the period ended 31 December 2024:
Property
GBP unless stated Developments Construction Corporate Total
Services
Revenue 1,585,880 234,446 95,883 56,000 1,972,209
Cost of sales (1,364,136) (224,607) (44,719) - (1,633,462)
Impairment of inventory (1,045,469) - - - (1,045,469)
Gross (loss)/profit (823,725) 9,839 51,164 56,000 (706,722)
Depreciation - - - (32,606) (32,606)
Administration expenses (353,295) - (54,981) (908,003) (1,316,279)
Exceptional item - - - 2,558,986 2,558,986
Operating (loss)/profit (1,177,020) 9,839 (3,817) 1,674,377 503,379
Finance expense (202,192) - - (367,396) (569,588)
Taxation - - - (26,514) (26,514)
(Loss)/profit for the year (1,379,212) 9,839 (3,817) 1,280,467 (92,723)
For the period ended 31 December 2023:
Property
GBP unless stated Developments Construction Corporate Total
Services
Revenue 5,289,009 3,696,623 112,005 56,000 9,153,637
Cost of sales (5,095,322) (3,519,421) (50,781) - (8,665,524)
Impairment of inventory (326,113) - - - (326,113)
Gross (loss)/profit (132,426) 177,202 61,224 56,000 162,000
Depreciation - - - (52,446) (52,446)
Administration expenses (416,790) - (243,354) (821,989) (1,482,133)
Operating (loss)/profit (549,216) 177,202 (182,130) (818,435) (1,372,579)
Finance expense (169,493) - - (396,002) (565,495)
Taxation - - (400) (66,901) (67,301)
(Loss)/profit for the year (718,709) 177,202 (182,530) (1,281,338) (2,005,375)
Segment operating profit or loss is used as a measure of performance as management believe this is the most relevant information when evaluating the performance of a segment. 6. Revenue
The Group generates its revenue primarily from development management agreements, development sales and construction services.
Six months to Six months to
GBP unless stated 31 December 31 December
2024 2023
Revenue
Development sales 1,315,573 4,998,598
Development management 270,307 290,411
Construction 234,446 3,696,623
Property services 95,883 112,005
Corporate 56,000 56,000
1,972,209 9,153,637
Cost of sales
Development sales (1,364,136) (5,095,322)
Impairment of inventory (see note 8) (1,045,469) (326,113)
Construction (224,607) (3,519,421)
Property services (44,719) (50,781)
Corporate - -
(2,678,931) (8,991,637)
Gross (loss)/profit (706,722) 162,000
Developments consist of sales of properties owned and developed by the Group and three development management agreements with One Heritage Tower Limited, One Heritage Great Ducie Street Limited and Bee Kitchens Limited:
-- One Heritage Tower Limited: The Group earns a management fee of 0.75% of costs incurred to date permonth, being GBP80,178 (31 December 2023: GBP70,530) and a 10% share of net profit generated by the development throughthe agreement with One Heritage Tower Limited. The Group is also entitled to 1% of any external debt or equityfunding raised on behalf of the development.
-- One Heritage Great Ducie Street Limited: The Group earned a management fee of GBP103,080 (31 December 2023:GBP103,080) through the agreement with One Heritage Great Ducie Street.
-- Bee Kitchens Limited: The Group earned a management fee of GBP87,050 (31 December 2023: Nil) as well as atransaction fee and finance procurement fee.
The Group has not recognised any revenue linked to the profit share element of these agreements as the transaction price is variable and the amount cannot be reliably determined at this time. This is because the developments are either yet to commence construction or have reached practical build completion but sales values are not yet fully committed, and as such there is too much uncertainty to reliably estimate expected revenue.
During the period GBP1,215,000 development sales revenue was generated from external parties through the sale of 3 units in completed developments and the sale of Seaton House (2023: GBP4,998,598). In the Oscar House development, 2 units were sold during the period generating revenue of GBP470,000. The St Petersgate development sold 1 units generating GBP145,000 in revenue. The Seaton House development generated revenue of GBP600,000.
Construction generates the majority of revenue from two entities: Robin Hood Property Development Limited and One Heritage North Church Limited. The Group receives a cost plus 5.0% margin on all works undertaken for Robin Hood Property Development Limited, recognising GBP222,355 (31 December 2023: GBP458,902) of revenue in the year. The Group has also generated revenue from work for One Heritage North Church Limited in the period on a cost plus 5.0% margin basis, as well as revenue for work for One Heritage St Petersgate Limited and One Heritage Bank Street Limited following their sale from the Group.
The development management and construction revenues have been generated through related parties.
Property Services generated revenue from management fees that are based on a percentage of gross rental collected for clients and through transaction fees for each Co-Living property bought and sold, including that for Robin Hood Property Development Limited, a related party. These activities generated revenue in the period of GBP95,883 (31 December 2023: GBP112,005).
The Corporate revenue is from contracts signed with related parties Robin Hood Property Development Limited, generating revenue of GBP50,000 (2023: GBP50,000) and One Heritage Property Rental Limited, recognising revenue of GBP6,000 (2023: GBP6,000) and is in consideration for a range of administration services and use of the Group's office. 7. Administration expenses
Six months to Six months to
GBP unless stated 31 December 31 December
2024 2023
The aggregate remuneration comprised:
- Wages and salaries 615,886 690,185
- National insurance 64,664 76,603
- Pension costs 8,399 10,667
Staff costs 688,949 777,455
Other administration expenses 659,936 757,207
1,348,885 1,534,662
Average number of employees 22 28 8. Exceptional Item
GBP unless stated OH Oscar House OH Lincoln House OH Bank Street OH St Petersgate Total
Net assets at 30 June 2024 (899,936) 801,450 (1,984,069) (1,132,926) (3,215,481)
Trading movement (216,650) 30,213 (34,419) (46,498) (267,354)
Total (1,116,586) 831,663 (2,018,488) (1,179,424) (3,482,835)
Intercompany write-off 3,083,093 - 1,671,702 1,169,054 5,923,849
Net assets at 22 November 2024 1,966,507 831,663 (346,786) (10,370) 2,441,014
Consideration received 5,000,000
Net assets at 22 November 2024 (2,441,014)
Profit on disposal 2,558,986
There was no Exceptional Item recognised in the six months to 31 December 2023. 9. Inventory
30 June
GBP unless stated 31 December 2024
2024
Residential developments
- Land 1,617,426 3,427,634
- Construction and development costs 3,667,984 8,406,730
- Capitalised interest 569,384 1,439,379
5,854,794 13,273,743
Due to further expenditures as well as the decision to market the development through bulk sales, the Group has taken the decision to further impair the value of its One Meadow development at Eccleshill. The plot at Churchgate, Leicester was also impaired during the period. The impairment totalled GBP1,006,865 at 31 December 2024 and the charge for the period ended 31 December 2024 was GBP1,045,469 (31 December 2023: GBP326,113). 10. Investment in Associate
30 June
GBP unless stated 31 December 2024
2024
Opening - -
Additions - cost of debt acquired 2,999,970 -
Additions - cost of equity acquired 30 -
Closing 3,000,000 -
On 22 November 2024 the Group invested GBP3,000,000 to acquire GBP2,999,970 of debt, and GBP30 for a 30% stake, in Zentra Great Ducie Street Limited (the 70% controlling interest is owned by One Heritage Property Development Limited incorporated in Hong Kong). This has been recognised using the equity method of accounting.
Zentra Great Ducie Street Limited is undertaking the development of the One Victoria project in Manchester, where the Group also serves as Development Manager. Scheduled for completion in H1 FY26, One Victoria comprises 129 apartments and 2 commercial units. 11. Trade and other receivables
30 June
GBP unless stated 31 December 2024
2024
Trade receivables 43,454 25,407
Other debtors 388,298 392,827
Prepaid sales fees and commissions - 55,200
Other prepayments and other income 61,473 385,219
Tax receivable 59,800 35,206
Related party receivable 564,785 418,617
1,117,810 1,312,476
Related party receivables include GBP301,757 (30 June 2024: GBP248,564) due from Robin Hood Property Development Limited, GBP113,121 due from One Heritage Tower Limited (30 June 2024: GBP48,163) and GBP99,746 due from Bee Kitchens Limited (30 June 2024: nil) all of whom are related parties.
Other debtors includes a Construction Industry Scheme tax receivable from HMRC of GBP252,980 (30 June 2024: GBP252,980) and utility costs receivable from the management of client properties.
Management consider that the credit quality of the various receivables is good in respect of the amounts outstanding, there have been no increases in credit risk and therefore credit risk is considered to be low. Therefore, no expected credit loss provision has been recognised. 12. Trade and other payables
30 June
GBP unless stated 31 December 2024
2024
Trade payables 115,208 653,156
Accruals 213,079 918,264
Customer deposits 1,000 67,950
Related party payable 476,634 79,915
Other payable - 19,891
Tax payable 49,337 (440)
PAYE payable 86,201 87,734
941,459 1,826,470
Trade payables and accruals relate to amounts payable at the reporting date for services received during the period.
Related party payables includes GBP232,365 (30 June 2024: GBP2,280) due to Robin Hood Property Development Limited.
The company has financial risk management policies in place to ensure that all payables are paid within agreed payment terms. 13. Borrowing
As at As at
GBP unless stated 31 December 30 June
2024 2024
Non - current
Lease liability 59,381 116,131
Related party borrowings - 10,981,484
59,381 11,097,615
Current
Lease liability 86,623 86,623
Related party borrowings 6,911,241 -
Loan 4,185,652 5,791,050
11,183,516 5,877,673
11,242,897 16,975,288
Related party borrowings
On 22 November 2024, the previous loan facility with One Heritage Property Development Limited (the controlling shareholder incorporated in Hong Kong) was repaid (including a waiver of GBP2,092,331) and refinanced by OH UK Holdings Limited (a related party). The new loan has a facility of GBP7.0m at an interest rate of 6%. The loan is repayable on 31 December 2025, with an option for the Group to extend for a period of up to 36 months. OH UK Holdings Limited has agreed to provide access to an additional GBP1.0m of funding (on the same terms) for a period of 18 months to support short-term liquidity.
Terms and repayment schedule
The terms and conditions of outstanding loans are as follows:
As at As at
31 December 2024 30 June 2024
Nominal interest Maturity Face Carrying Face Carrying
GBP unless stated Currency rate amount amount
Date value value
Hampshire Trust Bank Limited GBP 10.8% Mar-25 3,685,652 3,685,652 2,819,956 2,819,956
Funding 365 Limited GBP 9.6% Jun-25 - - 2,471,094 2,471,094
One Heritage Property GBP 7.0% Dec-25 - - 10,981,484 10,981,484
Development
OH UK Holdings Limited GBP 6.0% Dec-25 6,911,241 6,911,241 - -
Loan Note GBP 8.0% Mar-25 500,000 500,000 500,000 500,000
11,096,893 11,096,893 16,772,534 16,772,534
14. Share capital
As at As at
GBP unless stated 31 December 30 June
2024 2024
Share capital (1p per share) 386,783 386,783
Share premium 4,753,325 4,753,325
5,140,108 5,140,108
All shares issued by the Company are ordinary shares and have equal voting and distribution rights.
15. Financial instruments and fair value disclosures
When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in fair value hierarchy based on the inputs used in the valuation techniques as follows:
. Level 1: quotes prices (unadjusted) in active markets for identical assets and liabilities.
. Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
. Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table shows the carrying amounts of financial assets and liabilities, including their levels in the fair value hierarchy:
As at 31 December 2024
Carrying value Fair value
Other
GBP unless stated Financial assets at Total Level 1 Level Level 3 Total
amortised cost financial 2
liabilities
Financial assets not measured at
fair value
Trade and other receivables 1,117,810 - 1,117,810 - - 1,117,810 1,117,810
Cash and cash equivalents 137,582 - 137,582 137,582 - - 137,582
1,255,392 - 1,255,392 137,582 1,117,810 1,255,392
Financial liabilities not
measured at fair value
Secured bank loans 3,685,652 3,685,652 3,685,652 3,685,652
Other borrowings 7,411,241 7,411,241 7,411,241 7,411,241
Lease liability 86,623 86,623 86,623 86,623
Trade and other payables 941,459 941,459 941,459 941,459
12,124,975 12,124,975 12,124,975 12,124,975
As at 30 June 2024
Carrying value Fair value
Other
GBP unless stated Financial assets at Total Level Level Level 3 Total
amortised cost financial 1 2
liabilities
Financial assets not measured at
fair value
Trade and other receivables 1,312,476 - 1,312,476 - - 1,312,476 1,312,476
Cash and cash equivalents 88,161 - 88,161 88,161 - - 88,161
1,400,637 - 1,400,637 88,161 - 1,312,476 1,400,637
Financial liabilities not
measured at fair value
Secured bank loans - 5,291,050 5,291,050 - - 5,291,050 5,291,050
Other borrowings - 11,481,484 11,481,484 - - 11,481,484 11,481,484
Lease liability - 202,754 202,754 - - 202,754 202,754
Trade and other payables - 1,826,470 1,826,470 - - 1,826,470 1,826,470
- 18,801,758 18,801,758 - - 18,801,758 18,801,758
16. Related party
Parent and ultimate controlling party
At the reporting date 65.15% of the shares are held by One Heritage Property Development Limited, which is incorporated in Hong Kong. One Heritage Holding Group Limited, incorporated in the British Virgin Islands, is considered the ultimate controlling party through its 100% ownership of One Heritage Property Development Limited.
Compensation of the Group's key management personnel is short term employee benefits.
Transactions with key management
Key management personnel compensation comprised the following:
GBP unless stated 31 December 2024 30 June 2024 Short term employee benefits 342,630 490,045 17. Events after the reporting date
We have announced via RNS announcement the following:
On 11 February 2025, One Heritage Property Development Limited (the parent and ultimate controlling party incorporated in Hong Kong) disposed of 11.31% of its equity, reducing its holding to 53.84%.
On 28 February 2025, the Group completed a sale of 19 of the 24 plots at Eccleshill to Manningham Homes for GBP3,959,313. The proceeds disposal from Zentra Victoria Road Limited have been applied in the first instance to repay the external debt facility on the development.
On 3 March 2025, Zentra exchanged contracts to acquire a parcel of land at Old Mill St, Manchester for GBP1.43m, subject to formal planning permission. The proposed development on the site will consist of a six-storey apartment block, delivering 40 residential units (20 two-bedroom and 20 one-bedroom apartments) and a ground-floor commercial unit The acquisition will be partly funded by existing Group cash resources and external debt. Completion of the purchase is expected in April 2025.
On 5 March 2025, Zentra extended a 12 month unsecured loan of GBP500,000 at a revised interest rate of 6% (down from 8% in the previous twelve month period), effective from 15 March 2025.
The Group is today announcing that on 19 March 2025, the plot of land at Churchgate, Leicester, sold at auction for GBP0.25m. The disposal is expected to complete in April 2025.
----------------------------------------------------------------------------------------------------------------------- Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.
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ISIN: GB00BLF79495 Category Code: IR TIDM: ZNT LEI Code: 2138008ZZUCCE4UZHY23 OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews Sequence No.: 380403 EQS News ID: 2107840 End of Announcement EQS News Service =------------------------------------------------------------------------------------
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(END) Dow Jones Newswires
March 28, 2025 03:01 ET (07:01 GMT)
