Updated  13.7.11

(See bottom of this page and attachments concerning Findon's accounts filed in the UK)

(Also see the bottom of the page "Findon's Other Developments" for information about R.O. Future Group PLC which is an associated company)

At a public inquiry held in January 2008, Findon provided values for the 36 private flats which when the very high service charges were taken into account, were approximately double what local residents knew to be correct. There was some astonishment that Camden accepted the figures for the purpose of agreeing the security which is required to ensure that the owners and anyone else with an interest in the land (firstly the developer and then assumed to be firstly the owners of the private flatsand and then anyone else with an interest) pay for the marshals. Those figures were included in Findon’s document to the public inquiry “AP19” which is an attachment at the bottom of this page. The most relevant pages are the supporting letter from Paramount (an estate agent) and the price schedule at the end. The schedule shows expected selling prices and service charges of flats. The estate agent's letter is intended to justify the figures.

Anyone familiar with the area will be astonished by the content of AP19, as were local estate agents who we showed it to following the public inquiry.

Those opposing the scheme were interested because employing marshals was the Developer's and the Council’s solution to the problem of very limited access. It sounded as if it would be cripplingly expensive. As marshals have to be paid for by the Developer and then by flat owners, we were anxious that the amounts and detail were as transparent as possible. Furthermore we wanted to be sure that if the proposals at the start turned out to be inadequate, this Developer or future owners of flats would be forced to bear the additional marshaling and any other costs.

We have therefore monitored the Findon internet site on TASE (the Tel Aviv Stock Exchange) to see what information investors might be receiving.

Helpfully, in August 2008, ISA (the Israeli Securities Authority) required Findon to provide forecasts of future proceeds from developments.

These forecasts were posted on the TASE site on 13th August 2008 and showed values similar to what were submitted to the public inquiry in AP19.

The following is a summary of these forecasts to 30.9.2011 when Findon’s seven developments are shown as being expected to be completed. It shows the total for all seven of Findon’s developments and the amounts that are included in the total that are for Dalby Street only:

Amounts in £1,000s		TOTAL All 7 Devs	Dalby St, Talacre (POW) Incl in Total
Receipts from sales of flats etc	A	110,587	22,200
Less payments, excl bank and bonds	B	46,669	12,511
Surplus before bank and bond servicing	A-B=C	63,918	9,689
Bank Repayments of Principal and Interest	D	65,767
Bond Repayments of Principal and Interest	E	5,342
Other	F	180
Total Bond and Bank loan P + I	D+E+F=G	71,289
Less Bank Loans drawn	H	30,990
Net Bond and Bank Repayments	G-H=I	40,299
Net Surplus	C-I=J	23,619

Analysis of the amount of £22,200k shown for sales for POW (Dalby St, Talacre) indicates that the estimated sales values for flats although less than those presented in AP19 to the public inquiry in January 2008 by the developer, are still exceptionally high. The market value shown ie £22,200k should probably be £13,300k when the value of affordable flats is taken into account. There are many reasons why it can be said that this is not comparing like with like. However, the scale of the difference between what is shown and comparatives in the immediate locality is as indicated.

On 5th October 20008 other schedules were posted on the TASE site also showing values of the same scale. See page 22 of the attached report "5.10.08 flat price forecast on TASE". Of the 36 private flats 11 are shown as having a value of over £550k, 13 between £350k and £550k with the remaining 12 below £350k. Findon justified its figures by quoting Camden asking prices from the authoritative Rightmove internet site for all residential property and its monthly House Price Index  By using the same site and looking up the registered selling prices of flats in the postal district NW5, figures of about 50% of the Camden House Asking prices could be found.. Taking into account the exceptionally high combined service charges and ground rent of, for example, £200 per week for a 3 bedroom flat* it can be seen that the information supplied to Israeli investors has been open to challenge.

It is possible that the other six Findon developments may have been relatively under-valued. A comparison of the figures given in this report on the TASE site of 5.10.08 with those on the Rightmove website for each of the developments shown on the page "Findon's Other Developments" would need to take account of the high specification and possibly, substantial common areas which may be indicated on the Union Developments website. In the case of Dalby Street, there are negligible common areas, it is car-capped and within a few metres of a busy railway line and station. The closest flat is just 9 metres from the station platform.

* References to £200 per week for a 3 bedroom flat for service charges plus ground rent are based upon the following assumptions:
(a) Average service charge of the 3 bedroom flats shown in Findon's schedule presented to the public inquiry as part of AP19, is £6,305pa
(b) 3 bed flats always shown as having £900pa ground rent
(c) Total per AP19 therefore £7,205pa or £139 per week
(d) Following the public inquiry, it was established that the 19 affordable flats would not pay the costs of marshalling or a ground rent. In order to recover those amounts from the private flats, an uplift of 38.9% was calculated by us as being required which increases the £139 to £193. With inflation and rounding, £200 seems to be the right ball park figure

On 31 March 2009, Findon's report at 31.3.09 and annual accounts at 31.12.08 were posted on the TASE site.

On the 17th page on this document in clause 2.1.8, there is a schedule showing the estimated selling prices, cost of sales and net profits of the current Findon projects. POW ie Dalby Street is shown as having estimated Sales Values of £21,689,000 ie similar to the £22,200,000 shown in August. On page 12, clause 2.1.2 of the 31.3.09 document, the earlier amount of £22,200,000 is quoted.

On 31 May 2009, Findon's report at 31.5.09 and quarterly accounts at 31.3.09 were posted on the TASE site.

This report makes no mention anywhere of the Dalby Street development. It is apparent that similar figures as were shown in the 31.12.08 accounts were contained in the Balance Sheet. The following quarterly accounts to 30.6.09 also contain nothing on Dalby Street, although it is included as an asset as before.

http://maya.tase.co.il/bursa/report.asp?report_cd=468378

Findon's 2009 Report and Accounts (in Hebrew) as shown on the TASE site at the end of March 2010 are attached. Sales are quoted on page 14 in the report as expected to be £21,626,000 with gross profit of £4,293,000. Those figures are repeated in clause 2.1.2 on page 22 where three of the other sites are also shown. The amount owned by Cornwall Overseas Developments to Findon Urban Lofts plc at 31.12.09 is shown as £6,701,000 which represents the costs to date such as buying the land (£3.5m), doing a small amount of work on site (demolishing a building and drilling piles),promotion costs and, perhaps, capitalised interest.

Findon's quarterly Accounts (in Hebrew) to 31.3.10 and half yearly accounts to 30.6.10 as published on the TASE site are attached. Expected proceeds from sales are shown as £21,631,000. Proceeds of sales are shown in the 30.6.10 report as expected to be received as follows:

    2011      £2,712,000
    2012    £18,919,000

 It confirms that the Prince of Wales project is the only project charged to the trustees for the debenture holders (Ziv Haft) and states that the value per the accounts at 30.6.10 was £5,762,000.

Accounts of Findon Urban Lofts Group filed in the UK

The following copies of the audited financial statements of Findon Urban Lofts PLC as filed at Companies House in the UK and publicly available are attached. They are less detailed than the accounts posted on the TASE site but they are in English:

    Period (from incorporation) to 31 December 2006.

    Year ended 31 December 2007

    Year ended 31 December 2008

    Year ended 31 December 2009

    Year ended 31 December 2010

The 31.12.07 financial statements were for Findon Urban Lofts Plc only and no group consolidated accounts were filed. The financial statements for the other three years showed group consolidated accounts and also provided balance sheet figures for Findon Urban Lofts Plc unconsolidated.

The comparative figures in the 2009 accounts for 2008, though providing the same result as those filed for 2008, show a very different split between the different sources of funds eg bank loans, bonds and advance on account of property sale in the group balance sheet.

Each of Findon's seven development sites is owned and developed by a special purpose company which is a wholly owned subsidiary of Findon Urban Lofts PLC. Four of the seven companies are registered in the British Virgin Islands where no accounts are filed. The other three are registered in the UK. They are:

    Creek Road Ltd for the Theatro, Creek Road, Greenwich development

    Findon Urban Lofts (AAA) Ltd for the Larnaca Works, Bermondsey, Southwark development

    Findon Urban Lofts (BBB) Ltd for the Arthaus, Richmond Road, Hackney development

Accounts for those three companies can be downloaded from Companies House. The latest are to 31.12.09

The Directors Report in the 2009 UK financial statements includes;

    "Review of the Business
    During the year, the group continued to develop its properties and was able to sell all of the properties that were completed. There are currently four active projects in the group. Two of the projects are expected to be complete during 2010 and the other two in year 2011"

From the report and accounts on the TASE site and from observations on the ground, the two projects expected to be completed in 2010 are the Atrium and Theatro projects. The two expected to be completed in 2011 are the Arthaus and Larnaca Works projects. Projects which are completed and fully sold are the Furmage and Crowndale projects. The seventh project which is the Dalby Street, Talacre, Prince of Wales Road project is "inactive".

The Directors Report in the 2010 UK financial statements includes:
"Review of the Business
    During the year, the group continued to develop its properties and was able to sell all of the properties that were completed.