DEVELOP NORTH PLC

Interim Report and Financial Statements for the six months ending 31 May 2026

Announcement of Interim Results

LEI: 213800EXPWANYN3NEV68

This announcement contains regulated information.

Chairman's Statement

Highlights

·      New Prospectus and expanded Investment Policy launched to support future growth.

·      Michelle Percy appointed as Chief Executive Officer.

·      £0.9 million of new equity capital raised in challenging market conditions.

·      Dividends of 2.00p per share paid or declared during the period.

·      More than £10 million returned to shareholders since inception.

·      28 successful portfolio exits completed since launch.

·      £22.9 million portfolio across 14 live projects.

·      70.1% of portfolio deployed in the North East of England.

·      Strategic investment programme underway to drive company expansion and enhance shareholder value.

Introduction

I am pleased to present Develop North's results for the six months ended 31 May 2026, a period that marks an important milestone as Develop North PLC enters its tenth year as a listed company.

Over the past nine years, Develop North has established itself as a trusted provider of property-backed finance and a committed investor in regional real estate opportunities. Since inception, Develop North has supported numerous development and investment projects, completed 28 successful portfolio exits and returned approximately £10 million to shareholders through dividends. This track record reflects the disciplined approach that has been taken to capital allocation, risk management and shareholder value creation.

The period under review has also been one of strategic progress. Following shareholder approval of our revised Investment Policy in February 2026, Develop North has broadened its investment mandate beyond traditional real estate lending to encompass commercial and residential real estate investment strategies. This represents a natural evolution for Develop North and one which we believe will create additional opportunities to generate attractive risk-adjusted returns while maintaining our long-standing focus on regional markets.

A key development during the period has been the appointment of Michelle Percy as Chief Executive Officer. Michelle joined Develop North in January 2026 and brings considerable leadership experience together with deep knowledge of the North East economy and investment landscape. Her appointment strengthens Develop North's ability to identify opportunities, build strategic partnerships and support the next phase of growth.

The confidence we have in this strategy was reflected in the successful launch of our new Prospectus and subsequent share issuance during the period. Raising approximately £1 million of new equity capital, in what remains a challenging market environment for smaller listed companies, represents a noteworthy achievement and demonstrates continued investor support for Develop North's vision and future direction.

The North East continues to present compelling opportunities for investment, supported by increasing levels of public and private sector investment, major regeneration projects and favourable property market dynamics. With more than 70% of Develop North's portfolio already deployed in the region, Develop North is positioned to benefit from these long-term trends whilst remaining disciplined in its approach to investment selection and risk management.

Net Asset Value

Develop North's Net Asset Value (NAV) per share decreased from 77.5p to 74.8p over the six months ended 31 May 2026. Taking the effects of dividend distributions into account, this has resulted in a NAV Total Return for the period of (0.88)%.

The reduction in NAV during the period is largely attributable to one-off costs associated with the launch of Develop North's new Prospectus, the implementation of its revised investment strategy and the strengthening of the management team. While these costs have naturally had a short-term impact on earnings and NAV, the Board views them not just as essential investments in the future growth of Develop North but as fundamental indicators of our confidence in the prospects for the region in which we focus and invest.

We believe the enhanced platform, broader investment mandate and strengthened leadership team will support improved earnings and long-term shareholder value creation in the years ahead.

Dividends

A quarterly dividend of 1.00p per share was paid on 10 July 2026 in respect of the quarter ended 28 February 2026. As set out in the Annual Report, Develop North expects to pay dividends at a rate of 1.00p per share per quarter, equivalent to 4.00p 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

No share buybacks took place 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 buybacks as and when appropriate.

Issue of Shares

On 9 July 2025, Develop North announced a proposed change to its investment policy together with a potential fundraise to enhance shareholder value through the development of a broader and more diversified portfolio, predominantly focused on the North East of England. During the period, Develop North issued new shares pursuant to this strategy, raising additional capital to support pipeline opportunities and future growth. Further details are set out in the relevant regulatory news service announcement.

At the end of the period under report, the issued share capital of Develop North consisted of 27,971,700 Ordinary Shares of 1.00p each, of which 1,945,862 Ordinary shares were held in treasury and 26,025,838 Ordinary shares were in circulation.

Appointment of Joint Broker

Subsequent to the period end, in June 2026, Develop North appointed AlbR Capital Limited as joint broker. The Board believes that this appointment will enhance Develop North's market profile, broaden its investor reach and support its ongoing investor engagement activities.

Investment Portfolio

The total value of Develop North's portfolio now stands at £22.9 million, from 14 live projects.

New Investments:

Post period end, Develop North agreed one new facility: a £1.95 million, 18-month facility to fund nine executive homes in Tyne and Wear. £2.97 million was deployed into nine existing projects. The quality of the loan book continues to be maintained with the Loan to Value moving from 69.7% at 30 November 2025 to 72.7% at 31 May 2026.

Exits:

Two portfolio exits were completed during the period, bringing the number of exits to 28 since inception.

Impairments:

As specified by the requirements of accountancy standard IFRS 9, Develop North 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 Develop North 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 2026 Develop North has set the provision at £82,000. This is the same level as the general provision at 30 November 2025. 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

Develop North continues to benefit from a gearing facility with Shawbrook Bank Limited, which is due for renewal in August 2026. At the period end £4m had been drawn down under this facility.

Outlook

As we enter the second half of the financial year, the Board remains optimistic about the opportunities available to Develop North.

While economic conditions remain mixed and inflationary pressures continue to influence investor sentiment, the regional markets in which we operate continue to demonstrate resilience. The North East in particular is benefitting from inward investment, regeneration activity and increasing recognition as one of the UK's most attractive regions for growth and development. The incoming Prime Minister's devolution ambitions for the North add further impetus to Develop North's message.

Develop North enters this next phase with a strengthened leadership team, a broadened investment strategy and an established platform from which to grow. We expect to complete our first investment under the revised policy during the current financial year and continue to see encouraging levels of activity across our pipeline.

Despite the well-publicised challenges facing many listed investment companies, Develop North benefits from a high-quality portfolio, strong regional relationships and a track record of delivering income to shareholders. The Board believes these attributes will continue to differentiate Develop North and support long-term value creation.

As we look ahead, our priorities remain clear: to grow the portfolio selectively, maintain a disciplined approach to risk, support attractive dividend distributions and capitalise on the investment opportunities emerging across our chosen markets. Having returned more than £10 million to shareholders since inception and successfully navigated a range of market cycles, we believe Develop North is well positioned for its next stage of development and growth.

John Newlands

Chairman

5 August 2026

Investment Adviser's Review

REVIEW OF THE 6 MONTHS TO 31 MAY 2026

Investment Adviser's highlights:

·   Launch of a new prospectus in January 2026, broadening the investment policy to include two complementary investment strategies

·      Appointment of Michelle Percy as CEO in January 2026

·      Two exits during the period, bringing the number of exits to 28 since inception

·      LTV of portfolio at 72.7%

·      Dividends totalling 2.00p per share paid or declared for the six months to 31 May 2026, equivalent to an annualised dividend yield of 5.13%.

·      70.1% of funds deployed in North East England reflecting Develop North's ongoing commitment to focus operations on our chosen regional markets.

This Interim Report and Accounts covers the end of the ninth and the beginning of the tenth year of performance of Develop North, since its listing in January 2017.

Develop North PLC is an investment company listed on the LSE Main Market which invests predominantly in North East of England real estate. Develop North's investment objective is to provide shareholders with a consistent and stable income and the potential for an attractive total return over the medium to long term, through a diversified portfolio of investments. Develop North's strategy to achieve its investment objective is to create a balanced portfolio of investments, diversified by asset class, that provides exposure to attractive real estate assets and businesses.

The Economic Backdrop and Outlook:

The first six months of the financial year have seen the base rate held at 3.75% at the time of writing (July 2026). The Bank of England continues to remain cautious and the most recent minutes from 17 June 2026 suggest that while risks to inflation and interest rates are on the upside, they are content to hold as the economic environment means the chance of second-round effects is small at this current time. Capital Economics (June 2026) believe that rates will remain at 3.75% for the rest of 2026 and early 2027, whilst the market continues to forecast 4% by the end of 2027.

2026 has been steady but challenging for the housing market. House prices are up 0.6% year on year (June 2026 - Halifax Price Index), with the North East leading the way in England up 2.8% and Scotland also performing well, increasing by 3.9%.

Develop North 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.

Deployment

Develop North is pleased to report an active period for deployments to existing projects together with full and partial exits:

Develop North agreed one new facility in June 2026, post period end:

·      Tyne & Wear - £1.95m 18-month facility

During the period a total of £2.97m was deployed into nine projects.

At the period end, fund deployment totalled £21.6m. The quality of the loan book continues to be maintained with the LTV moving from 69.7% at 30 November 2025 to 72.7% at 31 May 2026.

Portfolio Exits

There were two portfolio exits during the period, bringing the number of exits to 28 since inception. Post period end, there was another successful exit.

Partial Redemptions Update

During the period, there were £6.5m of partial redemptions across nine of the portfolio projects including the two exits in the period.

Impairments

In accordance with IFRS 9 Develop North 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 Develop North 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 2026 Develop North has set the provision at £82,000, remaining unchanged since 30 November 2025. This provision is based on forward-looking scenarios and is designed to withstand market-related shocks, reflecting current economic uncertainties.

Gearing

Develop North currently has a committed revolving credit facility with Shawbrook Bank which is due to expire in August 2026. This is expected to be renewed again post period end for a further two to three years. Again, the key driver is headroom and liquidity.

SHARE ISSUANCE

Develop North issued 1,047,637 shares in April 2026 at a share price of 81.6p per share.

BUYBACK PROGRAMME

In November 2023, Develop North announced the commencement of a share buyback programme. To date Develop North has purchased 1,945,862 shares in the market. The shares will be held as treasury shares on Develop North's balance sheet.

OUTLOOK

Residential

As at 31 May 2026, 62.5% of deployed funds were invested across eight projects with a residential focus.

Commercial

As at 31 May 2026, 37.5% of deployed funds were invested across five projects with a commercial focus.

PIPELINE

Real Estate Finance

Post period end, Develop North completed a new loan for £1.95m.

Commercial

Develop North intends to conclude its first acquisition under the new investment policy before the end of the current financial year.

Ian McElroy

Tier One Capital Ltd

5 August 2026

THE INVESTMENT PORTFOLIO AS AT 31 MAY 2026

*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 Develop North's performance have not changed from those set out on pages 13 and 14 of Develop North's Annual Report for the year ended 30 November 2025.

The Directors consider that the Chairman's Statement, the Investment Adviser's Review, the disclosure on related party transactions and the Statement of Directors' Responsibilities contained in the Interim Report together constitute Develop North's Interim Management Report for the six months ended 31 May 2026 and satisfy the requirements of DTR 4.2.3 to DTR 4.2.11 of the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

The Interim Report has not been reviewed or audited by Develop North's Auditor.

The Directors believe, having considered Develop North's investment objectives, risk management policies, capital management policies and procedures, the nature of the portfolio and expenditure projections, that Develop North 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 Develop North that would prevent its ability to continue in such operational existence for at least 12 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 Develop North, as at 31 May 2026, as required by DTR 4.2.4R;

·      The Interim Report includes a fair review of the information required by the DTR 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 DTR 4.2.8R.

On behalf of the Board

John Newlands

Chairman

5 August 2026

CONDENSED INCOME STATEMENT

The accompanying notes form an integral part of the financial statements.

The total column of this statement represents Develop North'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

The accompanying notes form an integral part of the financial statements.

The financial statements 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 5 August 2026.

They were signed on its behalf by:

John Newlands

Chairman

CONDENSED Statement of Changes in Equity

Condensed Cash Flow Statement

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 Develop North for the year ended 30 November 2025. 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 Develop North for the year ended 30 November 2025, 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 Develop North's business and assets, the Directors consider that Develop North 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 Develop North an Investment Adviser fee which is calculated and paid quarterly in arrears at an annual rate of 0.35% per annum of the prevailing NAV.

There is no balance accrued for the Investment Adviser fee for the period ended 31 May 2026 (31 May 2025: £nil; 30 November 2025: £nil).

There are no performance fees payable.

ALTERNATIVE INVESTMENT FUND MANAGER'S DIRECTIVE ('AIFMD')

Develop North 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 25,317,819 Ordinary shares, being the weighted average number of Ordinary shares in issue throughout the period.

Earnings for the period to 31 May 2026 should not be taken as a guide to the results for the year to 30 November 2026.

4. DIVIDENDS

Develop North intends to distribute at least 85% of its distributable income earned in each financial year by way of interest distribution. On 18 June 2026, Develop North declared an interim dividend of 1.00 pence per share for the quarter ended 28 February 2026, paid on 10 July 2026.

5. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

Develop North's investment held at fair value through profit or loss represents its profit share arrangements whereby Develop North owns at least 25.1% or has an exit fee mechanism for four companies.

6. LOANS AT AMORTISED COST

Develop North'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 £82,000 (May 2025: £64,000; November 2025: £82,000).

7. SHARE CAPITAL

*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 NAV per Ordinary share is based on net assets of £19,473,483 (31 May 2025: £19,929,614; 30 November 2025: £19,352,299) and on 26,025,838 Ordinary shares (31 May 2025: 24,978,201; 30 November 2025: 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 Develop North.

The Directors of Develop North received £136,000 fees for their services during the period to 31 May 2026 (30 November 2025: £121,000; 31 May 2025: £46,000). £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 £38,000 Investment Adviser's fee during the period (30 November 2025: £60,000, 31 May 2025: £30,000) and £nil was payable at the period end (30 November 2025: £nil; 31 May 2025: £nil). Tier One Capital Ltd receives up to a 20% margin and arrangement fee for all loans it facilitates.

Michelle Percy was appointed as CEO of Develop North on 26 January 2026. Michelle Percy received a fee of £61,699 for her services during the period to 31 May 2026.

There are various related party relationships with borrowers arising from the opportunity taken to advance the profit share contracts entered into by Develop North, as detailed below:

·     Coalsnaughton

Develop North owns 40.1% of the borrower Kudos Partnership. The loan amount outstanding as at 31 May 2026 was £1.73m (30 November 2025: £1.71m; 31 May 2025: £1.9m). Transactions in relation to loans made during the year amounted to £nil (30 November 2025: £nil; 31 May 2025: £nil). Interest due to be received as at 31 May 2026 was £675,000 (30 November 2025: £621,000; 31 May 2025: £567,000). Interest received during the period amounted to £nil (30 November 2025: £nil; 31 May 2025: £nil).

·     Oswald Street

Develop North owns 25.1% of the Riverfront Property Limited Partnership. The loan amount outstanding as at 31 May 2026 was £448,000 (30 November  2025:  £448,000;  31  May  2025: £448,000). Transactions in relation to loans made during the year amounted to £nil (30 November 2025: £nil; 31 May 2025: £nil). Interest due to be received as at 31 May 2026 was £8,000 (30 November 2025: £21,000; 31 May 2025: £8,000).

10. OPERATING SEGMENTS

The Board has considered the requirements of IFRS 8 'Operating Segments'. The Board is of the view that Develop North is engaged in a single unified business, being the investment of Develop North's capital in financial assets comprising loans and joint venture equity contracts and in one geographical area, the United Kingdom, and that therefore Develop North has no segments. The Board of Directors, as a whole, has been identified as constituting the chief operating decision maker of Develop North. The key measure of performance used by the Board to assess Develop North's performance is the total return on Develop North's net asset value. As the total return on Develop North'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 2025, 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 2025 have been reported on by Develop North's auditor or delivered to the Registrar of Companies.

For further information regarding Develop North PLC (LEI: 213800EXPWANYN3NEV68) please call: 

Enquiries:

Develop North PLC                                                                                                                                      +44 (0) 191 222 0099

Michelle Percy   

 Tier One Capital Ltd (Investment Adviser)                                                                                               +44 (0) 191 222 0099

Brendan O'Grady              

Cavendish Capital Markets Limited (Financial Adviser and Joint Corporate Broker)                          +44 (0) 207 220 0500

Robert Peel

Andrew Worne

Oscar Valeur-Adu              

AlbR Capital Limited (Joint Corporate Broker)                                                                                          +44(0) 207 469 0930

Faisal Rajeh

Peter Greensmith

Alma Strategic Communications (Financial Communications Adviser)                                                +44 (0) 203 405 0211

Andrew Jaques

Joe Pederzolli

Louisa El-Ahwal

Apex Fund Administration Services (UK) Limited (Secretary)                                                                 +44 (0) 1245 398950

Notes to Editors:

Develop North PLC's investment objective is to provide shareholders with a consistent and stable income and the potential for an attractive total return over the medium to long term, through a diversified portfolio of investments predominantly in the North East of England.

Develop North has the financial strength, credibility and professionalism expected of a business listed on the London Stock Exchange, while also offering the flexibility, creativity and common sense of an approachable, local business.

Since Develop North's IPO in 2017, it has invested almost £90 million of capital into the North of England and Scotland and has helped support an estimated 12,000 jobs with a gross development value of more than £280 million.

ENDS

Interim Report 2026

The Interim Report will shortly be available on Develop North's website (www.developnorth.co.uk) or in hard copy format from Develop North'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