TIDMFLK
RNS Number : 6463N
Fletcher King PLC
01 October 2021
FLETCHER KING PLC
Audited results for the Year Ending 30 April 2021
Highlights
-- Revenue for the year of GBP2,264,000 (2020 restated: GBP2,896,000) **
-- Statutory loss before tax of GBP834,000 (2020: profit of GBP76,000)
-- Adjusted loss before tax of GBP935,000 (2020: profit of GBP243,000) *
-- Adjusted basic loss per share of 8.57p (2020: earnings of 2.20p) *
-- Final dividend: GBPnil (2020: 0.5p)
-- Significant cash reserves: GBP2.9m as at 30 April 2021 (2020: GBP3.6m)
*Adjusted results are before share based payment expenses and
after other comprehensive income (see note 2).
** Prior year restatement relates to the realignment of the
Group's revenue recognition policy to the principal versus agent
requirements of IFRS 15. As a result, revenue has been presented
gross of fees shared with third parties, with the related costs now
included within other operating expenses. The impact on revenue and
costs is GBP0.28m. The restatement has no impact on the Group's
profit for the year, earnings per share or net asset position.
The Annual Report and Accounts will shortly be posted to the
Company's website and a further announcement will be made when the
document is sent to shareholders.
Commenting on the results, David Fletcher, chairman of Fletcher
King Plc said:
"It has been a challenging year and only the second in the
history of the Company that we have reported a loss. We are
reasonably optimistic for the coming year but it remains difficult
to predict the outcome with any certainty. We anticipate returning
to profit, although it may not be in the first half. Our balance
sheet remains strong with good cash reserves".
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
For further information, please contact:
Fletcher King plc Tel: +44 (0) 20 7493 8400
David Fletcher, Chairman
Peter Bailey, Finance Director
Cairn Financial Advisers LLP Tel: +44 (0) 20 7213 0880
(Nominated Adviser)
James Caithie
Liam Murray
Buchanan
Henry Harrison-Topham Tel: +44 (0) 20 7466 5000
Jamie Hooper fletcherking@buchanan.uk.com
Tilly Abraham
CHAIRMAN'S STATEMENT
Results
Revenue for the year was GBP2,264,000 (2020 restated:
GBP2,896,000). Adjusted loss before tax (see note 2) was GBP935,000
(2020: profit of GBP243,000). Statutory loss before tax was
GBP834,000 (2020: profit of GBP76,000).
The Board considers the adjusted results to be an important
measure of performance and to be more representative of performance
for the year than the statutory results (which have been prepared
in accordance with International Financial Reporting Standards).
Adjusted results include an unrealised loss of GBP101,000 on
revaluation of the interest in the SHIPS 16 syndicate (2020:
realised gain of GBP99,000).
Dividend
In view of the loss in the year, the Directors have resolved not
to pay a final dividend (2020: 0.5p per share).
The Commercial Property Market
The year to 30 April 2021 will go down as one of the most
difficult in the history of the commercial property industry. The
continuing and ever-changing Covid-19 regulations and lockdowns
have created an extreme level of uncertainty resulting in both
occupiers and investors delaying their decision making.
However, the Industrial and Warehousing sector of the market
bucked the trend and continued to be very active, fuelled by the
growth of online shopping. This has resulted in strong rental
growth and investors paying record prices.
Office workers continued to work from home and shoppers stayed
away from both the high streets and the large shopping centres.
There has been enormous downward pressure on retail rents and
capital values have continued their long decline. Office rents have
also suffered but to a lesser extent, although central London
offices have remained resilient but on a much reduced take up.
Yields have generally held firm, particularly for the large trophy
assets, but there has been some slippage for smaller subprime
buildings.
The vaccine rollout has been exceptional and appears to be
controlling the impact of the disease. It is also giving confidence
to many, who have had both doses, to return to public transport
although utilisation levels remain well below pre Covid-19 figures.
City centres will not recover until all are happy to use public
transport again.
Business Overview
The huge uncertainty caused by the Covid-19 pandemic, resulting
in a very significant fall in business activity, has had a material
impact on the commercial property market and thus our trading
results. For only the second time in the history of the Company are
we reporting a loss.
The biggest impact was experienced in our transaction-based
activities such as investment sales and acquisitions as well as
bank valuations and the agreement of rating appeals.
Property and Fund management fees continued to flow and our rent
collection statistics remained excellent. Fortunately, most of our
clients have a relatively low exposure to the hard hit retail,
leisure and hospitality sectors.
The volume of bank valuations continued to be significantly
reduced and is likely to remain so until investors return in more
force to the market. The Valuation Office continues to be extremely
slow in agreeing rating appeals which is frustrating the potential
for us to earn some substantial fees.
On 2 July 2021 the Company announced, in response to press
speculation, that it was in discussions with Elliott Bernerd in
respect of a potential purchase of existing shares, issue of new
shares (together, constituting no more than 29.99% of the Company's
issued share capital) and new board appointments (the "Potential
Transaction"). Discussions remain ongoing, including regarding
price, and while there can be no certainty that the Potential
Transaction will proceed, the Board will make further announcements
in due course.
Outlook
Whilst it is almost impossible to assess our future trading
performance, we do however look forward to the coming year with
some cautious optimism. Whilst Covid-19 will still be part of our
lives, the vaccination programme has had a very positive effect in
reducing the impact of the virus to a manageable level. Life is
moving towards some degree of normality and hopefully this will
continue. We hope to return to profitability in the coming year
although there is no certainty that this will be achieved in the
first half.
There are positive signs in the capital markets that both
domestic and foreign investors are showing more interest and there
appears to be a wall of money waiting for the right moment to
buy.
We start the year with some reasonable sales instructions, some
encouragingly from new clients, and we hope to add to the client
base going forward. Our Fund and Property Management mandates will
provide steady recurring income and we are working hard to expand
that part of our business.
Bank Valuations are showing some signs of improvement but it is
still early days. Unfortunately, on the Rating front there is no
sign from the Valuation Office of them expediting the outstanding
appeals we have in the pipeline.
Despite our reported loss we continue to be securely financed
with a strong balance sheet and cash reserves of GBP2.9m as at 30
April 2021.
Strong client relationships, some of which have been in place
for over fifty years, have grown even stronger in the last year as
we have tackled together the challenges presented by this
unprecedented period of turmoil.
We would like to thank both our clients and hard working staff
for their loyalty to us.
DAVID FLETCHER
CHAIRMAN
30 September 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 April 2021
Note 2021 2020
GBP000 GBP000
(Restated)*
Revenue 2,264 2,896
Employee benefits expense (1,262) (1,441)
Depreciation expense (281) (278)
Other operating expenses (1,566) (1,190)
Share based payment expense - (68)
--------- ------------
(3,109) (2,977)
Other operating income 25 57
Investment income - 113
Finance income 2 14
Finance expense (16) (27)
--------- ------------
(Loss)/profit before taxation (834) 76
Taxation 146 (40)
--------- ------------
(Loss)/profit for the year (688) 36
Other comprehensive income
Fair value (loss)/gain on financial
assets through (101) 99
Other comprehensive income
Total comprehensive income for
the year attributable to equity
shareholders (789) 135
Earnings per share
Basic 4 (7.47p) 0.39p
Diluted 4 (7.47p) 0.39p
Adjusted earnings per share
Basic 4 (8.57p) 2.20p
Diluted 4 (8.57p) 2.20p
* Prior year restatement relates to the realignment of the
Group's revenue recognition policy to the principal versus agent
requirements of IFRS 15. As a result, revenue has been presented
gross of fees shared with third parties, with the related costs now
included within other operating expenses. The impact on revenue and
costs is GBP0.28m. The restatement has no impact on the Group's
profit for the year, earnings per share or net asset position.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 April 2021
2021 2020
GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 12 21
Right-of-use asset 272 544
Financial assets 529 630
813 1,195
------- -------
Current assets
Trade and other receivables 1,148 680
Corporation tax debtor 111 -
Cash and cash equivalents 2,892 3,624
------- -------
4,151 4,304
------- -------
Total assets 4,964 5,499
------- -------
Liabilities
Current liabilities
Trade and other payables 908 689
Provisions 100 -
Current taxation liabilities - 35
Lease liabilities 577 299
1,585 1,023
------- -------
Non current liabilities
------- -------
Lease liabilities - 262
------- -------
Total liabilities 1,585 1,285
------- -------
Shareholders' equity
Share capital 921 921
Share premium 140 140
Investment revaluation reserve (101) -
Retained Earnings 2,419 3,153
------- -------
Total shareholders' equity 3,379 4,214
------- -------
Total equity and liabilities 4,964 5,499
------- -------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 April 2021
2020 2020
GBP000 GBP000
Cash flows from operating activities
(Loss)/profit before taxation from
continuing operations (834) 76
Adjustments for:
Movement in provision 100 -
Depreciation expense 281 278
Investment income - (113)
Finance income (2) (14)
Finance expense 16 27
Share based payment expense - 68
------- -------
Cash flows from operating activities
before
movement in working capital (439) 322
(Increase)/decrease in trade and
other receivables (468) 1,077
Increase/(decrease) in trade and
other payables 219 (468)
------- -------
Cash (absorbed)/generated from
operations (688) 931
Taxation paid - (14)
------- -------
Net cash flows from operating activities (688) 917
------- -------
Cash flows from investing activities
Sale of investments - 1,072
Purchase of fixed assets - (18)
Investment income - 113
Finance income 2 14
Net cash flows from investing activities 2 1,181
------- -------
Cash flows from financing activities
Lease payments - (314)
Dividends paid to shareholders (46) (161)
------- -------
Net cash flows from financing activities (46) (475)
------- -------
Net decrease in cash and cash equivalents (732) 1,623
Cash and cash equivalents at start
of year 3,624 2,001
------- -------
Cash and cash equivalents at end
of year 2,892 3,624
------- -------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 April 2021
Investment
Note Share Share Revaluation Retained TOTAL
capital premium Reserve Earnings EQUITY
GBP000 GBP000 GBP000 GBP000 GBP000
Balance as at 1 May 2019 921 140 - 3,111 4,172
Total comprehensive income
for the year - - **- 135 135
Equity dividends paid 2 - - - (161) (161)
Share based payment expense - - - 68 68
Balance at 30 April 2020 921 140 - 3,153 4,214
Loss for the year - - - (688) (688)
Fair value loss on financial
assets
through other comprehensive
income - - (101) - (101)
Equity dividends paid 2 - - - (46) (46)
Balance at 30 April 2021 921 140 (101) 2,419 3,379
** The fair value gain on financial assets through Other
Comprehensive Income represented a realised gain.
NOTES
1. General information
Whilst the financial information included in this preliminary
announcement has been prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006, this announcement does not itself contain
sufficient information to comply with IFRSs.
The financial information is presented in pounds sterling
rounded to the nearest thousand, and prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and under the historical
cost convention, except for the revaluation of certain financial
assets. The financial information set out in this announcement does
not comprise the Group's statutory accounts for the years ended 30
April 2021 or 30 April 2020.
The financial information for the year ended 30 April 2020 is
derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The auditors reported on
those accounts; their report was unqualified and did not contain a
statement under either Section 498 (2) or Section 498 (3) of the
Companies Act 2006 and did not include references to any matters to
which the auditor drew attention by way of emphasis.
The financial information for the year ended 30 April 2021 is
derived from the audited statutory accounts for the year ended 30
April 2021 on which the auditors have given an unqualified report,
that did not contain a statement under section 498(2) or 498(3) of
the Companies Act 2006 and did not include references to any
matters to which the auditors drew attention by way of emphasis.
The statutory accounts will be delivered to the Registrar of
Companies following the Company's annual general meeting.
.
2. Alternative performance measures - (loss)/profit
reconciliation
The reconciliation set out below provides additional information
to enable the reader to reconcile to the numbers discussed in the
Chairman's Statement and Highlights section.
Year ended 30 April 2021 2020
GBP000 GBP000
(Loss)/profit before taxation (834) 76
Add back: Share based payment expense - 68
Include: Fair value (loss)/gain on financial
assets through OCI (101) 99
Adjusted (loss)/profit before share-based
payment expense and taxation (935) 243
Taxation 146 (40)
Adjusted (loss)/profit after tax for the
year (789) 203
------- -------
The fair value loss on financial assets represents the
unrealised loss in the year on the revaluation of the Group's
interest in the SHIPS 16 syndicate.
For the prior year, the fair value gain on financial assets
represents the realised gain in the year on the disposal of the
Group's interest in the SHIPS 15 syndicate. The profit is shown in
the Consolidated Statement of Comprehensive Income as other
comprehensive income.
The Company accounted for the surrender of options in the prior
year as a cancellation, in accordance with IFRS 2, resulting in an
acceleration of vesting and a share-based payment charge of
GBP68,000 (2021: GBPnil). The charge reflected the amount that
otherwise would have been recognised for services received over the
remainder of the vesting period.
3. Dividends
Year ended 30 April 2021 2020
GBP000 GBP000
Equity dividends on ordinary shares:
Declared and paid during year
Ordinary final dividend for the year ended
30 April 2020: 0.50p per share (2019: 0.75p) 46 69
Interim dividend for the year ended 30
April 2021: nil per share (2020: 1.00p) - 92
------- -------
46 161
------- -------
Proposed ordinary final dividend for the
year ended -
30 April 2021: nil per share
-------
4. Earnings per share
Number of shares 2021 2020
No No
Weighted average number of shares for basic
earnings per share 9,209,779 9,209,779
Share options - -
------------ ------------
Weighted average number of shares for diluted
earnings per share 9,209,779 9,209,779
============ ============
Earnings GBP000 GBP000
(Loss)/profit after tax for the year (688) 36
(used to calculate the basic and diluted
earnings per share)
Add back: Share based payment expense - 68
Include: Fair value (loss)/gain on financial
assets through OCI (101) 99
Adjusted (loss)/profit after tax for the
year (789) 203
------------ ------------
(used to calculate the adjusted basic and
diluted earnings per share)
Earnings per share
Basic (7.47p) 0.39p
Diluted (7.47p) 0.39p
Adjusted earnings per share
Basic (8.57p) 2.20p
Diluted (8.57p) 2.20p
All share options were surrendered in April 2020. The share
options were non-dilutive for the year ending 30 April 2020 and as
a result were not included within the weighted average number of
shares for the diluted earnings per share calculation.
Forward Looking Statements
Certain statements in this announcement are forward-looking
statements relating to the Company's operations, performance and
financial position based on current expectations of, and
assumptions and forecasts made by, management. They are subject to
a number of risks, uncertainties and other factors which could
cause actual results, performance or achievements of the Company to
differ materially from any outcomes or results expressed or implied
by such forward-looking statements. Undue reliance should not be
placed on such forward looking statements. They are made only as of
the date of this announcement and no representation, assurance,
guarantee or warranty is given in relation to them including as to
their accuracy, completeness, or the basis on which they are
made.
END
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October 01, 2021 02:00 ET (06:00 GMT)
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