TIDMMAC
RNS Number : 5946K
Marechale Capital PLC
29 August 2019
29 August 2019
Marechale Capital plc
("Marechale" or the "Company")
Consolidated Financial Statements for the year ended 30 April
2019
Marechale is pleased to announce its final results for the year
ended 30 April 2019.
Chairman's Statement
Marechale Capital's revenues for the year of GBP512,000 are down
on last year (2018: GBP675,000), resulting in a lower gross profit
of GBP400,000 (2018: GBP595,000). The fall in revenues can be
partially explained by a delay in closing a number of projects
which we announced in our trading update statement in May. It is
also a reflection of the wider market where investor appetite is
subdued due to uncertainty over Brexit, and transactions are
generally taking longer to complete.
The fall in revenues has contributed to an operating loss of
GBP288,000 for the year (2018: GBP17,000 loss). Administrative
Expenses in the year were GBP688,000 compared to GBP612,000 in
2018; the former includes a provision of GBP40,000 to compensate a
Director for the early termination of his contract, and the latter
contained a one-off credit of GBP84,000 to reverse the accumulated
cost of options granted under the Company Option Scheme, which had
been forfeited. The Company has also moved offices to less
expensive accommodation. The Directors anticipate that annual
savings of the order of GBP175,000 will result from these
measures.
Equity Investments and Warrants are valued at 'fair value',
typically at a price which reflects their last funding round, and
underlying movement in fair value is reflected through the Profit
and Loss Account in accordance with IFRS 9: in previous years
unrealised gains on Equity Investments were recorded to the
Revaluation Reserve and released to the Profit and Loss Account
when realised. Please note that this is a significant change in
accounting policy, more fully explained in the paragraph
immediately below.
Investments in three client companies have shown modest realised
gains of GBP78,750 (compared to unrealised losses of GBP118,500 in
2018). However, under the new Accounting Standard, IFRS 9,
'Accounting for Financial Instruments', because GBP57,000 of these
gains had been recorded as the fair value of those investments at
30 April 2018 as reflected in the Revaluation Reserve as an
unrealised gain, we may no longer record them to the Profit and
Loss Account in the current year, and instead this was recorded
directly to Profit and Loss Reserves. Thus the only gains recorded
this year amounting to GBP21,750 result from fair value gains in
the current year. Furthermore, under the same Standard, the Company
has made a GBP30,100 impairment provision for unrealised losses,
resulting in overall 'Other Losses' of GBP8,350.
The net effect is a loss for the year before tax of GBP298,000
(2018: Loss of GBP198,000).
The balance sheet value has reduced during the year to
GBP179,000 (2018: GBP465,000) which is more fully explained in the
Statement of Changes in Equity.
The Company has previously reported on its investment in
Northfield UK Solar Limited ("NUKS") and, as previously announced,
it had been a challenging time for NUKS owing to the changes in the
renewable energy fiscal regime and the impracticalities of
integrating new renewable schemes into the UK's traditional energy
infrastructure. Following a series of value write downs, NUKS has
been wound up resulting in a modest return of capital to
shareholders.
On the positive side, the Company had a record year for exits
with a total of five exits for Marechale financed projects during
the period. This included West Country Renewables, a solar and wind
power business, which was sold to Community Power Cornwall,
resulting in a high return to investors and on Marechale's founder
equity.
Investors in Marechale projects also benefited from the sale of
Egmere and Grange Park anaerobic digestion plants operated by
Future Biogas, to John Lang Environmental Assets Group, The Inn
Collection Group to Alchemy Partners, and the sale of Sheen Falls
lodge, all of which generated multiple returns for investors.
On new projects the Company had another busy year successfully
completing several leisure deals for existing and new clients
including acquisition finance for the East Anglia based luxury inn
group Chestnut Inns, West Country pub group Stay Original and
leading biogas operator Future Biogas. Further growth capital
funding was completed for national brewpub business Brewhouse &
Kitchen and award-winning craft distiller Oslo Distillery.
Additionally, the Company has completed advisory work for a wide
range of consumer brand, hospitality and renewable energy
businesses.
Further information is available on the Marechale Capital
website.
Despite a challenging market the Company continues to maintain
its position as a leading adviser and financier to UK and European
growth hospitality companies and hotels, and pub assets as well as
advising and financing one of the UK's largest biogas
companies.
The Management team are highly selective about the businesses
Marechale advises and continue to make good returns and attractive
IRRs for the investors who have financed these projects and
investments over the last 9 years.
In addition, the Company has taken action to reduce its monthly
running costs and continues to keep its policy of operating a
low-cost investment banking model.
Marechale has maintained its policy of taking equity and
warrants in the projects it finances which the Board hopes will
generate an uplift to shareholders.
The Board continues to review all options to add value and the
Directors will be seeking shareholder approval at the Company's AGM
to disapply preemption rights in order to retain flexibility for
possible future equity issues for the Company, should this be
deemed to be the right course of action as well as approval for a
new option scheme to incentivize key existing and new
management.
Mark Warde-Norbury
Chairman
28 August 2019
For further information please contact:
Marechale Capital Tel: +44 (0)20 7628 5582
Mark Warde-Norbury / Patrick Booth-Clibborn
Cenkos Securities Corporate Finance Tel: +44 (0)20 7397 8900
Azhic Basirov / David Jones
Consolidated Income Statement
Year ended 30 April 30 April
Notes 2019 2018
GBP GBP
Revenue 3 511,691 674,756
Cost of sales (111,323) (79,721)
Gross profit 400,368 595,035
Administrative expenses 4 (688,171) (611,813)
Operating loss (287,803) (16,778)
Finance expense (149) (21)
Other losses (8,357) (118,500)
Net loss in respect of associate (1,513) (3,549)
Provision for project loss in associate (195) (59,600)
Loss before tax (298,017) (198,448)
Taxation - -
Loss for the year (298,017) (198,448)
---------- ----------
Loss per share 5 Pence Pence
- Basic (0.52) (0.34)
- Diluted (0.52) (0.34)
Consolidated Statement of Comprehensive Income
Loss for the year (298,017) (198,448)
Other comprehensive income
Fair value adjustment on equity investment
through other comprehensive income - (12,500)
---------- ----------
- (12,500)
Total recognised comprehensive loss
(all attributable to owners of the
parent) (298,017) (210,948)
---------- ----------
Consolidated Balance Sheet
As at 30 April 30 April
2019 2018
Notes GBP GBP
Non current assets
Investment in associate - 14,038
Current assets
Investment in associate 12,330 -
Equity investments at fair value through
profit and loss 75,479 174,619
Warrants at fair value through profit
and loss 1,550 78,388
Trade and other receivables 105,206 201,174
Cash and cash equivalents 148,600 118,340
Total current assets 343,165 572,521
----------- ------------
Total assets 343,165 586,558
----------- ------------
Current liabilities
Trade and other payables (164,028) (121,344)
Total current liabilities (164,028) (121,344)
----------- ------------
Net assets 179,137 465,215
----------- ------------
Equity
Capital and reserves attributable to
equity shareholders
Share capital 6 461,449 461,449
Fair value reserve through other
comprehensive income - 81,826
Reserve for own shares (50,254) (50,254)
Reserve for share based payments 11,939 -
Retained losses (243,997) (27,806)
179,137 465,215
----------- ------------
Statement of Changes in Equity
Reserve
Share Share Reserve for for own Retained
capital premium fair value shares earnings
GBP GBP GBP GBP GBP
Balance at 30 April 2017 2,474,308 1,247,379 94,326 (50,254) (3,005,144)
Capital reduction (2,012,859) (1,247,379) - - 3,260,238
Reserve for share based
payments - - - - (84,453)
Transactions with owners (2,012,859) (1,247,379) - - 3,175,786
------------ ------------ ------------ --------- ------------
Total comprehensive income
Loss for the financial
period - - - - (198,447)
Revaluation during the
financial year - - (12,500) - -
Total comprehensive income - - (12,500) - (198,447)
------------ ------------ ------------ --------- ------------
Balance at 30 April 2018 461,449 - 81,826 (50,254) (27,806)
------------ ------------ ------------ --------- ------------
Total comprehensive income
Loss for the financial
period - - - - (298,017)
Transfer to P&L Reserves
per IFRS#9 - - (81,826) - 81,826
Total comprehensive income - - (81,826) - (216,191)
------------ ------------ ------------ --------- ------------
Balance at 30 April 2019 461,449 - - (50,254) (243,997)
------------ ------------ ------------ --------- ------------
2019 2018
GBP GBP
Reserve for share based
payments 11,939 -
11,939 -
------- -----
Consolidated Cash Flow Statement
Year ended 30 April 30 April
2019 2018
GBP GBP
Net cash from operating activities
Loss before tax (298,017) (198,448)
Provision for/(reversal of) share based
payments 11,939 (84,453)
Reverse losses on fair value investment
through profit and loss 8,357 118,500
Reverse loss in Associate Company 1,513 3,549
Reverse provision for losses in Associate
Company 195 59,600
Reverse net interest expense 149 21
Operating cash flows before movements in
working capital (275,864) (101,231)
---------- ----------
Movement in working capital
Decrease in receivables 95,969 20,502
Increase/(decrease) in payables 42,684 (81,914)
Tax paid - (93)
138,653 (61,504)
---------- ----------
Cash flow from operating activities (137,212) (162,735)
---------- ----------
Investment activities
Interest received 46 113
Expenditure on equity investments (12,700) (21,280)
Proceeds from sale of equity investments
through profit and loss 103,483 -
Proceeds from sale of warrants through
profit and loss 76,838 -
Cash flow from investing activities 167,667 (21,167)
---------- ----------
Financing
Interest paid (195) (134)
Cash flow from financing activities (195) (134)
---------- ----------
Net increase/(decrease) in cash and cash equivalents 30,260 (184,036)
---------- ----------
Cash and cash equivalents at start of the
financial year 118,340 302,375
Cash and cash equivalents at end of the
financial year 148,600 118,340
Increase/(decrease) in cash and cash equivalents 30,260 (184,036)
---------- ----------
Notes to the financial statements
Year ended 30 April 2019
1. General information
Marechale Capital plc is a company registered in England and
Wales under the Companies Act 2006. The Group's principal
activities are the provision of advice and broking services to
companies. The financial statements are presented in pounds
sterling, the currency of the primary economic environment in which
the Group operates.
The Group's registered office and principal place of business is
46 New Broad Street, London, EC2M 1JH. The Company's registered
number is 03515836.
2. Basis of preparation
a. Going concern
In establishing the applicability of the going concern basis,
the Directors have made enquiries as to the financial resources of
the Group. The Company does not benefit from reliable repetitive
income, and instead relies on deal-driven transactions whose timing
is very difficult to predict accurately. Whilst the Directors are
confident that they will generate enough income on an annual basis
in order to continue as a going concern, they have 'alternative
strategies' in place, e.g. informal arrangements with creditors
and/or the ability to sell both Equity investments and/or Warrants
should the need arise to overcome any potential short-term cash
flow shortage. The Directors are also confident that they could
raise sufficient funds through the issue of further equity in the
market should the need arise: however, given the trading results
for the year and the current economic uncertainty, the Directors
recognise that there is a significant material uncertainty that
either will happen. Nonetheless, the Directors have determined to
prepare the Accounts on a Going Concern basis.
b. Basis of accounting
These financial statements have been prepared in accordance with
International Financial Reporting Standards ('IFRS') as adopted by
the European Union, IFRS Interpretations Committee ('IFRS IC')
interpretations and the Companies Act 2006 applicable to companies
reporting under IFRS.
The financial statements have been prepared on the historical
cost basis as modified by the valuation of certain financial
instruments.
3. Business and geographical segments
The directors consider that there is only one activity
undertaken by the Group, that of corporate finance advisory. All of
this activity was undertaken in the United Kingdom.
2019 2018
GBP GBP
Broking commissions and fees earned from
corporate finance 511,691 674,756
-------- --------
4. Administrative expenses
2019 2018
GBP GBP
Administrative expenses 636,432 671,266
Profit share - 25,000
Termination of Director's contract 39,800 -
Share based payments 11,939 (84,453)
-------- ---------
688,171 611,813
-------- ---------
5. Earnings per share
Earnings Earnings
2019 2018
GBP GBP
Based on a loss of (298,017) (198,448)
----------- -----------
No. shares No. shares
Weighted average number of Ordinary
Shares in issue for the purpose
of basic earnings per share 57,681,151 57,681,151
Weighted average number of Ordinary
Shares in issue for the purpose
of diluted earnings per share 57,681,151 57,681,151
6. Share capital
Shares Ordinary Deferred Issued
shares shares share
(number) (number) capital
Issued at 30 April
2017: (GBP)
Ordinary shares of 1p 57,681,151 - 576,812
Deferred shares of 1p - 189,749,640 1,897,496
----------- -------------- ------------
57,681,151 189,749,640 2,474,308
Effect of Capital Reorganisation
28 June 2017:
Reduction in nominal value/share
of 0.2p - - (115,363)
Cancellation of Deferred shares - (189,749,640) (1,897,496)
Issued at 30 April 2018, Ordinary
shares of 0.8p 57,681,151 - 461,449
Issued/cancelled during year - - -
----------- -------------- ------------
Issued at 30 April 2019, Ordinary
shares of 0.8p 57,681,151 - 461,449
----------- -------------- ------------
Options (number/weighted average exercise price ('WAEP'))
Options WAEP
(number) (p)
Outstanding at 1 April 2017 12,113,042 2.58p
Forfeited within the period (12,113,042) 2.58p
------------- ------
Outstanding and exercisable at 30 April
2018 - -
Granted within the period 5,768,115 1.12p
------------- ------
Outstanding and exercisable at 30 April
2019 5,768,115 1.12p
------------- ------
The options granted in 2019 generated a cost of GBP11,939 (2018:
GBP84,453 credit).
7. Other matters and Market Abuse Regulation (MAR)
Disclosure
The financial information for the year ended 30 April 2019 set
out in this announcement does not constitute statutory financial
statements, as defined in section 434 of the Companies Act 2006,
but is based on the statutory financial statements for the year
then ended. The auditors have issued an unqualified opinion on
these financial statements; their report included the following
statement:
'Material uncertainty related to Going Concern
In forming our opinion on the financial statements we have
considered the adequacy of the disclosure made in note 2 to the
financial statements concerning the company's ability to continue
as a going concern. The company generated a loss during the year of
GBP298,017 and should losses continue to be generated at a similar
level without additional capital being raised from the shareholders
then the company will likely breach its capital resources
requirement with the FCA and not be able to meet its liabilities as
they fall due in the foreseeable future.
Whilst the Directors believe sufficient profits will be
generated or additional capital provided by the shareholders these
conditions along with other matters discussed in note 2 to the
financial statements indicate the existence of a significant
uncertainty which may cast significant doubt over the company's
ability to continue as a going concern.
Our opinion is not modified in respect of this matter.'
Copies of the Company's full audited Annual Report and Financial
Statements for the year ended 30 April 2019 will be delivered to
the Registrar of Companies and sent to shareholders in due course,
and will be available on the Company's website:
www.marechalecapital.com.
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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