REG - Fletcher King PLC - Final Results
08/08/2023 07:00
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RNS Number : 5748I Fletcher King PLC 08 August 2023
FLETCHER KING PLC
Audited results for the Year Ending 30 April 2023
Highlights
· Revenue for the year of £3,079,000 (2022: £2,967,000)
· Statutory profit before tax of £192,000 (2022: £134,000)
· Adjusted profit before tax of £165,000 (2022: £144,000) *
· Adjusted basic earnings per share of 2.01p (2022: 1.73p) **
· Final proposed dividend: 0.75p per share (2022: 0.50p per share)
· Significant cash reserves: £2.8m as at 30 April 2023 (2022:
£3.4m)
*Adjusted profit before tax is before share-based payment expenses and after
other comprehensive income (see note 2). The Board considers the adjusted
results to be an important measure of performance due to the nature of the
Company, and with share options being awarded to directors and key staff only.
**Adjusted basic earnings per share is calculated using adjusted profits (see
note 4).
The Annual Report and Accounts will shortly be posted on 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:
"We are pleased to report improved results compared with last year and to be
able to recommend an increased dividend payment. We have started the new
financial year with some encouraging instructions and are optimistic for the
forthcoming period".
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, Non-Executive Chairman
Peter Bailey, Finance Director
Cairn Financial Advisers LLP Tel: +44 (0) 20 7213 0880
(Nominated Adviser)
James Caithie
Liam Murray
CHAIRMAN'S STATEMENT
Results
Revenue for the year was £3,079,000 (2022: £2,967,000). Adjusted profit
before tax (see note 2) was £165,000 (2022: £144,000). Statutory profit
before tax was £192,000 (2022: £134,000).
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).
Dividend
The Board is proposing a final dividend of 0.75p per share. The final dividend
is subject to shareholder approval at the AGM and will be paid on 27 October
2023 to shareholders on the register at the close of business on 29 September
2023. With no interim dividend paid (2022: £nil per share) the dividend for
this year will amount to 0.75p per share (2022: 0.5p per share).
The Commercial Property Market
Looking back to my statement twelve months ago, I reported that both the
letting and capital markets were considerably more buoyant than the previous
year. Regrettably that state of affairs did not continue.
Due to the uncertainties of the economy, with interest rates rising and
inflation falling much more slowly than expected, the commercial property
capital markets are currently moribund. The potential for a change of
Government is further clouding investors' vision and whilst there is a
considerable volume of funds waiting to enter the commercial property market,
the timing is unpredictable.
In contrast to the property capital markets, the letting markets,
particularly in London and other big cities, are still reasonably active
although this is primarily for grade A office space which is still in demand
with higher rents achieved than in the previous year.
Business Overview
Despite the difficult market I am pleased to report an overall growth in
turnover and profit for the year.
Once again, Property Asset and Fund Management enjoyed a strong year with new
clients added.
Bank valuations also continued to grow, with an increase in instructions from
new lenders.
I am pleased to report that, at last, rating appeals moved ahead and some
very long-standing large appeals were successfully concluded and
hopefully that progress will continue.
The Investment department has had a very difficult year, along with most in
the property industry, and recorded its worst results for some time. We
believe this was a reflection of falling capital values resulting from the
political and economic uncertainties reported above.
Outlook
It continues to be impossible to accurately predict the future of the property
markets and thus our performance, whilst current uncertainties prevail.
Nevertheless, we are reasonably optimistic for the coming year particularly as
we are in discussion with a number of potential new Property Management
instructions.
We anticipate that the volume of valuations will continue to grow and we
expect rating appeals to do likewise.
We also expect the Investment Department to do much better this coming year
but the volume of their work is particularly difficult to predict under
current circumstances.
The general state of the market has not been conducive to generating activity
with our new large shareholder but we will continue to look for opportunities
to collaborate in the forthcoming period.
As usual, our balance sheet and cash reserves remain strong and that continues
to be of great importance in these volatile times.
Our loyal clients and hard-working and talented staff have enabled us to
perform well this year and on behalf of the Board I thank them all.
DAVID FLETCHER
CHAIRMAN
7 August 2023
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 30 April 2023
Note 2023 2022
£000 £000
Continuing operations
Revenue 3,079 2,967
Employee benefits expense (1,704) (1,630)
Depreciation expense (197) (346)
Gain recognised on remeasurement of lease liability - 125
Other operating expenses (1,064) (1,014)
Share based payment expense (17) (10)
(2,982) (2,875)
Other operating income 51 39
Investment income 42 18
Finance income 21 -
Finance expense (19) (15)
Profit before taxation 192 134
Taxation 41 18
Profit for the year 233 152
Other comprehensive income: amounts not to be
reclassified to profit or loss
Fair value loss on financial assets through (44) -
other comprehensive income
Total comprehensive income for the year attributable to equity shareholders
189 152
Earnings per share
Basic 4 2.27p 1.62p
Diluted 4 2.09p 1.48p
Adjusted earnings per share
Basic 4 2.01p 1.73p
Diluted 4 1.84p 1.58p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 April 2023
2023 2022
£000 £000
Assets
Non-current assets
Intangible assets 61 76
Property, plant and equipment 205 266
Right-of-use asset 378 494
Financial assets 485 529
Deferred tax assets 73 32
1,202 1,397
Current assets
Trade and other receivables 1,553 1,375
Corporation tax debtor - 97
Cash and cash equivalents 2,755 3,365
4,308 4,791
Total assets 5,510 6,188
Liabilities
Current liabilities
Trade and other payables 901 1,124
Provisions - 25
Lease liabilities 141 610
1,042 1,759
Non-current liabilities
Lease liabilities 286 402
Total liabilities 1,328 2,161
Shareholders' equity
Share capital 1,025 1,025
Share premium 522 522
Investment revaluation reserve (145) (101)
Share option reserve 27 10
Retained Earnings 2,753 2,571
Total shareholders' equity 4,182 4,027
Total equity and liabilities 5,510 6,188
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 April 2023
2023 2022
£000 £000
Cash flows from operating activities
Profit before taxation from continuing operations 192 134
Adjustments for:
Movement in provision (25) (75)
Depreciation and amortisation expense 197 346
Remeasurement of lease liability - (125)
Investment income (42) (18)
Finance income (21) -
Finance expense 19 15
Share based payment expense 17 10
Cash flows from operating activities before
movement in working capital
337 287
Increase in trade and other receivables (224) (181)
(Decrease)/increase in trade and other payables (223) 216
Cash (absorbed by) / generated from operations (110) 322
Taxation received 97 -
Net cash flows from operating activities (13) 322
Cash flows from investing activities
Purchase of fixed assets (5) (352)
Investment income 42 18
Finance income 21 -
Net cash flows from investing activities 58 (334)
Cash flows from financing activities
Lease payments (604) (1)
Proceeds of share placing - 547
Placing costs - (61)
Dividends paid to shareholders (51) -
Net cash flows from financing activities (655) 485
Net (decrease)/increase in cash and cash equivalents (610) 473
Cash and cash equivalents at start of year 3,365 2,892
Cash and cash equivalents at end of year 2,755 3,365
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 April 2023
Investment Share option reserve
Note Share Share Revaluation Retained TOTAL
capital premium Reserve Earnings EQUITY
£000 £000 £000 £000 £000 £000
Balance as at 1 May 2021 921 140 (101) - 2,419 3,379
Total comprehensive income for the year - - - - 152 152
Share issue 104 443 - - - 547
Cost of share issue - (61) - - - (61)
Share based payment expense - - - 10 - 10
Balance at 30 April 2022 1,025 522 (101) 10 2,571 4,027
Profit for the year - - - - 233 233
Fair value loss on financial assets - - (44) - - (44)
through other comprehensive income
Share based payment expense - - - 17 - 17
Equity dividends paid 2 - - - - (51) (51)
Balance at 30 April 2023 1,025 522 (145) 27 2,753 4,182
NOTES
1. General information
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with UK-adopted international accounting
standards, 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 UK-adopted international
accounting standards 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 2023 or 30 April 2022.
The financial information for the year ended 30 April 2022 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 2023 is derived from the
audited statutory accounts for the year ended 30 April 2023 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 - 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 2023 2022
£000 £000
Profit before taxation 192 134
Add back: Share based payment expense 17 10
Include: Fair value loss on financial assets through OCI (44) -
Adjusted profit before share-based payment expense and taxation 165 144
Taxation 41 18
Adjusted profit after tax for the year 206 162
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.
3. Dividends
Year ended 30 April 2023 2022
£000 £000
Equity dividends on ordinary shares:
Declared and paid during year
Ordinary final dividend for the year ended 30 April 2022: 0.50p per share 51 -
(2021: nil)
Interim dividend for the year ended 30 April 2023: nil per share - -
(2022: nil)
51 -
Proposed ordinary final dividend for the year ended
30 April 2023: 0.75p per share 77
4. Earnings per share
Number of shares 2023 2022
No No
Weighted average number of shares for basic earnings per share 10,252,209 9,375,425
Share options 920,000 920,000
Weighted average number of shares for diluted earnings per share 11,172,209 10,295,425
Earnings £000 £000
Profit after tax for the year 233 152
(used to calculate the basic and diluted earnings per share)
Add back: Share based payment expense 17 10
Include: Fair value loss on financial assets through OCI (44) -
Adjusted profit after tax for the year 206 162
(used to calculate the adjusted basic and diluted earnings per share)
Earnings per share
Basic 2.27p 1.62p
Diluted 2.09p 1.48p
Adjusted earnings per share
Basic 2.01p 1.73p
Diluted 1.84p 1.58p
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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