REG - Fletcher King PLC - Half-year Report
15/12/2022 07:00
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RNS Number : 7560J Fletcher King PLC 15 December 2022
FLETCHER KING PLC
Interim Results for the 6 months ended 31 October 2022
Financial Highlights
Turnover:
£1,338,000
(2021: £1,426,000)
Earnings before tax:
£32,000 (2021: £11,000)
Basic EPS:
0.23p per share (2021: 0.12p per share)
Dividend proposed:
nil
(2021: nil)
Operational Highlights
· Earnings before tax improved slightly on the comparative period last
year, with lower operational overheads compensating for a reduction in
revenue.
· Transactional activity has stalled in the current market conditions
and this is likely to continue for a while.
· Successful in winning some new property management instructions which
will add recurring fee income to the existing portfolio of asset management
and fund management clients.
· Fee income from bank valuations has also continued to grow.
· The move to new offices has been well received and provides a welcome
reduction in property overheads.
Commenting on the results David Fletcher, Chairman of Fletcher King said:
"With inflation driving up interest rates, and the current political and
economic uncertainty, the property market is going through a period of
transition and it is unclear how long this might last. Transactional activity
is likely to remain subdued for a while as this period of price adjustment
plays out. The market turbulence will however create opportunities and we
remain vigilant to prospects for growth and development".
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.
ENQUIRIES:
Fletcher King Plc
David Fletcher / Peter Bailey
Tel: 020 7493 8400
Cairn Financial Advisers LLP (Nomad)
James Caithie / Liam Murray
Tel: 020 7213 0880
The interim results are available on the Company's website:
www.fletcherking.co.uk
CHAIRMAN'S STATEMENT
Results
Turnover for the period was £1,338,000 (2021: £1,426,000) with a profit
before tax of £32,000 (2021: £11,000).
Dividend
In view of the continued uncertainty and the low level of profit the Board is
not declaring an interim dividend (2021: no dividend).
The Commercial Property Market
Both capital and occupational markets are now suffering, mainly as a result
of the current economic and political uncertainties, and capital values in
particular have begun to decline.
The capital markets have seen a significant reduction in demand and there is
currently very little activity. A number of large transactions have fallen
through and interest in new propositions is lukewarm. This situation is likely
to continue for some time, with significant falls in capital values likely in
the second half. Nevertheless there is still considerable foreign capital
waiting to invest, particularly in Central London, and once a degree of
confidence returns to both the economy and our political leadership, we
believe that we are likely to see a significant change.
Conversely, in the letting markets, despite the fact that rental values are
now experiencing some pressure, lettings are generally reasonably active and
even in the retail sector we have achieved some satisfactory lettings in a
number of our managed portfolios. These are in locations throughout the
country, although principally in prime locations.
Demand for Grade A offices in the City and West End remains very
strong, record rents are still being achieved and we are also seeing some
substantial companies looking to bring their offices into the centre from the
suburbs.
For the first time in many years, the industrial sector is experiencing
reduced demand and capital values have come under pressure. In our view this
is likely to see it becoming the worst performing sector in the second half.
Business Overview
Bearing in mind the difficult market conditions, it is pleasing that we are
able to report a profit for the period. It would have been higher if demand in
the capital markets had not suffered.
Property Asset Management and Fund Management continue to perform well and
attract new business and we hope to add new instructions in the coming months.
Our volume of bank valuations continues to grow, despite the increased cost of
borrowing. We have added new clients during the year and this is likely to
continue.
Income from Rating Appeals remains difficult but we hope some of the long
outstanding appeals will be settled in the second half.
The Investment Department had a very disappointing first half and we
anticipate similar under performance in the months to come.
Our move to new offices has been very successful and the reduced property
overhead is welcomed in these difficult times.
Outlook
It is impossible to predict the future with so much uncertainty in the world.
We are growing our secure income flow in Property Asset Management and Fund
Management, and continue to perform well on rent collection.
The volume of valuations seems set to continue but rating is likely to be
slow.
The investment department will continue to be under pressure but we do have
some excellent instructions, although the timing of them is impossible to
predict in the current economic climate.
The good news is that our balance sheet is strong and our clients remain very
loyal for which we thank them. We have an excellent and hard-working team who
are committed to improving performance.
DAVID FLETCHER
CHAIRMAN
15 December 2022
Fletcher King Plc
Consolidated Interim Statement of Comprehensive Income
for the 6 months ended 31 October 2022
6 months ended 6 months ended Year ended
31 October 31 October 30 April
2022 2021 2022 (Audited)
(Unaudited) (Unaudited)
£000 £000 £000
Revenue 1,338 1,426 2,967
Employee benefits expense (744) (642) (1,630)
Depreciation and amortisation expense (99) (140) (346)
Gain recognised on remeasurement of lease liability - - 125
Other operating expenses (496) (643) (1,014)
Share based payment expense (9) - (10)
(1,348) (1,425) (2,875)
Other operating income 26 13 39
Investment income 24 - 18
Finance income 2 - -
Finance expense (10) (3) (15)
32 11 134
Profit before taxation
Taxation (8) - 18
Profit for the period 24 11 152
Other comprehensive income
Fair value gain on financial assets through other comprehensive income - - -
Total comprehensive income for the period 24 11 152
Earnings per share (note 4)
- Basic 0.23p 0.12p 1.62p
- Diluted 0.21p 0.12p 1.48p
Dividends per share
Interim dividend proposed - - -
Dividends paid 0.50p - -
Fletcher King Plc
Consolidated Interim Statement of Financial Position
as at 31 October 2022
31 October 31 October 30 April
2022 2021 2022
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Assets
Non-current assets
Software 69 - 76
Property, plant and equipment 237 8 266
Right-of-use asset 436 136 494
Financial assets 529 529 529
Deferred tax asset 24 - 32
1,295 673 1,397
Current Assets
Trade and other receivables 1,346 837 1,329
Corporation tax debtor - 111 97
Cash and cash equivalents 2,418 3,096 3,365
3,764 4,044 4,791
Total assets 5,059 4,717 6,188
Liabilities
Current liabilities
Trade and other payables 567 647 1,124
Provisions - 100 25
Current taxation liabilities - - -
Lease liabilities 154 580 610
Total current liabilities 721 1,327 1,759
Non current liabilities
Lease liabilities 329 - 402
Shareholders' equity
Share capital 1,025 921 1,025
Share premium 522 140 522
Investment revaluation reserve (101) (101) (101)
Share option reserve 19 - 10
Reserves 2,544 2,430 2,571
Total shareholders' equity 4,009 3,390 4,027
Total equity and liabilities 5,059 4,717 6,188
Fletcher King Plc
Consolidated Interim Statement of Changes in Equity
for the 6 months ended 31 October 2022
Investment Share
Share Share revaluation Option Retained TOTAL
capital premium reserve Reserve earnings EQUITY
£000 £000 £000 £000 £000 £000
Balance at 1 May 2022 1,025 522 2,571 4,027
(101) 10
Profit for the period - - - - 24 24
Equity dividends paid - - - - (51) (51)
Share based payment expense - - - 9
- 9
Balance at 31 October 2022 (Unaudited) 1,025 522 (101) 19 2,544 4,009
Balance at 1 May 2021 921 140 2,419 3,379
(101) -
Profit for the period - - 11 11
- -
Equity dividends paid - - - - - -
Balance at 31 October 2021 (Unaudited) 921 140 (101) - 2,430 3,390
Balance at 1 May 2021 921 140 2,419 3,379
(101) -
Profit 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 (Audited) 1,025 522 (101) 2,571 4,027
10
Fletcher King Plc
Consolidated Interim Statement of Cash Flows
for the 6 months ended 31 October 2022
6 months ended 6 months ended Year ended
31 October 31 October 30 April
2022 (Unaudited) 2021 (Unaudited) 2022
(Audited)
£000 £000 £000
Cash flows from operating activities
Profit before taxation from continuing operations 32 11 134
Adjustments for:
Movement in provision (25) - (75)
Depreciation and amortisation expense 99 140 346
Remeasurement of lease liability - - (125)
Investment income (24) - (18)
Finance income (2) - -
Finance expense 10 3 15
Share based payment expense 9 - 10
Cash flows from operating activities
before movement in working capital 99 154 287
(Increase)/decrease in trade and other receivables (17) 311 (181)
(Decrease)/increase in trade and other payables (557) (261) 216
Cash (absorbed by) / generated from operations (475) 204 322
Taxation received 97 - -
Net cash flows (used in)/generated from operating activities (378) 204 322
Cash flows from investing activities
Purchase of fixed assets (5) - (352)
Investment income 24 - 18
Finance income 2 - -
Net cash flows from investing activities 21 - (334)
Cash flows from financing activities
Lease payments (539) - (1)
Proceeds of share placing - - 547
Placing costs - - (61)
Dividends paid to shareholders (51) - -
Net cash flows from financing activities (590) - 485
Net (decrease)/increase in cash and cash equivalents (947) 204 473
Cash and cash equivalents at start of period 3,365 2,892 2,892
Cash and cash equivalents at end of period 2,418 3,096 3,365
Fletcher King Plc
Explanatory Notes
1. General information
The Company is a public limited company incorporated and domiciled in England
and Wales. The address of its registered office is 19-20 Great Pulteney
Street, London W1F 9NF.
These interim financial statements were approved by the Board of Directors on
14 December 2022.
2. Basis of preparation
The interim financial information in this report has been prepared using
accounting policies consistent with IFRS as endorsed by the UK. IFRS is
subject to amendment and interpretation by the International Accounting
Standards Board (IASB) and the International Financial Reporting Standards
Interpretations Committee (IFRIC) and there is an ongoing process of review
and endorsement by the UK Endorsement Board. The financial information has
been prepared on the basis of IFRS that the Directors expect to apply for the
year ended 30 April 2023.
The accounting policies applied by the Group in this interim report are the
same as those applied by the Group in the consolidated financial statements
for the year ended 30 April 2022. There are no new standards, interpretations
and amendments, effective for the first time from 1 May 2022, that have had a
material effect on the financial statements of the Group.
3. Non Statutory Accounts
The financial information for the period ended 31 October 2022 set out in this
interim report does not constitute the Group's statutory accounts for that
period. Whilst the financial figures included in this interim report have been
computed in accordance with IFRS, this interim report does not contain
sufficient information to constitute an interim financial report as that term
is defined in IAS34. The statutory accounts for the year ended 30 April 2022
have been delivered to the Registrar of Companies. The auditors reported on
those accounts; their report was unqualified, 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 6 months ended 31 October 2022 and 31
October 2021 is unaudited.
Fletcher King Plc
Explanatory Notes
4. Earnings per share
6 months to 31 October 2022 6 months to 31 October 2021 Year ended 30 April 2022
Number Number Number
Weighted average number of shares for basic earnings per share 10,252,209 9,209,779 9,375,425
Share options 920,000 - 920,000
Weighted average number of shares for diluted earnings per share 11,172,209 9,209,779 10,295,425
£000 £000 £000
24
Earnings for basic and diluted earnings per share: 11 152
Basic earnings per share 0.23p 0.12p 1.62p
Diluted earnings per share 0.21p 0.12p 1.48p
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