REG - Fletcher King PLC - Half-year Report
21/12/2023 07:15
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RNS Number : 5369X Fletcher King PLC 21 December 2023
FLETCHER KING PLC
("Flecther King" or the "Company")
Interim Results for the 6 months ended 31 October 2023
Financial Highlights
Turnover: £1,326,000 (2022: £1,338,000)
Earnings before tax: £50,000 (2022: £32,000)
Basic EPS: 0.33p per share (2022: 0.23p per share)
Dividend proposed: nil (2022: nil)
Operational Highlights
· Earnings before tax improved slightly on the comparative period
last year.
· The moribund commercial property market has continued to weigh on
transactional fee income but new property management instructions have
supported growth in recurring fee income.
· Anthony Ferguson joined on 1 November 2023 to launch a new
Planning specialism unit within the business. This will provide complementary
property services to existing and new clients for which there is a good
pipeline of work.
Commenting on the results David Fletcher, Chairman of Fletcher King said:
"Against a backdrop of extremely challenging property market conditions, it is
pleasing to report profitable performance for the period, with overall results
being slightly ahead of last year. Capital markets are likely to remain
subdued for a while yet, but with some good instructions in the pipeline and a
focus on improving non-transactional revenues, there are grounds for optimism
that this will translate into business growth and development in due course."
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 £1,326,000 (2022: £1,338,000) with a profit
before tax of £50,000 (2022: £32,000).
Dividend
In view of the continued uncertainty and the low level of profit, the Board is
not declaring an interim dividend (2022: no interim dividend).
The Commercial Property Market
Very little has changed overall in the market since my year end statement in
August 2023 and the drift in values has continued over the second half of 2023
as high interest rates and continuing economic and political uncertainties
have taken their toll on the commercial property market. Capital values across
the market have declined by a further 3% over the last six months, with
offices declining by nearly 10% over the same period. Over 12 months to the
end of October, values have fallen by nearly 13% and the net initial yield on
all property is currently 5.5%.
Investors are currently adopting a 'wait and see' attitude although there is
some evidence that the market could be near the bottom and that 2024 could see
a bounce in the markets. There will undoubtedly be some interesting
opportunities over the next year for the brave investor.
On the occupational side there is some activity in the three major sectors,
particularly in the industrial sector albeit at a much reduced level compared
to pre Covid, and rents are generally static.
Offices continue to suffer and rents are coming under increasing pressure as
hybrid working is proving to be more enduring and becoming the norm. However,
in specific sub-sectors where there is a scarcity of grade A space such as
central London and major regional cities, demand is still strong and there
is some rental growth.
Retail space continues to come under severe pressure and rents continue their
decline.
The Board is hopeful that 2024 will herald the beginning of the upturn
although the political uncertainties may prolong inactivity.
Business Overview
I am pleased that, despite this very difficult market, we are again reporting
a profit.
We have had strong performance in Property Asset and Fund Management and have
secured new instructions. There has also been activity in our existing
portfolios.
The performance of the valuation team has been encouraging and we are
expanding the team as new clients have been added during the year.
A number of sizeable Rating appeals are ongoing but overall there are still
huge challenges securing the attention of the Valuation Office Agency (VOA) to
negotiate settlements. Potentially the situation could deteriorate in 2024
when the VOA will be commencing preparation of the 2026 Rating List which will
inevitably diminish resources allocated to clearing outstanding appeals.
Investment transaction activity has been disappointing as a result of the poor
investment market conditions mentioned above.
Outlook
Yet again it continues to be impossible to accurately predict the future of
the property market and the timing of its recovery. With a focus on improving
non-transactional fee income, our activities are healthy and growing and we
look forward to a reinvigorated capital market.
We are pleased to announce an expansion of the business with the appointment
of Anthony Ferguson (Member of Royal Town Planning Institute) to head up our
newly created Planning specialism. We have been working with Anthony for a
number of years and we are delighted to have him joining us. There is a
significant pipeline of planning work to be done.
Our balance sheet continues to remain strong, as does the relationships we
have with our long standing clients.
As always our team have worked hard in these difficult conditions and we thank
them for their efforts.
DAVID FLETCHER
CHAIRMAN
20 December 2023
Fletcher King Plc
Consolidated Interim Statement of Profit or Loss and Comprehensive Income
for the 6 months ended 31 October 2023
6 months ended 6 months ended Year ended
31 October 31 October 30 April
2023 2022 2023 (Audited)
(Unaudited) (Unaudited)
£000 £000 £000
Revenue 1,326 1,338 3,079
Employee benefits expense (764) (744) (1,704)
Depreciation and amortisation expense (97) (99) (197)
Other operating expenses (470) (496) (1,064)
Other operating income 27 26 51
Share based payment expense (9) (9) (17)
(1,313) (1,322) (2,931)
Investment income 7 24 42
Finance income 37 2 21
Finance expense (7) (10) (19)
50 32 192
Profit before taxation
Taxation (16) (8) 41
Profit for the period 34 24 233
Other comprehensive income
Fair value loss on financial assets through other comprehensive income - - (44)
Total comprehensive income for the period 34 24 189
Earnings per share (note 4)
- Basic 0.33p 0.23p 2.27p
- Diluted 0.30p 0.21p 2.09p
Dividends per share
Interim dividend proposed - - -
Dividends paid 0.75p 0.50p 0.50p
Fletcher King Plc
Consolidated Interim Statement of Financial Position
as at 31 October 2023
31 October 31 October 30 April
2023 2022 2023
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Assets
Non-current assets
Software 53 69 61
Property, plant and equipment 173 237 205
Right-of-use asset 321 436 378
Financial assets 485 529 485
Deferred tax asset 57 24 73
1,089 1,295 1,202
Current Assets
Trade and other receivables 1,242 1,346 1,553
Cash and cash equivalents 2,606 2,418 2,755
3,848 3,764 4,308
Total assets 4,937 5,059 5,510
Liabilities
Current liabilities
Trade and other payables 419 567 901
Lease liabilities 141 154 141
Total current liabilities 560 721 1,042
Non current liabilities
Lease liabilities 229 329 286
Shareholders' equity
Share capital 1,025 1,025 1,025
Share premium 522 522 522
Investment revaluation reserve (145) (101) (145)
Share option reserve 36 19 27
Reserves 2,710 2,544 2,753
Total shareholders' equity 4,148 4,009 4,182
Total equity and liabilities 4,937 5,059 5,510
Fletcher King Plc
Consolidated Interim Statement of Changes in Equity
for the 6 months ended 31 October 2023
Investment Share
Share Share revaluation Option Retained TOTAL
capital premium reserve Reserve earnings EQUITY
£000 £000 £000 £000 £000 £000
Balance at 1 May 2023 1,025 522 2,753 4,182
(145) 27
Profit for the period - - - - 34 34
Equity dividends paid - - - - (77) (77)
Share based payment expense - - - 9
- 9
Balance at 31 October 2023 (Unaudited) 1,025 522 (145) 36 2,710 4,148
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 2022 1,025 522 2,571 4,027
(101) 10
Profit for the year - - 233 233
- -
Fair value loss on financial assets through - - - (44)
(44) -
other comprehensive income
Share based payment expense - - - - 17
17
Equity dividends paid - - - - (51) (51)
Balance at 30 April 2023 (Audited) 1,025 522 (145) 2,753 4,182
27
Fletcher King Plc
Consolidated Interim Statement of Cash Flows
for the 6 months ended 31 October 2023
6 months ended 6 months ended Year ended
31 October 31 October 30 April
2023 (Unaudited) 2022 (Unaudited) 2023
(Audited)
£000 £000 £000
Cash flows from operating activities
Profit before taxation from continuing operations 50 32 192
Adjustments for:
Movement in provision - (25) (25)
Depreciation and amortisation expense 97 99 197
Investment income (7) (24) (42)
Finance income (37) (2) (21)
Finance expense 7 10 19
Share based payment expense 9 9 17
Cash flows from operating activities
before movement in working capital 119 99 337
Decrease/(increase) in trade and other receivables 311 (17) (224)
(Decrease)/increase in trade and other payables (482) (557) (223)
Cash absorbed by operations (52) (475) (110)
Taxation received - 97 97
Net cash flows used in operating activities (52) (378) (13)
Cash flows from investing activities
Purchase of fixed assets - (5) (5)
Investment income 7 24 42
Finance income 37 2 21
Net cash flows from investing activities 44 21 58
Cash flows from financing activities
Lease payments (64) (539) (604)
Dividends paid to shareholders (77) (51) (51)
Net cash flows from financing activities (141) (590) (655)
Net decrease in cash and cash equivalents (149) (947) (610)
Cash and cash equivalents at start of period 2,755 3,365 3,365
Cash and cash equivalents at end of period 2,606 2,418 2,755
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
20 December 2023.
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 2024.
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 2023. There are no new standards, interpretations
and amendments, effective for the first time from 1 May 2023, that have had a
material effect on the financial statements of the Group.
3. Non Statutory Accounts
The financial information for the periods ended 31 October 2023 and 31 October
2022 and the year ended 30 April 2023 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 2023 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 2023 and 31
October 2022 is unaudited.
Fletcher King Plc
Explanatory Notes
4. Earnings per share
6 months to 31 October 2023 6 months to 31 October 2022 Year ended 30 April 2023
Number Number Number
Weighted average number of shares for basic earnings per share 10,252,209 10,252,209 10,252,209
Share options 920,000 920,000 920,000
Weighted average number of shares for diluted earnings per share 11,172,209 11,172,209 11,172,209
£000 £000 £000
34
Earnings for basic and diluted earnings per share: 24 233
Basic earnings per share 0.33p 0.23p 2.27p
Diluted earnings per share 0.30p 0.21p 2.09p
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.
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