REG - Fletcher King PLC - Half-year Report
23/12/2024 07:00
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RNS Number : 0230R Fletcher King PLC 23 December 2024
FLETCHER KING PLC
("Fletcher King" or the "Company")
Interim Results for the 6 months ended 31 October 2024
Financial Highlights
Unaudited six months to 31 October 24 Unaudited six months to 31 October 2023 Audited year to 30 April 2024
Turnover: £1,603,000 £1,326,000 £3,826,000
Earnings before tax: £85,000 £50,000 £452,000
Basic EPS per share: 0.52p 0.33p 2.75p
Dividend proposed per share: nil nil 2.25p
Operational Highlights
· Earnings before tax improved on the comparative period last year.
· Capital markets remained sluggish during the period, with poor
volumes, which impacted our transactional fee income.
· Revenues from Property Management, Valuation, Rating, and
Planning services have all grown over the period.
Commenting on the results David Fletcher, Chairman of Fletcher King said:
"It is encouraging that we have been able to maintain profitability in these
difficult and challenging times and we are pleased to report overall financial
performance that is ahead of the comparative period last year. We have been
successful in expanding our non-transactional activities, but it remains much
too early to predict when the transactional market will improve. Our strong
balance sheet continues to provide comfort as well as the potential for
investment activity if we find the right opportunity."
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 £1,603,000 (2023: £1,326,000) with a profit
before tax of £85,000 (2023: £50,000).
Dividend
In view of the continued uncertainty and the low level of profit, the Board is
not declaring an interim dividend (2023: no interim dividend).
The Commercial Property Market
As 2024 draws to a close, another year of a sluggish property market grinds
on. Over the last 12 months commercial property has produced a total return of
5.4% with capital decline of 0.5% but boosted by a healthy income return of
circa 6%. The industrial sector continues to drive the performance with a
total return of 7.7% closely followed by retail, (of course off a much lower
base) with offices being the laggards with disappointing figures of -1.7%
total return and a capital decline of 7.2% (source: MSCI).
Drilling down into the sub-sectors, grade A shopping centres and retail
warehousing have performed best along with regional industrial. In the coming
year a number of institutions and two of the largest UK property companies
have plans for major retail acquisitions as they believe the market has now
reached the bottom with signs of green shoots appearing.
The Chancellor's recent announcement that there is to be a consolidation of
Local Government Pension Schemes into eight megafunds could also boost market
activity as they will be able to invest at a far greater scale.
Whilst the industrial sector is set to continue to provide solid performance
in the coming year, there seems to be no light at the end of the tunnel for
the office sector which continues to struggle with new technology and green
energy costs, accelerating obsolescence and hybrid working. Announcements in
the recent budget on increases to National Insurance may also deter companies
from expanding as they have to soak up the increased employers' costs.
Rents across the whole market have grown by approximately 3.6% although this
figure hides the considerable disparity between specific regions and sectors.
However, industrial rental growth has again outperformed all other sectors
with over 6% increase in rental values. Despite the considerable challenges
the office market faces, occupiers are still prepared to pay inflated prices
for top quality grade A space with the latest technology. This is evidenced by
the recent letting of 22,500 square feet at 22 Bishopsgate at £122 per square
foot which is the highest rent ever achieved in the City of London where
vacancy rates have hit near record lows for prime accommodation with
availability at 0.5%.
Business Overview
Increasingly, when I sit down to write the year end and interim statements, I
find myself repeating what has been said before. However, that is a reflection
of what is happening in the market and Fletcher King.
With the exception of transaction fee income, which continues to be affected
by the poor capital markets, we are performing well in all other sectors. We
are cautiously expanding property management, valuation and planning services
to meet growing demand. This cannot be said for many of our competitors.
Outlook
The outlook for our second half is difficult to predict and it remains
impossible to accurately forecast the future of the market and the timing of
its recovery. However, we are well placed to take advantage of the uplift when
it comes.
As always, our balance sheet is strong which gives comfort to clients and
staff alike.
DAVID FLETCHER
CHAIRMAN
20 December 2024
Fletcher King Plc
Consolidated Interim Statement of Profit or Loss and Comprehensive Income
for the 6 months ended 31 October 2024
6 months ended 6 months ended Year ended
31 October 31 October 30 April
2024 2023 2024 (Audited)
(Unaudited) (Unaudited)
£000 £000 £000
Revenue 1,603 1,326 3,826
Employee benefits expense (967) (764) (2,195)
Depreciation and amortisation expense (98) (97) (194)
Other operating expenses (514) (470) (1,078)
Other operating income 22 27 51
Share based payment expense (26) (9) (58)
(1,583) (1,313) (3,474)
Investment income - 7 20
Finance income 70 37 94
Finance expense (5) (7) (14)
85 50 452
Profit before taxation
Taxation (32) (16) (170)
Profit for the period 53 34 282
Other comprehensive income
Fair value loss on financial assets through other comprehensive income - - (6)
Total comprehensive income for the period 53 34 276
Earnings per share (note 4)
- Basic 0.52p 0.33p 2.75p
- Diluted 0.52p 0.33p 2.75p
Dividends per share
Interim dividend proposed - - -
Dividends paid 2.25p 0.75p 0.75p
Fletcher King Plc
Consolidated Interim Statement of Financial Position
as at 31 October 2024
31 October 31 October 30 April
2024 2023 2024
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
(restated)*
Assets
Non-current assets
Software 49 53 58
Property, plant and equipment 111 173 142
Right-of-use asset 206 321 263
Financial assets - 485 -
Deferred tax asset - 57 -
366 1,089 463
Current Assets
Trade and other receivables 1,220 1,242 1,968
Cash and cash equivalents 824 556 1,327
Fixed term deposits 2,950 2,050 2,500
4,994 3,848 5,795
Total assets 5,360 4,937 6,258
Liabilities
Current liabilities
Trade and other payables 716 419 1,410
Corporation tax 129 - 97
Lease liabilities 120 141 120
Total current liabilities 965 560 1,627
Non current liabilities
Lease liabilities 107 229 192
Shareholders' equity
Share capital 1,025 1,025 1,025
Share premium 522 522 522
Investment revaluation reserve - (145) -
Share option reserve 111 36 85
Reserves 2,630 2,710 2,807
Total shareholders' equity 4,288 4,148 4,439
Total equity and liabilities 5,360 4,937 6,258
* Restated following reclassification of fixed term deposits with a maturity
date of greater than three months at inception which on further review did not
meet the definition of cash and cash equivalents (see note 2).
Fletcher King Plc
Consolidated Interim Statement of Changes in Equity
for the 6 months ended 31 October 2024
Investment Share
Share Share revaluation Option Retained TOTAL
capital premium reserve Reserve earnings EQUITY
£000 £000 £000 £000 £000 £000
Balance at 1 May 2024 1,025 522 2,807 4,439
- 85
Profit for the period - - - - 53 53
Equity dividends paid - - - - (230) (230)
Share based payment expense - - - 26
- 26
Balance at 31 October 2024 (Unaudited) 1,025 522 - 111 2,630 4,288
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 2023 1,025 522 2,753 4,182
(145) 27
Profit for the year - - 282 282
- -
Fair value loss on financial assets through - - - (6)
(6) -
other comprehensive income
Share based payment expense - - - - 58
58
Equity dividends paid - - - - (77) (77)
Transfer on disposal of financial asset - - 151 (151) -
-
Balance at 30 April 2024 (Audited) 1,025 522 - 2,807 4,439
85
Fletcher King Plc
Consolidated Interim Statement of Cash Flows
for the 6 months ended 31 October 2024
6 months ended 6 months ended Year ended
31 October 31 October 30 April
2024 (Unaudited) 2023 (Unaudited) 2024
(Audited)
£000 £000 £000
(restated)*
Cash flows from operating activities
Profit before taxation from continuing operations 85 50 452
Adjustments for:
Depreciation and amortisation expense 98 97 194
Investment income - (7) (20)
Finance income (70) (37) (94)
Finance expense 5 7 14
Share based payment expense 26 9 58
Cash flows from operating activities
before movement in working capital 144 119 604
Decrease/(increase) in trade and other receivables 748 311 (415)
(Decrease)/increase in trade and other payables (694) (482) 509
Net cash flows from / (used in) operating activities 198 (52) 698
Cash flows from investing activities
Purchase of fixed assets - - (14)
Sale of financial asset - - 479
Increase in fixed term deposits (450) (563) (1,013)
Investment income - 7 20
Finance income 70 37 94
Net cash flows used in investing activities (380) (519) (434)
Cash flows from financing activities
Lease payments (91) (64) (128)
Dividends paid to shareholders (230) (77) (77)
Net cash flows used in financing activities (321) (141) (205)
Net (decrease)/increase in cash and cash equivalents (503) (712) 59
Cash and cash equivalents at start of period 1,327 1,268 1,268
Cash and cash equivalents at end of period 824 556 1,327
* Restated following reclassification of fixed term deposits with a maturity
date of greater than three months at inception which on further review did not
meet the definition of cash and cash equivalents (see note 2).
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 2024.
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 2025.
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 2024. There are no new standards, interpretations
and amendments, effective for the first time from 1 May 2024, that have had a
material effect on the financial statements of the Group.
The Statement of Financial Position as at 31 October 2023 and the Statement of
Cash Flows for the six month period to 31 October 2023 have been restated
following reclassification of fixed term deposits with a maturity date of
greater than three months at inception which on further review did not meet
the definition of cash and cash equivalents.
3. Non Statutory Accounts
The financial information for the periods ended 31 October 2024 and 31 October
2023 and the year ended 30 April 2024 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 2024 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 2024 and 31
October 2023 is unaudited.
Fletcher King Plc
Explanatory Notes
4. Earnings per share
6 months to 31 October 2024 6 months to 31 October 2023 Year ended 30 April 2024
Number Number Number
Weighted average number of shares for basic earnings per share 10,252,209 10,252,209 10,252,209
Share options (dilution at prevailing average share price) 27,545 - -
Weighted average number of shares for diluted earnings per share 10,279,754 10,252,209 10,252,209
£000 £000 £000
53
Earnings for basic and diluted earnings per share: 24 282
Basic earnings per share 0.52p 0.33p 2.75p
Diluted earnings per share 0.52p 0.33p 2.75p
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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