REG-Marechale Capital Plc: Final Results
20/08/2024 07:15
20 August 2024
Marechale Capital plc
("Marechale" or the "Company")
Financial Statements for the Year Ended 30 April 2024
Marechale Capital Plc (AIM: MAC), an established City of London based
corporate finance house with a long-term track record and a strong reputation
for advising and financing high growth consumer brands, leisure, clean energy,
mineral extraction and technology companies, is pleased to announce its
audited final results for the year ended 30 April 2024 (the “Period”).
Chairman’s Statement
Marechale Capital plc, an established City of London based corporate finance
house with a long-term track record and a strong reputation for advising and
financing high growth consumer brands, leisure, clean energy and technology
companies in the UK and Europe, is pleased to announce its audited final
results for the year ended 30 April 2024 (the "Period”). Marechale also
uses its Balance Sheet to co-invest in its client companies, along with
warrants and founder equity, in order to create shareholder value.
As reported in the interim results statement in December 2023, it has been a
challenging year generally and in the hospitality sector in particular, as a
number of businesses negotiated a continuing period of market uncertainty,
with increased inflation driven overheads, compounded by a squeeze in
discretionary spending. However, against this challenging backdrop, there are
significant market opportunities for Marechale’s clients.
The Company entered the Period with good levels of business activity and
funded clients in both the hospitality sector, as well as clients in other
high growth sectors. Completed projects include further equity funding for the
European telecommunications technology company, Fast2Fibre, Chestnut Group,
the leading East Anglian Inn Group, and for Brewhouse & Kitchen, the expanding
gastro pub business. Also, additional funding has been raised for The Forest
Road Brewing Company, the award-winning London craft brewer, as well as a
further equity round for Weardale Lithium at a premium valuation.
Marechale continues to generate professional services income by providing
advice to its clients. In the last year this included strategic and funding
advice for the Chestnut Group and Brewhouse & Kitchen.
In the clean energy space, general market uncertainty has impacted some of our
corporate clients whose progress has been delayed and resulted in some
investor exits being postponed.
However, significant progress continues to be made with the lithium extraction
business, Weardale Lithium Ltd, and our pipeline of new and increasingly
diversified projects remains robust.
Weardale Lithium Ltd is Marechale’s largest investment, comprising 500,000
founder shares and 20,800 options with a combined value of £3.0 million which
has been recorded in the Balance Sheet. Weardale has proved lithium reserves
in its secured mineral rights in Co. Durham and has submitted a planning
application to build a pilot plant to utilise its existing boreholes.
Marechale remains optimistic for a positive future outcome on this
investment. Despite some individual write-downs on investments, the overall
total value of our Balance Sheet Investments, comprising equity and warrants
in client companies, has strengthened. The total value of the Balance Sheet
has increased to £3,346,000 in 2024 (2023: £3,227,000). This increase
reflects our strategic investment decisions and the underlying strength of our
asset base.
Please note that, within the rules of the Accounting Standards, the Board has
taken the decision to declare separately as ‘Exceptional Costs’ various
impairment provisions for bad debts and loan notes owed by two Investee
Companies. Please be advised that at the time of writing, these companies
remain trading but under severe financial distress. We expect both companies
to be refinanced in the near future, in which case the impairment provisions
will be credited back to the P&L in 2024-25.
It is also worth noting that the Company has £770,000 of unused capital tax
losses to offset against any possible future tax liability on realisation of
gains.
Marechale’s revenue for the year saw a substantial increase to £668,816,
compared to £376,000 in the previous financial year. This growth of nearly
78% is a testament to the robust strategies the Company has implemented and
the hard work of our dedicated team. However, commissions paid to 3rd parties
involved in transactions increased by 81%.
While we continue to navigate through various market challenges, I am pleased
to report a significant reduction in Marechale’s operating loss for the
year, from £372,000 in 2023 to £296,000 this year. Marechale’s net loss
before tax for the year stands at £183,000, a notable improvement from the
net loss of £426,000 reported in 2023. And, although gross profit margin
decreased from 32% to 30%, administrative expenses remained steady at
£494,000 (2023: £488,000). This reduction in net loss demonstrates ongoing
efforts to enhance operational efficiencies and control costs.
The Company’s focus is to use its reputation and deal flow as a corporate
finance adviser to build shareholder value in Marechale’s balance sheet.
This has been achieved by negotiating equity and warrant positions, and joint
venture arrangements as part of its terms of engagement with growth company
clients. Marechale’s historical investment performance has been excellent in
this regard, having achieved double digit internal rates of return across all
the companies that it has funded since 2010. The Board are confident that the
investments in Weardale Lithium, Burgh Island, Chestnut Group, Fast2Fibre and
Forest Road Brewery, amongst others, will deliver uplifts in value in due
course.
I would like to take this opportunity to express our profound gratitude to
Lord Flight, who has stepped down from the Board after many years of dedicated
service. His invaluable contributions and guidance have been much appreciated,
and we wish him all the best in his future.
At the same time, we are delighted to welcome Chris Kenning as our new
Non-Executive Director. Chris brings a wealth of experience and expertise to
the Board. He has a distinguished background in finance and business
development, having held senior positions in several prominent firms. Chris is
already a significant shareholder in our Company, and we are confident that
his insights and strategic acumen will be highly beneficial as we continue to
drive the Company forward. Since Chris acquired his shareholding in Marechale,
we have been working with him on a number of corporate finance projects with
his business Stubben Edge, and we continue to explore how we can digitalise
our transaction processes for our earlier stage corporate finance projects.
Whilst the current economic climate remains challenging, the Board remains
positive about the investments that it holds in its client companies, and
optimistic that the Company, with its sufficient cash reserves, will continue
to generate further uplifts on its current and future equity and warrant
investments, both in the short and longer term. The Company continues to
develop further its proven track record as a corporate finance adviser by
seeking further deal flow in the high growth £10-50 million Enterprise Value
PE sector.
As we look to the future, the Board remains committed to building on this
year's positive momentum. The Company will continue to focus on enhancing
revenue stream and delivering value to shareholders.
In closing, I would like to extend my heartfelt thanks to shareholders,
employees, and clients for their continued support and confidence in the
Company. The Board looks forward to another year of progress and achievement.
Mark Warde-Norbury
Chairman
19 August 2024
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation.
For further information please contact:
Marechale Capital plc Tel: +44 (0)20 7628 5582
Mark Warde-Norbury / Patrick Booth-Clibborn
Cairn Financial Advisers LLP (Nomad and Broker) Tel: +44 (0)20 7213 0880
Jo Turner / Sandy Jamieson
Statement of Comprehensive Income
For year ended 30 April 2024
Year ended Year ended
30-Apr 30-Apr
2024 2023
(£) (£)
Continuing operations
Revenue 668,816 375,726
Cost of sales (471,433) (260,581)
Gross profit 197,384 115,145
Administrative expenses (493,643) (487,626)
Operating loss (296,260) (372,481)
Bank interest paid (net) (428) (912)
Other gains/(losses) 223,004 (52,124)
Exceptional costs (109,303) -
(Loss)/profit before tax (182,987) (425,516)
Taxation - -
(Loss)/ profit for the year on continuing operations (182,987) (425,516)
Earnings per share (Pence) (Pence)
Basic - Continuing operations 10 (0.18) (0.45)
- Diluted 10 (0.18) (0.45)
Statement of Comprehensive Income
(Loss)/ profit for the year on continuing operations (182,987) (425,516)
Total recognised comprehensive profit
(all attributable to owners of the company) (182,987) (425,516)
Statement of Financial Position
As at 30 April 2024
Year ended Year ended
30-Apr 30-Apr
2024 2023
(£) (£)
Current assets
Investment in subsidiary 2 2
Equity investments at fair value through profit and loss 3,039,659 2,862,653
Warrants at fair value through profit and loss 108,482 130,076
Trade and other receivables 34,590 75,933
Cash and cash equivalents 248,196 282,795
Total current assets 3,430,929 3,351,459
Total assets 3,430,929 3,351,459
Current liabilities
Trade and other payables (62,035) (91,558)
Borrowings (10,000) (10,000)
Total current liabilities (72,035) (101,558)
Net current assets 3,358,895 3,249,902
Long-term liabilities
Borrowings (12,500) (22,500)
Net assets 3,346,395 3,227,402
Equity
Capital and reserves attributable to equity shareholders
Share capital 847,530 763,690
Share premium 481,290 329,330
Reserve for own shares (50,254) (50,254)
Reserve for share based payments 150,168 83,988
Retained profits/(losses) 1,917,661 2,100,648
3,346,395 3,227,402
The financial statements were approved by the Board of Directors and authorised for issue on 19 August 2024.
They were signed on its behalf by:
Mark Warde-Norbury
Director
Company No: 03515836
Statement of Changes in Equity
For year ended 30 April 2024
Share capital Share premium Reserve for own shares Reserve for share based payments Retained earnings
Balance at 30 April 2022 763,023 328,413 (50,254) 62,313 2,526,165
Total comprehensive income
(Loss) for the financial year - - - - (425,517)
Share based payments in the year - - - 21,675 -
Issued in year 667 917 - - -
Total comprehensive income 667 917 - 21,675 (425,517)
Balance at 30 April 2023 763,690 329,330 (50,254) 83,988 2,100,648
Total comprehensive income
(Loss) for the financial year - - - - (182,987)
Share based payments in the year - - - 66,180 -
Issued in year 83,840 151,960 - - -
Total comprehensive income 83,840 151,960 - 66,180 (182,987)
Balance at 30 April 2024 847,530 481,290 (50,254) 150,168 1,917,661
Statement of Changes of Cash Flows
For year ended 30 April 2024
Year ended Year ended
30-Apr 30-Apr
2024 2023
(£) (£)
Net cash from operating activities
(Loss)/profit before tax (182,987) (425,516)
Reverse provision for share based payments 66,180 21,676
Reverse losses/ (gains) on fair value investment through profit and loss (228,406) 16,513
Reverse provision for exceptional costs 109,303 -
Reverse losses on disposal of investments 5,402 18,075
Reverse net interest expense 428 912
Operating cash outflows before movements in working capital (230,080) (368,341)
Movement in working capital
(Increase)/decrease in receivables 3,539 (32,157)
Increase/(decrease) in payables (29,523) 34,190
Tax paid - -
(25,983) 2,033
Cash outflow from operating activities (256,063) (366,308)
Investment activities
Interest received 272 -
Expenditure on equity investments (6,572) -
Proceeds from sale of equity investments through profit and loss 2,664 226,925
Cash inflow/(outflow) from investing activities (3,636) 226,925
Financing
Issue of ordinary share capital 235,800 1,584
Repayment of borrowings (10,000) (10,000)
Interest payable (699) (912)
Cash inflow from financing activities 225,101 (9,328)
Net increase in cash and cash equivalents (34,599) (148,711)
Cash and cash equivalents at start of the financial year 282,795 413,970
Cash and cash equivalents at end of the financial year 248,196 282,795
Notes to the Financial Statements
Year ended 30 April 2024
1. General information
Marechale Capital PLC is a company registered in England and Wales under the
Companies Act 2006. The Company's principal activities are the provision of
professional services 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 Company'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 Company. The Company
has unpredictable revenue due to the nature of corporate finance advisory and
the reliance upon deal-driven transactions, however as at the year end the
company had £248k of cash reserves (2023: £283k) which as at that date
equated to approximately 7 months of cash overheads. Whilst the company
generated operating losses of £296k in the financial year (2023: £372k) the
directors remain confident that the project pipeline will generate sufficient
income on top of the cash reserves in order to meet the company’s
liabilities as they fall due over the next twelve months.
Furthermore, there is the ability to fund working capital by equity issues,
sales of equity investments and/or warrants and deferral of directors'
salaries.
b. Basis of accounting
These financial statements have been prepared in accordance with UK Adopted
International Reporting Standards ('IFRS'). 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, as described
below.
The Directors have chosen not to prepare consolidated accounts because the two
subsidiaries, Marechale Ltd and Marechale Capital Investments Ltd, are both
dormant, have never traded, and therefore highly immaterial to the financial
statements.
Subsidiaries are entities over which the Group has control, being the power to
govern the financial and operating policies of the acquired entity so as to
obtain benefits from its activities.
3. Business and geographical segments
The Directors consider that there is only one activity undertaken by the
Company, that of corporate finance professional services advisory. All of this
activity was undertaken in the United Kingdom.
2024 2023
(£) (£)
Broking commissions and fees earned from corporate finance 668,816 375,726
4. Other gains/ (losses)
2024 2023
(£) (£)
Realised (losses) on equity investments (5,402) (18,075)
Unrealised gains/(losses) on equity investments 250,000 (17,536)
Unrealised (losses) on equity warrants (21,594) (16,513)
223,004 (52,124)
5. Earnings per share
Earnings Earnings
(£) (£)
Based on Profit for the year. (182,987) (425,516)
No. shares No. shares
Weighted average number of Ordinary Shares in issue 104,194,580 95,419,581
for the purpose of basic earnings per share
Weighted average number of Ordinary Shares in issue 119,210,656 103,610,657
for the purpose of diluted earnings per share (see the notes of the accounts and immediately below)
The loss attributable to equity shareholders and weighted average number of
ordinary shares for the purposes of calculating diluted earnings per ordinary
share are identical to those used for basic earnings per ordinary share. This
is because the exercise of share options would have the effect of reducing the
loss per ordinary share and is therefore anti-dilutive.
6. Other matters and Market Abuse Regulation (MAR) Disclosure
The financial information for the year ended 30 April 2024 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:
7. Post balance sheet events
There are no past balance sheet events to report
8. Most recent Board Appointment – announced 6 August 2024
On 6 August 2024 the Company appointed Chris Kenning as Non-executive Director
of Marechale.
Cautionary statement
Certain statements made in this announcement are forward-looking statements.
Such statements are based on current expectations and assumptions and are
subject to a number of risks and uncertainties that could cause actual
events or results to differ materially from any expected future events or
results expressed or implied in these forward-looking statements. Persons
receiving this announcement should not place undue reliance on forward-looking
statements. Unless otherwise required by applicable law, regulation or
accounting standard, the Company does not undertake to update or revise any
forward-looking statements, whether as a result of new information, future
developments or otherwise.
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