TIDMFLK
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: GBP1,338,000 (2021: GBP1,426,000)
Earnings before tax: GBP32,000 (2021: GBP11,000)
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 GBP1,338,000 (2021: GBP1,426,000)
with a profit before tax of GBP32,000 (2021: GBP11,000).
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 6 months
ended ended Year ended
31 October 31 October 30 April
2022 2021
(Unaudited) (Unaudited) 2022 (Audited)
GBP000 GBP000 GBP000
------------------------------------- -------------- -------------- ---------------
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)
-------------- -------------- ---------------
Profit before taxation 32 11 134
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)
GBP000 GBP000 GBP000
-------------------------------- -------------- -------------- -----------
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
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- ------------- ------------- ------------ -------- --------- -------
Balance at 1
May 2022 1,025 522 (101) 10 2,571 4,027
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 (101) - 2,419 3,379
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 (101) - 2,419 3,379
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) 10 2,571 4,027
============================ ============= ============= ============ ======== ========= =======
Fletcher King Plc
Consolidated Interim Statement of Cash Flows
for the 6 months ended 31 October 2022
6 months 6 months
ended ended Year ended
31 October 31 October 30 April
2022
2022 (Unaudited) 2021 (Unaudited) (Audited)
GBP000 GBP000 GBP000
------------------------------------ ------------------ ------------------ -----------
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 6 months Year ended
to 31 October to 31 October 30 April
2022 2021 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
=============== =============== ============
GBP000 GBP000 GBP000
--------------- --------------- ------------
Earnings for basic and diluted earnings
per share: 24 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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