Fletcher King plc
Trading Update
Fletcher King plc (the "Company") provides the following business and trading update.
The Company highlighted in its announcement of 14 April 2020 that, whilst performance for the year to 30 April 2020 was not materially affected by the COVID-19 virus outbreak and was in line with management expectations, the huge uncertainty and market dislocation caused by the current situation was likely to have a material adverse impact on transaction-based fees such as investment deals, bank valuations and agreement of rating appeals.
Trading during Q1 has confirmed this outlook and transaction-based fees have been materially lower than would otherwise be expected. In particular, investor clients and counterparties have adopted a wait-and-see approach resulting in delayed progress of potential transactions.
Non transaction-based fee income associated with fund and property management has been relatively unaffected. On behalf of retained clients, who pay contracted quarterly fees, the property management team has been successful in collecting 80% of rents for the June quarter within 7 days of the due date, a good result in the circumstances.
The Company has also been impacted by a severe contraction in the Professional Indemnity insurance market, particularly with regard to property valuation work. The renewal premium has more than doubled, increasing by just over £200,000 for the financial year.
Whilst there is potential for recovery of fee income later in the financial year, it is very likely that the Company will make a loss in the first half of its financial year.
The Company remains well supported by a strong balance sheet with no debt.
The Company's audited results for the year ended 30 April 2020 are expected to be announced on or around 11 September.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Enquiries
Fletcher King plc
David Fletcher / Peter Bailey
Tel: 0207 493 8400
Cairn Financial Advisers LLP
James Caithie / Tony Rawlinson
Tel: 020 7213 0880
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