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:                                                    £1,338,000                          (2021: £1,426,000)

                 

                  Earnings before tax:  £32,000                            (2021: £11,000)

 

                  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 £1,338,000 (2021: £1,426,000) with a profit before tax of £32,000 (2021: £11,000).

 

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 ended


6 months ended


Year ended


31 October


31 October


30 April


2022

(Unaudited)


2021

(Unaudited)


2022 (Audited)


£000


£000


£000


 


 



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

(Unaudited)

 

2021

(Unaudited)


2022

(Audited)


 

£000

 

£000


£000




 




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



£000


£000


£000

 

£000

 

£000


£000














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 ended

 

6 months ended


Year ended

 



31 October

 

31 October


30 April

 



2022 (Unaudited)

 

2021 (Unaudited)


2022

(Audited)

 



£000

 

£000


£000

 



 





 

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 to 31 October 2022

Number

6 months to 31 October 2021

Number

Year ended 30 April 2022

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

 

 

 

 

£000

 

 

 

£000

 

 

£000

 

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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