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LONDON (Alliance News) - Fletcher King PLC on Tuesday said its pretax profit almost tripled in its recently ended financial year, when compared with the previous year, though it noted the since that year-end in April the market has destabilised and clients are delaying decisions as a result of the UK's vote to leave the European Union.
The property fund management company said its pretax profit for the year ended April 30 rose to GBP1.4 million from GBP461,000 a year earlier, on the back of an increase in revenue to GBP4.6 million from GBP3.4 million. The pretax profit increase was also driven by a GBP593,000 profit made on the sale of its 145 Leadenhall Street property in London, which prompted it to pay an 8.00 pence special dividend to shareholders.
Fletcher King additionally proposed a final dividend of 1.00p per share, up from the 0.75p per share offered a year earlier, taking its ordinary dividend for the full year to 10.00p per share, from 2.25p per share a year earlier.
Fletcher King said its underlying business continued to perform well during the year, with all departments performing much in line with a year earlier. The commercial market has seen "reasonably strong demand from both tenants and investors," Fletcher King said. However, this demand has "diminished somewhat in the lead up to the EU referendum", which was particularly noticeable in the investment market, the company added.
"The stamp duty increase of 1.0% didn't help, and data from the Investment Property Databank showed capital values in the first quarter of 2016 falling for the first time for some years, albeit by only 0.2%. UK investors have been net sellers in the fourth quarter of 2015 and first quarter 2016 and the outlook post Brexit is currently uncertain," Fletcher King added.
Whilst the company said it started the year well, having completed more than GBP50.0 million of office and industrial investments, Fletcher King said the "unexpected vote to leave the EU has had a destabilising effect on the market and the uncertainties are likely to influence it for some time to come".
"Clients are delaying decisions to sell and purchase investment property and this is not helpful for our transaction business," Fletcher King added, noting that it was "impossible" to predict the effect of this on the business, though said it was weathered challenging times in the past.
Shares in Fletcher King were up 3.4% at 46.00p on Tuesday morning.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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