Results.. All for £790k MCAP15 Apr 2016 23:46
fallen too far, cheap as chips.
We are pleased to report that Marechale completed the year strongly and, on the back of improving economic sentiment and more confidence in the equity markets, the Company's Gross Profit - revenue less commissions paid to 3rd parties - has increased by 39% from £517,600 to £719,000. Furthermore, as a result of our strategy of making investments in our client companies, we recorded 'Other Gains' (net) of £93,400 (2014: £152,400), resulting in a Profit before tax of £150,000 (2014: £79,400).
One part of our long-term strategic plan is to put the Company in a position to pay dividends and the Directors have decided to seek shareholder approval for a capital reorganisation that will be necessary before dividends can be paid. Shareholder approval will be sought at the 2015 AGM which is scheduled for the 17th September. Subject to receiving Court approval, it is planned subsequently to pay a dividend. A further announcement in this respect will be made in due course.
Another part of the long-term strategic plan is to motivate the Directors and staff by awarding them options which vest one third each year, over a three-year period, all tied to an uplift in the share price. At last year's AGM approval was obtained to award up to 10% of the issued share capital, of which 8%, were granted. It is the Board's intention to seek shareholder approval at this year's AGM for options to be granted on a further 10% of the issued share capital.
Marechale's core work is corporate finance advisory and capital fund raising for growth companies in two primary sectors in which the team have a long term track record; Leisure and Retail, and Renewable Energy.
Marechale helps management teams to finance or refinance in two key areas of activity; Growth Capital private equity transactions for more established businesses, and Development Capital, fundraising for smaller growth companies, the latter typically being Enterprise Investment Scheme (EIS) qualifying. As part of its success fee, the Company secures warrants or equity on most of its projects, so Marechale's shareholders have the opportunity to share in the potentially significant upside of the equity value in these businesses.
Equity investments and warrants are valued at 'fair value', typically at a price that reflects their last funding round, and the underlying unrealised movement in fair value is reflected (respectively) through the Revaluation Reserve and the Profit and Loss Account in accordance with IFRS9. Equity investments have increased by 40% to £151,700 and Warrants have increased by 66% to £128,250.
As a result of the above, and the Profit before tax, our Net assets have increased by 30% to £850,000.
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