29 May 2018 07:00
Energiser Investments Plc - Final ResultsEnergiser Investments Plc - Final Results
PR Newswire
London, May 28
29 May 2018
ENERGISER INVESTMENTS PLC
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2017
CHAIRMAN’S STATEMENT
Introduction
I am delighted to report on the Group’s performance for the year ended 31 December 2017.
During the year we sold the investment properties at Wellingborough for a consideration of £2,800,000, the majority of the priority return from the Kingswood 12 unit development loan was also received in the year for a total of £773,000.
Results
The gross rental income from the Wellingborough investment portfolio of 20 residential properties prior to the sale was £138,000 (2016: £160,000). The net rental income, after relevant operating costs, was £104,000 (2016: £118,000). Administrative costs were £235,000 (2016: £110,000) due to increasing investment activity in the year. Finance costs fell to £54,000 (2016: £208,000) due to lower interest payments following the repayment of the funding for the development at Kingswood, Surrey. The profit before taxation was £604,000 (2016: loss £211,000) mainly due to the £773,000 priority return received from the mezzanine funding project with earnings per share of 0.46p (2016: loss 0.40p).
Net assets have increased slightly to £1,774,000 (2016: £1,748,000) following disposals and repayment of debt. This results in a net asset value per share at the year end of 1.43p (2016: 1.41p). Net asset value per share is calculated by dividing the net assets of the Group by the number of ordinary shares in existence at the balance sheet date.
Operations
The 20 properties in Wellingborough were sold during the year as outlined was being considered in last year’s announcement.
Our investment in the development funding of 12 residential properties in Kingswood, Surrey was repaid in the prior year. As at the year end the remaining monies owed via the priority were repaid albeit at slightly less than the full amount.
The Group has continued to fully provide against its investment in EiRx Therapeutics plc, which was placed in creditors’ voluntary liquidation in 2015. The key investment activity came after the year end, in February and April 2018. This involved investment in a £491,100 short term loan secured on property in Croydon paying 7.5% p.a., and an investment of £1,704,997 for a 24.7% shareholding in KCR Residential REIT Plc, an AIM quoted Real Estate Investment Trust focused on owning rented blocks of one and two bed reanted apartments in the residential property sector. This activity is not reflected in the 2017 year end accounts. It will be reported in full in the Interim statement for the period to 30 June 2018.
Outlook
The Group’s strategy is to invest in quoted and unquoted companies to achieve capital growth. Our focus is predominantly on investment opportunities within the real estate sector. In 2018 we will continue to actively manage our investments and uncover and transact in further accretive investment opportunities.
Stephen Wicks
Group strategic report
for the year ended 31 December 2017
The Directors present their Strategic Report on the Group for the year ended 31 December 2017.
Review of the business
The Company is registered as a Public Limited Company (plc). The Company’s shares of 0.1p each are listed on AIM, part of the London Stock Exchange.
The Group invests in quoted and unquoted companies to achieve capital growth. The Group also held investment properties during the year whereby the properties are held with rental income arising from short-term lets. It also provides mezzanine finance to housebuilders.
Results and performance
The results of the Group for the year, show a profit on ordinary activities before and after taxation of £604,000 and £572,000 respectively (2016: loss £211,000). The shareholders’ funds for the Group total £1,774,000 (2016: £1,748,000).
The performance of the rental investment during 2017 was less than 2016 due to the sale of the properties part way through the year. During the year the Group received £773,000 out of the £785,000 priority return relating to the Kingswood development of 12 residential units in Surrey, being slightly less than the full amount originally expected due to less profit being made by the development.
Strategy
Energiser’s strategy as an Investing Company is to invest, directly or indirectly, in quoted and unquoted companies and in the property sector to achieve capital growth in the medium term.
Key performance indicators (‘KPIs’)
The Group’s KPIs are the return on project investment and the net assets position of the Group including net assets per share. These indicators are monitored by the Board and the details of performance against these are given below.
| 2017 | 2016 | |
| Return on project investment | £104,000 | £118,000 |
| Return on project funding | £773,000 | — |
| Net assets | £1,774,000 | £1,748,000 |
| Net assets per ordinary share | 1.43p | 1.41p |
Principal risks and uncertainties
The management of the business and the nature of the Group’s strategy are subject to a number of risks. The Directors have set out below the principal risks facing the business. Where possible, processes are in place to monitor and mitigate such risks. The Group operates a system of internal control and risk management in order to provide assurance that the Board is managing risk whilst achieving its business objectives. No system can fully eliminate risk and, therefore, the understanding of operational risk is central to the management process.
To enable shareholders to appreciate what the business considers are the main operational risks, they are briefly outlined below:
| Risk | Potential impact | Strategy | |
| Housing market | A fall in the housing market in the regions in which the Group operates | Inability to realise maximum value in a timely fashionAdverse effect on the timing of sales | The Group seeks to ensure that funding provided to housebuilders is for developments in areas that are likely to be least affected by a decline in the housing market |
| Interest rates | Significant upward changes in interest rates | Increased borrowing costs and a detrimental effect on profit | The Group mitigates any adverse exposure to interest rate changes by controlling its gearing |
Future developments
The Group will continue to focus on direct investment in the equity and debt capital of property assets. It will also look to increase its exposure to property by investing in property operating companies such as serviced-residential, serviced-storage or serviced-leisure that combine an interest in a property portfolio with an overriding operating business.
By order of the Board
Stephen WicksNon-executive Chairman
Group statement of comprehensive income
for the year ended 31 December 2017
| 2017£’000 | 2016£’000 | |
| Continuing operations | ||
| Revenue arising in the course of ordinary activities | 138 | 160 |
| Cost of sales | (34) | (42) |
| Gross profit | 104 | 118 |
| Administrative expenses | (235) | (110) |
| Operating (loss)/profit | (131) | 8 |
| Finance costs | (54) | (208) |
| Finance income | — | (11) |
| Gain on sale of investment properties | 16 | — |
| Gain on financial instrument | 773 | — |
| Profit/(loss) before taxation | 604 | (211) |
| Taxation | (32) | — |
| Profit/(loss) for the year attributable to shareholders of the Group | 572 | (211) |
| Other comprehensive income/(loss) | ||
| Items that may be subsequently reclassified to profit or loss | ||
| Change in value of available-for-sale financial assets | — | (5) |
| Related deferred taxation | — | 14 |
| Other comprehensive income for the year, net of tax | — | 9 |
| Total comprehensive profit/(loss) for the year attributable to shareholders of the Group | 572 | (202) |
| Profit per share | ||
| Basic and diluted profit/(loss) per share from total and continuing operations | 0.46p | (0.40)p |
Diluted profit/(loss) per share is taken as equal to the basic profit/(loss) per share as the Company’s average share price during the period is lower than the exercise price of the share options and therefore the effect of including share options is anti-dilutive.
Group statement of financial position
as at 31 December 2017
| 2017£’000 | 2016£’000 | |
| ASSETS | ||
| Non-current assets | ||
| Investment property | — | 2,844 |
| — | 2,844 | |
| Current assets | ||
| Trade and other receivables | 33 | 72 |
| Available-for-sale financial assets | — | 553 |
| Cash and cash equivalents | 1,959 | 1,120 |
| 1,992 | 1,745 | |
| Total assets | 1,992 | 4,589 |
| LIABILITIES | ||
| Current liabilities | ||
| Trade and other payables | 185 | 733 |
| Short-term borrowings | — | 694 |
| Tax and social security | 33 | 126 |
| 218 | 1,553 | |
| Non-current liabilities | ||
| Long-term borrowings | — | 1,288 |
| — | 1,288 | |
| Total liabilities | 218 | 2,841 |
| Net assets | 1,774 | 1,748 |
| EQUITY | ||
| Share capital | 2,392 | 2,392 |
| Share premium account | 7,189 | 7,198 |
| Convertible loan | 88 | 88 |
| Merger reserve | 1,012 | 1,012 |
| Revaluation reserve | — | 537 |
| Retained earnings | (8,907) | (9,479) |
| Total equity | 1,774 | 1,748 |
Group statement of changes in equity
for the year ended 31 December 2017
| Sharecapital£’000 | Sharepremium account £’000 | Convertible loan£’000 | Mergerreserve£’000 | Revaluation reserve£’000 | Retained earnings£’000 | Totalequity£’000 | |
| At 1 January 2016 | 2,312 | 5,747 | 88 | 1,012 | 528 | (9,268) | 419 |
| Total comprehensive loss | — | — | — | — | 9 | (211) | (202) |
| Issue of equity | 80 | 1,451 | — | — | — | — | 1,531 |
| Balance at 31 December 2016 | 2,392 | 7,198 | 88 | 1,012 | 537 | (9,479) | 1,748 |
| Total comprehensive profit | — | — | — | — | (537) | 572 | 35 |
| Issue of equity | — | (9) | — | — | — | — | (9) |
| Balance at 31 December 2017 | 2,392 | 7,189 | 88 | 1,012 | — | (8,907) | 1,774 |
Group statement of cash flows
for the year ended 31 December 2017
| 2017£’000 | 2016£’000 | |
| Cash flows from operating activities | ||
| Profit/(Loss) before taxation | 604 | (211) |
| Adjustments for: | ||
| Profit on sale of investment properties | (16) | — |
| Interest expense | 54 | 208 |
| Interest income | — | 11 |
| Decrease/(Increase) in trade and other receivables | 51 | (33) |
| (Decrease)/Increase in trade and other payables | (641) | (127) |
| Net cash generated by/(used in) operating activities | 52 | (152) |
| Cash flows from investing activities | ||
| Mezzanine finance facility repaid | 16 | 3,408 |
| Sale of investment properties | 2,816 | — |
| Net cash generated by investing activities | 2,832 | 3,408 |
| Cash flows from financing activities | ||
| Net proceeds on the issue of ordinary shares | (9) | 1,530 |
| Repayment of borrowings | (1,982) | (3,670) |
| Interest paid | (54) | (214) |
| Net cash used in financing activities | (2,045) | (2,354) |
| Net increase in cash and cash equivalents | 839 | 902 |
| Cash and cash equivalents at beginning of financial year | 1,120 | 218 |
| Cash and cash equivalents at end of financial year | 1,959 | 1,120 |
Note:
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2017 or 2016 but is derived from those accounts. Statutory accounts for 2016 have been delivered to the registrar of companies, and those for 2017 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2017 or 2016.
The AGM will be held at Decimal Place, Chiltern Avenue, Amersham, Buckinghamshire, HP6 5FG at 11.00 am on 29 June 2018.
The Company’s Annual Report and Accounts along with the Notice of Annual General Meeting will be posted to shareholders shortly and will be available to view and download on the Company’s website at http://www.energiserinvestments.co.uk/.
For further information contact:
| Energiser Investments plc | +44 (0) 1494 762450 |
| Dominic White | |
| Nishith Malde | |
| Cairn Financial Advisers LLP | +44 (0)20 7213 0880 |
| Jo Turner | |
| Sandy Jamieson |