23 May 2016 15:56
ENERGISER INVESTMENTS PLC - Final ResultsENERGISER INVESTMENTS PLC - Final Results
PR Newswire
London, May 23
23 May 2016
ENERGISER INVESTMENTS PLC
(“Energiser” or the “Company”)
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015
CHAIRMAN’S STATEMENT
Introduction
I am delighted to report on the Group’s performance for the year ended 31 December 2015.
As part of our strategy to focus on the property sector, I would like to welcome Dominic White to the Board as a Non-executive Director. Dominic has an extensive background in the real estate sector with previous experience at Cordea Savills as head of Portfolio Management where he grew the Italian business from a start-up to more than €3bn, prior to which he was with Henderson Global Investors.
Results
The gross rental income from the Wellingborough portfolio of 20 residential properties was £154,000 (2014: £148,000), an increase of 4% over the previous year. The net rental income, after relevant operating costs, was £121,000 (2014: £112,000). Administrative expenses remained the same at £50,000 (2014: £50,000). Finance costs have risen to £358,000 (2014: £322,000) due to the interest accrued on additional funding for the development at Highfield Chase in Kingswood Park, Surrey. The loss before and after taxation was £167,000 (2014: £147,000) with a loss per share of 0.38p (2014: 0.34p).
Net assets have reduced to £419,000 (2014: £598,000) primarily due to the effect of construction and sales delays on the fair value of our investment in the project at Highfield Chase. This results in a net asset value per share of 0.96p (2014: 1.37p). 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.
The Directors do not recommend the payment of a dividend.
Operations
All 20 properties in Wellingborough, Northamptonshire are currently let and will continue to be let on short-term tenancies.
Our investment in the development of 12 residential properties in Kingswood Park, Surrey by a housebuilder is behind programme. Construction has now been completed and nine of the properties have been sold and legally completed. A further two properties have been reserved and we are expecting all the units to be sold and legally completed in the near future. The senior debt provided by Coutts & Co has been repaid in full. Our investment in the project was by way of mezzanine funding to the housebuilder. The Group is expecting to receive its priority return of £785,000, against which it will incur the agreed coupon of 10% per annum to investors that provided the funding to Energiser.
The Group has continued to fully provide against its investment in EiRx Therapeutics plc, which was placed in creditors’ voluntary liquidation.
Outlook
The Group’s strategy is to focus on and engage in opportunities within the real estate sector, and with the new appointment to the Board it expects to build shareholders’ funds over the next few years.
Stephen Wicks
Group strategic report for the year ended 31 December 2015
The Directors present their Strategic Report on the Group for the year ended 31 December 2015.
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 holds investment properties 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 loss on ordinary activities before and after taxation of £167,000 (2014: £147,000). The shareholders’ funds for the Group total £419,000 (2014: £598,000).
The performance of the rental investment during 2015 was similar to that of 2014, with almost 100% occupancy on the rental properties. The Group has provided £3.3m (2014: £2.7m) towards the development of 12 units in Surrey and it is entitled to receive 50% of the net profit of the development, including a priority return of £785,000, subject to the development making sufficient profit. The majority of the funding has been procured from investors at a cost of 10% per annum.
Business environment
The property market in the United Kingdom has continued to recover over the past year, albeit at a slower rate than previously. This continued recovery has contributed to the increase in the value of the Wellingborough property portfolio.
Strategy
Due to the continued recovery of the housing market and the anticipated success of the 12 unit development in Surrey, the Group will continue to seek out opportunities on real estate projects where healthy returns can be generated for shareholders.
The Group continues to let the Wellingborough properties on short-term tenancies.
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.
| 2015 | 2014 | |
| Return on project investment | £121,000 | £112,000 |
| Net assets | £419,000 | £598,000 |
| Net assets per ordinary share | 0.96p | 1.37p |
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 fashion·Adverse 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 |
| Rental market | A decrease in demand for rental properties | Detrimental effect on the Group’s ability to cover administration and debt servicing costs | The Group seeks to ensure that tenants are satisfied with their property to encourage tenancy renewals and employs a reputable manager to deal with any issues and to let the properties |
| 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 |
Financial risk management objectives and policies
The Company’s policy in respect of financial instruments and risk profile is set out in the Directors’ Report and in Note 18 of the Group accounts.
Future developments
In the coming year we expect to realise the profit share related to the mezzanine funding provided to a housebuilder for the 12 unit development in Kingswood Park, Surrey. The Group also intends to participate in other real estate projects and is actively looking for opportunities.
The Group will continue to rent out the Wellingborough properties on short-term tenancies.
By order of the Board
Nishith MaldeCompany Secretary
Group statement of comprehensive income
for the year ended 31 December 2015
| 2015£’000 | 2014£’000 | |||
| Continuing operations | ||||
| Revenue arising in the course of ordinary activities | 154 | 148 | ||
| Cost of sales | (34) | (8) | ||
| Gross profit | 120 | 140 | ||
| Administrative expenses | (50) | (50) | ||
| Revaluation of investment properties | 102 | 76 | ||
| Operating profit | 172 | 166 | ||
| Finance costs | (358) | (322) | ||
| Finance income | 19 | 9 | ||
| Loss before taxation | (167) | (147) | ||
| Taxation | — | — | ||
| Loss for the year attributable to shareholders of the Group | (167) | (147) | ||
| Other comprehensive (loss)/income | ||||
| Items that may be subsequently reclassified to profit or loss | ||||
| Change in value of available-for-sale financial assets | (16) | 684 | ||
| Related deferred taxation | 4 | (144) | ||
| Other comprehensive (loss)/income for the year, net of tax | (12) | 540 | ||
| Total comprehensive (loss)/income for the year attributable to shareholders of the Group | (179) | 393 | ||
| Loss per share | ||||
| Basic and diluted loss per share from total and continuing operations | (0.38)p | (0.34)p |
Diluted loss per share is taken as equal to the basic 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 2015
| 2015£’000 | 2014£’000 | ||
| ASSETS | |||
| Non-current assets | |||
| Investment property | 2,844 | 2,742 | |
| Financial assets held at fair value through profit or loss | — | 1 | |
| 2,844 | 2,743 | ||
| Current assets | |||
| Trade and other receivables | 38 | 9 | |
| Available-for-sale financial assets | 3,977 | 3,343 | |
| Cash and cash equivalents | 218 | 13 | |
| 4,233 | 3,365 | ||
| Total assets | 7,077 | 6,108 | |
| LIABILITIES | |||
| Current liabilities | |||
| Trade and other payables | 866 | 564 | |
| Short-term borrowings | 4,318 | 4,794 | |
| Deferred tax | 140 | 144 | |
| 5,324 | 5,502 | ||
| Non-current liabilities | |||
| Long-term borrowings | 1,334 | — | |
| Financial liabilities held at fair value through profit or loss | — | 8 | |
| 1,334 | 8 | ||
| Total liabilities | 6,658 | 5,510 | |
| Net assets | 419 | 598 | |
| EQUITY | |||
| Share capital | 2,312 | 2,312 | |
| Share premium account | 5,747 | 5,747 | |
| Convertible loan | 88 | 88 | |
| Merger reserve | 1,012 | 1,012 | |
| Revaluation reserve | 528 | 540 | |
| Retained earnings | (9,268) | (9,101) | |
| Total equity | 419 | 598 |
Group statement of changes in equity
for the year ended 31 December 2015
| Sharecapital£’000 | Sharepremium account £’000 | Convertible loan£’000 | Mergerreserve£’000 | Revaluation reserve£’000 | Retained earnings£’000 | Totalequity£’000 | |
| At 1 January 2014 | 2,312 | 5,747 | 88 | 1,012 | — | (8,954) | 205 |
| Total comprehensive loss | — | — | — | — | 540 | (147) | 393 |
| Balance at 31 December 2014 | 2,312 | 5,747 | 88 | 1,012 | 540 | (9,101) | 598 |
| Total comprehensive loss | — | — | — | — | (12) | (167) | (179) |
| Balance at 31 December 2015 | 2,312 | 5,747 | 88 | 1,012 | 528 | (9,268) | 419 |
Group statement of cash flows
for the year ended 31 December 2015
| 2015£’000 | 2014£’000 | |
| Cash flows from operating activities | ||
| Loss before and after taxation | (167) | (147) |
| Adjustments for: | ||
| Fair value adjustment on financial liabilities recognised in profit or loss | (8) | (9) |
| Fair value adjustment on investment property | (102) | (76) |
| Interest expense | 358 | 322 |
| Interest income | (11) | — |
| (Increase)/decrease in trade and other receivables | (13) | 6 |
| Increase/(decrease) in trade payables | 35 | (60) |
| Net cash generated from operating activities | 92 | 36 |
| Cash flows from investing activities | ||
| Mezzanine finance facility issued | (650) | (1,259) |
| Net cash used in investing activities | (650) | (1,259) |
| Cash flows from financing activities | ||
| Proceeds from borrowings | 2,064 | 1,323 |
| Repayment of borrowings | (1,206) | (40) |
| Interest paid | (95) | (57) |
| Net cash generated from financing activities | 763 | 1,226 |
| Net increase in cash and cash equivalents | 205 | 3 |
| Cash and cash equivalents at beginning of financial year | 13 | 10 |
| Cash and cash equivalents at end of financial year | 218 | 13 |
Note:
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2015 or 2014 but is derived from those accounts. Statutory accounts for 2014 have been delivered to the registrar of companies, and those for 2015 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 2014 or 2015.
The AGM will be held at Decimal Place, Chiltern Avenue, Amersham, Buckinghamshire, HP6 5FG at 11.00 am on 30 June 2016.
The Company’s Annual Report and Accounts 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
Nishith Malde +44 (0) 1494 762450
Cairn Financial Advisers LLP
Jo Turner/Sandy Jamieson +44 (0) 20 7148 7900