ENGI.L Regulatory News (ENGI)

Energiser Investments Plc - Half-year Report

PR Newswire

London, September 26

 27 September 2018

Energiser Investments plc 

('Energiser' or the 'Company')

Posting of Interim Results to 30 June 2018

Energiser announces that it has posted its Interim accounts for the six months to 30 June 2018

Chairman’s statement

I am pleased to present the interim results for Energiser Investments plc (“Energiser” or “the Group”) for the half year ended 30 June 2018. 

Energiser Investments plc is an Investing Company whose strategy is to invest in quoted and unquoted companies to achieve capital growth. The Group has seen a significant amount of change over the last few years and has one key investment at 30 June 2018. The focus continues to be in property particularly in the residential sector.

In February 2018, Energiser invested £494,100 in a short-term loan secured on a 21,900 sq. ft office property in Croydon with planning permission to convert into 71 residential units. The loan represented 30% of the estimated value of the property and the interest was covered by rental income at a ratio of 4:1 (rent: interest). The gross interest paid on the loan was 7.5% p.a. The loan was novated as part of our investment in KCR Residential REIT plc (“KCR”) as set out below.

In March 2018, Energiser acquired 2,435,710 new KCR ordinary shares at £0.70 a share for a total of £1,704,997. The investment, made by participation in a subscription alongside other investors, was made at a 9% discount to net asset value per share of KCR as reported in its half-yearly report announced on 16 March 2018. This investment represented a 24.7% shareholding in KCR. The subscription was funded with cash of £1,210,897 and the novation of the rights to its short term loan investment of £494,100 described above.

KCR is an AIM quoted Real Estate Investment Trust (“REIT”) focused on investment in the UK residential Private Rented Sector (“PRS”). KCR invests in whole apartment blocks of studio, one and two-bedroom flats, in city centres, close to railway stations and shopping facilities. It focuses on more affordable rental properties for private tenants. 

With KCR, Energiser has established a strategic shareholding in a growth company with a strong management team in a very large, under-managed sector. KCR issued 4,434,570 new ordinary shares at 70p per share in 30 July 2018 and as a result our holding has been diluted to 17.0%.

Our holding in KCR was valued at £0.88p per share on 30 June 2018 resulting in a fair value adjustment of £438,000 and a related deferred tax charge of £82,000.

The Company has received a few approaches for investment in other sectors including a digital property lending opportunity in partnership with a respected technology developer interested in combining their market leading technology with Energiser’s property expertise. The Board did not conclude an investment in this opportunity and will continue to look for other investments.

Results

The Group had no revenues during the period (2017: £82,000) as it had sold its revenue generating investments. It made a loss of £58,000 (2017: £81,000) and had other comprehensive income of £438,000 relating to the revaluation gain on the investment in KCR. Administrative expenses decreased from £109,000 to £63,000. Finance costs reduced to Nil (2017: £38,000) as the loan relating to the Wellingborough portfolio had been repaid in full in the year to 31 December 2017.

The Group’s net assets increased to £2.07m (2017: £1.80m) translating into net asset value per share of 1.67p per share (2017: 1.46p).

Outlook

We will continue to manage our investment in KCR and will also look for other investment opportunities to achieve capital growth. 

Stephen Wicks

Chairman

27 September 2018

Group statement of comprehensive income

Diluted earnings per share is taken as equal to basic earnings per share as the Group’s average share price during the period is lower than the exercise price and therefore the effect of including share options is anti-dilutive.

Group statement of financial position

Group statement of changes in equity

Group statement of cash flows

1. Nature of operations and general information

The principal activity of the Group is as an investing company investing in quoted and unquoted companies to achieve capital growth.

Energiser Investments plc is the Group’s ultimate parent company. It is incorporated and domiciled in Great Britain. The address of Energiser Investments plc’s registered office, which is also its principal place of business, is Decimal Place, Chiltern Avenue, Amersham, Buckinghamshire, HP6 5FG.

Energiser Investments plc’s shares are quoted on AIM, a market operated by the London Stock Exchange. The consolidated half-yearly financial report has been approved for issue by the Board of Directors on 27 September 2018.

The financial information set out in this half-yearly financial report does not constitute statutory accounts as defined in Sections 434(3) and 435(3) of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2017 have been filed with the Registrar of Companies and are available at www.energiserinvestments.co.uk. The auditor’s report on those financial statements was unqualified and did not contain any statement under Section 498(2) or Section 498(3) of the Companies Act 2006.

2. Basis of preparation

This consolidated half-yearly financial report has been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting.

The consolidated half-yearly financial report should be read in conjunction with the annual financial statements for the year ended 31 December 2017, which have been prepared in accordance with IFRS as adopted by the European Union.

3. Accounting policies

The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2017.

4. (Loss)/earnings per ordinary share

The (loss)/earnings per ordinary share is based on the weighted average number of ordinary shares in issue during the period of 123,912,957 ordinary shares of 0.1p (2017: 123,912,957 ordinary shares of 0.1p) and the following figures:

Diluted earnings per share is taken as equal to basic earnings per share as the Group’s average share price during the period is lower than the exercise price and therefore the effect of including share options is anti-dilutive.

5. Income and segmental analysis

The activity of both the investments and rentals arose wholly in the United Kingdom. No single customer accounts for more than 10% of revenue.

6. Investments

During the period to 30 June 2018 the group acquired 2,435,710 shares in KCR Residential Reit PLC, an AIM listed real estate investment trust who specialise in the acquisition and management of rented residential portfolios in the UK.

Investments

£’000

7. Investment property