Fletcher King Regulatory News (FLK)

FLETCHER KING PLC

Interim Results for the 6 months ended 31 October 2019

Financial Highlights

Turnover : £1,331,000 (2018: £1,465,000)

PBT : £108,000 (2018: £132,000)

Basic EPS : 0.90p per share (2018: 1.13p per share)

Dividend : 1.00p per share (2018: 1.00p per share)

Operational Highlights

·; Performance was lower than the comparative period last year and continued to reflect the subdued property market associated with uncertainties over Brexit and the UK political situation.

·; Steady and predictable revenue from asset management clients provides ongoing support for the business along with a regular supply of valuation instructions from lending banks.

·; A reasonable volume of sales instructions were completed in the period but revenue from rating appeals remained lower than normal due to the slow processing of appeals by the Valuation Office Agency.

Commenting on the results David Fletcher, Chairman of Fletcher King said:

"We had a reasonable first half and I am pleased that we are able to report a profit, albeit at a lower level than previous years, and to maintain our interim dividend at the same level as last year. My year-end statement warned of the potential difficulty in maintaining profitability in a volatile market and that situation continues."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

ENQUIRIES:

Fletcher King Plc

David Fletcher

Tel: 020 7493 8400

Cairn Financial Advisers LLP (Nomad)

James Caithie / Tony Rawlinson

Tel: 020 7213 0880

The interim results are available on the Company's website: www.fletcherking.co.uk

CHAIRMAN'S STATEMENT

Results

Turnover for the period was £1,331,000 (2018: £1,465,000) with a profit before tax of £108,000 (2018: £132,000).

Your Directors have declared an interim dividend of 1.0p per share (2018: 1.0p per share) to be paid on 14 February 2020 to shareholders on the register at the close of business on 17 January 2020.

The Commercial Property Market

The first half of the year was dominated by the uncertainties over Brexit and the UK political situation with sales and lettings severely impacted as both tenants and buyers understandably held back on decision making. During the period, investment into commercial property was at a five year low and continued to decline. The situation was graphically illustrated by M&G suspending redemptions in their £2.5 billion property fund due to an inability to sell enough property to satisfy investor withdrawals. 

The one bright spot in the market was the City office market where demand for large spaces outstrips supply and rents have been rising.

Business Overview

In my year end statement I warned of the potential difficulty in maintaining profitability in such a volatile market. I am therefore very pleased that we are able to report a profit in the first half of the year albeit at a lower level than previous years and to maintain our interim dividend at the same level as last year.

Business has generally been slow although property management continues steadily with some further small mandates won.

As might be expected our investment business suffered during the period. A number of good sales were successfully concluded but there were no purchases.

Valuation instructions held up well although slightly below the level in the same period last year. Rating continued to be challenging but the outlook for the second half is more optimistic.

Outlook

The Government's success in achieving a substantial overall majority in the General Election has, at long last, removed the major uncertainty of Brexit, although there remain difficult negotiations ahead on the terms of our future relationship with Europe.

Although uncertainties over the exact terms of our withdrawal from Europe will potentially impact decisions in the commercial property market, we expect both tenants and investors to be more positive in their decision making.

Asset management is likely to continue to provide a steady income flow and we are hopeful of securing further new instructions in the coming months.

We have some investment sales instructions that should come to fruition before the year end and we will look to acquire properties for our inhouse clients.

Assuming the banks continue to lend on property, we expect a reasonable flow of valuation instructions.

Rating income will continue to be influenced by the willingness of the Valuation Office to engage in Rating Appeals. We have a number of significant appeals in the pipeline and we would hope to get a percentage of those agreed during the second half of the year.

Although the political climate is now clearer, it remains hard to predict the final outcome for the rest of the year and our previously stated views on the difficulty in maintaining profitability remain.

DAVID FLETCHER

CHAIRMAN

20 December 2019

Fletcher King Plc

Consolidated Interim Statement of Comprehensive Income

 for the 6 months ended 31 October 2019

Fletcher King Plc

Consolidated Interim Statement of Financial Position

as at 31 October 2019

Fletcher King Plc

Consolidated Interim Statement of Changes in Equity

for the 6 months ended 31 October 2019

Fletcher King Plc

Consolidated Interim Statement of Cash Flows

for the 6 months ended 31 October 2019

Fletcher King Plc

Explanatory Notes

1. General information

The Company is a public limited company incorporated and domiciled in England and Wales. The address of its registered office is 61 Conduit Street, London W1S 2GB.

These interim financial statements were approved by the Board of Directors on 19 December 2019.

2. Basis of preparation

The interim financial information in this report has been prepared using accounting policies consistent with IFRS as adopted by the European Union. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the International Financial Reporting Standards Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to apply for the year ended 30 April 2020.

Except as described below, the accounting policies applied by the Group in this interim report are the same as those applied by the Group in the consolidated financial statements for the year ended 30 April 2019.

Changes in significant accounting policies

The Group has initially adopted IFRS 16 Leases from 1 May 2019. Under the transition methods chosen, comparative information is not restated. The effect of adopting the standards in respect of prior years is recognised as an adjustment to opening equity as at 1 May 2019.

The changes to the accounting policies for leases and the effect of initially applying the new standards are mainly attributed to the following:

- Recognition of right use of assets and lease liabilities for former operating leases

- Recognition of depreciation of the right use asset and an interest charge in place of operating lease charge in the income statement

The changes in accounting policies are also expected to be reflected in the Group's consolidated financial statements as at and for the year ending 30 April 2020.

A number of other new and amended standards and interpretations are effective from 1 May 2019 but they do not have a material effect on the Group's financial statements.

3. Non Statutory Accounts

The financial information for the period ended 31 October 2019 set out in this interim report does not constitute the Group's statutory accounts for that period. Whilst the financial figures included in this interim report have been computed in accordance with IFRS, this interim report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS34. The statutory accounts for the year ended 30 April 2019 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

The financial information for the 6 months ended 31 October 2019 and 31 October 2018 is unaudited.

Fletcher King Plc

Explanatory Notes

4. Earnings per share