Fletcher King Regulatory News (FLK)

23 Jan 2007 07:01

Fletcher King PLC23 January 2007 PRESS RELEASE Not for release before 0700, 23 January 2007 FLETCHER KING PLC INTERIM RESULTS Fletcher King announces strong performance for the half year and anticipates full year results significantly in excess of last year. Fletcher King, the London based property fund managers, asset managers andchartered surveyors, announces today its interim results for the 6 months to 31October 2006. Financial highlights: • Profit before tax up 45% to £308,000 (2005: £213,000) • Turnover up 11% at £3.45m (2004: £3.10m) • Increased in interim dividend of 59% to 1.0p (2004: 0.63p) which will be paid on 16 February 2006 Operational highlights: • The Investment and Fund Management department has shown a substantial increase in turnover and profit compared to the same period last year and maintains a strong pipeline of work for the second half of the year. • A new FSA-regulated subsidiary, Fletcher King Investment Management Plc, has been set up to advise on, promote and run collective investment vehicles and to advise clients on indirect property investments. • The Stratton House Investment Property Syndicates ("SHIPS") continue to perform exceptionally well. The majority of the SHIPS 01 portfolio has been sold returning over 30% per annum on equity for investors. The second fund is now fully invested, returning in excess of 20% per annum on equity and capital is currently being raised for the third fund. • The Valuation and Rating department has again increased its turnover in both Bank Valuations and Rating Appeals - these are currently running at 20% above the same period last year. Commenting David Fletcher, Chairman of Fletcher King said: "I am delighted to announce another strong 6 months of trading. We haveincreased profit, turnover and dividend on the same period last year and alldepartments remain on track to achieve full year targets. I look forward to the next six months with confidence and I am especiallyexcited about the opportunities within the Investment and Fund Managementdepartment with the further progress of the SHIPS products and the potential forFSA-regulated new business." For further information: David Fletcher, Fletcher King 020 7493 8400 Tim McCall, MJ2 020 7491 7776 FLETCHER KING PLC CHAIRMAN'S STATEMENT INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2006 The group enjoyed strong performance compared with the same period last year.Profit before tax was £308,000 (2005: £213,000) on a turnover of £3.4m (2005:£3.1m) with earnings per share of 2.2p (2005: 1.57p). Your Directors havedeclared an increased interim dividend of 1.0p (2005: 0.63p) to be paid on 16February 2007 to shareholders on the register at the close of business on 2February 2007. The Commercial Property Market The commercial property investment market has continued to perform stronglyduring the year and the letting markets remain relatively positive throughoutthe country. The Central London office markets of the West End, Mid Town, Cityand Docklands are experiencing reasonably strong tenant demand particularly inthe West End where significant rental growth is apparent. The industrial marketis active and rental growth is occurring in many areas of the country, althoughat lower levels than last year. Despite public statements of concern in theretail market the stronger high streets, shopping centres and out of town retailparks continue to attract tenants and rents are growing. The investment market is still very strong. In previous years I have disagreedwith many pundits who were calling the top of the market. Yield contraction hasbeen a major feature of performance in the investment market for the last fiveyears and has produced the best part of property's performance. Yieldcontraction in some sectors of the market, most notably secondary property, hasnow ceased and there are signs of yields in that sector drifting out. Primeyields are still strong and in my view could contract further, although probablyby only a further 25 basis points. Debt driven purchasers continue to face a challenging market as 5 year SWAPrates remain above 5% and prime yields contract. However, the ungearedinstitutions and some foreign buyers are bidding aggressively. The introductionof REITs in January 2007 will create greater liquidity in the market and attractfurther funds. There is no sign, at the moment, that the volume of moneyavailable for investment is slowing and each week new Funds come to the market.Our in-house fund SHIPS 04 is now fully invested and we are currently marketingSHIPS 06, which we expect will become our largest fund to date. DIVISIONAL TRADING Investment and Fund Management The strong investment market has resulted in the department showing asubstantial increase in turnover and profit compared to the same period lastyear. The pipeline of work for the second half of the year is strong, leading tofurther growth . Fletcher King Investment Management Plc is a new FSA-regulated subsidiary whichwe have set up in order to advise on, promote and run collective investmentvehicles. Our latest SHIPS fund is a collective investment scheme as is thefeeder unit trust set up as an entry for pension fund investors into thatvehicle. Via Fletcher King Investment Management we are in a position to advise clientson indirect property investment and anticipate making a significant investmentfor one client in a number of funds. Indirect investment will become anincreasingly important part of the property investment strategy of smallerpension funds and this is likely to be an expanding part of our business. Asset Management A significant number of value-added initiatives have been implemented on clientportfolios which have increased both their rental income and capital value. TheFacilities Management arm of the department is working well and is streamliningthe supply chain for the service charge buildings. Valuation and Rating The department increased its turnover in both Bank Valuations and Rating Appealswhich are currently running at 20% above the same period last year. Significantrate reductions have been achieved for a number of clients representing savingsof up to 30%. We anticipate the next 6 months will see a significant volume offurther appeals. The department has recently been appointed to carry outvaluations of commercial properties for both the Chelsea and the DerbyshireBuilding Societies. Rent Reviews The department is currently exceeding its budgets and has increased profits overthe same period last year. Its most high profile rent review in the first halfof the year was achieving a 36% increase in rent for our landlord client on aprime shop in New Bond Street. Fletcher King Howard Our Construction Services subsidiary continues to trade well with a widediversity of clients employing its expertise. In the beverage market it isworking for Carlsberg and Berry Bros & Rudd whilst in Healthcare it is involvedin four Complex Needs Units throughout the country and a Healthy Living Centrein Milton Keynes. For the Government it is currently involved in the construction andrefurbishment of 128 sites throughout the UK for the Vehicle and OperatorServices Agency (VOSA) and this contract will extend through to 2010. STRATTON HOUSE INVESTMENT PROPERTY SYNDICATE Our SHIPS syndicates are performing exceptionally well. The majority of theSHIPS 01 portfolio has been sold resulting in a return of over 30% per annum onequity for our investors. The second fund is now fully invested and is returningin excess of 20% per annum on equity. Capital is currently being raised for ourthird fund. OUTLOOK We have an encouraging pipeline of work for the remainder of this year which theBoard anticipates will deliver results significantly in excess of last year witha commensurate increase in dividend. DJR FLETCHER CHAIRMAN 23 January 2007 Registered office Stratton House Stratton Street London W1J 8LA Fletcher King Plc Consolidated Interim Income Statement(unaudited) for the 6 months ended 31 October 2006 6 months ended 6 months ended Year ended 31 October 31 October 30 April 2006 2005 2006 £000 £000 £000 Revenue 3,449 3,104 6,117 Employee benefits expense (2,096) (1,960) (4,019)Depreciation expense (38) (33) (86) Other operating expenses (1,051) (952) (1,747) _______________________________________________ Operating profit 264 159 265 Other income - - 237 Income from investments 7 22 34 Finance income 37 32 66 Finance expense - - (2) _______________________________________________Profit before taxation 308 213 600 Taxation (105) (71) (136) _______________________________________________ Profit for the period after taxation attributable to equity shareholders 203 142 464 _______________________________________________ Basic earnings per share (note 2) 2.20p 1.57p 5.09p Diluted earnings per share (note 2) 2.20p 1.56p 5.06p Equity dividends on ordinary shares:Declared and paid during periodOrdinary final dividend for theyear ended 30 April 2006: 2.5p per share (2005: 2.0p) 230 184 184 Special final dividend for theyear ended 30 April 2005: 1.0p per share - 92 92 Interim dividend for the six months ended 31 October 2005 (see below) - - 58 ______________________________________________ 230 276 334 ______________________________________________ Proposed but not yet paidInterim dividend for the six monthsended 31 October 2006: 1.0p per share (2005: 0.63p) 92 58 -Ordinary final dividendfor 2006 (see above) - - 230 ______________________________________________ 92 58 230 ______________________________________________ Fletcher King PlcConsolidated Interim Balance Sheet(unaudited) as at 31 October 2006 31 October 31 October 30 April 2006 2005 2006 £000 £000 £000 AssetsNon-current assetsProperty, plant and equipment 138 151 144Available for sale investments 553 861 597 _______________________________________________ 691 1,012 741 _______________________________________________ Current assetsTrade and other receivables 1,668 1,692 1,485Amounts recoverable on contracts 190 177 202Cash and cash equivalents 1,844 1,337 2,143 _______________________________________________ 3,702 3,206 3,830 _______________________________________________Non-current assets classified asheld for sale 393 - 393 _______________________________________________Total assets 4,786 4,218 4,964 _______________________________________________ LiabilitiesCurrent liabilitiesTrade and other payables 489 40 359Current taxation liabilities 102 214 135Other creditors and provisions 869 961 1,085 _______________________________________________ 1,460 1,215 1,579 _______________________________________________Non-current liabilitiesDeferred taxation liabilities 121 95 122 _______________________________________________Total liabilities 1,581 1,310 1,701 _______________________________________________ Shareholders' equityShare capital 921 920 921Share premium 140 138 140Reserves 2,144 1,850 2,202 _______________________________________________Total shareholders' equity 3,205 2,908 3,263 _______________________________________________ Total equity and liabilities 4,786 4,218 4,964 _______________________________________________ Fletcher King PlcConsolidated Interim Statement of Changes in Equity (unaudited) for the 6 months ended 31 October 2006 Profit Fair Share Share and value Total TOTAL capital premium loss reserve reserves EQUITY £000 £000 £000 £000 £000 £000Balance at 1 May 2006 921 140 1,862 340 2,202 3,263Net profit for the period - - 203 - 203 203Fair value loss on investments - - - (44) (44) (44)Deferred taxation adjustment - - - 13 13 13 ___________________________________________________ Total income and expense for the period - - 203 (31) 172 172Equity dividends paid - - (230) - (230) (230) ___________________________________________________Balance at 31 October 2006 921 140 1,835 309 2,144 3,205 ___________________________________________________ Balance at 1 May 2005 881 76 1,732 207 1,939 2,896Net profit for the period - - 142 - 142 142Fair value gain on investments - - - 64 64 64Deferred taxation adjustment - - - (19) (19) (19) ___________________________________________________Total income and expense for the period - - 142 45 187 187 Issue of ordinary shares 39 62 - - - 101Equity dividends paid - - (276) - (276) (276) ___________________________________________________Balance at 31 October 2005 920 138 1,598 252 1,850 2,908 ___________________________________________________ Balance at 1 May 2005 881 76 1,732 207 1,939 2,896Net profit for the period - - 464 - 464 464Fair value gain on investments - - - 193 193 193Deferred taxation adjustment - - - (60) (60) (60) ___________________________________________________Total income and expense for the period - - 464 133 597 597Issue of ordinary shares 40 64 - - - 104Equity dividends paid - - (334) - (334) (334) ___________________________________________________Balance at 30 April 2006 921 140 1,862 340 2,202 3,263 ___________________________________________________ Fletcher King PlcConsolidated Interim Cash Flow Statement(unaudited) for the 6 months ended 31 October 2006 6 months ended 6 months ended Year ended 31 October 31 October 30 April 2006 2005 2006 £000 £000 £000 Cash flows from operating activitiesProfit before taxation 308 213 600Adjustments for:Depreciation expense 38 33 86Income from fixed asset investments (7) (22) (34)Finance income (37) (32) (66)Finance expense - - 2 _______________________________________________ Cash flows from operating activitiesbefore movement in working capital 302 192 588(Increase) / decrease in tradeand other receivables (183) (62) 145(Decrease) in trade and other payables (86) (589) (148)Decrease / (increase) in work in progress 11 22 (3) _______________________________________________ Cash (absorbed by) / generatedfrom operations 44 (437) 582Interest paid - - (2)Taxation paid (125) - (156) _______________________________________________ Net cash flows from operating activities (81) (437) 424 _______________________________________________ Cash flows from investing activitiesPurchases of equipment (32) (22) (68)Interest received 37 32 66Income from fixed asset investments 7 22 34 _______________________________________________ Net cash flows from investing activities 12 32 32 _______________________________________________ Cash flows from financing activitiesProceeds from the issue of equity shares - 101 104Dividends paid to shareholders (230) (276) (334) _______________________________________________ Net cash flows from financing activities (230) (175) (230) _______________________________________________ Net (decrease) / increase in cashand cash equivalents (299) (580) 226Cash and cash equivalentsat start of period 2,143 1,917 1,917 _______________________________________________ Cash and cash equivalentsat end of period 1,844 1,337 2,143 _______________________________________________ Fletcher King PlcExplanatory Notes 1. Basis of preparation These consolidated interim financial statements, which are neither audited norreviewed, comprise the unaudited results for the six months ended 31 October2006 and 31 October 2005, together with the audited results for the twelvemonths ended 30 April 2006, and have been prepared under the historical costconvention as modified by the revaluation of available for sale financialassets. The Group has prepared these consolidated interim financial statements using theprincipal accounting policies set out in note 2 of the 2006 Annual Report andAccounts. The Group has chosen not to adopt IAS 34 in preparing these consolidated interimfinancial statements. 2. Earnings per share Basic earnings per share is calculated by reference to the result attributableto equity shareholders of £203,000 (2005: £142,000) and the weighted average of9,209,779 shares (2005: 9,041,763) in issue during the period. Diluted earnings per share is calculated by reference to the result attributableto equity shareholders of £203,000 (2005: £142,000) and the adjusted weightedaverage of 9,220,196 shares (2005: 9,126,982) in issue during the period. 3. Results for 2006 The results for the year ended 30 April 2006 and the balance sheet at that date,which have been included in these interim consolidated financial statements, arenot statutory accounts. The Group's statutory financial statements for the yearended 30 April 2006 have been delivered to the Registrar of Companies. Theindependent auditors' report on those financial statements is unqualified anddoes not contain a statement under Section 237(2) or (3) of the Companies Act1985. This information is provided by RNS The company news service from the London Stock Exchange