23 May 2012 07:00
Energiser Investments plc
Final results for the year ended 31 December 2011
Chairman's Statement
The following represents my report to shareholders on the results for the year ended 31 December 2011 and the financial position at that date. 2012 has not been kind to the UK economy and we are now in the first double dip recession since the economic turmoil of 1975. Whilst the recession this time is not expected to be severe or long lasting, it is clear that the overall situation in the UK will not improve dramatically as the markets continue to be impacted by the poor growth prospects in Europe and the possibility of the collapse of the Euro. Notwithstanding, the Group raised a modest amount of equity funding in July 2011 and has experienced a small increase in the value of our principal property asset located in Wellingborough, Northamptonshire. After taking into account the retained loss for the year, the net assets remain at similar levels to the previous year end.
Results
The loss before tax for the year ended 31 December 2011 was £124,000 (2010: profit of £68,000). Our residential development in Wellingborough generated gross rental income of £139,000 and after associated operating costs resulted in net rental income of £103,000. During the year we sold a property in Gateshead, which we had accepted in part exchange for one of the Wellingborough properties, at a loss of £30,000. In addition, the Group wrote off £24,000 of equity investments and £29,000 invested in the production of a fully functional concept prototype of a low profile, high powered motor, further details of which are set out below. Administrative expenses have reduced to £116,000 (2010: £176,000) and finance costs include a fair value charge of £44,000 in respect of the fixed interest rate swap derivative instrument against the bank loan of £1,310,000 (2010: £1,352,000).
During the year the Group raised £117,500 by placing 11,750,000 new ordinary shares of 0.1p each at a price of 1.0p per share. The value of the portfolio of properties in Wellingborough has increased by £103,000 to £2.55m (2010: £2.45m) and the Group's net assets have increased marginally to £340,000 (2011: £339,000) representing net asset value per share of 0.78p (2010: 1.06p).
The Directors do not recommend the payment of a dividend.
The Company's largest shareholder, Stephen Wicks, provided financial support by participating in the equity fund raising referred to above and has agreed to provide further financial support to the Group for the foreseeable future, if required. As at the year end there were no loans due to Mr Wicks. His loans to the Group constitute a related party transaction under the AIM rules for companies. Having consulted with the Group's nominated adviser, the Directors consider that the terms of the loans from Mr Wicks or any of his related parties are fair and reasonable in so far as the shareholders are concerned.
Operations
In last year's Annual Report I updated shareholders on our investment in EiRx Therapeutics plc (ETP) where we hold 12.5% of its issued share capital. ETP raised £230,000 in April 2011 to assist it in financing due diligence work required for a major transaction. Energiser invested £24,000 in this fund raising and we have fully provided against this investment as we understand that the work undertaken by ETP did not lead to the proposed transaction.
All of the 20 residential properties in our Wellingborough development are currently let, generating gross annual rental income of £149,000. The properties are let on short-term tenancies and continue to attract tenants as and when they become available. It continues to be the intention of the Board to sell the properties when the housing market in Northamptonshire improves sufficiently.
In October 2011 the Group announced that it had invested a small sum in a project in the leisure industry. The initial phase involved the production of a fully functional proof of concept prototype motor and, having completed this phase, the Group agreed to fund the next phase of development which includes a pre-production version of the motor for testing by the US Federal Emissions Agency. This phase has experienced delays and it is unlikely that the Environmental Protection Agency certificate will be received in the near future.
Outlook
The residential development of 20 properties at Wellingborough constitutes the Group's principal asset which generates a stable rental stream. The Board continues to seek other opportunities to increase the net asset value of the Group and will keep shareholders informed of any developments.
Simon Bennett
Chairman
22 May 2012
Report of the Directors
Results and dividendsThe net loss of the Group for the year before and after taxation amounted to £124,000 (2010: profit of £68,000). The Directors do not recommend the payment of a dividend for the year ended 31 December 2011.
The net assets of the Group at 31 December 2011 totalled £340,000 (2010: net assets of £339,000). The net assets per ordinary share as at 31 December 2011 were 0.78p (2010: net assets per ordinary share of 1.06p).
A more detailed review of the activity and progress of the business, including the portfolio of investments and the principal risks and uncertainties faced by the business, is contained in the Chairman's Statement.
Whilst the Group currently has limited investments in quoted or unquoted companies, as referred to above, the Group's principal activity is that of investing in companies. Accordingly, the main Key Performance Indicators used by the business are:
• the underlying share price of the investments;
• the returns on project finance (at the year end the only project, comprising the Wellingborough development, was fully let out under short-term operating leases whilst being held for sale); and
• the net assets position of the Group including net assets per share (2011: net assets per share of 0.78p; 2010: net assets per share of 1.06p).
Going concern
The financial statements have been prepared on the going concern basis, the Directors having considered the cash forecasts for the next twelve months from the date of the approval of these financial statements. In doing so they have given due regard to the risks and uncertainties affecting the business as set out in the Directors' Report, the liquidity of investments and the liquidity risk, funding provided by Mr S D Wicks (the Group's major shareholder), as referred to in the Chairman's Statement, and the repayment of other loans. On this basis the Directors have a reasonable expectation that the funds available to the Group are sufficient to meet the requirements indicated by those forecasts.
ON BEHALF OF THE BOARD
Nishith MaldeCompany Secretary22 May 2012
Group Income Statement
For the year ended 31 December 2011
2011 | 2010 | ||
£'000 | £'000 | ||
Continuing operations | |||
Change in fair value of investments | (54) | (11) | |
Rental income | 106 | 100 | |
Other income | 64 | 297 | |
Administrative expenses | (116) | (176) | |
Operating profit | - | 210 | |
Finance costs | (124) | (149) | |
Finance income | - | 7 | |
(Loss)/profit before taxation | (124) | 68 | |
Taxation | - | - | |
(Loss)/profit for the year attributable to shareholders of the Company and other comprehensive income | (124) | 68 | |
(Loss)/earnings per share | |||
Basic and diluted earnings per share from total and continuing operations | (0.24)p | 0.21p |
Diluted earnings per share is taken as equal to basic earnings per share as the Group's average share price during the period is 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
As at 31 December 2011
2011 | 2010 | ||
£'000 | £'000 | ||
ASSETS | |||
Non-current assets | |||
Financial assets held at fair value through profit or loss | 1 | - | |
Current assets | |||
Inventories | 2,550 | 2,447 | |
Trade and other receivables | 14 | 22 | |
Cash and cash equivalents | 111 | 8 | |
2,675 | 2,477 | ||
Total assets | 2,676 | 2,477 | |
LIABILITIES | |||
Current liabilities | |||
Trade and other payables | 278 | 143 | |
Short-term borrowings | 743 | 733 | |
1,021 | 876 | ||
Non-current liabilities | |||
Long-term borrowings | 1,271 | 1,262 | |
Financial liabilities held at fair value through profit or loss | 44 | - | |
1,315 | 1,262 | ||
Total liabilities | 2,336 | 2,138 | |
Net assets | 340 | 339 | |
EQUITY | |||
Share capital | 2,312 | 2,300 | |
Share premium account | 5,747 | 5,641 | |
Convertible loan | 88 | 88 | |
Merger reserve | 1,012 | 1,012 | |
Retained earnings | (8,819) | (8,702) | |
Total equity | 340 | 339 |
Group Statement of Changes in Equity
For the year ended 31 December 2011
Share | ||||||
Share | premium | Convertible | Merger | Retained | Total | |
capital | account | loan | reserve | earnings | equity | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 January 2010 | 2,300 | 5,641 | 88 | 1,012 | (8,786) | 255 |
Total comprehensive income | - | - | - | - | 68 | 68 |
Share-based compensation | - | - | - | - | 16 | 16 |
Total changes in equity | - | - | - | - | 84 | 84 |
At 31 December 2010 | 2,300 | 5,641 | 88 | 1,012 | (8,702) | 339 |
Issue of equity | 12 | 106 | - | - | - | 118 |
Share-based compensation | - | - | - | - | 7 | 7 |
Transactions with owners | 12 | 106 | - | - | 7 | 125 |
Total comprehensive income | - | - | - | - | (124) | (124) |
Total changes in equity | 12 | 106 | - | - | (117) | 1 |
Balance at 31 December 2011 | 2,312 | 5,747 | 88 | 1,012 | (8,819) | 340 |
Group Statement of Cash Flows
For the year ended 31 December 2011
2011 | 2010 | |||
£'000 | £'000 | |||
Cash flows from operating activities | ||||
(Loss)/profit before and after taxation | (124) | 68 | ||
Adjustments for: | ||||
Change in fair value of investments | 54 | 11 | ||
Fair value loss on financial liabilities recognised in profit or loss | 44 | - | ||
Interest expense | 80 | 149 | ||
Decrease/(increase)in trade and other receivables | 8 | (5) | ||
Increase/(decrease) in trade payables | 105 | (183) | ||
Interest received | - | (7) | ||
Profit on loan redemption | - | (297) | ||
Share option charge | 7 | 16 | ||
Write down of inventories to net realisable value | - | 40 | ||
Reversal of impairment of inventories | (94) | - | ||
Increase in inventories | (9) | (94) | ||
Net cash generated by / (used in) operating activities | 71 | (302) | ||
Cash flows from investing activities | ||||
Purchase of investments | (54) | (52) | ||
Proceeds from sale of investments | - | 269 | ||
Interest received | - | 7 | ||
Net cash (used in) / generated from investing activities | (54) | 224 | ||
Cash flows from financing activities | ||||
Proceeds from borrowings | 61 | 442 | ||
Re-payment of borrowings | (43) | (553) | ||
Interest paid | (50) | (73) | ||
Net proceeds on issue of ordinary shares | 118 | - | ||
Net cash generated by / (used in) financing activities | 86 | (184) | ||
Net increase /(decrease) in cash and cash equivalents | 103 | (262) | ||
Cash and cash equivalents at beginning of period | 8 | 270 | ||
Cash and cash equivalents at end of period | 111 | 8 | ||
Note:
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010 but is derived from those accounts. Statutory accounts for 2010 have been delivered to the registrar of companies, and those for 2011 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 2010 or 2011.
The AGM will be held at 2 Anglo Office Park, 67 White Lion Road, Amersham, Buckinghamshire, HP7 9FB at 11.00 am on 29 June 2012.
The Company's Annual Report and Accounts will be posted to shareholders on 1 June 2012 and will be available to view and download on the Company's website at www.energiserinvestments.co.uk.
For further information contact:
Energiser Investments plc
Nishith Malde +44 (0) 1494 762450
finnCap Limited
Matthew Robinson +44 (0) 20 7220 0500