28 May 2015 14:53
ENERGISER INVESTMENTS PLC - Final ResultsENERGISER INVESTMENTS PLC - Final Results
PR Newswire
London, May 28
28 May 2015
ENERGISER INVESTMENTS PLC
(“Energiser” or “the Group”)
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2014
CHAIRMAN’S STATEMENT
Introduction
I am pleased to report on the Group’s trading for the year ended 31 December 2014 in my first statement to Shareholders since my appointment on 26 February 2015.
As mentioned in the last annual report, the Board has taken the decision to focus on the property sector and is continuing with its two major projects in that area: a rental portfolio in Wellingborough and mezzanine funding to a housebuilder for a development in Surrey. The property market in the United Kingdom has continued to recover over the past year. This recovery has contributed to the increase in the value of the Wellingborough property portfolio by £76,000 and had a similar positive impact on the development in Surrey.
Results
The 20 houses in Wellingborough generated gross rental income of £148,000 (2013: £147,000) and, after associated operating costs, resulted in net rental income of £112,000 (2013: £113,000). A cost accrual of £28,000 made in a prior year has been reversed as it is no longer required and there has been a fair value adjustment of £76,000 due to the market value of the properties increasing. Administrative expenses have decreased to £50,000 (2013: £73,000) and finance costs have risen to £322,000 (2013: £102,000) due to the interest accrued on the funding from investors referred to below. The loss before and after taxation was £147,000 (2013: profit of £36,000) with a loss per share of 0.34p (2013: earnings per share of 0.08p).
Despite the loss generated during the year, net assets have increased to £598,000 (2013: £205,000) due to the recognition of the fair value of the profit share anticipated on the mezzanine funding provided to the housebuilder. This results in a net asset value per share of 1.69p (2013: 0.47p). 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
The Group’s investment portfolio in Wellingborough, Northamptonshire is currently fully tenanted and the properties will continue to be let on short term tenancies.
The Group has invested its commitment of £2.7m of mezzanine funding for a 12 unit development in Kingswood, Surrey by a housebuilder. Construction will be completed in the summer and sales will commence shortly. Gross development value has increased to £8.9m since last reported. Energiser procured the funds from investors who will receive a coupon of 10% per annum. The Group is entitled to 50% of the net profit generated by the development and will receive a priority return of £785,000, as long as the development makes sufficient profit.
The Group has an investment in EiRx Therapeutics plc, which has been fully provided against in previous years. The company has now been placed in creditors’ voluntary liquidation and the Report to Creditors and Members has been circulated by the liquidator. In view of the report, the Board is of the opinion that the investment should continue to be fully provided against.
Outlook
The Group is now re-building shareholders’ funds by way of its current activities and it is expected that this will continue for the foreseeable future.
Stephen Wicks
26 May 2015
GROUP STRATEGIC REPORT
Results and performance
The results of the Group for the year show a loss on ordinary activities before and after taxation of £147,000 (2013: profit of £36,000). The shareholders’ funds for the Group total £598,000 (2013: £205,000). The Directors do not recommend the payment of a dividend for the year ended 31 December 2014.
The performance of the rental investment during 2014 was similar to that of 2013, with almost 100% occupancy on the rental properties. During the year the Group advanced a further £1.3m to a housebuilder under a mezzanine finance agreement. The Group has provided £2.7m (2013: £1.4m) 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.
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.
| 2014 | 2013 | |
| Return on project investment | £112,000 | £113,000 |
| Net assets | £598,000 | £205,000 |
| Net assets per ordinary share | 1.37p | 0.47p |
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, the liquidity risk, financial support provided by Mr S D Wicks, who has undertaken to meet the cash needs of the Group if required, 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.
By order of the Board
Nishith Malde
Company Secretary
26 May 2015
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2014
| 2014 | 2013 | |
| £’000 | £’000 | |
| Continuing operations | ||
| Revenue arising in the course of ordinary activities | 148 | 147 |
| Development costs | — | (17) |
| Cost of sales | 68 | 66 |
| Gross profit | 216 | 196 |
| Administrative expenses | (50) | (73) |
| Operating profit | 166 | 123 |
| Finance costs | (322) | (102) |
| Finance income | 9 | 15 |
| (Loss)/profit before taxation | (147) | 36 |
| Taxation | — | — |
| (Loss)/profit for the year attributable to shareholders of the Company | (147) | 36 |
| Other comprehensive income | ||
| Items that may be subsequently reclassified to profit or loss | ||
| change in value of available-for-sale financial assets | 684 | — |
| Related deferred taxation | (144) | — |
| Other comprehensive income for the year, net of tax | 540 | — |
| Total comprehensive income for the year attributable to shareholders of the Company | 393 | 36 |
| (Loss)/earnings per share | ||
| Basic and diluted (loss)/earnings per share from total and continuing operations | (0.34)p | 0.08p |
Diluted (loss)/earnings per share is taken as equal to basic (loss)/earnings per share as the Group’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 2014
| 2014 | 2013 | |
| £’000 | £’000 | |
| ASSETS | ||
| Non-current assets | ||
| Investment property | 2,742 | 2,666 |
| Financial assets held at fair value through profit or loss | 1 | 1 |
| 2,743 | 2,667 | |
| Current assets | ||
| Trade and other receivables | 9 | 15 |
| Available-for-sale financial assets | 3,343 | 1,400 |
| Cash and cash equivalents | 13 | 10 |
| 3,365 | 1,425 | |
| Total assets | 6,108 | 4,092 |
| LIABILITIES | ||
| Current liabilities | ||
| Trade and other payables | 564 | 359 |
| Short-term borrowings | 4,794 | 2,311 |
| Deferred tax | 144 | — |
| 5,502 | 2,670 | |
| Non-current liabilities | ||
| Long-term borrowings | — | 1,200 |
| Financial liabilities held at fair value through profit or loss | 8 | 17 |
| 8 | 1,217 | |
| Total liabilities | 5,510 | 3,887 |
| Net assets | 598 | 205 |
| 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 | 540 | — |
| Retained earnings | (9,101) | (8,954) |
| Total equity | 598 | 205 |
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2014
| Share | |||||||
| Share | premium | Convertible | Merger | Revaluation | Retained | Total | |
| capital | account | loan | reserve | reserve | earnings | equity | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| At 1 January 2013 | 2,312 | 5,747 | 88 | 1,012 | — | (8,990) | 169 |
| Total comprehensive loss | — | — | — | — | — | 36 | 36 |
| Balance at 31 December 2013 | 2,312 | 5,747 | 88 | 1,012 | — | (8,954) | 205 |
| Total comprehensive income | — | — | — | — | 540 | (147) | 393 |
| Balance at 31 December 2014 | 2,312 | 5,747 | 88 | 1,012 | 540 | (9,101) | 598 |
GROUP STATEMENT OF CASH FLOWS
For the year ended 31 December 2014
| 2014 | 2013 | |||
| £’000 | £’000 | |||
| Cash flows from operating activities | ||||
| (Loss)/profit before and after taxation | (147) | 36 | ||
| Adjustments for: | ||||
| Fair value adjustment on financial liabilities recognised in profit or loss | (9) | (15) | ||
| Fair value adjustment on investment property | (76) | — | ||
| Interest expense | 322 | 102 | ||
| Decrease/(increase) in trade and other receivables | 6 | (1) | ||
| Decrease in trade payables | (60) | (23) | ||
| Reversal of impairment of inventories | — | (100) | ||
| Net cash generated by/(used in) operating activities | 36 | (1) | ||
| Cash flows from investing activities | ||||
| Mezzanine finance facility issued | (1,259) | (1,400) | ||
| Net cash used in investing activities | (1,259) | (1,400) | ||
| Cash flows from financing activities | ||||
| Proceeds from borrowings | 1,323 | 1,496 | ||
| Re-payment of borrowings | (40) | (39) | ||
| Interest paid | (57) | (53) | ||
| Net cash generated by financing activities | 1,226 | 1,404 | ||
| Net increase in cash and cash equivalents | 3 | 3 | ||
| Cash and cash equivalents at beginning of period | 10 | 7 | ||
| Cash and cash equivalents at end of period | 13 | 10 | ||
Note:
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2014 or 2013 but is derived from those accounts. Statutory accounts for 2013 have been delivered to the registrar of companies, and those for 2014 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 2013 or 2014.
The AGM will be held at Decimal Place, Chiltern Avenue, Amersham, Buckinghamshire, HP6 5FG at 11.00 am on 29 June 2015.
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 +44 (0) 20 7148 7900