TIDMENGI
RNS Number : 4775G
Energiser Investments PLC
30 May 2017
ENERGISER INVESTMENTS PLC
FINAL RESULTS FOR THE YEARED 31 DECEMBER 2016
CHAIRMAN'S STATEMENT
Introduction
I am delighted to report on the Group's performance for the year
ended 31 December 2016.
As part of our strategy to focus on the property sector, in
October 2016 Dominic White moved from his role as Non-Executive
Director to Chief Executive. Dominic has an extensive background in
the real estate sector and capital markets.
During the year we maintained greater than 95% occupancy at the
Wellingborough investment portfolio, saw the majority of the
development loan repaid at the Kingswood, Surrey development, made
great progress on the sourcing, analysis and negotiation of a
number of potential transactions and raised new equity.
Results
The gross rental income from the Wellingborough investment
portfolio of 20 residential properties increased to GBP160,000
(2015: GBP154,000), an uplift of 3.9% over the previous year. The
net rental income, after relevant operating costs, was GBP118,000
(2015: GBP120,000). Administrative costs were GBP110,000 (2015:
GBP50,000) due to the appointment of Dominic White and the
resulting increase in activity. Finance costs fell to GBP208,000
(2015: GBP358,000) due to lower interest payments following the
repayment of the funding for the development at Kingswood, Surrey.
The loss before and after taxation was GBP211,000 (2015:
GBP167,000) with a loss per share of 0.40p (2015: 0.38p).
Net assets have increased significantly to GBP1,748,000 (2015:
GBP419,000) primarily due to the new equity issue in December 2016
which raised GBP1,255,000 gross of issue expenses. This results in
a net asset value per share of 1.41p (2015: 0.96p). 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.
Operations
The 20 properties in Wellingborough are currently let and will
continue to be let on short-term tenancies. The Directors have
decided that following successful asset management activity, rents
and values have increased such that it is timely to consider a
disposal. The assets will be marketed for sale in 2017.
Our investment in the development funding of 12 residential
properties in Kingswood, Surrey has now been repaid. At the year
end 11 of the 12 units had been sold. The last unit was sold in
April 2017 and all payments have now been received.
We successfully raised GBP1,255,000 in December 2016, ahead of
our target.
The Group has continued to fully provide against its investment
in EiRx Therapeutics plc, which was placed in creditors' voluntary
liquidation in 2015.
Outlook
The Group's strategy is to focus on and engage in investment
opportunities within the real estate sector, in particular in real
estate operating companies. Our focus is on three areas -
serviced-residential, self-storage and short term property lending.
The over-riding theme is technology led real estate operations to
deliver efficiency, scalability and transparency. We are
negotiating specific opportunities in the serviced apartment and
self-storage sectors and are reviewing a number of secured lending
investments through our property lending subsidiary.
We look forward to sharing full details of the next Energiser
investment with shareholders in 2017.
Stephen Wicks
26 May 2017
Group strategic report
for the year ended 31 December 2016
The Directors present their Strategic Report on the Group for
the year ended 31 December 2016.
Review of the business
The Company is registered as a Public Limited Company (plc). The
Company's shares of 0.1p each are listed on AIM, part of the London
Stock Exchange.
The Group invests in quoted and unquoted companies to achieve
capital growth. The Group also holds investment properties whereby
the properties are held with rental income arising from short-term
lets. It also provides mezzanine finance to housebuilders.
Results and performance
The results of the Group for the year show a loss on ordinary
activities before and after taxation of GBP211,000 (2015:
GBP167,000). The shareholders' funds for the Group total
GBP1,748,000 (2015: GBP419,000).
The performance of the rental investment during 2016 was similar
to that of 2015, with greater than 95% occupancy on the rental
properties. The Group had provided GBPnil funding for the
development of 12 residential units in Surrey and is entitled to
receive 50% of the net profit of the development, including a
priority return of GBP785,000, subject to the development making
sufficient profit. Since the year end, the sale of the final unit
has legally completed and the Group's share of profit and cash has
been received.
Business environment
The property market around Wellingborough has not seen any price
inflation and therefore no uplift was recognised in the value of
the investment properties.
Strategy
Energiser's strategy as an Investing Company is to invest,
directly or indirectly, in quoted and unquoted companies and in the
property sector to achieve capital growth in the medium term.
The Group continues to let the Wellingborough properties on
short-term tenancies.
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.
2016 2015
------------------------------ ------------ ----------
Return on project investment GBP118,000 GBP120,000
Net assets GBP1,748,000 GBP419,000
Net assets per ordinary share 1.41p 0.96p
------------------------------ ------------ ----------
Principal risks and uncertainties
The management of the business and the nature of the Group's
strategy are subject to a number of risks. The Directors have set
out below the principal risks facing the business. Where possible,
processes are in place to monitor and mitigate such risks. The
Group operates a system of internal control and risk management in
order to provide assurance that the Board is managing risk whilst
achieving its business objectives. No system can fully eliminate
risk and, therefore, the understanding of operational risk is
central to the management process.
To enable shareholders to appreciate what the business considers
are the main operational risks, they are briefly outlined
below:
Potential
Risk impact Strategy
-------- ------------ --------------------- --------------------
Housing A fall Inability The Group
market in the to realise seeks to
housing maximum value ensure that
market in a timely funding
in the fashion provided
regions Adverse effect to housebuilders
in on the timing is for developments
which of sales in areas
the that are
Group likely to
operates be least
affected
by a decline
in the housing
market
-------- ------------ --------------------- --------------------
Rental A decrease Detrimental The Group
market in demand effect on seeks to
for the Group's ensure that
rental ability to tenants
properties cover administration are satisfied
and debt with their
servicing property
costs to encourage
tenancy
renewals
and employs
a reputable
manager
to deal
with any
issues and
to let the
properties
-------- ------------ --------------------- --------------------
Interest Significant Increased The Group
rates upward borrowing mitigates
changes costs and any adverse
in interest a detrimental exposure
rates effect on to interest
profit rate changes
by controlling
its gearing
-------- ------------ --------------------- --------------------
Future developments
We have now realised the profit share related to the mezzanine
funding provided to a housebuilder for the 12 unit development in
Kingswood Park, Surrey. The Group will continue to focus on direct
investment in the equity and debt capital of property assets. It
will also look to increase its exposure to property by investing in
property operating companies such as serviced-residential,
serviced-storage or serviced-leisure that combine an interest in a
property portfolio with an overriding operating business.
The Group intends to dispose of the Wellingborough properties in
the near future.
By order of the Board
Nishith Malde
Company Secretary
26 May 2017
Group statement of comprehensive income
for the year ended 31 December 2016
2016 2015
GBP'000 GBP'000
----------------------------------------------- -------- --------
Continuing operations
Revenue arising in the course of ordinary
activities 160 154
Cost of sales (42) (34)
------------------------------------------------ -------- --------
Gross profit 118 120
Administrative expenses (110) (50)
Revaluation of investment properties - 102
------------------------------------------------ -------- --------
Operating profit 8 172
Finance costs (208) (358)
Finance income (11) 19
------------------------------------------------ -------- --------
Loss before taxation (211) (167)
Taxation - -
Loss for the year attributable to shareholders
of the Group (211) (167)
------------------------------------------------ -------- --------
Other comprehensive income/(loss)
Items that may be subsequently reclassified
to profit or loss
Change in value of available-for-sale
financial assets (5) (16)
Related deferred taxation 14 4
------------------------------------------------ -------- --------
Other comprehensive income/(loss) for
the year, net of tax 9 (12)
------------------------------------------------ -------- --------
Total comprehensive loss for the year
attributable to shareholders of the
Group (202) (179)
------------------------------------------------ -------- --------
Loss per share
Basic and diluted loss per share from
total and continuing operations (0.40)p (0.38)p
------------------------------------------------ -------- --------
Diluted loss per share is taken as equal to the basic loss per
share as the Company'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 2016
2016 2015
GBP'000 GBP'000
------------------------------------ -------- --------
ASSETS
Non-current assets
Investment property 2,844 2,844
2,844 2,844
------------------------------------ -------- --------
Current assets
Trade and other receivables 72 38
Available-for-sale financial assets 553 3,977
Cash and cash equivalents 1,120 218
------------------------------------- -------- --------
1,745 4,233
------------------------------------ -------- --------
Total assets 4,589 7,077
------------------------------------- -------- --------
LIABILITIES
Current liabilities
Trade and other payables 733 866
Short-term borrowings 694 4,318
Deferred tax 126 140
------------------------------------- -------- --------
1,553 5,324
------------------------------------ -------- --------
Non-current liabilities
Long-term borrowings 1,288 1,334
1,288 1,334
------------------------------------ -------- --------
Total liabilities 2,841 6,658
------------------------------------- -------- --------
Net assets 1,748 419
------------------------------------- -------- --------
EQUITY
Share capital 2,392 2,312
Share premium account 7,198 5,747
Convertible loan 88 88
Merger reserve 1,012 1,012
Revaluation reserve 537 528
Retained earnings (9,479) (9,268)
------------------------------------- -------- --------
Total equity 1,748 419
------------------------------------- -------- --------
Group statement of changes in equity
for the year ended 31 December 2016
Share
Share premium Convertible Merger Revaluation Retained Total
capital account loan reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------- -------- ----------- -------- ----------- --------- --------
At 1 January 2015 2,312 5,747 88 1,012 540 (9,101) 598
Total comprehensive
loss - - - - (12) (167) (179)
----------------------- -------- -------- ----------- -------- ----------- --------- --------
Balance at 31 December
2015 2,312 5,747 88 1,012 528 (9,268) 419
----------------------- -------- -------- ----------- -------- ----------- --------- --------
Total comprehensive
loss - - - - 9 (211) (202)
Issue of equity 80 1,451 - - - - 1,531
----------------------- -------- -------- ----------- -------- ----------- --------- --------
Balance at 31 December
2016 2,392 7,198 88 1,012 537 (9,479) 1,748
----------------------- -------- -------- ----------- -------- ----------- --------- --------
Group statement of cash flows
for the year ended 31 December 2016
2016 2015
GBP'000 GBP'000
--------------------------------------------------- ---------------- -------------------
Cash flows from operating activities
Loss before and after taxation (211) (167)
Adjustments for:
Fair value adjustment on financial liabilities
recognised in profit or loss - (8)
Fair value adjustment on investment property - (102)
Interest expense 208 358
Interest income 11 (11)
Increase in trade and other receivables (33) (13)
(Decrease)/increase in trade payables (127) 35
Net cash (used in)/generated by operating
activities (152) 92
--------------------------------------------------- ---------------- -------------------
Cash flows from investing activities
Mezzanine finance facility repaid 3,408 -
Mezzanine finance facility issued - (650)
--------------------------------------------------- ---------------- -------------------
Net cash generated by/(used in) investing
activities 3,408 (650)
--------------------------------------------------- ---------------- -------------------
Cash flows from financing activities
Proceeds from borrowings - 2,064
Net proceeds on the issue of ordinary shares 1,530 -
Repayment of borrowings (3,670) (1,206)
Interest paid (214) (95)
--------------------------------------------------- ---------------- -------------------
Net cash (used in)/generated by financing
activities (2,354) 763
--------------------------------------------------- ---------------- -------------------
Net increase in cash and cash equivalents 902 205
Cash and cash equivalents at beginning of
financial year 218 13
--------------------------------------------------- ---------------- -------------------
Cash and cash equivalents at end of financial
year 1,120 218
--------------------------------------------------- ---------------- -------------------
Note:
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2016
or 2015 but is derived from those accounts. Statutory accounts for
2015 have been delivered to the registrar of companies, and those
for 2016 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
2016 or 2015.
The AGM will be held at Decimal Place, Chiltern Avenue,
Amersham, Buckinghamshire, HP6 5FG at 11.00 am on 30 June 2017.
The Company's Annual Report and Accounts along with the Notice
of Annual General Meeting will be posted to shareholders shortly
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
Dominic White +44 (0) 1494 762450
Nishith Malde +44 (0) 1494 762450
Cairn Financial Advisers LLP
Jo Turner/Sandy Jamieson +44 (0) 20 7213 0880
This information is provided by RNS
The company news service from the London Stock Exchange
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