TIDMMAC
22 August 2022
Marechale Capital plc
("Marechale" or the "Company")
Financial Statements for the Year Ended 30 April 2022
Marechale Capital plc, an established City of London based corporate finance
house with a long-term track record and a strong reputation for advising and
financing high growth consumer brands, leisure, clean energy, mineral
extraction and technology companies, is pleased to announce its audited final
results for the year ended 30 April 2022 (the "Period").
Financial Highlights
* Increased profit to £2,562,000 (FY21: £246,000)
* Significant increase in balance sheet to £3,630,000 (FY21: £686,000)
* Revenue of £622,000 (FY21: £400,000)
* Investments and warrants in client companies generated gains of £2,716,000
(FY21: £412,000)
* Successful fundraise of £207,000 in March 2022
* Strategic investment of £160,000 from Luke Johnson in October 2021
Operational Highlights
* Further equity funding for Fast2Fibre
* Additional funding secured for The Forest Road Brewing Company
* Strategic funding advice given to Future Biogas, Chestnut Group and the
Burgh Island Hotel
* Luke Johnson took a 9% stake in the Company in October 2021
* Hospitality clients are strongly positioned to expand and capitalise on
market opportunities
* Renewable energy and other corporate clients continue to perform providing
strong return opportunities for our shareholders
Post Period Highlights
* Completion of fundraise for Weardale Lithium Ltd ("Weardale"); Marechale's
total interest in Weardale is now 8.5%
Chairman's Statement
Marechale is an established corporate finance house with a long-term track
record and a strong reputation in advising and financing high growth consumer
brands, leisure, clean energy, and technology companies in the UK and Europe.
Marechale also uses its balance sheet to co-invest in its client companies,
along with warrants and founder equity, in order to create shareholder value. I
am pleased to provide the following update for the Period.
It has been an active year in the hospitality sector as a number of businesses
negotiated through the pandemic and Government restrictions; two years of
market uncertainty have now been prolonged with the advent of war in Europe,
which is compounding increasing inflationary pressures, and discretionary
spending is being squeezed. However, against this challenging backdrop, we
believe that there are significant market opportunities for Marechale's
clients.
The Company entered the Period with good levels of business activity and funded
clients in both the hospitality sector, as well as clients in other high growth
sectors. Completed projects include further equity funding for the European
telecommunications technology company, Fast2Fibre, and additional funding for
The Forest Road Brewing Company, the award-winning London craft brewer.
Marechale continues to generate professional services income by providing
advice to its clients. In the last year, this included strategic and funding
advice for Future Biogas, Chestnut Group and the Burgh Island Hotel. All these
fundraisings were at premiums or significant premiums to Marechale's equity and
warrant holdings. It is pleasing to report that overall Marechale has had a
record year in increasing net asset value for shareholders.
One of the key strategic events of the last year was welcoming Luke Johnson as
a 9% shareholder as reported in October 2021. Luke provides a wealth of
experience as one of the UK's most successful retail private equity ('PE')
investors, and Marechale had been and will continue to work closely with him.
In the clean energy space, general market uncertainty has also impacted some of
our corporate clients whose progress has been delayed and resulted in some
investor exits being postponed for the next 12-18 months. We are, however,
pleased to report that significant progress has been made with the lithium
extraction business, Weardale Lithium Ltd, as announced on 09 August 2022, and
that our pipeline of new and increasingly diversified projects remains robust.
Weardale Lithium Ltd is Marechale's largest investment, holding 500,000 founder
shares and 22,400 Options with a combined value of £2.8 million which has been
recorded in the balance sheet. Weardale has secured mineral extraction rights
in Co. Durham via existing boreholes where there is proven lithium in the brine
hundreds of feet below the surface. Since the initial fundraising in August
2021, the price of lithium has increased 300%, giving Marechale cause to be
optimistic for a positive future outcome.
During the last year Marechale has generated revenue of £622,000 (2021: £
400,000), and, although our gross profit margin decreased from 64% to 53%,
owing to higher third-party commissions, administrative expenses remained
steady at £483,000 (2021: £463,000).
Importantly, investments and warrants in client companies generated unrealised
gains of £2,716,000 (2021: £412,000). It is worth noting that we have £
1,393,000 of unused losses to offset against any possible future tax liability
on realisation.
I am delighted to announce an increased profit for the year of £2,562,000
(2021: £246,000). During the same time, the balance sheet value has increased
significantly to £3,630,000 (2021: £686,000), representing 3.8 pence per share
(2021: 0.8 pence per share), due to adding both profit and new equity which is
explained in full in the Statement of Changes in Equity.
The Company's focus is to use its reputation and deal flow as a corporate
finance adviser to build shareholder value in Marechale's balance sheet. This
has been achieved by negotiating further equity and warrant positions, and
joint venture arrangements as part of its terms of engagement with growth
company clients. Marechale's historical investment performance has been
excellent in this regard, having achieved double digit internal rates of return
across all the companies that it has funded since 2010. We are confident that
our investments in Weardale Lithium, Burgh Island, Chestnut Group, Fast2Fibre,
Forest Road Brewery and Future Biogas, amongst others, will deliver uplifts in
value in due course.
The Company has continued with its strategy of utilising its balance sheet to
take enhanced positions in its client companies, and embarked on two small
capital raises, welcoming Luke Johnson's strategic investment of £160,000 in
October 2021, and, secondly, raising a further £207,000 from shareholders and
new investors in March 2022.
Due to Marechale's proven track record as a corporate finance adviser in the £
5-50 million Enterprise Value PE sector, the Board remains optimistic that the
Company will continue to generate further uplifts on its current and future
equity and warrant investments, both in the short and longer term.
Mark Warde-Norbury
Chairman
22 August 2022
For further information please contact:
Marechale Capital plc Tel: +44 (0)20 7628 5582
Mark Warde-Norbury / Patrick Booth-Clibborn
Cairn Financial Advisers LLP (Nomad and Broker) Tel: +44 (0)20 7213 0880
Jo Turner / Sandy Jamieson
BlytheRay (Financial PR) Tel: +44 (0)20 7138 3204
Tim Blythe / Megan Ray / Madeleine marechalecapital@blytheray.com
Gordon-Foxwell
Statement of Comprehensive Income
For year ended 30 April 2022
Year ended Year ended
30-Apr 30-Apr
2022 2021
(£) (£)
Continuing
operations
Revenue 621,573 399,929
Cost of (291,632) (144,507)
sales
Gross 329,941 255,422
profit
Administrative (483,499) (463,343)
expenses
Operating loss (153,558) (207,922)
Other - 44,354
Income
Finance expense (876) (1,063)
Other gains/(losses) 2,716,237 410,516
Profit/ (loss) 2,561,803 245,886
before tax
Taxation - -
Profit/ (loss) for the year on continuing 2,561,803 245,886
operations
Earnings/ (loss) per share (Pence) (Pence)
Basic - Continuing
operations 2.95 0.39
- Diluted
2.70 0.35
Statement of Comprehensive Income
Profit/ (loss) for 2,561,803 245,886
the year
Total recognised comprehensive profit/
(loss)
(all attributable to owners of the 2,561,803 245,886
company)
Statement of Financial Position
As at 30 April 2022
Year ended Year ended
30-Apr 30-Apr
2022 2021
(£) (£)
Current assets
Investment in subsidiary and 2 2
associate
Equity investments at fair value through 3,125,189 423,066
profit and loss
Warrants at fair value through profit and 146,589 90,013
loss
Trade and other receivables 43,777 50,599
Cash and cash equivalents 413,970 233,287
Total current assets 3,729,527 796,967
Total 3,729,527 796,967
assets
Current liabilities
Trade and other (57,368) (61,213)
payables
Borrowings (10,000) (7,500)
Total current (67,368) (68,713)
liabilities
Net current assets 3,662,159 728,254
Long-term
liabilities
Borrowings (32,500) (42,500)
Net assets 3,629,659 685,754
Equity
Capital and reserves attributable to equity shareholders
Share 763,023 643,690
capital
Share premium 328,413 85,247
Reserve for own (50,254) (50,254)
shares
Reserve for share based 62,312 42,709
payments
Retained profits/ 2,526,165 (35,638)
(losses)
3,629,659 685,754
Statement of Changes in Equity
For year ended 30 April 2022
Share Share Reserve Reserve Retained
capital premium for own for share earnings
shares based
payments
Company
Balance at 30 April 2020 461,449 - (50,254) 28,953 (281,524)
Total comprehensive income
Charge/ profit for the financial - - - 13,756 245,886
year
Issued in year* 182,241 85,247 -
Total comprehensive income 182,241 85,247 - 13,756 245,886
Balance at 30 April 2021 643,690 85,247 (50,254) 42,709 (35,638)
Total comprehensive income
Charge/ profit for the financial - - - 19,603 2,561,802
year
Issued in year* 119,333 243,167 -
Total comprehensive income 119,333 243,167 - 19,603 2,561,802
Balance at 30 April 2022 763,023 328,413 (50,254) 62,312 2,526,164
* Issue of ordinary shares in the
year (net of expenses)
Statement of Changes in Equity
For year ended 30 April 2022
Year ended Year ended
30-Apr 30-Apr
2022 2021
(£) (£)
Net cash from operating activities
Profit/ (Loss) before tax 2,561,803 245,886
Reverse provision for share based payments 19,603 13,756
Reverse (gains)/ losses on fair value (2,716,237) (411,992)
investment through profit and loss
Reverse losses/ (gains) on disposal of - 1,476
investments
Reverse net interest expense 876 1,063
Operating cash outflows before movements in (133,955) (149,811)
working capital
Decrease in receivables 6,822 11,391
(Decrease) in payables (3,845) (52,303)
Tax paid - -
2,977 (40,912)
Cash outflow from operating activities (130,978) (190,724)
Investment activities
Interest received (1) 14
Expenditure on equity investments (42,462) (50,625)
Proceeds from sale of equity investments - 980
through profit and loss
Cash (out)/ inflow from investing (42,463) (49,631)
activities
Financing
Issue of ordinary share capital 362,500 267,487
(Repayment)/Issue of borrowings (7,500) 50,000
Interest payable (876) (1,077)
Cash in/ (out) flow from financing 354,124 316,410
activities
Net increase in cash and cash equivalents 180,683 76,055
Cash and cash equivalents at start of the 233,287 157,232
financial year
Cash and cash equivalents at end of the 413,970 233,287
financial year
Notes to the Financial Statements
Year ended 30 April 2022
1. General information
Marechale Capital plc is a company registered in England and Wales under the
Companies Act 2006. The Company's principal activities are the provision of
professional services advice and broking services to companies. The financial
statements are presented in pounds sterling, the currency of the primary
economic environment in which the Company operates.
The Company's registered office and principal place of business is 46 New Broad
Street, London, EC2M 1JH. The Company's registered number is 03515836.
2. Basis of preparation
a. Going concern
The company has unpredictable revenue due to the nature of corporate finance
advisory and the reliance upon deal-driven transactions, however as at the year
end the company had £414k of cash reserves (2021: £233k) which at as that date
equated to approximately 10 months of overheads. Whilst the company generated
operating losses of £153k in the financial year (2021: £207k) the directors
remain confident that the project pipeline will generate sufficient income on
top of the cash reserves in order to meet the company's liabilities as they
fall due over the next twelve months. Furthermore, there is the ability to fund
working capital by equity issues, sales of equity investments and/or warrants
and deferral of directors' salaries.
b. Basis of accounting
These financial statements have been prepared in accordance with UK Adopted
International Reporting Standards ('IFRS'). IFRS Interpretations Committee
('IFRS IC') interpretations and the Companies Act 2006 applicable to companies
reporting under IFRS.
The financial statements have been prepared on the historical cost basis as
modified by the valuation of certain financial instruments, as described below.
The Directors have chosen not to prepare consolidated accounts because the two
subsidiaries, Marechale Ltd and Marechale Capital Investments Ltd, are both
dormant, have never traded, and therefore highly immaterial to the financial
statements.
Subsidiaries are entities over which the Group has control, being the power to
govern the financial and operating policies of the acquired entity so as to
obtain benefits from its activities.
An associate is an entity over which the Group has significant influence.
Significant influence is the power to participate in the financial and
operating decisions of the investee, but it is not control or joint control,
over those policies.
3. Business and geographical segments
The directors consider that there is only one activity undertaken by the
Company, that of corporate finance advisory. All of this activity was
undertaken in the United Kingdom.
2022 2021
£ £
Broking commissions and fees earned from 621,573 399,929
corporate finance
4. Other gains/ (losses)
2022 2021
£ £
Realised (losses) on equity investments - (1,476)
Unrealised gains on equity investments 2,659,661 322,860
Unrealised gains on warrants 56,576 89,132
2,716,237 410,516
5. Earnings per share
Earnings Earnings
2022 2021
£ £
Based on a gain/ (loss) of 2,561,803 245,886
No. shares No. shares
Weighted average number of Ordinary 86,947,358 62,772,480
Shares in issue for the purpose of basic
earnings per share
Weighted average number of Ordinary 94,784,268 70,626,730
Shares in issue for the purpose of
diluted earnings per share
6. Other matters and Market Abuse Regulation (MAR) Disclosure
The financial information for the year ended 30 April 2022 set out in this
announcement does not constitute statutory financial statements, as defined in
section 434 of the Companies Act 2006, but is based on the statutory financial
statements for the year then ended. The auditors have issued an unqualified
opinion on these financial statements; their report included the following
statement:
7. Valuation of investments including options
The Directors have considered the fair value adjustment made on the investments
held at fair value through profit or loss. A net upward fair value adjustment
on the investments and options was made to the total of £2,716,000 (2021: £
410,000) consisting of positive adjustments of £2,806,000 uplift on Weardale
Lithium Limited, offset by net negative adjustments on other companies. This
along with other valuations are estimates based on the Directors' assessment of
the performance of the underlying investment and reliable information such as
recent fundraising. There is however inherent uncertainty when valuing private
companies such as these in the natural resources sector.
8. Post balance sheet events
There are no post balance sheet events.
END
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