Half-yearly Report
Energiser Investments plc
Consolidated unaudited half-yearly financial report for the period ended 30
June 2014
Interim Chairman's Statement
I would start by stating that it is extremely sad that our Chairman, Bill
Weston, passed away in August 2014. Bill joined the Board as Chairman on 4
December 2013 and during his short time with the Group he provided a great deal
of support for its future direction. Bill's counsel, experience and support to
the Board and the Company will be missed. The Company is currently searching
for Bill's replacement and will make an announcement at the appropriate time.
Results
I am pleased to report that the Group's net assets have increased by 414% from
£136,000 to £699,000 since 30 June 2013. This increase is principally due to
the increase in the fair value of our investment in the development of 12 units
under construction at Kingswood Park, Surrey by £614,000. The Group, however,
has made a loss before and after taxation of £120,000 (2013: £33,000) during
the six months to 30 June 2014 predominantly due to the finance costs relating
to the funding for our investment in the development. This translates into a
loss per share of 0.27p (2013: 0.08p) Our investment of residential properties
in Wellingborough generated £48,000 (2013: £55,000) of net rental income.
Administrative expenses were £35,000 (2013: £29,000). Interest payable on the
Group's borrowings has increased significantly to £141,000 (2013: £50,000) as
the investment in Kingswood Park is financed entirely by borrowings. The
directors do not recommend the payment of a dividend.
The value of investment properties remains unchanged since the year ended 31
December 2013. Trade and other receivables have increased from £15,000 to £2.5m
as a result of our investment in the development at Kingswood Park Surrey. In
order to finance this investment our short term borrowings have increased from
£879,000 to £3.0m. At 30 June 2014, the Group's net assets amounted to £699,000
(2013: £136,000) which equates to 1.60p (2013: 0.31p) per share.
Operations
Our residential investment portfolio of 20 properties in Wellingborough is
fully let and generated gross rental income of £70,000 and after associated
operating costs of £22,000, resulted in net rental income of £48,000. The
properties are continuing to be let on short term tenancies whilst the
residential market is recovering. Consideration is currently being given to the
disposal of some of these properties with the proceeds being used to reduce
bank debt and reinvest proceeds retained by the Group into the Group's new
activity of providing mezzanine funding to small housebuilders.
Construction of the 12 unit development at Kingswood Park, Surrey is
progressing well with a show house expected to be opened in early November
2014. The Group is evaluating other proposals in the property sector.
The Group continues to hold an investment in EiRx Therapeutics plc which has
been fully provided against.
Outlook
The residential property market has recovered significantly over the last two
years and the Group is receiving new opportunities in this sector which should
begin to rebuild value for the shareholders.
Nishith Malde
Interim Chairman
For further information contact:
Energiser Investments plc Nishith Malde +44 (0) 1494 762450
Cairn Financial Advisers LLP Jo Turner +44 (0) 20 7148 7900
Group statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months year to
to 30 to 30 31
June 2014 June 2013 December
2013
Note £'000 £'000 £'000
Continuing operations
Revenue arising in the course of ordinary 70 74 147
activities
Development costs - (18) (17)
Cost of sales (20) (19) 66
Gross Profit 5 50 37 196
Administrative expenses 5 (35) (29) (73)
Operating profit 15 8 123
Finance costs (141) (50) (102)
Finance income 6 9 15
(Loss)/profit before taxation (120) (33) 36
Taxation - - -
(Loss)/profit for the period attributable to (120) (33) 36
shareholders of the Company
Other comprehensive income - fair value 614 - -
adjustment to the profit on mezzanine funding
arrangement
Total comprehensive income 494 (33) 36
(Loss)/earnings per share
Basic and diluted (loss)/earnings per share 4 (0.27)p (0.08)p 0.08p
from total and continuing operations
Diluted earnings per share is taken as equal to basic earnings per share as the
Group's average share 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
Unaudited Unaudited Audited
as at 30 as at 30 as at 31
June 2014 June 2013 December
2013
Note £'000 £'000 £'000
ASSETS
Non-current assets
Investment property 6 2,666 - 2,666
Financial assets at fair value through profit 1 1 1
and loss
2,667 1 2,667
Current assets
Inventories - 2,567 -
Trade and other receivables 2,517 15 1,415
Cash and cash equivalents 196 4 10
2,713 2,586 1,425
Total assets 5,380 2,587 4,092
LIABILITIES
Current liabilities
Trade and other payables 477 327 359
Short term borrowings 3,013 879 2,311
3,490 1,206 2,670
Non-current liabilities
Long term borrowings 1,180 1,221 1,200
Financial liabilities held at fair value 11 24 17
through profit or loss
1,191 1,245 1,217
Total liabilities 4,681 2,451 3,887
Net assets 699 136 205
EQUITY
Share capital 2,312 2,312 2,312
Share premium account 5,747 5,747 5,747
Convertible loan 88 88 88
Merger reserve 1,012 1,012 1,012
Revaluation reserve 614 - -
Retained earnings (9,074) (9,023) (8,954)
Total equity 699 136 205
Group statement of changes in equity
Share
Share premium Convertible Merger Revaluation Retained Total
capital account loan reserve reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 2,312 5,747 88 1,012 - (8,990) 169
January 2013
Total comprehensive - - - - - (33) (33)
income
Balance at 30 June 2,312 5,747 88 1,012 - (9,023) 136
2013
Total comprehensive - - - - - 69 69
income
Balance at 31 2,312 5,747 88 1,012 - (8,954) 205
December 2013
Fair value - - - - 614 - 614
adjustment to
profit on mezzanine
funding arrangement
Total comprehensive - - - - - (120) (120)
income
Balance at 30 June 2,312 5,747 88 1,012 614 (9,074) 699
2014
Group statement of cash flows
Unaudited Unaudited Audited
6 months 6 months year to
to 30 to 30 31
June 2014 June 2013 December
2013
£'000 £'000 £'000
Cash flows from operating activities
(Loss)/profit before and after taxation (120) (33) 36
Adjustments for:
Interest expense 141 50 102
Fair value adjustment on financial liabilities (6) - (15)
recognised in profit or loss
Changes in working capital:
- Increase in trade and other receivables - (1) (1)
- Increase/(decrease) in trade payables 14 (34) (23)
- Reversal of impairment in inventories - - (100)
Net cash generated by/(used in) operating 29 (18) (1)
activities
Cash flows from investing activities
Mezzanine finance facility issued (488) - (1,400)
Used in investing activities (488) - (1,400)
Cash flows from financing activities
Proceeds from borrowings 707 64 1,496
Re-payment of borrowings (25) (18) (39)
Interest paid (37) (31) (53)
Net cash generated by financing activities 645 15 1,404
Net increase/(decrease)/increase in cash and cash 186 (3) 3
equivalents
Cash and cash equivalents at beginning of period 10 7 7
Cash and cash equivalents at end of period 196 4 10
1. Nature of operations and general information
The principal activity of the Group is as an investment company investing in
quoted and unquoted companies to achieve capital growth. The Group also holds a
property development acquired by way of its principal activity. The properties
are held for sale with rental income arising from short term lets.
Energiser Investments plc is the Group's ultimate parent company. It is
incorporated and domiciled in Great Britain. The address of Energiser
Investments plc's registered office, which is also its principal place of
business, is 417 Finchley Road, London, NW3 6HJ.
Energiser Investments plc's shares are quoted on AIM, a market operated by the
London Stock Exchange. The consolidated half-yearly financial report has been
approved for issue by the Board of Directors on 30 September 2014.
The financial information set out in this half-yearly financial report does not
constitute statutory accounts as defined in Sections 434(3) and 435(3) of the
Companies Act 2006. The Group's statutory financial statements for the year
ended 31 December 2013 have been filed with the Registrar of Companies and are
available at www.energiserinvestments.co.uk. The auditor's report on those
financial statements was unqualified and did not contain any statement under
Section 498(2) or Section 498(3) of the Companies Act 2006.
2. Basis of preparation
This consolidated half-yearly financial report has been prepared in accordance
with International Accounting Standard 34 - Interim Financial Reporting.
The consolidated half-yearly financial report should be read in conjunction
with the annual financial statements for the year ended 31 December 2013, which
have been prepared in accordance with IFRS as adopted by the European Union.
3. Accounting policies
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 31 December 2013, as described in those
financial statements other than that stated below:
Critical judgements in applying the accounting policies
Key sources of estimation uncertainty
Fair value of profit on mezzanine funding arrangement
The fair value of the mezzanine funding arrangement includes estimates as to
the timing and value of future cash flows and the underlying profitability of
the development. The estimates are formed based on information provided by the
developer. The group believes that the directors' knowledge and experience in
the sector means they are well placed to critically assess this information and
to make conclusions as appropriate.
4. Loss per ordinary share
The loss per ordinary share is based on the weighted average number of ordinary
shares in issue during the period of 43,787,956 ordinary shares of 0.1p (2013:
43,787,956 ordinary shares of 0.1p) and the following figures:
Unaudited Unaudited Audited
6 months 6 months year to
to 30 to 30 31
June 2014 June 2013 December
2013
(Loss)/profit attributable to equity shareholders £ (120) (33) 36
'000
(Loss)/earnings per ordinary share (0.27)p (0.08)p 0.08p
Diluted earnings per share is taken as equal to basic earnings per share as the
Group's average share price during the period is lower than the exercise price
and therefore the effect of including share options is anti-dilutive.
5. Income and segmental analysis
Unaudited Unaudited Audited
6 months 6 months year to 31
to 30 to 30 December
June 2014 June 2013 2013
£'000 £'000 £'000
Segment result
Investment activities:
Development costs - (18) (17)
Administrative expenses (33) (29) (71)
(33) (47) (88)
Rental activities:
Net Rental income 50 55 113
Administrative expenses (2) - (2)
48 55 111
Other:
Reversal of impairment of inventories - - 100
- - 100
Operating profit 15 8 123
Finance costs (141) (50) (102)
Fair value adjustment on interest rate swap 6 9 15
Loss before tax (120) (33) 36
Unaudited Unaudited Audited as
as at 30 as at 30 at 31
June 2014 June 2013 December
2013
£'000 £'000 £'000
Segment assets
Investment activities:
Non-current assets 1 1 1
Current assets 12 11 8
13 12 9
Rental:
Current assets - inventories - 2,567 -
Non - current assets - investment property 2,666 - 2,666
Current assets - other 5 8 17
2,671 2,575 2,683
Other:
Current asset - fair value of profit on 614 - -
mezzanine funding arrangement
Current assets - other loan 1,888 - 1,400
Current assets - other 194 - -
2,696 - 1,400
Total assets 5,380 2,587 4,092
Segment liabilities
Investment activities:
Current liabilities 959 859 905
959 859 905
Rental:
Current liabilities 456 347 365
Non-current liabilities 1,191 1,245 1,217
1,647 1,592 1,582
Other:
Current assets - other loan 2,075 - 1,400
2,075 - 1,400
Total liabilities 4,681 2,451 3,887
Total assets less total liabilities 699 136 205
The activity of both the investments and rentals arose wholly in the United
Kingdom. No single customer accounts for more than 10% of revenue.
6. Investment property
Investment
Property
£000
Cost or fair value
At 1 July 2013 -
Transfer from inventories 2,666
At 31 December 2013 2,666
Fair value adjustment -
At 30 June 2014 2,666
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