Final Results

RNS Number : 3645K

Fletcher King PLC

14 July 2011

 



FLETCHER KING PLC

Preliminary Results for the Year Ending 30^th April 2011

Highlights

·   Revenue for the year of  £3.175m (2010: £2.832m)

·   Profit before tax and exceptional items of £414,000 (2010:£288,000)

·   Profit for the year of £331,000 (2010: £242,000)

·   Basic and diluted earnings per share of 3.59p (2010: 2.63p)

·   Final dividend of  0.75p per share. An interim dividend of 0.75p per share was paid and therefore the total ordinary dividend for the year will be 1.50p per share (2010: 1.00p)

Commenting on the results, David Fletcher, chairman of Fletcher King plc said:

"The coming year will be challenging and it will not be easy to match the performance of this year.

We have started the new year with a good level of investment sale instructions, the majority of which are in the "difficult to sell" sector.  Rating remains strong but the Banks are lending very little into the sector and our valuation business remains subdued. We are working hard to grow assets under management and we are looking for some growth in investment broking.

This year's results have not been achieved without a considerable amount of very hard work from our Directors, staff and the continuing loyalty of our valued clients and I thank them."

END

For further information, please call:

David Fletcher/ Peter Bailey, Fletcher King           020 7493 8400

James Caithie, Cairn Financial Advisers LLP           020 7148 7900

CHAIRMANS STATEMENT

Results

Revenue for the year was £3.18m (2010: £2.83m) with profit before tax and exceptional items of £414,000 (2010: £288,000). The overall profit for the year attributable to shareholders was £331,000 (2010: £242,000).

The board is proposing a final dividend of 0.75p per share (2010: nil). The final dividend is subject to shareholders' approval at the AGM and will be paid on 29 September 2011 to those shareholders on the register at the close of business on 2 September 2011.  With the interim dividend of 0.75p per share (2010: 1.00p per share) already paid, the total ordinary dividend for the year will amount to 1.50p per share (2010: 1.00p).

The Commercial Property Market

There remains a significant weight of money seeking suitable commercial property investments and the market continues to be strongly polarised between low risk prime property let on long leases to strong covenants together with multi let industrial, which most of the market want to buy, and the remainder.   London and the South East is seen as the most likely area for rental growth and is thus in demand with Central London offices and prime retail now selling at yields at, or marginally below, the previous peak in the market. Elsewhere in the country the market is very patchy.

Rental growth is hard to find outside central London but all is not doom and gloom.  We find, particularly in the industrial properties within the various portfolios we manage, that lease renewals and relettings are taking place throughout the country albeit at rents that are generally lower than those previously paid, and 6-12 month rent free periods are being granted to secure lettings.

Business Overview

The strong performance of our transaction business reported in the Interim Statement continued at a satisfactory but slightly lower rate in the second half and we have started the new year with a good level of sales instructions.

It is still a challenging market in which to acquire properties but we made a significant acquisition in the City for one of our discretionary funds and one or two smaller properties were acquired for clients.  We continue to look for a further acquisition in the City or Mid Town for our SHIPS fund.

Until the level of lending by the Banks increases the market in secondary and tertiary property, which has been traditionally debt financed, is unlikely to improve significantly. Those purchasers seeking prime investments are being frustrated by the lack of supply and may start to look at very good secondary properties later in the year.

I reported last year that our fund management mandates performed well and that has continued.

Meghraj Properties Limited who last year appointed us to manage a portfolio of properties have added to that portfolio during the year.

We have also been appointed to manage six prime office buildings in Mayfair and the City for an off shore European investor.

Despite the difficulties in the economy and the cutbacks we continue to collect 96% of all rents due within three days of the quarter day.  Although bank valuations remain at a very low level our quarterly and annual portfolio valuations continue apace.

Rating has been active this year with some significant reductions achieved for a number of our clients. Our client list continues to expand and we expect the forthcoming year to be good for that part of our business.

Outlook

The coming year will be challenging and it will not be easy to match the performance of this year.

We have started the new year with a good level of investment sale instructions, the majority of which are in the "difficult to sell" sector.  Rating remains strong but the Banks are lending very little into the sector and our valuation business remains subdued. We are working hard to grow assets under management and we are looking for some growth in investment broking.

This year's results have not been achieved without a considerable amount of very hard work from our Directors, staff and the continuing loyalty of our valued clients and I thank them.

DAVID FLETCHER

CHAIRMAN

14 July 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30 April 2011

	Note	2011	2010
		£000	£000
Revenue		3,175	2,832
Employee benefits expense		(1,595)	(1,514)
Depreciation expense		(59)	(73)
Exceptional rates rebate	3	-	118
Other operating expenses		(1,130)	(983)
Operating profit		391	380
Income from investments		13	16
Finance income		10	10
Profit before taxation		414	406
Analysed as:
Profit before taxation and exceptional items		414	288
Exceptional rates rebate		-	118
Profit before taxation		414	406
Taxation		(83)	(164)
Profit for the year		331	242
Other comprehensive income for the year, net of tax		-	-
Total comprehensive income for the year attributable to equity shareholders		331	242
Basic and diluted earnings per share	4	3.59p	2.63p

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 April 2011

	2011	2010
	£000	£000
Assets
Non-current assets
Property, plant and equipment	226	285
Available-for-sale investments	250	250
Deferred tax assets	73	73
	549	608
Current assets
Trade and other receivables	1,064	1,005
Cash and cash equivalents	2,722	1,967
	3,785	2,972
Total assets	4,335	3,580
Liabilities
Current liabilities
Trade and other payables	534	324
Current taxation liabilities	121	117
Other creditors	586	307
	1,241	748
Total liabilities	1,241	748
Shareholders' equity
Share capital	921	921
Share premium	140	140
Profit and Loss reserve	2,033	1,771
Total shareholders' equity	3,094	2,832
Total equity and liabilities	4,335	3,580

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 30 April 2011

	2011	2010
	£000	£000
Cash flows from operating activities
Profit before taxation from continuing operations	414	406
Adjustments for:
Depreciation expense	59	73
Income from investments	(13)	(16)
Finance income	(10)	(10)
Cash flows from operating activities before movement in working capital	450	453
(Increase)/decrease in trade and other receivables	(59)	(106)
Increase/(decrease) in trade and other payables	489	(324)
Cash generated from operations	880	23
Taxation paid	(79)	(27)
Net cash flows from operating activities	801	(4)
Cash flows from investing activities
Finance income	10	10
Income from investments	13	16
Net cash flows from investing activities	23	26
Cash flows from financing activities
Dividends paid to shareholders	(69)	(184)
Net cash flows from financing activities	(69)	(184)
Net increase/(decrease) in cash and cash equivalents	755	(162)
Cash and cash equivalents at start of year	1,967	2,129
Cash and cash equivalents at end of year	2,722	1,967

STATEMENTS OF CHANGES IN EQUITY

CONSOLIDATED	Note	Share capital	Share premium	Profit and loss reserve	TOTAL EQUITY
		£000	£000	£000	£000
Balance at 1 May 2009		921	140	1,713	2,774
Total comprehensive income for the year		-	-	242	242
Equity dividends paid	2	-	-	(184)	(184)
Balance at 30 April 2010		921	140	1,771	2,832
Total comprehensive income for the year		-	-	331	331
Equity dividends paid	2	-	-	(69)	(69)
Balance at 30 April 2011		921	140	2,033	3,094

NOTES

1. Basis of preparation

The financial information set out above, which has been prepared on the basis of the accounting policies as set out in the prior year's accounts, does not comprise the company's financial statements for the year ended 30 April 2011.  While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. Statutory financial statements for the previous financial year ended 30 April 2010 have been delivered to the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain any statement under section 498(2) or (3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis  The auditors have not yet reported on financial statements for the year ended 30 April 2011.

2.  Dividends

Year ended 30 April	2011	2010
	£000	£000
Equity dividends on ordinary shares:
Declared and paid during year
Ordinary final dividend for the year ended 30 April 2010: nil per share (2009: 1.00p)	-	92
Interim dividend for the year ended 30th April 2011: 0.75p  per share (2010: 1.00p)	69	92
	69	184
Proposed ordinary final dividend for the year ended 30 April 2011: 0.75p per share	69

3. Exceptional Items

Year ended 30 April	2011	2010
	£000	£000
Exceptional rates rebate	-	118
	-	118

The Group received a net rates rebate of £118,000 in the year ended 30 April 2010 following a reassessment of rates paid in previous years.

4. Earnings per share

	2011 No	2010 No
Weighted average number of shares for basic and diluted earnings per share	9,209,779	9,209,779
	£000	£000
Earnings for basic and diluted earnings per share	331	242
Basic and diluted earnings per share	3.59p	2.63p

 

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