Final Results

RNS Number : 3665P

Fletcher King PLC

15 July 2010

 



FLETCHER KING PLC

Preliminary Results for the Year Ending 30th April 2010

Highlights

·      Revenue for the year of  £2.832m (2009: £3.130m)

·      Profit before tax, exceptional items and impairments of £288,000 (2009: £414,000)

·      Profit for the year of £242,000 (2009: loss of £432,000)

·      Basic and diluted earnings per share of 2.63p (2009: loss per share of 4.69p)

·      Special interim dividend of 1p per share paid on 26 March 2010. No final dividend is proposed and therefore the total ordinary dividend for the year will be 1p per share (2009: 1p)

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

"The coming year is likely to be challenging. Fund and Asset Management together with Rating is strong. We are also working for a number of new clients and have more transaction business in the pipeline than in the previous two years which will hold us in good stead.

We have managed the business prudently during the downturn, adjusting our overhead as necessary and we have a strong balance sheet.  Our staff have risen to the challenge brilliantly and they are to be congratulated."

END

For further information, please call:

David Fletcher/ Peter Bailey, Fletcher King                     020 7493 8400

James Caithie, Cairn Financial Advisers LLP                   020 7148 7900

CHAIRMAN'S STATEMENT

Results

Revenue for the year was £2.83m (2009 £3.13m) with profit before tax, impairment and exceptional items of £288,000 (2009: £414,000).

The overall profit for the year attributable to equity shareholders was £242,000 (2009: loss of £432,000).

On 26^th March 2010 the company paid a special interim dividend of 1p per share to take the place of a final dividend and therefore the total ordinary dividend for the year is 1p per share (2009 1p per share).

The Commercial Property Market

In my interim statement I commented on the rise in values of certain sectors of the UK commercial property investment market and this has continued, albeit at a slower pace, through the first few months of the current calendar year.

The rise in capital values appears to have been driven almost exclusively by non property fundamentals.  Independent Financial Advisers have directed client money into property funds as a result of very low returns achievable elsewhere and foreign buyers have taken advantage of sterling's weakness. Supply has also been limited and against the demand, prices have risen.

IPD, the property industry index, shows that capital values fell from mid 2007 to mid 2009 by 44%. From that low point the index has risen 14% to the end of April 2010 against a backdrop of generally falling rental values. The current economic outlook gives little hope for a reversal of this trend in the near term.  However Central London office rents, contrary to the general letting market, have stabilised and risen in some locations.

It is still far too early in the life of the new Coalition Government to judge what impact expenditure cuts will have on the economy generally and the property market in particular. The huge inflow of cash into property funds seen earlier in the year has slowed and buyers have become much more selective. We think it likely there will be some easing in values but we do not foresee a serious "double dip".

Outlook

The coming year is likely to be challenging. Fund and Asset Management together with Rating is strong. We are also working for a number of new clients and have more transaction business in the pipeline than in the previous two years which will hold us in good stead.

We have managed the business prudently during the downturn, adjusting our overhead as necessary and we have a strong balance sheet.  Our staff have risen to the challenge brilliantly and they are to be congratulated.

BUSINESS OVERVIEW

The transaction side of our business improved in the second half of the year and we have started the new year with a level of sales instructions that we have not seen for some time.

Acquisition of investment property has continued to be difficult and the sharp rise in values over the last six months has not made matters easier.  However in the coming year we expect to be buying and three of our managed funds have cash to spend.

Our Fund management mandates continue strongly and all the funds under our management are performing well.

Despite comments to the contrary by both the outgoing Labour Government and the banks we see very little sign of lending to the investment market. The majority of transactions currently taking place are therefore by funds who require little or no debt.

We have acquired two significant asset management clients during the second half of the year. Meghraj Properties Limited have appointed us to manage a £350m portfolio spread throughout the United Kingdom.  A significant number of the buildings are service charge properties and from our initial inspection there will be interesting portfolio management opportunities over the coming years.

Secondly, we have been appointed by Rabobank International to manage their 35,000sq.ft office building in the City of London.

The maintenance of income flow is of paramount importance to all of our clients, particularly in times such as this, and despite the tough economic conditions we continue, as we did last year, to collect 96% of all rents due within 3 days of the quarter day. This does not happen without a considerable effort by the management team chasing up late payers.

Our quarterly and annual portfolio revaluations continue to flourish but the volume of bank security valuations remains at a low level due to the reluctance to lend on commercial real estate. There is currently little sign of this situation changing and it will be interesting to see if the change in Government has any effect.

The expansion of our Rating client list, reported in my interim statement, has continued through the second half of the year with a number of new clients signed up for work on the 2010 Rating List and for many we are also appealing their 2005 Assessment.

We are looking forward to a good year and expect that the outstanding 2005 Appeals will be agreed and progress will be being made on the 2010 List.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30 April 2010

		2010	2009
		£000	£000
	Revenue	2,832	3,130
	Employee benefits expense	(1,514)	(1,634)
	Depreciation expense	(73)	(73)
	Exceptional impairment losses	-	(167)
	Exceptional costs on transfer to AIM	-	(68)
	Exceptional rates rebate	118	-
	Other operating expenses	(983)	(1,096)
	Operating profit	380	92
	Impairment of available-for-sale investments	-	(178)
	Income from investments	16	13
	Finance income	10	74
	Profit before taxation	406	1
	Analysed as:
	Profit before taxation, exceptional items and impairments	288	414
	Exceptional impairment losses	-	(167)
	Exceptional costs on transfer to AIM	-	(68)
	Exceptional rates rebate	118	-
	Impairment of available for sale investments	-	(178)
	Profit before taxation	406	1
	Taxation	(164)	42
	Profit for the year from continuing operations	242	43
	Loss for the year from discontinued operations	-	(475)
	Profit/(loss) for the year	242	(432)
	Other comprehensive income for the year, net of tax	-	-
	Total comprehensive income for the year attributable to equity shareholders	242	(432)
	Basic and diluted earnings/(loss) per share
	Continuing operations	2.63p	0.47p
	Discontinued operations	-	(5.16)p
	Total operations	2.63p	(4.69)p

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 April 2010

		2010	2009
		£000	£000
	Assets
	Non-current assets
	Property, plant and equipment	285	358
	Available-for-sale investments	250	250
	Deferred tax assets	73	93
		608	701
	Current assets
	Trade and other receivables	1,005	899
	Cash and cash equivalents	1,967	2,129
		2,972	3,028
	Total assets	3,580	3,729
	Liabilities
	Current liabilities
	Trade and other payables	324	297
	Current taxation liabilities	117	-
	Other creditors	307	658
		748	955
	Non-current liabilities
	Deferred taxation liabilities	-	-
	Total liabilities	748	955
	Shareholders' equity
	Share capital	921	921
	Share premium	140	140
	Profit and Loss reserve	1,771	1,713
	Total shareholders' equity	2,832	2,774
	Total equity and liabilities	3,580	3,729

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 30 April 2010

	2010	2009
	£000	£000
Cash flows from operating activities
Profit before taxation from continuing operations	406	1
Loss before taxation from discontinued operations	-	(389)
Adjustments for:
Depreciation expense	73	82
Impairment of available-for-sale investments	-	178
Exceptional impairment losses	-	167
Income from investments	(16)	(13)
Finance income	(10)	(74)
Cash flows from operating activities before movement in working capital	453	(48)
(Increase)/Decrease in trade and other receivables	(106)	98
Decrease in trade and other payables	(324)	(491)
Decrease in work in progress	-	63
Cash generated from\(used in) operations	23	(378)
Taxation paid	(27)	(136)
Net cash flows from operating activities	(4)	(514)
Cash flows from investing activities
Purchases of equipment	-	(17)
Sale of equipment	-	6
Finance income	10	74
Income from investments	16	13
Disposal of subsidiary undertaking net of cash disposed	-	(45)
Net cash flows from investing activities	26	31
Cash flows from financing activities
Dividends paid to shareholders	(184)	(161)
Net cash flows from financing activities	(184)	(161)
Net decrease in cash and cash equivalents	(162)	(644)
Cash and cash equivalents at start of year	2,129	2,773
Cash and cash equivalents at end of year	1,967	2,129

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Share capital	Share premium	Profit and loss reserve	TOTAL EQUITY
	£000	£000	£000	£000
Balance at 1 May 2008	921	140	2,306	3,367
Total comprehensive income for the year	-	-	(432)	(432)
Equity dividends paid	-	-	(161)	(161)
Balance at 30 April 2009	921	140	1,713	2,774
Total comprehensive income for the year	-	-	242	242
Equity dividends paid	-	-	(184)	(184)
Balance at 30 April 2010	921	140	1,771	2,832

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, subject to the adoption of IAS 1 (revised version - effective January 2009), does not comprise the company's financial statements for the year ended 30 April 2010.  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 2009 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.  The auditors have not yet reported on financial statements for the year ended 30 April 2010, and such financial statements will be finalised on the basis of the figures in this preliminary announcement.

2.  Dividends

Year ended 30 April	2010	2009
	£000	£000
Equity dividends on ordinary shares:
Declared and paid during year
Ordinary final dividend for the year ended 30 April 2009: 1p  per share (2008: 1.75p)	92	161
Interim dividend for the year ended 30th April 2010: 1p  per share (2009: nil)	92	-
	184	161
Proposed ordinary final dividend for the year ended 30 April 2010: £nil per share	-

3. Exceptional Items

Year ended 30 April	2010	2009
	£000	£000
Impairment losses	-	167
Cost of transfer to AIM	-	68
Exceptional rates rebate	(118)	-
	(118)	235

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

Impairment losses in 2009 represent full provision against the outstanding loan payable by FK Howard Limited, a company divested from the group on 19^th December 2008.

The Group transferred from the UK Official List to AIM on 14 October 2008 and incurred exceptional costs of £68,000 on the transaction.

4. Earnings per share

	2010 No	2009 No
Weighted average number of shares for basic and diluted earnings per share	9,209,779	9,209,779
Earnings for basic and diluted earnings per share	£000	£000
Continuing operations	242	43
Discontinued operations	-	(475)
	242	(432)
Basic and diluted earnings/(loss) per share
Continuing operations	2.63p	0.47p
Discontinued operations	-	(5.16)p
Total operations	2.63p	(4.69)p

 

END

 

 

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