Final Results
29 May 2014
Energiser Investments plc
("Energiser" or the "Company")
Final Results for the Year Ended 31 December 2013
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to write my first report to shareholders following my appointment
as Chairman on 4 December 2013.
There has been very little activity in the Company in recent years. Various
corporate transactions were under negotiation which did not proceed, however
they did take up a considerable amount of management time and resource.
Similarly, an investment in a potentially revolutionary new high powered motor
was written off as it became apparent that there were significant flaws in the
concept.
A decision has now been made to focus on the property sector and, in
particular, the provision of mezzanine funding to small, experienced
housebuilders. Since the very difficult period in the economy and the banking
crisis, banks have remained very cautious in their lending policy to smaller
housebuilders and require the developer's own contribution to be injected into
the project prior to the banks' own capital being drawn down. There is
therefore a "gap" in the market for providers of such finance to housebuilders
that are having difficulty securing funding for high quality residential
development opportunities in the South East of England where housing demand is
strongest. I am pleased to report that Energiser, via its subsidiary Cedar
Green Homes Limited, has secured its first opportunity in this field.
The Group has committed to inject up to £2.6m into a development of 12 units
under construction on a spectacular site at Kingswood Park, Surrey. The
development of 9 houses and 3 apartments is expected to generate a gross
development value of over £8.5m.
We have procured funding for this commitment from a number of investors who
will be paid a coupon of 10% on the funds invested. In the current climate of
low returns on bank deposits, this interest rate is an attractive return for
these investors. Their investment is secured by way of a second charge over the
property behind the senior debt provider.
Energiser is entitled to 50% of the net profit of the development including a
"priority return" of £785,000, subject to the development making sufficient
profit, before the developer receives its share of profit. Construction is now
well under way with the first sales expected by the end of the current
financial year.
The Directors are evaluating other such proposals and believe that this new
strategy will provide a substantial revenue stream to the Company and will
re-build shareholders' funds.
RESULTS
Our residential development in Wellingborough generated gross rental income of
£147,000 (2012: £149,000) and, after associated operating costs, resulted in
net rental income of £113,000 (2012: £117,000). £100,000 of the impairment
provision made in previous years against the value of the Wellingborough
properties has been reversed during the year due to the market value of the
portfolio increasing. In addition, the Group wrote off £17,000 (2012: £116,000)
invested in the production of the high powered motor. Administrative expenses
reduced to £73,000 (2012: £84,000) and after finance costs of £102,000 (2012: £
100,000) the profit before and after taxation was £36,000 (2012: loss of £
171,000) resulting in earnings per share of 0.08p (2012: loss of 0.39p).
The Group's net assets have increased to £205,000 (2012: £169,000) representing
net asset value per share of 0.47p (2012: 0.39p). 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.
The Directors do not recommend the payment of a dividend.
The Group's largest shareholder, Stephen Wicks, has agreed to provide further
financial support to the Group for the foreseeable future, if required. As at
the year end there were no loans due to Mr Wicks.
OPERATIONS
Our investment portfolio of 20 freehold houses in Wellingborough,
Northamptonshire remains fully let and in the current financial year the Group
has experienced an increase of approximately 5% in gross rents being achieved.
The properties are continuing to be let on short term tenancies and during the
year they were reclassified as investment property within non-current assets in
the Statement of Financial Position.
The Group continues to hold an investment in EiRx Therapeutics plc which has
been previously fully provided against.
OUTLOOK
As set out above, the provision of development funding for experienced,
undercapitalised housebuilders on prime sites, should enable the Group to
create a substantial profit stream over the coming period and I therefore
believe that the prospects for the Group are beginning to look positive.
Bill Weston
GROUP STRATEGIC REPORT
Results and performance
The results of the group for the year show a profit on ordinary activities
before and after taxation of £36,000 (2012: loss of £171,000). The
shareholders' funds for the Group total £205,000 (2012: £169,000). The
Directors do not recommend the payment of a dividend for the year ended 31
December 2013.
The performance of the Group during 2013 was similar to that of 2012, with
almost 100% occupancy on the rental properties. During the year the Group
advanced £1.4m to a housebuilder under a mezzanine finance agreement. The Group
will be providing up to £2.6m towards the development of 12 units in Surrey and
it is entitled to receive 50% of the net profit of the development including a
priority return of £785,000, subject to the development making sufficient
profit. The funding has been procured from investors at a cost of 10% per
annum.
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.
2013 2012
Return on project investment £113,000 £117,000
Net assets £205,000 £169,000
Net assets per ordinary share 0.47p 0.39p
Nishith Malde
Company Secretary
DIRECTORS' REPORT
Going concern
The financial statements have been prepared on the going concern basis, the
Directors having considered the cash forecasts for the next twelve months from
the date of the approval of these financial statements. In doing so they have
given due regard to the risks and uncertainties affecting the business as set
out in the Directors' Report, the liquidity risk, financial support provided by
Mr S D Wicks, who has undertaken to meet the cash needs of the Group if
required, and the repayment of other loans. On this basis the Directors have a
reasonable expectation that the funds available to the Group are sufficient to
meet the requirements indicated by those forecasts.
Nishith Malde
Company Secretary
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2013
2013 2012
£'000 £'000
Continuing operations
Revenue arising in the course of ordinary activities 147 149
Development costs (17) (116)
Cost of sales 66 (32)
Gross profit 196 1
Administrative expenses (73) (84)
Operating profit/(loss) 123 (83)
Finance costs (102) (100)
Finance income 15 12
Profit/(loss) before taxation 36 (171)
Taxation - -
Profit/(loss) for the year attributable to shareholders 36 (171)
of the Company and total comprehensive income
Earnings/(loss) per share
Basic and diluted earnings/(loss) per share from total 0.08p (0.39)p
and continuing operations
Diluted earnings/(loss) per share is taken as equal to basic earnings/(loss)
per share as the Group'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 2013
2013 2012
£'000 £'000
ASSETS
Non-current assets
Investment property 2,666 -
Financial assets held at fair value through profit or 1 1
loss
2,667 1
Current assets
Inventories - 2,566
Trade and other receivables 1,415 14
Cash and cash equivalents 10 7
1,425 2,587
Total assets 4,092 2,588
LIABILITIES
Current liabilities
Trade and other payables 359 333
Short-term borrowings 2,311 815
2,670 1,148
Non-current liabilities
Long-term borrowings 1,200 1,239
Financial liabilities held at fair value through profit 17 32
or loss
1,217 1,271
Total liabilities 3,887 2,419
Net assets 205 169
EQUITY
Share capital 2,312 2,312
Share premium account 5,747 5,747
Convertible loan 88 88
Merger reserve 1,012 1,012
Retained earnings (8,954) (8,990)
Total equity 205 169
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2013
Share
Share premium Convertible Merger Retained Total
capital account loan reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2012 2,312 5,747 88 1,012 (8,819) 340
Total comprehensive loss - - - - (171) (171)
Balance at 31 December 2,312 5,747 88 1,012 (8,990) 169
2012
Total comprehensive income - - - - 36 36
Balance at 31 December 2,312 5,747 88 1,012 (8,954) 205
2013
GROUP STATEMENT OF CASH FLOWS
For the year ended 31 December 2013
2013 2012
£'000 £'000
Cash flows from operating activities
Profit/(loss) before and after taxation 36 (171)
Adjustments for:
Fair value gain on financial liabilities recognised in (15) (12)
profit or loss
Interest expense 102 100
Increase in trade and other receivables (1) -
(Decrease) / increase in trade payables (23) 22
Reversal of impairment of inventories (100) -
Increase in inventories - (16)
Net cash used in operating activities (1) (77)
Cash flows from investing activities
Mezzanine finance facility issued (1,400) -
Net cash used in investing activities (1,400) -
Cash flows from financing activities
Proceeds from borrowings 1,496 71
Re-payment of borrowings (39) (31)
Interest paid (53) (67)
Net cash generated by / (used in) financing 1,404 (27)
activities
Net increase / (decrease) in cash and cash 3 (104)
equivalents
Cash and cash equivalents at beginning of period 7 111
Cash and cash equivalents at end of period 10 7
Note:
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2013 or 2012 but is derived
from those accounts. Statutory accounts for 2012 have been delivered to the
registrar of companies, and those for 2013 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 2012 or 2013.
The AGM will be held at 2 Anglo Office Park, 67 White Lion Road, Amersham,
Buckinghamshire, HP7 9FB at 11.00 am on 30 June 2014.
The Company's Annual Report and Accounts 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
Nishith Malde +44 (0) 1494 762450
Cairn Financial Advisers LLP
Jo Turner +44 (0) 20 7148 7900
Friday, 10th January 2025
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