Half-year Report

26 September 2019

Energiser Investments plc
('Energiser' or the 'Group')

Half-yearly results to 30 June 2019

Energiser announces its half-yearly accounts for the six months to 30 June 2019.                     

Chairman’s statement

I am pleased to present the interim results for Energiser Investments plc (“Energiser”, “the Group” or “the Company”) for the half year ended 30 June 2019. 

Energiser Investments plc is an investment company whose strategy is to invest in quoted and unquoted companies to achieve capital growth. The Company continues to look for opportunities and is currently invested in an AIM listed company, KCR Residential REIT plc (“KCR”).   In March 2018, Energiser acquired 2,435,710 new KCR ordinary shares at 70p a share for a total of £1,704,997.  As at 30 June 2019, the share price of KCR had dropped to 49p per share resulting in the Company’s investment to be written down to £1,193,000.

KCR is an AIM quoted Real Estate Investment Trust (“REIT”) focused on investment in the UK residential Private Rented Sector (“PRS”). KCR invests in whole apartment blocks of studio, one and two-bedroom flats in city centres, close to railway stations and shopping facilities. It focuses on more affordable rental properties for private tenants. 

KCR’s portfolio of properties was valued at £24.6m at 31 December 2018 an increase of £15.1m compared to 31 December 2017.  Its net asset value per share at 31 December 2018 was 70.97p (30 June 2018: 88.17p).  KCR’s board remains positive in its strategy of investing in low to mid-price blocks of apartments for rental.  It has found the reluctance of equity investors to fund companies through the stock market challenging for its own growth plans as it relies on raising equity and debt capital to grow its portfolio and rental income. 

On 12 July 2019 KCR announced some important developments to raise working capital, to provide a pipeline of new acquisitions and to extend its reach into international markets.  The proposals, which were passed at a general meeting of KCR, are expected to provide it with access to capital, international development expertise and refinancing options.  This is expected to accelerate KCR’s objective of providing capital growth and dividend streams to investors.  It will also enable KCR to extend its reach beyond the UK into new residential markets, including Australia, New Zealand and Germany.

Results

The Group had no revenues during the period (2018: Nil) as it had sold its revenue generating investments. The Group made a loss before tax of £172,000 (2018: profit £298,000) which included a provision against the investment in KCR of £122,000.  Administrative expenses decreased from £63,000 to £50,000.

The Group’s net assets decreased to £1.10m (2018: £2.07m) translating into net asset value per share of 0.89p per share (2018:1.67p).

Outlook

We will continue to manage our investment in KCR and will also look for other investment opportunities to achieve capital growth. 

Stephen Wicks

Chairman

Group statement of comprehensive income

		Unaudited 6 months to 30 June 2019	Unaudited 6 months to 30 June 2018	Audited year to 31 December 2018
	Note	£’000	£’000	£’000
Continuing operations
Revenue arising in the course of ordinary activities		—	—	—
Cost of sales		—	—	(1)
Gross loss		—	—	(1)
Administrative expenses		(50)	(63)	(92)
Operating loss	5	(50)	(63)	(93)
Finance income		—	5	6
Other gains and losses		(122)	356	(411)
(Loss)/profit before taxation	5	(172)	298	(498)
(Loss)/profit for the period attributable to shareholders of the Company		(172)	298	(498)
Total comprehensive (loss)/profit		(172)	298	(498)
(Loss)/earnings per share
Basic and diluted (loss)/earnings per share from total and continuing operations	4	(0.14)p	0.24p	(0.40)p

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 as at 30 June 2019	Unaudited as at 30 June 2018	Audited as at 31 December 2018
	Note	£’000	£’000	£’000
ASSETS
Non-current assets
Investments	6	1,193	2,143	1,315
		1,193	2,143	1,315
Current assets
Trade and other receivables		15	44	8
Cash and cash equivalents		163	237	177
		178	281	185
Total assets		1,371	2,424	1,500
LIABILITIES
Current liabilities
Trade and other payables		267	270	190
Deferred tax		—	82	34
		267	352	224
Total liabilities		267	352	224
Net assets		1,104	2,072	1,276
EQUITY
Share capital		2,392	2,392	2,392
Share premium account		7,189	7,189	7,189
Convertible loan		88	88	88
Merger reserve		1,012	1,012	1,012
Retained earnings		(9,577)	(8,609)	(9,405)
Total equity		1,104	2,072	1,276

Group statement of changes in equity

		Share
	Share	premium	Convertible	Merger	Retained	Total
	capital	account	loan	reserve	earnings	equity
	£’000	£’000	£’000	£’000	£’000	£’000
Balance at 1 January 2018	2,392	7,189	88	1,012	(8,907)	1,774
Total comprehensive profit	—	—	—	—	298	298
Balance at 30 June 2018	2,392	7,189	88	1,012	(8,609)	2,072
Total comprehensive loss	—	—	—	—	(796)	(796)
Balance at 31 December 2018	2,392	7,189	88	1,012	(9,405)	1,276
Total comprehensive loss	—	—	—	—	(172)	(172)
Balance at 30 June 2019	2,392	7,189	88	1,012	(9,577)	1,104

Group statement of cash flows

	Unaudited 6 months to 30 June 2019	Unaudited 6 months to 30 June 2018	Audited year to 31 December 2018
	£’000	£’000	£’000
Cash flows from operating activities
(Loss)/profit before taxation	(172)	298	(498)
Adjustments for:
Loss on sale of investment properties	—	—	23
Fair value adjustment for listed investments	122	(356)	390
Interest income	—	(5)	(6)
Changes in working capital:
- (Increase)/decrease in trade and other receivables	(7)	(11)	3
- Increase in trade and other payables	43	52	5
Net cash used in operating activities	(14)	(22)	(83)
Cash flows from investing activities
Interest received	—	—	6
Purchase of investments	—	(1,705)	(1,705)
Net cash used in investing activities	—	(1,705)	(1,699)
Cash flows from financing activities
Interest received	—	5	—
Net cash generated by financing activities	—	5	—
Net decrease in cash and cash equivalents	(14)	(1,722)	(1,782)
Cash and cash equivalents at beginning of period	177	1,959	1,959
Cash and cash equivalents at end of period	163	237	177

1. Nature of operations and general information

The principal activity of the Group is as an investing company investing in quoted and unquoted companies to achieve capital growth.

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 Burnham Yard, London End, Beaconsfield, Buckinghamshire, HP9 2JH.

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 25 September 2019.

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 2018 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 2018, 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 2018. The unaudited interim group statement of financial position for the 6 months ended 30 June 2018 has therefore been restated to reclassify the movement in the fair value in investments from other comprehensive income to fair value through profit or loss in line with the requirements of IFRS 9.

4. (Loss)/earnings per ordinary share

The (loss)/earnings per ordinary share is based on the weighted average number of ordinary shares in issue during the period of 123,912,957 ordinary shares of 0.1p (2018: 123,912,957 ordinary shares of 0.1p) and the following figures:

	Unaudited 6 months to 30 June 2019	Unaudited 6 months to 30 June 2018	Audited year to 31 December 2018
(Loss)/profit attributable to equity shareholders £’000	(172)	298	(498)
(Loss)/earnings per ordinary share	(0.14)p	0.24p	(0.40)p

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 6 months to 30 June 2019	Unaudited 6 months to 30 June 2018	Audited year to 31 December 2018
	£’000	£’000	£’000
Segment result
Investment activities:
Administrative expenses	(50)	(75)	(105)
	(50)	(75)	(105)
Rental activities:
Rental income	—	—	(1)
Administrative expenses	—	12	13
	—	12	12
Operating loss	(50)	(63)	(93)
Finance income	—	5	6
Other gains and losses	(122)	356	(411)
(Loss)/profit before tax	(172)	298	(498)

	Unaudited as at 30 June 2019	Unaudited as at 30 June 2018	Audited as at 31 December 2018
	£’000	£’000	£’000
Segment assets
Investment activities:
Non-current assets	1,193	2,143	1,315
Current assets - other	178	237	185
	1,371	2,380	1,500
Rental activities:
Current assets – other	—	44	—
	—	44	—
Total assets	1,371	2,424	1,500
Segment liabilities
Investment activities:
Current liabilities	267	234	224
	267	234	224
Rental:
Current liabilities	—   2	2	—
	—	2	—
Current liabilities – corporation tax	—34	34	—
Current liabilities – deferred tax	—	82	—
	—116	116	—
Total liabilities	267	352	224
Total assets less total liabilities	1,104	2,072	1,276

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. Investments

During the year ended 31 December 2018 the group acquired 2,435,710 shares in KCR Residential Reit PLC, an AIM listed real estate investment trust who specialise in the acquisition and management of rented residential portfolios in the UK.

	Investments £’000
Cost
At 1 July 2017 and 31 December 2017	—
Additions	1,705
Change in fair value recognised in profit and loss	438
At 30 June 2018	2,143
Fair value movements
Change in fair value recognised in profit and loss	(828)
At 31 December 2018	1,315
Change in fair value recognised in profit and loss	(122)
At 30 June 2019	1,193

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information, please contact:

Energiser Investments plc

John Depasquale            [phone]

Nishith Malde                 [phone]

Cairn Financial Advisers LLP

Jo Turner                       [phone]

Sandy Jamieson