Final Results

RNS Number : 4653L

Gresham House PLC

28 April 2015

 

28 April 2015

Gresham House plc ("Gresham House" or "the Company")

(AIM: GHE)

AUDITED RESULTS FOR YEAR ENDED 31 DECEMBER 2014

IN-LINE WITH NEW MANAGEMENT'S EXPECTATIONS, GRESHAM HOUSE IS NOW WELL POSITIONED FOR GROWTH AS A SPECIALIST ASSET MANAGER

Highlights

§ Results cover a period of transition for Gresham House following the successful £10.6m (net) working capital fund raise in December 2014 and admission to AIM  

§ Experienced new management team installed

§ Trading losses halve to £0.6m (£1.5m 2013), NAV at 31 December 2014: 298p (2013: 378.5p)

§ Gresham House now has a clear mandate to develop as a specialist asset manager, focused on shareholder value creation through growth in profitability and AUM both organically and through acquisitions

§ Appraisal of acquisition deal flow is in progress

§ Gresham House will execute this new strategy building on 3 pillars:

§ Philosophy - A disciplined Private Equity process based upon a value investment philosophy

§ People - Team of highly capable investment and business managers, including an Advisory Group of respected industrialists, investors and financiers

§ Platform - Product development, distribution and structured discretionary co-investment

§ Graham Bird joins the Gresham House team as Head of Strategic Investments in June 2015, having previously occupied the same role successfully at SVG Investment Managers

Tony Dalwood, CEO of Gresham House, comments:

"Gresham House is a quoted entity with a clear strategy for growth and alignment of management interests with shareholders. We have started the journey to evolve the Company, both organically and through acquisitions, into a specialist asset manager.  There is a clear market opportunity to develop specialist and illiquid asset management strategies to address demand for long-term and superior investment returns.  Gresham House has put together a highly capable team to succeed in this area and we look forward to reporting as we implement the strategy."

For further enquiries, please contact:

Gresham House plc
Tony Dalwood, Chief Executive Officer	020 3837 6272
Duncan Abbot, Finance Director	020 3837 6271
Westhouse Securities Ltd	020 7601 6100
Robert Finlay
Richard Johnson
Montfort Communications, PR Adviser
Gay Collins	0203 770 7906
Rory King	07917 086 227

 

Website: www.greshamhouse.com

Disclaimers

This announcement does not constitute an invitation to underwrite, subscribe for, or otherwise acquire or dispose of any Gresham House plc shares or other securities. This announcement contains certain forward-looking statements with respect to the financial condition, results, operations and businesses of Gresham House plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

Financial calendar

Report & Accounts posted to shareholders

and available on Company website                                                    1 May 2015

Annual General Meeting                                                                      25 June 2015

Registered office 

5 New Street Square London EC4A 3TW

CHAIRMAN'S STATEMENT

It is a great pleasure to address our existing shareholders and new investors as the new Chairman of this long established company.

A new and exciting journey for Gresham House lies ahead.  We are seeking to compete and grow in a sophisticated and diverse market, setting ourselves the goal of establishing a presence as a specialist asset manager focused on illiquid and differentiated assets, carving out our own niche within the asset management industry.

This set of results covers a period of transition for Gresham House.

The new management team took responsibility at the beginning of December 2014 and the results reflect the efforts of the outgoing management team in stewarding the assets of the Company as detailed negotiations with the new team were taking place. Gresham House was first listed in 1950 and, after becoming an investment trust on the full market of the London Stock Exchange in 1966, the Company joined the Alternative Investment Market of the London Stock Exchange on 1 December 2014.

This set of accounts refers to the history of the Company in 2014 but we have taken the opportunity in the various reports herein to point to the future direction of the Company.

As existing shareholders know, it had been the intention of the directors of the Company to liquidate the Company's assets and return the proceeds to shareholders. Following approval at a General Meeting of shareholders on 31 October 2014, it was agreed that the Company should take a change of direction.

I am delighted to chair the new Board of executive and non-executive directors, who bring a wealth of experience to the Company. 

We have assembled a team of people with experience and skills in developing and growing asset management businesses. A cash injection of £10.6m (net) as well as the anticipated proceeds from the existing assets positions the business well. The journey will aim to address a growing market opportunity for co-investment from family offices and other professional clients and we set about that journey with enthusiasm and confidence.

I would like to put on record the thanks from the new management team, led by Anthony (Tony) Dalwood, your CEO, for the gracious and cooperative way in which the handover from the previous management was conducted. I would also like to thank the former directors led by Chairman Tony Ebel, Brian Hallett, John Lorimer and Rosemary Chopin-John.  I am pleased that Tony, Brian and John will continue to work with us as consultants in respect of the legacy assets and that Richard Chadwick will continue as non-executive director as the new team establish themselves. In keeping with the experienced backgrounds of the new executive team, we welcome Peter Moon as senior independent non-executive, who brings additional investment and business expertise on to the board.

2014 was a year of change for Gresham House, 2015 will be a year of even greater change.  In this report, you will find a commentary from Tony Dalwood which deals with our future hopes and expectations for the business as well as a Strategic Report where we comment on the main events and drivers that influenced the outcome for the year ended 31 December 2014.

The team is seeing considerable deal flow and already making progress. I look forward to reporting future developments to you in due course.

Anthony Townsend

Chairman

27 April 2015 

CHIEF EXECUTIVE'S REPORT

It is a privilege to be writing to you as your new Chief Executive. Gresham House has a very long history and tradition; now, with a new and experienced management team at the helm, the Company will address and profit from a growing market opportunity within the differentiated or illiquid areas of asset management.

I am excited to be working with a Chairman of Anthony Townsend's calibre. Anthony brings to this new role a wealth of experience, an extensive network and a deep knowledge of our industry.

Your new team took responsibility in December, the final month of the year to which these accounts apply, and as such the "new journey" begins from 2015.

The December 2014 fundraising and move to the Alternative Investment Market of the London Stock Exchange ("AIM") raised £10.6m (net of expenses) from new shareholders including established institutions, family offices and other investors. This has provided the working capital that will enable us to grow the business organically and through targeted acquisitions. The decision to move to AIM was based on that market being more appropriate for the size of the Company at this stage and because it provides a suitable environment in which to implement our new strategy and investment policy; we can also appeal to a wider investor base that may not be able to invest in authorised investment trusts. Our AIM listing gives us the flexibility and the currency of publicly quoted equity that will be useful for future growth.

The new management team, Investment Committee and Advisory Group are now also significant shareholders, aligned with the long term objective of creating shareholder value.

Gresham House has, since incorporation in 1857, been primarily focussed on asset value growth. We are now commencing a journey to evolve the Company into a specialist asset manager, based on a long term investment philosophy and disciplined process with capable people at the core. In summary, "traditional values, modern methods".

The 2008/2009 global financial crisis led to investors and limited partners reappraising investment strategies and vehicle structures, with particular attention on "blind pool" and long lock up vehicles. Investors are increasingly demanding more transparency, discretion and improved service levels, alongside a sharper focus on fees and alignment with their asset manager. This has resulted in a substantial increase in the desire for co-investment opportunities. The sourcing, appraising, execution and management of such opportunities is not always something family offices and institutions are able to do, despite wanting to. Gresham House will position itself to address this growing market for investors seeking superior longer term returns through illiquid or differentiated strategies, whilst also facilitating co-investment demand where appropriate.

We are establishing the building blocks to develop a sustainable long term asset management business and to use the balance sheet with a merchant banking style approach, based on private equity disciplines, to determine capital allocation. We will target shareholder value growth through increasing assets under management and a focus on profitability.

The Company will have three core pillars to support its growth. Firstly, philosophy:  disciplined Private Equity process based upon a value investment philosophy. Secondly, people: a team of highly capable investment and business managers, including an Advisory Group of respected industrialists, investors and financiers. Thirdly, platform: product development, distribution and structured discretionary co-investment.

The results for the year ended 31 December 2014 which are in line with management expectations are discussed in full in the Strategic Report. The future Gresham House will be focussed on growing profitability, performance fees and assets under management. However, the historic results show the Group trading result for the year ended 31 December 2014 as a loss of £615,000 against a loss of £1,503,000 in 2013. Net assets as at 31 December 2014 were £27.8m (2013: £20.3m) whilst net asset value per share, reflecting in part the increased number of shares in issue following completion of the placing in December 2014,  has decreased in the year to 31 December 2014 to 298.0p from 378.5p per share at 31 December 2013 (331.7p as at 30 June 2014).

Since the beginning of December, the new management team has implemented its own 90 day plan to initiate the new strategy and has established an office in Austin Friars in the City of London.

An exercise has been commenced to review the Group structure. Gresham House had developed a complex group structure consisting of a number of special purpose vehicles through which it held its property assets and associated finance.  The idea is to simplify the structure and utilise whatever tax Iosses are available.

The Capital Reduction that was approved by shareholders at the General Meeting has been approved by the High Court with the consequence that the Share Premium Account can be utilised as part of the Company's general revenue reserves and be available for share buy-backs and dividend distribution in the future.

We have submitted an application to the Financial Conduct Authority for authorisation of our newly formed subsidiary, Gresham House Asset Management Limited.

On the people front we have also been active.  Gresham House has a long investment history and a crucial component of the future long term success will be its capital allocation decisions.  Accordingly, Michael Phillips and I are pleased to have established an experienced Investment Committee which includes Rupert Robinson, former CEO and CIO of Schroder Private Bank, Bruce Carnegie Brown, currently Chairman of Aon (UK) and Moneysupermarket.com plc and formerly of 3i QPE and Matthew Peacock, Managing Partner of Hanover Investors.

We are in the process of establishing an Advisory Group to support the long term development of the business, including appraisal, deal flow and strategy. We look forward to welcoming a limited number of very experienced and successful individuals into the Gresham House "family" and will say more on this in due course.

I am particularly pleased to announce that my former colleague Graham Bird will be joining as Head of Strategic Investments in June. Graham occupied the same role at SVG Investment Managers, and was an important member of the team, alongside me, that launched the SVG 'Strategic Public Equity' products which included Strategic Equity Capital plc. We anticipate developing this area of Gresham House through an investment vehicle as a significant step towards long term shareholder value creation.  We have commenced work towards launching this investment platform which will apply disciplined private equity techniques in the public market, and we are developing the offering in discussion with potential investors.

We have also been busy with the existing portfolio of assets, of which the vast majority is represented by property (Southern Gateway in Speke and a large plot of land at Newton-le-Willows) and an investment in SpaceandPeople plc (AIM quoted). We are looking at ways to optimise the returns we can expect from our assets and have identified some areas where the new management team can add value at the margin whilst we appraise how to maximise the value of these investments.

We are pleased to report that in respect of the sale of the site at Newton-le-Willows to Persimmon Homes, although it has taken longer than the previous management anticipated, we are progressing towards completion. Documentation of the s.106 planning agreements is now taking place and this should then lead to the local authority giving detailed planning consent. As is standard procedure, there will then be a 6 week period during which the decision is subject to judicial review (we are not aware of any objections to the planning application) and directly thereafter we expect Persimmon to complete. Completion will trigger the initial cash receipt and the subsequent receipts agreed in the contract. Once the sale of the residential element of the Newton-le-Willows site has completed, we will look to market the retail element in earnest.

Since the year-end, the Attila contract has been signed with Cala Homes in Edinburgh, as a result of which initial cash proceeds of £335k are expected imminently. We will then receive two further instalments of capital and interest in April 2016 and October 2016 of £651k and £605k.  In addition, further positive developments include, at Memorial Holdings the signing of a significant contract with the London Borough of Tower Hamlets to provide cemetery places over the coming years and for, SpaceandPeople plc, an improvement in the share price.

The landlord's improvements that we are committed to at Southern Gateway have now commenced. The Group has reached an agreement with the Co-op to extend the Group's existing £3.278m loan facility on unchanged terms. The Co-op has also agreed to advance a further £0.372m that will be applied to finance capital expenditure to enhance the property. The enlarged facility will run for two years from drawdown.

The financial markets in the UK and US are touching new highs and headline valuations do not appear to offer attractive value, particularly when we may well be towards the peak of the corporate return on the equity cycle. However, the aggregate headline metrics do mask significant valuation opportunities. This is the case currently whereby the unprecedented interest rate policy and search for yield has meant various areas are less highly valued. When taken together with the long-term structural growth in demand for alternative and specialist asset management product and client service, Gresham House is attractively positioned.

It has been a year of major change for Gresham House and I feel excited about the future.  Gresham House is a quoted entity now consisting of approximately £28m of net assets, including c. £11m of cash plus properties in realisation, with a clear strategy for growth and alignment of management interests with shareholders. We have already seen a significant number of opportunities that could lead to acquisitions that we continue to explore and the journey is well underway for the new management team to address the market opportunity both organically and through selective acquisitions.

Anthony Dalwood

Chief Executive Officer

27 April 2015

STRATEGIC REPORT

This report has been prepared by the directors in accordance with the requirements of section 414 of the Companies Act 2006. The purpose of this report is to inform shareholders about how the Company fared during the year ended 31 December 2014.

On 31 October 2014, shareholders of the Company approved a change of direction for the Company. In December 2014 Gresham House ceased being an Authorised Investment Trust, delisted from the Official List and was admitted to the Alternative Investment Market of the London Stock Exchange and adopted a new investing policy.

The majority of the board of directors resigned and a new team of directors took office with effect from 1 December 2014.  Further details are set out in the Report of the Directors.

The Company raised £10.6 million net of expenses, pursuant to the placing of 3,973,510 new Ordinary Shares at 286.9 pence per share and the subscription for the 850,000 unquoted supporter warrants by various members of the incoming management team.

The information covers the year under review and the new policies the Company has adopted following the October 2014 General Meeting.

Investment objective

The directors intend to develop the Company as a quoted platform principally for the investment in, and the investment management of, relatively differentiated, specialist or illiquid assets in order to generate superior risk adjusted returns for shareholders over the longer term. Returns are expected to be principally through capital growth. In addition the directors intend to develop an asset management business, either organically or through one or more acquisitions.

Investing policy

Gresham House plc will seek to use the expertise and experience of its new board of directors and members of the Investment Committee to invest according to a robust private equity-style "value" investment philosophy. The Company's investing policy is to invest in assets that will typically have a number of the following characteristics:

-     an illiquidity discount;

-     a minimum target rate of return of 15 per cent;

-     cash generative (or expected to generate cash within a reasonable investment horizon);

-     relatively differentiated, specialist or illiquid;

-     attractive management track records;

-     potential for superior risk adjusted returns;

-     potential for liquidity or exit within an identified time frame;

-     potential for the Company to have a competitive advantage; and/or

-     potential for the Company to add incremental value to an investment.

Investments may be either passive or active and the Company may make investments directly or indirectly (including through any asset management business, special purpose vehicle or underlying fund) and for cash or share consideration. In particular the Company may:

-     invest in and take controlling or non-controlling stakes in publically and/or privately held companies (primarily in equity and related instruments) and also in convertible or non-convertible debt instruments;

-     set up and potentially co-invest in funds including cornerstone investments in specialist funds on preferred terms which may include lower management fees; and

-     enter into derivative contracts (including but not limited to currency hedging, or other portfolio risk management techniques).

A majority of the direct investments made by the Company will be in securities of small and medium sized companies. Initial potential target areas may include small public (less than £250 million market capitalisation) and private companies.

The Company will not invest more than 35 per cent of the Group's gross assets, at the time when the investment is made, in securities issued by any single company other than in a single collective investment undertaking or fund structure. Where such an investment is made in a single collective investment undertaking, due regard will be paid to the concentration of risk that such an investment may entail. The investment will only be made after the Investment Committee is convinced that the risk/return relationship is acceptable.

The board of directors will consider investment in a number of business areas, particularly those sectors in which the board of directors collectively believes that it and/or members of the Investment Committee has the necessary expertise and experience to be able to manage the opportunity.

Investments may be made in any country globally.

The Company has no borrowing limits.

A typical direct investment (other than in connection with the development of an asset management business or an investment in a fund) will be expected to have a holding period of between three to five years, but may be shorter or longer, as appropriate, to develop realisable intrinsic value in order to maximise shareholder value.

The directors' initial intention is to re-invest profits into the Company rather than paying dividends and shareholder returns are likely to be through capital appreciation. However the directors may pay dividends in accordance with any alternative dividend policy that they may adopt from time to time in order to maximise shareholder value over the longer term.

Any material change in the Investing policy will require prior shareholder approval in accordance with the AIM Rules for Companies.

Whilst the Company now operates as an investing company, the directors intend to develop an asset management business, either organically or through one or more acquisitions. The development of such an asset management business may lead to the Company ceasing to be an investing company (as defined in the AIM Rules for Companies) and instead become a trading company (i.e. it would become a company which operates an asset management business with some direct and indirect investments). The key expected consequences of such a development would be as follows:

-     NAV per share would cease to be an appropriate performance indicator;

-     the Company may acquire businesses where the acquisition involves recognising purchased goodwill and other intangible assets, which may have to be amortised. Such amortisation would have a negative impact on the Company's balance sheet, despite such acquisitions being made in anticipation of contributing in time to the Company's earnings;

-     the Company's Standard Industrial Classification may change. This would, in turn, alter the way in which it is classified for various statistical and analytical purposes and may limit the ability of some investors to hold the Company's shares where the investors' investment mandates are specific as to the type of share they are able to hold; and

-     the new investing policy would cease to be applicable.

The Group continues to hold investments in commercial properties and will invest further but only where this enhances or protects the value of existing investments. As any of these assets are realised the proceeds of realisation will be redeployed in accordance with the investing policy and/or the development of an asset management business.

Performance during the year

Up until 1 December 2014 the previous board continued to focus on maximising shareholder returns by an orderly realisation of the Group's assets, including the sale of the majority of the site at Newton-le-Willows to Persimmon Homes Limited for £7.43m conditional upon satisfactory detailed planning permission being obtained (which is still ongoing) and the sale of the six acre development site in Knowsley for £416,000 in May 2014.  In addition the value of the property known as Southern Gateway in Speke, Liverpool was significantly enhanced by the letting of Wellington House for a ten year period in October 2014.

Since that date the new Board has been seeking suitable investment opportunities in accordance with its investment objective.

The Group trading result for the year ended 31 December 2014 was a loss of £615,000 against a loss of £1,503,000 in 2013. 

The comparison between both years is as follows:

		2014		2013
		£'000		£'000
Rental income		858		999
Dividend and investment income		248		268
Other income		66		76
Property outgoings		(516)		(1,243)
Administration overheads		(1,062)		(846)
Finance costs		(209)		(757)
Net trading loss		(615)		(1,503)

The significant variances between the two years are as follows:-

The decrease in rental income was as a result of (i) the sale of Northern Gateway in late 2013 and (ii) reduced income from the site at Newton-le-Willows as tenants left the site making it available for development, offset by an increase in rental income of £80,000 at Southern Gateway.

The significant reduction in property outgoings of £727,000 over the year ended 31 December 2013 was principally due to (i) a reduction of costs of £423,000 on the development site at Knowsley, (ii) a reduction of £158,000 in legal and professional fees incurred and (iii) a reduction in other property related costs amounting to £100,000.

Administration costs have remained overall fairly constant with the previous year with the exception of the inclusion in 2014 of £255,000 in respect of share based payments following the issue of supporter warrants on 1 December 2014.

There has been a substantial decrease in finance costs as a result of bank borrowings being significantly reduced during the year ended 31 December 2013.

Net asset value

The net asset value per share ("NAV") has decreased in the year to 31 December 2014 to 298.0p from 378.5p per share at 31 December 2013 (331.7p as at 30 June 2014).

This decrease in NAV is due to the net trading loss of £1,293,000, the revaluation deficit on investment property of £523,000 and the loss on investments held at fair value of £2,188,000. The NAV was also diluted by the issue of 3,973,510 new ordinary shares as part of the fund raising which completed in December 2014.

Property portfolio

The property portfolio consists of the property in Speke, Liverpool, known as Southern Gateway, and the site at Newton-le-Willows where, as previously reported, contracts were exchanged with Persimmon Homes Limited on 29 April 2014 for the sale of the majority of the site for £7.43m plus overage conditional upon Persimmon obtaining satisfactory detailed planning permission. In order to take into account the extended payment terms over a period of 42 months from completion this asset has been valued in the accounts at a discounted amount of £6.8m.

At Speke we continue with our strategy to maximise income over the short term with a view to selling thereafter. As reported above the value of the site has increased significantly during the year from £5.35m to £7.25m, primarily as a result of increased lettings.

Year-end valuations are overall virtually the same at £16.675m as at 31 December 2014 against £16.7m as at 31 December 2013 and £16.35m as at 30 June 2014 as confirmed on 28 November 2014 at the time of the placing and admission to AIM. However there has been significant movement between the two sites with the value of Southern Gateway increasing by £1.9m and the value of Newton-le-Willows decreasing by a similar sum primarily as a result of the poor backdrop on food retail over the Christmas period and into this current year impacting the valuation of the retail element of the site.

Securities portfolio

At 31 December 2014 the value of the investment portfolio decreased by £2,204,000 as a result of net disposals of £19,000 and net realised and unrealised losses of £2,185,000 reflecting the significant fall in the value of our investment in SpaceandPeople plc from £2,805,000 as at 31 December 2013 to £928,000 as at 31 December 2014.  Since the year end however the value of this investment has increased and, as at 24 April 2015, was valued at £1,237,500.The value of the securities portfolio as at 31 December 2014 amounted to £2,955,000 with the principal constituents continuing to be our investments in SpaceandPeople plc (see above), Attila (BR) Ltd (valued at £945,000 at year end compared with £935,000 as at 31 December 2013), Kemnal Investments Ltd (valued at £466,000 for both 31 December 2014 and 2013) and Memorial Holdings Limited (the value of which has decreased by £169,000 to £441,000 as at year end as a result of trading losses incurred during the year).

Borrowings and cash at bank

Loans at 31 December 2014 amounted to £3,278,000 against £3,746,000 at 31 December 2013. The loan is from the Co-operative Bank and is secured against the property portfolio. This represents a loan to value of 20% against the overall property investments. The Co-op loan was informally extended by the bank until 31 March 2015 .The Group has reached an agreement with the Co-op to extend the group's existing £3.278m loan facility on unchanged terms. The Co-op has also agreed to advance a further £0.372m that will be applied to finance capital expenditure to enhance the property at Southern Gateway, Speke, Liverpool. The enlarged facility will run for two years from drawdown.

Cash in hand at 31 December 2014 has increased from £1.625m at 31 December 2013 to £11.209m at 31 December 2014 following the placing of new ordinary shares and issue of supporter warrants during the year.

Key performance indicators

The Board considers the main key performance indicator applicable to the Group to be net asset value per share ("NAV"). As at 31 December 2014, the NAV was 298.0p (2013: 378.5p).  The main non-financial KPI is considered to be the amount of vacant space within the property portfolio.  As at 31 December 2014 this had reduced significantly to 75,980 sq. ft. representing 20.1% of the total available (2013: 157,657 sq. ft. and 34.9%), the percentage decrease being principally as a result of additional lettings at Southern Gateway.

The above KPIs will cease to be relevant in future years as the Company transitions from an investing company (with a heavy property bias) to an asset management operating company. In future, it is likely that the KPIs will be guided by Earnings per Share, other profitability metrics and Assets under Management. In the year under review, however, there are no meaningful comparators to discuss.

Principal risks, risk management and regulatory environment

The Board believes that the principal risks faced by the Group in the year-ended 31 December 2014 were:

Economic risk

Events such as unfavourable economic conditions, industry conditions, competition, changes in law, political events and trends could affect trading conditions and consequently (i) the Company's investment portfolio, particularly the value of smaller company investments, and (ii) the value of the property investments. In addition, negative economic conditions might also have an adverse effect on the Group's rental revenues (either due to tenant defaults, unlet properties or decreasing rental values) and diminish its ability to dispose of properties (either at acceptable values or at all) and its available cash.

Regulatory

The Company is required to comply with the Companies Act 2006, the AIM Rules for Companies and International Financial Reporting Standards. A breach of any of these might lead to a suspension of the Company's Stock Exchange listing, financial penalties or a qualified audit report. The property market is significantly dependent upon changes in relevant areas of law or their application and interpretation by the competent authorities, including but not limited to, planning, lease and tax laws and practices which cannot be reasonably foreseen. A significant part of the site at Newton-le-Willows owned by the Group has been sold to Persimmon conditional upon satisfactory planning permission being granted. If such is not obtained then the transaction will not proceed.

After the year-end, application has been made to the Financial Conduct Authority ("FCA") to seek regulatory authorisation for the Group's new subsidiary, Gresham House Asset Management Limited ("GHAM"). Once regulated, GHAM will have to comply with the rules and principles of FCA. A breach of any of these regulations might limit the Company's ability to develop as an asset management business as well as expose it to fines and other penalties.

Key person risk

The future development of the Company will be highly reliant on the ability of a small number of people to deliver the new investment policy.

Financial and operating risk

Inadequate controls may lead to misappropriation of assets, inappropriate accounting policies could lead to misreporting or breaches of regulations.

Market price risk

There will always be uncertainty regarding future prices of investments held within the Company's portfolio, particularly where the investment is unquoted.

Market liquidity risk

Shareholders may find it difficult to sell their shares in the Company at a price which is near to the net asset value.

Interest rate risk

The Group's investments and net revenue may be affected by interest rate movements.

Credit risk

Any realisation of property assets is likely to be affected by the payment terms currently being adopted by residential developers which could involve payments being made in staged payments. In particular, the sale proceeds from Persimmon are payable in four instalments over a period of 42 months from completion which exposes the Group to a credit risk with respect to the future financial standing of Persimmon. In addition the repayment of loan stock by Attila (BR) Ltd is anticipated to be over a period of 18 months from the date of the sale of its site in Edinburgh to Cala Management Limited which again exposes the Group to a similar risk.

Property - tenant associated risk

Any non-renewal of existing leases or early termination by existing tenants could result in a significant decrease in the Group's net rental income and the Group may not be able to secure a replacement tenant on favourable terms, or at all, for the vacant space. If the Group's net rental declines it would have less cash available to service and repay its debts and the value of its properties could decline further. In addition the Group is exposed to the credit risk of its tenants and the creditworthiness of its tenants can decline over the short term. This may result in less rental income, delayed payments and/or costs or delay in taking enforcement or repossession action.

Property - illiquidity risk.

Properties of the type included in the Group's portfolio can be illiquid assets for reasons such as properties being tailored to tenants' specific requirements and reduced demand for property on the market. This may also affect the Group's ability to vary its portfolio, dispose of or liquidate part of its portfolio on a timely basis or at a satisfactory price, or to acquire other properties, in response to changes in general economic conditions, property market conditions or other conditions.

Securities - asset and liquidity risk

The Group invests predominately in smaller company securities. Individual smaller companies can be expected, inter alia, in comparison to larger companies, to have less mature businesses, less depth of management and a higher risk profile. As a result they may find it difficult to secure financing and/or overcome periods of economic slowdown. As they are less likely to have the financial resources of larger companies they may also find it more difficult to retain key skilled individuals. Any of these events may have a material adverse effect on the performance of that smaller company and may make it difficult or impossible for such a company to repay its debts or lead it to reduce dividends which could reduce the Company's cash resources and ability to pay dividends. A significant portion of the Groups securities portfolio consists of unquoted investments for which there might not be any market price - or even any market.. The Group may therefore not be able to dispose of such investments for an acceptable price or a specific time.

In addition a portion of the Group's securities portfolio is admitted to trading on AIM and the ISDX Growth Market. The typically smaller market capitalisation of companies admitted on these markets can make the market in their securities very illiquid and/or the Group may accumulate investment positions that represent a significant multiple of the normal trading volumes of an investment which may make it difficult for the Group to sell its investments.

The Board seeks to mitigate these and other perceived risks by setting policies and by undertaking a risk assessment at least annually. Further details can be found in note 21.

For and on behalf of the Board

Anthony Dalwood

Chief Executive Officer

27 April 2015

FINANCIAL TABLES

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

				2014		2013
Notes						Restated
				£'000		£'000
Income:	2
Rental income				858		999
Dividend and interest income				248		268
Other operating income				66		76
Total Income				1,172		1,343
Operating costs:	3
Property outgoings				(516)		(1,243)
Administrative overheads				(1,062)		(846)
Finance costs	4			(209)		(757)
Net trading loss				(615)		(1,503)
Exceptional items	*			(678)		-
Net loss after exceptional items				(1,293)		(1,503)
Gains & losses on investments:
Revaluation deficit on investment property	9			(523)		(1,612)
Fair value movement of investments	8			(2,188)		(468)
Profit on disposal of investment properties	9			-		173
Profit/(loss) on disposal of investments	8			3		(36)
Group operating loss before taxation				(4,001)		(3,446)
Taxation	5			-		-
Loss and total comprehensive income				(4,001)		(3,446)
Attributable to:
Equity holders of the parent				(4,753)		(3,497)
Non-controlling interest				752		51
				(4,001)		(3,446)
Basic and diluted loss per ordinary share (pence)	6			(83.3)		(65.1)

* Exceptional items relate to professional fees incurred in respect of the proposals which took effect from 1 December 2014

STATEMENTS OF CHANGES IN EQUITY

Group
YEAR ENDED 31 DECEMBER 2014
Notes			Ordinary share capital		Share premium				Share warrant reserve		Retained reserves		Equity attributable to equity share-holders		Non-controlling interest		Total equity
			£'000			£'000			£'000		£'000		£'000		£'000		£'000
Balance as at 31 December 2013			1,342		2,302				-		16,680		20,324		-		20,324
Loss for the period being total  comprehensive income for the year			-		-				-		(4,753)		(4,753)		752		(4,001)
Transfer of non-controlling interest deficit			-			-			-		752		752		(752)		-
Issue of shares			994			10,206			-		-		11,200		-		11,200
Share based payments			-			-			-		255		255		-		255
Share warrants issued			-			-			64		-		64		-		64
Balance at 31 December 2014			2,336			12,508			64		12,934		27,842		-		27,842
YEAR ENDED 31 DECEMBER 2013 (Restated)
Notes					Ordinary share capital			Share premium			Retained reserves		Equity attributable to equity share-holders		Non-controlling interest		Total equity
				£'000			£'000			£'000		£'000		£'000		£'000
Balance as at 31 December 2012					1,342			2,302			20,260		23,904		-		23,904
Loss for the period being total  comprehensive income for the year					-			-			(3,497)		(3,497)		51		(3,446)
Transfer of non-controlling interest deficit					-			-			51		51		(51)		-
Ordinary dividends paid	7				-			-			(134)		(134)		-		(134)
Balance at 31 December 2013					1,342			2,302			16,680		20,324		-		20,324

Company
YEAR ENDED 31 DECEMBER 2014
				Ordinary share capital		Share premium		Share warrant reserve	Retained reserves		Total equity
				£'000		£'000		£'000	£'000		£'000
Balance as at 31 December 2013				1,342		2,302		-	10,377		14,021
Loss for the period being total  comprehensive income for the year				-		-		-	(3,686)		(3,686)
Issue of shares				994		10,206		-	-		11,200
Share based payments				-		-		-	255		255
Share warrants issued				-		-		64	-		64
Balance at 31 December 2014				2,336		12,508		64	6,946		21,854
YEAR ENDED 31 DECEMBER 2013 (Restated)
					Ordinary share capital		Share premium	Retained reserves		Total equity
					£'000		£'000	£'000		£'000
Balance as at 31 December 2012					1,342		2,302	12,111		15,755
Loss for the period being total  comprehensive income for the year					-		-	(1,600)		(1,600)
Ordinary dividends paid			7		-		-	(134)		(134)
Balance at 31 December 2013					1,342		2,302	10,377		14,021

 

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014

			Group				Company
		Notes	2014		2013		2014		2013
Assets			£'000		Restated £'000		£'000		Restated £'000
Non-current assets
	Investments - securities	8	2,955		5,159		2,955		5,159
	Property investments	9	9,865		9,270		-		-
	Other investments	10	-		-		322		322
			12,820		14,429		3,277		5,481
Current assets
	Trade and other receivables		84		358		-		-
	Accrued income and prepaid expenses		913		639		519		370
	Other current assets		-		415		7,245		7,754
	Cash and cash equivalents		11,209		1,625		10,883		631
Non-current assets held for sale
	Property investments	9	6,810		7,430		-		-
Total current assets and non-current assets held for sale			19,016		10,467		18,647		8,755
Total assets			31,836		24,896		21,924		14,236
Current liabilities
	Trade and other payables		716		826		70		67
	Short term borrowings		3,278		3,746		-		148
			3,994		4,572		70		215
Total assets less current liabilities			27,842		20,324		21,854		14,021
Non-current liabilities
	Deferred taxation		-		-		-		-
Net assets			27,842		20,324		21,854		14,021
Capital and reserves
	Ordinary share capital		2,336		1,342		2,336		1,342
	Share premium		12,508		2,302		12,508		2,302
	Share warrant reserve		64		-		64		-
	Retained reserves		12,934		16,680		6,946		10,377
Equity attributable to equity shareholders			27,842		20,324		21,854		14,021
Non-controlling interest			-		-		-		-
Total equity			27,842		20,324		21,854		14,021
Basic and diluted net asset value per ordinary share (pence)		11	298.0		378.5		233.9		261.1

GROUP STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

		2014		2014		2013		2013
		£'000		£'000		£'000		£'000
Cash flow from operating activities
Dividend income received		92				88
Interest received		7				108
Rental income received		762				1,037
Other cash payments		(1,929)				(2,118)
Net cash utilised in operations				(1,068)				(885)
Interest paid on property loans		(146)				(600)
				(146)				(600)
Net cash flow from operating activities				(1,214)				(1,485)
Cash flow from investing activities
Purchase of investments		(10)				(89)
Sale of investments		29				1,480
Sale of investment properties		148				11,466
Expenditure on investment properties		(515)				(1,227)
Purchase of developments in hand		(67)				(22)
Sale of development in hand		417				-
				2				11,608
Cash flow from financing activities
Repayment of loans		(468)				(16,937)
Receipt of loans		-				225
Equity dividends paid		-				(134)
Share issue proceeds		11,400				-
Share issue costs		(200)				-
Supporter warrants issued		64				-
				10,796				(16,846)
Increase/(decrease) in cash and cash equivalents				9,584				(6,723)
Cash and cash equivalents at start of year				1,625				8,348
Cash and cash equivalents at end of year				11,209				1,625

COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2014

		2014		2014		2013		2013
		£'000		£'000		£'000		£'000
Cash flow from operating activities
Investment income received		92				88
Interest received		7				106
Other cash payments		(807)				(85)
Net cash flow from operating activities				(708)				109
Cash flow from investing activities
Purchase of investments		(10)				(89)
Sale of investments		29				1,480
Advanced to Group undertakings		(1,857)				(8,500)
Repaid by Group undertakings		1,184				-
Purchase of development in hand		(67)				(22)
Sale of development in hand		417				-
				(304)				(7,131)

 

Cash flow from financing activities
Receipt of loans		-				170
Repayment of loans		-				(494)
Equity dividends paid		-				(134)
Share issue proceeds		11,400				-
Share issue costs		(200)				-
Supporter warrants issued		64				-
				11,264				(458)
Increase/(decrease) in cash and cash equivalents				10,252				(7,480)
Cash and cash equivalents at start of year				631				8,111
Cash and cash equivalents at end of year				10,883				631

Notes on the Consolidated Financial Statements

1.         BASIS OF PREPARATION

The financial statements set out in the announcement do not constitute the Company's statutory accounts for the year ended 31 December 2014 or the year ended 31 December 2013. The financial information for the year ended 31 December 2014 and the year ended 31 December 2013 are extracted from the statutory accounts of Gresham House plc, with the balance sheet for 2013 having been restated as referred to below. The auditor, BDO LLP has reported on the accounts for both periods; their report was unqualified and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006 for the periods ended 31 December 2014 or 2013. The auditor has raised an Emphasis of Matter in relation to going concern in 2013 only as follows:

'Emphasis of matter - financial statements prepared other than on a going concern basis

In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in the Basis of Preparation accounting policy concerning the basis on which the financial statements were prepared. As the objective of the directors is to achieve an orderly realisation of the Group's assets over a relatively short period with a view to returning capital to shareholders thereafter, the financial statements have been prepared on a basis other than that of going concern.'

There is no emphasis of matter in the auditor's report for the year ended 31 December 2014 and the financial statements have been prepared on a going concern basis.

The full statutory accounts will be available on the Company's website at www.greshamhouse.com and will be posted to shareholders shortly.

The financial statements of the Group and the Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. 

The accounting policies used by the Group in these condensed financial statements are consistent with those applied in its financial statements for the year to 31 December 2013, as amended to reflect the adoption of new standards, amendments and interpretations which became effective in the year as shown below.

The following standards and interpretations have been adopted in 2014 as they are mandatory for the year ended 31 December 2014:

(i)  IFRS 10 Consolidated Financial Statements

(ii)    IFRS 11 Joint Arrangements

(iii)  IFRS 12 Disclosure of Interests in Other Entities

(iv)   IFRS 13 Fair Value Measurement

(v) IAS27 Separate Financial Statements

(vi)   IAS28 Investment in Associates and Joint Ventures

Other standards and interpretations have been issued which will be effective for future reporting periods but have not been adopted in these financial statements.

Restatement of prior year figures

As a result of the proposals which came into effect on 1 December 2014 including the delisting of the Company from the Official List and admission to AIM, the adoption of a new Investing Policy and the subsequent loss of investment trust status, the comparative figures for 2013 have been restated as it is no longer appropriate to reflect the presentational guidance set out in the Statement of Recommended Practice for Investment Trusts issued by the Association of Investment Companies. This restatement relates purely to the presentation of the primary statements and has not affected the net asset position or results of the Group as previously reported.

2.         INCOME

	2014		2013
Income from investments	£'000		£'000
Rental income	858		999
Dividend income - Listed UK	92		88
Interest receivable: Bank and brokers	7		46
Other	149		134
	1,106		1,267
Other operating income
Dealing profits and losses	1		1
Management fees receivable	65		75
	66		76
Total income	1,172		1,343
Total income comprises:
Rental income	858		999
Dividends	92		88
Interest	156		180
Other operating income	66		76
	1,172		1,343

3.         OPERATING COSTS

Operating costs comprise the following:	2014			2013
	£'000			£'000
a) Property outgoings:
Directors' emoluments (excluding benefits in kind)	121			138
Wages and salaries	64			53
Other operating costs (net of service charges recoverable from tenants of £486,000 (2013: £687,000)	331			1,052
	516			1,243
b) Administrative overheads:
Directors' emoluments (excluding benefits in kind)	352			399
Auditor's remuneration *	131			75
Wages and salaries	44			85
Redundancy costs	19			3
Social security costs	22			33
Operating lease rentals - land and buildings	24			39
Share based payments	255			-
Other operating costs	220			212
	1,062			846

 

Staff costs (including directors' emoluments) were:
Wages, salaries and fees	555		667
Redundancy costs	33		3
Social security costs	29		33
Pension costs	5		8
	622		711

* A more detailed analysis of auditor's remuneration is as follows:	2014		2013
	£'000		£'000
Audit fees	23		23
Auditor's other fees - category 1 (the auditing of accounts of subsidiaries of the Company pursuant to legislation)	39		41
Auditor's other fees - category 3 (other services relating to taxation)	6		8
Auditor's other fees - category 10 (other services)	63		3
	131		75

The directors consider the auditor was best placed to provide these other services. The Audit Committee reviews the nature and extent of non-audit services to ensure that independence is maintained.

The average number of persons employed by the Group, including the executive directors, was 5 (2013: 6). 

The Group has the following commitments under operating leases:	2014		2013
	£'000		£'000
Within 1 year	-		16
1 - 2 years	-		-
	-		16

4.         FINANCE COSTS

	2014		2013
	£'000		£'000
Interest payable on loans and overdrafts	146		504
Finance fees	63		253
	209		757

5.         TAXATION

			2014		2013
			£'000		£'000
(a) Analysis of charge in period:
UK Corporation tax at 21.5% (2013: 23.25%)			-		-
Total tax charge			-		-
(b) Factors affecting tax charge for period:
Loss on ordinary activities before tax multiplied by standard rate of corporation tax in the UK of 21.5% (2013: 23.25%)			(860)		(801)
Tax effect of:
Investment losses not taxable			470		117
Dividend income not taxable			(20)		(21)
Expenses disallowed			1		14
Losses utilised in current year			-		(266)
Movement in losses carried forward			409		957
Actual tax charge			-		-

The Group has unutilised tax losses of approximately £12.2 million (2013: £12.2 million) available against future corporation tax liabilities. The potential deferred taxation asset of £2.8 million (2013: £2.8 million) in respect of these losses has not been recognised in these financial statements as it is not considered sufficiently probable that the Group will generate sufficient taxable profits from the same trade to recover these amounts in full.

6.         LOSS PER SHARE

Basic and diluted loss per share

The basic and diluted loss per share figure is based on the net loss for the year attributable to the equity shareholders of £4,753,000 (2013: £3,497,000) and on 5,707,356 (2013: 5,369,880) ordinary shares, being the weighted average number of ordinary shares in issue during the period. No shares were deemed to have been issued at nil consideration as a result of the shareholder and supporter warrants granted.

The shareholder and supporter warrants are not dilutive as the exercise price of the warrants is 323.27p which is higher than the average market price of ordinary shares during the year.

7. DIVIDENDS

	2014		2013
	£'000		£'000
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2013 of nil (2012: 2.5p) per share	-		134
	-		134
Set out below is the total dividend payable in respect of the financial year.
Proposed final dividend for the year ended 31 December 2014 of nil  (2013: nil) per share	-		-

8. INVESTMENTS - SECURITIES

An analysis of total investments is as follows:

			Group						Company
			2014		2013				2014		2013
			£'000		£'000				£'000		£'000
Listed securities - on the London Stock Exchange			106		93				106		93
Securities dealt in under AIM			928		2,805				928		2,805
Securities dealt in under ISDX			69		76				69		76
Unlisted securities			1,852		2,185				1,852		2,185
Carrying value at 31 December			2,955		5,159				2,955		5,159
Investments valued at fair value through profit or loss			1,544		3,743				1,544		3,743
Loans and receivables valued at amortised cost			1,411		1,416				1,411		1,416
			2,955		5,159				2,955		5,159
The movement in the investment portfolio can be analysed as follows:
			Group						Company
			2014		2013				2014		2013
			£'000		£'000				£'000		£'000
Opening cost			6,316		7,743				6,558		7,985
Opening net unrealised losses			(1,157)		(689)				(1,399)		(931)
Opening value			5,159		7,054				5,159		7,054
Movements in the year:
Purchases at cost			10		89				10		89
Sales - proceeds			(29)		(1,480)				(29)		(1,480)
Sales - realised gains & (losses) on sales			3		(36)				3		(36)
Net unrealised losses			(2,188)		(468)				(2,188)		(468)
Closing value			2,955		5,159				2,955		5,159
Closing cost			6,300		6,316				6,542		6,558
Closing net unrealised losses			(3,345)		(1,157)9				(3,587)		(1,399)
Closing value			2,955		5,159				2,955		5,159

The cost of the investments held by the Company is different to that of the Group as a result of unrealised gains on intra-group transfers being eliminated on consolidation.

Gains and losses on investments held at fair value	Group				Company
	2014		2013		2014		2013
	£'000		£'000		£'000		£'000
Realised gains & (losses) on sales	3		(36)		3		(36)
Net unrealised losses	(2,188)		(468)		(2,188)		(468)
Net losses on investments	(2,185)		(504)		(2,185)		(504)

An analysis of investments is as follows:	Group				Company
	2014		2013		2014		2013
	£'000		£'000		£'000		£'000
Equity investments	1,438		3,639		1,438		3,639
Fixed income securities	106		104		106		104
Unquoted loan stock	1,411		1,416		1,411		1,416
	2,955		5,159		2,955		5,159

9.            PROPERTY INVESTMENTS

Property investments have been classified as follows:	Group
	2014		2013
	£'000		£'000
Non-current assets	9,865		9,270
Non-current assets held for sale	6,810		7,430
	16,675		16,700

A further analysis of total property investments is as follows:

	Group
	2014		2013
Net book value and valuation	£'000		£'000
At 1 January	16,700		28,896
Additions during the year - expenditure on existing properties	498		942
Disposals during the year	-		(11,699)
Movement in fair value during the year	(523)		(1,439)
At 31 December	16,675		16,700

Property investments are shown at fair value based on current use and any surplus or deficit arising on valuation of property is reflected in the Statement of Comprehensive Income.

All property investments were valued by Jones Lang LaSalle Limited, Chartered Surveyors, as at 31 December 2014 at a combined total of £16,675,000. These external valuations were carried out on the basis of Market Value in accordance with the latest edition of the Valuation Standards published by the Royal Institution of Chartered Surveyors. 

Operating leases

The future minimum lease payments receivable under non-cancellable operating leases are as follows:

	2014		2013
	£'000		£'000
Not later than one year	561		654
Between 2 and 5 years	1,349		583
Over 5 years	872		34
	2,782		1,271

Rental income recognised in the Statement of Comprehensive Income amounted to £858,000 (2013: £999,000).

The commercial leases vary with their location within the United Kingdom, however wherever the market allows they are being standardised where possible across the property portfolio. The commercial units are leased on terms where the tenant has the responsibility for repairs and running costs for each individual unit (other than roof repairs in certain circumstances) with a service charge payable to cover estate services provided by the landlord. 

The cost of the above properties as at 31 December 2014 is as follows:

							Group
							£'000
Brought forward							17,3153
Additions during the year							498
Disposals during the year							-
							17,813

Capital commitments

Capital expenditure contracted for but not provided for in the financial statements for the Group was £248,000 (2013: £338,000) and for the Company was £nil (2013: £nil).

Movement in fair value of property investments					Group
					2014		2013
					£'000		£'000
Realised losses on disposal of property					-		173
Decrease in fair value					(523)		(1,612)0
Movement in fair value of property investments					(523)		(1,439)

10.       OTHER INVESTMENTS

					Company
					2014		2013
Subsidiary undertakings					£'000		£'000
Shares - at cost					322		322
Less provision					-		-
					322		322

The principal subsidiary undertakings of Gresham House plc, all of which principally trade and are registered in England, are as follows:

	Held by Parent	Held by other Group companies
	%		%
Deacon Commercial Development and Finance Limited - property investment	75		25
New Capital Developments Limited - property investment	-		75
Newton Estate Limited - property investment	-		100
Security Change Limited - finance and share dealing	100		-

11.       NET ASSET VALUE PER SHARE

Basic and diluted

Basic and diluted net asset value per ordinary share is based on equity attributable to equity shareholders at the year-end and on 9,343,390 (2013: 5,369,880) ordinary shares being the number of ordinary shares in issue at the year-end.  No shares were deemed to have been issued at nil consideration as a result of shareholder and supporter warrants granted.

The shareholder and supporter warrants are not dilutive as the exercise price of the warrants is 323.27p which is higher than the average market price of ordinary shares during the year.

	£'000
The movement during the year of the assets attributable to ordinary shares were as follows:
Total net assets attributable at 1 January 2014	20,324
Total recognised losses for the year	(4,001)
Issue of shares	11,200
Share warrants issued	64
Share based payments	255
Total net assets attributable at 31 December 2014	27,842

12.       POST BALANCE SHEET EVENT

On 4 February 2015 the High Court approved the cancellation of the Company's share premium account (the "Cancellation"). As a consequence of the Cancellation £12,508,206.76 standing to the credit of the Company's share premium account was cancelled. This will facilitate any share buyback or payment of dividends that the board of the Company may in the future approve by creating a reserve of an equivalent amount that, subject to certain creditor protection undertakings, will form part of a distributable reserve.

The Cancellation has no effect on the overall net asset position of the Company.

The Cancellation proposals were contained in the Company's shareholder circular and AIM Admission Document, each dated 8 October 2014, and approved by shareholders at the Company's General Meeting on 31 October 2014

13.       SEGMENTAL REPORTING

	Investment				Property Investment				Elimination					Consolidated
	2014		2013		2014		2013		2014		2013		2014			2013
Revenue	£'000		£'000		£'000		£'000		£'000		£'000		£'000			£'000
External income	301		310		864		987		-		-		1,165			1,297
Inter - segment income	128		637		-		-		(128)		(637)		-			-
Total revenue	429		947		864		987		(128)		(637)		1,165			1,297
Gains and losses on investments at fair value	(2,185)		(504)		-		-		-		-		(2,185)			(504)
Movement on property  investments at fair value	-		-		(523)		(1,439)		-		-		(523)			(1,439)
Total income and gains	(1,756)		443		341		(452)		(128)		(637)		(1,543)			(646)
Segment expenses	-		-		(516)		(1,243)		-		-		(516)			(1,243)
Inter - segment expense	-		-		(128)		(637)		128		637		-			-
Finance costs	-		(106)		(209)		(651)		-		-		(209)			(757)
Segment (loss)/profit	(1,756)		337		(512)		(2,983)		-		-		(2,268)			(2,646)
Unallocated corporate expenses													(1,740)			(846)
Operating loss													(4,008)			(3,492)
Interest income													7			46
Loss before taxation													(4,001)			(3,446)
For the year ended 31 December 2014 the Group's policy was to invest in both securities and commercial properties. The future policy of the Group can be found in the Strategic Report. Accordingly management reporting for the year ended 31 December 2014 is split on this basis under the headings "Investment" and "Property Investment" respectively.  Inter-segment income consists of management fees and interest on inter-company loans.  Unallocated corporate expenses relate to those costs which cannot be readily identified to either segment. All activity and revenue is derived from operations within the United Kingdom.  Four customers accounted for £313,000, £141,000, £100,000 and £93,000 respectively of the external income for the Property Investment segment.  Property operating expenses relating to property investments that did not generate any rental income were £9,000 (2013: £18,000).

 

Other Information	Investment				Property Investment					Unallocated				Consolidated
	2014		2013		2014		2013		2014			2013		2014		2013
	£'000		£'000		£'000		£'000		£'000			£'000		£'000		£'000
Segment assets	14,622		6,658		17,214		18,238		-			-		31,836		24,896
Segment liabilities	(287)		(194)		(3,707)		(4,378)		-			-		(3,994)		(4,572)
	14,335		6,464		13,507		13,860		-			-		27,842		20,324
Capital expenditure	10		89		498		942		-			-		508		1,031
Depreciation	-		-		-		-		-			-		-		-
Non-cash expenses other than depreciation	-		-		-		-		255			-		255		-
All non-current assets are located within the United Kingdom.  Details of the exchanges on which the non-current assets contained within the Investment segment are traded can be found in note 8 of these financial statements.

 

END

 

 

FR IRMLTMBMTBFA