Final Results and Notice of G

RNS Number : 2761S

Marechale Capital PLC

07 September 2010

 



7 September 2010

Marechale Capital plc

("Marechale Capital" or the "Company")

Consolidated Financial Statements for the Year Ended 31 March 2010 and Notice of General Meeting

Chairman's Statement

For The Year Ended 31 March 2010

Since last reporting to you in September 2009, and as announced at the time, we completed the sale of the Small Cap Stockbroking and PLUS Market Adviser businesses last year. The Company retained its AIM listing, FSA authorisation and LSE broking licence.

In November 2009, we announced the acquisition of Marechale Capital Limited - in doing so creating a 'Group' - and the appointment of Patrick Booth-Clibborn to the Group's board as Chief executive. Following shareholder approval in February 2010, we changed the Group's name to Marechale Capital Plc. Marechale Capital continues to be quoted on AIM, with the new ticker symbol 'MAC', and shareholders' current share certificates remain valid.

At the EGM in February the shareholders approved a Share Capital Reorganisation whereby each share of 5p nominal value would comprise 1 New Ordinary Share of 1p each and 4 Deferred Shares of 1p each. The purpose of this transaction was to reflect that the Company's mid-market share price has been below the previous nominal value of 5p per Ordinary Share for over a year.

Marechale Capital now operates as a low cost investment banking and corporate finance business. Virtually everything that is not core to generating revenue is outsourced and, with this low cost base, the Group is raising equity and debt funding for growth companies and funds.

The year 2009-10 Annual accounts therefore reflect the activity of the old, loss making St Helen's Capital business prior to its sale, and the transition to its new strategy as Marechale Capital, which was completed in early 2010. Since then the Group has been active in marketing its services and has engaged and completed six transactions. Marechale Capital's focus is on growth companies, both private and quoted, and funds, with a particular interest in Consumer, Leisure and the rapidly growing Renewables sectors.

Since the beginning of calendar 2010, the Group has generated fees to cover costs and has achieved break-even in the first three months of the new financial year. Whilst market conditions are still challenging, there is increased demand for Marechale's advisory and fund raising services, and increasing appetite amongst its investor contacts to invest in high quality investment opportunities.

Marechale Capital generates revenues from advisory fees and other fund raising commissions, as well as equity, warrants or a percentage of the 'Carry' on Fund fundraisings. The three year plan is to increase the cash reserves and profitability of the business and create shareholder value through these equity, warrant and 'Carry' positions.

The Board have been approached by a number of fund management and other financial services businesses over the year and will undertake acquisitions or investments in businesses if appropriate.

We remain cautious about overall current market conditions but are hopeful that, with a healthy pipeline of transactions building, we will be able to give you a further positive update on Marechale Capital's new strategy when we next report to you later this year.

Mark Warde Norbury

Chairman

6 September 2010

INCOME STATEMENT

YEAR ENDED 31 MARCH 2010

Continuing operations	Notes	Year ended 31 March 2010 (£)	Year ended 31 March 2009 (£)
Revenue	3	54,231	0
Cost of sales		0	0
Gross profit		54,231	0
Administrative expenses		(562,585)	(723,244)
Operating loss		(508,354)	(723,244)
Investment revenues		1,820	53,176
Other gains and losses		(329,622)	(61,434)
Loss before tax		(836,156)	(731,502)
Taxation		0	0
Loss for the year on continuing operations		(836,156)	(731,502)
Loss for the year on discontinued operations		(362,988)	(574,488)
Loss for the year		(1,199,144)	(1,305,990)
Loss per share		(Pence)	(Pence)
Basic          - Continuing operations		(1.92)	(1.72)
- Discontinued operations		(0.83)	(1.35)
- Total		(2.75)	(3.07)

On 14 September 2009, the Goodwill of both the AIM Broking and the PLUS Adviser businesses, along with their staff, were sold to Whim Gully Capital LLP for a consideration of £200,000.

Consolidated Statement of Comprehensive Income
Loss for the year	(1,199,144)	(1,305,990)
Other comprehensive income
Revaluation of investments	(8,449)	(96,940)
Realised loss on investments	(114)	(133,888)
	(8,563)	(230,828)
Total recognised comprehensive income (all attributable to owners of the parent)	(1,207,707)	(1,536,818)

BALANCE SHEET

YEAR ENDED 31 MARCH 2010

Non current assets	Notes	Year ended 31 March 2010 (£)	Year ended 31 March 2009 (£)
Property, plant and equipment		0	36,929
Current assets
Available for sale investments		57,707	116,681
Trading investments		0	7,497
Trade and other receivables		79,485	322,279
Cash and cash equivalents		399,431	750,921
		536,623	1,197,378
Total assets		536,623	1,234,307
Current liabilities
Trade and other payables		(134,622)	(133,144)
Total current liabilities		(134,622)	(133,144)
Net assets		402,001	1,101,163
Equity
Capital and reserves attributable to equity shareholders
Share capital		2,371,870	2,137,055
Share premium account		1,177,453	1,177,453
Revaluation reserves		28,323	36,772
Other reserves		(50,254)	603,591
Retained earnings		(3,125,391)	(2,853,708)
		402,001	1,101,163

STATEMENT OF CHANGES IN EQUITY

YEAR ENDED 31 MARCH 2010

Group	Share capital (£)	Share premium (£)	Revaluation reserve (£)	Other reserves (£)	Retained earnings (£)
Balance at 31 March 2008	2,132,800	1,171,708	133,712	363,316	(1,438,052)
Issue of ordinary share capital	4,255	5,745	0	0	0
Release of reserve for lapsed options	0	0	0	(24,222)	24,222
Provision for share-based payments	0	0	0	264,497	0
Transactions with owners	4,255	5,745	0	240,275	24,222
Total comprehensive income
Loss for the period	0	0	0	0	(1,305,990)
Revaluation during the period	0	0	(96,940)	0	(133,888)
Total comprehensive income	0	0	(96,940)	0	(1,439,878)
Balance at 31 March 2009	2,137,055	1,177,453	36,772	603,591	(2,853,708)
Issue of ordinary share capital	234,815	0	0	0	0
Release of reserve for lapsed options	0	0	0	(927,575)	927,575
Provision for share-based payments	0	0	0	273,730	0
Transactions with owners	234,815	0	0	(653,845)	927,575
Total comprehensive income
Loss for the period	0	0	0	0	(1,199,144)
Revaluation during the period	0	0	(8,449)	0	(114)
Total comprehensive income	0	0	(8,449)	0	(1,199,258)
Balance at 31 March 2010	2,371,870	1,177,453	28,323	(50,254)	(3,125,391)

	2010	2009
Movements of the Revaluation reserve consist of:	(£)	(£)
Unrealised (losses)	(8,449)	(104,053)
Release of unrealised gains to Profit and Loss	0	7,113
	(8,449)	(96,940)
	2010	2009
Other reserves consist of:	(£)	(£)
Reserve for employee share ownership plan ('ESOP')	(50,254)	(50,254)
Reserve for share based payments	0	653,845
	(50,254)	603,591

The Reserve for ESOP comprises 232,603 shares in the Group held in an ESOP Trust. As at 31 March 2010 and 2009, none of the shares had been unconditionally granted to any of the Group's employees and had an aggregate market value of £4,652 (2009: £4,652).

CASH FLOW STATEMENT

YEAR ENDED 31 MARCH 2010

Net cash from operating activities		Year ended 31 March 2010 (£)	Year ended 31 March 2009 (£)
Continuing operations:                Operating loss		(508,355)	(723,244)
Depreciation		36,929	52,500
Discontinued operations: Operating loss		(89,258)	(329,274)
Operating cash flows before movements in working capital		(560,684)	(1,000,018)
Movement in working capital
Decrease/(increase) in receivables		22,352	(143,131)
Increase/(decrease) in payables		21,948	(11,253)
Movement in working capital of discontinued operations		199,973	28,440
		244,273	(125,944)
Operating cash flow		(316,411)	(1,125,962)
Investment activities
Interest receivable		1,820	53,176
Proceeds on disposal of trading investments		15,639	5,933
Proceeds on disposal of available for sale investments		0	2,964
Expenditure on tangible fixed assets		0	(11,585)
Expenditure on fixed asset investments		(287,353)	0
Release of funds on fixed term deposits		0	1,500,000
Cash flow from investing activities		(269,894)	1,550,488
Financing
Issue of share capital		234,815	10,000
Cash flow from financing activities		234,815	10,000
Net increase/(decrease) in cash and cash equivalents		(351,490)	434,526
Cash and cash equivalents at start of period		750,921	316,395
Cash and cash equivalents at end of period		399,431	750,921
Increase/(decrease) in cash and cash equivalents		(351,490)	434,526

NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 31 MARCH 2010

1.      Significant accounting policies

a.      Basis of accounting

These financial statements have been prepared in accordance with IFRS and International Financial Reporting Interpretations Committee ('IFRIC') interpretations adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, with the prior periods being reported on the same basis.

The financial statements have been prepared on the historical cost basis as modified by the valuation of certain financial instruments, as described below.

The consolidated financial statements incorporate the accounts of the Company and its subsidiary and have been prepared by using the principles of acquisition accounting ("the purchase method") which includes the results of the subsidiaries from their date of acquisition. Intra-group sales, profits and balances are eliminated fully on consolidation.

Subsidiaries are entities over which the Group has control, being the power to govern the financial and operating policies of the acquired entity so as to obtain benefits from its activities. The results of the subsidiaries acquired or sold in the year are consolidated from the effective date of acqusition or to the effective date of disposal.

The principal accounting policies are set out below.

b.        Financial risk management objectives and policies

The Group's principal financial assets are cash and cash equivalents, trade and other receivables and investments. The Group's credit risk is primarily attributable to its trade receivables and its market risk is primarily attributable to its investments. The amounts presented in the Balance Sheet are net of allowances for impairment of receivables.

c.      Financial instruments

Available for sale investments

Available for sale investments are initially measured at cost, including transaction costs. At each reporting date these instruments are measured at their fair values and resultant gains and losses, after adjusting for taxation, are recognised directly in equity via the revaluation reserve, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period.

Trading investments

Investments held for trading consist of options held in quoted companies, which are held at fair value. At each reporting date fair value is re-assessed and resultant gains and losses are included directly in net profit and loss for the period.

Trade and other receivables

Trade and other debtors are measured at fair value.

Appropriate allowance for estimated irrecoverable amounts is recognised in the Income Statement where there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Trade and other payables

Trade and other payables are measured at fair value.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of the liabilities.

d.       Foreign currencies

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. Gains and losses arising during the period on transactions denominated in foreign currencies are treated as normal items of income and expenditure in the Income Statement.

e.       Operating leases

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

f.        Property, plant and equipment Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment.

Depreciation is provided at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its estimated useful life as follows:

Leasehold improvements are depreciated over the term of the lease. Computer equipment and software is written off in the period of purchase.

At each reporting date the net book value of these assets is compared against their economic value, and resulting impairments in value are written off in the Income Statement for the period.

g.       Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and fixed term deposits of less than one year (see note 18).

h.    Taxation

The Group has not achieved taxable profits during the period under review, accordingly there is no tax liability.

The Group had trading losses available to carry forward at 31 March 2010 of approximately £2.9 million (2009: £2.1 million). No deferred tax has been recognised in respect of trading profit as there was insufficient evidence available as to the timing of any future recovery.

In future years mainstream corporation tax is likely to be payable, which will be based on taxable profit for the year. Taxable profit differs from net profits as reported in the Income Statement because it excludes items of income or expense which are taxable or deductible in other years and it further excludes items which are never taxable or deductible. The Group's liability for current tax will be calculated using tax rates which have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases in the computation of taxable profit, and is accounted for using the Balance Sheet Liability Method. Deferred tax liabilities are generally recognised for all temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be used. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that effects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to the Income Statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same tax authority and the Group intends to settle its current tax assets and liabilities on a net basis.

i.       Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT, and other sales related taxes.

Revenue comprises broking commissions, and retainer fees for corporate finance advisory services. Where the revenue is success-fee based, it is taken to the Income Statement on the successful completion of the transaction. Retainer fees are taken to the Income Statement pro-rata to the period invoiced.

Interest income is based on the effective rate applicable for the period during which demand deposits are held.

j.       Employee share ownership plans trust ('ESOP')

The ESOP trust is accounted for in line with IAS 32, 'Financial Instruments - Presentation', re: treasury shares whereby shares have been shown at cost in a separate Reserve as a deduction from Shareholders' Funds.

k.      Share based payments

The Group has made share-based payments to certain directors and employees through the issue of options. The fair value of these payments is calculated at the date of grant through the use of a binomial pricing model. The expense is recognised on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. Upon cancellation, the expense is recognised as an immediate acceleration of vesting.

l.     Investments

The Parent Company's investment in subsidiary companies is stated at cost less provision for impairment in the company's balance sheet.

m.     Discontinued operations

Discontinued operations represent cash generating units or groups of cash generating units that have either been disposed of or classified as held for sale, and represent a separate major line of business or are part of a single co-ordinated plan to dispose of a major line of business. Cash generating units forming part of a single co-ordinated plan to dispose of a separate major line of business are classified within the continuing operations until they meet the criteria to be held for sale.

The post-tax profit or loss of the discontinued operation is classified as a single line on the face of the Consolidated Income Statement, together with any post-tax gain or loss recognised on the re-measurement to fair value less cost to sell or on disposal of the assets or disposal group constituting the discontinued operation.

On changes to the composition of the groups of units comprising discontinued operations, the presentation of discontinued operations within prior periods is restated to reflect consistent classification of discontinued operations across all periods presented.

n.      General information

At the date of authorisation of the financial statements, the following Standards and Interpretations (relevant to the Group's activities) which have not been applied in the financial statements were in issue but not yet effective.

IFRS 1 (amended)/IAS 27 Amended IFRS 3 (revised 2008) IAS 28 (revised 2008) IAS 27 (revised 2008) Improvements to IFRS's (April 2009)

Cost of an Investment in a Subsidiary, Jointly Controlled Entity or associate Business Combinations Investments in Associates Consolidated and Separate Financial Statements

It is not anticipated that the adoption of these accounting standards will have a significant effect on the Financial Standards.

2.                                        Critical accounting judgement and key sources of estimation uncertainty

Equity-settled share-based payments

The fair value of share based payments is calculated by reference to a simulation model. Inputs into the model are based on Management's best estimates of appropriate volatility, discount rate and share price growth.

Valuation of investments

Trading investments include options over securities which have been received as consideration for corporate finance services rendered. These assets have been valued according to the mid price, where the share prices of the companies concerned are quoted on a recognised stock exchange, less the exercise price of the options.

Bad debt policy

The Group regularly reviews all outstanding balances and provides for amounts it considers irrecoverable.

3.       Business and geographical segments

The directors consider that there is only one activity undertaken by the Group, that of corporate finance advisory. All of this activity was undertaken in the United Kingdom.

	2010 (£)	2009 (£)
Continuing operations
Fees earned from corporate finance	54,231	0

4.                     Earnings per share

	2010	2009
	Earnings	Earnings
Based on a loss of	(1,199,144)	(1,305,990)

Following the cancellation of the group's share options, there are no potentially dilutive instruments currently in issue.

	No. shares	No. shares
Weighted average number of Ordinary Shares in issue for the purpose of basic earnings per share	43,650,169	42,476,093

5.       Availability of Annual Report and Financial Statements

Copies of the Company's full audited Annual Report and Financial Statements and Notice of Annual General Meeting ("AGM") have been posted to shareholders and will also be available to download from the Company's website www.marechalecapital.com.

The audited Annual Report and Financial Statements and Notice of AGM will also be made available for inspection at the Company's registered office during normal business hours on any weekday. Marechale Capital Plc is registered in England and Wales with registered number 03515836. The registered office is at 15 St Helen's Place, London EC3A 6DE.

The Company's AGM will be held at 15 St Helen's Place, London EC3A 6DE on Wednesday 29 September 2010 at 12.00

 

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