Final Results

RNS Number : 0224N

Marechale Capital PLC

25 August 2011

 



25 August 2011

Marechale Capital plc

("Marechale Capital" or the "Company")

Consolidated Financial Statements for the year ended 31 March 2011

Chairman's Statement

For the year ended 31 March 2011

Marechale Capital has now completed its first full year as an investment banking and corporate finance business specialising in advising and raising capital for high growth UK companies and funds.

The plan for 2010-11, which has been achieved, was to generate around £500,000 of fees and commissions as well as material warrant and equity value on projects completed so that we can share in the upside of our clients, and we report a small full year loss of £26,000.

During the year the Company has been active in marketing its services and has engaged and completed fifteen transactions of which eight generated equity, options and warrants. Marechale Capital's focus is on advising growth companies and funds, mainly private but also quoted, with a particular expertise in consumer, leisure, online exchanges and the renewable sectors.

The two key areas of activity for the business are Growth Capital, private equity transactions for more established business, and Development Capital, fundraising for smaller growth companies, the latter typically being Enterprise Investment Scheme (EIS) qualifying.

The Company completed two Growth Capital private equity transactions during the year; £9m of equity funding was raised for a £80m turnover branded restaurant group and £4m was raised for the publishing group, Osprey Publishing Ltd, both from single private equity investors.  The Osprey fee was received after the year end and warrants were carried into this financial year.  Marechale Capital has a good pipeline of similar transactions, and is currently working on Growth Capital projects in the leisure, online exchange and renewable sectors.

The second area of activity is Development Capital fundraising, typically up to £2m, for smaller high growth companies which are usually EIS qualifying, where a range of investors known to the Company can benefit from the tax advantages under EIS. We have successfully completed funding for a number of businesses during the year, including a pubs group (Heartstone Inns Ltd), an anaerobic digestion biogas business (Future Biogas Ltd), and an online CDS trading exchange (Traccr Holdings Plc).  Again we continue to develop the Development Capital pipeline.

Marechale Capital generates revenues from advisory fees and fund-raising commissions, as well as equity, warrants or a percentage of the 'carry' on fund-raisings. The three year plan is to increase the cash reserves and profitability of the business and increase the asset value of the Company through increasing and realising value in these equity, warrant and carry positions. Please note that, for accounting reasons, we are unable to record formally the unrealised uplift in value of these warrant and equity investments.  However, we can disclose that we have closed transactions in the last 18 months which have generated warrants, and in some cases, we have also taken equity positions. In the former's case, the companies' shares are not listed, which means that we cannot revalue on the grounds of 'lower of cost or market'; in the latter's case, the value of our equity positions have increased since the year-end based on their most recent equity round prices. The Directors estimate that the sum of these unrealised gains, at the time of writing, is potentially worth around £300,000.

The Board continues to be approached by fund management and financial services businesses and will undertake acquisitions or investments in businesses if appropriate. The Company was delighted to place 9.5% of the Company's shares with UK fund manager Williams de Broe, and these are held on behalf of a number of their clients in their AIM services fund. The shares were bought at 2p per share and resulted in the Company's shares in issue increasing to 52.4m after the year-end. The Company remains quoted on the AIM market.

Also during the year, we announced the appointment of Robin Black, as a Non Executive Director.  Robin brings a wealth of private equity experience to help us build our Development and Growth capital divisions.  He also acquired 2% of the Company at an average price of 1.94p in March this year.

Market conditions are still challenging, and, whilst there is increased demand for Marechale Capital's advisory and fund raising services, investor appetite is restrained and only available for exceptional investment opportunities, particularly in the Development Capital division where there are tax advantages such as under the EIS.

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 progress when we next report to you later this year.

Mark Warde-Norbury

Chairman                                                                      

24 August 2011

For further information please contact:

Marechale Capital Mark Warde-Norbury Patrick Booth-Clibborn	Tel: [phone]
Smith & Williamson Corporate Finance Azhic Basirov David Jones	Tel: [phone]

Consolidated Income Statement

Year ended 31 March 2011

		Year ended	Year ended
		31-Mar	31-Mar
	Notes	2011	2010
		(£)	(£)
Continuing operations
Revenue	2	631,909	54,231
Cost of sales		(53,837)	0
Gross profit		578,072	54,231
Administrative expenses		(636,169)	(562,585)
Operating loss		(58,097)	(508,354)
Investment revenues		2,220	1,820
Other gains and (losses)		29,596	(329,622)
Loss before tax		(26,281)	(836,156)
Taxation		0	0
Loss for the year on continuing operations		(26,281)	(836,156)
Loss for the year on discontinued operations		0	(362,988)
Loss for the year		(26,281)	(1,199,144)
Loss per share	3	(Pence)	(Pence)
Basic - Continuing operations		(0.06)	(1.92)
- Discontinued operations		0	(0.83)
- Total		(0.06)	(2.75)

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	(26,281)	(1,199,144)
Other comprehensive income
Revaluation of investments	(6,722)	(8,449)
Realised loss on investments	0	(114)
	(6,722)	(8,563)
Total recognised comprehensive income
(all attributable to owners of the parent)	(33,003)	(1,207,707)

Consolidated Balance Sheet

Year ended 31 March 2011

		Year ended	Year ended
		31-Mar	31-Mar
		2011	2010
		(£)	(£)
Non current assets
Property, plant and equipment		0	0
Investments		2	2
Current assets
Available for sale investments		62,826	57,707
Trading investments		30,150	0
Trade and other receivables		82,479	79,483
Cash and cash equivalents		242,064	399,431
		417,519	536,621
Total assets		417,521	536,623
Current liabilities
Trade and other payables		(48,523)	(134,622)
Total current liabilities		(48,523)	(134,622)
Net assets		368,998	402,001
Equity
Capital and reserves attributable to equity shareholders
Share capital		2,371,870	2,371,870
Share premium account		1,177,453	1,177,453
Revaluation reserves		21,601	28,323
Other reserves		(50,254)	(50,254)
Retained earnings		(3,151,672)	(3,125,391)
		368,998	402,001

Statement of Changes in Equity

Year ended 31 March 2011

	Share capital	Share premium	Revaluation reserve	Other reserves	Retained earnings
Group	(£)	(£)	(£)	(£)	(£)
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)
Issue of ordinary share capital	0	0	0	0	0
Release of reserve for lapsed options	0	0	0	0	0
Provision for share-based payments	0	0	0	0	0
Transactions with owners	0	0	0	0	0
Total comprehensive income
Loss for the period	0	0	0	0	(26,281)
Revaluation during the period	0	0	(6,722)	0	0
Total comprehensive income	0	0	(6,722)	0	(26,281)
Balance at 31 March 2011	2,371,870	1,177,453	21,601	(50,254)	(3,151,672)

Movements of the Revaluation reserve consist of:	2011	2010
Unrealised gains/ (losses)	13,360	(8,449)
Release of unrealised gains to Profit and Loss	(20,082)	0
	(6,722)	(8,449)
Other reserves consist of:
Reserve for employee share ownership plan ('ESOP')	(50,254)	(50,254)
Reserve for share based payments	0	0
	(50,254)	(50,254)

The Reserve for ESOP comprises 232,603 shares in the Group held in an ESOP Trust. As at 31 March 2011 and 2010, none of the shares had been unconditionally granted to any of the Group's employees and had an aggregate market value of £4,652 (2010: £4,652).

Consolidated Cash Flow Statement

Year ended 31 March 2011

	Year ended	Year ended
	31-Mar	31-Mar
	2011	2010
	(£)	(£)
Net cash from operating activities
Continuing operations: Operating loss	(58,097)	(508,354)
Depreciation	0	36,929
Discontinued operations: Operating loss	0	(89,258)
Operating cash flows before movements in working capital	(58,097)	(560,683)
Movement in working capital
(Increase)/decrease in receivables	(19,508)	22,352
(Decrease)/increase in payables	(69,588)	21,948
Movement in working capital of discontinued operations	0	199,973
	(89,096)	244,273
Operating cash flow	(147,193)	(316,410)
Investment activities
Interest receivable	2,220	1,820
Proceeds on disposal of trading investments	0	15,639
Proceeds on disposal of available for sale investments	27,606	0
Expenditure on tangible fixed assets	0	0
Expenditure on fixed asset investments	0	(287,353)
Expenditure on available for sale investments	(40,000)	0
Cash flow from investing activities	(10,174)	(269,894)
Financing
Issue of share capital	0	234,815
Cash flow from financing activities	0	234,815
Net decrease in cash
and cash equivalents	(157,367)	(351,490)
Cash and cash equivalents at start of period	399,431	750,921
Cash and cash equivalents at end of period	242,064	399,431
Decrease in cash and cash equivalents	(157,367)	(351,490)

Notes to the Financial Information

Year ended 31 March 2011

1.  Basis of preparation

The financial information contained in this announcement is based on the Company's financial statements which 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. 

The principal accounting policies adopted in the preparation of the financial information in this announcement are set out in the Company's full financial statements for the year ended 31 March 2011. 

2.  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.

	2011	2010
	(£)	(£)
Continuing operations
Fees earned from corporate finance	631,909	54,231

3. Earnings per share

	2011	2010
	Earnings	Earnings
	(£)	(£)
Based on a loss of	(26,281)	(1,199,144)

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	47,437,410	43,650,169
for the purpose of basic earnings per share

4.  Other matters

The financial information for the year ended 31 March 2011 set out in this announcement does not constitute statutory financial statements, as defined in section 434 of the Companies Act 2006, but is based on the statutory financial statements for the year then ended.  Those financial statements, upon which the auditors have issued an unqualified opinion, will be delivered to the Registrar of Companies.

Copies of the Company's full audited Annual Report and Financial Statements for the year ended 31 March 2011 will be sent to shareholders in due course and will be available on the Company's website: www.marechalecapital.com.

 

END

 

 

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