News Column

ENERGISER INVESTMENTS PLC - Final Results

May 29, 2014

29 May 2014 Energiser Investments plc ("Energiser" or the "Company") Final Results for the Year Ended 31 December 2013 CHAIRMAN'S STATEMENT INTRODUCTION I am pleased to write my first report to shareholders following my appointment as Chairman on 4 December 2013. There has been very little activity in the Company in recent years. Various corporate transactions were under negotiation which did not proceed, however they did take up a considerable amount of management time and resource. Similarly, an investment in a potentially revolutionary new high powered motor was written off as it became apparent that there were significant flaws in the concept. A decision has now been made to focus on the property sector and, in particular, the provision of mezzanine funding to small, experienced housebuilders. Since the very difficult period in the economy and the banking crisis, banks have remained very cautious in their lending policy to smaller housebuilders and require the developer's own contribution to be injected into the project prior to the banks' own capital being drawn down. There is therefore a "gap" in the market for providers of such finance to housebuilders that are having difficulty securing funding for high quality residential development opportunities in the South East of England where housing demand is strongest. I am pleased to report that Energiser, via its subsidiary Cedar Green Homes Limited, has secured its first opportunity in this field. The Group has committed to inject up to £2.6m into a development of 12 units under construction on a spectacular site at Kingswood Park, Surrey. The development of 9 houses and 3 apartments is expected to generate a gross development value of over £8.5m. We have procured funding for this commitment from a number of investors who will be paid a coupon of 10% on the funds invested. In the current climate of low returns on bank deposits, this interest rate is an attractive return for these investors. Their investment is secured by way of a second charge over the property behind the senior debt provider. Energiser is entitled to 50% of the net profit of the development including a "priority return" of £785,000, subject to the development making sufficient profit, before the developer receives its share of profit. Construction is now well under way with the first sales expected by the end of the current financial year. The Directors are evaluating other such proposals and believe that this new strategy will provide a substantial revenue stream to the Company and will re-build shareholders' funds. RESULTS Our residential development in Wellingborough generated gross rental income of £147,000 (2012: £149,000) and, after associated operating costs, resulted in net rental income of £113,000 (2012: £117,000). £100,000 of the impairment provision made in previous years against the value of the Wellingborough properties has been reversed during the year due to the market value of the portfolio increasing. In addition, the Group wrote off £17,000 (2012: £116,000) invested in the production of the high powered motor. Administrative expenses reduced to £73,000 (2012: £84,000) and after finance costs of £102,000 (2012: £ 100,000) the profit before and after taxation was £36,000 (2012: loss of £ 171,000) resulting in earnings per share of 0.08p (2012: loss of 0.39p). The Group's net assets have increased to £205,000 (2012: £169,000) representing net asset value per share of 0.47p (2012: 0.39p). Net asset value per share is calculated by dividing the net assets of the Group by the number of ordinary shares in existence at the balance sheet date. The Directors do not recommend the payment of a dividend. The Group's largest shareholder, Stephen Wicks, has agreed to provide further financial support to the Group for the foreseeable future, if required. As at the year end there were no loans due to Mr Wicks. OPERATIONS Our investment portfolio of 20 freehold houses in Wellingborough, Northamptonshire remains fully let and in the current financial year the Group has experienced an increase of approximately 5% in gross rents being achieved. The properties are continuing to be let on short term tenancies and during the year they were reclassified as investment property within non-current assets in the Statement of Financial Position. The Group continues to hold an investment in EiRx Therapeutics plc which has been previously fully provided against. OUTLOOK As set out above, the provision of development funding for experienced, undercapitalised housebuilders on prime sites, should enable the Group to create a substantial profit stream over the coming period and I therefore believe that the prospects for the Group are beginning to look positive. Bill Weston GROUP STRATEGIC REPORT Results and performance The results of the group for the year show a profit on ordinary activities before and after taxation of £36,000 (2012: loss of £171,000). The shareholders' funds for the Group total £205,000 (2012: £169,000). The Directors do not recommend the payment of a dividend for the year ended 31 December 2013. The performance of the Group during 2013 was similar to that of 2012, with almost 100% occupancy on the rental properties. During the year the Group advanced £1.4m to a housebuilder under a mezzanine finance agreement. The Group will be providing up to £2.6m towards the development of 12 units in Surrey and it is entitled to receive 50% of the net profit of the development including a priority return of £785,000, subject to the development making sufficient profit. The funding has been procured from investors at a cost of 10% per annum. Key performance indicators (`KPIs') The Group's KPIs are the return on project investment and the net assets position of the Group including net assets per share. These indicators are monitored by the Board and the details of performance against these are given below. 2013 2012 Return on project investment £113,000 £117,000 Net assets £205,000 £169,000 Net assets per ordinary share 0.47p 0.39p Nishith Malde Company Secretary DIRECTORS' REPORT Going concern The financial statements have been prepared on the going concern basis, the Directors having considered the cash forecasts for the next twelve months from the date of the approval of these financial statements. In doing so they have given due regard to the risks and uncertainties affecting the business as set out in the Directors' Report, the liquidity risk, financial support provided by Mr S D Wicks, who has undertaken to meet the cash needs of the Group if required, and the repayment of other loans. On this basis the Directors have a reasonable expectation that the funds available to the Group are sufficient to meet the requirements indicated by those forecasts. Nishith Malde Company Secretary STATEMENT OF COMPREHENSIVE INCOME For the year ended 31 December 2013 2013 2012 £'000 £'000 Continuing operations Revenue arising in the course of ordinary activities 147 149 Development costs (17) (116) Cost of sales 66 (32) Gross profit 196 1 Administrative expenses (73) (84) Operating profit/(loss) 123 (83) Finance costs (102) (100) Finance income 15 12 Profit/(loss) before taxation 36 (171) Taxation - - Profit/(loss) for the year attributable to shareholders 36 (171) of the Company and total comprehensive income Earnings/(loss) per share Basic and diluted earnings/(loss) per share from total 0.08p (0.39)p and continuing operations Diluted earnings/(loss) per share is taken as equal to basic earnings/(loss) per share as the Group's average share price during the period is lower than the exercise price of the share options and therefore the effect of including share options is anti-dilutive. GROUP STATEMENT OF FINANCIAL POSITION As at 31 December 2013 2013 2012 £'000 £'000 ASSETS Non-current assets Investment property 2,666 - Financial assets held at fair value through profit or 1 1 loss 2,667 1 Current assets Inventories - 2,566 Trade and other receivables 1,415 14 Cash and cash equivalents 10 7 1,425 2,587 Total assets 4,092 2,588 LIABILITIES Current liabilities Trade and other payables 359 333 Short-term borrowings 2,311 815 2,670 1,148 Non-current liabilities Long-term borrowings 1,200 1,239 Financial liabilities held at fair value through profit 17 32 or loss 1,217 1,271 Total liabilities 3,887 2,419 Net assets 205 169 EQUITY Share capital 2,312 2,312 Share premium account 5,747 5,747 Convertible loan 88 88 Merger reserve 1,012 1,012 Retained earnings (8,954) (8,990) Total equity 205 169 GROUP STATEMENT OF CHANGES IN EQUITY For the year ended 31 December 2013 Share Share premium Convertible Merger Retained Total capital account loan reserve earnings equity £'000 £'000 £'000 £'000 £'000 £'000 At 1 January 2012 2,312 5,747 88 1,012 (8,819) 340 Total comprehensive loss - - - - (171) (171) Balance at 31 December 2,312 5,747 88 1,012 (8,990) 169 2012 Total comprehensive income - - - - 36 36 Balance at 31 December 2,312 5,747 88 1,012 (8,954) 205 2013 GROUP STATEMENT OF CASH FLOWS For the year ended 31 December 2013 2013 2012 £'000 £'000 Cash flows from operating activities Profit/(loss) before and after taxation 36 (171) Adjustments for: Fair value gain on financial liabilities recognised in (15) (12) profit or loss Interest expense 102 100 Increase in trade and other receivables (1) - (Decrease) / increase in trade payables (23) 22 Reversal of impairment of inventories (100) - Increase in inventories - (16) Net cash used in operating activities (1) (77) Cash flows from investing activities Mezzanine finance facility issued (1,400) - Net cash used in investing activities (1,400) - Cash flows from financing activities Proceeds from borrowings 1,496 71 Re-payment of borrowings (39) (31) Interest paid (53) (67) Net cash generated by / (used in) financing 1,404 (27) activities Net increase / (decrease) in cash and cash 3 (104) equivalents Cash and cash equivalents at beginning of period 7 111 Cash and cash equivalents at end of period 10 7 Note: The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2013 or 2012 but is derived from those accounts. Statutory accounts for 2012 have been delivered to the registrar of companies, and those for 2013 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2012 or 2013. The AGM will be held at 2 Anglo Office Park, 67 White Lion Road, Amersham, Buckinghamshire, HP7 9FB at 11.00 am on 30 June 2014. The Company's Annual Report and Accounts will be posted to shareholders shortly and will be available to view and download on the Company's website at www.energiserinvestments.co.uk. For further information contact: Energiser Investments plc Nishith Malde +44 (0) 1494 762450 Cairn Financial Advisers LLP Jo Turner +44 (0) 20 7148 7900




For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: PR Newswire (UK Disclosure)


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters