Half Yearly Report

RNS Number : 0420Y

Fletcher King PLC

16 December 2010

 



FLETCHER KING PLC

Interim Results for the 6 months ended 31 October 2010

Financial Highlights

                  Turnover   :           £1.486M                  (2009: £1.315M)

                  PBT           :           £174,000                  (2009: £218,000)*

                  EPS           :           1.31p per share       (2009: 1.66p per share)

                  Dividend   :           0.75p per share       (2009: nil)

* included an exceptional rates rebate of £116,000

Operational Highlights

·    The Market - The investment market is polarised and yields on secondary property are rising.

·    Fund Management and Investment -We have had an active first half in transactions.

·    Valuation and Rating  - Valuation volume remains low with little bank lending but Rating remains active.

Commenting on the results David Fletcher, Chairman of Fletcher King said :

                  "We have had an active first half with our transaction volume significantly above the same period last year.

                  Asset management continues to be strong and despite the recession we are still collecting 95% of rents within three days of the quarter day."

ENQUIRIES:

Fletcher King Plc

David Fletcher

Tel: [phone]

Cairn Financial Advisers LLP (Nomad)

James Caithie

Tel: [phone]

The interim results will be available on the Company's website: www.fletcherking.co.uk

 Chairman's Statement

Results

Turnover for the period was £1.486m (2009: £1.315m) with profit before tax of £174,000 (2009: £218,000).  Profit before tax for 2009 was inflated by the inclusion of an exceptional rates rebate of £116,000.

Your Directors have declared an interim dividend of 0.75p per share (2009: 0p) to be paid on 25 February2011 to shareholders on the register at the close of business on 28 January 2011.

The Commercial Property Market

The property investment market is currently polarised between low risk prime properties let on long leases to strong covenants (bond type investments particularly in central London) plus multi-let industrials; and the rest.  Activity in large sections of the secondary market outside the South East remains subdued with values continuing to be under pressure.

Central London office investments, particularly in Mayfair and prime City, where rental growth prospects remain positive, are now selling for values at, or close to, their peak in early 2007. The feeding frenzy by mainly foreign buyers is encouraged by growth in office rents with a reported letting of Grade A space in Mayfair at £110 per sq.ft.  A Bond Street shop letting at £1,000 Zone A is also sending a strong signal about the resilience of the West End.

However, that picture is not replicated elsewhere in the country and the market there remains challenging.

Apart from isolated instances, like Central London, the letting market for all types of space is difficult and likely to remain so in the foreseeable future.

With £50bn of property bank debt due for repayment each year for at least the next three years there are going to be many more problems than merely the high profile ones we have already seen.

The two largest lending banks are now publicly owned and the decision on non-performing loans is as much political as business.  If the Banks flood the market with property, prices and values will be driven lower, to their own detriment.

However, there is a considerable volume of cash seeking a home in property and the current problem is finding suitable stock to buy.  In our view, the market is likely to remain relatively flat in the coming year.

Business Overview

The transaction side of our business has been active during the first half although it has taken skill, endurance and flexibility to get some of the sales consummated.  Nevertheless we have completed or exchanged approx £50million of sales in the first six months.

Our SHIPS 06 Fund made its first acquisition, purchasing a freehold multi-let office and retail investment on Basinghall Street in the heart of the City of London, a £6m property yielding 7% with potential to add value.

The Banks continue to say they will lend but that is not happening and as a result we have seen no pick up in our valuation instructions. 

Rating instructions continue to increase and that part of our business is healthy and active.

Property Fund and Asset Management are strong. Despite the recession very few of the tenants we collect from have failed and our rent collection statistics are holding up well with over 95% of rents collected within 3 days of the quarter day.

Outlook

We expect the second half of the year to continue very much as the first and for the market to remain relatively flat. Much depends on the general economic outlook and with the current turmoil in the Eurozone it is becoming even more difficult to predict the future.

Our balance sheet and cash reserves remain strong and our highly motivated team are incentivised to drive the business forward in these difficult times.

David Fletcher

16 December 2010

Consolidated Interim Statement of Comprehensive Income

 for the 6 months ended 31 October 2010

	6 months ended		6 months ended		Year ended
	31 October		31 October		30 April
	2010 (Unaudited)		2009 (Unaudited)		2010 (Audited)
	£000		£000		£000
Revenue	1,486		1,315		2,832
Employee benefits expense	(728)		(681)		(1,514)
Depreciation expense	(37)		(37)		(73)
Exceptional rates rebate	-		116		118
Other operating expenses	(552)		(500)		(983)
Operating profit	169		213		380
Income from investments	1		-		16
Finance income	4		5		10
Profit before taxation	174		218		406
Analysed as:
Profit before taxation and exceptional items	174		102		288
Exceptional rates rebate	-		116		118
Profit before taxation	174		218		406
Taxation	(53)		(65)		(164)
Profit for the period	121		153		242
Total comprehensive income for the period	121		153		242
Basic and diluted earnings per share (note 4)
Continuing operations	1.31p		1.66p		2.63p
Dividends per share
Interim dividend proposed	0.75p		-		-
Dividends paid	-		1.00p		1.00p

Consolidated Interim Statement of Financial Position

as at 31 October 2010

		31 October		31 October		30 April
		2010 (Unaudited)		2009 (Unaudited)		2010 (Audited)
		£000		£000		£000
Assets
Non-current assets
Property, plant and equipment		248		321		285
Available for sale investments		250		250		250
Deferred tax assets		73		93		73
		571		664		608
Current Assets
Trade and other receivables		805		631		1,005
Cash and cash equivalents		2,522		2,265		1,967
		3,327		2,896		2,972
Total assets		3,898		3,560		3,580
Liabilities
Current liabilities
Trade and other payables		357		224		324
Current taxation liabilities		208		77		117
Other creditors		380		424		307
Total liabilities		945		725		748
Shareholders' equity
Share capital		921		921		921
Share premium		140		140		140
Reserves		1,892		1,774		1,771
Total shareholders' equity		2,953		2,835		2,832
Total equity and liabilities		3,898		3,560		3,580

Consolidated Interim Statement of Changes in Equity

for the 6 months ended 31 October 2010

						Profit
		Share		Share		and			TOTAL
		capital		premium		loss			EQUITY
		£000		£000		£000			£000
Balance at 1 May 2010		921		140		1,771			2,832
Total comprehensive income for the period		-		-		121			121
Equity dividends paid		-		-		-			-
Balance at 31 October 2010 (Unaudited)		921		140		1,892			2,953
Balance at 1 May 2009		921		140		1,713			2,774
Total comprehensive income for the period		-		-		153			153
Equity dividends paid		-		-		(92)			(92)
Balance at 31 October 2009  (Unaudited)		921		140		1,774			2,835
Balance at 1 May 2009		921		140		1,713			2,774
Total comprehensive income for the period		-		-		242			242
Equity dividends paid		-		-		(184)			(184)
Balance at 30 April 2010 (Audited)		921		140		1,771			2,832

Consolidated Interim Statement of Cash Flows

for the 6 months ended 31 October 2010

		6 months ended		6 months ended		Year ended
		31 October		31 October		30 April
		2010 (Unaudited)		2009 (Unaudited)		2010 (Audited)
		£000		£000		£000
Cash flows from operating activities
Profit before taxation from continuing operations		174		218		406
Adjustments for:
Depreciation expense		37		37		73
Income from investments		(1)		-		(16)
Finance income		(4)		(5)		(10)
Cash flows from operating activities
before movement in working capital		206		250		453
Decrease/(increase) in trade and other receivables		200		268		(106)
Increase / (decrease) in trade and other payables		106		(307)		(324)
Cash generated from operations		512		211		23
Taxation received/(paid)		38		12		(27)
Net cash flows from operating activities		550		223		(4)
Cash flows from investing activities
Finance income		4		5		10
Income from investments		1		-		16
Net cash flows from investing activities		5		5		26
Cash flows from financing activities
Dividends paid to shareholders		-		(92)		(184)
Net cash flows from financing activities		-		(92)		(184)
Net increase/ (decrease) in cash and cash equivalents		555		136		(162)
Cash and cash equivalents at start of period		1,967		2,129		2,129
Cash and cash equivalents
at end of period		2,522		2,265		1,967

Explanatory Notes

1.     General information

The Company is a public limited company incorporated and domiciled in England and Wales. The address of its registered office is 61 Conduit Street, London W1S 2GB.

These interim financial statements were approved by the Board of Directors on 15 December 2010.

2.     Basis of preparation

The interim financial information in this report has been prepared using accounting policies consistent with IFRS as adopted by the European Union.  IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the International Financial Reporting Standards  Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted by the European Union and applicable as at 30 April 2011.

The accounting policies applied are consistent with those of the annual financial statements for the year ended 30 April 2010.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

3      Non Statutory Accounts

The financial information for the period ended 31 October 2010 set out in this interim report does not constitute the Group's statutory accounts for that period. The statutory accounts for the year ended 30 April 2010 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

The financial information for the 6 months ended 31 October 2010 and 31 October 2009 is unaudited.

4      Earnings per share

	Six Months to 31st  October 2010 Number	Six months to 31st October 2009 Number	Year ended 30th April 2010 Number
Weighted average number of shares for basic and diluted earnings per share.	9,209,779	9,209,779	9,209,779
	£'000	£'000	£'000
Earnings for basic and diluted earnings per share:
Continuing Operations	121	153	242

 

END

 

 

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