TIDMENGI
27 September 2018
Energiser Investments plc
('Energiser' or the 'Company')
Posting of Interim Results to 30 June 2018
Energiser announces that it has posted its Interim accounts for the six months
to 30 June 2018
Chairman's statement
I am pleased to present the interim results for Energiser Investments plc
("Energiser" or "the Group") for the half year ended 30 June 2018.
Energiser Investments plc is an Investing Company whose strategy is to invest
in quoted and unquoted companies to achieve capital growth. The Group has seen
a significant amount of change over the last few years and has one key
investment at 30 June 2018. The focus continues to be in property particularly
in the residential sector.
In February 2018, Energiser invested GBP494,100 in a short-term loan secured on a
21,900 sq. ft office property in Croydon with planning permission to convert
into 71 residential units. The loan represented 30% of the estimated value of
the property and the interest was covered by rental income at a ratio of 4:1
(rent: interest). The gross interest paid on the loan was 7.5% p.a. The loan
was novated as part of our investment in KCR Residential REIT plc ("KCR") as
set out below.
In March 2018, Energiser acquired 2,435,710 new KCR ordinary shares at GBP0.70 a
share for a total of GBP1,704,997. The investment, made by participation in a
subscription alongside other investors, was made at a 9% discount to net asset
value per share of KCR as reported in its half-yearly report announced on 16
March 2018. This investment represented a 24.7% shareholding in KCR. The
subscription was funded with cash of GBP1,210,897 and the novation of the rights
to its short term loan investment of GBP494,100 described above.
KCR is an AIM quoted Real Estate Investment Trust ("REIT") focused on
investment in the UK residential Private Rented Sector ("PRS"). KCR invests in
whole apartment blocks of studio, one and two-bedroom flats, in city centres,
close to railway stations and shopping facilities. It focuses on more
affordable rental properties for private tenants.
With KCR, Energiser has established a strategic shareholding in a growth
company with a strong management team in a very large, under-managed sector.
KCR issued 4,434,570 new ordinary shares at 70p per share in 30 July 2018 and
as a result our holding has been diluted to 17.0%.
Our holding in KCR was valued at GBP0.88p per share on 30 June 2018 resulting in
a fair value adjustment of GBP438,000 and a related deferred tax charge of GBP
82,000.
The Company has received a few approaches for investment in other sectors
including a digital property lending opportunity in partnership with a
respected technology developer interested in combining their market leading
technology with Energiser's property expertise. The Board did not conclude an
investment in this opportunity and will continue to look for other investments.
Results
The Group had no revenues during the period (2017: GBP82,000) as it had sold its
revenue generating investments. It made a loss of GBP58,000 (2017: GBP81,000) and
had other comprehensive income of GBP438,000 relating to the revaluation gain on
the investment in KCR. Administrative expenses decreased from GBP109,000 to GBP
63,000. Finance costs reduced to Nil (2017: GBP38,000) as the loan relating to
the Wellingborough portfolio had been repaid in full in the year to 31 December
2017.
The Group's net assets increased to GBP2.07m (2017: GBP1.80m) translating into net
asset value per share of 1.67p per share (2017: 1.46p).
Outlook
We will continue to manage our investment in KCR and will also look for other
investment opportunities to achieve capital growth.
Stephen Wicks
Chairman
27 September 2018
Group statement of comprehensive income
Unaudited Unaudited 6 Audited
6 months months to 30 year to
to 30 June June 2017 31
2018 December
2017
Note GBP'000 GBP'000 GBP'000
Continuing operations
Revenue arising in the course of ordinary activities - 82 138
Cost of sales - (16) (34)
Gross profit - 66 104
Administrative expenses (63) (109) (235)
Operating loss 5 (63) (43) (131)
Finance costs - (38) (54)
Finance income 5 - -
Gain on sale of investment properties - - 16
Gain on financial instrument - - 773
(Loss)/profit before taxation 5 604
(58) (81)
Taxation - - (32)
(Loss)/profit for the period attributable to shareholders (58) (81) 572
of the Company
Other comprehensive income: fair value adjustments 438 103 -
Related taxation/deferred taxation (82) 42 -
Other comprehensive income for the period, net of tax 356 145 -
Total comprehensive income 298 572
64
(Loss)/earnings per share
Basic and diluted (loss)/earnings per share from total 4 (0.11)p (0.07)p 0.46p
and continuing operations
Diluted earnings per share is taken as equal to basic earnings per share as the
Group's average share price during the period is lower than the exercise price
and therefore the effect of including share options is anti-dilutive.
Group statement of financial position
Unaudited Unaudited Audited as
as at 30 as at 30 at 31
June 2018 June 2017 December
2017
Note GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Investments 6 2,143 - -
Investment property 7 - 2,844 -
2,143 2,844 -
Current assets
Trade and other receivables 44 16 33
Cash and cash equivalents 237 588 1,959
281 604 1,992
Total assets 2,424 3,448 1,992
LIABILITIES
Current liabilities
Trade and other payables 270 332 218
Short term borrowings - 80 -
Deferred tax 82 - -
352 412 218
Non-current liabilities
Long term borrowings - 1,232 -
- 1,232 -
Total liabilities 352 1,644 218
Net assets 2,072 1,804 1,774
EQUITY
Share capital 2,392 2,392 2,392
Share premium account 7,189 7,190 7,189
Convertible loan 88 88 88
Merger reserve 1,012 1,012 1,012
Available for sale reserve 356 - -
Retained earnings (8,965) (8,878) (8,907)
Total equity 2,072 1,804 1,774
Group statement of changes in equity
Share Available
Share premium Convertible Merger Revaluation for sale Retained Total
capital account loan reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January 2,392 7,198 88 1,012 537 - (9,479) 1,748
2017
Legal fees on issue (8) - - - - - (8)
of equity
Realisation of - - - - (537) - 537 -
available for sale
financial asset
Total comprehensive - - - - - 64 64
income
Balance at 30 June 2,392 7,190 88 1,012 - - (8,878) 1,804
2017
Legal fees on issue - (1) - - - - - (1)
of equity
Total comprehensive - - - - - - (29) (29)
loss
Balance at 31 2,392 7,189 88 1,012 - - (8,907) 1,774
December 2017
Available for sale - - - - - 356 - 356
reserve
Total comprehensive - - - - - - (58) (58)
loss
Balance at 30 June 2,392 7,189 88 1,012 - 356 (8,965) 2,072
2018
Group statement of cash flows
Unaudited 6 Unaudited 6 Audited
months to months to 30 year to
30 June June 2017 31
2018 December
2017
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
(Loss)/profit before taxation (81) 604
(58)
Adjustments for:
Profit on sale of investment properties - (16)
-
Fair value adjustment for investments - - -
Interest expense - 38 54
Interest income -
(5) -
Changes in working capital:
- (Increase)/decrease in trade and other receivables 51
(11) 755
- Increase/(decrease) in trade payables 52 16 (641)
Net cash (used in)/generated by operating activities (22) 728 52
Cash flows from investing activities
Mezzanine finance facility repaid - - 16
Purchase of investments - -
(1,705)
Sale of investment properties - - 2,816
Net cash (used in)/generated by investing activities - 2,832
(1,705)
Cash flows from financing activities
Repayment of borrowings - (670) (1,982)
Net proceeds on issue of ordinary shares - (8) (9)
Interest received 5
Interest paid - (582) (54)
Net cash used in financing activities 5 (1,260) (2,045)
Net (decrease)/increase in cash and cash equivalents (1,722) (532) 839
Cash and cash equivalents at beginning of period 1,959 1,120 1,120
Cash and cash equivalents at end of period 237 588 1,959
1. Nature of operations and general information
The principal activity of the Group is as an investing company investing in
quoted and unquoted companies to achieve capital growth.
Energiser Investments plc is the Group's ultimate parent company. It is
incorporated and domiciled in Great Britain. The address of Energiser
Investments plc's registered office, which is also its principal place of
business, is Decimal Place, Chiltern Avenue, Amersham, Buckinghamshire, HP6
5FG.
Energiser Investments plc's shares are quoted on AIM, a market operated by the
London Stock Exchange. The consolidated half-yearly financial report has been
approved for issue by the Board of Directors on 27 September 2018.
The financial information set out in this half-yearly financial report does not
constitute statutory accounts as defined in Sections 434(3) and 435(3) of the
Companies Act 2006. The Group's statutory financial statements for the year
ended 31 December 2017 have been filed with the Registrar of Companies and are
available at www.energiserinvestments.co.uk. The auditor's report on those
financial statements was unqualified and did not contain any statement under
Section 498(2) or Section 498(3) of the Companies Act 2006.
2. Basis of preparation
This consolidated half-yearly financial report has been prepared in accordance
with International Accounting Standard 34 - Interim Financial Reporting.
The consolidated half-yearly financial report should be read in conjunction
with the annual financial statements for the year ended 31 December 2017, which
have been prepared in accordance with IFRS as adopted by the European Union.
3. Accounting policies
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 31 December 2017.
4. (Loss)/earnings per ordinary share
The (loss)/earnings per ordinary share is based on the weighted average number
of ordinary shares in issue during the period of 123,912,957 ordinary shares of
0.1p (2017: 123,912,957 ordinary shares of 0.1p) and the following figures:
Unaudited Unaudited Audited
6 months 6 months year to
to 30 to 30 31
June 2018 June 2017 December
2017
(Loss)/profit attributable to equity shareholders GBP'000 (58) (81) 572
(Loss)/earnings per ordinary share (0.11)p (0.07)p 0.46p
Diluted earnings per share is taken as equal to basic earnings per share as the
Group's average share price during the period is lower than the exercise price
and therefore the effect of including share options is anti-dilutive.
5. Income and segmental analysis
Unaudited 6 Unaudited 6 Audited year
months to months to to 31
30 June 30 June December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Segment result
Investment activities:
Administrative expenses (75) (108) (232)
(75) (108) (232)
Rental activities:
Rental income - 66 104
Administrative expenses 12 (1) (3)
Fair value adjustment on investment property - - -
12 65 101
Operating (loss) (63) (43) (131)
Finance income 5 - -
Finance costs - (38) (54)
Other gains - - 789
(Loss)/profit before tax (58) (81) 604
Unaudited as at Unaudited as at Audited
30 June 2018 30 June 2017 as at 31
December
2017
GBP'000 GBP'000 GBP'000
Segment assets
Investment activities:
Non-current assets - -
2,143
Current assets 237 595 -
2,380 595 -
Rental activites:
Non - current assets - investment property - 2,844 -
Current assets - other 44 9 1,992
44 2,853 1,992
Total assets 2,424 3,448 1,992
Segment liabilities
Investment activities:
Current liabilities 234 170 184
234 170 184
Rental:
Current liabilities 34
2 158
Non-current liabilities - -
1,232
2 34
1,390
Current liabilities - corporation tax -
34 84
Current liabilities - deferred tax on fair value -
adjustment 82 -
-
116 84
Total liabilities 352 1,644 218
Total assets less total liabilities 2,072 1,804 1,774
The activity of both the investments and rentals arose wholly in the United
Kingdom. No single customer accounts for more than 10% of revenue.
6. Investments
During the period to 30 June 2018 the group acquired 2,435,710 shares in KCR
Residential Reit PLC, an AIM listed real estate investment trust who specialise
in the acquisition and management of rented residential portfolios in the UK.
Investments
GBP'000
Cost or fair value
At 1 July 2017 and 31 December 2017 -
Additions 1,705
Change in fair value recognised in other comprehensive income 438
At 30 June 2018 2,143
7. Investment property
Investment
Property
GBP'000
Cost or fair value
At 1 July 2017 2,844
Disposal (2,844)
At 31 December 2017 and 30 June 2018 -
END
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