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 £494,100 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 £0.70 a share for a total of
£1,704,997. 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 £1,210,897 and the novation of
the rights to its short term loan investment of £494,100 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 £0.88p per share on
30 June 2018 resulting in a fair
value adjustment of £438,000 and a related deferred tax charge of
£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: £82,000) as
it had sold its revenue generating investments. It made a loss of
£58,000 (2017: £81,000) and had other comprehensive income of
£438,000 relating to the revaluation gain on the investment in
KCR. Administrative expenses decreased from £109,000 to
£63,000. Finance costs reduced to Nil (2017: £38,000) 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 £2.07m (2017: £1.80m)
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 6 months to 30 June 2018 |
Unaudited
6 months to 30 June 2017 |
Audited
year to 31 December 2017 |
|
Note |
£’000 |
£’000 |
£’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
Gain on sale of investment properties
Gain on financial instrument |
|
5
—
— |
—
—
— |
—
16
773 |
(Loss)/profit
before taxation |
5 |
(58) |
(81) |
604 |
Taxation |
|
— |
— |
(32) |
(Loss)/profit for
the period attributable to shareholders of the Company |
|
(58) |
(81) |
572 |
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 |
64 |
572 |
(Loss)/earnings per
share |
|
|
|
|
Basic and diluted
(loss)/earnings per share from total and continuing operations |
4 |
(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.
Group statement of financial
position
|
|
Unaudited as at 30 June 2018 |
Unaudited
as at 30 June 2017 |
Audited as
at 31 December 2017 |
|
Note |
£’000 |
£’000 |
£’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 |
|
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
£’000 |
Balance at 1 January
2017 |
2,392 |
7,198 |
88 |
1,012 |
537 |
— |
(9,479) |
1,748 |
Legal fees on issue of
equity |
|
(8) |
— |
— |
— |
— |
— |
(8) |
Realisation of
available for sale financial asset |
— |
— |
— |
— |
(537) |
— |
537 |
— |
Total comprehensive
income |
— |
— |
— |
— |
— |
|
64 |
64 |
Balance at 30 June
2017 |
2,392 |
7,190 |
88 |
1,012 |
— |
— |
(8,878) |
1,804 |
Legal fees on issue of
equity |
— |
(1) |
— |
— |
— |
— |
— |
(1) |
Total comprehensive
loss |
— |
— |
— |
— |
— |
— |
(29) |
(29) |
Balance at 31
December 2017 |
2,392 |
7,189 |
88 |
1,012 |
— |
— |
(8,907) |
1,774 |
Available for sale
reserve |
— |
— |
— |
— |
— |
356 |
— |
356 |
Total comprehensive
loss |
— |
— |
— |
— |
— |
— |
(58) |
(58) |
Balance at 30 June
2018 |
2,392 |
7,189 |
88 |
1,012 |
— |
356 |
(8,965) |
2,072 |
Group statement of cash flows
|
Unaudited 6 months to 30 June 2018 |
Unaudited
6 months to 30 June 2017 |
Audited
year to 31 December 2017 |
|
£’000 |
£’000 |
£’000 |
Cash flows from
operating activities |
|
|
|
(Loss)/profit before
taxation |
(58) |
(81) |
604 |
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 |
(11) |
755 |
51 |
- 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
Purchase of investments |
—
(1,705) |
—
— |
16
— |
Sale of investment
properties |
— |
— |
2,816 |
Net cash (used
in)/generated by investing activities |
(1,705) |
— |
2,832 |
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 6 months to 30 June 2018 |
Unaudited
6 months to 30 June 2017 |
Audited
year to 31 December 2017 |
(Loss)/profit
attributable to equity shareholders £’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 months to 30 June 2018 |
Unaudited
6 months to 30 June 2017 |
Audited
year to 31 December 2017 |
|
£’000 |
£’000 |
£’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 30 June 2018 |
Unaudited
as at 30 June 2017 |
Audited as at 31 December 2017 |
|
£’000 |
£’000 |
£’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 |
2 |
158 |
34 |
Non-current
liabilities |
— |
1,232 |
— |
|
2 |
1,390 |
34 |
|
|
|
|
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
£’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
£’000 |
Cost or fair
value |
|
At 1 July 2017 |
2,844 |
Disposal |
(2,844) |
At 31 December 2017
and 30 June 2018 |
— |