22 May 2019


(‘Energiser’ or the ‘Group)


Chairman’s statement


I am pleased to present the accounts for Energiser for the year ended 31 December 2018. 

Energiser is an Investing Company whose strategy is to invest in quoted and unquoted companies to achieve capital growth.  Much activity has taken place over the last few years which endorses the focus 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.

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 by KCR on 19 March 2018.  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.  The Group’s holding represents 15.42% of KCR’s ordinary share capital. 

KCR is an AIM quoted Real Estate Investment Trust (“REIT”) and its objective is to acquire and manage a substantial rented residential property portfolio in the UK that generates both income flow and capital appreciation for its shareholders.  It intends to prioritise the acquisition of special purpose vehicles containing one or more residential properties as this structure has inherent benefits for the REIT.  KCR’s focus is to invest in more affordable rental properties for private tenants. 

KCR’s share price closed at £0.54p on 31 December 2018 and our investment has therefore been written down by £390,000 to £1,315,000.

KCR’s portfolio of properties was valued at £24.6m at 31 December 2018 and its net asset value per share was 70.97p (30 June 2018: 88.17p).  There is strong demand and a shortage of supply of good quality affordably priced housing in the UK.  Residential dwellings at this level should deliver attractive rental and capital value performance over the medium term.  KCR targets low to mid-price blocks of apartments for rent, aimed at new entrants and young professionals.  Energiser has found this to be a resilient segment of the rental market and has experienced positive rental growth at every rented asset in its portfolio.


The Group had no revenues during the period (2017: £138,000) as it had sold its revenue generating investments in the previous year.  Administrative expenses have reduced by 61% principally due to a significant reduction in salary costs.  The Group made a loss before tax of £498,000 (2017: profit £604,000) which included a provision against the investment in KCR of £390,000.

The Group’s net assets had decreased from £1.77m to £1.28m and now equate to 1.03p per share (2017: 1.43p).


Our investment in KCR represents a substantial part of our asset base and we will continue to watch its progress whilst searching for other investment opportunities to achieve capital growth. 

Stephen Wicks

Group Strategic Report

for the year ended 31 December 2018

The Directors present their Strategic Report on the Group for the year ended 31 December 2018.

Review of the business

Energiser is registered as a Public Limited Company (plc). Its shares of 0.1p each are listed on AIM, part of the London Stock Exchange.

The Group subscribed for 2,435,710 of Ordinary shares in KCR Residential REIT plc at 70p per share.  The chairman’s statement provides further details on KCR’s activities.

Results and performance

The results of the Group for the year show a loss on ordinary activities before and after taxation of £498,000 (2017: profit of £604,000 and £572,000). The shareholders’ funds were £1,276,000 (2017: £1,774,000).

Investment properties were sold during the year ended 31 December 2017 and thus there was no rental income during the year.  The Group’s cash was used predominantly to acquire the investment in KCR.


Energiser’s strategy as an Investing Company is to invest, directly or indirectly, in quoted and unquoted companies and in the property sector to achieve capital growth in the medium term.

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.

2018 2017
Return on project investment £104,000
Net assets £1,276,000 £1,774,000
Net assets per ordinary share 1.03p 1.43p

Principal risks and uncertainties

The management of the business and the nature of the Group’s strategy are subject to a number of risks. The Directors have set out below the principal risks facing the business. Where possible, processes are in place to monitor and mitigate such risks. The Group operates a system of internal control and risk management in order to provide assurance that the Board is managing risk whilst achieving its business objectives. No system can fully eliminate risk and, therefore, the understanding of operational risk is central to the management process.

To enable shareholders to appreciate what the business considers are the main operational risks, they are briefly outlined below:

Risk Potential impact Strategy
Housing market A fall in the housing market in the regions in which the Group operates Inability to realise maximum value in a timely fashion
Adverse effect on the timing of sales
The Group seeks to ensure that investment is made either directly or indirectly into the residential property sector with a view to preserving capital.
Interest rates Significant upward changes in interest rates Increased borrowing costs and a detrimental effect on profit The Group mitigates any adverse exposure to interest rate changes by controlling its gearing

Future developments

The Group will continue to focus on direct and indirect investment in the property sector. It will continue to invest in property operating companies in the residential market.

By order of the Board

Stephen Wicks
Non-executive Chairman

Group statement of comprehensive income

for the year ended 31 December 2018

Continuing operations
Revenue arising in the course of ordinary activities 138
Cost of sales (1) (34)
Gross (loss)/profit (1) 104
Administrative expenses (92) (235)
Operating loss (93) (131)
Finance costs (54)
Finance income 6
(Loss)/Gain on investments (411) 16
Gain on financial instrument 773
(Loss)/profit before taxation (498) 604
Taxation (32)
(Loss)/profit for the year attributable to shareholders of the Group (498) 572
Total comprehensive (loss)/profit for the year attributable to shareholders of the Group (498) 572
(Loss)/profit per share
Basic and diluted (loss)/profit per share from total and continuing operations (0.40)p 0.46p

Diluted (loss)/profit per share is taken as equal to the basic (loss)/profit per share as Energiser’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 2018

Non-current assets
Investments 1,315
Current assets
Trade and other receivables 8 33
Cash and cash equivalents 177 1,959
185 1,992
Total assets 185 1,992
Current liabilities
Trade and other payables 190 185
Tax and social security 34 33
224 218
Total liabilities 224 218
Net assets 1,276 1,774
Share capital 2,392 2,392
Share premium account 7,189 7,189
Convertible loan 88 88
Merger reserve 1,012 1,012
Retained earnings (9,405) (8,907)
Total equity 1,276 1,774

Group statement of changes in equity

for the year ended 31 December 2018

premium account
Convertible loan
Revaluation reserve
Retained earnings
At 1 January 2017 2,392 7,198 88 1,012 537 (9,479) 1,748
Total comprehensive loss (537) 572 35
Issue of equity (9) (9)
Balance at 31 December 2017 2,392 7,189 88 1,012 (8,907) 1,774
Total comprehensive loss (498) (498)
Balance at 31 December 2018 2,392 7,189 88 1,012 (9,405) 1,276

Group statement of cash flows

for the year ended 31 December 2018

Cash flows from operating activities
(Loss)/Profit before taxation (498) 604
Adjustments for:
     Loss on sale of investment properties 23 (16)
     Fair value adjustment for listed investments 390
    Interest expense 54
    Interest income (6)
     Decrease in trade and other receivables 3 51
     Increase/(Decrease) in trade and other payables 5 (641)
Net cash generated (used in)/by operating activities (83) 52
Cash flows from investing activities
Interest received 6
Purchase of Investments (1,705)
Mezzanine finance facility repaid 16
Sale of investment properties 2,816
Net cash generated (used in)/by investing activities (1,699) 2,832
Cash flows from financing activities
Net proceeds on the issue of ordinary shares (9)
Repayment of borrowings (1,982)
Interest paid (54)
Net cash used in financing activities (2,045)
Net (decrease)/increase in cash and cash equivalents (1,782) 839
Cash and cash equivalents at beginning of financial year 1,959 1,120
Cash and cash equivalents at end of financial year 177 1,959


The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2018 or 2017 but is derived from those accounts. Statutory accounts for 2017 have been delivered to the registrar of companies, and those for 2018 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 2018 or 2017.

The Group’s statutory accounts have been prepared under the historical cost convention, except as modified by the fair value of investment property and financial assets and liabilities (including derivatives). They have also been prepared in accordance with the Companies Act 2006 applicable to companies reporting under IFRS and in accordance with the accounting policies set out in the Group’s statutory accounts and International Financial Reporting Standards (IFRS) as adopted by the European Union and that were effective at 31 December 2018.

Those 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 those financial statements. In doing so they have given due regard to the risks and uncertainties affecting the business, the liquidity of investments and the liquidity risk.  The Group and Company make investments for the long term. Accordingly, the Group and Company rarely trade investments in the short term. The Group currently has investments in KCR Residential REIT plc. As this is a traded investment it is deemed liquid. 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.

During the year, new accounting standards were adopted including IAS7 (amended) – Statement of Cash Flows and IFRS 9 Financial Instruments.  The latter applies to classification and measurement of financial assets and financial liabilities, impairment provisioning and hedge accounting. The Group does not presently hold any complex financial instruments.  Given that inter Group balances are eliminated on consolidation and does not affect Group results, no material impairment allowance adjustments are expected.  It is considered that the introduction of IFRS 9 is not expected to have a material impact on the results or cash flows of either the Group or the Company. 

The AGM will be held at Burnham Yard, London End, Beaconsfield, HP9 2JH at 11.00 am on 20 June 2019.

Energiser’s Annual Report and Accounts along with the Notice of Annual General Meeting will be posted to shareholders shortly and will be available to view and download on Energiser’s website at www.energiserinvestments.co.uk.

For further information contact:

Energiser Investments plc

John Depasquale               +44 (0) 1494 762450

Nishith Malde                     +44 (0) 1494 762450

Cairn Financial Advisers LLP

Jo Turner                            +44 (0) 20 7213 0880

Sandy Jamieson

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