Share Name Share Symbol Market Type Share ISIN Share Description
Marechale Capital Plc LSE:MAC London Ordinary Share GB0005401087 ORD 0.8P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.0% 0.775 0.70 0.85 0.775 0.775 0.775 0.00 08:00:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Financial 0.5 -0.3 -0.5 - 0

Marechale Capital PLC Final Results

29/08/2019 3:48pm

UK Regulatory (RNS & others)


Marechale Capital (LSE:MAC)
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RNS Number : 5946K

Marechale Capital PLC

29 August 2019

29 August 2019

Marechale Capital plc

("Marechale" or the "Company")

Consolidated Financial Statements for the year ended 30 April 2019

Marechale is pleased to announce its final results for the year ended 30 April 2019.

Chairman's Statement

Marechale Capital's revenues for the year of GBP512,000 are down on last year (2018: GBP675,000), resulting in a lower gross profit of GBP400,000 (2018: GBP595,000). The fall in revenues can be partially explained by a delay in closing a number of projects which we announced in our trading update statement in May. It is also a reflection of the wider market where investor appetite is subdued due to uncertainty over Brexit, and transactions are generally taking longer to complete.

The fall in revenues has contributed to an operating loss of GBP288,000 for the year (2018: GBP17,000 loss). Administrative Expenses in the year were GBP688,000 compared to GBP612,000 in 2018; the former includes a provision of GBP40,000 to compensate a Director for the early termination of his contract, and the latter contained a one-off credit of GBP84,000 to reverse the accumulated cost of options granted under the Company Option Scheme, which had been forfeited. The Company has also moved offices to less expensive accommodation. The Directors anticipate that annual savings of the order of GBP175,000 will result from these measures.

Equity Investments and Warrants are valued at 'fair value', typically at a price which reflects their last funding round, and underlying movement in fair value is reflected through the Profit and Loss Account in accordance with IFRS 9: in previous years unrealised gains on Equity Investments were recorded to the Revaluation Reserve and released to the Profit and Loss Account when realised. Please note that this is a significant change in accounting policy, more fully explained in the paragraph immediately below.

Investments in three client companies have shown modest realised gains of GBP78,750 (compared to unrealised losses of GBP118,500 in 2018). However, under the new Accounting Standard, IFRS 9, 'Accounting for Financial Instruments', because GBP57,000 of these gains had been recorded as the fair value of those investments at 30 April 2018 as reflected in the Revaluation Reserve as an unrealised gain, we may no longer record them to the Profit and Loss Account in the current year, and instead this was recorded directly to Profit and Loss Reserves. Thus the only gains recorded this year amounting to GBP21,750 result from fair value gains in the current year. Furthermore, under the same Standard, the Company has made a GBP30,100 impairment provision for unrealised losses, resulting in overall 'Other Losses' of GBP8,350.

The net effect is a loss for the year before tax of GBP298,000 (2018: Loss of GBP198,000).

The balance sheet value has reduced during the year to GBP179,000 (2018: GBP465,000) which is more fully explained in the Statement of Changes in Equity.

The Company has previously reported on its investment in Northfield UK Solar Limited ("NUKS") and, as previously announced, it had been a challenging time for NUKS owing to the changes in the renewable energy fiscal regime and the impracticalities of integrating new renewable schemes into the UK's traditional energy infrastructure. Following a series of value write downs, NUKS has been wound up resulting in a modest return of capital to shareholders.

On the positive side, the Company had a record year for exits with a total of five exits for Marechale financed projects during the period. This included West Country Renewables, a solar and wind power business, which was sold to Community Power Cornwall, resulting in a high return to investors and on Marechale's founder equity.

Investors in Marechale projects also benefited from the sale of Egmere and Grange Park anaerobic digestion plants operated by Future Biogas, to John Lang Environmental Assets Group, The Inn Collection Group to Alchemy Partners, and the sale of Sheen Falls lodge, all of which generated multiple returns for investors.

On new projects the Company had another busy year successfully completing several leisure deals for existing and new clients including acquisition finance for the East Anglia based luxury inn group Chestnut Inns, West Country pub group Stay Original and leading biogas operator Future Biogas. Further growth capital funding was completed for national brewpub business Brewhouse & Kitchen and award-winning craft distiller Oslo Distillery. Additionally, the Company has completed advisory work for a wide range of consumer brand, hospitality and renewable energy businesses.

Further information is available on the Marechale Capital website.

Despite a challenging market the Company continues to maintain its position as a leading adviser and financier to UK and European growth hospitality companies and hotels, and pub assets as well as advising and financing one of the UK's largest biogas companies.

The Management team are highly selective about the businesses Marechale advises and continue to make good returns and attractive IRRs for the investors who have financed these projects and investments over the last 9 years.

In addition, the Company has taken action to reduce its monthly running costs and continues to keep its policy of operating a low-cost investment banking model.

Marechale has maintained its policy of taking equity and warrants in the projects it finances which the Board hopes will generate an uplift to shareholders.

The Board continues to review all options to add value and the Directors will be seeking shareholder approval at the Company's AGM to disapply preemption rights in order to retain flexibility for possible future equity issues for the Company, should this be deemed to be the right course of action as well as approval for a new option scheme to incentivize key existing and new management.

Mark Warde-Norbury

Chairman

28 August 2019

For further information please contact:

 
 Marechale Capital                              Tel: +44 (0)20 7628 5582 
  Mark Warde-Norbury / Patrick Booth-Clibborn 
 Cenkos Securities Corporate Finance            Tel: +44 (0)20 7397 8900 
  Azhic Basirov / David Jones 
 
 
 Consolidated Income Statement 
 
 Year ended                                               30 April    30 April 
                                                 Notes        2019        2018 
                                                               GBP         GBP 
 
 Revenue                                         3         511,691     674,756 
 Cost of sales                                           (111,323)    (79,721) 
 
 Gross profit                                              400,368     595,035 
 
 Administrative expenses                         4       (688,171)   (611,813) 
 
 Operating loss                                          (287,803)    (16,778) 
 
 Finance expense                                             (149)        (21) 
 Other losses                                              (8,357)   (118,500) 
 Net loss in respect of associate                          (1,513)     (3,549) 
 Provision for project loss in associate                     (195)    (59,600) 
 
 Loss before tax                                         (298,017)   (198,448) 
 
 Taxation                                                        -           - 
 
 Loss for the year                                       (298,017)   (198,448) 
                                                        ----------  ---------- 
 
 
 Loss per share                                  5           Pence       Pence 
 
  - Basic                                                   (0.52)      (0.34) 
  - Diluted                                                 (0.52)      (0.34) 
 
 
 Consolidated Statement of Comprehensive Income 
 
 Loss for the year                                     (298,017)   (198,448) 
 
 Other comprehensive income 
 
 Fair value adjustment on equity investment 
  through other comprehensive income                           -    (12,500) 
                                                      ----------  ---------- 
                                                               -    (12,500) 
 Total recognised comprehensive loss 
 (all attributable to owners of the 
  parent)                                              (298,017)   (210,948) 
                                                      ----------  ---------- 
 
 
 Consolidated Balance Sheet 
 
 As at                                                            30 April      30 April 
                                                                      2019          2018 
                                                        Notes          GBP           GBP 
 Non current assets 
 Investment in associate                                                 -        14,038 
 
 Current assets 
 Investment in associate                                            12,330             - 
 Equity investments at fair value through 
  profit and loss                                                   75,479       174,619 
 Warrants at fair value through profit 
  and loss                                                           1,550        78,388 
 Trade and other receivables                                       105,206       201,174 
 Cash and cash equivalents                                         148,600       118,340 
 
 Total current assets                                              343,165       572,521 
                                                               -----------  ------------ 
 
 Total assets                                                      343,165       586,558 
                                                               -----------  ------------ 
 
 Current liabilities 
 Trade and other payables                                        (164,028)     (121,344) 
 
 Total current liabilities                                       (164,028)     (121,344) 
                                                               -----------  ------------ 
 
 Net assets                                                        179,137       465,215 
                                                               -----------  ------------ 
 
 Equity 
 Capital and reserves attributable to 
  equity shareholders 
 
 Share capital                                          6          461,449       461,449 
 Fair value reserve through other 
  comprehensive income                                                   -        81,826 
 Reserve for own shares                                           (50,254)      (50,254) 
 Reserve for share based payments                                   11,939             - 
 Retained losses                                                 (243,997)      (27,806) 
 
                                                                   179,137       465,215 
                                                               -----------  ------------ 
 
 
 
 Statement of Changes in Equity 
 
                                                                            Reserve 
                                       Share         Share   Reserve for    for own      Retained 
                                     capital       premium    fair value     shares      earnings 
                                         GBP           GBP           GBP        GBP           GBP 
 Balance at 30 April 2017          2,474,308     1,247,379        94,326   (50,254)   (3,005,144) 
 
 Capital reduction               (2,012,859)   (1,247,379)             -          -     3,260,238 
 Reserve for share based 
  payments                                 -             -             -          -      (84,453) 
 Transactions with owners        (2,012,859)   (1,247,379)             -          -     3,175,786 
                                ------------  ------------  ------------  ---------  ------------ 
 
 Total comprehensive income 
 Loss for the financial 
  period                                   -             -             -          -     (198,447) 
 Revaluation during the 
  financial year                           -             -      (12,500)          -             - 
 Total comprehensive income                -             -      (12,500)          -     (198,447) 
                                ------------  ------------  ------------  ---------  ------------ 
 
 Balance at 30 April 2018            461,449             -        81,826   (50,254)      (27,806) 
                                ------------  ------------  ------------  ---------  ------------ 
 
 Total comprehensive income 
 Loss for the financial 
  period                                   -             -             -          -     (298,017) 
 Transfer to P&L Reserves 
  per IFRS#9                               -             -      (81,826)          -        81,826 
 Total comprehensive income                -             -      (81,826)          -     (216,191) 
                                ------------  ------------  ------------  ---------  ------------ 
 
 Balance at 30 April 2019            461,449             -             -   (50,254)     (243,997) 
                                ------------  ------------  ------------  ---------  ------------ 
 
 
                                 2019   2018 
                                  GBP    GBP 
 
 Reserve for share based 
 payments                      11,939      - 
 
                               11,939      - 
                              -------  ----- 
 
 
 Consolidated Cash Flow Statement 
 
 Year ended                                                              30 April    30 April 
                                                                             2019        2018 
                                                                              GBP         GBP 
 Net cash from operating activities 
 Loss before tax                                                        (298,017)   (198,448) 
 Provision for/(reversal of) share based 
  payments                                                                 11,939    (84,453) 
 Reverse losses on fair value investment 
  through profit and loss                                                   8,357     118,500 
 Reverse loss in Associate Company                                          1,513       3,549 
 Reverse provision for losses in Associate 
  Company                                                                     195      59,600 
 Reverse net interest expense                                                 149          21 
 
 Operating cash flows before movements in 
  working capital                                                       (275,864)   (101,231) 
                                                                       ----------  ---------- 
 
 Movement in working capital 
 Decrease in receivables                                                   95,969      20,502 
 Increase/(decrease) in payables                                           42,684    (81,914) 
 Tax paid                                                                       -        (93) 
 
                                                                          138,653    (61,504) 
                                                                       ----------  ---------- 
 
 Cash flow from operating activities                                    (137,212)   (162,735) 
                                                                       ----------  ---------- 
 
 Investment activities 
 Interest received                                                             46         113 
 Expenditure on equity investments                                       (12,700)    (21,280) 
 Proceeds from sale of equity investments 
  through profit and loss                                                 103,483           - 
 Proceeds from sale of warrants through 
  profit and loss                                                          76,838           - 
 
 Cash flow from investing activities                                      167,667    (21,167) 
                                                                       ----------  ---------- 
 
 Financing 
 Interest paid                                                              (195)       (134) 
 
 Cash flow from financing activities                                        (195)       (134) 
                                                                       ----------  ---------- 
 
 Net increase/(decrease) in cash and cash equivalents                      30,260   (184,036) 
                                                                       ----------  ---------- 
 
 Cash and cash equivalents at start of the 
  financial year                                                          118,340     302,375 
 Cash and cash equivalents at end of the 
  financial year                                                          148,600     118,340 
 
 Increase/(decrease) in cash and cash equivalents                          30,260   (184,036) 
                                                                       ----------  ---------- 
 
 

Notes to the financial statements

Year ended 30 April 2019

1. General information

Marechale Capital plc is a company registered in England and Wales under the Companies Act 2006. The Group's principal activities are the provision of advice and broking services to companies. The financial statements are presented in pounds sterling, the currency of the primary economic environment in which the Group operates.

The Group's registered office and principal place of business is 46 New Broad Street, London, EC2M 1JH. The Company's registered number is 03515836.

2. Basis of preparation

a. Going concern

In establishing the applicability of the going concern basis, the Directors have made enquiries as to the financial resources of the Group. The Company does not benefit from reliable repetitive income, and instead relies on deal-driven transactions whose timing is very difficult to predict accurately. Whilst the Directors are confident that they will generate enough income on an annual basis in order to continue as a going concern, they have 'alternative strategies' in place, e.g. informal arrangements with creditors and/or the ability to sell both Equity investments and/or Warrants should the need arise to overcome any potential short-term cash flow shortage. The Directors are also confident that they could raise sufficient funds through the issue of further equity in the market should the need arise: however, given the trading results for the year and the current economic uncertainty, the Directors recognise that there is a significant material uncertainty that either will happen. Nonetheless, the Directors have determined to prepare the Accounts on a Going Concern basis.

b. Basis of accounting

These financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union, IFRS Interpretations Committee ('IFRS IC') interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.

The financial statements have been prepared on the historical cost basis as modified by the valuation of certain financial instruments.

3. Business and geographical segments

The directors consider that there is only one activity undertaken by the Group, that of corporate finance advisory. All of this activity was undertaken in the United Kingdom.

 
                                                    2019      2018 
                                                     GBP       GBP 
 
 Broking commissions and fees earned from 
 corporate finance                               511,691   674,756 
                                                --------  -------- 
 

4. Administrative expenses

 
                                              2019       2018 
                                               GBP        GBP 
 
 Administrative expenses                   636,432    671,266 
 Profit share                                    -     25,000 
 Termination of Director's contract         39,800          - 
 Share based payments                       11,939   (84,453) 
                                          --------  --------- 
                                           688,171    611,813 
                                          --------  --------- 
 

5. Earnings per share

 
                                                                        Earnings     Earnings 
                                                                            2019         2018 
                                                                             GBP          GBP 
 Based on a loss of                                                    (298,017)    (198,448) 
                                                                     -----------  ----------- 
 
                                                                      No. shares   No. shares 
 Weighted average number of Ordinary 
  Shares in issue for the purpose 
  of basic earnings per share                                         57,681,151   57,681,151 
 
 Weighted average number of Ordinary 
  Shares in issue for the purpose 
  of diluted earnings per share                                       57,681,151   57,681,151 
 
 
 

6. Share capital

 
 Shares                                    Ordinary        Deferred        Issued 
                                             shares          shares         share 
                                           (number)        (number)       capital 
 Issued at 30 April 
  2017:                                                                     (GBP) 
  Ordinary shares of 1p                  57,681,151               -       576,812 
  Deferred shares of 1p                           -     189,749,640     1,897,496 
                                        -----------  --------------  ------------ 
                                         57,681,151     189,749,640     2,474,308 
 Effect of Capital Reorganisation 
  28 June 2017: 
  Reduction in nominal value/share 
   of 0.2p                                        -               -     (115,363) 
  Cancellation of Deferred shares                 -   (189,749,640)   (1,897,496) 
 
 Issued at 30 April 2018, Ordinary 
  shares of 0.8p                         57,681,151               -       461,449 
 Issued/cancelled during year                     -               -             - 
                                        -----------  --------------  ------------ 
 Issued at 30 April 2019, Ordinary 
  shares of 0.8p                         57,681,151               -       461,449 
                                        -----------  --------------  ------------ 
 

Options (number/weighted average exercise price ('WAEP'))

 
                                                 Options    WAEP 
                                                (number)     (p) 
 Outstanding at 1 April 2017                  12,113,042   2.58p 
 Forfeited within the period                (12,113,042)   2.58p 
                                           -------------  ------ 
 Outstanding and exercisable at 30 April 
  2018                                                 -       - 
 Granted within the period                     5,768,115   1.12p 
                                           -------------  ------ 
 Outstanding and exercisable at 30 April 
  2019                                         5,768,115   1.12p 
                                           -------------  ------ 
 

The options granted in 2019 generated a cost of GBP11,939 (2018: GBP84,453 credit).

7. Other matters and Market Abuse Regulation (MAR) Disclosure

The financial information for the year ended 30 April 2019 set out in this announcement does not constitute statutory financial statements, as defined in section 434 of the Companies Act 2006, but is based on the statutory financial statements for the year then ended. The auditors have issued an unqualified opinion on these financial statements; their report included the following statement:

'Material uncertainty related to Going Concern

In forming our opinion on the financial statements we have considered the adequacy of the disclosure made in note 2 to the financial statements concerning the company's ability to continue as a going concern. The company generated a loss during the year of GBP298,017 and should losses continue to be generated at a similar level without additional capital being raised from the shareholders then the company will likely breach its capital resources requirement with the FCA and not be able to meet its liabilities as they fall due in the foreseeable future.

Whilst the Directors believe sufficient profits will be generated or additional capital provided by the shareholders these conditions along with other matters discussed in note 2 to the financial statements indicate the existence of a significant uncertainty which may cast significant doubt over the company's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.'

Copies of the Company's full audited Annual Report and Financial Statements for the year ended 30 April 2019 will be delivered to the Registrar of Companies and sent to shareholders in due course, and will be available on the Company's website: www.marechalecapital.com.

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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