Marechale Capital Plc Financial Statements for the Year Ended 30 April 2023

 
TIDMMAC 
 
22 August 2023 
 
Marechale Capital plc 
 
("Marechale" or the "Company") 
 
Financial Statements for the Year Ended 30 April 2023 
 
Marechale Capital Plc (AIM: MAC), an established City of London based corporate 
finance house with a long-term track record and a strong reputation for advising 
and financing high growth consumer brands, leisure, clean energy, mineral 
extraction and technology companies, is pleased to announce its audited final 
results for the year ended 30 April 2023 (the "Period"). 
 
Chairman's Statement 
 
Marechale Capital plc (AIM: MAC), an established City of London based corporate 
finance house with a long-term track record and a strong reputation for advising 
and financing high growth consumer brands, leisure, clean energy and technology 
companies in the UK and Europe, is pleased to announce its audited final results 
for the year ended 30 April 2023 (the "Period"). Marechale also uses its balance 
sheet to co-invest in its client companies, along with warrants and founder 
equity, in order to create shareholder value. 
 
As reported in the interim results statement announced in December 2022, it has 
been a challenging year generally, particularly in the hospitality sector, as a 
number of businesses navigated a continuing period of market uncertainty, with 
increased overheads caused largely by inflation driven wage rises, compounded by 
general staff shortages, and high energy costs, particularly over the winter 
period. Furthermore, customer discretionary spending is also being squeezed. 
However, against this challenging backdrop, there are significant market 
opportunities for Marechale's clients. 
 
The Company entered the Period with good levels of business activity and funded 
clients in both the hospitality sector, as well as clients in other high growth 
sectors. Completed projects last year included raising further equity funding 
for the European telecommunications technology company, Fast2Fibre, and 
additional funding for Weardale Lithium, Chestnut Group - the leading East 
Anglian Inn Group, and Forest Road Brewing Company, the award-winning London 
craft brewer. 
 
Marechale continues to generate professional services income by providing advice 
to its clients. In the last year this included strategic and funding advice for 
Chestnut Group and Burgh Island. All of the fundraisings were at premiums to 
Marechale's equity and warrant holdings investment value. 
 
In the clean energy space, general market uncertainty has impacted some of our 
corporate clients whose progress has been delayed and resulted in some investee 
and advisory company exits being postponed. However, we are pleased to report 
the exit of our investment in Future Biogas, the leading UK farm crop anaerobic 
digestion biogas business, after its acquisition by 3i. We also report that 
Burgh Island, both an investee and advisory client, is for sale 
 
Significant progress continues to be made with the lithium extraction business, 
Weardale Lithium Ltd ("Weardale"), and our pipeline of new and increasingly 
diversified projects remains robust. 
 
Weardale is Marechale's largest investment, holding 500,000 founder shares and 
22,400 options with a combined value of £2.8 million based on the last funding 
round in July 2022, which has been recorded in the balance sheet. Weardale has 
secured mineral extraction rights in Co. Durham via existing boreholes where 
there is proven lithium in the brine hundreds of feet below the surface. 
Marechale remains optimistic for a positive future outcome on this investment. 
 
Investments and warrants in client companies generated losses of £52,000 (2022: 
gain of £2,716,000). It is worth noting that we have £770,000 of unused capital 
tax losses to offset against any possible future tax liability on realisation of 
gains. 
 
During the last year, Marechale generated revenue of £376,000 (2022: £622,000), 
and, although our gross profit margin decreased from 53% to 32%, due to high 
3[rd] party commissions associated with one particular client, administrative 
expenses remained steady at £488,000 (2022: £483,000). 
 
In summary, we announce a net loss for the year of £426,000 (2022: profit of 
£2,562,000): however, as noted above, 2022's profits included £2,716,000 
unrealised investment gains.  During the same period, Marechale's balance sheet 
value has only marginally decreased to £3,227,000 (2022: £3,630,000) 
representing Net Asset Value/Share of 3.4p (2022: 3.8p). 
 
The Company's focus is to use its reputation and deal flow as a corporate 
finance adviser to build shareholder value in Marechale's balance sheet. This 
has been achieved by negotiating equity and warrant positions, and joint venture 
arrangements as part of its terms of engagement with growth company clients. 
Marechale's historical investment performance for its investor relationships has 
been excellent in this regard, having achieved double digit internal rates of 
return across all the companies that it has funded since 2010. We are confident 
that our investments in Weardale Lithium, Burgh Island, Chestnut Group, 
Fast2Fibre, and Forest Road Brewery, amongst others, will deliver uplifts in 
value in due course. The Company has continued with its strategy of utilising 
its balance sheet to take enhanced positions in its client companies. 
 
One of the most recent strategic events is to welcome Chris Kenning as a with 
his strategic investment of 9.9% of the Company in June 2023. As announced at 
the time, the plan is to digitise Marechale's activities and continue to develop 
strategic partnerships with the objective of enhancing shareholder value. 
 
Whilst the current economic climate remains challenging, the Board considers 
that the Company has sufficient cash reserves for its current requirements and 
remains positive about the investments that it holds in its client companies, 
and is optimistic that the Company will continue to generate further uplifts on 
its current and future equity and warrant investments, both in the short and 
longer term as the Board and Management Team continue to use Marechale's proven 
track record as a corporate finance adviser in the £5-50 million Enterprise 
Value PE sector for new projects and partnerships. 
 
Mark Warde-Norbury 
 
Chairman 
 
21 August 2023 
 
This announcement contains inside information for the purposes of the UK Market 
Abuse Regulation. 
 
For further information please contact: 
 
Marechale Capital plc                            Tel: [phone] 
Mark Warde-Norbury / Patrick Booth-Clibborn 
Cairn Financial Advisers LLP (Nomad and Broker)  Tel: [phone] 
Jo Turner / Sandy Jamieson 
 
Statement of Comprehensive Income 
 
For year ended 30 April 2023 
 
                                Year ended             Year ended 
                                    30-Apr                 30-Apr 
                                      2023                   2022 
                                       (£)                    (£) 
 
Continuing 
operations 
 
Revenue                            375,726                621,573 
Cost of sales                    (260,581)              (291,632) 
 
Gross profit                       115,145                329,941 
 
Administrative                   (487,626)              (483,499) 
expenses 
 
Operating loss                   (372,481)              (153,558) 
 
Finance                              (912)                  (876) 
expense 
Other                             (52,124)              2,716,237 
(losses)/ 
gains 
 
(Loss)/profit                    (425,516)              2,561,803 
before tax 
 
Taxation                                 -                      - 
 
(Loss)/ profit                   (425,516)              2,561,803 
for the year 
on continuing 
operations 
 
Earnings per                       (Pence)                (Pence) 
share 
 
Basic           - Continuin                                  2.95 
                g operation    (0.45) 
                s 
                - Diluted                                    2.70 
                               (0.40) 
 
Statement of 
Comprehensive 
Income 
 
(Loss)/ profit                   (425,516)              2,561,803 
for the year 
on continuing 
operations 
 
Total 
recognised 
comprehensive 
profit 
(all                             (425,516)              2,561,803 
attributable 
to owners of 
the company) 
 
Statement of Financial Position 
 
As at 30 April 2023 
 
                    Year ended  Year ended 
                        30-Apr      30-Apr 
                          2023        2022 
                           (£)         (£) 
 
Current 
assets 
Investment                   2           2 
in 
subsidiary 
Equity               2,862,653   3,125,189 
investments 
at fair 
value 
through 
profit and 
loss 
Warrants at            130,076     146,589 
fair value 
through 
profit and 
loss 
Trade and               75,933      43,778 
other 
receivables 
Cash and               282,795     413,970 
cash 
equivalents 
 
Total                3,351,459   3,729,528 
current 
assets 
 
Total assets         3,351,459   3,729,528 
 
Current 
liabilities 
Trade and             (91,558)    (57,368) 
other 
payables 
Borrowings            (10,000)    (10,000) 
 
Total                (101,558)    (67,368) 
current 
liabilities 
 
Net current          3,249,902   3,662,160 
assets 
 
Long-term 
liabilities 
Borrowings            (22,500)    (32,500) 
 
Net assets           3,227,402   3,629,660 
 
Equity 
Capital and 
reserves 
attributable 
to equity 
shareholders 
 
Share                  763,690     763,023 
capital 
Share                  329,330     328,413 
premium 
Reserve for           (50,254)    (50,254) 
own shares 
Reserve for             83,988      62,313 
share based 
payments 
Retained             2,100,648   2,526,165 
profits/(loss 
es) 
 
                     3,227,402   3,629,660 
 
Statement of Changes in Equity 
 
For year ended 30 April 2023 
 

                                Share    Share   Reserve   Reserve   Retained 
                              capital  premium   for own       for   earnings 
                                                  shares     share 
                                                             based 
                                                          payments 
 
Company 
Balance at 30 April 2021      643,690   85,247  (50,254)    42,709   (35,638) 
 
Total comprehensive income 
Profit for the financial            -        -         -    19,604  2,561,803 
year 
Issued in year*               119,333  243,166         -         -          - 
Total comprehensive income    119,333  243,166         -    19,604  2,561,803 
 
Balance at 30 April 2022      763,023  328,413  (50,254)    62,313  2,526,165 
 
Total comprehensive income 
(Loss) for the financial            -        -         -    21,675  (425,517) 
year 
Issued in year*                   667      917         -         -          - 
Total comprehensive income        667      917         -    21,675  (425,517) 
 
Balance at 30 April 2023      763,690  329,330  (50,254)    83,988  2,100,648 
 
* Issue of ordinary shares 
in the year (net of 
expenses) 
 
Statement of Changes of Cash Flows 
 
For year ended 30 April 2023 
 
                      Year ended   Year ended 
                          30-Apr       30-Apr 
                            2023         2022 
                             (£)          (£) 
Net cash 
from 
operating 
activities 
(Loss)/profi           (425,516)    2,561,803 
t before 
tax 
Reverse                   21,676       19,603 
provision 
for share 
based 
payments 
Reverse                   16,513  (2,716,237) 
losses/ 
(gains) on 
fair value 
investment 
through 
profit and 
loss 
Reverse                   18,075            0 
losses on 
disposal of 
investments 
Reverse net                  912          876 
interest 
expense 
 
Operating              (368,341)    (133,955) 
cash 
outflows 
before 
movements 
in working 
capital 
 
Movement in 
working 
capital 
(Increase)/d            (32,157)        6,822 
ecrease in 
receivables 
Increase/(de              34,190      (3,845) 
crease) in 
payables 
Tax paid                       -            - 
 
                           2,033        2,977 
Cash                   (366,308)    (130,978) 
outflow 
from 
operating 
activities 
 
Investment 
activities 
Interest                       0          (1) 
received 
Expenditure                    0     (42,462) 
on equity 
investments 
Proceeds                 226,925            0 
from sale 
of equity 
investments 
through 
profit and 
loss 
 
Cash                     226,925     (42,463) 
inflow/(outf 
low) from 
investing 
activities 
 
Financing 
Issue of                   1,584      362,500 
ordinary 
share 
capital 
Repayment               (10,000)      (7,500) 
of 
borrowings 
Interest                   (912)        (876) 
payable 
 
Cash inflow              (9,328)      354,124 
from 
financing 
activities 
 
Net                    (148,711)      180,683 
increase in 
cash and 
cash 
equivalents 
 
Cash and                 413,970      233,287 
cash 
equivalents 
at start of 
the 
financial 
year 
Cash and          16     282,795      413,970 
cash 
equivalents 
at end of 
the 
financial 
year 
 
Notes to the Financial Statements 
 
Year ended 30 April 2023 
 
1. General information 
 
Marechale Capital plc is a company registered in England and Wales under the 
Companies Act 2006. The Company's principal activities are the provision of 
professional services advice and broking services to companies. The financial 
statements are presented in pounds sterling, the currency of the primary 
economic environment in which the Company operates. 
 
The Company'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 Company. The Company has 
unpredictable revenue due to the nature of corporate finance advisory and the 
reliance upon deal-driven transactions, however as at the year end the company 
had £283k of cash reserves  (2022: £414k)  which as at that date equated to 
approximately 7 months of overheads. Whilst the company generated operating 
losses of £372k in the financial year (2022: £153k) the directors remain 
confident that the project pipeline will generate sufficient  income on top of 
the cash reserves in order to meet the company's liabilities as they fall due 
over the next twelve months. 
 
Furthermore, there is the ability to fund working capital by equity issues, 
sales of equity investments and/or warrants and deferral of directors' salaries. 
 
b. Basis of accounting 
 
These financial statements have been prepared in accordance with UK Adopted 
International Reporting Standards ('IFRS'). 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, as described below. 
 
The Directors have chosen not to prepare consolidated accounts because the two 
subsidiaries, Marechale Ltd and Marechale Capital Investments Ltd, are both 
dormant, have never traded, and therefore highly immaterial to the financial 
statements. 
 
Subsidiaries are entities over which the Group has control, being the power to 
govern the financial and operating policies of the acquired entity so as to 
obtain benefits from its activities. 
 
3. Business and geographical segments 
 
The directors consider that there is only one activity undertaken by the 
Company, that of corporate finance professional services advisory. All of this 
activity was undertaken in the United Kingdom. 
 
                                                                 2023     2022 
                                                                  (£)      (£) 
 
Broking commissions and fees earned from corporate finance    375,726  621,573 
 
4. Other gains/ (losses) 
 
                                             2023       2022 
                                              (£)        (£) 
Realised (losses) on equity investments  (18,075)          0 
Unrealised gains on equity investments   (17,536)  2,659,661 
Unrealised gains on warrants             (16,513)     56,576 
                                         (52,124)  2,716,237 
 
5. Earnings per share 
 
                                                 Earnings    Earnings 
                                                      (£)         (£) 
 
                                                (425,516)   2,561,803 
Based on a gain/ (loss) of                      2,561,803     245,886 
 
                                               No. shares  No. shares 
                                               95,419,581  86,947,358 
Weighted average number of Ordinary Shares in  86,947,358  62,772,480 
issue for the purpose of basic earnings per 
share 
 
Weighted average number of Ordinary Shares in  94,784,268  70,626,730 
issue for the purpose of diluted earnings per 
share 
 
6. Other matters and Market Abuse Regulation (MAR) Disclosure 
 
The financial information for the year ended 30 April 2023 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: 
 
7. Valuation of investments including options 
 
The Directors have considered the fair value adjustment made on the investments 
held at fair value through profit or loss. In 2023 a net downward fair value 
adjustment on the investments and options was made to the total of £52,000, and 
in 2022 a net upward adjustment of £2,716,000, consisting of positive 
adjustments of £2,806,000 uplift on Weardale Lithium Limited, offset by net 
negative adjustments on other companies. This along with other valuations are 
estimates based on the Directors' assessment of the performance of the 
underlying investment and reliable information such as recent fundraising. There 
is however inherent uncertainty when valuing private companies such as these in 
the natural resources sector. 
 
8. Post balance sheet events 
 
On 28 June 2023 the Company issued 10,480,000 shares at 2.25 per share raising 
£235,800. 
 
Cautionary statement 
 
Certain statements made in this announcement are forward-looking statements. 
Such statements are based on current expectations and assumptions and are 
subject to a number of risks and uncertainties that could cause actual events or 
results to differ materially from any expected future events or results 
expressed or implied in these forward-looking statements. Persons receiving this 
announcement should not place undue reliance on forward-looking statements. 
Unless otherwise required by applicable law, regulation or accounting standard, 
the Company does not undertake to update or revise any forward-looking 
statements, whether as a result of new information, future developments or 
otherwise. 
 
 
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August 22, 2023 02:00 ET (06:00 GMT)