MARECHALE CAPITAL PLC

Annual / Quarterly Financial Statement • Jul 25, 2013

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RNS Number : 0948K

Marechale Capital PLC

25 July 2013

25 July 2013

Marechale Capital plc

("Marechale" of the "Company")

Consolidated Financial Statements for the year ended 31 March 2013

Chairman's Statement

Marechale Capital Plc ('Marechale') has faced a number of challenges during the last financial year ending March 2013. The Company has continued to develop its corporate finance business specialising in advising and raising capital for high growth UK companies. However, turnover from advisory and commission revenue during the year decreased by 15% to £591,000 (2012: £694,000), and, coupled with increased payments to intermediaries through whom the Company accesses funding for Clients, this has resulted in a post tax loss of £16,400.

There has been no shortage of deal flow in the year, and the Company has been active in marketing its services and has engaged and completed fifteen transactions of which nine generated the usual advisory and commission fees, and also resulted in additional equity and warrants on these transactions.

However, the general market conditions have meant that, whilst we have successfully raised equity funding for a number of clients, it has been frustratingly slow in getting transactions completed and, significantly, a number of projects budgeted to close by the end of the last financial year have been carried forward into the current financial year. 

Marechale's focus is on advising growth companies and funds, with a particular expertise in the renewables, and consumer leisure sectors. The Company continues to build its leading reputation in advising and fundraising in these sectors.

Whilst the revenue plan for 2012-13 has not been achieved, the Board is happy with the continued accumulation of equity and warrant value on projects completed. Equity investments are recorded at 'fair-value' in the balance sheet and show a net uplift of £23,000 credited to the Revaluation Reserve; furthermore the Board believe that these investments have excellent further uplift potential in the medium to longer term. Warrants are recorded on the same basis and show an uplift of £66,000, credited to the Profit and Loss Account with further uplift potential in the long term.

The two key areas of activity for the business are Growth Capital through private equity transactions, for more established businesses, and Development Capital fundraising for smaller growth companies, the latter typically being Enterprise Investment Scheme (EIS) qualifying. A number of transactions have been completed including the £6m of funding for a new European trophy asset hotel group, and assisting in the £5m funding for new pub group Brewhouse and Kitchen. More recently Marechale has been mandated, and is successfully completing, its first two financings for growth capital projects where the Company is arranging both the debt and equity funding.

In addition, and as announced in December, Marechale have achieved the milestone of launching the Anaerobic Digestion Renewable Energy EIS Fund 1 for which it is acting as ongoing investment advisor. Although one of the projects planned to close by year end, I am pleased to report that post the year end the Fund is about to have its first close.

Whilst the EIS fund raising market has become increasingly crowded with multiple offers, Marechale remains committed to working with the management teams of quality companies to secure funding or refinancing capital from Marechale's extensive list of private and institutional investors.

Another significant milestone is Marechale's developing role as a leading advisor on large scale solar projects and the recent establishment of a new development company with an experienced US large scale solar developer to create long term asset value for shareholders.

As a result of projects being carried forward into  the 2013-14 financial year,  allied to cost cutting, Marechale is currently trading ahead of last year's figures to date. However, market conditions remain challenging, as they have now for a number of years, and whilst there is increased demand for Marechale's advisory and fund raising services, investor appetite is restrained and only available for exceptional investment opportunities, particularly in the Development Capital division.

Whilst Marechale has a good pipeline of Growth and Development capital transactions in its core consumer leisure and renewable sectors, the Directors continue to remain cautious about overall market conditions, which affect the operations of our client companies and the environment in which we raise them their debt and equity funding.

Marechale is quoted on the London Stock Exchange as an AIM listed company and completed a small placing to accommodate requests for shares from new Associates of the Company in January this year. Whilst it continues to look at a number of potentially interesting acquisitions, investment, and merger opportunities particularly in fund management, and remains open to such approaches, none to date has been progressed. In the meantime, the Company continues to review its cost base and the cost of its AIM listing.

Mark Warde-Norbury

Chairman

23 July 2013

For further information please contact:

Marechale Capital	Tel: +44 (0)20 7628 5582
Mark Warde-Norbury
Patrick Booth-Clibborn
Smith & Williamson Corporate Finance	Tel: +44 (0)20 7131 4000
Dr Azhic Basirov
David Jones

Consolidated Income Statement

Year ended 31 March 2013

			Year ended	Year ended
			31-Mar	31-Mar
		Notes	2013	2012
			(£)	(£)
Continuing operations
Revenue		2	590,993	694,403
Cost of sales			(120,808)	(47,110)
Gross profit			470,185	647,293
Administrative expenses			(574,046)	(621,779)
Operating (loss)/ profit			(103,861)	25,514
Investment revenues			-	1,175
Other gains and (losses)			87,714	(9,025)
(Loss)/ profit before tax			(16,147)	17,664
Taxation			(235)	-
(Loss)/ profit for the year on continuing operations			(16,382)	17,664
(Loss)/ Profit per share		3	(Pence)	(Pence)
Basic	- Continuing operations		(0.03)	0.03

Consolidated Statement of Comprehensive Income

	Year ended	Year ended
	31-Mar	31-Mar
	2013	2012
	(£)	(£)
(Loss)/ profit for the year	(16,382)	17,664
Other comprehensive income
Revaluation of investments	22,646	(4,612)
Realised loss on investments	-	-
	22,646	(4,612)
Total recognised comprehensive income
(all attributable to owners of the parent)	6,264	13,052

Consolidated Balance Sheet

Year ended 31 March 2013

	Year ended	Year ended
	31-Mar	31-Mar
	2013	2012
	(£)	(£)
Current assets
Available for sale investments	124,383	72,238
Trading investments	67,555	1,600
Trade and other receivables	193,536	152,092
Cash and cash equivalents	262,218	310,750
	647,692	536,680
Total assets	647,692	536,680
Current liabilities
Trade and other payables	(87,014)	(54,630)
Total current liabilities	(87,014)	(54,630)
Net assets	560,678	482,050
Equity
Capital and reserves attributable to equity shareholders
Share capital	2,474,308	2,421,870
Share premium account	1,247,379	1,227,453
Revaluation reserve	39,635	16,989
Reserve for own shares	(50,254)	(50,254)
Retained losses	(3,150,390)	(3,134,008)
	560,678	482,050

Statement of Changes in Equity

Year ended 31 March 2013

	Share capital	Share premium	Revaluation reserve	Other reserves	Retained earnings
Group	(£)	(£)	(£)	(£)	(£)
Balance at 31 March 2011	2,371,870	1,177,453	21,601	(50,254)	(3,151,672)
Issue of ordinary share capital	50,000	50,000	-	-	-
Release of reserve for lapsed options	-	-	-	-	-
Transactions with owners	50,000	50,000	-	-	-
Total comprehensive income
Profit for the financial year	-	-	-	-	17,664
Revaluation during the financial year	-	-	(4,612)	-	-
Total comprehensive income	-	-	(4,612)	-	17,664
Balance at 31 March 2012	2,421,870	1,227,453	16,989	(50,254)	(3,134,008)
Issue of ordinary share capital	52,438	19,926	-	-	-
Release of reserve for lapsed options	-	-	-	-	-
Transactions with owners	52,438	19,926	-	-	-
Total comprehensive income
Loss for the financial year	-	-	-	-	(16,382)
Revaluation during the financial year	-	-	22,646	-	-
Total comprehensive income	-	-	22,646	-	(16,382)
Balance at 31 March 2013	2,474,308	1,247,379	39,635	(50,254)	(3,150,390)

Movements of the Revaluation reserve consist of:	2013	2012
Unrealised gains/ (losses)	22,646	(4,612)
Release of unrealised gains to Profit and Loss	-	-
	22,646	(4,612)
Reserves for own shares consists of:
Reserve for employee share ownership plan ('ESOP')	(50,254)	(50,254)
Reserve for share based payments	-	-
	(50,254)	(50,254)

The Reserve for ESOP comprises 232,603 shares in the Group held in an ESOP Trust. As at 31 March 2013 and 2012, none of the shares had been unconditionally granted to any of the Group's employees and had an aggregate market value of £2,719 (2012: £3,490).

Consolidated Cash Flow Statement

Year ended 31 March 2013

	Year ended	Year ended
	31-Mar	31-Mar
	2013	2012
	(£)	(£)
Net cash from operating activities
Continuing operations: Operating (loss)/ profit	(103,861)	25,514
Operating cash flows before movements in working capital	(103,861)	25,514
Movement in working capital
(Increase) in receivables	(40,471)	(69,610)
Increase in payables	31,413	6,107
Tax paid	(235)	-
	(9,293)	(63,503)
Operating cash flow	(113,154)	(37,989)
Investment activities
Interest receivable	-	1,175
Proceeds on disposal of trading investments	24,258	19,525
Proceeds on disposal of available for sale investments	3,500	-
Expenditure on available for sale investments	(35,500)	(14,025)
Cash flow from investing activities	(7,742)	6,675
Financing
Issue of share capital	72,364	100,000
Cash flow from financing activities	72,364	100,000
Net (decrease)/ increase  in cash and cash equivalents	(48,532)	68,686
Cash and cash equivalents at start of the financial year	310,750	242,064
Cash and cash equivalents at end of the financial year	262,218	310,750
(Decrease)/ increase in cash and cash equivalents	(48,532)	68,686

Notes to the Financial Information

Year ended 31 March 2013

1.  Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union and the International Financial Reporting Interpretations Committee ('IFRIC') interpretations in accordance with the Companies Act 2006. The financial statements have been prepared on the historical cost basis as modified by the valuation of certain financial instruments.

The principal accounting policies adopted in the preparation of the financial information is this announcement are set out in the Company's full financial statements for the year ended 31 March 2013.

2. 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.

	2013	2012
	(£)	(£)
Broking commissions and fees earned from corporate finance	590,993	694,403

3. Earnings per share

	Earnings	Earnings
	(£)	(£)
Based on a (loss)/ profit of	(16,382)	17,664
	No. shares	No. shares
Weighted average number of Ordinary Shares in issue for the purpose of basic earnings per share	53,748,345	52,437,410

4. Director's loans

During the year, loans amounting to £40,000 were granted to Mark Warde-Norbury, a director of the Company (£5,000 on 2 April 2012, £5,000 on 4 April 2012, £10,000 on 19 April 2012, £10,000 on 1 September 2012 and £10,000 on 18 March 2013).  The loans are repayable within one year, carry interest at the rate of 5% per annum and are unsecured.  £10,000 was repaid on 10 October 2012 (£30,000 is included within trade and other receivables on the balance sheet at 31 March 2013), £20,000 has been repaid subsequent to the year end and £10,000 remains outstanding. The directors of the Company, excluding Mr Warde-Norbury, consider, having consulted with the Company's nominated adviser, that the terms of these transactions are fair and reasonable insofar as its shareholders are concerned.

5. Other matters

The financial information for the year ended 31 March 2013 set out in this announcement does not constitute statutory financial statement, as defined in section 434 of the Companies Act 2006, but is based on the statutory financial statements for the year then ended.  Those financial statements, upon which the auditors have issued an unqualified opinion, will be delivered to the Registrar of Companies.

Copies of the Company's full audited Annual Report and Financial Statements for the year ended 31 March 2013 will be sent to shareholders in due course and will be available on the Company's website: www.marechalecapital.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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