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: +44 (0)20 7628 5582
Mark Warde-Norbury / Patrick Booth-Clibborn
Cairn Financial Advisers LLP (Nomad and Broker) Tel: +44 (0)20 7213 0880
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.
This information was brought to you by Cision http://news.cision.com
https://news.cision.com/marechale-capital-plc/r/financial-statements-for-the-year-ended-30-april-2023,c3821018
END
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