20 August 2024
Marechale Capital plc
("Marechale" or the "Company")
Financial Statements for the Year Ended 30 April 2024
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 2024 (the "Period").
Chairman's Statement
Marechale Capital plc, 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 2024 (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 in December 2023, it has been a
challenging year generally and in the hospitality sector in particular, as a
number of businesses negotiated a continuing period of market uncertainty, with
increased inflation driven overheads, compounded by a squeeze in discretionary
spending. 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 include further equity funding for the European
telecommunications technology company, Fast2Fibre, Chestnut Group, the leading
East Anglian Inn Group, and for Brewhouse & Kitchen, the expanding gastro pub
business. Also, additional funding has been raised for The Forest Road Brewing
Company, the award-winning London craft brewer, as well as a further equity
round for Weardale Lithium at a premium valuation.
Marechale continues to generate professional services income by providing advice
to its clients. In the last year this included strategic and funding advice for
the Chestnut Group and Brewhouse & Kitchen.
In the clean energy space, general market uncertainty has impacted some of our
corporate clients whose progress has been delayed and resulted in some investor
exits being postponed.
However, significant progress continues to be made with the lithium extraction
business, Weardale Lithium Ltd, and our pipeline of new and increasingly
diversified projects remains robust.
Weardale Lithium Ltd is Marechale's largest investment, comprising 500,000
founder shares and 20,800 options with a combined value of £3.0 million which
has been recorded in the Balance Sheet. Weardale has proved lithium reserves in
its secured mineral rights in Co. Durham and has submitted a planning
application to build a pilot plant to utilise its existing boreholes. Marechale
remains optimistic for a positive future outcome on this investment. Despite
some individual write-downs on investments, the overall total value of our
Balance Sheet Investments, comprising equity and warrants in client companies,
has strengthened. The total value of the Balance Sheet has increased to
£3,346,000 in 2024 (2023: £3,227,000). This increase reflects our strategic
investment decisions and the underlying strength of our asset base.
Please note that, within the rules of the Accounting Standards, the Board has
taken the decision to declare separately as `Exceptional Costs' various
impairment provisions for bad debts and loan notes owed by two Investee
Companies. Please be advised that at the time of writing, these companies
remain trading but under severe financial distress. We expect both companies to
be refinanced in the near future, in which case the impairment provisions will
be credited back to the P&L in 2024-25.
It is also worth noting that the Company has £770,000 of unused capital tax
losses to offset against any possible future tax liability on realisation of
gains.
Marechale's revenue for the year saw a substantial increase to £668,816,
compared to £376,000 in the previous financial year. This growth of nearly 78%
is a testament to the robust strategies the Company has implemented and the hard
work of our dedicated team. However, commissions paid to 3rd parties involved in
transactions increased by 81%.
While we continue to navigate through various market challenges, I am pleased to
report a significant reduction in Marechale's operating loss for the year, from
£372,000 in 2023 to £296,000 this year. Marechale's net loss before tax for the
year stands at £183,000, a notable improvement from the net loss of £426,000
reported in 2023. And, although gross profit margin decreased from 32% to 30%,
administrative expenses remained steady at £494,000 (2023: £488,000). This
reduction in net loss demonstrates ongoing efforts to enhance operational
efficiencies and control costs.
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 has been excellent in this regard,
having achieved double digit internal rates of return across all the companies
that it has funded since 2010. The Board are confident that the investments in
Weardale Lithium, Burgh Island, Chestnut Group, Fast2Fibre and Forest Road
Brewery, amongst others, will deliver uplifts in value in due course.
I would like to take this opportunity to express our profound gratitude to Lord
Flight, who has stepped down from the Board after many years of dedicated
service. His invaluable contributions and guidance have been much appreciated,
and we wish him all the best in his future.
At the same time, we are delighted to welcome Chris Kenning as our new Non
-Executive Director. Chris brings a wealth of experience and expertise to the
Board. He has a distinguished background in finance and business development,
having held senior positions in several prominent firms. Chris is already a
significant shareholder in our Company, and we are confident that his insights
and strategic acumen will be highly beneficial as we continue to drive the
Company forward. Since Chris acquired his shareholding in Marechale, we have
been working with him on a number of corporate finance projects with his
business Stubben Edge, and we continue to explore how we can digitalise our
transaction processes for our earlier stage corporate finance projects.
Whilst the current economic climate remains challenging, the Board remains
positive about the investments that it holds in its client companies, and
optimistic that the Company, with its sufficient cash reserves, will continue to
generate further uplifts on its current and future equity and warrant
investments, both in the short and longer term. The Company continues to develop
further its proven track record as a corporate finance adviser by seeking
further deal flow in the high growth £10-50 million Enterprise Value PE sector.
As we look to the future, the Board remains committed to building on this year's
positive momentum. The Company will continue to focus on enhancing revenue
stream and delivering value to shareholders.
In closing, I would like to extend my heartfelt thanks to shareholders,
employees, and clients for their continued support and confidence in the
Company. The Board looks forward to another year of progress and achievement.
Mark Warde-Norbury
Chairman
19 August 2024
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 2024
Year ended Year ended
30-Apr 30-Apr
2024 2023
(£) (£)
Continuing
operations
Revenue 668,816 375,726
Cost of sales (471,433) (260,581)
Gross profit 197,384 115,145
Administrative (493,643) (487,626)
expenses
Operating loss (296,260) (372,481)
Bank interest (428) (912)
paid (net)
Other 223,004 (52,124)
gains/(losses)
Exceptional (109,303) -
costs
(Loss)/profit (182,987) (425,516)
before tax
Taxation - -
(Loss)/ profit (182,987) (425,516)
for the year
on continuing
operations
Earnings per (Pence) (Pence)
share
Basic - Continuin 10
g operation (0.18) (0.45)
s
- Diluted 10
(0.18) (0.45)
Statement of
Comprehensive
Income
(Loss)/ profit (182,987) (425,516)
for the year
on continuing
operations
Total
recognised
comprehensive
profit
(all (182,987) (425,516)
attributable
to owners of
the company)
Statement of Financial Position
As at 30 April 2024
Year Year ended
ended
30-Apr 30-Apr
2024 2023
(£) (£)
Current
assets
Investment 2 2
in
subsidiary
Equity 3,039,659 2,862,653
investments
at fair
value
through
profit and
loss
Warrants at 108,482 130,076
fair value
through
profit and
loss
Trade and 34,590 75,933
other
receivables
Cash and 248,196 282,795
cash
equivalents
Total 3,430,929 3,351,459
current
assets
Total assets 3,430,929 3,351,459
Current
liabilities
Trade and (62,035) (91,558)
other
payables
Borrowings (10,000) (10,000)
Total (72,035) (101,558)
current
liabilities
Net current 3,358,895 3,249,902
assets
Long-term
liabilities
Borrowings (12,500) (22,500)
Net assets 3,346,395 3,227,402
Equity
Capital and
reserves
attributable
to equity
shareholders
Share 847,530 763,690
capital
Share 481,290 329,330
premium
Reserve for (50,254) (50,254)
own shares
Reserve for 150,168 83,988
share based
payments
Retained 1,917,661 2,100,648
profits/(loss
es)
3,346,395 3,227,402
The
financial
statements
were
approved by
the Board of
Directors
and
authorised
for issue on
19 August
2024.
They were
signed on
its behalf
by:
Mark Warde
-Norbury
Director
Company No: 03515836
Statement of Changes in Equity
For year ended 30 April 2024
Share Share Reserve for Reserve for Retained
capital premium own shares share based earnings
payments
Balance at 30 763,023 328,413 (50,254) 62,313 2,526,165
April 2022
Total
comprehensive
income
(Loss) for - - - - (425,517)
the financial
year
Share based - - - 21,675 -
payments in
the year
Issued in 667 917 - - -
year
Total 667 917 - 21,675 (425,517)
comprehensive
income
Balance at 30 763,690 329,330 (50,254) 83,988 2,100,648
April 2023
Total
comprehensive
income
(Loss) for - - - - (182,987)
the financial
year
Share based - - - 66,180 -
payments in
the year
Issued in 83,840 151,960 - - -
year
Total 83,840 151,960 - 66,180 (182,987)
comprehensive
income
Balance at 30 847,530 481,290 (50,254) 150,168 1,917,661
April 2024
Statement of Changes of Cash Flows
For year ended 30 April 2024
Year ended Year ended
30-Apr 30-Apr
2024 2023
(£) (£)
Net cash
from
operating
activities
(Loss)/profi (182,987) (425,516)
t before
tax
Reverse 66,180 21,676
provision
for share
based
payments
Reverse (228,406) 16,513
losses/
(gains) on
fair value
investment
through
profit and
loss
Reverse 109,303 -
provision
for
exceptional
costs
Reverse 5,402 18,075
losses on
disposal of
investments
Reverse net 428 912
interest
expense
Operating (230,080) (368,341)
cash
outflows
before
movements
in working
capital
Movement in
working
capital
(Increase)/d 3,539 (32,157)
ecrease in
receivables
Increase/(de (29,523) 34,190
crease) in
payables
Tax paid - -
(25,983) 2,033
Cash (256,063) (366,308)
outflow
from
operating
activities
Investment
activities
Interest 272 -
received
Expenditure (6,572) -
on equity
investments
Proceeds 2,664 226,925
from sale
of equity
investments
through
profit and
loss
Cash (3,636) 226,925
inflow/(outf
low) from
investing
activities
Financing
Issue of 235,800 1,584
ordinary
share
capital
Repayment (10,000) (10,000)
of
borrowings
Interest (699) (912)
payable
Cash inflow 225,101 (9,328)
from
financing
activities
Net (34,599) (148,711)
increase in
cash and
cash
equivalents
Cash and 282,795 413,970
cash
equivalents
at start of
the
financial
year
Cash and 248,196 282,795
cash
equivalents
at end of
the
financial
year
Notes to the Financial Statements
Year ended 30 April 2024
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 Group 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 £248k of cash reserves (2023: £283k) which as at that date equated to
approximately 7 months of cash overheads. Whilst the company generated
operating losses of £296k in the financial year (2023: £372k) 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 .
2024 2023
(£) (£)
Broking commissions and fees earned from corporate finance 668,816 375,726
4. Other gains/ (losses)
2024 2023
(£) (£)
Realised (losses) on equity investments (5,402) (18,075)
Unrealised gains/(losses) on equity investments 250,000 (17,536)
Unrealised (losses) on equity warrants (21,594) (16,513)
223,004 (52,124)
5. Earnings per share
Earnings Earnings
(£) (£)
Based on (182,987) (425,516)
Profit for
the year.
No. shares No. shares
Weighted 104,194,580 95,419,581
average
number of
Ordinary
Shares in
issue
for the
purpose of
basic
earnings
per share
Weighted 119,210,656 103,610,657
average
number of
Ordinary
Shares in
issue
for the
purpose of
diluted
earnings
per share
(see the
notes of
the
accounts
and
immediately
below)
The loss attributable to equity shareholders and weighted average number of
ordinary shares for the purposes of calculating diluted earnings per ordinary
share are identical to those used for basic earnings per ordinary share. This is
because the exercise of share options would have the effect of reducing the loss
per ordinary share and is therefore anti-dilutive.
6. Other matters and Market Abuse Regulation (MAR) Disclosure
The financial information for the year ended 30 April 2024 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. Post balance sheet events
There are no past balance sheet events to report
8. Most recent Board Appointment - announced 6 August 2024
On 6 August 2024 the Company appointed Chris Kenning as Non-executive Director
of Marechale.
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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