Fletcher King Plc
Annual Report and Accounts 2021
D I R E C T O R S A N D A D V I S E R S
C O N T E N T S
Directors
D J R Fletcher FRICS Non-Executive Chairman
R E G Goode FRICS Non-Executive Director
D H Stewart Non-Executive Director
P J Andrews MRICS Managing Director
R A Dickman FRICS Executive Director
P E Bailey ACA Finance Director
Secretary and Registered Office
P E Bailey ACA
61 Conduit Street, London W1S 2GB
Financial Advisers and Stockbrokers
Cairn Financial Advisers LLP
80 Cheapside, London EC2V 6DN
Solicitors
Boodle Hatfield
240 Blackfriars Road, London SE1 8NW
Bates Wells
10 Queen Street Place, London, EC4R 1BE
Auditor
Nexia Smith & Williamson
25 Moorgate, London EC2R 6AY
Principal Bankers
NatWest Bank Plc
63 Piccadilly, London W1A 2AG
Registrars and Transfer Office
Computershare Investor Services Plc
The Pavilions, Bridgwater Road, Bristol BS13 8AE
Dedicated shareholder telephone number: 0370 889 4095
Audit Committee
D H Stewart Chairman
D J R Fletcher
Remuneration Committee
D H Stewart, Chairman
D J R Fletcher
Company Number
02014432
Highlights
2
Chairman’s Statement
3-4
Corporate Governance
Statement
5-11
Strategic Report
12-15
Directors’ Report
16-19
Auditors’ Report
20-25
Accounts
26 -52
Notice of Meeting
53-57
Form of Proxy
59-60
Certificate Nº FS27825
1
H I G H L I G H T S
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Revenue for the year of £2,264,000 (2020 restated: £2,896,000) **
Statutory loss before tax of £834,000 (2020: profit of £76,000)
Adjusted loss before tax of £935,000 (2020: profit of £243,000) *
Adjusted basic loss per share of 8.57p (2020: earnings of 2.20p) (see note 11) *
Final dividend: £nil (2020: 0.50p per share)
Significant cash reserves: £2.9m as at 30 April 2021 (2020: £3.6m)
* Adjusted results are before share based payment expenses and after other comprehensive income
(see note 5)
** Prior year restatement relates to the realignment of the Group’s revenue recognition policy to the
principal versus agent requirements of IFRS 15. As a result, revenue has been presented gross of
fees shared with third parties, with the related costs now included within other operating expenses.
The impact on revenue and costs is £0.28m. The restatement has no impact on the Group’s profit
for the year, earnings per share or net asset position (see note 2.1).
F I N A N C I A L C A L E N D A R
Annual General Meeting
4 November 2021
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C H A I R M A N ’ S S TAT E M E N T
Results
Revenue for the year was £2,264,000 (2020 restated: £2,896,000). Adjusted loss before tax (see
note 5) was £935,000 (2020: profit of £243,000). Statutory loss before tax was £834,000 (2020:
profit of £76,000).
The Board considers the adjusted results to be an important measure of performance and to be
more representative of performance for the year than the statutory results (which have been
prepared in accordance with International Financial Reporting Standards). Adjusted results include
an unrealised loss of £101,000 on revaluation of the interest in the SHIPS 16 syndicate (2020:
realised gain of £99,000).
Dividend
In view of the loss in the year, the Directors have resolved not to pay a final dividend (2020: 0.5p
per share).
The Commercial Property Market
The year to 30 April 2021 will go down as one of the most difficult in the history of the commercial
property industry. The continuing and ever-changing Covid-19 regulations and lockdowns have
created an extreme level of uncertainty resulting in both occupiers and investors delaying their
decision making.
However, the Industrial and Warehousing sector of the market bucked the trend and continued to
be very active, fuelled by the growth of online shopping. This has resulted in strong rental growth
and investors paying record prices.
Office workers continued to work from home and shoppers stayed away from both the high streets
and the large shopping centres. There has been enormous downward pressure on retail rents and
capital values have continued their long decline. Office rents have also suffered but to a lesser
extent, although central London offices have remained resilient but on a much reduced take up.
Yields have generally held firm, particularly for the large trophy assets, but there has been some
slippage for smaller subprime buildings.
The vaccine rollout has been exceptional and appears to be controlling the impact of the disease. It
is also giving confidence to many, who have had both doses, to return to public transport, although
utilisation levels remain well below pre Covid-19 figures. City centres will not recover until all are
happy to use public transport again.
Business Overview
The huge uncertainty caused by the Covid-19 pandemic, resulting in a very significant fall in
business activity, has had a material impact on the commercial property market and thus our trading
results. For only the second time in the history of the Company are we reporting a loss.
The biggest impact was experienced in our transaction-based activities such as investment sales
and acquisitions as well as bank valuations and the agreement of rating appeals.
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C H A I R M A N ’ S S TAT E M E N T
Property and Fund management fees continued to flow and our rent collection statistics remained
excellent. Fortunately, most of our clients have a relatively low exposure to the hard hit retail,
leisure and hospitality sectors.
The volume of bank valuations continued to be significantly reduced and is likely to remain so until
investors return in more force to the market. The Valuation Office continues to be extremely slow
in agreeing rating appeals which is frustrating the potential for us to earn some substantial fees.
On 2 July 2021 the Company announced, in response to press speculation, that it was in discussions
with Elliott Bernerd in respect of a potential purchase of existing shares, issue of new shares
(together, constituting no more than 29.99% of the Company’s issued share capital) and new board
appointments (the “Potential Transaction”). Discussions remain ongoing, including regarding
price, and while there can be no certainty that the Potential Transaction will proceed, the Board
will make further announcements in due course.
Outlook
Whilst it is almost impossible to assess our future trading performance, we do however look
forward to the coming year with some cautious optimism. Whilst Covid-19 will still be part of our
lives, the vaccination programme has had a very positive impact in reducing the impact of the virus
to a manageable level. Life is moving towards some normality and hopefully this will continue.
There are positive signs in the capital markets that both domestic and foreign investors are showing
more interest and there appears to be a wall of money waiting for the right moment to buy.
We start the year with some reasonable sales instructions, some encouragingly from new clients,
and we hope to add to the client base going forward. Our Fund and Property Management mandates
will provide steady recurring income and we are working hard to expand that part of our business.
Bank Valuations are showing some signs of increasing but it is still early days. Unfortunately, on
the Rating front there is no sign from the Valuation Office of them expediting with any speed the
outstanding appeals we have in the pipeline.
Despite our reported loss we continue to be securely financed with a strong balance sheet and cash
reserves of £2.9m as at 30 April 2021.
Strong client relationships, some of which have been in place for over fifty years, have grown even
stronger in the last year as we have tackled together the challenges presented by this unprecedented
period of turmoil.
We would like to thank both our clients and hard working staff for their loyalty to us.
DAVID FLETCHER
CHAIRMAN
30 September 2021
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C O R P O R AT E G O V E R N A N C E S TAT E M E N T
All members of the Board believe strongly in the value and importance of good corporate
governance and in our accountability to all stakeholders including shareholders, clients and
employees. In order to meet the requirements of AIM Rule 26 we have chosen to follow the QCA
Corporate Governance Code 2018.
As Chairman, I lead the Board and take ultimate responsibility for ensuring that there is absolute
clarity in our strategy and our quantitative and qualitative objectives and the collective and
individual responsibilities of the Directors.
Importantly my responsibilities include ensuring that the Company maintains its strong values of
delivery, integrity, trust, client service and good corporate governance and in so doing delivers
value for shareholders over the medium to long term.
In the following statement we give a summary of how our Board and its committees operate and
how we are applying the ten principles of the QCA Code.
Principle 1: Establish a strategy and business model which promote long-term value for
shareholders
The Group provides a range of property services and expert advice throughout the United
Kingdom, including property fund management, property asset management, rating, valuations
and investment broking. We seek to always be a company that values clarity, consistency, delivery
and integrity.
Although we face significant competition in all of our activities, we believe that by delivering
outstanding services managed or overseen personally by experienced Directors and staff who are
readily available to clients and by doing so in a flexible and non-hierarchical manner we will
continue to maintain existing client relationships and attract new clients who like our personal and
non-standardised approach.
The Group’s Key Performance indicators and Principal Risks and Uncertainties are set out in the
Strategic Report of the Annual Report and Accounts on pages 12 to 15.
Principle 2: Seek to understand and meet shareholder needs and expectations
The Board attaches great importance to providing shareholders with clear and transparent
information on the Company’s strategy, activities and financial position. Details of all shareholder
communications are provided on the Company website. Our strategy and approach have remained
consistent over many years. The Board seeks to present a fair and balanced assessment of the
Company’s financial position and prospects in its Annual and Interim Reports. Comments from
shareholders on the quality and content of the reports and areas for improvement are always
welcomed.
The Annual General Meeting (“AGM”) provides a forum for discussion between the Board and
Shareholders. Outside of AGMs, the Chairman is available by arrangement for discussions with
Shareholders. The Company’s Senior Independent director, David Stewart, is also available for
meetings and discussions and the Company Secretary can also be contacted on shareholder and
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C O R P O R AT E G O V E R N A N C E S TAT E M E N T
investor relations issues and matters of governance.
Principle 3: Take into account wider stakeholder and social responsibilities and their implications
for long-term success
The Board’s communication with shareholders and how it seeks their feedback is explained under
Principle 2 above.
The majority of the Company’s clients have been engaged for many years and some since
inception. A close partnering relationship is developed with clients where we can fully understand
their thoughts and the strategy they have for their business and property portfolios. Our business
objective is to ensure that our clients’ assets perform to agreed criteria which are clear, unequivocal
and understandable.
Our philosophy is to deliver a highly personal service with directors involved at all stages.
Continuity of personnel is paramount.
The Company operates to Quality Assurance (“QA”) standards and holds ISO9001:2015
certification. The QA process includes annual external audit of internal processes and includes
feedback from clients. Feedback from clients has been consistently positive.
Our ability to fulfil client services and develop strong client relationships depends on having
talented and motivated staff who enjoy working for the company. Over 60% of employees have
been with the Company for 8 years or more. Annual reviews and regular two-way communication
with staff provide opportunities for feedback leading to enhancement of management practices and
staff incentives.
As a Company we are always cognisant of our social responsibilities and wish to be and be seen to
be a good employer, a reputable company and a responsible member of Society.
Principle 4: Embed effective risk management, considering both opportunities and threats,
throughout the organisation
The Company’s key risks and uncertainties are set out in the Strategic Report and the main risks
arising from the Company’s financial instruments and how these are managed by the Board are set
out in note 25 to the Financial Statements.
The Company reviews principal risks and uncertainties on an ongoing basis and maintains a Risk
Register which is reviewed at least annually by the Board.
Principle 5: Maintain the Board as a well-functioning, balanced team led by the Chair
The members of the Board have a collective responsibility and legal obligation to promote
the interests of the Group, and are collectively responsible for defining corporate governance
arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance
lies with the Chair of the Board.
Following retirement of David Fletcher and Richard Goode from executive positions on 30 April
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C O R P O R AT E G O V E R N A N C E S TAT E M E N T
2021, the Board now consists of six Directors of which three are Executive Directors, two are Non-
Executive Directors, and one an Independent Non-Executive Director. As the company grows the
Board will consider adding an additional independent Non-Executive Director. However, for now
the Board considers its composition appropriate given the size of the Company, its revenues and
profitability.
The Board is supported by two committees: audit and remuneration. The Board does not consider
that it is of a size at present to require a separate nominations committee, and all members of the
Board are involved in the appointment of new Directors.
Director biographies for the current Directors are shown in the Directors Report.
The Board sets the Company’s strategic aims and ensures that necessary resources are in place in
order for the Company to meet its objectives. All members of the Board take collective responsibility
for the performance of the Company and all decisions are taken in the interests of the Company.
Whilst the Board has delegated the normal operational management of the Company to the Executive
Directors and other senior management, there are detailed specific matters subject to decision by
the Board of Directors. These include acquisitions and disposals, and investments and projects
of a capital nature. The Non-Executive Directors have a particular responsibility to challenge
constructively the strategy proposed by the Executive Directors; to scrutinise and challenge
performance; to ensure appropriate remuneration and that succession planning arrangements are in
place in relation to Executive Directors and other senior members of the management team. The
Chairman holds informal meetings with the Independent Non-executive Director without other
Executives present. The senior Executives enjoy open access to the Non-executive Directors with
or without the Chairman being present.
The Board of Directors meets at least four times a year to review the performance of the Group.
There are clearly defined lines of responsibility and delegation of authority from the Board to the
Executive Committee, which meets on a monthly basis to review and make decisions on business,
financial and operational matters of the subsidiary companies.
The Chairman is responsible for ensuring that, to inform decision-making, Directors receive
accurate, sufficient and timely information. The Company Secretary compiles the board and
Committee papers which are circulated to Directors prior to meetings.
Controls and systems
The Board is responsible for ensuring that a sound system of internal control exists to safeguard
shareholders’ interests and the Group’s assets. It is responsible for the regular review of the
effectiveness of the systems of internal control. Internal controls are designed to manage rather
than eliminate risk and therefore even the most effective system cannot provide assurance that each
and every risk, present and future, has been addressed.
Independence of the Directors
The independent Non-Executive Director of the Company, David Stewart, was appointed to the
Board on 1 July 2002. In the Board’s opinion, based on the consistent independent oversight and
constructive challenge of the Executive Directors that has been demonstrated since appointment,
he is considered to be independent, despite the length of time that he has been a member of the
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C O R P O R AT E G O V E R N A N C E S TAT E M E N T
Board, taking into account his experience, skills, and personal qualities.
Directors’ time commitments
Executive Directors are employed under full-time service agreements. Non-Executive Directors
are required to attend 4 board meetings per year and to be available at other times as required for
face-to-face and telephone meetings with the executive team and investors.
Audit and Remuneration Committees
Audit and Remuneration committees, each comprised of the Non-Executive Director, David
Stewart, and the Non-Executive Chairman, David Fletcher. The Audit Committee meets at least
twice a year and is responsible for ensuring that the financial performance, position and prospects of
the Group are properly monitored and reported on, meeting the auditors and reviewing their reports
relating to accounts and internal controls. The Remuneration Committee reviews the performance
of Executive Directors and sets the scale and structure of their remuneration and the terms of their
service agreements with due regard to the interests of shareholders. The Remuneration Committee
also determines the payment of bonuses to Executive Directors and the allocation of share options
to employees.
Board and Committees’ attendance
The Board met on four occasions and the Audit and Remuneration Committees met on two
occasions during the last year. There was full attendance by all representative members at each
meeting.
Principle 6: Ensure that between them the directors have the necessary up-to-date experience,
skills and capabilities
The Board as a whole is confident that it has a strong team containing the necessary mix and
balance of experience, skills, personal qualities and capabilities to deliver the Company’s strategy
for the benefit of shareholders over the medium to long-term. Directors attend seminars and other
regulatory, trade and capital markets events to ensure that their knowledge remains current.
The Board will continue to review the collective resources of its Directors and whether further
resource and skills may be required to deliver on the Company’s strategic objectives. The Board
has, between its members, a broad balance of skills, experience and personal qualities to operate
the Company in areas including property, industry, financial and governance.
Principle 7: Evaluate board performance based on clear relevant objectives, seeking continuous
improvement
An annual assessment of the effectiveness of the Board is carried out through an internal questionnaire
process. The outcomes and principal findings are reported to the Board for consideration by the
Company Secretary with recommendations as to any action that might be taken and changes that
could be made.
The review considers effectiveness in a number of areas including general supervision and
oversight, business risks and trends, succession and related matters, communications, ethics and
compliance, corporate governance and individual contribution.
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C O R P O R AT E G O V E R N A N C E S TAT E M E N T
As a result of the evaluation, the Board considers the performance of each Director to be effective
and concluded that both the Board and its Committees continue to provide effective leadership and
exert the required levels of governance and control.
The Board currently considers that the use of external consultants to facilitate the Board evaluation
process is unlikely to be of significant benefit to the process, although the option of doing so is
kept under review.
Principle 8: Promote a corporate culture that is based on ethical values and behaviours
The Board believes that the promotion of a corporate culture based on sound ethical values and
behaviours is essential to maximise shareholder value. The Company maintains and annually
reviews a Staff Handbook and Quality Assurance manual that includes clear guidance on what is
expected of every employee and officer of the company. Adherence of these standards is a key
factor in the evaluation of performance within the company, including during annual performance
reviews.
Principle 9: Maintain governance structures and processes that are fit for purpose and support
good decision making by the Board
The Board provides strategic leadership for the Group and operates within the scope of a robust
corporate governance framework. Its purpose is to ensure the delivery of long-term shareholder
value, which involves setting the culture, values and practices that operate throughout the business,
and defining the strategic goals that the Group implements in its business plans. The Board defines
a series of matters reserved for its decision and has approved terms of reference for its Audit
and Remuneration Committees to which certain responsibilities are delegated. The chair of each
committee reports to the board on the activities of that committee.
The Audit Committee monitors the integrity of financial statements, oversees risk management and
control, and reviews external auditor independence.
The Remuneration Committee sets and reviews the compensation of Executive Directors including
the setting of targets and performance frameworks for cash and share-based awards.
The Executive Committee, consisting of the Executive Directors, operates as a management
committee which reviews operational matters and performance of the business, and is responsible
for significant management decisions while delegating other operational matters to individual
managers within the business.
The Chairman has overall responsibility for corporate governance and in promoting high
standards throughout the Group. He leads and chairs the Board, ensuring that committees are
properly structured and operate with appropriate terms of reference, ensures that performance of
individual Directors, the Board and its committees are reviewed on a regular basis, leads in the
development of strategy and setting objectives, and oversees communication between the Group
and its shareholders.
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C O R P O R AT E G O V E R N A N C E S TAT E M E N T
The Executive Directors are responsible for implementing and delivering the strategy and
operational decisions agreed by the Board, making operational and financial decisions required in
the day-to-day operation of the Group, providing executive leadership to managers, championing
the Group’s core values and promoting talent management.
The Independent Non-Executive Director contributes independent thinking and judgement through
the application of external experience and knowledge, scrutinises the performance of management,
provides constructive challenge to the Executive Directors and ensures that the Group is operating
within the governance and risk framework approved by the Board.
The Company Secretary is responsible for providing clear and timely information flow to the
Board and its committees and supports the board on matters of corporate governance and risk.
The Board has approved the adoption of the QCA Code as its governance framework against which
this statement has been prepared and will monitor the suitability of this Code on an annual basis
and revise its governance framework as appropriate as the Group evolves.
Principle 10: Communicate how the company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
The Board is committed to maintaining an open dialogue with shareholders. Communication with
shareholders is co-ordinated by the Chairman and Company Secretary.
The Board believes that the Annual Report and Accounts, and the Interim Report published at the
half-year, play an important part in presenting all shareholders with an assessment of the Group’s
position and prospects. All reports and press releases are published on the Group’s website.
The AGM is the principal opportunity for private shareholders to meet and discuss the Group’s
business with the Directors. There is an open question and answer session during which shareholders
may ask questions both about the resolutions being proposed and the business in general. The
Directors are also available after the meeting for an informal discussion with shareholders.
In addition to the investor relations activities described above, the following Audit and Remuneration
committee reports are provided:
Audit Committee Report
During the year, the Audit Committee has continued to focus on the effectiveness of controls
throughout the Group.
The Audit Committee consists of David Stewart, Chair, and David Fletcher. The committee met twice
in the year, and the external auditor and Finance Director attended these meetings. Consideration
was given to the audit plan and audit findings reports and these provided opportunities to review
the accounting policies, internal control and the financial information contained in both the annual
and interim reports.
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C O R P O R AT E G O V E R N A N C E S TAT E M E N T
Remuneration Committee Report
The remit of the Remuneration Committee is to determine the framework, policy and level of
remuneration, and to make recommendations to the Board on the remuneration of Executive
Directors. In addition, the Committee oversees the creation and implementation of employee share
plans. The Remuneration Committee consists of David Stewart, chair, and David Fletcher. The
committee met twice in the year.
David Fletcher
Chairman
30 September 2021
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S T R AT E G I C R E P O R T
The Directors present the Group Strategic Report for Fletcher King Plc (“the Company”) and its
subsidiary companies for the year end 30 April 2021 (together “the Group”).
Principal Activities
The Group provides a comprehensive range of property services and expert advice throughout
the United Kingdom, including property fund management, property asset management, rating,
valuations and investment broking.
Business Review
The Group continued its strategy of providing a range of property services to existing and new
clients and key performance indicators (“KPIs”) for the Group for the year to 30 April were as
follows:
2021
£2,264,000
Revenue
(£834,000)
(Loss)/profit before taxation
(£935,000)
Adjusted (loss)/profit before taxation*
(£789,000)
Total comprehensive income
(£789,000)
Adjusted total comprehensive income*
Basic earnings per share
(7.47p)
Adjusted basic earnings per share (note 11) (8.57p)
2020
£2,896,000
£76,000
£243,000
£135,000
£203,000
0.39p
2.20p
*Adjusted loss before tax reflects inclusion of the unrealised loss in the year on revaluation of the
interest in the SHIPS 16 syndicate which is required to be shown in the Statement of Comprehensive
Income as other comprehensive income (see note 5). Adjusted KPIs for the prior year reflect adding
back a share-based payment expense of £68,000 incurred in respect of share options that were
surrendered in the year, together with the realised gain in the year on disposal of the interest in the
SHIPS 15 syndicate.
The Chairman’s Statement contains a review of the Group’s performance, financial results, future
development and prospects and is incorporated into this Strategic Report by reference.
In response to the impact of Covid-19, the Company reduced discretionary expenditure where
possible. However, the Company was affected by a severe contraction in the Professional Indemnity
insurance market, particularly with regard to property valuation work. As a result, the renewal
premium more than doubled, increasing by just over £200,000 for the financial year.
Principal Risks and Uncertainties
The Directors have identified below a number of risks which they believe may affect the Group’s
ability to deliver its strategic goals. This list does not purport to be an exhaustive summary of the
risks affecting the Group, is given in no particular order of priority and contains risks considered
to be outside the control of the Directors.
(i) Covid-19
In spite of the apparent success of the vaccine rollout, Covid-19 may continue to have a significant
impact on transactional activity but it is difficult to assess this impact accurately in a dynamic
market and in light of the unpredictable nature of the virus. The welfare of our staff and clients
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is paramount and we have implemented risk management measures consistent with government
guidelines. In addition, we have business continuity plans to enable us to respond quickly to mitigate
the ongoing impact. We will closely monitor the impacts of the virus as the wider economic impact
evolves over time.
(ii) Economic Risk
The main economic risks that would affect the Group’s performance are a major slowdown in the
UK economy and a slump in UK commercial property values as recently experienced with the
Covid-19 virus and Brexit uncertainties. The Group has, where possible, implemented actions
to mitigate some of the effects of these risks. This includes providing a comprehensive range of
services, some being less influenced by economic factors than others.
(iii) Attraction and Retention of Key Employees
The Group will depend on the continued service and performance of the Executive Directors and
key employees and whilst it has entered into contractual arrangements with these individuals
with the aim of securing the services of each of them, retention of these services cannot be
guaranteed. The loss of the services of Executive Directors or other key employees could damage
the Group’s business. Equally the ability to attract new employees and senior executives with the
appropriate expertise and skills cannot be guaranteed. The Group may experience difficulties in
hiring appropriate employees and failure to do so may have a detrimental effect upon the trading
performance of the Group.
(iv) Financial Risk Management
Details of the Group’s approach to financial risk management are disclosed in detail in note 25 to
the financial statements.
Engaging with our stakeholders (Companies Act S.172 disclosures)
The following disclosure is made in line with the Companies (Miscellaneous Reporting) Regulations
2018 which requires Companies to report on employee and stakeholder engagement. The Board
remains committed to further strengthening its dialogue with employees and the Company’s wider
stakeholder group. The Board recognises that engagement is fundamental to the success of the
Company and, in performing its duties under s172, considers the views of key stakeholders in its
decision-making, recognising that they are central to the long-term prospects of the Company.
Clients: Our clients are key to the success our business. We are in continuous contact with our
clients, to understand their requirements, to listen to their feedback on our service levels and
to understand their expectations in terms of the development of our service offering. It is the
responsibility of dedicated relationship managers to gain a deep understanding of our clients’
businesses through regular dialogue and to share this knowledge with the wider client service
teams. The quality of our service performance is regularly assessed to help us better understand
how we are managing the relationship and to provide the added value that our clients expect.
Positive feedback from clients each year supports the Company’s continued certification under the
ISO 9001 Quality Management system.
Our People: Our people are our most valuable asset. We firmly believe that our people are key
to delivering excellent service to our clients and achieving our objectives. Our long-standing
philosophy is founded on the premise that staff in our sector are motivated through incentive and
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S T R AT E G I C R E P O R T
performance based (and, therefore, variable) remuneration. We believe that this approach best
aligns Shareholders’ and management’s interests and incentivises superior performance and the
creation of long-term Shareholder value. We are committed to providing a working environment
that promotes employee’s wellbeing, facilitates high performance, and acts in their best interests.
We continue to monitor and develop our approach to employee engagement in light of emerging best
practice. The Company supports employees with practical training and a route to RICS professional
qualifications. Following the Covid-19 virus outbreak, all employees have been working flexibly
(including working from home), and the Company has maintained employee engagement through
video conferencing facilities and other complementary channels. The Company has an Employee
Assistance Programme to support the wellbeing of employees, particularly mental health.
Community and environment: We are mindful of the impact of Company operations on
both the community and the environment, and expect employees and suppliers to meet exacting
standards in everyday business conduct. The Company operates a number of green initiatives
including, for example, reducing paper usage and operating a cycle-to-work scheme to encourage
employees to travel to work in an environmentally friendly way.
Shareholders: We believe that engaging with our Shareholders and encouraging an open
dialogue helps to ensure mutual understanding. Delivering for our Shareholders ensures the
business continues to be successful in the long term and can therefore continue to deliver for all
our stakeholders. The directors provide information for shareholders through the AGM, the annual
report, the interim report, and public announcements made through RNS. The Board is available at
the AGM to meet and engage with Shareholders. The Chairman and other Senior Directors are also
available to engage with Shareholders at all other times as required. The last AGM took place on 28
October 2020. Unfortunately, due to Covid-19 restrictions on social gatherings, it was not possible
for external shareholders to attend the meeting. The Company welcomes shareholder engagement
and has interacted with shareholders during the year via other communication channels including
email, telephone and in person.
Suppliers: In this area our primary focus is on developing strong relationships with our property
management supply partners to help us to provide consistent standards and the high quality services
required by clients across our property management business.
During the year the Board has, amongst other things, considered and evaluated a number of
potential growth opportunities with a view to strengthening the financial position and operational
capability of the Company.
Section 172(1) Statement
The Board of Directors of Fletcher King Plc consider, both individually and together, that they
have acted in the way they consider, in good faith, would be most likely to promote the success
of the Company for the benefit of its members as a whole. In doing this, the Directors have had
regard to the stakeholders and amongst other matters to those set out in s172(1) (a-f) of the Act in
the decisions taken during the year ended 30 April 2021:
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•
•
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likely consequences of any decisions in the long term;
interests of the Company’s employees;
need to foster the Company’s business relationships with suppliers, clients and others;
impact of the Company’s operations on the community and environment;
Company’s reputation for high standards of business conduct; and
need to act fairly as between members of the Company.
Approved by the board of Directors
and signed on behalf of the board
David Fletcher
30 September 2021
1 5
D I R E C T O R S ’ R E P O R T
The Directors present their report and accounts for the year ended 30 April 2021.
General information
Fletcher King Plc is a public limited company which is listed on the Alternative Investment
Market (AIM) of the London Stock Exchange and is incorporated and domiciled in the UK. The
Company’s registration number is 02014432.
Results and dividend
The consolidated statement of comprehensive income is set out on page 26. The total loss for the
year after taxation is £789,000 (2020: total income of £135,000). The Directors do not recommend
the payment of an ordinary final dividend. (2020: 0.50p per share). No interim dividend (2020:
1.00p per share) has been paid to shareholders.
Additional information on performance for the year is shown in the Chairman’s Statement and the
Strategic Report and also in the profit reconciliation (see note 5).
Future developments
Future developments for the business are covered in the Chairman’s Statement on pages 4 to 5.
Capital and equity interests
All share options were surrendered in the previous year and there were no outstanding options as
at 30 April 2021. The total number of ordinary shares in issue at 30 April 2021 was 9.2 million
(2020: 9.2 million).
Cash flow and liquidity
Net cash outflow from operating activities amounted to £688,000 (2020: inflow of £917,000)
which, after allowing for cash flows including dividends and lease payments, resulted in a net
decrease in cash balances of £732,000 (2020: increase of £1,623,000).
At 30 April 2021, the Group’s cash at bank and on short term deposit amounted to £2.89 million
(2020: £3.62 million). This was deposited with leading banks.
Financial risk management
The Group manages its treasury operations in accordance with policies and procedures approved
by the Board. Information about the Group’s policies on financial instruments is set out in note 3
of the accounts. The Group has no borrowings. As the Group operates almost exclusively in the
United Kingdom, there are no significant direct foreign exchange risks. The Group has in place a
risk management programme that seeks to limit the adverse effects on the financial performance of
the Group and these are outlined in note 25 to the accounts.
Directors
The current Directors of the Company are set out below.
D J R Fletcher Chairman (non-executive from 1 May 2021)
R E G Goode
R A Dickman
P J Andrews
P E Bailey
D H Stewart
Director (non-executive from 1 May 2021)
Executive Director
Managing Director
Finance Director
Non-Executive Director
1 6
D I R E C T O R S ’ R E P O R T
D J R Fletcher (FRICS), is a founding partner and Chairman of the Company. He has extensive
experience in property and fund management, advising clients such as the pension funds of IBM,
Debenhams, BHS, Allied Domecq and the Industrial Training Boards as well as the Stratton House
Investment Property Syndicates and other clients.
R E G Goode FRICS, has been jointly responsible for running the Company since 2000 until
handing over Managing Director responsibilities to Paul Andrews on 1 May 2020. Previously he
worked in the property investment department of DTZ and Hillier Parker. He has been involved in
fund and asset management for a number of major institutional and in-house clients.
P J Andrews (MRICS) heads up the Asset Management department and he has worked at Fletcher
King since 2007. He was appointed a Director in May 2016 and appointed Managing Director on
1 May 2020.
R A Dickman BSc (Hons) Est Man FRICS, is a Chartered Surveyor, and has been a Director of
Fletcher King since May 1992. He has been in charge of the Valuation and Rating department since
that date.
D H Stewart, had a long career in banking. At Abbey National Group, he led business banking and
the asset finance activities of First National Bank. Prior to that he held senior appointments with
TSB Group, Hill Samuel Bank, Creditanstalt and Country NatWest Limited.
P E Bailey (ACA) is Finance Director and has been Company Secretary at Fletcher King since
2008. He was appointed a Director in November 2019.
R E G Goode and R A Dickman retire by rotation in accordance with Company convention, and
being eligible offer themselves for re-election at the forthcoming Annual General Meeting.
Directors’ Remuneration
D J R Fletcher
R E G Goode
R A Dickman
P J Andrews
P E Bailey*
D H Stewart
Salary
Benefits
Bonus
Pension
£000
£000
£000
£000
100
74
100
100
90
15
479
35
23
19
14
4
-
95
-
-
-
-
-
-
-
-
-
1
1
1
-
3
2021
£000
135
97
120
115
95
15
577
2020
£000
160
123
146
142
62
19
652
*Remuneration for P E Bailey is pro-rata from date of appointment on 1 November 2019.
Directors’ Indemnity Insurance
As permitted by Section 233 of the Companies Act 2006, the Company has purchased insurance
cover on behalf of the Directors indemnifying them against certain liabilities which may be incurred
by them in relation to the Company.
1 7
D I R E C T O R S ’ R E P O R T
Corporate social responsibility
The Board recognises the importance of social and environmental matters in the conduct of the
Group’s business and remains committed to social and environmental awareness throughout its
operations, notwithstanding the relatively low environmental impact of the Group’s activities (see
also Companies Act S.172 disclosures in Strategic Report).
Energy efficiency, recycling and the use of “fair trade” products are encouraged.
The Board recognises that enthusiastic, well-trained and high-quality staff are essential to the
achievement of the Group’s commercial objectives. Participation in the success of the Group is
encouraged via comprehensive incentive schemes.
The Group provides employment on an equal basis irrespective of race, sex, disability, sexual
orientation and religious beliefs. Employee communication and feedback is encouraged across the
Group.
Authority to Allot Unissued Shares
In accordance with normal practice the Directors propose to take the usual authorities under
Sections 551 and 570 of the Companies Act 2006. Therefore it is proposed to extend the Section
551 authority given at the last Annual General Meeting on 28 October 2020 for a further year in
respect of ordinary 10p shares up to a maximum of 2,762,934 shares (£276,293.40). Apart from
possible issues under Employee Share Option Schemes there is at present no intention of issuing
any further ordinary shares. In any event, no issue will be made which would effectively alter the
control of the Company without the prior approval of the Company in general meeting.
Purchase of Shares
The Directors, in line with boards of directors of other listed companies, consider that it would be
appropriate for the Company to have the authority to purchase its own shares as one of a range of
investment options available to them, more especially if the purchase of its own shares produced an
improvement in earnings per share. Shareholders should be assured that the Board will commence
share purchases only after careful consideration and after taking account of the overall financial
position of the Group. An ordinary resolution will be proposed to authorise the Company to make
market purchases of up to a maximum of 460,000 of its own shares, representing less than 5%
of the existing issued ordinary shares. The maximum price to be paid on any exercise of the
authority will be restricted to 5% above the average of the middle market quotation as derived
from The London Stock Exchange Daily Official List for the ordinary shares for the ten dealing
days immediately prior to purchase. The minimum price that may be paid for the ordinary shares
is the nominal value of 10p per share. The authority for the purchase sought at the Annual General
Meeting will expire at the conclusion of the following Annual General Meeting which is expected
to take place in October 2022. The intention of the Board is to seek to renew the authority at future
Annual General Meetings.
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Directors’ Report, the
Corporate Governance Statement, and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial statements for each financial year.
Under that law the Directors have elected to prepare the financial statements in accordance with
international accounting standards in conformity with the requirements of the Companies Act
2006. Under company law the Directors must not approve the financial statements unless they are
1 8
D I R E C T O R S ’ R E P O R T
satisfied that they give a true and fair view of the state of affairs of the Company and of the Group
and of the profit or loss of the Group for that period. In preparing these financial statements, the
directors are required to
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether applicable IFRSs as adopted by the European Union have been followed subject to
any material departure disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the Company’s transactions and disclose with reasonable accuracy at any time the
financial position of the company and enable them to ensure that the financial statements comply
with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company
and the Group and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors are also responsible for ensuring that they meet their responsibilities under the AIM
rules.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation in the United Kingdom governing
the preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.
Disclosure of information to the auditor
In the case of each person who was a Director at the time this report was approved, so far as that
Director was aware there was no relevant available information of which the Group and Company’s
auditor was unaware; and that Director had taken all steps that the Director ought to have taken as
a Director to make himself aware of any relevant audit information and to establish that the Group
and Company’s auditor was aware of that information. This information is given and should be
interpreted in accordance with the provisions of S418 of the Companies Act 2006.
Auditor
A resolution to reappoint the auditor, Nexia Smith & Williamson, will be proposed at the
forthcoming Annual General Meeting.
This report was approved by the Board on 30 September 2021.
P E Bailey
Company Secretary
Registered Number: 02014432
1 9
A U D I T O R S ’ R E P O R T
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FLETCHER KING PLC
Opinion
We have audited the financial statements of Fletcher King plc (the ‘Parent Company’) and its
subsidiaries (the ‘Group’) for the year ended 30 April 2021 which comprise the Consolidated
statement of comprehensive income, the Consolidated statement of financial position, the Company
statement of financial position, the Consolidated statement of cash flows, the Company statement
of cash flows, the Consolidated Statement of changes in equity, the Company statement of changes
in equity and the notes to the financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their preparation is applicable
law and international accounting standards in conformity with the requirements of the Companies
Act 2006.
In our opinion:
•
give a true and fair view of the state of the Group’s and of the Parent Company’s affairs
as at 30 April 2021 and of the Group’s loss for the year then ended;
have been properly prepared in accordance with international accounting standards in
conformity with the requirements of the Companies Act 2006; and
have been prepared in accordance with the requirements of the Companies Act 2006
•
•
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent
of the Group and Parent Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied
to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation
of the directors’ assessment of the Group’s and Parent Company’s ability to continue to adopt the
going concern basis of accounting included:
• Reviewing the future cash flow forecast prepared by management and challenging the
inputs and assumptions included in the forecast. Where appropriate, we corroborated the
inputs and assumptions to supporting information.
• Reviewing the current cash reserves and comparing these to the cash outflows forecast
over the period to the end of September 2022.
Testing the underlying model for mathematical accuracy.
•
• Reviewing alternative scenarios prepared by management to assess the impact of changing
key assumptions and performing additional stress testing of the forecast
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the group
and parent company’s ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
2 0
A U D I T O R S ’ R E P O R T
Key audit matters
We identified the key audit matters described below as those that were of most significance in
the audit of the financial statements of the current period. Key audit matters include the most
significant assessed risks of material misstatement, including those risks that had the greatest effect
on our overall audit strategy, the allocation of resources in the audit and the direction of the efforts
of the audit team.
In addressing these matters, we have performed the procedures below which were designed to
address the matters in the context of the financial statements as a whole and in forming our opinion
thereon. Consequently, we do not provide a separate opinion on these individual matters.
1) Valuation of financial asset investments - Group
Description of risk
The valuation of the Group’s financial asset investment in the Stratton House Investment Property
Syndicate (‘SHIPS 16’) is inherently subjective due to, amongst other factors, determining the
value of the underlying property within the SHIPS 16 accounts (due to the individual nature of
the property, its location and the expected future rentals for that particular property), in order to
estimate the fair value of the Group’s financial asset investment in SHIPS 16. As a result, there is a
risk that management’s estimate of fair value may not be materially correct.
The Directors of the Group prepare a fair value paper each year setting out the methodology adopted
in the fair value calculation and the underlying assumptions and inputs used in the valuation. For
the SHIPS 16 investment the Directors obtained a valuation for the underlying property held as
at 30 April 2021. The property valuation was carried out by employees of Fletcher King Services
Limited (‘FKS’), Chartered Surveyors, a subsidiary of the Parent Company.
In determining the fair value of the financial asset investment, the FKS valuation specialists
apply assumptions for tenure, letting and condition and repair of the property and sites, which are
influenced by comparable market transactions, to arrive at the final valuation for the Group’s share
of the SHIPS 16 financial asset investment.
The Group’s accounting policy for financial asset investments is included within note 3. Details of
the Group’s valuation methodology and resulting valuation can be found in note 14.
How the matter was addressed in the audit
As part of our procedures, we read the Directors’ fair value paper and the underlying valuation
report for the property within SHIPS 16 to understand the valuation approach.
We carried out procedures to verify the Group’s share of the SHIPS 16 and considered the
appropriateness of the basis of valuation.
We challenged management’s estimate and carried out procedures to satisfy ourselves of the
reasonableness of the inputs used by the Directors in their valuations via the corroboration to
external market data. We reviewed sensitivity analysis performed on certain key metrics and
assumptions used by management. We considered the adequacy of disclosures made in note 14.
2 1
A U D I T O R S ’ R E P O R T
2) Revenue recognition – Group
Description of risk
Revenue growth is a key performance indicator of the Group. Revenue and profit based targets and
expectations may place pressure on management to distort revenue recognition. This may result in
overstatement or deferral of revenues to assist in meeting current or future targets or expectations.
How the matter was addressed in the audit
In testing revenue recognition we documented and walked through the controls over revenue
recognition for the different services provided by the Group. We performed detailed substantive
testing of:
• a sample of revenue transactions selected from the accounting records, including
agreement to sales contract and invoice and subsequent client payment to ensure that
revenue exists;
• a sample of revenue transactions spanning the year end to confirm that revenue has
been recognised in the correct accounting period, including recalculation of accrued and
deferred income amounts; and
• a sample of sales invoices raised in the year, as selected from invoice listings maintained
by the relevant departments, including agreement to the accounting records and
subsequent payment to ensure that revenue is complete.
During the above testing we assessed whether revenue had been recognised in accordance with the
Groups accounting policies and accounting standards, specifically IFRS 15. We have performed
testing to identify the quantum of agent costs deducted from revenue in the current and prior year.
We have considered the contractual arrangements in place with the customer and contractor, and
whether Fletcher King is acting as agent or principal. We have assessed the adequacy of disclosures
in relation to the prior year adjustment.
Our application of materiality
The materiality for the Group financial statements as a whole (“group FS materiality”) was set at
£41,300. This has been determined with reference to the benchmark of the Group’s total revenue,
which we consider to be one of the principal considerations for members of the Parent Company in
assessing the performance of the Group. Materiality represents 1.8% of the Group’s total revenue
as presented on the face of the Consolidated Statement of Comprehensive Income.
The materiality for the Parent Company financial statements as a whole (“parent FS materiality”)
was set at £33,000. This has been determined with reference to the benchmark of the Parent
Company’s total assets, which we consider to be an appropriate measure as the Parent Company
exists primarily as a holding company for the Group. This represents 2.3% of the parent company’s
total assets.
Performance materiality for the Group financial statements was set at £33,000, being 80% of group
FS materiality, for purposes of assessing the risks of material misstatement and determining the
nature, timing and extent of further audit procedures. We have set it at this amount to reduce
to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds group FS materiality. We judged this level to be appropriate based on
our understanding of the Group and its financial statements, as updated by our risk assessment
procedures and our expectation regarding current period misstatements including considering
experience from previous audits. It was set at 80% to reflect the fact that in our historical experience
management are keen to process adjustments and there are few areas of judgement and estimation
in the Group financial statements.
2 2
A U D I T O R S ’ R E P O R T
Performance materiality for the Parent Company financial statements was set at £26,400, being
80% of parent FS materiality. It was set at 80% to reflect the fact that in our historical experience
management are keen to process adjustments and there are few areas of judgement and estimation
in the Parent Company financial statements.
An overview of the scope of our audit
Of the Group’s three reporting components, we subjected all components to audits for Group
reporting purposes.
The components within the scope of our work covered 100% of Group revenue, Group profit
before tax and Group net assets.
Other information
The other information comprises the information included in the Annual Report and Accounts,
other than the financial statements and our auditor’s report thereon. The directors are responsible
for the other information contained within the Annual Report and Accounts. Our opinion on
the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in
the course of the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
year for which the financial statements are prepared is consistent with the financial
the information given in the Strategic Report and the Directors’ Report for the financial
•
statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and their
environment obtained in the course of the audit, we have not identified material misstatements in
the strategic report or the directors’ report.
We have nothing to report in respect of the following matters where the Companies Act 2006
requires us to report to you if, in our opinion:
•
adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records
and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
•
•
•
2 3
A U D I T O R S ’ R E P O R T
Responsibilities of directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 18, the
directors are responsible for the preparation of the financial statements and for being satisfied that
they give a true and fair view, and for such internal control as the directors determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either intend
to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud, is detailed below:
We obtained a general understanding of the Parent Company and Group’s legal and regulatory
framework through enquiry of management concerning: their understanding of relevant laws and
regulations; the policies and procedures regarding compliance; and how they identify, evaluate and
account for litigation claims. We also drew on our existing understanding of the Parent Company
and Group’s industry and regulation.
We understand that the Parent Company and Group comply with the framework through:
•
•
Outsourcing payroll and insurance services to external experts.
Subscribing to relevant updates from external experts and making changes to internal
procedures and controls as necessary.
The directors’ close involvement in the day-to-day running of the business, meaning that
any litigation or claims would come to their attention directly.
The directors’ relevant knowledge and expertise of the property fund management,
property asset management, rating, valuations and investment broking industries, and
related laws and regulations.
Provision of staff training and maintenance of a Money Laundering Compliance manual.
•
•
•
In the context of the audit, we considered those laws and regulations: which determine the form
and content of the financial statements; which are central to the Parent Company and Group’s
ability to conduct its business; and where failure to comply could result in material penalties. We
identified the following laws and regulations as being of significance in the context of the Parent
Company and Group:
•
The Companies Act 2006 and IFRS in respect of the preparation and presentation of the
financial statements;
AIM rules and UK Market Abuse Regulations;
•
2 4
A U D I T O R S ’ R E P O R T
•
•
•
Royal Institution of Chartered Surveyors Standards;
The Proceeds of Crime Act 2002; and
The UK regulatory principles, including those governed by the Financial Conduct
Authority (FCA).
We performed the following specific procedures to gain evidence about compliance with the
significant laws and regulations identified above:
Made enquiries of management;
•
Inspected correspondence with regulators;
•
Reviewed board meeting minutes held during the year and post year-end; and
•
Obtained written management representations regarding the adequacy of procedures in
•
place.
The senior statutory auditor led a discussion with senior members of the engagement team regarding
the susceptibility of the Parent Company and Group’s financial statements to material misstatement,
including how fraud might occur. The key areas identified in this discussion were with regard to the
manipulation of the financial statements through manual journal entries, including those in relation
to estimates, and incorrect recognition of revenue.
These areas were communicated to the other members of the engagement team who were not
present at the discussion.
The procedures we carried out to gain evidence in the above areas included:
•
Testing of manual journal entries, selected based on specific risk assessments applied
based on the Group and Parent Company’s processes and controls surrounding manual
journal entries;
Substantive testing of revenue transactions (see KAM section above); and
Reviewing and challenging estimates made by management.
•
•
A further description of our responsibilities for the audit of the financial statements is located
on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we
might state to the Parent Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent Company and the Parent Company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Jacqueline Oakes
Senior Statutory Auditor, for and on behalf of
Nexia Smith & Williamson
Statutory Auditor
Chartered Accountants
25 Moorgate
London
EC2R 6AY
30 September 2021
2 5
C O N S O L I D AT E D S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E
for the year ended 30 April 2021
Notes
4 Revenue
7 Employee benefits expense
12 Depreciation expense
Other operating expenses
21
Share based payment expense
Other operating income
8 Investment income
8 Finance income
8 Finance expense
(Loss)/Profit before taxation
9 Taxation
(Loss)/Profit for the year
2021
£000
2020
£000
Restated*
2,264
2,896
(1,262)
(281)
(1,566)
-
(3,109)
25
-
2
(16)
(834)
146
(688)
(1,441)
(278)
(1,190)
(68)
(2,977)
57
113
14
(27)
76
(40)
36
Other comprehensive income
Fair value (loss)/gain on financial assets through other
comprehensive income
(101)
99
Total comprehensive income for the year
attributable to equity shareholders
(789)
135
Earnings per share
11 Basic
11 Diluted
Adjusted earnings per share
11 Basic
11 Diluted
(7.47p)
(7.47p)
(8.57p)
(8.57p)
0.39p
0.39p
2.20p
2.20p
* Prior year restatement relates to the realignment of the Group’s revenue recognition policy to the principal versus
agent requirements of IFRS 15. As a result, revenue has been presented gross of fees shared with third parties,
with the related costs now included within other operating expenses. The impact on revenue and costs is £0.28m.
The restatement has no impact on the Group’s profit for the year, earnings per share or net asset position.
Please see note 2 for further details.
The notes on pages 32 to 52 form part of the financial statements.
2 6
C O N S O L I D AT E D S TAT E M E N T O F F I N A N C I A L P O S I T I O N
as at 30 April 2021
Notes
Assets
Non-current assets
12 Property, plant and equipment
12 Right of use asset
14 Financial assets
19 Deferred tax assets
Current assets
15 Trade and other receivables
Corporation tax debtor
16 Cash and cash equivalents
2021
£000
12
272
529
-
813
1,148
111
2,892
4,151
2020
£000
21
544
630
-
1,195
680
-
3,624
4,304
Total assets
4,964
5,499
Liabilities
Current liabilities
17 Trade and other payables
18 Provisions
Current taxation liabilities
12 Lease liabilities
Non current liabilities
12 Lease liabilities
908
100
-
577
1,585
689
-
35
299
1,023
-
262
Total liabilities
1,585
1,285
Shareholders’ equity
20 Share capital
Share premium
Investment revaluation reserve
Retained earnings
Total shareholders’ equity
921
140
(101)
2,419
3,379
921
140
-
3,153
4,214
Total equity and liabilties
4,964
5,499
Approved by the Board on 30 September 2021 and signed on its behalf by
David Fletcher
Chairman
Registered Number: 02014432 England and Wales
The notes on pages 32 to 52 form part of the financial statements.
2 7
C O M PA N Y S TAT E M E N T O F F I N A N C I A L P O S I T I O N
as at 30 April 2021
Notes
Assets
Non-current assets
2021
£000
2020
£000
13 Investments in group undertakings
118
118
Current assets
15 Trade and other receivables
16 Cash and cash equivalents
14
1,291
1,305
14
1,370
1,384
Total assets
1,423
1,502
Liabilities
Current liabilities
17 Trade and other payables
328
214
Total liabilities
328
214
Shareholders’ equity
20 Share capital
Share based payment reserve
Share premium
Retained earnings
921
-
140
34
921
68
140
159
Total shareholders’ equity
1,095
1,288
Total equity and liabilities
1,423
1,502
As permitted by section 408(3) of the Companies Act 2006, the Company has taken
advantage of the legal dispensation not to present its own Statement of Comprehensive
Income. The loss after taxation of the Company for the year was £147,000 (2020: profit
of £169,000).
Approved by the Board on 30 September 2021 and signed on its behalf by
David Fletcher
Chairman
Registered Number: 02014432 England and Wales
The notes on pages 32 to 52 form part of the financial statements.
2 8
C O N S O L I D AT E D S TAT E M E N T O F C A S H F L O W S
for the year ended 30 April 2021
Cash flows from operating activities
(Loss)/Profit before taxation from continuing operations
(834)
76
2021
£000
2020
£000
Adjustments for:
Movement in provision
Depreciation expense
Investment income
Finance income
Finance expense
Share based payment expense
Cash flows from operating activities before
movement in working capital
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash (absorbed by)/generated from operations
Taxation paid
Net cash flows from operating activities
Cash flows from investing activities
Sale of investments
Purchase of fixed assets
Investment income
Finance income
Net cash flows from investing activities
Cash flows from financing activities
Lease payments
Dividends paid to shareholders
Net cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year (note 16)
The notes on pages 32 to 52 form part of the financial statements.
100
281
-
(2)
16
-
(439)
(468)
219
(688)
-
(688)
-
-
-
2
2
-
(46)
(46)
(732)
3,624
2,892
-
278
(113)
(14)
27
68
322
1,077
(468)
931
(14)
917
1,072
(18)
113
14
1,181
(314)
(161)
(475)
1,623
2,001
3,624
2 9
C O M PA N Y S TAT E M E N T O F C A S H F L O W S
for the year ended 30 April 2021
Cash flows from operating activities
(Loss)/profit before taxation
Adjustments for:
Finance income
Dividends received from subsidiary undertakings
2021
£000
2020
£000
(147)
169
(1)
(46)
(9)
(311)
Cash flows from operating activities before
(194)
(151)
movement in working capital
Increase in trade and other payables
Cash absorbed by operations
Cash flows from investing activities
Dividends received from subsidiary undertakings
Finance income
Net cash flows from investing activities
Cash flows from financing activities
Dividends paid to shareholders
Net cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year (note 16)
114
(80)
46
1
47
(46)
(46)
(79)
1,370
1,291
144
(7)
311
9
320
(161)
(161)
152
1,218
1,370
The notes on pages 32 to 52 form part of the financial statements.
3 0
S TAT E M E N T O F C H A N G E S I N E Q U I T Y
for the year ended 30 April 2021
CONSOLIDATED
Share
capital
Share
Investment
Retained
TOTAL
premium
Revaluation
earnings
EQUITY
Reserve
£000
£000
£000
£000
£000
Balance at 1 May 2019
921
140
-
3,111
4,172
Total comprehensive income
for the year
Equity dividends paid
Share based payment expense
-
-
-
-
-
-
Balance at 30 April 2020
921
140
Loss for the year
Fair value loss on financial
assets through other
comprehensive income
Equity dividends paid
-
-
-
-
-
-
**-
135
135
-
-
-
-
(161)
(161)
68
68
3,153
4,214
(688)
(688)
(101)
-
-
(46)
(101)
(46)
Balance at 30 April 2021
921
140
(101)
2,419
3,379
** The fair value gain on financial assets through Other Comprehensive Income represented a realised gain
COMPANY
Share
capital
Share
Share
Retained
TOTAL
based
premium
earnings
EQUITY
payment
reserve
£000
£000
£000
£000
£000
Balance at 1 May 2019
921
Total comprehensive income for the
year
Equity dividends paid
Share based payment expense
-
-
-
Balance at 30 April 2020
921
Total comprehensive income for the
year
Equity dividends paid
Transfer to retained earnings
-
-
-
-
-
-
68
68
-
-
(68)
140
151
1,212
-
-
-
169
169
(161)
(161)
-
68
140
159
1,288
-
-
-
(147)
(147)
(46)
68
(46)
-
Balance at 30 April 2021
921
-
140
34
1,095
3 1
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
1. General information
Fletcher King Plc (‘the Company’) and its subsidiaries (together ‘the Group’) carry on the business
of property fund management, property asset management, rating, valuations and investment
broking throughout the United Kingdom. The Company is a public limited company incorporated
and domiciled in England and Wales and listed on the AIM Market of The London Stock Exchange.
The registered office address is 61 Conduit Street, London W1S 2GB. These consolidated financial
statements were approved for issue by the Board of Directors on 30 September 2021. They
are presented in Sterling which is the Group’s functional currency. The Group has no overseas
operations..
2. Basis of preparation and presentation of financial statements
These consolidated financial statements have been prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006 and under
the historical cost convention, except for the revaluation of certain financial assets.
2.1 Prior year adjustment – Revenue including other operating expenses
In line with IFRS 15, revenue has been restated to be recognised on a gross basis and the fees and
associated operating expenses are disaggregated and shown separately. This change in presentation
has arisen from the Group’s reassessment of the principal versus agent considerations guidance in
IFRS 15 with regards to fee sharing arrangements. This represents a prior year adjustment under
IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors and has been applied
retrospectively from the earliest comparative period disclosed in these financial statements.
The change has no impact on the Group’s profits or net asset position.
The impact of this change has been to increase revenue by £0.222m in the year ended 30 April
2021 and by £0.280m in the year ended 30 April 2020.
2.2 Going concern
The Directors have carried out an analysis to support their view that the Group is a going concern
and under which basis these financial statements have been prepared.
Underlying their conclusion is the Group’s cash balance as at 30 April 2021 of £2.9 million. The
Board believes it is well placed to navigate a prolonged period of uncertainty if necessary.
Analysis and scenario testing, which includes the impact from the ongoing COVID-19 pandemic,
has been carried out on the Group’s main income streams:
•
•
•
•
contingent transactional fees such as property transactions and rating assessments,
bank valuations,
recurring fee income associated with fund and property management contracts, and
cash returns from investments.
Whilst transactional fees may continue to be materially lower than would otherwise be expected,
the Group is well supported by its management contracts and strong balance sheet.
Based on the results of the analysis carried out as outlined above the Board believes that the Group
3 2
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
has the ability to continue its business for at least 12 months from the date of approval of the
financial statements and therefore has adopted the going concern basis in the preparation of this
financial information.
2.3 Changes in accounting policies and disclosures
(a) New and amended standards and interpretations adopted by the Group and Company
Standards, amendments and interpretations endorsed by the UK and mandatorily effective for the
first time for the financial year beginning 1 May 2020 include the following:
•
•
IFRS 3 has been amended for the definition of business which clarifies whether a
transaction should be accounted for as a business combination or as an asset acquisition.
Under the amended definition, a business acquired must have an input and a substantive
process that together contribute to the ability for the business to create outputs.
Amendments have been made to IAS 1 Presentation of Financial Statements and IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors in relation to the
definition of material. The amendments clarify the definition of what is material to the
financial statements and how to apply the definition.
(b) New and amended Standards and Interpretations mandatory for the first time for the
financial year beginning 1 May 2020 but not currently relevant to the Group or Company.
The following new and amended Standards and Interpretations are not currently relevant to the
Group or Company; however they may have an impact in future years:
•
Interest rate benchmark reform: amending hedge accounting requirements of IFRS 9, IAS
39 and IFRS 7.
(c) New and amended Standards and Interpretations issued but not effective for the financial
year beginning 1 May 2020.
•
•
•
Amendment to IAS 1: Classification of Liabilities as Current or Non-current
IFRS 16: Covid-19 – Related Rent Concessions (Amendments to IFRS 16)
IBOR Reform and its Effects on Financial Reporting – Phase 2
3. Principal accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies, which are also applicable to the financial statements of the Company, have
been consistently applied to all the years presented.
Basis of consolidation
Both the consolidated and the Company’s financial statements are for the year ended 30 April 2021
and present comparative information for the year ended 30 April 2020. All intra-group transactions,
balances, income and expenditure are eliminated upon consolidation.
The Group’s financial statements incorporate the financial statements of Fletcher King plc and
other entities controlled by the Company (‘the subsidiaries’). The control principle in IFRS 10
sets out the following three elements of control: power over the investee; exposure, or rights, to
variable returns from involvement with the investee; and. the ability to use power over the investee
to affect the amount of those returns. The financial statements of these other entities cease to be
included in the Group financial statements from the date that control ceases.
3 3
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
Property, plant and equipment and depreciation
Property, plant and equipment are stated at historical cost, net of depreciation, at rates calculated to
write off the cost, less residual value, of each asset over its expected useful life. Depreciation rates
on a straight line basis are as follows:
Office furniture and fittings
Computer equipment
Leasehold improvements
Right-of use asset (head office)
25%
33%
Straight line over life of lease
Straight line over life of lease
Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent
costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the statement of comprehensive income during the financial period in which they are
incurred.
Residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are
determined by comparing proceeds with carrying amount. These are included in the Statement of
Comprehensive Income.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker as required by IFRS 8 “Operating Segments”. The chief operating
decision-maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the Executive Committee.
Investment in subsidiaries
Investments held by the Company in subsidiary entities are shown at cost less any provision for
impairment.
Financial instruments
Financial assets and liabilities are recognised on the Group’s statement of financial position when
the Group becomes a party to the contractual provisions of the instrument. Measurement depends
on their classification and is discussed below:
(i) Investments
The Directors determine the classification of investments held by the Group at initial recognition
and re-evaluate this designation at each reporting date. At the reporting date all these investments
were designated as financial assets at fair value through other comprehensive income (FVOCI).
Financial assets are initially recognised at the fair value of the consideration given, including
associated acquisition costs, which may equate to cost. On subsequent measurement, financial
assets are measured at either fair value or at cost where fair value is not reliably measurable.
Changes in fair value are recognised in Other Comprehensive Income, together with the related
deferred tax asset or liability.
Financial assets are included in non-current assets unless management intends to dispose of the
investment within twelve months of the reporting date.
3 4
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
(ii) Trade and other receivables
Trade and other receivables are initially measured at transaction price and are subsequently
measured at amortised cost using the effective interest method. The Group applies the simplified
approach to measuring expected credit losses (“ECL”). Trade receivables have been grouped
according to shared credit risk characteristics and days past due. The ECL rates are based on
historic payment profiles and credit losses experienced, adjusted for forecasts of future economic
conditions. The amount of any provision is recognised in the Statement of Comprehensive Income.
All financial assets (with the exception of financial assets measured at fair value through other
comprehensive income) are reviewed annually for impairment, with any losses reflected in
the statement of comprehensive income. Investment income is recognised in the Statement of
Comprehensive Income.
(iii) Cash and cash equivalents
Cash and cash equivalents include cash in hand, call deposits held with banks, and other short-term
highly liquid investments with original maturities of three months or less.
(iv) Financial liabilities and equity
Financial liabilities and equity instruments issued by the Group are classified in accordance with
the substance of the contractual arrangements entered into and the definitions of a financial liability
and an equity instrument. An equity instrument is any contract that evidences a residual interest
in the assets of the Group after deducting all of its liabilities. The accounting policies adopted for
specific financial liabilities and equity instruments are set out below.
•
Trade and other payables
•
Trade and other payables are initially measured at fair value, and are subsequently
measured at amortised cost using the effective interest rate method.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of new shares or options are shown in equity as a deduction from the proceeds, net of tax.
Taxation
Current income tax is provided on taxable profits at the current rate. Deferred income tax is provided
in full, using the liability method, on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated financial statements. Deferred income
tax is determined using rates enacted at the reporting date which are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred
income tax assets are only recognised to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be utilised.
Income tax and deferred tax are reflected in the Statement of Comprehensive Income, unless they
relate to items recognised in equity, in which case they are recognised in equity.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result
of past events, it is probable that the Group will be required to settle the obligation, and the amount
can be reliably estimated. The dilapidations provision is measured at the Directors’ best estimate
of the expenditure required to settle the obligation at the reporting date.
Revenue recognition
Revenue is measured based on the consideration specified in a contract with a client and excludes
amounts collected on behalf of third parties. The Group recognises revenue when it transfers
3 5
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
control of a product or service to a client.
Revenue comprises commissions and fees receivable excluding value added tax. Asset management
and administration fees are recognised in the statement of comprehensive income as services
are rendered. Performance related fees are recognised when the performance calculation can
be performed with reasonable certainty, and it is highly probable there will not be a significant
reversal of revenue in a future period, which is normally when the performance period has ended.
Transaction fees are recognised once the relevant transaction has completed.
Transaction fees are invoiced to the client upon completion. Payment arrangements for property
management and fund management services vary between contracts and are generally invoiced
quarterly in advance or quarterly in arrears.
There has been no material change in the recognition of revenue year on year.
Interest and investment income is recognised on a time-proportion basis using the effective interest
method.
Operating profit
Operating profit is stated before income from investments, finance income, costs and losses on
impairment of financial assets and taxation.
Employee benefits
Contributions to employees’ money-purchase pension schemes are made on an arising basis where
these form part of contractual remuneration obligations. The Group recognises a liability and
an expense for cash-settled bonuses when contractually obliged or when there is a past practice
creating a constructive obligation.
Share based payments
The Group issues options over the Company’s equity to certain employees and these are measured
for fair value at the date of grant using the Black-Scholes model. Where material, this fair value is
fully expensed over the vesting period and is credited to the share-based payment reserve shown
under shareholders’ equity in the statement of financial position. Management’s best estimates of
leavers, price volatility and exercise restrictions have been used in the valuation method. All options
were surrendered during the year ended 30 April 2020. The Company accounted for the surrender
of options as a cancellation resulting in an acceleration of vesting, and therefore recognised
immediately the amount that otherwise would have been recognised for services received over the
remainder of the vesting period.
Leases
A right of use asset and a lease liability has been recognized for all leases except leases of low
value assets, which are considered to be those with a fair value below £4,500, and those with a
duration of 12 months or less. The right-of-use asset has been measured at cost, which is made up
of the initial measurement of the lease liability, any initial direct costs incurred by the Group, and
any lease payments made in advance of the lease commencement date.
The Group will depreciate the right-of-use assets on a straight-line basis from the lease
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end
of the lease term. Where impairment indicators exist, the right of use asset will be assessed for
impairment.
3 6
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
The lease liabilities are measured at the present value of the lease payments due to the lessor over
the lease term, discounted using the interest rate implicit in the lease if that rate is readily available
or the Group’s incremental borrowing rate.
After initial measurement, any payments made will reduce the liability and the interest accrued will
increase it. Any reassessment or modification will lead to a remeasurement of the liability. In such
case, the corresponding adjustment will be reflected in the right-of-use asset, or profit and loss if
the right-of-use asset is already reduced to zero.
Dividend Distributions
Dividends to the Company’s shareholders are recognised as a liability when paid (if interim
dividends) or approved by shareholders (if final dividends).
Critical accounting estimates and judgments
The preparation of the consolidated financial statements in conformity with International Financial
Reporting Standards requires management to make estimates and judgments concerning the future.
While the resulting accounting estimates will, by definition, seldom equal the related actual results,
in the opinion of the Directors the estimates and judgments that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year
are detailed below.
(i) Fair value of financial assets (estimate and judgment)
The fair value of financial assets is determined by reference to the underlying value of the assets of
those investments at each reporting date. The Directors have made adjustments to fair value where
there is objective evidence that fair value is higher or lower than cost. Details of carrying amounts
are provided in note 14.
(ii) Provisions for expected credit losses relating to trade receivables (estimate)
Trade and other receivables are initially measured at transaction price and are subsequently
measured at amortised cost using the effective interest method. The Group applies the simplified
approach to measuring expected credit losses (“ECL”). Trade receivables have been grouped
according to shared credit risk characteristics and days past due. The ECL rates are based on
historic payment profiles and credit losses experienced, adjusted for forecasts of future economic
conditions. The amount of any provision is recognised in the Statement of Comprehensive Income.
3 7
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
4. Revenue and Segment Information – Group
All revenue was generated in the UK.
IFRS 8 requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the chief operating decision maker to
allocate resources to the segments and to assess their performance. The chief operating decision
maker has been identified as the Executive Committee. They review the Group’s internal reporting
in order to assess performance and allocate resources. The Executive Committee considers that the
business comprises a single activity being General Services as resources are not allocated between
individual General Services and therefore these do not meet the definition of an operating segment
in IFRS 8. Therefore, the Group is organised into one operating segment and there is one reporting
segment. The segment information is the same as that set out in the Consolidated Statement of
Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of
Changes in Equity and Consolidated Statement of Cash Flows.
Transaction based fees (recognised at a point in time) such as investment deals, property valuations
and rating appeals accounted for 30% of revenue for the year (2020: 40%). The balance of revenue
was from less transactional activity (recognised over time), including recurring fee income from
property asset management and fund management contracts.
5. Alternative performance measures – (loss)/profit reconciliation
The reconciliation set out below provides additional information to enable the reader to reconcile
to the numbers discussed in the Chairman’s Statement and Strategic Report.
(Loss)/profit before taxation
Add back: Share based payment expense
Include: Fair value (loss)/gain on financial assets through OCI
Adjusted (loss)/profit before share based payment expense and
taxation
Taxation
Adjusted (loss)/profit after tax for the year
2021
£000
(834)
-
(101)
(935)
146
(789)
2020
£000
76
68
99
243
(40)
203
The fair value loss on financial assets represents the unrealised loss in the year on the revaluation
of the Group’s interest in the SHIPS 16 syndicate.
For the prior year, the fair value gain on financial assets represents the realised gain in the year
on the disposal of the Group’s interest in the SHIPS 15 syndicate. The profit is shown in the
Consolidated Statement of Comprehensive Income as other comprehensive income.
The Company accounted for the surrender of options in the prior year as a cancellation, in accordance
with IFRS 2, resulting in an acceleration of vesting and a share-based payment charge of £68,000
(2021: £nil). The charge reflected the amount that otherwise would have been recognised for
services received over the remainder of the vesting period.
3 8
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
6. Operating profit
Operating profit is stated after charging / (crediting):
Year ended 30 April
Depreciation
Rental income
Fees payable to the Company’s auditor for the audit
of the Company’s consolidated annual financial statements
Fees payable to the Company’s auditor and its associates
for other services:
•
the audit of the Company’s subsidiaries
•
•
other assurance services
tax compliance services
2021
£000
281
(25)
17
25
3
9
2020
£000
278
(57)
17
25
4
9
Fees payable to the Company’s auditors for non-audit services to the Company itself are not
disclosed in the individual financial statements of Fletcher King plc because the Company’s
consolidated financial statements are required to disclose such fees on a consolidated basis.
7. Employee benefits expense
Year ended 30 April
Basic wages and salaries
Performance-based payments
Social security costs
Pension costs
Other costs
Group
2021
£000
1,042
-
1,042
138
14
68
Group
Company
Company
2021
£000
2020
£000
2020
£000
998
210
1,208
157
14
62
90
-
90
12
-
-
1,262
1,441
102
83
-
83
11
-
-
94
3 9
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
The average number of persons (including directors) employed by the Group was as follows:
Year ended 30 April
Management
Professional
Administration
Directors’ emoluments
Salaries and benefits
Performance-related bonuses
Pension contribution
Highest paid director
Basic pay
Benefits
Performance related bonus
Group
2021
No
Group
Company
Company
2020
No
2021
No
2020
No
5
6
3
14
5
6
3
14
5
-
-
5
2021
£000
574
-
3
577
2021
£000
100
35
-
135
5
-
-
5
2020
£000
523
126
3
652
2020
£000
100
33
27
160
Key management compensation
Key management are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity. In the opinion of the Board, the Group’s key management
comprises the Executive and Non-Executive Directors of Fletcher King plc. Information regarding
their compensation, all of which are short-term benefits, is set out below:
4 0
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
Aggregate compensation for key management, being the Directors of the Company, was as follows:-
Short term employee benefits
2021
£000
2020
£000
656
739
In accordance with AIM Rule 19, information of individual director’s remuneration has been
disclosed in the Directors’ Report.
8. Finance income and expense
Year ended 30 April
Finance income
Investment income
Bank interest receivable
2021
£000
-
2
2
2020
£000
113
14
127
Investment income of £113,000 was received in the prior year from interests in SHIPS syndicates.
Year ended 30 April
Finance expense
Finance charges on lease liabilities
9. Taxation
Year ended 30 April
Current tax
UK corporation tax – current year
UK corporation tax – prior years
Deferred tax
UK deferred tax – current year
Total tax charged for the year
2021
£000
2020
£000
16
27
2021
£000
(111)
(35)
(146)
-
-
(146)
2020
£000
35
(11)
24
16
16
40
4 1
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
The effective rate of UK corporation tax is calculated as the standard rate of UK corporation tax of
19%. The difference between the total current tax shown above and the amount calculated applying
the effective rate of UK corporation tax, to the profit before taxation is as follows:
Year ended 30 April
(Loss)/Profit before taxation
Tax on Group profit at UK corporation tax rate of 19% (2020:
19%)
Expenses not deductible for tax purposes
Share based payment expense
Fair value gain
Prior year adjustment
Unrelieved losses
Other adjustments
Group total tax (credit)/charge for the year
10. Dividends
Year ended 30 April
Equity dividends on ordinary shares:
Declared and paid during year
Ordinary final dividend for the year ended 30 April 2020: 0.50p
per share (2019: 0.75p)
Interim dividend for the year ended 30 April 2021: nil per share
(2020: 1.00p)
Proposed ordinary final dividend for the year ended
30 April 2021: nil per share
2021
£000
(834)
(158)
1
-
-
-
11
-
(146)
2020
£000
76
14
7
13
19
(11)
-
(2)
40
2021
£000
2020
£000
69
92
161
46
-
46
-
4 2
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
11. Earnings per share
Number of shares
2021
No
2020
No
Weighted average number of shares for basic earnings per share
Share Options
9,209,779
-
9,209,779
-
Weighted average number of shares for diluted earnings per share
9,209,779
9,209,779
Earnings
(Loss)/profit after tax for the year
(used to calculate the basic and diluted earnings per share)
Add back: Share based payment expense
Include: Fair value (loss)/gain on financial assets through OCI
Adjusted (loss)/profit after tax for the year
(used to calculated adjusted basic and diluted earnings per share)
Earnings per share
Basic
Diluted
Adjusted earnings per share
Basic
Diluted
£000
£000
(688)
-
(101)
(789)
(7.47p)
(7.47p)
(8.57p)
(8.57p)
36
68
99
203
0.39p
0.39p
2.20p
2.20p
All share options were surrendered
in April 2020. The share options were non-
dilutive for the year ending 30 April 2020 and as a result were not included within
the weighted average number of shares for the diluted earnings per share calculation.
4 3
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
12. Property, plant and equipment - Group
Right
of use
£000
Furniture,
fittings and
computers
Leasehold
improvements
£000
£000
Cost
At 1 May 2020
Additions
As at 30 April 2021
Depreciation
At 1 May 2020
Charge for the year
At 30 April 2021
Net book value at 30 April 2021
Cost
At 1 May 2019
Additions
As at 30 April 2020
Depreciation
At 1 May 2019
Charge for the year
At 30 April 2020
Net book value at 30 April 2020
816
-
816
272
272
544
272
816
-
816
-
272
272
544
199
-
199
184
6
190
9
181
18
199
181
3
184
15
Total
£000
1,305
-
1,305
740
281
1,021
290
-
290
284
3
287
3
284
290
-
290
281
3
284
1,287
18
1,305
462
278
740
6
565
Lease liabilities relating to the right of use asset are £577k and all current. Maturity analysis is
disclosed in note 25.
4 4
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
13. Investments in Group undertakings - Company
Year ended 30 April
Shares in Group undertakings
2021
£000
2020
£000
118
118
As at 30 April 2021, the Company owns 100% of the ordinary share capital of the following
companies registered in England and Wales, the accounts of which are consolidated into the Group
accounts: Fletcher King Services Limited, which is the trading subsidiary through which the
Fletcher King business is carried out and Fletcher King Investment Management Plc, the Group’s
FCA-regulated investment services company.
Fletcher King Services Ltd also own 100% of the ordinary share capital of the following nominee
companies in which the Company has no beneficial interest: Stratton One Limited, Stratton Two
Limited, Stratton 9 Limited, Stratton 10 Limited, Stratton 11 Limited and Stratton 12 Limited.
The registered office of all the above named companies is 61 Conduit Street, London, W1S 2GB.
14. Financial assets – Group
Year ended 30 April
At 1 May
Disposals
Decrease in fair value in year
At 30 April
2021
£000
630
-
(101)
529
2020
£000
1,603
(973)
-
630
The Group holds unlisted investments in property syndicates managed by it. All are held at fair
value. All of the assets have been designated at fair value through other comprehensive income
upon the adoption of IFRS 9. Fair value has been arrived at by applying the Group’s percentage
holding in the investments to the fair value of their net assets. The investment is as follows:
An amount of £529,000 (2020: £630,000) represents a syndicate interest in the Stratton House
Investment Property Syndicate (SHIPS 16).
Fair value of the net assets of the investment is determined by professional valuers at Fletcher
King Services Limited based primarily on the expected rental value and yield of the underlying
properties. Valuations are reviewed and challenged by the Group’s Executive Committee and
Audit Committee to verify that the fair value represents the amount at which the assets could be
exchanged by a knowledgeable willing buyer and a knowledgeable willing seller in an arms-length
transaction. Valuations are inherently subjective with uncertainty with regard to future yields and
the amounts which may ultimately be realised in respect of any given property may differ from
the valuations shown in the Statement of Financial Position. A movement of approximately 0.35%
in the yield assumptions would have a material effect on the financial statements. Under IFRS7
Financial instruments: Disclosures and IFRS13 Fair value measurements, UK unlisted equity
investments are classified under the fair value hierarchy as Level 3.
4 5
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
15. Trade and other receivables
Year ended 30 April
Trade receivables
Other receivables
Prepayments
Accrued income
Group
2021
£000
983
4
126
35
1,148
Group
Company
Company
2020
£000
544
2
79
55
680
2021
£000
2020
£000
-
2
12
-
14
-
2
12
-
14
Trade receivables are non-interest bearing and generally have a 30-90 day term. Due to their short
maturities, the fair value of trade receivables approximates their book value.
A provision is made against trade receivables based on expected credit losses, determined by
reference to past payment history, current financial status of the customer and future expectations.
As at 30 April 2021, there were expected credit losses of £nil (2020: £nil).
As at 30 April 2021, trade receivables of £567,000 (2020: £412,000) were past due, but not
impaired. In the opinion of the Directors the Group is not exposed to any one material credit risk
and all trade receivables are assessed by the Group to be good quality. The ageing analysis of these
trade receivables is as follows:
Year ended 30 April
Up to 3 months past due
3 to 6 months past due
Over 6 months past due
16. Cash and cash equivalents
Cash at bank and in hand
Group
2021
£000
343
224
-
567
Group
2021
£000
2,892
2,892
Group
Company
Company
2020
£000
394
18
-
412
2021
£000
2020
£000
-
-
-
-
-
-
-
-
Group
Company
Company
2020
£000
3,624
3,624
2021
£000
1,291
1,291
2020
£000
1,370
1,370
Cash and cash equivalents are all denominated in Sterling. The effective interest rate on Group
cash balances for the year ended 30 April 2021 was 0.07% (2020: 0.38%). There is no material
difference between the fair value and book value of cash and cash equivalents.
4 6
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
17. Trade and other payables
Year ended 30 April
Trade payables
Amount owed by group undertakings
Other taxation and social security
Accurals
Deferred income
Group
Group
Company
Company
2021
£000
2020
£000
432
-
175
160
141
908
113
-
221
304
51
689
2021
£000
1
288
-
39
-
328
2020
£000
1
199
-
14
-
214
The carrying amounts of trade and other payables approximate their fair value.
18. Provisions - Group
Year ended 30 April
Current liabilities
At 30 April
2021
£000
2020
£000
100
-
The provision at 30 April 2021 represents an assessment of potential dilapidations expenses on
termination of the lease on the company offices.
Movements in the provision were as follows:
Provision as at 1 May
Increase in provision
Provision as at 30 April
19. Deferred taxation (non-current) - Group
Year ended 30 April
Deferred taxation asset:
Temporary differences on provisions
At 1 May
Movement during year
At 30 April
2021
£000
-
100
100
2021
£000
-
-
-
2020
£000
-
-
-
2020
£000
16
(16)
-
4 7
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
20. Share capital and other reserves
30 April
20210
Number
30 April
2020
Number
30 April
2021
£000
30 April
2020
£000
Ordinary shares of 10p each:
Authorised
11,000,000
11,000,000
1,100
1,100
Issued and fully paid
9,209,779
9,209,779
921
921
The Company has one class of ordinary shares which carry no rights to fixed income. No shares
were issued during the year.
Details of movements in other reserves are set out in the Statement of Changes in Equity. A
description of each reserve is set out below.
The Share Premium reserve records the amount above the nominal value received for shares sold,
less transaction costs.
The Investment Revaluation reserve recognises the unrealised loss or gain on the fair value of
financial assets.
Retained earnings are the accumulated, undistributed profits of the Group or Company that have
been recognised through the Statement of Comprehensive Income.
21. Share Options
In April 2020, the holders of all 1,240,000 options issued under the Company’s Enterprise
Management Incentive (“EMI”) plan surrendered their options. As a result, a charge of £68,000
was recognised in the year ended 30 April 2020. No charge was recognised in the year ended 30
April 2021 and this amount has been transferred to retained earnings.
At 30 April 2020 and 30 April 2021 there were no options in issue.
22. Capital Commitments
As at 30 April 2021 and 30 April 2020 neither the Group nor the Company had any capital
commitments.
23. Related party transactions
Transactions between the Company and its subsidiaries are in the normal course of business. Such
transactions are eliminated on consolidation. Total inter-company balances between the Company
and its subsidiaries, which are unsecured and which relate to the provision of working capital, are
disclosed in the notes to the accounts.
Group companies hold investments in a number of property funds (see note 14) in which Group
4 8
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
companies also act as fund manager. During the year, Group companies received fees and were
owed amounts as follows:-
SHIPS 04 Fund
SHIPS 15 Fund
SHIPS 16 Fund
Fees
Amount Due
2021
£000
-
-
70
2020
£000
52
171
62
2021
£000
-
-
37
2020
£000
-
-
-
All transactions were made in the ordinary course of business.
Compensation paid to the Company’s Board of Directors and key management is disclosed in note
7 and in the Directors Report.
24. Subsequent events
On 2 July 2021 the Company announced, in response to press speculation, that it was in discussions
with Elliott Bernerd in respect of a potential purchase of existing shares, issue of new shares
(together, constituting no more than 29.99% of the Company’s issued share capital) and new board
appointments (the “Potential Transaction”). Discussions remain ongoing, including regarding
price, and while there can be no certainty that the Potential Transaction will proceed, the Board
will make further announcements in due course.
25. Financial instruments
The Group’s and the Company’s financial instruments comprise UK unlisted investments, cash
and cash equivalents, and items such as trade payables and trade receivables which arise directly
from its operations. The main purpose of these financial instruments is to provide capital gains and
finance for the Group’s and the Company’s operations.
The Group’s and the Company’s operations expose them to a variety of financial risks including
credit risk, interest rate risk, and liquidity risk. Commensurate with the size of the Group, the
Directors set the policies regarding financial risk management, and these are implemented
accordingly by Group companies.
Financial assets at amortised
cost
Group
Group
Company
Company
Trade receivables
Other receivables
Cash and cash equivalents
2021
£000
983
4
2,892
3,879
2020
£000
544
2
3,624
4,170
2021
£000
-
2
1,291
1,293
2020
£000
-
2
1,370
1,372
4 9
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
Financial liabilities at amortised
cost
Trade payables
Amount due to group undertakings
Accruals
Provisions
Lease liabilities
Financial assets at fair value
through other comprehensive
income
Unlisted investments
Credit risk
Group
2021
£000
432
-
160
100
577
1,269
Group
Company
Company
2020
£000
113
-
304
-
561
978
2021
£000
1
288
39
-
-
328
2020
£000
1
199
14
-
-
214
Group
2021
£000
529
Group
Company
Company
2020
£000
630
2021
£000
2020
£000
-
-
The Group’s credit risk is attributable both to trade receivables and to cash balances held. The
Company’s credit risk is attributable primarily to cash balances held. The Group has implemented
policies to ensure that credit checks are made on potential clients before work is carried out on
their behalf. The amount of exposure to any individual counterparty is subject to limits set by the
directors. Cash balances held are deposited with leading banks.
The carrying amount of financial assets represents the maximum credit exposure. The maximum
credit exposure to credit risk at the reporting date was:
Group
2021
£000
983
2,892
4
3,879
Group
Company
Company
2020
£000
544
3,624
2
4,170
2021
£000
-
1,291
2
1,293
2020
£000
-
1,370
2
1,372
Trade receivables
Cash and cash equivalents
Other receivables
5 0
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
Interest rate risk
The Group and the Company have interest bearing assets, but no interest bearing liabilities. Interest
bearing assets comprise only cash and cash equivalents which earn interest at a variable rate. The
interest earned on the Group’s and the Company’s cash and cash equivalents, denominated in
sterling, derived principally from Money Market deposits of differing fixed time periods, and from
call deposits held with banks which provide short-term liquidity to meet liabilities when they fall
due.
The Group and the Company are exposed to interest rate risk as a result of these positive cash
balances. For the year ended 30 April 2021, if LIBOR had increased by 0.5% with all other variables
held constant, post tax profit and equity for the Group would have been £15,000 (2020: £13,000)
higher, and for the Company £6,000 (2020: £6,000) higher. Conversely, if LIBOR had decreased
by 0.5% with all other variables held constant, post tax profit and equity for the Group would have
been £15,000 (2020: £13,000) lower, and for the Company £6,000 (2020: £6,000) lower.
The Group’s cash and cash equivalents earned interest during the year at an average of 0.07%
(2020: 0.38%), and the Company’s cash and cash equivalents earned interest during the year at an
average of 0.49% (2020: 0.49%).
Liquidity risk
The Group and the Company actively maintain cash and cash equivalents to ensure that there are
sufficient funds available for a period of at least six months to meet liabilities when they fall due.
The following tables shows the contractual maturities of the Group’s and the Company’s financial
and lease liabilities, all of which are measured at amortised cost:
Financial liabilities falling due:
Within 1 month
From 2 to 3 months
Lease liabilities falling due:
Within 6 months
From 6 to 12 months
After 12 months
Group
2021
£000
592
-
592
Group
2020
£000
465
112
-
577
Group
Company
Company
2020
£000
262
224
486
2021
£000
20209
£000
40
-
40
15
-
15
Group
Company
Company
2019
£000
150
149
262
561
2020
£000
2019
£000
-
-
-
-
-
-
-
-
5 1
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
26. Capital risk management
The Group and the Company seek, when managing capital, to safeguard the Group’s and the
Company’s ability to continue as going concerns, in order to provide returns for shareholders and
to maintain an optimal capital structure to reduce the cost of capital.
The Group and the Company define capital as being share capital plus reserves. The Board of
Directors monitors the level of capital employed in order to achieve these objectives.
27. Reconciliation of liabilities arising from financing activities - Group
As at
1 May
2019
Cashflow
Non-cash
movements
As at 30 April
2020
Cashflow
Non-cash
movements
As at
30 April
2021
£000
£000
£000
£000
£000
£000
£000
Current
liabilities
Lease liabilities 299
Non-current
liabilities
Lease liabilities 549
(314)
314
299
-
(287)
262
848
(314)
27
561
-
-
-
278
577
(262)
-
16
577
5 2
N O T I C E O F A N N U A L G E N E R A L M E E T I N G
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting (AGM) of Fletcher King Plc (the
Company) will be held at 61 Conduit Street, London W1S 2GB on 4 November 2021 at
9.00am to consider and, if thought fit, pass the resolutions as set out below.
General Information in light of Coronavirus (COVID-19)
AGM Format:
The Board recognises the importance of the AGM to the Company’s shareholders and would
normally welcome the occasion as an opportunity to meet with you, present to you on the
Company’s strategy and performance, and listen and respond to your questions, in person.
However, as the country continues to recover from the COVID-19 pandemic, in the interests of
maintaining the safety of our shareholders, colleagues and AGM support staff, the Board proposes
that only a limited number of Company representatives will attend the AGM in person to ensure
that a valid meeting is held and we strongly encourage shareholders to carefully consider whether
it is appropriate for them to travel to and attend the AGM in person this year.
To ensure the safety of all our stakeholders, we will follow the latest guidelines on the holding of
public meetings and we may ask attendees to confirm that they (or members of their household,
support bubble or childcare bubble) have not recently developed Covid-19 symptoms or been
exposed to someone who has either tested positive for Covid-19 or is displaying Covid-19
symptoms. We may also put in place other security measures including social distancing measures.
We will continue to monitor developments, including the latest Government measures, and in the
event that our AGM arrangements have to change, the Company will issue a further communication
via a regulatory information service
Voting at the AGM
The Board is keen to ensure that you are still able to exercise your right to vote at the meeting
should you choose not to attend in person. Therefore, if you wish to vote at the AGM, the Board
suggests that you appoint the Chairman of the meeting as your proxy and give your instructions on
how you wish the Chairman to vote on the proposed resolutions. All proposed resolutions will be
put to a vote on a poll. This will result in a more accurate reflection of the views of shareholders
by ensuring that every vote is recognised. On a poll, each shareholder has one vote for every share
held. You may choose to appoint a proxy other than the Chairman of the meeting.
Details of how to appoint a proxy are set out in the Notes to the Notice of AGM. To be valid, your
proxy appointment in the form set out on page 59 must be received by Computershare Investor
Services Plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY by no later than 13.00 on Tuesday
2 November 2021.
Resolutions
Resolutions 1 to 6 (inclusive) are proposed as ordinary resolutions. For each of these to be passed,
more than half of the total voting rights of members who vote must be in favour of the resolution.
5 3
N O T I C E O F A N N U A L G E N E R A L M E E T I N G
Resolutions 7 and 8 are proposed as special resolutions. For each of these to be passed, at least
three-quarters of the total voting rights of members who vote must be in favour of the resolution.
Ordinary Resolutions
1 To receive and adopt the Directors’ Reports and Accounts for the financial year ended 30 April
2021.
2 To re-elect R EG Goode as a Director, who retires by rotation, in accordance with Company
convention as in previous years and in line with best practice, and who offers himself for re-
election.
3 To re-elect RA Dickman as a Director who retires by rotation, in accordance with Company
convention as in previous years and in line with best practice, and who offers himself for re-
election.
Biographical details regarding these Directors are included in the accompanying Report and
Accounts.
4 To re-appoint Nexia Smith & Williamson as auditors to hold office from the completion of the
meeting to the conclusion of the next meeting at which the accounts are laid before the Company,
at a remuneration to be determined by the Directors.
5. THAT, in accordance with paragraph 42(2)(b) of Schedule 2 of the Companies Act 2006
(Commencement No 8, Transitional Provisions and Savings) Order 2008, the restriction on the
authorised share capital of the Company set out in paragraph 6 of the memorandum of association
of the Company, which by virtue of section 28 of the Companies Act 2006 is treated as a provision
of the Company’s articles of association, is hereby revoked and deleted.
6 That the Directors of the Company be and are hereby authorised generally and unconditionally for
the purpose of Section 551 of the Companies Act 2006 (such authority to be in substitution for all
previous authorities granted to the Directors for the purpose of the said Section 551 or Section 80
of the Companies Act 1985) to allot equity securities in the Company up to a maximum number of
2,762,934 of the unissued ordinary shares of 10p each of the Company with an aggregate nominal
value of £276,293.40, provided that this authority shall, unless renewed, varied or revoked by
the Company shall expire at the conclusion of the next Annual General Meeting of the Company
save that the Company may, before such expiry, make an offer or agreement which would or
might require shares to be allotted and the Directors may allot shares in pursuance of such offer or
agreement notwithstanding that the authority conferred by this resolution has expired and at any
time thereafter pursuant to any offer or agreement made by the Company before the expiry of this
authority.
This authority revokes and replaces all unexercised authorities previously granted to the Directors
but without prejudice to any allotment of shares already made or offered or agreed to be made
pursuant to such authorities
5 4
N O T I C E O F A N N U A L G E N E R A L M E E T I N G
Special Resolutions
7. That, subject to the passing of resolution 6, the Directors of the Company be and are hereby
empowered pursuant to Section 570 of the Companies Act 2006 to allot equity securities (as
defined in Section 560 of that Act) pursuant to the authority conferred by the immediately preceding
resolution as if subsection (1) of Section 561 of the said Act did not apply to any such allotment,
provided that this power shall be limited:
(a) to the allotment of equity securities in connection with a rights issue in favour of ordinary
shareholders where the equity securities respectively attributable to the interests of all ordinary
shareholders are proportionate (as nearly as may be) to the respective numbers of ordinary shares
held by them but subject to such other exclusions or arrangements as the Directors may deem
necessary or expedient in relation to fractional entitlements for legal or practical problems under
the laws of any territory or the requirements of any recognised regulatory body or any stock
exchange in any country; and
(b) to the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to
an aggregate nominal value of £184,195.58 (being 20% of the said issued capital of the Company),
and shall expire at the conclusion of the next Annual General Meeting of the Company (unless
renewed, varied or revoked by the Company prior to or on that date), provided that if the Company
before such expiry shall make an offer or agreement which would or might require securities to be
allotted after such expiry, the Directors of the Company may allot equity securities in pursuance of
such offer or agreements as if the power conferred hereby had not expired.
8. That the Company is hereby generally and unconditionally authorised to make one or more
market purchases (within the meaning of Section 693(4) of the Companies Act 2006) of ordinary
shares of 10p each in the capital of the Company (‘ordinary shares’) provided that:
(a) the maximum aggregate number of ordinary shares hereby authorised to be purchased is
460,000;
(b) the maximum price which may be paid for an ordinary share is 5% above the average of the
middle market quotations for shares of the same class as derived from The London Stock Exchange
Daily Official List for the ten dealing days immediately prior to the date of the purchase of such
shares and the minimum price that may be paid for an ordinary share is the nominal value of 10p
per share;
(c) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of
the Company to be held in 2021 or eighteen months from the passing of this resolution, if earlier,
unless such authority is renewed, varied or revoked by the Company prior to such time; and
(d) the Company may enter into a contract to purchase ordinary shares under the authority hereby
conferred prior to the expiry of such authority which will or may be executed wholly or partly after
the expiry of such authority and may make such purchases of ordinary shares in pursuance of any
such contract or contracts.
5 5
N O T I C E O F A N N U A L G E N E R A L M E E T I N G
By order of the Board
P E Bailey
Secretary
Fletcher King Plc
30 September 2021
Registered Office:
61 Conduit Street
London W1S 2GB
Registered Number:
02014432
Notes
(a) As the country continues to recover from the COVID-19 pandemic, the Board strongly encourages
shareholders to carefully consider whether it is appropriate for them to travel to and attend the AGM in
person this year. Every eligible shareholder has the right to appoint one or more proxies to exercise all
or any of his or her rights on his or her behalf at the meeting, provided that if more than one proxy is
appointed each proxy is appointed to exercise the rights attaching to a different share or shares held by the
appointing shareholder. The appointment of a proxy in relation to this year’s AGM will, however, be subject
to any alternative arrangements that the Board considers necessary to ensure the validity of the meeting.
(b)
Shareholders who wish to vote at the meeting are encouraged to appoint the Chairman of the meeting
as their proxy in order to do so in order to reduce the number of people attending the meeting in
person. You may attend in person or choose to appoint a proxy other than the Chairman of the meeting
(c) A member of the Company can only appoint a proxy using the procedures set out in these notes and the notes
to the proxy form. A proxy need not be a member of the Company. To be valid the form of proxy must be
completed, signed and deposited at the office of the Company’s registrars, Computershare Investor Services
Plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, together with a certified copy of any power of
attorney or other authority under which it is executed, not less than 48 hours before the time appointed for the
meeting. The form assumes that a shareholder will wish to vote on all of his or her Shares in the same way.
(d) To change your proxy instructions simply submit a new proxy appointment using the method set out above.
Note that the cut-off time for receipt of proxy appointments (as above) also applies in relation to amended
instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
Where you require another hard-copy proxy form in order to change the instructions, please contact the
Company Secretary at 61 Conduit Street, London, W1S 2GB. If you submit more than one valid proxy
appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
(e) In order to revoke a proxy instruction, you will need to inform the Company by sending a hard copy
notice clearly stating your intention to revoke your proxy appointment to the office of the Company’s
registrars, Computershare Investor Services Plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY.
The revocation notice must be received by the Company no less than 48 hours before the time appointed
for the meeting. In the case of a member which is a company, the revocation notice must be executed
under its common seal or signed on its behalf by an officer of the company or an attorney for the
company. Any power of attorney or any other authority under which the revocation notice is signed
(or a duly certified copy of such power or authority) must be included with the revocation notice.
(f)
In the case of joint holders, where more than one of the joint holders purports to appoint a
proxy, only the appointments submitted by the most senior holder will be accepted. Seniority
5 6
N O T I C E O F A N N U A L G E N E R A L M E E T I N G
is determined by the order in which the names of the joint holders appear in the Company’s
Register of Members in respect of the joint holding (the first-named being the most senior).
(g) In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, only those members
entered on the Company’s register of members at 6.00pm on 2 November 2021 or, if the meeting is
adjourned, shareholders entered on the Company’s register of members at 6.00pm on the day which is
two days before the day of the adjourned meeting, shall be entitled to attend and vote at the meeting.
(h) As at 6.00pm on 29 September 2021 (the latest practicable date before publication of this notice), the
Company’s issued share capital comprised 9,209,779 ordinary shares of 10p each. Each ordinary share
carries the right to one vote at a general meeting of the Company and, therefore, the total number of
voting rights in the Company as at 29 September 2021 is 9,209,779.
(i) Any corporation which is a shareholder can appoint one or more persons to act as its representative(s)
at the meeting. Each such representative may exercise on the corporation’s behalf all of its powers as a
shareholder provided that they do not do so in relation to the same Shares. Please note that a person other
than the Chairman of the meeting who is appointed as a representative will not be permitted to attend the
meeting in person.
(j) Except as provided above, members who have general queries about the meeting should contact the
Company Secretary. A member may not use any electronic address provided in this notice or in any
related documents (including the proxy form) to communicate with the Company for any purposes other
than those expressly stated.
(k) Information regarding the meeting, including the information required by section 311A of the Companies
Act 2006, can be found at www.fletcherking.co.uk/investor-relations/.
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5 8
F O R M O F P R O X Y
FORM OF PROXY
For use at the Annual General Meeting of the Fletcher King Plc to be held at 9.00 am on 4 November 2021
I/We (Block capitals please) ..................................................................................................................................................................
of ............................................................................................................................................................................................................
................................................................................................................................................................................................................
being (a) member(s) of the Company, hereby appoint the Chairman of the Meeting or (see Note 5)
................................................................................................................................................................................................................
as my/our proxy to attend and vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 4
November 2021 at 9.00 am and at any adjournment of the meeting.
I/We direct my/our proxy to vote on the Resolutions set out in the notice convening the Annual General Meeting as follows:
For
Against
Vote
Withheld
To Adopt Ordinary Resolution 1
To Adopt Ordinary Resolution 2
To Adopt Ordinary Resolution 3
To Adopt Ordinary Resolution 4
To Adopt Ordinary Resolution 5
To Adopt Ordinary Resolution 6
To Adopt Special Resolution 7
To Adopt Special Resolution 8
If no indication is given, my/our proxy will vote or abstain from voting at his or her discretion and I/we authorise my/our proxy to
vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting.
Signature ................................................................................................................................. Date .............................................................
Notes
1.
2.
3.
Please indicate with an ‘X” in the spaces provided how you wish your votes to be cast. If you do not indicate how your votes
are to be cast the proxy will vote as he thinks fit or abstain. The ‘‘Vote Withheld’’ option is provided to enable you to instruct
your proxy not to vote on any particular resolution. Please note that a ‘‘Vote Withheld’’ has no legal effect and will not be
counted in the calculation of the votes ‘‘For’’ or ‘‘Against’’ a resolution. Your proxy will vote (or abstain from voting) as he
or she thinks fit in relation to any other matter which is put before the Meeting..
In the case of a corporation, this form of proxy must be executed under the common seal or under the hand of an officer or duly
authorised attorney. In the case of joint holders, the vote of the senior who tenders a vote whether in person or by proxy shall
be accepted to the exclusion of the votes of the other registered holders and for this purpose seniority shall be determined by
the order in which the names stand in the register of members.To be effective this form of proxy, and the power of attorney
or other authority (if any) under which it is signed or a notarially certified or office copy of such power or authority, must be
deposited at the office of the Company’s registrars at
To be effective this form of proxy, and the power of attorney or other authority (if any) under which it is signed or a
notarially certified or office copy of such power or authority, must be deposited at the office of the Company’s registrars at
Computershare Investor Services Plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, not less than 48 hours before the
time of the meeting.If you choose now to appoint a proxy other than the Chairman of the meeting, but the social distancing
measures or other restrictions on attendance in person continue to be in force, your appointment will be deemed to be an
appointment of the Chairman of the meeting.
4. Any alterations made to this form of proxy should be initialled.
5.
6.
If you choose now to appoint a proxy other than the Chairman of the meeting, but the social distancing measures or other
restrictions on attendance in person continue to be in force, your appointment will be deemed to be an appointment of the
Chairman of the meeting.
If you choose to appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares.
However, as above if you choose now to appoint a proxy other than the Chairman of the meeting, but the social distancing
measures or other restrictions on attendance in person continue to be in force, your appointment in relation to those shares
will in any case be deemed to be an appointment of the Chairman of the meeting. To appoint more than one proxy, please
contact the Company registrars for more information at the address provided in note 3 sufficiently in advance of the meeting
so that the requirements of note 3 may be complied with.
5 9
Third fold and tuck in
BUSINESS REPLY SERVICE
License No. SWB 1002
11
Computershare Investor Services Plc
The Pavilions
Bridgwater Road
Bristol
BS99 6ZY
Second fold