Chairman’s statement
I am pleased to present the interim results for Energiser Investments plc (“Energiser”, “the Group” or “the Company”) for the half year ended 30 June 2019.
Energiser Investments plc is an investment company whose strategy is to invest in quoted and unquoted companies to achieve capital growth. The Company continues to look for opportunities and is currently invested in an AIM listed company, KCR Residential REIT plc (“KCR”). In March 2018, Energiser acquired 2,435,710 new KCR ordinary shares at 70p a share for a total of £1,704,997. As at 30 June 2019, the share price of KCR had dropped to 49p per share resulting in the Company’s investment to be written down to £1,193,000.
KCR is an AIM quoted Real Estate Investment Trust (“REIT”) focused on investment in the UK residential Private Rented Sector (“PRS”). KCR invests in whole apartment blocks of studio, one and two-bedroom flats in city centres, close to railway stations and shopping facilities. It focuses on more affordable rental properties for private tenants.
KCR’s portfolio of properties was valued at £24.6m at 31 December 2018 an increase of £15.1m compared to 31 December 2017. Its net asset value per share at 31 December 2018 was 70.97p (30 June 2018: 88.17p). KCR’s board remains positive in its strategy of investing in low to mid-price blocks of apartments for rental. It has found the reluctance of equity investors to fund companies through the stock market challenging for its own growth plans as it relies on raising equity and debt capital to grow its portfolio and rental income.
On 12 July 2019 KCR announced some important developments to raise working capital, to provide a pipeline of new acquisitions and to extend its reach into international markets. The proposals, which were passed at a general meeting of KCR, are expected to provide it with access to capital, international development expertise and refinancing options. This is expected to accelerate KCR’s objective of providing capital growth and dividend streams to investors. It will also enable KCR to extend its reach beyond the UK into new residential markets, including Australia, New Zealand and Germany.
Results
The Group had no revenues during the period (2018: Nil) as it had sold its revenue generating investments. The Group made a loss before tax of £172,000 (2018: profit £298,000) which included a provision against the investment in KCR of £122,000. Administrative expenses decreased from £63,000 to £50,000.
The Group’s net assets decreased to £1.10m (2018: £2.07m) translating into net asset value per share of 0.89p per share (2018:1.67p).
Outlook
We will continue to manage our investment in KCR and will also look for other investment opportunities to achieve capital growth. energiser
