Half-year Results

Financial Highlights

Operational Highlights

• Earnings before tax improved slightly on the comparative period last year.
• The moribund commercial property market has continued to weigh on transactional fee income but new property management instructions have supported growth in recurring fee income.
• Anthony Ferguson joined on 1 November 2023 to launch a new Planning specialism unit within the business. This will provide complementary property services to existing and new clients for which there is a good pipeline of work.

Commenting on the results David Fletcher, Chairman of Fletcher King said:

"Against a backdrop of extremely challenging property market conditions, it is pleasing to report profitable performance for the period, with overall results being slightly ahead of last year. Capital markets are likely to remain subdued for a while yet, but with some good instructions in the pipeline and a focus on improving non-transactional revenues, there are grounds for optimism that this will translate into business growth and development in due course."

Turnover for the period was £1,326,000 (2022: £1,338,000) with a profit before tax of £50,000 (2022: £32,000).

Dividend

In view of the continued uncertainty and the low level of profit, the Board is not declaring an interim dividend (2022: no interim dividend).

The Commercial Property Market

Very little has changed overall in the market since my year end statement in August 2023 and the drift in values has continued over the second half of 2023 as high interest rates and continuing economic and political uncertainties have taken their toll on the commercial property market. Capital values across the market have declined by a further 3% over the last six months, with offices declining by nearly 10% over the same period. Over 12 months to the end of October, values have fallen by nearly 13% and the net initial yield on all property is currently 5.5%.

Investors are currently adopting a 'wait and see' attitude although there is some evidence that the market could be near the bottom and that 2024 could see a bounce in the markets. There will undoubtedly be some interesting opportunities over the next year for the brave investor.

On the occupational side there is some activity in the three major sectors, particularly in the industrial sector albeit at a much reduced level compared to pre Covid, and rents are generally static.

Offices continue to suffer and rents are coming under increasing pressure as hybrid working is proving to be more enduring and becoming the norm. However, in specific sub-sectors where there is a scarcity of grade A space such as central London and major regional cities, demand is still strong and there is some rental growth.

Retail space continues to come under severe pressure and rents continue their decline.

The Board is hopeful that 2024 will herald the beginning of the upturn although the political uncertainties may prolong inactivity.

Business Overview

I am pleased that, despite this very difficult market, we are again reporting a profit.

We have had strong performance in Property Asset and Fund Management and have secured new instructions. There has also been activity in our existing portfolios.

The performance of the valuation team has been encouraging and we are expanding the team as new clients have been added during the year.

A number of sizeable Rating appeals are ongoing but overall there are still huge challenges securing the attention of the Valuation Office Agency (VOA) to negotiate settlements. Potentially the situation could deteriorate in 2024 when the VOA will be commencing preparation of the 2026 Rating List which will inevitably diminish resources allocated to clearing outstanding appeals.

Investment transaction activity has been disappointing as a result of the poor investment market conditions mentioned above.

Outlook

Yet again it continues to be impossible to accurately predict the future of the property market and the timing of its recovery. With a focus on improving non-transactional fee income, our activities are healthy and growing and we look forward to a reinvigorated capital market.

We are pleased to announce an expansion of the business with the appointment of Anthony Ferguson (Member of Royal Town Planning Institute) to head up our newly created Planning specialism. We have been working with Anthony for a number of years and we are delighted to have him joining us. There is a significant pipeline of planning work to be done.

Our balance sheet continues to remain strong, as does the relationships we have with our long standing clients.

As always our team have worked hard in these difficult conditions and we thank them for their efforts.

DAVID FLETCHER

CHAIRMAN

Fletcher King Plc

Consolidated Interim Statement of Profit or Loss and Comprehensive Income

for the 6 months ended 31 October 2023

Fletcher King Plc

Explanatory Notes

General information

The Company is a public limited company incorporated and domiciled in England and Wales. The address of its registered office is 19-20 Great Pulteney Street, London W1F 9NF.

These interim financial statements were approved by the Board of Directors on 20 December 2023.

Basis of preparation

The interim financial information in this report has been prepared using accounting policies consistent with IFRS as endorsed by the UK. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the International Financial Reporting Standards Interpretations Committee (IFRIC) and there is an ongoing process of review and endorsement by the UK Endorsement Board. The financial information has been prepared on the basis of IFRS that the Directors expect to apply for the year ended 30 April 2024.

The accounting policies applied by the Group in this interim report are the same as those applied by the Group in the consolidated financial statements for the year ended 30 April 2023. There are no new standards, interpretations and amendments, effective for the first time from 1 May 2023, that have had a material effect on the financial statements of the Group.

Non Statutory Accounts

The financial information for the periods ended 31 October 2023 and 31 October 2022 and the year ended 30 April 2023 set out in this interim report does not constitute the Group's statutory accounts for that period. Whilst the financial figures included in this interim report have been computed in accordance with IFRS, this interim report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS34. The statutory accounts for the year ended 30 April 2023 have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified, did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

The financial information for the 6 months ended 31 October 2023 and 31 October 2022 is unaudited.

Fletcher King Plc

Explanatory Notes

Earnings per share