Marechale Capital : Posting of Annual Report – 22 August 2023

22 August 2023

Marechale Capital plc

("Marechale" or the "Company")

Financial Statements for the Year Ended 30 April 2023

Marechale Capital Plc (AIM: MAC), an established City of London based corporate finance house with a long-term track record and a strong reputation for advising and financing high growth consumer brands, leisure, clean energy, mineral extraction and technology companies, is pleased to announce its audited final results for the year ended 30 April 2023 (the "Period").

Chairman's Statement

Marechale Capital plc (AIM: MAC), an established City of London based corporate finance house with a long-term track record and a strong reputation for advising and financing high growth consumer brands, leisure, clean energy and technology companies in the UK and Europe, is pleased to announce its audited final results for the year ended 30 April 2023 (the "Period"). Marechale also uses its balance sheet to co-invest in its client companies, along with warrants and founder equity, in order to create shareholder value.

As reported in the interim results statement announced in December 2022, it has been a challenging year generally, particularly in the hospitality sector, as a number of businesses navigated a continuing period of market uncertainty, with increased overheads caused largely by inflation driven wage rises, compounded by general staff shortages, and high energy costs, particularly over the winter period. Furthermore, customer discretionary spending is also being squeezed. However, against this challenging backdrop, there are significant market opportunities for Marechale's clients.

The Company entered the Period with good levels of business activity and funded clients in both the hospitality sector, as well as clients in other high growth sectors. Completed projects last year included raising further equity funding for the European telecommunications technology company, Fast2Fibre, and additional funding for Weardale Lithium, Chestnut Group - the leading East Anglian Inn Group, and Forest Road Brewing Company, the award-winning London craft brewer.

Marechale continues to generate professional services income by providing advice to its clients. In the last year this included strategic and funding advice for Chestnut Group and Burgh Island. All of the fundraisings were at premiums to Marechale's equity and warrant holdings investment value.

In the clean energy space, general market uncertainty has impacted some of our corporate clients whose progress has been delayed and resulted in some investee and advisory company exits being postponed. However, we are pleased to report the exit of our investment in Future Biogas, the leading UK farm crop anaerobic digestion biogas business, after its acquisition by 3i. We also report that Burgh Island, both an investee and advisory client, is for sale

Significant progress continues to be made with the lithium extraction business, Weardale Lithium Ltd ("Weardale"), and our pipeline of new and increasingly diversified projects remains robust.

Weardale is Marechale's largest investment, holding 500,000 founder shares and 22,400 options with a combined value of £2.8 million based on the last funding round in July 2022, which has been recorded in the balance sheet. Weardale has secured mineral extraction rights in Co. Durham via existing boreholes where there is proven lithium in the brine hundreds of feet below the surface. Marechale remains optimistic for a positive future outcome on this investment.

Investments and warrants in client companies generated losses of £52,000 (2022: gain of £2,716,000). It is worth noting that we have £770,000 of unused capital tax losses to offset against any possible future tax liability on realisation of gains.

During the last year, Marechale generated revenue of £376,000 (2022: £622,000), and, although our gross profit margin decreased from 53% to 32%, due to high 3rd party commissions associated with one particular client, administrative expenses remained steady at £488,000 (2022: £483,000).

In summary, we announce a net loss for the year of £426,000 (2022: profit of £2,562,000): however, as noted above, 2022's profits included £2,716,000 unrealised investment gains. During the same period, Marechale's balance sheet value has only marginally decreased to £3,227,000 (2022: £3,630,000) representing Net Asset Value/Share of 3.4p (2022: 3.8p).

The Company's focus is to use its reputation and deal flow as a corporate finance adviser to build shareholder value in Marechale's balance sheet. This has been achieved by negotiating equity and warrant positions, and joint venture arrangements as part of its terms of engagement with growth company clients. Marechale's historical investment performance for its investor relationships has been excellent in this regard, having achieved double digit internal rates of return across all the companies that it has funded since 2010. We are confident that our investments in Weardale Lithium, Burgh Island, Chestnut Group, Fast2Fibre, and Forest Road Brewery, amongst others, will deliver uplifts in value in due course. The Company has continued with its strategy of utilising its balance sheet to take enhanced positions in its client companies.

One of the most recent strategic events is to welcome Chris Kenning as a with his strategic investment of 9.9% of the Company in June 2023. As announced at the time, the plan is to digitise Marechale's activities and continue to develop strategic partnerships with the objective of enhancing shareholder value.

Whilst the current economic climate remains challenging, the Board considers that the Company has sufficient cash reserves for its current requirements and remains positive about the investments that it holds in its client companies, and is optimistic that the Company will continue to generate further uplifts on its current and future equity and warrant investments, both in the short and longer term as the Board and Management Team continue to use Marechale's proven track record as a corporate finance adviser in the £5-50 million Enterprise Value PE sector for new projects and partnerships.

Mark Warde-Norbury

Chairman

21 August 2023

This announcement contains inside information for the purposes of the UK Market Abuse Regulation.

For further information please contact:
Marechale Capital plc	Tel: [phone]
Mark Warde-Norbury / Patrick Booth-Clibborn
Cairn Financial Advisers LLP (Nomad and Broker)	Tel: [phone]
Jo Turner / Sandy Jamieson

Statement of Comprehensive Income

For year ended 30 April 2023

		Year ended	Year ended
		30-Apr	30-Apr
		2023	2022
		(£)	(£)
Continuing operations
Revenue		375,726	621,573
Cost of sales		(260,581)	(291,632)
Gross profit		115,145	329,941
Administrative expenses		(487,626)	(483,499)
Operating loss		(372,481)	(153,558)
Finance expense		(912)	(876)
Other (losses)/ gains		(52,124)	2,716,237
(Loss)/profit before tax		(425,516)	2,561,803
Taxation		-	-
(Loss)/ profit for the year on continuing operations	(425,516)	2,561,803
Earnings per share		(Pence)	(Pence)
Basic	- Continuing operations	(0.45)	2.95
	- Diluted	(0.40)	2.70
Statement of Comprehensive Income
(Loss)/ profit for the year on continuing operations	(425,516)	2,561,803
Total recognised comprehensive profit
(all attributable to owners of the company)	(425,516)	2,561,803

Statement of Financial Position

As at 30 April 2023

Year ended	Year ended
30-Apr	30-Apr
2023	2022
(£)	(£)

Current assets
Investment in subsidiary	2	2
Equity investments at fair value through profit and loss	2,862,653	3,125,189
Warrants at fair value through profit and loss	130,076	146,589
Trade and other receivables	75,933	43,778
Cash and cash equivalents	282,795	413,970
Total current assets	3,351,459	3,729,528
Total assets	3,351,459	3,729,528
Current liabilities
Trade and other payables	(91,558)	(57,368)
Borrowings	(10,000)	(10,000)
Total current liabilities	(101,558)	(67,368)
Net current assets	3,249,902	3,662,160
Long-term liabilities
Borrowings	(22,500)	(32,500)
Net assets	3,227,402	3,629,660
Equity
Capital and reserves attributable to equity shareholders
Share capital	763,690	763,023
Share premium	329,330	328,413
Reserve for own shares	(50,254)	(50,254)
Reserve for share based payments	83,988	62,313
Retained profits/(losses)	2,100,648	2,526,165
		3,227,402	3,629,660

Statement of Changes in Equity

For year ended 30 April 2023

					Reserve
				Reserve	for share
		Share	Share	for own	based	Retained
		capital	premium	shares	payments	earnings
Company
Balance at 30 April 2021	643,690	85,247	(50,254)	42,709	(35,638)
Total comprehensive income
Profit for the financial year	-	-	-	19,604	2,561,803
Issued in year*		119,333	243,166	-	-	-

Total comprehensive income

Balance at 30 April 2022

Total comprehensive income (Loss) for the financial year Issued in year*

Total comprehensive income

Balance at 30 April 2023

119,333	243,166	-	19,604	2,561,803
763,023	328,413	(50,254)	62,313	2,526,165
-	-	-	21,675	(425,517)
667	917	-	-	-
667	917	-	21,675	(425,517)
763,690	329,330	(50,254)	83,988	2,100,648

• Issue of ordinary shares in the year (net of expenses)

Statement of Changes of Cash Flows

For year ended 30 April 2023

		Year	Year
		ended	ended
		30-Apr	30-Apr
		2023	2022
		(£)	(£)
Net cash from operating activities
(Loss)/profit before tax	(425,516)	2,561,803
Reverse provision for share based payments	21,676	19,603
Reverse losses/ (gains) on fair value investment through profit and		(2,716,237
loss	16,513	)
Reverse losses on disposal of investments	18,075	0
Reverse net interest expense	912	876
Operating cash outflows before movements in working
capital	(368,341)	(133,955)
Movement in working capital
(Increase)/decrease in receivables	(32,157)	6,822
Increase/(decrease) in payables	34,190	(3,845)
Tax paid	-	-
		2,033	2,977
Cash outflow from operating
activities	(366,308)	(130,978)
Investment activities
Interest received	0	(1)
Expenditure on equity investments	0	(42,462)
Proceeds from sale of equity investments through profit and loss	226,925	0
Cash inflow/(outflow) from investing activities		226,925	(42,463)