24th Aug 2020 11:59
(Alliance News) - Marechale Capital PLC on Monday said it narrowly missed its target of becoming profitable for the 2020 financial year due to Covid-19 disruptions during the last quarter.
The corporate finance firm focusing on the hospitality and renewable sectors narrowed its pretax loss for the year that ended April 30 to GBP37,530 from GBP298,017 a year prior.
Revenue declined 6.8% to GBP476,743 from GBP511,691 a year before, but administrative expenses were cut by 35% to GBP447,063 from GBP688,171.
Marechale Capital said traditionally it earns a large proportion of its annual revenue in the last quarter through tax-driven growth investments, but this was affected by Covid-19 over March and April. This in turn caused the company to miss its target of becoming profitable.
The company did deliver a slightly higher gross profit of GBP422,000 due to lower third-party commissions, up from GBP400,000 year on year.
Chair Mark Warde-Norbury said: "Finally, it will come as no surprise that current trading is very challenging as there is concern and lack of confidence in the hospitality sector, nonetheless the directors are confident that markets will recover. While there is increasing optimism that the worst of Covid-19 is over, there is significant uncertainty as to the timing and extent of any recovery."
Marechale Capital said that although it doesn't benefit from "reliable, repetitive income", instead relying on deal-driven transactions, it is confident it will generate enough income on an annual basis in order to continue operations.
The company mentioned it has "alternative strategies" in place, such as informal arrangements with creditors and the ability to sell both equity investments or warrants, should the need arise.
Marechale Capital shares were down 9.9% at 1.60 pence each on Monday morning in London.
By Greg Roxburgh; [email protected]
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