LONDON (ShareCast) - (Sharecast News) - Fletcher King updated the market on its trading on Thursday, reporting that the "huge" uncertainty and market dislocation caused by the Covid-19 pandemic was likely to have a material adverse impact on transaction-based fees such as investment deals, bank valuations and agreement of rating appeals.
The AIM-traded firm had said on 14 April that performance for the year ended 30 April was not materially affected by the coronavirus outbreak, and was in line with management expectations.

Trading during the first quarter, however, had confirmed its new outlook, with transaction-based fees "materially lower" than would otherwise be expected.

In particular, the company said investor clients and counterparties had adopted a "wait-and-see" approach, resulting in delayed progress of potential transactions.

"Non transaction-based fee income associated with fund and property management has been relatively unaffected," the board said in its statement.

"On behalf of retained clients, who pay contracted quarterly fees, the property management team has been successful in collecting 80% of rents for the June quarter within seven days of the due date, a good result in the circumstances."

The firm said it was also impacted by a "severe contraction" in the professional indemnity insurance market, particularly with property valuation work.

It said the renewal premium had more than doubled, increasing by just over £0.2m for the financial year.

"Whilst there is potential for recovery of fee income later in the financial year, it is very likely that the company will make a loss in the first half of its financial year," the board said.

"The company remains well supported by a strong balance sheet with no debt."

Fletcher King said its audited results for the year ended 30 April were expected to be announced around 11 September.

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