Last checked at 12 Nov 2014 07:00
SAMUEL HEATH & SONS plc
("the Company")
INTERIM REPORT
Half year ended 30 September 2014
CHAIRMAN'S STATEMENT
As I warned at the time of my annual statement, incoming orders were well down on the same period last year. This continued throughout the entire six months period which we are now reporting. Sales were in fact £5,398,000 (2013: £5,526,000). Since all our budgets were based on expected growth, this had the effect of reducing our profit before tax to £96,000 (2013: £326,000).
The reasons for the downturn are a rather unusual and unwelcome mixture of the UK market not recovering at the rate we hoped, some markets suffering sharp economic downturns and others almost cancelled altogether for geopolitical reasons.
As I also warned in my annual statement, the strong pound had a very significant impact on our profitability.
When it comes to forecasting the second half of the year, it would be reckless to be too optimistic. However the pound has devalued and the order book has shown signs of improvement in the short period since the half year end.
We continue to have a strong balance sheet and we propose a same again interim dividend of 5.5p per share (2013: 5.5p per share) payable on 23rd March 2015. However, the board will obviously be looking at the final dividend in the light of the full year's trading.
Sam Heath
Chairman
12th November 2014
For further information, please contact:
Samuel Heath & Sons Plc | |
John Park, Company Secretary
| 0121 772 2303 |
Zeus Capital Limited | |
Ross Andrews/Jamie Peel | 0161 831 1512 |
Unaudited Interim Financial Report
For the Half Year ended 30 September 2014
CONSOLIDATED INCOME STATEMENT | |||
Half year ended 30 September 2014 | Half year ended 30 September 2013 |
Year ended 31 March 2014 | |
Unaudited | Unaudited | Audited | |
Continuing operations | £'000
| £'000
| £'000
|
Revenue
| 5,398 | 5,526
| 10,979
|
Cost of sales | (2,873) | (2,859) | (5,647) |
Gross profit | 2,525 | 2,667 | 5,332
|
Distribution costs | (1,521) | (1,523) | (2,958) |
Administrative expenses | (830) | (818) | (1,676) |
Operating profit | 174 | 326 | 698
|
Gain on sale of financial assets | - | 58 | 58 |
Finance costs | (78) | (58) | (146) |
Profit before taxation
| 96 | 326
| 610
|
Taxation | (19) | (64) | (167) |
Profit for the period | 77 | 262 | 443 |
Basic and diluted earnings per ordinary share | 3.0p | 10.3p | 17.5p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
Half year ended 30 September 2014 | Half year ended 30 September 2013 |
Year ended 31 March 2014 | |
Unaudited | Unaudited | Audited | |
£'000
| £'000
| £'000
| |
Profit for the period | 77 | 262 | 443 |
Items that will be reclassified to profit or loss: | |||
Loss on available for sale financial assets | - | (115) | (115) |
Cash flow hedges | 39 | 37 | 1 |
39 | (78) | (114) | |
Items that will not be reclassified to profit or loss: | |||
Actuarial (loss)/gain on defined benefit pension scheme | (833) | 681 | 294 |
Deferred tax on actuarial gain(loss) | 167 | (262) | (187) |
(666) | 419 | 107 | |
| |||
Total comprehensive income for the period | (550) | 603 | 436 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||
At 30 September 2014 | At 30 September 2013 | At 31 March 2014 | |
Unaudited | Unaudited | Audited | |
£'000 | £'000 | £'000
| |
Non current assets | |||
Intangible assets | 303 | 358 | 326 |
Property, plant and equipment | 1,620 | 1,820 | 1,668 |
Deferred tax asset | 941 | 725 | 774 |
2,864 | 2,903 | 2,768 | |
Current assets | |||
Inventories | 3,034 | 2,724 | 2,899 |
Trade and other receivables | 1,723 | 1,728 | 1,819 |
Derivative financial instruments | 37 | 35 | - |
Cash and cash equivalents | 1,785 | 1,853 | 2,026 |
6,579 | 6,340 | 6,744 | |
Total assets | 9,443 | 9,243 | 9,512 |
Current liabilities | |||
Trade and other payables | (949) | (898) | (1,164) |
Derivative financial instruments | - | - | (2) |
Current tax payable | (135) | (90) | (116) |
(1,084) | (988) | (1,282) | |
Non current liabilities | |||
Retirement benefit scheme | (4,707) | (3,624) | (3,870) |
Deferred tax liability | (110) | (74) | (110) |
(4,817) | (3,698) | (3,980) | |
Total liabilities | (5,901) | (4,686) | (5,262) |
Net assets | 3,542 | 4,557 | 4,250 |
Capital and reserves | |||
Called up share capital | 254 | 254 | 254 |
Capital redemption reserve | 109 | 109 | 109 |
Retained earnings | 3,179 | 4,194 | 3,887 |
Equity shareholders' funds | 3,542 | 4,557 | 4,250 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | ||||
Share capital | Capital redemption reserve | Retained earnings | Total equity | |
£000 | £000 | £000 | £000 | |
Balance at 31 March 2013 | 254 | 109 | 3,749 | 4,112 |
Equity dividends paid | - | - | (158) | (158) |
Profit for period | - | - | 262 | 262 |
Other comprehensive income for the period | - | - | 341 | 341 |
Balance at 30 September 2013 | 254 | 109 | 4,194 | 4,557 |
Equity dividends paid | - | - | (140) | (140) |
Profit for period | - | - | 181 | 181 |
Other comprehensive income for the period | - | - | (348) | (348) |
Balance at 31 March 2014 | 254 | 109 | 3,887 | 4,250 |
Equity dividends paid | - | - | (158) | (158) |
Profit for period | - | - | 77 | 77 |
Other comprehensive income for the period | - | - | (627) | (627) |
Balance at 30 September 2014 | 254 | 109 | 3,179 | 3,542 |
CONSOLIDATED CASH FLOW STATEMENT | |||
Half year Ended 30 September 2014 | Half year Ended 30 September 2013 |
Year ended 31 March 2014 | |
Unaudited | Unaudited | Audited | |
£'000
| £'000
| £'000
| |
Cash flow from operating activities | |||
Profit for the period before tax | 96 | 326 | 610 |
Adjustments for: | |||
Depreciation | 178 | 187 | 375 |
Amortisation | 31 | 18 | 50 |
Profit on disposal of property, plant and equipment | (8) | (6) | (13) |
Profit on disposal of available for sale financial assets | - | (58) | (58) |
Finance income | (5) | (32) | (37) |
Finance costs | - | - | 1 |
Increase/(decrease) in post-employment benefit obligations | 5 | 17 | (126) |
Operating cash flow before movements in working capital | 297 | 452 | 802 |
Changes in working capital: | |||
(Increase)/decrease in inventories | (135) | 7 | (168) |
Decrease/(increase) in trade and other receivables | 96 | 106 | 75 |
(Decrease)/increase in trade and other payables | (215) | 23 | 214 |
Cash generated from operations | 43 | 588 | 923 |
Taxation paid | - | - | (15) |
Net cash from operating activities | 43 | 588 | 908 |
Cash flow from investing activities | |||
Payments to acquire property, plant and equipment | (173) | (182) | (221) |
Proceeds from the sale of property, plant and equipment | 50 | 18 | 29 |
Payments to acquire intangible assets | (8) | (5) | (6) |
Payments to acquire available for sale financial assets | - | (57) | (57) |
Proceeds from the sale of available for sale financial assets | - | 1,398 | 1,400 |
Finance income | 5 | 32 | 53 |
(126) | 1,204 | 1,198 | |
Cash flow from financing activities | |||
Interest paid | - | - | (1) |
Dividends paid | (158) | (158) | (298) |
Net cash outflow from financing | (158) | (158) | (299) |
Net (decrease)/increase in cash and cash equivalents | (241) | 1,634 | 1,807 |
Cash and cash equivalents at beginning of period | 2,026 | 219 | 219 |
Cash and cash equivalents at end of period | 1,785 | 1,853 | 2,026 |
1 | BASIS OF PREPARATION OF INTERIM REPORT |
As permitted, IAS34 'Interim Financial Reporting' has not been applied in this interim report. The information for the period ended 30 September 2014 is not audited and does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2014 were given an unqualified audit report and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The interim accounts for the half year ended 30 September 2013 were also unaudited.
| |
2 | ACCOUNTING POLICIES |
Basis of accounting | |
The report has been prepared on a going concern basis in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") at 30 September 2014 as well as all interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") at 30 September 2014.
The group has not availed itself of early adoption options in such standards and interpretations.
The financial statements have been prepared under the historical cost basis. The principal accounting policies adopted are as set out in the Annual Report for the year ended 31 March 2014. The valuation of inventories is considered to be the main area in terms of significant accounting estimates and judgements.
The retirement benefit scheme liability recognised in these interim accounts reflects the estimated change in the deficit at 30 September 2014 from the movements in discount rates and inflation during the six months. | |
3 | DIVIDENDS |
An interim dividend of 5.5 pence per share is proposed (30 September 2013: 5.5 pence per share) and will be payable on 23rd March 2015 with a record date of 27th February 2015.
| |
4 | EARNINGS PER SHARE |
The basic and diluted earnings per share are calculated by dividing the relevant profit after taxation of £77,000 (30 September 2013: £262,000) by the average number of ordinary shares in issue during the period being 2,534,322 (2013: 2,534,322). The number of shares used in the calculation is the same for both basic and diluted earnings. |