Last checked at 30 Nov 2011 07:00
29 November 2011 PHSC PLC ("PHSC", "the Company" or "Group") Interim Report 2011
GROUP CHIEF EXECUTIVE OFFICER'S STATEMENT
for the six months ended 30 September 2011
Financial Highlights
* Group turnover (consolidated) for the period was £2.135m compared with £ 2.387m for the same period last year. * EBITDA of £114k, compared with £106k for the same period last year. * Basic earnings per share at the interim stage are 0.64p compared with 0.61p achieved in the corresponding period last year. * Net cash generated by operating activities was £242k (£120k generated in the same period last year). * Overall cash and cash equivalents stood at £805k at the end of the period compared with £749k at the year ended 31 March 2011. Cash has increased despite £207k paid out in dividends. * Net asset value (unaudited) of £5.133m or 49p pence per Ordinary Share compared to a current share price (mid) of 16p pence
Trading overview
The Group continues to trade profitably but does so against a backdrop of a difficult marketplace where there appear to be fewer opportunities for additional work and reductions in margins for new work that is won.
Each subsidiary has seen a reduction in revenues but has been able to marginally improve the bottom line at the interim stage by prudent management of costs. Financial statistics are given for each trading subsidiary later in this statement.
The Board believes that the second half of the year will be significantly better than the first, something that has consistently happened in previous years. This is due to various factors, including the pattern of public sector spending.
We have taken the decision to relocate our subsidiary Envex Company Limited from rented offices in Berkshire to the Group-owned office of Adamson's Laboratory Services Ltd in Essex. There will be net savings after the cost of office closure has been offset against lower future overheads.
Costs of running the parent company have decreased by about 12% from £228,500 to £200,300 for the first half year as a result of directors agreeing to lower salaries and other contributory factors. The Board continues to seek ways to achieve savings.
Outlook
Whilst the level of long-term contracts continues to be fairly stable, the volume of ad-hoc work is unpredictable and visibility is never more than a few months ahead. The Board, however, remains reasonably optimistic that the Company's performance over the full year will be broadly in line with what was achieved in the previous year.
In our Annual Report we said that cost-cutting may lead to an overall improvement in margins but cautioned that in a volatile marketplace there can be no certainty. There are presently no signs of any increase in the level of confidence that our clients have in their own prospects, meaning they are cautious about allocation of budgets to services such as those we provide.
Dividend prospects
As in previous years, the Board is not recommending payment of an interim dividend, but expects to propose an appropriate final dividend at the end of the year.
Our special dividend of 1.0p, giving a total dividend of 2.0p per Ordinary Share, drew positive responses from the majority of investors. The Board is not averse to considering a similar distribution in relation to the current year, subject to this being judged appropriate in all the circumstances.
Despite a cash outflow of £207k pertaining to the dividend payment mentioned above, the Company's cash reserves stood £56k higher at the end of the period compared with 31 March 2011.
Net Asset Value
As at 30 September 2011, the Company had net assets of £5.133m (unaudited) as per these interim accounts. There were 10,381,973 Ordinary Shares in issue at that date which equates to a net asset value (NAV) per share of 49 pence. At 16 pence per share the Ordinary Shares of the Company are currently trading at approximately a 67% discount to the net asset value.
Performance by Trading Subsidiaries
Profit/loss figures for individual subsidiaries are stated before tax and inter-company charges (including the costs of operating the plc which are recovered through management charges to trading subsidiaries), interest paid and received, depreciation and amortisation.
Adamson's Laboratory Services Limited Invoiced sales of £947,271 yielding a profit of £18,929 (the figures for the same period last year were £978,607 and £7,206).
Envex Company Limited Invoiced sales of £65,136 yielding a profit of £8,761 for the period (the figures for the same period last year were £85,336 and £27,420).
Inspection Services (UK) Limited Invoiced sales of £126,111 yielding a profit of £10,901 (the figures for the same period last year were £123,272 and £12,359).
Personnel Health and Safety Consultants Limited Invoiced sales of £392,777 yielding a profit of £175,102 (the figures for the same period last year were £462,650 and £202,706).
RSA Environmental Health Limited Invoiced sales of £246,057 yielding a profit of £11,658 (the figures for the same period last year were £367,847 and £15,942).
Quality Leisure Management Limited Invoiced sales of £357,816 yielding a profit of £83,162 (the figures for the same period last year were £369,239 and £62,104).
Stephen King - Group Chief Executive Officer
For further information please contact:
PHSC plcStephen King 01622 717700www.phsc.plc.ukNorthland Capital Partners Limited(Nominated Adviser and Broker)Gavin Burnell / Rod Venables 020 7796 8800Group Statement of Comprehensive Six Six YearIncome months months ended ended ended 30 Sept 30 Sept 31 Mar 11 10 11 Note Unaudited £'000 £'000 £'000 Continuing operations Revenue 2,135 2,387 4,814 Cost of sales (1,147) (1,324) (2,636) Gross profit 988 1,063 2,178 Other income 2 4 66 Administrative expenses (899) (987) (1,917) Profit from operations 91 80 327 Finance income 5 1 1 Finance costs - - - Profit before taxation 96 81 328 Corporation tax expense (29) (19) (89) Profit after taxation and total comprehensive income from continuing operations 67 62 239 Profit after taxation and total 67 62 239comprehensive income Attributable to: Equity holders of the Group 67 62 239 Earnings per share for profit after tax and total comprehensive income from continuing operations attributable to the equity holders of the Group during the period Basic 4 0.64p 0.61p 2.33p Group Statement of Financial Position 30 Sept 30 Sept 31 Mar 11 10 11 Unaudited Note £'000 £'000 £'000 Non-current assets Property, plant and equipment 3 795 829 817 Goodwill 3,315 3,313 3,315 Deferred tax asset 1 5 1 4,111 4,147 4,133 Current assets Inventories 2 2 2 Trade and other receivables 1,096 1,481 1,382 Cash and cash equivalents 805 587 749 1,903 2,070 2,133 Total assets 6,014 6,217 6,266 Current liabilities Trade and other payables 598 643 756 Current corporation tax payable 102 47 56 Short term provisions 100 250 100 800 940 912 Non-current liabilities Long-term provisions - 100 - Deferred taxation liabilities 81 80 81 81 180 81 Total liabilities 881 1,120 993 Net assets 5,133 5,097 5,273 Capital and reserves attributable to equity holders of the Group Called up share capital 1,038 1,038 1,038 Share premium account 1,497 1,497 1,497 Capital redemption reserve 144 144 144 Retained earnings 2,454 2,418 2,594 5,133 5,097 5,273Group Statement of Changes in Equity Share Share Capital Retained Total Capital Premium Redemption Earnings Reserve £'000 £'000 £'000 £'000 £'000 Balance at 1 April 2010 1,038 1,497 144 2,449 5,128 Profit for the period - - - 62 62attributable to equity holders Dividends - - - (93) (93) Balance at 30 September 2010 1,038 1,497 144 2,418 5,097 Balance at 1 April 2011 1,038 1,497 144 2,594 5,273 Profit for the period - - - 67 67attributable to equity holders Dividends - - - (207) (207) Balance at 30 September 2011 1,038 1,497 144 2,454 5,133Group Statement of Cash Flows Six Six Year months months ended ended ended 30 Sept 30 Sept 31 Mar 11 10 11 Unaudited £'000 £'000 £'000 Cash flows from operating activities Cash generated from operations 242 120 616 Tax refunded/(paid) 17 (146) (203) Net cash generated from/(used by) 259 (26) 413operating activities Cash flows used in investing activities Purchase of property, plant and equipment (1) (17) (33) Purchase of subsidiary companies - 11 (250) Disposal proceeds fixed assets - 1 1 Interest received 5 1 1 Net cash used in investing activities 4 (4) (281) Cash flows used in financing activities Dividends paid to group shareholders (207) (93) (93) Net cash used in financing activities (207) (93) (93) Net increase/(decrease) in cash and cash 56 (123) 39equivalents Cash and cash equivalents at beginning of 749 710 710year Cash and cash equivalents at end of year 805 587 749 Notes to the cash flow statement Cash generated from operations Operating profit - continuing operations 91 80 327 Depreciation charge 23 25 51 Loss on sale of fixed assets - 1 10 Decrease in trade and other receivables 285 235 335 Decrease in trade and other payables (157) (221) (107) Cash generated from operations 242 120 616
Notes to the Financial Statements
1.
These interim financial statements for the period ended 30 September 2011 have been prepared in accordance with International Financial Reporting Standards (IFRSs). The Group financial statements consolidate the financial statements of PHSC plc and all its subsidiary undertakings made up to 30 September 2011.
All companies in the Group use sterling as presentational and functional currency.
The information presented within these interim financial statements is in compliance with IAS 34 "Interim Financial Reporting". This requires the use of certain accounting estimates and requires that management exercise judgement in the process of applying the Group's accounting policies. The areas involving a high degree of judgement or complexity, or areas where the assumptions and estimates are significant to the interim financial statements are disclosed below:
(a) Provisions
The Group recognises a provision where a legal or constructive obligation exists at the balance sheet date and a reliable estimate can be made of the likely outcome. A £100,000 liability has been provided within short term provisions relating to the payment due on the second anniversary of the acquisition of Quality Leisure Management.
(b) Impairment of goodwill
The Group Chief Executive Officer's Statement refers to the difficulty in evaluating future trading volumes and profitability in respect of each subsidiary company in the current economic climate. For this reason the Board is to defer any decision regarding the impairment of goodwill until the year end.
The financial information contained in this report, which has not been audited, does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 March 2011, prepared under IFRS have been filed with the Registrar of Companies. The auditors' report for the 2011 financial statements was unqualified and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.
Notes to the Financial Statements (continued) 30 Sept 30 Sept 31 Mar 11 11 10 Unaudited 2 Segmental Reporting £'000 £'000 £'000 Revenue PHSC plc - - - Personnel Health & Safety 393 463 928 Consultants Ltd RSA Environmental Health Limited 246 368 661 Adamson's Laboratory Services Ltd 947 979 2,095 Envex Company Ltd 65 85 177 Inspection Services Ltd 126 123 247 Quality Leisure Management Ltd 358 369 706 2,135 2,387 4,814 Profit/(loss) after taxation PHSC plc (13) - 9 Personnel Health & Safety 77 95 134 Consultants Ltd RSA Environmental Health Limited 4 6 4 Adamson's Laboratory Services Ltd (53) (89) (1) Envex Company Ltd 2 16 32 Inspection Services Ltd 4 4 5 Quality Leisure Management Ltd 46 30 56 67 62 239 Total assets PHSC plc 4,334 4,280 4,035 Personnel Health & Safety 670 697 746 Consultants Ltd RSA Environmental Health Limited 584 605 602 Adamson's Laboratory Services Ltd 1,027 1,237 1,335 Envex Company Ltd 89 93 110 Inspection Services Ltd 148 161 167 Quality Leisure Management Ltd 200 186 309 7,052 7,259 7,304 Adjustment of goodwill (1,038) (1,042) (1,038) 6,014 6,217 6,266
Notes to the Financial Statements 30 Sept 11 30 Sept 10 31 Mar 11 (continued)
Unaudited 3 Property, plant and equipment £'000 £'000 £'000 Cost or valuation Brought forward 1,158 1,159 1,159 Additions 1 17 33 Disposals - (11) (34) Carried forward 1,159 1,165 1,158 Depreciation Brought forward 341 320 320 Charge 23 25 51 Disposals - (9) (30) Carried forward 364 336 341 Net book value 795 829 817 4 Earnings per share The calculation of the basic earnings per share is based on the following data: Earnings 30 Sept 11 30 Sept 10 31 Mar 11 £'000 £'000 £'000 Unaudited Continuing activities 67 62 239 Number of shares 30 Sept 11 30 Sept 10 31 Mar 11 Weighted average number of shares for the purpose of basic earnings per share 10,381,973 10,276,019 10,381,973 Effect of dilutive warrants - 29,949 - Weighted average number of shares for the purpose of diluted earnings per share - 10,305,968 -
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