Last checked at 30 Nov 2009 07:00
PHSC PLC Interim Report 2009
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GROUP CHIEF EXECUTIVE OFFICER'S STATEMENT
for the six months ended 30 September 2009
Financial Highlights
* Group turnover (consolidated) for the period is down 8% at 2.208m compared
with 2.401m for the same period last year.
* Retained profit of 117,000 after tax provision and goodwill impairment,
compared with 121,000 for the same period last year.
* Diluted earnings per share at the interim stage are virtually unchanged at
1.06p compared with 1.04p achieved in the corresponding period last year.
* A total of 500,000 Ordinary Shares in PHSC plc were purchased and cancelled
in the period at cost of 90,000.
* Net cash generated from operating activities was 297,000 ( 188,000 outflow
in the same period last year). After fixed asset purchases and disposals,
repayment of borrowings, purchase of own shares and payment of dividends
this led to a net cash increase of 68,000 in the period. * Overall cash and cash equivalents stood at 911,000 at the end of the period compared with 843,000 at the year ended 31 March 2009. Corporate reviewPost balance sheet eventsRepayment of borrowings
In November 2009 the remaining balance of the mortgage on our Raunds premises of approximately 40,000 was repaid. This means that the Group has no outstanding loans.
Acquisitions
The final instalment due for the acquisition of In House the Hygiene Management Company was paid in cash in October 2009.
We are in the advanced stages of due diligence procedures relating to the proposed acquisition of a health and safety consultancy that specialises in the leisure sector. An announcement will be made at the appropriate time, with completion scheduled for the end of the calendar year.
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.
Adamson's Laboratory Services LimitedInvoiced sales of 1,081,905 yielding a profit of 155,633 (the figures for thesame period last year were 1,273,687 and 236,680).Envex Company LimitedInvoiced sales of 102,599 yielding a profit of 12,781 for the period (thefigures for the same period last year were 121,029 and 28,471).In-House The Hygiene Management Company LimitedInvoiced sales of 85,584 yielding a profit of 14,980 (the figures for thesame period last year were 131,331 and a profit of 7,855).Inspection Services (UK) LimitedInvoiced sales of 139,014 yielding a profit of 11,605. There are nocomparable figures for last year as the company was not part of the Group atthat time.Personnel Health and Safety Consultants LimitedInvoiced sales of 492,226 yielding a profit of 213,845 (the figures for thesame period last year were 509,016 and 236,881).RSA Environmental Health LimitedInvoiced sales of 307,303 yielding a loss of 1,457 (the figures for the sameperiod last year were 377,673 and a loss of 31,203).
Dividend
The Board is not recommending payment of an interim dividend, but expects to propose an appropriate final dividend at the end of the year.
Prospects
The Group continues to suffer from the effects of recession in the UK economy.This has led to lower orders and reduced margins on those sales that have beenachieved. Nevertheless we believe we are better placed than many of our peers,with sector analysts suggesting that one in four safety consultancy practicesare trading at a loss.With the recent repayment of the last of our borrowings, a considerable cashbalance, and a proposed acquisition in the pipeline, we are confident that wehave the ability to grow revenues in the second half of the year. Margins willcontinue to be under pressure but we will resist the temptation to generaterevenue at the expense of profit.
Stephen King - Group Chief Executive Officer
PHSC plcInterim Report 2009 Consolidated income statement Six Six Year months months ended ended ended 30 Sept 30 Sept 31 Mar 09 09 08 Note Unaudited GBP'000 GBP'000 GBP'000 Continuing operations Revenue 2,208 2,401 5,022 Cost of sales 1,135 1,258 2,731 Gross profit 1,073 1,143 2,291 Other income 1 1 2 Administrative expenses (885) (935) (1,845)
Administrative expenses - exceptional (16) (27)
-item Operating profit 173 182 448 Finance income - 25 32 Finance costs (1) (3) (8) Profit before taxation 172 204 472 Corporation tax expense (55) (83) (146)
Profit for the period on continuing 117 121
326operations Attributable to: Equity holders of the Group 117 121 326
Earnings per share for profit from 3
continuing
operations attributable to the equity holders
of the Group during the period Basic 1.08p 1.05p 2.89p Diluted 1.06p 1.04p 2.85pPHSC plcInterim Report 2009 Consolidated balance sheet 30 Sept 30 Sept 31 Mar 09 09 08 Unaudited Note GBP'000 GBP'000 GBP'000 Non-current assets
Property, plant and equipment 2 830 861
847 Goodwill 2,718 2,566 2,734 3,548 3,427 3,581 Current assets Inventories 2 2 1 Trade and other receivables 1,329 1,429 1,507 Cash and cash equivalents 911 892 843 2,242 2,323 2,351 Total assets 5,790 5,750 5,932 Current liabilities Trade and other payables 619 510 671 Financial liabilities 2 5 8
Current corporation tax payable 51 87
32 Short term provisions 75 80 75 747 682 786 Non-current liabilities Trade and other payables - - 2 Financial liabilities 37 82 75 Long-term provisions - 50 - Deferred taxation liabilities 74 82 74 111 214 151 Total liabilities 858 896 937 Net assets 4,932 4,854 4,995
Capital and reserves attributable to
equity holders of the Group Called up share capital 1,058 1,135 1,108 Share premium account 1,488 1,488 1,488 Revaluation reserve 114 199 197 Capital redemption reserve 197 36 64 Retained earnings 2,075 1,996 2,138 4,932 4,854 4,995PHSC plcInterim Report 2009
Consolidated Statement of Changes in Equity
Capital Share Share Redemption Revaluation Retained Total Capital Premium Reserve Reserve Earnings Equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 April 2008 1,152 1,488 19 200 2,034 4,893 Profit for the period - - - - 121 121attributable to equity holders Dividends - - - - (97) (97) Purchase of own shares (17) - 17 - (63) (63) Depreciation - - - (1) 1 -on revalued assets Balance at 30 September 1,135 1,488 36 199 1,996 4,8542008 Balance at 1 April 2009 1,108 1,488 64 197 2,138 4,995 Profit for the period - - - - 117 117attributable to equity holders Dividends - - - - (90) (90) Purchase of own shares (50) - 50 - (90) (90) Depreciation - - - - - -on revalued assets Balance at 30 September 1,058 1,488 114 197 2,075 4,9322009 PHSC plcInterim Report 2009
Consolidated cash flow statement
Six Six Year months months ended ended ended 30 Sept 30 Sept 31 Mar 09 09 08 Unaudited GBP'000 GBP'000 GBP'000
Cash flows from operating activities Cash generated from operations 333 46
422 Interest paid (1) (3) (8) Tax paid (35) (231) (358)
Net cash generated from/(used in) 297 (188)
56operating activities
Cash flows used in investing activities
Purchase of property, (7) (78) (89)plant and equipment Purchase of subsidiary companies - (7)
(229)
Disposal proceeds fixed assets 2 -
- Interest received - 25 31 Net cash used in investing activities (5) (60)
(287)
Cash flows used in financing activities
Repayments of borrowings (44) (4) (6)
Dividends paid to group shareholders (90) (97)
(97) Purchase of own shares (90) (63) (127) Net cash used in financing activities (224) (164) (230) Net increase/(decrease) in 68 (412) (461)cash and cash equivalents Cash and cash equivalents 843 1,304 1,304at beginning of year
Cash and cash equivalents at end of year 911 892
843
Notes to the cash flow statement Cash generated from operations Operating profit - continuing operations 173 182
448 Goodwill impairment 16 27 33 Depreciation 22 24 51
Loss on sale of fixed assets - -
1
(Increase)/decrease in inventories (2) -
2 Decrease/(increase) 178 (142) (93)
in trade and other receivables Decrease in trade and other payables (54) (45)
(20)
Cash generated from operations 333 46
422PHSC plcInterim Report 2009
Notes on the financial statements
1 The financial information for the six months ended 30 September 2009 and thesix months ended 30 September 2008 have not been audited. As permitted, the Group has chosen notto adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information.The unaudited financial information comprises the consolidated interim balancesheets as at 30 September 2009 and 30 September 2008 and the related consolidated interim statements ofincome, changes in equity and cash flows and related notes for the six months then ended (hereinafter referred toas the "financial information").The financial information, including the comparative figures for the year ended31 March 2009, do not constitute statutory financial statements for the purposes of Section 240 ofthe Companies Act 1985. A copy of the statutory financial statements for the year ended 31 March 2009,prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EuropeanUnion has been delivered to the Registrar of Companies and contained an unqualifiedauditors' report in accordance with Section 235 of the Companies Act 1985.The interim financial information has been prepared in accordance with therecognition and measurement requirements of IFRS as endorsed by the European Union. The Directors do notconsider that there are any significant changes to the Group's accounting policies (as set out in the 2009Annual Report) other than those resulting from the adoption of IFRS. 30 Sept 30 Sept 31 Mar 09 08 09 Unaudited Audited
2 Property, plant and equipment GBP'000 GBP'000
'000 Cost or valuation Brought forward 1,130 1,052 1,052 Additions 7 78 89 Disposals (12) - (13) Acquisition of subsidiary - - 2 Carried forward 1,125 1,130 1,130 Depreciation Brought forward 283 245 245 Charge 22 24 51 Disposals (10) - (13) Carried forward 295 269 283 Net book value 830 861 847 3 Earnings per shareThe calculation of the basic and diluted earnings per share is based on thefollowing data: Earnings 30 Sept 09 30 Sept 08 31 Mar 09 GBP'000 GBP'000 GBP'000 unaudited Continuing activities 117 121 326 Number of shares 30 Sept 09 30 Sept 08 31 Mar 09 Weighted average number 10,890,227 11,487,085 11,277,224
of shares for the purpose of basic earnings per share Effect of dilutive warrants 163,373 163,373
163,373 Weighted average number 11,053,600 11,650,458 11,440,597 of shares for the purpose of diluted earnings per share
For further information please contact:
PHSC plcStephen King 01622 717700www.phsc.plc.co.ukAstaire Securities plcGavin Burnell 020 7448 4400
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