Last checked at 1 Dec 2008 11:40
PHSC PLC Interim Report 2008__________________________________________________________________________
GROUP CHIEF EXECUTIVE OFFICER'S STATEMENT
for the six months ended 30 September 2008
Financial Highlights
- Group turnover (consolidated) for the period is ‚£2.401m compared with ‚£ 2.518m for the same period last year, representing a decline of 4.5%
- Group profit before tax provision and goodwill impairment has reduced to ‚£ 231,000 from ‚£364,000 for the same period last year.
- Diluted earnings per share at the interim stage are 1.04p compared with 2.14p achieved in the corresponding period last year.
- A total of 170,000 Ordinary Shares in PHSC plc were purchased and cancelled in the period at cost of ‚£64,000.
- Net cash outflow from operating activities was ‚£188,000 (‚£479,000 inflow inthe same period last year). This includes payment of corporation tax of ‚£231,000 resulting from the requirement for quarterly instalments for the firsttime. After payment of dividends (‚£97,000), purchase of own shares (‚£64,000),purchase of our Raunds premises (‚£74,500), there was a ‚£412,000 net decrease incash. This resulted in cash reserves standing at ‚£892,000 at the end of theperiod.Corporate reviewPost balance sheet eventsShare purchase
In October 2008, 275,000 Ordinary Shares in PHSC plc were purchased at 23p each and were cancelled.
Acquisitions
We previously announced the proposed acquisition of two companies: Inspection Services (U.K.) Limited and Aquatic Water Services Limited.
Completion of the purchase of Inspection Services (U.K.) Limited took place on1 October 2008. The company is an independent specialist in the examination andcertification of plant and equipment, offering an inspection service for allstatutory and non-statutory requirements throughout the UK. Originally formedin 1992, the company derives much of its work from a network of insurancebrokers and enjoys a high level of repeat business. The purchase price of ‚£180,000 was paid in cash on completion. Cash assets of ‚£136,000 were purchased‚£ for ‚£. Net non-cash assets, mainly short-term debtors ‚£ for ‚£, were purchasedat fair value of ‚£25,200. An additional ‚£25,000 becomes due to the sellers onthe first anniversary subject to pre-tax profits of not less than ‚£60,000accruing in the period. In the last financial year, the company recordedpre-tax profits of ‚£40,000 on revenues of ‚£221,000. Discussions relating to the acquisition of Aquatic Water Services Limited (AWS)are continuing. Our board is adopting a cautious approach in the currenteconomic climate and in the short term we believe that shareholders' interestsmay be better served by us conserving our cash resources. AWS providesspecialist scientific, process and engineering services to the water industry.Projects are undertaken in the potable water, waste water, fresh water andmarine water environments.
Performance by Trading Subsidiaries
Profit figures for individual subsidiaries are stated before tax and management charges.
Adamson's Laboratory Services Limited
Invoiced sales of ‚£1,273,687 yielding a profit of ‚£236,680 (the figures for the same period last year were ‚£1,407,317 and ‚£277,838).
Envex Company Limited
Invoiced sales of ‚£121,029 yielding a profit of ‚£28,471 for the period (the figures for the same period last year were ‚£123,818 and ‚£6,874).
Personnel Health and Safety Consultants Limited
Invoiced sales of ‚£509,016 yielding a profit of ‚£236,881 (the figures for the same period last year were ‚£508,377 and ‚£255,637).
RSA Environmental Health Limited
Invoiced sales of ‚£377,673 yielding a loss of ‚£31,203 (the figures for the same period last year were ‚£479,266 and a profit of ‚£29,091).
In-House The Hygiene Management Company Limited
Invoiced sales of ‚£131,331 yielding a profit of ‚£7,855. There are no comparable figures for last year as the company was not part of the Group at that time.
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's diverse client base leaves it well-placed to cope with the economicdownturn and predicted recession in the UK economy. Aside from a smallmortgage on one of its properties, the Group has no borrowings and does notutilise its overdraft facility. Cash balances at the bank are more thansufficient to ensure that restrictions on the availability and cost of financewill have no direct effect.
Stephen King - Group Chief Executive Officer
PHSC plc Six Consolidated income statement Six months months Year ended ended ended 30 Sept 30 Sept 08 07 31 Mar 08 Note Unaudited ‚£'000 ‚£'000 ‚£'000 Continuing operations Revenue 2,401 2,518 5,078 Cost of sales 1,258 1,374 2,721 Gross profit 1,143 1,144 2,357 Other income 1 1 1
Administrative expenses - regular (935) (792)
(1,637)
Administrative expenses - goodwill
impairment (27) - - Operating profit 182 353 721 Finance income 25 22 56 Finance costs (3) (11) (20) Profit before taxation 204 364 757 Corporation tax expense (83) (111) (236)
Profit for the period on continuing
operations 121 253 521 Attributable to: Equity holders of the Group 121 253 521
Earnings per share for profit from
continuing 3
operations attributable to the equity holders of
the Group during the period Basic 1.05p 2.17p 4.48p Diluted 1.04p 2.14p 4.42p Consolidated balance sheet 30 Sept 08 30 Sept 07 31 Mar 08 Unaudited Note ‚£'000 ‚£'000 ‚£'000 Non-current assets Property, plant and equipment 2 861 823 807 Goodwill 2,566 2,253 2,585 3,427 3,076 3,392 Current assets Inventories 344 316 263 Trade and other receivables 1,087 821 1,026 Cash and cash equivalents 892 1,547 1,303 2,323 2,684 2,592 Total assets 5,750 5,760 5,984 Current liabilities Trade and other payables 510 410 551 Financial liabilities 5 83 4
Current corporation tax payable 87
347 238 Short term provisions 80 - 80 682 840 873 Non-current liabilities Financial liabilities 82 148 85 Long-term provisions 50 - 50 Deferred taxation liabilities 82 91 83 214 239 218 Total liabilities 896 1,079 1,091 Net assets 4,854 4,681 4,893
Capital and reserves attributable to equity
holders of the Group Called up share capital 1,135 1,166 1,152 Share premium account 1,488 1,463 1,488 Revaluation reserve 199 203 200 Capital redemption reserve 36 5 19 Retained earnings 1,996 1,844 2,034 4,854 4,681 4,893
Consolidated cash flow statement Six months
Six months Year ended ended ended 30 Sept 08 30 Sept 07 31 Mar 08 Unaudited ‚£'000 ‚£'000 ‚£'000 Cash flows from operating activities Cash generated from operations 46
490 897 Interest paid (3) (11) (20) Tax paid (231) - (245)
Net cash (used in)/generated from operating activities (188)
479 632
Cash flows used in investing activities Purchase of property, plant and equipment (77) (31) (42) Purchase of subsidiary companies (8)
(159) (382) Interest received 25 22 57
Net cash used in investing activities (60)
(168) (367)
Cash flows used in financing activities
Repayments of borrowings (3) (140) (281)
Dividends paid to group shareholders (97)
(93) (93) Purchase of own shares (64) - (56)
Net cash used in financing activities (164)
(233) (430)
Net (decrease)/increase in cash and cash equivalents (412) 78 (165) Cash and cash equivalents at beginning of year 1,304 1,469 1,469 Cash and cash equivalents at end of year 892
1,547 1,304
Notes to the cash flow statement Cash generated from operations Operating profit - continuing operations 182
353 720 Goodwill impairment 27 - - Depreciation 24 29 54
(Increase)/decrease in inventories (82) 73 126 (Increase)/decrease in trade and other receivables (61) 129 10 (Decrease)/increase in trade and other payables (44) (94) (13) Cash generated from operations 46
490 897
Consolidated Statement of Changes in Equity
Capital Share Share Redemption Revaluation Retained Total Capital Premium Reserve Reserve Earnings Equity ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Balance at 1 April 2007 1,166 1,488 5 203 1,659 4,521 Profit attributable to equity holders - - - - 521 521 Dividends - - - - (93) (93) Purchase of own shares (14) - 14 - (56) (56) Depreciation on revalued assets (3) 3 - Balance at 30 September 2007 1,152 1,488 19 200 2,034 4,893 Balance at 1 April 2008 1,152 1,488 19 200 2,034 4,893 Profit attributable to equity holders - - - - 121 121 Dividends - - - - (97) (97) Purchase of own shares (17) - 17 - (63) (63) Depreciation on revalued assets - - - (1) 1 - Balance at 30 September 2008 1,135 1,488 36 199 1,996 4,854
Notes on the financial statements
The unaudited financial information comprises the consolidated interim balance
1 sheets as at 30 September 2008 and 30 September 2007 and the related consolidated interim statements of income, changes in equity and cash
flows and related notes for the six months then ended (hereinafter referred to
as the "financial information"). The financial information, including the comparative figures for the year ended 31 March 2008, do not
constitute statutory financial statements for the purposes of Section 240 of
the Companies Act 1985. A copy of the statutory financial statements for the year ended 31 March 2008, prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, International
Financial Reporting Intermediate Committee (IFRIC) interpretatations and The
Companies Act 1985 applicable to companies reporting under IFRS, has been delivered to the Registrar of Companies and contained an unqualified auditors' report in accordance with Section 235 of the Companies Act 1985. PHSC plc has adopted IFRS with effect from 1 April 2007, in accordance with European Union Regulations
and the London Stock Exchange AIM Rules. The first Annual Report prepared under
IFRS was for the year ended 31 March 2008. In compliance with IFRS 1 'First Time Adoption of International Financial Reporting Standards', the date of transition to IFRS is 1 April 2006.
The interim financial information has been prepared in accordance with the
recognition and measurement
requirements of IFRS as endorsed by the European Union. The Directors do not
consider that there are any
significant changes to the Group's accounting policies (as set out in the 2007
Annual Report) other than those resulting from the adoption of IFRS. An explanation of how transition to IFRS has affected the reported
financial position and performance of the Group is provided in note 3. The note
includes reconciliations of equity
and profit for comparative periods reported under UK GAAP to those reported for
those periods under IFRS. 30 Sept 08 30 Sept 07 31 Mar 08 Unaudited
2 Property, plant and equipment ‚£'000
‚£'000 ‚£'000 Cost or valuation Brought forward 1,052 1,008 1,008 Additions 78 31 42 Acquisition of subsidiary - - 2 1,130 1,039 1,052 Depreciation Brought forward 245 191 191 Charge 24 25 54 269 216 245 Net book value 861 823 807 3 Earnings per share The calculation of the basic and diluted earnings per share is based on the following data: Earnings 30 Sept 08 30 Sept 07 31 Mar 08 ‚£'000 ‚£'000 ‚£'000 (unaudited) (unaudited) Continuing activities 121 253 521 Number of shares 30 Sept 08 30 Sept 07 31 Mar 08 Weighted average number of shares for the purpose of basic earnings per share 11,487,085 11,657,296 11,626,677 Effect of dilutive warrants 163,373 163,373 163,373 Weighted average number of shares for the purpose of diluted earnings per share 11,650,458 11,820,669
11,790,050
vendor