Last checked at 24 May 2017 11:30
H C SLINGSBY PLC
("Slingsby" or the "Company" or the "Group")
Audited Results for the year ended 31 December 2016
Statement by the Chairman
Board Changes
As reported in my 2016 half year statement, at the Annual General Meeting on 30 June 2016, John Waterhouse was not re-elected by shareholders as a director of the Company. As a result, I was appointed as Interim Executive Chairman and we continue to look to appoint a Non-Executive Chairman. We also continue to search for a new non-executive director which is proving to be more protracted than anticipated due to the ongoing uncertainty regarding the pension fund commitments.
Results
In that half year statement I reported an operating loss (before exceptional items) of £0.16m on sales of £9.3m. The full year operating loss (before exceptional items) was £0.26m (2015: loss of £10,000) on sales of £18m (2015: £17.1m). Together with exceptional restructuring costs, the full year pre-tax loss was £0.7m (2015: £0.6m).
The results for the year ended 31 December 2016 contain the full year benefit of the ESE Direct Limited ("ESE") acquisition which contributed £6.5m of sales (2015: £4.8m) and £0.2m (2015: £0.1m) operating profit. ESE remains cash generative.
Group earnings before interest, depreciation and amortisation ("EBITDA") in the year ended 31 December 2016 was £0.27m (2015: £0.52m) before exceptional items. Net debt at 31 December 2016 is £1.7m (2015: £1.5m).
Dividend
In view of the loss in 2016 and the uncertainty around the pension fund commitments, the Board is unable to recommend a final dividend for the year (2015:£nil).
Pension Scheme
The Company has an obligation to fund its defined benefit pension scheme and contributions to this scheme totalled £270,000 in 2016. This, together with scheme running costs of £160,000, represented a major commitment for the Company to meet. Following the vote to leave the European Union, the pension scheme deficit has increased as at 31 December 2016 to £9.6m (2015: £8.0m). Mainly as a result of this increase (a net £1.3m after deferred tax movement), as well as the losses incurred during the year, group net assets have declined by £1.9m at 31 December 2016 to £0.4m (2015: £2.3m).
In our half year statement I advised that, with agreement of the pension scheme Trustee, we had from 1 July 2016 suspended deficit reduction contributions (whilst still paying the agreed costs of the scheme) until a longer term solution was found. Discussions are ongoing and so whilst during this time the Company is not paying deficit reduction contributions, there is uncertainty as to the quantum and timing of future payments to the scheme.
Recent Trading
During 2016, we began to refocus our sales and marketing efforts towards customer acquisition. We simplified and improved the presentation of our later 2016 mailings and 2017 catalogue. In addition, we have reduced overheads and achieved synergies with ESE by combining activities across the Group.
I am pleased to report that these actions have resulted in sales for the first four months of the current financial year being 7% ahead of the comparable period last year. Whilst some of this sales improvement is due to several large orders received in 2016 but delivered in 2017, order intake in 2017 remains ahead of prior year.
Whilst encouraged by this improved trading in the early part of 2017, we remain cautious regarding future trading given the volatility which we have experienced in the recent past.
Finally, I would like to thank our staff across the Group for their efforts made in 2016 and 2017. Our performance to date in 2017 gives grounds for optimism but we must maintain our focus to build on what has been achieved.
D. S. SlingsbyInterim Executive Chairman
24 May 2017
For further information, please contact:
H C Slingsby PLC | Tel: 01274 535 030 |
Dominic Slingsby, Interim Executive Chairman Morgan Morris, Group Financial Director
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Allenby Capital Limited | Tel: 020 3328 5656 |
David Worlidge/Richard Short
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Consolidated Income Statement for the year ended 31 December 2016
Note | 2016 (Audited) £'000 | 2015 (Audited) £'000
| |
Revenue | 18,044 | 17,061 | |
---------- | ----------
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Operating loss before exceptional items | (261) | (10) | |
Exceptional items | 2 | (102) | (281) |
Operating loss | (363) | (291) | |
Finance income | - | 1 | |
Finance costs | (369) | (342) | |
---------- | ---------- | ||
Loss before taxation | (732) | (632) | |
Taxation | 76 | 194 | |
---------- | ---------- | ||
Loss for the year attributable to owners of the parent | (656) | (438) | |
---------- | ---------- | ||
Basic and diluted loss per share | 4 | (65.6p) | (43.8p) |
---------- | ---------- |
Audited Consolidated Statement of Comprehensive Income and Expense for the year ended 31 December 2016
2016 (Audited) £'000
| 2015 (Audited) £'000
| ||
Loss for the year | (656) | (438) | |
Items that will not be classified to profit or loss: | |||
Re-measurements of post-employment benefit obligation | (1,555) | 242 | |
Movement in deferred tax relating to retirement benefit obligation |
280 |
(213) | |
Items that may be subsequently reclassified to profit or loss: | |||
Exchange adjustment | 31 | (13) | |
---------- | ---------- | ||
Other comprehensive expense/income | (1,244) | 16 | |
----------
| ---------- | ||
Total comprehensive expense for the year attributable to equity shareholders |
(1,900) |
(422) | |
-------- | ---------- | ||
Audited Consolidated Balance Sheet as at 31 December 2016
Note | 2016 (Audited) £'000
| 2015 (Audited) £'000
| |
Assets | |||
Non-current assets | |||
Property, plant and equipment | 5,838 | 6,102 | |
Intangible assets | 1,108 | 1,279 | |
Goodwill | 2,409 | 2,409 | |
Deferred tax asset | 1,733 | 1,446 | |
-------- | ---------- | ||
11,088 | 11,236 | ||
-------- | ---------- | ||
Current assets | |||
Inventories | 1,811 | 1,778 | |
Trade and other receivables | 2,525 | 2,340 | |
Cash and cash equivalents | 632 | 192 | |
Derivative financial asset | - | 11 | |
-------- | ---------- | ||
4,968 | 4,321 | ||
-------- | ----------
| ||
Liabilities | |||
Current liabilities | |||
Trade and other payables | (5,517) | (4,653) | |
Derivative financial liability | (13) | - | |
Finance lease obligations | (44) | (44) | |
--------- | --------- | ||
(5,574) | (4,697) | ||
-------- | ---------- | ||
Net current liabilities | (606) | (376) | |
-------- | ---------- | ||
Non-current liabilities | |||
Finance lease obligations | (37) | (66) | |
Retirement benefit obligation | 3 | (9,626) | (8,033) |
Deferred tax liabilities | (416) | (458) | |
-------- | ---------- | ||
Net assets | 403 | 2,303 | |
--------
| ----------
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Capital and reserves | |||
Share capital | 250 | 250 | |
Retained earnings | 131 | 2,062 | |
Translation reserve | 22 | (9) | |
-------- | ---------- | ||
Total equity | 403 | 2,303 | |
-------- | ---------- | ||
Audited Consolidated Cash Flow Statement for the year ended 31 December 2016
2016 (Audited) £'000 | 2015 (Audited) £'000 | ||
Note | |||
Cash flows from operating activities | |||
Cash generated (used in)/from operations | 5 | (84) | 171 |
Interest payable | (61) | (38) | |
UK corporation tax received | 23 | 93 | |
-------- | -------- | ||
Cash generated (used in)/from operating activities | (122) | 226 | |
Cash flows from investing activities | |||
Interest received | - | 1 | |
Purchase of property, plant and equipment | (98) | (198) | |
Acquisition of subsidiary (net of cash acquired) | (30) | (3,585) | |
Purchase of intangible assets | 51 | 112 | |
Proceeds from sales of property, plant and equipment | (40) | (26) | |
-------- | -------- | ||
Net cash used in investing activities
| (117) | (3,696)
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Cash flows from financing activities | |||
Equity dividends paid | 6 | - | (60) |
Capital element of finance lease payments | (57) | (20) | |
New finance leases | 27 | 130 | |
Proceeds from borrowing | 50 | 1,202 | |
-------- | -------- | ||
Net cash generated from financing activities | 20 | 1,252 | |
-------- | -------- | ||
Net decrease in cash and cash equivalents | (219) | (2,218) | |
Opening cash and cash equivalents | (291) | 1,940 | |
Exchange differences | 31 | (13) | |
-------- | -------- | ||
Closing cash and cash equivalents | (479) | (291) | |
-------- | -------- |
Audited Consolidated Statement of Changes in Shareholders' Equity
| Share capital £'000 | Retained earnings £'000 | Translation reserve £'000 | Total equity £'000 |
1 January 2015 | 250 | 2,531 | 4 | 2,785 |
Loss for the year | - | (438) | - | (438) |
Other comprehensive income / (expense) for the year | - | 29 | (13) | 16 |
---------- | ---------- | ---------- | ---------- | |
Total comprehensive expense for the year | - | (409) | (13) | (422) |
Dividends paid | - | (60) | - | (60) |
---------- | ---------- | ---------- | ---------- | |
1 January 2016 | 250 | 2,062 | (9) | 2,303 |
Loss for the year | - | (656) | - | (656) |
Other comprehensive (expense)/income for the year |
- |
(1,275) |
31 |
(1,244) |
Total comprehensive expense for the year | ---------- | --------- (1,931) | -------- 31 | ---------- (1,900) |
Dividends paid | - | - | - | - |
---------- | ---------- | ---------- | ---------- | |
31 December 2016 | 250 | 131 | 22 | 403 |
---------- | ---------- | ---------- | ---------- |
The translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign operations.
Notes to the Audited Results for the year ended 31 December 2016
1. | The preliminary financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 for the financial years ended 31 December 2016 and 31 December 2015, but has been derived from those accounts. These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRSIC interpretations as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial information included in this preliminary announcement does not include all the disclosures required by IFRS or the Companies Act 2006 and accordingly it does not itself comply with IFRS or the Companies Act 2006.
The accounting policies used in the preparation of this preliminary announcement have remained unchanged from those set out in the statutory accounts for the year ended 31 December 2015. They are also consistent with those in the full accounts for the year ended 31 December 2016 which have yet to be published.
Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for the financial year ended 31 December 2016 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts and their opinion was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
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2. | Exceptional item | 2016 (Audited) | 2015 (Audited) |
£'000
| £'000
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Redundancy and compensation costs | (102) | (88) | |
Acquisition of ESE | - | (193) | |
------------ | ------------ | ||
(102) | (281) | ||
------------ | ------------ | ||
Costs relating to the acquisition of ESE relate to legal, accounting and advisory services together with bank facility costs.
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3. | Retirement benefit obligation | ||
2016 | 2015 | ||
| Present value of funded obligation | (Audited) £'000 | (Audited) £'000 |
Fair value of scheme assets | 26,792 | 21,993 | |
Net liability in balance sheet | (17,166) | (13,960) | |
------------ | ------------ | ||
9,626 | 8,033 | ||
------------ | ------------ | ||
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4. | Loss per share
Basic loss per share is based upon losses of £656,000 (2015: £438,000) and on 1,000,000 (2015: 1,000,000) ordinary shares in issue during the year.
There is no difference between basic loss per share and diluted loss per share for both years as there are no potentially dilutive shares in issue.
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5. | Cash generated from/(used in) operating activities | ||
2016 (Audited) | 2015 (Audited) | ||
£'000
| £'000
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Loss before tax | (732) | (632) | |
Net finance costs | 369 | 341 | |
Depreciation and amortisation | 527 | 530 | |
Profit on sale of property, plant and equipment | (5) | (99) | |
Pension deficit contributions | (270) | (500) | |
(Increase)/decrease in inventories | (33) | 232 | |
(Increase)/decrease in trade and other receivables | (169) | 29 | |
Increase in trade and other payables | 229 | 270 | |
------------ | ------------ | ||
Cash (used in)/generated from operating activities | (84) | 171 | |
| ------------ | ------------ | |
6. | Dividends | ||
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The interim dividend for 2014 and final dividends for the 2014 financial year of 2.0p and 4.0p, totalling £60,000 were paid and deducted from reserves in the year ended 31 December 2015. | ||
7. | Availability of Report and Accounts | ||
| The financial statements for the year ended 31 December 2016, will be issued to shareholders on 26 May 2017 and will be available to members of the public at the registered office of the Company and on the Company's website www.slingsby.com from that date.
The statutory accounts for the year ended 31 December 2016 will be delivered to the Registrar following the Company's Annual General Meeting. The Annual General Meeting will be held at 10.00 am on 28 June 2017 at HC Slingsby plc, Otley Road, Baildon, Shipley, BD17 7LW.
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