Last checked at 9 Sep 2016 10:32
H C Slingsby plc ("Slingsby" or "the Company")
Report for the half year ended 30 June 2016
Statement by the Chairman
At the Annual General Meeting on 30 June 2016, John Waterhouse was not re-elected by shareholders as Chairman of the Board. As a result, I was appointed as Interim Executive Chairman until such time as a suitable candidate is appointed.
Turnover for the six months ended 30 June 2016 increased to £9.3million as a result of the acquisition on 27 March 2015 of ESE Direct Limited ("ESE") and hence ESE's results were only included for 3 months of the comparable period. Group sales on a comparable basis were 2.7% below prior year with sales growth at ESE being offset by a decline at the Slingsby business.
As reported in our trading statement on 30 June 2016, the competitive nature of the market has impacted on margins and this, together with the reduced level of sales, led to a Group operating loss before exceptional items of £0.16million against a profit of £0.01million in the prior year.
ESE generated operating profits of £0.1million in the six months ended 30 June 2016 and remains cash generative. Group profit before exceptional items, interest, depreciation and amortisation was £0.1m in the six months ended 30 June 2016.
Trading remains volatile (and was particularly so either side of the Brexit vote) and management remains focussed on realising synergies across the Group and on initiatives to improve the sales performance and our commercial proposition. Costs have also been reduced and the Group IT system is being installed at ESE.
The Company has an obligation to fund its defined benefit pension scheme and contributions to this scheme totalled £500,000 in the 2015 calendar year, which were paid in equal monthly contributions. This, together with the scheme's running costs of approximately £160,000 per annum, represents a major commitment for the Group to meet.
Since the vote to leave the European Union was announced and in common with many other schemes, the outlook for pension commitments has worsened and could lead to the Company paying an increased amount into the scheme in the longer term. Following this change of circumstances, the Company is working with the pension scheme trustee to look at options for a longer term solution to these pension commitments. Whilst this takes place, the Company has agreed with the trustee that it will suspend deficit reduction monthly payments to the scheme from 1 July 2016 until at least the end of the year.
The directors continue to search for a new Non-Executive director and are confident that an appointment will be made in the near future.
In view of the trading performance, the Board has decided not to declare an interim dividend.
Dominic Slingsby
Interim Executive Chairman and Operations Director 9 September 2016
For further information please contact:
H C Slingsby plc
Dominic Slingsby, Interim Executive Chairman 01274 535 030
Allenby Capital Limited
David Worlidge/Richard Short 020 3328 5656
Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2016
Half year | Half year | Year | ||
ended | ended | ended | ||
30/06/16 (Unaudited) | 30/06/15 (Unaudited) | 31/12/15 (Audited) | ||
Note | £'000 | £'000 | £'000
| |
Revenue | 9,276 | 7,725 | 17,061 | |
--------- | --------- | --------- | ||
Operating (loss)/profit before exceptional items | (162) | 14 | (10) | |
Exceptional items | 2 | (85) | (255) | (281) |
--------- | --------- | --------- | ||
Operating loss | (247) | (241) | (291) | |
Finance income | - | 1 | 1 | |
Finance costs | (177) | (168) | (342) | |
-------- | -------- | -------- | ||
Loss before taxation | (424) | (408) | (632) | |
Taxation | 3 | (23) | 69 | 194 |
-------- | -------- | -------- | ||
Loss for the period attributable to equity shareholders | (447) -------- | (339) -------- | (438) -------- | |
Basic and diluted loss per share | (44.7p) | (33.9p) | (43.8p) | |
-------- | -------- | -------- | ||
The results set out above derive entirely from continuing operations.
The above unaudited condensed consolidated income statement should be read in conjunction with the accompanying notes.
Unaudited Consolidated Statement of Comprehensive Income and Expense for the half year ended 30 June 2016
Half year | Half year | Year | |||
Ended | ended | ended | |||
30/06/16 (Unaudited) | 30/06/15 (Unaudited) | 31/12/15 (Audited) | |||
£'000 | £'000 | £'000 | |||
Loss for the period | (447) | (339) | (438) | ||
Items that will not be reclassified to profit or loss | |||||
Remeasurements of post-employment benefit obligations | (566)
| (709)
| 242
| ||
Movement in deferred tax relating to retirement benefit obligation |
102 |
142 |
(213) | ||
Items that may be subsequently reclassified to profit or loss | |||||
Exchange adjustment | 25 | (20) | (13) | ||
-------- | -------- | -------- | |||
Other comprehensive (expense)/income | (439) | (587) | 16 | ||
-------- | -------- | -------- | |||
Total comprehensive expense recognised for the period attributable to equity shareholders |
(886) |
(926) |
(422) | ||
-------- | -------- | -------- | |||
The above unaudited consolidated statement of comprehensive income and expense should be read in conjunction with the accompanying notes.
Unaudited Consolidated Balance Sheet as at 30 June 2016
30/06/16 (Unaudited) | 30/06/15 (Unaudited) | 31/12/15 (Audited) | ||
£'000 | £'000 | £'000 | ||
Assets | ||||
Non-current assets | ||||
Property, plant and equipment | 5,986 | 6,182 | 6,102 | |
Intangible assets Goodwill | 1,195 2,409 | 1,382 2,379 | 1,279 2,409 | |
Deferred tax asset | 1,527 | 1,815 | 1,446 | |
--------- | --------- | -------- | ||
11,117 | 11,758 | 11,236 | ||
--------- | --------- | -------- | ||
Current assets | ||||
Inventories | 1,819 | 1,861 | 1,778 | |
Trade and other receivables | 2,717 | 2,505 | 2,340 | |
Cash and cash equivalents Derivative financial asset | 456 24 | 333 - | 192 11 | |
--------- | --------- | --------- | ||
5,016 | 4,699 | 4,321 | ||
--------- | --------- | ---------
| ||
Liabilities | ||||
Current liabilities | ||||
Trade and other payables Bank borrowings Finance lease obligations | (3,230) (2,415) (44) | (3,300) (1,647) (20) | (2,968) (1,685) (44) | |
Derivative financial instruments | - | (7) | - | |
Current tax liabilities | - | (17) | - | |
Other loan | (40) | - | - | |
--------- | --------- | --------- | ||
(5,729) | (4,991) | (4,697) | ||
--------- | --------- | --------- | ||
Net current liabilities | (713) | (292) | (376) | |
--------- | --------- | --------- | ||
Non-current liabilities | ||||
Retirement benefit obligation Finance lease obligations | (8,483) (45) | (9,075) (44) | (8,033) (66) | |
Deferred tax liabilities | (459) | (548) | (458) | |
--------- | --------- | --------- | ||
Net assets | 1,417 | 1,799 | 2,303 | |
--------- | --------- | ---------
| ||
Capital and reserves | ||||
Share capital | 250 | 250 | 250 | |
Retained earnings | 1,151 | 1,565 | 2,062 | |
Translation reserve | 16 | (16) | (9) | |
--------- | --------- | --------- | ||
Total equity | 1,417 | 1,799 | 2,303 | |
--------- | --------- | --------- |
The above unaudited consolidated balance sheet should be read in conjunction with the accompanying notes.
Unaudited Consolidated Statement of Changes in Shareholders' Equity
Share Capital £'000 | Retained earnings £'000 | Translation reserve £'000 | Total equity £'000 | |
At 1 January 2015 | 250 | 2,531 | 4 | 2,785 |
Total comprehensive expense recognised for the period |
- |
(906) |
(20) |
(926) |
Dividends paid | - | (60) | - | (60) |
--------- | --------- | --------- | --------- | |
At 30 June 2015 | 250 | 1,565 | (16) | 1,799 |
--------- | --------- | --------- | --------- | |
At 1 January 2016 | 250 | 2,062 | (9) | 2,303 |
Total comprehensive income / (expense) recognised for the period |
- |
(911) |
25 |
(886) |
--------- | --------- | --------- | --------- | |
At 30 June 2016 | 250 | 1,151 | 16 | 1,417 |
--------- | --------- | --------- | --------- |
The above unaudited consolidated statement of changes in shareholders' equity should be read in conjunction with the accompanying notes.
Unaudited Consolidated Statement of Cash Flows for the half year ended 30 June 2016
Half year | Half year | Year | ||
ended | ended | ended | ||
30/06/16 (Unaudited) | 30/06/15 (Unaudited) | 31/12/15 (Audited) | ||
Note | £'000
| £'000
| £'000
| |
Cash flows from operating activities | ||||
Cash (used in)/generated from operations | 4 | (390) | (439) | 171 |
UK corporation tax received | - | 88 | 93 | |
Interest paid | (21) | (12) | (38) | |
--------- | --------- | --------- | ||
Cash (used in)/generated from operating activities | (411) | (363) | 226 | |
--------- | --------- | --------- | ||
Cash flows from investing activities | ||||
Interest received | - | 1 | 1 | |
Purchase of property, plant and equipment | (35) | (40) | (198) | |
Purchase of intangible assets | (32) | (15) | (26) | |
Proceeds from sales of property, plant and equipment Acquisition of subsidiary, net of cash acquired | - (30) | 93 (2,884) | 112 (3,585) | |
--------- | --------- | --------- | ||
Net cash outflow from investing activities | (97) | (2,845) | (3,696) | |
--------- | --------- | --------- | ||
Cash flows from financing activities | ||||
Equity dividends paid Capital element of finance lease repayments | - (22) | (20) (6) | (60) (20) | |
New finance leases | - | - | 130 | |
Proceeds from borrowing | 121 | 1,274 | 1,202 | |
--------- | --------- | --------- | ||
Net cash generated from financing activities | 99 | 1,248 | 1,252 | |
--------- | --------- | ---------
| ||
Net decrease in cash and cash equivalents | (409) | (1,960) | (2,218) | |
Opening cash and cash equivalents | (291) | 1,940 | 1,940 | |
Exchange differences | 25 | (20) | (13) | |
--------- | --------- | --------- | ||
Closing cash and cash equivalents | (675) | (40) | (291) | |
--------- | --------- | --------- | ||
The above unaudited consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Notes to the Interim Report for the half year ended 30 June 2016
1. | Interim Financial Information
| |||
The unaudited condensed consolidated interim financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The interim financial statements, which are unaudited and have not been reviewed by the Company's auditors, have been prepared in accordance with the policies set out in the 2015 Annual Report and Accounts. The comparative figures for the year ended 31 December 2015 do not constitute full financial statements and have been abridged from the full accounts for the year ended on that date, on which the auditors gave an unqualified report, which did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006. The 2015 accounts have been delivered to the Registrar of Companies. The Company has chosen not to adopt IAS 34 'Interim Financial Statements'.
| ||||
2. | Exceptional items | Half year | Half year | Year |
ended | ended | ended | ||
30/06/16 (Unaudited) | 30/06/15 (Unaudited) | 31/12/15 (Audited) | ||
£'000 | £'000 | £'000 | ||
Redundancy and compensation costs | 85 | 61 | 88 | |
Acquisition of ESE | - | 194 | 193 | |
---------- | --------- | --------- | ||
85 ---------- | 255 --------- | 281 --------- | ||
The restructuring costs include salaries in lieu of notice, redundancy pay, holiday pay, social security costs and related legal expenditure. The costs relating to ESE include professional fees associated with the acquisition.
| ||||
3. | Taxation | Half year | Half year | Year |
ended | ended | ended | ||
30/06/16 (Unaudited) | 30/06/15 (Unaudited) | 31/12/15 (Audited) | ||
£'000 | £'000 | £'000 | ||
Current tax | - | - | (49) | |
Deferred tax | 23 | (69) | (145) | |
--------- | --------- | --------- | ||
23 | (69) | (194) | ||
--------- | --------- | --------- | ||
The effective tax rate is nil. | ||||
4. |
Cash (used in)/generated from operations | |||
Half year | Half year | Year | ||
Ended | ended | ended | ||
30/06/16 (Unaudited) | 30/06/15 (Unaudited) | 31/12/15 (Audited) | ||
£'000 | £'000 | £'000 | ||
Loss before tax | (424) | (408) | (632) | |
Net finance costs | 177 | 167 | 341 | |
Depreciation and amortisation | 268 | 252 | 530 | |
Profit on sale of property, plant and equipment | - | (84) | (99) | |
Pension deficit contributions | (270) | (260) | (500) | |
(Increase)/Decrease in inventories | (42) | 150 | 232 | |
(Increase)/Decrease in trade and other receivables | (390) | (155) | 29 | |
Increase/(Decrease) in trade and other payables | 291 | (101) | 270 | |
--------- | --------- | --------- | ||
Cash (used in)/generated from operating activities | (390) | (439) | 171 | |
--------- | --------- | --------- | ||
| ||||
5. Availability of Interim Report
The Interim Report will be available on the Company's website www.slingsby.com.