Last checked at 4 Aug 2022 07:00
The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended. With the publication of this announcement, this information is now considered to be in the public domain.
4 August 2022
H C Slingsby plc
("Slingsby" or "the Company")
Report for the half year ended 30 June 2022
Statement by the Chairman
Trading
In my trading update of 21 June 2022, I reported that Group sales in the five months to 31 May 2022 were 8% higher than prior year but that gross margin was lower, meaning that unaudited profit before tax was £0.17m compared to £0.07m in the prior year. We were cautious regarding the outlook due to the significant uncertainty remaining from the aftermath of the coronavirus pandemic, the impact that high inflation may have on the UK economy and the ongoing conflict in the Ukraine.
I am pleased to report that Group sales in the six months to 30 June 2022 were 10% higher than in the same period in 2021. This increase in sales offset the continuation in the trend regarding gross margin and higher overhead costs and led to an unaudited profit before tax of £0.24m in the six months ended 30 June 2022 compared to an unaudited profit before tax of £0.1m in the same period in 2021.
The market remains competitive, and it remains unclear what impact the aforementioned factors will have on demand going forward. The Group continues to experience cost inflation across most areas of its business (goods, freight and overheads) and there is a risk that the UK economy will enter recession in H2 2022. There is also heightened potential for credit related issues should customers become insolvent.
Balance sheet
The Group had net assets of £4.68m at 30 June 2022 (£1.96m at 30 June 2021) compared to net assets of £2.26m at 31 December 2021. This improvement is mostly due to a decrease in the liability relating to the defined benefit pension scheme of £2.2m (after associated deferred tax). The retirement benefit obligation decreased during the six months to 30 June 2022 due to an increase in the discount rate used by the scheme actuary. This has the impact of decreasing scheme liabilities, which outweighed a decrease in the value of scheme assets. The Company made deficit reduction contributions totalling £159,000 in the six months to 30 June 2022 in line with the agreement with the scheme's Trustee.
Cashflow
The Group had net cash of £0.5m at 30 June 2022 (£0.8m at 30 June 2021) compared to £0.3m at 31 December 2021. The Group continues to operate within its existing banking facilities and the Directors continue to believe that the Group has additional funding options available should the need arise.
Dividend
Due to the uncertain outlook, the Board has decided not to declare an interim dividend. It remains the Board's intention to re-commence dividend payments to shareholders as soon as it is prudent to do so.
People
We would like to thank our employees for their hard work and flexibility during continued challenging times.
Dominic Slingsby
Interim Executive Chairman and Operations Director
For further information please contact:
H C Slingsby plc
Dominic Slingsby, Interim Executive Chairman 01274 535 030
Morgan Morris, Group Chief Executive
Allenby Capital Limited (Nominated Adviser and Broker)
David Worlidge/George Payne 020 3328 5656
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Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2022
Half year | Half year | Year | ||
ended | ended | ended | ||
30/06/22 (Unaudited) | 30/06/21 (Unaudited) | 31/12/21 (Audited) | ||
Note | £'000 | £'000 | £'000
| |
Revenue | 10,977 | 9,950 | 19,824 | |
--------- | --------- | --------- | ||
Operating profit before exceptional items | 316 | 156 | 410 | |
Exceptional items | - | - | 530 | |
Finance costs | (72) | (61) | (118) | |
-------- | -------- | -------- | ||
Profit before taxation | 244 | 95 | 822 | |
Taxation | 2 | (62) | (26) | (255) |
-------- | -------- | -------- | ||
Profit for the period attributable to equity shareholders | 182 -------- | 69 -------- | 567 -------- | |
Basic and diluted weighted average earnings per share | 17.3p | 6.6p | 54.0p | |
-------- | -------- | -------- | ||
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 2022
Half year | Half year | Year |
| |||
ended | ended | ended |
| |||
30/06/22 (Unaudited) | 30/06/21 (Unaudited) | 31/12/21 (Audited) |
| |||
| £'000 | £'000 | £'000 |
| ||
| ||||||
Profit for the period | 182 | 69 | 567 |
| ||
| -------- | -------- | -------- |
| ||
Items that will not be reclassified to profit or loss |
|
|
|
| ||
Remeasurements of post-employment benefit obligations | 2,985
| 842
| (3)
|
| ||
Movement in deferred tax relating to retirement benefit obligation |
(746) |
(160) |
491 |
| ||
| -------- | -------- | -------- |
| ||
Other comprehensive income | 2,239 | 682 | 488 |
| ||
| ||||||
-------- | -------- | -------- |
| |||
Total comprehensive income recognised for the period attributable to equity shareholders |
2,421 |
751 |
1,055 |
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-------- | -------- | -------- |
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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 2022
30/06/22 (Unaudited) | 30/06/21 (Unaudited) | 31/12/21 (Audited) | ||
£'000 | £'000 | £'000 | ||
Assets | ||||
Non-current assets | ||||
Property, plant and equipment | 5,332 | 4,962 | 5,377 | |
Intangible assets | 319 | 453 | 386 | |
Goodwill | 700 | 700 | 700 | |
Deferred tax asset | 1,216 | 1,367 | 1,985 | |
--------- | --------- | -------- | ||
7,567 | 7,482 | 8,448 | ||
--------- | --------- | -------- | ||
Current assets | ||||
Inventories | 2,806 | 2,164 | 2,330 | |
Trade and other receivables | 3,120 | 2,658 | 2,764 | |
Cash and cash equivalents Derivative financial asset | 2,229 3 | 2,076 2 | 1,999 7 | |
--------- | --------- | --------- | ||
8,158 | 6,900 | 7,100 | ||
| --------- | --------- | ---------
| |
Liabilities | ||||
Current liabilities | ||||
Trade and other payables Bank borrowings Lease obligations | (3,579) (1,764) (15) | (3,172) (1,275) (34) | (2,884) (1,653) (32) | |
Current tax liabilities | (96) | (150) | (56) | |
--------- | --------- | --------- | ||
| (5,454) | (4,631) | (4,625) | |
| --------- | --------- | --------- | |
Net current assets | 2,704 | 2,269 | 2,475 | |
| --------- | --------- | --------- | |
Non-current liabilities | ||||
Retirement benefit obligation Lease obligations | (4,865) - | (7,194) (15) | (7,938) - | |
Deferred tax liabilities | (722) | (583) | (722) | |
--------- | --------- | --------- | ||
Net assets | 4,684 | 1,959 | 2,263 | |
| --------- | --------- | ---------
| |
Capital and reserves | ||||
Share capital | 262 | 262 | 262 | |
Share premium | 24 | 24 | 24 | |
Retained earnings | 4,398 | 1,673 | 1,977 | |
--------- | --------- | --------- | ||
Total equity | 4,684 | 1,959 | 2,263 | |
--------- | --------- | --------- | ||
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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 | Share premium £'000 | Retained earnings £'000 | Total equity £'000 | |
|
|
|
| |
At 1 January 2021 | 262 | 24 | 922 | 1,208 |
Total comprehensive income recognised for the period |
- | - |
751 |
751 |
| --------- | --------- | --------- | --------- |
At 30 June 2021 | 262 | 24 | 1,673 | 1,959 |
--------- | --------- | --------- | --------- | |
At 1 January 2022 | 262 | 24 | 1,977 | 2,263 |
Total comprehensive income recognised for the period |
- | - |
2,421 |
2,421 |
--------- | --------- | --------- | --------- | |
At 30 June 2022 | 262 | 24 | 4,398 | 4,684 |
--------- | --------- | --------- | --------- |
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 2022
Half year | Half year | Year |
| ||
ended | ended | ended |
| ||
30/06/22 (Unaudited) | 30/06/21 (Unaudited) | 31/12/21 (Audited) |
| ||
Note | £'000
| £'000
| £'000
|
| |
Cash flows from operating activities |
| ||||
Cash generated from operations | 3 | 228 | 590 | 331 |
|
UK corporation tax paid | - | - | (150) |
| |
Interest received | - | 1 | 1 |
| |
--------- | --------- | --------- |
| ||
Cash generated from operating activities | 228 | 591 | 182 |
| |
--------- | --------- | --------- |
| ||
Cash flows from investing activities |
| ||||
Purchase of property, plant and equipment | (101) | (44) | (100) |
| |
Purchase of intangible assets | - | (3) | (3) |
| |
Proceeds from sales of property, plant and equipment | 9 | - | 28 |
| |
--------- | --------- | --------- |
| ||
Net cash outflow from investing activities | (92) | (47) | (75) |
| |
--------- | --------- | --------- |
| ||
Cash flows from financing activities |
| ||||
Capital element of lease payments |
(17) |
(18) |
(36) |
| |
Increase/(decrease) in overdraft | 111 | (231) | 147 |
| |
--------- | --------- | --------- |
| ||
Net cash generated from/(used in) financing activities | 94 | (249) | 111 |
| |
--------- | --------- | ---------
|
| ||
Net increase in cash and cash equivalents | 230 | 295 | 218 |
| |
| |||||
Opening cash and cash equivalents | 1,999 | 1,781 | 1,781 | ||
| |||||
--------- | --------- | --------- |
| ||
Closing cash and cash equivalents | 2,229 | 2,076 | 1,999 |
| |
--------- | --------- | --------- |
| ||
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| ||||
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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 2022
1. | Interim Financial Information
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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 2021 Annual Report and Accounts. The comparative figures for the year ended 31 December 2021 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. They did not contain any statement under Section 498 of the Companies Act 2006. The 2021 accounts have been delivered to the Registrar of Companies. The Company has chosen not to adopt IAS 34 'Interim Financial Statements'.
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2. | Taxation | Half year | Half year | Year |
ended | ended | ended | ||
30/06/22 (Unaudited) | 30/06/21 (Unaudited) | 31/12/21 (Audited) | ||
£'000 | £'000 | £'000 | ||
|
|
| ||
Current tax | 40 | - | 56 | |
Deferred tax | 22 | 26 | 199 | |
--------- | --------- | --------- | ||
62 | 26 | 255 | ||
--------- | --------- | --------- | ||
The effective tax rate is 25%. | ||||
3. |
Cash generated from operations | |||
Half year | Half year | Year | ||
ended | ended | ended | ||
30/06/22 (Unaudited) | 30/06/21 (Unaudited) | 31/12/21 (Audited) | ||
£'000 | £'000 | £'000 | ||
|
|
| ||
Profit before tax | 244 | 95 | 822 | |
Net finance costs | 72 | 61 | 118 | |
Depreciation and amortisation | 215 | 234 | 461 | |
Defined benefit pension scheme contributions paid Property impairment reversal | (159) - | (199) - | (357) (530) | |
Profit on sale of property, plant and equipment | (9) | - | (17) | |
(Increase)/decrease in inventories | (476) | 60 | (107) | |
Increase in trade and other receivables | (352) | (27) | (137) | |
Increase in trade and other payables | 693 | 366 | 78 | |
--------- | --------- | --------- | ||
Cash generated from operating activities | 228 | 590 | 331 | |
--------- | --------- | --------- | ||
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4. Availability of Interim Report
The Interim Report will be available on the Company's website www.slingsby.com.