Last checked at 10 Aug 2017 07:00
H C Slingsby plc ("Slingsby" or "the Company")
Report for the half year ended 30 June 2017
Statement by the Chairman
Trading
In my trading update of 28 June 2017, I reported that Group sales were higher than prior year, overheads were reduced and so performance was improved in the five months to 31 May 2017.
This improved performance continued for the remainder of the period under review and I am pleased to report a profit before tax of £0.1m in the six months to 30 June 2017. This represents a significant turnaround from the loss before tax of £0.4m in the comparable period last year and is largely due to increasing sales by 7% to £9.9m (£9.3m:2016) and reducing overhead costs. The increase in sales arose primarily within the Slingsby business as a result of changes made to the Slingsby marketing strategy and materials since the management changes of 2016 and from improved sales of Slingsby products sold through our subsidiary ESE Direct Limited. Some of the overhead savings that were achieved were the result of synergies realised within the Group.
Whilst delighted to report a return to profitability in the first half of the year, we remain cautious regarding the outlook due to anticipated lower levels of activity over the summer months and the volatility experienced in the recent past.
Balance sheet
Group net assets have increased to £0.7m at 30 June 2017 from £0.4m at 31 December 2016. This is mostly due to a reduction in the liability relating to the defined benefit pension scheme from £9.6m to £9.4m despite the Company having not paid any deficit reduction contributions in the period. Scheme liabilities increased during the six months to 30 June 2017 but were more than offset by the performance of the scheme's assets.
We remain in discussion with the trustees of the Company Pension Scheme regarding a long term solution to the pension scheme deficit and continue to pay the running costs previously agreed with the trustees. Until these discussions regarding the defined benefit pension scheme are concluded, the quantum and timing of future deficit reduction payments in this regard are uncertain.
Cashflow
The Group had net debt of £1.65m at 30 June 2017 (£1.96m at 30 June 2016) which represents a small improvement from the position at 31 December 2016 of £1.7m. 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
The Board has decided not to declare an interim dividend.
People
The improved trading performance is the result of the hard work by all our employees across the Group and I would like to thank them for their help in turning the Group back to profitability. There is still a great deal to do to secure our recovery and we must ensure we do not lose focus.
Dominic Slingsby
Interim Executive Chairman and Operations Director 9 August 2017
For further information please contact:
H C Slingsby plc
Dominic Slingsby, Interim Executive Chairman 01274 535 030
Morgan Morris, Finance Director
Allenby Capital Limited
David Worlidge/Richard Short 020 3328 5656
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Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2017
|
| Half year | Half year | Year |
|
| ended | ended | ended |
|
| 30/06/17 (Unaudited) | 30/06/16 (Unaudited) | 31/12/16 (Audited) |
| Note | £'000 | £'000 | £'000
|
Revenue |
| 9,936 | 9,276 | 18,044 |
|
| --------- | --------- | --------- |
Operating profit/(loss) before exceptional items |
| 291 | (162) | (261) |
Exceptional items | 2 | - | (85) | (102) |
|
| --------- | --------- | --------- |
Operating profit/(loss) |
| 291 | (247) | (363) |
|
|
|
|
|
Finance costs |
| (168) | (177) | (369) |
|
| -------- | -------- | -------- |
Profit/(loss) before taxation |
| 123 | (424) | (732) |
Taxation | 3 | (6) | (23) | 76 |
|
| -------- | -------- | -------- |
Profit/(loss) for the period attributable to equity shareholders | 117 -------- | (447) -------- | (656) -------- | |
Basic and diluted profit/(loss) per share |
| 11.7p | (44.7p) | (65.6p) |
|
| -------- | -------- | -------- |
|
|
|
|
|
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 2017
|
| Half year | Half year | Year | |
|
| ended | ended | ended | |
|
| 30/06/17 (Unaudited) | 30/06/16 (Unaudited) | 31/12/16 (Audited) | |
|
| £'000 | £'000 | £'000 | |
|
|
|
|
| |
Profit/(loss) for the period |
| 117 | (447) | (656) | |
Items that will not be reclassified to profit or loss |
|
|
|
| |
Remeasurements of post-employment benefit obligations |
| 326
| (566)
| (1,555)
| |
Movement in deferred tax relating to retirement benefit obligation |
(152) |
102 |
280 | ||
Items that may be subsequently reclassified to profit or loss |
|
|
|
| |
Exchange adjustment |
| 5 | 25 | 31 | |
|
| -------- | -------- | -------- | |
Other comprehensive income/(expense) |
| 179 | (439) | (1,244) | |
|
|
|
|
| |
|
| -------- | -------- | -------- | |
Total comprehensive income/(expense) recognised for the period attributable to equity shareholders |
296 |
(886) |
(1,900) | ||
|
| -------- | -------- | -------- | |
|
|
|
|
| |
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 2017
|
| 30/06/17 (Unaudited) | 30/06/16 (Unaudited) | 31/12/16 (Audited) |
|
| £'000 | £'000 | £'000 |
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Property, plant and equipment |
| 5,753 | 5,986 | 5,838 |
Intangible assets Goodwill |
| 1,003 2,409 | 1,195 2,409 | 1,108 2,409 |
Deferred tax asset |
| 1,604 | 1,527 | 1,733 |
|
| --------- | --------- | -------- |
|
| 10,769 | 11,117 | 11,088 |
|
| --------- | --------- | -------- |
Current assets |
|
|
|
|
Inventories |
| 1,830 | 1,819 | 1,811 |
Trade and other receivables |
| 2,618 | 2,717 | 2,525 |
Cash and cash equivalents Current tax asset Derivative financial asset |
| 1,012 21 3 | 456 - 24 | 632 - - |
|
| --------- | --------- | --------- |
|
| 5,484 | 5,016 | 4,968 |
|
| --------- | --------- | ---------
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables Bank borrowings Finance lease obligations |
| (2,938) (2,662) (44) | (3,230) (2,415) (44) | (3,154) (2,363) (44) |
Derivative financial instruments |
| - | - | (13) |
Other loan |
| - | (40) | - |
|
| --------- | --------- | --------- |
|
| (5,644) | (5,729) | (5,574) |
|
| --------- | --------- | --------- |
Net current liabilities |
| (160) | (713) | (606) |
|
| --------- | --------- | --------- |
Non-current liabilities |
|
|
|
|
Retirement benefit obligation Finance lease obligations |
| (9,430) (15) | (8,483) (45) | (9,626) (37) |
Deferred tax liabilities |
| (465) | (459) | (416) |
|
| --------- | --------- | --------- |
|
|
|
|
|
Net assets |
| 699 | 1,417 | 403 |
|
| --------- | --------- | ---------
|
Capital and reserves |
|
|
|
|
Share capital |
| 250 | 250 | 250 |
Retained earnings |
| 422 | 1,151 | 131 |
Translation reserve |
| 27 | 16 | 22 |
|
| --------- | --------- | --------- |
Total equity |
| 699 | 1,417 | 403 |
|
| --------- | --------- | --------- |
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 2016 | 250 | 2,062 | (9) | 2,303 |
Total comprehensive expense recognised for the period |
- |
(911) |
25 |
(886) |
|
|
|
|
|
| --------- | --------- | --------- | --------- |
At 30 June 2016 | 250 | 1,151 | 16 | 1,417 |
| --------- | --------- | --------- | --------- |
|
|
|
|
|
At 1 January 2017 | 250 | 131 | 22 | 403 |
Total comprehensive income recognised for the period |
- |
291 |
5 |
296 |
| --------- | --------- | --------- | --------- |
At 30 June 2017 | 250 | 422 | 27 | 699 |
| --------- | --------- | --------- | --------- |
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 2017
|
| Half year | Half year | Year |
|
| ended | ended | ended |
|
| 30/06/17 (Unaudited) | 30/06/16 (Unaudited) | 31/12/16 (Audited) |
| Note | £'000
| £'000
| £'000
|
Cash flows from operating activities |
|
|
|
|
Cash generated from/(used in) operations | 4 | 184 | (390) | (84) |
UK corporation tax received |
| 4 | - | 23 |
Interest paid |
| (39) | (21) | (61) |
|
| --------- | --------- | --------- |
Cash generated from/(used in) operating activities |
| 149 | (411) | (122) |
|
| --------- | --------- | --------- |
Cash flows from investing activities |
|
|
|
|
Purchase of property, plant and equipment |
| (33) | (35) | (98) |
Purchase of intangible assets |
| (20) | (32) | (40) |
Proceeds from sales of property, plant and equipment Payment in respect of ESE acquisition | 2 - | - (30) | 51 (30) | |
|
| --------- | --------- | --------- |
Net cash outflow from investing activities |
| (51) | (97) | (117) |
|
| --------- | --------- | --------- |
Cash flows from financing activities |
|
|
|
|
Capital element of finance lease repayments |
|
(22) |
(22) |
(57) |
New finance leases |
| - | - | 27 |
Proceeds from borrowing |
| 65 | 121 | 50 |
|
| --------- | --------- | --------- |
Net cash generated from financing activities |
| 43 | 99 | 20 |
|
| --------- | --------- | ---------
|
Net increase/(decrease) in cash and cash equivalents | 141 | (409) | (219) | |
Opening cash and cash equivalents |
| (479) | (291) | (291) |
Exchange differences |
| 5 | 25 | 31 |
|
| --------- | --------- | --------- |
Closing cash and cash equivalents |
| (333) | (675) | (479) |
|
| --------- | --------- | --------- |
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 2017
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 2016 Annual Report and Accounts. The comparative figures for the year ended 31 December 2016 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 2016 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 |
|
| 30/06/17 (Unaudited) | 30/06/16 (Unaudited) | 31/12/16 (Audited) |
|
| £'000 | £'000 | £'000 |
|
|
|
|
|
| Redundancy and compensation costs | - | 85 | 102 |
|
|
|
|
|
|
| ---------- | --------- | --------- |
|
| - ---------- | 85 --------- | 102 --------- |
| The restructuring costs include salaries in lieu of notice, redundancy pay, holiday pay, social security costs and related legal expenditure.
| |||
3. | Taxation | Half year | Half year | Year |
|
| ended | ended | ended |
|
| 30/06/17 (Unaudited) | 30/06/16 (Unaudited) | 31/12/16 (Audited) |
|
| £'000 | £'000 | £'000 |
|
|
|
|
|
| Current tax | (21) | - | (27) |
| Deferred tax | 27 | 23 | (49) |
|
| --------- | --------- | --------- |
|
| 6 | 23 | (76) |
|
| --------- | --------- | --------- |
| The effective tax rate is nil. | |||
4. |
Cash generated from/(used in) operations | |||
| Half year | Half year | Year | |
| ended | ended | ended | |
| 30/06/17 (Unaudited) | 30/06/16 (Unaudited) | 31/12/16 (Audited) | |
| £'000 | £'000 | £'000 | |
|
|
|
| |
| Profit/(loss) before tax | 123 | (424) | (732) |
| Net finance costs | 168 | 177 | 369 |
| Depreciation and amortisation | 243 | 268 | 527 |
| Profit on sale of property, plant and equipment | (2) | - | (5) |
| Pension deficit contributions | - | (270) | (270) |
| (Increase)/Decrease in inventories | (19) | (42) | (33) |
| (Increase)/Decrease in trade and other receivables | (101) | (390) | (169) |
| (Decrease)/Increase in trade and other payables | (228) | 291 | 229 |
|
| --------- | --------- | --------- |
| Cash generated from/(used in) operating activities | 184 | (390) | (84) |
|
| --------- | --------- | --------- |
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5. Availability of Interim Report
The Interim Report will be available on the Company's website www.slingsby.com.