REG-PHSC Plc: Final Results for the year ended 31 March 2022
02/08/2022 07:15
2 August 2022 (null)
PHSC PLC
(“PHSC”, the “Company” or the “Group”)
Final Results for the year ended 31 March 2022
Availability of Annual Report and Notice of Annual General Meeting
PHSC (AIM: PHSC), a leading provider of health, safety, hygiene and
environmental consultancy services and security solutions to the public and
private sectors, announces its audited results for its financial year ended 31
March 2022.
Financial Highlights
• Underlying EBITDA of £0.274m compared to £0.505m in the prior year
• Statutory loss after tax of £0.631m compared to a profit after tax
of £0.087m in the prior year, mainly due to writing off goodwill in respect
of the Security Division
• Security Division impairment plus other goodwill impairments
totalling £0.793m
• Group sales revenue of £3.571m, up from £3.289m in the prior year
• Income augmented by £30k of pandemic-related grant funding, £411k
less than the prior year
• Group net assets declined to £3.513m following goodwill impairments
• Statutory loss per share of 4.76p compared to earnings per share of
0.60p in the prior year
• 2,830,238 ordinary shares bought back and subsequently cancelled
(post period end), representing 19% of those formerly in issue
• Cash reserves of £0.649m at year end post completion of share
buybacks, down from £1.237m for the prior year
• Final dividend of 0.5p proposed, making a total of 1.0p for the year
matching the prior year’s total
31.3.22 31.3.21
£ £
(Loss)/profit before tax (577,798) 189,988
Less: interest received (388) (999)
Add: depreciation 58,812 65,619
Add: impairment of B2BSG Solutions Limited goodwill 676,178 200,000
Add: impairment of Inspection Services (UK) Limited goodwill 117,240 -
Add: impairment of RSA Environmental Health Limited goodwill - 50,000
Underlying EBITDA* 274,044 504,608
* - Underlying EBITDA is calculated as earnings before interest, tax,
depreciation, impairment charges and non-recurring costs. This is used by
the board as a measure of underlying trading and has been provided to assist
shareholders in understanding the Group’s trading activities.
Annual General Meeting and Availability of full 2022 Annual Report
This year’s annual general meeting (AGM) will be held at 10.00 a.m. on
Thursday, 29 September 2022 at The Old Church, 31 Rochester Road, Aylesford,
Kent ME20 7PR.
The full annual report and accounts for the financial year to 31 March 2022
and notice of AGM are expected to be posted to shareholders on or around 2
August 2022 and will shortly be made available to download from the
Company’s website at: www.phsc.plc.uk.
Dividend
The Company confirms that, subject to shareholder approval at the AGM, the
final dividend of 0.5p will be payable on 14 October 2022 to shareholders on
the register on 30 September 2022.
For further information please contact:
PHSC plc
Stephen
King
Tel: 01622 717 7000
Stephen.king@phsc.co.uk
www.phsc.plc.uk
Strand Hanson Limited (Nominated Adviser)
James Bellman / Matthew
Chandler
Tel: 020 7409 3494
Novum Securities Limited (Broker)
Colin
Rowbury
Tel: 020 7399 9427
About PHSC
PHSC, through its trading subsidiaries, Personnel Health & Safety Consultants
Limited, RSA Environmental
Health Limited, QCS International Limited, Inspection Services (UK) Limited
and Quality Leisure Management Limited, provides a range of health, safety,
hygiene, environmental and quality systems consultancy and training services
to organisations across the UK. In addition, B2BSG Solutions Limited offers
innovative security solutions including tagging, labelling and CCTV.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawl) Act 2018 (as amended).
CHIEF EXECUTIVE OFFICER’S REPORT
On behalf of the board, I am pleased to present my review of the Group’s
progress during the financial year 2021-22 as it left the pandemic behind and
transitioned towards a more normal trading pattern. During this reporting
period we successfully completed our second share buyback programme, the
initial programme having been documented in last year’s report as a post
balance sheet event. Further details are set out later in this report along
with specific details on each subsidiary’s performance.
General business review and outlook
The overall uplift in sales revenue is welcome, and to a large extent offset
the significant reduction in government grants associated with the pandemic.
However, the costs associated with delivering our services greatly increased.
This was due in part to the resumption of routine expenditure on office
materials, travel and the like which had been largely suppressed during
lockdown. In addition, the return to 100% of salary for those on the
Coronavirus Job Retention Scheme (CJRS) had a sizeable impact. Considering
performance in the round, the board is pleased that the Group has returned to
a position where trading is profitable and cash generative.
Post-pandemic it became clear to the board that the market for products and
services provided by the Security Division had been badly affected by changes
in shopping habits and an acceleration of the shift toward on-line purchasing.
With its predominantly retail sector client base, this left B2BSG Solutions
Limited (B2BSG) exposed to greatly reduced sales from a diminishing number of
clients. Accordingly, the board believed it prudent and appropriate to write
off the carrying value of this division whilst continuing to assist management
in their attempts to turn its fortunes around. Similarly, a view was taken
that stock values should be impaired in recognition of the lower demand for
electronic article surveillance (EAS) equipment. The majority of this product,
nevertheless, remains current and serviceable. It is worth noting that B2BSG
has reported a pre-management charges profit of approximately £10k for Q1 of
the current financial year which is an improvement on the loss-making
situation at the same stage in 2021-22.
As has been explained previously, the Security Division is affected by
exchange rate fluctuations, with all EAS equipment being sourced from abroad
and paid for in Euros or US dollars. Exchange rate movements have seen a
general weakening of Sterling versus the USD with rates recently touching a
two-year low.
Our Systems Division saw both revenue and profits rise by around 50% in
response to the lifting of restrictions in Scotland where it is based, and the
ability to return to face-to-face training delivery for those clients that
preferred this.
The Safety Division performed very well and benefited from a large contract
for COVID-19 testing which was on a commission basis. This is explained
further below with respect to the results for Personnel Health and Safety
Consultants Limited (PHSCL).
It is noted that the Group’s cash reserves at the financial year end
(£0.649m) were around half that of 2020-21 (£1.237m) despite the Group being
cash-generative in terms of normal trading. Such reduction is due to the
successful implementation of our share buyback programmes resulting in over
2.8m ordinary shares being acquired into treasury and subsequently cancelled
post period end. The total spent on buybacks during the year was circa £0.65m
inclusive of legal fees and brokerage.
Now that we have a well-established and proven mechanism, the board is again
seeking shareholder approval for a replenished share buyback authority at the
Company’s forthcoming AGM. No decision has been made as to whether or
when, if duly approved at the AGM, any further buyback programme will take
place. This will be determined by periodically assessing the Group’s cash
position and any anticipated call on resources for other purposes.
Accordingly, the proposed renewed authority simply provides the board with
maximum flexibility that it may or may not choose to exercise.
The Group’s current cash position is approximately £0.718m which is more
than sufficient to meet its needs for the foreseeable future and to cover the
proposed dividend. An advantage of having fewer shares in issue is that the
cash required to maintain the dividend at its current level per share is
around 20% lower than it would otherwise have been. In addition to
maintaining a strong bank balance, HSBC Bank plc provides us with a facility
of £50,000 to draw upon should the need arise which is due for renewal in
October 2022. The board expects to renew the facility at its present level but
does not currently anticipate having to draw upon it.
The Group confirms that it did not apply for any Government loan monies
available to support UK businesses through the pandemic.
Net asset value
As stated in the general business review section above, the board has written
off the entire carrying value of the Security Division (B2BSG) as a
consequence of the decline in demand for the goods and services that it
provides and a highly competitive marketplace. This impairment has resulted in
a reduction in assets of £0.676m. From a routine review of the carrying value
of the other subsidiaries, the board has determined that Inspection Services
(UK) Ltd is overvalued and should also be written down by approximately
£0.117m. No other subsidiaries are believed to be held at inflated values
based on their prospects for the current year and the foreseeable future.
The year-end consolidated net assets, further to the goodwill impairments and
expenditure on share buybacks, total approximately £3.513m. Based on the
number of shares currently in issue this equates to approximately 30p per
ordinary share versus a prevailing mid-market price of approximately 26.5p.
The board welcomes the narrowing of the gap between the Company’s asset
value and market share price.
Outlook
The Group is not immune from the uncertainty in both the domestic and
macroeconomic environments. Costs have been increasing across all areas, with
notable uplifts to the cost of accommodation, energy supply, and travel
including fuel. Management have sought to help defray some of the impact on
employees by awarding generous pay rises albeit below the headline figure for
inflation. We have generally found that the market for both administrative
staff and fee-earning professionals has become far more competitive, which has
raised the expectations of current and prospective new employees. There is
limited scope to pass on the effects of these additional costs to our clients,
resulting in margins being squeezed.
Despite the difficult trading environment, we are confident that the Group can
remain profitable and cash-generative throughout the year. The management team
are always seeking ways to work more productively and to reduce costs to the
lowest level reasonably practicable.
Trading update
According to the most recent set of management accounts (unaudited), in Q1 the
Group generated revenue of approximately £0.854m and EBITDA of approximately
£96k. This compares well with the Q1 position last year which showed income
of approximately £0.926m and EBITDA of approximately £72k.
Dividends
A total dividend of 1.0p per ordinary share (£146,772) was paid in respect of
the financial year ended 31 March 2021. An interim dividend of 0.5p in
respect of the financial year ended 31 March 2022 was paid in February 2022
and, subject to shareholder approval, a final dividend of 0.5p to be paid from
earnings from the financial year ended 31 March 2022 is proposed for payment
in October 2022, thereby matching last year’s total. Following the share
buyback programmes completed in 2021-22, the cost of the final dividend will
fall approximately 19% from £73,386 to £59,235.
PERFORMANCE BY TRADING SUBSIDIARY
The Group currently measures the following key performance indicators (KPIs).
Total revenues
Total revenues are reviewed each month across the Group to provide the board
with a ready measure of how well the Group and underlying businesses are
performing relative to historical data. It enables any trend to be detected,
understood and acted upon as appropriate. Consolidated Group revenues
(excluding government grant funding) for the year increased by 8.5%.
Earnings before interest, taxation, depreciation, amortisation and
non-recurring costs (underlying EBITDA)
The Group’s underlying EBITDA decreased from £504,608 in 2020-21 to
£274,044 in 2021-22 with the improvement in business activity failing to
outweigh the reduction in COVID-19 support funding which dropped from
£441,125 to £29,527.
Staff turnover
Staff turnover is monitored as the key asset of each subsidiary is its
workforce. Recruiting replacement staff is an expensive task and it is not
always possible to compensate for the specialised knowledge that may be lost
when an employee departs. During the year, five people left the employment
of the Group and five people joined, resulting in the total number of
employees at the year-end remaining unchanged at 44.
Pre-tax profit/(loss) per subsidiary before Group management charges
Profit before tax and management charges is reviewed by each subsidiary and by
the board every month. Each subsidiary director provides a commentary to
enable the board to establish whether intervention of any kind is
appropriate.
A summary of the results and activities of our trading subsidiaries is set out
below. Where relevant, government grant funding is excluded from revenues, but
included in profits. Performance is based on those factors within a subsidiary
director’s control, so results are shown exclusive of management charges and
taxation and any impairment judged necessary. The Group covers its own
management costs by levying a charge on each subsidiary and derives other
income through the receipt of dividends from its subsidiaries.
B2BSG Solutions Limited (B2BSG)
* 2022: revenues of £749,200 yielding a loss of £79,200 after a slow-moving
stock write down of £55,000
* 2021: revenues of £1,136,600 yielding a profit of £13,800
The COVID-19 pandemic that drastically affected the previous year continued to
have an adverse impact, with many of B2BSG’s clients having downsized their
operations or ceased trading entirely.
High street shops were able to reopen in mid-April 2021 in England, with some
variation elsewhere in the UK. This enabled the Company to bring staff back to
work and to cease reliance on the CJRS. Only £3k of CJRS funding was
received in 2021-22 representing a significant reduction from around £133k in
the prior year.
Sales revenues came in at £749k compared with £1.137m in the previous year.
There was an EBITDA loss of £65k for the year, after discounting exceptional
items (£7.6k of redundancy pay and £3.4k of bad debts) and before management
charges. The £3.4k of bad debts compares favourably with debts of £22k
written off in the previous year.
Employment costs were lower, as staff numbers were reduced. Some office space
was returned to the relevant landlord and a lower rental charge was incurred.
One notable area where costs rose was in carriage, where shipping fees went up
in some cases by a factor of ten, due to a worldwide shortage of capacity.
All of the Company’s products are imported.
Management expectations are for B2BSG to hold its own in 2022-23 and to see an
improvement in the following year. As stated earlier, Q1 performance has seen
a profit of around £10k per the unaudited management accounts. Ultimately,
the performance of the business will be largely dependent on the fortunes of
the retail sector and management’s ability to negotiate shocks to the global
economy. Any further deterioration in foreign exchange rates will harm the
Company’s prospects.
Inspection Services (UK) Limited (ISL)
* 2022: revenues of £186,600 yielding a profit of £8,700
* 2021: revenues of £213,900 yielding a profit of £31,500
ISL achieved revenues of £186,600 which is a reduction of £27,300 versus the
prior year figure of £213,900. This led to a reduced EBITDA before management
charges of £18,600 compared to £41,300 in 2020-21. Despite the lower sales,
costs remained at the same level as the previous year with notable rises in
vehicle and travel expenses. Hotel accommodation in particular was more
expensive than expected. This was caused by higher prices following the
lifting of COVID-19 lockdown restrictions along with the failure of providers
to pass on the effects of a reduction in VAT to clients.
Approximately two-thirds of the Company’s business is placed by insurance
brokers on behalf of their clients, with the remaining third being sales made
directly to clients. When work is introduced through an insurance broker, a
commission becomes payable.
There have been a small number of former clients who ceased trading during the
pandemic or disposed of some work equipment which led to a reduction in the
requirement to conduct examinations. It has not been possible to make up the
shortfall with new clients at this stage.
Personnel Health & Safety Consultants Limited (PHSCL)
* 2022: revenues of £1,283,100 yielding a profit of £351,000
* 2021: revenues of £968,900 yielding a profit of £498,000
Turnover exceeded £1m for the first time in several years. This was as a
result of a one-off contract with an invoice value of over £400k for
supporting clients in the provision of COVID-19 testing services. The work was
carried out by external medical specialists and generated a 5% premium for
PHSCL. The profit of £351,000 was lower than the previous year and
reflected an increased use of subcontractors. The team worked incredibly
hard for the first three quarters of the year, but staff utilisation was lower
in Q4 for a number of reasons that have subsequently been addressed and
rectified by management. The Safety Division is focussing on acquiring an
online management system to support its clients in monitoring their compliance
status, particularly those with multiple sites. This should support the sales
and marketing functions who will be able to pitch for larger contracts where
an online offering is increasingly becoming a prerequisite of the tender
process.
QCS International Limited (QCS)
* 2022: revenues of £724,100 yielding a profit of £189,600
* 2021: revenues of £500,700 yielding a profit of £121,100
Despite the pandemic placing varied and changing constraints on the business,
the year saw sales and profits approaching levels last achieved prior to the
health emergency. Whilst training was impacted considerably, consultancy
work has been buoyant and has made a significant contribution towards
compensating for lost training revenue. By the end of the financial year,
training was beginning to approach previous levels, suggesting that the trend
is towards more normal operating conditions.
Consultancy activity for the year was above normal (pre-pandemic) levels.
This was due to a combination of new client activity, continued interest in
the UK Responsible Person services for medical devices, and excellent levels
of repeat business. Sales for consultancy approached £400,000 for the year
ended 31 March 2022, which is a record performance for QCS.
The pandemic caused revenue from public (face-to-face) training to drop to
£112,000 from the previous year as there were times during 2021-22 when
training was constrained. Nevertheless, income generated from those periods
when training was possible resulted in income more than doubling year on year
to £237,000. By Q4 it was pleasing to note that training income had fully
recovered.
In January 2022, the Company lost the services of one of its key consultants
who specialised in medical device work and recruitment of a possible
replacement remains ongoing in what is a difficult and competitive market. A
new consultant was engaged at the very end of the financial year to support
broader quality/environmental and health and safety services.
Quality Leisure Management Limited (QLM)
* 2022: revenues of £323,600 yielding a profit of £100,900
* 2021: revenues of £234,300 yielding a profit of £99,700
QLM started the financial year with most, if not all, support service and
retained clients either closed or heavily restricted under COVID-19
legislation. This severely restricted the generation of additional income from
activities such as auditing. These restrictions continued throughout the
period and, whilst easing gradually, restrictions of some kind remained in
place for most of the year.
The health and safety support service was the least affected income stream.
Guidance in respect of changes in COVID-19 legislation and best practice were
topical questions together with the recommissioning of equipment and
facilities.
Profitability improved at the start of Q3 as facilities progressively reopened
and restrictions were relaxed to varying degrees. Auditing and training became
the priority as previously closed or restricted facilities began to focus on
ensuring normal health and safety standards were in place and that staff were
competent to achieve or maintain them. Audits were and continue to be, a
strong part of the business.
Following the development of videoconferencing courses last year, this
delivery method remains popular. In addition to reducing staff travel time and
costs recharged to clients, it enables greater accessibility to those
companies only requiring a small number of participants.
QLM has been involved as an expert witness in several legal cases in recent
years. With the legal system returning to relative normality post-pandemic,
this aspect of the business remains active.
RSA Environmental Health Limited (RSA)
* 2022: revenues of £304,000 yielding a profit of £53,600
* 2021: revenues of £235,100 yielding a profit of £57,400
Revenue was up by 29% to £304,000 despite the first half of the financial
year continuing to be affected by the COVID-19 pandemic and associated
lockdowns. The pandemic severely affected revenue in Q1 and Q2 because
RSA’s largest marketplace is the education sector. Most of the school-based
income reflects a two-year audit and consultancy cycle. With lockdowns and
effective school closures in the corresponding period in 2020-21, no new
contracts were set up at that time, so no second-year payments fell due. It
was not until Q3 that the cycle of second payments started to come through. In
other areas there has been a slow return to normal operations. As
restrictions eased, audits were booked for our NHS and hospitality clients and
in the latter part of the year revenue from these sectors has returned to
pre-pandemic levels with the employed staff working at full capacity.
In previous years, the focus of the Company had been on the SafetyMARK brand,
providing safety services to the school sector. Efforts have been made to
diversify revenue streams and this is resulting in a more even spread of
income across the five main services namely, training, SafetyMARK, health and
safety consultancy, health and safety advisory services and food safety
consultancy. Almost £100,000 of the total revenues was generated by the
combined health and safety streams, showing the success of the diversification
strategy.
SafetyMARK services saw revenues recover to finish above expectations at
£82,000. For the latter part of the year, revenues were above previous years,
and this strong demand continues.
Food safety consultancy has seen a return to pre-pandemic levels of demand.
Recently, some clients have increased the level of service required because of
the upturn in fortunes for the wider hospitality sector.
PHSC plc
* 2022: net loss of £409,200 before management charges, exceptional costs,
interest and dividends received
* 2021: net loss of £382,400 before management charges, exceptional costs,
interest and dividends received
The Company incurs costs on behalf of the Group and does not generate any
income; the costs relate to running an AIM quoted Group. The 7% increase in
the net loss is due to the reduction in CJRS funding from £45,300 in 2020-21
to £3,700 in 2021-22.
PRINCIPAL RISKS AND UNCERTAINTIES
Pandemic
The financial impact of the coronavirus pandemic eased in the second half of
the financial year with business activity starting to return to pre-pandemic
levels. Inevitably, there are legacy impacts in particular on the high street
where consumers’ shopping habits have shifted towards on-line ordering, and
this is a concern to the security division where retail outlets form a
significant part of its customer base. Conversely, the systems and safety
divisions are experiencing a rebound in activity as clients catch up on
projects that were deferred or cancelled in the previous year. The Group’s
ability to deliver services remotely as an alternative to a face-to-face
offering is more appealing to some customers and this alternative continues to
be offered where appropriate.
Regulatory/Marketplace
Approximately 50% of the Group’s work involves assisting organisations with
the implementation of measures to meet regulatory requirements relating to
health and safety at work. If the regulatory burden was to be substantially
lightened, for example if the government embarked upon a programme of radical
deregulation, there could be less demand for the Group’s services. Changes
to the operation of the employer’s liability insurance system, as proposed
in some quarters, could reduce the incentive for organisations to buy in
claims-preventive services such as health and safety advice. In mitigation
of these risks, the board has diversified the Group’s range of offerings,
for example, through investing in its Systems Division and is exploring
non-regulatory areas of environmental work to add to the current portfolio of
services.
The Group’s Security Division works almost exclusively in the retail sector,
and this has continued to suffer as a result of weak consumer demand on the
high street and the move towards on-line purchasing which accelerated during
the COVID-19 pandemic. Any further material deterioration in the retail
sector and specifically in B2BSG’s client base would have a significant
negative effect on the Company’s and hence the Group’s prospects. To
mitigate any future negative effects, the Group has written off the investment
value of its Security Division and has made a significant financial provision
against the value of stock held in its warehouse.
Technological
The Group’s website is a primary source of new business. If the website
became inaccessible for protracted periods, or was subject to “hacking”,
this may prejudice the opportunity to obtain new business. Additionally, the
increase in the use of the internet for satisfying business requirements may
lead to a reduction in demand for face-to-face consultancy services and the
number of training courses commissioned may be affected by moves towards
screen-based interactive learning.
The subject of IT security is regularly reviewed by the board to ensure that
appropriate strategies are in place. The Aylesford based businesses (PHSC plc,
PHSCL, ISL) have obtained certification to Cyber Essentials standard and all
staff across the Group have participated in on-line training to reduce the
risk of falling victim to phishing and other such scams. All head office
data is backed up to the Cloud and removeable hard drives attached to the
physical server are rotated on a daily basis.
Personnel
Generally, there is an excess of demand over supply for health and safety
professionals. Those with sufficient qualifications and experience to be
suitable for consultancy roles are in the minority. This has the combined
effect of making it difficult for the Group to source suitable personnel and
having to offer higher remuneration packages to attract them. The Group is
dependent upon its current executive management team. Whilst it has entered
into contractual arrangements with the aim of securing the services of these
personnel, the retention of their services cannot be guaranteed.
Accordingly, the loss of any key member of management of the Group may have an
adverse effect on the future of the Group’s business. The Group and each
subsidiary have contingency plans in place in the event of incapacity of key
personnel.
Geographical
The Group offers a nationwide service, but a number of organisations see
benefit in using consultancies that are local to them and internet search
engines favour local providers. With offices in Kent, Berkshire,
Northamptonshire and Scotland, the Group has a good geographical spread.
Licences
The Group is reliant on licences and accreditations to be able to carry on its
business. The temporary loss of, or failure to maintain, any single licence
or accreditation would be unlikely to be materially detrimental to the Group,
as the directors believe that this could be remedied. However, if the Group
fails to remedy any loss of, or does not maintain, any licence or
accreditation, this will have a material adverse effect on the business of the
Group. The Group has internal processes in place to ensure that the licences
and accreditations are maintained.
SECTION 172 STATEMENT
The Companies (Miscellaneous Reporting) Regulations require large companies to
publish a statement describing how the directors have had regard to the
matters set out in section 172 (1) (a) to (f) of the Companies Act 2006. These
sections require directors to act in a way most likely to promote the success
of the Group for the benefit of its stakeholders and with regard to the
following matters.
The likely consequences of any decision in the long-term
The board receives an annual business plan from the managing director of each
subsidiary company, which forms the basis of the Group’s strategic plan. The
board requires that the plans include financial forecasts, KPIs, marketing
strategy and an analysis of strengths, weaknesses, opportunities, and threats.
Subsidiary directors, via the Group’s operational board of which they are
members, consider the implications of their own plans in the context of what
others within the Group are intending to do and the opportunities for
synergies are explored. Any proposed actions that may adversely affect another
subsidiary are flagged at operational board level and are resolved. Subsidiary
directors are challenged on the content of their plans and the assumptions
they have made, to ensure that the plans are realistic and achievable. Once
agreed by the board, this plan, at Group and subsidiary level, is used as the
benchmark against which to assess performance.
The interests of the Group’s employees
As the Group is mainly involved in the supply of services, the board considers
its staff to be the greatest asset and the interests of employees are taken
into consideration in all decisions made. Each subsidiary company within the
Group has in place the necessary structures to ensure effective communication
with its employees. The subsidiary directors meet once a quarter and relevant
information is shared with employees via team meetings held at subsidiary
level. The views of employees are heard in a similar fashion, initially at
team meetings, and escalated to the operational board and the main board if
appropriate. Each subsidiary has its own bonus scheme, based on results for
the financial year and/or tailor-made targets. There is an annual budget for
staff training in recognition that the performance of the Group can be
improved by the development of its employees.
The Group is committed to equality of employment and its policies reflect a
disregard of factors such as disability in the selection and development of
employees. A review has been conducted to identify any gender-related pay
anomalies across the Group and found there to be no such anomalies.
The need to foster the Group’s business relationships with suppliers,
customers, and others
The Group seeks to treat suppliers fairly and adhere to contractual payment
terms. The Group works with its suppliers to help drive change through
innovation, promoting new ideas and ways of working. The Group has
zero-tolerance to modern slavery and is committed to acting ethically and with
integrity in all business dealings and relationships. The Group policy for
Modern Slavery and Human Trafficking contains systems and controls to ensure
that these activities are not taking place anywhere in the subsidiaries or
throughout the Group’s supply chains and can be viewed on our website
(www.phsc.plc.uk).
The Group also has zero-tolerance with regards to bribery, made explicit
through its Anti-Bribery and Corruption Policy. This covers the acceptance of
gifts and hospitality and any form of unethical inducement or payment
including facilitation payments and “kickbacks”. The policy sets out the
responsibilities of directors, employees and contractors and details the
procedures in place to prevent bribery and corruption. This policy is also
available on our website.
Each subsidiary is focussed on its customers. Communication takes many forms
and is structured according to how each subsidiary interacts with its client
base. Channels of communication include quarterly newsletters in hard copy
and/or sent electronically, customer roadshows, interaction via various social
media platforms (Twitter, LinkedIn and Facebook) and regular client meetings.
An ongoing dialogue is held electronically, with most clients subscribing to
email updates that are sent out periodically.
Stephen King is the principal contact between the Company and its investors,
with whom he maintains a regular dialogue. The Company is committed to
listening to and communicating openly with its shareholders to ensure that its
business model and performance are understood. Regular announcements are made
to the market and the AGM provides a forum for information dissemination,
discussion, and feedback.
The impact of the Group’s operations on the community and the environment
The board’s intention is to behave responsibly and ensure that management
operates the business in a responsible manner, complying with high standards
of business conduct and good governance. The Group has a long tradition of
supporting local causes through sponsorship and community involvement, details
of which can be found on our website. The directors are aware of the impact of
the Group’s business on the environment but believe this to be minimal due
to the nature of its operations.
GOING CONCERN
Company law requires the directors to consider the appropriateness of the
going concern basis when preparing the financial statements. Cash reserves
ended the year at a high level despite the completion of two successful share
buybacks requiring total funding (including costs) of £644,700 in the year
ended March 2022. The board is satisfied that such reserves, along with the
Group’s cash-generative trading position and (unused) credit facility will
ensure that there are sufficient resources to continue in operational
existence for the foreseeable future. The directors therefore continue to
adopt the going concern basis of accounting in preparing the annual financial
statements.
On behalf of the board, I must once again thank all our shareholders and
employees for their ongoing loyalty and support. The board is grateful for
the continuing spirit of teamwork and mutual support that is enabling the
Group to move forward positively in the aftermath of the COVID-19 pandemic.
Stephen King
Group Chief Executive Officer
2 August 2022
GROUP STATEMENT OF FINANCIAL POSITION
as at 31 March 2022
Note 31.3.22 £ 31.3.21 £
Non-Current Assets
Property, plant and equipment 5 490,138 529,413
Goodwill 6 2,235,045 3,028,463
Deferred tax asset 14 15,591 2,017
2,740,774 3,559,893
Current Assets
Stock 8 185,685 259,760
Trade and other receivables 7 726,378 590,128
Cash and cash equivalents 9 649,363 1,237,483
1,561,426 2,087,371
Total Assets 4,302,200 5,647,264
Current Liabilities
Trade and other payables 11 617,077 518,245
Right of use lease liabilities 13 30,632 31,856
Current corporation tax payable 55,112 88,011
702,821 638,112
Non-Current Liabilities
Right of use lease liabilities 13 24,184 38,865
Deferred tax liabilities 14 61,842 50,988
86,026 89,853
Total Liabilities 788,847 727,965
Net Assets 3,513,353 4,919,299
Capital and reserves attributable to equity holders of the Group
Called up share capital 10 1,467,726 1,467,726
Share premium account 10 1,916,017 1,916,017
Capital redemption reserve 143,628 143,628
Merger relief reserve 133,836 133,836
Treasury shares (644,738) -
Retained earnings 496,884 1,258,092
3,513,353 4,919,299
GROUP STATEMENT OF COMPREHENSIVE
INCOME
for the year ended 31 March 2022
Note 31.3.22 £ 31.3.21 £
Continuing operations :
Revenue 3,570,626 3,289,462
Cost of sales 15 (1,938,870) (1,764,915)
Gross profit 1,631,756 1,524,547
Administrative expenses 15 (1,446,051) (1,528,160)
Goodwill impairment 6 (793,418) (250,000)
Government grants 16 29,527 441,125
Other income - 1,477
(Loss)/profit from operations (578,186) 188,989
Finance income 19 388 999
(Loss)/profit before taxation (577,798) 189,988
Corporation tax expense 20 (53,205) (102,241)
(Loss)/profit for the year after tax attributable to owners
of the parent (631,003) 87,747
Other comprehensive income - -
Total comprehensive (loss)/income attributable to owners
of the parent (631,003) 87,747
Basic and diluted (loss)/earnings per share from continuing operations 21 (4.76)p 0.60p
PHSC PLC
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2022
Share Capital £ Share Premium £ Merger Relief Reserve £ Capital Redemption Reserve £ Treasury Shares £ Retained Earnings £ Total £
Balance at 1 April 2020 1,467,726 1,916,017 133,836 143,628 - 1,317,117 4,978,324
Profit for year attributable to equity holders - - - - - 87,747 87,747
Dividends - - - - - (146,772) (146,772)
Balance at 31 March 2021 1,467,726 1,916,017 133,836 143,628 - 1,258,092 4,919,299
Balance at 1 April 2021 1,467,726 1,916,017 133,836 143,628 - 1,258,092 4,919,299
Loss for year attributable to equity holders - - - - - (631,003) (631,003)
Dividends - - - - - (130,205) (130,205)
Purchase of own shares - - - - (644,738) - (644,738)
Balance at 31 March 2022 1,467,726 1,916,017 133,836 143,628 (644,738) 496,884 3,513,353
PHSC PLC
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 March 2022
Note 31.3.22 £ 31.3.21 £
Cash flows from operating activities:
Cash generated from operations I 313,530 702,188
Tax paid (89,213) (37,183)
Net cash generated from operating activities 224,317 665,005
Cash flows used in investing activities
Purchase of property, plant and equipment (22,117) (8,739)
Proceeds from disposal of fixed assets 140 4,333
Interest received 388 999
Net cash used in investing activities (21,589) (3,407)
Cash flows used in financing activities
Payment of lease liabilities (15,905) (33,262)
Purchase of own shares (644,738) -
Dividends paid to shareholders (130,205) (146,772)
Net cash used in financing activities (790,848) (180,034)
Net (decrease)/increase in cash and cash equivalents (588,120) 481,564
Cash and cash equivalents at beginning of year 1,237,483 755,919
Cash and cash equivalents at end of year 649,363 1,237,483
All changes in liabilities arising from financing relate entirely to cash
movements.
NOTES TO THE GROUP STATEMENT OF CASH FLOWS
for the year ended 31 March 2022
31.3.22 £ 31.3.21 £
I. CASH GENERATED FROM OPERATIONS
(Loss)/profit from operations (577,798) 188,989
Depreciation charge 58,812 65,619
Goodwill impairment 793,418 250,000
Loss on sale of fixed assets 2,441 1,913
Decrease in stock 74,075 4,541
(Increase)/decrease in trade and other receivables (136,250) 295,819
Increase/(decrease) in trade and other payables 98,832 (104,693)
Cash generated from operations 313,530 702,188
Notes
The financial information set out above does not constitute the Group’s
financial statements for the years ended 31 March 2022 or 31 March 2021 but is
derived from those financial statements. Statutory financial statements for
2021 have been delivered to the Registrar of Companies and those for 2022 have
been approved by the board and will be delivered after dispatch to
shareholders. The auditors have reported on the 2021 and 2022 financial
statements which carried unqualified audit reports, did not include any
reference to any matters to which the auditor drew attention by way of
emphasis and did not contain a statement under section 498(2) or 498(3) of the
Companies Act 2006.
While the financial information included in this announcement has been
compiled in accordance with International Financial Reporting Standards
(IFRS), this announcement does not in itself contain sufficient information to
comply with IFRS. The accounting policies used in the preparation of this
announcement are consistent with those in the full financial statements.
Dividends
A total dividend of 1.0p per ordinary share (£146,772) was paid in respect of
the year ended 31 March 2021; half was paid in February 2021 and the balance
in October 2021. An interim dividend of 0.5p in respect of the financial year
ended 31 March 2022 was paid in February 2022 and, subject to shareholder
approval at the AGM, a final dividend of 0.5p will be payable on 14 October
2022 to shareholders on the register on 30 September 2022, thereby matching
the total of 1.0p paid last year.
Copyright (c) 2022 PR Newswire Association,LLC. All Rights ReservedRecent news on PHSC
See all newsREG-PHSC Plc: Update re: Director's Shareholding
AnnouncementREG-PHSC Plc: Holding(s) in Company
AnnouncementREG-PHSC Plc: Replacement RNS: Transaction in Own Shares and Completion of Buyback Programme
AnnouncementREG-PHSC Plc: Transaction in Own Shares and Completion of Buyback Programme
AnnouncementREG-PHSC Plc: Transaction in Own Shares
Announcement