REG - FIH Group PLC - Results for the Six Months Ended 30 September 2021
10/11/2021 07:00
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RNS Number : 8596R FIH Group PLC 10 November 2021
10 November 2021
FIH group plc
("FIH" or the "Group")
Results for the Six Months Ended 30 September 2021
FIH, the AIM quoted Group that owns essential services businesses in the UK
and Falkland Islands, is pleased to announce its unaudited results for the six
months ended 30 September 2021 ("the period"). Comparisons shown below are for
the same period in 2020 unless otherwise stated.
Return to Profitability and Dividend List
Highlights
· Group revenue increased by 20% to £17.3 million (2020: £14.4
million) reflecting a markedly better performance from the UK based businesses
and a continued good performance from the Falkland Islands Company ("FIC");
· Pre-tax profit of £0.4 million (2020: loss of £0.2 million)
with trading improving alongside the lifting of restrictions in the UK and
significant scope for further improvement;
· Passenger numbers rising again for Portsmouth Harbour Ferry
Company ("PHFC") as people return to offices, and following cost savings from
a 25% reduction in headcount last year, PHFC is expected to continue its
recovery;
· Much improved performance from Momart despite sections of the art
world still largely shut and assuming the gradual reopening continues, further
improvement is anticipated;
· Strong cash position of £8.0 million as at 30 September 2021;
and
· Return to the dividend list with the payment of an interim
dividend of 1.0 pence per share.
Outlook
· Direction of travel encouraging across all three divisions with
the potential to accelerate further;
· Balance sheet strength continues to underpin trading position
and provide strategic flexibility; and
· Overall, the outlook is positive as reflected in the Board's
decision to re-instate the dividend.
John Foster, Chief Executive, said:
"We have three good businesses and when conditions permitted, the Group
quickly returned to profitability. Our financial position is strong and
customer activity is heading back towards pre-pandemic levels. We are also
benefitting from the actions taken last year to reduce our cost base, whilst
continuing to invest in areas where we see opportunities. We expect the
progress demonstrated in the Group's first half results to continue as we move
into the traditionally stronger second half."
Enquiries:
FIH group plc
John Foster, Chief Executive Tel: 01279 461630
Stuart Munro, Chief Financial Officer
WH Ireland Ltd. - NOMAD and Broker to FIH
Adrian Hadden / Jessica Cave / Megan Liddell Tel: 0207 220 1666
Novella Communications
Tim Robertson / Chris Marsh Tel: 020 3151 7008
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to
constitute inside information. Upon the publication of this announcement via a
Regulatory Information Service, this inside information is now considered to
be in the public domain.
Chairman's Statement
I am pleased to report further progress in the Group's recovery from the
adverse effects of the coronavirus. FIH's UK operations saw a slow return
towards more normal trading as lockdown restrictions were finally lifted in
England in late July 2021 whilst the Falkland Islands Company ("FIC"), which
has been much less affected by COVID-19, maintained its healthy profitability
in the traditionally quieter austral winter.
A detailed commentary on the results is provided in the Chief Executive's
Review but in overview, although demand has not yet fully returned to
pre-COVID levels, profitability improved across the Group despite a marked
reduction in the level of financial support from the UK government's furlough
scheme allowing the Group to produce a pre-tax profit of £0.4 million for the
six months ended 30 September 2021 compared to a loss of £0.2 million in the
same period last year.
In April 2021, the Group took steps to further strengthen its executive team
with the recruitment of an experienced Chief Financial Officer, Stuart Munro,
and in the Falkland Islands, an experienced executive was recruited to further
develop FIC's construction and infrastructure activities and its ability to
deliver larger more complex projects.
Provided there is no recurrence of lockdown restrictions, we expect to see
further improvement in the Group's traditionally stronger second half,
reinforced by a continuing return to more normal patterns of business and
client activity.
Once again, our staff have shown great resilience and dedication, applying
considerable skill and devotion to the needs of our customers, so I would like
to thank them on behalf of the Board for all their efforts.
Reflecting the Board's confidence in the underlying resilience of the Group,
its return to profitability before taking into account Government support and
its ability to recover from the effects of the pandemic, the Board is
announcing the resumption of dividends with the payment of an interim dividend
of 1.0 pence per share which will be paid on 14 January 2022 to shareholders
on the register at the close of business on 3 December 2021.
The Group has a Dividend Reinvestment Plan ("the Plan") that allows
shareholders to reinvest dividends to purchase additional shares in the Group.
For shareholders to apply the proceeds of this and future dividends to the
Plan, application forms must be received by the Group's Registrars by no later
than Wednesday 22 December 2021*.
Firm progress has been made in the past six months and with the benefit of a
lower cost base following the necessary restructuring activity seen last year,
steadily recovering demand, and a strong balance sheet, the Board looks to the
future with confidence.
Robin Williams
Chairman
10 November 2021
* Existing participants in the Plan will automatically have the interim
dividend reinvested. Details on the Plan can be obtained from Link Group on
0371 664 0381 or at www.signalshares.com. Calls are charged at the standard
geographic rate and will vary by provider. If you are outside the United
Kingdom, please call +44 371 664 0381. Calls outside the United Kingdom will
be charged at the applicable international rate. The lines are open from
9.00am to 5.30pm, Monday to Friday excluding public holidays in England and
Wales.
Chief Executive's Review
Overview
The Group's results for the six months to 30 September 2021 reflect a slow but
steady improvement in activity compared to first half of the previous
financial year. The Group's UK businesses enjoyed a marked increase in revenue
and a welcome move back towards profitability and in the Falkland Islands, FIC
delivered another robust performance. This encouraging performance was
achieved despite the adverse effects of COVID-19, which saw lockdown
restrictions in place for many weeks at the start of the period, and not fully
released in England until late July 2021. Despite these challenges and an
increased investment in central management, the Group was able to move back
into profit, returning a profit before tax of £0.4 million in the period
compared to a loss of £0.2 million in the prior year. This result can also be
compared to a profit before tax of £1.3 million in the period to September
2019 which was not impacted at all by COVID-19.
In both the UK businesses, activity steadily improved as lockdown restrictions
were removed from mid-April onwards and public confidence was slowly rebuilt.
The Falkland Islands were free from local restrictions but remained
essentially quarantined from the outside world. However, economic activity
remained solid and helped by a much-improved illex squid catch, FIC was able
to maintain a healthy level of profitability.
In the face of still challenging trading conditions and improving, but reduced
demand for services, both the Group's UK businesses benefitted from the
restructuring programmes put in place last autumn, which delivered £1.6m of
savings in annual operating costs and accelerated their return to
profitability. The gradually increasing activity levels evident in the period,
together with a reduced UK headcount did however lead to a significant fall in
the level of Government support and income from the Job Retention Scheme and
related grants fell by 78.6% to £0.3 million compared to the £1.4m received
in the prior period.
By September 2021, despite increased investment in head office resource to
support longer term growth, the Group returned to consistent profitability
compared to the COVID-induced losses seen at the start of the period. Further
improvement is expected in the traditionally stronger second half, augmented
by a continued building of customer demand as the impact of COVID-19 steadily
recedes.
Group Trading Results for the Six Months Ended 30 September 2021
A summary of the trading performance of the Group is given in the table below.
2021 2020
Six Months Ended 30 September £ million £ million
Group Revenue
Falkland Islands Company 9.9 9.7
Portsmouth Harbour Ferry 1.5 0.8
Momart 5.9 3.9
Total revenue 17.3 14.4
Group Underlying Pre-tax Profit*
Falkland Islands Company** 0.6 0.8
Portsmouth Harbour Ferry** - (0.4)
Momart** (0.2) (0.5)
Total underlying pre-tax profit / (loss)* 0.4 (0.1)
Non-trading items (see note 3) - (0.1)
Reported profit / (loss) before tax 0.4 (0.2)
Diluted earnings per share in pence (1.3p) (1.5p)
* Underlying pre-tax profit is defined as, profit before tax, before
non-trading items.
** As in prior years the profits reported for each operating company are
stated after the allocation of head office
management and plc costs which have been applied to each subsidiary on a
consistent basis.
Dividend
With the Group's recovery now well established and further improvement
expected in the second half, the Board is pleased to announce the resumption
of dividends with the payment of an interim dividend of 1.0 pence per share.
Group Operating Company Performance
Falkland Islands Company
Trading in FIC was once again encouraging with an overall 2.1% growth in
revenue to £9.9 million (2020: £9.7 million) helped by the absence of the
initial lockdown restrictions which impacted trading in April / May 2020 and
by a strong illex squid catch in April / May 2021. Overheads were increased to
further strengthen the Stanley-based team and to secure a platform for
delivering longer term growth and these increased costs resulted in a small
reduction in FIC's overall pre-tax contribution compared to the prior year.
FIC saw revenue growth in Retail whilst 4x4 maintained sales at their previous
healthy levels. At Falkland Building Services ("FBS"), revenue dipped
following the successful completion of work on the Falkland Islands Government
("FIG") housing contract for 26 homes started in November 2019. Despite this
temporary slow-down, the department was successful in securing additional work
from FIG during the period which will underpin FBS's continuing development.
Revenue from Other Services increased by £0.3 million as Fishing Agency
revenues were buoyed by the strong illex squid catch. Income from FIC's
portfolio of 80 residential properties was unchanged at £0.4 million.
FIC Operating Results 2021 2020 Change
Six Months Ended 30 September £ million £ million %
Revenue
Retail 4.7 4.6 2.2
FBS (construction) 1.8 2.0 (10.0)
Falklands 4x4 1.6 1.6 -
Other services 1.4 1.1 27.3
Property rental 0.4 0.4 -
Total revenue 9.9 9.7 2.1
Underlying operating profit 0.6 0.9 (33.3)
Finance expense - (0.1) 100.0
Underlying profit before tax 0.6 0.8 (25.0)
With some pressure from increased costs, FIC saw a small reduction in
operating profit but in overall terms still produced a solid trading
performance in the traditionally quiet austral winter. On a positive note,
FIC's success in winning competitive tenders for important government housing
and infrastructure works points to the growth potential in the coming years
working on similar vital infrastructure projects for both FIG and the UK
Ministry of Defence.
Looking ahead, in the near term, FIG remains cautious in its approach to
reopening borders and commercial flights to the Islands via South America are
unlikely to resume until well into 2022. Cruise ship visits will be similarly
curtailed and no visits from the major cruise operators are expected until
October 2022, when it is hoped the Islands will see the return to something
close to pre-pandemic levels of tourism. In the short term, as with 2020, the
seasonal summer uplift to the Falkland Islands' economy and to FIC's trading
activities will be once again dampened by an absence of tourists, although the
significant long-term potential of this sector of the economy remains
undimmed.
With respect to the potential development of oil in the Falkland Islands, the
announcement on 23 September 2021 by Harbour Energy, the principal licence
holder in Sea Lion, that it was seeking to exit from the project was
disappointing, although with the price of Brent Crude having since risen to
over $80/barrel it is hoped that other oil companies may yet show an interest
in taking the project forward. Whilst such developments would be positive for
both the Falkland Islands and FIC, the future success and growth of FIC does
not depend on the development of oil. The Board is confident that significant
potential exists for FIC by building on its success in construction,
infrastructure, specialist local services and tourism.
Portsmouth Harbour Ferry Company
After enduring a second dramatic fall in ferry passenger volumes in the first
quarter of 2021, it was pleasing to see a slow but steady recovery in numbers
using the Gosport Ferry as COVID-19 lockdown restrictions were gradually
lifted in the first months of the new financial year. With the reopening of
non-essential retail shops in mid-April, passenger volumes lifted to 45% of
pre-COVID levels and by late July, with the ending of all formal restrictions
in England, ferry volumes had recovered to 64% of 2019 levels. Since then,
customer confidence has continued to improve and by September 2021 passenger
numbers had returned to 80% of pre-COVID volumes, and the business has made a
welcome return to profitability.
Although a complete return to pre-COVID levels of passenger activity seems
uncertain given the continued level of hybrid working, the Portsmouth Harbour
Ferry Company ("PHFC") has acted to counteract the effects of lost revenue by
restructuring the service; reducing the workforce by 25% to deliver annual
cost savings of over £0.3 million.
The rise in the numbers of COVID cases across the UK over the mid-summer
period as government restrictions came to an end, did however mean that for a
second summer, the ferry company was unable to operate its popular programme
of leisure cruises around Portsmouth Harbour and the Solent.
Working closely with local Councils and supported by First Bus, in late June
PHFC launched a "Park & Float" scheme offering a combined parking and
ferry fare to provide potential passengers not living within walking distance
of the ferry terminal, a convenient alternative to driving around the harbour
to Portsmouth. However, with the resumption of Portsmouth Council's own
subsidised Park & Ride scheme on the outskirts of the city, to date
customer uptake of "Park & Float" has been lower than hoped.
PHFC's revenue for the six months to 30 September 2021 of £1.5 million, was
almost double the £0.8 million seen in the first half of the prior year but
as passenger numbers are still recovering, it remained some £0.8 million
below the pre-COVID levels of revenue seen in the period to 30 September 2019
when PHFC achieved sales revenue of £2.3 million.
PHFC Operating Results 2021 2020 Change
Six Months Ended 30 September £ million £ million %
Revenue
Ferry fares 1.5 0.8 87.5
Cruising and other income - - -
Total revenue 1.5 0.8 87.5
Underlying operating profit / (loss) 0.1 (0.3) 133.3
Finance expense (0.1) (0.1) -
Underlying profit / (loss) before tax - (0.4) 100.0
Despite a reduction in the level of support from the UK Government's furlough
scheme in the current period, PHFC's cost saving programme and the slow but
steady improvement in passenger volumes saw profitability improve by £0.4
million leading to a small operating profit (after the allocation of head
office costs) and a break-even result at the pre-tax level.
Momart
After a virtual cessation of UK and international art movements in the first
half of last year, Momart saw something of a recovery in the second half of FY
2020-21 as revenues increased from £3.9 million to over £6.4 million in the
6 months to 31 March 2021. However, as the new financial year started, UK
museums remained closed and restrictions on movement in both the UK and
internationally meant that collectors and commercial galleries were cautious
in committing to any significant expansion.
On a positive note, activity with auction houses showed continued improvement
as the large international houses adapted well to online selling. In addition,
the significant reduction in Momart's headcount undertaken in late 2020
reduced the company's fixed costs which mitigated the impact of the sluggish
recovery in the global art market.
Momart's art storage revenues were once again robust, although lockdown
restrictions meant that in practice, it was almost impossible to replace
storage business lost through scheduled returns to temporary storage clients
but despite this, total revenues were broadly unchanged at £1.2 million.
By July, most UK museums had cautiously reopened but with precautionary limits
set and virtually no overseas tourists in London over the summer, museum
visitor numbers were limited to well below normal levels, constraining ticket
sales and forcing museum managers to delay planned exhibitions and scale back
activity for the remainder of 2021.
The commercial art market was more buoyant but with the decision to postpone
Europe's largest art fair, Art Basel until late September, the market remained
well below pre-COVID levels, albeit activity across the commercial market
recovered markedly in the last weeks of the period and further improvement was
evident with the re-opening of Frieze London in early October after a hiatus
of two years.
Exhibitions revenues at £2.4 million improved markedly on the disastrous
levels seen in the first half of last year of £1.3 million but still lagged
behind the £3.2 million delivered in H2. In contrast, more consistent
progress was seen in the commercial market; Gallery Services revenues at £2.3
million were well ahead of the £1.4 million seen in H1 2020 and 15% ahead of
the £2.0 million of revenue generated in the second half of that year. The
continued absence of major art fairs until late summer 2021 restricted
recovery and there was little in the way of new, large exhibitions from cash
constrained museums. Hence, although first half revenue improved upon that
seen in the first half of last year, reflecting both continuing lockdown
effects and normal seasonality, Momart's overall revenues in H1 fell back
below the level seen in the second half last year from £6.4 million to £5.9
million.
Momart Operating Results 2021 2020 Change
Six Months Ended 30 September £ million £ million %
Revenue
Museum Exhibitions 2.4 1.3 84.6
Gallery Services 2.3 1.4 64.3
Storage 1.2 1.2 -
Total revenue 5.9 3.9 51.3
Underlying operating profit / (loss) - (0.3) 100.0
Finance expense (0.2) (0.2) -
Underlying loss before tax (0.2) (0.5) 60.0
With a welcome recovery in revenue and benefitting from a lower cost base,
after a slow start in the early months of the period, Momart was able to
improve profitability by £0.3 million and achieve a breakeven position at the
operating level. At the pre-tax level after mortgage interest costs, losses of
£0.5 million in the prior period were reduced to £0.2 million.
Looking ahead, Exhibitions' activity is expected to slowly improve although
continuing pressure on museum visitor numbers means recovery is expected to be
gradual until well into 2022. In contrast, in the commercial art market as
confidence grows and international air travel increases, we expect to see a
return to something close to pre-COVID art fair openings in the remainder of
2021 and, provided the global economy remains robust, further increases in
activity by auction houses and by private collectors.
Trading Outlook
The current financial year has reflected a slow but steady trend towards a
return to pre-COVID levels of activity and we expect the progress demonstrated
in the Group's first half results to continue as we move into the
traditionally stronger second half.
In the Falkland Islands, FIC has demonstrated a robust commercial strength and
has built solid foundations to continue the expansion of its construction and
infrastructure arms as well as its core specialist services. Although the
current financial year will not benefit from any substantial tourist income,
the fundamental strength of the Falkland Islands' economy and FIC's place
within it provide solid platform for continued growth which will only improve
when tourism resumes in the austral spring of 2022.
In the UK, provided there are no unexpected setbacks in relation to the virus,
given the progress made to date since April 2021, we expect to see a further
strengthening in the trading performance of both Momart and PHFC in the second
half, although neither are expected to return to pre-COVID levels of activity
until well into 2022.
Moving beyond the current year we will continue to invest in both Momart and
FIC to help unlock their undoubted potential for further growth and in
addition, following the recent hiring of Stuart Munro as Group CFO, we will
continue to search for strategic earnings enhancing acquisitions to increase
the scale and investor appeal of the Group.
John Foster
Chief Executive
10 November 2021
Chief Financial Officer's Review
Financial Review
Revenue
Group revenue increased by £2.9 million (20.1%) to £17.3 million (2020:
£14.4 million) due principally to improvements in Momart and PHFC of £2.0
million and £0.7m respectively, following the easing of UK COVID-19 lockdown
restrictions, together with a £0.2 million increase in FIC.
Underlying Operating Profit
Underlying operating profit before non-trading items and net finance costs
increased to £0.8 million (2020: £0.3 million) reflecting the revenue
improvements noted above, the impact of actions taken to reduce cost in the
year ended 31 March 2021 and the receipt of £0.3 million of COVID-19
Government funding (2020: £1.4 million).
Net Financing Costs
The Group's net financing costs remained broadly flat at £0.4 million (2020:
£0.5 million). Two UK Government-backed CBILS loans totalling £5.0 million
were drawn down in June 2020 and repaid in June 2021 but as the first 12
months of interest payments were covered by the UK Government, these loans had
no impact on net financing costs.
Reported Pre-tax Profit
The reported pre-tax result for the six months ended 30 September 21 was a
profit of £0.4 million (2020: £0.2 million loss). The result for the six
months ended 30 September 2020 included restructuring costs of £0.1m and the
Group's underlying profit before tax before non-trading items was £0.4
million (2020: £0.1 million loss).
Taxation
The taxation charge on the current period result of £0.1 million (2020: £0.1
million credit) has been estimated on the basis of 19% and 26% of profits
arising in the UK and the Falkland Islands respectively (2020: based on a
blended rate of 23.0%). In addition, an increase in the UK corporation tax
rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24
May 2021. This has increased the deferred tax liability of the Group and the
tax charge for the period by an estimated £0.4 million, resulting in an
overall tax charge of £0.5 million (2020: £0.1 million credit).
Earnings per Share
Diluted Earnings per Share ("EPS") derived from reported losses was -1.3 pence
(2020: -1.5 pence) and diluted EPS derived from underlying losses was -1.0
pence (2020: -0.9 pence).
Balance Sheet and Cash Flow
The Group's balance sheet remained strong with total net assets of £38.7
million broadly in line with the balances at 31 March 2021 and 30 September
2020 of £38.9 million and £38.6 million respectively.
Net Debt
30 September 2021 31 March 2021 Change
£m £m £m
Bank loans (14.7) (20.1) 5.4
Cash and cash equivalents 8.0 14.6 (6.6)
Bank loans net of cash and cash equivalents (6.7) (5.5) (1.2)
Lease liabilities (7.8) (8.1) 0.3
Net debt (14.5) (13.6) (0.9)
Bank loans reduced to £14.7 million (31 March 2021: £20.1 million) following
the repayment of £5.0 million CBILS loans in June 2021 and scheduled loan
repayments of £0.4 million. £12.9 million of the balance was in respect of
the long-term mortgage secured on the Group's freehold premises in Leyton (31
March 2021: £13.2 million).
The Group's cash balances reduced to £8.0 million (31 March 2021: £14.6
million), reflecting the loan payments totalling £5.4 million noted above and
a reduction in the underlying cash balance of £1.2 million.
The reduction in underlying cash was due mainly to capital expenditure of
£1.1 million (£0.8 million on investment property and £0.3 million on
property, plant and equipment both largely in FIC) and interest and lease
liability repayments of £0.4 million and £0.3 million respectively, which
were partly offset by a £0.7 million net cash inflow from operating
activities. The latter included a £1.2 million increase in working capital
which largely arose in FIC, where circa £1.0 million was due to an increase
in inventory (predominantly a £0.8m increase in housebuilding stocks and work
in progress) and £0.2 million was due to increases in trade and other
receivables.
The Group's outstanding lease liabilities totalled £7.8 million (31 March
2021: £8.1 million) with £5.7 million of the balance (31 March 2021: £5.7
million) relating to the leases from Gosport Borough Council to PHFC for the
Gosport Pontoon and associated ground rent, which run until June 2061.
Overall, net debt increased to £14.5 million (31 March 2021: £13.6 million).
Stuart Munro
Chief Financial Officer
10 November 2021
Consolidated Income Statement
For the Six Months Ended 30 September 2021
Notes Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
2 Revenue 17,267 14,384 32,578
Cost of sales (10,064) (9,212) (19,437)
Gross profit 7,203 5,172 13,141
Other administrative expenses (6,454) (4,958) (12,307)
Consumer finance interest income 79 113 192
Operating expenses (6,375) (4,845) (12,115)
Operating profit before non-trading items 828 327 1,026
3 Non-trading items (44) (102) 57
Operating profit 784 225 1,083
4 Finance expense (421) (472) (881)
Profit / (loss) before tax 363 (247) 202
5 Taxation (523) 57 (193)
(Loss) / profit attributable to equity holders of the Company (160) (190) 9
6 Earnings per share
Basic (1.3p) (1.5p) 0.1p
Diluted (1.3p) (1.5p) 0.1p
See note 6 for an analysis of earnings per share on underlying profit (defined
as profit after tax before non-trading items).
Consolidated Balance
Sheet
At 30 September 2021
Unaudited Unaudited Audited
30 September 30 September 31 March
2021 2020 2021
Notes £'000 £'000 £'000
Non-current assets
Intangible assets 4,167 4,212 4,183
Property, plant and equipment 39,552 40,940 40,361
Investment properties 7,794 6,691 7,123
Investment in joint venture 259 259 259
Debtors due in more than one year 88 88 88
Hire purchase debtors 605 527 590
Deferred tax assets 739 651 739
Total non-current assets 53,204 53,368 53,343
Current assets
Inventories 6,878 6,333 5,871
Trade and other receivables 6,114 4,635 5,868
Hire purchase debtors 647 589 558
8 Cash and cash equivalents 7,976 14,367 14,556
Total current assets 21,615 25,924 26,853
Total assets 74,819 79,292 80,196
Current liabilities
Trade and other payables (6,777) (6,082) (6,775)
9 Interest bearing loans and borrowings (1,403) (1,468) (3,424)
Derivative financial instruments - (537) -
Corporation tax payable (237) (112) (113)
Total current liabilities (8,417) (8,199) (10,312)
Non-current liabilities
9 Interest bearing loans and borrowings (21,046) (27,037) (24,799)
Derivative financial instruments (234) - (234)
Deferred tax liabilities (3,559) (2,849) (3,113)
Employee benefits (2,828) (2,615) (2,842)
Total non-current liabilities (27,667) (32,501) (30,988)
Total liabilities (36,084) (40,700) (41,300)
Net assets 38,735 38,592 38,896
Capital and reserves
Equity share capital 1,251 1,250 1,251
Share premium account 17,590 17,590 17,590
Other reserves 703 703 703
Retained earnings 19,423 19,584 19,584
Hedging reserve (232) (535) (232)
Total equity 38,735 38,592 38,896
Consolidated Cash Flow Statement
For the Six Months Ended 30 September 2021
Notes Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
Cash flows from operating activities
(Loss) / profit for the period after taxation (160) (190) 9
Adjusted for:
(i) Non-cash items:
Amortisation 16 34 63
Depreciation: Property, plant and equipment 1,101 1,063 2,193
Depreciation: Investment properties 98 78 37
Loss on disposal of fixed assets - 60 53
Interest cost on pension scheme liabilities 35 60 64
Equity-settled share-based payment expenses 10 22 1
Non-cash items adjustment 1,260 1,317 2,411
(ii) Other items:
Exchange losses - - 3
Bank interest payable 217 263 469
Lease liability finance expense 169 160 348
Increase in hire purchase leases receivable (104) (1) (33)
Corporation and deferred tax expense/(income) 523 (57) 193
Other adjustments 805 365 980
Operating cash flow before changes in working capital 1,905 1,492 3,400
(Increase) / decrease in trade and other receivables (246) 4,061 2,828
Increase in inventories (963) (959) (497)
Increase / (decrease) in trade and other payables 2 (2,529) (1,836)
Changes in working capital (1,207) 573 495
Cash generated from operations 698 2,065 3,895
Payments to pensioners (49) (49) (98)
Corporation taxes received / (paid) 47 (64) (64)
Net cash flow from operating activities 696 1,952 3,733
Cash flows from investing activities
Purchase of property, plant and equipment (336) (362) (898)
Purchase of investment properties (769) (300) (702)
Net cash flow from investing activities (1,105) (662) (1,600)
Cash flows from financing activities
Bank loan drawn down - 5,000 5,000
Repayment of bank loans (5,468) (148) (624)
Bank interest paid (217) (252) (469)
Hire purchase loan draw down - - 389
Repayment of lease liabilities principal (306) (439) (649)
Lease liabilities interest paid (169) (160) (348)
Cash inflow on option exercises - - 19
Cash outflow on nil cost option exercise (11) (32) -
Net cash flow from financing activities (6,171) 3,969 3,318
Net (decrease) / increase in cash and cash equivalents (6,580) 5,259 5,451
Cash and cash equivalents at start of year 14,556 9,108 9,108
Exchange losses on cash balances - - (3)
8 Cash and cash equivalents at end of year 7,976 14,367 14,556
Consolidated Statement of Comprehensive Income
For the Six Months Ended 30 September 2021
Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
(Loss) / profit for the period (160) (190) 9
Cash flow hedges - effective portion of changes in fair value - - 303
Deferred tax on other financial liabilities - - 30
Deferred tax on effective portion of changes in fair value - - (58)
Items that are or may be reclassified subsequently to profit or loss - - 275
Re-measurement of the FIC defined benefit pension scheme - - (272)
Movement on deferred tax asset relating to the pension scheme - - 71
Items which will not ultimately be recycled to the income statement - - (201)
Total other comprehensive income - - 74
Total comprehensive (loss) / income (160) (190) 83
Condensed Consolidated Statement of Changes in Shareholders' Equity
For the Six Months Ended 30 September 2021
Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
Shareholders' funds at beginning of period 38,896 38,792 38,792
(Loss) / profit for the period (160) (190) 9
Cash flow hedges - effective portion of changes in fair value - - 303
Deferred tax on effective portion of changes in fair value - - (58)
Deferred tax on other financial liabilities - - 30
Re-measurement of the defined benefit pension liability, net of tax - - (201)
Total comprehensive (loss) / income (160) (190) 83
Transactions with owners in their capacity as owners:
Share-based payments 10 22 1
Share option exercise (11) (32) 20
Transactions with owners (1) (10) 21
Shareholders' funds at end of period 38,735 38,592 38,896
Notes to the Unaudited Interim Statements
1. Basis of Preparation
This interim financial statement comprises the condensed consolidated balance
sheets at 30 September 2021, 30 September 2020 and 31 March 2021 and condensed
consolidated statements of income, comprehensive income, cash flows and
changes in shareholders' equity for the periods then ended and related notes
of FIH group plc (hereinafter 'the interim financial information').
In adopting the going concern basis of preparation in the interim financial
statements, the directors have considered the current trading performance of
the Group, and the principal risks and uncertainties it faces. This includes
the modelling of "severe but plausible" downside scenarios including longer
term changes brought about by COVID-19 in the key markets of group companies,
in addition to a cautious scenario for the more near-term impact of COVID-19.
The directors believe that the Group is well placed to manage the risks and
uncertainties it faces. As such, the directors have a reasonable expectation
that the Group will have adequate financial resources to continue in
operational existence and have, therefore, considered it appropriate to adopt
the going concern basis of preparation in the interim financial statements.
The interim financial information has been prepared in accordance with the
accounting policies set out in the Group's 2021 annual financial statements.
As permitted, these interim financial statements have been prepared in
accordance with AIM rules and not in accordance with IAS34 'Interim Financial
Reporting'.
Section 245 Statement
The comparative figures for the financial year ended 31 March 2021 are not the
Company's full statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditor was unqualified, did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report and did not contain a statement under
section 498 (2) or 498 (3) of the Companies Act 2006.
2. Segmental Revenue and Profit Analysis
Unaudited - Six Months Ended 30 September 2021
General Trading (Falkland Islands) Ferry Services (Portsmouth) Art Logistics and Storage Unallocated Total
(UK)
£'000 £'000 £'000 £'000 £'000
Revenue 9,895 1,496 5,876 - 17,267
Segment operating profit before non-trading items 651 123 54 - 828
Non-trading items - - (44) - (44)
Segment operating profit before net financing costs 651 123 10 - 784
Finance expense (35) (152) (234) - (421)
Segment profit / (loss) before tax 616 (29) (224) - 363
Assets and liabilities
Segment assets 30,474 10,644 25,642 8,059 74,819
Segment liabilities (8,334) (8,518) (17,475) (1,757) (36,084)
Segment net assets 22,140 2,126 8,167 6,302 38,735
Other segment information
Capital expenditure:
Property, plant and equipment 264 38 34 - 336
Investment properties 769 - - - 769
Total capital expenditure 1,033 38 34 - 1,105
Capital expenditure: cash 1,033 38 34 - 1,105
Capital expenditure: non-cash - - - - -
Total capital expenditure 1,033 38 34 - 1,105
Depreciation and amortisation:
Property, plant and equipment 407 224 470 - 1,101
Investment properties 98 - - - 98
Computer software - - 16 - 16
Total depreciation and amortisation 505 224 486 - 1,215
Underlying profit/(loss)
Segment operating profit before non-trading items 651 123 54 - 828
Finance expense (35) (152) (234) - (421)
Underlying profit / (loss) 616 (29) (180) - 407
before tax
2. Segmental Revenue and Profit Analysis (Continued)
Unaudited - Six Months Ended 30 September 2020
General Trading (Falkland Islands) Ferry Services (Portsmouth) Art Logistics and Storage Unallocated Total
(UK)
£'000 £'000 £'000 £'000 £'000
Revenue 9,735 800 3,849 - 14,384
Segment operating profit / (loss) before non-trading items 867 (267) (273) - 327
Non-trading items - - - (102) (102)
Segment operating profit / (loss) before net financing costs 867 (267) (273) (102) 225
Finance expense (62) (168) (242) - (472)
Segment profit / (loss) before tax 805 (435) (515) (102) (247)
Assets and liabilities
Segment assets 33,000 10,922 30,319 5,051 79,292
Segment liabilities (7,584) (8,939) (18,528) (5,649) (40,700)
Segment net assets / (liabilities) 25,416 1,983 11,791 (598) 38,592
Other segment information
Capital expenditure:
Property, plant and equipment 362 - - - 362
Investment properties 300 - - - 300
Total capital expenditure 662 - - - 662
Capital expenditure: cash 662 - - - 662
Capital expenditure: non-cash - - - - -
Total capital expenditure 662 - - - 662
Depreciation and amortisation:
Property, plant and equipment 381 226 456 - 1,063
Investment properties 78 - - - 78
Computer software - - 34 - 34
Total depreciation and amortisation 459 226 490 - 1,175
Underlying profit/(loss)
Segment operating profit / (loss) before non-trading items 867 (267) (273) - 327
Finance expense (62) (168) (242) - (472)
Underlying profit / (loss) 805 (435) (515) - (145)
before tax
2. Segmental Revenue and Profit Analysis (Continued)
Year Ended 31 March 2021
General Trading (Falkland Islands) Ferry Services (Portsmouth) Art Logistics and Storage Unallocated Total
(UK)
£'000 £'000 £'000 £'000 £'000
Revenue 20,874 1,445 10,259 - 32,578
Segment operating profit / (loss) before non-trading items 1,852 (856) 30 - 1,026
Non-trading items 500 (140) (221) (82) 57
Segment operating profit / (loss) before net financing costs 2,352 (996) (191) (82) 1,083
Finance expense (68) (329) (484) - (881)
Segment profit / (loss) before tax 2,284 (1,325) (675) (82) 202
Assets and liabilities
Segment assets 29,498 11,411 33,648 5,639 80,196
Segment liabilities (8,687) (10,266) (22,062) (285) (41,300)
Segment net assets 20,811 1,145 11,586 5,354 38,896
Other segment information
Capital expenditure:
Property, plant and equipment 358 - 540 - 898
Investment properties 702 - - - 702
Total capital expenditure 1,060 - 540 - 1,600
Capital expenditure: cash 1,060 - 151 - 1,211
Capital expenditure: non-cash - - 389 - 389
Total capital expenditure 1,060 - 540 - 1,600
Depreciation and amortisation:
Property, plant and equipment 816 451 926 - 2,193
Investment properties 37 - - - 37
Computer software - - 63 - 63
Total depreciation and amortisation 853 451 989 - 2,293
Underlying profit/(loss)
Segment operating profit / (loss) before non-trading items 1,852 (856) 30 - 1,026
Finance expense (68) (329) (484) - (881)
Underlying profit / (loss) 1,784 (1,185) (454) - 145
before tax
3. Non-trading Items
Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020* 2021
£'000 £'000 £'000
Profit / (loss) before tax as reported 363 (247) 202
Restructuring costs 44 102 443
Other credits - - (500)
Non-trading items 44 102 (57)
Underlying profit / (loss) before tax 407 (145) 145
* Restated to exclude restructuring costs from underlying loss before tax.
Restructuring costs comprise people related costs including redundancy. Other
credits relate to derecognition of historic
liabilities, which were previously included within accruals, on the basis that
the amounts are no longer enforceable.
4. Finance Expense
Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
Interest payable on bank loans 217 252 469
Net interest cost on the FIC defined benefit pension scheme liability 35 60 64
Lease liabilities finance charge 169 160 348
Total finance expense 421 472 881
5. Taxation
Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
Current tax charge / (credit) 116 (57) (52)
Prior year research and development tax credit (39) - -
Deferred tax charge 446 - 245
Total tax expense / (credit) 523 (57) 193
The current tax charge has been estimated on the basis of 19% and 26% of
profits arising in the UK and the Falkland Islands respectively (September
2020: based on blended rate of 23.0%).
An increase in the UK corporation tax rate from 19% to 25% (effective 1 April
2023) was substantively enacted on 24 May 2021. This will increase the
future tax charge for the Group and has increased the deferred tax liability
of the Group and the tax charge for the six months ended 30 September 2021 by
an estimated £446,000.
6. Earnings Per Share on Underlying Profit
To provide a comparison of earnings per share on underlying performance, the
calculation below sets out basic and diluted earnings per share based on
underlying profits.
Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020 2021
Number Number Number
Weighted average number of shares in issue 12,517,241 12,509,543 12,470,827
Less: shares held under the ESOP* - (1,633) -
Weighted average number of shares in issue excluding the ESOP* shares 12,517,241 12,507,910 12,470,827
Maximum dilution with regards to share options 2,513 201,603 281,490
Diluted weighted average number of shares 12,519,754 12,709,513 12,752,317
* The ESOP was the Employee Share Ownership Plan, which was terminated on 9
August 2019.
Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020* 2021
£'000 £'000 £'000
Underlying profit / (loss) before tax (note 3) 407 (145) 145
Underlying taxation (531) 38 (147)
Underlying loss after tax (124) (107) (2)
Basic earnings per share on underlying loss (1.0p) (0.9p) 0.0p
Diluted earnings per share on underlying loss (1.0p) (0.9p) 0.0p
* Restated to exclude restructuring costs from underlying loss before tax.
7. Employee Benefits
The Company has elected to follow precedent and decided not to revalue its
pension obligations at the half-year. The Group's pension obligation, the
Falkland Islands Company Limited Pension Scheme, is unfunded and therefore not
subject to valuation volatility as a result of stock market fluctuations.
8. Cash and Cash Equivalents
Unaudited Unaudited Audited
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
Cash and cash equivalents in the balance sheet 7,976 14,367 14,556
8. Cash and Cash Equivalents (Continued)
Unaudited Unaudited Audited
Six Months to Six Months to Year Ended
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
Net (decrease) / increase in cash and cash equivalents (6,580) 5,259 5,451
Exchange losses - - (3)
Net (decrease) / increase in cash and cash equivalents after exchange gains (6,580) 5,259 5,448
Bank loan draw downs - (5,000) (5,000)
Bank loan repayments 5,468 170 624
Lease liabilities drawdown: non-cash - - -
Lease liabilities drawdown: cash - - (389)
Lease liabilities repayments 306 432 649
Decrease / (increase) in interest bearing loans and borrowings 5,774 (4,398) (4,116)
Net (increase) / decrease in debt (806) 861 1,332
Net debt brought forward (13,667) (14,999) (14,999)
Net debt (14,473) (14,138) (13,667)
Net debt
Cash balance 7,976 14,367 14,556
Less: Total interest-bearing loans and borrowings (22,449) (28,505) (28,223)
Net debt (14,473) (14,138) (13,667)
9. Interest-bearing Loans and Borrowings
Unaudited Unaudited Audited
30 September 30 September 31 March
2021 2020 2021
£'000 £'000 £'000
Non-current liabilities
Secured bank loans 13,702 19,638 17,313
Lease liabilities 7,344 7,399 7,486
Total non-current interest-bearing loans and lease liabilities 21,046 27,037 24,799
Current liabilities
Secured bank loans 940 926 2,797
Lease liabilities 463 542 627
Total current interest-bearing loans and lease liabilities 1,403 1,468 3,424
Total liabilities
Secured bank loans 14,642 20,564 20,110
Lease liabilities 7,807 7,941 8,113
Total interest-bearing loans and lease liabilities 22,449 28,505 28,223
10. Capital Commitments
At 30 September 2021 the Group had capital commitments of £1,061,000 (Momart:
£426,000 and FIC: £635,000) which have not been provided for in these
financial statements.
At 30 September 2020 the Group had capital commitments of £389,000 at Momart,
which have not been provided for in these financial statements.
Directors Registered Office
Robin Williams Non-executive Chairman Kenburgh Court
John Foster Chief Executive 133-137 South Street
Stuart Munro Chief Financial Officer Bishop's Stortford
Jeremy Brade Non-executive Director Hertfordshire CM23 3HX
Rob Johnston Non-executive Director E: admin@fihplc.com
Dominic Lavelle Non-executive Director W: www.fihplc.com
Registered number 03416346
Company Secretary
Iain Harrison
Corporate Information
Stockbroker and Nominated Adviser
W.H. Ireland Limited
24 Martin Lane,
London EC4R 0DR
Solicitors
BDB Pitmans LLP
50 Broadway,
Westminster,
London SW1H 0BL
Auditor
KPMG LLP
St. Nicholas House,
Park Row,
Nottingham NG1 6FQ
Registrar
Link Group
The Registry, 34 Beckenham Road,
Beckenham,
Kent BR3 4TU
Financial PR
Novella Communications
South Wing, Somerset House
London
WC2R 1LA
The Falkland Islands Company The Portsmouth Harbour Ferry Company Momart Limited
Clive Lane, Director
Kevin Ironside, Director T: 02392 524551 Steve Lane, Director
T: 00 500 27600 E: admin@gosportferry.co.uk T: 020 7426 3000
E: info@fic.co.fk (mailto:info@fic.co.fk) W: www.gosportferry.co.uk (http://www.gosportferry.co.uk) E: enquiries@momart.com
W: www.falklandislandscompany.com (http://www.falklandislandscompany.com) W: www.momart.com (http://www.momart.com)
www.fihplc.com
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. END IR FSLFWUEFSELFRecent news on FIH
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