Half-year Report
07/08/2018 07:00
RNS Number : 9737W
Slingsby(H.C.)Plc
07 August 2018
H C Slingsby plc ("Slingsby" or "the Company")
Report for the half year ended 30 June 2018
Statement by the Chairman
Trading
In my trading update of 19 June 2018, I reported that Group sales were 1% lower than prior year, overheads were increased and so performance was marginally lower in the five months to 31 May 2018. Lower levels of order intake during June 2018 led us to be cautious on the outlook for the results for the six months to 30 June 2018.
Group sales in the six months to 30 June 2018 were 2% below prior year resulting in a profit before tax of £76,000 compared to a prior year profit before tax of £123,000. The reduction in sales was mainly due to large orders delivered in the first half of 2017 not recurring in 2018.
We are pleased that the Group has sustained the profitable trading performance from 2017 (prior to the non-cash asset impairment). We do however remain cautious regarding the outlook due to the volatility that we have experienced in the recent past and the competitive nature of the marketplace.
Balance sheet
Group net assets have increased to £1.8m at 30 June 2018 from £0.4m at 31 December 2017. This is mostly due to a reduction in the liability relating to the defined benefit pension scheme from £8.6m to £7.2m despite the Company having not paid any deficit reduction contributions in the period. The retirement benefit obligation decreased during the six months to 30 June 2018 as a result of changes in assumptions regarding interest rates and inflation although this was offset by a reduction in the level of pension scheme assets.
We remain in discussion with the trustees of the Company Pension Scheme and the relevant authorities 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 £1.24m at 30 June 2018 (£1.65m at 30 June 2017) which represents an improvement from the position at 31 December 2017 of £1.58m. 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 sustained profitable trading performance is the result of the continued hard work by all our employees across the Group whom I would like to thank.
Dominic Slingsby
Interim Executive Chairman and Operations Director 7 August 2018
For further information please contact:
H C Slingsby plc
Dominic Slingsby, Interim Executive Chairman 01274 535 030
Morgan Morris, Group Chief Executive
Allenby Capital Limited
David Worlidge/Nicholas Chambers 020 3328 5656
| Half year | Half year | Year | ||
| ended | ended | ended | ||
| 30/06/18 (Unaudited) | 30/06/17 (Unaudited) | 31/12/17 (Audited) | ||
| Note | £'000 | £'000 | £'000 | |
| Revenue | 9,725 | 9,936 | 19,240 | |
| --------- | --------- | --------- | ||
| Operating profit before exceptional items | 210 | 291 | 557 | |
| Exceptional items | 2 | - | - | (1,221) |
| --------- | --------- | --------- | ||
| Operating profit/(loss) | 210 | 291 | (664) | |
| Finance costs | (134) | (168) | (331) | |
| -------- | -------- | -------- | ||
| Profit/(Loss) before taxation | 76 | 123 | (995) | |
| Taxation | 3 | 8 | (6) | (62) |
| -------- | -------- | -------- | ||
| Profit/(Loss) for the period attributable to equity shareholders | 84 -------- | 117 -------- | (1,057) -------- | |
| Basic and diluted profit/(loss) per share | 8.4p | 11.7p | (105.7p) | |
| -------- | -------- | -------- | ||
| Half year | Half year | Year | |||
| ended | ended | ended | |||
| 30/06/18 (Unaudited) | 30/06/17 (Unaudited) | 31/12/17 (Audited) | |||
| £'000 | £'000 | £'000 | |||
| Profit/(Loss) for the period | 84 | 117 | (1,057) | ||
| Items that will not be reclassified to profit or loss | |||||
| Remeasurements of post-employment benefit obligations | 1,565 | 326 | 1,276 | ||
| Movement in deferred tax relating to retirement benefit obligation | (266) | (152) | (246) | ||
| Items that may be subsequently reclassified to profit or loss | |||||
| Exchange adjustment | - | 5 | 8 | ||
| -------- | -------- | -------- | |||
| Other comprehensive income | 1,299 | 179 | 1,038 | ||
| -------- | -------- | -------- | |||
| Total comprehensive income/(expense) recognised for the period attributable to equity shareholders | 1,383 | 296 | (19) | ||
| -------- | -------- | -------- | |||
| 30/06/18 (Unaudited) | 30/06/17 (Unaudited) | 31/12/17 (Audited) | ||
| £'000 | £'000 | £'000 | ||
| Assets | ||||
| Non-current assets | ||||
| Property, plant and equipment | 4,469 | 5,753 | 4,472 | |
| Intangible assets | 754 | 1,003 | 877 | |
| Goodwill | 2,409 | 2,409 | 2,409 | |
| Deferred tax asset | 1,221 | 1,604 | 1,464 | |
| --------- | --------- | -------- | ||
| 8,853 | 10,769 | 9,222 | ||
| --------- | --------- | -------- | ||
| Current assets | ||||
| Inventories | 1,803 | 1,830 | 1,823 | |
| Trade and other receivables | 2,906 | 2,618 | 2,376 | |
| Cash and cash equivalents Current tax asset Derivative financial asset | 1,390 - 26 | 1,012 21 3 | 996 - - | |
| --------- | --------- | --------- | ||
| 6,125 | 5,484 | 5,195 | ||
| --------- | --------- | --------- | ||
| Liabilities | ||||
| Current liabilities | ||||
| Trade and other payables Bank borrowings Finance lease obligations | (3,006) (2,629) (3) | (2,938) (2,662) (44) | (2,389) (2,575) (30) | |
| Derivative financial instruments | - | - | (7) | |
| --------- | --------- | --------- | ||
| (5,638) | (5,644) | (5,001) | ||
| --------- | --------- | --------- | ||
| Net current assets / (liabilities) | 487 | (160) | 194 | |
| --------- | --------- | --------- | ||
| Non-current liabilities | ||||
| Retirement benefit obligation Finance lease obligations | (7,153) - | (9,430) (15) | (8,610) (7) | |
| Deferred tax liabilities | (420) | (465) | (415) | |
| --------- | --------- | --------- | ||
| Net assets | 1,767 | 699 | 384 | |
| --------- | --------- | --------- | ||
| Capital and reserves | ||||
| Share capital | 250 | 250 | 250 | |
| Retained earnings | 1,517 | 422 | 134 | |
| Translation reserve | - | 27 | - | |
| --------- | --------- | --------- | ||
| Total equity | 1,767 | 699 | 384 | |
| --------- | --------- | --------- | ||
| Share Capital £'000 | Retained earnings £'000 | Translation reserve £'000 | Total equity £'000 | |
| 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 |
| --------- | --------- | --------- | --------- | |
| At 1 January 2018 | 250 | 134 | - | 384 |
| Total comprehensive income recognised for the period | - | 1,383 | - | 1,383 |
| --------- | --------- | --------- | --------- | |
| At 30 June 2018 | 250 | 1,517 | - | 1,767 |
| --------- | --------- | --------- | --------- |
| Half year | Half year | Year | ||
| ended | ended | ended | ||
| 30/06/18 (Unaudited) | 30/06/17 (Unaudited) | 31/12/17 (Audited) | ||
| Note | £'000 | £'000 | £'000 | |
| Cash flows from operating activities | ||||
| Cash generated from operations | 4 | 499 | 184 | 334 |
| UK corporation tax received | - | 4 | 25 | |
| Interest paid | (26) | (39) | (70) | |
| --------- | --------- | --------- | ||
| Cash generated from operating activities | 473 | 149 | 289 | |
| --------- | --------- | --------- | ||
| Cash flows from investing activities | ||||
| Purchase of property, plant and equipment | (115) | (33) | (88) | |
| Purchase of intangible assets | - | (20) | (20) | |
| Proceeds from sales of property, plant and equipment | 16 | 2 | 9 | |
| --------- | --------- | --------- | ||
| Net cash outflow from investing activities | (99) | (51) | (99) | |
| --------- | --------- | --------- | ||
| Cash flows from financing activities | ||||
| Capital element of finance lease repayments | (35) | (22) | (44) | |
| Proceeds from borrowing | (7) | 65 | (39) | |
| --------- | --------- | --------- | ||
| Net cash (used in)/generated from financing activities | (42) | 43 | (83) | |
| --------- | --------- | --------- | ||
| Net increase in cash and cash equivalents | 332 | 141 | 107 | |
| Opening cash and cash equivalents | (366) | (479) | (479) | |
| Exchange differences | - | 5 | 5 | |
| --------- | --------- | --------- | ||
| Closing cash and cash equivalents | (34) | (333) | (367) | |
| --------- | --------- | --------- | ||
| 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 2017 Annual Report and Accounts except that the company has adopted IAS 15 'Revenue from Contracts with Customers'. The comparative figures for the year ended 31 December 2017 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 2017 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 | ||
| 30/06/18 (Unaudited) | 30/06/17 (Unaudited) | 31/12/17 (Audited) | ||
| £'000 | £'000 | £'000 | ||
| Asset impairment | - | - | 1,221 | |
| ---------- | --------- | --------- | ||
| - ---------- | - --------- | 1,221 --------- | ||
| The asset impairment relates to the company's freehold property. | ||||
| 3. | Taxation | Half year | Half year | Year |
| ended | ended | ended | ||
| 30/06/18 (Unaudited) | 30/06/17 (Unaudited) | 31/12/17 (Audited) | ||
| £'000 | £'000 | £'000 | ||
| Current tax | 10 | (21) | 40 | |
| Deferred tax | (18) | 27 | 22 | |
| --------- | --------- | --------- | ||
| (8) | 6 | 62 | ||
| --------- | --------- | --------- | ||
| The effective tax rate is nil. | ||||
| 4. | Cash generated from 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 | 76 | 123 | (995) | |
| Net finance costs | 134 | 168 | 331 | |
| Depreciation and amortisation | 230 | 243 | 480 | |
| Asset impairment | - | - | 1,221 | |
| Profit on sale of property, plant and equipment | (3) | (2) | (4) | |
| Pension deficit contributions | - | - | - | |
| Decrease/(Increase) in inventories | 20 | (19) | (12) | |
| (Increase)/Decrease in trade and other receivables | (555) | (101) | 143 | |
| Increase/(Decrease) in trade and other payables | 597 | (228) | (830) | |
| --------- | --------- | --------- | ||
| Cash generated from operating activities | 499 | 184 | 334 | |
| --------- | --------- | --------- | ||