Half-year Report
20/08/2021 07:00
RNS Number : 2445J
Slingsby(H.C.)Plc
20 August 2021
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
20 August 2021
H C Slingsby plc
("Slingsby" or "the Company")
Report for the half year ended 30 June 2021
Statement by the Chairman
Trading
In my trading update of 9 June 2021, I reported that Group sales in the four months to 30 April 2021 were 6% higher than prior year but that gross margin was lower, meaning that unaudited profit before tax was £0.1m compared to £0.2m in the prior year. We were cautious regarding the outlook due to continued uncertainty caused by the coronavirus pandemic. Whilst the Group's sales grew in 2020 due to demand for virus related products, the same level of order intake that was experienced in 2020 had not recurred in 2021. In addition, the Group has experienced significant cost price increases across its product range as well as higher shipping costs and delays which impacted on gross margin.
Group sales in the six months to 30 June 2021 were 5% lower than in the same period in 2020. This fall in sales together with a continuation in the trend regarding gross margin, led to an unaudited profit before tax of £0.1m in 2021 compared to an unaudited profit before tax of £0.4m in the same period in 2020.
The market remains competitive and it remains unclear what impact the pandemic will have on demand going forward. The downward trend in gross margin is likely to persist for the remainder of the year and there is also heightened potential for credit related issues should customers become insolvent.
Balance sheet
The Group had net assets of £1.96m at 30 June 2021 compared to net assets of £1.21m at 31 December 2020. This improvement is due to a decrease in the liability relating to the defined benefit pension scheme of £0.7m (after associated deferred tax). The retirement benefit obligation decreased during the six months to 30 June 2021 due to an increase in the discount rate used by the scheme actuary. This has the impact of decreasing scheme liabilities, which outweighed a decrease in the value of scheme assets. The Company made deficit reduction contributions totalling £199,000 in the six months to 30 June 2021, in line with the agreement with the scheme's Trustee.
Cashflow
The Group had net cash of £0.8m at 30 June 2021 (net debt of £0.4m at 30 June 2020) compared to £0.3m at 31 December 2020. The Group continues to operate within its existing banking facilities and the Directors continue to believe that the Group has additional funding options available should the need arise.
Dividend
Due to the uncertain outlook, the Board has decided not to declare an interim dividend. It is the Board's intention to re-commence dividend payments to shareholders as soon as it is prudent to do so.
People
We would like to thank our employees for their hard work and flexibility which has enabled the Group to continue its operations during a challenging time.
Dominic Slingsby
Interim Executive Chairman and Operations Director
For further information please contact:
H C Slingsby plc
Dominic Slingsby, Interim Executive Chairman 01274 535 030
Morgan Morris, Group Chief Executive
Allenby Capital Limited
David Worlidge / George Payne 020 3328 5656
| Half year | Half year | Year | ||
| ended | ended | ended | ||
| 30/06/21 (Unaudited) | 30/06/20 (Unaudited) | 31/12/20 (Audited) | ||
| Note | £'000 | £'000 | £'000 | |
| Revenue | 9,950 | 10,455 | 21,806 | |
| --------- | --------- | --------- | ||
| Operating profit | 156 | 505 | 1,263 | |
| Finance costs | (61) | (81) | (154) | |
| -------- | -------- | -------- | ||
| Profit before taxation | 95 | 424 | 1,109 | |
| Taxation | 2 | (26) | (38) | (163) |
| -------- | -------- | -------- | ||
| Profit for the period attributable to equity shareholders | 69 -------- | 386 -------- | 946 -------- | |
| Basic and diluted weighted average earnings per share | 6.6p | 38.6p | 92.3p | |
| -------- | -------- | -------- | ||
| Half year | Half year | Year | ||||
| ended | ended | ended | ||||
| 30/06/21 (Unaudited) | 30/06/20 (Unaudited) | 31/12/20 (Audited) | ||||
| £'000 | £'000 | £'000 | ||||
| Profit for the period | 69 | 386 | 946 | |||
| Items that will not be reclassified to profit or loss | ||||||
| Remeasurements of post-employment benefit obligations | 842 | (883) | (1,784) | |||
| Movement in deferred tax relating to retirement benefit obligation | (160) | 150 | 339 | |||
| -------- | -------- | -------- | ||||
| Other comprehensive income/(expense) | 682 | (733) | (1,445) | |||
| -------- | -------- | -------- | ||||
| Total comprehensive income/(expense) recognised for the period attributable to equity shareholders | 751 | (347) | (499) | |||
| -------- | -------- | -------- | ||||
| 30/06/21 (Unaudited) | 30/06/20 (Unaudited) | 31/12/20 (Audited) | ||
| £'000 | £'000 | £'000 | ||
| Assets | ||||
| Non-current assets | ||||
| Property, plant and equipment | 4,962 | 5,089 | 5,084 | |
| Intangible assets | 453 | 650 | 518 | |
| Goodwill | 700 | 700 | 700 | |
| Deferred tax asset | 1,367 | 1,239 | 1,553 | |
| --------- | --------- | -------- | ||
| 7,482 | 7,678 | 7,855 | ||
| --------- | --------- | -------- | ||
| Current assets | ||||
| Inventories | 2,164 | 2,456 | 2,224 | |
| Trade and other receivables | 2,658 | 3,046 | 2,632 | |
| Cash and cash equivalents Derivative financial asset | 2,076 2 | 1,696 7 | 1,781 - | |
| --------- | --------- | --------- | ||
| 6,900 | 7,205 | 6,637 | ||
| --------- | --------- | --------- | ||
| Liabilities | ||||
| Current liabilities | ||||
| Trade and other payables Bank borrowings Derivative financial obligations Lease obligations | (3,172) (1,275) - (34) | (3,534) (2,126) - (32) | (2,948) (1,506) (7) (34) | |
| Current tax liabilities | (150) | - | - | |
| --------- | --------- | --------- | ||
| (4,631) | (5,692) | (4,495) | ||
| --------- | --------- | --------- | ||
| Net current assets | 2,269 | 1,513 | 2,142 | |
| --------- | --------- | --------- | ||
| Non-current liabilities | ||||
| Retirement benefit obligation Lease obligations | (7,194) (15) | (7,359) (50) | (8,175) (32) | |
| Deferred tax liabilities | (583) | (458) | (582) | |
| --------- | --------- | --------- | ||
| Net assets | 1,959 | 1,324 | 1,208 | |
| --------- | --------- | --------- | ||
| Capital and reserves | ||||
| Share capital | 262 | 250 | 262 | |
| Share premium | 24 | - | 24 | |
| Retained earnings | 1,673 | 1,074 | 922 | |
| --------- | --------- | --------- | ||
| Total equity | 1,959 | 1,324 | 1,208 | |
| --------- | --------- | --------- | ||
| Share Capital £'000 | Share premium £'000 | Retained earnings £'000 | Total equity £'000 | |
| At 1 January 2020 | 250 | - | 1,421 | 1,671 |
| Total comprehensive expense recognised for the period | - | - | (347) | (347) |
| --------- | --------- | --------- | --------- | |
| At 30 June 2020 | 250 | - | 1,074 | 1,324 |
| --------- | --------- | --------- | --------- | |
| At 1 January 2021 | 262 | 24 | 922 | 1,208 |
| Total comprehensive income recognised for the period | - | - | 751 | 751 |
| --------- | --------- | --------- | --------- | |
| At 30 June 2021 | 262 | 24 | 1,673 | 1,959 |
| --------- | --------- | --------- | --------- |
| Half year | Half year | Year | ||
| ended | ended | ended | ||
| 30/06/21 (Unaudited) | 30/06/20 (Unaudited) | 31/12/20 (Audited) | ||
| Note | £'000 | £'000 | £'000 | |
| Cash flows from operating activities | ||||
| Cash generated from operations | 3 | 590 | 787 | 1,594 |
| UK corporation tax paid | - | - | (41) | |
| Interest received/(paid) | 1 | (12) | (13) | |
| --------- | --------- | --------- | ||
| Cash generated from operating activities | 591 | 775 | 1,540 | |
| --------- | --------- | --------- | ||
| Cash flows from investing activities | ||||
| Purchase of property, plant and equipment | (44) | (30) | (108) | |
| Purchase of intangible assets | (3) | (12) | (18) | |
| Proceeds from sales of property, plant and equipment | - | - | 6 | |
| --------- | --------- | --------- | ||
| Net cash outflow from investing activities | (47) | (42) | (120) | |
| --------- | --------- | --------- | ||
| Cash flows from financing activities | ||||
| Capital element of lease payments | (18) | (18) | (36) | |
| Proceeds from share issue | - | - | 36 | |
| Proceeds from/(repayment of) borrowing | - | 510 | (1,034) | |
| (Decrease)/Increase in overdraft | (231) | (807) | 117 | |
| --------- | --------- | --------- | ||
| Net cash used in financing activities | (249) | (315) | (917) | |
| --------- | --------- | --------- | ||
| Net increase in cash and cash equivalents | 295 | 418 | 503 | |
| Opening cash and cash equivalents | 1,781 | 1,278 | 1,278 | |
| --------- | --------- | --------- | ||
| Closing cash and cash equivalents | 2,076 | 1,696 | 1,781 | |
| --------- | --------- | --------- | ||
| 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 2020 Annual Report and Accounts. The comparative figures for the year ended 31 December 2020 do not constitute full financial statements and have been abridged from the full accounts for the year ended on that date, on which the auditors gave an unqualified report. They did not contain any statement under Section 498 of the Companies Act 2006. The 2020 accounts have been delivered to the Registrar of Companies. The Company has chosen not to adopt IAS 34 'Interim Financial Statements'. | ||||
| 2. | Taxation | Half year | Half year | Year |
| ended | ended | ended | ||
| 30/06/21 (Unaudited) | 30/06/20 (Unaudited) | 31/12/20 (Audited) | ||
| £'000 | £'000 | £'000 | ||
| Current tax | - | 24 | 150 | |
| Deferred tax | 26 | 14 | 13 | |
| --------- | --------- | --------- | ||
| 26 | 38 | 163 | ||
| --------- | --------- | --------- | ||
| The effective tax rate is 27%. | ||||
| 3. | Cash generated from operations | |||
| Half year | Half year | Year | ||
| ended | ended | ended | ||
| 30/06/21 (Unaudited) | 30/06/20 (Unaudited) | 31/12/20 (Audited) | ||
| £'000 | £'000 | £'000 | ||
| Profit before tax | 95 | 424 | 1,109 | |
| Net finance costs | 61 | 81 | 154 | |
| Depreciation and amortisation | 234 | 210 | 430 | |
| Defined benefit pension scheme contributions paid | (199) | (150) | (304) | |
| Profit on sale of property, plant and equipment | - | - | (6) | |
| Decrease/(Increase) in inventories | 60 | (322) | (90) | |
| Decrease in trade and other receivables | (27) | (652) | (231) | |
| Increase in trade and other payables | 366 | 1,196 | 532 | |
| --------- | --------- | --------- | ||
| Cash generated from operating activities | 590 | 787 | 1,594 | |
| --------- | --------- | --------- | ||