REG - Slingsby(H.C.)Plc - Final Results
18/05/2022 15:30
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RNS Number : 9893L Slingsby(H.C.)Plc 18 May 2022
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended. Upon the publication of this announcement
via the Regulatory Information Service, this inside information is now
considered to be in the public domain.
H C SLINGSBY PLC
("Slingsby" or the "Company" or the "Group")
Audited Results for the year ended 31 December 2021
Statement by the Chairman
Board Composition
Following the Board changes in 2016, I remain as Interim Executive Chairman
and during 2018 Morgan Morris was appointed Group Chief Executive. The Board
continues to believe that it would benefit from the appointment of new
Non-Executive Directors. Whilst this process should now be possible
following the release of restrictions relating to the Coronavirus and the
agreement with regard to the pension scheme detailed below, the Company's
inability to obtain Directors' and Officers' insurance cover in respect of
claims relating to the pension scheme has deterred suitable candidates. The
Board will continue to explore solutions to this issue, with the objective
remaining to appoint new Non-Executive Directors at the earliest opportunity.
Results
In the half year statement, I reported an operating profit of £0.16m on sales
of £9.95m. The full year operating profit (before exceptional items) was
£0.4m (2020: £1.3m) on sales of £19.8m (2020: £21.8m). Group sales
decreased by around 9%, which together with a reduction in gross margin, led
to a profit before taxation and exceptional items of £0.3m (2020: £1.1m).
The decrease in Group sales is principally due to a decline in demand for
Coronavirus related products compared to the 2020 year. The decline in gross
margin was due to increases in the cost of goods across the product range and
in freight charges. Profit before tax of £0.8m in 2021 (2020: £1.1m)
included an exceptional item of £0.53m relating to the increase in value of
the freehold property at Baildon.
ESE Direct Limited ("ESE") contributed £6.4m of sales (2020: £5.9m) and
profit before tax and management charges of £0.53m (2020: £0.51m). ESE's
sales recovered as ESE added more virus-related products to the range and its
customer base was more active during 2021, following the Government enforced
lockdowns in 2020.
Group earnings before interest, tax, depreciation, amortisation and
exceptional items ("EBITDA") in the year ended 31 December 2021 were £0.9m
(2020: £1.7m). The Group had net cash (after overdraft balances included in
trade and other payables) as at 31 December 2021 of £0.3m (2020: £0.3m).
Dividend
Despite the agreement reached with the Trustee of the defined benefit pension
scheme enabling the recommencement of dividends, the Board does not recommend
a final dividend for the year ended 2021 (2020: £nil). This is due to the
considerable uncertainty facing the Group at present which is discussed in
more detail below.
Under the agreement with the pension scheme, dividends are limited in their
quantum to £60,000 plus 50% of net cashflow over £150,000.
Pension Scheme
The Company paid £0.36m (2020: £0.30m) in deficit reduction contributions
during 2021 including an additional payment of £45,000 based on the Group's
cash generation in the year. The Company also continues to contribute
£0.16m towards the scheme's running costs.
At 31 December 2021, the pension scheme deficit decreased by £0.24m to £7.9m
(2020: £8.2m). This improvement in the pension scheme position together with
the profit generated in the year, increased the Group's net assets to £2.3m
(2020: £1.2m)
Recent Trading
Group sales in Q1 of 2022 against the same period in 2021 increased by 4%.
This improvement in sales offset the impact of a fall in gross margin leading
to an unaudited profit before tax in Q1 2022 of £0.16m compared to £0.14m in
the same period in 2021.
The market remains competitive, and the Board is cautious regarding outlook.
This is particularly the case due to the significant uncertainty that remains
caused by Coronavirus and the conflict in the Ukraine It is unclear as to
the impact that either of these events will have on demand going forward.
In addition, due to inflationary and supply pressures, the Group continues to
experience significant cost increases across its product range and in its
shipping costs. These increases impacted the gross margin in 2021 and have
continued into 2022. Supply chain issues, both in terms of supply of
components and availability of transport persist, impacting on customer
service levels and in some instances lost sales opportunities.
Finally, I would like to thank our staff across the Group for their efforts in
2021. The Coronavirus pandemic, whilst having a lesser impact on operations
as 2021 progressed, still presented the Group with operational and
organisational challenges which were overcome due to the attitude and hard
work of our employees.
D.S.Slingsby
Interim Executive Chairman
18 May 2022
For further information, please contact:
H C Slingsby PLC Tel: 01274 535 030
Dominic Slingsby, Interim Executive Chairman
Morgan Morris, Group Chief Executive
Allenby Capital Limited (Nominated Adviser & Broker) Tel: 020 3328 5656
David Worlidge / George Payne
Consolidated Income Statement for the year ended 31 December 2021
Note 2021 2020
£'000 £'000
Revenue 19,824 21,806
---------- ----------
Operating profit before exceptional items 410 1,263
Exceptional items 2 530 -
Operating profit 940 1,263
Finance costs (118) (154)
---------- ----------
Profit before taxation 822 1,109
Taxation (255) (163)
---------- ----------
Profit for the year attributable to owners of the parent 567 946
---------- ----------
Basic and diluted earnings per share 4 54.0p 92.3p
---------- ----------
Consolidated Statement of Comprehensive Income and Expense for the year ended
31 December 2021
2021 2020
£'000 £'000
Profit for the year 567 946
Items that will not be classified to profit or loss:
Re-measurements of post-employment benefit obligation (3) (1,784)
Movement in deferred tax relating to retirement benefit obligation
491 339
---------- ----------
Other comprehensive income/(expense) 488 (1,445)
---------- ----------
Total comprehensive income/(expense) for the year attributable to equity
shareholders
1,055 (499)
---------- ----------
Consolidated Balance Sheet as at 31 December 2021
Note 2021 2020
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 5,377 5,084
Intangible assets 386 518
Goodwill 700 700
Deferred tax asset 1,985 1,553
-------- ----------
8,448 7,855
-------- ----------
Current assets
Inventories 2,330 2,234
Trade and other receivables 2,764 2,632
Derivative financial asset 7 -
Cash and cash equivalents 1,999 1,781
-------- ----------
7,100 6,637
-------- ----------
Liabilities
Current liabilities
Trade and other payables (4,593) (4,454)
Derivative financial liability - (7)
Finance lease obligations (32) (34)
--------- ---------
(4,625) (4,495)
-------- ----------
Net current assets 2,475 2,142
-------- ----------
Non-current liabilities
Lease obligations - (32)
Retirement benefit obligation 3 (7,938) (8,175)
Deferred tax liabilities (722) (582)
-------- ----------
Net assets 2,263 1,208
-------- ----------
Capital and reserves
Share capital 262 262
Share Premium 24 24
Retained earnings 1,977 922
-------- ----------
Total equity 2,263 1,208
-------- ----------
Consolidated Cash Flow Statement for the year ended 31 December 2021
2021 2020
£'000 £'000
Note
Cash flows from operating activities
Cash generated from operations 5 331 1,594
Interest paid 1 (13)
UK corporation tax paid (150) (41)
-------- --------
Cash generated from operating activities 182 1,540
-------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (100) (108)
Proceeds from sales of property, plant and equipment 28 6
Purchase of intangible assets (3) (18)
-------- --------
Net cash used in investing activities (75) (120)
-------- --------
Cash flows from financing activities
Capital element of lease payments (36) (36)
Proceeds from share issue - 36
Repayment of borrowings - (1,034)
Increase in overdraft 147 117
-------- --------
Net cash generated from / (used in) financing activities 111 (917)
-------- --------
Net increase in cash and cash equivalents 218 503
1,781 1,278
Opening cash and cash equivalents
-------- --------
Closing cash and cash equivalents 1,999 1,781
-------- --------
Consolidated Statement of Changes in Shareholders' Equity
Share capital Share premium £'000 Retained earnings Total equity
£'000 £'000 £'000
1 January 2020 250 - 1,421 1,671
Profit for the year - - 946 946
Other comprehensive expense for the year - - (1,445) (1,445)
---------- --------- ---------- ----------
Total comprehensive expense for the year - - (499) (499)
---------- --------- ---------- ----------
Issue of shares 12 24 - 36
---------- --------- ---------- ----------
1 January 2021 262 24 922 1,208
Profit for the year - - 567 567
Other comprehensive income for the year - - 488 488
---------- --------- --------- ----------
Total comprehensive income for the year - 1,055 1,055
---------- --------- ---------- ----------
31 December 2021 262 24 1,977 2,263
---------- --------- ---------- ----------
Notes to the Preliminary Results for the year ended 31 December 2021
1. The preliminary financial information does not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006 for the financial
year ended 31 December 2021 but has been extracted from those accounts. The
annual accounts for the year ended 31 December 2021 have been prepared in
accordance with UK adopted International Accounting Standards. The financial
information included in this preliminary announcement does not include all the
disclosures required in accounts prepared in accordance with UK adopted
International Accounting Standards and accordingly it does not itself comply
with UK adopted International Accounting Standards.
The accounting policies used in the preparation of these preliminary results
have remained unchanged from those set out in the statutory accounts for the
year ended 31 December 2020. They are also consistent with those in the full
accounts for the year ended 31 December 2021 which have yet to be published.
The auditors have reported on the accounts for the year ended 31 December 2021
and their opinion was unqualified, did not include any matters to which the
auditor drew attention by way of emphasis and did not contain a statement
under section 498(2) or (3) of the Companies Act 2006.
The comparative information included in this preliminary announcement has been
extracted from the statutory accounts for the year ended 31 December 2020. The
auditors have also reported on these accounts and their opinion was
unqualified, did not include any matters to which the auditor drew attention
by way of emphasis and did not contain a statement under section 498(2) or (3)
of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2020 have been delivered to
the Registrar of Companies and those for the financial year ended 31 December
2021 will be delivered following the Company's annual general meeting.
2. Exceptional item 2021 2020
£'000 £'000
Property impairment reversal 530 -
------------ ------------
530 -
------------ ------------
3. Retirement benefit obligation
2021 2020
£'000 £'000
Present value of funded obligation 25,061 25,182
Fair value of scheme assets (17,123) (17,007)
------------ ------------
Net liability in balance sheet 7,938 8,175
------------ ------------
4. Earnings per share
Basic profit per share is based upon a profit of £567,000 (2020: £946,000)
and on 1,050,000 (2020: 1,025,000) ordinary shares in issue during the year.
There is no difference between basic profit per share and diluted loss per
share for both years as there are no potentially dilutive shares in issue.
5. Cash generated from operating activities
2021 2020
£'000 £'000
Profit before tax 822 1,109
Net finance costs 118 154
Depreciation and amortisation 461 430
Defined benefit pension scheme contributions paid (357) (304)
Property impairment reversal (530) -
Profit on sale of property, plant and equipment (17) (6)
Increase in inventories (107) (90)
Increase in trade and other receivables (137) (231)
Increase in trade and other payables 78 532
------------ ------------
Cash generated from operating activities 331 1,594
------------ ------------
6. Dividends
No dividends were paid or declared during 2020 or 2021 and the Directors are
not proposing any final dividend be payable in respect of the year ended 31
December 2021.
7. Availability of Report and Accounts
The financial statements for the year ended 31 December 2021, containing a
notice of the Annual General Meeting will be posted to shareholders shortly
and will be available on the Company's website
www.slingsby.com/investor-relations.
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