REG - Slingsby(H.C.)Plc - Half-year Report
04/08/2022 07:00
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RNS Number : 8377U Slingsby(H.C.)Plc 04 August 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. With the publication of this announcement,
this information is now considered to be in the public domain.
4 August 2022
H C Slingsby plc
("Slingsby" or "the Company")
Report for the half year ended 30 June 2022
Statement by the Chairman
Trading
In my trading update of 21 June 2022, I reported that Group sales in the five
months to 31 May 2022 were 8% higher than prior year but that gross margin was
lower, meaning that unaudited profit before tax was £0.17m compared to
£0.07m in the prior year. We were cautious regarding the outlook due to the
significant uncertainty remaining from the aftermath of the coronavirus
pandemic, the impact that high inflation may have on the UK economy and the
ongoing conflict in the Ukraine.
I am pleased to report that Group sales in the six months to 30 June 2022 were
10% higher than in the same period in 2021. This increase in sales offset
the continuation in the trend regarding gross margin and higher overhead costs
and led to an unaudited profit before tax of £0.24m in the six months ended
30 June 2022 compared to an unaudited profit before tax of £0.1m in the same
period in 2021.
The market remains competitive, and it remains unclear what impact the
aforementioned factors will have on demand going forward. The Group
continues to experience cost inflation across most areas of its business
(goods, freight and overheads) and there is a risk that the UK economy will
enter recession in H2 2022. There is also heightened potential for credit
related issues should customers become insolvent.
Balance sheet
The Group had net assets of £4.68m at 30 June 2022 (£1.96m at 30 June 2021)
compared to net assets of £2.26m at 31 December 2021. This improvement is
mostly due to a decrease in the liability relating to the defined benefit
pension scheme of £2.2m (after associated deferred tax). The retirement
benefit obligation decreased during the six months to 30 June 2022 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 £159,000 in the six months to 30 June 2022 in line with the
agreement with the scheme's Trustee.
Cashflow
The Group had net cash of £0.5m at 30 June 2022 (£0.8m at 30 June 2021)
compared to £0.3m at 31 December 2021. 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 remains 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
during continued challenging times.
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 (Nominated Adviser and Broker)
David Worlidge/George Payne
020 3328 5656
Unaudited Condensed Consolidated Income Statement for the half year ended 30
June 2022
Half year Half year Year
ended ended ended
30/06/22 30/06/21 31/12/21
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Revenue 10,977 9,950 19,824
--------- --------- ---------
Operating profit before exceptional items 316 156 410
Exceptional items - - 530
Finance costs (72) (61) (118)
-------- -------- --------
Profit before taxation 244 95 822
Taxation 2 (62) (26) (255)
-------- -------- --------
Profit for the period attributable to equity shareholders 182 69 567
-------- -------- --------
Basic and diluted weighted average earnings per share 17.3p 6.6p 54.0p
-------- -------- --------
The results set out above derive entirely from continuing operations.
The above unaudited condensed consolidated income statement should be read in
conjunction with the accompanying notes.
Unaudited Consolidated Statement of Comprehensive Income and Expense for the
half year ended 30 June 2022
Half year Half year Year
ended ended ended
30/06/22 30/06/21 31/12/21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit for the period 182 69 567
-------- -------- --------
Items that will not be reclassified to profit or loss
Remeasurements of post-employment benefit obligations 2,985 842 (3)
Movement in deferred tax relating to retirement
benefit obligation (746) (160) 491
-------- -------- --------
Other comprehensive income 2,239 682 488
-------- -------- --------
Total comprehensive income recognised for the period attributable to equity
shareholders
2,421 751 1,055
-------- -------- --------
The above unaudited consolidated statement of comprehensive income and expense
should be read in conjunction with the accompanying notes.
Unaudited Consolidated Balance Sheet as at 30 June 2022
30/06/22 30/06/21 31/12/21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 5,332 4,962 5,377
Intangible assets 319 453 386
Goodwill 700 700 700
Deferred tax asset 1,216 1,367 1,985
--------- --------- --------
7,567 7,482 8,448
--------- --------- --------
Current assets
Inventories 2,806 2,164 2,330
Trade and other receivables 3,120 2,658 2,764
Cash and cash equivalents 2,229 2,076 1,999
Derivative financial asset 3 2 7
--------- --------- ---------
8,158 6,900 7,100
--------- --------- ---------
Liabilities
Current liabilities
Trade and other payables (3,579) (3,172) (2,884)
Bank borrowings (1,764) (1,275) (1,653)
Lease obligations (15) (34) (32)
Current tax liabilities (96) (150) (56)
--------- --------- ---------
(5,454) (4,631) (4,625)
--------- --------- ---------
Net current assets 2,704 2,269 2,475
--------- --------- ---------
Non-current liabilities
Retirement benefit obligation (4,865) (7,194) (7,938)
Lease obligations - (15) -
Deferred tax liabilities (722) (583) (722)
--------- --------- ---------
Net assets 4,684 1,959 2,263
--------- --------- ---------
Capital and reserves
Share capital 262 262 262
Share premium 24 24 24
Retained earnings 4,398 1,673 1,977
--------- --------- ---------
Total equity 4,684 1,959 2,263
--------- --------- ---------
The above unaudited consolidated balance sheet should be read in conjunction
with the accompanying notes.
Unaudited Consolidated Statement of Changes in Shareholders' Equity
Share Capital Share premium £'000 Retained earnings Total equity
£'000 £'000 £'000
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
--------- --------- --------- ---------
At 1 January 2022 262 24 1,977 2,263
Total comprehensive income recognised for the period -
- 2,421 2,421
--------- --------- --------- ---------
At 30 June 2022 262 24 4,398 4,684
--------- --------- --------- ---------
The above unaudited consolidated statement of changes in shareholders' equity
should be read in conjunction with the accompanying
notes.
Unaudited Consolidated Statement of Cash Flows for the half year ended 30 June
2022
Half year Half year Year
ended ended ended
30/06/22 30/06/21 31/12/21
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 3 228 590 331
UK corporation tax paid - - (150)
Interest received - 1 1
--------- --------- ---------
Cash generated from operating activities 228 591 182
--------- --------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (101) (44) (100)
Purchase of intangible assets - (3) (3)
Proceeds from sales of property, plant and equipment 9 - 28
--------- --------- ---------
Net cash outflow from investing activities (92) (47) (75)
--------- --------- ---------
Cash flows from financing activities
Capital element of lease payments (17) (18) (36)
Increase/(decrease) in overdraft 111 (231) 147
--------- --------- ---------
Net cash generated from/(used in) financing activities 94 (249) 111
--------- --------- ---------
Net increase in cash and cash equivalents 230 295 218
Opening cash and cash equivalents 1,999 1,781 1,781
--------- --------- ---------
Closing cash and cash equivalents 2,229 2,076 1,999
--------- --------- ---------
The above unaudited consolidated statement of cash flows should be read in
conjunction with the accompanying notes.
Notes to the Interim Report for the half year ended 30 June 2022
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 2021 Annual Report and Accounts.
The comparative figures for the year ended 31 December 2021 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 2021 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
30/06/22 30/06/21 31/12/21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current tax 40 - 56
Deferred tax 22 26 199
--------- --------- ---------
62 26 255
--------- --------- ---------
The effective tax rate is 25%.
3. Cash generated from operations
Half year Half year Year
ended ended ended
30/06/22 30/06/21 31/12/21
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit before tax 244 95 822
Net finance costs 72 61 118
Depreciation and amortisation 215 234 461
Defined benefit pension scheme contributions paid (159) (199) (357)
Property impairment reversal - - (530)
Profit on sale of property, plant and equipment (9) - (17)
(Increase)/decrease in inventories (476) 60 (107)
Increase in trade and other receivables (352) (27) (137)
Increase in trade and other payables 693 366 78
--------- --------- ---------
Cash generated from operating activities 228 590 331
--------- --------- ---------
4. Availability of Interim Report
The Interim Report will be available on the Company's website
www.slingsby.com.
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