REG - Slingsby(H.C.)Plc - Half-year Report
04/08/2023 07:00
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RNS Number : 2822I Slingsby(H.C.)Plc 04 August 2023
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 2023
H C Slingsby plc
("Slingsby" or "the Company")
Report for the half year ended 30 June 2023
Statement by the Chairman
Trading
In my statement in the trading update of 15 June 2023, I reported that Group
sales in the four months to 30 April 2023 were 3% higher than prior year at a
higher gross margin. However overhead costs had increased, leading to an
unaudited profit before tax of £0.1m compared to £0.19m in the four months
ending 30 April 2022. We were cautious regarding the outlook for the
business due to significant uncertainty remaining mainly caused by the
continuing conflict in Ukraine, the risk of a recession in the Group's main UK
market and the longer term impacts of Coronavirus and Brexit not yet being
fully known.
Group sales in the six months to 30 June 2023 ("H1") are 4% higher than in the
same period in 2022. The trends in gross margin and overheads have continued
in the second quarter and as a result unaudited profit before tax was £0.20m
in the six months ended 30 June 2023 compared to an unaudited profit before
tax of £0.24m in the same period in 2022. The H1 profit is after £0.13m
(2022: £0.07m) of finance costs which relate to interest charges on the
pension scheme deficit.
In June 2023 we were notified that one of our main logistics partners had
ceased trading, subsequently entering insolvency proceedings. This caused
some disruption to operations and increased freight costs during that month
because alternative transport options came at a higher cost. This had a
modest impact upon gross margin in June and an effect on gross margin could
persist during the remainder of the year, despite the Company implementing
mitigating initiatives which are ongoing.
The market continues to be highly competitive, and it remains unclear what
impact the aforementioned factors will have on demand going forward.
Inflationary pressures remain, particularly in regards to overheads and this
is considered by the Directors likely to persist for the remainder of the
year. In the current economic environment, there is also heightened
potential for credit related issues should customers become insolvent.
Balance sheet
The Group had net assets of £4.41m at 30 June 2023 (£4.68m at 30 June 2022)
compared to net assets of £4.32m at 31 December 2022. The reduction in net
assets from 30 June 2022 is due to an increase in the pension scheme deficit
outweighing profits generated. The Company made deficit reduction
contributions totalling £200,000 in the six months to 30 June 2023 in line
with the agreement with the pension scheme's Trustee. The triennial review
carried out by the scheme actuary is underway and a new schedule of
contributions is required to be agreed between the Company and the scheme
Trustee before 31 March 2024. This causes the potential for uncertainty
regarding the Group's future cash flows.
Cashflow
The Group had net cash of £0.4m at 30 June 2023 (£0.5m at 30 June 2022)
compared to £0.03m at 31 December 2022. 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.
Board Composition
The Board continues to believe that it would benefit from the appointment of
new Non-Executive Directors. The Board is continuing to explore solutions to
the issue with the objective remaining to appoint new Non-Executive Directors
and a Non-Executive Chairman.
Statement by the Chairman (continued)
Dividend
Due to the uncertain outlook, the Board has decided not to declare an interim
dividend.
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 Advisor and Broker)
Alex Brearley/George Payne
020 3328 5656
Unaudited Condensed Consolidated Income Statement for the half year ended 30
June 2023
Half year Half year Year
ended ended ended
30/06/23 30/06/22 31/12/22
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Revenue 11,458 10,977 21,564
--------- --------- ---------
Operating profit before exceptional items 329 316 627
Exceptional items - - -
Finance costs (132) (72) (142)
-------- -------- --------
Profit before taxation 197 244 485
Taxation 2 (68) (62) (105)
-------- -------- --------
Profit for the period attributable to equity shareholders 129 182 380
-------- -------- --------
Basic and diluted weighted average earnings per share 12.3p 17.3p 36.2p
-------- -------- --------
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 2023
Half year Half year Year
ended ended ended
30/06/23 30/06/22 31/12/22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit for the period 129 182 380
-------- -------- --------
Items that will not be reclassified to profit or loss
Remeasurements of post-employment benefit obligations (49) 2,985 2,235
Movement in deferred tax relating to retirement
benefit obligation 12 (746) (559)
-------- -------- --------
Other comprehensive (expense)/income (37) 2,239 1,676
-------- -------- --------
Total comprehensive income recognised for the period attributable to equity
shareholders
92 2,421 2,056
-------- -------- --------
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 2023
30/06/23 30/06/22 31/12/22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 5,357 5,332 5,418
Intangible assets 315 319 249
Goodwill 700 700 700
Deferred tax asset 1,369 1,216 1,373
--------- --------- --------
7,741 7,567 7,740
--------- --------- --------
Current assets
Inventories 2,695 2,806 2,683
Trade and other receivables 3,285 3,120 2,962
Cash and cash equivalents 2,464 2,229 2,243
Derivative financial asset - 3 -
--------- --------- ---------
8,444 8,158 7,888
--------- --------- ---------
Liabilities
Current liabilities
Trade and other payables (3,307) (3,579) (2,687)
Bank borrowings (2,031) (1,764) (2,217)
Lease obligations (20) (15) (20)
Derivative Financial Liability (7) - -
Current tax liabilities (154) (96) (103)
--------- --------- ---------
(5,519) (5,454) (5,027)
--------- --------- ---------
Net current assets 2,925 2,704 2,861
--------- --------- ---------
Non-current liabilities
Retirement benefit obligation (5,475) (4,865) (5,492)
Lease obligations (103) - (113)
Deferred tax liabilities (677) (722) (677)
--------- --------- ---------
Net assets 4,411 4,684 4,319
--------- --------- ---------
Capital and reserves
Share capital 262 262 262
Share premium 24 24 24
Retained earnings 4,125 4,398 4,033
--------- --------- ---------
Total equity 4,411 4,684 4,319
--------- --------- ---------
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 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
--------- --------- --------- ---------
At 1 January 2023 262 24 4,033 4,319
Total comprehensive income recognised for the period - - 92 92
--------- --------- --------- ---------
At 30 June 2023 262 24 4,125 4,411
--------- --------- --------- ---------
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
2023
Half year Half year Year
ended ended ended
30/06/23 30/06/22 31/12/22
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Cash flows from operating activities
Cash generated from/(used in) operations 3 611 228 (27)
UK corporation tax paid - - (49)
Interest paid (3) - -
--------- --------- ---------
Cash generated from operating activities 608 228 (76)
--------- --------- ---------
Cash flows from investing activities
Interest received 2 - -
Purchase of property, plant and equipment (74) (101) (211)
Purchase of intangible assets (125) - (22)
Proceeds from sales of property, plant and equipment 6 9 24
--------- --------- ---------
Net cash outflow from investing activities (191) (92) (209)
--------- --------- ---------
Cash flows from financing activities
Capital element of lease payments (10) (17) (35)
(Decrease)/increase in overdraft (186) 111 564
--------- --------- ---------
Net cash (used in)/generated from financing activities (196) 94 529
--------- --------- ---------
Net increase in cash and cash equivalents 221 230 244
Opening cash and cash equivalents 2,243 1,999 1,999
--------- --------- ---------
Closing cash and cash equivalents 2,464 2,229 2,243
--------- --------- ---------
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 2023
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 presented and
prepared in accordance with the policies set out in the 2022 Annual Report and
Accounts. The comparative figures for the year ended 31 December 2022 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 2022 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
30/06/23 30/06/22 31/12/22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current tax 52 40 96
Deferred tax 16 22 9
--------- --------- ---------
68 62 105
--------- --------- ---------
The effective tax rate is 25%.
3. Cash generated from/(used in) operations
Half year Half year Year
ended ended ended
30/06/23 30/06/22 31/12/22
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit before tax 197 244 485
Net finance costs 135 72 142
Depreciation and amortisation 194 215 464
Defined benefit pension scheme contributions paid (200) (159) (352)
Property impairment reversal - - -
Profit on sale of property, plant and equipment (6) (9) (24)
Increase in inventories (12) (476) (353)
Increase in trade and other receivables (323) (352) (192)
Increase/(decrease) in trade and other payables 626 693 (197)
--------- --------- ---------
Cash generated from/(used in) operating activities 611 228 (27)
--------- --------- ---------
4. Availability of Interim Report
The Interim Report will be available on the Company's website
www.slingsby.com.
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