REG - Slingsby(H.C.)Plc - Results for the year ended 31 December 2022
02/05/2023 07:00
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RNS Number : 9647X Slingsby(H.C.)Plc 02 May 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. Upon the publication of this announcement
via the Regulatory Information Service, this inside information is now
considered to be in the public domain.
2 May 2023
H C SLINGSBY PLC
("Slingsby" or the "Company" or the "Group")
Audited Results for the year ended 31 December 2022
Statement by the Chairman
Board Composition
Following the Board changes in 2016, I remain as Interim Executive Chairman
and since 2018 Morgan Morris has been the appointed Group Chief Executive.
The Board continues to believe that it would benefit from the appointment of
new Non-Executive Directors. This should now be possible following the
release of restrictions relating to the Coronavirus, the agreement with regard
to the pension scheme detailed below and the re-instatement of Directors' and
Officers' insurance cover in respect of claims relating to the pension scheme,
which had deterred previously suitable candidates. The Board will continue to
explore solutions to this issue, with the objective remaining to appoint new
Non-Executive Directors and a Non-Executive Chairman.
Results
In the half year statement, I reported an operating profit (before exceptional
items) of £0.32m on sales of £11.0m. The full year operating profit (before
exceptional items) was £0.63m (2021: £0.41m) on sales of £21.6m (2021:
£19.8m). Group sales increased by 9%, which together with an improved gross
margin, led to a profit before taxation and exceptional items of £0.49m
(2021: £0.29m). The increase in Group sales is principally due to the Group
passing cost price increases which occurred across its product ranges on to
customers. This action resulted in the improvement in gross margin in
2022.
Profit before tax of £0.8m in 2021, included an exceptional item of £0.53m
relating to the increase in value of the freehold property at Baildon.
Within 2022, there have been no exceptional items recorded.
ESE Direct Limited ("ESE") contributed £7m of sales (2021: £6.4m) and profit
before tax and management charges of £0.54m (2021: £0.53m). ESE's sales
increased mainly due to passing on cost prices increases to customers.
Group earnings before interest, tax, depreciation, amortisation and
exceptional items ("EBITDA") in the year ended 31 December 2022 were £1.1m
(2021: £0.9m). The Group had net cash (after overdraft balances included in
trade and other payables) as at 31 December 2022 of £0.03m (2021: £0.35m).
Group cash balances reduced due to increased working capital requirements and
investment in fixed assets.
Dividend
Despite the agreement reached with the Trustee of the defined benefit pension
scheme enabling the recommencement of dividends, the Board does not recommend
the declaration of a final dividend for the year ended 31 December 2022 (2021:
£nil). This is due to the Board adopting a prudent view to maintain cash
resources within the Group.
Under the agreement with the pension scheme, dividends are limited in their
quantum to £60,000 plus 50% of net cashflow over £150,000 per annum.
Pension Scheme
The Company paid £0.35m (2021: £0.36m) in deficit reduction contributions
during 2022. The Company also continues to contribute £0.16m (2021:
£0.16m) towards the scheme's running costs. The Group is scheduled to pay
£406,000 in deficit reduction contributions in 2023. Contributions rise
each year by inflation with a review at 1 January 2023 which is in progress.
At 31 December 2022, the pension scheme deficit decreased by £2.4m to £5.49m
(2021: £7.94m). This improvement in the pension scheme position (which is
£1.7m after the decrease in the related deferred tax asset) together with the
profit generated in the year, increased the Group's net assets to £4.3m
(2021: £2.3m). The improved pension position was largely due to increases
in the discount rate.
Recent Trading and Future Developments
Group sales in Q1 of 2023 against the same period in 2022 increased by 5%.
This improvement in sales at a higher gross margin was offset by increased
overhead costs. This led to an unaudited profit before tax in Q1 2023 of
£0.12m compared to £0.16m in the same period in 2022.
On 30(th) March 2023, Slingsby acquired certain assets of Stakrak Limited
("Stakrak"). Stakrak trades primarily through the websites Stakrak,
GasCageDirect and SecurityCagesDirect selling a range of similar and
complimentary products but specialising in mesh cage solutions. The
consideration for the purchase was £0.11m funded from existing cash
resources.
The market remains competitive, and the Board is cautious regarding the
outlook. This is particularly the case due to the significant uncertainty
that remains caused by the continuing conflict in the Ukraine, the risk of a
recession in the Group's main UK market and that the longer term impacts of
the Coronavirus pandemic and Brexit are not yet fully known. It is unclear
as to the impact that these events will have on demand going forward.
In addition, inflationary pressures remain leading to cost increases across
the product range and in overheads. This could impact on the Group's gross
margin and profits in 2023. Whilst supply chain issues have lessened both in
terms of supply of components and availability of transport, they remain
problematic and impact on customer service levels and in some instances could
lead to lost sales opportunities.
Finally, I would like to thank our staff across the Group for their efforts in
2022. The Group has faced numerous challenges in recent years which were
overcome due to the positive attitude and hard work of our employees.
D.S.Slingsby
Interim Executive Chairman
28 April 2023
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
Alex Brearley/George Payne
Consolidated Income Statement for the year ended 31 December 2022
Note 2022 2021
£'000 £'000
Revenue 21,564 19,824
---------- ----------
Operating profit before exceptional items 627 410
Exceptional items 2 - 530
Operating profit 627 940
Finance costs (142) (118)
---------- ----------
Profit before taxation 485 822
Taxation (105) (255)
---------- ----------
Profit for the year attributable to owners of the parent 380 567
---------- ----------
Basic and diluted earnings per share 4 36.2p 54.0p
---------- ----------
Consolidated Statement of Comprehensive Income and Expense for the year ended
31 December 2022
2022 2021
£'000 £'000
Profit for the year 380 567
Items that will not be classified to profit or loss:
Re-measurements of post-employment benefit obligation 2,235 (3)
Movement in deferred tax relating to retirement benefit obligation
(559) 491
---------- ----------
Other comprehensive income 1,676 488
---------- ----------
Total comprehensive income for the year attributable to equity shareholders
2,056 1,055
---------- ----------
Consolidated Balance Sheet as at 31 December 2022
Note 2022 2021
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 5,418 5,377
Intangible assets 249 386
Goodwill 700 700
Deferred tax asset 1,373 1,985
-------- ----------
7,740 8,448
-------- ----------
Current assets
Inventories 2,683 2,330
Trade and other receivables 2,962 2,764
Derivative financial asset - 7
Cash and cash equivalents 2,243 1,999
-------- ----------
7,888 7,100
-------- ----------
Liabilities
Current liabilities
Trade and other payables (5,007) (4,593)
Derivative financial liability - -
Finance lease obligations (20) (32)
--------- ---------
(5,027) (4,625)
-------- ----------
Net current assets 2,861 2,475
-------- ----------
Non-current liabilities
Lease obligations (113) -
Retirement benefit obligation 3 (5,492) (7,938)
Deferred tax liabilities (677) (722)
-------- ----------
Net assets 4,319 2,263
-------- ----------
Capital and reserves
Share capital 262 262
Share Premium 24 24
Retained earnings 4,033 1,977
-------- ----------
Total equity 4,319 2,263
-------- ----------
Consolidated Cash Flow Statement for the year ended 31 December 2022
2022 2021
£'000 £'000
Note
Cash flows from operating activities
Cash generated from operations 5 (27) 331
Interest paid - 1
UK corporation tax paid (49) (150)
-------- --------
Cash (used in)/generated from operating activities (76) 182
-------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (211) (100)
Proceeds from sales of property, plant and equipment 24 28
Purchase of intangible assets (22) (3)
-------- --------
Net cash used in investing activities (209) (75)
-------- --------
Cash flows from financing activities
Capital element of lease payments (35) (36)
Increase in overdraft 564 147
-------- --------
Net cash generated from financing activities 529 111
-------- --------
Net increase in cash and cash equivalents 244 218
1,999 1,781
Opening cash and cash equivalents
-------- --------
Closing cash and cash equivalents 2,243 1,999
-------- --------
Consolidated Statement of Changes in Shareholders' Equity
Share capital £'000 Share premium £'000 Retained earnings Total equity £'000
£'000
1 January 2021 262 24 922 1,208
Profit for the year - - 567 567
Other comprehensive expense for the year - - 488 488
---------- --------- ---------- ----------
Total comprehensive expense for the year - - 1,055 1,055
---------- --------- ---------- ----------
1 January 2022 262 24 1,977 2,263
Profit for the year - - 380 380
Other comprehensive income for the year - - 1,676 1,676
---------- --------- --------- ----------
Total comprehensive income for the year - 2,056 2,056
---------- --------- ---------- ----------
31 December 2022 262 24 4,033 4,319
---------- --------- ---------- ----------
Notes to the Preliminary Results for the year ended 31 December 2022
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 2022 but has been extracted from those accounts. The
annual accounts for the year ended 31 December 2022 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 2021. They are also consistent with those in the full
accounts for the year ended 31 December 2022 which have yet to be published.
The auditors have reported on the accounts for the year ended 31 December 2022
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 2021. The
auditors 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 2021 have been delivered to
the Registrar of Companies and those for the financial year ended 31 December
2022 will be delivered following the Company's annual general meeting.
2. Exceptional item 2022 2021
£'000 £'000
Property impairment reversal - 530
------------ ------------
- 530
------------ ------------
3. Retirement benefit obligation
2022 2021
£'000 £'000
Present value of funded obligation 14,735 25,061
Fair value of scheme assets (9,243) (17,123)
------------ ------------
Net liability in balance sheet 5,492 7,938
------------ ------------
4. Earnings per share
Basic profit per share is based upon a profit of £380,000 (2021: £567,000)
and on 1,050,000 (2021: 1,050,000) 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 (used in)/generated from operating activities
2022 2021
£'000 £'000
Profit before tax 485 822
Net finance costs 142 118
Depreciation and amortisation 464 461
Defined benefit pension scheme contributions paid (352) (357)
Property impairment reversal - (530)
Profit on sale of property, plant and equipment (24) (17)
Increase in inventories (353) (107)
Increase in trade and other receivables (192) (137)
Increase in trade and other payables (197) 78
------------ ------------
Cash (used in)/generated from operating activities (27) 331
------------ ------------
6. Dividends
No dividends were paid or declared during 2021 or 2022 and the Directors are
not proposing any final dividend be payable in respect of the year ended 31
December 2022.
7. Availability of Report and Accounts
The financial statements for the year ended 31 December 2022, 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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