Half-yearly Report
30/11/2011 07:00
29 November 2011
PHSC PLC
("PHSC", "the Company" or "Group")
Interim Report 2011
GROUP CHIEF EXECUTIVE OFFICER'S STATEMENT
for the six months ended 30 September 2011
Financial Highlights
* Group turnover (consolidated) for the period was 2.135m compared with
2.387m for the same period last year.
* EBITDA of 114k, compared with 106k for the same period last year.
* Basic earnings per share at the interim stage are 0.64p compared with 0.61p
achieved in the corresponding period last year.
* Net cash generated by operating activities was 242k (120k generated in
the same period last year).
* Overall cash and cash equivalents stood at 805k at the end of the period
compared with 749k at the year ended 31 March 2011. Cash has increased
despite 207k paid out in dividends.
* Net asset value (unaudited) of 5.133m or 49p pence per Ordinary Share
compared to a current share price (mid) of 16p pence
Trading overview
The Group continues to trade profitably but does so against a backdrop of a
difficult marketplace where there appear to be fewer opportunities for
additional work and reductions in margins for new work that is won.
Each subsidiary has seen a reduction in revenues but has been able to
marginally improve the bottom line at the interim stage by prudent management
of costs. Financial statistics are given for each trading subsidiary later in
this statement.
The Board believes that the second half of the year will be significantly
better than the first, something that has consistently happened in previous
years. This is due to various factors, including the pattern of public sector
spending.
We have taken the decision to relocate our subsidiary Envex Company Limited
from rented offices in Berkshire to the Group-owned office of Adamson's
Laboratory Services Ltd in Essex. There will be net savings after the cost of
office closure has been offset against lower future overheads.
Costs of running the parent company have decreased by about 12% from 228,500
to 200,300 for the first half year as a result of directors agreeing to lower
salaries and other contributory factors. The Board continues to seek ways to
achieve savings.
Outlook
Whilst the level of long-term contracts continues to be fairly stable, the
volume of ad-hoc work is unpredictable and visibility is never more than a few
months ahead. The Board, however, remains reasonably optimistic that the
Company's performance over the full year will be broadly in line with what was
achieved in the previous year.
In our Annual Report we said that cost-cutting may lead to an overall
improvement in margins but cautioned that in a volatile marketplace there can
be no certainty. There are presently no signs of any increase in the level of
confidence that our clients have in their own prospects, meaning they are
cautious about allocation of budgets to services such as those we provide.
Dividend prospects
As in previous years, the Board is not recommending payment of an interim
dividend, but expects to propose an appropriate final dividend at the end of
the year.
Our special dividend of 1.0p, giving a total dividend of 2.0p per Ordinary
Share, drew positive responses from the majority of investors. The Board is not
averse to considering a similar distribution in relation to the current year,
subject to this being judged appropriate in all the circumstances.
Despite a cash outflow of 207k pertaining to the dividend payment mentioned
above, the Company's cash reserves stood 56k higher at the end of the period
compared with 31 March 2011.
Net Asset Value
As at 30 September 2011, the Company had net assets of 5.133m (unaudited) as
per these interim accounts. There were 10,381,973 Ordinary Shares in issue at
that date which equates to a net asset value (NAV) per share of 49 pence. At 16
pence per share the Ordinary Shares of the Company are currently trading at
approximately a 67% discount to the net asset value.
Performance by Trading Subsidiaries
Profit/loss figures for individual subsidiaries are stated before tax and
inter-company charges (including the costs of operating the plc which are
recovered through management charges to trading subsidiaries), interest paid
and received, depreciation and amortisation.
Adamson's Laboratory Services Limited
Invoiced sales of 947,271 yielding a profit of 18,929 (the figures for the
same period last year were 978,607 and 7,206).
Envex Company Limited
Invoiced sales of 65,136 yielding a profit of 8,761 for the period (the
figures for the same period last year were 85,336 and 27,420).
Inspection Services (UK) Limited
Invoiced sales of 126,111 yielding a profit of 10,901 (the figures for the
same period last year were 123,272 and 12,359).
Personnel Health and Safety Consultants Limited
Invoiced sales of 392,777 yielding a profit of 175,102 (the figures for the
same period last year were 462,650 and 202,706).
RSA Environmental Health Limited
Invoiced sales of 246,057 yielding a profit of 11,658 (the figures for the
same period last year were 367,847 and 15,942).
Quality Leisure Management Limited
Invoiced sales of 357,816 yielding a profit of 83,162 (the figures for the
same period last year were 369,239 and 62,104).
Stephen King - Group Chief Executive Officer
For further information please contact:
PHSC plc
Stephen King 01622 717700
www.phsc.plc.uk
Northland Capital Partners Limited
(Nominated Adviser and Broker)
Gavin Burnell / Rod Venables 020 7796 8800
Group Statement of Comprehensive Six Six Year
Income months months
ended
ended ended
30 Sept 30 Sept 31 Mar
11 10 11
Note Unaudited
'000 '000 '000
Continuing operations
Revenue 2,135 2,387 4,814
Cost of sales (1,147) (1,324) (2,636)
Gross profit 988 1,063 2,178
Other income 2 4 66
Administrative expenses (899) (987) (1,917)
Profit from operations 91 80 327
Finance income 5 1 1
Finance costs - - -
Profit before taxation 96 81 328
Corporation tax expense (29) (19) (89)
Profit after taxation and total
comprehensive income
from continuing operations 67 62 239
Profit after taxation and total 67 62 239
comprehensive income
Attributable to:
Equity holders of the Group 67 62 239
Earnings per share for profit after tax and
total comprehensive income from continuing
operations
attributable to the equity holders of the
Group during the period
Basic 4 0.64p 0.61p 2.33p
Group Statement of Financial Position 30 Sept 30 Sept 31 Mar
11 10 11
Unaudited
Note '000 '000 '000
Non-current assets
Property, plant and equipment 3 795 829 817
Goodwill 3,315 3,313 3,315
Deferred tax asset 1 5 1
4,111 4,147 4,133
Current assets
Inventories 2 2 2
Trade and other receivables 1,096 1,481 1,382
Cash and cash equivalents 805 587 749
1,903 2,070 2,133
Total assets 6,014 6,217 6,266
Current liabilities
Trade and other payables 598 643 756
Current corporation tax payable 102 47 56
Short term provisions 100 250 100
800 940 912
Non-current liabilities
Long-term provisions - 100 -
Deferred taxation liabilities 81 80 81
81 180 81
Total liabilities 881 1,120 993
Net assets 5,133 5,097 5,273
Capital and reserves attributable to
equity
holders of the Group
Called up share capital 1,038 1,038 1,038
Share premium account 1,497 1,497 1,497
Capital redemption reserve 144 144 144
Retained earnings 2,454 2,418 2,594
5,133 5,097 5,273
Group Statement of Changes
in Equity
Share Share Capital Retained Total
Capital
Premium Redemption Earnings
Reserve
'000 '000 '000 '000 '000
Balance at 1 April 2010 1,038 1,497 144 2,449 5,128
Profit for the period - - - 62 62
attributable to equity
holders
Dividends - - - (93) (93)
Balance at 30 September 2010 1,038 1,497 144 2,418 5,097
Balance at 1 April 2011 1,038 1,497 144 2,594 5,273
Profit for the period - - - 67 67
attributable to equity
holders
Dividends - - - (207) (207)
Balance at 30 September 2011 1,038 1,497 144 2,454 5,133
Group Statement of Cash Flows Six Six Year
months months
ended ended ended
30 Sept 30 Sept 31 Mar
11 10 11
Unaudited
'000 '000 '000
Cash flows from operating activities
Cash generated from operations 242 120 616
Tax refunded/(paid) 17 (146) (203)
Net cash generated from/(used by) 259 (26) 413
operating activities
Cash flows used in investing activities
Purchase of property, plant and equipment (1) (17) (33)
Purchase of subsidiary companies - 11 (250)
Disposal proceeds fixed assets - 1 1
Interest received 5 1 1
Net cash used in investing activities 4 (4) (281)
Cash flows used in financing activities
Dividends paid to group shareholders (207) (93) (93)
Net cash used in financing activities (207) (93) (93)
Net increase/(decrease) in cash and cash 56 (123) 39
equivalents
Cash and cash equivalents at beginning of 749 710 710
year
Cash and cash equivalents at end of year 805 587 749
Notes to the cash flow statement
Cash generated from operations
Operating profit - continuing operations 91 80 327
Depreciation charge 23 25 51
Loss on sale of fixed assets - 1 10
Decrease in trade and other receivables 285 235 335
Decrease in trade and other payables (157) (221) (107)
Cash generated from operations 242 120 616
Notes to the Financial Statements
1.
These interim financial statements for the period ended 30 September 2011 have
been prepared in accordance with International Financial Reporting Standards
(IFRSs). The Group financial statements consolidate the financial statements of
PHSC plc and all its subsidiary undertakings made up to 30 September 2011.
All companies in the Group use sterling as presentational and functional
currency.
The information presented within these interim financial statements is in
compliance with IAS 34 "Interim Financial Reporting". This requires the use of
certain accounting estimates and requires that management exercise judgement in
the process of applying the Group's accounting policies. The areas involving a
high degree of judgement or complexity, or areas where the assumptions and
estimates are significant to the interim financial statements are disclosed
below:
(a) Provisions
The Group recognises a provision where a legal or constructive obligation
exists at the balance sheet date and a reliable estimate can be made of the
likely outcome. A 100,000 liability has been provided within short term
provisions relating to the payment due on the second anniversary of the
acquisition of Quality Leisure Management.
(b) Impairment of goodwill
The Group Chief Executive Officer's Statement refers to the difficulty in
evaluating future trading volumes and profitability in respect of each
subsidiary company in the current economic climate. For this reason the Board
is to defer any decision regarding the impairment of goodwill until the year
end.
The financial information contained in this report, which has not been audited,
does not constitute statutory accounts as defined by Section 434 of the
Companies Act 2006. The Group's statutory financial statements for the year
ended 31 March 2011, prepared under IFRS have been filed with the Registrar of
Companies. The auditors' report for the 2011 financial statements was
unqualified and did not contain a statement under Section 498 (2) or (3) of the
Companies Act 2006.
Notes to the Financial Statements
(continued)
30 Sept 30 Sept 31 Mar 11
11 10
Unaudited
2 Segmental Reporting '000 '000 '000
Revenue
PHSC plc - - -
Personnel Health & Safety 393 463 928
Consultants Ltd
RSA Environmental Health Limited 246 368 661
Adamson's Laboratory Services Ltd 947 979 2,095
Envex Company Ltd 65 85 177
Inspection Services Ltd 126 123 247
Quality Leisure Management Ltd 358 369 706
2,135 2,387 4,814
Profit/(loss) after taxation
PHSC plc (13) - 9
Personnel Health & Safety 77 95 134
Consultants Ltd
RSA Environmental Health Limited 4 6 4
Adamson's Laboratory Services Ltd (53) (89) (1)
Envex Company Ltd 2 16 32
Inspection Services Ltd 4 4 5
Quality Leisure Management Ltd 46 30 56
67 62 239
Total assets
PHSC plc 4,334 4,280 4,035
Personnel Health & Safety 670 697 746
Consultants Ltd
RSA Environmental Health Limited 584 605 602
Adamson's Laboratory Services Ltd 1,027 1,237 1,335
Envex Company Ltd 89 93 110
Inspection Services Ltd 148 161 167
Quality Leisure Management Ltd 200 186 309
7,052 7,259 7,304
Adjustment of goodwill (1,038) (1,042) (1,038)
6,014 6,217 6,266
Notes to the Financial Statements 30 Sept 11 30 Sept 10 31 Mar 11
(continued)
Unaudited
3 Property, plant and equipment '000 '000 '000
Cost or valuation
Brought forward 1,158 1,159 1,159
Additions 1 17 33
Disposals - (11) (34)
Carried forward 1,159 1,165 1,158
Depreciation
Brought forward 341 320 320
Charge 23 25 51
Disposals - (9) (30)
Carried forward 364 336 341
Net book value 795 829 817
4 Earnings per share
The calculation of the basic earnings per share is based on the following
data:
Earnings 30 Sept 11 30 Sept 10 31 Mar 11
'000 '000 '000
Unaudited
Continuing activities 67 62 239
Number of shares 30 Sept 11 30 Sept 10 31 Mar 11
Weighted average number of shares for the
purpose
of basic earnings per share 10,381,973 10,276,019 10,381,973
Effect of dilutive warrants - 29,949 -
Weighted average number of shares for the
purpose
of diluted earnings per share - 10,305,968 -
END