REG-PHSC Plc: Final Results for the year ended 31 March 2023
08/08/2023 07:15
8 August 2023
PHSC PLC
(“PHSC”, the “Company” or the “Group”)
Final Results for the year ended 31 March 2023
Availability of Annual Report and Notice of Annual General Meeting
PHSC (AIM: PHSC), a leading provider of health, safety, hygiene and
environmental consultancy services and security solutions to the public and
private sectors, is pleased to announce its audited results for its financial
year ended 31 March 2023.
FINANCIAL HIGHLIGHTS
• Underlying EBITDA of £0.366m compared to £0.274m in the
prior year
• Profit after tax of £0.243m compared to a loss after tax of
£0.631m in the prior year, the latter mainly due to writing off goodwill in
respect of the Security Division
• Group revenue of £3.438m, down from £3.571m in the prior
year
• Group net assets increased to £3.638m from £3.513m
• Statutory earnings per share of 2.05p compared to a loss per
share of 4.76p in the prior year
• Cash reserves of £0.750m at the year end up from £0.649m for
the prior year
• Final dividend of 1.0p proposed, making a total of 1.5p for
the year compared with 1.0p last year
31.3.23 31.3.22
£ £
Profit/(loss) before tax 304,598 (577,798)
Less: interest received (1,346) (388)
Add: depreciation 63,034 58,812
Add: impairment of B2BSG Solutions Limited goodwill - 676,178
Add: impairment of Inspection Services (UK) Limited goodwill - 117,240
Underlying EBITDA* 366,286 274,044
* - Underlying EBITDA is calculated as earnings before interest, tax,
depreciation and impairment charges. This is used by the board as a measure
of underlying trading and has been provided to assist shareholders in
understanding the Group’s trading activities.
Annual General Meeting (“AGM”) and Availability of full 2023 Annual Report
This year’s AGM will be held at 10.00 a.m. on Thursday, 28 September 2023 at
The Old Church, 31 Rochester Road, Aylesford, Kent ME20 7PR.
The full annual report and accounts for the financial year to 31 March 2023
and notice of AGM are expected to be posted to shareholders on or around 10
August 2023 and will shortly be made available to download from the
Company’s website at: www.phsc.plc.uk.
Dividend
The Company confirms that, subject to shareholder approval at its forthcoming
AGM, an increased final dividend of 1.0p per share will be payable on 13
October 2023 to shareholders on the register on 29 September 2023.
For further information please contact:
PHSC plc
Stephen King Tel: 01622 717 700
Stephen.king@phsc.co.uk
www.phsc.plc.uk
Strand Hanson Limited (Nominated Adviser) Tel: 020 7409 3494
James Bellman / Matthew Chandler
Novum Securities Limited (Broker) Tel: 020 7399 9427
Colin Rowbury
About PHSC
PHSC, through its trading subsidiaries, Personnel Health & Safety Consultants
Ltd, RSA Environmental Health Ltd, QCS International Ltd, Inspection Services
(UK) Ltd and Quality Leisure Management Ltd, provides a range of health,
safety, hygiene, environmental and quality systems consultancy and training
services to organisations across the UK. In addition, B2BSG Solutions Ltd
offers innovative security solutions including tagging, labelling and CCTV.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
CHIEF EXECUTIVE OFFICER’S REPORT
I am pleased to report that the Group has built on the post-pandemic progress
made in the prior year and has generally returned to normal trading across all
subsidiaries. With the carrying value of our Security Division having been
written down to zero in 2021-22, there is no impairment to report for
2022-23. Accordingly, the Group returned to profitability and the board is
proposing an increased final dividend to shareholders.
The board has determined that a higher distribution is justified in
conjunction with a planned third share buyback programme, which will be
confirmed, and further details announced as soon as practicable following
publication of the Annual Report utilising the existing authority. To
maintain flexibility, the board is seeking renewed authority at the
forthcoming 2023 AGM for further potential share buybacks however shareholders
should not assume that such renewed authority, if granted, will necessarily be
utilised.
Individual subsidiary performance is considered in some detail later in this
report.
GENERAL BUSINESS OVERVIEW AND OUTLOOK
Security Division
Having written off the carrying value of this part of the Group’s business
in 2021-22, management focussed on how best to commence a rebuilding of the
division through better cost control and improved margins. This is a
medium-term objective and is subject to variables outside the Company’s
control such as exchange rates, costs of shipping and the general economic
climate as it affects the retail sector. Prior to central charges and some
write-down of slow-moving stock, the business broke even over the year under
review. There were increases to both revenues and costs, however profit
margins remained suppressed due to the aforementioned external factors. It
is anticipated that there will be some respite in that transportation costs
have progressively reduced from the 2021-22 highs and the business has been
able to raise prices on some contracts. The client base remains
overwhelmingly centred on the retail sector and includes supermarkets,
department stores and garden centres.
Systems Division
Results from this part of the Group’s business were extremely encouraging
and the division built upon the good progress made in 2021-22. Revenue was up
more than £100,000, the majority of which fed through to the bottom line as
evident in the more detailed financial summary later in this report.
Consultancy sales were strong throughout the year and benefitted from
long-term, valuable contracts on safety support for regular clients. Sales of
UK Responsible Person services in connection with the supply of medical
devices were higher than anticipated due to both additional clients, and
increased work from the existing client base following changes in the
regulatory framework for registration.
Training delivery returned to pre-pandemic levels and the year ended with
strong sales figures for both in-house and public training.
Safety Division
Progress was made in respect of the profitability of servicing clients in the
education and leisure sectors, although higher revenues were adversely
impacted by the higher costs incurred in connection with delivering our
services. Additional costs were experienced throughout the division,
compounded by staff salaries being increased twice during the year to mitigate
against persistently high inflation rates and rising domestic energy costs.
Total revenue was markedly lower due to a large commission-only agreement in
respect of COVID-19 testing during the pandemic which positively skewed the
2021-22 results.
Cash reserves
Cash at bank increased year-on-year from approximately £649,000 to £750,000
reflecting the cash generative nature of our operations. The total cost of
servicing dividends, maintained at the same level, was lower, as a result of
approximately 2.8 million fewer ordinary shares being in issue following the
successful buyback programme implemented in the prior year. As noted above,
it is proposed that, subject to shareholder approval at the forthcoming AGM,
the final dividend be increased to return a greater proportion of cash to
shareholders, given that the Group remains cash-generative with excess
reserves for its currently foreseeable requirements.
The Group’s cash position following payment of the proposed enhanced final
dividend and planned further share buyback programme, should be more than
sufficient for all currently anticipated expenditure. To underpin this
position and provide flexibility/headroom the Group also has a currently
unutilised facility with HSBC Bank plc of an initial £50,000 in the unlikely
event it is required.
The Group’s only borrowings relate to certain leases in respect of land and
buildings and motor vehicles, further details of which are provided in note 13
to the full annual report and accounts.
Net asset value
The Group’s net asset value of approximately £3.638m equates to a little
over 30p per ordinary share and has remained consistently higher than the
Company’s market share price on AIM. The equivalent net asset value at the
end of the previous year was circa 3 per cent. lower, at approximately
£3.513m.
Outlook
Management expectations across the Group, despite the slow start to the year
based on Q1 figures, are that 2023-24 has the potential to be another
successful year. Where it is practical to do so, we will seek to apply
modest price increases to our fee rates in a bid to recover the majority of
the extra costs we are facing. In the current environment, some areas of
expenditure are almost certain to continue to rise but others including energy
bills and shipping of security products appear more stable. Recruitment and
retention of personnel remains challenging and represents our most significant
cost category.
Each subsidiary currently appears to be on a stable footing and are well
placed to continue to trade profitably and generate cash flow over the
remainder of the current financial year.
Trading update
Unaudited Group management accounts for Q1 of the current financial year show
total revenue of approximately £0.754m and EBITDA of approximately £49,100
(Q1 2022-23: £0.862m and £0.1m respectively).
Dividends
A total dividend of 1.0p per ordinary share (£124,020) was paid in respect of
the financial year ended 31 March 2022. An interim dividend of 0.5p in
respect of the financial year ended 31 March 2023 was paid in February 2023
(£59,190) and, subject to shareholder approval, a final dividend of 1.0p to
be paid from earnings from the financial year ended 31 March 2023 is proposed
to be paid in October 2023, representing an increase of 0.5p or 50 per cent.
on last year’s total.
PERFORMANCE BY TRADING SUBSIDIARY
The Group currently utilises the following key performance indicators (KPIs).
Total revenues
Total revenues are reviewed each month across the Group to provide the board
with a ready measure of how well the Group and its underlying businesses are
performing relative to historical data. It enables any trend to be detected,
interpreted and acted upon as appropriate. Consolidated Group revenues for the
year decreased by approximately 3.7% but when a £400k adjustment is made to
the 2021-22 turnover for a one-off contract with a single customer for
COVID-19 testing services, a 7.5% increase in turnover is evident, which the
board views as being a good outturn in the current challenging market
conditions.
Earnings before interest, taxation, depreciation and amortisation (underlying
EBITDA)
The Group’s underlying EBITDA increased from £274,044 in 2021-22 to
£366,286 in 2022-23.
Staff turnover
Staff turnover is closely monitored as the key asset of each subsidiary is its
workforce. Recruiting replacement staff is an expensive task and it is not
always possible to compensate for the specialised knowledge that may be lost
when an employee departs. During the year, 3 people left the employment of the
Group and no new staff were recruited, resulting in 34 employees at the year
end, excluding 7 PHSC plc and subsidiary directors.
Pre-tax profit/(loss) per subsidiary before Group management charges
Profit before tax and management charges is reviewed by each subsidiary and by
the board every month. Each subsidiary director provides a commentary to
enable the board to establish whether intervention of any kind is appropriate.
A summary of the results and activities of our trading subsidiaries is set out
below. Performance is based on those factors within a subsidiary director’s
control, such that results are shown exclusive of management charges and
taxation and any impairment provision judged to be necessary. The parent
company covers its own management costs by levying a charge on each subsidiary
and derives other income through the receipt of dividends from its
subsidiaries.
B2BSG Solutions Limited (B2BSG)
• 2023: revenues of £829,900 yielding a loss of £9,100 after a
slow-moving stock write down of £9,100
• 2022: revenues of £749,200 yielding a loss of £79,200 after
a slow-moving stock write down of £55,000
B2BSG ended the year with sales that were £80k higher than in 2021-22. An
end of year adjustment for currency revaluation resulted in a total negative
loss variance of £7.3k due to adverse exchange rates over the course of the
year. Effectively, the business traded at around break-even before management
charges and a £9.1k year-end stock provision. This compares very favourably
with the loss sustained in the previous year.
A two-year contract with a national supermarket group, awarded before the
Brexit protocol was known, came to an end in March 2023. Costs associated with
this particular contract had led to an almost total elimination of gross
margin. Costs were higher than anticipated due to an Irish VAT registration
being required, product inflation which we were unable to recover as prices
were fixed, and an escalation in transport costs. Upon its expiry, this
contract was formally renegotiated and renewed for a further two years on much
more favourable terms, which should facilitate the company’s recovery
strategy.
Another national supermarket chain is embarking on a refurbishment exercise
for its security infrastructure in 2023-24, and B2BSG are in the early stages
of installing equipment to assist them in carrying out their programme.
The mix of clients now has more of a bias towards food retail. Some economists
are suggesting that there may be signs of recovery in bricks and mortar retail
activity more generally which, if borne out, would bode well for B2BSG.
Inspection Services (UK) Limited (ISL)
• 2023: revenues of £198,100 yielding a profit of £7,000
• 2022: revenues of £186,600 yielding a profit of £8,700
ISL achieved increased revenues of £198,100, being £11,500 ahead of the
prior year’s total sales of £186,600. The resulting profit achieved fell
by £1,700 year-on-year to £7,000. The improvement in revenues was more
than offset by higher costs incurred in delivering the services, most notably
in terms of travel and accommodation charges, which increased by almost
£3,000. Subcontractor costs rose by £2,500 and were approximately 40% higher
than in 2021-22. Staff salaries were increased twice during the year to
mitigate against high inflation figures and rising domestic energy costs. Such
pay adjustments were necessary but resulted in around £4,000 of unplanned
additional expenditure. Most of ISL’s work is sourced through insurance
brokers in exchange for commission payments. Broker commissions were similar
to the prior year. There were no bad debts arising during the year and the
company remains cashflow-positive. Overall, its client portfolio remains
stable, with most work comprising repeat business.
Personnel Health & Safety Consultants Limited (PHSCL)
• 2023: revenues of £806,700 yielding a profit of £268,300
• 2022: revenues of £1,283,100 yielding a profit of £351,000
Trading returned to more normal levels after maximising opportunities for
safety and risk management brought about by the COVID-19 pandemic. PHSCL’s
revenue and profit were lower than the previous year but in line with
management’s expectations. During the year, online systems continued to be
reviewed to help streamline the business and optimise the company’s ability
to pitch for larger contracts as well as to widen its service offering to
existing clients. There has been an increasing level of interest expressed
from both prospective and current customers as a result of applying a personal
touch whereby customers are able to speak to a person rather than automated
support. This approach will continue to be promoted whilst developing ways
to enhance services with online systems that also adopt a more personal
perspective. The business’s main challenge at the current time is its
ability to attract the right level of consultant expertise due to a general
skills shortage which goes wider than PHSCL. Subject to securing the services
of appropriately qualified fee-earning staff there is confidence in respect of
opportunities to grow revenue.
QCS International Limited (QCS)
• 2023: revenues of £834,600 yielding a profit of £272,100
• 2022: revenues of £724,100 yielding a profit of £189,600
Trading has returned to pre-COVID-19 levels, with consultancy sales
exceeding £400,000 for the first time. There continues to be a high
level of repeat business combined with income from new clients with whom
long-term relationships will be sought. Income from the UK Responsible
Person service for medical devices exceeded management’s expectations by a
considerable margin due to a mixture of new clients and increased work from
the existing client base following changes in the regulatory framework for
registration. Training is now back at pre-pandemic levels; the year ended with
very positive sales figures for both public and in-house courses, with
combined training income approaching £350,000 for the year. To meet and
manage demand, the company calls upon the services of consultants employed by
other Group companies as appropriate and has ambitions to grow revenues in the
year ahead. Profit for the year was £272,100 (compared to £189,600 in
2021-22) which reflects a combination of improved sales and tight cost
control.
Quality Leisure Management Limited (QLM)
• 2023: revenues of £402,400 yielding a profit of £137,500
• 2022: revenues of £323,600 yielding a profit of £100,900
Business started strongly in 2022 for both auditing and training as there was
pent-up demand post the pandemic abating. Training requirements dropped
slightly towards the latter part of the financial year though training via
video conferencing remained popular. In addition to reducing staff travel
time and costs recharged to clients, video conferencing affords greater
accessibility to those clients only requiring a small number of participants
or for those who were unable to attend the in-house delivered course.
Demand for audits remained strong, involving support for clients in verifying
processes and procedures as their facilities returned to fully operational
status. Both audit and training income streams were significantly up on
management’s expectations.
Consultancy in relation to health and safety and quality systems was a
significant source of income in 2022-23 with QLM supporting clients in the
development of their policies, processes, procedures and systems.
Expert witness work was lower than in previous years as leisure facilities
were closed for significant periods during the pandemic and UK courts are
struggling to catch up with delays and postponements.
Cost of sales increased in proportion to income. Consultant and subcontractor
salaries and fees were reflective of the higher costs of delivery as well as
greater activity.
RSA Environmental Health Limited (RSA)
• 2023: revenues of £365,900 yielding a profit of £69,800
• 2022: revenues of £304,000 yielding a profit of £53,600
Annual revenue showed a 20% increase compared to 2021-22 and the company is
now trading at similar levels to those experienced prior to the pandemic.
The increase in sales led to profits not seen since 2018-19. The majority of
income streams were above expectations, with the exception of general health
and safety consultancy services but this was only because consultants’ fee
earning time was being utilised for the provision of other services. Food
safety consultancy has seen some welcome growth over the last year.
Rather than employ additional members of staff, employees from elsewhere
within the Group and trusted associates were used to provide extra fee-earning
capability. Such strategy helped to keep costs under control and enabled the
company to deal efficiently with the peaks and troughs in its workload.
In previous years, the company’s focus has been to diversify its service
offering and strengthen its presence in the markets in which it operates.
These efforts have continued and resulted in a more even spread of revenues
across the services provided. This will continue to be a focus to make the
company more resilient.
SafetyMARK services saw revenues continue to recover. Demand for these
services remains strong especially within the independent school’s market.
There is a high retention rate with schools demonstrating that they see value
in the services RSA offers.
Training services remain strong, with a focus on school-based Institution of
Occupational Safety and Health (IOSH) accredited training courses. These
have proved very popular with schools and demand continues to be strong with
good profits achieved.
PHSC plc
• 2023: net loss of £442,300 before management charges,
interest and dividends received
• 2022: net loss of £409,200 before management charges,
goodwill impairment, interest and dividends received
The Company incurs costs on behalf of the Group and does not generate any
income; the costs relate to running an AIM quoted Group.
PRINCIPAL RISKS AND UNCERTAINTIES
Pandemic
The financial impact of the coronavirus pandemic continued to ease with
business activity returning towards pre-pandemic levels. Inevitably, there
are legacy impacts in particular on the high street where consumers’
shopping habits have shifted towards greater on-line ordering, and this
represents a concern to the Security Division where retail outlets form a
significant part of its customer base. Conversely, the Systems and Safety
Divisions are continuing to experience a rebound in activity as clients catch
up on projects that were previously deferred or cancelled. The Group’s
ability to deliver services remotely as an alternative to a face-to-face
offering is more appealing to some customers and this alternative continues to
be offered where appropriate.
Regulatory/Marketplace
Approximately 50% of the Group’s work involves assisting organisations with
the implementation of measures to meet regulatory requirements relating to
health and safety at work. If the regulatory burden was to be substantially
lightened, for example if the government embarked upon a programme of radical
deregulation, there could be less demand for the Group’s services. Changes
to the operation of the employer’s liability insurance system, as proposed
in some quarters, could reduce the incentive for organisations to buy in
claims-preventive services such as health and safety advice. In mitigation
of these risks, the board has diversified the Group’s range of offerings,
for example, through investing in its Systems Division and continues to
explore non-regulatory areas of environmental work to add to the current
portfolio of services.
The Group’s Security Division works almost exclusively in the retail sector,
and this has continued to suffer as a result of weak consumer demand on the
high street and the move towards on-line purchasing, which accelerated during
the COVID-19 pandemic. Any further material deterioration in the retail
sector and specifically in B2BSG’s client base would have a significant
negative effect on the company’s and hence the Group’s prospects. To
mitigate any future negative effects, the Group wrote off the carrying value
of its Security Division in 2021-22 in full and periodically reviews the need
to make financial provision against the value of stock held in its warehouse.
Technological
The Group’s website is a primary source of new business. If the website
became inaccessible for protracted periods, or was subject to “hacking”,
this may prejudice the opportunity to obtain new business. Additionally, the
increase in the use of the internet for satisfying business requirements may
lead to a reduction in demand for face-to-face consultancy services and the
number of training courses commissioned may be affected by moves towards
screen-based interactive learning.
The subject of IT security is regularly reviewed by the board to ensure that
appropriate strategies are in place. The Aylesford based businesses (PHSC
plc, PHSCL and ISL) have been re-certified to Cyber Essentials standard and
all staff across the Group have participated in on-line training to reduce the
risk of falling victim to phishing and other such scams. All head office
data is backed up to the Cloud and removeable hard drives attached to the
physical server are rotated on a daily basis.
Personnel
Generally, there is an excess of demand over supply for health and safety
professionals. Those with sufficient qualifications and experience to be
suitable for consultancy roles are in the minority. This constraint has the
combined effect of making it difficult for the Group to source suitable
personnel and having to offer higher remuneration packages to attract them.
The Group is dependent upon its current executive management team. Whilst it
has entered into contractual arrangements with the aim of securing the
services of these personnel, the retention of their services cannot be
guaranteed. Accordingly, the loss of any key member of management of the
Group may have an adverse effect on the future of the Group’s business.
The Group and each subsidiary have contingency plans in place in the event of
incapacity of key personnel.
Geographical
The Group offers a nationwide service, but a number of organisations see
benefit in using consultancies that are local to them and internet search
engines favour local providers. With offices in Kent, Berkshire,
Northamptonshire and Scotland, the Group has a good geographical spread.
Licences
The Group is reliant on licences and accreditations to be able to carry on its
business. The temporary loss of, or failure to maintain, any single licence
or accreditation would be unlikely to be materially detrimental to the Group,
as the directors believe that this could be remedied. However, if the Group
fails to remedy any loss of, or does not maintain, any licence or
accreditation, this will have a material adverse effect on the business of the
Group. The Group has internal processes in place to ensure that its licences
and accreditations are maintained.
Climate risk
The board is mindful of climate risk and will continue to evaluate what
potential implications the changing climate may have on both the business
activities of the Group and its clients.
SECTION 172 STATEMENT
The Companies (Miscellaneous Reporting) Regulations require large companies to
publish a statement describing how the directors have had regard to the
matters set out in section 172 (1) (a) to (f) of the Companies Act 2006.
These sections require directors to act in a way most likely to promote the
success of the Group for the benefit of its stakeholders and with regard to
the following matters.
The likely consequences of any decision in the long term
The board receives an annual business plan from the managing director of each
subsidiary company, which forms the basis of the Group’s strategic plan.
The board requires that the plans include financial forecasts, KPIs, marketing
strategy and an analysis of strengths, weaknesses, opportunities, and threats.
Subsidiary directors, via the Group’s operational board of which they are
members, consider the implications of their own plans in the context of what
others within the Group are intending to do and the opportunities for
synergies are explored. Any proposed actions that may adversely affect
another subsidiary are flagged at operational board level and are resolved.
Subsidiary directors are challenged on the content of their plans and the
assumptions they have made, to ensure that the plans are realistic and
achievable. Once agreed by the board, this plan, at Group and subsidiary
level, is used as the benchmark against which to assess performance.
The interests of the Group’s employees
As the Group is mainly involved in the supply of services, the board considers
its staff to be the greatest asset and the interests of employees are taken
into consideration in all decisions made. Each subsidiary company within the
Group has in place the necessary structures to ensure effective communication
with its employees. The subsidiary directors meet once a quarter and
relevant information is shared with employees via team meetings held at
subsidiary level. The views of employees are heard in a similar fashion,
initially at team meetings, and escalated to the operational board and the
main board if appropriate. Each subsidiary has its own bonus scheme, based on
results for the financial year and/or tailor-made targets. There is an
annual budget for staff training in recognition that the performance of the
Group can be improved by the development of its employees.
The Group is committed to equality of employment and its policies reflect a
disregard of factors such as disability in the selection and development of
employees. A review has been conducted to identify any gender-related pay
anomalies across the Group and found there to be no such anomalies.
The need to foster the Group’s business relationships with suppliers,
customers, and others
The Group seeks to treat suppliers fairly and adhere to contractual payment
terms. The Group works with its suppliers to help drive change through
innovation, promoting new ideas and ways of working. The Group has
zero-tolerance to modern slavery and is committed to acting ethically and with
integrity in all business dealings and relationships. The Group’s policy
for Modern Slavery and Human Trafficking contains systems and controls to
ensure that these activities are not taking place anywhere in the subsidiaries
or throughout the Group’s supply chains and can be viewed on our website
(www.phsc.plc.uk).
The Group also has zero-tolerance with regards to bribery, made explicit
through its Anti-Bribery and Corruption Policy. This covers the acceptance
of gifts and hospitality and any form of unethical inducement or payment
including facilitation payments and “kickbacks”. The policy sets out the
responsibilities of directors, employees and contractors and details the
procedures in place to prevent bribery and corruption. This policy is also
available on our website.
Each subsidiary is focussed on its customers. Communication takes many forms
and is structured according to how each subsidiary interacts with its client
base. Channels of communication include quarterly newsletters in hard copy
and/or sent electronically, customer roadshows, interaction via various social
media platforms (Twitter, LinkedIn and Facebook) and regular client
meetings. An ongoing dialogue is held electronically, with most clients
subscribing to email updates that are sent out periodically.
Stephen King is the principal contact between the Company and its investors,
with whom he maintains a regular dialogue. The Company is committed to
listening to and communicating openly with its shareholders to ensure that its
business model and performance are understood. Regular announcements are made
to the market and the AGM provides a forum for information dissemination,
discussion and feedback.
The impact of the Group’s operations on the community and the environment
The board’s intention is to behave responsibly and ensure that management
operates the business in a responsible manner, complying with high standards
of business conduct and good governance. The Group has a long tradition of
supporting local causes through sponsorship and community involvement, details
of which can be found on our website. The directors are aware of the impact
of the Group’s business on the environment but believe this to be minimal
due to the nature of its operations.
GOING CONCERN
Company law requires the directors to consider the appropriateness of the
going concern basis when preparing the financial statements. Cash reserves
ended the year at a higher level than in 2021-22. The board is satisfied
that such reserves, along with the Group’s cash-generative trading position
and (unused) credit facility will ensure that there are sufficient resources
to continue in operational existence for the foreseeable future. The cost of
the proposed enhanced final dividend is factored into the board’s
calculations in this regard. The directors therefore continue to adopt the
going concern basis of accounting in preparing the annual financial
statements.
On behalf of the board, I must once again thank all our shareholders,
employees and other stakeholders for continuing to place their trust in us and
for enabling 2022-23 to be a successful year.
Stephen King
Group Chief Executive
7 August 2023
GROUP STATEMENT OF FINANCIAL POSITIONas at 31 March 2023
31.3.23 £ 31.3.22 £
Non-Current Assets Pr operty, plant and equipment 468,490 490,138
Good will 2,235,045 2,235,045
Def erred tax asset 11,554 15,591
2,715,089 2,740,774
Current Assets Stoc k 200,169 185,685
T rade and other receivables 674,372 726,378
Cash and cash equivalents 749,627 649,363
1,624,168 1,561,426
T otal Assets 4,339,257 4,302,200
Current Liabilities T rade and other payables 531,422 617,077
Right of use lease liabilities 25,137 30,632
Current corporation tax payable 56,919 55,112
613,478 702,821
Non-Current Liabilities Right of use lease liabilities 25,414 24,184
Def erred tax liabilities 62,223 61,842
87,637 86,026
T otal Liabilities 701,115 788,847
Net Assets 3,638,142 3,513,353
Capital and reserves attributable to equity holders of the Group Called up share capital 1,184,704 1,467,726
Shar e premium account 1,916,017 1,916,017
Capital redemption reser v e 426,650 143,628
Mer ger relief reser v e 133,836 133,836
T reasury shares – (644,738)
Retained earnings (23,065) 496,884
3,638,142 3,513,353
GROUP STATEMENT OF COMPREHENSIVE INCOMEfor the year ended 31 March 2023
31.3.23 £ 31.3.22 £
Continuing operations : Rev enue 3,437,624 3,570,626
Cost of sales (1,612,543) (1,938,870)
Gr oss profit 1,825,081 1,631,756
Administr ative expenses (1,524,829) (1,446,051)
Good will impairment – (793,418)
Gov ernment grants – 29,527
Other income 3,000 –
Pr ofit/(loss) fr om operations 303,252 (578,186)
F inance income 1,346 388
Pr ofit/(loss) before taxation 304,598 (577,798)
Corpor ation tax expense (61,339) (53,205)
Profit/(loss) for the year after tax attributable to owners of the parent Other comprehensive income 243,259 – (631,003) –
Total comprehensive income/(loss) attributable to owners of the parent 243,259 (631,003)
Basic earnings/(loss) per share from continuing operations (p) 2.05p (4.76)p
GROUP STATEMENT OF CHANGES IN EQUITYfor the year ended 31 March 2023
Share Capital £ Share Premium £ Merger Relief Reserve £ Capital Redemption Reserve £ T reasury Shares £ Retained Earnings £ T otal £
Balance at 1 April 2022 1,467,726 1,916,017 133,836 143,628 (644,738) 496,884 3,513,353
Profit for year attributable to
equity holders – – – – – 243,259 243,259
Dividends – – – – – (118,470) (118,470)
Cancellation of o wn shares (283,022) 283,022 644,738 (644,738) –
Balance at 31 March 2023 1,184,704 1,916,017 133,836 426,650 – (23,065) 3,638,142
Balance at 1 April 2021 1,467,726 1,916,017 133,836 143,628 – 1,258,092 4,919,299
Loss for year attributable to
equity holders – – – – – (631,003) (631,003)
Dividends – – – – – (130,205) (130,205)
Pur chase of o wn shares – – – – (644,738) – (644,738)
Balance at 31 March 2022 1,467,726 1,916,017 133,836 143,628 (644,738) 496,884 3,513,353
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 March 2023
Note 31.3.23 £ 31.3.22 £
Cash flows from operating activities: Cash generated from operations I 318,153 313,530
T ax paid (55,114) (89,213)
Net cash generated from operating activities 263,039 224,317
Cash flows used in investing activities Pur chase of property, plant and equipment (41,386) (22,117)
Pr oceeds from disposal of fixed assets – 140
Inter est received 1,346 388
Net cash used in investing activities (40,040) (21,589)
Cash flows used in financing activities P ayment of lease liabilities (4,265) (15,905)
Pur chase of o wn shares – (644,738)
Dividends paid to shareholders (118,470) (130,205)
Net cash used in financing activities (122,735) (790,848)
Net increase/(decrease) in cash and cash equivalents 100,264 (588,120)
Cash and cash equivalents at beginning of year 649,363 1,237,483
Cash and cash equivalents at end of year 749,627 649,363
All changes in liabilities arising from financing relate entirely to cash mov ements.
NOTES TO THE GROUP STATEMENT OF CASH FLOWSfor the year ended 31 March 2023
31.3.23 £ 31.3.22 £
I. CASH GENERATED FROM OPERA TIONS
Pr ofit/(loss) fr om operations 303,252 (577,798)
Depr eciation charge 63,034 58,812
Good will impairment – 793,418
Loss on sale of fixed assets – 2,441
(Increase)/decrease in stock (14,484) 74,075
Decr ease/(increase) in trade and other receivables 52,006 (136,250)
(Decrease)/increase in trade and other payables (85,655) 98,832
Cash generated from operations 318,153 313,530
Notes to the consolidated financial information
The consolidated financial information set out above does not constitute the
Group’s financial statements for the years ended 31 March 2023 or 31 March
2022 but is derived from those financial statements. Statutory financial
statements for 2022 have been delivered to the Registrar of Companies and
those for 2023 have been approved by the board and will be delivered after
dispatch to shareholders. The auditors have reported on the 2022 and 2023
financial statements which carried unqualified audit reports, did not include
any reference to any matters to which the auditor drew attention by way of
emphasis and did not contain a statement under section 498(2) or 498(3) of the
Companies Act 2006.
While the financial information included in this announcement has been
compiled in accordance with International Financial Reporting Standards
(IFRS), this announcement does not in itself contain sufficient information to
comply with IFRS. The accounting policies used in the preparation of this
announcement are consistent with those in the full financial statements.
DIVIDENDS
A total dividend of 1.0p per ordinary share was paid in respect of the year
ended 31 March 2022; £64,830 was paid in January 2022 and the balance of
£59,190 in October 2022. An interim dividend of 0.5p in respect of the year
ended 31 March 2023 was paid in January 2023 (£59,190) and, subject to
shareholder approval at the AGM, a final dividend of 1p per share will be
payable on 13 October 2023 to shareholders on the register on 29 September
2023, thereby making a total of 1.5p for the year.
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