REG-PHSC Plc: Half-year Report
16/11/2023 07:15
16 November 2023
PHSC PLC
(“PHSC”, the “Company” or the “Group”)
Unaudited Interim Results for the six months ended 30 September 2023
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 unaudited interim results for the
six-month period ended 30 September 2023.
GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT
Financial Highlights
* Group revenue of £1.651m (H1 FY23: £1.679m).
* EBITDA of £174k (H1 FY23: £162k).
* Earnings per share of 1.04p (H1 FY23: 0.90p).
* Cash of £638k following payment of increased dividend and completion of
share buyback programme (H1 FY22: £691k).
* Net asset value (unaudited) of £3.5m (H1 FY23: £3.6m).
* Pro-forma net asset value (unaudited) per share of 32.2p, compared to a
mid-market share price as at market close on 29 September 2023 of 18.5p.
* Interim dividend declared of 0.75p per ordinary share.
Operational Highlights and Business Outlook
Whilst income for the first half of the financial year was approximately £28k
lower than at this stage in 2022, EBITDA for the same period rose by
approximately £12k. Overall, profitability was further boosted by £7.6k of
bank interest, compared with none for H1 last year. All subsidiaries made a
contribution to this improved performance and there is a breakdown of how each
part of the Group has performed provided later in this report.
The Group continued to respond to challenges caused by a shortage of skilled
professional staff, which is not unique to our subsidiaries, and seeks to
mitigate the cost pressures that this shortage is causing. The expectations of
fee-earning personnel in particular have risen markedly, and recruitment of
appropriately qualified staff at sustainable salary levels is proving
difficult. To mitigate this, we have had to increase the fees we charge for
many of our services and ensure that the quality of our service enables us
to retain our existing clients and to attract new contracts.
Although the UK retail sector is still under considerable pressure, our bias
towards more clients in the food sector has helped our Security Division. As
noted later in this report, the profitability of B2BSG Solutions at the
halfway stage represents a great improvement versus H1 2022, and management
are confident that the subsidiary can make a positive contribution over the
remainder of the year.
Across the Safety Division, combined sales were £28k below where they were at
this point in 2022 but EBITDA was circa £12k higher as a result of improved
margins. In last year’s interim report, we noted that there had been a
marked improvement in the fortunes of RSA Environmental Health, which
predominantly sells into the education sector. This year we have to report
that net profit growth at this subsidiary was not replicated and fell below
where it had been in the corresponding period. Despite this, it will be seen
that the Safety Division as a whole performed better than before. This
demonstrates the strength of the Safety Division overall and the cyclic nature
of its business. In addition, a decline in the fortunes of one subsidiary
can be offset by improvement in another.
The Management Systems Division of the Group, QCS International, saw some
slippage in both revenue and EBITDA. The subsidiary is seeking to take on more
staff to assist with demand, as current personnel are already working to
capacity.
Looking to the remainder of the current year, the Board believes there are
plenty of opportunities for each of our three Divisions (safety, security and
management systems). With the recruitment of extra personnel of the right
calibre, we firmly believe we will be able to continue to deliver positive
outcomes for shareholders.
Dividend
Based on our projections that the Group will continue to have adequate and
growing cash reserves from trading activities, the Board has declared an
interim dividend of 0.75p per ordinary share to be paid on 12 January 2024 to
those shareholders on the register of members on 22 December 2023. This
represents a 50% increase on the 0.5p interim dividend in the previous year.
Any recommendation by the Board for the payment of a final dividend will be
subject to the Group’s full year performance, cash reserves, and the outlook
at that time and will be notified in due course.
Cash Flow
Cash at bank on 30 September 2023 stood at £0.638m compared to approximately
£0.7m at the same time last year. The figure shown is net of around £208k,
inclusive of costs, for the successful share buyback programme completed in
August 2023.
Despite no current expectation of having to call upon it, the Group has agreed
to renew its £50,000 banking facility with HSBC.
The cancellation of those shares previously bought back and initially held in
treasury has reduced the total cost of dividend payments. The Group has
sufficient cash reserves to service the proposed interim dividend and all
requirements arising in the normal course of business. There are no additional
calls on the Company’s cash. It is noted that authority was obtained at the
last AGM for the Company to potentially undertake a further share buyback
programme(s), however, no decision has been taken on this matter at the
present time.
Discrete Performance by Trading Subsidiaries
Profit/loss figures for the individual subsidiaries below are stated before
tax and inter-company charges (including the costs of operating the parent plc
which are recovered through management charges levied on, and dividends
received from, trading subsidiaries), interest paid and received, depreciation
and amortisation.
Inspection Services (UK) Limited
Invoiced sales of £100,960 yielding a profit of £5,654 (H1 FY23: £95,620
and £4,962).
Personnel Health and Safety Consultants Limited
Invoiced sales of £393,594 yielding a profit of £158,501 (H1 FY23: £423,253
and £119,478).
RSA Environmental Health Limited
Invoiced sales of £161,109 resulting in a profit of £17,055 (H1 FY23:
£174,625 and £32,767).
Quality Leisure Management Limited
Invoiced sales of £201,985 resulting in a profit of £70,279 (H1 FY23:
£192,014 and £67,769).
QCS International Limited
Invoiced sales of £353,647 yielding a profit of £114,889 (H1 FY23: £408,894
and £138,463).
B2BSG Solutions Limited
Invoiced sales of £439,920 resulting in a profit of £38,901 (H1 FY23:
£384,340 and £2,825).
For further information please contact:
PHSC plc
Stephen King Tel: 01622 717 7000
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.
Group Statement of Comprehensive Income Six months ended Six months ended Year ended
30 Sept 23 30 Sept 22 31 Mar 23
Note Unaudited Unaudited Audited
£’000 £’000 £’000
Continuing operations
Revenue 2 1,651 1,679 3,438
Cost of sales (758) (804) (1,613)
Gross profit 893 875 1,825
Administrative expenses (743) (744) (1,525)
Other income - 1 3
Profit from operations 150 132 303
Finance income 8 - 1
Profit before taxation 158 132 304
Corporation tax expense (36) (26) (61)
Profit for the period after tax attributable to owners of parent 2 122 106 243
Total comprehensive income attributable to owners of the parent 122 106 243
Basic and diluted earnings per share for profit after tax from continuing operations attributable to the equity holders of the Group during the period 4 1.04p 0.90p 2.05p
Group Statement of Financial Position 30 Sept 23 30 Sept 22 31 Mar 23
Unaudited Unaudited Audited
Note £’000 £’000 £’000
Non-current assets
Property, plant and equipment 3 492 462 468
Goodwill 2,235 2,235 2,235
Deferred tax asset 12 16 12
2,739 2,713 2,715
Current assets
Inventories 186 206 200
Trade and other receivables 686 660 674
Cash and cash equivalents 638 691 750
1,510 1,557 1,624
Total assets 2 4,249 4,270 4,339
Current liabilities
Trade and other payables 486 471 531
Right of use lease liability 30 23 25
Current corporation tax payable 92 81 57
608 575 613
Non-current liabilities
Right of use lease liability 27 14 26
Deferred taxation liabilities 62 62 62
89 76 88
Total liabilities 697 651 701
Net assets 3,552 3,619 3,638
Capital and reserves attributable to equity holders of the Group
Called up share capital 1,104 1,185 1,185
Share premium account 1,916 1,916 1,916
Capital redemption reserve 507 426 426
Merger relief reserve 134 134 134
Retained earnings (109) (42) (23)
3,552 3,619 3,638
Group Statement of Changes in Equity
Share Capital Share Premium Merger Relief Reserve Capital Redemption Reserve Treasury Shares Retained Earnings Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 April 2023 1,185 1,916 134 426 - (23) 3,638
Profit for the period attributable to equity holders - - - - - 122 122
Purchase of own shares (81) - - 81 - - -
Cancellation of treasury shares - - - - - (208) (208)
Balance at 30 September 2023 1,104 1,916 134 507 - (109) 3,552
Balance at 1 April 2022 1,468 1,916 134 143 (645) 497 3,513
Profit for the period attributable to equity holders - - - - - 106 106
Cancellation of treasury shares (283) - - 283 645 (645) -
Balance at 30 September 2022 1,185 1,916 134 426 - (42) 3,619
Group Statement of Cash Flows Six months Six months Year
ended ended ended
30 Sept 23 30 Sept 22 31 Mar 23
Unaudited Unaudited Audited
£’000 £’000 £’000
Cash flows generated from operating activities
Cash generated from operations 131 62 318
Tax paid - - (55)
Net cash generated from operating activities 131 62 263
Cash flows used in investing activities
Purchase of property, plant and equipment (33) (2) (41)
Disposal of fixed assets - - -
Interest received 8 - 1
Net cash used in investing activities (25) (2) (40)
Cash flows used in financing activities
Payments on right of use assets (10) (18) (4)
Share buyback (208) - -
Dividends paid to Group shareholders - - (118)
Net cash used in financing activities (218) (18) (122)
Net (decrease)/increase in cash and cash equivalents (112) 42 101
Cash and cash equivalents at beginning of period 750 649 649
Cash and cash equivalents at end of period 638 691 750
Notes to the cash flow statement
Cash generated from operations
Operating profit - continuing operations 150 132 303
Depreciation charge 24 30 63
Goodwill impairment - - -
Loss on sale of fixed assets - - -
Decrease/(increase) in inventories 14 (20) (14)
Decrease in trade and other receivables 32 66 52
Decrease in trade and other payables (89) (146) (86)
Cash generated from operations 131 62 318
Notes to the Interim Financial Statements
1. Basis of preparation
These condensed consolidated financial statements are presented on the basis
of International Financial Reporting Standards (IFRS) as adopted by the
European Union and interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC) and have been prepared in
accordance with the AIM Rules for Companies and the Companies Act 2006, as
applicable to companies reporting under IFRS.
The financial information contained in this announcement, 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 2023, prepared under IFRS, have been filed with the
Registrar of Companies. The auditor’s report for the 2023 financial
statements was unqualified and did not contain a statement under Section 498
(2) or (3) of the Companies Act 2006.
The same accounting policies and methods of computation are followed within
these interim financial statements as adopted in the most recent annual
financial statements.
Impairment of goodwill
The Board has considered the carrying value of goodwill and is satisfied that
the assumptions made at the time of the last adjustment remain valid.
1. Segmental Reporting
Six months ended Six months ended Year ended
30 Sept 23 30 Sept 22 31 Mar 23
Unaudited Unaudited Audited
Revenue £’000 £’000 £’000
Security division : B2BSG Solutions Ltd 440 384 830
Health & Safety division
Inspection Services (UK) Ltd 101 96 198
Personnel Health & Safety Consultants Ltd 393 423 807
Quality Leisure Management Ltd 202 192 402
RSA Environmental Health Ltd 161 175 366
857 886 1,773
Systems division : QCS International Ltd 354 409 835
Total revenue 1,651 1,679 3,438
Profit/(loss) after taxation, before management charge
Security division : B2BSG Solutions Ltd 32 4 (3)
Health & Safety division
Inspection Services (UK) Ltd 1 1 8
Personnel Health & Safety Consultants Ltd 124 102 229
Quality Leisure Management Ltd 59 56 116
RSA Environmental Health Ltd 12 25 61
196 184 414
Systems division : QCS International Ltd 87 107 225
Holding company : PHSC plc (193) (189) (393)
Total Group profit after taxation 122 106 243
30 Sept 23 30 Sept 22 31 Mar 23
Unaudited Unaudited Audited
Total assets £’000 £’000 £’000
Security division : B2BSG Solutions Ltd 525 178 466
Safety division
Inspection Services (UK) Ltd 89 97 68
Personnel Health & Safety Consultants Ltd 272 289 221
Quality Leisure Management Ltd 134 185 95
RSA Environmental Health Limited 575 619 565
1,070 1,190 949
Systems division : QCS International Ltd 205 395 242
Holding company : PHSC plc 3,038 3,270 3,216
4,838 5,033 4,873
Adjustment of goodwill (591) (765) (536)
Adjustment of deferred tax 2 2 2
Total assets 4,249 4,270 4,339
1. Property, plant and equipment
30 Sept 23 30 Sept 22 31 Mar 23
Unaudited Unaudited Audited
£’000 £’000 £’000
Cost or valuation
Brought forward 969 928 928
Additions 48 2 41
Disposals - - -
Carried forward 1,017 930 969
Depreciation
Brought forward 501 438 438
Charge 24 30 63
Disposals - - -
Carried forward 525 468 501
Net book value 492 462 468
1. Earnings per share
The calculation of the basic earnings per share is based on the following
data.
Six months ended Six months ended Year ended
30 Sept 23 30 Sept 22 31 Mar 23
Unaudited Unaudited Audited
£’000 £’000 £’000
Earnings
Continuing activities 122 106 243
Number of shares 30 Sept 23 30 Sept 22 31 Mar 23
Weighted average number of shares for the purpose of basic earnings per share 11,713,776 11,847,019 11,847,019
- ENDS -
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