REG-PHSC Plc: Half-year Report
20/11/2024 07:15
20 November 2024
PHSC PLC
(“PHSC”, the “Company” or the “Group”)
Unaudited Interim Results for the six months ended 30 September 2024
PHSC (AIM: PHSC), a leading provider of health, safety, hygiene and
environmental consultancy services and security solutions to the public and
private sectors, announces its unaudited interim results for the six-month
period ended 30 September 2024.
Financial Highlights
* Group revenue has decreased by £80k to £1.571m (H1 FY24: £1.651m).
* EBITDA of £12k (H1 FY24: £174k).
* Interest income of £9.5k received during the period.
* (Loss)/earnings per share of (0.12p) (H1 FY24: 1.04p).
* Cash of £505k at 30 September 2024 (H1 FY24: £638k).
* Net asset value (unaudited) of £3.3m (H1 FY24: £3.5m).
* Pro-forma net asset value (unaudited) per share of 31.7p, compared to a
mid-market share price as at market close on 30 September 2024 of 31p.
* No interim dividend (H1 FY24: 0.75p per share).
GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT
Operational Highlights and Business Outlook
Revenues for H1 were £80k lower than in the previous year, with some
subsidiaries underperforming and others exceeding levels seen in H1 FY24. The
positive variances were insufficient to offset the overall deficit from those
subsidiaries experiencing reduced income and materially higher expenditure.
There were some extra costs associated with recruiting additional personnel in
anticipation of future demand, alongside other cost increases including
salaries, general overheads and some restructuring initiatives.
All subsidiaries made a net contribution to the Group. Both Inspection
Services (UK) Ltd and RSA Environmental Health Ltd improved their revenue
performance compared with H1 last year, but the other four principal trading
subsidiaries fared less well. A summary of each subsidiary’s revenue and
profitability is set out below.
As noted in previous reports, the Group faces continued challenges in
recruiting and retaining staff of the right calibre and with the right
qualifications to deliver the range of specialised services offered. Upward
pressure on salaries continues to impact our cost structure, which cannot
simply be fully offset by increases in the fees we charge to our customers in
a competitive marketplace.
The one-off contract that boosted our Security Division in 2023-24 and which
elevated its performance figures has now ended. This adversely affects the
comparative results for that part of the business. On a more positive note,
the subsidiary has seen an upturn in the number and value of sales enquiries
from the rest of its client base.
Sales across the Safety Division were £12k lower than the same period last
year but costs were £40k higher, resulting in a negative variance of £52k.
The additional costs were in part due to recruitment at our Quality Leisure
Management subsidiary where the process to embed the new arrival before fee
earning could commence was lengthy. This subsidiary has also been impacted by
budgetary squeezes in the leisure sector and a trend towards leisure centres
being returned to local authority stewardship. Despite this, management
currently expects all Safety Division companies to have an improved
performance in H2 based on the business pipeline.
There was a small reduction in sales generated by the Group’s Systems
Division, QCS International Ltd, which achieved approximately £9k less
revenue compared to H1 2024. Cost of sales and overheads rose by some £82k
due to above inflation pay rises and the addition of an extra fee earner. The
company has experienced a drop off in training sales which it hopes to reverse
in H2.
Despite the fairly downbeat H1 performance, the Board expects to see a more
positive end to the year and to be able to begin leveraging the benefits from
an increased headcount.
Dividend
The Board has decided to take a prudent approach and to preserve the Group’s
cash reserves in the current environment. Accordingly, no interim dividend
will be declared or paid for the period. The Board will consider the payment
of a final dividend by reference to the Group’s full year performance and
cash reserves at that time.
Cash Reserves
Cash at bank on 30 September 2024 stood at £0.505m compared to approximately
£0.638m at the same time last year. The Group’s bank balance on 19 November
2024 stood at approximately £0.397m. Overall cash flow remains positive and
is expected to remain so for the remainder of the financial year.
The Group’s £50,000 banking facility with HSBC was renewed in October 2024
for a further year, although there is no expectation that there will be any
need to call upon this.
Stephen King
CEO
CHAIR’S STATEMENT
The performance in the first half of this year was disappointing. The main
factor was the hiring of additional staff at several of the subsidiary
businesses to facilitate future growth. At this stage the Group has the
higher cost burden but has not yet seen the benefit of increased revenues,
which we hope will begin to come through in the second half.
On 15 October 2024, the Company announced that Stephen King, Chair and CEO,
had tendered his resignation to pursue other interests and will step down from
the Board and leave the Company’s employment with effect from 12 January
2025. I assumed the role of non-executive Chair on the same date and a process
is underway to appoint Stephen’s successor as CEO in due course. The Board
again thanks Stephen for his considerable contribution to the growth and
development of the business over many years and wishes him well in his future
endeavours.
As previously announced, Graham Webb MBE retired and stepped down as a
non-executive director of the Board with effect from 30 September 2024. The
Board again expresses its sincere gratitude to Graham for his longstanding
service and valued contribution to the Company over more than 20 years and
wishes him all the best in his retirement.
We welcomed Frank Moxon as a new non-executive director with effect from 1
October 2024.
Lorraine Young
Chair
Performance of Trading Subsidiaries
Profit/loss figures for the Group’s 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, the trading subsidiaries), interest paid and
received, depreciation and amortisation.
Inspection Services (UK) Limited
Invoiced sales of £129,782 yielding a profit of £23,273 (H1 FY24: £100,960
and £5,654).
Personnel Health and Safety Consultants Limited
Invoiced sales of £375,821 yielding a profit of £123,800 (H1 FY24: £393,594
and £158,501).
RSA Environmental Health Limited
Invoiced sales of £183,705 resulting in a profit of £34,097 (H1 FY24:
£161,109 and £17,055).
Quality Leisure Management Limited
Invoiced sales of £155,424 resulting in a profit of £13,706 (H1 FY24:
£201,985 and £70,279).
QCS International Limited
Invoiced sales of £345,076 yielding a profit of £29,680 (H1 FY24: £353,647
and £114,889).
B2BSG Solutions Limited
Invoiced sales of £380,957 yielding a profit of £25,731 (H1 FY24: £439,920
and £38,901).
For further information please contact:
PHSC plc
Stephen King / Lorraine Young Tel: 01622 717700
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 24 30 Sept 23 31 Mar 24
Note Unaudited Unaudited Audited
£’000 £’000 £’000
Continuing operations :
Revenue 2 1,571 1,651 3,779
Cost of sales (758) (758) (1,763)
Gross profit 813 893 2,016
Administrative expenses (838) (743) (1,581)
Goodwill impairment - - (120)
(Loss)/profit from operations (25) 150 315
Finance income 10 8 17
(Loss)/profit before taxation (15) 158 332
Corporation tax expense 3 (36) (83)
(Loss)/profit for the period after tax attributable to owners of parent 2 (12) 122 249
Total comprehensive income attributable to owners of the parent (12) 122 249
Basic and diluted (loss)/earnings per share from continuing operations attributable to the equity holders of the Group during the period 4 (0.12p) 1.04p 2.19p
Group Statement of Financial Position 30 Sept 24 30 Sept 23 31 Mar 24
Unaudited Unaudited Audited
Note £’000 £’000 £’000
Non-Current Assets
Property, plant and equipment 3 542 492 502
Goodwill 2,115 2,235 2,115
Deferred tax asset 12 12 12
2,669 2,739 2,629
Current Assets
Inventories 247 186 246
Trade and other receivables 617 686 769
Cash and cash equivalents 505 638 488
1,369 1,510 1,503
Total Assets 2 4,038 4,249 4,132
Current Liabilities
Trade and other payables 506 486 631
Right of use lease liability 45 30 39
Current corporation tax payable 76 92 79
627 608 749
Non-Current Liabilities
Right of use lease liability 81 27 41
Deferred taxation liabilities 67 62 67
148 89 108
Total Liabilities 775 697 857
Net Assets 3,263 3,552 3,275
Capital and reserves attributable to equity holders of the Group
Called up share capital 1,028 1,104 1,103
Share premium account 1,916 1,916 1,916
Capital redemption reserve 583 507 508
Merger relief reserve 134 134 134
Treasury shares - - (210)
Retained earnings (398) (109) (176)
3,263 3,552 3,275
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 2024 1,103 1,916 134 508 (210) (176) 3,275
Loss for the period attributable to equity holders - - - - - (12) (12)
Cancellation of treasury shares (75) - - 75 210 (210) -
Balance at 30 September 2024 1,028 1,916 134 583 - (398) 3,263
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
Group Statement of Cash Flows Six months Six months Year
ended ended ended
30 Sept 24 30 Sept 23 31 Mar 24
Unaudited Unaudited Audited
£’000 £’000 £’000
Cash flows generated from operating activities
Cash generated from operations 40 131 472
Tax paid - - (57)
Net cash generated from operating activities 40 131 415
Cash flows from/(used in) investing activities
Purchase of property, plant and equipment (9) (33) (40)
Disposal of fixed assets - - -
Interest received 10 8 17
Net cash from/(used in) investing activities 1 (25) (23)
Cash flows used in financing activities
Payments on right of use assets (24) (10) (42)
Share buyback - (208) (419)
Dividends paid to Group shareholders - - (193)
Net cash used in financing activities (24) (218) (654)
Net increase/(decrease) in cash and cash equivalents 17 (112) (262)
Cash and cash equivalents at beginning of period 488 750 750
Cash and cash equivalents at end of period 505 638 488
Notes to the cash flow statement
Cash generated from operations
Operating (loss)/profit - continuing operations (25) 150 315
Depreciation charge 38 24 74
Goodwill impairment - - 120
Loss on sale of fixed assets 1 - 3
(Increase)/decrease in inventories (1) 14 (45)
(Increase)/decrease in trade and other receivables 152 32 (94)
(Increase)/decrease in trade and other payables (125) (89) 99
Cash generated from operations 40 131 472
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 2024, prepared under IFRS, have been filed with the
Registrar of Companies. The auditor’s report for the 2024 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 24 30 Sept 23 31 Mar 24
Unaudited Unaudited Audited
Revenue £’000 £’000 £’000
Security division : B2BSG Solutions Ltd 381 440 1,179
Health & Safety division
Inspection Services (UK) Ltd 130 101 224
Personnel Health & Safety Consultants Ltd 376 393 862
Quality Leisure Management Ltd 155 202 392
RSA Environmental Health Ltd 184 161 345
845 857 1,823
Systems division : QCS International Ltd 345 354 777
Total revenue 1,571 1,651 3,779
Profit/(loss) after taxation, before management charges
Security division : B2BSG Solutions Ltd 25 32 155
Health & Safety division
Inspection Services (UK) Ltd 15 1 14
Personnel Health & Safety Consultants Ltd 98 124 288
Quality Leisure Management Ltd 8 59 90
RSA Environmental Health Ltd 23 12 33
Less: RSA impairment - - (120)
144 196 305
Systems division : QCS International Ltd 19 87 195
Holding company : PHSC plc (200) (193) (406)
Total Group (loss)/profit after taxation (12) 122 249
30 Sept 24 30 Sept 23 31 Mar 24
Unaudited Unaudited Audited
Total assets £’000 £’000 £’000
Security division : B2BSG Solutions Ltd 475 525 586
Safety division
Inspection Services (UK) Ltd 76 89 77
Personnel Health & Safety Consultants Ltd 213 272 259
Quality Leisure Management Ltd 111 134 148
RSA Environmental Health Limited 558 575 579
958 1,070 1,063
Systems division : QCS International Ltd 215 205 200
Holding company : PHSC plc 2,922 3,038 2,937
4,570 4,838 4,786
Adjustment of goodwill (532) (591) (656)
Adjustment of deferred tax - 2 2
Total assets 4,038 4,249 4,132
1. Property, plant and equipment
30 Sept 24 30 Sept 23 31 Mar 24
Unaudited Unaudited Audited
£’000 £’000 £’000
Cost or valuation
Brought forward 1,037 969 970
Additions 79 48 111
Disposals (10) - (44)
Carried forward 1,106 1,017 1,037
Depreciation
Brought forward 535 501 501
Charge 38 24 75
Disposals (9) - (41)
Carried forward 564 525 535
Net book value 542 492 502
1. (Loss)/earnings per share
The calculation of the basic (loss)/earnings per share is based on the
following data.
Six months ended Six months ended Year ended
30 Sept 24 30 Sept 23 31 Mar 24
Unaudited Unaudited Audited
£’000 £’000 £’000
Earnings
Continuing activities (12) 122 249
Number of shares 30 Sept 24 30 Sept 23 31 Mar 24
Weighted average number of shares for the purpose of basic (loss)/earnings per share 10,280,853 11,713,776 11,357,413
- ENDS -
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