REG-PHSC Plc: Interim Results
24/11/2020 07:05
24 November 2020
PHSC PLC
(“PHSC”, the “Company”, or the “Group”)
Unaudited Interim Results for the six months ended 30 September 2020
GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT
Financial Highlights
· Group revenue for first half of £1.377m, down from
£2.234m last year.
· EBITDA of £182k, compared with £175k at the halfway
stage last year.
· Earnings per share of 0.83p compared with 1.01p last
year.
· Cash of £1.0m compared with £756k as at 31 March 2020.
· Net asset value (unaudited) of £5.1m compared to £5.0m
as 31 March 2020.
· Net asset value (unaudited) per share of 34.8p compared
to a current share price of 12.0p.
· Interim dividend declared of 0.5p per ordinary share.
Operational Highlights and Business Outlook
The first half of the year has been dominated by the effects of COVID-19 and
this has led to a marked downturn in demand for the majority of our services,
with the exception of Personnel Health & Safety Consultants Limited, whose
core business has continued to provide clients with COVID-19 risk assessments
and support.
The improved EBITDA would not have been achieved without considerable support
through the Coronavirus Job Retention Scheme (CJRS) and local authority grants
of, in aggregate, £316k. However, the Group has not needed to make use of
repayable financial support such as Government-backed loans and has not called
upon our £50,000 facility with HSBC, which was renewed in October 2020.
Our security company, B2BSG Solutions Limited, was badly hit by the enforced
closure of non-essential retail premises for much of the period, and the far
lower demand once shops were gradually allowed to reopen. Several retail
clients have reduced the size of their estates, leading to reduced order
quantities for our security products. Some national chains who we work with
are in severe financial difficulty and we expect that this may impact our
ability to recover debts. We have therefore made an initial provision of
£10,000 in anticipation of losses due to customer default. The extent to
which the business can recover will depend largely on when and whether the
high street is able to improve its fortunes following the easing of
restrictions following the second lockdown. On a positive note, the losses
for the period were reduced substantially when compared to last year, albeit
this was heavily supported by the CJRS and grant funding.
Demand for consultancy and training through our QCS International Limited
subsidiary, which is based in Scotland, was negatively impacted, with both
revenues and profits reducing by more than a half. Training income was worst
hit, with income of approximately £40,000 compared with £180,000 at the
half-way stage last year. Demand for consultancy support held up better than
expected. We expect that many clients will look to reinstate deferred
training courses as soon as it is deemed safe and legal to do so, as
determined by Scottish legislation.
There have been mixed fortunes in the Safety Division, with Quality Leisure
Management Limited the worst affected. The overwhelming majority of clients
are leisure centres, and this sector was ordered to completely close for most
of the period. Funding of these establishments has been severely curtailed.
Whilst we have been called up to support some clients who use retainer
services, the need for additional paid for services has been negligible.
Inspection Services (UK) limited has been largely unaffected by the pandemic
and the half-year is generally in line with expectations.
RSA Environmental Health Limited, via its SafetyMARK branding, predominantly
works in the school sector. With schools closed (other than for limited
exceptions) in the first wave of the pandemic, training and consultancy
requirements were minimal. With schools reopening we anticipate a gradual
improvement in activity. A positive point has been our ability to adapt and
deliver accredited training remotely and this is an income stream that we will
work to enlarge in the months ahead.
Personnel Health & Safety Consultants Limited enjoyed additional demand for
its services, notably those related to assisting clients achieve COVID secure
workplaces. Our fee-earning staff who were initially furloughed under the
CJRS have been fully productive since early summer, when the restrictions from
the first lockdown were eased, and are generally expected to be busy through
to the end of the calendar year. We have sought to position ourselves in the
marketplace as the “go to” health and safety consultancy for COVID-19
support and this has resulted in enquiries being at record levels. This has
resulted in several organisations using us for the first time and we will look
to capitalise on these new relationships going forward.
Dividend
The Board is mindful of the fact that the Group has enjoyed considerable
support from the CJRS together with associated grant funding and that careful
thought should be given as to whether a distribution is appropriate in these
circumstances. However, we are aware that many of our shareholders have
invested for the historically high yield that our dividend policy has offered
and during these times we have continued to manage our business carefully.
The Board is therefore satisfied that a distribution from retained earnings
is reasonable and that this would not materially compromise our cash
position. Accordingly, the Board declares an interim dividend of 0.5p per
ordinary share, to be paid on 26 February 2021 to those on the register of
members on 4 January 2021.
The recommendation by the Board of any final dividend for the current
financial year will be subject to the Group’s full year performance and the
outlook at that time.
Cash Flow
Cash at bank on 30 September 2020 stood at £1.0m compared to £756k as at 31
March 2020.
Other than in the normal course of business and the proposed and any future
dividends that might be declared, the Board does not currently anticipate
there being any additional calls on the Company’s cash.
Performance by Trading Subsidiaries
Profit/loss figures for individual subsidiaries are stated after government
grants, which includes the CJRS, but before tax and inter-company charges
(including the costs of operating the plc which are recovered through
management charges to, and dividends from, trading subsidiaries), interest
paid and received, depreciation and amortisation.
Personnel Health and Safety Consultants Limited
Invoiced sales of £381,531 yielding a profit of £223,591 (the figures for
the same period last year were £366,657 and £139,470).
RSA Environmental Health Limited
Invoiced sales of £100,123 resulting in a profit of £30,686 (the figures for
the same period last year were £207,524 and £50,488).
Quality Leisure Management Limited
Invoiced sales of £90,369 resulting in a profit of £40,342 (the figures for
the same period last year were £194,295 and £58,544).
QCS International Limited
Invoiced sales of £196,533 yielding a profit of £46,705 (the figures for the
same period last year were £397,832 and £142,102).
Inspection Services (UK) Limited
Invoiced sales of £113,807 yielding a profit of £25,471 (the figures for the
same period last year were £132,613 and £35,860).
B2BSG Solutions Limited
Invoiced sales of £495,228 resulting in a loss of £4,394 (the figures for
the same period last year were £935,356 and £56,558 loss).
For further information please contact:
PHSC plc
Stephen
King
01622 717 700
Stephen.king@phsc.co.uk
www.phsc.plc.uk
Strand Hanson Limited (Nominated Adviser) 020 7409
3494
Richard Tulloch / James Bellman
Novum Securities Limited
(Broker) 020 7399 9427
Colin Rowbury
About PHSC
PHSC plc, 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. B2BSG
Solutions Ltd offer 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 Regulations
(EU) No. 596/2014 (“MAR”).
Group Statement of Comprehensive Income Six months ended Six months ended Year ended
30 Sept 20 30 Sept 19 31 Mar 20
Note Unaudited Unaudited Audited
£’000 £’000 £’000
Continuing operations
Revenue 3 1,377 2,234 4,438
Cost of sales (767) (1,101) (2,252)
Gross profit 610 1,133 2,186
Administrative expenses (775) (979) (1,983)
Goodwill impairment 2 - - (200)
Government grants 316 - -
Profit from operations 151 154 3
Finance income 1 1 2
Profit before taxation 152 155 5
Corporation tax expense (31) (7) (21)
Profit/(loss) for the period after tax attributable
to owners of parent 3 121 148 (16)
Total comprehensive income attributable to owners of the parent 121 148 (16)
Basic and diluted Earnings per Share for profit after tax from continuing operations attributable to the equity holders of the Group during the period 5 0.83p 1.01p (0.11)p
Group Statement of Financial Position 30 Sept 20 30 Sept 19 31 Mar 20
Unaudited Unaudited Audited
Note £’000 £’000 £’000
Non-current assets
Property, plant and equipment 4 565 561 593
Goodwill 3,278 3,478 3,278
Deferred tax asset 20 18 20
3,863 4,057 3,891
Current assets
Inventories 263 307 264
Trade and other receivables 753 1,069 886
Cash and cash equivalents 1,003 688 756
2,019 2,064 1,906
Total assets 3 5,882 6,121 5,797
Current liabilities
Trade and other payables 571 647 623
Right of use lease liability 34 23 34
Current corporation tax payable 71 62 40
676 732 697
Non-current liabilities
Right of use lease liability 54 54 70
Deferred taxation liabilities 52 46 51
106 100 121
Total liabilities 782 832 818
Net assets 5,100 5,289 4,979
Capital and reserves attributable to equity
holders of the Group
Called up share capital 1,468 1,468 1,468
Share premium account 1,916 1,916 1,916
Capital redemption reserve 144 144 144
Merger relief reserve 134 134 134
Retained earnings 1,438 1,627 1,317
5,100 5,289 4,979
Group Statement of Changes in Equity
Share Capital Share Premium Capital Redemption Reserve Merger Relief Reserve Retained Earnings Total
£’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 April 2020 1,468 1,916 144 134 1,317 4,979
Profit for the period attributable to equity holders - - - - 121 121
Balance at 30 September 2020 1,468 1,916 144 134 1,438 5,100
Balance at 1 April 2019 1,468 1,916 144 134 1,479 5,141
Profit for the period attributable to equity holders - - - - 148 148
Balance at 30 September 2019 1,468 1,916 144 134 1,627 5,289
Group Statement of Cash Flows Six months Six months Year
ended ended ended
30 Sept 20 30 Sept 19 31 Mar 20
Unaudited Unaudited Audited
£’000 £’000 £’000
Cash flows generated from operating activities
Cash generated from operations 264 57 347
Tax paid - - (32)
Net cash generated from operating activities 264 57 315
Cash flows used in investing activities
Purchase of property, plant and equipment (2) (14) (39)
Disposal of fixed assets - 2 2
Interest received 1 1 2
Net cash used in investing activities (1) (11) (35)
Cash flows used in financing activities
Payments on right of use assets (16) (19)
Dividends paid to group shareholders - - (147)
Net cash used in financing activities (16) - (166)
Net increase in cash and cash equivalents 247 46 114
Cash and cash equivalents at beginning of period 756 642 642
Cash and cash equivalents at end of period 1,003 688 756
Notes to the cash flow statement
Cash generated from operations
Operating profit - continuing operations 151 154 3
Depreciation charge 30 21 52
Goodwill impairment - - 200
Loss on sale of fixed assets - 3 5
Decrease in inventories 1 10 52
Decrease/(increase) in trade and other receivables 133 (96) 87
Decrease in trade and other payables (51) (35) (52)
Cash generated from operations 264 57 347
Notes to the 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 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 2020, prepared under IFRS have been filed with the
Registrar of Companies. The auditor’s report for the 2020 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. Although
there have been losses in certain subsidiaries in the interim period, the
Group’s performance against the background of COVID-19 has been better than
was envisaged when the final results were published in August 2020. The
longer-term outlook presently remains stable and an impairment charge in these
interim accounts is not therefore considered necessary but will be reassessed
at the year end.
Government grants
Government grants represent amounts receivable in relation to the CJRS and
other COVID-19 related business grants. The grants have been recognised in
the period to which the costs relate.
2. Exceptional Administrative Expenses
Six months ended Six months ended Year ended
30 Sept 20 30 Sept 19 31 Mar 20
Unaudited Unaudited Audited
£’000 £’000 £’000
Impairment of PHSC plc’s investment in B2BSG Solutions Limited - - 200
3. Segmental Reporting
Six months ended Six months ended Year ended
30 Sept 20 30 Sept 19 31 Mar 20
Unaudited Unaudited Audited
Revenue £’000 £’000 £’000
Security division : B2BSG Solutions Ltd 495 935 1,915
495 935 1,915
Health & safety division
Inspection Services (UK) Ltd 114 133 231
Personnel Health & Safety Consultants Ltd 382 367 764
Quality Leisure Management Ltd 90 194 353
RSA Environmental Health Ltd 100 207 418
686 901 1,766
Systems division: QCS International Ltd 196 398 757
Total revenue 1,377 2,234 4,438
Profit/(loss) after taxation, before management charge
Security division: B2BSG Solutions Ltd (1) (42) (61)
Health & safety division
Inspection Services (UK) Ltd 18 30 33
Personnel Health & Safety Consultants Ltd 183 137 251
Quality Leisure Management Ltd 33 49 66
RSA Environmental Health Ltd 25 43 72
259 259 422
Systems division: QCS International Ltd 33 115 184
Holding company: PHSC plc (170) (184) (361)
121 148 184
Goodwill impairment - - (200)
Total Group profit/(loss) after taxation 121 148 (16)
30 Sept 20 30 Sept 19 31 Mar 20
Unaudited Unaudited Audited
Total assets £’000 £’000 £’000
Security division: B2BSG Solutions Ltd 411 602 429
Safety division
Inspection Services (UK) Ltd 176 218 166
Personnel Health & Safety Consultants Ltd 581 1,057 413
Quality Leisure Management Ltd 210 320 220
RSA Environmental Health Limited 637 684 631
1,604 2,279 1,430
Systems division: QCS International Ltd 320 765 320
Holding company: PHSC plc 4,322 3,249 4,375
6,657 6,895 6,554
Adjustment of goodwill (775) (774) (757)
Total assets 5,882 6,121 5,797
4. Property, plant and equipment
30 Sept 20 30 Sept 19 31 Mar 20
Unaudited Unaudited Audited
£’000 £’000 £’000
Cost or valuation
Brought forward 949 907 822
Additions 2 14 163
Disposals - (37) (36)
Carried forward 951 884 949
Depreciation
Brought forward 356 334 334
Charge 30 21 52
Disposals - (32) (30)
Carried forward 386 323 356
Net book value 565 561 593
5. 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 20 30 Sept 19 31 Mar 20
Unaudited Unaudited Audited
£’000 £’000 £’000
Earnings
Continuing activities 121 148 (16)
Number of shares 30 Sept 20 30 Sept 19 31 Mar 20
Weighted average number of shares for the purpose of basic earnings per share 14,667,257 14,667,257 14,667,257
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