Heath(Samuel) & Sons - Half-year Report

Samuel Heath and Sons

12/11/2020 07:00

RNS Number : 0488F

Heath(Samuel) & Sons PLC

12 November 2020

 

SAMUEL HEATH & SONS plc

("the Company")

 

INTERIM REPORT

 

Half year ended 30 September 2020

 

CHAIRMAN'S STATEMENT

 

 

This has been the most extraordinary half year in my rather lengthy business career. Regrettably there is still not yet a clear outcome by any means.

 

Our trading performance for the six months until September 30th was quite a lot better than feared but still only produced a small profit of £6k before exceptional items (2019: £363k), on sales of £4.850m (2019: £6.920m). As I mentioned in my annual report, without any doubt this was greatly aided by the Government's furlough scheme. This was imaginative and effective. It helped us on all sides of the business, but particularly on the sales side. However, as it was coming to an end, we had to make some difficult decisions to protect the future of the Company. This resulted in considerable redundancy payments, shown in the accounts as exceptional. This brought our total half year results to a loss of £224k before taxation (2019: profit £363k).

 

You cannot run a business like ours successfully for long without a considerable sales team, focussed marketing activities and continual research and development. We have therefore brought these back into play for the second half of the year. This is clearly not without risk.

 

There are differing views on the next six months. We have the U.S. election which could affect a manufacturer at the luxury end of the market, the unknown outcome of the talks with the EU, and, by far the worst of all, the return in volume of the Coronavirus. Anybody offering a forecast in these circumstances would be extremely unwise.

 

This leaves the question of the dividend. Apart from the ethical question of whether we should pay out dividends when in receipt of Government money, notwithstanding the millions we have paid over the years in taxes, there is more importantly the possible cash requirements of the Company over the next six months. We have therefore decided not to pay an interim dividend but hope to return to normality next year.

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

 

Sam Heath

Chairman

11 November 2020

 

For further information, please contact:

Samuel Heath & Sons Plc

Simon Latham, Company Secretary                                         0121 766 4200

 

Cairn Financial Advisers LLP

James Caithie / Jo Turner                                                             020 7213 0880                                   

 

Unaudited Interim Financial Report
For the Half Year ended 30 September 2020
CONSOLIDATED INCOME STATEMENT
Half year
Half year
Year
ended 30
ended 30
ended 31
September
September
March
2020
2019
2020
Unaudited
Unaudited
Audited
£'000
£'000
£'000
Revenue
4,850
6,920
13,887
Cost of sales
(3,062)
(3,598)
(6,798)
Gross profit
1,788
3,322
7,089
Selling and distribution costs
(1,344)
(1,776)
(3,543)
Administrative expenses
(940)
(1,067)
(2,012)
Other operating income - grant (note 6)
596
-
-
Operating profit
100
479
1,534
Finance income
14
9
25
Finance cost
(108)
(125)
(191)
Profit before taxation and exceptional items
6
363
1,368
Exceptional item (note 5)
(230)
-
-
(Loss)/profit before taxation
(224)
363
1,368
Taxation
43
(69)
(299)
(Loss)/profit for the period
(181)
294
1,069
Basic and diluted (loss)/earnings per ordinary share (note 4)
(7.1p)
11.6p
42.2p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Half year ended 30 September
Half year ended 30 September
Year ended 31 March
2020
2019
2020
Unaudited
Unaudited
Audited
£'000
£'000
£'000
(Loss)/profit for the period
(181)
294
1,069
Items that will not be reclassified to profit or loss:
Actuarial gain/(loss) on defined benefit pension scheme
(1,239)
204
291
Deferred tax on actuarial loss/(gain)
218
(34)
(55)
Deferred tax rate change
-
-
125
Revaluation of property, plant and equipment
-
-
182
Deferred taxation on revaluation of assets
-
-
(23)
(1,021)
170
520
Total comprehensive income for the period
(1,202)
464
1,589


 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September
At 30 September
At 31 March
2020
2019
2020
Unaudited
Unaudited
Audited
£'000
£'000
£'000
Non-current assets
Intangible assets
135
74
151
Property, plant and equipment
3,541
3,519
3,635
Deferred tax assets
1,103
972
887
4,779
4,565
4,673
Current assets
Inventories
3,869
3,883
4,230
Trade and other receivables
1,689
2,216
2,370
Cash and cash equivalents
3,424
3,100
3,016
8,982
9,199
9,616
Total assets
13,761
13,764
14,289
Current liabilities
Trade and other payables
(1,772)
(1,665)
(1,868)
Right of use lease liabilities
(53)
(57)
(58)
Current tax payable
(36)
(239)
(79)
(1,861)
(1,961)
(2,005)
Non-current liabilities
Right of use lease liabilities
(26)
(75)
(46)
Retirement benefit scheme
(7,413)
(7,050)
(6,575)
(7,439)
(7,125)
(6,621)
Total liabilities
(9,300)
(9,086)
(8,626)
Net assets
4,461
4,678
5,663
Equity
Called up share capital
254
254
254
Capital redemption reserve
109
109
109
Revaluation reserve
Retained earnings
1,308
2,790
1,224
3,091
1,349
3,951
Equity shareholders' funds
4,461
4,678
5,663


 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

Share capital
Capital redemption reserve
Revaluation reserve
Retained earnings
Total equity
£000
£000
£000
£000
£000
Balance at 31 March 2019
254
109
1,277
2,748
4,388
Total transactions with owners
Equity dividends paid
-
-
-
(174)
(174)
Profit for the period
-
-
-
294
294
Other comprehensive income for the period
Reclassification of depreciation on revaluation
-
-
-
-
-
(53)
170
53
170
-
Total comprehensive income for the period
-
-
(53)
517
464
Balance at 30 September 2019
254
109
1,224
3,091
4,678
Total transactions with owners
Equity dividends paid
-
-
-
(140)
(140)
Profit for the period
-
-
-
775
775
Other comprehensive income for the period
Reclassification of depreciation on revaluation
-
-
-
-
159
(34)
191
34
350
-
Total comprehensive income for the period
-
-
125
1,000
1,125
Balance at 31 March 2020
254
109
1,349
3,951
5,663
Total transactions with owners
Equity dividends paid
-
-
-
-
-
Loss for the period
-
-
-
(181)
(181)
Other comprehensive income for the period
Reclassification of depreciation on revaluation
-
-
-
-
-
(41)
(1,021)
41
(1,021)
-
Total comprehensive income for the period
-
-
(41)
(1,161)
(1,202)
Balance at 30 September 2020
254
109
1,308
2,790
4,461


 

CONSOLIDATED CASH FLOW STATEMENT                        

 

Half year ended 30 September
Half year ended 30 September
Year ended 31 March
2020
2019
2020
Unaudited
Unaudited
Audited
£'000
£'000
£'000
Cash flow from operating activities
(Loss)/profit for the period before taxation
(224)
363
1,368
Adjustments for:
Depreciation
155
192
405
Amortisation
16
8
16
Loss/(profit) on disposal of property, plant and equipment
-
3
(3)
Net finance cost/(income)
(14)
7
(25)
Defined benefit pension scheme expenses
98
137
228
Contributions to defined benefit pension scheme
(500)
(266)
(783)
Operating cash flow before movements in working capital
(469)
444
1,206
Changes in working capital:
Decrease/(increase) in inventories
361
106
(241)
Decrease/(increase) in trade and other receivables
658
46
(84)
(Decrease)/increase in trade and other payables
(65)
23
79
Cash generated from operations
485
619
960
Taxation paid
-
-
(180)
Net cash from operating activities
485
619
780
Cash flow from investing activities
Payments to acquire property, plant and equipment
(61)
(510)
(502)
Proceeds from the sale of property, plant and equipment
-
19
14
Payments to acquire intangible assets
-
-
(85)
Net finance income
14
(5)
25
(47)
(496)
(548)
Cash flow from financing activities
Payment for right of use assets
(30)
(2)
(55)
Dividends paid
-
(174)
(314)
(30)
(176)
(369)
Net increase in cash and cash equivalents
408
(53)
(137)
Cash and cash equivalents at beginning of period
3,016
3,153
3,153
Cash and cash equivalents at end of period
3,424
3,100
3,016


 

 

 

 

 

 

NOTES TO THE INTERIM FINANCIAL REPORT

 

 

1.             BASIS OF PREPARATION OF INTERIM REPORT

As permitted, IAS34 'Interim Financial Reporting' has not been applied in this interim report. The information for the period ended 30 September 2020 is not audited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.  The statutory accounts for the year ended 31 March 2020 were given an unqualified audit report and did not contain statements under section 498(2) or 498(3) of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The interim accounts for the half year ended 30 September 2019 were also unaudited.

2.             ACCOUNTING POLICIES

Basis of accounting

The report has been prepared on a going concern basis in accordance with International Financial Reporting Standards and interpretations issued by the International Financial Reporting Interpretations Committee as adopted by the European Union.

 

The group has not availed itself of early adoption options in standards and interpretations.

 

The principal accounting policies adopted are as set out in the Annual Report for the year ended 31 March 2020. The valuation of inventories is considered to be the main area in terms of significant accounting estimates and judgements.

The retirement benefit scheme liability recognised in these interim accounts reflects the estimated change in the deficit at 30 September 2020 from the movements in discount rates and inflation during the six months.

3.             DIVIDENDS

 

No Interim dividend is proposed (paid 20 March 2020: 5.5p).

4.            (LOSS)/EARNINGS PER SHARE 

The basic and diluted (loss)/earnings per share are calculated by dividing the relevant loss after taxation of £181,000 (30 September 2019: profit £294,000) by the average number of ordinary shares in issue during the period being 2,534,322 (2019: 2,534,322). The number of shares used in the calculation is the same for both basic and diluted earnings.

5.           EXCEPTIONAL ITEM

The exceptional item for the 6 months to 30 September 2020 relates to restructuring costs within the business.

6.           OTHER OPERATING INCOME - GRANT FUNDING

                Income has been received from government grants providing support during the Coronavirus pandemic:

                                JRS                                                         £571,000

                                Borough Hammersmith & Fulham          £  25,000

 

                Income has been accounted for under the accruals method.

 

 

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