REG - Heath(Samuel) & Sons - Final Results <Origin Href="QuoteRef">HSM.L</Origin>
06/09/2014 16:38
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RNS Number : 3369M
Heath(Samuel) & Sons PLC
16 July 2014
HEATH (Samuel) & SONS PLC
16th JULY 2014
PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST MARCH 2014
CHAIRMAN'S STATEMENT
It is a pleasure to be able to report a profit before taxation of £610,000
(2013: £450,000) on sales up by 8.9% to £10,979,000 (2013: £10,083,000). It is
even more pleasing to see the increase in operating profit to £698,000 (2013:
£350,000). In connection to this, I should point out that we decided to be
far more cautious with the Company's investments, in view of the uncertainties
around the world. We have therefore disposed of all of our holdings, resulting
in a profit on cost of £58,000, and are now keeping our cash reserves on
deposit.
We experienced considerable success with most of the new lines launched during
the year and there was improvement in some, but by no means all, of our
markets. We should emphasise that trading has certainly not regained the
position of pre-crisis level.
You would think from the daily news that we would be looking forward to a
strong year ahead. So far in this trading period our sales have been below
that achieved in the same trading period last year. In addition, the current
strength of Sterling compared to many world currencies, will have a
detrimental effect on our sales revenue and profits, which are earned from
overseas. It would seem that the caution seen in the Markets could well be
correct. We must therefore add our own note of caution for the coming year, as
it would seem that the turbulent trading conditions, which we have experienced
in the last few years, are not yet at an end.
Our assets remain strong and we therefore propose a same again final dividend
of 6.25p per share, making a total of 11.75p for the year.
Sam Heath
Chairman
16th July 2014
For further information:
Samuel Heath & Sons Plc
John Park - Company Secretary 0121 772 2303
Zeus Capital Limited 0161 831 1512
Ross Andrews/Jamie Peel
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2014
Note 2014 2013
£000 £000
(Restated)
Continuing operations
Revenue 4 10,979 10,083
Cost of sales (5,647) (5,311)
Gross profit 5,332 4,772
Distribution costs (2,958) (2,870)
Administrative expenses (1,676) (1,552)
Operating profit 698 350
Gain on sale of financial assets 58 132
Finance income 433 505
Finance costs (579) (537)
Profit before taxation 610 450
Taxation 5 (167) (35)
Profit for the year 443 415
Basic and diluted earnings per ordinary share 7 17.5p 16.4p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2014 2013
£000 £000
(Restated)
Profit for year 443 415
Actuarial gain/ (loss) on defined benefit pension scheme 294 (1,560)
Deferred taxation on actuarial gain/(loss) (187) 329
Loss on available for sale financial assets (115) (17)
Cash flow hedges 1 (3)
Other comprehensive income (7) (1,251)
Total comprehensive income for the year 436 (836)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2014
2014£000 2013£000
Non current assets
Intangible assets 326 370
Property, plant and equipment 1,668 1,838
Deferred tax asset 774 986
2,768 3,194
Current assets
Inventories 2,899 2,731
Trade and other receivables 1,819 1,909
Derivative financial instruments - 1
Available for sale financial assets - 1,400
Cash and cash equivalents 2,026 219
Total current assets 6,744 6,260
Total assets 9,512 9,454
Current liabilities
Trade and other payables (1,164) (949)
Derivative financial instruments (2) (4)
Current tax payable (116) (15)
Total current liabilities (1,282) (968)
Non current liabilities
Retirement benefit scheme (3,870) (4,290)
Deferred tax liability (110) (84)
Total non current liabilities (3,980) (4,374)
Total liabilities (5,262) (5,342)
Net assets 4,250 4,112
Equity
Called up share capital 254 254
Capital redemption reserve 109 109
Retained earnings 3,887 3,749
Equity shareholders' funds 4,250 4,112
4,112
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2014
Sharecapital Capital redemption reserve Retained earnings Totalequity
£000 £000 £000 £000
Balance at 31st March 2012 254 109 4,883 5,246
Equity dividends paid - - (298) (298)
Profit for year - - 415 415
Other comprehensive income for the year - - (1,251) (1,251)
Balance at 31st March 2013 254 109 3,749 4,112
Equity dividends paid - - (298) (298)
Profit for year - - 443 443
Other comprehensive income for the year - - (7) (7)
Balance at 31st March 2014 254 109 3,887 4,250
CONSOLIDATED STATEMENT OF CASHFLOWSFOR THE YEAR ENDED 31 MARCH 2014
Note 2014 2013
£000 £000
Net cash inflow from operating activities 8 908 72
Cash flow from investing activities
Purchases of property, plant and equipment (221) (268)
Proceeds from sale of property, plant and equipment 29 6
Purchase of intangible assets (6) (117)
Purchase of available for sale financial assets (57) (421)
Proceeds from sale of available for sale financial assets 1,400 676
Interest received 52 92
Net cash inflow/(outflow) from investing activities 1,197 (32)
Net cash outflow from financing activities
Equity dividends paid 6 (298) (298)
Net cash outflow from financing activities (298) (298)
Increase/(decrease) in cash and cash equivalents 1,807 (258)
Cash and cash equivalents at beginning of period 219 477
Cash and cash equivalents at end of period 2,026 219
1 Adoption of new and revised Standards
The Group has adopted all of the new and revised Standards and Interpretations
issued by the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC) of the
IASB that are relevant to its operations and effective for accounting periods
beginning on 1st April 2013. The adoption of the following IFRSs has not
impacted upon the financial statements:
IFRS 10 - Consolidated Financial Statements
IFRS 11 - Joint Arrangements
IFRS 12 - Disclosure of Interests in Other Entities
IFRS 13 - Fair Value Measurement
IAS 19 - Employee Benefits (see note below)
IAS 32 - Financial Instruments (Presentation)
IAS 1- Presentation of items of Other Comprehensive Income
IAS 27 - Separate Financial Statements (amended 2011)
IAS 28 - Investments in Associates and Joint Ventures
IAS 16 - Property, Plant and Equipment
IAS 34 - Interim Reporting
IAS 19 - Employee Benefits
The Group has adopted the revised standard in relation to Retirement Benefit
Pension Schemes (IAS19 Employee Benefits). The prior year figures have
therefore been restated for comparative purposes:
Impact of IAS19 on Consolidated Income Statement
£000
Previously declared - profit for year (after taxation) 555
- basic and diluted earnings per share 21.9p
Administration costs of defined benefit pension scheme (48)
Impact of change in measurement of expected return on pension scheme assets (135)
Impact of change on deferred tax 43
Restated - profit for year (after taxation) 415
- basic and diluted earnings per share 16.4p
Impact of IAS19 Consolidated Statement of Comprehensive Income
£000
Previously declared - total comprehensive income for the year (836)
Decrease in profit for year (after taxation) (140)
Change in actuarial loss on defined benefit pension scheme 183
Impact of change on deferred tax (43)
Restated - total comprehensive income for the year (836)
Adoption of IAS19 has had no impact of the Statement of Financial Position for
the prior year.
At the date of authorisation of these financial statements, the following
Standards and Interpretations which have not been applied in these financial
statements were in issue but not yet effective:
IAS 27 - Separate Financial Statements (October 2012)
IFRS 10 - Consolidated Financial Statements (October 2012)
IFRS 12 - Disclosure of Interests in Other Entities (October 2012)
IFRS 14 - Regulatory Deferral Accounts (January 2014)
IAS 19 - Employee Benefits (November 2013)
IFRS 2 - Share Based Payment (December 2013)
IFRS 3 - Business Combinations (December 2013)
IFRS 8 - Operating Segments (December 2013)
IFRS 13 - Fair Value Measurement (December 2013)
IAS 16 - Property, Plant and Equipment (December 2013)
IAS 24 - Related Party Disclosures (December 2013)
IAS 38 - Intangible Assets (December 2013)
IAS 40 - Investment Property (December 2013)
2 Accounting policies
Basis of preparation of preliminary financial information
The financial statements, upon which this financial information is based, have
been prepared using accounting policies consistent with International
Financial Reporting Standards (IFRS) and International Financial Reporting
Interpretation Committee (IFRIC) Interpretation as adopted by the European
Union and the requirements of the Companies Act applicable to companies
reporting under IFRS.
This financial information does not constitute the Company's statutory
accounts as defined in Section 434 of the Companies Act 2006 and has been
prepared on the basis of the accounting policies set out in the financial
statements for the year ended 31 March 2014. Statutory accounts for 2013 have
been delivered to the Registrar of Companies, and those for 2014 will be
delivered in due course following the company's Annual General Meeting. The
auditors have reported on the 2013 accounts and their report was unqualified,
did not include references to any matters by way of emphasis without
qualifying their report and did not contain statements under Section 498 (2)
or (3) of the Companies Act 2006.
The Annual Report and Financial Statements will be posted to shareholders
shortly and thereafter will be available from the Company's registered office,
and from the Company's website www.samuel-heath.com.
The financial statements have been prepared under the historical cost basis
except for the valuation of Available for Sale Assets which have been revalued
to market value.
3 Critical accounting and key sources of estimation
Critical judgements in applying the entity's accounting policies
In the process of applying the entity's accounting policies the directors have
made the following judgements that have the most significant effect on the
amounts recognised in the financial statements.
Income taxes
The Group is subject to income taxes in the United Kingdom. Judgment is
required in determining the provision for income taxes. There are many
transactions and calculations for which the ultimate tax determination is
uncertain during the ordinary course of business. The Group recognises
liabilities for anticipated tax audit issues based on estimates of whether
additional taxes will be due. Where the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will
impact the income tax and deferred tax provisions in the period in which such
determination is made.
The recoverable amounts of the Group's deferred tax assets have been
determined based on the Board's estimates of future taxable profits and income
and tax rates.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation
uncertainty at the balance sheet date, that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below.
Valuation of intangible assets
Intangible assets are initially valued at their cost and then evaluated
periodically for impairment. For purposes of valuation an intangible asset is
considered impaired if its carrying value is less than the expected net cash
flow from the asset.
Valuation of inventories
Determining the valuation of inventories requires an estimation of the
obsolescence provision required to write down items to their realisable
value.
Retirement benefit scheme deficit
The valuation of expected returns on assets and the present value of the
liabilities of the scheme are determined by assumptions and estimates made by
the directors based on the current information to hand. Therefore amounts are
open to fluctuations in the future due to unforeseen changes or additional
factors that come to light following the year end.
4. Sales revenue by geographical market
2014£000 2013£000
Overseas 4,246 3,810
Home 6,733 6,273
10,979 10,083
5. Income taxes
2014£000 2013£000
(Restated)
Current taxes 116 20
Deferred taxes 51 15
Total income taxes 167 35
Corporation tax is calculated at 20% (2013: 20%) of the estimated assessable
profit for the year.
Tax rate reconciliation
2014£000 2013£000
(Restated)
Profit for the year 610 450
Corporation tax charge thereon at 20% (2013: 20%) 122 90
Adjusted for the effects of:
Depreciation in excess of capital allowances 16 7
Marginal relief 9 -
Prior year adjustments 69 1
Research and development claim (1) (28)
Capitalisation of research and development expenditure (11) (23)
Loan relationships (15) (13)
Other adjustments (22) 1
Total income taxes 167 35
Effective tax rate 27.4% 7.8%
6. Dividends
2014 2013
£ 000 £ 000
Final dividend for the year ended 31st March 2013 of 6.25 pence per share (2012: 6.25 pence per share) 158 158
Interim dividend for the year ended 31st March 2014 of 5.50 pence per share (2013: 5.50 pence per share) 140 140
298 298
In addition to the dividends paid during the year the directors are
recommending a final dividend for 2014 of 6.25 pence per share amounting to
£158,000. The proposed final dividend is subject to approval at the Annual
General Meeting (see note 8) and has not been included as a liability in these
accounts.
7. Earnings per share
The basic and diluted earnings per share are calculated by dividing the
relevant profit after taxation of £443,000 (2013 Restated: £415,000) by the
average number of ordinary shares in issue during the year being 2,534,322
(2013: 2,534,322). The number of shares used in the calculation is the same
for both basic and diluted earnings.
8. Notes to the cash flow statement
2014 2013
£000 £000
(Restated)
Operating profit 698 350
Depreciation, amortisation and impairment 425 385
Gain on disposal of property, plant and equipment (13) (6)
Pension scheme administration costs 42 48
Operating cash flows before movements in working capital 1,152 777
Increase in inventories (168) (116)
Decrease/(increase) in receivables 75 (29)
Increase/(decrease) in payables 214 (143)
Pension contributions (350) (350)
Cash generated by operations 923 139
Income tax paid (15) (67)
Net cash flow from operating activities 908 72
Cash and cash equivalents (which are presented as a single class of assets on
the face of the Statement of Financial Position) comprise cash at bank and
other short-term highly liquid investments with a maturity of three months or
less.
9. Notice of annual general meeting
Notice is hereby given that the 2014 Annual General Meeting of the Company
will be held at the registered office of the Company, Leopold Street,
Birmingham, on 15th August 2014 at 12.00 noon. The final Ordinary Share
dividend of 6.25 pence, if approved, will be payable on 22nd August 2014 to
ordinary shareholders registered at close of business on 25th July 2014.
This information is provided by RNS
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