REG - Heath(Samuel) & Sons - Half-year Report

Samuel Heath and SonsAnnouncement

12/11/2020 07:01

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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