REG - Heath(Samuel) & Sons - Half-year Report
26/11/2024 07:00
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RNS Number : 5945N Heath(Samuel) & Sons PLC 26 November 2024
SAMUEL HEATH & SONS plc
("Samuel Heath" or "the Company")
UNAUDITED HALF-YEAR REPORT
Half year ended 30 September 2024
CHAIR'S STATEMENT
For the half year ended 30 September 2024, sales came in at £7.55m
representing a decrease of £260k (3.3%) compared to the six months ended 30
September 2023 which included a final delivery to a large London contract. The
order book held up reasonably well despite adverse market conditions in the
UK, where market intelligence suggested order volumes were generally down
around 20%. However, the October 2024 order intake was significantly below
budget (as discussed below).
Operating profit was £481k which compares with £465k in the six months to 30
September 2023, a £16k increase despite the £260k sales reduction. The small
improvement in margin reflected labour savings and lower utility costs, as
well as lower advertising and trade show costs.
Cash and cash equivalents at 30 September 2024 increased by £253k to
£1.937m, from £1.684m as at 31 March 2024. Working capital reduced by £130k
(mainly lower stocks), while plant expenditure of £319k was incurred to
support production efficiency and productivity. However, a significant factor
was the absence of a contribution to the defined benefit pension scheme (six
months to 30 September 2023: £300k).
As mentioned in the financial statements for the year to 31 March 2024, the
board has agreed with the pension trustees that the company contribution would
be reduced to £300k in the year to 31 March 2025. This newly agreed level
will be paid in the second half of the current financial year. Also as
previously indicated, the trustees were asked to request a formal valuation at
31 March 2024 and this has now been completed. Using conservative assumptions,
the report shows a surplus of £572k on an ongoing basis. In addition, the
scheme assets have been transferred to a new fiduciary manager and invested
such as to match the performance of assets and liabilities, with the intention
of being able to buy out the fund in due course (note the scheme currently has
a deficit on a 'solvency' basis).
Looking to the second half of the year, the Board has concerns about the
economic environment and the state of the markets. As already mentioned, the
order intake in October 2024 was significantly below budget and compared to
previous months. Up until then, we appeared to be gaining some market share,
against a background of depressed markets in the UK. Concerns about the UK
government's budget, combined with anticipation of the US election result,
contributed to a marked slowdown in order intake which has been evident in the
market for several months. With both major events now concluded, we are
hopeful that projects that have been on hold will now resume, though this may
take several months to reach us in the form of confirmed orders.
The Company is pleased to report that the Forme Collection, launched 18 months
ago, is selling ahead of budget and should continue to do so. This year has
seen the introduction of four key new finishes, with Anthracite and Old Brass
shown for the first time at the recent Decorex London exhibition to a very
positive audience. New finishes, as we have seen with the recent Antique Brass
Matt, can be a significant driver of sales.
Anthony Buttanshaw
Chair
26 November 2024
Dividend
As a result of the uncertain trading conditions, the directors recommend the
same interim dividend as last year at 4.5p per share (2023: 4.5p). The interim
dividend will be paid on 21 March 2025 to shareholders on the register at the
close of business on 21 February 2025. The ex-dividend date for this payment
is 20 February 2025.
This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.
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 2024
CONSOLIDATED INCOME STATEMENT
Half year Half year Year
ended 30 ended 30 ended 31
September September March
2024 2023 2024
Unaudited Unaudited Audited
£'000 £'000 £'000
Revenue 7,548 7,808 15,237
Cost of sales (4,114) (4,298) (8,137)
Gross profit 3,434 3,510 7,100
Selling and distribution costs (1,886) (1,956) (3,973)
Administrative expenses (1,067) (1,089) (2,313)
Other operating income - grants (note 5) - - 18
Operating profit 481 465 832
Finance income - - 64
Finance cost (42) (32) (12)
Profit/(loss) before taxation 439 433 884
Taxation (28) (22) (116)
Profit for the period 411 411 768
Basic and diluted earnings per ordinary share (note 4) 16.2p 16.2p 30.3p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Half year ended 30 September Half year ended 30 September Year ended 31 March
2024 2023 2024
Unaudited Unaudited Audited
£'000 £'000 £'000
411 411 768
Profit for the period
Items that will not be reclassified to profit or loss:
Actuarial profit on defined benefit pension scheme 332 45 693
Deferred tax on actuarial profit (82) (11) (174)
Revaluation of property, plant and equipment (43) - -
Deferred tax on revaluation 11 - -
218 34 519
Total comprehensive income for the period 629 445 1,287
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 September At 30 September At 31 March
2024 2023 2024
Unaudited Unaudited Audited
£'000 £'000 £'000
Non-current assets
Intangible assets 963 723 911
Property, plant and equipment 4,728 4,951 4,733
Deferred tax assets - - -
Retirement benefit scheme (note 6) 941 - 767
6,632 5,674 6,411
Current assets
Inventories 4,650 4,690 4,842
Trade and other receivables 1,749 2,448 2,071
Current tax receivable - - -
Cash and cash equivalents 1,937 1,473 1,684
8,336 8,611 8,597
Total assets 14,968 14,285 15,008
Current liabilities
Trade and other payables (1,548) (1,718) (1,989)
Right of use lease liabilities (28) (62) (60)
Current tax payable (28) (22) -
(1,604) (1,802) (2,049)
Non-current liabilities
Right of use liabilities (19) (24) (25)
Deferred tax liability (758) (818) (759)
Retirement benefit scheme (note 6) - (195) -
(777) (1,037) (784)
Total liabilities (2,381) (2,839) (2,833)
Net assets 12,587 11,446 12,175
Equity
Called up share capital 254 254 254
Capital redemption reserve 109 109 109
Revaluation reserve 1,079 1,183 1,146
Retained earnings 11,145 9,900 10,666
Equity shareholders' funds 12,587 11,446 12,175
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the Parent Company
Share capital Capital redemption reserve Revaluation reserve Retained earnings Total equity
£000 £000 £000 £000 £000
Balance at 31 March 2023 254 109 1,220 9,610 11,193
Total transactions with owners
Equity dividends paid - - - (192) (192)
Profit for the period - - - 411 411
Other comprehensive income for the period - - - 34 34
Reclassification of depreciation on revaluation
- - (37) 37 -
Total comprehensive income for the period - - (37) 482 445
Balance at 30 September 2023 254 109 1,183 9,900 11,446
Total transactions with owners
Equity dividends paid - - - (113) (113)
Profit for the period - - - 357 357
Other comprehensive income for the period - - - 485 485
Reclassification of depreciation on revaluation
- - (37) 37 -
Total comprehensive income for the period - - (37) 879 842
Balance at 31 March 2024 254 109 1,146 10,666 12,175
Total transactions with owners - - - (217) (217)
Equity dividends paid
Profit for the period - - - 411 411
Other comprehensive income for the period - - (32) 250 218
Reclassification of depreciation on revaluation
- - (35) 35 -
Total comprehensive income for the period - - (67) 696 629
Balance at 30 September 2024 254 109 1,079 11,145 12,587
CONSOLIDATED CASH FLOW
STATEMENT
Half year ended 30 September Half year ended 30 September Year ended 31 March
2024 2023 2024
Unaudited Unaudited Audited
£'000 £'000 £'000
Cash flow from operating activities
Profit for the period before taxation 439 433 884
Adjustments for:
Depreciation 246 238 535
Amortisation 106 63 154
(Profit)/loss on disposal of property, plant and equipment (39) - 1
Net finance costs/(income) 1 (57) (52)
Defined benefit pension scheme expenses 83 83 38
Contributions to defined benefit pension scheme - (300) (909)
Operating cash flow before movements in working capital 836 460 651
Changes in working capital:
Decrease/(increase) in inventories 192 (303) (455)
Decrease/(increase)in trade and other receivables 319 (819) (442)
(Decrease)/increase in trade and other payables (381) 107 345
Cash (used in) / generated from operations 130 (1,015) (552)
Taxation received - - 38
Net cash from / (used in) operating activities 966 (555) 137
Cash flow from investing activities
Payments to acquire property, plant and equipment (319) (402) (476)
Proceeds from the sale of property, plant and equipment 36 - 1
Payments to acquire intangible assets (150) (95) (374)
Net finance income/(costs) (1) 57 62
Net cash outflow from investing activities (434) (440) (787)
Cash flow from financing activities
Payment for right of use assets (38) (33) (71)
Dividends paid (217) (192) (305)
Net cash outflow from financing activities (255) (225) (376)
Net increase/(decrease) in cash and cash equivalents 277 (1,220) (1,026)
Effect of exchange rate differences on cash or cash equivalents (24) (24) (7)
Cash and cash equivalents at beginning of period 1,684 2,717 2,717
Cash and cash equivalents at end of period 1,937 1,473 1,684
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 2024 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 2024 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 2023 were
also unaudited.
2. ACCOUNTING POLICIES
Basis of accounting
The report has been prepared on a going concern basis in accordance UK-adopted
International Accounting Standards.
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 2024. The valuation of inventories is considered
to be the main area in terms of significant accounting estimates and
judgements.
The retirement benefit scheme surplus recognised in these interim accounts
reflects the estimated change in the surplus at 30 September 2024 from the
movements in discount rates and inflation during the six months.
3. DIVIDENDS
A final dividend for the financial year 2024 of 8.5625p per share (2023:
7.5625p) was paid during the period.
An Interim dividend for the financial year 2025 of 4.5p per share is proposed
(2024: 4.5p), payable on 21 March 2025.
4. EARNINGS PER SHARE
The basic and diluted earnings per share are calculated by dividing the
relevant profit after taxation of £411,000 (2023: profit £411,000) by the
average number of ordinary shares in issue during the period being 2,534,322
(2023: 2,534,322). The number of shares used in the calculation is the same
for both basic and diluted earnings.
5. OTHER OPERATING INCOME
Income was received for the financial year 2024 from RTC North in the form of
Grant Funding, supporting the Feasibility of Automated Unloading.
Half year ended 30 September Half year ended 30 September Year ended 31 March
2024 2023 2024
Unaudited Unaudited Audited
£'000 £'000 £'000
RTC North grant income - - 18
Total other operating income - - 18
Income has been accounted for under the accruals method.
NOTES TO THE INTERIM FINANCIAL REPORT (cont.)
6. RETIREMENT BENEFIT SCHEME
The values used in the Financial Statements are valued using IAS 19, which
shows a surplus of £1.255m (shown in the balance sheet as £941k net of
deferred tax). However, the Director's support the goal of a Buyout for the
Scheme which is likely to result in a premium being paid to the insurance
company. This would mean that the Directors do not expect this asset to be
realised or ultimately distributable.
Contributions for the year to 31 March 2025 have been agreed at £300,000,
which have yet to be paid.
Note:
Certain statements made in this announcement are forward-looking statements.
These forward-looking statements are not historical facts but rather are based
on the Company's current expectations, estimates, and projections about its
industry; its beliefs; and assumptions. Words such as 'anticipates,'
'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar
expressions are intended to identify forward-looking statements. These
statements are not a guarantee of future performance and are subject to known
and unknown risks, uncertainties, and other factors, some of which are beyond
the Company's control, are difficult to predict, and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. The Company cautions security holders and
prospective security holders not to place undue reliance on these
forward-looking statements, which reflect the view of the Company only as of
the date of this announcement. The forward-looking statements made in this
announcement relate only to events as of the date on which the statements are
made. The Company will not undertake any obligation to release publicly any
revisions or updates to these forward-looking statements to reflect events,
circumstances, or unanticipated events occurring after the date of this
announcement except as required by law or by any appropriate regulatory
authority.
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