Half-year Report

RNS Number : 3756W
Slingsby(H.C.)Plc
18 August 2020
 

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

 

18 August 2020

H C Slingsby plc

("Slingsby" or "the Company")

Report for the half year ended 30 June 2020

 

Statement by the Chairman

Trading

 

In my trading update of 19 June 2020, I reported that Group sales in the five months to 31 May 2020 were 3% lower than prior year but that an improved level of gross margin and lower overheads meant that operating profit was higher than the comparable period in 2019.  We were cautious regarding the outlook due to the significant uncertainty caused by the Coronavirus and that orders were concentrated on a limited product range.

 

The Group received a high level of orders during June 2020 and whilst fulfilment of these orders was challenging, the Group reported sales in June 2020 which were 50% higher than in June 2019.  As a result, sales for the six months to 30 June 2020 were 5% higher compared with the same period in the prior year.  This higher level of sales, combined with improved gross margin, led to an operating profit for the six months to 30 June 2020 of £0.5m (2019: £0.1m). The Group's profit before tax was £0.4m compared to a prior year loss before tax of £52,000.

 

Orders remain focussed on a limited number of products.  The Group has managed to largely fulfil demand for these products to enable customers to continue or re-start their operations in accordance with Government Coronavirus guidance.  However, we remain cautious that this increase in demand is short term and economic conditions may deteriorate should our customers suffer from lower levels of activity than they experienced prior to the pandemic when Government stimulus measures are withdrawn. 

 

Balance sheet

 

The Group had net assets of £1.32m at 30 June 2020 compared to net assets of £1.67m at 31 December 2019.  This reduction is due to an increase in the liability relating to the defined benefit pension scheme of £0.7m (after associated deferred tax).  The retirement benefit obligation increased during the six months to 30 June 2020 due to the fall in the discount rate used by the scheme actuary caused by the continued low interest rate environment.  This has the impact of increasing scheme liabilities, which outweighed an increase in the value of scheme assets.  The Company made deficit reduction contributions totalling £150,000 in the six months to 30 June 2020 in line with the agreement with the scheme's Trustee.

 

Cashflow

 

The Group had net debt of £0.4m at 30 June 2020 (£1.3m at 30 June 2019) compared to £1.1m at 31 December 2019.  Stock levels at 30 June 2020 were £0.3m higher than at 31 December 2019 (£0.2m higher than at 30 June 2019) due to the Group's sourcing strategy in response to increased customer demand for products relating to the Coronavirus. The Group continues to operate within its existing banking facilities and the Directors continue to believe that the Group has additional funding options available should the need arise.  The Group continues to utilise appropriate Government schemes to assist with cashflow.

 

 

Dividend

 

Due to the agreement reached with the Trustee of the defined benefit pension scheme, the Board is unable to declare an interim dividend.

 

People

We would like to thank our employees for their hard work and adaptability which has enabled the Group to maintain its operations and continue to help its customers through this difficult time. 

 

 

 

 

 

Dominic Slingsby

Interim Executive Chairman and Operations Director

 

 

For further information please contact:

 

H C Slingsby plc

Dominic Slingsby, Interim Executive Chairman    01274 535 030

Morgan Morris, Group Chief Executive

Allenby Capital Limited

David Worlidge/James Hornigold  020 3328 5656

 

 

 

 

 

Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2020

 

 

 

Half year

Half year

Year

 

 

ended

ended

ended

 

 

30/06/20

(Unaudited)

30/06/19

(Unaudited)

31/12/19

(Audited)

 

Note

£'000

£'000

£'000

 

Revenue

 

10,455

9,946 

19,568 

 

 

---------

---------

---------

Operating profit before exceptional items

 

505

93 

446 

Exceptional items

2

-

2,726 

 

 

---------

---------

---------

Operating profit

 

505

93

3,172 

 

 

 

 

 

Finance costs

 

(81)

(145)

(285)  

 

 

--------

--------

--------

Profit/(Loss) before taxation

 

424

(52)

2,887

Taxation

3

(38)

21

(552)   

 

 

--------

--------

--------

Profit/(Loss) for the period attributable to equity shareholders

386

--------

(31)

--------

2,335

--------

Basic and diluted profit/(loss) per share

 

38.6p

(3.1p)

233.5p

 

 

--------

--------

--------

 

 

 

 

 

 

The results set out above derive entirely from continuing operations.

 

The above unaudited condensed consolidated income statement should be read in conjunction with the accompanying notes.

 

 

Unaudited Consolidated Statement of Comprehensive Income and Expense for the half year ended 30 June 2020

 

 

 

Half year

Half year

Year

 

 

 

ended

ended

ended

 

 

 

30/06/20

(Unaudited)

30/06/19

(Unaudited)

31/12/19

(Audited)

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

Profit/(Loss) for the period

 

386

(31)

2,335

 

Items that will not be reclassified to profit or loss

 

 

 

 

 

Remeasurements of post-employment benefit obligations

 

(883)

 

(1,979)

 

(1,069)

 

 

Movement in deferred tax relating to retirement

benefit obligation

 

150

 

337

 

103

 

 

 

--------

--------

--------

 

Other comprehensive expense

 

(733)

  (1,642)

  (887)

 

 

 

 

 

 

 

 

 

--------

--------

--------

 

Total comprehensive (expense)/income recognised for the period attributable to equity shareholders 

 

 

(347)

 

(1,673)

 

1,448

 

 

 

--------

--------

--------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

             

The above unaudited consolidated statement of comprehensive income and expense should be read in conjunction with the accompanying notes.

 

 

Unaudited Consolidated Balance Sheet as at 30 June 2020

 

 

 

30/06/20

(Unaudited)

30/06/19

(Unaudited)

31/12/19

(Audited)

 

 

£'000

£'000

£'000

Assets

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

 

5,089

4,588

5,296

Intangible assets

 

650

720

610

Goodwill

 

700

1,734

700

Deferred tax asset

 

1,239

1,775

1,115

 

 

---------

---------

--------

 

 

7,678 

8,817 

7,721 

 

 

---------

---------

--------

Current assets

 

 

 

 

Inventories

 

2,456

2,276

2,134

Trade and other receivables

 

3,046

2,612

2,401

Cash and cash equivalents

Current tax asset

Derivative financial asset

 

1,696

-

7

1,397

-

6

1,278

-

-

 

 

---------

---------

---------

 

 

7,205 

6,291 

5,813

 

 

---------

---------

---------

 

Liabilities

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

Bank borrowings

Derivative financial obligations

Lease obligations

 

(3,534)

(2,126)

-

(32)

(2,765)

(2,698)

-

(31)

(2,306)

(2,423)

   (8) 

  (32)

 

 

  ---------

---------

---------

 

 

(5,692)

(5,494)

(4,769)

 

 

---------

---------

---------

Net current assets

 

1,513

797 

1,044 

 

 

---------

---------

---------

Non-current liabilities

 

 

 

 

Retirement benefit obligation

Lease obligations

 

(7,359)

(50)

(10,539)

(82)

(6,558)

(66)

Deferred tax liabilities

 

(458)

(443)

(470)

 

 

---------

---------

---------

 

 

 

 

 

Net assets/(liabilities)

 

1,324 

(1,450) 

1,671 

 

 

---------

---------

---------

 

Capital and reserves

 

 

 

 

Share capital

 

250

250 

250 

Retained earnings

 

1,074

(1,700) 

1,421 

 

 

---------

---------

---------

Total equity

 

1,324 

(1,450) 

1,671 

 

 

---------

---------

---------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The above unaudited consolidated balance sheet should be read in conjunction with the accompanying notes .

 

 

 

 

Unaudited Consolidated Statement of Changes in Shareholders' Equity

 

 

Share Capital

£'000

Retained earnings

£'000

Total equity

£'000

 

 

 

 

At 1 January 2019

250 

(27)

223 

Total comprehensive income recognised for the period

 

 

(1,673)

 

(1,673)

 

 

 

 

 

---------

---------

---------

At 30 June 2019

250 

(1,700) 

(1,450) 

 

---------

---------

---------

 

 

 

 

At 1 January 2020

250

1,421

1,671

Total comprehensive expense recognised for the period

 

-

 

(347)

 

(347)

 

---------

---------

---------

At 30 June 2020

250

1,074

1,324

 

---------

---------

---------

The above unaudited consolidated statement of changes in shareholders' equity should be read in conjunction with the accompanying notes

 

Unaudited Consolidated Statement of Cash Flows for the half year ended 30 June 2020

 

 

Half year

Half year

Year

 

 

ended

ended

ended

 

 

30/06/20

(Unaudited)

30/06/19

(Unaudited)

31/12/19

(Audited)

 

Note

£'000

 

£'000

 

£'000

 

Cash flows from operating activities

 

 

 

 

Cash generated from operations

4

787

32

404

UK corporation tax received

 

-

-

(57)

Interest paid

 

(12)

(23)

(36)

 

 

---------

---------

---------

Cash generated from operating activities

 

775

311

 

 

---------

---------

---------

Cash flows from investing activities

 

 

 

 

Purchase of property, plant and equipment

 

(30)

(158)

(212)

Purchase of intangible assets

 

(12)

-

(83)

Proceeds from sales of property, plant and equipment  

-

9

20

 

 

---------

---------

---------

Net cash outflow from investing activities

 

(42)

(149)

(275)

 

 

---------

---------

---------

Cash flows from financing activities

 

 

 

 

 

Capital element of operating/finance lease repayments

 

 

(18)

 

(15)

 

  (36)

Proceeds from borrowing

 

510

526

397

Decrease in overdraft

 

(807)

(432)

(577)

 

 

---------

---------

---------

Net cash (used in)/generated from financing activities

 

(315)

79

(216)

 

 

---------

---------

---------

 

Net increase/(decrease) in cash and cash equivalents

418

(61)

(180)

 

 

 

 

 

Opening cash and cash equivalents

 

1,278

1,458

1,458

 

 

 

 

 

 

 

---------

---------

---------

Closing cash and cash equivalents

 

1,696

1,397

1,278

 

 

---------

---------

---------

The above unaudited consolidated statement of cash flows should be read in conjunction with the accompanying notes.

 

 

Notes to the Interim Report for the half year ended 30 June 2020

 

1.

Interim Financial Information

 

 

The unaudited condensed consolidated interim financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The interim financial statements, which are unaudited and have not been reviewed by the Company's auditors, have been prepared in accordance with the policies set out in the 2019 Annual Report and Accounts. The comparative figures for the year ended 31 December 2019 do not constitute full financial statements and have been abridged from the full accounts for the year ended on that date, on which the auditors gave an unqualified report, but did contain an emphasis of matter paragraph in respect of the Group's ability to continue as a going concern due to the significant uncertainty caused by Coronavirus.  They did not contain any statement under Section 498 of the Companies Act 2006. The 2019 accounts have been delivered to the Registrar of Companies.  The Company has chosen not to adopt IAS 34 'Interim Financial Statements'.

 

2.

Exceptional items

Half year

Half year

Year

 

 

ended

ended

ended

 

 

30/06/20

(Unaudited)

30/06/19

(Unaudited)

31/12/19

(Audited)

 

 

£'000

£'000

£'000

 

 

 

 

 

 

Settlement gain

Goodwill impairment provision

 

-

 

-

   3,069

  (1,034)

 

Property impairment reversal

-

-

   691

 

 

----------

---------

---------

 

 

-

----------

-

---------

2,726

---------

 

The settlement gain relates to the reduction in pension scheme liabilities (net of assets transferred) following two executive members transferring out of the scheme with the agreement of the scheme Trustee.

 

The goodwill impairment provision relates to a reduction in the carrying value of ESE Direct Limited.

 

The property impairment reversal reflects the increased value of the Group's freehold property following a recent re-valuation.  The property's value was previously impaired by £1.22m in 2017.

 

 

3.

Taxation

Half year

Half year

Year

 

 

ended

ended

ended

 

 

30/06/20

(Unaudited)

30/06/19

(Unaudited)

31/12/19

(Audited)

 

 

£'000

£'000

£'000

 

 

 

 

 

 

Current tax

24

-

41

 

Deferred tax

14

(21)

511

 

 

---------

---------

---------

 

 

38

(21)

552

 

 

---------

---------

---------

 

The effective tax rate is 9%.

 

 

 

 

4.

 

Cash generated from operations

 

Half year

Half year

Year

 

ended

ended

ended

 

30/06/20

(Unaudited)

30/06/19

(Unaudited)

31/12/19

(Audited)

 

£'000

£'000

£'000

 

 

 

 

 

Profit/(Loss) before tax

424

(52)

2,887

 

Net finance costs

81

145

285

 

Depreciation and amortisation

210

205

414

 

Defined benefit pension scheme contributions paid

Property impairment reversal

(150)

-

-

-

(125)

(691)

 

Settlement gain related to defined benefit pension scheme

Exceptional impairment provision

Profit on sale of property, plant and equipment

 

-

-

-

 

-

-

(4)

 

(3,069)

1,034

(8)

 

Increase in inventories

(322)

(329)

(186)

 

(Increase)/Decrease in trade and other receivables

(652)

  (27)

189

 

Increase/(Decrease) in trade and other payables

1,196

94 

(326)

 

 

---------

---------

---------

 

Cash generated from operating activities

787

32

404

 

 

---------

---------

---------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.  Availability of Interim Report

 

The Interim Report will be available on the Company's website www.slingsby.com.

 


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