TIDMHSM
RNS Number : 5815S
Heath(Samuel) & Sons PLC
10 July 2020
HEATH (SAMUEL) & SONS PLC
10th JULY 2020
PRELIMINARY RESULTS FOR THE YEARED 31ST MARCH 2020
CHAIRMAN'S STATEMENT
This statement will be very much in two halves. The first part
will deal with the very successful past year's trading, and the
second, and probably much more important for the future of the
Company, the prospects for the next financial twelve months, which
has potentially been thrown into chaos by the Coronavirus pandemic
Covid-19.
Revenue at GBP13.887m was very similar to last year (2019:
GBP13.893m) and profit before tax was GBP1.368m (2019: GBP1.181m)
before exceptional items (last year's Exceptional cost of GMP
Equalisation of GBP0.299m). These results were affected very little
until the end of March, because we had a healthy order book. Then
came the closures of the majority of our customers throughout the
world. We have never closed the factory, having taken all the
necessary safety measures quite correctly required by Law. However,
because of the consequent drop in sales, we did then move to
working with a skeleton staff. The Government help, especially
through its furlough scheme in looking after our people who have
been unable to work, has been invaluable to us. The result of this
sharp downturn in activity will unsurprisingly have a devastating
effect on our profitability in the current year. However, it would
have been so much worse if we had not continued working as we did.
I would like to thank all the people from top to bottom, who were
involved with this. We ended 2019-20 with a strong balance sheet,
and good liquidity evidenced by our strong cash balance, which has
put us in good stead in the current financial year.
It is very difficult to know how the world will change after
these events. Some of these changes could very much affect an
organisation such as ours which has historically built its
reputation with face-to-face meetings with its customers throughout
the world and by exhibiting at trade exhibitions globally as
well.
Output to the end of June was 37.6% down on the same period last
year. Clearly there will be a significant loss on this figure.
Extensive work has been done on a wide range of forecast scenarios
for the current financial year. There has been input from all the
Board on these figures, which has been much welcomed. What they all
show is a large negative effect on cash flow, not helped by us
continuing to fund the large deficit in our Pension Scheme, which I
have previously discussed. With this in mind the Board does not
believe that this is the correct time to pay a final dividend, even
though our balance sheet is strong. We will revisit this decision
at the time of the Interim announcement.
Sam Heath
Chairman
9th July 2020
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information:
Samuel Heath & Sons Plc
Simon Latham - Company Secretary +44 (0)121 766 4200
Cairn Financial Advisers LLP +44 (0)20 7213 0880
James Caithie/Jo Turner
CONSOLIDATED INCOME STATEMENT
for the year ended 31st March 2020
2020 2019
Note
GBP000 GBP000
Revenue 3 13,887 13,893
Cost of sales (6,798) (7,125)
Gross profit 7,089 6,768
Selling and distribution costs (3,543) (3,474)
Administrative expenses (2,012) (1,915)
Operating profit (a) 1,534 1,379
Finance income 25 13
Finance cost (191) (211)
Profit before taxation and exceptional
items 1,368 1,181
Exceptional item - GMP equalisation 7 - (299)
Profit before taxation 1,368 882
Taxation 4 (299) (144)
Profit for the year attributable
to owners of the parent Company 1,069 738
Basic and diluted earnings per
ordinary share 6 42.2p 29.1p
============= ========
(a) Operating profit is calculated as profit before net finance costs,
exceptional items and taxation.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31st March 2020
2020 2019
GBP000 GBP000
Profit for the year 1,069 738
Items that will not be reclassified
to profit or loss:
Actuarial gain/(loss) on defined
benefit pension scheme 291 (933)
Deferred taxation on actuarial
(gain)/loss (55) 159
Deferred tax rate change 125 -
Revaluation of property, plant
and equipment 182 -
Deferred taxation on revaluation
of assets (23) -
520 (774)
Total comprehensive income for
the year 1,589 (36)
------------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31st MARCH
2020
2020 2019
GBP000 GBP000
Non-current assets
Intangible assets 151 82
Property, plant and equipment 3,635 3,210
Deferred tax asset 887 1,048
--------- --------
4,673 4,340
Current assets
Inventories 4,230 3,989
Trade and other receivables 2,370 2,286
Cash and cash equivalents 3,016 3,153
--------- --------
9,616 9,428
Total assets 14,289 13,768
Current liabilities
Trade and other payables (1,868) (1,789)
Right of use lease liabilities (58) -
Current tax payable (79) (171)
--------- --------
(2,005) (1,960)
Non-current liabilities
Right of use lease liabilities (46) -
Retirement benefit scheme (6,575) (7,420)
(6,621) (7,420)
Total liabilities (8,626) (9,380)
Net assets 5,663 4,388
--------- --------
Equity
Called up share capital 254 254
Capital redemption reserve 109 109
Revaluation reserve 1,349 1,277
Retained earnings 3,951 2,748
Equity shareholders' funds 5,663 4,388
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31st
MARCH 2020
Share Capital Revaluation Retained Total
capital redemption reserve earnings Equity
reserve
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31st March 2018 254 109 1,357 3,018 4,738
-------- ----------- ----------- --------- -------
Total transactions with owners
Equity dividends paid - - - (314) (314)
-------- ----------- ----------- --------- -------
Profit for the year - - - 738 738
Reclassification of depreciation
on revaluation - - (80) 80 -
Other comprehensive income
for the year - - - (774) (774)
-------- ----------- ----------- --------- -------
Total comprehensive income
for the year - - (80) 44 (36)
Balance at 31st March 2019 254 109 1,277 2,748 4,388
Total transactions with owners
Equity dividends paid - - - (314) (314)
-------- ----------- ----------- --------- -------
Profit for the year - - - 1,069 1,069
Reclassification of depreciation
on revaluation (87) 87 -
Other comprehensive income
for the year - - 159 361 520
-------- ----------- ----------- --------- -------
Total comprehensive income
for the year - - 72 1,517 1,589
Balance at 31st March 2020 254 109 1,349 3,951 5,663
-------- ----------- ----------- --------- -------
CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEARED 31st MARCH
2020
2020 2019
GBP000 GBP000
Cash flow from operating activities
Profit for the year before taxation 1,368 882
Adjustments for:
Depreciation 405 348
Amortisation 16 27
Profit on disposal of property, plant and equipment (3) (16)
Net finance costs/(income) (25) 17
Defined benefit pension scheme expenses 228 530
Contributions to defined benefit pension scheme (783) (516)
Operating cash flow before movements in working
capital 1,206 1,272
Changes in working capital:
Increase in inventories (241) (59)
(Increase)/decrease in trade and other receivables (84) 6
Increase in trade and other payables 79 310
Cash generated from operations 960 1,529
Taxation paid (180) (184)
Net cash from operating activities 780 1,345
Cash flows from investing activities
Payments to acquire property, plant and equipment (502) (239)
Proceeds from the sale of property, plant and
equipment 14 35
Payments to acquire intangible assets (85) (23)
Finance (costs)/income 25 (17)
(548) (244)
Cash flows from financing activities
Payment for right of use assets (55) -
Dividends paid (314) (314)
(369) (314)
Net (decrease)/increase in cash and cash equivalents (137) 787
Cash and cash equivalents at beginning of year 3,153 2,366
Cash and cash equivalents at end of year 3,016 3,153
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. Basis of preparation
The Group has prepared its consolidated financial statements for
the year ended 31st March 2020 in accordance with International
Financial Reporting Standards as adopted by the European Union. The
accounting policies applied are consistent with those included in
the financial statements of the Group for the year ended 31st March
2019 except for changes required on the adoption of IFRS 16
"Leases".
IFRS 16 brings operating leases onto the statement of financial
position. The Group has used the modified retrospective transition
approach on adoption of IFRS 16 Leases, where the initial right of
use asset values recognised on property leases of GBP159k are equal
to the present value of the future lease payments as at the date of
transition (1 April 2019). The adoption of IFRS 16 did not have a
material impact on the Group's consolidated results or financial
position.
The financial information contained in this preliminary
announcement does not constitute the Group's statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
The annual report and financial statements for the year ended
31st March 2020 were approved by the Board of Directors on 9th July
2020 along with this preliminary announcement. The annual report
and financial statements will be delivered to the Registrar of
Companies after the Annual General Meeting.
The statutory accounts of Samuel Heath & Sons PLC for the
year ended 31 March 2019 have been delivered to the Registrar of
Companies. The auditor's reports on the statutory accounts for the
years ended 31st March 2020 and 31st March 2019 were unqualified
and did not contain a statement under section 498 of the Companies
Act 2006.
2. Critical accounting and key sources of estimation
Critical accounting estimates, assumptions and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates and assumptions will, by
definition, seldom equal the related actual results. The Group has
evaluated the estimates and assumptions that have been made in
relation to the carrying amounts of assets and liabilities in these
financial statements.
The key accounting judgements and sources of estimation
uncertainty with a significant risk of causing a material
adjustment to assets and liabilities in the next 12 months include
the following:
Pensions - movements in equity markets, interest rates and life
expectancy could materially affect the level of surpluses and
deficits in the defined benefit pension scheme.
Valuation of property, plant and equipment - the Group reviews
the value, useful economic lives and residual values attributed to
assets on an on-going basis to ensure they are appropriate. Changes
in market value, economic lives or residual values could impact the
carrying value and charges to the income statement in future
periods.
Provisions - using information available at the balance sheet
date, the Directors make judgements based on experience on the
level of provision required against assets, including inventory and
trade receivables. Further information received after the balance
sheet date may impact the level of provision required.
Deferred tax assets - deferred tax assets are recognised to the
extent that it is probable that taxable profit will be available
against which the losses can be utilised. Management judgement is
required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and level of future
taxable profits.
3. Revenue by geographic
market
2020 2019
GBP000 GBP000
Overseas 5,969 6,027
Home 7,918 7,866
13,887 13,893
------- -------
4. Income taxes
2020 2019
GBP000 GBP000
Current taxes:
Current year 81 169
Adjustments in respect of prior periods 11 11
-------- --------
92 180
Deferred taxes:
Origination and reversal of temporary differences 174 (36)
Change in tax rate 8 -
Adjustments in respect of prior period 25 -
-------- --------
207 (36)
Total income taxes 299 144
-------- --------
Corporation tax is calculated at 19% (2019: 19%) of the
estimated assessable profit for the year.
Tax reconciliation
2020 2019
GBP000 GBP000
Profit for the year 1,368 882
-------- -------
Corporation tax charge thereon at 19% (2018:
19%) 260 168
Adjusted for the effects of:
Prior year adjustments 36 11
Research and development claim (21) (7)
Changes in tax rates 8 -
Other adjustments 16 (28)
Total income taxes 299 144
-------- -------
Effective tax rate 21.9% 16.3%
-------- -------
5. Dividends
2020 2019
GBP000 GBP000
Final dividend for the year ended 31st March
2019 of 6.875 pence per share (2018: 6.875
pence per share) 174 174
Interim dividend for the year ended 31st
March 2020 of 5.50 pence per share (2019:
5.50 pence per share) 139 139
313 313
------ ------
The directors do not recommend a final dividend for this year,
in view of the uncertainty resulting from the coronavirus
pandemic.
6. Earnings per share
The basic and diluted earnings per share are calculated by
dividing the relevant profit after taxation of GBP1,069,000 (2019:
GBP738,000) by the average number of ordinary shares in issue
during the year being 2,534,322. The number of shares used in the
calculation is the same for both basic and diluted earnings.
7. Exceptional item
In 2019, the business recognised the past service cost resulting
from Guaranteed Minimum Pension (GMP) equalisation as an
exceptional item on the basis that it is a one off cost of
substance arising from a legal case during the financial year.
GMP equalisation is the recognition that during the 1990s
benefits accrued differently for men and women based on their then
different retirement ages.
8. Notice of annual general meeting
Notice is hereby given that the 2020 Annual General Meeting of
the Company will be held at the registered office of the Company,
Leopold Street, Birmingham, on 7(th) August 2020 at 12.00 noon.
The Board is monitoring closely the current UK Government
guidance on public gatherings and meetings, and in light of this
the Company will proceed with the AGM with the minimum quorum of
shareholders present to conduct business. Any shareholders who try
to attend on the day unfortunately will be refused entry. The Board
recognises the importance of the AGM to Shareholders and would
encourage any wishing to vote to do so by proxy.
9. Posting of accounts
The report and accounts are being posted to shareholders today
where requested, and are available on the Company's website, at
www.samuel-heath.com/investor-relations .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SSSFDUESSEEW
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