TIDMHSM

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 GBP6k before exceptional items (2019: GBP363k), on sales of GBP4.850m (2019: GBP6.920m). 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 GBP224k before taxation (2019: profit GBP363k).

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 
                                                GBP'000            GBP'000             GBP'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               596                  -                   - 
  6) 
 
 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          Half year          Year ended 
                                               ended 30           ended 30            31 March 
                                              September          September 
                                                   2020               2019                2020 
                                              Unaudited          Unaudited             Audited 
                                                GBP'000            GBP'000             GBP'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                   At 31 
                                                                 September                   March 
                                               2020                   2019                    2020 
                                          Unaudited              Unaudited                 Audited 
                                            GBP'000                GBP'000                 GBP'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                          1,308                  1,224                   1,349 
  Retained earnings                           2,790                  3,091                   3,951 
 
 Equity shareholders' funds                   4,461                  4,678                   5,663 
                                   ================       ================       ================= 
 
 
 
 
 
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                                         Share   Capital redemption   Revaluation         Retained     Total equity 
                                       capital              reserve       reserve         earnings 
                                        GBP000               GBP000        GBP000           GBP000           GBP000 
 
 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                             -                    -             -              170              170 
  Reclassification of depreciation 
  on revaluation                             -                    -          (53)               53                - 
                                     ---------  -------------------  ------------  ---------------  --------------- 
 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                             -                    -           159              191              350 
  Reclassification of depreciation 
  on revaluation                             -                    -          (34)               34                - 
                                     ---------  -------------------  ------------  ---------------  --------------- 
 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                             -                    -             -          (1,021)          (1,021) 
  Reclassification of depreciation 
  on revaluation                             -                    -          (41)               41                - 
                                     ---------  -------------------  ------------  ---------------  --------------- 
 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           Half year          Year ended 
                                                       ended 30            ended 30            31 March 
                                                      September           September 
                                                           2020                2019                2020 
                                                      Unaudited           Unaudited             Audited 
                                                        GBP'000             GBP'000             GBP'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.             DIVIDS 

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 GBP181,000 (30 September 2019: profit GBP294,000) 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                                                         GBP571,000 
                                   Borough Hammersmith & Fulham          GBP  25,000 

Income has been accounted for under the accruals method.

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November 12, 2020 02:00 ET (07:00 GMT)