TIDMSLNG
RNS Number : 8413X
Slingsby(H.C.)Plc
07 May 2021
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
H C SLINGSBY PLC
("Slingsby" or the "Company" or the "Group")
Audited Results for the year ended 31 December 2020
Statement by the Chairman
Board Composition
Following the Board changes in 2016, I remain as Interim
Executive Chairman and during 2018 Morgan Morris was appointed
Group Chief Executive. The Board continues to believe that it would
benefit from the appointment of new Non-Executive Directors. Whilst
this process should now be possible following the agreement with
regard to the pension scheme detailed below, it is unable to
proceed at present due to the Coronavirus restrictions.
Results
In the half year statement, I reported an operating profit of
GBP0.5m on sales of GBP10.5m. I am pleased to report that the full
year operating profit (before exceptional items) was GBP1.3m (2019:
GBP0.4m) on sales of GBP21.8m (2019: GBP19.6m). Group sales
increased by around 11% which together with an improvement in gross
margin led to a profit before taxation and exceptional items of
GBP1.1m (2019: GBP0.2m). The increase in Group sales is due to
demand for Coronavirus related products, as customers sought to
continue or restart their operations compliantly.
ESE Direct Limited ("ESE") contributed GBP5.9m of sales (2019:
GBP6.4m) and profit before tax and management charges of GBP0.5m
(2019: GBP0.39m). ESE's customer base was impacted by the
Government lockdown measures resulting from the Coronavirus
pandemic. Profit before tax increased, however, due to control of
overheads. Overheads were GBP1.16m in 2020 compared to GBP1.42m in
2019.
Group earnings before interest, tax, depreciation, amortisation
and exceptional items ("EBITDA") in the year ended 31 December 2020
were GBP1.7m (2019: GBP0.9m). Largely as a result of the profit
performance, the Group had net cash at 31 December 2020 of GBP0.3m
(2019: net debt of GBP1.1m).
Dividend
Due to the agreement reached with the Trustee of the defined
benefit pension scheme, the Board is unable to recommend a final
dividend for the year (2019: GBPnil). However, depending upon
trading during 2021 and its level of confidence going forward, the
Board's intention is to re-commence dividend payments to
shareholders as soon as it is practicable and prudent to do so.
Pension Scheme
The Company paid GBP0.3m in deficit reduction contributions
during 2020. The Company also continues to contribute GBP0.16m
towards scheme running costs. As a result of this agreement, the
Group agreed not to make distributions to shareholders prior to 1
June 2021 and to limit their quantum to GBP60,000 plus 50% of its
net cashflow over GBP150,000.
At 31 December 2020, the pension scheme deficit increased by
GBP1.6m to GBP8.2m (2019: GBP6.6m) largely due to a reduction in
the discount rate which had the effect of increasing scheme
liabilities outweighing an increase in scheme assets. This
deterioration in the pension scheme position decreased Group net
assets to GBP1.2m (2019: GBP1.7m) despite the profit generated
during the year.
During November 2020, a High Court ruling relating to how
Guaranteed Minimum Pensions were calculated when members
transferred out of the scheme was decided. This decision has the
impact of increasing the liabilities of the scheme by requiring
trustees to revisit historic transfers and top-up cash equivalent
transfer value (CETV) payments that were not adjusted from the
unequal effect of GMP. The Company has taken advice from the scheme
actuary and considers the impact to be immaterial to the results. A
fuller assessment will be made during the current year.
Recent Trading
Group sales in Q1 of 2021 against the same period in 2020
increased by 8%. This improvement in sales offset the impact of a
fall in gross margin leading to an unaudited profit before tax in
Q1 2021 being in line with that achieved in the same period in 2020
of GBP0.1m.
The market remains competitive and we are cautious regarding the
outlook. This is particularly the case due to significant
uncertainty that remains caused by the Coronavirus. Whilst the
Group's sales grew in 2020 due to demand for Coronavirus related
products, this will not necessarily continue to be the case,
particularly for items which are more capital equipment in nature.
The Group also benefitted from disruption to supply chains which
led to the Group receiving orders for virus related products during
2020 which will not repeat in 2021. As such, it is unclear as to
the impact that the virus will have on demand going forward.
In addition, the Group is experiencing significant cost
increases particularly for steel, plastic and timber products. We
have also experienced exceptionally high shipping costs and delays
in receiving goods. These increases impacted on gross margin in Q1
2021 and could continue for the remainder of the year.
Finally, I would like to thank our staff across the Group for
their efforts in 2020. The outbreak of Coronavirus presented the
Group with operational and organisational challenges which were
overcome due to the attitude and hard work of our employees. Across
the Group, we remain proud of our position as a key supplier to the
NHS and related sectors and worked hard to ensure that we have
remained "open for business".
D.S.Slingsby
Interim Executive
Chairman
6 May 2021
For further information, please contact:
H C Slingsby PLC Tel: 01274 535 030
Dominic Slingsby, Interim Executive
Chairman
Morgan Morris, Group Chief Executive
Allenby Capital Limited Tel: 020 3328 5656
David Worlidge/George Payne
Audited Consolidated Income Statement for the year ended 31
December 2020
Note 2020 2019
(Audited) (Audited)
GBP'000 GBP'000
Revenue 21,806 19,568
---------- ----------
-------------------------------------- ----- ----------- ---------------
Operating profit before exceptional
items 1,263 446
Exceptional items 2 - 2,726
-------------------------------------- ----- ----------- ---------------
Operating profit 1,263 3,172
Finance costs (154) (285)
---------- ----------
Profit before taxation 1,109 2,887
Taxation (163) (552)
---------- ----------
Profit for the year attributable to
owners of the parent 946 2,335
---------- ----------
Basic and diluted earnings per share 4 92.3p 233.5p
---------- ----------
Audited Consolidated Statement of Comprehensive Income and
Expense for the year ended 31 December 2020
2020 2019
(Audited) (Audited)
GBP'000 GBP'000
Profit for the year 946 2,335
Items that will not be classified
to profit or loss:
Re-measurements of post-employment
benefit obligation (1,784) (1,069)
Movement in deferred tax relating
to retirement benefit obligation 339 182
---------- ----------
Other comprehensive (expense)/income (1,445) (887)
---------- ----------
Total comprehensive (expense)/income
for the year attributable to equity
shareholders (499) 1,448
--------- ----------
Audited Consolidated Balance Sheet as at 31 December 2020
Note 2020 2019
(Audited) (Audited)
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 5,084 5,296
Intangible assets 518 610
Goodwill 700 700
Deferred tax asset 1,553 1,115
-------- ----------
7,855 7,721
-------- ----------
Current assets
Inventories 2,224 2,134
Trade and other receivables 2,632 2,401
Derivative financial asset - -
Cash and cash equivalents 1,781 1,278
-------- ----------
6,637 5,813
-------- ----------
Liabilities
Current liabilities
Trade and other payables (4,454) (4,729)
Derivative financial liability (7) (8)
Finance lease obligations (34) (32)
--------- ---------
(4,495) (4,769)
-------- ----------
Net current assets 2,142 1,044
-------- ----------
Non-current liabilities
Lease obligations (32) (66)
Retirement benefit obligation 3 (8,175) (6,558)
Deferred tax liabilities (582) (470)
-------- ----------
Net assets 1,208 1,671
-------- ----------
Capital and reserves
Share capital 262 250
Share Premium 24 -
Retained earnings 922 1,421
-------- ----------
Total equity 1,208 1,671
-------- ----------
Audited Consolidated Cash Flow Statement for the year ended 31
December 2020
2020 2019
(Audited) (Audited)
GBP'000 GBP'000
Note
Cash flows from operating activities
Cash generated from operations 5 1,594 404
Interest paid (13) (36)
UK corporation tax paid (41) (57)
-------- --------
Cash generated from operating activities 1,540 311
-------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (108) (212)
Proceeds from sales of property, plant
and equipment 6 20
Purchase of intangible assets (18) (83)
-------- --------
(120) (275)
Net cash used in investing activities -------- --------
Cash flows from financing activities
Capital element of lease payments (36) (36)
Proceeds from share issue 36 -
(Repayment) / proceeds of borrowings (1,034) 397
Increase / (decrease) in overdraft 117 (577)
-------- --------
Net cash used in financing activities (917) (216)
-------- --------
Net increase in cash and cash equivalents 503 (180)
Opening cash and cash equivalents 1,278 1,458
-------- --------
Closing cash and cash equivalents 1,781 1,278
-------- --------
Audited Consolidated Statement of Changes in Shareholders'
Equity
Share capital Share Retained Total equity
GBP'000 premium earnings GBP'000
GBP'000 GBP'000
1 January 2019 250 - (27) 223
Profit for the year - - 2,335 2,335
Other comprehensive income
for the year - - (887) (887)
---------- --------- ---------- ----------
Total comprehensive income
for the year - - 1,448 1,448
---------- --------- ---------- ----------
1 January 2020 250 - 1,421 1,671
Profit for the year - - 946 946
Other comprehensive expense
for the year - - (1,445) (1,445)
Total comprehensive expense ---------- --------- ----------
for the year - --------- (499) (499)
---------- --------- ---------- ----------
Issue of shares 12 24 - 36
---------- --------- ---------- ----------
31 December 2020 262 24 922 1,208
---------- --------- ---------- ----------
Notes to the Audited Results for the year ended 31 December
2020
1. The preliminary financial information does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006 for the financial year ended 31 December
2020 but has been extracted from those accounts. The annual
accounts for the year ended 31 December 2020 have been prepared
in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006.
The financial information included in this preliminary announcement
does not include all the disclosures required in accounts
prepared in accordance with International Accounting Standards
in conformity with the requirements of the Companies Act
2006 and accordingly it does not itself comply with International
Accounting Standards in conformity with the requirements
of the Companies Act 2006.
The accounting policies used in the preparation of this preliminary
announcement have remained unchanged from those set out in
the statutory accounts for the year ended 31 December 2019.
They are also consistent with those in the full accounts
for the year ended 31 December 2020 which have yet to be
published.
The auditors have reported on the accounts for the year ended
31 December 2020 and their opinion was unqualified, did not
include any matters to which the auditor drew attention by
way of emphasis and did not contain a statement under section
498(2) or (3) of the Companies Act 2006.
The auditors have also reported on the accounts for the year
ended 31 December 2019 and their opinion was unqualified
and did not contain a statement under section 498(2) or (3)
of the Companies Act 2006. The auditor drew attention by
way of emphasis to a material uncertainty related to going
concern.
Statutory accounts for 2019 have been delivered to the Registrar
of Companies and those for the financial year ended 31 December
2020 will be delivered following the Company's annual general
meeting.
2. Exceptional item 2020 2019
(Audited) (Audited)
GBP'000 GBP'000
Settlement gain - 3,069
Goodwill impairment provision - (1,034)
Property impairment reversal - 691
------------ ------------
- 2,726
------------ ------------
3. Retirement benefit obligation
2020 2019
(Audited) (Audited)
GBP'000 GBP'000
Present value of funded obligation 25,182 22,005
Fair value of scheme assets (17,007) (15,447)
------------ ------------
Net liability in balance sheet 8,175 6,558
------------ ------------
4. Profit/(loss) per share
Basic profit per share is based upon
a profit of GBP946,000 (2019: GBP2,335,000)
and on 1,025,000 (2019: 1,000,000) ordinary
shares in issue during the year.
There is no difference between basic
profit per share and diluted loss per
share for both years as there are no
potentially dilutive shares in issue.
5. Cash generated from operating activities
2020 2019
(Audited) (Audited)
GBP'000 GBP'000
Profit/(loss) before tax 1,109 2,887
Net finance costs 154 285
Depreciation and amortisation 430 414
Defined benefit pension scheme contributions
paid (304) (125)
Property impairment reversal - (691)
Settlement gain related to defined benefit
pension scheme - (3,069)
Exceptional impairment provision - 1,034
Profit on sale of property, plant and
equipment (6) (8)
Increase in inventories (90) (186)
(Increase)/Decrease in trade and other
receivables (231) 189
Increase/(Decrease) in trade and other
payables 532 (326)
------------ ------------
Cash generated from operating activities 1,594 404
------------ ------------
6. Dividends
No dividends were paid or declared during 2019 or 2020 and
the Directors are not proposing any final dividend be payable
in respect of the year ended 31 December 2020.
7. Availability of Report and Accounts
The financial statements for the year ended 31 December 2020,
containing a notice of the Annual General Meeting will be
posted to shareholders shortly.
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END
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