TIDMSNCL
RNS Number : 8345K
Sinclair (William) Holdings PLC
30 June 2014
30 June 2014
WILLIAM SINCLAIR HOLDINGS PLC
("William Sinclair", the "Company" or the "Group")
Unaudited Interim Results for the six months ended 31 March
2014
William Sinclair Holdings PLC is one of the UK's leading
producers of horticulture products. William Sinclair's customers
include The Garden Centre Group, B&Q, Tesco, Wilkinson,
Morrisons and Makro as well as a large number of independent garden
centres and garden centre groups.
Period Highlights
-- Development of Ellesmere Port on budget and on time
-- Revenue GBP21.8 million (2013: GBP20.4 million)
-- Loss before exceptional items and tax GBP1.8 million (2013: GBP1.7 million)
-- Exceptional refinancing costs of GBP1 million and dual running costs of GBP0.3 million
-- GBP8.24 million raised via convertible loan notes, refinancing of banking facilities
-- Relocation of all Silvaperl operations from Gainsborough completed
-- Lease agreed for further 10 acres of pallet storage, option to acquire additional 12 acres
Current Period Highlights
-- Bolton Fell compensation sum settled at GBP21.25 million.
Cash balance of GBP12.25 million to be received by 1 August
2014
-- Strong financial position supports on-going development work
at Ellesmere Port and modernisation of the Company
-- New SuperFyba equipment installed and producing high quality product
-- Installation of new mixing and bagging lines for growing media production on track
-- Marketing strategy and new product plans finalised for 2015 season
Peter Rush, Chief Executive, William Sinclair Holdings PLC,
said:
"We are delighted with the GBP21.25 million agreement to settle
our claim at Bolton Fell. After four years of negotiations this is
a significant step forward and our strong financial footing will
enable us to accelerate the Company's transition to become the UK's
most advanced manufacturer of horticulture products. While there
are further milestones to be met the largest investments have been
committed and good progress has been made with the more challenging
work. Improvements to product quality and efficiency benefits are
already being created.
"Product quality and consistency are paramount to our potential
and existing customers and we will be working closely with them to
ensure that our forthcoming 2015 product range not only matches
these expectations but exceeds them."
For further information:
William Sinclair Holdings PLC Tel: 01522 537561
Peter Rush, Chief Executive
Peter Williams, Finance Director
Mark Way, Corporate Communications Tel: 07786 116991
WH Ireland
Andrew Kitchingman Tel: 0113 394 6619
Nick Field Tel: 0207 220 1658
CHAIRMAN'S STATEMENT
For the 6 months ended 31 March 2014 (unaudited)
Bolton Fell compensation
We are delighted to announce that the Company has reached a
settlement over the buy-out of its land interests and peat
extraction rights at Bolton Fell and the resultant closure of the
factory at the site. The tribunal case to decide the level of
compensation was due to start on Monday 30 June 2014 but following
a period of intense negotiations a final settlement figure was
agreed instead. The total compensation sum has been fixed at
GBP21.25 million inclusive of costs. The Company was paid GBP9
million in April 2010 and the final balance of GBP12.25 million
will be received by the Company within the next few weeks.
The Board is very pleased with this outcome and wishes to
express its sincere thanks to the whole Sinclair team. Our
professional advisers and, most importantly, our own staff, have
worked very hard to achieve this successful conclusion. The cash
receipt will assist the Group to progress with its ambitious
development plans.
Trading Review
Trading conditions in the six months to March 2014 were
challenging as had been expected. This was made harder by the
refinancing of the Company which meant our strategic plans were put
on hold for four months.
Sales in the period were reasonable in the retail sector, with
the new business from a major garden centre company starting to
come on stream. However, a decision made 18 months ago in response
to the shortage of peat for the professional sector, to raise
prices significantly has proved to have had damaging longer-term
consequences. As a result, our trading with this sector of the
market is substantially down on previous years.
Since the disruption caused by the refinancing, our plans to
develop both the manufacturing facility at Ellesmere Port and the
marketing plans have progressed well.
We have commissioned new plant to screen and wash the composted
wood from our green compost suppliers. This has resulted in a
significantly improved input material for the SuperFyba processing
plant which, in turn, means a very high quality product is now
being produced. In addition the new mixing and bagging lines for
the advanced manufacture of our growing media products are on
course to be operational on time and within budget for production
to commence in September 2014.
We have completed a full review of all of our consumer products
and have developed some exciting new positioning strategies for the
J Arthur Bowers and Growing Success brands, as well as
consolidating on the success of the market leading Deadfast brand.
We have also initiated some innovative new products and feedback
from customers who have seen the preliminary plans has been very
encouraging.
The Company's speciality soils business, Freeland Horticulture,
was adversely affected by the winter floods but has since recovered
well with performance significantly ahead of the previous year.
Freeland continues to benefit from the improving construction and
landscaping sectors. Silvaperl's perlite and vermiculite operations
have been transferred successfully from Gainsborough to our new
factory at Ellesmere Port and efficiencies are being gained as
production levels increase.
Sales since the half year end, in the all important Easter
period, have not been as strong as expected, despite the favourable
weather. Although initially substantially ahead of last year, sales
in the retail sector remained weaker than expected. Combined with
the problems within our professional division and the pressure on
margins generally, full year results are expected to be
disappointing.
During the period we raised GBP8.24 million of convertible loan
notes to provide additional capital and also refinanced our banking
facilities. The costs of this refinancing exercise were
considerable and are shown as an exceptional item. In addition we
have continued to incur dual running costs for the new site at
Ellesmere Port. These exceptional costs will continue until the
full closure of the Boothby site which is planned to be completed
by the end of the financial year.
Outlook
Notwithstanding our short-term challenges, the progress outlined
above gives us confidence that by the end of this year significant
progress will have been made in the modernisation of the Company.
With a financial position supported by the agreement reached for
Bolton Fell, we will move forward with a number of market leading
brands and a highly efficient, state of the art manufacturing
facility that has the capability to produce for our customers the
best quality and most innovative products in the industry.
The Company will continue to make significant capital investment
for the foreseeable future as well as maintain its investment into
existing and new products. As a consequence the Board has decided
not to pay an interim dividend. The Board intends to return to its
progressive dividend policy once the restructuring of the Company
is complete and sales recovery is well underway.
Hugh Etheridge
Chairman
Group Income Statement Six months Six months Year
for the six months ended 31 March ended ended ended
2014 (unaudited) 31 March 31 March 30 Sept
2014 2013 2013
Notes GBP'000 GBP'000 GBP'000
Revenue 21,775 20,446 46,479
Operating expenses (23,587) (22,106) (46,661)
Group operating loss before exceptional
items (1,812) (1,660) (182)
Exceptional items 4 (1,259) - (777)
----------- ----------- ---------
Group operating loss after exceptional
items (3,071) (1,660) (959)
Finance income 3 3 3
Finance costs (382) (172) (161)
Other finance costs - pensions (240) (57) (65)
Loss before taxation (3,690) (1,886) (1,182)
Tax credit 1 621 406 164
Loss for the period (3,069) (1,480) (1,018)
=========== =========== =========
Loss for the period is attributable
to:
Equity holders of the parent company (3,069) (1,433) (977)
Minority interests - (47) (41)
----------- ----------- ---------
(3,069) (1,480) (1,018)
=========== =========== =========
All results relate to continuing
operations.
Earnings per share (pence)
Basic EPS on loss for the period 3 (17.9)p (8.4)p (5.7)p
Dividend per share 2 0.0p 1.9p 3.0p
Group Statement of Comprehensive Six months Six months Year
Income ended ended ended
for the six months ended 31 March 31 March 31 March 30 Sept
2014 (unaudited) 2014 2013 2013
GBP'000 GBP'000 GBP'000
Loss for the period (3,069) (1,480) (1,018)
----------- ----------- ---------
Other comprehensive income
Amounts which will not be reclassified
subsequently to the income statement
Actuarial (loss)/gain on defined
benefit pension scheme (675) (1,202) 1,465
Tax on items taken directly to
or transferred from equity 135 316 (347)
----------- ----------- ---------
Other comprehensive income, net
of tax (540) (886) 1,118
----------- ----------- ---------
Total comprehensive income for
the period (3,609) (2,366) 100
=========== =========== =========
Attributable to:
Equity holders of the parent company (3,609) (2,319) 141
Minority interests - (47) (41)
(3,609) (2,366) 100
=========== =========== =========
Group Equity Share Capital
Statement of share premium redemption Revaluat'n Other Retained Minority Total
Changes in capital account reserve reserve reserves earnings Total interests equity
Group
Shareholders'
Equity
(Unaudited)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2013 4,265 150 1,523 9,035 176 (955) 14,194 275 14,469
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Loss for the
six
months to 31
March
2014 - - - - - (3,069) (3,069) - (3,069)
Depreciation
transfer - - - (48) - 48 - - -
Actuarial
losses
on defined
benefit
pension
scheme - - - - - (675) (675) - (675)
Tax on items
taken
directly to
or
transferred
from equity - - - - - 135 135 - 135
Total
comprehensive
income - - - (48) - (3,561) (3,609) - (3,609)
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Equity shares
issued 54 - - - - (54) - - -
Share based
payments - - - - - 54 54 - 54
Equity - - - - - - - - -
dividends
paid
Transactions
with
owners 54 - - - - - 54 - 54
At 31 March
2014 4,319 150 1,523 8,987 176 (4,516) 10,639 275 10,914
At 1 October
2012 4,256 150 1,523 8,790 176 (170) 14,725 333 15,058
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Profit for the
six
months to 31
March
2013 - - - - - (1,433) (1,433) (47) (1,480)
Depreciation
transfer - - - (102) - 102 - - -
Actuarial
gains on
defined
benefit
pension
scheme - - - - - (1,202) (1,202) - (1,202)
Tax on items
taken
directly to
or
transferred
from equity - - - - - 316 316 - 316
Total
comprehensive
income - - - (102) - (2,217) (2,319) (47) (2,366)
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Equity shares
issued 9 - - - - - 9 - 9
Share based
payments - - - - - 60 60 - 60
Equity
dividends
paid - - - - - (444) (444) - (444)
Transactions
with
owners 9 - - - - (384) (375) - (375)
At 31 March
2013 4,265 150 1,523 8,688 176 (2,771) 12,031 286 12,317
At 1 October
2012 4,256 150 1,523 8,790 176 (170) 14,725 333 15,058
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
(Loss)/profit
for
the year to
30 September
2013 - - - - - (977) (977) (41) (1,018)
Depreciation
transfer - - - (97) - 97 - - -
Actuarial
losses
on defined
benefit
pension
scheme - - - - - 1,465 1,465 - 1,465
Tax on items
taken
directly to
or
transferred
from equity - - - 342 - (689) (347) - (347)
Total
comprehensive
income - - - 245 - (104) 141 (41) 100
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Equity shares
issued 9 - - - - (9) - - -
Share based
payments - - - - - 120 120 - 120
Deferred tax - - - - - (93) (93) - (93)
Equity
dividends
paid - - - - - (699) (699) (17) (716)
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Transactions
with
owners 9 - - - - (681) (672) (17) (689)
At 30
September
2013 4,265 150 1,523 9,035 176 (955) 14,194 275 14,469
Group Statement of Financial
Position As at As at As at
as at 31 March 2014 (unaudited) 31 March 31 March 30 Sept
2014 2013 2013
Notes GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 23,237 20,471 21,234
Intangible assets 1,734 1,848 1,784
Deferred tax assets 351 787 162
25,322 23,106 23,180
---------- ---------- ---------
Current assets
Inventories 13,620 13,414 11,580
Trade and other receivables 23,892 19,982 10,953
Corporation tax recoverable 492 599 -
Cash and cash equivalents 867 285 784
----------
38,871 34,280 23,317
---------- ---------
Assets held for sale 7,514 7,514 7,514
---------- ---------- ---------
Total assets 71,707 64,900 54,011
========== ========== =========
Current liabilities
Trade and other payables 14,209 12,804 9,109
Financial liabilities - borrowings 15,458 16,064 10,373
Corporation tax payable - - 75
---------- ---------- ---------
29,667 28,868 19,557
Receipt from Natural England 9,000 9,000 9,000
---------- ---------- ---------
38,667 37,868 28,557
---------- ---------- ---------
Non-current liabilities
Financial liabilities - borrowings 10,189 - -
Provisions 149 137 145
Defined benefit pension plan
deficit 11,788 14,578 10,840
22,126 14,715 10,985
Total liabilities 60,793 52,583 39,542
========== ========== =========
Net assets 10,914 12,317 14,469
========== ========== =========
Capital and reserves
Equity share capital 4,319 4,265 4,265
Share premium account 150 150 150
Capital redemption reserve 1,523 1,523 1,523
Revaluation reserve 8,987 8,688 9,035
Other reserves 176 176 176
Retained earnings (4,516) (2,771) (955)
---------- ---------- ---------
Group shareholders' equity 10,639 12,031 14,194
Minority interests 275 286 275
---------- ---------- ---------
Total equity 10,914 12,317 14,469
========== ========== =========
Group Cash Flow Statement
for the six months ended 31 March 2014 (unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2014 2013 2013
GBP'000 GBP'000 GBP'000
Net cash flow from operating activities (12,219) (7,380) 706
Net cash flow from investing activities (2,895) (1,643) (3,274)
Net cash flow from financing activities 5,428 (769) (1,034)
Decrease in cash in the period (9,686) (9,792) (3,602)
========== ========== =========
Opening cash and cash equivalents (4,589) (987) (987)
Decrease in cash and cash equivalents (9,686) (9,792) (3,602)
---------- ---------- ---------
Closing cash and cash equivalents (14,275) (10,779) (4,589)
========== ========== =========
Notes to the consolidated Cash Flow Statement
Cash flow from operating activities
Group operating (loss) / profit (3,071) (1,660) (959)
Amortisation of intangible assets 50 50 171
Depreciation of property, plant and equipment 895 906 1,793
Profit on disposal of property, plant
and equipment - (34) (110)
Share based payments 54 60 120
Difference between pension contributions
paid and amounts recognised in the income
statement (21) 115 (964)
(Increase) / decrease in inventories (2,040) (2,809) (975)
Increase in trade and other receivables (12,939) (9,843) (814)
Increase / (decrease) in trade and other
payables 4,849 5,766 2,071
Increase in provisions 4 5 8
---------- ---------- ---------
Cash generated from operations (12,219) (7,444) 341
Income taxes received / (paid) - 64 365
---------- ---------- ---------
(12,219) (7,380) 706
========== ========== =========
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2014 2013 2013
GBP'000 GBP'000 GBP'000
Cash flow from investing activities
Interest received 3 3 3
Sale of property, plant and equipment 95 135 236
Purchase of property, plant and equipment (2,993) (1,781) (3,456)
Payments to acquire intangible fixed
assets - - (57)
(2,895) (1,643) (3,274)
========== ========== =========
Cash flow from financing activities
Interest paid (131) (172) (156)
Dividends paid to minority interests - - (699)
Dividends paid to equity shareholders - (444) (17)
New borrowings 10,565 - -
Repayment of borrowings (5,060) (162) (162)
Issue of new shares 54 9 -
5,428 (769) (1,034)
========== ========== =========
Reconciliation of net cash flow to movement in net debt
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2014 2013 2013
GBP'000 GBP'000 GBP'000
Decrease in cash and short term deposits (9,686) (9,792) (3,602)
Cash flow from change in borrowings (5,505) 162 162
---------- ---------- --------
Movement in net debt in the period (15,191) (9,630) (3,440)
Net cash at 1 October (9,589) (6,149) (6,149)
Net (debt)/cash at period end (24,780) (15,779) (9,589)
========== ========== ========
Notes to the financial information
1. Taxation
The taxation charge on ordinary activities is calculated by
applying the Directors' best estimate of the full year effective
tax rate to the profit before taxation.
2. Dividend
A final dividend of 1.5p per share (2013: 2.6p) was paid on 17
April 2014 to shareholders on the register on 7 March 2014. An
interim dividend of nil per share (2013: 1.5p) will be paid this
year.
3. Earnings per share
Basic earnings per share have been calculated by reference to a
weighted average of 17,112,890 (2013: 17,038,629) shares in issue
during the period.
4. Exceptional Items
During the period the Group undertook a refinancing exercise to
raise a total of GBP8.24 million of convertible loan notes. In
addition the Group moved its banking relationship from Lloyds Bank
Group to Royal Bank of Scotland. This refinancing exercise cost a
total of GBP987,000 in the period.
In addition the specific extra cost of running two sites, at
Boothby and at Ellesmere Port, during the period are estimated at
GBP272,000.
The above two items are show as exceptional costs in the period.
No exceptional costs are shown for the six month period to 31 March
2013 as activity at the new site was limited at that time.
For the year to 30 September 2013 exceptional items comprised
GBP178,000 in respect of the closure of operations at Knottingley
and Gainsborough, GBP230,000 in respect of refinancing costs and
GBP369,000 in respect of dual running costs.
5. Basis of preparation
The financial information set out in the interim report has been
prepared in accordance with accounting policies under International
Financial Reporting Standards as adopted by the European Union
('IFRS') as detailed in the financial statements for the year ended
30 September 2013. These policies are expected to be followed in
the financial statements for the year ending 30 September 2014.
The interim report has been approved by the Board of Directors
and is neither audited nor reviewed. The interim financial
information does not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006.
The financial information for the year ended 30 September 2013
is extracted from the audited accounts for that period. Those
accounts have been delivered to the Registrar of Companies. The
auditors' report on them was unqualified and did not contain a
statement under either section 498(2) or section 498(3) of the
Companies Act 2006.
The Group does not consider that any standards or
interpretations issued by the International Accounting Standards
Board (IASB), but not yet applicable, will have a significant
impact on the financial statements for the year ending 30 September
2014.
A copy of this interim report will be posted to shareholders
shortly and will be available to view on the Company's website at
www.william-sinclair.co.uk.
6. Bolton Fell
William Sinclair is in the process of disposing of its peat bog
interests at Bolton Fell to Natural England following the terms of
an agreement signed in March 2010. The final compensation sum was
due to be determined by the Lands Tribunal in July 2014 but on 27
June 2014 the Company signed a settlement agreement instead. This
agreement provides for a payment to the Company of GBP12.25 million
by 1 August 2014. The Company's land interests at Bolton Fell will
now all be transferred as originally agreed.
William Sinclair ceased harvesting on the whole of Bolton Fell
Moss in November 2013 and has completed its permitted off take of
peat from the site. The factory site itself has also now ceased
production. The task of regenerating the peat bog is the
responsibility of Natural England.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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