TIDMSNCL
RNS Number : 5699C
Sinclair (William) Holdings PLC
20 January 2015
WILLIAM SINCLAIR HOLDINGS PLC
("William Sinclair", the "Company" or the "Group")
Audited Preliminary Results for the 12 months ended 30 September
2014
William Sinclair Holdings PLC is the most technically advanced
manufacturer of growing media in the UK horticulture market.
Customers include The Garden Centre Group, B&Q, Tesco,
Wilkinson and Morrisons as well as a large number of independent
garden centres and garden centre groups.
Operational Highlights
-- Commencement of operations at new 50 acre site at Ellesmere Port
-- Installation of state of the art screening, mixing and bagging facility
-- Improved product quality
-- Healthy stocks of harvested peat to meet customer demand
-- Significant upgrade to quality and volumes of SuperFyba
reducing dependence on future peat harvest
-- Restructured sales capability, significant investment in key brands and new products
-- Cessation of operations at Bolton Fell, Gainsborough and Knottingley
-- Settlement with Natural England
Financial Highlights
-- Revenue GBP46.2 million (2013: GBP46.5 million)
-- Profit before tax GBP1.95 million (2013: loss before tax GBP1.67 million)
-- Underlying EBITDA loss GBP0.85 million (2013: profit GBP1.78 million)
-- GBP12.25 million final payment from Natural England (total compensation: GBP21.25 million)
-- GBP8.24 million raised to maintain development of Ellesmere Port
-- Net debt to bank GBP3.4 million (2013: GBP9.6 million)
-- Loan notes balance GBP8.7 million (2013: nil)
Peter Rush, Chief Executive, William Sinclair Holdings PLC,
said:
"The substantial part of the GBP25 million investment at
Ellesmere Port is complete and we now consider William Sinclair to
be the most technically advanced manufacturer in the UK in terms of
production capacity, consistency and efficiency. Ellesmere Port
will drive our strategy of seeking to increase our share of the
growing media market and capitalising on some of our leading
brands.
"Solid foundations have now been built. Further investment and
activity will be required to complete the modernisation strategy.
However, the re-launch and promotion of our key brands have
resulted in positive reactions from our customers against a
backdrop of competitive market conditions. Together with the
restructured sales force the Company intends to rebuild sales lost
during the disruption caused by Ellesmere Port's development.
"William Sinclair has changed significantly during the year and
we can begin to look forward to benefiting from the strengths and
opportunities the Company has created."
For further information:
William Sinclair Holdings PLC Tel: 01522 537 561
Peter Rush, Chief Executive
Peter Williams, Finance Director
WH Ireland
Andrew Kitchingman Tel: 0113 394 6600
Paul Shackleton
Liam Gribben
CHAIRMAN'S STATEMENT
During the year William Sinclair continued its strategy of
creating the most advanced manufacturing site in the UK
horticulture industry at Ellesmere Port.
The results to 30th September 2014 were disappointing, with an
underlying EBITDA loss of GBP0.85 million on turnover of GBP46.2
million, a slight reduction on the previous year. At the same time
there was a considerable level of exceptional costs (which are
outlined in the Strategic Report), offset by the proceeds from the
claim against Natural England regarding our peat bog assets at
Bolton Fell. Underlying EBITDA is defined as operating profit
before exceptional items, interest, depreciation and
amortisation.
As a result of the very significant level of capital expenditure
in the year and the lack of a settlement with Natural England at
the time, the Company raised just over GBP8 million in convertible
loan notes in December 2013.
The market has been competitive, we have suffered from some
historic quality issues and we have been distracted by the
negotiations with Natural England and the time and energy absorbed
in relocating various elements of production. Overall, although
gaining business from The Garden Centre Group we lost business
elsewhere.
The major achievements at Ellesmere Port during the year were
the transfer of the Silvaperl operations from Gainsborough, the
very significant upgrade to the SuperFyba operations and the
installation of the new screening, mixing and bagging facility
following the closure of the Bolton Fell operations.
Each one represented a considerable challenge and they have all
been achieved but each caused an element of disruption to
production and to the smooth running of the business. Some of these
issues were caused by installation and commissioning of plant and
some were caused by the fact that Ellesmere Port is effectively a
start up site with a new team needing to become familiar with
operating practices and procedures. We are beginning to see some of
the benefits of concentrating more operations onto one site and
this will increase once more volume is going through the site and
once stable operations allow for continuous improvement.
Following the installation of the growing media line at
Ellesmere Port with its enhanced screening and mixing capability,
and subsequent improvements to protect peat stocks from the
weather, we believe our product quality is better than ever. We
will look to improve our customer service levels by working more
closely with our haulage partners. Combined with our high product
quality this should enable us, over time, to recover much of the
professional business lost in recent years and make increased
inroads into the retail sector.
During the very significant upgrade to the SuperFyba operations,
which was delayed five months by the process of having to refinance
our banking facility, production was severely restricted. In
addition our opportunity to use SuperFyba reduced during the late
spring and summer months due to the impact of the closure of
Boothby, the development of Ellesmere Port and our new product
packaging. However we now have the capability to produce SuperFyba
of high quality at significant volumes. We hope that the
availability of a peat replacement made from recycled and
reformulated green waste will provide momentum to helping achieve
the UK government's voluntary 2020 peat reduction targets.
An additional benefit of the growth in SuperFyba will be
considerably reduced exposure to poor peat harvests. Partly because
of the increased usage of SuperFyba in our growing media for the
coming selling season, we have surplus peat stocks which already
provide comfort for the following selling season. In any event our
peat bogs are in the best condition they have been in for years and
initiatives have been taken to improve harvesting potential.
As we progress up the learning curve at Ellesmere Port, from a
customer service, manufacturing and logistics viewpoint, there will
inevitably be challenges. We will endeavour to achieve the best
customer service possible as we work through these challenges. We
remain confident that Ellesmere Port is on track to become a world
class facility and will be able to provide first class customer
service in the coming years.
At the same time as the very significant changes to our
manufacturing operations we have streamlined our sales and
marketing operations to provide more support to our key brands, J
Arthur Bower, Growing Success and Deadfast.
Performance at Freeland Horticulture has been strong. All of the
business lost following the completion of the Olympic site
contracts has been replaced and the specialist soils business is
expanding across the country. Freeland Horticulture also gained
important composting contracts at their Wroot facility and are now
an important supplier of raw material for SuperFyba.
As with most businesses we have a range of financial covenants
with which we are obliged to comply. Our forecasts show us meeting
these tests with sufficient headroom. However in the event that the
ongoing transformation of the business and the bedding in of
operations at Ellesmere Port should threaten that position then the
Group will take various cost cutting measures to reduce its
overheads and will accelerate the disposal of certain surplus
properties. Our bank is aware of these options and has expressed
its support.
I would like to thank all the staff within the William Sinclair
Group for their very hard work over the last 12 months. I would
particularly like to thank the staff at all the sites which closed
in the year, in many cases working up to and through the closure
and helping with the commissioning of the new equipment at
Ellesmere Port. Your dedication was greatly appreciated.
I would also like to thank my predecessor Hugh Etheridge who was
Chairman of the Company through a difficult period up to receipt of
the Natural England monies.
The Company has changed fundamentally over the last 12 months,
and now has a modern production facility, a top performing
alternative to peat, a strong brand portfolio and what we believe
is the best quality product on the market. These strengths will be
pivotal in our efforts to regain market share and begin to rebuild
sales.
Rupert King
Chairman
CHIEF EXECUTIVE'S STATEMENT
Introduction
2014 was a very challenging year for William Sinclair. However
the Company's modernisation programme has continued and good
progress was made with the development of Ellesmere Port.
While more work remains, the substantial part of the main
investment at our GBP25 million growing media supersite at
Ellesmere Port is complete.
As a result we moved closer towards our objective of
transforming William Sinclair into an efficiently structured,
consumer-led organisation based on leading technology, innovative
brands and new product development.
As part of this process, we restructured our sales organisation
into a single team and reallocated the subsequent cost savings into
funding substantial new brand development and marketing
activities.
We also completed the development of SuperFyba 2.0 and commenced
its manufacture. With a secure supply of renewable materials, we
now have the opportunity to leverage SuperFyba's full
potential.
Once complete William Sinclair will have an unrivalled capacity
for the mass-volume manufacture of the products our professional
and retail markets demand to consistently high quality
standards.
Financial Highlights
Sales for the year were down slightly at GBP46.2 million (2013:
GBP46.5 million) following the loss of customers by the
professional division. In addition some sales were lost during the
closure of our Boothby site. An improved contribution from Freeland
Horticulture resulted in group revenues remaining relatively
flat.
Our pre-tax losses before exceptional items of GBP3.72 million
reflected the tough trading conditions and pressure on pricing.
Margins also came under pressure as costs increased, due in part to
higher than normal overheads and the transportation of stock to the
various manufacturing sites.
While we started to realise efficiency gains from the relocation
of some of our operations to Ellesmere Port, the Group's underlying
EBITDA loss for the year was GBP0.85 million.
We had a number of exceptional items in the year the net impact
of which was a gain of GBP5.7 million. In June we reached a
resolution of the long-term claim against Natural England regarding
our peat bog interests at our Bolton Fell site. An overall sum of
GBP21.25 million was agreed and the balance of GBP12.25 million was
received in July 2014 following the receipt of an initial GBP9
million in April 2010. The settlement has been accounted for in
full in the year giving rise to a gain of GBP9.5 million.
To maintain our investment in new equipment at Ellesmere Port we
needed to raise additional capital. We successfully raised GBP8.24
million through the issue of secured redeemable convertible loan
notes, mainly to existing shareholders in the Company. At the same
time we also refinanced our GBP25 million banking requirements to
an asset based facility provider. This type of finance is well
suited to support the seasonal nature of our operations. This
process incurred exceptional costs of GBP1.4 million.
Other exceptionals of GBP1.3 million were incurred by the dual
running costs of our Boothby site, prior to its closure.
Finally, our SuperFyba peat free product went through a major
phase of improvement work. However this process temporarily
interrupted SuperFyba's production leading to an under recovery of
costs and a further exceptional item of GBP0.9 million.
Net debt due to our bank reduced by GBP6.2 million to GBP3.4
million. In addition the Company has loan note debt of GBP8.7
million at the year end including rolled up interest.
Reflecting the capital investment still required to complete the
development of Ellesmere Port and the poor trading result, the
Board has decided not to pay a dividend.
Operational Highlights
Production at our new 50-acre commercial, technical, operational
and logistical centre of excellence at Ellesmere Port began in
September 2014 signalling a new era for the UK's wider
horticultural industry. Following the installation of new growing
media plant (screening, mixing and bagging equipment) we are now
the most technically advanced manufacturer in the UK in terms of
production capacity and consistency.
The new site has the potential to increase capacity over the
next two years, and is already home to the manufacture of our
Silvaperl, Growing Media and SuperFyba product groups.
The move of Silvaperl production from our Gainsborough
manufacturing site is providing the efficiency gains that we expect
to make across all product groups and as volumes increase further
economies of scale will be generated.
Ellesmere Port is also now home to all production of our
SuperFyba 2.0 peat alternative, which we launched in September
2014. SuperFyba 2.0 gives us a major opportunity to produce growing
media products containing significantly reduced levels of peat of
comparable quality and costed at the same level as peat.
Critically, we now have a fully secure and sustainable supply of
materials, aided by our own green compost site at Wroot near
Doncaster.
This improved version of our original product is already a key
ingredient in many of our retail compost products and is currently
being blended with peat to produce a new high performance
multipurpose growing media for 2015.
In independent trials this outperformed a 100% peat product and
equivalent multipurpose products from leading competitors.
While the development of SuperFyba 2.0 is highly significant, we
also made major investments in draining and improving our Scottish
mosses.
This work has improved the harvesting potential of high-quality
professional and retail peat and following a satisfactory peat
harvest, we have sufficient high quality peat stocks for the 2015
season, and some additional product remaining for 2016.
Recent expenditure in both of these areas is now complete and
the combination of our improved Scottish resources and SuperFyba
2.0 production capabilities means we now have healthy levels of
peat and peat alternative resources.
Freeland Horticulture - Specialist Soils Division
Freeland Horticulture ("Freeland") recovered well, replacing the
Olympic Park contracts with new sales off the back of the continued
improvement of the construction sector. With its depth of
specialist soil knowledge Freeland will continue targeting the
landscaping sector nationwide.
Freeland also has a growing focus on developing its composting
business. Its composting site at Wroot has become one of the
largest in the country with composting volumes growing over 50%
during 2014.
During the processing of green waste on behalf of nearby
councils, the Wroot operation has the extra benefit of creating
green compost which is high in plant nutrients. This is used by
Freeland in the make up of its own specialist soils.
Wroot also creates oversize (composted wood) thereby
guaranteeing the supply of quality raw material for the manufacture
of SuperFyba 2.0.
With a proven ability to run composting operations efficiently
Freeland is looking to grow this side of its business, both
organically or by potential acquisitions.
Sales Growth
During the year we appointed several new members of our senior
management team, each with a proven record of success and expertise
in our sector.
By bringing together responsibility for our Professional and
Retail divisions under a single director and team, we aim to
promote collaboration across both of our key product groups.
The programme of investment in brand development, now complete,
has consolidated and repositioned our brands into six key category
groups, including J Arthur Bower, Growing Success and Deadfast.
While this streamlining has caused some disruption to our sales
effort in the market we believe that our offer is now more
compelling to the major retail groups.
Our brand and marketing decisions will increasingly be based on
having greater in-depth understanding of our customers and is now
central to the new more consumer-focused culture we are
creating.
William Sinclair Staff
As part of the agreement with Natural England, William Sinclair
has now ceased the majority of its operations at Boothby. I would
like to thank all of our Boothby staff there for their significant
efforts and co-operation, both during the period of negotiation
with Natural England and during the site's closure.
I would also like to thank the staff located at Gainsborough and
Knottingley for their hard work, loyalty and co-operation during
the closures of these manufacturing sites, and to the staff at
Wroot during the relocation of its SuperFyba operation to Ellesmere
Port.
Outlook
We anticipate that the growing media market will remain highly
competitive and that pressure on pricing will continue. However,
the capacity and efficiencies generated by Ellesmere Port will
drive our strategy of seeking to increase our share of the growing
media market and capitalising on some of our leading brands.
Our growing media ambition is to be the most technically
advanced and efficient manufacturer of consumer-focused products.
In our specialist soils division, Freeland Horticulture will
continue to increase its geographical reach across the UK following
the resurgence of the construction sector. Our Scottish mosses will
be well maintained and receive continual investment to protect
these important assets.
Our new and refreshed brands based on close consumer
understanding have already received favourable feedback and will be
promoted aggressively during 2015.
We are focused on building stronger relationships with our key
customer groups via all available retail and wholesale channels,
and promote our capability to produce consistently high quality
products on a large scale basis to potential customers.
Following substantial investment, we now have the industry's
most advanced production capabilities with a fully scalable
peat-alternative and a line-up of re-invigorated leading brands and
have a continually developing product pipeline.
There is still much further work to do and the new plant is
still settling down. However while 2015 will remain a period of
further consolidation and additional investment we can begin to
look forward to benefiting from the Company's strengths and market
opportunities we are creating.
Peter Rush
Chief Executive
WILLIAM SINCLAIR HOLDINGS PLC
Group Income Statement
for the year ended 30 September 2014
2013 (Restated
- Note
2014 11)
Note GBP000 GBP000
Revenue 46,206 46,479
Operating expenses (52,805) (47,438)
Other operating income 6 9,447 -
-------- --------------
Group operating profit before
exceptional items (2,825) (182)
Exceptional expenses 6 (3,774) (777)
Exceptional gains 6 9,447 -
-------- --------------
Group operating profit / (loss) 2,848 (959)
Finance income 5 3
Finance costs (416) (161)
Other finance costs (485) (549)
-------- --------------
Profit / (loss) before taxation 1,952 (1,666)
Tax credit 2,265 164
-------- --------------
Profit / (loss) / for the year 4,217 (1,502)
======== ==============
All results relate to continuing operations.
Profit / (loss) for the year is
attributable to:
Owners of the parent company 4,135 (1,461)
Minority interests 82 (41)
----- -------
4,217 (1,502)
===== =======
Profit / (loss) per share (pence)
Basic EPS for the year 424.0p (8.6)p
Diluted EPS for the year 418.3p (8.6)p
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of comprehensive income
for the year ended 30 September 2014
2014 2013
(restated)
GBP000 GBP000
Profit / (loss) for the
year 4,217 (1,502)
------- ----------
Other comprehensive (expense)
/ income:
-amounts which will not
be reclassified subsequently
to the income statement
Remeasurement on defined
benefit pension plans (2,371) 1,949
Tax on items taken directly
to or transferred from
equity 510 (347)
------- ----------
Other comprehensive (expense)
/ income for the year,
net of tax (1,861) 1,602
------- ----------
Total comprehensive income
for the year 2,356 100
======= ==========
Attributable to:
Owners of the parent company 2,274 141
Minority interests 82 (41)
------- ----------
Total comprehensive income
for the year 2,356 100
======= ==========
WILLIAM SINCLAIR HOLDINGS PLC
Group and Company statement of financial position
at 30 September 2014
Group Company
2014 2013 2014 2013
GBP000 GBP000 GBP000 GBP000
Non-current assets
Property, plant and
equipment 28,156 21,234 97 115
Intangible assets 1,713 1,784 - -
Investments in subsidiaries - - 10,859 8,795
Deferred tax assets 2,937 162 24 322
------ ------ ------ -------
32,806 23,180 10,980 9,232
------ ------ ------ -------
Current assets
Inventories 9,609 11,580 - -
Trade and other receivables 8,694 10,953 6,330 13,958
Cash and cash equivalents 1,361 784 38 182
------ ------ ------ -------
19,664 23,317 6,368 14,140
------ ------ ------ -------
Assets held for sale 1,845 7,514 - -
------ ------ ------ -------
Total assets 54,315 54,011 17,348 23,372
------ ------ ------ -------
Current liabilities
Trade and other payables 9,173 9,109 418 277
Financial liabilities
- borrowings 4,774 10,373 15 16,268
Corporation tax payable 75 75 - -
------ ------ ------ -------
14,022 19,557 433 16,545
------ ------ ------ -------
Receipt from Natural
England - 9,000 - -
------ ------ ------ -------
14,022 28,557 433 16,545
------ ------ ------ -------
Non-current liabilities
Financial liabilities
- borrowings 8,718 - 8,718 -
Provisions 1,110 145 - -
Defined benefit pension
plan deficit 13,791 10,840 - -
------ ------ ------ -------
23,619 10,985 8,718 -
------ ------ ------ -------
Total liabilities 37,641 39,542 9,151 16,545
------ ------ ------ -------
Net assets 16,674 14,469 8,197 6,827
====== ====== ====== =======
WILLIAM SINCLAIR HOLDINGS PLC
Group and Company statement of financial position
at 30 September 2014 (continued)
Group Company
2014 2013 2014 2013
Note GBP000 GBP000 GBP000 GBP000
Capital and reserves
Share capital 8 4,344 4,265 4,344 4,265
Share premium account 150 150 150 150
Capital redemption
reserve 1,523 1,523 1,523 1,523
Revaluation reserve 4,050 9,035 20 20
Other reserves 176 176 86 86
Retained earnings 6,074 (955) 2,074 783
------ ------ ------ -------
Equity attributable
to owners of the parent 16,317 14,194 8,197 6,827
Minority interests 357 275 - -
------ ------ ------ -------
Total equity 16,674 14,469 8,197 6,827
====== ====== ====== =======
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of changes in equity
for the year ended 30 September 2014
Share Capital
Share premium redemption Revaluation Other Retained Minority Total
capital account reserve reserve reserves earnings Total interest equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2013 4,265 150 1,523 9,035 176 (955) 14,194 275 14,469
-------- -------- ----------- ----------- --------- --------- ------- --------- -------
Profit / (loss) for
the year - - - - - 4,135 4,135 82 4,217
-------- -------- ----------- ----------- --------- --------- ------- --------- -------
Other comprehensive
income:
Actuarial gains on
defined benefit
pension
plans - - - - - (2,371) (2,371) - (2,371)
Tax on items taken
directly to or
transferred
from equity - - - - - 510 510 - 510
Depreciation transfer - - - (45) - 45 - - -
Release to retained
earnings - - - (4,940) - 4,940 - - -
-------- -------- ----------- ----------- --------- --------- ------- --------- -------
Total other
comprehensive
income - - - (4,985) - 3,124 (1,861) - (1,861)
-------- -------- ----------- ----------- --------- --------- ------- --------- -------
Total comprehensive
income / (expense) - - - (4,985) - 7,259 2,274 82 2,356
-------- -------- ----------- ----------- --------- --------- ------- --------- -------
Transactions with
owners:
Equity shares issued 79 - - - - (79) - - -
Share based payments - - - - - 108 108 - 108
Equity dividends paid - - - - - (259) (259) - (259)
-------- -------- ----------- ----------- --------- --------- ------- --------- -------
Transactions with
owners 79 - - - - (230) (151) - (151)
-------- -------- ----------- ----------- --------- --------- ------- --------- -------
At 30 September 2014 4,344 150 1,523 4,050 176 6,074 16,317 357 16,674
======== ======== =========== =========== ========= ========= ======= ========= =======
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of changes in equity
for the year ended 30 September 2013
Share Capital
Share premium redemption Revaluation Other Retained Minority Total
capital account reserve reserve reserves earnings Total interest equity
(restated) (restated) (restated)
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October
2012 4,256 150 1,523 8,790 176 (170) 14,725 333 15,058
-------- -------- ----------- ----------- --------- ---------- ---------- --------- ----------
Loss for the
year - - - - - (1,461) (1,461) (41) (1,502)
-------- -------- ----------- ----------- --------- ---------- ---------- --------- ----------
Other
comprehensive
income:
Actuarial
gains on
defined
benefit
pension
plans - - - - - 1,949 1,949 - 1,949
Tax on items
taken
directly to
or
transferred
from equity - - - 342 - (689) (347) - (347)
Depreciation
transfer - - - (97) - 97 - - -
-------- -------- ----------- ----------- --------- ---------- ---------- --------- ----------
Total other
comprehensive
income - - - 245 - 1,357 1,602 - 1,602
-------- -------- ----------- ----------- --------- ---------- ---------- --------- ----------
Total
comprehensive
income /
(expense) - - - 245 - (104) 141 (41) 100
-------- -------- ----------- ----------- --------- ---------- ---------- --------- ----------
Transactions
with
owners:
Equity shares
issued 9 - - - - (9) - - -
Share based
payments - - - - - 120 120 - 120
Deferred tax
on share
based
payments - - - - - (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
======== ======== =========== =========== ========= ========== ========== ========= ==========
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of cash flows
for the year ended 30 September 2014
2014 2013
Note GBP000 GBP000
Operating activities
Group operating profit
/ (loss) 2,848 (959)
Adjustments to reconcile
group operating loss to
net cash
inflows from operating
activities
Depreciation of property,
plant and equipment 1,808 1,793
Amortisation of intangible
assets 169 171
Impairment of assets 3,071 -
Loss / (profit) on disposal
of property, plant and
equipment 12 (110)
Share-based payments 108 120
Difference between pension
contributions paid and
amounts recognised in the
income statement 95 (964)
Decrease / (increase) in
inventories 1,971 (975)
Decrease / (increase) in
trade and other receivables 2,259 (814)
(Decrease) / increase in
trade and other payables (87) 2,071
Increase in provisions 958 8
Release of Natural England
balance (9,000) -
------- -------
Cash generated from operations 4,212 341
Income taxes received /
(paid) - 365
------- -------
Net cash flow from operating
activities 4,212 706
------- -------
Investing activities
Interest received 5 3
Sale of property, plant
and equipment 2,899 236
Purchases of property,
plant and equipment (8,384) (3,456)
Payments to acquire intangible
fixed assets (98) (57)
------- -------
Net cash flow from investing
activities (5,578) (3,274)
------- -------
Financing activities
Interest paid (363) (156)
Dividends paid to owners
of the parent 7 (259) (699)
Dividends paid to minority
interests - (17)
New borrowings 8,164 -
Repayment of borrowings (5,000) (162)
------- -------
Net cash flow from financing
activities 2,542 (1,034)
------- -------
Increase/(Decrease) in
cash and cash equivalents 1,176 (3,602)
Cash and cash equivalents
at the beginning of the
year (4,589) (987)
------- -------
Cash and cash equivalents
at the year end (3,413) (4,589)
======= =======
WILLIAM SINCLAIR HOLDINGS PLC
Notes
1 Statutory accounts
The consolidated financial statements of William Sinclair
Holdings PLC are prepared on a going concern basis and in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union, International Financial Reporting
Interpretations Committee (IFRIC) interpretations and Standing
Interpretations Committee (SIC) interpretations as adopted by the
European Union and with those parts of the Companies Act 2006
applicable to those companies reporting under IFRSs. The
consolidated financial statements are prepared in accordance with
the historical cost convention, as modified by the revaluation of
freehold and leasehold properties.
The Group financial statements are presented in sterling and all
values are rounded to the nearest thousand pounds (GBP000) except
when otherwise indicated.
These results for the year to 30 September 2014 together with
the corresponding amounts for the year to 30 September 2013 are
extracts from the 2014 annual report and do not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006.
The statutory accounts for the year ended 30 September 2014,
which have been audited by PricewaterhouseCoopers LLP, incorporate
an unqualified audit report and do not contain a statement under
either section 498(2) or 498(3) of the Companies Act 2006.
This preliminary announcement of the results for the year ended
30 September 2014 was approved by the Board of directors on 15
January 2014.
The accounting policies used for the 2014 figures are unchanged
on those used for the 2013 comparatives except in respect of IAS 19
Employee Benefits. The impact of applying the new standard to the
comparative figures for the year ended 30 September 2013 is an
increase in other finance costs in the Group Income Statement and
in actuarial gains in the Group Statement of Comprehensive Income
of GBP484,000.
The statutory accounts for the period ended 30 September 2013
have been delivered to the Registrar of Companies and the statutory
accounts for the year ended 30 September 2014 will be delivered to
the Registrar of Companies following the Annual General Meeting of
William Sinclair Holdings PLC.
2 Analysis of net cash/(debt)
1 Oct Cash 30 Sept
2013 flow 2014
GBP000 GBP000 GBP000
Cash at bank and in hand 784 577 1,361
Overdrafts (5,373) 599 (4,774)
Bank loans (5,000) 5,000 -
Loan notes - (8,718) (8,718)
------- ------- --------
(9,589) (2,542) (12,131)
======= ======= ========
3 Assets held for sale
Included in assets held for sale at 30 September 2014 and 2013
is the Group's freehold property at Oswaldtwistle at a carrying
value of GBP1,645,000. The site is being actively marketed.
Following the successful conclusion of negotiations with Natural
England in July 2014 the Group's peat bog properties at Bolton Fell
in Cumbria have been disposed of to Natural England. These
properties were included in assets held for sale at a carrying
value of GBP2,598,000. The Group retains certain property interests
in the factory site at Boothby, Cumbria. The carrying value of
these interests has been impaired by the cessation of peat
harvesting activities on the neighboring peat bog. As a consequence
an impairment charge of GBP3,071,000 has been recorded, leaving a
carrying value for these assets of GBP200,000. The factory site
properties are being actively marketed.
4 Earnings per share
Basic earnings per share amounts are calculated by dividing the
earnings for the year attributable to owners of the parent by the
weighted average number of ordinary shares outstanding during the
year.
Diluted earnings per share amounts are calculated by dividing
the earnings for the year attributable to owners of the parent by
the weighted average number of ordinary shares outstanding during
the year adjusted for the dilutive effect of share options,
warrants and the convertible loan notes outstanding at the year
end.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
2014 2013
(restated)
GBP000 GBP000
Profit / (loss) attributable to owners
of the parent 4,135 (1,461)
Exceptional items after tax - attributable
to owners of the parent (7,230) 594
------- ----------
Loss from continuing operations before
exceptional items attributable to
owners of the parent (3,095) (867)
======= ==========
2014 2013
Number Number
Basic weighted average number of
shares ('000s) 17,211 17,049
Dilutive potential ordinary shares:
Employee share options, conversion
of loan notes and warrants ('000s) 5,818 386
------ ------
Diluted weighted average number of
shares ('000s) 23,029 17,435
====== ======
There have been no transactions involving ordinary shares or
potential ordinary shares between the reporting date and the date
of completion of these financial statements.
Basic and diluted earnings per share are 24.0p and 18.3p (2013
loss per share: 8.6p).
Basic loss per share before exceptional items is 18.0p (2013:
loss 5.1p).
5 Segment information
Within the horticulture sector the Board reviews the results of
Freeland, its specialist topsoils and SuperFyba business, and
certain ancillary businesses separately from those of its core
horticulture business. The revenues and operating profits of these
segments are shown below together with a reconciliation to the
Group results.
External Internal
sales sales Total sales
2014 2013 2014 2013 2014 2013
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Horticulture 34,961 36,210 121 39 35,082 36,249
Freeland 7,920 6,501 282 530 8,202 7,031
Other 3,325 3,768 - - 3,325 3,768
Total 46,206 46,479 403 569 46,609 47,048
Less intra group
sales elimination - - (403) (569) (403) (569)
------ ------ ------ ------ ------ ------
Total revenue 46,206 46,479 - - 46,206 46,479
====== ====== ====== ====== ====== ======
Segment revenue includes transactions between business segments.
These transactions are eliminated on consolidation. Sales between
segments are carried out at arm's length. The revenue from external
parties reported to the executive directors is measured in a manner
consistent with that in the income statement.
During the year the Group had one customer that accounted for
more than 10% of group revenues. Revenue from this customer was
GBP5.4 million and was all within the Horticulture segment.
2014 2013
(restated)
GBP000 GBP000
Operating (loss) / profit before
exceptional items
Horticulture (2,357) 1,265
Freeland 827 (638)
Other 27 387
------- ----------
Total segment operating (loss) /
profit before exceptional items (1,503) 1,014
Central costs (1,322) (1,196)
------- ----------
Total group operating loss before
exceptional items (2,825) (182)
Exceptional items 5,673 (777)
------- ----------
Total group operating profit / (loss)
after exceptional items 2,848 (959)
Finance income 5 3
Finance costs (416) (161)
Other finance costs (485) (549)
------- ----------
Total group profit / (loss) before
tax 1,952 (1,666)
======= ==========
5 Segment information (continued)
Central costs include the administration costs of the holding
company such as directors' remuneration, professional fees and
stock exchange costs.
Operating loss as reported above includes impairment,
depreciation and amortisation charges as follows:
Depreciation
Impairment and amortisation
2014 2013 2014 2013
GBP000 GBP000 GBP000 GBP000
Horticulture 3,071 - 1,687 1,472
Freeland - - 230 463
Other - - 42 15
Central costs - - 18 14
Total 3,071 - 1,977 1,964
====== ====== ========= ========
Asset and liability information is not reported to the chief
operating decision maker on a segment basis and therefore has not
been disclosed.
6 Exceptional items
The long running claim against Natural England in respect of the
Group's peat bog interests at Bolton Fell was settled in June 2014.
As a result the July 2014 receipt of GBP12.25 million, together
with the April 2010 receipt of GBP9.0 million have now been taken
to the Group Income Statement along with all the professional costs
of the case, the additional trading costs of the Group during the
transition period and all asset impairment costs resulting from the
closure of the peat harvesting operations at Bolton Fell. The net
credit to the Group Income Statement is GBP9,447,000. This is
included in exceptional items. The tax impact of this gain is a
credit of GBP727,000.
In Autumn 2013 the Group commenced a restructuring of its
finances which included the issue of a new five year loan note in
December 2013 and the move to an asset based lender in January
2014. The professional fees and bank charges for work carried out
in the financial year amounted to GBP991,000 (2013: GBP230,000). A
further exercise was carried out in Spring 2014 in advance of the
Natural England settlement at a cost of GBP398,000. These costs are
shown as exceptional.
Additionally the Group has incurred a range of overhead costs at
its flagship Ellesmere Port site that duplicated costs necessarily
incurred elsewhere in the Group and/or relate to the commencement
of operations there. These dual running costs amounted to
GBP1,344,000 in the year (2013: GBP369,000) and are treated as
exceptional items.
The development of the SuperFyba operation at Ellesmere Port
resulted in exceptional costs of GBP850,000 during the year as
further new technologies were introduced in May 2014 and also when
production was interrupted following the closure of the Boothby
factory operation in June 2014 until the Ellesmere Port bagging
facility came on line in Autumn 2014.
During the year the Group undertook a restructuring of its sales
function which resulted in a number of redundancy payments. The
cost of this exercise totalled GBP191,000 and this is treated as an
exceptional item.
During the year ended 30 September 2013 the operation of the
trading sites at Knottingley and Gainsborough were transferred to
the new site at Ellesmere Port. The resulting redundancy costs of
GBP178,000 were shown as exceptional.
The total of the exceptional expenses is GBP3,774,000 (2013:
GBP777,000). The tax impact of the exceptional expenses is a credit
of GBP830,000 (2013: 183,000).
The above items are summarised in the following table:
2014 2013
GBP000 GBP000
Exceptional gains
Natural England 9,447 -
Tax impact 727 -
------ ------
Net 10,174 -
====== ======
Exceptional expenses
Refinance costs 1,389 230
Dual running costs 1,344 369
SuperFyba 850 -
Restructuring 191 178
------ ------
3,774 777
Tax impact (830) (183)
------ ------
Net 2,944 594
====== ======
7 Dividends paid and proposed
2014 2013
GBP000 GBP000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for September 2013:
1.5p (September 2012: 2.6) 259 443
Interim for September 2014: nil (September
2013 - 1.5p) - 256
------ ------
Dividends paid 259 699
====== ======
Proposed for approval by shareholders
at the AGM:
Final dividend for September 2014:
nil (2013: 1.5p) - 256
====== ======
8 Share capital
Issued and fully paid 2014 2013 2014 2013
Number Number GBP000 GBP000
Ordinary shares of 25p
each 17,377,420 17,059,046 4,344 4,265
========== ========== ====== ======
During the year 318,374 ordinary shares of 25p each were issued
at nil cost under the Group's LTIP scheme. Also, the Company issued
5,665,000 warrants for ordinary shares in the Company. These
warrants may be exercised at any time at a subscription price of
80p.
9 Loan Notes
On 20 December 2013 the Company raised a total of GBP8.24
million before expenses through the issue of fixed rate secured
redeemable convertible loan notes to institutional and other
investors, the majority of whom were existing shareholders in the
Company.
The funding provided by the convertible notes has been used
primarily to expedite development of the Group's Ellesmere Port
manufacturing facility.
The loan notes carry a coupon of 8% together with a premium of
up to 3% which reduces by 1% for each of the first three capital
repayments of GBP1.0 million.
The loan notes are repayable in December 2018 or earlier at the
Company's option. On repayment the loan note holders may elect to
take repayment in ordinary shares of the Company at a conversion
rate of GBP1.59 of debt for each ordinary share.
10 Post Balance Sheet Event
On 30 November 2014 the Group completed the transfer of its
working capital facilities to Leumi ABL Ltd. The new facilities
comprise debtor and inventory facilities totalling GBP26 million
and amortising loans of a further GBP3 million. The working capital
facilities are at 2.1% and 2.5% above Libor while the amortising
loans are at 2.75% and 3.0% above Libor.
11. IAS 19 Revised
This year the Group has adopted IAS 19 Revised in respect of its
pension scheme. As a consequence the Group's accounting policies is
to recognise immediately all past service costs and to replace
interest cost and expected return on plan assets with a net
interest amount that is calculated by applying the discount rate to
the net defined benefit liability. The impact of applying the new
standard to the comparative figures for the year ended 30 September
2013 is an increase in other finance costs in the Group Income
Statement and in actuarial gains in the Group Statement of
Comprehensive Income of GBP484,000.
12 Annual General Meeting
The Company intends to post the Report and Accounts to
shareholders on 9 February 2015. The Annual General Meeting of the
Company will be held at noon on Friday 6 March 2015 at the Group's
flagship site at Ellesmere Port when there will be an opportunity
for shareholders to tour the site. The full address is William
Sinclair Horticulture, Bridges Road, Ellesmere Port, Cheshire CH65
4LB.
Copies of this announcement are available from the Company's
registered office which is Firth Road, Lincoln, LN6 7AH during
normal office hours and on the Company's website
www.william-sinclair.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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