Company Announcements

Final Results

Source: RNS
RNS Number : 9893L
Slingsby(H.C.)Plc
18 May 2022
 

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended. 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 2021

 

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 release of restrictions relating to the Coronavirus and the agreement with regard to the pension scheme detailed below, the Company's inability to obtain Directors' and Officers' insurance cover in respect of claims relating to the pension scheme has deterred suitable candidates. The Board will continue to explore solutions to this issue, with the objective remaining to appoint new Non-Executive Directors at the earliest opportunity.

 

Results

 

In the half year statement, I reported an operating profit of £0.16m on sales of £9.95m. The full year operating profit (before exceptional items) was £0.4m (2020: £1.3m) on sales of £19.8m (2020: £21.8m). Group sales decreased by around 9%, which together with a reduction in gross margin, led to a profit before taxation and exceptional items of £0.3m (2020: £1.1m).  The decrease in Group sales is principally due to a decline in demand for Coronavirus related products compared to the 2020 year.  The decline in gross margin was due to increases in the cost of goods across the product range and in freight charges. Profit before tax of £0.8m in 2021 (2020: £1.1m) included an exceptional item of £0.53m relating to the increase in value of the freehold property at Baildon.

 

ESE Direct Limited ("ESE") contributed £6.4m of sales (2020: £5.9m) and profit before tax and management charges of £0.53m (2020: £0.51m).  ESE's sales recovered as ESE added more virus-related products to the range and its customer base was more active during 2021, following the Government enforced lockdowns in 2020.

 

Group earnings before interest, tax, depreciation, amortisation and exceptional items ("EBITDA") in the year ended 31 December 2021 were £0.9m (2020: £1.7m).  The Group had net cash (after overdraft balances included in trade and other payables) as at 31 December 2021 of £0.3m (2020: £0.3m).

 

Dividend

 

Despite the agreement reached with the Trustee of the defined benefit pension scheme enabling the recommencement of dividends, the Board does not recommend a final dividend for the year ended 2021 (2020: £nil).  This is due to the considerable uncertainty facing the Group at present which is discussed in more detail below.

 

Under the agreement with the pension scheme, dividends are limited in their quantum to £60,000 plus 50% of net cashflow over £150,000.

 

Pension Scheme

 

The Company paid £0.36m (2020: £0.30m) in deficit reduction contributions during 2021 including an additional payment of £45,000 based on the Group's cash generation in the year.  The Company also continues to contribute £0.16m towards the scheme's running costs. 

 

At 31 December 2021, the pension scheme deficit decreased by £0.24m to £7.9m (2020: £8.2m). This improvement in the pension scheme position together with the profit generated in the year, increased the Group's net assets to £2.3m (2020: £1.2m)

 

Recent Trading

 

Group sales in Q1 of 2022 against the same period in 2021 increased by 4%.  This improvement in sales offset the impact of a fall in gross margin leading to an unaudited profit before tax in Q1 2022 of £0.16m compared to £0.14m in the same period in 2021.

 

The market remains competitive, and the Board is cautious regarding outlook.  This is particularly the case due to the significant uncertainty that remains caused by Coronavirus and the conflict in the Ukraine   It is unclear as to the impact that either of these events will have on demand going forward.

 

 

In addition, due to inflationary and supply pressures, the Group continues to experience significant cost increases across its product range and in its shipping costs.  These increases impacted the gross margin in 2021 and have continued into 2022.  Supply chain issues, both in terms of supply of components and availability of transport persist, impacting on customer service levels and in some instances lost sales opportunities.

 

Finally, I would like to thank our staff across the Group for their efforts in 2021.  The Coronavirus pandemic, whilst having a lesser impact on operations as 2021 progressed, still presented the Group with operational and organisational challenges which were overcome due to the attitude and hard work of our employees. 

 


 

 

D.S.Slingsby



Interim Executive Chairman

 



 


 



18 May 2022



 

 

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 (Nominated Adviser & Broker)

Tel:  020 3328 5656

David Worlidge / George Payne

 


 

 


 

 

Consolidated Income Statement for the year ended 31 December 2021

 


Note

2021

£'000

 

2020

£'000

 

Revenue


19,824

21,806



----------

----------

 

Operating profit before exceptional items


410

1,263

Exceptional items

2

530

-





Operating profit


940

1,263









Finance costs


(118)

          (154)



----------

----------

Profit before taxation


822

       1,109

Taxation


(255)

(163)



----------

----------

Profit for the year attributable to owners of the parent


567

946



----------

----------

Basic and diluted earnings per share

4

54.0p

92.3p



----------

----------

 

 

 

Consolidated Statement of Comprehensive Income and Expense for the year ended 31 December 2021

                                               



2021

£'000

 

2020

£'000

 

Profit for the year


567

946

 

Items that will not be classified to profit or loss:

 

 

 

Re-measurements of post-employment benefit obligation


(3)

(1,784)

Movement in deferred tax relating to retirement benefit obligation


 

          491

 

339

 

 

 

 



----------

       ----------

Other comprehensive income/(expense)


488

       (1,445)



----------

 

       ----------

Total comprehensive income/(expense) for the year attributable to equity shareholders

 

 

 

1,055

 

         (499)

 


        ----------

                ----------





 

 



 Consolidated Balance Sheet as at 31 December 2021

 


Note

2021

£'000

 

2020

£'000

 

Assets




Non-current assets




Property, plant and equipment


5,377

5,084

Intangible assets


386

518

Goodwill


700

700

Deferred tax asset


1,985

1,553



--------

----------



8,448

7,855



--------

----------

Current assets




Inventories


2,330

2,234

Trade and other receivables


2,764

2,632

Derivative financial asset


7

-

Cash and cash equivalents


1,999

1,781



--------

----------



7,100

6,637



--------

----------

 

Liabilities




Current liabilities




Trade and other payables


(4,593)

(4,454)

Derivative financial liability


               -

(7)

Finance lease obligations


             (32)

(34)



---------

---------



(4,625)

(4,495)



--------

----------

Net current assets


2,475

2,142



--------

----------

Non-current liabilities




Lease obligations


             -

(32)

Retirement benefit obligation

3

(7,938)

(8,175)

Deferred tax liabilities


(722)

(582)



--------

----------

Net assets


2,263

1,208



--------

 

----------

 

Capital and reserves




Share capital


262

262

Share Premium


24

24

Retained earnings


1,977

922



--------

----------

Total equity


2,263

1,208

 


--------

----------













 

 



 Consolidated Cash Flow Statement for the year ended 31 December 2021

 



2021

£'000

2020

£'000


Note



Cash flows from operating activities




Cash generated from operations

5

331

 1,594

Interest paid


1

       (13)

UK corporation tax paid


(150)

             (41)



--------

--------

Cash generated from operating activities


182

1,540



--------

--------

Cash flows from investing activities




Purchase of property, plant and equipment


(100)

(108)

Proceeds from sales of property, plant and equipment


28

6

Purchase of intangible assets


(3)

(18)



--------

--------

Net cash used in investing activities


(75)

--------

(120)

--------

 




Cash flows from financing activities




Capital element of lease payments


(36)

(36)

Proceeds from share issue


-

36

Repayment of borrowings


-

(1,034)

Increase in overdraft


147

117



--------

--------

Net cash generated from / (used in) financing activities


111

(917)

 


--------

--------

Net increase in cash and cash equivalents


218

503

 

Opening cash and cash equivalents


1,781

1,278



--------

--------

Closing cash and cash equivalents


1,999

          1,781



--------

--------

 








 

Consolidated Statement of Changes in Shareholders' Equity

 

 

 

 

Share capital

£'000

Share premium £'000

Retained earnings

£'000

Total equity

£'000






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

 

----------

---------

----------

----------

1 January 2021

262

24

922

1,208

Profit for the year

-

-

567

567

Other comprehensive income for the year

-

-

488

488

 

Total comprehensive income for the year

----------

-

---------

---------

1,055

----------

1,055


----------

---------

----------

----------

31 December 2021

262

24

1,977

2,263


----------

---------

----------

----------

 

 

 

 

Notes to the Preliminary Results for the year ended 31 December 2021

 

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 2021 but has been extracted from those accounts. The annual accounts for the year ended 31 December 2021 have been prepared in accordance with UK adopted International Accounting Standards. The financial information included in this preliminary announcement does not include all the disclosures required in accounts prepared in accordance with UK adopted International Accounting Standards and accordingly it does not itself comply with UK adopted International Accounting Standards.

 

The accounting policies used in the preparation of these preliminary results have remained unchanged from those set out in the statutory accounts for the year ended 31 December 2020. They are also consistent with those in the full accounts for the year ended 31 December 2021 which have yet to be published.

 

The auditors have reported on the accounts for the year ended 31 December 2021 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 comparative information included in this preliminary announcement has been extracted from the statutory accounts for the year ended 31 December 2020. The auditors have also reported on these accounts 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.

 

Statutory accounts for the year ended 31 December 2020 have been delivered to the Registrar of Companies and those for the financial year ended 31 December 2021 will be delivered following the Company's annual general meeting.

 

 

2.

Exceptional item

2021

2020

 

 

 


£'000

 

£'000

 

 

 

Property impairment reversal

530

-

 

 


------------

------------

 

 


530

-

 

 


------------

------------

 

 

 

 



 

3.

Retirement benefit obligation



 

 


2021

2020

 

 


 

£'000

 

£'000

 

 

 




 

 

Present value of funded obligation

25,061 

25,182 

 

 

Fair value of scheme assets

(17,123)

(17,007)

 


------------

------------

 

Net liability in balance sheet

7,938 

8,175 

 


------------

------------

 




 

 




 

4.

 

Earnings per share

 



 

 

 

 

 

Basic profit per share is based upon a profit of £567,000 (2020:  £946,000) and on 1,050,000 (2020: 1,025,000) 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

 

 


2021

 

2020

 

 

 


£'000

 

£'000

 

 

 

Profit before tax

822

1,109

 

 

Net finance costs

118 

154 

 

 

Depreciation and amortisation

461 

430 

 

 

Defined benefit pension scheme contributions paid

(357)

      (304)

 


Property impairment reversal

(530)

-

 





 





 


Profit on sale of property, plant and equipment

(17)

(6)

 


Increase in inventories

(107)

(90)

 


Increase in trade and other receivables

(137)

(231)

 


Increase in trade and other payables

78

532

 



------------

------------

 


Cash generated from operating activities

331

1,594

 


 

 

 

------------

------------

 

6.

Dividends

 



 

 

No dividends were paid or declared during 2020 or 2021 and the Directors are not proposing any final dividend be payable in respect of the year ended 31 December 2021.

 

 

 

7.

 

Availability of Report and Accounts

 

 

The financial statements for the year ended 31 December 2021, containing a notice of the Annual General Meeting will be posted to shareholders shortly and will be available on the Company's website www.slingsby.com/investor-relations.

 

 

 

 

 

 

 

 


 

 

 

 

 

 

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