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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