TIDMSLNG

RNS Number : 2445J

Slingsby(H.C.)Plc

20 August 2021

Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.

20 August 2021

H C Slingsby plc

("Slingsby" or "the Company")

Report for the half year ended 30 June 2021

Statement by the Chairman

Trading

In my trading update of 9 June 2021, I reported that Group sales in the four months to 30 April 2021 were 6% higher than prior year but that gross margin was lower, meaning that unaudited profit before tax was GBP0.1m compared to GBP0.2m in the prior year. We were cautious regarding the outlook due to continued uncertainty caused by the coronavirus pandemic. Whilst the Group's sales grew in 2020 due to demand for virus related products, the same level of order intake that was experienced in 2020 had not recurred in 2021. In addition, the Group has experienced significant cost price increases across its product range as well as higher shipping costs and delays which impacted on gross margin.

Group sales in the six months to 30 June 2021 were 5% lower than in the same period in 2020. This fall in sales together with a continuation in the trend regarding gross margin, led to an unaudited profit before tax of GBP0.1m in 2021 compared to an unaudited profit before tax of GBP0.4m in the same period in 2020.

The market remains competitive and it remains unclear what impact the pandemic will have on demand going forward. The downward trend in gross margin is likely to persist for the remainder of the year and there is also heightened potential for credit related issues should customers become insolvent.

Balance sheet

The Group had net assets of GBP1.96m at 30 June 2021 compared to net assets of GBP1.21m at 31 December 2020. This improvement is due to a decrease in the liability relating to the defined benefit pension scheme of GBP0.7m (after associated deferred tax). The retirement benefit obligation decreased during the six months to 30 June 2021 due to an increase in the discount rate used by the scheme actuary. This has the impact of decreasing scheme liabilities, which outweighed a decrease in the value of scheme assets. The Company made deficit reduction contributions totalling GBP199,000 in the six months to 30 June 2021, in line with the agreement with the scheme's Trustee.

Cashflow

The Group had net cash of GBP0.8m at 30 June 2021 (net debt of GBP0.4m at 30 June 2020) compared to GBP0.3m at 31 December 2020. The Group continues to operate within its existing banking facilities and the Directors continue to believe that the Group has additional funding options available should the need arise.

Dividend

Due to the uncertain outlook, the Board has decided not to declare an interim dividend. It is the Board's intention to re-commence dividend payments to shareholders as soon as it is prudent to do so.

People

We would like to thank our employees for their hard work and flexibility which has enabled the Group to continue its operations during a challenging time.

Dominic Slingsby

Interim Executive Chairman and Operations Director

For further information please contact:

H C Slingsby plc

   Dominic Slingsby, Interim Executive Chairman                            01274 535 030 

Morgan Morris, Group Chief Executive

Allenby Capital Limited

   David Worlidge / George Payne                                                   020 3328 5656 
 
 
 

Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2021

 
                                                 Half year      Half year         Year 
                                                     ended          ended        ended 
                                                  30/06/21       30/06/20     31/12/20 
                                               (Unaudited)    (Unaudited)    (Audited) 
                                       Note        GBP'000        GBP'000      GBP'000 
 Revenue                                             9,950         10,455       21,806 
                                                 ---------      ---------    --------- 
 Operating profit                                      156            505        1,263 
 
 Finance costs                                        (61)           (81)        (154) 
                                                  --------       --------     -------- 
 Profit before taxation                                 95            424        1,109 
 Taxation                               2             (26)           (38)        (163) 
                                                  --------       --------     -------- 
 Profit for the period attributable to                  69            386          946 
  equity shareholders                             --------       --------     -------- 
 Basic and diluted weighted average 
  earnings per share                                  6.6p          38.6p        92.3p 
                                                  --------       --------     -------- 
 
 

The results set out above derive entirely from continuing operations.

The above unaudited condensed consolidated income statement should be read in conjunction with the accompanying notes.

Unaudited Consolidated Statement of Comprehensive Income and Expense for the half year ended 30 June 2021

 
                                                      Half year      Half year         Year 
                                                          ended          ended        ended 
                                                       30/06/21       30/06/20     31/12/20 
                                                    (Unaudited)    (Unaudited)    (Audited) 
                                                        GBP'000        GBP'000      GBP'000 
 
 Profit for the period                                       69            386          946 
 Items that will not be reclassified 
  to profit or loss 
 Remeasurements of post-employment 
  benefit obligations                                       842          (883)      (1,784) 
 Movement in deferred tax relating to 
  retirement 
  benefit obligation                                      (160)            150          339 
                                                       --------       --------     -------- 
 Other comprehensive income/(expense)                       682          (733)      (1,445) 
 
                                                       --------       --------     -------- 
 Total comprehensive income/(expense) 
  recognised for the period attributable 
  to equity shareholders                                    751          (347)        (499) 
                                                       --------       --------     -------- 
 
 
 
 
 

The above unaudited consolidated statement of comprehensive income and expense should be read in conjunction with the accompanying notes.

Unaudited Consolidated Balance Sheet as at 30 June 2021

 
                                                     30/06/21       30/06/20     31/12/20 
                                                  (Unaudited)    (Unaudited)    (Audited) 
                                                      GBP'000        GBP'000      GBP'000 
 Assets 
 Non-current assets 
 Property, plant and equipment                          4,962          5,089        5,084 
 Intangible assets                                        453            650          518 
 Goodwill                                                 700            700          700 
 Deferred tax asset                                     1,367          1,239        1,553 
                                                    ---------      ---------     -------- 
                                                        7,482          7,678        7,855 
                                                    ---------      ---------     -------- 
 Current assets 
 Inventories                                            2,164          2,456        2,224 
 Trade and other receivables                            2,658          3,046        2,632 
 Cash and cash equivalents                              2,076          1,696        1,781 
  Derivative financial asset                                2              7            - 
                                                    ---------      ---------    --------- 
                                                        6,900          7,205        6,637 
                                                    ---------      ---------    --------- 
 Liabilities 
 Current liabilities 
 Trade and other payables                             (3,172)        (3,534)    (2,948) 
  Bank borrowings                                     (1,275)        (2,126)     (1,506) 
  Derivative financial obligations                          -              -       (7) 
  Lease obligations                                      (34)           (32)       (34) 
 Current tax liabilities                                (150)              -            - 
                                                    ---------      ---------    --------- 
                                                      (4,631)        (5,692)      (4,495) 
                                                    ---------      ---------    --------- 
 Net current assets                                     2,269          1,513        2,142 
                                                    ---------      ---------    --------- 
 Non-current liabilities 
 Retirement benefit obligation                        (7,194)        (7,359)      (8,175) 
  Lease obligations                                      (15)           (50)         (32) 
 Deferred tax liabilities                               (583)          (458)        (582) 
                                                    ---------      ---------    --------- 
 
 Net assets                                             1,959          1,324        1,208 
                                                    ---------      ---------    --------- 
 Capital and reserves 
 Share capital                                            262            250          262 
 Share premium                                             24              -           24 
 Retained earnings                                      1,673          1,074          922 
                                                    ---------      ---------    --------- 
 Total equity                                           1,959          1,324        1,208 
                                                    ---------      ---------    --------- 
 
 
 
 

The above unaudited consolidated balance sheet should be read in conjunction with the accompanying notes .

Unaudited Consolidated Statement of Changes in Shareholders' Equity

 
                                               Share   Share premium    Retained   Total equity 
                                             Capital         GBP'000    earnings        GBP'000 
                                             GBP'000                     GBP'000 
 
 At 1 January 2020                               250               -       1,421          1,671 
 Total comprehensive expense recognised 
  for the period                                   -               -       (347)          (347) 
 
                                           ---------       ---------   ---------      --------- 
 At 30 June 2020                                 250               -       1,074          1,324 
                                           ---------       ---------   ---------      --------- 
 
 At 1 January 2021                               262              24         922          1,208 
 Total comprehensive income recognised 
  for the period                                   -               -         751            751 
                                           ---------       ---------   ---------      --------- 
 At 30 June 2021                                 262              24       1,673          1,959 
                                           ---------       ---------   ---------      --------- 
 

The above unaudited consolidated statement of changes in shareholders' equity should be read in conjunction with the accompanying notes .

Unaudited Consolidated Statement of Cash Flows for the half year ended 30 June 2021

 
                                                       Half year      Half year         Year 
                                                           ended          ended        ended 
                                                        30/06/21       30/06/20     31/12/20 
                                                     (Unaudited)    (Unaudited)    (Audited) 
                                             Note        GBP'000        GBP'000      GBP'000 
 Cash flows from operating activities 
 Cash generated from operations               3              590            787        1,594 
 UK corporation tax paid                                       -              -         (41) 
 Interest received/(paid)                                      1           (12)         (13) 
                                                       ---------      ---------    --------- 
 Cash generated from operating activities                    591            775        1,540 
                                                       ---------      ---------    --------- 
 Cash flows from investing activities 
 Purchase of property, plant and 
  equipment                                                 (44)           (30)        (108) 
 Purchase of intangible assets                               (3)           (12)         (18) 
 Proceeds from sales of property, plant 
  and equipment                                                -              -            6 
                                                       ---------      ---------    --------- 
 Net cash outflow from investing 
  activities                                                (47)           (42)        (120) 
                                                       ---------      ---------    --------- 
 Cash flows from financing activities 
 
   Capital element of lease payments                        (18)           (18)       (36) 
 Proceeds from share issue                                     -              -           36 
 Proceeds from/(repayment of) borrowing                        -            510      (1,034) 
 (Decrease)/Increase in overdraft                          (231)          (807)          117 
                                                       ---------      ---------    --------- 
 Net cash used in financing activities                     (249)          (315)        (917) 
                                                       ---------      ---------    --------- 
 Net increase in cash and cash equivalents                   295            418          503 
 
 Opening cash and cash equivalents                         1,781          1,278        1,278 
 
                                                       ---------      ---------    --------- 
 Closing cash and cash equivalents                         2,076          1,696        1,781 
                                                       ---------      ---------    --------- 
 

The above unaudited consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Notes to the Interim Report for the half year ended 30 June 2021

 
 1.      Interim Financial Information 
         The unaudited condensed consolidated interim financial information 
          does not constitute statutory accounts within the meaning of 
          Section 434 of the Companies Act 2006. The interim financial 
          statements, which are unaudited and have not been reviewed by 
          the Company's auditors, have been prepared in accordance with 
          the policies set out in the 2020 Annual Report and Accounts. 
          The comparative figures for the year ended 31 December 2020 do 
          not constitute full financial statements and have been abridged 
          from the full accounts for the year ended on that date, on which 
          the auditors gave an unqualified report. They did not contain 
          any statement under Section 498 of the Companies Act 2006. The 
          2020 accounts have been delivered to the Registrar of Companies. 
          The Company has chosen not to adopt IAS 34 'Interim Financial 
          Statements'. 
 
 2.      Taxation                                       Half year      Half year         Year 
                                                            ended          ended        ended 
                                                         30/06/21       30/06/20     31/12/20 
                                                      (Unaudited)    (Unaudited)    (Audited) 
                                                          GBP'000        GBP'000      GBP'000 
 
  Current tax                                                   -             24          150 
  Deferred tax                                                 26             14           13 
                                                        ---------      ---------    --------- 
                                                               26             38          163 
                                                        ---------      ---------    --------- 
         The effective tax rate is 27%. 
 
   3.      Cash generated from operations 
                                                        Half year      Half year         Year 
                                                            ended          ended        ended 
                                                         30/06/21       30/06/20     31/12/20 
                                                      (Unaudited)    (Unaudited)    (Audited) 
                                                          GBP'000        GBP'000      GBP'000 
 
  Profit before tax                                            95            424        1,109 
  Net finance costs                                            61             81          154 
  Depreciation and amortisation                               234            210          430 
  Defined benefit pension scheme 
   contributions paid                                       (199)          (150)        (304) 
  Profit on sale of property, plant 
   and equipment                                                -              -          (6) 
  Decrease/(Increase) in inventories                           60          (322)         (90) 
  Decrease in trade and other receivables                    (27)          (652)        (231) 
  Increase in trade and other payables                        366          1,196          532 
                                                        ---------      ---------    --------- 
  Cash generated from operating activities                    590            787        1,594 
                                                        ---------      ---------    --------- 
 
 
 
 
 

4. Availability of Interim Report

The Interim Report will be available on the Company's website www.slingsby.com.

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