TIDMSLNG

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 GBP0.16m on sales of GBP9.95m. The full year operating profit (before exceptional items) was GBP0.4m (2020: GBP1.3m) on sales of GBP19.8m (2020: GBP21.8m). Group sales decreased by around 9%, which together with a reduction in gross margin, led to a profit before taxation and exceptional items of GBP0.3m (2020: GBP1.1m). 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 GBP0.8m in 2021 (2020: GBP1.1m) included an exceptional item of GBP0.53m relating to the increase in value of the freehold property at Baildon.

ESE Direct Limited ("ESE") contributed GBP6.4m of sales (2020: GBP5.9m) and profit before tax and management charges of GBP0.53m (2020: GBP0.51m). 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 GBP0.9m (2020: GBP1.7m). The Group had net cash (after overdraft balances included in trade and other payables) as at 31 December 2021 of GBP0.3m (2020: GBP0.3m).

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: GBPnil). 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 GBP60,000 plus 50% of net cashflow over GBP150,000.

Pension Scheme

The Company paid GBP0.36m (2020: GBP0.30m) in deficit reduction contributions during 2021 including an additional payment of GBP45,000 based on the Group's cash generation in the year. The Company also continues to contribute GBP0.16m towards the scheme's running costs.

At 31 December 2021, the pension scheme deficit decreased by GBP0.24m to GBP7.9m (2020: GBP8.2m). This improvement in the pension scheme position together with the profit generated in the year, increased the Group's net assets to GBP2.3m (2020: GBP1.2m)

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 GBP0.16m compared to GBP0.14m 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      Tel: 020 3328 5656 
  Adviser & Broker) 
 David Worlidge / George Payne 
 

Consolidated Income Statement for the year ended 31 December 2021

 
                                         Note         2021             2020 
                                                   GBP'000          GBP'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               2020 
                                                    GBP'000            GBP'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         2020 
                                                  GBP'000      GBP'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               2020 
                                                       GBP'000            GBP'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) 
                                                      --------           -------- 
                                                          (75)              (120) 
 Net cash used in investing activities                --------           -------- 
 
 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       Share     Retained    Total equity 
                                       GBP'000     premium     earnings         GBP'000 
                                                   GBP'000      GBP'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 
                                                            GBP'000        GBP'000 
       Property impairment reversal                             530              - 
                                                       ------------   ------------ 
                                                                530              - 
                                                       ------------   ------------ 
 
 3.    Retirement benefit obligation 
                                                               2021           2020 
 
                                                            GBP'000        GBP'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 GBP567,000 
         (2020: GBP946,000) 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 
                                                            GBP'000        GBP'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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