TIDMSLNG

RNS Number : 8377U

Slingsby(H.C.)Plc

04 August 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. With the publication of this announcement, this information is now considered to be in the public domain.

4 August 2022

H C Slingsby plc

("Slingsby" or "the Company")

Report for the half year ended 30 June 2022

Statement by the Chairman

Trading

In my trading update of 21 June 2022, I reported that Group sales in the five months to 31 May 2022 were 8% higher than prior year but that gross margin was lower, meaning that unaudited profit before tax was GBP0.17m compared to GBP0.07m in the prior year. We were cautious regarding the outlook due to the significant uncertainty remaining from the aftermath of the coronavirus pandemic, the impact that high inflation may have on the UK economy and the ongoing conflict in the Ukraine.

I am pleased to report that Group sales in the six months to 30 June 2022 were 10% higher than in the same period in 2021. This increase in sales offset the continuation in the trend regarding gross margin and higher overhead costs and led to an unaudited profit before tax of GBP0.24m in the six months ended 30 June 2022 compared to an unaudited profit before tax of GBP0.1m in the same period in 2021.

The market remains competitive, and it remains unclear what impact the aforementioned factors will have on demand going forward. The Group continues to experience cost inflation across most areas of its business (goods, freight and overheads) and there is a risk that the UK economy will enter recession in H2 2022. There is also heightened potential for credit related issues should customers become insolvent.

Balance sheet

The Group had net assets of GBP4.68m at 30 June 2022 (GBP1.96m at 30 June 2021) compared to net assets of GBP2.26m at 31 December 2021. This improvement is mostly due to a decrease in the liability relating to the defined benefit pension scheme of GBP2.2m (after associated deferred tax). The retirement benefit obligation decreased during the six months to 30 June 2022 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 GBP159,000 in the six months to 30 June 2022 in line with the agreement with the scheme's Trustee.

Cashflow

The Group had net cash of GBP0.5m at 30 June 2022 (GBP0.8m at 30 June 2021) compared to GBP0.3m at 31 December 2021. 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 remains 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 during continued challenging times.

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 (Nominated Adviser and Broker)

   David Worlidge/George Payne                                                   020 3328 5656 
 
 
 

Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2022

 
                                                   Half year          Half year              Year 
                                                       ended              ended             ended 
                                                    30/06/22           30/06/21          31/12/21 
                                                 (Unaudited)        (Unaudited)         (Audited) 
                                        Note         GBP'000            GBP'000           GBP'000 
 Revenue                                              10,977              9,950            19,824 
                                                   ---------          ---------         --------- 
 Operating profit before exceptional 
  items                                                  316                156               410 
 Exceptional items                                         -                  -               530 
 
 Finance costs                                          (72)               (61)             (118) 
                                                    --------           --------          -------- 
 Profit before taxation                                  244                 95               822 
 Taxation                                2              (62)               (26)             (255) 
                                                    --------           --------          -------- 
 Profit for the period attributable to                   182                 69               567 
  equity shareholders                               --------           --------          -------- 
 Basic and diluted weighted average 
  earnings per share                                   17.3p               6.6p             54.0p 
                                                    --------           --------          -------- 
 
 

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 2022

 
                                                          Half year       Half year          Year 
                                                              ended           ended         ended 
                                                           30/06/22        30/06/21      31/12/21 
                                                        (Unaudited)     (Unaudited)     (Audited) 
                                                            GBP'000         GBP'000       GBP'000 
 
 Profit for the period                                          182              69           567 
                                                           --------        --------      -------- 
 Items that will not be reclassified 
  to profit or loss 
 Remeasurements of post-employment 
  benefit obligations                                         2,985             842           (3) 
 Movement in deferred tax relating to 
  retirement 
  benefit obligation                                          (746)           (160)           491 
                                                           --------        --------      -------- 
 Other comprehensive income                                   2,239             682           488 
 
                                                           --------        --------      -------- 
 Total comprehensive income recognised 
  for the period attributable to 
  equity shareholders                                         2,421             751         1,055 
                                                           --------        --------      -------- 
 
 
 
 
 

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 2022

 
                                                30/06/22        30/06/21      31/12/21 
                                             (Unaudited)     (Unaudited)     (Audited) 
                                                 GBP'000         GBP'000       GBP'000 
 Assets 
 Non-current assets 
 Property, plant and equipment                     5,332           4,962         5,377 
 Intangible assets                                   319             453           386 
 Goodwill                                            700             700           700 
 Deferred tax asset                                1,216           1,367         1,985 
                                               ---------       ---------      -------- 
                                                   7,567           7,482         8,448 
                                               ---------       ---------      -------- 
 Current assets 
 Inventories                                       2,806           2,164         2,330 
 Trade and other receivables                       3,120           2,658         2,764 
 Cash and cash equivalents                         2,229           2,076         1,999 
  Derivative financial asset                           3               2             7 
                                               ---------       ---------     --------- 
                                                   8,158           6,900         7,100 
                                               ---------       ---------     --------- 
 Liabilities 
 Current liabilities 
 Trade and other payables                        (3,579)         (3,172)     (2,884) 
  Bank borrowings                                (1,764)         (1,275)     (1,653) 
  Lease obligations                                 (15)            (34)       (32) 
 Current tax liabilities                            (96)           (150)          (56) 
                                               ---------       ---------     --------- 
                                                 (5,454)         (4,631)       (4,625) 
                                               ---------       ---------     --------- 
 Net current assets                                2,704           2,269         2,475 
                                               ---------       ---------     --------- 
 Non-current liabilities 
 Retirement benefit obligation                   (4,865)         (7,194)       (7,938) 
  Lease obligations                                    -            (15)             - 
 Deferred tax liabilities                          (722)           (583)         (722) 
                                               ---------       ---------     --------- 
 
 Net assets                                        4,684           1,959         2,263 
                                               ---------       ---------     --------- 
 Capital and reserves 
 Share capital                                       262             262           262 
 Share premium                                        24              24            24 
 Retained earnings                                 4,398           1,673         1,977 
                                               ---------       ---------     --------- 
 Total equity                                      4,684           1,959         2,263 
                                               ---------       ---------     --------- 
 
 
 
 

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    Retained       Total 
                                            Capital     premium    earnings      equity 
                                            GBP'000     GBP'000     GBP'000     GBP'000 
 
 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 
                                          ---------   ---------   ---------   --------- 
 
 At 1 January 2022                              262          24       1,977       2,263 
 Total comprehensive income recognised 
  for the period                                  -           -       2,421       2,421 
                                          ---------   ---------   ---------   --------- 
 At 30 June 2022                                262          24       4,398       4,684 
                                          ---------   ---------   ---------   --------- 
 

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 2022

 
                                                         Half year       Half year          Year 
                                                             ended           ended         ended 
                                                          30/06/22        30/06/21      31/12/21 
                                                       (Unaudited)     (Unaudited)     (Audited) 
                                              Note         GBP'000         GBP'000       GBP'000 
 Cash flows from operating activities 
 Cash generated from operations                3               228             590           331 
 UK corporation tax paid                                         -               -         (150) 
 Interest received                                               -               1             1 
                                                         ---------       ---------     --------- 
 Cash generated from operating activities                      228             591           182 
                                                         ---------       ---------     --------- 
 Cash flows from investing activities 
 Purchase of property, plant and 
  equipment                                                  (101)            (44)         (100) 
 Purchase of intangible assets                                   -             (3)           (3) 
 Proceeds from sales of property, plant 
  and equipment                                                  9               -            28 
                                                         ---------       ---------     --------- 
 Net cash outflow from investing 
  activities                                                  (92)            (47)          (75) 
                                                         ---------       ---------     --------- 
 Cash flows from financing activities 
 
   Capital element of lease payments                          (17)            (18)       (36) 
 Increase/(decrease) in overdraft                              111           (231)           147 
                                                         ---------       ---------     --------- 
 Net cash generated from/(used in) 
  financing activities                                          94           (249)           111 
                                                         ---------       ---------     --------- 
 Net increase in cash and cash equivalents                     230             295           218 
 
 Opening cash and cash equivalents                           1,999           1,781         1,781 
 
                                                         ---------       ---------     --------- 
 Closing cash and cash equivalents                           2,229           2,076         1,999 
                                                         ---------       ---------     --------- 
 
 
 

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 2022

 
 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 2021 Annual Report and Accounts. 
          The comparative figures for the year ended 31 December 2021 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 
          2021 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 
                                                          30/06/22        30/06/21      31/12/21 
                                                       (Unaudited)     (Unaudited)     (Audited) 
                                                           GBP'000         GBP'000       GBP'000 
 
  Current tax                                                   40               -            56 
  Deferred tax                                                  22              26           199 
                                                         ---------       ---------     --------- 
                                                                62              26           255 
                                                         ---------       ---------     --------- 
         The effective tax rate is 25%. 
 
   3.      Cash generated from operations 
                                                         Half year       Half year          Year 
                                                             ended           ended         ended 
                                                          30/06/22        30/06/21      31/12/21 
                                                       (Unaudited)     (Unaudited)     (Audited) 
                                                           GBP'000         GBP'000       GBP'000 
 
  Profit before tax                                            244              95           822 
  Net finance costs                                             72              61           118 
  Depreciation and amortisation                                215             234           461 
         Defined benefit pension scheme 
          contributions paid                                 (159)           (199)         (357) 
   Property impairment reversal                                  -               -         (530) 
  Profit on sale of property, plant 
   and equipment                                               (9)               -          (17) 
  (Increase)/decrease in inventories                         (476)              60         (107) 
  Increase in trade and other receivables                    (352)            (27)         (137) 
  Increase in trade and other payables                         693             366            78 
                                                         ---------       ---------     --------- 
  Cash generated from operating activities                     228             590           331 
                                                         ---------       ---------     --------- 
 
 
 
 
 

4. Availability of Interim Report

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

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