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 |
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| 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.
|
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| 2. | Exceptional item | 2021 | 2020
|
| |
|
| | £'000
| £'000
|
| |
|
| Property impairment reversal | 530 | - |
| |
|
| | ------------ | ------------ |
| |
|
| | 530 | - |
| |
|
| | ------------ | ------------ |
| |
|
|
| | |
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| 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 |
| ||
| | ------------ | ------------ |
| ||
| | | |
| ||
|
| | | |
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| 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 |
| |
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| ------------ | ------------ |
| |
| 6. | Dividends
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| 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.
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| 7.
| Availability of Report and Accounts |
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| 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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