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 2023

H C Slingsby plc

("Slingsby" or "the Company")

Report for the half year ended 30 June 2023

Statement by the Chairman

Trading

In my statement in the trading update of 15 June 2023, I reported that Group sales in the four months to 30 April 2023 were 3% higher than prior year at a higher gross margin.  However overhead costs had increased, leading to an unaudited profit before tax of £0.1m compared to £0.19m in the four months ending 30 April 2022.  We were cautious regarding the outlook for the business due to significant uncertainty remaining mainly caused by the continuing conflict in Ukraine, the risk of a recession in the Group's main UK market and the longer term impacts of Coronavirus and Brexit not yet being fully known.  

Group sales in the six months to 30 June 2023 ("H1") are 4% higher than in the same period in 2022.  The trends in gross margin and overheads have continued in the second quarter and as a result unaudited profit before tax was £0.20m in the six months ended 30 June 2023 compared to an unaudited profit before tax of £0.24m in the same period in 2022.  The H1 profit is after £0.13m (2022: £0.07m) of finance costs which relate to interest charges on the pension scheme deficit.

In June 2023 we were notified that one of our main logistics partners had ceased trading, subsequently entering insolvency proceedings.  This caused some disruption to operations and increased freight costs during that month because alternative transport options came at a higher cost.  This had a modest impact upon gross margin in June and an effect on gross margin could persist during the remainder of the year, despite the Company implementing mitigating initiatives which are ongoing.

The market continues to be highly competitive, and it remains unclear what impact the aforementioned factors will have on demand going forward.  Inflationary pressures remain, particularly in regards to overheads and this is considered by the Directors likely to persist for the remainder of the year.  In the current economic environment, there is also heightened potential for credit related issues should customers become insolvent.

Balance sheet

The Group had net assets of £4.41m at 30 June 2023 (£4.68m at 30 June 2022) compared to net assets of £4.32m at 31 December 2022.  The reduction in net assets from 30 June 2022 is due to an increase in the pension scheme deficit outweighing profits generated.  The Company made deficit reduction contributions totalling £200,000 in the six months to 30 June 2023 in line with the agreement with the pension scheme's Trustee.  The triennial review carried out by the scheme actuary is underway and a new schedule of contributions is required to be agreed between the Company and the scheme Trustee before 31 March 2024.  This causes the potential for uncertainty regarding the Group's future cash flows.

Cashflow

The Group had net cash of £0.4m at 30 June 2023 (£0.5m at 30 June 2022) compared to £0.03m at 31 December 2022.  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.

Board Composition

The Board continues to believe that it would benefit from the appointment of new Non-Executive Directors.  The Board is continuing to explore solutions to the issue with the objective remaining to appoint new Non-Executive Directors and a Non-Executive Chairman.

Statement by the Chairman (continued)

Dividend

Due to the uncertain outlook, the Board has decided not to declare an interim dividend.

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 Advisor and Broker)

Alex Brearley/George Payne                                                      020 3328 5656

Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2023

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 2023

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 2023

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

Unaudited Consolidated Statement of Changes in Shareholders' Equity

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 2023

Notes to the Interim Report for the half year ended 30 June 2023

4.  Availability of Interim Report

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