Samuel Heath (LSE:HSM) has been consistently profitable, but has it produced good returns on net tangible assets? Also, given the strong link between a company’s return on net tangible assets over the long stretch and share performance will it be enlightening to estimate intrinsic value using return on net tangible assets data?
To answer these questions we need to look at the historical numbers.
Profits, assets and liabilities
£’000s Year end September | 2020 | 2019 | 2018 | 2017 | |||
INCOME STATEMENT | |||||||
Profit after tax | 1,069 | 738 | 980 | 1,013 | |||
Amortisation charge this year for accounting goodwill following acquisitions | 0 | 0 | 0 | 0 | |||
Exceptional items distorting profits (positive or negative) | 0 | 240 | 0 | 0 | |||
Profit for shareholders | 1,069 | 978 | 980 | 1,013 | |||
CURRENT ASSETS AND LIABILITIES | |||||||
Inventories | 4,230 | 3,989 | 3,930 | 3,789 | |||
Receivables | 2,370 | 2,286 | 2,287 | 2,169 | |||
Cash needed for operations (assumed) | 1,000 | 1,000 | 1,000 | 1,000 | |||
Other current assets | 0 | 0 | 0 | 0 | |||
Payables | -1,868 | -1,789 | -1,474 | -1,400 | |||
Short-term debt | 0 | 0 | 0 | 0 | |||
Other current liabilities | -137 | -171 | -175 | -158 | |||
Working capital for operations | 5,595 | 5,315 | 5,568 | 5,558 | |||
Surplus cash (assumed) | 2,016 | 2,153 | 1,366 | 1,079 | |||
NON-CURRENT ASSETS AND LIABILITIES | |||||||
Property, Plant and Equipment | 3,635 | 3,210 | 3,337 | 3,511 | |||
Goodwill in BS | 0 | 0 | 0 | 0 | |||
Previously written-off acquired goodwill – add back | 0 | 0 | 0 | 0 | |||
Other acquired intangible assets in BS | 0 | 0 | 0 | 0 | |||
Previously written-off other acquired intangibles – add back | 0 | 0 | 0 | 0 | |||
Long-term debt | 0 | 0 | 0 | 0 | |||
Other non-current liabilities | -46 | 0 | -175 | -158 | |||
Net non-current assets for operations | 3,589 | 3,210 | 3,162 | 3,353 | |||
OTHER ITEMS TO CONSIDER | |||||||
Defined benefit pension deficit | 6,575 | 7,420 | 6,472 | 6,501 | |||
Internally generated intangible assets capitalised to BS | 151 | 82 | 85 | 79 | |||
Investments (in shares, bonds, etc.) | 0 | 0 | 0 | 0 | |||
Operating lease non-cancellable commitments | 25 | 210 | 109 | 159 | |||
Preference share capital | 0 | 0 | 0 | 0 | |||
Minority interests in profit | 0 | 0 | 0 | 0 | |||
Minority interests in net assets | 0 | 0 | 0 | 0 |
£’000s Year end September | 2016 | 2015 | 2014 | 2013 | |||
INCOME STATEMENT | |||||||
Profit after tax | 769 | 394 | 443 | ||||
Amortisation charge this year for accounting goodwill following acquisitions | 0 | 0 | 0 | ||||
Exceptional items distorting profits (positive or negative) | 0 | 0 | 0 | ||||
Profit for shareholders | 769 | 394 | 443 | ||||
CURRENT ASSETS AND LIABILITIES | |||||||
Inventories | 3,321 | 3,157 | 2,899 | 2,731 | |||
Receivables | 2,153 | 2,085 | 1,819 | 1,909 | |||
Cash needed for operations (assumed) | 1,000 | 1,000 | 1,000 | 219 | |||
Other current assets | 0 | 56 | 0 | 1,401 | |||
Payables | -1,317 | -1,126 | -1,164 | -949 | |||
Short-term debt | 0 | 0 | 0 | 0 | |||
Other current liabilities | -162 | -72 | -118 | -19 | |||
Working capital for operations | 4,995 | 5,100 | 4,436 | 5,292 | |||
Surplus cash (assumed) | 1,078 | 648 | 1,026 | 0 | |||
NON-CURRENT ASSETS AND LIABILITIES | |||||||
Property, Plant and Equipment | 1,581 | 1,47 |
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