TIDMSLNG

RNS Number : 5494J

Slingsby(H.C.)Plc

20 August 2019

20 August 2019

H C Slingsby plc

("Slingsby" or "the Company")

Report for the half year ended 30 June 2019

Statement by the Chairman

Trading

In my trading update of 12 June 2019, I reported that Group sales in the five months to 31 May 2019 were 3.5% higher than prior year but that adverse movements in gross margin and overheads meant that operating profit was lower than the comparable period in 2018. Variability in order intake experienced since the decision to extend the Brexit date, the unwinding of customers' plans for this event and the economic uncertainty created, led us to be cautious regarding the short-term outlook.

While Group sales for the six months to 30 June 2019 were 2% higher compared with the prior year, operating profit fell by GBP117,000 to GBP93,000 (2018: GBP210,000) due to adverse movements in gross margin and overheads. The Group's loss before tax was GBP52,000 compared to a prior year profit before tax of GBP76,000 and is after GBP122,000 of finance costs relating to the company's defined benefit pension scheme (2018: GBP108,000).

We remain cautious regarding the outlook due to the continued variability in order intake, economic uncertainty and the competitive nature of the marketplace.

Balance sheet

The Group has net liabilities of GBP1.45m at 30 June 2019 from net assets of GBP0.22m at 31 December 2018. This is largely due to an increase in the liability relating to the defined benefit pension scheme of GBP1.6m (after associated deferred tax). The retirement benefit obligation increased during the six months to 30 June 2019 as a result of a change in the assumption regarding interest rates, although this was partly offset by an increase in the level of pension scheme assets despite the company making no deficit reduction contributions.

We remain in discussion with the trustees of the Company Pension Scheme and the relevant authorities regarding a long term solution to the pension scheme deficit and continue to pay the running costs previously agreed with the trustees of GBP160,000 per annum. Until these discussions regarding the defined benefit pension scheme are concluded, the quantum and timing of future deficit reduction payments in this regard are uncertain.

Cashflow

The Group had net debt of GBP1.30m at 30 June 2019 (GBP1.24m at 30 June 2018) compared to GBP1.15m at 31 December 2018. Stock levels at 30 June 2019 were GBP0.3m higher than at 31 December 2018 (GBP0.5m higher than at 30 June 2018) due to the Group's Brexit preparations and sourcing strategy. 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

The Board has decided not to declare an interim dividend.

People

Whilst our profit performance is reduced from that in the prior year, I would like to thank our employees across the Group for their continued hard work.

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

   David Worlidge/Nicholas Chambers                                           020 3328 5656 
 
 
 

Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2019

 
                                                   Half year      Half year         Year 
                                                       ended          ended        ended 
                                                    30/06/19       30/06/18     31/12/18 
                                                 (Unaudited)    (Unaudited)    (Audited) 
                                         Note        GBP'000        GBP'000      GBP'000 
 Revenue                                               9,946          9,725       19,817 
                                                   ---------      ---------    --------- 
 Operating profit before exceptional 
  items                                                   93            210          520 
 Exceptional items                        2                -              -        (891) 
                                                   ---------      ---------    --------- 
 Operating profit/(loss)                                  93            210        (371) 
 
 Finance costs                                         (145)          (134)        (262) 
                                                    --------       --------     -------- 
 (Loss)/profit before taxation                          (52)             76        (633) 
 Taxation                                 3               21              8         (29) 
                                                    --------       --------     -------- 
 (Loss)/profit for the period attributable              (31)             84        (662) 
  to equity shareholders                            --------       --------     -------- 
 Basic and diluted (loss)/profit 
  per share                                           (3.1p)           8.4p      (66.2p) 
                                                    --------       --------     -------- 
 
 

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 2019

 
                                                      Half year      Half year         Year 
                                                          ended          ended        ended 
                                                       30/06/19       30/06/18     31/12/18 
                                                    (Unaudited)    (Unaudited)    (Audited) 
                                                        GBP'000        GBP'000      GBP'000 
 
 (Loss)/profit for the period                              (31)             84        (662) 
 Items that will not be reclassified 
  to profit or loss 
 Remeasurements of post-employment 
  benefit obligations                                   (1,979)          1,565          604 
 Movement in deferred tax relating to 
  retirement 
  benefit obligation                                        337          (266)        (103) 
                                                       --------       --------     -------- 
 Other comprehensive (expense)/income                   (1,642)          1,299          501 
 
                                                       --------       --------     -------- 
 Total comprehensive (expense)/income 
  recognised for the period attributable 
  to equity shareholders                                (1,673)          1,383        (161) 
                                                       --------       --------     -------- 
 
 
 
 
 

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 2019

 
                                                 30/06/19       30/06/18     31/12/18 
                                              (Unaudited)    (Unaudited)    (Audited) 
                                                  GBP'000        GBP'000      GBP'000 
 Assets 
 Non-current assets 
 Property, plant and equipment                      4,588          4,469        4,578 
 Intangible assets                                    720            754          641 
 Goodwill                                           1,734          2,409        1,734 
 Deferred tax asset                                 1,775          1,221        1,434 
                                                ---------      ---------     -------- 
                                                    8,817          8,853        8,387 
                                                ---------      ---------     -------- 
 Current assets 
 Inventories                                        2,276          1,803        1,947 
 Trade and other receivables                        2,612          2,906        2,576 
 Cash and cash equivalents                          1,397          1,390        1,458 
  Current tax asset                                     -              -            - 
  Derivative financial asset                            6             26           14 
                                                ---------      ---------    --------- 
                                                    6,291          6,125        5,995 
                                                ---------      ---------    --------- 
 Liabilities 
 Current liabilities 
 Trade and other payables                         (2,765)        (3,006)    (2,658) 
  Bank borrowings                                 (2,698)        (2,629)     (2,603) 
  Operating lease obligations                        (31)            (3)        - 
                                                ---------      ---------    --------- 
                                                  (5,494)        (5,638)      (5,261) 
                                                ---------      ---------    --------- 
 Net current assets                                   797            487          734 
                                                ---------      ---------    --------- 
 Non-current liabilities 
 Retirement benefit obligation                   (10,539)        (7,153)      (8,438) 
  Operating lease obligations                        (82)              -            - 
 Deferred tax liabilities                           (443)          (420)        (460) 
                                                ---------      ---------    --------- 
 
 Net (liabilities)/assets                         (1,450)          1,767          223 
                                                ---------      ---------    --------- 
 Capital and reserves 
 Share capital                                        250            250          250 
 Retained earnings                                (1,700)          1,517         (27) 
                                                ---------      ---------    --------- 
 Total equity                                     (1,450)          1,767          223 
                                                ---------      ---------    --------- 
 
 
 
 

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

Unaudited Consolidated Statement of Changes in Shareholders' Equity

 
                                               Share    Retained   Translation   Total equity 
                                             Capital    earnings       reserve        GBP'000 
                                             GBP'000     GBP'000       GBP'000 
 
 At 1 January 2018                               250         134             -            384 
 Total comprehensive income recognised 
  for the period                                   -       1,383             -          1,383 
 
                                           ---------   ---------     ---------      --------- 
 At 30 June 2018                                 250       1,517             -          1,767 
                                           ---------   ---------     ---------      --------- 
 
 At 1 January 2019                               250        (27)             -            223 
 Total comprehensive expense recognised 
  for the period                                   -     (1,673)             -        (1,673) 
                                           ---------   ---------     ---------      --------- 
 At 30 June 2019                                 250     (1,700)             -        (1,450) 
                                           ---------   ---------     ---------      --------- 
 

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 2019

 
                                                       Half year      Half year         Year 
                                                           ended          ended        ended 
                                                        30/06/19       30/06/18     31/12/18 
                                                     (Unaudited)    (Unaudited)    (Audited) 
                                             Note        GBP'000        GBP'000      GBP'000 
 Cash flows from operating activities 
 Cash generated from operations               4               32            499          893 
 UK corporation tax received                                   -              -         (60) 
 Interest paid                                              (23)           (26)         (45) 
                                                       ---------      ---------    --------- 
 Cash generated from operating activities                      9            473          788 
                                                       ---------      ---------    --------- 
 Cash flows from investing activities 
 Purchase of property, plant and 
  equipment                                                (158)          (115)        (358) 
 Purchase of intangible assets                                 -              -            - 
 Proceeds from sales of property, plant 
  and equipment                                                9             16           41 
                                                       ---------      ---------    --------- 
 Net cash outflow from investing 
  activities                                               (149)           (99)        (317) 
                                                       ---------      ---------    --------- 
 Cash flows from financing activities 
 
   Capital element of operating/finance 
   lease repayments                                         (15)           (35)       (37) 
 Proceeds from/(repayment of) borrowing                      526            (7)        (575) 
 (Decrease)/Increase in overdraft                          (432)             62          603 
                                                       ---------      ---------    --------- 
 Net cash generated from/(used in) 
  financing activities                                        79             20          (9) 
                                                       ---------      ---------    --------- 
 Net (decrease)/increase in cash and cash 
  equivalents                                               (61)            394          462 
 
 Opening cash and cash equivalents                         1,458            996          996 
 
                                                       ---------      ---------    --------- 
 Closing cash and cash equivalents                         1,397          1,390        1,458 
                                                       ---------      ---------    --------- 
 

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 2019

 
 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 2018 Annual Report and Accounts except 
          that the company has adopted IFRS 16 'Leases'. The comparative 
          figures for the year ended 31 December 2018 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, which did not contain an emphasis 
          of matter paragraph and did not contain any statement under Section 
          498 of the Companies Act 2006. The 2018 accounts have been delivered 
          to the Registrar of Companies. The Company has chosen not to 
          adopt IAS 34 'Interim Financial Statements'. 
 2.      Exceptional items                              Half year      Half year              Year 
                                                            ended          ended             ended 
                                                         30/06/19       30/06/18          31/12/18 
                                                      (Unaudited)    (Unaudited)         (Audited) 
                                                          GBP'000        GBP'000           GBP'000 
 
  GMP Equalisation                                              -              -               216 
  Asset impairment                                              -              -           675 
                                                       ----------      ---------         --------- 
                                                                -              -               891 
                                                       ----------      ---------         --------- 
         The asset impairment relates to the company's freehold property. 
 3.      Taxation                                       Half year      Half year              Year 
                                                            ended          ended             ended 
                                                         30/06/19       30/06/18          31/12/18 
                                                      (Unaudited)    (Unaudited)         (Audited) 
                                                          GBP'000        GBP'000           GBP'000 
 
  Current tax                                                   -             10                57 
  Deferred tax                                               (21)           (18)              (28) 
                                                        ---------      ---------         --------- 
                                                             (21)            (8)                29 
                                                        ---------      ---------         --------- 
         The effective tax rate is nil. 
 
   4.      Cash generated from operations 
                                                        Half year      Half year              Year 
                                                            ended          ended             ended 
                                                         30/06/19       30/06/18          31/12/18 
                                                      (Unaudited)    (Unaudited)         (Audited) 
                                                          GBP'000        GBP'000           GBP'000 
 
  (Loss)/profit before tax                                   (52)             76             (633) 
  Net finance costs                                           145            134               262 
  Depreciation and amortisation                               205            230               463 
  Asset impairment                                              -              -               675 
  Profit on sale of property, plant 
   and equipment                                              (4)            (3)              (16) 
  Exceptional charge for GMP equalisation                       -              -               216 
  (Increase)/decrease in inventories                        (329)             20             (124) 
  (Increase)/Decrease in trade and 
   other receivables                                         (27)          (555)             (214) 
  Increase/(Decrease) in trade and 
   other payables                                              94            597               264 
                                                        ---------      ---------         --------- 
  Cash generated from operating activities                     32            499               893 
                                                        ---------      ---------         --------- 
 
 
 
 

5. Availability of Interim Report

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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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