TIDMSLNG

RNS Number : 6928Y

Slingsby(H.C.)Plc

10 May 2019

H C SLINGSBY PLC

("Slingsby" or the "Company" or the "Group")

Audited Results for the year ended 31 December 2018

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. We continue to seek to appoint additional new Non-Executive Directors. Although we have identified a number of highly suitable candidates, this is proving to be more protracted than anticipated due to the ongoing uncertainty regarding the pension fund commitments, as commented on further below.

Results

In the half year statement, I reported an operating unaudited profit of GBP0.21m on sales of GBP9.7m. The full year operating profit (before exceptional items) was GBP0.52m (2017: operating profit of GBP0.56m) on sales of GBP19.8m (2017: GBP19.2m). The Group increased sales by 3% and with gross margin stable, despite a rise in overheads this led to a profit before taxation and exceptional items of GBP0.26m (2017: profit of GBP0.23m).

However, during 2018, sales at ESE did not grow as previously expected. This led us to re-evaluate the value of goodwill held as an asset on the balance sheet following the acquisition. Following this re-evaluation, we decided to impair the value of goodwill from GBP2.4m to GBP1.7m leading to a non-cash exceptional charge of GBP675,000. Furthermore, we also recorded an exceptional charge of GBP216,000 for Guaranteed Minimum Pension obligations ("GMP") following the High Court ruling on this industry wide issue in October 2018. These non-cash charges are disappointing to report as they result in a loss before tax of GBP0.6m (2017: loss of GBP1m) which does not reflect the stable operating performance of the Group.

ESE Direct Limited ("ESE") contributed GBP6.5m of sales (2017: GBP6.8m) and profit before tax and management charges of GBP0.45m (2017: GBP0.44m). Sales fell due to large orders delivered in early 2017 not recurring in 2018 and to slower than forecast growth in web sales. Despite this, profitability was maintained due to a reduction in overheads and an improvement in the margin from actions to further integrate the ESE business with the Slingsby business.

Group earnings before interest, tax, depreciation and amortisation ("EBITDA") in the year ended 31 December 2018 were GBP1m (2017: GBP1m) before exceptional items. Net debt at 31 December 2018 was GBP1.1m (2017: GBP1.6m). This reduction in net debt was despite capital expenditure of GBP0.36m (2017: GBP0.1m).

Dividend

In view of the loss in 2018 and the uncertainty around the pension fund commitments, the Board is unable to recommend a final dividend for the year (2017: GBPnil).

Pension Scheme

We remain in discussion with the Trustee of the defined benefit pension scheme regarding a long term solution to the deficit. During 2018, the Company made no deficit reduction payments (2017: nil). At 31 December 2018, the pension scheme deficit decreased by GBP0.2m to GBP8.4m (2017: GBP8.6m). This improvement in the pension scheme position together with the pre-exceptional profit before taxation has mitigated the impact on the balance sheet of the goodwill impairment, such that Group net assets are GBP0.2m (2017: GBP0.4m).

As discussions regarding the pension position are ongoing and whilst during this time the Company is not paying deficit reduction contributions, there remains uncertainty as to the quantum and timing of future payments to the scheme.

Recent Trading

Group sales growth in Q1 of 2019 against the same period in 2018 was 5%. However, a reduction in Group margin and an increase in Group overheads has led to operating profit for the period being lower than in the prior year.

The market remains competitive and whilst we consider that the Group is on a stronger footing due to the changes in marketing and product strategy, synergies realised and investments in IT and equipment, we are cautious regarding the outlook. This is particularly the case due to uncertainty created by the decision to extend the Brexit process and its potential impact on the level of corporate activity. What is now the initial Brexit date was an event which the Group and a portion of its customer base had planned for and the impact of unwinding these plans may impact short term demand.

Finally, I would like to thank our staff across the Group for their efforts in 2018. Our sales performance to date in 2019 continues to provide grounds for optimism and the investments made during 2018 can be built upon to further enhance efficiency.

 
D.S.Slingsby 
Interim Executive 
 Chairman 
 
 
10 May 2019 
 

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                 Tel: 020 3328 5656 
 David Worlidge/Nicolas Chambers 
 

Audited Consolidated Income Statement for the year ended 31 December 2018

 
                                        Note         2018             2017 
                                                (Audited)        (Audited) 
                                                  GBP'000          GBP'000 
 Revenue                                           19,817           19,240 
                                               ----------       ---------- 
-------------------------------------  -----  -----------  --------------- 
 Operating profit before exceptional 
  items                                               520              557 
 Exceptional items                       2          (891)          (1,221) 
-------------------------------------  -----  -----------  --------------- 
 
 Operating loss                                     (371)            (664) 
 
 
 Finance costs                                      (262)            (331) 
                                               ----------       ---------- 
 Loss before taxation                               (633)            (995) 
 Taxation                                            (29)             (62) 
                                               ----------       ---------- 
 Loss for the year attributable to 
  owners of the parent                              (662)          (1,057) 
                                               ----------       ---------- 
 Basic and diluted loss per share        4        (66.2p)         (105.7p) 
                                               ----------       ---------- 
 

Audited Consolidated Statement of Comprehensive Income and Expense for the year ended 31 December 2018

 
                                                            2018            2017 
                                                       (Audited)       (Audited) 
                                                         GBP'000         GBP'000 
 Loss for the year                                         (662)         (1,057) 
 Items that will not be classified 
  to profit or loss: 
 Re-measurements of post-employment 
  benefit obligation                                         604           1,276 
 Movement in deferred tax relating 
  to retirement benefit obligation                       (103)             (246) 
 Items that may be subsequently reclassified 
  to profit or loss: 
 Exchange adjustment                                           -               8 
                                                      ----------      ---------- 
 Other comprehensive income                                  501         1,038 
                                                      ----------      ---------- 
 Total comprehensive expense for the year 
  attributable 
  to equity shareholders                                   (161)            (19) 
                                                        --------      ---------- 
 

Audited Consolidated Balance Sheet as at 31 December 2018

 
                                   Note              2018         2017 
                                                (Audited)    (Audited) 
                                                  GBP'000      GBP'000 
 Assets 
 Non-current assets 
 Property, plant and equipment                      4,578        4,472 
 Intangible assets                                    641          877 
 Goodwill                                           1,734        2,409 
 Deferred tax asset                                 1,434        1,464 
                                                 --------   ---------- 
                                                    8,387        9,222 
                                                 --------   ---------- 
 Current assets 
 Inventories                                        1,947        1,823 
 Trade and other receivables                        2,576        2,376 
 Derivative financial asset                            14            - 
 Cash and cash equivalents                          1,458          996 
                                                 --------   ---------- 
                                                    5,995        5,195 
                                                 --------   ---------- 
 Liabilities 
 Current liabilities 
 Trade and other payables                         (5,261)      (4,964) 
 Derivative financial liability                         -          (7) 
 Finance lease obligations                             -          (30) 
                                                ---------    --------- 
                                                  (5,261)      (5,001) 
                                                 --------   ---------- 
 Net current assets                                   734          194 
                                                 --------   ---------- 
 Non-current liabilities 
 Finance lease obligations                              -          (7) 
 Retirement benefit obligation      3             (8,438)      (8,610) 
 Deferred tax liabilities                           (460)        (415) 
                                                 --------   ---------- 
 Net assets                                           223          384 
                                                 --------   ---------- 
 Capital and reserves 
 Share capital                                        250          250 
 Retained earnings                                   (27)          134 
                                                 --------   ---------- 
 Total equity                                         223          384 
                                                 --------   ---------- 
 
 
 
 

Audited Consolidated Cash Flow Statement for the year ended 31 December 2018

 
                                                           2018               2017 
                                                      (Audited)          (Audited) 
                                                        GBP'000            GBP'000 
                                              Note 
 Cash flows from operating activities 
 Cash generated from operations                5            893                334 
 Interest payable                                          (45)               (70) 
 UK corporation tax (paid)/received                        (60)                 25 
                                                       --------           -------- 
 Cash generated from operating activities                   788                289 
                                                       --------           -------- 
 Cash flows from investing activities 
 Purchase of property, plant and equipment                (358)               (88) 
 Purchase of intangible assets                                -               (20) 
 Proceeds from sales of property, plant 
  and equipment                                              41                  9 
                                                       --------           -------- 
                                                          (317)               (99) 
 Net cash used in investing activities                 --------           -------- 
 
 Cash flows from financing activities 
 Capital element of finance lease payments                 (37)               (44) 
 Repayment of borrowings                                  (575)               (39) 
 Increase in overdraft                                      603                252 
                                                       --------           -------- 
 Net cash (used in)/generated from 
  financing activities                                      (9)                169 
                                                       --------           -------- 
 Net increase in cash and cash equivalents                  462                359 
 Opening cash and cash equivalents                          996                632 
 Exchange differences                                         -                  5 
                                                       --------           -------- 
 Closing cash and cash equivalents                        1,458               996 
                                                       --------           -------- 
 
 
 

Audited Consolidated Statement of Changes in Shareholders' Equity

 
                                              Share     Retained     Translation        Total 
                                            capital     earnings         reserve       equity 
                                            GBP'000      GBP'000         GBP'000      GBP'000 
 
 1 January 2017                                 250        131                22          403 
 Loss for the year                                -      (1,057)               -      (1,057) 
 Other comprehensive income 
  for the year                                    -      1,030            8            1,038 
 Transfer                                         -           30            (30)            - 
                                         ----------   ----------      ----------   ---------- 
 Total comprehensive income/(expense) 
  for the year                                    -            3            (22)         (19) 
                                         ----------   ----------      ----------   ---------- 
 1 January 2018                                 250          134              -           384 
 Loss for the year                                -        (662)               -        (662) 
 Other comprehensive income 
  for the year                                    -          501               -          501 
 
   Total comprehensive expense                         ---------        --------   ---------- 
   for the year                          ----------        (161)               -        (161) 
                                         ----------   ----------      ----------   ---------- 
 31 December 2018                               250         (27)               -          223 
                                         ----------   ----------      ----------   ---------- 
 
 
 

The translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign operations.

Notes to the Audited Results for the year ended 31 December 2018

 
 1.    The preliminary financial information does not constitute 
        statutory accounts within the meaning of Section 
        434 of the Companies Act 2006 for the financial years 
        ended 31 December 2018 and 31 December 2017, but 
        has been extracted from those accounts. The annual 
        accounts for the years ended 31 December 2017 and 
        31 December 2018 have been prepared in accordance 
        with International Financial Reporting Standards 
        ("IFRS") and IFRIC interpretations as adopted by 
        the EU and with those parts of the Companies Act 
        2006 applicable to companies reporting under IFRS. 
        The financial information included in this preliminary 
        announcement does not include all the disclosures 
        required in accounts prepared in accordance with 
        IFRS and accordingly it does not itself comply with 
        IFRS. 
 
        With the exception of the adoption of IFRS 15 and 
        IFRS 9, the accounting policies used in the preparation 
        of this preliminary announcement have remained unchanged 
        from those set out in the statutory accounts for 
        the year ended 31 December 2017. They are also consistent 
        with those in the full accounts for the year ended 
        31 December 2018 which have yet to be published. 
        The adoption of IFRS 15 and IFRS 9 had no material 
        effect on the reported results in either period. 
 
        Statutory accounts for 2017 have been delivered to 
        the Registrar of Companies and those for the financial 
        year ended 31 December 2018 will be delivered following 
        the Company's annual general meeting. The auditors 
        have reported on the accounts for the years ended 
        31 December 2017 and 31 December 2018 and their opinions 
        were unqualified, did not include any matters to 
        which the auditor drew attention by way of emphasis 
        and did not contain statements under section 498(2) 
        or (3) of the Companies Act 2006. 
 2.    Exceptional item                                    2018           2017 
                                                      (Audited)      (Audited) 
                                                        GBP'000        GBP'000 
       GMP equalisation                                   (216)              - 
  Asset impairment                                        (675)        (1,221) 
                                                   ------------   ------------ 
                                                          (891)        (1,221) 
                                                   ------------   ------------ 
 
 3.    Retirement benefit obligation 
                                                           2018           2017 
                                                      (Audited)      (Audited) 
                                                        GBP'000        GBP'000 
 
  Present value of funded obligation                     25,321         26,666 
  Fair value of scheme assets                          (16,883)       (18,056) 
                                                   ------------   ------------ 
  Net liability in balance sheet                          8,438          8,610 
                                                   ------------   ------------ 
 
 4.    Loss per share 
 
        Basic loss per share is based upon losses of GBP662,000 
        (2017: GBP1,057,000) and on 1,000,000 (2017: 1,000,000) 
        ordinary shares in issue during the year. 
 
        There is no difference between basic loss per share 
        and diluted loss per share for both years as there 
        are no potentially dilutive shares in issue. 
 5.    Cash generated from/(used in) operating 
        activities 
                                                           2018           2017 
                                                      (Audited)      (Audited) 
                                                        GBP'000        GBP'000 
  Loss before tax                                         (633)          (995) 
  Net finance costs                                         262            331 
  Depreciation and amortisation                             463            480 
  Exceptional impairment provision                          675          1,221 
  Profit on sale of property, plant and 
   equipment                                               (16)            (4) 
       Exceptional charge for GMP equalisation              216              - 
  Increase in inventories                                 (124)           (12) 
  Decrease/(increase) in trade and other 
   receivables                                            (214)            143 
  (Decrease)/increase in trade and other 
   payables                                                 264          (830) 
                                                   ------------   ------------ 
  Cash generated from operating activities                  893            334 
                                                   ------------   ------------ 
 6.    Dividends 
  No dividends were paid or declared during 2017 or 
   2018. 
 7.    Availability of Report and Accounts 
  The financial statements for the year ended 31 December 
   2018, containing a notice of Annual General Meeting, 
   will be posted to shareholders shortly. 
 

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

FR AMMMTMBJBBRL

(END) Dow Jones Newswires

May 10, 2019 06:45 ET (10:45 GMT)

Slingsby (h.c.) (LSE:SLNG)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024 Haga Click aquí para más Gráficas Slingsby (h.c.).
Slingsby (h.c.) (LSE:SLNG)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024 Haga Click aquí para más Gráficas Slingsby (h.c.).