TIDMHSM
RNS Number : 0334T
Heath(Samuel) & Sons PLC
15 July 2015
HEATH (Samuel) & SONS PLC
15th JULY 2015
PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST MARCH 2015
CHAIRMAN'S STATEMENT
After the disappointing first half of the year, it is pleasing
to report that, as a result of a very much better second half,
profit before taxation for the year was GBP443,000 (2014:
GBP610,000) on sales of GBP11,198,000 (2014: GBP10,979,000 ).
It is very difficult for us to explain the differences in our
market places in the two halves, which caused the increase in
sales. It is not difficult to explain the increased profitability,
which was to a large extent a result of the drop in the value of
the Pound against the Dollar. We had also bought forward Euros to
protect our position in those markets, where of course the Pound
moved the other way.
These profits would have been considerably larger if we had not
decided to write off the Research and Development costs of
GBP135,000 for a further new door closer. In this field we are
always in areas of new technology, without any guarantee of a
successful outcome, and in these circumstances it is unlikely that
we will decide to capitalise any further R&D in this type of
area. As well as R&D, we invested GBP82,000 to improve our IT
systems. We also made the decision to further increase our levels
of inventory for some component parts. Although this clearly has
some effect on cash flow, it is necessary to retain the speed of
delivery our customers demand in the modern age.
At the end of the last financial trading period we finally lost
one of our larger British retail High Street outlets' business.
This had been diminishing for some years and we had been planning
for this outcome for some time as well. I believe that I am correct
in saying that in the department we supplied, they do not now stock
any item made in England. The vast majority of their products come
from China and Taiwan. We are hoping to replace half of this
turnover, which was generated on the internet, with other more
profitable business from existing customers.
What then for the future? The year has started off reasonably
well as far as orders are concerned, but with nothing spectacularly
above our budget. Our new products, particularly in the tap field,
are proving to be the drivers of our advance, but it has to be said
that some of our older product ranges in other areas are finding it
difficult to make progress. The Board has recently sanctioned the
purchase of new plant to facilitate the increase in our hardware
offer. In September we are launching another completely new range
of taps and bathroom accessories working with another very old
company founded in 1750, Royal Crown Derby. The range is in fact to
be called the Royal Crown Derby Collection.
Because so many of our traditional markets are finding life very
difficult, we are working increasingly hard in the new emerging
markets. Unfortunately even in those, as is widely publicised, not
everything is easy. The UK is still of course the most important
area for us. We sell to the wealthier part of the population and it
is important that they feel confident to spend money. The election
result would appear to have only helped this position.
Along with just about everyone else, our pension fund valuation
continues to worsen. Although the scheme's assets performed better
than expected, this was more than offset by falls in bond yields
over the year. We are continuing to pay considerable money (this
year GBP400,000) into it.
Despite this our balance sheet remains relatively strong and
remains debt free, we therefore propose to pay a same again
dividend of 6.25p (2014: 6.25p), making a total of 11.75p for the
year (2014: 11.75p).
Sam Heath
Chairman
15(th) July 2015
For further information:
Samuel Heath & Sons Plc
John Park - Company Secretary 0121 772 2303
Zeus Capital Limited 0161 831 1512
Ross Andrews/Jamie Peel
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH
2015
Note 2015 2014
GBP000 GBP000
Continuing operations
Revenue 4 11,198 10,979
Cost of sales (5,873) (5,647)
------- -------
Gross profit 5,325 5,332
Distribution costs (3,006) (2,958)
Administrative expenses (1,721) (1,676)
Operating profit 598 698
Gain on sale of financial
assets - 58
Finance income 430 433
Finance costs (585) (579)
Profit before taxation 443 610
Taxation 5 (49) (167)
Profit for the year 394 443
======= =======
Basic and diluted earnings
per ordinary share 7 15.5p 17.5p
======= =======
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2015 2014
GBP000 GBP000
Profit for year 394 443
Items that will be reclassified
to profit or loss:
Loss on available for sales
financial assets - (115)
Cash flow hedges 58 1
------- -------
58 (114)
------- -------
Items that will not be
reclassified to profit
or loss:
Actuarial (loss)/gain on
defined benefit pension
scheme (2,888) 294
Deferred taxation on actuarial
loss/(gain) 578 (187)
(2,310) 107
------- -------
Total comprehensive (loss)/income
for the year (1,858) 436
======= =======
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH
2015
2015 2014
GBP000 GBP000
Non current assets
Intangible assets 184 326
Property, plant and
equipment 1,475 1,668
Deferred tax asset 1,313 774
------- -------
2,972 2,768
------- -------
Current assets
Inventories 3,157 2,899
Trade and other receivables 2,085 1,819
Derivative financial
instruments 56 -
Cash and cash equivalents 1,648 2,026
------- -------
Total current assets 6,946 6,744
Total assets 9,918 9,512
------- -------
Current liabilities
Trade and other payables (1,126) (1,164)
Derivative financial
instruments - (2)
Current tax payable (72) (116)
------- -------
Total current liabilities (1,198) (1,282)
------- -------
Non current liabilities
Retirement benefit
scheme (6,568) (3,870)
Deferred tax liability (58) (110)
------- -------
Total non current liabilities (6,626) (3,980)
Total liabilities (7,824) (5,262)
Net assets 2,094 4,250
======= =======
Equity
Called up share capital 254 254
Capital redemption
reserve 109 109
Retained earnings 1,731 3,887
------- -------
Equity shareholders'
funds 2,094 4,250
======= =======
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
31 MARCH 2015
Share Capital Retained Total
capital redemption earnings equity
reserve
GBP000 GBP000 GBP000 GBP000
Balance at 31st March
2013 254 109 3,749 4,112
-------- ----------- --------- -------
Equity dividends paid - - (298) (298)
-------- ----------- --------- -------
Profit for year - - 443 443
Other comprehensive
loss for the year - - (7) (7)
-------- ----------- --------- -------
Total comprehensive
income for year - - 436 436
-------- ----------- --------- -------
Balance at 31st March
2014 254 109 3,887 4,250
-------- ----------- --------- -------
Equity dividends paid - - (298) (298)
-------- ----------- --------- -------
Profit for year - - 394 394
Other comprehensive
loss for the year - - (2,252) (2,252)
-------- ----------- --------- -------
Total comprehensive
loss for year - - (1,858) (1,858)
-------- ----------- --------- -------
Balance at 31st March
2015 254 109 1,731 2,094
CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 MARCH
2015
Note 2015 2014
GBP000 GBP000
Cash flow from operating activities
Profit for the year before tax 443 610
Adjustments for:
Depreciation 357 375
Amortisation 61 50
Impairment of intangible assets 135 -
Profit on disposal of property,
plant and equipment (8) (13)
Profit on disposal of available
for sale financial assets - (58)
Finance income (11) (37)
Finance costs - 1
Decrease in post-employment benefit
obligations (190) (126)
Operating cash flow before movements
in working capital 787 802
Changes in working capital:
Increase in inventories (258) (168)
(Increase)/decrease in trade
and other receivables (266) 75
(Decrease)/increase in trade
and other payables (39) 214
Cash generated from operations 224 923
Taxation paid (106) (15)
Net cash flow from operating
activities 118 908
Cash flows from investing activities
Payments to acquire property,
plant and equipment (225) (221)
Proceeds from the sale of property,
plant and equipment 70 29
Payments to acquire intangible
assets (54) (6)
Payments to acquire available
for sale financial assets - (57)
Proceeds from the sale of available
for sale financial assets - 1,400
Finance income 11 53
(198) 1,198
Cash flows from financing activities
Interest paid - (1)
Dividends paid 6 (298) (298)
(298) (299)
Net (decrease)/increase in cash
and cash equivalents (378) 1,807
Cash and cash equivalents at
beginning of period 2,026 219
Cash and cash equivalents at
end of period 1,648 2,026
1 Adoption of new and revised Standards
The Group has adopted all of the new and revised Standards and
Interpretations issued by the International Accounting Standards
Board (IASB) and the International Financial Reporting
Interpretations Committee (IFRIC) of the IASB that are relevant to
its operations and effective for accounting periods beginning on
1st April 2014. The adoption of the following IFRSs has not
impacted upon the financial statements:
IAS 32 - Financial Instruments - Presentation - Amendment
IAS 36 - Impairment of Assets - Amendment
At the date of authorisation of these financial statements, the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
IAS 19 - Employee Benefits - Amendment - effective 2016
IFRS 2 - Share Based Payments - effective 2016
IFRS 8 - Operating Segments - effective 2016
IFRS 9 - Financial Instruments - effective 2019
IFRS 15 - Revenue from Contracts with Customers - effective
2018
IAS 1 - Disclosure Initiative - effective 2017
IAS 16 and IAS 38 - Clarification of Acceptable Methods of
Depreciation and Amortisation - effective 2017
IAS 27 - Equity Method in Separate Financial Statements -
effective 2017
IFRS 7 - Financial Instruments: Disclosure - effective 2017
IAS 34 - Interim Financial Reporting - effective 2017
These Standards and Interpretations are not expected to have a
significant impact on the Group's financial statements.
2 Accounting policies
Basis of preparation of preliminary financial information
The financial statements, upon which this financial information
is based, have been prepared using accounting policies consistent
with International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretation Committee (IFRIC)
Interpretation as adopted by the European Union and the
requirements of the Companies Act applicable to companies reporting
under IFRS.
In accordance with Section 435 of the Companies Act 2006, The
Group confirms that the financial information for the years ended
31 March 2015 and 2014 are derived from the Group's audited
financial statements and that these are not statutory accounts and,
as such, do not contain all information required to be disclosed in
the financial statements prepared in accordance with IFRS. The
statutory accounts for the year ended 31 March 2015 have been
audited and approved, but have not yet been filed.
The Group's audited financial statements for the year ended 31
March 2015 received an unqualified audit opinion and the auditor's
report contained no statement under section 498(2) or 498(3) of the
Companies Act 2006.
The Annual Report and Financial Statements will be posted to
shareholders shortly and thereafter will be available from the
Company's registered office, and from the Company's website
www.samuel-heath.com.
3 Critical accounting and key sources of estimation
Critical judgements in applying the entity's accounting
policies
In the process of applying the entity's accounting policies the
directors have made the following judgements that have the most
significant effect on the amounts recognised in the financial
statements.
Income taxes
The Group is subject to income taxes in the United Kingdom.
Judgment is required in determining the provision for income taxes.
There are many transactions and calculations for which the ultimate
tax determination is uncertain during the ordinary course of
business. The Group recognises liabilities for anticipated tax
audit issues based on estimates of whether additional taxes will be
due. Where the final tax outcome of these matters is different from
the amounts that were initially recorded, such differences will
impact the income tax and deferred tax provisions in the period in
which such determination is made.
The recoverable amounts of the Group's deferred tax assets have
been determined based on the Board's estimates of future taxable
profits and income and tax rates.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources
of estimation uncertainty at the balance sheet date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are discussed below.
Valuation of intangible assets
Intangible assets are initially valued at their cost and then
evaluated periodically for impairment. For purposes of valuation an
intangible asset is considered impaired if its carrying value is
less than the expected net cash flow from the asset.
Valuation of inventories
Determining the valuation of inventories requires an estimation
of the obsolescence provision required to write down items to their
realisable value.
Retirement benefit scheme deficit
The valuation of expected returns on assets and the present
value of the liabilities of the scheme are determined by
assumptions and estimates made by the directors based on the
current information to hand. Therefore amounts are open to
fluctuations in the future due to unforeseen changes or additional
factors that come to light following the year end.
4. Sales revenue by geographically market
2015 2014
GBP000 GBP000
Overseas 4,201 4,246
Home 6,997 6,733
---------- --------
11,198 10,979
---------- --------
5. Income taxes
2015 2014
GBP000 GBP000
Current taxes 62 116
Deferred taxes (13) 51
-------- --------
Total income taxes 49 167
-------- --------
Corporation tax is calculated at 20% (2014: 20%) of the
estimated assessable profit for the year.
Tax reconciliation
2015 2014
GBP000 GBP000
Profit for the year 443 610
-------- --------
Corporation tax charge thereon
at 20% (2014: 20%) 89 122
Adjusted for the effects of:
Marginal relief 1 9
Prior year adjustments (10) 69
Research and development claim (21) (1)
Loan relationships - (15)
Other adjustments (10) (17)
Total income taxes 49 167
-------- --------
Effective tax rate 11.1% 27.4%
-------- --------
6. Dividends
2015 2014
GBP 000 GBP 000
Final dividend for the year ended
31st March 2014 of 6.25 pence
per share (2013: 6.25 pence per
share) 158 158
Interim dividend for the year
ended 31st March 2015 of 5.50
pence per share (2014: 5.50 pence
per share) 140 140
298 298
In addition to the dividends paid during the year the directors
are recommending a final dividend for 2015 of 6.25 pence per share
amounting to GBP158,000. The proposed final dividend is subject to
approval at the Annual General Meeting (see note 8) and has not
been included as a liability in these accounts.
7. Earnings per share
The basic and diluted earnings per share are calculated by
dividing the relevant profit after taxation of GBP394,000 (2014:
GBP443,000) by the average number of ordinary shares in issue
during the year being 2,534,322 (2014: 2,534,322). The number of
shares used in the calculation is the same for both basic and
diluted earnings.
8. Notice of annual general meeting
Notice is hereby given that the 2015 Annual General Meeting of
the Company will be held at the registered office of the Company,
Leopold Street, Birmingham, on 14(th) August 2015 at 12.00 noon.
The final Ordinary Share dividend of 6.25 pence, if approved, will
be payable on 21st August 2015 to ordinary shareholders registered
at close of business on 24th July 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
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