TIDMHSM
RNS Number : 9872D
Heath(Samuel) & Sons PLC
13 July 2016
HEATH (Samuel) & SONS PLC
13th JULY 2016
PRELIMINARY RESULTS FOR THE YEARED 31ST MARCH 2016
CHAIRMAN'S STATEMENT
It is pleasing to report a very much better year to March 31st,
2016.
The profit before tax was GBP947,000 (2015: GBP443,000). It has
to be said that this comparison is with a particularly
disappointing figure the year before. This applies also to the
operating profit of GBP1,156,000 (2015: GBP598,000) on revenue of
GBP12,584,000 (2015: GBP11,198,000).
Our customers insist on shorter delivery times and, as a result
of decisions to facilitate these, our inventories increased by
GBP164,000. Nevertheless our cash position improved by
GBP430,000.
Capital expenditure during the year was GBP422,000 and average
numbers of staff increased from 130 to 139.
During the year Mr Martin Legge relinquished the role of Senior
Non-executive director and this role has been taken on by Mr
Anthony Buttanshaw. Mr Legge remains on the Board.
Quite clearly, our pension fund deficit causes us some concern.
It has slightly improved to GBP6,101,000 (2015: GBP6,568,000). A
further cut in bank rate is the last thing we would want to worsen
the position. During the year payments were made of GBP311,000. In
view of the improved profit, this year's payment will be
GBP511,000.
We are recommending an increase of 10% on our final dividend
from 6.25p to 6.875p, making an overall increase in the dividend
for the year of 5.4%.
Now for the future. If there is one thing that is bad for our
type of business it is uncertainty. While I am writing this, there
is certainly plenty of that around, both in the U.K., our largest
market, and also in many of our other markets in the world. The
feedback from our customers tells us that this is already having
considerable effect on the level of new business activity that they
are experiencing. It takes much longer for us to feel the impact on
this decrease than it did when we were conducting most of our
business through the retail trade.
On 23(rd) June the UK voted in a referendum to leave the
European Union. All I can say is that during my considerable time
with the Company, we have experienced various extremes of
government policies and world situations. During these, we have
survived and sometimes prospered.
I can only add that for the first three months of the current
financial year we have not suffered. The next nine months could see
a very different picture.
Sam Heath
Chairman
13(th) July 2016
For further information:
Samuel Heath & Sons Plc
John Park - Company Secretary +44 (0)121 772 2303
Cairn Financial Advisers
LLP +44 (0)20 7148 7900
James Caithie/Jo Turner
CONSOLIDATED INCOME STATEMENT FOR THE YEARED 31 MARCH 2016
Note 2016 2015
GBP000 GBP000
Continuing operations
Revenue 4 12,584 11,198
Cost of sales (6,528) (5,873)
------- -------
Gross profit 6,056 5,325
Distribution costs (3,083) (3,006)
Administrative expenses (1,817) (1,721)
Operating profit 1,156 598
Finance income 360 430
Finance costs (569) (585)
Profit before taxation 947 443
Taxation 5 (178) (49)
Profit for the year 769 394
======= =======
Basic and diluted earnings
per ordinary share 7 30.3p 15.5p
======= =======
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2016 2015
GBP000 GBP000
Profit for year 769 394
Items that will be reclassified
to profit or loss:
Cash flow hedges (71) 58
------- -------
(71) 58
------- -------
Items that will not be
reclassified to profit
or loss:
Actuarial gain/(loss) on
defined benefit pension
scheme 411 (2,888)
Deferred taxation on actuarial
(gain)/loss (205) 578
206 (2,310)
------- -------
Total comprehensive income/(loss)
for the year 904 (1,858)
======= =======
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH
2016
2016 2015
GBP000 GBP000
Non current assets
Intangible assets 128 184
Property, plant and
equipment 1,581 1,475
Deferred tax asset 1,098 1,313
----------- --------
2,807 2,972
----------- --------
Current assets
Inventories 3,321 3,157
Trade and other receivables 2,153 2,085
Derivative financial
instruments - 56
Cash and cash equivalents 2,078 1,648
----------- --------
Total current assets 7,552 6,946
Total assets 10,359 9,918
----------- --------
Current liabilities
Trade and other payables (1,317) (1,126)
Derivative financial
instruments (15) -
Current tax payable (147) (72)
----------- --------
Total current liabilities (1,479) (1,198)
----------- --------
Non current liabilities
Retirement benefit
scheme (6,101) (6,568)
Deferred tax liability (79) (58)
----------- --------
Total non current liabilities (6,180) (6,626)
Total liabilities (7,659) (7,824)
Net assets 2,700 2,094
=========== ========
Equity
Called up share capital 254 254
Capital redemption
reserve 109 109
Retained earnings 2,337 1,731
----------- --------
Equity shareholders'
funds 2,700 2,094
=========== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31
MARCH 2016
Share Capital Retained Total
capital redemption earnings equity
reserve
GBP000 GBP000 GBP000 GBP000
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
-------- ------------- --------- -------
Equity dividends paid - - (298) (298)
-------- ------------- --------- -------
Profit for year - - 769 769
Other comprehensive
income for the year - - 135 135
-------- ------------- --------- -------
Total comprehensive
income for year - - 904 904
-------- ------------- --------- -------
Balance at 31st March
2016 254 109 2,337 2,700
CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEARED 31 MARCH
2016
Note 2016 2015
GBP000 GBP000
Cash flow from operating activities
Profit for the year before tax 947 443
Adjustments for:
Depreciation 313 357
Amortisation 56 61
Impairment of intangible assets - 135
Profit on disposal of property,
plant and equipment (7) (8)
Finance income (10) (11)
Defined benefit pension scheme
expenses 255 210
Contributions to defined benefit
pension scheme (311) (400)
Operating cash flow before movements
in working capital 1,243 787
Changes in working capital:
Increase in inventories (164) (258)
Increase in trade and other receivables (68) (266)
Increase/(decrease) in trade
and other payables 159 (39)
Cash generated from operations 1,170 224
Taxation paid (72) (106)
Net cash flow from operating
activities 1,098 118
Cash flows from investing activities
Payments to acquire property,
plant and equipment (390) (225)
Proceeds from the sale of property,
plant and equipment 10 70
Payments to acquire intangible
assets - (54)
Finance income 10 11
(370) (198)
Cash flows from financing activities
Interest paid - -
Dividends paid 6 (298) (298)
(298) (298)
Net increase/(decrease) in cash
and cash equivalents 430 (378)
Cash and cash equivalents at
beginning of period 1,648 2,026
Cash and cash equivalents at
end of period 2,078 1,648
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 2015. The adoption of the following IFRSs has not
impacted upon the financial statements:
IAS 19 - Employee Benefits - Amendment
Annual Improvements to IFRSs 2010-2012 Cycle
Annual Improvements to IFRSs 2011-2013 Cycle
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,
and are not expected to have a material impact on the group:
IAS 16 and IAS 38 - Clarification of Acceptable Methods of
Depreciation and Amortisation - effective 2017
IAS 27 - Equity Method in Separate Financial Statements -
Amendment - effective 2017
IAS 1 - Disclosure Initiative - effective 2017
Annual Improvements to IFRSs 2012-2014 Cycle - effective
2017
Amendments to IFRS 10, IFRS 12 and IAS 28 - Investment Entities
- Applying the consolidation exception - effective 2017
IAS 12 - Recognition of Deferred Tax - Amendment - effective
2018
IAS 7 - Disclosure Initiative - effective 2018
IFRS 9 - Financial Instruments - effective 2019
IFRS 15 - Revenue from Contracts with Customers - effective
2019
IFRS 16 - Leases - effective 2020
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 2016 and 2015 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 2016 have been
audited and approved, but have not yet been filed.
The Group's audited financial statements for the year ended 31
March 2016 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
2016 2015
GBP000 GBP000
Overseas 4,882 4,201
Home 7,702 6,997
-------- --------
12,584 11,198
-------- --------
5. Income taxes
2016 2015
GBP000 GBP000
Current taxes 147 62
Deferred taxes 31 (13)
-------- --------
Total income taxes 178 49
-------- --------
Corporation tax is calculated at 20% (2015: 20%) of the
estimated assessable profit for the year.
Tax reconciliation
2016 2015
GBP000 GBP000
Profit for the year 947 443
-------- --------
Corporation tax charge thereon
at 20% (2015: 20%) 190 89
Adjusted for the effects of:
Marginal relief - 1
Prior year adjustments 1 (10)
Research and development claim (15) (21)
Other adjustments 2 (10)
Total income taxes 178 49
-------- --------
Effective tax rate 18.8% 11.1%
-------- --------
6. Dividends
2016 2015
GBP 000 GBP 000
Final dividend for the year ended
31st March 2015 of 6.25 pence
per share (2014: 6.25 pence per
share) 158 158
Interim dividend for the year
ended 31st March 2016 of 5.50
pence per share (2015: 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 2016 of 6.875 pence per share
amounting to GBP174,000. 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 GBP769,000 (2015:
GBP394,000) by the average number of ordinary shares in issue
during the year being 2,534,322 (2015: 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 2016 Annual General Meeting of
the Company will be held at the registered office of the Company,
Leopold Street, Birmingham, on 12(th) August 2016 at 12.00 noon.
The final Ordinary Share dividend of 6.875 pence, if approved, will
be payable on 19(th) August 2016 to ordinary shareholders
registered at close of business on 22(nd) July 2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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July 13, 2016 02:00 ET (06:00 GMT)
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