TIDMHSM
RNS Number : 0331T
Heath(Samuel) & Sons PLC
20 July 2022
HEATH (SAMUEL) & SONS PLC
20th JULY 2022
PRELIMINARY RESULTS FOR THE YEARED 31st MARCH 2022 AND NOTICE OF
AGM
CHAIR'S STATEMENT
Our financial performance clearly indicates that we have had a
very successful year. The improvements in the first half, following
the destabilising effects of Covid-19 and lockdowns, have continued
throughout the second half. However, this was achieved with
unsustainably low costs and it is therefore important that we
manage future profit expectations as I explain further on.
Revenue for the year of GBP14.015m represented a 21% increase
compared to last year (2021: GBP11.539m). Operating profit for the
year was GBP2.152m (2021: GBP1.123m before exceptional items) and
profit before tax GBP2.030m (2021: GBP0.942m before exceptional
costs). In 2021, GBP322k exceptional costs relating to GMP
equalisation and re-organisation were charged, after which profit
before tax was GBP620k.
As 2021 was affected by Covid-19 and lockdowns, it is
instructive to compare 2022 with the 2020 year, when revenues were
at a similar level (2020: GBP13.887m). The increase in operating
profit over 2020 was GBP618k (2020: GBP1.534m), but this must be
viewed in the context of a GBP626k reduction in selling and
distribution costs, which was in large part involuntary and caused
by reductions in sales staff, the absence of trade shows to attend
and lower marketing spend. These costs have now been reinstated as
being essential for the future growth of the business.
Nevertheless, the overall performance was excellent, reflecting the
input provided by our very competent and skilled executive
management team, supported by a loyal hard-working workforce.
Our sales profile during the year was varied, influenced in part
by Covid patterns. Following the end of lockdown in June 2021, we
saw a significant jump in orders in July, as customer projects put
on hold during lockdown started back up. The order flow then
reduced through much of the remainder of 2021, picking up again in
December and continuing through the quarter to March 2022. It has
remained strong into the quarter to June 2022. Trade shows have
begun to take place again, and we have attended shows in the UK,
North America, and Europe, which should help support interest in
our products and the order stream.
So, to our forecast for the trading year to 31 March 2023. I can
report that we are experiencing continued momentum in sales during
our first financial quarter, both at home and abroad, in
particularly overseas. However, compared to 2021/2022, we are also
experiencing some significant cost increases. As already mentioned,
selling and marketing costs have increased and additionally,
product development is an area of increased focus with emphasis on
new product ranges. Increases in global energy costs, freight
costs, and commodity prices are all impinging on margins. Supply
chain disruption is an area where we have particular concerns, so
we have been taking action to mitigate the effects, such as
building longer lead times into our inventory and committing to raw
material supplies much further in advance. Fortunately, we do have
an advantage in that we manufacture a high proportion of our
product inhouse, compared to our competitors.
The outturn for the year to 31(st) March 2023 is clearly
dependent on our markets continuing to hold up, which is by no
means certain in the current climate, but also on avoiding
potentially serious disruption in supplies and being able to
mitigate or pass on escalating costs increases.
In conclusion, whilst we have started the year well there are a
number of headwinds which makes the Board cautious about the
outturn for the year as a whole.
In view of these very strong results, we have no hesitation in
recommending an increase in the final dividend to 7.5625p, which
will be paid on 2nd September 2022 to shareholders registered as at
27th July 2022.
AR Buttanshaw
Chair
19th July 2022
This announcement contains inside information for the purposes
of the UK Market Abuse Regulation and the Directors of the Company
are responsible for the release of this announcement.
For further information:
Samuel Heath & Sons Plc
Simon Latham - Company Secretary +44 (0)121 766 4200
Cairn Financial Advisers LLP +44 (0)20 7213 0880
James Caithie/Jo Turner
________________________ CONSOLIDATED INCOME
STATEMENT_________________________
for the year ended 31st March 2022
2022 2021
Note
GBP000 GBP000
Revenue 3 14,015 11,539
Cost of sales (6,975) (6,568)
Gross profit 7,040 4,971
Selling and distribution costs (2,917) (2,469)
Administrative expenses excluding
exceptional items (1,986) (2,004)
Other operating income 15 625
Operating profit before exceptional
items 2,152 1,123
Exceptional items - GMP equalisation 7 - (70)
Reorganisation 7 - (252)
Operating profit 2,152 801
Finance income 10 4
Finance cost (132) (185)
Profit before taxation 2,030 620
Taxation 4 (558) (227)
Profit for the year attributable
to owners of the parent company 1,472 393
Basic and diluted earnings per
ordinary share 6 58.1p 15.5p
============ ========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31st March 2022
2022 2021
GBP000 GBP000
Profit for the year 1,472 393
Items that will not be reclassified
to profit or loss:
Actuarial gain/(loss) on defined
benefit pension scheme 693 (542)
Deferred taxation on actuarial
gain/(loss) (173) 103
Deferred tax rate change 381 -
901 (439)
Total comprehensive income for
the year 2,373 (46)
------------ --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31st MARCH
2022
2022 2021
GBP000 GBP000
Non-current assets
Intangible assets 442 186
Property, plant and equipment 3,670 3,413
Deferred tax asset 425 741
--------- --------
4,537 4,340
Current assets
Inventories 3,916 3,682
Trade and other receivables 1,836 2,108
Current Tax receivable - 25
Cash and cash equivalents 4,410 3,682
--------- --------
10,162 9,497
Total assets 14,699 13,837
Current liabilities
Trade and other payables (1,982) (1,769)
Lease liabilities (62) (55)
Current tax payable (13) -
--------- --------
(2,057) (1,824)
Non-current liabilities
Lease liabilities (129) -
Retirement benefit scheme (4,837) (6,396)
(4,966) (6,396)
Total liabilities (7,023) (8,220)
Net assets 7,676 5,617
--------- --------
Equity
Called up share capital 254 254
Capital redemption reserve 109 109
Revaluation reserve 1,186 1,267
Retained earnings 6,127 3,987
Equity shareholders' funds 7,676 5,617
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEARED 31st
MARCH 2021
Share Capital Revaluation Retained Total
capital redemption reserve earnings Equity
reserve
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31st March 2020 254 109 1,349 3,951 5,663
-------- ----------- ----------- --------- -------
Profit for the year - - - 393 393
Reclassification of depreciation
on revaluation - - (82) 82 -
Other comprehensive income
for the year - - - (439) (439)
-------- ----------- ----------- --------- -------
Total comprehensive income
for the year - - (82) 36 (46)
Balance at 31st March 2021 254 109 1,267 3,987 5,617
Total transactions with owners
Equity dividends paid - - - (314) (314)
-------- ----------- ----------- --------- -------
Profit for the year - - - 1,472 1,472
Reclassification of depreciation
on revaluation - - (81) 81 -
Other comprehensive income
for the year - - - 901 901
-------- ----------- ----------- --------- -------
Total comprehensive income
for the year - - (81) 2,454 2,373
Balance at 31st March 2022 254 109 1,186 6,127 7,676
-------- ----------- ----------- --------- -------
CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEARED 31st MARCH
2021
2022 2021
GBP000 GBP000
Cash flow from operating activities
Profit for the year before taxation 2,030 620
Adjustments for:
Depreciation 359 370
Amortisation 50 45
Loss/(profit) on disposal of property, plant
and equipment 4 (41)
Net finance (income)/costs (12) 21
Defined benefit pension scheme expenses 170 280
Contributions to defined benefit pension scheme (1,036) (1,000)
Operating cash flow before movements in working
capital 1,565 295
Changes in working capital:
(Increase)/decrease in inventories (234) 548
Decrease in trade and other receivables 272 262
Increase/(decrease) in trade and other payables 195 (43)
Cash generated from operations 1,798 1,062
Taxation paid - (109)
Net cash from operating activities 1,798 953
Cash flows from investing activities
Payments to acquire property, plant and equipment (444) (169)
Proceeds from the sale of property, plant and
equipment 11 63
Payments to acquire intangible assets (306) (79)
Finance income/(costs) 12 (21)
(727) (206)
Cash flows from financing activities
Lease payments (46) (59)
Dividends paid (314) -
CBILS loan received 950 -
CBILS loan repaid (950) -
(360) (59)
Net increase in cash and cash equivalents 711 688
Cash and cash equivalents at beginning of year 3,682 3,016
Effect of exchange rate differences on cash
and cash equivalents 17 (22)
Cash and cash equivalents at end of year 4,410 3,682
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. Basis of preparation
The Group has prepared its consolidated financial statements for
the year ended 31st March 2022 in accordance with UK-adopted
International Accounting Standards. The accounting policies applied
are consistent with those included in the financial statements of
the Group for the year ended 31st March 2021.
The financial information contained in this preliminary
announcement does not constitute the Group's statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
The annual report and financial statements for the year ended
31st March 2022 were approved by the Board of Directors on 19th
July 2022 along with this preliminary announcement. The annual
report and financial statements will be delivered to the Registrar
of Companies after the Annual General Meeting.
The statutory accounts of Samuel Heath & Sons PLC for the
year ended 31 March 2021 have been delivered to the Registrar of
Companies. The auditor's reports on the statutory accounts for the
years ended 31st March 2022 and 31st March 2021 were unqualified
and did not contain a statement under section 498 of the Companies
Act 2006.
2. Critical accounting and key sources of estimation
Critical accounting estimates, assumptions and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates and assumptions will, by
definition, seldom equal the related actual results. The Group has
evaluated the estimates and assumptions that have been made in
relation to the carrying amounts of assets and liabilities in these
financial statements.
The key accounting judgements and sources of estimation
uncertainty with a significant risk of causing a material
adjustment to assets and liabilities in the next 12 months include
the following:
Pensions - movements in equity markets, interest rates and life
expectancy could materially affect the level of surpluses and
deficits in the defined benefit pension scheme.
Valuation of property, plant and equipment - the Group reviews
the value, useful economic lives and residual values attributed to
assets on an on-going basis to ensure they are appropriate. Changes
in market value, economic lives or residual values could impact the
carrying value and charges to the income statement in future
periods.
Provisions - using information available at the balance sheet
date, the Directors make judgements based on experience on the
level of provision required against assets, including inventory
where the provision is reviewed against expected future stock
usage, the stock provision at year end was GBP2.211m (2021:
GBP2.137m).
Deferred tax assets - deferred tax assets are recognised to the
extent that it is probable that taxable profit will be available
against which the losses can be utilised. Management judgement is
required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and level of future
taxable profits.
3. Revenue by geographic
market
2022 2021
GBP000 GBP000
Overseas 6,687 5,132
UK 7,328 6,407
14,015 11,539
------- -------
4. Income taxes
2022 2021
GBP000 GBP000
Current taxes:
Current year 32 (22)
Adjustments in respect of prior periods 2 -
-------- --------
34 (22)
Deferred taxes:
Origination and reversal of temporary differences 348 139
Change in tax rate 152 -
Adjustments in respect of prior periods 24 110
-------- --------
524 249
Total income taxes 558 227
-------- --------
Corporation tax is calculated at 19% (2021: 19%) of the
estimated assessable profit for the year.
Tax reconciliation
2022 2021
GBP000 GBP000
Profit for the year 2,030 620
-------- -------
Corporation tax charge thereon at 19% (2021:
19%) 386 118
Adjusted for the effects of:
Prior year adjustments 26 110
Research and development claim (68) -
Changes in tax rates 152 -
Other adjustments 62 (1)
Total income taxes 558 227
-------- -------
5. Dividends
2022 2021
GBP000 GBP000
Final dividend for the year ended 31st
March 2021 of 6.875 pence per share (2020:
nil pence per share) 175 -
Interim dividend for the year ended 31st
March 2022 of 5.50 pence per share (2021:
nil pence per share) 139 -
314 -
------ ------
The directors are recommending a final dividend of 7.5625 pence
per share (2021: 6.875 pence per share) which will be proposed as a
resolution at the forthcoming Annual General Meeting. An interim
dividend was paid during the year of 5.5 pence per share (2021: nil
pence per share).
6. Earnings per share
The basic and diluted earnings per share are calculated by
dividing the relevant profit after taxation of GBP1,472,000 (2021:
GBP393,000) by the average number of ordinary shares in issue
during the year being 2,534,322 (2021: 2,534,322). The number of
shares used in the calculation is the same for both basic and
diluted earnings.
7. Exceptional items
There were no exceptional costs for 2022.
In November 2020, there was a further High Court ruling in
relation to guaranteed minimum pension benefits. The latest ruling
states that trustees of defined benefit schemes that provided
guaranteed minimum payments should revisit, and where necessary,
top-up historic cash equivalent transfer values that were
calculated on an unequalised basis if an affected member makes a
successful claim. The impact of the ruling implies that pension
scheme trustees are responsible for equalising the guaranteed
minimum payments for members who transferred out of its defined
benefit pension scheme. This resulted in an increase in the
liabilities of the scheme of GBP70,000 in 2021, which was
recognised in the results as a past service cost in exceptional
items.
Included within exceptional costs for 2021 are the costs of
restructuring the business to size itself better. Costs for
exceptional redundancy amounted to nil (2021: GBP252,000).
8. Notice of annual general meeting
Notice is hereby given that the 2022 Annual General Meeting of
the Company will be held at the registered office of the Company,
Leopold Street, Birmingham, on 25(th) August 2022 at 12.00
noon.
9. Posting of accounts
The report and accounts are being posted to shareholders today
where requested, and are available on the Company's website, at
www.samuel-heath.com/investor-relations .
Note:
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts but rather are based on the Company's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not a guarantee of future performance and are
subject to known and unknown risks, uncertainties, and other
factors, some of which are beyond the Company's control, are
difficult to predict, and could cause actual results to differ
materially from those expressed or forecasted in the
forward-looking statements. The Company cautions security holders
and prospective security holders not to place undue reliance on
these forward-looking statements, which reflect the view of the
Company only as of the date of this announcement. The
forward-looking statements made in this announcement relate only to
events as of the date on which the statements are made. The Company
will not undertake any obligation to release publicly any revisions
or updates to these forward-looking statements to reflect events,
circumstances, or unanticipated events occurring after the date of
this announcement except as required by law or by any appropriate
regulatory authority.
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END
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July 20, 2022 02:00 ET (06:00 GMT)
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