TIDMPHSC 
 
29 July 2021 
 
                                   PHSC PLC 
                    ("PHSC", the "Company" or the "Group") 
 
                Final Results for the year ended 31 March 2021 
 
      Availability of Annual Report and Notice of Annual General Meeting 
 
PHSC (AIM: PHSC), a leading provider of health, safety, hygiene and 
environmental consultancy services and security solutions to the public and 
private sectors, announces its audited results for the financial year ended 31 
March 2021. 
 
Financial Highlights 
 
.    EBITDA of £0.505m, almost double the £0.255m achieved last year 
 
.    Statutory profit after tax of £0.087m compared with a loss of £0.015m last 
year 
 
.    Group sales revenue of £3.289m compared with £4.438m last year 
 
.    Income augmented to £3.73m by £0.441m of pandemic-related government grant 
funding 
 
.    Cash reserves of £1.237m at year end compared to £0.756m last year 
 
.    Write-down of £0.250m due to impaired goodwill versus a write-down of £ 
0.200m last year 
 
.    Group net assets declined to £4.919m compared to £4.978m last year 
 
.    Earnings per share of 0.60p compared with a loss of 0.11p per share last 
year 
 
.    Successful post-year end share buyback programme completed ahead of 
schedule 
 
.    Final dividend of 0.5p proposed, making a total of 1.0p for the year 
matching last year's total 
 
                                                       31.3.21        31.3.20 
 
                                                             £              £ 
 
Profit before tax                                      189,988          4,999 
 
Less: interest received                                         (999)   (1,990) 
 
Add: depreciation                                       65,619         52,194 
 
Add: impairment B2BSG Solutions Limited goodwill       200,000        200,000 
 
Add: impairment RSA Environmental Health Limited        50,000              - 
goodwill 
 
Underlying EBITDA*                                     504,608        255,203 
 
*  Underlying EBITDA is calculated as earnings before interest, tax, 
depreciation, impairment charges and non-recurring costs. This is used by the 
board as a measure of underlying trading and has been provided to assist 
shareholders in understanding the Group's trading activities. 
 
Annual General Meeting and Availability of Annual Report 
 
This year's annual general meeting (AGM) will be held at 10.00 a.m. on 
Thursday, 30 September 2021 at The Old Church, 31 Rochester Road, Aylesford, 
Kent ME20 7PR. 
 
The full annual report and accounts for the financial year to 31 March 2021 and 
notice of AGM are expected to be posted to shareholders on or around 5 August 
2021 and will shortly be made available to download from the Company's website 
at: www.phsc.plc.uk. 
 
Dividend 
 
The Company confirms that, subject to shareholder approval at the AGM, the 
final dividend of 0.5p will be payable on 15 October 2021 to shareholders on 
the register on 1 October 2021. 
 
For further information please contact: 
 
PHSC plc 
 
Stephen King 
Tel: 01622 717 700 
 
Stephen.king@phsc.co.uk 
 
www.phsc.plc.uk 
 
Strand Hanson Limited (Nominated Adviser)              Tel: 020 7409 3494 
 
James Bellman / Matthew Chandler 
 
Novum Securities Limited (Broker)                             Tel: 020 7399 
9427 
 
Colin Rowbury 
 
About PHSC 
 
PHSC, through its trading subsidiaries, Personnel Health & Safety Consultants 
Ltd, RSA Environmental Health Ltd, QCS International Ltd, Inspection Services 
(UK) Ltd and Quality Leisure Management Ltd, provides a range of health, 
safety, hygiene, environmental and quality systems consultancy and training 
services to organisations across the UK. In addition, B2BSG Solutions 
Ltd offers innovative security solutions including tagging, labelling and CCTV. 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulation 
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of 
the European Union (Withdrawal) Act 2018. 
 
STRATEGIC REPORT 
 
In a period completely dominated by the financial effects of the COVID-19 
pandemic, I present my review of the Group's activities and performance during 
the financial year 2020-21 on behalf of the board, including commentary on our 
successful post year-end share buyback programme, and an indication of how the 
Group expects to meet the challenges as we emerge from the pandemic over the 
year ahead. 
 
GENERAL BUSINESS REVIEW, COVID-19 RESPONSES AND OUTLOOK 
 
In the circumstances, the reduction in sales revenue by approximately a quarter 
compared with 2019-20 (£3.29m versus £4.38m) was deemed a satisfactory outcome. 
The level of revenue ultimately achieved exceeded management's initial 
expectations at the start of lockdown in March 2020. The Group's subsidiaries 
were affected in different ways, with some coming to a virtual standstill 
whilst others were able to carry on with encouraging levels of trading albeit 
in a very difficult environment. Our subsidiaries had to look at creative ways 
to mitigate the effects of the pandemic by adapting their service delivery 
methods as far as possible. This involved increased levels of remote working. 
Full use was also made of government financial support, consisting of small 
business grants for the subsidiaries worst affected, and Coronavirus Job 
Retention Scheme (CJRS) subsidies towards the costs of those personnel for whom 
work was not possible. The impact on each individual subsidiary is set out 
later in this report. 
 
The board elected to take a 20% reduction in salary for six-months commencing 
on 1 May 2020 and is grateful that subsidiary directors elected to follow suit. 
This action helped the Group to conserve its resources at a time when the 
outlook was most uncertain. 
 
With the benefit of the government support described above, a highly 
satisfactory EBITDA figure of £0.505m was achieved. Despite the overall 
reduction in income from all regular sources, costs across the Group were 
considerably lower. Savings were achieved due to reductions in headcount, 
notably in our B2BSG Solutions Limited (B2BSG) subsidiary, and in lower general 
operational expenditure. Purchasing activity was lower across the Group, and 
there was a positive variance in the value of sterling which assisted our 
security division which imports all the electronic equipment sold on to 
clients. 
 
As has been the case for a number of years, the sales environment for B2BSG, 
which predominantly serves the retail sector, is shrinking due to on-line 
sales. This trend was accelerated by the pandemic and has hastened the demise 
of large clients such as Peacocks, Edinburgh Woollen Mill and Debenhams. 
Associated bad debts of £22,000 were recognised during the year. 
 
Revenues in the Group's Scottish-based systems division held up better than 
anticipated, and the business remained profitable throughout the year. Even 
without the welcome support from government funding, this subsidiary would have 
generated a profit ahead of our initial expectations. Revenues were 
supplemented by a new income stream arising as a consequence of Brexit, and 
further details are provided later in this report. 
 
Our greatest success was seen in the Group's safety division where there are 
four operational subsidiaries. Two of those businesses, Quality Leisure 
Management Limited (QLM) and RSA Environmental Health Limited (RSA) which 
mainly serve the leisure industry and the education sector respectively, almost 
ground to a standstill for much of the year. However, excellent results from 
Personnel Health and Safety Consultants Limited (PHSCL) and a steady 
performance from Inspection Services (UK) Limited (ISL) more than compensated 
for the leisure and education-related downturn and led to higher revenue and 
profitability for this division. 
 
With cash at bank comfortably exceeding £1.0m at the year end, and the Group's 
share price remaining stubbornly well below the Group's net asset value per 
share, the board took the decision to utilise the authority granted by 
shareholders at last year's annual general meeting (AGM) to implement a share 
buyback programme. The programme was announced on 13 May 2021 and completed on 
16 June 2021. Over that period the Company's broker was able to repurchase a 
total of 1,602,197 ordinary shares on the Company's behalf for a total 
consideration of approximately £0.325m. The buyback programme was largely 
funded from the surplus cash held on account following the sale of freehold 
premises previously held by a former subsidiary, in late September 2018. 
Accordingly, the number of ordinary shares not held in treasury now stands at 
13,075,060. 
 
The board is seeking shareholder approval for a renewed share buyback authority 
at the forthcoming AGM, but it should not be taken for granted that, if duly 
approved at the AGM, a further buyback programme will necessarily follow. The 
board will take a view based on the Company's available cash balances from time 
to time, the relationship between the share price and net asset value, and 
whether any such additional programme would be to the benefit of shareholders. 
Renewing the authority provides the board with flexibility in this regard. 
 
Cash at bank as at the date of this report stands at £0.879m such that the 
Group continues to enjoy a strong cash position and remains cash generative. 
The Group's undrawn facility with HSBC plc stands at £50,000 and falls due for 
renewal in October 2021. The board plans to renew the facility but does not 
currently anticipate having to call upon it. 
 
Net asset value 
 
Every year the board assesses the value of goodwill on the balance sheet and 
takes a view on whether it remains realistic and justifiable. Despite 2020-21 
being unrepresentative of any normal trading period, the board acknowledges 
that the decline in prospects for our security division caused by lower retail 
activity will continue. Accordingly, an impairment charge of £200,000 has been 
incurred against B2BSG in line with good accounting practice. Following careful 
review, the carrying value of RSA has also been reduced by £50,000. Our RSA 
subsidiary has seen progressive reductions in spending on the support services 
provided to environmental health officers at local authorities. Thus, a total 
charge to intangible assets of £250,000 has been made for the year. 
 
The year-end consolidated net assets of £4.919m have fallen to £4.636m 
following the recent completion of our share buyback programme. However, in 
light of the reduced number of ordinary shares in issue (outside treasury), the 
net asset value per share has risen to 35p compared to 34p at the previous year 
end. 
 
Outlook 
 
As the country exits from the health crisis and the economy rebounds, we expect 
the Group to be well positioned to recover to income levels more in line with 
2019-20. Inevitably, there will be legacy impacts in particular on the high 
street where consumers' shopping habits have clearly shifted towards more 
on-line ordering. Conversely, our systems division and the safety division 
expect a rebound in activity as clients look to catch-up on projects that were 
deferred or cancelled during the previous year. Our ability to deliver services 
remotely as an alternative to a face-to-face offering will also be more 
appealing to some customers and we will continue to offer this alternative 
where appropriate in order to meet with client expectation and preferences. 
 
Trading update 
 
Management accounts (unaudited) show total sales revenues and other income 
across the Group of £926,000 for the first quarter of 2021-22. This amount 
includes £20,500 of CJRS grants as the Group tapers its previous use of such 
support. EBITDA for the first quarter was approximately £72,000. This compares 
with total revenues of £820,000 and EBITDA of £108,300 for the equivalent 
period last year. 
 
Dividends 
 
A total dividend of 1.0p per ordinary share (£146,772) was paid in respect of 
the financial year ended 31 March 2020. An interim dividend of 0.5p in respect 
of the financial year ended 31 March 2021 was paid in February 2020 and, 
subject to shareholder approval, a final dividend of 0.5p, to be paid from 
earnings from the financial year ended 31 March 2021, is proposed for payment 
in October 2021, matching the total of 1.0p paid last year. Following the share 
buyback programme completed in June 2021, the cost of the final dividend will 
fall approximately 11% from £73,386 to £65,375. 
 
PERFORMANCE BY TRADING SUBSIDIARY 
 
The Group currently measures the following key performance indicators (KPIs). 
 
Total revenues 
 
Total revenues are reviewed each month across the Group to provide the board 
with a ready measure of how well the Group and underlying businesses are 
performing relative to historical data. It enables any trend to be detected, 
understood and acted upon as appropriate. Consolidated Group revenues including 
government grant funding for the year decreased by 16% due to the combined 
effect of the pandemic and the reduction in our retail client portfolio. 
 
Earnings before interest, taxation, depreciation, amortisation and 
non-recurring costs (underlying EBITDA) 
 
The Group achieved an increase in EBITDA from £255,203 in 2019-20 to £504,608 
in 2020-21 due to lower overheads and premises-related savings across the 
Group. In the absence of Government support, EBITDA would have fallen to £ 
63,483. However, this is not a true comparison because in the absence of the 
CJRS grants the Group would have taken actions to significantly reduce 
headcount and other costs in response to the hiatus in the economy and trading 
disruption. 
 
Staff turnover 
 
Staff turnover is generally monitored as the key asset of each subsidiary is 
its workforce. Recruiting replacement staff is an expensive task and it is not 
always possible to compensate for the specialised knowledge that may be lost 
when an employee departs. This KPI has been retained in 2020-21 but is less 
informative than normal due to reductions in staff numbers arising from the 
pandemic. In the year to 31 March 2021, the average number of staff employed 
across the Group was 41, down from 49 in the previous fiscal year. The decrease 
arose in part due to redundancies where it was determined that use of the CJRS 
to support an unsustainable role was inappropriate. There was also a degree of 
natural wastage where leavers were not replaced. 
 
Pre-tax profit/(loss) per subsidiary before Group management charges 
 
Profit before tax and management charges is reviewed by each subsidiary and by 
the board every month. Each subsidiary director provides a commentary to enable 
the board to establish whether intervention of any kind is appropriate. 
 
A summary of the results and activities of our trading subsidiaries is set out 
below. Where relevant, government grant funding is excluded from revenues, but 
included in profits. Performance is based on those factors within a subsidiary 
director's control, so results are shown exclusive of management charges and 
taxation and any impairment judged necessary. The Group covers its own 
management costs by levying a charge on each subsidiary and derives other 
income through the receipt of dividend income from its subsidiaries. 
 
B2BSG Solutions Limited (B2BSG) 
 
.    2021: revenues of £1,136,600 yielding a profit of £13,800 
 
.    2020: revenues of £1,915,200 yielding a loss of £90,800 
 
The financial year started and ended with the majority of the company's clients 
in lockdown, with only a short period of reopening during Q3.This inevitably 
had a heavy impact on sales revenues. With full use made of the CJRS and a 
grant from the local authority, additional income of £131,906 provided welcome 
support and led to a small overall pre-tax and management charge profit. 
 
With no expectation that the retail sector will recover to pre-pandemic levels, 
given the shift to on-line purchasing, difficult decisions were taken regarding 
staffing levels. Consequently, there were redundancies during the year and 
these continued after the year end. The business is now operating with around 
half the headcount with which it started 2020. 
 
Management is confident that the leaner business model will enable the company 
to take advantage of any upturn in fortunes in the retail environment. 
Additional encouragement arises from the post-year end securing of a contract 
with a national grocery chain. 
 
As previously stated in this report, a provision of £22,000 was made for bad 
debts. 
 
Inspection Services (UK) Limited (ISL) 
 
.    2021: revenues of £213,900 yielding a profit of £31,500 
 
.    2020: revenues of £230,800 yielding a profit of £37,400 
 
ISL was the only member of the Group that did not benefit from government 
support by way of the CJRS or small business grants from the local authority 
during the year. This was due to the enforcing authorities having notified duty 
holders across the UK that the obligation to have plant and equipment examined 
in line with statutory frequencies was not being relaxed during the pandemic. 
 
Although COVID-19 did not directly affect the obligation on employers to 
arrange for their plant and equipment to be examined and certificated, the 
pandemic did cause certain difficulties for ISL. These centred around clients 
who were unable to arrange access due to site closure or who were reticent 
about having external personnel on their premises. This made it less efficient 
when designing engineers' work rotas and resulted in some gaps in utilisation. 
 
Despite these difficulties, ISL achieved revenues approaching £214,000 compared 
with around £231,000 the year before. EBITDA before management charges was £ 
41,300 which was approximately 7% lower than the £44,500 achieved last year. 
 
The company continues to work predominantly through insurance brokers, with a 
small percentage of sales made directly to clients. Where work is arranged 
through brokers, commissions are paid for the introduction. 
 
Personnel Health & Safety Consultants Limited (PHSCL) 
 
.    2021: revenues of £968,900 yielding a profit of £498,000 
 
.    2020: revenues of £763,600 yielding a profit of £302,500 
 
This was a successful year for PHSCL. Sales income grew from £763,600 in the 
previous year to £968,900 and profit before tax and management charge increased 
by approximately 65% from £302,500 to £498,000. Despite many client sites being 
closed or severely restricted in allowing access, the services on offer were 
adapted to enable business to continue as well as new services to be developed 
to support clients during the pandemic. Active marketing throughout the year 
supported the sales process and improved PHSCL's visibility in the health and 
safety compliance market. 
 
Consultancy income from non-retained clients more than doubled to around £ 
225,000 with new clients opting to work on a more ad-hoc arrangement. These new 
sales are turning into repeat business and regular client relationships are 
being forged. In addition, revenue from training courses was up by £20,000, 
following successful adaption of courses for remote delivery via Zoom and 
Microsoft Teams during the pandemic. PHSCL was an early adopter of remote 
learning, having already started to use Zoom before the pandemic. There are 
also cost savings from this method of training delivery. 
 
The company continues to meet the accreditation requirements for the ISO 9001 
quality management standard, having held this "kitemark" for 24 years since 
becoming the first organisation of its kind to achieve the standard. 
 
Whilst COVID-19 restrictions have seriously affected many clients, the business 
has managed to successfully adapt and will utilise the positive benefits from 
innovation to continue its development into 2021-22. Some projects which had 
been put on hold are likely to return, and several clients are seeking 
assistance in developing safety systems to support hybrid working as they 
emerge from their own lock-down arrangements. The challenge will be to maintain 
and further develop the growth that has been achieved over the past year, in 
adverse conditions. 
 
QCS International Limited (QCS) 
 
.    2021: revenues of £500,700 yielding a profit of £121,100 
 
.    2020: revenues of £756,700 yielding a profit of £220,900 
 
The restrictions placed on businesses throughout the COVID-19 pandemic had a 
significant impact upon the operational activity of QCS, reducing its revenue 
materially. In particular, there was a major influence upon the company's 
ability to deliver training. Despite this, the company has posted a profit for 
the year, through taking advantage of some opportunities generated by the 
pandemic as well as the creation of a new service for the medical device sector 
relating to Brexit changes. These income streams were also supported by the 
CJRS, which had the effect of ensuring that personnel remained in place and the 
company was able to take advantage of the improving situation towards the end 
of the financial year. 
 
Consultancy activity for the year was at or above previous levels. The 
reduction in normal demand was partly offset by the company offering services 
relating to COVID-19 assessments. The second significant new source of income 
arose because, late in 2020, the Brexit withdrawal agreement required medical 
device manufacturers in the EU to have a UK-based representative. QCS developed 
a service to meet this obligation and has been able to establish a growing 
portfolio of new clients requiring this representation. 
 
Public, face-to-face training ceased to be viable during the initial lockdown, 
partly due to the restrictions placed upon the business but also due to most 
delegates and their employers wishing to cancel or defer training. Training 
activity did recommence in mid-2020 only to face another short hiatus at the 
beginning of 2021. When training was possible, delegate numbers and thus income 
was capped to ensure we met social distancing and other guidelines to prevent 
the spread of COVID-19. 
 
Whilst consultancy sales remained broadly on trend at £387,000, the significant 
loss of training income resulted in an overall shortfall of approximately £ 
250,000 equating to around one third of expected turnover. 
 
The most significant costs faced by the company are those associated with 
payroll. To assist with maintaining business viability, salary reductions were 
implemented and the CJRS scheme accessed. Other costs were strictly managed and 
there were savings associated with reduced business activity. 
 
Towards the end of the financial year there were signs of improving 
performance. This was supported by the slow easing of lockdown measures along 
with a return to some public training provision. The first deadline for medical 
device manufacturers to register on the UK Responsible Person service, 
described earlier, led to a welcome income stream. These two factors, along 
with consultancy work continuing to grow in alignment with historic trends, 
suggests that the company has performed well during the pandemic and is in a 
strong position to take advantage of a return to more normal trading 
conditions. All personnel remain in place, our position in the marketplace 
remains strong and there continues to be a significant interest in the services 
that QCS offers. 
 
Quality Leisure Management Limited (QLM) 
 
.    2021: revenues of £234,300 yielding a profit of £99,700 
 
.    2020: revenues of £353,400 yielding a profit of £75,700 
 
QLM made a profit before central management charges and tax of £99,700. 
Excluding £54,400 received from the CJRS and business grants, the resulting 
profit of £45,300 (2020: £75,700) shows the negative impact of COVID-19. QLM's 
core client base saw unprecedented restrictions throughout the financial period 
and most clients were required to close for protracted periods. Those that were 
able to reopen did so under controls that severely limited their earning 
potential and their appetite for buying in external services such as those 
provided by QLM. 
 
Clients placed significant reliance on QLM's health and safety support service 
during 2020-21. This resulted in a high number of general enquiries and 
requests for assistance in interpreting the latest government advice, however, 
much of this support was under the auspices of the general adviser service and 
did not result in extra income. 
 
Auditing demand was significantly reduced for the year. Closures, legislation 
and government guidance, including localised interpretation, meant that 
auditing for the most part only took place during periods of lifted 
restrictions. 
 
Training was developed and revised to be run via video conferencing. After some 
initial cancellations and after clarification of government funding 
initiatives, training courses resumed online. QLM's (CIMSPA endorsed) Health 
and Safety Management Certificate in Leisure and Culture remains popular and a 
valuable income stream. 
 
The number of retained clients remained largely unchanged, with relatively 
normal fluctuations observed as leisure trust contracts were won and lost and 
new trusts came into being. 
 
A shared part-time administrator employed by another subsidiary, was made 
redundant during the year, and was not replaced. 
 
RSA Environmental Health Limited (RSA) 
 
.    2021: revenues of £235,100 yielding a profit of £57,400 
.    2020: revenues of £418,100 yielding a profit of £83,500 
 
Revenue for the year was down by approximately 44% to £235,100. Income received 
from the CJRS and business grants of £73,600 was instrumental in turning a 
potential loss into a profit of £57,400 before central management charges and 
tax. 
 
The COVID-19 pandemic had a significant effect on the revenues the company 
could generate within the principal areas of the economy that it operates. For 
the first five months of the financial year there was a reliance on the CJRS 
and local authority grant funding to help support revenues and cover costs. For 
the remaining seven months of the financial year the company did see something 
of a return to more normal trading, as legal restrictions allowed various 
sectors to open. 
 
To help mitigate the reduction in revenues, the company decided to make 
redundant a part-time administrator in July 2020. Another consultant decided to 
resign from their position from December 2020 and this was reluctantly 
accepted. Other staff and some associates were utilised to make up the 
shortfall in fee-earning ability over the final quarter of the year as an 
alternative to recruiting a replacement. That decision helped with 
profitability for the year and enabled us to deal with the peaks and troughs of 
demand at that time. 
 
In previous years, the focus of the company has been on the SafetyMARK brand, 
providing safety services to the schools sector. However, with schools closed 
for much of the time, this particular financial year saw the need to bring in 
revenues from wherever possible to meet the demands of clients and match the 
skillsets of the available staff members. Revenues fall into four main 
categories: training, health and safety consultancy, food safety consultancy 
and SafetyMARK. 
 
SafetyMARK whilst remaining the focus, saw revenues fall to around £87,000. 
This was due to no new audits being conducted in the first quarter because 
schools were effectively closed to external visitors. For the remainder of the 
year, revenues were on a par with previous years and there remains a strong 
demand for our services. 
 
Training income saw a reduction due to a decrease in the numbers of courses 
being requested by clients. A change in delivery methods has helped to 
alleviate the loss of face-to-face training. Virtual courses remain popular and 
will form part of our offering into the future due to the reduction in 
associated costs and an appetite by clients. 
 
Health and safety consultancy and advisory services saw the biggest change in 
demand for the year 2020-21 due to the cessation of a large contract in the 
hospitality sector. Some consultancy work had to be postponed until later in 
the year, but this was replaced with other works that could be completed during 
the pandemic. Some work has been undertaken to promote various services to 
utilise the skills of the consultants present within the company. 
 
Food safety consultancy has seen a significant reduction in demand in the past 
year and remains challenging in some hospitality sectors. The contracts with 
schools have continued but those with commercial companies had to be 
renegotiated as many clients indicated that they were re-opening on a very 
limited basis. 
 
PHSC plc 
 
.    2021: net loss of £382,400 before management charges, exceptional costs, 
interest and dividends received 
 
.    2020: net loss of £424,100 before management charges, exceptional costs, 
interest and dividends received 
 
The Company incurs costs on behalf of the Group and does not generate any 
income. The costs incurred by the Company represent the costs of running an AIM 
quoted Group. The reduction in costs is due to changes in staffing arrangements 
between the Company and its subsidiaries and the 20% reduction in salaries 
accepted by the directors during the height of the pandemic. 
 
PRINCIPAL RISKS AND UNCERTAINITIES 
 
Pandemic 
 
The full financial impact of the coronavirus pandemic involving the spread of 
COVID-19 was felt in 2020-21. 
 
As government guidance evolved, the plan for each subsidiary was developed and 
updated by the directors to minimise the risk to staff, customers and business 
continuity. This was circulated to all staff and contained measures to maintain 
business productivity whilst protecting the health of employees, customers, and 
other stakeholders. The plan was monitored and revised in response to new 
information published by Public Health England. Guidance was also published on 
the website for staff, customers, and prospects to access. 
 
Initially, the risk of employees contracting the virus, resulting in loss of 
key staff to illness was mitigated by working from home being encouraged 
wherever appropriate. Vulnerable workers were identified and asked to shield, 
and employees contacted regularly to monitor welfare. A skeleton staff remained 
in the head office to minimise numbers present whilst at the same time 
maintaining business continuity. Social distancing was exercised, and hand 
sanitiser provided. As lockdown restrictions eased, staff adopted a more 
flexible approach, working from home, the office or clients' premises as deemed 
appropriate. A key focus involved protecting PHSC's reputational risk by 
ensuring staff adhered to government guidelines. 
 
The use of Microsoft Teams and Zoom to keep in touch with staff and clients was 
swiftly adopted with training offered where necessary. Materials for training 
courses were updated and adapted to enable on-line training to be delivered 
wherever possible. The operational directors regularly met via Zoom for a 
business update and to share knowledge and best practice. Board meetings were 
also undertaken as scheduled via Zoom. 
 
Initially income from the CJRS and business grants played a key role in 
maintaining cash flow, though as the businesses adapted, this reliance became 
less and is now at a minimal level. 
 
In terms of liquidity risk, the Group had a strong cash position at the outset 
of the year and with monies from government schemes and good credit control, 
the Group has remained cash generative. The expectation for 2021-22 is that the 
Group will return to profitability, before grant income. 
 
As the country exits from the health crisis and the economy rebounds, it is 
expected that the Group will be well positioned to recover to income levels 
more in line with 2019-20. Inevitably, there will be legacy impacts in 
particular on the high street where consumers' shopping habits have shifted 
towards on-line ordering. Conversely, the systems division and the safety 
division expect a rebound in activity as clients look to catch-up on projects 
that were deferred or cancelled in the previous year. The Group's ability to 
deliver services remotely as an alternative to a face-to-face offering will be 
more appealing to some customers and this alternative will continue to be 
offered where appropriate. 
 
Regulatory/Marketplace 
 
Approximately 50% of the Group's work involves assisting organisations with the 
implementation of measures to meet regulatory requirements relating to health 
and safety at work. If the regulatory burden was to be substantially lightened, 
for example if the government embarked upon a programme of radical 
deregulation, there could be less demand for the Group's services. Changes to 
the operation of the employer's liability insurance system, as proposed in some 
quarters, could reduce the incentive for organisations to buy in 
claims-preventive services such as health and safety advice. In mitigation of 
these risks, the board has diversified the Group's range of offerings, for 
example, through investing in its security businesses and is exploring 
non-regulatory areas of environmental work to add to the current portfolio of 
services. 
 
The Group's security division has updated its operating procedures to ensure 
compliance with relevant Brexit related legislation. Professional advice has 
been sought as needed. Matters outside the Group's control include delays 
caused at customs if administrative demands on border officials are suddenly 
increased, resulting in slower clearance times for imported goods. 
 
In terms of the risk that the value of sterling deteriorates, the Group can 
take reasonable steps to hedge against the effects of a weaker pound, with 
customers being advised to consider pre-ordering and/or increasing their stock 
levels in respect of those products supplied by the Group's security division 
which they see as being critical to their business. Higher stock levels would 
have the double benefit of reducing the risk of an interruption to supply and 
mitigating the impact of price rises that would ultimately work their way 
through to all imported goods if there is a materially weaker exchange rate. 
The warehouse at B2BSG has the capacity for storage of additional products and 
close partnership with logistics providers will allow access to further 
warehousing space should that prove necessary. 
 
The Group's security division works almost exclusively in the retail sector and 
this has continued to suffer as a result of weak consumer demand on the high 
street and the move towards on-line purchasing which has accelerated during the 
COVID-19 pandemic. Any further material deterioration in the retail sector and 
specifically in B2BSG's client base may have a significant negative effect on 
the company's and hence the Group's prospects. 
 
Technological 
 
The Group's website is a primary source of new business. If the website became 
inaccessible for protracted periods, or was subject to "hacking", this may 
prejudice the opportunity to obtain new business. Additionally, the increase in 
the use of the internet for satisfying business requirements may lead to a 
reduction in demand for face-to-face consultancy services and the number of 
training courses commissioned may be affected by moves towards screen-based 
interactive learning. The subject of IT security is regularly reviewed by the 
board to ensure that appropriate strategies are in place. 
 
Personnel 
 
Generally, there is an excess of demand over supply for health and safety 
professionals. Those with sufficient qualifications and experience to be 
suitable for consultancy roles are in the minority. This has the combined 
effect of making it difficult for the Group to source suitable personnel and 
having to offer higher remuneration packages to attract them. The Group is 
dependent upon its current executive management team. Whilst it has entered 
into contractual arrangements with the aim of securing the services of these 
personnel, the retention of their services cannot be guaranteed. Accordingly, 
the loss of any key member of management of the Group may have an adverse 
effect on the future of the Group's business. The Group and each subsidiary 
have contingency plans in place in the event of incapacity of key personnel. 
 
Geographical 
 
The Group offers a nationwide service, but a number of organisations see 
benefit in using consultancies that are local to them and internet search 
engines favour local providers. With offices in Kent, Berkshire, 
Northamptonshire and Scotland, the Group has a good geographical spread. 
 
Licences 
 
The Group is reliant on licences and accreditations to be able to carry on its 
business. The temporary loss of, or failure to maintain, any single licence or 
accreditation would be unlikely to be materially detrimental to the Group, as 
the directors believe that this could be remedied. However, if the Group fails 
to remedy any loss of, or does not maintain, any licence or accreditation, this 
will have a material adverse effect on the business of the Group. The Group has 
internal processes in place to ensure that the licences and accreditations are 
maintained. 
 
SECTION 172 STATEMENT 
 
The Companies (Miscellaneous Reporting) Regulations require large companies to 
publish a statement describing how the directors have had regard to the matters 
set out in section 172 (1) (a) to (f) of the Companies Act 2006.These sections 
require directors to act in a way most likely to promote the success of the 
Group for the benefit of its stakeholders and with regard to the following 
matters. 
 
The likely consequences of any decision in the long-term 
 
The board receives an annual business plan from the managing director of each 
subsidiary company, which forms the basis of the Group's strategic plan. The 
board requires that the plans include financial forecasts, KPIs, marketing 
strategy and an analysis of strengths, weaknesses, opportunities, and threats. 
Subsidiary directors, via the Group's operational board of which they are 
members, consider the implications of their own plans in the context of what 
others within the Group are intending to do and the opportunities for synergies 
are explored. Any proposed actions that may adversely affect another subsidiary 
are flagged at operational board level and are resolved. Subsidiary directors 
are challenged on the content of their plans and the assumptions they have 
made, to ensure that the plans are realistic and achievable. Once agreed by the 
board, this plan, at Group and subsidiary level, is used as the benchmark 
against which to assess performance. 
 
The interests of the Group's employees 
 
As the Group is mainly involved in the supply of services, the board considers 
its staff to be the greatest asset and the interests of employees are taken 
into consideration in all decisions made. Each subsidiary company within the 
Group has in place the necessary structures to ensure effective communication 
with its employees. The subsidiary directors meet once a quarter and relevant 
information is shared with employees via team meetings held at subsidiary 
level. The views of employees are heard in a similar fashion, initially at team 
meetings, and escalated to the operational board and the main board if 
appropriate. Each subsidiary has its own bonus scheme, based on results for the 
financial year and/or tailor-made targets. There is an annual budget for staff 
training in recognition that the performance of the Group can be improved by 
the development of its employees. 
 
The Group is committed to equality of employment and its policies reflect a 
disregard of factors such as disability in the selection and development of 
employees. A review has been conducted to identify any gender-related pay 
anomalies across the Group and found there to be no such anomalies. 
 
The need to foster the Group's business relationships with suppliers, 
customers, and others 
 
The Group seeks to treat suppliers fairly and adhere to contractual payment 
terms. The Group works with its suppliers to help drive change through 
innovation, promoting new ideas and ways of working. The Group has 
zero-tolerance to modern slavery and is committed to acting ethically and with 
integrity in all business dealings and relationships. The Group policy for 
Modern Slavery and Human Trafficking contains systems and controls to ensure 
that these activities are not taking place anywhere in the subsidiaries or 
throughout the Group's supply chains and can be viewed on our website 
(www.phsc.plc.uk). 
 
The Group also has zero-tolerance with regards to bribery, made explicit 
through its Anti-Bribery and Corruption Policy. This covers the acceptance of 
gifts and hospitality and any form of unethical inducement or payment including 
facilitation payments and "kickbacks". The policy sets out the responsibilities 
of directors, employees and contractors and details the procedures in place to 
prevent bribery and corruption. This policy is also available on our website. 
 
Each subsidiary is focussed on its customers. Communication takes many forms 
and is structured according to how each subsidiary interacts with its client 
base. Channels of communication include quarterly newsletters in hard copy and/ 
or sent electronically, customer roadshows, interaction via various social 
media platforms (such as Twitter, LinkedIn and Facebook) and regular client 
meetings. An ongoing dialogue is held electronically, with most clients 
subscribing to email updates that are sent out periodically. 
 
Stephen King is the principal contact between the Company and its investors, 
with whom he maintains a regular dialogue. The Company is committed to 
listening to and communicating openly with its shareholders to ensure that its 
business model and performance are understood. Regular announcements are made 
to the market and the AGM provides a forum for information dissemination, 
discussion, and feedback. 
 
The impact of the Group's operations on the community and the environment 
 
The board's intention is to behave responsibly and ensure that management 
operates the business in a responsible manner, complying with high standards of 
business conduct and good governance. The Group has a long tradition of 
supporting local causes through sponsorship and community involvement, details 
of which can be found on our website. The directors are aware of the impact of 
the Group's business on the environment but believe this to be minimal due to 
the nature of its operations. 
 
GOING CONCERN 
 
Company law requires the directors to consider the appropriateness of the going 
concern basis when preparing the financial statements. For most of 2020-21 the 
COVID-19 pandemic and the consequent Government-imposed lockdowns and 
restrictions severely impacted upon our activities. Perhaps 
counter-intuitively, the outcome of the severely disrupted trading year was a 
higher profit than in the prior year. The board's expectations were exceeded, 
with the initial dire predictions having proved to be overly cautious and the 
agility of our subsidiaries enabling us to retain more work than first 
expected. Cash reserves ended the year at a high level and remain strong after 
the recent successful share buyback programme. The board is satisfied that 
this, along with the Group's cash-generative trading position and (unused) 
banking facility will ensure that there are sufficient resources to continue in 
operational existence for the foreseeable future.The directors therefore 
continue to adopt the going concern basis of accounting in preparing the annual 
financial statements. 
 
On behalf of the board, I must thank all our shareholders for their ongoing 
loyalty and support. This year more than ever the board is grateful for the way 
in which each employee has met the challenges they have had to face. This 
includes new ways of working and having to show a high degree of flexibility. 
Whether on furlough, working from home, or carrying on with client-facing 
activity, the spirit of teamwork and mutual support has greatly assisted in 
bringing the Group through a very difficult period. 
 
On behalf of the board 
 
Stephen King 
 
Group Chief Executive 
 
29 July 2021 
 
GROUP STATEMENT OF FINANCIAL POSITION 
 
as at 31 March 2021 
 
                                                              31.3.21   31.3.20 
 
                                                                    £         £ 
 
Non-Current Assets 
 
Property, plant and equipment                                 529,413   592,539 
 
Goodwill                                                    3,028,463 3,278,463 
 
Deferred tax asset                                              2,017    19,582 
 
                                                            3,559,893 3,890,584 
 
Current Assets 
 
Stock                                                         259,760   264,301 
 
Trade and other receivables                                   590,128   885,947 
 
Cash and cash equivalents                                   1,237,483   755,919 
 
                                                            2,087,371 1,906,167 
 
Total Assets                                                5,647,264 5,796,751 
 
Current Liabilities 
 
Trade and other payables                                      518,245   622,938 
 
Right of use lease liabilities                                 31,856    34,071 
 
Current corporation tax payable                                88,011    40,250 
 
                                                              638,112   697,259 
 
Non-Current Liabilities 
 
Right of use lease liabilities                                 38,865    69,912 
 
Deferred tax liabilities                                       50,988    51,256 
 
                                                               89,853   121,168 
 
Total Liabilities                                             727,965   818,427 
 
Net Assets                                                  4,919,299 4,978,324 
 
Capital and reserves attributable to equity 
holders of the Group 
 
 
Called up share capital                                     1,467,726 1,467,726 
 
Share premium account                                       1,916,017 1,916,017 
 
Capital redemption reserve                                    143,628   143,628 
 
Merger relief reserve                                         133,836   133,836 
 
Retained earnings                                           1,258,092 1,317,117 
 
                                                            4,919,299 4,978,324 
 
 
                    GROUP STATEMENT OF COMPREHENSIVE INCOME 
 
                       for the year ended 31 March 2021 
 
                                                      31.3.21     31.3.20 
 
                                                            £           £ 
 
Continuing operations: 
 
Revenue                                             3,289,462   4,437,922 
 
Cost of sales                                       (1,764,915)  (2,251,867) 
 
Gross profit                                        1,524,547   2,186,055 
 
Administrative expenses                             (1,528,160)  (1,983,046) 
 
Goodwill impairment                                   (250,000)    (200,000) 
 
Government grants                                     441,125              - 
 
Other income                                            1,477              - 
 
Profit from operations                                188,989       3,009 
 
Finance income                                            999       1,990 
 
Profit before taxation                                189,988       4,999 
 
Corporation tax expense                               (102,241)     (20,548) 
 
Profit/(loss) for the year after tax attributable      87,747       (15,549) 
to owners of the parent 
 
Other comprehensive income                                    -        -- 
 
Total comprehensive income/(loss) attributable to      87,747       (15,549) 
owners of the parent 
 
Basic and diluted earnings/(loss) per share from        0.60p        (0.11)p 
continuing operations 
 
                     GROUP STATEMENT OF CHANGES IN EQUITY 
 
                       for the year ended 31 March 2021 
 
                                                    Merger     Capital 
 
                                Share      Share    Relief  Redemption    Retained 
 
                              Capital    Premium   Reserve     Reserve    Earnings      Total 
 
                                    £          £         £           £         £           £ 
 
Balance at 1 April 2019     1,467,726  1,916,017   133,836     143,628 1,479,438   5,140,645 
 
Loss for year attributable          -          -         -           -    (15,549)   (15,549) 
to equity holders 
 
Dividends                           -          -         -           -   (146,772)  (146,772) 
 
Balance at 31 March 2020    1,467,726  1,916,017   133,836     143,628 1,317,117   4,978,324 
 
Balance at 1 April 2020     1,467,726  1,916,017   133,836     143,628 1,317,117   4,978,324 
 
Profit for year                     -          -         -           -    87,747      87,747 
attributable to equity 
holders 
 
Dividends                           -          -         -           -   (146,772)  (146,772) 
 
Balance at 31 March 2021    1,467,726  1,916,017   133,836     143,628 1,258,092   4,919,299 
 
 
                         GROUP STATEMENT OF CASH FLOWS 
 
                       for the year ended 31 March 2021 
 
                                                        31.3.21   31.3.20 
 
                                                              £         £ 
 
Cash flows from operating activities: 
 
Cash generated from operations                          702,188   346,847 
 
Tax paid                                                 (37,183)   (32,017) 
 
Net cash generated from operating activities            665,005   314,830 
 
Cash flows used in investing activities 
 
Purchase of property, plant and equipment                 (8,739)   (39,529) 
 
Disposal of fixed assets                                  4,333     2,250 
 
Interest received                                           999     1,990 
 
Net cash used in investing activities                   (3,407)     (35,289) 
 
Cash flows used in financing activities 
 
Payments on right of use assets                          (33,262)   (19,316) 
 
Dividends paid to shareholders                          (146,772)  (146,772) 
 
Net cash used in financing activities                 (180,034)    (166,088) 
 
Net increase in cash and cash equivalents               481,564   113,453 
 
Cash and cash equivalents at beginning of year          755,919   642,466 
 
Cash and cash equivalents at end of year              1,237,483   755,919 
 
 
 
All changes in liabilities arising from financing relate entirely to cash 
movements. 
 
NOTES TO THE GROUP STATEMENT OF CASH FLOWS 
 
for the year ended 31 March 2021 
 
                                                          31.3.21   31.3.20 
 
                                                                £         £ 
 
I. CASH GENERATED FROM OPERATIONS 
 
Profit from operations                                    188,989     3,009 
 
Depreciation charge                                        65,619    52,194 
 
Goodwill impairment                                       250,000   200,000 
 
Loss on sale of fixed assets                                1,913     4,430 
 
Decrease in stock                                           4,541    52,255 
 
Decrease in trade and other receivables                   295,819    87,183 
 
Decrease in trade and other payables                      (104,693)  (52,224) 
 
Cash generated from operations                            702,188   346,847 
 
Notes 
 
The financial information set out above does not constitute the Group's 
financial statements for the years ended 31 March 2021 or 31 March 2020 but is 
derived from those financial statements. Statutory financial statements for 
2020 have been delivered to the Registrar of Companies and those for 2021 have 
been approved by the board and will be delivered after dispatch to 
shareholders. The auditors have reported on the 2020 and 2021 financial 
statements which carried an unqualified audit report, did not include a 
reference to any matters to which the auditor drew attention by way of emphasis 
and did not contain a statement under section 498(2) or 498(3) of the Companies 
Act 2006. 
 
While the financial information included in this announcement has been compiled 
in accordance with International Financial Reporting Standards (IFRS), this 
announcement does not in itself contain sufficient information to comply with 
IFRS. The accounting policies used in the preparation of this announcement are 
consistent with those in the full financial statements. 
 
Dividends 
 
A total dividend of 1.0p per ordinary share (£146,772) was paid in respect of 
the year ended 31 March 2020; half was paid in February 2020 and the balance in 
October 2020. An interim dividend of 0.5p in respect of the year ended 31 March 
2021 was paid in February 2021 and a final dividend of 0.5p is proposed, 
subject to shareholder approval, for payment in October 2021, matching the 
total of 1.0p paid last year. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

July 29, 2021 04:00 ET (08:00 GMT)

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