SAMUEL
HEATH & SONS plc
("Samuel
Heath" or "the Company")
UNAUDITED
HALF-YEAR REPORT
Half year
ended 30 September 2024
CHAIR'S STATEMENT
For the half year ended 30 September
2024, sales came in at £7.55m representing a decrease of £260k
(3.3%) compared to the six months ended 30 September 2023 which
included a final delivery to a large London contract. The order
book held up reasonably well despite adverse market conditions in
the UK, where market intelligence suggested order volumes were
generally down around 20%. However, the October 2024 order intake
was significantly below budget (as discussed below).
Operating profit was £481k which
compares with £465k in the six months to 30 September 2023, a £16k
increase despite the £260k sales reduction. The small improvement
in margin reflected labour savings and lower utility costs, as well
as lower advertising and trade show costs.
Cash and cash equivalents at 30
September 2024 increased by £253k to £1.937m, from £1.684m as at 31
March 2024. Working capital reduced by £130k (mainly lower stocks),
while plant expenditure of £319k was incurred to support production
efficiency and productivity. However, a significant factor was the
absence of a contribution to the defined benefit pension scheme
(six months to 30 September 2023: £300k).
As mentioned in the financial
statements for the year to 31 March 2024, the board has agreed with
the pension trustees that the company contribution would be reduced
to £300k in the year to 31 March 2025. This newly agreed level will
be paid in the second half of the current financial year. Also as
previously indicated, the trustees were asked to request a formal
valuation at 31 March 2024 and this has now been completed. Using
conservative assumptions, the report shows a surplus of £572k on an
ongoing basis. In addition, the scheme assets have been transferred
to a new fiduciary manager and invested such as to match the
performance of assets and liabilities, with the intention of being
able to buy out the fund in due course (note the scheme currently
has a deficit on a 'solvency' basis).
Looking to the second half of the
year, the Board has concerns about the economic environment and the
state of the markets. As already mentioned, the order intake in
October 2024 was significantly below budget and compared to
previous months. Up until then, we appeared to be gaining some
market share, against a background of depressed markets in the
UK. Concerns about the UK government's
budget, combined with anticipation of the US election result,
contributed to a marked slowdown in order intake which has been
evident in the market for several months. With both major events
now concluded, we are hopeful that projects that have been on hold
will now resume, though this may take several months to reach us in
the form of confirmed orders.
The Company is pleased to report
that the Forme Collection, launched 18 months ago, is selling ahead
of budget and should continue to do so. This year has seen the
introduction of four key new finishes, with Anthracite and Old
Brass shown for the first time at the recent Decorex London
exhibition to a very positive audience. New finishes, as we have
seen with the recent Antique Brass Matt, can be a significant
driver of sales.
Anthony Buttanshaw
Chair
26 November 2024
Dividend
As a result of the uncertain trading
conditions, the directors recommend the same interim dividend as
last year at 4.5p per share (2023: 4.5p). The interim dividend will
be paid on 21 March 2025 to shareholders on the register at the
close of business on 21 February 2025. The ex-dividend date for
this payment is 20 February 2025.
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, please contact:
Samuel Heath & Sons Plc
Simon Latham, Company
Secretary
0121 766 4200
Cairn Financial Advisers LLP
James Caithie / Jo
Turner
020 7213 0880
CONSOLIDATED CASH FLOW
STATEMENT
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Half year ended 30
September
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Half year
ended 30 September
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Year ended 31 March
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2024
|
|
2023
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|
2024
|
|
|
Unaudited
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|
Unaudited
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|
Audited
|
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|
£'000
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|
£'000
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|
£'000
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Cash flow from operating activities
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|
|
|
|
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|
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|
|
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Profit for the period before
taxation
|
439
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433
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884
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|
|
|
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Adjustments for:
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|
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Depreciation
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246
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|
238
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|
535
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Amortisation
|
106
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|
63
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|
154
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(Profit)/loss on disposal of
property, plant and equipment
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(39)
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-
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|
1
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Net finance
costs/(income)
|
1
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(57)
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(52)
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Defined benefit pension scheme
expenses
|
83
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|
83
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|
38
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|
Contributions to defined benefit
pension scheme
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-
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(300)
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(909)
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|
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Operating cash flow before movements in working
capital
|
836
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|
460
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|
651
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|
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|
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Changes in working
capital:
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Decrease/(increase) in
inventories
|
192
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(303)
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(455)
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Decrease/(increase)in trade and
other receivables
|
319
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(819)
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(442)
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(Decrease)/increase in trade and
other payables
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(381)
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|
107
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|
345
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|
|
|
|
|
|
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Cash (used in) / generated from operations
|
130
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(1,015)
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(552)
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Taxation received
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-
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-
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38
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Net
cash from / (used in) operating activities
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966
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(555)
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137
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|
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|
|
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Cash flow from investing activities
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|
|
|
|
|
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Payments to acquire property, plant
and equipment
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(319)
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(402)
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(476)
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Proceeds from the sale of property,
plant and equipment
|
36
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-
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1
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Payments to acquire intangible
assets
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(150)
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(95)
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(374)
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Net finance
income/(costs)
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(1)
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57
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62
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|
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Net
cash outflow from investing activities
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(434)
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(440)
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(787)
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Cash
flow from financing activities
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|
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Payment for right of use
assets
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(38)
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(33)
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(71)
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Dividends paid
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(217)
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(192)
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(305)
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|
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|
|
|
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Net
cash outflow from financing activities
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(255)
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(225)
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|
(376)
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Net increase/(decrease) in cash and
cash equivalents
|
277
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|
(1,220)
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(1,026)
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Effect of exchange rate differences
on cash or cash equivalents
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(24)
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(24)
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|
(7)
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Cash and cash equivalents at
beginning of period
|
1,684
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2,717
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2,717
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Cash and cash equivalents at end of
period
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1,937
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1,473
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1,684
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NOTES TO THE INTERIM FINANCIAL REPORT
1.
BASIS OF PREPARATION OF INTERIM REPORT
As permitted, IAS34 'Interim
Financial Reporting' has not been applied in this interim report.
The information for the period ended 30 September 2024 is not
audited and does not constitute statutory accounts as defined in
section 434 of the Companies Act 2006. The statutory accounts
for the year ended 31 March 2024 were given an unqualified audit
report and did not contain statements under section 498(2) or
498(3) of the Companies Act 2006. A copy of the statutory accounts
for that year has been delivered to the Registrar of Companies. The
interim accounts for the half year ended 30 September 2023 were
also unaudited.
2.
ACCOUNTING POLICIES
Basis of accounting
The report has been prepared on a
going concern basis in accordance UK-adopted International
Accounting Standards.
The group has not availed itself of
early adoption options in standards and interpretations.
The principal accounting policies
adopted are as set out in the Annual Report for the year ended 31
March 2024. The valuation of inventories is considered to be the
main area in terms of significant accounting estimates and
judgements.
The retirement benefit scheme
surplus recognised in these interim accounts reflects the estimated
change in the surplus at 30 September 2024 from the movements in
discount rates and inflation during the six months.
3.
DIVIDENDS
A final dividend for the financial
year 2024 of 8.5625p per share (2023: 7.5625p) was paid during the
period.
An Interim dividend for the
financial year 2025 of 4.5p per share is proposed (2024: 4.5p),
payable on 21 March 2025.
4.
EARNINGS PER SHARE
The basic and diluted earnings per
share are calculated by dividing the relevant profit after taxation
of £411,000 (2023: profit £411,000) by the average number of
ordinary shares in issue during the period being 2,534,322 (2023:
2,534,322). The number of shares used in the calculation is the
same for both basic and diluted earnings.
5.
OTHER OPERATING INCOME
Income was received for the
financial year 2024 from RTC North in the form of Grant Funding,
supporting the Feasibility of Automated Unloading.
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Half year ended 30
September
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Half year
ended 30 September
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Year ended 31 March
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|
2024
|
|
2023
|
|
2024
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
£'000
|
|
£'000
|
|
£'000
|
|
|
|
|
|
|
|
|
|
|
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|
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RTC North grant income
|
-
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-
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|
18
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Total other operating income
|
-
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-
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18
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Income has been accounted for under
the accruals method.
NOTES TO THE INTERIM FINANCIAL REPORT
(cont.)
6.
RETIREMENT
BENEFIT SCHEME
The values used in the Financial
Statements are valued using IAS 19, which shows a surplus of
£1.255m (shown in the balance sheet as
£941k net of deferred tax). However, the Director's support the
goal of a Buyout for the Scheme which is likely to result in a
premium being paid to the insurance company. This would mean that
the Directors do not expect this asset to be realised or ultimately
distributable.
Contributions for the year to 31
March 2025 have been agreed at £300,000, which have yet to be
paid.
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.