TIDMSLNG
RNS Number : 9647X
Slingsby(H.C.)Plc
02 May 2023
The information contained within this announcement is deemed by
the Company to constitute inside information pursuant to Article 7
of EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as amended. Upon
the publication of this announcement via the Regulatory Information
Service, this inside information is now considered to be in the
public domain.
2 May 2023
H C SLINGSBY PLC
("Slingsby" or the "Company" or the "Group")
Audited Results for the year ended 31 December 2022
Statement by the Chairman
Board Composition
Following the Board changes in 2016, I remain as Interim
Executive Chairman and since 2018 Morgan Morris has been the
appointed Group Chief Executive. The Board continues to believe
that it would benefit from the appointment of new Non-Executive
Directors. This should now be possible following the release of
restrictions relating to the Coronavirus, the agreement with regard
to the pension scheme detailed below and the re-instatement of
Directors' and Officers' insurance cover in respect of claims
relating to the pension scheme, which had deterred previously
suitable candidates. The Board will continue to explore solutions
to this issue, with the objective remaining to appoint new
Non-Executive Directors and a Non-Executive Chairman.
Results
In the half year statement, I reported an operating profit
(before exceptional items) of GBP0.32m on sales of GBP11.0m. The
full year operating profit (before exceptional items) was GBP0.63m
(2021: GBP0.41m) on sales of GBP21.6m (2021: GBP19.8m). Group sales
increased by 9%, which together with an improved gross margin, led
to a profit before taxation and exceptional items of GBP0.49m
(2021: GBP0.29m). The increase in Group sales is principally due to
the Group passing cost price increases which occurred across its
product ranges on to customers. This action resulted in the
improvement in gross margin in 2022.
Profit before tax of GBP0.8m in 2021, included an exceptional
item of GBP0.53m relating to the increase in value of the freehold
property at Baildon. Within 2022, there have been no exceptional
items recorded.
ESE Direct Limited ("ESE") contributed GBP7m of sales (2021:
GBP6.4m) and profit before tax and management charges of GBP0.54m
(2021: GBP0.53m). ESE's sales increased mainly due to passing on
cost prices increases to customers.
Group earnings before interest, tax, depreciation, amortisation
and exceptional items ("EBITDA") in the year ended 31 December 2022
were GBP1.1m (2021: GBP0.9m). The Group had net cash (after
overdraft balances included in trade and other payables) as at 31
December 2022 of GBP0.03m (2021: GBP0.35m). Group cash balances
reduced due to increased working capital requirements and
investment in fixed assets.
Dividend
Despite the agreement reached with the Trustee of the defined
benefit pension scheme enabling the recommencement of dividends,
the Board does not recommend the declaration of a final dividend
for the year ended 31 December 2022 (2021: GBPnil). This is due to
the Board adopting a prudent view to maintain cash resources within
the Group.
Under the agreement with the pension scheme, dividends are
limited in their quantum to GBP60,000 plus 50% of net cashflow over
GBP150,000 per annum.
Pension Scheme
The Company paid GBP0.35m (2021: GBP0.36m) in deficit reduction
contributions during 2022. The Company also continues to contribute
GBP0.16m (2021: GBP0.16m) towards the scheme's running costs. The
Group is scheduled to pay GBP406,000 in deficit reduction
contributions in 2023. Contributions rise each year by inflation
with a review at 1 January 2023 which is in progress.
At 31 December 2022, the pension scheme deficit decreased by
GBP2.4m to GBP5.49m (2021: GBP7.94m). This improvement in the
pension scheme position (which is GBP1.7m after the decrease in the
related deferred tax asset) together with the profit generated in
the year, increased the Group's net assets to GBP4.3m (2021:
GBP2.3m). The improved pension position was largely due to
increases in the discount rate.
Recent Trading and Future Developments
Group sales in Q1 of 2023 against the same period in 2022
increased by 5%. This improvement in sales at a higher gross margin
was offset by increased overhead costs. This led to an unaudited
profit before tax in Q1 2023 of GBP0.12m compared to GBP0.16m in
the same period in 2022.
On 30(th) March 2023, Slingsby acquired certain assets of
Stakrak Limited ("Stakrak"). Stakrak trades primarily through the
websites Stakrak, GasCageDirect and SecurityCagesDirect selling a
range of similar and
complimentary products but specialising in mesh cage solutions.
The consideration for the purchase was GBP0.11m funded from
existing cash resources.
The market remains competitive, and the Board is cautious
regarding the outlook. This is particularly the case due to the
significant uncertainty that remains caused by the continuing
conflict in the Ukraine, the risk of a recession in the Group's
main UK market and that the longer term impacts of the Coronavirus
pandemic and Brexit are not yet fully known. It is unclear as to
the impact that these events will have on demand going forward.
In addition, inflationary pressures remain leading to cost
increases across the product range and in overheads. This could
impact on the Group's gross margin and profits in 2023. Whilst
supply chain issues have lessened both in terms of supply of
components and availability of transport, they remain problematic
and impact on customer service levels and in some instances could
lead to lost sales opportunities.
Finally, I would like to thank our staff across the Group for
their efforts in 2022. The Group has faced numerous challenges in
recent years which were overcome due to the positive attitude and
hard work of our employees.
D.S.Slingsby
Interim Executive
Chairman
28 April 2023
For further information, please contact:
H C Slingsby PLC Tel: 01274 535 030
Dominic Slingsby, Interim Executive
Chairman
Morgan Morris, Group Chief Executive
Allenby Capital Limited (Nominated Tel: 020 3328 5656
Adviser & Broker)
Alex Brearley/George Payne
Consolidated Income Statement for the year ended 31 December
2022
Note 2022 2021
GBP'000 GBP'000
Revenue 21,564 19,824
---------- ----------
-------------------------------------- ----- ----------- ---------------
Operating profit before exceptional
items 627 410
Exceptional items 2 - 530
-------------------------------------- ----- ----------- ---------------
Operating profit 627 940
Finance costs (142) (118)
---------- ----------
Profit before taxation 485 822
Taxation (105) (255)
---------- ----------
Profit for the year attributable to
owners of the parent 380 567
---------- ----------
Basic and diluted earnings per share 4 36.2p 54.0p
---------- ----------
Consolidated Statement of Comprehensive Income and Expense for
the year ended 31 December 2022
2022 2021
GBP'000 GBP'000
Profit for the year 380 567
Items that will not be classified
to profit or loss:
Re-measurements of post-employment
benefit obligation 2,235 (3)
Movement in deferred tax relating
to retirement benefit obligation (559) 491
---------- ----------
Other comprehensive income 1,676 488
---------- ----------
Total comprehensive income for the
year attributable to equity shareholders 2,056 1,055
---------- ----------
Consolidated Balance Sheet as at 31 December 2022
Note 2022 2021
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 5,418 5,377
Intangible assets 249 386
Goodwill 700 700
Deferred tax asset 1,373 1,985
-------- ----------
7,740 8,448
-------- ----------
Current assets
Inventories 2,683 2,330
Trade and other receivables 2,962 2,764
Derivative financial asset - 7
Cash and cash equivalents 2,243 1,999
-------- ----------
7,888 7,100
-------- ----------
Liabilities
Current liabilities
Trade and other payables (5,007) (4,593)
Derivative financial liability - -
Finance lease obligations (20) (32)
--------- ---------
(5,027) (4,625)
-------- ----------
Net current assets 2,861 2,475
-------- ----------
Non-current liabilities
Lease obligations (113) -
Retirement benefit obligation 3 (5,492) (7,938)
Deferred tax liabilities (677) (722)
-------- ----------
Net assets 4,319 2,263
-------- ----------
Capital and reserves
Share capital 262 262
Share Premium 24 24
Retained earnings 4,033 1,977
-------- ----------
Total equity 4,319 2,263
-------- ----------
Consolidated Cash Flow Statement for the year ended 31 December
2022
2022 2021
GBP'000 GBP'000
Note
Cash flows from operating activities
Cash generated from operations 5 (27) 331
Interest paid - 1
UK corporation tax paid (49) (150)
-------- --------
Cash (used in)/generated from operating
activities (76) 182
-------- --------
Cash flows from investing activities
Purchase of property, plant and equipment (211) (100)
Proceeds from sales of property, plant
and equipment 24 28
Purchase of intangible assets (22) (3)
-------- --------
(209) (75)
Net cash used in investing activities -------- --------
Cash flows from financing activities
Capital element of lease payments (35) (36)
Increase in overdraft 564 147
-------- --------
Net cash generated from financing
activities 529 111
-------- --------
Net increase in cash and cash equivalents 244 218
Opening cash and cash equivalents 1,999 1,781
-------- --------
Closing cash and cash equivalents 2,243 1,999
-------- --------
Consolidated Statement of Changes in Shareholders' Equity
Share capital Share Retained Total equity
GBP'000 premium earnings GBP'000
GBP'000 GBP'000
1 January 2021 262 24 922 1,208
Profit for the year - - 567 567
Other comprehensive expense
for the year - - 488 488
---------- --------- ---------- ----------
Total comprehensive expense
for the year - - 1,055 1,055
---------- --------- ---------- ----------
1 January 2022 262 24 1,977 2,263
Profit for the year - - 380 380
Other comprehensive income
for the year - - 1,676 1,676
Total comprehensive income ---------- --------- ----------
for the year - --------- 2,056 2,056
---------- --------- ---------- ----------
31 December 2022 262 24 4,033 4,319
---------- --------- ---------- ----------
Notes to the Preliminary Results for the year ended 31 December
2022
1. The preliminary financial information does not constitute
statutory accounts within the meaning of Section 434 of the
Companies Act 2006 for the financial year ended 31 December
2022 but has been extracted from those accounts. The annual
accounts for the year ended 31 December 2022 have been prepared
in accordance with UK adopted International Accounting Standards.
The financial information included in this preliminary announcement
does not include all the disclosures required in accounts
prepared in accordance with UK adopted International Accounting
Standards and accordingly it does not itself comply with
UK adopted International Accounting Standards.
The accounting policies used in the preparation of these
preliminary results have remained unchanged from those set
out in the statutory accounts for the year ended 31 December
2021. They are also consistent with those in the full accounts
for the year ended 31 December 2022 which have yet to be
published.
The auditors have reported on the accounts for the year ended
31 December 2022 and their opinion was unqualified, did not
include any matters to which the auditor drew attention by
way of emphasis and did not contain a statement under section
498(2) or (3) of the Companies Act 2006.
The comparative information included in this preliminary
announcement has been extracted from the statutory accounts
for the year ended 31 December 2021. The auditors reported
on these accounts and their opinion was unqualified, did
not include any matters to which the auditor drew attention
by way of emphasis and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2021 have
been delivered to the Registrar of Companies and those for
the financial year ended 31 December 2022 will be delivered
following the Company's annual general meeting.
2. Exceptional item 2022 2021
GBP'000 GBP'000
Property impairment reversal - 530
------------ ------------
- 530
------------ ------------
3. Retirement benefit obligation
2022 2021
GBP'000 GBP'000
Present value of funded obligation 14,735 25,061
Fair value of scheme assets (9,243) (17,123)
------------ ------------
Net liability in balance sheet 5,492 7,938
------------ ------------
4. Earnings per share
Basic profit per share is based upon a profit of GBP380,000
(2021: GBP567,000) and on 1,050,000 (2021: 1,050,000) ordinary
shares in issue during the year.
There is no difference between basic profit per share and
diluted loss per share for both years as there are no potentially
dilutive shares in issue.
5. Cash (used in)/generated from operating activities
2022 2021
GBP'000 GBP'000
Profit before tax 485 822
Net finance costs 142 118
Depreciation and amortisation 464 461
Defined benefit pension scheme contributions
paid (352) (357)
Property impairment reversal - (530)
Profit on sale of property, plant and
equipment (24) (17)
Increase in inventories (353) (107)
Increase in trade and other receivables (192) (137)
Increase in trade and other payables (197) 78
------------ ------------
Cash (used in)/generated from operating
activities (27) 331
------------ ------------
6. Dividends
No dividends were paid or declared during 2021 or 2022 and
the Directors are not proposing any final dividend be payable
in respect of the year ended 31 December 2022.
7. Availability of Report and Accounts
The financial statements for the year ended 31 December 2022,
containing a notice of the Annual General Meeting will be
posted to shareholders shortly and will be available on the
Company's website www.slingsby.com/investor-relations.
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