17 June 2015
H C SLINGSBY PLC
("Slingsby" or the "Company")
Trading Update and Resignation of Director
HC Slingsby PLC, one of the market leaders in the distribution of industrial and commercial equipment today issues the following trading update in respect of the five months ended 31 May 2015 in advance of the Annual General Meeting on 18th June 2015.
In our annual results for the year ended 31 December 2014, we reported that sales remained fragile. Whilst we have seen growth in sales from our website, as well as buoyancy in the overall volume of orders; erosion of value in our higher spend accounts has offset these gains. As such our sales in the five months to 31 May 2015 are around 3% lower than the same period in the prior year.
The competitive nature of the market has also put our margins under pressure and together with the non-recurring professional fees and other costs relating to the acquisition of ESE Direct Limited ("ESE"), our pre-tax loss is marginally higher than at the same stage last year.
The Company finds this performance unsatisfactory and has taken the following action to address the situation:
- Mr C J Slingsby has decided to stand down from his executive position as Sales Director to concentrate on a more customer facing day to day role in the South of England;
- Mr L R Wright, currently Marketing Director, will take responsibility for management of the sales team and will become Sales and Marketing Director. This change of reporting lines in respect of the Company's sales personnel is in line with our previously stated desire to give greater focus to our key accounts and create closer integration of our marketing strategy with our field sales activity;
- Refocusing of the marketing budget on more aggressive new customer acquisition strategies in higher life time value accounts; and
- Further cost reduction initiatives.
ESE Direct Limited
On 27 March 2015, the Company announced the acquisition of ESE Direct Limited.
In the two months ended 31 May 2015, ESE's sales have fallen short of budget and prior year. As such ESE has not generated the level of profitability and cashflow expected at the time of its acquisition.
ESE operates in a different market sector to the Company with a more transient customer base which can lead to volatility in sales. However, the Company will continue to keep ESE's performance under close review.
Initial progress has been made on realising supply chain and cost synergies.
Cash Position
The acquisition of ESE was financed by the Company's cash resources and asset backed debt. As such, the Group had net debt of £1.5m at 31 May 2015 compared to net cash of £2m at 31 May 2014.
For further information, please contact:
H C Slingsby plc |
Tel: 01274 535 030 |
Dominic Slingsby, Managing Director |
|
Sanlam Securities UK Limited |
Tel: 020 7628 2200 |
David Worlidge / James Thomas |
|
