Preliminary Annual Results for y/e 31 Dec 2015

 

H C SLINGSBY PLC

("Slingsby" or the "Company" or the "Group")

 

Audited Preliminary Announcement for the year ended 31 December 2015

 

Statement by the Chairman

In my 2015 half year statement I reported a pre-tax trading loss (before exceptional items) of £0.15m on sales of £7.7m. Sales in the autumn did show some improvement before falling away in the last two months of the year. The full year pre-tax trading loss (before exceptional items) was £0.35m (2014: £0.26m) on sales of £17.1m (2014: £12.6m). Together with the exceptional restructuring cost and costs associated with the acquisition of ESE of £281,000, the full year pre-tax loss for 2015 was £0.63m (2014: £0.45m).

 

On 27 March 2015, we announced the acquisition of ESE Direct Limited ("ESE"), a supplier of industrial and commercial equipment operating in the same sector as Slingsby and based in Norwich. The consideration was £3.4m net of surplus cash on acquisition. This was financed through a combination of cash and asset backed finance.

 

ESE contributed £4.8m of turnover and £0.13m profit before tax to the group following its acquisition (prior to amortisation of intangible assets arising on acquisition). Whilst ESE's performance since acquisition has fallen short of initial expectations, we expect that recent management changes and the realisation of synergies will improve profit contribution in 2016.

 

Sales in the first quarter of 2016 for the Slingsby business are 3.3% down on the corresponding period in 2015 but there are some signs that the decline against the prior year has slowed. The market continues to be extremely competitive and we have to recognise that we have to respond to that challenge with further significant changes in the way we do business.

 

Your Board recognises that continuing trading losses are not acceptable and that urgent action is necessary to return your company to profitability. On 19 April 2016, Dominic Slingsby stood down as Managing Director of Slingsby to take up the post of Operations Director. On behalf of all shareholders I thank him for his many years of service as Managing Director.

 

Lee Wright, Sales and Marketing Director, has also resigned from the Board on 19 May 2016 and I thank him for his many years of service as a director.

 

We shall seek a New Managing Director but in the meantime I have taken responsibility for the group as Interim Executive Chairman until the new Managing Director is in post. We shall in the meantime also seek one or more new Non-Executive Directors to strengthen the Board and help our recovery. When the new Board is complete I expect to retire from the Company.

 

On behalf of the Board I would once again like to thank all our loyal staff in both Bradford and in Norwich after another difficult year. All their experience and ingenuity will be required to turn your company back into profit.

 

In view of the continuing loss in 2015, the Board is unable to recommend a final dividend for the year (2014: 6p).

 

These are difficult times for your Company as we strive to adapt to meet the challenges of today's market and I ask that shareholders show their support for the Board's recovery plan by re-electing all the Directors offering themselves for re-election at the Annual General Meeting on 30 June.

 

John Waterhouse

Executive Chairman

25 May 2016

 

For further information, please contact:

 

H C Slingsby PLC	Tel:  01274 535 030
John Waterhouse, Executive Chairman Morgan Morris, Financial Director
Allenby Capital Limited	Tel:  020 3328 5656
David Worlidge/James Thomas

 

 

 

Audited Consolidated Income Statement for the year ended 31 December 2015

 

	Note	2015 (Audited) £'000	2014 (Audited) £'000
Revenue		17,061	12,587
		----------	----------
Operating (loss)/profit before exceptional items		(10)	92
Exceptional items	2	(281)	(193)
Operating loss		(291)	(101)
Finance income		1	7
Finance costs		(342)	(359)
		----------	----------
Loss before taxation		(632)	(453)
Taxation		194	154
		----------	----------
Loss for the year attributable to owners of the parent		(438)	(299)
		----------	----------
Basic and diluted loss per share	4	(43.8p)	(29.9p)
		----------	----------

 

 

 

Audited Consolidated Statement of Comprehensive Income and Expense for the year ended 31 December 2015

                                               

		2015 (Audited) £'000	2014 (Audited) £'000
Loss for the year		(438)	(299)
Items that will not be classified to profit or loss:
Re-measurements of post-employment benefit obligation		242	(583)
Movement in deferred tax relating to retirement benefit obligation		(213)	116
Items that may be subsequently reclassified to profit or loss:
Exchange adjustment		(13)	(17)
		----------	----------
Other comprehensive income/(expense)		16	(484)
		----------	----------
Total comprehensive expense for the year attributable to equity shareholders		(422)	(783)
		--------	----------

 

 

Audited Consolidated Balance Sheet as at 31 December 2015

 

	Note	2015 (Audited) £'000	2014 (Audited) £'000
Assets
Non-current assets
Property, plant and equipment		6,102	5,952
Intangible assets		1,279	473
Goodwill		2,409	--
Deferred tax asset		1,446	1,694
		--------	----------
		11,236	8,119
		--------	----------
Current assets
Inventories		1,778	1,951
Trade and other receivables		2,340	1,840
Cash and cash equivalents		192	1,940
Derivative financial asset		11	4
Current tax asset		--	88
		--------	----------
		4,321	5,823
		--------	----------
Liabilities
Current liabilities
Trade and other payables		(4,653)	(2,083)
Finance lease obligations		(44)	--
		---------	---------
		(4,697)	(2,083)
		--------	----------
Net current (liabilities)/assets		(376)	3,740
		--------	----------
Non-current liabilities
Finance lease obligations		(66)	--
Retirement benefit obligation	3	(8,033)	(8,471)
Deferred tax liabilities		(458)	(603)
		--------	----------
Net assets		2,303	2,785
		--------	----------
Capital and reserves
Share capital		250	250
Retained earnings		2,062	2,531
Translation reserve		(9)	4
		--------	----------
Total equity		2,303	2,785
		--------	----------

 

 

Audited Consolidated Cash Flow Statement for the year ended 31 December 2015

 

		2015 (Audited) £'000	2014 (Audited) £'000
	Note
Cash flows from operating activities
Cash generated from/(used in) operations	5	171	(169)
Interest payable		(38)	--
UK corporation tax received		93	28
		--------	--------
Cash generated from/(used in) operating activities		226	(141)
Cash flows from investing activities
Interest received		1	15
Purchase of property, plant and equipment		(198)	(112)
Acquisition of subsidiary (net of cash acquired)		(3,585)	--
Purchase of intangible assets		(26)	(35)
Proceeds from sales of property, plant and equipment		112	25
		--------	--------
Net cash used in investing activities		(3,696)	(107)
Cash flows from financing activities
Equity dividends paid	6	(60)	(120)
Capital element of finance lease payments		(20)	--
New finance leases		130	--
Proceeds from borrowing		1,202	--
		--------	--------
Net cash generated from/(used in) financing activities		1,252	(120)
		--------	--------
Net decrease in cash and cash equivalents		(2,218)	(368)
Opening cash and cash equivalents		1,940	2,325
Exchange differences		(13)	(17)
		--------	--------
Closing cash and cash equivalents		(291)	1,940
		--------	--------

 

Audited Consolidated Statement of Changes in Shareholders' Equity

 

	Share capital £'000	Retained earnings £'000	Translation reserve £'000	Total equity £'000
1 January 2014	250	3,417	21	3,688
Loss for the year	-	(299)	--	(299)
Other comprehensive expense for the year	-	(467)	(17)	(484)
	----------	----------	----------	----------
Total comprehensive expense for the year	-	(766)	(17)	(783)
Dividends paid	-	(120)	-	(120)
	----------	----------	----------	----------
1 January 2015	250	2,531	4	2,785
Loss for the year	-	(438)	-	(438)
Other comprehensive income/(expense) for the year	-	29	(13	16
Total comprehensive expense for the year	----------	--------- (409)	-------- (13)	---------- (422)
Dividends paid	-	(60)	-	(60)
	----------	----------	----------	----------
31 December 2015	250	2,062	(9)	2,303
	----------	----------	----------	----------

 

The translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign operations.

Notes to the Audited Preliminary Announcement for the year ended 31 December 2015

 

1.	The preliminary financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 for the financial years ended 31 December 2015 and 31 December 2014, but has been derived from those accounts. These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRSIC interpretations as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial information included in this preliminary announcement does not include all the disclosures required by IFRS or the Companies Act 2006 and accordingly it does not itself comply with IFRS or the Companies Act 2006.   The accounting policies used in the preparation of this preliminary announcement have remained unchanged from those set out in the statutory accounts for the year ended 31 December 2014. They are also consistent with those in the full accounts for the year ended 31 December 2015 which have yet to be published.   Statutory accounts for 2014 have been delivered to the Registrar of Companies and those for the financial year ended 31 December 2015 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts and their opinion was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
2.	Exceptional item	2015 (Audited)	2014 (Audited)
		£'000	£'000
	Redundancy and compensation costs	(88)	(193)
	Acquisition of ESE	(193)	--
		------------	------------
		(281)	(193)
		------------	------------
	Costs relating to the acquisition of ESE relate to legal, accounting and advisory services together with bank facility costs.
3.	Retirement benefit obligation
		2015	2014
	Present value of funded obligation	(Audited) £'000	(Audited) £'000
	Fair value of scheme assets	21,993	22,397
	Net liability in balance sheet	(13,960)	(13,926)
		------------	------------
		8,033	8,471
		------------	------------
4.	Loss per share   Basic loss per share is based upon losses of £438,000 (2014: £299,000) and on 1,000,000 (2014: 1,000,000) ordinary shares in issue during the year.   There is no difference between basic loss per share and diluted loss per share for both years as there are no potentially dilutive shares in issue.
5.	Cash generated from/(used in) operating activities
		2015 (Audited)	2014 (Audited)
		£'000	£'000
	Loss before tax	(632)	(453)
	Net finance costs	341	352
	Depreciation and amortisation	530	424
	Profit on sale of property, plant and equipment	(99)	(7)
	Pension deficit contributions	(500)	(540)
	Decrease/(increase) in inventories	232	(53)
	Decrease in trade and other receivables	29	549
	Increase/(decrease) in trade and other payables	270	(441)
		------------	------------
	Cash generated from/(used in) operating activities	171	(169)
		------------	------------
6.	Dividends
	The interim dividend for 2014 and final dividends for the 2014 financial year of 2.0p and 4.0p, totalling £60,000 were paid and deducted from reserves in the year ended 31 December 2015. The interim dividend for 2013 and the final dividend for the 2013 financial year totalling £120,000 were paid and deducted from reserves in 2014.
7.	Availability of Report and Accounts
	The financial statements for the year ended 31 December 2015, will be issued to shareholders on 26 May 2016 and will be available to members of the public at the registered office of the Company and on the Company's website www.slingsby.com from that date. The statutory accounts for the year ended 31 December 2015 will be delivered to the Registrar following the Company's Annual General Meeting. The Annual General Meeting will be held at 10.00 am on 30 June 2016 at the Marriot Hollins Hall Hotel, Hollins Hill, Baildon, Shipley, BD17 7QW.