2 August 2022
PHSC PLC
(“PHSC”, the “Company” or the
“Group”)
Final Results for
the year ended 31 March 2022
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
its financial year ended 31 March
2022.
Financial Highlights
• Underlying EBITDA of £0.274m compared to
£0.505m in the prior year
• Statutory loss after tax of £0.631m compared
to a profit after tax of £0.087m in the prior year, mainly due to
writing off goodwill in respect of the Security Division
• Security Division impairment plus other
goodwill impairments totalling £0.793m
• Group sales revenue of £3.571m, up from
£3.289m in the prior year
• Income augmented by £30k of pandemic-related
grant funding, £411k less than the prior year
• Group net assets declined to £3.513m
following goodwill impairments
• Statutory loss per share of 4.76p compared
to earnings per share of 0.60p in the prior year
• 2,830,238 ordinary shares bought back and
subsequently cancelled (post period end), representing 19% of those
formerly in issue
• Cash reserves of £0.649m at year end post
completion of share buybacks, down from £1.237m for the prior
year
• Final dividend of 0.5p proposed, making a
total of 1.0p for the year matching the prior year’s total
|
|
31.3.22 |
|
31.3.21 |
|
|
£ |
|
£ |
(Loss)/profit before tax |
|
(577,798) |
|
189,988 |
Less: interest received |
|
(388) |
|
(999) |
Add: depreciation |
|
58,812 |
|
65,619 |
Add: impairment of B2BSG Solutions
Limited goodwill |
|
676,178 |
|
200,000 |
Add: impairment of Inspection
Services (UK) Limited goodwill |
|
117,240 |
|
- |
Add: impairment of RSA Environmental
Health Limited goodwill |
|
- |
|
50,000 |
Underlying EBITDA* |
|
274,044 |
|
504,608 |
* - 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 full 2022 Annual Report
This year’s annual general meeting (AGM) will be held at
10.00 a.m. on Thursday, 29 September 2022 at The Old Church, 31 Rochester
Road, Aylesford, Kent ME20 7PR.
The full annual report and accounts for the financial year to
31 March 2022 and notice of AGM are
expected to be posted to shareholders on or around 2 August 2022 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 14 October 2022 to shareholders on the register
on 30 September 2022.
For further information please contact:
PHSC plc
Stephen
King
Tel: 01622 717 7000
Stephen.king@phsc.co.uk
www.phsc.plc.uk
Strand Hanson Limited (Nominated
Adviser)
James Bellman / Matthew
Chandler
Tel: 020 7409 3494
Novum Securities Limited (Broker)
Colin
Rowbury
Tel: 020 7399 9427
About PHSC
PHSC, through its trading subsidiaries, Personnel Health &
Safety Consultants Limited, RSA Environmental
Health Limited, QCS International Limited, Inspection Services (UK)
Limited and Quality Leisure Management Limited, provides a range of
health, safety, hygiene, environmental and quality systems
consultancy and training services to organisations across the UK.
In addition, B2BSG Solutions Limited 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
(Withdrawl) Act 2018 (as amended).
CHIEF EXECUTIVE OFFICER’S REPORT
On behalf of the board, I am pleased to present my review of the
Group’s progress during the financial year 2021-22 as it left the
pandemic behind and transitioned towards a more normal trading
pattern. During this reporting period we successfully completed our
second share buyback programme, the initial programme having been
documented in last year’s report as a post balance sheet
event. Further details are set out later in this report along
with specific details on each subsidiary’s performance.
General business review and
outlook
The overall uplift in sales revenue is welcome, and to a large
extent offset the significant reduction in government grants
associated with the pandemic. However, the costs associated with
delivering our services greatly increased. This was due in part to
the resumption of routine expenditure on office materials, travel
and the like which had been largely suppressed during lockdown. In
addition, the return to 100% of salary for those on the Coronavirus
Job Retention Scheme (CJRS) had a sizeable impact. Considering
performance in the round, the board is pleased that the Group has
returned to a position where trading is profitable and cash
generative.
Post-pandemic it became clear to the board that the market for
products and services provided by the Security Division had been
badly affected by changes in shopping habits and an acceleration of
the shift toward on-line purchasing. With its predominantly retail
sector client base, this left B2BSG Solutions Limited (B2BSG)
exposed to greatly reduced sales from a diminishing number of
clients. Accordingly, the board believed it prudent and appropriate
to write off the carrying value of this division whilst continuing
to assist management in their attempts to turn its fortunes
around. Similarly, a view was taken that stock values should
be impaired in recognition of the lower demand for electronic
article surveillance (EAS) equipment. The majority of this product,
nevertheless, remains current and serviceable. It is worth noting
that B2BSG has reported a pre-management charges profit of
approximately £10k for Q1 of the current financial year which is an
improvement on the loss-making situation at the same stage in
2021-22.
As has been explained previously, the Security Division is
affected by exchange rate fluctuations, with all EAS equipment
being sourced from abroad and paid for in Euros or US dollars.
Exchange rate movements have seen a general weakening of Sterling
versus the USD with rates recently touching a two-year low.
Our Systems Division saw both revenue and profits rise by around
50% in response to the lifting of restrictions in Scotland where it is based, and the ability to
return to face-to-face training delivery for those clients that
preferred this.
The Safety Division performed very well and benefited from a
large contract for COVID-19 testing which was on a commission
basis. This is explained further below with respect to the results
for Personnel Health and Safety Consultants Limited (PHSCL).
It is noted that the Group’s cash reserves at the financial year
end (£0.649m) were around half that of 2020-21 (£1.237m) despite
the Group being cash-generative in terms of normal trading. Such
reduction is due to the successful implementation of our share
buyback programmes resulting in over 2.8m ordinary shares being acquired into treasury
and subsequently cancelled post period end. The total spent on
buybacks during the year was circa £0.65m inclusive of legal fees
and brokerage.
Now that we have a well-established and proven mechanism, the
board is again seeking shareholder approval for a replenished share
buyback authority at the Company’s forthcoming AGM. No
decision has been made as to whether or when, if duly approved at
the AGM, any further buyback programme will take place. This will
be determined by periodically assessing the Group’s cash position
and any anticipated call on resources for other purposes.
Accordingly, the proposed renewed authority simply provides the
board with maximum flexibility that it may or may not choose to
exercise.
The Group’s current cash position is approximately £0.718m which
is more than sufficient to meet its needs for the foreseeable
future and to cover the proposed dividend. An advantage of having
fewer shares in issue is that the cash required to maintain the
dividend at its current level per share is around 20% lower than it
would otherwise have been. In addition to maintaining a
strong bank balance, HSBC Bank plc provides us with a facility of
£50,000 to draw upon should the need arise which is due for renewal
in October 2022. The board expects to
renew the facility at its present level but does not currently
anticipate having to draw upon it.
The Group confirms that it did not apply for any Government loan
monies available to support UK businesses through the pandemic.
Net asset value
As stated in the general business review section above, the
board has written off the entire carrying value of the Security
Division (B2BSG) as a consequence of the decline in demand for the
goods and services that it provides and a highly competitive
marketplace. This impairment has resulted in a reduction in assets
of £0.676m. From a routine review of the carrying value of the
other subsidiaries, the board has determined that Inspection
Services (UK) Ltd is overvalued and should also be written down by
approximately £0.117m. No other subsidiaries are believed to be
held at inflated values based on their prospects for the current
year and the foreseeable future.
The year-end consolidated net assets, further to the goodwill
impairments and expenditure on share buybacks, total approximately
£3.513m. Based on the number of shares currently in issue this
equates to approximately 30p per ordinary share versus a prevailing
mid-market price of approximately 26.5p. The board welcomes the
narrowing of the gap between the Company’s asset value and market
share price.
Outlook
The Group is not immune from the uncertainty in both the
domestic and macroeconomic environments. Costs have been increasing
across all areas, with notable uplifts to the cost of
accommodation, energy supply, and travel including fuel. Management
have sought to help defray some of the impact on employees by
awarding generous pay rises albeit below the headline figure for
inflation. We have generally found that the market for both
administrative staff and fee-earning professionals has become far
more competitive, which has raised the expectations of current and
prospective new employees. There is limited scope to pass on the
effects of these additional costs to our clients, resulting in
margins being squeezed.
Despite the difficult trading environment, we are confident that
the Group can remain profitable and cash-generative throughout the
year. The management team are always seeking ways to work more
productively and to reduce costs to the lowest level reasonably
practicable.
Trading update
According to the most recent set of management accounts
(unaudited), in Q1 the Group generated revenue of approximately
£0.854m and EBITDA of approximately £96k. This compares well
with the Q1 position last year which showed income of approximately
£0.926m and EBITDA of approximately £72k.
Dividends
A total dividend of 1.0p per ordinary share (£146,772) was paid
in respect of the financial year ended 31 March 2021. An
interim dividend of 0.5p in respect of the financial year ended
31 March 2022 was paid in
February 2022 and, subject to
shareholder approval, a final dividend of 0.5p to be paid from
earnings from the financial year ended 31
March 2022 is proposed for payment in October 2022, thereby matching last year’s total.
Following the share buyback programmes completed in 2021-22, the
cost of the final dividend will fall approximately 19% from £73,386
to £59,235.
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
(excluding government grant funding) for the year increased by
8.5%.
Earnings before interest, taxation,
depreciation, amortisation and non-recurring costs (underlying
EBITDA)
The Group’s underlying EBITDA decreased from £504,608 in 2020-21
to £274,044 in 2021-22 with the improvement in business activity
failing to outweigh the reduction in COVID-19 support funding which
dropped from £441,125 to £29,527.
Staff turnover
Staff turnover is 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. During the year, five people left the employment of
the Group and five people joined, resulting in the total number of
employees at the year-end remaining unchanged at 44.
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
dividends from its subsidiaries.
B2BSG Solutions Limited (B2BSG)
- 2022: revenues of £749,200 yielding a loss of £79,200 after a
slow-moving stock write down of £55,000
- 2021: revenues of £1,136,600 yielding a profit of £13,800
The COVID-19 pandemic that drastically affected the previous
year continued to have an adverse impact, with many of B2BSG’s
clients having downsized their operations or ceased trading
entirely.
High street shops were able to reopen in mid-April 2021 in England, with some variation elsewhere in the
UK. This enabled the Company to bring staff back to work and to
cease reliance on the CJRS. Only £3k of CJRS funding was
received in 2021-22 representing a significant reduction from
around £133k in the prior year.
Sales revenues came in at £749k compared with £1.137m in the
previous year. There was an EBITDA loss of £65k for the year, after
discounting exceptional items (£7.6k of redundancy pay and £3.4k of
bad debts) and before management charges. The £3.4k of bad debts
compares favourably with debts of £22k written off in the previous
year.
Employment costs were lower, as staff numbers were reduced. Some
office space was returned to the relevant landlord and a lower
rental charge was incurred. One notable area where costs rose was
in carriage, where shipping fees went up in some cases by a factor
of ten, due to a worldwide shortage of capacity. All of the
Company’s products are imported.
Management expectations are for B2BSG to hold its own in 2022-23
and to see an improvement in the following year. As stated earlier,
Q1 performance has seen a profit of around £10k per the unaudited
management accounts. Ultimately, the performance of the business
will be largely dependent on the fortunes of the retail sector and
management’s ability to negotiate shocks to the global economy. Any
further deterioration in foreign exchange rates will harm the
Company’s prospects.
Inspection Services (UK) Limited
(ISL)
- 2022: revenues of £186,600 yielding a profit of £8,700
- 2021: revenues of £213,900 yielding a profit of £31,500
ISL achieved revenues of £186,600 which is a reduction of
£27,300 versus the prior year figure of £213,900. This led to a
reduced EBITDA before management charges of £18,600 compared to
£41,300 in 2020-21. Despite the lower sales, costs remained at the
same level as the previous year with notable rises in vehicle and
travel expenses. Hotel accommodation in particular was more
expensive than expected. This was caused by higher prices following
the lifting of COVID-19 lockdown restrictions along with the
failure of providers to pass on the effects of a reduction in VAT
to clients.
Approximately two-thirds of the Company’s business is placed by
insurance brokers on behalf of their clients, with the remaining
third being sales made directly to clients. When work is introduced
through an insurance broker, a commission becomes payable.
There have been a small number of former clients who ceased
trading during the pandemic or disposed of some work equipment
which led to a reduction in the requirement to conduct
examinations. It has not been possible to make up the shortfall
with new clients at this stage.
Personnel Health & Safety
Consultants Limited (PHSCL)
- 2022: revenues of £1,283,100 yielding a profit of £351,000
- 2021: revenues of £968,900 yielding a profit of £498,000
Turnover exceeded £1m for the first time in several years. This
was as a result of a one-off contract with an invoice value of over
£400k for supporting clients in the provision of COVID-19 testing
services. The work was carried out by external medical specialists
and generated a 5% premium for PHSCL. The profit of £351,000
was lower than the previous year and reflected an increased use of
subcontractors. The team worked incredibly hard for the first
three quarters of the year, but staff utilisation was lower in Q4
for a number of reasons that have subsequently been addressed and
rectified by management. The Safety Division is focussing on
acquiring an online management system to support its clients in
monitoring their compliance status, particularly those with
multiple sites. This should support the sales and marketing
functions who will be able to pitch for larger contracts where an
online offering is increasingly becoming a prerequisite of the
tender process.
QCS International Limited (QCS)
- 2022: revenues of £724,100 yielding a profit of £189,600
- 2021: revenues of £500,700 yielding a profit of £121,100
Despite the pandemic placing varied and changing constraints on
the business, the year saw sales and profits approaching levels
last achieved prior to the health emergency. Whilst training
was impacted considerably, consultancy work has been buoyant and
has made a significant contribution towards compensating for lost
training revenue. By the end of the financial year, training
was beginning to approach previous levels, suggesting that the
trend is towards more normal operating conditions.
Consultancy activity for the year was above normal
(pre-pandemic) levels. This was due to a combination of new
client activity, continued interest in the UK Responsible Person
services for medical devices, and excellent levels of repeat
business. Sales for consultancy approached £400,000 for the year
ended 31 March 2022, which is a
record performance for QCS.
The pandemic caused revenue from public (face-to-face) training
to drop to £112,000 from the previous year as there were times
during 2021-22 when training was constrained. Nevertheless, income
generated from those periods when training was possible resulted in
income more than doubling year on year to £237,000. By Q4 it
was pleasing to note that training income had fully recovered.
In January 2022, the Company lost
the services of one of its key consultants who specialised in
medical device work and recruitment of a possible replacement
remains ongoing in what is a difficult and competitive
market. A new consultant was engaged at the very end of the
financial year to support broader quality/environmental and health
and safety services.
Quality Leisure Management Limited
(QLM)
- 2022: revenues of £323,600 yielding a profit of £100,900
- 2021: revenues of £234,300 yielding a profit of £99,700
QLM started the financial year with most, if not all, support
service and retained clients either closed or heavily restricted
under COVID-19 legislation. This severely restricted the generation
of additional income from activities such as auditing. These
restrictions continued throughout the period and, whilst easing
gradually, restrictions of some kind remained in place for most of
the year.
The health and safety support service was the least affected
income stream. Guidance in respect of changes in COVID-19
legislation and best practice were topical questions together with
the recommissioning of equipment and facilities.
Profitability improved at the start of Q3 as facilities
progressively reopened and restrictions were relaxed to varying
degrees. Auditing and training became the priority as previously
closed or restricted facilities began to focus on ensuring normal
health and safety standards were in place and that staff were
competent to achieve or maintain them. Audits were and continue to
be, a strong part of the business.
Following the development of videoconferencing courses last
year, this delivery method remains popular. In addition to reducing
staff travel time and costs recharged to clients, it enables
greater accessibility to those companies only requiring a small
number of participants.
QLM has been involved as an expert witness in several legal
cases in recent years. With the legal system returning to relative
normality post-pandemic, this aspect of the business remains
active.
RSA Environmental Health Limited
(RSA)
- 2022: revenues of £304,000 yielding a profit of £53,600
- 2021: revenues of £235,100 yielding a profit of £57,400
Revenue was up by 29% to £304,000 despite the first half of the
financial year continuing to be affected by the COVID-19 pandemic
and associated lockdowns. The pandemic severely affected
revenue in Q1 and Q2 because RSA’s largest marketplace is the
education sector. Most of the school-based income reflects a
two-year audit and consultancy cycle. With lockdowns and
effective school closures in the corresponding period in 2020-21,
no new contracts were set up at that time, so no second-year
payments fell due. It was not until Q3 that the cycle of second
payments started to come through. In other areas there has been a
slow return to normal operations. As restrictions eased,
audits were booked for our NHS and hospitality clients and in the
latter part of the year revenue from these sectors has returned to
pre-pandemic levels with the employed staff working at full
capacity.
In previous years, the focus of the Company had been on the
SafetyMARK brand, providing safety services to the school
sector. Efforts have been made to diversify revenue streams
and this is resulting in a more even spread of income across the
five main services namely, training, SafetyMARK, health and safety
consultancy, health and safety advisory services and food safety
consultancy. Almost £100,000 of the total revenues was
generated by the combined health and safety streams, showing the
success of the diversification strategy.
SafetyMARK services saw revenues recover to finish above
expectations at £82,000. For the latter part of the year, revenues
were above previous years, and this strong demand continues.
Food safety consultancy has seen a return to pre-pandemic levels
of demand. Recently, some clients have increased the level of
service required because of the upturn in fortunes for the wider
hospitality sector.
PHSC plc
- 2022: net loss of £409,200 before management charges,
exceptional costs, interest and dividends received
- 2021: net loss of £382,400 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 relate to running an AIM quoted
Group. The 7% increase in the net loss is due to the reduction in
CJRS funding from £45,300 in 2020-21 to £3,700 in 2021-22.
PRINCIPAL RISKS
AND UNCERTAINTIES
Pandemic
The financial impact of the coronavirus pandemic eased in the
second half of the financial year with business activity starting
to return to pre-pandemic levels. Inevitably, there are legacy
impacts in particular on the high street where consumers’ shopping
habits have shifted towards on-line ordering, and this is a concern
to the security division where retail outlets form a significant
part of its customer base. Conversely, the systems and safety
divisions are experiencing a rebound in activity as clients 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 is more appealing to some
customers and this alternative continues 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 Systems Division
and is exploring non-regulatory areas of environmental work to add
to the current portfolio of services.
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 accelerated during the COVID-19 pandemic.
Any further material deterioration in the retail sector and
specifically in B2BSG’s client base would have a significant
negative effect on the Company’s and hence the Group’s prospects.
To mitigate any future negative effects, the Group has written off
the investment value of its Security Division and has made a
significant financial provision against the value of stock held in
its warehouse.
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. The Aylesford based businesses (PHSC plc, PHSCL,
ISL) have obtained certification to Cyber Essentials standard and
all staff across the Group have participated in on-line training to
reduce the risk of falling victim to phishing and other such
scams. All head office data is backed up to the Cloud and
removeable hard drives attached to the physical server are rotated
on a daily basis.
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
(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. Cash reserves ended the year at a high level
despite the completion of two successful share buybacks requiring
total funding (including costs) of £644,700 in the year ended
March 2022. The board is satisfied
that such reserves, along with the Group’s cash-generative trading
position and (unused) credit 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 once again thank all our
shareholders and employees for their ongoing loyalty and
support. The board is grateful for the continuing spirit of
teamwork and mutual support that is enabling the Group to move
forward positively in the aftermath of the COVID-19 pandemic.
Stephen King
Group Chief Executive Officer
2 August 2022
GROUP STATEMENT OF
FINANCIAL POSITION
as at 31 March 2022
|
Note |
|
31.3.22
£ |
|
31.3.21
£ |
Non-Current Assets |
|
|
|
|
|
Property, plant and equipment |
5 |
|
490,138 |
|
529,413 |
Goodwill |
6 |
|
2,235,045 |
|
3,028,463 |
Deferred tax asset |
14 |
|
15,591 |
|
2,017 |
|
|
|
|
|
|
|
|
|
2,740,774 |
|
3,559,893 |
Current Assets |
|
|
|
|
|
Stock |
8 |
|
185,685 |
|
259,760 |
Trade and other receivables |
7 |
|
726,378 |
|
590,128 |
Cash and cash equivalents |
9 |
|
649,363 |
|
1,237,483 |
|
|
|
|
|
|
|
|
|
1,561,426 |
|
2,087,371 |
Total Assets |
|
|
4,302,200 |
|
5,647,264 |
Current Liabilities |
|
|
|
|
|
Trade and other payables |
11 |
|
617,077 |
|
518,245 |
Right of use lease liabilities |
13 |
|
30,632 |
|
31,856 |
Current corporation tax payable |
|
|
55,112 |
|
88,011 |
|
|
|
|
|
|
|
|
|
702,821 |
|
638,112 |
Non-Current Liabilities |
|
|
|
|
|
Right of use lease
liabilities |
13 |
|
24,184 |
|
38,865 |
Deferred tax liabilities |
14 |
|
61,842 |
|
50,988 |
|
|
|
|
|
|
|
|
|
86,026 |
|
89,853 |
Total Liabilities |
|
|
788,847 |
|
727,965 |
Net Assets |
|
|
3,513,353 |
|
4,919,299 |
Capital and reserves
attributable to equity holders of the Group |
|
|
|
|
Called up share capital |
10 |
|
1,467,726 |
|
1,467,726 |
Share premium account |
10 |
|
1,916,017 |
|
1,916,017 |
Capital redemption reserve |
|
|
143,628 |
|
143,628 |
Merger relief reserve |
|
|
133,836 |
|
133,836 |
Treasury shares |
|
|
(644,738) |
|
- |
Retained earnings |
|
|
496,884 |
|
1,258,092 |
|
|
|
|
|
|
|
|
|
3,513,353 |
|
4,919,299 |
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year
ended 31 March 2022
|
Note |
|
31.3.22
£ |
|
31.3.21
£ |
Continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
3,570,626 |
|
3,289,462 |
|
|
|
|
|
|
Cost of sales |
15 |
|
(1,938,870) |
|
(1,764,915) |
|
|
|
|
|
|
Gross profit |
|
|
1,631,756 |
|
1,524,547 |
|
|
|
|
|
|
Administrative expenses |
15 |
|
(1,446,051) |
|
(1,528,160) |
Goodwill impairment |
6 |
|
(793,418) |
|
(250,000) |
|
|
|
|
|
|
Government grants |
16 |
|
29,527 |
|
441,125 |
Other income |
|
|
- |
|
1,477 |
|
|
|
|
|
|
(Loss)/profit from operations |
|
|
(578,186) |
|
188,989 |
|
|
|
|
|
|
Finance income |
19 |
|
388 |
|
999 |
|
|
|
|
|
|
(Loss)/profit before taxation |
|
|
(577,798) |
|
189,988 |
|
|
|
|
|
|
Corporation tax expense |
20 |
|
(53,205) |
|
(102,241) |
|
|
|
|
|
|
(Loss)/profit for the year after
tax attributable to owners |
|
|
|
|
|
of the parent |
|
|
(631,003) |
|
87,747 |
|
|
|
|
|
|
Other comprehensive income |
|
|
- |
|
- |
|
|
|
|
|
|
Total comprehensive (loss)/income
attributable to owners |
|
|
|
|
|
of the parent |
|
|
(631,003) |
|
87,747 |
|
|
|
|
|
|
Basic and diluted (loss)/earnings
per share from continuing operations |
21 |
|
(4.76)p |
|
0.60p |
|
|
|
|
|
|
PHSC PLC
GROUP STATEMENT OF CHANGES IN
EQUITY
for the year
ended 31 March 2022
|
Share
Capital
£ |
Share
Premium
£ |
Merger Relief
Reserve
£ |
Capital
Redemption
Reserve
£ |
Treasury
Shares
£ |
Retained
Earnings
£ |
Total
£ |
Balance at 1 April 2020 |
1,467,726 |
1,916,017 |
133,836 |
143,628 |
- |
1,317,117 |
4,978,324 |
Profit for year attributable to
equity holders |
- |
- |
- |
- |
- |
87,747 |
87,747 |
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 |
Balance at 1 April 2021 |
1,467,726 |
1,916,017 |
133,836 |
143,628 |
- |
1,258,092 |
4,919,299 |
Loss for year attributable to equity
holders |
- |
- |
- |
- |
- |
(631,003) |
(631,003) |
Dividends |
- |
- |
- |
- |
- |
(130,205) |
(130,205) |
Purchase of own shares |
- |
- |
- |
- |
(644,738) |
- |
(644,738) |
Balance at 31 March 2022 |
1,467,726 |
1,916,017 |
133,836 |
143,628 |
(644,738) |
496,884 |
3,513,353 |
PHSC PLC
GROUP STATEMENT OF
CASH FLOWS
for the year ended
31 March 2022
|
Note |
|
31.3.22
£ |
|
31.3.21
£ |
Cash flows from operating
activities: |
|
|
|
|
|
Cash generated from operations |
I |
|
313,530 |
|
702,188 |
Tax paid |
|
|
(89,213) |
|
(37,183) |
Net cash generated from operating
activities |
|
|
224,317 |
|
665,005 |
|
|
|
|
|
|
Cash flows used in investing
activities |
|
|
|
|
|
Purchase of property, plant and
equipment |
|
|
(22,117) |
|
(8,739) |
Proceeds from disposal of fixed
assets |
|
|
140 |
|
4,333 |
Interest received |
|
|
388 |
|
999 |
Net cash used in investing
activities |
|
|
(21,589) |
|
(3,407) |
|
|
|
|
|
|
Cash flows used in financing
activities |
|
|
|
|
|
Payment of lease
liabilities |
|
|
(15,905) |
|
(33,262) |
Purchase of own shares |
|
|
(644,738) |
|
- |
Dividends paid to shareholders |
|
|
(130,205) |
|
(146,772) |
Net cash used in financing
activities |
|
|
(790,848) |
|
(180,034) |
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)/increase in cash
and cash equivalents |
|
|
(588,120) |
|
481,564 |
Cash and cash equivalents at
beginning of year |
|
|
1,237,483 |
|
755,919 |
Cash and cash equivalents at end
of year |
|
|
649,363 |
|
1,237,483 |
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 2022
|
|
|
31.3.22
£ |
|
31.3.21
£ |
|
|
|
|
|
|
I. CASH GENERATED FROM
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit from operations |
|
|
(577,798) |
|
188,989 |
Depreciation charge |
|
|
58,812 |
|
65,619 |
Goodwill impairment |
|
|
793,418 |
|
250,000 |
Loss on sale of fixed assets |
|
|
2,441 |
|
1,913 |
Decrease in stock |
|
|
74,075 |
|
4,541 |
(Increase)/decrease in trade and
other receivables |
|
|
(136,250) |
|
295,819 |
Increase/(decrease) in trade and
other payables |
|
|
98,832 |
|
(104,693) |
Cash generated from
operations |
|
|
313,530 |
|
702,188 |
Notes
The financial information set out above does not constitute the
Group’s financial statements for the years ended 31 March 2022 or 31 March
2021 but is derived from those financial statements.
Statutory financial statements for 2021 have been delivered to the
Registrar of Companies and those for 2022 have been approved by the
board and will be delivered after dispatch to shareholders. The
auditors have reported on the 2021 and 2022 financial statements
which carried unqualified audit reports, did not include any
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
2021; half was paid in February
2021 and the balance in October
2021. An interim dividend of 0.5p in respect of the
financial year ended 31 March 2022
was paid in February 2022 and,
subject to shareholder approval at the AGM, a final dividend of
0.5p will be payable on 14 October
2022 to shareholders on the register on 30 September 2022, thereby matching the total of
1.0p paid last year.