TIDMPHSC
8 August 2023
PHSC PLC
("PHSC", the "Company" or the "Group")
Final Results for the year ended 31 March 2023
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, is pleased to announce its audited results for its financial
year ended 31 March 2023.
FINANCIAL HIGHLIGHTS
· Underlying EBITDA of £0.366m compared to £0.274m in the prior year
· Profit after tax of £0.243m compared to a loss after tax of £0.631m in
the prior year, the latter mainly due to writing off goodwill in respect of the
Security Division
· Group revenue of £3.438m, down from £3.571m in the prior year
· Group net assets increased to £3.638m from £3.513m
· Statutory earnings per share of 2.05p compared to a loss per share of
4.76p in the prior year
· Cash reserves of £0.750m at the year end up from £0.649m for the prior
year
· Final dividend of 1.0p proposed, making a total of 1.5p for the year
compared with 1.0p last year
31.3.23 31.3.22
£ £
Profit/(loss) before tax 304,598 (577,798)
Less: interest received (1,346) (388)
Add: depreciation 63,034 58,812
Add: impairment of B2BSG - 676,178
Solutions Limited goodwill
Add: impairment of Inspection - 117,240
Services (UK) Limited goodwill
Underlying EBITDA* 366,286 274,044
* - Underlying EBITDA is calculated as earnings before interest, tax,
depreciation and impairment charges. 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 ("AGM") and Availability of full 2023 Annual Report
This year's AGM will be held at 10.00 a.m. on Thursday, 28 September 2023 at The
Old Church, 31 Rochester Road, Aylesford, Kent ME20 7PR.
The full annual report and accounts for the financial year to 31 March 2023 and
notice of AGM are expected to be posted to shareholders on or around 10 August
2023 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 its forthcoming
AGM, an increased final dividend of 1.0p per share will be payable on 13 October
2023 to shareholders on the register on 29 September 2023.
For further information please contact:
PHSC plc
Stephen KingTel: 01622 717 700
Stephen.king@phsc.co.uk (https://www.investegate.co.uk/phsc-plc--phsc
-/prn/trading-update/20170526111953P8859/null)
www.phsc.plc.uk
Strand Hanson Limited (Nominated Adviser)Tel: 020 7409 3494
James Bellman / Matthew Chandler
Novum Securities Limited (Broker)Tel: 020 7399 9427
Colin Rowbury
About PHSC
PHSC, through its trading subsidiaries, Personnel Health & Safety Consultants
Ltd, RSA Environmental Health Ltd, QCS International Ltd, Inspection Services
(UK) Ltd and Quality Leisure Management Ltd, provides a range of health, safety,
hygiene, environmental and quality systems consultancy and training services to
organisations across the UK. In addition, B2BSG Solutions Ltd 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 (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
CHIEF EXECUTIVE OFFICER'S REPORT
I am pleased to report that the Group has built on the post-pandemic progress
made in the prior year and has generally returned to normal trading across all
subsidiaries. With the carrying value of our Security Division having been
written down to zero in 2021-22, there is no impairment to report for 2022-23.
Accordingly, the Group returned to profitability and the board is proposing an
increased final dividend to shareholders.
The board has determined that a higher distribution is justified in conjunction
with a planned third share buyback programme, which will be confirmed, and
further details announced as soon as practicable following publication of the
Annual Report utilising the existing authority. To maintain flexibility, the
board is seeking renewed authority at the forthcoming 2023 AGM for further
potential share buybacks however shareholders should not assume that such
renewed authority, if granted, will necessarily be utilised.
Individual subsidiary performance is considered in some detail later in this
report.
GENERAL BUSINESS OVERVIEW AND OUTLOOK
Security Division
Having written off the carrying value of this part of the Group's business in
2021-22, management focussed on how best to commence a rebuilding of the
division through better cost control and improved margins. This is a medium
-term objective and is subject to variables outside the Company's control such
as exchange rates, costs of shipping and the general economic climate as it
affects the retail sector. Prior to central charges and some write-down of slow
-moving stock, the business broke even over the year under review. There were
increases to both revenues and costs, however profit margins remained suppressed
due to the aforementioned external factors. It is anticipated that there will
be some respite in that transportation costs have progressively reduced from the
2021-22 highs and the business has been able to raise prices on some contracts.
The client base remains overwhelmingly centred on the retail sector and includes
supermarkets, department stores and garden centres.
Systems Division
Results from this part of the Group's business were extremely encouraging and
the division built upon the good progress made in 2021-22. Revenue was up more
than £100,000, the majority of which fed through to the bottom line as evident
in the more detailed financial summary later in this report.
Consultancy sales were strong throughout the year and benefitted from long-term,
valuable contracts on safety support for regular clients. Sales of UK
Responsible Person services in connection with the supply of medical devices
were higher than anticipated due to both additional clients, and increased work
from the existing client base following changes in the regulatory framework for
registration.
Training delivery returned to pre-pandemic levels and the year ended with strong
sales figures for both in-house and public training.
Safety Division
Progress was made in respect of the profitability of servicing clients in the
education and leisure sectors, although higher revenues were adversely impacted
by the higher costs incurred in connection with delivering our services.
Additional costs were experienced throughout the division, compounded by staff
salaries being increased twice during the year to mitigate against persistently
high inflation rates and rising domestic energy costs.
Total revenue was markedly lower due to a large commission-only agreement in
respect of COVID-19 testing during the pandemic which positively skewed the 2021
-22 results.
Cash reserves
Cash at bank increased year-on-year from approximately £649,000 to £750,000
reflecting the cash generative nature of our operations. The total cost of
servicing dividends, maintained at the same level, was lower, as a result of
approximately 2.8 million fewer ordinary shares being in issue following the
successful buyback programme implemented in the prior year. As noted above, it
is proposed that, subject to shareholder approval at the forthcoming AGM, the
final dividend be increased to return a greater proportion of cash to
shareholders, given that the Group remains cash-generative with excess reserves
for its currently foreseeable requirements.
The Group's cash position following payment of the proposed enhanced final
dividend and planned further share buyback programme, should be more than
sufficient for all currently anticipated expenditure. To underpin this position
and provide flexibility/headroom the Group also has a currently unutilised
facility with HSBC Bank plc of an initial £50,000 in the unlikely event it is
required.
The Group's only borrowings relate to certain leases in respect of land and
buildings and motor vehicles, further details of which are provided in note 13
to the full annual report and accounts.
Net asset value
The Group's net asset value of approximately £3.638m equates to a little over
30p per ordinary share and has remained consistently higher than the Company's
market share price on AIM. The equivalent net asset value at the end of the
previous year was circa 3 per cent. lower, at approximately £3.513m.
Outlook
Management expectations across the Group, despite the slow start to the year
based on Q1 figures, are that 2023-24 has the potential to be another successful
year. Where it is practical to do so, we will seek to apply modest price
increases to our fee rates in a bid to recover the majority of the extra costs
we are facing. In the current environment, some areas of expenditure are almost
certain to continue to rise but others including energy bills and shipping of
security products appear more stable. Recruitment and retention of personnel
remains challenging and represents our most significant cost category.
Each subsidiary currently appears to be on a stable footing and are well placed
to continue to trade profitably and generate cash flow over the remainder of the
current financial year.
Trading update
Unaudited Group management accounts for Q1 of the current financial year show
total revenue of approximately £0.754m and EBITDA of approximately £49,100 (Q1
2022-23: £0.862m and £0.1m respectively).
Dividends
A total dividend of 1.0p per ordinary share (£124,020) was paid in respect of
the financial year ended 31 March 2022. An interim dividend of 0.5p in respect
of the financial year ended 31 March 2023 was paid in February 2023 (£59,190)
and, subject to shareholder approval, a final dividend of 1.0p to be paid from
earnings from the financial year ended 31 March 2023 is proposed to be paid in
October 2023, representing an increase of 0.5p or 50 per cent. on last year's
total.
PERFORMANCE BY TRADING SUBSIDIARY
The Group currently utilises 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 its underlying businesses are
performing relative to historical data. It enables any trend to be detected,
interpreted and acted upon as appropriate. Consolidated Group revenues for the
year decreased by approximately 3.7% but when a £400k adjustment is made to the
2021-22 turnover for a one-off contract with a single customer for COVID-19
testing services, a 7.5% increase in turnover is evident, which the board views
as being a good outturn in the current challenging market conditions.
Earnings before interest, taxation, depreciation and amortisation (underlying
EBITDA)
The Group's underlying EBITDA increased from £274,044 in 2021-22 to £366,286 in
2022-23.
Staff turnover
Staff turnover is closely 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, 3 people left the employment of the
Group and no new staff were recruited, resulting in 34 employees at the year
end, excluding 7 PHSC plc and subsidiary directors.
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. Performance is based on those factors within a subsidiary director's
control, such that results are shown exclusive of management charges and
taxation and any impairment provision judged to be necessary. The parent
company 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)
· 2023: revenues of £829,900 yielding a loss of £9,100 after a slow-moving
stock write down of £9,100
· 2022: revenues of £749,200 yielding a loss of £79,200 after a slow
-moving stock write down of £55,000
B2BSG ended the year with sales that were £80k higher than in 2021-22. An end
of year adjustment for currency revaluation resulted in a total negative loss
variance of £7.3k due to adverse exchange rates over the course of the year.
Effectively, the business traded at around break-even before management charges
and a £9.1k year-end stock provision. This compares very favourably with the
loss sustained in the previous year.
A two-year contract with a national supermarket group, awarded before the Brexit
protocol was known, came to an end in March 2023. Costs associated with this
particular contract had led to an almost total elimination of gross margin.
Costs were higher than anticipated due to an Irish VAT registration being
required, product inflation which we were unable to recover as prices were
fixed, and an escalation in transport costs. Upon its expiry, this contract was
formally renegotiated and renewed for a further two years on much more
favourable terms, which should facilitate the company's recovery strategy.
Another national supermarket chain is embarking on a refurbishment exercise for
its security infrastructure in 2023-24, and B2BSG are in the early stages of
installing equipment to assist them in carrying out their programme.
The mix of clients now has more of a bias towards food retail. Some economists
are suggesting that there may be signs of recovery in bricks and mortar retail
activity more generally which, if borne out, would bode well for B2BSG.
Inspection Services (UK) Limited (ISL)
· 2023: revenues of £198,100 yielding a profit of £7,000
· 2022: revenues of £186,600 yielding a profit of £8,700
ISL achieved increased revenues of £198,100, being £11,500 ahead of the prior
year's total sales of £186,600. The resulting profit achieved fell by £1,700
year-on-year to £7,000. The improvement in revenues was more than offset by
higher costs incurred in delivering the services, most notably in terms of
travel and accommodation charges, which increased by almost £3,000.
Subcontractor costs rose by £2,500 and were approximately 40% higher than in
2021-22. Staff salaries were increased twice during the year to mitigate against
high inflation figures and rising domestic energy costs. Such pay adjustments
were necessary but resulted in around £4,000 of unplanned additional
expenditure. Most of ISL's work is sourced through insurance brokers in exchange
for commission payments. Broker commissions were similar to the prior year.
There were no bad debts arising during the year and the company remains cashflow
-positive. Overall, its client portfolio remains stable, with most work
comprising repeat business.
Personnel Health & Safety Consultants Limited (PHSCL)
· 2023: revenues of £806,700 yielding a profit of £268,300
· 2022: revenues of £1,283,100 yielding a profit of £351,000
Trading returned to more normal levels after maximising opportunities for safety
and risk management brought about by the COVID-19 pandemic. PHSCL's revenue and
profit were lower than the previous year but in line with management's
expectations. During the year, online systems continued to be reviewed to help
streamline the business and optimise the company's ability to pitch for larger
contracts as well as to widen its service offering to existing clients. There
has been an increasing level of interest expressed from both prospective and
current customers as a result of applying a personal touch whereby customers are
able to speak to a person rather than automated support. This approach will
continue to be promoted whilst developing ways to enhance services with online
systems that also adopt a more personal perspective. The business's main
challenge at the current time is its ability to attract the right level of
consultant expertise due to a general skills shortage which goes wider than
PHSCL. Subject to securing the services of appropriately qualified fee-earning
staff there is confidence in respect of opportunities to grow revenue.
QCS International Limited (QCS)
· 2023: revenues of £834,600 yielding a profit of £272,100
· 2022: revenues of £724,100 yielding a profit of £189,600
Trading has returned to pre-COVID-19 levels, with consultancy sales exceeding
£400,000 for the first time. There continues to be a high level of repeat
business combined with income from new clients with whom long-term relationships
will be sought. Income from the UK Responsible Person service for medical
devices exceeded management's expectations by a considerable margin due to a
mixture of new clients and increased work from the existing client base
following changes in the regulatory framework for registration. Training is now
back at pre-pandemic levels; the year ended with very positive sales figures for
both public and in-house courses, with combined training income approaching
£350,000 for the year. To meet and manage demand, the company calls upon the
services of consultants employed by other Group companies as appropriate and has
ambitions to grow revenues in the year ahead. Profit for the year was £272,100
(compared to £189,600 in 2021-22) which reflects a combination of improved sales
and tight cost control.
Quality Leisure Management Limited (QLM)
· 2023: revenues of £402,400 yielding a profit of £137,500
· 2022: revenues of £323,600 yielding a profit of £100,900
Business started strongly in 2022 for both auditing and training as there was
pent-up demand post the pandemic abating. Training requirements dropped slightly
towards the latter part of the financial year though training via video
conferencing remained popular. In addition to reducing staff travel time and
costs recharged to clients, video conferencing affords greater accessibility to
those clients only requiring a small number of participants or for those who
were unable to attend the in-house delivered course.
Demand for audits remained strong, involving support for clients in verifying
processes and procedures as their facilities returned to fully operational
status. Both audit and training income streams were significantly up on
management's expectations.
Consultancy in relation to health and safety and quality systems was a
significant source of income in 2022-23 with QLM supporting clients in the
development of their policies, processes, procedures and systems.
Expert witness work was lower than in previous years as leisure facilities were
closed for significant periods during the pandemic and UK courts are struggling
to catch up with delays and postponements.
Cost of sales increased in proportion to income. Consultant and subcontractor
salaries and fees were reflective of the higher costs of delivery as well as
greater activity.
RSA Environmental Health Limited (RSA)
· 2023: revenues of £365,900 yielding a profit of £69,800
· 2022: revenues of £304,000 yielding a profit of £53,600
Annual revenue showed a 20% increase compared to 2021-22 and the company is now
trading at similar levels to those experienced prior to the pandemic. The
increase in sales led to profits not seen since 2018-19. The majority of income
streams were above expectations, with the exception of general health and safety
consultancy services but this was only because consultants' fee earning time was
being utilised for the provision of other services. Food safety consultancy has
seen some welcome growth over the last year.
Rather than employ additional members of staff, employees from elsewhere within
the Group and trusted associates were used to provide extra fee-earning
capability. Such strategy helped to keep costs under control and enabled the
company to deal efficiently with the peaks and troughs in its workload.
In previous years, the company's focus has been to diversify its service
offering and strengthen its presence in the markets in which it operates. These
efforts have continued and resulted in a more even spread of revenues across the
services provided. This will continue to be a focus to make the company more
resilient.
SafetyMARK services saw revenues continue to recover. Demand for these services
remains strong especially within the independent school's market. There is a
high retention rate with schools demonstrating that they see value in the
services RSA offers.
Training services remain strong, with a focus on school-based Institution of
Occupational Safety and Health (IOSH) accredited training courses. These have
proved very popular with schools and demand continues to be strong with good
profits achieved.
PHSC plc
· 2023: net loss of £442,300 before management charges, interest and
dividends received
· 2022: net loss of £409,200 before management charges, goodwill
impairment, 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.
PRINCIPAL RISKS AND UNCERTAINTIES
Pandemic
The financial impact of the coronavirus pandemic continued to ease with business
activity returning towards pre-pandemic levels. Inevitably, there are legacy
impacts in particular on the high street where consumers' shopping habits have
shifted towards greater on-line ordering, and this represents a concern to the
Security Division where retail outlets form a significant part of its customer
base. Conversely, the Systems and Safety Divisions are continuing to experience
a rebound in activity as clients catch up on projects that were previously
deferred or cancelled. 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 continues to explore 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 wrote off the carrying value of its Security Division in 2021
-22 in full and periodically reviews the need to make 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 and ISL) have been re-certified 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 constraint 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 its licences and accreditations are
maintained.
Climate risk
The board is mindful of climate risk and will continue to evaluate what
potential implications the changing climate may have on both the business
activities of the Group and its clients.
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's 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 higher level than in 2021-22. 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 cost of the proposed
enhanced final dividend is factored into the board's calculations in this
regard. 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, employees
and other stakeholders for continuing to place their trust in us and for
enabling 2022-23 to be a successful year.
Stephen King
Group Chief Executive
7 August 2023
GROUP STATEMENT OF FINANCIAL POSITION
as at 31March2023
31.3.23 31.3.22
£ £
Non-Current Assets 468,490 490,138
Property, plant and equipment
Goodwill 2,235,045 2,235,045
Deferred tax asset 11,554 15,591
2,715,089 2,740,774
Current Assets 200,169 185,685
Stock
Trade and other receivables 674,372 726,378
Cash and cash equivalents 749,627 649,363
1,624,168 1,561,426
Total Assets 4,339,257 4,302,200
Current Liabilities 531,422 617,077
Trade and other payables
Right of use lease liabilities 25,137 30,632
Current corporation tax payable 56,919 55,112
613,478 702,821
Non-Current Liabilities 25,414 24,184
Right of use lease liabilities
Deferred tax liabilities 62,223 61,842
87,637 86,026
Total Liabilities 701,115 788,847
Net Assets 3,638,142 3,513,353
Capital and reserves 1,184,704 1,467,726
attributable to equity holders
of the Group
Called up share capital
Share premium account 1,916,017 1,916,017
Capital redemption reserve 426,650 143,628
Merger relief reserve 133,836 133,836
Treasury shares - (644,738)
Retained earnings (23,065) 496,884
3,638,142 3,513,353
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2023
31.3.23 31.3.22
£ £
Continuing operations: 3,437,624 3,570,626
Revenue
Cost of sales (1,612,543) (1,938,870)
Gross profit 1,825,081 1,631,756
Administrative expenses (1,524,829) (1,446,051)
Goodwill impairment - (793,418)
Government grants - 29,527
Other income 3,000 -
Profit/(loss) from operations 303,252 (578,186)
Finance income 1,346 388
Profit/(loss) before taxation 304,598 (577,798)
Corporation tax expense (61,339) (53,205)
Profit/(loss) for the year after tax 243,259 (631,003)
attributable to owners of the parent
- -
Other comprehensive income
Total comprehensive income/(loss) 243,259 (631,003)
attributable to owners of the parent
Basic earnings/(loss) per share from 2.05p (4.76)p
continuing operations (p)
GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2023
Share Share Merger Capital Treasury
Retained Total
Capital Premium Relief Redemption Shares
Earnings
Reserve
£
£ £ Reserve £ £
£
£
Balance at 1 1,467,726 1,916,017 133,836 143,628 (644,738)
496,884 3,513,353
April 2022
Profit for
year
attributable
to
equity - - - - -
243,259 243,259
holders
Dividends - - - - -
(118,470) (118,470)
Cancellation (283,022) 283,022 644,738
(644,738) -
of
own shares
Balance at 1,184,704 1,916,017 133,836 426,650 -
(23,065) 3,638,142
31
March 2023
Balance at 1 1,467,726 1,916,017 133,836 143,628 -
1,258,092 4,919,299
April 2021
Loss for
year
attributable
to
equity - - - - -
(631,003) (631,003)
holders
Dividends - - - - -
(130,205) (130,205)
Purchase of - - - - (644,738) -
(644,738)
own
shares
Balance at 1,467,726 1,916,017 133,836 143,628 (644,738)
496,884 3,513,353
31
March 2022
GROUP STATEMENT OF CASH FLOWS
for the year ended 31 March 2023
Note 31.3.23 31.3.22
£ £
Cash flows from operating activities: I 318,153 313,530
Cash generated from operations
Tax paid (55,114) (89,213)
Net cash generated from operating 263,039 224,317
activities
Cash flows used in investing activities (41,386) (22,117)
Purchase of property, plant and equipment
Proceeds from disposal of fixed assets - 140
Interest received 1,346 388
Net cash used in investing activities (40,040) (21,589)
Cash flows used in financing activities (4,265) (15,905)
Payment of lease liabilities
Purchase of own shares - (644,738)
Dividends paid to shareholders (118,470) (130,205)
Net cash used in financing activities (122,735) (790,848)
Net increase/(decrease) in cash and cash 100,264 (588,120)
equivalents
Cash and cash equivalents at beginning of 649,363 1,237,483
year
Cash and cash equivalents at end of year 749,627 649,363
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 2023
31.3.23 31.3.22
£ £
I. CASH GENERATED FROM OPERATIONS
Profit/(loss) from operations 303,252 (577,798)
Depreciation charge 63,034 58,812
Goodwill impairment - 793,418
Loss on sale of fixed assets - 2,441
(Increase)/decrease in stock (14,484) 74,075
Decrease/(increase) in trade and other receivables 52,006 (136,250)
(Decrease)/increase in trade and other payables (85,655) 98,832
Cash generated from operations 318,153 313,530
Notes to the consolidated financial information
The consolidated financial information set out above does not constitute the
Group's financial statements for the years ended 31 March 2023 or 31 March 2022
but is derived from those financial statements. Statutory financial statements
for 2022 have been delivered to the Registrar of Companies and those for 2023
have been approved by the board and will be delivered after dispatch to
shareholders. The auditors have reported on the 2022 and 2023 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 was paid in respect of the year
ended 31 March 2022; £64,830 was paid in January 2022 and the balance of £59,190
in October 2022. An interim dividend of 0.5p in respect of the year ended 31
March 2023 was paid in January 2023 (£59,190) and, subject to shareholder
approval at the AGM, a final dividend of 1p per share will be payable on 13
October 2023 to shareholders on the register on 29 September 2023, thereby
making a total of 1.5p for the year.
This information was brought to you by Cision http://news.cision.com
END
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