Half-yearly Report
PHSC PLC Interim Report 2009
____________________________________________
GROUP CHIEF EXECUTIVE OFFICER'S STATEMENT
for the six months ended 30 September 2009
Financial Highlights
* Group turnover (consolidated) for the period is down 8% at £2.208m compared
with £2.401m for the same period last year.
* Retained profit of £117,000 after tax provision and goodwill impairment,
compared with £121,000 for the same period last year.
* Diluted earnings per share at the interim stage are virtually unchanged at
1.06p compared with 1.04p achieved in the corresponding period last year.
* A total of 500,000 Ordinary Shares in PHSC plc were purchased and cancelled
in the period at cost of £90,000.
* Net cash generated from operating activities was £297,000 (£188,000 outflow
in the same period last year). After fixed asset purchases and disposals,
repayment of borrowings, purchase of own shares and payment of dividends
this led to a net cash increase of £68,000 in the period.
* Overall cash and cash equivalents stood at £911,000 at the end of the
period compared with £843,000 at the year ended 31 March 2009.
Corporate review
Post balance sheet events
Repayment of borrowings
In November 2009 the remaining balance of the mortgage on our Raunds premises
of approximately £40,000 was repaid. This means that the Group has no
outstanding loans.
Acquisitions
The final instalment due for the acquisition of In House the Hygiene Management
Company was paid in cash in October 2009.
We are in the advanced stages of due diligence procedures relating to the
proposed acquisition of a health and safety consultancy that specialises in the
leisure sector. An announcement will be made at the appropriate time, with
completion scheduled for the end of the calendar year.
Performance by Trading Subsidiaries
Profit/loss figures for individual subsidiaries are stated before tax and
inter-company charges, including the costs of operating the plc which are
recovered through management charges to trading subsidiaries.
Adamson's Laboratory Services Limited
Invoiced sales of £1,081,905 yielding a profit of £155,633 (the figures for the
same period last year were £1,273,687 and £236,680).
Envex Company Limited
Invoiced sales of £102,599 yielding a profit of £12,781 for the period (the
figures for the same period last year were £121,029 and £28,471).
In-House The Hygiene Management Company Limited
Invoiced sales of £85,584 yielding a profit of £14,980 (the figures for the
same period last year were £131,331 and a profit of £7,855).
Inspection Services (UK) Limited
Invoiced sales of £139,014 yielding a profit of £11,605. There are no
comparable figures for last year as the company was not part of the Group at
that time.
Personnel Health and Safety Consultants Limited
Invoiced sales of £492,226 yielding a profit of £213,845 (the figures for the
same period last year were £509,016 and £236,881).
RSA Environmental Health Limited
Invoiced sales of £307,303 yielding a loss of £1,457 (the figures for the same
period last year were £377,673 and a loss of £31,203).
Dividend
The Board is not recommending payment of an interim dividend, but expects to
propose an appropriate final dividend at the end of the year.
Prospects
The Group continues to suffer from the effects of recession in the UK economy.
This has led to lower orders and reduced margins on those sales that have been
achieved. Nevertheless we believe we are better placed than many of our peers,
with sector analysts suggesting that one in four safety consultancy practices
are trading at a loss.
With the recent repayment of the last of our borrowings, a considerable cash
balance, and a proposed acquisition in the pipeline, we are confident that we
have the ability to grow revenues in the second half of the year. Margins will
continue to be under pressure but we will resist the temptation to generate
revenue at the expense of profit.
Stephen King - Group Chief Executive Officer
PHSC plc
Interim Report 2009
Consolidated income statement
Six Six Year
months months
ended ended ended
30 Sept 30 Sept 31 Mar 09
09 08
Note Unaudited
£'000 £'000 £'000
Continuing operations
Revenue 2,208 2,401 5,022
Cost of sales 1,135 1,258 2,731
Gross profit 1,073 1,143 2,291
Other income 1 1 2
Administrative expenses (885) (935) (1,845)
Administrative expenses - exceptional (16) (27) -
item
Operating profit 173 182 448
Finance income - 25 32
Finance costs (1) (3) (8)
Profit before taxation 172 204 472
Corporation tax expense (55) (83) (146)
Profit for the period on continuing 117 121 326
operations
Attributable to:
Equity holders of the Group 117 121 326
Earnings per share for profit from 3
continuing
operations attributable to the equity holders
of the
Group during the period
Basic 1.08p 1.05p 2.89p
Diluted 1.06p 1.04p 2.85p
PHSC plc
Interim Report 2009
Consolidated balance sheet
30 Sept 30 Sept 31 Mar 09
09 08
Unaudited
Note £'000 £'000 £'000
Non-current assets
Property, plant and equipment 2 830 861 847
Goodwill 2,718 2,566 2,734
3,548 3,427 3,581
Current assets
Inventories 2 2 1
Trade and other receivables 1,329 1,429 1,507
Cash and cash equivalents 911 892 843
2,242 2,323 2,351
Total assets 5,790 5,750 5,932
Current liabilities
Trade and other payables 619 510 671
Financial liabilities 2 5 8
Current corporation tax payable 51 87 32
Short term provisions 75 80 75
747 682 786
Non-current liabilities
Trade and other payables - - 2
Financial liabilities 37 82 75
Long-term provisions - 50 -
Deferred taxation liabilities 74 82 74
111 214 151
Total liabilities 858 896 937
Net assets 4,932 4,854 4,995
Capital and reserves attributable to
equity holders of the Group
Called up share capital 1,058 1,135 1,108
Share premium account 1,488 1,488 1,488
Revaluation reserve 114 199 197
Capital redemption reserve 197 36 64
Retained earnings 2,075 1,996 2,138
4,932 4,854 4,995
PHSC plc
Interim Report 2009
Consolidated Statement of Changes in Equity
Capital
Share Share Redemption Revaluation Retained Total
Capital Premium Reserve Reserve Earnings Equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2008 1,152 1,488 19 200 2,034 4,893
Profit for the period - - - - 121 121
attributable to equity
holders
Dividends - - - - (97) (97)
Purchase of own shares (17) - 17 - (63) (63)
Depreciation - - - (1) 1 -
on revalued assets
Balance at 30 September 1,135 1,488 36 199 1,996 4,854
2008
Balance at 1 April 2009 1,108 1,488 64 197 2,138 4,995
Profit for the period - - - - 117 117
attributable to equity
holders
Dividends - - - - (90) (90)
Purchase of own shares (50) - 50 - (90) (90)
Depreciation - - - - - -
on revalued assets
Balance at 30 September 1,058 1,488 114 197 2,075 4,932
2009
PHSC plc
Interim Report 2009
Consolidated cash flow statement
Six Six Year
months months
ended ended ended
30 Sept 30 Sept 31 Mar 09
09 08
Unaudited
£'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 333 46 422
Interest paid (1) (3) (8)
Tax paid (35) (231) (358)
Net cash generated from/(used in) 297 (188) 56
operating activities
Cash flows used in investing activities
Purchase of property, (7) (78) (89)
plant and equipment
Purchase of subsidiary companies - (7) (229)
Disposal proceeds fixed assets 2 - -
Interest received - 25 31
Net cash used in investing activities (5) (60) (287)
Cash flows used in financing activities
Repayments of borrowings (44) (4) (6)
Dividends paid to group shareholders (90) (97) (97)
Purchase of own shares (90) (63) (127)
Net cash used in financing activities (224) (164) (230)
Net increase/(decrease) in 68 (412) (461)
cash and cash equivalents
Cash and cash equivalents 843 1,304 1,304
at beginning of year
Cash and cash equivalents at end of year 911 892 843
Notes to the cash flow statement
Cash generated from operations
Operating profit - continuing operations 173 182 448
Goodwill impairment 16 27 33
Depreciation 22 24 51
Loss on sale of fixed assets - - 1
(Increase)/decrease in inventories (2) - 2
Decrease/(increase) 178 (142) (93)
in trade and other receivables
Decrease in trade and other payables (54) (45) (20)
Cash generated from operations 333 46 422
PHSC plc
Interim Report 2009
Notes on the financial statements
1 The financial information for the six months ended 30 September 2009 and the
six months ended 30 September 2008 have not been audited. As permitted, the Group has chosen not
to adopt IAS 34 "Interim Financial Statements" in preparing this interim financial information.
The unaudited financial information comprises the consolidated interim balance
sheets as at 30 September 2009 and 30 September 2008 and the related consolidated interim statements of
income, changes in equity and cash flows and related notes for the six months then ended (hereinafter referred to
as the "financial information").
The financial information, including the comparative figures for the year ended
31 March 2009, do not constitute statutory financial statements for the purposes of Section 240 of
the Companies Act 1985. A copy of the statutory financial statements for the year ended 31 March 2009,
prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European
Union has been delivered to the Registrar of Companies and contained an unqualified
auditors' report in accordance with Section 235 of the Companies Act 1985.
The interim financial information has been prepared in accordance with the
recognition and measurement requirements of IFRS as endorsed by the European Union. The Directors do not
consider that there are any significant changes to the Group's accounting policies (as set out in the 2009
Annual Report) other than those resulting from the adoption of IFRS.
30 Sept 30 Sept 31 Mar
09 08 09
Unaudited Audited
2 Property, plant and equipment £'000 £'000 £'000
Cost or valuation
Brought forward 1,130 1,052 1,052
Additions 7 78 89
Disposals (12) - (13)
Acquisition of subsidiary - - 2
Carried forward 1,125 1,130 1,130
Depreciation
Brought forward 283 245 245
Charge 22 24 51
Disposals (10) - (13)
Carried forward 295 269 283
Net book value 830 861 847
3 Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings 30 Sept 09 30 Sept 08 31 Mar 09
£'000 £'000 £'000
unaudited
Continuing activities 117 121 326
Number of shares 30 Sept 09 30 Sept 08 31 Mar 09
Weighted average number 10,890,227 11,487,085 11,277,224
of shares for the purpose
of basic earnings per share
Effect of dilutive warrants 163,373 163,373 163,373
Weighted average number 11,053,600 11,650,458 11,440,597
of shares for the purpose
of diluted earnings per share
For further information please contact:
PHSC plc
Stephen King 01622 717700
www.phsc.plc.co.uk
Astaire Securities plc
Gavin Burnell 020 7448 4400
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