Final Results

RNS Number : 9118J

Heath(Samuel) & Sons PLC

07 July 2011

 



HEATH (Samuel) & SONS PLC

7th JULY 2011

PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST MARCH 2011

CHAIRMAN'S STATEMENT

I have pleasure in reporting an increased profit before tax for the year of £550,000 (2010: £336,000) on sales of £9,832,000, 3.2% up on last year's of £9,529,000.  This is certainly a move in the right direction, despite far from easy trading conditions.

During the year, amongst our expenditure, we updated our computer system, which we believe will give us long term benefits. This, plus the cost of financing the much increased price of brass, saw our total cash and financial assets reduce from £2,268,000 to £2,058,000.

David Coplestone has decided that it is the right time for him to retire as a director at the Annual General Meeting in August.  He has been involved with the Company for forty-three years, twenty-seven of them in a senior executive position.  He became my Deputy Managing Director and his contribution to the firm is incalculable.  I am sure that all shareholders will join me in thanking him and wishing him a long retirement.

After the improvement in profits, it would be good to be able to give an upbeat forecast for the coming year.  We are not able to do that.  As we have budgeted, the year has started extremely slowly with uncertainty in practically all of our markets, most particularly in our biggest, the UK. If copper and zinc prices continue at least to stabilize, this could help, but there is very little else to cheer us.

However our net assets remain strong amounting to £6,350,000 (2010: £6,037,000).  We therefore propose a same again final dividend of 6.25p per share, making a total of 11.75p for the year.

                                                                                                                              Sam Heath

                                                                                                                              Chairman

7^th July 2011

For further information:

Samuel Heath & Sons Plc
John Park - Company Secretary	0121 772 2303
Zeus Capital Limited	0161 831 1512
Ross Andrews/Nick Cowles

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2011

	Note		2011		2010
			£000		£000
Continuing operations
Revenue			9,832		9,529
Cost of sales			(4,990)		(4,968)
Gross profit			4,842		4,561
Distribution costs			(2,987)		(2,784)
Administrative expenses			(1,371)		(1,372)
Operating profit			484		405
Gain on sale of financial assets			51		19
Finance income			606		370
Finance costs			(591)		(458)
Profit before taxation			550		336
Taxation	4		(127)		(104)
Profit for the year			423		232
Basic and diluted earnings per ordinary share	6		16.7p		9.2p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
			2011		2010
			£000		£000
Profit for year			423		232
Actuarial gain/( loss) on defined benefit pension scheme			345		(1,162)
Deferred taxation on actuarial gain/ (loss)			(114)		325
(Loss)/gain on available for sale financial assets			(45)		128
Cash flow hedges			2		103
Other comprehensive income			188		(606)
Total comprehensive income for the year			611		(374)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2011

		2011   £000		2010 £000
Non current assets
Intangible assets		207		172
Property, plant and equipment		2,135		2,239
Deferred tax asset		411		577
		2,753		2,988
Current assets
Inventories		2,547		2,405
Trade and other receivables		1,903		1,653
Derivative financial instruments		2		-
Available for sale financial assets		1,505		1,198
Cash and cash equivalents		553		1,070
Total current assets		6,510		6,326
Total assets		9,263		9,314
Current liabilities
Trade and other payables		(1,167)		(929)
Current tax payable		(87)		(112)
Total current liabilities		(1,254)		(1,041)
Non current liabilities
Retirement benefit scheme		(1,521)		(2,061)
Deferred tax liability		(138)		(175)
Total non current liabilities		(1,659)		(2,236)
Total liabilities		(2,913)		(3,277)
Net assets		6,350		6,037
Equity
Called up share capital		254		254
Capital redemption reserve		109		109
Retained earnings		5,987		5,674
Equity shareholders' funds		6,350		6,037

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2011

	Share capital	Capital redemption reserve	Retained earnings	Total Equity
	£000	£000	£000	£000
Balance at 31st March 2009	254	109	6,346	6,709
Equity dividends paid	-	-	(298)	(298)
Profit for year	-	-	232	232
Other comprehensive income for the year	-	-	(606)	(606)
Balance at 31st March 2010	254	109	5,674	6,037
Equity dividends paid	-	-	(298)	(298)
Profit for year	-	-	423	423
Other comprehensive income for the year	-	-	188	188
Balance at 31st March 2011	254	109	5,987	6,350

CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 MARCH 2011

	Note	2011		2010
		£000		£000
Net cash inflow from operating activities	7	357		1,216
Cash flow from investing activities
Purchases of property, plant and equipment		(319)		(97)
Proceeds from sale of property, plant and equipment		6		21
Purchase of intangible assets		(42)		(111)
Purchase of available for sale financial assets		(602)		(545)
Proceeds from sale of available for sale financial assets		302		264
Interest received		79		49
Net cash outflow from investing activities		(576)		(419)
Net cash outflow from financing activities
Equity dividends paid	5	(298)		(298)
Net cash outflow from financing activities		(298)		(298)
(Decrease)/increase in cash and cash equivalents		(517)		499
Cash and cash equivalents at beginning of period		1,070		571
Cash and cash equivalents at end of period		553		1,070

1          Adoption of new and revised Standards

The Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and effective for accounting periods beginning on 1st April 2010. The adoption of the following IFRSs has not impacted upon the financial statements:

IFRIC 10 - Interim Financial Reporting and Impairment

At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

IAS 27 - Consolidated and Separate Financial Statements (revised 2008)

IFRIC 11 - IFRS 2 - Group and Treasury Share Transactions

IFRS 7 - Financial Instruments: Disclosures

IFRS 9 - Financial Instruments (revised 2010)

IFRS 10 - Consolidated Financial Statements

IFRS 12 - Disclosure of Interests in Other Entities

IFRS 13 - Fair Value Measurement

2          Accounting policies

Basis of preparation of preliminary financial information

The financial statements, upon which this financial information is based, have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS).

This financial information does not constitute the Company's statutory accounts as defined in section 434 of the Companies Act 2006 and has been prepared on the basis of the accounting policies set out in the financial statements for the year ended 31 March 2011. Statutory accounts for 2010 have been delivered to the Registrar of Companies, and those for 2011 will be delivered in due course following the company's annual general meeting. The auditors have reported on the 2010 accounts and their report was unqualified, did not include references to any matters by way of emphasis without qualifying their report and did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.  

The Annual Report and Financial Statements will be posted to shareholders shortly and thereafter will be available from the Company's registered office, and from the Company's website www.samuel-heath.com.

The financial statements have been prepared under the historical cost basis except for the valuation of Available For Sale assets which have been revalued to market value. 

3          Critical accounting and key sources of estimation

Critical judgements in applying the entity's accounting policies

In the process of applying the entity's accounting policies, which are described above, the directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements.

Income taxes

The Group is subject to income taxes in the United Kingdom.  Judgment is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The recoverable amounts of the Group's deferred tax assets have been determined based on the Board's estimates of future taxable profits and income and tax rates.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Valuation of intangible assets

Intangible assets are initially valued at their cost and then evaluated periodically for impairment. For purposes of valuation an intangible asset is considered impaired if its carrying value is less than the expected net cash flow from the asset.

Valuation of inventories

Determining the valuation of inventories requires an estimation of the obsolescence provision required to write down items to their realisable value.

Retirement benefit scheme deficit

The valuation of expected returns on assets and the present value of the liabilities of the scheme are determined by assumptions and estimates made by the directors based on the current information to hand.  Therefore amounts are open to fluctuations in the future due to unforeseen changes or additional factors that come to light following the year end.

4.             Income taxes

	2011 £000		2010 £000
Current taxes	112		112
Deferred taxes	15		(8)
Total income taxes	127		104

Corporation tax is calculated at 28% (2010: 28%) of the estimated assessable profit for the year.

Tax rate reconciliation

			2011 £000		2010 £000
	Profit for the year		550		336
	Corporation tax charge thereon at 28% (2010: 28%)		154		94
	Adjusted for the effects of:
	Depreciation in excess of capital allowances		11		37
	Marginal relief		(19)		(18)
	Prior year adjustments		18		-
	Research and development claim		(9)		(22)
	Capitalisation of research and development expenditure		(12)		(31)
	Loan relationships		(9)		29
	Other adjustments		(7)		15
	Total income taxes		127		104
	Effective tax rate		23.1%		31.0%

5.             Dividends

	2011		2010
	£ 000		£ 000
Final dividend for the year ended 31st March 2010 of 6.25 pence per share (2009: 6.25 pence per share)	158		158
Interim dividend for the year ended 31st March 2011 of 5.50 pence per share (2010: 5.50 pence per share)	140		140
	298		298

In addition to the dividends paid during the year the directors are recommending a final dividend for 2011 of 6.25 pence per share amounting to £158,000. The proposed final dividend is subject to approval at the Annual General Meeting (see note 8) and has not been included as a liability in these accounts.

6.             Earnings per share

The basic and diluted earnings per share are calculated by dividing the relevant profit after taxation of £423,000 (2010: £232,000) by the average number of ordinary shares in issue during the year being 2,534,322 (2010: 2,534,322). The number of shares used in the calculation is the same for both basic and diluted earnings.

7.             Notes to the cash flow statement

	2011		2010
	£000		£000
Operating profit	484		405
Depreciation, amortisation and impairment	428		554
Gain on disposal of property, plant and equipment	(3)		(3)
Operating cash flows before movements in working capital	909		956
(Increase)/decrease in inventories	(142)		249
(Increase)/decrease in receivables	(254)		102
Increase in payables	236		76
Pension contributions	(255)		(255)
Cash generated by operations	494		1,128
Income tax (paid)/received	(137)		88
Net cash flow from operating activities	357		1,216

Cash and cash equivalents (which are presented as a single class of assets on the face of the Statement of Financial Position) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.

8.             Annual General Meeting

The Annual General Meeting has been fixed for 12th August 2011 at 12 noon. The final Ordinary Share dividend of 6.25 pence, if approved, will be payable on 26th August 2011 to ordinary shareholders registered at close of business on 29th July 2011.

 

END

 

 

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