Final Results

RNS Number : 0057P

Heath(Samuel) & Sons PLC

08 July 2010

 



HEATH (Samuel) & SONS PLC

8th JULY 2010

PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST MARCH 2010

CHAIRMAN'S STATEMENT

I have pleasure in announcing a profit before taxation for the year of £336,000 (2009: £292,000) on sales of £9,529,000, 12.6% down on last year's sales of £10,897,000.  Aided by favourable exchange rates, we managed to reverse the losses of the first six months despite sales remaining flat.  This is a credit to all involved who adapted to the difficult trading conditions.

I would like to welcome Paul Turner and Martyn Whieldon, who have well earned their invitation to the Board, heading up the finance and sales departments respectively.

What can I say about the year ahead?  The UK market is extraordinarily difficult to assess at this stage, as are the mixed signals coming out of North America.  Our other traditional customers are in Europe and here there are enormous variances in performance and prospects between different countries. 

To attempt to offset these uncertainties, we are doing our best to open up and enlarge our customer base elsewhere in the world.  I am pleased to report that some success is being achieved with this.  We have also embarked on other new marketing initiatives, such as our full time exhibition at the Chelsea Harbour Design Centre.

In spite of all of this, our budget shows that it is going to be difficult to repeat even the modest profit reported this year, although it has to be said that we are ahead of this budget at the time of this statement.

Our net assets remain strong amounting to £6,037,000 (2009: £6,709,000).  We have in fact improved our cash position from £571,000 to £1,070,000.  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

8 July 2010

For further information:

Samuel Heath & Sons Plc
John Park - Company Secretary	0121 772 2303
Evolution Securities Limited	0113 243 1619
Joanne Lake / Peter Steel

CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2010

	Note		2010		2009
			£000		£000
Continuing operations
Revenue			9,529		10,897
Cost of sales		(4,968)		(5,952)
Exceptional expenses (Redundancy payments)		-	(4,968)	(162)	(6,114)
Gross profit			4,561		4,783
Distribution costs			(2,784)		(3,036)
Administrative expenses			(1,372)		(1,504)
Operating profit			405		243
Gain on sale of financial assets			19		-
Finance income			370		593
Finance costs			(458)		(544)
Profit before taxation			336		292
Taxation	4		(104)		23
Profit for the year			232		315
Basic and diluted earnings per ordinary share	6		9.2p		12.5p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
			2010		2009
			£000		£000
Profit for year			232		315
Actuarial loss on defined benefit pension scheme			(1,162)		(1,153)
Deferred taxation on actuarial loss			325		322
Gains on available for sale financial assets			128		23
Cash flow hedges			103		(103)
Total comprehensive income for the year			(374)		(596)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2010

	2010 £000	2009 £000
Non current assets
Intangible assets	172	164
Property, plan and equipment	2,239	2,617
Deferred tax asset	577	284
	2,988	3,065
Current assets
Inventories	2,405	2,654
Trade and other receivables	1,653	1,753
Current tax receivable	-	88
Available for sale financial assets	1,198	770
Cash and cash equivalents	1,070	571
Total current assets	6,326	5,836
Total assets	9,314	8,901
Current liabilities
Trade and other payables	(929)	(859)
Derivative financial instruments	-	(103)
Current tax payable	(112)	-
Total current liabilities	(1,041)	(962)
Non current liabilities
Pension scheme deficit	(2,061)	(1,015)
Deferred tax liability	(175)	(215)
Total non current liabilities	(2,236)	(1,230)
Total liabilities	(3,277)	(2,192)
Net assets	6,037	6,709
Equity
Called up share capital	254	254
Capital redemption reserve	109	109
Retained earnings	5,674	6,346
Equity shareholders' fund	6,037	6,709

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2010

	Share capital	Capital redemption reserve	Retained earnings	Total Equity
	£000	£000	£000	£000
Balance at 31st March 2008	254	109	7,542	7,905
Equity dividends paid	-	-	(596)	(596)
Profit for year	-	-	315	315
Premium on purchase of own shares	-	-	(4)	(4)
Other comprehensive income for the year	-	-	(911)	(911)
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

CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 31 MARCH 2010

	Note	2010		2009
		£000		£000
Net cash inflow from operating activities	7	1,216		458
Cash flow from investing activities
Purchases of property, plant and equipment		(97)		(203)
Proceeds from sale of property, plant and equipment		21		43
Purchase of intangible assets		(111)		(164)
Purchase of available for sale financial assets		(545)		(747)
Proceeds from sale of available for sale financial assets		264		-
Interest received		49		56
Net cash outflow from investing activities		(419)		(1,015)
Net cash outflow from financing activities
Purchase of own shares		-		(4)
Equity dividends paid	5	(298)		(596)
Net cash outflow from financing activities		(298)		(600)
Increase/(decrease) in cash and cash equivalents		499		(1,157)
Cash and cash equivalents at beginning of period		571		1,728
Cash and cash equivalents at end of period		1,070		571

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 2007. 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

IFRIC 11 - Group and Treasury Share Transactions

IFRS 3 - Business Combinations

IFRS 9 - Financial Instruments

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 2010. Statutory accounts for 2009 have been delivered to the Registrar of Companies, and those for 2010 will be delivered in due course following the company's annual general meeting. The auditors have reported on the 2009 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 237 (2) or (3) of the Companies Act 1985. 

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.

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

	2010 £000		2009 £000
Current taxes	112		(125)
Deferred taxes	(8)		102
Total income taxes	104		(23)

Corporation tax is calculated at 28% (2009: 28%) of the estimated assessable profit for the year.

Tax rate reconciliation

	2010 £000		2009 £000
Profit for the year	336		292
Corporation tax charge thereon at 28% (2009: 28%)	94		82
Adjusted for the effects of:
Depreciation in excess of capital allowances	37		9
Marginal relief	(18)		(12)
Prior year adjustments	-		(37)
Research and development claim	(22)		(30)
Capitalisation of research and development expenditure	(31)		(46)
Loan relationships	29		6
Other adjustments	15		5
Total Income tax	104		(23)
Effective tax rate	31.0%		(7.9%)

5.             Dividends

	2010		2009
	£ 000		£ 000
Final dividend for the year ended 31st March 2009 of 6.25 pence per share (2008: 12.5 pence per share)	158		317
Interim dividend for the year ended 31st March 2010 of 5.50 pence per share (2009: 11.0 pence per share)	140		279
	298		596

In addition to the dividends paid during the year the directors are recommending a final dividend for 2010 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 £232,000 (2009: £315,000) by the average number of ordinary shares in issue during the year being 2,534,322 (2009: 2,534,577). The number of shares used in the calculation is the same for both basic and diluted earnings.

7.             Notes to the cash flow statement

	2010		2009
	£000		£000
Operating profit	405		243
Depreciation, amortisation and impairment	554		471
(Gain)/loss on disposal of property, plant and equipment	(3)		12
Operating cash flows before movements in working capital	956		726
Decrease in inventories	249		133
Decrease in receivables	102		413
Increase/(decrease) in payables	76		(133)
Pension contributions	(255)		(505)
Cash generated by operations	1,128		634
Income tax received/(paid)	88		(176)
Net cash flow from operating activities	1,216		458

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 20th August 2010 at 12 noon. The final Ordinary Share dividend of 6.25 pence, if approved, will be payable on 27th August 2010 to ordinary shareholders registered at close of business on 30th July 2010.

 

END

 

 

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