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 Solutions Limited goodwill
|
|
-
|
|
676,178
|
Add:
impairment of Inspection Services (UK) Limited goodwill
|
|
-
|
|
117,240
|
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 King Tel:
01622 717 700
Stephen.king@phsc.co.uk
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 POSITIONas at
31 March 2023
|
|
31.3.23
£
|
31.3.22
£
|
Non-Current
Assets
Property,
plant
and
equipment
|
|
468,490
|
490,138
|
Goodwill
|
|
2,235,045
|
2,235,045
|
Deferred
tax
asset
|
|
11,554
|
15,591
|
|
|
2,715,089
|
2,740,774
|
Current
Assets
Stock
|
|
200,169
|
185,685
|
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
Trade
and
other
payables
|
|
531,422
|
617,077
|
Right
of
use
lease
liabilities
|
|
25,137
|
30,632
|
Current
corporation tax
payable
|
|
56,919
|
55,112
|
|
|
613,478
|
702,821
|
Non-Current
Liabilities
Right
of
use
lease
liabilities
|
|
25,414
|
24,184
|
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
attributable
to
equity
holders
of
the
Group
Called
up
share capital
|
|
1,184,704
|
1,467,726
|
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 INCOMEfor the
year ended 31 March
2023
|
|
31.3.23
£
|
31.3.22
£
|
Continuing
operations:
Revenue
|
|
3,437,624
|
3,570,626
|
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
attributable
to
owners
of
the parent
Other
comprehensive income
|
|
243,259
–
|
(631,003)
–
|
Total comprehensive
income/(loss)
attributable
to
owners
of
the
parent
|
|
243,259
|
(631,003)
|
Basic
earnings/(loss)
per
share
from
continuing
operations (p)
|
|
2.05p
|
(4.76)p
|
GROUP
STATEMENT OF CHANGES IN EQUITYfor the
year ended 31 March 2023
|
Share
Capital
£
|
|
Share
Premium
£
|
|
Merger
Relief
Reserve
£
|
Capital
Redemption
Reserve
£
|
|
Treasury
Shares
£
|
|
Retained
Earnings
£
|
Total
£
|
Balance
at
1
April
2022
|
1,467,726
|
|
1,916,017
|
|
133,836
|
143,628
|
|
(644,738)
|
|
496,884
|
3,513,353
|
Profit
for
year attributable
to
|
|
|
|
|
|
|
|
|
|
|
|
equity
holders
|
–
|
|
–
|
|
–
|
–
|
|
–
|
|
243,259
|
243,259
|
Dividends
|
–
|
|
–
|
|
–
|
–
|
|
–
|
|
(118,470)
|
(118,470)
|
Cancellation
of
own
shares
|
(283,022)
|
|
|
|
|
283,022
|
|
644,738
|
|
(644,738)
|
–
|
Balance
at
31
March
2023
|
1,184,704
|
|
1,916,017
|
|
133,836
|
426,650
|
|
–
|
|
(23,065)
|
3,638,142
|
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
|
GROUP
STATEMENT OF CASH FLOWS
for the
year ended 31 March 2023
|
Note
|
31.3.23
£
|
31.3.22
£
|
Cash
flows
from
operating
activities:
Cash
generated
from
operations
|
I
|
318,153
|
313,530
|
Tax
paid
|
|
(55,114)
|
(89,213)
|
Net
cash
generated
from
operating
activities
|
|
263,039
|
224,317
|
Cash
flows
used
in
investing
activities
Purchase
of
property, plant
and
equipment
|
|
(41,386)
|
(22,117)
|
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
Payment
of
lease
liabilities
|
|
(4,265)
|
(15,905)
|
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
equivalents
|
|
100,264
|
(588,120)
|
Cash
and
cash
equivalents at
beginning
of
year
|
|
649,363
|
1,237,483
|
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 FLOWSfor 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.