TIDMSNCL
RNS Number : 1077Y
Sinclair (William) Holdings PLC
21 January 2014
21 January 2014
WILLIAM SINCLAIR HOLDINGS PLC
("William Sinclair", the "Company" or the "Group")
Audited Preliminary Results for the 12 months ended 30 September
2013
William Sinclair Holdings PLC is one of the UK's leading
producers of horticulture products. William Sinclair's customers
include The Garden Centre Group, B&Q, Tesco, Wilkinson and
Morrisons as well as a large number of independent garden centres
and garden centre groups.
Operational Highlights
- Appointment of new Chief Executive with extensive manufacturing and supply chain experience
- Good peat harvest in Summer 2013 resulting in healthy stock
levels for the 2014 sales season
- Three SuperFyba units installed at Ellesmere Port, production volumes now increasing
- Development of Ellesmere Port site accelerated following new funding arrangements
- Major new customer gains within Horticulture division
- Natural England compensation claim hearing date fixed for Summer 2014
Financial Highlights
- Revenue GBP46.5 million (2012: GBP48.2 million) despite extreme cold Spring conditions
- Significant increase in sales during second half
- Operating loss before exceptional items of GBP0.2 million (2012: profit GBP0.5 million)
- Loss before tax GBP1.2 million (2012: GBP0.4 million)
- Total dividend of 3p per share (2012: 4.5p)
Current Period
- GBP8.24 million fund raise completed December 2013
- Significantly increased banking facilities with RBS secured January 2014
Peter Rush, Chief Executive, William Sinclair Holdings PLC,
said:
"The modernisation of William Sinclair's operations is gathering
pace with the acceleration of Ellesmere Port's development and
on-going investment into our market leading products. With the
injection of new capital from the recent fund raising, this rate of
progress can be maintained.
"Combined with healthy supplies of raw materials and increasing
production levels of SuperFyba, William Sinclair is on-track to
deliver its objectives of greater operational efficiency, scale and
growth."
For further information:
William Sinclair Holdings PLC Tel: 01522 537 561
Peter Rush, Chief Executive
Peter Williams, Finance Director
WH Ireland Limited Tel: 0113 394 6600
Andrew Kitchingman
Nick Field
CHAIRMAN'S STATEMENT
This is my first statement as your Chairman, and so the first
thing I need to do is thank both Bill Simpson and Bernard Burns for
their service to the Group over the past nine and eight years
respectively. They have shaped the Group into a very different and
better position from where they found it. There is still much to do
but we thank them for getting us this far.
The past financial year has yet again been extremely challenging
for trading, with the all-important Spring selling season being the
coldest for 50 years. This led to lower sales by our customers to
the public and consequently a loss of profit to us. Unlike the
previous year though, we were able to harvest a substantial amount
of peat in the summer so that we are well positioned with raw
materials for next season. However the additional costs of running
the new Ellesmere Port facility ahead of the closure of Boothby led
to increased costs. As a consequence the Group made a loss in the
year. Revenue was slightly down for the year at GBP46.5 million
compared to GBP48.2 million the previous year and we had a small
operating loss before exceptional items of GBP0.2 million compared
to the small profit we made last year of GBP0.5 million.
Meanwhile, as part of the longer-term transition from being a
peat based agricultural business into a modern manufacturing
company of non-peat based growing media, we have further developed
the site at Ellesmere Port which we purchased last year. We have
consolidated all our production of SuperFyba at the site and are
confident that we will develop our new business in peat reduced and
peat free products to compensate for the loss of the peat we can no
longer harvest at Bolton Fell following its purchase by Natural
England. We have also moved the perlite and vermiculite furnaces of
our Silvaperl business from Gainsborough to the new site which will
lead to reduced operating costs.
We continue to be in protracted negotiations with Natural
England over the amount of compensation due to us for the purchase
of the Bolton Fell moss and the closure of the factory next to it.
This means we are reliant on our own funding to develop the
Ellesmere Port site. It is regrettable that our bank, after years
of demonstrating strong support, was, at short notice soon after
the financial year end, unwilling to extend the additional
facilities we were expecting, causing us some short term cash flow
strains. However, in December 2013 we successfully raised GBP8.24
million before costs in convertible loans from a group of existing
investors. We have also decided to re-finance our working capital
facilities and have recently secured improved facilities with RBS
group. We are now well resourced to meet the financial challenges
we are facing.
The Board has reviewed its policy relating to dividend payments,
and whilst we will continue to have a progressive dividend policy,
we believe it would be prudent to weight the split towards the
interim dividend which is declared once the important Spring
selling season is over in June. In light of this, and reflecting
the poor results for last year, the Board is proposing a final
dividend for the year of 1.5p per share, which is a reduction from
the previous year's payment of 2.6p, and gives a total dividend for
the year of 3.0p (2012 - 4.5p).
The year has been extremely challenging for all our staff, and
there is no doubt the coming year will be equally so. I am very
pleased to welcome Peter Rush as the new Chief Executive, who is
doing a great job in leading our staff through this period. On
behalf of you all I thank the staff for their hard work and loyalty
during these difficult times.
With our financial position on a firm footing, we are now
looking forward to a brighter future. Over the course of the coming
year we shall complete the closure of our Boothby peat processing
facility and will commission our new manufacturing site at
Ellesmere Port. We also expect to have finalised the compensation
claim with Natural England. We will be continually improving both
the quantity and quality of the production of SuperFyba, thus
reducing our use of peat. In addition, we shall be refreshing our
brands through a marketing initiative, which we have already
started. All in all, we can face the future with some
confidence.
Hugh Etheridge
Chairman
CHIEF EXECUTIVE'S STATEMENT
Since joining William Sinclair in March of this year much of my
focus has been on realigning the Company's operations and assets to
ensure that it returns to a profitable and sustainable trading
position.
These assets include owning many of the industry's leading
brands which command strong consumer loyalty, a number of new and
long-term customers, market-leading product technologies, the
development of a state of the art manufacturing and distribution
facility and a reputation for being an organisation that
professional growers choose to do business with - all of which we
will leverage to ensure that William Sinclair becomes the 'go to'
supplier of high quality growing media products.
My appointment as Chief Executive Officer was at a time when
extreme weather conditions were adversely affecting sales and raw
material supplies across the entire European horticulture industry.
Despite these external factors, the business coped well making good
progress with its transition to becoming a manufacturer of high
quality growing media, as opposed to simply being a harvester of
peat.
In spite of disappointing financial results for the year, our
underlying business and outlook remain strong. Sales returned to a
more typical pattern later in the season and further progress was
made with the accelerated development of the Company's flagship
site at Ellesmere Port. This development has allowed the Company to
continue to lead the drive in the UK towards a peat free future.
The Company also began its journey of engaging directly with
consumers through its excellent brands and products.
Financial highlights and dividend
Turnover fell by approximately GBP1.8 million, or 3.7%, to
GBP46.5 million predominantly from a reduction in demand by the
professional growing sector in response to price increases.
In addition the industry wide scarcity of high quality peat and
the temporary duplication of a number of activities at Ellesmere
Port resulted in unusually high operating costs and lower margins.
As a consequence the Group's loss for the year, after taxation,
amounted to GBP1.0 million (2012: GBP0.4 million).
The directors recommend a final dividend of 1.5 pence per share
making a total of 3.0 pence per share for the year reflecting the
Board's ongoing confidence in the Company's prospects during
2014.
Strategy
The Group's strategy is to optimise manufacturing efficiency by
investing in modern equipment and minimising distribution mileage.
This is being achieved predominantly through the accelerated
development of the Company's new site at Ellesmere Port.
Within the next twelve months the business will have
transitioned its manufacturing operation from six sites down to
two, with operations at Ellesmere Port and Lincoln. In addition to
the obvious efficiency gains and the centralisation of business
operations, it will also result in the modernisation of customer
servicing.
During 2014 the business will become more consumer focussed.
This will be achieved by investing in and re-positioning the
Company's brands as well as a programme of new product development,
based on consumer driven innovation.
Finally, with further consolidation anticipated amongst
customers, the Company will streamline its channels to market and
sales operations to provide the optimum platform to support future
sales growth.
Fund raising
On 20 December 2013 the Company announced that it had raised
GBP8.24 million through the issue of secured redeemable convertible
loan notes, mainly to existing shareholders in the Company.
The funding provided by the convertible loan notes is to be used
to finance the Company's working capital needs, in particular to
expedite development of the new manufacturing facility at Ellesmere
Port.
Sales
The year started with the UK horticulture industry as a whole
suffering from shortages of peat as a result of the wet Summer in
2012, and the need to import raw materials from overseas suppliers.
This clearly impaired the Company's margins, although these were
recovered in part through price increases.
This situation was compounded by the extremely cold spring in
2013 which severely impacted the key selling period for the growing
media industry. However the recovery of sales during May and June
demonstrated the underlying robustness of consumer demand for the
Company's products and a return to more normal sales levels.
Despite the climatic challenges the Company was very successful
during the Summer in winning additional business with The Garden
Centre Group, Tesco and The Range.
Ellesmere Port
The key area of focus for the business during the year was the
development of Ellesmere Port, the Company's new flagship site near
Liverpool. The first stage of the development focussed on the
installation of key services followed by the demolition of
buildings that were either not fit for purpose or not required by
William Sinclair.
The second stage was the commencement of the manufacture of
SuperFyba. The Company has to-date invested in three SuperFyba
production units. The first was located at the Company's Wroot
operation near Doncaster, with two additional new units being
purchased and brought on stream at Ellesmere Port.
The unit based at Wroot was subsequently transferred to
Ellesmere Port to take advantage of high voltage electricity
supplies instead of diesel and to benefit from greater economies of
scale and efficiencies from having all three machines sited
together. This move will also enable the Wroot site to focus on
composting and the production of green compost and oversize, the
latter being the key raw material for SuperFyba.
The third stage of the development of Ellesmere Port was the
transfer of the Company's Silvaperl specialist aggregates
operations from Gainsborough. The specialist furnaces have been
relocated and installed and production is successfully underway
with manufacturing efficiencies already being realised.
During the current fourth stage, Ellesmere Port is being
prepared for the installation of the state of the art screening,
mixing and packing facility.
The recent fund raising has enabled the Company to accelerate
the remaining development of Ellesmere Port so that strategic
benefits and economic efficiencies can be realised more quickly.
The development of the site is now expected to be completed in
2015.
SuperFyba
Demand for SuperFyba increased unexpectedly and significantly
due to the widespread lack of peat from the poor harvest and the
attractiveness of the product. This sudden increase in demand led
to the installation of equipment at Ellesmere Port being severely
compromised, resulting in lower volumes and reduced efficiencies.
Once the peak demand period ended a full review of the SuperFyba
operation was undertaken and steps were taken to improve the
manufacturing process.
These upgrades quickly began to yield significant increases in
both volume and quality, leading to reductions in product costs, as
well as improving the reliability of the manufacturing process.
Further enhancements to the performance of SuperFyba are planned in
2014.
Whilst the freak weather conditions of the last two years are
not expected to reoccur in 2014, SuperFyba significantly de-risks
earnings as its manufacture is not reliant on the harvesting of
peat during the Summer months. SuperFyba, for which worldwide
patents have applied for, allows the Company to consider market
opportunities outside the UK.
Freeland Horticulture
The high cost of developing SuperFyba during the year is
reflected in the results of Freeland Horticulture but following the
transfer of the manufacturing of all SuperFyba to William Sinclair
at the year end Freeland is now able to focus on the profitability
and growth of its specialist topsoil and composting operations.
Having previously won prestigious contracts around the
development of the Olympic Park for the London Olympics, Freeland
successfully tendered for contracts linked to the redevelopment of
the venue into a 700 acre municipal area, named the Queen Elizabeth
Olympic Park, and work on the new project began in Spring 2013.
Going forward Freeland has additional opportunities to bid for work
around the outside of the park.
Ahead of the current recovery in the housing market and
construction industry, Freeland began expanding its specialist
soils operations outside of the home counties where much of
Freeland's work has historically been located.
Freeland now has specialist soil production facilities in
Birmingham and Greater Manchester with further expansion planned
for both its soils and, importantly, composting activities. With
increasing levels of optimism and activity in the building sector,
prospects for Freeland continue to improve.
Restructuring
After a review of the Fybapot business in Knottingly, the
decision was taken to cease manufacturing and distribution at the
site.
In addition, the closure of the Boothby site is planned for mid
2014, although peat harvesting has already ceased on the adjacent
Bolton Fell peat bog. Collective consultation has been concluded
and plans are now in place to transfer some of the equipment and
resources to Ellesmere Port.
As a consequence of the closure of the Bolton Fell peat bog
William Sinclair will need to ensure its remaining peat reserves in
Scotland are well maintained to maximise future harvests.
Investment will continue to be made in this area to protect the
balance of this important resource.
2013 Peat Harvest
The Company had a good peat harvest during 2013 and has
sufficient stock levels to satisfy its customer base during the
2014 season with significant reserves also available for the 2015
season.
The Company made significant investment into its Scottish bogs
to ensure its extensive peat reserves remain available and in good
condition for harvesting.
Natural England
During the year William Sinclair had expected to reach a
settlement with Natural England regarding the full extent of
compensation due to the Company but this did not prove possible.
The matter was referred to the Lands Tribunal and a fixed timetable
has now been set which should result in a full hearing in early
Summer 2014, giving the Board greater confidence that a
compensation sum will be established within the 2014 finance
year.
William Sinclair's professional advisors calculate the value of
the compensation due to the Company to be substantially greater
than the GBP9 million advance payment received from Natural England
in April 2010.
Outlook
More normal trading conditions are expected to return in 2014
due to the plentiful supply of raw materials, rising customer
optimism built on the recovery of consumer sales during the latter
half of the 2013 season and increasing activity in the construction
and building sector.
The past two years have seen the business being impacted by a
number of one off events. With these behind us, the Company can
look forward to benefiting from solid foundations that are now
being put in place.
This, combined with greater production efficiencies derived from
the Ellesmere Port facility and the Company's secure financial
footing, puts William Sinclair in a strong position to deliver
long-term, sustainable shareholder value.
Peter Rush
Chief Executive
WILLIAM SINCLAIR HOLDINGS PLC
Group Income Statement
for the year ended 30 September 2013
2013 2012
Note GBP000 GBP000
Revenue 46,479 48,240
Operating expenses (47,438) (48,363)
-------- --------
Group operating (loss) / profit before
exceptional items (182) 542
Exceptional items 6 (777) (665)
-------- --------
Group operating loss after exceptional
items (959) (123)
Finance income 3 33
Finance costs (161) (120)
Other finance costs (65) (194)
-------- --------
Loss before taxation (1,182) (404)
Tax credit 164 1
-------- --------
Loss for the year (1,018) (403)
======== ========
All results relate to continuing operations.
Loss for the year is attributable to:
Owners of the parent company (977) (467)
Minority interests (41) 64
-------- --------
(1,018) (403)
======== ========
Loss per share (pence)
Basic EPS on loss for the year 4(5.7)p (2.7)p
Diluted EPS on loss for the year 4(5.7)p (2.7)p
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of comprehensive income
for the year ended 30 September 2013
2013 2012
GBP000 GBP000
Loss for the year (1,018) (403)
------- -------
Other comprehensive income / (expense):
-amounts which will not be reclassified
subsequently to the income statement
Actuarial gains / (losses) on defined
benefit pension plans 1,465 (3,741)
Gain on revaluation - 1,219
Tax on items taken directly to or transferred
from equity (347) 708
------- -------
Other comprehensive income / (expense)
for the year, net of tax 1,118 (1,814)
------- -------
Total comprehensive income / (expense)
for the year 100 (2,217)
======= =======
Attributable to:
Owners of the parent company 141 (2,281)
Minority interests (41) 64
------- -------
Total comprehensive income for the year 100 (2,217)
======= =======
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of financial position
at 30 September 2013
Group Company
2013 2012 2013 2012
Note GBP000 GBP000 GBP000 GBP000
Non-current assets
Property, plant and equipment 21,234 19,697 115 57
Intangible assets 1,784 1,898 - -
Investments in subsidiaries - - 8,795 8,795
Deferred tax assets 162 471 322 420
------ ------ ------ -------
23,180 22,066 9,232 9,272
------ ------ ------ -------
Current assets
Inventories 11,580 10,605 - -
Trade and other receivables 10,953 10,139 13,958 13,281
Corporation tax recoverable - 257 - -
Cash and cash equivalents 784 925 182 182
------ ------ ------ -------
23,317 21,926 14,140 13,463
------ ------ ------ -------
Assets held for sale 3 7,514 7,514 - -
------ ------ ------ -------
Total assets 54,011 51,506 23,372 22,735
------ ------ ------ -------
Current liabilities
Trade and other payables 9,109 7,038 277 276
Financial liabilities
- borrowings 10,373 2,074 16,268 8,698
Corporation tax payable 75 - - -
------ ------ ------ -------
19,557 9,112 16,545 8,974
Receipt from Natural England 3 9,000 9,000 - -
------ ------ ------ -------
28,557 18,112 16,545 8,974
------ ------ ------ -------
Non-current liabilities
Financial liabilities
- borrowings - 5,000 - 5,000
Provisions 145 132 - -
Defined benefit pension
plan deficit 10,840 13,204 - -
10,985 18,336 - 5,000
------ ------ ------ -------
Total liabilities 39,542 36,448 16,545 13,974
------ ------ ------ -------
Net assets 14,469 15,058 6,827 8,761
====== ====== ====== =======
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of financial position
at 30 September 2013 (continued)
Group Company
2013 2012 2013 2012
Note GBP000 GBP000 GBP000 GBP000
Capital and reserves
Share capital 8 4,265 4,256 4,265 4,256
Share premium account 150 150 150 150
Capital redemption reserve 1,523 1,523 1,523 1,523
Revaluation reserve 9,035 8,790 20 20
Other reserves 176 176 86 86
Retained earnings (955) (170) 783 2,726
------ ------ ------ -------
Total shareholders' equity 14,194 14,725 6,827 8,761
Minority interests 275 333 - -
------ ------ ------ -------
Total equity 14,469 15,058 6,827 8,761
====== ====== ====== =======
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of changes in equity
for the year ended 30 September 2013
Share Capital
Premium redem'n Reval'n Other Retained Minority Total
Share Account reserve Reserve Reserves Earnings Total Interest Equity
capital GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2012 4,256 150 1,523 8,790 176 (170) 14,725 333 15,058
--------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Loss for the year - - - - - (977) (977) (41) (1,018)
--------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Other
comprehensive
income:
Actuarial gains
on defined
benefit pension
plans - - - - - 1,465 1,465 - 1,465
Tax on items
taken directly
to or
transferred from
equity - - - 342 - (689) (347) - (347)
Depreciation
transfer - - - (97) - 97 - - -
Total other
comprehensive
income - - - 245 - 873 1,118 - 1,118
Total
comprehensive
income
/(expense) - - - 245 - (104) 141 (41) 100
--------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Transactions with
owners:
Equity shares
issued 9 - - - - (9) - - -
Share based
payments - - - - - 120 120 - 120
Deferred tax on
share based
payments - - - - - (93) (93) - (93)
Equity dividends
paid - - - - - (699) (699) (17) (716)
Transactions with
owners 9 - - - - (681) (672) (17) (689)
At 30 September
2013 4,265 150 1,523 9,035 176 (955) 14,194 275 14,469
--------- --------- --------- --------- ---------- ---------- -------- ---------- --------
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of changes in equity
for the year ended 30 September 2012
Share Capital
Premium redem'n Reval'n Other Retained Minority Total
Share Account reserve Reserve Reserves Earnings Total Interest Equity
capital GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 October 2011 4,256 150 1,523 7,841 176 3,905 17,851 281 18,132
--------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Loss for the year - - - - - (467) (467) 64 (403)
--------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Other
comprehensive
income:
Actuarial gains
on defined
benefit pension
plans - - - - - (3,741) (3,741) - (3,741)
Tax on items
taken directly
to or
transferred from
equity - - - (84) - 792 708 - 708
Depreciation
transfer - - - (186) - 186 - - -
Revaluation
transfer - - - 1,219 - - 1,219 - 1,219
Total other
comprehensive
income - - - 949 - (2,763) (1,814) - (1,814)
Total
comprehensive
income
/ (expense) 949 (3,230) (2,281) 64 (2,217)
--------- --------- --------- --------- ---------- ---------- -------- ---------- --------
Transactions with
owners:
Share based
payments - - - - - 203 203 - 203
Deferred tax on
share based
payments - - - - - 25 25 - 25
Equity dividends
paid - - - - - (1,073) (1,073) (12) (1,085)
Transactions with
owners - - - - - (845) (845) (12) (857)
At 30 September
2012 4,256 150 1,523 8,790 176 (170) 14,725 333 15,058
--------- --------- --------- --------- ---------- ---------- -------- ---------- --------
WILLIAM SINCLAIR HOLDINGS PLC
Group statement of cash flows
for the year ended 30 September 2013
2013 2012
GBP000 GBP000
Operating activities
Group operating loss (959) (123)
Adjustments to reconcile Group operating
loss to net cash
inflows from operating activities
Depreciation of property, plant and equipment 1,793 1,934
Amortisation of intangible assets 171 164
Impairment of assets - 640
Profit on disposal of property, plant
and equipment (110) (222)
Share-based payments 120 203
Difference between pension contributions
paid and amounts
recognised in the income statement (964) (895)
(Increase) / decrease in inventories (975) 2,478
Decrease in trade and other receivables (814) (1,730)
Decrease / (increase) in trade and other
payables 2,071 (2,211)
Increase in provisions 8 6
Cash generated from operations 341 244
Income taxes received / (paid) 365 (715)
Net cash flow from operating activities 706 (471)
------- -------
Investing activities
Interest received 3 33
Sale of property, plant and equipment 236 266
Purchases of property, plant and equipment (3,456) (7,358)
Payments to acquire intangible fixed
assets (57) (64)
Net cash flow from investing activities (3,274) (7,123)
------- -------
Financing activities
Interest paid (156) (115)
Dividends paid to owners of the parent (699) (1,073)
Dividends paid to minority interests (17) (12)
New borrowings - 5,000
Repayment of borrowings (162) (641)
Net cash flow from financing activities (1,034) 3,159
------- -------
Decrease in cash and cash equivalents (3,602) (4,435)
Cash and cash equivalents at the beginning
of the year (987) 3,448
Cash and cash equivalents at the year
end (4,589) (987)
======= =======
1 Statutory accounts
The consolidated financial statements of William Sinclair
Holdings PLC are prepared on a going concern basis and in
accordance with International Financial Reporting Standards (IFRSs)
as adopted by the European Union, International Financial Reporting
Interpretations Committee (IFRIC) interpretations and Standing
Interpretations Committee (SIC) interpretations as adopted by the
European Union and with those parts of the Companies Act 2006
applicable to those companies reporting under IFRSs. The
consolidated financial statements are prepared in accordance with
the historical cost convention, as modified by the revaluation of
freehold and leasehold properties.
The Group financial statements are presented in sterling and all
values are rounded to the nearest thousand pounds (GBP000) except
when otherwise indicated.
These results for the year to 30 September 2013 together with
the corresponding amounts for the year to 30 September 2012 are
extracts from the 2013 annual report and do not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006.
The statutory accounts for the year ended 30 September 2013,
which have been audited by PricewaterhouseCoopers LLP, incorporate
an unqualified audit report and do not contain a statement under
either section 498(2) or 498(3) of the Companies Act 2006.
This preliminary announcement of the results for the year ended
30 September 2013 was approved by the Board of directors on 20
January 2014.
The accounting policies used for the 2013 figures are unchanged
on those used for the 2012 comparatives.
The statutory accounts for the period ended 30 September 2012
have been delivered to the Registrar of Companies and the statutory
accounts for the year ended 30 September 2013 will be delivered to
the Registrar of Companies following the Annual General Meeting of
William Sinclair Holdings PLC.
2 Analysis of net cash/(debt)
1 Oct Cash 30 Sept
2012 flow 2013
GBP000 GBP000 GBP000
Cash at bank and in hand 925 (141) 784
Overdrafts (1,912) (3,461) (5,373)
Loans (5,162) 162 (5,000)
(6,149) (3,440) (9,589)
======= ======= =======
3 Assets held for sale and receipt from Natural England
On 22 March 2010 the Group signed an agreement with Natural
England to facilitate the cessation of peat harvesting from its
site at Bolton Fell in Cumbria and to accelerate the process of
peat bog regeneration. Under the arrangement Natural England agreed
to pay the Group an advance payment of GBP9 million pending
subsequent negotiation of the full extent of compensation due to
the Group and to have the option to acquire the shares of Boothby
& Penicuik Peat Company Limited which holds the majority of the
title to the Bolton Fell moss site. This initial payment was made
in April 2010.
William Sinclair's professional advisors calculate the value of
the compensation due to the Group to be substantially greater than
the GBP9 million advance payment. The Group had expected to reach a
settlement with Natural England during the year but this did not
prove possible. The matter was referred to the Lands Tribunal (as
provided for in the agreement) and the Group has submitted its
Statement of Case to the tribunal. The Lands Tribunal has now fixed
a timetable for the exchange of expert witness information and a
hearing in early Summer 2014. A decision should therefore be made
within twelve months of the balance sheet date. As a consequence
the related property assets for both 2012 and 2013, valued at
GBP5,869,000, have been categorised within assets held for
sale.
In accordance with terms set out in the agreement William
Sinclair has now ceased harvesting peat from Bolton Fell but has a
few more months to remove its harvested peat stock from the site.
An accelerated programme of regeneration is now the responsibility
of Natural England. William Sinclair's own team expects to be
working closely with environmental experts from Natural England and
other agencies to set out new plans to regenerate the peat bog in a
practical and structured way.
Also included in assets held for sale, at a value of
GBP1,645,000 for both 2012 and 2013, is the freehold property at
Oswaldtwistle which is being actively marketed with a purchase
option now agreed with a property developer.
4 (Loss)/Earnings per share
Basic loss per share amounts are calculated by dividing the loss
for the year attributable to owners of the parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted loss per share amounts are calculated by dividing the
loss for the year attributable to owners of the parent by the
weighted average number of ordinary shares outstanding during the
year adjusted for the dilutive effect of share options outstanding
at the year end.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
2013 2012
GBP000 GBP000
Net loss attributable to owners of the parent (977) (467)
====== ======
2013 2012
Number Number.
Basic weighted average number of shares ('000s) 17,049 17,024
Dilutive potential ordinary shares:
Employee share options ('000s) 386 578
Diluted weighted average number of shares ('000s) 17,435 17,602
====== =======
There have been no transactions involving ordinary shares or
potential ordinary shares between the reporting date and the date
of completion of these financial statements.
5 Segment information
Within the horticulture sector the Board reviews the results of
Freeland, its specialist topsoils and SuperFyba business, and
certain ancillary businesses separately from those of its core
horticulture business. The revenues and operating profits of these
segments are shown below together with a reconciliation to the
Group results.
External sales Internal sales Total sales
2013 2012 2013 2012 2013 2012
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
Horticulture 36,210 38,504 39 86 36,249 38,590
Freeland 6,501 6,076 530 174 7,031 6,250
Other 3,768 3,660 - - 3,768 3,660
Total 46,479 48,240 569 260 47,048 48,500
Less intra group sales
elimination - - (569) (260) (569) (260)
Total revenue 46,479 48,240 - - 46,479 48,240
======= ======= ======= ======= ====== ======
Segment revenue includes transactions between business segments.
These transactions are eliminated on consolidation. Sales between
segments are carried out at arm's length. The revenue from external
parties reported to the executive directors is measured in a manner
consistent with that in the income statement.
2013 2012
GBP000 GBP000
Operating profit / (loss)
Horticulture 1,265 513
Freeland (638) 667
Other 387 582
Total segment operating profit 1,014 1,762
Central costs (1,196) (1,220)
------- -------
Total Group operating (loss) / profit before
exceptional items (182) 542
Exceptional items (777) (665)
Total Group operating loss after exceptional
items (959) (123)
Finance income 3 33
Finance costs (161) (120)
Other finance costs (65) (194)
Total Group loss before tax (1,182) (404)
======= =======
5 Segment information (continued)
Central costs include the administration costs of the holding
company such as directors' remuneration, professional fees and
stock exchange costs.
Operating loss as reported above includes impairment,
depreciation and amortisation charges as follows:
Impairment Depreciation
and amortisation
2013 2012 2013 2012
GBP000 GBP000 GBP000 GBP000
Horticulture - 640 1,472 1,748
Freeland - - 463 301
Other - - 15 39
Central costs - - 14 10
Total - 640 1,964 2,098
====== ====== ========= ========
Asset and liability information is not reported to the chief
operating decision maker on a segment basis and therefore has not
been disclosed.
6 Exceptional items
The operation of the trading sites at Knottingley and
Gainsborough (Silvaperl) are in the process of being transferred to
the new site at Ellesmere Port. The relocations were completed in
November and December 2013 respectively. The resulting redundancy
costs of GBP178,000 have been shown as exceptional. The tax impact
of this charge is a credit of GBP36,000.
In Autumn 2013 the Group has undertaken a restructuring of its
finances to include the issue of a new five year loan note and the
move to an asset based lender. The professional fees and bank
charges for work carried out before the year end amounted to
GBP230,000. During the year the Group incurred a range of overhead
costs at its new Ellesmere Port site that duplicated costs
necessarily incurred elsewhere in the Group. These dual running
costs amounted to GBP369,000 in the year and are treated as
exceptional.
On 9 November 2012, the Group heard that its appeal against the
refusal of an extension of its planning permission to harvest peat
at Chat Moss was refused. As a consequence, the Group completed an
impairment review of the carrying value of its assets near Salford
and took a charge to the Group Income Statement of GBP640,000 as a
result. In addition the Group incurred redundancy costs in respect
of the site of GBP25,000. The total charge for the year of
GBP665,000 is shown as an exceptional item in the results for the
year ended 30 September 2012. The tax impact of this charge is a
credit of GBP84,000.
7 Dividends paid and proposed
2013 2012
GBP000 GBP000
Declared and paid during the year:
Equity dividends on ordinary shares:
Final dividend for September 2012: 2.6p (September
2011: 4.4p) 443 749
Interim for September 2013: 1.5p (September
2012 - 1.9p) 256 324
Dividends paid 699 1,073
====== ======
Proposed for approval by shareholders at the
AGM:
Final dividend for September 2013: 1.5p (2012:
2.6p) 256 443
====== ======
Subject to shareholders' approval the final dividend of 1.5p per
share will be paid on 17 April 2014 to shareholders on the register
on 7 March 2014.
8 Share capital
Issued and fully paid 2013 2012 2013 2012
Number Number GBP000 GBP000
Ordinary shares of 25p each 17,059,046 17,024,046 4,265 4,256
During the year 35,000 ordinary shares of 25p each were issued
at nil cost under the Group's LTIP scheme.
9 Post Balance Sheet Event
On 20 December 2013 the Company raised a total of GBP8.24
million before expenses through the issue of secured redeemable
convertible loan notes to institutional and other investors the
majority of whom are existing shareholders in the Company.
The funding provided by the convertible notes is being used to
fund the working capital needs of the Group and to expedite
development of the Group's Ellesmere Port manufacturing
facility.
On 15 January 2014 the Group completed the transfer of its
banking arrangements to Royal Bank of Scotland Group. The new
facilities include a working capital facility of up to GBP25
million. In addition a five year term loan of GBP3 million and
asset finance facilities of GBP2 million will be completed shortly.
The working capital facilities are at 2% above base rate while the
term loan is at 3% above base rate.
10 Annual General Meeting
The Company intends to post the Report and Accounts to
shareholders on 20 February 2014. The Annual General Meeting of the
Company will be held at noon on Friday 28 March 2014 at the Group's
flagship site at Ellesmere Port when there will be an opportunity
for shareholders to tour the site. The full address is William
Sinclair Horticulture, Bridges Road, Ellesmere Port, Cheshire CH65
4LB.
Copies of this announcement are available from the Company's
registered office which is Firth Road, Lincoln, LN6 7AH during
normal office hours and on the Company's website
www.william-sinclair.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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