HC Slingsby plc
Report & Accounts
for the year ended 31st December 2015
Solicitors
Squire Patton Boggs
(UK) LLP
2 Park Lane
Leeds LS3 1ES
Financial Advisors & Brokers
Allenby Capital Limited
3 St. Helens Place
London
EC3A 6AB
Website & E-Mail
The company’s website
address is:
www.slingsby.com
The company’s e-mail address is:
sales@slingsby.com
Directors & Advisors
Directors
J. R. Waterhouse –
Executive Chairman
D. S. Slingsby – Operations
Director
M. L. Morris – Financial Director
Company Secretary
M. L. Morris
Registered Office
Otley Road
Baildon, Shipley
West Yorkshire BD17 7LW
Tel : (01274) 535030
Fax : (01274) 535035
Registered Number
452716
Registrars
Capita Registrars plc
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Independent Auditors
PricewaterhouseCoopers LLP
Benson House
33 Wellington Street
Leeds LS1 4JP
We are one of the UK market leaders in the distance selling
of industrial & commercial equipment.
We manufacture and distribute over 35,000 high quality
products covering everything you need for the workplace
from handling and lifting and premises equipment to retail
and office supplies, including many new ideas to help keep
your business running smoothly.
We are committed to providing our customers with an
extensive product range, outstanding service and efficient
delivery.
Contents
Statement by the Chairman
Strategic report
Report of the Directors
Corporate Governance
Statement of Directors’
Responsibilities
Independent Auditors’ Report
1
2
4
6
7
8
Consolidated Income Statement
10
Statement of Consolidated
Comprehensive Income
and Expense
Statements of Consolidated and
Company changes in shareholders’
equity
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Cash Flow
Statement
Company Cash Flow Statement
Note to the Cash Flow
Statements
Notes to the Accounts
Five Year Summary
Notice of Annual
General Meeting
Notes to the Notice of
Annual General Meeting
11
12
13
14
15
16
16
17
36
37
39
Contents
Report & Accounts 2015 | HC Slingsby plc
Report & Accounts 2015 | HC Slingsby plc
Statement by the Chairman
In my 2015 half year statement I reported a pre-tax trading loss (before exceptional items) of £0.15m on sales of £7.7m. Sales in
the autumn did show some improvement before falling away in the last two months of the year. The full year pre-tax trading loss
(before exceptional items) was £0.35m (2014: £0.26m) on sales of £17.1m (2014: £12.6m). Together with the exceptional
restructuring cost and costs associated with the acquisition of ESE of £281,000, the full year pre-tax loss for 2015 was £0.63m
(2014: £0.45m).
On 27 March 2015, we announced the acquisition of ESE Direct Limited (“ESE”), a supplier of industrial and commercial equipment
operating in the same sector as Slingsby and based in Norwich. The consideration was £3.4m net of surplus cash on acquisition.
This was financed through a combination of cash and asset backed finance.
ESE contributed £4.8m of turnover and £0.13m profit before tax to the group following its acquisition (prior to amortisation of
intangible assets arising on acquisition). Whilst ESE’s performance since acquisition has fallen short of initial expectations, we
expect that recent management changes and the realisation of synergies will improve profit contribution in 2016.
Sales to 30th of April 2016 for the Slingsby business are 3.3% down on the corresponding period in 2015 but there are some signs
that the decline against the prior year has slowed. The market continues to be extremely competitive and we have to respond to
that challenge with further significant changes in the way we do business.
Your Board recognises that continuing losses are not acceptable and that urgent action is necessary to return your company to
profitability. On 19 April 2016 Dominic Slingsby stood down as Managing Director of H C Slingsby plc to take up the post of
Operations Director. On behalf of all shareholders I thank him for his many years of service as Managing Director.
We shall seek a new Managing Director but in the meantime I have taken responsibility for the group as Interim Executive Chair-
man until the new Managing Director is in post. We shall in the meantime also seek one or more new Non-Executive Directors to
strengthen our Board and help our recovery. When the new Board is complete I expect to retire from the Company.
Lee Wright, Sales and Marketing Director, has also resigned from the Board, on 19 May 2016, and I thank him for his many years
of service as a director.
On behalf of the Board I would once again like to thank all our loyal staff in both Bradford and in Norwich after another difficult year.
All their experience and ingenuity will be required to turn your company back into profit.
In view of the continuing loss in 2015, the Board is unable to recommend a final dividend for the year (2014: 6p).
These are difficult times for your Company as we strive to adapt to meet the challenges of today’s market and I ask that
shareholders show their support for the Board’s recovery plan by re-electing all the Directors offering themselves for re-election at
the Annual General Meeting on 30 June.
J. R. Waterhouse
Executive Chairman
25 May 2016
Report & Accounts 2015 | HC Slingsby plc
1
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc Strategic Report
The group’s principal activity comprises the merchanting
and distribution of a highly diversified range of industrial
and commercial equipment primarily consisting of incidental
purchasing supplies. The range spanning some 35,000
products includes the following sectors: materials handling,
access, storage and shelving, office, safety and security,
janitorial, mailroom and packaging, workshop and maintenance,
environmental and waste management, premises, signs and
labels, flooring and matting.
The sector is highly fragmented consisting of a small number
of directly comparable distance selling organisations and
an increasingly large number of specialist distributors. Our
customer base is similarly diverse and consequently demand
derived from these organisations is reflective of the current
macroeconomic circumstances.
The group is seeking to build upon our strengths in distance
selling and to further enhance our e-commerce offering as
well as to diversify our brand portfolio to capture different
customer segments who have alternative service propositions
and pricing strategies. We believe that deploying e-commerce
initiatives with not only customers but also key trading partners
will produce efficiencies as well as growth opportunities.
During 2015, we have continued to work with our IT partners to
improve our e-commerce offering and to become a true omni-
channel business.
During these continued challenging times, businesses will
aggressively seek to cut the cost of procurement. Our focus is
not only on providing value, choice and quality but moreover
to differentiate ourselves by providing excellent knowledge
and service in an ever changing regulatory environment. One
key way in which we do this is by offering a broad spectrum
of specialist publications that have pioneered the provision
of knowledge and expertise to the facilities management and
occupation health sectors. Next day delivery is offered on a
substantial proportion of our lines to further augment our service
levels.
In addition, during 2016 we plan to further invest in our pricing
strategy across the group. Our acquisition of ESE Direct
Limited provides the opportunity to differentiate our core value
proposition with a second brand in the highly competitive web
sales arena. The acquisition fits directly into our core operations
and we expect to continue to generate synergies to augment
ESE’s contribution to group profitability.
The directors believe that the group’s strong core brand values
of quality, reliability and service excellence remain as true today
as they have done over the past 120 years of trading and this
is recognised by the significant number of repeat customers.
We believe that this focus on value and service will arrest the
decline in sales experienced over recent years.
Key Performance Indicators and Business
Performance
Sales growth
Return on capital employed
Return on sales
Gross profit margin
2015
35.5%
(27.4%)
(3.7%)
36.6%
2014
(9.9%)
(16.3%)
(3.6%)
40.0%
Notes:
Sales growth includes sales from ESE Direct Limited acquired on 27
March 2015. Comparable sales growth was (1.7%).
Return on capital employed is calculated as loss before taxation over
the total equity at the year end. Excluding ESE the comparative is
(28.3%).
Return on sales is calculated as loss before taxation over revenue.
Excluding ESE the comparative is (5.2%).
A review of the business is included in the Statement by the
Chairman on page 1.
Principal risks and uncertainties
The directors recognise that there are a number of risks that
may affect the performance of the business as below. These
risks and uncertainties are subjected to regular review and
where appropriate, processes are established to minimise the
level of exposure.
People
The principal asset of the group is the commitment and skill
of its people. The retention of these people is therefore key to
the success of the business. The group has in place incentive
schemes which are related to its results and which allow all
employees to participate in the success of the group as a whole.
Economic and market cycles and volatility
The group’s operating performance is influenced by the
economic conditions of the regions in which it operates,
principally the UK. The continued uncertain economic
environment could result in a general reduction in business
activity and a consequent loss of income for the group.
The main risk arising from the group’s financial instruments
is liquidity risk. The group ensures that it has sufficient bank
facilities available to meet all short term cash requirements
for the foreseeable future. The group purchases a significant
amount of its products from overseas suppliers in foreign
currencies and uses forward foreign currency contracts. The
group’s borrowings are on floating rates of interest and so the
cost of these facilities would increase should interest rates rise.
The Board keeps these risks under regular review.
2
Report & Accounts 2015 | HC Slingsby plc Strategic Report continued
Commercial Relationships
The group benefits from many long term relationships with key
customers but having many thousands of customers gives
us low revenue concentration risk. The group, which has no
significant supplier dependency, is in frequent contact with its
suppliers to ensure that it is fully aware of market trends and
innovations.
Technology Changes
Following the significant investment made in our IT system,
we continue to work with our IT partners to further augment
our systems. During 2016, we plan to implement the Slingsby
business system at ESE Direct Limited.
Competition
The group recognises that although it operates primarily within
the UK it has to be mindful of highly competitive pan-European
and global activity as well as service and performance criteria
in local markets. Margins are carefully monitored and the
commercial offering is adjusted where appropriate.
Regulatory
To ensure that we remain fully compliant with all regulatory
requirements we constantly monitor changes in laws,
regulations and standards relating to employment, safety,
environment and quality, to enable us to adapt our policies
and procedures accordingly. This ensures we continue to meet
customer requirements, minimise business impact and control
costs, whilst observing our legal and social responsibilities.
Approvals
To demonstrate our commitment to continuous improvement
in both Quality and Environmental Management we remain
UKAS (UK Accreditation Service) accredited to the international
standards ISO 9001:2008 and ISO 14001:2004 respectively.
Exceptional Item
The costs of the acquisition of ESE Direct Limited resulted in
an exceptional item of £193,000. A further exceptional item of
£88,000 related to redundancy and compensation costs (total
exceptional items £281,000). In the prior year, redundancy costs
were £193,000.
Pensions
The group has an obligation to fund its defined benefit pension
scheme and this creates an exposure to interest rates, inflation,
investment return and the longevity of the plan members. The
group eliminated these risks for future service by the closure
of the scheme to future accrual from 31 March 2009; however,
the funding of the past service liabilities remains and has the
potential to create significant variances in the group’s cash
flows and balance sheet.
Contributions to this scheme totalled £500,000 during 2015
and, together with the substantial costs of running the scheme,
represents a significant commitment for the Group to meet.
Health and Safety
We continue to meet our statutory and regulatory environmental
obligations, through membership of our local Eco-Network
and appropriate compliance schemes. The group initiatives in
optimising our carbon footprint not only benefit the environment
but also reduce our costs.
Environmental Sustainability
In addition to statutory and regulatory compliance, the group
takes pride in its environmental initiatives which have been
recognised by winning prestigious awards for carbon reduction.
By order of the Board
M. L. Morris
Company Secretary
25 May 2016
3
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc Report of the Directors
The directors are pleased to present their annual report and
audited consolidated financial statements for the year ended
31 December 2015. Future developments are considered in the
Statement by the Chairman on page 1.
H C Slingsby plc is a public limited company with securities
traded on the AIM market of the London Stock Exchange. It is
incorporated and domiciled in the United Kingdom and based in
Baildon, West Yorkshire.
Directors
The directors of the company who were in office during the year
and up to the date of signing the financial statements are as
follows:
J.R. Waterhouse
C.J. Slingsby
(resigned 17 June 2015)
D.S. Slingsby
L.R. Wright
(resigned 19 May 2016)
M.L. Morris
(appointed 13 February 2015)
R.G. Hudson
(resigned 13 February 2015)
Dividends
The following dividends have been proposed for the 2015
financial year:
An interim dividend of nil pence per share
(2014: 2p per share)
The directors recommend a final dividend of
nil pence per share (2014: 4p per share)
£’000
-
-
In addition to the above, C. J. Slingsby and D. S. Slingsby
together have a non-beneficial interest in respect of 64,000
(2014: 64,000) ordinary shares.
Going Concern
After making appropriate enquiries, including a review of
forecasts and strategic plans, the directors have a reasonable
expectation that the group has adequate resources to continue
in operational existence for the foreseeable future. For this
reason the going concern basis has been adopted in preparing
the group’s accounts.
Substantial Interests
So far as the directors are aware these were the following
substantial interests, other than those included in directors’
interests, in the shares of the company at 25 May 2016:
M. Chadwick*
J. Crowther Jones
& Mr. T. E. Jones
J. H. Ridley
S. E. Slingsby
M. Miller (registered in the name
of Platform Securities Nominees
Limited)
H. Slingsby
Number of
ordinary
Shares of
25p each
Percentage
Holding
180,295
18.0%
54,866
54,302
51,167
48,381
47,138
37,000
32,500
30,835
30,061
5.5%
5.4%
5.1%
4.8%
4.7%
3.7%
3.3%
3.1%
3.0%
Directors’ Interests
The beneficial interests of the directors and their immediate
families in the shares of the company are:
K. J. Williams
S. Whittaker
S. A. Williams
Number of ordinary shares
of 25p each
H C Slingsby plc Retirement
Benefits Scheme
31 December
2015
1 January
2015
* 80,995 registered in the name of Goodbody Stockbrokers Nominees
Ltd and 99,300 in the name of Rulegale Nominees Limited
J.R. Waterhouse
C.J. Slingsby
D.S. Slingsby
R.G. Hudson
L.R. Wright
M.L. Morris
1,000
53,886
51,167
-
2,000
1,000
1,000
53,886
51,167
3,400
2,000
-
On 24 April 2015 M. L. Morris purchased 1,000 ordinary shares
of 25p each.
There have been no other changes in the directors’
shareholdings between 31 December 2015 and 25 May 2016.
None of the directors had any beneficial interest in any contract
of significance to which the company was a party, other than
their employment contracts, subsisting during the year.
4
Report & Accounts 2015 | HC Slingsby plc
Report of the Directors continued
Financial Instruments
The group’s financial instruments comprise cash, forward
foreign exchange contracts and various items such as trade
receivables and trade payables that arise directly from its
operations. The main purpose of these financial instruments is
to finance the group’s operations.
Financial risk management disclosures are included in note 22
to the financial statements.
Indemnification of Directors
The company confirms that qualifying third party indemnity
insurance cover has been effected in respect of directors’
and officers’ liability to protect “insured persons” in respect
of liabilities devolving on them for wrongful acts arising in the
normal conduct of the business. This was in place throughout
the last financial year and is currently in force.
Audit Information
So far as each of the directors is aware, there is no relevant
information that has not been disclosed to the company’s
auditors and each of the directors believes that all steps have
been taken that ought to have been taken to make them aware
of any relevant audit information and to establish that the
company’s auditors have been made aware of that information.
Independent Auditors
A resolution to reappoint PricewaterhouseCoopers LLP as the
company’s auditors and authorising the directors to fix their
remuneration will be proposed at the Annual General Meeting.
Corporate Governance
The company’s statement on corporate governance is included
in the Corporate Governance report on page 6 of the financial
statements.
By order of the Board
M. L. Morris
Company Secretary
25 May 2016
5
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Corporate Governance
The Board recognises the value and importance of high standards of corporate governance. Accordingly, whilst the UK Corporate
Governance Code does not apply to AIM companies, the Board intends to observe the requirements of the Corporate Governance
Code for small and mid-size companies (“the Code”) published by the Quoted Companies Alliance to the extent that they consider
appropriate in light of the Group’s size and resources.
The Board
The Board meets formally on a monthly basis and special meetings are convened to discuss matters that require urgent
consideration. In view of the size of the group and the close involvement of the directors, informal meetings take place frequently.
Accordingly, a register of all meetings has not been kept with which to record attendances. There is a Schedule of Matters
specifically reserved for the Board’s decision. There is also an established procedure for all directors to take independent
professional advice, if necessary, at the company’s expense. Additionally, all directors have access to the advice and services of
the Company Secretary and the company maintains directors’ and officers’ liability insurance.
The Board comprises the following:
J. R. Waterhouse
D. S. Slingsby
M. L. Morris
–
–
–
Executive Chairman*
Operations Director*
Financial Director and Company Secretary
* Member of both Audit and Remuneration Committees
Relations with Shareholders
The company is ready, where practicable, to enter into a dialogue with institutional shareholders based on the mutual
understanding of objectives. The board also uses the Annual General Meeting (“AGM”) to communicate with private investors. The
directors are available to answer questions raised by shareholders at the AGM. The level of proxies lodged on each AGM resolution
and the numbers for, against and withheld for each resolution are declared by the Chairman after the resolution has been dealt with
on a show of hands.
Internal Controls
The Board acknowledges that it is responsible for the group’s system of Internal Control and for reviewing its effectiveness.
Reflecting the size of the group, a key control procedure is the close day-to-day supervision of the business by the executive
directors, supported by the senior management with responsibility for key operations.
The executive directors are involved in the budget setting process, constantly monitoring key performance indicators such as those
highlighted in the business review and reviewing the management accounts on a monthly basis, noting and investigating major
variances. All significant capital expenditure decisions are approved by the Board as a whole, in line with the Schedule of Matters
reserved for the Board.
By order of the Board
M. L. Morris
Company Secretary
25 May 2016
6
Report & Accounts 2015 | HC Slingsby plc
Statement of Directors’ Responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have
prepared the group and parent company financial statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of
the group for that period. In preparing these financial statements, the directors are required to:
•
•
•
•
Select suitable accounting policies and then apply them consistently;
Make judgements and accounting estimates that are reasonable and prudent;
State whether applicable IFRSs as adopted by the European Union have been followed, subject to any
material departures disclosed and explained in the financial statements; and
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company and the group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s
transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable
them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the
assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors are responsible for the maintenance and integrity of the company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By order of the Board
M. L. Morris
Company Secretary
25 May 2016
7
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Independent auditors’ report to the members of H C Slingsby plc
Report on the financial statements
Our opinion
In our opinion:
•
•
•
•
H C Slingsby plc’s group financial
statements and company financial statements (the
“financial statements”) give a true and fair view of
the state of the group’s and of the company’s affairs as
at 31 December 2015 and of the group’s loss and the
group’s and the company’s cash flows for the year
then ended;
the group financial statements have been properly
prepared in accordance with International Financial
Reporting Standards (“IFRSs”) as adopted by the
European Union;
the company financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the
provisions of the Companies Act 2006; and
the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
What we have audited
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion, the information given in the Statement by the
Chairman, Strategic Report and the Report of the Directors’ for
the financial year for which the financial statements are
prepared is consistent with the financial statements.
Other matters in which we are required to
report by exception
Adequacy of accounting records and information and
explanations received
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
•
•
•
we have not received all the information and
explanations we require for our audit; or
adequate accounting records have not been kept by
the company, or returns adequate for our audit have
not been received from branches not visited by us; or
the company financial statements are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
The financial statements, included within the Annual Report &
Accounts (the “Annual Report”), comprise:
Directors’ remuneration
•
•
•
•
•
the consolidated and company balance sheets as at
31 December 2015;
the consolidated income statement and statement of
consolidated comprehensive income and expense for
the year then ended;
the consolidated and company cash flow statements
for the year then ended;
the statement of consolidated and company changes
in shareholders’ equity for the year then ended; and
the notes to the financial statements, which include a
summary of significant accounting policies and other
explanatory information.
The financial reporting framework that has been applied in the
preparation of the financial statements is IFRSs as adopted by
the European Union, and applicable law and, as regards the
company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
In applying the financial reporting framework, the directors
have made a number of subjective judgements, for example
in respect of significant accounting estimates. In making such
estimates, they have made assumptions and considered future
events.
Under the Companies Act 2006 we are required to report to you
if, in our opinion, certain disclosures of directors’ remuneration
specified by law are not made. We have no exceptions to report
arising from this responsibility.
Responsibilities for the financial statement
and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors’
Responsibilities set out on page 7, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland) (“ISAs
(UK & Ireland)”). Those standards require us to comply with the
Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and
only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no
other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent
in writing.
8
Report & Accounts 2015 | HC Slingsby plc
Independent auditors’ report to the members of H C Slingsby plc continued
What an audit of financial statements
involves
We conducted our audit in accordance with ISAs (UK & Ireland).
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free
from material misstatement, whether caused by fraud or error.
This includes an assessment of:
•
•
•
whether the accounting policies are appropriate to the
group’s and the company’s circumstances and have
been consistently applied and adequately disclosed;
the reasonableness of significant accounting estimates
made by the directors; and
the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the
directors’ judgements against available evidence, forming our
own judgements, and evaluating the disclosures in the financial
statements.
We test and examine information, using sampling and other
auditing techniques, to the extent we consider necessary to
provide a reasonable basis for us to draw conclusions. We
obtain audit evidence through testing the effectiveness of
controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial
information in the Annual Report to identify material
inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we
become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Randal Casson (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Leeds
25 May 2016
9
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Consolidated Income Statement
For the year ended 31 December 2015
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Operating (loss)/profit before exceptional item
Exceptional item
Operating loss
Finance income
Finance costs
Loss before taxation
Taxation
Loss for the year attributable to owners of the parent
Note
3
6
7
8
9
2015
£’000
17,061
(10,812)
6,249
(3,566)
(2,974)
(10)
(281)
(291)
1
(342)
(632)
194
(438)
2014
£’000
12,587
(7,549)
5,038
(2,726)
(2,413)
92
(193)
(101)
7
(359)
(453)
154
(299)
Basic and diluted loss per share
10
(43.8p)
(29.9p)
10
Report & Accounts 2015 | HC Slingsby plc Statement of Consolidated Comprehensive Income and Expense
For the year ended 31 December 2015
Loss for the year
Items that will not be reclassified to profit or loss:
Remeasurements of post-employment benefit obligations
Movement in deferred tax relating to retirement benefit obligation
Items that may be subsequently reclassified to profit or loss:
Exchange adjustment
Other comprehensive income/(expense)
Note
2015
£’000
2014
£’000
24
16
(438)
(299)
242
(213)
(13)
16
(583)
116
(17)
(484)
Total comprehensive expense for the year attributable to equity shareholders
(422)
(783)
11
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc Statements of Consolidated and Company Changes in
Shareholders’ Equity
For the year ended 31 December 2015
Group
1 January 2014
Loss for the year
Other comprehensive expense for the year
Total comprehensive expense for the year
Dividends paid
1 January 2015
Loss for the year
Other comprehensive income/(expense) for the year
Total comprehensive expense for the year
Dividends paid
31 December 2015
12
12
Share
capital
£’000
Retained
earnings
£’000
Translation
reserve
£’000
Note
250
–
–
–
–
250
–
–
–
–
250
3,417
(299)
(467)
(766)
(120)
2,531
(438)
29
(409)
(60)
2,062
21
–
(17)
(17)
–
4
–
(13)
(13)
–
(9)
Total
equity
£’000
3,688
(299)
(484)
(783)
(120)
2,785
(438)
16
(422)
(60)
2,303
The translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign
operations.
Note
12
12
Share
capital
£’000
250
–
–
–
–
250
–
–
–
–
250
Retained
earnings
£’000
3,181
(286)
(467)
(753)
(120)
2,308
(447)
29
(418)
(60)
1,830
Total
equity
£’000
3,431
(286)
(467)
(753)
(120)
2,558
(447)
29
(418)
(60)
2,080
Company
1 January 2014
Loss for the year
Other comprehensive expense for the year
Total comprehensive expense for the year
Dividends paid
1 January 2015
Loss for the year
Other comprehensive income for the year
Total comprehensive expense for the year
Dividends paid
31 December 2015
12
Report & Accounts 2015 | HC Slingsby plc
Company
1 January 2014
Loss for the year
Dividends paid
1 January 2015
Loss for the year
Other comprehensive expense for the year
Total comprehensive expense for the year
Other comprehensive income for the year
Total comprehensive expense for the year
Dividends paid
31 December 2015
Note
12
12
Share
capital
£’000
250
250
–
–
–
–
–
–
–
–
250
Retained
earnings
£’000
3,181
(286)
(467)
(753)
(120)
2,308
(447)
29
(418)
(60)
1,830
Total
equity
£’000
3,431
(286)
(467)
(753)
(120)
2,558
(447)
29
(418)
(60)
2,080
Consolidated Balance Sheet
As at 31 December 2015
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Derivative financial asset
Cash and cash equivalents
Current tax asset
Liabilities
Current liabilities
Trade and other payables
Finance lease obligations
Net current (liabilities)/assets
Non-current liabilities
Finance lease obligations
Retirement benefit obligation
Deferred tax liabilities
Net assets
Capital and reserves
Share capital
Retained earnings
Translation reserve
Total equity
Note
2015
£’000
2014
£’000
13
14
14
16
17
18
20
19
21
21
24
16
25
6,102
1,279
2,409
1,446
11,236
5,952
473
-
1,694
8,119
1,778
2,340
11
192
-
4,321
1,951
1,840
4
1,940
88
5,823
(4,653)
(44)
(4,697)
(376)
(66)
(8,033)
(458)
2,303
250
2,062
(9)
2,303
(2,083)
-
(2,083)
3,740
-
(8,471)
(603)
2,785
250
2,531
4
2,785
The financial statements on pages 10 to 35 were approved by the Board of Directors on 25 May 2016 and were signed on its behalf
by:
D. S. Slingsby
Director
M. L. Morris
Director
H C Slingsby plc
Registered Number: 452716
13
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Company Balance Sheet
As at 31 December 2015
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Investments in subsidiaries
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Derivative financial asset
Current tax asset
Liabilities
Current liabilities
Trade and other payables
Finance lease obligations
Net current (liabilities)/assets
Non-current liabilities
Finance lease obligations
Retirement benefit obligation
Deferred tax liabilities
Net assets
Capital and reserves
Share capital
Retained earnings
Total equity
Note
2015
£’000
2014
£’000
13
14
15
16
17
18
20
19
21
21
24
16
25
5,877
352
4,001
1,446
11,676
1,731
1,876
62
11
-
3,680
(4,690)
(44)
(4,734)
(1,054)
(66)
(8,033)
(443)
2,080
250
1,830
2,080
5,952
473
–
1,694
8,119
1,951
1,844
1,691
4
88
5,578
(2,059)
-
(2,059)
3,519
-
(8,471)
(609)
2,558
250
2,308
2,558
The financial statements on pages 10 to 35 were approved by the Board of Directors on 25 May 2016 and were signed on its behalf
by:
D. S. Slingsby
Director
M. L. Morris
Director
H C Slingsby plc
Registered Number: 452716
14
Report & Accounts 2015 | HC Slingsby plc Consolidated Cash Flow Statement
For the year ended 31 December 2015
Cash flows from operating activities
Cash generated from/(used in) operations
Interest payable
UK corporation tax received
Cash generated from/(used in) operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Acquisition of subsidiary (net of cash acquired)
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities
Cash flows from financing activities
Equity dividends paid
Capital element of finance lease payments
New finance leases
Proceeds from borrowings
Net cash generated from / (used in) financing activities
Net decrease in cash and cash equivalents
Opening cash and cash equivalents
Exchange differences
Closing cash and cash equivalents
2015
£’000
2014
£’000
Note
171
(38)
93
226
(169)
-
28
(141)
13
28
14
12
1
(198)
(3,585)
112
(26)
(3,696)
(60)
(20)
130
1,202
1,252
(2,218)
1,940
15
(112)
-
25
(35)
(107)
(120)
-
-
-
(120)
(368)
2,325
(13)
(17)
(291)
1,940
Cash and cash equivalents
Cash
Overdraft
Group
2015
£’000
192
(483)
(291)
2014
£’000
1,940
-
1,940
Company
2015
£’000
62
(483)
(421)
2014
£’000
1,691
-
1,691
15
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc Company Cash Flow Statement
For the year ended 31 December 2015
Cash flows from operating activities
Cash generated from / (used in) operations
Interest payable
UK corporation tax received
Cash generated from / (used in) operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Acquisition of subsidiary
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities
Cash flows from financing activities
Equity dividends paid
Capital element of finance leases payments
New finance leases
Proceeds from borrowings
Net cash generated from / (used in) financing activities
Net decrease in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
Note to the Cash Flow Statements
For the year ended 31 December 2015
Cash generated from/(used in) operating activities
Loss before tax
Net finance costs
Depreciation and amortisation
Profit on sale of property, plant and equipment
Pension deficit contributions
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
Increase/(Decrease) in trade and other payables
Cash generated from/(used in) operating activities
16
Note
13
14
12
2015
£’000
597
(38)
137
696
1
(176)
(3,971)
112
(26)
(4,060)
(60)
(20)
130
1,202
1,252
(2,112)
1,691
(421)
2014
£’000
(158)
-
28
(130)
15
(112)
-
25
(35)
(107)
(120)
-
-
-
(120)
(357)
2,048
1,691
Group
Company
2015
£’000
(632)
341
530
(99)
(500)
232
29
270
171
2014
£’000
2015
£’000
2014
£’000
(453)
352
424
(7)
(540)
(53)
549
(441)
(169)
(628)
(436)
342
382
(99)
(500)
220
(37)
917
597
352
424
(7)
(540)
(53)
546
(444)
(158)
Report & Accounts 2015 | HC Slingsby plc
Notes to the Accounts
1.
Accounting Policies
Basis of Preparation
The principal accounting policies adopted in the preparation of these financial statements, which have been applied consistently to
all years presented, are set out below.
The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the
European Union (IFRS as adopted by the EU), IFRS Interpretations Committee (IFRSIC) interpretations as adopted by the EU
and with the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements are prepared under the
historical cost convention on a going concern basis, except for derivative financial instruments which are measured at fair value
through profit or loss.
Despite the loss for the year and net current liabilities as at 31 December 2015, the directors’ consider that the going concern basis
is appropriate given the Group’s borrowing facilities are adequate to cover the reasonably foreseeable future.
Accounting Developments
Impact of new International Financial Reporting Standards
The group has not adopted any new or amended IFRSs as of 1 January 2015 that have had a material impact on the amounts
reported.
A number of new amendments have been issued but are not effective until 1 January 2016 and have not been early adopted. The
impact of these new standards and amendments will be assessed in detail prior to adoption, however at this stage the Directors do
not anticipate them to have a material impact on the Group.
Basis of Consolidation
The financial statements of the group consolidate the financial statements of H C Slingsby plc and its subsidiaries undertakings
up to 31 December 2015 using acquisition accounting. Subsidiaries are entities over which the group has the power to govern the
financial and operating policies. The results of subsidiary undertakings acquired during a financial period are included from the
effective date of acquisition. Intra-Group sales, Intra-Group balances and Intra-Group profits are eliminated fully on consolidation,
and consistent accounting policies have been adopted across the group.
The group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values for the assets transferred and the liabilities incurred to the former owners of the acquired. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values
at the acquisition date. Acquisition related costs are expensed as incurred.
Exceptional Items
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further
understanding of the financial performance of the group. They are material items of income or expense that have been shown
separately due to the significance of their nature or amount.
Accounting Estimates and Judgements
The preparation of these financial statements requires management to make estimates and judgements that affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue during the reporting
year. Actual results could materially differ from these estimates.
Key sources of estimation uncertainty that could cause an adjustment to be required to the carrying amount of asset or liabilities
within the next accounting year are:
•
•
•
•
•
•
Assumptions used in the calculation of the defined benefit pension scheme liability (note 24); and
Allowances against the valuation of inventories
(note 17).
Key judgements applied are in respect of:
Adoption of going concern basis (see Report of the Directors); and
Non-impairment of fixed assets based on expected future performance of the business
Recognition of intangibles in respect of business combinations (see note 28).
Revenue and Recognition of Income
Revenue comprises the fair value of the consideration received or receivable from the sale of goods and services in the ordinary
course of the group’s activities. Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating
sales within the Group. Revenue is recognised when the goods are dispatched to the customer.
17
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Employee Benefits
The group operates a defined benefit and a defined contribution pension scheme for its employees.
Defined benefit scheme: The pension liability recognised in the balance sheet in respect of the defined benefit scheme is the
present value of the defined benefit obligation at the balance sheet date less the fair value of the scheme assets. The defined
benefit obligation is calculated tri-annually by independent actuaries using the projected unit method and this valuation is updated
at each balance sheet date. The present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows using interest rates of high quality corporate bonds that have terms to maturity approximating to the terms of the
related pension liability.
Past service costs are recognised immediately in income. Actuarial gains and losses arising from experience adjustments and
changes in actuarial assumptions are recognised in full in the statement of comprehensive income in the period in which they arise.
Defined contribution scheme: contributions payable are charged to the income statement in the accounting year in which they are
incurred. The group has no further payment obligations once the contributions have been paid to this scheme.
Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating
leases.
Payments made under operating leases, net of any incentives received from the lessor, are charged to the income statement on a
straight-line basis over the period of the lease.
Foreign Currency
Items included in the financial statements of each of the group entities are measured using the currency of the primary economic
environment which the entity operates (the financial currency). The consolidated financial statements are presented in GBP which
is the group’s presentation currency.
Foreign currency transactions are translated using exchange rates prevailing at the date of the transactions, or, where forward
currency contracts have been taken out, at contractual rates. Per IAS 21 assets and liabilities are translated at exchange rates
ruling at the end of each financial year. Gains and losses on retranslation are recognised in the income statement.
Assets and liabilities of subsidiaries in foreign currencies are translated into sterling at the exchange rates ruling at the end of the
financial year. Differences on exchange arising from the retranslation of the opening net investment in subsidiary companies and
from the translation of the results of those companies at average rates are recognised as a separate component of equity and are
reported in the statement of comprehensive income.
Property, Plant and Equipment
Property, plant and equipment is stated at cost net of accumulated depreciation and any provision for impairment. Cost comprises
purchase cost together with any incidental costs of acquisition. Depreciation is provided to write off the cost less the estimated
residual value of the property, plant and equipment by equal instalments over their estimated useful economic lives. The asset’s
residual values and useful economic lives are reviewed, and adjusted as appropriate, at each balance sheet date. The following
rates are applied:
Freehold buildings
–
2% per annum
Short leasehold property --
10% per annum
Equipment
–
10% – 33% per annum
Freehold land is not depreciated.
Intangible Assets
Intangible assets are stated at cost less accumulated amortisation. They are recognised if it is possible that there will be future
economic benefits attributable to the asset, the cost of the asset can be measured reliably, the asset is separately identifiable and
there is control over the use of the asset. The assets are amortised over the period which the group expects to benefit from these
assets. Provision is made for any impairment in value if applicable.
IT software costs are amortised on a straight-line basis at a rate of 33% per annum.
Brand and domain names and customer lists are amortised on a straight line basis at 5% to 33%.
Goodwill
Goodwill arising on acquisitions comprises the excess of the fair value of the consideration for investments in subsidiary
undertakings over the fair value of the net identifiable assets acquired at the date of the acquisition. Goodwill arising on
acquisitions is included in intangible assets.
Goodwill is not amortised but is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and
losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of those cash-generating units
represents the lowest level within the Group at which the associated level of goodwill is monitored for management purposes and
are not larger than the operating segments determined in accordance with IFRS8 “Operating Segments”.
18
Report & Accounts 2015 | HC Slingsby plc
Notes to the Accounts continued
Impairment of non-financial assets
Assets not subject to amortisation are tested annually for impairment. Assets that are subject to amortisation are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
Non-financial assets, other than goodwill that suffered an impairment, are reviewed for possible reversal of the impairment at each
reporting date.
Investments
Investments are stated at cost, less provision for impairment where necessary.
Deferred Taxation
Deferred taxation is recognised, using the full liability method, on temporary differences arising between the tax bases of assets
and liabilities and their carrying amount in the consolidated financial statements. Deferred taxation is determined using tax rates
(and laws) that have been enacted, or substantially enacted, by the balance sheet date, and are expected to apply when the related
deferred taxation asset is realised or deferred taxation liability is settled.
Deferred taxation assets are recognised only to the extent that it is probable that future taxable profits will be available against
which the temporary differences can be utilised.
Inventories
Inventories which include raw materials and work in progress, finished goods and goods for resale are stated at the lower of cost
and net realisable value. Raw materials are valued on a first in-first out basis. The cost of work in progress and finished goods
includes an appropriate proportion of production overheads.
Net realisable value is based on estimated selling price less additional costs to completion or disposal. Allowance is made for
obsolete, defective and slow-moving items based on annual usage.
Trade and Other Receivables
Trade and other receivables are initially recognised at fair value and subsequently held at amortised cost less provision for
impairment. Provisions are made for the difference between the asset’s carrying amount and the present value of estimated future
cash flows. Subsequent recoveries of amounts previously written off are credited to the Income Statement.
Trade Catalogues
Expenditure relating to the production and distribution of the main catalogue and supplementary mailings is written off in the
financial statements in the year when the catalogue is produced.
Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, deposits held on call with banks, other short term highly liquid investments with
original maturities of three months or less, and bank overdrafts.
Trade Payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method.
Derivative Financial Instruments
Derivative financial instruments are initially recognised at fair value on the date a contract is entered into and are subsequently
remeasured at their fair value at each balance sheet date. The resulting gain or loss is recognised directly in the income statement.
The group does not apply hedge accounting in respect of its financial instruments, nor does it trade in any financial instruments.
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
Dividends
Dividends proposed by the board are recognised in the financial statements when they have been approved by shareholders.
Interim dividends are recognised when they are paid.
Current Taxation
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income
statement because it excludes items that are not taxable or deductible. The group’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the balance sheet date.
The tax expense for the year comprises current and deferred tax that is recognised in the Income Statement, except that it
relates to items recognised in other comprehensive income or directly in equity, in which case the tax is also recognised in other
comprehensive income or directly in equity respectively.
19
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc Notes to the Accounts continued
2.
Segmental Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the steering committee that makes strategic decisions.
The group only has one business segment, which is its principal activity, being the merchanting and distribution of industrial and
commercial equipment. All of the group’s revenue, (losses)/profits, assets and liabilities are wholly attributable to that business
segment. The operations of the group are based in the UK and the Republic of Ireland. The Republic of Ireland operation makes up
less than 10% of the group’s revenue and assets.
3.
Exceptional Item
Redundancy and compensation costs
Acquisition of ESE
2015
£’000
88
193
281
Costs relating to the acquisition of ESE relate to legal, accounting and advisory services together with bank facility costs.
4.
Employee Information
Staff costs for the company during year:
Wages and salaries
Social security costs
Other pension costs (note 24)
The average monthly number of persons employed by the company during the year was:
Selling and distribution
Manufacturing
Administration
5.
Directors’ Remuneration
Aggregate emoluments
Company contributions to money purchase pension scheme
Highest paid director:
Aggregate emoluments
Defined benefit scheme accrued pension at end of year
2014
£’000
193
-
193
2014
£’000
2,166
208
167
2,541
2014
Number
54
8
23
85
2015
£’000
2,771
244
167
3,182
2015
Number
82
-
30
112
2015
£’000
2014
£’000
411
19
430
130
86
503
19
522
127
85
Four directors have accrued benefits under a deferred benefit scheme (2014: four). One director accrues benefits under a defined
contribution pension scheme (2014: one).
Payments in respect of compensation for loss of office totalled £80,000 and are not included above.
20
Report & Accounts 2015 | HC Slingsby plc
Notes to the Accounts continued
6.
Operating Loss
Operating loss is stated after charging/(crediting):
Profit on disposal of property, plant and equipment
Depreciation on property, plant and equipment
Amortisation of intangible asset
Operating lease charges
– land and buildings
– other
Foreign exchange losses on operating activities
Services provided by the company’s auditors
Fees payable to the company’s auditors for the audit of parent company and consolidated financial
statements
Fees payable to the company’s auditors for other services:
Other audit services pursuant to legislation:
The audit of Company’s subsidiaries pursuant to legislation
Other services pursuant to legislation:
Tax services – Compliance
Advisory
Total fees payable to company’s auditors
7.
Finance Income
Bank interest receivable
8.
Finance Costs
Interest payable on bank borrowings
Interest payable on finance lease liabilities
Net retirement benefit obligation finance costs (note 24)
9.
Taxation
Current year
UK corporation tax:
– current year
– adjustments in respect of prior years
Deferred tax:
UK deferred tax:
– origination and reversal of timing differences
– adjustments in respect of prior years
Total taxation credit
2015
£’000
(99)
308
222
36
4
13
40
7
10
1
58
2015
£’000
1
2015
£’000
36
2
304
342
2015
£’000
-
(49)
(49)
(115)
(30)
(145)
(194)
2014
£’000
(7)
268
156
9
7
18
42
6
7
19
74
2014
£’000
7
2014
£’000
-
-
359
359
2014
£’000
-
(89)
(89)
(79)
14
(65)
(154)
21
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
9.
Taxation (continued)
Factors affecting the tax credit for the year:
The tax on the company’s loss before tax differs from the theoretical amount that would arise using the weighted average tax rate
applicable to profits of the company as follows:
Loss before taxation
Tax at the UK corporation tax rate of 20.25% (2014: 21.5%)
Expenses not deductible for tax purposes
Adjustments to tax in respect of prior years
– current year
– deferred tax
Tax credit for the year
2015
£’000
(632)
(128)
13
(49)
(30)
(194)
2014
£’000
(453)
(96)
17
(89)
14
(154)
The standard rate of tax in the UK changed from 21% to 20% with effect from 1 April 2015. Accordingly, the company’s losses for
this accounting period are taxed at an effective rate of 20.25%. Deferred tax assets and liabilities are measured at a rate of 18% as
at 31 December 2015.
A change to the UK corporation tax rate was announced on 16 March 2016. The change announced is to reduce the main rate to
17% from 1 April 2020. Changes to reduce the UK corporation tax rate to 19% from 1 April 2017 and to 18% from 1 April 2020 had
already been substantively enacted on 26 October 2015. As the change to 17% had not been substantively enacted at the balance
sheet date, its effects are not included in these financial statements.
10.
Loss Per Share
Basic loss per share is based upon a loss of £438,000 (2014: £299,000) and on 1,000,000 (2014: 1,000,000) ordinary shares in
issue during the year.
There is no difference between basic loss per share and diluted loss per share for both years as there are no potentially dilutive
shares in issue.
11.
Loss for the Financial Year
As permitted by Section 408 of the Companies Act 2006, the company has not published its own income statement. The result of
the company for the financial year was a loss of £447,000 (2014: £286,000).
12.
Dividends
Interim dividend paid for the 2014 financial year of 2.0p (2013: 2.0p)
Final dividend paid for the 2014 financial year of 4.0p (2013: 10.0p)
No dividends are proposed for the 2015 financial year as set out in the Report of the Directors.
2015
£’000
20
40
60
2014
£’000
20
100
120
22
Report & Accounts 2015 | HC Slingsby plc Notes to the Accounts continued
13.
Property, Plant and Equipment
Group
Cost
1 January 2014
Additions
Disposals
1 January 2015
Additions
Acquisition of subsidiary (note 28)
Disposals
31 December 2015
Accumulated depreciation
1 January 2014
Charge for the year
Disposals
1 January 2015
Acquisition of subsidiary
Charge for the year
Disposals
31 December 2015
Net book amount
At 31 December 2015
At 31 December 2014
At 31 December 2013
Short
Leasehold
Freehold land
Property
and buildings
Equipment
£’000
£’000
£’000
Total
£’000
8,894
107
(107)
8,894
198
427
(330)
9,189
2,300
36
(107)
2,229
193
313
(330)
2,405
1,955
2,763
163
(89)
268
(89)
2,029
2,942
131
196
(317)
2,039
366
200
345
154
308
(317)
3,087
6,102
5,952
6,131
-
-
-
-
5
114
-
119
-
-
-
23
7
-
30
89
-
-
6,594
71
-
6,665
-
-
-
6,665
808
105
–
913
-
105
-
1,018
5,647
5,752
5,786
HC Slingsby PLC Retirement Benefits Scheme holds a charge over the company’s freehold land and buildings. HSBC Bank plc
holds charges over all of the assets and undertakings of the Group.
Equipment includes the following amounts where the group is lessee under finance leases:
Cost of assets subject to finance leases
Accumulated depreciation
2015
£’000
144
(20)
124
2014
£’000
-
-
-
The group leases various motor vehicles under non-cancellable finance lease agreements. The assets are leased on a term of 3
years.
23
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
13.
Property, Plant and Equipment (continued)
Company
Cost
1 January 2014
Additions
Disposals
1 January 2015
Additions
Disposals
31 December 2015
Accumulated depreciation
1 January 2014
Charge for the year
Disposals
1 January 2015
Charge for the year
Disposals
31 December 2015
Net book amount
At 31 December 2015
At 31 December 2014
At 31 December 2013
Depreciation is charged to administrative expenses in the Income Statement.
Freehold land
and buildings
Equipment
£’000
£’000
6,594
71
–
6,665
--
–
6,665
808
105
–
913
105
–
1,018
5,647
5,752
5,786
2,300
36
(107)
2,229
174
(330)
2,073
1,955
163
(89)
2,029
131
(317)
1,843
230
200
345
Total
£’000
8,894
107
(107)
8,894
174
(330)
8,738
2,763
268
(89)
2,942
236
(317)
2,861
5,877
5,952
6,131
24
Report & Accounts 2015 | HC Slingsby plc Notes to the Accounts continued
14.
Intangible Assets
Cost
1 January 2014
Additions
Disposals
1 January 2015
Additions – Acquisition of subsidiary (note 28)
31 December 2015
Accumulated amortisation
1 January 2014
Charge for the year
Disposals
1 January 2015
Charge for the year
Acquisition of subsidiary (note 28)
Disposals
31 December 2015
Net book amount
At 31 December 2015
At 31 December 2014
At 31 December 2013
Group
Group
Company
Brand and
Domain
Names and
Customer
Lists
IT Software
and
trademarks
Goodwill
TOTAL
IT Software
£’000
£’000
£’000
£’000
£’000
--
--
--
--
--
--
--
--
2,409
2,409
1,000
1,000
--
--
--
--
--
--
--
--
2,409
--
--
--
--
--
--
75
--
--
75
925
--
--
776
35
(36)
775
30
805
182
156
(36)
302
147
2
--
451
354
473
594
776
35
(36)
775
1,030
1,805
182
156
(36)
302
222
2
--
526
1,279
473
594
Amortisation is charged to administrative expenses in the Income Statement.
Goodwill relates to the ESE Direct Limited cash generating unit (see note 28).
776
35
(36)
775
25
800
182
156
(36)
302
146
-
--
448
352
473
594
25
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
15.
Investment in Subsidiary
Wholly owned subsidiary, Slingsby Mail Order Limited, is incorporated in the Republic of Ireland. The results are fully consolidated
in the group financial statements. Its principal activity is the merchanting of materials handling and distribution equipment. The
company owns 100% of its €1 ordinary share capital. The carrying value of this investment is considered impaired and has been
fully provided against.
On 27 March 2015 the Company acquired 100% of the issued share capital of ESE Direct Limited. The cost and carrying value of
this investment is £4m which the Directors believe is supported by the underlying net assets and their future cash generation.
The Company directly owns 100% of the issued share capital of the following subsidiary undertakings, registered in England and
Wales except for Slingsby Mail Order Limited which is registered in the Republic of Ireland.
Company
Slingsby Mail Order Limited
ESE Direct Limited
Eastern Storage Limited
ESE Projects Limited
Eastern Storage Equipment Limited
Slingsby Trading Post Limited
Slingsby Manufacturing Limited
Slingsby Metro Equipment Limited
16.
Deferred Tax
Business Activity
Distribution of Industrial and Commercial Equipment
Distribution of Industrial and Commercial Equipment
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
The deferred tax balances in these financial statements are attributable to the following:
Deferred tax asset
Pension liability
Deferred tax liabilities
Short term timing differences
Rolled over capital gain
Group
Company
2015
£’000
2014
£’000
2015
£’000
2014
£’000
1,446
1,694
1,446
1,694
(291)
(167)
(458)
(418)
(185)
(603)
(276)
(167)
(443)
(424)
(185)
(609)
The deferred tax asset relates to the deficit on the company’s defined benefit pension scheme. The company is making payments
into this scheme to reduce the deficit and the corresponding asset will reduce in line with these reductions. As movements in the
pension deficit arise from changes in actuarial assumptions as well as from deficit reduction payments (see note 24), it is difficult to
forecast the movement in the related deferred tax asset.
Movements in deferred tax assets/(liabilities) are as follows:
Pension
liability
£’000
1,614
(36)
116
1,694
-
(35)
(213)
1,446
Short term
timing
Rolled over
differences
capital gain
£’000
(519)
101
–
(418)
(35)
162
–
(291)
£’000
(185)
--
–
(185)
-
18
–
(167)
Total
£’000
910
65
116
1,091
(35)
145
(213)
988
Group
1 January 2014
(Charged)/credited to income statement
Credited to equity
1 January 2015 – Group and Company
Acquired on acquisition (note 28)
(Charged)/credited to income statement
Charged to equity
31 December 2015
26
Report & Accounts 2015 | HC Slingsby plc Notes to the Accounts continued
16.
Deferred Tax (continued)
Company
1 January 2014
(Charged)/credited to income statement
Credited to equity
1 January 2015
(Charged)/credited to income statement
Charged to equity
31 December 2015
Pension
liability
£’000
1,614
(36)
116
1,694
(35)
(213)
1,446
Short term
timing
Rolled over
differences
capital gain
£’000
(519)
95
–
(424)
148
–
(276)
£’000
(185)
--
–
(185)
18
–
(167)
Total
£’000
910
59
116
1,085
131
(213)
1,003
17.
Inventories
Group
Company
Raw materials and work in progress
Finished goods and goods for resale
2015
£’000
215
1,563
1,778
2014
£’000
198
1,753
1,951
2015
£’000
168
1,563
1,731
2014
£’000
198
1,753
1,951
Inventories are presented net of provisions for write-downs, based on management’s estimate of net realisable value. The amount
(credited)/charged to the income statement in respect of write-downs of inventories was (£24,000), (2014: £11,000). The cost
of inventories recognised as an expense and included in the group’s cost of sales was £10,561,000 (2014: £7,159,000) and
£6,802,000 (2014: £6,790,000) for the company. The provision for obsolete stock at the year end is £387,000 (2014: £411,000).
18.
Trade and Other Receivables
Trade receivables
Receivables from subsidiary
Prepayments
Group
2015
£’000
2,013
–
327
2,340
2014
£’000
1,626
–
214
1,840
Company
2015
2014
£’000
£’000
1,642
13
221
1,876
1,590
43
211
1,844
Trade and other receivables are non-interest bearing. There is no material difference between the carrying amount and the fair
value of trade and other receivables.
Trade receivables are presented net of provision for doubtful trade receivables. Provisions are estimated by management based on
past default experience and other factors as considered appropriate. The credit quality of financial assets that are neither past due
nor impaired can be assessed by reference to external credit ratings or to historical information about counterparty default rates.
Movements on the group and company provisions for impairment of trade receivables are:
At 1 January 2015
Provision made for impaired receivables
Unused provision reversed
Receivables written off during the year as uncollectable
At 31 December 2015
Group
2015
£’000
16
19
(10)
(7)
18
2014
£’000
18
19
(9)
(12)
16
Company
2015
£’000
16
19
(10)
(7)
18
2014
£’000
18
19
(9)
(12)
16
Receivables due from subsidiary were not impaired at 31 December 2015 and 31 December 2014.
27
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc Notes to the Accounts continued
18.
Trade and Other Receivables (continued)
At 31 December 2015 group trade receivables of £18,000 (2014: £16,000) and company trade receivables of £18,000 (2014:
£16,000) were impaired. The amount of provision is the full gross amount due. The receivables are considered to be impaired
as they have either been disputed by the respective customers or the customers are in financial difficulty. The ageing of these
receivables is as follows:
Up to three months over terms
Over three months over terms
Group
Company
2015
£’000
-
18
18
2014
£’000
2
14
16
2015
£’000
-
18
18
2014
£’000
2
14
16
At 31 December 2015 group trade receivables of £866,000 (2014: £768,000) and company trade receivables of £835,000 (2014:
£750,000) were past due but not impaired. Overdue receivables against which no provision has been made relate to customers
for whom there is no recent history of default or any other indication that settlement will not be forthcoming. The ageing of these
receivables is as follows:
Up to three months over terms
Over three months over terms
Group
Company
2015
£’000
840
26
866
2014
£’000
734
34
768
2015
£’000
724
26
750
2014
£’000
716
34
750
Receivables that are neither past due nor impaired are within credit limits for the respective customer and the directors are not
aware of any reasons that indicate the amounts due are disputed or not collectable. The maximum exposure to credit risk at the
reporting date is the fair value of each class of receivable shown above. The group does not hold any collateral as security.
The carrying amounts of the group’s and company’s receivables are denominated in the following currencies:
Pound sterling
Euro
19.
Trade and Other Payables
Trade payables
Payables to subsidiary
Other taxation and social security payable
Other payables
Accruals
Debt financing and overdraft
Group
Company
2015
£’000
2,278
62
2,340
2014
£’000
1,801
39
1,840
2015
£’000
1,876
–
1,876
2014
£’000
1,844
–
1,844
Group
Company
2015
£’000
2,248
-
338
12
370
1,685
4,653
2014
£’000
1,670
-
230
12
171
-
2,083
2015
£’000
1,768
822
236
12
167
1,685
4,690
2014
£’000
1,664
-
219
12
164
-
2,059
Trade and other payables are non-interest bearing. There is no material difference between the carrying amount and the fair value
of trade and other payables.
The Group’s debtor finance and overdraft facilities (provided by HSBC Bank plc) carry interest rates of 2.1% and 2.55%-4% above
the prevailing Bank of England Base Rate respectively. The Group’s overdraft facility is due for renewal on 18 December 2016.
The Group debtor finance facility is a total of £3m and the overdraft facility is the sum of £750,000.
28
Report & Accounts 2015 | HC Slingsby plc Notes to the Accounts continued
20.
Derivative Financial Instruments
Forward foreign currency contracts and options
Assets
Liabilities
2015
£’000
11
2014
£’000
4
2015
£’000
–
2014
£’000
--
Gains and losses on the carrying value of forward foreign currency contract assets and liabilities are recognised in the income
statement. The forward foreign currency contracts existing at the year end mature in 2015. They have been valued using year end
market data.
21. Borrowings
Finance Leases
The future minimum finance lease payments are as follows:
Not later than one year
Later than one year and not later than five years
Total gross payments
Impact of finance charges
Carrying value of liability
Group
Company
2015
£’000
48
73
121
(11)
110
2014
£’000
-
-
-
-
-
2015
£’000
48
73
121
(11)
110
2014
£’000
-
-
-
-
-
The finance lease liabilities relate to motor vehicles leased on a term of 3 years.
22.
Financial Risk Management
In the normal course of business the group and company is exposed to certain financial risks, principally foreign exchange risk,
interest rate risk, liquidity risk and credit risk.
Foreign Exchange Risk
The group and company enters into forward foreign currency contracts to eliminate certain currency exposures that arise on
purchase contracts denominated in foreign currencies.
Interest Rate Risk
The group’s and company’s exposure to interest rate risk arises on its debtor finance and overdraft facilities. These are based on
floating rates of interest. Accordingly should interest rates increase, the group and company’s interest cost would rise. The group
does not use interest rate hedges.
Liquidity Risk
In the normal course of business the group and company is exposed to liquidity risk. The objective is to ensure that sufficient
resources are available to fund short term working capital and longer term strategic requirements. This is achieved through
ensuring that the group has sufficient cash and borrowing facilities in place.
Credit Risk
Credit risk principally arises on cash deposits and trade receivables. The credit risk arising on cash deposits is limited because
the counterparties are financial institutions with high credit ratings assigned by international credit rating agencies. The credit risk
arising on trade receivables is spread over large numbers of customers. There are no significant concentrations of credit risk.
Sensitivity Analysis
There is not expected to be a material impact on reported results and the balance sheet relating to the above risks.
23.
Capital Risk Management
The capital structure of the group consists of cash, equity, debtor finance and overdraft. The group’s objectives when managing
capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits
for other stakeholders and to maintain an optimal capital structure to reduce the cost capital. In order to maintain the capital
structure the group may adjust the amount of dividends paid to shareholders. This situation is monitored using budgets and by
calculation of a gearing ratio (debtor financing and overdraft less cash/net assets). At 31 December 2015, the gearing ratio was
65% (2014: nil).
29
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc Notes to the Accounts continued
24.
Pension Commitments
Group and Company
Retirement Benefit Obligations
At 31 December 2015 H C Slingsby plc (“the Company”) operated pension schemes for the benefit of its employees. The schemes
are provided through both defined benefit and defined contribution arrangements. This disclosure is concerned only with the
defined benefit arrangement, the H C Slingsby plc Retirement Benefits Scheme (“the Scheme”). The liability associated with the
Scheme is material to the Company.
The Company’s objective is for the Scheme to target 100% funding on a basis that should ensure that benefits can be paid as they
fall due.
Any shortfall in the assets directly held by the Scheme, relative to its funding target, will be financed over a period that ensures
the contributions are reasonably affordable to the Company. The expected contribution to the Scheme over the 2016 fiscal year is
£540,000 (plus administration and other expenses).The defined benefit scheme was closed to new entrants in 2006 and to future
accrual in 2009.
Nature of Scheme
The Scheme targets a pension paid throughout life. The amount of pension depends on how long employees are active members
of the scheme and their salary when they leave the scheme (a ‘‘final salary’’ plan). The pension receives inflation-linked increases
in the years before retirement. Once in payment, pensions either do not increase or increase in line with inflation or a fixed rate.
The Scheme was closed to future accrual in 2009.
It is governed by a Board of Trustees (the “Trustee Board”) that has control over its operation, funding and investment strategy.
The Trustee Board is chaired by an independent representative Richard Sacre and composed of nominees of elected Scheme
members. The Trustee Board will consult with the Company on certain matters.
Funding the liabilities
UK legislation requires the Trustee Board to carry out valuations at least every three years and to target full funding against a
basis that prudently reflects the Scheme’s risk exposure. The most recent valuation was carried out as at 1 January 2014 and a
shortfall of £7.5m against the Trustee Board’s funding objective was identified. The Company agreed to pay annual contributions of
£540,000 (£500,000 in 2015) to remove the shortfall over 14 years.
The weighted average duration of the defined benefit obligation is 19.1 years.
Investment strategy
Approximately 50% of the Scheme’s assets are held in equity type assets, and 50% are held in long term fixed interest and inflation
linked securities. Included within the fair value of the Scheme assets are 30,061 of the company’s shares, with a fair value of
£64,000 as at 31 December 2015.
The Scheme’s liabilities are calculated using a discount rate set with reference to corporate bond yields; if Scheme assets
underperform this yield, this will increase the deficit. The Scheme holds a significant proportion of equities, which are expected
to outperform corporate bonds in the long term while providing volatility and risk in the short term. As the Scheme matures, the
expectation is that the Trustee Board would reduce the level of investment risk by investing more in assets that better match the
liabilities. In essence this would see a gradual sale of equities and the purchase of gilts and corporate bonds. The company is of
the view that, due to the long term nature of the Scheme’s liabilities, it is appropriate to continue with a degree of equity investment
so as to manage the Scheme’s long term liabilities efficiently.
The Trustee Board has derived its investment strategy, in consultation with the company, so as to reflect the Scheme’s long term
liabilities. At the current time approximately 50% of the Scheme’s assets are invested in long term fixed interest and inflation linked
securities of a duration that broadly matches the duration of benefit payments. The balance is invested in a diversified portfolio of
global equity type assets. Both the Trustee Board and the company believe that equities offer the best returns over the long term
with an acceptable level of risk. The Scheme’s investments are well diversified, such that the failure of any single investment would
not have a material impact on the overall level of assets.
It should be noted that the Trustee Board has sole responsibility for setting the investment strategy for the Scheme, albeit the
company is consulted over any change to investment strategy. The processes used to manage risks within the Scheme have not
changed from previous periods. Derivatives are not used to manage risks within the Scheme.
Other risks
Actions taken by the local regulator, or changes to European legislation, could result in stronger local funding standards, which
could materially affect the company’s cash flow.
There is a risk that changes in the assumptions for discount rate, price inflation or life expectancy could result in an increase in the
deficit in the Scheme. Other assumptions used to value the defined benefit obligation are also uncertain, although their effect is less
material.
30
Report & Accounts 2015 | HC Slingsby plc Notes to the Accounts continued
24.
Pension Commitments (continued)
Winding up
Although currently there are no plans to do so, with the company’s approval, the Trustees could choose to wind up the Scheme
in which case the benefits would have to be bought out with an insurance company. The cost of buying-out benefits would be
significantly more than the defined benefit obligation calculated in accordance with IAS 19 (revised).
The measurement of the company’s net defined benefit liability is particularly sensitive to changes in certain key assumptions,
which are:
Discount rate
Inflation
Mortality rates
This has been selected following actuarial advice received, taking into account the duration of the
liabilities. An increase or decrease in the discount rate of 0.25% would result in a decrease or increase
of approximately £1m in the present value of the defined benefit obligation.
The methodology used to derive the assumption adopted is consistent with discount rate methodology.
An increase or decrease in the inflation rate of 0.25% would result in an increase or decrease of
approximately £0.9m in the present value of the defined benefit obligation.
The mortality assumptions adopted are based on actuarial advice received and reflect the most recent
information as appropriate. The assumptions used indicate that the future life expectancy of a male
(female) pensioner reaching age 65 in 2015 would be 22 (24.4) years and the future life expectancy
from age 65 for a male (female) non-pensioner member currently aged 45 of 23.8 (26.3) years.
The increase or decrease in the present value of the defined benefit obligation due to a member living
one year longer, or one year less, would be approximately £0.7m.
The methods used to carry out the sensitivity analyses presented above for the material assumptions are the same as those the
company has used previously. The calculations alter the relevant assumption by the amount specified, whilst assuming that all
other variables remained the same. This approach is not necessarily realistic, since some assumptions are related: for example,
if the scenario is to show the effect if inflation is higher than expected, it might be reasonable to expect that nominal yields on
corporate bonds will increase also. However, it enables the reader to isolate one effect from another.
Year ended 31 December 2015
The company’s policy is to recognise actuarial gains and losses immediately in full each year. The company operates a scheme in
the UK with a final salary section. A full actuarial valuation was carried out as at 1 January 2014 and updated to 31 December 2015
by a qualified independent actuary.
Reconciliation of the present value of the defined benefit obligation
Present value of defined benefit obligation at beginning of year
Interest cost
Effect of changes in financial assumptions
Benefits paid
Present value of defined benefit obligation at end of year
Reconciliation of fair value of scheme assets
Fair value of scheme assets at start of year
Interest income
Return on scheme assets
Contributions by the Company
Benefits paid
Fair value of scheme assets at end of year
2015
£’000
22,397
817
(582)
(639)
21,993
2015
£’000
13,926
513
(340)
500
(639)
13,960
2014
£’000
20,649
935
1,455
(642)
22,397
2014
£’000
12,580
576
872
540
(642)
13,926
31
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
2015
£’000
2014
£’000
21,993
(13,960)
8,033
22,397
(13,926)
8,471
Notes to the Accounts continued
24.
Pension Commitments (continued)
Amounts to be recognised in the balance sheet
Present value of funded obligation
Fair value of scheme assets
Net liability in balance sheet
Amounts to be recognised in the income statement
Interest on obligation
Interest income on scheme assets
Total expense
Total amount recognised in the statement of consolidated income SOCI
Actuarial (gain)/loss
Actuarial (gain)/loss recognised in SOCI
Pension cost
Defined benefit scheme
Defined contribution scheme
Scheme assets
Equities
Gilts and bonds
Total scheme assets
Expected rate of return on scheme assets
2015
£’000
817
(513)
304
2015
£’000
(242)
(242)
2015
£’000
316
155
471
2014
%
57
43
100
2015
%
50
50
100
2015
£’000
7,045
6,915
13,960
3.9%
At 31 December 2015 the scheme assets were invested in a diversified portfolio that consisted primarily of equity and debt
securities. The fair value of the scheme as a percentage of total scheme assets and target allocations is set out above.
Amount of Company related investments included in fair value of assets
Company’s own financial instruments
2015
£’000
64
32
2014
£’000
935
(576)
359
2014
£’000
583
583
2014
£’000
378
148
526
2014
£’000
7,993
5,933
13,926
3.7%
2014
£’000
120
Report & Accounts 2015 | HC Slingsby plc
Notes to the Accounts continued
24.
Pension Commitments (continued)
Principal actuarial assumptions at the Balance Sheet date:
The assumptions as at the reporting date are used to determine the present value of the benefit obligation at that date. The key
financial assumptions are set out below:
Discount rate
Long term rate of return on assets
RPI Inflation
CPI Inflation
Pension increases:
Non-Executive pension accrued before 1 January 1992 (0% fixed)
Non-Executive pension accrued after 1 January 1992 (RPI max 5%)
Executive pension accrued before 1 January 1992 (4% fixed)
Executive pension accrued after 1 January 1992 (RPI min 4%, 5% max)
Pre and post retirement mortality
Retiring today:
Males
Females
Retiring in 20 years
Males
Females
Cash commutation
2015
3.90%
3.90%
3.10%
2.10%
0.00%
3.10%
4.00%
4.20%
87.0
89.4
88.8
91.3
2014
3.70%
3.70%
3.10%
2.10%
0.00%
3.00%
4.00%
4.20%
86.9
89.3
88.7
91.2
25% of pension at
age 65 at a rate of 13.0:1
25% of pension at
age 65 at a rate of 12.5:1
Mortality Assumption; Base mortality table
– Males – standard table SINMA (appropriate to the members’ years of birth)
– Females – standard table SINFA (appropriate to the members’ years of birth)
A scaling factor of 105% has been applied to the notes under the standard tables. An allowance for future improvements has been
made in line with the CMI 2013 Core Regulations assuming a long term annual note of improvement in mortality rates of 1.25% for
men and women.
Defined Contribution Scheme
The company commenced the operation of a defined contribution scheme on 1 October 2006. Contributions payable by the
company to the defined contribution scheme of £148,000 (2014: £148,000) have been charged to operating profit. ESE Direct
Limited also provided a defined contribution scheme in respect of certain employees. Contributions payable to that scheme from 1
April 2015 to 31 December 2015 totalled £7,000 and have been charged to operating profit.
25.
Share Capital
Ordinary shares of 25p
Authorised
At 1 January and 31 December
Allotted, called up and fully paid
At 1 January and 31 December
2015
Number
1,200,000
1,000,000
2015
£’000
300
250
2014
Number
2014
£’000
1,200,000
1,000,000
300
250
33
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
26. Operating Lease Commitments
At 31 December 2015, the group had the following outstanding future aggregate minimum lease payments under non-cancellable
operating leases as follows:
Operating leases commitments:
– within one year
– in more than one year but less than five years
– more than 5 years
Operating lease charges recognised in the income statement as shown in note 6.
2015
£’000
51
148
72
2014
£’000
16
–
-
27.
Related Party Transactions
Key Management
Key management personnel comprise the group’s executive directors. Their remuneration is set out in note 5. Included within
directors’ remuneration is the amount of £30,345 to Morris and Daughters Limited for the services of Morgan Morris who is a
director and shareholder in that company. At 31 December 2015, £1,995 was outstanding.
There were no other transactions with key management.
Company – Transactions With Subsidiaries
Sales amounting to £394,000 (2014: £369,000) were made by HC Slingsby plc to Slingsby Mail Order Limited.
Amounts due to Slingsby Mail Order Limited at 31 December 2015 were £122,000 (2014: £nil).
Amounts due from Slingsby Mail Order Limited at 31 December 2015 were £0 (2014: £43,000).
Sales amounting to £78,268 were made by HC Slingsby plc to ESE Direct Limited.
Purchases amounting to £13,654 were made to HC Slingsby plc by ESE Direct Limited.
Amounts due to ESE Direct Limited were £nil in respect of trading activities and £701,000 in respect of an inter-company loan.
Amounts due from ESE Direct Limited were £13,054.
28.
Business Combination
On 27 March 2015, the Company purchased 100% of the share capital of ESE Direct Limited. Consideration was £4m on condition
that ESE had £600,000 of cash surplus to its working capital requirements.
ESE is a profitable company operating in the same sector. The acquisition presents the group with the opportunity to diversify its
brand portfolio and achieve economies of scale, particularly in the combined businesses’ supply chain.
Total Consideration
Cash paid by Group
Deferred payment due 31 January 2016
£’000
3,971
30
4,001
34
Report & Accounts 2015 | HC Slingsby plc Notes to the Accounts continued
28.
Business Combination (continued)
The assets and liabilities recognised as a result of the acquisition are as follows:
Book and Fair Value
Short leasehold property
Equipment
Trademarks
Stock
Trade receivables
Other receivables
Cash
Trade payables
Other payables
Corporation Tax
Deferred Tax
Intangible Assets: Brand
Intangible Assets: Domain names, Website and Customer List
Net Identifiable Assets
Add: Goodwill
Total Consideration
£’000
91
182
2
60
356
879
386
(662)
(624)
(43)
(35)
250
750
1,592
2,409
4,001
The goodwill is attributable to the profitablity of the acquired business. It will not be deductable for tax purposes.
Revenue and profit contribution
The acquired business contributed revenue of £4.8m and a profit before tax of £134,000 before management charges (£89,000
after management charges) to the group for the period from 1 April 2015 to 31 December 2015.
If the business had been acquired for the full year, it would have contributed revenue of £6.6m and a profit before tax of £102,000
before management charges (£56,000 after management charges).
Costs relating to the acquisition have been charged to exceptional items in the consolidated income statement for the year ended
31 December 2015.
Purchase consideration – cash outflow
Cash paid by the Group
Cash balances in ESE on completion (excluding surplus cash)
Goodwill monitoring
£’000
(3,971)
386
(3,585)
Goodwill is monitored by management at the Cash Generating Unit (“CGU”) level. A CGU is consdiered to be an individual
company. The goodwill recognised on the acquisition of ESE Direct Limited has been tested for impairment using the following
assumptions:
-
-
-
Budgets for the next 5 years
Extrapolation of expected future cash flows using a terminal growth rate of 2%
Sales growth of between 4 and 7 %
- Capital expenditure of between £150,000 and £50,000 per annum
- Gross margins projected based on recent trends
-
Pre-tax discount rate of 15%
On the above basis, the directors consider that there are no reasonably possible changes to a key assumption which would give
rise to an impairment charge.
29. Subsequent Events
After the balance sheet date, the company entered into a new overdraft finace facility with HSBC Bank plc totalling £750,000.
Under the terms of this facility, the company is to grant HSBC Bank plc a fixed charge over its freehold property.
35
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc Five Year Summary
Income Statement
Turnover
Gross profit
Operating (loss)/profit before exceptional item
Exceptional item
(Loss)/profit before tax
(Loss)/profit for the financial year
(Loss)/earnings per share – basic and diluted
Dividend Per Ordinary Share*:
– Interim
– Final
2015
£’000
17,061
6,249
(10)
(281)
(632)
(438)
(43.8p)
2014
£’000
12,587
5,038
92
(193)
(453)
(299)
(29.9p)
2013
£’000
13,965
5,502
137
--
(249)
(95)
(9.5p)
2012
£’000
14,588
6,155
489
129
102
172
17.2p
2011
£’000
15,221
6,779
633
–
422
320
32.0p
0.0p
0.0p
2.0p
4.0p
2.0p
10.0p
4.0p
15.0p
4.0p
28.0p
Cash Flow Statement
Cash (used in)/generated by operating activities
171
(169)
166
1,041
(81)
Balance Sheet
Net current (liabilities)/assets
Net assets
Cash and cash equivalents
(376)
2,303
192
3,740
2,785
1,940
4,122
3,688
2,325
4,808
2,949
2,836
5,147
4,397
2,439
* Dividends per ordinary share are stated in respect of the years to which they relate. This is not the same as the years in which
they are recognised in the financial statements.
36
Report & Accounts 2015 | HC Slingsby plc Notice of Annual General Meeting
Notice is given that the sixty-eighth Annual General Meeting of H C Slingsby plc (“the Company”) will be held at the Marriot
Hollins Hall Hotel & Country Club, Hollins Hill, Baildon, Shipley, West Yorkshire BD17 7QW on 30 June 2016 at 10am for the following
purposes:
To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:
1.
2.
3.
4.
5.
6.
7.
To receive the Company’s annual accounts for the financial year ended 31 December 2015 together with the directors’
report and auditor’s report on those accounts.
To elect as a Director, Morgan Morris, who was appointed to the Board on 13 February 2015.
To re-elect as a Director, John Waterhouse who retires from the Board in accordance with the Company’s articles of associa-
tion.
To re-elect as a Director, Dominic Slingsby who retires from the Board in accordance with the Company’s articles of associa-
tion.
To reappoint PricewaterhouseCoopers LLP as auditors of the Company.
To authorise the Directors of the Company to determine the remuneration of the auditors.
In substitution for any equivalent authorities and powers granted to the Directors prior to the passing of this Resolution, to
authorise the Directors of the Company pursuant to section 551 of the Companies Act 2006 (the “Act”) to exercise all pow-
ers of the Company to allot equity securities (as defined in section 560 of the Act):
7.1
7.2
up to an aggregate nominal amount of £25,000; and
comprising equity securities up to a nominal amount of £125,000 (including within such limit any equity securities
issued under paragraph 7.1 above) in connection with an offer by way of a rights issue:
(a)
(b)
to holders of ordinary shares of 25 pence each in the capital of the Company (“Ordinary Shares”) in propor-
tion (as nearly as may be practicable) to their existing holdings; and
to holders of other equity securities as required by the rights of those securities or as the directors otherwise
consider necessary,
and so that the directors may impose any limits or restrictions and make any arrangements which they consider necessary
or appropriate to deal with any treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems
in, or under the laws of, any territory or any matter.
The authority granted by this Resolution shall (unless previously revoked, varied or extended by the Company in general
meeting) expire on the conclusion of the next Annual General Meeting of the Company after the passing of this resolution
or, if earlier, on the date falling 15 months from the date of the passing of this Resolution, save that the Company may at
any time before such expiry make an offer or agreement which would or might require equity securities to be allotted after
such expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if this authority had
not expired.
To consider and, if thought fit, to pass the following resolution as a special resolution:
8.
Subject to the passing of resolution 7, to empower the Directors to allot equity securities (as defined in section 560 of the
Act) of the Company for cash under the authority given by resolution 7 and/or where the allotment is treated as an allotment
of equity securities under section 560(2)(b) of the Act, in either case as if section 561(1) of the Act did not apply to such al-
lotment provided that such power shall be limited:
8.1
to the allotment of equity securities in connection with an offer of equity securities (but in the case of the authority
granted under paragraph 7.2 of resolution 7, by way of a rights issue only):
(a)
(b)
to the holders of the Ordinary Shares in the capital of the Company in proportion as nearly as practicable to
their respective holdings of such shares;
to holders of other equity securities as required by the rights of those securities or as the directors otherwise
consider necessary,
and so that the directors may impose any limits or restrictions and make any arrangements as the directors may
otherwise consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, or
legal, regulatory or practical problems in, or under the laws of, any territory or any other matter; and
8.2
in the case of the authority granted under paragraph 7.1 of resolution 7 and/or in the case of any transfer of trea-
sury shares which is treated as an allotment of equity securities under section 560(2)(b) of the Act, to the allotment
otherwise than pursuant to paragraph 8.1 above, of equity securities up to an aggregate nominal value equal to
£25,000;
37
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
Notice of Annual General Meeting cont
provided that such power shall (unless previously renewed, varied or revoked by the Company in general meeting) expire on
the conclusion of the next Annual General Meeting of the Company after the passing of this Resolution or, if earlier, on the
date falling 15 months from the date of the passing of this Resolution, save that the Company may before such expiry make
an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may
allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.
By order of the board
...……..................................
M.L. Morris
Company Secretary
25 May 2016
Registered office
H C Slingsby plc
Otley Road
Baildon
Shipley
BD17 7LW
Registered in England and Wales No. 00452716
38
Report & Accounts 2015 | HC Slingsby plc Notes
Entitlement to attend and vote
1
Proxies
2
3
The right to vote at the meeting is determined by reference to the register of members. Only those shareholders registered in the register
of members of the Company as at 6.00pm on 28 June 2016 (or, if the meeting is adjourned, 6.00pm on the date which is two
working days before the date of the adjourned meeting) shall be entitled to attend and vote at the meeting in respect of the number of
shares registered in their name at that time. Changes to entries in the register of members after that time shall be disregarded in deter
mining the rights of any person to attend or vote (and the number of votes they may cast) at the meeting.
A shareholder is entitled to appoint another person as his or her proxy to exercise all or any of his or her rights to attend and to speak and
vote at the meeting. A proxy need not be a shareholder of the Company.
1. A shareholder may appoint more than one proxy in relation to the meeting, provided that each proxy is appointed to exercise the rights
attached to a different share or shares held by that shareholder. Failure to specify the number of shares each proxy appointment relates
to or specifying a number which when taken together with the numbers of shares set out in the other proxy appointments is in excess of
the number of shares held by the shareholder may result in the proxy appointment being invalid.
2. A proxy may only be appointed in accordance with the procedures set out in note 3 below and the notes to the proxy form.
The appointment of a proxy will not preclude a shareholder from attending and voting in person at the meeting.
A form of proxy is enclosed. When appointing more than one proxy, complete a separate proxy form in relation to each appointment.
Additional proxy forms may be obtained by contacting the Company’s registrar or the proxy form may be photocopied. State clearly on
each proxy form the number of shares in relation to which the proxy is appointed.
To be valid, a proxy form must be received by post or (during normal business hours only) by hand at the offices of the Company’s
registrar, Capita Asset Services at PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU no later than 10am on 28 June 2016 (or, if the
meeting is adjourned, no later than 48 hours before the time of any adjourned meeting).
Corporate Representatives
4
A shareholder which is a corporation may authorise one or more persons to act as its representative(s) at the meeting. Each such
representative may exercise (on behalf of the corporation) the same powers as the corporation could exercise if it were an individual
shareholder, provided that (where there is more than one representative and the vote is otherwise than on a show of hands) they do not
do so in relation to the same shares.
Joint Holders
5.
In the case of joint holders of shares, the vote of the first named in the register of members who tenders a vote, whether in person or by
proxy, shall be accepted to the exclusion of the votes of other joint holders.
Total voting rights
6.
As at 24 May 2016 (being the latest practicable date prior to publication of this Notice, the Company’s issued share capital consists of
1,000,000 Ordinary Shares, carrying one vote each. No Ordinary Shares are held by the Company in treasury. Therefore, the total voting
rights in the Company as at 25 May 2016 are 1,000,000.
Explanatory Notes to Resolutions 2, 7 and 8
Resolution 2 - Election of Morgan Morris
Morgan Morris was appointed as a director of the Company by the Board on 13 February 2015. He is being put up for election at this year’s Annual
General Meeting as he was not formally appointed by shareholders at last year’s Annual General Meeting.
Resolution 7 – Authority to Allot Shares
Paragraph 7.1 of this Resolution would give the directors the authority to allot Ordinary Shares or grant rights to subscribe for or convert any securities
into Ordinary Shares up to an aggregate nominal amount of £25,000 (representing 100,000 Ordinary Shares). This amount represents approximately
10% of the issued ordinary share capital of the Company as at 25 May 2016, being the latest practicable date prior to publication of this Notice of
Annual General Meeting (the «Latest Practicable Date»).
In accordance with the latest guidance issued by the Association of British Insurers, paragraph 7.2 of this Resolution would give the Board
authority to allot Ordinary Shares or grant rights to subscribe for or convert any securities into Ordinary Shares in connection with a rights issue,
to existing shareholders in proportion (as nearly as may be practicable) to their existing holdings, up to an aggregate nominal amount of £125,000
(representing 500,000 Ordinary Shares), as reduced by the nominal amount of any shares issued under paragraph 7.1 of this resolution. This
amount (before any reduction) represents approximately 50% of the issued ordinary share capital of the Company as at the Latest Practicable Date.
The authority and power pursuant to Resolution 7 will expire on the later of 15 months from the date it is passed or the conclusion of the Company’s
next Annual General Meeting.
The Board will continue to seek to renew these authorities at each Annual General Meeting in accordance with current best practice. The Board has
no present intention to exercise these authorities.
Resolution 8 - Disapplication of Pre-emption Rights
This Resolution would give the Board the authority to allot Ordinary Shares for cash without first offering them to existing shareholders in proportion
to their existing shareholdings.
This authority would be limited to an aggregate nominal amount of £25,000 (representing 100,000 Ordinary Shares). This aggregate nominal amount
represents 10% of the issued Ordinary Share capital of the Company as at the Latest Practicable Date.
The authority and power pursuant to Resolution 8 will expire on the later of 15 months from the date Resolution 8 is passed or the conclusion of the
Company›s next Annual General Meeting.
The Board has no present intention to exercise these authorities.
39
Report & Accounts 2015 | HC Slingsby plcReport & Accounts 2015 | HC Slingsby plcHC Slingsby plc
HC Slingsby plc
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F:
W:
E:
01274 535 030
01274535035
Sales@Slingsby.com
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