HC Slingsby plc
01274 535 030
01274 535 035
Sales@Slingsby.com
T:
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W: www.slingsby.com
Report &
Accounts
HC Slingsby plc report and accounts for the year ended 31st December 2016
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
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
Website: www.slingsby.com
E-mail: sales@slingsby.com
Directors & Advisors
Directors
D. S. Slingsby – Interim Executive
Chairman and 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
RSM UK Audit LLP
2 Whitehall Quay
Leeds LS1 4HG
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.
Statement by the Chairman
Board Changes
As reported in my 2016 half year statement, at the Annual General Meeting on 30 June 2016, John Waterhouse was not
re-elected by shareholders as a Director of the company. As a result, I was appointed as Interim Executive Chairman and we continue to
look to appoint a non-executive chairman. We also continue to search for a new non-executive director which is proving to be more
protracted than anticipated due to the ongoing uncertainty regarding the pension fund commitments.
Results
In that half year statement I reported an operating loss (before exceptional items) of £0.16m on sales of £9.3m. The full year
operating loss (before exceptional items) was £0.26m (2015: loss of £10,000) on sales of £18m (2015: £17.1m). Together with
exceptional restructuring costs, the full year pre-tax loss was £0.7m (2015: £0.6m).
The results for the year ended 31 December 2016 contain the full year benefit of the ESE Direct Limited (“ESE”) acquisition which
contributed £6.5m of sales (2015: £4.8m) and £0.2m (2015: £0.1m) operating profit. ESE remains cash generative.
Group earnings before interest, depreciation and amortisation (“EBITDA”) in the year ended 31 December 2016 was £0.27m
(2015: £0.52m) before exceptional items. Net debt at 31 December 2016 is £1.7m (2015: £1.5m).
Dividend
In view of the loss in 2016 and the uncertainty around the pension fund commitments, the Board is unable to recommend a final
dividend for the year (2015: £nil).
Pension Scheme
The Company has an obligation to fund its defined benefit pension scheme and contributions to this scheme totalled £270,000
in 2016. This, together with scheme running costs of £160,000, represented a major commitment for the Company to meet.
Following the vote to leave the European Union, the pensions scheme deficit has increased as at 31 December 2016 to £9.6m
(2015: £8.0m). Mainly as a result of this increase (a net £1.3m after deferred tax movement), as well as the losses incurred during
the year, group net assets have declined by £1.9m at 31 December 2016 to £0.4m (2015: £2.3m).
In our half year statement I advised that, with agreement of the pension scheme Trustee, we had from 1 July 2016 suspended
deficit reduction contributions (whilst still paying the agreed costs of the scheme) until a longer term solution was found.
Discussions are ongoing and so whilst during this time the Company is not paying deficit reduction contributions, there is
uncertainty as to the quantum and timing of future payments to the scheme.
Recent Trading
During 2016, we began to refocus our sales and marketing efforts towards customer acquisition. We simplified and improved the
presentation of our later 2016 mailings and 2017 catalogue. In addition, we have reduced overheads and achieved synergies with
ESE by combining activities across the Group.
I am pleased to report that these actions have resulted in sales for the first four months of the current financial year being 7% ahead
of the comparable period last year. Whilst some of this sales improvement is due to several large orders received in 2016 but
delivered in 2017, order intake in 2017 remains ahead of prior year.
Whilst encouraged by this improved trading in the early part of 2017, we remain cautious regarding future trading given the
volatility which we have experienced in the recent past.
Finally, I would like to thank our staff across the Group for their efforts in 2016 and 2017. Our performance to date in 2017 gives
grounds for optimism but we must maintain our focus to build on what has been achieved.
D. S. Slingsby
Interim Executive Chairman
24 May 2017
Contents
Report & Accounts 2016 | HC Slingsby plc
1
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
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
24 May 2017
Strategic Report
Strategic Report continued
Business overview
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: handling and lifting,
wheels and castors, ladders and steps, storage and shelving,
office, safety and security, workwear, cleaning and hygiene,
mailroom and packaging, workshop and maintenance, waste
and recycling, premises, lockers and cloakroom, signs and
labels, and 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 is
reflective of the current market conditions.
The group continues to build upon its strengths in distance
selling and to enhance its e-commerce offering. The
acquisition of the ESE brand diversified the group into different
customer segments with an alternative service proposition
and pricing strategy. We believe that deploying e-commerce
initiatives with our customers will produce efficiencies as well
as growth opportunities. During 2016, we have continued to
work with our IT partners to improve our e-commerce offering
and to become a true omni-channel business. Our field
based sales personnel remain vital in personalising our service
offering and in providing bespoke solutions to customers’
needs.
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.
During 2016 we continued to generate synergies to augment
ESE’s contribution to group profitability. ESE now runs the
common business IT platform and carries a significant amount
of products sourced from Slingsby in its range. Warehousing
is carried out at the Slingsby site and certain ecommerce
activities are centralised at ESE. Further integration actions will
be made during 2017.
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 number of repeat customers. We
believe that this focus on value and service have begun to
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
Notes:
2016
5.8%
(181.6%)
(4.1%)
34.9%
2015
35.5%
(27.4%)
(3.7%)
36.6%
Sales growth includes sales from ESE Direct Limited acquired on 27th
March 2015. Comparable sales growth was (4.4% down).
Return on capital employed is calculated as loss before taxation over
the total equity at the year end. This has declined due to the reduction
in net assets caused by increased losses and the increase in the
pension scheme deficit.
Return on sales is calculated as loss before taxation over revenue. This
has declined due to the increased loss.
A review of the business is included in the Statement by the
Chairman on page 1.
Principal risks
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.
Funding and liquidity risk
The main risk arising from the group’s financial instruments is
liquidity risk and ensuring that the group 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.
Regulatory
We remain fully compliant with all regulatory requirements and
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
We are committed 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 Items
In 2016 we incurred £102,000 relating to employee termination
costs. In 2015, the costs of the acquisition of ESE Direct
Limited resulted in an exceptional item of £193,000 and a
further exceptional item of £88,000 related to redundancy and
compensation costs (total exceptional items £281,000).
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 operating
profits, cash flow and balance sheet.
Contributions to this scheme totalled £270,000 during 2016
and, together with the substantial costs of running the scheme,
represents a significant commitment for the Group to meet.
Discussions with the pension Trustee and relevant authorities
are ongoing concerning an appropriate longer term solution
for the scheme. The quantum and timing of future pension
contributions is therefore a significant uncertainty for the
company.
Health and Safety
We 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.
2
3
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | 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 2016. 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 (not re-elected 30 June 2016)
D. S. Slingsby
L. R. Wright
(resigned 19 May 2016)
M. L. Morris
Dividends
The following dividends have been proposed for the 2016
financial year:
An interim dividend of nil pence per share (2015: 0p
per share)
The directors recommend a final dividend of nil
pence per share (2015: 0p per share)
£’000
-
-
Directors’ Interests
The beneficial interests of the directors and their immediate
families in the shares of the company are:
Number of ordinary shares
of 25p each
31 December
2016
1 January
2016
Going Concern
The directors have prepared trading and cash flow forecasts for
the group for the period to 31 December 2018, which assume
that the pension scheme contributions will recommence at
their previous level. These forecasts indicate that the group
will be able to operate within its banking facilities and meet its
liabilities as they fall due.
The overdraft element of the group’s banking facilities expires
on 31 July 2017, however, HSBC Bank plc have indicated their
support to renew the facility until at least 31 December 2017.
The group’s debtor finance facilities remain unaffected.
In preparing the trading and cash flow forecasts the directors
have assumed that the overdraft will be renewed beyond 31
December 2017. However, if this was not the case the directors
are confident that given the level of security offered by the
group’s assets, they would be successful in obtaining an
alternative source of funding.
The financial statements have therefore been prepared on a
going concern basis which assumes the group will continue in
operation for the foreseeable future.
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 24 May 2017:
Number of
ordinary
Shares of
25p each
Percentage
Holding
M. Chadwick*
180,295
18.4%
J. Crowther Jones & Mr. T. E. Jones
J. H. Ridley
C.J. Slingsby
S. E. Slingsby and Mr Hugh Padfield
M. Miller (registered in the name
of Platform Securities Nominees
Limited)
54,866
54,302
53,886
51,167
48,381
47,138
37,000
32,500
30,835
5.5%
5.4%
5.4%
5.1%
4.8%
4.7%
3.7%
3.3%
3.1%
J. R. Waterhouse
D. S. Slingsby
L. R. Wright
M.L. Morris
1,000
115,167
-
1,000
1,000
115,167
H. Slingsby
2,000
1,000
K. J. Williams
S. Whittaker
S. A. Williams
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 RSM UK Audit 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
24 May 2017
There have been no other changes in the directors’
shareholdings between 31 December 2016 the date of this
report.
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.
The holding of D.S.Slingsby includes a non-beneficial interest
of 64,000 (2015: 64,000) ordinary shares.
H C Slingsby plc Retirement
3.0%
Benefits Scheme
* 80,995 registered in the name of Goodbody Stockbrokers Nominees
30,061
Ltd and 99,300 in the name of Rulegale Nominees Limited
4
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Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Corporate Governance
Statement of Directors’ Responsibilities
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:
D. S. Slingsby
M. L. Morris
–
–
Interim Executive Chairman and Operations Director*
Financial Director and Company Secretary
* Acting Chairman of both Audit and Remuneration Committees
As noted in the Chairman’s statement, the Directors continue their search for a suitable non-executive Director to bring more
balance to the composition of the Board.
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
24 May 2017
The directors are responsible for preparing the Strategic Report and the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare group and company financial statements for each financial year. The directors are
required by the AIM Rules of the London Stock Exchange to prepare group financial statements in accordance with International
Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and have elected under company law to
prepare the company financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by
the European Union (“EU”).
The group financial statements are required by law and IFRS adopted by the EU to present fairly the financial position and
performance of the group; the Companies Act 2006 provides in relation to such financial statements that references in the relevant
part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.
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 each of the group and company financial statements, the directors are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and accounting estimates that are reasonable and prudent;
c. state whether they have been prepared in accordance with IFRSs adopted by the EU subject to any material departures
disclosed and explained in the company financial statements; and
d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and the company
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 group and the company 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
24 May 2017
6
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Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc Independent auditors’ report to the members of H C Slingsby plc
Independent auditors’ report to the members of H C Slingsby plc continued
Opinion on financial statements
We have audited the group and parent company financial
statements (“the financial statements”) on pages 10 to 35.
The financial reporting framework that has been applied
in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the
European Union and, as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion the information given in the Strategic Report
and the Directors’ Report for the financial year for which
the financial statements are prepared is consistent with the
financial statements and, based on the work undertaken in
the course of our audit, the Strategic report and the Directors’
Report have been prepared in accordance with applicable legal
requirements.
In our opinion
•
•
•
the financial statements give a true and fair view of the
state of the group’s and the parent’s affairs as at 31
December 2016 and of the group’s loss for the year then
ended;
the group financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union;
the parent financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union and as applied in accordance with the
Companies Act 2006; and
•
the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is
provided on the Financial Reporting Council’s website at
http://www.frc.org.uk/auditscopeukprivate
Matters on which we are required to report by
exception
In the light of the knowledge and understanding of the
company and its environment obtained in the course of the
audit, we have not identified any material misstatements in the
Strategic Report or the Directors’ report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
•
•
•
adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
the parent company financial statements are not in
agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
Respective responsibilities of directors and auditor
As more fully explained in the Directors’ Responsibilities Statement 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). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Michael Thornton (Senior Statutory Auditor)
for and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
2 Whitehall Quay
Leeds
LS1 4HG
24 May 2017
8
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Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Consolidated Income Statement
Statement of Consolidated Comprehensive Income and Expense
For the year ended 31 December 2016
For the year ended 31 December 2016
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Operating loss before exceptional item
Exceptional item
Operating loss
Finance income
Finance costs
Loss before taxation
Taxation
Note
2016
£’000
18,044
(11,752)
6,292
2015
£’000
17,061
(10,812)
6,249
(3,746)
(2,909)
(3,566)
(2,974)
(261)
(10)
(102)
(281)
(363)
(291)
-
(369)
(732)
76
1
(342)
(632)
194
3
6
7
8
9
Loss for the year attributable to owners of the parent
(656)
(438)
Basic and diluted loss per share
10
(65.6p)
(43.8p)
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 (expense)/income
Note
2016
£’000
(656)
24
16
(1,555)
280
2015
£’000
(438)
242
(213)
31
(13)
(1,244)
16
Total comprehensive expense for the year attributable to equity shareholders
(1,900)
(422)
10
11
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Statements of Consolidated and Company Changes in Shareholders’ Equity
Consolidated Balance Sheet
For the year ended 31 December 2016
As at 31 December 2016
Group
1 January 2015
Loss for the year
Other comprehensive income/ (expense) for the year
Total comprehensive expense for the year
Dividends paid
1 January 2016
Loss for the year
Other comprehensive income/ (expense) for the year
Total comprehensive expense for the year
Dividends paid
31 December 2016
Note
12
12
Share
capital
£’000
250
–
–
–
–
250
–
–
–
–
250
Retained
earnings
£’000
Translation
reserve
£’000
2,531
(438)
29
(409)
(60)
2,062
(656)
(1,275)
(1,931)
-
131
4
–
(13)
(13)
–
(9)
–
31
31
–
22
Total
equity
£’000
2,785
(438)
16
(422)
(60)
2,303
(656)
(1,244)
(1,900)
-
403
The translation reserve comprises foreign exchange differences arising from the translation of the financial statements of foreign
operations.
Company
1 January 2015
Loss for the year
Other comprehensive income for the year
Total comprehensive expense for the year
Dividends paid
1 January 2016
Loss for the year
Other comprehensive expense for the year
Total comprehensive expense for the year
Dividends paid
31 December 2016
Note
12
12
Share
capital
£’000
250
–
–
–
–
250
–
–
–
–
250
Retained
earnings
£’000
2,308
(447)
29
Total
equity
£’000
2,558
(447)
29
(418)
(418)
(60)
1,830
(671)
(1,275)
(1,946)
-
(116)
(60)
2,080
(671)
(1,275)
(1,946)
-
134
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
Liabilities
Current liabilities
Trade and other payables
Derivative financial liability
Finance lease obligations
Net current liabilities
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
2016
£’000
2015
£’000
13
14
14
16
17
18
20
19
20
21
21
24
16
25
5,838
1,108
2,409
1,733
6,102
1,279
2,409
1,446
11,088
11,236
1,811
1,778
2,525
2,340
-
632
4,968
11
192
4,321
(5,517)
(4,653)
(13)
(44)
(5,574)
(606)
(37)
(9,626)
(416)
403
250
131
22
403
-
(44)
(4,697)
(376)
(66)
(8,033)
(458)
2,303
250
2,062
(9)
2,303
The financial statements on pages 10 to 35 were approved by the Board of Directors on 24 May 2017 and were signed on its
behalf by:
D. S. Slingsby
Director
M. L. Morris
Director
H C Slingsby plc
Registered Number: 452716
12
13
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Company Balance Sheet
As at 31 December 2016
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
Liabilities
Current liabilities
Trade and other payables
Derivative financial liability
Finance lease obligations
Net current liabilities
Non-current liabilities
Finance lease obligations
Retirement benefit obligation
Deferred tax liabilities
Net assets
Capital and reserves
Share capital
Retained earnings
Total equity
Consolidated Cash Flow Statement
For the year ended 31 December 2016
Note
2016
£’000
2015
£’000
Note
2016
£’000
2015
£’000
13
14
15
16
17
18
20
19
20
21
21
24
16
25
5,710
258
4,001
1,733
5,877
352
4,001
1,446
Cash flows from operating activities
Cash (used in)/generated from operations
Interest payable
UK corporation tax received
Cash (used in)/generated from operating activities
Cash flows from investing activities
11,702
11,676
Interest received
1,810
2,005
256
-
4,071
1,731
1,876
62
11
3,680
(5,534)
(4,690)
(13)
(44)
(5,591)
(1,520)
(37)
(9,626)
(385)
134
250
(116)
134
-
(44)
(4,734)
(1,054)
(66)
(8,033)
(443)
2,080
250
1,830
2,080
Purchase of property, plant and equipment
Payment in respect of ESE acquisition
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 financing activities
Net decrease in cash and cash equivalents
Opening cash and cash equivalents
Exchange differences
Closing cash and cash equivalents
Cash and cash equivalents
Cash
Overdraft
13
14
12
(84)
(61)
23
(122)
-
(98)
(30)
51
(40)
(117)
-
(57)
27
50
20
(219)
(291)
171
(38)
93
226
1
(198)
(3,585)
112
(26)
(3,696)
(60)
(20)
130
1,202
1,252
(2,218)
1,940
31
(13)
(479)
(291)
Group
2016
£’000
632
(1,111)
(479)
2015
£’000
192
(483)
(291)
Company
2016
£’000
256
(1,111)
(855)
2015
£’000
62
(483)
(421)
The financial statements on pages 10 to 35 were approved by the Board of Directors on 24 May 2017 and were signed on its
behalf by:
D. S. Slingsby
Director
M. L. Morris
Director
H C Slingsby plc
Registered Number: 452716
14
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Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Company Cash Flow Statement
For the year ended 31 December 2016
Cash flows from operating activities
Cash (used in) / generated from operations
Interest payable
UK corporation tax received
Cash (used in) / generated from operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Payment in respect of ESE acquistion
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 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 2016
Cash (used in)/generated from operating activities
Loss before tax
Net finance costs
Depreciation and amortisation
Profit on sale of property, plant and equipment
Pension deficit contributions
(Increase)/decrease in inventories
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Cash (used in)/generated from operating activities
Note
2016
£’000
2015
£’000
(317)
(61)
597
(38)
23
137
(355)
696
13
14
12
-
(60)
(30)
31
(40)
(99)
-
(57)
27
50
20
(434)
(421)
(855)
Group
Company
2016
£’000
(732)
369
527
(5)
(270)
(33)
(169)
229
(84)
2015
£’000
(632)
341
530
(99)
(500)
232
29
270
171
2016
£’000
(760)
369
331
-
(270)
(79)
(118)
210
(317)
1
(176)
(3,971)
112
(26)
(4,060)
(60)
(20)
130
1,202
1,252
(2,112)
1,691
(421)
2015
£’000
(628)
342
382
(99)
(500)
220
(37)
917
597
Notes to the Accounts
1. Accounting Policies
Basis of Preparation
The financial accounts are prepared in Sterling, which is the functional currency of the group. Monetary amounts in these
statements are rounded to the nearest £’000.
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.
The group has made a loss for the year of £656,000 (2015 - £438,000) and had net current liabilities at 31 December 2016 of
£606,000 (2015 - £376,000).
With the agreement of the pension scheme Trustee the company suspended deficit reduction contributions to the defined benefit
pension scheme from 1 July 2016 until a longer term solution to the pension deficit can be found. Discussions are ongoing and
therefore there is uncertainty as to the quantum and timing of future payments to the scheme.
The directors have prepared trading and cash flow forecasts for the group for the period to 31 December 2018, which assume
that the pension scheme contributions will recommence at their previous level. These forecasts indicate that the group will be able
to operate within its banking facilities and meet its liabilities as they fall due.
The overdraft element of the group’s banking facilities expires on 31 July 2017, however, HSBC Bank plc have indicated their
support to renew the facility until at least 31 December 2017. The group’s debtor finance facilities remain unaffected.
In preparing the trading and cash flow forecasts the directors have assumed that the overdraft will be renewed beyond 31
December 2017. However, if this was not the case the directors are confident that given the level of security offered by the
group’s assets, they would be successful in obtaining an alternative source of funding.
The financial statements have therefore been prepared on a going concern basis which assumes the group will continue in
operation for the 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 2016 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 2017 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 2016 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:
16
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Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
• Assumptions used in the calculation of the defined benefit pension scheme liability (note 24);
• Selection of appropriate rates of amortisation and depreciation for intangible and tangible non-current assets; 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);
• Non-impairment of non-current assets based on expected future performance of the business; and
• Recognition of deferred tax assets based on the availability of suitable future profit streams.
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.
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. Other leases are classified as finance leases.
Assets and liabilities under finance leases are recognised at amounts equal to their fair value and depreciated at rates consistent
with similar assets. Payments made are apportioned between finance charges and the reduction in capital value of the liability.
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 funtional 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”.
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.
18
19
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
Derivative Financial Instruments
Derivative financial instruments are initially recognised at fair value on the date a contract is entered into and are subsequently re-
measured 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.
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, contributing €154,000 ( 2015: €616,000 ) and €257,000 (2015: €271,000)
respectively.
3. Exceptional Items
Redundancy and compensation costs
Acquisition of ESE
2016
£’000
102
-
102
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
The average monthly number of persons employed by the company during the year was:
2016
£’000
2,718
238
148
3,104
2015
£’000
88
193
281
2015
£’000
2,771
244
167
3,182
Selling and distribution
Administration
20
2016
Number
2015
Number
83
27
110
82
30
112
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
2016
£’000
2015
£’000
196
21
217
115
86
411
19
430
130
86
Two directors have accrued benefits under a deferred benefit scheme (2015: three). One director accrued benefits under a
defined contribution pension scheme (2015: one).
Payments in respect of compensation for loss of office totalled £82,556 and are not included above.
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 assets
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 the company’s auditors
7. Finance Income
Bank interest receivable
2016
£’000
(5)
282
245
36
4
(27)
32
6
5
-
43
2015
£’000
(99)
308
222
36
4
13
40
7
10
1
58
2016
£’000
-
2015
£’000
1
21
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
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
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% (2015: 20.25%)
Expenses not deductible for tax purposes
Adjustments to tax in respect of prior years
– current year
– deferred tax
Tax credit for the year
2016
£’000
(732)
(146)
15
(27)
(49)
(76)
2015
£’000
(632)
(128)
13
(49)
(30)
(194)
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%. Deferred tax assets and liabilities are measured at a rate of 18% as
at 31 December 2016.
Further reductions to the UK Corporation tax rates were substantively enacted as part of the Finance Bill 2015 on 26 October
2015 and the Finance Bill 2016 on 6 September 2016. These reduce the main rate to 19% from 1 April 2017 and 17% from 1 April
2020.
2016
£’000
56
5
308
369
2015
£’000
36
2
304
342
10. Loss Per Share
Basic loss per share is based upon a loss of £656,000 (2015: £438,000) and on 1,000,000 (2015: 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 £671,000 (2015: £447,000).
2016
£’000
2015
£’000
12. Dividends
–
(27)
(27)
(42)
(7)
(49)
(76)
--
(49)
(49)
(115)
(30)
(145)
(194)
Interim dividend paid for the 2015 financial year of 0.0p (2014: 2.0p)
Final dividend paid for the 2015 financial year of 0.0p (2014: 4.0p)
No dividends are proposed for the 2016 financial year as set out in the Report of the Directors.
2016
£’000
2015
£’000
-
-
-
20
40
60
13. Property, Plant and Equipment
Group
Cost
1 January 2015
Additions
Acquisition of subsidiary (note 28)
Disposals
1 January 2016
Additions
Disposals
31 December 2016
Accumulated depreciation
1 January 2015
Acquisition of subsidiary
Charge for the year
Disposals
1 January 2016
Charge for the year
Disposals
31 December 2016
Net book amount
At 31 December 2016
At 31 December 2015
At 31 December 2014
Short
Leasehold
Property
£’000
Freehold land
and buildings
£’000
Equipment
£’000
-
5
114
–
119
-
–
119
-
23
7
–
30
11
–
41
78
89
-
6,665
-
-
–
6,665
6
–
6,671
913
-
105
–
1,018
106
–
1,124
5,547
5,647
5,752
2,229
193
313
(330)
2,405
58
(205)
2,258
2,029
131
196
(317)
2,039
165
(159)
2,045
213
366
200
Total
£’000
8,894
198
427
(330)
9,189
64
(205)
9,048
2,942
154
308
(317)
3,087
282
(159)
3,210
5,838
6,102
5,952
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 and a fixed charge over the freehold land and buildings.
22
23
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
13. Property, Plant and Equipment (continued)
14. Intangible Assets
Equipment includes the following amounts where the group is lessee under finance leases:
Cost of assets subject to finance leases
Accumulated depreciation
Group and Company
2016
£’000
144
(45)
99
2015
£’000
144
(20)
124
The group leases various motor vehicles under non-cancellable finance lease agreements. The assets are leased on a term of 3
years.
Company
Cost
1 January 2015
Additions
Disposals
1 January 2016
Additions
Disposals
31 December 2016
Accumulated depreciation
1 January 2015
Charge for the year
Disposals
1 January 2016
Charge for the year
Disposals
31 December 2016
Net book amount
At 31 December 2016
At 31 December 2015
At 31 December 2014
Depreciation is charged to administrative expenses in the Income Statement.
Freehold
land and
buildings
£’000
Equipment
£’000
6,665
-
–
6,665
6
–
6,671
913
105
–
1,018
106
–
1,124
5,547
5,647
5,752
2,229
174
(330)
2,073
54
(157)
1,970
2,029
131
(317)
1,843
91
(127)
1,807
163
230
200
Total
£’000
8,894
174
(330)
8,738
60
(157)
8,641
2,942
236
(317)
2,861
197
(127)
2,931
5,710
5,877
5,952
Group
Goodwill
£’000
--
2,409
2,409
--
2,409
--
--
--
--
--
--
2,409
2,409
--
Group
Company
Brand and
Domain
Names and
Customer
Lists
IT Software
and
Trademarks
£’000
£’000
TOTAL
£’000
IT Software
£’000
--
1,000
1,000
--
1,000
--
75
--
75
100
175
825
925
--
775
30
805
74
879
302
147
2
451
145
596
283
354
473
775
1,030
1,805
74
1,879
302
222
2
526
245
771
1,108
1,279
473
775
25
800
40
840
302
146
-
448
134
582
258
352
473
Cost
1 January 2015
Additions– Acquisition of subsidiary
1 January 2016
Additions
31 December 2016
Accumulated amortisation
1 January 2015
Charge for the year
Acquisition of subsidiary
1 January 2016
Charge for the year
31 December 2016
Net book amount
At 31 December 2016
At 31 December 2015
At 31 December 2014
Amortisation is charged to administrative expenses in the Income Statement.
On 27 March 2015, the Company purchased 100% of the share capital of ESE Direct Limited. Goodwill of £2.4m arose on the
acquisition.
In 2016, the acquired business contributed revenue of £6.5m (2015:£4.8m) and profit before tax of £0.2m (2015:£0.1m) before
management charges) to the group.
Goodwill monitoring
Goodwill is monitored by management at the Cash Generating Unit (“CGU”) level. A CGU is considered 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 2 and 6 %
• Capital expenditure of between £35,000 and £20,000 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.
The Directors performed sensitivity analysis on the basis of sales growth at 50% of assumed levels. At these reduced levels there
would be no impairment of goodwill.
24
25
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
15. Investment in Subsidiary
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.
This investment represents the whole of the amount shown in the company’s balance sheet.
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.
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
Business Activity
Slingsby Mail Order Limited
Distribution of Industrial and Commercial Equipment
ESE Direct Limited
Eastern Storage Limited
ESE Projects Limited
Eastern Storage Equipment Limited
Slingsby Trading Post Limited
Slingsby Manufacturing Limited
Slingsby Metro Equipment Limited
Distribution of Industrial and Commercial Equipment
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
16. Deferred Tax
The deferred tax balances in these financial statements are attributable to the following:
16. Deferred Tax (continued)
Company
1 January 2015
(Charged)/credited to income statement
Credited to equity
1 January 2016
Credited to income statement
Credited to equity
31 December 2016
17. Inventories
Raw materials and work in progress
Finished goods and goods for resale
Deferred tax asset
Pension liability
Deferred tax liabilities
Short term timing differences
Rolled over capital gain
Group
2016
£’000
2015
£’000
Company
2016
£’000
2015
£’000
1,733
1,446
1,733
1,446
(249)
(167)
(416)
(291)
(167)
(458)
(218)
(167)
(385)
(276)
(167)
(443)
Pension
liability
£’000
Short term
timing
differences
£’000
Rolled over
capital gain
£’000
1,694
(35)
(213)
1,446
7
280
1,733
(424)
148
–
(276)
58
–
(218)
(185)
18
–
(167)
-
–
(167)
Total
£’000
1,085
131
(213)
1,003
65
280
1,348
Group
Company
2016
£’000
178
1,633
1,811
2015
£’000
215
1,563
1,778
2016
£’000
178
1,632
1,810
2015
£’000
168
1,563
1,731
Group
Company
2016
£’000
2,157
–
368
2,525
2015
£’000
2,013
–
327
2,340
2016
£’000
1,638
54
313
2,005
2015
£’000
1,642
13
221
1,876
Inventories are presented net of provisions for write-downs, based on management’s estimate of net realisable value. The amount
charged to the income statement in respect of write-downs of inventories was £19,000, (2015: £24,000). The cost of inventories
recognised as an expense and included in the group’s cost of sales was £11,580,000 (2015: £10,089,000) and £7,325,000 (2015:
£6,802,000) for the company. The provision for obsolete stock at the year end is £403,000 (2015: £387,000).
18. Trade and Other Receivables
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.
Trade receivables
Receivables from subsidiary
Prepayments
Movements in deferred tax assets/(liabilities) are as follows:
Group
1 January 2015
Acquired on acquisition of ESE
(Charged)/credited to income statement
Credited to equity
1 January 2016 – Group and Company
Credited to income statement
Credited to equity
31 December 2016
26
Pension
liability
£’000
Short term
timing
differences
£’000
Rolled over
capital gain
£’000
1,694
-
(35)
(213)
1,446
7
280
1,733
(419)
(35)
162
–
(291)
42
–
(249)
(185)
-
18
–
(167)
-
–
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
Total
£’000
1,091
(35)
145
(213)
988
49
280
(167)
1,317
27
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
18. Trade and Other Receivables (continued)
19. Trade and Other Payables
Movements on the group and company provisions for impairment of trade receivables are:
At 1 January 2016
Provision made for impaired receivables
Unused provision reversed
Receivables written off during the year as uncollectable
At 31 December 2016
Group
2016
£’000
18
46
(11)
(8)
45
Company
2015
£’000
2016
£’000
2015
£’000
16
19
(10)
(7)
18
18
38
(11)
(6)
39
16
19
(10)
(7)
18
Trade payables
Payables to subsidiaries
Other taxation and social security payable
Other payables
Accruals
Debt financing and overdraft
Group
Company
2016
£’000
2,416
-
276
12
450
2,363
5,517
2015
£’000
2,248
-
338
12
370
1,685
4,653
2016
£’000
1,734
930
200
11
296
2,363
5,534
2015
£’000
1,768
822
236
12
167
1,685
4,690
Receivables due from subsidiary were not impaired at 31 December 2016 and 31 December 2015.
At 31 December 2016 group trade receivables of £45,000 (2015: £18,000) and company trade receivables of £39,000 (2015:
£18,000) 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
2016
£’000
5
40
45
Company
2015
£’000
2016
£’000
2015
£’000
-
18
18
3
36
39
-
18
18
At 31 December 2016 group trade receivables of £1,023,000 (2015: £866,000) and company trade receivables of £617,000 (2015:
£835,000) 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
2016
£’000
862
161
1,023
2015
£’000
840
26
866
2016
£’000
572
45
617
2015
£’000
809
26
835
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 4.25% and 2.55%-4%
above the prevailing Bank of England Base Rate respectively. The overdraft element of the Group’s banking facilities expires
on the 31 July 2017 but HSBC Bank plc have indicated their support to extend the facility until at least 31 December 2017. Our
debtor finance facilities remain unaffected. The Group debtor finance facility is a total of £3m (subject to suitable debt being
available) and the overdraft facility is the sum of £750,000.
20. Derivative Financial Instruments
Forward foreign currency contracts and options
Group and Company
Assets
Liabilities
2016
£’000
-
2015
£’000
11
2016
£’000
13
2015
£’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 2017. They have been valued using year end
market data.
21. Borrowings
Finance Leases
The future minimum finance lease payments are as follows:
Group
2016
£’000
Company
2015
£’000
2016
£’000
2015
£’000
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.
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
The finance lease liabilities relate to motor vehicles leased on a term of 3 years.
48
41
89
(8)
81
48
73
121
(11)
110
48
41
89
(8)
81
The carrying amounts of the group’s and company’s receivables are denominated in the following currencies:
Group
Company
2016
£’000
2,504
21
2,525
2015
£’000
2,278
62
2,340
2016
£’000
1,984
21
2,005
2015
£’000
1,876
–
1,876
Pound sterling
Euro
28
48
73
121
(11)
110
29
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
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.
The principle financial instruments used by the group from which financial risk arises are as follows:
Financial assets
Trade receivables (note18)
Forward foreign currency contracts and options (note 20)
Cash and cash equivalents
Financial liabilities
Debt financing and overdraft (note19)
Trade payables (note 19)
Other payables (note 19)
Forward foreign currency contracts and options (note 20)
2016
£’000
2,157
-
632
2,789
2016
£’000
2,363
2,416
12
13
2015
£’000
2,013
11
192
2,216
2015
£’000
1,685
2,248
12
-
4,804
3,945
Foreign Exchange Risk
The group is exposed to foreign exchange risk from purchasing a portion of its supplies in foreign currencies. The company
enters into forward foreign currency contracts to manage its exposure to currency fluctuations that arise on purchase contracts
denominated in foreign currencies.
The carrying value of the group’s foreign currency denominated financial assets and monetary liabilities at the reporting date are
as follows:
Euros
Dollars
Assets
Liabilities
2016
£’000
21
14
2015
£’000
62
19
2016
£’000
78
-
2015
£’000
71
-
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 of 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 2016, the gearing ratio
was 430% (2015:65%).
24. Pension Commitments
Group and Company
Retirement Benefit Obligations
At 31 December 2016 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 2017 fiscal year
is subject to the outcome of discussions between the Company and the appropriate authorities. 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 sole corporate Trustee that has control over its operation, funding and investment strategy. The Trustee will
consult with the Company on certain matters.
Funding the liabilities
UK legislation requires the Trustee 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’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. An amount of £270,000 was paid in 2016. Deficit reduction
contributions are suspended pending discussion between the Company and the relevant authorities.
The weighted average duration of the defined benefit obligation is 20.4 years.
Investment strategy
Approximately 53% of the Scheme’s assets are held in equity type assets, and 47% 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 £22,000 as at 31 December 2016.
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 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 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 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 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.
30
31
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
24. Pension Commitments (continued)
24. Pension Commitments (continued)
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.
Winding up
Although currently there are no plans to do so, with the company’s approval, the Trustee 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 £1.4m 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 £0.1m 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 2016 would be 21.4 (23.5) years and the future life
expectancy from age 65 for a male (female) non-pensioner member currently aged 45 of 23.1 (25.4)
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 £1m.
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 2016
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
2016 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
2016
£’000
21,993
845
4,592
(638)
26,792
2015
£’000
22,397
817
(582)
(639)
21,993
32
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
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 loss/(gain)
Actuarial loss/(gain) recognised in SOCI
Pension cost
Defined benefit scheme net interest charge
Defined contribution scheme
2016
£’000
2015
£’000
13,960
13,926
537
3,037
270
(638)
513
(340)
500
(639)
17,166
13,960
2016
£’000
26,792
(17,166)
9,626
2015
£’000
21,993
(13,960)
8,033
2016
£’000
845
(537)
308
2016
£’000
1,555
1,555
2016
£’000
308
148
456
2015
£’000
817
(513)
304
2015
£’000
(242)
(242)
2015
£’000
304
167
471
33
Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notes to the Accounts continued
Notes to the Accounts continued
24. Pension Commitments (continued)
Scheme assets
Equities
Gilts and bonds
Total scheme assets
Expected rate of return on scheme assets
2016
%
53
47
100
2016
£’000
9,050
8,115
17,165
3.9%
2015
%
50
50
100
2015
£’000
7,045
6,915
13,960
3.7%
At 31 December 2016 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
2016
£’000
22
2015
£’000
64
24. Pension Commitments (continued)
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 £120,000 (2015: £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 of
£14,000 (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
2016
Number
2016
£’000
2015
Number
2015
£’000
1,200,000
300
1,200,000
1,000,000
250
1,000,000
300
250
The company has one class of Ordinary shares which carry no right to fixed income. Each carries a right to vote at general
meetings of the company.
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:
26. Operating Lease Commitments
At 31 December 2016, the group had the following outstanding future aggregate minimum lease payments under non-cancellable
operating leases as follows:
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
2016
2.70%
2.70%
3.30%
2.20%
0.00%
3.10%
4.00%
4.20%
86.4
88.1
88.5
2015
3.90%
3.90%
3.10%
2.10%
0.00%
3.10%
4.00%
4.20%
87.0
89.4
88.8
90.4
25% of pension at age
65 at a rate of 13.0:1
91.3
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)
Operating leases commitments:
within one year
in more than one year but less than five years
more than 5 years
2016
£’000
2015
£’000
36
144
33
51
148
72
Operating lease charges recognised in the income statement as shown in note 6 and arise in respect of property leases.
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
director’s remuneration is the amount £63,713 (2015:£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 2016, £nil (2015:£1,995) was outstanding.
There were no other transactions with key management.
Company – Transactions With Subsidiaries
Sales amounting to £99,000 (2015: £394,000) were made by HC Slingsby plc to Slingsby Mail Order Limited.
Amounts due to Slingsby Mail Order Limited at 31 December 2016 were £202,000 (2015: £122,000).
Sales amounting to £462,935 (2015:£78,268) were made by HC Slingsby plc to ESE Direct Limited.
Purchases amounting to £2,287(2015:£13,654) were made to HC Slingsby plc by ESE Direct Limited.
Amounts due to ESE Direct Limited were £nil (2015:£nil) in respect of trading activities and £728,215 (2015: £701,000) in respect of
an inter-company loan.
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.
Amounts due from ESE Direct Limited were £54,000 (2015:£13,054).
34
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Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Five Year Summary
Notice of Annual General Meeting
Income Statement
Turnover
Gross profit
Operating (loss)/profit before exceptional item
Exceptional item
(Loss)/profit before tax
(Loss)/profit for the financial year
2016
£’000
18,044
6,292
(261)
(102)
(732)
(656)
2015
£’000
2014
£’000
2013
£’000
2012
£’000
17,061
6,249
(10)
(281)
(632)
(438)
12,587
5,038
92
(193)
(453)
(299)
13,965
5,502
137
-
(249)
(95)
(9.5p)
14,588
6,155
489
129
102
172
17.2p
(Loss)/earnings per share – basic and diluted
(65.6p)
(43.8p)
(29.9p)
Dividend Per Ordinary Share*:
– Interim
– Final
Cash Flow Statement
0.0p
0.0p
0.0p
0.0p
2.0p
4.0p
2.0p
10.0p
4.0p
15.0p
Cash (used in)/generated by operating activities
(84)
171
(169)
166
1,041
Balance Sheet
Net current (liabilities)/assets
Net assets
Cash and cash equivalents
(607)
403
632
(376)
2,303
192
3,740
2,785
1,940
4,122
3,688
2,325
4,808
2,949
2,836
* 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.
Notice is given that the sixty-ninth Annual General Meeting of H C Slingsby plc (“the Company”) will be held at the HC
Slingsby plc, Otley Road, Baildon, Shipley, West Yorkshire BD17 7LW on 28 June 2017 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.
To receive the Company’s annual accounts for the financial year ended 31 December 2016 together with the Directors’
reports and auditor’s report on those accounts.
To re-elect as a Director, Dominic Slingsby who retires from the Board in accordance with the Company’s articles of
association.
To reappoint RSM UK Audit LLP as auditors of the Company to hold office until the end of the next general meeting at
which accounts are laid before 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
powers of the Company to allot equity securities (as defined in section 560 of the Act):
5.1
5.2
up to an aggregate nominal amount of £83,250; and
comprising equity securities up to a nominal amount of £166,750 (including within such limit any equity securities
issued under paragraph 5.1 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
proportion (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:
6.1
Subject to the passing of resolution 5, to authorise 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 5 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
allotment provided that such authority shall be limited:
(a)
to the allotment of equity securities in connection with an offer of equity securities (but in the case of the authority
granted under paragraph 5.2 of resolution 5, by way of a rights issue only):
(i)
(ii)
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
(b)
in the case of the authority granted under paragraph 5.1 of resolution 5 and/or in the case of any transfer of
36
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Report & Accounts 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc
Notice of Annual General Meeting continued
Notes to the Notice of Annual General Meeting
treasury 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 6.1(a) above, of equity securities up to an aggregate nominal
value equal to £12,500;
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.
6.2
Subject to the passing of resolution 5, and in addition to any authority granted under Clause 6.1 of this resolution,
to authorise 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 5 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 allotment provided that
such authority shall be:
(a)
(b)
limited to the allotment of equity securities up to an aggregate nominal amount of £12,500; and
used only for the purpose of financing (or refinance if the authority is to be used within 6 months after
the original transaction) a transaction which the Directors determine to be an acquisition or other capital
investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights
most recently published by the Pre-Emption Group prior to the date of this notice
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.
The resolutions in Clauses 6.1 and 6.2 revoke and replace all unexercised powers previously granted to the Directors to
allot equity securities as if section 561 of the Act did not apply but without prejudice to any allotment of equity securities
already made or agreed to be made pursuant to such authorities.
Registered in England and Wales No. 00452716
Entitlement to attend and vote
1.
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 26 June 2017 (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 determining the rights of any person to attend or vote (and the number of votes they may cast) at the meeting.
Proxies
2.
3.
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. 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. 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 Ser
vices at PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU no later than 10am on 28 June 2017 (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 2017 (being the latest practicable date prior to publication of this Notice of Annual General Meeting (the “Latest Practicable Date”), 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 24 May 2017 are 1,000,000.
Explanatory Notes to Resolutions 5 and 6.
Resolution 5 – Authority to Allot Shares
Registered office
H C Slingsby plc
Otley Road
Baildon
Shipley
BD17 7LW
38
By order of the board
Paragraph 5.1 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 £83,250 (representing 333,000 Ordinary Shares). This amount represents approximately 33.3% of the issued Ordinary Share Capital of the
Company as at the ‘Latest Practicable Date’.
...……..................................
M.L. Morris
Company Secretary
24 May 2017
Paragraph 5.2 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 con-
nection 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 £166,750
(representing 667,000 Ordinary Shares), as reduced by the nominal amount of any shares issued under paragraph 5.1 of this resolution. This amount (before any reduction)
represents approximately 66.7% of the issued ordinary share capital of the Company as at the Latest Practicable Date.
Resolutions 5.1 and 5.2 are in accordance with the Investment Association Guidelines issued in July 2016
The authority and power pursuant to Resolution 5 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 6 – 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 and is in accordance with The Pre-Emption Group Statement of Principles.
This authority would be limited to:
(a) an aggregate nominal amount of £12,500 (representing 50,000 Ordinary Shares). This aggregate nominal amount represents 5% of the issued Ordinary Share capital of the
Company as at the Latest Practicable Date and could be used for any purpose; and
(b) an additional aggregate nominal amount of £12,500 (representing 50,000 Ordinary Shares). This aggregate nominal amount represents 5% of the issued Ordinary Share
capital of the Company at the Latest Practicable Date and could only be used for an acquisition or specified capital investment.
The authority and power pursuant to Resolution 6 will expire on the latter of 15 months from the date Resolution 6 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 2016 | HC Slingsby plcReport & Accounts 2016 | HC Slingsby plcHC Slingsby plc