Established 1893
Annual Report &
Audited Financial Statements
For the year ended 31st December 2023
www.slingsby.com
M. L. Morris – Group Chief Executive
A.J. Kitchingman – Chairman
Over 130 years serving and
supplying the workplace.
We do:
Manufacture and distribute over 45,000 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.
Our Commitment:
Providing our customers with an extensive product range,
outstanding service and efficient delivery.
22
Annual Report & Audited Financial Statements | 2023 Directors
and Advisors
Directors
A.J. Kitchingman
Chairman
M. L. Morris
Group Chief Executive
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
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
Independent Auditors
RSM UK Audit LLP
Central Square
Fifth Floor
29 Wellington Street
Leeds
LS1 4DL
Solicitors
Squire Patton Boggs (UK) LLP
6 Wellington Place
Leeds
LS1 4AP
Nominated Advisor & Broker
Allenby Capital Limited
5 St. Helens Place
London
EC3A 6AB
Website & E-Mail
Website: www.slingsby.com
E-mail: sales@slingsby.com
Annual Report and Audited
Financial Statements - 2023
Contents
Statement by the Chairman
Strategic Report
Report of the Directors
Corporate Governance
Statement of Directors’
Responsibilities
Independent Auditors’ Report
Consolidated Income Statement
Statement of Consolidated
Comprehensive Income and Expense
Statement 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
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6
9
11
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23
24
25
26
27
28
29
30
54
55
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Annual Report & Audited Financial Statements | 2023
3
Statement by the Chairman
Board Composition
I was pleased to be appointed as independent Non-Executive
Chairman of the company on 12 September 2023. My
appointment has improved the level of independence on
the Board, although the Board believes that it would benefit
from the appointment of another independent Non-Executive
Director and intends to make such an appointment in due
course.
On 11 March 2024, Dominic Slingsby resigned from the board.
Dominic remains as an employee and will leave the Group on
30 June 2024 after over 40 years’ service. On behalf of the
Board, I would like to thank Dominic for his commitment and
contribution during his tenure. His dedication will be missed
by everyone at Slingsby, and we wish him the very best in his
retirement.
Results
In the half year statement, an operating profit of £0.33m on
sales of £11.5m was reported. The full year operating profit was
£0.63m (2022: £0.63m) on sales of £22.6m (2022: £21.6m).
Group sales increased by 5%, helped by the acquisition of
certain assets of the Stakrak business. Gross margin improved
despite the insolvency of our main logistics partner in June
2023, but higher overheads and interest relating to the defined
benefit pension scheme, led to a reduced profit before taxation
of £0.36m (2022: £0.49m).
Group earnings before interest, tax, depreciation and
amortisation (“EBITDA”) in the year ended 31 December 2023
were £1.02m (2022: £1.09m). The Group had net cash (after
overdraft balances included in trade and other payables) as at
31 December 2023 of £0.21m (2022: £0.03m). The increase
in cash was due to EBITDA offsetting capital expenditure,
the costs of the acquisition of certain assets of the Stakrak
business and pension scheme deficit reduction payments.
Dividend
As part of the agreement reached with the Trustee of the
defined benefit pension scheme (discussed below), the Board
is unable to declare a final dividend for the year ended 31
December 2023 (2022: £nil).
Pension Scheme
The Company paid £0.40m (2022: £0.35m) in deficit reduction
contributions during 2023. The Company also continues to
contribute £0.16m (2022: £0.16m) towards the scheme’s
running costs. Following the triennial valuation which took
place as of 1 January 2023, the Company has agreed with the
Trustee of its defined benefit pension scheme to pay a lower
level of deficit reduction contributions than under its previous
agreement over 2024, 2025 and 2026. This will result in a
short term cash saving to the Group of approximately £0.39m,
but does not alter the obligation upon the Company to fund the
scheme deficit.
As part of the agreement, the Company has committed to not
making dividend payments in respect of the 2023 and 2024
financial years
At 31 December 2023, the pension scheme deficit increased
by £0.28m to £5.77m (2022: £5.49m). This deterioration in the
pension scheme position outweighed the profit generated in
the year, decreasing the Group’s net assets to £4.2m (2022:
£4.3m). The worsened pension position was largely due to
decreases in the discount rate.
Recent Trading and Future Developments
Group sales in Q1 of 2024 against the same period in 2023
fell by 5%. This decline in sales and the inclusion of costs
associated with the retirement of Dominic Slingsby of £0.2m,
led to an unaudited loss before tax in Q1 2024 of £0.14m
compared to an unaudited profit before tax of £0.12m in the
same period in 2023.
The market remains competitive, and the Board is cautious
regarding the outlook. There remains uncertainty in the
economy due to the risk of a prolonged recession in the UK,
inflationary pressures (particularly in overhead costs) and the
impact on the supply chain from the situation in the Red Sea.
These pressures could result in a fall in demand for the Group’s
products.
The Group continues to invest in its digital market presence
and a new e-commerce platform for the Slingsby business will
launch during 2024. The Group also remains on the lookout for
appropriate acquisitions.
Finally, I would like to thank our staff across the Group for their
efforts in 2023. The Group has faced numerous challenges in
recent years which were overcome due to the positive attitude
and hard work of our employees.
A.J. Kitchingman
Non-Executive Chairman,
22 April 2024
4
Annual Report & Audited Financial Statements | 2023 Annual Report & Audited Financial Statements | 2023
5
5
Annual Report & Audited Financial Statements | 2023 Strategic Report
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 45,000
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 and the confidence
level of businesses.
Sales grew in 2022 by 8.8%, mainly due to the Group passing
on to customers cost price increases and increased by 5% in
2023 due partly to price increases and from the acquisition of
certain assets of Stakrak Limited on 1 April 2023. There remains
uncertainty in the economy due to the risk of recession in the
UK, inflationary pressures and the impact on the supply chain
from the situation in the Red Sea. This could further impact on
demand and lead to credit related issues should companies
become insolvent. The impact of inflation in the Group’s cost
of products and certain freight costs could also lead to a fall
in demand as these cost increases have resulted in increased
selling prices. Although, partly due to selling price increases,
gross margin increased from 34.6% to 35.9%, this was offset
by inflation in overhead costs. The Group had net assets at 31
December 2023 of £4.22m (2022: £4.32m) and net cash (after
overdraft balances included in trade and other payables) of
£0.21m (2022: £0.03m). The decline in net assets is mainly due
to an increase in the defined benefit pension deficit. The increase
in cash was due to EBITDA offsetting capital expenditure, the
costs of the acquisition of certain assets of the Stakrak business
and pension scheme deficit reduction payments.
The Group continues to build upon its strengths in distance
selling and to enhance its e-commerce offering. The acquisition
of the ESE brand in 2015 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 2023, we continued to invest
in improvements in the e-commerce platform for the Slingsby
business with a new website planned for launch during 2024,
and to strengthen our product sourcing and sales teams.
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. The main ways in which we do this are through
our experienced personnel, our broad-based product offering
where we ensure we offer a choice of options and price points
and through our web-based knowledge centre. Next day
delivery is offered on a substantial proportion of our lines to
further augment our service levels.
We continue to generate synergies following the acquisition of
ESE with the level of product sourced from Slingsby increasing
during the year.
The Directors believe that the Group’s strong core brand values
of quality, reliability, product range and service excellence
remain as true today as they have done over the past 130
years of trading, and this is recognised by the number of repeat
customers. We believe that this stronger focus on value, depth
of product offer and service is what differentiates our business.
Key Performance Indicators and Business Performance
Sales growth
Return on capital employed
Return on sales
Gross profit margin
2023
5.0%
8.4%
1.6%
35.9%
2022
8.8%
11.2%
2.2%
34.6%
Notes:
Return on capital employed is calculated as profit before taxation over the total equity at the year end. This has declined due to reduction in profit before tax due to the
increase in interest charges related to the defined benefit pension scheme and the reduction in total equity due to the increase in pension scheme deficit.
Return on sales is calculated as profit before taxation over revenue. This has declined due to the reduction in profit before tax due to the increase in interest charges related
to the defined benefit pension scheme. More information can be found as part of the Chairman’s statement.
A review of the business is included in the results section of the Statement by the Chairman on page 1 and forms part of the Strategic Report.
Principal risks
The Directors recognise that there are a number of risks that
may affect the performance of the business as described
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.
6
Annual Report & Audited Financial Statements | 2023 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, credit losses and a consequent loss of income for the
Group. The risk of recession in the UK, inflationary pressures
and the impact on the supply chain from the situation in the
Red Sea creates considerable uncertainty.
The Group regularly reviews its trading performance and the
short-term outlook such that the Board can take any mitigating
actions deemed necessary to address the impact of market
cycles and volatility.
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
continue to rise. The Board keeps these risks under regular
review and prepares profit and loss account and cashflow
forecasts as appropriate.
Regulatory
The Group has to comply with all relevant regulatory
requirements and the risk is that the Group may not comply with
the relevant requirements. The Group remains compliant with
all relevant regulatory requirements and monitors 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
The Group is committed to continuous improvement in both
Quality and Environmental Management, we remain UKAS (UK
Accreditation Service) accredited to the international standards
ISO 9001:2015 and ISO 14001:2015 respectively. The risk
is that the Group may fail to comply with the accredited
standards. In order to mitigate the risk, management review
their compliance with relevant accreditations.
Pensions
The Group has an obligation to fund its defined benefit pension
scheme (the “Scheme”) and this creates an exposure to interest
rates, inflation, investment return and the longevity of the plan
members. The risk is that the Group will not be able to fulfil its
responsibilities to the Scheme. 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 movements in the Group’s profits before tax, cash
flow and balance sheet.
The Group was scheduled to pay £418,000 in deficit reduction
contributions in 2024 but in March 2024 the Group agreed a
revised schedule of contributions with the Trustee as part of the
triennial scheme valuation as of 1 January 2023. The Company
will pay £150,000 in 2024, £350,000 in 2025, £400,000 in
2026 and £450,000 in 2027. Contributions will then rise each
year thereafter by 3%. The next triennial review as at 1 January
2026 and could result in a change to future contributions
following agreement between the Company and the Trustee.
The Group will also continue to contribute up to £0.16m each
year towards the Scheme’s running costs. The Scheme will
also receive 50% of any net cashflow generated by the Group
over £150,000. A payment in respect of 2023 of £14,500 is
anticipated to be paid during 2024.
As a condition of the above arrangement, the Group has
committed not to pay any dividends in respect of the 2023
and 2024 financial years and thereafter is restricted as to
the quantum of distributions to shareholders to an amount
not greater than £60,000 plus 50% of its net cashflow over
£150,000. The Group is obliged to consult with the Scheme’s
Trustee regarding certain other matters but is not obliged to
change its approach as a result.
Health and Safety and Environmental
Sustainability
The Group is subject to relevant regulations on the above
and there is a risk the Group may not comply with the
relevant requirements. 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.
In addition to statutory and regulatory compliance, the Group
takes pride in its environmental initiatives which have been
recognised through continued compliance with ISO14001
Environmental Management Standard.
Statement by the Directors in
Performance of their Statutory Duties in
Accordance with S172(1) Companies Act
2006
The board of directors of HC Slingsby PLC consider both
individually and together, that they have acted in the way they
consider in good faith, would be most likely to promote the
success of the Company for the benefit of its members as a
whole (having regard to the stakeholders and matters set out
in S172 (1)(a) to (f) of Companies Act 2006). These matters
are the likely consequences of any decision in the long term,
the interests of the Company’s workforce, the desirability of
the company maintaining a reputation for high standards of
business conduct, the need to foster the Company’s business
relationships with suppliers, customers and others, the impact
of the Company’s operations on the community and the
7
Annual Report & Audited Financial Statements | 2023 Strategic Report (continued)
environment and the need to act fairly, as between members of
the Company.
The Board considers its stakeholders to be its shareholders,
employees, customers, suppliers/creditors and the
environment. The way that the Company considers and
discharges its obligations in respect of S172 Companies Act
2006 in respect of its stakeholders can be found below, in the
Corporate Governance section of this annual report (pages 11
- 15) and above.
The Group culture is focussed upon achieving success
in the long term, working in a manner that benefits all our
stakeholders. The directors ensure that the Group’s business
strategy, governance framework, management information
flows and stakeholder engagement processes, reflect the long-
term impact of decisions they make.
The directors discharge their duties by
•
•
•
ensuring that they have the relevant experience and
competence to perform such duties and obligations
under applicable law and regulation and if appropriate
undertaking training
having processes to ensure the provision of timely
management information to the Board from key areas of
the business
agenda planning for Board and committee meetings to
provide sufficient time for the consideration and discussion
of key matters.
The Board promotes high standards of business conduct
recognising the desirability of maintaining the Group’s
reputation. This is communicated to the Group’s employees.
The Board and all employees expect to be judged by and be
held accountable for their actions. The Group has an internal
control framework that identifies risk factors which are regularly
monitored and reviewed.
The Board considers which course of action best enables
delivery of our strategy for the long term, taking into
consideration the impact on stakeholders. In doing so, the
directors act fairly as between the Group’s members.
Stakeholder Engagement
Shareholders
The major interests in the Company’s shares are set out in
the directors’ report. Key metrics for our shareholders are the
share price, earnings per share and the level of dividends paid.
Through the publication of our half and full year financial reports
and announcements we inform shareholders regarding the
status of their Company.
Further shareholder engagement includes the AGM and
discussions with investors when questions are asked.
Employees
The Board believes that the Group’s success is reliant on the
commitment of our employees and the directors’ consider the
implications of decisions made on them. We pride ourselves
on our friendly and safe working environment. Employee
feedback is sought through formal review processes and via
the head of each department. Training is provided where
necessary.
Customers and suppliers
The Board recognises that the Group depends on its
customers and its supply chain. Customer feedback is sought
through the use of a third party operated review service as well
as encouraged through other communication channels.
We regularly engage with suppliers through visits to their
facilities, holding presentations and training meetings between
suppliers and Group employees on our sites and via a formal
appraisal system.
Community and environment
The Group recognises its obligation to minimise its impact on
the environment and the need to consider its impact on the
communities in the areas in which it operates. This is achieved
by complying with the IS14001 environmental quality standard
and support of certain environmentally and community
focussed organisations such as sponsorship of the Yorkshire
and Norfolk Wildlife Trusts.
More information on how the Company considers and
discharges its obligations in respect of S172 Companies
Act 2006 in respect of its stakeholders can be found in the
Corporate Governance section of this annual report (pages
11 – 15) and in respect of the environment at the relevant
section above.
By order of the Board
M. L. Morris
Company Secretary
22 April 2024
8
Annual Report & Audited Financial Statements | 2023 Report of the Directors
Going Concern
The directors have prepared trading and cash flow forecasts for
the Group for the period to 31 December 2025, which include
the pension scheme contributions as agreed. These forecasts
indicate that the Group will be able to operate within its banking
facilities and meet its liabilities as they fall due. The Board’s
conclusion in this regard is strengthened by the Group’s net
cash position at 31 December 2023 of £0.21m (2022: £0.03m)
and availability of financing.
The overdraft element of the Group’s banking facilities is
undergoing its annual renewal at the level of £0.1m. Whilst
the Company’s overdraft at 31 December 2023 was £2.24m,
the Group has a mechanism whereby it can consolidate cash
holdings to ensure that it stays within the agreed overdraft
facility. The Directors consider this to be adequate given
the Group’s cash and other financing options particularly the
Group’s £2m invoice discounting facility.
The financial statements have therefore been prepared on a
going concern basis which assumes the Group will continue in
operation for the foreseeable future, as a minimum for a period
of at least 12 months from the date of approval of the financial
statements.
However, there remains uncertainty in the economy due to
the continuing conflict in the Ukraine, risk of a prolonged
recession in the UK, inflationary pressures (across both cost
of goods and overheads) and the impact on the supply chain
from the situation in the Red Sea. The impact could be from
a significant fall in demand, from customer credit losses (bad
debts) or from late customer payments. These would restrict
the Group’s ability to generate operating cashflow. The
directors have plans in place to mitigate these impacts should
the need arise.
The Directors are pleased to present their annual report and
audited consolidated financial statements for the year ended 31
December 2023. Future developments are considered in the
Statement by the Chairman on page 4 and below.
H C Slingsby plc is a public limited company (limited by
shares) with its ordinary shares traded on the AIM market of
the London Stock Exchange. It is incorporated and domiciled
in the United Kingdom with its registered office at Otley Road
Baildon, West Yorkshire BD17 7LW. The company is registered
in England and Wales with a registered number of 452716.
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: D. S Slingsby (resigned 11 March 2024)
D. S Slingsby (resigned 11 March 2024)
M. L. Morris
A. J. Kitchingman (appointed 12 September 2023)
Dividends
The Directors do not propose a dividend in respect of the 2023
financial year (2022:nil).
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
31 December
2023
1,000
51,167
105,489
2022
-
51,167
93,561
A.J. Kitchingman
D. S. Slingsby
M.L. Morris
There have been no changes in the directors’ shareholdings
between 31 December 2023 and 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 excludes a non-beneficial interest
of 64,000 (2022 64,000) ordinary shares.
9
Annual Report & Audited Financial Statements | 2023
Report of the Directors (continued)
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 19 April 2024:
Number of
ordinary Shares
of 25p each
Percentage
Holding
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 themselves
aware of any relevant audit information and to establish that the
Company’s auditors have been made aware of that information.
192,295
67,835
64,000
18.3%
6.5%
6.1%
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 11 - 15 of the
annual report.
Stakeholder Engagement
The Group’s statement on stakeholder engagement is included
in the Strategic Report.
Post Balance Sheet Event
On 11 March 2024, Dominic Slingsby stepped down from the
Board. Dominic remains an employee of the Group until his
retirement on 30 June 2024. As part of the Board change and
Dominic’s retirement, in addition to payment in relation to his 12
month notice period, the Company has agreed with Dominic
that he shall receive a payment of £60,000 and non-cash
benefits (principally in relation to the keeping of a Company car)
of a value of £15,500 from the Company under an employment
settlement agreement
By order of the Board
M. L. Morris
Company Secretary
22 April 2024
M. Chadwick*
K. J. Williams
J. S. Slingsby
Grandchildrens’ Trust
J. Crowther Jones &
Mr. T. E. Jones
J. H. Ridley
C. J. Slingsby
H. Padfield
H. Slingsby
(held by executors)
A. R. Morris
M. Miller†
P. S. Allen
S. Whittaker
54,866
5.2%
54,302
53,886
51,167
47,138
41,400
38,000
36,940
32,500
5.2%
5.1%
4.9%
4.5%
3.9%
3.6%
3.5%
3.1%
* Registered in the name of Davycrest and Goodbody Nominees
† Registered in the name of Platform Securities Nominees Limited
Financial Instruments
The Group’s financial instruments comprise cash, banking
facilities, 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 21
to the accounts.
Indemnification of Directors
The Company confirms that qualifying third party indemnity
insurance cover has been affected 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 remains in force.
10
Annual Report & Audited Financial Statements | 2023 Corporate Governance
HC Slingsby plc is committed to high standards of corporate
governance and has adopted the Corporate Governance Code
(“the QCA Code”) published by the Quoted Companies Alliance
in April 2018, a full version of which is available at http://
www.theqca.com. The Board explains below the extent of
compliance with the QCA Code.
The Board and Committee Meetings
The Board meets on a formal basis regularly and during 2023
there were five formal board meetings. All Directors attended
all five board meetings held during the year (or in the case
of Andrew Kitchingman the two meetings held following
his appointment in September 2023). There is a Schedule
of Matters specifically reserved for the Board’s decision,
which can be seen at www.slingsby.com; Investor Relations.
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.
As a Director and Company Secretary, M. L. Morris seeks
appropriate external advice should the need arise.
The Board comprises the following:
Andrew J. Kitchingman –
Non-Executive Chairman
Andrew Kitchingman joined the HC Slingsby plc board on 12
September 2023 as Non-Executive Chairman. He is Chairman
of the Company’s Remuneration and Audit Committees.
Andrew is Chairman of Mpac Group plc, a non-executive
Director of Andrews Sykes Group plc and Chair of the British
Board of Agrément. He is a Fellow of the Institute of Chartered
Accountants in England and Wales and formerly worked in
corporate finance for a number of firms, including KPMG, Hill
Samuel, Albert E Sharp, Brewin Dolphin and WH Ireland.
Andrew Kitchingman’s service agreement is for a fixed term of
one year with a one month notice period.
Dominic S. Slingsby –
Operations Director until 11 March 2024
Dominic joined the Group in 1982 and after an initial spell as a
Sales Representative became Marketing Manager in 1985. He
was appointed to the Board in 1990 and became Managing
Director in 1997 before taking the dual role of Interim Executive
Chairman (until 12 September 2023) and Operations Director.
He was a member of the Remuneration Committee and of the
audit committee (until the appointment of Andrew Kitchingman)
prior to his leaving the board on 11 March 2024.
Dominic Slingsby’s service agreement specifies a rolling 12
month notice period. On 12 March 2024, the Company
announced details of Dominic’s retirement, including an
employment settlement agreement.
Morgan L. Morris –
Group Chief Executive, Finance Director and Company
Secretary
Morgan joined the Board as Interim Finance Director in
February 2015 becoming Group Chief Executive in May 2018.
Previously Morgan was Finance and Commercial Director for
a speciality chemicals manufacturer and prior to that held the
position of Corporate Recovery Director for Ernst & Young, as
well as a range of Pan-European roles for Arthur Andersen.
Morgan holds a Business Finance & Economics degree, is
FCA qualified and is a licensed insolvency practitioner. He is a
member of the Audit and Remuneration Committees.
Morgan Morris’ service agreement specifies a rolling six month
notice period.
The Board are mindful of the need to keep skills and experience
up to date which is done through a combination of courses,
continuing professional development through professional
bodies, reading and on the job experience.
All directors are expected to devote such time as is necessary
for the proper performance of their duties. Directors are
expected to prioritise and attend Board meetings and
Committee meetings of which they are members and any
additional meetings wherever possible. After taking into
consideration the availability and time commitment demanded
of individual members, the Chairman was satisfied that the
members of the Board were able to devote sufficient time and
resource to perform their roles for the Group.
As noted in the Chairman’s statement in the 2022 annual
report, the Directors have continued their search for suitable
independent non-executive Directors to bring more balance to
the composition of the Board. In this respect, the Company
was pleased to announce the appointment of Andrew
Kitchingman to the Board on 12 September 2023 as Non-
Executive Chairman.
Audit Committee
The audit committee meets as required but at least twice a
year. In addition to reviewing the Annual and Interim Reports
prior to their release, it keeps the scope, cost effectiveness,
independence and objectivity of the external auditors under
review. This includes monitoring the level of non-audit fees.
The external auditors attend its meetings as required.
There were two audit committee meetings during 2023
attended by Dominic Slingsby and Morgan Morris.
During the year to 31 December 2023, the audit committee met
to review the Interim Report, the Annual Report, to consider
the suitability and monitor the internal control processes
and to review the financial procedures of the Company. The
audit committee reviews the findings of the external auditors
and reviews accounting policies and material accounting
judgements. The independence and effectiveness of the
external auditor is reviewed annually, and the audit committee
meets at least once per financial year with the auditors to
discuss their independence and objectivity, the Annual Report,
any audit issues arising, internal control processes, auditor
appointment and fee levels and other appropriate matters.
11
Annual Report & Audited Financial Statements | 2023 Corporate Governance (continued)
Remuneration Committee
The remuneration committee is responsible for determination
of the remuneration and remuneration policy for the Group’s
executive directors and senior executives setting the scale and
structure of such remuneration. Directors’ service agreements
and notice periods are reviewed with due regards to the
interests of shareholders.
There was one meeting of the remuneration committee during
2023 which was attended by Dominic Slingsby and Morgan
Morris.
During the year to 31 December 2023, the remuneration
committee provided a formal review of the remuneration of
the Executive Directors and senior employees and makes
recommendations to the Board on individual remuneration
packages. This includes the award of non-contractual
performance related bonuses and other incentives.
Remuneration packages are designed to reward, motivate,
retain and recruit individuals. Bonuses are only paid in
recognition of performance.
Relations with Shareholders
The Company is ready, where practicable, to enter into a
dialogue with institutional and other 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 Chief
Executive Officer, supported by the senior management with
responsibility for key operations.
The Chief Executive Officer is 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. In line with the Schedule of
Matters reserves for the Board, certain matters require approval
by the Board as a whole. This includes all significant capital
expenditure decisions, corporate and capital structure and
communications to shareholders.
The Board adopted the Quoted Companies Alliance Corporate Governance Code in 2018. The Board’s views on the extent of compliance
with the ten principles that comprise the QCA Code, together with an explanation of any areas of non-compliance are set out below:
Principle
Establish a strategy
and business model
which promote
long term value for
shareholders
Seek to understand
and meet shareholder
needs and
expectations
Extent of current
compliance
Compliant
Compliant
Compliant
Take into account
wider stakeholder and
social responsibilities
and their implications
for long term success
Further
disclosure(s)
Strategic Report
section of the 2023
Annual Report
www.slingsby.com;
Investor Relations,
AGM notices,
Relations with
Shareholders section
above.
www.slingsby.
com; Investor
Relations, Corporate
Governance
Commentary
The relevant information concerning the Group’s business model
and strategy can be found in the Strategic Report within the 2023
Annual Report.
Key risks and mitigating actions are detailed in the Principal Risks
section of the Strategic Report within the 2023 Annual Report.
The Company’s contact details are displayed on its website
allowing shareholders to contact the Company if they so
wish. The Company holds an annual general meeting to
which all members are invited and during which, time is set
aside to allow questions from attending members to any
board member. As the Company is small, it does not have a
dedicated investor relations department and so the Chairman
and CEO are responsible for shareholder liaison and reviewing
all communications received from members and determining
the most appropriate response. The Directors believe that these
methods of shareholder engagement are sufficient to support
the Company’s aims in meeting their needs and expectations.
Directors and employees adopt a broad view during decision
making to take meaningful account of the impact of the
business on all key stakeholder groups. The Board recognises
that the Group’s long term success is reliant on the efforts of its
employees, customers and suppliers and through maintaining
relationships with its regulators. Feedback from employees,
customer groups, suppliers and others is actively encouraged.
Customer feedback is obtained from a third party operated
review system. Employees have reviews with their line manager
and are encouraged to provide feedback. Employees are
also encouraged to express any concerns to the Board or
the Human Resources Manager. All feedback is reviewed by
the Board and acted upon accordingly. However, no material
changes to the Company’s working processes were required
over the year to 31 December 2023, or more recently, as a
result of stakeholder feedback received by the Company.
12
Annual Report & Audited Financial Statements | 2023 Extent of current
compliance
Compliant
Principle
Embed effective
risk management,
considering both
opportunities and
threats, throughout
the organisation
Maintain the board
as a well-functioning,
balanced team led by
the chair
Partially compliant
Compliant
Ensure that
between them the
directors have the
necessary up-to date
experience, skills and
capabilities
Commentary
The Group operates a system of internal controls designed (to
the extent considered appropriate) to safeguard Group assets
and protect the business from identified risks, including risk to
reputation.
As well as tight oversight exercised by the executive directors,
and appropriate trained and qualified staff, the Board engages
appropriate auditors and consultants to assist in identifying
and managing risk. The Board obtains assurance that risk
management processes and related control systems in place
are effective via a review of the Group’s internal risk register
at Board meetings. The Board assess the register for any
potential emerging risks and ensures appropriate controls are
in place to mitigate against such risks should they arise.
The Board currently comprises one Executive Director and an
Independent Non-Executive Chairman who receive high quality
information in a timely manner to facilitate proper assessment of
the matters requiring a decision or insight.
The Board’s current composition, given that the Board only has
one independent non-executive director, represents a departure
from the recommendation in the QCA Code which states that
a board should have at least two independent non-executive
directors.
The Board has been seeking the appointment of Non-Executive
Directors for some time, although historically the Company’s very
significant pension deficit and the highly publicised issues facing
directors of public companies with a deficit on its pension fund,
previously deterred candidates from accepting such a role. As
stated in the 2023 Annual Report, it was the Board’s intention to
appoint at least one independent Non-Executive Director at the
earliest opportunity. In this respect, the Company was pleased to
announce the appointment of Andrew Kitchingman to the Board
on 12 September 2023 as Independent Non-Executive Chairman.
The Board intends to appoint an additional independent Non-
Executive Director in due course.
The Corporate Governance section of the Annual report details the
number of meetings of the Board (and any committees) during the
2023 year, together with the attendance record of each director.
Also described is the time commitment required from directors
over 2023.
The Board is satisfied that the current composition provides the
required degree of skills, experience, diversity and capabilities
appropriate to the needs of the business. Steps are taken to
challenge the status quo, and encourage proper consideration
of any dissenting opinion. Board composition and succession
planning are subject to review taking account of the potential future
needs of the business.
The Board has not taken any specific external advice on a matter,
other than in the normal course of business as an AIM quoted
company and other than in respect of the Company’s defined
benefit pension scheme. The Directors rely on the Company’s
advisory team to keep their skills up to date and through attending
market updates and other seminars provided by the advisory team,
the London Stock Exchange and other intermediaries.
Further
disclosure(s)
Principal Risks section
of the Strategic
Report within the
2023 Annual Report
Statement by the
Chairman, Board
and Committee
meetings section
of the Corporate
Governance report
within the 2023
Annual Report
Board and Committee
meetings section
of the Corporate
Governance report
within the 2023
Annual Report
13
Annual Report & Audited Financial Statements | 2023 Extent of current
compliance
Partially compliant
Principle
Evaluate board
performance
based on clear and
relevant objectives,
seeking continuous
improvement
Promote a corporate
culture that is based
on ethical values and
behaviours
Compliant
Further
disclosure(s)
None.
www.slingsby.com;
Investors Relations,
Corporate
Governance
Commentary
Given its size and composition and the difficulties in obtaining
Directors’ and Officers’ insurance cover in respect of claims
relating to its pension scheme, which had deterred previously
suitable independent non-executive director candidates, in
2023 and previously Board evaluation has not been carried
out as part of a formal process, although self-evaluation by all
Board members, and feedback on the conduct and content of
board meetings and the audit and remuneration committees
was actively encouraged. Succession planning for the Board
and other senior management appointments is considered as
part of the above evaluation process, although the Directors
believe that the Company has planned sufficiently for its
succession planning needs in the medium-term. This process is
generally unchanged from the recent previous years.
Aside from the identified need for the appointment of
independent non-executive directors, so as to seek to satisfy
the recommendation in the QCA Code that a board should
have at least two independent non-executive directors,
during the year ended 31 December 2023, the Board’s
informal assessment did not find any shortcoming in Board
or committee effectiveness and did not lead to any material
recommendations for any changes.
The Board intends that a more structured performance review
system will exist in the future, following the appointment of an
independent non-executive Chairman in September 2023.
The Board promotes high ethical and moral standards. The Board
and all employees expect to be judged by, and accountable
for their actions. The employment handbook contains relevant
information.
It is the Board’s view that the Company’s corporate culture is
consistent with its objectives, strategy and business model.
A large part of the Company’s activities is centred upon what
needs to be an open and respectful dialogue with employees,
customers and other stakeholders. Therefore, the importance of
sound ethical values and behaviours is crucial to the ability of the
Company to successfully achieve its corporate objectives.
The Board has adopted an employment handbook which
provides a framework for ethical decision-making and actions
across the Group. The employment handbook reiterates the
Group’s commitment to integrity and fair dealing in its business
affairs and its duty of care to all employees, contractors and
stakeholders. The Board are prepared to take appropriate action
against unethical behaviour, violation of company policies or
misconduct.
The Board are also informed of any material enquiries from
employees through site managers and when necessary the Chief
Executive Officer is available to employees on a direct enquiry
basis.
The Company is committed to providing a safe environment for
its staff and all other parties for which the Company has a legal or
moral responsibility in this area.
14
Annual Report & Audited Financial Statements | 2023 Further
disclosure(s)
Board and Committee
meetings section
of the Corporate
Governance report
within the 2023
Annual Report
www.slingsby.com;
Investor Relations
and
Board and Committee
meetings section
of the Corporate
Governance report
within the 2023Annual
Report
Commentary
A Corporate Governance statement was included in the Report
& Accounts for the year ended 31 December 2023, which
includes disclosures in relation to the QCA Code and details of
the Company’s governance structures, including information
about the Audit Committee and Remuneration Committee.
Given the current size and scale of the Company’s current
operations and its Board, the Company does not publish the
full terms of reference of these committees.
The audit committee comprises Morgan Morris and Andrew
Kitchingman who is chair.
The remuneration committee comprises Morgan Morris and
Andrew Kitchingman who is chair. Morgan Morris and Andrew
Kitchingman recuse themselves from committee meetings as
regards their own remuneration.
The Company does not have a nomination committee, as
the need for appointments and decisions regarding Director
appointments are considered by the Board as a whole.
The Board currently comprises one Executive Directors and an
independent non-executive chairman. The Board is therefore
currently non-compliant with the recommendation in the QCA
Code that a board should have at least two independent non-
executive directors. The Company is seeking appropriate
further non executive director candidates to join the Board, as
part of its planned evolution of its governance framework and
its committees.
The roles of Chairman and Chief Executive are separated.
The Chief Executive is responsible for the operating
performance of the Company and its subsidiaries, whilst the
Chairman is responsible for the running of the Board.
Details of the Schedule of Matters specifically reserved for the Board’s
decision can be found at www.slingsby.com; Investor Relations.
The Board attaches great importance to providing shareholders
with clear and transparent information on the Group’s activities
and strategy. Details of all shareholder communications are
provided on the Company’s website, including historical annual
reports and governance related material together with notices of
all general meetings for the last five years.
From 2019 the Company discloses outcomes of all general
meeting votes. Where a significant proportion of votes (e.g. 20%
of independent votes) have been cast against a resolution at
any general meeting, the Board will post this on the Company’s
website and will include, on a timely basis, an explanation of what
actions it intends to take to understand the reasons behind that
vote result, and, where appropriate, any different action it has
taken, or will take, as a result of the vote.
The Company lists contact details on its website and on all
announcements released via RNS, should shareholders wish to
communicate with the Board.
The Company’s Remuneration Committee does not produce a
public report on its work over the year, although details in relation
to the Remuneration Committee can be found in the Corporate
Governance report within the 2023 Annual Report and below and
details of the directors’ remuneration can be found in note 5 of the
2023 Annual Report.
The Company’s Audit Committee does not produce a public
report on its work over the year, as any key findings are instead
considered by the Board. Details of the ‘key audit matters’, as
determined by the Company’s auditor, RSM UK Audit LLP, can be
found in the Independent Auditors’ Report to the Members of H C
Slingsby plc in the 2023 Annual Report.
The outcomes of historical AGMs and GMs can be viewed on the company
website as well as RNS announcements made by the Company.
Extent of current
compliance
Non-compliant
Principle
Maintain governance
structures and
processes that
are fit for purpose
and support good
decision-making by
the board
Compliant
Communicate
how the company
is governed and
is performing by
maintaining a dialogue
with shareholders
and other relevant
stakeholders
On behalf of the Board
Andrew J. Kitchingman
Non-Executive Chairman
22 April 2024
15
Annual Report & Audited Financial Statements | 2023 Statement of Directors’ Responsibilities
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 requirements of 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 corporate and financial information included on the H C
Slingsby Plc 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
22 April 2024
The Directors are responsible for preparing the Strategic
Report, 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 have elected under company law and are required
by the AIM Rules of the London Stock Exchange to prepare
group financial statements in accordance with UK adopted
international accounting standards and have elected under
company law to prepare the company financial statements
in accordance with UK adopted international accounting
standards and applicable law.
The group and company financial statements are required
by law and UK adopted international accounting standards
to present fairly the financial position of the group and the
company and the financial 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
UK adopted international accounting standards;
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.
16
Annual Report & Audited Financial Statements | 2023 Independent Auditors’ Report to the
Members of H C Slingsby plc
Summary of our audit approach
Key audit
matters
Group and parent company
• Inventory Valuation / Obsolescence
Materiality
Provision
• Retirement Benefit Liability
Group
• Overall materiality: £84,000
(2022: £80,000)
• Performance materiality: £63,000
(2022: £60,000)
Parent Company
• Overall materiality: £56,000
(2022: £60,000)
• Performance materiality: £42,000
(2022: £45,000)
Scope
Our audit procedures covered 100% of
revenue, total assets and of profit before tax.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the group
and parent company financial statements of the current period
and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on the overall
audit strategy, the allocation of resources in the audit and
directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the group and
parent company financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Opinion
We have audited the financial statements of H C Slingsby
plc (the ‘parent company’) and its subsidiaries (the ‘group’)
for the year ended 31 December 2023 which comprise
the Consolidated Income Statement, the Statement of
Consolidated Comprehensive Income, the Statement of
Consolidated and Company Changes in Shareholders’ Equity,
the Consolidated Balance Sheet, the Company Balance
Sheet, the Consolidated Cash Flow Statement, the Company
Cash Flow Statement, the Note to the Cash Flow Statements
and Notes to the financial statements, including significant
accounting policies. The financial reporting framework that
has been applied in their preparation is applicable law and
UK-adopted International Accounting Standards and, as
regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state
of the group’s and of the parent company’s affairs as at 31
December 2023 and of the group’s profit for the year then
ended;
the group financial statements have been properly prepared
in accordance with UK-adopted International Accounting
Standards;
the parent company financial statements have been properly
prepared in accordance with UK-adopted International
Accounting Standards 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.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the
group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
17
Annual Report & Audited Financial Statements | 2023 Independent Auditors’ Report to the Members of H C Slingsby plc
(continued)
Inventory Valuation / Obsolescence Provision
Key audit matter
description
At 31 December 2023, the Group and parent company balance sheet records inventory of £2,643k (2022:
£2,683k). This amount is net of an inventory provision of £891k (2022: £773k). Further details on the
inventory can be found in Note 16.
Given the type of industry which the group operates within, inventory items can be seasonal or change
with current trends. We consider a significant risk exists in respect of the inventory provision based on
the ability to sell inventory based on the aforementioned factors and have therefore determined that the
inventory provision is a key audit matter.
Management have historically adopted a mechanical approach to the level of provisioning applied based
on the ageing of inventory and its last movements.
As described in note 1 to the financial statements, management have calculated an inventory provision
considering the condition of inventory, its age, and future saleability. The inventory provisioning process
involves significant elements of judgement and estimate, including in respect of:
• the % of provision applied to different categories of aged inventory; and,
• assumptions surrounding the future saleability of inventory.
How the matter was
addressed in the
audit
In respect of the inventory valuation / obsolescence provision we:
• Assessed the appropriateness of managements inventory provision calculations, including testing the accuracy
of data used and the mathematical accuracy of the provisioning model.
• Discussed the basis of the provision with management to understand rationale, key supporting information,
and any changes in method relative to prior periods.
• Assessed the accuracy of the prior year provision by considering information from the current year to
determine if the provision was reasonable.
• Undertook sensitivity analysis on the key inputs to the model/workings after obtaining detailed inventory
reporting information from management.
• Used data analytic tools to assess the sale of inventory in both the year and post year end to assess if
inventory has been sold at below cost in the periods assessed.
• Reviewed the level of sales of inventory product lines over a three-year period to ascertain the last sale date of
inventory and inventory which has not been sold within the assessed period.
As a result of our findings, we developed an auditor’s point estimate, considering historical and current
experiences seen by the Group, and expected future trends. Our point estimate was not materially
different to that of managements estimate which allowed us to assess the accuracy and reasonableness
of managements provision.
Retirement Benefit Liability
Key audit matter
description
How the matter was
addressed in the
audit
The group and parent company has a retirement benefit liability of £5,772k at 31 December 2023 (2022:
£5,493k) which is the largest item on the consolidated and parent balance sheet.
As disclosed in the accounting policies, the retirement benefit liability is the present value of the defined
benefit obligation less the fair value of the scheme assets.
As disclosed in note 1 and note 23, the valuation of this obligation is based on a number of assumptions
including the expectation of future changes in inflation, mortality, and discount tables. The amount
recognised is based on a valuation undertaken by an actuary, who also provides the information relevant
to the disclosures for inclusion in the financial statements, including an estimate of Guaranteed Minimum
Pension (GMP) equalisation costs.
The retirement benefit liability is highly sensitive to changes in respect of the inputs of the actuarial
calculation. Because of the risk that small changes in the inputs could have a material impact on the
financial statements, we considered a significant risk to exist and have therefore determined that the
inventory provision is a key audit matter.
In respect of the retirement benefit liability we:
• Obtained and reviewed a copy of the IAS 19 actuarial valuation prepared by management’s actuary and
undertook procedures to determine our ability to rely on their work. As part of this work, we utilised an auditor’s
expert in the form of an independent actuary to assist us in assessing the assumptions and judgements used
by management’s actuary.
• Challenged management on the assumptions used by the actuary in preparing the IAS19 valuation and
considering whether they were consistent with the instructions given by management. Our challenge included,
where possible, comparing the key estimates and judgements to those used in actuarial valuations for other
similar businesses.
• Obtained evidence in respect of all key elements of the actuarial valuation, including the value of scheme
assets, the defined benefit obligation, net interest expenses, benefit payments and employer contributions.
• Reviewed the disclosures in the financial statements to assess whether they are consistent with the actuary’s
report and the requirements of IAS 19 (the relevant financial reporting framework).
18
Annual Report & Audited Financial Statements | 2023 Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of
our audit procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements as a
whole, could reasonably influence the economic decisions of the users we take into account the qualitative nature and the size of
the misstatements. Based on our professional judgement, we determined materiality as follows:
Overall materiality
£84,000 (2022: £80,000)
Group
Parent company
£56,000 (2022: £60,000)
Basis for determining
overall materiality
7.3% of profit before interest, depreciation,
amortisation and one-off management
restructuring costs.
7.3% of profit before interest, depreciation,
amortisation and one-off management
restructuring costs.
Rationale for
benchmark applied
The adjusted measure has been selected on the
basis that it is of the most relevance to the users
of the financial statements and excludes the
impact of management restructuring costs.
The adjusted measure has been selected on the
basis that it is of the most relevance to the users
of the financial statements and excludes the
impact of management restructuring costs.
Performance materiality
£63,000 (2022: £60,000)
Basis for determining
performance materiality
75% of overall materiality
£42,000 (2022: £45,000)
75% of overall materiality
Reporting of
misstatements to the
Audit Committee
Misstatements in excess of £2,100 and
misstatements below that threshold that, in our
view, warranted reporting on qualitative grounds.
Misstatements in excess of £1,400 and
misstatements below that threshold that, in our
view, warranted reporting on qualitative grounds.
A specific performance materiality was applied to accruals balances for the group and parent company which was set at 50% of
performance materiality being £31,500 and £21,000 respectively. This was a targeted response in relation to findings we identified in
the previous year’s audit.
An overview of the scope of our audit
The group consists of 2 components, all of which are based in the UK.
The coverage achieved by our audit procedures was:
Number of components Revenue
Total assets
Profit before tax
Full scope audit
Specific audit
procedures
Total
2
-
2
100%
-
100%
100%
-
100%
100%
-
100%
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s
and parent company’s ability to continue to adopt the going
concern basis of accounting included reviewing and evaluating
management’s latest forecasts and plans, considering the
appropriateness and sensitivity of the key assumptions, and
reviewing the key terms of borrowing facilities. These forecasts
are prepared in respect of the period to 31 December 2025. At
31 December 2023, the Group had cash and cash equivalent
balances of £2,449k (2022: £2,243k) and net cash and cash
equivalent balances of £205k (2022: £26k). Factoring in
downside scenarios which take account of lower than forecast
sales, management’s forecasts indicate a net positive cash
position at the end of the forecast period.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s or the parent company’s ability to continue as a going
concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
Other information
The other information comprises the information included in
the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the
other information contained within the annual report. Our opinion
on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit or otherwise appears to be
materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact.
We have nothing to report in this regard.
19
Annual Report & Audited Financial Statements | 2023 Independent Auditors’ Report to the Members of H C Slingsby plc
(continued)
Opinions on other matters prescribed by
the Companies Act 2006
In our opinion, based on the work undertaken in the course of
the audit:
•
•
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
the Strategic Report and the Directors’ Report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to
report by exception
In the light of the knowledge and understanding of the group
and the parent company and their environment obtained
in the course of the audit, we have not identified material
misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in
relation to which 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.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 16, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of
the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
The extent to which the audit was
considered capable of detecting
irregularities, including fraud
Irregularities are instances of non-compliance with laws and
regulations. The objectives of our audit are to obtain sufficient
appropriate audit evidence regarding compliance with laws and
regulations that have a direct effect on the determination of
material amounts and disclosures in the financial statements,
to perform audit procedures to help identify instances of non-
compliance with other laws and regulations that may have a
material effect on the financial statements, and to respond
appropriately to identified or suspected non-compliance with
laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify
and assess the risk of material misstatement of the financial
statements due to fraud, to obtain sufficient appropriate audit
evidence regarding the assessed risks of material misstatement
due to fraud through designing and implementing appropriate
responses and to respond appropriately to fraud or suspected
fraud identified during the audit.
However, it is the primary responsibility of management, with
the oversight of those charged with governance, to ensure that
the entity’s operations are conducted in accordance with the
provisions of laws and regulations and for the prevention and
detection of fraud.
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud, the audit engagement
team:
•
•
•
obtained an understanding of the nature of the industry
and sector, including the legal and regulatory framework
that the group and parent company operate in and how
the group and parent company are complying with the
legal and regulatory framework;
inquired of management, and those charged with
governance, about their own identification and assessment
of the risks of irregularities, including any known actual,
suspected or alleged instances of fraud; and
discussed matters about non-compliance with laws
and regulations and how fraud might occur including
assessment of how and where the financial statements
may be susceptible to fraud.
20
Annual Report & Audited Financial Statements | 2023 The most significant laws and regulations were determined as follows:
Legislation / Regulation
Additional audit procedures performed by the Group audit engagement team included:
IFRS/UK-adopted IAS and
Companies Act 2006
• Review of the financial statement disclosures and testing to supporting documentation.
• Completion of disclosure checklists to identify areas of non-compliance.
Tax compliance
regulations
Inspection of advice received from external tax advisors where available.
Inspection of correspondence with local tax authorities where available.
•
•
• Consideration of whether any matter identified during the audit required reporting to an
appropriate authority outside the entity.
We have identified no indirect laws and regulations which we believe would have a material impact on the financial statements.
The areas that we identified as being susceptible to material misstatement due to fraud were:
Risk
Audit procedures performed by the audit engagement team:
Revenue recognition –
Cut Off
• Documenting and reconfirming our understanding of the processes, systems and controls in
place relating to the revenue transaction cycle;
• Considering the appropriateness of the revenue recognition accounting policy in the context
of our understanding of the business and re-evaluated whether the revenue recognition policy
is consistently applied to revenue transactions around the financial year end; and
• Performing substantive revenue cut off testing on transactions around the year end to test
whether sales have been recorded in the correct period based on the date that the risks and
rewards of ownership transfer to the customer.
Management override of
controls
•
Testing the appropriateness of journal entries and other adjustments on risk criteria and
comparing the identified entries to supporting documentation;
• Assessing whether the judgements made in making accounting estimates are indicative of a
•
potential bias; and
Evaluating the business rationale of any significant transactions that are unusual or outside
the normal course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
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.
Andrew Allchin FCA
(Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants, Central Square, Fifth Floor,
29 Wellington Street, Leeds LS1 4DL
22 April 2024
21
Annual Report & Audited Financial Statements | 2023 Consolidated Income Statement
For the year ended 31 December 2023
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Operating profit
Finance income
Finance costs
Profit before taxation
Taxation
Profit for the year attributable to owners of the parent
Basic and diluted weighted average earnings per share
All profits of the group arise from continuing operations.
Note
2
5
6
7
8
9
2023
£’000
22,642
(14,511)
8,131
(5,078)
(2,423)
630
12
(285)
357
(124)
233
2022
£’000
21,564
(14,108)
7,456
(4,443)
(2,386)
627
-
(142)
485
(105)
380
22.2p
36.2p
22
Annual Report & Audited Financial Statements | 2023
Statement of Consolidated
Comprehensive Income
For the year ended 31 December 2023
Profit 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
Other comprehensive (expense)/income
Total comprehensive (expense)/income for the year attributable to equity
shareholders
All total comprehensive income of the Group arise from continuing operations.
Note
23
15
2023
£’000
233
(408)
102
(306)
(73)
2022
£’000
380
2,235
(559)
1,676
2,056
23
Annual Report & Audited Financial Statements | 2023
Statement of Consolidated and
Company Changes in Shareholders’
Equity
For the year ended 31 December 2023
Group
1 January 2022
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
1 January 2023
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
31 December 2023
Company
1 January 2022
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
1 January 2023
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
31 December 2023
Share capital
£’000
262
-
-
-
262
-
-
-
262
Share
premium
£’000
24
-
-
-
24
-
-
-
24
Retained
earnings
Total equity
£’000
1,977
380
1,676
2,056
4,033
233
(306)
(73)
3,960
£’000
2,263
380
1,676
2,056
4,319
233
(306)
(73)
4,246
Share capital
Share
premium
Retained
earnings
Total equity
£’000
£’000
262
-
-
-
262
-
-
-
262
24
-
-
-
24
-
-
-
24
£’000
544
157
1,676
1,833
2,377
22
(306)
(284)
2,093
£’000
830
157
1,676
1,833
2,663
22
(306)
(284)
2,379
24
Annual Report & Audited Financial Statements | 2023 Consolidated Balance Sheet
As at 31 December 2023
Assets
Non-current assets
Property, plant and equipment
Other intangible assets
Goodwill
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Liabilities
Current liabilities
Trade and other payables
Derivative financial liability
Lease obligations
Net current assets
Non-current liabilities
Lease obligations
Retirement benefit obligation
Deferred tax liabilities
Net assets
Capital and reserves
Share capital
Share Premium
Retained earnings
Total equity
Note
2023
£’000
2022
£’000
12
13
13
15
16
17
18
19
20
20
23
15
24
24
24
5,355
293
700
1,443
7,791
5,418
249
700
1,373
7,740
2,643
2,683
2,961
2,962
2,449
8,053
2,243
7,888
(5,043)
(5,007)
(2)
(21)
-
(20)
(5,066)
(5,027)
2,987
2,861
(92)
(5,772)
(668)
4,246
262
24
3,960
4,246
(113)
(5,492)
(677)
4,319
262
24
4,033
4,319
The financial statements on pages 22 to 53 were approved by the Board of Directors on 22 April 2024 and were signed on its behalf
by:
M. L. Morris
Director
H C Slingsby plc
Registered Number: 00452716
25
Annual Report & Audited Financial Statements | 2023 Company Balance Sheet
As at 31 December 2023
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
Liabilities
Current liabilities
Trade and other payables
Derivative financial liability
Net current assets
Non-current liabilities
Retirement benefit obligation
Deferred tax liabilities
Net assets
Capital and reserves
Share capital
Share premium
Retained earnings
Total equity
Note
2023
£’000
2022
£’000
12
13
14
15
16
17
18
19
23
15
24
24
24
5,241
168
1,517
1,443
8,369
2,643
2,602
5,278
24
1,517
1,373
8,192
2,683
2,495
180
223
5,425
5,401
(5,000)
(2)
(5,002)
423
(5,772)
(641)
2,379
262
24
2,093
2,379
(4,811)
-
(4,811)
590
(5,492)
(627)
2,663
262
24
2,377
2,663
As permitted by Section 408 of the Companies Act 2006, the company has not published its own income statement. The profit of the
Company for the financial year was £22,000 (2022: £157,000).
The financial statements on pages 22 to 53 were approved by the Board of Directors on 22 April 2024 and were signed on its behalf by:
M. L. Morris
Director
H C Slingsby plc
Registered Number: 00452716
26
Annual Report & Audited Financial Statements | 2023 Consolidated Cash Flow Statement
For the year ended 31 December 2023
Cash flows from operating activities
Cash generated from/ (used in) operations
Interest paid
UK corporation tax paid
Cash generated from/ (used in) operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities
Cash flows from financing activities
Capital element of lease payments
Increase in overdraft
Net cash generated from / (used in) financing activities
Net increase in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
Note
12
5
13
20
2023
£’000
656
(1)
(114)
541
12
(201)
23
(170)
(336)
(26)
27
1
206
2,243
2,449
2022
£’000
(27)
-
(49)
(76)
-
(211)
24
(22)
(209)
(35)
564
529
244
1,999
2,243
Cash and cash equivalents included above is the gross value and does not included amounts due in relation to the bank overdraft of
£2.24m (2022: £2.22m) in the values presented above.
27
Annual Report & Audited Financial Statements | 2023 Company Cash Flow Statement
For the year ended 31 December 2023
Cash flows from operating activities
Cash generated from/ (used in) from operations
Interest paid
UK corporation tax paid
Cash generated from/ (used in) operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Net cash used in investing activities
Cash flows from financing activities
Increase in overdraft
Net cash generated from financing activities
Net (decrease)/increase in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
Note
12
5
13
2023
£’000
293
(1)
(30)
262
12
(197)
23
(170)
(332)
27
27
(43)
223
180
2022
£’000
(255)
-
-
(255)
-
(209)
24
(22)
(207)
564
564
102
121
223
Cash and cash equivalents included above is the gross value and does not included amounts due in relation to the bank overdraft of
£2.24m (2022: £2.22m) in the values presented above.
28
Annual Report & Audited Financial Statements | 2023 Note to the Cash Flow Statements
For the year ended 31 December 2023
Cash generated from operating activities
Profit before tax
Net finance costs
Depreciation and amortisation
Defined benefit pension scheme contributions paid
Profit on sale of property, plant and equipment
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated from/ (used in) operating activities
Group
Company
2023
£’000
357
273
390
(405)
(23)
40
1
23
656
2022
£’000
485
142
464
(352)
(24)
(353)
(192)
(197)
(27)
2023
£’000
76
266
260
(405)
(23)
40
(107)
186
293
2022
£’000
222
141
299
(352)
(24)
(353)
(23)
(165)
(255)
29
Annual Report & Audited Financial Statements | 2023 Notes to the Accounts
1. Accounting Policies
Basis of Preparation
H C Slingsby plc is a public limited company (limited by shares)
with its ordinary shares traded on the AIM market of the London
Stock Exchange. It is incorporated and domiciled in the United
Kingdom with its registered office at Otley Road Baildon, West
Yorkshire BD17 7LW. The company is registered in England and
Wales with a registered number of 452716.
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 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
UK adopted international accounting standards. 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.
Going concern
The directors have prepared trading and cash flow forecasts for
the Group for the period to 31 December 2025, which include
the pension scheme contributions as agreed. These forecasts
indicate that the Group will be able to operate within its banking
facilities and meet its liabilities as they fall due. The Board’s
conclusion in this regard is strengthened by the Group’s net
cash position at 31 December 2023 of £0.21m (2022: £0.03m)
and availability of financing.
The overdraft element of the Group’s banking facilities is
undergoing its annual renewal at the level of £0.1m. Whilst
the Company’s overdraft at 31 December 2023 was £2.24m,
the Group has a mechanism whereby it can consolidate cash
holdings to ensure that it stays within the agreed overdraft
facility. The Directors consider this to be adequate given
the Group’s cash and other financing options particularly the
Group’s £2m invoice discounting facility.
The financial statements have therefore been prepared on a
going concern basis which assumes the Group will continue in
operation for the foreseeable future, as a minimum for a period
of at least 12 months from the date of approval of the financial
statements
New accounting standards and interpretations
The Group and Company financial statements have been prepared in accordance with UK Adopted International Accounting
Standards and IFRS Interpretations Committee (IFRIC) effective as at 31 December 2023. The Group and Company have not
chosen to adopt any amendments or revised standards early.
Where applicable, the following amendments to accounting standards were adopted by the Group on the effective date during the
current year, but have not had any material impact on the amounts reported in these financial statements. The Group has applied
these standards in the preparation of the financial statements and has not adopted any new or amended standards early.
• Amendments to IFRS 17 – Insurance contracts
• Amendments to IFRS 17 – Initial application of IFRS 17 and IFRS 9 – comparative information
• Amendments to IAS 1 and IFRS practice statement 2 – Disclosure of accounting policies
• Amendments to IAS 8 – Definition of accounting estimates
• Amendments to IAS 12 – Deferred tax related assets and liabilities arising from a single transaction
• Amendments to IAS 12 – International tax reform – pillar two model rules
Standards issued but not yet effective
Any new or amended Accounting Standards or interpretations that are not yet mandatory (and in some cases, had not yet been
endorsed by the UK Endorsement Board) have not been early adopted by the Group for the year ended 31 December 2023. They
are as follows:
• Amendments to IAS 1 – Classification of liabilities as current or non-current
• Amendments to IAS 1 – Non-current liabilities with covenants
• Amendments to IFRS 16 – Lease liability in a sale and leaseback
• Amendments to IAS 7 and IFRS 7 – Supplier finance arrangements
• Amendments to IAS 21 – Lack of exchangeability
• Amendments to IFRS 10 and IAS 28 – Sale or contribution of assets between an investor and its associate or joint venture
The directors do not expect that the adoption of these Standards or Interpretations in future periods will have a material impact on
the financial statements of the Company or the Group.
30
Annual Report & Audited Financial Statements | 2023 Basis of Consolidation
The financial statements of the Group consolidate the financial
statements of H C Slingsby plc and its subsidiaries up to 31
December 2023 using the acquisition method of accounting.
Subsidiaries are entities over which the Group has the power
to govern the financial and operating policies and is exposed
to, or has rights to, variable returns. The results of subsidiary
undertakings acquired during a financial period are included
from the date on which control is transferred to the group.
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 entity. 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.
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.
The estimates and judgements made in the process of applying the
Group’s accounting policies that have the most significant effect on
the amount recognised in the financial statements and the estimates
and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the
next financial year are addressed below.
Estimates and judgements with significant effect on the financial
statements:
•
Impairment of goodwill and intangible assets. The
Directors review whether goodwill is impaired on an annual
basis which requires an estimation of the value in use of
the cash generating units to which the goodwill, and any
intangible assets, are allocated. This involves estimation
of future cash flows and choosing a suitable discount rate
(see note 13 for further disclosure). As disclosed in note
13, the results for the year ended 31 December 2023
include an impairment charge of £nil (2022: £nil).
• Actuarial assumptions used in the calculation of the
defined benefit pension scheme liability. Measurement
of the defined benefit pension obligations requires
estimation of future changes in salaries and inflation, as
well as mortality rates, and the selection of a suitable
discount rate. Defined benefit pension obligations at the
reporting date were valued at £5.8m (2022: £5.5m). This
movement was due to the impact of changes in actuarial
assumptions. See note 23 for further information.
• Allowances against the valuation of inventories.
Inventories are stated at the lower of cost and net
realisable value. When estimating the net realisable
value of inventories, management considers the nature
and condition of inventory, its age, as well as applying
assumptions around anticipated saleability of finished
goods and future usage of raw materials. The inventory
provision at the reporting date amounted to £891,000
(2022: £773,000) (see note 16 for the net carrying amount
of inventories and details of the provisions made).
• Deferred tax estimation. Recognition of deferred
tax assets and liabilities involves making a series of
assumptions. As far as deferred tax assets are concerned,
their realisation ultimately depends upon taxable profits
being available in the future. Deferred tax assets are
recognised only when it is probable that taxable profits will
be available against which the deferred tax asset can be
utilised and it is probable that the entity will earn sufficient
taxable profit in future periods to benefit from a reduction
in tax payments. This involves the directors making
judgements within their overall tax-planning activities and
periodically reassessing them in order to reflect changed
circumstances as well as tax regulations. Moreover, the
measurement of a deferred tax asset or liability reflects
the manner in which the entity expects to recover the
asset’s carrying value or settle the liability. At 31 December
2023 the group has recognised deferred tax assets of
£1,443,000 (2022: £1,373,000) and deferred tax liabilities
of £668,000 (2022: £677,000). See note 15 for disclosure
of the group’s deferred tax assets and liabilities.
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 from the sale of goods is recognised when the goods
are dispatched to the customer which is deemed to be the
point at which the customer obtains control of the goods.
Revenue relating to contract work is recognised as contract
activity progresses and the right to consideration is earned.
Contract revenue relates to the design, supply and installation
of storage systems/equipment, partitioning and mezzanine
floors. Contracts are usually less than six months in length and,
therefore, the level of accrued and deferred income (presented
in other debtors and other creditors respectively) is immaterial to
the financial statements and has not been separately disclosed.
The Group sells additional service and maintenance on some
of the products it sells. Revenue in relation to this is recognised
on the completion of such service being provided. Such tasks
are completed in a matter of days, resulting in no accrued or
deferred income at the year end.
Contracts with customers are typically fixed price based on
agreed amounts and invoiced on dispatch to the customer
in line with the standard terms and conditions of the group.
Typically, the Group’s standard payment terms are 30 days from
date of invoice but certain customers have longer agreed terms.
31
Annual Report & Audited Financial Statements | 2023 Notes to the Accounts (continued)
Employee Benefits
The Group operates a defined benefit and a defined contribution
pension scheme for its employees.
Defined benefit scheme: The pension liability recognised in
the balance sheet in respect of the defined benefit scheme
is the present value of the defined benefit obligation at the
balance sheet date less the fair value of the scheme assets.
The defined benefit obligation is calculated tri-annually by
independent actuaries using the projected unit credit 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 and settlement gains are recognised
immediately in the income statement. 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
On commencement of a contract which gives the Group
the right to use assets for a period of time in exchange for
consideration, the Group recognises a right-of-use asset and
a lease liability unless the lease qualifies as a ‘short-term’ lease
(term is twelve months or less with no option to purchase the
lease asset) or a ‘low-value’ lease (where the underlying asset is
£4,000 or less when new).
The lease liability is initially measured at the present value of
the lease payments during the lease term discounted using the
interest rate implicit in the lease, or the incremental borrowing
rate if the interest rate implicit in the lease cannot be readily
determined. The lease term is the non-cancellable period of
the lease plus extension periods that the Group is reasonably
certain to exercise and termination periods that the Group is
reasonably certain not to exercise. Lease payments include
fixed payments, less any lease incentives receivable, variable
lease payments dependant on an index or a rate and any
residual value guarantees.
The lease liability is subsequently increased for a constant
periodic rate of interest on the remaining balance of the lease
liability and reduced for lease payments. Interest on the lease
liability is recognised in the income statement. Variable lease
payments not included in the measurement of the lease liability
as they are not dependent on an index or rate, are recognised
in profit or loss in the period in which the event or condition that
triggers those payments occurs.
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 functional
currency which is GBP). The consolidated financial statements
are presented in GBP which is the Group’s presentational
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.
Monetary 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.
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.
A right-of-use asset is recognised at commencement of the
lease and initially measured at the amount of the lease liability,
plus any incremental costs of obtaining the lease and any lease
payments made at or before the leased asset is available for
use by the Group.
The right-of-use asset is subsequently measured at cost less
accumulated depreciation and any accumulated impairment
losses. Right-of-use assets are depreciated on a straight-line
basis over the lease term.
Intangible Assets
Intangible assets are stated at cost less accumulated
amortisation. They are recognised if it is probable 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.
Intangible assets purchased through an acquisition are
measured at fair value at inception. This relates to the brand
and domain names and customer lists acquired through the
purchase of ESE Direct Limited.
32
Annual Report & Audited Financial Statements | 2023 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% per annum.
Deferred tax assets and liabilities are offset where there is
a legally enforceable right to offset current tax assets and
liabilities and where the deferred tax balances relate to the
same taxation authority.
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 and
depreciation 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 substantively 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 and age.
Financial assets other than derivatives
The Group classifies its financial assets as subsequently
measured at amortised cost under IFRS 9 if they meet both of
the following criteria:
• Hold to collect business model test. The asset is held
within a business model whose objective is to hold the
financial asset in order to collect contractual cash flows;
and
• Solely payments of principal and interest (SPPI) contractual
cash flow characteristics test. The contractual terms of
the financial asset give rise to cash flows that are SPPI on
the principal amount outstanding on a specified date.
Financial assets include trade receivables, amounts due from
subsidiaries and cash and cash equivalents.
Trade and Other Receivables
Trade and other receivables that do not contain a significant
financing component are initially recognised at fair value and
subsequently held at amortised cost less provision for impairment.
An expected credit loss model broadens the information that the
Group is required to consider when determining its expectations
of impairment. Under this model, expectations of future events
must be taken into account and this could result in the earlier
recognition of impairments.
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 excludes
amounts in respect of the overdraft.
33
Annual Report & Audited Financial Statements | 2023 Notes to the Accounts (continued)
Financial liabilities
Financial liabilities are classified as either financial liabilities at
amortised cost or financial liabilities at fair value through profit
or loss. Financial liabilities include trade and other payables,
derivative financial instruments and bank borrowings.
Trade and other payables
Trade and other payables are recognised initially at fair value
and subsequently measured at amortised cost using the
effective interest method.
Borrowings
Borrowings are recognised at fair value and subsequently
measured at amortised cost using the effective interest method.
Borrowings relate to the overdraft facility which is presented in
trade and other payables. Overdraft balances are presented
gross from cash balances as the Directors believe this best
reflects the financing of the Group’s activities.
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
Final 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.
Current tax assets and liabilities are offset where the entity has
a legally enforceable right to offset and intends either to settle
on a net basis, or to realise the asset and settle the liability
simultaneously.
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 Chief Executive
Officer.
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, profits/ (losses), assets and liabilities are wholly
attributable to that business segment. The operations of the
group are based in the UK.
34
Annual Report & Audited Financial Statements | 2023 3. Employee Information
Staff costs
Wages and salaries
Social security costs
Defined contribution pension scheme and
life assurance costs
Group
2023
£’000
3,339
305
99
2022
£’000
2,982
297
96
Company
2023
£’000
2,834
259
84
2022
£’000
2,491
248
81
3,743
3,375
3,177
2,820
The average monthly number of persons, including directors, employed during the year was:
Group
Company
2023
Number
2022
Number
2023
Number
2022
Number
Selling and distribution
Administration
92
18
110
92
19
111
75
16
91
Items in relation to pension costs reported anywhere other than operating costs are excluded from this disclosure.
4. Directors’ Remuneration (including pension contributions)
Dominic Slingsby
Morgan Morris
Andrew Kitchingman
Highest paid Director:
Aggregate emoluments
Defined contribution accrued pension at end of year
2023
£’000
113
131
10
254
128
3
75
17
92
2022
£’000
112
131
-
243
128
3
Morgan Morris accrued benefits under a defined contribution pension scheme amounting to £3,343 (2022: £3,319). Dominic
Slingsby and Andrew Kitchingman accrued no such benefits in 2023 or 2022.
During the year ended 31 December 2023, the directors did not receive any other emoluments, compensation or cash or non-cash
benefits (2022: £nil).
The Company does not have a share option or other long term incentive plan.
35
Annual Report & Audited Financial Statements | 2023
Notes to the Accounts (continued)
5. Operating Profit
Operating profit is stated after charging/(crediting):
Profit on disposal of property, plant and equipment
Depreciation on property, plant and equipment
Amortisation of intangible assets
Grant released
Foreign exchange losses/ (gains) 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
6. Finance Income
Bank interest receivable
7. Finance Costs
Interest payable on bank borrowings
Interest payable on lease liabilities
Net retirement benefit obligation finance costs (note 23)
2023
£’000
(23)
264
126
(30)
17
52
10
-
-
62
2023
£’000
12
2023
£’000
-
8
277
285
2022
£’000
(24)
305
159
-
(19)
45
10
-
-
55
2022
£’000
-
2022
£’000
-
1
141
142
36
Annual Report & Audited Financial Statements | 2023
8. Taxation
Current tax
UK corporation tax:
– current year
– prior year adjustment
Deferred tax:
UK deferred tax:
– origination and reversal of temporary differences
– adjustments due to change of tax rate
Total taxation charge
Factors affecting the tax charge for the year:
2023
£’000
2022
£’000
91
11
102
19
3
22
124
96
-
96
6
3
9
105
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate
applicable to profits of the Group as follows:
Profit before taxation
Tax at the UK corporation tax rate of 23.52% (2022: 19%)
(Income) not taxable/expenses not deductible for tax purposes
Effects of changes in tax rates
Adjustments to tax in respect of prior years
– current year
– deferred tax
Tax charge for the year
2023
£’000
357
84
4
3
11
22
124
2022
£’000
485
92
22
3
(7)
(5)
105
The Group profits for this accounting period are taxed at an effective rate of 23.52% (2022: 19%). Deferred tax assets and liabilities
are measured at a rate of 25% (2022: 25%) as at 31 December 2023.
In addition to the amounts charged to the income statement, £102k (2022: £559k charge) has been credited directly to other
comprehensive income in relation to actuarial differences on the retirement benefit liability.
9. Earnings Per Share
Basic earnings per share is based upon a profit of £233,000 (2022: £380,000) and on 1,050,000 (2022: 1,050,000) weighted
average ordinary shares in issue during the year.
There is no difference between basic earnings per share and diluted earnings per share for both years as there are no potentially
dilutive shares in issue.
10. Profit for the Financial Year
As permitted by Section 408 of the Companies Act 2006, the Company has not published its own income statement. The profit
for the year was £22,000 (2022: £157,000) and total comprehensive expense £284,000 (2022: total comprehensive income
£1,833,000).
37
Annual Report & Audited Financial Statements | 2023
Notes to the Accounts (continued)
11. Dividends
Interim dividend paid for the financial year of 0.0p (2022: 0.0p)
Final dividend paid for the financial year of 0.0p (2022: 0.0p)
12. Property, Plant and Equipment
Group
Cost
1 January 2022
Additions
Lease modifications
Disposals
1 January 2023
Additions
Disposals
31 December 2023
Accumulated depreciation and impairment
1 January 2022
Charge for the year
Lease modifications
Disposals
1 January 2023
Charge for the year
Disposals
31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
At 31 December 2021
Short
Leasehold
Property
£’000
119
–
-
(81)
38
–
(17)
21
93
24
-
(81)
36
2
(17)
21
-
2
26
2023
£’000
-
-
-
Equipment
Right-of-
use assets
Freehold
land and
buildings
£’000
6,671
–
-
–
6,671
–
–
£’000
2,421
211
-
(140)
2,492
201
(78)
6,671
2,615
1,652
106
-
–
1,758
105
–
2,119
143
-
(140)
2,122
134
(78)
1,863
2,178
4,808
4,913
5,019
437
370
302
£’000
128
–
34
(27)
135
-
-
135
98
32
(101)
(27)
2
23
-
25
110
133
30
2022
£’000
-
-
-
Total
£’000
9,339
211
34
(248)
9,336
201
(95)
9,442
3,962
305
(101)
(248)
3,918
264
(95)
4,087
5,355
5,418
5,377
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.
The carrying amount and depreciation of right-of-use assets all relate to property leases.
Depreciation is charged to administrative expenses in the Income Statement.
38
Annual Report & Audited Financial Statements | 2023 Company
Cost
1 January 2022
Additions
Disposals
1 January 2023
Additions
Disposals
31 December 2023
Accumulated depreciation and impairment
1 January 2022
Charge for the year
Disposals
1 January 2023
Charge for the year
Disposals
31 December 2023
Net book amount
At 31 December 2023
At 31 December 2022
At 31 December 2021
Depreciation is charged to administrative expenses in the Income Statement.
Freehold
land and
buildings
£’000
6,671
-
–
6,671
–
–
Equipment
Total
£’000
2,165
209
(140)
2,234
197
(57)
£’000
8,836
209
(140)
8,905
197
(57)
6,671
2,374
9,045
1,652
106
–
1,758
105
–
1,875
134
(140)
1,869
129
(57)
3,527
240
(140)
3,627
234
(57)
1,863
1,941
3,804
4,808
4,913
5,019
433
365
290
5,241
5,278
5,309
39
Annual Report & Audited Financial Statements | 2023
Notes to the Accounts (continued)
13. Intangible Assets
Cost
1 January 2022
Additions
Disposals
1 January 2023
Additions
Disposals
31 December 2023
Accumulated amortisation
1 January 2022
Charge for the year
Disposals
1 January 2023
Charge for the year
Disposals
31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
At 31 December 2021
Group
Goodwill
Group
IT Software
and
Trademarks
Brand and
Domain
Names and
Customer
Lists
Company
TOTAL
IT Software
£’000
£’000
£’000
£’000
£’000
2,409
1,000
997
1,997
-
-
-
-
2,409
1,000
-
-
-
-
22
(95)
924
170
-
2,409
1,000
1,094
1,709
-
-
1,709
-
-
1709
700
700
700
675
100
-
775
100
-
875
125
225
325
936
59
(95)
900
26
-
926
168
24
61
22
(95)
1,924
170
-
2,094
1,611
159
(95)
1,675
126
-
1,801
293
249
386
958
22
(95)
885
170
-
1,055
897
59
(95)
861
26
-
887
168
24
61
Amortisation is charged to administrative expenses in the Income Statement.
Goodwill monitoring
Goodwill, which relates entirely to the acquisition of ESE Direct Limited in 2015, is monitored by management at the Cash
Generating Unit (“CGU”) level. A CGU is considered to be an individual company. The Group tests CGUs containing goodwill for
impairment on at least an annual basis by comparing the carrying amount of the CGU with it’s value in use. Value in use is estimated
based on expected future cash flows discounted to present value using a pre-tax discount rate that reflects current market
assessments of the time value of money. An impairment charge arises where the carrying value exceeds the value in use.
During 2018, an impairment charge of £675,000 was recognised as an exceptional non-cash item followed by a further non-cash
impairment during 2019 of £1,034,000 such that goodwill relating to the ESE acquisition is £700,000.
The carrying amount of the ESE Direct Limited CGU has been tested for impairment using a discounted cash flow model based on
the following set of assumptions which have not changed from those used in the prior year other than where shown below:
- Most recent budgets /forecasts for the next 5 years
-
-
Extrapolation of expected future cash flows using a terminal growth rate of 2%
Sales increase of 7% and then 2% growth over the period based on forecast performance
- Capital expenditure of £106,000 in 2024, £20,000 in 2025 and then £5,000 per annum thereafter per annum based on
forecasts. In 2022 capital expenditure was assumed to be £5,000.
40
Annual Report & Audited Financial Statements | 2023
- Gross margins projected based on recent trends
- Discount rate (derived from pre-tax weighted average cost of capital “WACC”) of 20% (2022: 15%). The WACC was
increased to relfects the increase in interest rates.
The Directors performed sensitivity analysis on assumptions concerning sales growth assuming no growth over the period. There
were no other changes to the sensitivity analysis other than the movement in sales growth with all those assumptions above being
included within the sensitivity analysis. On this sensitised basis, there was sufficient headroom for the Director’s to consider that
there was no impairment charge required.
14. Investment in Subsidiary
On 27 March 2015 the Company acquired 100% of the issued share capital of ESE Direct Limited. The cost of investment was
£4m. During 2018 an impairment provision of £1.4m was recorded followed by a further impairment of £1.1m in 2019 such that
the net book value of the investment was £1.52m. This investment represents the whole of the amount shown in the Company’s
balance sheet.
The Company directly owns 100% of the issued share capital of the following subsidiary undertakings, registered in England and
Wales at 1 Otley Road, Baildon, Shipley BD17 7LW.
Company
ESE Direct Limited
Eastern Storage Limited
ESE Projects Limited
Eastern Storage Equipment Limited
Slingsby Trading Post Limited
Slingsby Manufacturing Limited
Slingsby Metro Equipment Limited
Principal Activity
Distribution of Industrial and Commercial Equipment
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
15. Deferred Tax
The deferred tax balances in these financial statements are attributable to the following:
Deferred tax asset
Retirement benefit obligations
Deferred tax liabilities
Accelerated capital allowances
Short term temporary differences
Intangible asset
Group
2023
£’000
2022
£’000
Company
2023
£’000
2022
£’000
1,443
1,373
1,443
1,373
(649)
14
(33)
(668)
(634)
13
(56)
(677)
(654)
13
-
(641)
(640)
13
-
(627)
The deferred tax asset relates to the deficit on the company’s defined benefit pension scheme. As movements in the pension
deficit arise from changes in actuarial assumptions as well as from deficit reduction payments (see note 23), it is difficult to forecast
the movement in the related deferred tax asset. The deferred tax asset has been recognised as it will be realised through the
settlement of the pension liability.
41
Annual Report & Audited Financial Statements | 2023
Notes to the Accounts (continued)
15. Deferred Tax (continued)
Movements in deferred tax assets/(liabilities) are as follows:
Group
1 January 2022
(Charged)/credited to income statement
Credited to other comprehensive income
1 January 2023
(Charged)/credited to income statement
Credited to other comprehensive income
31 December 2023
Company
1 January 2022
(Charged)/credited to income statement
Credited to other comprehensive income
1 January 2023
Charged to income statement
Credited to other comprehensive income
31 December 2023
16. Inventories
Raw materials and work in progress
Finished goods and goods for resale
Pension
liability
Tax losses
Accelerated
capital
allowances
Intangible
assets
£’000
£’000
£’000
£’000
1,985
(53)
(559)
1,373
(32)
102
1,443
9
4
–
13
1
–
14
(649)
15
-
(634)
(15)
-
(649)
(82)
26
-
(56)
23
-
(33)
Pension
liability
Tax losses
Accelerated
capital
allowances
Total
£’000
1,263
(8)
(559)
696
(23)
102
775
Total
£’000
£’000
£’000
£’000
1,985
(53)
(559)
1,373
(32)
102
1,443
9
4
–
13
-
–
13
(653)
13
-
(640)
(14)
-
(654)
Group
2023
£’000
272
2,371
2,643
2022
£’000
308
2,375
2,683
Company
2023
£’000
272
2,371
2,643
1,341
(36)
(559)
746
(46)
102
802
2022
£’000
308
2,375
2,683
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 £187,000 (2022: £122,000). The cost of inventories
recognised as an expense and included in the Group’s cost of sales was £15,440,000 (2022: £15,143,000) and £10,485,000 (2022:
£10,057,000) for the Company. The provision for obsolete inventory at the year-end for the Group and Company is £891,000 (2022:
£773,000).
42
Annual Report & Audited Financial Statements | 2023 17. Trade and Other Receivables
Trade receivables
Receivables from subsidiary
Prepayments
Group
Company
2023
£’000
2,565
–
396
2,961
2022
£’000
2,589
–
373
2,962
2023
£’000
2,114
125
363
2,602
2022
£’000
2,022
130
343
2,495
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 lifetime expected credit loss allowances. The ageing profile is used by management in
reviewing receivables and the group applies the IFRS 9 simplified approach to measuring expected credit losses. The expected
loss rates are based on the group’s historical credit losses experienced and these rates are then adjusted for current and forward
looking information on macroeconomic factors affecting the group’s customers. Movements on the group and company provisions
for impairment of trade receivables are:
At 1 January 2023
Expected credit loss
Unused provision reversed
Receivables written off
At 31 December 2023
Group
2023
£’000
18
24
(1)
(29)
12
2022
£’000
7
24
(4)
(9)
18
Company
2023
£’000
18
9
(1)
(19)
7
2022
£’000
3
23
(3)
(5)
18
Receivables due from subsidiary were not impaired at 31 December 2023 and 31 December 2022 as the subsidiary was profit and
cash generative.
The carrying amounts of the group’s and company’s receivables are denominated in the following currencies:
Pound sterling
Euro
Group
Company
2023
£’000
2,433
132
2,565
2022
£’000
2,454
135
2,589
2023
£’000
2,107
132
2,239
2022
£’000
2,017
135
2,152
43
Annual Report & Audited Financial Statements | 2023
Notes to the Accounts (continued)
18. Trade and Other Payables
Trade payables
Payables to subsidiaries
Corporation tax payable
Other taxation and social security payable
Other payables
Accruals
Overdraft
Group
2023
£’000
1,744
-
91
399
6
559
2,244
5,043
2022
£’000
1,850
-
103
398
6
433
2,217
5,007
Company
2023
£’000
1,340
608
8
327
3
470
2,244
5,000
2022
£’000
1,365
608
29
301
3
288
2,217
4,811
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.
Group and Company borrowings include overdraft and leases. The overdraft amounting to £2,244,000 (2022: £2,217,000) is
repayable within one year.
The Group’s debtor finance and overdraft facilities (provided by HSBC Bank plc) carry interest rates of 3.1% and 3.3% above the
prevailing Bank of England Base Rate respectively. 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. The overdraft element of the Group’s banking facilities expires on the
30 April 2024, is repayable on demand and is in the process of being renewed at a level of £0.1m. The directors consider this to be
adequate given the Group’s cash and other available financing. The debtor finance facility remains unaffected. The debtor finance
facility is a total of £2m (subject to suitable debt being available) and the overdraft facility (net of group cash) is the sum of £100,000.
19. Derivative Financial Instruments
Forward foreign currency contracts and options
Group and Company
Assets
2023
£’000
-
2022
£’000
-
Liabilities
2023
£’000
2
2022
£’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 2024. They have been valued using year end market data.
44
Annual Report & Audited Financial Statements | 2023
20. Leases and financial commitments
The maturity of the lease obligations is set out below:
Lease obligations
Current lease liabilities
Non-current lease liabilities
At 31 December 2023
Maturity analysis of leases
Less than 6 months
6 months to 1 year
1 year to 2 years
2 years to 6 years
Group
2023
£’000
21
92
113
Group
2023
£’000
13
13
26
76
128
2022
£’000
20
113
133
2022
£’000
13
13
26
102
154
Company
2023
£’000
-
-
-
Company
2023
£’000
-
-
-
-
-
2022
£’000
-
-
-
2022
£’000
-
-
-
-
-
The Group agreed a new lease regarding premises for ESE which had expired in November 2022. The new lease commenced on
16 March 2023 and expires on 16 March 2029 with a break clause at 17 March 2026. The company held over the lease from expiry
on 30 November 2022, and the lease has been deemed to commence on 1 December 2022 within these financial statements. The
total cash outflow for leases during the year was £26,000 (2022 - £35,000).
The total lease liability at 31 December 2023 is £113,423 which has been recognised as a right of use asset under note 12.
£20,919 is included in creditors due within one year and £92,504 is included in creditors due after more than one year.
Depreciation of £22,494 has been charged in relation to the right of use asset within 2023 and recognised as an administrative
expense. Interest payable on the lease of £6,077 has been recognised as a finance cost.
The Company has a commitment by way of a guarantee issued to HMRC in respect of the deferment of import duty and VAT in the
sum of £40,000 (2022 - £40,000).
45
Annual Report & Audited Financial Statements | 2023
Notes to the Accounts (continued)
21. 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 principal financial instruments used by the Group from which financial risk arises are as follows:
Financial assets
Trade receivables (note 17)
Receivables from subsidiary (note 17)
Forward foreign currency contracts and options (note 19)
Cash and cash equivalents
Financial liabilities
Debt financing and overdraft (note 18)
Payable to subsidiary (note 18)
Trade payables (note 18)
Accruals (note 18)
Other payables (note 18)
Lease obligations (note 20)
Forward foreign currency contracts and options (note 19)
Group
2023
£’000
2022
£’000
Company
2023
£’000
2022
£’000
2,565
2,589
2,114
2,022
-
-
2,449
5,014
2023
£’000
2,244
-
1,744
559
6
113
2
-
-
2,243
4,832
2022
£’000
2,217
-
1,850
433
6
133
-
125
-
180
2,419
2023
£’000
2,244
608
1,340
470
3
-
2
130
-
223
2,375
2022
£’000
2,217
608
1,365
288
3
-
-
4,668
4,639
4,667
4,481
Foreign Exchange Risk
The Group is exposed to foreign exchange risk from purchasing a portion of its supplies and by making a portion of its sales 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 Group made a foreign exchange loss of £17,000 in 2023 (2022 - £19,000 gain).
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
2023
£’000
305
3
2022
£’000
207
116
2023
£’000
1
3
2022
£’000
1
-
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 continue to increase, the Group and Company’s interest cost would rise.
The Group does not use interest rate hedges. The interest rates applicable to the group’s debtor finance and overdraft facilities are
disclosed in note 18.
46
Annual Report & Audited Financial Statements | 2023
Liquidity Risk
In the normal course of business the Group and Company is exposed to liquidity risk. The group’s 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. Further details relating to the nature and maturity of the
group’s borrowing facilities are included in note 18.
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 and is further described in note 17 above. There are no significant
concentrations of credit risk.
The maximum exposure of the group at the end of the reporting period is the carrying value of financial assets totalling £5,014,000
(2022: £4,832,000).
22. 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 2023, the gearing ratio was 0% (2022:0%).
23. Pension Commitments
Group and Company Retirement Benefit
Obligations
At 31 December 2023 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 2024 fiscal
year is £150,000. 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.
The Scheme 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 2023 and a
shortfall of £7.2m against the Trustee’s funding objective was
identified. Differences between the shortfall in the actuarial
valuation and the IAS 19 valuation presented within this report
are due to differences within the valuation method. The
Company has agreed to pay contributions of £150,000 in
2024, £350,000 in 2025, £400,000 in 2026 and £450,000 in
2027. Thereafter, contributions increase by 3% per annum to
remove the shortfall over 20 years. Due to the Group’s cash
generation an additional payment of £14,500 is anticipated in
respect of 2023 which will be paid during 2024.
The weighted average duration of the defined benefit obligation
is 16 years.
In addition to the assets and liabilities which are stated below,
the scheme has insured pensioner policies which have not
been included within the valuation in these financial statements.
This is because the quantum of these policies is not deemed
significant against the overall liability.
Investment strategy
Approximately 45% (2022: 44%) of the Scheme’s assets are
held in equity type assets, and 55% (2022: 56%) are held in
long term fixed interest and inflation linked securities.
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
47
Annual Report & Audited Financial Statements | 2023 Notes to the Accounts (continued)
23. Pension Commitments (continued)
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 55% 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. 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.
Other risks
Actions taken by the local regulator, or changes to 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 This has been selected following actuarial
Inflation
advice received, taking into account the
duration of the liabilities. An increase or
decrease in the discount rate of 0.5%
would result in a decrease or increase of
approximately £1.2m 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 £0.3m in the present value of
the defined benefit obligation.
Mortality rates 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 2023 would be 20.8 (22.8)
years and the future life expectancy from age
65 for a male (female) non-pensioner member
currently aged 45 of 22.1 (24.3) years. The
increase or decrease in the present value
of the defined benefit obligation due to a
member living one year longer, or one year
less, would be approximately £0.4m.
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.
The Company’s policy is to recognise actuarial gains and losses
immediately in full each year. A full actuarial valuation was carried
out as at 1 January 2023 by a qualified independent actuary.
48
Annual Report & Audited Financial Statements | 2023 Reconciliation of the present value of the defined benefit obligation
Present value of defined benefit obligation at beginning of year
Interest cost
Effect of changes in financial assumptions
Benefits paid
Present value of defined benefit obligation at end of year
Reconciliation of fair value of scheme assets
Fair value of scheme assets at start of year
Interest income
Return on scheme assets
Contributions by the Company
Benefits paid
Fair value of scheme assets at end of year
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
2023
£’000
14,735
726
322
(727)
15,056
2023
£’000
9,243
449
(86)
405
(727)
9,284
2023
£’000
15,056
(9,284)
5,772
2023
£’000
726
(449)
277
2022
£’000
25,061
445
(10,044)
(727)
14,735
2022
£’000
17,123
304
(7,809)
352
(727)
9,243
2022
£’000
14,735
(9,243)
5,492
2022
£’000
445
(304)
141
49
Annual Report & Audited Financial Statements | 2023 Notes to the Accounts (continued)
23. Pension Commitments (continued)
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
Scheme assets
Equities
Gilts and bonds
Total scheme assets
Expected rate of return on scheme assets
2023
£’000
408
408
2023
£’000
277
81
358
2022
%
44
56
100
2022
£’000
(2,235)
(2,235)
2022
£’000
141
78
219
2022
£’000
4,081
5,162
9,243
4.95%
2023
%
45
55
100
2023
£’000
4,232
5,053
9,285
4.75%
At 31 December 2023 the scheme assets were invested in a diversified portfolio that consisted primarily of equity and debt
securities. The fair value of the scheme assets as a percentage of total scheme assets and target allocations is set out above.
There are no Company related investments included in the fair value of assets included above.
50
Annual Report & Audited Financial Statements | 2023
Principal actuarial assumptions at the Balance Sheet date:
The assumptions as at the reporting date are used to determine the present value of the benefit obligation at that date. The key
financial assumptions are set out below:
Discount rate
Long term rate of return on assets
RPI Inflation
CPI Inflation
Pension increases:
Non-Executive pension accrued before 1 January 1992 (0% fixed)
Non-Executive pension accrued after 1 January 1992 (RPI max 5%)
Executive pension accrued before 1 January 1992 (4% fixed)
Executive pension accrued after 1 January 1992 (RPI min 4%, 5% max)
Pre and post retirement mortality
Retiring today:
- Males
- Females
Retiring in 20 years:
- Males
- Females
Cash commutation
2023
4.75%
4.75%
3.00%
2.55%
0.00%
3.00%
4.00%
4.20%
85.8
87.8
87.1
89.3
2022
4.95%
4.95%
3.10%
2.60%
0.00%
3.10%
4.00%
4.20%
86.4
88.7
87.7
90.2
25% of
pension at
age 65 at a
rate of 15.0:1
25% of
pension at
age 65 at a
rate of 15.0:1
Mortality Assumption; Base mortality table
– Males – standard table SINMA (appropriate to the members’ years of birth)
– Females – standard table SINFA (appropriate to the members’ years of birth)
A scaling factor of 120% has been applied to the notes under the standard tables. An allowance for future improvements has been
made in line with the CMI 2022 Core Regulations assuming a long term annual note of improvement in mortality rates of 1.25% for
men and women.
Defined Contribution Scheme
The Company commenced the operation of a defined contribution scheme on 1 October 2006. Contributions payable by the
Company to the defined contribution scheme of £66,000 (2022: £63,000) 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
£15,000 (2022: £15,000) have been charged to operating profit.
At 31 December 2023, unpaid pension contributions to the Slingsby scheme were £14,209 (2022: £13,478). The respective
amount for the ESE scheme was £2,774 (2022: £2,769).
51
Annual Report & Audited Financial Statements | 2023 Notes to the Accounts (continued)
24. Share Capital and Reserves
Share Capital
Allotted, called up and fully paid
Ordinary shares of 25p
2023
Number
2023
£’000
2022
Number
2022
£’000
1,050,000
262
1,050,000
262
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.
Reserves
The Share Premium reserve represents consideration paid in excess of the nominal value of shares allotted, net of the costs of issue.
Retained earnings represents all current and prior period retained profits and other comprehensive income.
25. Related Party Transactions
Key Management
Key management personnel comprises of the Group’s Executive Directors who served during the year. Their remuneration (net of
employer’s national insurance costs) is set out in note 4. The total cost including employer’s national insurance costs in respect
of Dominic Slingsby would be £126,000 (2022: £125,000) which includes £0 (2022: £0) of pension contributions and in respect of
Morgan Morris £147,000 (2022: £147,000) which includes £3,343 (2022: £3,319) of pension contributions.
The Group’s Executive Directors made purchases from the Group during the year. Morgan Morris made purchases of £1,106 (2022:
£969) Dominic Slingsby made purchases of £349 (2022: £0). All transactions were made under the Group’s usual terms of sale.
Other Related Party Transactions
There were no other related party transactions to disclose.
The company has taken advantage of the exemption not to disclose transactions with Group companies.
52
Annual Report & Audited Financial Statements | 2023
26. Movement in liabilities arising from financing activities
Group
Bank overdraft (note 18)
Debt financing (note 18)
Lease obligations (note 20)
Cash and cash equivalents
Net (debt)/cash
Company
Bank overdraft (note 18)
Debt financing (note 18)
Cash and cash equivalents
Net debt
At 1
January
2023
£’000
(2,217)
-
(133)
2,243
(107)
At 1
January
2023
£’000
(2,217)
-
223
(1,994)
Cashflow
At 31
December
2023
£’000
£’000
(27)
-
20
206
199
(2,244)
-
(113)
2,449
92
Cashflow
At 31
December
2023
£’000
£’000
(27)
-
(43)
(70)
(2,244)
-
180
(2,064)
27. Post Balance Sheet Event
On 11 March 2024, Dominic Slingsby stepped down from the Board. Dominic remains an employee of the Group until his retirement
on 30 June 2024. As part of the Board change and Dominic’s retirement, in addition to payment in relation to his 12 month notice
period, the Company has agreed with Dominic that he shall receive a payment of £60,000 and non-cash benefits (principally in relation
to the keeping of a Company car) of a value of £15,500 from the Company under an employment settlement agreement
53
Annual Report & Audited Financial Statements | 2023 Notes to the Accounts (continued)
Five Year Summary
Income Statement
Turnover
Gross profit
Operating profit before exceptional item
Exceptional item
Profit/(loss) before tax
Profit/(loss) for the financial year
2023
£’000
22,642
8,131
630
-
357
233
2022
£’000
21,564
7,456
627
-
485
380
2021
£’000
19,824
6,645
410
530
822
567
Earnings per share – basic and diluted
22.2p
36.2p
54.0p
Dividend Per Ordinary Share*:
– Interim
– Final
Cash Flow Statement
0.0p
0.0p
0.0p
0.0p
0.0p
0.0p
2020
£’000
21,806
7,612
1.263
-
1,109
946
92.3p
0.0p
0.0p
2019
£’000
19,568
6,743
446
2,726
2,887
2,335
233.5p
0.0p
0.0p
Cash (used in)/generated from operating activities
541
(76)
182
1.540
404
Balance Sheet
Net current assets
Net assets
Pension deficit (net of deferred tax asset)
Net cash/(debt) excluding leases
Cash and cash equivalents
2,987
4,246
(4,329)
205
2,449
2,861
4,319
(4,119)
26
2,243
2,475
2,263
(5,953)
346
1,999
2,142
1,208
(6,622)
275
1,781
1,044
1,671
(5,443)
(1,145)
1,278
* 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.
54
Annual Report & Audited Financial Statements | 2023 Notice of Annual General Meeting
Notice is given that the seventy sixth Annual General Meeting
of H C Slingsby plc (“the Company”) will be held at HC
Slingsby plc, Otley Road, Baildon, Shipley, West Yorkshire
BD17 7LW on 19 June 2024 at 10am to consider and, if
thought fit, pass the resolutions as set out below. as set
out below. Resolutions 1 to 6 will be proposed as ordinary
resolutions and resolutions 7 to 9 as special resolutions.
Ordinary resolutions:
1. To receive the Company’s annual accounts for the
financial year ended 31 December 2023 together with the
Directors’ reports and auditor’s report on those accounts.
2. To elect as a Director, Andrew Kitchingman in accordance
with the Company’s articles of association.
3. To re-elect as a Director, Morgan Morris who retires from
the Board in accordance with the Company’s articles of
association.
4. To reappoint RSM UK Audit LLP as auditors of the
Company to hold office until the end of the next annual
general meeting at which accounts are laid before the
Company.
5. To authorise the Directors of the Company to determine
the remuneration of the auditors.
6.
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 (“Act”)
to exercise all powers of the Company to allot equity
securities (as defined in section 560 of the Act):
(a) up to an aggregate nominal amount of £87,500; and
(b) comprising equity securities up to a nominal amount
of £175,000 (including within such limit any equity
securities issued under paragraph (a) above) in
connection with an offer by way of a rights issue,
open offer or otherwise:
(i)
(ii)
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.
Special resolutions:
7. Subject to the passing of resolution 6, 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 6 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 (b) of resolution 6,
by way of a rights and other pre-emptive issues):
(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
(a) of resolution 6 and/or in the case of any transfer
of 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
(a) of this resolution 7) of equity securities up to an
aggregate nominal value equal to £26,250;
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.
55
Annual Report & Audited Financial Statements | 2023
Notice of Annual General Meeting (continued)
8. Subject to the passing of resolutions 6 and 7, and in
addition to any authority granted under resolution 7 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 6 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)
limited to the allotment of equity securities up to an
aggregate nominal amount of £26,250; and
(b) used only for the purpose of financing (or refinance if
the authority is to be used within 12 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.
measures (as applicable and as amended by the
Market Abuse (Amendment) (EU Exit) Regulations
2019/310);
(d) unless previously revoked or varied, the authority
hereby conferred shall expire 15 months after the
passing of this resolution or, if earlier, at the conclusion
of the next annual general meeting of the Company
after the passing of this resolution; and
(e)
the Company may make a contract or contracts to
purchase Ordinary Shares under the authority hereby
conferred prior to the expiry of such authority which
will or may be executed wholly or partly after the
expiry of such authority, and may make a purchase of
Ordinary Shares in pursuance of any such contract or
contracts.
Registered Office
HC Slingsby plc
Otley Road
Baildon
Shipley
BD17 7LW
Registered in England and Wales No.00452716
By order of the Board
9. To authorise the Company generally and unconditionally to
make one or more market purchases (within the meaning
of 693(4) of the Act) on the London Stock Exchange
plc (the “London Stock Exchange”) of Ordinary Shares
provided that:
M.L. Morris
Company Secretary
22 April 2024
(a)
(b)
(c)
the maximum aggregate number of Ordinary Shares
authorised to be purchased is 105,000 (representing
approximately 10 per cent. of the Company’s issued
share capital as at 8 May 2024);
the minimum price (exclusive of expenses) which may
be paid for such Ordinary Shares is 25 pence per
share;
the maximum price (exclusive of expenses) which
may be paid for an Ordinary Share is not more than
the higher of: (i) 5 per cent. above the average of the
middle market quotations for an Ordinary Share as
derived from the AIM Appendix of the London Stock
Exchange Daily Official List for the five business days
immediately preceding the day on which the Ordinary
Share is contracted to be purchased; and (ii) the price
stipulated by Article 3(2) of Delegated Regulation (EU)
2016/1052 of 8 March 2016 relating to the conditions
applicable to buy-back programmes and stabilisation
56
Annual Report & Audited Financial Statements | 2023
Notes to the Notice of Annual General
Meeting
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 close of business on 17 June 2024 (or, if the meeting
is adjourned, as at close of business 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. 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.
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.
A proxy may only be appointed in accordance with the
procedures set out in note 3 below.
3. You can vote either:
•
via the Link Investor Centre, a free app for
smartphone and tablet provided by Link Group (the
company’s registrar). It allows you to securely manage
and monitor your shareholdings in real time, take part
in online voting, keep your details up to date, access
a range of information including payment history and
much more. The app is available to download on both
the Apple App Store and Google Play, or by scanning
the relevant QR code below. Alternatively, you may
access the Link Investor Centre via a web browser at:
https://investorcentre.linkgroup.co.uk/Login/Login;
•
•
if you are an institutional investor you may also be
able to appoint a proxy electronically via the Proxymity
platform, a process which has been agreed by the
Company and approved by the Registrar. For further
information regarding Proxymity, please go to www.
proxymity.io. Your proxy must be lodged by 10 am on
17 June 2024 in order to be considered valid or, if the
meeting is adjourned, by the time which is 48 hours
before the time of the adjourned meeting. Before you
can appoint a proxy via this process you will need
to have agreed to Proxymity’s associated terms and
conditions. It is important that you read these carefully
as you will be bound by them and they will govern the
electronic appointment of your proxy. An electronic
proxy appointment via the Proxymity platform may
be revoked completely by sending an authenticated
message via the platform instructing the removal of
your proxy vote.
You may request a hard copy form of proxy
directly from the registrars, Link Group, by email
at shareholderenquiries@linkgroup.co.uk or on Tel:
0371 664 0300. Calls are charged at the standard
geographic rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable
international rate. Lines are open between 09:00 –
17:30, Monday to Friday excluding public holidays in
England and Wales.
•
in the case of CREST members, by utilising the
CREST electronic proxy appointment service in
accordance with the procedures set out below.
In order for a proxy appointment to be valid a form of proxy
must be completed. In each case the form of proxy must
be received by Link Group at PXS 1, Central Square, 29
Wellington Street, Leeds, LS1 4DL by 10 am on 17 June
2024.
Completion of the form of proxy or appointment or a
proxy through CREST or Proxymity will not prevent a
member from attending and voting in person. Unless
otherwise indicated on the form of proxy, CREST,
Proxymity or any other electronic voting instruction,
the proxy will vote as they think fit or, at their
discretion, withhold from voting.
Any member or his proxy attending the General
Meeting has the right to ask any question at the
Annual General Meeting relating to the business of the
Annual General Meeting.
4.
If you return more than one proxy appointment, either
by paper or electronic communication, the appointment
received last by the Registrar before the latest time for the
receipt of proxies will take precedence. You are advised to
read the terms and conditions of use carefully. Electronic
communication facilities are open to all shareholders and
those who use them will not be disadvantaged.
57
Annual Report & Audited Financial Statements | 2023
Notes to the Notice of Annual General Meeting (continued)
Corporate representatives
8. 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
9.
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
10. As at 8 May 2024 (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 1,050,000 Ordinary Shares of 25 pence
each, carrying one vote each. No Ordinary Shares are held
by the Company in treasury. Therefore, the total voting
rights in the Company as at 8 May 2024 are 1,050,000.
5. CREST members who wish to appoint a proxy or proxies
through the CREST electronic proxy appointment service
may do so for the Meeting (and any adjournment of the
Meeting) by using the procedures described in the CREST
Manual (available from www.euroclear.com). CREST
Personal Members or other CREST sponsored members,
and those CREST members who have appointed a service
provider(s), should refer to their CREST sponsor or voting
service provider(s), who will be able to take the appropriate
action on their behalf.
6.
In order for a proxy appointment or instruction made by
means of CREST to be valid, the appropriate CREST
message (a ‘CREST Proxy Instruction’) must be properly
authenticated in accordance with Euroclear UK &
International Limited’s specifications and must contain the
information required for such instructions, as described
in the CREST Manual. The message must be transmitted
so as to be received by the issuer’s agent (ID RA10) by
10am on 17 June 2024. For this purpose, the time of
receipt will be taken to mean the time (as determined by
the timestamp applied to the message by the CREST
application host) from which the issuer’s agent is able to
retrieve the message by enquiry to CREST in the manner
prescribed by CREST. After this time, any change of
instructions to proxies appointed through CREST should
be communicated to the appointee through other means.
7. CREST members and, where applicable, their CREST
sponsors or voting service providers should note that
Euroclear UK & International Limited does not make
available special procedures in CREST for any particular
message. Normal system timings and limitations will,
therefore, apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member
concerned to take (or, if the CREST member is a
CREST personal member, or sponsored member, or has
appointed a voting service provider(s), to procure that his
CREST sponsor or voting service provider(s) take(s)) such
action as shall be necessary to ensure that a message
is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and,
where applicable, their CREST sponsors or voting system
providers are referred, in particular, to those sections of
the CREST Manual concerning practical limitations of the
CREST system and timings. The Company may treat as
invalid a CREST Proxy Instruction in the circumstances set
out in Regulation 35(5)(a) of the Un-certificated Securities
Regulations 2001.
58
Annual Report & Audited Financial Statements | 2023 Explanatory Notes to Resolutions 6, 7, 8 and
9
Resolution 6 – Authority to Allot Shares
Paragraph (a) 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 £87,500 (representing 350,000
Ordinary Shares). This amount represents approximately
33.3% of the issued Ordinary Share capital of the Company as
at the ‘Latest Practicable Date’.
Shareholders are reminded of the latest Investment Association
Share Capital Management Guidelines published in February
2023 (“IA Guidelines”), which updated the previous guidance to
incorporate all fully pre-emptive offers, not just fully pre-emptive
rights issues, in respect of the authority to allot a further one
third of the issued share capital of the Company. Accordingly,
in line with the IA Guidelines, the Board is seeking this authority
in order to provide flexibility to the Company.
Paragraph (b) of this resolution would give the Board authority
to allot Ordinary Shares or grant rights to subscribe for or
convert any securities into Ordinary Shares in connection
with an offer by way of rights issue, open offer or otherwise
to existing shareholders in proportion (as nearly as may be
practicable) to their existing holdings, up to an aggregate
nominal amount of £175,000 (representing 700,000 Ordinary
Shares), as reduced by the nominal amount of any shares
issued under paragraph (a) 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.
The authority and power pursuant to resolution 6 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.
Resolutions 7 and 8 – Disapplication of Pre-emption Rights
These resolutions 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.
The purpose of resolution 7 is to give the Directors the
authority to allot equity securities for cash otherwise than to
existing shareholders pro rata to their holdings. Apart from
offers or invitations in proportion to the respective number of
shares held, this authority would be limited to the allotment
of equity securities for cash up to an aggregate nominal
amount of £26,250 (representing 105,000 Ordinary Shares).
This aggregate nominal amount represents 10% of the issued
Ordinary Share capital of the Company as at the Latest
Practicable Date and could be used for any purpose. This
disapplication authority is in line with institutional shareholder
guidance, and in particular, with the Pre-Emption Group’s
Statement of Principles (the “Principles”) revised in November
2022.
The Principles allow the authority for an issue of shares for
cash otherwise than in connection with a pre-emptive offer
to be increased so that the non-pre-emptive issue of shares
represents:
(I) no more than 10% of the Company’s issued share
capital, whether or not in connection with an
acquisition or specified capital investment; and
(II) no more than an additional 10% of the Company’s
issued share capital, provided that it is intended to
be used only in connection with the financing (or
refinancing, if the authority is to be used within 12
months after the original transaction) of an acquisition
or specified capital investment which is announced
contemporaneously with the allotment or which has
taken place in the preceding 12 month period and is
disclosed in the announcement of the issue.
Resolution 8 gives the Directors the additional authority,
as described in (ii) above, to allot equity securities for cash
without first being required to offer such shares to the existing
shareholders in proportion to their existing shareholdings. The
disapplication of pre-emption rights in respect of a further
10% of the Company’s issued share capital, in addition to
the authority proposed to be granted pursuant to resolution 7
reflects institutional shareholder guidance and the Principles.
This authority would be limited to the allotment of equity
securities for cash up to an additional aggregate nominal
amount of £26,250 (representing 105,000 Ordinary Shares).
This aggregate nominal amount represents 10% 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 (within the meaning of the Principles).
The authority and power pursuant to resolutions 7 and 8 will
expire on the latter of 15 months from the date the relevant
resolution is passed or the conclusion of the Company’s
next Annual General Meeting. Resolutions 7 and 8 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.
The Board has no present intention to exercise these
authorities.
Resolution 9 — General authority for the Company to
purchase its own Ordinary Shares
Shareholders will be asked to provide the general authority for
the Company to make market purchases on the London Stock
Exchange of its Ordinary Shares, subject to certain limitations
set out below.
The Board has no immediate plans for the Company to
make purchases of its Ordinary Shares if the proposed new
general authority becomes effective but would like to be able
59
Annual Report & Audited Financial Statements | 2023 Notes to the Notice of Annual General Meeting (continued)
In addition, the requirements of the London Stock Exchange
prevent the Company from purchasing its own shares during
the period of two months before the announcement of its half-
year or full-year results (or, if shorter, the period from the end of
the Company’s relevant financial period up to and including the
time of the relevant announcement), or at any other time when
the directors are in a possession of unpublished price sensitive
information in relation to the Company’s shares.
The general authority set out in resolution 9 in the Notice of
Annual General Meeting will expire fifteen months’ after the
resolution is passed or, if earlier, on the date of the next annual
general meeting of the Company. However, in order to maintain
the Board’s flexibility of action, it is envisaged that this general
authority may be renewed annually at annual general meetings
of the Company.
Details of Ordinary Shares purchased pursuant to the new
general authority will be notified to the London Stock Exchange
by 7.30 a.m. on the business day following the date of dealing
and to the registrar of companies within 28 days of the date of
purchase. Details will also be included in the Company’s report
and financial statements in respect of the financial year in which
any such purchases take place.
to act quickly if circumstances arise in which they consider
such purchases by the Company of its Ordinary Shares to be
desirable. Accordingly, it is proposed that the Board be given
a new general authority to purchase the Company’s Ordinary
Shares on the terms contained in resolution 9 in the Notice of
Annual General Meeting.
The proposed new general authority will be limited, by the
terms of resolution 9 in the Notice of Annual General Meeting,
to purchases of up to 105,000 Ordinary Shares, representing
approximately 10 per cent. of the current issued share capital
of the Company. The minimum price per Ordinary Share
payable by the Company (exclusive of expenses) will be
25p. The maximum to be paid on the exercise of such new
general authority (exclusive of expenses) will be an amount
not exceeding the higher of (i) 5 per cent. above the average
of the middle-market quotation for Ordinary Shares as derived
from the London Stock Exchange Daily Official List for the
five business days immediately preceding the date of each
purchase, and (ii) the price stipulated by Article 3(2) of the
Commission Delegated Regulation (EU) 2016/1052 of 8
March 2016 relating to the conditions applicable to buy-back
programmes and stabilisation measures (being the higher of
the price of the last independent trade and the highest current
independent purchase bid on the trading venue where the
purchase is carried out) (as applicable and as amended by the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310).
The Board will only exercise the new general authority to
purchase Ordinary Shares if it considers that such purchases
of Ordinary Shares can be expected to result in an increase in
earnings per share after such purchases and are in the best
interests of shareholders generally. The Directors would also
consider carefully the extent of the Company’s borrowings and
its general financial position. Any such purchase of Ordinary
Shares will be financed out of profits available for distribution.
The actual cash required to fund any buy-backs of Ordinary
Shares pursuant to the new general authority will be met
from existing cash resources and/or borrowing facilities.
Shareholders should note that any shares purchased by the
Company will be cancelled and not made available for reissue.
The number of shares in issue will accordingly be reduced.
The maximum number of Ordinary Shares and the permitted
price range are stated for the purpose of compliance with
statutory and London Stock Exchange requirements in seeking
the authority. This should not be taken as any representation
of the number of Ordinary Shares (if any) which the Company
might purchase, nor the terms upon which the Company
would intend to make any such purchases, nor does it imply
any opinion on the part of the Directors as to the market or
other value of the Company’s shares. In seeking this general
authority, the Board is not indicating any commitment to buy
back Ordinary Shares. Shareholders should not, therefore,
assume that any purchases will take place.
60
Annual Report & Audited Financial Statements | 2023 Notes
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Annual Report & Audited Financial Statements | 2023 Notes
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Annual Report & Audited Financial Statements | 2023 Notes
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Annual Report & Audited Financial Statements | 2023 HC Slingsby plc
01274 535 030
01274 535 035
sales@slingsby.com
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