TIDMSNCL
RNS Number : 5854R
Sinclair (William) Holdings PLC
30 June 2015
WILLIAM SINCLAIR HOLDINGS PLC
("William Sinclair", the "Company" or the "Group")
Unaudited Interim Results for the six months ended 31 March
2015
William Sinclair Holdings PLC is one of the UK's leading
producers of horticulture products. William Sinclair's customers
include The Garden Centre Group, B&Q, Tesco, Wilkinson, and
Morrisons, as well as a large number of independent garden centres
and garden centre groups.
Financial Highlights
-- Revenue GBP18.7 million (2014: GBP21.8 million)
-- Loss before exceptional items and tax GBP3.5 million (2014: loss of GBP1.8 million)
-- Exceptional costs of GBP2.3 million (2014: GBP1.3 million)
arising from production issues at Ellesmere Port
-- Exceptional impairment charge on properties of GBP2.2 million
Operational Highlights
-- Strategically located Ellesmere Port Site, with the world's
first twin track growing media blending system is now operational,
with the majority of the issues now addressed.
-- Investment in the J Arthur Bowers range has improved sell through
-- Transformed product quality for retail - it is now back to its best
-- Reinforced management team
-- Surplus properties at Knottingley and Oswaldtwistle sold.
Stuart Burgin, Chief Executive, William Sinclair Holdings PLC,
said:
"Since I joined William Sinclair as CEO on 5th March there has
been a huge level of activity in the business. This has been
focused in 2 key areas: improving the performance of the Ellesmere
Port site, and analysing the business and developing plans for the
future. I am pleased to say that commissioning of Ellesmere Port
has moved forward considerably and that we have developed strong
plans for the future revolving around a single point of dispatch
from Ellesmere Port and increased focus on customer and product
profitability. Provided we are successful in raising the funds
required to implement these plans, I am confident that William
Sinclair can be successful again."
For further information:
William Sinclair Holdings PLC Tel: 01522 780 222
Stuart Burgin, Chief Executive
Sheryl Tye, Interim Chief Finance Officer
WH Ireland Tel: 0113 394 6600
Paul Shackleton
Liam Gribben
CHAIRMAN'S STATEMENT
For the 6 months ended 31 March 2015 (unaudited)
Trading Review
It has been a difficult period as the Company has continued to
go through massive changes associated with the installation and
commissioning of the plant at Ellesmere Port. The commissioning was
considerably more challenging than expected and this led to a loss
of business predominantly on the professional side as we were
unable to service our customers at times. Sales were also lost on
the retail side in part because of customer uncertainty about
security of supply and service levels in Ellesmere Port's first
season. Margins have also been weak as the company has had to
defend its business in some areas.
Although there were issues with product quality initially at
Ellesmere Port there is now a consensus among retail customers in
particular that the product quality is better than ever. Service
levels from Ellesmere Port were also poor initially but these
improved substantially through March and April and are now
operating at the required level.
Freeland is performing in line with the prior year with
Silvaperl a little behind.
With the significant capital and operating costs of Ellesmere
Port during its commissioning phase, the performance has led to a
significant funding requirement for the business.
Stuart Burgin and Sheryl Tye have been appointed as CEO and
interim CFO respectively to lead the turnaround. They are both
experienced operators with strong track records managing companies
going through significant change.
In order to address the issues a Transformation Plan has been
developed to ensure that William Sinclair does return over time to
previous levels of financial performance. This Transformation Plan
is now being implemented. The major components of the plan are the
closure of the Lincoln site to drive the cost efficiencies and
customer service benefits available from having all growing media
operations on a single site; improved commercial focus particularly
with respect to customer and product profitability; improved
procurement; and an improvement in the Superfyba model to reduce
the net cost of Superfyba to a level closer to the cost of
peat.
The phased closure of Lincoln has been announced and is being
implemented. Initially the growing media operations will move to
Ellesmere Port with the Fertiliser and Chemicals business remaining
in Lincoln for the coming season.
Outlook
The consideration of strategic options that the company referred
to on 26 May 2015 is ongoing. This comprehensive process is now
past its first phase and a number of indications of interest have
been received. The board is continuing discussions with the
counter-parties. The Company is also arranging meetings with major
stakeholders and other potential investors to establish the market
appetite for a significant share placing. Significant progress
towards a funding solution is needed in the next few weeks and
there can be no certainty as to the outcome of any of these
discussions.
William Sinclair has been through more than three years of
challenge. It started with the Bolton Fell agreement with Natural
England and the requirement to plan for a new factory. There was
then a very poor peat harvest which caused significant quality and
customer issues. It continued with the relocation of the Superfyba
and Silvaperl operations into Ellesmere Port, alongside the ongoing
development of Superfyba. In the last 9 months we have installed
and commissioned the growing media plant at Ellesmere Port. The
final challenge is the relocation of Lincoln into Ellesmere Port
but we are confident that, as Ellesmere Port is now an operating
site, this will prove considerably easier than establishing the
site.
With these challenges dealt with, William Sinclair can once
again be focused on delivering market beating quality and service
to its customers and on efficient operations. Provided we can raise
the required funding William Sinclair can continue to be a
significant player in the horticulture market.
Rupert King
Chairman
Group Income Statement Six months Six months Year
for the six months ended 31 March 2015 ended ended ended
(unaudited) 31 March 31 March 30 Sept
2015 2014 2014
Notes GBP'000 GBP'000 GBP'000
Revenue 18,712 21,775 46,206
Operating expenses (22,206) (23,587) (49,031)
Group operating loss before exceptional
items (3,494) (1,812) (2,825)
Exceptional expenses 4 (4,499) (1,259) (3,774)
Exceptional gains 4 - - 9,447
---------- ---------- --------
Group operating (loss)/profit after
exceptional items (7,993) (3,071) 2,848
Finance income 2 3 5
Finance costs (649) (382) (416)
Other finance costs - pensions (266) (240) (485)
(Loss)/profit before taxation (8,906) (3,690) 1,952
Tax credit 1 299 621 2,265
(Loss)/profit for the period (8,607) (3,069) 4,217
========== ========== ========
(Loss)/profit for the period is attributable
to:
Equity holders of the parent company (8,604) (3,069) 4,135
Minority interests (3) - 82
---------- ---------- --------
(8,607) (3,069) 4,217
========== ========== ========
All results relate to continuing operations.
Earnings per share (pence)
Basic EPS on (loss)/profit for the
period 3 (49.5)p (17.9)p 24.0p
Dividend per share 2 0.0p 0.0p 1.5p
Group Statement of Comprehensive Income Six months Six months Year
for the six months ended 31 March 2014 ended ended ended
(unaudited) 31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
(Loss)/profit for the period (8,607) (3,069) 4,217
---------- ---------- --------
Other comprehensive income
Amounts which will not be reclassified
subsequently to the income statement
Actuarial loss on defined benefit pension
scheme (4,453) (675) (2,371)
Tax on items taken directly to or transferred
from equity 891 135 510
---------- ---------- --------
Other comprehensive income, net of
tax (3,562) (540) (1,861)
---------- ---------- --------
Total comprehensive income for the
period (12,169) (3,609) 2,356
========== ========== ========
Attributable to:
Equity holders of the parent company (12,166) (3,609) 2,274
Minority interests (3) - 82
(12,169) (3,609) 2,356
========== ========== ========
Group Equity Share Capital
Statement of share premium redemption Revaluat'n Other Retained Minority Total
Changes in capital account reserve reserve reserves earnings Total interests equity
Group
Shareholders'
Equity
(Unaudited)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2014 4,344 150 1,523 4,050 176 6,074 16,317 357 16,674
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Loss for the
six
months to 31
March
2015 - - - - - (8,604) (8,604) (3) (8,607)
Depreciation
transfer - - - (960) - 960 - - -
Actuarial
losses
on defined
benefit
pension
scheme - - - - - (4,453) (4,453) - (4,453)
Tax on items
taken
directly to
or
transferred
from equity - - - - - 891 891 - 891
Total
comprehensive
income - - - (960) - (11,206) (12,166) (3) (12,169)
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Equity shares - - - - - - - - -
issued
Share based
payments - - - - - 34 34 - 34
Equity - - - - - - - - -
dividends
paid
Transactions
with
owners - - - - - 34 34 - 34
At 31 March
2015 4,344 150 1,523 3,090 176 (5,098) 4,185 354 4,539
========= ======== ========== =========== ========== ========= ========= =========== =========
At 1 October
2013 4,265 150 1,523 9,035 176 (955) 14,194 275 14,469
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Loss for the
six
months to 31
March
2014 - - - - - (3,069) (3,069) - (3,069)
Depreciation
transfer - - - (48) - 48 - - -
Actuarial
losses
on defined
benefit
pension
scheme - - - - - (675) (675) - (675)
Tax on items
taken
directly to
or
transferred
from equity - - - - - 135 135 - 135
Total
comprehensive
income - - - (48) - (3,561) (3,609) - (3,609)
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Equity shares
issued 54 - - - - (54) - - -
Share based
payments - - - - - 54 54 - 54
Equity - - - - - - - - -
dividends
paid
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Transactions
with
owners 54 - - - - - 54 - 54
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
At 31 March
2014 4,319 150 1,523 8,987 176 (4,516) 10,639 275 10,914
========= ======== ========== =========== ========== ========= ========= =========== =========
At 1 October
2013 4,265 150 1,523 9,035 176 (955) 14,194 275 14,469
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Profit /
(loss) for
the year - - - - - 4,135 4,135 82 4,217
Other
comprehensive
income:
Actuarial
gains on
defined
benefit
pension
plans - - - - - (2,371) (2,371) - (2,371)
Tax on items
taken
directly to
or
transferred
from equity - - - - - 510 510 - 510
Depreciation
transfer - - - (45) - 45 - - -
Release to
retained
earnings - - - (4,940) - 4,940 - - -
Total other
comprehensive
income - - - (4,985) - 3,124 (1,861) - (1,861)
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Total
comprehensive
income - - - (4,985) - 7,259 2,274 82 2,356
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Transactions
with
owners:
Equity shares
issued 79 - - - - (79) - - -
Share based
payments - - - - - 108 108 - 108
Equity
dividends
paid - - - - - (259) (259) - (259)
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
Transactions
with
owners 79 - - - - (230) (151) - (151)
--------- -------- ---------- ----------- ---------- --------- --------- ----------- ---------
At 30
September
2014 4,344 150 1,523 4,050 176 6,074 16,317 357 16,674
========= ======== ========== =========== ========== ========= ========= =========== =========
Group Statement of Financial Position As at As at As at
as at 31 March 2015 (unaudited) 31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 27,049 23,237 28,156
Intangible assets 1,663 1,734 1,713
Deferred tax assets 4,127 351 2,937
33,839 25,322 32,806
---------- ---------- ---------
Current assets
Inventories 12,174 13,620 9,609
Trade and other receivables 17,463 23,892 8,694
Corporation tax recoverable - 492 -
Cash and cash equivalents 1,239 867 1,361
----------
30,876 38,871 19,664
---------- ---------
Assets held for sale 830 7,514 1,845
---------- ---------- ---------
Total assets 64,545 71,707 54,315
========== ========== =========
Current liabilities
Trade and other payables 15,350 14,209 9,173
Financial liabilities - borrowings 14,659 15,458 4,774
Corporation tax payable 75 - 75
---------- ---------- ---------
30,084 29,667 14,022
Receipt from Natural England - 9,000 -
---------- ---------- ---------
30,084 38,667 14,022
---------- ---------- ---------
Non-current liabilities
Financial liabilities - borrowings 10,274 10,189 8,718
Provisions 1,110 149 1,110
Defined benefit pension plan deficit 18,538 11,788 13,791
29,922 22,126 23,619
Total liabilities 60,006 60,793 37,641
========== ========== =========
Net assets 4,539 10,914 16,674
========== ========== =========
Capital and reserves
Equity share capital 4,344 4,319 4,344
Share premium account 150 150 150
Capital redemption reserve 1,523 1,523 1,523
Revaluation reserve 3,090 8,987 4,050
Other reserves 176 176 176
Retained earnings (5,098) (4,516) 6,074
---------- ---------- ---------
Group shareholders' equity 4,185 10,639 16,317
Minority interests 354 275 357
---------- ---------- ---------
Total equity 4,539 10,914 16,674
========== ========== =========
Group Cash Flow Statement
for the six months ended 31 March 2015 (unaudited)
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Net cash flow from operating activities (9,692) (12,219) 4,212
Net cash flow from investing activities (1,222) (2,895) (5,578)
Net cash flow from financing activities 2,440 5,428 2,542
---------- ---------- --------
Decrease in cash in the period (8,474) (9,686) 1,176
Opening cash and cash equivalents (3,413) (4,589) (4,589)
Closing cash and cash equivalents (11,887) (14,275) (3,413)
========== ========== ========
Notes to the consolidated Cash Flow Statement Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Group operating (loss) / profit (7,993) (3,071) 2,848
Amortisation of intangible assets 50 50 169
Depreciation of property, plant and equipment 1,190 895 1,808
Profit on disposal of property, plant and
equipment (9) - 12
Impairment of assets 2,165 - 3,071
Share based payments 34 54 108
Difference between pension contributions
paid and amounts recognised in the income
statement 28 (21) 95
Increase in inventories (2,565) (2,040) 1,971
Increase in trade and other receivables (8,769) (12,939) 2,259
Increase in trade and other payables 6,177 4,849 (87)
Increase in provisions - 4 958
Release of Natural England balance - - (9,000)
---------- ---------- --------
Cash generated from operations (9,692) (12,219) 4,212
Income taxes received / (paid) - - -
---------- ---------- --------
(9,692) (12,219) 4,212
========== ========== ========
Cash flow from investing activities
Interest received 2 3 5
Sale of property, plant and equipment 292 95 2,899
Purchase of property, plant and equipment (1,516) (2,993) (8,384)
Payments to acquire intangible fixed assets - (98)
(1,222) (2,895) (5,578)
========== ========== ========
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Cash flow from financing activities
Interest paid (148) (131) (363)
Dividends paid to owners of the parent - - (259)
New borrowings 3,000 10,565 8,164
Repayment of borrowings (412) (5,060) (5,000)
Issue of new shares - 54 -
2,440 5,428 2,542
========== ========== ========
Reconciliation of net cash flow to movement in net debt
Six months Six months Year
ended ended ended
31 March 31 March 30 Sept
2015 2014 2014
GBP'000 GBP'000 GBP'000
Decrease in cash and short term deposits (8,474) (9,686) 1,176
Cash flow from change in borrowings (2,588) 2,660 5,000
Movement in loan notes (501) (8,165) (8,718)
Movement in net debt in the period (11,563) (15,191) (2,542)
Net debt at 1 October (12,131) (9,589) (9,589)
Net debt at period end (23,694) (24,780) (12,131)
========== ========== ========
Notes to the financial information
1. Taxation
The tax credit in the Group Income Statement arises on movements
in the pensions costs in the period and on movements in the
revaluation reserve following the impairment of certain fixed asset
properties. No deferred tax asset has been created in respect of
the losses for the period other than these items. The deferred tax
asset based on losses at 30 September 2014 has been retained in the
balance sheet.
2. Dividend
No final dividend was paid during the period (2014: 1.5p). No
interim dividend will be paid this year (2014: nil).
3. Earnings per share
Basic earnings per share have been calculated by reference to a
weighted average of 17,377,420 (2014: 17,112,890) shares in issue
during the period.
4. Exceptional Items
During the period to 31 March 2015 the Group incurred
exceptional restructuring costs of GBP537,000 including certain
redundancy costs as well as consultant fees. In addition, there
were dual running costs of GBP284,000 and excess operational costs
during the installation of the new equipment at Ellesmere Port
which amounted to GBP430,000. The total of these costs is
GBP1,251,000 and this total is included as an exceptional item.
The Group completed an impairment review of its property assets
and made a provision of GBP2,165,000 against their carrying value.
The provision has been charged as an exceptional item in the income
statement.
The development of SuperFyba has continued to incur unexpected
costs. A total amounting to GBP600,000 has been estimated as the
exceptional element of these costs and is disclosed as such in the
income statement.
Finally, the production difficulties at Ellesmere Port resulted
in significant interruption to the supply of products to
professional customers. This supply could not be mitigated by
production at the Lincoln factory in the same way as for retail
customers and as a consequence an exceptional loss of contribution
from the professional customer base was incurred. This loss is
estimated at GBP483,000 and an expense if included in the income
statement at this figure within exceptional items.
The total of all exceptional items in the period to 31 March
2015 is GBP4,499,000.
During the six month period to 31 March 2014 the Group undertook
a refinancing exercise at a cost of GBP987,000 and dual running
costs were estimated at GBP272,000. The total exceptional items
disclosed was therefore GBP1,259,000.
For the year ended 30 September 2014 exceptional items included
the settlement of the Natural England claim in June 2014 at
GBP12.25 million. The net credit to the Group Income Statement was
GBP9,447,000. The tax impact of this gain is a credit of
GBP727,000.
In addition to the costs incurred by 31 March 2014 the Group
incurred further costs in respect of refinancing of GBP402,000
making GBP1,389,000 for the full year and further dual running
costs of GBP1,072,000 making GBP1,344,000 for the full year.
Furthermore the development of the SuperFyba operation at
Ellesmere Port resulted in exceptional costs of GBP850,000 in the
second half year and a restructuring of the sales function cost
GBP191,000 in the same period.
The total of all exceptional expenses in the year to 30
September 2014 was GBP3,774,000 and exceptional gains was
GBP9,447,000.
5. Basis of preparation
The financial information set out in the interim report has been
prepared in accordance with accounting policies under International
Financial Reporting Standards as adopted by the European Union
('IFRS') as detailed in the financial statements for the year ended
30 September 2014. These policies are expected to be followed in
the financial statements for the year ending 30 September 2015.
The interim report has been approved by the Board of Directors
and is neither audited nor reviewed. The interim financial
information does not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006.
The financial information for the year ended 30 September 2014
is extracted from the audited accounts for that period. Those
accounts have been delivered to the Registrar of Companies. The
auditors' report on them was unqualified and did not contain a
statement under either section 498(2) or section 498(3) of the
Companies Act 2006.
The Group does not consider that any standards or
interpretations issued by the International Accounting Standards
Board (IASB), but not yet applicable, will have a significant
impact on the financial statements for the year ending 30 September
2015.
A copy of this interim report will be posted to shareholders
shortly and will be available to view on the Company's website at
www.william-sinclair.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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