GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT for the six months ended 30 September 2008
- Group turnover (consolidated) for the period is £2.401m compared with £2.518m for the same period last year, representing a decline of 4.5%
- Group profit before tax provision and goodwill impairment has reduced to £231,000 from £364,000 for the same period last year.
- Diluted earnings per share at the interim stage are 1.04p compared with 2.14p achieved in the corresponding period last year.
- A total of 170,000 Ordinary Shares in PHSC plc were purchased and cancelled in the period at cost of £64,000.
- Net cash outflow from operating activities was £188,000 (£479,000 inflow in the same period last year). This includes payment of corporation tax of £231,000 resulting from the requirement for quarterly instalments for the first time. After payment of dividends (£97,000), purchase of own shares (£64,000), purchase of our Raunds premises (£74,500), there was a £412,000 net decrease in cash. This resulted in cash reserves standing at £892,000 at the end of the period.
Post balance sheet events
In October 2008, 275,000 Ordinary Shares in PHSC plc were purchased at 23p each and were cancelled.
We previously announced the proposed acquisition of two companies: Inspection Services (U.K.) Limited and Aquatic Water Services Limited.
Completion of the purchase of Inspection Services (U.K.) Limited took place on 1 October 2008. The company is an independent specialist in the examination and certification of plant and equipment, offering an inspection service for all statutory and non-statutory requirements throughout the UK. Originally formed in 1992, the company derives much of its work from a network of insurance brokers and enjoys a high level of repeat business. The purchase price of £180,000 was paid in cash on completion. Cash assets of £136,000 were purchased £ for £. Net non-cash assets, mainly short-term debtors £ for £, were purchased at fair value of £25,200. An additional £25,000 becomes due to the sellers on the first anniversary subject to pre-tax profits of not less than £60,000 accruing in the period. In the last financial year, the company recorded pre-tax profits of £40,000 on revenues of £221,000.
Discussions relating to the acquisition of Aquatic Water Services Limited (AWS) are continuing. Our board is adopting a cautious approach in the current economic climate and in the short term we believe that shareholders’ interests may be better served by us conserving our cash resources. AWS provides specialist scientific, process and engineering services to the water industry. Projects are undertaken in the potable water, waste water, fresh water and marine water environments.
Performance by Trading Subsidiaries
Profit figures for individual subsidiaries are stated before tax and management charges.
Adamson’s Laboratory Services Limited
Invoiced sales of £1,273,687 yielding a profit of £236,680 (the figures for the same period last year were £1,407,317 and £277,838).
Envex Company Limited
Invoiced sales of £121,029 yielding a profit of £28,471 for the period (the figures for the same period last year were £123,818 and £6,874).
Personnel Health and Safety Consultants Limited
Invoiced sales of £509,016 yielding a profit of £236,881 (the figures for the same period last year were £508,377 and £255,637).
RSA Environmental Health Limited
Invoiced sales of £377,673 yielding a loss of £31,203 (the figures for the same period last year were £479,266 and a profit of £29,091).
In-House The Hygiene Management Company Limited
Invoiced sales of £131,331 yielding a profit of £7,855. There are no comparable figures for last year as the company was not part of the Group at that time.
The Board is not recommending payment of an interim dividend, but expects to propose an appropriate final dividend at the end of the year.
The Group’s diverse client base leaves it well-placed to cope with the economic downturn and predicted recession in the UK economy. Aside from a small mortgage on one of its properties, the Group has no borrowings and does not utilise its overdraft facility. Cash balances at the bank are more than sufficient to ensure that restrictions on the availability and cost of finance will have no direct effect.
Stephen King – Chairman and Managing Director
For further information please contact:
Ruegg & Co Limited
Gavin Burnell 020 7584 3663