PHSC plc (“the Group”), a leading provider of health, safety, hygiene and environmental consultancy services and security solutions to the public and private sectors, announces an update on its performance for the financial year ended 31 March 2016.
These indicative figures are per management accounts and after certain adjustments, and are currently in the final stages of audit. We expect to issue our Final Results announcement in early August 2016.
Consolidated Group revenue for the period was around GBP 7.04m, representing a fall of 9% year-on year (2015 – GBP 7.7m). The reduction arises principally from the ending of a large asbestos management contract previously delivered by Adamson’s Laboratory Services Limited (ALS) with a leading university, as mentioned in our interim results statement. ALS was unable to find sufficient replacement work to bridge the gap during the second half.
It is encouraging that Consolidated Group revenue in the second half increased around 12% over the first half but, as explained below, it is likely that due principally to an impairment in the carrying value of goodwill the results for the full year will not meet our expectation at the time of the interim results statement that we would see a stronger second half to the year.
Underlying EBITDA (excluding the goodwill impairment charge below) stands at GBP 0.418m (2015: GBP 0.818m) prior to various costs associated with the two acquisitions made in December 2015. Legal and other costs totalled approximately GBP 50,000. In addition, a further GBP 50,000 has been expended in meeting the initial integration costs of one of those acquisitions, SG Systems (UK) Limited, in the period to 31 March 2016. Should these costs not be recovered over the earn-out period, they are deductible from the final instalment due under the share purchase agreement.
Given the difficult trading conditions experienced by ALS, and in accordance with standard tests applied by our Auditors, we anticipate an impairment of GBP 0.6m in the carrying value of goodwill in respect of ALS, representing a reduction of approximately 9% in the consolidated net assets of the Group before this adjustment.
The Company has adopted a progressive dividend policy. The directors believe that the Company’s distributable reserves are more than adequate to support the payment of a dividend in line with previous years, should such a resolution be supported at the AGM.
Management accounts indicate that both Group revenues and EBITDA in the early part of 2016-17 are running ahead of the comparative figures for last year.
Cash flow remains positive and the average bank balance in June 2016 has been circa GBP 0.25m. The Company also has a facility with its bankers, currently not called upon, of GBP 0.2m.
For further information please contact:
Stephen King 01622 717700
Northland Capital Partners Limited (Nominated Adviser) 0203 861 6625
Edward Hutton/David Hignell
Beaufort Securities Limited (Broker) 020 7382 8300