PHSC Plc Final Results

 
TIDMPHSC 
 
11 August 2017 
 
                                   PHSC PLC 
                        (the "Company" or the "Group") 
 
                Final Results for the year ended 31 March 2017 
 
Financial Highlights 
 
  * Underlying EBITDA* loss of GBP0.1m, down from a profit of GBP0.368m last year 
 
  * Group revenue rose to GBP7.16m compared with GBP7.04m last year 
 
  * Cash reserves of GBP0.207m at year end compared to GBP0.256m last year 
 
  * Write-down of GBP0.625m (compared to GBP0.609m last year) due to impaired 
    goodwill 
 
  * Group net assets fell to GBP5.52m from GBP6.09m after goodwill impairment 
 
  * Loss per share of 4.92p compared with last year's loss per share of 3.23p 
 
  * Loss after tax of GBP0.691m compared with a loss of GBP0.414m last year 
 
  * No final dividend proposed but interim dividend may be considered if 
    progress continues 
 
*Underlying EBITDA is calculated as earnings before interest, tax, 
depreciation, amortisation and acquisition costs and fair value movements on 
contingent consideration. 
 
                                             2017             2016 
                                             GBP                GBP 
 
Profit before tax                            (720,693)        (377,723) 
 
Less: interest received                      (471)            (1,052) 
 
Add: interest paid                           2,117            8 
 
Add: depreciation                            44,089           47,712 
 
Add: impaired ALS goodwill                   625,191          608,936 
 
Acquisition costs                            -                50,000 
 
Fair value movement on  contingent           (50,000)         - 
consideration 
 
Underlying EBITDA                            (99,767)         367,881 
 
Operational highlights 
 
  * 56% of revenues were in security-related technology services compared with 
    40% last year 
  * Ongoing rationalisation and cost reduction programme 
 
This announcement contains inside information. 
 
Contact information 
 
For further information please contact: 
 
PHSC plc                                   Stephen King            01622 717700 
 
                                           [e-mail] 
 
Northland Capital Partners Limited         Edward Hutton           0203 861 6625 
(Nominated Adviser)                        David Hignell 
 
Beaufort Securities Limited (Broker)       Elliot Hance            020 7382 8300 
 
Chief Executive's Review 
 
I present my review of the Group's performance over the year, and provide an 
update to shareholders on the improving picture emerging over recent months. 
 
Key developments and outlook 
 
PHSC plc, through its trading subsidiaries, is a leading provider of health, 
safety, hygiene and environmental consultancy services and security solutions 
to the public and private sectors. From the time of incorporation and up until 
the end of the 2015-16 financial year, the majority of the Group's revenue had 
always been generated by its health and safety businesses. In 2016-17, for the 
first time in the Group's history, more revenues arose from the 
security-related technology revenues in the form of installations, consumables 
and services than from health and safety services. 
 
The legacy health and safety businesses continue to bring valuable income to 
the Group. Education, leisure, public transport and the care sector represent a 
large proportion of the clients to whom health and safety consultancy and 
training is provided. A wide range of general commercial and industrial 
organisations complete the client portfolio. In addition, the Group carries out 
statutory examination of lifting equipment, pressure systems and other plant 
and machinery via insurance brokers or directly for clients. 
 
Our Scottish-based subsidiary specialising in quality systems management goes 
from strength to strength and further commentary is given later in this report. 
Conversely, our subsidiary engaged in asbestos management solutions has 
continued to encounter challenging market conditions and there is ongoing 
action to eliminate the losses arising there. 
 
In recognition of the need to reduce reliance on traditional health and safety 
businesses, the Group moved into the security technology sector in 2012.  This 
process continued with two further acquisitions in December 2015. The larger of 
those acquisitions, SG Systems (UK) Limited (SG), involved a two-year earn-out 
period whereby part of the consideration was based on performance. Due to this 
provision, the Company was restricted in the steps that could be taken in terms 
of integrating the businesses but agreement has recently been reached with the 
sellers that allows this process to commence. This is expected to result in 
savings where roles and functions can be combined, and economies of scale can 
be better exploited. This will enable us to bring forward the commitment given 
in last year's report where we stated that, after the earn-out timetable had 
been completed, we would formally consolidate B to B Links Limited and SG into 
a security division. 
 
We also stated that in due course we would look to form a safety division to 
run parallel with the security division.  This remains our strategy. The 
goodwill associated with Adamson's Laboratory Services Limited (ALS) was fully 
impaired during the year as a result of an impairment review. 
 
Acquisition payments 
 
Under the terms of the acquisition of SG, a cash payment of GBP200,000 fell due 
on the first anniversary of the purchase, in December 2016. This amount has 
been paid in full. A final payment becomes due in December 2017 and under the 
terms of the sale, this could have been an amount from GBP25,000 to GBP375,000 as 
determined by a formula that relates to performance over the period.  Based on 
the expected results, for the purposes of the accounts, a fair value of GBP75,000 
was initially provided for. However, the business has not performed in line 
with the targets that would have triggered a payment of that amount and we are 
confident that the final payment will be limited to GBP25,000. This has enabled 
us to release GBP50,000 of the initial estimated value back to the income 
statement. 
 
Net asset value 
 
As at 31 March 2017, the Company had consolidated net assets of GBP5.52m. There 
were 14,677,257 ordinary shares in issue at that date which equates to a net 
asset value per share of 38p. The ordinary shares of the company continue to 
trade at a discount to the net asset value, even after allowing for the 
goodwill impairment. Nevertheless, a large proportion of the Company's assets 
relate to goodwill associated with acquisitions and this is reviewed annually 
to make sure that values in the group statement of financial position can be 
justified. For the second year, we have found it necessary to impair ALS in 
accordance with requirements of accounting standards. We are writing down the 
carrying value of that business and this represents a reduction of 
approximately 11% in the consolidated net assets of the Group. The board is 
satisfied that all other goodwill valuations can presently be justified. 
 
Outlook 
 
Ongoing political uncertainty and the weaker sterling exchange rate continue to 
adversely affect the Group, and in particular the security-related subsidiaries 
that import materials priced in euros or US dollars. 
 
It is encouraging that the Group saw a material improvement in underlying 
EBITDA in the second half of 2016-17. Our legacy health and safety businesses 
generally continue to enjoy a large amount of repeat business and have a very 
loyal client base. Losses at our asbestos-related business have bottomed out 
and management are seeing stabilisation of prices after a period of heavy 
discounting. There may be further costs associated with restructuring the 
business but the board anticipates that the large trading losses are a thing of 
the past. 
 
Proposed restructuring of our security-related companies into a single division 
will ultimately result in cost savings. In addition, there continue to be good 
prospects for increased sales and opportunities for technological innovation of 
the products supplied.  Significant new contracts can take a considerable 
amount of time to materialise and various trials and talks are underway with a 
number of existing and prospective clients. 
 
Based on the latest management accounts (unaudited), the Group had total 
revenues of GBP1.82m for the first quarter of 2017-18. This is an increase of 
around 5% on the first three months of last year. Based on those revenues, 
EBITDA for the first quarter is showing as around GBP120k. This compares very 
favourably to the loss of GBP40k that was reflected over the corresponding period 
last year. 
 
Aside from the final payment expected to be GBP25,000 under the terms of the 
purchase agreement for SG, no other acquisition payments are due and the Group 
is presently not considering any further acquisitions. 
 
Performance by trading subsidiary 
 
A review of the activities of each trading subsidiary is provided below. The 
profit figures stated are before tax and central management charges. 
 
Adamson's Laboratory Services Limited (ALS) 
 
  * 2017: sales of GBP823,200 resulting in a loss of GBP194,600 
  * 2016: sales of GBP1,825,600 yielding a profit of GBP76,800 
 
Competition within the sector continues to adversely affect revenues and has 
led to a situation where ALS along with several of its peers is trading at a 
loss. A number of loss-making competitors entered administration during the 
year. 
 
The business had a very disappointing year with sales materially down and a 
resulting loss of GBP194,600. In response, ALS made significant cost reductions 
in both cost of sales and expenditure to compensate for the loss of revenue and 
negative margins. As part of the cost reduction, several members of staff were 
made redundant and the trading loss includes around GBP30,000 of severance pay. 
 
The company has been supported by the Group and has recently seen some areas 

for optimism. It continues to win repeat business with blue chip clients and 
local government and has seen a growth in the education sector. 
 
The health and safety department's turnover increased and the volume of 
occupational hygiene consultancy showed some growth. 
 
ALS has successfully maintained its accreditation with UKAS ISO 17020, 17025, 
ISO 9001 and ISO14001. 
 
B to B Links Limited (B to B) 
 
  * 2017: sales of GBP2,594,900 yielding a profit of GBP52,500 
  * 2016: sales of GBP2,551,800 yielding a profit of GBP134,200 
 
During 2016-17 B to B generated revenues of GBP2,594,900 consistent with the 
previous three years.  The majority of sales in 2016-17 came from national 
accounts, primarily in the department store, fashion retail, builders' 
merchants and DIY sectors.  Independent retail sales were flat during the year 
compared with 2015-16.  Non-retail CCTV sales activities contributed GBP254,400 
to company revenues in 2016-17, the first full year of integration of the 
business of Camerascan CCTV Limited.  Profits for the year fell by GBP81,700 due 
to a combination of  trade cost increases caused by the depreciation of 
sterling following the June 2016 EU Referendum and a bad debt of around GBP40,000 
incurred after a client went into administration. 
 
Despite the headwinds faced in 2016-17 the outlook for B to B remains strong. B 
to B's retail customer base has performed well in the new financial year and 
existing key accounts all have clear plans to invest in property projects and 
associated CCTV and security tagging hardware during 2017-18. Global 
restructuring of key competitors in both radio frequency and acousto-magnetic 
security tagging technologies may also provide opportunities to grow market 
share. 
 
Closer operational links have developed with SG during the year and these will 
deepen further during the 2017-18 financial year. Key priorities for 2017-18 
are to grow B to B sales by further developing existing accounts, achieving 
stronger growth in independent sales, both retail and non-retail and to improve 
efficiency in technical delivery and stock management. 
 
Inspection Services (UK) Limited (ISL) 
 
  * 2017: sales of GBP227,600 yielding a profit of GBP44,200 
  * 2016: sales of GBP219,600 yielding a profit of GBP40,300 
 
Health and safety legislation requires employers to ensure that relevant 
equipment is examined at an appropriate frequency by a competent person to 
ensure it remains safe to use. Many organisations rely upon external agencies 
to assist them to comply with their duties in this regard. 
 
The main business of ISL is to carry out statutory examinations and inspections 
of lifting plant and equipment, and of pressure systems, through contracts 
placed by insurance brokers.  Commissions are paid to brokers for placing this 
work with ISL. Approximately 75% of revenue is derived through the insurance 
sector, with the remaining 25% from business placed directly by clients. 
 
ISL's revenues rose by 3.5%, or GBP7k, from around GBP220k to GBP228k over the 
period. The increase was because the volume of new business outweighed the 
number of clients who did not renew the service with ISL. Costs rose as a 
consequence of the delivery of a greater number of services, and because 
sub-contractor fees rose in the second half of the year due to a need to cover 
for the medical-related absence of a member of staff. Despite the higher costs 
incurred, pre-tax and management charge profit rose to a little over GBP44k, an 
improvement of around GBP3.9k or 10%. 
 
Personnel Health & Safety Consultants Limited (PHSCL) 
 
  * 2017: sales of GBP666,900 yielding a profit of GBP218,900 
  * 2016: sales of GBP703,300 yielding a profit of GBP276,100 
 
The principal activity of PHSCL in the year under review continues to be that 
of providing general health and safety consultancy and training services to 
public and private sector clients. In addition, consultants provide expert 
witness reports in connection with criminal and legal cases, and some editorial 
content for safety publications. 
 
Turnover decreased by around 5% with gross margins down to 59%.  Higher staff 
salaries and the effects of pension auto-enrolment, combined with an inability 
to pass on our extra costs to clients were responsible for lower profits. 
 
Most of PHSCL's revenue is obtained under a retainer service, with these 
clients' often purchasing additional consultancy or training days. 
 
During the year an agreement was made with PHSCL's largest client to transfer a 
consultant from the payroll onto the client's headcount. Although a 
compensatory payment was received, this has led to a net loss of recurring 
revenues. 
 
The company continues to be a net provider of resources to other members of the 
Group, with policy dictating that no cross-charges are applied to reflect this 
contribution. 
 
QCS International Limited (QCS) 
 
  *     2017: sales of GBP624,000 yielding a profit of GBP210,800 
  *     2016: sales of GBP528,000 yielding a profit of GBP122,700 
 
QCS's turnover and operational profit both exceeded management expectations. 
It was hoped that the company would benefit from changes to ISO standards, 
which experience has shown leads to greater demand for both training and 
consultancy services.  This proved to be the case and the company increased 
sales significantly in the year, while keeping a close control on costs. 
 
Sales increased by GBP96k (18%) compared to 2015-16 and the corresponding profit 
increased by GBP88k (72%) to GBP211k.  This considerable increase in profit 
reflects the improved utilisation of assets/resources. 
 
QCS continues to be a leader in the design, marketing and delivery of training 
courses and consultancy in respect of the ISO standards, which can be seen in 
the high number of training courses (public and in-house) and new consultancies 
delivered.  QCS is highly regarded within its locale and has a considerable 
share of the ISO training market for southern and central Scotland. 
 
The changes in 2015 to the standards ISO 9001 and ISO 14001 continue to 
underpin new sales.  This is likely to continue until autumn 2018, by which 
point transition must be complete.  QCS has presented plans to find new markets 
for 2018 onwards should the demand for services linked to the new standards 
decline. 
 
QCS decided to retain full approved training partner status with our main 
professional body, IRCA.  During the year IRCA adjusted their relationship with 
their training partners, causing some of QCS's competitors to decide to leave 
the group. 
 
QCS continues to demonstrate high levels of customer retention; 70% of 
consultancy clients were retained while achieving a steady growth of 15% in new 
clients to the consultancy portfolio. 
 
QCS's medical device consultancy service has been in place for over a year. 
Medical device consultancy sales were not as high as hoped in the first half of 
the financial year but new clients have been secured in early 2017. QCS are 
using their new website and marketing initiatives to focus on generating 
further work in this area which can be charged at a premium. Concerns are being 
raised amongst clients about the potential impact of Brexit in this sector 
which relies heavily upon EU cooperation in respect of regulations.  This 
uncertainty may generate opportunities as clients seek reassurance and guidance 
once the new regulatory framework is established. 
 
It was hoped that the British standard OHSAS 18001 for health and safety would 
have been replaced by a new international standard ISO 45001 in 2016-17.  This 
did not happen and the latest indications are that this may not occur until 
late 2017.  This will provide us with an opportunity to assist clients with the 
transition process, albeit at a lower rate than for work associated with ISO 
9001 and ISO 14001. 
 
Quality Leisure Management Limited (QLM) 
 
  * 2017: sales of GBP437,100 yielding a profit of GBP74,300 
  * 2016: sales of GBP506,290 yielding a profit of GBP95,900 
 
The business continued to develop and diversify in 2016-17 but the company's 
core business functions will be the focus as QLM continues to adapt to the 
changing business environment and client base. 
 
QLM saw a 14% fall in turnover from GBP506,290 in 2015-16 to GBP437,100 in 
2016-17.  This was largely due to staffing issues; a significant period of 
sickness absence in the second quarter and the loss of the equivalent of one 
full time member of staff in December 2016. 
 
Auditing income declined by 22% from GBP108,900 in 2015/16 to GBP84,300 in 
2016-17.  The number of audits undertaken has decreased and lighter, more 
general topics or activity specific reviews have taken precedence over QLM 
LeisuresafeT audits. 
 
Staffing and subcontractor's costs varied significantly in the latter part of 
2016-17 with two part-time consultants retiring and another member of staff 
leaving the payroll and moving to a sub-contractor role to provide both parties 
with more flexible working arrangements.  Savings and efficiencies should 
continue to be seen as sub-contractors are increasingly used in 2017-18. 
 
Accident investigation income, although slightly down year on year plays a 
significant role in publicly demonstrating QLM's competence and level of 
expertise.  QLM continues to provide expert witness testimony for civil and 
criminal cases and has been engaged by the Health and Safety Executive, 
environmental health departments, solicitors and insurance companies in support 
of swimming, leisure and service industry cases. 
 
Publications generated GBP6,200 of income in the year ended 31 March 2017.  The 
CIMSPA publications, Risk Assessment Manual and Best Practice Health & Safety 
Operating Procedures were published later than expected by the Institute and 
sales suffered accordingly. 
 
QLM continues to update its technology, including website development, server 
replacement and the utilisation of cloud based systems.  This expenditure is 
essential for the development of the business and to gain efficiencies within 

it. Investment in this area will continue to be a priority in 2017-18. 
 
RSA Environmental Health Limited (RSA) 
 
  * 2017: sales of GBP374,100 yielding a profit of GBP65,100 
  * 2016: sales of GBP413,100 yielding a profit of GBP72,900 
 
The principal activities of the company in the year under review were the 
provision of health and safety consultancy services and training, together with 
the sale of associated health and safety products. 
 
Income has fallen year on year, as RSA continues its transition away from the 
provision of low-margin services to the public sector to higher margin private 
sector services. The benefit of this strategy is seen in the higher gross 
profit margins despite lower revenues. 
 
Over the past year RSA has focused on adapting the company to one that no 
longer relies upon the previous strategy that was geared towards Local 
Authority contracts. This has allowed the business to concentrate its effort on 
supporting schools with their management of health and safety via the 
SafetyMARK service core offering.  This area has seen an increase in growth 
from 2015-16 with the highest turnover achieved since the company moved into 
the schools market. 
 
Indications show that there is a continuing demand despite cost pressures being 
placed on the mainstream schools sector. The SafetyMARK service is proving cost 
effective and is finding favour within its target market. The company seeks 
further growth through provision of services to multi academy trusts to build 
on revenues and increase the client base. Several multi-school partnerships 
have increased the number of schools under contract and this has brought in 
additional revenues. 
 
The independent schools sector is another area where RSA has seen an uplift in 
clients using the SafetyMARK scheme. Cost pressures are less evident in this 
sector and the more complex nature of the schools concerned means that 
generally a higher premium can be commanded. Further marketing and attendance 
at the Independent Schools Bursars Association conference in May 2017 will aim 
to increase revenues from this part of the market. 
 
One London borough council has continued to promote SafetyMARK as an 
alternative safety support service to that previously provided by the local 
authority. The business has seen modest growth in this area in the past year 
with the continued provision of audits and support as well as providing health 
and safety training within the borough. Currently there are 17 schools within 
the borough signed up to the scheme.  Some schools are currently operating with 
no support and free training seminars were provided to increase awareness of 
the SafetyMARK brand. This resulted in new enquiries and an additional school 
signing up. 
 
SG Systems (UK) Limited (SG) 
 
  * 2017: sales of GBP1,414,500 yielding a loss of GBP113,500 
  * 2016: sales of GBP256,700 yielding a loss of GBP68,900 (3.5 months) 
 
In its first full year since joining the Group, SG generated sales of GBP 
1,414,500.  Sales were lower than forecast due to a hiatus in store openings 
and refits from a major grocery customer following its acquisition of another 
retailer.  This, combined with pressure on gross margins caused by the 
depreciation of sterling following the June 2016 EU referendum, has meant that 
the company made a loss for the year. 
 
SG's traditional core customer base of national retail chains in the department 
store, fashion, grocery, stationery and electronics sectors has generally 
continued to trade well during 2016-17.  The significant efforts made by the SG 
sales team during 2016-17 have seen a number of new retail accounts and a 
number of new product lines being launched in response to customer demand which 
will provide a strong platform for growth in 2017-18 and beyond.  Sectorally 
the customer base has also diversified with a series of projects implemented in 
a range of non-retail sectors, including construction, school libraries, 
prisons/secure units, tourist attractions and hotels. 
 
During the year closer operational links have developed with B to B and these 
will deepen further during the 2017-18 financial year. SG's key priorities for 
2017-18 are to grow sales through the introduction of new products in existing 
accounts and new accounts and to improve efficiency of stock management and 
technical delivery. 
 
PHSC plc 
 
  * 2017: net loss of GBP501,100 before management charges, exceptional costs and 
    dividends received 
  * 2016: net loss of GBP479,600 before management charges, exceptional costs and 
    dividends received 
 
The parent company incurs costs on behalf of the group and does not generate 
any income. The costs incurred by PHSC plc represent the costs of running an 
AIM listed group and are consistent with the previous year. 
 
 
On behalf of the board 
 
 
Stephen King 
Group Chief Executive 
 
11 August 2017 
 
 
 
Group Statement of Financial Position 
 
As at 31 March 2017 
 
                                                           2017             2016 
                                                           GBP                GBP 
 
Non-Current Assets 
 
Property, plant and equipment                              626,224          675,345 
 
Goodwill                                                   3,878,463        4,503,654 
 
Deferred tax asset                                         21,693           497 
 
                                                           4,526,380        5,179,496 
 
 
 
Current Assets 
 
Inventories                                                487,367          416,371 
 
Trade and other receivables                                1,447,493        1,894,875 
 
Cash and cash equivalents                                  206,719          256,558 
 
                                                           2,141,579        2,567,804 
 
 
 
Total Assets                                               6,667,959        7,747,300 
 
 
 
Current Liabilities 
 
Trade and other payables                                   1,064,358        1,221,599 
 
Current corporation tax payable                            -                103,403 
 
Deferred consideration                                     -                200,000 
 
Contingent consideration                                   25,000           - 
 
                                                           1,089,358        1,525,002 
 
 
 
Non-Current Liabilities 
 
Deferred tax liabilities                                   57,800           62,755 
 
Deferred consideration                                     -                75,000 
 
                                                                            - 
 
                                                           57,800           137,755 
 
 
 
Total Liabilities                                          1,147,158        1,662,757 
 
 
 
Net Assets                                                 5,520,801        6,084,543 
 
 
 
Capital and reserves attributable to equity holders of 
the Company 
 
Called up share capital                                    1,467,726        1,308,634 
 
Share premium account                                      1,916,017        1,751,358 
 
Capital redemption reserve                                 143,628          143,628 
 
Merger relief reserve                                      133,836          133,836 
 
Retained earnings                                          1,859,594        2,747,087 
 
                                                           5,520,801        6,084,543 
 
 
 
Group Statement of Comprehensive Income 
 
For the year ended 31 March 2017 
 
                                                           2017              2016 
                                                           GBP                 GBP 
 
Continuing operations: 
 
Revenue                                                    7,162,299         7,004,340 
 
Cost of sales                                              (3,988,623)       (3,803,240) 
 
Gross profit                                               3,173,676         3,201,100 
 
Administrative expenses                                    (3,319,092)       (2,930,931) 
 
Administrative expenses - exceptional                      (625,191)         (608,936) 
 
Other income                                               1,560             - 
 
Other income - exceptional                                 50,000            - 
 
Loss from operations                                       (719,047)         (338,767) 
 
Finance income                                             471               1,052 
 
Finance costs                                              (2,117)           (8) 
 
Loss before taxation                                       (720,693)         (337,723) 
 
Corporation tax credit                                     29,495            (75,920) 
 
Loss for the year after tax attributable to 
owners 
 
of the parent                                              (691,198)         (413,643) 
 
Other comprehensive income                                 -                 - 
 
Total comprehensive income attributable to 
owners of 
 
the parent                                                 (691,198)         (413,643) 
 
Basic and diluted Earnings per Share from                  (4.92)p           (3.23)p 
continuing operations 
 
 
 
Group Statement of Changes in Equity 
 
For the year ended 31 March 2017 
 
                                               Merger    Capital 
                             Share    Share    relief    Redemption Retained 
                             Capital  Premium  reserve   Reserve    Earnings  Total 
                             GBP        GBP        GBP         GBP          GBP         GBP 
 
 
 
Balance at 1 April 2015      1,268,634 1,751,358 79,836    143,628    3,355,410 6,598,866 
 
Loss for year attributable   -         -         -         -          (413,643) (413,643) 
to equity holders 
 
Issue of shares on           40,000    -         54,000    -          (4,385)   89,615 
acquisition 
 

Dividends                    -         -         -         -          (190,295) (190,295) 
 
Balance at 31 March 2016     1,308,634 1,751,358 133,836   143,628    2,747,087 6,084,543 
 
 
 
 
Balance at 1 April 2016      1,308,634 1,751,358 133,836   143,628    2,747,087 6,084,543 
 
Loss for year attributable   -         -         -         -          (691,198) (691,198) 
to equity holders 
 
Issue of shares on           159,092   164,659   -         -          -         323,751 
acquisition 
 
Dividends                    -         -         -         -          (196,295) (196,295) 
 
Balance at 31 March 2017     1,467,726 1,916,017 133,836   143,628    1,859,594 5,520,801 
 
Group Statement of Cash Flows 
 
For the year ended 31 March 2017 
 
 
                                                           2017             2016 
                                                 Note      GBP                GBP 
 
Cash flows from operating activities: 
 
Cash generated from operations                   I         124,925          414,062 
 
Interest paid                                              (2,117)          (8) 
 
Tax paid                                                   (100,061)        (83,041) 
 
Net cash generated from operating activities               22,747           331,013 
 
Cash flows used in investing activities 
 
Purchase of property, plant and equipment                  (2,087)          (35,654) 
 
Payments in relation to acquisitions (net of               -                (262,674) 
cash acquired) 
 
Disposal of fixed assets                                   1,574            724 
 
Interest received                                          471              1,052 
 
Net cash used in investing activities                      (42)             (296,552) 
 
Cash flows used by financing activities 
 
Payment of deferred consideration                          (200,000)        (50,000) 
 
Proceeds from placement of shares                          323,751          - 
 
Dividends paid to Group shareholders                       (196,295)        (190,295) 
 
Net cash used by financing activities                      (72,544)         (240,295) 
 
Net decrease in cash and cash equivalents                  (49,839)         (205,834) 
 
Cash and cash equivalents at beginning of year             256,558          462,392 
 
Cash and cash equivalents at end of year                   206,719          256,558 
 
 
Notes to the Group Statement of Cash Flows 
 
 
                                                           2017             2016 
                                                           GBP                GBP 
 
I. CASH GENERATED FROM OPERATIONS 
 
Operating loss - continuing operations                     (719,047)        (338,767) 
 
Depreciation charge                                        44,089           46,882 
 
Goodwill impairment                                        625,191          608,936 
 
Fair value movement in contingent consideration            (50,000)         - 
 
Loss on sale of fixed assets                               5,545            2,298 
 
Increase in inventories                                    (70,996)         (28,179) 
 
Decrease/(increase) in trade and other                     447,384          381,937 
receivables 
 
(Decrease)/increase in trade and other payables            (157,241)        (259,045) 
 
Cash generated from operations                             124,925          414,062 
 
 
 
Notes to the results announcement of PHSC plc 
 
The financial information set out above does not constitute the Group's 
financial statements for the years ended 31 March 2017 or 31 March 2016, but is 
derived from those financial statements. Statutory financial statements for 
2016 have been delivered to the Registrar of Companies and those for 2017 have 
been approved by the board and will be delivered after dispatch to 
shareholders. The auditors have reported on the 2016 and 2017 financial 
statements which carried an unqualified audit report, did not include a 
reference to any matters to which the auditor drew attention by way of emphasis 
and did not contain a statement under section 498(2) or 498(3) of the Companies 
Act 2006. 
 
While the financial information included in this announcement has been computed 
in accordance with International Financial Reporting Standards (IFRS), this 
announcement does not in itself contain sufficient information to comply with 
IFRS. The accounting policies used in preparation of this announcement are 
consistent with those in the full financial statements that have yet to be 
published. 
 
Annual General Meeting 
 
This year's annual general meeting ("AGM") will be held at 10.00am on Monday 11 
September 2017 at The Old Church, 31 Rochester Road, Aylesford, Kent ME20 7PR. 
 
The report and accounts and notice of the AGM will be posted to shareholders on 
or around 15 August 2017 and will be available to view on the Company's website 
at www.phsc.plc.uk 
 
Dividend 
 
No final dividend is proposed but an interim dividend may be considered if 
progress continues 
 
 
 
 
 
END 
 

(END) Dow Jones Newswires

August 11, 2017 02:00 ET (06:00 GMT)