PHSC Plc Final Results for the year ended 31 March 2022

 
TIDMPHSC 
 
2 August 2022 
 
                                   PHSC PLC 
 
                    ("PHSC", the "Company" or the "Group") 
 
                Final Results for the year ended 31 March 2022 
 
      Availability of Annual Report and Notice of Annual General Meeting 
 
PHSC (AIM: PHSC), a leading provider of health, safety, hygiene and 
environmental consultancy services and security solutions to the public and 
private sectors, announces its audited results for its financial year ended 31 
March 2022. 
 
Financial Highlights 
 
.    Underlying EBITDA of £0.274m compared to £0.505m in the prior year 
 
.    Statutory loss after tax of £0.631m compared to a profit after tax of £ 
0.087m in the prior year, mainly due to writing off goodwill in respect of the 
Security Division 
 
.    Security Division impairment plus other goodwill impairments totalling £ 
0.793m 
 
.    Group sales revenue of £3.571m, up from £3.289m in the prior year 
 
.    Income augmented by £30k of pandemic-related grant funding, £411k less 
than the prior year 
 
.    Group net assets declined to £3.513m following goodwill impairments 
 
.    Statutory loss per share of 4.76p compared to earnings per share of 0.60p 
in the prior year 
 
.    2,830,238 ordinary shares bought back and subsequently cancelled (post 
period end), representing 19% of those formerly in issue 
 
.    Cash reserves of £0.649m at year end post completion of share buybacks, 
down from £1.237m for the prior year 
 
.    Final dividend of 0.5p proposed, making a total of 1.0p for the year 
matching the prior year's total 
 
                                                             31.3.22        31.3.21 
 
                                                                   £              £ 
 
(Loss)/profit before tax                                   (577,798)        189,988 
 
Less: interest received                                        (388)          (999) 
 
Add: depreciation                                             58,812         65,619 
 
Add: impairment of B2BSG Solutions Limited goodwill          676,178        200,000 
 
Add: impairment of Inspection Services (UK) Limited          117,240              - 
goodwill 
 
Add: impairment of RSA Environmental Health Limited                -         50,000 
goodwill 
 
Underlying EBITDA*                                           274,044        504,608 
 
* - Underlying EBITDA is calculated as earnings before interest, tax, 
depreciation, impairment charges and non-recurring costs.  This is used by the 
board as a measure of underlying trading and has been provided to assist 
shareholders in understanding the Group's trading activities. 
 
Annual General Meeting and Availability of full 2022 Annual Report 
 
This year's annual general meeting (AGM) will be held at 10.00 a.m. on 
Thursday, 29 September 2022 at The Old Church, 31 Rochester Road, Aylesford, 
Kent ME20 7PR. 
 
The full annual report and accounts for the financial year to 31 March 2022 and 
notice of AGM are expected to be posted to shareholders on or around 2 August 
2022 and will shortly be made available to download from the Company's website 
at: www.phsc.plc.uk. 
 
Dividend 
 
The Company confirms that, subject to shareholder approval at the AGM, the 
final dividend of 0.5p will be payable on 14 October 2022 to shareholders on 
the register on 30 September 2022. 
 
For further information please contact: 
 
PHSC plc 
 
Stephen King 
              Tel: [phone] 
 
[e-mail] 
 
www.phsc.plc.uk 
 
Strand Hanson Limited (Nominated Adviser) 
 
James Bellman / Matthew Chandler                                           Tel: 
020 7409 3494 
 
Novum Securities Limited (Broker) 
 
Colin Rowbury 
              Tel: [phone] 
 
About PHSC 
 
PHSC, through its trading subsidiaries, Personnel Health & Safety Consultants 
Limited, RSA Environmental 
Health Limited, QCS International Limited, Inspection Services (UK) Limited and 
Quality Leisure Management Limited, provides a range of health, safety, 
hygiene, environmental and quality systems consultancy and training services to 
organisations across the UK. In addition, B2BSG Solutions Limited offers 
innovative security solutions including tagging, labelling and CCTV. 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulation 
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of 
the European Union (Withdrawl) Act 2018 (as amended). 
 
CHIEF EXECUTIVE OFFICER'S REPORT 
 
On behalf of the board, I am pleased to present my review of the Group's 
progress during the financial year 2021-22 as it left the pandemic behind and 
transitioned towards a more normal trading pattern. During this reporting 
period we successfully completed our second share buyback programme, the 
initial programme having been documented in last year's report as a post 
balance sheet event.  Further details are set out later in this report along 
with specific details on each subsidiary's performance. 
 
General business review and outlook 
 
The overall uplift in sales revenue is welcome, and to a large extent offset 
the significant reduction in government grants associated with the pandemic. 
However, the costs associated with delivering our services greatly increased. 
This was due in part to the resumption of routine expenditure on office 
materials, travel and the like which had been largely suppressed during 
lockdown. In addition, the return to 100% of salary for those on the 
Coronavirus Job Retention Scheme (CJRS) had a sizeable impact. Considering 
performance in the round, the board is pleased that the Group has returned to a 
position where trading is profitable and cash generative. 
 
Post-pandemic it became clear to the board that the market for products and 
services provided by the Security Division had been badly affected by changes 
in shopping habits and an acceleration of the shift toward on-line purchasing. 
With its predominantly retail sector client base, this left B2BSG Solutions 
Limited (B2BSG) exposed to greatly reduced sales from a diminishing number of 
clients. Accordingly, the board believed it prudent and appropriate to write 
off the carrying value of this division whilst continuing to assist management 
in their attempts to turn its fortunes around.  Similarly, a view was taken 
that stock values should be impaired in recognition of the lower demand for 
electronic article surveillance (EAS) equipment. The majority of this product, 
nevertheless, remains current and serviceable. It is worth noting that B2BSG 
has reported a pre-management charges profit of approximately £10k for Q1 of 
the current financial year which is an improvement on the loss-making situation 
at the same stage in 2021-22. 
 
As has been explained previously, the Security Division is affected by exchange 
rate fluctuations, with all EAS equipment being sourced from abroad and paid 
for in Euros or US dollars. Exchange rate movements have seen a general 
weakening of Sterling versus the USD with rates recently touching a two-year 
low. 
 
Our Systems Division saw both revenue and profits rise by around 50% in 
response to the lifting of restrictions in Scotland where it is based, and the 
ability to return to face-to-face training delivery for those clients that 
preferred this. 
 
The Safety Division performed very well and benefited from a large contract for 
COVID-19 testing which was on a commission basis. This is explained further 
below with respect to the results for Personnel Health and Safety Consultants 
Limited (PHSCL). 
 
It is noted that the Group's cash reserves at the financial year end (£0.649m) 
were around half that of 2020-21 (£1.237m) despite the Group being 
cash-generative in terms of normal trading. Such reduction is due to the 
successful implementation of our share buyback programmes resulting in over 
2.8m ordinary shares being acquired into treasury and subsequently cancelled 
post period end. The total spent on buybacks during the year was circa £0.65m 
inclusive of legal fees and brokerage. 
 
Now that we have a well-established and proven mechanism, the board is again 
seeking shareholder approval for a replenished share buyback authority at the 
Company's forthcoming AGM.  No decision has been made as to whether or when, if 
duly approved at the AGM, any further buyback programme will take place. This 
will be determined by periodically assessing the Group's cash position and any 
anticipated call on resources for other purposes. Accordingly, the proposed 
renewed authority simply provides the board with maximum flexibility that it 
may or may not choose to exercise. 
 
The Group's current cash position is approximately £0.718m which is more than 
sufficient to meet its needs for the foreseeable future and to cover the 
proposed dividend. An advantage of having fewer shares in issue is that the 
cash required to maintain the dividend at its current level per share is around 
20% lower than it would otherwise have been.  In addition to maintaining a 
strong bank balance, HSBC Bank plc provides us with a facility of £50,000 to 
draw upon should the need arise which is due for renewal in October 2022. The 
board expects to renew the facility at its present level but does not currently 
anticipate having to draw upon it. 
 
The Group confirms that it did not apply for any Government loan monies 
available to support UK businesses through the pandemic. 
 
Net asset value 
 
As stated in the general business review section above, the board has written 
off the entire carrying value of the Security Division (B2BSG) as a consequence 
of the decline in demand for the goods and services that it provides and a 
highly competitive marketplace. This impairment has resulted in a reduction in 
assets of £0.676m. From a routine review of the carrying value of the other 
subsidiaries, the board has determined that Inspection Services (UK) Ltd is 

overvalued and should also be written down by approximately £0.117m. No other 
subsidiaries are believed to be held at inflated values based on their 
prospects for the current year and the foreseeable future. 
 
The year-end consolidated net assets, further to the goodwill impairments and 
expenditure on share buybacks, total approximately £3.513m. Based on the number 
of shares currently in issue this equates to approximately 30p per ordinary 
share versus a prevailing mid-market price of approximately 26.5p. The board 
welcomes the narrowing of the gap between the Company's asset value and market 
share price. 
 
Outlook 
 
The Group is not immune from the uncertainty in both the domestic and 
macroeconomic environments. Costs have been increasing across all areas, with 
notable uplifts to the cost of accommodation, energy supply, and travel 
including fuel. Management have sought to help defray some of the impact on 
employees by awarding generous pay rises albeit below the headline figure for 
inflation. We have generally found that the market for both administrative 
staff and fee-earning professionals has become far more competitive, which has 
raised the expectations of current and prospective new employees. There is 
limited scope to pass on the effects of these additional costs to our clients, 
resulting in margins being squeezed. 
 
Despite the difficult trading environment, we are confident that the Group can 
remain profitable and cash-generative throughout the year. The management team 
are always seeking ways to work more productively and to reduce costs to the 
lowest level reasonably practicable. 
 
Trading update 
 
According to the most recent set of management accounts (unaudited), in Q1 the 
Group generated revenue of approximately £0.854m and EBITDA of approximately £ 
96k.  This compares well with the Q1 position last year which showed income of 
approximately £0.926m and EBITDA of approximately £72k. 
 
Dividends 
 
A total dividend of 1.0p per ordinary share (£146,772) was paid in respect of 
the financial year ended 31 March 2021.  An interim dividend of 0.5p in respect 
of the financial year ended 31 March 2022 was paid in February 2022 and, 
subject to shareholder approval, a final dividend of 0.5p to be paid from 
earnings from the financial year ended 31 March 2022 is proposed for payment in 
October 2022, thereby matching last year's total. Following the share buyback 
programmes completed in 2021-22, the cost of the final dividend will fall 
approximately 19% from £73,386 to £59,235. 
 
PERFORMANCE BY TRADING SUBSIDIARY 
 
The Group currently measures the following key performance indicators (KPIs). 
 
Total revenues 
 
Total revenues are reviewed each month across the Group to provide the board 
with a ready measure of how well the Group and underlying businesses are 
performing relative to historical data.  It enables any trend to be detected, 
understood and acted upon as appropriate.  Consolidated Group revenues 
(excluding government grant funding) for the year increased by 8.5%. 
 
Earnings before interest, taxation, depreciation, amortisation and 
non-recurring costs (underlying EBITDA) 
 
The Group's underlying EBITDA decreased from £504,608 in 2020-21 to £274,044 in 
2021-22 with the improvement in business activity failing to outweigh the 
reduction in COVID-19 support funding which dropped from £441,125 to £29,527. 
 
Staff turnover 
 
Staff turnover is monitored as the key asset of each subsidiary is its 
workforce.  Recruiting replacement staff is an expensive task and it is not 
always possible to compensate for the specialised knowledge that may be lost 
when an employee departs.  During the year, five people left the employment of 
the Group and five people joined, resulting in the total number of employees at 
the year-end remaining unchanged at 44. 
 
Pre-tax profit/(loss) per subsidiary before Group management charges 
 
Profit before tax and management charges is reviewed by each subsidiary and by 
the board every month. Each subsidiary director provides a commentary to enable 
the board to establish whether intervention of any kind is appropriate. 
 
A summary of the results and activities of our trading subsidiaries is set out 
below. Where relevant, government grant funding is excluded from revenues, but 
included in profits. Performance is based on those factors within a subsidiary 
director's control, so results are shown exclusive of management charges and 
taxation and any impairment judged necessary.  The Group covers its own 
management costs by levying a charge on each subsidiary and derives other 
income through the receipt of dividends from its subsidiaries. 
 
B2BSG Solutions Limited (B2BSG) 
 
  * 2022: revenues of £749,200 yielding a loss of £79,200 after a slow-moving 
    stock write down of £55,000 
  * 2021: revenues of £1,136,600 yielding a profit of £13,800 
 
The COVID-19 pandemic that drastically affected the previous year continued to 
have an adverse impact, with many of B2BSG's clients having downsized their 
operations or ceased trading entirely. 
 
High street shops were able to reopen in mid-April 2021 in England, with some 
variation elsewhere in the UK. This enabled the Company to bring staff back to 
work and to cease reliance on the CJRS.  Only £3k of CJRS funding was received 
in 2021-22 representing a significant reduction from around £133k in the prior 
year. 
 
Sales revenues came in at £749k compared with £1.137m in the previous year. 
There was an EBITDA loss of £65k for the year, after discounting exceptional 
items (£7.6k of redundancy pay and £3.4k of bad debts) and before management 
charges. The £3.4k of bad debts compares favourably with debts of £22k written 
off in the previous year. 
 
Employment costs were lower, as staff numbers were reduced. Some office space 
was returned to the relevant landlord and a lower rental charge was incurred. 
One notable area where costs rose was in carriage, where shipping fees went up 
in some cases by a factor of ten, due to a worldwide shortage of capacity.  All 
of the Company's products are imported. 
 
Management expectations are for B2BSG to hold its own in 2022-23 and to see an 
improvement in the following year. As stated earlier, Q1 performance has seen a 
profit of around £10k per the unaudited management accounts. Ultimately, the 
performance of the business will be largely dependent on the fortunes of the 
retail sector and management's ability to negotiate shocks to the global 
economy. Any further deterioration in foreign exchange rates will harm the 
Company's prospects. 
 
Inspection Services (UK) Limited (ISL) 
 
  * 2022: revenues of £186,600 yielding a profit of £8,700 
  * 2021: revenues of £213,900 yielding a profit of £31,500 
 
ISL achieved revenues of £186,600 which is a reduction of £27,300 versus the 
prior year figure of £213,900. This led to a reduced EBITDA before management 
charges of £18,600 compared to £41,300 in 2020-21. Despite the lower sales, 
costs remained at the same level as the previous year with notable rises in 
vehicle and travel expenses. Hotel accommodation in particular was more 
expensive than expected. This was caused by higher prices following the lifting 
of COVID-19 lockdown restrictions along with the failure of providers to pass 
on the effects of a reduction in VAT to clients. 
 
Approximately two-thirds of the Company's business is placed by insurance 
brokers on behalf of their clients, with the remaining third being sales made 
directly to clients. When work is introduced through an insurance broker, a 
commission becomes payable. 
 
There have been a small number of former clients who ceased trading during the 
pandemic or disposed of some work equipment which led to a reduction in the 
requirement to conduct examinations. It has not been possible to make up the 
shortfall with new clients at this stage. 
 
Personnel Health & Safety Consultants Limited (PHSCL) 
 
  * 2022: revenues of £1,283,100 yielding a profit of £351,000 
  * 2021: revenues of £968,900 yielding a profit of £498,000 
 
Turnover exceeded £1m for the first time in several years. This was as a result 
of a one-off contract with an invoice value of over £400k for supporting 
clients in the provision of COVID-19 testing services. The work was carried out 
by external medical specialists and generated a 5% premium for PHSCL.  The 
profit of £351,000 was lower than the previous year and reflected an increased 
use of subcontractors.  The team worked incredibly hard for the first three 
quarters of the year, but staff utilisation was lower in Q4 for a number of 
reasons that have subsequently been addressed and rectified by management. The 
Safety Division is focussing on acquiring an online management system to 
support its clients in monitoring their compliance status, particularly those 
with multiple sites. This should support the sales and marketing functions who 
will be able to pitch for larger contracts where an online offering is 
increasingly becoming a prerequisite of the tender process. 
 
QCS International Limited (QCS) 
 
  * 2022: revenues of £724,100 yielding a profit of £189,600 
  * 2021: revenues of £500,700 yielding a profit of £121,100 
 
Despite the pandemic placing varied and changing constraints on the business, 
the year saw sales and profits approaching levels last achieved prior to the 
health emergency.  Whilst training was impacted considerably, consultancy work 
has been buoyant and has made a significant contribution towards compensating 
for lost training revenue.  By the end of the financial year, training was 
beginning to approach previous levels, suggesting that the trend is towards 
more normal operating conditions. 
 
Consultancy activity for the year was above normal (pre-pandemic) levels.  This 
was due to a combination of new client activity, continued interest in the UK 

Responsible Person services for medical devices, and excellent levels of repeat 
business. Sales for consultancy approached £400,000 for the year ended 31 March 
2022, which is a record performance for QCS. 
 
The pandemic caused revenue from public (face-to-face) training to drop to £ 
112,000 from the previous year as there were times during 2021-22 when training 
was constrained. Nevertheless, income generated from those periods when 
training was possible resulted in income more than doubling year on year to £ 
237,000.  By Q4 it was pleasing to note that training income had fully 
recovered. 
 
In January 2022, the Company lost the services of one of its key consultants 
who specialised in medical device work and recruitment of a possible 
replacement remains ongoing in what is a difficult and competitive market.  A 
new consultant was engaged at the very end of the financial year to support 
broader quality/environmental and health and safety services. 
 
Quality Leisure Management Limited (QLM) 
 
  * 2022: revenues of £323,600 yielding a profit of £100,900 
  * 2021: revenues of £234,300 yielding a profit of £99,700 
 
QLM started the financial year with most, if not all, support service and 
retained clients either closed or heavily restricted under COVID-19 
legislation. This severely restricted the generation of additional income from 
activities such as auditing.  These restrictions continued throughout the 
period and, whilst easing gradually, restrictions of some kind remained in 
place for most of the year. 
 
The health and safety support service was the least affected income stream. 
Guidance in respect of changes in COVID-19 legislation and best practice were 
topical questions together with the recommissioning of equipment and 
facilities. 
 
Profitability improved at the start of Q3 as facilities progressively reopened 
and restrictions were relaxed to varying degrees. Auditing and training became 
the priority as previously closed or restricted facilities began to focus on 
ensuring normal health and safety standards were in place and that staff were 
competent to achieve or maintain them. Audits were and continue to be, a strong 
part of the business. 
 
Following the development of videoconferencing courses last year, this delivery 
method remains popular. In addition to reducing staff travel time and costs 
recharged to clients, it enables greater accessibility to those companies only 
requiring a small number of participants. 
 
QLM has been involved as an expert witness in several legal cases in recent 
years. With the legal system returning to relative normality post-pandemic, 
this aspect of the business remains active. 
 
RSA Environmental Health Limited (RSA) 
 
  * 2022: revenues of £304,000 yielding a profit of £53,600 
  * 2021: revenues of £235,100 yielding a profit of £57,400 
 
Revenue was up by 29% to £304,000 despite the first half of the financial year 
continuing to be affected by the COVID-19 pandemic and associated lockdowns. 
The pandemic severely affected revenue in Q1 and Q2 because RSA's largest 
marketplace is the education sector. Most of the school-based income reflects a 
two-year audit and consultancy cycle.  With lockdowns and effective school 
closures in the corresponding period in 2020-21, no new contracts were set up 
at that time, so no second-year payments fell due. It was not until Q3 that the 
cycle of second payments started to come through. In other areas there has been 
a slow return to normal operations.  As restrictions eased, audits were booked 
for our NHS and hospitality clients and in the latter part of the year revenue 
from these sectors has returned to pre-pandemic levels with the employed staff 
working at full capacity. 
 
In previous years, the focus of the Company had been on the SafetyMARK brand, 
providing safety services to the school sector.  Efforts have been made to 
diversify revenue streams and this is resulting in a more even spread of income 
across the five main services namely, training, SafetyMARK, health and safety 
consultancy, health and safety advisory services and food safety consultancy. 
Almost £100,000 of the total revenues was generated by the combined health and 
safety streams, showing the success of the diversification strategy. 
 
SafetyMARK services saw revenues recover to finish above expectations at £ 
82,000. For the latter part of the year, revenues were above previous years, 
and this strong demand continues. 
 
Food safety consultancy has seen a return to pre-pandemic levels of demand. 
Recently, some clients have increased the level of service required because of 
the upturn in fortunes for the wider hospitality sector. 
 
PHSC plc 
 
  * 2022: net loss of £409,200 before management charges, exceptional costs, 
    interest and dividends received 
  * 2021: net loss of £382,400 before management charges, exceptional costs, 
    interest and dividends received 
 
The Company incurs costs on behalf of the Group and does not generate any 
income; the costs relate to running an AIM quoted Group. The 7% increase in the 
net loss is due to the reduction in CJRS funding from £45,300 in 2020-21 to £ 
3,700 in 2021-22. 
 
PRINCIPAL RISKS AND UNCERTAINTIES 
 
Pandemic 
 
The financial impact of the coronavirus pandemic eased in the second half of 
the financial year with business activity starting to return to pre-pandemic 
levels. Inevitably, there are legacy impacts in particular on the high street 
where consumers' shopping habits have shifted towards on-line ordering, and 
this is a concern to the security division where retail outlets form a 
significant part of its customer base. Conversely, the systems and safety 
divisions are experiencing a rebound in activity as clients catch up on 
projects that were deferred or cancelled in the previous year. The Group's 
ability to deliver services remotely as an alternative to a face-to-face 
offering is more appealing to some customers and this alternative continues to 
be offered where appropriate. 
 
Regulatory/Marketplace 
 
Approximately 50% of the Group's work involves assisting organisations with the 
implementation of measures to meet regulatory requirements relating to health 
and safety at work. If the regulatory burden was to be substantially lightened, 
for example if the government embarked upon a programme of radical 
deregulation, there could be less demand for the Group's services.  Changes to 
the operation of the employer's liability insurance system, as proposed in some 
quarters, could reduce the incentive for organisations to buy in 
claims-preventive services such as health and safety advice.  In mitigation of 
these risks, the board has diversified the Group's range of offerings, for 
example, through investing in its Systems Division and is exploring 
non-regulatory areas of environmental work to add to the current portfolio of 
services. 
 
The Group's Security Division works almost exclusively in the retail sector, 
and this has continued to suffer as a result of weak consumer demand on the 
high street and the move towards on-line purchasing which accelerated during 
the COVID-19 pandemic.  Any further material deterioration in the retail sector 
and specifically in B2BSG's client base would have a significant negative 
effect on the Company's and hence the Group's prospects. To mitigate any future 
negative effects, the Group has written off the investment value of its 
Security Division and has made a significant financial provision against the 
value of stock held in its warehouse. 
 
Technological 
 
The Group's website is a primary source of new business.  If the website became 
inaccessible for protracted periods, or was subject to "hacking", this may 
prejudice the opportunity to obtain new business.  Additionally, the increase 
in the use of the internet for satisfying business requirements may lead to a 
reduction in demand for face-to-face consultancy services and the number of 
training courses commissioned may be affected by moves towards screen-based 
interactive learning. 
 
The subject of IT security is regularly reviewed by the board to ensure that 
appropriate strategies are in place. The Aylesford based businesses (PHSC plc, 
PHSCL, ISL) have obtained certification to Cyber Essentials standard and all 
staff across the Group have participated in on-line training to reduce the risk 
of falling victim to phishing and other such scams.  All head office data is 
backed up to the Cloud and removeable hard drives attached to the physical 
server are rotated on a daily basis. 
 
Personnel 
 
Generally, there is an excess of demand over supply for health and safety 
professionals. Those with sufficient qualifications and experience to be 
suitable for consultancy roles are in the minority.  This has the combined 
effect of making it difficult for the Group to source suitable personnel and 
having to offer higher remuneration packages to attract them.  The Group is 
dependent upon its current executive management team. Whilst it has entered 
into contractual arrangements with the aim of securing the services of these 
personnel, the retention of their services cannot be guaranteed.  Accordingly, 
the loss of any key member of management of the Group may have an adverse 
effect on the future of the Group's business. The Group and each subsidiary 
have contingency plans in place in the event of incapacity of key personnel. 
 
Geographical 
 
The Group offers a nationwide service, but a number of organisations see 
benefit in using consultancies that are local to them and internet search 
engines favour local providers.  With offices in Kent, Berkshire, 
Northamptonshire and Scotland, the Group has a good geographical spread. 
 
Licences 
 
The Group is reliant on licences and accreditations to be able to carry on its 
business.  The temporary loss of, or failure to maintain, any single licence or 
accreditation would be unlikely to be materially detrimental to the Group, as 

the directors believe that this could be remedied.  However, if the Group fails 
to remedy any loss of, or does not maintain, any licence or accreditation, this 
will have a material adverse effect on the business of the Group.  The Group 
has internal processes in place to ensure that the licences and accreditations 
are maintained. 
 
SECTION 172 STATEMENT 
 
The Companies (Miscellaneous Reporting) Regulations require large companies to 
publish a statement describing how the directors have had regard to the matters 
set out in section 172 (1) (a) to (f) of the Companies Act 2006. These sections 
require directors to act in a way most likely to promote the success of the 
Group for the benefit of its stakeholders and with regard to the following 
matters. 
 
The likely consequences of any decision in the long-term 
 
The board receives an annual business plan from the managing director of each 
subsidiary company, which forms the basis of the Group's strategic plan. The 
board requires that the plans include financial forecasts, KPIs, marketing 
strategy and an analysis of strengths, weaknesses, opportunities, and threats. 
Subsidiary directors, via the Group's operational board of which they are 
members, consider the implications of their own plans in the context of what 
others within the Group are intending to do and the opportunities for synergies 
are explored. Any proposed actions that may adversely affect another subsidiary 
are flagged at operational board level and are resolved. Subsidiary directors 
are challenged on the content of their plans and the assumptions they have 
made, to ensure that the plans are realistic and achievable. Once agreed by the 
board, this plan, at Group and subsidiary level, is used as the benchmark 
against which to assess performance. 
 
The interests of the Group's employees 
 
As the Group is mainly involved in the supply of services, the board considers 
its staff to be the greatest asset and the interests of employees are taken 
into consideration in all decisions made. Each subsidiary company within the 
Group has in place the necessary structures to ensure effective communication 
with its employees. The subsidiary directors meet once a quarter and relevant 
information is shared with employees via team meetings held at subsidiary 
level.  The views of employees are heard in a similar fashion, initially at 
team meetings, and escalated to the operational board and the main board if 
appropriate. Each subsidiary has its own bonus scheme, based on results for the 
financial year and/or tailor-made targets. There is an annual budget for staff 
training in recognition that the performance of the Group can be improved by 
the development of its employees. 
 
The Group is committed to equality of employment and its policies reflect a 
disregard of factors such as disability in the selection and development of 
employees. A review has been conducted to identify any gender-related pay 
anomalies across the Group and found there to be no such anomalies. 
 
The need to foster the Group's business relationships with suppliers, 
customers, and others 
 
The Group seeks to treat suppliers fairly and adhere to contractual payment 
terms. The Group works with its suppliers to help drive change through 
innovation, promoting new ideas and ways of working.  The Group has 
zero-tolerance to modern slavery and is committed to acting ethically and with 
integrity in all business dealings and relationships. The Group policy for 
Modern Slavery and Human Trafficking contains systems and controls to ensure 
that these activities are not taking place anywhere in the subsidiaries or 
throughout the Group's supply chains and can be viewed on our website 
(www.phsc.plc.uk). 
 
The Group also has zero-tolerance with regards to bribery, made explicit 
through its Anti-Bribery and Corruption Policy. This covers the acceptance of 
gifts and hospitality and any form of unethical inducement or payment including 
facilitation payments and "kickbacks". The policy sets out the responsibilities 
of directors, employees and contractors and details the procedures in place to 
prevent bribery and corruption. This policy is also available on our website. 
 
Each subsidiary is focussed on its customers. Communication takes many forms 
and is structured according to how each subsidiary interacts with its client 
base. Channels of communication include quarterly newsletters in hard copy and/ 
or sent electronically, customer roadshows, interaction via various social 
media platforms (Twitter, LinkedIn and Facebook) and regular client meetings. 
An ongoing dialogue is held electronically, with most clients subscribing to 
email updates that are sent out periodically. 
 
Stephen King is the principal contact between the Company and its investors, 
with whom he maintains a regular dialogue.  The Company is committed to 
listening to and communicating openly with its shareholders to ensure that its 
business model and performance are understood. Regular announcements are made 
to the market and the AGM provides a forum for information dissemination, 
discussion, and feedback. 
 
The impact of the Group's operations on the community and the environment 
 
The board's intention is to behave responsibly and ensure that management 
operates the business in a responsible manner, complying with high standards of 
business conduct and good governance. The Group has a long tradition of 
supporting local causes through sponsorship and community involvement, details 
of which can be found on our website. The directors are aware of the impact of 
the Group's business on the environment but believe this to be minimal due to 
the nature of its operations. 
 
GOING CONCERN 
 
Company law requires the directors to consider the appropriateness of the going 
concern basis when preparing the financial statements. Cash reserves ended the 
year at a high level despite the completion of two successful share buybacks 
requiring total funding (including costs) of £644,700 in the year ended March 
2022. The board is satisfied that such reserves, along with the Group's 
cash-generative trading position and (unused) credit facility will ensure that 
there are sufficient resources to continue in operational existence for the 
foreseeable future. The directors therefore continue to adopt the going concern 
basis of accounting in preparing the annual financial statements. 
 
On behalf of the board, I must once again thank all our shareholders and 
employees for their ongoing loyalty and support.  The board is grateful for the 
continuing spirit of teamwork and mutual support that is enabling the Group to 
move forward positively in the aftermath of the COVID-19 pandemic. 
 
Stephen King 
 
Group Chief Executive Officer 
 
2 August 2022 
 
                     GROUP STATEMENT OF FINANCIAL POSITION 
 
                              as at 31 March 2022 
 
                                                    31.3.22          31.3.21 
                                        Note        £                £ 
 
Non-Current Assets 
 
Property, plant and equipment           5           490,138          529,413 
 
Goodwill                                6           2,235,045        3,028,463 
 
Deferred tax asset                      14          15,591           2,017 
 
                                                    2,740,774        3,559,893 
 
 
 
Current Assets 
 
Stock                                   8           185,685          259,760 
 
Trade and other receivables             7           726,378          590,128 
 
Cash and cash equivalents               9           649,363          1,237,483 
 
                                                    1,561,426        2,087,371 
 
 
 
Total Assets                                        4,302,200        5,647,264 
 
 
 
Current Liabilities 
 
Trade and other payables                11          617,077          518,245 
 
Right of use lease liabilities          13          30,632           31,856 
 
Current corporation tax payable                     55,112           88,011 
 
                                                    702,821          638,112 
 
 
 
Non-Current Liabilities 
 
Right of use lease liabilities          13          24,184           38,865 
 
Deferred tax liabilities                14          61,842           50,988 
 
                                                    86,026           89,853 
 
 
 
Total Liabilities                                   788,847          727,965 
 
 
 
Net Assets                                          3,513,353        4,919,299 
 
 
 
Capital and reserves attributable to equity 
holders of the Group 
 
Called up share capital                 10          1,467,726        1,467,726 
 
Share premium account                   10          1,916,017        1,916,017 
 
Capital redemption reserve                          143,628          143,628 
 
Merger relief reserve                               133,836          133,836 
 
Treasury shares                                     (644,738)        - 
 
Retained earnings                                   496,884          1,258,092 
 
                                                    3,513,353        4,919,299 
 
                      GROUP STATEMENT OF COMPREHENSIVE INCOME 
 
         for the year ended 31 March 2022 
 
                                                    31.3.22           31.3.21 
                                          Note      £                 £ 
 
Continuing operations: 
 
Revenue                                             3,570,626         3,289,462 
 
Cost of sales                             15        (1,938,870)       (1,764,915) 
 
Gross profit                                        1,631,756         1,524,547 
 
Administrative expenses                   15        (1,446,051)       (1,528,160) 
 
Goodwill impairment                       6         (793,418)         (250,000) 
 
Government grants                         16        29,527            441,125 
 
Other income                                        -                 1,477 
 

(Loss)/profit from operations                       (578,186)         188,989 
 
Finance income                            19        388               999 
 
(Loss)/profit before taxation                       (577,798)         189,988 
 
Corporation tax expense                   20        (53,205)          (102,241) 
 
(Loss)/profit for the year after tax 
attributable to owners 
 
of the parent                                       (631,003)         87,747 
 
Other comprehensive income                          -                 - 
 
Total comprehensive (loss)/income 
attributable to owners 
 
of the parent                                       (631,003)         87,747 
 
Basic and diluted (loss)/earnings per 
share from continuing operations          21        (4.76)p           0.60p 
 
 
PHSC PLC 
 
    GROUP STATEMENT OF CHANGES IN EQUITY 
 
         for the year ended 31 March 2022 
 
                                               Capital 
                      Share   Share   Merger   Redemption Treasury Retained 
                      Capital Premium Relief   Reserve    Shares   Earnings Total 
                      £       £       Reserve  £          £        £        £ 
                                      £ 
 
 
 
Balance at 1 April    1,467,726 1,916,017 133,836  143,628    -       1,317,117 4,978,324 
2020 
 
Profit for year       -         -         -        -          -       87,747    87,747 
attributable to 
equity holders 
 
Dividends             -         -         -        -          -       (146,772) (146,772) 
 
Balance at 31 March   1,467,726 1,916,017 133,836  143,628    -       1,258,092 4,919,299 
2021 
 
 
 
Balance at 1 April    1,467,726 1,916,017 133,836  143,628    -         1,258,092 4,919,299 
2021 
 
Loss for year         -         -         -        -          -         (631,003) (631,003) 
attributable to 
equity holders 
 
Dividends             -         -         -        -          -         (130,205) (130,205) 
 
Purchase of own       -         -         -        -          (644,738) -         (644,738) 
shares 
 
Balance at 31 March   1,467,726 1,916,017 133,836  143,628    (644,738) 496,884   3,513,353 
2022 
 
PHSC PLC 
 
                         GROUP STATEMENT OF CASH FLOWS 
 
                       for the year ended 31 March 2022 
 
 
                                                    31.3.22          31.3.21 
                                          Note      £                £ 
 
Cash flows from operating activities: 
 
Cash generated from operations              I       313,530          702,188 
 
Tax paid                                            (89,213)         (37,183) 
 
Net cash generated from operating                   224,317          665,005 
activities 
 
Cash flows used in investing activities 
 
Purchase of property, plant and equipment           (22,117)         (8,739) 
 
Proceeds from disposal of fixed assets              140              4,333 
 
Interest received                                   388              999 
 
Net cash used in investing activities               (21,589)         (3,407) 
 
Cash flows used in financing activities 
 
Payment of lease liabilities                        (15,905)         (33,262) 
 
Purchase of own shares                              (644,738)        - 
 
Dividends paid to shareholders                      (130,205)        (146,772) 
 
Net cash used in financing activities               (790,848)        (180,034) 
 
Net (decrease)/increase in cash and cash            (588,120)        481,564 
equivalents 
 
Cash and cash equivalents at beginning of           1,237,483        755,919 
year 
 
Cash and cash equivalents at end of year            649,363          1,237,483 
 
All changes in liabilities arising from financing relate entirely to cash 
movements. 
 
                  NOTES TO THE GROUP STATEMENT OF CASH FLOWS 
 
                       for the year ended 31 March 2022 
 
                                                    31.3.22          31.3.21 
                                                    £                £ 
 
I. CASH GENERATED FROM OPERATIONS 
 
(Loss)/profit from operations                       (577,798)        188,989 
 
Depreciation charge                                 58,812           65,619 
 
Goodwill impairment                                 793,418          250,000 
 
Loss on sale of fixed assets                        2,441            1,913 
 
Decrease in stock                                   74,075           4,541 
 
(Increase)/decrease in trade and other              (136,250)        295,819 
receivables 
 
Increase/(decrease) in trade and other              98,832           (104,693) 
payables 
 
Cash generated from operations                      313,530          702,188 
 
Notes 
 
The financial information set out above does not constitute the Group's 
financial statements for the years ended 31 March 2022 or 31 March 2021 but is 
derived from those financial statements. Statutory financial statements for 
2021 have been delivered to the Registrar of Companies and those for 2022 have 
been approved by the board and will be delivered after dispatch to 
shareholders. The auditors have reported on the 2021 and 2022 financial 
statements which carried unqualified audit reports, did not include any 
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 compiled 
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 the preparation of this announcement are 
consistent with those in the full financial statements. 
 
Dividends 
 
A total dividend of 1.0p per ordinary share (£146,772) was paid in respect of 
the year ended 31 March 2021; half was paid in February 2021 and the balance in 
October 2021. An interim dividend of 0.5p in respect of the financial year 
ended 31 March 2022 was paid in February 2022 and, subject to shareholder 
approval at the AGM, a final dividend of 0.5p will be payable on 14 October 
2022 to shareholders on the register on 30 September 2022, thereby matching the 
total of 1.0p paid last year. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

August 02, 2022 02:00 ET (06:00 GMT)