PHSC Plc Final Results

 
TIDMPHSC 
 
PHSC PLC 
                        (the "Company" or the "Group") 
 
                Final Results for the year ended 31 March 2018 
 
Financial Highlights 
 
*               Loss after tax of GBP0.16m compared with a loss of GBP0.69m last 
year 
 
*               Underlying EBITDA* profit of GBP0.14m, up from loss of GBP0.10m 
last year 
 
*               Group revenue of GBP7.0m compared with GBP7.2m last year 
 
*               Cash reserves of GBP0.24m at year end compared to GBP0.21m last 
year 
 
*               Write-down of GBP0.20m due to impaired goodwill compared to GBP 
0.63m last year 
 
*               Group net assets at GBP5.29m after goodwill impairment compared 
to GBP5.5m last year 
 
*               Loss per share of 1.09p compared to a loss per share of 4.92p 
last year 
 
*               Final dividend of 0.5p proposed, making a total of 1.0p for the 
year compared to GBPnil last year 
 
                                                             31.3.18        31.3.17 
 
                                                                   GBP              GBP 
 
Loss before tax                                            (145,861)      (720,693) 
 
Less: interest received                                          (3)          (471) 
 
Add: interest paid                                             3,778          2,117 
 
Add: depreciation                                             34,590         44,089 
 
Add: impairment B to B Links Limited goodwill                200,000              - 
 
Add: impairment Adamson's Laboratory Services Limited              -        625,191 
goodwill 
 
Add: redundancy costs regarding closure of Adamson's          47,000              - 
Laboratory Services Limited 
 
Fair value movement on contingent consideration                    -       (50,000) 
 
Underlying EBITDA*                                           139,504       (99,767) 
 
*Underlying EBITDA is calculated as earnings before interest, tax, 
depreciation, impairment charges, non-recurring costs and fair value movement 
on contingent consideration.  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. 
 
Underlying EBITDA announced as part of the trading update on 8 June 2018 was GBP 
184,000.  The difference between this and the final underlying EBITDA of GBP 
139,504, represents an audit adjustment for a non-cash provision in respect of 
slow moving stock of GBP45,000.  This arose following a review of stock with the 
security businesses by management due to the merger of SG Systems (UK) Limited 
and B to B Links Limited and the subsequent audit of stock in those entities 
prior to the finalisation of the accounts.  The adjustment is a non-cash 
adjustment and is included in cost of sales and impacts profit before tax. 
 
Operational highlights 
 
*               Discontinuation of activities related to asbestos management 
 
*               Acceleration of plans to merge the two security technology 
companies 
 
*               Progress towards creation of divisional structures for safety 
and security businesses 
 
For further information please contact: 
 
PHSC plc 
Stephen 
King 
01622 717 700 
[e-mail] 
www.phsc.plc.uk 
 
Strand Hanson Limited (Nominated Adviser)                       020 7409 3494 
Richard Tulloch / Frederick Twist 
 
Novum Securities Limited (Broker)                                           020 
7399 9427 
Colin Rowbury 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulations 
(EU) No. 596/2014. 
 
Strategic Report 
 
On behalf of the board, I present my review of the Group's activities and 
performance in the last financial year and share our views as to the ongoing 
prospects and challenges that we face in the year ahead. 
 
Key developments and outlook 
 
PHSC plc, through its trading subsidiaries, has historically been a leading 
provider of health, safety, hygiene and environmental consultancy services to 
the public and private sectors.  The Group took a decision to diversify into 
security technology and associated systems with the acquisition of B to B Links 
Limited (B to B) in 2012 and increased its interest in the sector by acquiring 
SG Systems (UK) Limited (SG) in 2014.  This led to the majority of the Group's 
revenues last year, for the first time, being derived from the security 
businesses rather than health and safety services.  The pattern has continued 
with security services accounting for 60% of revenues, health and safety 23% 
and quality systems 11%.  The remaining 6% of revenues were generated by 
Adamson's Laboratory Services Limited (ALS) which, as previously reported, was 
closed down during the year. 
 
For our security technology companies, most clients are in the retail sector. 
This means that our businesses are affected by the continued decline of the 
high street, with footfall down as a consequence of on-line sales and, in early 
2018, severely adverse weather conditions.  Taken together with general 
uncertainty over Brexit and the weakness of sterling, this has led to reduced 
opportunities and pressure on gross margins.  The security businesses in 
combination produced a (pre-management charge) profit of GBP27,000 before a 
provision for slow moving stock of GBP45,000 for the Group in 2017/18 compared 
with a loss of GBP61,000 in 2016/17, meaning a positive change of GBP88,000. 
However, the continuing uncertainty in the sector has led the board, after 
consultation with the auditor, to make a provision of GBP200,000 against the 
carrying value of the Group's security division. 
 
With effect from 1 April 2018, the security businesses of B to B and SG were 
combined into a single entity named B2BSG Solutions Limited.  Over the coming 
months it is planned to consolidate the two stock inventories into a single 
warehouse, and to amalgamate and streamline the administration, engineering and 
sales teams.  As part of the planned integration, management conducted a full 
review of stock and together with the auditor, identified slow moving stock for 
which a non-cash provision of GBP45,000 has been made.  There will also be 
changes in the management and reporting structure, and we propose to vacate the 
Amesbury premises in the 2018/19 financial year.  These changes will have some 
initial cost implications but overall are expected to have a net positive 
effect on the Group's finances. 
 
Income for the health and safety businesses continues to originate from a wide 
range of clients across various sectors, and we are particularly strong in 
education, leisure, health and social care, and public transport.  We also 
serve a range of general commercial, public sector and industrial organisations 
across the UK.  In addition, we conduct statutory examinations of plant and 
equipment such as pressure systems, lifting machinery and accessories, and 
other work equipment either directly with clients or through insurance broker 
intermediaries. 
 
During the year we put into effect our decision to close down ALS, which 
operated from premises in Essex and the Midlands.  The Essex office is in the 
process of being sold (subject to contract) and is expected to raise GBP300,000 
of cash after expenses. 
 
An extremely positive performance has been achieved by our QCS International 
Limited (QCS) subsidiary which specialises in consultancy support and training 
in quality systems management.  QCS is looking to take on additional premises 
alongside its existing Cumbernauld office, to help service the consistently 
high level of demand for public training courses. 
 
Our plans to form a safety division are progressing at a natural pace.  The 
lease on The Old Police Station in Northleach, occupied by Quality Leisure 
Management Limited (QLM), expires in 2018 and the subsidiary will be relocating 
to Raunds (Northamptonshire) to take up residence in Blotts Barn.  This is the 
Group-owned accommodation formerly shared between RSA Environmental Health 
Limited (RSA) and ALS.  Now that ALS has ceased operations, the space has 
become available and this move will reduce QLM's premises-related costs.  This 
will mean that the Group will operate from four locations including the 
Aylesford Head Office, with the security division based at Finchampstead 
(Berkshire), the safety division at Aylesford and Raunds, and quality 
management systems delivered from Cumbernauld. 
 
Acquisition payments 
 
There are no outstanding liabilities in respect of former acquisitions and 
currently there are no planned new acquisitions. 
 
Net asset value 
 
As at 31 March 2018, the Group's consolidated net assets stood at GBP5.29m. There 
were 14,677,257 ordinary shares in issue at that date which equates to a net 
asset value per share of 36p. 
 
The company's ordinary shares continue to trade at a discount to the net asset 
value.  Much of the asset value relates to goodwill arising from previous 
acquisitions.  We review the carrying value each year to ensure that the book 
value is stated within a range commensurate with good accounting practice.  As 
noted above, we are writing down the carrying value of our retail-dependent 
security businesses by GBP200,000 and this represents a reduction of 
approximately 4% in the consolidated net assets of the Group.  The board is 
satisfied that all other goodwill valuations can presently be justified. 
 
Outlook 
 
It is necessary to reiterate the commentary made in last year's report, wherein 
we stated that the Group is affected by political uncertainty surrounding the 
timetable and implications of leaving the European Union.  The weakness of 
sterling, triggered by the outcome of the Brexit referendum two years ago, 
continues to impact on margins.  This is because we rely upon imported goods. 
In particular within our security business, goods are predominately purchased 
in Euros or US Dollars, and it has not proved commercially feasible to pass the 

full cost of this on to our customers. 
 
Losses associated with ALS are now a matter of history following its closure 
during the year.  There are some ongoing implications as outlined below but no 
material implications going forward.  Prior to moving into security technology, 
ALS was the largest part of the Group and the largest subsidiary and made the 
greatest contribution towards the Group's costs, approximately GBP200,000 per 
annum.  Whilst we have now extricated ourselves from that business, 
management's task is to find ways to replace the lost contribution.  The 
security division was intended to do this but, for reasons explained, has 
encountered its own difficulties and will not make up the shortfall.  However, 
the safety division remains profitable and consolidation of sites will reduce 
costs.  All other things being equal, the highly encouraging growth in revenue 
and profit from QCS gives us an expectation that overall and on a consolidated 
basis, 2018/19 will see an improvement on 2017/18. 
 
Trading update 
 
Unaudited management accounts for the first quarter of 2018/19, after adjusting 
for late invoice receipts from suppliers and a settlement to compensate for 
unfinished asbestos work payable to a client of ALS show the following: Group 
revenues were GBP1.56m and this generated EBITDA of GBP121,815.  This compares with 
total revenues of GBP1.82m for the first quarter of 2017/18 and EBITDA of GBP 
121,351, which included results for ALS which has now been discontinued. 
 
Performance by trading subsidiary 
 
The Group currently measures the following key performance indicators. 
 
Total revenues 
 
Total revenues are reviewed each month across the Group because this 
information gives 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 for the year decreased by 2%; 
 
Earnings before interest, taxation, depreciation, amortisation and 
non-recurring costs (underlying EBITDA) 
 
After allowing for exceptional costs, the Group saw an increase in EBITDA from 
a loss of GBP100,000 to a profit of GBP139,500. 
 
Staff turnover 
 
Staff turnover is monitored because 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.  Between the years ended 31 March 2017 and 2018 the 
average number of staff employed across the Group fell from 88 to 72.  The main 
reason for the decrease was the closure of ALS which resulted in all except one 
employee leaving the business. 
 
Pre-tax profit/(loss) per subsidiary before Group management charges 
 
Profits before tax and management charges are reviewed by each subsidiary and 
the board every month to ensure that each subsidiary trades profitably. 
Although the Group does not generally adopt a policy of cross-charging between 
subsidiaries, informal account is taken of significant work done by one 
subsidiary on behalf of another. 
 
A review of the activities of each trading subsidiary is provided below.  The 
profit figures stated are before tax, central management charges and impairment 
charges.  The management charges are the individual subsidiary's contribution 
to Group overheads and are not directly attributable costs. 
 
Adamson's Laboratory Services Limited (ALS) 
 
  * 2018: revenues of GBP377,852 yielding a loss of GBP165,100 
  * 2017: revenues of GBP823,208 yielding a loss of GBP194,600 
 
The adverse effects of competition within the sector resulted in the Group 
making the decision to discontinue operations related to asbestos services on 
31 December 2017.  ALS continued to provide general health and safety services 
until 31 March 2018 at which point the remaining client contracts were 
satisfied by other Group companies. 
 
The trading name, intellectual property, and the rights to offer asbestos 
management service to former clients were sold to another asbestos consultancy 
for GBP25,000. 
 
Accordingly, ALS became dormant with effect from 31 March 2018.  There will 
however be certain ongoing costs in respect of outstanding leases on some 
office machinery, where it has been determined that heavy penalties for early 
settlement make it less expensive to continue with the leases.  In addition, 
the Group is obliged to carry run-off insurance in relation to previously 
completed work by ALS with some contracts requiring this for up to six years. 
 
It is also expected that there could be some one-off costs (which are not 
expected to exceed GBP15,000) relating to compensation to some ALS clients for 
their out-of-pocket costs where work was not completed by the time ALS ceased 
operation. 
 
B to B Links Limited (B to B) 
 
  * 2018: revenues of GBP2,777,300 yielding a profit of GBP78,300 
  * 2017: revenues of GBP2,594,900 yielding a profit of GBP52,500 
 
During 2018 B to B generated revenues of GBP2,777,300, up 7% on the previous 
year.  The majority of revenues in 2017/18 continued to come from national 
retail accounts, with revenues from the largest customer being GBP1.5m (2017: GBP 
1.5m), and non-retail CCTV revenues grew by 25% compared with 2016/17. 
 
After a very strong first half, profits for the year ended below forecast due 
to weaker sales during the second half of the financial year.  Nevertheless, 
the operating profit before management charge in 2017/18 was 49% higher than 
2016/17, despite the very challenging retail marketplace due to tight control 
of overheads. 
 
The profit is shown after a non-cash provision has been made of GBP15,000 (2017 - 
GBPnil) for slow moving stock. 
 
SG Systems (UK) Limited (SG) 
 
  * 2018: revenues of GBP1,449,000 yielding a loss of GBP96,200 
  * 2017: revenues of GBP1,414,500 yielding a loss of GBP113,500 
 
Revenues for SG were GBP1,449,000, up 2% on the previous year, but significantly 
below forecast.  The pressures facing the wider retail sector have led to 
delays in capital expenditure decisions, thus impacting on SG's revenues. 
Although the company made an operating loss for the year, this was considerably 
less than the previous year due to an improvement in gross margins, which was 
partly the result of the recovery of sterling's value against the US dollar. 
 
Over the last 18 months significant effort has been devoted to marketing SG's 
wider retail technology offer, which includes products that can support 
retailers in driving sales conversion rates as well as reducing shoplifting. 
This has resonated strongly amongst key retail customers and prospects and a 
number of important in-store trials are now underway. 
 
The profit is shown after a non-cash provision has been made of GBP30,000 (2017 - 
GBPnil) for slow moving stock. 
 
Inspection Services (UK) Limited (ISL) 
 
  * 2018: revenues of GBP215,500 yielding a profit of GBP46,300 
  * 2017: revenues of GBP227,600 yielding a profit of GBP44,200 
 
The main business of ISL continues to be the statutory examination and 
inspection of lifting plant and equipment, and of pressure systems, under 
contracts placed by insurance brokers on behalf of end users.  In return for 
passing this work to ISL, commissions are payable to brokers in line with 
agreed terms. In addition to examinations necessary to meet specific 
obligations under health and safety legislation, ISL also assists employers by 
carrying out non-statutory inspections of various other items of workplace 
equipment.  It remains the case that a large majority of work derives through 
insurance brokers, though ISL also engages directly with clients in a number of 
cases. 
 
Year-on-year revenues reduced by a little over 5%, reflecting a number of 
contracts that were not renewed for various reasons.  These include situations 
where the equipment owner changes insurance broker and the new broker has 
pre-existing arrangements with another provider of the services that ISL 
offers.  Whilst new contracts were won, these were outweighed by the value of 
those contracts that lapsed.  To some extent this is cyclical, as in the 
previous year when new contracts were worth more than those lost. 
 
ISL delivered higher profits on lower revenues thanks to a number of reductions 
in costs.  The main contributor was an engineer surveyor electing to reduce his 
working week as a prelude to full retirement. 
 
Personnel Health & Safety Consultants Limited (PHSCL) 
 
  * 2018: revenues of GBP615,700 yielding a profit of GBP240,000 
  * 2017: revenues of GBP666,900 yielding a profit of GBP218,900 
 
Profit increased by 10% to GBP240,000 despite a GBP51,200 decrease in revenue.  The 
improved profit was a result of close control of expenditure, in particular 
staff costs.  PHSCL continues to be a net provider of resources to other 
members of the group, with policy dictating that cross-charges are not applied 
to reflect this contribution.  Staff utilisation by the other subsidiaries 
averaged 16% during the year so the improved profitability is particularly 
encouraging in the current environment. 
 
The reduction in revenue can partially be attributed to one of PHSCL's largest 
clients taking some of their work in house. It also reflects the continuing 
high levels of competition, mainly from sole traders or small partnerships that 
have lower overheads and can thus price very competitively in what has become a 
mature and crowded market.  The majority of PHSCL's revenue is obtained under a 
retainer service, with these clients often purchasing additional consultancy or 
training days. Customer loyalty remains high (over 70% of clients have been 
with PHSCL for 10 years or more) with a large proportion of work coming from 
existing or former customers. 
 
PHSCL has been working on transitioning its ISO 9001 quality management 
processes into the new 2015 standard with the British Standards Institute (BSI) 
and has recently been successful in attaining accreditation.  Maintenance of 

this standard with a reputable accreditation body helps to promote PHSCL's 
attention to quality of service. 
 
Revenues in the subsidiary's key product, the Appointed Safety Advisor Service 
continue to be flat as customers either recruit in-house or prefer to buy 
services on an ad-hoc basis and a key part of the business plan for the coming 
year is to attract entirely new customers, whilst maintaining the high-quality 
levels of support to those who are already established customers. 
 
One area which has enjoyed significant growth has been the development of our 
expert witness service which is growing from an ad-hoc service to one that has 
achieved over 300% increase in revenue as the subsidiary becomes better known 
within the legal profession.  This is often complex and high profile work which 
helps to promote the company's reputation as an expert in the field of 
occupational health and safety risk management. 
 
QCS International Limited (QCS) 
 
  * 2018: revenues of GBP767,600 yielding a profit of GBP285,200 
 
  * 2017: revenues of GBP624,000 yielding a profit of GBP210,800 
 
QCS continues to be a leader in the design, marketing and delivery of training 
courses and consultancy to the ISO standards, which can be seen in the high 
number of public training courses, in house training courses 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.  In 2017/18 QCS also benefitted from a small increase in work outside 
of its core geographical area with clients being secured as far south as Kent. 
 
Revenues were up GBP143,600 (23%) compared to 2016/17 and the corresponding 
profit before tax and central management charges increased by GBP74,400 (35%). 
 
Performance exceeded management forecasts for both revenue and operating 
profit.  This was underpinned by high levels of client retention along with the 
expansion of consultancy and training services. Additional services were 
provided to longstanding customers and the company reaped the benefits of 
market demand relating to the new ISO 9001 and ISO 14001 standards. The update 
to standards continues to underpin a proportion of new sales although this 
effect is slowly declining and will probably end during the next financial 
year.  Some benefit from the new ISO 45001 standard for health and safety will 
be experienced, and evidence has already shown that sales of training in this 
area for the year ahead will be good. 
 
QCS retains approved training partner status with the International Register of 
Certified Auditors (IRCA).  The costs and benefits associated with maintaining 
this relationship are regularly reviewed but this status continues to 
differentiate the company from competitors. 
 
Medical device consultancy and training continues to be a successful area of 
the business.  QCS is benefitting from changes in the medical device regulatory 
structure that has increased enquiries and has also led to the introduction of 
two new courses. 
 
QCS launched a new website in May 2017.  With carefully targeted advertising 
and search engine optimisation it has been notable that there has been an 
increase in enquiries from around the UK, with several leads from previously 
unknown clients leading to sales. 
 
Quality Leisure Management Limited (QLM) 
 
  * 2018: revenues of GBP439,400 yielding a profit of GBP111,900 
  * 2017: revenues of GBP437,100 yielding a profit of GBP74,300 
 
Revenue for 2017/18 of GBP439,400 was similar to the prior year though greater 
efficiency in delivery resulted in pre-tax profit of GBP111,900 before central 
management charges compared to GBP74,300 in 2016/17.  This was primarily the 
result of a reduction in staff costs. 
 
QLM continued to focus on core business objectives and key areas of income 
generation in 2017/18, namely audits, training and accident investigation.  The 
support service is also key to QLM's success in being able to support the 
diverse and changing needs of its client base. Over GBP100,000 of revenue was 
generated from auditing, representing an increase of 21%, utilising QLM's 
specialist skill sets.  Accident investigation income remained relatively 
constant given the nature of the work, but continues to be vital in setting QLM 
apart from its competitors.  It demonstrates the competence within the broader 
QLM team and is a pre-requisite for supporting the Chartered Institute of 
Environmental Health in delivery of sections of its continuing professional 
development programme. 
 
Other expenditure generally remained consistent with the previous year. 
 
Technology and the associated infrastructure are vital to QLM and investment 
has and will continue to be made in these areas.  The server has been replaced 
by a cloud-based system which has led to greater efficiency in uploading and 
accessing data from a number of different platforms. An audit specific 
cloud-based system is to be introduced during 2018/19 to accommodate QLM's 
LeisuresafeT audits and health and safety reviews. 
 
RSA Environmental Health Limited (RSA) 
 
  * 2018: revenues of GBP370,400 yielding a profit of GBP75,400 
 
  * 2017: revenues of GBP374,100 yielding a profit of GBP65,100 
. 
 
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.  Revenue for the year was 
marginally down on the previous year but despite this, there was an increase in 
profitability due to cost control measures. 
 
The past year has seen organic growth in activities where the strengths of the 
company lie.  New strategies are being developed to ensure that the company's 
offering is diversified and is relevant to the markets in which it operates. 
 
The core offering of SafetyMARK to the education sector remains the focus of 
the company, with increased income year-on-year.  Revenues broke through the GBP 
100,000 barrier in this area despite cost pressures placed on schools and the 
continued consolidation of schools into Multi Academy Trusts.  The company has 
increased the number of schools to which is provides services and this 
continues to be a focus in 2018/19 
 
Despite the focus on SafetyMARK, the past year has also seen strong growth in 
other areas of the business.  Training has seen an increase in the number of 
courses being provided to clients and there continues to be demand for our IOSH 
accredited school courses.  Reducing the frequency of courses has increased the 
average attendance, which has, in turn, resulted in an improvement in 
profitability. 
 
Food safety consultancy has seen some strong demand in the past year with 
revenues being well above forecast.  However, there are some significant and 
increasing cost pressures within this market and clients see consultancy as 
something of a luxury. 
 
The continued success of SafetyMARK means that new enquiries from prospective 
clients are strong.  New business has been gained with a focussed marketing 
strategy.  The key will now be to ensure that profitability is maximised by 
using the economies of scale afforded by a larger client base, as well as 
ensuring that costs are well controlled and standard fees are reviewed, where 
appropriate. 
 
PHSC plc 
 
  * 2018: net loss of GBP521,700 before management charges, exceptional costs and 
    dividends received 
  * 2017: net loss of GBP501,100 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 quoted Group and are consistent with the previous year. 
 
On behalf of the board 
 
Stephen King, 
 
Group Chief Executive 
 
13 August 2018 
 
Group statement of financial position as at 31 March 2018 
 
                                                             31.3.18            31.3.17 
                                                                   GBP                  GBP 
 
Non-Current Assets 
 
Property, plant and equipment                                594,343            626,224 
 
Goodwill                                                   3,678,463          3,878,463 
 
Deferred tax asset                                            21,105             21,693 
 
                                                           4,293,911          4,526,380 
 
Current Assets 
 
Inventories                                                  389,034            487,367 
 
Trade and other receivables                                1,568,625          1,447,493 
 
Cash and cash equivalents                                    244,290            206,719 
 
                                                           2,201,949          2,141,579 
 
Total Assets                                               6,495,860          6,667,959 
 
Current Liabilities 
 
Trade and other payables                                   1,137,094          1,064,358 
 
Current corporation tax payable                               16,230                  - 
 
Contingent consideration                                           -             25,000 
 
                                                           1,153,324          1,089,358 
 
Non-Current Liabilities 
 
Deferred tax liabilities                                      55,818             57,800 
 
                                                              55,818             57,800 
 
Total Liabilities                                          1,209,142          1,147,158 
 
Net Assets                                                 5,286,718          5,520,801 
 
Capital and reserves attributable to 
equity holders of the Group 
 
Called up share capital                                    1,467,726          1,467,726 
 
Share premium account                                      1,916,017          1,916,017 
 
Capital redemption reserve                                   143,628            143,628 
 

Merger relief reserve                                        133,836            133,836 
 
Retained earnings                                          1,625,511          1,859,594 
 
                                                           5,286,718          5,520,801 
 
Group statement of comprehensive income for the year ended 31 March 2018 
 
                                      31.3.18                                   31.3.17 
 
                                     GBP                                      GBP 
 
                            Continuing Discontinued       Total    Continuing Discontinued       Total 
                            operations   operations                operations   operations 
 
Revenue                      6,635,012      377,852   7,012,864     6,339,091      823,208   7,162,299 
 
Cost of sales              (3,688,565)    (248,886) (3,937,451)   (3,475,427)    (513,196) (3,988,623) 
 
Gross profit                 2,946,447      128,966   3,075,413     2,863,664      310,012   3,173,676 
 
Administrative             (2,724,895)    (317,604) (3,042,499)   (2,814,360)    (504,732) (3,319,092) 
expenses 
 
Goodwill impairment          (200,000)            -   (200,000)     (625,191)            -   (625,191) 
 
Other income                                 25,000      25,000         1,560            -       1,560 
                                    - 
 
Profit/(loss) from              21,552    (163,638)   (142,086)     (574,327)    (194,720)   (769,047) 
operations 
 
Fair value movement                  -            -           -        50,000            -      50,000 
on contingent 
consideration 
 
Finance income                       3            -           3           471            -         471 
 
Finance costs                  (2,411)      (1,367)     (3,778)       (1,187)        (930)     (2,117) 
 
Profit/(loss)                   19,144    (165,005)   (145,861)     (525,043)    (195,650)   (720,693) 
before taxation 
 
Corporation tax               (17,511)        2,675    (14,836)        28,467        1,028      29,495 
(expense)/credit 
 
Profit/(loss) for                1,633    (162,330)   (160,697)     (496,576)    (194,622)   (691,198) 
the year after tax 
attributable to 
owners of the 
parent 
 
Other comprehensive                  -            -         -               -            -           - 
income 
 
Total comprehensive              1,633    (162,330)   (160,697)     (496,576)    (194,622)   (691,198) 
income attributable 
to owners of the 
parent 
 
Basic and diluted                0.01p      (1.11)p     (1.09)p       (3.53)p      (1.38)p     (4.92)p 
Earnings per Share 
from continuing 
operations 
 
Group statement of changes in equity for the year ended 31 March 2018 
 
                                                     Capital 
                    Share      Share      Merger     Redemption Retained 
                    Capital    Premium    relief     Reserve    Earnings    Total 
                               GBP          reserve    GBP          GBP           GBP 
                                          GBP 
 
Balance at 1 April  1,308,634  1,751,358  133,836    143,628    2,747,087   6,084,543 
2016 
 
Loss for year 
attributable to     -          -          -          -          (691,198)   (691,198) 
equity holders 
 
Issue of shares     159,092    164,659    -          -          -           323,751 
 
Dividends           -          -          -          -          (196,295)   (196,295) 
 
Balance at 31 March 1,467,726  1,916,017  133,836    143,628    1,859,594   5,520,801 
2017 
 
Balance at 1 April  1,467,726  1,916,017  133,836    143,628    1,859,594   5,520,801 
2017 
 
Loss for year 
attributable to     -          -          -          -          (160,697)   (160,697) 
equity holders 
 
Dividends           -          -          -          -          (73,386)    (73,386) 
 
Balance at 31 March 1,467,726  1,916,017  133,836    143,628    1,625,511   5,286,718 
2018 
 
Group statement of cash flows for the year ended 31 March 2018 
 
 
                                                             31.3.18            31.3.17 
                                               Note                GBP                  GBP 
 
Cash flows from operating activities: 
 
Cash generated from operations                    I          143,360            124,925 
 
Interest paid                                                (3,778)            (2,117) 
 
Tax paid                                                           -          (100,061) 
 
Net cash generated from operating activities                 139,582             22,747 
 
Cash flows used in investing activities 
 
Purchase of property, plant and equipment                   (19,358)            (2,087) 
 
Disposal of fixed assets                                      15,730              1,574 
 
Interest received                                                  3                471 
 
Net cash used in investing activities                        (3,625)               (42) 
 
Cash flows used in financing activities 
 
Payment of contingent consideration                         (25,000)          (200,000) 
 
Proceeds from placement of shares                                  -            323,751 
 
Dividends paid to Group shareholders                        (73,386)          (196,295) 
 
Net cash used in financing activities                       (98,386)           (72,544) 
 
Net increase/(decrease) in cash and cash                      37,571           (49,839) 
equivalents 
 
Cash and cash equivalents at beginning of year               206,719            256,558 
 
Cash and cash equivalents at end of year                     244,290            206,719 
 
Notes to the Group statement of cash flows 
 
                                                                 31.3.18         31.3.17 
                                                                       GBP               GBP 
 
I. CASH GENERATED FROM OPERATIONS 
 
Operating loss - continuing operations                         (142,086)       (719,047) 
 
Depreciation charge                                               34,590          44,089 
 
Goodwill impairment                                              200,000         625,191 
 
Fair value movement on contingent consideration                        -        (50,000) 
 
Loss on sale of fixed assets                                         919           5,545 
 
Decrease/(increase) in inventories                                98,333        (70,996) 
 
(Increase)/decrease in trade and other                         (121,132)         447,384 
receivables 
 
Increase/(decrease) in trade and other payables                   72,736       (157,241) 
 
Cash generated from operations                                   143,360         124,925 
 
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 2018 or 31 March 2017, but is 
derived from those financial statements.  Statutory financial statements for 
2017 have been delivered to the Registrar of Companies and those for 2018 have 
been approved by the board and will be delivered after dispatch to 
shareholders.  The auditors have reported on the 2017 and 2018 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 24 
September 2018 at The Old Church, 31 Rochester Road, Aylesford, Kent ME20 7PR. 
 
The report and accounts and notice of the AGM are expected to be posted to 
shareholders on or around 23 August 2018 and will shortly be available to view 
on the Company's website at www.phsc.plc.uk. 
 
Dividend 
 
The board did not declare a final dividend for the year ended 31 March 2017. An 
interim dividend of GBP73,386 was paid in February 2018 in respect of the year 
ended 31 March 2018. The board is proposing a final dividend of 0.5p payable on 
12 October 2018 to shareholders on the register on 28 September 2018 making a 
total of 1.0p for the year. 
 
 
 
END 
 

(END) Dow Jones Newswires

August 14, 2018 02:00 ET (06:00 GMT)