SLNG Slingsby (h.c.) Plc

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

                                                                                    23 April 2024

H C SLINGSBY PLC

("Slingsby" or the "Company" or the "Group")

Audited Results for the year ended 31 December 2023

Statement by the Chairman

Board Composition

I was pleased to be appointed as independent Non-Executive Chairman of the company on 12 September 2023.  My appointment has improved the level of independence on the Board, although the Board believes that it would benefit from the appointment of another independent Non-Executive Director and intends to make such an appointment in due course.

On 11 March 2024, Dominic Slingsby resigned from the board.  Dominic remains as an employee and will leave the Group on 30 June 2024 after over 40 years' service.  On behalf of the Board, I would like to thank Dominic for his commitment and contribution during his tenure. His dedication will be missed by everyone at Slingsby, and we wish him the very best in his retirement.

Results

In the half year statement, an operating profit of £0.33m on sales of £11.5m was reported. The full year operating profit was £0.63m (2022: £0.63m) on sales of £22.6m (2022: £21.6m). Group sales increased by 5%, helped by the acquisition of certain assets of the Stakrak business.  Gross margin improved despite the insolvency of our main logistics partner in June 2023, but higher overheads and interest relating to the defined benefit pension scheme, led to a reduced profit before taxation of £0.36m (2022: £0.49m). 

Group earnings before interest, tax, depreciation and amortisation ("EBITDA") in the year ended 31 December 2023 were £1.02m (2022: £1.09m).  The Group had net cash (after overdraft balances included in trade and other payables) as at 31 December 2023 of £0.21m (2022: £0.03m).  The increase in cash was due to EBITDA offsetting capital expenditure, the costs of the acquisition of certain assets of the Stakrak business and pension scheme deficit reduction payments.

Dividend

As part of the agreement reached with the Trustee of the defined benefit pension scheme (discussed below), the Board is unable to declare a final dividend for the year ended 31 December 2023 (2022: £nil). 

Pension Scheme

The Company paid £0.40m (2022: £0.35m) in deficit reduction contributions during 2023.  The Company also continues to contribute £0.16m (2022: £0.16m) towards the scheme's running costs.  Following the triennial valuation which took place as of 1 January 2023, the Company has agreed with the Trustee of its defined benefit pension scheme to pay a lower level of deficit reduction contributions than under its previous agreement over 2024, 2025 and 2026.  This will result in a short term cash saving to the Group of approximately £0.39m, but does not alter the obligation upon the Company to fund the scheme deficit.

As part of the agreement, the Company has committed to not making dividend payments in respect of the 2023 and 2024 financial years.  At 31 December 2023, the pension scheme deficit increased by £0.28m to £5.77m (2022: £5.49m). This deterioration in the pension scheme position outweighed the profit generated in the year, decreasing the Group's net assets to £4.2m (2022: £4.3m).  The worsened pension position was largely due to decreases in the discount rate.

Recent Trading and Future Developments

Group sales in Q1 of 2024 against the same period in 2023 fell by 5%.  This decline in sales and the inclusion of costs associated with the retirement of Dominic Slingsby of £0.2m, led to an unaudited loss before tax in Q1 2024 of £0.14m compared to an unaudited profit before tax of £0.12m in the same period in 2023.

The market remains competitive, and the Board is cautious regarding the outlook.  There remains uncertainty in the economy due to the risk of a prolonged recession in the UK, inflationary pressures (particularly in overhead costs) and the impact on the supply chain from the situation in the Red Sea. These pressures could result in a fall in demand for the Group's products.

The Group continues to invest in its digital market presence and a new e-commerce platform for the Slingsby business will launch during 2024.  The Group also remains on the lookout for appropriate acquisitions.

Finally, I would like to thank our staff across the Group for their efforts in 2023.  The Group has faced numerous challenges in recent years which were overcome due to the positive attitude and hard work of our employees.

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Consolidated Income Statement for the year ended 31 December 2023

Consolidated Statement of Comprehensive Income for the year ended 31 December 2023

 Consolidated Balance Sheet as at 31 December 2023

Cash and cash equivalents included above is the gross value and does not included amounts due in relation to the bank overdraft of £2.24m (2022: £2.22m) in the values presented above.

 Consolidated Cash Flow Statement for the year ended 31 December 2023

Consolidated Statement of Changes in Shareholders' Equity

Notes to the Preliminary Results for the year ended 31 December 2023