Source - PRN

8 September 2016


Pre-AGM Trading Update

PHSC plc (“the Group”), a leading provider of health, safety, hygiene and environmental consultancy services and security solutions to the public and private sectors, announces an update on its performance ahead of its AGM due to be held today. At that meeting the Group Chief Executive, Stephen King, will be commenting on the Group’s performance for the first four months of the year to the end of July 2016.

For this period, the Group’s unaudited management accounts are showing a consolidated EBITDA loss of around £94k on sales of £2.3m but the Board anticipates that the position will improve before the conclusion of H1 and that this improvement will be sustained in the second half of the year, as explained below. Cash at bank (as at 6 September 2016) stood at £565k which includes net proceeds arising from the recent share placing which was announced on 19 August 2016.

Further commentary on each subsidiary’s results for this period is given below. Earnings are shown prior to deduction of central management charges and taxation.

B to B Links Ltd recorded a loss of around £4k and is currently forecast to deliver sales of approximately £1.2m in H1. Despite large monthly fluctuations in client sign-off and installation activity, sales from key national accounts have met expectations and continue to deliver much of the company’s revenue.   The closure of the Basingstoke office in July marked the final stage in the integration of the Camerascan CCTV acquisition which has gone smoothly in operational terms.   There has been an erosion of gross margins due to higher trade costs for imported hardware, security tags and labels as a result of the weaker pound post the referendum.   The outlook for the second half of the year is strong for key national account activity and management is taking a number of steps to turn around a sales shortfall in independent retail, one of the company’s traditional strengths.

SG Systems UK Ltd has lost £37k as it continued to suffer from an unexpected and lengthy hiatus in new store opening by one of its larger customers, delays to a source tagging project, and higher trade costs for imported goods - again due to the weakness in sterling.   The issue delaying new store openings has very recently been resolved.  Work to introduce new products to new customers has begun to bear fruit, and will enable the company to return to monthly profits in August and September. This has also provided a healthy pipeline of potential projects which it is hoped will be converted during the second half of the year. 

RSA Environmental Health Ltd generated profit of £24k but August is never a good month financially as it coincides with closure of schools from which the majority of RSA’s revenues are drawn.  Activity is expected to pick up as schools return in September.

Quality Leisure Management Ltd is showing a profit of just over £8k, with Q1 income down mainly due to Local Authorities coming under greater financial pressure. Local Authorities are the main source of funding to Leisure Trust clients.

Personnel Health & Safety Consultants Limited expects to deliver around £100k of profit for the first half, having reached £70k by the end of July. The subsidiary’s largest client has agreed to extend a contract, originally due to expire at the end of August, for three months to allow time for negotiations on a new arrangement.

Inspection Services (UK) Ltd achieved a profit of £15k and expects around £20k for the first half, ahead of where it was last year. In addition, it recently secured its largest single contract, valued at £25k, through an insurance broker. The contract is an enhanced version of a £17k order first awarded last year.

QCS International Ltd achieved a profit of £40k and anticipates around £60k in total for the first half. Costs in Q2 were particularly high as the company incurred legal expenses associated with preventing a competitor from using a similar trading name and style.  Management are confident of a good second half performance, with bookings already received for training courses and it is also hoped that a new medical device consultancy project will begin in Q3.

Adamson’s Laboratory Services Ltd recorded a loss of £54k. It continues to face considerable difficulties in what has become a highly competitive market for asbestos management services.  A number of steps have been taken to reduce costs, including staff redundancies, but it will take time for the benefits to filter through. The company continues to seek new business and has submitted a number of large tenders and quotations for which decisions are awaited.

We look forward to updating the market at the time of our interim results which are expected to be announced in early December.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information please contact:

PHSC plc
Stephen King  
[email protected]          
01622 717700
Northland Capital Partners Limited (Nominated Adviser)
Edward Hutton/David Hignell
0203 861 6625
Beaufort Securities Limited (Broker)
Elliot Hance
020 7382 8300

About PHSC

PHSC plc, through its trading subsidiaries Personnel Health & Safety Consultants Ltd, RSA Environmental Health Ltd, Adamson's Laboratory Services Ltd, QCS International Ltd, Inspection Services (UK) Ltd and Quality Leisure Management Ltd, provides a range of health, safety, hygiene, environmental and quality systems consultancy and training services to organisations across the UK. B to B Links Ltd and SG Systems (UK) Ltd offer innovative retail security solutions including tagging, labelling and CCTV.