Source - LSE Regulatory
RNS Number : 8596R
FIH Group PLC
10 November 2021
 

10 November 2021

FIH group plc

("FIH" or the "Group")

Results for the Six Months Ended 30 September 2021

FIH, the AIM quoted Group that owns essential services businesses in the UK and Falkland Islands, is pleased to announce its unaudited results for the six months ended 30 September 2021 ("the period"). Comparisons shown below are for the same period in 2020 unless otherwise stated.

Return to Profitability and Dividend List

 

Highlights

 

·      Group revenue increased by 20% to £17.3 million (2020: £14.4 million) reflecting a markedly better performance from the UK based businesses and a continued good performance from the Falkland Islands Company ("FIC");

·      Pre-tax profit of £0.4 million (2020: loss of £0.2 million) with trading improving alongside the lifting of restrictions in the UK and significant scope for further improvement;

·      Passenger numbers rising again for Portsmouth Harbour Ferry Company ("PHFC") as people return to offices, and following cost savings from a 25% reduction in headcount last year, PHFC is expected to continue its recovery;

·      Much improved performance from Momart despite sections of the art world still largely shut and assuming the gradual reopening continues, further improvement is anticipated;

·      Strong cash position of £8.0 million as at 30 September 2021; and

·      Return to the dividend list with the payment of an interim dividend of 1.0 pence per share.

 

Outlook

 

·       Direction of travel encouraging across all three divisions with the potential to accelerate further;

·        Balance sheet strength continues to underpin trading position and provide strategic flexibility; and

·        Overall, the outlook is positive as reflected in the Board's decision to re-instate the dividend.

 

 

John Foster, Chief Executive, said:

"We have three good businesses and when conditions permitted, the Group quickly returned to profitability. Our financial position is strong and customer activity is heading back towards pre-pandemic levels. We are also benefitting from the actions taken last year to reduce our cost base, whilst continuing to invest in areas where we see opportunities. We expect the progress demonstrated in the Group's first half results to continue as we move into the traditionally stronger second half."

 

Enquiries:

FIH group plc

John Foster, Chief Executive

Stuart Munro, Chief Financial Officer

 

 

Tel: 01279 461630

 

WH Ireland Ltd. - NOMAD and Broker to FIH

Adrian Hadden / Jessica Cave / Megan Liddell

 

 

Tel: 0207 220 1666

 

Novella Communications

Tim Robertson / Chris Marsh

 

 

Tel: 020 3151 7008

 

 

 

 



 

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 

 

 



 

Chairman's Statement

 

I am pleased to report further progress in the Group's recovery from the adverse effects of the coronavirus. FIH's UK operations saw a slow return towards more normal trading as lockdown restrictions were finally lifted in England in late July 2021 whilst the Falkland Islands Company ("FIC"), which has been much less affected by COVID-19, maintained its healthy profitability in the traditionally quieter austral winter.

 

A detailed commentary on the results is provided in the Chief Executive's Review but in overview, although demand has not yet fully returned to pre-COVID levels, profitability improved across the Group despite a marked reduction in the level of financial support from the UK government's furlough scheme allowing the Group to produce a pre-tax profit of £0.4 million for the six months ended 30 September 2021 compared to a loss of £0.2 million in the same period last year.

 

In April 2021, the Group took steps to further strengthen its executive team with the recruitment of an experienced Chief Financial Officer, Stuart Munro, and in the Falkland Islands, an experienced executive was recruited to further develop FIC's construction and infrastructure activities and its ability to deliver larger more complex projects. 

 

Provided there is no recurrence of lockdown restrictions, we expect to see further improvement in the Group's traditionally stronger second half, reinforced by a continuing return to more normal patterns of business and client activity.

 

Once again, our staff have shown great resilience and dedication, applying considerable skill and devotion to the needs of our customers, so I would like to thank them on behalf of the Board for all their efforts.

 

Reflecting the Board's confidence in the underlying resilience of the Group, its return to profitability before taking into account Government support and its ability to recover from the effects of the pandemic, the Board is announcing the resumption of dividends with the payment of an interim dividend of 1.0 pence per share which will be paid on 14 January 2022 to shareholders on the register at the close of business on 3 December 2021.

 

The Group has a Dividend Reinvestment Plan ("the Plan") that allows shareholders to reinvest dividends to purchase additional shares in the Group. For shareholders to apply the proceeds of this and future dividends to the Plan, application forms must be received by the Group's Registrars by no later than Wednesday 22 December 2021*.

 

Firm progress has been made in the past six months and with the benefit of a lower cost base following the necessary restructuring activity seen last year, steadily recovering demand, and a strong balance sheet, the Board looks to the future with confidence. 

 

 

 

Robin Williams

Chairman

10 November 2021

 

 

 

 

 

 

 

 

 

* Existing participants in the Plan will automatically have the interim dividend reinvested. Details on the Plan can be obtained from Link Group on 0371 664 0381 or at www.signalshares.com. Calls are charged at the standard geographic rate and will vary by provider. If you are outside the United Kingdom, please call +44 371 664 0381. Calls outside the United Kingdom will be charged at the applicable international rate. The lines are open from 9.00am to 5.30pm, Monday to Friday excluding public holidays in England and Wales.



 

Chief Executive's Review

 

Overview

 

The Group's results for the six months to 30 September 2021 reflect a slow but steady improvement in activity compared to first half of the previous financial year. The Group's UK businesses enjoyed a marked increase in revenue and a welcome move back towards profitability and in the Falkland Islands, FIC delivered another robust performance. This encouraging performance was achieved despite the adverse effects of COVID-19, which saw lockdown restrictions in place for many weeks at the start of the period, and not fully released in England until late July 2021. Despite these challenges and an increased investment in central management, the Group was able to move back into profit, returning a profit before tax of £0.4 million in the period compared to a loss of £0.2 million in the prior year. This result can also be compared to a profit before tax of £1.3 million in the period to September 2019 which was not impacted at all by COVID-19.

 

In both the UK businesses, activity steadily improved as lockdown restrictions were removed from mid-April onwards and public confidence was slowly rebuilt. The Falkland Islands were free from local restrictions but remained essentially quarantined from the outside world. However, economic activity remained solid and helped by a much-improved illex squid catch, FIC was able to maintain a healthy level of profitability.

 

In the face of still challenging trading conditions and improving, but reduced demand for services, both the Group's UK businesses benefitted from the restructuring programmes put in place last autumn, which delivered £1.6m of savings in annual operating costs and accelerated their return to profitability. The gradually increasing activity levels evident in the period, together with a reduced UK headcount did however lead to a significant fall in the level of Government support and income from the Job Retention Scheme and related grants fell by 78.6% to £0.3 million compared to the £1.4m received in the prior period.

 

By September 2021, despite increased investment in head office resource to support longer term growth, the Group returned to consistent profitability compared to the COVID-induced losses seen at the start of the period. Further improvement is expected in the traditionally stronger second half, augmented by a continued building of customer demand as the impact of COVID-19 steadily recedes.

 

Group Trading Results for the Six Months Ended 30 September 2021

 

A summary of the trading performance of the Group is given in the table below.

 

 

Six Months Ended 30 September

 

2021

£ million

2020

£ million

 

 

 

 

Group Revenue

 

 

 

Falkland Islands Company

 

9.9

9.7

Portsmouth Harbour Ferry

 

1.5

0.8

Momart

 

5.9

3.9

Total revenue

 

17.3

14.4

 

 

 

 

Group Underlying Pre-tax Profit*

 

 

 

Falkland Islands Company**

 

0.6

0.8

Portsmouth Harbour Ferry**

 

-

(0.4)

Momart**

 

(0.2)

(0.5)

Total underlying pre-tax profit / (loss)*

 

0.4

(0.1)

Non-trading items (see note 3)

 

-

(0.1)

Reported profit / (loss) before tax

 

0.4

(0.2)

Diluted earnings per share in pence

 

(1.3p)

(1.5p)

 

* Underlying pre-tax profit is defined as, profit before tax, before non-trading items.

** As in prior years the profits reported for each operating company are stated after the allocation of head office

management and plc costs which have been applied to each subsidiary on a consistent basis.

 

Dividend

 

With the Group's recovery now well established and further improvement expected in the second half, the Board is pleased to announce the resumption of dividends with the payment of an interim dividend of 1.0 pence per share.

Group Operating Company Performance

 

Falkland Islands Company

 

Trading in FIC was once again encouraging with an overall 2.1% growth in revenue to £9.9 million (2020: £9.7 million) helped by the absence of the initial lockdown restrictions which impacted trading in April / May 2020 and by a strong illex squid catch in April / May 2021. Overheads were increased to further strengthen the Stanley-based team and to secure a platform for delivering longer term growth and these increased costs resulted in a small reduction in FIC's overall pre-tax contribution compared to the prior year.

 

FIC saw revenue growth in Retail whilst 4x4 maintained sales at their previous healthy levels. At Falkland Building Services ("FBS"), revenue dipped following the successful completion of work on the Falkland Islands Government ("FIG") housing contract for 26 homes started in November 2019. Despite this temporary slow-down, the department was successful in securing additional work from FIG during the period which will underpin FBS's continuing development.

 

Revenue from Other Services increased by £0.3 million as Fishing Agency revenues were buoyed by the strong illex squid catch. Income from FIC's portfolio of 80 residential properties was unchanged at £0.4 million.

 

FIC Operating Results

Six Months Ended 30 September

2021

£ million

2020

£ million

Change

%

 

 

 

 

Revenue

 

 

 

Retail

4.7

4.6

2.2

FBS (construction)

1.8

2.0

(10.0)

Falklands 4x4

1.6

1.6

-

Other services

1.4

1.1

27.3

Property rental

0.4

0.4

-

Total revenue

9.9

9.7

2.1

 


 

 

Underlying operating profit

0.6

0.9

(33.3)

 



 

Finance expense

-

(0.1)

100.0

Underlying profit before tax

0.6

0.8

(25.0)

 

With some pressure from increased costs, FIC saw a small reduction in operating profit but in overall terms still produced a solid trading performance in the traditionally quiet austral winter. On a positive note, FIC's success in winning competitive tenders for important government housing and infrastructure works points to the growth potential in the coming years working on similar vital infrastructure projects for both FIG and the UK Ministry of Defence.

 

Looking ahead, in the near term, FIG remains cautious in its approach to reopening borders and commercial flights to the Islands via South America are unlikely to resume until well into 2022. Cruise ship visits will be similarly curtailed and no visits from the major cruise operators are expected until October 2022, when it is hoped the Islands will see the return to something close to pre-pandemic levels of tourism. In the short term, as with 2020, the seasonal summer uplift to the Falkland Islands' economy and to FIC's trading activities will be once again dampened by an absence of tourists, although the significant long-term potential of this sector of the economy remains undimmed.

 

With respect to the potential development of oil in the Falkland Islands, the announcement on 23 September 2021 by Harbour Energy, the principal licence holder in Sea Lion, that it was seeking to exit from the project was disappointing, although with the price of Brent Crude having since risen to over $80/barrel it is hoped that other oil companies may yet show an interest in taking the project forward. Whilst such developments would be positive for both the Falkland Islands and FIC, the future success and growth of FIC does not depend on the development of oil. The Board is confident that significant potential exists for FIC by building on its success in construction, infrastructure, specialist local services and tourism.  

 

Portsmouth Harbour Ferry Company

After enduring a second dramatic fall in ferry passenger volumes in the first quarter of 2021, it was pleasing to see a slow but steady recovery in numbers using the Gosport Ferry as COVID-19 lockdown restrictions were gradually lifted in the first months of the new financial year.  With the reopening of non-essential retail shops in mid-April, passenger volumes lifted to 45% of pre-COVID levels and by late July, with the ending of all formal restrictions in England, ferry volumes had recovered to 64% of 2019 levels. Since then, customer confidence has continued to improve and by September 2021 passenger numbers had returned to 80% of pre-COVID volumes, and the business has made a welcome return to profitability.

 

Although a complete return to pre-COVID levels of passenger activity seems uncertain given the continued level of hybrid working, the Portsmouth Harbour Ferry Company ("PHFC") has acted to counteract the effects of lost revenue by restructuring the service; reducing the workforce by 25% to deliver annual cost savings of over £0.3 million.

 

The rise in the numbers of COVID cases across the UK over the mid-summer period as government restrictions came to an end, did however mean that for a second summer, the ferry company was unable to operate its popular programme of leisure cruises around Portsmouth Harbour and the Solent. 

 

Working closely with local Councils and supported by First Bus, in late June PHFC launched a "Park & Float" scheme offering a combined parking and ferry fare to provide potential passengers not living within walking distance of the ferry terminal, a convenient alternative to driving around the harbour to Portsmouth. However, with the resumption of Portsmouth Council's own subsidised Park & Ride scheme on the outskirts of the city, to date customer uptake of "Park & Float" has been lower than hoped.   

 

PHFC's revenue for the six months to 30 September 2021 of £1.5 million, was almost double the £0.8 million seen in the first half of the prior year but as passenger numbers are still recovering, it remained some £0.8 million below the pre-COVID levels of revenue seen in the period to 30 September 2019 when PHFC achieved sales revenue of £2.3 million.

 

PHFC Operating Results

Six Months Ended 30 September

2021

£ million

2020

£ million

Change

%

 

 

 

 

Revenue

 

 

 

Ferry fares

1.5

0.8

87.5

Cruising and other income

-

-

-

Total revenue

1.5

0.8

87.5

 



 

Underlying operating profit / (loss)

0.1

(0.3)

133.3

 



 

Finance expense

(0.1)

(0.1)

-

Underlying profit / (loss) before tax

-

(0.4)

100.0

 

 

Despite a reduction in the level of support from the UK Government's furlough scheme in the current period, PHFC's cost saving programme and the slow but steady improvement in passenger volumes saw profitability improve by £0.4 million leading to a small operating profit (after the allocation of head office costs) and a break-even result at the pre-tax level.

 

Momart

 

After a virtual cessation of UK and international art movements in the first half of last year, Momart saw something of a recovery in the second half of FY 2020-21 as revenues increased from £3.9 million to over £6.4 million in the 6 months to 31 March 2021. However, as the new financial year started, UK museums remained closed and restrictions on movement in both the UK and internationally meant that collectors and commercial galleries were cautious in committing to any significant expansion.

 

On a positive note, activity with auction houses showed continued improvement as the large international houses adapted well to online selling. In addition, the significant reduction in Momart's headcount undertaken in late 2020 reduced the company's fixed costs which mitigated the impact of the sluggish recovery in the global art market.

 

Momart's art storage revenues were once again robust, although lockdown restrictions meant that in practice, it was almost impossible to replace storage business lost through scheduled returns to temporary storage clients but despite this, total revenues were broadly unchanged at £1.2 million.

 

By July, most UK museums had cautiously reopened but with precautionary limits set and virtually no overseas tourists in London over the summer, museum visitor numbers were limited to well below normal levels, constraining ticket sales and forcing museum managers to delay planned exhibitions and scale back activity for the remainder of 2021.

 

The commercial art market was more buoyant but with the decision to postpone Europe's largest art fair, Art Basel until late September, the market remained well below pre-COVID levels, albeit activity across the commercial market recovered markedly in the last weeks of the period and further improvement was evident with the re-opening of Frieze London in early October after a hiatus of two years.

 

Exhibitions revenues at £2.4 million improved markedly on the disastrous levels seen in the first half of last year of £1.3 million but still lagged behind the £3.2 million delivered in H2. In contrast, more consistent progress was seen in the commercial market; Gallery Services revenues at £2.3 million were well ahead of the £1.4 million seen in H1 2020 and 15% ahead of the £2.0 million of revenue generated in the second half of that year. The continued absence of major art fairs until late summer 2021 restricted recovery and there was little in the way of new, large exhibitions from cash constrained museums. Hence, although first half revenue improved upon that seen in the first half of last year, reflecting both continuing lockdown effects and normal seasonality, Momart's overall revenues in H1 fell back below the level seen in the second half last year from £6.4 million to £5.9 million.

 

Momart Operating Results

Six Months Ended 30 September

2021

£ million

2020

£ million

Change

%

 

 

 

 

Revenue

 

 

 

Museum Exhibitions

2.4

1.3

84.6

Gallery Services

2.3

1.4

64.3

Storage

1.2

1.2

-

Total revenue

5.9

3.9

51.3

 



 

Underlying operating profit / (loss)

-

(0.3)

100.0




 

Finance expense

(0.2)

(0.2)

-

Underlying loss before tax

(0.2)

(0.5)

60.0

 

With a welcome recovery in revenue and benefitting from a lower cost base, after a slow start in the early months of the period, Momart was able to improve profitability by £0.3 million and achieve a breakeven position at the operating level. At the pre-tax level after mortgage interest costs, losses of £0.5 million in the prior period were reduced to £0.2 million.

 

Looking ahead, Exhibitions' activity is expected to slowly improve although continuing pressure on museum visitor numbers means recovery is expected to be gradual until well into 2022. In contrast, in the commercial art market as confidence grows and international air travel increases, we expect to see a return to something close to pre-COVID art fair openings in the remainder of 2021 and, provided the global economy remains robust, further increases in activity by auction houses and by private collectors. 

 

Trading Outlook

 

The current financial year has reflected a slow but steady trend towards a return to pre-COVID levels of activity and we expect the progress demonstrated in the Group's first half results to continue as we move into the traditionally stronger second half.

 

In the Falkland Islands, FIC has demonstrated a robust commercial strength and has built solid foundations to continue the expansion of its construction and infrastructure arms as well as its core specialist services. Although the current financial year will not benefit from any substantial tourist income, the fundamental strength of the Falkland Islands' economy and FIC's place within it provide solid platform for continued growth which will only improve when tourism resumes in the austral spring of 2022.  

 

In the UK, provided there are no unexpected setbacks in relation to the virus, given the progress made to date since April 2021, we expect to see a further strengthening in the trading performance of both Momart and PHFC in the second half, although neither are expected to return to pre-COVID levels of activity until well into 2022.

 

Moving beyond the current year we will continue to invest in both Momart and FIC to help unlock their undoubted potential for further growth and in addition, following the recent hiring of Stuart Munro as Group CFO, we will continue to search for strategic earnings enhancing acquisitions to increase the scale and investor appeal of the Group. 

 

 

 

John Foster

Chief Executive

10 November 2021



 

Chief Financial Officer's Review 

 

Financial Review

 

Revenue

 

Group revenue increased by £2.9 million (20.1%) to £17.3 million (2020: £14.4 million) due principally to improvements in Momart and PHFC of £2.0 million and £0.7m respectively, following the easing of UK COVID-19 lockdown restrictions, together with a £0.2 million increase in FIC.

 

Underlying Operating Profit

 

Underlying operating profit before non-trading items and net finance costs increased to £0.8 million (2020: £0.3 million) reflecting the revenue improvements noted above, the impact of actions taken to reduce cost in the year ended 31 March 2021 and the receipt of £0.3 million of COVID-19 Government funding (2020: £1.4 million). 

 

Net Financing Costs

 

The Group's net financing costs remained broadly flat at £0.4 million (2020: £0.5 million). Two UK Government-backed CBILS loans totalling £5.0 million were drawn down in June 2020 and repaid in June 2021 but as the first 12 months of interest payments were covered by the UK Government, these loans had no impact on net financing costs.

 

Reported Pre-tax Profit

 

The reported pre-tax result for the six months ended 30 September 21 was a profit of £0.4 million (2020: £0.2 million loss). The result for the six months ended 30 September 2020 included restructuring costs of £0.1m and the Group's underlying profit before tax before non-trading items was £0.4 million (2020: £0.1 million loss). 

 

Taxation

 

The taxation charge on the current period result of £0.1 million (2020: £0.1 million credit) has been estimated on the basis of 19% and 26% of profits arising in the UK and the Falkland Islands respectively (2020: based on a blended rate of 23.0%). In addition, an increase in the UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. This has increased the deferred tax liability of the Group and the tax charge for the period by an estimated £0.4 million, resulting in an overall tax charge of £0.5 million (2020: £0.1 million credit).

 

Earnings per Share

 

Diluted Earnings per Share ("EPS") derived from reported losses was -1.3 pence (2020: -1.5 pence) and diluted EPS derived from underlying losses was -1.0 pence (2020: -0.9 pence).

 

Balance Sheet and Cash Flow

 

The Group's balance sheet remained strong with total net assets of £38.7 million broadly in line with the balances at 31 March 2021 and 30 September 2020 of £38.9 million and £38.6 million respectively.

 

Net Debt





30 September 2021

31 March 2021

Change


£m

£m

£m





Bank loans

(14.7)

(20.1)

5.4

Cash and cash equivalents

8.0

14.6

(6.6)

Bank loans net of cash and cash equivalents

(6.7)

(5.5)

(1.2)

Lease liabilities

(7.8)

(8.1)

0.3

Net debt

(14.5)

(13.6)

(0.9)

 

Bank loans reduced to £14.7 million (31 March 2021: £20.1 million) following the repayment of £5.0 million CBILS loans in June 2021 and scheduled loan repayments of £0.4 million. £12.9 million of the balance was in respect of the long-term mortgage secured on the Group's freehold premises in Leyton (31 March 2021: £13.2 million).

 

The Group's cash balances reduced to £8.0 million (31 March 2021: £14.6 million), reflecting the loan payments totalling £5.4 million noted above and a reduction in the underlying cash balance of £1.2 million.



 

The reduction in underlying cash was due mainly to capital expenditure of £1.1 million (£0.8 million on investment property and £0.3 million on property, plant and equipment both largely in FIC) and interest and lease liability repayments of £0.4 million and £0.3 million respectively, which were partly offset by a £0.7 million net cash inflow from operating activities. The latter included a £1.2 million increase in working capital which largely arose in FIC, where circa £1.0 million was due to an increase in inventory (predominantly a £0.8m increase in housebuilding stocks and work in progress) and £0.2 million was due to increases in trade and other receivables. 

 

The Group's outstanding lease liabilities totalled £7.8 million (31 March 2021: £8.1 million) with £5.7 million of the balance (31 March 2021: £5.7 million) relating to the leases from Gosport Borough Council to PHFC for the Gosport Pontoon and associated ground rent, which run until June 2061.

 

Overall, net debt increased to £14.5 million (31 March 2021: £13.6 million).

 

 

 

Stuart Munro

Chief Financial Officer

10 November 2021



 

Consolidated Income Statement

For the Six Months Ended 30 September 2021

 

Notes

Unaudited

Six Months to

30 September

2021

£'000

Unaudited

Six Months to

30 September

2020

£'000

Audited

Year Ended

31 March

2021

£'000

 

 

 

 

 

2

Revenue

17,267

14,384

32,578

 

 

 

 

 

 

Cost of sales

(10,064)

(9,212)

(19,437)

 

Gross profit

7,203

5,172

13,141

 

 

 


 

 

Other administrative expenses

(6,454)

(4,958)

(12,307)

 

Consumer finance interest income

79

113

192

 


 



 

Operating expenses

(6,375)

(4,845)

(12,115)

 

 

 


 

 

Operating profit before non-trading items

828

327

1,026

 

 

 


 

3

Non-trading items

(44)

(102)

57

 

Operating profit

784

225

1,083

 

 

 

 

 

4

Finance expense

(421)

(472)

(881)

 

 

 


 

 

Profit / (loss) before tax

363

(247)

202

 

 

 

 

 

5

Taxation

(523)

57

(193)

 

 

 


 

 

(Loss) / profit attributable to equity holders of the Company

(160)

(190)

9

 

 

 

 

 

6

Earnings per share

 

 

 

 

 

 

 

 

 

Basic

(1.3p)

(1.5p)

0.1p

 

 

 


 

 

Diluted

(1.3p)

(1.5p)

0.1p

 

See note 6 for an analysis of earnings per share on underlying profit (defined as profit after tax before non-trading items).

 

 

 

 

 

 



 

Consolidated Balance Sheet                                                     

At 30 September 2021

 

 

 

  Notes

Unaudited

30 September

2021

£'000

Unaudited

30 September

2020

£'000

Audited

31 March

2021

£'000

 

Non-current assets




 

Intangible assets

4,167

4,212

4,183

 

Property, plant and equipment

39,552

40,940

40,361

 

Investment properties

7,794

6,691

7,123

 

Investment in joint venture

259

259

259

 

Debtors due in more than one year

88

88

88

 

Hire purchase debtors

605

527

590

 

Deferred tax assets

739

651

739

 

Total non-current assets

53,204

53,368

53,343

 

Current assets


 

 

 

Inventories

6,878

6,333

5,871

 

Trade and other receivables

6,114

4,635

5,868

 

Hire purchase debtors

647

589

558

8

Cash and cash equivalents

7,976

14,367

14,556

 

Total current assets

21,615

25,924

26,853

 

Total assets

74,819

79,292

80,196

 

Current liabilities


 

 

 

Trade and other payables

(6,777)

(6,082)

(6,775)

9

Interest bearing loans and borrowings

(1,403)

(1,468)

(3,424)

 

Derivative financial instruments

-

(537)

-

 

Corporation tax payable

(237)

(112)

(113)

 

Total current liabilities

(8,417)

(8,199)

(10,312)

 

Non-current liabilities



 

9

Interest bearing loans and borrowings

(21,046)

(27,037)

(24,799)

 

Derivative financial instruments

(234)

-

(234)

 

Deferred tax liabilities

(3,559)

(2,849)

(3,113)

 

Employee benefits

(2,828)

(2,615)

(2,842)

 

Total non-current liabilities

(27,667)

(32,501)

(30,988)

 

Total liabilities

(36,084)

(40,700)

(41,300)

 

Net assets

38,735

38,592

38,896

 

 

 

 

 

 

Capital and reserves

 

 

 

 

Equity share capital

1,251

1,250

1,251

 

Share premium account

17,590

17,590

17,590

 

Other reserves

703

703

703

 

Retained earnings

19,423

19,584

19,584

 

Hedging reserve

(232)

(535)

(232)

 

Total equity

38,735

38,592

38,896

 



 

Consolidated Cash Flow Statement

For the Six Months Ended 30 September 2021

  Notes

Unaudited

Six Months to

30 September

2021

£'000

Unaudited

Six Months to

30 September

2020

£'000

Audited

Year Ended

31 March

2021

£'000


Cash flows from operating activities

 

 

 


(Loss) / profit for the period after taxation

(160)

(190)

9


Adjusted for:

 

 

 


(i) Non-cash items:

 

 

 


Amortisation

16

34

63


Depreciation: Property, plant and equipment

1,101

1,063

2,193


Depreciation: Investment properties

98

78

37


Loss on disposal of fixed assets

-

60

53


Interest cost on pension scheme liabilities

35

60

64


Equity-settled share-based payment expenses

10

22

1


Non-cash items adjustment

1,260

1,317

2,411


(ii) Other items:

 

 

 


Exchange losses

-

-

3


Bank interest payable

217

263

469


Lease liability finance expense

169

160

348


Increase in hire purchase leases receivable

(104)

(1)

(33)


Corporation and deferred tax expense/(income)

523

(57)

193


Other adjustments

805

365

980


Operating cash flow before changes in working capital

1,905

1,492

3,400


(Increase) / decrease in trade and other receivables

(246)

4,061

2,828


Increase in inventories

(963)

(959)

(497)


Increase / (decrease) in trade and other payables

2

(2,529)

(1,836)


Changes in working capital

(1,207)

573

495


Cash generated from operations

698

2,065

3,895


Payments to pensioners

(49)

(49)

(98)


Corporation taxes received / (paid)

47

(64)

(64)


Net cash flow from operating activities

696

1,952

3,733


Cash flows from investing activities

 

 

 


Purchase of property, plant and equipment

(336)

(362)

(898)


Purchase of investment properties

(769)

(300)

(702)


Net cash flow from investing activities

(1,105)

(662)

(1,600)


Cash flows from financing activities

 

 

 

 

Bank loan drawn down

-

5,000

5,000

 

Repayment of bank loans

(5,468)

(148)

(624)

 

Bank interest paid

(217)

(252)

(469)

 

Hire purchase loan draw down

-

-

389

 

Repayment of lease liabilities principal

(306)

(439)

(649)

 

Lease liabilities interest paid

(169)

(160)

(348)

 

Cash inflow on option exercises

-

-

19

 

Cash outflow on nil cost option exercise

(11)

(32)

-


Net cash flow from financing activities

(6,171)

3,969

3,318


Net (decrease) / increase in cash and cash equivalents

(6,580)

5,259

5,451


Cash and cash equivalents at start of year

14,556

9,108

9,108


Exchange losses on cash balances

-

(3)

Cash and cash equivalents at end of year

7,976

14,367

14,556



Consolidated Statement of Comprehensive Income

For the Six Months Ended 30 September 2021

Unaudited

Six Months to

 30 September

2021

£'000

Unaudited

Six Months to

30 September

2020

£'000

Audited

Year Ended

31 March

2021

£'000

 




 

(Loss) / profit for the period

(160)

(190)

9

 




 

 

Cash flow hedges - effective portion of changes in fair value

-

-

303

 

Deferred tax on other financial liabilities

-

-

30

 

Deferred tax on effective portion of changes in fair value

-

-

(58)

 

 



 

 

Items that are or may be reclassified subsequently to profit or loss

-

-

275

 

 

 

 

 

 

Re-measurement of the FIC defined benefit pension scheme

-

-

(272)

 

Movement on deferred tax asset relating to the pension scheme

-

-

71

 





 

Items which will not ultimately be recycled to the income statement

-

-

(201)

 

Total other comprehensive income

-

-

74

 

Total comprehensive (loss) / income

(160)

(190)

83

 

 

Condensed Consolidated Statement of Changes in Shareholders' Equity

For the Six Months Ended 30 September 2021

 

 

 

 

 

 

Unaudited

Six Months to

 30 September

2021

£'000

Unaudited

Six Months to

30 September

2020

£'000

Audited

Year Ended

31 March

2021

£'000

 

 

 

 

Shareholders' funds at beginning of period

38,896

38,792

38,792

 

 

 

 

(Loss) / profit for the period

(160)

(190)

9

Cash flow hedges - effective portion of changes in fair value

-

-

303

Deferred tax on effective portion of changes in fair value

-

-

(58)

Deferred tax on other financial liabilities

-

-

30

Re-measurement of the defined benefit pension liability, net of tax

-

-

(201)

Total comprehensive (loss) / income

(160)

(190)

83

Transactions with owners in their capacity as owners:

 

 

 

Share-based payments

10

22

1

Share option exercise

(11)

(32)

20

Transactions with owners

(1)

(10)

21

Shareholders' funds at end of period

38,735

38,592

38,896

                                                                                                                 



 

Notes to the Unaudited Interim Statements

 

1. Basis of Preparation

 

This interim financial statement comprises the condensed consolidated balance sheets at 30 September 2021, 30 September 2020 and 31 March 2021 and condensed consolidated statements of income, comprehensive income, cash flows and changes in shareholders' equity for the periods then ended and related notes of FIH group plc (hereinafter 'the interim financial information').

 

In adopting the going concern basis of preparation in the interim financial statements, the directors have considered the current trading performance of the Group, and the principal risks and uncertainties it faces. This includes the modelling of "severe but plausible" downside scenarios including longer term changes brought about by COVID-19 in the key markets of group companies, in addition to a cautious scenario for the more near-term impact of COVID-19.

 

The directors believe that the Group is well placed to manage the risks and uncertainties it faces. As such, the directors have a reasonable expectation that the Group will have adequate financial resources to continue in operational existence and have, therefore, considered it appropriate to adopt the going concern basis of preparation in the interim financial statements.

 

The interim financial information has been prepared in accordance with the accounting policies set out in the Group's 2021 annual financial statements. As permitted, these interim financial statements have been prepared in accordance with AIM rules and not in accordance with IAS34 'Interim Financial Reporting'.

 

Section 245 Statement

 

The comparative figures for the financial year ended 31 March 2021 are not the Company's full statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditor was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or 498 (3) of the Companies Act 2006.



 

2. Segmental Revenue and Profit Analysis

 

Unaudited - Six Months Ended 30 September 2021

 

 

 

General Trading (Falkland Islands)

Ferry Services (Portsmouth)

Art Logistics and Storage

(UK)

Unallocated

Total

 

 

£'000

£'000

£'000

£'000

£'000

 

Revenue

9,895

1,496

5,876

-

17,267

 

 

 

 

 

 

 

 

Segment operating profit before non-trading items

651

123

54

-

828

 

 

 

 

 

 

 

 

Non-trading items

-

-

(44)

-

(44)

 

 

 

 

 

 

 

 

Segment operating profit before net financing costs

651

123

10

-

784

 

 

 

 

 

 

 

 

Finance expense

(35)

(152)

(234)

-

(421)

 

 

 

 

 

 

 

 

Segment profit / (loss) before tax

616

(29)

(224)

-

363

 

 

 

 

 

 

 

 

Assets and liabilities

 

 

 

 

 

 

Segment assets

30,474

10,644

25,642

8,059

74,819

 

Segment liabilities

(8,334)

(8,518)

(17,475)

(1,757)

(36,084)

 

Segment net assets

22,140

2,126

8,167

6,302

38,735

 

 

 

 

 

 

 

 

Other segment information

 

 

 

 

 

 

Capital expenditure:

 

 

 

 

 

 

  Property, plant and equipment

264

38

34

-

336

 

  Investment properties

769

-

-

-

769

 

Total capital expenditure

1,033

38

34

-

1,105

 

  Capital expenditure: cash

1,033

38

34

-

1,105

 

  Capital expenditure: non-cash

-

-

-

-

-

 

Total capital expenditure

1,033

38

34

-

1,105

 

 

Depreciation and amortisation:

 

 

 

 

 

 

  Property, plant and equipment

407

224

470

-

1,101

 

  Investment properties

98

-

-

-

98

 

  Computer software

-

-

16

-

16

 

Total depreciation and amortisation

505

224

486

-

1,215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underlying profit/(loss)

 

 

 

 

 

 

Segment operating profit before non-trading items

651

123

54

-

828

 

Finance expense

(35)

(152)

(234)

-

(421)

 

Underlying profit / (loss)

before tax

616

(29)

(180)

-

407

 



 

2. Segmental Revenue and Profit Analysis (Continued)

 

Unaudited - Six Months Ended 30 September 2020

 

 

 

 

General Trading (Falkland Islands)

Ferry Services (Portsmouth)

Art Logistics and Storage

(UK)

Unallocated

Total

 

 

£'000

£'000

£'000

£'000

£'000

 

Revenue

9,735

800

3,849

-

14,384

 

 

 

 

 

 

 

 

Segment operating profit / (loss) before non-trading items

867

(267)

(273)

-

327

 

 

 

 

 

 

 

 

Non-trading items

-

-

-

(102)

(102)

 

 

 

 

 

 

 

 

Segment operating profit / (loss) before net financing costs

867

(267)

(273)

(102)

225

 

 

 

 

 

 

 

 

Finance expense

(62)

(168)

(242)

-

(472)

 

 

 

 

 

 

 

 

Segment profit / (loss) before tax

805

(435)

(515)

(102)

(247)

 

 

 

 

 

 

 

 

Assets and liabilities

 

 

 

 

 

 

Segment assets

33,000

10,922

30,319

5,051

79,292

 

Segment liabilities

(7,584)

(8,939)

(18,528)

(5,649)

(40,700)

 

Segment net assets / (liabilities)

25,416

1,983

11,791

(598)

38,592

 

 

 

 

 

 

 

 

Other segment information

 

 

 

 

 

 

Capital expenditure:

 

 

 

 

 

 

  Property, plant and equipment

362

-

-

-

362

 

  Investment properties

300

-

-

-

300

 

Total capital expenditure

662

-

-

-

662

 

  Capital expenditure: cash

662

-

-

-

662

 

  Capital expenditure: non-cash

-

-

-

-

-

 

Total capital expenditure

662

-

-

-

662

 

 

Depreciation and amortisation:

 

 

 

 

 

 

  Property, plant and equipment

381

226

456

-

1,063

 

  Investment properties

78

-

-

-

78

 

  Computer software

-

-

34

-

34

 

Total depreciation and amortisation

459

226

490

-

1,175

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underlying profit/(loss)

 

 

 

 

 

 

Segment operating profit / (loss) before non-trading items

867

(267)

(273)

-

327

 

Finance expense

(62)

(168)

(242)

-

(472)

 

Underlying profit / (loss)

before tax

805

(435)

(515)

-

(145)

 



 

2. Segmental Revenue and Profit Analysis (Continued)

 

Year Ended 31 March 2021

 

 

 

General Trading (Falkland Islands)

Ferry Services (Portsmouth)

Art Logistics and Storage

(UK)

Unallocated

Total

 

 

£'000

£'000

£'000

£'000

£'000

 

Revenue

20,874

1,445

10,259

-

32,578

 

 

 

 

 

 

 

 

Segment operating profit / (loss) before non-trading items

1,852

(856)

30

-

1,026

 

 

 

 

 

 

 

 

Non-trading items

500

(140)

(221)

(82)

57

 

 

 

 

 

 

 

 

Segment operating profit / (loss) before net financing costs

2,352

(996)

(191)

(82)

1,083

 

 

 

 

 

 

 

 

Finance expense

(68)

(329)

(484)

-

(881)

 

 

 

 

 

 

 

 

Segment profit / (loss) before tax

2,284

(1,325)

(675)

(82)

202

 

 

 

 

 

 

 

 

Assets and liabilities

 

 

 

 

 

 

Segment assets

29,498

11,411

33,648

5,639

80,196

 

Segment liabilities

(8,687)

(10,266)

(22,062)

(285)

(41,300)

 

Segment net assets

20,811

1,145

11,586

5,354

38,896

 

 

 

 

 

 

 

 

Other segment information

 

 

 

 

 

 

Capital expenditure:

 

 

 

 

 

 

  Property, plant and equipment

358

-

540

-

898

 

  Investment properties

702

-

-

-

702

 

Total capital expenditure

1,060

-

540

-

1,600

 

  Capital expenditure: cash

1,060

-

151

-

1,211

 

  Capital expenditure: non-cash

-

-

389

-

389

 

Total capital expenditure

1,060

-

540

-

1,600

 

 

Depreciation and amortisation:

 

 

 

 

 

 

  Property, plant and equipment

816

451

926

-

2,193

 

  Investment properties

37

-

-

-

37

 

  Computer software

-

-

63

-

63

 

Total depreciation and amortisation

853

451

989

-

2,293

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underlying profit/(loss)

 

 

 

 

 

 

Segment operating profit / (loss) before non-trading items

1,852

(856)

30

-

1,026

 

Finance expense

(68)

(329)

(484)

-

(881)

 

Underlying profit / (loss)

before tax

1,784

(1,185)

(454)

-

145

 

 



 

3. Non-trading Items

 


Unaudited

Six Months to

30 September

2021

£'000

Unaudited

Six Months to

30 September

2020*

£'000

Audited

Year Ended

31 March

2021

£'000





Profit / (loss) before tax as reported

363

(247)

202





Restructuring costs

44

102

443

Other credits

-

-

(500)

Non-trading items

44

102

(57)





Underlying profit / (loss) before tax

407

(145)

145

 

* Restated to exclude restructuring costs from underlying loss before tax.

 

Restructuring costs comprise people related costs including redundancy. Other credits relate to derecognition of historic

liabilities, which were previously included within accruals, on the basis that the amounts are no longer enforceable.

 

4. Finance Expense

 


Unaudited

Six Months to

30 September

2021

£'000

Unaudited

Six Months to

30 September

2020

£'000

Audited

Year Ended

31 March

2021

£'000





Interest payable on bank loans

217

252

469

Net interest cost on the FIC defined benefit pension scheme liability

35

60

64

Lease liabilities finance charge

169

160

348

Total finance expense

421

472

881





5. Taxation

 

 

Unaudited

Six Months to

30 September

2021

£'000

Unaudited

Six Months to

30 September

2020

£'000

Audited

Year Ended

31 March

2021

£'000

 

 

 


Current tax charge / (credit)

116

(57)

(52)

Prior year research and development tax credit

(39)

-

-

Deferred tax charge

446

-

245

Total tax expense / (credit)

523

(57)

193

 

The current tax charge has been estimated on the basis of 19% and 26% of profits arising in the UK and the Falkland Islands respectively (September 2020: based on blended rate of 23.0%).

 

An increase in the UK corporation tax rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021.  This will increase the future tax charge for the Group and has increased the deferred tax liability of the Group and the tax charge for the six months ended 30 September 2021 by an estimated £446,000.

6. Earnings Per Share on Underlying Profit

 

To provide a comparison of earnings per share on underlying performance, the calculation below sets out basic and diluted earnings per share based on underlying profits.

 

 

Unaudited

Six Months to

30 September

2021

Number

Unaudited

Six Months to

30 September

2020

Number

Audited

Year Ended

31 March

2021

Number

 

 

 

 

Weighted average number of shares in issue

12,517,241

12,509,543

12,470,827

Less: shares held under the ESOP*

-

(1,633)

-

Weighted average number of shares in issue excluding the ESOP* shares

12,517,241

12,507,910

12,470,827

Maximum dilution with regards to share options

2,513

201,603

281,490

Diluted weighted average number of shares

12,519,754

12,709,513

12,752,317

 

* The ESOP was the Employee Share Ownership Plan, which was terminated on 9 August 2019.

 

 


Unaudited

Six Months to

30 September

2021

£'000

Unaudited

Six Months to

30 September

2020*

£'000

Audited

Year Ended

31 March

2021

£'000

Underlying profit / (loss) before tax (note 3)

407

(145)

145


 



Underlying taxation

(531)

38

(147)

Underlying loss after tax

(124)

(107)

(2)





Basic earnings per share on underlying loss

(1.0p)

(0.9p)

0.0p

Diluted earnings per share on underlying loss

(1.0p)

(0.9p)

0.0p

 

* Restated to exclude restructuring costs from underlying loss before tax.

 

7.  Employee Benefits

 

The Company has elected to follow precedent and decided not to revalue its pension obligations at the half-year. The Group's pension obligation, the Falkland Islands Company Limited Pension Scheme, is unfunded and therefore not subject to valuation volatility as a result of stock market fluctuations.

 

8.  Cash and Cash Equivalents

 


Unaudited

30 September

2021

£'000

Unaudited

30 September

2020

£'000

Audited

31 March

2021

£'000

Cash and cash equivalents in the balance sheet

7,976

14,367

14,556

 



 

8.  Cash and Cash Equivalents (Continued)

 


Unaudited

Six Months to

30 September

2021

£'000

Unaudited

Six Months to

30 September

2020

£'000

Audited

Year Ended

31 March

2021

£'000

Net (decrease) / increase in cash and cash equivalents

(6,580)

5,259

5,451

Exchange losses

-

-

(3)

Net (decrease) / increase in cash and cash equivalents after exchange gains

(6,580)

5,259

5,448

Bank loan draw downs

-

(5,000)

(5,000)

Bank loan repayments

5,468

170

624

Lease liabilities drawdown: non-cash

-

-

-

Lease liabilities drawdown: cash

-

-

(389)

Lease liabilities repayments

306

432

649

Decrease / (increase) in interest bearing loans and borrowings

5,774

(4,398)

(4,116)


 


 

Net (increase) / decrease in debt

(806)

861

1,332

Net debt brought forward

(13,667)

(14,999)

(14,999)

Net debt

(14,473)

(14,138)

(13,667)

 

Net debt

Cash balance

7,976

14,367

14,556

Less: Total interest-bearing loans and borrowings

(22,449)

(28,505)

(28,223)

Net debt

(14,473)

(14,138)

(13,667)

 

9.  Interest-bearing Loans and Borrowings

 


Unaudited

30 September

2021

£'000

Unaudited

30 September

2020

£'000

Audited

31 March

2021

£'000

Non-current liabilities

 

 

 

Secured bank loans

13,702

19,638

17,313

Lease liabilities

7,344

7,399

7,486

Total non-current interest-bearing loans and lease liabilities

21,046

27,037

24,799

Current liabilities

 


 

Secured bank loans

940

926

2,797

Lease liabilities

463

542

627

Total current interest-bearing loans and lease liabilities

1,403

1,468

3,424

Total liabilities

 


 

Secured bank loans

14,642

20,564

20,110

Lease liabilities

7,807

7,941

8,113

Total interest-bearing loans and lease liabilities

22,449

28,505

28,223

 

 

10.  Capital Commitments

 

At 30 September 2021 the Group had capital commitments of £1,061,000 (Momart: £426,000 and FIC: £635,000) which have not been provided for in these financial statements.

 

At 30 September 2020 the Group had capital commitments of £389,000 at Momart, which have not been provided for in these financial statements.



 

Directors

 

Registered Office

Robin Williams

Non-executive Chairman

Kenburgh Court

John Foster

Chief Executive

133-137 South Street

Stuart Munro

Chief Financial Officer

Bishop's Stortford

Jeremy Brade

Non-executive Director

Hertfordshire CM23 3HX

Rob Johnston

Non-executive Director

E: admin@fihplc.com

Dominic Lavelle

Non-executive Director

W: www.fihplc.com

 

 

Registered number 03416346

Company Secretary

 

 

Iain Harrison

 


 

 

 

 

 

 

Corporate Information

 

 

Stockbroker and Nominated Adviser

W.H. Ireland Limited

24 Martin Lane,

London EC4R 0DR

 

 

 

 

 

 

Solicitors

BDB Pitmans LLP

50 Broadway,

Westminster,

London SW1H 0BL

 

 

 

 

 

 

Auditor

KPMG LLP

St. Nicholas House,

Park Row,

Nottingham NG1 6FQ

 

 

 

 

 

 

Registrar

Link Group

The Registry, 34 Beckenham Road,

Beckenham,

Kent BR3 4TU

 

 

 

 

 

Financial PR

Novella Communications

South Wing, Somerset House

London

WC2R 1LA

 

 

 

 

 

The Falkland Islands Company

 

Kevin Ironside, Director

T: 00 500 27600

E: info@fic.co.fk

W: www.falklandislandscompany.com

 

The Portsmouth Harbour Ferry Company

Clive Lane, Director

T: 02392 524551

E: admin@gosportferry.co.uk

W: www.gosportferry.co.uk

 

Momart Limited

 

Steve Lane, Director

T: 020 7426 3000

E: enquiries@momart.com

W: www.momart.com

 

www.fihplc.com

 

 

 

 

 

 

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