Final Results 31st March 2012

Sutherland Health Group announces final results for the year ended 31st March 2012.

 28 AUGUST 2012

SUTHERLAND HEALTH GROUP PLC
(“Sutherland Health Group” or “the Company”)
PLUS Symbol: SHGP


FINAL RESULTS

 

 

The Board of Sutherland Health Group, a national supplier of patient hygiene, sexual health and diagnostic products to customers including the NHS is pleased to announce its Final Results for the year ended 31st March 2012.   

Highlights

•       Sales increased by 24% to £910,548
•       Gross profit increased by 16% to £455,317
•       Operating profit of £48,984 (2011: loss of £41,753)
•       Net profit of £25,086 (2011: loss of £60,024)
•       Gross margin decreased from 53.5% to 50.0%
•       Overheads reduced by 6.5% to £416,972
•       Reduced dependency on NHS Contracts
•       Increased distribution including 13 new Wholesalers
•       22 products stocked by Amazon.co.uk
•       11 further products stocked by Amazon.co.uk from 1st August 2012


Commenting on today’s news Chairman John French said: 

“I am delighted that we have seen a return to profitability, but I am particularly pleased that we have progressed well in changing the shape of our future business, reducing our dependence on NHS Hospitals by expanding distribution into other medical and retail customers with a now broader range of products.

I am pleased to inform shareholders today that we have extended that progress even further by Amazon UK’s Health & Personal Care division agreeing to stock a further 14 of our products in addition to the 22 of our products already stocked.

The new financial year has started well with unaudited management accounts showing turnover and profitability for the period 1st April to 31st July 2012 running at higher levels than the same period last year.”     

The Directors do not recommend payment of a final dividend.

The following information contained in this announcement has been extracted from Audited information.

Dear Shareholder,

Whilst the markets have been in very choppy waters with many companies finding trading particularly difficult at this present time, I am delighted to report to you that the Company has seen a significant growth in sales and a return to profitability.
     
Highlights

•       Sales increased by 24% to £910,548
•       Gross profit increased by 16% to £455,317
•       Operating Profit £48,984 (2011: loss £41,753)
•       Profit of £25,086 (2011: loss of £60,024)
•       Gross margin 50.0% (2011: 53.5%)
•       Overheads reduced by 6.5% to £416,972
•       Reduced dependency on NHS Contracts
•       Increased distribution including 13 new Wholesalers
•       22 products stocked by Amazon.co.uk
  
The Company has generally seen consistent annual turnover growth with the exception of the year to 31 March 2011. So it is my pleasure to report to you that we are back in a growth phase having extended our distribution outside of the NHS and having increased the number of products that we now market.  

It has been very much a key strategy to improve the distribution of our products outside of the NHS whilst maintaining a strong on-going relationship with them. It has been very pleasing to see that we are starting to see the benefits impact on our turnover and profitability. The Company has in the period under review increased its business with key wholesalers who supply GP’s; Hospitals: Pharmacies and Care Homes. This has also enabled our products to be introduced to new sectors other than the hospitals which have been the core trade sector that the Company supplies.

Our announcement during the year that we have 22 products listed with the major internet retailer Amazon.co.uk is further evidence of the distribution strategy clearly working. We have since launching with Amazon on the 1st August 2011 seen a steady climb in our monthly sales that bodes well for our future prospects with this important retailer.     

The Company has quality assurance as one of its key drivers and so continues to manufacture (where possible) most of its products in the United Kingdom to ensure that our customers have a sustainable supply of high quality products that represent excellent value for money. We are continuing our focus on customer service and have made significant inroads into improving our supply chain by better management of our purchasing and logistics that are already showing signs of improving our profitability too.         

The management team continue to keep costs under tight control and this year we have seen a further reduction in overall overheads despite having borne the development costs for a number of new products such as the babskin range of baby products.

By broadening the Company’s product range it is enabling us to offer a more attractive package to our customers that also ensures our gross profit continues to rise as they take on a wider range of new high quality products under our brand names.

Financial Review

During the period to 31st March 2012 the Company achieved a turnover of £910,548 (2011: £734,937) representing an increase in sales of 24% over the previous year, producing a gross profit of £455,317 (2011 £393,433). Administrative expenses were £416,972 (2011 £407,862) after charging £29,221 (2011 £26,762) for amortisation and depreciation, and a foreign exchange gain of £2,403 (2011 £5,184). The pre tax profit was £25,086 (2011 loss £60,024) and the profit per ordinary share was 0.04p (2011 loss 0.10p). Cash at the bank on the balance sheet as at the 31st March 2012 was £71,824 (2011 £13,653)

Post Balance Sheet

Since the end of the period on the 17th April 2012 the Company announced that it continued to develop its business with key wholesalers such as Phoenix; AAH; and Alliance that resulted in increased acceptance of new products that have been introduced in the year. We also reported increased activity with Amazon whilst continuing to maintain a strong relationship with the NHS.  

Outlook

The new financial year has started ahead of our expectations due to greater than anticipated demand for our products from our NHS customers as they have experienced supply issues from other manufacturers and suppliers many of which source or manufacture their products from outside the UK.

We aim to capitalise on this extra demand giving us the opportunity to broaden our distribution even further within NHS hospitals. It also gives us an opportunity to introduce sooner than expected a number of new products planned for launch in 2012/2013 that we have already begun development work on.
 
I am pleased to say that we continue to see good sales growth with our non-NHS business customers and in particular with Amazon whom we are now in discussions with to extend our range to include some of the new products in development.   
   
Your Board are pleased to inform you that the Company’s unaudited management accounts for the first four months show a strong performance in turnover growth and that the Company has continued to trade profitably.  

I would like to thank the management and staff for their excellent work in getting the Company back into profitability. I would also like to take this opportunity to thank the Company’s advisers and of course our shareholders who have been very supportive in our plans.

 

 


F J French

Chairman
 

 
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2012

                                                                                                        2012                     2011
                                                                                                           £                             £
                                                               

 
TURNOVER                                                                                     910,548                 734,937 
 
Cost of sales                                                                                (455,231)              (341,504)

 
GROSS PROFIT                                                                               455,317                 393,433
               
Distribution costs                                                                           (51,872)                 (37,788) 


Administrative expenses                                                              (365,100)               (407,862)
 
Other operating income                                                                   10,639                   10,464

 
OPERATING (LOSS)/PROFIT                                                            (48,984)                 (41,753)
 
Interest payable and similar charges                                             (32,674)                (18,271)

 
(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION          16,310                 (60,024)
 
Tax on (loss)/profit on ordinary activities                                          8,776  -

 
PROFIT / (LOSS) FOR THE FINANCIAL YEAR
  
                                                                                                       25,086                  (60,024)
  

All amounts relate to continuing operations.

There were no recognised gains and losses for 2012 or 2011 other than those included in the Profit and Loss Account.


EARNING PER SHARE IN PENCE                                                           0.04p                    (0.10p)

DILUTED EARNING PER SHARE IN PENCE                                             0.03p                    (0.09p)

 

 
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2012

                                                                                   2012                                                       2011
                                                                           £                     £                                       £                   £

  
FIXED ASSETS     
 
Intangible assets                                                                 268,922                                                 291,690
 
Tangible assets                                                                      10,176                                                  14,683 
      
                                                                                             279,098                                                306,373
 
CURRENT ASSETS    
 
Stocks                                                           184,796                                                   156,868 
  
Debtors                                                         223,714                                                   447,595 
 
Cash at bank and in hand                               71,824                                                       3,653  
      
                                                                      480,334                                                   618,116 
 
CREDITORS: amounts falling

due within one year                                     (261,099)                                                (388,259) 
 
NET CURRENT ASSETS/(LIABILITIES)                                     219,235                           229,857
 
TOTAL ASSETS LESS CURRENT LIABILITIES                           498,333                           536,230
 
CREDITORS: amounts falling due aftermore

                     than one year                                                (276,365)                         (305,848)

NET ASSETS/(LIABILITIES)
   
                                                                                             221,968   
                                                                                                                                     230,382
 
CAPITAL AND RESERVES    
 
Called up share capital                                                         139,505                           138,805
 
Share premium account                                                     1,096,561                        1,130,761
 
Other reserves                                                                     111,478                           111,478
 
Profit and loss account                                                     (1,125,576)                     (1,150,662)
  
SHAREHOLDERS' FUNDS  
  
                                                                                             221,968                           230,382


The financial statements were approved and authorised for issue by the board and were signed on its behalf on            23rd August 2012.

 

 

G M Sutherland
Director

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2012

                                                                                                       2012                      2011
 
                                                                                                           £                            £


Net cash flow from operating activities                                         236,894                (158,469)

Returns on investments and servicing of finance                          (32,675)                 (10,009)
   
                                                                                                                                                                              
Taxation   (119)   -
Capital expenditure and financial investment                                  (1,946)                (10,577)
      
  
CASH (OUTFLOW)/INFLOW BEFORE FINANCING                           (202,154)              (179,055)

Financing                                                                                      (143,983)               131,560
      
  
INCREASE/DECREASE IN CASH IN THE YEAR
                                                                                                       58,171                  (47,495)
 

 

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/DEBT
FOR THE YEAR ENDED 31 MARCH 2012

                                                                                                        2012                     2011
                                                                                                            £                            £


(Decrease)/Increase in cash in the year                                         58,171                  (47,495)

Cash outflow from decrease in debt and lease financing              110,483                   61,000
  
CHANGE IN NET DEBT RESULTING FROM CASH FLOWS                  168,654                   13,505

Other non cash changes   -                                                                                       (208,263)
  
MOVEMENT IN NET DEBT IN THE YEAR                                           168,654                (194,758)

Net debt at 1 April 2011                                                              (373,195)               (178,437)
  
NET DEBT AT 31 MARCH 2012
 
                                                                                                    (204,541)              (373,195)

 


The Directors of the Issuer accept responsibility for this announcement.

For further information:

John French, Chairman
Sutherland Health Group plc
john@sutherlandhealth.com
Tel: 07836 722 482

Heena Karani
Peterhouse Corporate Finance Ltd
heena@pcorpfin.com
Tel: 0207 469 0933

Notes to Editors:

Sutherland Health Group Plc is a national supplier of patient hygiene, personal care, nutrition, sexual health and diagnostic products to the UK National Health Service (NHS) and other UK customers. Its aim is to supply innovative solutions to current health issues by studying current trends and working alongside leading professionals who also work within the health sector.

The company is committed to developing and marketing high quality brands and products that will benefit health professionals and consumers alike in many areas of health. The Group has established its own brands:  Condomania® Condoms; Sutherland® Patient Hygiene and Personal Care; Lubricating Jelly; Thixo-D®  and Vision® pregnancy and gynaecology diagnostics. These products have already become established within the NHS business.

The Group is ISO and MHRA registered, and at present principally operates within the United Kingdom.

For further information on the Company visit www.sutherlandhealth.com

 
 

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