Final Results 31st March 2013

Sutherland Health Group announces final results for the year ended 31st March 2013.

                                                                                                                                                                                                                                                                                                       29 AUGUST 2013
                                                          SUTHERLAND HEALTH GROUP PLC
                                             (“Sutherland Health Group” or “the Company”)
                                                                      ISDX Symbol: SHGP
 
 
                                                                        FINAL RESULTS
 
The Board of Sutherland Health Group, a national supplier of personal care, 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 2013.
 
Highlights
 
• Sales increased by 15% to £1,044,413
• Gross profit increased by 1% to £460,752
• Operating profit increased by 42.0% to £69,521 (2012:£48,984)
• Net profit increased by 45.8% to £36,580 (2012:£25,086)
• Gross margin decreased from 50.0% to 44.0%
• Overheads reduced by 4.0% to £401,947
• Reduced dependency on NHS Contracts
• 3 new products launched in personal care
• Amazon increase products stocked from 36 to 39
 
Commenting on today’s news Chairman John French said:
 
“I am delighted to report that for a second year running we have seen the group deliver a net profit and I am particularly pleased with the 45.8% increase in those profits. The group has made significant changes in its product mix having launched three new products in the second half of the financial year taking it into the personal care market, all of which have been taken up by NHS Hospitals. In addition, the Sutherland Medicated Shampoo, Sutherland Baby Bath and Baby Shampoo also have the potential to gain sales in the retail sector and were immediately taken up by Amazon when we launched. We are now looking to broaden the distribution of these products into other selected retail outlets.
 
The management have continued to keep a tight control on overheads and have delivered a further 4% reduction in the operating costs of the group”.
 
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,
 
I am delighted to report to you that the group has seen a significant growth in sales and profitability.
 
Highlights
 
• Sales increased by 15% to £1,044,413
• Gross profit increased by 1% to £460,752
• Operating profit increased by 42.0% to £69,521 (2012:£48,984)
• Net profit increased by 45.8% to £36,580 (2012:£25,086)
• Gross margin decreased from 50.0% to 44.0%
• Overheads reduced by 4.0% to £401,947 • Reduced dependency on NHS Contracts
• 3 new products launched in personal care
• Amazon increase products stocked from 36 to 39
 
Following a year where sales grew by 15% and delivered a profit, it is pleasing to report to Shareholders that we have continued that sales growth and achieved the milestone of exceeding a £1 million in sales. Even more important is the increase in net profit which increased by 45.8 %. The extension of distribution of sales outside the NHS coupled with an increase in the products now supplied has helped us to continue that growth in both sales and profits.
 
It has been very much an on-going key strategy to improve the distribution of our products outside of the NHS whilst maintaining a strong on-going relationship. It is very pleasing to see that the management’s hard work is starting to bring the benefits in terms of turnover and profitability. The group has strengthened its business with key wholesalers who supply GPs; Hospitals: Pharmacies and Care Homes enabling our products to be distributed more widely in new sectors other than the hospitals which has been the traditional trade sector that the group supplies.
 
Our relationship with the major internet retailer Amazon.co.uk is growing with 39 of our own products now listed and stocked with a further 7 products that we supply on behalf of other companies. Sales growth via this important retailer continues to be strong.
 
We launched in the second half of the period under review three new products. Sutherland Medicated Shampoo; Sutherland Baby Shampoo; and Sutherland Baby Bath. These products were immediately taken up by Amazon and are making good progress in sales into the NHS Hospitals. The launch of these products now provides the opportunity to extend into other retail outlets and work has already begun on identifying suitable customers.
 
The group continues to enhance standards of quality assurance and has increased the number of products manufactured in the United Kingdom ensuring that our customers continue to have a sustainable supply of high quality products. The group continues to successfully maintain ISO 9001:2008; ISO13485:2003 and ISO13485:2012 quality approvals.
 
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 the new personal care products.
 
We continue to broaden the group’s product range enabling us to become an even more significant supplier to our existing customers whilst enabling us to open new channels of distribution.
 
Financial Review
 
During the period to 31st March 2013 the Group achieved a turnover of £1,044,413 (2012: £910,548) representing an increase in sales of 15% over the previous year, producing a gross profit of £460,752 (2012: £455,317). Administrative and distribution expenses were £401,947 (2012: £416,972) after charging £25,576 (2012: £29,221) for amortisation and depreciation, and a foreign exchange gain of £nil (2012: £2,403). The pre-tax profit was £43,074 (2012: £16,310) and the profit per ordinary share was 0.05p (2012: 0.04p). Cash at the bank on the balance sheet as at the 31st March 2013 was £137,494 (2012: £71,824)
 
Post Balance Sheet
 
Since the end of the period on the 2nd April 2013 the group announced that it had appointed Zeus Capital as its corporate adviser and broker with effect from 1st April 2013, and on 16th May 2013 the group announced that it had successfully placed 8 million new ordinary shares at a price of 1.25p per share raising £100,000 for working capital and new product development. The Board were very pleased to see that the majority of this money was invested by our existing shareholders including Chief Executive George Sutherland who also participated in the placing.
 
Outlook
 
The new financial year has started in line with our expectations with non-NHS wholesalers showing continued growth in sales and share of our overall business. Sales in the NHS is showing a mixed picture with sales to NHS Supply Chain less than last year but sales to other Hospital customers showing growth. The group has two contract tenders that it will be bidding for in the new financial year which if successful would be both sales and profit enhancing. Whilst the group recognises the opportunity these possible contracts represent, it continues to develop business outside of the NHS to ensure that the dependence on such contracts continues to reduce.
 
The group continues to look at new opportunities for new product development and is also reviewing products that may be suitable for launch into our existing customer base that are being presented to us by companies wishing to enter the UK market.
 
I would like to thank the management and staff for their commitment and determination in achieving a second year of growth in sales and profitability in what is a difficult trading environment. I would also like to take this opportunity to thank the group’s advisers and of course our shareholders who have demonstrated in the recent placing their continued support of our plans.
 
 
F J French
 
Chairman
 

  CONSOLIDATED PROFIT AND LOSS ACCOUNT
  FOR THE YEAR ENDED 31 MARCH 2013
 
                                                                                                                      2013                               2012
                                                                                                 £                              £
 
TURNOVER                                                                                                1,044,413                 910,548
 
Cost of sales                                                                           (583,661)                  (455,231)
 
GROSS PROFIT                                                                          460,752                 455,317
 
Distribution costs                                                                       (39,670)                (51,872)
 
Administrative expenses                                                            (362,277)              (365,100)
 
Other operating income                                                                                 10,716                       10,639
 
OPERATING PROFIT                                                                     69,521                   48,984
 
Interest payable and similar charges                                             (26,447)                     (32,674)
 
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION                         43,074                       16,310
 
Tax on profit on ordinary activities                                                  (6,494)                          8,77
 
PROFIT FOR THE FINANCIAL YEAR                                      
                                                                                                                        36,580                   25,086
 

All amounts relate to continuing operations.


There were no recognised gains and losses for 2013 or 2012 other than those included in the Profit and Loss Account.

EARNING PER SHARE IN PENCE                                                                    0.05p                    0.04p

DILUTED EARNING PER SHARE IN PENCE                                                    0.05p                         0.04p

 

 

CONSOLIDATED BALANCE SHEET  AS AT 31 MARCH 2013

 

                                                                                                    2013                          2012

                                                                       £                          £         £                    £

FIXED ASSETS

Intangible assets                                                                 247,546                         268,922

Tangible assets                                                                      6,286                          10,176

                                                                                                  253,832                         279,098

CURRENT ASSETS

Stocks                                                         210,538                       184,796

Debtors                                                        149,502                       223,714

Cash at bank and in hand                                137,494                               71,824

                                                                                  497,534                        480,334

CREDITORS: amounts falling due within one year    (272,328)                     (261,099)

NET CURRENT ASSETS                                                                      225,206                               219,235

TOTAL ASSETS LESS CURRENT LIABILITIES                                 479,038                         498,333

CREDITORS: amounts falling due after more than one year                  (244,490)                      (276,365)

NET ASSETS                                                                                       234,548                         221,968

CAPITAL AND RESERVES

Called up share capital                                                                       139,505                         139,505

Share premium account                                                     1,072,561                      1,096,561

Other reserves                                                                                   111,478                         111,478

Profit and loss account                                                   (1,088,996)                    (1,125,576)

SHAREHOLDERS' FUNDS                                                                  234,548                         221,968

 

 

                                                   CONSOLIDATED CASH FLOW STATEMENT                                                    FOR THE YEAR ENDED 31 MARCH 2013

                                                                                                                      2013                                2012
                                                                                                   £                             £
 
Net cash flow from operating activities                                           148,366                 236,894
 
Returns on investments and servicing of finance                              (26,447)                    (32,675)
 
Taxation                                                                                         (64)                    (119)
 
Capital expenditure and financial investment                                                 (310)                  (1,946)
 
CASH INFLOW BEFORE FINANCING                                                        121,545                     202,154
 
Financing                                                                                                     (55,875)               (143,983)
 
INCREASE IN CASH IN THE YEAR                                                               65,670                   58,171

 

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/DEBT
FOR THE YEAR ENDED 31 MARCH 2013
 
                                                                                                                         2013                             2012
                                                                                                                             £                             £
 
Increase in cash in the year                                                           65,670                   58,171
 
Cash outflow from decrease in debt and lease financing                       31,875                 110,483
 
MOVEMENT IN NET DEBT IN THE YEAR                                                      97,545                 168,654
 
Net debt at 1 April 2012                                                            (204,541)              (373,195)
 
NET DEBT AT 31 MARCH 2013                                                               (106,996)              (204,541)

 

 

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
 
Ross Andrews
Andrew Jones
Zeus Capital Ltd
E: ross.andrews@zeuscapital.co.uk
T: 0161 831 1512
 
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 Group 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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