PHSC reports loss in trading update

Ahead of its shareholder meeting on Thursday, PHSC reported that it expects to see an improvement following a mixed first quarter for its subsidiaries.

For the four months ended 31 July, the health, safety and environmental consultancy posted a consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) loss of about £94,000 on sales of £2.3m. However, the company said it expects the financial position to improve before the end of the first half.

Cash at 6 September was £565,000, which includes net proceeds from a recent share placing in August.

The first four months of the year quarter had been mixed for its eight subsidiaries, with some reporting either a loss, or a profit and a few being affected by the weak sterling which followed the Brexit vote from the EU referendum in June.

The security subsidiary B to B Links made a loss of about £4,000 and is forecast to have sales amounting to about £1.2m the first half of the year. Since the Brexit vote, there had been an erosion of gross margins due to higher trade costs for imported hardware, security tags and labels.

The anti-theft solutions provider SG Systems UK also made a loss of £37,000 due to an unexpected and lengthy hiatus in new store opening by one of its larger customers, which has now been resolved, delays to a source tagging project, and high costs for imported goods due to the weak sterling.

The introduction of new products to new customers has begun to bear fruit, and enable it to return to profit in August and September.

Adamson’s Laboratory Services recorded a loss of £54,000 as it faces difficulties in a competitive market for asbestos management services.

However, health and safety consultancy and training course provider RSA Environmental Health made a £24,000 profit and is affected by the closure of schools in August, which the majority of its revenues are drawn. Activity is expected to pick up as schools return in September.

Quality Leisure Management also made a profit of about £8,000 due to local authorities coming under greater financial pressure, which is the main source of funding for leisure clients.

Personnel Health & Safety Consultants expects to deliver around £100k of profit for the first half and has reached £70,000 by the end of July as its largest client agreed to extend a contract.

Fire safety company Inspection Services made a £15,000 profit and expects around £20,000 for the first half, ahead of last year as it secured its largest single contract with an insurance broker for £25,000.

Management system trainer QCS International had a profit of £40,000 and expects around £60,000 for the first half.

Shares in PHSC were down 4.29% to 23.45p at 0904 BST.