Possible pensions headache hangs over Slingsby

9th Sep 2016 11:03

(ShareCast News) - Industrial and workplace equipment supplier Slingsby posted its interim results for the six months to 30 June on Friday, with turnover increasing to £9.3m as a direct result of the company's March acquisition of ESE Direct.The AIM-traded firm said as a result, group sales on a comparable basis were 2.7% below where they were a year ago, with sales growth at ESE being offset by a decline at the Slingsby business.Its board had reported in a trading statement on 30 June that a competitive market has impacted on margins, which - along with the reduced sales - led to a group operating loss before exceptional items of £0.16m, against a profit of £0.01m a year ago.The ESE division generated operating profits of £0.1m in the period, and remained cash generative, the board reported.Group profit before exceptional items, interest, depreciation and amortisation was £0.1m in the first half."Trading remains volatile - and was particularly so either side of the Brexit vote - and management remains focussed on realising synergies across the group and on initiatives to improve the sales performance and our commercial proposition," said interim chairman Dominic Slingsby."Costs have also been reduced and the Group IT system is being installed at ESE."The company has an obligation to fund its defined benefit pension scheme and contributions to this scheme totalled £0.5m in the 2015 calendar year, which were paid in equal monthly contributions."This, together with the scheme's running costs of approximately £160,000 per annum, represents a major commitment for the group to meet," Slingsby explained.He said since the vote to leave the European Union was announced and in common with many other schemes, the outlook for pension commitments has worsened and could lead to the company paying an increased amount into the scheme in the longer term."Following this change of circumstances, the company is working with the pension scheme trustee to look at options for a longer term solution to these pension commitments."Whilst this takes place, the company has agreed with the trustee that it will suspend deficit reduction monthly payments to the scheme from 1 July 2016 until at least the end of the year," he said.The board said that, in view of the muted trading performance, it decided not to declare an interim dividend.