Samuel Heath posts improved full-year profit despite weaker top line

Samuel Heath & Sons PLC on Friday hailed its cost reduction measures as it noted the successful passing on in full of 10% tariff measures.

The Birmingham, England based shower and bathroom accessory manufacturer reported a 32% increase in pretax profit to £1.2 million for the financial year that ended March 31, up from £884,000 a year earlier.

However, revenue fell 3.1% to £14.8 million from £15.2 million, with the improved earnings attributed to cost reductions.

Selling and distribution costs were 6.6% lower at £3.7 million from £4.0 million, and administrative expenses fell 6.5% to £2.2 million from £2.3 million.

Finance income also improved, more than doubling to £137,000 from £64,000, and other operating income multiplied to £61,000 from £18,000, with these further supporting its bottom line.

Samuel Heath attributed its weaker revenue to the factors outlined at its interims late last year, namely worsened economic conditions, tied in part to the UK budget and US presidential election.

The company proposed a final dividend of 8.5625p, flat with the prior year. This brings its total dividend to 13.0625p, also flat.

Discussing the effect of US policy measures, Samuel Heath noted the imposition of tariffs by the US administration in April this year, stating that it created volatility in a key export market and weakened the US dollar in relation to sterling.

However, it said it has been successful in passing on in full the existing 10% tariff level.

Looking to the future, Samuel Heath said it is ‘cautiously optimistic’ despite changes at the macro level.

Shares in the company were flat at 310.00 pence on Friday afternoon in London.

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