StockMarketWire.com - PHSC Plc said consolidated group revenue for the year to March 31 was about £7.04m, representing a fall of 9% year-on year from £7.7m.

"The reduction arises principally from the ending of a large asbestos management contract previously delivered by Adamsons Laboratory Services Limited (ALS) with a leading university.

ALS was unable to find sufficient replacement work to bridge the gap during the second half.

"It is encouraging that Consolidated Group revenue in the second half increased around 12% over the first half but, as explained below, it is likely that due principally to an impairment in the carrying value of goodwill the results for the full year will not meet our expectation at the time of the interim results statement that we would see a stronger second half to the year," the company said.

Underlying EBITDA (excluding the goodwill impairment charge below) stands at £0.418m (2015: £0.818m) prior to various costs associated with the two acquisitions made in December 2015.

Legal and other costs totalled approximately £50,000. In addition, a further £50,000 has been expended in meeting the initial integration costs of one of those acquisitions, SG Systems (UK) Limited, in the period to 31 March 2016.

Should these costs not be recovered over the earn-out period, they are deductible from the final instalment due under the share purchase agreement.

"Given the difficult trading conditions experienced by ALS, and in accordance with standard tests applied by our Auditors, we anticipate an impairment of £0.6m in the carrying value of goodwill in respect of ALS, representing a reduction of approximately 9% in the consolidated net assets of the Group before this adjustment," the company said.

"The Company has adopted a progressive dividend policy. The directors believe that the Company's distributable reserves are more than adequate to support the payment of a dividend in line with previous years, should such a resolution be supported at the AGM.

"Management accounts indicate that both Group revenues and EBITDA in the early part of 2016-17 are running ahead of the comparative figures for last year.

"Cash flow remains positive and the average bank balance in June 2016 has been circa £0.25m. The Company also has a facility with its bankers, currently not called upon, of £0.2m."






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