Half Yearly Report

21 September 2012

H C Slingsby plc

("the Group")

Report for the half year ended 30 June 2012

Statement by the Chairman

Trading conditions in the first half of the year continued to be challenging, as reflected in our turnover for the period of £7.5m (2011: £7.8m). Operating margin before exceptional items improved to 6.1% (2011: 4.9%), driven by management actions to decrease costs, including reducing staff numbers. The decision taken in September 2011 to source more product lines from the Far East and hold larger quantities of our fast moving lines to facilitate next day delivery also helped us to maintain margin in a very competitive market. The Group incurred exceptional redundancy costs of £0.1m (2011: £nil), resulting in an operating profit post-exceptionals of £0.3m (2011: £0.4m). Pre-tax profit was £0.2m (2011: £0.3m).

Inventory at 30 June 2012 was £2.4m (31 December 2012: £2.3m), the increase being attributable to sourcing more product from the Far East in sufficient quantities to meet requirements for efficient container transportation. The Group recorded a net cash inflow from operations of £0.7m (2011: £0.7m) and had net cash of £3.0m at 30 June 2012 (31 December 2011: £2.4m). Net cash at the period end is stated prior to payment of the final dividend for the year ended 31 December 2011 of £280,000. This was paid to shareholders in July 2012.

The deficit on the Group's defined benefit pension scheme, which is now closed to future accrual, increased to £10.7m (31 December 2011: £8.7m, as measured in accordance with IAS19). This was primarily due to lower bond yields increasing scheme liabilities and, to a lesser extent, weaker equity market returns. The finance expense associated with the pension scheme in the Income Statement rose to £152,000 (2011: £126,000). The Group continues to make monthly payments into the scheme as part of its pension deficit management plan.

Current trading conditions are still tough with no visible signs of recovery. The board nevertheless believes that your Group remains in a reasonable position to take advantage of opportunities for expansion and any upturn in the economy whenever that may occur.

The board recommends an unchanged interim dividend of 4.0p which will be paid on 4 January 2013 to shareholders on the Register at the close of business on 7th December 2012.

J R Waterhouse

Non-Executive Chairman

21 September 2012

Registered Office

Otley Road, Baildon, Shipley BD17 7LW

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Unaudited Condensed Consolidated Income Statement for the half year ended 30 June 2012

The results set out above derive entirely from continuing operations.

The above unaudited condensed consolidated income statement should be read in conjunction with the accompanying notes.

Unaudited Consolidated Statement of Comprehensive Income and Expense for the half year ended 30 June 2012

The above unaudited consolidated statement of comprehensive income and expense should be read in conjunction with the accompanying notes.

Unaudited Consolidated Balance Sheet as at 30 June 2012

The above unaudited consolidated balance sheet should be read in conjunction with the accompanying notes.

Unaudited Consolidated Statement of Changes in Shareholders' Equity

The above unaudited consolidated statement of changes in shareholders' equity should be read in conjunction with the accompanying notes.

Unaudited Consolidated Statement of Cash Flows for the half year ended 30 June 2012

The above unaudited consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Notes to the Interim Report for the half year ended 30 June 2012

1. Interim Financial Information

The unaudited condensed consolidated interim financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The interim financial statements, which are unaudited and have not been reviewed by the Company's auditors, have been prepared in accordance with the policies set out in the 2011 Annual Report and Accounts. The comparative figures for the year ended 31 December 2011 do not constitute full financial statements and have been abridged from the full accounts for the year ended on that date, on which the auditors gave an unqualified report, which did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006. The 2011 accounts have been delivered to the Registrar of Companies. The Company has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing the financial information.

2. Exceptional item

3. Taxation

The effective tax rate is nil (2011 half year: 19%, 2011 full year: 26.5%).

4. Cash generated from/(used in) Operations

Dividends payable of £280,000 were included in trade and other payables at the 30 June 2012 (2011: Nil both at the half year and year end).