TIDMGDWN

RNS Number : 6649V

Goodwin PLC

15 December 2021

GOODWIN PLC

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the half year ended 31st October 2021

CHAIRMAN'S STATEMENT

The pre-tax profit for the Group for the first six month period ending 31st October 2021 was GBP7.7 million (2020: GBP5.8 million) on a revenue of GBP69 million.

At the half year the Group's workload remains steady at GBP156 million and does not yet contain some of the major projects that the Mechanical Engineering Division has confidently been pursuing within the military, nuclear waste re-processing and surveillance markets.

The Refractory Engineering Division has delivered a strong performance and its activity continues to travel on an upward trajectory, delivering like-for-like sales growth of 40%. With the recent acquisitions now generating revenue; our end user markets growing; our research and development investment programmes in the fire protection and construction products now gaining traction in their respective markets, the Division currently represents 40% of the Group's revenue. The Division's focus on price increases, global sourcing, network capabilities and operational footprint has enabled it to date to manage the price pressures and supply chain disruptions.

The Mechanical Engineering Division has experienced low levels of activity due to customer approval delays on documentation for cast and machined products going into complex stakeholder environments. This, coupled with navigating supply availability and increased energy costs (with there being a time lag before such costs can be passed on to the end users), has impacted both sales and profitability in the first six months of the year. We now have in place fixed price energy contracts that go out until June 2023 that will remove the extreme spikes in energy prices that were seen in September 2021. A pragmatic approach has also been taken to highlight and reduce the amount of red tape and address the increased costs of production that will enable efficient production, moving forward, of orders in hand.

The Group's net debt stands at GBP34.8 million (31st October 2020: GBP31.1 million) with a relatively moderate level of gearing of 31.7%. During the six month period just completed, the Group's cash generation has been reduced by the requirement of additional working capital as new projects start to ramp up. Furthermore, the Group has proceeded as planned with its investment programme that is spread across both Divisions, including projects that will reduce its carbon footprint and its reliance on the energy markets, details of which will be released in the next Annual Report.

 
 T. J. W. Goodwin 
 Chairman           15(th) December 
                     2021 
 

Management report

Financial Highlights

 
 
                                                      Unaudited      Unaudited   Audited Year 
                                                      Half Year      Half Year          Ended 
                                                to 31st October             to 
                                                           2021 
                                                   31st October   31st October     30th April 
                                                           2021           2020           2021 
                                                          GBP'm          GBP'm          GBP'm 
 Consolidated Results 
 Revenue                                                   68.9           62.6          131.2 
 Operating profit                                           8.2            6.1           17.1 
 Profit before tax                                          7.7            5.8           16.5 
 Profit after tax                                           6.0            4.5           13.0 
 Capital Additions: 
 Property, plant and equipment [PPE] 
  owned                                                     9.0            7.5           11.9 
 PPE (right-of-use assets)                                  1.1            0.8            2.4 
 Operating lease assets (IAS 17 definition)                   -          (0.1)          (1.1) 
 Intangible assets                                          0.6            0.6            1.7 
--------------------------------------------  -----------------  -------------  ------------- 
 Capital Expenditure for KPI purposes                      10.7            8.8           14.9 
--------------------------------------------  -----------------  -------------  ------------- 
 
 Earnings per share - basic                              72.12p         56.64p        167.82p 
 Earnings per share - diluted                            72.12p         55.42p        164.23p 
 
 

Turnover

Sales revenue of GBP68,884,000 for the half year represents a 10% increase from the GBP62,628,000 achieved during the same period last year.

Profit Before Tax

Profit before tax for the six months of GBP7,723,000 represents a 34% increase from the GBP5,774,000 achieved for the same six month period last year.

Key performance indicators

The key performance indicators for the business are listed below:

 
 
                                           Unaudited      Unaudited   Audited Year 
                                           Half Year      Half Year          Ended 
                                                  to             to 
                                        31st October   31st October     30th April 
                                                2021           2020           2021 
 
 Gross profit as a % of turnover                29.5           25.9           29.7 
 Other income (in GBP millions)                    -              -            0.8 
 Profit before tax (in GBP millions)             7.7            5.8           16.5 
 Gearing %                                      31.7           29.8           15.4 
 Non cash charges (in GBPmillions) 
 Depreciation                                    2.9            2.7            5.7 
 Depreciation of right-of-use assets             0.5            0.4            1.0 
 Amortisation                                    0.7            0.7            1.6 
 
 Total non cash charges                          4.1            3.8            8.3 
 
 

Alternative performance measures mentioned above are defined in note 34 on page 84 of the Group Annual A ccounts to 30th April 2021 .

2021/22 Outlook

Even with the expectation of an increased order input over the next six months, we expect the second half year pre-tax profits of this financial year to be possibly slightly better than the first half and for the benefit of increased activity and profitability to be realised over the next eighteen months.

This improvement is a feature of the strategic transformation of the foundry and its progress in creating an efficient environment to deliver high volume, high quality products for nuclear waste and cast naval components for its new customer base following the decline of its traditional oil and gas business. Furthermore, whilst we continue to experience inflationary pressures, the offsetting benefit of increased selling prices will be recognised within the next financial year.

The momentum within the Refractory Engineering Division shows no signs of slowing and the Group's eight companies supplying consumables to the jewellery casting, fire protection and construction sectors are well placed moving forward to continue to deliver strong results subject to raw material availability and consumer demand.

Risks and Uncertainties

The Group, mainly through its centralised management structure, makes best endeavours to have in place internal control procedures to identify and manage the key risks and uncertainties affecting the Group. We would refer you to pages 12 to 13 of the Group Annual Accounts to 30th April 2021 which describe the principal risks and uncertainties, and to note 26 (starting on page 73) which describes in detail the key financial risks and uncertainties affecting the business such as credit risk and foreign exchange risk.

Judging the future relationship of the major currency pairs of the US Dollar, Sterling and the Euro continues to be a challenge.

The Group (see page 76 of the Group Annual Accounts to 30th April 2021) has mitigated the impact of rising interest rates by fixing the effective base rate at less than 1% for a notional GBP30 million of debt for the next ten years.

Report on Expected Developments

This report describes the expected developments of the Group during the year ended 30th April 2022 . The report may contain forward-looking statements and information based on current expectations, and assumptions and forecasts made by the Group. These expectations and assumptions are subject to various known and unknown risks, uncertainties and other factors, which could lead to substantial differences between the actual future results, financial performance and the estimates and historical results given in this report. Many of these factors are outside the Group's control. The Group accepts no liability to publicly revise or update these forward-looking statements or adjust them to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.

Going concern

The Group once again continues to trade profitably and with the current order book level we are confident that this will continue and improve, especially as we move in to the next financial year. Whereas many companies have struggled with the impacts of Covid-19, the Group has remained open to carry on with its value added activities. As in previous periods, the levels of depreciation and amortisation (both non cash items) remain significant thus masking the true cash generating capability of the Group. As at 31st October 2021, the Group net debt stood at GBP34.8 million (31st Oct 2020 GBP31.1 million) as set out in note 10 to these accounts. Whilst the net debt levels are higher than those recorded as at April 2021 and October 2020 the gearing level at 31.7% is still modest and the Board considers that the banking headroom (facilities versus utilisation) is acceptable. Given the foregoing, the Directors do not see an issue with the continued ability of the Group to meet its financial commitments and so have drawn up these accounts on a going concern basis.

Responsibility statement of the Directors in respect of the half-yearly financial report

The Directors confirm to the best of their knowledge that 1) this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the United Kingdom and that 2) the Interim Management Report and condensed financial statements include a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year) and 4.2.8R (being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last Annual Report that could do so).

 
 T.J. W. Goodwin 
 Chairman          15th December 
                    2021 
 

Condensed Consolidated Statement of Profit or Loss

for the half year to 31st October 2021

 
                                              Unaudited      Unaudited      Audited 
                                              Half Year      Half Year   Year Ended 
                                                     to             to 
                                           31st October   31st October   30th April 
                                                   2021           2020         2021 
                                                GBP'000        GBP'000      GBP'000 
 Continuing operations 
 Revenue                                         68,884         62,628      131,231 
 Cost of sales                                 (48,529)       (46,404)     (92,230) 
 
 Gross profit                                    20,355         16,224       39,001 
 Other income                                         -              -          763 
 Distribution expenses                          (1,817)        (1,320)      (2,988) 
 Administrative expenses                       (10,335)        (8,833)     (19,682) 
 
 Operating profit                                 8,203          6,071       17,094 
 Finance costs (net)                              (513)          (323)        (640) 
 Share of profit of associate companies              33             26           60 
 
 Profit before taxation                           7,723          5,774       16,514 
 Tax on profit                                  (1,719)        (1,289)      (3,508) 
 
 Profit after taxation                            6,004          4,485       13,006 
 
 Attributable to: 
 Equity holders of the parent                     5,546          4,171       12,494 
 Non-controlling interests (NCI)                    458            314          512 
 
 Profit for the period                            6,004          4,485       13,006 
 
 Basic earnings per ordinary share 
  (Note 9)                                       72.12p         56.64p      167.82p 
 
 Diluted earnings per ordinary share 
  (Note 9)                                       72.12p         55.42p      164.23p 
 
 

Condensed Consolidated Statement of Comprehensive Income

for the half year to 31st October 2021

 
 
                                                Unaudited      Unaudited      Audited 
                                                Half Year      Half Year   Year Ended 
                                                       to             to 
                                             31st October   31st October   30th April 
                                                     2021           2020         2021 
                                                  GBP'000        GBP'000      GBP'000 
 
 Profit for the period                              6,004          4,485       13,006 
 
 Other comprehensive (expense) / 
  income 
 
 Items that are or may be reclassified 
  subsequently to the income statement 
 Foreign exchange translation differences           (697)            593      (1,371) 
 Effective portion of changes in 
  fair value of cash flow hedges                      754          (293)        1,296 
 Ineffective portion of changes 
  in fair value of cash flow hedges                     -          (617)        (657) 
 Change in fair value of cash flow 
  hedges transferred to profit or 
  loss                                              (731)            935        1,932 
 Effective portion of changes in 
  fair value of cost of hedging                     (145)             88         (37) 
 Ineffective portion of change in 
  fair value cost of hedging                            -            581          631 
 Change in fair value of cost of 
  hedging transferred to profit or 
  loss                                               (10)            281          381 
 Tax on items that are or may be 
  reclassified subsequently to profit 
  or loss                                            (91)          (186)        (673) 
 
 Other comprehensive (expense) / 
  income for the period, net of income 
  tax                                               (920)          1,382        1,502 
 
 Total comprehensive income for 
  the period                                        5,084          5,867       14,508 
 
 Attributable to: 
 Equity holders of the parent                       4,732          5,465       14,081 
 Non-controlling interests                            352            402          427 
 
                                                    5,084          5,867       14,508 
 
 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2021

 
                                                                                                          Total 
                                                                                                  attribut-able 
                                                                Cash                                  to equity 
                                              Share-based       flow          Cost                      holders 
                       Share   Translat-ion      payments      hedge    of hedging    Retained           of the   Non-controll-ing     Total 
                     capital        reserve       reserve    reserve       reserve    earnings           parent          interests    equity 
                     GBP'000        GBP'000       GBP'000    GBP'000       GBP'000     GBP'000          GBP'000            GBP'000   GBP'000 
  Half year 
  to 31st October 
  2021 
  (Unaudited) 
 Balance at 
  1st May 2021           753          (852)         5,244      1,601           (1)     106,396          113,141              4,887   118,028 
 Total 
 comprehensive 
 income: 
 Profit                    -              -             -          -             -       5,546            5,546                458     6,004 
 Other 
 comprehensive 
 income: 
 Foreign exchange 
  translation 
  differences              -          (591)             -          -             -           -            (591)              (106)     (697) 
 Net movements 
  on cash flow 
  hedges                   -              -             -      (113)         (110)           -            (223)                  -     (223) 
 Total 
  comprehensive 
  income / 
  (expense) 
  for the period           -          (591)             -      (113)         (110)       5,546            4,732                352     5,084 
 Issue of shares          16              -             -          -             -           -               16                  -        16 
 Dividends 
  paid                     -              -             -          -             -     (7,862)          (7,862)              (187)   (8,049) 
 Acquisition 
  of NCI without 
  a change in 
  control                  -              -             -          -             -        (74)             (74)              (356)     (430) 
 
 Balance at 
  31st October 
  2021                   769        (1,443)         5,244      1,488         (111)     104,006          109,953              4,696   114,649 
 
 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2021

 
                                                                                                          Total 
                                                                                                  attribut-able 
                                                                Cash                                  to equity 
                                              Share-based       flow          Cost                      holders 
                       Share   Translat-ion      payments      hedge    of hedging    Retained           of the   Non-controll-ing     Total 
                     capital        reserve       reserve    reserve       reserve    earnings           parent          interests    equity 
                     GBP'000        GBP'000       GBP'000    GBP'000       GBP'000     GBP'000          GBP'000            GBP'000   GBP'000 
  Half year 
  to 31st October 
  2020 
  (Unaudited) 
 Balance at 
  1st May 2020           736            361         5,244      (499)         (743)      99,918          105,017              4,585   109,602 
 Total 
 comprehensive 
 income: 
 Profit                    -              -             -          -             -       4,171            4,171                314     4,485 
 Other 
 comprehensive 
 income: 
 Foreign exchange 
  translation 
  differences              -            502             -          -             -           -              502                 91       593 
 Net movements 
  on cash flow 
  hedges                   -              -             -         68           724           -              792                (3)       789 
 Total 
  comprehensive 
  income for 
  the period               -            502             -         68           724       4,171            5,465                402     5,867 
 Issue of shares          16              -             -          -             -           -               16                  -        16 
 Dividends 
  paid                     -              -             -          -             -     (6,016)          (6,016)              (125)   (6,141) 
 
 Balance at 
  31st October 
  2020                   752            863         5,244      (431)          (19)      98,073          104,482              4,862   109,344 
 
 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2021

 
 
                                                                                                             Total 
                                                                                                     attribut-able 
                                                                  Cash                                   to equity 
                                              Share-based         flow          Cost                       holders 
                       Share   Translat-ion      payments        hedge    of hedging     Retained           of the   Non-controll-ing               Total 
                     capital        reserve       reserve      reserve       reserve     earnings           parent          interests              equity 
                     GBP'000        GBP'000       GBP'000      GBP'000       GBP'000      GBP'000          GBP'000            GBP'000             GBP'000 
 Year ended 
  30th April 
  2021 
 (Audited) 
 Balance at 
  1st May 2020           736            361         5,244        (499)         (743)       99,918          105,017              4,585             109,602 
 Total 
 comprehensive 
 income: 
 Profit                    -              -             -            -             -       12,494           12,494                512              13,006 
 Other 
 comprehensive 
 income: 
 Foreign 
  exchange 
  translation 
  differences              -        (1,255)             -            -             -            -          (1,255)              (116)             (1,371) 
 Net movements 
  on cash flow 
  hedges                   -              -             -        2,100           742            -            2,842                 31               2,873 
 
 Total 
  comprehensive 
  income / 
  (expense) 
  for the 
  period                   -        (1,255)             -        2,100           742       12,494           14,081                427              14,508 
 Issue of 
  shares                  17              -             -            -             -            -               17                  -                  17 
 Dividends 
  paid                     -              -             -            -             -      (6,016)          (6,016)              (125)             (6,141) 
 Recycling 
  of 
  translation 
  reserve on 
  disposal 
  of subsidiary            -             42             -            -             -            -               42                  -                  42 
 
  Balance at 
   30th April 
   202 1                 753          (852)         5,244        1,601           (1)      106,396          113,141              4,887               118,028 
 
 
 
 

Condensed Consolidated Balance Sheet

as at 31st October 2021

 
 
                                                                  Unaudited      Unaudited       Audited 
                                                                      as at          as at         as at 
                                                               31st October   31st October    30th April 
                                                                       2021           2020          2021 
                                                                    GBP'000        GBP'000       GBP'000 
 Non-current assets 
  Property, plant and equipment                                      82,949         74,404        77,063 
  Right-of-use assets                                                 4,276          5,728         3,691 
  Investment in associates                                              815            853           829 
  Intangible assets                                                  24,500         24,770        24,813 
  Derivative financial assets                                           613          1,145           191 
  Other financial assets at amortised cost                                -            137             - 
 
                                                                    113,153        107,037       106,587 
 
 Current assets 
  Inventories                                                        37,315         45,359        34,547 
  Contract assets                                                    13,245         15,685        15,844 
   Trade and other financial assets                                  23,940         23,959        20,540 
   Other receivables                                                  6,298          5,669         5,498 
  Deferred tax asset                                                    144            151           129 
  Derivative financial assets                                         3,001          1,067         4,106 
  Cash and cash equivalents                                          12,257         10,915        15,160 
 
                                                                     96,200        102,805        95,824 
 
 Total assets                                                       209,353        209,842       202,411 
 
 Current liabilities 
  Bank overdrafts and interest-bearing liabilities                    1,853         33,661         1,607 
  Contract liabilities *                                             14,542         25,461        14,332 
   Trade payables and other financial liabilities                    16,606         19,724        21,730 
   Other payables                                                     4,102          4,260         4,025 
  Derivative financial liabilities                                    1,262          1,011         2,016 
  Liabilities for current tax                                         1,689          1,881         1,174 
  Provisions for liabilities and charges                                512             81           608 
 
                                                                     40,566         86,079        45,492 
 
 Non-current liabilities 
  Interest-bearing liabilities                                       47,053          9,709        33,066 
  Derivative financial liabilities                                      336            474             - 
  Provisions for liabilities and charges                                304            414           251 
  Deferred tax liabilities                                            6,445          3,822         5,574 
 
                                                                     54,138         14,419        38,891 
 
 Total liabilities                                                   94,704        100,498        84,383 
 
 Net assets                                                         114,649        109,344       118,028 
 
 
 Equity attributable to equity holders of the parent 
  Share capital                                                         769            752           753 
  Translation reserve                                               (1,443)            863         (852) 
  Share-based payments reserve                                        5,244          5,244         5,244 
  Cash flow hedge reserve                                             1,488          (431)         1,601 
  Cost of hedging reserve                                             (111)           (19)           (1) 
  Retained earnings                                                 104,006         98,073       106,396 
 
 Total equity attributable to equity holders of the parent          109,953        104,482       113,141 
 Non-controlling interests                                            4,696          4,862         4,887 
 
 Total equity                                                       114,649        109,344       118,028 
 
 
   *      Contract liabilities include advance payments from customers of GBP13,766,000 (October 2020: GBP24,991,000), with the balance of GBP776,000 (October 2020: GBP470,000) being costs accrued for contracts. 

Condensed Consolidated Statement of Cash Flows

for the half year ended 31st October 2021

 
 
                                                        Unaudited   Unaudited       Audited 
                                                             Half   Half Year    Year ended 
                                                          Year to     to 31st    30th April 
                                                     31st October     October          2021 
                                                             2021        2020 
                                                          GBP'000     GBP'000       GBP'000 
 Cash flows from operating activities 
 Profit from continuing operations after 
  tax                                                       6,004       4,485        13,006 
  Adjustments for: 
  Depreciation of property, plant and 
   equipment                                                2,932       2,715         5,696 
  Depreciation of right-of-use assets                         456         424           972 
  Amortisation of intangible assets                           747         745         1,566 
  Finance costs (net)                                         513         323           640 
  Foreign exchange losses                                     125          48           292 
  Profit on sale of property, plant and 
   equipment                                                 (95)        (32)         (745) 
  Profit on disposal of subsidiary                              -           -          (32) 
  Share of profit of associate companies                     (33)        (26)          (60) 
  Tax expense                                               1,719       1,289         3,508 
 
 Cash generated from operating activities 
  before changes in working capital and 
  provisions                                               12,368       9,971        24,843 
  (Increase) / decrease in inventories                    (3,073)          85        10,344 
  Decrease / (increase) in contract assets                  2,583     (9,083)       (9,242) 
  (Increase) / decrease in trade and other 
   receivables                                            (4,076)        (53)         2,885 
  Increase / (decrease) in contract liabilities               266       6,509       (4,428) 
  (Decrease) / increase in trade and other 
   payables                                               (5,192)     (3,351)         1,047 
  Decrease / (increase) in unhedged derivative 
   balances                                                   180         181         (438) 
 
 Cash inflow from operations                                3,056       4,259        25,011 
  Interest paid                                             (513)       (388)         (734) 
  Corporation tax paid                                      (576)       (958)       (3,068) 
 
 Net cash from operating activities                         1,967       2,913        21,209 
 
 Cash flows from investing activities 
  Proceeds from sale of property, plant 
   and equipment                                              213         136         1,958 
  Acquisition of property, plant and equipment            (9,220)     (7,261)      (11,738) 
  Additional investment in existing subsidiaries            (430)           -             - 
  Acquisition of intangible assets                          (269)       (600)         (719) 
  Development expenditure capitalised                       (408)       (450)       (1,420) 
 
 Net cash outflow from investing activities              (10,114)     (8,175)      (11,919) 
 
 Cash flows from financing activities 
  Proceeds from issue of share capital                         16          16            17 
  Payment of capital element of lease 
   obligations                                              (385)       (787)       (1,635) 
  Dividends paid                                          (7,862)     (6,016)       (6,016) 
  Dividends paid to non-controlling interests               (187)       (125)         (125) 
   Proceeds from new loans and committed 
    facilities                                             14,200      12,048        35,048 
   Repayment of loans and committed facilities              (355)       (389)      (30,772) 
 
 Net cash inflow / (outflow) from financing 
  activities                                                5,427       4,747       (3,483) 
 
 Net (decrease) / increase in cash and 
  cash equivalents                                        (2,720)       (515)         5,807 
  Cash and cash equivalents at beginning 
   of year                                                 15,160       9,449         9,449 
  Effect of exchange rate fluctuations 
   on cash held                                             (183)         109          (96) 
 
 Closing cash and cash equivalents (Note 
  13)                                                      12,257       9,043        15,160 
 
 

Notes

to the Condensed Consolidated Interim Financial Statements

   1.         Reporting entity 

Goodwin PLC (the "Company") is a company incorporated in England and Wales. The unaudited condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2021 comprise the Company, its subsidiaries, and the Group's interests in associates (together referred to as the "Group").

The audited consolidated financial statements of the Group as at and for the year ended 30th April 2021 are available upon request from the Company's registered office at Ivy House Foundry, Hanley, Stoke-on-Trent, ST1 3NR or via the Company's web site: www.goodwin.co.uk.

   2.         Statement of compliance 

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted in the United Kingdom. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements of the Group as at and for the year ended 30th April 2021.

The comparative figures for the financial year ended 30th April 2021 are extracts and not the full Group's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The Audit Committee has reviewed these unaudited condensed consolidated interim financial statements and has advised the Board of Directors that, taken as a whole, they are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's half year performance. These unaudited condensed consolidated interim financial statements were approved by the Board of Directors on 15th December 2021.

   3.         Significant accounting policies 

The accounting policies applied by the Group in these unaudited condensed consolidated financial statements are the same as those applied by the Group in its audited consolidated financial statements as at and for the year ended 30th April 2021. The changes in accounting policies are to be reflected in the Group's consolidated financial statements as at and for the year ending 30th April 2022.

The following amendments became effective and therefore were adopted by the Group.

-- Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS4 and IFRS 16)

The above amendments have not had a material impact on profit, earnings per share and net assets.

New IFRS standards, amendments and interpretations not adopted

The IASB and IFRIC have issued additional standards and amendments which are effective for periods starting after the date of these financial statements. The following amendments have not yet been adopted by the Group:

-- Amendments to IAS 16 - Property, plant and equipment: proceeds before intended use (effective for annual periods beginning on or after 1st January 2022)

The Group does not expect the above amendments to have a material impact on profit, earnings per share and net assets in future periods.

   4.         Accounting estimates and judgements 

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these unaudited consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements as at and for the year ended 30th April 2021.

The tax charge in the period is based on management's estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period, and the impact of any disallowed costs.

   5.         Operating Segments 

Products and services from which reportable segments derive their revenues

In accordance with the requirements of IFRS 8 "Operating Segments", the Group's reportable segments, based on information reported to the Group's Board of Directors for the purposes of resource allocation and assessment of segment performance, are as follows:

-- Mechanical Engineering - casting, machining, pumps, surveillance and general engineering

-- Refractory Engineering - jewellery investment casting powder and mineral processing

Information regarding the Group's operating segments is reported in the following tables.

Segmental Revenue

 
                          Mechanical Engineering            Refractory Engineering                   Sub Total 
                      Unaudited   Unaudited             Unaudited   Unaudited             Unaudited   Unaudited 
                           Half        Half   Audited        Half        Half   Audited        Half        Half    Audited 
                           Year        Year      Year        Year        Year      Year        Year        Year       Year 
                          Ended       Ended     Ended       Ended       Ended     Ended       Ended       Ended      Ended 
                           31st        31st      30th        31st        31st      30th        31st        31st       30th 
                        October     October     April     October     October     April     October     October      April 
                           2021        2020      2021        2021        2020      2021        2021        2020       2021 
                        GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000     GBP'000     GBP'000    GBP'000 
 
       Revenue 
     External 
      sales              41,544      43,121    86,616      27,340      19,507    44,615      68,884      62,628    131,231 
     Inter-segment 
      sales               8,203       9,418    20,871       7,103       4,651    11,526      15,306      14,069     32,397 
 
     Total revenue       49,747      52,539   107,487      34,443      24,158    56,141      84,190      76,697    163,628 
 
             Reconciliation to consolidated 
                                  revenues: 
            Inter-segment sales                                                            (15,306)    (14,069)   (32,397) 
 
     Consolidated revenue for 
      the period                                                                             68,884      62,628    131,231 
 
 

Segmental profits

 
 
                         Mechanical Engineering                  Refractory Engineering                   Sub Total 
                                                             Unaudited   Unaudited             Unaudited   Unaudited 
                                                                  Half        Half   Audited        Half        Half   Audited 
                   Unaudited       Unaudited                      Year        Year      Year        Year        Year      Year 
                   Half Year       Half Year       Audited       Ended       Ended     Ended       Ended       Ended     Ended 
                       Ended           Ended    Year Ended        31st        31st      30th        31st        31st      30th 
                31st October    31st October    30th April     October     October     April     October     October     April 
                        2021            2020          2021        2021        2020      2021        2021        2020      2021 
                     GBP'000         GBP'000       GBP'000     GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000 
 
   Profits 
 Segment 
  result 
  including 
  associates           3,565           4,587        10,823       6,048       2,309     9,340       9,613       6,896    20,163 
 
                  Group administration costs                                                     (1,377)       (799)   (3,009) 
                   Group finance costs (net)                                                       (513)       (323)     (640) 
 
 Consolidated profit before 
  tax for the period                                                                               7,723       5,774    16,514 
 Tax                                                                                             (1,719)     (1,289)   (3,508) 
 
                   Consolidated profit after 
                          tax for the period                                                       6,004       4,485    13,006 
 
 

Segmental Assets and Liabilities

 
 
                     Segmental total assets          Segmental total liabilities           Segmental net assets 
                 Unaudited   Unaudited             Unaudited   Unaudited             Unaudited   Unaudited 
                      Half        Half   Audited        Half        Half   Audited        Half        Half    Audited 
                      Year        Year      Year        Year        Year      Year        Year        Year       Year 
                     Ended       Ended     Ended       Ended       Ended     Ended       Ended       Ended      Ended 
                      31st        31st      30th        31st        31st      30th        31st        31st       30th 
                   October     October     April     October     October     April     October     October      April 
                      2021        2020      2021        2021        2020      2021        2021        2020       2021 
                   GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000     GBP'000     GBP'000    GBP'000 
 Mechanical 
  Engineering      104,014     105,602    92,929      76,441      78,068    66,909      27,573      27,534     26,020 
 Refractory 
  Engineering       46,094      42,239    44,114      18,376      21,643    20,591      27,718      20,596     23,523 
 
 Sub total 
  reportable 
  segment          150,108     147,841   137,043      94,817      99,711    87,500      55,291      48,130     49,543 
 
             Goodwin PLC (the Company) 
                            net assets                                                  75,450      76,944     83,998 
                Elimination of Goodwin 
                       PLC investments                                                (25,822)    (25,801)   (25,392) 
 Goodwill                                                                                9,730      10,071      9,879 
 
 Consolidated total net 
  assets                                                                               114,649     109,344    118,028 
 
 
 

Segmental Capital Expenditure

 
                       Property, plant and 
                            equipment                    Right-of-use assets                Intangible assets 
                 Unaudited   Unaudited             Unaudited   Unaudited             Unaudited   Unaudited 
                      Half        Half   Audited        Half        Half   Audited        Half        Half   Audited 
                      Year        Year      Year        Year        Year      Year        Year        Year      Year 
                     Ended       Ended     Ended       Ended       Ended     Ended       Ended       Ended     Ended 
                      31st        31st      30th        31st        31st      30th        31st        31st      30th 
                   October     October     April     October     October     April     October     October     April 
                      2021        2020      2021        2021        2020      2021        2021        2020      2021 
                   GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000 
 Goodwin 
  PLC                6,094       4,107     5,315       1,078         690     1,180         188          29       151 
 Mechanical 
  Engineering        2,228       2,459     4,952           -          71     1,146         420         495     1,123 
 Refractory 
  Engineering          715         932     1,570           -           -        74          21          40       456 
 
 Total               9,037       7,498    11,837       1,078         761     2,400         629         564     1,730 
 
 

Segmental Depreciation and Amortisation

 
                                          Depreciation               Amortisation and impairment 
                                 Unaudited   Unaudited             Unaudited   Unaudited 
                                      Half        Half   Audited        Half        Half   Audited 
                                      Year        Year      Year        Year        Year      Year 
                                     Ended       Ended     Ended       Ended       Ended     Ended 
                                      31st        31st      30th        31st        31st      30th 
                                   October     October     April     October     October     April 
                                      2021        2020      2021        2021        2020      2021 
                                   GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000 
 Goodwin PLC                         1,733       1,506     2,970         506         510     1,106 
 Mechanical Engineering                988       1,020     2,346          21           3        20 
 Refractory Engineering                667         613     1,352         220         232       440 
 
 Total                               3,388       3,139     6,668         747         745     1,566 
 
 
   6.     Geographical segments 
 
                        Half Year Ended 31st October                           Half Year Ended 31st October 
                                    2021                                                   2020 
            Unaudited     Unaudited     Unaudited      Unaudited   Unaudited     Unaudited     Unaudited      Unaudited 
              Revenue   Operational   Non-current    PPE capital     Revenue   Operational   Non-current    PPE capital 
                         net assets        assets    expenditure                net assets        assets    expenditure 
              GBP'000       GBP'000       GBP'000        GBP'000     GBP'000       GBP'000       GBP'000        GBP'000 
 UK            17,815        76,575        92,602          8,854      17,928        72,558        85,076          6,638 
 Rest of 
  Europe        9,212         8,069         3,878            926       9,598         9,208         3,515            183 
 USA            6,159             -             -              -       5,557             -             -              - 
 Pacific 
  Basin        16,025        15,044         7,375             97      13,267        14,734         8,875            615 
 Rest of 
  World        19,673        14,961         9,298            238      16,278        12,844         9,571            823 
 
 Total         68,884       114,649       113,153         10,115      62,628       109,344       107,037          8,259 
 
 
                                                                                Year Ended 30th April 2021 
                                                                     Audited       Audited       Audited        Audited 
                                                                     Revenue   Operational   Non-current    PPE capital 
                                                                                net assets        assets    expenditure 
                                                                     GBP'000       GBP'000       GBP'000        GBP'000 
 UK                                                                   39,755        81,982        89,944         11,911 
 Rest of 
  Europe                                                              21,473         8,309         3,264            276 
 USA                                                                   8,027             -             -              - 
 Pacific 
  Basin                                                               28,255        13,708         6,499            734 
 Rest of 
  World                                                               33,721        14,029         6,880          1,316 
 
 Total                                                               131,231       118,028       106,587         14,237 
 
 
   7.     Revenue 

The Group's revenue is derived from contracts with customers. The following tables provide an analysis of revenue by geographical market and by product line.

 
 
                                              Mechanical     Refractory 
                                             Engineering    Engineering     Total 
                                                 GBP'000        GBP'000   GBP'000 
 Primary Geographical markets 
 
 Unaudited half year ended 31st October 
  2021 
 UK                                               11,256          6,559    17,815 
 Rest of Europe                                    5,327          3,885     9,212 
 USA                                               5,796            363     6,159 
 Pacific Basin                                     5,461         10,564    16,025 
 Rest of World                                    13,704          5,969    19,673 
 
 Total                                            41,544         27,340    68,884 
 
 
 Unaudited half year ended 31st October 
  2020 
 UK                                               12,548          5,380    17,928 
 Rest of Europe                                    6,677          2,921     9,598 
 USA                                               5,444            113     5,557 
 Pacific Basin                                     4,698          8,569    13,267 
 Rest of World                                    13,754          2,524    16,278 
 
 Total                                            43,121         19,507    62,628 
 
 Audited year ended 30th April 202 
  1 
 UK                                               28,258         11,497    39,755 
 Rest of Europe                                   15,123          6,350    21,473 
 USA                                               7,596            431     8,027 
 Pacific Basin                                    10,899         17,356    28,255 
 Rest of World                                    24,740          8,981    33,721 
 
 Total                                            86,616         44,615   131,231 
 
 
 Product lines 
 
 Unaudited half year ended 31st October 
  2021 
 Standard products and consumables                 5,105         27,340    32,445 
 Bespoke engineered products - point 
  in time                                          6,022              -     6,022 
 
 Point in time revenue                            11,127         27,340    38,467 
 
 Minimum period contracts for goods 
  and services                                     1,879              -     1,879 
 Bespoke engineered products - over 
  time                                            28,538              -    28,538 
 
 Over time revenue                                30,417              -    30,417 
 
 Total revenue                                    41,544         27,340    68,884 
 
 
 
 
 
                                              Mechanical     Refractory     Total 
                                             Engineering    Engineering 
                                                 GBP'000        GBP'000   GBP'000 
 Product lines 
 
 Unaudited half year ended 31st October 
  202 0 
 Standard products and consumables                 4,487         19,507    23,994 
 Bespoke engineered products - point 
  in time                                          9,702              -     9,702 
 
 Point in time revenue                            14,189         19,507    33,696 
 
 Minimum period contracts for goods 
  and services                                     1,626              -     1,626 
 Bespoke engineered products - over 
  time                                            27,306              -    27,306 
 
 Over time revenue                                28,932              -    28,932 
 
 Total revenue                                    43,121         19,507    62,628 
 
 
 
 Audited year ended 30th April 202 
  1 
 Standard products and consumables                10,630         44,615    55,245 
 Bespoke engineered products - point 
  in time                                         11,203              -    11,203 
 
 Point in time revenue                            21,833         44,615    66,448 
 
 Minimum period contracts for goods 
  and services                                     3,306              -     3,306 
 Bespoke engineered products - over 
  time                                            61,477              -    61,477 
 
 Over time revenue                                64,783              -    64,783 
 
 Total revenue                                    86,616         44,615   131,231 
 
 
 
   8.     Dividends 

The Directors do not propose the payment of an interim dividend.

 
                                               Unaudited      Unaudited      Audited 
                                               Half Year      Half Year   Year Ended 
                                                      to             to 
                                            31st October   31st October   30th April 
                                                    2021           2020         2021 
                                                 GBP'000        GBP'000      GBP'000 
 Equity Dividends Paid: 
 Ordinary dividends paid during the                7,862              -            - 
  period in respect of the year ended 
  30th April 2021 (102.24p per share) 
 Ordinary dividends paid during the 
  period in respect of the year ended 
  30th April 2020 (81.71p per share)                   -          6,016        6,016 
 
 Total dividends paid during the period            7,862          6,016        6,016 
 
 
 
   9.     Earnings Per Share 
 
 
                                                      Number of ordinary shares 
                                                  Unaudited      Unaudited      Audited 
                                                      as at          as at        as at 
                                               31st October   31st October   30th April 
                                                       2021           2020         2021 
 Ordinary shares in issue 
 Opening balance                                  7,526,400      7,363,200    7,363,200 
 Shares issued in the period                        163,200        163,200      163,200 
 
 Closing balance                                  7,689,600      7,526,400    7,526,400 
 
 
 Outstanding ordinary share options                       -        163,200      163,200 
 
 
 Total ordinary shares (issued and 
  options)                                        7,689,600      7,689,600    7,689,600 
 
 
 Weighted average number of ordinary 
  shares in issue                                 7,689,600      7,364,087    7,445,024 
 Weighted average number of outstanding 
  ordinary share options                                  -        162,632      162,651 
 
 Denominator used for diluted earnings 
  per share calculation                           7,689,600      7,526,719    7,607,675 
 
 
                                                    GBP'000        GBP'000      GBP'000 
 
 Relevant profits attributable to ordinary 
  shareholders                                        5,546          4,171       12,494 
 
 
 
   10.       Capital Management, Issuance and Repayment of Debt 

At 31st October 2021 the capital utilised was GBP144,774,000, as shown below:

 
 
                                                 Unaudited      Unaudited      Audited 
                                                     as at          as at        as at 
                                              31st October   31st October   30th April 
                                                      2021           2020         2021 
                                                   GBP'000        GBP'000      GBP'000 
 
 Cash and cash equivalents                        (12,257)       (10,915)     (15,160) 
 Total lease liabilities (Note 14)                   3,997          2,785        3,374 
 Bank loans and committed facilities 
  (Note 14)                                         44,909         38,713       31,299 
 Bank overdrafts (Note 14)                               -          1,872            - 
 
 Net debt in accordance with IFRS 16                36,649         32,455       19,513 
 Operating lease debt (IAS 17 definition)          (1,828)        (1,334)      (2,082) 
 
 Relevant net debt for KPI purposes                 34,821         31,121       17,431 
 Total equity attributable to equity 
  holders of the parent                            109,953        104,482      113,141 
 
 Capital                                           144,774        135,603      130,572 
 
 
 

11. Property, plant and equipment

 
 
                                           Unaudited      Unaudited      Unaudited           Unaudited 
                                               as at          as at          as at               as at 
                                        31st October   31st October   31st October        31st October 
                                                2021           2021           2020                2020 
                                             GBP'000        GBP'000        GBP'000             GBP'000 
 
                                           Property,   Right-of-use      Property,        Right-of-use 
                                           plant and         assets      plant and              assets 
                                           equipment                     equipment 
 Net book value at the beginning 
  of the period                               77,063          3,691         69,626               5,343 
 Additions                                     9,037          1,078          7,498                 761 
 Disposals (at net book value)                 (117)              -          (104)                   - 
 Depreciation                                (2,932)          (456)        (2,715)               (424) 
 Exchange adjustment                           (102)           (37)             99                  48 
 
 Net book value at the end 
  of the period                               82,949          4,276         74,404               5,728 
 
 
 
 
 

12. Intangible assets

 
                                                      Unaudited      Unaudited 
                                                          as at          as at 
                                                   31st October   31st October 
                                                           2021           2020 
                                                        GBP'000        GBP'000 
 
 Net book value at the beginning of the period           24,813         24,695 
 Additions                                                  629            564 
 Amortisation                                             (747)          (745) 
 Exchange adjustment                                      (195)            256 
 
 Net book value at the end of the period                 24,500         24,770 
 
 
 

13. Cash and cash equivalents

 
 
                                              Unaudited      Unaudited      Audited 
                                                  as at          as at        as at 
                                           31st October   31st October   30th April 
                                                   2021           2020         2021 
                                                GBP'000        GBP'000      GBP'000 
 
 Cash and cash equivalents per balance 
  sheet                                          12,257         10,915       15,160 
 Bank overdrafts                                      -        (1,872)            - 
 
 Cash and cash equivalents per cash 
  flow statement                                 12,257          9,043       15,160 
 
 

14. Interest-bearing liabilities

 
 
                                               Unaudited      Unaudited      Audited 
                                                   as at          as at        as at 
                                            31st October   31st October   30th April 
                                                    2021           2020         2021 
                                                 GBP'000        GBP'000      GBP'000 
 
 Bank overdrafts                                       -          1,872            - 
 Bank loans - repayable by instalments               833            749          761 
 Bank loans - rolling credit facilities                -         30,000            - 
 Lease liabilities                                 1,020          1,040          846 
 
 Due within one year                               1,853         33,661        1,607 
 
 
 
 Bank loans - repayable by instalments       4,076    4,964    4,538 
 Bank loans - rolling credit facilities     40,000    3,000   26,000 
 Lease liabilities                           2,977    1,745    2,528 
 
 Due after more than one year               47,053    9,709   33,066 
 
 
 
 
 Bank overdrafts                                 -    1,872        - 
 Bank loans - repayable by instalments       4,909    5,713    5,299 
 Bank loans - rolling credit facilities     40,000   33,000   26,000 
 Lease liabilities                           3,997    2,785    3,374 
 
 Total                                      48,906   43,370   34,673 
 
 

15. Total Financial Assets and Financial Liabilities

The following table sets out the Group's accounting classification of its financial assets and financial liabilities, and their carrying amounts at 31st October 2021. The carrying amount is a reasonable approximation of fair value for all financial assets and financial liabilities.

 
 
                                                          Fair value               Total carrying 
                                        Fair value    through profit                     amount / 
                                         - hedging          and loss   Amortised       fair value 
                                       instruments           (FVTPL)        cost           amount 
                                           GBP'000           GBP'000     GBP'000          GBP'000 
 Financial assets measured 
  at fair value 
 Forward exchange contracts 
  used for hedging                           1,153                 -           -            1,153 
 Other forward exchange contracts                -             2,081           -            2,081 
 Interest rate SWAP                            380                 -           -              380 
 
                                             1,533             2,081           -            3,614 
 
 Financial assets not measured 
  at fair value 
 Cash and cash equivalents                       -                 -      12,257           12,257 
 Contract assets                                 -                 -      13,245           13,245 
 Trade receivables and other 
  financial assets                                                        23,940           23,940 
 Corporation tax receivable                                                1,083            1,083 
 
                                                 -                 -      50,525           50,525 
 
 Financial liabilities measured 
  at fair value 
 Forward exchange contracts 
  used for hedging                             457                 -           -              457 
 Other forward exchange contracts                -             1,141           -            1,141 
 
                                               457             1,141           -            1,598 
 
 
 Financial liabilities not 
  measured at fair value 
 Bank loans                                      -                 -      44,909           44,909 
 Lease liabilities                               -                 -       3,997            3,997 
 Contract liabilities                            -                 -      14,542           14,542 
 Trade payables and other 
  financial liabilities                                                   16,606           16,606 
 Corporation tax payable                         -                 -       1,689            1,689 
 
                                                 -                 -      81,743           81,743 
 
 
 

The forward exchange and interest rate SWAP contract assets and liabilities fair values in the above table are derived using Level 2 inputs as defined by IFRS 7 as detailed in the paragraph below.

IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the source of inputs used to derive the fair value. This classification uses the following three-level hierarchy: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

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December 15, 2021 02:00 ET (07:00 GMT)

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