TIDMGDWN
RNS Number : 3793X
Goodwin PLC
20 December 2023
GOODWIN PLC
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the half year ended 31st October 2023
CHAIRMAN'S STATEMENT
I am pleased to report our half-year results for the first six
months ending 31st October 2023. The Group has realised a pre-tax
trading profit of GBP11.2 million, marking a notable 23.1% uplift
from the previous year's GBP9.1 million. This successful outcome is
attributed to an increased revenue of GBP97.6 million. Both of the
Group's Divisions have played a significant role in this
achievement during the first six months, and we anticipate a
continuation of this increased performance for the rest of the
financial year, with a current forward order book of GBP266
million.
The Refractory Engineering Division has continued to advance its
profitability. Notably, the sales of our internally developed,
patent-protected fire extinguishing agent for lithium-ion battery
fires, known as AVD, have reached a milestone at the mid-year
point, equalling the total sales for the previous financial
year.
AVD achieved Underwriters Laboratory (UL) certification for
component recognition as an extinguishing agent, and a six-litre
fire extinguisher containing AVD received UL8 certification. This
has opened up substantial opportunities, particularly in the United
States, which we anticipate will emerge as a rapidly expanding
market for our product, with sales to the USA already starting to
grow at a good pace. There is ever-growing interest and adoption
that extends way beyond the automotive sector, encompassing a
diverse range of applications worldwide. To support this demand,
proactive measures have been taken to expand AVD manufacturing
capacity. The Group has acquired a 2.5-acre site with a 5,000
square metre industrial building, conveniently located close to
Dupré Minerals L imi t e d's primary manufacturing facility in
Staffordshire. The site is ready for immediate use with the planned
commissioning date of the new, higher-capacity AVD manufacturing
line set for April 2024.
The new Calciner at Hoben International Limited has proved to be
approximately 15% more efficient than the original Calciner due to
the strategic design modifications that were incorporated into the
initial design. This efficiency improvement has translated into
enhanced productivity and energy cost savings. Hoben's sales of
Soluform concrete bags continue to grow and there is wider adoption
amongst some project engineers who are increasingly favouring it as
their product of choice.
The Refractory Engineering Division's sales of investment
casting powder to the global jewellery casting industry has
benefited from the jewellery and brass casting market in China
returning to a level of normality and due to the Chinese consumers
increasing confidence post COVID.
The Mechanical Engineering D i vision is witnessing the
continual progression of activities that was anticipated due to the
substantial forward order book. More to do with timing rather than
anything else, the Group's cash position has det erior ated in the
first six months of the financial year which is due to the
increasing levels of working capital that have been accumulating
through the increased activity of the Division. However, whilst we
have sufficient facility headroom available we expect this position
to improve by the financial year end.
There are also a significant number of additional future pro j
ects for the Mechanical Engineering Division, for which , at the
time of writing, orders have yet to be placed. We anticipate
addressing these as they emerge. Reflecting on our active pursuit
of major opportunities in the Mechanical Engineering Division over
the past three years, it is reassuring to note that none have been
lost. However, the slow pace of third party decision making has
been a source of frustration. Nevertheless, we are well prepared to
capitali s e on these opportunities as they arise, whether at
Goodwin Steel Castings Limited , Goodwin International Limited or
Easat Radar Systems Limited . In all instances, be it technical
performance, proven track record or the fact our proposals offer
the best value proposition for our customers, globally, we are
confident that the existing businesses will continue delivering
improved results once we add on some of these new contracts to the
existing business activity.
Keeping one eye on the future, our patent pending polyimide
resin production company, Duvelco Limited , remains on track to
have its production plant commissioned and operational by June
2024. All the major capital expenditure has been completed with the
majority of any spend left being labour to finish off the wiring,
pipework and commissioning. All initial chemicals to make up to 30
tonnes of polymer resin are on site, so there should not be any
large increases in working capital affecting the Group's future
cash position , as it should become self - funding once
operational.
After due consideration, from listening to shareholder enquiries
at the AGM, we recognise the importance of providing more frequent
updates. Considering our Group's diverse and complex operations, we
have decided to introduce quarterly trading updates to keep our
investors more informed.
The Group's overall net debt stands at GBP54.6 million (31st
October 2022: GBP46.1 million) which equates to a gearing ratio of
47.8% which is in line with the Group's forecasts and due to an end
in large amounts of capital expenditure and stabilisation of
working capital levels, will fall back towards 30% within the next
18 months.
The Board and I want to thank the employees for their continued
efforts in pushing the Group performance forward, and wish everyone
a very Happy Christmas and a prosperous New Year.
T.J.W. Goodwin
Chairman 19 December 2023
MANAGEMENT REPORT
Financial Highlights
Unaudited Unaudited Audited
Half Year Half Year Year ended
to to
31st October 31st October 30th April
2023 2022 2023
GBPm GBPm GBPm
Consolidated Results
Revenue 97.6 89.3 185.7
Operating profit 12.5 9.8 20.3
Trading profit * 11.2 9.1 18.9
Unrealised gain on 10 year interest rate swap derivative 0.9 3.1 3.2
Profit before tax 12.1 12.2 22.1
Profit after tax 9.2 9.1 16.5
Capital additions
Property, plant and equipment (PPE) owned 7.0 7.8 21.2
Property, plant and equipment (PPE) right-of-use assets 0.1 1.1 1.5
Operating lease assets (former IAS 17 definition) -- (0.2) (0.4)
Intangible assets 0.4 0.3 1.8
---------------------------------------------------------- ------------- ------------- -----------
Capital expenditure for KPI purposes 7.5 9.0 24.1
---------------------------------------------------------- ------------- ------------- -----------
115.66
Earnings per share - basic p 113.93 p 206.81 p
115.66
Earnings per share - diluted p 113.93 p 206.81 p
* Trading profit is defined as profit before taxation less the
movement in fair value of interest rate swap.
Revenue
Revenue of GBP97.6 million for the six months represents a 9.3%
increase from the GBP89.3 million achieved for the same six month
period last year .
Trading profit
Trading profit for the six months of GBP11.2 million represents
a 23.1% increase from the GBP9.1 million achieved for the same six
month period last year.
Key performance indicators
Unaudited Unaudited Audited
Half Year Half Year Year ended
to 31st to 31st 30th April
October October
2023 2022 2023
Trading profit (GBP'm) 11.2 9.1 18.9
Post tax profit + depreciation + amortisation (GBP'm) * 12.7 10.5 22.7
Gross profit % of revenue 26.7 % 26.5 % 24.9 %
Trading profit % of revenue 11.5 % 10.2 % 10.2 %
Gearing % 47.8 % 40.9 % 26.3 %
Non cash charges (GBP'm)
Depreciation 3.9 3.6 7.5
Amortisation and impairment 0.7 0.6 1.3
---------- ---------- ------------
Total non cash charges 4.6 4.2 8.8
---------- ---------- ------------
Alternative performance measures mentioned above are defined on
page 104 of the Group Annual Accounts to 30th April 2023.
* The figure for 31st October 2022 has been restated to show the
interest rate swap adjustment net of tax, to be consistent with the
other periods.
2023/24 Outlook
The Group's increased levels of activity that have occurred in
the first half of the year are expected to continue throughout the
second half of the year, generating a similar level of
profitability as was achieved in the first six months.
Within the Mechanical Engineering Division, whilst it is
unlikely to immediately create activity within the factory before
the year end, we remain confident that over the next six months
Easat Radar Systems will be announced as the successful bidder of a
number of contracts that will create a level of workload for the
company that will allow it to generate respectable profits for the
next two to three years whilst continuing to compete for more
projects that are being tendered. The reason the Board remains
confident is due to the fact that the vast majority of the
opportunities that we referenced in a previous statement ("an
additional GBP47 million of firm buy radar systems were quoted")
have either been delayed or re-tendered due to the specification of
the requirement changing, typically to our advantage due to the
company now being able to offer the full suite of surveillance
systems.
If a few of the notable contracts that are expected to arrive
over the coming months do not get delayed again for the Mechanical
Engineering Division, the forward workload will be further
increased by the year end.
In the second half of the year , we will also see the completion
of the 7,690 square metre new building in India that will
substantially increase the manufacturing capacity of both the
investment powders and the submersible slurry pump businesses.
These increases will not only enable the Group to benefit from the
growing domestic market over the next decade but will also support
the growth of the other submersible pump companies in the Group,
which for the last three years have grown at an average compound
rate of 18% per year, and is expected to continue. Currently the
pump companies represent approximately 12% of Group turnover.
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 risk s and uncertainties affecting
the Group. We would refer you to pages 13 to 14 of the Group Annual
Accounts to 30th April 2023 which describe the principal risks and
uncertainties, and to note 28 , starting on page 81 , which
describes in detail the key financial risks and uncertainties
affect ing 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 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 until August 2031.
Report on Expected Developments
This report describes the expected development of the Group
during the year ended 30th April 2024 . 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 continues to trade profitably by building on the
increase in activity seen in the second half of the previous
financial year and, with the current order book levels where they
are, this should continue and improve in the second half of this
financial year and into the next financial year. The Group has
continued with its value added activities and traded throughout
this period and previous periods with minimal disruptions to
manufacturing activities from the challenges that have been seen
over the last few years that have affected many other businesses.
As at 31st October 2023, the Group's net debt stood at GBP54.6 m
illion (31st October 2022 GBP46.1 m illion ) as set out in note 16
of these accounts. Whilst the net debt levels are higher than those
recorded at April 2023 and October 2022 , they are in line with the
Group's forecasts and are expected to reduce over time, as working
capital unwinds, along with lower forecasted capital expenditure .
Given the abovementioned, the Directors, after having reviewed the
Group projections and possible challenges that may lie ahead, do
not see an issue with the continued ability of the Group to meet
its financial commitments as they fall due for at least twelve
months from the date of these accounts and have drawn up these
accounts to reflect that 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
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 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 19 December 2023
Condensed Consolidated Statement of Profit or Loss
for the half year to 31st October 2023
Unaudited Unaudited Audited
Half Year Half Year Year ended
to to
31st October 31st October 30th April
2023 2022 2023
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 97,584 89,335 185,742
Cost of sales (71,493) (65,645) (139,521)
------------- ------------- -----------
Gross profit 26,091 23,690 46,221
Distribution expenses (1,700) (2,056) (3,741)
Administrative expenses (11,872) (11,801) (22,167)
------------- ------------- -----------
Operating profi t 12,519 9,833 20,313
Finance costs (net) (1,351) (761) (1,438)
Share of profit of associate company 34 33 65
------------- ------------- -----------
Profit before taxation and movement in fair value of interest rate swap 11,202 9,105 18,940
Unrealised gain on 10 year interest rate swap derivative 938 3,132 3,189
------------- ------------- -----------
Profit before taxation 12,140 12,237 22,129
Tax on profit (2,971) (3,157) (5,616)
------------- ------------- -----------
Profit after taxation 9,169 9,080 16,513
------------- ------------- -----------
Attributable to:
Equity holders of the parent 8,729 8,761 15,904
Non -controlling interests (NCI) 440 319 609
------------- ------------- -----------
Profit for the period 9,169 9,080 16,513
------------- ------------- -----------
115.66
Basic earnings per ordinary share (note 13 ) p 113.93 p 206.81 p
------------- ------------- -----------
115.66
Diluted earnings per ordinary share (note 13 ) p 113.93 p 206.81 p
------------- ------------- -----------
Condensed Consolidated Statement of Comprehensive Income
for the half year to 31st October 2023
Unaudited Unaudited Audited
Half Year Half Year Year ended
to to
31st October 31st October 30th April
2023 2022 2023
GBP'000 GBP'000 GBP'000
Profit for the period 9,169 9,080 16,513
Other comprehensive expense
Items that are or may be reclassified subsequently to the income
statements
Foreign exchange translation differences (218) (167) (1,412)
Effective portion of changes in fair value of cash flow hedges (3,243) (4,958) 3,741
Ineffective portion of changes in fair value of cash flow hedges (177) (92) 518
Change in fair value of cash flow hedges transferred to profit or loss (242) 949 1,308
Effective portion of changes in fair value of cost of hedging 1,466 96 (1,447)
Ineffective portion of changes in fair value of cost of hedging 9 -- (76)
Change in fair value of cost of hedging transferred to profit or loss 37 (15) 33
Tax on items that are or may be reclassified subsequently to profit or
loss 495 950 (919)
------------- --------------- -----------
Other comprehensive expense for the period, net of income tax (1,873) (3,237) 1,746
------------- --------------- -----------
Total comprehensive income for the period 7,296 5,843 18,259
------------- --------------- -----------
Attributable to:
Equity holder of the parent 6,950 5,633 17,726
Non-controlling interests 346 210 533
------------- --------------- -----------
7,296 5,843 18,259
------------- --------------- -----------
Condensed Consolidated Statement of Changes in Equity
for the half year to 31st October 2023
Share Translation Share-based Cash Cost of Retained Total Non-controlling Total
capital reserve payments flow hedging earnings attributable interests equity
reserve hedge reserve to equity
reserve holders
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Half Y ear to 31st
October 2022
(Unaudited)
Balance at 1st May
2022 769 463 5,244 (2,746) 140 111,440 115,310 4,433 119,743
Total comprehensive
income:
Profit -- -- -- -- -- 8,761 8,761 319 9,080
Other comprehensive
income:
Foreign exchange
translation
differences -- (81) -- -- -- -- (81) (86) (167)
Net movements on
cash
flow hedges -- -- -- (3,114) 67 -- (3,047) (23) (3,070)
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Total comprehensive
income / expense
for
the period -- (81) -- (3,114) 67 8,761 5,633 210 5,843
Dividends paid -- -- -- -- -- (4,145) (4,145) (380) (4,525)
Dividends declared * -- -- -- -- -- (4,144) (4,144) -- (4,144)
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Balance at 31st
October
2022 769 382 5,244 (5,860) 207 111,912 112,654 4,263 116,917
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
* The statement of changes in equity has been restated to
reflect the dividends declared .
Condensed Consolidated Statement of C hanges in Equity
for the half year to 31st October 2023
Share Translation Share-based Cash Cost of Retained Total Non-controlling Total
capital reserve payments flow hedging earnings attributable interests equity
reserve hedge reserve to equity
reserve holders
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 3 0th April
2023
(Audited)
Balance at 1st May 2022 769 463 5,244 (2,746) 140 111,440 115,310 4,433 119,743
Total comprehensive
income:
Profit -- -- -- -- -- 15,904 15,904 609 16,513
Other comprehensive
income:
Foreign exchange
translation
differences -- (1,312) -- -- -- -- (1,312) (100) (1,412)
Net movements on cash
flow hedges -- -- -- 4,250 (1,116) -- 3,134 24 3,158
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Total comprehensive
income / expense for
the period -- (1,312) -- 4,250 (1,116) 15,904 17,726 533 18,259
Dividends paid -- -- -- -- -- (8,289) (8,289) (556) (8,845)
Balance at 3 0th April
2023 769 (849) 5,244 1,504 (976) 119,055 124,747 4,410 129,157
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Condensed Consolidated Balance Sheet
Unaudited Unaudited Audited
as at 31st as at 31st as at 30th
October October April 2023
2023 2022
GBP'000 GBP'000 GBP'000
Restated
*
Non-current assets
Property, plant and equipment 99,623 92,104 101,243
Right-of-use assets 11,344 6,956 6,763
Investment in associates 978 912 964
Intangible assets 25,126 24,380 25,448
Derivative financial assets 5,644 5,446 5,932
142,715 129,798 140,350
-------------------------------------- ----------- ----------- -----------
Current assets
Inventories 48,835 43,323 47,955
Contract assets 19,808 17,811 16,257
Trade and other financial assets 36,737 30,341 29,757
Corporation tax receivable 418 1,339 1,337
Other receivables 5,796 5,984 4,775
Deferred tax asset 119 59 57
Derivative financial assets 1,577 2,105 2,684
Cash and cash equivalents 13,404 8,604 19,661
----------- ----------- -----------
126,694 109,566 122,483
-------------------------------------- ----------- ----------- -----------
Total assets 269,409 239,364 262,833
----------- ----------- -----------
Current liabilities
Bank overdrafts and interest-bearing
liabilities 13,942 3,318 6,729
Contract liabilities * * 31,412 19,462 32,747
Trade payables and other financial
liabilities 23,065 18,722 25,164
Other payables 6,873 6,266 6,601
Dividends payable 4,318 4,144 --
Derivative financial liabilities 2,121 4,984 2,383
Liabilities for current tax 2,009 1,194 921
Provisions for liabilities and
charges 229 206 266
----------- ----------- -----------
83,969 58,296 74,811
-------------------------------------- ----------- ----------- -----------
Non-current liabilities
Interest-bearing liabilities 55,357 53,042 47,256
Derivative financial liabilities 108 2,326 --
Provisions for liabilities and
charges 304 333 246
Deferred tax liabilities 10,983 8,450 11,363
----------- ----------- -----------
66,752 64,151 58,865
-------------------------------------- ----------- ----------- -----------
Total liabilities 150,721 122,447 133,676
----------- ----------- -----------
Net assets 118,688 116,917 129,157
----------- ----------- -----------
Equity attributable to equity
holders of the parent
Share capital 751 769 769
Translation reserve (957) 382 (849)
Share-based payments reserve 5,244 5,244 5,244
Cash flow hedge reserve (1,298) (5,860) 1,504
Cost of hedging reserve 155 207 (976)
Retained earnings 110,297 111,912 119,055
----------- ----------- -----------
Total equity attributable to equity
holders of the parent 114,192 112,654 124,747
Non-controlling interests 4,496 4,263 4,410
----------- ----------- -----------
Total equity 118,688 116,917 129,157
----------- ----------- -----------
* The balance sheet has been restated to reflect the dividends
payable at 31st October 2022.
** Contract liabilities include advance payments from customers
of GBP30,462,000 (31(st) October 2022: GBP18,627,000), with the
balance of GBP950,000 (31(st) October 2022: GBP835,000) being costs
accrued for contracts.
Condensed Consolidated Statement of Cash Flows
for the half year ended 31st October 2023
Unaudited Unaudited Audited
Half Year to Half Year to Year ended
31st October 31st October 30th April
2023 2022 2023
GBP'000 GBP'000 GBP'000
Cash flow from operating activities
Profit from continuing operations after tax 9,169 9,080 16,513
Adjustments for:
Depreciation of property, plant and equipment 3,153 2,965 6,272
Depreciation of right-of-use assets 717 642 1,198
Amortisation and impairment of intangible assets 654 610 1,257
Financ e costs (net) 1,351 761 1,438
Foreign exchange losses / (gains) 267 (1,965) 1,213
Loss / (p rofit ) on sale of property, plant and equipment (27) 7 134
Unrealised gain on 10 year interest rate swap derivative (938) (3,132) (3,189)
Share of profit of associate companies (34) (33) (65)
UK tax incentive credit on research and development -- -- (610)
Tax expense 2,971 3,157 5,616
------------- ------------- -----------
Cash generated from operating activities before changes in working capital
and provisions 17,283 12,092 29,777
Increase in inventories (980) (3,112) (8,377)
In crease in contract assets (3,572) (5,461) (3,804)
Increase in trade and other receivables (8,213) (5,426) (5,304)
(Decrease) / increase in contract liabilities (1,325) 4,720 17,954
(Decrease) / increase in trade and other payables (1,364) (2,488) 4,072
Cash inflow from operations 1,829 325 34,318
Interest paid (1,629) (763) (1,940)
Corporation tax paid (885) (2,196) (3,251)
------------- ------------- -----------
Net cash from operating activities (685) (2,634) 29,127
------------- ------------- -----------
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 196 39 218
Acquisition of property, plant and equipment (2,385) (6,796) (18,871)
Acquisition of intangible assets (91) (143) (675)
Development expenditure capitalised (307) (166) (1,196)
------------- ------------- -----------
Net cash outflow from investing activities (2,587) (7,066) (20,524)
------------- ------------- -----------
Cash flows from financing activities
Buy back of shares (8,869) -- --
Payment of capital element of lease obligations (1,325) (882) (1,874)
Dividends paid (4,318) (4,145) (8,289)
Dividends paid to non-controlling interests (260) (380) (556)
Proceeds from new loans and committed facilities 12,500 13,000 11,500
Repayment of loans and committed facilities (613) (868) (1,181)
Change in bank overdrafts (119) -- 119
------------- ------------- -----------
Net cash (outflow) / inflow from financing activities (3,004) 6,725 (281)
------------- ------------- -----------
Net (d ecrease ) / increase in cash and cash equivalents (6,276) (2,975) 8,322
Cash and cash equivalents at beginning of year 19,661 11,651 11,651
Effect of exchange rate fluctuations on cash held 19 (72) (312)
------------- ------------- -----------
Closing cash and cash equivalents 13,404 8,604 19,661
------------- ------------- -----------
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 2023 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 2023 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 2023 .
The comparative figures for the financial year ended 30th April
2023 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 19 December 2023 .
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 2023 , except
where accounting standards have been amended and the Group has
adopted these amendments during the current period.
The following amendments , which have bec o me effective for the
current reporting period, and therefore have been adopted by the
Group , are not expected to have a significant impact on the
Group's financial statements .
-- Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies -
(effective for periods commencing on or after 1 st January
2023).
-- Amendments to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors 'Definition of Accounting
Estimates' - (effective for periods commencing on or after 1 st
January 2023).
-- Amendments to IAS 12 Income Taxes: Deferred Tax related to
Assets and Liabilities arising from a Single Transaction -
(effective for periods commencing on or after 1 st January
2023).
-- Amendments to IAS 12 Income Taxes: International Tax Reform -
Pillar Two Model Rules (effective for periods commencing on or
after 1st January 2023).
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 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and
Classification of Liabilities as Current or Non-current - Deferral
of Effective Date - (effective for periods commencing on or after 1
st January 202 4 ).
-- Amendments to IAS 1 Presentation of Financial Statements:
Non-current liabilities with covenants - (effective for periods
commencing on or after 1 st January 202 4 ).
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 2023 .
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
For reporting to the chief operating decision maker, the Board
of Directors, the Group is organised into two reportable operating
segments, according to the different products and services provided
by the Mechanical Engineering and Refractory Engineering Divisions.
Segment assets and liabilities include items directly attributable
to segments as well as group centre balances, which can be
allocated on a reasonable basis. Associates are included in
Refractory Engineering. In accordance with the requirements of IFRS
8, information regarding the Group's operating segments is reported
below.
In previous years, the segmental analysis of net assets, capital
expenditure and depreciation was based on the legal structure of
the Group. As the analysis from 30(th) April 2023 has been prepared
on the basis of the operational structure of the Group, the
comparative figures for 31(st) October 2022 have been restated
accordingly.
6 . Operating segment revenue
Unaudited Unaudited Audited
Half Year to 31st Half Year to 31st October Year ended 30th April
October 2023 2022 2023
Mechanical Refractory Total Mechanical Refractory Total Mechanical Refractory Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Total revenue 80,549 38,657 119,206 70,276 40,039 110,315 147,538 80,340 227,878
Inter-segment
revenue (14,723) (6,899) (21,622) (12,226) (8,754) (20,980) (23,771) (18,365) (42,136)
----------------- ----------------- --------------- ----------------- ----------------- --------------- ----------------- ----------------- ---------------
External
revenue 65,826 31,758 97,584 58,050 31,285 89,335 123,767 61,975 185,742
----------------- ----------------- --------------- ----------------- ----------------- --------------- ----------------- ----------------- ---------------
7 . Operating segment profit
Unaudited Unaudited Audited
Half year to 31st Half year to 31st Year ended 30th
October 2023 October 2022 April 2023
% GBP'000 % GBP'000 % GBP'000
Mechanical
Engineering 52 7,719 47 5,809 49 12,171
Refractory
Engineering 48 7,146 53 6,525 51 12,772
---------- -------------- ---------- -------------- ---------- --------------
Segment operating
profit 100 14,865 100 12,334 100 24,943
Group centre (2,346) (2,501) (4,630)
-------------- -------------- --------------
Group operating
profit 12,519 9,833 20,313
Group finance costs
(net) (1,351) (761) (1,438)
Share of profit of
Refractory associate
company 34 33 65
-------------- -------------- --------------
Profit before
taxation
and movement in fair
value of interest
rate swap 11,202 9,105 18,940
-------------- -------------- --------------
Unrealised gain on
10 Year Interest
rate swap 938 3,132 3,189
-------------- -------------- --------------
Profit before tax 12,140 12,237 22,129
Tax (2,971) (3,157) (5,616)
-------------- -------------- --------------
Profit after tax 9,169 9,080 16,513
-------------- -------------- --------------
8 . Operating segment assets and liabilities
Unaudited Unaudited
Half Year to 31st October 2023 Half Year to 31 October 2022
Mechanical Refractory Group Total Mechanical Refractory Group Total
Centre Centre
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net assets
Total assets 187,155 61,843 20,411 269,409 159,760 60,908 18,696 239,364
Total
liabilities (121,959) (23,149) (5,613) (150,721) (98,900) (18,013) (5,534) (122,447)
----------------- ----------------- -------------- ---------------- ----------------- ----------------- -------------- -----------------
Total 65,196 38,694 14,798 118,688 60,860 42,895 13,162 116,917
----------------- ----------------- -------------- ---------------- ----------------- ----------------- -------------- -----------------
A udited
Year ended 3 0 April 2023
Group
Mechanical Refractory Centre Mechanical
Net assets
Total assets 175,023 69,166 18,644 262,833
Total
liabilities (103,234) (27,621) (2,821) (133,676)
----------------- ----------------- -------------- -----------------
Total 71,789 41,545 15,823 129,157
----------------- ----------------- -------------- -----------------
9 . Operating segment capital expenditure, depreciation and amortisation
Unaudited Unaudited
Half Year to 31st October Half Year to 31st October
2023 2022
Mechanical Refractory Group Total Mechanical Refractory Group Total
centre centre
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Capital
expenditure
on:
Property,
plant and
equipment 5,420 1,019 494 6,933 5,567 2,144 115 7,826
Right-of-use
assets -- 34 34 68 976 66 62 1,104
Intangible
assets 381 17 -- 398 208 45 9 262
----------------- ----------------- -------------- ----------------- ----------------- ----------------- -------------- --------------
Total capital
expenditure 5,801 1,070 528 7,399 6,751 2,255 186 9,192
----------------- ----------------- -------------- ----------------- ----------------- ----------------- -------------- --------------
Depreciation 2,445 858 567 3,870 2,338 761 508 3,607
Amortisation 225 408 21 654 221 359 30 610
Total 2,670 1,266 588 4,524 2,559 1,120 538 4,217
----------------- ----------------- -------------- ----------------- ----------------- ----------------- -------------- --------------
Audited
Year ended 30th April 2023
Mechanical Refractory Group Total
centre
GBP'000 GBP'000 GBP'000 GBP'000
Capital
expenditure
on
Property,
plant
and
equipment 15,623 4,928 630 21,181
Right-of-use
assets 1,233 66 220 1,519
Intangible
assets 508 1,305 11 1,824
----------------- ----------------- ----------------- ------------------------------
Total capital
expenditure 17,364 6,299 861 24,524
----------------- ----------------- ----------------- ------------------------------
Depreciation
- property,
plant and
equipment 4,872 1,528 1,070 7,470
Amortisation 446 747 64 1,257
Total 5,318 2,275 1,134 8,727
----------------- ----------------- ----------------- ------------------------------
10 . Geographical segments
Unaudited Unaudited
Half Year to 31st October 2023 Half Year to 31st October 2022
Revenue Net Non-current Capital Revenue Net Non-current Capital
assets assets expenditure assets assets expenditure
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
UK 34,171 73,302 115,763 5,130 25,108 71,240 102,487 7,957
Rest of
Europe 10,526 6,530 4,258 330 13,360 9,096 3,981 385
USA 9,458 -- -- -- 7,807 -- -- --
Pacific
Basin 21,865 16,378 6,656 199 18,349 16,993 7,395 119
Rest of
World 21,564 22,478 10,394 1,740 24,711 19,588 10,489 731
-------------- -------------- ------------------ ------------------ -------------- -------------- ------------------ ------------------
Total 97,584 118,688 137,071 7,399 89,335 116,917 124,352 9,192
-------------- -------------- ------------------ ------------------ -------------- -------------- ------------------ ------------------
A udit e d
Y ear ended 3 0th April 2023
Revenue Net assets Non-current Capital
assets expendi
t ure
GBP'000 GBP'000 GBP'000 GBP'000
UK 55,867 82,669 114,235 21,533
Rest of Europe 28,367 10,636 4,224 790
USA 19,854 -- -- --
Pacific Basin 34,725 15,982 7,029 330
Rest of Wo r ld 46,929 19,870 8,930 1,871
-------------- ----------------- ------------------ ---------------
Total 185,742 129,157 134,418 24,524
-------------- ----------------- ------------------ ---------------
11 . 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.
Unaudited Unaudited Audited
Half Year to 31st Half Year to 31st Year ended 30th April
October 2023 October 2022 2023
Mechanical Refractory Total Mechanical Refractory Total Mechanical Refractory Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Primary
geographical
markets
UK 25,594 8,577 34,171 17,916 7,193 25,109 41,112 14,755 55,867
Rest of
Europe 6,478 4,048 10,526 9,322 4,038 13,360 21,269 7,098 28,367
USA 9,069 389 9,458 7,400 407 7,807 19,141 713 19,854
Pacific Basin 10,082 11,783 21,865 5,885 12,464 18,349 12,253 22,472 34,725
Rest of World 14,603 6,961 21,564 17,527 7,183 24,710 29,992 16,937 46,929
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Total 65,826 31,758 97,584 58,050 31,285 89,335 123,767 61,975 185,742
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Product lines
Standard
products and
consumables 7,043 31,758 38,801 7,222 31,285 38,507 13,767 61,975 75,742
Bespoke
engineered
products
- point in
time 8,377 -- 8,377 17,468 -- 17,468 30,002 -- 30,002
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Total point
in time
revenue 15,420 31,758 47,178 24,690 31,285 55,975 43,769 61,975 105,744
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Minimum
period
contracts
for goods
and services 2,840 -- 2,840 2,252 -- 2,252 4,335 -- 4,335
Bespoke
engineered
products
- over time 47,566 -- 47,566 31,108 -- 31,108 75,663 -- 75,663
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Total over
time revenue 50,406 -- 50,406 33,360 -- 33,360 79,998 -- 79,998
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Total revenue 65,826 31,758 97,584 58,050 31,285 89,335 123,767 61,975 185,742
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
12 . Dividends
The Directors do not propose the payments of an interim
dividend.
Unaudited Unaudited Audited
Half Year Half Year Year ended
to to
31st October 31st October 30th April
2023 2022 2023
GBP'000 GBP'000 GBP'000
Equity dividends paid during the
period:
Ordinary dividends paid in respect
of the year ended 30th April 2023 4,318 -- --
Ordinary dividends paid in respect
of the year ended 30th April 2022 -- 4,145 8,289
------------------- ------------------- -----------------
Total 4,318 4,145 8,289
------------------- ------------------- -----------------
As noted in the Group Annual Accounts to 30th April 2023, the
dividend payments for the year ended 30th April 2023 are being paid
in two equal instalments, with the second payment due in April
2024.
13 . Earnings per share
Unaudited Unaudited Audited
as at as at as at
31st October 31st October 30th April
2023 2022 2023
Number of ordinary shares
Ordinary shares in issue
Opening balance 7,689,600 7,689,600 7,689,600
Shares bought back in the period (180,000) -- --
------------------- ------------------- -----------------
Closing balance 7,509,600 7,689,600 7,689,600
------------------- ------------------- -----------------
Weighted average number of ordinary
shares in issue 7,546,774 7,689,600 7,689,600
------------------- ------------------- -----------------
GBP'000
Relevant profits attributable to
shareholders 8,729 8,761 15,904
------------------- ------------------- -----------------
The Company bought back 180,000 of its ordinary shares on 7th
June 2023 and cancelled them off the register, following a tender
offer to its shareholders.
14 . Property, plant and equipment and intangible assets
Unaudited Unaudited
Half Year to 31st October Half Year to 31st October
2023 2022
Property, Right-of-use Intangible Property, Right-of-use Intangible
plant and assets assets plant and assets assets
equipment equipment
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net book
value at
the
beginning of
the period 101,243 6,763 25,448 87,594 6,191 24,817
Additions 6,933 68 398 7,826 1,104 262
Disposals (at
net
book value) (169) -- -- (46) -- --
Transfers (5,242) 5,242 -- (306) 306 --
Depreciation (3,153) (717) -- (2,965) (642) --
Amortisation -- -- (654) -- -- (610)
Exchange
adjustment 11 (12) (66) 1 (3) (89)
---------------- ------------------- ----------------- ---------------- ------------------- -----------------
Net book
value at
the end of
the period 99,623 11,344 25,126 92,104 6,956 24,380
---------------- ------------------- ----------------- ---------------- ------------------- -----------------
The depreciation on right-of-use assets maybe be analysed as
follows:
Unaudited Unaudited
Half Year Half Year
to 31st to 31st
October October
2023 2022
GBP'000 GBP'000
Finance leases (former IAS 17 definition) 439 365
Operating leases (former IAS 17 definition) 278 277
---------------- ----------------
717 642
---------------- ----------------
15 . Interest-bearing liabilities
Unaudited Unaudited Audited
as at as at as at
31st October 31st October 30th April
2023 2022 2023
GBP'000 GBP'000 GBP'000
Bank overdrafts -- -- 119
Bank loans - repayable by instalments 1,072 1,058 1,154
Bank loans - rolling credit facilities 10,000 -- 3,500
Lease liabilities 2,870 2,260 1,956
------------------- ------------------- -----------------
Due within one year 13,942 3,318 6,729
------------------- ------------------- -----------------
Bank loans - repayable by instalments 6,443 7,367 6,985
Bank loans - rolling credit facilities 42,000 41,000 36,000
Lease liabilities 6,914 4,675 4,271
------------------- ------------------- -----------------
Due after more than one year 55,357 53,042 47,256
------------------- ------------------- -----------------
Bank overdrafts -- -- 119
Bank loans - repayable by instalments 7,515 8,425 8,139
Bank loans - rolling credit facilities 52,000 41,000 39,500
Lease liabilities 9,784 6,935 6,227
------------------- ------------------- -----------------
Total 69,299 56,360 53,985
------------------- ------------------- -----------------
Former IAS 17 analysis of lease
liabilities
Finance leases 8,510 5,306 4,725
Operating leases 1,274 1,629 1,502
------------------- ------------------- -----------------
9,784 6,935 6,227
------------------- ------------------- -----------------
16 . Capital management
As at 31st October 2023 the capital utilised was GBP 168,813,000
, as shown below:
Unaudited Unaudited Audited
As at As at As at
31st October 31st October 30th April
2023 2022 2023
Note GBP'000 GBP'000 GBP'000
Cash and cash equivalents (13,404) (8,604) (19,661)
Bank overdrafts 15 -- -- 119
Bank loans and committed facilities 15 59,515 49,425 47,639
Lease liabilities 15 9,784 6,935 6,227
------------------- ------------------- -----------------
Net debt in accordance with IFRS
16 55,895 47,756 34,324
Operating lease debt (former
IAS 17 definition) 15 (1,274) (1,629) (1,502)
------------------- ------------------- -----------------
Relevant net debt for KPI purposes 54,621 46,127 32,822
Total equity attributable to
equity holders of the parent 114,192 112,654 124,747
------------------- ------------------- -----------------
Capital 168,813 158,781 157,569
------------------- ------------------- -----------------
17 . 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 2023 . The carrying
amount is a reasonable approximation of fair value for all
financial assets and financial liabilities.
Fair value Fair value Amortised Total carrying
hedging through cost amount /
instruments profit and fair value
loss amount
GBP'000 GBP'000 GBP'000 GBP'000
Financial assets measured at
fair value
Forward exchange contracts
used
for hedging 335 -- -- 335
Other forward exchange
contracts -- 19 -- 19
Interest rate swap -- 6,867 -- 6,867
------------------- ------------------ ---------------- ---------------------
335 6,886 -- 7,221
------------------- ------------------ ---------------- ---------------------
Financial assets not measured
at fair value
Cash and cash equivalents -- -- 13,404 13,404
Contract assets -- -- 19,808 19,808
Trade receivables and other
financial
assets -- -- 36,737 36,737
Corporation tax receivable -- -- 418 418
------------------- ------------------ ---------------- ---------------------
-- -- 70,367 70,367
------------------- ------------------ ---------------- ---------------------
Financial liabilities
measured
at fair value
Forward exchange contracts
used
for hedging 1,528 -- -- 1,528
Other forward exchange
contracts -- 701 -- 701
------------------- ------------------ ---------------- ---------------------
1,528 701 -- 2,229
------------------- ------------------ ---------------- ---------------------
Financial liabilities not
measured
at fair value
Bank loans -- -- 59,515 59,515
Lease liabilities -- -- 9,784 9,784
Contract liabilities -- -- 31,412 31,412
Trade payables and other
financial
liabilities -- -- 23,065 23,065
Corporation tax payable -- -- 2,009 2,009
------------------- ------------------ ---------------- ---------------------
-- -- 125,785 125,785
------------------- ------------------ ---------------- ---------------------
The interest rate SWAP and forward exchange 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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IR GZMMZMLRGFZZ
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