TIDMSTG
RNS Number : 9320Z
Strip Tinning Holdings PLC
20 September 2022
20 September 2022
Strip Tinning Holdings plc
("Strip Tinning" or the "Company")
Interim Results
Strip Tinning Holdings plc (AIM: STG), a leading supplier of
specialist connection systems to the automotive sector, is pleased
to announce the unaudited results for Strip Tinning Limited ("STL")
the Group's wholly owned operating subsidiary for the six months
ended 30 June 2022(1) .
Key Financials:
-- Total Revenues of GBP4.7m (H1 2021 :GBP5.8m)
-- EV product sales of GBP0.6m (H1 2021: GBP0.1m)
-- Glazing product sales of GBP4.1m (H1 2021: GBP5.7m)
-- Combined Gross Margin of GBP0.4m / 9% (H1 2021: GBP2.3m / 40%)
-- Like for like adjusted(2) EBITDA loss of GBP1.4m versus profit of GBP1.1m in H1 2021
-- Reported loss after tax of GBP2.5m compared to reported profit on GBP0.1m in H1 2021
-- Cash of GBP3.1m with asset finance borrowings of GBP1.5m (Net
cash GBP1.6m positive versus negative GBP0.7m in H1 2021)
-- Basic EPS of (GBP0.18)(3) (H1 2021: GBP0.01(4) )
(1) The Company was incorporated on 6 January 2022 as Strip
Tinning Holdings Limited and on 7 February re-registered as public
company changing its name to Strip Tinning Holdings plc, ahead of
its admission to AIM. The Company is the holding company of the
Group. Save for the Company and STL there are no other companies
within the Group.
(2) adjusted for FX impacts, share based payments, and IPO
exceptionals plus GBP0.2m of PLC costs not relevant in H1 2021
(3) based on weighted average shares
(4) based on shares in Strip Tinning Limited immediately prior
to IPO
Operational updates:
-- Increased sales across EV side of the business highlight the
continuing focus of vehicle manufacturers on electric ranges, a
continuing trend which the Company is well-positioned to benefit
from
-- 10-year supply agreement for EUR3m incremental Busbar sales with second biggest customer
-- Glazing revenues hampered due to the deterioration in the
automotive sector as a result of well publicised external factors
heightened by Russia's invasion of Ukraine
-- Prudent action taken to accelerate the capture of the EV
opportunity as well as profitability in Glazing, with investment
into people, operations and product
-- Strengthened management team with extensive experience within the sector
Post period end developments:
-- Confirmation of successful government grant application worth
GBP1.4m, over the period to January 2024, to support production
scale up of the EV business
-- Successful set-up of employee Share Incentive Plan,
comprising a free share award based on length of service for all
employees with service of 6 months as at 30 September 2022 to
reward loyalty and aid retention of key skills
-- Termination of contract with a Croatian electric vehicle
technology innovator for the supply of cell management systems to a
leading German OEM
-- Subsequent to successful delivery and completion of
milestones on major EV series production programme, Purchase Order
for GBP0.5m received for next build phase
-- 5-year nomination to provide Glazing connectors for panoramic
roofs of the new range of electric BMW iX vehicles expected to
generate revenues for FY 2023 of c. $1.2m
-- Securing a low volume, high margin prototype order from a EV new entrant
Board Changes
-- Adam Robson to move to Executive Chairman with immediate effect
-- Appointment made in order to leverage Adam's long standing
relationships within the sector and explore partnerships to
accelerate EV division progress
Richard Barton, Group Chief Executive Officer of Strip Tinning,
commented:
"In spite of a challenging backdrop, in which the automotive
sector has sharply declined amidst sector-wide headwinds, the Board
still retains a strong degree of confidence in the medium-term
prospects of the business, typified by the recent GBP1.4 million
government grant award, which will be used to scale up EV
production and increase market share.
Although the EV contract termination request is an undoubted
setback for the EV division as it provided a visible validation of
the Strip Tinning EV product offering, the business is working hard
to ensure that the contract is respected and a fair settlement is
reached. With a fast-growing pipeline across the EV side of the
business, we look forward to progressing further and continuing on
our growth trajectory.
The Glazing side of our business has been impacted by the wider
decline in the automotive sector, catalysed by global supply chain
disruptions, higher inflation in material and labour costs,
Russia's invasion of Ukraine and Covid-19 lockdowns in Shanghai,
all only partially offset by price increases. That said, thanks to
operational adjustments and productivity improvements, we are
starting to see an improving picture and progress made in sales
developments but we continue to monitor progress carefully with a
view to optimising the focus of our activities across Glazing and
EV.
We are strengthened by a robust cash position, an established
reputation within the automotive sector and a highly experienced
management team. I am confident in the continued growth of our EV
division and further improvements in Glazing."
Enquiries:
Strip Tinning Holdings plc Via Alma PR
Richard Barton, Chief Executive Officer
Adam Le Van, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Sole Broker) +44
(0) 20 7496 3000
Rick Thompson
Will Goode
Alex Bond
James Fischer
Alma PR (Financial PR) striptinning@almapr.co.uk
Josh Royston +44 (0) 20 3405 0205
Joe Pederzolli
Chief Executive's Report
Introduction
I would like to take this opportunity to thank our shareholders
for their continued support and advice. In the face of what has
been a challenging backdrop, in which the business has had to deal
with the implications of Russia's invasion of Ukraine, spiralling
inflation, and the softening of the automotive sector, to have such
continuing support is highly appreciated and an endorsement of
Strip Tinning's significant growth potential.
Although the business has not been able to advance as quickly as
we would have liked in some areas, and has had a setback in EV,
there is plenty to be optimistic about. The strength of our
relationships with our Glazing customers built over many years
remain very strong and we are confident that this line of our
business will recover in line with the wider recuperation of the
automotive sector. We are seeing a strong pipeline of opportunities
within the EV division and are well positioned to exploit the
opportunities which we anticipate to receive in such a fast-growing
space.
I am delighted that Adam Robson has agreed to take on an
executive role within the business. As a Board we have been
impressed by his automotive experience and believe that he can add
significant value in a more hands on role, particularly in
identifying and progressing potential partnership opportunities
that could accelerate our growth in the EV market.
I would also like to take this opportunity to thank the entire
Strip Tinning team for their continued hard work. In the face of an
unprecedented backdrop, the resilience of the business reflects the
quality and diligence of all our people and on behalf of the Board,
I wish to offer them my sincere thanks.
Review of Operations
EV
EV revenues in H1 increased to GBP0.6m (H1 2021: GBP0.1m)
reflecting strong progress on this side of the business, and the
Company is well-positioned to exploit further growth opportunities
within the fast-growing EV space. The request to terminate the
contract signed in December 2021 with a technology developer to
supply series production parts to a major German OEM with a Start
of Production date in H2 2023 is clearly disappointing.
Negotiations have begun with the contracted party to settle the
liabilities arising from the decision and we will provide further
information as these progress.
This aside, the opportunity for the EV division continues to
grow and we remain very confident in its future. All other EV
programmes are progressing towards expected milestones, with
indications that volumes will exceed original forecasts. During H1
we started shipping production parts to two customers for use on
their niche high performance vehicles, and we have received the
nomination to supply the production parts on a third niche vehicle.
We also continued to deepen our connection with our key UK
technology development customers, with whom we have nominations to
supply the production parts on five vehicles and from who we have
had orders worth GBP0.9m for samples to be delivered in 2022.
Beyond these customers, we have a further four projects for major
OEM customers with whom we are actively engaged at the quotation
stage. In the first half of the year we started working with a
German business development adviser who is helping us to market our
growing proposition within the EV market. He has proved
instrumental in our progress with these new major potential
European OEM customers.
The recent government funded grant award of GBP1.4 million
through the Advanced Propulsion Centre ("APC") Scale-up Readiness
Validation ("SuRV") competition underpins this confidence and is
the foundation for further grant applications, the first of which
under the APC's Faraday programme we have applied for in
partnership with one of our key UK customers. The grant will be
used in its totality to fund the development and validation of a
pilot production system for the manufacturing of our Cell
Contacting and Management System (CCMS) product, and will be
received via six quarterly drawdowns covering the period to end of
January 2024. The CCMS product is an integral part of the power
electronics system in battery electric vehicles, providing
electrical connectivity and utilising an array of sensors and other
surface mount electronics devices to monitor the performance and
safety of batteries. The project will produce a pilot production
line capable of 80,000 units per year, presenting a clear route to
scale up and increased market share. The Company continues to
explore further grant opportunities.
Glazing
Revenues in Glazing decreased to GBP4.1m (H1 2021: GBP5.7m) due
to the macro-economic conditions which continue to affect the
automotive industry. Despite these challenges, our relationships
with our customer base built over many years remain particularly
strong and we do not believe that there has been any impact to
Strip Tinning's market share. As well as reduced volumes in the
first half of the year, margins have been impacted by higher costs
of raw materials, labour, energy and shipping. They have also
suffered from an adverse mix change as customers have destocked
busbar during the early months of the year.
Despite these difficulties, there continue to be a number of
reasons for optimism within the Glazing division. Mark Perrins
joined us as Managing Director of the division in February in line
with our plans stated at the time of IPO. Mark brings with him 20
years of Tier 1 automotive senior management production experience,
with a particular focus on quality and process improvement. Since
joining and as part of a review into our product ranges, he has
been identifying those areas in which we can most effectively
invest and focus our improvement activities, as well as those that
are most difficult to improve.
Alongside the previously announced 10 year deal for increased
Busbar volumes with Sisecam Automotive worth an incremental EUR0.3m
per year, we have also commenced trials with a potential new busbar
customer which provides an opportunity for significant growth.
Furthermore, the Company will benefit in H2 and beyond from price
increases agreed with customers coming into effect.
Our growing reputation for delivering innovative connectors to
the EV market was also evidenced by the award in July of a 5 year
nomination for a BMW electric vehicle line. This contract is due to
commence in Q4 of FY22 and is expected to generate revenues for the
full year ending 31 December 2023 of circa $1.2 million.
Additionally, we were pleased to announce a 45% connector volume
uplift on a 5-year nomination for use across the Skoda electric
vehicle range.
We plan to increasingly focus on higher margin products where we
can generate a return in spite of higher raw material, energy and
labour costs, whilst retaining the ability to ramp up production
across all product ranges when conditions normalise.
Outlook
Sales in the second half of 2022 continue to improve. However,
the rate of market recovery has been slower than previously
envisaged and the business has now also stopped production of some
low margin Glazing products.
EBITDA losses have been steadily reducing and this trend is
expected to materially continue into the second half of 2022.
However, with lower sales than previously anticipated and harsher
headwinds from market weakness, high inflation and slower progress
than expected on automation, the Board still expects that EBITDA in
the second half of 2022 will remain negative.
Beyond 2022, external headwinds are expected to remain and
trading in the Glazing business overall will remain challenging.
However, the Board believes that further improvements can be made
and that the business is well placed to benefit as these changes
are delivered into 2023 when eventually the headwinds ease and
conditions normalise.
The loss of the EV production supply contract with the
technology developer will have a minimal impact this financial
year, but the short-term outlook for the EV division is subject to
ongoing discussions with the customer to resolve contractual
liabilities.
The medium to long-term prospects for the EV division and the
Group as a whole continue to be very positive as discussed above.
With our reputation for innovation and excellence, our world-class
customer base and increasing exposure to the fast-growing EV
industry, we are well placed to succeed.
Financial Review
Unaudited Unaudited
six months six months
ended 30 ended 30
June June
2022 2021
GBP'000 GBP'000
Revenue 4,677 5,815
Gross profit 410 2,351
EBITDA (1,420) 1,087
============ ============
PLC costs (216)
Exceptional IPO related
expenses (382) (91)
Other Exceptional
expenses (91)
FX 43 (114)
Share Based Payments (62) (38)
Depreciation (687) (342)
Amortisation 13 (69)
Operating Profit
/ (Loss) (2,802) 433
============ ============
Glazing sales declined GBP1.6m / 28% compared to H1 2021. This
decline reflected the overall 14% reduction in passenger vehicle
registrations versus the comparable period in 2021 reported by
ACEA, compounded by Strip Tinning's direct exposure to 3 glazing
plants owned by multinational glazing customers located in Russia
which have not been calling off product following the Russian
invasion of Ukraine.
Busbar accounted for GBP1.3m of the sales decline as customers
unwound stock holdings from 2021 with the declines in the
production of new vehicles. This had a significant impact on
overall gross margin for the group in H1.
In common with the wider economy, the business has experienced
significant inflationary pressures for materials (metals and
plastics). London Metal Exchange (LME) copper and tin prices peaked
in H1 2022 at US$10,730 / US$50,050 at 15% / 53% higher
respectively than 2021 averages. By 30th June 2022, prices had
fallen back to US$8,245 / US$27,050 (below 2021 average prices) and
the LME stock index had increased. This indicated less demand
pressure, which is a positive, especially in conjunction with the
additional sources of supply the business has been developing to
diversify supply and improve pricing. The weakening of the GBP
versus the EUR and US$ is also helpful to cash flows as the
majority of sales are in these currencies versus the majority of
costs remaining in GBP.
The tight labour market in the UK has also resulted in the need
for over-time and more expensive agency staff to cover production
staffing requirements. The well-publicised cost of living pressures
have led to an average pay rise of 6%, lifting production worker
pay above the National Living Wage, to assist with retention and
recruitment. Investment into engineering, quality and programme
management has also increased administrative costs. Direct labour
costs have been, and remain, the biggest challenge to profitability
in the glazing connector business, particularly as disruption to
planned production from material or staff shortages inevitably
leads to premium freight costs to ensure customer schedules are
met.
The reduced sales and gross margin % therefore provided
insufficient contribution to cover the overhead cost base that has
been built up in the previous 12 months to support the EV growth
strategy and PLC structure, resulting in the GBP1.6m EBITDA loss
for the period (inclusive of all PLC costs incurred).
Cash stood at GBP3.1m as at 30 June 2022. Together with the
government grant award to assist with the scale-up of the EV
business and R&D Tax Credit claims in preparation, this
underpins the investment programme to meet the requirements of
customers.
Statement of Comprehensive Income f or the six months ended 30
June 2022
Note Unaudited Unaudited
Six months Six months
ended 30 ended 30
June June
2022 2021
GBP'000 GBP'000
Revenue 3 4,677 5,815
Cost of sales (4,267) (3,464)
Gross profit 410 2,351
Other operating income - 17
Administrative expenses
excluding exceptional
costs (2,830) (1,844)
Exceptional IPO related
expenses 4 (382) (91)
Total administrative
expenses (3,212) (1,935)
Operating (loss)/profit (2,802) 433
Finance costs (81) (64)
(Loss)/profit before
taxation (2,883) 369
Taxation 5 412 (248)
(Loss)/profit and total
comprehensive (expense)/income
for the period (2,471) 121
------------ -------------
(Loss)/earnings per
share (pence)
Basic and diluted 7 (17.8) 1.21
------------ -------------
Consolidated statement of Financial Position as at 30 June
2022
Notes Unaudited Audited Unaudited
30 June 31 December 30 June
2022 2021 2021
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 1,489 1,561 1,080
Right-of-use assets 1,287 1,142 1,161
Property, plant and
equipment 2,936 3,089 3,003
-------------
5,712 5,792 5,244
---------- ------------- ----------
Current assets
Inventories 2,316 2,014 2,090
Trade and other receivables 2,155 3,778 2,622
Corporation tax receivable 353 279 90
Cash and cash equivalents 3,134 337 566
---------- ------------- ----------
7,958 6,408 5,368
---------- ------------- ----------
Total assets 13,670 12,200 10,612
---------- ------------- ----------
LIABILITIES
Current liabilities
Trade and other payables (1,678) (4,413) (1,991)
Hire purchase liabilities (567) (559) (490)
Lease liabilities (177) (152) (104)
-------------
(2,422) (5,124) (2,585)
---------- ------------- ----------
Non-current liabilities
Accruals and deferred
income (137) (162) (219)
Hire purchase liabilities (945) (1,235) (815)
Lease liabilities (1,099) (1,104) (1,165)
Provisions 8 (222) - -
Deferred tax liabilities - (338) (835)
---------- ------------- ----------
(2,403) (2,839) (3,034)
---------- ------------- ----------
Total liabilities (4,825) (7,963) (5,619)
---------- ------------- ----------
Net assets 8,845 4,237 4,993
---------- ------------- ----------
EQUITY
Share capital 9 151 100 100
Share premium account 6,966 - -
Merger reserve (100) (100) (100)
Retained earnings 1,828 4,237 4,993
-------------
Total equity 8,845 4,237 4,993
---------- ------------- ----------
Consolidated statement of changes in equity
Share Share Merger Retained Total
capital premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2021 100 - (100) 5,104 5,104
Profit and total comprehensive
income for the period - - - 121 121
Share based payment - - - 38 38
Dividends paid - - - (270) (270)
--------- ---------
At 30 June 2021 100 - (100) 4,993 4,993
--------- --------- --------- ---------- --------
Loss and total comprehensive
expense for the period - - - (946) (946)
Share based payment - - - 107 107
Share options deferred
tax credit 225 225
Dividends paid - - - (142) (142)
--------- ---------
At 31 December 2021 100 - (100) 4,237 4,237
--------- --------- --------- ---------- --------
Loss and total comprehensive
expense for the period - - (2,471) (2,471)
Shares issued in the
period 51 6,966 - - 7,017
Share based payment - - - 62 62
At 30 June 2022 151 6,966 (100) 1,828 8,845
--------- --------- --------- ---------- --------
Consolidated statement of cash flows for the six months ended 30
June 2022
Unaudited Unaudited
Six months Six months
ended 30 ended 30
June 2022 June 2021
GBP'000 GBP'000
Cash flow from operating activities
(Loss)/profit for the financial
period (2,471) 121
Adjustment for:
Depreciation of property, plant
and equipment 285 267
Depreciation of right-of-use assets 171 75
Amortisation of intangible assets 229 84
Amortisation of government grants (13) (15)
Share based payment 62 38
Finance costs 81 64
Taxation (credit)/charge (412) 248
Changes in working capital:
(Increase) in inventories (302) (568)
Decrease/(increase) in trade and
other receivables 1,623 (449)
(Decrease)/increase in trade and
other payables (2,707) 641
------------ ---------------------
Cash (used in)/generated from
operations (3,454) 506
Income tax paid - -
------------ ---------------------
Net cash (used in)/from operating
activities (3,454) 506
------------ ---------------------
Cash flow from investing activities
Purchase of property, plant and
equipment (132) (357)
Purchase of intangible assets (157) (144)
Net cash used in investing activities (289) (501)
------------ ---------------------
Cash flow from financing activities
Shares issued (net of issue costs) 7,017 -
Dividends paid to shareholders - (270)
Interest paid (81) (64)
Payment of lease liabilities (114) (57)
Repayment of capital element of
hire purchase contracts (282) (278)
-------- --------
Net cash generated from/(used
in) financing activities 6,540 (669)
-------- --------
Increase/(decrease) in cash and
cash equivalents 2,797 (664)
-------- --------
Net cash and cash equivalents at
beginning of the period 337 1,230
Net cash and cash equivalents
at end of the period (all cash
balances) 3,134 566
-------- --------
Notes to the interim financial statements f or the six months
ended 30 June 2022
1. Corporate information
Strip Tinning Holdings plc is a public company incorporated in
the United Kingdom. The registered address of the Company is Arden
Business Park, Arden Road, Frankley Birmingham, West Midlands, B45
0JA.
The principal activity of the Company and its subsidiary (the
'Group') is the manufacture of automotive busbar, ancillary
connectors and flexible printed circuits.
2. Accounting policies
Basis of preparation
This unaudited consolidated interim financial information for
the six months ended 30 June 2022 and 30 June 2021 has been
prepared in accordance with IFRS as adopted by the United Kingdom
including IAS 34 'Interim Financial Reporting'.
The accounting policies applied by the Group include those as
set out in the financial statements for the subsidiary company,
Strip Tinning Limited, for the year ended 31 December 2021 and are
consistent with those to be used by the Group in its next financial
statements for the year ending 31 December 2022. In addition to the
policies presented in the 2021 financial statements, the Group will
apply the policies below applicable to consolidated financial
statements and the Company becoming the parent company for Strip
Tinning Limited. There are no new standards, interpretations and
amendments which are not yet effective in these financial
statements, expected to have a material effect on the Group's
future financial statements.
The financial information does not contain all of the
information that is required to be disclosed in a full set of IFRS
financial statements. The financial information for the six months
ended 30 June 2022 and 30 June 2021 is unreviewed and unaudited and
does not constitute the Group or Company's statutory financial
statements for those periods.
The comparative financial information for the full year ended 31
December 2021 has, however, been derived from the audited statutory
financial statements for Strip Tinning Limited for that period. A
copy of those statutory financial statements has been delivered to
the Registrar of Companies. The auditor's report on those accounts
was unqualified and did not contain a statement under section
498(2)-(3) of the Companies Act 2006.
These policies have been applied consistently to all periods
presented, unless otherwise stated.
The interim financial information has been prepared under the
historical cost convention with the exception of the fair values
applied in accounting for share based payments. The financial
information and the notes to the historical financial information
are presented in thousands of pounds sterling ('GBP'000'), the
functional and presentation currency of the Company, except where
otherwise indicated.
Merger accounting and consolidated financial statements
The Company was incorporated on 6 January 2022 with one GBP0.01
ordinary share and on 2 February 2022, became the Group parent
company when it issued 9,999,999 GBP0.01 ordinary shares in
exchange for all the ordinary shares in Strip Tinning Limited. In
addition, options over ordinary shares in Strip Tinning Limited
were converted, on equivalent terms, to options over 813,045 shares
in the Company. This is considered not to be a business combination
and outside the scope of IFRS3. This is a key judgement. and as a
transaction where there was no change in the shareholders or
holdings is accordingly accounted for using merger accounting with
no change in the book values of assets and liabilities with no fair
value accounting applied.
The consolidated financial statements present the results of the
Company and its subsidiary as if they have always formed a single
entity. Intercompany transactions and balances between Group
companies are therefore eliminated in full. The share capital
presented is that of Strip Tinning Holdings plc with the difference
on elimination of Strip Tinning Limited's capital being shown as a
merger reserve.
A subsidiary is an entity over which the Group has control. The
Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the
entity.
Going concern
The directors have considered the principal risks and
uncertainties facing the business, along with the company's
objectives, policies and processes for managing its exposure to
financial risk. In making this assessment the directors have
prepared cash flows for the foreseeable future, being a period of
at least 12 months from the expected date of approval of the
financial information. These forecasts show that the Company should
be able to manage its working capital and existing resources to
enable it to meet its liabilities as they fall due.
Based on the above factors, the directors have prepared the
interim financial information on a going concern basis.
3. Segmental and geographical destination reporting
IFRS 8, Operating Segments, requires operating segments to be
identified on the basis of internal reports that are regularly
reviewed by the company's chief operating decision maker. The chief
operating decision maker is considered to be the executive
Directors.
The Group previously comprised only one operating segment for
the sale of automotive circuit components for glazing products. The
operating segments are monitored by the chief operating decision
maker and strategic decisions are made on the basis of adjusted
segment operating results. All assets, liabilities and revenues are
located in, or derived in, the United Kingdom. However, the Company
has commenced the development and initial sales of products for
electric vehicles ('EV') which are expected to grow to be a
material segment. Separate management reporting and information has
now been prepared in the period to 30 June 2022 at a revenue and
gross profit level only as follows:
Glazing EV Total
6 months ended 30 June 2022 GBP'000 GBP'000 GBP'000
Revenue 4,089 588 4,677
Cost of sales (3,736) (529) (4,265)
-------- -------- --------
Gross profit 353 57 410
-------- -------- --------
Some estimated information for EV was derived for the six months
ended 30 June 2021 showing sales of GBP135,000, net costs of about
GBP260,000 and hence a loss of GBP125,000 as a result of the
increasing investment and development in this area.
In the six months ended 30 June 2022 the company had 4 major
customers who represented
22%, 19%, 12% and 8% of revenue (2021:4 customers who
represented 27%, 17%, 14% and 9% of revenue).
All revenue arises at a point in time and relates to the sale of
automotive busbar, ancillary connectors and flexible printed
circuit product. Turnover by geographical destination is as
follows:
Six months Six months
ended 30 ended 30
June 2022 June 2021
GBP'000 GBP'000
Europe 3,260 2,886
Rest of the World 1,417 2,929
----------- -----------
4,677 5,815
----------- -----------
4. Exceptional costs
Six months Six months
ended 30 ended 30
June 2022 June 2021
GBP'000 GBP'000
IPO related costs 382 91
----------- -----------
The directors consider that the specific professional fees and
costs incurred in preparation for the IPO and connection with the
admission process are exceptional as they are non-recurring in
nature and not related to the underlying trading. The majority of
the fees (GBP1.077m) have been taken against share premium as they
relate to the new shares issued, with the balance expensed and
classified as an exceptional cost.
5. Income tax
Six months Six months
ended 30 ended 30
June 2022 June 2021
GBP'000 GBP'000
Current tax:
UK corporation tax 74 (18)
Total current tax credit/(charge) 74 (18)
Deferred tax:
Origination and reversal of
temporary differences 338 (29)
Effect of change in tax rate
on opening liability - (201)
Total deferred tax credit/(expense) 338 (230)
Total tax credit/(charge) 412 (248)
----------- -----------
The (credit)/charge for the year can be reconciled to the
(loss)/profit for the year as follows:
Six months Six months
ended 30 ended 30
June 2022 June 2021
GBP'000 GBP'000
(Loss)/profit before taxation (2,883) 369
----------- -----------
Income tax calculated at
19% (2021: 19%) (548) 70
Expenses not deductible 88 22
Enhanced research and development
allowances (32) (45)
Enhanced capital allowances (6)
Deferred tax not recognised 220
Effect of change in deferred
tax rate - 201
Effect of differing deferred
tax and current period (134) -
tax rates
Total tax (credit)/charge (412) 248
----------- -----------
The tax rate used to calculate deferred tax is 25% at 30 June
2022 (2021: 25%), being the rate at which the timing differences
were expected to unwind based on enacted UK corporate tax
legislation at each balance sheet date.
A deferred tax asset has not been recognised for losses carried
forward as, the key accounting judgement made is that it is not yet
considered sufficiently probable that the losses will be utilised
in the short term.
6. Dividends paid and proposed
Amounts recognised as distributions to equity holders in the
period:
Six months Six months
ended 30 ended 30
June 2022 June 2021
GBP'000 GBP'000
Interim ordinary dividends
paid for the period ended 30
June 2022 of GBPnil per share
(2021 six months: 2.7 pence
paid) - 270
-------------- -----------
The comparative information is presented as if the 10,000,000
GBP0.01 shares exchanged for the prior Strip Tinning Limited
capital had been in place.
7. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings Six months Six months
ended 30 ended 30
June 2022 June 2021
GBP'000 GBP'000
(Loss)/earnings for the purpose
of basic and diluted earnings
per share being net profit attributable
to the shareholders (2,471) 121
------------- -------------
Six months Six months
ended 30 ended 30
June 2022 June 2021
Number of shares GBP'000 GBP'000
Weighted average number of
ordinary GBP0.01 shares for
the purposes of basic and
diluted (loss)/earnings per
share 13,895,056 10,000,000
-------------
There are potentially dilutive options in place over 254,051
shares at 30 June 2022 (2021: over 354 A GBP0.10 ordinary shares in
Strip Tinning Limited exercisable on a sale or listing. The 2021
options were subject to a hurdle value before any entitlement to
share in the capital proceeds or new shares on a listing arises and
it was considered that they were not dilutive in the period to 30
June 2021).
8. Provisions
The dilapidations provisions have been reassessed in respect of
the group's rented properties and increased to allow for potential
reinstatement costs that may be incurred at the end of the leases
under the standard terms in the contracts. This primarily results
in an increase in the amount recognised in respect of the right of
use assets for property and in the discounted provisions liability
of GBP222,000 at 30 June 2022.
9. Share capital
The movements in share capital have been as follows:
Number Nominal Share premium
of GBP0.01
shares
GBP'000 GBP'000
Share issued on incorporation 1 - -
Shares issued in exchange for Strip
Tinning Limited shares 9,999,999 100 -
EIS and VCT placing shares issued
at GBP1.85 each 2,702,702 27 4,973
Other placing shares issued at
GBP1.85 each 1,621,622 16 2,984
Exercise of options at GBP0.116
each 813,045 8 86
Share issue costs (1,077)
------------ -------- --------------
15,137,369 151 6,966
------------ -------- --------------
The issue of shares resulted in a share premium of GBP6,966,000
(net of GBP1,077,000 of share issue costs).
The issue of shares with a nominal value of GBP100,000 in
exchange for the 2,000 GBP0.10 shares in Strip Tinning Limited with
a nominal value of GBP200 results in a debit to a merger reserve of
GBP99,800, after consolidating applying merger accounting
principles as set out in note 2.
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END
IR FLFSTADIALIF
(END) Dow Jones Newswires
September 20, 2022 02:00 ET (06:00 GMT)
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