TIDMGDWN
RNS Number : 2322K
Goodwin PLC
20 December 2022
GOODWIN PLC
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the half year ended 31st October 2022
CHAIRMAN'S STATEMENT
The pre-tax trading profit for the Group for the first six month
period ending 31st October 2022 was GBP9.1 million (2021: GBP7.7
million) on a revenue of GBP89.3 million.
I am pleased to report that at the time of writing the workload
has increased to GBP242 million (2021: GBP157 million). This
increase relates to the materialisation of some of the major
projects that the Mechanical Engineering Division has been pursuing
within the military and nuclear waste re-processing markets. It is
fortunate that the Mechanical Engineering Division has diversified
away from oil and gas into other business streams that will likely
avoid the effects of a global recession that are almost certainly
going to feature over the next two years. These business streams
include US and UK government procured components for military ships
and boats, nuclear power, along with nuclear waste storage
products.
The first half of the financial year has benefitted from the
Refractory Engineering Division continuing to generate excellent
results, as well as the pump companies having gone from strength to
strength, as the recovery of the global economy following the
impact of the Covid-19 pandemic has provided the mining industry
with the confidence to proceed with spending again.
The Group's overall net debt stands at GBP46.1 million (31st
October 2021: GBP34.8 million) which, whilst temporarily high,
equates to a modest gearing of only 39.5%. Within the debt figure
is GBP8.4 million that has been invested in CO (2) emission
projects and with the current escalated electricity prices that
continue to be prevalent in the UK and Europe, the payback on the
solar investments averages at about two years. Whilst cash flow
remains a key focus area, with global supply chains generally
remaining under stress around the world, the pro-active decision to
build up stocks over the past few years has significantly aided the
Group's ability to meet the demand, specifically within the
Refractory Division.
Our interest rate swap continues to provide effective protection
from inflationary interest on the first GBP30 million of facility,
capping the interest to less than 1% till August 2031. Further to
our full explanation as to the accounting for the interest rate
swap, which can be read within our Annual Report for the year
ending 30th April 2022, the Board has and will continue to focus
and report on the trading profit that excludes the profit impact of
the interest rate swap valuation. Due to the recent and expected
increases to the base interest rate by the Bank of England the
Group's swap increased in value by a further GBP3.1 million over
the course of the first six months of the current financial
year.
The work ethic of the Group's management and employees is world
class and the Board wishes to thank all our employees for their
unwavering loyalty, devotion and hard work.
T.J.W. Goodwin
Chairman 19th December 2022
MANAGEMENT REPORT
Financial Highlights
Unaudited Unaudited Audited
Half Year Half Year Year ended
to to
31st October 31st October 30th April
2022 2021 2022
GBP m GBP m GBP m
---------------------------------------------------------- ------------- ------------- -----------
Consolidated Results
Revenue 89.3 68.9 144.1
Operating profit 9.8 8.2 18.3
Trading profit * 9.1 7.7 17.2
Unrealised gain on 10 year interest rate swap derivative 3.1 -- 2.7
Profit before tax 12.2 7.7 19.9
Profit after tax 9.1 6.0 13.6
---------------------------------------------------------- ------------- ------------- -----------
Capital additions
Property, plant and equipment (PPE) owned 7.8 9.0 16.4
Property, plant and equipment (PPE) right-of-use assets 1.1 1.1 3.7
Operating lease assets (former IAS 17 definition) (0.2) -- (0.1)
Intangible assets 0.3 0.6 1.8
---------------------------------------------------------- ------------- ------------- -----------
Capital expenditure for KPI purposes 9.0 10.7 21.8
---------------------------------------------------------- ------------- ------------- -----------
Earnings per share - basic 113.93 p 72.12 p 169.14 p
Earnings per share - diluted 113.93 p 72.12 p 169.14 p
* Trading profit is defined as profit before taxation less the
movement in fair value of interest rate swap.
Revenue
Revenue of GBP 89,335,000 for the six months represents a n 18.8
% increase from the GBP 75,200,000 achieved during the six month
period to 30th April 2022 .
Trading profit
Trading profit for the six months of GBP 9,105,000 represents a
17.9 % increase from the GBP7,723,000 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
2022 2021 2022
------------------------------------------------------- ---------- ---------- ------------
Trading profit (GBP'm) 9.1 7.7 17.2
Post tax profit + depreciation + amortisation (GBP'm) 9.9 9.9 21.9
Gross profit % of revenue 26.5 % 29.5 % 29.6 %
Trading profit % of revenue 10.2 % 11.2 % 11.9 %
Gearing % 39.5 % 31.7 % 25.8 %
Non cash charges (GBP'm)
Depreciation - owned assets 3.0 2.9 6.2
Depreciation - right-of-use assets 0.6 0.5 1.2
Amortisation and impairment 0.6 0.7 1.6
---------- ---------- ------------
Total non cash charges 4.2 4.1 9.0
---------- ---------- ------------
Alternative performance measures mentioned above are defined on
pages 96 and 97 of the Group Annual Accounts to 30th April
2022.
2022/23 Outlook
While there continue s to be some global uncertainties due to
the geopolitical environment and rising costs for consumers, the
Group's activity and profitability levels are expected to increase
over the next twelve months as a result of the increased work
load.
The Mechanical Engineering Division performance is recovering,
and with the recent increase in order input the Board expects the
activity levels to take a significant step forward in the second
half of this financial year, which will provide the Division with a
much better start to the next financial year. In the Annual Report
to 30th April 2022, we stated that we expected to be able to
deliver substantially increased profitability in the year ending
April 2023. Since the date of writing that statement a greater
degree of uncertainty around the world has evolved with high levels
of currency pair fluctuations, the continued conflict in Ukraine
and with the Bank of England delivering the biggest interest rate
hike in 33 years. This uncertainty is resulting in certain industry
sectors hesitating in proceeding boldly with their planned
investment projects. For this reason we expect the pre-tax profits
in the second half of this financial year to be similar to the
first half which would result in a modest increase in annual
pre-tax profit rather than a substantial increase.
The Group will benefit over the medium and long term as we near
the end of the significant capital investment programmes of
installing a second calciner at Hoben International, as well as the
upfront costs of installing the high temperature polymer production
plant at Duvelco. Thereafter , capital expenditure levels are set
to normalise going forwards, as we focus on delivering the orders
recently won, as well as the ones still being pursued.
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 14 to 15 of the Group Annual
Accounts to 30th April 2022 which describe the principal risks and
uncertainties, and to note 26 , starting on page 75 , 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 for the next nine years.
Report on Expected Developments
This report describes the expected development of the Group
during the year ended 30th April 2023 . 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 profitability by building on the
increase in activity seen in the second half of last year and ,
with the current order book levels as they are , this should
continue and improve through this current year and into the next
financial year. Where many companies have struggled with increased
material and energy prices, disruption in the logistics of the
supply chain and the impacts of Covid-19, the Group has continued
on throughout and been able to carry on with its value added
activities. As at 31st October 2022, the Group net debt stood at
GBP46.1 m illion (31st October 2021: GBP34.8 m illion ) as set out
in note 1 7 of these accounts. Whilst the net debt levels are
higher than those recorded at April 2022 and October 2021 the
gearing levels at 39.5% remain moderate for a Group of this size.
Given the above-mentioned, the Directors do not see an issue with
the continued ability of the Group to meet its financial
commitments as they fall due and 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
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 2022
Condensed Consolidated Statement of Profit or Loss
for the half year to 31st October 2022
Unaudited Unaudited Audited
Half Year Half Year Year ended
to to
31st October 31st October 30th April
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------------------------------------------------------- ------------- ------------- -----------
Continuing operations
Revenue 89,335 68,884 144,108
Cost of sales (65,645) (48,529) (101,404)
------------- ------------- -----------
Gross profit 23,690 20,355 42,704
Distribution expenses (2,056) (1,817) (3,743)
Administrative expenses (11,801) (10,335) (20,654)
------------- ------------- -----------
Operating profi t 9,833 8,203 18,307
Finance costs (net) (761) (513) (1,169)
Share of profit of associate company 33 33 63
------------- ------------- -----------
Profit before taxation and movement in fair value of interest rate swap 9,105 7,723 17,201
Unrealised gain on 10 year interest rate swap derivative 3,132 -- 2,740
------------- ------------- -----------
Profit before taxation 12,237 7,723 19,941
Tax on profit (3,157) (1,719) (6,321)
------------- ------------- -----------
Profit after taxation 9,080 6,004 13,620
------------- ------------- -----------
Attributable to:
Equity holders of the parent 8,761 5,546 12,980
Non -controlling interests (NCI) 319 458 640
------------- ------------- -----------
Profit for the period 9,080 6,004 13,620
------------- ------------- -----------
Basic earnings per ordinary share (note 13 ) 113.93 p 72.12 p 169.14 p
------------- ------------- -----------
Diluted earnings per ordinary share (note 13 ) 113.93 p 72.12 p 169.14 p
------------- ------------- -----------
Condensed Consolidated Statement of Comprehensive Income
for the half year to 31st October 2022
Unaudited Unaudited Audited
Half Year Half Year Year ended
to to
31st October 31st October 30th April
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------------------------------------------------------ ------------- ---------------- -----------
Profit for the period 9,080 6,004 13,620
Other comprehensive expense
Items that are or may be reclassified subsequently to the income
statements
Foreign exchange translation differences (167) (697) 1,493
Effective portion of changes in fair value of cash flow hedges (4,958) 754 (3,834)
Ineffective portion of changes in fair value of cash flow hedges (92) -- (339)
Change in fair value of cash flow hedges transferred to profit or loss 949 (731) (1,432)
Effective portion of changes in fair value of cost of hedging 96 (145) 275
Ineffective portion of changes in fair value of cost of hedging -- -- (23)
Change in fair value of cost of hedging transferred to profit or loss (15) (10) (75)
Tax on items that are or may be reclassified subsequently to profit or
loss 950 (91) 1,114
------------- ---------------- -----------
Other comprehensive expense for the period, net of income tax (3,237) (920) (2,821)
------------- ---------------- -----------
Total comprehensive income for the period 5,843 5,084 10,799
------------- ---------------- -----------
Attributable to:
Equity holder of the parent 5,633 4,732 10,089
Non-controlling interests 210 352 710
------------- ---------------- -----------
5,843 5,084 10,799
------------- ---------------- -----------
Condensed Consolidated Statement of Changes in Equity
for the half year to 31st October 2022
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 Year 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)
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Balance at 31st October 2022 769 382 5,244 (5,860) 207 116,056 116,798 4,263 121,061
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Condensed Consolidated Statement of Changes in Equity
for the half year to 31st October 2022
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 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 C hanges in Equity
for the half year to 31st October 2022
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
2022
(Audited)
Balance at 1st May
2021 753 (852) 5,244 1,601 (1) 106,396 113,141 4,887 118,028
Total comprehensive
income:
Profit -- -- -- -- -- 12,980 12,980 640 13,620
Other comprehensive
income:
Foreign exchange
translation
differences -- 1,315 -- -- -- -- 1,315 178 1,493
Net movements on cash
flow hedges -- -- -- (4,347) 141 -- (4,206) (108) (4,314)
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Total comprehensive
income / expense for
the period -- 1,315 -- (4,347) 141 12,980 10,089 710 10,799
Issue of shares 16 -- -- -- -- -- 16 -- 16
Dividends paid -- -- -- -- -- (7,862) (7,862) (808) (8,670)
Acquisition of NCI
without a change in
control -- -- -- -- -- (74) (74) (356) (430)
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Balance at 3 0th April
2022 769 463 5,244 (2,746) 140 111,440 115,310 4,433 119,743
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
Condensed Consolidated Balance Sheet
Unaudited Unaudited Audited
as at 31st as at 31st as at 30th
October October April 2022
2022 2021
GBP'000 GBP'000 GBP'000
----------------------------------------------------------- ----------- ----------- -----------
Non-current assets
Property, plant and equipment 92,104 82,949 87,594
Right-of-use assets 6,956 4,276 6,191
Investment in associates 912 815 896
Intangible assets 24,380 24,500 24,817
Derivative financial assets 5,446 613 2,741
Long-term trade receivables -- -- 1,191
----------- ----------- -----------
129,798 113,153 123,430
----------- ----------- -----------
Current assets
Inventories 43,323 37,315 40,364
Contract assets 17,811 13,245 12,331
Trade and other financial assets 30,341 23,940 23,717
Other receivables 7,323 6,298 6,217
Deferred tax asset 59 144 60
Derivative financial assets 2,105 3,001 1,211
Cash and cash equivalents 8,604 12,257 11,651
----------- ----------- -----------
109,566 96,200 95,551
----------- ----------- -----------
Total assets 239,364 209,353 218,981
----------- ----------- -----------
Current liabilities
Bank overdrafts and interest-bearing liabilities 3,318 1,853 2,764
Contract liabilities * 19,462 14,542 14,749
Trade payables and other financial liabilities 18,722 16,606 23,004
Other payables 6,266 4,102 4,256
Derivative financial liabilities 4,984 1,262 2,393
Liabilities for current tax 1,194 1,689 1,886
Provisions for liabilities and charges 206 512 205
----------- ----------- -----------
54,152 40,566 49,257
----------- ----------- -----------
Non-current liabilities
Interest-bearing liabilities 53,042 47,053 40,376
Derivative financial liabilities 2,326 336 1,643
Provisions for liabilities and charges 333 304 251
Deferred tax liabilities 8,450 6,445 7,711
----------- ----------- -----------
64,151 54,138 49,981
----------- ----------- -----------
Total liabilities 118,303 94,704 99,238
----------- ----------- -----------
Net assets 121,061 114,649 119,743
----------- ----------- -----------
Equity attributable to equity holders of the parent
Share capital 769 769 769
Translation reserve 382 (1,443) 463
Share-based payments reserve 5,244 5,244 5,244
Cash flow hedge reserve (5,860) 1,488 (2,746)
Cost of hedging reserve 207 (111) 140
Retained earnings 116,056 104,006 111,440
----------- ----------- -----------
Total equity attributable to equity holders of the parent 116,798 109,953 115,310
Non-controlling interests 4,263 4,696 4,433
----------- ----------- -----------
Total equity 121,061 114,649 119,743
----------- ----------- -----------
* Contract liabilities include advance payments from customers
of GBP 18,627,000 (October 2021: GBP 13,766,000 ), with the balance
of GBP 835,000 (October 2021: GBP 776,000 ) being costs accrued for
contracts.
Condensed Consolidated Statement of Cash Flows
for the half year ended 31st October 2022
Unaudited Unaudited Audited
Half Year Half Year Year ended
to to
31st October 31st October 30th April
2022 2021 2022
GBP'000 GBP'000 GBP'000
--------------------------------------------------------------------------- ------------- ------------- -----------
Cash flow from operating activities
Profit from continuing operations after tax 9,080 6,004 13,620
Adjustments for:
Depreciation of property, plant and equipment 2,965 2,932 6,202
Depreciation of right-of-use assets 642 456 1,192
Amortisation and impairment of intangible assets 610 747 1,572
Financ e costs (net) 761 513 1,169
Foreign exchange (gains) / losses (1,965) 125 (1,535)
Loss / (p rofit ) on sale of property, plant and equipment 7 (95) (18)
Unrealised gain on 10 year interest rate swap derivative (3,132) -- (2,740)
Share of profit of associate companies (33) (33) (63)
UK tax incentive credit on research and development -- -- (675)
Tax expense 3,157 1,719 6,321
------------- ------------- -----------
Cash generated from operating activities before changes in working capital
and provisions 12,092 12,368 25,045
Increase in inventories (3,112) (3,073) (5,175)
(In crease ) / decrease in contract assets (5,461) 2,583 3,498
Increase in trade and other receivables (5,426) (4,076) (3,341)
Increase in contract liabilities 4,720 266 472
(Decrease) / increase in trade and other payables (2,488) (5,192) 804
I ncrease in unhedged derivative balances -- 180 --
------------- ------------- -----------
Cash inflow from operations 325 3,056 21,303
Interest paid (net) (763) (513) (1,258)
Corporation tax paid (2,196) (576) (2,051)
------------- ------------- -----------
Net cash from operating activities (2,634) 1,967 17,994
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 39 213 341
Acquisition of property, plant and equipment (6,796) (9,220) (16,215)
Additional investment in existing subsidiaries -- (430) (430)
Acquisition of intangible assets (143) (269) (282)
Development expenditure capitalised (166) (408) (1,505)
------------- ------------- -----------
Net cash outflow from investing activities (7,066) (10,114) (18,091)
Cash flows from financing activities
Proceeds from issue of share capital -- 16 16
Payment of capital element of lease obligations (882) (385) (1,153)
Dividends paid (4,145) (7,862) (7,862)
Dividends paid to non-controlling interests (380) (187) (808)
Proceeds from new loans and committed facilities 13,000 14,200 6,702
Repayment of loans and committed facilities (868) (355) (683)
------------- ------------- -----------
Net cash inflow / (outflow) from financing activities 6,725 5,427 (3,788)
------------- ------------- -----------
Net d ecrease in cash and cash equivalents (2,975) (2,720) (3,885)
Cash and cash equivalents at beginning of year 11,651 15,160 15,160
Effect of exchange rate fluctuations on cash held (72) (183) 376
------------- ------------- -----------
Closing cash and cash equivalents (note 15 ) 8,604 12,257 11,651
------------- ------------- -----------
Notes
to the Condensed Consolidated 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 2022 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 2022 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 2022 .
The comparative figures for the financial year ended 30th April
2022 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 19th December 2022 .
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 2022 , 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 IFRS 3 Business Combinations; IAS 16 Property,
Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and
Contingent Assets; and Annual Improvements 2018-2020 - (effective
for periods commencing on or after 1 st January 2022)
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 8 Accounting Policies, Changes in
Accounting Estimates and Errors 'Definition of Accounting
Estimates' - (effective for periods commencing on or after 1 st
January 2023, subject to UK endorsement).
-- 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 2023, subject to endorsement).
-- 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,
subject to UK endorsement).
-- 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,
subject to endorsement).
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 2022 .
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
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 (Mechanical) - casting, machining and general engineering
-- Refractory Engineering (Refractory) - powder manufacture and
mineral processing
Information regarding the Group's operating segments is reported
in the following tables .
6 . Operating segment revenue
Unaudited Unaudited Audited
Half Year to 31st October Half Year to 31st October Year ended 30th April
2022 2021 2022
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 70,276 40,039 110,315 49,747 34,443 84,190 105,389 72,026 177,415
Inter-segment
revenue (12,226) (8,754) (20,980) (8,203) (7,103) (15,306) (17,784) (15,523) (33,307)
----------------- ----------------- --------------- ----------------- ----------------- --------------- ----------------- ----------------- ---------------
External
revenue 58,050 31,285 89,335 41,544 27,340 68,884 87,605 56,503 144,108
----------------- ----------------- --------------- ----------------- ----------------- --------------- ----------------- ----------------- ---------------
7 . Operating segment profit
Unaudited Unaudited Audited
Half Y ear to 31st Half Year to 31st October Year ended 30th Apri
October 2022 2021 l 2022
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
-------------------- ----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Operating
profit 5,809 6,525 12,334 3,565 6,015 9,580 9,139 12,657 21,796
Share of
profit of
associate
companies -- 33 33 -- 33 33 -- 63 63
Group centre (2,501) (1,377) (3,489)
Group finance
costs
(net) (761) (513) (1,169)
Unrealised
gain on
10 year
interest
rate swap 3,132 -- 2,740
-------------- -------------- --------------
Consolidated
profit
before tax 12,237 7,723 19,941
Tax (3,157) (1,719) (6,321)
-------------- -------------- --------------
Consolidated
profit
after tax 9,080 6,004 13,620
-------------- -------------- --------------
8 . Operating segment assets and liabilities
Unaudited Unaudited Audited
Half Y ear to 31st Half Year to 31st October Year ended 30th Apri
October 2022 2021 l 2022
Mechanical Refractory Total Mechanical Refractory Total Mechanical Refractory Total
2022 2022 2022 2021 2021 2021 2022 2022 2022
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ----------------- ----------------- ---------------- ----------------- ----------------- --------------- ----------------- ----------------- ---------------
Total assets 106,141 50,968 157,109 104,014 46,094 150,108 93,049 48,843 141,892
Total
liabilities (82,797) (22,431) (105,228) (76,441) (18,376) (94,817) (71,950) (22,643) (94,593)
----------------- ----------------- ---------------- ----------------- ----------------- --------------- ----------------- ----------------- ---------------
Net assets -
reportable
segment net
assets 23,344 28,537 51,881 27,573 27,718 55,291 21,099 26,200 47,299
----------------- ----------------- ---------------- ----------------- ----------------- --------------- ----------------- ----------------- ---------------
Net assets -
Goodwin
PLC (the
Company) 85,411 75,450 88,595
Elimination of
Goodwin
PLC
investments (25,822) (25,822) (25,822)
Goodwill 9,591 9,730 9,671
---------------- --------------- ---------------
Consolidated
total
net assets 121,061 114,649 119,743
---------------- --------------- ---------------
9 . Operating segment capital expenditure, depreciation and amortisation
Unaudited Unaudited
Half Year to 31st October Half Year to 31st October
2022 2021
Mechanical Refractory Goodwin Total Mechanical Refractory Goodwin Total
PLC PLC
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ----------------- ----------------- -------------- ----------------- ----------------- ----------------- -------------- --------------
Capital
expenditure
on:
Property,
plant and
equipment 1,482 382 5,962 7,826 2,228 715 6,094 9,037
Right-of-use
assets 336 -- 768 1,104 -- -- 1,078 1,078
Intangible
assets 188 45 29 262 420 21 188 629
----------------- ----------------- -------------- ----------------- ----------------- ----------------- -------------- --------------
Total capital
expenditure 2,006 427 6,759 9,192 2,648 736 7,360 10,744
----------------- ----------------- -------------- ----------------- ----------------- ----------------- -------------- --------------
Depreciation
- property,
plant and
equipment 950 461 1,554 2,965 829 527 1,576 2,932
Depreciation
-
right-of-use
assets 171 147 324 642 159 140 157 456
Amortisation 26 74 510 610 21 220 506 747
Total 1,147 682 2,388 4,217 1,009 887 2,239 4,135
----------------- ----------------- -------------- ----------------- ----------------- ----------------- -------------- --------------
Audited
Year ended 30th April 2022
Mechanical Refractory Goodwin Total
PLC
GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ----------------- ----------------- -------------- ----------------- ----------------- ----------------- ------------------------------
Capital
expenditure
on
Property,
plant
and
equipment 5,396 1,631 9,326 16,353
Right-of-use
assets 2,401 881 441 3,723
Intangible
assets 1,121 429 237 1,787
----------------- ----------------- ----------------- ------------------------------
Total capital
expenditure 8,918 2,941 10,004 21,863
----------------- ----------------- ----------------- ------------------------------
Depreciation
- property,
plant
and
equipment 1,895 1,092 3,215 6,202
Depreciation
-
right-of-use
assets 305 294 593 1,192
Amortisation 47 330 1,180 1,557
Impairment -- -- 15 15
----------------- ----------------- ----------------- ------------------------------
Total 2,247 1,716 5,003 8,966
----------------- ----------------- ----------------- ------------------------------
10 . Geographical segments
Unaudited Unaudited
Half Year to 31st October 2022 Half Year to 31st October 2021
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 25,108 75,384 107,933 7,957 17,815 76,575 92,602 9,483
Rest of
Europe 13,360 9,096 3,981 385 9,212 8,069 3,878 926
USA 7,807 -- -- -- 6,159 -- -- --
Pacific
Basin 18,349 16,993 7,395 119 16,025 15,044 7,375 97
Rest of
World 24,711 19,588 10,489 731 19,673 14,961 9,298 238
-------------- -------------- ------------------ ------------------ -------------- -------------- ------------------ ------------------
Total 89,335 121,061 129,798 9,192 68,884 114,649 113,153 10,744
-------------- -------------- ------------------ ------------------ -------------- -------------- ------------------ ------------------
A udit e d
Y ear ended 3 0th April 2022
Revenue Net assets Non-current Capital
assets expendi
t ure
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- -------------- ----------------- ------------------ ---------------
UK 38,599 77,447 104,995 19,670
Rest of Europe 21,388 8,648 3,728 1,009
USA 14,046 -- -- --
Pacific Basin 31,085 15,867 6,703 278
Rest of Wo r ld 38,990 17,781 8,004 906
-------------- ----------------- ------------------ ---------------
Total 144,108 119,743 123,430 21,863
-------------- ----------------- ------------------ ---------------
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 2022 October 2021 2022
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 17,916 7,193 25,109 11,256 6,559 17,815 25,261 13,338 38,599
Rest of
Europe 9,322 4,038 13,360 5,327 3,885 9,212 13,304 8,084 21,388
USA 7,400 407 7,807 5,796 363 6,159 13,398 648 14,046
Pacific Basin 5,885 12,464 18,349 5,461 10,564 16,025 9,457 21,628 31,085
Rest of World 17,527 7,183 24,710 13,704 5,969 19,673 26,185 12,805 38,990
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Total 58,050 31,285 89,335 41,544 27,340 68,884 87,605 56,503 144,108
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Product lines
Standard
products and
consumables 7,222 31,285 38,507 5,105 27,340 32,445 12,155 56,503 68,658
Bespoke
engineered
products
- point in
time 17,468 -- 17,468 6,022 -- 6,022 9,992 -- 9,992
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Total point
in time
revenue 24,690 31,285 55,975 11,127 27,340 38,467 22,147 56,503 78,650
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Minimum
period
contracts
for goods
and services 2,252 -- 2,252 1,879 -- 1,879 3,804 -- 3,804
Bespoke
engineered
products
- over time 31,108 -- 31,108 28,538 -- 28,538 61,654 -- 61,654
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Total over
time revenue 33,360 -- 33,360 30,417 -- 30,417 65,458 -- 65,458
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
Total revenue 58,050 31,285 89,335 41,544 27,340 68,884 87,605 56,503 144,108
----------------- ----------------- -------------- ----------------- ----------------- -------------- ----------------- ----------------- --------------
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
2022 2021 2022
GBP'000 GBP'000 GBP'000
------------------------------------------ ------------------- ------------------- -----------------
Equity dividends paid during the
period:
Ordinary dividends paid in respect
of the year ended 30th April 2022
(53.90p per share) 4,145 -- --
Ordinary dividends paid in respect
of the year ended 30th April 2021
(102.24p per share) -- 7,862 7,862
------------------- ------------------- -----------------
Total 4,145 7,862 7,862
------------------- ------------------- -----------------
As noted in the Group Annual Accounts to 30th April 2022, the
dividend payments for the year ended 30th April 2022 are being paid
in two equal instalments, with the second payment due in April
2023.
13 . Earnings per share
Unaudited Unaudited Audited
as at as at as at
31st October 31st October 30th April
2022 2021 2022
Number of ordinary shares
------------------------------------------- -----------------------------------------------------------
Ordinary shares in issue
Opening balance 7,689,600 7,526,400 7,526,400
Shares issued in the period -- 163,200 163,200
------------------- ------------------- -----------------
Closing balance 7,689,600 7,689,600 7,689,600
------------------- ------------------- -----------------
Weighted average number of ordinary
shares in issue 7,689,600 7,689,600 7,673,951
------------------- ------------------- -----------------
GBP'000
-----------------------------------------------------------
Relevant profits attributable to
shareholders 8,761 5,546 12,980
------------------- ------------------- -----------------
14 . Property, plant and equipment and intangible assets
Unaudited Unaudited
Half Year to 31st October Half Year to 31st October
2022 2021
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 87,594 6,191 24,817 77,063 3,691 24,813
Additions 7,826 1,104 262 9,037 1,078 629
Disposals (at
net
book value) (46) -- -- (117) -- --
Transfers (306) 306 -- -- -- --
Depreciation (2,965) (642) -- (2,932) (456) --
Amortisation -- -- (610) -- -- (747)
Exchange
adjustment 1 (3) (89) (102) (37) (195)
---------------- ------------------- ----------------- ---------------- ------------------- -----------------
Net book
value at
the end of
the period 92,104 6,956 24,380 82,949 4,276 24,500
---------------- ------------------- ----------------- ---------------- ------------------- -----------------
The depreciation on right-of-use assets maybe be analysed as
follows:
Unaudited Unaudited
Half Year Half Year
to 31st to 31st
October October
2022 2021
GBP'000 GBP'000
--------------------------------------------------- ---------------- ----------------
Finance leases (former IAS 17 definition) 365 210
Operating leases (former IAS 17 definition) 277 246
---------------- ----------------
642 456
---------------- ----------------
15 . Cash and cash equivalents
Unaudited Unaudited Audited
as at as at as at
31st October 31st October 30th April
2022 2021 2022
GBP'000 GBP'000 GBP'000
--------------------------------------------- ------------------- ------------------- -----------------
Cash and cash equivalents per balance
sheet and cash flow statement 8,604 12,257 11,651
------------------- ------------------- -----------------
16 . Interest-bearing liabilities
Unaudited Unaudited Audited
as at as at as at
31st October 31st October 30th April
2022 2021 2022
GBP'000 GBP'000 GBP'000
---------------------------------------------- ------------------- ------------------- -----------------
Bank loans - repayable by instalments 1,058 833 1,005
Other loans -- -- 202
Lease liabilities 2,260 1,020 1,557
------------------- ------------------- -----------------
Due within one year 3,318 1,853 2,764
------------------- ------------------- -----------------
Bank loans - repayable by instalments 7,367 4,076 8,059
Bank loans - rolling credit facilities 41,000 40,000 28,000
Lease liabilities 4,675 2,977 4,317
------------------- ------------------- -----------------
Due after more than one year 53,042 47,053 40,376
------------------- ------------------- -----------------
Bank loans - repayable by instalments 8,425 4,909 9,064
Bank loans - rolling credit facilities 41,000 40,000 28,000
Other loans -- -- 202
Lease liabilities 6,935 3,997 5,874
------------------- ------------------- -----------------
Total 56,360 48,906 43,140
------------------- ------------------- -----------------
Former IAS 17 analysis of lease
liabilities
Finance leases 5,306 2,169 4,170
Operating leases 1,629 1,828 1,704
------------------- ------------------- -----------------
6,935 3,997 5,874
------------------- ------------------- -----------------
17 . Capital management
As at 31st October 2022 the capital utilised was GBP 162,925,000
, as shown below:
Unaudited Unaudited Audited
As at As at As at
31st October 31st October 30th April
2022 2021 2022
Note GBP'000 GBP'000 GBP'000
------------------------------------------- ----------- ------------------- ------------------- -----------------
Cash and cash equivalents 15 (8,604) (12,257) (11,651)
Bank loans and committed facilities 16 49,425 44,909 37,064
Other loans -- -- 202
Lease liabilities 16 6,935 3,997 5,874
------------------- ------------------- -----------------
Net debt in accordance with IFRS
16 47,756 36,649 31,489
Operating lease debt (former
IAS 17 definition) 16 (1,629) (1,828) (1,704)
------------------- ------------------- -----------------
Relevant net debt for KPI purposes 46,127 34,821 29,785
Total equity attributable to
equity holders of the parent 116,798 109,953 115,310
------------------- ------------------- -----------------
Capital 162,925 144,774 145,095
------------------- ------------------- -----------------
18 . 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 2022 . 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 844 -- -- 844
Other forward exchange
contracts -- 835 -- 835
Interest rate swap -- 5,872 -- 5,872
------------------- ------------------ ---------------- ---------------------
844 6,707 -- 7,551
------------------- ------------------ ---------------- ---------------------
Financial assets not measured
at fair value
Cash and cash equivalents -- -- 8,604 8,604
Contract assets -- -- 17,811 17,811
Trade receivables and other
financial
assets -- -- 30,341 30,341
Corporation tax receivable -- -- 1,339 1,339
------------------- ------------------ ---------------- ---------------------
-- -- 58,095 58,095
------------------- ------------------ ---------------- ---------------------
Financial liabilities
measured
at fair value
Forward exchange contracts
used
for hedging 7,077 -- -- 7,077
Other forward exchange
contracts -- 233 -- 233
------------------- ------------------ ---------------- ---------------------
7,077 233 -- 7,310
------------------- ------------------ ---------------- ---------------------
Financial liabilities not
measured
at fair value
Bank loans -- -- 49,425 49,425
Lease liabilities -- -- 6,935 6,935
Contract liabilities -- -- 19,462 19,462
Trade payables and other
financial
liabilities -- -- 18,722 18,722
Corporation tax payable -- -- 1,194 1,194
------------------- ------------------ ---------------- ---------------------
-- -- 95,738 95,738
------------------- ------------------ ---------------- ---------------------
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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END
IR DZMMZNLVGZZM
(END) Dow Jones Newswires
December 20, 2022 02:00 ET (07:00 GMT)
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