REG - 600 Group PLC - Interim Results
22/12/2022 07:00
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RNS Number : 5447K 600 Group PLC 22 December 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014, AS AMENDED (AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018).
22 December 2022
The 600 Group PLC
Unaudited Interim Results for the six months ended 30 September 2022
The 600 Group PLC ("the Group"), the 600 Group plc, the Industrial Laser
Systems Business (AIM: SIXH), today announces its unaudited interim results
for the six months ended 30 September 2022.
Financial Highlights
· Revenue up 12% to $17.0m (FY 22 H1: $15.2m)
· Net underlying* operating loss of $0.7m (FY 22 H1: profit $0.7m)
· Underlying* pre-tax loss of $0.8m (FY22 H1: profit $0.1m)
· Group net debt excluding lease liabilities was $2.5m as at 30
September 2022 (31 March 2022: $17.0m) with long-term borrowings paid down
from the sale of the Machine Tool Division
Strategic & Operational Highlights
· Completed the disposal of the Machine Tool division as the Group
refocused its strategy on the high-margin growth market of Industrial Laser
Systems
· Continued growth in the Laser Division with revenue up 12% on the
previous half year
o TYKMA Electrox has seen particularly strong growth with revenue up 20% as
it transitions from commodity products to higher-margin custom and
high-specification products
o CMS maintained its position despite not receiving any tablet drilling
machines during the previous year, making up the shortfall from other
activities and new market sectors
· Retained focus on R&D with development of new techniques and
technology; further updates to proprietary software with backward
compatibility options
· Good forward order book and enquiry pipeline; levels maintained at
$9.1m, excluding the large one-off $4.3m order for four tablet drillers in CMS
last year
*from continuing operations, before adjusting items.
Paul Dupee, Chairman of the Group, commented:
"The 600 Group has now completed its transformation to target the high-margin,
high-growth market of industrial laser systems. Our top-line results for the
first six months of the year were encouraging with double-digit revenue growth
and a particularly strong performance from TYKMA Electrox. This business is
progressing well in its transition to high-specification products with
improved margins, a key reason behind the Group's revised strategy.
"Like many engineering businesses, our profitability has been impacted by
supply issues and cost inflation resulting from the aftermath of the Covid
pandemic and conflict in Ukraine. However, we have taken a proactive approach
to manage our operations and expect the lingering issues from extended build
times to clear the system by the end of the financial year.
"The 600 Group is a streamlined business with a low debt profile, agile
operations and a large addressable market serving applications in key
industries of the future. With highly trusted technology solutions and a
strong order book, we remain well positioned to capture this market
opportunity."
Enquiries:
The 600 Group PLC Tel: +1-407-818-1123
Paul Dupee, Executive Chairman
Instinctif Partners Tel: 0207 457 2020
Tim McCall / Joe Quinlan
Cenkos Securities plc (Nominated Adviser and Broker) Tel: 020 7397 8900
Ben Jeynes / Max Gould (Corporate Finance)
Alex Pollen / Henry Nicol (Sales)
About The 600 Group PLC
The 600 Group PLC is focused on the delivery of Industrial laser systems which
cover laser marking and processing including cutting, drilling, ablation and a
host of other niche applications in the marking and micro machining sectors.
They require no consumables and can operate on a continuous high speed basis
and can be integrated into customers' production lines. The businesses have
their own technology and proprietary software. Customer applications are
diverse and range from aerospace to medical and pharmaceuticals. The
requirement for increased product and component traceability is one of the
market drivers.
More information on the Group can be viewed at: www.600group.com
(http://www.600group.com/)
The 600 Group Plc
Executive Chairman's Statement for the six months ended 30 September 2022
Overview
The six-month period ended 30 September 2022 began with the completion of the
sale of the Machine Tools Division for $21m on 11 April 2022 and the repayment
of all $19m of the Group's debt, including the loan notes.
The Laser Division has seen continued growth in this period with revenue up
12% on the previous half year and particularly good progress in the TYKMA
Electrox business which is up over 20%, as it continues the transition from
commodity product to custom and high specification. Order book levels have
been maintained, excluding the large one-off $4.3m order for four tablet
drillers in CMS last year, at $9.1m.
The Laser Division has not been immune from supply issues and labor and input
price increases during this period, as world economies react to the aftermath
of the Covid pandemic and the war in Ukraine, which has impacted margins and
overhead costs. Central costs have increased on the prior half year with
additional resources, including new websites and marketing for all activities,
deployed to help organic growth and the search for external synergistic
developments.
Results
Revenue was up 12% at $17.0m (FY 22 H1: $15.2m) with a net underlying
operating loss (excluding adjusting items) of $0.7m (FY 22 H1: profit $0.7m).
The Group benefitted from the repayment of debt at the start of the period
with interest on borrowings and leases falling from $0.6m in the prior six
month period to $0.1m, giving an underlying loss for the Group pre-tax, before
adjusting items, of $0.8m (FY22 H1: profit $0.1m) and a loss of $0.9m (FY 22
H1: profit $0.1m) after adjusting items.
The sale of the Machine Tools Division resulted in a profit of $0.9m, after
taking account of all costs related to the sale in the period, which is shown
in discontinued operations on the face of the Consolidated Income Statement.
There was no trading activity for the Machine Tool Division in this period as
the sale was effective as at 31 March 2022.
Basic loss per share on continuing operations was 1.15 cents (equivalent to
0.94p loss) per share (FY 21 H1: profit 0.14 cents (equivalent to 0.10p
profit). The underlying continuing earnings per share (excluding adjusting
items) was a 0.70c loss (equivalent to 0.57p loss) (FY 21 H1: profit 0.09c
(equivalent to 0.06p).
Given the continuing Global uncertainty, no dividend is proposed.
Financial Position
Inventory levels have increased to support the continued uplift in activity
but also as a result of supply issues where several months of critical
components have been bought forward to secure supply and also hedge against
price increases. In addition, the continual supply chain issues have extended
manufacturing times and increased work in progress with machines awaiting
components to be completed. Inventory overall has increase by $1.9m since 31
March 2022 to $10.0m.
Trade and other receivables have also seen an increase of $2.4m since 31 March
2021 to $9.0m. Whilst normal trade terms for Lasers, in particular on the
custom higher specification sales, usually benefit from a significant deposit
with order which helps to keep working capital lower, a number of orders were
taken during the pandemic in CMS with reduced margins and extended terms to
cover overheads and keep our skilled workforce together which, due to the long
lead times on manufacturing, are only just working through the system.
Trade and other payables have decreased in the period by $0.3m leaving the
overall working capital increase at $4.6m.
As a consequence of this working capital increase and the payment of costs
relating to the Machine Tools Division disposal of $1.3m, total net debt
excluding leases at 30 September 2022 was $2.5m against $17m at 31 March 2022
and $16.2m at 30 September 2021
Bank of America continue to be very supportive and have maintained a working
capital facilities totaling $7.5m with annual review in August 2023. The Group
remains covenant compliant.
Adjusting Items
Adjusting Items have been disclosed separately to provide a clearer picture of
the Group's underlying trading performance and are set out in note 4. The
amortisation of acquisition intangibles relating to the acquisition of CMS of
$0.2 has been recorded as an adjusting item in operating expenses. As the loan
notes were repaid at the start of the period the related costs of $0.4m which
were being amortised have been written off in the period in financial expense.
In the prior half year period as a consequence of the extension of the
repayment date of the loan notes a credit of $0.6m was recorded in financial
income in respect of the adjustment to the carrying value of the amortised
cost. The loan note amortization has also been recorded as an adjusting item.
The loan notes were repaid in full in April 2022.
Operating Activities
The Laser Division has continued to grow, particularly strongly in the TYKMA
Electrox business with the continued shift from commodity products to the
higher margin custom and high specification products. CMS has maintained its
position despite not receiving any tablet drilling machines during the
previous year. This type of pharmaceutical business is particularly lumpy in
nature but the operation had made up the shortfall from other activities and
new market sectors.
The division continues to be forced to buy forward several months of critical
components to secure supply and also hedge against price increases. Supply
chain issues with delays in receiving components, particularly in the micro
processing sector, have resulted in extended manufacturing times with
re-designed products and increased work in progress as machines await
component deliveries.
Input costs of materials and labor have both increased, driven by market
forces. Whilst sale price increases are being implemented, a number of orders
taken by CMS during the pandemic were taken at marginally profitable levels in
order to keep the shop working and preserve our skilled workforce. Whilst the
government assistance helped during the pandemic period, due to the extended
build times on many of these products they are only now being completed which
is depressing gross margins in this business. These products will clear the
system by the end of the financial year. In addition to lower margins,
extended credit terms were also given to customers which has resulted in
increased receivables. Once again, these non-standard terms will have worked
through the system by the end of the financial year.
The development of new techniques and technology is forefront to the Division
and the Group has continued to update its proprietary software with backward
compatibility options. This development drive is supported by both internal
R&D and the search for appropriate bolt on acquisitions.
The results of the Division were as follows:
FY23 H1 FY22 H1
$m $m
Revenues 17.0 15.2
Operating profit* 1.15 1.79
Operating margin* 6.8% 11.8%
*from continuing operations, before adjusting items.
Summary and Outlook
The Group continued to grow and invest in its businesses in this first six
months of the financial year and has a good order book and enquiry pipeline
going into the second half of the year. Whilst the lingering effects of work
taken during the pandemic will impact CMS in the short term, the de-risking of
the Group, both operationally and financially, as a result of the Machine Tool
Division sale has created a leaner and more focused technology Group.
Whilst there will continue to be concerns over a recession, COVID variants and
supply chain disruption, given the continuing good orderbook activity and
backlog and the move to higher specification and custom products, the Board
believes the Group is more resilient to market changes and this strategy will
lead to improved shareholder value in the future.
Paul Dupee
Executive Chairman
22 December 2022
The 600 Group Plc
Condensed consolidated income statement (unaudited)
For the 26 week period ended 30 September 2022
Restated
Before After Before After
Adjusting Adjusting Adjusting Adjusting Adjusting Adjusting
Items Items Items Items Items Items
26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended ended ended
30 September 30 September 30 September 30 September 30 September 30 September 31 March
2022 2022 2022 2021 2021 2021 2022
$000 $000 $000 $000 $000 $000 $000
Continuing
Revenue 17,038 - 17,038 15,194 - 15,194 31,960
Cost of sales (10,149) - (10,149) (8,729) - (8,729) (18,490)
Adjusting items in cost of sales - - - - (74) (74) 76
Gross profit 6,889 - 6,889 6,465 (74) 6,391 13,546
Net operating expenses (7,604) - (7,604) (5,801) - (5,801) (11,622)
Adjusting Items in operating expenses - (174) (174) - (149) (149) (707)
Operating profit/(loss) (715) (174) (889) 664 (223) 441 1,217
Loan note amortisation adjustment - (462) (462) - 556 556 556
Bank and other interest (71) - (71) (502) - (502) (992)
Interest on lease liabilities (31) - (31) (53) - (53) (89)
Loan note amortisation - - - - (370) (370) (530)
Financial expense (102) (462) (564) (555) 186 (369) (1,055)
(Loss)/Profit before tax (817) (636) (1,453) 109 (37) 72 162
Income tax (charge)/credit (4) 108 104 (6) 104 98 322
(Loss)/Profit for the period on continuing activities (821) (528) (1,349) 103 67 170 484
Profit on discontinued operations - 886 886 431 1,182 1,613 785
(Loss)/Profit for the period (821) 358 (463) 534 1,249 1,783 1,269
Continuing EPS (0.70c) (1.15c) 0.09c 0.14c 0.41c
Continuing Diluted (0.70c) (1.15c) 0.09c 0.14c 0.40c
Basic EPS (0.70c) (0.39c) 0.45c 1.52c 1.08c
Diluted EPS (0.70c) (0.39c) 0.45c 1.49c 1.06c
Condensed consolidated statement of comprehensive income (unaudited)
For the 26 week period ended 30 September 2022
26 weeks 26 weeks 52 weeks
Ended Ended Ended
30 September 30 September 31 March
2022 2021 2022
$000 $000 $000
Profit/(Loss) for the period (463) 1,783 1,269
Other comprehensive (expense)/income:
Items that will not be reclassified to the Income Statement:
Re-measurement of the net defined benefit asset - - (349)
Deferred taxation - - 106
Total items that will not be reclassified to the Income Statement: - - (243)
Items that are or may in the future be reclassified to the Income Statement:
Foreign exchange translation differences (305) 205 903
Total items that are or may be reclassified subsequently to the Income (305) 205 903
Statement:
Other comprehensive income/(expense) for the period, net of income tax (305) 205 660
Total comprehensive income/(expenses) for the period (753) 1,988 1,929
Condensed consolidated statement of financial position (unaudited)
As at 30 September 2022
As at As at As at
30 September 30 September 31 March
2022 2021 2022
$000 $000 $000
Non-current assets
Property, plant and equipment 1,827 2,918 1,842
Goodwill 13,174 13,174 13,174
Other Intangible assets 2,202 3,561 3,189
Deferred tax assets 299 4,140 236
Right of use assets 1,205 8,252 1,473
18,707 32,045 19,914
Current assets
Inventories 9,956 23,306 8,041
Trade and other receivables 8,981 9,791 6,587
Taxation 278 - 291
Deferred tax assets 99 809 99
Assets held for sale - - 31,954
Cash and cash equivalents 436 2,072 207
19,730 35,978 47,179
Total assets 38,437 68,023 67,093
Non-current liabilities
Employee benefits - (1,090) -
Loans and other borrowings - (12,040) (11,639)
Government Loans - (1,616) -
Lease Liabilities (809) (7,139) (1,081)
Provisions (92) (203) (174)
(901) (22,088) (12,894)
Current liabilities
Trade and other payables (5,997) (10,559) (6,227)
Lease Liabilities (486) (1,471) (486)
Taxation - (368) -
Provisions (178) (201) (178)
Liabilities held for sale - - (13,777)
Government Loans - (2,234) -
Loans and other borrowings (2,967) (2,398) (4,871)
(9,628) (17,231) (25,539)
Total liabilities (10,529) (39,319) (38,433)
Net assets 27,908 28,704 28,660
Shareholders' equity
Called-up share capital 1,807 1,803 1,803
Share premium account 3,828 3,828 3,828
Equity reserve 201 201 201
Translation reserve (6,018) (6,411) (5,713)
Retained earnings 28,090 29,283 28,541
Total equity 27,908 28,704 28,660
Consolidated statement of changes in equity (unaudited)
As at 30 September 2022
Ordinary Share
share premium Translation Equity Retained
capital account reserve reserve Earnings Total
$000 $000 $000 $000 $000 $000
At 31 March 2021 1,803 3,828 (6,616) 201 27,462 26,678
Profit for the period - - - - 1,783 1,783
Other comprehensive income:
Foreign currency translation - - 205 - - 205
Total comprehensive income - - 205 - 1,783 1,988
Transactions with owners:
Credit for share-based payments - - - - 38 38
Total transactions with owners - - - - 38 38
At 30 September 2021 1,803 3,828 (6,411) 201 29,283 28,704
Loss for the period - - - - (514) (514)
Other comprehensive income:
Foreign currency translation - - 698 - - 698
Net defined benefit movement - - - - (349) (349)
Deferred tax - - - - 106 106
Total comprehensive income - - 698 - (757) (59)
Transactions with owners:
Credit for share-based payments - - - - 15 15
Total transactions with owners - - - - 15 15
At 31 March 2022 1,803 3,828 (5,713) 201 28,541 28,660
loss for the period - - - - (463) (463)
Other comprehensive income:
Foreign currency translation - - (305) - - (305)
Total comprehensive income - - (305) - (463) (768)
Transactions with owners:
Issue of shares (employee options) 4 - - - - 4
Credit for share-based payments - - - - 12 12
Total transactions with owners 4 - - - 12 16
At 30 September 2022 1,807 3,828 (6,018) 201 28,090 27,908
Condensed consolidated cash flow statement (unaudited)
For the 26 week period ended 30 September 2022
26 weeks ended 26 weeks ended 52 weeks ended
30 September 30 September 31 March
2022 2021 2022
$000 $000 $000
Cash flows from operating activities
Profit/(loss) for the period (463) 1,783 1,269
Adjustments for:
Amortisation of intangible assets 174 207 251
Depreciation 295 383 783
Depreciation of IFRS16 Right of use assets 268 637 1,312
Net financial expense/(income) 102 527 1,371
PPP Funding forgiven - - (2,297)
Non-cash adjusting items 636 74 406
(Profit)/loss on disposal of fixed assets/ assets held for sale (886) 19 -
Equity share option expense 12 38 53
Income tax expense/(credit) (104) (1,089) 243
Operating cash flow before changes in working capital and provisions 34 2,579 3,391
(Increase) /decrease in trade and other receivables (2,394) (1,280) (3,944)
(Increase)/decrease in inventories (1,915) (5,519) (3,801)
(Decrease)/increase in trade and other payables (321) 2,274 2,915
Employee benefit contributions - (60) (60)
Cash generated from/(used in) operations (4,596) (2,006) (1,499)
Interest paid (71) (535) (1,069)
Lease interest (53) (185) (311)
Net cash flows from operating activities (4,720) (2,726) (2,879)
Cash flows from investing activities
Interest received - 7 24
Proceeds net of costs from sale of net Assets held for sale / property 20,042 - 225
Purchase of property, plant and equipment (181) (531) (780)
Development expenditure capitalised - (58) (54)
Net cash from investing activities 19,861 (582) (585)
Cash flows from financing activities
Proceeds from/(Net repayment of) external borrowing (14,104) 1,096 1,037
Government assistance loans (1,563) - -
IFRS 16 Lease payments (295) (586) (1,460)
Net cash flows from financing activities (15,962) 510 (423)
Net increase/(decrease) in cash and cash equivalents (821) (2,798) (3,887)
Cash and cash equivalents at the beginning of the period 1,291 4,997 4,997
Effect of exchange rate fluctuations on cash held (34) (127) 181
Cash and cash equivalents at the end of the period 436 2,072 1,291
The consolidated cashflow includes all activity relating to continuing and
discontinued activity
Cash in discontinued entities (assets held for
sale)
1,084
Cash in continuing
entities
207
Cash and cash equivalents at the end of the
period
1,291
Notes relating to the condensed consolidated financial statements
For the 26-week period ended 30 September 2022
1. Basis of preparation and accounting policies
These interim consolidated financial statements have been prepared using
accounting policies based on International Financial Reporting Standards in
conformity with the requirements of the Companies Act 2006. They do not
include all disclosures that would otherwise be required in a complete set of
financial statements and should be read in conjunction with the 31 March 2022
Annual Report. The financial information for the half years ended 30 September
2022 and 30 September 2021 does not constitute statutory accounts within the
meaning of Section 434 (3) of the Companies Act 2006 and both periods are
unaudited.
The annual financial statements of The 600 Group plc
('the Group') are prepared in accordance with International accounting
standard in conformity with the requirements of the Companies Act 2006. The
comparative financial information for the year ended 31 March 2022 included
within this report does not constitute the full statutory Annual Report for
that period. The statutory Annual Report and Financial Statements for 2022
have been filed with the Registrar of Companies. The Independent Auditors'
Report on the Annual Report and Financial Statements for the year ended 31
March 2022 was unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under 498(2) - (3) of the Companies
Act 2006.
The Group has applied the same accounting policies and
methods of computation in its interim consolidated financial statements as in
its 2022 annual financial statements.
2. SEGMENT ANALYSIS
IFRS 8 - "Operating Segments" requires operating segments to be identified on
the basis of internal reporting about components of the Group that are
regularly reviewed by the Board to allocate resources to the segments and to
assess their performance.
The chief operating decision maker has been identified as the Board.
The Board consider there to be one operating segment being industrial laser
systems with the Machine Tool Division being discontinued following the sale
agreed in March 2022.
The Board assess the performance of the operating segments based on a measure
of operating profit/(loss). This measurement basis excludes the effects of
Special Items from the operating segments. Head Office and unallocated
represent central functions and costs.
The following is an analysis of the Group's revenue and results by reportable
segment:
26 Weeks ended 30 September 2022 Industrial Head Office
Laser & unallocated
Systems
Group Total
Segmental analysis of revenue $000 $000 $000
Total revenue 17,038 - 17,038
Operating profit/(loss) pre- adjusting items 1,151 (1,866) (715)
Adjusting items - (174) (174)
Group operating profit/(loss) 1,151 (2,040) (889)
Other segmental information:
Reportable segment assets 20,919 17,838 38,757
Reportable segment liabilities (6,127) (4,402) (10,529)
Intangible & Property, plant and equipment additions 180 - 180
Depreciation and amortisation 503 234 737
Continuing Discontinued
Industrial laser systems Head Office Total Machine Group
Twenty six weeks ended 30 September 2021 & unallocated tools Total
& precision
engineered
components
Segmental analysis of revenue $000 $000 $000 $000 $000
Total revenue 15,194 - 15,194 18,806 34,000
Segmental analysis of operating profit/(loss) before Adjusting Items 1,791 (1,127) 664 780 3,756
Adjusting Items (74) (149) (223) - (223)
Group operating profit/(loss) 1,717 (1,276) 441 780 1,221
Other segmental information:
Reportable segment assets 19,745 16,651 36,396 31,627 68,023
Reportable segment liabilities (8,515) (20,759) (29,274) (10,045) (39,319)
Fixed asset additions 478 71 549 40 589
Depreciation and amortisation 505 225 730 497 1,227
Continuing Discontinued
Industrial laser systems Head Office Total Machine Group
Year ended 31 March 2022 & unallocated tools Total
& precision
engineered
components
Segmental analysis of revenue $000 $000 $000 $000 $000
Total revenue 31,960 - 31,960 37,024 68,984
Segmental analysis of operating profit/(loss) before Adjusting Items 4,109 (2,261) 1,848 1.908 3,756
Adjusting Items 76 (707) (631) (242) (873)
Group operating profit/(loss) 4,185 (2,968) 1,217 1,666 2,883
Other segmental information:
Reportable segment assets 20,466 14,673 35,139 31,954 67,093
Reportable segment liabilities (9,040) (15,475) (24,515) (13,777) (38,292)
Fixed asset additions 577 33 610 169 780
Depreciation and amortisation 924 446 1,370 976 2,346
3. NET operating expenses
30 September 2022 30 September 2021 31 March 2022
$000 $000 $000
- government assistance - - 1,451
Total other operating income - - 1,451
30 September 2022 30 September 2021 31 March 2022
$000 $000 $000
- administration expenses 7,604 5,801 13,073
Total operating expenses 7,604 5,801 13,073
Total net operating expenses 7,604 5,801 11,622
4. Adjusting ITEMS
The directors have highlighted transactions which are material and unrelated
to the normal trading activity of the Group.
In the opinion of the directors the disclosure of these transactions should be
reported separately for a better understanding of the underlying trading
performance of the Group. These underlying figures are used by the Board to
monitor business performance, form the basis of bonus incentives and are used
for the purposes of the bank covenants.
The items below correspond to the table below;
a) A charge of $0.07m was expensed in cost of sales relating to US
duty and tariff charges from prior year in the six months to September 2021
which was cancelled in the second half of the year.
b) The amortisation of the loan note costs and associated costs are
shown in financial expense. These are non cash movements and relate to the
discounting of the loan notes and associated costs which unwind over the term
of the notes. In the current period as a result of the repayment of the loan
notes the remaining costs have been expensed.
c) Amortisation of intangible assets, including customer
relationships, acquired through the Control Micro Systems Inc deal.
30 September 2022 30 September 2021 31 March
2022
$000 $000 $000
Items included in cost of sales:
US Tariffs & Duty charges relating to prior years (a) - (74) 76
- (74) 76
Items included in operating profit:
Costs relating to disposal of machine tool Division - 23 (364)
Amortisation of acquisition intangibles (c) (174) (172) (343)
(174) (149) (707)
Items included in financial income/(expense):
Amortisation of loan notes and associated expenses (b) (462) (370) (530)
Loan note credit on extension of repayment date (b) - 556 556
Total adjusting items before tax (636) (37) (605)
Income tax on adjusting items 108 104 -
Total adjusting items after tax (528) 67 (605)
5. Financial income and expensE
30 September 2022 30 September 2021 31 March
2021
$000 $000 $000
Bank overdraft and loan interest (43) (12) (77)
Other loan interest (28) (489) (914)
Finance charges on finance leases - (1) (1)
Lease interest (31) (53) (89)
Financial expense before adjusting items (102) (555) (1,081)
Amortisation of loan note costs (462) (370) (530)
Loan note credit on extension of repayment date - 556 556
Financial expense (564) (369) (1,055)
6. Taxation
30 September 30 September 31 March
2022 2021 2022
$000 $000 $000
Current tax:
Corporation tax at 25% (2021: 19%): prior year - - 283
Overseas taxation:
- current period (4) (6) 8
Total current tax charge (4) (6) 291
Deferred taxation:
- current period 108 - 31
- effect of rate change in UK - 104 -
Total deferred taxation credit 108 104 31
Taxation credit to the income statement 104 98 322
7. Earnings per share
The calculation of the basic earnings per share of a loss after discontinued
activities of 0.39c (2021 HY: profit 1.52c) is based on the earnings for the
financial period attributable to the Parent Company's shareholders of a loss
of $463,000 (2021 HY: profit $1,783,000) and on the weighted average number of
shares in issue during the period of 117,762,521 (2021 HY: 117,473,341). At 30
September 2022, there were 3,300,000 (2021 HY: 3,790,000) potentially dilutive
shares (share options or warrants with a price below the average price for the
period) with a weighted average effect of 2,088,927 shares (2021 HY:
2,100,375) giving a diluted earnings per share of loss 0.39c (2021 HY: profit
1.49c). In accordance with IAS 33 - Earnings per Share, the Group shows no
dilutive impact in respect of its share options as their conversion to
ordinary shares would decrease the loss per share from continuing operations.
30 September 30 September 31 March
2022 2021 2022
Weighted average number of shares Shares Shares Shares
Issued shares at start of period 117,473,341 117,473,341 117,473,341
Weighted average number of shares at end of period 117,762,521 117,473,341 117,473,341
Weighted average number of potentially dilutive shares 2,088,927 2,100,375 2,496,578
Total Weighted average diluted shares 119,851,448 119,573,3716 119,969,919
30 September 2022 30 September 2021 31 March 2022
$000 $000 $000
Total post tax earnings- continuing operations (1,349) 170 484
Total post tax earnings- including discontinued operations (463) 1,783 1,269
Basic EPS - continuing operations (1.14c) 0.14c 0.41c
Diluted EPS -continuing operations (1.14c) 0.14c 0.40c
Total including discontinued operations
Basic EPS (0.39c) 1.52c 1.08c
Diluted EPS (0.39c) 1.49c 1.06c
$000 $000 $000
Underlying
earnings
Total post tax earnings - continuing operations (1,349) 170 484
Adjusting items - per note 4 (528) 67 605
Underlying earnings after tax (821) 103 1,089
Underlying basic EPS (0.70c) 0.09c 0.93c
Underlying diluted EPS (0.70c) 0.09c 0.91c
8. RECONCILIATION OF NET CASH FLOW TO NET DEBT
30 September 2022 30 September 2021 31 March 2022
$000 $000 $000
Increase/(decrease) in cash and cash equivalents (821) (2,798) (3,887)
decrease/(Increase) in debt and finance leases 15,478 (325) 734
decrease/(Increase) in net debt from cash flows 14,657 (3,123) (3,153)
Net debt at beginning of period (24,862) (21,991) (21,991)
Lease liabilities ( increase)/ decrease 5,795 (199) (118)
Loan note amortization - 181 (530)
Loan note adjustments 462 - 511
Exchange effects on net funds 122 306 419
Net debt at end of period (3,826) (24,826) (24,862)
9. Analysis of net DEBT
Held for Sale Continuing
Total Group
At At At
31 March 31 March 31 March Exchange 30 September
2022 2022 2022 movement Other Cash flows 2022
$000 $000 $000 $000 $000 $000 $000
Cash at bank and in hand 1,084 76 1,160 (15) - (821) 324
Short term deposits - 131 131 (19) - - 112
1,084 207 1,291 (34) - (821) 436
Debt due within one year (196) (4,870) (5,066) - - 2,099 (2,967)
Debt due after one year (6) (921) (927) - - 927 -
Government assistance loans (1,580) (1,580) 17 - 1,563 -
Loan Notes - (10,718) (10,718) 102 (462) 11,078 -
Lease liabilities (6,294) (1,568) (7,862) 37 6,257 273 (1,295)
Total (6,992) (17,870) (24,862) 122 5,795 15,119 (3,826)
10. FAIR VALUE
The group considers that the carrying amount of the following financial assets
and financial liabilities are
a reasonable approximation of their fair value:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Loans and other borrowings
11. Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Group remain those set out
in the 2022 Annual Report. Those which are most likely to impact the
performance of the Group in the remaining period of the current financial year
are the continuing issues surrounding the COVID-19 pandemic and the possible
recession which may result in exposure to increased input costs, supply chain
and delivery issues and a downturn in its customers' end markets, particularly
in North America and Europe.
12. Disposal of Machine Tools Division
On 5 March 2022, the 600 Group signed a contract with Timesavers Acquisitions
LLC to sell its Machine Tool Division. This sale included the following legal
entities: (a) Colchester GmbH, a private company with limited liability
organized under the Legal Requirements of Federal Republic of Germany, (b) 600
UK Limited (registered number 144979), a private limited company organized
under the Legal Requirements of England and Wales, (c) 600 Machine Tools Pty
Ltd. (ACN 000161106), a proprietary company organized under the Legal
Requirements of Australia, and (d) Clausing Industrial, Inc., a Delaware
corporation.
The price agreed for the transaction was $21m. While the contract was signed
in early March 2022, the completion date and collection of funds happened on 8
and 11 April 2022. The agreement included two escrow accounts of which the
Retention escrow of $0.15m remains outstanding. The working capital escrow was
repaid during the period to 30 September 2022 and an additional amount in
respect of settlement of the agreed working capital adjustment is due to the
Group within the next few weeks of $650,000.
With the contract signed before 31 March 2022 and the deal closing after this
date, the accounts to 31 March 2022 reflected the profitability of the Machine
Tool Division as "discontinued operations". The 600 Group consolidated balance
sheet at 31 March 2022 reflected the entities to be sold as "Assets held for
sale" and "liabilities held for sale". The sale of this division has been
recognized in these financial statements to 30 September 2022 with a profit of
$886,000 after associated costs in adjusting items profit on discontinued
operations. There is no trading activity for the Machine Tools Division in the
current period as the sale agreement was effective as at 31 march 2022.
There was no adjustment for impairment to the value of the assets transferred
to held for sale in the year ended 31 March 2022.
As noted in this report, with the proceeds of the sale, all debt of the 600
Group was repaid on 11 April 2022. After paying the loan notes, the HSBC loans
in the UK and all remaining loans with Bank of America in the US, the Group
continues to benefit from a revolving credit line of $7.5m with Bank of
America.
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