REG - Autins Group PLC - Full Year Results
04/03/2024 07:15
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RNS Number : 3619F Autins Group PLC 04 March 2024
4 March 2024
Autins Group plc
(the "Company" or the "Group")
Full Year Results
Autins Group plc (AIM: AUTG), the UK and European manufacturer of the patented
Neptune melt-blown material and specialist in the design, manufacture and
supply of acoustic and thermal insulation solutions, announces its results for
the financial year ended 30 September 2023.
Financial Summary
· Revenue increased by 20.2% to £22.7 million (FY22: £18.9
million)
· Gross profit increased by 57.8% to £6.7 million (FY22: £4.2
million)
· Gross margin increased by 7.1% to 29.5% (FY22: 22.4%)
· EBITDA increased by £2.3m to £1.2 million (FY22: loss of £1.1
million)
· Operating loss decreased to £0.7 million (FY22: loss of £3.0
million)
· Loss after tax decreased to £0.9 million (FY22: loss of £3.3
million)
· Loss per share decreased to 1.67p (FY22: loss of 6.34p)
· Net cash inflow from operating activities increased to £2.1
million (FY22: £0.5 million net outflow)
· Net debt 1 (#_ftn1) decreased to £1.6 million (FY22: £2.0
million)
· Cash and cash equivalents increased to £2.1 million (FY22: £1.8
million)
· Group cash headroom 2 (#_ftn2) increased to £4.1m (FY22:
£3.5m)
Operational Highlights
· 11 new customer wins; 6 in the UK and Sweden and 5 in Germany,
including supply into the all-electric Nissan Leaf, various JLR vehicles,
Fisker Ocean, Lamborghini and several tiers
· Successfully launched our new 100% recyclable Neptune-R material,
which has already generated strong customer interest
· Achieved an 88% reduction in carbon emissions across the Group by
converting to renewable energy sources and improving efficiencies in the
plants, surpassing the 84% target
· Continued improvement in cost control as a result of staff
restructuring actions and labour productivity gains
· Significantly reduced staff churn to below 10%, fostering
stability and a highly engaged workforce
· Customer contracts and price and material improvements have
concluded and are having positive effects
· Exciting product development pipeline and recent product launches
signalling future growth opportunities
Outlook
· The Company has announced today the appointment of Andrew ('Andy')
Bloomer as Chief Executive Officer with effect from 22 April 2024. Gareth
Kaminski-Cook will step down from the Board and his role of CEO at the same
time
· The Company has seen further growth in sales and EBITDA in Q1 FY24
and expects its operating performance to continue to stabilise in FY24 despite
the risk of some fluctuations in model level volumes
· The Company intends to invest in its sales, marketing and R&D
capabilities during FY24, to further embed the Company into its customers'
supply chains, and to ensure it is well positioned to take advantage of the
improving automotive backdrop
· Post year end, we have obtained further banking support from both of
our major lenders, with revised covenants and repayment profiles agreed with
both
Gareth Kaminski-Cook, Chief Executive, said:
"The Group has navigated its way through a turbulent few years and is now on
an upward trajectory, delivering a stronger financial performance during 2023.
With an overall improvement in the automotive market, we will continue to
focus on developing our commercial capability to deliver sales growth and
maximise the opportunity we have with our Neptune-R material, especially in
electric vehicles. I am delighted to be handing over to Andy Bloomer who
brings a very deep knowledge of the automotive industry and has a very strong
commercial background. It has been a great honour to lead the Group over the
past 5 years and I am confident that Andy will successfully deliver Autins'
next stage of sales led growth"
For further information please contact:
Autins Group plc
Gareth Kaminski-Cook, Chief Executive Via SEC Newgate
Kamran Munir, CFO
Singer Capital Markets Tel: 020 7496 3000
(Nominated Adviser and Broker)
James Moat / Asha Chotai
SEC Newgate Tel: 020 7653 9850
(Financial PR)
Bob Huxford
Molly Gretton
About Autins
Autins is a UK and continental Europe based industrial materials technology
business that specialises in the design, manufacture, and supply of acoustic
and thermal products. Its key markets are automotive, flooring, office
furniture and commercial vehicles where it supplies products and services to
more than 160 customer locations across Europe.
Autins is the UK and European manufacturer of the patented Neptune melt-blown
material and specialises in the design, manufacture, and supply of acoustic
and thermal insulation solutions.
Chairmans Statement
Overview
FY23 has been a transitional year in which the Group has moved from a
significant EBITDA loss to a positive EBITDA position. We have improved our
commercial terms with our customers and focused on improving our operating
performance, with a particular focus on better sourcing of raw materials and
improved labour efficiencies in our production activities.
The overall trading environment is increasingly positive with European OEMs
reporting increased production of vehicles and a reduction in supply chain
disruptions. This is much welcomed after the key component shortages and
uncertainty of recent years. It provides a much more stable footing for the
Group to invest and grow. We benefitted from 11 new customer wins during
FY23.
Over the year, we have made notable progress in many areas; we have been able
to invest in new machinery, resume capital repayments of our CBILS loan and
change and expand the composition of our Board. Further, the Group has focused
on measuring and improving its environmental impacts with some notable
success.
Financial performance
Group sales in the second half of the year were £11.9m, up 26% on the
equivalent prior year period (H2 22: £9.5m). Overall Group sales for FY23
increased by 20% to £22.7m (FY22: £18.9m).
Group automotive component sales grew by 31% in the year to £19.9m (FY22:
£15.2m). It was pleasing to see this growth across all of our geographies
with the UK up 26%, Sweden up 23% and Germany up 55% (assisted by a full year
effect of prior year new business wins). However, negative sentiment in the
flooring market in Germany continued, albeit we still saw overall sales growth
in that region of 14% to £7.5m (FY22: £6.6m).
Gross margin recovered to 29.5% (FY22: 22.4%) due to a combination of better
commercial terms with our customers and continued focus on manufacturing
efficiencies.
The operating loss for the Group has reduced to £0.7m (FY22: loss of £3.0m).
Net debt (excluding IFRS 16 debt) decreased to £1.6m (FY22: £2.0m) and cash
and cash equivalents increased to £2.1m (FY22: £1.8m). This is due to the
business generating net operating cash of £2.1m (FY22: net operating cash
loss of £0.5m) driven by the Group's improved operating performance and
positive working capital management in the period.
We recommenced repayments of our CBILS loan in July 23 and, post year end, we
have obtained further banking support from both of our major lenders, with
revised covenants and repayment profiles agreed with both.
People
Our staff have yet again demonstrated their unwavering commitment and
enthusiasm for the business. They have reacted well to the increased activity
within the business and continue to challenge costs and strive for more
efficiency. I would like to thank them all for their hard work during the
year.
In May 2023, we appointed Andrew Burn to the Board as a Non-Executive Director
to replace Neil MacDonald, who stepped down in June 2023. Furthermore, after
the year end, we appointed Mark Taylor as a Non-Executive Director. Both
Andrew and Mark bring significant new skills and experience to the Board which
will strongly support the business in our strategic delivery.
We have also announced today the appointment of Andrew ('Andy') Bloomer as
Chief Executive Officer with effect from 22 April 2024. Gareth Kaminski-Cook
will step down from the Board and his role of CEO at the same time.
Andy brings extensive experience of the European automotive manufacturing
industry, particularly with electric vehicles and specialist fibre
applications, having most recently held the role of Sales & Marketing
Director EMEA at London-listed Morgan Advanced Materials plc. Andy's very
relevant industry experience and commercial focus will enable us to maximise
the increasing opportunities that we are currently seeing in the automotive
market and accelerate our growth.
I would like to thank Gareth personally and on behalf of the Board for his
dedicated service over the past five years, resulting in the start of the
recovery of the business over the past 12 months. We all wish Gareth well in
the future.
Environmental, Social and Governance
Our commitment to lower the environmental impact of our products has continued
in FY23. Our investment in R&D enabled us to launch our new recyclable
Neptune-R material during the period. This has generated strong interest
from our customers, where the material has already achieved the highest
performance rating approval by one major OEM, and others have partnered with
us to develop new thermal ducting products. We also believe that our products
can support the thermal efficiency of the cabins of vehicles which would have
a beneficial impact for electric vehicles in reducing power loss to heating of
the cabin to the detriment of range.
We have dedicated more time to understanding our environmental impact as a
business and considering how we can seek to continuously improve such impact
going forward. We have reduced our carbon footprint significantly in the year
by changing our energy sourcing from 27% to 100% renewable sources in both the
UK and Germany. We will continue to focus on reducing overall energy used
through on-going operational efficiency improvements.
During the year, through our operational improvement programme, we were
successful in recalibrating our Neptune production line to reduce off-cut
waste. This contributed to a 64% reduction in waste year on year. We will
continue to challenge ourselves to reduce our environmental impact in all
aspects of our operations.
The Board remains committed to robust corporate governance and risk management
to ensure the delivery of our strategic ambitions and the financial health of
the Group. We apply the Quoted Companies Alliance Corporate Governance Code
(the "QCA Code"). Since November 2023, the Board has increased to three
independent non-executive directors in line with QCA Code guidelines.
Outlook
The automotive market appears to be stabilising after a number of years of
turbulence and uncertainty. This should support the Group in delivering
further growth in sales and profitability, a trend that has continued into Q1
FY24. However, we anticipate that profitability in H2 FY24 will be affected
by plans to invest in sales, marketing and R&D, together with meeting
statutory increases in salary costs.
Our focus now is to develop our commercial capability to deliver sales growth
and embed Neptune-R material with our customer base, especially in electric
vehicles. We will seek to leverage our technical capabilities to engineer
innovative solutions for our customers and embed ourselves further into their
supply chain. We will also continue to invest in new product development.
Overall, the Board believes that the Group will continue to stabilise its
operating performance in FY24, despite the risk of some fluctuations in model
level volumes. However, the increasing level of opportunities that we are
seeing in the automotive market provide optimism for future sales growth.
Adam Attwood
Chairman
Chief Executive Officer's review
Automotive sales growth, margin recovery and new sustainable materials
The Group has delivered a much-improved financial performance this year and
continued to build its credentials as an agile engineering problem solver that
specialises in providing innovative thermal and acoustic solutions for
electric vehicles using sustainable materials.
With great patience and support from our shareholders, outstanding cooperation
and understanding of our customers and exceptional commitment and hard work
from the Autins team, we have transitioned from survival to growth, and this
has flowed through to an EBITDA improvement of £2.3m in the year.
Automotive sales growth Neptune sales growth
31% 35%
100% recyclable Neptune(TM)-R launched 11 new automotive customers
Thermal and acoustic solutions that contribute to a quieter, cleaner and more
energy-efficient world.
We are acoustic and thermal specialists and apply our in-house materials
expertise to manufacture products that solve challenging engineering problems,
primarily for the automotive, commercial vehicle and flooring sectors.
We manufacture in the UK, Germany and Sweden and have world-class quality and
performance metrics, making us a truly trusted, local European partner.
We have our own patented Neptune(TM) technology which is manufactured in our
UK facilities and provides a real point of difference, as it is superior to
all competitor materials in terms of reducing thermal losses and acoustic
noise, whilst boasting leading levels of recycled material content and
recyclability.
A year of turnaround
I am pleased to report that the improvements reported at the half year
continued to gain momentum as the full impact of price increases, cost savings
and better volumes further improved revenue, margins and profit. This resulted
in revenue growing by £3.8m, or 20.2% margin recovery of 7.1% to 29.5% and a
£2.3m year on year improvement in EBITDA.
UK and Swedish automotive revenue grew 26% and 23% respectively and we were
delighted to see our German automotive sales grow by 55% as project wins,
primarily with Neptune for EVs, began production. The flooring market,
however, remains depressed as European construction was negatively impacted by
the tough economic background, which restricted the overall growth in Germany
to 14%.
Our Neptune product range had another strong year as sales grew 35% and is a
key factor for winning new business. In the year we won 11 new customers, 6
in the UK and Sweden and 5 in Germany, including to supply into the
all-electric Nissan Leaf, various JLR vehicles, Fisker Ocean, Lamborghini and
a number of tiers. The launch of our 100% recyclable Neptune-R is creating
excitement in the customer base, as it satisfies the strong desire by
customers to move to ever more environmentally friendly solutions. VW have
approved it at a Class 1 acoustic level.
A value proposition built around strong ESG credentials
Customers increasingly want to source from companies genuinely committed to
providing product solutions with the best environmental credentials. New
European standards are being introduced requiring minimum recycled content in
materials used and minimum recyclable content of the whole vehicle. This is
why we have developed Neptune-R and SilentShell, both single material products
that can be recycled, and Neptune Green which has a higher recycled content.
We are also maximising the recycled content within all our products. The
innovation strategy is prioritising thermal and acoustic solutions for
electric vehicles (EVs) made from materials with lower impact on the
environment.
During the year we have worked with customers to reduce the thermal losses in
their cars. In one case the customer had an urgent issue where the cabins were
overheating - the cool air in the HVAC ducting was leaking out before it got
to the cabin. Autins was drafted in and within 6 weeks had designed and moved
to full production of an engineered solution that not only made the cabin
comfortable but also drew less energy from the battery and extended the
vehicle range. We are now partnering on several strategic follow-up thermal
projects for EVs to solve similar issues and also reduce the number of
materials being used, the process steps and the carbon footprint.
In last year's report, I stated a target to reduce our carbon emissions across
the Group by 84%. During the period, we managed to achieve a reduction of 88%
across the Group by converting to renewable energy sources and improving
efficiencies in the plants, particularly on the Neptune line in Tamworth,
where we have introduced a "new to the world" in-line quality scanner. This
gives us real-time quality control on every part of the material produced,
enabling us to reduce scrap and waste and reduce energy used, whilst improving
the customer experience. In the UK we also managed to reduce water usage by
another 21%, by creating a closed-loop system, and overall waste was reduced
by 38%.
I also stated that we needed to reduce the churn of staff from a post-Covid
high of above 30% to below 10%. Through continuous engagement with our staff
and a number of creative initiatives including the use of banked hours,
increased rates for overtime work and efficiency bonus schemes, we have met
that target and created a stable environment where the workforce and staff
alike are again highly engaged, collaborative and motivated.
Transitioning to agile Acoustic and Thermal NVH engineered solutions
We continue to focus on the future and growth. We know that we are price
competitive and have very strong and trusted relationships with all of our
customers, because of our culture and our quality and service performance. We
do not let customers down and we communicate proactively.
We are now at a point where we need to start investing carefully so that we
capture the available growth. We purchased a cut and seal machine for
Germany so that we can keep up with demand from VW and meet the demand from
new customer Fisker, which began production in April 2023.
Demand for NVH continues to grow as OEMs seek more comfort, but now they also
need to reduce the thermal losses to protect the battery range in their EVs
and they need to do this with sustainable insulation materials. Autins is
poised to help our customers increase their vehicle range and increase
acoustic comfort with environmentally friendly solutions.
The strategy has therefore shifted to increase the total number of enquiries
that come into the business and the amount of time our commercial team can
spend on proactively opening up new relationships and new customers.
We have recently launched new products, but we also have a very exciting
product development pipeline coming through. These projects need pushing
forward, so we have appointed a Thermal and Acoustic Technical lead to
accelerate them.
We are also rolling out a CRM system to increase the efficiency and
transparency of our commercial activities and to create more pull-through from
our customer and prospect base, by running marketing campaigns. This will be
supported by dedicated outsourced marketing support.
Our people have again been fantastic. Their commitment and resilience during
the last couple of years has been inspiring and I would like to personally
thank them for all their hard work and positive energy.
Much has been done, but there is much more to do. We will continue to manage
our costs with prudence and protect our margins, but growth is again our
number one priority.
Gareth Kaminski-Cook
Chief Executive Officer
Financial review
Repositioning, Restructuring and Reaching for Gains
Significant financial performance improvement achieved in FY23 over FY22:
· Revenue increased by 20.2% to £22.7m
· Gross profit increased to £6.7m from £4.2m
· Gross margins recovered from 22.4% to 29.5%
· EBITDA improved by £2.3m to £1.2m
· Cashflow from operating activities significantly improved to
£2.1m
· Operating working capital improved by £0.8m
· Cash and equivalents increased to £2.1m from £1.8m
· CBIL loan repayments were recommenced in July 2023
Key actions taken to reposition the business:
· New contracts were won which have growth potential for 2024 and
beyond
· Contractual pricing and margin improvements achieved
· Restructuring and labour productivity gains continued to offset
labour rate increases
· Materials projects for both cost and efficiency were instrumental
to gross profit improvement
· Utilities costs were hedged in April 2022, helping to contain
subsequent global rate increases
· In isolation, the completed actions had an annualised
profitability run rate improvement that was greater than £2.5m
· Investment spend continued during the year, including new
equipment and premises being acquired in Germany.
Trading Performance £000 H1 H2 FY23 FY22
Revenue 10,843 11,836 22,679 18,873
Gross Profit 3,063 £3,619 6,682 4,235
Gross Margin % 28.2% 30.6% 29.5% 22.4%
EBITDA 360 813 1,173 (1,150)
Cashflow from Operating Activities 357 1,711 2,068 (535)
Debt and Cash Headroom £m H1 H2 FY23 FY22
Net Debt* 2.42 1.55 1.60 2.0
Cash and equivalents 1.3 2.1 2.1 1.8
Cash Headroom 3.5 4.1 4.1 3.5
Loans and Borrowings* (3.7) (3.7) (3.7) (3.8)
*Excluding IFRS16 lease liabilities.
FY2023 Performance Overview
A number of planned repositioning actions were taken during the year, which
improved the financial performance of the Group. Significant customer contract
and price improvements were largely concluded during H1, albeit some further
improvements did continue into H2. Materials improvement projects were mostly
implemented during H1 and these had full impact in H2.
Staff restructuring actions were initiated in October 2022, and these started
to deliver benefits from December 2022 onwards. Our staff's response to this
process was excellent, and all worked co-operatively with us throughout.
Subsequently they accepted targets to improve productivity, adopted
multi-skilling and simultaneously embraced a flexible two-way banked hours and
enhanced overtime regime, which enabled them to improve their personal
earnings, whilst assisting smooth production for the Group and improved cost
control.
New waste management and recycling initiatives also assisted profitability and
reduced our carbon footprint. Utilities costs, driven by macroeconomic
circumstances, increased year on year for the Group by c.£0.5m, albeit the
impact was contained through forward contract arrangements. Ultimately, these
increases were more than offset by the other efficiency actions noted above. A
decision was also taken to move towards renewable energy sources even though
there were some adverse short term cost implications of this.
Overheads were largely consistent year on year with planned improvements
offsetting general inflationary factors. In Germany, we invested in a further
storage location, which added to overhead costs and also purchased new
critical capital equipment. This was to help accommodate volume recovery for
their key customer and growth in other automotive contracts, whilst
simultaneously improving efficiency and capacity.
In summary, in FY23 the Group improved revenues, margins and costs resulting
in a £2.3m EBITDA increase over the prior year. This, coupled with strong
working capital management, improved Cashflow from operating activities to
£2.1m. Enhanced backdated R&D cash tax credits of £0.3m were also
received, and disposal of our JV share to our JV partner, Indica Industries,
for £0.3m immediately prior to the year-end also realised a further gain of
£0.2m. All actions combined with improved trading, meant that, as at 30
September 2023, cash and equivalents had improved by £0.3m and net debt,
excluding IFRS16 liabilities, by £0.4m, as compared to the prior year, with
H2 performance being markedly stronger than H1.
Revenues and Margins
Revenues increased significantly across all Group companies in FY23. Germany
based automotive OEMs experienced solid volume recovery, which was mirrored in
their purchases from Autins GmbH. However, flooring sales in Germany did
decline in line with household economic conditions. Recovery in the UK was
much more muted, and H1 actually experienced some volume reduction from
extended semi-conductor and other supply chain disruption, which then eased in
H2. The UK business won a significant new contract that commenced in July
2023, which added to H2 performance and will have a revenue impact in excess
of £1m in FY24. In Sweden, revenues increased by 23%, mainly reflecting
volume recovery as well as some small new contract wins.
Neptune sales continued to grow in both absolute value and as a proportion of
overall Group revenue. This included new pioneering BEV range improving
thermal applications, in which Neptune was technically proven to be the class
leading material. Neptune growth usually improves overall Group margin as our
internal fixed cost absorption also increases, as compared with fixed margins
on bought in materials.
Group gross margins improved by 7.1%. Most of this improvement came from
customer price and contract improvements and the impact of new contract wins.
The remainder of the improvement primarily derived from materials projects and
labour restructuring. Currency movements also assisted recovery in H2 as US$
denominated materials purchases, that were considerably impacted with weak GBP
against US$ in Autumn 2022, then steadily improved as GBP recovered back
towards US$1.30. Utilities cost increases had an impact as described above.
From a country perspective gross margins recovered in the UK by 11.8%,
remained consistent in Sweden, and reduced in Germany by 2.3%, where materials
costs and operational challenges restricted some of the expected recovery.
Gross margin recovery is, of course, pivotal in repositioning the trading
position of the Group for profitable future growth, and further actions are
ongoing to assist with this.
Other operating costs and EBITDA
In the UK the national minimum wage increased to £10.42 from £9.50 in April
2023, a 9.7% increase. In line with this, we increased all our UK production
hourly pay scales. Multi-skilling, productivity and other progressive
performance criteria allow our staff to earn well above the minimum wage rate,
and our flexible overtime and banked hours arrangements help give staff some
control over total earnings and work life balance. This in turn improves
production flows that optimise total labour and other variable costs, which
improve profitability. Staff retention was also strong, and allowing for
retirees and redundancies, was measured above 92% for the year.
Transport costs across the Group also improved, driven by rate negotiations
with suppliers and improved planning and logistics, coupled with smoother
schedule requirements from customers. Conversely, there were general
inflationary factors in many other cost categories, the most notable being
energy as described above. The Group also incurred some non-repeating
expenditure and one significant key customer bad debt. The total cost of these
items was £0.25m, charged in Administrative expenses. Combined Distribution
and Administrative expenses were £7.4m, compared with £7.2m in the prior
year. Again, these increases were more than offset by other actions and cost
control measures already described resulting in EBITDA improving by £2.3m, as
noted above.
H2 EBITDA at £0.81m was also significantly ahead of H1 EBITDA of £0.36m. H2
Cashflow from operating activities was £1.71m, being significantly ahead of
H1 at £0.35m. This validates the impact of the profit improvement actions and
helps demonstrate the performance run rate that we are building from into
FY24.
Loss before tax
The total depreciation and amortisation charge for the year was consistent
with the prior year at £1.9m. The finance expense reduced slightly to £0.5m
(FY22 £0.54m) as some capital repayments were made on fixed rate borrowings.
There was a £0.2m profit on disposal from our JV share to our JV partner
Indica industries. Existing customer contract product supply was secured with
a simultaneous new exclusive agreement signed with Indica UK.
Currency
The Group's overseas operations and certain key raw material suppliers require
the Group to trade in currencies other than Sterling, its base currency.
During the year, operational transactions were conducted in US Dollar, Swedish
Krona and Euro. Certain key raw materials for production are currently
imported from South Korea with transactions conducted in US Dollars. The Group
has taken steps to mitigate overall sourcing and currency risks by
establishing alternative purchase sources which can be transacted in
alternative currencies.
With Euro revenues and Neptune sales both continuing to grow, the Group
continues to benefit from natural hedging, arising from its structure and
trading balances, which means that the Group's results in both FY23 and FY22
have only been marginally impacted as a result of currency translations. In H2
the Group has made use of a new forward currency buying facility to partially
hedge currency exposure for between 6-12 months on a rolling basis. Formal
hedge accounting has not been adopted.
Borrowing and net finance expense
Total borrowings for the Group reduced slightly to £3.7m (FY22 £3.8m), with
CBIL loan repayments recommencing in July 2023, whilst HP liabilities slightly
increased following the purchase of new plant and equipment in Germany in H2.
The UK Invoice Finance facility remained entirely undrawn at the year end. All
term loans have fixed interest rates, and the slight reduction in the finance
expense is a consequence of borrowing reduction following repayments made. As
noted above, cash and cash equivalents increased year on year and overall cash
headroom remains strong. This assists our ability to make significant capital
repayments for both the CBIL and MEIF term loans in the coming year. The Group
has agreed a revised repayment profile for the MEIF term loan, which requires
full settlement by 31 December 2024. The lender has also waived covenants
indefinitely. Payments for the MEIF loan had previously been paused, and
repayment is subject to compliance with revised CBIL loan covenants, recently
agreed with HSBC to facilitate this.
The Board continues to review the Group's banking and funding arrangements
with a view to ensuring that they remain appropriate for its planned growth.
Cash, working capital and net debt
The Group ended the year with an improved net debt position of £1.6m
excluding IFRS16 calculated lease liabilities (FY22: £2.0m).
The Group has continued to optimise working capital during the year. Special
focus remains on timely collection of trade debtors and timely payment of
trade creditors. Active customer credit terms management also released in
excess of £0.4m of cash across the Group. Far East purchases are obtained on
open credit terms from the respective suppliers. The Group continues to hold
c.£0.3m of strategic buffer stocks, albeit these have reduced since the prior
year as supply chain issues eased. In total, operating working capital
improved by £0.8m across the Group, despite increasing sales.
Taxation
The effective tax rate in the year was below that expected based on current UK
corporation tax levels. Given the quantum of losses compared to expected
profitability in the next two years, the Group has not recognised the majority
of current year losses as a deferred tax asset.
The Group's technical and R&D teams have, as in prior years, continued to
enhance materials applications, improve processes and develop new products.
The Group strategy remains to utilise losses to obtain actual R&D tax
credit cash refunds to maximise liquidity. An R&D tax credit claim was
submitted for FY22 in September 2023 and £0.1m of cash has been received
subsequent to the FY23 year-end (FY22: £0.1m cash received).
The Group's German subsidiary has largely utilised its historical tax losses,
which may result in a degree of tax at a higher rate on future profits in
Germany. Brought forward taxable losses are available in Sweden that will, in
the short term, at least partially offset their expected trading profits.
Transfer pricing principles are actively considered and managed across the
Group, which helps to optimise the combined tax position.
Earnings per share and Dividends
Loss per share was 1.67 pence (FY22: Loss per share 6.34 pence) reflecting the
reduced loss in the year. The weighted average number of shares was 54,600,984
in the year (FY22: 51,683,793). The Board are not proposing a final dividend
for the current year (FY22: £nil) and no interim dividend was paid (FY22:
£nil).
Going concern
The financial statements, based on current and forecast trading, the annual
cash flow forecasts, and the available sources of finance, have been prepared
on the going concern basis, further details of which are provided in the basis
of preparation of financial statements note.
Kamran Munir
Chief Financial Officer
Consolidated income statement
For the year ended 30 September 2023 Note
2023 2022
£000 £000
Revenue 1 22,679 18,873
Cost of sales (15,997) (14,638)
Gross profit 6,682 4,235
Other operating income 6 28
Distribution expenses (562) (501)
Administrative expenses (6,872) (6,746)
Operating loss 2 (746) (2,984)
Finance expense 3 (501) (542)
Share of post-tax profit/(loss) of
equity accounted joint ventures 5 (26)
Profit on disposal of interest in joint venture 201 -
Loss before tax (1,041) (3,552)
Tax credit 128 277
(913) (3,275)
Loss after tax for the year
Earnings per share for loss attributable to the owners of the parent during
the year
Basic (pence) 4 (1.67)p (6.34)p
Diluted (pence) 4 (1.67)p (6.34)p
All amounts relate to continuing operations.
Consolidated statement of comprehensive income
For the year ended 30 September 2023
2023 2022
£000 £000
Loss after tax for the year (913) (3,275)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Currency translation differences (7) (15)
(920) (3,290)
Total comprehensive expense for the year
Consolidated statement of financial position
As at 30 September 2023 2023 2022
£000 £000
Non-current assets
Property, plant and equipment 8,407 8,949
Right-of-use assets 4,302 4,549
Intangible assets 2,839 2,987
Investments in equity-accounted
joint ventures - 74
Total non-current assets 15,548 16,559
Current assets
Inventories 2,343 2,669
Trade and other receivables 4,275 3,433
Cash and cash equivalents 2,090 1,786
Total current assets 8,708 7,888
Total assets 24,256 24,447
Current liabilities
Trade and other payables 4,468 3,358
Loans and borrowings 1,306 860
Lease liabilities 889 825
Total current liabilities 6,663 5,043
Non-current liabilities
Trade and other payables 99 105
Loans and borrowings 2,387 2,907
Lease liabilities 4,280 4,627
Deferred tax liability 12 30
Total non-current liabilities 6,778 7,669
Total liabilities 13,441 12,712
Net assets 10,815 11,735
Equity attributable to equity
holders of the company
Share capital 1,092 1,092
Share premium account 18,366 18,366
Other reserves 1,886 1,886
Currency differences reserve (147) (140)
Profit and loss account (10,382) (9,469)
Total equity 10,815 11,735
Consolidated statement of changes in equity
For the year ended 30 September 2023
Currency
Share
Share premium Other differences Profit and loss account Total
capital account reserves reserve loss equity
£000 £000 £000 £000 £000 £000
At 30 September 2022 1,092 18,366 1,886 (140) (9,469) 11,735
Comprehensive income for the year
Loss for the year - - - - (913) (913)
Other comprehensive income (7) - (7)
- - -
Total comprehensive expense for the year - - - (7) (913) (920)
At 30 September 2023 1,092 18,366 1,886 (147) (10,382) 10,815
Currency
Share
Share premium Other differences Profit and loss account Total
capital account reserves reserve loss equity
£000 £000 £000 £000 £000 £000
At 30 September 2021 792 15,866 1,886 (125) (6,194) 12,225
Comprehensive income for the year
Loss for the year - - - - (3,275) (3,275)
Other comprehensive income (15) - (15)
- - -
Total comprehensive expense for the year - - - (15) (3,275) (3,290)
Contributions by owners
Shares issued in the year (net of expenses) 300 2,500 - - - 2,800
At 30 September 2022 1,092 18,366 1,886 (140) (9,469) 11,735
Consolidated statement of cash flows
For the year ended 30 September 2023
2023 2022
£000 £000
Operating activities
Loss after tax (913) (3,275)
Adjustments for:
Income tax (128) (277)
Finance expense 501 542
Depreciation of property, plant and equipment 895 884
Depreciation of right-of-use assets 817 831
Amortisation of intangible assets 199 163
Profit on disposal of interest in joint venture (201) -
Share of post-tax profit of equity accounted joint ventures (5) 26
1,165 (1,106)
(Increase)/decrease in trade and other receivables (723) 261
Decrease/(increase) in inventories 291 (236)
Increase in trade and other payables 1,274 255
842 280
Cash generated from/(used in) operations 2,007 (826)
Income taxes received 67 291
Net cash flows from/(used in) operating activities 2,074 (535)
Investing activities
Purchase of property, plant and equipment (531) (219)
Purchase of intangible assets (82) (112)
Proceeds from disposal of tangible fixed assets 118 -
Proceeds from disposal of interest in joint venture 180 -
Dividend received from equity-accounted for joint venture - 20
Net cash used in investing activities (315) (311)
Financing activities
Interest paid (501) (527)
Proceeds from issue of shares - 3,000
Share issue expenses paid - (200)
Loan issue expenses paid - (3)
Bank loans repaid (179) (108)
Principal paid on lease liabilities (851) (688)
Hire purchase finance advanced 205 -
Hire purchase agreements repaid (110) (87)
Net cash (used in)/generated from financing activities (1,436) 1,387
Net increase in cash and cash equivalents 323 541
Cash and cash equivalents at beginning of year 1,786 1,238
Foreign exchange movements (19) 7
Cash and cash equivalents at end of year 2,090 1,786
2023 2022
£000 £000
Cash and cash equivalents comprise:
Cash balances 2,090 1,786
Reconciliation of movements in net cash/financing liabilities
Year ended 30 September 2023 Opening Cash flows Non-cash movements Closing
£000 £000 £000 £000
Cash and cash equivalents
Cash balances 1,786 323 (19) 2,090
Financing liabilities
Bank loans (3,625) 179 (10) (3,456)
Hire purchase liabilities (142) (95) - (237)
Lease liabilities (5,452) 1,116 (833) (5,169)
(9,219) 1,200 (843) (8,862)
(7,433) 1,523 (862) (6,772)
Year ended 30 September 2022 Opening Cash flows Non-cash movements Closing
£000 £000 £000 £000
Cash and cash equivalents
Cash balances 1,262 517 7 1,786
Bank overdrafts (24) 24 - -
1,238 541 7 1,786
Financing liabilities
Bank loans (3,714) 103 (14) (3,625)
Hire purchase liabilities (229) 87 - (142)
Lease liabilities (5,636) 987 (803) (5,452)
(9,579) 1,177 (817) (9,219)
(8,341) 1,718 (810) (7,433)
Material non cash transactions
Financing liabilities include lease liabilities, primarily in respect of
property leases, following the adoption of IFRS 16 from 1 October 2019.
Additions of £610,000 net of foreign exchange movements of £42,000 are shown
in non-cash movements together with financing charges of £265,000 (FY22:
£534,000 of additions net of foreign exchange movements of £30,000 together
with financing charges of £299,000).
Basis of preparation of financial statements
While the financial information included in this annual financial results
announcement has been prepared in accordance with the recognition and
measurement principles of International Accounting Standards in conformity
with the requirements of the Companies Act 2006 and UK adopted IFRSs., this
announcement does not contain sufficient information to comply therewith.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30 September 2023 or 2022 but is
derived from those accounts. Statutory accounts for the year ended 30
September 2022 have been delivered to the Registrar of Companies and those for
the year ended 30 September 2023 will be delivered following the Company's
annual general meeting.
The auditors have reported on those accounts; their reports were unqualified
and did not include references to any matters to which the auditors drew
attention by way of emphasis without qualifying their reports.
Their reports for the year end 30 September 2023 and 30 September 2022 did not
contain statements under s498 (2) or (3) of the Companies Act 2006.
The consolidated financial statements
are drawn up in sterling, the functional currency of Autins Group
plc. The level of rounding for the financial statements is the nearest thousand
pounds.
Going Concern
The Directors have concluded that, based on current and forecast trading, the
annual cash flow forecasts, and the available sources of finance, that it is
appropriate to prepare these financial statements on the going concern basis.
The Directors have prepared trading and cash flow forecasts through to 30
September 2025. The forecasts incorporate the actual trading and cash flow
performance through to 31 January 2024, which show an improved position
compared to the same period in the prior year.
The trading forecasts take into consideration:
· the current and expected demand schedules from the Group's key
automotive customers, changes in expected demand for flooring products in
Germany and the levels of enquiries for new business;
· the impact of current and future expected demand levels for new
vehicles, the migration to EV's and publicly available forward looking market
information on market sizes and dynamics; and
· the current cost structure of the Group and an allowance for
known increases, for example in relation to increases in the minimum wage from
April 2024, and various projects to improve efficiency in the production and
procurement processes.
The key sensitivities in the trading forecasts are automotive revenue levels,
end market vehicle sales mix and the timing of orders placed by customers.
These sensitivities have been factored into the forecasts.
The cash flow forecasts are derived from the trading forecasts and include the
repayment of loans in accordance with the agreements with the lenders, further
details of which are provided below. The cash flow forecasts also assume that
working capital is managed in line with the commercial agreements and provide
a contingency.
The facilities available to the Group comprise a UK invoice finance facility
of up to £3.5 million and combined overdraft facilities in Germany and Sweden
of £0.2 million, none of which are currently drawn. As at 26 February 2024,
shortly before the reporting date, the cash headroom, including the undrawn
facilities is £3.7 million (30 September 2023: £4.1 million). The minimum
cash headroom, comprising cash at bank and available facilities, in the
forecasts for a period of 12 months from the date of signing these financial
statements is £1.0 million in March 2025, following the full repayment of the
MEIF term loan.
As at 30 September 2023, the Group had:
· a UK CBILS loan of £1.7 million;
· a MEIF loan of £1.5 million; and
· a German Government loan of £0.2 million.
The UK CBILS loan is repayable in quarterly instalments of £146,154 through
to 2026. A revised facility agreement was signed in relation to this loan on
29 February 2024 which included covenants in relation to minimum EBITDA
levels, minimum levels of cash at bank plus available facilities (liquidity)
and maximum net leverage (total debt, excluding IFRS 16 liabilities, as a
multiple of EBITDA), which are measured quarterly and minimum debt service
(EBITDA as a multiple of debt service costs, excluding the IFRS 16 debt
service cost and the MEIF term loan repayment), which is measured annually.
The forecasts demonstrate that in the period of 12 months from signing these
financial statements the covenants are fully complied with.
A revised facility agreement was also signed on 29 February 2024 in relation
to the MEIF loan, which schedules full repayment of the loan by 31 December
2024. This facility does not include any covenants.
The German Government loan is repayable in quarterly instalments of £8,000
through to 2030.
Changes in accounting policies
These financial statements have been prepared in accordance with International
Accounting Standards in conformity with the requirements of the Companies Act
2006 for periods beginning on or after 1 October 2022 with
no new standards adopted in these financial statements.
New accounting standards applicable to future periods
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.
1. Revenue and segmental information
Revenue analysis
2023 2022
£000 £000
Revenue, recognised at a point in time, arises from:
Sales of components 22,513 18,577
Sales of tooling 166 296
22,679 18,873
Segmental information
The Group currently has one main reportable segment in each year, namely
Automotive (NVH) which involves provision of insulation materials to reduce
noise, vibration and harshness to automotive manufacturing. Turnover and
operating profit are disclosed for other segments in aggregate, mainly
flooring, as they individually do not have a significant impact on the Group
result. These segments have no material identifiable assets or liabilities.
Factors that management used to identify the Group's reportable segments
The Group's reportable segments are strategic business units that offer
different products and services.
Measurement of operating segment profit or loss
The accounting policies of the operating segments are the same as those
described in the summary of significant accounting policies.
The Group evaluates performance on the basis of operating profit/(loss).
Automotive remained the only significant segment in the year although the
German subsidiary has developed and maintained acoustic flooring sales to
offset some of the impact of the depressed automotive market.
The Group's non-automotive revenues, mainly acoustic flooring, is included
within the others segment.
Segmental analysis for the year ended 30 September 2023
Automotive Others 2023
NVH £000 Total
£000 £000
Group's revenue per consolidated statement of comprehensive income 20,074 2,605 22,679
Depreciation 1,712
Amortisation 199
Segment operating loss (687) (59) (746)
Finance expense (501)
Profit on disposal of joint venture interest 201
Share of post-tax loss of equity accounted joint ventures 5
Group loss before tax (1,041)
Additions to non-current assets 1,225 - 1,225
Reportable segment assets/total Group assets 24,256 24,256
Reportable segment liabilities/total Group liabilities 13,441 13,441
Segmental analysis for the year ended 30 September 2022
Automotive Others 2022
NVH £000 Total
£000 £000
Group's revenue per consolidated statement of comprehensive income 15,271 3,602 18,873
Depreciation 1,715
Amortisation 163
Segment operating loss (2,968) (16) (2,984)
Finance expense (542)
Share of post-tax loss of equity accounted joint ventures (26)
Group loss before tax (3,552)
Additions to non-current assets 865 - 865
Reportable segment assets 24,373 24,373
Investment in joint ventures 74
Reportable segment assets/total Group assets 24,373 24,447
Reportable segment liabilities/total Group liabilities 12,712 12,712
Revenues from one UK customer in FY23 total £7,658,000 and £3,800,000 of
revenue arose from two other European customers (FY22: one customer
£6,673,000 and £2,287,000 of revenue arose from another European customer).
This largest customer purchases goods from Autins Limited in the United
Kingdom and there are no other customers which account for more than 10% of
total revenue.
External revenues by location of customers
2023 2022
£000 £000
United Kingdom 12,832 10,570
Sweden 709 645
Germany 6,434 5,917
Other European 2,595 1,706
Rest of the World 109 35
22,679 18,873
The material non-current assets outside of the United Kingdom are £892,000
(2022: £788,000) of fixed assets including right-of-use assets and £488,000
(FY22: £519,000) of goodwill in respect of the Swedish subsidiary, together
with £564,000 of fixed assets (FY22: £264,000) in Germany. £268,000 (FY22:
£491,000) of cash balances are held in Germany with the cash partly utilised
to repay intercompany debt owed to a UK group company.
2. Operating Loss
The operating loss is stated after charging/(crediting):
2023 2022
£000 £000
Foreign exchange losses/(gains) 43 (8)
Depreciation of property, plant and equipment 895 884
Depreciation of right-of-use assets 817 831
Amortisation of intangible assets 199 163
Cost of inventory sold 14,910 13,652
Impairment of trade receivables 72 -
Research and development expenditure 11 12
Other government assistance and grants (6) (28)
Employee benefit expenses 6,210 6,273
Lease payments (short term leases only) 164 123
Auditors' remuneration:
Fees for audit of the Group 70 69
3. Finance expense
2023 2022
£000 £000
Bank interest 200 208
Amortisation of loan issue costs 16 15
Right-of-use asset financing charges 265 299
Interest element of hire purchase agreements 20 20
` 501 542
4. Earnings per share
2023 2022
£000 £000
Loss used in calculating basic and diluted EPS (913) (3,275)
Number of shares
Weighted average number of £0.02 shares for the purpose of basic earnings per 54,601 51,683
share ('000s)
Weighted average number of £0.02 shares for the purpose of diluted earnings 54,601 51,683
per share ('000s)
Earnings per share (pence) (1.67)p (6.34)p
Diluted earnings per share (pence) (1.67)p (6.34)p
Earnings per share have been calculated based on the share capital of Autins
Group plc and the earnings of the Group for both years. There are options in
place over nil (FY22: 2,523,648) shares that were anti-dilutive at the
year-end but which may dilute future earnings per share.
5. Annual report and accounts
The annual report and accounts will be posted to shareholders shortly and will
be available to members of the public at the Company's registered office at
Central Point One, Central Park Drive, Rugby, CV23 0WE and on the Company's
website www.autins.co.uk/investors (http://www.autins.co.uk/investors) .
6. Annual General Meeting
The Annual General Meeting of Autins Group plc will be held at the Company's
main offices at Central Point One, Central Park Drive, Rugby, Warwickshire,
CV23 0WE on Thursday 28 March 2024 commencing at 11.00am.
(#_ftnref1) 1 Net debt is cash less bank overdrafts, loans, invoice
discounting, hire purchase finance and excludes IFRS16 right of use lease
liabilities.
(#_ftnref2) 2 Sum of net cash at bank and residual available banking
and invoice financing facilities.
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