REG - Chamberlin PLC - Half-year Report

ChamberlinAnnouncement

16/04/2021 07:05

RNS Number : 6754V
  
Chamberlin PLC
  
16 April 2021
  
 

16 April 2021
AIM: CMH
 
CHAMBERLIN PLC
("Chamberlin" or "the Company" or "the Group")
 
Interim Results
for the six months to 30 September 2020 
 
Key Points
 

·      H1 results from operations significantly improved compared to prior year despite headwinds due to COVID-19 and Brexit uncertainty.


·      Revenues of £11.0m (2019: £12.8m) largely reflect impact of COVID-19 disruption which caused the closure of the Walsall foundry and machine shop in April 2020.  
·      In spite of the lower volumes, operating loss before non-underlying costs* reduced to £0.2m (2019: loss £1.0m). Operating loss after non-underlying costs of £0.5m (2019: £1.7m).
·      Loss before tax of £0.6m (2019: loss of £1.8m).
·      Net debt at 30 September 2020 of £4.7m (31 March 2020: £4.6m).

 
Post Balance Sheet Events
 

·    The publication of the FY 2020 Accounts was delayed due, in part, to the impact of COVID 19 on the business and the audit process.  In addition, the Company announced the loss of a major contract in December 2020 which has impacted on the Company's future prospects.  This in turn led to the Company delaying publication of the FY 2021 Interim Results.
·    Trading in the Company's shares on AIM has been suspended since 4 January 2021.  
·    The Company completed a £3.5m share placing and subscription on 26 March 2021 which has enabled the Company to proceed with finalising the FY 2020 Accounts and FY 2021 Interim Results.  The Company is now well positioned to restructure and take advantage of future growth opportunities. 

 
 
Chairman, Keith Butler-Wheelhouse, commented:  
 
"Management are confident that sales at Chamberlin will stabilise in the first half of the 2021/22 financial year and will then grow from the post BorgWarner low, with the growth gathering pace in the second half. The Board expects growth from all business units and a return to profitability and cash generation post our restructuring." 
 
 
*Underlying figures are stated before non-underlying costs (restructuring costs, hedge ineffectiveness, impairment, GMP equalization, onerous leases and share based payment costs) together with the associated tax impact. 
 
 
Enquiries
 




Chamberlin plc 
Kevin Nolan, Chief Executive
Neil Davies, Finance Director
 


T: 01922 707100




Cenkos Securities plc
(Nominated Adviser and Broker)
Russell Cook
Katy Birkin
 


T: 020 7397 8900




Peterhouse Capital Limited 
(Joint Broker) 
Heena Karani
Duncan Vasey


T: 020 7469 0930




 
 
 
Chairman's Statement
 
Chamberlin plc (AIM: CMH) announces its interim results for the six months ended 30 September 2020.
 
Revenues in the first six months reduced to £11.0m from £12.8m in the prior year, primarily reflecting the impact of COVID-19 induced shutdowns in April 2020 of our European automotive customer's sites.  As a result of these closures, we were forced to shutdown our own operations at the Walsall foundry and machine shop in April. In the following five months, revenue for the Walsall foundry and machine shop recovered to around 96% of the comparable five-month period in the prior year.    
 
Our Russell Ductile Castings foundry in Scunthorpe and Petrel, our hazardous area lighting business, both remained operational throughout the first half. Russell Ductile Castings have been able to capitalise on a reduction in foundry market capacity and the increasing demand for its products, with revenue 10% ahead of the previous half year. Petrel remained operational in the half-year, but was impacted by the impact of COVID-19 induced customer shutdowns and delays to the procurement of some large lighting projects. As a result, Petrel's revenue reduced by 34% to £1.1m (2019: £1.7m). However, the level of new orders has increased markedly and second half revenues are much improved. 
 
Despite the overall reduction in revenue, the loss before taxation reduced to £0.6m in the first half from £1.8m in the prior year. Of this loss, £0.4m occurred during the enforced shutdown at Walsall in April. The reduction in losses compared to prior year was driven by tight cost control, an improved operational performance by Russell Ductile Castings, the ability to flex the workforce to the level of demand using the Government's furlough scheme and lower non-underlying costs of £0.2m (2019: £0.7m). Non-underlying costs included £0.1m of restructuring costs (2019: £0.7m).  
 
Improved control of working capital and capital expenditure enabled net debt to increase only marginally to £4.7m from £4.6m at 31 March 2020.  
 
Subsequent events
In December 2020, our principal customer BorgWarner gave notice of the early termination of all existing contracts, dealing a body blow to the company. This required Chamberlin to seek additional finance to remain solvent and pursue substantial further restructuring. A share issue was successfully undertaken in March 2021 generating £3.5m before costs.
The publication of these accounts was delayed until 16 April 2021 first by COVID-19, then by the loss of the BorgWarner contract and finally by the share issue.
 
Outlook
The Walsall foundry (including its associated machine shop) have experienced lower revenues in the second half, reflecting the progressive reduction in purchases from the historical principal customer BorgWarner. The prospects for utilisation of the machine shop remain unclear and the Board is continuing to review its options in the light of the continued reduction in purchases and the prevailing market conditions.
 
Meanwhile the prospects for growth at the Walsall foundry are encouraging. The casting of automotive turbocharger housings remains a dominant market for Chamberlin and demand across the sector remains stable. The capacity demands of BorgWarner previously left Chamberlin unable to supply prospective new, non-automotive customers, however, the Company is now able to exploit these new higher margin market opportunities. The Company is continuing with the cost reduction programme referred to above and further measures are planned. Overall, the headcount at 28 February 2021 was 239 and the restructuring programme plans to reduce the headcount to 138. The Board estimates that the annualised reduction in employment cost arising from the restructuring should not be less than £3.4 million.
 
Sales at RDC and Petrel in the second half are tracking ahead of the prior year and the outlook for both RDC and Petrel is encouraging, with the recent revenue growth expected to continue.
 
Management are confident that sales at Chamberlin will stabilise in the first half of the 2021/22 financial year and will then grow from the post BorgWarner low, with the growth gathering pace in the second half. The Board expects growth from all business units and a return to profitability and cash generation post our restructuring.
 
 
Keith Butler-Wheelhouse
Chairman
 
 
 
Consolidated Income Statement 
for the six months ended 30 September 2020
 
 




 
 
 


 


 


 


 


 


 


 


 


 


 




Note


Unaudited

six months ended

30 September 2020


Unaudited

six months ended

30 September 2019


Year ended

31 March 2020




 


 


Underlying


# Non-underlying


       Total


Underlying


# Non-underlying


Total


Underlying


# Non-underlying 


        Total




 


 


£000


£000


£000


£000


£000


£000


£000


£000


£000




 


 


 


 


 


 


 


 


 


 


 




Revenue 


2


11,044


-


11,044


12,828


-


12,828


26,143


-


26,143




Cost of sales


 


(9,458)


-


(9,458)


(11,921)


-


(11,921)


(23,632)


-


(23,632)




Gross profit


 


1,586


-


1,586


907


-


907


2,511


-


2,511




Other operating expenses


7


(1,798)


(247)


(2,045)


(1,917)


(686)


(2,603)


(3,635)


(909)


(4,544)




Operating loss


 


(212)


(247)


(459)


(1,010)


(686)


(1,696)


(1,124)


(909)


(2,033)




Finance costs


3


(99)


-


(99)


(147)


-


(147)


(310)


-


(310)




Loss before tax


 


(311)


(247)


(558)


(1,157)


(686)


(1,843)


(1,434)


(909)


(2,343)




Tax expense


4


(104)


-


(104)


(143)


-


(143)


(50)


-


(50)




Loss for the period attributable to equity holders of the Parent Company


 


(415)


(247)


(662)


(1,300)


(686)


(1,986)


(1,484)


(909)


(2,393)




 
 
Loss per share:
 


 


 


 


 


 


 


 


 


 


 




Basic


5


(5.2)p


(3.1)p


(8.3)p


(16.3)p


(8.7)p


(25.0)p


(18.7)p


(11.4)p


(30.1)p




Diluted


 


(5.2)p


(3.1)p


(8.3)p


(16.3)p


(8.7)p


(25.0)p


(18.7)p


(11.4)p


(30.1)p




 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 


 


 


 




# Non-underlying items include restructuring costs, hedge ineffectiveness, impairment, GMP equalisation, onerous leases and share-based payment costs together with the associated tax impact as disclosed in note 7.
 
 
 
Consolidated Statement of Comprehensive Income 
for the six months ended 30 September 2020
 
 
 




 


Unaudited

six months ended

30 September

2020


Unaudited

six months ended

30 September

2019




Year ended

31 March

2020




 


 


£000


 


£000


 


£000




 


 


 


 


 


 


 




Loss for the period


 


(662)


 


(1,986)


 


(2,393)




Other comprehensive income


 


 


 


 


 


 




Ineffective portion of movement in cash flow hedges recycled to income statement

 


 


124


 


-


 


138




Movements in fair value of cash flow hedges taken to other comprehensive income

 


 


(102)


 


(165)


 


(614)




Deferred tax on movements in cash flow hedges

 


 


17


 


28


 


81




Net other comprehensive income/(expense) that may be recycled to profit and loss


 


39


 


(137)


 


(395)




 
Re-measurement (losses)/gains on pension scheme assets and liabilities

 


 


(611)


 


(261)


 


460




Deferred tax on re-measurement (losses)/ gains on pension assets and liabilities
 


 


116


 


50


 


(87)




Net other comprehensive (expense)/ income that will not be reclassified to profit and loss 


 


(495)


 


(211)


 


373




 
Other comprehensive expense for the period net of tax
 


 


(456)


 


(348)


 


(22)




Total comprehensive expense for the period attributable to equity holders of the Parent Company


 


 
(1,118)


 


 
(2,334)


 


 
(2,415)




 
 
 
Consolidated Balance Sheet
at 30 September 2020
 
 
 




 


 


Unaudited

30 September

2020


 


Unaudited

30 September

2019


 


31 March

2020 




 


 


£000


 


£000


 


£000




Non-current assets


 


 


 


 


 


 




  Property, plant and equipment


 


6,809


 


7,714


 


7,209




  Intangible assets


 


303


 


264


 


341




  Deferred tax assets


 


657


 


820


 


611




 


 


7,769


 


8,798


 


8,161




Current assets


 


 


 


 


 


 




  Inventories


 


2,577


 


2,838


 


2,589




  Trade and other receivables


 


4,434


 


5,140


 


6,082




  Cash at bank


 


505


 


599


 


457




 


 


7,516


 


8,577


 


9,128




Total assets


 


15,285


 


17,375


 


17,289




 


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 




  Financial liabilities


 


3,264


 


4,159


 


3,028




  Trade and other payables


 


5,937


 


5,153


 


7,481




 


 


9,201


 


9,312


 


10,509




Non-current liabilities


 


 


 


 


 


 




  Financial liabilities


 


1,941


 


2,491


 


2,037




  Deferred tax liabilities


 


57


 


35


 


39




  Provisions


 


200


 


200


 


200




  Defined benefit pension scheme deficit


 


2,442


 


2,791


 


1,959




 


 


4,640


 


5,517


 


4,235




 


 


 


 


 


 


 




Total liabilities


 


13,841


 


14,829


 


14,744




 


 


 


 


 


 


 




Capital and reserves


 


 


 


 


 


 




  Share capital


 


1,990


 


1,990


 


1,990




  Share premium


 


1,269


 


1,269


 


1,269




  Capital redemption reserve


 


109


 


109


 


109




  Hedging reserve


 


(260)


 


(41)


 


(299)




  Retained earnings


 


(1,664)


 


(781)


 


(524)




Total equity


 


1,444


 


2,546


 


2,545




 


 


 


 


 


 


 




Total equity and liabilities


 


15,285


 


17,375


 


17,289




 
 
 
 Consolidated Cash Flow Statement
for the six months ended 30 September 2020




 


 


Unaudited

six months ended

30 September

2020


 


Unaudited

six months ended

30 September

2019


 


Year ended

31 March

2020




 


 


£000


 


£000


 


£000




Operating activities


 


 


 


 


 


 




Loss for the period before tax


 


(558)


 


(1,843)


 


(2,343)




Adjustments for:


 


 


 


 


 


 




Net finance costs 


 


99


 


147


 


310




Impairment charge on property, plant and equipment


 


-


 


-


 


-




Hedge ineffectiveness


 


124


 


-


 


138




Depreciation of property, plant and equipment


 


483


 


476


 


980




Amortisation of software


 


29


 


22


 


52




Amortisation of development costs


 


10


 


11


 


25




(Profit)/loss on disposal of property plant and equipment


 


 
-


 


 
(12)


 


 
(12)




Share based payments


 


17


 


-


 


59




Foreign exchange rate movements


 


(22)


 


(79)


 


(91)




Difference between pension contributions paid and amounts recognised in the Income Statement 


 


 
(150)


 


 
(139)


 


 
(279)




Decrease/(increase) in inventories 


 


13


 


(136)


 


113




Decrease/(increase) in receivables


 


1,711


 


998


 


(95)




(Decrease)/increase in payables


 


(1,652)


 


400


 


2,265




Corporation tax received


 


-


 


-


 


424




Net cash inflow/(outflow) from operating activities 


 


104


 


(155)


 


1,546




 


 


 


 


 


 


 




Investing activities


 


 


 


 


 


 




  Purchase of property, plant and equipment


 


(73)


 


(400)


 


(316)




  Purchase of software


 


-


 


(7)


 


(20)




  Development costs


 


-


 


-


 


(30)




  Disposal of property, plant and equipment


 


-


 


12


 


12




Net cash outflow from investing activities


  


(73)


 


(395)


 


(354)




 


 


 


 


 


 


 




Financing activities


 


 


 


 


 


 




  Interest paid


 


(77)


 


(118)


 


(252)




  Net invoice finance drawdown


 


301


 


1,495


 


279




  Finance lease payments


 


(208)


 


(530)


 


(1,066)




 
Net cash inflow/(outflow) from financing activities


 


 
16


 


 
847


 


 
(1,039)




 


 


 


 


 


 


 




Net increase in cash and cash equivalents


 


47


 


297


 


153




 


 


 


 


 


 


 




 
Cash and cash equivalents at the start of the period
Impact of foreign exchange rate movements


 


 
457
1


 


 
291
11


 


 
291
13




 


 


 


 


 


 


 




 
Cash and cash equivalents at the end of the period
 


 


 
505


 


 
599


 


 
457




 


 


 


 


 


 


 




 


 


 


 


 


 


 




Cash and cash equivalents compromise:


 


 


 


 


 


 




 
Cash at bank 


 


 
505


 


 
599


 


 
457




 
 
 
Consolidated Statement of Changes in Equity
for the six months ended 30 September 2020
 




 


Share capital


Share premium 


Capital redemption reserve


Hedging reserve 


Retained earnings


Total equity




 


 


 


 


 


 


 




 


£000


£000


£000


£000


£000


£000




 


 


 


 


 


 


 




At 1 April 2019


1,990


1,269


109


96


1,404


4,868




Loss for the period 


-


-


-


-


(1,986)


(1,986)




Other comprehensive expense for the period net of tax


-


-


-


(137)


(211)


(348)




Total comprehensive expense


-


-


-


(137)


(2,197)


(2,334)




Share-based payments


-


-


-


-


14


14




Deferred tax on employee share options


-


-


-


-


(2)


(2)




Total of transactions with shareholders


-


-


-


-


12


12




At 30 September 2019


1,990


1,269


109


(41)


(781)


2,546




 


 


 


 


 


 


 




Loss for the period 


-


-


-


-


(407)


(407)




Other comprehensive (expense)/income for the period net of tax


-


-


-


(258)


584


326




Total comprehensive (expenses)/income


-


-


-


(258)


177


(81)




Share-based payments


-


-


-


-


45


45




Deferred tax on employee share options


-


-


-


-


35


35




Total of transactions with shareholders


-


-


-


-


80


80




At 1 April 2020


1,990


1,269


109


(299)


(524)


2,545




 


 


 


 


 


 


 




Loss for the period


-


-


-


-


(662)


(662)




Other comprehensive income/(expense) for the period net of tax


-


-


-


39


(495)


(456)




Total comprehensive income/(expense)


-


-


-


39


(1,157)


(1,118)




Share-based payments


-


-


-


-


17


17




Deferred tax on employee share options


-


-


-


-


-


-




Total of transactions with shareholders


-


-


-


-


17


17




At 30 September 2020


1,990


1,269


109


(260)


(1,664)


1,444




 
 
 
 
Notes to the Interim Financial statements
 
1              General information and accounting policies
 
The unaudited interim condensed consolidated financial statements do not comprise the Group's statutory accounts as defined by section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 March 2020 were approved by the Board of Directors on 15 April 2021 and will be filed at Companies House in due course.  The auditor's report on those accounts was unqualified, but contained an emphasis of matter paragraph relating to a material uncertainty regarding going concern.   
 
Basis of preparation
 
The Group's financial statements have been prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006.
The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with AIM Rules issued by the London Stock Exchange.
 
Accounting policies
 
The principal accounting policies applied in preparing the interim Financial Statements comply with IFRS as adopted by the European Union and are consistent with the policies set out in the Annual Report and Accounts for the year ended 31 March 2020. 
 
No new standards or interpretations issued since 31 March 2020 have had a material impact on the financial statements of the Group.
 
Going concern
The Group's detailed budget for the year ending 31 March 2022 and extended forecast for the six months to 30 September 2022 take into account the net proceeds of £3.3m raised from the Share Placing and Subscription announced on 26 March 2021 and the Director's view of most likely trading conditions. These forecasts and projections indicate that existing bank facilities are expected to remain adequate. The budget and extended forecast provides for significant revenue growth in the second half of the year to 31 March 2022 and the 6 months to 30 September 2022, which is needed to replace the lost BorgWarner contracts. The budget includes the significant but necessary benefits and costs of the restructuring that will be required to right-size the cost-base to the lower level of revenue. As the implementation and delivery of the restructuring benefits and costs are within the control of the Directors, no downside sensitivities have been applied in relation to these. The Directors have, however, applied reasonably foreseeable downside sensitivities to the budget and forecast, which assumes that sales growth from October 2021 onwards is only 3% above the first half average and the machine shop has no sales output. In the detailed budget, extended forecast and sensitised scenario, the possible receipt of compensation from BorgWarner has been entirely discounted, as has any sales of no-longer required machinery.
 
As a consequence, after making enquiries, the Directors have an expectation that, in the circumstances of a reasonably foreseeable downside scenario as described above, the Group and Company have adequate resources to continue in operational existence for the foreseeable future. 
 
However, the rate at which new work can be secured to replace the lost BorgWarner activity is difficult to predict resulting in material uncertainty, which may cast significant doubt over the ability of the Group and Company to realise its assets and discharge its liabilities in the normal course of business and hence continue as a going concern.  
The Directors continue to adopt the going concern basis, whilst recognising there is material uncertainty relating to the above matter.  
 
 
 
2              Segmental analysis
 
For management purposes, the Group is organised into two operating divisions: Foundries and Engineering. The operating segments reporting format reflects the Group's management and internal reporting structures for the Chief Operating Decision Maker.
 




 


Revenue


Operating  (loss)/ profit 




 


Unaudited
 six months
ended 
30 September
2020
 
£000


Unaudited 
six months
ended 
30 September
2019
 
£000


 
Year ended
31 March
2020
 
£000


Unaudited 
six months
ended 
30 September
2020
 
£000


Unaudited 
six months
ended 
30 September
2019
 
£000


 
Year ended
31 March
2020
 
£000




 


 


 


 


 


 


 




Foundries


9,958


11,177


23,106


201


(522)


(84)




Engineering


1,086


1,651


3,037


21


18


(45)




Segmental results


11,044


12,828


26,143


222


(504)


(129)




Shared costs


 


 


 


(434)


(506)


(995)




Non-underlying items (Note 7)


 


 


 


(247)


(686)


(909)




Net finance costs (Note 3)


 


 


 


(99)


(147)


(310)




Loss before tax 


 


 


 


(558)


(1,843)


(2,343)



 
 
 
 
 
 
 
 
 



 
The Foundries segment is a supplier of iron castings, in raw or machined form, to a variety of industrial customers who incorporate the castings into their own products or carry out further machining or assembly operations on the castings before selling them on.  The Engineering segment provides manufactured hazardous area lighting products to distributors and end-users.
 
Financing and income tax are managed on a Group basis and are not allocated to operating segments.
 
 
3              Net finance costs




 


Unaudited

six months ended

30 September
2020


Unaudited

six months ended

30 September
2019 


Year ended

31 March
2020




 


£000


£000


£000




Interest on bank overdraft


(52)


(46)


(164)




Interest expense on lease liabilities


(25)


(72)


(88)




Net interest on defined benefit pension liability


(22)


(29)


(58)




 


(99)


(147)


(310)




 
 
4              Income tax expense
 
An estimated effective rate of tax for the six months to 30 September 2020 of 18.6% (30 September 2019: 7.8%) has been used in these interim statements. This rate is higher than the standard corporation tax rate of 19% due primarily to not recognising a deferred tax asset on trading losses, due to uncertainty over when the losses will recoverable. The corporation tax rate remained at 19% for the year ended 31 March 2020. 
 
 
5              Loss per share
 
The calculation of loss per share is based on the loss attributable to shareholders and the weighted average number of ordinary shares in issue. In calculating the diluted loss per share, adjustment has been made for the dilutive effect of outstanding share options where applicable. Underlying loss per share, which excludes non-underlying items and the related tax thereon as disclosed in Note 7, as analysed below, has been disclosed as the Directors believe this allows a better assessment of the underlying trading performance of the Group.
 




 


Unaudited 
six months ended 
30 September
2020


Unaudited 
six months ended 
30 September
2019


 
Year ended 
31 March
2020




 


£000


£000


£000




Loss after tax for basic earnings per share


(662)


(1,986)


(2,393)




Non-underlying operating items


247


686


909




Taxation effect of the above


-


-


-




 
Loss for underlying earnings per share


 
(415)


 
(1,300)


 
(1,484)




 




 


 


 


 




 


 


 


 




 


 


 


 




 
 
 


Unaudited 
six months ended 
30 September
2020


Unaudited 
six months ended 
30 September
2019


 
Year ended 
31 March
2020




 


000


000


000




Weighted average number of ordinary shares


7,958


7,958


7,958




Adjustment to reflect dilutive shares under option


217


424


217




 
Diluted weighted average number of ordinary shares


 
8,175


 
8,382


 
8,175




 
There is no adjustment for the shares under option in the diluted loss per share calculation as they are required to be excluded from the weighted average number of shares as they are anti-dilutive. 
 
 
6              Pensions
 
The Group operates a defined benefit pension scheme and a defined contribution pension scheme on behalf of its employees. For the defined contribution scheme, contributions paid in the period are charged to the income statement.  For the defined benefit scheme, actuarial calculations are performed in accordance with IAS 19 in order to arrive at the amounts to be charged in the income statement and recognised in the statement of comprehensive income.  The defined benefit scheme is closed to new entrants and future accrual.
 
Under IAS 19, the Group recognises all movements in the actuarial funding position of the scheme in each period.  This is likely to lead to volatility in shareholders' equity from period to period.
 
The IAS 19 figures are based on a number of actuarial assumptions as set out below, which the actuaries have confirmed they consider appropriate.  The projected unit credit actuarial cost method has been used in the actuarial calculations.
 




 


30 September
2020


30 September
2019


31 March 
2020




 


 


 


 




Salary increases


n/a


n/a


n/a




Pension increases (post 1997)


2.8%


3.0%


2.6%




Discount rate


1.4%


1.7%


2.3%




Inflation assumption - RPI


2.85%


3.1%


2.6%




Inflation assumption - CPI


1.95%


2.2%


1.7%




 
The demographic assumptions used for 30 September 2020 were the same as those used at 31 March 2020, and were based on the last full actuarial valuation performed as at 31 March 2019. The contributions expected to be paid during the year to 31 March 2021 are £300,000. The next triennial valuation is due as at 31 March 2022.
 
The defined benefit scheme funding has changed under IAS 19 as follows:




 
 
Funding status


           Unaudited
 six months ended
30 September
2020
£000


             Unaudited
 six months ended
30 September
2019
£000


 
Year ended
31 March
2020
£000




Scheme assets at end of period
 


15,789


16,861


14,538




Benefit obligations at end of period


(18,231)


(19,652)


(16,497)




Deficit in scheme


(2,442)


(2,791)


(1,959)




Related deferred tax asset


415


474


333




Net pension liability


(2,027)


(2,317)


(1,626)




 


 


 


 




The increase in the net pension liability since 31 March 2020 is mainly due to an increase in the value of liabilities as a consequence of a reduction in bond yields reducing the discount rate.
 
 
7              Non-underlying items




 
 
 


Unaudited 
six months ended 
30 September
2020


Unaudited 
six months ended 
30 September
2019


 
Year ended 
31 March
2020


 




 


£000


£000


£000


 




Group reorganisation


106


672


712


 




Hedge ineffectiveness


124


-


138


 




Share-based payment charge


17


14


59


 




Non-underlying operating costs


247


686


909


 




Taxation


 


 


 




- tax effect of non-underlying costs


-


-


-




 


 


 


 




 


247


686


909



 
 
 
 
 
 
 
 



 
During the half year ended 30 September 2020, the Group continued to realign the cost base to the reduced levels of revenue, incurring Group reorganisation costs of £106,000, which include redundancy and related costs. 
The hedge ineffectiveness charge of £124,000 in 2020 arises from a reduction in highly probable Euro denominated sales as a result of economic disruption to our customers caused by COVID-19.
 
 
8              Net debt




 
 
 


Unaudited 
six months ended 
30 September
2020


Unaudited 
six months ended 
30 September
2019


 
Year ended 
31 March
2020




 


£000


£000


£000




Financial liabilities


 


 


 




Net cash


(505)


(599)


(457)




Current instalments due on finance leases


1,003


1,022


1,103




Invoice finance liability


2,261


3,137


1,925




Net debt due in less than one year


2,759


3,560


2,571




 


 


 


 




Instalments due on finance leases in greater than one year


1,941


2,491


2,037




 


 


 


 




Net debt


4,700


6,051


4,608




 


 


 


 




 
 
9          SUBSEQUENT EVENTS
 
On 16 December 2020, the Company announced that it had received notice from its major customer, BorgWarner Turbo Systems Worldwide Headquarters GmbH, of its intention to cancel all contracts with effect from 22 January 2021. Following this announcement, it became evident that the Company was not in a position to publish its 2020 Accounts by the agreed extended date of 31 December 2020 in accordance with AIM Rules. Consequently, the Company's shares were suspended from trading on AIM with effect from 4 January 2021.
 
The Board and its advisers immediately implemented measures to reduce costs and preserve cash whilst exploring options to strengthen the balance sheet in order to safeguard the Company's future. After evaluating a number of alternative options with its advisers, the Company issued a £200,000 unsecured convertible loan note to Mr Trevor Brown in February 2021 to provide immediate short-term working capital, which was converted into 3,333,333 Ordinary Shares following Shareholder approval at the General Meeting held on 8 March 2021. On that same date, Mr Trevor Brown was appointed to the Board of Chamberlin as a Non-Executive Director.
 
The Board continued to explore further funding possibilities and on 26 March 2021 announced that the Company had raised net proceeds of £3.3 million by way of a Share Placing and Subscription. The primary purpose of the Share Placing and Subscription was to fund working capital and to meet the restructuring costs associated with reducing the cost base to a level appropriate to the lower ongoing revenue of the Group. Following the publication and filing of the annual audited accounts for the year end 31 March 2020 and the publication of the interim results for the six months ended 30 September 2020, the Company will immediately apply for the suspension of trading of the Company's Ordinary Shares on AIM to be lifted by the London Stock Exchange.
 
 
 
10           Interim report
 
This interim results statement is available on the Group's website, www.chamberlin.co.uk.
 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
  END
 
 
IR IAMJTMTTBTFB