REG - CT Automotive Group - Final Results
07/05/2025 07:00
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RNS Number : 6500H CT Automotive Group PLC 07 May 2025
7 May 2025
CT Automotive Group PLC
("CT Automotive" or the "Group")
Technology Adoption Drives Significant and Sustainable Margin Improvement
CT Automotive, a leading designer, developer and supplier of interior
components to the global automotive industry, today announces its results for
the year ended 31 December 2024 ("FY24").
CEO Simon Phillips commented:
"Our response to the headwinds facing the auto industry in 2024 was to focus
on what was within our control, namely strengthening our business and
streamlining our operations. Foremost amongst our achievements was the 600
basis points improvement in our gross margin from 22% to 28% driven by our
successful adoption of key digitisation and automation strategies. This
enabled us to achieve a 5% increase in adjusted profits before tax to $8.7
million despite revenues reducing as anticipated by 16% as the pent-up
consumer demand post-COVID that had driven sales in 2023 began to subside,
leading OEMs to reduce inventories.
Looking ahead, in a rapidly evolving and uncertain geopolitical landscape we
are maintaining a cautious approach. At the same time, as one of the
industry's most efficient, reliable and cost-effective manufacturers we also
believe the current unsettled environment will create some opportunities for
us to help our customers find efficiencies and long-term solutions for their
future production plans."
In the short film below, CEO Simon Phillips answers 5 key questions on trading
and outlook:
Financial highlights(*)
FY24 FY23 % Change
$m $m
Revenue 119.7 143.0 (16%)
Gross profit 33.1 30.9 7%
Gross profit margin 28% 22% +600bps
Adjusted EBITDA** 16.3 6.1 1%
Adjusted PBT** 8.7 8.3 5%
Reported PBT 7.5 5.9 26%
Adjusted Earnings per share 11.8c 11.3c 5%
Net debt*** 6.2 3.8 (63%)
*The above figures are derived from continuing operations only
** Adjusted for non-cash foreign exchange translation losses of $1.2m
(FY23:nil) and non-recurring items of nil (FY23:2.4m) as explained in Notes 4
and 12 below
*** Net debt excludes IFRS 16 lease liabilities
FY24 Financial Highlights
· Year on year revenue decreased to $119.7 million (FY23: $143.0
million) following industry-wide realignment of production as OEMs destocked
to normal levels following the pent-up consumer demand post-COVID that had
driven sales in 2023
o Tooling revenues increased by 9% to $12.0 million (FY23: $10.9 million) on
an improved margin
o Production revenue reduced by 18% to $107.7 million (FY23: $132.0 million)
· Gross profit margin increased by 600 basis points to 28% (FY23: 22%)
driven by continued integration of AI, automation, and digitisation strategies
alongside cost efficiencies gained across all manufacturing platforms.
· Adjusted EBITDA increased by $0.2 million against the prior year to
$16.3 million, which highlights the resilience of the business to continue to
operate efficiently under tough industry conditions.
· Adjusted PBT was $8.7 million (FY23: $8.3 million) driven by margin
efficiencies, lower fixed costs and lower borrowing costs.
· Net debt was $6.2 million (FY23: $3.8 million), aligning with our
expectations as we concentrated on realigning vendor payment terms and
following our investment of $3.2 million in capital expenditures to further
drive growth.
FY24 Operational Highlights
· Solid operational performance, with all manufacturing centres in
China, Mexico and Türkiye improving their efficiency and driving the Group's
overall gross margin performance.
· In China, there was further consolidation of manufacturing
facilities, with production now being concentrated in Ganzhou.
· Türkiye remains at full capacity despite a difficult political and
economic backdrop.
· Mexico is well-positioned, with ongoing business from the US.
Production is expected to step-up in 2025 as new programmes launch.
· In 2024, eight significant new contracts were won valued at $38
million annually with production scheduled to begin at our facilities in
Mexico and China in the second half of 2025 and into 2026.
Current Trading, Tariffs and Outlook
· Trading in the first quarter of 2025 was in line with management
expectations benefitting from ongoing operational efficiencies and the
commencement of new production programmes.
· Naturally, the outlook for the business has become more complex
with the uncertainty caused by tariffs and the extent to which this may impact
customer production plans and global supply chains.
· Importantly, the Group had already proactively near-shored a
number of production programmes supplying the US, with products manufactured
in its Chinese facilities transferring to Mexico.
· While tariffs present challenges, they also create opportunities. In Q1
2025, customers chose to relocate three new programmes to CT Automotive to be
produced in our Mexico facility, primarily to mitigate the potential impact of
tariffs adding approx. $10 million of annual revenue.
· CT Automotive will continue to focus on the factors within its
control, remaining agile and responsive to commercial opportunities, while
accelerating the rollout of AI, automation, and digitisation across the
business. These initiatives are central to driving further margin improvement
and establishing a highly cost-efficient platform to support future growth.
· Overall, the market environment has become significantly more
uncertain however, the Board believes the business remains in a robust
position and on track to deliver mid-single digit revenue growth together with
further margin expansion in FY25.
Investor Presentation
Simon Phillips, Chief Executive Officer and Salman Mohammed, Chief Financial
Officer, will provide a live presentation relating to the Full Year Results
via Investor Meet Company on 8 May 2025, 10:00 BST.
Investors can sign up to Investor Meet Company for free and add to meet CT
AUTOMOTIVE GROUP PLC via:
https://www.investormeetcompany.com/ct-automotive-group-plc/register-investor
(https://www.investormeetcompany.com/ct-automotive-group-plc/register-investor)
Enquiries:
CT Automotive Via Novella
Simon Phillips, Chief Executive Officer
Salman Mohammed, Chief Financial Officer
Singer Capital Markets Advisory LLP (Nominated Adviser and Broker) Tel: +44 (0)20 7496 3000
Steve Pearce, Alex Bond, James Todd
Novella Communications (Financial Public Relations) Tel : +44 (0)20 3151 7008
Tim Robertson, Safia Colebrook ctautomotive@novella-comms.com (mailto:ctautomotive@novella-comms.com)
Notes to editors
CT Automotive is engaged in the design, development and manufacture of bespoke
automotive interior finishes (for example, dashboard panels and fascia
finishes) and kinematic assemblies (for example, air registers, arm rests,
deployable cup holders and storage systems), as well as their associated
tooling, for the world's leading automotive original equipment manufacturers
("OEMs") and global Tier One manufacturers.
The Group is headquartered in the UK with a low cost manufacturing footprint.
Key production facilities are located in Shenzhen and Ganzhou, China with
additional manufacturing facilities in Mexico and Türkiye and distribution
facilities and assembly lines in Europe, Asia and the US. The Company has a
low cost design and administrative centre in India.
CT Automotive's operating model enables it to pursue a price leadership
strategy, supplying high quality parts to customers at a lower overall landed
cost than competitors. This has helped the Group build a high-quality
portfolio of OEM customers, both directly and via Tier One suppliers including
Forvia and Marelli. End customers include volume manufacturers, such as
Nissan, Ford, GM and Volkswagen Audi Group, and premium luxury car brands such
as Bentley and Lamborghini. In addition, the Group supplies all our customer
base with a range of products for PHEV and BEV platforms and supplies electric
car manufacturers, including Rivian and a US based major EV OEM.
The Group currently supplies component part types to over 55 different models
for 22 OEMs. Since its formation, the Group has been one of the very few new
entrants to the market, which is characterised by high barriers to entry.
CHAIR'S STATEMENT
Overview
Against the backdrop of an automotive market in transition, I am pleased to
present a robust performance by CT Automotive for the 12 months to 31 December
2024. As anticipated, car manufacturing volumes across the industry reduced in
2024, especially in the fourth quarter. Nevertheless, the Group capitalised on
its investment in AI, digitisation and automation to significantly increase
gross profit margins leading to an 5% increase in adjusted PBT.
Amid ongoing market volatility there are opportunities that play to CT
Automotive's strengths. The emergence of Chinese OEMs establishing plants
outside of China is putting pressure on established OEMs to focus intensively
on improving profitability. As an agile operator with the ability to deliver
low manufacturing costs in our product ranges, CT Automotive is positioned to
deliver solutions to automakers under pressure to find cost savings.
Strategically well placed
CT Automotive remains strategically well-placed supplying 22 major OEMs
globally. We view this as a good position to build from. Customers include
premium brands such as Lamborghini and Bentley, volume producers such as
Nissan and Ford and pure Electric Vehicle (EVs) brands such as Rivian. The
volume of work for each customer varies but the potential to expand is made
significantly easier by having an existing relationship.
Critical to this is being powertrain agnostic. CT Automotive manufactures high
quality components for all vehicle types including Battery Electric Vehicles
(BEV), Plug-in Hybrid Electric Vehicles (PHEV) and Internal Combustion Engines
vehicles (ICE). The absence of power-train bias means that industry trends
such as the speed of transition to EV, does not overly impact our business and
instead the Company is positioned to flex to prevailing trends and demand
requirements.
Core to the Company is our relentless commitment to reducing manufacturing
costs, providing OEMs with the opportunity to meet their financial targets and
in turn, achieving our own. Our ongoing investment in large-scale digitisation
and automation in 2024 has significantly bolstered our cost-efficient, highly
automated, and advanced manufacturing capabilities. We are confident this
strengthened competitive position will help drive new business wins and
increase participation in tenders across our existing customer base.
Geographically, the Group is strategically positioned across three key
locations, China, Türkiye, and Mexico, enabling us to deliver optimal tax and
cost efficiency for our customers. Our Mexico facility, which opened in 2022,
has been a significant success, playing a crucial role in securing several new
business wins in the second half of FY24 across a number of OEMs and more
recently in attracting new business from customers looking to reduce tariff
exposure. We continue to assess the best locations globally from which to
serve our customers and remain agile to relocate should that be in the best
interests of the OEMs we support.
Changing Geopolitical environment
The US government's new approach to trade and the introduction of global trade
tariffs are reshaping the dynamics of world markets. It remains too early to
determine the full impact, as the situation is still rapidly evolving and is
yet to stabilise. The Company has already near-shored several production
programmes supplying the US with products previously manufactured in its
Chinese facilities transferring to Mexico.
CT Automotive generates approximately $25 million in annual sales tied to the
U.S. market, with $15 million currently produced in China and $10 million from
Mexico. The majority of the remaining Chinese manufactured product is due to
transfer to Mexico this year.
All applicable tariffs are either directly or indirectly passed on to our
customers, though they still influence the broader economic landscape. Nine of
the eleven vehicles sold into the US which we support are manufactured there,
meaning these vehicles are not subject to the 25% import tariff on complete
units.
Some Japanese automakers currently dual-source complete vehicles for the U.S.
market from both Japan and US based plants. As a result of tariff pressure,
they are increasingly shifting output to their US facilities, which has led to
a net increase in demand for CT Mexico's production. The key risks CT faces
from tariffs include a potential reduction in consumer demand due to higher
vehicle prices, and supply chain disruptions that may impact production flow
and delivery reliability. With so many moving parts it is too early to predict
how the automotive market will fare, therefore from a Company perspective, we
will continue to focus on the areas we can control, whilst closely monitoring
the situation as it unfolds and react accordingly.
Board Changes
During 2024, we welcomed Salman Mohammed to the Board as Chief Financial
Officer, replacing Anna Brown who stepped down from the role in October 2024.
Salman was promoted from within the business having previously held the role
of Group Financial Director and is a strong addition to the wider Executive
team. At the end of the financial year, Francesca Ecsery, Non-Executive
Director, stepped down from her role due to other commitments. Following
Francesca's departure from the Board, Geraint Davies has been appointed as
Senior Independent Director.
We are grateful for both Anna and Francesca's contribution and wish them well
for the future.
Financial Performance
In FY24 the Group delivered a robust financial performance, maintaining strong
profitability despite the challenges of reduced manufacturing volumes across
the industry. The Group mitigated the impact of broader market headwinds
through margin efficiency programs at all operational sites, its
powertrain-agnostic position between ICE and EVs, and ongoing efforts to drive
operational efficiencies via automation, digitisation, and a specific focus on
AI.
As expected, production volumes declined in line with the broader automotive
industry with total revenues 16% lower to $119.7 million (FY23: $143.0
million). This was made up of $107.7 million of production revenue and $12.0
million of tooling revenue.
The Group again delivered significant gross margin improvement from 22% to
28%. Despite the reduction in revenues, cost controls and operational
efficiencies enabled the Company to increase adjusted profitability to $8.7
million (FY23: $8.3 million). Reported EPS increased by 3% to 10.4c (FY23:
10.1c) on continuing operations.
Cash Management remained a key focus in Q4 due to the downturn in the
automotive industry, which led to net debt at 31 December increasing to $6.2
million versus $5.8 million at 30 June 2024 (excluding IFRS 16 lease
liabilities).
In October, the Group entered into a new debt facility to refinance its
existing working capital facility, providing total funding of up to $20
million and extending out to October 2027. The new agreement is with FGI
Worldwide LLC and provides the flexibility to support the Group's future
growth.
I am immensely proud of our performance in 2024 and I believe we are well
positioned going forwards.
CEO'S STATEMENT
Introduction
Trading in 2024 was shaped by three key external factors: high interest rates,
ongoing economic uncertainty, and the normalisation of production post-COVID.
The pent-up consumer demand that had driven sales in 2023 began to subside,
leading OEMs to reduce inventories. These were all factors outside the Group's
control. In response, we focused on what we could control, specifically, cost
of sales and optimising our fixed cost base. This strategy proved highly
effective, as we leveraged efficiencies gained through the integration of AI,
automation, and digitization. As a result, the Group achieved a significant
improvement in gross profit margin, driving profitability even amid the sales
slowdown.
Looking ahead to 2025, several factors are driving transformation within the
automotive sector including the ongoing shift to electric vehicles (EVs), the
rise of new Chinese automakers, and the recent introduction of tariffs. As a
drivetrain-agnostic manufacturer, our products are compatible with all vehicle
types, and on balance, we stand to benefit from the transition to hybrid and
EV platforms, which typically require higher product content. While the impact
of tariffs is still unfolding, our ability to shift production to Mexico,
combined with the flexibility and lean structure of CT Automotive, positions
us well to manage any impact and potentially to capture market share.
Expansion of Sales Reach and Expertise
In 2024, a primary objective was to become one of the lowest-cost
manufacturers in our industry, which we have now achieved. From this position
the Company is well placed to offer cost effective solutions in our product
categories and is using this advantage to win new customer orders.
To that end, the Company significantly invested in the sales function
globally, extending its reach and expertise. Targeting OEMs and Tier 1
suppliers, the expanded sales team is showcasing the Company's competitive
pricing structures, while maintaining the highest levels of quality and
service.
In 2024, eight significant new contracts were won, across a number of OEM's,
representing a key step in our strategic growth plan. These new contracts
include programmes valued at $38m annually with production spread across our
Mexico and Chinese production facilities commencing in H2 2025 and 2026.
In Q1 2025, customers decided to transfer three existing production programs
to CT Automotive to commence production in our Mexico facility, primarily to
mitigate tariff exposure and due to CT Automotive's proven capability to
quickly replicate production lines. All three programmes are scheduled to
begin production in late 2025 and contribute approx. $10 million to annual
revenue.
AI Transforming CT Automotive
AI is driving a profound transformation across our business, delivering
tangible benefits from production planning to human resources. The primary and
most immediate impact is cost reduction, with some applications achieving
return on investment in under a year. Using AI-driven decision making, the
Group is able to react to challenges and opportunities faster than ever
before, ensuring a faster response to customer demands.
A prime example of AI in action is in our AI-powered production planning for
injection moulding. Previously, this process involved a team of six people in
our Chinese manufacturing sites but is now a fully AI automated process. This
significantly reduced our changeover times, improved consistency and cut
direct labour by 35%, saving circa $1 million during 2024. We are currently
engaged in feasibility studies to implement AI-driven production planning into
our facilities in Türkiye and Mexico. Similarly, in quality control, AI has
eliminated human error and provided consistent, reliable results in a
fraction of the time, resulting in lower overheads, faster execution, and
a higher standard of service for our customers.
China
This region delivered a stable performance in FY24, with strong demand
particularly from Japan and Europe. As part of the Company's ongoing
cost-reduction efforts, our manufacturing operations in China are now
primarily concentrated at our Ganzhou plant, which benefits from lower labour
costs. In Shenzhen tooling capabilities have been enhanced with new machinery
reducing reliance on third party suppliers.
Türkiye
In Türkiye hyperinflation and volatile currency fluctuations persist,
creating a challenging landscape for operations. Despite this, our
manufacturing site in Gebze remains at full capacity. Looking ahead, we are
actively exploring ways to enhance both the prospects and capacity of our
manufacturing base in this region.
Mexico
Mexico is a key location for the Company. Established in 2022, the
manufacturing plant is ideally situated for near-shoring production for North
American OEM's allowing us to reduce costs and react more quickly to changes
in customer production programmes. Customers who have chosen to transfer
production to Mexico to date have not altered their plans following the change
in US Government. In 2024, we secured new contracts that will bring $20
million in annual production to Mexico, highlighting the sites appeal and
cost-effective production capabilities. To meet the growing demand projected
for 2026 and beyond, additional investment will be required to expand
operations.
Quality control
Customer satisfaction in the automotive industry requires the consistent
delivery of high-quality products. Working with and gaining the trust of
nearly all the world's largest OEMs would not be possible without rigorous
internal quality control systems. Throughout the production process, there are
continuous quality checks and our adoption of automated AI production
processes ensures high quality consistency of product. Reflecting the
performance levels achieved in quality control, our Mexico plant was certified
under the IATF 16949:2016 standard in August 2024. The China and Türkiye
plants were recertified under this standard in FY21.
Sustainability
CT Automotive is fully dedicated to sustainability and corporate social
responsibility, monitoring the environmental impact of our operations and
seeking ways to reduce our electricity usage, waste and water. In 2024, as
part of furthering our commitment to sustainability, we were pleased to
receive the Eco Vadis Silver Award. Placing us in the top 15% of companies
assessed by Eco Vadis, we scored highly in Environment, Ethics, Labour and
Human rights and Sustainable Procurement.
Our People
As always, I would like to recognise the excellent efforts from all our teams
across the globe. In total, the business employs c.1,900 people and I would
like to thank all of them for their contribution to the performance of the
business in 2024 and for their ongoing commitment. We are able to be a dynamic
and agile business due to the ability of our people to adapt and embrace
change quickly, which has been and will continue to be, a central part of our
success.
Current trading, tariffs and outlook
Trading in the first quarter of 2025 was positive benefitting from ongoing
operational efficiencies and the commencement of new production programmes.
Naturally, the outlook for the business has become more complex with the
uncertainty caused by tariffs and the extent to which this may impact customer
production plans and global supply chains.
Importantly, the Group had already proactively near-shored a number of
production programmes supplying the US, with products manufactured in its
Chinese facilities transferring to Mexico.
While tariffs present challenges, they also create opportunities. In Q1 2025,
customers chose to relocate three new programmes to CT to be produced in our
Mexico facility to mitigate the potential impact of tariffs adding approx. $10
million of annual revenue.
CT Automotive will continue to focus on the factors within its control,
remaining agile and responsive to commercial opportunities, while accelerating
the rollout of AI, automation, and digitisation across the business. These
initiatives are central to driving further margin improvement and establishing
a highly cost-efficient platform to support future growth.
Overall, the market environment has become significantly more uncertain
however, the Board believes the business remains in a robust position and on
track to deliver mid-single digit revenue growth together with further margin
expansion in FY25.
FINANCIAL REVIEW
Overview
Margin management remained the key priority in FY24 with the focus on cost
efficiencies across all our manufacturing platforms. These efforts were
rewarded with gross profit margin increasing to 28% from 22% driven primarily
by the integration of AI, automation and digitization and reducing our direct
workforce by 17%.
Group revenue decreased year-on-year to $119.7 million (2023: $143 million) as
the pent-up consumer demand post-COVID that had driven sales in 2023 began to
subside, leading OEMs to reduce inventories.
Adjusted EBITDA increased by $0.2 million against the prior year to $16.3
million which highlights the resilience of the business in tough industry
conditions.
Adjusted profit before tax rose by 5%, reaching $8.7 million compared to $8.3
million in FY23. This improvement was driven by margin efficiencies and lower
fixed costs.
Basic earnings per share increased by 3% to 10.4c
Currency movements negatively impacted PBT by $1.8 million (FY23: $0.9 million
gain). The currency movements were split between "cash impacting movements" of
$0.6 million (FY23: $0.9 million gain) and "foreign exchange translation
losses" of $1.2 million (FY23: nil). We continue to hedge our currency
exposure between USD and CNY as part of our strategy to remove volatility vs
future forecasts. Adjusted EBITDA and Adjusted profit before tax in FY24 only
exclude "foreign exchange translation losses".
Revenues and Margins
Production revenue declined by 18% to $107.7 million, down from $132.0 million
in FY23, as production volumes adjusted in the first half of FY24 to better
align with consumer demand. The challenge persisted into Q4, with major OEMs
opting to reduce inventory levels in response to rising interest rates and
concerns regarding government-imposed EV quotas. Compared to the average run
rate for Q1 to Q3, Q4 revenues dropped by $3.5 million. This decrease
adversely affected margins, as a larger proportion of semi-fixed costs had to
be absorbed.
In contrast, tooling revenue rose by 9.5% to $12.0 million, up from $10.9
million in FY23, boasting a favourable 30% margin. This growth positions
tooling as a critical factor in driving future production revenue.
Despite the reduction in overall revenue, gross profit increased to $33.1
million from $30.9 million in 2023, and gross margins improved to 28%,
compared to 22% in the previous year. This improvement reflects a dedicated
focus on cost efficiencies across our manufacturing platforms, achieved
through the strategic integration of AI, automation, and digitization, which
collectively enabled the Group to enhance profitability amid industry-wide
volume reductions.
Distribution and Administrative Expenses
On a reported basis distribution and administrative costs rose by 5%. Within
administrative expenses, we incurred $1.8 million in foreign exchange losses
compared to a gain of $0.9 million in FY23. Excluding these currency impacts,
distribution and administrative costs decreased by 7% primarily through lower
distribution costs in line with revenue, a reduction in our administrative
workforce of 8% and lower depreciation and amortisation costs as the useful
life of assets was reassessed following a review of all fixed assets across
the group.
Total currency-related losses included in administrative expenses amounted to
$1.8 million, compared to a $0.9 million gain in FY23. This included $1.2
million in non cash foreign exchange translation losses (FY23: $nil), along
with an additional $0.6 million loss (following a $0.9 million gain)
attributed to revaluation of foreign currency bank accounts and forward
hedges.
EBITDA and operating result
Adjusted EBITDA increased by $0.2 million to $16.3million. Throughout the
year, our focus centred on enhancing margin efficiencies to navigate industry
realignment and cement our position as a leading cost-effective manufacturer
in the automotive components sector. We continuously seek to improve processes
through technology adoption, aiming to enhance customer experiences.
Taxation
In FY24, the Group recognized a tax credit of $0.2 million, compared to a
credit of $0.6 million in FY23. This year's tax credit results primarily from
the utilization of prior year losses in the UK and China and adjustments
reducing prior year tax accruals.
The Group employs a transfer pricing policy based on residual profit
allocation, which assigns a risk level to each entity within the Group. Under
this policy, profits are allocated to entities where key decisions are made,
as these entities typically carry a higher risk profile. Notably, our Mexican
facility is currently excluded from this policy, as it is regarded as a new
entity with a fixed cost base designed to support future revenue growth,
making it loss making. This arrangement undergoes an annual review to ensure
its continued relevance and alignment with the Group's strategic objectives.
Discontinued operations
In FY24, the Group successfully completed the liquidation process of Chinatool
Automotive Systems Limited (CAS), a decision initially announced in FY22 due
to challenges posed by severe labour shortages and inflationary pressures on
energy costs and wages. This strategic move resulted in a gain of $0.8 million
attributed to the discontinued operation, compared to a $0.2 million loss in
FY23. The gain primarily arose from the write-back of balance sheet items held
prior to the announcement of the liquidation.
Profit from continuing operations and EPS
Adjusted profit before tax increased to $8.7 million from $8.3 million in
FY23. The reported profit before tax also saw a rise, reaching $7.5 million
compared to $5.9 million in FY23. This improvement reflects the Group's robust
financial performance amid challenging conditions. Notably, non-recurring
costs in FY24 were nil, compared to $2.4 million in FY23, as the net impact of
hyperinflation in Türkiye was negligible.
Reported profit after tax from continuing operations climbed to $7.6 million,
up from $6.6 million in the previous year. As a result, reported basic
earnings per share (EPS) from continuing operations improved to 10.4 cents, up
from 10.1 cents in FY23.
Non-recurring items
During FY24 non-recurring items representing a net cost of $nil (FY23: $2.4
million), highlighting the enhanced control environment across the Group and
the swift response of senior management to emerging situations.
Capital structure, working capital and interest
Since the end of December 2023, the Group's net asset value has increased
significantly to $26.2 million, up from $17.0 million. This growth has been
supported by an increase in net current assets, which rose from $4.3 million
to $13.9 million.
Despite the challenging trading conditions in Q4, characterized by reduced
industry demand, the Group strategically focused on improving its financial
position. Trade receivables decreased as a result of these conditions,
alongside a concerted effort to reduce trade payables by $5.0 million, thereby
strengthening the Group's working capital.
The Group has continued to manage its working capital prudently, effectively
utilizing available debt facilities and cash generated from operations. As of
December 31, 2024, cash and cash equivalents stood at $3.6 million, compared
to $9.4 million in FY23.
Net debt as of December 31, 2024, was $6.2 million, up from $3.8 million in
FY23, and was notably higher due to the timing of the December payroll
payments in China, amounting to $1.7 million, which were paid in early January
2024. On a comparable basis, net debt FY23 would have been $5.5 million.
After applying IFRS 16 accounting standards for right-of-use assets related to
current and non-current lease liabilities, net debt further adjusts to $13.5
million, compared to $12.7 million in the previous year.
Cash flow
The Group continues to demonstrate its strong cash-generating capability,
achieving net cash from operations before investments in working capital of
$16.1 million in FY24, compared to $14.6 million in the previous year. Of this
amount, $8.5 million was reinvested into working capital, compared to $6.5
million in FY23.
Several factors influenced the working capital dynamics this year:
· Trade and Other Receivables: There was a decrease of $5.8
million, primarily due to lower revenue in Q4 and the timing of tooling
revenue recognition at year-end.
· Inventories: Increased by $1.2 million, reflecting strategic
inventory builds in Mexico to support upcoming program launches anticipated in
FY25.
· Trade and Other Payables: Decreased by $13.2 million as the
Group addressed overdue vendor payments accumulated during the COVID-19
pandemic in China and adjusted for the net impact of deferred revenue timing
on tooling projects.
Consequently, cash generated from operations was marginally lower than the
previous year, totalling $7.6 million compared to $8.1 million in FY23.
Throughout the year, the Group paid $2.1 million in interest costs related to
borrowings and lease liabilities, a decrease from $2.5 million in FY23. This
reduction was due to a $3.3 million decrease in borrowings.
In alignment with its strategic vision for future growth, the Group invested
$3.2 million in property, plant, and equipment, focusing on opportunities that
enhance operational capabilities. This investment included advancements in
robotics, which contributed to improved margin efficiencies throughout FY24.
FGI Facility
On October 11, 2024, the Group transitioned its borrowing facilities from HSBC
trade loans and invoice financing to a new three-year agreement with FGI
Worldwide LLC (FGI), set to conclude in October 2027. This strategic move
offers enhanced financial flexibility by providing borrowing solutions in two
key areas of the balance sheet:
1. Inventory Financing: Focused on inventory transfers from China to
the UK and USA.
2. Accounts Receivables Financing: Covering the accounts receivables of
the Group's facilities in the UK, USA, and Mexico. Notably, facilities in
China and Türkiye are excluded from this borrowing arrangement.
Under the terms of the FGI facility, the Group is required to maintain a Fixed
Cost Cover Ratio (FCCR) of at least 1.5x on a trailing twelve-month basis. As
of December 31, 2024, the Group reported an FCCR of 1.9x, demonstrating
substantial headroom above the minimum requirement. This robust performance
underscores the Group's prudent financial management and operational
efficiency.
The Group is committed to maintaining compliance with this covenant and
submits updated FCCR calculations to FGI on a monthly basis. Additionally,
comprehensive stress testing of future financial forecasts indicates
significant headroom, assuring the Group's ability to comfortably sustain the
ratio above the stipulated threshold, supporting ongoing financial stability
and strategic growth initiatives.
Going Concern
The Directors believe that the Group is well placed to manage its business
risks and having assessed the Group's business activities and factors likely
to affect future performance, including a review of forecasts and predictions,
taking account of reasonable possible changes in trading performances and
available borrowing facilities, they have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the next
twelve months following the date of approval of the financial statements.
Therefore, the Directors continue to adopt the going concern basis of
accounting in preparing the financial statements.
Refer to note 1 of accounting policies below.
Consolidated Statement of Profit or Loss and other Comprehensive Income
For the year ended 31 December 2024
Notes 2024 2023
$'000 $'000
Continuing operations:
Revenue 3 119,748 142,974
Cost of sales (86,644) (112,118)
Gross profit 33,104 30,856
Distribution expenses (2,206) (3,150)
Other operating income 717 807
Administrative expenses (22,059) (20,041)
EBITDA (before non-recurring items) 15,024 16,090
Depreciation (5,315) (4,950)
Amortisation (153) (294)
Non-recurring items 4 - (2,374)
Operating profit 9,556 8,472
Finance income 49 -
Finance expenses (2,130) (2,535)
Profit before tax 7,475 5,937
Taxation credit 166 616
Profit for the year from continuing operations 7,641 6,553
Discontinued operations
Profit/(loss) for the year from discontinued operations 808 (238)
Profit for the year attributable to equity shareholders 8,449 6,315
Profit attributable to:
Owners of the Company 8,650 6,313
Non-controlling interests (201) 2
8,449 6,315
Other comprehensive income / (loss)
Items that are / may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations 715 (1,426)
Other comprehensive Income/(loss) for the year, net of income tax 715 (1,426)
Total comprehensive income for the year 9,164 4,889
Total earnings per share
From continuing operations:
Basic earnings per share 5 10.4c 10.1c
Diluted earnings per share 5 10.0c 9.7c
From continuing and discontinued operations:
Basic earnings per share 5 11.5c 9.7c
Diluted earnings per share 5 11.1c 9.4c
Consolidated Balance Sheet
As at 31 December 2024
Notes 2024 2023
$'000 $'000
Assets
Non-current assets
Goodwill 1,259 1,259
Intangible assets 207 314
Property, plant and equipment 6 7,644 7,089
Right of use assets 6,750 7,895
Deferred tax assets 1,627 1,571
17,487 18,128
Current assets
Inventories 27,676 25,997
Tax receivable 223 261
Trade and other receivables 25,667 30,578
Cash and cash equivalents 3,628 9,440
57,194 66,276
Current liabilities
Trade and other payables (30,203) (43,390)
Other interest-bearing loans and borrowings 7 (9,860) (13,198)
Derivative financial liabilities (49) (52)
Corporate tax payable (1,060) (1,847)
Current lease liabilities (2,109) (3,492)
(43,281) (61,979)
Non-current liabilities
Non-current lease liabilities (5,222) (5,458)
(5,222) (5,458)
Net assets 26,178 16,967
Equity attributable to owners of the Company
Share capital 9 484 484
Share premium 9 63,696 63,696
LTIP reserve 9 51 4
Translation reserve 9 (682) (1,397)
Accumulated Deficit 9 (1,420) (10,070)
Merger reserve 9 (35,812) (35,812)
26,317 16,905
Non-controlling interest 9 (139) 62
Total equity 26,178 16,967
Total equity
26,178
16,967
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Share capital Share premium LTIP reserve Translation reserve Accumulated deficit Mergers reserve Total equity before NCI Non-controlling interest Total Equity
$000 $000 $000 $000 $000 $000 $000 $000 $000
At 1 January 2023 342 54,717 - (347) (16,323) (35,812) 2,577 - 2,577
Total Comprehensive Income for the year
Profit for the year - - - - 6,313 - 6,313 2 6,315
Recognition of LTIP reserve - - 4 - - - 4 - 4
Foreign currency translation - - - (1,050) - - (1,050) - (1,049)
Total comprehensive income/loss for the year - - 4 (1,050) 6,313 - 5,267 2 5,269
Transaction with equity:
Share issue 142 9,488 - - - - 9,630 - 9,630
Issuance cost - (510) - - - - (510) - (510)
Share issue in CT-Mexico - - - - (60) - (60) 60 -
142 8,978 - - (60) - 9,060 60 9,120
At 31 December 2023 and at 1 January 2024 484 63,696 4 (1,397) (10,070) (35,812) 16,905 62 16,967
Total Comprehensive Income for the year
Profit for the year - - - - 8,650 - 8,650 (201) 8,449
Foreign currency translation - - - 715 - - 715 - 715
Total comprehensive income/loss for the year - - - 715 8650 - 9,365 (201) 9,164
Transaction with equity:
Recognition of LTIP reserve - - 47 - - - 47 - 47
- - 47 - - - 47 - 47
At 31 December 2024 484 63,696 51 (682) (1,420) (35,812) 26,317 (139) 26,178
.Consolidated Statement of Cash Flows
For the year ended 31 December 2024
2024 2023
$'000 $'000
Cash flows from operating activities
Profit from continuing operations 7,641 6,553
Profit/(loss) from discontinued operations 808 (238)
Profit for the year after tax 8,449 6,315
Adjustments for:
Depreciation 5,315 4,950
Amortisation 153 294
Interest expense 2,130 2,535
Interest income (49) -
Net fair value (profits) recognised in profit or loss (3) (714)
Share based payment charge 47 4
Loss on disposal of fixed assets 402 1,136
Taxation (credit) (166) (616)
Hyperinflation impact on operating profit (210) 683
16,028 14,587
Decrease/(Increase) in trade and other receivables 5,825 (4,620)
(Increase)/Decrease in inventories (1,157) 641
(Decrease) in trade and other payables (13,155) (2,530)
Tax paid (677) (41)
Net cash generated from operating activities 6,904 8,037
Cash flows from investing activities
Purchase of intangible assets (62) (96)
Purchase of property, plant and equipment (3,138)
(3,114)
Sale of tangible fixed assets 171 -
Interest received 49 -
Net cash used in investing activities (2,980) (3,210)
Cash flows from financing activities
Gross proceeds from Share issue - 9,630
Payment of professional fees related to share issue - (509)
Repayment of lease liabilities - Principle (4,059) (3,005)
Repayment of lease liabilities - Interest (1,062) (586)
Interest paid on borrowings (1,068) (1,949)
(Repayment) of trade loans (9,000) (578)
(Repayment) of invoice finance (4,018) (2,924)
Drawdown of borrowing 9,567 -
Net cash (used in)/generated from financing activities (9,640) 79
Net (decrease)/ increase in cash and cash equivalents (5,716) 4,906
Cash and cash equivalents at beginning of year 9,440 4,471
Effect of exchange rate fluctuations on cash held (96) 63
Cash and cash equivalents at end of year (see Note 21) 3,628 9,440
1. General overview and accounting policies
CT Automotive Group Plc (the "Company") is a public Company limited by shares
listed on the Alternative Investment Market (AIM) and incorporated and
domiciled in England and Wales under the Companies Act 2006. The registered
number is 10451211 and the registered address and principal place of business
is 1000 Lakeside North Harbour, Western Road, Portsmouth, PO6 3EN.
The Company's functional and reporting currency is USD as the Group's revenue
and working capital facilities are also predominantly denominated and/or
received in USD.
The final results (referred to as the 'final results') consolidate those of
the Company and its subsidiaries (together referred to as the "Group").
The final results have been prepared and approved by the Directors in
accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards.
Measurement convention
The final results are prepared on the historical cost basis except for the
results of the foreign operations in Turkiye which are subject to
hyperinflationary accounting, and derivative financial instruments which are
stated at fair value.
Going Concern
The Directors have assessed the Group's business activities and the factors
likely to affect future performance in light of the current and anticipated
trading conditions. In making their assessment the Directors have reviewed
the Group's latest budget, current trading, available current banking debt
facilities and considered the likely impact of reasonably possible downside
sensitivities in performance and the likely impact of potential mitigating
actions.
The Directors are confident that, after taking into account existing cash and
available debt facilities, the Group has adequate resources in place to
continue in operational existence for a period of at least 12 months from the
date of approval of the financial statements. In making their assessment the
Directors have stress tested the forecast cash flows of the business.
For the purposes of stress testing, the Directors modelled a base case,
several downside scenarios, a combined downside scenario and a set of
mitigating actions to the combined downside scenario. The base case was
modelled on a prudent basis, assuming revenues based on the production
schedules and cost estimates. Positive cash headroom is maintained under the
base case scenario. Taking into account the economic outlook, expected
interest rates and geopolitical events, the Directors have identified certain
specific key risks to the base case assumptions and have modelled the
scenarios as follows:
· Reduction in revenue risk: the entire automotive market suffers a
downturn of 20% in revenue, reflecting the currently challenged and influx
automotive industry;
· Increased cost of sales risk: reflecting the impact of inflation
in cost of sales raising by 10% and inability to recover the increase in costs
from customers;
· Stockholding risk: reflecting a scenario caused by the disruption
in customer schedules due to prolonged conflicts in the Red Sea or other
plausible disruptions resulting in the need to hold more than normal stock
levels required in the distribution centres;
In addition, the Directors have modelled a combined downside scenario and
considered several controllable mitigating actions. The mitigating action
modelled are overhead reductions, removal of bonus payments, reduction in
capital expenditure and delaying tax payments. Such mitigating actions are
within Management's control and the business closely monitors appropriate lead
indicators to implement these actions in sufficient time to achieve the
required cash preservation impact. Additional mitigating actions which have
not been modelled but are available for Management to deploy, if required, are
negotiating with customers on reduced customer payment terms and extending
supplier payment terms with vendors.
In any of the scenarios noted above the combined impact of the above downside
assumptions, the stress testing model, incorporating the above principal
mitigation, demonstrates that the business is able to maintain a positive cash
balance throughout the entire going concern review period considered.
The Group currently has borrowing facilities linked to inventories and
accounts receivables through FGI Worldwide LLC. The facility is due to expire
on 10 October 2027. Covenants regarding maintaining a Fixed Cost Cover Ratio
of 1.5x are tested monthly. Forecast FCCR ratios under the above-mentioned
stress tests show that we maintain headroom in all scenarios with the relevant
mitigations in place.
As a result of the above considerations, the Directors consider that the Group
has adequate resources in place for at least 12 months from the date of the
approval of FY24 financial statements and have therefore adopted the going
concern basis of accounting in preparing the Final Results.
2. Judgements in applying accounting policies and key sources of
estimation uncertainty
The Group makes certain estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experiences may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year
are discussed below.
In preparing these financial statements, the Directors made the following
judgements:
Deferred tax asset recognition and recoverability
A deferred tax asset has been recognised as at 31 December 2024 at a value of
$1.63m. Of this deferred tax asset, $229k arises on interGroup transactions
related to provision of unrealised profits in tooling revenue. The remaining
deferred tax asset has been recognised in relation to brought forward tax
losses in the UK parent company, whereby there are estimated probable future
taxable profits against which the Group anticipates utilising these losses.
The Group has taken into consideration the future prospects and potential for
utilizing these deferred tax assets while not recognizing assets against all
available tax losses, ensuring the Group's future financial position and its
capacity to utilize such losses is appropriately reflected.
Other key sources of estimation uncertainty:
Inventories provision
Inventory is carried at the lower of cost and net realisable value. Provisions
are made to write down obsolete inventories to net realisable value. The
provision is $661,843 at 31 December 2024 (2023: $1,194,000).
Non-Controlling Interests:
The Company owned 100% of CT Automotive Systems DE, Mexico subsidiary as at 31
December 2022. On 23 November 2023, 10% of the shares in the subsidiary were
sold to Simon Phillips, CEO and Scott McKenzie, COO resulting in a
non-controlling interest in the Group's consolidated financial statements. The
Group has exercised judgement in evaluating the control it exercises over the
Mexican subsidiary after the change in ownership. Based on their evaluation,
the Group has concluded that the profits of the Mexican entity will be split
between the owners of the Group and non-controlling interests based on the
percentage ownership of the subsidiary. On the date of the transfer of
ownership, the entity held a net liability of $598,604 of which 10% is
attributable to the non-controlling interests at $59,860. The issuance of new
equity to the non-controlling interest resulted in a profit of $54,000. In
2024 the share of the loss attributable to non-controlling interest was
$201,000. The non-controlling interests are recorded separately in the
Statement of Profit or Loss, the Statement of Balance Sheet and the Statement
of Changes in Equity.
Expected credit loss
Bad debt provision
The Group had included a bad debt provision of $310,000 during the year. This
provision reflects management's assessment of the collectability of accounts
receivable based on historical collection patterns, current economic
conditions, and specific customer circumstances. The evaluation involves a
careful analysis of outstanding receivables and the estimation of potential
credit losses that may arise from defaults. By proactively setting aside this
provision, the Group aims to present a more accurate representation of its
financial position and ensure compliance with relevant accounting standards.
This approach underscores the Group's commitment to maintaining financial
integrity while effectively managing credit risk.
Recoverability of VAT in foreign jurisdictions
The Group has outstanding VAT receivables totalling £2.4m. Management has
assessed the situation based on prevailing regulations, historical recovery
rates, and ongoing discussions with relevant tax authorities. Although there
may be inherent uncertainties due to potential changes in local tax laws or
administrative procedures, it is currently expected that the outstanding VAT
amount will be fully recovered by mid-2026. This estimate has been evaluated
to ensure alignment with applicable accounting standards and to represent the
financial position as of the reporting date.
Uncertain tax positions
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in the
countries where the Company and its subsidiaries operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that a taxation authority
will accept an uncertain tax treatment. The Group measures its tax balances
either based on the most likely amount or the expected value, depending on
which method provides a better prediction of the resolution of the
uncertainty.
Hyperinflation
The Group exercises significant judgement in determining the impact of the
onset of hyperinflation in countries in which it operates and whether the
functional currency of its subsidiaries in such countries is the currency of a
hyperinflationary economy.
Various characteristics of the economic environment of each country are taken
into account. These characteristics include, but are not limited to, whether:
· the general population prefers to keep its wealth in non-monetary
assets or in a relatively stable foreign currency;
· prices are quoted in a relatively stable foreign currency;
· sales or purchase prices take expected losses of purchasing power
during a short credit period into account;
· interest rates, wages and prices are linked to a price index; and
· the cumulative inflation rate over three years is approaching, or
exceeds, 100%.
Management exercises judgement as to when a restatement of the financial
statements of a Group entity becomes necessary. Following management's
assessment, the Group's subsidiary in Türkiye has been, and continues to be
accounted for as an entity operating in a hyperinflationary economy. The
results, cash flows and financial position of Chinatool Otomotiv Sanayi Tic.
Limited Sti. have been expressed in terms of the measuring units current at
the reporting date.
The movement in the general price index in the reporting period was 44.38%
(2023: 54.5%).
In applying IAS 29 to the financial reporting of the subsidiary incorporated
in Türkiye, it is crucial to note that a deliberate judgement has been
exercised in the treatment of indexation agreements that impact consolidated
profit or loss. The impact is included as a finance expense in FY24 for
$40,000 (FY23: $146,000 included in non-recurring expenses) These specific
agreements have been intentionally ignored in the calculations, aligning with
the guidelines set forth in IAS 29, and maintains continuity with the prior
year detailed calculations and commentary.
IAS 29 does note that non-monetary (balance sheet) items that are linked to
indexation agreements have the rates stipulated within the agreements applied,
rather than a general price index, although the same allowance/ exception is
not provided for items of profit or loss.
3. Segment Information
Operating segments are reported in a manner consistent with internal reporting
provided to the Chief Operating Decision Maker (CODM). The CODM has been
identified as the management team including the Chief Executive Officer and
Chief Financial Officer. The segmental analysis is based on the information
that the management team uses internally for the purpose of evaluating the
performance of operating segments and determining resource allocation between
segments.
The Group has 3 strategic divisions which are its reportable segments.
The Group has the below main divisions:
1) Tooling - Design, development and sale of tooling for the
automotive industry.
2) Production - Manufacturing and distributing serial production
kinematic interior parts for the automotive industry.
3) Head office - Manages Group financing and capital management.
The Group evaluates segmental performance on the basis of revenue and profit
or loss from operations calculated in accordance with IFRS.
Inter-segment sales are priced along the same lines as sales to external
customers, with an appropriate discount being applied to encourage use of
Group resources at a rate acceptable to local tax authorities. This policy was
applied consistently in the current and prior year. The inter-segment sales in
2024 were $nil (FY23): $nil.
2024 Tooling Production Head Office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from external customers 11,967 107,781 - 119,748
Revenue from other operating segments
Depreciation and amortisation - (5,468) - (5,468)
Finance expense - (2,084) (46) (2,130)
Segment Profit/(Loss) 3,591 12,185 (8,301) 7,475
Group Profit before tax and discontinued operations 7,475
2024 Tooling Production Head Office Total
$'000 $'000 $'000 $'000
Additions to non-current assets - 3,138 - 3,138
Reporting segment assets 963 72,872 846 74,681
Reportable segment liabilities (2,570) (44,351) (1,582) (48,503)
2023 Tooling Production Head Office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from external customers 10,928 132,046 - 142,974
Revenue from other operating segments
Depreciation and amortisation - (5,244) - (5,244)
Finance expense - (2,485) (50) (2,535)
Segment Profit/(Loss) 3,885 9,145 (7,093) 5,937
Group Profit before tax and discontinued operations 5,937
2023 Tooling Production Head Office Total
$'000 $'000 $'000 $'000
Additions to non-current assets - 3,114 - 3,114
Reporting segment assets 4,239 79,902 263 84,404
Reportable segment liabilities (2,770) (60,748) (919) (64,437)
External revenue by location of customers Non-current assets by location of assets
2024 2023 2024 2023
$'000 $'000 $'000 $'000
Europe 42,565 49,965 1,639 1,455
North America 31,977 39,856 3,446 2,437
Asia Pacific 15,652 22,657 9,635 10,466
United Kingdom 25,680 24,743 2,455 2,143
Rest of the world 3,874 5,753 312 1627
119,748 142,974 17,487 18,128
Due to the nature of the automotive industry becoming increasingly
consolidated with mergers, acquisitions and strategic alliances, the number of
customers under separate control is decreasing whilst the size of such
customers is increasing.
Analysis of concentration of customers, above 10% of Group
revenue:
In 2024 the Group had 3 major customers representing $45.5m (38%), $22m
(18%) and $9.2m (7.6%) of Group revenue.
In 2023 the Group had 3 major customers representing $60.7m (43%), $19m
(13%) and $17.6m (12%) of Group revenue.
4. Non-recurring items
2024 2023
$'000 $'000
Impact of Hyperinflation - 683
One off working capital write offs (net) - 494
Redundancy Costs - 71
Costs from historic tooling projects - 849
Covid related business disruption charges - 277
- 2,374
Non-recurring items are items, which, due to their one-off, non-trading and
non-underlying nature, have been separately classified by the Directors in
order to draw them to the attention of the reader and allow for greater
understanding of the operating performance of the Group. Impact of
hyperinflation is trivial in FY24 and included in the profit or loss
statement, but not called out separately as a non-recurring item.
Items included in non-recurring costs in the prior year:
· Effective from 1 January 2022, the Group has applied IAS 29,
Financial Reporting in Hyperinflationary Economies for its subsidiary in
Türkiye. The impact of applying this standard in respect of 2023 results was
a charge of $683,000 and is considered as non-trading.
· The Group carried out an exercise to improve reporting and
governance. This has resulted in a review of historic balances on the
payables and receivables ledgers that has resulted in a $584,000 income.
Additionally, there was a review of inventory balances that resulted in the
identification of $1,078,000 of stock that was unable to generate a realisable
value. The net impact resulted in a write off for $494,000 and is considered
as a one-off item.
· One-off redundancy costs of $71,000 were incurred during the first
half of 2023 in relation to optimising our manufacturing footprint in China
and Türkiye.
· One-off historic costs of $849,000 were written off in the
reporting period in relation to previously completed tooling projects.
· The Group made non-recurring customer payments of $277,000 as a
compensation for Covid-related business disruption.
5. Earnings per share
From continuing and discontinued operations: 2024 2023
Number Number
Weighted average number of equity shares 73,597,548 65,191,848
$ $
Earnings, being profit after tax 8,449,000 6,315,000
Cents Cents
Earnings per share 11.5 9.7
Diluted Earnings per share 11.1 9.4
In 2024 and 2023 there were share options outstanding that could have a
dilutive effect on earnings per share in the future.
From continuing operations: 2024 2023
Number Number
Weighted average number of equity shares 73,597,548 65,191,848
$ $
Earnings, being profit after tax before discontinued operations 7,641,000 6,553,000
Cents Cents
Earnings per share 10.4 10.1
Diluted Earnings per share 10.0 9.7
From discontinued operations: 2024 2023
Cents Cents
Basic and diluted earnings/(loss) per share 1.1 (0.4)
Diluted Earnings/(loss) per share 1.1 (0.4)
6. Property, plant and equipment
Plant and equipment Fixtures and fittings Motor vehicles Total
$'000 $'000 $'000 $'000
Cost at 31 Dec 22 14,454 3,100 268 17,822
Additions (Restated) 1,859 350 7 2,216
Disposals (Restated) (2,565) (621) (27) (3,213)
Effect of hyperinflation (Restated) 342 195 - 537
Effect of movement in foreign exchange (Restated) (42) (442) (6) (490)
Cost at 31 Dec 23 (Restated) 14,048 2,582 242 16,872
Additions 2,342 760 36 3,138
Disposals (1,692) (275) (164) (2,131)
Effect of hyperinflation 290 127 - 417
Effect of movement in foreign exchange (372) (147) (2) (521)
Cost at 31 Dec 24 14,616 3,047 112 17,775
Accumulated depreciation at 31 Dec 22 (6,692) (3,782) (196) (10,670)
Charge for the year (Restated) (1,498) (347) (53) (1,898)
On disposals (Restated) 295 2,126 27 2,448
Effect of hyperinflation (Restated) (346) (168) - (514)
Effect of movement in foreign exchange (Restated) 576 270 5 851
Accumulated depreciation at 31 Dec 23 (Restated) (7,665) (1,901) (217) (9,783)
Charge for the year (1,125) (246) (12) (1,383)
On disposals 1,315 142 139 1,596
Effect of hyperinflation (273) (122) - (395)
Effects of movements in foreign exchange (121) (40) (5) (166)
At 31 Dec 24 (7,869) (2,167) (95) (10,131)
Carrying amount
At 31 Dec 23 6,383 681 25 7,089
At 31 Dec 24 6,747 880 17 7,644
Management identified an error with regards to the presentation of the
property, plant and equipment note in the prior period and as a result it has
been restated. The total cost at 31 December 2023 has decreased by $1,703,000
and total accumulated depreciation has decreased by $1,703,000. The
restatement is purely a classification error between cost and accumulated
depreciation with no impact on the carrying amount
7. Borrowings
This note provides information about the contractual terms of the Group and
Company's interest-bearing loans and borrowings, which are measured at
amortised cost. For more information about the Group and Company's exposure to
interest rate and foreign currency risk, see Note 25.
2024 2023
$'000 $'000
Current liabilities 9,860 -
Current portion of secured bank loans
Current portion of Trade Loans - 9,005
Invoice finance - 4,193
9,860 13,198
Total 9,860 13,198
On October 11 2024, the Group moved its borrowing facilities from HSBC to FGI
worldwide LLC (FGI). FGI provides a revolving credit facility and secures its
borrowing on inventory and trade receivables of Chinatool UK Limited and
IMS- Chinatool JV, LLC. In addition FGI provides an over advance facility of
USD 750,000, repayable every 6 months. The over advance facility was fully
utilised at 31 Dec 2024.
Invoice finance balances were secured against trade receivables. Trade loans
were secured against inventories.
The currency profile of the Group's loans and borrowings is as follows:
2024 2023
$'000 $'000
USD 8,827 7,779
EUR 1,033 5,277
RMB - 142
9,860 13,198
Currency Margin Contracted maturity Carrying amount 31 December 2024 Carrying amount 31 December 2023
$'000 $'000
Secured bank loan EUR/USD 3.10% 2027 9,110 -
Over advance USD 5.85% 2025 750 -
Trade loans EUR/USD 4.04% 2024 - 9,005
Invoice finance EUR/USD/RMB 3.75% 2024 - 4,193
9,860 13,198
Terms and debt repayments
2024
The borrowing facility with FGI allows prepayment on inventory and trade
receivables of Chinatool UK Limited and IMS- Chinatool JV, LLC after
deductions of certain reserves which are calculated weekly. The facility is a
revolving facility as customers pay directly to FGI.
The over advance facility is repayable every six months and the Group can
redraw these funds partially or in full as per requirements.
2023
Invoice finance facility was secured against trade receivables. Trade loans
were secured against inventories
The unsecured bank overdraft was repayable on demand and had no set repayment
schedules.
8. Capital management
The Group's primary objectives when managing capital are to safeguard the
Group's ability to continue as a going concern, so that it can continue to
provide returns for shareholders and benefits for other stakeholders, by
pricing products and services commensurately with the level of risk and by
securing access to finance at a reasonable cost.
The Group actively and regularly reviews and manages its capital structure to
maintain a balance between the higher shareholder returns that might be
possible with higher levels of borrowings and the advantages and security
afforded by a sound capital position and makes adjustments to the capital
structure in light of changes in economic conditions.
Under the terms of the FGI facility, the Group is required to maintain a Fixed
Cost Cover Ratio (FCCR) of at least 1.5x on a trailing twelve-month basis. As
of December 31, 2024, the Group reported an FCCR of 1.9x, demonstrating
substantial headroom above the minimum requirement.
9. Capital and reserves
2024 2023
$'000 $'000
Share capital
Allotted, called up and fully paid
73,597,548 (2023: 73,597,548) Ordinary shares of £0.005 each 484 484
Shares classified in shareholders' funds 484 484
The holders of ordinary shares are entitled to receive dividends from time to
time and are entitled to one vote per share at meetings of the Company.
On 27 April 2023 the Group undertook a fundraise and achieved total gross
proceeds of $9,630,000 (before transaction costs of $509,000).
Share premium
The share premium represents the value subscribed for share capital in excess
of nominal value.
Translation reserve
The translation reserve comprises all foreign exchange differences arising
from the translation of the financial statements of foreign operations, as
well as from the translation of liabilities that hedge the Group's net
investment in a foreign subsidiary.
Merger reserve
The merger reserve comprises of the consideration paid by the Company when it
acquired 100% of the share capital of China Tool Projects UK Limited on 6
April 2017, the former Group Company. The transaction is not considered to
be a business combination as the new top Company formed is not considered a
business under the definition in IFRS 3. Therefore, this transaction does not
fall under the scope of IFRS 3 and book value accounting has been applied.
As a result, the consideration paid by the Company, being a combination of
cash and the issue of Loan Notes, is now held in a Merger Reserve.
Accumulated deficit
Accumulated deficit represents all other net gains and losses not recognised
elsewhere.
Non-controlling interests
Non-controlling interest represent the equity in subsidiaries that is not
attributable to the shareholders of the Group.
10. Contingent Liabilities
The Group operates in overseas jurisdictions and is required to participate in
various government-sponsored employee benefit plans, including social
insurance, housing funds, and other welfare-oriented obligations, contributing
specified percentages of employee salaries, bonuses, and allowances up to a
maximum amount set by local authorities. Authorities in some jurisdictions
have not consistently enforced the employee benefit plan requirements, given
the different levels of economic development in different areas. We cannot
confirm that our practices will be deemed to be in compliance with the
above-mentioned employee benefit plan requirements in all aspects. The
authorities may require us to pay, or in the case of any shortfalls, to cover
the required social insurance and housing fund contributions. We may also
become subject to fines and legal sanctions due to any failure to make social
insurance and housing fund contributions for our employees. If we are subject
to late fees or fines in relation to the underpaid employee benefits, our
financial condition and results of operations may be adversely affected. We
may also be subject to regulatory investigations and other penalties if our
other employment practices are deemed to be in violation of local laws and
regulations. We do not believe it is probable that there is an outflow of
resources and therefore have not recorded a provision for the uncertain
positions in relation to these plans. At the date of approving the
financial statements, management consider the probability of significant
outflows from the above risks to be low
11. Events after the reporting period
Following the year end, on 20 February 2025 the Company's wholly owned Chinese
subsidiary (Chinatool Automotive Mould Systems Limited (CMSSZ) entered into an
agreement with Automotive Kinetic Systems Limited (AKSL), a company which is
wholly owned by Simon Phillips. Under the terms of the agreement AKSL made a
loan to CMSSZ of US$300,000 repayable within 12 months at an interest rate of
12.4% per annum.
There are no other events after the reporting period affecting these financial
statements.
12. Alternative performance measures
The Annual Report includes Alternative Performance Measures (APMs) which are
considered by Management to better allow the readers of the accounts to
understand the underlying performance of the Group. A number of these APMs are
used by Management to measure the KPIs of the Group as outlined within the
Financial Review above. The Board also monitors these APMs to assess financial
performance throughout the year.
The APMs used in the Annual Report include:
- Adjusted EBITDA - calculated as EBITDA adjusted for
non-recurring items and foreign exchange translation (loss)/gain
- Adjusted EBITDA margin - calculated as adjusted
EBITDA divided by revenue in the year
- Adjusted profit before tax - calculated as profit
before tax adjusted for non-recurring items and foreign exchange translation
(loss)/gain
- Adjusted profit before tax margin - calculated as
adjusted profit before tax divided by revenue in the year
EBITDA is calculated based using Operating profit before interest, taxes,
depreciation and amortisation.
APMs are calculated on EBITDA and profit before tax for continuing operations
only
Detail of each of the non-recurring items is disclosed in Note 4
Adjusted EBITDA and Adjusted EBITDA margin 2024 2023
$'000 $'000
Adjusted EBITDA from continuing operations 16,268 16,090
Adjusted EBITDA margin 13.59% 11.25%
Non-underlying & non-recurring items
- Impact of Hyperinflation - (683)
- One-off working capital write offs (net) - (494)
- Redundancy Costs - (71)
- Costs from historic tooling projects - (849)
- COVID related business disruption charges - (277)
- Non cash translation foreign exchange losses (1,244) -
EBITDA 15,024 13,716
EBITDA margin 12.54% 9.59%
Adjusted profit before tax and adjusted profit before tax margin 2024 2023
$'000 $'000
Adjusted profit before tax 8,719 8,311
Adjusted profit before tax margin 7.28% 5.81%
Non-underlying items
- Impact of hyperinflation - (683)
- One-off working capital writes offs (net) - (494)
- Redundancy Costs - (71)
- Costs from historic tooling projects - (849)
- COVID related business disruption charges - (277)
- Non cash translation foreign exchange losses (1,244) -
Profit before tax 7,475 5,937
Profit before tax margin 6.24% 4.15%
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