REG - CT Automotive Group - H1 2022 Results
20/09/2022 07:00
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RNS Number : 9328Z CT Automotive Group PLC 20 September 2022
20 September 2022
CT AUTOMOTIVE GROUP PLC
("CT Automotive" or the "Group")
H1 2022 RESULTS
Revenues ahead in H1, production recovery gaining momentum
CT Automotive, a leading designer, developer and supplier of interior
components to the global automotive industry, today announces its results for
the half year ended 30 June 2022 ("H1 2022").
Financial Highlights
H1 22 H2 21 H1 21
$m $m $m
Revenue 57.2 58.3 74.7
Gross profit 10.6 9.5 19.5
Adjusted EBITDA* (4.3) 0.5 8.8
Adjusted EBIT* (7.3) (2.0) 3.2
(Loss)/profit after taxation (7.7) (8.4) 2.1
Earnings per share (15.2)c (39.7)c 10.5c
Net debt 20.2 9.5 56.6
* Adjusted for non-recurring items
Due to the semi-conductor shortage, 2021 was a year of two halves with strong
revenue in H1 followed by a slowdown in H2. The shortage continued into 2022
and therefore 2022 was expected to be a mirror image with a suppressed H1
followed by a strong recovery in H2. We have therefore used H2 2021 as our
most meaningful comparative.
· Group revenue was ahead of original expectations and broadly flat
compared to H2 21:
o Production revenue was up 19.3% to $55.3m (H2 21: $46.4m)
o Tooling revenue was only $1.9m which reflected timing of revenue
recognition of certain projects which are still expected to be completed
before year end
· Investment made in working capital to support future growth and in
initiatives to unlock long term cash savings
· Latest customer schedules indicate a recovery of volumes in H2
2022 could be ahead of the Board's original expectations by the end of the
year
Operational highlights
· Cost saving activities implemented within the period will see
benefits start to be realised in H2 22
· Lockdowns in China and the Ukraine conflict have caused disruption
to production in H1
· Inflationary pressures continue but customer pricing mechanisms
are providing mitigation through selling price rises
· New Supply Chain Director delivering savings and subsequently
promoted to COO
· New customer wins including electric vehicle makers Rivian and
e.GO
· New manufacturing plant in Mexico on track to supply customers in
Q3
Current trading and outlook
· Both customer schedules and external forecast data continue to
support the expectation that automotive volumes will recover through late 2022
and supply chain issues will fully resolve in 2023
· Semi-conductor shortages are no longer the key restricting factor
with restrictions now coming from the recovery of the wider supply chain which
is ongoing
· Cost saving and efficiency focus following the IPO will enhance
future margins
· There is no change to the Board's expectations for FY22
Scott McKenzie, Chief Executive Officer of CT Automotive, commented:
"We were pleased to achieve revenues ahead of our expectations in the first
half and have made good progress with our growth initiatives, including new
customer wins, expansion of our manufacturing facilities and improved
efficiencies to drive margin expansion.
Looking ahead, there are positive signs that OEM supply chain issues are
starting to be resolved and schedules are strengthening. Despite the continued
market and macroeconomic uncertainty, the Board remains confident of achieving
its expectations for the year and delivering significant growth over the
coming years."
For further information, please contact:
CT Automotive
via MHP
Simon Phillips, Executive Chairman
Scott McKenzie, Chief Executive Officer
David Wilkinson, Chief Financial Officer
MHP Communications (Financial
PR)
Tel: +44 (0)20 3100 8540
Tim
Rowntree
CTAutomotive@mhpc.com
Charlie Barker
Liberum (Nominated Adviser and
Broker)
Tel: +44 (0)20 3100 2000
Richard Lindley
Benjamin Cryer
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 suppliers
("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
complemented by additional manufacturing facilities in Turkey and the Czech
Republic.
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 roster
of OEM end customers, both directly and via Tier One suppliers including
Faurecia and Marelli. End customers include volume manufacturers, such as
Nissan, and luxury car brands such as Bentley and Lamborghini. In addition,
the Group supplies electric car manufacturers, including Lucid.
The Group currently supplies component part types to over 47 different models
for 19 OEMs. Since its formation, the Group has been the only significant new
entrant into the market, which is characterised by high barriers to entry.
Use of alternative performance measures
The commentary uses alternative performance measures, which are described as
"Adjusted". An explanation of the items identified as non-recuring and that
have been adjusted can be found in Note 4 of the condensed consolidated
financial statements.
Chief Executive Officer's Review
Operational review
The Group's trading performance for the first half of 2022 saw revenue ahead
of original expectations as the automotive supply chain bottlenecks began to
ease, but a challenging operating environment, including further COVID related
shut-downs in China, led to additional costs. Group loss after tax was $7.7m,
driven by ongoing disruption to production schedules caused by the supply
chain issues and additional costs incurred as a result of a number of one-off
events, as further described below and notified in the August 2022 trading
update.
During H1 there has been a focus on deploying the funds raised at IPO to
secure future cost savings and ensuring key strategies are implemented to
prepare the business for the automotive market recovery which is already
building momentum in H2.
Key initiatives focused on internal cost improvements, inflation-based
customer recoveries and cash flow have been implemented within the period and
continue to be progressed. We expect to see the initial benefit of these
initiatives in H2 2022 before realising the full benefits in 2023. This has
been supported by the recruitment of Stuart Lorraine as our Global Supply
Chain and Commercial Director in March 2022, which we announced in our May
2022 FY21 Full Year Results announcement. Stuart has a wealth of experience
within the industry including previously working at OEMs and has been central
to leading on implementing this work. As a result, Stuart was promoted to the
role of Chief Operating Officer (non plc board) in June 2022 with a wider
operational oversight mandate.
Looking at the performance of key divisions:
Production
We saw encouraging growth in the production division in H1 2022 of 19.3%,
compared to H2 21, to $55.3m, as the semi-conductor shortage began to ease and
wider supply chain issues started to resolve, supporting the beginning of the
recovery in customer volumes. Heading into H2 we are seeing the recovery
continue and by the end of the year schedules could be running ahead of our
original expectations for 2022.
Our operations in China were impacted by the COVID lockdowns in Shanghai which
caused disruptions to both inbound and outbound freight for a period. The
inbound issues meant that certain materials were delayed which in turn caused
disruption to our production lines. In order to avoid shortages of product at
customer sites, certain parts were required to be transported by airfreight.
While we successfully negotiated to share the additional freight costs with
customers, we were not able to recover in full and the Group incurred $1.6m of
non-recoverable costs.
In addition, our sites in both the UK and Turkey experienced high-cost
inflation in H1 and while an appropriate pricing mechanism has been put in
place in Turkey to recover these increased costs, competitive market
conditions meant this was not possible in the UK. With costs increasing and
limited growth or improvement possible, as previously announced we took the
difficult decision to close the UK plant and operations will cease on 30
September 2022. Production of some components in the UK has been relocated to
the Group's existing overseas facilities. This decision was made in
conjunction with the Group's key customer who we have worked closely with to
ensure continuity of supply during the closedown period.
On a positive note, the development of the new plant in Mexico has continued
at pace with all product launches on track with customer agreements. Since the
start of 2022, the site has been secured, all construction work including an
electrical upgrade has been completed and machines and equipment have been
installed. Following successful trials we have entered launch phase with a
team of staff from China and the UK supporting the local management in
ensuring we have a fully robust and maintainable production operation. We
will start to see the benefits of the plant in our results for H2 2022
following the start of serial production supply at the end of September.
We have continued to focus on future growth, targeting both our existing
customers to expand existing relationships, as well as adding new customers
including Rivian and TOGG, a new Turkish EV manufacturer. Negotiations on new
vehicles are ongoing but we have already received a number of new nominations
from existing customers which we look forward to updating on nearer to vehicle
launch.
Engineering, Design & Development (Tooling)
Development of new programs continues at pace, and we continue fully utilising
our internal toolroom to ensure maximum control and margins. We expect a much
stronger performance in H2 2022 which we anticipate will see full year
revenues in line with expectations with H1 performance the result of timing
differences with revenue expected to be recognised in H2.
People
People and culture remain a core focus at CT and we continue to invest in our
systems and processes to ensure our people are safe, empowered and have
sufficient opportunities to develop their careers while supporting our
long-term goals.
Outlook
The Board continues to expect global vehicle production volumes to recover
through H2 2022 and automotive supply chain issues to resolve fully in 2023.
Trading since 30 June has been in line with expectations and the latest
customer production schedules are continuing to show a stronger step up in
production for the Group in Q4 2022 than originally expected.
H2 2022 gross margin is expected to be stronger than originally forecast, with
increased sales driving economies of scale within manufacturing operations as
originally expected being combined with efficiency initiatives delivered since
IPO. Once fully implemented, these efficiency initiatives will provide
benefits to the business into FY23 and beyond. As a result of these
initiatives and production volume indications the Board's expectations for
FY23 remain unchanged.
The Board is though mindful of the possibility that the continuing
macroeconomic uncertainty and any changes in timing or demand levels could
impact the H2 trading performance. In addition, with China continuing to
operate its "Zero COVID" policy, the risk of further disruption to the supply
chain remains, albeit some mitigating actions have been taken.
The Group is trading in line with expectations for the year and the Board
remains confident about the long-term growth prospects.
Financial Overview
Given the impact to global automotive volumes caused by the semiconductor
shortage, there has been a dip in global production lasting through H2 2021
and H1 2022. As a result of this, H1 2021 is not directly comparable with H1
2022, as H1 2021 was not significantly impacted. We therefore believe H2
2021 provides a more meaningful view of the progress of the business in this
period.
Production revenue was $55.3m, up 19% from H2 2021 ($46.4m) though down 14.1%
from H1 2021 ($64.4m) due to a combination of new launches and increased
volumes on some key programs as we start to see signs of the market recovery
getting underway following the slowdown in H2 2021 due to the shortage of
semiconductors.
While H1 2022 saw a relatively low volume of completed tooling projects,
generating only $1.9m of revenue which is an 81% drop compared to the $10.3m
and $11.9m generated in H1 2021 and H2 2021 respectively, the projects in
progress and due to complete within 2022 mean we are still confident of
hitting our full year tooling revenue target.
Cost inflation continues to impact our direct costs, though the open book
nature of our costings and mechanisms to pass those increases through mean
that, subject to negotiations, we are able to protect our margins with the
exception of the UK plant noted below.
The impact of energy cost inflation varies by country and we are fortunate
that in China, where the majority of our manufacturing is based, this
inflation is limited and has not had a material impact on the Group's costs.
Wage inflation in China is also much less significant that what we are seeing
in the UK and Europe.
Gross margin was 18.6%, up 2.3% from H2 2021 (16.3%) but down 7.6% from H1
2021 (26.2%) though this was impacted by a number of one-off or non-recurring
items:
IAS 29; this is a new standard which we are required to implement as a result
of hyperinflation in Turkey. In summary, the opening non-cash Balance Sheet
items and monthly results of the Turkish entity have had to be re-indexed to
re-state the impact of inflation. The net impact of the adjustments was a
$0.4m reduction in gross margin.
CAS/UK plant; As previously reported, our UK plant generated a gross loss
within the period. Removing these results from our figures reduces revenue by
$3.0m and reduces overall gross profit by $0.6m. The original forecast for the
UK Plant was to generate $0.9m so this is a $1.7m reduction overall. There
will be some exceptional closure costs in H2 but we expect these to be largely
covered by profits on the sale of fully written down assets.
Without these impacts underlying gross margin was 21.6% which is an increase
of 5.3% over H2 2021 when the disruption caused by the shortage of
semiconductors was at its peak.
Distribution costs were high as a result of $1.6m of air freight costs being
incurred as a result of disruption to logistics caused by the COVID lockdowns
in China, as noted above. This possibility of this repeating remains a risk
due to the continued operation of the "Zero COVID" policy, but we are working
with our customers to ensure that any future impacts create minimal costs for
the Group.
Administrative expenses have increased partly due to the additional costs now
being incurred as a result of being a public listed company.
In addition, the Group incurred foreign exchange losses of $3.0m which were
largely linked to weakening GBP impacting the Market-to-market value of
forward contracts as at the period end. Post period some of these unrealised
losses have reversed, though currency markets remain volatile.
Adjusted EBIT, after adding back the non-recurring items explained in note 4
below, was a loss of $7.3m compared to a loss of $2.0m in H2 21 and a profit
of $3.2m in H1 21. The key drivers behind this drop were the $1.6m of air
freight costs and $3.0m of foreign exchange losses noted above, neither of
which has been categorised as non-recurring. In the absence of these costs,
underlying adjusted EBIT was a loss of $2.7m.
Financing costs have reduced substantially as a result of the debts that were
repaid from the proceeds of the IPO, with remaining facilities being limited
to working capital lines only.
Net capital expenditure during the period was $2.1m and consists of both
investment in the new plant, as well as new equipment to both maintain and
improve the efficiency of existing plants.
An investment has been made in working capital which across the period
totalled $3.1m which is largely made up of a reduction in amounts owed to
suppliers where extended terms had been allowed in 2021, offset by a reduction
in amounts owed by customers through a combination of credit control and
reducing terms.
Net debt at the period end was $20.2m, up from $9.5m at year end, and is
higher than originally forecast, utilising the Invoice Finance facility.
After the period end a large ($7m) payment was received from a customer which
reduced both receivables and the associated Invoice Finance balance and
bringing net debt back down in line with original expectations.
Risks
The Board considers strategic, operational, financial and compliance risks and
monitors them on a regular basis. Key risks and their mitigations were
included on pages 30 to 33 of the last Annual Report and there are no material
changes since that date.
Consolidated statement of profit or loss and other comprehensive income
Note Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021 Year to 31 December 2021
$'000 $'000 $'000
Revenue 2,3 57,222 74,658 132,939
Cost of sales (46,605) (55,126) (103,911)
________ ________ ________
Gross profit 10,617 19,532 29,028
Distribution expenses (4,007) (2,377) (5,504)
Other operating income 243 846 1,478
Administrative expenses (15,448) (13,442) (27,391)
________ ________ ________
EBITDA (before non-recurring items) (4,292) 8,282 8,767
Depreciation (1,203) (1,379) (2,076)
Amortisation (1,770) (1,755) (3,509)
Non-recurring items 4 (1,330) (589) (5,571)
Operating (loss)/profit (8,595) 4,559 (2,389)
Net monetary gain arising from hyperinflationary economies 252 - -
Financial expenses (881) (2,359) (4,476)
Share of post-tax losses of equity accounted associates - - (579)
________ ________ ________
(Loss)/profit before tax (9,224) 2,200 (7,444)
Taxation 1,484 (141) 1,108
________ ________ ________
(Loss)/profit for the year (7,740) 2,059 (6,336)
________ ________ ________
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations (360) 257 280
________ ________ ________
Other comprehensive income for the year, net of income tax (360) 257 280
________ ________ ________
Total comprehensive (loss)/income for the year (8,100) 2,316 (6,056)
________ ________ ________
Basic earnings/(loss) per share 5 (15.2)c 10.5c (31.2)c
Diluted earnings/(loss) per share 5 (15.2)c 10.5c (31.2)c
Consolidated balance sheet
Note Unaudited as at 30 June 2022 Unaudited as at 30 June 2021 As at 31 December 2021
$'000 $'000 $'000
Non-current assets
Property, plant and equipment 6 10,035 10,296 10,307
Intangible assets 575 551 520
Goodwill 2,417 2,417 2,417
Right of use assets 8,603 6,313 6,942
Deferred tax assets 3,508 - 1,745
Investments in equity-accounted associates - 1,620 -
________ ________ ________
25,138 21,197 21,931
________ ________ ________
Current assets
Inventories 7 44,272 46,710 39,779
Tax receivable 1,134 1,411 1,496
Trade and other receivables 8 40,852 47,498 42,782
Cash and cash equivalents 5,835 3,135 13,445
________ ________ ________
92,093 98,754 97,502
________ ________ ________
Total assets 117,231 119,951 119,433
________ ________ ________
Current liabilities
Other interest-bearing loans and borrowings 9 (26,057) (40,296) (22,865)
Trade and other payables 10 (51,270) (60,870) (50,044)
Tax payable (516) - (655)
Lease liabilities (2,050) (2,683) (2,566)
________ ________ ________
(79,893) (103,849) (76,130)
________ ________ ________
Non-current liabilities
Other interest-bearing loans and borrowings 9 - (19,379) (103)
Provisions - - -
Lease liabilities (6,436) (4,265) (5,041)
Deferred tax liabilities - (23) -
________ ________ ________
(6,436) (23,667) (5,144)
________ ________ ________
Total liabilities (86,329) (127,516) (81,274)
________ ________ ________
Net assets/(liabilities) 30,902 (7,565) 38,159
________ ________ ________
Equity attributable to equity holders of the parent
Share capital 342 132 342
Share premium 54,717 - 54,717
Translation reserve 220 557 580
Merger reserve (35,812) (35,812) (35,812)
Retained earnings 11,435 27,558 18,332
________ ________ ________
Total equity 30,902 (7,565) 38,159
________ ________ ________
Consolidated statement of changes in equity
Share Share Translation Retained Merger Total
capital Premium reserve Earnings reserve equity
$'000 $'000 $'000 $'000 $'000 $'000
1 January 2021 132 - 300 25,499 (35,812) (9,881)
Total comprehensive income for the year
Profit for the year - - - 2,059 - 2,059
Other comprehensive income - - 257 - - 257
________ ________ ________ ________ ________ ________
Total comprehensive income for the year - - 257 2,059 - 2,316
________ ________ ________ ________ ________ ________
Balance at 30 June 2021 132 - 557 27,558 (35,812) (7,565)
________ ________ ________ ________ ________ ________
Share Share Translation Retained Merger Total
capital Premium reserve earnings reserve equity
$'000 $'000 $'000 $'000 $'000 $'000
1 January 2022 342 54,717 580 18,332 (35,812) 38,159
Hyperinflationary monetary adjustment relating to 2021
843 843
Restated at 1 January 2022
342 54,717 580 19,175 (35,812) 39,002
Total comprehensive income for the year
Loss for the year - - - (7,740) - (7,740)
Other comprehensive income - - (360) - - (360)
________ ________ ________ ________ ________ ________
Total comprehensive income for the year
- - (360) (7,740) - (8,100)
________ ________ ________ ________ ________ ________
Balance at 30 June 2022 342 54,717 220 11,435 (35,812) 30,902
________ ________ ________ ________ ________ ________
Consolidated statement of changes in equity
Share capital Share Premium Translation reserve Retained earnings Merger reserve Other reserve Total equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000
132 300 24,668 (35,812) (10,712)
1 January 2021 - -
Contributions by and distributions to shareholders:
- - - - 9,900
Reclassification of shareholder loan notes
- 9,900
57 2,509
Conversion of loan notes / Other liabilities into Ordinary Shares
12,352 (9,900)
153 - - - 45,076
Share issue in relation to IPO
44,923 -
Equity issue costs - (2,558) - - - - (2,558)
Total comprehensive income for the year:
- - (6,336) - (6,336)
Loss for the year - -
Other comprehensive income - - - 280
- 280 -
________ ________ ________ ________ ________ ________ ________
- 280 (6,336) - (6,056)
Total comprehensive income for the year
- -
________ ________ ________ ________ ________ ________ ________
342 580 18,332 (35,812) 38,159
Balance at 31 December 2021
54,717 -
________ ________ ________ ________ ________ ________ ________
Consolidated statement of cash flows
Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021
Year to 31 December 2021
$'000 $'000 $'000
Cash flows from operating activities
(Loss)/profit for the year (7,740) 2,059 (6,336)
Adjustments for:
Depreciation and amortisation 2,972 2,446 5,585
Impairment of associate - - 1,627
Financial expense 881 2,359 4,476
Loss on sale of property, plant and equipment 246 - 1,084
Taxation (1,485) 141 (1,108)
Net monetary gain 354 - -
Share of post-tax losses of equity accounted associates - - 579
________ ________ ________
(4,772) 7,005 5,907
Decrease/(increase) in trade and other receivables 4,709 (2,462) 1,844
(Increase)/decrease in inventories (54) (5,656) 444
(Decrease)/increase in trade and other payables (7,748) 8,230 (1,898)
Increase/(decrease) in provisions - 73 -
________ ________ ________
(7,865) 7,190 6,297
Tax paid - (454) (529)
________ ________ ________
Net cash used in operating activities (7,865) 6,736 5,768
________ ________ ________
Cash flows from investing activities
Purchase of property, plant and equipment (1,779) (1,929) (4,296)
Investments in associates - - (201)
Purchase of intangible assets (364) - (421)
________ ________ ________
Net cash from investing activities (2,143) (1,929) (4,918)
________ ________ ________
Cash flows from financing activities
Receipt/(repayment) of bridging loan (2,500) 2,500 2,500
Issue of convertible loan notes - - 5,600
Share issue (net of transaction costs) - - 42,370
Principal repayment of lease liabilities (1,693) (1,325) (3,565)
Interest paid (664) (1,067) (2,922)
Repayment of term loan - (2,759) (16,042)
Repayment of CLBILs - (1,101) (8,351)
Receipt/(repayment) of trade loans 3,680 712 (6,092)
Receipt/(repayment) of invoice finance 2,331 (1,390) (1,537)
________ ________ ________
Net cash from/(used in) financing activities 1,154 (4,430) 11,961
________ ________ ________
Net (decrease)/increase in cash and cash equivalents (8,854) 377 12,811
Cash and cash equivalents at beginning of period 9,807 (2,677) (2,677)
Effect of exchange rate fluctuations on cash held 1,345 - (327)
________ ________ ________
Cash and cash equivalents at end of year (see Note 15) 2,298 (2,300) 9,807
________ ________ ________
Notes forming part of the consolidated unaudited financial statements
1 Accounting policies
Introduction
The consolidated interim financial statements have been prepared in accordance
International Financial Reporting Standards in conformity with the
requirements of the Companies Act 2006 and expected to be effective at the
year-end of 31 December 2022.
Except for hyperinflation accounting (jn accordance with IAS 29) the
accounting policies are unchanged from the financial statements for the year
ended 31 December 2021. The interim financial statements, which have been
prepared in accordance with International Accounting Standard 34 (IAS 34), are
unaudited and do not constitute statutory accounts within the meaning of
section 434 of the Companies Act 2006. Statutory accounts for the year ended
31 December 2021, prepared in accordance with IFRS, have been filed with
Companies House. The Auditors' Report on these accounts was unqualified, did
not include any matters to which the Auditors drew attention by way of
emphasis without qualifying their report and did not contain any statements
under section 498 of the Companies Act 2006.
The consolidated interim financial statements are for the six months to 30
June 2022. The interim consolidated financial information does not include all
the information and disclosures required in the annual financial statements
and should be read in conjunction with the Group's annual financial statements
for the year ended 31 December 2021, which were prepared in accordance with
IFRS's and in conformity with the requirements of the Companies Act 2006.
The condensed interim statements have been prepared under the going concern
assumption, which presumes the Group will be able to meet its obligations as
they fall due for the foreseeable future. In making this assumption, the
directors have considered the fact that from 23 September 2022 HSBC have a
rolling option to exercise 3 month notice period to withdraw facilities
(comprising overdrafts, invoice finance and trade loans). The Directors are
not aware of any information suggesting HSBC will exercise this option. The
Directors are exploring funding options worldwide to support the Group's
growth plans and are confident that should HSBC facilities be withdrawn,
alternative funding options would be available.
The Group's business is not subject to significant seasonal variations.
The unaudited financial statements are prepared on the historical cost basis
except that the following assets and liabilities are stated at their fair
value: derivative financial instruments.
Revenue
Revenue is measured at the fair value of the consideration received or
receivable. Provided it is probable that the economic benefits will flow to
the Group and the revenue and costs, if applicable, can be measured reliably,
revenue is recognised in profit or loss as follows:
Serial production goods are recognised as sold at a point in time when control
is passed to the customer, which depending on the incoterms (a series of
pre-defined commercial terms published by the International Chamber of
Commerce relating to international commercial law) can be when they are
delivered to the customer site or when the customer collects them.
Tooling and the provision of associated services is recognised at a point in
time when the performance obligations in the contract are satisfied and
control is passed to the customer, which is based on the date of issue of the
parts submission warrant (PSW) or a similar approval from customers. Monies
received from customers in advance of completing the performance obligations
are recognised as contracts liabilities as at the balance sheet date and
released to revenue when the related performance obligations are satisfied at
a point in time.
Discounts on the serial production contracts are considered one off and agreed
with the customers as part of the negotiation and as per the terms of the
contract, they are either paid in advance or otherwise. Discounts paid in
advance are recognised as a prepayment and recognised as a debit to revenue in
the period in which the related revenue is recognised. All other discounts are
recognised as a debit to revenue based on the period in which the related
revenues are recognised.
Revenue excludes value added tax or other sales taxes and is after deduction
of any trade discounts.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and accumulated impairment losses.
Where parts of an item of property, plant and equipment have different useful
lives, they are accounted for as separate items of property, plant and
equipment.
Depreciation is charged to the profit and loss account on a straight-line
basis over the estimated useful lives of each part of an item of property,
plant and equipment. The estimated useful lives are as follows:
Assets under construction - not depreciated
Plant and equipment - 2-5 years straight line
Furniture, fixtures and equipment - 2-5 years straight line
Motor vehicles - 2-5 years straight line
Depreciation methods, useful lives and residual values are reviewed at each
balance sheet date.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
based on the first-in first-out principle and includes expenditure incurred in
acquiring the inventories, production or conversion costs and other costs in
bringing them to their existing location and condition. In the case of
manufactured inventories and work in progress, cost includes an appropriate
share of overheads based on normal operating capacity.
Net realisable value is the value that would arise on sale of stock in the
normal course of business, minus a reasonable estimation of selling costs.
Foreign currency
Transactions in foreign currencies are translated to the respective functional
currencies of Group entities at the foreign exchange rate ruling at the date
of the transaction. Foreign currency monetary assets and liabilities are
translated at the rates ruling at the reporting date. Exchange differences
arising on the retranslation of unsettled monetary assets and liabilities are
recognised immediately in profit or loss. Exchange differences arising on the
retranslation of the foreign operation are recognised in other comprehensive
income and accumulated in the foreign exchange reserve.
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on consolidation, are translated to the Group's
presentational currency US Dollars at foreign exchange rates ruling at the
balance sheet date. The revenues and expenses of foreign operations are
translated at an average rate for the year where this rate approximates to the
foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign operations are
reported as an item of other comprehensive income and accumulated in the
translation reserve. When a foreign operation is disposed of, such that
control is lost, the entire accumulated amount in the foreign currency
translation reserve, is reclassified to profit or loss as part of the gain or
loss on disposal. When the Group disposes of only part of its interest in a
subsidiary that includes a foreign operation while still retaining control,
the relevant proportion of the accumulated amount is reattributed to
non-controlling interests. When the Group disposes of only part of its
investment in an associate that includes a foreign operation while still
retaining significant influence, the relevant proportion of the cumulative
amount is reclassified to profit or loss.
Classification of financial instruments issued by the Group
Financial instruments issued by the Group are treated as equity only to the
extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Company (or Group as the
case may be) to deliver cash or other financial assets or to exchange
financial assets or financial liabilities with another party under conditions
that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the company's own equity
instruments, it is either a non-derivative that includes no obligation to
deliver a variable number of the company's own equity instruments or is a
derivative that will be settled by the company's exchanging a fixed amount of
cash or other financial assets for a fixed number of its own equity
instruments.
To the extent that this definition is not met, the proceeds of any issues are
classified as a financial liability.
Non-derivative financial instruments
Financial assets and liabilities are recognised when the Group becomes party
to the contractual provisions of the instrument.
Non-derivative financial instruments comprise trade and other receivables,
cash and cash equivalents, loans and borrowings, and trade and other payables.
Trade and other receivables
Trade and other receivables are initially measured at their transaction price.
Trade receivables and other receivables are held to collect the contractual
cash flows which are solely payments of principal and interest. Therefore,
these receivables are subsequently measured at amortised cost using the
effective interest rate method.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to
initial recognition they are measured at amortised cost using the effective
interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank
overdrafts that are repayable on demand and form an integral part of the
Group's cash management are included as a component of cash and cash
equivalents for the purpose only of the cash flow statement.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost using the effective
interest method. See Note 9 for full details of classes of interest-bearing
borrowings.
Effective interest rate
The 'effective interest' is calculated using the rate that exactly discounts
estimates future cash payments or receipts (considering all contractual terms)
through the expected life of the financial asset or financial liability to its
carrying amount before any loss allowance.
Share based payments
Where share options are awarded to employees, the fair value of the options at
the date of the grant is charged to the income statement over the vesting
period. Non-market vesting conditions are taken into account by adjusting the
number of equity instruments expected to vest at each balance sheet date so
that, ultimately, the cumulative amount recognised over the vesting period is
based on the number of options that eventually vest.
Hyperinflation accounting
Effective from 1 January 2022, the Group has applied IAS 29, Financial
Reporting in Hyperinflationary Economies, for its subsidiary in Turkey, whose
functional currency has experienced a cumulative inflation rate of more than
100%, over the past three years. Assets, liabilities, the financial position
and results of foreign operations in hyperinflationary economies are
translated to US Dollar at the exchange rate prevailing at the reporting date.
The exchange differences are recognised directly in other comprehensive income
and accumulated in the translation reserve in equity. Such translation
differences are reclassified to profit or loss only on disposal or partial
disposal of the overseas operation. Prior to translating the financial
statements of foreign operations, the non-monetary assets and liabilities and
comprehensive income (both previously stated at historic cost) are restated to
account for changes in the general purchasing power of the local currencies
based on the consumer price index published by the Turkish Statistical
Institute. The consumer price index for the six months ended 30 June 2022
increased by 42%.
Comparative amounts presented in the consolidated financial statements were
not restated. Hyperinflationary accounting needs to be applied as if Turkey
has always been a hyperinflationary economy therefore as per CT Automotive
Group's policy choice, the differences between equity at 31 December 2021 as
reported and the equity after the restatement of the non-monetary items to the
measuring unit current at 30 June 2022 were recognised in retained earnings.
The subsequent gains or losses resulting from the restatement of non-monetary
assets and liabilities are recorded in the Consolidated Statement of Profit
and Loss.
The full impact on the results for the period ended 30 June 2022 and the
financial position at 30 June 2022 has been disclosed fully in Note
13.
.
2 Revenue
Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021
Year to 31 December 2021
$'000 $'000 $'000
Disaggregation of revenue
An analysis of turnover by type is given below:
Sale of parts 55,299 64,393 110,764
Sale of tooling (including design and development) 1,923 10,265 22,175
________ ________ ________
Total revenues
57,222 74,658 132,939
________ ________ ________
All revenue is derived from goods transferred at a point in time.
An analysis of turnover by geographical market is given within Note 3.
All revenue is recognised from goods transferred at a point in time.
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
Other operations include two standalone subsidiaries which also manufacture
and sell kinematic interior parts for the automotive industry. These
subsidiaries do not meet the quantitative thresholds to be separate reportable
segments.
The Group evaluates segmental performance on the basis of revenue and profit
or loss from operations calculated in accordance with IFRS.
Unaudited 6 months ended 30 June 2022
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 1,923 55,299 - 57,222
Depreciation and amortisation - (2,972) - (2,972)
Finance expense - (824) (57) (881)
________ ________ ________ ________
Group and segment (Loss)/profit (1,035) (2,996) (5,193) (9,224)
________ ________ ________ ________
Unaudited 6 months ended 30 June 2021
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 10,265 64,393 - 74,658
Inter-Segmental revenue 3,145 36,307 - 39,452
Depreciation and amortisation - (2,446) - (2,446)
Finance expense (12) (1,260) (1,087) (2,359)
________ ________ ________ ________
Group and segment Profit/(Loss) 4,684 517 (3,001) 2,200
________ ________ ________ ________
Year ended 31 December 2021
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 22,175 110,764 - 132,939
Depreciation and amortisation - (5,585) - (5,585)
Finance expense - (2,112) (2,364) (4,476)
________ ________ ________ ________
Segment (Loss)/profit 5,260 (2,636) (9,489) (6,865)
________ ________ ________
Share of post-tax loss of equity accounted associates (579)
_______
Group Loss before tax (7,444)
_______
External revenue by location of customers
Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021 Year ended 31 December 2021
$'000 $'000 $'000
UK 10,146 13,588 20,840
US 14,376 13,065 29,489
China 8,464 20,904 18,289
Turkey 5,619 5,524 9,690
Czech Republic 10,767 12,841 35,356
Brazil 2,021 2,239 3,074
Spain 2,708 5,002 6,985
Thailand 1,023 1,119 2,187
Other 2,098 376 7,029
__________ __________ __________
57,222 74,658 132,939
__________ __________ __________
4 Non-recurring items
Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021 Year ended 31 December 2021
$'000 $'000 $'000
AIM listing fees 31 - 1,810
December 2021 Turkish foreign exchange losses - - 1,113
Impairment of associate - - 1,627
Irrecoverable excess freight costs 65 589 1,021
CAS losses (before transfer pricing adjustments) 671 - -
Hyperinflationary adjustments 563 - -
_______ _______ _______
Total
1,330 589 5,571
_______ _______ _______
The Directors consider that it is appropriate to remove the non-recurring
costs and certain non-trading items discussed below to better allow the reader
of the accounts to understand the underlying performance of the Group.
The AIM listing completed in December 2021 incurred one-off transaction costs
and advisory fees. Costs have been recognised within administrative expenses
in relation to this.
In December 2021, the Turkish Lira was significantly depreciated against the
US Dollar following unprecedented Government announcements in Turkey. This
resulted in the Group incurring one-off unrealised foreign exchange losses of
$1,113,000 during December 2021, arising in Chinatool Otomotiv San. Tic. Ltd
Sti.
An impairment review of the loans and shareholdings the Group held in Marin
Engineering Limited and Scomadi (Thailand) Co. Ltd. was completed in 2021.
These balances were fully impaired before the loan was written off and the
shares were transferred to a third party. This resulted in a one-off
impairment charge of $1,627,000 (2020:$nil) in the year ended 31 December
2021.
Global freight costs have temporarily increased significantly following the
pandemic and related logistic issues. This has resulted in freight container
costs exceeding the container rates quoted to customers. In recognition of
this expecting to normalise over time, the Group has negotiated with customers
to maximise the recovery of excess freight costs. There is however an element
of excess freight costs which is deemed irrecoverable which has been
recognised within distribution expenses.
In July 2022 the Directors of the Group have taken the decision to terminate
operations at Chinatool Automotive Systems Limited (CAS) following a
comprehensive commercial review of their operations. The Directors do not
consider that these losses will continue to be incurred going forward. For the
period to 30 June 2022, Chinatool Automotive Systems Limited generated a loss
of $671,000.
Effective from 1 January 2022, the Group has applied IAS 29, Financial
Reporting in Hyperinflationary Economies for its subsidiary in Turkey. The
impact of these adjustments in the period to 30 June 2022 increased reported
revenue by $675,000, increased cost of sales by $1,039,000, increased
administrative expenses by $201,000 and increased other income by $2,000. See
Note 13 for further details.
5 Loss per share
Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021 Year ended 31 December 2021
Number Number Number
Weighted average number of equity shares 50,933,289 19,600,000 20,286,757
$ $ $
Earnings, being (loss)/profit after tax (7,740,000) 2,059,000 (6,336,000)
Cents Cents Cents
Basic (loss)/profit per share (15.2) 10.51 (31.2)
Diluted (loss)/profit per share (15.2) 10.51 (31.2)
At 30 June 2022, the share options which were granted on 24 June 2022 (see
Note 12) could have a dilutive impact on earnings per share.
The vesting conditions of these share options includes earnings based targets
for the Group for the financial years ending 31 December 2023, 31 December
2024 and 31 December 2025. For the period ending 30 June 2022, earnings levels
are below the threshold required under the share options vesting conditions.
If this level of earnings continued to the years to which the vesting
conditions relate then the options would not meet their vesting conditions.
IAS 33 requires that the number of contingently issuable shares included in
the calculation of diluted earnings per share is based on the number of shares
issuable if the end of the reporting period were the end of the contingency
period.
The weighted average number of shares outstanding at 30 June 2021 has been
adjusted to 19,600,000 to reflect the share dilution that occurred on 22
November 2021. At 30 June 2021, there were 98,000 shares outstanding with a
nominal value of £1 each. On 22 November 2021, these were sub-divided into
19,600,000 shares with a nominal value of £0.005 each. IAS 33 requires that
in such events whereby the number of Ordinary Shares is increased without an
increase in resources, the number of Ordinary Shares outstanding before the
event is adjusted to reflect the event as if it has occurred at the beginning
of the earliest period presented.
6 Property, plant and equipment
Plant and Fixtures Under Motor
equipment and fittings construction vehicles Total
$'000 $'000 $'000 $'000 $'000
Cost
Balance at 16,687 3,323 - 38 20,048
1 January 2021
Additions 1,254 837 - - 2,091
Disposals - - - - -
Re-classifications - - - - -
Effect of movements in foreign exchange - - - - -
________ ________ ________ ________ ________
Balance at 17,941 4,160 - 38 22,139
30 June 2021
________ ________ ________ ________ ________
Balance at 17,297 4,686 - 34 22,017
1 January 2022
Hyperinflation adjustment 288 144 - - 432
Additions 1,427 275 - - 1,702
Disposals (240) (140) - - (380)
Re-classifications (419) - - - (419)
Effect of movements in foreign exchange (1,023) (255) - (1) (1,279)
________ ________ ________ ________ ________
Balance at 17,330 4,710 - 33 22,073
30 June 2022
________ ________ ________ ________ ________
Depreciation
Balance at 8,571 1,855 - 38 10,464
1 January 2021
Depreciation charge for the year 889 490 - - 1,379
Disposals - - - - -
Effect of movements in foreign exchange - - - - -
________ ________ ________ ________ ________
Balance at 9,460 2,345 - 38 11,843
30 June 2021
________ ________ ________ ________ ________
Balance at 8,883 2,793 - 34 11,710
1 January 2022
Depreciation charge for the year 760 428 - - 1,188
Disposals (129) (5) - - (134)
Reclassifications (87) - - - (87)
Effect of movements in foreign exchange (474) (164) - (1) (639)
________ ________ ________ ________ ________
Balance at 8,953 3,052 - 33 12,038
30 June 2022
________ ________ ________ ________ ________
Net book value
At 30 June 2021 8,481 1,815 - - 10,296
________ ________ ________ ________ ________
At 30 June 2022 8,377 1,658 - - 10,035
________ ________ ________ ________ ________
7 Inventories
Unaudited as at 30 June 2022 Unaudited as at 30 June 2021 As at 31 December 2021
$'000 $'000 $'000
Raw materials and consumables 9,336 9,494 8,627
Work in progress 7,325 12,605 6,654
Finished goods 27,611 24,611 24,498
_______ _______ _______
44,272 46,710 39,779
_______ _______ _______
8 Trade and other receivables
Unaudited as at 30 June 2022 Unaudited as at 30 June 2021 As at 31 December 2021
$'000 $'000 $'000
Trade receivables 26,927 21,013 26,444
Other debtors 566 2,063 2,633
Loan receivables - 443 -
________ ________ ________
27,493 23,519 29,077
Prepayments 13,359 23,979 13,705
________ ________ ________
Total trade and other receivables 40,852 47,498 42,782
________ ________ ________
The carrying value of trade and other receivables classified at amortised cost
approximates fair value.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision to trade receivables.
The expected loss rates are based on the Group's historical credit losses. Due
to the nature of the Group's customers no credit loss provision has been made
at the period end.
9 Loans and borrowings
Unaudited as at 30 June 2022 Unaudited as at 30 June 2021 As at 31 December 2021
$'000 $'000 $'000
Non-current liabilities
Secured bank loans - (11,437) -
Loan notes - (7,794) -
Non-current portion of finance lease liabilities - (148) (103)
________ ________ ________
- (19,379) (103)
________ ________ ________
Current liabilities
Current portion of secured bank loans (9,132) (20,990) (5,452)
Current portion of finance lease liabilities (60) (197) (278)
Unsecure bank overdraft (3,537) (5,465) (3,638)
Invoice finance (13,328) (11,144) (10,997)
Unsecured loan - (2,500) (2,500)
________ ________ ________
(26,057) (40,296) (22,865)
________ ________ ________
(26,057) (59,675) (22,968)
________ ________ ________
10 Trade and other payables
Unaudited as at 30 June 2022 Unaudited as at 30 June 2021 As at 31 December 2021
$'000 $'000 $'000
Current
Trade payables 26,544 20,487 24,938
Non-trade payables and accrued expenses 11,418 25,135 11,419
Employee social security and taxes 661 3,274 7,388
Contract liabilities 7,112 9,033 2,925
Other payables 4,527 2,941 3,359
Provisions for losses on forward contracts 1,008 - 15
________ ________ ________
51,270 60,870 50,044
________ ________ ________
Included within trade and other payables is $Nil (2020 - $Nil) expected to be
settled in more than 12 months.
11 Related parties
The compensation of key management personnel (including the directors) is as
follows:
Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021
Year ended 31 December 2021
$'000 $'000 $'000
Key management remuneration including social security costs 646 439 921
Company contributions to money purchase pension plans 5 2 5
________ ________ ________
651 441 926
________ ________ ________
12 Share options
On 24 June 2022 CT Automotive Group PLC granted share options to 3 Directors.
Subject to vesting conditions, the Directors will have the option to acquire a
total of 2,546,662 Ordinary Shares at an exercise price of £0.005 per share.
The options will vest in 3 equal tranches on 23 December 2024, 23 December
2025 and 23 December 2026 subject to vesting conditions based on
earnings-based targets for the financial years ended 31 December 2023, 31
December 2024 and 31 December 2025.
Due to its immaterial value, no share-based payment charge has been recognised
in the period to 30 June 2022.
13 Turkey hyperinflation
Based on inflation data presented in 2022 by the Turkish Statistical
Institute, the Directors consider that Turkey is hyperinflationary as at 30
June 2022. IAS 29 has been applied to the financial statements of the Group's
Turkish entity: Chinatool Otomotiv San. Tic. Ltd. Sti. as this entity's
functional currency is Turkish Lira.
The financial statements of Chinatool Otomotiv San. Tic. Ltd. Sti. are based
on a historical cost approach. For the current and comparative periods these
have been restated for the changes in the general purchasing power of the
Turkish Lira and are stated in terms of the measuring unit current as at 30
June 2022.
Consumer Price Index data from the World Bank and the Turkish Statistical
Institute has been used to select appropriate indices for these adjustments.
The cumulative adjustments for IAS 29 across the financial statements for the
period to 30 June 2022 are presented below.
Unaudited 6 months to 30 June 2022 (adjusted for IAS 29)
Unaudited 6 months to 30 June 2022 (before IAS 29)
IAS 29 adjustment
Consolidated statement of profit and loss and other comprehensive income $'000 $'000 $'000
Revenue 56,548 674 57,222
Cost of sales (41,679) (1,039) (42,718)
Gross profit 14,869 (365) 14,504
Distribution expenses (4,007) - (4,007)
Other operating income 240 3 243
Administrative expenses (19,092) (243) (19,335)
Operating profit/(loss) (7,990) (605) (8,595)
Financial expenses (881) - (881)
Gain on monetary assets - 252 252
Profit/(loss) before tax (8,871) (353) (9,224)
Taxation 1,396 88 1,484
Profit/(loss) for the year (7,475) (265) (7,740)
Foreign currency translation differences (384) 24 (360)
Total comprehensive income/(loss) for the year (7,859) (241) (8,100)
Unaudited as at 30 June 2022 (adjusted for IAS 29)
Unaudited as at 30 June 2022 (before IAS 29)
IAS 29 adjustment
Consolidated balance sheet $'000 $'000 $'000
Property, plant and equipment 9,649 386 10,035
Intangible assets 575 - 575
Goodwill 2,417 - 2,417
Right of use assets 8,558 45 8,603
Deferred tax assets 3,508 - 3,508
Non-current assets 24,707 431 25,138
Inventories 44,112 160 44,272
Tax receivable 1,134 - 1,134
Trade and other receivables 40,850 2 40,852
Cash and cash equivalents 5,835 - 5,835
Current assets 91,931 162 92,093
Other interest-bearing loans and borrowings (< 1 year) (26,057) - (26,057)
Trade and other payables (51,269) (1) (51,270)
Tax payables (596) 80 (516)
Lease liabilities (< 1 year) (2,050) - (2,050)
Current liabilities (79,972) 79 (79,893)
Lease liabilities (> 1 year) (6,366) (70) (6,436)
Non-current liabilities (6,366) (70) (6,436)
Net assets/(liabilities) 30,300 602 30,902
Share capital 342 - 342
Share premium 54,717 - 54,717
Translation reserve 196 24 220
Merger reserve (35,812) - (35,812)
Retained earnings 10,857 578 11,435
Total equity 30,300 602 30,902
14 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. 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
- Adjusted EBITDA margin - calculated as adjusted EBITDA divided by
revenue in the year
- Adjusted operating profit - calculated as Operating profit/(loss)
adjusted for non-recurring items
- Adjusted operating profit margin - calculated as adjusted operating
profit divided by revenue in the year
EBITDA is calculated based using Operating profit/(loss) before interest,
taxes, depreciation and amortisation.
Detail of each of the non-recurring items is disclosed in Note 4.
Adjusted EBITDA and adjusted EBITDA margin
Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021 Year ended 31 December 2021
$'000 $'000 $'000
Adjusted EBITDA (4,292) 8,282 8,767
Non-recurring items
- AIM listing fees (31) - (1,810)
- Turkish foreign exchange losses - - (1,113)
- Turkey hyperinflationary adjustments (563) - -
- Impairment of associate - - (1,627)
- Irrecoverable excess freight costs (65) (589) (1,021)
- CAS losses (before transfer pricing) (671) - -
_______ _______ _______
EBITDA (5,622) 7,693 3,196
_______ _______ _______
Adjusted EBITDA margin (8.6%) 11.1% 6.6%
Adjusted operating (loss)/profit and adjusted operating profit margin
Unaudited 6 months to 30 June 2022 Unaudited 6 months to 30 June 2021 Year ended 31 December 2021
$'000 $'000 $'000
Adjusted operating (loss)/profit (7,265) 5,148 3,182
Non-recurring items
- AIM listing fees (31) - (1,810)
- Turkish foreign exchange losses - - (1,113)
- Impairment of associate - - (1,627)
- Irrecoverable excess freight costs (65) (589) (1,021)
- CAS losses (before transfer pricing) (671) - -
- Hyperinflationary adjustments (563) - -
_______ _______ _______
Operating (loss)/profit (8,595) 4,559 (2,389)
_______ _______ _______
Adjusted operating (loss)/profit margin (12.7%) 6.9% 2.4%
Adjusted operating (loss)/profit and adjusted operating profit margin
Unaudited 6 months to 30 June 2022
Unaudited 6 months to 30 June 2021
Year ended 31 December 2021
$'000
$'000
$'000
Adjusted operating (loss)/profit
(7,265)
5,148
3,182
Non-recurring items
- AIM listing fees
(31)
-
(1,810)
- Turkish foreign exchange losses
-
-
(1,113)
- Impairment of associate
-
-
(1,627)
- Irrecoverable excess freight costs
(65)
(589)
(1,021)
- CAS losses (before transfer pricing)
(671)
-
-
- Hyperinflationary adjustments
(563)
-
-
_______
_______
_______
Operating (loss)/profit
(8,595)
4,559
(2,389)
_______
_______
_______
Adjusted operating (loss)/profit margin
(12.7%)
6.9%
2.4%
15 Cash and cash equivalents
Cash and cash equivalents for purposes of the statement of cash flows
comprises:
Unaudited as at 30 June 2022 Unaudited as at 30 June 2021 As at 31 December 2021
$'000 $'000 $'000
Cash and cash equivalents 5,835 3,135 13,445
Unsecured bank overdraft (3,537) (5,465) (3,638)
________ ________ ________
2,298 (2,330) 9,807
________ ________ ________
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