REG - Gooch & Housego PLC - Interim Results
06/06/2023 07:00
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RNS Number : 7148B Gooch & Housego PLC 06 June 2023
6 June 2023
GOOCH & HOUSEGO PLC
("G&H", the "Company" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2023
Positive progress in the first half. New strategy focused on "Delivering
sustainable margin growth"
Gooch & Housego PLC (AIM: GHH), the specialist manufacturer of optical
components and systems, today announces its interim results for the six months
ended 31 March 2023.
Key Financials
Period ended 31 March H1 2023 H1 2022 Change
Revenue £71.3m £54.1m 31.7%
Adjusted profit before tax* £4.5m £3.6m 26.2%
Adjusted basic earnings per share* 14.9p 11.8p 26.3%
Net debt excluding IFRS 16 £12.9m £5.9m £7.0m
Net debt including IFRS 16 £19.2m £12.0m £7.2m
Statutory profit before tax £3.3m £1.2m £2.1m
Statutory basic earnings per share 10.9p 6.9p 58.0%
Interim dividend per share 4.8 4.7 2.1%
*Adjusted for amortisation of acquired intangible assets and non-recurring
items.
Key points
§ H1 revenue up 31.7% at £71.3m (H1 2022: £54.1m) reflecting strong growth
in all market segments
§ Increase in productive capacity and steady reduction in overdue backlog
§ Adjusted operating profit up 32.9% to £5.2m (H1 2022: £3.9m)
§ Cost inflation persists but is being passed on with some time lag
§ Order book remains strong at £124.4m (H1 2022: £119.9m)
§ Cash from operations of £6.0m (H1 2022: £3.2m) despite £5m investment in
inventory levels
§ Interim dividend of 4.8p per share (H1 2022: 4.7p)
§ Full year expectations are unchanged
§ Review of the Group's strategy complete
Charlie Peppiatt, Chief Executive Officer of Gooch & Housego, commented:
"Positive progress has been made in the first half with increasing operational
output and continued strong levels of customer engagement on new product
opportunities. Full year expectations for the Group are unchanged and the
outcome of our strategy review confirms a clear route to mid-teens returns in
the medium term."
Analyst meeting
A meeting for analysts will be held at 10.30am on the morning of 6 June 2023
at the offices of Buchanan, 107 Cheapside, London EC2V 6DN. To register
attendance, please contact Buchanan at G&H@buchanan.uk.com
(mailto:G&H@buchanan.uk.com) .
A live audio webcast of the meeting will be available via the following link:
https://webcasting.buchanan.uk.com/broadcast/646b30943c64069e62cb59e0
(https://webcasting.buchanan.uk.com/broadcast/646b30943c64069e62cb59e0)
Following the meeting, a recording of the webcast will be made available for
replay at the Group's website at https://gandh.com/investors/
(https://gandh.com/investors/) .
For further information please contact:
Charlie Peppiatt, Chief Executive Officer Gooch & Housego PLC +44 (0) 1460 256440
Chris Jewell, Chief Financial Officer
Mark Court / Abigail Gilchrist Buchanan +44 (0) 20 7466 5000
G&H@buchanan.uk.com (mailto:G&H@buchanan.uk.com)
Christopher Baird / David Anderson Investec Bank plc +44 (0) 20 7597 5970
Notes to editors
1 Gooch & Housego is a photonics technology business with operations
in the USA and Europe. A world leader in its field, the company researches,
designs, engineers and manufactures advanced photonic systems, components and
instrumentation for applications in the Aerospace and Defence, Industrial and
Telecom, and Life Sciences sectors. World leading design, development and
manufacturing expertise is offered across a broad range of complementary
technologies. It is headquartered in Ilminster, Somerset, UK.
2. This announcement contains certain forward-looking statements that are
based on management's current expectations or beliefs as well as assumptions
about future events. These are subject to risk factors associated with,
amongst other things, the economic and business circumstances occurring from
time to time in the countries and sectors in which G&H operates. It is
believed that the expectations reflected in these statements are reasonable
but they may be affected by a wide range of variables which could cause actual
results, and G&H's plans and objectives, to differ materially from those
currently anticipated or implied in the forward-looking statements. Investors
should not place undue reliance on any such statements. Nothing in this
announcement should be construed as a profit forecast.
Operating and Financial Review
Performance Overview
Revenue for the six month period totalled £71.3m representing a 31.7% growth
over the comparator period, or 20.6% on a constant currency basis. The Group's
trading in the first half of the financial year benefited from the additional
capacity that had been put in place in both the second half of the previous
financial year and the first months of the current trading period allowing us
to trade out the record order book brought forward into FY2023. Our production
teams are now substantially resourced and good progress has been made in
reducing the level of order book arrears and the lead times the Group is able
to offer customers for the delivery of new orders.
In the first half of the financial year we have seen strong revenue growth
from our industrial laser and semiconductor markets. The Group is supplying
products that are at the heart of state of the art deep ultraviolet and
extreme ultraviolet lithography equipment used in the production of the most
advanced microchips in the world. One of these programmes is now entering high
volume production and is expected to provide us with good support for our
semiconductor market revenues for several years to come. The drive for
technological sovereignty in the area of semiconductor manufacture underpins
strong demand from end customers.
Deliveries into our industrial laser markets have also grown, especially into
Asian markets. This has been driven by post-pandemic end customer demand for
electronic products recovering strongly although demand levels are expected to
normalise in the coming period. Revenues from our components used in medical
lasers also grew thanks to higher levels of demand for cosmetic procedures but
again we expect this to normalise. Finally in our A&D markets we saw
strong revenue growth thanks to several US programmes for military guidance
systems entering their production phase. Demand for our precision optics used
in military imaging systems has also been strong.
Input cost inflation has continued to be a factor impacting the Group's
profitability. We have matched general wage inflation in the locations in
which we operate in order to both retain and attract the skilled employees we
need in our facilities. In addition, our suppliers have continued to pass on
their own cost inflation in the form of higher material pricing. To counter
this we are running a structured programme to increase our prices on new
quotes issued to customers wherever the competitive environment allows us to
do so. Nevertheless, given the size of the order book that we brought into the
current financial year there is some lag in the benefit of that higher pricing
being seen in the Group's results. In the first half inflation, therefore,
represented a net headwind to Group profitability although the effect of our
pricing actions will provide more benefit in the second half of the financial
year.
We are starting to see the order book return to more normalised levels after
the record levels of intake achieved by the Group in the second half of
FY2022. This was driven by many customers, especially in the Industrial
markets, overdriving their supply chains to ensure both continuity of supply
and to mitigate the effect of price inflation. During the first half of FY2023
we have, therefore, seen some of these customers slow down the level of new
orders as well as seek to push out delivery dates for some of the orders
already placed with us as they look to regularise their inventory holding
levels. Consequently, the Group's book to bill ratio in the first half of the
financial year was 0.8x and the order book finished the period at £124.4m (31
March 2022: £119.9m). This represents a reduction of 15.8%, or 11.1% at
constant currency, on the order book at 30 September 2022 of £147.7m.
Nevertheless, the order book at March 2023 remained at a healthy level and the
Group has the necessary order cover in place for the delivery of full year
market consensus revenues.
The Group continues to maintain higher levels of safety stocks given the
continuing extended lead times in some part of our supply chain. Furthermore,
in some cases our customers have requested that we protect their production
programmes by holding higher levels of inventory. Where this is the case we
will seek funding from customers for this additional investment.
Revenue
Six months ended 31 March 2023 2022
£'000 £'000 % Change
Industrial 37,928 27,743 36.7%
Aerospace & Defence 17,535 13,127 33.6%
Life Sciences 15,825 13,264 19.3%
Group Revenue 71,288 54,134 31.7%
Products and Markets - Industrial
Gooch & Housego's principal industrial markets are industrial lasers,
telecommunications, sensing and semiconductor manufacturing. Industrial lasers
are used in a diverse range of precision material processing applications
ranging from microelectronics and semiconductors to automotive manufacturing.
Overall, sales of products into our industrial markets in the six months ended
31 March 2023 grew by 36.7%, or 22.1% when measured on a constant currency
basis, compared with the equivalent period last year. We saw strong growth in
our semiconductor and industrial laser markets. First production revenues of
our fibre optic splitter units used in advanced semiconductor manufacturing
equipment were achieved in the period. Demand for our germanium acousto-optic
modulator products used in CO(2) lasers was also particularly strong.
Deliveries of our hi-reliability fibre couplers were stable compared with the
comparator period. We are in the final stages of approving our contract
manufacturing partner in Asia for the production of these products and we
expect them to make their first production shipments to customers in the
second half of the current financial year. This will provide an opportunity to
increase supply and for margin accretion on this product line.
In the sensing market we secured additional volume from our products used in
distributed monitoring solutions used for the protection of remote assets. We
are also making good progress in securing additional revenues in the wind
sensing market where we are increasingly offering a full module solution to
our partners in this growing market.
We remain a key supplier to both US and French research establishments seeking
to achieve energy generation from inertial confinement fusion. Demand from
these customers for our crystal growth capabilities is growing and we are
investing in additional growth stations to support this revenue stream.
The additional volume achieved in this segment helped deliver a 29% growth in
adjusted operating profit compared with H1 2022, to £5.3m. In common with the
reported return on sales figures in the Group's other two markets, the effect
on revenues of both favourable currency movements compared with H1 2022 and
the pass through of inflationary cost increases in the form of higher pricing
suppressed the reported return on sales percentage which was 14.1% for this
segment in the first half. (H1 2022: 14.9%). Removing the effects of currency
movement and pricing adjustments the reported return on sales for this segment
for the half year was 15.1%.
Products and Markets - Aerospace & Defence (A&D)
Product quality, reliability and performance are paramount in this sector,
playing to G&H's strengths, along with our commitment to provide value
through our wide photonics technical capabilities. We have solid,
well-established positions in target designation and range finding, ring laser
and fibre optic gyroscope navigational systems, infrared and RF
countermeasures, periscopes and sighting systems, opto-mechanical subsystems
used in unmanned aerial vehicles (UAVs) and space satellite communications. We
are working with our partners on the development of new directed energy weapon
systems that are increasingly specified as part of the defensive suites of
both naval and land platforms.
The trend in funding priorities in both the US and Europe continues to favour
G&H products and capabilities. The need for all weather precision guidance
and targeting generates the demand for the product capabilities that G&H
can offer. The conflict in the Ukraine is also generating a recognition of the
continuing importance of armoured vehicles in the modern military environment,
and in that area G&H provides some of the most advanced optical sighting
systems as evidenced by our participation on the UK MOD's programme to upgrade
the Challenger MBT platform. During the period the recent increase in
quotations we have provided for programmes to replenish military vehicles
deployed by NATO members in Ukraine is now starting to result in orders for
G&H, and there are good prospects for further significant orders to be
secured.
Our A&D revenues were up 33.6% on the comparator period, or 24.6% on a
constant currency basis. Deliveries to our customers' imaging systems
programmes, typically used on manned and unmanned aircraft platforms, grew
during the period. Our camera systems are also used for the identification of
targets including drones and there is an encouraging level of interest from
our OEM customers for our advanced infra-red products that can address their
emerging needs in this area.
Our Boston business has delivered good growth in output compared with the
first half of FY2022 thanks to its success in recruiting and training new team
members. Several of the site's programmes have transitioned from the
development to the production phase although the site continues to seek to
improve its production yields.
We continue to participate in our customers' programmes seeking to develop
laser based communication in the space market, both for satellite to satellite
and satellite to ground application. Our hi-reliability fibre couplers are
used in these space applications and we are also developing very high power
amplifiers that will be used in both satellite and ground station
applications. We believe we are well placed to benefit from this market as it
progressively replaces the current RF based technologies.
Additional volumes in this market helped to reduce the adjusted operating loss
of this segment to £1.9m (H1 2022: £(2.2)m). In the period production yields
on some programmes in both our Moorpark and Boston facilities were poor
reflecting the continuing training programmes that need to be completed for
new employees recruited to service our higher order book levels. We are also
reviewing closely some of the product lines within this sector to assess
whether we have sufficiently differentiated capabilities to allow us to secure
an acceptable return.
Products and Markets - Life Sciences
G&H's three principal Life Sciences revenue streams are derived from
diagnostics applications (the design, development and manufacturing of
diagnostic systems and fibre-optic modules based around our optical coherence
tomography (OCT) technology), surgery / treatments (electro-optics and
acousto-optics for medical lasers) and biomedical research (acousto-optics for
microscopy applications).
Our Life Sciences revenues were up 19.3% (13.6% on a constant currency basis)
in the six months to 31 March 2023, compared with the first half of FY2022. We
have seen further recovery in demand for our components used in laser surgery,
especially elective cosmetic surgery. Revenues from the sale of our medical
diagnostic equipment were slightly down compared with H1 2022. This was due to
two of our significant customers migrating to next generation equipment
programmes and ramping down demand for their current generation products. We
have secured the manufacture of their next generation systems and volumes from
these programmes are expected to ramp up in the second half of the financial
year. These systems assist in the targeted delivery of treatments for cancers.
We are also manufacturing a range of customer diagnostic instruments designed
to assist in the more precise diagnosis of conditions and prescription of
treatments for patients.
Our design team based in our medical equipment solutions business in Ashford
are fully engaged on the development of our customers' next generation systems
and these will typically migrate to production over the coming two/three
years. Plans are also in place to invest in expanding this area in the US in
order to provide a US based design and manufacturing offering to our customers
in that market, and we are in the final stages of contract negotiation with a
"launch" customer for the build of their diagnostic instrument in one of our
US facilities.
Adjusted operating profit in the segment grew by 8% to £2.3m (H1 2022:
£2.1m). Adjusted operating profit margin stood at 14.3% (H1 2022: 15.8%).
After eliminating the effects of currency and pricing H1 2023 return on sales
stood at 15.1%. We expect the Group's re-pricing activities to
disproportionately benefit this segment in the second half of the financial
year, in particular our ITL business as it starts to deliver one of our
customer's important next generation products. We intend to invest in the
business's US operations in order to secure a greater share of the very
significant US medical diagnostic market.
Strategy
Under the leadership of our new CEO, who joined the Group in September 2022,
the executive leadership team has carried out a strategy review during the
first half of the financial year. Many elements of the Company's existing
strategy over the last seven years, aimed at diversification into new markets,
focused R&D investment, operational excellence and value enhancing
acquisitions, were valid but execution and implementation had stalled and a
refresh was required.
Following the review, the Board is confident in the exciting prospects of
combining our photonics products and unique technical capabilities with the
next wave of growth forecast in the global photonics industry. Despite the
photonics components landscape becoming increasingly competitive, the
end-markets are large and growing at pace with closer integration of lasers,
optics and sensors creating new sources of value.
This is underpinned by many of the world's mega-trends from advancing
technologies like IoT, 5G/6G, AI, machine learning, VR, remote patient
monitoring and non-intrusive healthcare. The drive towards global
sustainability and geopolitical tensions also provides positive demand
momentum for our industry. Photonics is at the heart of global innovation and
the new frontiers of technology.
Our new strategy for delivering sustainable margin growth in the medium term,
is focused on transforming G&H to become an 'innovative customer focused
technology company' delivering responsibly and making a 'better world with
photonics'. We will seek to ensure that G&H becomes and remains the 'first
choice' for all our stakeholders whether that's our employees, our customers,
our shareholders, our eco-system partners or the communities in which we
operate. We will offer differentiated performance through four key strategic
priorities.
New Strategy: Delivering sustainable margin growth
1. People - Through harnessing the best talent across our whole
organisation, we will establish dynamic high-performance teams and create a
purpose-led culture that ensures G&H is a safe, engaging, diverse and
inclusive place to work and thrive.
2. Self-Help - By delivering an exceptional customer experience and making
it 'easier to do business with G&H' we will build long-term customer
partnerships and deliver profitable growth. We will achieve this by
disciplined focus on superior operational execution along with the agility and
wisdom to avoid repeating the manufacturing and supply chain problems of the
recent past.
3. Technology - We will deliver a better return from our advanced
technical expertise in photonics. We will create enhanced value from carefully
selected R&D projects for the right applications including developing
platform solutions to accelerate our time to market for new technology and
existing technology into new applications. This will unlock greater value
through increased G&H photonics system content in new products.
4. Investment - We will apply a more disciplined approach to the
allocation of resources to deliver value and accelerate accretive growth, both
organically and inorganically. We will refocus the business to invest in
higher margin products and sectors at the same time as addressing
non-performers, in combination with pursuing 'speed to value' acquisitions
strategically rather than opportunistically.
There are parts of the existing strategy that are being retained, but with
better execution and greater focus on delivering the desired outcome. The
Group will continue to look at diversification within limits and with greater
emphasis on synergies and simplification. The new strategy continues to seek
opportunities to enhance value by moving up the value chain, but the focus
will be more specific to coating, sub-systems and in Life Sciences through to
full systems where we can embed our bio-photonics technology into the medical
or IVD device. Our commitment to being customer-led remains but this will
require changes in behaviours as well as to our processes and systems to
ensure better results. We will also continue to offer a balanced portfolio
around Industrial, A&D and Life Sciences but with an increased emphasis on
capturing the opportunities in Life Sciences, especially in North America, and
Industry 4.0 from the next generation global semiconductor infrastructure
build out. We will also establish greater clarity on our value proposition
into the A&D market aligning resources to turn this business unit around
and deliver accretive performance for the Group.
The leadership team's review of the Group's strategy has identified areas
where we need a different emphasis and new direction. We have identified that
a different approach is required in how we invest in our people, our core
technology and in our product platforms in collaboration with our customers.
The Group has also carried out an assessment of its manufacturing strategy and
as a result will more proactively outsource certain stable product lines to
our contract manufacturing partners at an earlier stage in the product life
cycle where technological sovereignty is not a differentiator. During the
cycle of the new plan the Group expects the proportion of its revenues sourced
from product built by its contract manufacturing partners to increase from
less than 10% to circa 25%.
The new strategy will address non-performance and the process to assess and
rationalise non-core product lines has begun. This will be carried out in
combination with pursuing strategic 'speed to value' acquisitions that enhance
value creation through delivering commercial and operational synergies, and
which fill a gap in our existing portfolio.
End-Market Technology Focus
In the first six months of the current financial year, G&H invested £4.5m
in targeted R&D across our end markets. This was a 9.3% increase on the
same period last year demonstrating G&H's continued commitment to
investing in targeted R&D programmes. As part of the new strategy, we are
reviewing our technology roadmaps and looking at where we can deploy a
'platform design' solution to accelerate time to market and enhance our value
proposition.
Industrial
G&H will continue to develop and supply photonics solutions for some of
the most advanced precision products on the planet. With a core part of our
demand driven by the relentless pursuit of greater functionality from devices
on an ever-shrinking footprint, G&H is well positioned to address the key
growth drivers from mega-trends, such as IoT, AI, 5G, net zero and the Cloud,
that are transforming the way we do business, live our lives and interact with
others. Our product developments are focused in the following areas:
• Semiconductor and advanced microelectronics manufacturing
• Advanced photolithography systems especially supporting the DUV
and EUV eco-system for our acousto-optics, fibre optics and precision optics
• Undersea hi-reliability communications. G&H's products can be
found at the bottom of our deepest oceans coupling the fibre-optic cables that
carry 95% of the world's international internet traffic. We will continue to
focus on addressing this growing market with components and modules
• Sensing systems for machine vision and asset monitoring systems
• Green energy for net zero such as the laser modules in Lidar
systems used on wind turbines for remote sensing to optimise efficiency and
maintainability of sustainable energy generation from windfarms
Aerospace and Defence
G&H supplies many of the leading A&D contractors around the world and
in many areas is seen as a leader in supporting mission critical applications
with high performance optical components, modules and subassemblies. However,
over the last few years this business unit has not delivered the performance
expected. Successful deployment of the new strategy will require greater
discipline and clarity in our A&D business to ensure we align investment
and resources to deliver value from the product lines and the parts of the
businesses where G&H offers differentiated technology, products and
know-how. Therefore, we will be focusing on the following areas:
• Infrared electro-optic imaging and counter-unmanned aircraft
systems
• Communications and sensors for surveillance, reconnaissance and
intelligence applications
• Space photonics and geostationary satellite to ground
communications
• Directed energy systems through fibre-optics, electro-optics and
precision optics
• Coatings - anti-reflective and electro-optical protection
• Embedded image periscopes for armoured fighting vehicles
Life Sciences
G&H optical components help advance the performance and reliability of
life sciences and scientific research instrumentation for a variety of
applications from medical microscopy, diagnostic imaging and laser surgery. We
are recognised as a global leading provider of advanced optics, fibre optics,
acousto-optics and Pockels cells for medical research, diagnostics imaging and
specifically optical coherence tomography applications. We will continue to
focus on developing our world leading position in these areas.
Since the acquisition of Integrated Technologies Ltd (ITL) in 2018, we also
provide world class end-to-end design, regulatory approval support and
manufacturing services for medical devices and in-vitro diagnostics (IVD) and
laboratory instruments. As part of our new strategy, as well as developing
this offering into North America, we intend to expand our value proposition
through better combining the capabilities of these two parts of our Life
Science business to provide our customers unique value. We can help reduce
time to market through the medical design cycle and regulatory approval
process and achieve greater systems content where our bio-photonics
capabilities are embedded into the sub-system or full system.
Some key areas of focus for our Life Sciences business will be:
• In-vivo imaging with focus on multi-modal, functional and
fluorescence imaging
• In-vitro imaging with focus on confocal microscopy
• Medical aesthetic lasers
• Medical devices and IVD equipment with G&H bio-photonics and
optical content
As part of the strategic review the leadership team will be reviewing organic
and inorganic investment to accelerate the delivery of the strategy and
deliver improved earnings for the business. The Group's M&A strategy is
being refocused accordingly to align investment with the desired outcomes from
the strategic review. We are now focused on adding greater value through the
transition from complex photonics components to a sub-system or full system
solution. We are targeting businesses that enhance our fuller photonics
systems offering in Life Sciences, A&D and advanced Industrial with a
focus on some of the gaps that have been identified in our portfolio offering
(e.g. advanced coatings, complex systems assembly, new materials and embedded
electronics) to deliver speed to value and accelerate delivery of our new
strategy.
Corporate Values
The transformation of the Company through the successful implementation of the
Group's new strategy will be achieved by following G&H's corporate values
that guide the way we do business, consisting of customer focus, integrity,
action, unity and precision to deliver fundamental and lasting improvement for
our employees, for the profitability of the Company and for the sustainability
of our planet.
Alternative Performance Measures
In the analysis of the Group's financial performance, alternative performance
measures are presented to provide readers with additional information. The
interim report includes both statutory and adjusted non-GAAP financial
measures, the latter of which the Directors believe better reflect the
underlying performance of the business. Items excluded from the adjusted
results, together with their prior period comparatives, are set out below.
Reconciliation of adjusted performance measures
Operating profit Net finance costs Profit before tax Taxation Profit after tax Earnings per share
Half Year to 31 March 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000 pence pence
Reported 3,974 1,574 (712) (353) 3,262 1,221 (535) 504 2,727 1,725 10.9 6.9
Amortisation of acquired intangible assets 833 927 - - 833 927 (174) (217) 659 710 2.6 2.8
Restructuring costs 438 1,445 - - 438 1,445 (96) (252) 342 1,193 1.4 4.8
Deferred tax on goodwill - - - - - - - (675) - (675) - (2.7)
Adjusted 5,245 3,946 (712) (353) 4,533 3,593 (805) (640) 3,728 2,953 14.9 11.8
Adjusted profit before tax was £4.5m, an increase of 26.2% on the prior year
(H1 2022: £3.6m). This increase in profit reflects higher revenues as a
result of the addition of productive capacity during the second half of FY2022
and the first months of the current financial year.
Cash Flow and Financing
In the six months ended 31 March 2023, G&H generated cash from operations
of £6.0m, compared with £3.2m in the same period of 2022. Inventory levels
were increased by £5m to support growing production volumes as well as to
ensure we continue to protect our customers' delivery schedules in the face of
continuing inconsistency in on time delivery from some areas of our supply
chain. There was a net inflow of £1.5m from the movement on receivables and
payables.
Capital expenditure on property, plant and equipment was £3.4m in the period
(2022: £3.0m). Further investments have been made in our precision optic
facilities to add further capacity to our surface finishing stations and to
increase automation in areas of the production process. We have also
procured new equipment used in the production of our fibre optic products
which is now located at our contract manufacturing partner in Asia and which
support their transition from product qualification into the production phase.
During the period we transitioned our ITL business in Ashford on to the
Group's enterprise resource planning tool, and that business' US facility will
be migrated in Q3 FY2023. This means that all of the Group's operating
locations outside of China will be using this common system providing our
managers with a single and consistent set of business reports to better manage
the business.
As at 31 March 2023 the Group had drawn $23.8m on its revolving credit
facility (September 2022: $21.3m). The Group has access to a total committed
facility of $40m with a further $30m available from an uncommitted accordion
facility.
At 31 March 2023 the Group's net debt totalled £19.2m (30 September 2022 -
£19.1m) including lease liabilities of £6.3m (30 September 2022 - £6.3m).
Consistent with the Group's borrowing agreements, which exclude the impact of
IFRS 16, Leases, our leverage ratio was 0.8 times at 31 March 2023 (30
September 2022: 0.7 times).
Environmental, Social and Governance
In the first half of the year the Group achieved a like for like reduction of
13.4% in its greenhouse gas emissions intensity figure to 29.1 tCO2/£1m of
revenue compared with the comparator period thanks to our investment to
generate our own electricity from solar sources and from our programme to
progressively increase the proportion of our purchased electricity coming from
renewable sources. In the UK all of our purchased electricity is generated
from renewable sources. In the US as we renew our contracts for the purchase
of electricity we are choosing to migrate to renewable energy sources wherever
they are available. We are on track to achieve our target of net zero scope 1
and 2 emissions by 2035.
We have used the structure of ISO 50001 - Energy Management Systems - to put
in place plans for each of our sites to reduce energy consumption. For example
we are in the process of installing a new voltage optimisation system at our
Ilminster site which is expected to reduce its energy consumption by around
10% when operational.
Early in the third quarter of FY2023 we are delighted to have ISO 14001 -
Environmental Management -accreditation at our Ilminster and Torquay
facilities We will now extend the accreditation programme, and its US
equivalent, to the remainder of the Group.
We are proud to be able to support our local communities by offering highly
skilled roles in a broad range of production and business functions. We
operate programmes to employ school leaver apprentices supporting their first
steps in employment with structured day release college courses and we are
pleased to see many of the team members taking on more senior roles as they
quickly progress in their careers with the Group.
Dividends
Given the positive outlook for the Group, the Board has declared an interim
dividend of 4.8p per share (2022: 4.7p). This dividend will be payable to
shareholders on the register as at 23 June 2023 on 28 July 2023.
Prospects and outlook
We are seeing sustained demand across the Company's target markets and our
order book remains strong at £124.4m (H1 2022 £119.9m) despite a trend
towards more normalised levels. The order book includes significant new
programme wins for next generation products in the field of acousto-optic
modulators, hi-reliability fibre optic coupling technology, electronic optical
sighting systems and medical lasers.
The investments that were made in adding additional capacity, in our site in
Fremont, CA for the semiconductor market, Cleveland, OH for the medical laser
market and Ilminster, Somerset which services the A&D optics market, along
with the improved operational focus of the leadership team have resulted in a
significant increase in productive capacity and a steady reduction in overdue
backlog during the first half of the financial year. We expect to continue to
see improved operational performance in the second half of the year to meet
customer demand and improve G&H's service levels to our customers. We
have also seen some positive improvement in our ability to hire talent into
the organisation both in UK and USA and we are now close to being fully
staffed in both regions. Due to the highly technical nature of our activities
training new employees is a critical and lengthy part of the onboarding
process and an area the upgraded HR team are focused on improving.
We continue to invest in our highly productive R&D team. Our engineering
resources are focused on working with our customers on their next generation
development programmes. There are a number of near term opportunities which
include developing the next generation of extreme ultraviolet lasers for the
manufacture of nanoelectronics; designing advanced embedded imaging periscopes
for armoured vehicle platform upgrades and replenishment for the Ukraine
conflict, exploiting our optical coherence tomography capability in
cardiovascular disease detection and expanding our Life Sciences system
offering with G&H optical technology.
Our balance sheet is strong, our net debt is low and we are in a good position
to continue to invest in our target sectors. The Board's confidence in the
trading prospects of the Group is reflected in an increased interim dividend
for the period.
We have completed a thorough review of the Group's strategy and have developed
a plan that provides a clear route to mid-teens returns in the medium term.
This new strategy is being communicated and deployed across the Company over
the next six weeks and we will provide regular updates on progress on the
plan's execution as we move forward. The Board and wider senior leadership are
committed to transforming G&H to become an 'innovative customer focused
technology company' that delivers responsibly making a 'better world with
photonics'. We intend that the Group becomes and remains the 'first choice'
for all our stakeholders whether that is our employees, our customers, our
shareholders, our eco-system partners or the communities in which we operate.
Full year expectations are unchanged and the long-term outlook for our
technologies and capabilities in all our target sectors remains strong
enhanced by the clarity of focus from the Group's new strategy.
Principal Risks and Uncertainties
The principal risks and uncertainties to which the Group is exposed and our
approach to managing those risks are unchanged from those identified on page
50 of our 2022 Annual Report available on our website. Whilst we have made
good progress in reducing the risk associated with the management of our
production capacity, and inflationary impacts on the business are easing, we
continue to monitor these two areas closely.
Maintaining fully resourced teams is critical to the success of our business.
Competition for skilled employees remains fierce and we have continued to
quickly take action where it has been necessary to retain and attract
employees in addition to the general company-wide salary awards made to our
staff at the beginning of the calendar year.
Our suppliers continue to seek to pass on their own cost input inflation in
the form of higher prices to us. We seek to mitigate this through the use of
long-term agreement with our suppliers that lock in pricing in exchange for
volume commitments. We can also help our suppliers, and especially our
contract manufacturing partners, by providing improved medium term demand
forecasts to allow them to better plan their supply to us. As a further
measure to maintain competitive tension in our supply chain our procurement
team works with our engineering team to identify and qualify alternative
sources of supply to mitigate the risk from sole source suppliers. Finally, we
are also maintaining higher levels of safety stock to provide some protection
from incomplete supply. These additional inventory holdings will be
eliminated as we gain greater confidence in the ability of our suppliers to
ensure full supply.
We remain alert to the risk of economic slowdown, especially in our Industrial
markets. We have seen signs of destocking by some of our customers in those
markets. We believe that by close engagement with them on the development of
their next generation products we can both secure additional market share as
well as receive early indication of any demand slow down thereby allowing us
to better plan our production capacity. We believe we remain well position in
long term growth market such as semiconductor manufacture, laser based space
communication and directed energy systems which will protect the business
through the economic cycle.
We are mindful of some recent failures among financial institutions and
concerns about the viability of others. We have reviewed the institutions that
we are working with and have satisfied ourselves as to their viability by
reference to the latest reports from credit rating agencies.
Group Income Statement
Unaudited interim results for the 6 months ended 31 March 2023
Half Year to 31 March 2023 (Unaudited) Half Year to 31 March 2022 (Unaudited) Full Year to 30 September 2022
(Audited)
Note Underlying Non-underlying Total Underlying Non-underlying Total Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 4 71,288 - 71,288 54,134 - 54,134 124,802
Cost of revenue (50,674) - (50,674) (36,791) - (36,791) (85,741)
Gross profit 20,614 - 20,614 17,343 - 17,343 39,061
Research and development (4,499) - (4,499) (4,118) - (4,118) (9,181)
Sales and marketing (5,007) - (5,007) (3,994) - (3,994) (8,697)
Administration (6,179) (1,271) (7,450) (5,554) (2,372) (7,926) (16,574)
Impairment of goodwill and acquired intangible assets
- - - - - - (6,726)
Other income and expenses 316 - 316 269 - 269 560
Operating profit 4 5,245 (1,271) 3,974 3,946 (2,372) 1,574 (1,557)
Net finance costs (712) - (712) (353) - (353) (717)
Profit before income tax expense 4,533 (1,271) 3,262 3,593 (2,372) 1,221 (2,274)
Income tax expense 6 (805) 270 (535) (640) 1,144 504 264
Profit for the year 3,728 (1,001) 2,727 2,953 (1,228) 1,725 (2,010)
Basic earnings per share 7 14.9p (4.0p) 10.9p 11.8p (4.9p) 6.9p (8.0p)
Diluted earnings per share 7 14.8p (4.0p) 10.8p 11.7p (4.8p) 6.9p (8.0p)
Group Statement of Comprehensive Income
Group Statement of Comprehensive Income Half Year to Half Year to Full Year to
31 Mar 2023
31 Mar 2022
30 Sep 2022
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Profit / (loss) for the period 2,727 1,725 (2,010)
Other comprehensive (expense) / income
Gains / (losses) on cash flow hedges 1,279 (33) (1,137)
Currency translation differences (6,152) 1,104 9,774
Other comprehensive (expense) / income for the period (4,873) 1,071 8,637
Total comprehensive (expense) / income for the period (2,146) 2,796 6,627
Group Balance Sheet
Unaudited interim results for the 6 months ended 31 March 2023
Group Balance Sheet 31 Mar 2023 31 Mar 2022 30 Sep 2022
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 40,608 38,446 42,447
Right of use assets 5,283 4,908 5,063
Intangible assets 44,248 51,098 47,939
Deferred tax assets 1,640 1,861 1,969
91,779 96,313 97,418
Current assets
Inventories 39,961 31,816 37,073
Trade and other receivables 31,128 24,466 35,598
Cash and cash equivalents 6,141 8,951 5,999
77,230 65,233 78,670
Current liabilities
Trade and other payables (19,513) (15,618) (22,765)
Borrowings (43) (66) (64)
Lease liabilities (1,247) (1,485) (1,732)
Tax liabilities (1,102) (1,229) (578)
(21,905) (18,398) (25,139)
Net current assets 55,325 46,835 53,531
Non-current liabilities
Borrowings (18,970) (14,813) (18,730)
Lease liabilities (5,089) (4,575) (4,539)
Provision for other liabilities and charges (804) (1,444) (848)
Deferred tax liabilities (7,632) (7,132) (8,291)
(32,495) (27,964) (32,408)
Net assets 114,609 115,184 118,541
Shareholders' equity
Called up share capital 5,008 5,008 5,008
Share premium account 16,000 16,000 16,000
Merger reserve 7,262 7,262 7,262
Cumulative translation reserve 9,676 7,158 15,828
Hedging reserve 7 (168) (1,272)
Retained earnings 76,656 79,924 75,715
Equity Shareholders' Funds 114,609 115,184 118,541
Statement of Changes in Equity
Unaudited interim results for the 6 months ended 31 March 2023
Statement of Changes in Equity Share capital account Share premium account Merger reserve Retained earnings Hedging reserve Cumulative translation reserve Total equity
£000 £000 £000 £000 £000 £000 £000
At 1 October 2021 5,008 16,000 7,262 80,087 (135) 6,054 114,276
Profit for the period - - - 1,725 - - 1,725
Other comprehensive expense for the period - - - - (33) 1,104 1,071
Total comprehensive income / (expense) for the period - - - 1,725 (33) 1,104 2,976
Dividends - - - (1,928) - - (1,928)
Share based payments - - - 40 - - 40
At 31 March 2022 (unaudited) 5,008 16,000 7,262 79,924 (168) 7,158 115,184
At 1 October 2022 5,008 16,000 7,262 75,715 (1,272) 15,828 118,541
Profit for the period - - - 2,727 - - 2,727
Other comprehensive income / (expense) for the period - - - - 1,279 (6,152) (4,873)
Total comprehensive income / (expense) for the period - - - 2,727 1,279 (6,152) (2,146)
Dividends - - - (1,978) - - (1,978)
Share based payments - - - 192 - - 192
At 31 March 2023 (unaudited) 5,008 16,000 7,262 76,656 7 9,676 114,609
Group Cash Flow Statement
Unaudited interim results for the 6 months ended 31 March 2023
Group Cash Flow Statement Half Year to 31 Mar 2023 (Unaudited) Half Year to 31 Mar 2022 (Unaudited) Full Year to 30 Sep 2022 (Audited)
£'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations 5,996 3,216 6,084
Income tax refunded 78 823 456
Net cash generated from operating activities 6,074 4,039 6,540
Cash flows from investing activities
Purchase of property, plant and equipment (3,439) (3,004) (6,669)
Sale of property, plant and equipment - 3 -
Purchase of intangible assets (728) (966) (1,899)
Interest received 4 2 -
Interest paid (775) (295) (717)
Net cash used in investing activities (4,938) (4,260) (9,285)
Cash flows from financing activities
Drawdown of borrowings 2,748 4,258 6,300
Repayment of borrowings (687) (758) (1,312)
Repayment of lease liabilities (796) (796) (1,584)
Dividends paid to ordinary shareholders (1,978) (1,928) (3,105)
Net cash (used in) / generated by financing activities (713) 776 299
Net increase / (decrease) in cash 423 555 (2,446)
Cash at beginning of the period 5,999 8,352 8,352
Exchange (losses) / gains on cash (281) 44 93
Cash at the end of the period 6,141 8,951 5,999
Notes to the Group Cash Flow Statement
Notes to the Group Cash Flow Statement Half Year to 31 Mar 2023 (Unaudited) Half Year to 31 Mar 2022 (Unaudited) Full Year to 30 Sep 2022 (Audited)
£'000 £'000 £'000
Profit / (loss) before income tax 3,262 1,221 (2,274)
Adjustments for:
- Amortisation of acquired intangible assets 833 927 1,903
- Amortisation of other intangible assets 753 593 1,438
- Impairment of intangible assets - - 6,726
- Loss on disposal of property, plant and equipment - 12 71
- Write back of lease creditor on early termination of lease - - (96)
- Depreciation 3,814 3,396 7,102
- Share based payments 192 40 743
- Amounts claimed under the RDEC (100) (113) (200)
- Finance income (4) (2) -
- Finance costs 716 355 717
Total adjustments 6,204 5,208 18,404
Changes in working capital
- Inventories (4,957) (3,294) (5,557)
- Trade and other receivables 3,344 4,427 (5,707)
- Trade and other payables (1,857) (4,346) 1,218
Total changes in working capital (3,470) (3,213) (10,046)
Cash generated from operating activities 5,996 3,216 6,084
Reconciliation of net cash flow to movements in net debt
Half Year to Half Year to Full Year to 30 Sep 2022
31 Mar 2023
31 Mar 2022
(Audited)
(Unaudited)
(Unaudited)
£'000 £'000 £'000
Increase / (decrease) in cash in the period 423 555 (2,446)
Drawdown of borrowings (2,748) (4,258) (6,300)
Repayment of borrowings 1,623 1,678 3,144
Changes in net debt resulting from cash flows (702) (2,025) (5,602)
New leases (13) (12) (25)
Non cash movements (1,652) (261) (4,031)
Translation differences 2,225 (447) (165)
Movement in net debt in the period / year (142) (2,745) (9,823)
Net debt at start of period (19,066) (9,243) (9,243)
Net debt at end of period (19,208) (11,988) (19,066)
Analysis of net debt
At 1 Oct 2022 New leases Cash flow Exchange movement Non-cash movement At 31 Mar
2023
£'000 £'000 £'000 £'000 £'000 £'000
Cash at bank and in hand 5,999 - 423 (281) - 6,141
Debt due within one year (64) - 32 - (11) (43)
Debt due after one year (18,730) - (2,093) 1,891 (38) (18,970)
Lease liabilities (6,271) (13) 936 615 (1,603) (6,336)
Net debt (19,066) (13) (702) 2,225 (1,652) (19,208)
Notes to the Interim Report
1. Basis of Preparation
The unaudited Interim Report has been prepared under the historical cost
convention and in accordance with International Financial Reporting Standards
("IFRS"), as adopted by the European Union.
Cash flow projections show that the Group has sufficient funding available to
withstand plausible downside scenarios, and therefore the financial statements
have been prepared on a going concern basis.
The Interim Report was approved by the Board of Directors on 5 June 2023. The
Interim Report does not constitute statutory financial statements within the
meaning of the Companies Act 2006 and has not been audited.
Comparative figures in the Interim Report for the year ended 30 September 2022
have been taken from the Group's audited statutory financial statements on
which the Group's auditors, PricewaterhouseCoopers LLP, expressed an
unqualified opinion. The comparative figures to 31 March 2022 are unaudited.
The Interim Report will be announced to all shareholders on the London Stock
Exchange and published on the Group's website on 6 June 2023. Copies will be
available to members of the public upon application to the Company Secretary
at Dowlish Ford, Ilminster, Somerset, TA19 0PF.
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 30 September 2022, as described in
those financial statements.
2. Estimates
The preparation of interim financial statements requires management to make
estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgments made by management in applying the Company's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the consolidated financial statements for the year ended 30
September 2022.
3. Financial risk management
The Company's activities expose it to a variety of financial risks, market
risk (including currency risk, cash flow interest rate risk and price risk),
credit risk and liquidity risk.
The interim condensed consolidated financial statements do not include all
financial risk management information and disclosures required in the annual
financial statements and should be read in conjunction with the Company's
annual financial statements as at 30 September 2022. There have been no
changes to the risk management policies since the year end.
4. Segmental analysis
Aerospace & Defence Life Sciences / Biophotonics Industrial Corporate Total
For half year to 31 March 2023 £'000 £'000 £'000 £'000 £'000
Revenue
Total revenue 18,293 16,938 39,732 - 74,963
Inter and intra-division (758) (1,113) (1,804) - (3,675)
External revenue 17,535 15,825 37,928 - 71,288
Divisional expenses (18,294) (13,034) (31,052) 466 (61,914)
EBITDA¹ (759) 2,791 6,876 466 9,374
EBITDA % (4.3)% 17.6% 18.1% - 13.1%
Depreciation and amortisation (1,227) (597) (1,808) (935) (4,567)
Operating (loss) / profit before amortisation of acquired intangible assets (1,986) 2,194 5,068 (469) 4,807
Amortisation of acquired intangible assets - - - (833) (833)
Operating (loss) / profit (1,986) 2,194 5,068 (1,302) 3,974
Operating (loss) / profit margin % (11.3%) 13.9% 13.4% - 5.6%
Add back non-recurring items 99 72 267 833 1,271
Operating (loss) / profit excluding non-recurring items (1,887) 2,266 5,335 (469) 5,245
Adjusted operating (loss) / profit (10.8)% 14.3% 14.1% - 7.4%
margin %
Aerospace & Defence Life Sciences / Biophotonics Industrial Corporate Total
For half year to 31 March 2022 £'000 £'000 £'000 £'000 £'000
Revenue
Total revenue 14,554 14,964 30,206 - 59,724
Inter and intra-division (1,427) (1,700) (2,463) - (5,590)
External revenue 13,127 13,264 27,743 - 54,134
Divisional expenses (14,603) (10,569) (22,937) 465 (47,644)
EBITDA¹ (1,476) 2,695 4,806 465 6,490
EBITDA % (11.2)% 20.3% 17.3% - 12.0%
Depreciation and amortisation (1,234) (784) (1,457) (514) (3,989)
Operating (loss) / profit before amortisation of acquired intangible assets (2,710) 1,911 3,349 (49) 2,501
Amortisation of acquired intangible assets - - - (927) (927)
Operating (loss) / profit (2,710) 1,911 3,349 (976) 1,574
Operating (loss) / profit margin % (20.6)% 14.4% 12.1% - 2.9%
Add back non-recurring items 469 188 788 927 2,372
Operating (loss) / profit excluding non-recurring items (2,241) 2,099 4,137 (49) 3,946
Adjusted operating (loss)/profit (17.1)% 15.8% 14.9% - 7.3%
margin %
¹EBITDA = Earnings before interest, tax, depreciation and amortisation.
All of the amounts recorded are in respect of continuing operations.
4. Segmental analysis continued
Analysis of revenue by destination
Half year to Half year to
31 Mar 2023 31 Mar 2022
(Unaudited) (Unaudited)
£'000 £'000
United Kingdom 12,056 13,267
North and South America 26,383 19,224
Continental Europe 16,927 11,910
Asia-Pacific 15,922 9,733
71,288 54,134
5. Non-recurring items
Half Year to Half Year to Full Year to
31 Mar 2023
31 Mar 2022
30 Sep 2022
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Profit before tax 3,262 1,221 (2,274)
Amortisation of and impairment of acquired intangible assets 833 927 8,629
Restructuring and other costs 438 1,445 1,792
Adjusted profit before tax 4,533 3,593 8,147
The restructuring costs in the period ended 31 March 2023 relate to
non-recurring costs arising from our manufacturing streamlining activities.
6. Tax expense
Analysis of tax charge in the period
Half Year to Half Year to Full Year to 30 Sep 2022 (Audited)
31 Mar 2022
31 Mar 2023
(Unaudited)
(Unaudited)
£'000 £'000 £'000
Current taxation
UK Corporation tax 140 356 399
Overseas tax 404 (100) (3)
Adjustments in respect of prior year tax charge - (250) (678)
Total current tax 544 6 (282)
Deferred tax
Origination and reversal of temporary differences (9) (118) (422)
Adjustments in respect of prior years - (392) 313
Change to UK tax rate - - 127
Total deferred tax (9) (510) 18
Tax expense per income statement 535 (504) (264)
The tax charge for the six months ended 31 March 2023 is based on the
estimated effective rate of the tax for the Group for the full year to 30
September 2023. The estimated rate is applied to the profit before tax.
The adjusted effective tax rate is 17.8% (H1 2022: 17.8%).
7. Earnings per share
The calculation of earnings per 20p Ordinary Share is based on the profit for
the period using as a divisor the weighted average number of Ordinary Shares
in issue during the period. The weighted average number of shares is given
below.
Half Year to Half Year to Full Year to 30 Sep 2022
31 Mar 2023
31 Mar 2022
(Audited)
(Unaudited)
(Unaudited)
No. No. No.
Number of shares used for basic earnings per share 25,040,919 25,040,919 25,040,919
Dilutive shares 199,101 127,937 211,603
Number of shares used for dilutive earnings per share 25,240,020 25,168,856 25,252,522
A reconciliation of the earnings used in the earnings per share calculation is
set out below:
Half Year to Half Year to Full Year to
31 Mar 2023 (Unaudited)
31 Mar 2022
30 Sep 2022
(Unaudited)
(Audited)
£'000 p per £'000 p per £'000 p per
share
share
share
Basic earnings / (losses) per share 2,727 10.9p 1,725 6.9p (2,010) (8.0p)
Adjustments net of income tax expense:
Amortisation of acquired intangible assets (net of tax) 659 2.6p 710 2.8p 1,491 6.0p
Impairment of goodwill and acquired intangible assets (net of tax) - - - - 6,438 25.7p
Restructuring costs (net of tax) 342 1.4p 1,193 4.8p 944 3.8p
Other non-underlying items (net of tax) - - - - 526 2.0p
Release of deferred tax on goodwill - - (675) (2.7p) (695) (2.8p)
Restatement of UK deferred tax - - - - 127 0.5p
Total adjustments net of income tax expense 1,001 4.0p 1,228 4.9p 8,831 35.2p
Adjusted basic earnings per share 3,728 14.9p 2,953 11.8p 6,821 27.2p
Basic diluted earnings / (losses) per share 2,727 10.8p 1,725 6.9p (2,010) (8.0p)
Adjusted diluted earnings per share 3,728 14.8p 2,953 11.7p 6,821 27.0p
Adjusted earnings per share before amortisation of acquired intangible assets
and adjustments has been shown because, in the opinion of the Directors, it
more accurately reflects the trading performance of the Group.
8. Dividend
The Directors have declared an interim dividend of 4.8p per share for the half
year ended 31 March 2023 (2022: 4.7p).
Half Year to Half Year to Full Year to
31 Mar 2023
31 Mar 2022
30 Sep 2022
(Unaudited)
(Unaudited)
(Audited)
£'000 £'000 £'000
Final 2022 dividend paid in 2023: 7.9p per share (Final 2021 dividend: 7.7p 1,978 1,928 1,928
per share)
Interim dividend of: 4.7p per share - - 1,177
1,978 1,928 3,105
9. Borrowings
31 March 2023 31 March 2022 £000 30 September 2022
£000
£'000
Current:
Bank borrowings 43 66 64
Leases 1,247 1,485 1,732
1,290 1,551 1,796
Non-current:
Bank borrowings 18,970 14,813 18,730
Leases 5,089 4,575 4,539
24,059 19,388 23,269
Total borrowings 25,349 20,939 25,065
G&H's primary lending bank is NatWest Bank. The Group's facilities
comprise a $40m (£32.4m) dollar revolving credit facility and a $30m
(£24.3m) flexible acquisition facility. At 31 March 2023, the balance drawn
on the revolving credit facility was $23.8m (£19.3m) (September 2022: $21.3m
(£19.1m)) and on the flexible acquisition facility nil (September 2022: nil).
The facilities above are committed until 31 March 2027 and attract an interest
rate of between 1.6% and 2.1% above rates specified by the bank dependent upon
the Company's leverage ratio, payable on rollover dates.
The Group's banking facilities are secured on certain of its assets including
land and buildings, property plant and equipment and inventory.
Maturity profile of bank borrowings
31 March 31 March 30 September 2022
£'000
2023 2022
£000
£000
Within one year 43 66 64
Between one and five years 18,970 14,813 18,730
19,013 14,879 18,794
Maturity profile of lease liabilities
31 March 31 March 30 September 2022
£'000
2023 2022
£000
£000
Within one year 1,469 1,697 1,944
Between two and five years 3,924 3,605 3,500
After five years 1,773 1,505 1,555
7,166 6,807 6,999
10. Called up share capital
31 Mar 2023 30 Sep 2022 31 Mar 2023 30 Sep 2022
No. No. £'000 £'000
Allotted, issued and fully paid
Ordinary share of 20p each 25,040,919 25,040,919 5,008 5,008
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