REG - Goodwin PLC - Half-year Report
17/12/2024 07:00
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RNS Number : 3038Q Goodwin PLC 17 December 2024
GOODWIN PLC
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the half year ended 31st October 2024
CHAIRMAN'S STATEMENT
I am delighted to report that the "trading" pre-tax profit for the Group for
the six-month period ending 31st October 2024 was £17.1 million, representing
a 53% increase in profitability versus the same period last year.
Furthermore, the current forward order book (otherwise known as workload) has
continued to strengthen and as at the time of writing stands at £296 million
(December 2023: £266 million).
The significant growth in profitability and order book, both of which have
more than doubled over the past three years, is primarily driven by the
foundry and machine shop's success in securing and delivering high-integrity
products for the nuclear decommissioning and naval vessel markets. In
particular, the contract to supply the 29 tonne Self Shielding Boxes (SSB's)
has started to ramp up, as the foundry has reached its production target rate
of ten per month. With customer documentation reviews becoming more
efficient, the nuclear waste storage boxes are now being regularly delivered
to Sellafield.
Duvelco Ltd has reached a significant milestone with the successful production
of polyimide resin powder at its cutting-edge, purpose-built facility. This
bespoke plant, developed over thirty months, can now produce polyimide resin
on an industrial scale.
The facility has two dedicated production lines to ensure zero
cross-contamination: one for unfilled polyimide resin and the other for
graphite-enhanced resin. The graphite-containing line is scheduled to be
online by the end of January, allowing the company to also release
graphite-containing trial samples to customers shortly thereafter. This
significant step marks the beginning of a new phase for Duvelco as customers
can commence validation tests for their specific applications. To complement
customers' own validations, formal data sheets are scheduled for publication
in the second quarter of 2025.
The Board is delighted by this achievement, which significantly reduces the
risks associated with launching this new technology. We are confident that,
as major end-users complete their validation processes-for which, timelines
vary by sector-Duvelco will become a major contributor to the Group's
profitability in the years ahead. This milestone represents a key step
forward in delivering long-term value to our shareholders and we look forward
to providing further updates in the future.
The cash generation of the Group in the first six months has been strong,
resulting in the net debt as at 31st October 2024 being £38.8 million (31st
October 2023: £54.6 million) which equates to a gearing of 31% (31st October
2023: 48%). With a lower level of capital expenditure forecast, long-term
contracts successfully negotiated with multiple cash milestones as well as the
increase in profitability, the Group will benefit from a lower level of debt
as it starts to fall within the facility we arranged in 2021 to borrow money
at an interest rate of 1% until 2031.
It is the dedication and hard work of the Group's employees over the last few
years, which has put the Group in the position that it is in today. The Board
would like to extend its sincere gratitude to all of its directors, managers
and employees for their focus and determination, which has continually set the
Group apart, whether that be breaking into new markets or continually adapting
existing products and processes to obtain incremental gains. Thank you.
T.J.W. Goodwin
Chairman 16 December 2024
Financial Highlights
Unaudited Unaudited Audited
Half Year to Half Year to Year ended
31st October 31st October 30th April
2024 2023 2024
£'m £'m £'m
Consolidated Results
Revenue 106.4 97.6 191.3
Operating profit 18.2 12.5 26.9
Trading profit * 17.1 11.2 24.1
Unrealised (loss) / gain on 10 year interest rate swap derivative (0.4) 0.9 0.1
Profit before tax 16.7 12.1 24.2
Profit after tax 12.5 9.2 17.7
Capital additions
Property, plant and equipment (PPE) owned 5.3 7.0 16.4
Property, plant and equipment (PPE) right-of-use assets 0.1 0.1 0.2
Operating lease assets (former IAS 17 definition) ‒ ‒ 1.5
Intangible assets 0.5 0.4 2.0
Capital expenditure for KPI purposes 5.9 7.5 20.1
Earnings per share - basic 150.91p 115.66p 224.53p
Earnings per share - diluted 150.91p 115.66p 224.53p
* Trading profit is defined as profit before taxation excluding the movement
in fair value of the interest rate swap.
Revenue
Revenue of £106.4 million for the six months represents a 9.0% increase from
the £97.6 million achieved for the same six month period last year.
Trading profit
Trading profit for the six months of £17.1 million represents a 52.7%
increase from the £11.2 million achieved for the same six month period last
year.
Key performance indicators
Unaudited Unaudited Audited
Half Year to 31st October Half Year to 31st October Year ended 30th April
2024 2023 2024
Trading profit (£'m) 17.1 11.2 24.1
Post tax profit + depreciation + amortisation (£'m) 17.3 12.7 26.4
Gross profit % of revenue 43.0% 39.0% 40.7%
Trading profit % of revenue 16.1% 11.5% 12.6%
Gearing % 31.4% 47.8% 35.1%
Non-cash charges (£'m)
Depreciation 4.1 3.9 8.1
Amortisation and impairment 0.7 0.7 1.3
Total non-cash charges 4.8 4.6 9.4
Alternative performance measures mentioned above are defined on page 105 of
the Group Annual Accounts to 30th April 2024.
2024/25 Outlook
Whilst a similar level of activity for the Group is expected for the second
half of the year ending 30th April 2025, it is pleasing to report, after many
years, that the long-promised future growth for Easat Radar Systems is now
coming to fruition. The radar business has signed a significant contract to
supply two additional turnkey surveillance systems to an existing Airforce
customer based in Southeast Asia, which will return the company to
profitability. In addition to this, and following contract award notifications
by other customers, Easat is in the final stages of signing two further
contracts to supply its proven state-of-the-art primary and secondary
surveillance system. This will provide Easat with a workload in excess of
£25 million, enabling the company to operate at a higher level of activity,
that will further enhance the Group's profitability over the short to medium
term.
Within the Refractory Engineering Division, a stable level of profitability
will continue to be generated from its core products, where incremental gains
are being targeted within their well-established position in the market. For
the newer growth products, such as the fire extinguishing agent for lithium
ion battery fires, known as AVD, interest and momentum continue to grow for
the superior product, despite alternatives entering the market. Furthermore,
with the extinguisher-filling plant having now been commissioned and
certified, this will reduce the cost of production of the lithium ion battery
fire extinguishers and enable AVD Fire Ltd to have greater control from order
placement through to delivery.
Risks and Uncertainties
The Group, mainly through its centralised management structure, makes best
endeavours to have in place internal control procedures to identify and manage
the key risks and uncertainties affecting the Group. We would refer you to
pages 12 to 13 of the Group Annual Accounts to 30th April 2024 which describe
the principal risks and uncertainties, and to note 28, starting on page 83,
which describes in detail the key financial risks and uncertainties affecting
the business.
Judging the future relationship of the major currency pairs of the US Dollar,
Sterling and the Euro continues to be a challenge.
The Group has mitigated the impact of rising interest rates by fixing the
effective base rate at less than 1% for a notional £30 million of debt until
August 2031.
Report on Expected Developments
This report describes the expected development of the Group during the year
ended 30th April 2025. The report may contain forward-looking statements and
information based on current expectations, and assumptions and forecasts made
by the Group. These expectations and assumptions are subject to various
known and unknown risks, uncertainties and other factors, which could lead to
substantial differences between the actual future results, financial
performance and the estimates and historical results given in this report.
Many of these factors are outside the Group's control. The Group accepts no
liability to publicly revise or update these forward-looking statements or
adjust them to future events or developments, whether as a result of new
information, future events or otherwise, except to the extent legally
required.
Going concern
The Group continues to trade profitably by building on the increase in
activity seen in the second half of the previous financial year and, with the
strength of the current order book levels, this should continue and improve in
the second half of this financial year and into the next financial year. As
at 31st October 2024, the Group's net debt stood at £38.8 million (31st
October 2023 £54.6 million) as set out in note 15 of these accounts. The
net debt levels are lower than those recorded at both October 2023 and April
2024, which is in line with the Board's expectations and will continue to be
reviewed and managed across the Group. Given the above, the Directors, after
having reviewed the Group projections and possible challenges that may lie
ahead, do not see an issue with the continued ability of the Group to meet its
financial commitments as they fall due for at least twelve months from the
date of these accounts and have prepared these accounts on a going concern
basis.
Responsibility statement of the Directors in respect of the half-yearly financial report
The Directors confirm to the best of their knowledge that:
1. this condensed set of financial statements has been prepared in
accordance with International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the United Kingdom; and
2. the Interim Management Report and condensed financial statements
include a fair review of the information required by Disclosure and
Transparency Rules:
· 4.2.7R (being an indication of important events that have occurred
during the first six months of the year); and
· 4.2.8R (being related party transactions that have taken place in the
first six months of the financial year and that have materially affected the
financial position or performance of the entity during that period; and any
changes in the related party transactions described in the last Annual Report
that could do so).
T.J.W. Goodwin
Chairman 16 December 2024
Condensed Consolidated Statement of Profit or Loss
for the half year to 31st October 2024
Unaudited Unaudited Audited
Half Year to Half Year to Year ended
31st October 31st October 30th April
2024 2023 2024
£'000 £'000 £'000
Continuing operations
Revenue 106,392 97,584 191,258
Cost of sales (60,666) *(59,529) (113,371)
Gross profit 45,726 * 38,055 77,887
Selling and distribution costs (5,498) *(4,734) (9,618)
Administrative expenses (22,001) *(20,802) (41,374)
Operating profit 18,227 12,519 26,895
Finance costs (net) (1,147) (1,351) (2,870)
Share of profit of associate company 27 34 69
Profit before taxation and movement in fair value of interest rate swap 17,107 11,202 24,094
Unrealised (loss) / gain on 10 year interest rate swap derivative (394) 938 113
Profit before taxation 16,713 12,140 24,207
Tax on profit (4,215) (2,971) (6,491)
Profit after taxation 12,498 9,169 17,716
Attributable to:
Equity holders of the parent 11,333 8,729 16,902
Non-controlling interests (NCI) 1,165 440 814
Profit for the period 12,498 9,169 17,716
Basic earnings per ordinary share (note 12) 150.91p 115.66p 224.53p
Diluted earnings per ordinary share (note 12) 150.91p 115.66p 224.53p
* The Board took the decision to present the statutory reporting of gross
profit to allocate costs, which align more appropriately with the Group's
operational structure and how it is calculated with the Group's management
accounts, to ensure that the end user of the statutory accounts can review the
financial performance of the Group on the same basis as the Board. The
comparative figures for October 2023 have been updated to be consistent with
the revised presentation of costs.
Condensed Consolidated Statement of Comprehensive Income
for the half year to 31st October 2024
Unaudited Unaudited Audited
Half Year to Half Year to Year ended
31st October 31st October 30th April
2024 2023 2024
£'000 £'000 £'000
Profit for the period 12,498 9,169 17,716
Other comprehensive income / (expense)
Items that are or may be reclassified subsequently to the income statements
Foreign exchange translation differences (240) (218) (1,935)
Cash flow hedges - effective portion of changes in fair value 74 (3,243) (936)
Cash flow hedges - ineffectiveness transferred to profit or loss 806 (177) 433
Cash flow hedges - amounts transferred to profit or loss (465) (242) (438)
Cash flow hedges - deferred tax credit 66 873 85
Cost of hedging - changes in fair value (129) 1,466 558
Cost of hedging - ineffectiveness transferred to profit or loss (30) 9 28
Cost of hedging - amounts transferred to profit or loss 226 37 144
Cost of hedging - deferred tax charge (17) (378) (184)
Other comprehensive income / (expense) for the period, net of income tax 291 (1,873) (2,245)
Total comprehensive income for the period 12,789 7,296 15,471
Attributable to:
Equity holder of the parent 11,572 6,950 15,039
Non-controlling interests 1,217 346 432
12,789 7,296 15,471
Condensed Consolidated Balance Sheet
Unaudited Unaudited Audited
as at 31st as at 31st as at 30th
October 2024 October 2023 April 2024
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 106,894 99,623 105,337
Right-of-use assets 11,013 11,344 11,744
Investment in associate 863 978 828
Intangible assets 25,902 25,126 25,900
Derivative financial assets 5,597 5,644 5,716
150,269 142,715 149,525
Current assets
Inventories 44,486 48,835 46,809
Contract assets 24,050 19,808 22,027
Trade and other financial assets 45,293 36,737 27,807
Corporation tax receivable 709 418 1,288
Other receivables 4,312 5,796 3,896
Deferred tax asset 199 119 191
Derivative financial assets 2,636 1,577 2,007
Cash and cash equivalents 15,057 13,404 30,678
136,742 126,694 134,703
Total assets 287,011 269,409 284,228
Current liabilities
Borrowings 20,892 13,942 14,027
Contract liabilities ** 20,998 31,412 14,856
Trade payables and other financial liabilities 29,129 *29,495 30,572
Other payables 627 *443 258
Dividends payable 4,994 4,318 ‒
Derivative financial liabilities 1,262 2,121 251
Corporation tax payable 3,857 2,009 859
Provisions for liabilities and charges 241 229 231
82,000 83,969 61,054
Non-current liabilities
Borrowings 35,053 55,357 61,906
Contract liabilities ** 26,735 ‒ 19,268
Derivative financial liabilities 493 108 277
Provisions for liabilities and charges 275 304 274
Deferred tax liabilities 14,107 10,983 14,799
76,663 66,752 96,524
Total liabilities 158,663 150,721 157,578
Net assets 128,348 118,688 126,650
Equity attributable to equity holders of the parent
Share capital 751 751 751
Translation reserve (2,579) (957) (2,391)
Share-based payments reserve ‒ 5,244 ‒
Cash flow hedge reserve 1,009 (1,298) 633
Cost of hedging reserve (375) 155 (426)
Retained earnings 125,059 110,297 123,714
Total equity attributable to equity holders of the parent 123,865 114,192 122,281
Non-controlling interests 4,483 4,496 4,369
Total equity 128,348 118,688 126,650
* The split between financial and non-financial liabilities has been updated
to be consistent with the classification at April 2024.
** Contract liabilities include advance payments from customers of
£47,473,000 (31st October 2023: £30,462,000), with the balance of £260,000
(31st October 2023: £950,000) being costs accrued for contracts.
Condensed Consolidated Statement of Changes in Equity
for the half year to 31st October 2024
Share capital Translation reserve Share-based payments reserve Cash flow hedge reserve Cost of hedging reserve Retained earnings Total attributable to equity holders of the parent Non-controlling interests Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Half Year to 31st October 2024
(Unaudited)
Balance at 1st May 2024 751 (2,391) ‒ 633 (426) 123,714 122,281 4,369 126,650
Total comprehensive income:
Profit ‒ ‒ ‒ ‒ ‒ 11,333 11,333 1,165 12,498
Other comprehensive income:
Foreign exchange translation differences ‒ (188) ‒ ‒ ‒ ‒ (188) (52) (240)
Net movements on cash flow hedges ‒ ‒ ‒ 376 51 ‒ 427 104 531
Total comprehensive income / (expense) for the period ‒ (188) ‒ 376 51 11,333 11,572 1,217 12,789
Transactions with owners:
Dividends paid ‒ ‒ ‒ ‒ ‒ (4,994) (4,994) (1,103) (6,097)
Dividends declared ‒ ‒ ‒ ‒ ‒ (4,994) (4,994) ‒ (4,994)
Balance at 31st October 2024 751 (2,579) ‒ 1,009 (375) 125,059 123,865 4,483 128,348
Share capital Translation reserve Share-based payments reserve Cash flow hedge reserve Cost of hedging reserve Retained earnings Total attributable to equity holders of the parent Non-controlling interests Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Half Year to 31st October 2023
(Unaudited)
Balance at 1st May 2023 769 (849) 5,244 1,504 (976) 119,055 124,747 4,410 129,157
Total comprehensive income:
Profit ‒ ‒ ‒ ‒ ‒ 8,729 8,729 440 9,169
Other comprehensive income:
Foreign exchange translation differences ‒ (108) ‒ ‒ ‒ ‒ (108) (110) (218)
Net movements on cash flow hedges ‒ ‒ ‒ (2,802) 1,131 ‒ (1,671) 16 (1,655)
Total comprehensive income / (expense) for the period ‒ (108) ‒ (2,802) 1,131 8,729 6,950 346 7,296
Transactions with owners:
Buy back of shares (18) ‒ ‒ ‒ ‒ (8,851) (8,869) ‒ (8,869)
Dividends paid ‒ ‒ ‒ ‒ ‒ (4,318) (4,318) (260) (4,578)
Dividends declared ‒ ‒ ‒ ‒ ‒ (4,318) (4,318) ‒ (4,318)
Balance at 31st October 2023 751 (957) 5,244 (1,298) 155 110,297 114,192 4,496 118,688
Share capital Translation reserve Share-based payments reserve Cash flow hedge reserve Cost of hedging reserve Retained earnings Total attributable to equity holders of the parent Non-controlling interests Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Year ended 30th April 2024
(Audited)
Balance at 1st May 2023 769 (849) 5,244 1,504 (976) 119,055 124,747 4,410 129,157
Total comprehensive income:
Profit ‒ ‒ ‒ ‒ ‒ 16,902 16,902 814 17,716
Other comprehensive income:
Foreign exchange translation differences ‒ (1,542) ‒ ‒ ‒ ‒ (1,542) (393) (1,935)
Net movements on cash flow hedges ‒ ‒ ‒ (871) 550 ‒ (321) 11 (310)
Total comprehensive income / (expense) for the period ‒ (1,542) ‒ (871) 550 16,902 15,039 432 15,471
Transfers between reserves ‒ ‒ (5,244) ‒ ‒ 5,244 ‒ ‒ ‒
Transactions with owners:
Buy back of shares (18) ‒ ‒ ‒ ‒ (8,851) (8,869) ‒ (8,869)
Dividends paid ‒ ‒ ‒ ‒ ‒ (8,636) (8,636) (473) (9,109)
Balance at 30th April 2024 751 (2,391) ‒ 633 (426) 123,714 122,281 4,369 126,650
Condensed Consolidated Statement of Cash Flows
for the half year ended 31st October 2024
Unaudited Unaudited Audited
Half Year to Half Year to Year ended
31st October 31st October 30th April
2024 2023 2024
£'000 £'000 £'000
Cash flow from operating activities
Profit from continuing operations after tax 12,498 9,169 17,716
Adjustments for:
Depreciation of property, plant and equipment 3,340 3,153 6,607
Depreciation of right-of-use assets 761 717 1,497
Amortisation and impairment of intangible assets 708 654 1,341
Finance costs (net) 1,147 1,351 2,870
Foreign exchange losses / (gains) 955 267 (1,025)
Profit on sale of property, plant and equipment (15) (27) (29)
Unrealised loss / (gain) on 10 year interest rate swap derivative 394 (938) (113)
Share of profit of associate companies (27) (34) (69)
UK tax incentive credit on research and development ‒ ‒ (660)
Tax expense 4,215 2,971 6,491
Cash generated from operating activities before changes in working capital and 23,976 17,283 34,626
provisions
Decrease / (increase) in inventories 2,075 (980) 437
(Increase) in contract assets (2,060) (3,572) (5,849)
(Increase) / decrease in trade and other receivables (17,983) (8,213) 2,357
Increase / (decrease) in contract liabilities 13,636 (1,325) 1,388
(Decrease) / increase in trade and other payables (1,384) (1,364) 370
Cash inflow from operations 18,260 1,829 33,329
Interest received 563 * 612 1,399
Interest paid (2,104) * (2,241) (5,022)
Corporation tax paid (1,307) (885) (2,587)
Net cash from operating activities 15,412 (685) 27,119
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 38 196 392
Acquisition of property, plant and equipment (4,388) (2,385) (15,363)
Acquisition of intangible assets (8) (91) (582)
Development expenditure capitalised (510) (307) (1,456)
Dividend from associate company 63 ‒ 131
Net cash outflow from investing activities (4,805) (2,587) (16,878)
Cash flows from financing activities
Buy back of shares ‒ (8,869) (8,869)
Payment of capital element of lease obligations (1,476) (1,325) (2,910)
Dividends paid (4,994) (4,318) (8,636)
Dividends paid to non-controlling interests (1,103) (260) (473)
Proceeds from new loans and committed facilities 8,000 12,500 23,098
Repayment of loans and committed facilities (26,549) (613) (1,152)
Change in bank overdrafts (48) (119) (71)
Net cash (outflow) / inflow from financing activities (26,170) (3,004) 987
Net (decrease) / increase in cash and cash equivalents (15,563) (6,276) 11,228
Cash and cash equivalents at beginning of year 30,678 19,661 19,661
Effect of exchange rate fluctuations on cash held (58) 19 (211)
Closing cash and cash equivalents 15,057 13,404 30,678
* The comparatives have been adjusted to report separately the interest
received from the interest rate swap.
Notes
1. Reporting Entity
Goodwin PLC (the "Company") is a Company incorporated in England and Wales.
The unaudited condensed consolidated interim financial statements of the
Company as at and for the six months ended 31st October 2024 comprise the
Company, its subsidiaries, and the Group's interests in associates (together
referred to as the "Group").
The audited consolidated financial statements of the Group as at and for the
year ended 30th April 2024 are available upon request from the Company's
registered office at Ivy House Foundry, Hanley, Stoke-on-Trent, ST1 3NR or via
the Company's web site: www.goodwin.co.uk.
2. Statement of compliance
These unaudited condensed consolidated interim financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting, as adopted in
the United Kingdom. They do not include all of the information required for
full annual financial statements, and should be read in conjunction with the
audited consolidated financial statements of the Group as at and for the year
ended 30th April 2024.
The comparative figures for the financial year ended 30th April 2024 are
extracts and not the full Group's statutory accounts for that financial year.
Those accounts have been reported on by the Company's auditors and delivered
to the Registrar of Companies. The report of the auditors was (i) unqualified,
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report, and (iii) did
not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The Audit Committee has reviewed these unaudited condensed consolidated
interim financial statements and has advised the Board of Directors that,
taken as a whole, they are fair, balanced and understandable and provide the
information necessary for shareholders to assess the Group's half year
performance. These unaudited condensed consolidated interim financial
statements were approved by the Board of Directors on 16 December 2024.
3. Significant Accounting Policies
The accounting policies applied by the Group in these unaudited condensed
consolidated financial statements are the same as those applied by the Group
in its audited consolidated financial statements as at and for the year ended
30th April 2024, except where accounting standards have been amended and the
Group has adopted these amendments during the current period.
The following amendments, which have become effective for the current
reporting period, and therefore have been adopted by the Group, are not
expected to have a significant impact on the Group's financial statements.
· Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current - (effective for
periods commencing on or after 1st January 2024).
· Amendments to IAS 1 Presentation of Financial Statements:
Non-current liabilities with covenants - (effective for periods commencing on
or after 1st January 2024).
New IFRS standards, amendments and interpretations not adopted
The IASB and IFRIC have issued additional standards and amendments which are
effective for periods starting after the date of these financial statements.
The following amendments have not yet been adopted by the Group:
· Amendments to IFRS 9 and IFRS 7 - Amendments to the
Classification and Measurement of Financial Instruments (effective for periods
beginning on or after 1st January 2025).
· Annual Improvements to IFRS Accounting Standards - volume 11
(effective for periods beginning on or after 1st January 2026).
· IFRS 18 Presentation and Disclosure in Financial Statements
(effective for periods commencing on or after 1st January 2027).
The Group does not expect the above amendments to have a material impact on
profit, earnings per share and net assets in future periods.
4. Accounting Estimates and Judgements
The preparation of interim financial statements requires management to make
judgements, 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 unaudited consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the audited consolidated financial statements as at and for
the year ended 30th April 2024.
The tax charge in the period is based on management's estimate of the weighted
average annual income tax rate expected for the full financial year applied to
the pre-tax income of the interim period, and the impact of any disallowed
costs.
5. Operating Segments
For reporting to the chief operating decision maker, the Board of Directors,
the Group is organised into two reportable operating segments, according to
the different products and services provided by the Mechanical Engineering and
Refractory Engineering Divisions. Segment assets and liabilities include
items directly attributable to segments as well as group centre balances,
which can be allocated on a reasonable basis. The Group's associate company
is included in Refractory Engineering. In accordance with the requirements
of IFRS 8, information regarding the Group's operating segments is reported
below.
There are no other reportable segments apart from those identified.
6. Operating segment revenue and profit
Unaudited Unaudited Audited
Half Year to 31st October 2024 Half Year to 31st October 2023 Year ended 30th April 2024
Mechanical Refractory Total Mechanical Refractory Total Mechanical Refractory Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue
Total revenue 91,621 38,380 130,001 80,549 38,657 119,206 156,944 75,859 232,803
Inter-segment revenue (17,325) (6,284) (23,609) (14,723) (6,899) (21,622) (28,912) (12,633) (41,545)
External revenue 74,296 32,096 106,392 65,826 31,758 97,584 128,032 63,226 191,258
Profit
Segment operating profit 13,826 6,706 20,532 7,719 7,146 14,865 18,861 13,423 32,284
Share of profit of associate company ‒ 27 27 ‒ 34 34 ‒ 69 69
Segment profit before taxation 13,826 6,733 20,559 7,719 7,180 14,899 18,861 13,492 32,353
Group centre costs (2,305) (2,346) (5,389)
Finance costs (net) (1,147) (1,351) (2,870)
Profit before taxation and movement in fair value of interest rate swap 17,107 11,202 24,094
Percentage of segment profit before taxation 67% 33% 100% 52% 48% 100% 58% 42% 100%
7. Operating segment assets and liabilities
Unaudited Unaudited
Half Year to 31st October 2024 Half Year to 31 October 2023
Mechanical Refractory Group Centre Total Mechanical Refractory Group Centre Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Net assets
Total assets 200,306 69,858 16,846 287,010 187,155 61,843 20,411 269,409
Total liabilities (123,194) (34,898) (571) (158,663) (121,959) (23,149) (5,613) (150,721)
Total 77,112 34,960 16,275 128,347 65,196 38,694 14,798 118,688
Audited
Year ended 30 April 2024
Mechanical Refractory Group Centre Total
£'000 £'000 £'000 £'000
Net assets
Total assets 192,608 74,282 17,338 284,228
Total liabilities (118,132) (38,935) (511) (157,578)
Total 74,476 35,347 16,827 126,650
8. Operating segment capital expenditure, depreciation and
amortisation
Unaudited Unaudited
Half Year to 31st October 2024 Half Year to 31st October 2023
Mechanical Refractory Group centre Total Mechanical Refractory Group centre Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Capital expenditure on:
Property, plant and equipment 4,137 1,108 78 5,323 5,420 1,019 494 6,933
Right-of-use assets ‒ 6 55 61 ‒ 34 34 68
Intangible assets 486 41 ‒ 527 381 17 ‒ 398
Total capital expenditure 4,623 1,155 133 5,911 5,801 1,070 528 7,399
Depreciation - property, plant and equipment 2,266 685 389 3,340 2,182 702 269 3,153
Depreciation - right-of-use assets 298 239 224 761 263 156 298 717
Amortisation - intangible assets 228 430 50 708 225 408 21 654
Total 2,792 1,354 663 4,809 2,670 1,266 588 4,524
Audited
Year ended 30th April 2024
Mechanical Refractory Group centre Total
£'000 £'000 £'000 £'000
Capital expenditure on
Property, plant and equipment 10,102 5,583 736 16,421
Right-of-use assets 934 634 180 1,748
Intangible assets 1,209 456 372 2,037
Total capital expenditure 12,245 6,673 1,288 20,206
Depreciation - property, plant and equipment 4,400 1,455 752 6,607
Depreciation - right-of-use assets 578 490 429 1,497
Amortisation - intangible assets 446 810 85 1,341
Total 5,424 2,755 1,266 9,445
9. Geographical segments
Unaudited Unaudited
Half Year to 31st October 2024 Half Year to 31st October 2023
Revenue Net assets Non-current assets Capital expenditure Revenue Net assets Non-current assets Capital expenditure
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
UK 31,011 81,203 118,595 4,846 34,171 73,302 115,763 5,130
Rest of Europe 10,741 7,321 5,138 310 10,526 6,530 4,258 330
USA 16,437 ‒ ‒ ‒ 9,458 ‒ ‒ ‒
Pacific Basin 22,831 16,563 6,908 161 21,865 16,378 6,656 199
Rest of World 25,372 23,261 14,031 594 21,564 22,478 10,394 1,740
Total 106,392 128,348 144,672 5,911 97,584 118,688 137,071 7,399
Audited
Year ended 30th April 2024
Revenue Net assets Non-current assets Capital expenditure
£'000 £'000 £'000 £'000
UK 61,595 78,978 117,376 14,887
Rest of Europe 21,552 6,884 5,132 1,532
USA 21,480 ‒ ‒ ‒
Pacific Basin 42,903 17,374 7,009 692
Rest of World 43,728 23,414 14,292 3,095
Total 191,258 126,650 143,809 20,206
10. Revenue
The Group's revenue is derived from contracts with customers. The following
tables provide an analysis of revenue by
geographical market and by product line.
Unaudited Unaudited Audited
Half Year to 31st October 2024 Half Year to 31st October 2023 Year ended 30th April 2024
Mechanical Refractory Total Mechanical Refractory Total Mechanical Refractory Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Primary geographical markets
UK 23,304 7,707 31,011 25,594 8,577 34,171 45,870 15,725 61,595
Rest of Europe 6,470 4,271 10,741 6,478 4,048 10,526 13,460 8,092 21,552
USA 16,143 294 16,437 9,069 389 9,458 20,571 909 21,480
Pacific Basin 10,719 12,112 22,831 10,082 11,783 21,865 19,503 23,400 42,903
Rest of World 17,660 7,712 25,372 14,603 6,961 21,564 28,628 15,100 43,728
Total 74,296 32,096 106,392 65,826 31,758 97,584 128,032 63,226 191,258
Product lines
Standard products and consumables 6,347 32,096 38,443 7,043 31,758 38,801 13,833 63,226 77,059
Bespoke engineered products - point in time 10,408 ‒ 10,408 8,377 ‒ 8,377 17,380 ‒ 17,380
Total point in time revenue 16,755 32,096 48,851 15,420 31,758 47,178 31,213 63,226 94,439
Minimum period contracts for goods and services 2,520 ‒ 2,520 2,840 ‒ 2,840 5,767 ‒ 5,767
Bespoke engineered products - over time 55,021 ‒ 55,021 47,566 ‒ 47,566 91,052 ‒ 91,052
Total over time revenue 57,541 ‒ 57,541 50,406 ‒ 50,406 96,819 ‒ 96,819
Total revenue 74,296 32,096 106,392 65,826 31,758 97,584 128,032 63,226 191,258
11. Dividends
The Directors do not propose the payment of an interim dividend.
Unaudited Unaudited Audited
Half Year to Half Year to Year ended
31st October 31st October 30th April
2024 2023 2024
£'000 £'000 £'000
Equity dividends paid during the period:
Ordinary dividends paid in respect of the year ended 30th April 2024 4,994 ‒ ‒
Ordinary dividends paid in respect of the year ended 30th April 2023 ‒ 4,318 8,636
Total 4,994 4,318 8,636
As noted in the Group Annual Accounts to 30th April 2024, the dividend
payments for the year ended 30th April 2024 are being
made in two equal instalments. The second payment will be made on 11th April,
2025 to shareholders on the register on 21st
March 2025.
12. Earnings per Share
Unaudited Unaudited Audited
as at as at as at
31st October 31st October 30th April
2024 2023 2024
Number of ordinary shares
Ordinary shares in issue
Opening balance 7,509,600 7,689,600 7,689,600
Shares bought back in the period ‒ (180,000) (180,000)
Closing balance 7,509,600 7,509,600 7,509,600
Weighted average number of ordinary shares in issue 7,509,600 7,546,774 7,527,797
£'000 £'000 £'000
Relevant profits attributable to shareholders 11,333 8,729 16,902
The Company bought back 180,000 of its ordinary shares on 7th June 2023 and
cancelled them off the register, following a
tender offer to its shareholders.
13. Property, plant and equipment and intangible assets
Unaudited Unaudited
Half Year to 31st October 2024 Half Year to 31st October 2023
Property, plant and equipment Right-of-use assets Intangible assets Property, plant and equipment Right-of-use assets Intangible assets
£'000 £'000 £'000 £'000 £'000 £'000
Net book value at the beginning of the period 105,337 11,744 25,900 101,243 6,763 25,448
Additions 5,323 61 527 6,933 68 398
Disposals (at net book value) (13) (10) ‒ (169) ‒ ‒
Transfers ‒ ‒ ‒ (5,242) 5,242 ‒
Depreciation (3,340) (761) ‒ (3,153) (717) ‒
Amortisation ‒ ‒ (708) ‒ ‒ (654)
Exchange adjustment (413) (21) 183 11 (12) (66)
Net book value at the end of the period 106,894 11,013 25,902 99,623 11,344 25,126
14. Borrowings
Unaudited Unaudited Audited
as at as at as at
31st October 31st October 30th April
2024 2023 2024
£'000 £'000 £'000
Due within one year
Bank overdrafts ‒ ‒ 48
Bank loans - repayable by instalments 1,116 1,072 1,106
Bank loans - rolling credit facilities 17,000 10,000 10,000
Lease liabilities 2,776 2,870 2,873
20,892 13,942 14,027
Due after more than one year
Bank loans - repayable by instalments 5,396 6,443 5,966
Bank loans - rolling credit facilities 24,000 42,000 49,000
Lease liabilities 5,657 6,914 6,940
35,053 55,357 61,906
Total borrowings
Bank overdrafts ‒ ‒ 48
Bank loans - repayable by instalments 6,512 7,515 7,072
Bank loans - rolling credit facilities 41,000 52,000 59,000
Lease liabilities 8,433 9,784 9,813
55,945 69,299 75,933
15. Capital management
As at 31st October 2024 the capital employed was £162,705,000, as shown
below:
Unaudited Unaudited Audited
As at As at As at
31st October 31st October 30th April
2024 2023 2024
Note £'000 £'000 £'000
Cash and cash equivalents (15,057) (13,404) (30,678)
Bank overdrafts 14 ‒ ‒ 48
Bank loans and committed facilities 14 47,512 59,515 66,072
Lease liabilities 14 8,433 9,784 9,813
Net debt in accordance with IFRS 16 40,888 55,895 45,255
Operating lease debt (former IAS 17 definition) 14 (2,048) (1,274) (2,324)
Relevant net debt for KPI purposes 38,840 54,621 42,931
Total equity attributable to equity holders of the parent 123,865 114,192 122,281
Capital employed 162,705 168,813 165,212
16. Total financial assets and financial liabilities
The following table sets out the Group's accounting classification of its
financial assets and financial liabilities, and their
carrying amounts at 31st October 2024. The carrying amount is a reasonable
approximation of fair value for all
financial assets and financial liabilities.
Fair value hedging instruments Fair value through profit and loss Amortised cost Total carrying amount / fair value amount
£'000 £'000 £'000 £'000
Financial assets measured at fair value
Forward exchange contracts used for hedging 2,583 ‒ ‒ 2,583
Interest rate swap ‒ 5,650 ‒ 5,650
2,583 5,650 ‒ 8,233
Financial assets not measured at fair value
Cash and cash equivalents ‒ ‒ 15,057 15,057
Contract assets ‒ ‒ 24,050 24,050
Trade receivables and other financial assets ‒ ‒ 45,293 45,293
Corporation tax receivable ‒ ‒ 709 709
‒ ‒ 85,109 85,109
Financial liabilities measured at fair value
Forward exchange contracts used for hedging 1,755 ‒ ‒ 1,755
1,755 ‒ ‒ 1,755
Financial liabilities not measured at fair value
Bank loans ‒ ‒ 47,512 47,512
Lease liabilities ‒ ‒ 8,433 8,433
Contract liabilities ‒ ‒ 47,733 47,733
Trade payables and other financial liabilities ‒ ‒ 29,129 29,129
Dividends payable ‒ ‒ 4,994 4,994
Corporation tax payable ‒ ‒ 3,857 3,857
‒ ‒ 141,658 141,658
The interest rate swap and forward exchange contract assets and liabilities
fair values in the above table are derived using Level 2
inputs as defined by IFRS 7 as detailed in the paragraph below.
IFRS 7 requires that the classification of financial instruments at fair value
be determined by reference to the source of inputs
used to derive the fair value. This classification uses the following three
level hierarchy: Level 1 - quoted prices (unadjusted) in
active markets for identical assets or liabilities; Level 2 - inputs other
than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices); Level 3 - inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
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