RNS Number : 7754I
Goodwin PLC
16 December 2020
GOODWIN PLC
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
for the half year ended 31st October 2020
CHAIRMAN'S STATEMENT
The pre-tax profit for the Group for the six month period ending 31st October 2020 was £5.8 million (2019 £7.4 million) a 22% decrease on revenue of £62.6 million. The Group cash flow and banking headroom are in line with the Board's expectations, and the order book remains robust at £174 million as at 31st October 2020 but caution is needed with the Covid-19 uncertainty delaying some capital projects and the downturn in the oil and gas industry, which is now likely to be a permanent feature and so a smaller percentage of our targeted business going forwards.
Within the Refractory Engineering Division, the current activity levels are climbing to similar levels to those seen prior to the onset of Covid-19. However, we remain uncertain where we will stand after the effects of the second and possible third lock down. The Castaldo silicone rubber technology and plant that we purchased during the previous financial year has been successfully relocated from the USA to our company in Thailand, Siam Casting Powders. This plant is now installed, commissioned and producing.
Without neglecting the huge recognition due to the dedicated hard work of all Group employees, through careful management of overhead and expenditure combined with the quality of our customer base and the order book that has been built with them, the Group has suffered less than many throughout the pandemic, for which we are grateful. With the high levels of uncertainty that Covid-19 continues to subject the world to, coupled with the side effects of Brexit in the UK, there have been exceedingly challenging trading conditions, which should correct themselves with the markets we address, once normality can resume.
T. J. W. Goodwin
Chairman
16th December 2020
Management report
Financial Highlights
Unaudited Half Year to 31st October 2019
Unaudited Half Year to
Audited Year Ended
31st October
31st October
30th April
2020
2019
2020
£'m
£'m
£'m
Consolidated Results
Revenue
62.6
70.1
144.5
Operating profit
6.1
7.8
12.9
Profit before tax
5.8
7.4
12.1
Profit after tax
4.5
5.6
8.3
Capital Expenditure (owned and finance lease assets)
8.3
3.0
6.1
Earnings per share - basic
56.64p
72.92p
107.93p
Earnings per share - diluted
55.42p
69.77p
103.31p
Turnover
Sales revenue of £62,628,000 for the half year represents a 11% decrease from the £70,090,000 achieved during the same period last year.
Profit Before Tax
Profit before tax for the six months of £5,774,000 is a 22% decrease from the £7,406,000 achieved for the same six month period last year.
Key performance indicators
The key performance indicators for the business are listed below:
Unaudited Half Year to
Unaudited Half Year to
Audited Year Ended
31st October
31st October
30th April
2020
2019
2020
Gross profit as a % of turnover
25.9
27.8
24.1
Other income (in £ millions)
-
0.7
0.7
Profit before tax (in £ millions)
5.8
7.4
12.1
Gearing % (excluding deferred consideration)
29.8
25.7
17.9
Non cash charges (in £millions)
Depreciation (in £ millions)
2.7
3.2
5.9
Depreciation of finance leased assets (in £ millions)
0.2
0.1
0.3
Amortisation (in £ millions)
0.7
0.5
1.3
Total non cash charges (in £ millions)
3.6
3.8
7.5
Alternative performance measures mentioned above are defined in note 36 on page 86 of the Group Annual accounts to 30th April 2020.
2020/21 Outlook
With the upcoming completion of several radar systems in East Asia, the commencement of manufacturing works across our nuclear contracts and, hopefully, an improving Refractory Engineering Division performance, we expect the second half year pre-tax profits to be similar, if not improving on, the first half of this financial year.
Despite conditions remaining tough for our foundry, which is still transitioning away from its historic baseload of petrochemical related work, it is well placed to benefit from the upcoming increase in military expenditure and nuclear related casting requirements as its precision heavy castings niche skillset will be required. However, like all projects within this industry, a significant amount of time is required until the design and procurement of components can occur and value can be realised. Armed with the baseload of casting nuclear waste boxes we believe that going forward it will be able to build its way back to sustainable profitability over time.
Within the Refractory Engineering Division, trading conditions remain difficult due to several market sectors being affected by lockdowns with reduced confidence in consumer spending. The short to medium term outlook will be dependent on the market recovery and consumer spending.
The Board continues to manage working capital and expenditure to maintain a modest level of gearing. Prior to the end of this current financial year, we will be repaying the Bank of England CCFF loan that we took out as an insurance policy against global financial trauma caused by Covid-19.
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 11 to 13 of the Group Annual Accounts to 30th April 2020 which describe the principal risks and uncertainties, and to note 28 (starting on page 75) which describes in detail the key financial risks and uncertainties affecting the business such as credit risk and foreign exchange risk.
Judging the future relationship of the major currency pairs of the US Dollar, Sterling and the Euro continues to be a challenge.
Report on Expected Developments
This report describes the expected developments of the Group during the year ended 30th April 2021. 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 and with the current order book level we are confident that this will continue and improve, especially as we move in to the next financial year, dependent, in the main, on Covid-19 related resolutions as discussed elsewhere in the accounts. As in previous periods, the levels of depreciation and amortisation (both non cash items) remain significant thus masking the true cash generating capability of the Group. As at 31st October 2020, the Group net debt stood at £31.1 million (31st Oct 2019 £27.2 million) as set out in note 10 to these accounts. Whilst the net debt levels are higher than those recorded as at April 2020 and October 2019 the gearing level at 29.8% is still modest and our banking headroom (facilities versus utilisation) is significant. Furthermore, within the second half of this financial year we would expect to significantly reduce our investment in working capital. Given the foregoing, the Directors do not see an issue with the continued ability of the Group to meet its financial commitments and so have drawn up 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 European Union and that 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 financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining 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
16th December 2020
Condensed Consolidated Statement of Profit or Loss
for the half year to 31st October 2020
Unaudited
Unaudited
Audited
Half Year to
Half Year to
Year Ended
31st October
31st October
30th April
2020
2019
2020
£'000
£'000
£'000
Continuing operations
Revenue
62,628
70,090
144,512
Cost of sales
(46,404)
(50,610)
(109,743)
Gross profit
16,224
19,480
34,769
Other income
-
689
690
Distribution expenses
(1,320)
(1,629)
(2,792)
Administrative expenses
(8,833)
(10,715)
(19,809)
Operating profit
6,071
7,825
12,858
Financial expenses
(323)
(449)
(809)
Share of profit of associate companies
26
30
66
Profit before taxation
5,774
7,406
12,115
Tax on profit
(1,289)
(1,812)
(3,775)
Profit after taxation
4,485
5,594
8,340
Attributable to:
Equity holders of the parent
4,171
5,260
7,866
Non-controlling interests
314
334
474
Profit for the period
4,485
5,594
8,340
Basic earnings per ordinary share (Note 9)
56.64p
72.92p
107.93p
Diluted earnings per ordinary share (Note 9)
55.42p
69.77p
103.31p
Condensed Consolidated Statement of Comprehensive Income
for the half year to 31st October 2020
Unaudited
Unaudited
Audited
Half Year to
Half Year to
Year Ended
31st October
31st October
30th April
2020
2019
2020
£'000
£'000
£'000
Profit for the period
4,485
5,594
8,340
Other comprehensive income / (expense)
Items that are or may be reclassified subsequently to the income statement
Foreign exchange translation differences
593
(162)
(1,007)
Goodwill arising from purchase of non-controlling interest in subsidiaries
-
(63)
(72)
Effective portion of changes in fair value of cash flow hedges
(293)
1,928
(355)
Ineffective portion of changes in fair value of cash flow hedges
(617)
-
-
Change in fair value of cash flow hedges transferred to profit or loss
935
379
522
Effective portion of changes in fair value of cost of hedging
88
(515)
(843)
Ineffective portion of change in fair value cost of hedging
581
-
-
Change in fair value of cost of hedging transferred to profit or loss
281
276
395
Tax on items that are or may be reclassified subsequently to profit or loss
(186)
(347)
77
Other comprehensive income / (expense) for the period, net of income tax
1,382
1,496
(1,283)
Total comprehensive income for the period
5,867
7,090
7,057
Attributable to:
Equity holders of the parent
5,465
6,761
6,587
Non-controlling interests
402
329
470
5,867
7,090
7,057
Condensed Consolidated Statement of Changes in Equity
for the half year to 31st October 2020
Share capital
Translat-ion reserve
Share-based payments reserve
Cash flow hedge reserve
Cost of hedging reserve
Retained earnings
Total attribut-able to equity holders of the parent
Non-controll-ing interests
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Half year to 31st October 2020 (Unaudited)
Balance at 1st May 2020
736
361
5,244
(499)
(743)
99,918
105,017
4,585
109,602
Total comprehensive income:
Profit
-
-
-
-
-
4,171
4,171
314
4,485
Other comprehensive income:
Foreign exchange translation differences
-
502
-
-
-
-
502
91
593
Net movements on cash flow hedges
-
-
-
68
724
-
792
(3)
789
Total comprehensive income for the period
-
502
-
68
724
4,171
5,465
402
5,867
Issue of shares
16
-
-
-
-
-
16
-
16
Dividends paid
-
-
-
-
-
(6,016)
(6,016)
(125)
(6,141)
Balance at 31st October 2020
752
863
5,244
(431)
(19)
98,073
104,482
4,862
109,344
Condensed Consolidated Statement of Changes in Equity
for the half year to 31st October 2020
Share capital
Translat-ion reserve
Share-based payments reserve
Cash flow hedge reserve
Cost of hedging reserve
Retained earnings
Total attribut-able to equity holders of the parent
Non-controll-ing interests
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Half year to 31st October 2019 (Unaudited)
Balance at 1st May 2019
720
1,044
4,991
(573)
(426)
99,409
105,165
4,126
109,291
Total comprehensive income:
Profit
-
-
-
-
-
5,260
5,260
334
5,594
Other comprehensive income:
Goodwill arising from purchase of NCI interest in subsidiary
-
-
-
-
-
(63)
(63)
-
(63)
Foreign exchange translation differences
-
(198)
-
-
-
-
(198)
36
(162)
Net movements on cash flow hedges
-
-
-
1,937
(175)
-
1,762
(41)
1,721
Total comprehensive income for the period
-
(198)
-
1,937
(175)
5,197
6,761
329
7,090
Issue of shares
16
-
-
-
-
-
16
-
16
Dividends paid
-
-
-
-
-
(6,927)
(6,927)
-
(6,927)
Acquisition of NCI without a change of control
-
-
-
-
-
-
-
(11)
(11)
Other transactions
-
358
-
-
-
(358)
-
-
-
Balance at 31st October 2019
736
1,204
4,991
1,364
(601)
97,321
105,015
4,444
109,459
Condensed Consolidated Statement of Changes in Equity
for the half year to 31st October 2020
Share capital
Translat-ion reserve
Share-based payments reserve
Cash flow hedge reserve
Cost of hedging reserve
Retained earnings
Total attribut-able to equity holders of the parent
Non-controll-ing interests
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Year ended 30th April 2020
(Audited)
Balance at 1st May 2019
720
1,044
4,991
(573)
(426)
99,409
105,165
4,126
109,291
Total comprehensive income:
Profit
-
-
-
-
-
7,866
7,866
474
8,340
Other comprehensive income:
Foreign exchange translation differences
-
(964)
-
-
-
-
(964)
(43)
(1,007)
Goodwill arising from purchase of NCI interest in subsidiaries
-
-
-
-
-
(72)
(72)
-
(72)
Net movements on cash flow hedges
-
-
-
74
(317)
-
(243)
39
(204)
Total comprehensive income for the period
-
(964)
-
74
(317)
7,794
6,587
470
7,057
Issue of shares
16
-
-
-
-
-
16
-
16
Tax on equity-settled share-based payment transactions
-
-
253
-
-
-
253
-
253
Dividends paid
-
-
-
-
-
(6,927)
(6,927)
-
(6,927)
Acquisition of NCI without a change of control
-
-
-
-
-
-
-
(11)
(11)
Disposal of equity investments
-
(77)
-
-
-
-
(77)
-
(77)
Reclassification
-
358
-
-
-
(358)
-
-
-
Balance at 30th April 2020
736
361
5,244
(499)
(743)
99,918
105,017
4,585
109,602
Condensed Consolidated Balance Sheet
as at 31st October 2020
Unaudited
Unaudited
Audited
as at
as at
as at
31st October
31st October
30th April
2020
2019
2020
£'000
£'000
£'000
Non-current assets
Property, plant and equipment
80,132
75,279
74,969
Investment in associates
853
817
816
Intangible assets
24,770
22,483
24,695
Derivative financial assets
1,145
-
749
Other financial assets at amortised cost
137
361
252
107,037
98,940
101,481
Current assets
Inventories
45,359
56,913
44,887
Contract assets
15,685
9,846
6,558
Trade and other financial assets
23,959
24,620
24,486
Other receivables
5,669
3,694
4,506
Deferred tax asset
151
84
60
Derivative financial assets
1,067
2,247
456
Cash and cash equivalents
10,915
9,416
9,840
102,805
106,820
90,793
Total assets
209,842
205,760
192,274
Current liabilities
Bank overdrafts and interest-bearing liabilities
33,661
9,551
14,624
Contract liabilities *
25,461
27,068
18,965
Trade payables and other financial liabilities
19,724
18,174
23,485
Other payables
4,260
6,471
3,298
Deferred consideration
-
204
-
Derivative financial liabilities
1,011
1,552
1,071
Liabilities for current tax
1,881
1,393
1,873
Warranty provision
81
235
160
86,079
64,648
63,476
Non-current liabilities
Interest-bearing liabilities
9,709
28,652
15,599
Derivative financial liabilities
474
-
202
Warranty provision
414
219
324
Deferred tax liabilities
3,822
2,782
3,071
14,419
31,653
19,196
Total liabilities
100,498
96,301
82,672
Net assets
109,344
109,459
109,602
Equity attributable to equity holders of the parent
Share capital
752
736
736
Translation reserve
863
1,204
361
Share-based payments reserve
5,244
4,991
5,244
Cash flow hedge reserve
(431)
1,364
(499)
Cost of hedging reserve
(19)
(601)
(743)
Retained earnings
98,073
97,321
99,918
Total equity attributable to equity holders of the parent
104,482
105,015
105,017
Non-controlling interests
4,862
4,444
4,585
Total equity
109,344
109,459
109,602
* Contract liabilities include advance payments from customers of £24,991,000, with the balance of £470,000 being costs accrued for contracts.
Condensed Consolidated Statement of Cash Flows
for the half year ended 31st October 2020
Unaudited
Unaudited
Audited
Half Year to 31st October 2020
Half Year to 31st October 2019
Year ended 30th April 2020
£'000
£'000
£'000
Cash flow from operating activities
Profit from continuing operations after tax
4,485
5,594
8,340
Adjustments for:
Depreciation
2,715
3,180
5,874
Depreciation of right-of-use assets - formerly finance leases
159
141
290
Depreciation of right-of-use assets - formerly operating leases
265
248
537
Amortisation of intangible assets
745
484
1,328
Financial expenses
323
449
809
Foreign exchange losses
48
143
203
(Profit) / loss on sale of property, plant and equipment
(32)
2
52
Share of profit of associate companies
(26)
(30)
(66)
Profit on disposal of subsidiary
-
-
(172)
Tax expense
1,289
1,812
3,775
Operating profit before changes in working capital and provisions
9,971
12,023
20,970
Decrease / (increase) in inventories
85
(6,430)
4,748
Increase in contract assets
(9,083)
(6,107)
(2,863)
Increase in trade and other receivables
(53)
(849)
(2,549)
Increase in contract liabilities
6,509
8,829
874
(Decrease) / increase in trade and other payables
(3,351)
(522)
2,310
Decrease / (increase) in unhedged derivative balances
181
(126)
(980)
Cash inflow from operations
4,259
6,818
22,510
Interest paid
(346)
(320)
(747)
Interest element of lease obligations - formerly finance leases
(14)
(21)
(41)
Interest element of lease obligations - formerly operating leases
(28)
(27)
(56)
Corporation tax paid
(958)
(1,775)
(2,493)
Net cash from operating activities
2,913
4,675
19,173
Cash flow from investing activities
Proceeds from sale of property, plant and equipment
136
75
139
Acquisition of property, plant and equipment
(7,965)
(3,156)
(6,062)
Additional investment in existing subsidiaries
-
(74)
(83)
Acquisition of intangible assets
(600)
(74)
(1,855)
Development expenditure capitalised
(450)
(297)
(1,105)
Net cash outflow from investing activities
(8,879)
(3,526)
(8,966)
Cash flows from financing activities
Proceeds from issue of share capital
16
16
16
Payment of capital element of finance lease obligations
(524)
(547)
(954)
Payment of capital element of operating lease liabilities
(263)
(167)
(509)
Proceeds from new finance leases
704
54
102
Dividends paid
(6,016)
(6,927)
(6,927)
Dividends paid to non-controlling interests
(125)
-
-
Net proceeds from loans and committed facilities
11,659
11,949
7,556
Net cash inflow / (outflow) from financing activities
5,451
4,378
(716)
Net (decrease) / increase in cash and cash equivalents
(515)
5,527
9,491
Cash and cash equivalents at beginning of year
9,449
493
493
Effect of exchange rate fluctuations on cash held
109
56
(535)
Closing cash and cash equivalents (note 13)
9,043
6,076
9,449
Notes
to the Condensed Consolidated Interim Financial Statements
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 2020 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 2020 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 EU. 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 2020.
The comparative figures for the financial year ended 30th April 2020 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 16TH December 2020.
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 2020. The changes in accounting policies are to be reflected in the Group's consolidated financial statements as at and for the year ending 30th April 2021.
The following standards and amendments became effective and therefore were adopted by the Group.
· Amendments to IFRS 3 - Definition of a business (effective for annual periods beginning on or after 1st January 2020)
· Amendments to IAS 1 and IAS 8 - Definition of material (effective for annual periods beginning on or after 1st January 2020)
· Amendments to References to the Conceptual Framework in IFRS Standards (effective for annual periods beginning on or after 1st January 2020)
The Group has considered the impact on profit, earnings per share and net assets in future periods, of the other new standards and interpretations referred to above, and none of the above standards or interpretations is expected to have a material impact.
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 standards and amendments have not yet been adopted by the Group:
· Amendments to IFRS 16 - Covid-19 Related Rent Concessions (effective for annual periods beginning on or after 1st June 2020)
· Annual Improvements to IFRS Standards 2018-2000 Cycle (effective for annual periods beginning on or after 1st January 2022)
· Amendments to IFRS 3 - Reference to the Conceptual Framework (effective for annual periods beginning on or after 1st January 2022)
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 2020.
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
Products and services from which reportable segments derive their revenues
In accordance with the requirements of IFRS 8 "Operating Segments" the Group's reportable segments based on information reported to the Group's Board of Directors for the purposes of resource allocation and assessment of segment performance are as follows:
• Mechanical Engineering - casting, machining and general engineering
• Refractory Engineering - powder manufacture and mineral processing
Information regarding the Group's operating segments is reported in the following tables.
Segment Revenue
Mechanical Engineering
Refractory Engineering
Sub Total
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Revenue
External sales
43,121
47,244
100,078
19,507
22,846
44,434
62,628
70,090
144,512
Inter-segment sales
9,418
13,085
25,821
4,651
4,757
8,361
14,069
17,842
34,182
Total revenue
52,539
60,329
125,899
24,158
27,603
52,795
76,697
87,932
178,694
Reconciliation to consolidated revenues:
Inter-segment sales
(14,069)
(17,842)
(34,182)
Consolidated revenue for the period
62,628
70,090
144,512
Segment profits
Mechanical Engineering
Refractory Engineering
Sub Total
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Profits
Segment result including associates
4,587
5,419
8,065
2,309
3,446
7,034
6,896
8,865
15,099
Group administration costs
(799)
(1,010)
(2,175)
Group finance and expenses
(323)
(449)
(809)
Consolidated profit before tax for the period
5,774
7,406
12,115
Tax
(1,289)
(1,812)
(3,775)
Consolidated profit after tax for the period
4,485
5,594
8,340
Segment Assets and Liabilities
Segmental total assets
Segmental total liabilities
Segmental net assets
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
Unaudited Half Year Ended 31st October 2020
Unaudited Half Year Ended 31st October 2019
Audited Year Ended 30th April 2020
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Mechanical Engineering
105,602
110,736
95,193
78,068
80,245
72,207
27,534
30,491
22,986
Refractory Engineering
42,239
44,191
41,962
21,643
23,125
22,850
20,596
21,066
19,112
Sub total reportable segment
147,841
154,927
137,155
99,711
103,370
95,057
48,130
51,557
42,098
Goodwin PLC (the Company) net assets
76,944
73,384
83,415
Elimination of Goodwin PLC investments
(25,801)
(25,301)
(25,801)
Goodwill
10,071
9,819
9,890
Consolidated total net assets
109,344
109,459
109,602
Segmental property, plant and equipment (PPE) capital expenditure (owned and finance lease assets)
Goodwin PLC
4,701
1,456
2,824
Mechanical Engineering
2,489
1,249
2,655
Refractory Engineering
1,069
259
633
8,259
2,964
6,112
6. Geographical segments
Half Year Ended 31st October 2020
Half Year Ended 31st October 2019
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Unaudited
Revenue
Operational net assets
Non-current assets
PPE capital expenditure
Revenue
Operational net assets
Non-current assets
PPE capital expenditure
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
UK
17,928
72,558
85,076
6,638
16,836
73,865
80,895
2,623
Rest of Europe
9,598
9,208
3,515
183
10,852
6,990
3,496
80
USA
5,557
-
-
-
6,787
-
-
-
Pacific Basin
13,267
14,734
8,875
615
16,377
15,464
7,528
122
Rest of World
16,278
12,844
9,571
823
19,238
13,140
7,021
139
Total
62,628
109,344
107,037
8,259
70,090
109,459
98,940
2,964
Year Ended 30th April 2020
Audited
Audited
Audited
Audited
Revenue
Operational net assets
Non-current assets
PPE capital expenditure
£'000
£'000
£'000
£'000
UK
39,609
76,467
84,198
5,148
Rest of Europe
20,004
8,346
3,439
173
USA
12,749
-
-
-
Pacific Basin
34,844
13,513
7,132
225
Rest of World
37,306
11,276
6,712
566
Total
144,512
109,602
101,481
6,112
7. 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.
Mechanical Engineering
Refractory Engineering
Total
£'000
£'000
£'000
Primary Geographical markets
Unaudited half year ended 31st October2020
UK
12,548
5,380
17,928
Rest of Europe
6,677
2,921
9,598
USA
5,444
113
5,557
Pacific Basin
4,698
8,569
13,267
Rest of World
13,754
2,524
16,278
Total
43,121
19,507
62,628
Mechanical Engineering
Refractory Engineering
Total
£'000
£'000
£'000
Primary Geographical markets
Unaudited half year ended 31st October2019
UK
11,584
5,252
16,836
Rest of Europe
7,053
3,799
10,852
USA
6,735
52
6,787
Pacific Basin
6,988
9,389
16,377
Rest of World
14,884
4,354
19,238
Total
47,244
22,846
70,090
Product lines
Unaudited half year ended 31st October2020
Standard products and consumables
4,487
19,507
23,994
Minimum period contracts for goods and services
1,626
-
1,626
Bespoke engineered products - over time
27,306
-
27,306
Bespoke engineered products - point in time
9,702
-
9,702
Total
43,121
19,507
62,628
Unaudited half year ended 31st October2019
Standard products and consumables
5,131
22,846
27,977
Minimum period contracts for goods and services
2,171
-
2,171
Bespoke engineered products - over time
25,146
-
25,146
Bespoke engineered products - point in time
14,796
-
14,796
Total
47,244
22,846
70,090
8. Dividends
The Directors do not propose the payment of an interim dividend.
Unaudited
Unaudited
Audited
Half Year to
Half Year to
Year Ended
31st October2020
31st October 2019
30th April 2020
£'000
£'000
£'000
Equity Dividends Paid:
Ordinary dividends paid during the period in respect of the year ended 30th April 2020 (81.71p per share)
6,016
-
-
Ordinary dividends paid during the period in respect of the year ended 30th April 2019 (96.21p per share)
-
6,927
6,927
Total dividends paid during the period
6,016
6,927
6,927
9. Earnings Per Share
The calculation of the basic earnings per ordinary share is based on the number of ordinary shares in issue. The weighted average number of ordinary shares in issue during the six months ended 31st October 2020 was 7,364,087 (31st October 2019: 7,213,304). The relevant profits attributable to ordinary shareholders were £4,171,000, (six months ended 31st October 2019: £5,260,000).
There is a share option scheme in place for the Directors of the Company under the Company's Equity Long Term Incentive Plan (LTIP), based on the Company exceeding a target growth in the total shareholder return of the Company over the period from 1st May 2016 to 30th April 2019. Under the scheme, a maximum of 489,600 share options vested at 1st May 2019 of which 163,200 were exercised during this period and 163,200 during the previous six month period. The total number of shares used as the denominator for the diluted earnings per share is 7,526,719 (half year ended 31st October 2019: 7,538,727; year ended 30th April 2020: 7,613,654).
10. Capital Management, Issuance and Repayment of Debt
At 31st October 2020 the capital utilised was £135,603,000, as shown below:
Unaudited
Unaudited
Audited
as at
as at
as at
31st October2020
31st October 2019
30th April 2020
£'000
£'000
£'000
Cash and cash equivalents
(10,915)
(9,416)
(9,840)
Lease liabilities - finance leases (note 14)
1,451
1,684
1,256
Bank loans and committed facilities (note 14)
38,713
31,390
27,010
Bank overdrafts (note 14)
1,872
3,340
391
Deferred consideration
-
204
-
Net debt
31,121
27,202
18,817
Total equity attributable to equity holders of the parent
104,482
105,015
105,017
Capital
135,603
132,217
123,834
11. Property, Plant and Equipment
Unaudited
Unaudited
Unaudited
Unaudited
as at
as at
as at
as at
31st October2020
31st October2020
31st October2020
31st October2020
£'000
£'000
£'000
£'000
Owned assets
Right-of-use assets - formerly finance leases
Right-of-use assets - formerly operating leases
Total
Net book value at the beginning of the period
69,626
3,805
1,538
74,969
Additions
7,498
761
-
8,259
Disposals (at net book value)
(104)
-
-
(104)
Depreciation
(2,715)
(159)
(265)
(3,139)
Exchange adjustment
99
19
29
147
Net book value at the end of the period
74,404
4,426
1,302
80,132
Unaudited
Unaudited
Unaudited
Unaudited
as at
as at
as at
as at
31st October 2019
31st October 2019
31st October 2019
31st October 2019
£'000
£'000
£'000
£'000
Owned assets
Right-of-use assets - formerly finance leases
Right-of-use assets - formerly operating leases
Total
Net book value at the beginning of the period
74,106
-
-
74,106
Balance recognised on transition to IFRS 16
-
-
1,055
1,055
Additions
2,887
77
929
3,893
Transfer to right-of-use assets - on transition
(3,959)
3,959
-
-
Disposals (at net book value)
(77)
-
-
(77)
Depreciation
(3,180)
(141)
(248)
(3,569)
Exchange adjustment
(162)
(10)
43
(129)
Net book value at the end of the period
69,615
3,885
1,779
75,279
12. Intangible assets
Unaudited
Unaudited
as at
as at
31st October2020
31st October 2019
£'000
£'000
Net book value at the beginning of the period
24,695
22,354
Additions
564
535
Amortisation
(745)
(484)
Exchange adjustment
256
78
Net book value at the end of the period
24,770
22,483
13. Cash and cash equivalents
Unaudited
Unaudited
Audited
as at
as at
as at
31st October2020
31st October 2019
30th April 2020
£'000
£'000
£'000
Cash and cash equivalents per balance sheet
10,915
9,416
9,840
Bank overdrafts
(1,872)
(3,340)
(391)
Cash and cash equivalents per cash flow statement
9,043
6,076
9,449
14. Interest-bearing liabilities
Unaudited
Unaudited
Audited
as at
as at
as at
31st October2020
31st October 2019
30th April 2020
£'000
£'000
£'000
Bank overdrafts
1,872
3,340
391
Bank loans and committed facilities
30,749
4,740
12,750
Lease liabilities - formerly finance leases
731
948
992
Lease liabilities - formerly operating leases
309
523
491
Due within one year
33,661
9,551
14,624
Bank loans and committed facilities
7,964
26,650
14,260
Lease liabilities - formerly finance leases
720
736
264
Lease liabilities - formerly operating leases
1,025
1,266
1,075
Due after more than one year
9,709
28,652
15,599
Bank overdrafts
1,872
3,340
391
Bank loans and committed facilities
38,713
31,390
27,010
Lease liabilities - formerly finance leases
1,451
1,684
1,256
Lease liabilities - formerly operating leases
1,334
1,789
1,566
Total
43,370
38,203
30,223
15. 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 2020. The carrying amount is a reasonable approximation of fair value for all financial assets and financial liabilities.
Fair value - hedging instruments
FVTPL
Amortised cost
Total carrying amount / fair value amount
£'000
£'000
£'000
£'000
Financial assets measured at fair value
Forward exchange contracts used for hedging
1,152
-
-
1,152
Other forward exchange contracts
-
1,060
-
1,060
1,152
1,060
-
2,212
Financial assets not measured at fair value
Cash and cash equivalents
-
-
10,915
10,915
Contract assets
-
-
15,685
15,685
Trade receivables and other financial assets
-
-
24,096
24,096
-
-
50,696
50,696
Financial liabilities measured at fair value
Forward exchange contracts used for hedging
753
-
-
753
Other forward exchange contracts
-
732
-
732
753
732
-
1,485
Financial liabilities not measured at fair value
Bank overdrafts
-
-
1,872
1,872
Bank loans
-
-
38,713
38,713
Finance lease liabilities
-
-
1,451
1,451
Contract liabilities
-
-
25,461
25,461
Trade payables and other financial liabilities
-
-
19,724
19,724
-
-
87,221
87,221
The 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).
END
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