REG - Stelrad Group PLC - Preliminary Announcement of Final Results
13/03/2023 07:00
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RNS Number : 6589S Stelrad Group PLC 13 March 2023
Stelrad Group plc - preliminary announcement of final results for the year
ended 31 December 2022
Record results underpinned by resilient business model
Stelrad Group plc ("Stelrad" or "the Group" or "the Company", LSE: SRAD), a
leading specialist manufacturer and distributor of steel panel and other
designer radiators in the UK, Europe and Turkey, today announces its audited
financial results for the year ended 31 December 2022.
Results summary* 2022 2021 Increase/ (decrease) %
Revenue (pre-IAS 29), £m** 312.1 272.3 14.6
Adjusted operating profit, £m ** 34.0 33.2 2.4
Adjusted profit for the year, £m ** 24.3 21.6 12.9
Adjusted Earnings per share, pence ** 19.11 16.92 12.9
Statutory revenue, £m 316.3 272.3 16.2
Statutory operating profit, £m 22.6 26.6 (14.8)
Statutory profit for the year, £m 4.3 14.7 (70.6)
Statutory earnings per share, pence 3.38 11.51 (70.6)
Adjusted free cash flow, £m ** 17.2 21.2 (18.9)
Net debt (excluding lease liabilities), £m 68.4 40.9 67.2
Total dividend per share, pence 7.64 0.96 695.8
*As a result of inflation in Turkey exceeding 100% over a three-year period,
the Group was required to adopt IAS 29 in respect of its Turkish subsidiary
for the first time in the financial statements for the year ended 31 December
2022. The impact of the adoption of IAS 29 is a non-cash item but has a
£16.3m negative impact on statutory profit for the year. See Finance and
business review for further details. Due to a change in functional currency,
IAS 29 will no longer apply after 1 January 2023.
**Adjusted figures are stated before the impact of IAS 29, exceptional items,
foreign exchange differences, amortisation of customer relationships and tax
thereon where applicable. See note 8 for a reconciliation of adjusted profit
after tax. See note 3 for a reconciliation of adjusted operating profit.
See the finance and business review for a reconciliation of adjusted free cash
flow.
Financial and operational highlights
· Record Group financial performance as a result of Stelrad's
resilient business model:
- UK & Ireland: 6.5% revenue growth (pre-IAS 29), 5.2% growth in
adjusted operating profit.
- Europe: 25.3% (-0.8% organic) revenue growth (pre-IAS 29), 7.3% growth
in adjusted operating profit.
- Turkey & International: 6.4% (+3.1% organic) revenue growth
(pre-IAS 29), 29.1% reduction in adjusted operating profit.
· Contribution per radiator (pre-IAS 29) increased by 16.5% (18.6%
like-for-like increase), more than offsetting a 9.2% year on year sales volume
decline (15.3% like-for-like decline) versus exceptionally strong comparatives
in 2021.
· Improved performance underpinned by proactive margin management
and operational improvements across the business.
· Completion of two further production line transfers from Western
European plants to lower cost Turkish facility in the period.
· Acquisition of Italian manufacturer of heat emitters, DL
Radiators for €28.3 million in July 2022.
· Continued to strengthen our market position, thanks to strong,
long-lasting customer relationships, market-leading product availability and
customer service and product innovation.
· Recommended final dividend of 4.72 pence per share, to be paid on
26 May 2023.
Commenting on the Group's performance, Trevor Harvey, Chief Executive Officer,
said:
"We delivered a record performance in 2022 thanks to the resilience of our
business model combined with the hard work of our employees, the strength of
our product offering, the quality of our customer relationships and our
relentless approach to operational improvements across the firm. While the
market backdrop is not easy, as a business with a near 100-year track record,
we have successfully navigated previous market downturns and our current
management team has the experience and ability to deliver ongoing
outperformance despite the challenging macroeconomic environment.
Longer-term, the twin drivers of decarbonisation and energy efficient heating
remain firmly in place and we remain well-placed to deliver value for
stakeholders."
Current trading and outlook
The Group's outlook for FY23 remains in line with current market expectations.
Whilst it is early in the year and we are mindful of the exceptionally strong
comparatives in H1 2022, trading since the period end has been encouraging. We
remain confident in our strategic objectives of growing market share,
improving product mix, optimising routes to market, and positioning the
business for decarbonisation.
For further information:
Media enquiries
Stelrad Group plc +44 (0)191 261 3301
Trevor Harvey, Chief Executive Officer
George Letham, Chief Financial Officer
Investec - Sole Broker
Bruce Garrow / Ben Griffiths
Powerscourt stelrad@powerscourt-group.com (mailto:stelrad@powerscourt-group.com)
James White / Genevieve Ryan +44 (0)7855 432 699
Notes to Editors
Stelrad Group plc is a leading specialist radiator manufacturer, selling an
extensive range of hydronic, hybrid, dual fuel and electrical heat emitters to
more than 500 customers in over 40 countries. These include standard,
premium and low surface temperature (LST) steel panel radiators, towel
warmers, decorative steel tubular, steel multicolumn and aluminium radiators.
Following the acquisition of DL Radiators in July 2022, the Group has five
core brands: Stelrad, Henrad, Termo Teknik, DL Radiators and Hudevad. In
2021, the latest year for which data is available, Stelrad held 18.4% share by
volume of the combined UK, European and Turkish steel panel radiator market,
being the clear market leader in five countries - the UK, Ireland, the
Netherlands, Belgium and Denmark - and having a top 3 position in a further
seven markets.
Stelrad is headquartered in Newcastle upon Tyne in the UK and in 2022 employed
1,500+ people, with manufacturing and distribution facilities in Çorlu
(Turkey), Mexborough (UK), Moimacco (Italy) and Nuth (Netherlands), with
further commercial and distribution operations in Kolding (Denmark) and Krakow
(Poland).
The Group's origins date back to the 1930s and Stelrad enjoys long established
commercial relationships with many of its customers, having served each of its
top five current customers for over twenty years.
Further information can be found at: https://stelradplc.com/
(https://stelradplc.com/)
Chair's statement
Overview
In 2022, our first full year as a plc, I am pleased to report that Stelrad has
continued to make strong progress. Although macroeconomic conditions have
been challenging, with an unpredictable trading environment and significant
inflationary pressures, the Group's record financial performance was ahead of
last year's results which were also a record. This underlines the resilience
of our business model and management's ability to execute our long-term
strategy.
I would like to take this opportunity to welcome DL Radiators' employees to
the Stelrad Group. The acquisition of DL Radiators was completed in July
2022 and is highly complementary, bringing the group an expanded product
portfolio and additional routes to market.
Performance and results
Despite a reduction in volume of 9.2% in 2022, Stelrad's revenue (pre-IAS 29)
increased by 14.6% to £312.1 million, whilst adjusted operating profit rose
from £33.2 million in 2021 to £34.0 million, up 2.4%. As these results
show, Stelrad's business model and strategy, built on our market leadership in
five countries and top three position in seven more, continue to demonstrate
high levels of resilience despite the difficult trading environment, supply
chain challenges and significant inflationary pressures.
Dividends
The Board is recommending a final dividend of 4.72 pence per share. Subject
to approval by shareholders at the Annual General Meeting on 22 May 2023, the
final dividend will be paid on 26 May 2023 to shareholders on the register on
28 April 2023. In addition to the interim dividend of 2.92 pence per share,
this brings total dividends for the year to 7.64 pence per share and reflects
our commitment to delivering returns for our shareholders.
Purpose
Stelrad continues to make meaningful progress towards achieving our purpose:
helping to heat homes sustainably. The Group has an important role to play
in facilitating the transition to low and zero carbon heating systems, both
through influencing specification and by supplying products able to contribute
effectively to environmental and social improvement.
Strategy
Stelrad's clear commercial and operational strategies delivered strong results
in 2022, as the Group continued to pursue its four key strategic objectives:
growing market share, improving product mix, optimising routes to market and
positioning effectively for decarbonisation.
The acquisition of DL Radiators will enable further progress against these
objectives in 2023 and beyond. The resulting market share growth in steel
panel radiators in Germany will move Stelrad into a Top 3 position in this key
European heating market.
Furthermore, the Group's Standardised product design across all manufacturing
facilities alongside our extensive product range, multi-brand strategy, strong
customer relationships and increased penetration of the specialist distributor
channel, mean that the Group is well-placed to continue to deliver market
outperformance in the year ahead, despite well-publicised macro-economic
headwinds.
Environmental, social and governance ("ESG") objectives
High standards of corporate responsibility, sustainability and employee
engagement are central to Stelrad Group's values and we take them into account
as we consider the long-term impact of all our business operations.
During 2022, we set up a task force, led by the Chief Executive Officer, to
conduct a detailed review of the Group's activities and to develop our ESG
strategy further, consistent with our purpose of helping to heat homes
sustainably.
This has resulted in the creation of our ESG framework Fit for the Future,
which supports our belief that our long-term success depends on the
responsible treatment of all our stakeholders and the natural environment,
building on our well-established ways of working and focusing on the most
material issues for Stelrad and our stakeholders.
Summary
Although 2022's turbulent macroeconomic conditions are expected to continue
into 2023, the proven strength of Stelrad's management team, business model
and strategic approach positions the Group effectively to benefit from market
recovery over the medium-term.
The strategic acquisition of DL Radiators will enable Stelrad to leverage a
complementary product range, increased access to additional territories and
channels to market and the transition to the low and zero carbon heating
systems of the future. This provides a significant opportunity to maximise
the clear synergies that exist across our portfolio of leading brands.
Although 2022 was Stelrad's first full year as a plc, the Group's proven track
record for progress in challenging times continued, with strong financial
performance, a successful acquisition and the development of our
sustainability framework Fit for the Future.
Bob Ellis
Chair
13 March 2023
Chief Executive Officer's review
Overview
Stelrad continued to make significant progress in 2022, delivering a record
year despite testing trading conditions. Across the heating industry, this
has been a period of supply chain disruption coupled with significant material
and labour cost inflation. In order to mitigate the effects for our
stakeholders, the Group has effectively managed these input cost risks and
acted quickly and proactively to optimise prices, whilst continuing to pursue
our strategic objectives in the face of the current macroeconomic headwinds.
In July 2022, Stelrad acquired leading Italian heat emitter manufacturer DL
Radiators, a well-established business which complements Stelrad's existing
commercial and operational strategy. The acquisition case was compelling,
providing Stelrad with market share growth, increased access to key
territories and channels to market and a product range orientated towards
higher added-value designs, including those suitable for use in decarbonised
heating systems. As a result, the Group is more effectively positioned than
ever for future success. Integration of DL Radiators is progressing to plan.
In addition, over the course of the year, we have developed our Fit for the
Future sustainability framework, seeking to build upon our robust existing
practices and to formalise a more structured approach to ESG, consistent with
Stelrad's plc status.
Strong financial performance
During the course of 2022, Stelrad continued to outperform the market across
the key geographies where it operates.
Including DL Radiators' sales from August 2022, Stelrad delivered revenue
growth (pre-IAS 29) of 14.6% relative to 2021, increasing from £272.3 million
to £312.1 million. Adjusted operating profit rose by 2.4% to £34.0 million
(2021: £33.2 million). Our flexible manufacturing footprint continues to
provide us with an important cost advantage. We moved further manufacturing
lines to Turkey during the period which, along with careful management of
pricing, enabled us to increase contribution per radiator by 16.5%.
In the UK & Ireland, revenue (pre-IAS 29) grew by 6.5%, adjusted operating
profit by 5.2%, whilst in Europe, revenue (pre-IAS 29) and adjusted operating
profit increased by 25.3% and 7.3% respectively. In Turkey and International
markets, revenue (pre-IAS 29) increased by 6.4% whilst adjusted operating
profit fell by 29.1% due to a 55% sales volume decrease in China.
In 2022, general inflationary pressures, rising interest rates and the effects
of the war in Ukraine, notably on energy costs, combined to halt and reverse
the post-pandemic recovery and were coupled with compensating distributor
inventory reductions to reflect lower underlying levels of demand.
The impact of this challenging macroeconomic environment was clearly felt in
terms of sales volume, which reduced by 9.2% versus the prior year. 2021 was
an extremely strong comparator year, when volume was enhanced by post-Covid
spending and stock levels throughout the distribution channel increased in
anticipation of a sustained period of recovery.
Compared to 2021, the volume mix for higher added-value premium steel panel
radiators remained around 6% overall. Between 2015 and 2022, Stelrad
achieved 48.5% volume growth in premium steel panel radiators and is
positioned effectively for the future, as economic conditions improve and
markets recover. Penetration increased slightly in European markets,
reflecting effective upselling in the distribution channels. The European
market for premium steel panel products is more mature than UK and, as a
result, we remain excited by the opportunity to substantially increase UK
premium panel volumes in the future.
Continued investment for the future
During the course of 2022, Stelrad continued to invest in our state-of-the-art
operational facilities whilst simultaneously managing the supply chain to
minimise any impact on our customers and to scale production output
appropriately for reduced levels of market demand. To enhance manufacturing
flexibility, a production line was transferred from the UK to our low-cost
Turkish facility, an operational investment further supported by additional
local warehousing capacity, which will enable ongoing improvements in customer
service across the Group.
Investment in our facilities continues to drive improvements in the health,
safety and wellbeing of our employees. Across the Group during 2022, we
recorded a 26% reduction in lost time incidents (LTIs) relative to the prior
year and, at the end of February 2023, our UK site had gone 942 days without
an LTI, beating the previous record of 929 days.
Outlook
Despite well-documented market headwinds, Stelrad's scale, strong brands and
resilient business model, combined with the highly complementary strategic
acquisition of DL Radiators, mean that the Group is well positioned as we
enter 2023.
In the short term, while trading since the period end has been encouraging and
slightly ahead of expectations, the Group still anticipates the lower volumes
experienced in the second half of 2022 to continue into the first half of
2023. The Group is expecting 2023 to return to historical seasonal patterns
with the second half of the year being stronger than the first half.
In the longer term, energy security concerns in the wake of the Russian
invasion of Ukraine continue to stimulate increased discussion around the
provision of sustainable future heating solutions and Stelrad clearly has an
important role to play in driving better environmental performance through
enabling lower temperature heating solutions as we aim to fulfil our
purpose: helping to heat homes sustainably.
Furthermore, an underlying requirement for new homes, increasing demand for
premium design radiators and, as part of the transition to net zero carbon,
greater consumer focus on low temperature heating systems needing higher
output heat emitters remain supportive macro trends that underpin the broader
outlook for the business.
Trevor Harvey
Chief Executive Officer
13 March 2023
Finance and business review
Group overview
The following table summarises the Group's results for the years ended 31
December 2022 and 31 December 2021.
2022 2021 Increase / (decrease) Increase / (decrease)
£m £m £m %
Revenue (post-IAS 29) 316.3 272.3 44.0 16.2
Revenue (pre-IAS 29) 312.1 272.3 39.8 14.6
Adjusted operating profit 34.0 33.2 0.8 2.4
Exceptional items (1.8) (9.6) 7.8 81.1
Amortisation of customer relationships (0.1) - (0.1) n/a
Foreign exchange differences (3.5) 3.0 (6.5) (215.7)
Impact of IAS 29 (6.0) - (6.0) n/a
Operating profit 22.6 26.6 (4.0) (14.8)
Net finance costs (4.5) (10.2) 5.7 55.8
Monetary losses - net (IAS 29) (7.9) - (7.9) n/a
Profit before tax 10.2 16.4 (6.2) (37.2)
Income tax expense (5.9) (1.7) (4.2) (257.4)
Profit for the year 4.3 14.7 (10.4) (70.6)
Earnings per share (p) 3.38 11.51 (8.13) (70.6)
Adjusted profit for the year 24.3 21.6 2.7 12.9
Adjusted earnings per share (p)((1)) 19.11 16.92 2.19 12.9
Total dividend per share (p) 7.64 0.96 6.68 695.8
((1)) Adjusted earnings per share is calculated on adjusted profit after tax,
being earnings before exceptional items, amortisation of customer
relationships, foreign exchange differences and the impact of IAS 29 and tax
thereon.
Financial overview
The business was negatively impacted by a decline in demand during 2022.
Renovation activity across the majority of European countries was weaker
throughout the year. The reduced demand for radiators in Europe was mainly
driven by a challenging macroeconomic environment due to high inflation and
increasing interest rates. The market price for steel spiked upwards in the
second quarter of 2022 and gradually decreased during the second half of the
year but energy costs increased significantly in the same period.
Revenue (pre-IAS 29) for the year was £312.1 million, an increase of £39.8
million, or 14.6%, on last year (2021: £272.3 million), supported by the
acquisition of DL Radiators in July 2022 and the impact of selling price
increases, partially offset by a decrease in sales volumes. Steel price
volatility continued in 2022 and selling price increases were applied in the
year to recover steel and other inflationary cost increases. Revenue growth
(pre-IAS 29) was 3.0% on a like-for-like basis.
Adjusted operating profit for the year was £34.0 million, an increase of
£0.8 million, or 2.4%, compared to last year (2021: £33.2 million), with the
benefits of a successful focus on margin management and operational
improvements leading to increased margins per radiator, which have more than
offset a decrease in sales volumes of 9.2%. Adjusted operating profit
increased by 1.6% on a like-for-like basis.
Statutory operating profit for the year was £22.6 million (2021: £26.6
million), after deducting the non-cash impact of IAS 29 of £6.0 million
(2021: £nil), exceptional costs of £1.8 million (2021: £9.6 million), the
amortisation of customer relationships of £0.1m (2021: £nil) and the impact
of foreign exchange losses of £3.5 million (2021: gains of £3.0 million).
The exceptional costs incurred in 2022 related to restructuring costs to
reconfigure and optimise production, acquisition costs and the reversal of the
IFRS 3 uplift on finished goods and work in progress required as part of
business combination accounting.
Adjusted profit for the year increased by £2.7 million, or 12.9%, to £24.3
million. Statutory profit for the year, after deducting the £6.0 million
impact of IAS 29 within operating profit and £7.9 million of net monetary
losses, decreased by £10.4 million, or 70.6%, to £4.3 million (2021: £14.7
million). Adjusted earnings per share was 19.11 pence (2021: 16.92 pence),
whilst the statutory earnings per share after the impact of IAS 29 was 3.38
pence (2021: 11.51 pence).
On 13 July 2022, the Group purchased DL Radiators s.r.l. for €28,346,000.
As part of this process, the £80 million revolving credit facility jointly
financed by National Westminster Bank plc and Barclays PLC was increased by
£20 million by means of an accordion option on 8 July 2022. The amended and
restated facility agreement is made up of a £76.0 million revolving credit
facility and a €28.3 million term loan facility expiring in November 2024
with a two-year extension option.
There was a further devaluation of the Turkish Lira against all hard
currencies during 2022. Historically devaluation of Turkish Lira has led to
foreign exchange gains (non-cash in nature) being recorded in the income
statement. The USD strengthened more significantly against Turkish Lira than
both GBP and Euro in 2022, resulting in non-cash foreign exchange losses of
£3.5 million (2021: gains of £3.0 million). The currency differences arise
from the retranslation of our hard currency assets and liabilities in our
Turkish subsidiary and these non-cash currency gains and losses have been
excluded from adjusted operating profit.
At 31 December 2022 the Group had cash of £22.6 million (2021: £15.6
million) and undrawn available facilities of £10.1 million (2021: £23.5
million), with net debt before finance leases of £68.4 million (2021: £40.9
million).
IAS 29
As a result of inflation in Turkey exceeding 100% over a three-year period,
the Group was required to adopt IAS 29 in respect of its Turkish subsidiary
for the first time in its financial statements during the year ended 31
December 2022. The impact of the adoption of IAS 29 is explained in more
detail in note 21 of the statement, with the accounting policy outlined in
note 1 of the statement.
The impact of IAS 29 at 31 December 2021 is accounted for as a positive
restatement to opening reserves. Management believes that the pre-IAS 29
results give a more meaningful representation of the Group's underlying
performance in the year due to more than 80% of assets, liabilities, revenues
and costs in the Turkish subsidiary being denominated in hard currencies. A
negative adjustment to operating profit in the year ended 31 December 2022 of
£6.0 million has therefore been removed in arriving at adjusted operating
profit. Similarly, adjusted profit after tax is stated before the full
impact of the IAS 29 loss for the year of £16.3 million.
The impact of IAS 29 on the results for the year ended 31 December 2022 is
outlined below.
Statutory position IAS 29 Pre-IAS 29 position
£m £m £m
Revenue 316.3 4.2 312.1
Adjusted operating profit 34.0 - 34.0
Exceptional items (1.8) - (1.8)
Amortisation of customer relationships (0.1) - (0.1)
Foreign exchange differences (3.5) (0.5) (3.0)
Impact of IAS29 (6.0) (6.0) -
Operating profit/(loss) 22.6 (6.5) 29.1
Net finance costs (4.5) - (4.5)
Monetary losses - net (IAS 29) (7.9) (7.9) -
Profit/(loss) before tax 10.2 (14.4) 24.6
Income tax expense (5.9) (1.9) (4.0)
Profit/(loss) for the year 4.3 (16.3) 20.6
Functional currency
The Group determined that the functional currency of its Turkish business has
changed following the increased production capabilities at the Turkish factory
arising from the installation of two new manufacturing lines in the second
half of 2022. The new lines are intended to predominantly serve the European
and UK export markets which has given rise to a change in currency profile and
therefore functional currency of the business. The change in functional
currency of the Turkish business from Turkish Lira to Euros will be accounted
for prospectively from 1 January 2023, after which date IAS 29 will no longer
be adopted.
DL Radiators acquisition
During the year, the Group completed the acquisition of DL Radiators for
€28,346,000. DL Radiators is a leading Italian heat emitter manufacturer
which produces and sells both hydronic and electric radiators into the
European domestic heating market.
Further analysis of DL Radiators, and its strategic fit within the Group, will
be included in the Group's 2022 Annual Report and Accounts. The business
combination accounting for the acquisition is outlined in note 12 of this
statement.
Revenue (pre-IAS 29) by geographical market
The table below sets out the Group's revenue (pre-IAS 29) by geographical
market.
Revenue (pre-IAS 29) by geographical market 2022 2021 Increase / (decrease) Increase / (decrease)
£m £m £m %
UK & Ireland 138.9 130.4 8.5 6.5
Europe 147.9 118.1 29.8 25.3
Turkey & International 25.3 23.8 1.5 6.4
Total 312.1 272.3 39.8 14.6
UK & Ireland
The Group's revenue (pre-IAS 29) in UK & Ireland for the year was £138.9
million (2021: £130.4 million), an increase of £8.5 million, or 6.5%. This
was principally a result of the impact of selling price increases implemented
to mitigate the impact of inflationary costs, partially offset by a decrease
in sales volumes.
Europe
The Group's revenue (pre-IAS 29) in Europe for the year was £147.9 million
(2021: £118.1 million), an increase of £29.8 million, or 25.3%, supported by
the acquisition of DL Radiators and the impact of selling price increases
implemented to mitigate the impact of inflationary costs, offset by a decrease
in sales volumes. Excluding the acquisition of DL Radiators, the Group's
revenue (pre-IAS 29) in Europe for the year was £117.1 million.
Turkey & International
The Group's revenue (pre-IAS 29) in Turkey & International for the year
was £25.3 million (2021: £23.8 million), an increase of £1.5 million, or
6.4%. This was principally a result of the impact of selling price increases
implemented to mitigate the impact of inflationary costs, partially offset by
a decrease in sales volumes.
Adjusted operating profit by geographical market
The table below sets out the Group's adjusted operating profit by geographical
market.
Adjusted operating profit by geographical market 2022 2021 Increase / (decrease) Increase / (decrease)
£m £m £m %
UK & Ireland 22.7 21.6 1.1 5.2
Europe 13.9 12.9 1.0 7.3
Turkey & International 2.1 2.9 (0.8) (29.1)
Central costs (4.7) (4.2) (0.5) (9.9)
Total 34.0 33.2 0.8 2.4
UK & Ireland
The Group's adjusted operating profit in UK & Ireland for the year was
£22.7 million (2021: £21.6 million), an increase of £1.1 million, or 5.2%.
This was principally as a result of successful margin management leading to
increased margins per radiator, partially offset by lower sales volumes.
Europe
The Group's adjusted operating profit in Europe for the year was £13.9
million (2021: £12.9 million), an increase of £1.0 million, or 7.3%. This
was principally as a result of successful margin management leading to
increased contributions per radiator, combined with the acquisition of DL
Radiators, partially offset by lower sales volumes.
Turkey & International
The Group's adjusted operating profit in Turkey & International for the
year was £2.1 million (2021: £2.9 million), a reduction of £0.8 million, or
29.1%. Despite proactive margin management, a decline of 55% in sales volumes
in China reduced operating profit in this territory.
Central costs
Central costs for the year were £4.7 million (2021: £4.2 million), an
increase of £0.5 million, or 9.9%. Costs increased principally as a result
of additional expenditure arising due to the Group being listed, following the
completion of the IPO in November 2021.
Exceptional costs
During the year exceptional costs of £1.8 million were incurred (2021: £9.6
million).
The exceptional costs incurred in 2022 related to restructuring costs to
reconfigure and optimise production, acquisition costs and the reversal of the
IFRS 3 uplift on finished goods and work in progress required as part of
business combination accounting.
The exceptional costs incurred in 2021 related to the cost of professional
advisers employed to consider the potential recapitalisation of the Group and
the costs associated with the IPO undertaken by the Group.
These costs are one-off in nature and disclosing these costs as exceptional
allows the true underlying performance of the Group to be more easily
reviewed.
Finance costs
The Group's net finance costs for the year were £4.5 million (2021: £10.2
million). The 55.8% decrease of £5.7 million is primarily due to the
repayment of the historical shareholder loans in November 2021, replaced by
the Group's current debt structure with lower interest rates. The interest
rate of the Group's debt is based on a margin of 2% plus SONIA/Euribor
dependent on the currency of the drawing.
Income tax expense
The Group's income tax expense for the year was £5.9 million (2021: £1.7
million), an increase of £4.2 million, or 257.4%. On an adjusted basis the
Group's income tax expense was £5.1 million which is an increase of £3.7
million from 2021. The 2022 statutory tax charge includes a £1.9 million
charge due to IAS 29, with a deferred liability recognised to reflect the
higher asset values arising under IAS 29. The increase in the underlying tax
charge is due to a number of factors but significantly the 2021 charge
benefiting from the recognition of previously unrecognised deferred tax
assets.
Earnings per share and adjusted earnings per share
Profit for the year decreased by £10.4 million, or 70.6%, to £4.3 million
(2021: £14.7 million) and earnings per share was 3.38 pence (2021: 11.51
pence). The weighted average number of shares was 127.4 million (2021: 127.4
million). Adjusted profit for the year increased by £2.7 million, or 12.9%,
to £24.3 million (2021: £21.6 million) and consequently, adjusted earnings
per share was 19.11 pence (2021: 16.92 pence).
Dividends and reserves
The Group is committed to delivering returns for its shareholders. It has
initially adopted a dividend policy targeting an annualised pay-out of
approximately 40% of adjusted earnings, with capital allocation focused on
reinvestment for growth. The Group intends to split dividend payments
approximately 33% and 67% between the Group's interim and final dividend
payments respectively, across the fiscal year.
The Group paid an interim dividend in respect of the year ended 31 December
2022 of 2.92 pence per share. The Board has recommended a final dividend of
4.72 pence per share at a cost of £6.0 million to the Group. The total
dividend in respect of the year ended 31 December 2022 will be 7.64 pence per
share (2021: 0.96 pence per share on a pro rata basis from 10 November 2021 to
31 December 2021).
Cash flow
The following table summarises the Group's cash flow for the years ended 31
December 2022 and 31 December 2021.
2022 2021 Increase / (decrease)
£m £m £m
EBITDA 42.2 40.6 1.6
Gain on disposal of property, plant and equipment (0.2) (0.2) -
Share based payments 0.3 - 0.3
Working capital adjustments (adjusted for foreign exchange) (9.8) (5.7) (4.1)
Net capital expenditure (11.6) (9.9) (1.7)
Adjusted cash flow from operations 20.9 24.8 (3.9)
Income tax paid (3.8) (3.7) (0.1)
Interest received 0.1 0.1 -
Adjusted free cash flow 17.2 21.2 (4.0)
2022 2021 Increase / (decrease)
Adjusted cash flow from operations (£m) 20.9 24.8 (3.9)
Adjusted operating profit (£m) 34.0 33.2 0.8
Adjusted cash flow from operations conversion (%) 61.5 74.8 (13.3)
The Group's adjusted free cash flow for the year was £17.2 million (2021:
£21.2 million), a decrease of £4.0 million. This reflects a reduction in the
Group's adjusted cash flow from operations.
The Group's adjusted cash flow from operations for the year was £20.9 million
(2021: £24.8 million), a decrease of £3.9 million. This was principally as
a result of increased working capital outflows arising from reduced production
output in Turkey and capital expenditure relating to a new production line in
Italy, partially offset by an increase in EBITDA. Adjusted operating profit
for the period was £34.0 million (2021: £33.2 million), an increase of £0.8
million, following an increase in the profitability of the Group. Adjusted
cash flow from operations conversion for the period was 61.5% (2021: 74.8%), a
reduction of 13.3pp, reflecting the movements in adjusted cash flow from
operations described above.
Capital expenditures
The Group's capital expenditures mainly relate to investment in buildings and
operating plant and equipment. The following table sets out the Group's
capital expenditure, including right-of-use assets, net of transfers from
assets under construction.
2022 2021
£m £m
Freehold land and buildings 2.0 0.7
Leasehold buildings 0.4 0.5
Assets under construction((1)) 1.6 2.0
Plant and equipment 5.6 5.2
Fixtures and fittings 1.6 1.2
Intangible assets 0.2 -
Total 11.4 9.6
((1)) The significant parts of the assets under construction relate to plant
and equipment.
Key capital expenditure in the year ended 31 December 2022 related to
investment in warehousing and additional production lines at the Group's
facilities in Turkey and the installation of a new steel panel radiator
production line in Italy. The Group's capital expenditure will reduce in
future years.
Net debt
During the year ended 31 December 2021, the Group refinanced and repaid all
legacy financing arrangements and shareholder loans, replacing them with a new
three-year revolving credit facility of £80.0 million. During the year
ended 31 December 2022, the Group increased the availability on existing
facilities to £100.0 million (before foreign exchange movements) by
exercising an accordion option. The amended and restated facility agreement
is made up of a £76.0 million revolving credit facility and a €28.3 million
term loan facility.
At 31 December 2022, statutory net debt (including finance leases) of £78.4
million (2021: £50.2 million), comprises £91.0 million (2021: £56.5
million) drawn down against the multicurrency facility and £10.0 million
(2021: £9.3 million) finance leases net of £22.6 million (2021: £15.6
million) cash.
2022 2021
£m £m
Revolving credit facility - GBP 55.3 56.5
Revolving credit facility - Euro 10.6 -
Term loan 25.1 -
Cash (22.6) (15.6)
Net debt before finance leases 68.4 40.9
Finance leases 10.0 9.3
Net debt 78.4 50.2
George Letham
Chief Financial Officer
13 March 2023
Consolidated income statement
for the year ended 31 December 2022
2022 2021
Note £'000 £'000
Continuing operations
Revenue 3 316,315 272,285
Cost of sales (excluding exceptional items) (235,194) (192,279)
Exceptional items 3 (1,054) -
Cost of sales (236,248) (192,279)
Gross profit 80,067 80,006
Selling and distribution expenses (40,800) (35,478)
Administrative expenses (excluding exceptional items) (12,811) (11,584)
Exceptional items 3 (755) (9,589)
Administrative expenses (13,566) (21,173)
Other operating income 4 373 3,204
Other operating expenses 5 (3,446) -
Operating profit 22,628 26,559
Finance income 50 141
Finance costs 6 (4,573) (10,379)
Monetary losses - net 21 (7,860) -
Profit before tax 10,245 16,321
Income tax expense 7 (5,936) (1,661)
Profit for the year 4,309 14,660
Note 2022 2021
Earnings per share
Basic 8 3.38p 11.51p
Diluted 8 3.38p 11.51p
Adjusted earnings per share
Basic 8 19.11p 16.92p
Diluted 8 19.11p 16.92p
Consolidated statement of comprehensive income
for the year ended 31 December 2022
2022 2021
Note £'000 £'000
Profit for the year 4,309 14,660
Other comprehensive income/(expense)
Other comprehensive income/(expense) that may be reclassified to profit or
loss in subsequent periods:
Net gain on monetary items forming part of net investment in foreign 1,691 5,192
operations and qualifying hedges of net investments in foreign operations
Income tax effect 7 (631) (1,235)
Exchange differences on translation of foreign operations (5,941) (26,072)
Net other comprehensive expense that may be reclassified to profit or loss in (4,881) (22,115)
subsequent periods
Other comprehensive expense not to be reclassified to profit or loss in
subsequent periods:
Remeasurement losses on defined benefit plans (1,932) (141)
Income tax effect 7 423 35
Net other comprehensive expense not to be reclassified to profit or loss in (1,509) (106)
subsequent periods
Other comprehensive expense for the year, net of tax (6,390) (22,221)
Total comprehensive expense for the year, net of tax attributable to owners of (2,081) (7,561)
the parent
Consolidated balance sheet
as at 31 December 2022
2022 2021
Note £'000 £'000
Assets
Non-current assets
Property, plant and equipment 10 91,604 53,694
Intangible assets 11 3,855 -
Trade and other receivables 15 317 10
Deferred tax assets 7 5,397 6,284
101,173 59,988
Current assets
Inventories 14 77,851 56,781
Trade and other receivables 15 60,497 46,731
Income tax receivable 235 104
Cash and cash equivalents 22,641 15,563
161,224 119,179
Total assets 262,397 179,167
Equity and liabilities
Equity
Share capital 18 127 127,353
Share premium 18 - 13,391
Merger reserve (114,469) (114,469)
Retained 227,849 57,814
earnings
Foreign currency reserve (62,058) (57,177)
Total equity 51,449 26,912
Non-current liabilities
Interest-bearing loans and borrowings 13 98,513 62,865
Deferred tax liabilities 7 2,611 126
Provisions 17 1,799 158
Net employee defined benefit liabilities 4,542 1,728
107,465 64,877
Current liabilities
Trade and other payables 16 99,214 83,883
Interest-bearing loans and borrowings 13 1,520 1,794
Income tax payable 1,829 1,522
Provisions 17 920 179
103,483 87,378
Total liabilities 210,948 152,255
Total equity and liabilities 262,397 179,167
Consolidated statement of changes in equity
for the year ended 31 December 2022
Attributable to the owners of the parent
Issued share capital Share premium Merger reserve Retained earnings Foreign currency Total
£'000 £'000 £'000 £'000 £'000 £'000
At 1 January 2021 65 198 940 43,260 (35,062) 9,401
Profit for the year - - - 14,660 - 14,660
Other comprehensive expense for the year - - - (106) (22,115) (22,221)
Total comprehensive income/(expense) - - - 14,554 (22,115) (7,561)
Shares issued on incorporation 50 - - - - 50
"C" share redemption (13) - - - - (13)
Noosa share reorganisation (50) 50 - - - -
Share for share exchange - old (2) (248) 250 - - -
Share for share exchange - new 115,659 - (115,659) - - -
Shares issued 11,644 13,391 - - - 25,035
At 31 December 2021 127,353 13,391 (114,469) 57,814 (57,177) 26,912
IAS 29 adjustment (note 21) - - - 8,327 - 8,327
At 31 December 2021 (restated) 127,353 13,391 (114,469) 66,141 (57,177) 35,239
Profit for the year - - - 4,309 - 4,309
Other comprehensive expense for the year - - - (1,509) (4,881) (6,390)
Total comprehensive income/(expense) - - - 2,800 (4,881) (2,081)
Capital reduction (127,226) (13,391) - 140,617 - -
IAS 29 adjustment to retained earnings in the year (note 21) - - - 22,982 - 22,982
Share-based payment charge - - - 250 - 250
Dividends paid (note 9) - - - (4,941) - (4,941)
At 31 December 2022 127 - (114,469) 227,849 (62,058) 51,449
Consolidated statement of cash flows
for the year ended 31 December 2022
2022 2021
Note £'000 £'000
Operating activities
Profit before tax 10,245 16,321
Adjustments to reconcile profit before tax to net cash flows:
- Depreciation of property, plant and equipment 10 9,700 7,409
- Amortisation of intangible assets 11 163 -
- Gain on disposal of property, plant and equipment (220) (213)
- Monetary loss IAS 29 21 7,860 -
- Monetary loss IAS 29 income statement element 3,530 -
- Share-based payments 250 -
- Finance income (50) (141)
- Finance costs 6 4,573 10,379
Working capital adjustments:
- Decrease/(increase) in trade and other receivables 1,632 (17,380)
- Decrease/(increase) in inventories 5,831 (31,695)
- (Decrease)/increase in trade and other payables (11,528) 40,291
- (Decrease)/increase in provisions (1,297) 158
- Decrease in other pension provisions (23) (59)
- Difference between pension charge and cash contributions (319) (22)
30,347 25,048
Income tax paid (3,801) (3,734)
Interest received 50 141
Net cash flows generated from operating activities 26,596 21,455
Investing activities
Proceeds from sale of property, plant and equipment and intangibles 316 487
Purchase of property, plant and equipment 10 (9,671) (8,646)
Purchase of intangible assets 11 (164) -
Business combination of subsidiaries, net of cash acquired 12 (20,484) -
Net cash flows used in investing activities (30,003) (8,159)
Financing activities
Transaction costs related to refinancing (429) (1,171)
Proceeds from external borrowings 34,122 56,500
Repayment of external borrowings (1,250) (11,001)
Repayment of borrowings acquired with subsidiary (10,746) -
Repayment of shareholder loans - (76,528)
Settlement of deferred consideration - (202)
Payment of lease liabilities (2,049) (1,666)
Share capital issued - 25,085
Share capital repaid - "C" shares - (13)
Interest paid (3,269) (779)
Dividends paid 9 (4,941) -
Net cash flows generated from/(used in) financing activities 11,438 (9,775)
Net increase in cash and cash equivalents 8,031 3,521
Net foreign exchange difference (953) (8,041)
Cash and cash equivalents at 1 January 15,563 20,083
Cash and cash equivalents at 31 December 22,641 15,563
Notes to the consolidated financial statements
for the year ended 31 December 2022
1 Basis of preparation
The results for the year ended 31 December 2022, including comparative
financial information, have been prepared in accordance with UK adopted
international accounting standards ("IFRS") in conformity with the
requirements of the Companies Act 2006 and the disclosure guidance and
transparency rules sourcebook of the United Kingdom's Financial Conduct
Authority.
Stelrad Group plc ("the Company") has adopted all IFRS in issue and effective
for the year.
While the financial information included in this preliminary announcement has
been prepared in accordance
with the recognition and measurement criteria of IFRS, this announcement does
not itself contain sufficient
information to comply with IFRS. The Company expects to publish full financial
statements that comply with
IFRS in March 2023.
The financial information set out above does not constitute the Company's
statutory accounts for the years
ended 31 December 2022 but is derived from those accounts. Statutory accounts
for 2022 will be delivered in due course. The auditors have reported on those
accounts: their report was unqualified, did not draw attention to any matters
by way of emphasis and did not contain statements under s498 (2) or (3) of the
Companies Act 2006.
Going concern
Having considered the Group's current trading, cash flow generation and debt
maturity and applying severe but plausible stress testing scenarios, the
Directors have concluded that it is appropriate to prepare the consolidated
financial statements on a going concern basis. Under a severe but plausible
downside scenario, the Group remains within its debt facilities and its
financial covenants until 31 December 2025. Based on this going concern
review, the Directors have concluded that, at the time of approving the
financial statements, the Group will be able to continue to operate within its
existing facilities and is well placed to manage its business risks
successfully.
The financial information presented in respect of the year ended 31 December
2022 has been prepared on a basis consistent with the financial information
presented for the year ended 31 December 2021 except for the application of
three new accounting policies which are:
Business combinations and goodwill (IFRS 3)
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the consideration transferred measured at
acquisition date. When the Group acquires a business, it assesses the
financial assets and liabilities assumed for appropriate classification and
designation in accordance with the contractual terms, economic circumstances
and pertinent conditions as at the acquisition date.
Goodwill is initially measured at cost, being the excess of the aggregate of
the consideration transferred over the fair values of net identifiable assets
acquired, liabilities assumed and contingent liabilities.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. For the purpose of impairment testing, goodwill acquired in
a business combination is, from the acquisition date, allocated to each of the
Group's cash-generating units that are expected to benefit from the
combination.
Where goodwill has been allocated to a cash-generating unit and part of the
operation within that unit is disposed of, the goodwill associated with the
disposed operation is included in the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill disposed in these
circumstances is measured based on the relative values of the disposed
operation and the portion of the cash-generating unit retained.
Financial reporting in hyperinflationary economies (IAS 29)
The financial statements of any subsidiary entity whose functional currency is
the currency of a hyperinflationary economy have been restated for changes in
the general purchasing power of that currency. The financial statements of
entities whose functional currency is the Turkish Lira have been restated from
1 January 2022 by applying a general price index. As a result, the financial
statements are stated in terms of the measuring unit current at the balance
sheet date. In summary:
· non-monetary assets and liabilities (other than those that are
carried at current amounts at the end of the reporting period, such as net
realisable value and fair value) have been restated for the change in
purchasing power caused by inflation from the date of initial recognition to
the balance sheet date;
· monetary assets and liabilities have not been restated;
· all items in the statement of comprehensive income have been
expressed in terms of the measuring unit current at the end of the reporting
period and have therefore been restated for inflation from the dates when the
items of income and expenses were initially recorded in the financial
statements; and
· a gain or loss on the net monetary position has been included in
profit or loss for the period from 1 January 2022 to the end of the reporting
period to reflect the impact of inflation on holding monetary assets and
liabilities in local currency.
The general price index used at the balance sheet date is the TUIK Index
provided by the Turkish Statistical Institute. The movement in the index
during the current reporting period was 64%.
One of the indicators of a hyperinflationary currency is cumulative inflation
over a three-year period in excess of 100%. This became the case for the
Turkish Lira at 31 March 2022 and, as such, the use of inflation accounting is
required in respect of Turkish Lira functional operations for periods ending
on or after 30 June 2022 using the published consumer price index.
In the process of applying IAS 29, management does not consider that it has
made any judgements which would have a significant effect on the amounts
recognised in the consolidated financial statements.
The financial statements of a subsidiary entity that has the functional
currency of a hyperinflationary economy are restated in accordance with IAS
29, as outlined above, before being included in the consolidated financial
statements. All amounts in the subsidiary's financial statements, including
all items in the statement of comprehensive income (which would usually be
translated at average exchange rate), have then been translated at the closing
exchange rate.
Comparative amounts presented previously in a stable currency have not been
restated.
The difference between the closing equity of the previous year and the opening
equity of the current year has been recognised as an IAS 29 adjustment in the
consolidated statement of changes in equity.
The combined effect of restating in accordance with IAS 29 and translation in
accordance with IAS 21 have been presented as a net change in other
comprehensive income.
Further details on the application of IAS 29 are presented in note 21.
Share-based payments (IFRS 2)
The fair value of equity-settled share options granted is recognised as an
employee expense with a corresponding increase in equity. The fair value is
measured as at the date the options are granted and the charge is only amended
if vesting does not take place due to non-market conditions not being met.
Various option pricing models are used according to the terms of the option
scheme under which the options were granted. The fair value is spread over the
period during which the employees become unconditionally entitled to the
options. At the balance sheet date, if it is expected that non-market
conditions will not be satisfied, the cumulative expense recognised in
relation to the relevant options is reversed.
With respect to share-based payments, a deferred tax asset is recognised on
the relevant tax base. The tax base is then compared to the cumulative
share-based payment expense recognised in the income statement. Deferred tax
arising on the excess of the tax base over the cumulative share-based payment
expense recognised in the income statement has been recognised directly in
equity outside the SOCI as share-based payments are considered to be
transactions with shareholders.
Where the company grants options over its own shares to employees of its
subsidiaries, it recognises, in its individual financial statements, an
increase in the cost of investment in its subsidiaries equivalent to the
equity-settled share-based payment charge recognised in its consolidated
financial statements, with the corresponding credit being recognised in
equity.
2 Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
Judgements
In the process of applying the Group's accounting policies, management has
made judgements which would have a significant effect on the amounts
recognised in the consolidated financial statements.
Business combinations
In July 2022, the Group acquired DL Radiators SpA, an Italian manufacturer of
heat emitters, for €28.3m.
As a result, an exercise was undertaken to measure the fair value of assets
and liabilities acquired as part of the business combination. This included
ascertaining a fair value for all inventory acquired as part of the business
combination. Management exercised judgement in determining whether any
additional intangible assets, such as customer relationships, should be
identified and the valuation assigned to these. Management engaged with
experts in order to assist with the valuation of certain tangible and
intangible assets, including customer relationships.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, which have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its assumptions
and estimates on parameters available when the consolidated financial
statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or circumstances
arising beyond the control of the Group. Such changes are reflected in the
assumptions when they occur.
Rebates
A proportion of rebates is paid to the end consumers of goods sold.
Uncertainties exist over provisions made as, until claims are made by end
consumers, the Group cannot be certain which consumers have purchased which
products. Due to this uncertainty it is therefore judgemental what contractual
rates, if any, will apply to goods sold.
Significant management judgement is required in order to assess the provision
required at the balance sheet date. Management is able to utilise market
information and historical/current data and trends in order to make an
appropriate provision.
A reasonably possible change in the estimates surrounding rebates would not
result in a material impact to the financial statements.
3 Segmental information
IFRS 8 Operating Segments requires operating segments to be determined by the
Group's internal reporting to the Chief Operating Decision Maker ("CODM"). The
CODM has been determined to be the Chief Executive Officer and Chief Financial
Officer, who receive information on the Group's revenue channels in key
geographical regions based on the Group's management and internal reporting
structure. The CODM assesses the performance of geographical segments based on
a measure of revenue and adjusted operating profit.
Adjusted operating profit is earnings before interest, tax, amortisation of
customer relationships, exceptional items, the impact of IAS 29 and foreign
exchange differences. IAS 29 was applied for the first time in the year ended
31 December 2022. The impact of IAS 29 has been removed in arriving at revenue
(pre-IAS 29) and adjusted operating profit, as management believe that the
pre-IAS 29 results give a more meaningful presentation of the Group's
underlying performance.
Revenue (pre-IAS 29) by geographical market 2022 2021
£'000 £'000
UK & Ireland 138,874 130,405
Europe 147,909 118,063
Turkey & International 25,335 23,817
Revenue (pre-IAS 29) 312,118 272,285
Impact of IAS 29 4,197 -
Total revenue 316,315 272,285
Adjusted operating profit by geographical market 2022 2021
£'000 £'000
UK & Ireland 22,716 21,589
Europe 13,877 12,929
Turkey & International 2,055 2,898
Central costs (4,668) (4,247)
Adjusted operating profit 33,980 33,169
Exceptional items (1,809) (9,589)
Amortisation of customer relationships (57) -
Foreign exchange differences (3,446) 2,979
Impact of IAS 29 (6,040) -
Operating profit 22,628 26,559
In the year ended 31 December 2022 the exceptional items within administrative
expenses relate to redundancy costs and acquisition costs, and the exceptional
item within cost of sales relates to the reversal of the IFRS 3 fair value
uplift on finished goods and work in progress.
The exceptional items in the year ended 31 December 2021 are costs relating to
professional advisers employed by the Group to explore the potential sale of
the Group and to subsequently execute the IPO. These costs are one-off in
nature and disclosing these costs as exceptional allows the true underlying
performance of the Group to be more easily reviewed.
The revenue information above is based on the locations of the customers. All
revenue arises from the sale of goods.
No customer has revenues in excess of 10% of revenue (2021: one).
Non-current operating assets 2022 2021
£'000 £'000
UK 18,823 20,237
The Netherlands 22,757 23,606
Turkey 26,854 8,362
Italy 22,686 -
Other 1,239 1,489
Total 92,359 53,694
4 Other operating income
2022 2021
£'000 £'000
Net gain on disposal of property, plant and equipment 220 213
Foreign currency gains - 2,575
Net gains on forward derivative contracts - 404
Sundry other income 153 12
373 3,204
5 Other operating expenses
2022 2021
£'000 £'000
Foreign currency losses 3,446 -
6 Finance costs
2022 2021
£'000 £'000
Interest on bank loans 2,564 370
Interest on ultimate shareholder loans - 9,117
Amortisation of loan issue costs 492 178
Interest expense on defined benefit liabilities 481 260
Finance charges payable on lease liabilities 124 127
Other finance charges 912 327
4,573 10,379
7 Income tax expense
The major components of income tax expense are as follows:
2022 2021
£'000 £'000
Consolidated income statement
Current income tax:
Current income tax charge 4,090 4,179
Adjustments in respect of current income tax charge of previous year (290) (68)
Deferred tax:
Relating to origination and reversal of temporary differences 2,802 (2,095)
Relating to change in tax rates (666) (355)
Income tax expense reported in the income statement 5,936 1,661
2022 2021
£'000 £'000
Consolidated statement of comprehensive income
Tax related to items recognised in other comprehensive income/(expense) during
the year:
Deferred tax on actuarial loss (423) (35)
Current tax on monetary items forming part of net investment and on hedges of 631 1,235
net investment
Income tax expensed to other comprehensive income 208 1,200
Reconciliation of tax expense and the accounting profit at the tax rate in the
United Kingdom of 19% (2021: 19%):
2022 2021
£'000 £'000
Profit before tax 10,245 16,321
Profit before tax multiplied by standard rate of corporation tax in the UK of 1,947 3,101
19% (2021: 19%):
Adjustments in respect of current income tax charge of previous year (290) (68)
Non-deductible expenses 147 2,715
Adjustments due to IAS 29 - non-tax deductible expenses 4,779 -
Differences arising due to tax losses (321) (3,052)
Other timing differences (161) (271)
Benefit of overseas investment incentives (1,042) (1,723)
Withholding tax on dividend income 527 -
Effect of changes in overseas tax rates (127) (102)
Effect of different overseas tax rates 1,016 1,314
Effect of changes in UK deferred tax rate (539) (253)
Total tax expense reported in the income statement 5,936 1,661
Deferred tax
Deferred tax relates to the following:
Consolidated balance sheet Consolidated income statement
2022 2021 2022 2021
£'000 £'000 £'000 £'000
Capital allowances 204 579 (730) (42)
Pension 806 414 10 134
Fixed asset fair value adjustments (1,711) (491) 116 (41)
Losses available for offsetting against future income 5,471 4,440 572 1,659
Other temporary differences (including IAS 29) (1,984) 1,216 (2,104) 740
Deferred tax (charge) / credit (2,136) 2,450
Net deferred tax assets 2,786 6,158
Reflected in the balance sheet as:
Deferred tax assets 5,397 6,284
Deferred tax liabilities (2,611) (126)
Deferred tax assets, net 2,786 6,158
Reconciliation of deferred tax assets, net
2022 2021
£'000 £'000
Opening balance as at 1 January 6,158 4,342
On business combination 315 -
IAS 29 opening balance sheet adjustment (2,284) -
Tax (charge)/income recognised in income statement (2,136) 2,450
Tax income recognised in other comprehensive income/(expense) 423 35
Exchange adjustment 310 (669)
Closing balance as at 31 December 2,786 6,158
The Group offsets tax assets and liabilities if it has a legally enforceable
right to set them off and they are levied by the same tax authority. Deferred
tax assets in respect of losses of £1,821,000 (2021: £581,000) have been
recognised in respect of two (2021: one) loss making subsidiary companies;
these are recognised on the grounds of future projected performance.
Deferred tax asset recognition
During the year ended 31 December 2021, the Group chose to recognise
previously unrecognised deferred tax assets in relation to tax losses. The
newly recognised losses are all post-April 2017 UK losses and the decision has
been taken to recognise the losses in the year because the new capital
structure of the Group post-IPO means that tax deductible interest will be
lower which, along with higher UK profitability, will lead to these losses
being utilised over a much shorter time frame.
During the year ended 31 December 2022, the Group chose to derecognise certain
tax losses, in particular those arising from Corporate Interest Restriction
("CIR") rules. An increase in debt to finance the acquisition of DL Radiators
SpA and an increase in interest rates means that these tax losses will take
longer to utilise and therefore an element has been derecognised.
The deferred tax assets have been analysed in detail at the year end and the
recognition of assets, in particular those in respect of tax losses, has been
scrutinised in detail with modelling undertaken to ensure that they are likely
to be utilised over a period of time where profitability can be estimated with
reasonable certainty.
Unrecognised deferred tax balances
2022 2021
£'000 £'000
Capital allowances 17 29
Losses available for offsetting against future income 2,810 1,904
2,827 1,933
The Group has tax losses which arose in the United Kingdom of £11,240,000
(2021: £8,653,000) that are available indefinitely for offsetting against
future taxable profits of the companies in which the losses arose. Deferred
tax assets have not been recognised in respect of these losses as they either
relate to CIR losses which cannot be reliably utilised in the short-term or
they arose prior to April 2017 in subsidiaries that are not profit making and
where there is no evidence of recoverability in the near future.
Changes in the corporate income tax rate
The UK corporation tax rate will rise to 25% from 1 April 2023.
8 Earnings per share
2022 2021
£'000 £'000
Net profit for the year attributable to owners of the parent 4,309 14,660
Exceptional items 1,809 9,589
Amortisation of customer relationships 57 -
Foreign exchange differences 3,446 (2,979)
Impact of IAS 29 13,906 -
Tax on exceptional items, foreign exchange differences, amortisation and IAS 806 282
29
Adjusted net profit for the year attributable to owners of the parent 24,333 21,552
2022 2021
Number Number
Basic weighted average number of shares in issue 127,352,555 127,352,555
Diluted weighted average number of shares in issue 127,352,555 127,352,555
Earnings per share
Basic earnings per share (pence per share) 3.38 11.51
Diluted earnings per share (pence per share) 3.38 11.51
Adjusted earnings per share
Basic earnings per share (pence per share) 19.11 16.92
Diluted earnings per share (pence per share) 19.11 16.92
9 Dividends paid
The Board is recommending a final dividend of 4.72 pence per share (2021: 0.96
pence per share), which, if approved, will mean a final dividend payment of
£6,011,000 (2021: £1,223,000).
The proposed final dividend is subject to approval by shareholders at the
Annual General Meeting and has not been included as a liability in these
consolidated financial statements.
2022 2021
£'000 £'000
Declared and paid during the period
Equity dividend on ordinary shares:
Final dividend for 2021: 0.96p per share (2020: nil p per share) 1,223 -
Interim dividend for 2022: 2.92p per share (2021: nil p per share) 3,718 -
4,941 -
2022 2021
£'000 £'000
Dividend proposed (not recognised as a liability)
Equity dividend on ordinary shares:
Final dividend for 2022: 4.72p per share (2021: 0.96p per share) 6,011 1,223
10 Property, plant and equipment
Freehold land and buildings Leasehold buildings Assets under construction Plant and equipment Fixtures and fittings Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 January 2021 23,729 11,179 3,412 52,961 7,014 98,295
Additions 138 546 6,379 1,724 863 9,650
Transfers 550 - (4,400) 3,521 329 -
Disposals - - (32) (163) (593) (788)
Exchange adjustment (2,589) (706) (591) (10,137) (694) (14,717)
At 31 December 2021 21,828 11,019 4,768 47,906 6,919 92,440
IAS 29 opening adjustment 7,282 - 31 14,517 1,005 22,835
At 1 January 2022 29,110 11,019 4,799 62,423 7,924 115,275
On business combination 10,608 127 974 4,321 1,498 17,528
Additions 228 427 7,773 1,577 1,276 11,281
Transfers 1,820 - (6,183) 4,068 295 -
Disposals - - - (94) (488) (582)
IAS 29 adjustment 5,528 - - 13,853 922 20,303
Exchange adjustment (821) 649 (94) (2,760) (193) (3,219)
At 31 December 2022 46,473 12,222 7,269 83,388 11,234 160,586
Accumulated depreciation and impairment
At 1 January 2021 9,008 2,132 - 21,058 5,073 37,271
Depreciation charge 850 1,151 - 4,688 720 7,409
Disposals - - - (90) (424) (514)
Exchange adjustment (556) (160) - (4,340) (364) (5,420)
At 31 December 2021 9,302 3,123 - 21,316 5,005 38,746
IAS 29 opening adjustment 1,845 - - 10,748 847 13,440
At 1 January 2022 11,147 3,123 - 32,064 5,852 52,186
Depreciation charge 1,289 1,330 - 5,785 1,296 9,700
Transfers - - - (101) 101 -
Disposals - - - (87) (457) (544)
IAS 29 adjustment 1,180 - - 7,502 575 9,257
Exchange adjustment (241) 230 - (1,399) (207) (1,617)
At 31 December 2022 13,375 4,683 - 43,764 7,160 68,982
Net book value
At 31 December 2022 33,098 7,539 7,269 39,624 4,074 91,604
At 31 December 2021 12,526 7,896 4,768 26,590 1,914 53,694
At 1 January 2021 14,721 9,047 3,412 31,903 1,941 61,024
The carrying value of right-of-use assets within property, plant and
equipment, by line item, at the year end is:
2022 2021
£'000 £'000
Leasehold buildings 7,466 7,814
Plant and equipment 896 911
Fixtures and fittings 1,672 638
10,034 9,363
Right-of-use asset additions within property, plant and equipment, by line
item, during the year are:
2022 2021
£'000 £'000
Leasehold buildings 418 543
Plant and equipment 153 79
Fixtures and fittings 1,039 382
1,610 1,004
Depreciation of right-of-use assets within property, plant and equipment, by
line item, during the year is:
2022 2021
£'000 £'000
Leasehold buildings 1,307 1,127
Plant and equipment 282 348
Fixtures and fittings 439 204
2,028 1,679
Land and buildings with a carrying amount of £21,547,000 (2021: £10,890,000)
are subject to a first charge to secure the Group's bank loan.
No borrowing costs have been capitalised since the assets have not met the
criteria for qualifying assets.
11 Intangible assets
Goodwill Customer relationships Technology and software costs Total
£'000 £'000 £'000 £'000
Cost
At 1 January 2022 - - - -
On business combination 1,222 1,761 713 3,696
Additions - - 164 164
Disposals - - (58) (58)
Exchange adjustment 72 104 46 222
At 31 December 2022 1,294 1,865 865 4,024
Accumulated amortisation and impairment
At 1 January 2022 - - - -
Depreciation charge - 57 106 163
Exchange adjustment - 2 4 6
At 31 December 2022 - 59 110 169
Net book value
At 31 December 2022 1,294 1,806 755 3,855
At 31 December 2021 - - - -
Included in technology and software costs are assets under construction of
£345,000 (2021: £nil), which are not amortised.
The remaining amortisation period of the customer relationships, being those
acquired upon the acquisition of DL Radiators SpA, is twelve years and seven
months.
Impairment assessment of goodwill
All of the goodwill recognised is allocated to a single cash-generating unit,
being the DL Radiators SpA division.
Given the proximity of the year end to the acquisition date of DL Radiators
SpA on 13 July 2022, the impairment assessment of goodwill has been calculated
using fair value at acquisition less costs of disposal. Using this approach
confirms that no impairment charge is required.
12 Business combinations
On 13 July 2022, Stelrad Radiator Holdings Limited, a wholly owned subsidiary
of the Group, acquired 100% of DL Radiators SpA, a radiator manufacturer
incorporated in Italy. The total consideration paid was €28,346,000.
The fair value of the net assets acquired were as follows:
Book value Fair value adjustments Fair value
£'000 £'000 £'000
Intangible assets 713 1,761 2,474
Property, plant and equipment 11,054 6,474 17,528
Inventory 24,499 1,034 25,533
Trade and other receivables 17,837 - 17,837
Trade and other payables (28,403) - (28,403)
Deferred taxation 1,853 (1,538) 315
Current taxation (49) - (49)
Cash and cash equivalents 3,490 - 3,490
Provisions (3,580) - (3,580)
Pension liabilities (1,033) - (1,033)
Loans and other borrowings (11,360) - (11,360)
Total identifiable net assets 15,021 7,731 22,752
Goodwill on the business combination 1,222
Discharged by:
Cash consideration 23,974
Goodwill of £1,222,000 reflects certain intangibles that cannot be
individually separated and reliably measured due to their nature. These items
include the value of expected synergies arising from the business combination
and the experience and skill of the acquired workforce. The fair value of the
customer relationships was identified and included in intangible assets.
The gross amount of trade and other receivables is £18,681,000. All of the
trade and other receivables are expected to be collected in full, other than
those that have been provided for.
Transaction costs relating to professional fees associated with the business
combination in the year ended 31 December 2022 were £251,000 and have been
expensed.
DL Radiators generated revenue of £31,541,000 and loss for the year of
£405,000 (adjusted profit for the year of £485,000) in the period from
acquisition to 31 December 2022 which are included in the consolidated
statement of comprehensive income for this reporting period. If the
combination had taken place at 1 January 2022, the Group's revenue would have
been £40,588,000 higher and the profit for the year from continuing
operations would have been £1,296,000 lower than reported.
13 Interest-bearing loans and borrowings
Effective interest rate Maturity 2022 2021
% £'000 £'000
Current interest-bearing loans and borrowings
Lease liabilities 1,520 1,794
1,520 1,794
Non-current interest-bearing loans and borrowings
Lease liabilities 8,516 7,524
Revolving credit facility - GBP SONIA + 2% 9 Nov 2024 55,250 56,500
Revolving credit facility - Euro Euribor + 2% 9 Nov 2024 10,647 -
Term loan Euribor + 2% 9 Nov 2024 25,150 -
Unamortised loan costs (1,050) (1,159)
98,513 62,865
Total interest-bearing loans and borrowings 100,033 64,659
On 10 November 2021, the Group refinanced its external debt as part of the IPO
and entered into an £80 million revolving credit facility ("RCF") jointly
financed by National Westminster Bank plc and Barclays PLC, which was first
drawn on 10 November 2021.
On 8 July 2022, the £80 million revolving credit facility was increased by
£20 million by means of an accordion option. The facility consists of a
£76.027 million revolving credit facility and a €28.346 million term loan
facility.
The RCF and term loan facilities are secured on the assets of certain
subsidiaries within the Group.
14 Inventories
2022 2021
£'000 £'000
Raw materials - cost 32,111 18,647
Work in progress - cost 3,530 1,293
Finished goods - lower of cost and net realisable value 38,974 34,181
Other consumables 3,236 2,660
77,851 56,781
The cost of inventories recognised as an expense in the year was £236,248,000
(2021: £192,279,000). The provision for the impairment of stocks increased in
the year, giving rise to a cost of £138,000 (2021: credit of £127,000). At
31 December 2022, the provision for the impairment of stocks was £2,640,000
(2021: £1,534,000).
15 Trade and other receivables
2022 2021
£'000 £'000
Current
Trade receivables 55,739 42,749
Other receivables 4,197 3,314
Prepayments 561 668
60,497 46,731
Non-current
Trade receivables - 10
Other receivables 317 -
317 10
The table below sets out the movements in the allowance for expected credit
losses of trade receivables:
2022 2021
£'000 £'000
At 1 January 204 130
On business combination 844 -
Charge for the year - 108
Utilised (223) (23)
Unused amounts reversed (122) -
Exchange adjustment 60 (11)
At 31 December 763 204
As at 31 December, the details of the provision matrix used to calculate
provisions for trade receivables (with the ageing gross of impairment) are as
follows:
30-90 days
Total Current <30 days >90 days
£'000 £'000 £'000 £'000 £'000
2022
Gross carrying amount 56,502 49,403 3,217 3,056 826
Expected credit loss rate (%) 1 - 1 3 77
Expected credit loss 763 - 32 92 639
2021
Gross carrying amount 42,963 38,014 1,464 2,645 840
Expected credit loss rate (%) - - 1 4 10
Expected credit loss 204 - 15 106 83
16 Trade and other payables
2022 2021
£'000 £'000
Current
Trade payables 73,903 57,751
Other payables and accruals 18,860 22,198
Other taxes and social security 6,045 3,858
Interest payable 406 76
99,214 83,883
17 Provisions
Warranty Compen-sation fund Restructuring Unused vacation Total
£'000 £'000 £'000 £'000 £'000
At 1 January 2021 50 - - 345 395
Arising during the year 30 - - 397 427
Utilised (28) - - (223) (251)
Unused amounts reversed - - - (19) (19)
Exchange adjustment (17) - - (198) (215)
At 31 December 2021 35 - - 302 337
On business combination 587 1,125 1,868 - 3,580
Arising during the year 218 12 - 537 767
Utilised (274) (5) (1,184) (557) (2,020)
Unused amounts reversed - - (27) (16) (43)
Exchange adjustment 27 67 62 (58) 98
At 31 December 2022 593 1,199 719 208 2,719
Current 162 - 719 39 920
Non-current 431 1,199 - 169 1,799
Compensation fund
The supplementary customer compensation fund is made in accordance with
European legislation to provide for potential severance payments to agents.
Restructuring
Restructuring provisions relate to the remaining costs still to be settled in
respect of the closure of a manufacturing site in Italy. The site was closed
prior to the acquisition of DL Radiators and the costs were provided for at
the point of acquisition.
Unused vacation
A provision is recognised in respect of an unused vacation pay liability due
to certain employees in Turkey. The timing of the provision is dependent on
the rate at which employees take additional vacation.
18 Share capital and reserves
2022 2022 2021 2021
Number £ Number £
Authorised, called up and fully paid
Ordinary shares of £0.001 each 127,352,555 127,353 - -
Ordinary shares of £1 each - - 127,352,555 127,352,555
127,353 127,352,555
On 25 January 2022, a capital reduction application was approved by the
courts, reducing the value of ordinary shares in issue from £1 to £0.001.
Under the same application the courts approved the reduction of the Company's
share premium account in full. The reduction of capital and share premium will
be transferred to accumulated losses.
During the year ended 31 December 2021, the Company carried out a
reorganisation of its share capital to facilitate a listing to the premium
segment of the Official List of the Financial Conduct Authority and to trade
on the London Stock Exchange Main Market for listed securities. This is
described below in the detail on transactions in the year.
The movements in the ordinary share capital during the year ended 31 December
2021 and 31 December 2022 were as follows:
Shares Share capital
Number £
At 1 January 2021 263,000 65,000
Issued on incorporation of Stelrad Group plc 50,000 50,000
Redemption of ordinary "C" shares (13,000) (13,000)
Noosa Holdings Jersey Limited share reorganisation - (49,500)
Share for share exchange:
- Noosa Holdings Jersey Limited (250,000) (2,500)
- Stelrad Group plc 115,658,370 115,658,370
Shares issued 11,644,185 11,644,185
At 31 December 2021 127,352,555 127,352,555
Capital reduction - (127,225,202)
At 31 December 2022 127,352,555 127,353
Transactions in the year ended 31 December 2022
On 25 January 2022, a capital reduction application was approved by the
courts, reducing the value of ordinary shares in issue from £1 to £0.001.
Under the same application the courts approved the reduction of the Company's
share premium account in full. The reduction of share capital and share
premium will be transferred to retained earnings.
Transactions in the year ended 31 December 2021
On incorporation on 8 October 2021, Stelrad Group plc (the "Company") issued
50,000 ordinary shares with a nominal value of £1 each for a total cash
consideration of £50,000. This was paid up in full on 10 November 2021.
On 15 October 2021, Noosa Holdings Jersey Limited redeemed its 13,000 ordinary
"C" shares at par value.
On 10 November 2021, the following transactions arose:
· Noosa Holdings Jersey Limited redesignated its 200,000
ordinary "A" shares as 200,000 ordinary shares of £0.01 each.
· Noosa Holdings Jersey Limited split its 50,000 ordinary "B"
shares as 50,000 ordinary shares of £0.01 each and 50,000 deferred redeemable
shares of £0.99 each. The 50,000 deferred redeemable shares of £0.99 each
were immediately redeemed with the credit applied to share premium.
· The Company acquired 100% of the ordinary shares of Noosa
Holdings Jersey Limited by way of a share for share exchange by issuing
115,658,370 ordinary shares of £1 each to the shareholders of Noosa Holdings
Jersey Limited.
· The Company issued an additional 11,644,185 ordinary shares
of £1 each at a value of £2.15, giving rise to a share premium of
£13,391,000.
19 Commitments and contingencies
Commitments
Amounts contracted for but not provided in the financial statements amounted
to £433,000 (2021: £1,389,000) for the Group. All amounts relate to
property, plant and equipment.
Contingent liabilities
Termo Teknik Ticaret ve Sanayi A.S. has issued letters of guarantee and
letters of credit to its steel suppliers amounting to $22,685,000 (2021:
$30,089,000) and $11,175,000 (2021: $40,518,000) respectively. Termo Teknik
Ticaret ve Sanayi A.S. has also issued letters of guarantee denominated in
Turkish Lira totalling TL13,220,000 (2021: TL9,497,000).
The Group enters into various forward currency contracts to manage the risk of
foreign currency exposures on certain purchases and sales. The total amount of
unsettled forward contracts as at 31 December 2022 is £nil (2021: £nil).
The fair value of the unsettled forward contracts held at the balance sheet
date, determined by reference to their market values, is a liability of £nil
(2021: £nil).
As part of the £100 million loan facility, entered into in November 2021, and
amended and restated on 8 July 2022, the Group is party to a cross-collateral
agreement secured on specific assets of certain Group companies. No liability
is expected to arise from the agreement.
Under an unlimited multilateral guarantee, the Company, in common with certain
fellow subsidiary undertakings in the UK, has jointly and severally guaranteed
the obligations falling due under the Company's net overdraft facilities. No
liability is expected to arise from this arrangement.
20 Related party disclosures
Prior to admission to the London Stock Exchange on 10 November 2021, the
ultimate controlling party was The Bregal Fund III LP.
The ultimate shareholder loans bore interest at 15% and consisted of two
amounts: i) an amount funded by the ultimate controlling party of the Group,
The Bregal Fund III LP; and ii) an amount funded by certain managers of the
Company.
The value of the loans at 31 December 2021 was £nil, due to repayment of the
shareholder loans and all accrued interest totalling £76,528,000 (The Bregal
Fund III LLP: £64,632,000; managers: £11,896,000) as part of the Group
reorganisation on 10 November 2021.
At 31 December 2021, the Group owed deferred consideration to shareholders
related to the sale of a business of £nil as the deferred consideration to
shareholders was repaid on 15 October 2021.
During 2021, interest was accrued totalling £9,117,000 (The Bregal Fund III
LP: £7,700,000; managers: £1,417,000).
During 2021, under the ownership agreement, before the Group reorganisation,
the Group was charged a monitoring fee of £200,000 per annum by Bregal
Capital LLP, which was the management company of the ultimate controlling
party of the Group, The Bregal Fund III LP.
During the year, the Group spent £6,000 (2021: £9,000) on purchases from
Polypal Netherlands BV (whose ultimate controlling party is also The Bregal
Fund III LP); the balance outstanding at the year end was £nil (2021: £nil).
The key management personnel are considered to be the Executive Directors of
the Group. The following table highlights the remuneration that is recorded in
the income statement in respect of these personnel, including Company social
security costs:
2022 2021
£'000 £'000
Short-term employment benefits 1,466 2,175
21 IAS 29 Financial Reporting in Hyperinflationary Economies
The Turkish economy was designated as hyperinflationary from 19 April 2022. As
a result, application of IAS 29 Financial Reporting in Hyperinflationary
Economies has been applied to all Stelrad Group plc entities whose functional
currency is the Turkish Lira. IAS 29 requires that adjustments are applicable
from the start of the relevant entity's reporting period. For Stelrad Group
plc that is from 1 January 2022. The application of IAS 29 includes:
· adjustment of historical cost non-monetary assets and liabilities
for the change in purchasing power caused by inflation from the date of
initial recognition to the balance sheet date;
· adjustment of the income statement for inflation during the
reporting period;
· the income statement is translated at the period-end foreign
exchange rate instead of an average rate; and
· adjustment of the income statement to reflect the impact of
inflation and exchange rate movement on holding monetary assets and
liabilities in local currency.
Reconciliation of opening equity at 1 January 2022
The differences between the closing equity of the prior year at 31 December
2021 and the opening equity of the current year at 1 January 2022 have been
recognised as an IAS 29 adjustment in the consolidated statement of changes in
equity.
£'000
Retained earnings at 31 December 2021 57,814
IAS 29 adjustment 8,327
Retained earnings at 31 December 2021 (restated) 66,141
The IAS 29 adjustment at 1 January 2022 is made up as follows:
At 1 January 2022
£'000
Property, plant and equipment 9,395
Inventories 1,183
Prepayments 33
Deferred tax liability (2,284)
IAS 29 adjustment 8,327
Statement of changes in equity for the year ended 31 December 2022
The impact of the restatement of the opening reserves of entities whose
functional currency is the Turkish Lira was £22,982,000; this is credited to
the statement of changes in equity in the period and subsequently reversed
through the "monetary losses - net" line in the income statement.
Year ended 31 December 2022
£'000
Retained earnings credit 22,982
Monetary losses - net for the year ended 31 December 2022
The monetary loss for the year ended 31 December 2022 is made up as follows:
Year ended 31 December 2022
£'000
Retained earnings (22,982)
Property, plant and equipment 11,046
Inventories 234
Prepayments (16)
Income statement 3,858
Monetary losses - net (7,860)
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