REG - Strip Tinning Hldgs - Final Results For Year Ended 31 December 2024
13/06/2025 07:00
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RNS Number : 6789M Strip Tinning Holdings PLC 13 June 2025
13 June 2025
Strip Tinning Holdings plc
("Strip Tinning" or the "Company")
Annual Results for year ended 31 December 2024
Financial performance in line with market expectations, with operational
enhancements and strong sales order book leaving the Company well-positioned
for accelerated growth
Strip Tinning Holdings plc (AIM: STG), a leading supplier of specialist
connection systems to the automotive sector, is pleased to announce its full
year results for the year ended 31 December 2024.
FY24 Financial highlights:
· Total lifetime sales value of all nominations increased to
£105.4m (FY23: £34.1m)
· Total revenues of £9.0m (FY23: £10.8m).
· Battery Technologies division product sales of £1.0m (FY23:
£1.1m).
· Glazing division product sales of £8.0m (FY23: £9.7m).
· Adjusted( 1 ) EBITDA of (£1.9m) (FY 23: Profit of £0.1m).
· £2.3m of cash used in operating activities (FY2023: £1.0m
inflow) with cash of £0.5m as of 31 December 2024 (2023: £0.3m).
· Basic EPS( 2 ) of (25.9)p versus FY23 (5.0)p
FY24 Operational highlights:
· Battery Technologies division well-positioned for growth
acceleration, with an increasing order book and strong pipeline, with
divisional revenue for FY25 expected to be more than 2.5 times FY24.
· Glazing division delivering improved margins and growth from
valuable new production supply nominations.
· Glazing division remains cash generative and able to fund its own
growth plans.
· Gross Margins improved from 30.1% in FY2023 to 33.1% in 2024.
· Maintained a strong commitment to responsible business practices
with an A grade ESG rating for the fourth year running.
Board Changes:
· With the Executive team firmly established, Adam Robson has today
stepped down as Executive Chairman and retired from the Board.
· Paul George has become Non-Executive Chairman with immediate
effect.
Outlook:
· The Company's key focus is working to deliver the new Cell
Contact System parts for its Zoox BT nomination, with significant sales from
pre-production parts in 2025/26, followed by start of production and volume
ramp up anticipated in Q2 2026.
· The Board has continued to focus on operational actions to
further reduce costs and ongoing working capital requirements.
· To support working capital requirements as new projects ramp up
towards the end of 2026, the Group will continue to seek new funding from
additional debt sources (notably under the Government Export Credit Guarantee
scheme), grants (for which we have two applications in hand) and potentially
from investors and/or strategic partners.
· The Board remains confident of meeting market expectations for
Adjusted EBITDA in FY25, to be EBITDA positive from FY26 onwards and cash
generative from FY27.
Adam Robson, Executive Chair of Strip Tinning, commented: "2024 was a year
of exceptional success at winning nominations for future years' revenues. We
started the year holding nominations with a total lifetime value of £34.1
million and over the year this has increased to £105.4 million."
"We believe that 2025 will be a year of delivery for Strip Tinning, as the
business works to deliver the new nominations over 2025 and 2026. We will
continue the investment needed to maximise our success in converting the
strong Battery Technologies and Glazing sales nominations we have secured. I
have utmost confidence in the executive team to deliver on the company's
growth plans and look forward to watching the business develop from afar"
Enquiries:
Strip Tinning Holdings plc
Mark Perrins, Chief Executive
Officer
Kevin Edwards, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Sole Broker)
+44 (0) 20 7496 3000
Rick Thompson
James Fischer
(1)(]) Adjusted earnings are stated before net finance income, tax,
amortisation and depreciation and non-recurring items.
( 2 ) Based on weighted average number of shares in the period
Chairman's statement for the year ended 31 December 2024
2024 was a year of exceptional success at winning nominations for future
years' revenues. We started the year holding nominations with a total
lifetime value of £34.1 million and over the year this has increased to
£105.4 million. This progress has been made in both the Battery
Technologies Division (now totalling £57.0m) and the Glazing Connectors
Division (now totalling £48.4m) and has laid the foundations for a period of
significant growth ahead.
These successes have come from the hard work, creativity and commitment of our
employees and
I would like to thank and congratulate all the employees of the group. We have
been investing heavily in growing and developing our team in the Battery
Technology division, our internal processes and know-how. Together they have
earned the trust of our customers to deliver these critical new product
developments for them. Our team has also continued to improve the business in
every way. Our quality of service has never been better and our customers
continue to reward us with a steady stream of new business opportunities and
production nominations.
I would also like to thank our many shareholders, including our Directors and
senior managers, who have made this growth possible with their participation
in our successful 2024 fundraise. We were delighted to have raised gross
proceeds of £5.1m in January 2024. The projects we have won has meant that
funding for further growth is difficult. We have addressed this issue by
limiting our pace of growth and implementing costs reductions and capex
reductions worth over £3.5m in 2025 and 2026 whilst ensuring we deliver on
the new projects we have. We have reduced headcount in glazing and reduced
other costs where possible. Cash is expected to be constrained over the next
12 months becoming particularly so in mid 2026. We have included a number of
assumptions and contingencies in our financial models and these, along with a
number of mitigating actions available to the Group detailed below in the
Directors report. To support working capital requirements as our new projects
ramp up towards the end of 2026, we will continue to seek new funding from
additional debt sources (notably under the Government Export Credit Guarantee
scheme), grants (for which we have two applications in hand) and potentially
from investors and/or strategic partners.
Following the above actions, we have emerged as a leaner, higher performing
organisation, with the right team to deliver on our significant growth plans.
Our people, capacity, and financial resources are in place to launch the new
products. As such, we look forward to delivering on the new projects we have
won and seeing our sales begin to grow.
The experience of our Board has proven to be of immense value during the year,
helping us to maintain our focus on operational excellence and targeted
markets, as well as positioning us for the growth ahead. In order to maintain
the positive momentum across the business, the Board has met at-least monthly
throughout the year, and so I would like to thank the Board members for the
commitment they have shown, including their willingness to invest in the
business both as equity investors and through lower cash remuneration in 2025
and 2026.
On a personal note I would like to announce my retirement as Strip Tinning
Chairman. It was always my intention to retire in the summer of 2025 and now
that Mark is fully established as CEO it is an appropriate opportunity to step
down. Paul George will take over the role as Non-Executive Chairman with
immediate effect now that the 2024 accounts have been completed. As a result I
will not be seeking reelection at the upcoming AGM.
Adam Robson
Executive Chair
Chief Executive Officer's statement for the year ended 31 December 2024
I am proud of the progress made by the business during 2024. Thanks to
leadership, passion, rigour and operational execution we were able to achieve
our very considerable sales nomination successes and meet the market
expectations set out in July 2024. I am convinced our exceptional team
strongly position us for a successful 2025 and beyond.
People as a differentiator
We recognise that our clients value our know-how and technical capability when
nearshoring electronic products from Asia. We have invested strongly in our
teams during 2024 adding a number of engineers and managers to support the
forecast business growth.
At Strip Tinning ensuring all our employees go home safely every day is
fundamental. I am pleased to say that our efforts to improve health and safety
have led to a 30% reduction in accidents during 2024 vs. 2023, all of which
were minor accidents.
In January 2024 we introduced a new SAP ERP system to support our employees
with the tools that will aid their efficiency and provide enhanced customer
service.
Financial Performance
In 2024, we continued the Group's gross margin improvements made in 2023, with
an increase to 33.1% from 30.6% in 2023 and 4.88% in 2022. This was through a
combination of operational efficiencies and the continued elimination of low
profitability products. 2024 was a challenging year for the automotive sector
with S&P Global reporting a 5.2% volume decline in European light vehicle
production. With 52% of our 2024 sales coming from Europe, 38% R.O.W and 10%
from the UK, these gross margin improvements demonstrate the strong management
focus on lowering the breakeven point despite falling sales. Sales declined by
£1.8m from £10.8m in 2023 to £9.0m in 2024, mainly driven by the strategic
exit on loss making products.
I am pleased that we met the sales and EBITDA outcomes for the year in line
with the market expectations of July 2024.
This pleasing outcome has been despite significant headwinds in both the
Group's end markets and in the wider economy. The Group has undertaken several
actions and operational improvements to mitigate these headwinds, including
implementing a simplified site strategy, increasing out-sourcing and improving
its purchasing both in terms of capital expenditure and materials. The
operational improvements implemented by the Strip Tinning management team have
led to a consistent improvement in productivity and gross margin since the
Group's IPO, with further planned improvements expected in 2025. It has also
allowed us to absorb the increased National Insurance and Living Wage costs
incurred in 2025 without any revision to our 2025 EBITDA expectation. The
Group continues to tightly manage its cash headroom to ensure it has enough
liquidity to deliver its current and new programmes of work.
Business Growth
2024 was a year of considerable progress for Strip Tinning with both the
Glazing and Battery Technology ("BT") divisions winning significant new
nominations. Across the two divisions, the Group won three major nominations
in 2024 with a combined lifetime sales value of £75.4 million. The total
value of all nominations held by the Group is now £105.4 million.
As highlighted in the Group's announcement on 11 December 2024, the value of
the Group's contracted nominations has increased by, in aggregate, £11.7
million (12.2%) from the values as at 30 June 2024. This was due to Strip
Tinning engineers working with its customers to respond to requests for added
functionality into product designs which have enhanced the value of the
Chief Executive Officer's statement (continued)
products. As such, over 85% of the Group's sales expectations for 2025,
2026, and over 80% in 2027, are now contracted. Consequently, the Group's
sales are expected to double from the end of 2024 to the end of 2027 and given
the Group's strong sales pipeline and market positioning.
Glazing
Growth in Strip Tinning's Glazing division is expected to be driven by new
technology products that add complexity to Glazing connectors. The Group's
strong existing relationships with Tier 1 customers and its pipeline of new
customers presents many opportunities in these new growth areas. The Group
will continue to look to reduce simple low margin connectors as appropriate
over 2025.
In April 2024, the Group announced two significant "smart glass" PDLC (Polymer
Dispersed Liquid Crystal) connector nominations, with a combined value of
£18.6 million and scheduled for start of production ("SoP") in Q3 2025 and Q3
2026 respectively. These projects are progressing well and remain on schedule.
Battery Technology (BT)
Growth in the BT division is anticipated to be delivered in two stages with
the Group's initial focus on the successful launch of its major nomination for
Cell Contact Systems ("CCS") and then targeting further nominations for
projects with SoP's starting from 2026 onwards from its five key strategic
customers. A Compounded Annual Growth rate (CAGR) in sales of over 130% is
anticipated between 2024 and 2027 in the BT division with the Group's major
CCS nomination contributing the majority of this growth.
In September 2024 I had the pleasure to visit Zoox who is the end customer of
the major CCS nomination. Zoox autonomous taxi has been approved for use on
public roads in three U.S. cities and has a test fleet operating in further US
Cities. As Zoox will own all its vehicles, they will have no dependence on
external customers for their sales. Zoox launched in 2014 and was acquired in
2020 by Amazon that generated free cash flows of $48 billion in the last
twelve months and thus has significant resources to invest in the venture.
Strip Tinning began working on the project in 2021 with Fortescue Zero
(formerly WAE), and in 2024 manufacturing of the battery back was awarded to a
€16 billion automotive Tier 1, with Strip Tinning subsequently being
nominated by that Tier 1 in June 2024. The lifetime value of the nomination
has increased from £43 million to £57 million due to scope changes adding
more content into the product.
With respect to the SoP and ramp-up profile, the customer is taking a measured
approach to their roll out. On this basis, in 2025 Strip Tinning has taken a
similarly prudent approach to its own volume ramp up numbers and anticipate
volume production beginning in the first half of 2026 and then ramping up in
late 2026 which is when further working capital will be required. Strip
Tinning believes that the SoP dates are achievable and has confidence in being
able to achieve the volume ramp-up targets.
Beyond the Group's major CCS nominations, the Group's pipeline of new opportunities in the BT division remains strong, underpinned by a growing market addressable by our product offerings. The Group remains focussed on the mid-market for CCS which is projected to double in size every five years. The Group believes it can take significant market share in the mid-market, estimated at approximately 7% in 2027, with sales focussed on new programmes with its five strategic customers.
We continued to modernise our manufacturing facilities through lean principles and significant progress has been made with visual management improvements. Moreover, standardised work is now at a much more detailed level and the addition of error proofing controls had a huge positive impact on our shipping labels accuracy.
We continued to invest in expanding our battery technology capacity and
capability. For example, we added a £0.6 million laser welding machine which
brings in-house the process of welding thin copper tabs on the Flexible
Printer Circuit (FPC) to plated busbars within the Cell Contact System (CCS).
Chief Executive Officer's statement (continued)
ESG
We were pleased to receive confirmation from Integrum that we have maintained
our best-in-class A grade ESG rating for the third year running. We are proud
of our growing contribution to the world's electrification drive and advancing
our ESG programmes remains a key focus for the Group.
Cash Management
Cash is tightly controlled in the Group. We work hard to keep our customers
within their terms. Our new SAP system is used to control business costs and
ensure there is sign off and approval for all expenditure. The Group controls
its purchasing to ensure the best cost levels are achieved on all raw
materials. Stock is well managed to ensure it is kept to optimal levels so we
do not hold more stock than required to conserve cash. The Group is going
through a time of high investment in its new projects which has put additional
strain on the Group's cash but the Group has activated its CID facility to
help manage cash flow. We are actively working to reduce our costs and are
seeking further financing.
Outlook
In order to galvanise the whole business around our key priorities we have
launched X-2025 which is all about laser focus on executing the three major
new projects won during 2024.
Having secured a high proportion of our forecasted sales for the forthcoming
years means management will be very selective during 2025 with the projects we
commit resources to and thus ensuring we select high quality customer
projects. The pipeline of new business in both the Glazing and BT division is
very strong. In BT we are working with five strategic customers, supplying
them samples and supporting their product development. With the trend of OEMs
adding more functionality to vehicles we are seeing many enquires for our PDLC
glazing connectors. In the short-term, sales for 2025 are expected to be
slightly lower than previously expected as we are experiencing a decline in
orders. However, thanks to the cost cutting already implemented, this has
not led us to change our EBITDA expectations for 2025 and indeed our
expectations for 2026 have improved,
The Board expects the Group to meet market expectations for Adjusted EBITDA in
FY25, to be EBITDA positive from FY26 onwards and cash generative from FY27.Of
course, the uncertainties caused by tariffs do overshadow the forecast as the
ultimate outcome and effect of these on the world economy remains difficult to
predict.
On behalf of the Board I would like to thank Adam for all his hard work and
focus over the last three years. We wish him well in his retirement.
Mark Perrins
Chief Executive Officer
Consolidated statement of comprehensive income
for the year ended 31 December 2024
Note 2024 2023
£'000 £'000
Revenue 3 9,027 10,826
Cost of sales (6,038) (7,517)
Gross profit 2,989 3,309
Other operating income 4 230 1,364
Administrative expenses 5 (6,616) (6,075)
Operating loss 5 (3,397) (1,402)
Derivative fair value loss 18 (905) -
Finance income 8 71 -
Finance expense 8 (655) (331)
Loss before taxation (4,886) (1,733)
Taxation 9 186 962
Loss and total comprehensive expense for the financial year (4,700) (771)
Basic and diluted loss per share (pence) 10 (25.9) (5.0)
All amounts relate to continuing operations.
There is no other comprehensive income in either the current or prior year.
Consolidated statement of financial position as at 31 December 2024
Note 31 December 2024 31
December
2023
£'000 £'000
Assets
Non current assets
Intangible assets 11 2,230 1,643
Right-of-use assets 12 873 1,090
Property, plant and equipment 13 3,410 3,233
6,513 5,966
Current assets
Inventories 15 1,310 1,287
Trade and other receivables 16 2,143 2,685
Tax recoverable 1,177 991
Cash at bank and in hand 512 343
5,142 5,306
Total assets 11,655 11,272
Liabilities
Current liabilities
Trade and other payables 17 (1,630) (2,197)
Borrowings 18 (652) (973)
Lease liabilities 19 (164) (201)
(2,446) (3,371)
Non current liabilities
Accruals and deferred income 17 - (11)
Borrowings 18 (4,494) (798)
Derivative fair value liability 18 (1,506) -
Lease liabilities 19 (772) (936)
Provisions 23 (251) (360)
(7,023) updated (2,105)
Total liabilities (9,469) (5,476)
Net assets 2,186 5,796
Equity
Called up share capital 25 182 154
Share premium account 25 7,931 6,966
Merger reserve 25 (100) (100)
5
Other reserve 25 (3) (3)
Accumulated loss (5,824) (1,221)
Total equity 2,186 5,796
Company statement of financial position as at 31 December 2024
Note 31 December 2024 31 December 2023
£'000 £'000
Assets
Non current assets
Investments 14 4,080 3,983
Current assets
Trade and other receivables 16 9,598 5,579
Cash at bank and in hand - -
9,598 5,579
Total assets 13,678 9,562
Liabilities
Current liabilities
Trade and other payables 17 (107) (199)
Non current liabilities
Borrowings 18 (3,536) -
Derivative fair value liability 18 (1,506) -
(5,042) -
Total liabilities (5,149) (199)
Net assets 8,529 9,363
Equity
Called up share capital 25 182 154
Share premium account 25 7,931 6,966
Merger reserve 25 3,645 3,645
Other reserve 25 (3) (3)
Accumulated loss (3,226) (1,399)
Total equity 8,529 9,363
Consolidated statement of changes in equity for the year ended 31 December 2024
Share premium account Merger reserve Other reserve
Called up share capital £'000 Accumulated loss Total
£'000 £'000 £'000 £'000 Equity
£'000
Balance as at 1 January 2023 154 6,966 (100) (3) (592) 6,425
Loss and total comprehensive expense for the financial year - - - - (771) (771)
Share based payment (note 24, 26) - - - - 142 142
Total contributions by owners - - - - 142 142
Balance as at 31 December 2023 154 6,966 (100) (3) (1,221) 5,796
Loss and total comprehensive expense for the financial year - - - - (4,700) (4,700)
Share based payment (note 26) - - - - 97 97
Issue of share capital (note 25) 28 965 - - - 993
Total contributions by owners 28 965 - - 97 1,090
Balance as at 31 December 2024 182 7,931 (100) (3) (5,824) 2,186
Company statement of changes in equity for the year ended 31 December 2024
Share premium account Merger reserve Other reserve Accumulated loss Total equity
Called up share capital £'000 £'000 £'000
£'000 £'000 £'000
Balance as at 1 January 2023 154 6,966 3,645 (3) (783) 9,979
Loss and total comprehensive expense for the financial year - - - - (758) (758)
Share based payment (note 24, 26) - - - - 142 142
Balance as at 31 December 2023 154 6,966 3,645 (3) (1,399) 9,363
Loss and total comprehensive expense for the financial year - - - - (1,924) (1,924)
Share based payment (note 26) - - - - 97 97
Issue of share capital (note 25) 28 965 - - - 993
Total contributions by owners 28 965 - - 97 1,090
Balance as at 31 December 2024 182 7,931 3,645 (3) (3,226) 8,529
Consolidated cash flow statement for the year ended 31 December 2024
2024 2023
£'000 £'000
Cash flow from operating activities
Loss for the financial year (4,700) (771)
Adjustment for:
Depreciation of property, plant and equipment 13 739 828
Depreciation of right-of-use assets 12 217 225
Amortisation of intangible assets 11 178 173
Derivative fair value loss 18 905 -
Amortisation of government grants (26) (88)
Share based payment 25 97 142
Finance costs 8 584 331
Taxation credit 9 (186) (962)
Changes in working capital:
(Increase)/decrease in inventories 15 (23) 561
Decrease in trade and other receivables 16 542 696
Decrease in trade and other payables 17 (673) (665)
Cash (used in)/generated from operations (2,346) 470
Income tax received relating to R&D tax credits - 530
Net cash (used in)/generated from operating activities (2,346) 1,000
Cash flows from investing activities
Interest received 71 -
Purchase of property, plant and equipment 13 (916) (1,113)
Proceeds on disposal of tangible fixed assets - 2
Purchase of intangible assets 11 (765) (539)
Net cash used in investing activities (1,610) (1,650)
Cash flows from financing activities
Issue of share capital 25 1,106 -
Share issue costs paid 25 (113) -
Proceeds of convertible loan note received 18 4,000 -
Loan note issue costs paid 18 (301) -
Interest paid 20 (205) (319)
Payment of lease liabilities 20 (201) (204)
Invoice discounting finance (repaid)/advanced 20 (136) 492
Hire purchase finance received 20 475 297
Loan repayments 20 (74) (53)
Repayment of capital element of hire purchase contracts 20 (426) (510)
Net cash generated from/(used in) financing activities 4,125 (297)
Net increase/(decrease) in cash and cash equivalents 169 (947)
Cash and cash equivalents at the beginning of the year 343 1,290
Foreign exchange movements -
Cash and cash equivalents at the end of the year (all cash at bank and in 512 343
hand)
Notes to the financial statements
for the year ended 31 December 2024
1 Corporate information
Strip Tinning Holdings plc is a public company incorporated in the United
Kingdom and listed on the Alternative Investment Market. The registered
address of the Company is Arden Business Park, Arden Road, Frankley
Birmingham, West Midlands, B45 0JA.
The principal activity of the Company is as a holding company for a subsidiary
which manufactures automotive busbar, ancillary connectors and flexible
printed circuits (FPC) (together the 'Group').
2 Accounting policies
Basis of preparation
The Group financial statements have been prepared in accordance with UK
adopted international accounting standards ("IFRS") and in accordance with the
requirements of the Companies Act 2006.
The parent Company financial statements have been prepared under applicable
United Kingdom Financial Reporting Standards 101: Reduced Disclosure Framework
("FRS101") and the requirements of the Companies Act 2006. The following FRS
101 disclosure exemptions have been taken in respect of the parent Company
only information:
· IAS 7 Statement of cash flows;
· IFRS 7 Financial instruments disclosures and;
· IAS 24 Key management remuneration.
The principal accounting policies applied in the preparation of these
consolidated and separate financial statements are set out below. These
policies have been consistently applied to all the years presented, unless
otherwise stated. The IASB has published the following amendments which were
implemented by the group on 1 January 2024 but which have not had any
significant impact on the group's financial statements:
- Amendment to IAS 1 regarding the classification of liabilities being based
on an entity's rights at the end of a reporting period and disclosure in
respect of post period end covenants that have to be met in the 12 months post
period end;
- IAS 7/IFRS 7 amendments in respect of supplier finance arrangements and
disclosures that allow an investor to understand the nature of these;
- IFRS 16 Amendments to clarify how a seller-lessee subsequently measures sale
and leaseback transactions.
The financial statements have been prepared under the historical cost
convention. The financial statements and the accompanying notes are presented
in thousands of pounds sterling ('£'000'), the functional and presentation
currency of the Company, except where otherwise indicated.
Going concern
The Directors, having made suitable enquiries, analysis and judgements,
consider that the Group has adequate resources to continue in business for the
foreseeable future, being a period of at least 12 months from the date of
approval of these financial statements.
In making this assessment the Directors have considered the Group budgets for
the period up to December 2026, routinely updated forward forecasts for
revenue, costs and cash flows, the impact of cost cutting already completed or
planned and applied sensitivities there to. The key assumptions included
within the forecasts, and thus informing the Directors' views on the going
concern position of the group, are as follows:
· Sales remain consistent with the current run rates being
experienced, and the new contracts add to this as we reach Stage of Production
dates on key nominations in the second half of 2026;
2 Accounting policies (continued)
· The impact of reciprocal tariffs on products ultimately supplied
to the US market is assumed for the purposes of the forecast to be absorbed by
the group and assumed to be at 10% of export sales value. However, the group
fully expect to pass these costs through to customers;
· To the extent activity remains at current levels, no significant
additional restructuring rounds are required, and recruitment of new staff
continues in line with the new projects;
· Utilisation of the CID facility is maintained at historical
levels at c.50% of the sales ledger at any point in time; and
· Further external funding, over and above the current facilities
available to the group, is not required throughout the forecast period to
support the above activities.
The Directors have assumed trading remains difficult in our forecasts and this
means that our finance is particularly difficult as we invest for the new
projects we have won. The Group has relatively low cash headroom in our
existing forecasts in the middle of 2026. As such, and should activity levels
fall below those summarised above, the Directors have made some of the
following assumptions and could take further mitigating actions if required.
Some of the available mitigations have been listed below.
· Delaying new staff recruitment if sales are slower than
expected;
· Further overhead reduction programmes if activity levels reduce;
and
· An ability to draw further against the existing CID facility,
which can provide further liquidity of up to 75% of debtors below £1.5m.
Notwithstanding the above, the directors remain optimistic of securing
additional resources to fund in particular the ramp up in sales in the latter
half of 2026 from nominations already won and announced. These resources may
include funding from the Government's Export Credit Guarantee Scheme, and/or
from other grants for which we have two applications in hand. In order to
support further growth opportunities over and above those included within the
forecasting exercise, the directors also remain open to equity funding from
investors and/or strategic partners to support the ultimate production ramp.
The Directors consider that the prospects from such opportunities will improve
as the global economy returns to a steadier state and as we move towards being
profitable in 2026.
Based on the above assessment of a range of reasonably possible scenarios,
including the risks and uncertainties of delivering the current forecast and
the associated mitigations available to manage those risks, the Directors
continue to adopt the going concern basis in preparing the financial
statements.
Standards, amendments and interpretations in issue but not yet effective
Certain new standards, amendments and interpretations to existing standards
have been published that are mandatory for accounting periods beginning on or
after 1 January 2025 and which the Group has chosen not to adopt early. These
include the following standards which may be relevant to the Group:
- Amendments to IFRS 9 and IFRS 7 - Amendments to the Classification and
Measurement of Financial Instruments made to address diversity in accounting
practice by clarifying requirements in two specific areas:
• classification of financial assets with environmental, social and
corporate governance (ESG) and similar features; and
• timing of derecognition of financial liabilities settled through
electronic payment systems
- IFRS 18 Presentation and Disclosure in Financial Statements mandatory for
periods commencing 1 January 2027. IFRS 18 introduces three key new
requirements:
• specified categories and defined subtotals in the statement of profit or
loss;
• improved principles for aggregation and disaggregation of information; and
• disclosures about management-defined performance measures
As a result of initial review of the new standards, interpretations and
amendments which are not yet effective in these financial statements, none are
expected to have a material effect on measurement or presentation of amounts
in the Company or Group's future financial statements.
2 Accounting policies (continued)
Use of estimates and judgements
The preparation of the financial statements in conformity with IFRS requires
management to make judgments, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience, as well as expectations of future events and various other factors
that are believed to be reasonable under the circumstances, the results of
which form the basis of making the judgments about carrying values of assets
and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods. The estimates and judgements
that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed
below.
Right-of-use assets
Judgement
The application of IFRS 16 involves an estimation of the appropriate
incremental borrowing rate and judgement of the relevant lease period. The
rate is reviewed in conjunction with the rates on similar borrowings and a
judgement has been made where there are break options by reference to business
plans and the most likely outcome.
Property, plant and equipment
Estimation
Property, plant and equipment as set out in note 13 is depreciated over the
estimated useful lives of the assets. Useful lives are based on management's
estimates of the period that the assets will generate revenue, which are
reviewed annually for continued appropriateness and events which may cause the
estimate to be revised.
Impairment of investment
Estimate
Investments are tested for impairment in accordance with IAS 36 'Impairment of
Assets'. Investments have separately identifiable cashflows. Key inputs into
the estimation uncertainty are the discount rates reflecting the asset
specific risks and the future cashflows from the investment. Carrying values
of the investment can be seen in note 14. A discounted cashflow model shows a
recoverable value with headroom of £9,101,000 above the investment amount.
The key assumptions within this model are the Directors assessment of future
cash flows (as summarised in "Going Concern" above), plus the future delivery
of the current nominations, a Weighted Average Cost of Capital of 13.6% and a
Growth Rate of 1.0%. Sensitivities have been applied to this amount, with a
0.1% increase in the discount rate reducing the headroom by £349,000 and a
£25,000 reduction in final year cashflows from the investment reducing the
headroom by £119,000.
Expected credit losses on intercompany receivables
Estimate
The intercompany receivable balance has been assessed for expected credit
losses in accordance with IFRS 9 'Financial Instruments'. The receivable
relates to a loan amount with no conditions attached, it is therefore assumed
to be repayable on demand with no interest charged. However the commercial
plan for repayment of the loan is for Strip Tinning Limited to start to repay
the loan once it becomes cash generative. The recoverability has been assessed
on the basis of the future cashflows of Strip Tinning Limited as summarised in
"Going Concern" above, plus the future delivery of current nominations.
Therefore the key input into the estimate are the future cashflows of Strip
Tinning Limited. Discounting has not been considered as an estimate as the
loan is interest free and repayable on demand. To estimate these future
cashflows management have used their base case model, which external investors
have relied on, which estimates that Strip Tinning Limited would be able to
repay the balance in full by 2030, the key assumptions within this model are a
Weighted Average Cost of Capital of 13.6% and a Growth Rate of 1.0%. To
apply a sensitivity to this a model with identical inputs to the discounted
cashflows model used for the impairment assessment of the investment in Strip
Tinning Limited under IAS 36 has been used.
2 Accounting policies (continued)
The model estimates that Strip Tinning Limited will be able to repay the
balance in full by 2031, under an extreme sensitivity applied, assuming no new
contracts were won going forward (so that revenues were solely from existing
contracted work) versus the management base case model. Under both scenarios
Strip Tinning Holdings plc would be willing to allow the loan to be paid over
this period, and so it is concluded that no expected credit loss need be
recognised.
Intangible assets
Judgement
The capitalisation of development costs is subject to a degree of judgement in
respect of the point when the commercial viability of new technology and
know-how is reached, supported by the results of testing and customer trials.
The carrying values are shown in note 11. Once the trigger point is reached
costs that can be reliably measured and directly relate to the development of
relevant projects are capitalised. These include payroll costs, third party
invoices for subcontract cost and materials cost in excess of the bill of
materials.
Estimation
Capitalisation criteria in respect of financial recoverability involves
estimated forecasts of future sales and margins with assumptions based on
experience and trends when they are prepared which may change over time. The
group has performed a sensitivity analysis and noted that a reasonable change
in the underlying significant assumptions is not expected to result in an
impairment of an intangible asset.
Amortisation commences once management consider that the asset is available
for use, i.e. when it is judged to be in the location and condition necessary
for it to be capable of operating in the manner intended by management and the
cost is amortised over the estimated five to eight year useful life of the
know-how based on experience of and future expected customer product cycles
and lives.
Inventory
Judgement
The calculation of net realisable value provisions against inventory requires,
in particular, an assessment of whether materials or components can be
utilised in future production. Management identify stock for provision based
on a combination of the past 12 month usage and the forecast next 12 month
usage of the item code.
Estimate
Stock which is identified as having more than one year's usage in stock is
provided for on a sliding scale of 20%-90%. This has resulted in new
provisions of £191,000 being made in the year, this stock has not been
physically written off or scrapped, however its net realisable value has been
provided against to reflect its likely future use in the business. A
sensitivity is applied to provide 100% for all stock with more than one year's
usage in stock, this would increase the provision applied by £110,000,
however management believe that this stock does have some residual value and
alternative usages, so the sliding scale is more appropriate.
Deferred taxation
Judgement
The recognition of deferred tax assets involves the assessment of forecasts in
respect of future results and taxable profits and judgement as to the
likelihood that these will be achieved and realise the assets.
Convertible Loan Notes
Judgement & Estimation
As part of the fundraising completed in January 2024, the Group issued a
convertible loan note. In accordance with IFRS 9, the instrument has been
split into two components:
· A financial liability measured at amortised cost, representing
the host debt contract; and
· A derivative financial liability measured at fair value through
profit or loss, reflecting the embedded conversion option.
The valuation of the derivative component requires the use of significant
judgement and estimation, both at initial recognition and at each subsequent
reporting date. The fair value of the conversion
2 Accounting policies (continued)
feature has been determined using a Monte Carlo simulation model, which
reflects the option's dependence on the underlying share price at the date of
conversion.
Key assumptions used in the valuation model include the risk-free rate, share
price volatility, and dividend yield:
· The risk-free rate applied at both initial recognition and at 31
December 2024 was 4%, based on the Bank of England base rate at the time. A
0.5% increase or decrease in the risk-free rate would result in a
corresponding increase or decrease in the derivative liability of
approximately £15,000.
· Volatility was estimated at 68.6% as at 31 December 2024, based
on the historical share price performance of the Company. A 5% increase in
volatility would result in an increase in the derivative liability of
approximately £99,000, while a 5% decrease would reduce the liability by
approximately £103,000.
· The dividend yield was estimated at 0%, reflecting the Company's
forecast of ongoing losses and the expectation that no dividends will be paid
in the foreseeable future.
Basis of consolidation
The Company was incorporated on 6 January 2022 with one £0.01 ordinary share
and on 2 February 2022, became the Group parent Company when it issued
9,999,999 £0.01 ordinary shares in exchange for all the ordinary shares in
Strip Tinning Limited. In addition, options over ordinary shares in Strip
Tinning Limited were converted, on equivalent terms, to options over 813,045
shares in the Company. This is considered not to be a business combination and
outside the scope of IFRS3 Business Combinations. This is a key judgement and,
as a transaction where there was no change in
the shareholders or holdings, is accordingly accounted for using merger
accounting with no change in the book values of assets and liabilities with no
fair value accounting applied.
The consolidated financial statements present the results of the Company and
its subsidiary as if they have always formed a single group. Intercompany
transactions and balances between Group companies are therefore eliminated in
full. The share capital presented is that of Strip Tinning Holdings
plc from the date of the capital reorganisation in 2022 with the difference on
elimination of Strip Tinning Limited's capital being shown as a merger
reserve.
The consolidated statement of comprehensive income reflects the consolidated
results for the full comparative financial year ended 31 December 2022,
inclusive of the results of the newly incorporated parent entity, plc, from 6
January 2022 onwards.
A subsidiary is an entity over which the Group has control. The Group controls
an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity.
Revenue
Revenue principally comprises income from the sale of automotive glazing
components comprising busbar, ancillary connectors and flexible printed
circuits (FPC) together with a small degree of product tooling purchased by
customers and represents the amount receivable for the sale of these component
products or tooling, excluding VAT and trade discounts.
There are framework agreements with major customers including pricing per
component and purchase orders are then received from customers for each
delivery. Revenue is recognised to the extent that the performance
obligations, being the agreement to transfer the product meeting the technical
specifications is satisfied, which is when the customer obtains control of the
product or of the tooling and is able to benefit from or direct the use of the
product. This recognition occurs at a point in time, for tooling projects and
all goods sales. The transfer takes place in accordance with the terms agreed
with each customer, either at the point in time the goods are despatched to or
received by the customer. Product is tested before dispatch, but any product
returned by the customer as faulty is treated as a reduction in revenue. Any
tooling revenue is recognised in full once the tooling project is complete and
in use to make parts for the customer. This type of tooling built specifically
for a customer
2 Accounting policies (continued)
project is retained physically by Strip Tinning under ownership of the
customer once revenue has been recognised. This is separate and distinct to
tooling which Strip Tinning has purchased and retains ownership of as not
funded by the customer, which is shown in Property, Plant and Equipment.
When an amount has been invoiced or payment received in advance of the
associated performance obligations being fulfilled, any amounts due are
recognised as trade receivables and deferred income is recorded for the sales
value of the performance obligations that have not been provided.
Grants
Income based grants
Income based grants are recognised in other operating income based on the
specific terms related to them as follows:
· A grant is recognised in other operating income when the grant
proceeds are received (or receivable) provided that the terms of the grant do
not impose future performance-related conditions.
· If the terms of a grant impose performance-related conditions
including incurring related expenditure, then the grant is only recognised in
income as the related performance conditions are met.
· Any grants that are received before the revenue recognition
criteria are met are recognised in the statement of financial position as an
other creditor within liabilities.
Capital grants
Grants received relating to tangible and intangible fixed assets are treated
as deferred income and released to the income statement over the expected
useful lives of the assets concerned.
Employee benefits
The Group operates a defined contribution pension scheme. Contributions are
recognised in the statement of comprehensive income in the year in which they
become payable in accordance with the rules of the scheme.
Share based payment
The Company operates an equity-settled share-based compensation plan in which
the Group receives services from employees as consideration for share options.
The fair value is established at the point of grant using an appropriate
pricing model and then the cost is recognised as an expense in administrative
expenses in the statement of comprehensive income, together with a
corresponding increase directly in equity over the period in which the
services are fulfilled. This is the estimated period to vesting in respect of
employees. The cumulative expense recognised for equity-settled transactions
at each reporting date until vesting date reflects the extent to which the
vesting period has expired and the Group's best estimate of the number of
equity instruments that will ultimately vest.
Deferred tax credits in respect of the potential future tax deduction from
exercise of options are initially included in the tax in the statement of
comprehensive income. To the extent the potential corporate tax deduction
exceeds the share based payment charges, the deferred tax is taken directly to
retained earnings in equity in accordance with IAS12.
Income tax
Current income tax assets and/or liabilities comprise obligations to, or
claims from, fiscal authorities relating to the current or prior reporting
periods, that are unpaid/due at the reporting date. Current tax is payable on
taxable profits, which may differ from profit or loss in the financial
statements. Calculation of current tax is based on the tax rates and tax laws
that have been enacted or substantively enacted at the reporting period.
Deferred taxes are calculated using the liability method on temporary
differences between the carrying amounts of assets and liabilities and their
tax bases. A deferred tax asset is recognised for all deductible temporary
differences to the extent that it is probable that taxable profit will be
available against which the deductible temporary difference can be utilised,
unless the deferred tax asset arises from the initial recognition of an asset
or liability in a transaction that is not a
2 Accounting policies (continued)
business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit (tax loss).
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realised or the liability is
settled, based on tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period.
Computer software
Computer software assets are capitalised at the cost of acquiring and bringing
into use the software. Subsequent to initial recognition it is stated at cost
less accumulated amortisation and accumulated impairment. Software is
amortised on a straight line basis over its estimated useful life of two to
five years. Amortisation on all intangible assets is recognised in
administrative expenses in the Statement of Comprehensive Income.
Research and development costs
An internally generated intangible asset arising from development (or the
development phase) of an internal project to improve the efficiency, design or
capability of the Group's product range is recognised if, and only if, all of
the following have been demonstrated:
· It is technically feasible to complete the development such that
it will be available for use, sale or licence;
· There is an intention to complete the development;
· There is an ability to use, sell or licence the resultant asset;
· The method by which probable future economic benefits will be
generated is known;
· There are adequate technical, financial and other resources
required to complete the development; and
· There are reliable measures that can identify the expenditure
directly attributable to the project during its development.
The amount recognised is the expenditure incurred from the date when the
project first meets the recognition criteria listed above. Expenses
capitalised consist of employee costs incurred on development, direct costs
including material or testing and an apportionment of appropriate overheads.
Where the above criteria are not met, research and development expenditure is
charged to the income statement in the period in which it is incurred.
Capitalised development costs are initially measured at cost. After initial
recognition, they are recognised at cost less any accumulated amortisation and
any accumulated impairment losses.
The depreciable amount of a development cost intangible asset with a finite
useful life is amortised on a straight line basis over its useful life,
currently expected to range from five to eight years. Amortisation begins when
the asset is available for use, i.e. when it is in the location and condition
necessary for it to be capable of operating in the manner intended by
management.
The amortisation period and the amortisation method for the assets with a
finite useful life is reviewed at least each financial year-end. If the
expected useful life of the asset is different from previous estimates, the
amortisation period is changed accordingly.
Patent costs
Patent cost assets are initially measured at cost. After initial recognition,
they are recognised at cost less any accumulated amortisation and any
accumulated impairment losses. The costs are amortised over a five year
estimated useful life.
2 Accounting policies (continued)
Property plant and equipment
Property, plant and equipment is recognised as an asset only if it is probable
that future economic benefits associated with the item will flow to the Group
and the cost of the item can be measured reliably. An item of property, plant
and equipment that qualifies for recognition as an asset is measured at its
cost. Cost of an item of property, plant and equipment comprises the purchase
price and any costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the
manner intended by management.
After recognition, all property, plant and equipment (including plant,
computer equipment and fixtures) is carried at cost less any accumulated
depreciation and any accumulated impairment losses. Depreciation is provided
at rates calculated to write down the cost of assets, less estimated residual
value, over their expected useful lives on the following basis:
Leasehold improvements
straight line over life of lease
Plant and machinery
2-15 year straight line
Office equipment
2 year straight line
Tooling
5 year straight line
The residual value and the useful life of an asset is reviewed at least at
each financial year-end and if expectations differ from previous estimates,
the changes are accounted for as a change in an accounting estimate in
accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors. Gains or losses arising on the disposal of property, plant and
equipment are determined as the difference between the disposal proceeds and
the carrying value of the asset and are recognised in profit or loss.
Right-of-use assets and lease liabilities
Assets and liabilities arising from a lease with a duration of more than one
year are initially measured at the present value of the lease payments and
payments to be made under reasonably certain extension options are also
included in the measurement of the liability. The lease payments including
any expected dilapidation payments are discounted using the interest rate
implicit in the lease or the incremental borrowing rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar economic environment with
similar terms, security and conditions.
Lease payments are allocated between repayments of the discounted liability,
presented as a separate category within liabilities, and the lease liability
finance charges. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. Right-of-use assets are measured at
cost comprising the amount of the initial measurement of lease liability, any
lease payments made at or before the commencement date less any lease
incentives received and any initial direct costs and are presented as a
separate category within tangible fixed assets.
Right-of-use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. If the Group is
reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset's useful life.
Any payments associated with short-term leases of equipment and all leases of
low-value assets would be recognised on a straight-line basis as an expense in
profit or loss. Short-term leases are leases with a lease term of 12 months or
less. There have been no significant short lease costs in the reporting
period. Associated costs of all leases, such as maintenance, service charges
and insurance, are expensed as incurred.
2 Accounting policies (continued)
Impairment of intangible assets, right-of-use assets and property, plant and
equipment
For impairment assessment purposes, assets are grouped at the lowest levels
for which there are largely independent cash flows. As a result, some assets
are tested individually for impairment and some are tested at the overall
Group level. For the purpose of impairment testing, assets that cannot
be tested individually are grouped together into the smallest group of assets
that generates cash flows from continuing use that are largely independent of
the cash flows of other assets or groups of assets (the "cash-generating
unit").
All individual assets or cash-generating units are reviewed for indicators of
impairment at the end of each period and tested for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be
recoverable.
An asset or cash-generating unit is impaired when its carrying amount exceed
its recoverable amount. The recoverable amount is measured as the higher of
fair value less cost of disposal and value in use. The value in use is
calculated as being net projected cash flows based on financial forecasts
discounted back to present value. The impairment loss is allocated to reduce
the carrying amount of the asset pro-rata on the basis of the carrying amount
of each asset in the unit. Non-financial assets that suffered an impairment
are reviewed for a possible reversal of the impairment at the end of each
reporting period. An impairment loss is reversed if the asset's or
cash-generating unit's recoverable amount exceeds its carrying amount.
Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
cost and net realisable value. Cost comprises all costs of purchase of raw
materials or bought in manufacturing components on a first in first out basis,
costs of conversion and an appropriate proportion of fixed and variable
overheads incurred in bringing the finished goods inventories to their present
location and condition. Net realisable value represents the estimated selling
price less costs to complete and sell. Where necessary, provision is made to
reduce cost to no more than net realisable value having regard to the nature
and condition of inventory, as well as its anticipated utilisation and
saleability.
Financial instruments
Financial assets
Financial assets are recognised in the statement of financial position when,
and only when, the Group becomes a party to the contractual provisions of the
instrument and are classified based upon the purpose for which the asset was
acquired. The Group's business model is to hold all assets recognised within
these financial statements to collect the cash flows.
Financial assets are initially recognised at fair value, which is usually the
cost, plus directly attributable transaction costs. These comprise trade and
other receivables and cash and cash equivalents. Financial assets are
subsequently measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss ('ECL') provision for trade
receivables. The Group measures loss allowances at an amount equal to
lifetime ECL, which is estimated using past experience of the historical
credit losses experienced over the three year period prior to the period end.
Historical loss rates are then adjusted for current and forward-looking
information on macroeconomic factors affecting the Group's customers, such as
inflation rates. The gross carrying amount of a financial asset is written off
(either partially or in full) to the extent that there is no realistic
prospect of recovery.
Amounts owed by group undertakings are unsecured, interest free and have no
fixed repayment date. Management do not intend to recall these balances within
twelve months. Expected credit losses on these balances are assessed
differently to trade receivables, with an impairment assessment being carried
out on the balance as outlined in the Critical Judgements and Estimates
section above.
The Group recognises loss allowances for expected credit losses (ECLs) on
financial assets measured at amortised cost. A financial asset is derecognised
when the contractual rights to the cash flows from
2 Accounting policies (continued)
the financial asset expire, or when the financial asset and all substantial
risks and reward are transferred.
Financial liabilities
Financial liabilities include loans, hire purchase borrowings, lease
liabilities, trade and other payables. Financial liabilities are obligations
to pay cash or other financial assets and are recognised in the statement of
financial position when, and only when, the Group becomes a party to the
contractual provisions of the instrument.
Trade and other payables are initially recognised at fair value and
subsequently carried at amortised cost using the effective interest method.
Loans and hire purchase borrowings are initially recognised at fair value net
of any transaction costs directly attributable to the issue of the instrument
and subsequently carried at amortised cost using the effective interest
method. Discounting is omitted where the effect of discounting is immaterial.
A financial liability is derecognised only when the contractual obligation is
extinguished, that is, when the obligation is discharged, cancelled or
expires.
The Group utilises hire purchase asset backed finance to fund tangible fixed
assets, drawing down finance against individual assets or bundles of assets,
which may directly finance the asset purchase or be drawn down
retrospectively. The related asset is recognised and measured in accordance
with the tangible fixed asset policy with initial cost being the fair value of
the asset. A corresponding hire purchase liability.is recognised in respect of
the capital repayments to be made. These interest bearing liabilities are then
measured at amortised cost with the interest, under the effective interest
method, expensed over the repayment period at a constant rate.
In respect of convertible loan notes where there is an option to exchange loan
notes for equity shares, the value of the conversion rights is recognised as a
derivative fair value liability within non-current liabilities. This is valued
at each balance sheet date using an appropriate option pricing model and was a
£601,000 liability on the date of issue of the convertible loan. The balance
of the net proceeds
received is recognised as the initial loan note liability on issue and
together with subsequent financing charges is shown within borrowings in
non-current liabilities.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together
with other short term, highly liquid investments that are readily convertible
into known amounts of cash and are subject to an insignificant risk of changes
in value.
Foreign currencies
Transactions entered into by the Group in a currency other than the functional
currency of sterling are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the reporting date. Exchange differences arising on the
retranslation of unsettled monetary assets and liabilities are recognised
immediately in the income statement in administrative expenses.
Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, it is probable that an economic outflow
will occur and a reliable estimate can be made including any additional
evidence from post period end events. Where the timing of the estimate
represents a relatively certain amount it is provided for within accruals.
2 Accounting policies (continued)
Equity and reserves
Share capital represents the nominal value of shares that have been issued.
Share premium represents the excess consideration received over the nominal
value of share capital upon the sale of shares, less any incidental costs of
issue. The company's merger reserve arises from the fair value attributed to
the shares issued in exchange for the subsidiary's shares as no share premium
account is recognised under Companies Act merger relief. On consolidation a
merger reserve arises as a result of the difference between the nominal value
of the parent company shares issued in exchange for subsidiary shares and the
nominal value of those subsidiary shares.
Retained earnings include all current and prior period retained profits.
Presentation of non statutory measures
The Group classifies certain one-off charges or credits that have a material
impact on the financial results but are not related to the core underlying
trading as 'exceptional' or 'non-recurring' items. These are disclosed
separately in note 6 and adjusted results to provide further understanding of
the financial performance of the Group.
3 Segmental reporting
IFRS 8, Operating Segments, requires operating segments to be identified on
the basis of internal reports that are regularly reviewed by the Group's chief
operating decision maker. The chief operating decision maker is considered to
be the executive Directors.
The operating segments are monitored by the chief operating decision maker and
strategic decisions are made on the basis of adjusted segment operating
results. All assets, liabilities and revenues are located in, or derived in,
the United Kingdom. The Group has commenced the development and sales of
specialised connectors for electric vehicle battery systems (the EV segment)
which are expected to grow to be a material segment. Separate management
reporting and information is prepared at a revenue and gross profit level only
for a Glazing segment (sale of specialist automotive busbar and electrical
connectors typically housed in vehicle glazing) and EV as follows:
Glazing EV Total
Year ended 31 December 2024 £'000 £'000 £'000
Revenue 8,063 964 9,027
Cost of sales (5,415) (623) (6,038)
Gross profit 2,648 341 2,989
Other operating income 230
Administrative expenses (6,616)
Net finance expense (1,489)
Taxation 186
Loss for the year (4,700)
Glazing EV Total
Year ended 31 December 2023 £'000 £'000 £'000
Revenue 9,705 1,121 10,826
Cost of sales (6,921) (596) (7,517)
Gross profit 2,784 525 3,309
Other operating income 1,364
Administrative expenses (6,075)
Finance expense (331)
Taxation 962
Loss for the year (771)
3 Segmental reporting (continued)
Turnover with the largest customers (including customer groups) representing
in excess of 10% of total revenue in the year for 3 customers (2023: 3
customers) has been as follows:
Year ended 31 December 2024 Year ended 31 December 2023
£'000 £'000
Customer A 1,537 3,090
Customer B 998 1,384
Customer C 974 1,298
All revenue arises at a point in time and relates to the sale of automotive
busbar, ancillary connectors and flexible printed circuit (FPC) product.
Turnover by geographical destination is as follows:
Year ended 31 December 2024 Year ended 31 December 2023
£'000 £'000
UK 904 1,224
Rest of Europe 4,721 4,792
Rest of the World 3,402 4,810
9,027 10,826
4 Other operating income
The operating loss is stated after charging/(crediting):
Year ended 31 December 2024 Year ended 31 December 2023
£'000 £'000
Other operating income comprising:
Amortisation of deferred government capital grant income (26) (88)
Government revenue grant income in respect of development work (136) (1,146)
Income relating to claim settlement with a customer (68) (130)
In 2022, a major government grant was awarded to the group to reimburse
employment, depreciation, subcontract and other revenue costs related to the
scale up of its Battery Technologies production line and process.
5 Operating loss
The operating loss is stated after charging/(crediting): Year ended 31 December 2024 Year ended 31 December 2023
£'000 £'000
Amortisation of intangible assets 178 173
Depreciation of property, plant and equipment 739 828
Depreciation of right-of-use assets 217 225
Cost of inventory sold 3,739 4,174
Research and development expenditure expensed in the year 1,000 1,120
Short term lease rentals - -
Foreign exchange losses 93 18
Exceptional or non-recurring costs
Restructuring related staff costs 88 -
Convertible loan fees 53 -
Auditor's remuneration
For audit 73 110
Additional fees for prior year audit - 20
6 Adjusted EBITDA
In reporting financial information, the Group presents an alternative
performance measure (APM), which is not defined or specified under the
requirements of IFRS. The Group believes that this APM, provides understanding
to the users of the financial statements to allow for further assessment of
the underlying performance of the Group. The Group's primary results measure,
which is considered by the directors of the Group to represent the underlying
and continuing performance of the Group, is adjusted EBITDA as set out below,
in which earnings are stated before net finance income, tax, amortisation and
depreciation and non-recurring items.
Year ended 31 December 2024 Year ended 31 December 2023
£'000 £'000
Operating loss (3,397) (1,402)
Depreciation 956 1,053
Amortisation and impairment 178 173
EBITDA (2,263) (176)
Foreign exchange 93 18
Share based payments 97 142
R&D tax credit fees - 92
Non-recurring staff expenses 88 -
Convertible loan fees 53 -
Adjusted EBITDA (1,932) 76
7 Staff and key management
Year ended 31 December Year ended 31 December 2023
Average monthly number of employees 2024
Number Number
Management 16 14
Engineering, administration and support 25 21
Production, quality and distribution 77 102
118 137
Payroll costs £'000 £'000
Gross salaries 4,495 4,392
Social security costs 464 436
Share based payment (note 26) 97 142
Contributions to money purchase pension schemes 315 300
5,372 5,270
In view of the size and nature of the Group, the Key Management Personnel in
the period is considered to comprise only the directors of the parent and
subsidiary companies. The Company directors' remuneration was as follows:
Year ended 31 December 2024 Salary Bonus Benefits in kind Share based payment Pension Total
£'000 £'000 £'000 £'000 £'000 £'000
R W Barton 97 - 11 - - 108
P George 40 - - - - 40
A Le Van 86 - 4 - 6 96
K Edwards 63 15 - 5 4 87
A D Robson 130 26 7 30 - 193
M Taylor 40 - - - - 40
M Perrins 192 36 3 11 11 253
648 77 25 46 21 817
Year ended 31 December 2023 Salary Bonus Benefits in kind Share based payment Pension Total
£'000 £'000 £'000 £'000 £'000 £'000
R W Barton - - 7 - - 7
P George 40 - - - - 40
A Le Van 144 60 5 18 7 234
A D Robson 130 49 6 16 - 201
M Taylor 40 - - - - 40
354 109 18 34 7 522
Retirement benefits were accruing to three directors in respect of defined
contribution schemes (2023: one).
Key management remuneration was £817,000 (2023: £1,044,000) including
£21,000 of pension contributions (2023: £22,000).
The highest paid director received remuneration of £253,000 (2023: £234,000)
including pension contributions of £11,000 (2023: £7,000).
8 Finance income and expense
Year ended 31 December 2024 Year ended 31 December 2023
£'000 £'000
Finance income
Bank interest receivable 71 -
Finance expense
Interest payable on hire purchase obligations 98 119
Bank interest payable 49 133
Convertible loan note interest (rolled up) 438 -
Unwinding of discount on provisions 12 12
Lease liability finance charges 58 67
655 331
9 Income tax
Year ended 31 December 2024 Year ended 31 December 2023
£'000 £'000
Current tax:
UK corporation tax (186) (222)
Adjustment for prior periods - (740)
Total tax credit (186) (962)
The tax rate used for the reconciliation is the average corporate tax rate of
25% (2023: 23.5%) payable by corporate entities in the UK on taxable profits
under UK tax law. An increase to 25% from April 2023 was substantively enacted
and, as the applicable rate to the expected period of reversal, is accordingly
applied to deferred tax balances at 31 December 2023 and 2024.
The credit for the year can be reconciled to the loss for the year as follows:
Year ended 31 December 2024 Year ended 31 December 2023
£'000 £'000
Loss before taxation (4,886) (1,733)
Income tax calculated at 25% (2023: 23.5%) (1,222) (407)
Expenses not deductible 350 (11)
Enhanced research and development allowances (215) (256)
Surrender of losses for R&D credit 279 265
Differing deferred and corporate tax rates - (12)
Deferred tax not recognised in respect of losses 701 199
Gain on derivative not taxable (79) -
Adjustment for prior periods - (740)
Total tax credit (186) (962)
10 Earnings per share
Year ended 31 December 2024 Year ended 31 December 2023
Loss used in calculating earnings per share (£'000) (4,700) (771)
Weighted average number of shares ('000) 18,119 15,459
Basic and diluted loss per share (pence) (25.9) (5.0)
Earnings per share has been calculated based on the share capital of the
parent company. There are options in place over 1,214,959 (2023: 1,214,959)
shares that were anti-dilutive at the year end but which may dilute future
earnings per share. In 2024 the group completed a fundraise in part equity
part convertible loan notes which resulted in an issue of 2,765,375 ordinary
shares. If these had been in place for the whole year this would have reduced
the 2023 loss per share to 9.5 pence. The £4,000,000 convertible loan note
issued would convert into 10,000,000 shares at 40 pence per share.
11 Intangible assets
Development costs Patents Computer Total
Group £'000 Software
£'000 £'000 £'000
Cost
At 1 January 2023 1,621 148 368 2,137
Additions 333 - 206 539
At 31 December 2023 1,954 148 574 2,676
Additions 695 - 70 765
At 31 December 2024 2,649 148 644 3,441
Accumulated amortisation
At 1 January 2023 635 136 89 860
Charge for the year 168 4 1 173
At 31 December 2023 803 140 90 1,033
Charge for the year 173 4 1 178
At 31 December 2024 976 144 91 1,211
Net book amount
At 31 December 2024 1,673 4 553 2,230
At 31 December 2023 1,151 8 484 1,643
The Group has a programme of research and development projects to improve the
efficiency and functionality of its products. Capitalised development costs
relate to the projects evaluated as viable and where the successful
developments are being applied and contributing to revenue.
Included within the carrying amount of the above, are assets held under hire
purchase agreements of £159,000 (2023: £159,000) relating to software.
Amortisation charged on these assets in the year amounted to £nil (2023:
£nil).
12 Right-of -use assets
Property leasehold Plant and machinery Total
Group assets assets
£'000 £'000
£'000
Cost
At 1 January 2023 1,868 112 1,980
Additions - 164 164
Disposals - (55) (55)
At 31 December 2023 1,868 221 2,089
Disposals - (65) (65)
At 31 December 2024 1,868 156 2,024
Accumulated depreciation
At 1 January 2023 755 74 829
Charge for the year 173 52 225
Disposals (55) (55)
At 31 December 2023 928 71 999
Charge for the year 173 44 217
Disposals - (65) (65)
At 31 December 2024 1,101 50 1,151
Net book amount
At 31 December 2024 767 106 873
At 31 December 2023 940 150 1,090
The financing charges in respect of right-of-use assets are disclosed in note
8 and the lease liabilities in 19. Short term rentals are disclosed in note 5
with no low value leases in either year. Right-of-use assets and lease
liabilities relate principally to property leases. The Group leases its main
operating premises, typically on a ten year lease, subject to periodic rent
reviews and potential breaks, with the intention and assumption made in
measuring assets and liabilities that the full period will be utilised. Total
cash outflows in respect of leases were £259,000 for the year ended 31
December 2024 (2023: £271,000).
13 Property, plant and equipment
Leasehold improvements Plant and machinery Tooling Office equipment Total
Group £000 £'000 £'000
£'000
£'000
Cost
At 1 January 2023 447 5,481 1,155 171 7,254
Additions 95 898 79 41 1,113
Disposals - (2) - - (2)
At 31 December 2023 542 6,377 1,234 212 8,365
Additions 5 812 63 36 916
At 31 December 2024 547 7,189 1,297 248 9,281
Accumulated depreciation
At 1 January 2023 232 3,062 863 147 4,304
Charge for the year 35 630 138 25 828
At 31 December 2023 267 3,692 1,001 172 5,132
Charge for the year 40 547 113 39 739
At 31 December 2024 307 4,239 1,114 211 5,871
Net book amount
At 31 December 2024 240 2,950 183 37 3,410
At 31 December 2023 275 2,685 233 40 3,233
Included within the carrying amount of the above, are assets held under hire
purchase agreements of £1,984,000 (2023: £1,679,000) relating to plant and
machinery and £11,000 (2023: £44,000) relating to tooling. Depreciation
charged on these assets in the year amounted to £383,000 (2023: £407,000).
14 Investments
Shares in group undertakings
Company £'000
At 31 December 2023 3,983
Capital contribution to subsidiary in respect of employee share options 97
At 31 December 2024 4,080
The Company acquired all of the shares in Strip Tinning Limited by a share for
share exchange on 2 February 2022. Strip Tinning Limited is incorporated and
registered in England at Arden Business Park, Arden Road, Frankley Birmingham,
West Midlands, B45 0JA. It manufactures automotive busbar, ancillary
connectors and flexible printed circuits (FPC). A new, wholly owned
subsidiary, Strip Tinning Technologies Limited, with share capital of £0.01
and registered at the same address, has been incorporated in 2024 and has not
yet traded.
Capital contribution relates to the share based payment amounts that have been
allocated to employees of Strip Tinning Limited under share option agreements
(note 26).
15 Inventories
31 December 2024 31 December
2023
Group £'000 £'000
Raw materials and consumables 1,125 1,150
Finished goods and goods for resale 185 137
1,310 1,287
An inventory impairment loss of £191,000 (2023: £254,000) was recognised in
the year.
16 Trade and other receivables
Group Group Company Company
31 December 2024 31 December 2023 31 December 2024 31 December 2023
Current £'000 £'000 £'000 £'000
Trade receivables 1,819 2,173 - -
Impairment provision - - - -
Net trade receivables 1,819 2,173 - -
Amounts owed by group undertakings - - 9,588 5,563
Other receivables 125 242 - -
Prepayments 199 270 10 16
2,143 2,685 9,598 5,579
The directors consider that the carrying amount of trade and other receivables
approximates to their fair value.
Amounts owed by group undertakings are unsecured, interest free and have no
fixed repayment date.
The impairment charge and movement in the expected credit loss provision
against trade receivables is as follows:
2024 2023
£'000 £'000
At 1 January - -
Impairment charge for the year 9 34
Debt written off (9) (34)
At 31 December - -
16 Trade and other receivables (continued)
Ageing of trade receivables past their due dates but not provided were:
Less than 30 days overdue 30 to 60 days overdue More than 60 days overdue
£'000 £'000 £'000
31 December 2023 308 - 57
31 December 2024 266 1 58
The directors consider the credit quality of trade and other receivables that
are neither past due nor impaired to be of good quality with the impairment
charges arising principally from one former customer.
17 Trade and other payables
Group Group Company Company
31 December 2024 31 December 2023 31 December 2024 31 December 2023
Current £'000 £'000 £'000 £'000
Trade payables 694 1,271 - 56
Other payables 156 99 - -
Taxation and social security 114 111 - -
Accruals 399 549 107 143
Deferred income 267 167 - -
1,630 2,197 107 199
Non current liabilities
Deferred income (grants) - 11 - -
18 Borrowings
Group Company
31 December 2024 31 December 2023 31 December 2024 31 December 2023
Current liabilities £'000 £'000 £'000 £'000
Invoice discounting facility 356 492 - -
Loans 81 74 - -
Asset-based borrowings 215 407 - -
652 973 - -
Non current liabilities
Loans 74 155 - -
Convertible loan note liabilities 3,536 - 3,536 -
Asset-based borrowings 884 643 - -
4,494 798 3,536 -
Non current derivative liabilities
Derivative fair value liability 1,506 - 1,506 -
Asset-based borrowings are secured by fixed charges over certain tangible
fixed assets and floating charges over other assets and undertakings of the
Group. All obligations fall due within five years. The total payments
including interest in respect of hire purchase liabilities are shown in note
20.
The invoice discounting facilities are secured by fixed and floating charges
over all other assets of the Group.
On 15 January 2024, the company received the £3,646,000 of proceeds, net of
issue costs and fees of a £4,000,000 convertible loan note from its
shareholders. The value of the conversion rights is recognised as a derivative
fair value liability within non-current liabilities. This is valued at each
balance sheet date using an appropriate option pricing model and was a
£601,000 liability on the date of issue of the convertible loan. The balance
of the net proceeds received was recognised as the initial loan note liability
on issue and together with subsequent financing charges is shown within
borrowings in non-current liabilities. The £905,000 loss on revaluation
reduced the derivative liability at 31 December 2024 to £1,506,000 is shown
in the Statement of Comprehensive Income below operating loss. The fair value
of the derivative liability is directly impacted by movements in the quoted
share price and can therefore fluctuate significantly. The annual coupon rate
of the loan is 10% and the loan is repayable 15 January 2029. The holders may
convert the capital and accrued interest to ordinary shares at the lower of 52
pence per share or the issue price at the last fundraising round prior to
conversion.
19 Lease liabilities
Group 31 December 2024 31 December 2023
£'000 £'000
Current 164 201
Due in one to five years 680 683
Due in more than five years 92 253
Non-current 772 936
The total payments including interest in respect of lease liabilities are
shown in note 20.
20 Movements in total financing liabilities
Group Borrowings Lease liabilities Total financing
£'000 £'000 £'000
At 1 January 2023 1,545 1,177 2,722
Cash movements:
Lease liability payments - (204) (204)
Hire purchase finance advanced 297 - 297
Hire purchase payments (510) - (510)
Invoice discounting finance advanced 492 - 492
Loan repayments (53) - (53)
Interest paid (252) (67) (319)
Non-cash movements:
Interest accrued 252 67 319
New lease liabilities - 164 164
At 31 December 2023 1,771 1,137 2,908
Cash movements:
Lease liability payments - (201) (201)
Hire purchase finance advanced 475 - 475
Hire purchase payments (426) - (426)
Invoice discounting finance repaid (136) - (136)
Loan advanced 4,000 - 4,000
Loan issue costs paid (301) - (301)
Loan repayments (74) - (74)
Interest paid (147) (58) (205)
Non-cash movements:
Treated as derivative liability 905 - 905
Interest accrued 585 58 643
At 31 December 2024 6,652 936 7,588
21 Financial instruments and capital management
Risk management
The Board has overall responsibility for the determination of the Company and
the Group's risk management objectives and policies. The overall objective of
the Board is to set policies that seek to reduce risk as far as possible
without unduly affecting the Group's flexibility. All funding requirements and
financial risks are managed based on policies and procedures adopted by the
Board of Directors. The Group is exposed to financial risks in respect of
market including foreign exchange risk, credit and liquidity risks.
Capital management
The Group's capital comprises all components of equity which includes share
capital and retained earnings amounting to £2,186,000 at 31 December 2024
(2023: £5,796,000). The Company's objectives when maintaining capital are to
safeguard the entity's ability to continue as a going concern, so that it can
continue to provide returns for shareholders and benefits for other
stakeholders, and to provide an adequate return to shareholders by pricing
products and services commensurately with the level of risk. The capital
structure of the Company consists of shareholders equity with all working
capital requirements financed from cash and major capital expenditure funded
by leases and hire purchase agreements. Continuing investment in EV has also
required utilisation of convertible loan note funding. The Company sets the
amount of capital it requires in proportion to risk. It manages its capital
structure and makes adjustments to it in the light of changes in economic
conditions, the ability to finance capital purchases and the risk
characteristics of the underlying assets and activity. In order to maintain or
adjust the capital structure, the Company may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares, or
sell assets to reduce debt.
Market risks
These arise from the nature and location of the customer markets and include
foreign exchange rate risks.
The Group trades within European and other overseas automotive supplier
markets, and accordingly there is a risk relating to the underlying
performance of these markets. The directors monitor this and the foreign
exchange risk closely with the intention to foresee downturns in trade or
changes in the use of automotive components.
Foreign exchange risk
The Group trades with overseas customers and, whilst it has net foreign
currency balances, also makes a degree of purchases in the respective currency
and uses currency denominated accounts to defer conversion to sterling or to
utilise the currency when needed. There has therefore been a reduced
sensitivity to fluctuations in exchange rates although a 10% increase or
decrease in Euro and US dollar exchange rates against sterling could impact
the results by up to £150,000 or £50,000 as a reduction or increase in
profit respectively.
The Group had the following in net assets comprising cash, sales ledger and
purchase ledger balances denominated in foreign currencies:
31 December 2024 31 December 2023
£'000 £'000
Euro denominated 720 1,119
US dollar denominated 968 413
Interest rate risk
The Group makes use of fixed rate three to five year hire purchase agreements
to acquire property, plant and equipment with interest rates typically ranging
from 3.5% (new agreements in 2020 to 2022) to 10% (2024); this spreads the
capital cost, ensures that the Group maintains sufficient cash resources for
working capital purposes and ensures certainty of total costs at the point of
acquisition of those assets. A £4m convertible loan note was used to raise
funds in January 2024 with a coupon
21 Financial instruments and capital management (continued)
of 10% where interest is rolled up and all payable on repayment of the loan. A
five year term bank loan has also been drawn upon at a fixed interest rate of
9.4% and invoice discounting facilities of up to £1.5m subject to eligible
receivables at an interest rate of 2.85% over base rates. These liabilities
are set out in note 18.
Credit risk
Credit risk is the risk of financial loss if a customer or counterparty to a
financial instrument fails to meet its contractual obligations. The Group is
mainly exposed to credit risk from credit sales and attempts to mitigate
credit risk by assessing the creditworthiness of customers, including using
proforma terms for new customers and closely monitoring the payment record and
trends for each customer. The customers are principally tier 1 automotive
suppliers.
At 31 December 2024 trade receivables were £1,819,000 (31 December 2023:
£2,173,000) with 18% (31 December 2023: 35%) of the balance owed by one
customer group and 44% (2023: 40%) of the balance by 3 other customers with
operations based in a number of European and other countries.
The ageing of overdue debtors is included in note 16 with all amounts
subsequently substantially received. The impairments to trade or other
receivables in 2023 and 2024 have been immaterial and relate to a few smaller
customers.
Credit risk on cash and cash equivalents is considered to be minimal as the
counterparties are all substantial banks with high credit ratings.
Liquidity risk
The maturity of the Group's financial liabilities including trade and other
payables, hire purchase and lease liability total payments with the interest
payable is as set out below. Current liabilities were payable on demand or to
normal trade credit terms, hire purchase and loan obligations were payable
monthly and lease liabilities quarterly. Hire purchase and lease liabilities
are used to manage liquidity by spreading the cost of payment for capital
purchases. The convertible loan notes, if not converted, are repayable with
for a total of £6,000,000 including accrued interest in January 2029.
At 31 December 2024 Up to 1 year 1-2 years 2-5 years Over 5 years
£'000 £'000 £'000 £'000
Trade, other payables and accruals 1,249 - - -
Hire purchase obligations 514 345 507 -
Loans and invoice discounting facility 448 77 6,000 -
Lease liabilities 212 210 562 420
2,423 632 7,069 420
At 31 December 2023 Up to 1 year 1-2 years 2-5 years Over 5 years
£'000 £'000 £'000 £'000
Trade, other payables and accruals 1,919 - - -
Hire purchase obligations 488 374 419 -
Loans and invoice discounting 584 92 77 -
Lease liabilities 260 212 602 591
3,251 678 1,098 591
Classification of financial instruments
All financial assets have been classified as at amortised cost, and all
financial liabilities have been classified as other financial liabilities
measured at amortised cost.
22 Financial instruments and capital management (continued)
Financial assets
31 December 2024 31 December 2023
At amortised cost £'000 £'000
Trade receivables and other receivables 1,944 2,415
Cash and cash equivalents 512 343
2,456 2,758
Financial liabilities
31 December 2024 31 December 2023
£'000 £'000
At amortised cost
Trade payables, other payables and accruals 1,249 1,919
Hire purchase obligations 1,099 1,050
Loans and invoice discounting facility 4,047 721
6,395 3,690
The directors consider that the carrying amount of the financial assets and
liabilities approximates to their fair values.
23 Provisions
The dilapidations provisions were reassessed during 2022 in respect of the
group's rented properties and increased to allow for potential reinstatement
costs that may be incurred at the end of the leases in 2030 under the standard
terms in the contracts. This primarily resulted in an increase in the amount
recognised in respect of the right of use assets for property and in the
discounted provisions liability which amounts to £251,000 at 31 December 2024
(2023: £239,000). The dilapidations settlement would be due on the end of the
businesses current lease, which is 2030, the amount of settlement is uncertain
and is based on an Expert's assessment conducted in 2022.
In 2023, a provision was recorded to allow for the potential supplier
settlement costs of a terminated contract, which was not required on
completion of negotiations and released in 2024
Group Dilapidations provision Terminated contract provision Total
£'000 £'000 £'000
Liability at 31 December 2022 227 - 227
Provision charged in year - 121 121
Unwinding of discount on provision 12 - 12
Liability at 31 December 2023 239 121 360
Provision released in year - (121) (121)
Unwinding of discount on provision 12 - 12
Liability at 31 December 2024 251 - 251
24 Deferred taxation
Group
Liability/(asset) in respect of: Accelerated Intangible R&D assets Share based payment Losses and other timing differences Total
capital allowances
£'000 £'000 £'000 £'000 £'000
As at 31 December 2022 731 268 - (999) -
Credit to profit or loss 142 (97) (59) 14 -
As at 31 December 2023 873 171 (59) (985) -
Credit to profit or loss 53 (27) 59 (85) -
As at 31 December 2024 926 144 - (1,070) -
The Group has tax losses carried forward of approximately £7,990,000 (2023:
£5,403,000) and an unrecognised deferred tax asset of £929,000 (2023:
£456,000) in respect of these. The net asset has not been recognised as it is
not yet considered sufficiently probable, in the short term, that the asset
will be realised. The tax losses carried forward have no expiry date.
The Company has tax losses carried forward of £1,820,000 (2023: £1,182,000)
and an unrecognised deferred tax asset of £456,000 (2023: £296,000) in
respect of these. The deferred tax asset has only been recognised as far as it
offsets the deferred tax losses due to the timing of the when the tax will
materialise, so it is appropriate to net them off.
25 Share capital
The movements in share capital have been as follows:
Company and Group Number of £0.01 shares Nominal Share premium
£'000 £'000
At 31 December 2022 and 2023 15,459,714 154 6,966
EIS and VCT placing shares issued at £0.40 each 2,765,375 28 965
At 31 December 2024 18,225,089 182 7,931
The Company was incorporated with one £0.01 share and on 2 February 2022
issued 9,999,999 £0.01 shares in exchange for all of the issued share capital
in Strip Tinning Limited. Merger relief arises under the Companies Act from a
share premium and in accordance with IAS 27 for such a transaction with no
change in control, the consideration was recorded at the Strip Tinning Limited
net asset value of £3,745,000 (£0.375 per share) in the company, £100,000
of nominal share capital and a merger reserve of £3,645,000.
The issue of shares with a nominal value of £100,000 in exchange for the
2,000 £0.10 shares in Strip Tinning Limited with a nominal value of £200
resulted in a debit to a merger reserve of £99,800 in the consolidated
financial statements, presented as a capital reorganisation after
consolidating applying the merger accounting principles as set out in note 2.
On 15 January 2024, 2,765,375 £0.01 ordinary shares were issued at £0.40
each, totalling £1,106,150. The issue of these shares in resulted in a
share premium of £965,000 (net of £113,000 of share issue costs).
All £0.01 ordinary shares rank equally with the right to receive dividends
and capital distributions.
26 Share based payment
Options over parent company shares under a Long Term Incentive Plan were
granted in February 2022 with an exercise price of £0.01. These were subject
to a three year vesting period. Options over 122,702 shares required a total
shareholder return ('TSR') target to be achieved and 129,188 earnings and
gross profit targets to be achieved. 42,162 of those subject to a TSR return
and 42,162 subject to earnings targets lapsed when the director left on 31
March 2022, with another 36,484 of those subject to a TSR return and 36,484
subject to earnings targets lapsed when a second director left on 1 August
2024. The respective fair values of £1.49 (TSR market condition and
probability applied) and £0.00 (earnings target conditions) have been
calculated using a Monte Carlo option pricing model applying the three year
vesting period, share price of £1.85 at date of grant, a risk free rate of
2%, expected dividends of nil and estimated volatility of 100% with a £14,000
(2023: £25,000) charge in the year.
Further options under the LTIP plan were granted in May 2022 with an exercise
price of £0.01. These were subject to a three year vesting period. Options
over 30,270 shares required a total shareholder return ('TSR') target to be
achieved and 56,216 earnings and gross profit targets to be achieved. The
respective fair values of £0.32 (TSR market condition and probability
applied) and £0.00 (earnings target conditions) have been calculated using a
Monte Carlo option pricing model applying the three year vesting period, share
price of £1.475 at date of grant, a risk free rate of 2%, expected dividends
of nil and estimated volatility of 18.6% with a £7,000 credit (2023: £7,000
charge) in the year.
On 2 November 2022, employees were granted a total of 322,345 of free shares
subject to a three year vesting period. The fair value of £0.725 per share
has been calculated using a Black Scholes option pricing model applying the
three year vesting period, share price of £0.725 at date of grant, a risk
free rate of 2%, expected dividends of nil and estimated volatility of 50%
with a £76,000 (2023: £74,000) charge in the year.
On 3 March 2023, 960,908 options under the LTIP plan were granted with an
exercise price of £0.01. These were subject to a three year vesting period.
Options over 480,454 shares required a total shareholder return ('TSR') target
to be achieved and 480,454 operating profit targets to be achieved. 85,909 of
those subject to a TSR return and 85,909 subject to earnings targets lapsed
when the director left on 1 August 2024. The respective fair values of £0.31
(TSR market condition and probability applied) and £0.00 (earnings target
conditions) have been calculated using a Monte Carlo option pricing model
applying the three year vesting period, share price of £0.55 at date of
grant, a risk free rate of 2%, expected dividends of nil and estimated
volatility of 55.8% with a £35,000 (2023: £36,000) charge in the year.
On 13 August 2024, 760,000 options under the LTIP plan were granted with an
exercise price of £0.01. These were subject to a twenty eight month vesting
period. Options over all 760,000 shares required a total shareholder return
('TSR') target to be achieved. The respective fair values of £0.29 (TSR
market condition and probability applied) has been calculated using a Monte
Carlo option pricing model applying the twenty eight month vesting period,
share price of £0.43 at date of grant, a risk free rate of 5%, expected
dividends of nil and estimated volatility of 75.2% with a £31,000 (2023:
£nil) charge in the year.
In view of the short period since listing for some options listed above,
volatility was estimated at 100% to give the most prudent valuation, this does
not have a material impact on the valuation. Unexpired options have an average
vesting period remaining at 31 December 2024 of 1.4 years (2023: 1.9 years).
Share based payments detailed above total a charge of £149,000 in the year,
the total referenced in the Consolidated Statement of Changes in Equity is
£97,000. The difference of a £52,000 credit in the year relates to old
options no longer active.
26 Share based payment (continued)
The movements in share options have been as follows:
Weighted average exercise price PSP Employee free share scheme
£ scheme
Number Number
As at 31 December 2023 0.008 1,214,959 322,345
Lapsed in the year (244,790) -
Exercised by good leavers - -
Granted in the year 244,790 -
As at 31 December 2024 0.008 1,214,959 322,345
Lapsed in the year (277,218) -
Exercised by good leavers - -
Granted in the year 760,000 -
As at 31 December 2024 0.008 1,697,741 322,345
27 Capital commitments and contingent liabilities
The Group had capital commitments contracted but not provided for of £568,000
at 31 December 2024 (2023: £nil). The Company had no capital commitments.
28 Control and related party transactions
At 31 December 2024, the Company was an ultimate parent company. Mr R Barton
was considered to be the ultimate controlling party. The key management
personnel is considered to be the directors. Please refer to note 7 for
details of key management personnel remuneration.
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