REG - Strip Tinning Hldgs - Interim Results
20/09/2022 07:00
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RNS Number : 9320Z Strip Tinning Holdings PLC 20 September 2022
20 September 2022
Strip Tinning Holdings plc
("Strip Tinning" or the "Company")
Interim Results
Strip Tinning Holdings plc (AIM: STG), a leading supplier of specialist
connection systems to the automotive sector, is pleased to announce the
unaudited results for Strip Tinning Limited ("STL") the Group's wholly owned
operating subsidiary for the six months ended 30 June 2022(1).
Key Financials:
· Total Revenues of £4.7m (H1 2021 :£5.8m)
· EV product sales of £0.6m (H1 2021: £0.1m)
· Glazing product sales of £4.1m (H1 2021: £5.7m)
· Combined Gross Margin of £0.4m / 9% (H1 2021: £2.3m / 40%)
· Like for like adjusted(2) EBITDA loss of £1.4m versus profit of
£1.1m in H1 2021
· Reported loss after tax of £2.5m compared to reported profit on
£0.1m in H1 2021
· Cash of £3.1m with asset finance borrowings of £1.5m (Net cash
£1.6m positive versus negative £0.7m in H1 2021)
· Basic EPS of (£0.18)(3) (H1 2021: £0.01(4))
(1)The Company was incorporated on 6 January 2022 as Strip Tinning Holdings
Limited and on 7 February re-registered as public company changing its name to
Strip Tinning Holdings plc, ahead of its admission to AIM. The Company is the
holding company of the Group. Save for the Company and STL there are no other
companies within the Group.
(2)adjusted for FX impacts, share based payments, and IPO exceptionals plus
£0.2m of PLC costs not relevant in H1 2021
(3)based on weighted average shares
(4)based on shares in Strip Tinning Limited immediately prior to IPO
Operational updates:
· Increased sales across EV side of the business highlight the
continuing focus of vehicle manufacturers on electric ranges, a continuing
trend which the Company is well-positioned to benefit from
· 10-year supply agreement for €3m incremental Busbar sales with
second biggest customer
· Glazing revenues hampered due to the deterioration in the automotive
sector as a result of well publicised external factors heightened by Russia's
invasion of Ukraine
· Prudent action taken to accelerate the capture of the EV opportunity
as well as profitability in Glazing, with investment into people, operations
and product
· Strengthened management team with extensive experience within the
sector
Post period end developments:
· Confirmation of successful government grant application worth
£1.4m, over the period to January 2024, to support production scale up of the
EV business
· Successful set-up of employee Share Incentive Plan, comprising a free
share award based on length of service for all employees with service of 6
months as at 30 September 2022 to reward loyalty and aid retention of key
skills
· Termination of contract with a Croatian electric vehicle technology
innovator for the supply of cell management systems to a leading German OEM
· Subsequent to successful delivery and completion of milestones on
major EV series production programme, Purchase Order for £0.5m received for
next build phase
· 5-year nomination to provide Glazing connectors for panoramic roofs
of the new range of electric BMW iX vehicles expected to generate revenues for
FY 2023 of c. $1.2m
· Securing a low volume, high margin prototype order from a EV new
entrant
Board Changes
· Adam Robson to move to Executive Chairman with immediate effect
· Appointment made in order to leverage Adam's long standing
relationships within the sector and explore partnerships to accelerate EV
division progress
Richard Barton, Group Chief Executive Officer of Strip Tinning, commented:
"In spite of a challenging backdrop, in which the automotive sector has
sharply declined amidst sector-wide headwinds, the Board still retains a
strong degree of confidence in the medium-term prospects of the business,
typified by the recent £1.4 million government grant award, which will be
used to scale up EV production and increase market share.
Although the EV contract termination request is an undoubted setback for the
EV division as it provided a visible validation of the Strip Tinning EV
product offering, the business is working hard to ensure that the contract is
respected and a fair settlement is reached. With a fast-growing pipeline
across the EV side of the business, we look forward to progressing further and
continuing on our growth trajectory.
The Glazing side of our business has been impacted by the wider decline in the
automotive sector, catalysed by global supply chain disruptions, higher
inflation in material and labour costs, Russia's invasion of Ukraine and
Covid-19 lockdowns in Shanghai, all only partially offset by price increases.
That said, thanks to operational adjustments and productivity improvements, we
are starting to see an improving picture and progress made in sales
developments but we continue to monitor progress carefully with a view to
optimising the focus of our activities across Glazing and EV.
We are strengthened by a robust cash position, an established reputation
within the automotive sector and a highly experienced management team. I am
confident in the continued growth of our EV division and further improvements
in Glazing."
Enquiries:
Strip Tinning Holdings
plc
Via Alma PR
Richard Barton, Chief Executive
Officer
Adam Le Van, Chief Financial Officer
Singer Capital Markets (Nominated Adviser and Sole
Broker) +44 (0) 20
7496 3000
Rick Thompson
Will Goode
Alex Bond
James Fischer
Alma PR (Financial
PR)
striptinning@almapr.co.uk
Josh
Royston
+44 (0) 20 3405 0205
Joe Pederzolli
Chief Executive's Report
Introduction
I would like to take this opportunity to thank our shareholders for their
continued support and advice. In the face of what has been a challenging
backdrop, in which the business has had to deal with the implications of
Russia's invasion of Ukraine, spiralling inflation, and the softening of the
automotive sector, to have such continuing support is highly appreciated and
an endorsement of Strip Tinning's significant growth potential.
Although the business has not been able to advance as quickly as we would have
liked in some areas, and has had a setback in EV, there is plenty to be
optimistic about. The strength of our relationships with our Glazing customers
built over many years remain very strong and we are confident that this line
of our business will recover in line with the wider recuperation of the
automotive sector. We are seeing a strong pipeline of opportunities within the
EV division and are well positioned to exploit the opportunities which we
anticipate to receive in such a fast-growing space.
I am delighted that Adam Robson has agreed to take on an executive role within
the business. As a Board we have been impressed by his automotive experience
and believe that he can add significant value in a more hands on role,
particularly in identifying and progressing potential partnership
opportunities that could accelerate our growth in the EV market.
I would also like to take this opportunity to thank the entire Strip Tinning
team for their continued hard work. In the face of an unprecedented backdrop,
the resilience of the business reflects the quality and diligence of all our
people and on behalf of the Board, I wish to offer them my sincere thanks.
Review of Operations
EV
EV revenues in H1 increased to £0.6m (H1 2021: £0.1m) reflecting strong
progress on this side of the business, and the Company is well-positioned to
exploit further growth opportunities within the fast-growing EV space. The
request to terminate the contract signed in December 2021 with a technology
developer to supply series production parts to a major German OEM with a Start
of Production date in H2 2023 is clearly disappointing. Negotiations have
begun with the contracted party to settle the liabilities arising from the
decision and we will provide further information as these progress.
This aside, the opportunity for the EV division continues to grow and we
remain very confident in its future. All other EV programmes are progressing
towards expected milestones, with indications that volumes will exceed
original forecasts. During H1 we started shipping production parts to two
customers for use on their niche high performance vehicles, and we have
received the nomination to supply the production parts on a third niche
vehicle. We also continued to deepen our connection with our key UK
technology development customers, with whom we have nominations to supply the
production parts on five vehicles and from who we have had orders worth £0.9m
for samples to be delivered in 2022. Beyond these customers, we have a further
four projects for major OEM customers with whom we are actively engaged at the
quotation stage. In the first half of the year we started working with a
German business development adviser who is helping us to market our growing
proposition within the EV market. He has proved instrumental in our progress
with these new major potential European OEM customers.
The recent government funded grant award of £1.4 million through the Advanced
Propulsion Centre ("APC") Scale-up Readiness Validation ("SuRV") competition
underpins this confidence and is the foundation for further grant
applications, the first of which under the APC's Faraday programme we have
applied for in partnership with one of our key UK customers. The grant will be
used in its totality to fund the development and validation of a pilot
production system for the manufacturing of our Cell Contacting and Management
System (CCMS) product, and will be received via six quarterly drawdowns
covering the period to end of January 2024. The CCMS product is an integral
part of the power electronics system in battery electric vehicles, providing
electrical connectivity and utilising an array of sensors and other surface
mount electronics devices to monitor the performance and safety of batteries.
The project will produce a pilot production line capable of 80,000 units per
year, presenting a clear route to scale up and increased market share. The
Company continues to explore further grant opportunities.
Glazing
Revenues in Glazing decreased to £4.1m (H1 2021: £5.7m) due to the
macro-economic conditions which continue to affect the automotive industry.
Despite these challenges, our relationships with our customer base built over
many years remain particularly strong and we do not believe that there has
been any impact to Strip Tinning's market share. As well as reduced volumes in
the first half of the year, margins have been impacted by higher costs of raw
materials, labour, energy and shipping. They have also suffered from an
adverse mix change as customers have destocked busbar during the early months
of the year.
Despite these difficulties, there continue to be a number of reasons for
optimism within the Glazing division. Mark Perrins joined us as Managing
Director of the division in February in line with our plans stated at the time
of IPO. Mark brings with him 20 years of Tier 1 automotive senior management
production experience, with a particular focus on quality and process
improvement. Since joining and as part of a review into our product ranges, he
has been identifying those areas in which we can most effectively invest and
focus our improvement activities, as well as those that are most difficult to
improve.
Alongside the previously announced 10 year deal for increased Busbar volumes
with Sisecam Automotive worth an incremental €0.3m per year, we have also
commenced trials with a potential new busbar customer which provides an
opportunity for significant growth. Furthermore, the Company will benefit in
H2 and beyond from price increases agreed with customers coming into effect.
Our growing reputation for delivering innovative connectors to the EV market
was also evidenced by the award in July of a 5 year nomination for a BMW
electric vehicle line. This contract is due to commence in Q4 of FY22 and is
expected to generate revenues for the full year ending 31 December 2023 of
circa $1.2 million. Additionally, we were pleased to announce a 45% connector
volume uplift on a 5-year nomination for use across the Skoda electric vehicle
range.
We plan to increasingly focus on higher margin products where we can generate
a return in spite of higher raw material, energy and labour costs, whilst
retaining the ability to ramp up production across all product ranges when
conditions normalise.
Outlook
Sales in the second half of 2022 continue to improve. However, the rate of
market recovery has been slower than previously envisaged and the business has
now also stopped production of some low margin Glazing products.
EBITDA losses have been steadily reducing and this trend is expected to
materially continue into the second half of 2022. However, with lower sales
than previously anticipated and harsher headwinds from market weakness, high
inflation and slower progress than expected on automation, the Board still
expects that EBITDA in the second half of 2022 will remain negative.
Beyond 2022, external headwinds are expected to remain and trading in the
Glazing business overall will remain challenging. However, the Board believes
that further improvements can be made and that the business is well placed to
benefit as these changes are delivered into 2023 when eventually the headwinds
ease and conditions normalise.
The loss of the EV production supply contract with the technology developer
will have a minimal impact this financial year, but the short-term outlook for
the EV division is subject to ongoing discussions with the customer to resolve
contractual liabilities.
The medium to long-term prospects for the EV division and the Group as a whole
continue to be very positive as discussed above. With our reputation for
innovation and excellence, our world-class customer base and increasing
exposure to the fast-growing EV industry, we are well placed to succeed.
Financial Review
Unaudited six months ended 30 June Unaudited six months ended 30 June
2022 2021
£'000 £'000
Revenue 4,677 5,815
Gross profit 410 2,351
EBITDA (1,420) 1,087
PLC costs (216)
Exceptional IPO related expenses (382) (91)
Other Exceptional expenses (91)
FX 43 (114)
Share Based Payments (62) (38)
Depreciation (687) (342)
Amortisation 13 (69)
Operating Profit / (Loss) (2,802) 433
Glazing sales declined £1.6m / 28% compared to H1 2021. This decline
reflected the overall 14% reduction in passenger vehicle registrations versus
the comparable period in 2021 reported by ACEA, compounded by Strip Tinning's
direct exposure to 3 glazing plants owned by multinational glazing customers
located in Russia which have not been calling off product following the
Russian invasion of Ukraine.
Busbar accounted for £1.3m of the sales decline as customers unwound stock
holdings from 2021 with the declines in the production of new vehicles. This
had a significant impact on overall gross margin for the group in H1.
In common with the wider economy, the business has experienced significant
inflationary pressures for materials (metals and plastics). London Metal
Exchange (LME) copper and tin prices peaked in H1 2022 at US$10,730 /
US$50,050 at 15% / 53% higher respectively than 2021 averages. By 30th June
2022, prices had fallen back to US$8,245 / US$27,050 (below 2021 average
prices) and the LME stock index had increased. This indicated less demand
pressure, which is a positive, especially in conjunction with the additional
sources of supply the business has been developing to diversify supply and
improve pricing. The weakening of the £ versus the € and US$ is also
helpful to cash flows as the majority of sales are in these currencies versus
the majority of costs remaining in GBP.
The tight labour market in the UK has also resulted in the need for over-time
and more expensive agency staff to cover production staffing requirements. The
well-publicised cost of living pressures have led to an average pay rise of
6%, lifting production worker pay above the National Living Wage, to assist
with retention and recruitment. Investment into engineering, quality and
programme management has also increased administrative costs. Direct labour
costs have been, and remain, the biggest challenge to profitability in the
glazing connector business, particularly as disruption to planned production
from material or staff shortages inevitably leads to premium freight costs to
ensure customer schedules are met.
The reduced sales and gross margin % therefore provided insufficient
contribution to cover the overhead cost base that has been built up in the
previous 12 months to support the EV growth strategy and PLC structure,
resulting in the £1.6m EBITDA loss for the period (inclusive of all PLC costs
incurred).
Cash stood at £3.1m as at 30 June 2022. Together with the government grant
award to assist with the scale-up of the EV business and R&D Tax Credit
claims in preparation, this underpins the investment programme to meet the
requirements of customers.
Statement of Comprehensive Income for the six months ended 30 June 2022
Note Unaudited Six months ended 30 June Unaudited
2022 Six months ended 30 June
2021
£'000 £'000
Revenue 3 4,677 5,815
Cost of sales (4,267) (3,464)
Gross profit 410 2,351
Other operating income - 17
Administrative expenses excluding exceptional costs (2,830) (1,844)
Exceptional IPO related expenses 4 (382) (91)
Total administrative expenses (3,212) (1,935)
Operating (loss)/profit (2,802) 433
Finance costs (81) (64)
(Loss)/profit before taxation (2,883) 369
Taxation 5 412 (248)
(Loss)/profit and total comprehensive (expense)/income for the period
(2,471) 121
(Loss)/earnings per share (pence)
Basic and diluted 7 (17.8) 1.21
Consolidated statement of Financial Position as at 30 June 2022
Notes Unaudited 30 June 2022 Audited 31 December 2021 Unaudited
30 June 2021
£'000 £'000 £'000
ASSETS
Non-current assets
Intangible assets 1,489 1,561 1,080
Right-of-use assets 1,287 1,142 1,161
Property, plant and equipment 2,936 3,089 3,003
5,712 5,792 5,244
Current assets
Inventories 2,316 2,014 2,090
Trade and other receivables 2,155 3,778 2,622
Corporation tax receivable 353 279 90
Cash and cash equivalents 3,134 337 566
7,958 6,408 5,368
Total assets 13,670 12,200 10,612
LIABILITIES
Current liabilities
Trade and other payables (1,678) (4,413) (1,991)
Hire purchase liabilities (567) (559) (490)
Lease liabilities (177) (152) (104)
(2,422) (5,124) (2,585)
Non-current liabilities
Accruals and deferred income (137) (162) (219)
Hire purchase liabilities (945) (1,235) (815)
Lease liabilities (1,099) (1,104) (1,165)
Provisions 8 (222) - -
Deferred tax liabilities - (338) (835)
(2,403) (2,839) (3,034)
Total liabilities (4,825) (7,963) (5,619)
Net assets 8,845 4,237 4,993
EQUITY
Share capital 9 151 100 100
Share premium account 6,966 - -
Merger reserve (100) (100) (100)
Retained earnings 1,828 4,237 4,993
Total equity 8,845 4,237 4,993
Consolidated statement of changes in equity
Share Share Merger reserve Retained earnings Total equity
capital premium
£'000 £'000 £'000 £'000 £'000
At 1 January 2021 100 - (100) 5,104 5,104
Profit and total comprehensive income for the period
- - - 121 121
Share based payment - - - 38 38
Dividends paid - - - (270) (270)
At 30 June 2021 100 - (100) 4,993 4,993
Loss and total comprehensive expense for the period - - - (946) (946)
Share based payment - - - 107 107
Share options deferred tax credit 225 225
Dividends paid - - - (142) (142)
At 31 December 2021 100 - (100) 4,237 4,237
Loss and total comprehensive expense for the period - - (2,471) (2,471)
Shares issued in the period 51 6,966 - - 7,017
Share based payment - - - 62 62
At 30 June 2022 151 6,966 (100) 1,828 8,845
Consolidated statement of cash flows for the six months ended 30 June 2022
Unaudited Six months ended 30 June 2022 Unaudited
Six months ended 30 June 2021
£'000 £'000
Cash flow from operating activities
(Loss)/profit for the financial period (2,471) 121
Adjustment for:
Depreciation of property, plant and equipment 285 267
Depreciation of right-of-use assets 171 75
Amortisation of intangible assets 229 84
Amortisation of government grants (13) (15)
Share based payment 62 38
Finance costs 81 64
Taxation (credit)/charge (412) 248
Changes in working capital:
(Increase) in inventories (302) (568)
Decrease/(increase) in trade and other receivables 1,623 (449)
(Decrease)/increase in trade and other payables (2,707) 641
Cash (used in)/generated from operations (3,454) 506
Income tax paid - -
Net cash (used in)/from operating activities (3,454) 506
Cash flow from investing activities
Purchase of property, plant and equipment (132) (357)
Purchase of intangible assets (157) (144)
Net cash used in investing activities (289) (501)
Cash flow from financing activities
Shares issued (net of issue costs) 7,017 -
Dividends paid to shareholders - (270)
Interest paid (81) (64)
Payment of lease liabilities (114) (57)
Repayment of capital element of hire purchase contracts (282) (278)
Net cash generated from/(used in) financing activities 6,540 (669)
Increase/(decrease) in cash and cash equivalents 2,797 (664)
Net cash and cash equivalents at beginning of the period 337 1,230
Net cash and cash equivalents at end of the period (all cash balances)
3,134 566
Notes to the interim financial statements for the six months ended 30 June
2022
1. Corporate information
Strip Tinning Holdings plc is a public company incorporated in the United
Kingdom. The registered address of the Company is Arden Business Park, Arden
Road, Frankley Birmingham, West Midlands, B45 0JA.
The principal activity of the Company and its subsidiary (the 'Group') is the
manufacture of automotive busbar, ancillary connectors and flexible printed
circuits.
2. Accounting policies
Basis of preparation
This unaudited consolidated interim financial information for the six months
ended 30 June 2022 and 30 June 2021 has been prepared in accordance with IFRS
as adopted by the United Kingdom including IAS 34 'Interim Financial
Reporting'.
The accounting policies applied by the Group include those as set out in the
financial statements for the subsidiary company, Strip Tinning Limited, for
the year ended 31 December 2021 and are consistent with those to be used by
the Group in its next financial statements for the year ending 31 December
2022. In addition to the policies presented in the 2021 financial statements,
the Group will apply the policies below applicable to consolidated financial
statements and the Company becoming the parent company for Strip Tinning
Limited. There are no new standards, interpretations and amendments which are
not yet effective in these financial statements, expected to have a material
effect on the Group's future financial statements.
The financial information does not contain all of the information that is
required to be disclosed in a full set of IFRS financial statements. The
financial information for the six months ended 30 June 2022 and 30 June 2021
is unreviewed and unaudited and does not constitute the Group or Company's
statutory financial statements for those periods.
The comparative financial information for the full year ended 31 December 2021
has, however, been derived from the audited statutory financial statements for
Strip Tinning Limited for that period. A copy of those statutory financial
statements has been delivered to the Registrar of Companies. The auditor's
report on those accounts was unqualified and did not contain a statement under
section 498(2)-(3) of the Companies Act 2006.
These policies have been applied consistently to all periods presented, unless
otherwise stated.
The interim financial information has been prepared under the historical cost
convention with the exception of the fair values applied in accounting for
share based payments. The financial information and the notes to the
historical financial information are presented in thousands of pounds sterling
('£'000'), the functional and presentation currency of the Company, except
where otherwise indicated.
Merger accounting and consolidated financial statements
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. 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 entity. Intercompany
transactions and balances between Group companies are therefore eliminated in
full. The share capital presented is that of Strip Tinning Holdings plc with
the difference on elimination of Strip Tinning Limited's capital being shown
as a merger reserve.
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.
Going concern
The directors have considered the principal risks and uncertainties facing the
business, along with the company's objectives, policies and processes for
managing its exposure to financial risk. In making this assessment the
directors have prepared cash flows for the foreseeable future, being a period
of at least 12 months from the expected date of approval of the financial
information. These forecasts show that the Company should be able to manage
its working capital and existing resources to enable it to meet its
liabilities as they fall due.
Based on the above factors, the directors have prepared the interim financial
information on a going concern basis.
3. Segmental and geographical destination reporting
IFRS 8, Operating Segments, requires operating segments to be identified on
the basis of internal reports that are regularly reviewed by the company's
chief operating decision maker. The chief operating decision maker is
considered to be the executive Directors.
The Group previously comprised only one operating segment for the sale of
automotive circuit components for glazing products. 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.
However, the Company has commenced the development and initial sales of
products for electric vehicles ('EV') which are expected to grow to be a
material segment. Separate management reporting and information has now been
prepared in the period to 30 June 2022 at a revenue and gross profit level
only as follows:
Glazing EV Total
6 months ended 30 June 2022 £'000 £'000 £'000
Revenue 4,089 588 4,677
Cost of sales (3,736) (529) (4,265)
Gross profit 353 57 410
Some estimated information for EV was derived for the six months ended 30 June
2021 showing sales of £135,000, net costs of about £260,000 and hence a loss
of £125,000 as a result of the increasing investment and development in this
area.
In the six months ended 30 June 2022 the company had 4 major customers who
represented
22%, 19%, 12% and 8% of revenue (2021:4 customers who represented 27%, 17%,
14% and 9% of revenue).
All revenue arises at a point in time and relates to the sale of automotive
busbar, ancillary connectors and flexible printed circuit product. Turnover by
geographical destination is as follows:
Six months ended 30 June 2022 Six months ended 30
June 2021
£'000 £'000
Europe 3,260 2,886
Rest of the World 1,417 2,929
4,677 5,815
4. Exceptional costs
Six months ended 30 June 2022 Six months
ended 30
June 2021
£'000 £'000
IPO related costs 382 91
The directors consider that the specific professional fees and costs incurred
in preparation for the IPO and connection with the admission process are
exceptional as they are non-recurring in nature and not related to the
underlying trading. The majority of the fees (£1.077m) have been taken
against share premium as they relate to the new shares issued, with the
balance expensed and classified as an exceptional cost.
5. Income tax
Six months ended 30 June 2022 Six months ended 30
June 2021
£'000 £'000
Current tax:
UK corporation tax 74 (18)
Total current tax credit/(charge) 74 (18)
Deferred tax:
Origination and reversal of temporary differences 338 (29)
Effect of change in tax rate on opening liability - (201)
Total deferred tax credit/(expense) 338 (230)
Total tax credit/(charge) 412 (248)
The (credit)/charge for the year can be reconciled to the (loss)/profit for
the year as follows:
Six months ended 30 Six months ended 30
June 2022 June 2021
£'000 £'000
(Loss)/profit before taxation (2,883) 369
Income tax calculated at 19% (2021: 19%) (548) 70
Expenses not deductible 88 22
Enhanced research and development allowances
(32) (45)
Enhanced capital allowances (6)
Deferred tax not recognised 220
Effect of change in deferred tax rate - 201
Effect of differing deferred tax and current period tax rates
(134) -
Total tax (credit)/charge (412) 248
The tax rate used to calculate deferred tax is 25% at 30 June 2022 (2021:
25%), being the rate at which the timing differences were expected to unwind
based on enacted UK corporate tax legislation at each balance sheet date.
A deferred tax asset has not been recognised for losses carried forward as,
the key accounting judgement made is that it is not yet considered
sufficiently probable that the losses will be utilised in the short term.
6. Dividends paid and proposed
Amounts recognised as distributions to equity holders in the period:
Six months ended 30 June 2022 Six months ended 30
June 2021
£'000 £'000
Interim ordinary dividends paid for the period ended 30 June 2022 of £nil per
share (2021 six months: 2.7 pence paid)
- 270
The comparative information is presented as if the 10,000,000 £0.01 shares
exchanged for the prior Strip Tinning Limited capital had been in place.
7. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Earnings Six months ended 30 June 2022 Six months ended 30 June 2021
£'000 £'000
(Loss)/earnings for the purpose of basic and diluted earnings per share being
net profit attributable to the shareholders
(2,471) 121
Six months ended 30 Six months ended 30 June 2021
June 2022
Number of shares £'000 £'000
Weighted average number of ordinary £0.01 shares for the purposes of basic
and diluted (loss)/earnings per share
13,895,056 10,000,000
There are potentially dilutive options in place over 254,051 shares at 30 June
2022 (2021: over 354 A £0.10 ordinary shares in Strip Tinning Limited
exercisable on a sale or listing. The 2021 options were subject to a hurdle
value before any entitlement to share in the capital proceeds or new shares on
a listing arises and it was considered that they were not dilutive in the
period to 30 June 2021).
8. Provisions
The dilapidations provisions have been reassessed 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 under the standard terms in the
contracts. This primarily results in an increase in the amount recognised in
respect of the right of use assets for property and in the discounted
provisions liability of £222,000 at 30 June 2022.
9. Share capital
The movements in share capital have been as follows:
Number of £0.01 shares Nominal Share premium
£'000 £'000
Share issued on incorporation 1 - -
Shares issued in exchange for Strip Tinning Limited shares 9,999,999 100 -
EIS and VCT placing shares issued at £1.85 each 2,702,702 27 4,973
Other placing shares issued at £1.85 each 1,621,622 16 2,984
Exercise of options at £0.116 each 813,045 8 86
Share issue costs (1,077)
15,137,369 151 6,966
The issue of shares resulted in a share premium of £6,966,000 (net of
£1,077,000 of share issue costs).
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
results in a debit to a merger reserve of £99,800, after consolidating
applying merger accounting principles as set out in note 2.
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