RNS Number : 9328Z
CT Automotive Group PLC
20 September 2022
 


20 September 2022

 

CT AUTOMOTIVE GROUP PLC

("CT Automotive" or the "Group")

 

H1 2022 RESULTS

 

Revenues ahead in H1, production recovery gaining momentum

 

CT Automotive, a leading designer, developer and supplier of interior components to the global automotive industry, today announces its results for the half year ended 30 June 2022 ("H1 2022").

 

Financial Highlights

 

 

H1 22

H2 21

H1 21

 

$m

$m

$m

Revenue

57.2

58.3

74.7

Gross profit

10.6

9.5

19.5

Adjusted EBITDA*

(4.3)

0.5

8.8

Adjusted EBIT*

(7.3)

(2.0)

3.2

(Loss)/profit after taxation

(7.7)

(8.4)

2.1

Earnings per share

(15.2)c

(39.7)c

10.5c

Net debt

20.2

9.5

56.6

* Adjusted for non-recurring items

 

Due to the semi-conductor shortage, 2021 was a year of two halves with strong revenue in H1 followed by a slowdown in H2. The shortage continued into 2022 and therefore 2022 was expected to be a mirror image with a suppressed H1 followed by a strong recovery in H2. We have therefore used H2 2021 as our most meaningful comparative.

 

·     Group revenue was ahead of original expectations and broadly flat compared to H2 21:

Production revenue was up 19.3% to $55.3m (H2 21: $46.4m)

Tooling revenue was only $1.9m which reflected timing of revenue recognition of certain projects which are still expected to be completed before year end

·     Investment made in working capital to support future growth and in initiatives to unlock long term cash savings

·     Latest customer schedules indicate a recovery of volumes in H2 2022 could be ahead of the Board's original expectations by the end of the year

 

Operational highlights

 

·     Cost saving activities implemented within the period will see benefits start to be realised in H2 22

·     Lockdowns in China and the Ukraine conflict have caused disruption to production in H1

·     Inflationary pressures continue but customer pricing mechanisms are providing mitigation through selling price rises

·     New Supply Chain Director delivering savings and subsequently promoted to COO

·     New customer wins including electric vehicle makers Rivian and e.GO

·     New manufacturing plant in Mexico on track to supply customers in Q3

 

Current trading and outlook

 

·     Both customer schedules and external forecast data continue to support the expectation that automotive volumes will recover through late 2022 and supply chain issues will fully resolve in 2023

·     Semi-conductor shortages are no longer the key restricting factor with restrictions now coming from the recovery of the wider supply chain which is ongoing

·     Cost saving and efficiency focus following the IPO will enhance future margins

·     There is no change to the Board's expectations for FY22

 

 

Scott McKenzie, Chief Executive Officer of CT Automotive, commented:

 

"We were pleased to achieve revenues ahead of our expectations in the first half and have made good progress with our growth initiatives, including new customer wins, expansion of our manufacturing facilities and improved efficiencies to drive margin expansion.

 

Looking ahead, there are positive signs that OEM supply chain issues are starting to be resolved and schedules are strengthening. Despite the continued market and macroeconomic uncertainty, the Board remains confident of achieving its expectations for the year and delivering significant growth over the coming years."

 

For further information, please contact:

 

CT Automotive                                                                                                           via MHP

Simon Phillips, Executive Chairman

Scott McKenzie, Chief Executive Officer

David Wilkinson, Chief Financial Officer

 

MHP Communications (Financial PR)                                                  Tel: +44 (0)20 3100 8540

Tim Rowntree                                                                                      CTAutomotive@mhpc.com

Charlie Barker

 

Liberum (Nominated Adviser and Broker)                                          Tel: +44 (0)20 3100 2000

Richard Lindley

Benjamin Cryer

 

Notes to editors

 

CT Automotive is engaged in the design, development and manufacture of bespoke automotive interior finishes (for example dashboard panels and fascia finishes) and kinematic assemblies (for example air registers, arm rests, deployable cup holders and storage systems), as well as their associated tooling, for the world's leading automotive original equipment suppliers ("OEMs") and global Tier One manufacturers.

 

The Group is headquartered in the UK with a low-cost manufacturing footprint. Key production facilities are located in Shenzhen and Ganzhou, China complemented by additional manufacturing facilities in Turkey and the Czech Republic.

 

CT Automotive's operating model enables it to pursue a price leadership strategy, supplying high quality parts to customers at a lower overall landed cost than competitors. This has helped the Group build a high-quality roster of OEM end customers, both directly and via Tier One suppliers including Faurecia and Marelli. End customers include volume manufacturers, such as Nissan, and luxury car brands such as Bentley and Lamborghini. In addition, the Group supplies electric car manufacturers, including Lucid.

 

The Group currently supplies component part types to over 47 different models for 19 OEMs. Since its formation, the Group has been the only significant new entrant into the market, which is characterised by high barriers to entry.

 

Use of alternative performance measures

 

The commentary uses alternative performance measures, which are described as "Adjusted". An explanation of the items identified as non-recuring and that have been adjusted can be found in Note 4 of the condensed consolidated financial statements.

 

Chief Executive Officer's Review

 

Operational review

 

The Group's trading performance for the first half of 2022 saw revenue ahead of original expectations as the automotive supply chain bottlenecks began to ease, but a challenging operating environment, including further COVID related shut-downs in China, led to additional costs. Group loss after tax was $7.7m, driven by ongoing disruption to production schedules caused by the supply chain issues and additional costs incurred as a result of a number of one-off events, as further described below and notified in the August 2022 trading update.

 

During H1 there has been a focus on deploying the funds raised at IPO to secure future cost savings and ensuring key strategies are implemented to prepare the business for the automotive market recovery which is already building momentum in H2.

 

Key initiatives focused on internal cost improvements, inflation-based customer recoveries and cash flow have been implemented within the period and continue to be progressed. We expect to see the initial benefit of these initiatives in H2 2022 before realising the full benefits in 2023. This has been supported by the recruitment of Stuart Lorraine as our Global Supply Chain and Commercial Director in March 2022, which we announced in our May 2022 FY21 Full Year Results announcement. Stuart has a wealth of experience within the industry including previously working at OEMs and has been central to leading on implementing this work. As a result, Stuart was promoted to the role of Chief Operating Officer (non plc board) in June 2022 with a wider operational oversight mandate.

 

Looking at the performance of key divisions:

 

Production

 

We saw encouraging growth in the production division in H1 2022 of 19.3%, compared to H2 21, to $55.3m, as the semi-conductor shortage began to ease and wider supply chain issues started to resolve, supporting the beginning of the recovery in customer volumes. Heading into H2 we are seeing the recovery continue and by the end of the year schedules could be running ahead of our original expectations for 2022.

 

Our operations in China were impacted by the COVID lockdowns in Shanghai which caused disruptions to both inbound and outbound freight for a period. The inbound issues meant that certain materials were delayed which in turn caused disruption to our production lines. In order to avoid shortages of product at customer sites, certain parts were required to be transported by airfreight. While we successfully negotiated to share the additional freight costs with customers, we were not able to recover in full and the Group incurred $1.6m of non-recoverable costs.

 

In addition, our sites in both the UK and Turkey experienced high-cost inflation in H1 and while an appropriate pricing mechanism has been put in place in Turkey to recover these increased costs, competitive market conditions meant this was not possible in the UK. With costs increasing and limited growth or improvement possible, as previously announced we took the difficult decision to close the UK plant and operations will cease on 30 September 2022. Production of some components in the UK has been relocated to the Group's existing overseas facilities. This decision was made in conjunction with the Group's key customer who we have worked closely with to ensure continuity of supply during the closedown period.

 

On a positive note, the development of the new plant in Mexico has continued at pace with all product launches on track with customer agreements. Since the start of 2022, the site has been secured, all construction work including an electrical upgrade has been completed and machines and equipment have been installed. Following successful trials we have entered launch phase with a team of staff from China and the UK supporting the local management in ensuring we have a fully robust and maintainable production operation.  We will start to see the benefits of the plant in our results for H2 2022 following the start of serial production supply at the end of September.

 

We have continued to focus on future growth, targeting both our existing customers to expand existing relationships, as well as adding new customers including Rivian and TOGG, a new Turkish EV manufacturer. Negotiations on new vehicles are ongoing but we have already received a number of new nominations from existing customers which we look forward to updating on nearer to vehicle launch. 

 

Engineering, Design & Development (Tooling)

 

Development of new programs continues at pace, and we continue fully utilising our internal toolroom to ensure maximum control and margins. We expect a much stronger performance in H2 2022 which we anticipate will see full year revenues in line with expectations with H1 performance the result of timing differences with revenue expected to be recognised in H2.

 

People

 

People and culture remain a core focus at CT and we continue to invest in our systems and processes to ensure our people are safe, empowered and have sufficient opportunities to develop their careers while supporting our long-term goals.

 

Outlook

 

The Board continues to expect global vehicle production volumes to recover through H2 2022 and automotive supply chain issues to resolve fully in 2023. Trading since 30 June has been in line with expectations and the latest customer production schedules are continuing to show a stronger step up in production for the Group in Q4 2022 than originally expected.

 

H2 2022 gross margin is expected to be stronger than originally forecast, with increased sales driving economies of scale within manufacturing operations as originally expected being combined with efficiency initiatives delivered since IPO. Once fully implemented, these efficiency initiatives will provide benefits to the business into FY23 and beyond. As a result of these initiatives and production volume indications the Board's expectations for FY23 remain unchanged.

 

The Board is though mindful of the possibility that the continuing macroeconomic uncertainty and any changes in timing or demand levels could impact the H2 trading performance. In addition, with China continuing to operate its "Zero COVID" policy, the risk of further disruption to the supply chain remains, albeit some mitigating actions have been taken.

 

The Group is trading in line with expectations for the year and the Board remains confident about the long-term growth prospects.

 

Financial Overview

 

Given the impact to global automotive volumes caused by the semiconductor shortage, there has been a dip in global production lasting through H2 2021 and H1 2022. As a result of this, H1 2021 is not directly comparable with H1 2022, as H1 2021 was not significantly impacted.  We therefore believe H2 2021 provides a more meaningful view of the progress of the business in this period.

 

Production revenue was $55.3m, up 19% from H2 2021 ($46.4m) though down 14.1% from H1 2021 ($64.4m) due to a combination of new launches and increased volumes on some key programs as we start to see signs of the market recovery getting underway following the slowdown in H2 2021 due to the shortage of semiconductors.

 

While H1 2022 saw a relatively low volume of completed tooling projects, generating only $1.9m of revenue which is an 81% drop compared to the $10.3m and $11.9m generated in H1 2021 and H2 2021 respectively, the projects in progress and due to complete within 2022 mean we are still confident of hitting our full year tooling revenue target.

 

Cost inflation continues to impact our direct costs, though the open book nature of our costings and mechanisms to pass those increases through mean that, subject to negotiations, we are able to protect our margins with the exception of the UK plant noted below.

 

The impact of energy cost inflation varies by country and we are fortunate that in China, where the majority of our manufacturing is based, this inflation is limited and has not had a material impact on the Group's costs. Wage inflation in China is also much less significant that what we are seeing in the UK and Europe.

 

Gross margin was 18.6%, up 2.3% from H2 2021 (16.3%) but down 7.6% from H1 2021 (26.2%) though this was impacted by a number of one-off or non-recurring items:

 

IAS 29; this is a new standard which we are required to implement as a result of hyperinflation in Turkey. In summary, the opening non-cash Balance Sheet items and monthly results of the Turkish entity have had to be re-indexed to re-state the impact of inflation. The net impact of the adjustments was a $0.4m reduction in gross margin.

 

CAS/UK plant; As previously reported, our UK plant generated a gross loss within the period. Removing these results from our figures reduces revenue by $3.0m and reduces overall gross profit by $0.6m. The original forecast for the UK Plant was to generate $0.9m so this is a $1.7m reduction overall. There will be some exceptional closure costs in H2 but we expect these to be largely covered by profits on the sale of fully written down assets.

 

Without these impacts underlying gross margin was 21.6% which is an increase of 5.3% over H2 2021 when the disruption caused by the shortage of semiconductors was at its peak.

 

Distribution costs were high as a result of $1.6m of air freight costs being incurred as a result of disruption to logistics caused by the COVID lockdowns in China, as noted above. This possibility of this repeating remains a risk due to the continued operation of the "Zero COVID" policy, but we are working with our customers to ensure that any future impacts create minimal costs for the Group.

 

Administrative expenses have increased partly due to the additional costs now being incurred as a result of being a public listed company.

 

In addition, the Group incurred foreign exchange losses of $3.0m which were largely linked to weakening GBP impacting the Market-to-market value of forward contracts as at the period end. Post period some of these unrealised losses have reversed, though currency markets remain volatile.

 

Adjusted EBIT, after adding back the non-recurring items explained in note 4 below, was a loss of $7.3m compared to a loss of $2.0m in H2 21 and a profit of $3.2m in H1 21. The key drivers behind this drop were the $1.6m of air freight costs and $3.0m of foreign exchange losses noted above, neither of which has been categorised as non-recurring. In the absence of these costs, underlying adjusted EBIT was a loss of $2.7m.

 

Financing costs have reduced substantially as a result of the debts that were repaid from the proceeds of the IPO, with remaining facilities being limited to working capital lines only.

 

Net capital expenditure during the period was $2.1m and consists of both investment in the new plant, as well as new equipment to both maintain and improve the efficiency of existing plants.

 

An investment has been made in working capital which across the period totalled $3.1m which is largely made up of a reduction in amounts owed to suppliers where extended terms had been allowed in 2021, offset by a reduction in amounts owed by customers through a combination of credit control and reducing terms.

 

Net debt at the period end was $20.2m, up from $9.5m at year end, and is higher than originally forecast, utilising the Invoice Finance facility.

 

After the period end a large ($7m) payment was received from a customer which reduced both receivables and the associated Invoice Finance balance and bringing net debt back down in line with original expectations.

 

Risks

 

The Board considers strategic, operational, financial and compliance risks and monitors them on a regular basis. Key risks and their mitigations were included on pages 30 to 33 of the last Annual Report and there are no material changes since that date.

 

 

Consolidated statement of profit or loss and other comprehensive income

 

 

 

Note

Unaudited 6 months to 30 June 2022

Unaudited 6 months to 30 June 2021

Year to 31 December 2021

 

 

$'000

$'000

$'000






Revenue

2,3

57,222

74,658

132,939

 


 



Cost of sales


(46,605)

(55,126)

(103,911)



________

________

________



 



Gross profit


10,617

19,532

29,028



 



Distribution expenses


(4,007)

(2,377)

(5,504)

Other operating income


243

846

1,478

Administrative expenses


(15,448)

(13,442)

(27,391)



________

________

________



 



EBITDA (before non-recurring items)


(4,292)

8,282

8,767

Depreciation


(1,203)

(1,379)

(2,076)

Amortisation


(1,770)

(1,755)

(3,509)

Non-recurring items

4

(1,330)

(589)

(5,571)



 



Operating (loss)/profit


(8,595)

4,559

(2,389)



 



Net monetary gain arising from hyperinflationary economies


252

-

-

Financial expenses


(881)

(2,359)

(4,476)

Share of post-tax losses of equity accounted associates


-

-

(579)



________

________

________



 



(Loss)/profit before tax


(9,224)

2,200

(7,444)

 


 



Taxation


1,484

(141)

1,108



________

________

________



 



(Loss)/profit for the year


(7,740)

2,059

(6,336)



________

________

________

Other comprehensive income


 



Items that are or may be reclassified subsequently to profit or loss:


 



Foreign currency translation differences - foreign operations


(360)

257

280



________

________

________



 



Other comprehensive income for the year, net of income tax


(360)

257

280



________

________

________



 



Total comprehensive (loss)/income for the year


(8,100)

2,316

 

(6,056)

 


________

________

________

 







 



Basic earnings/(loss) per share

5

(15.2)c

10.5c

(31.2)c

Diluted earnings/(loss) per share

5

(15.2)c

10.5c

(31.2)c

 





 

 

 

Consolidated balance sheet

 

 

Note

Unaudited as at 30 June 2022

Unaudited as at 30 June 2021

As at 31 December  2021

 

 

$'000

$'000

$'000

Non-current assets

 

 



Property, plant and equipment

6

10,035

10,296

10,307

Intangible assets

 

575

551

520

Goodwill

 

2,417

2,417

2,417

Right of use assets


8,603

6,313

6,942

Deferred tax assets


3,508

-

1,745

Investments in equity-accounted associates


-

1,620

-


 

________

________

________


 

 




 

25,138

21,197

21,931


 

________

________

________

Current assets

 

 



Inventories

7

44,272

46,710

39,779

Tax receivable

 

1,134

1,411

1,496

Trade and other receivables

8

40,852

47,498

42,782

Cash and cash equivalents

 

5,835

3,135

13,445


 

________

________

________


 

 




 

92,093

98,754

97,502


 

________

 

________

 

________

Total assets

 

117,231

119,951

119,433


 

________

________

________

Current liabilities

 

 



Other interest-bearing loans and borrowings

9

(26,057)

(40,296)

(22,865)

Trade and other payables

10

(51,270)

(60,870)

(50,044)

Tax payable

 

(516)

-

(655)

Lease liabilities

 

(2,050)

(2,683)

(2,566)


 

________

________

________



 




 

(79,893)

(103,849)

(76,130)


 

________

 

________

 

________

Non-current liabilities

 

 



Other interest-bearing loans and borrowings

9

-

(19,379)

(103)

Provisions

 

-

-

-

Lease liabilities

 

(6,436)

(4,265)

(5,041)

Deferred tax liabilities

 

-

(23)

-

 

 

________

________

________


 

 





(6,436)

(23,667)

(5,144)


 

________

________

________


 

 



Total liabilities

 

(86,329)

(127,516)

(81,274)


 

________

________

________


 

 



Net assets/(liabilities)

 

30,902

(7,565)


 

________

________

________

Equity attributable to equity holders of the parent



Share capital

 

342

132

342

Share premium

 

54,717

-

54,717

Translation reserve

 

220

557

580

Merger reserve

 

(35,812)

(35,812)

(35,812)

Retained earnings


11,435

27,558

18,332

 


________

________

________



 



Total equity

 

30,902

(7,565)

38,159


 

________

________

________

 

 

 

Consolidated statement of changes in equity

 

 

Share

Share

Translation

Retained

Merger

Total

 

capital

Premium

reserve

Earnings

reserve

equity

 

$'000

$'000

$'000

$'000

$'000

$'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 January 2021

132

-

300

25,499

(35,812)

(9,881)


 

 

 

 

 

 

Total comprehensive income for the year

 

 

 

Profit for the year

-

-

-

2,059

-

2,059

 

 

 

 

 

 

 

Other comprehensive income

-

-

257

-

-

257

 

________

________

________

________

________

________

Total comprehensive income for the year

-

-

257

2,059

-

2,316


________

________

________

________

________

________


 

 

 

 

 

 

Balance at 30 June 2021

132

-

557

27,558

(35,812)

(7,565)


________

________

________

________

________

________

 

 

 

 

 

Share

Share

Translation

Retained

Merger

Total

 

capital

Premium

reserve

earnings

reserve

equity

 

$'000

$'000

$'000

$'000

$'000

$'000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 January 2022

342

54,717

580

18,332

(35,812)

38,159


 

 

 

 

 

 

Hyperinflationary monetary adjustment relating to 2021


 

843

 

 

843

 

 

 

 

Restated at 1 January 2022

 

  342

 

54,717

 

580

 

19,175

 

(35,812)

 

39,002

 

 

 

 

Total comprehensive income for the year

 

 

 

Loss for the year

-

-

-

(7,740)

-

(7,740)

 

 

 

 

 

 

 

Other comprehensive income

-

-

(360)

-

-

(360)

 

________

________

________

________

________

________

Total comprehensive income for the year

 

-

 

-

 

(360)

 

(7,740)

 

-

 

(8,100)


________

________

________

________

________

________


 

 

 

 

 

 

Balance at 30 June 2022

342

54,717

220

11,435

(35,812)

30,902


________

________

________

________

________

________

 

 

 

 

Consolidated statement of changes in equity

 

 

 

 

Share capital

 

Share Premium

 

Translation reserve

 

Retained earnings

 

Merger reserve

 

Other reserve

 

Total equity

 

$'000

$'000

$'000

$'000

$'000

$'000

$'000

 

 

 

 

 

 

 

 

 

 

1 January 2021

132

 

-

300

24,668

(35,812)

 

-

(10,712)

 
















Contributions by and distributions to shareholders:








 

 

 

Reclassification of shareholder loan notes

-

 

 

 

 

 

-

-

-

-

 

 

 

 

 

9,900

9,900

 

Conversion of loan notes / Other liabilities into Ordinary Shares

57

 

 

 

 

12,352




 

 

 

 

(9,900)

2,509

 

 

 

Share issue in relation to IPO

153

 

 

 

 

44,923

-

-

-

 

 

 

 

-

45,076

















Equity issue costs

-

(2,558)

-

-

-

-

(2,558)

 

Total comprehensive income for the year:








 

Loss for the year

-

 

-

-

(6,336)

-

 

-

(6,336)

 








Other comprehensive income

-

 

 

-

 

 

280

-

-

 

 

-

280


________

________

________

________

________

________

________

 

Total comprehensive income for the year

-

 

 

 

 

-

280

(6,336)

-

 

 

 

 

-

(6,056)


________

________

________

________

________

________

________

 

 

Balance at 31 December 2021

342

 

 

 

 

54,717

580

18,332

(35,812)

 

 

 

 

-

38,159


________

________

________

________

________

________

________

 

 

 

 

Consolidated statement of cash flows

 

 

 

 

Unaudited 6 months to 30 June 2022

Unaudited 6 months to 30 June 2021

 

Year to 31 December 2021

 

 

$'000

$'000

$'000

Cash flows from operating activities

 

 


 

(Loss)/profit for the year


(7,740)

2,059

(6,336)

Adjustments for:


 



Depreciation and amortisation


2,972

2,446

5,585

Impairment of associate


-

-

1,627

Financial expense


881

2,359

4,476

Loss on sale of property, plant and equipment


246

-

1,084

Taxation


(1,485)

141

(1,108)

Net monetary gain


354

-

-

Share of post-tax losses of equity accounted associates


-

-

579



________

________

________



(4,772)

7,005

5,907



 



Decrease/(increase) in trade and other receivables


4,709

(2,462)

1,844

(Increase)/decrease in inventories


(54)

(5,656)

444

(Decrease)/increase in trade and other payables


(7,748)

8,230

(1,898)

Increase/(decrease) in provisions


-

73

-



________

________

________



(7,865)

7,190

6,297

Tax paid


-

(454)

(529)



________

________

________



 



Net cash used in operating activities


(7,865)

6,736

5,768



________

________

________

Cash flows from investing activities


 



Purchase of property, plant and equipment


(1,779)

(1,929)

(4,296)

Investments in associates


-

-

(201)

Purchase of intangible assets


(364)

-

(421)



________

________

________



 



Net cash from investing activities


(2,143)

(1,929)

(4,918)



________

________

________

Cash flows from financing activities


 



Receipt/(repayment) of bridging loan


(2,500)

2,500

2,500

Issue of convertible loan notes


-

-

5,600

Share issue (net of transaction costs)


-

-

42,370

Principal repayment of lease liabilities


(1,693)

(1,325)

(3,565)

Interest paid


(664)

(1,067)

(2,922)

Repayment of term loan


-

(2,759)

(16,042)

Repayment of CLBILs


-

(1,101)

(8,351)

Receipt/(repayment) of trade loans


3,680

712

(6,092)

Receipt/(repayment) of invoice finance


2,331

(1,390)

(1,537)



________

________

________

 

Net cash from/(used in) financing activities


 

1,154

 

(4,430)

 

11,961



________

________

________



 



Net (decrease)/increase in cash and cash equivalents


(8,854)

377

12,811

Cash and cash equivalents at beginning of period


9,807

(2,677)

(2,677)

Effect of exchange rate fluctuations on cash held


1,345

-

(327)

 


________

________

________

 


 



Cash and cash equivalents at end of year (see Note 15)


2,298

(2,300)

9,807



________

________

________



 





 

 




 

 


 





Notes forming part of the consolidated unaudited financial statements

 

 

1

Accounting policies

 

Introduction

 

The consolidated interim financial statements have been prepared in accordance International Financial Reporting Standards in conformity with the requirements of the Companies Act 2006 and expected to be effective at the year-end of 31 December 2022.

 

Except for hyperinflation accounting (jn accordance with IAS 29) the accounting policies are unchanged from the financial statements for the year ended 31 December 2021.  The interim financial statements, which have been prepared in accordance with International Accounting Standard 34 (IAS 34), are unaudited and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  Statutory accounts for the year ended 31 December 2021, prepared in accordance with IFRS, have been filed with Companies House.  The Auditors' Report on these accounts was unqualified, did not include any matters to which the Auditors drew attention by way of emphasis without qualifying their report and did not contain any statements under section 498 of the Companies Act 2006.

 

The consolidated interim financial statements are for the six months to 30 June 2022. The interim consolidated financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2021, which were prepared in accordance with IFRS's and in conformity with the requirements of the Companies Act 2006. 

 

The condensed interim statements have been prepared under the going concern assumption, which presumes the Group will be able to meet its obligations as they fall due for the foreseeable future. In making this assumption, the directors have considered the fact that from 23 September 2022 HSBC have a rolling option to exercise 3 month notice period to withdraw facilities (comprising overdrafts, invoice finance and trade loans). The Directors are not aware of any information suggesting HSBC will exercise this option. The Directors are exploring funding options worldwide to support the Group's growth plans and are confident that should HSBC facilities be withdrawn, alternative funding options would be available.

 

The Group's business is not subject to significant seasonal variations.

 

The unaudited financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated at their fair value: derivative financial instruments.

 

Revenue

 

Revenue is measured at the fair value of the consideration received or receivable.  Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows:

 

Serial production goods are recognised as sold at a point in time when control is passed to the customer, which depending on the incoterms (a series of pre-defined commercial terms published by the International Chamber of Commerce relating to international commercial law) can be when they are delivered to the customer site or when the customer collects them.

 

Tooling and the provision of associated services is recognised at a point in time when the performance obligations in the contract are satisfied and control is passed to the customer, which is based on the date of issue of the parts submission warrant (PSW) or a similar approval from customers. Monies received from customers in advance of completing the performance obligations are recognised as contracts liabilities as at the balance sheet date and released to revenue when the related performance obligations are satisfied at a point in time.

 

Discounts on the serial production contracts are considered one off and agreed with the customers as part of the negotiation and as per the terms of the contract, they are either paid in advance or otherwise. Discounts paid in advance are recognised as a prepayment and recognised as a debit to revenue in the period in which the related revenue is recognised. All other discounts are recognised as a debit to revenue based on the period in which the related revenues are recognised.

 

Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts.

 

 

Property, plant and equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

 

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

 

Depreciation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:

 


Assets under construction

-

not depreciated


Plant and equipment

-

2-5 years straight line


Furniture, fixtures and equipment

-

2-5 years straight line


Motor vehicles

-

2-5 years straight line

 

Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.

 

Inventories

 

Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.

 

Net realisable value is the value that would arise on sale of stock in the normal course of business, minus a reasonable estimation of selling costs.

 

Foreign currency

 

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction. 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 profit or loss. Exchange differences arising on the retranslation of the foreign operation are recognised in other comprehensive income and accumulated in the foreign exchange reserve.

 

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to the Group's presentational currency US Dollars at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated at an average rate for the year where this rate approximates to the foreign exchange rates ruling at the dates of the transactions.

 

Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and accumulated in the translation reserve. When a foreign operation is disposed of, such that control is lost, the entire accumulated amount in the foreign currency translation reserve, is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while still retaining control, the relevant proportion of the accumulated amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate that includes a foreign operation while still retaining significant influence, the relevant proportion of the cumulative amount is reclassified to profit or loss.

 

Classification of financial instruments issued by the Group

 

Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:

 

(a) they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and

(b) where the instrument will or may be settled in the company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the company's own equity instruments or is a derivative that will be settled by the company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

 

To the extent that this definition is not met, the proceeds of any issues are classified as a financial liability. 

Non-derivative financial instruments

 

Financial assets and liabilities are recognised when the Group becomes party to the contractual provisions of the instrument.

 

Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.

 

Trade and other receivables

Trade and other receivables are initially measured at their transaction price. Trade receivables and other receivables are held to collect the contractual cash flows which are solely payments of principal and interest. Therefore, these receivables are subsequently measured at amortised cost using the effective interest rate method.

 

Trade and other payables

Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement.

 

Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method. See Note 9 for full details of classes of interest-bearing borrowings.

 

Effective interest rate

The 'effective interest' is calculated using the rate that exactly discounts estimates future cash payments or receipts (considering all contractual terms) through the expected life of the financial asset or financial liability to its carrying amount before any loss allowance.

 

Share based payments

 

Where share options are awarded to employees, the fair value of the options at the date of the grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.

 

Hyperinflation accounting

 

Effective from 1 January 2022, the Group has applied IAS 29, Financial Reporting in Hyperinflationary Economies, for its subsidiary in Turkey, whose functional currency has experienced a cumulative inflation rate of more than 100%, over the past three years. Assets, liabilities, the financial position and results of foreign operations in hyperinflationary economies are translated to US Dollar at the exchange rate prevailing at the reporting date. The exchange differences are recognised directly in other comprehensive income and accumulated in the translation reserve in equity.  Such translation differences are reclassified to profit or loss only on disposal or partial disposal of the overseas operation. Prior to translating the financial statements of foreign operations, the non-monetary assets and liabilities and comprehensive income (both previously stated at historic cost) are restated to account for changes in the general purchasing power of the local currencies based on the consumer price index published by the Turkish Statistical Institute. The consumer price index for the six months ended 30 June 2022 increased by 42%.

 

Comparative amounts presented in the consolidated financial statements were not restated.  Hyperinflationary accounting needs to be applied as if Turkey has always been a hyperinflationary economy therefore as per CT Automotive Group's policy choice, the differences between equity at 31 December 2021 as reported and the equity after the restatement of the non-monetary items to the measuring unit current at 30 June 2022 were recognised in retained earnings. The subsequent gains or losses resulting from the restatement of non-monetary assets and liabilities are recorded in the Consolidated Statement of Profit and Loss.

 

The full impact on the results for the period ended 30 June 2022 and the financial position at 30 June 2022 has been disclosed fully in Note 13.                                                                                                                       .

 

 

 

2

Revenue

 

 

 

 

 

Unaudited 6 months to 30 June 2022

Unaudited 6 months to 30 June 2021

 

Year to 31 December 2021

 

 

$'000

$'000

$'000

 

 

 

 

 


Disaggregation of revenue

 

 



An analysis of turnover by type is given below:

 

 




 

 



Sale of parts

55,299

64,393

110,764


Sale of tooling (including design and development)

1,923

10,265

22,175



________

________

________


 

Total revenues

 





57,222

74,658

132,939



________

________

________

 

All revenue is derived from goods transferred at a point in time.

 

An analysis of turnover by geographical market is given within Note 3.

 

All revenue is recognised from goods transferred at a point in time.

 

 

 

3

Segment information

 

 

 

Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM has been identified as the management team including the Chief Executive Officer and Chief Financial Officer. The segmental analysis is based on the information that the management team uses internally for the purpose of evaluating the performance of operating segments and determining resource allocation between segments.

 

The Group has 3 strategic divisions which are its reportable segments.

 

The Group has the below main divisions:

1) Tooling - Design, development and sale of tooling for the automotive industry.

2) Production - Manufacturing and distributing serial production kinematic interior parts for the automotive industry.

3) Head office - Manages group financing and capital management

 

Other operations include two standalone subsidiaries which also manufacture and sell kinematic interior parts for the automotive industry. These subsidiaries do not meet the quantitative thresholds to be separate reportable segments.

 

The Group evaluates segmental performance on the basis of revenue and profit or loss from operations calculated in accordance with IFRS.

 

 

Unaudited 6 months ended 30 June 2022

 

 

 

 

 

 

 

 

 

 

Tooling

Production

Head office

Total

 

$'000

$'000

$'000

$'000

Revenue










Total revenue from customers

1,923

55,299

-

57,222











Depreciation and amortisation

-

(2,972)

-

(2,972)

Finance expense

-

(824)

(57)

(881)


________

________

________

________






Group and segment (Loss)/profit

(1,035)

(2,996)

(5,193)

(9,224)


________

________

________

________








 

Unaudited 6 months ended 30 June 2021

 

 

 

 

 

 

 

 

Tooling

Production

Head office

Total

 

$'000

$'000

$'000

$'000

Revenue










Total revenue from customers

10,265

64,393

-

74,658

Inter-Segmental revenue

3,145

36,307

-

39,452






Depreciation and amortisation

-

(2,446)

-

(2,446)

Finance expense

(12)

(1,260)

(1,087)

(2,359)


________

________

________

________






Group and segment Profit/(Loss)

4,684

517

(3,001)

2,200


________

________

________

________






 

 

Year ended 31 December 2021

 

 

 

 

 

 

 

 

 

 

 

 

Tooling

Production

Head office

Total

 

 

$'000

$'000

$'000

$'000

 

Revenue





 






 

Total revenue from customers

22,175

110,764

-

132,939

 






 






 

Depreciation and amortisation

-

(5,585)

-

(5,585)

 

Finance expense

-

(2,112)

(2,364)

(4,476)

 


________

________

________

________

 






 

Segment (Loss)/profit

5,260

(2,636)

(9,489)

(6,865)

 


________

________

________


 






 



 

Share of post-tax loss of equity accounted associates

(579)

 



 


_______

 

Group Loss before tax


(7,444)

 

 

 

 

 

 




_______

 


 

External revenue by location of customers

 


 

 

Unaudited 6 months to 30 June 2022

Unaudited 6 months to 30 June 2021

Year ended 31 December 2021


 


$'000

$'000

$'000







UK



10,146

13,588

20,840

US



14,376

13,065

29,489

China



8,464

20,904

18,289

Turkey



5,619

5,524

9,690

Czech Republic



10,767

12,841

35,356

Brazil



2,021

2,239

3,074

Spain



2,708

5,002

6,985

Thailand



1,023

1,119

2,187

Other



2,098

376

7,029




__________

__________

__________




 






57,222

74,658

132,939




__________

__________

__________

 

 

 

4

Non-recurring items

 


Unaudited 6 months to 30 June 2022

Unaudited 6 months to 30 June 2021

Year ended 31 December 2021


$'000

$'000

$'000

 

AIM listing fees

 

31

 

-

 

1,810

December 2021 Turkish foreign exchange losses

-

-

1,113

Impairment of associate

-

-

1,627

Irrecoverable excess freight costs

65

589

1,021

CAS losses (before transfer pricing adjustments)

671

-

-

Hyperinflationary adjustments

563

-

-


_______

_______

_______

Total

 

1,330

 

589

 

5,571


_______

_______

_______

 

 

The Directors consider that it is appropriate to remove the non-recurring costs and certain non-trading items discussed below to better allow the reader of the accounts to understand the underlying performance of the Group.

 

The AIM listing completed in December 2021 incurred one-off transaction costs and advisory fees. Costs have been recognised within administrative expenses in relation to this.

 

In December 2021, the Turkish Lira was significantly depreciated against the US Dollar following unprecedented Government announcements in Turkey. This resulted in the Group incurring one-off unrealised foreign exchange losses of $1,113,000 during December 2021, arising in Chinatool Otomotiv San. Tic. Ltd Sti.

 

An impairment review of the loans and shareholdings the Group held in Marin Engineering Limited and Scomadi (Thailand) Co. Ltd. was completed in 2021. These balances were fully impaired before the loan was written off and the shares were transferred to a third party. This resulted in a one-off impairment charge of $1,627,000 (2020:$nil) in the year ended 31 December 2021.

 

Global freight costs have temporarily increased significantly following the pandemic and related logistic issues. This has resulted in freight container costs exceeding the container rates quoted to customers. In recognition of this expecting to normalise over time, the Group has negotiated with customers to maximise the recovery of excess freight costs. There is however an element of excess freight costs which is deemed irrecoverable which has been recognised within distribution expenses.

 

In July 2022 the Directors of the Group have taken the decision to terminate operations at Chinatool Automotive Systems Limited (CAS) following a comprehensive commercial review of their operations. The Directors do not consider that these losses will continue to be incurred going forward. For the period to 30 June 2022, Chinatool Automotive Systems Limited generated a loss of $671,000.

 

Effective from 1 January 2022, the Group has applied IAS 29, Financial Reporting in Hyperinflationary Economies for its subsidiary in Turkey. The impact of these adjustments in the period to 30 June 2022 increased reported revenue by $675,000, increased cost of sales by $1,039,000, increased administrative expenses by $201,000 and increased other income by $2,000. See Note 13 for further details.

 

 

 

5

Loss per share

 

 

 



 

Unaudited 6 months to 30 June 2022

 

Unaudited 6 months to 30 June 2021

 

Year ended 31 December 2021



 

Number

 

Number

 

Number



 

 

 


Weighted average number of equity shares

50,933,289

19,600,000

20,286,757



 



 


$

$

$

 


 



 

Earnings, being (loss)/profit after tax

(7,740,000)

2,059,000

(6,336,000)

 

 

 





Cents

Cents

Cents



 

 



Basic (loss)/profit per share

(15.2)  

10.51  

(31.2)



 




Diluted (loss)/profit per share

(15.2)  

10.51  

(31.2)



 

 


 

At 30 June 2022, the share options which were granted on 24 June 2022 (see Note 12) could have a dilutive impact on earnings per share.

 

The vesting conditions of these share options includes earnings based targets for the Group for the financial years ending 31 December 2023, 31 December 2024 and 31 December 2025. For the period ending 30 June 2022, earnings levels are below the threshold required under the share options vesting conditions. If this level of earnings continued to the years to which the vesting conditions relate then the options would not meet their vesting conditions. IAS 33 requires that the number of contingently issuable shares included in the calculation of diluted earnings per share is based on the number of shares issuable if the end of the reporting period were the end of the contingency period.

 

The weighted average number of shares outstanding at 30 June  2021 has been adjusted to 19,600,000 to reflect the share dilution that occurred on 22 November 2021. At 30 June 2021, there were 98,000 shares outstanding with a nominal value of £1 each. On 22 November 2021, these were sub-divided into 19,600,000 shares with a nominal value of £0.005 each. IAS 33 requires that in such events whereby the number of Ordinary Shares is increased without an increase in resources, the number of Ordinary Shares outstanding before the event is adjusted to reflect the event as if it has occurred at the beginning of the earliest period presented.  

 

 

 

6

Property, plant and equipment

 

 

 

Plant and

Fixtures

Under

Motor

 

 

 

equipment

and fittings

construction

vehicles

Total

 

 

$'000

$'000

$'000

$'000

$'000

 

Cost

 

 

 

 

 

 

Balance at

1 January 2021

16,687

3,323

-

38

20,048


Additions

1,254

837

-

-

2,091

 

Disposals

-

-

-

-

-


Re-classifications

-

-

-

-

-


Effect of movements in foreign exchange

-

-

-

-

-



________

________

________

________

________


Balance at

30 June 2021

17,941

4,160

-

38

22,139



________

________

________

________

________



 

 

 

 

 


Balance at

1 January 2022

17,297

4,686

-

34

22,017


Hyperinflation adjustment

288

144

-

-

432


Additions

1,427

275

-

-

1,702


Disposals

(240)

(140)

-

-

(380)


Re-classifications

(419)

-

-

-

(419)


Effect of movements in foreign exchange

(1,023)

(255)

-

(1)

(1,279)



________

________

________

________

________


Balance at

30 June 2022

17,330

4,710

-

33

22,073



________

________

________

________

________


Depreciation







Balance at

1 January 2021

8,571

1,855

-

38

10,464


Depreciation charge for the year

889

490

-

-

1,379


Disposals

-

-

-

-

-


Effect of movements in foreign exchange

-

-

-

-

-



________

________

________

________

________


Balance at

30 June 2021

9,460

2,345

-

38

11,843



________

________

________

________

________









Balance at

1 January 2022

8,883

2,793

-

34

11,710


Depreciation charge for the year

760

428

-

-

1,188


Disposals

(129)

(5)

-

-

(134)


Reclassifications

(87)

-

-

-

(87)


Effect of movements in foreign exchange

(474)

(164)

-

(1)

(639)



________

________

________

________

________


Balance at

30 June 2022

8,953

3,052

-

33

12,038



________

________

________

________

________


Net book value







At 30 June 2021

8,481

1,815

-

-

10,296



________

________

________

________

________









At 30 June 2022

8,377

1,658

-

-

10,035



________

________

________

________

________

 

 

 

 

7

Inventories

 

 

 



Unaudited as at 30 June 2022

Unaudited as at 30 June 2021

As at 31 December 2021



$'000

$'000

$'000



 

 

 


Raw materials and consumables

9,336

9,494

8,627

 

Work in progress

7,325

12,605

6,654


Finished goods

27,611

24,611

24,498



_______

_______

_______



 





44,272

46,710

39,779



_______

_______

_______

 

 

 

8

Trade and other receivables

 

 

 



Unaudited as at 30 June 2022

Unaudited as at 30 June 2021

As at 31 December 2021



$'000

$'000

$'000



 

 

 


Trade receivables

26,927

21,013

26,444


Other debtors

566

2,063

2,633

 

Loan receivables

-

443

-

 


________

________

________

 


 



 


27,493

23,519

29,077

 


 




Prepayments

13,359

23,979

13,705



________

________

________



 




Total trade and other receivables

40,852

47,498

42,782



________

________

________

 

 

The carrying value of trade and other receivables classified at amortised cost approximates fair value.

 

The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision to trade receivables. The expected loss rates are based on the Group's historical credit losses. Due to the nature of the Group's customers no credit loss provision has been made at the period end.

 

 

 

9

Loans and borrowings

 



Unaudited as at 30 June 2022

Unaudited as at 30 June 2021

As at 31 December 2021



$'000

$'000

$'000



 

 

 


Non-current liabilities

 

 


 

Secured bank loans

-

(11,437)

-


Loan notes

-

(7,794)

-


Non-current portion of finance lease liabilities

-

(148)

(103)



________

________

________



 





-

(19,379)

(103)



________

________

________



 




Current liabilities

 




Current portion of secured bank loans

(9,132)

(20,990)

(5,452)


Current portion of finance lease liabilities

(60)

(197)

(278)


Unsecure bank overdraft

(3,537)

(5,465)

(3,638)


Invoice finance

(13,328)

(11,144)

(10,997)


Unsecured loan

-

(2,500)

(2,500)



________

________

________



 





(26,057)

(40,296)

(22,865)



________

________

________








(26,057)

(59,675)

(22,968)



________

________

________

 

 

 

10

Trade and other payables

 

 

 



Unaudited as at 30 June 2022

Unaudited as at 30 June 2021

As at 31 December 2021



$'000

$'000

$'000


Current

 

 

 


Trade payables

26,544

20,487

24,938

 

Non-trade payables and accrued expenses

11,418

25,135

11,419


Employee social security and taxes

661

3,274

7,388


Contract liabilities

7,112

9,033

2,925


Other payables

4,527

2,941

3,359


Provisions for losses on forward contracts

1,008

-

15



________

________

________



 





51,270

60,870

50,044



________

________

________

 

Included within trade and other payables is $Nil (2020 - $Nil) expected to be settled in more than 12 months.

 

 

 

11

Related parties

 

The compensation of key management personnel (including the directors) is as follows:

 



 

Unaudited 6 months to 30 June 2022

 

Unaudited 6 months to 30 June 2021

 

 

Year ended 31 December 2021



$'000

$'000

$'000



 

 

 


Key management remuneration including social security costs

646

439

921


Company contributions to money purchase pension plans

5

2

5



________

________

________



 





651

441

926



________

________

________

 

 

 

12

Share options

 

On 24 June 2022 CT Automotive Group PLC granted share options to 3 Directors. Subject to vesting conditions, the Directors will have the option to acquire a total of 2,546,662 Ordinary Shares at an exercise price of £0.005 per share.

 

The options will vest in 3 equal tranches on 23 December 2024, 23 December 2025 and 23 December 2026 subject to vesting conditions based on earnings-based targets for the financial years ended 31 December 2023, 31 December 2024 and 31 December 2025.

 

Due to its immaterial value, no share-based payment charge has been recognised in the period to 30 June 2022.

 

 

 

13

Turkey hyperinflation

 

Based on inflation data presented in 2022 by the Turkish Statistical Institute, the Directors consider that Turkey is hyperinflationary as at 30 June 2022. IAS 29 has been applied to the financial statements of the Group's Turkish entity: Chinatool Otomotiv San. Tic. Ltd. Sti. as this entity's functional currency is Turkish Lira.

 

The financial statements of Chinatool Otomotiv San. Tic. Ltd. Sti. are based on a historical cost approach. For the current and comparative periods  these have been restated for the changes in the general purchasing power of the Turkish Lira and are stated in terms of the measuring unit current as at 30 June 2022. 

 

Consumer Price Index data from the World Bank and the Turkish Statistical Institute has been used to select appropriate indices for these adjustments.

 

The cumulative adjustments for IAS 29 across the financial statements for the period to 30 June 2022 are presented below.

 


 

 

 

Unaudited 6 months to 30 June 2022 (before IAS 29)

 

 

 

 

 

IAS 29 adjustment

 

 

Unaudited 6 months to 30 June 2022 (adjusted for IAS 29)

Consolidated statement of profit and loss and other comprehensive income

$'000

$'000

$'000


 

 

 

Revenue

56,548

674

57,222

Cost of sales

(41,679)

(1,039)

(42,718)

Gross profit

14,869

(365)

14,504





Distribution expenses

(4,007)

-

(4,007)

Other operating income

240

3

243

Administrative expenses

(19,092)

(243)

(19,335)

Operating profit/(loss)

(7,990)

(605)

(8,595)





Financial expenses

(881)

-

(881)

Gain on monetary assets

-

252

252

Profit/(loss) before tax

(8,871)

(353)

(9,224)





Taxation

1,396

88

1,484

Profit/(loss) for the year

(7,475)

(265)

(7,740)


 

 

 

Foreign currency translation differences

(384)

24

(360)

Total comprehensive income/(loss) for the year

(7,859)

(241)

(8,100)






 

 

 

Unaudited as at 30 June 2022 (before IAS 29)

 

 

 

 

 

IAS 29 adjustment

 

 

Unaudited as at 30 June 2022 (adjusted for IAS 29)

Consolidated balance sheet

$'000

$'000

$'000


 

 

 

Property, plant and equipment

9,649

386

10,035

Intangible assets

575

-

575

Goodwill

2,417

-

2,417

Right of use assets

8,558

45

8,603

Deferred tax assets

3,508

-

3,508

Non-current assets

24,707

431

25,138


 

 

 

Inventories

44,112

160

44,272

Tax receivable

1,134

-

1,134

Trade and other receivables

40,850

2

40,852

Cash and cash equivalents

5,835

-

5,835

Current assets

91,931

162

92,093


 

 

 

Other interest-bearing loans and borrowings (< 1 year)

(26,057)

-

(26,057)

Trade and other payables

(51,269)

(1)

(51,270)

Tax payables

(596)

80

(516)

Lease liabilities (< 1 year)

(2,050)

-

(2,050)

Current liabilities

(79,972)

79

(79,893)


 

 

 

Lease liabilities (> 1 year)

(6,366)

(70)

(6,436)

Non-current liabilities

(6,366)

(70)

(6,436)


 

 

 

Net assets/(liabilities)

30,300

602

30,902


 

 

 

Share capital

342

-

342

Share premium

54,717

-

54,717

Translation reserve

196

24

220

Merger reserve

(35,812)

-

(35,812)

Retained earnings

10,857

578

11,435

Total equity

30,300

602

30,902


 

 

 

 

 

14

Alternative performance measures

 

The Annual Report includes Alternative Performance Measures (APMs) which are considered by Management to better allow the readers of the accounts to understand the underlying performance of the Group. The Board also monitors these APMs to assess financial performance throughout the year.

 

The APMs used in the Annual Report include:

 

-     Adjusted EBITDA - calculated as EBITDA adjusted for non-recurring items

-     Adjusted EBITDA margin - calculated as adjusted EBITDA divided by revenue in the year

-     Adjusted operating profit - calculated as Operating profit/(loss) adjusted for non-recurring items

-     Adjusted operating profit margin - calculated as adjusted operating profit divided by revenue in the year

 

EBITDA is calculated based using Operating profit/(loss) before interest, taxes, depreciation and amortisation.

 

Detail of each of the non-recurring items is disclosed in Note 4.

 

Adjusted EBITDA and adjusted EBITDA margin

 

 

 


Unaudited 6 months to 30 June 2022

Unaudited 6 months to 30 June 2021

Year ended 31 December 2021


$'000

$'000

$'000

Adjusted EBITDA

(4,292)

8,282

8,767

Non-recurring items

 

 


-     AIM listing fees

(31)

-

(1,810)

-     Turkish foreign exchange losses

-

-

(1,113)

-     Turkey hyperinflationary adjustments

(563)

-

-

-     Impairment of associate

-

-

(1,627)

-     Irrecoverable excess freight costs

(65)

(589)

(1,021)

-     CAS losses (before transfer pricing)

(671)

-

-


_______

_______

_______

 

EBITDA

 

(5,622)

 

7,693

 

3,196


_______

_______

_______

 

Adjusted EBITDA margin

 

(8.6%)

 

11.1%

 

6.6%

 

 

 

 

Adjusted operating (loss)/profit and adjusted operating profit margin

 

 


Unaudited 6 months to 30 June 2022

Unaudited 6 months to 30 June 2021

Year ended 31 December 2021

 

 


$'000

$'000

$'000

 

 

Adjusted operating (loss)/profit

(7,265)

5,148

3,182

 

 

Non-recurring items

 

 


 

 

-     AIM listing fees

(31)

-

(1,810)

 

 

-     Turkish foreign exchange losses

-

-

(1,113)

 

 

-     Impairment of associate

-

-

(1,627)

 

 

-     Irrecoverable excess freight costs

(65)

(589)

(1,021)

 

 

-     CAS losses (before transfer pricing)

(671)

-

-

 

 

-     Hyperinflationary adjustments

(563)

-

-

 

 


_______

_______

_______

 

 

 

Operating (loss)/profit

 

(8,595)

 

4,559

 

(2,389)

 

 


_______

_______

_______

 

 

 

Adjusted operating (loss)/profit margin

 

(12.7%)

 

6.9%

 

2.4%

 

 

 

15

Cash and cash equivalents

 

Cash and cash equivalents for purposes of the statement of cash flows comprises:



 

Unaudited as at 30 June 2022

 

Unaudited as at 30 June 2021

 

As at 31 December 2021



$'000

$'000

$'000



 

 

 


Cash and cash equivalents

5,835

3,135

13,445

 

Unsecured bank overdraft

(3,537)

(5,465)

(3,638)



________

________

________



 





2,298

(2,330)

9,807



________

________

________

 

 

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