RNS Number : 2322K
Goodwin PLC
20 December 2022
 

GOODWIN PLC

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the half year ended 31st October 2022

 

CHAIRMAN'S STATEMENT

The pre-tax trading profit for the Group for the first six month period ending 31st October 2022 was £9.1 million (2021: £7.7 million) on a revenue of £89.3 million.

I am pleased to report that at the time of writing the workload has increased to £242 million (2021: £157 million). This increase relates to the materialisation of some of the major projects that the Mechanical Engineering Division has been pursuing within the military and nuclear waste re-processing markets. It is fortunate that the Mechanical Engineering Division has diversified away from oil and gas into other business streams that will likely avoid the effects of a global recession that are almost certainly going to feature over the next two years.  These business streams include US and UK government procured components for military ships and boats, nuclear power, along with nuclear waste storage products.

The first half of the financial year has benefitted from the Refractory Engineering Division continuing to generate excellent results, as well as the pump companies having gone from strength to strength, as the recovery of the global economy following the impact of the Covid-19 pandemic has provided the mining industry with the confidence to proceed with spending again.

The Group's overall net debt stands at £46.1 million (31st October 2021: £34.8 million) which, whilst temporarily high, equates to a modest gearing of only 39.5%.  Within the debt figure is £8.4 million that has been invested in CO2 emission projects and with the current escalated electricity prices that continue to be prevalent in the UK and Europe, the payback on the solar investments averages at about two years. Whilst cash flow remains a key focus area, with global supply chains generally remaining under stress around the world, the pro-active decision to build up stocks over the past few years has significantly aided the Group's ability to meet the demand, specifically within the Refractory Division.

Our interest rate swap continues to provide effective protection from inflationary interest on the first £30 million of facility, capping the interest to less than 1% till August 2031. Further to our full explanation as to the accounting for the interest rate swap, which can be read within our Annual Report for the year ending 30th April 2022, the Board has and will continue to focus and report on the trading profit that excludes the profit impact of the interest rate swap valuation.  Due to the recent and expected increases to the base interest rate by the Bank of England the Group's swap increased in value by a further £3.1 million over the course of the first six months of the current financial year.

The work ethic of the Group's management and employees is world class and the Board wishes to thank all our employees for their unwavering loyalty, devotion and hard work.

 

T.J.W. Goodwin


Chairman

19th December 2022

 

MANAGEMENT REPORT

Financial Highlights


Unaudited

Unaudited

Audited


Half Year to

Half Year to

Year ended


31st October

31st October

30th April


2022

2021

2022


£m

£m

£m

Consolidated Results




Revenue

89.3

68.9

144.1

Operating profit

9.8

8.2

18.3

Trading profit *

9.1

7.7

17.2

Unrealised gain on 10 year interest rate swap derivative

3.1

2.7

Profit before tax

12.2

7.7

19.9

Profit after tax

9.1

6.0

13.6

Capital additions




Property, plant and equipment (PPE) owned

7.8

9.0

16.4

Property, plant and equipment (PPE) right-of-use assets

1.1

1.1

3.7

Operating lease assets (former IAS 17 definition)

(0.2)

(0.1)

Intangible assets

0.3

0.6

1.8

Capital expenditure for KPI purposes

9.0

10.7

21.8

Earnings per share - basic

113.93p

72.12p

169.14p

Earnings per share - diluted

113.93p

72.12p

169.14p

 

* Trading profit is defined as profit before taxation less the movement in fair value of interest rate swap.

Revenue

Revenue of £89,335,000 for the six months represents an 18.8% increase from the £75,200,000 achieved during the six month period to 30th April 2022.

 

Trading profit

Trading profit for the six months of £9,105,000 represents a 17.9% increase from the £7,723,000 achieved for the same six month period last year.

 

Key performance indicators


Unaudited

Unaudited

Audited


Half Year to 31st October

Half Year to 31st October

Year ended 30th April


2022

2021

2022

Trading profit (£'m)

9.1

7.7

17.2

Post tax profit + depreciation + amortisation (£'m)

9.9

9.9

21.9





Gross profit % of revenue

26.5%

29.5%

29.6%

Trading profit % of revenue

10.2%

11.2%

11.9%

Gearing %

39.5%

31.7%

25.8%





Non cash charges (£'m)




Depreciation - owned assets

3.0

2.9

6.2

Depreciation - right-of-use assets

0.6

0.5

1.2

Amortisation and impairment

0.6

0.7

1.6

Total non cash charges

4.2

4.1

9.0

Alternative performance measures mentioned above are defined on pages 96 and 97 of the Group Annual Accounts to 30th April 2022.

 

2022/23 Outlook

While there continues to be some global uncertainties due to the geopolitical environment and rising costs for consumers, the Group's activity and profitability levels are expected to increase over the next twelve months as a result of the increased work load.

The Mechanical Engineering Division performance is recovering, and with the recent increase in order input the Board expects the activity levels to take a significant step forward in the second half of this financial year, which will provide the Division with a much better start to the next financial year.  In the Annual Report to 30th April 2022, we stated that we expected to be able to deliver substantially increased profitability in the year ending April 2023.  Since the date of writing that statement a greater degree of uncertainty around the world has evolved with high levels of currency pair fluctuations, the continued conflict in Ukraine and with the Bank of England delivering the biggest interest rate hike in 33 years. This uncertainty is resulting in certain industry sectors hesitating in proceeding boldly with their planned investment projects. For this reason we expect the pre-tax profits in the second half of this financial year to be similar to the first half which would result in a modest increase in annual pre-tax profit rather than a substantial increase. 

The Group will benefit over the medium and long term as we near the end of the significant capital investment programmes of installing a second calciner at Hoben International, as well as the upfront costs of installing the high temperature polymer production plant at Duvelco.  Thereafter, capital expenditure levels are set to normalise going forwards, as we focus on delivering the orders recently won, as well as the ones still being pursued.

Risks and Uncertainties

The Group, mainly through its centralised management structure, makes best endeavours to have in place internal control procedures to identify and manage the key risks and uncertainties affecting the Group.  We would refer you to pages 14 to 15 of the Group Annual Accounts to 30th April 2022 which describe the principal risks and uncertainties, and to note 26, starting on page 75, which describes in detail the key financial risks and uncertainties affecting the business, such as credit risk and foreign exchange risk.

Judging the future relationship of the major currency pairs of the US Dollar, Sterling and the Euro continues to be a challenge.

The Group has mitigated the impact of rising interest rates by fixing the effective base rate at less than 1% for a notional £30 million of debt for the next nine years.

Report on Expected Developments

This report describes the expected development of the Group during the year ended 30th April 2023.  The report may contain forward-looking statements and information based on current expectations, and assumptions and forecasts made by the Group.  These expectations and assumptions are subject to various known and unknown risks, uncertainties and other factors, which could lead to substantial differences between the actual future results, financial performance and the estimates and historical results given in this report.  Many of these factors are outside the Group's control.  The Group accepts no liability to publicly revise or update these forward-looking statements or adjust them to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.

Going concern

The Group continues to trade profitability by building on the increase in activity seen in the second half of last year and, with the current order book levels as they are, this should continue and improve through this current year and into the next financial year.  Where many companies have struggled with increased material and energy prices, disruption in the logistics of the supply chain and the impacts of Covid-19, the Group has continued on throughout and been able to carry on with its value added activities.  As at 31st October 2022, the Group net debt stood at £46.1 million (31st October 2021: £34.8 million) as set out in note 17 of these accounts.  Whilst the net debt levels are higher than those recorded at April 2022 and October 2021 the gearing levels at 39.5% remain moderate for a Group of this size.  Given the above-mentioned, the Directors do not see an issue with the continued ability of the Group to meet its financial commitments as they fall due and have drawn up these accounts on a going concern basis.

Responsibility statement of the Directors in respect of the half-yearly financial report

The Directors confirm to the best of their knowledge that:

1.     this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the United Kingdom; and

2.     the Interim Management Report and condensed financial statements include a fair review of the information required by Disclosure and Transparency Rules

·      4.2.7R (being an indication of important events that have occurred during the first six months of the year); and

·      4.2.8R (being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last Annual Report that could do so).


 

T.J.W. Goodwin


Chairman

19 December 2022

 

Condensed Consolidated Statement of Profit or Loss

for the half year to 31st October 2022

 


Unaudited

Unaudited

Audited


Half Year to

Half Year to

Year ended


31st October

31st October

30th April


2022

2021

2022


£'000

£'000

£'000

Continuing operations




Revenue

89,335

68,884

144,108

Cost of sales

(65,645)

(48,529)

(101,404)

Gross profit

23,690

20,355

42,704

Distribution expenses

(2,056)

(1,817)

(3,743)

Administrative expenses

(11,801)

(10,335)

(20,654)

Operating profit

9,833

8,203

18,307

Finance costs (net)

(761)

(513)

(1,169)

Share of profit of associate company

33

33

63

Profit before taxation and movement in fair value of interest rate swap

9,105

7,723

17,201

Unrealised gain on 10 year interest rate swap derivative

3,132

2,740

Profit before taxation

12,237

7,723

19,941

Tax on profit

(3,157)

(1,719)

(6,321)

Profit after taxation

9,080

6,004

13,620





Attributable to:




Equity holders of the parent

8,761

5,546

12,980

Non-controlling interests (NCI)

319

458

640

Profit for the period

9,080

6,004

13,620





Basic earnings per ordinary share (note 13)

113.93p

72.12p

169.14p

 




Diluted earnings per ordinary share (note 13)

113.93p

72.12p

169.14p

 

Condensed Consolidated Statement of Comprehensive Income

for the half year to 31st October 2022

 


Unaudited

Unaudited

Audited


Half Year to

Half Year to

Year ended


31st October

31st October

30th April


2022

2021

2022


£'000

£'000

£'000

Profit for the period

9,080

6,004

13,620





Other comprehensive expense




Items that are or may be reclassified subsequently to the income statements




Foreign exchange translation differences

(167)

(697)

1,493

Effective portion of changes in fair value of cash flow hedges

(4,958)

754

(3,834)

Ineffective portion of changes in fair value of cash flow hedges

(92)

(339)

Change in fair value of cash flow hedges transferred to profit or loss

949

(731)

(1,432)

Effective portion of changes in fair value of cost of hedging

96

(145)

275

Ineffective portion of changes in fair value of cost of hedging

(23)

Change in fair value of cost of hedging transferred to profit or loss

(15)

(10)

(75)

Tax on items that are or may be reclassified subsequently to profit or loss

950

(91)

1,114

Other comprehensive expense for the period, net of income tax

(3,237)

(920)

(2,821)

Total comprehensive income for the period

5,843

5,084

10,799





Attributable to:




Equity holder of the parent

5,633

4,732

10,089

Non-controlling interests

210

352

710


5,843

5,084

10,799

 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2022


Share capital

Translation reserve

Share-based payments reserve

Cash flow hedge reserve

Cost of hedging reserve

Retained earnings

Total attributable to equity holders of the parent

Non-controlling interests

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Half Year to 31st October 2022

(Unaudited)










Balance at 1st May 2022

769

463

5,244

(2,746)

140

111,440

115,310

4,433

119,743

Total comprehensive income:










Profit

8,761

8,761

319

9,080

Other comprehensive income:










Foreign exchange translation differences

(81)

(81)

(86)

(167)

Net movements on cash flow hedges

(3,114)

67

(3,047)

(23)

(3,070)

Total comprehensive income / expense for the period

(81)

(3,114)

67

8,761

5,633

210

5,843

Dividends paid

(4,145)

(4,145)

(380)

(4,525)

Balance at 31st October 2022

769

382

5,244

(5,860)

207

116,056

116,798

4,263

121,061

 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2022

 


Share capital

Translation reserve

Share-based payments reserve

Cash flow hedge reserve

Cost of hedging reserve

Retained earnings

Total attributable to equity holders of the parent

Non-controlling interests

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Half Year to 31st October 2021

(Unaudited)










Balance at 1st May 2021

753

(852)

5,244

1,601

(1)

106,396

113,141

4,887

118,028

Total comprehensive income:










Profit

5,546

5,546

458

6,004

Other comprehensive income:










Foreign exchange translation differences

(591)

(591)

(106)

(697)

Net movements on cash flow hedges

(113)

(110)

(223)

(223)

Total comprehensive income / expense for the period

(591)

(113)

(110)

5,546

4,732

352

5,084

Issue of shares

16

16

16

Dividends paid

(7,862)

(7,862)

(187)

(8,049)

Acquisition of NCI without a change in control

(74)

(74)

(356)

(430)

Balance at 31st October 2021

769

(1,443)

5,244

1,488

(111)

104,006

109,953

4,696

114,649

 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2022

 


Share capital

Translation reserve

Share-based payments reserve

Cash flow hedge reserve

Cost of hedging reserve

Retained earnings

Total attributable to equity holders of the parent

Non-controlling interests

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Year ended 30th April 2022

(Audited)










Balance at 1st May 2021

753

(852)

5,244

1,601

(1)

106,396

113,141

4,887

118,028

Total comprehensive income:










Profit

12,980

12,980

640

13,620

Other comprehensive income:










Foreign exchange translation differences

1,315

1,315

178

1,493

Net movements on cash flow hedges

(4,347)

141

(4,206)

(108)

(4,314)

Total comprehensive income / expense for the period

1,315

(4,347)

141

12,980

10,089

710

10,799

Issue of shares

16

16

16

Dividends paid

(7,862)

(7,862)

(808)

(8,670)

Acquisition of NCI without a change in control

(74)

(74)

(356)

(430)

Balance at 30th April 2022

769

463

5,244

(2,746)

140

111,440

115,310

4,433

119,743

 

Condensed Consolidated Balance Sheet


Unaudited

Unaudited

Audited


as at 31st

as at 31st

as at 30th


October 2022

October 2021

April 2022


£'000

£'000

£'000

Non-current assets




Property, plant and equipment

92,104

82,949

87,594

Right-of-use assets

6,956

4,276

6,191

Investment in associates

912

815

896

Intangible assets

24,380

24,500

24,817

Derivative financial assets

5,446

613

2,741

Long-term trade receivables

1,191


129,798

113,153

123,430

Current assets




Inventories

43,323

37,315

40,364

Contract assets

17,811

13,245

12,331

Trade and other financial assets

30,341

23,940

23,717

Other receivables

7,323

6,298

6,217

Deferred tax asset

59

144

60

Derivative financial assets

2,105

3,001

1,211

Cash and cash equivalents

8,604

12,257

11,651


109,566

96,200

95,551

Total assets

239,364

209,353

218,981

Current liabilities




Bank overdrafts and interest-bearing liabilities

3,318

1,853

2,764

Contract liabilities *

19,462

14,542

14,749

Trade payables and other financial liabilities

18,722

16,606

23,004

Other payables

6,266

4,102

4,256

Derivative financial liabilities

4,984

1,262

2,393

Liabilities for current tax

1,194

1,689

1,886

Provisions for liabilities and charges

206

512

205


54,152

40,566

49,257

Non-current liabilities




Interest-bearing liabilities

53,042

47,053

40,376

Derivative financial liabilities

2,326

336

1,643

Provisions for liabilities and charges

333

304

251

Deferred tax liabilities

8,450

6,445

7,711


64,151

54,138

49,981

Total liabilities

118,303

94,704

99,238

Net assets

121,061

114,649

119,743

Equity attributable to equity holders of the parent




Share capital

769

769

769

Translation reserve

382

(1,443)

463

Share-based payments reserve

5,244

5,244

5,244

Cash flow hedge reserve

(5,860)

1,488

(2,746)

Cost of hedging reserve

207

(111)

140

Retained earnings

116,056

104,006

111,440

Total equity attributable to equity holders of the parent

116,798

109,953

115,310

Non-controlling interests

4,263

4,696

4,433

Total equity

121,061

114,649

119,743

 

* Contract liabilities include advance payments from customers of £18,627,000 (October 2021: £13,766,000), with the balance of £835,000 (October 2021: £776,000) being costs accrued for contracts.

Condensed Consolidated Statement of Cash Flows

for the half year ended 31st October 2022


Unaudited

Unaudited

Audited


Half Year to

Half Year to

Year ended


31st October

31st October

30th April


2022

2021

2022


£'000

£'000

£'000

Cash flow from operating activities




Profit from continuing operations after tax

9,080

6,004

13,620

Adjustments for:




Depreciation of property, plant and equipment

2,965

2,932

6,202

Depreciation of right-of-use assets

642

456

1,192

Amortisation and impairment of intangible assets

610

747

1,572

Finance costs (net)

761

513

1,169

Foreign exchange (gains) / losses

(1,965)

125

(1,535)

Loss / (profit) on sale of property, plant and equipment

7

(95)

(18)

Unrealised gain on 10 year interest rate swap derivative

(3,132)

(2,740)

Share of profit of associate companies

(33)

(33)

(63)

UK tax incentive credit on research and development

(675)

Tax expense

3,157

1,719

6,321

Cash generated from operating activities before changes in working capital and provisions

12,092

12,368

25,045

Increase in inventories

(3,112)

(3,073)

(5,175)

(Increase) / decrease in contract assets

(5,461)

2,583

3,498

Increase in trade and other receivables

(5,426)

(4,076)

(3,341)

Increase in contract liabilities

4,720

266

472

(Decrease) / increase in trade and other payables

(2,488)

(5,192)

804

Increase in unhedged derivative balances

180

Cash inflow from operations

325

3,056

21,303

Interest paid (net)

(763)

(513)

(1,258)

Corporation tax paid

(2,196)

(576)

(2,051)

Net cash from operating activities

(2,634)

1,967

17,994

Cash flows from investing activities




Proceeds from sale of property, plant and equipment

39

213

341

Acquisition of property, plant and equipment

(6,796)

(9,220)

(16,215)

Additional investment in existing subsidiaries

(430)

(430)

Acquisition of intangible assets

(143)

(269)

(282)

Development expenditure capitalised

(166)

(408)

(1,505)

Net cash outflow from investing activities

(7,066)

(10,114)

(18,091)

Cash flows from financing activities




Proceeds from issue of share capital

16

16

Payment of capital element of lease obligations

(882)

(385)

(1,153)

Dividends paid

(4,145)

(7,862)

(7,862)

Dividends paid to non-controlling interests

(380)

(187)

(808)

Proceeds from new loans and committed facilities

13,000

14,200

6,702

Repayment of loans and committed facilities

(868)

(355)

(683)

Net cash inflow / (outflow) from financing activities

6,725

5,427

(3,788)





Net decrease in cash and cash equivalents

(2,975)

(2,720)

(3,885)

Cash and cash equivalents at beginning of year

11,651

15,160

15,160

Effect of exchange rate fluctuations on cash held

(72)

(183)

376

Closing cash and cash equivalents (note 15)

8,604

12,257

11,651

 

Notes

to the Condensed Consolidated Financial Statements

1.      Reporting Entity

Goodwin PLC (the "Company") is a company incorporated in England and Wales.  The unaudited condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2022 comprise the Company, its subsidiaries, and the Group's interests in associates (together referred to as the "Group").

The audited consolidated financial statements of the Group as at and for the year ended 30th April 2022 are available upon request from the Company's registered office at Ivy House Foundry, Hanley, Stoke-on-Trent, ST1 3NR or via the Company's web site:  www.goodwin.co.uk.

2.      Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as adopted in the United Kingdom.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements of the Group as at and for the year ended 30th April 2022.

The comparative figures for the financial year ended 30th April 2022 are extracts and not the full Group's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The Audit Committee has reviewed these unaudited condensed consolidated interim financial statements and has advised the Board of Directors that, taken as a whole, they are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's half year performance.  These unaudited condensed consolidated interim financial statements were approved by the Board of Directors on 19th December 2022.

3.      Significant Accounting Policies

The accounting policies applied by the Group in these unaudited condensed consolidated financial statements are the same as those applied by the Group in its audited consolidated financial statements as at and for the year ended 30th April 2022, except where accounting standards have been amended and the Group has adopted these amendments during the current period.

The following amendments, which have become effective for the current reporting period, and therefore have been adopted by the Group, are not expected to have a significant impact on the Group's financial statements.

·      Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and Annual Improvements 2018-2020 - (effective for periods commencing on or after 1st January 2022)

New IFRS standards, amendments and interpretations not adopted

The IASB and IFRIC have issued additional standards and amendments which are effective for periods starting after the date of these financial statements. The following amendments have not yet been adopted by the Group:

·      Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors 'Definition of Accounting Estimates' - (effective for periods commencing on or after 1st January 2023, subject to UK endorsement).

·      Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Classification of Liabilities as Current or Non-current - Deferral of Effective Date - (effective for periods commencing on or after 1st January 2023, subject to endorsement).

·      Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies - (effective for periods commencing on or after 1st January 2023, subject to UK endorsement).

·      Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction - (effective for periods commencing on or after 1st January 2023, subject to endorsement).

The Group does not expect the above amendments to have a material impact on profit, earnings per share and net assets in future periods.

4.      Accounting Estimates and Judgements

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.

In preparing these unaudited consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements as at and for the year ended 30th April 2022.

The tax charge in the period is based on management's estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period, and the impact of any disallowed costs.

5.      Operating Segments

In accordance with the requirements of IFRS 8 "Operating Segments", the Group's reportable segments, based on information reported to the Group's Board of Directors for the purposes of resource allocation and assessment of segment performance, are as follows:

•    Mechanical Engineering (Mechanical)             - casting, machining and general engineering

•    Refractory Engineering (Refractory)                 - powder manufacture and mineral processing

Information regarding the Group's operating segments is reported in the following tables.

6.      Operating segment revenue


Unaudited


Half Year to 31st October 2022


Mechanical

Refractory

Total

Mechanical

Refractory

Total

Mechanical

Refractory

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Total revenue

70,276

40,039

110,315

49,747

34,443

84,190

105,389

72,026

177,415

Inter-segment revenue

(12,226)

(8,754)

(20,980)

(8,203)

(7,103)

(15,306)

(17,784)

(15,523)

(33,307)

External revenue

58,050

31,285

89,335

41,544

27,340

68,884

87,605

56,503

144,108

 

7.      Operating segment profit


Unaudited

Unaudited

Audited


Half Year to 31st October 2022

Half Year to 31st October 2021

Year ended 30th April 2022


Mechanical

Refractory

Total

Mechanical

Refractory

Total

Mechanical

Refractory

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Operating profit

5,809

6,525

12,334

3,565

6,015

9,580

9,139

12,657

21,796

Share of profit of associate companies

33

33

33

33

63

63

Group centre



(2,501)



(1,377)



(3,489)

Group finance costs (net)



(761)



(513)



(1,169)

Unrealised gain on 10 year interest rate swap



3,132





2,740

Consolidated profit before tax



12,237



7,723



19,941

Tax



(3,157)



(1,719)



(6,321)

Consolidated profit after tax



9,080



6,004



13,620

 

8.      Operating segment assets and liabilities


Unaudited

Unaudited

Audited


Half Year to 31st October 2022

Half Year to 31st October 2021

Year ended 30th April 2022


Mechanical

Refractory

Total

Mechanical

Refractory

Total

Mechanical

Refractory

Total


2022

2022

2022

2021

2021

2021

2022

2022

2022


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Total assets

106,141

50,968

157,109

104,014

46,094

150,108

93,049

48,843

141,892

Total liabilities

(82,797)

(22,431)

(105,228)

(76,441)

(18,376)

(94,817)

(71,950)

(22,643)

(94,593)

Net assets - reportable segment net assets

23,344

28,537

51,881

27,573

27,718

55,291

21,099

26,200

47,299

Net assets - Goodwin PLC (the Company)



85,411



75,450



88,595

Elimination of Goodwin PLC investments



(25,822)



(25,822)



(25,822)

Goodwill



9,591



9,730



9,671

Consolidated total net assets



121,061



114,649



119,743

 

9.      Operating segment capital expenditure, depreciation and amortisation


Unaudited

Unaudited


Half Year to 31st October 2022

Half Year to 31st October 2021


Mechanical

Refractory

Goodwin PLC

Total

Mechanical

Refractory

Goodwin PLC

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Capital expenditure on:









Property, plant and equipment

1,482

382

5,962

7,826

2,228

715

6,094

9,037

Right-of-use assets

336

768

1,104

1,078

1,078

Intangible assets

188

45

29

262

420

21

188

629

Total capital expenditure

2,006

427

6,759

9,192

2,648

736

7,360

10,744










Depreciation - property, plant and equipment

950

461

1,554

2,965

829

527

1,576

2,932

Depreciation - right-of-use assets

171

147

324

642

159

140

157

456

Amortisation

26

74

510

610

21

220

506

747

Total

1,147

682

2,388

4,217

1,009

887

2,239

4,135


 

 

 

 

Audited


 

 

 

 

Year ended 30th April 2022


 

 

 

 

Mechanical

Refractory

Goodwin PLC

Total


 

 

 

 

£'000

£'000

£'000

£'000

Capital expenditure on









Property, plant and equipment





5,396

1,631

9,326

16,353

Right-of-use assets





2,401

881

441

3,723

Intangible assets





1,121

429

237

1,787

Total capital expenditure





8,918

2,941

10,004

21,863










Depreciation - property, plant and equipment





1,895

1,092

3,215

6,202

Depreciation - right-of-use assets





305

294

593

1,192

Amortisation





47

330

1,180

1,557

Impairment





15

15

Total





2,247

1,716

5,003

8,966















 

10.   Geographical segments

 


Unaudited

Unaudited


Half Year to 31st October 2022

Half Year to 31st October 2021


Revenue

Net assets

Non-current assets

Capital expenditure

Revenue

Net assets

Non-current assets

Capital expenditure


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

UK

25,108

75,384

107,933

7,957

17,815

76,575

92,602

9,483

Rest of Europe

13,360

9,096

3,981

385

9,212

8,069

3,878

926

USA

7,807

6,159

Pacific Basin

18,349

16,993

7,395

119

16,025

15,044

7,375

97

Rest of World

24,711

19,588

10,489

731

19,673

14,961

9,298

238

Total

89,335

121,061

129,798

9,192

68,884

114,649

113,153

10,744

 


 

 

 

 

Audited


 

 

 

 

Year ended 30th April 2022


 

 

 

 

Revenue

Net assets

Non-current assets

Capital expenditure


 

 

 

 

£'000

£'000

£'000

£'000

UK





38,599

77,447

104,995

19,670

Rest of Europe





21,388

8,648

3,728

1,009

USA





14,046

Pacific Basin





31,085

15,867

6,703

278

Rest of World





38,990

17,781

8,004

906

Total





144,108

119,743

123,430

21,863

 

11.   Revenue

The Group's revenue is derived from contracts with customers.  The following tables provide an analysis of revenue by geographical market and by product line.

 


Unaudited

Unaudited

Audited


Half Year to 31st October 2022

Half Year to 31st October 2021

Year ended 30th April 2022


Mechanical

Refractory

Total

Mechanical

Refractory

Total

Mechanical

Refractory

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Primary geographical markets










UK

17,916

7,193

25,109

11,256

6,559

17,815

25,261

13,338

38,599

Rest of Europe

9,322

4,038

13,360

5,327

3,885

9,212

13,304

8,084

21,388

USA

7,400

407

7,807

5,796

363

6,159

13,398

648

14,046

Pacific Basin

5,885

12,464

18,349

5,461

10,564

16,025

9,457

21,628

31,085

Rest of World

17,527

7,183

24,710

13,704

5,969

19,673

26,185

12,805

38,990

Total

58,050

31,285

89,335

41,544

27,340

68,884

87,605

56,503

144,108

 










Product lines










Standard products and consumables

7,222

31,285

38,507

5,105

27,340

32,445

12,155

56,503

68,658

Bespoke engineered products - point in time

17,468

17,468

6,022

6,022

9,992

9,992

Total point in time revenue

24,690

31,285

55,975

11,127

27,340

38,467

22,147

56,503

78,650

Minimum period contracts for goods and services

2,252

2,252

1,879

1,879

3,804

3,804

Bespoke engineered products - over time

31,108

31,108

28,538

28,538

61,654

61,654

Total over time revenue

33,360

33,360

30,417

30,417

65,458

65,458

Total revenue

58,050

31,285

89,335

41,544

27,340

68,884

87,605

56,503

144,108

 

12.   Dividends

The Directors do not propose the payments of an interim dividend.

 


Unaudited

Unaudited

Audited


Half Year to

Half Year to

Year ended


31st October

31st October

30th April


2022

2021

2022


£'000

£'000

£'000

Equity dividends paid during the period:




Ordinary dividends paid in respect of the year ended 30th April 2022 (53.90p per share)

4,145

Ordinary dividends paid in respect of the year ended 30th April 2021 (102.24p per share)

7,862

7,862

Total

4,145

7,862

7,862

 

As noted in the Group Annual Accounts to 30th April 2022, the dividend payments for the year ended 30th April 2022 are being paid in two equal instalments, with the second payment due in April 2023.

13.   Earnings per share

 


Unaudited

Unaudited

Audited


as at

as at

as at


31st October

31st October

30th April


2022

2021

2022


Number of ordinary shares

Ordinary shares in issue




Opening balance

7,689,600

7,526,400

7,526,400

Shares issued in the period

163,200

163,200

Closing balance

7,689,600

7,689,600

7,689,600





Weighted average number of ordinary shares in issue

7,689,600

7,689,600

7,673,951






£'000

Relevant profits attributable to shareholders

8,761

5,546

12,980

 

14.   Property, plant and equipment and intangible assets

 


Unaudited

Unaudited


Half Year to 31st October 2022

Half Year to 31st October 2021


Property, plant and equipment

Right-of-use assets

Intangible assets

Property, plant and equipment

Right-of-use assets

Intangible assets


£'000

£'000

£'000

£'000

£'000

£'000

Net book value at the beginning of the period

87,594

6,191

24,817

77,063

3,691

24,813

Additions

7,826

1,104

262

9,037

1,078

629

Disposals (at net book value)

(46)

(117)

Transfers

(306)

306

Depreciation

(2,965)

(642)

(2,932)

(456)

Amortisation

(610)

(747)

Exchange adjustment

1

(3)

(89)

(102)

(37)

(195)

Net book value at the end of the period

92,104

6,956

24,380

82,949

4,276

24,500

 

The depreciation on  right-of-use assets maybe be analysed as follows:


Unaudited

Unaudited


Half Year to 31st October

Half Year to 31st October


2022

2021


£'000

£'000

Finance leases (former IAS 17 definition)

365

210

Operating leases (former IAS 17 definition)

277

246


642

456

 

15.   Cash and cash equivalents

 


Unaudited

Unaudited

Audited


as at

as at

as at


31st October

31st October

30th April


2022

2021

2022


£'000

£'000

£'000

Cash and cash equivalents per balance sheet and cash flow statement

8,604

12,257

11,651

 

16.   Interest-bearing liabilities

 


Unaudited

Unaudited

Audited


as at

as at

as at


31st October

31st October

30th April


2022

2021

2022


£'000

£'000

£'000

Bank loans - repayable by instalments

1,058

833

1,005

Other loans

202

Lease liabilities

2,260

1,020

1,557

Due within one year

3,318

1,853

2,764





Bank loans - repayable by instalments

7,367

4,076

8,059

Bank loans - rolling credit facilities

41,000

40,000

28,000

Lease liabilities

4,675

2,977

4,317

Due after more than one year

53,042

47,053

40,376





Bank loans - repayable by instalments

8,425

4,909

9,064

Bank loans - rolling credit facilities

41,000

40,000

28,000

Other loans

202

Lease liabilities

6,935

3,997

5,874

Total

56,360

48,906

43,140





Former IAS 17 analysis of lease liabilities




Finance leases

5,306

2,169

4,170

Operating leases

1,629

1,828

1,704


6,935

3,997

5,874

 

17.   Capital management

As at 31st October 2022 the capital utilised was £162,925,000, as shown below:

 



Unaudited

Unaudited

Audited



As at

As at

As at



31st October

31st October

30th April



2022

2021

2022


Note

£'000

£'000

£'000

Cash and cash equivalents

15

(8,604)

(12,257)

(11,651)

Bank loans and committed facilities

16

49,425

44,909

37,064

Other loans


202

Lease liabilities

16

6,935

3,997

5,874

Net debt in accordance with IFRS 16


47,756

36,649

31,489

Operating lease debt (former IAS 17 definition)

16

(1,629)

(1,828)

(1,704)

Relevant net debt for KPI purposes


46,127

34,821

29,785

Total equity attributable to equity holders of the parent


116,798

109,953

115,310

Capital


162,925

144,774

145,095

 

 18.  Total financial assets and financial liabilities

The following table sets out the Group's accounting classification of its financial assets and financial liabilities, and their carrying amounts at 31st October 2022.  The carrying amount is a reasonable approximation of fair value for all financial assets and financial liabilities.

 


Fair value hedging instruments

Fair value through profit and loss

Amortised cost

Total carrying amount / fair value amount


£'000

£'000

£'000

£'000

Financial assets measured at fair value





Forward exchange contracts used for hedging

844

844

Other forward exchange contracts

835

835

Interest rate swap

5,872

5,872


844

6,707

7,551

Financial assets not measured at fair value





Cash and cash equivalents

8,604

8,604

Contract assets

17,811

17,811

Trade receivables and other financial assets

30,341

30,341

Corporation tax receivable

1,339

1,339


58,095

58,095

Financial liabilities measured at fair value





Forward exchange contracts used for hedging

7,077

7,077

Other forward exchange contracts

233

233


7,077

233

7,310

Financial liabilities not measured at fair value





Bank loans

49,425

49,425

Lease liabilities

6,935

6,935

Contract liabilities

19,462

19,462

Trade payables and other financial liabilities

18,722

18,722

Corporation tax payable

1,194

1,194


95,738

95,738

 

The forward exchange and interest rate swap contract assets and liabilities fair values in the above table are derived using Level 2 inputs as defined by IFRS 7 as detailed in the paragraph below.

IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the source of inputs used to derive the fair value. This classification uses the following three-level hierarchy:  Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

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