TIDMEQIP
RNS Number : 2619O
Equipmake Holdings PLC
02 October 2023
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR").
2 October 2023
Equipmake Holdings plc
("Equipmake" or the "Company")
Results for the year ended 31 May 2023
Equipmake, the UK-based engineering specialist pioneering the
development and production of electrification products across the
automotive, aerospace, bus, and coach industries, is pleased to
announce its audited results for the 12-month period ended 31 May
2023.
Financial Highlights
-- Listed on the Aquis Stock Exchange and raised GBP16.2m of
gross proceeds during the year.
-- Total Revenue of GBP5.1m (FY2022: GBP3.7m), comprising:
o GBP0.8m from Powertrain sales (supply only) (FY2022: GBP0.2m);
o GBP0.9m from Powertrain sales (including vehicle integration) (FY2022: GBPNil);
o GBP1.6m from Electric Vehicle ("EV") component sales (FY2022: GBP0.4m);
o GBP1.3m of Engineering projects revenue (FY2022: GBP2.0m);
o GBP0.3m of licensing / royalty revenue (FY2022: GBPnil); and
o GBP0.1m of grant income (FY2022: GBP1.0m).
-- Gross margin (inclusive of grants) of GBP1.2m or 23.9%
(FY2022: Gross loss of GBP2.4m). Gross margin (exclusive of grants)
of GBP1.3m or 25.5% (FY2022: no comparative available).
-- Loss after tax was GBP4.8m (FY2022: GBP5.3m).
-- Loss per share was 0.60p (FY2022: 2.3p).
-- Cash at 31 May 23 was GBP7.0m (31 May 22: GBP1.9m).
Operational Highlights
-- Delivering vehicles into service for First Bus York and
Transport for London ("TfL"), and secured orders for further bus
repowers from both new and existing clients.
-- Signed licensing agreement with Sona BLW Precision Forgings
Ltd ("Sonar Comstar") in India for the application of certain
products in electric cars, buses, commercial vehicles and off-road
vehicles in India, Thailand and other select South Asian
countries.
-- Secured, and successfully delivered, further orders for EV
powertrains for fire trucks for both the UK and US markets.
-- Obtained Innovate UK / Advanced Propulsion Centre ("APC")
grant funding of up to GBP1.6m for the Hydrogen Electric Integrated
Drivetrain Initiative ("HEIDI").
-- Secured a flexible lease on a 50,000 sq. ft unit to
facilitate the production of the growing repowering business.
Post Year End Highlights
-- Agreed a term sheet with H55 for the provision of an
aerospace electric motor - 26 June.
-- Supplied cutting edge E-Drivetrain for luxury long-range
electric flying boat - 10 July.
-- Awarded GBP1.47m electric bus repower contract by Newport Transport - 3 August.
-- Awarded GBP1.75m electric bus repower contract by Big Bus Tours - 29 September.
Ian Foley, CEO of Equipmake said : "The Company is buoyed by the
successes achieved since the IPO and is confident that it will
achieve both its short-term and long-term goals. It is converting
opportunities and establishing itself across multiple markets and
the scaling-up of its production capability is underway,
demonstrating a leading role that Equipmake has in the transition
to zero-emission powertrains.
Investments in areas including supply chain management, product
development and improved facilities are targeted to improve
margins, in the current and subsequent financial years, and whilst
there are signs that recent, well documented, inflationary
pressures are abating, the Company remains alive to further
potential opportunities and impacts going forward.
The Board's expectations for FY2024 are underpinned by a
contracted orderbook(*) of GBP9.2m (excluding pending opportunities
above), as of 29 September 2023 with a number of opportunities at
advanced stages which are expected to be converted into contracted
orders in the coming months."
(*) The contracted orderbook is orders that have been contracted
but where revenue hasn't been recognised.
**S**
For further information, please contact:
Equipmake Via St Brides Partners
Ian Foley, Founder and CEO
Steven McGillivray, CFO
Panmure Gordon (Corporate Adviser & Joint Tel: +44 (0) 20 7886
Broker) 2500
John Prior / James Sinclair-Ford / Freddie
Twist
Hugh Rich / Sam Elder
VSA Capital Limited (Joint Broker) Tel: +44 (0) 20 3005
Simon Barton / Simba Khatai / Alex Cabral 5000
St Brides Partners (Financial PR Adviser) Tel: +44 (0) 20 7236
Susie Geliher / Paul Dulieu 1177
equipmake@stbridespartners.co.uk
About Equipmake
Equipmake is the UK-based engineering specialist pioneering the
development and production of electrification products to meet the
needs of the automotive, aerospace and other sectors in support of
the transition from fossil-fuelled to zero-emission
powertrains.
Equipmake is a leader in ultra-high performance electric motors
and complete EV drivetrains and ultra-fast power electronic
systems. As well as developing proprietary technology - such as an
ultra-compact, lightweight high performance spoke motor - it also
offers industry-leading EV consultancy.
Equipmake has developed a vertically integrated solution
providing fully bespoke solutions. The Company has built a
significant pipeline of opportunities, as demand for electric
vehicles increases as part of the global decarbonisation
movement.
Chairman's Statement
The route to net zero is firmly on the agenda for governments,
businesses and individual consumers, and the stakes are high.
The transition to electric vehicles is important in this journey
and with the cost and efficiency of the key components including
batteries, motors and inverters, their mainstream adoption is
increasingly economically attractive and compelling.
Electric passenger cars receive a great deal of press attention
and their volume and impact is very significant. This however is
just one facet of a universal EV movement, and it is thanks to the
innovation and vision of the Equipmake executive team, that our
company is pioneering electrification products across multiple
transport sectors, helping many industries adopt their own paths to
carbon reduction.
Investors who joined us early in our journey as a public company
will have noted our prominence in the bus and coach industries, a
core pillar of our business. We are scaling up to meet increasing
demand for repowering in this sector, including adding a second
site, as it continues to provide significant opportunity for
growth.
Retrofitting buses and coaches, by replacing incumbent Diesel
technology with battery solutions, enables operators to accelerate
their net zero ambitions, whilst providing a sustainable approach
to extending the life of their assets and reducing spend on new
electric vehicles. There are approximately 6,000 non-electric buses
currently operating across the UK alone that are between 6 and 10
years old, being strong candidates for such retrofitting.
Government support, through various Research & Development
(R&D) programmes, has been important to Equipmake's development
over the past 10 years. It is pleasing however that as we begin to
mature our product offering, we saw in our last financial year that
97.7% of revenue was delivered from commercial contracts, up from
72.1% in the previous period. UK government affiliated agencies,
most notably Innovate UK and the Advanced Propulsion Centre,
continue to strongly support the transition towards net zero and we
are delighted to maintain a close relationship with them and play
our role in helping meet these nationwide objectives. One
demonstration of this was the grant funding of up to GBP1.6m,
announced in April 2023, under the Hydrogen Electric Integrated
Drivetrain Initiative (HEIDI). This funding is being directed to
the development of an integrated Hydrogen fuel cell battery hybrid
system, featuring Equipmake's motor, inverter, and related
technologies for use across multiple vehicle systems including
buses, goods and passenger vehicles.
Our intellectual property (IP) in particularly electric motors
and inverters is central to our long-term growth. During the year
we saw the start of how we intend to generate incremental returns
from these assets, with our licensing agreement with Sona Comstar.
This agreement sees Equipmake license certain products from its
range of drive motors, inverter, and electric powertrain technology
to Sona Comstar for applications in electric cars, buses,
commercial vehicles and off-road vehicles in India, Thailand and
other select South Asian countries. These are important markets for
Equipmake, and addressing them via an agreement with Sona Comstar,
a leading locally based automotive industry supplier, is a key
milestone for us. In India alone, the share of electric passenger
vehicles is forecast to increase to 25% by 2032, up from less than
1% in 2022, and electric buses to increase to 21% by 2032, up from
5% in 2022.
The importance of this agreement is that, in addition to the
one-time licence fee received during the period, Equipmake will
receive royalties on the licensed products manufactured and sold by
Sona Comstar.
This is a good example of how Equipmake's IP, which has been
developed over the past 10 years, can be leveraged to access new
markets at minimal cost, through contractual relations with high
quality partners. We expect to use this model with other suitable
original equipment manufacturers (OEMs) and tier 1 suppliers over
the coming years as we look to scale revenue and address new
geographies and sectors.
Our strategy to diversify our sector penetration, using a common
pool of core product IP, has gained momentum during the year as we
have proven our product applications in selected industries. We are
now working with customers in markets directly adjacent to the bus
industry, including coaches, but also in natural extensions to
these, with for example Emergency One, the largest fire truck
manufacturer in the UK. We have also entered a technology
partnership with H55 S.A. ("H55"), a leading aerospace electric
propulsion company, for the intended supply of an aerospace variant
of our electric motor, have supplied an ultra-high-performance
motor and inverter for a rocket fuel pump with Gilmour Space and an
ultra-lightweight motor and inverter for Vertical Aerospace.
Post period end, in July 2023, we announced that we had supplied
a variant of our e-drivetrain system for use in a world-first
long-range electric flying boat, opening up further possibilities
in the marine industry.
Our core IP and product family is directly applicable across
many multi-billion-pound sectors, and our strategy is a careful and
manageable route to several of those markets over time. Whilst this
nascent electrification movement feels, to many, that it is only
just beginning, it is important to note that Ian Foley and the
Equipmake R&D team have been at its forefront for decades,
which is what sets our business apart. Indeed, the majority of our
business comes to us through word of mouth, with OEMs seeking us
out as experts with proven production capabilities, and a track
record of innovation.
It is with this in mind that I look to the future with enormous
enthusiasm for how we anticipate growing our business over time,
and in supporting our customers ambitions toward a lower carbon
future.
I would like to extend my gratitude to the whole Equipmake team
and to our shareholders for their hard work, shared vision and
commitment to our company's growth.
Clive Scrivener
Non-Executive Chairman
29th September 2023
Chief Executive's Review
Introduction
The financial year ending 31 May 2023 ("FY2023") has been a
pivotal year for Equipmake, during which it has continued to prove
itself as a true pioneer of electrification solutions that address
the global demand for zero-emission products. During the past
financial year, the Company reported a 36.3% year-on-year increase
in revenue (inc. grants) to GBP5.1m, and secured GBP16.2m of gross
investment, enabling the execution of its growth plans.
Business Overview
FY2023 was transformational for Equipmake. The admission to the
Aquis Stock Exchange in July 2022 enabled the Company to progress
its plans for growth, in particular the commercialisation of its EV
powertrain solution, which culminated in the delivery of repowered
buses into service for First Bus York and TfL, as well as the
delivery of fire truck powertrains for both the UK and US
markets.
To facilitate further expansion, in March 2023, the Company
secured a flexible lease on a 50,000 sq. ft unit in Norfolk, which
will provide an annual capacity for vehicle repowering of 200 units
per annum, and space to increase production capacity for motor and
battery build. Scaling-up will be completed in phases, with the
first phase to be completed by the end of FY2024. Following
completion of phase one, the Company will have the capability to
deliver at a monthly run rate that equates to 100 repowers per
annum.
The profile of Equipmake was enhanced further by the signing of
the licencing agreement with Sona Comstar, securing an established
manufacturing partner that enables it to address demand for certain
EV products in India, Thailand and other select South Asian
countries. Product development commenced during Q4 of FY2023, with
production expected to commence in 2025.
The Company reinforced its position as a market leader of
electrification products for Aerospace by delivering motors and
inverters to existing clients and by securing a new partnership
with Swiss electric propulsion company, H55, to certify an Electric
Propulsion System (EPS) for production. The EPS will initially be
used on the Bristell B23 Energic aircraft, a two-seater electric
training aircraft, with initial sales expected in 2025.
The Company did experience a myriad of supply chain challenges
during FY2023, particularly in respect of electrical components
which impacted both availability and price, and significant one-off
price spikes resulting from the Russia/Ukraine war. This ultimately
impacted gross margin through the absorption of higher prices
and/or the redesign of products to incorporate alternative
components. The in-house engineering capability to pivot to
alternative components mitigated the severity of these issues on
customer deliveries and enabled the Company to report its highest
annual revenue number to date.
Innovation and new product development are core principles of
Equipmake and in FY2023, the Company continued to invest in these
areas. During the year, it capitalised GBP0.8m of development costs
relating to its powertrain products and was successful in obtaining
up to GBP1.6m of grant funding via Innovate UK / APC to develop a
powertrain (including the battery management system and thermal
management system) that integrates with a hydrogen fuel cell. The
project spans 27 months and further advances the capability of
Equipmake's product range.
Current Trading
The business is trading in line with market expectations, with a
strong opening orderbook and significantly advanced discussions
with new and existing clients, underpinning the revenue expectation
for FY2024. This includes the delivery and trial of the repowered
double deck diesel vehicle for First Bus, which is still to be
completed. Since the balance sheet date, the business has been
successful in securing the following opportunities:
-- Bus repower contracts for delivery in FY2024:
o Newport Transport - eight repowers for GBP1.475m.
o Big Bus Tours - nine repowers for GBP1.575m.
-- Emergency One - three fire truck powertrains for GBP0.6m.
-- Contract with a new OEM for the repower of an airside
operational vehicle. The prototype project is for GBP0.6m and will
be delivered in FY2024, but also provides a timeframe for the
commencement of discussions regarding manufacturing and a supply
agreement.
Outlook
The Company is buoyed by the successes achieved since the IPO
and is confident that it will achieve both its short-term and
long-term goals. It is converting opportunities and establishing
itself across multiple markets and the scaling-up of its production
capability is underway, demonstrating the leading role that
Equipmake has in the transition to zero-emission powertrains.
Investments in areas including supply chain management, product
development and improved facilities are targeted to improve
margins, in the current and subsequent financial years, and whilst
there are signs that the recent price spikes are abating, the
Company remains alive to further potential opportunities and
impacts going forward.
The Board's expectations for FY2024 are underpinned by a
contracted orderbook of GBP9.2m (excluding pending opportunities
above), as of 29th September 2023 with a number of opportunities at
advanced stages which are expected to be converted into contracted
orders in the coming months. The contracted orderbook is orders
that have been contracted but where revenue hasn't been
recognised.
This report was approved by the board on 29th September 2023 and
signed on its behalf.
Ian Foley
Chief Executive Officer
Group Strategic Report
Introduction
The directors present their strategic report and the audited
financial consolidated statements for the year ended 31 May 2023.
The company acts as a holding company for Equipmake Limited,
collectively referred to as Equipmake.
Principal Activity
Equipmake is a UK-based engineering specialist pioneering the
development and production of electrification products across the
automotive, aerospace, bus, coach, and fire truck industries,
supporting the transition from fossil-fuelled to zero-emission
powertrains.
Business model
Through its vertically integrated business model, Equipmake
designs and manufactures a significant number of the core
technologies that constitute an EV powertrain (motors, inverters,
battery packs, control systems) and integrates these components
into a working system. The individual components or the full
powertrain can be sold to an OEM, or Equipmake can integrate the
powertrain into the vehicle for the end user. It also licences its
products to select partners for volume manufacture.
A key differentiator for Equipmake is its ability to provide the
most appropriate solution for a given application, customising its
solution to match the cost and performance demands of its
customers. Given the relative immaturity of the EV market, the
Company looks beyond a transactional relationship and positions
itself to partner its customers with their own electrification
journey. This approach has helped the Company to establish a
leading position in the bus and coach repowering market and secure
key customers in the electric fire truck market.
The above approach, coupled with Equipmake's reputation for
innovation and high-performance products has led to it securing
contracts to supply EV components into the aerospace market and
facilitated the partnership with H55 to design prototype motors for
its propulsion system, with the intention to develop a fully
certified system for production.
Innovation and new product development is integral to the
strategic direction of Equipmake. Historically, a significant
amount of development has been completed with support from Innovate
UK / APC grant projects and this continues to be the case. In
addition to receiving funding towards development, the Company also
benefits from the wider collaboration that these projects
provide.
Business review
Total revenue (exclusive of grant revenue) increased to GBP4.9m,
which represents year-on-year increase of 84.8% (FY2022: GBP2.7m).
Total revenue (inclusive of grant revenue) increased to GBP5.1m, an
increase of 36.3% (FY2022: GBP3.7m). This growth is driven by the
commencement of delivery of repowered vehicles to First Bus York
and motors and inverters to Equipmake's aerospace customers,
increases in the delivery volumes of fire truck powertrains and its
ASIL-D inverter to an electric hyper car OEM. The signing of the
Sona Comstar licencing agreement also contributed GBP0.3m of
licencing revenue which was not present in the prior year. Grant
revenue decreased by GBP0.9m due to the timing of the completion of
historic projects and the commencement of new ones.
Gross margin is reported both inclusive and exclusive of grants.
Whilst grants have a positive impact on the Company, the partially
funded nature of these projects results in a gross loss which
distorts the operational performance of the Company. Gross margin
(inclusive of grants) was GBP1.2m or 23.9% (FY2022: loss GBP2.4m).
Total gross margin (exclusive of grants) was 25.5% (FY2022: no
comparative available).
Administrative costs were GBP5.3m (FY2022: GBP1.9m), reflecting
the investments made in a number of areas. GBP2.8m of the
year-on-year increase relates to staff costs, reflecting a 19%
increase in the average headcount (FY2023: 82, FY2022: 69) and the
reporting of development costs within overheads. Costs relating to
property increased by GBP0.2m, due to the new property lease signed
at the end of March 23 and increased electricity costs. There has
also been a year-on-year increase in professional fees since the
IPO of GBP0.2m.
During the year, the Company received GBP16.2m in gross proceeds
from the IPO and the subsequent fundraise in January/February 2023,
to support the expansion plans of the business.
The cash balance at the end of the year was GBP7.0m (FY2022:
1.9m), an increase of GBP5.1m. This reflects the impact of the
fundraising activities during the year, less the investments made
into the business, principally funding trading activities and
working capital requirements.
As part of the Company's strategy for mitigating supply chain
issues and its plans for expansion, there has been a significant
investment in stock. The closing value as at the balance sheet date
was GBP3.0m, (FY2022: GBP0.8m). Total debtors have increased to
GBP4.5m (FY2022: GBP1.9m) due to the non-linear phasing of revenue
recognition and the overall increase in revenue. The value of
creditors due within one year has decreased by GBP3.8m to GBP2m
(FY2022: GBP5.8m) due to the inclusion of a GBP3.8m convertible
loan note in the prior year total. This was converted into equity
at the IPO.
Loss after taxation was GBP4.8m (FY2022: GBP5.3m) leading to a
loss per share of 0.60p (FY2022: 2.3p).
Other key performance indicators
The Directors monitor the business internally with several
performance indicators: orderbook, cash flow, health and safety,
adherence to plan and quality. The board has assessed results
against these KPIs and are happy with the progress that has been
made.
The contracted orderbook value as at 31 May 2023 was GBP5.5m,
increasing to GBP8.6m as at 27th September 23, reflecting the
successful conversion of opportunities into orders since the start
of the FY2024 financial year.
Cash at 31st May 2023 was GBP7.0m (2022: GBP1.9m), reflecting
the external funding received and the significant investment made
in the business during the financial year.
Principal risks and uncertainties
The directors continuously review and take steps to ensure that
the risks and uncertainties faced by the Company and its subsidiary
are appropriately managed and mitigated against. These risks are
categorised in the table below.
Risk Description Mitigation Strategy
Financial risks - The Group is exposed Contractual clauses
Price risk to price variations to flex the sales
in respect of its price when there are
purchases and its unavoidable significant
sales price. increases in component
costs.
Maintain strong relationships
with customers and
suppliers to facilitate
lower cost alternatives.
-------------------------------- ------------------------------------------
Financial risks - The Group is currently The listing provides
Liquidity risk loss making and therefore access to investors
requires access to and transparency to
cash to fund development. investors of market
value.
-------------------------------- ------------------------------------------
Financial risks - The Group is exposed When no natural hedge
foreign exchange risk to foreign exchange is possible and the
risk with a small currency exposure
number of overseas cannot be avoided,
customers and procures the Company will utilise
certain components forward contracts
in foreign currency. to hedge against foreign
exchange risk.
-------------------------------- ------------------------------------------
Operational risks Reliance on key suppliers In-house engineering
- supply chain risk / single source components. of components to design
Supply chain disruptions. products around multi-sourced
commodities.
In-house Procurement
expertise to
identify component
shortages and dynamically
manage stock levels.
-------------------------------- ------------------------------------------
Operational risks The Group is introducing In-house testing process
- execution risk new products and technology that exceeds customer
to the market. requirements coupled
with operational trials.
-------------------------------- ------------------------------------------
Operational risks The Group's success Contractual terms
- Dependence on key depends to a significant and incentives to
executives and personnel degree upon the vision, retain existing employees.
technical and specialist Plans to invest in
skills, experience formal training and
and performance of development programme
its Directors, senior to facilitate development
management and other of in-house talent
key personnel. together with a strategy
to build the senior
team through external
hires.
-------------------------------- ------------------------------------------
Intellectual Property The Group may not The Group reduces
(IP) risks be able to sufficiently this risk by utilising
protect its IP and the services of patent
proprietary expertise. and trademark attorney
and technology is
patented where possible.
It also controls access
to the technology
through software controls
and encryptions.
-------------------------------- ------------------------------------------
Directors' statement of compliance with duty to promote the
success of the Group (Section 172 Statement)
Section 172 of the Companies Act 2006 requires that Directors of
a company must act in ways that they consider, in good faith, would
be most likely to promote the success of the company for the
benefit of its members as a whole, and in doing so have regard
(amongst other matters) to:
-- the likely consequences of any decision in the long term;
-- the interests of the company's employees;
-- the need to foster the company's business relationships with
suppliers, customers and others;
-- the impact of the company's operations on the community and the environment;
-- the desirability of the company maintaining a reputation for
high standards of business conduct; and
-- the need to act fairly as between members of the company.
The board has identified the following stakeholder groups and
engages with them to foster strong relations and to act fairly
between them:
-- Customers: Equipmake engages with customers at all stages of
the project life cycle - from concept design through to the
production phase and after sales service and support. This is
mutually beneficial and ensures that relationships with customers
are not purely transactional and are instead focused on long-term
relationships.
-- Employees: the employees are critical to the long-term
success of Equipmake. The Company has introduced a strategy which
rewards and retains its staff. Staff received share options in the
previous financial year, it continually reviews its overall
benefits package to maximise its value to employees and is
addressing development needs through in-house and external
training. Post balance sheet date, it has set up an apprenticeship
scheme and a formal management training programme.
-- Grant bodies and other government agencies: Equipmake has
benefited from a number of Innovate UK Research and Development
grants in recent years and maintains a good relationship with the
grant issuing bodies. The Advanced Propulsion Centre (APC) has
supported multiple projects and participated in press events
post-completion of the grant projects.
-- Investors and shareholders: The Company engages with
investors through its annual and interim reports, AGM and analyst
and investor presentations.
-- Partnerships: Equipmake has established partnerships with
multiple companies to facilitate the exploitation of the
opportunities in the automotive, bus and aerospace markets.
This report was approved by the board on 29th September 2023 and
signed on its behalf.
Ian Foley
Chief Executive Officer
Consolidated Statement of Comprehensive Income
Year ended Year ended
31 May 31 May
2023 2022
Note GBP's GBP's
Turnover 4 5,053,540 3,706,785
Cost of sales (3,845,263) (6,087,868)
----------- -----------
Gross loss 1,208,277 (2,381,083)
Administrative expenses (5,346,307) (1,919,378)
Other operating income 5 280,658 565,132
Share based payment charge 29 (475,321) (574,227)
Exceptional items 12 (615,064) (750,000)
Operating loss 6 (4,947,757) (5,059,556)
Interest receivable and similar income 10 16,908 (1,182)
Interest payable and similar expenses 11 (86,505) (144,994)
Loss before taxation (5,017,354) (5,205,732)
Tax on loss 13 185,979 (104,499)
=========== ===========
Loss for the financial year (4,831,375) (5,310,231)
Total other comprehensive income - -
----------- -----------
Total comprehensive loss for the year (4,831,375) (5,310,231)
=========== ===========
Loss for the year attributable to:
Non-controlling interests - (692,772)
Owners of the parent Company (4,831,375) (4,617,459)
----------- -----------
(4,831,375) (5,310,231)
Loss per share GBP's GBP's
Basic and diluted 27 (0.0060) (0.023)
The Group's activities derive from continuing operations.
The notes below form an integral part of these Financial
Statements.
Consolidated Balance Sheet
As at As at
31 May 31 May
2023 2022
Assets Note GBP 's GBP's
Fixed assets
Intangible assets 15 783,037 -
Tangible assets 16 772,681 527,139
------------ -----------
1,555,718 527,139
Current assets
Stocks 18 2,958,325 807,973
Debtors: amounts falling due within
one year 19 4,501,978 1,920,728
Cash at bank and in hand 20 6,999,686 1,876,083
------------ -----------
Total current assets 14,459,989 4,604,784
Liabilities
Creditors: amounts falling due within
one year 21 (1,957,276) (5,794,645)
------------ -----------
Net current assets /(liabilities) 12,502,713 (1,189,861)
------------
Total assets less current liabilities 14,058,431 (662,722)
------------ -----------
Creditors: amounts falling due after
more than one year 22 (255,183) (307,169)
Provisions for liabilities:
Other provisions 25 - (44,057)
------------ -----------
Net assets /(liabilities) 13,803,248 (1,013,948)
============ ===========
Capital and reserves
Share capital 26 94,823 50,000
Share premium 28 19,128,427 -
Other reserves 28 5,748,311 5,748,311
Profit and loss account 28 (12,217,861) (7,386,486)
Share-based payment reserve 28 1,049,548 574,227
Total capital and reserves 13,803,248 (1,013,948)
============ ===========
The notes below form an integral part of these Financial
Statements.
The Financial Statements were approved by the Board of Directors
on 29th September 2023 and were signed on its behalf by:
Ian Foley
Chief Executive Officer
Company number: 04303233
Company Balance Sheet
Assets Note As at As at
31 May 31 May
2023 2022
GBP 's GBP's
Fixed assets
Investments 17 17,933,408 6,458,087
----------- -----------
17,933,408 6,458,087
Current assets
Debtors: amounts falling due within
one year 19 50,452 1,269,386
Cash at bank and in hand 20 6,601,712 1,737,118
----------- -----------
Total current assets 6,652,164 3,006,504
Liabilities
Creditors: amounts falling due within
one year 21 (504,334) (3,859,315)
----------- -----------
Net current assets/ (liabilities) 6,147,830 (852,811)
-----------
Total assets less current liabilities 24,081,238 5,605,276
----------- -----------
Net assets 24,081,238 5,605,276
=========== ===========
Capital and reserves
Share capital 26 94,823 50,000
Share premium 28 19,128,427 -
Other reserves 28 4,962,502 4,962,502
Merger relief reserve 28 849,982 849,982
Profit and loss account 28 (2,004,044) (831,435)
Share-based payment reserve 28 1,049,548 574,227
Total capital and reserves 24,081,238 5,605,276
=========== ===========
As permitted by s408 Companies Act 2006, the Company has not
presented its own profit and loss account and related notes. The
Company's loss for the year was GBP1,172,609 (2022:
GBP876,485).
The notes below form an integral part of these Financial
Statements.
The Financial Statements were approved by the Board of Directors
on 29th September 2023 and were signed on its behalf by:
Ian Foley
Chief Executive Officer
Company number: 04303233
Consolidated Statement In Changes Of Equity
Equity
Share attributable
Profit based to owners
Share Share Other and loss payment of parent Non-controlling Total
Note capital premium reserves account reserve company interests equity
GBP's GBP's GBP's GBP's GBP's GBP's GBP's GBP's
------------ -------- ------------ ------------ -------- ------------- ---------------- ------------
Balance at 01
June 2021 2 - 5,835,579 (2,987,394) - 2,848,187 1,302,639 4,150,826
------------ -------- ------------ ------------ -------- ------------- ---------------- ------------
Comprehensive
loss for the year
Loss for the year - - - (4,617,459) - (4,617,459) (692,772) (5,310,231)
------------ -------- ------------ ------------ -------- ------------- ---------------- ------------
- - - (4,617,459) - (4,617,459) (692,772) (5,310,231)
------------ -------- ------------ ------------ -------- ------------- ---------------- ------------
Transactions with
owners
Reclassification
of
non-controlling
interest
following
share-for-share
exchange - - - 609,867 - 609,867 (609,867) -
Dividends: Equity
capital 14 - - - (395,000) - (395,000) - (395,000)
Share-based
payments
movement 29 - - - - 574,227 574,227 - 574,227
Share-for-share
exchange 26 16,000 - (49,770) - - (33,770) - (33,770)
Issue of B shares 26 5,000,000 - (5,000,000) - - - - -
Cancellation of
B shares 26 (5,000,000) - 5,000,000 - - - - -
Purchase of own
shares 26 (3,500) - - 3,500 - - - -
Bonus issue of
shares 26 37,498 - (37,498) - - - - -
--------
Total
transactions
with owners 49,998 - (87,268) 218,367 574,227 755,324 (609,867) 145,457
------------ --------
Balance at 31
May 2022 50,000 - 5,748,311 (7,386,486) 574,227 (1,013,948) - (1,013,948)
============ ======== ============ ============ ======== ============= ================ ============
The notes below form an integral part of these Financial
Statements.
Consolidated Statement In Changes Of Equity
Equity
Share attributable
Profit based to owners
Share Share Other and loss payment of parent Non-controlling Total
Note capital premium reserves account reserve company interests equity
GBP's GBP's GBP's GBP's GBP's GBP's GBP's GBP's
-------- ----------- ---------- ------------- ---------- ------------- ---------------- ------------
Balance at 01
June
2022 50,000 - 5,748,311 (7,386,486) 574,227 (1,013,948) - (1,013,948)
-------- ----------- ---------- ------------- ---------- ------------- ---------------- ------------
Comprehensive
loss
for the year
Loss for the
year - - - (4,831,375) - (4,831,375) - (4,831,375)
-------- ----------- ---------- ------------- ---------- ------------- ---------------- ------------
- - - (4,831,375) - (4,831,375) - (4,831,375)
-------- ----------- ---------- ------------- ---------- ------------- ---------------- ------------
Transactions
with
owners
Loan
conversion 26 8,824 3,741,176 - - - 3,750,000 - 3,750,000
Issue of
shares 26 35,999 16,199,001 - - - 16,235,000 - 16,235,000
Share issue
costs - (811,750) - - - (811,750) - (811,750)
Share-based
payments
charge 29 - - - - 475,321 475,321 - 475,321
-----------
Total
transactions
with owners 44,823 19,128,427 - - 475,321 19,648,571 - 19,648,571
-------- -----------
-
-------- -----------
Balance at 31
May
2023 94,823 19,128,427 5,748,311 (12,217,861) 1,049,548 13,803,248 - 13,803,248
======== =========== ========== ============= ========== ============= ================ ============
The notes below form an integral part of these Financial
Statements.
Company Statement Of Changes In Equity
Share
Merger Profit based
Share Share Other relief and loss payment Total
Note capital premium reserves reserve account reserve equity
------------ -------- ---------- ------------ ------------ -------- ----------
GBP's GBP's GBP's GBP's GBP's GBP's GBP's
------------ -------- ---------- ------------ ------------ -------- ----------
Balance at 01
June 2021 2 - - - 436,550 - 436,552
------------ -------- ---------- ------------ ------------ -------- ----------
Comprehensive
loss for
the year
Loss for the
year - - - - (876,485) - (876,485)
------------ -------- ---------- ------------ ------------ -------- ----------
- - - - (876,485) - (876,485)
------------ -------- ---------- ------------ ------------ -------- ----------
Transactions
with owners
Dividends:
Equity capital 14 - - - - (395,000) - (395,000)
Share-based
payments
charge 29 - - - - - 574,227 574,227
Share-for-share
exchange 26 16,000 - - 5,849,982 - - 5,865,982
Issue of B
shares 26 5,000,000 - - (5,000,000) - - -
Cancellation of
B shares 26 (5,000,000) - 5,000,000 - - - -
Purchase of own
shares 26 (3,500) - - - 3,500 - -
Bonus issue of
shares 26 37,498 - (37,498) - - - -
--------
Total
transactions
with
owners 49,998 - 4,962,502 849,982 (1,267,985) 574,227 5,168,724
------------ --------
Balance at 31
May 2022 50,000 - 4,962,502 849,982 (831,435) 574,227 5,605,276
============ ======== ========== ============ ============ ======== ==========
The notes below form an integral part of these Financial
Statements.
Company Statement Of Changes In Equity
Share
Merger Profit based
Share Share Other relief and loss payment Total
Note capital premium reserves reserve account reserve equity
-------- ----------- ---------- ---------- ------------ ---------- ------------
GBP's GBP's GBP's GBP's GBP's GBP's GBP's
-------- ----------- ---------- ---------- ------------ ---------- ------------
Balance at 01
June 2022 50,000 - 4,962,502 849,982 (831,435) 574,227 5,605,276
-------- ----------- ---------- ---------- ------------ ---------- ------------
Comprehensive
income
for the year
Loss for the
year - - - - (1,172,609) - (1,172,609)
-------- ----------- ---------- ---------- ------------ ---------- ------------
- - - - (1,172,609) - (1,172,609)
-------- ----------- ---------- ---------- ------------ ---------- ------------
Transactions
with owners
Loan
conversion 26 8,824 3,741,176 - - - - 3,750,000
Issue of
shares 26 35,999 16,199,001 - - - - 16,235,000
Share issue
costs - (811,750) - - - - (811,750)
Share based
payments
charge 29 - - - - - 475,321 475,321
Total
transactions
with
owners 44,823 19,128,427 - - - 475,321 19,648,571
-------- -----------
Balance at 31
May 2023 94,823 19,128,427 4,962,502 849,982 (2,004,044) 1,049,548 24,081,238
======== =========== ========== ========== ============ ========== ============
The notes below form an integral part of these Financial
Statements.
Consolidated Statement Of Cashflows
For the For the
year ended year ended
31 May 31 May
2023 2022
GBP's GBP's
Cash flows from operating activities
Loss for the year (4,831,375) (5,310,231)
Adjustments for:
Amortisation of intangible assets 27,380 -
Depreciation of tangible assets 187,108 220,668
Profit on disposal of tangible assets (14,951) -
Interest paid 86,505 144,994
Interest received (16,908) 1,182
RDEC Taxation credit (net) (197,854) (445,496)
SME R&D credit (232,389) -
Increase in stocks (2,150,351) (763,526)
Increase in debtors (2,137,644) (443,613)
(Decrease)/increase in creditors (156,025) 598,558
(Decrease)/increase in provisions (44,057) 44,057
Corporation tax received - 353,149
Share-based payments expense 475,321 574,227
Fair value losses - convertible loan - 750,000
Stamp duty paid on share-for-share exchange - (33,770)
Net cash flows used in operating activities (9,005,240) (4,309,801)
------------------ -----------
Cash flows from investing activities
Purchase of tangible fixed assets (443,198) (135,248)
Sale of tangible fixed assets 25,500 -
Intangible assets - capitalisation of
internal development cost (810,417) -
-----------
Net cash used in investing activities (1,228,115) (135,248)
------------------ -----------
Cash flows from financing activities
Issue of ordinary shares 16,235,000 -
Share issue costs (811,750) -
New secured hire purchase loans 106,779 -
Repayment of obligations under finance
leases and hire purchase contracts (144,177) (89,488)
Dividends paid - (395,000)
Interest paid (32,434) (35,679)
Interest received 3,540 -
New convertible loan - 3,000,000
-----------
Net cash from financing activities 15,356,958 2,479,833
------------------ -----------
Net increase/(decrease) in cash and cash
equivalents 5,123,603 (1,965,216)
Cash and cash equivalents at the beginning
of the year 1,876,083 3,841,299
------------------ -----------
Cash and cash equivalents at the end
of the year 6,999,686 1,876,083
================== ===========
Consolidated Analysis Of Net Debt For The Year Ended 31 May
2023
At 1 June Cash flows Payments Increase At 31 May
2022 made in in lease 2023
year liability
GBP's GBP's GBP's GBP's GBP's
Cash at bank and in hand 1,876,083 5,123,603 - - 6,999,686
Finance leases (444,681) - 144,179 (106,779) (407,281)
Convertible loan notes (3,750,000) 3,750,000 - - -
----------- ---------- -------- ---------- ---------
(2,318,598) 8,873,603 144,179 (106,779) 6,592,405
=========== ========== ======== ========== =========
The notes below form an integral part of these Financial
Statements.
Notes To The Financial Statements
1. General information
Equipmake Holdings P lc is a public company limited by shares
incorporated in England and Wales. The company registration number
is 04303233. The registered office is Unit 7, Snetterton Business
Park, Snetterton, Norfolk, NR16 2JU.
The Group consists of the parent Equipmake Holdings Plc and
subsidiary Equipmake Limited. All Group entities are included
within the consolidation.
Equipmake is a UK-based engineering specialist pioneering the
development and production of electrification products across the
automotive, aerospace, bus, coach, and fire truck industries
support of the transition from fossil-fuelled to zero-emission
powertrains.
These financial statements are presented in sterling which is
the functional currency of the entity and are rounded to the
nearest GBP1.
2. Accounting policies
2.1 Basis of preparation of financial statements
These financial statements have been prepared in accordance with
FRS 102 "The Financial Reporting Standard applicable in the UK and
Republic of Ireland" ("FRS 102") and the requirements of the
Companies Act 2006.
The financial statements have been prepared under the historical
cost convention unless otherwise specified within these accounting
policies.
The Company has taken advantage of the exemption allowed under
section 408 of the Companies Act 2006 and has not presented its own
Statement of Comprehensive Income in these financial
statements.
The Company is a qualifying entity for the purposes of FRS 102,
being a member of a group where parent of that group prepares
publicly available consolidated financial statements, including the
Company, which are intended to give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
group. The Company has therefore taken advantage exemptions from
the following disclosure requirements for parent company
information presented within the consolidated financial
statements:
- Section 7 'Statement of Cash Flows': Presentation of a
statement of cash flow and related notes and disclosures.
- Section 33 'Related Party Disclosures' - Compensation for key management personnel.
The following principal accounting policies have been
applied:
2.2 Basis of consolidation
The consolidated financial statements present the results of the
Company and its own subsidiaries ("the Group") as if they form a
single entity. Intercompany transactions and balances between group
companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of
business combinations using the purchase method. In the Balance
Sheet, the acquiree's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair
values at the acquisition date.
In accordance with the transitional exemption available in FRS
102, the Group has chosen not to respectively apply the standard to
business combinations that occurred before the date of transition
to FRS 102, being 1 June 2016.
2.3 Going concern
The financial statements have been prepared on a going concern
basis which the Directors believe to be appropriate. The loss for
the year was in line with expectations and the GBP16.2m of gross
fundraising completed during the year, provides adequate funding
for the Company to execute its plans for growth. The Company has
prepared detailed financial forecasts and cash flow projections
which reflect the anticipated revenue growth over the next few
years, in line with the strategy communicated at the IPO. After
considering a number of reasonable sensitivities and the
availability of a number of mitigation levers, such as the deferral
of capital expenditure, recruitment and discretionary overhead
spend, as well as the re-phasing of working capital
2. Accounting policies (continued)
commitments to align with order conversion, the Directors
confirm that sufficient cash is available to meet the Company's
liabilities as they fall due for the foreseeable future and at
least twelve months from the date of approval of these financial
statements. The detailed cash flow calculations are based on the
Company's annual budget, approved by the board and reflect a number
of key assumptions including:
-- revenue growth supported by current orderbook and opportunity pipeline;
-- margin rates incorporating expected input costs and sales prices;
-- working capital requirements incorporating current customer and supplier payment terms;
-- increased overhead spend to support the anticipated increase in revenue; and
-- continued investment in product development.
Further detail regarding current trading and the outlook for the
business is provided with the CEO statement on pages 4 and 5 of
this report. The Directors believe that the Company is well placed
to navigate the challenges that it is likely to face during a
period of significant growth and have a reasonable expectation that
it has sufficient resources to meet its financial obligations for
the foreseeable future. On this basis, the Directors continued to
adopt the going concern basis for preparation of these financial
statements.
2.4 Foreign currency translation
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the spot exchange rates at the dates of the
transactions.
At each year end foreign currency monetary items are translated
using the closing rate. Non-monetary items measured at historical
cost are translated using the exchange rate at the date of the
transaction and non-monetary items measured at fair value are
measured using the exchange rate when fair value was
determined.
2.5 Revenue
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. Revenue is measured as the fair value of the
consideration received or receivable, excluding trade discounts,
and net of VAT.
Revenue from the sale of goods is recognised when the
significant risks and rewards of ownership of the goods have passed
to the buyer (under "ex works" incoterms, this is typically when
the goods are made available for transport or collection but the
transfer of rights depends on the contractual terms agreed), the
amount of revenue can be measured reliably, it is probable that the
economic benefits associated with the transaction will flow to the
entity and the costs incurred or to be incurred in respect of the
transaction can be measured reliably.
Revenue from contracts for the provision of services is
recognised by reference to the stage of completion when the stage
of completion, costs incurred and costs to complete can be
estimated reliably. The stage of completion is calculated by
comparing costs incurred, mainly in relation to contractual hourly
staff rates and materials, as a proportion of total costs. Where
the outcome cannot be estimated reliably, revenue is recognised
only to the extent of the expenses recognised that it is probable
will be recovered.
Revenue from licencing agreements is recognised when it is
probable that the economic benefits associated with the transaction
will flow to the entity and the amount of revenue can be measured
reliably. Revenue is recognised on an accrual basis in accordance
with the substance of the relevant agreement, including
consideration of ongoing obligations, guaranteed minimum payments
and payments contingent upon future events.
2.6 Leases
Operating leases: the Group as a lessee
Rentals paid under operating leases are charged to profit and
loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an
operating lease are recognised on a straight-line basis over the
lease term unless another systematic basis is representative of the
time pattern of the lessee's benefit from the use of the leased
asset.
Finance leases: The Group as a lessee
An asset and corresponding liability are recognised for leasing
agreements that transfer to the Group substantially all of the
risks and rewards incidental to ownership ("finance leases"). The
amount capitalised is the fair value of the leased asset or, if
lower, the present value of the minimum lease payments payable
during the lease term, both determined at inception of the lease.
Lease payments are treated as consisting of capital and interest
elements. The interest is charged to statement of comprehensive
income, so as to produce a constant periodic rate of interest on
the remaining balance of the liability. Contingent rents are
expensed as incurred.
2.7 Government grants
Grants are accounted under the accruals model as permitted by
FRS 102. Grants relating to expenditure on tangible fixed assets
are credited to profit or loss as other income at the same rate as
the depreciation on the assets to which the grant relates. The
deferred element of grants is included in creditors as deferred
income.
Grants of a revenue nature are recognised in the Consolidated
Statement of Comprehensive Income within turnover in the same
period as the related expenditure, which is recognised in cost of
sales. These grants relate to the primary function of the business
and facilitate the delivery of the Group's primary purpose. Other
grants are shown within other operating income.
2.8 Interest income
Interest income is recognised in profit or loss using the
effective interest method.
2.9 Finance costs
Finance costs are charged to profit or loss over the term of the
debt using the effective interest method so that the amount charged
is at a constant rate on the carrying amount. Issue costs are
initially recognised as a reduction in the proceeds of the
associated capital instrument.
2.10 Pensions
Defined contribution pension plan
The Group operates a defined contribution plan for its
employees. A defined contribution plan is a pension plan under
which the Group pays fixed contributions into a separate entity.
Once the contributions have been paid the Group has no further
payment obligations.
The contributions are recognised as an expense in profit or loss
when they fall due. Amounts not paid are shown in accruals as a
liability in the Balance Sheet. The assets of the plan are held
separately from the Group in independently administered funds.
2.11 Share based payments
Where share options are awarded to employees, the fair value of
the options at the date of grant is charged to profit or loss 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. Market vesting conditions are
factored into the fair value of the options granted. The cumulative
expense is not adjusted for failure to achieve a market vesting
condition. The fair value of the award also takes into account
non-vesting conditions. These are either factors beyond the control
of either party (such as a target based on an index) or factors
which are within the control of one or other of the parties (such
as the Group keeping the scheme open or the employee maintaining
any contributions required by the scheme).
Where the terms and conditions of options are modified before
they vest, the increase in the fair value of the options, measured
immediately before and after the modification, is also charged to
profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than
employees, profit or loss is charged with fair value of goods and
services received.
2.12 Taxation
Tax is recognised in profit or loss except that a charge
attributable to an item of income and expense recognised as other
comprehensive income or to an item recognised directly in equity is
also recognised in other comprehensive income or directly in equity
respectively.
The current income tax charge is calculated on the basis of tax
rates and laws that have been enacted or substantively enacted by
the balance sheet date in the countries where the Company and the
Group operate and generate income.
2.13 Exceptional items
Exceptional items are transactions that fall within the ordinary
activities of the Group but are presented separately due to their
size or incidence. This includes fair value adjustments in respect
of the convertible loan notes and transaction costs associated with
the IPO.
In respect of IPO transactions fees, GBP0.6m in the current
financial year were expensed to the Statement of Comprehensive
Income and GBP0.5m of broker fees was charged to share premium. In
FY2022 these costs were prepaid. Fees prepaid in 2023 were GBPNil
(2022: GBP0.1m) .
2.14 Tangible fixed assets
Tangible fixed assets under the cost model are stated at
historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is
directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner
intended by management.
Depreciation is charged so as to allocate the cost of assets
less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
Leasehold improvements 20% Straight line
Plant and machinery 20-33% Straight line
Specialist assets 50% Straight line
The assets' residual values, useful lives and depreciation
methods are reviewed, and adjusted prospectively if appropriate, or
if there is an indication of a significant change since the last
reporting date.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised in profit or
loss.
Assets under development are recognised at their cost. No
depreciation is charged on these assets until the assets are
complete and available for use.
2.15 Intangible items
Intangible assets are initially recognised at cost. After
recognition, under the cost model, intangible assets are measured
at cost less any accumulated amortisation and any accumulated
impairment losses.
All intangible assets are considered to have a finite useful
life. If a reliable estimate of the useful life cannot be made, the
useful life shall not exceed ten years.
Intangible assets are reviewed for impairment each financial
year.
Research and development
Internally generated intangible assets arising from development,
or the development phase of internal projects, have been recognised
in the year where the following can be demonstrated:
a) The technical feasibility of completing the intangible asset
so that it will be available for use or sale;
b) Intention to complete the intangible asset and use or sell it;
c) Ability to use or sell the intangible asset;
d) How the intangible asset will generate probable future
economic benefits (e.g., the existence of a market);
e) Availability of adequate technical, financial and other
resources to complete the development and to use or sell the
intangible asset; and
f) Ability to measure reliably the expenditure attributable to
the intangible asset during its development.
Development costs have been recognised as an intangible asset
for the first time in the year, as it can be demonstrated that all
of the criteria for recognition have been met.
In the research phase of an internal project, it is not possible
to demonstrate that the project will generate future economic
benefits and hence all expenditure on research shall be recognised
as an expense when it is incurred. If it is not possible to
distinguish between the research phase and the development phase of
an internal project, the expenditure is treated as if it were all
incurred in the research phase only.
All development costs capitalised in the year relate to
development of an integrated electric vehicle powertrain, for which
it was considered that there was insufficient evidence of probable
future economic benefits in prior periods to recognise as an asset.
Advancement of the development work and fulfilment of customer
orders, demonstrating feasibility and existence of a market for the
products, has prompted a decision to capitalise development costs
in the year. Expenditure on these assets items previously
recognised as an expense have not been recognised as part of the
cost of the asset.
Completed assets are being amortised over 3-5 years straight
line.
2.16 Investments
Investments in subsidiaries are initially measured at cost at
acquisition and reviewed for impairment at each reporting date,
with any movement in the fair value recognised in the profit and
loss. Where an investment is acquired in stages, it may be more
appropriate to recognise the fair value during initial recognition
and then assess the deemed cost for impairment at each reporting
date.
The investments are assessed for impairment at each reporting
date and any impairment losses or reversals of impairment losses
are required immediately in the profit and loss account.
2.17 Stocks and work-in-progress
Stocks are stated at the lower of cost and net realisable value,
being the estimated selling price less costs to complete and sell.
Cost is based on the cost of purchase on a weighted average
basis.
Work-in-progress ("WIP") includes an allocation of direct labour
costs and overhead appropriate to the stage of manufacture. At each
balance sheet date, stocks and WIP are assessed for impairment. If
impairment has occurred, the carrying amount is reduced to its
selling price less costs to complete and sell. The impairment loss
is recognised immediately in profit or loss.
2.18 Debtors
Short-term debtors are measured at transaction price, less any
impairment.
2.19 Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial
institutions repayable without penalty on notice of not more than
24 hours. Cash equivalents are highly liquid investments that
mature in no more than three months from the date of acquisition
and that are readily convertible to known amounts of cash with
insignificant risk of change in value.
2.20 Creditors
Short-term creditors are measured at the transaction price.
Other financial liabilities are measured initially at fair value,
net of transaction costs, and are measured subsequently at
amortised cost using the effective interest method.
2.21 Provisions for liabilities
Provisions are made where an event has taken place that gives
the Group a legal or constructive obligation that probably requires
settlement by a transfer of economic benefit, and a reliable
estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the
year that the Group becomes aware of the obligation and are
measured at the best estimate at the balance sheet date of the
expenditure required to settle the obligation, taking into account
relevant risks and uncertainties.
When payments are eventually made, they are charged to the
provision carried in the Balance Sheet.
2.22 Financial instruments
The Group has elected to apply the provisions of Section 11
'Basic Financial Instruments' and Section 12 'Other Financial
Instruments Issues' of FRS 102 to all of its financial
instruments.
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
instrument, and are offset only when the Group currently has a
legally enforceable right to set off the recognised amounts and
intends either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
Financial assets
Trade, group and other debtors (including accrued income) which
are receivable within one year and which do not constitute a
financing transaction are initially measured at the transaction
price and subsequently measured at amortised cost, being the
transaction price less any amounts settled and any impairment
losses.
Where the arrangement with a debtor constitutes a financing
transaction, the debtor is initially measured at the present value
of future payments discounted at a market rate of interest for a
similar debt instrument and subsequently measured at amortised
cost.
A provision for impairment of trade debtors is established when
there is objective evidence that the amounts due will not be
collected according to the original terms of the contract.
Impairment losses are recognised in profit or loss for the excess
of the carrying value of the trade debtor over the present value of
the future cash flows discounted using the original effective
interest rate. Subsequent reversals of an impairment loss that
objectively relate to an event occurring after the impairment loss
was recognised, are recognised immediately in profit or loss.
Financial liabilities
Financial instruments are classified as liabilities and equity
instruments according to the substance of the contractual
arrangements entered into. An equity instrument is any contract
that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Trade, group and other creditors (including accruals) payable
within one year that do not constitute a financing transaction are
initially measured at the transaction price and subsequently
measured at amortised cost, being the transaction price less any
amounts settled.
Where the arrangement with a creditor constitutes a financing
transaction, the creditor is initially measured at the present
value of future payments discounted at a market rate of interest
for a similar instrument and subsequently measured at amortised
cost.
Derivatives
Derivatives, including forward foreign exchange contracts, are
not basic financial instruments. Derivatives are initially
recognised at fair value at the date a derivative contract is
entered into and are subsequently remeasured to fair value at each
reporting end date. The resulting gain or loss is recognised in
profit or loss immediately unless the derivative is designated and
effective as a hedging instrument, in which event the timing of the
recognition in profit or loss depends on the nature of the hedge
relationship.
A derivative with a positive fair value is recognised as a
financial asset, whereas a derivative with a negative fair value is
recognised as a financial liability.
The Group enters into currency forward contracts. These are
measured at fair value at the end of the reporting period, with any
changes in fair value recognised in profit or loss.
Equity instruments
Financial instruments classified as equity instruments are
recorded at the fair value of the cash or other resources received
or receivable, net of direct costs of issuing the equity
instruments.
2.23 Dividends
Equity dividends are recognised when they become legally
payable. Interim equity dividends are recognised when paid. Final
equity dividends are recognised when approved by the shareholders
at an annual general meeting.
3. Judgements in applying accounting policies and key sources of estimation uncertainty
The preparation of the financial statements requires management
to make judgments, estimates and assumptions that affect the
amounts reported for assets and liabilities as at the balance sheet
date, and the amounts reported for income and expenditure during
the year. However, the nature of estimation means that actual
outcomes could materially differ from those estimates. The key
assumptions concerning the future and other key sources of
estimating uncertainty at the reporting date include:
Revenue recognition
The Company has established a clear decision matrix for each
order/contract to ensure a consistent approach for determining the
basis for recognising revenue. In some circumstances, judgements
are made in respect of the amount of revenue to be recognised at
each reporting date. For example, where goods and services supplied
on the same contract cannot be split for the purposes of revenue
recognition and the work is performed over a period of months or
years, the Company would recognise revenue based on the stage of
completion. Further details regarding the calculation are included
under note 2.5.
Share based payments
Some of Equipmake Limited's employees have been granted share
options by the Company. The fair value of these options on the date
of grant has been determined using the Black Scholes Model. The
directors consider this the most suitable model for calculating the
fair value of the options. For further details, see note 29.
The management believe that there will not be only one
acceptable choice for estimating the fair value of share- based
payment arrangements. The judgements and estimates that management
apply in determination of the share- based compensation are
summarised below:
-- Selection of valuation model
-- Making assumptions used in determining the variables used in a valuation model:
I. Expected life
II. Expected volatility
III. Expected dividend yield
IV. Probability of performance-based vesting conditions being met.
Options with both time-based and performance-based vesting
conditions were granted in the year. The vesting thresholds for the
performance-linked options were revised during the year in line but
remain consistent with the revenue forecasts for FY2023 and FY2024.
Given that the Directors believe that the Company will achieve its
revenue targets for FY2023 and FY2024, a charge has been recognised
for the relevant portion of the vesting period.
Share options were also granted to two non-employees of the
Company. A share-based payments charge has been recognised in
respect of one of these individuals, for whom it has been judged
that share options were awarded as a result of past services
provided to the Company.
Development costs
Management has reviewed activity relating to both
customer-related and internal product development projects during
the period and capitalised costs where it is considered that the
FRS102 criteria have been met. The judgements and estimates that
management apply when identifying costs to be capitalised are
summarised below:
-- Estimated size and value of the market for the product being developed;
-- Assessment of technical, financial and other resources
required and available to complete development;
-- Technical feasibility of completing the development work;
-- Completion status of the development work; and
-- Expected useful life of the asset once completed.
In the research phase of an internal project, it is not possible
to demonstrate that the project will generate future economic
benefits and hence all expenditure on research shall be recognised
as an expense when it is incurred. If it is not possible to
distinguish between the research phase and the development phase of
an internal project, the expenditure is treated as if it were all
incurred in the research phase only.
Impairment of investments and inter-company receivable
The directors have assessed the valuation of the investment in
Equipmake Limited (subsidiary) and inter- company receivable held
in Equipmake Holdings PLC, at the balance sheet date. The Directors
believe that due to the ongoing development of the Company's
products, its considerable pipeline of opportunities and the market
capitalisation / share price of the Company (along with the raising
of GBP10m of gross funding via an IPO on the Aquis Stock Exchange
for Equipmake Holdings Plc and a further GBP6.2m in a subsequent
funding round), that this investment is not impaired.
Stock
The directors have assessed whether any inventories are impaired
by comparing the estimated selling price less costs to complete to
the carrying amount at year end. Judgements and estimates that
management apply in making this assessment include:
-- Identification of defective, slow-moving or obsolete stocks;
-- Estimates of prices obtainable for the goods at the time that
they will be available for sale; and
-- Projected costs of completion and sale.
Contingent liability
A contingent liability for the provision of warranties is
calculated by management. Warranties requires management's best
estimate of the expenditure that will be incurred in respect of
warranty claims, which are detailed in the terms and conditions of
sale. Certain contracts contain an obligation for Equipmake to
provide a warranty on the products that it provides. The precise
terms of the warranty vary on a contract-by-contract basis but
currently range between three and eight years. Given that these
products are new to the market, Equipmake is unable to reference a
history of warranty claims in order to provide a basis for
estimating an accurate provision. The Company acknowledges the
contractual obligation but is unable to provide a basis for
estimation of a provision that complies with the requirements of
the accounting standards.
4. Segmental reporting and turnover
Segmental information is presented in respect of the Group's
operating segments based on the format that the Group reports to
its chief operating decision maker, for the purpose of allocating
resources and assessing performance.
The Group considers that the chief operating decision maker
comprises the Executive Directors of the business.
The Directors manage the Group as a single business delivering
electric power train solutions across a range of markets.
Information that was made available to the chief operating decision
maker in the reporting period included a split of gross margin by
customer project, and therefore segmental information is presented
along the same lines. Operating segments that share similar
characteristics have been aggregated where the criteria for
aggregation have been met.
Comparative segmental analysis has not been provided for the
year ended 31 May 2022 because the information is not
available.
Powertrain Powertrain EV Engineering Licencing/ Total Grants Total
(inc. (supply components projects royalties (excluding
vehicle only) Grants)
integration)
GBP's GBP's GBP's GBP's GBP's GBP's GBP's GBP's
Revenue 900,000 849,700 1,575,545 1,311,951 300,000 4,937,196 116,344 5,053,540
Cost of
sales (1,016,277) (875,551) (956,171) (831,472) - (3,679,471) (165,792) (3,845,263)
---------------- ------------- ----------- ----------- ------------ ----------- ------------ ---------- ------------
Gross
Margin (116,277) (25,851) 619,374 480,479 300,000 1,257,725 (49,448) 1,208,277
================ ============= =========== =========== ============ =========== ============ ========== ============
Administrative
expenses - - - - - - - (6,436,692)
Other operating
income - - - - - - - 280,658
------------
Operating
loss - - - - - - - (4,947,757)
Net interest - - - - - - - (69,597)
------------
Loss before
taxation - - - - - - - (5,017,354)
Taxation - - - - - - - 185,979
------------
Loss for
the financial
year - - - - - - - (4,831,375)
============
For the For the
year year
ended 31 ended 31
An analysis of turnover by class of business May May
is as follows: 2023 2022
GBP's GBP's
Powertrain (inc. vehicle integration) 900,000 -
Powertrain (supply only) 849,700 167,156
EV components 1,575,545 416,946
Engineering projects 1,311,951 2,021,458
Grants receivable 116,344 1,035,396
Other 300,000 65,829
--------- ---------
5,053,540 3,706,785
========= =========
Analysis of turnover by country of destination:
United Kingdom 2,550,385 2,588,683
Rest of Europe 1,265,000 391,646
Asia (exc. Far East) 300,000 -
Rest of world 908,955 649,816
Far East 29,200 76,640
5,053,540 3,706,785
========= =========
All revenue reported is external to the Group.
Details of external customers where revenue is 10% or more of
the Group's total revenues (inclusive of grants) are as
follows:
-- GBP1,021,593 (20.2%) in the EV components segment.
-- GBP900,000 (17.8%) in the Powertrain (inc. vehicle integration) segment.
-- GBP849,700 (16.8%) in the Powertrain (supply only) segment.
-- GBP786,703 (15.6%) in the Engineering projects and EV components segments.
-- GBP668,260 (13.2%) in the Engineering projects segment.
5. Other operating income
For the For the
year year
ended 31 ended 31
May May
2023 2022
GBP's GBP's
Government grants receivable - 15,136
RDEC claim 244,265 549,996
Other income 36,393 -
Total other operating income 280,658 565,132
========= =========
6. Operating loss
For the For the
year year
ended 31 ended 31
May May
The operating loss is stated after charging: 2023 2022
GBP's GBP's
Operating lease payments - property 269,645 174,211
Operating lease payments - other 48,154 32,995
Depreciation of tangible fixed assets -
owned (note 16) 169,035 209,159
Depreciation of tangible fixed assets -
held under finance lease and hire purchase
(note 16) 87,096 141,525
Amortisation of intangible fixed assets
(note 17) 27,380 -
Profit on the sale of tangible fixed assets (14,951) -
Foreign exchange loss 84,801 8,081
Share-based payments (note 29) 475,321 574,227
Research and development costs * 1,752,143 4,230,735
Exceptional items (note 12) 615,064 750,000
--------- ---------
*Based on qualifying R&D expenditure (of this, a further
GBP724,353 was capitalised).
7. Auditors' remuneration
For the For the
year year
ended 31 ended 31
Fees payable to the Group's auditor and May May
its associates for the audit of the: 2023 2022
GBP's GBP's
Group's annual financial statements 83,500 65,000
========= =========
Other fees payable to the Group's auditor
and its associates in respect of:
Reporting accountant services 85,250 60,000
All other services 2,050 1,200
87,300 61,200
========= =========
8. Employees
Staff costs, including directors' Group Group Company Company
remuneration, were as follows: 2023 2022 2023 2022
GBP's GBP's
Wages and salaries 3,600,915 2,537,185 413,443 -
Social security costs 405,474 278,944 49,909 -
Cost of defined contribution
scheme 112,266 88,286 38,840 -
Share based payments 150,803 574,227 - -
--------- ---------
4,269,458 3,478,642 502,192 -
========= ========= ======= =======
The average monthly number of employees, including the
directors, during the year was as follows:
For the For the
year year
ended 31 ended 31
May May
2023 2022
Employees 82 69
--------- ---------
The Company has no employees other than the directors, who did
not receive any remuneration (202 2: GBPNil). Remuneration of
Directors is paid from Equipmake Limited and recharged to Equipmake
Holdings Plc.
9. Directors
For the For the
year year
ended 31 ended 31
May May
2023 2022
GBP's GBP's
Directors' emoluments 438,109 102,218
Group contributions to defined contribution
pension schemes 45,947 40,220
Share-based payments 76,892 442,714
560,948 585,152
========= =========
During the year retirement benefits were accruing to 3 directors
(202 2: 3 ) in respect of defined contribution pension schemes. The
number of directors who received shares under long term incentive
schemes was 1 (202 2: 1 ).
The highest paid director's emoluments were as follows:
Directors' emoluments and amounts receivable under long-term
incentive schemes GBP147,584 (202 2 : GBP449,099, inclusive of
GBP442,714 related to share-based payments).
Group contributions to defined contribution pension schemes GBP
40,000 (202 2 : GBP 110 ).
10. Interest receivable
For the For the
year year
ended 31 ended 31
May May
2023 2022
GBP's GBP's
Other interest receivable / (payable) 16,908 (1,182)
16,908 (1,182)
========= =========
11. Interest payable and similar expenses
For the For the
year year
ended 31 ended 31
May May
2023 2022
GBP's GBP's
Loan interest payable 86,505 32,526
Other interest payable - 112,468
86,505 144,994
========= =========
12. Exceptional items
For the For the
year year
ended 31 ended 31
May May
2023 2022
GBP's GBP's
Costs relating to Equipmake's admission
to AQSE (615,064) -
Fair value adjustment - convertible loan
note - (750,000)
(615,064) (750,000)
========= =========
As at 31 May 2023, exceptional costs are in respect of IPO
transactions fees expensed to the Statement of Comprehensive
Income. In FY2022 these costs were prepaid. Fees prepaid in 2023
were GBPNil (2022: GBP0.1m).
In the year ended 31 May 2022 exceptional cost were expensed as
part of the fair value adjustment in respect of a convertible loan
note. As at 31 May 2023, there was a fair value adjustment of
GBPNil.
13. Taxation
For the For the
year ended year
31 May Ended 31
2023 May 2022
GBP's GBP's
Corporation tax
Current tax on RDEC 46,410 104,499
Tax credit - R&D SME scheme (232,389)
----------- ----------
(185,979) 104,499
----------- ----------
Total current tax
Deferred tax - -
----------- ----------
Total deferred tax - -
----------- ----------
Taxation on loss on ordinary activities (185,979) 104,499
=========== ==========
Factors affecting tax charge for the year
The tax assessed for the year is lower than (2022 - lower than)
the standard rate of corporation tax in the UK of 20 % (2022: 19%).
The standard rate of corporation tax for the year is calculated to
be 20% as a result of the UK corporation tax main rate increasing
from 19% to 25% on 1(st) April 2023.
The differences are explained below:
Reconciliation of effective rate and tax For the For the
charge year ended year Ended
31 May 31 May 2022
2023
GBP's GBP's
Loss on ordinary activities before tax (5,017,354) (5,205,732)
----------- -------------
Loss multiplied by the rate of corporation
tax in the UK of 20 % (2022: 19%) (1,003,471) (989,089)
----------- -------------
Effects of:
Unrecognised deferred tax assets 1,030,305 607,688
Remeasurement of deferred tax for changes
in tax rates (204,624) -
Enhanced super deduction (4,613)
Expenses not deductible for tax purposes 228,412 265,650
Depreciation on ineligible assets 401
SME R&D tax credit (232,389)
Adjustments in respect of prior years - 11,252
----------- -------------
Total tax charge for the year (185,979) 104,499
=========== =============
Factors that may affect future tax charges
Changes to the UK corporation tax rates were substantially
enacted as part of the 2021 Budget on 24 May 2021. This included an
increase to the main rate from 19% to 25% from April 2023. The
Company will be taxed at a rate of 25% unless its profits are
sufficiently low enough to qualify for a lower rate of tax, the
lowest being 19%.
Where applicable, deferred taxes at the balance sheet date have
been measured using tax rates between 19% and 25% to reflect the
rate of the timing differences are likely to unwind and are
reflected in the financial statements.
Deferred tax is not recognised in respect of losses of
GBP11,632,746 (2022: GBP8,281,504) due to the uncertainty that they
will be recovered against the reversal of deferred tax liabilities
or other future taxable profits.
14. Dividends
For the For the
year year
ended 31 ended 31
May May
2023 2022
GBP's GBP's
Ordinary dividends - 395,000
- 395,000
========= =========
15. Intangible assets
Group Development Other Intangibles Total
expenditure
GBP's GBP's GBP's
Cost
At 1 June 2022 - 11,471 11,471
Additions - internally developed 810,417 - 810,417
------------- -------------------
At 31 May 2023 810,417 11,471 821,888
------------- ------------------- -------
Amortisation
At 1 June 2022 - 11,471 11,471
Charge 27,380 - 27,380
------------- -------------------
At 31 May 2023 27,380 11,471 38,851
------------- ------------------- -------
Net book value
------------- ------------------- -------
At 31 May 2023 783,037 - 783,037
============= =================== =======
At 31 May 2022 - - -
============= =================== =======
No intangible assets are held within the parent company.
The average remaining useful life of intangible assets being
amortised is 3.6 years. The cost of assets not yet being amortised
is GBP568,694, with amortisation expected to commence for these
assets in the year ending 31 May 2024. Of this, GBP461,704 will be
amortised over 3 years and GBP106,990 will be amortised over 5
years.
16. Tangible fixed assets
Leasehold Plant and Specialist Assets in
Group property machinery equipment development Total
GBP's GBP's GBP's GBP's GBP's
Cost or valuation
At 1 June 2021 55,452 722,037 502,119 - 1,279,608
Additions 25,144 58,820 - 51,283 135,247
--------- ---------- ---------- ------------ ---------
At 31 May 2022 80,596 780,857 502,119 51,283 1,414,855
--------- ---------- ---------- ------------ ---------
Depreciation
At 1 June 2021 18,347 223,807 424,894 - 667,048
Charge for the
year 11,509 131,934 77,225 - 220,668
--------- ---------- ---------- ------------ ---------
At 31 May 2022 29,856 355,741 502,119 - 887,716
--------- ---------- ---------- ------------ ---------
Cost or valuation
At 1 June 2022 80,596 780,857 502,119 51,283 1,414,855
Additions 19,676 317,904 - 105,620 443,200
Disposals - (72,680) - - (72,680)
--------- ---------- ---------- ------------ ---------
At 31 May 2023 100,272 1,026,081 502,119 156,903 1,785,375
--------- ---------- ---------- ------------ ---------
Depreciation
At 1 June 2022 29,856 355,741 502,119 - 887,716
Charge for the
year 18,073 169,035 - - 187,108
Eliminated on
disposal - (62,130) - - (62,130)
--------- ---------- ---------- ------------ ---------
At 31 May 2023 47,929 462,646 502,119 - 1,012,694
--------- ---------- ---------- ------------ ---------
Net book value
--------- ---------- ---------- ------------ ---------
At 31 May 2023 52,343 563,435 - 156,903 772,681
========= ========== ========== ============ =========
At 31 May 2022 50,740 425,116 - 51,283 527,139
========= ========== ========== ============ =========
Specialist/technical plant and equipment relates to project
specific equipment whose value is consumed over the life of the
relevant project. Cost of such assets are therefore written off
over the minimum project duration.
The net book value of fixed assets includes GBP275,216 (2022:
GBP225,533) in respect of assets held under finance leases and hire
purchase contracts.
17. Fixed asset investments
Investments
in subsidiary
companies
GBP's
Cost or valuation
At 1 June 2021 82
Additions 33,795
Fair value of addition arising on share-for-share exchange 5,849,982
Other movements - share-based payments 574,228
--------------
At 31 May 2022 6,458,087
==============
At 1 June 2022 6,458,087
Additions 11,000,000
Other movements - share-based payments 475,321
--------------
At 31 May 2023 17,933,408
==============
On 31 May 2023, Equipmake Holdings PLC allotted 11,000 ordinary
shares of GBP0.01 each in Equipmake Limited, as consideration for
releasing Equipmake Limited from its obligation to repay an
GBP11,000,000 intercompany loan. The share issue reflects the
long-term nature of the funding relationship between Equipmake
Holdings and Equipmake Limited, with Equipmake Limited being the
primary trading and operating entity within the Group.
Subsidiary undertaking
The following was the only subsidiary undertaking of the Company
during the year ended 31 May 2023:
Class of
Name Registered office shares Holding
Unit 7 Snetterton Business
Park, Snetterton, Norfolk,
NR16 2JU, Ordinary/
Equipmake Limited England Deferred 100%
18. Stocks
Group Group
2023 2022
GBP's GBP's
Work in progress 485,452 197,418
Raw materials 2,472,873 610,555
2,958,325 807,973
========= =======
All stock is held within the subsidiary company Equipmake
Limited.
The cost of Group stocks recognised as an expense in the year
ended 31 May 2023 amounted to GBP2,961,711 (2022:
GBP3,106,835).
19. Debtors
Group Group Company Company
2023 2022 2023 2022
GBP's GBP's GBP's GBP's
Trade debtors 2,463,277 533,740 - -
Amounts owed by group undertakings - - - 1,265,867
Other debtors 231,677 230,956 16,504 3,429
Prepayments and accrued income 931,284 710,536 33,948 90
Tax recoverable 875,740 445,496 - -
--------- --------- ------- ---------
4,501,978 1,920,728 50,452 1,269,386
========= ========= ======= =========
20. Cash and cash equivalents
Group Group Company Company
2023 2022 2023 2022
GBP's GBP's GBP's GBP's
Cash at bank and in hand 6,999,686 1,876,083 6,601,712 1,737,118
--------- --------- --------- ---------
6,999,686 1,876,083 6,601,712 1,737,118
========= ========= ========= =========
21. Creditors: Amounts falling due within one year
Group Group Company Company
2023 2022 2023 2022
GBP's GBP's GBP's GBP's
Trade creditors 470,449 546,807 22,855 -
Amounts owed to group undertakings - - 282,776 -
Other taxation and social security 138,234 85,371 3,515 -
Obligations under finance lease
and hire - purchase contracts 152,098 137,512 - -
Other creditors 216,611 144,163 161,729 109,315
Convertible loan notes - 3,750,000 - 3,750,000
Accruals and deferred income 979,884 1,130,792 33,459 -
--------- --------- ------- ---------
1,957,276 5,794,645 504,334 3,859,315
========= ========= ======= =========
On 18 January 2022, the Company issued convertible loan notes
for GBP3,000,000. These were subsequently recognised at fair value
at the end of the 31 May 2022. The loan notes converted to ordinary
shares immediately upon listing of the Company, and as such there
is no such balance as at 31 May 2023. Until the loan notes
converted, interest was accrued on the principal amount at 10% per
annum.
22. Creditors: Amounts falling due after more than one year
Group Group
2023 2022
GBP's GBP's
Net obligations under finance leases and
hire purchase contracts 255,183 307,169
------- -------
255,183 307,169
======= =======
No asset under finance lease were held within the parent
company.
23. Hire purchase and finance leases
Minimum lease payments under hire purchase Group Group
fall due as follows: 2023 2022
GBP's GBP's
Within one year 152,098 137,512
Between 1-5 years 255,183 307,169
------- -------
407,281 444,681
======= =======
Group Group
2023 2022
GBP's GBP's
HP Loan 1 - GBP69,300 at 2.49%. Repayable
until November 2023 7,694 22,573
HP Loan 2 - GBP278,010 at 2.70%. Repayable
until December 2024 96,036 152,870
HP Loan 3 - GBP87,750 at 5.51%. Repayable
until November 2025 58,611 78,539
HP Loan 4 - GBP201,600 at 4.33%. Repayable
until February 2026 144,828 190,699
HP Loan 5 - GBP91,400 at 6.03%. Repayable
until September 2026 87,402 -
HP Loan 6 - GBP15,379 at 4.58%. Repayable
until October 2025 12,710 -
------- -------
407,281 444,681
======= =======
24. Financial instruments
Group Group Company Company
2023 2022 2023 2022
GBP's GBP's GBP's GBP's
Financial liabilities
Other financial liabilities
measured at fair value through
profit or loss (16,231) (3,859,315) (3,922) (3,859,315)
-------- ----------- ------- -----------
Financial liabilities measured at fair value through profit and
loss comprise:
-- A convertible loan note which was included in full in
creditors due within 1 year as at 31 May 2022; at 31 May 2023 there
was no such balance. As at 31 May 2023, there was a fair value
adjustment of GBPNil (2022: GBP750,000).
-- US dollar forward contracts outstanding at 31 May 2023 of GBP16,231 (2022: GBPNil).
25. Provisions and contingent liabilities
Warranty provision Group Group
2023 2022
GBP's GBP's
Opening balance - 1 June 44,057 -
Charged to the profit and loss (44,057) 44,057
Closing balance 31 May - 44,057
======== ======
No warranty provisions were held within the parent company.
The warranty provision relates to management's best estimate of
costs be incurred in respect of warranty claims for items sold in
the year, where warranty terms have been agreed in the terms and
conditions of sale. As at 31 May 2023 no such warranty provision
was held. The warranty provision in the previous year was not
considered material.
Certain sales contracts contain an obligation for Equipmake to
provide a warranty; however, the products sold are new to the
market and intended for long-term use. This lack of historical
data, combined with a lack of comparable data on similar products
and known challenges in establishing the party responsible in the
event of a warranty claim, has led to management making the
assessment that a provision for warranty costs cannot be
reliability estimated at this point in time. It is expected that a
provision for warranty costs will be recognised in future periods
once sufficient data becomes available.
26. Share capital
As at As at
31 May 31 May
2023 2022
Allotted, called up and fully paid GBP's GBP's
948,229,409 (2022: 500,000,000) Ordinary
Shares of GBP0.0001 each 94,823 50,000
======= =======
The following amendments to Share Capital
took place in the year:
Share issue on conversion of convertible
loan - 88,235,294 Ordinary Shares of GBP0.0001
each 8,824 -
Share issue - 235,294,115 Ordinary Shares
of GBP0.0001 each 23,529 -
Share issue - 124,700,000 Ordinary Shares
of GBP0.0001 each 12,470 -
Total 94,823 50,000
======= =======
The following other movements in relation to Share Capital are
as follows:
In January 2022, prior to its IPO, the Company secured GBP3m of
investment from an existing shareholder in the form of a
convertible loan note. The loan was converted into equity as part
of the IPO process at a 20% discount to the market rate, resulting
in a share issue of 88,235,294 Ordinary Shares.
On 28 July 2022, the Company issued 198,823,529 GBP0.0001
Ordinary Shares at an issue price of GBP0.0425 and subsequentially
on 29 July 2022, the Company issued 36,470,586 GBP0.0001 Ordinary
Shares at an issue price of GBP0.0425.
On 29 July 2022, the Company was admitted to the Aquis Access
Stock Exchange (Ticker: EQIP).
On 31 January 2023, the Company issued 23,626,996 GBP0.0001
Ordinary Shares at an issue price of GBP0.05, raising a total of
GBP1.181 million for the Company (before expenses).
On 1 February 2023, the Company issued 101,073,004 Ordinary
Shares at an issue price of GBP0.05, raising a total of GBP5.054
million for the Company (before expenses).
27. Earnings per share
Basic loss per share of 0.60p (2022: 2.3p) is based on the
following data:
2023 2022
GBP's GBP's
Earnings used in calculation of total earnings
per share:
Earnings on total losses attributable to
equity holders of the parent (4,831,375) (4,617,459)
Shares in issue
Weighted average number of ordinary GBP0.0001
shares in issue 811,174,508 208,333,375
Earnings/(loss) per share (0.0060) (0.023)
=========== ===========
27. Earnings per share (continued)
Diluted EPS is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares. The Company, being loss making
in both this year and the comparative year would mean that any
exercise would be anti-dilutive.
28. Reserves
Share premium- Group and Company
The share premium account represents amounts subscribed for
share capital in excess of nominal value, net of directly
attributable issue costs.
Other reserves - Group
Brought forward other reserves comprise the amount attributable
to the owners of the Company following the issue of shares in the
subsidiary at a premium to non-controlling interests in previous
financial years.
Other reserves - Company
Brought forward result of a reduction in capital which resulted
in the cancellation of 5,000,000 GBP1 B ordinary shares during the
financial year ended 31 May 2022, GBP5,000,000 was credited against
the proceeds of this issue.
Share-based payments reserve - Group and Company
Used to reflect the assessed fair value of the equity settled
options issued as share-based payments.
Merger relief reserve - Company only
The merger relief reserve accounts for the uncapitalised fair
value adjustment in respect of the investment in the wholly owned
subsidiary Equipmake Limited which is eliminated on consolidation
and therefore not presented on a Group basis.
Profit and loss account - Group and Company
Profit and loss account represents cumulative profits and losses
net of dividends and other adjustments.
29. Share-based payments
The parent company (Equipmake Holdings Plc) operates an equity
based share based remuneration scheme for employees of Equipmake
Limited. These share options have been granted to employees of
Equipmake Limited but will ultimately be settled in equity in
Equipmake Holdings Plc. The share based payments charge has been
recognised as an expense in the financial statements of Equipmake
Limited, in accordance with the accounting standards. The fair
value is measured by use of the Black Scholes option pricing
method.
Under the schemes listed below, options have been granted to
subscribe for shares in Equipmake Holdings Plc.
Equipmake Holdings Plc granted share options on the 26 November
2021 with 138,888 options granted in respect of A Ordinary shares
of GBP0.0001 each. The vesting criteria of the options were based
on the exit price (vesting of option on an exit event other than a
listing) or the Company value on the exercise date (vesting of
option on listing). Across all option holders, 1.5% of the fully
diluted share capital vested when the Company completed the IPO in
July 2022. A further 1% would vest when the Company value exceeds
GBP200m. A further 1% would vest when the Company value exceeds
GBP400m. 0.5% would vest when the Company value exceeds GBP800m.
The share-based payments charge in respect of these options was
recognised in full in the year to 31 May 2022.
Equipmake Holdings Plc granted non-EMI options over A Ordinary
shares in the year to 31 May 2022, of which 2,308,744 were
substantially modified on 1 June 2022. The revised non-EMI options
updated the terms of the agreements to prevent dilution on a
listing. Subject to the EMI options being capable of exercise in
full, the recipient will be granted the option to acquire a number
of A Ordinary shares which, when added to the A Ordinary shares
issuable on exercise of the EMI options, equates to 4% of the fully
diluted share capital. These options shall lapse on the same date
as the EMI options. The initial fair value of the combined EMI and
non-EMI share options were recognised 31 May 2022 and so only the
revised fair value from modification has been recognised.
Equipmake Holdings Plc granted 24,950,000 share options on 19
July 2022. At the year ended 31 May 2023 700,000 options had
lapsed. The vesting conditions of these options were either
performance related or time based, vesting over a period of 3 to 8
years. Performance related vesting conditions are linked to
revenue, though the option agreements state that the options can
vest on management discretion. The expected life used in the model
has been adjusted, based on management's best estimate, for the
effect of non-transferability, exercise restrictions and
behavioural considerations. If options remain unexercised after a
period of 10 years from the date of grant, the options expire.
Non-vesting conditions and market conditions are taken into account
when estimating the fair value of the option on the grant date.
Options shall lapse on the tenth anniversary of the Grant Date
(other lapses conditions are outlined in the Options
Agreement).
In addition, share options were also granted on 25 July 2022, to
two non-employees of the Company. A share-based payments charge has
been recognised in respect of 7,653,061 options granted to one of
these individuals, for whom it has been judged that share options
were awarded as a result of past services provided to the
Company.
Weighted average Weighted
exercise price average exercise
(pence) Number price (pence) Number
2023 2023 2022 2022
B/fwd. 0.01 22,201,056 - -
Granted during the
year 6.54 34,911,805 0.01 22,201,056
Lapsed 10.00 (700,000) - -
----------------- ---------- ----------------- ----------
Outstanding at the
end of the year 3.92 56,412,861 0.01 22,201,056
----------------- ---------- ----------------- ----------
Exercisable at the
end of the year 1.01 18,555,643 0.01 -
================= ========== ================= ==========
The presentation in the comparative period included options
presented over A Ordinary shares. Following IPO this has been
restated to present as options over Ordinary shares only.
19 July
1 June 2022 2022 25 July 2022 2022
Option pricing model Black Scholes Black Scholes Black Scholes Black Scholes
used
Weighted average share
price (pence) 4.25 4.25 4.25 3,012
Exercise price (pence) 0.01 9 0.01 0.000001
Weighted average contractual
life (years) 10 5.7 2 1
Expected volatility 50.79% 50.79% 50.79% 50.79%
Risk-free interest
rate 1.940% 1.940% 1.940% 0.612%
----------------- ------------- ------------- ---------------
2023 2022
GBP's GBP's
Equity-settled schemes recognised in the
profit or loss for the year 475,321 574,227
475,321 574,227
============= ===========
30. Capital commitments
Group and Company had capital commitments as follows:
Group Group
2023 2022
GBP's GBP's
Contracted for but not provided in these
financial statements 676,082 66,267
-------
676,082 66,267
======= ======
31. Pension commitments
The Group operates a defined contributions pension scheme. The
assets of the scheme are held separately from those of the Group in
an independently administered fund. The pension cost charge
represents contributions payable by the Group to the fund and
amounted to GBP112,266 (2022: GBP88,286). Contributions totalling
GBP34,992 (2022: GBP20,642) were payable to the fund at the balance
sheet date and are included in creditors.
32. Commitments under operating lease
The Group and the Company had future minimum lease payments due
under non-cancellable operating leases for each of the following
years:
Group Group
2023 2022
GBP's GBP's
Not later than 1 year 430,886 205,130
Later than 1 year and not later than 5
years 241,932 512,635
672,818 717,765
======= =======
33. Related party transactions
As permitted by FRS102 paragraphs 1.12e and 33.1a, the Company
has taken advantage of the exemption from disclosing the
transactions entered into between two or more members of a group as
all subsidiary undertakings are wholly-owned by a member of that
group.
The Key Management Personnel of Equipmake Limited are the same
as Equipmake Holdings Plc, being the Directors.
The following director loans existed during the year within the
consolidated figures:
The balance brought forward on the director loan account was
GBP70 (2022: GBP4,192). During the year there were drawings of
GBP4,443 (2022: GBP1,242) and repayments of GBP4,512 (2022:
GBP5,364) with a carry forward balance owed to the Company of GBP1
(2022: GBP70). No interest was charged during the year (2022:
GBPNil).
34. Post balance sheet events
There are no other post balance sheet events that require
adjustment or disclosure in these financial statements.
35. Controlling Party
The Directors do not consider there to be one ultimate
controlling party.
The ultimate controlling party of the Group, by virtue of his
majority shareholding, was Ian Foley as at 31 May 2022. As at 31st
May 2023, Ian Foley controlled 39.55% (2022: 75%) of the
shareholding.
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END
NEXBUBDGSBGDGXB
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October 02, 2023 02:00 ET (06:00 GMT)
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