TIDMGDWN
RNS Number : 6925U
Goodwin PLC
03 August 2022
PRELIMINARY ANNOUNCEMENT
Goodwin PLC today announces its preliminary results for the year
ended 30(th) April, 2022.
CHAIRMANS STATEMENT
The "Trading" pre-tax profit for the Group for the twelve month
period ended 30th April, 2022, was GBP17.2 million (2021: GBP16.5
million) an increase of 4% despite the Group having to contend with
GBP3.8 million of additional energy costs versus the prior year.
The revenue was GBP144 million (2021: GBP131 million).
Trading profit for this purpose is defined as the Group pre -
tax reported profit of GBP19.9 million less the impact of our
GBP2.74 million interest rate swap valuation. The GBP2.74 million
relates to the 30th April , 2022 valuation of our GBP30 million
debt interest rate swap derivative that expires in August 2031
whereby we have fixed our interest rate for ten years at less than
1% for the full term. In our view, this derivative is an effective
hedge and should not go through the profit and loss account . The
Board's view was that it was highly probable that we would still
have 25% gearing in ten years' time, having secured the interest
rate swap to fix interest rates at less than 1% on GBP30 million
debt for this period. Our auditor was unconvinced that it could
meet the highly probable criteria and that other requirements under
IFRS9 for hedge accounting were not met. The reason the Board
considers the level of debt to be highly probable is due to the
Board having a responsibility to invest in a responsible manner to
grow the business for all the stakeholders. The Board has, however,
complied with the auditor's view and has shown the GBP2.74 million
unrealised mark to market gain within the profit before taxation
figure. As the GBP2.74 million gain is a non-cash item, it has been
excluded for dividend purposes. The Directors propose an increased
dividend of 10 7.80 p (2021: 102.24p) per share.
Given that we believe turnover and profitability are projected
to rise in future years, the level of dividend payments in line
with the current policy is also set to rise. In view of this,
coupled with the significant capital expenditure needed to fund the
Duvelco activity, the Directors are of the opinion that it will be
of long-term benefit for the Group to ease pressures on the Group
cash flows by paying the current and future dividends bi-annually.
It is proposed that dividend payments will be made in equal
instalments o n 7th October , 2022 and 12th April, 2023 .
Refractory Engineering Division
The increase in Group profits achieved in the year having just
ended can largely be attributed to the growing Refractory
Engineering Division activity, whose year-on-year operating profits
have grown a further 37 % following the 40% growth that was
achieved in the prior year. The D ivision has continued to maximise
its position with sales of jewellery casting consumable products
(investment casting powder, waxes, natural and silicone rubbers)
and to construction markets that have seen a surge in activity
globally.
The Division has also benefited from strong demand for its newer
products, AVD being Dupré Minerals' vermiculite-based solution for
lithium-ion battery fires that is still in its product life cycle
infancy, and has delivered in excess of 100% year-on-year growth,
along with Castaldo rubber, which has achieved 45% year - on - year
growth.
The challenges faced by companies from the ongoing global supply
chain and energy market disruption have been well reported in the
news over the past year and the Refractory Division has acted
dynamically to ensure cost increases are passed on to our customers
to ensure the impact to our margin is minimised . Whilst the
success of the Division has been seen across all companies, special
mention should be made of our jewellery investment casting powder
companies in China and in India having generated record profits in
the year, even though the domestic market in China is still
depressed due to the prolonged lockdowns and travel
restrictions.
Mechanical Engineering Division
Whilst not always being outwardly visible, the Mechanical
Engineering D ivision has had a very difficult seven years. Over
this period the product offerings pretty much across all the
companies have had to evolve to the changing conditions in the
markets from which the companies generate their turnover and gross
margin.
The fact that the companies within the Division have managed to
evolve is a credit to them and their management teams. Contending
with huge energy and commodity increases within the year has not
been straightforward. The metal pricing volatility has been extreme
at its highs with nickel trebling in price and iron more than
doubling in price at times. As a matter of course, our long term
contracts have variation clauses to adjust for annual inflationary
costs. However, the volatility of metals and energy costs has been
so extreme that these clauses have proved to be totally ineffective
. Therefore, across the board every contract where this could have
posed significant issues has been successfully re-negotiated with
our customers. If we were not a high quality, critical supplier to
our customers , then this could have been more problematic, but
that is not the case.
Despite the decline of the workload in our traditional markets
over the prior years associated with the demise of our product
sales to the non green oil and coal sectors, our re-aligned
business offerings are more in demand than they ever have been,
which is seen by the growing workload that customers are booking up
to be delivered now years in advance. With the confidence of a
solid and growing forward order book the tide has turned; all
things being equal, the next few years should see the Mechanical
Engineering Division returning to its former glory with even higher
levels of turnover than at the peak of the o il and gas industry in
2014.
Notably within the year, expanding on the nuclear
decommissioning front, Goodwin International L imi t e d has
successfully tendered and been awarded 50% of the initial phase of
the multi year multi million pound Sellafield Hybrid 2, 63 Can
Racks as reported on the OJEU website in October last year. Gaining
initial process and documentation approvals to proceed with
manufacture will take time , but once ramped up, the initial
production rate will be 20 r acks per year, with 80 r acks
currently committed. Our customer has the option within the
contract to make further commitment(s) of up to an additional 160
racks, as well as increasing the demand to 40 r acks per year.
It is also pleasing to report that in addition to Goodwin Steel
Castings Limited having completed its transition away from a
reliance on the oil and gas market, the company has also managed to
successfully settle the two commercial disputes that were
referenced in my Chairman's Statement of year ending 30th April ,
2020. Part of the settlement is reflected in these results, with
the balance being realised in the current financial year.
On top of its base load, with the excellent work done at getting
on to new programmes, Goodwin Steel Castings Limited will build on
its workload and expect to finish the current year with forward
order levels in excess of the levels the Group experienced when it
was really busy a decade ago. However , it will not be for oil and
coal industries as it was previously; it will be for nuclear
decommissioning; or nuclear power station castings; or surface ship
and aircraft carrier castings as well as submarine hull
castings.
With these successes, and the hard work and perseverance of the
Group in achieving a positive conclusion to prior years '
contractual claims we have been pursuing; the successful
re-negotiation of multiple contracts for unforeseeable energy and
raw materials pricing volatility whilst at the same time growing,
it has resulted in a n excellent Group workload of GBP 175 m illion
as at the time of writing. It is pleasing to report that the bulk
of the increased workload relates to contracts to supply products
that the Group has successfully and consistently delivered before,
and is a workload figure that is likely to grow over the coming
years even with the knowledge that the Group is likely to achieve
record activity levels within this current year.
W hat is not visible yet in the workload figure is an
appropriate workload for Easat Radar Systems Limited . Once up to
speed (which still may be another year away) the Board and I
believe there will be a workload for Easat , the likes of which
readers of their accounts for the past thirty years have never
seen. Easat order input has been hampered by lack of cash
generation at civilian airports globally, and military airports
being starved of cash as a result of Covid -19 over the past two
years hampering their purchasing decisions. However , it would
appear that the r adar market is starting to wake up again. We have
considerably more firm buy quotations due for decision in the next
six months, and , in order to give a flavour of what we are seeing,
in the week following the latest ATM Madrid exhibition in June
2022, an additional GBP47 m illion of firm buy r adar systems were
quoted.
Energy
As initially reported in our 31st October, 2021 Interim
Statement, over the course of the year the most significant
headwind that the Group has faced has been the increased energy
costs. Nonetheless, the Group managed to deliver the more than
respectable profits reported above, after having incurred a total
of GBP3.8 million of additional energy costs due to price increases
versus the year end ed 30th April, 2021. Goodwin Steel Castings
Limited and Hoben International Limited were the most affected due
to their energy intensive operations , melting metal and high
temperature treatment of refractories. However , now armed with a
multitude of short and long - term hedges in place the Group is set
to deliver substantially higher profitability in the current year,
partly as a result of not having to absorb the price volatility of
the energy markets that have been seen over the past twelve months,
irrespective of the improving performance.
Green Investments
We recognise the importance of adopting a strategy to transition
to lower carbon manufacturing. We have put in place a separate
GBP10 m illion finance line to fund a range of 'green' investments
which were approved at the beginning of the financial year end ed
30th April , 2022. A total of 4.8 MWp of solar panels have been
installed and commissioned as at the time of writing. Each
individual system has been designed specifically to match the power
demand at each facility, subject to available roof space. The
payback of each system varies dependent on the size and roof
configuration and all were between three and six years; however ,
that payback was calculated prior to energy costs more than
doubling, so at current market prices the payback time has halved
from the original plan, with all the solar systems having an
insurance backed 20 year minimum lifespan. There are other solar
projects and plant control modification projects that , subject to
us obtaining the agreement from the Electricity Supplier ( District
Network Operator ) , for the former we expect to bring on line over
the next two years . This will provide a further 7.8 MWp of green
electricity generation and so further reduce our consumption. Over
the course of the year a total of GBP8.2 m illion has been invested
in green projects.
We are also looking at schemes that would reduce our carbon
footprint in instances where we cannot reduce or eliminate CO(2)
production without ceasing the operation in its entirety. Typically
this is where we utilise natural gas in a process, and it is not
economically viable or possible to change the process. I look
forward to updating you further on this in twelve months' time.
Capital expenditure / cash flow
With the Group's intrinsically strong cash flows , the Group's
net debt stands in line with the Board ' s expectations at GBP29. 8
million as at 30th April , 20 22, which is a GBP2 million
improvement since the half year despite having proceeded with our
substantial investment programme. As mentioned earlier we are
making full use of the ten year duration GBP30 million interest
swap that was executed at the height of Covid-19 in light of our
planned activities, whereby the SONIA interest chargeable to the
Company is capped at less than 1% on GBP30 million of
borrowings.
The headline investments that the Board has authorised and the
Group has been getting on with are four fold, and whilst these
activities all commenced in year end ed 30th April , 2022, due to
the timescales the latter three are still in the course of
construction.
Firstly nearly GBP10 million relates to green investments, with
the majority being spent on CO(2) offsetting projects .
Secondly, due to the outstanding performance of the Refractory
Engineering Division in growing sales by winning market share so
impressively, for both capacity and business continuity
requirements, as we are running dangerously close to full capacity
, authorisation has been given to spen d GBP4.5 million installing
a second calciner at Hoben International Limited , as without it,
we would have two problems. We would be limiting the Refractory
Division the opportunity to grow further investment powder sales,
and in the eventuality of a breakdown we would struggle to ever
catch up with the demand again, and would lose market share to
competitors who could deliver product to keep our customers
operational . This was why the Board deemed this a necessary
investment as it is underpinning substantial Group
profitability.
Thirdly , for Goodwin Steel Castings Limited, despite allocat
ing a significant amount of G roup capital expenditure on
infrastructure there in recent years , t o enable the foundry to
deliver what will be required of the foundry , there have been
additional planning applications approved and work commenced on
additional casting pit space which will allow further increased
activity. Such modifications would likely be impossible to carry
out in a couple of years' time with the envisaged activity levels
there.
Finally for Duvelco L imi t e d, part of the Mechanical
Engineering D ivision, which was incorporated in January 2020. Over
the Company's 139 years existence to date, as well as designing or
buying bolt on complimentary products and companies , it has
occasionally branched out into totally new product lines whi l st
utilising skill-sets within the organisation. After working on this
idea for some time , Duvelco L imi t e d was set up as a business
to channel the Company's ambition to become a specialist polymer
manufacturer, one that we hope will truly excel over the coming
decades. We will manufacture high performance polyimide polymer
resins that can be moulded into parts and shapes for high
temperature and critical applications that very few polymers can be
used for.
With the development work that was done before and since the
incorporation of Duvelco L imi t e d, utilising a bespoke pilot
scale plant the team designed, we have developed the product and a
process that will allow us to deliver a higher performing directly
comparable polyimide polymer than the market leader. With an annual
addressable, and growing, market size bigger than any product tha t
the Group has supplied to before, the Board believes that , with
limited existing market competition, a very high technology
barrier, coupled with the fact we have a patent pending process
that gives us markedly better high temperature performance than
anybody else for directly comparable chemistry product, this should
hopefully give Duvelco Limited, as a market invader, good prospects
of long term success, so that one day it should be a major
contributor to Group profitability.
The initial, custom designed and bespoke plant the Group is
building should be coming into operation in the first half of the
calendar year 2024, after which we will start growing the sales
internationally as we have done with our other products over the
year s . Our initial investment inclusive of R&D costs and
working capital for materials is forecast to come in at GBP12.5
million; from this we would have an initial annual capacity in
excess of GBP40 million of material. The reason I have elaborated
about this is because costs are being incurred now , and it will be
a long time until the plant will be in commission . With the effort
being put into this by the Group, it should deliver a new niche
market, high technology product to the Group with a long life cycle
ahead of it , thus providing the Group with long - term benefit,
which the Board believes is in the best interest of all
stakeholders.
For both Hoben International Limited and Duvelco Limited, most
supplier purchase orders w ere placed in Q3 Financial Year 2022,
giving suppliers large down payments to have fixed price contracts.
If the start of placing orders for either project had been delayed
by several months the prices would have been significantly more
with labour and materials increasing , as we ourselves have
experienced and have had to mitigate and manage. The Board
estimates that by getting on with the projects and contracting when
we did, the saving versus starting either project today is in
excess of 25%.
As contracts within the Mechanical Engineering Division become
larger and span longer periods, the engineering companies are being
targeted to ensure contracts incorporate down payments / stage
payments to allow their execution with as neutral overall cash flow
status as can be obtained over the life of a contract, so that work
in progress does not consume a disproportionate amount of cash as
we get busier.
With the profitability, positive outlook and strong
understanding of the various subsidiaries ' cash flows the Board
believes it is appropriate to continue to follow the Group's
investment plans and pay the proposed dividend that is in line with
the dividend policy with 50% being paid on 7th October , 2022 and
50% o n 12th April , 20 23.
We are once again extremely grateful to our UK and overseas
Directors, managers and employees for their hard work in driving
forward the performance of the Group, which will likely improve
again in the new financial year with the strong foundations that
have been put in place in many areas around the Group.
3(rd) August 2022
T.J.W Goodwin
Chairman
Alternative performance measures mentioned above are defined in
Note 6.
OBJECTIVES, STRATEGY AND BUSINESS MODEL
The Group's main OBJECTIVE is to have a sustainable long-term
engineering based business with good potential for profitable
growth while providing a fair return to our shareholders.
The Board's STRATEGY to achieve this is:
-- to supply a range of technically advanced products to growth
markets in the Mechanical Engineering and Refractory Engineering
segments in which we have built up a global reputation for
engineering excellence, quality, efficiency, reliability,
competitive price and delivery;
-- to manufacture advanced technical products profitably, efficiently and economically;
-- to maintain an ongoing programme of investment in plant,
facilities, sales and marketing, research and development with a
view to increasing efficiency, reducing costs, increasing
performance, delivering better products for our customers,
expanding our global customer base and keeping us at the forefront
of technology within our markets, whilst at all times taking
appropriate steps to ensure the health and safety of our employees
and customers;
-- to control our working capital and investment programme to ensure a safe level of gearing;
-- to maintain a strong capital base to retain investor,
customer, creditor and market confidence and so help sustain future
development of the business;
-- to support a local presence and a local workforce in order to stay close to our customers;
-- to invest in training and development of skills for the Group's future;
-- to manage the environmental and social impacts of our
business to support its long-term sustainability.
BUSINESS MODEL
The Group's focus is on manufacturing within two sectors,
Mechanical Engineering and Refractory Engineering, and through this
division of our manufacturing activities, our overseas business
facilities and our global sales and marketing activities, the Group
benefits from market diversity. Further details of our business and
products are shown on our website www.goodwin.co.uk
Mechanical Engineering
The Group specialises in supplying precision engineered
solutions and industrial goods into critical applications,
generally on a project basis, more often than not involving the
complementary skill set of other group companies to deliver the
requirement. The projects normally involve international
procurement, high integrity castings, forgings or wrought high
alloy steels, carbon fibre composite structures, precision CNC
machining, complex welding and fabrication, and other operations as
are required. In addition to specialist projects, the Group
manufactures and sells a wide range of dual plate check valves,
axial nozzle check valves and axial piston control and isolation
valves. These solutions and products typically form part of large
construction projects, including the construction of naval vessels,
nuclear waste treatment, nuclear power generation, liquefied
natural gas (LNG), gas, oil, petrochemical, mining, and water
markets.
We generate value by creating leading edge technology designs,
globally sourcing the best quality raw material at good prices,
manufacturing in highly efficient facilities using up to date
technology to provide very reliable products to the required
specification, at competitive prices and with timely
deliveries.
The Group through its foundry, Goodwin Steel Castings Limited,
has the capability to pour high performance alloy castings up to 35
tonnes, radiograph and also finish CNC machine and fabricate them
at the foundry's sister company, Goodwin International Limited.
This capability is targeting the defence industry and nuclear
decommissioning, the oil and gas industry, as well as large, global
projects requiring high integrity machined castings.
Goodwin International Limited, the largest company in the
Mechanical Engineering Division, not only designs and manufactures
dual plate check valves, axial nozzle check valves and axial piston
control and isolation valves but also undertakes specialised CNC
machining and fabrication work for nuclear decommissioning
projects. Goodwin International Limited also has a division that is
focused on manufacturing / machining high precision, high integrity
components for naval marine vessels. Noreva GmbH also designs,
manufactures and sells axial nozzle check valves. Both Goodwin
International Limited and Noreva GmbH purchase the majority of the
value of their sand mould castings from Goodwin Steel Castings
Limited for their ranges of check valves and this vertical
integration gives rise to competitive benefits, increased
efficiencies and timely deliveries.
At Goodwin Pumps India Private Limited we manufacture a superior
range of submersible slurry pumps for end users in India, Brazil,
Australia and Africa. Easat Radar Systems Limited and its
subsidiary, NRPL Aero Oy, design and build bespoke high-performance
radar surveillance systems for the global market of major defence
contractors, civil aviation authorities and coastal border security
agencies. Easat has a sister company, Easat Radar Systems India
Private Limited, that also manufactures, sells and maintains radar
systems for air traffic control. We create value on these by
innovative design, assembly and testing in our own facilities using
bought in or engineered in-house components.
Refractory Engineering
Within the Refractory Engineering Division, Goodwin Refractory
Services Limited (GRS) generates value primarily from designing,
manufacturing and selling investment casting powders , injection
moulding rubbers and waxes to the jewellery casting industry. GRS
also manufactures and sells these products to the tyre mould and
aerospace industries. The Refractory Engineering Division has five
other investment powder manufacturing companies located in China,
India and Thailand which sell the casting powders directly and
through distributors to the jewellery casting industry and also
directly to tyre mould and aerospace industries.
These companies are vertically integrated with another of our UK
companies, Hoben International Limited, which manufactures
cristobalite, which it sells to the six casting powder
manufacturing companies as well as producing ground silica that
also goes into casting powders and other UK uses of silica. Hoben
now also manufactures different grades of perlite, and a patented
range of biodegradable bags, known as Soluform, for use inside
traditional hessian / jute bags for the placement of concrete in or
around rivers.
The other UK refractory company is Dupré Minerals Limited (
Dupré ) which focuses on producing exfoliated vermiculite that is
used in insulation, brake linings and fire protection products,
including technical textiles that can withstand exposure to high
temperatures and for lithium -ion battery fire extinguishers. Dupré
also sells consumable refractories to the shell moulding precision
casting industry. Dupré has designed, patented and is now selling a
range of fire extinguishers and an extinguishing agent for lithium
-ion battery fires that utilises a vermiculite dispersion as the
fire extinguishing agent.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the year ended 30th April, 2022
2022 2021
GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue 144,108 131,231
Cost of sales (101,404) (92,230)
GROSS PROFIT 42,704 39,001
Other income -- 763
Distribution expenses (3,743) (2,988)
Administrative expenses (20,654) (19,682)
OPERATING PROFIT 18,307 17,094
Finance costs (net) (1,169) (640)
Share of profit of associate company 63 60
PROFIT BEFORE TAXATION AND MOVEMENT IN
FAIR VALUE OF INTEREST RATE SWAP 17,201 16,514
Unrealised g ain on 10 y ear i nterest
r ate s wap d erivative 2,740 --
PROFIT BEFORE TAXATION 19,941 16,514
Tax on profit (6,321) (3,508)
PROFIT AFTER TAXATION 13,620 13,006
---------- ---------
ATTRIBUTABLE TO:
Equity holders of the parent 12,980 12,494
Non-controlling interests 640 512
PROFIT FOR THE YEAR 13,620 13,006
---------- ---------
BASIC EARNINGS PER ORDINARY SHARE (in
pence) 169.14 167.82
---------- ---------
DILUTED EARNINGS PER ORDINARY SHARE (in
pence) 169.14 164.23
---------- ---------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30th April, 2022
2022 2021
GBP'000 GBP'000
PROFIT FOR THE YEAR 13,620 13,006
OTHER COMPREHENSIVE (EXPENSE) / INCOME
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS:
Foreign exchange translation differences 1,493 (1,371)
Effective portion of changes in fair value of cash flow hedges (3,834) 1,296
Ineffectiveness in cash flow hedges transferred to profit or loss (339) (657)
Change in fair value of cash flow hedges transferred to profit or loss (1,432) 1,932
Effective portion of changes in fair value of cost of hedging 275 (37)
Ineffectiveness in cost of hedging transferred to profit or loss (23) 631
Change in fair value of cost of hedging transferred to profit or loss (75) 381
Tax credit / (charge) on items that may be reclassified subsequently to profit or loss 1,114 (673)
OTHER COMPREHENSIVE (EXPENSE) / INCOME FOR THE YEAR, NET OF INCOME TAX (2,821) 1,502
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 10,799 14,508
-------- --------
ATTRIBUTABLE TO:
Equity holders of the parent 10,089 14,081
Non-controlling interests 710 427
-------- --------
10,799 14,508
-------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th April, 2022
Share Translation Share-based Cash Cost Retained Total Non-controlling Total
capital reserve payments flow of earnings attributable interests equity
reserve hedge hedging to equity
reserve reserve holders
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
YEARED
30TH APRIL,
2022
Balance at
1st May, 2021 753 (852) 5,244 1,601 (1) 106,396 113,141 4,887 118,028
Total
comprehensive
income:
Profit for
the year -- -- -- -- -- 12,980 12,980 640 13,620
Other
comprehensive
income:
Foreign exchange
translation
differences -- 1,315 -- -- -- -- 1,315 178 1,493
Effective
portion
of changes
in fair value -- -- -- (3,790) 275 -- (3,515) (44) (3,559)
Ineffectiveness
transferred
to profit or
loss -- -- -- (333) (23) -- (356) (6) (362)
Change in fair
value
transferred
to profit or
loss -- -- -- (1,359) (64) -- (1,423) (84) (1,507)
Tax -- -- -- 1,135 (47) -- 1,088 26 1,114
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
TOTAL
COMPREHENSIVE
INCOME /
(EXPENSE)
FOR THE YEAR -- 1,315 -- (4,347) 141 12,980 10,089 710 10,799
Transactions
with owners:
Issue of shares 16 -- -- -- -- -- 16 -- 16
Acquisition
of NCI without
a change in
control -- -- -- -- -- (74) (74) (356) (430)
Dividends paid -- -- -- -- -- (7,862) (7,862) (808) (8,670)
BALANCE AT
30TH APRIL,
2022 769 463 5,244 (2,746) 140 111,440 115,310 4,433 119,743
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
GOODWIN PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
for the year ended 30th April, 2021
Share Translation Share-based Cash Cost Retained Total Non-controlling Total
capital reserve payments flow of earnings attributable interests equity
reserve hedge hedging to equity
reserve reserve holders
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
YEARED
30TH APRIL,
2021
Balance at
1st May, 2020 736 361 5,244 (499) (743) 99,918 105,017 4,585 109,602
Total
comprehensive
income:
Profit for
the year -- -- -- -- -- 12,494 12,494 512 13,006
Other
comprehensive
income:
Foreign exchange
translation
differences -- (1,255) -- -- -- -- (1,255) (116) (1,371)
Effective
portion
of changes
in fair value -- -- -- 1,252 (42) -- 1,210 49 1,259
Ineffectiveness
transferred
to profit or
loss -- -- -- (617) 596 -- (21) (5) (26)
Change in fair
value
transferred
to profit or
loss -- -- -- 1,957 362 -- 2,319 (6) 2,313
Tax -- -- -- (492) (174) -- (666) (7) (673)
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
TOTAL
COMPREHENSIVE
INCOME /
(EXPENSE)
FOR THE YEAR -- (1,255) -- 2,100 742 12,494 14,081 427 14,508
Transactions
with owners:
Issue of shares 17 -- -- -- -- -- 17 -- 17
Dividends paid -- -- -- -- -- (6,016) (6,016) (125) (6,141)
Rec ycl ing
of translation
reserve on
the disp o
sal of
subsidiary -- 42 -- -- -- -- 42 -- 42
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
BALANCE AT
30TH APRIL,
2021 753 (852) 5,244 1,601 (1) 106,396 113,141 4,887 118,028
-------- ------------ ------------ -------- -------- --------- ------------- ---------------- --------
CONSOLIDATED BALANCE SHEET
at 30th April, 2022
2022 2021
GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant and equipment 87,594 77,063
Right-of-use assets 6,191 3,691
Investment in associate 896 829
Intangible assets 24,817 24,813
Long-term trade receivables 1,191 --
Derivative financial assets 2,741 191
-------- --------
123,430 106,587
-------- --------
CURRENT ASSETS
Inventories 40,364 34,547
Contract assets 12,331 15,844
Trade receivables and other financial assets 23,717 20,540
Other receivables 6,277 5,627
Derivative financial assets 1,211 4,106
Cash and cash equivalents 11,651 15,160
-------- --------
95,551 95,824
-------- --------
TOTAL ASSETS 218,981 202,411
CURRENT LIABILITIES
Borrowings 2,764 1,607
Contract liabilities 14,749 14,332
Trade payables and other financial liabilities 23,004 21,730
Other payables 4,256 4,025
Derivative financial liabilities 2,393 2,016
Liabilities for current tax 1,886 1,174
Provisions for liabilities and charges 205 608
-------- --------
49,257 45,492
-------- --------
NON-CURRENT LIABILITIES
Borrowings 40,376 33,066
Derivative financial liabilities 1,643 --
Provisions for liabilities and charges 251 251
Deferred tax liabilities 7,711 5,574
-------- --------
49,981 38,891
-------- --------
TOTAL LIABILITIES 99,238 84,383
-------- --------
NET ASSETS 119,743 118,028
-------- --------
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Share capital 769 753
Translation reserve 463 (852)
Share-based payments reserve 5,244 5,244
Cash flow hedge reserve (2,746) 1,601
Cost of hedging reserve 140 (1)
Retained earnings 111,440 106,396
-------- --------
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 115,310 113,141
-------- --------
NON-CONTROLLING INTERESTS 4,433 4,887
TOTAL EQUITY 119,743 118,028
-------- --------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30th April, 2022
2022 2021
GBP'000 GBP'000
CASH FLOW FROM OPERATING ACTIVITIES
Profit from continuing operations after tax 13,620 13,006
Adjustments for:
Depreciation of property, plant and equipment 6,202 5,696
Depreciation of right of use assets 1,192 972
Amortisation and impairment of intangible assets 1,572 1,566
Finance costs (net) 1,169 640
Currency (gains) / losses net of unhedged derivative movements (1,535) 292
Profit on sale of property, plant and equipment (18) (745)
Profit on disposal of subsidiary -- (32)
Unrealised gain on 10 year interest rate swap derivative (2,740) --
Share of profit of associate company (63) (60)
UK tax incentive credit on research and development (675) --
Tax expense 6,321 3,508
--------- ---------
OPERATING CASH FLOW BEFORE CHANGES IN WORKING CAPITAL AND PROVISIONS 25,045 24,843
(Increase) / decrease in inventories (5,175) 10,344
Decrease / (in crease ) in contract assets 3,498 (9,242)
(I ncrease) / decrease in trade and other receivables (3,341) 2,885
Increase / (d ecrease) in contract liabilities 472 (4,428)
I ncrease in trade and other payables 804 1,047
Decrease / (i ncrease ) in unhedged derivative balances -- (438)
--------- ---------
CASH GENERATED FROM OPERATIONS 21,303 25,011
Interest received 157 111
Interest paid (1,415) (845)
Corporation tax paid (2,051) (3,068)
--------- ---------
NET CASH INFLOW FROM OPERATING ACTIVITIES 17,994 21,209
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment 341 1,958
Acquisition of property, plant and equipment (16,215) (11,738)
Additional investment in existing subsidiaries (430) --
Acquisition of intangible assets (282) (719)
Development expenditure capitalised (1,505) (1,420)
--------- ---------
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (18,091) (11,919)
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares 16 17
Payment of capital element of lease liabilities (1,153) (1,635)
Dividends paid (7,862) (6,016)
Dividends paid to non-controlling interests (808) (125)
Proceeds from new loans 6,702 35,048
Repayment of loans and committed facilities (683) (30,772)
--------- ---------
NET CASH OUTFLOW FROM FINANCING ACTIVITIES (3,788) (3,483)
--------- ---------
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS (3,885) 5,807
Cash and cash equivalents at beginning of year 15,160 9,449
Effect of exchange rate fluctuations on cash held 376 (96)
--------- ---------
CASH AND CASH EQUIVALENTS AT OF YEAR 11,651 15,160
--------- ---------
PRINCIPAL RISKS AND UNCERTAINTIES
The Group's operations expose it to a variety of risks and
uncertainties. The Directors confirm that they have carried out a
robust assessment of the principal risks the Company faced ,
including those that would threaten its business model, future
performance, solvency or liquidity.
Market risk: The Group provides a range of products and
services, and there is a risk that the demand for these products
and services will vary from time to time because of competitor
action or economic cycles or international trade friction or even
wars. As shown in note 3 to the financial statements to be
published shortly, the Group operates across a range of
geographical regions, and its turnover is split across the UK,
Europe, USA, the Pacific Basin and the Rest of the World.
Operating in many territories helps spread market risk.
Similarly, the Group operates in both Mechanical Engineering and
Refractory Engineering sectors, mitigating the impact of a downturn
in any one product area as has been seen in recent financial
years.
The potential risk of the loss of any key customer is limited
as, typically, no single customer accounts for more than 1 0 % of
annual turnover.
As described in the Business Model, the Group generates
significant sales not only from valves it supplies to LNG, oil,
chemical and water markets, but increasingly significant amounts
from nuclear new build and decommissioning, naval propulsion marine
applications and ship hull components. The Mechanical Engineering
Division also supplies submersible pumps that are supplied to the
mining industries and radar systems that are supplied for civil and
defence applications. The Refractory Engineering Division sells
vermiculite and perlite to the insulating and fire prevention
industry and our investment casting powder companies indirectly
selling to the jewellery consumer market through the supply of
investment casting moulding powders, waxes, silicone and natural
rubber.
Technical risk: The Group develops and launches new products as
part of its strategy to enhance the long-term value of the Group.
Such development projects carry business risks, including
reputational risk, abortive expenditure and potential customer
claims which may have a material impact on the Group. The potential
risk here is seen as manageable given the Group is developing
products in areas in which it is knowledgeable and new products are
tested as far as possible prior to their release into the
market.
Product failure / Contractual risk: The risks that the Group
supplies products that fail or are not manufactured to
specification are risks that all manufacturing companies are
exposed to but we try to minimise these risks through the use of
highly skilled personnel operating within robust quality control
system environments, using third party accreditations where
appropriate. With regard to the risk of failure in relation to new
products coming on line, the additional risks here are minimised at
the research and development stage, where prototype testing and the
deployment of a robust closed loop product performance quality
control system provides feedback to the design department for the
products we manufacture and sell. The risk of not meeting safety
expectations, or causing significant adverse impacts to customers
or the environment, is countered by the combination of the controls
mentioned within this section and the purchase of product liability
insurance. The risk of product obsolescence is countered by
research and development investment.
Supply chain and equipment risk: Failure of a major supplier or
essential item of equipment presents a constant risk of disruption
to the manufacturing in progress, especially in these post Covid
-19 pandemic times. Where reasonably possible, management mitigates
and controls the risk with the use of dual sourcing, continual
maintenance programmes, and by carrying adequate levels of stocks
and spares to reduce any disruption.
Health and safety: The Group's operations involve the typical
health and safety hazards inherent in manufacturing and business
operations. The Group is subject to numerous laws and regulations
relating to health and safety around the world. Hazards are managed
by carrying out risk assessments and introducing appropriate
controls, as well as attending safety training courses.
Acquisitions: The Group's growth plan over recent years has
included a number of acquisitions. There is the risk that these, or
future acquisitions, fail to provide the planned value. This risk
is mitigated through financial and technical due diligence during
the acquisition process and the Group's inherent knowledge of the
markets they operate in.
Financial risk: The principal financial risks faced by the Group
are changes in market prices (interest rates, foreign exchange
rates and commodity prices). As reported elsewhere within these
financial statements , the Company , on 2nd July , 2021 , signed a
contract to mitigate the impact of interest rate risk by taking out
an interest rate swap derivative fixing GBP30 million of notional
debt at less than 1% v ersus the variable SONIA rate for a period
of ten years , commencing 1st September, 2021 . Detailed
information on the financial risk management objectives and
policies is set out in note 26 to the financial statements to be
published shortly. The Group has in place risk management policies
that seek to limit the adverse effects on the financial performance
of the Group by using various instruments and techniques, including
credit insurance, stage payments, forward foreign exchange
contracts, secured and unsecured credit lines.
Regulatory compliance: The Group's operations are subject to a
wide range of laws and regulations. Both within Goodwin PLC and its
subsidiaries, the Directors and Senior Managers within the
companies make best endeavours to ensure we comply with the
relevant laws and regulations.
IT security: The Group performs regular and remote off site
backups of its IT systems, from time to time engaging external
companies to test and report any weaknesses and deficiencies found
to enable solutions to be put in place to mitigate and minimise the
risk of an IT security breach. The Group is in the process of
re-evaluating the need to invest further in this area over the next
12 months, but for security reasons we will not be disclosing the
details of what we do.
Covid-19 risk: The Covid-19 pandemic continues to have a global
impact in varying degrees that has been seen during the year
through labour shortages, supply chain disruption, shipping
availability and inflationary pressures. The impact of labour
shortages ha s been eased by the strength of our employee retention
and our apprentice school continuing to feed the Group's
requirements with eager engineers. The supply chain issues have
been mitigated by the Group's ability to dynamically acquire and
hold appropriate levels of stock so as to avoid disruption to the
manufacturing processes. Furthermore, the continuation of the post
lock down exceptionally high activity levels within the Refractory
Division, in addition to the significant workload within the
Mechanical Division ha ve meant that the Group has continued to
operate as normal across all of its 23 sites around the world for
the past twenty-four months.
Energy : The recent geopolitical tensions, with the current
conflict in Ukraine, combined with the UK Government ' s energy
policy over the last few years to reduce carbon emissions has left
the country exposed to the fragile global energy system which has
driven significant increases in the cost of power. Following the
impact t his has had on the Group earlier on in the year, the Group
has amended its strategy to manage the risk through hedging
strategies , incorporating price escalation clauses into the longer
term contracts , aided by the coming on stream of increasing levels
of low cost solar power around the Group. We also have two
significant program me s of enhancing the control of plant and
utilising more inverter drives around the Group, which within 24
months sh ould save an additional 6% of the Group's electricity and
gas consumption.
FORWARD-LOOKING STATEMENTS
The Group Strategic Report contains forward-looking type
statements and information based on current expectations, and
assumptions and forecasts made by the Group. These expectations and
assumptions are subject to various known and unknown risks,
uncertainties and other factors, which could lead to substantial
differences between the actual future results, financial
performance and the estimates and historical results given in this
report. Many of these factors are outside the Group's control. The
Group accepts no liability to publicly revise or update these
forward-looking statements or adjust them for future events or
developments, whether as a result of new information, future events
or otherwise, except to the extent legally required.
Directors' statement pursuant to the Disclosure and Transparency
Rules
Each of the Directors, whose names are listed below , confirm
that to the best of each person's knowledge:
a. the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit of the
Company and the undertakings included in the consolidation taken as
a whole; and
b. the Strategic Report contained in the Annual Report includes
a fair review of the development and performance of the business
and the position of the Com p any and the undertakings included in
the consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.
Directors
The Directors of the Company who have served during the year are
set out below.
M.S. Goodwin
S.R. Goodwin
T.J.W. Goodwin
J. Connolly
B.R.E. Goodwin
N. Brown
J.E. Kelly (Non-Executive Director)
Accounting policies
Goodwin PLC (the "Company") is incorporated in England and
Wales.
The Group financial statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group") and
equity account the Group's interest in associates. The parent
Company financial statements present information about the Company
as a separate entity and not about its Group.
The Group's financial statements have been prepared in
accordance with UK adopted I nternational A ccounting S tandards
(IAS) and interpretations issued by the IFRS Interpretations
Committee (IFRS IC) applicable to companies reporting under UK
adopted IFRS.
The financial statements for the year ended 30th April, 2021
were prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006 and IFRS adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union. There is no
difference for the Group in applying each of these accounting
frameworks or on the recognition, measurement or disclosure in the
period reported as a result of the change in framework .
The Company has elected to prepare its financial statements in
accordance with Financial Reporting Standard (FRS) 101 issued in
the UK. These are presented on pages 95 to 107 to the financial
statements to be published shortly.
The accounting policies set out below have been applied
consistently to all periods presented in these Group financial
statements.
Judgements made by the Directors, in the application of these
accounting policies that have significant effect on the financial
statements and estimates with a significant risk of material
adjustment in the next year are discussed in note 2 of to the
financial statements to be published shortly .
New IFRS standards and interpretations adopted during 2021 /
2022
The IASB and IFRIC issued the following amendments:
-- Amendments to IFRS 9, IAS39, IFRS 7, IFRS 4 and IFRS 16 -
Interest rate benchmark reform phase 2, which is effective for
annual periods beginning on or after 1st January , 2021.
-- Amendment to IFRS 16 'Leases' - Covid 19 rent concession
extensions, which is effective for annual periods beginning on or
after 1 st June , 2020
The implementation of these amendments has not had a material
impact on the Group's financial statements
The financial information previously set out does not constitute
the Company's statutory accounts for the years ended 30th April,
2022 or 2021 but is derived from those accounts. Statutory accounts
for 2021 have been delivered to the Registrar of Companies, and
those for 2022 will be delivered in due course. The auditors have
reported on those accounts; their report was:
i. unqualified;
ii. did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their
report; and
iii. did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
Copies of the 2022 accounts are expected to be posted to
shareholders within the next two weeks and will also be available
on the Company's website: www.goodwin.co.uk and from the Company's
Registered Office: Ivy House Foundry, Hanley, Stoke-on-Trent ST1
3NR.
Note 1
Segmental information
Products and services from which reportable segments derive
their revenues
For the purposes of management reporting to the chief operating
decision maker, the Board of Directors, the Group is organised into
two reportable operating divisions: mechanical engineering and
refractory engineering. Segment assets and liabilities include
items directly attributable to segments as well as those that can
be allocated on a reasonable basis. Associates are included in
refractory engineering. In accordance with the requirements of IFRS
8, information regarding the Group's operating segments is reported
below.
2022 2021
Mechanical Refractory Total Mechanical Refractory Total
Engineering Engineering Engineering Engineering
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 87,605 56,503 144,108 86,616 44,615 131,231
Inter-segment
sales 17,784 15,523 33,307 20,871 11,526 32,397
Total revenue 105,389 72,026 177,415 107,487 56,141 163,628
--------------- -------------------------------------- ----------------------------------- ----------------------
Reconciliation to consolidated revenue:
Inter-segment
sales (33,307) (32,397)
Consolidated revenue
for the year 144,108 131,231
-------------------------- ------------------------
2022 2021
Refractory Mechanical Refractory
Mechanical Engineering Engineering Total Engineering Engineering Total
Profits
Segment
o perating
profit 9,139 12,657 21,796 10,823 9,280 20,103
------------------------------ --------------------------- ---------------------------------------------- ----------------------------------- ---------------------- ------------------ ----
% of
operating
profit 42 % 58 % 100 % 54 % 46 % 100 %
Group
centre (3,489) (3,009)
---------------------------------------------- ------------------ ----
Group
operating
profit 18,307 17,094
Share
of profit
of associate
company -- 63 63 -- 60 60
Unrealised gain on 10 year Interest Rate Swap
Derivative 2,740 --
Group finance expenses (net) (1,169) (640)
-------------------------- ------------------ ----
Consolidated profit before tax for the year 19,941 16,514
Tax (6,321) (3,508)
-------------------------- ------------------ ----
Consolidated profit after tax for the year 13,620 13,006
-------------------------- ------------------ ----
2022 2021
Mechanical Refractory Mechanical Refractory
Engineering Engineering Total Engineering Engineering Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net assets
Total
assets 93,049 48,843 141,892 92,929 44,114 137,043
Total
liabilities (71,950) (22,643) (94,593) (66,909) (20,591) (87,500)
------------------------------ --------------------------- ---------------------------------------------- ----------------------------------- ---------------------- ------------------------
Subtotal 21,099 26,200 47,299 26,020 23,523 49,543
------------------------------ --------------------------- ---------------------------------------------- ----------------------------------- ---------------------- ------------------------
Goodwin
PLC net
assets 88,595 83,998
Elimination of Goodwin
PLC investments (25,822) (25,392)
Goodwill 9,671 9,879
---------------------------------------------- ------------------------
Consolidated total
net assets 119,743 118,028
---------------------------------------------- ------------------------
2022 2021
Goodwin PLC Mechanical Refractory Total Goodwin Mechanical Refractory Total
Engineering Engineering PLC Engineering Engineering
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segmental capital expenditure
Property,
plant and
equipment 9,326 5,396 1,631 16,353 5,315 4,952 1,570 11,837
Right-of-use
assets 441 2,401 881 3,723 1,180 1,146 74 2,400
Intangible
assets 237 1,121 429 1,787 151 1,123 456 1,730
---------------------- --------------- ------------------ ------------------ ------------ ----------------------------- ------------------ ----------------------
Total 10,004 8,918 2,941 21,863 6,646 7,221 2,100 15,967
---------------------- --------------- ------------------ ------------------ ------------ ----------------------------- ------------------ ----------------------
Segmental depreciation, amortisation and impairment
Depreciation 3,808 2,200 1,386 7,394 2,970 2,346 1,352 6,668
Amortisation
and impairment 1,195 47 330 1,572 1,106 20 440 1,566
---------------------- ------ ------- ------------------ ------------------ ------------ ------------ -----------------
Total 5,003 2,247 1,716 8,966 4,076 2,366 1,792 8,234
---------------------- ------ ------- ------------------ ------------------ ------------ ------------ -----------------
Geographical segments
The Group operates in the following principal locations. In
presenting the information on geogr a phical segments, revenue is
based on the location of its customers and assets on the location
of the assets.
2022 2021
Revenue Net assets Non-current Capital Revenue Net assets Non-current Capital
assets expenditure assets expenditure
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
UK 38,599 77,447 104,995 19,670 39,755 81,982 89,944 13,634
Rest of
Europe 21,388 8,648 3,728 1,009 21,473 8,309 3,264 279
USA 14,046 -- -- -- 8,027 -- -- --
Pacific
Basin 31,085 15,867 6,703 278 28,255 13,708 6,499 719
Rest of
World 38,990 17,781 8,004 906 33,721 14,029 6,880 1,335
-------- ----------- ------------ ------------- -------- ----------- ------------ -------------
Total 144,108 119,743 123,430 21,863 131,231 118,028 106,587 15,967
-------- ----------- ------------ ------------- -------- ----------- ------------ -------------
Note 2
Dividends
The Board proposes to pay a dividend of 10 7.80 pence per share,
up 5 % on the previous year (2021: 102.24 p ) . The proposed
dividend has been calculated using the Group's profit after
taxation figure, plus depreciation and amortisation for the year
ending 30th April 2022.
The Board proposes to smooth the Group's cash flow by splitting
the payment of the proposed ordinary dividend s of 107.80 pence per
share into equal instalments of 53.9 pence per share on 7th
October, 2022 and on or around 12th April, 2023 to shareholders on
the register on 16th September, 2022 and on or around 24th March,
2023 respectively.
Note 3
Earnings per share
2022 2021
Number Number
Ordinary shares in issue
Opening shares in issue 7,526,400 7,363,200
Shares issued in the year 163,200 163,200
---------- ----------
7,689,600 7,526,400
Outstanding ordinary share options -- 163,200
---------- ----------
Total ordinary shares (issued and options) 7,689,600 7,689,600
---------- ----------
Weighted average number of ordinary shares
in issue 7,673,951 7,445,024
Weighted average number of outstanding ordinary
share options -- 162,651
---------- ----------
Denominator used for diluted earnings per
share calculation 7,673,951 7,607,675
---------- ----------
2022 2021
GBP'000 GBP'000
Relevant profits attributable to ordinary
shareholders 12,980 12,494
-------- --------
Note 4
Going concern
The Directors, after having reviewed the projections and
possible challenges that may lie ahead, believe that there is a
reasonable expectation that the Group has adequate resources to
continue in operational existence for at least twelve months from
the date of approval of these financial statements, and have
continued to adopt the going concern basis in preparing the
financial statements.
As at 30th April 2022, the Group's gearing ratio stood at 25. 8
% (2021: 15.4%) against a substantial shareholders' net worth of
GBP115 million (2021: GBP113 million). The retained reserves of the
Group put it in a strong position to deal with unforeseen material
adverse issues.
In previous years we have reported on the potential impact of
Covid-19 and its limited impact on the business. As you might
expect given our previous comments, our pandemic risk profile is
low and whilst there are minor Covid-19 impacts we do not see the
pandemic as a cause for concern for the Group moving forwards.
The reported results for the year are after having incurred what
have been unprecedented increases in energy costs. Whilst the Group
is not complacent and there is work to be done here, we do not see
the impact of energy costs giving rise to a going concern
issue.
Within our severe but plausible stress test model, it is
demonstrable that the Group has sufficient funds to cover the
Group's and the Company's financial commitments during the forecast
period whilst remaining compliant with its financial covenants. The
stress test model starts with the forecasts generated by the
subsidiary directors and reflects their specific knowledge of the
market conditions, strategy and outlook. Each of these subsidiary
level forecasts is then reviewed, challenged and approved by the
relevant Group Managing Director who themselves are immersed in
each of the businesses. The stress test model then predicts the
impact of a severe but plausible reduction in the pre-tax profit
forecast without pulling back on our capital expenditure forecast.
The results of the stress test modelling did not highlight any
going concern issues.
Whilst our carrying values of trade debtors and contract assets
are significant, we see little risk here in terms of recovery.
Where possible, we credit insure the majority of our debtors and
our pre credit risk (work in progress), and for significant
contracts where credit insurance is not available, we ensure, where
possible, that these contracts are backed by letters of credit or
cash positive milestone payments.
As discussed elsewhere within these accounts, the Mechanical
Engineering order book remains high and the Refractory Engineering
segment continues to be buoyant.
The Directors are confident that the Group and Company will have
sufficient funds to continue to meet their liabilities as they fall
due for at least twelve months from the date of approval of the
financial statements and therefore have prepared the financial
statements on a going concern basis.
Note 5
Annual General Meeting
The Annual General Meeting will be held at 10.30 a.m. on 5th
October, 2022 at Crewe Hall, Weston Road, Crewe, Cheshire CW1
6UZ.
Note 6
ALTERNATIVE PERFORMANCE MEASURES
Measure 2022 2021
Gross profit (GBP'000) 42,704 39,001
Revenue (GBP'000) 144,108 131,231
Gross profit as percentage
of revenue (%) 29.6 29.7
-------------- --------------
Profit before tax (GBP'000) 19,941 16,514
Unrealised gain on 10
year interest rate swap
derivative (2,740) --
-------------- --------------
Trading profit (GBP'000) 17,201 16,514
-------------- --------------
Operating profit (GBP'000) 18,307 17,094
Capital employed (GBP'000) 145,095 130,572
Return on capital employed
(%) 12.6 13.1
-------------- --------------
Net debt (GBP'000) 29,785 17,431
Net assets attributable
to equity holders of
the parent(GBP'000) 115,310 113,141
Gearing (%) 25.8 15.4
-------------- --------------
Net profit attributable
to equity holders of
the parent (GBP'000) 12,980 12,494
Net assets attributable
to equity holders of
the parent(GBP'000) 115,310 113,141
Return on investment
(%) 11.3 11.0
-------------- --------------
Revenue (GBP'000) 144,108 131,231
Average number of employees 1,112 1,129
Sales per employee (GBP'000) 130 116
-------------- --------------
Annual post tax profit
(GBP'000) 13,620 13,006
Interest rate SWAP mark
to market net of tax
@ 19% (GBP'000) (2,219) --
Deferred tax rate change
(GBP'000) 2,012 --
Depreciation owned assets
(GBP'000) 6,202 5,696
Depreciation right-of-use
assets (GBP'000) 1,192 972
Amortisation and impairment
(GBP'000) 1,572 1,566
Exclude operating lease
depreciation (GBP'000) (508) (550)
-------------- --------------
Annual post tax profit
+ depreciation+amortisation
(GBP'000) 21,871 20,690
-------------- --------------
END
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