21
February 2024
AIM:
CMH
CHAMBERLIN
PLC
("Chamberlin" or "the Company" or "the Group")
Interim
Results
for the six months ended 30
November 2023
Chamberlin plc (AIM: CMH) is pleased
to announce its interim results for the six months ended 30
November 2023 ("H1 2024").
Key
Points
·
Revenue of £10.6m (H1 2023: £10.5m), an increase
of 6%
·
Underlying operating profit of £0.1m (H1 2023:
£0.1m loss) reflecting 192% increase from prior period
·
Profit after tax of £47,000 (H1 2023: £0.3m
loss)
·
Conditional sale of Petrel Limited ("Petrel")
announced today for gross proceeds of £3.0m
Chairman, Keith Butler-Wheelhouse,
commented:
"Performance in the first half has been broadly in line with
the Board's expectations. The sale of Petrel will
provide the Group with the financial resources and balance sheet
strength that it needs to focus on its core iron foundry and
machining operations and for both businesses to pursue their
respective strategies with greater
impetus."
Enquiries
Chamberlin plc
Kevin Price, Chief Executive
Officer
Alan Tomlinson, Finance
Director
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T: 01922 707100
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Cavendish Capital Markets Limited
(Nominated Adviser and Joint Broker)
Katy Birkin
Stephen Keys
George Lawson
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T: 020 7220 0500
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Peterhouse Capital Limited (Joint Broker)
Lucy Williams
Duncan Vasey
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T: 020 7469 0930
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Chief Executive's Statement
Revenues in the first half increased
by 6% to £10.6m (2023: £10.5m), largely driven by new orders won at
Chamberlin and Hill Castings' ("CHC") machining facility in the
final quarter of the previous financial year. Revenues in the
Foundry division at CHC and Russell Ductile Castings ("RDC") and in
the Engineering division at Petrel have remained broadly in line
with the elevated levels seen in the corresponding period last
year.
Underlying operating profit of £0.1m
(2023: £0.1m loss) included a £0.2m profit from the sale and
leaseback of the Group's property in Walsall, which completed in
June 2023. Excluding the profit from the property transaction, the
underlying operating loss reduced by 46% compared to last half
year, as gross margin moved ahead slightly to 14.0% (2023: 13.6%)
and overhead costs remained tightly controlled. In the Foundry
division, RDC improved its operating profit by 43% compared to last
half year as a result of operational efficiencies from the
investment in additional capacity and favourable market conditions.
Operating performance at CHC lagged behind expectations due to the
slower than anticipated commencement of production of new programs
and the costs of ramping up production at the machining facility
from a standing start but this temporary trend is expected to
reverse in the second half and operating performance is expected to
improve. Petrel's profitability was slightly below last half year
as overhead costs marginally increased to support its strategy of
expansion in overseas markets.
Following continued expectations of
further operational improvement at CHC's machining facility in the
light of new orders secured, an exceptional operating credit of
£0.2m has been recognised in the first half relating to the
reversal of a previous impairment of the machinery. The net
interest cost of £0.4m (2023: £0.2m) largely reflects the full
impact of successive increases in the Bank of England base rate.
Loss before tax of £0.1m (2023: £0.1m) reflected an 83% improvement
in actual terms compared to the prior period and, after a tax
credit of £0.1m, profit after tax was £47,000 (2023: £0.3m
loss).
In January 2024, Chamberlin
completed a placing and subscription raising £830,000 before costs
to support the Group's working capital requirements as it continues
to deliver the Group's growth strategy and to strengthen the
Group's balance sheet.
On 21 February 2024, the Board
announced that it had entered into an
agreement for the conditional sale of Petrel to Project Apollo Limited (the
"Purchaser"), a subsidiary of
Longacre Group, for a total gross cash
consideration of £3.0 million. Further details regarding the sale
are included in that announcement.
The triennial valuation of the
Group's defined benefit pension scheme was successfully completed
in June 2023. The actions that have been taken by the Board to
improve the funding of the scheme, together with favourable market
movements, have led the deficit to reduce on a Trustees' basis from
£5.5m in March 2019 to around £1.2m following the payment of £1.1m
to the scheme on completion of the property sale and leaseback in
June 2023. This £1.1m contribution resulted in the deficit in the
Group balance sheet at 31 May 2023 of £0.6m becoming a surplus of
£0.1m at 30 November 2023. The payment of £0.85m to the scheme
resulting from the sale of Petrel will further improve the pension
scheme surplus on the Group balance sheet and reduce the deficit on
a Trustees' basis to around £0.4m.
Outlook
The sale of Petrel Ltd will provide
the Group with the financial resources and balance sheet strength
that it needs to focus on its core iron foundry and machining
operations and for both businesses to pursue their respective
strategies with greater impetus. The transaction proceeds are
expected to both reduce the Group's liabilities by around £2.6m and
contribute an exceptional profit of no less than £2.0m, in
FY24.
The Board believes that this is the
start of an exciting new chapter for the Company as it moves
forward with improved working capital resources to invest in the
development of steel production at RDC and spheroidal graphite iron
production at CHC. With existing order books at RDC and CHC
expected to drive improvement in operational performance in the
second half and beyond, prospects for sustainable growth, that will
replace the lost profits from Petrel, are achievable over the short
to medium term.
Kevin Price
Chief Executive
Consolidated Income
Statement
for
the six months ended 30 November 2023
|
|
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|
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|
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|
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|
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Note
|
Unaudited
six months ended
30 November 2023
|
Unaudited
six months ended
30 November 2022
|
Year
ended
31 May 2023
|
|
|
Underlying
|
#
Non-underlying
|
Total
|
Underlying
|
#
Non-underlying
|
Total
|
Underlying
|
#
Non-underlying
|
Total
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
2
|
10,611
|
-
|
10,611
|
10,544
|
-
|
10,544
|
20,718
|
-
|
20,718
|
Cost of sales
|
|
(9,118)
|
-
|
(9,118)
|
(9,104)
|
-
|
(9,104)
|
(17,892)
|
-
|
(178928)
|
Gross profit
|
|
1,493
|
-
|
1,493
|
1,440
|
-
|
1,440
|
2,826
|
-
|
2,826
|
Other operating expenses
|
7
|
(1,362)
|
182
|
(1,180)
|
(1,583)
|
(140)
|
(1,723)
|
(3,413)
|
1,155
|
(2,258)
|
Operating profit/(loss)
|
|
131
|
182
|
313
|
(143)
|
(140)
|
(283)
|
(587)
|
1,155
|
568
|
Interest receivable
Finance costs
|
3
|
144
(535)
|
-
-
|
144
(535)
|
29
(213)
|
-
-
|
29
(213)
|
136
(666)
|
-
-
|
136
(666)
|
(Loss)/profit before tax
|
|
(260)
|
182
|
(78)
|
(327)
|
(140)
|
(467)
|
(1,117)
|
1,155
|
38
|
Tax credit/(expense)
|
4
|
125
|
-
|
125
|
186
|
-
|
186
|
180
|
(343)
|
(163)
|
Profit/(loss) for the period attributable to equity holders of
the Parent Company
|
|
(135)
|
182
|
47
|
(141)
|
(140)
|
(281)
|
(937)
|
812
|
(125)
|
Earnings/(loss) per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
5
|
|
|
0.03p
|
|
|
(0.3)p
|
|
|
(0.1)p
|
Diluted
|
|
|
|
0.03p
|
|
|
(0.3)p
|
|
|
(0.1)p
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
# Non-underlying items include
restructuring costs, reversal of impairment of assets, and
share-based payment costs together with the associated tax
impact.
Consolidated Statement of
Comprehensive Income
for
the six months ended 30 November 2023
|
Unaudited
six months ended
30 November
2023
|
Unaudited
six months ended
30 November
2022
|
Year ended
31 May
2023
|
|
|
£000
|
|
£000
|
|
£000
|
|
|
|
|
|
|
|
Profit/(loss) for the
period
|
|
47
|
|
(281)
|
|
(125)
|
Other comprehensive income
|
|
|
|
|
|
|
Movements in fair value of cash flow
hedges taken to other comprehensive income
|
|
-
|
|
3
|
|
5
|
Recycled to the income
statement
|
|
(2)
|
|
-
|
|
(135)
|
Deferred tax on movements in cash
flow hedges
|
|
-
|
|
(1)
|
|
32
|
Net other comprehensive
(expense)/income that may be recycled to profit and loss
|
|
(2)
|
|
2
|
|
(98)
|
Re-measurement losses on pension
scheme assets and liabilities
|
|
(365)
|
|
(880)
|
|
(1,073)
|
Deferred tax on re-measurement losses
on pension scheme assets and liabilities
|
|
91
|
|
167
|
|
204
|
Net other comprehensive expense that
will not be reclassified to profit and loss
|
|
(274)
|
|
(713)
|
|
(869)
|
Other comprehensive expense for the
period net of tax
|
|
(276)
|
|
(711)
|
|
(967)
|
Total comprehensive expense for the period attributable to
equity holders of the Parent Company
|
|
(229)
|
|
(992)
|
|
(1,092)
|
Consolidated Balance
Sheet
at
30 November 2023
|
|
Unaudited
30 November
2023
|
|
Unaudited
30 November
2022
|
|
31 May
2023
|
|
|
£000
|
|
£000
|
|
£000
|
Non-current assets
|
|
|
|
|
|
|
Property, plant and
equipment
|
|
4,949
|
|
3,525
|
|
5,235
|
Intangible assets
|
|
106
|
|
263
|
|
127
|
Deferred tax assets
|
|
1,409
|
|
1,621
|
|
1,173
|
Defined benefit pension scheme
surplus
|
|
80
|
|
-
|
|
-
|
|
|
6,544
|
|
5,409
|
|
6,535
|
Current assets
|
|
|
|
|
|
|
Inventories
|
|
3,282
|
|
3,449
|
|
3,262
|
Trade and other
receivables
|
|
5,440
|
|
4,955
|
|
4,506
|
Income tax
receivable
|
|
165
|
|
-
|
|
286
|
Cash at bank
|
|
184
|
|
124
|
|
157
|
|
|
9,071
|
|
8,528
|
|
8,211
|
Total assets
|
|
15,615
|
|
13,937
|
|
14,746
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Financial
liabilities
|
|
4,725
|
|
3,873
|
|
4,096
|
Trade and other
payables
|
|
7,069
|
|
7,281
|
|
7,572
|
|
|
11,794
|
|
11,154
|
|
11,668
|
Non-current liabilities
|
|
|
|
|
|
|
Financial
liabilities
|
|
2,835
|
|
1,814
|
|
1,602
|
Deferred tax
liabilities
|
|
64
|
|
60
|
|
40
|
Provisions
|
|
806
|
|
806
|
|
806
|
Defined benefit pension scheme
deficit
|
|
-
|
|
634
|
|
639
|
|
|
3,705
|
|
3,314
|
|
3,087
|
|
|
|
|
|
|
|
Total liabilities
|
|
15,499
|
|
14,468
|
|
14,755
|
|
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
|
|
Share capital
|
|
2,119
|
|
2,088
|
|
2,107
|
Share premium
|
|
7,210
|
|
6,332
|
|
6,882
|
Capital redemption
reserve
|
|
109
|
|
109
|
|
109
|
Revaluation reserve
|
|
1,003
|
|
1,003
|
|
1,003
|
Hedging reserve
|
|
-
|
|
102
|
|
2
|
Retained earnings
|
|
(10,325)
|
|
(10,165)
|
|
(10,112)
|
Total equity
|
|
116
|
|
(531)
|
|
(9)
|
|
|
|
|
|
|
|
Total equity and liabilities
|
|
15,615
|
|
13,937
|
|
14,746
|
Consolidated Cash Flow
Statement
for
the six months ended 30 November 2023
|
|
Unaudited
six months ended
30 November
2023
|
|
Unaudited
six months ended
30 November
2022
|
|
Year
ended
31 May
2023
|
|
|
£000
|
|
£000
|
|
£000
|
Operating activities
|
|
|
|
|
|
|
Loss
for the period before tax
|
|
(78)
|
|
(467)
|
|
38
|
Adjustments for:
|
|
|
|
|
|
|
Interest receivable
Net finance costs
|
|
(131)
522
|
|
(29)
213
|
|
(136)
666
|
Impairment reversal on property,
plant and equipment, inventory and receivables
|
|
(200)
|
|
-
|
|
(1,372)
|
Dilapidations provision
|
|
-
|
|
-
|
|
-
|
Depreciation of property, plant and
equipment
|
|
295
|
|
186
|
|
436
|
Amortisation of intangible
assets
|
|
17
|
|
20
|
|
39
|
Profit on disposal of property plant
and equipment
Foreign exchange rate
movements
|
|
(208)
(2)
|
|
-
(6)
|
|
-
(140)
|
Share-based payments
|
|
18
|
|
34
|
|
99
|
Defined benefit pension contributions
paid
|
|
(1,206)
|
|
(180)
|
|
(362)
|
Increase in inventories
|
|
(20)
|
|
(307)
|
|
(303)
|
Increase in receivables
|
|
(1,006)
|
|
(796)
|
|
(499)
|
(Decrease)/increase in
payables
|
|
(270)
|
|
830
|
|
1,000
|
Corporation tax received
|
|
121
|
|
306
|
|
306
|
Net
cash outflow from operating activities
|
|
(2,148)
|
|
(197)
|
|
(228)
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
Purchase of property, plant
and equipment
|
|
(89)
|
|
(205)
|
|
(410)
|
Purchase of
software
|
|
-
|
|
-
|
|
(5)
|
Development costs
Disposal of property, plant
and equipment
|
|
-
2,200
|
|
-
-
|
|
(10)
-
|
Interest received
|
|
118
|
|
29
|
|
128
|
|
|
|
|
|
|
|
Net
cash inflow/(outflow) from investing activities
|
|
2,229
|
|
(176)
|
|
(297)
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
Interest paid
|
|
(522)
|
|
(215)
|
|
(567)
|
Net invoice finance
drawdown/(repaid)
|
|
498
|
|
1,047
|
|
1,297
|
New share capital
issued
|
|
310
|
|
-
|
|
594
|
Finance lease
payments
|
|
(340)
|
|
(337)
|
|
(642)
|
Net
cash (outflow)/inflow from financing activities
|
|
(54)
|
|
497
|
|
682
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
|
27
|
|
124
|
|
157
|
|
|
|
|
|
|
|
Cash
and cash equivalents at the start of the period
Impact of foreign exchange rate movements
|
|
157
-
|
|
-
-
|
|
-
-
|
|
|
|
|
|
|
|
Cash
and cash equivalents at the end of the period
|
|
184
|
|
124
|
|
157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents compromise:
|
|
|
|
|
|
|
Cash at bank
|
|
184
|
|
124
|
|
157
|
Consolidated Statement of
Changes in Equity
for
the six months ended 30 November 2023
|
Share
capital
|
Share
premium
|
Capital
redemption reserve
|
Hedging
reserve
|
Revaluation reserve
|
Retained
earnings
|
Total
equity
|
|
|
|
|
|
|
|
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
At 1 June 2022
|
2,087
|
6,308
|
109
|
100
|
1,003
|
(9,199)
|
408
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(281)
|
(281)
|
Other comprehensive income/(expense)
for the period net of tax
|
-
|
-
|
-
|
2
|
-
|
(713)
|
(711)
|
Total comprehensive
income/(expense)
|
-
|
-
|
-
|
2
|
-
|
(994)
|
(992)
|
New share capital issued
|
1
|
24
|
-
|
-
|
-
|
-
|
25
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
34
|
34
|
Deferred tax on share-based
payments
|
-
|
-
|
-
|
-
|
-
|
(6)
|
(6)
|
Total of transactions with
shareholders
|
1
|
24
|
-
|
-
|
-
|
28
|
53
|
At 30 November 2022
|
2,088
|
6,332
|
109
|
102
|
1,003
|
(10,165)
|
(531)
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
|
156
|
156
|
Other comprehensive expense for the
period net of tax
|
-
|
-
|
-
|
(100)
|
-
|
(156)
|
(256)
|
Total comprehensive
expense
|
-
|
-
|
-
|
(100)
|
-
|
-
|
(100)
|
New share capital issued
|
19
|
550
|
-
|
-
|
-
|
-
|
569
|
Share-based payments
|
-
|
-
|
-
|
-
|
-
|
65
|
65
|
Deferred tax on share-based
payments
|
-
|
-
|
-
|
-
|
-
|
(12)
|
(12)
|
Total of transactions with
shareholders
|
19
|
550
|
-
|
(100)
|
-
|
53
|
622
|
At 1 June 2023
|
2,107
|
6,882
|
109
|
2
|
1,003
|
(10,112)
|
(9)
|
|
|
|
|
|
|
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
47
|
47
|
Other comprehensive expense for the
period net of tax
|
-
|
-
|
-
|
(2)
|
-
|
(274)
|
(276)
|
Total comprehensive
expense
|
-
|
-
|
-
|
(2)
|
-
|
(227)
|
(229)
|
New share capital issued
|
12
|
328
|
-
|
-
|
-
|
-
|
340
|
Share-based payments
|
-
|
-
|
-
|
-
|
|
18
|
18
|
Deferred tax on share-based
payments
|
-
|
-
|
-
|
-
|
|
(4)
|
(4)
|
Total of transactions with
shareholders
|
12
|
328
|
-
|
-
|
-
|
14
|
358
|
At
30 November 2023
|
2,119
|
7,210
|
109
|
-
|
1,003
|
(10,325)
|
116
|
Notes to the Interim Financial statements
1
General information and accounting policies
The unaudited interim condensed
consolidated financial statements do not comprise the Group's
statutory accounts as defined by section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 May 2023 were
approved by the Board of Directors on 30 November 2023 and filed at
Companies House. The auditor's report on those accounts was
unqualified but contained an emphasis of matter paragraph relating
to a material uncertainty regarding going concern.
Basis of preparation
The Group's financial statements
have been prepared in accordance with International Accounting
Standards in conformity with the requirements of the Companies Act
2006.
The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with AIM Rules issued by the London Stock
Exchange.
Accounting policies
The principal accounting policies
applied in preparing the interim Financial Statements comply with
IFRS as adopted by the European Union and
are consistent with the policies set out in the Annual Report and
Accounts for the year ended 31 May 2023.
No new standards or interpretations
issued since 31 May 2023 have had a material impact on the
financial statements of the Group.
Going concern
The Director's assessment of going
concern is based on the Group's detailed forecast for the two years
ending 31 May 2024 and 31 May 2025, which reflect the Director's
view of the most likely trading conditions. Since the balance sheet
date, Chamberlin plc has entered into a conditional contract for
the sale of Petrel Limited that will generate gross proceeds of
£3.0m on completion.
The forecast includes revenue growth
assumptions across all of the Group's businesses. At Chamberlin and
Hill Castings, these assumptions are based on secured orders and
programs and are based on customer estimates of future demand and
historical run rates. At Russell Ductile Castings, the forecasts
assume that revenue growth will be derived from work recently won
for new customers following the demise of a competitor foundry and
are based on customer estimates of future demand and expected run
rates. At Petrel, revenue growth assumptions are based on the
introduction of new or upgraded products and a strategic drive to
increase export sales.
The Directors have applied
reasonably foreseeable downside sensitivities to the forecast,
including an assumption that sales growth in the two largest
businesses, namely Chamberlin and Hill Castings and Russell Ductile
Castings, are both 20% lower than expectations. Furthermore, the
Group is reliant on an invoice finance facility to fund its working
capital needs. The renewal of the facility at the next annual
review in March 2024 cannot be guaranteed, although there are no
indications at the date of the approval of the financial statements
that a renewal with the existing provider would not be granted or
that alternative providers could not be found. The Directors have
considered how they will respond to any working capital challenges
bearing in mind the points raised above. Firstly the business
constantly looks at cost minimisation and that process could be
accelerated if required. Secondly, if access to alternative debt
funders were not successful in the short term, the business will
consider other funding options, including equity, to support
working capital requirements.
As a consequence, after making
enquiries, the Directors have an expectation that, in the
circumstances of the reasonably foreseeable downside scenarios
described above, the Group and Company have adequate resources to
continue in operational existence for the foreseeable
future.
However, the rate at which revenue
growth can be achieved during a potentially future recessionary
period and uncertain global trading conditions is difficult to
predict. Furthermore, the ability to renew or source alternative
invoice finance facilities results in material uncertainty, which
may cast significant doubt over the ability of the Group and the
Company to realise its assets and discharge its liabilities in the
normal course of business and hence continue as a going
concern.
The Directors continue to adopt the
going concern basis, whilst recognising there is material
uncertainty relating to the above matters.
2
Segmental
analysis
For management purposes, the Group
is organised into two operating divisions: Foundries and
Engineering. The operating segments reporting format reflects the
Group's management and internal reporting structures for the Chief
Operating Decision Maker.
|
Revenue
|
Operating (loss)/
profit
|
|
Unaudited
six
months
ended
30 November
2023
£000
|
Unaudited
six
months
ended
30
November
2022
£000
|
Year
ended
31
May
2023
£000
|
Unaudited
six months
ended
30 November
2023
£000
|
Unaudited
six
months
ended
30
November
2022
£000
|
Year
ended
31
May
2023
£000
|
|
|
|
|
|
|
|
Foundries
|
8,649
|
8,600
|
16,889
|
68
|
(9)
|
(210)
|
Engineering
|
1,962
|
1,944
|
3,829
|
327
|
343
|
606
|
Segmental results
|
10,611
|
10,544
|
20,718
|
395
|
334
|
396
|
Shared costs
|
|
|
|
(264)
|
(477)
|
(983)
|
Non-underlying items (Note
7)
|
|
|
|
182
|
(140)
|
1,155
|
Net finance costs
|
|
|
|
(391)
|
(184)
|
(530)
|
(Loss)/profit before tax
|
|
|
|
(78)
|
(467)
|
38
|
|
|
|
|
|
|
|
| |
The Foundries segment is a supplier
of iron castings, in raw or machined form, to a variety of
industrial customers who incorporate the castings into their own
products or carry out further machining or assembly operations on
the castings before selling them on. The Engineering segment
provides manufactured hazardous area lighting products to
distributors and end-users.
Financing and income tax are managed
on a Group basis and are not allocated to operating
segments.
3
Finance
costs
|
Unaudited
six months ended
30 November
2023
|
Unaudited
six months ended
30 November
2022
|
Year
ended
31 May
2023
|
|
£000
|
£000
|
£000
|
Bank overdraft and invoice finance
interest payable
|
(321)
|
(127)
|
(365)
|
Interest expense on lease liabilities
and other interest payable
|
(214)
|
(86)
|
(301)
|
|
(535)
|
(213)
|
(666)
|
4
Income tax
expense
An estimated effective rate of tax
for the six months to 30 November 2023 of 160.3% (30 November 2022:
39.8%) has been used in these interim statements. This rate differs
to the standard corporation tax rate of 25% due primarily due to
the recognition of a deferred tax asset on certain trading losses,
accelerated capital allowances, research and development credits
and short-term timing differences. The corporation tax rate was 19%
for the year ended 31 May 2023 and is expected to be 25% for the
year ended 31 May 2024.
5
Earnings/(loss)
per share
The calculation of earnings/(loss)
per share is based on the profit/(loss) attributable to
shareholders and the weighted average number of ordinary shares in
issue. In calculating the diluted loss per share, adjustment has
been made for the dilutive effect of outstanding share options
where applicable. Underlying earnings/(loss) per share, which
excludes non-underlying items and the related tax thereon as
disclosed in Note 7, as analysed below, has been disclosed as the
Directors believe this allows a better assessment of the underlying
trading performance of the Group.
|
Unaudited
six months
ended
30 November
2022
|
Unaudited
six months
ended
30
November
2021
|
Year
ended
31
May
2022
|
|
£000
|
£000
|
£000
|
Profit/(loss) after tax for basic earnings per
share
|
47
|
(281)
|
(125)
|
Non-underlying operating
items
|
(182)
|
140
|
(1,155)
|
Taxation effect of the
above
|
-
|
-
|
343
|
Loss
for underlying earnings per share
|
(135)
|
(141)
|
(937)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
six months
ended
30 November
2023
|
Unaudited
six months
ended
30
November
2022
|
Year
ended
31
May
2023
|
|
000
|
000
|
000
|
Weighted average number of ordinary shares
|
137,723
|
105,625
|
112,603
|
Adjustment to reflect dilutive shares
under option
|
3,688
|
3,581
|
1,888
|
Diluted weighted average number of ordinary
shares
|
141,411
|
109,206
|
114,491
|
There is no adjustment for the
shares under option in the diluted loss per share
calculation for the six months ended 30 November
2022 and year ended 31 May 2023 as they are required to be excluded
from the weighted average number of shares as they are
anti-dilutive.
6
Pensions
The Group operates a defined benefit
pension scheme and a defined contribution pension scheme on behalf
of its employees. For the defined contribution scheme,
contributions paid in the period are charged to the income
statement. For the defined benefit scheme, actuarial
calculations are performed in accordance with IAS 19 in order to
arrive at the amounts to be charged in the income statement and
recognised in the statement of comprehensive income. The
defined benefit scheme is closed to new entrants and future
accrual.
Under IAS 19, the Group recognises
all movements in the actuarial funding position of the scheme in
each period. This is likely to lead to volatility in
shareholders' equity from period to period.
The IAS 19 figures are based on a
number of actuarial assumptions as set out below, which the
actuaries have confirmed they consider appropriate. The
projected unit credit actuarial cost method has been used in the
actuarial calculations.
|
30 November
2023
|
30
November
2022
|
31
May
2023
|
|
|
|
|
Salary increases
|
n/a
|
n/a
|
n/a
|
Pension increases (post
1997)
|
3.0%
|
3.1%
|
3.0%
|
Discount rate
|
5.2%
|
4.5%
|
5.4%
|
Inflation assumption - RPI
|
3.1%
|
3.1%
|
3.1%
|
Inflation assumption - CPI
|
2.5%
|
2.4%
|
2.5%
|
The demographic assumptions used for
30 November 2023 were the same as those used at 31 May 2023, and
were based on the last full actuarial valuation performed as at 31
March 2022. The contributions expected to be paid during the year
to 31 May 2024 are £409,000. The next triennial valuation is due as
at 31 March 2025.
The defined benefit scheme funding
has changed under IAS 19 as follows:
Funding status
|
Unaudited
30 November
2023
£000
|
Unaudited
30
November
2022
£000
|
31
May
2023
£000
|
Scheme assets at end of period
|
11,847
|
11,924
|
11,000
|
Benefit obligations at end of period
|
(11,767)
|
(12,558)
|
(11,639)
|
Surplus/(deficit) in scheme
|
80
|
(634)
|
(639)
|
Related deferred tax
(liability)/asset
|
(20)
|
159
|
160
|
Net
pension asset/(liability)
|
60
|
(475)
|
(479)
|
|
|
|
|
The change in the net pension
liability since 31 May 2023 is mainly due to the additional
employer contribution of £1.1m partially offset by negative
investment returns arising from a fall in the market value of
scheme assets and an increase in the value of liabilities as a
consequence of a reduction in bond yields reducing the discount
rate.
7
Non-underlying
items
|
Unaudited
six months
ended
30 November
2023
|
Unaudited
six months
ended
30
November
2022
|
Year
ended
31
May
2023
|
|
|
£000
|
£000
|
£000
|
|
Group reorganisation
|
-
|
106
|
118
|
|
Reversal of impairment of property,
plant & equipment
|
(200)
|
-
|
(1,372)
|
|
Share-based payment
charge
|
18
|
34
|
99
|
|
Non-underlying operating
income/(costs)
|
(182)
|
140
|
(1,155)
|
|
Taxation
|
|
|
|
- tax effect of non-underlying
costs
|
-
|
-
|
343
|
|
|
|
|
|
(182)
|
140
|
(812)
|
|
|
|
|
|
|
| |
In the six months ended 30 November
2023, the Group reversed £200,000 of the impairment to property,
plant and equipment in the foundry division's machining facility
following improved performance and prospects.
8
Net
debt
|
Unaudited
30 November
2023
|
Unaudited
30
November
2022
|
31
May
2023
|
|
£000
|
£000
|
£000
|
Current financial assets/(liabilities)
|
|
|
|
Net cash
|
184
|
124
|
157
|
Lease liabilities
|
(689)
|
(580)
|
(554)
|
Invoice finance liability
|
(4,036)
|
(3,293)
|
(3,542)
|
Net debt due in less than one
year
|
(4,541)
|
(3,749)
|
(3,939)
|
|
|
|
|
Lease liabilities due in more than one year
|
(2,835)
|
(1,814)
|
(1,602)
|
|
|
|
|
Net
debt
|
(7,376)
|
(5,563)
|
(5,541)
|
9
Interim
report
This interim results statement is
available on the Group's website, www.chamberlin.co.uk.