TIDMCAR
RNS Number : 5597D
Carclo plc
30 June 2021
Carclo plc
("Carclo" or the "Group")
Preliminary Results for the year ended 31 March 2021
Carclo plc, the global solution provider focused on fine
tolerance injection moulded plastic parts for the medical,
diagnostics, electronics, optics and automotive safety markets, and
aerospace components, announces its results for the financial year
ended 31 March 2021 ("2020/21").
The key financial performance measures for the year are as
follows:
Year ended Year ended
31 March 31 March
2021 2020
GBP000 GBP000
Continuing operations
Revenue 107,564 110,506
Underlying operating profit(1) 4,840 7,313
Exceptional items 4,490 (5,470)
Statutory operating profit 9,330 1,843
Discontinued operations
Profit / (loss) on discontinued operations,
net of tax 1,198 (9,509)
Underlying earnings per share - continuing
operations 2.4p 4.9p
Basic earnings / (loss) per share - continuing
operations 8.5p (2.6p)
Net debt excluding lease liabilities 20,541 22,107
Net debt 27,596 27,357
IAS 19 retirement benefit liability 37,275 37,620
Continuing operations
Revenue
Technical Plastics 102,473 103,053
Aerospace 5,091 7,453
Total 107,564 110,506
Underlying operating profit
Technical Plastics 9,217 9,253
Aerospace 550 1,653
Central (4,927) (3,593)
Total 4,840 7,313
----------------------------- -------- --------
Highlights
-- Resilient revenue performance despite COVID-19
o Revenue from continuing operations decreased by 2.7% to
GBP107.6 million (2020: GBP110.5 million)
o Underlying operating profit from continuing operations
decreased by GBP2.5 million to GBP4.8 million (2020: GBP7.3
million)
-- Net cash from operating activities from continuing operations
was GBP8.4 million (2020: GBP6.9 million)
-- Statutory operating profit from continuing operations
increased to GBP9.3 million (2020: GBP1.8 million)
-- Net exceptional gain in the year of GBP4.5 million, reflects
a GBP6.5 million pension credit, primarily from the introduction of
flexible early retirement benefits, offset by GBP2.0 million
restructuring costs
-- Group stabilised and simplified after LED Technologies business disposal
-- New Board recruited
-- Three-year agreement on financing and pension contributions
provides a stable platform for the business to move forward
-- Continuing to invest in support of strong growth momentum in the Technical Plastics business
(1.) Underlying operating profit is defined as operating profit
adjusted to exclude all exceptional items. A reconciliation to
statutory figures in given on pages 35 and 36.
Commenting on the results, Nick Sanders, Executive Chairman
said:
" Despite a challenging period for the Group, the continuing
businesses performed strongly in 2020/21 and ended the year on an
improving trend.
Following the exit of the loss-making LED business and the
completion of a three-year agreement with the Group's lending bank
and pension trustees, Carclo now has a more stable platform from
which to develop the business. The management structure has been
simplified and the senior management and Board significantly
strengthened.
Whilst COVID-19 continues to create some uncertainty over our
near-term performance, the Board believes that the operating
businesses within the Group have attractive long-term growth
opportunities, particularly within the medical diagnostics market
where the CTP business is well positioned.
Alongside investing to deliver its organic growth strategy, the
Board is working closely with Carclo's pension trustees on the
Group's defined benefit pension deficit. Delivering a reduction in
the pension deficit over time will be a key element in translating
the performance of the underlying business into value creation for
shareholders .
We are encouraged by our trading performance during the first
quarter and the Board expects to see good progress in the current
year."
Further Information
Please contact:
Nick Sanders, Executive Chairman,
Carclo plc +44 (0)1924 268040
Phil White, Chief Financial Officer,
Carclo plc +44 (0)1924 268040
Nick Hasell / Susanne Yule, FTI
Consulting +44 (0)0203 7271340
Forward-looking statements
Certain statements made in this annual report and accounts are
forward-looking statements. Such statements are based on current
expectations and are subject to a number of risks and uncertainties
that could cause actual events to differ materially from any
expected future events or results referred to in these
forward-looking statements.
Alternative performance measures
Alternative performance measures are defined in the glossary on
page 36. A reconciliation to statutory numbers is included on pages
35 and 36. The Directors believe that alternative performance
measures provide a more useful comparison of business trends and
performance. The term "underlying" is not defined under IFRS and
may not be comparable with similarly titled measures used by other
companies.
Executive Chairman's Statement
As for many companies, the last year has been one of disruption
and uncertainty for Carclo.
The COVID-19 pandemic significantly impacted our businesses
around the world, and the aftermath of the exit from our LED
operations in the prior year continued to affect the Group.
Our priorities have been to ensure the safety and wellbeing of
our people and the communities that we operate in and to safeguard
the long-term sustainability of the business.
Despite these challenges, I am pleased to report that the Group
has restructured, refinanced and created a streamlined and
simplified business model. It has stabilised its operations and our
performance is steadily improving.
Our largest division, Carclo Technical Plastics ("CTP")
recovered well despite temporary plant closures in the first
quarter due to the pandemic with our customers and also suppliers
experiencing significant operational disruption throughout the
year. Notwithstanding these factors, I am pleased to report that
CTP total sales were broadly the same as the prior year - a
tremendous achievement by the team in a very challenging economic
environment.
Our Aerospace division was severely impacted by the downturn in
the sector as a whole resulting in a significant reduction in order
intake throughout the year. In response we rapidly adjusted our
cost base to mitigate the impact of reduced post-COVID volumes and
applied the government support schemes available to the business.
These actions resulted in a positive cash generation for the
division despite the worst economic conditions in the sector for
decades, and the business remained profitable albeit at a lower
level than in prior years.
The residual impact of the divestment of the Wipac division and
related restructuring, refinancing and rationalisation of
activities continued to be felt in the first half of the year,
consuming significant Board and management time as well as
incurring a high level of advisor costs. This is now behind us,
with the second half of the year benefiting from the Group's new
streamlined and simplified structure and a clear focus on
operational and strategic improvement.
During the second half of the year, following the implementation
of the new tripartite agreement, the Group has embarked on a series
of proactive restructuring and rationalisation activities. These
are expected to benefit the Group through the restructuring of
inter-company arrangements, divisionalising and decentralising its
structures and activities for greater cost-effectiveness. The
establishment of the new tripartite agreement has fostered a
renewed and close working relationship with the pension trustees on
strategic initiatives to reduce the pension scheme deficit while
preserving members' benefits. Progress has already been made in the
year in establishing flexible early retirement options for members
and further benefits from these positive strategic initiatives are
expected to accrue in 2021/22.
In the second half of the year we introduced rigorous and
regular business review processes, encompassing a broader range of
new financial and non-financial KPIs. Focus is maintained and
progress tracked on a weekly as well as monthly basis through
financial and operational management meetings.
As previously reported, the Group concluded a tripartite
agreement with its lending bank and pension trustees on 14 August
2020. This agreement provides lending facilities through to 31 July
2023 and an agreement not to alter the contributions to the Group's
pension funds for the same period. There is now a focus on strong
communications between bank, pension trustees and Company
management, with quarterly tripartite meetings to review progress
and performance, which is greatly strengthening the understanding
and relationship between the three parties. This has provided a
solid foundation for the business to move forward and to develop
strategies for each of its divisions.
These strategies are focused on delivering profitable organic
growth and operational improvement, supported by targeted
investment. CTP is already starting to make solid progress against
these objectives having secured a number of new contracts in the
medical sector, while our focus on cash generation along with
working capital improvement are starting to deliver results and
facilitate growth. Recovery in the Aerospace business will take
longer as we expect activity levels in this sector will remain
below 2019 levels for the next three to four years. However, the
overall impact on the Group business is low due to the much smaller
scale of the Aerospace division.
Financial performance
Group revenue from continuing operations decreased by 2.7% to
GBP107.6 million (2020: GBP110.5 million), underpinned by a strong
divisional performance from CTP in the context of the COVID-19
pandemic. Revenue including discontinued operations decreased by
26.5% to GBP107.6 million (2020: GBP146.3 million).
Group underlying operating profit from continuing operations was
33.8% lower at GBP4.8 million (2020: GBP7.3 million) with basic
underlying earnings per share from continuing operations 51.0%
lower at 2.4 pence (2020: 4.9 pence). Statutory basic earnings per
share was 10.1 pence (2020: 15.5 pence loss). The Group's net debt
including IFRS 16 lease liabilities increased GBP0.2 million to
GBP27.6 million (2020: GBP27.4 million) with positive operational
cash generation from continuing operations and further proceeds
from the disposal of the discontinued LED Technologies operation
offsetting capital expenditure which was funded by a mixture of
cash and lease liabilities.
The underlying operating profit margin from continuing
operations decreased to 4.5% (2020: 6.6%), reflecting reduced
activity levels in the Aerospace business and increased central
costs due to PPF levy cost increases and foreign exchange
movements. Underlying earnings before interest, taxation,
depreciation and amortisation from continuing operations decreased
to GBP10.8 million (2020: GBP13.4 million).
Return on capital employed increased from 10.1% to 13.5%.
Statutory operating profit including discontinued operations was
GBP9.3 million (2020: GBP4.4 million loss) with statutory profit
before tax and profit on disposal of discontinued operations of
GBP6.6 million (2020: GBP7.0 million loss).
COVID-19
The pandemic inevitably had a significant impact on our business
throughout the year. However, our CTP division broadly maintained
total sales year on year despite the downturn. The Group has
absorbed the full impact of COVID-19 within its trading results
without setting aside any provisions or charges as exceptional
items.
Our priority has been to keep our people and communities safe
whilst maintaining business operations as far as possible. Measures
to protect our employees have been regularly reviewed and updated
and best practice shared across our sites around the world. The
wearing of personal protective equipment, temperature testing,
social distancing in the workplace and working from home measures
have all been introduced as we adapted and changed to the evolving
situation.
The pandemic not only impacted our businesses but the sectors in
which they operate, and these impacts will be detailed further in
the annual report.
Our people
I am proud of the way that the Carclo team worldwide has
responded to the pandemic and I would like to thank them all for
their efforts under the most challenging of conditions.
Our people are of course our greatest strength and in this year
we have initiated work to strengthen our commitment to the ongoing
development of our teams across each country in which we
operate.
New apprenticeship and employee development accreditation
schemes have been launched in our US operations and similar
initiatives will be rolled out across the Group in 2021/22.
As well as training and career development opportunities, work
has begun on providing health and wellbeing support for our
employees and I look forward to reporting more on this in future
periods. Some great examples of best practice have emerged and our
intent is to implement these more broadly around the Group.
We are also increasing our focus on workforce diversity to
ensure that we attract and retain the best people wherever we
operate.
Board changes
Peter Slabbert and David Toohey indicated their intention not to
seek re-election as Non-Executive Directors after both serving the
Group over the last six years, and they retired from the Board on
31 March 2021 and 30 April 2021 respectively. I would like to thank
both Peter and David for their contribution to the business.
I am pleased that we have been able to recruit Eric Hutchinson
and Frank Doorenbosch to the Board. They bring a wealth of business
and specific industry experience that will be invaluable as we
execute our strategies going forward. Eric was appointed on 7
January 2021 and became Chair of the Audit Committee in March 2021,
taking over from Peter Slabbert. Frank was appointed on 1 February
2021, and took over as Chair of the Remuneration Committee in April
2021 following David's departure.
I was appointed as a Non-Executive Director and Chairman-elect
on 18 August 2020. Joe Oatley held the position of interim
Non-Executive Chairman until 30 September 2020 when I became
Non-Executive Chairman and following a restructuring, subsequently
became the Executive Chairman on 5 October 2020, following Antony
Collins stepping down as interim CEO. Joe reverted to his role as a
Non-Executive Director and Chairman of the Nomination Committee and
was also appointed as Senior Independent Director on 30 September
2020. I would like to thank Joe for taking on these additional
responsibilities during some difficult times.
Following Matt Durkin-Jones' departure as interim CFO on 17
December 2020, on 1 March 2021 Phil White joined the Board as the
permanent CFO after a short period as interim CFO. Phil also brings
a wealth of knowledge and experience to the business and he is
working alongside me on driving improvements across the Group.
I am pleased that after a period of difficulty for the Group
culminating in the disposal of the Wipac division, we have
recruited a strong new Board with very relevant experience to guide
the business forward.
Health, safety and environment
In parallel to the measures taken to manage the impact of the
pandemic, the business has continued to work on continually
improving the health and safety performance of our operations and I
am pleased to report a 46% reduction in the number of incidents
across the Group and a 20% reduction in lost time accidents.
Further development of our health and safety strategies will
continue in the current financial year.
Our Environmental policy has been enhanced and further
improvement measures are planned as part of our overall ESG
approach.
Dividend
Given the financial performance and position of the Group,
coupled with restrictions on the payment of dividends contained
within the refinancing agreement and the lack of distributable
reserves, the Board is not recommending the payment of a dividend
for 2020/21 (2020: GBPnil).
Governance
Since joining the Board in August 2020, I have observed the
Board's focus on maintaining a strong corporate governance
framework and culture throughout the Group. The Board is fully
supportive of the principles laid down in the UK Corporate
Governance Code and continues to review its systems, policies and
procedures that support the Group's sustainability and governance
practices.
Brexit
As a result of the protracted and last-minute negotiations
between UK and EU governments on the terms of the UK's exit from
the EU, some operational disruption was experienced by both the CTP
and Aerospace businesses. The main impacts were delays in shipping
goods across borders, with shipping times increasing in some cases
from three days to three weeks. This was particularly acute in
January and whilst the impact diminished somewhat in the following
months, shipping times remain significantly longer than was the
case pre-Brexit. In addition to delays, shipping costs have also
increased and this appears to be a permanent reset of the market.
However, we do not consider Brexit to have had a material impact on
the business to date.
Pensions
The management team has worked closely with the pension trustees
to establish a positive and proactive working relationship with the
common aim of maintaining scheme benefits whilst reducing the
scheme deficit over time. In addition to the substantial company
contributions, the pension trustees during the year have worked
with the Company management and initiated a range of measures on
investment strategy and pension offerings to scheme members.
Specifically, this included the introduction of a Bridging Pension
Option whereby scheme members may opt to start taking pensions
payments prior to full retirement, providing greater flexibility of
pensions choice to members. The management team and pension
trustees are continuing to work collaboratively to identify further
opportunities for improvement.
Divisional review
Carclo Technical Plastics ("CTP")
Despite the challenges presented by the pandemic the CTP
division performed well.
In the early part of the financial year the division experienced
significant disruption through employee absence, customer shutdowns
and supply chain delays. The management quickly introduced
protocols to protect our employees and adapted flexible working
patterns to maintain production through the most severe
periods.
As a result of CTP's reputation for delivery and quality, the
division secured three new large medical customers. Two of these
customers operate in the diagnostic field and the other in
pharmaceuticals. Demand for new COVID products was high and is
expected to remain so for some time, whilst demand for some
non-COVID medical products reduced as a result of treatments being
delayed.
As a result of these new business wins, demand for new tooling
increased over the prior year and is an encouraging leading
indicator of future growth. Investment in new technology moulding
machines also continued at a high level as the division gears up
for increased demand for medical and diagnostic products (both
COVID and non-COVID related).
As well as securing new customers, the division also saw
increased demand from existing customers in the medical sector.
Overall demand for optical products slowed in the first half due
to the impact of the pandemic on large building projects but this
was partially offset by increased activity in the aftermarket and
home improvement sector. Sales improved in the second half as
markets began to recover. The division also developed a number of
new products for the optical sector which will be released in
2021/22.
Aerospace
In common with much of the sector, the impact of the pandemic on
our Aerospace business has been significant. As a result of the
steep reduction in commercial aerospace activity in particular, the
business experienced a large reduction in orders in the first
quarter and this situation persisted for the remainder of the
financial year. In response to the crisis the management team took
immediate action to reduce costs and to take the benefit of
government support schemes in both the UK and France. As a result
of this action the business has remained profitable and cash
generative throughout the year in the face of an unprecedented
aerospace sector downturn post-COVID.
A range of actions have been implemented to find new growth
opportunities both within the aerospace sector and in other
industrial sectors and these show some potential for the
future.
While it is anticipated that the recovery of sales to
pre-pandemic levels will take some years to achieve, the overall
impact on the Group as a whole is less significant due to the lower
contribution to Group sales and therefore net income from the
Aerospace division.
Strategy
The Group's strategy is to focus on being the supplier of choice
in our core markets, which will deliver sustainable growth in
earnings.
Further planning work has been completed in both operating
divisions to underpin the achievement of this strategic goal and
action plans have been defined and launched.
Each division will become "standalone" and will have the
resources to operate independently of central functions as far as
possible.
The central team will focus on Group strategy, capital
allocation, finance, IT and governance and will work with the
pension trustees to reduce the current deficit in the Group defined
benefit pension funds.
CTP will continue to focus on its core markets of medical,
diagnostics, electronics, optics and automotive safety, with the
objective of diversifying its customer base in these sectors in
each of the regions in which we operate.
This will be underpinned by further investment in capital
equipment with an emphasis on new technology and increased
automation and by a rigorous operational improvement plan.
This includes projects initiated in the Aerospace division to
win business with new customers in the aerospace and other
safety-critical industries.
Nick Sanders
Executive Chairman
30 June 2021
Finance Review
Trading performance
Revenue from continuing operations decreased by 2.7% to GBP107.6
million (2020: GBP110.5 million) with CTP revenue of GBP102.5
million, down 0.6% (2020: GBP103.1 million) and Aerospace revenue
of GBP5.1 million, down 31.7% (2020: GBP7.5 million). Revenue from
discontinued operations was GBPnil (2020: GBP35.8 million). Overall
Group revenue decreased by 26.5% to GBP107.6 million (2020:
GBP146.3 million) following the disposal of the loss-making Wipac
LED Technologies division in the prior year.
Underlying operating profit(1) from continuing operations
decreased by GBP2.5 million to GBP4.8 million (2020: GBP7.3
million). GBP1.1 million of the profit reduction arose from
Aerospace underlying operating profit of GBP0.6 million (2020:
GBP1.7 million), due to the heavy impact on the market sector from
COVID-19 restrictions. CTP underlying operating profit of GBP9.2
million was broadly unchanged (2020: GBP9.3 million) and central
costs of GBP4.9 million (2020: GBP3.6 million) increased by GBP1.3
million due to PPF levy cost increases and foreign exchange
movements.
After exceptional items, operating profits for continuing
operations increased to GBP9.3 million (2020: GBP1.8 million). The
GBP4.5 million of net exceptional gains in the year reflects a
pension past service credit of GBP6.5 million primarily from
introducing a new flexible retirement option to the defined benefit
pension scheme members, offset by GBP2.0 million of restructuring
and refinancing costs. These exceptional costs were largely
incurred to support the establishment of a three-year tripartite
financing and funding agreement and platform for financial
stability between the principal bank and pension scheme trustees in
August 2020.
The GBP5.5 million prior year exceptional costs for the
continuing business mainly related to restructuring and
rationalisation costs and impairment provisions against the
Aerospace business.
Underlying earnings before interest, taxation, depreciation and
amortisation ("underlying EBITDA") from continuing operations
decreased to GBP10.8 million (2020: GBP13.4 million). The 2020
comparative including discontinued operations was GBP11.3 million.
The return on sales from continuing operations (defined as
underlying EBITA divided by revenue) was 4.7% (2020: 6.8%).
Discontinued underlying operating losses were GBP0.1 million
(2020: GBP2.9 million), having completed the exit from the Wipac
LED Technologies business in the prior year.
Group underlying profit before tax from continuing operations
was GBP2.2 million (2020: GBP4.9 million) after net interest of
GBP2.7 million (2020: GBP2.4 million). Total Group interest
including discontinued operations was GBP2.7 million (2020: GBP2.6
million), comprising net bank interest of GBP1.6 million (2020:
GBP1.2 million), pension finance charges of GBP0.8 million (2020:
GBP1.1 million) and leasing and other interest charges of GBP0.3
million (2020: GBP0.3 million).
The Group underlying tax charge from continuing operations
totalled GBP0.5 million (2020: GBP1.4 million), an underlying
effective tax rate from continuing operations of 21.0% (2020:
27.8%). The effective tax rate is higher than the current UK
corporation tax rate due to the weighting of taxable profits
generated in higher tax jurisdictions. The overall effective rate
has reduced in the year after taking account of provisions for tax
uncertainties no longer required and timing differences.
Basic underlying earnings per share from continuing operations
were 2.4 pence (2020: 4.9 pence).
As set out in note 6, exceptional items incurred for continuing
operations totalled GBP4.5 million credit, of which a GBP2.0
million charge relates to the costs of external advisors of the
Company, its lending bank and the Group pension scheme related to
the refinancing process completed in the year, and a GBP6.5 million
credit primarily relates to past service gains from the defined
benefit pension scheme after the introduction of flexible early
retirement benefits.
The exceptional credit associated with the discontinued
operations totalled GBP1.2 million, reflecting further disposal
receipts from the administrator of the discontinued Wipac LED
Technologies business.
Statutory operating profit was GBP9.3 million (2020: GBP4.4
million loss). Statutory profit before tax was GBP6.6 million
(2020: GBP7.0 million loss) and statutory profit after tax was
GBP7.4 million (2020: GBP11.4 million loss), giving a statutory
basic earnings per share of 10.1 pence (2020: 15.5 pence loss). The
statutory tax charge was GBP0.5 million, compared with a tax charge
in 2020 of GBP1.4 million on higher profits chargeable to tax and
adverse prior year movements on timing differences and provisions.
A reconciliation of statutory to underlying non-GAAP financial
measures is provided on pages 35 and 36.
(1.) Underlying operating profit is defined as operating profit
before all exceptional items.
Net debt
Net debt excluding lease liabilities was GBP20.5 million (2020:
GBP22.1 million). Net debt including lease liabilities was GBP27.6
million (2020: GBP27.4 million).
Net cash from operating activities from continuing operations
was GBP8.4 million (2020: GBP6.9 million).
In the year, the Group invested GBP10.5 million in property,
plant, equipment and software (2020: GBP7.3 million) in its
continuing operations, mainly in CTP's UK and USA operations. This
represented 177% of the Group depreciation and software
amortisation charge from continuing operations (2020: 121%).
At 31 March 2021, total UK bank facilities were GBP35.6 million,
of which GBP3.5 million related to a revolving credit facility and
GBP32.1 million in term loan facilities, of which GBP3.0 million
are scheduled for repayment by September 2022. The three-year bank
facility agreement established in August 2020 lasts until July
2023, with a commitment to agree the next refinancing arrangements
by 30 June 2022.
The last triennial actuarial valuation of the Group pension
scheme was carried out as at 31 March 2018, reporting an actuarial
technical provisions deficit of GBP90.4 million. The next triennial
actuarial valuation results as at 31 March 2021 are not expected to
be finalised until June 2022, but the actuary's update of the 2018
triennial valuation to 31 March 2021, based on the 2018 actuarial
assumptions adjusted for changes in market conditions, reported a
deficit of GBP89.9 million, indicating the scheme to be 65% funded
on a continuing basis. By way of comparison, the statutory
accounting method of valuing the Group pension scheme deficit under
IAS19 resulted also in a small improvement in the net liability of
GBP37.3 million (2020: GBP37.6 million).
Treasury
The Group faces currency exposure on its overseas subsidiaries
and on its foreign currency transactions.
Each business hedges significant transactional exposure using
forward foreign exchange contracts for any exposure over GBP20,000.
The Group reports trading results of overseas subsidiaries based on
average rates of exchange compared with sterling over the year.
This income statement translation exposure is not hedged as this is
an accounting rather than cash exposure and as a result the income
statement is exposed to movements in the US dollar, euro, Czech
Koruna and Indian Rupee. In terms of sensitivity, based on the
2020/21 results, a 10% increase in the value of sterling against
these currencies would have decreased reported profit before tax by
GBP0.7 million.
Dividend
Given the financial performance and position of the Group,
coupled with restrictions on the payment of dividends contained
within the refinancing agreement and the lack of distributable
reserves, the Board is not recommending the payment of a dividend
for 2020/21 (2020: GBPnil). The Board intends to recommence
dividend payments only when it becomes confident that a sustainable
and regular dividend can be re-introduced. Under the terms of the
restructuring agreement, the Group is not permitted to make a
dividend payment to shareholders up to the period ending in July
2023.
Alternative performance measures
In the analysis of the Group's financial performance, position,
operating results and cash flows, alternative performance measures
are presented to provide readers with additional information. The
principal measures presented are underlying measures of earnings
including underlying operating profit, underlying profit before
tax, underlying profit after tax, underlying EBITDA and underlying
earnings per share.
This results statement includes both statutory and adjusted
non-GAAP financial measures, the latter of which the Directors
believe better reflect the underlying performance of the business
and provides a more meaningful comparison of how the business is
managed and measured on a day-to-day basis. The Group's alternative
performance measures and KPIs are aligned to the Group's strategy
and together are used to measure the performance of the business
and form the basis of the performance measures for remuneration.
Underlying results exclude certain items because, if included,
these items could distort the understanding of the performance for
the year and the comparability between the periods. A
reconciliation of the Group's non-GAAP financial measures is shown
on pages 35 and 36.
We provide comparatives alongside all current year figures. The
term "underlying" is not defined under IFRS and may not be
comparable with similarly titled measures used by other
companies.
All profit and earnings per share figures relate to underlying
business performance (as defined above) unless otherwise stated. A
reconciliation of underlying measures to statutory measures is
provided below:
Underlying
GBPm Less exceptional continuing
(component numbers include rounding differences) Statutory items and Group
CTP operating profit 9.2 - 9.2
---------- ----------------- ------------
Aerospace operating profit 0.6 - 0.6
Central costs (0.4) (4.5) (4.9)
Group operating profit from continuing
operations 9.4 (4.5) 4.9
Group operating loss from discontinued
operations (0.1) 0.1 -
Group operating profit 9.3 (4.4) 4.9
Net finance expense (2.7) - (2.7)
Group profit before taxation 6.6 (4.4) 2.2
---------- ----------------- ------------
Taxation (0.5) - (0.5)
Profit on disposal of discontinued operations 1.3 (1.3) -
Group profit for the year 7.4 (5.7) 1.7
---------- ----------------- ------------
Basic earnings per share (pence) 10.1p n/a 2.4p
--------------------------------------------------- ---------- ----------------- ------------
The exceptional items comprise:
Continuing Discontinued
GBPm operations operations Group
Restructuring and rationalisation costs (2.0) (0.1) (2.1)
------------ ------------- ------
Gain in respect of retirement benefits 6.5 - 6.5
------------ ------------- ------
Profit on sale of LED Technologies business - 1.3 1.3
------------ ------------- ------
Total exceptional items 4.5 1.2 5.7
--------------------------------------------- ------------ ------------- ------
Post balance sheet events and going concern
Post balance sheet events
On 4 May 2021, a further GBP0.2 million was received by HSBC
from the Administrators of Wipac Ltd and has been applied as a
repayment against the Group's term loan. At 31 March 2021 no asset
has been recognised for this nor for further potential post balance
sheet proceeds which would also be used to repay the Group's term
loan. Management's best estimate of the contingent asset at 31
March 2021 in respect of these remaining potential proceeds is
GBP0.35 million, the receipt of the GBP0.2 million does not change
this.
At 31 March 2021, the Group has recognised GBP2.1 million ($2.9
million) in loans and borrowings in respect to a Paycheck
Protection Program loan. The loan was received from Commercial Bank
and Trust of Pennsylvania as a promissory note, underwritten by the
US Government Small Business Administration ("SBA"). On 5 May 2021,
CTP USA received confirmation of forgiveness of the loan by the
SBA, resulting in its conversion from a loan to a grant. The full
amount will be recognised in the income statement in the year
ending 31 March 2022.
Going concern
Cash flow and covenant forecasts have been prepared to cover the
twelve-month period from the date of signing these financial
statements taking into account the Group's available debt
facilities and the terms of the arrangements with the bank and the
pension scheme. These demonstrate that the Group has sufficient
headroom in terms of liquidity and covenant testing through the
forecast period.
Sensitivity testing has been carried out based on a number of
reasonably possible scenarios, taking into account the current view
of impacts of the continuing COVID-19 pandemic on the Group and
possible political uncertainty, including: the impact of change in
the US administration, Brexit and other possible overseas trading
issues.
Severe downside sensitivities modelled included a range of
scenarios modelling the financial effects of loss of business from
discrete sites, an overall fall in gross margin of 1% across the
Group, a fall in Group sales of 5% matched by a corresponding fall
in cost of sales of the same amount, the loss of COVID-related
sales from large customers, delays in the timing of commencement of
significant new medical projects, reduction in revenue from
specific customers, minimum wage increases and exchange risk. These
sensitivities attempt to incorporate the risks arising from
national and regional impacts of the global pandemic from local
lockdowns, impacts on manufacturing and supply chain and other
potential increases to direct and indirect costs. The Group has the
capacity to take mitigating actions to ensure that the Group
remains financially viable, including further reducing operating
expenditures as necessary.
On the basis of this forecast and sensitivity testing, the Board
has determined that it is reasonable to assume that the Group will
continue to operate within the facilities available to it and to
adhere to the covenant tests to which it is subject throughout the
twelve-month period from the date of signing the financial
statements and as such it has adopted the going concern assumption
in preparing the financial statements.
Phil White
Chief Financial Officer
30 June 2021
Consolidated income statement
for the year ended 31 March 2021
2021 2020
Notes GBP000 GBP000
--------------------------------------------- ------ -------- ---------
Continuing operations -
Revenue 4 107,564 110,506
Underlying operating profit 4,840 7,313
Exceptional items 6 4,490 (5,470)
Operating profit 4 9,330 1,843
Finance revenue 42 97
Finance expense (2,701) (2,485)
Profit / (loss) before tax 6,671 (545)
Income tax expense 8 (457) (1,355)
Profit / (loss) after tax but before
profit / (loss) on discontinued operations 6,214 (1,900)
Discontinued operations -
Profit / (loss) on discontinued operations,
net of tax 5 1,198 (9,509)
Profit / (loss) for the period 7,412 (11,409)
-------- ---------
Attributable to -
Equity holders of the Company 7,412 (11,409)
Non-controlling interests - -
7,412 (11,409)
-------- ---------
Earnings / (loss) per ordinary share 9
Basic - continuing operations 8.5 p (2.6) p
Basic - discontinued operations 1.6 p (13.0) p
-------- ---------
Basic 10.1 p (15.5) p
-------- ---------
Diluted - continuing operations 8.5 p (2.6) p
Diluted - discontinued operations 1.6 p (13.0) p
-------- ---------
Diluted 10.1 p (15.5) p
-------- ---------
Consolidated statement of comprehensive income
for the year ended 31 March 2021
2021 2020
GBP000 GBP000
----------------------------------------------- -------- ---------
Profit / (loss) for the period 7,412 (11,409)
Other comprehensive (expense) / income
Items that will not be reclassified to
the income statement
Remeasurement (losses) / gains on defined
benefit scheme (6,540) 7,805
Deferred tax arising - -
Total items that will not be reclassified
to the income statement (6,540) 7,805
Items that are or may in future be classified
to the income statement
Foreign exchange translation differences (2,939) 716
Net investment hedge 1,084 (549)
Deferred tax arising 137 (124)
Total items that are or may in future
be classified to the income statement (1,718) 43
Other comprehensive (expense) / income,
net of tax (8,258) 7,848
Total comprehensive expense for the
year (846) (3,561)
-------- ---------
Attributable to -
Equity holders of the Company (846) (3,561)
Non-controlling interests - -
Total comprehensive expense for the
period (846) (3,561)
-------- ---------
Consolidated statement of financial position
as at 31 March 2021
2021 2020
Notes GBP000 GBP000
------------------------------------- ------ -------- --------
Non-current assets
Intangible assets 21,848 22,880
Property, plant and equipment 43,218 40,395
Deferred tax assets 384 407
Trade and other receivables 112 114
Total non-current assets 65,562 63,796
-------- --------
Current assets
Inventories 12,821 14,201
Contract assets 2,898 1,424
Trade and other receivables 19,254 19,775
Cash and cash deposits 15,485 19,309
-------- --------
Total current assets 50,458 54,709
-------- --------
Total assets 116,020 118,505
-------- --------
Non-current liabilities
Loans and borrowings 12 37,997 3,862
Deferred tax liabilities 4,393 4,559
Contract liabilities 866 -
Retirement benefit obligations 13 37,275 37,620
Total non-current liabilities 80,531 46,041
-------- --------
Current liabilities
Loans and borrowings 12 5,084 42,804
Trade and other payables 17,016 18,420
Current tax liabilities 17 879
Contract liabilities 5,461 1,607
Provisions - 23
Total current liabilities 27,578 63,733
Total liabilities 108,109 109,774
-------- --------
Net assets 7,911 8,731
-------- --------
Equity
Ordinary share capital issued 14 3,671 3,671
Share premium 7,359 7,359
Translation reserve 5,333 7,051
Retained earnings (8,426) (9,324)
Total equity attributable to equity
holders of the Company 7,937 8,757
Non-controlling interests (26) (26)
Total equity 7,911 8,731
-------- --------
Approved by the Board of Directors and signed on its behalf
by
Nick Sanders Phil White
29 June 2021 29 June 2021
Consolidated statement of changes in equity for the year ended
31 March 2021
Attributable to equity holders of the
Company
-------- --------------------------------------------
Share Share Translation Retained Non-controlling Total
capital premium reserve earnings Total interests equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------- -------- ------------ --------- --------- ---------------- ---------
Balance at 1
April 2019 3,671 7,359 7,008 (5,745) 12,293 (26) 12,267
Loss for the
year - - - (11,409) (11,409) - (11,409)
Other
comprehensive
income / (loss)
Foreign
exchange
translation
differences - - 716 - 716 - 716
Net investment
hedge - - (549) - (549) - (549)
Remeasurement
gains on
defined
benefit scheme - - - 7,805 7,805 - 7,805
Taxation on
items above - - (124) - (124) - (124)
Total
comprehensive
income /
(loss)
for the period - - 43 (3,604) (3,561) - (3,561)
Transactions
with owners
recorded
directly in
equity
Share-based
payments - - - 25 25 - 25
Taxation on
items recorded
directly
in equity - - - - - - -
Balance at 31
March 2020 3,671 7,359 7,051 (9,324) 8,757 (26) 8,731
-------- -------- ------------ --------- --------- ---------------- ---------
Balance at 1
April 2020 3,671 7,359 7,051 (9,324) 8,757 (26) 8,731
Profit for the
year - - - 7,412 7,412 - 7,412
Other
comprehensive
income / (loss)
Foreign
exchange
translation
differences - - (2,939) - (2,939) - (2,939)
Net investment
hedge - - 1,084 - 1,084 - 1,084
Remeasurement
losses on
defined
benefit scheme - - - (6,540) (6,540) - (6,540)
Taxation on
items above - - 137 - 137 - 137
Total
comprehensive
income /
(loss)
for the period - - (1,718) 872 (846) - (846)
Transactions
with owners
recorded
directly in
equity
Share-based
payments - - - 26 26 - 26
Taxation on
items recorded
directly
in equity - - - - - - -
Balance at 31
March 2021 3,671 7,359 5,333 (8,426) 7,937 (26) 7,911
-------- -------- ------------ --------- --------- ---------------- ---------
Consolidated statement of cash flows
for the year ended 31 March 2021
2021 2020
Notes GBP000 GBP000
------------------------------------------------ ------ --------- ---------
Cash generated from operations 15 11,202 21,803
Interest paid (1,782) (1,568)
Tax paid (1,023) (933)
Net cash from operating activities 8,397 19,302
Cash flows from investing activities
Proceeds from sale of business, net of
cash disposed 1,250 5,456
Proceeds from sale of property, plant and
equipment 21 2,500
Interest received 42 104
Acquisition of business, net of cash acquired - (250)
Purchase of property, plant and equipment (7,180) (8,512)
Purchase of intangible assets - computer
software (139) (19)
Net cash used in investing activities (6,006) (721)
Cash flows from financing activities
Drawings on new facilities 38,697 -
Transaction costs associated with the issue
of debt (380) -
Repayment of borrowings excluding lease
liabilities (31,666) (9)
Repayment of lease liabilities (1,601) (3,122)
Net cash from / (used in) financing activities 5,050 (3,131)
Net increase in cash and cash equivalents 7,441 15,450
Cash and cash equivalents at beginning
of period 8,352 (7,038)
Effect of exchange rate fluctuations on
cash held (308) (60)
Cash and cash equivalents at end of period 15,485 8,352
--------- ---------
Cash and cash equivalents comprise -
Cash and cash deposits 15,485 19,309
Bank overdrafts - (10,957)
15,485 8,352
--------- ---------
Notes on the preliminary statement
1 Basis of preparation
Whilst the financial information included in this preliminary
statement has been prepared on the basis of the requirements of
IFRSs in issue, as adopted pursuant to Regulation (EC) No 1606/2002
as it applies in the European Union ("Adopted IFRSs") and effective
at 31 March 2021, this statement does not itself contain sufficient
information to comply with IFRS. The Group expects to publish full
consolidated financial statements on 26 July 2021.
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 March 2021 or
31 March 2020 but is derived from those accounts. Statutory
accounts for 2019/20 have been delivered to the registrar of
companies, and those for 2020/21 will be delivered in due course.
The auditor has reported on those accounts. Their report for
2020/21 was (i) unqualified and (ii) did not contain a statement
under section 498(2) or (3) of the Companies Act 2006. The
auditor's report for the accounts of 2019/20 was (i) unqualified
and (ii) did not contain a statement under section 498(2) or (3) of
the Companies Act 2006.
The financial statements are prepared on the going concern
basis.
Despite the challenges presented by the COVID-19 pandemic, Group
performance has enabled significant capital investment to be made
whilst retaining a stable financial position, with net debt
excluding lease liabilities as of 31 March 2021 falling to GBP20.5
million (2020: GBP22.1 million).
On 14th August 2020 Carclo plc concluded a restructuring with
the Company's main creditors being its bank, HSBC, and the pension
scheme to secure the continued support of those parties through to
July 2023.
The debt facilities made available to the Group comprised a term
loan of GBP34.5 million, of which GBP3.0 million will be amortised
by 30 September 2022, and a GBP3.5 million revolving credit
facility maturing on 31 July 2023. Repayments amounting to GBP1.6
million have been made in the period to 31 March 2021 (these are
not part of the GBP3 million due to be amortised by 30 September
2022). In accordance with the agreement, as repayments are made,
the term loan facility reduces first, meaning that, at 31 March
2021, the term loan facility available is GBP32.1 million (after
exchange variances). GBP3.5 million remains available on the
revolving credit facility.
A schedule of contributions has been agreed with the pension
trustees through to July 2023. Beyond 2023 a schedule of
contributions for GBP3.5 million annually is in place until 31
October 2040, but is reviewed and reconsidered between the Employer
and the trustees at each triennial actuarial valuation, the next
being after the results of the 31 March 2021 triennial valuation
are known.
The bank facilities are subject to four covenants to be tested
on a quarterly basis:
1. Underlying interest cover;
2. Net debt to underlying EBITDA;
3. Core subsidiary underlying EBITA; and
4. Core subsidiary revenue.
Core subsidiaries are defined as Carclo Technical Plastics Ltd;
Bruntons Aero Products Ltd; Carclo Technical Plastics (Brno) s.r.o;
CTP Carrera Inc and Jacottet Industrie SAS, with CTP Taicang Co.
Ltd and Carclo Technical Plastics Pvt Co Ltd being treated as
non-core for the purposes of these covenants. Based on our current
base case forecasts, these covenant tests are expected to be met
for all periods.
In addition, the Pension Scheme has the benefit of a fifth
covenant to be tested on 1 May each year up to and including 2023.
In the year to 31 March 2021 the test was met by the payment of the
agreed schedule of contributions.
In subsequent years the test requires any shortfall of pension
deficit recovery contributions when measured against PPF priority
drift (which is a measure of the increase in the UK Pension
Protection Fund's potential exposure to the Group's pension scheme
liabilities) to be met by a combination of cash payments to the
scheme plus a notional (non-cash) proportion of the increase in the
underlying value of the CTP and Aero businesses based on an EBITDA
multiple for those businesses which is to be determined
annually.
The Directors have reviewed cash flow and covenant forecasts to
cover the twelve month period from the date of signing these
financial statements taking into account the Group's available debt
facilities and the terms of the arrangements with the bank and the
pension scheme. These demonstrate that the Group has sufficient
headroom in terms of liquidity and covenant testing through the
forecast period.
The Directors have reviewed sensitivity testing based on a
number of reasonably possible scenarios, taking into account the
current view of impacts of the continuing COVID-19 pandemic on the
Group and possible political uncertainty, including the impact of
change in the US administration, Brexit and other possible overseas
trading issues.
Severe downside sensitivities modelled included a range of
scenarios modelling the financial effects of loss of business from
discrete sites, an overall fall in gross margin of 1% across the
Group, a fall in Group sales of 5% matched by a corresponding fall
in cost of sales of the same amount, the loss of COVID-related
sales from large customers, delays in the timing of commencement of
significant new medical projects, reduction in revenue from
specific customers, minimum wage increases and exchange risk. These
sensitivities attempt to incorporate the risks arising from
national and regional impacts of the global pandemic from local
lockdowns, impacts on manufacturing and supply chain and other
potential increases to direct and indirect costs. The Group has the
capacity to take mitigating actions to ensure that the Group
remains financially viable, including further reducing operating
expenditures as necessary.
On the basis of this forecast and sensitivity testing, the Board
has determined that it is reasonable to assume that the Group will
continue to operate within the facilities available to it and to
adhere to the covenant tests to which it is subject throughout the
twelve-month period from the date of signing the financial
statements and as such it has adopted the going concern assumption
in preparing the financial statements.
Directors' liability
Neither the Company nor the Directors accept any liability to
any person in relation to this report except to the extent that
such liability could arise under English law. Accordingly, any
liability to a person who has demonstrated reliance on any untrue
or mistaken statement or omission shall be determined in accordance
with section 90(A) of the Financial Services and Markets Act
2000.
Responsibility statement of the Directors in respect of the
annual report
The Directors at the date of this statement confirm that to the
best of their knowledge:
-- 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 or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the strategic report includes a fair review of the
development and performance of the business and the position of the
issuer and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
2. Accounting policies
The accounting policies set out in the last published financial
statements for the year to 31 March 2020 have been applied
consistently to all periods presented in this preliminary
statement, unless otherwise stated.
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 3.
Certain new standards, amendments and interpretations to
existing standards have been published that are mandatory for the
Group's accounting period beginning on or after 1 April 2020. The
following new standards and amendments to standards are mandatory
and have been adopted for the first time for the financial year
beginning 1 April 2020:
Amendments to References to Conceptual Framework in IFRS
Standards (effective date 1 January 2020);
Amendments to IFRS 3: Definition of a Business (effective date 1
January 2020);
Amendments to IAS 1 and IAS 8: Definition of Material (effective
date 1 January 2020); and
IFRS 9 Financial Instruments: Recognition and Measurement and
IFRS 7 Financial Instruments: Disclosures: Amendments arising from
the Interest Rate Benchmark Reform - Phase 1 (effective 1 January
2020).
These standards have not had a material impact on the
Consolidated Financial Statements.
Certain new standards, amendments and interpretations to
existing standards have been published that are mandatory for the
Group's accounting period beginning on or after 1 April 2021. The
Group has elected not to adopt early these standards which are
described below.
IFRS 16 Leases: Amendments in relation to COVID-19 related rent
concessions (effective date 1 June 2020);
IFRS 4 Insurance Contracts: Amendments in relation to the
temporary exemption from applying IFRS 9 (effective date 25 June
2020);
IFRS 9 Financial Instruments, IAS 39 Financial Instruments:
Recognition and Measurement and IFRS 7 Financial Instruments:
Disclosures, IFRS 4 Insurance Contracts and IFRS 16 Leases:
Amendments arising from the Interest Rate Benchmark Reform - Phase
2 (effective date 1 January 2021);
IAS 16 Property, Plant and Equipment: Amendments in relation to
proceeds before intended use (effective date 1 January 2022);
IAS 37 Provisions, Contingent Liabilities and Contingent Assets:
Amendments in relation to the cost of fulfilling a contract when
assessing onerous contracts (effective date 1 January 2022);
IFRS 3 Business Combinations: Amendments to update references to
the Conceptual Framework (effective date 1 January 2022);
Annual Improvements to IFRSs (2018-2020 cycle) (effective date 1
January 2022);
IAS 1 Presentation of Financial Statements: Amendments in
relation to the classification of liabilities as current or
non-current (effective date 1 January 2023);
IAS 1 Presentation of Financial Statements and IFRS Practice
Statement 2 Making Material Judgements: Amendments in relation to
the disclosure of accounting policies (effective date 1 January
2023);
IAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors: Amendments in relation to the definition of accounting
estimates (effective date 1 January 2023);
IFRS 17 Insurance Contracts (effective date 1 January 2023);
and
Amendments to IFRS 17 Insurance Contracts (effective date 1
January 2023).
The above are not expected to have a material impact on the
financial statements.
There are no other IFRS or IFRIC interpretations that are not
yet effective that would be expected to have a material impact on
the Group.
3 Accounting estimates and judgements
The preparation of the financial statements in conformity with
IFRS requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses.
The estimates and assumptions are based on historical experience
and various other factors that are believed to be reasonable under
the circumstances. These estimates and assumptions form the basis
for making judgements about the carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of revision and future periods
if the revision affects both current and future periods.
The following are the critical judgements and key sources of
estimation uncertainty that the Directors have made in the process
of applying the Group's accounting policies and that have the most
significant effect on the amounts recognised in the financial
statements. Management has discussed these with the Audit
Committee. These should be read in conjunction with the significant
accounting policies provided in the Annual Report and Accounts.
Going concern
Note 1 contains information about the preparation of these
financial statements on a going concern basis.
Key judgements -
Management has exercised judgement over the likelihood of the
Group being able to continue to operate within its available
facilities and in accordance with its covenants for the twelve
months from the date of signing these financial statements. This
determines whether the Group should operate the going concern basis
of preparation for these financial statements.
Impairment of assets
Note 11 contains information about management's estimates of the
recoverable amount of cash generating units and their risk
factors.
Key judgements -
Management has exercised judgement over the underlying
assumptions within the valuation models. These are key factors in
their assessment of whether there is any impairment in related
goodwill or other assets. Management has also exercised judgement
to determine the Group's cash--generating units to which goodwill
is allocated and against which impairment testing is performed.
Key sources of estimation uncertainty -
The Group tests whether goodwill has suffered any impairment and
considers whether there is any indication of impairment on an
annual basis. Goodwill at 31 March 2021 amounts to GBP21.1 million
(2020: GBP22.0 million), as set out in more detail in note 11.
The recoverable amounts may be based on either value in use
calculations or fair value less costs of disposal calculations. The
former requires the estimation of future cash flows and the choice
of a discount rate in order to calculate the present value of the
future cash flows. The latter method requires the estimation of
fair value.
Details of the sensitivity of assumptions is included in note
11.
Pension assumptions
Note 13 contains information about management's estimate of the
net liability for defined benefit obligations and their risk
factors. The pension liability at 31 March 2021 amounts to GBP37.3
million (2020: GBP37.6 million).
Key sources of estimation uncertainty -
The value of the defined benefit pension plan obligation is
determined by long-term actuarial assumptions. These assumptions
include discount rates, inflation rates and mortality rates.
Differences arising from actual experience or future changes in
assumptions will be reflected in the Group's consolidated statement
of comprehensive income. The Group exercises judgement in
determining the assumptions to be adopted after discussion with a
qualified actuary. Details of the key actuarial assumptions used
and of the sensitivity of these assumptions are included within
Note 13.
A Bridging Pension Option ("BPO") was introduced in the year to
31 March 2021 with a rule change and member announcement creating a
legal and constructive obligation and thus constituting a plan
amendment. Having taken actuarial advice, management has exercised
judgement that 40% of members will take the BPO. This estimate
impacts on the past service credit recognised as an exceptional
item in the income statement.
Lease break options
The Annual Report and Accounts contain information about lease
break options.
Key judgement -
Management has applied judgement when determining the expected
certainty that a break option within a lease will be exercised.
Revenue recognition
As revenue from tooling contracts is recognised over time, the
amount of revenue recognised in a reporting period depends on the
extent to which the performance obligations have been
satisfied.
Key judgements -
The revenue recognised on certain contracts in the continuing
Technical Plastics segment required management to use judgement to
apportion contract revenue to the tooling performance obligations.
The revenue recognised on premium automotive lighting tooling
contracts in the prior year discontinued operations required
management to use judgement to apportion contract revenue to
milestones and in certain cases to estimate when milestones had
been achieved.
In the current year, management of the Technical Plastics
segment has had to apply judgement in determining, to which
contract a significant modification relates and therefore against
which performance objectives the increase in revenue should be
allocated. Management determined that it relates to the tooling
contract and as such the additional revenue has been recognised in
part this year, with the expectation that the balance will be
recognised in the year to 31 March 2022.
Key sources of estimation uncertainty -
Revenue recognised on certain contracts in the continuing
Technical Plastics segment required management to estimate the
remaining costs to complete the tooling performance obligation in
order to determine the percentage of completion and revenue to
recognise in respect of those performance obligations.
In the current year, management of the Technical Plastics
division have been required to estimate the likelihood of a
variable consideration component in respect to a large tooling
contract becoming payable. Management determined that it was not
highly probable that a proportion of the revenue will not reverse
and therefore at 31 March 2021, none of the GBP0.7 million has been
recognised in revenue. If all the required milestones are met, then
this revenue will be recognised in the year ended 31 March
2022.
Recognition of deferred tax assets
Information about the deferred tax assets recognised in the
consolidated statement of financial position is included in the
Annual Report and Accounts.
Key judgement -
Management has exercised judgement over the level of future
taxable profits in the UK against which to relieve the Group's
deferred tax assets. On the basis of this judgement no UK deferred
tax assets have been recognised at the period end.
Classification of exceptional items
Note 6 contains information about items classified as
exceptional.
Key judgements -
Management has exercised judgement over whether items are
exceptional as set out in the Group's accounting policies within
the Annual Report and Accounts.
Government grants
As set out in note 7, GBP2.1 million ($2.9 million) of
government COVID-19 support loans have been classified within
interest bearing loans and borrowings.
Key judgements -
Management has made a judgement that there was insufficient
certainty as to whether conditions attached to GBP2.1 million of
government loans in support of COVID-19 interruption had been met
at 31 March 2021 and therefore the proceeds have been presented as
loans and borrowings in the consolidated statement of financial
position and no associated government grant income has been
recognised during the period. Subsequent to the balance sheet date,
the Group received confirmation of loan forgiveness and conversion
of the funding from loan to grant was judged to have occurred at
that point, after the balance sheet date. See note 16 for more
information.
4 Segment reporting
During the period the Group was organised into two, separately
managed, business segments - Technical Plastics and Aerospace.
These are the segments for which summarised management information
is presented to the Group's chief operating decision maker
(comprising the Main Board and Group Executive Committee).
The Technical Plastics segment supplies fine tolerance,
injection moulded plastic components, which are used in medical,
diagnostics, optical and electronic products. This business
operates internationally in a fast growing and dynamic market
underpinned by rapid technological development. This segment
includes the Optics business formerly included within the LED
Technologies segment.
The Aerospace segment supplies systems to the manufacturing and
aerospace industries.
The Central segment relates to central costs, non-trading
companies and eliminations of intra-group revenue.
The LED Technologies segment presented as a discontinued
operation was a leader in the development of high-power LED
lighting for the premium automotive industry and was disposed of in
the year to 31 March 2020.
Transfer pricing between business segments is set on an arm's
length basis. Segmental revenues and results include transfers
between business segments. Those transfers are eliminated on
consolidation.
Analysis by business segment
The segment results for the year ended 31 March 2021 were as
follows -
Technical Total LED
Plastics Aerospace Central (continuing Technologies
(continuing) (continuing) (continuing) operations) (discontinued) Group total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- ------------- ------------- ------------- ------------ --------------- ------------
Consolidated
income
statement
Total revenue 102,473 5,091 - 107,564 - 107,564
Less
inter-segment
revenue - - - - - -
External
revenue 102,473 5,091 - 107,564 - 107,564
Expenses (93,256) (4,541) (4,927) (102,724) - (102,724)
Underlying
operating
profit
/ (loss) 9,217 550 (4,927) 4,840 - 4,840
Exceptional
operating
items - - 4,490 4,490 (52) 4,438
Operating
profit /
(loss) 9,217 550 (437) 9,330 (52) 9,278
------------- ------------- -------------
Net finance
expense (2,659) - (2,659)
Income tax
expense (457) - (457)
------------ ---------------
Profit from
operating
activities
after tax 6,214 (52) 6,162
Profit on
disposal of
discontinued
operations,
net of tax -
see note 5 - 1,250 1,250
Profit for the
period 6,214 1,198 7,412
------------ --------------- ------------
Consolidated
statement of
financial
position
Segment assets 109,217 6,073 730 116,020 - 116,020
Segment
liabilities (33,951) (832) (73,326) (108,109) - (108,109)
Net assets 75,266 5,241 (72,596) 7,911 - 7,911
------------- ------------- ------------- ------------ --------------- ------------
Other segmental information
Capital expenditure on property,
plant and equipment 10,128 208 38 10,374 - 10,374
Capital expenditure on computer
software 3 - 136 139 - 139
Depreciation 5,492 250 32 5,774 - 5,774
Impairment of property, plant
and equipment - (13) - (13) - (13)
Amortisation of computer software 57 - 96 153 - 153
Amortisation of other intangibles 53 - - 53 - 53
The segment results for the year ended 31 March 2020 were as
follows -
Technical Total LED
Plastics Aerospace Central (continuing Technologies Group
(continuing) (continuing) (continuing) operations) (discontinued) total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- ------------- ------------- ------------- ------------ --------------- ----------
Consolidated
income statement
Total revenue 105,169 7,453 (2,116) 110,506 35,782 146,288
Less
inter-segment
revenue (2,116) - 2,116 - - -
Total external
revenue 103,053 7,453 - 110,506 35,782 146,288
Expenses (93,800) (5,800) (3,593) (103,193) (38,730) (141,923)
Underlying
operating
profit
/ (loss) 9,253 1,653 (3,593) 7,313 (2,948) 4,365
Exceptional
items (10) (1,440) (4,020) (5,470) (3,309) (8,779)
---------------
Operating
profit /
(loss) 9,243 213 (7,613) 1,843 (6,257) (4,414)
------------- ------------- -------------
Net finance
expense (2,388) (197) (2,585)
Income tax
expense (1,355) (94) (1,449)
------------ ---------------
Loss from
operating
activities
after tax (1,900) (6,548) (8,448)
Loss on
disposal of
discontinued
operations,
net of tax - (2,962) (2,962)
Loss for the
period (1,900) (9,510) (11,410)
------------ --------------- ----------
Consolidated
statement
of financial
position
Segment assets 101,005 6,287 11,213 118,505 - 118,505
Segment
liabilities (27,207) (1,321) (81,246) (109,774) - (109,774)
Net assets 73,798 4,966 (70,033) 8,731 - 8,731
------------- ------------- ------------- ------------ --------------- ----------
Other segmental information
Capital expenditure on property,
plant and equipment 7,066 166 66 7,298 4,791 12,089
Capital expenditure on computer
software 19 - - 19 - 19
Depreciation 5,675 270 6 5,951 814 6,765
Impairment of property, plant
and equipment - - - - 1,501 1,501
Amortisation of computer software 19 - 95 114 - 114
Amortisation of other intangibles 58 - - 58 - 58
Impairment of goodwill - 1,405 - 1,405 - 1,405
The Group's Aylesbury-based Optics business ("Optics") operated
historically and until 20 December 2019 within the Wipac Limited
legal entity, but with its business closely related to the Group's
Technical Plastics segment. Immediately following Administrators
being appointed to Wipac Limited (see note 5) the Group acquired
the business and assets, other than trade debtors, related to
Optics. Therefore, the Optics business is shown as part of
continuing operations within Technical Plastics segment.
Analysis by geographical segment
The business operates in three main geographical regions - the
United Kingdom, North America and in lower-cost regions including
the Czech Republic, China and India, and the geographical analysis
was as follows:
Expenditure on tangible
fixed assets and
External revenue Net segment assets computer software
------------------- --------------------- --------------------------
2021 2020 2021 2020 2021 2020
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- --------- -------- ---------- --------- ------------ ------------
United Kingdom 12,413 39,555 (41,577) (42,180) 6,006 10,353
North America 50,814 47,736 25,173 26,143 3,720 1,214
Rest of world 44,337 58,997 24,315 24,768 787 541
107,564 146,288 7,911 8,731 10,513 12,108
--------- -------- ---------- --------- ------------ ------------
The analysis of segment revenue represents revenue from external
customers based upon the location of the customer.
The analysis of segment assets and capital expenditure is based
upon the location of the assets.
The material components of the Central segment assets and
liabilities are retirement benefit obligation net liabilities of
GBP37.275 million (2020 - net liabilities of GBP37.620 million),
and net borrowings of GBP34.017 million (2020 - GBP31.458
million).
One Technical Plastics customer accounted for 24.5% (2020 -
23.7%) and another for 10.4% (2020 - 7.3%) of Group revenues from
continuing operations and similar proportions of trade receivables.
No other customer accounted for more than 10.0% of revenues from
continuing operations in the year.
Deferred tax assets by geographical location are as follows,
United Kingdom GBPnil (2020 - GBPnil), North America GBP0.277
million (2020 - GBP0.268 million), rest of world GBP0.107 million
(2020 - GBP0.139 million).
Total non-current assets by geographical location are as
follows, United Kingdom GBP23.096 million (2020 - GBP20.485
million), North America GBP23.935 million (2020 - GBP23.831
million), Rest of world GBP18.147 million (2020 - GBP18.959
million).
5 Discontinued operation
The LED Technologies segment, comprised entirely of the two
Wipac businesses which operated out of the UK and the Czech
Republic, is presented as discontinued in the comparative period.
Whilst there were no new discontinued operations in the year ended
31 March 2021, on 18 November 2020 and on 5 February 2021, proceeds
of GBP0.5 million and GBP0.75 million respectively from the
Administrators of Wipac Ltd were received by the Group's lending
bank and used to reduce the balance on the Group's debt facility.
No asset was recognised in the results for the year to 31 March
2020 for potential post balance sheet proceeds and such, GBP1.25
million has been recognised as exceptional profit on disposal of
discontinued operations in the current year net of GBP0.1 million
of associated costs.
6 Exceptional items
2021 2020
GBP000 GBP000
---------------------------------------------- -------- ---------
Continuing operations
Rationalisation costs (1,968) (4,065)
Credit in respect of retirement benefits -
see note 13 6,458 -
Impairment of Aerospace - see note 11 - (1,405)
4,490 (5,470)
Discontinued operations
Rationalisation costs (52) (1,808)
Impairment of LED Technologies - see note 11 - (1,501)
Profit / (loss) on disposal of discontinued
operations - see note 5 1,250 (2,962)
1,198 (6,271)
5,688 (11,741)
-------- ---------
Rationalisation costs from continuing operations during the
period relate to the restructuring and refinancing of the Group.
These include GBP1.3 million in respect to legal and professional
costs (2020 - GBP3.0 million), GBP0.1 million for consultants' fees
(2020 - GBP0.3 million), GBP0.5 million exceptional pension scheme
administration costs (2020 - GBP0.4 million) and GBPnil in respect
of bank fees (2020 - GBP0.3 million).
The gain in respect to retirement benefits is a past service
credit for the impact of introducing a Bridging Pension Option,
partly off-set by a past service cost relating to GMP equalisation.
See note 13 for more information.
The profit on disposal of discontinued operations of GBP1.3
million is proceeds received in the current year from the
administrators of Wipac Limited. The LED Technologies segment which
was classified as discontinued in the prior year was made up of the
two Wipac businesses.
Rationalisation costs on discontinued operations during the
prior period related to the restructuring of the Wipac businesses;
GBP0.8 million of this is in respect of the cost of exiting medium
volume automotive lighting contracts, GBP1.0 million is in respect
of legal and professional fees.
7 Government support for COVID-19
During the period the Group has utilised governmental support in
its operating locations to mitigate the impact of COVID-19. Support
has been in the form of grants, loans and deferral of tax
payments.
2021 2020
GBP000 GBP000
--------------------------------------------- ------- -------
The governmental support utilised during the
period was -
Grants - used to off-set labour and variable
costs, included within operating expenses 747 -
Loans - presented in loans and borrowings 2,104 -
Payment deferrals - presented in trade and
other payables 68 -
In April 2020, the Group received a loan under the Paycheck
Protection Program, underwritten by the US Government in support of
COVID-19 for $2.9 million, presented as loans above at 31 March
2021. Subsequent to the balance sheet date, notice of loan
forgiveness has been received, resulting in conversion of the
proceeds from a loan to a grant. At 31 March 2021 there was
insufficient certainty as to whether the conditions attached to the
loan conversion had been met and as such the proceeds have been
presented within loans and borrowings and no associated government
grant income has been recognised in the results for the year ended
31 March 2021.
8 Income tax expense
2021 2020
GBP000 GBP000
--------------------------------------------------- ------- --------
The expense recognised in the consolidated
income statement comprises-
United Kingdom corporation tax
Corporation tax on losses for the current year 308 -
Adjustments for prior years - 265
Overseas taxation
Current tax (564) (1,350)
Adjustments for prior years (37) -
Total current tax net expense (293) (1,085)
------- --------
Deferred tax expense
Origination and reversal of temporary differences
-
Deferred tax (80) (364)
Adjustments for prior years (84) -
Total deferred tax charge (164) (364)
------- --------
Total income tax expense recognised in the
consolidated income statement (457) (1,449)
------- --------
Reconciliation of tax expense for the year -
The tax assessed for the year is lower (2020 - lower) than the
standard rate of corporation tax in the UK. The differences are
explained as follows -
2021 2020
GBP000 % GBP000 %
------------------------------------ ------- ------ -------- -------
Profit / (loss) before tax 7,869 (9,960)
------- --------
Income tax using standard rate
of UK corporation tax of 19%
(2020 - 19%) 1,495 19.0 (1,893) 19.0
Other items not deductible
for tax purposes 99 1.3 2,768 (27.8)
R&D tax relief (26) (0.3) - -
Losses attributable to Wipac - - 3,311 (33.2)
Income not taxable (456) (5.8) (1,774) 17.8
Adjustments in respect of overseas
tax rates 62 0.8 286 (2.9)
Release of tax provisions (308) (3.9) - -
Other temporary differences (650) (8.3) (1,184) 11.9
Adjustment to current tax in
respect of prior periods (UK
and overseas) 37 0.5 (265) 2.7
Adjustments to deferred tax
in respect of prior periods
(UK and overseas) 84 1.1 - -
Foreign taxes expensed in the
UK 120 1.5 200 (2.0)
Total income tax expense 457 5.8 1,449 (14.5)
------- ------ -------- -------
A net tax credit of GBPnil (2020 charge: GBP0.013 million) has
been classified as exceptional items, in relation to non-UK
rationalisation and restructuring costs.
A net tax charge of GBPnil (2020 charge: GBP0.094 million) has
been recognised on discontinued operations.
Tax on items charged outside of the consolidated income
statement -
2021 2020
GBP000 GBP000
------------------------------------------------ ------- -------
Recognised in other comprehensive income -
Foreign exchange movements (137) 124
Total income tax (credited) / charged to other
comprehensive income (137) 124
------- -------
9 Earnings per share
The calculation of basic earnings per share is based on the
profit / (loss) attributable to equity holders of the parent
Company divided by the weighted average number of ordinary shares
outstanding during the year.
The calculation of diluted earnings per share is based on the
profit / (loss) attributable to equity holders of the parent
Company divided by the weighted average number of ordinary shares
outstanding during the year (adjusted for dilutive options).
The following details the result and average number of shares
used in calculating the basic and diluted earnings per share -
2021 2020
GBP000 GBP000
------------------------------------------------------- ------- ---------
Profit / (loss) after tax but before profit
/ (loss) on discontinued operations 6,214 (1,900)
Loss attributable to non-controlling interests - -
Profit / (loss) attributable to ordinary shareholders
from continuing operations 6,214 (1,900)
Profit / (loss) on discontinued operations,
net of tax 1,198 (9,509)
Profit / (loss) after tax, attributable to
equity holders of the parent 7,412 (11,409)
------- ---------
2021 2020
Shares Shares
-------------------------------------------- ----------- -----------
Weighted average number of ordinary shares
in the year 73,419,193 73,419,193
Effect of share options in issue 15,974 -
Weighted average number of ordinary shares
(diluted) in the year 73,435,167 73,419,193
----------- -----------
In addition to the above, the Company also calculates an
earnings per share based on underlying profit as the Board believes
this provides a more useful comparison of business trends and
performance. Underlying profit is defined as profit before
impairments, rationalisation costs, one-off retirement benefit
effects, exceptional bad debts, business closure costs, litigation
costs, other one-off costs and the impact of property and business
disposals, net of attributable taxes.
The following table reconcilesthe Group's profit / (loss) to
underlying profit used in the numerator in calculating underlying
earnings per share:
2021 2020
GBP000 GBP000
------------------------------------------------------- -------- ---------
Profit/(loss) after tax, attributable to equity
holders of the parent 7,412 (11,409)
Continuing operations:
Exceptional - rationalisation and restructuring
costs, net of tax 1,968 4,052
Exceptional - gain in respect of retirement
benefits, net of tax (6,458) -
Exceptional - impairment of Aerospace net of
tax - 1,405
Discontinued operations:
Exceptional - rationalisation and restructuring
costs, net of tax 52 1,807
Exceptional - impairment of LED Technologies,
net of tax - 1,501
(Gain) / loss on disposal of discontinued operations,
net of tax (1,250) 2,962
Underlying profit attributable to equity holders
of the parent 1,724 318
-------- ---------
Underlying operating profit - continuing operations 4,840 7,313
Finance revenue - continuing operations 42 97
Finance expense - continuing operations (2,701) (2,485)
Income tax expense - continuing operations (457) (1,355)
Underlying profit attributable to equity holders
of the parent - continuing operations 1,724 3,570
-------- ---------
The following table summarises the earnings per share figures
based on the above data -
2021 2020
Pence Pence
------------------------------------------------------ ------ -------
Basic earnings / (loss) per share - continuing
operations 8.5 (2.6)
Basic earnings / (loss) per share - discontinued
operations 1.6 (13.0)
Basic earnings / (loss) per share 10.1 (15.5)
------ -------
Diluted earnings / (loss) per share - continuing
operations 8.5 (2.6)
Diluted earnings / (loss) per share - discontinued
operations 1.6 (13.0)
Diluted earnings / (loss) per share 10.1 (15.5)
------ -------
Underlying earnings per share - basic - continuing
operations 2.4 4.9
Underlying loss per share - basic - discontinued
operations - (4.5)
Underlying earnings per share - basic 2.4 0.4
------ -------
Underlying earnings per share - diluted - continuing
operations 2.4 4.9
Underlying loss per share - diluted - discontinued
operations - (4.5)
Underlying earnings per share - diluted 2.4 0.4
------ -------
10 Dividends paid and proposed
The directors are not proposing a final dividend for the year
ended 31 March 2021 (2020: GBPnil). Under the terms of the
restructuring agreement, the Group is not permitted to make a
dividend payment to shareholders up to the period ending in July
2023.
11 Impairment of assets
Impairment tests for cash generating units containing
goodwill
Goodwill acquired in a business combination is allocated at
acquisition to the cash generating units ("CGUs") that are expected
to benefit from that business combination. The carrying amount of
goodwill is allocated to the Group's principal CGUs, being the
operating segments described in the operating segment descriptions
in note 4.
The goodwill relating to the Aerospace cash generating unit was
fully impaired in the year ended 31 March 2020, with an impairment
charge of GBP1.405 million recognised. As such, the carrying value
of goodwill at 31 March 2021 and 31 March 2020 is allocated wholly
to the Technical Plastics cash generating unit as follows:.
2021 2020
GBP000 GBP000
-------------------- ------- -------
Technical Plastics 21,065 21,962
21,065 21,962
------- -------
At 31 March 2021, the impairment review of the Technical
Plastics cash generating unit was based on a calculation of value
in use. This is a change from the prior year end when fair value
less costs of disposal "FVLCD" was used. In the year to 31 March
2020, FVLCD had already been calculated and considered by
management as part of the restructuring analysis underpinning the
financing agreements and therefore it made sense to use this method
to calculate the recoverable amount. The same exercise has not been
undertaken this year, however, for completeness, management have
used the multiples calculated by the third-party advisor in the
prior year and applied them to the current year EBITDA forecasts in
order to estimate FVLCD. The result produces the same answer, that
there is no impairment of goodwill.
The value in use calculations use cash flow projections based
upon financial budgets approved by management covering a three-year
period. Cash flows beyond the three-year period are extrapolated
using estimated growth rates of between 1.5% and 4.6% depending
upon the market served.
The cash flows were discounted at pre-tax rates in the range
4.89% - 8.37%. These rates are calculated and reviewed annually.
Changes in income and expenditure are based on expectations of
future changes in the market. Sensitivity testing of the
recoverable amount to reasonably possible changes in key
assumptions has been performed, including changes in the discount
rate and changes in forecast cash flows.
Subsequent to the balance sheet date the CGU has been trading
ahead of its plan; however, with all other assumptions being
unchanged, a 7.75% increase in the discount rate increasing the
range to 12.64% - 16.12%, or a 47% decrease in underlying EBIT
would reduce the headroom on the Technical Plastics CGU to GBPnil.
Should the discount rate increase further than this or the
profitability decrease further, then an impairment of the goodwill
would be likely.
Sensitivity testing of the recoverable amount at prior year
(FVLCD), demonstrated that a reduction in the earnings multiple of
1.5% applied to historical earnings would reduce the headroom to
GBPnil.
Impairment tests for cash generating units where there is an
indication of impairment
The impact of the global pandemic on the Aerospace segment as a
result of the downturn in air travel has been particularly hard,
and the adverse effect on the division's customer base is deemed by
management to be an indication of impairment. At 31 March 2021,
management have calculated the value in use to support the
recoverable amount of the Aerospace cash generating unit's net
assets. The goodwill allocated to this segment was impaired in the
prior year and as a result any impairment would be allocated
primarily to the segment's fixed assets.
The value in use calculation uses cash flow projections based
upon financial budgets approved by management covering a three-year
period. At 31 March 2021, management believe that the recoverable
amount of the Aerospace CGU supports the carrying value of the net
assets and therefore there is no impairment. Management have
applied judgement in these calculations, that air travel volumes
return in the medium term, and that the business's profitability
improves, as this is the basis upon which the budget has been
prepared.
Subsequent to the balance sheet date, the CGU has been trading
ahead of its plan; however with all other assumptions being
unchanged, a 12.5% increase in the discount rate or a 47% decrease
in underlying EBIT would reduce the headroom on the Aerospace CGU
to GBPnil. Should the discount rate increase further than this or
the profitability decrease further, then an impairment of the fixed
assets would be likely.
In respect to the prior year, an impairment review at 30
September 2019 identified an impairment of GBP1.501 million, which
was recognised on plant and equipment in respect of the LED
Technologies operating segment. This was presented within
exceptional items on discontinued operations. The LED Technologies
segment was disposed of during the year ended 31 March 2020.
12 Loans and borrowings
Reconciliation of movements of liabilities to cash flows arising
from financing activities:
Bank overdrafts Government
used for COVID-19 Revolving
cash management Term support credit Lease Other
purposes loan loan facility liabilities loans Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31 March
2019 17,368 - - 29,893 7,193 26 54,480
----------------- -------- ----------- ---------- ------------- -------- ---------
Changes from financing
cash flows
----------------- -------- ----------- ---------- ------------- -------- ---------
Repayment of other
loan facilities - - - - - (9) (9)
----------------- -------- ----------- ---------- ------------- -------- ---------
Repayment of finance
leases - - - - (3,122) (3,122)
----------------- -------- ----------- ---------- ------------- -------- ---------
- - - - (3,122) (9) (3,131)
----------------- -------- ----------- ---------- ------------- -------- ---------
Effect of changes
in foreign exchange
rates 54 - - 549 - - 603
----------------- -------- ----------- ---------- ------------- -------- ---------
Liability-related
other changes
----------------- -------- ----------- ---------- ------------- -------- ---------
Changes in bank
overdraft (7,746) - - - - - (7,746)
----------------- -------- ----------- ---------- ------------- -------- ---------
Disposal of business
(see note 5) (183) - - - (1,481) - (1,664)
----------------- -------- ----------- ---------- ------------- -------- ---------
New lease liabilities - - - - 2,660 - 2,660
----------------- -------- ----------- ---------- ------------- -------- ---------
Interest expense 1,568 - - - - - 1,568
----------------- -------- ----------- ---------- ------------- -------- ---------
Interest receivable (104) - - - - - (104)
----------------- -------- ----------- ---------- ------------- -------- ---------
(6,465) - - - 1,179 - (5,286)
----------------- -------- ----------- ---------- ------------- -------- ---------
Equity-related
other changes - - - - - - -
----------------- -------- ----------- ---------- ------------- -------- ---------
Balance at 31 March
2020 10,957 - - 30,442 5,250 17 46,666
----------------- -------- ----------- ---------- ------------- -------- ---------
Changes from financing
cash flows
----------------- -------- ----------- ---------- ------------- -------- ---------
Drawings on new
facilities - 34,354 2,243 2,000 - 100 38,697
----------------- -------- ----------- ---------- ------------- -------- ---------
Transaction costs
associated with
the issue of debt - (380) - - - - (380)
----------------- -------- ----------- ---------- ------------- -------- ---------
Repayment of borrowings - (1,589) - (30,071) (1,601) (6) (33,267)
----------------- -------- ----------- ---------- ------------- -------- ---------
32,385 2,243 (28,071) (1,601) 94 5,050
----------------- -------- ----------- ---------- ------------- -------- ---------
Effect of changes
in foreign exchange
rates - (657) (139) (371) (215) (1) (1,383)
----------------- -------- ----------- ---------- ------------- -------- ---------
Liability-related
other changes
----------------- -------- ----------- ---------- ------------- -------- ---------
Changes in bank
overdraft 2,184 - - - - - 2,184
----------------- -------- ----------- ---------- ------------- -------- ---------
Drawings on new
facilities - - - - 3,769 - 3,769
----------------- -------- ----------- ---------- ------------- -------- ---------
Termination of
facilities (13,193) - - - (148) - (13,341)
----------------- -------- ----------- ---------- ------------- -------- ---------
Interest expense 61 84 - - - - 145
----------------- -------- ----------- ---------- ------------- -------- ---------
Interest receivable (9) - - - - - (9)
----------------- -------- ----------- ---------- ------------- -------- ---------
(10,957) 84 - - 3,621 - (7,252)
----------------- -------- ----------- ---------- ------------- -------- ---------
Equity-related
other changes - - - - - - -
----------------- -------- ----------- ---------- ------------- -------- ---------
Balance at 31 March
2021 - 31,812 2,104 2,000 7,055 110 43,081
----------------- -------- ----------- ---------- ------------- -------- ---------
13 Retirement benefit obligations
The Group operates a defined benefit UK pension scheme which
provides pensions based on service and final pay. Outside of the
UK, retirement benefits are determined according to local practice
and funded accordingly.
In the UK, Carclo plc sponsors the Carclo Group Pension Scheme
(the "Scheme"), with a funded defined benefit pension scheme which
provides defined benefits for some of its members. This is a
legally separate, trustee-administered fund holding the Scheme's
assets to meet long-term pension liabilities for some 2,735 current
and past employees as at 31 March 2021.
The trustees of the Scheme are required to act in the best
interest of the Scheme's beneficiaries. The appointment of the
trustees is determined by the Scheme's trust documentation. It is
policy that one-third of all trustees should be nominated by the
members. The trustees currently comprise two Company-nominated
trustees (of which one is an independent professional trustee, and
one is the independent professional Chairperson) as well as two
member-nominated trustees. The trustees are also responsible for
the investment of the Scheme's assets.
The Scheme provides pensions and lump sums to members on
retirement and to their dependants on death. During the year to 31
March 2021, the Scheme introduced the Bridging Pension Option
("BPO"), see below for further details. The level of retirement
benefit is principally based on final pensionable salary prior to
leaving active service and is linked to changes in inflation up to
retirement. The defined benefit section is closed to new entrants
who now have the option of entering into the defined contribution
section of the Scheme and the Group has elected to cease future
accrual for existing members of the defined benefit section such
that members who have not yet retired are entitled to a deferred
pension.
The Company currently pays contributions to the Scheme as
determined by regular actuarial valuations. The trustees are
required to use prudent assumptions to value the defined benefit
liabilities and costs of the Scheme whereas the accounting
assumptions must be best estimates.
The Scheme is subject to the funding legislation, which came
into force on 30 December 2005, outlined in the Pensions Act 2004.
This, together with documents issued by the Pensions Regulator, and
Guidance Notes adopted by the Financial Reporting Council, set out
the framework for funding defined benefit occupational pension
plans in the UK.
A full actuarial valuation was carried out as at 31 March 2018
in accordance with the scheme funding requirements of the Pensions
Act 2004. The funding of the Scheme is agreed between the Group and
the trustees in line with those requirements. These in particular
require the surplus or deficit to be calculated using prudent, as
opposed to best estimate actuarial assumptions. This 31 March 2018
actuarial valuation showed a deficit of GBP90.4 million. Under the
recovery plan agreed with the trustees following the 2018
valuation, the Group agreed that it would aim to eliminate the
deficit over a period of 19 years 9 months from 1 February 2021,
which is by 31 October 2040, by the payment of the following annual
contributions combined with the assumed asset returns in excess of
gilt yields: GBP2.8 million in the year to 31 March 2021, GBP3.9
million during the year to 31 March 2022 and GBP3.8 million in the
year ending March 2023; these contributions include an allowance of
GBP0.6 million p.a. in respect of the expenses of running the
Scheme and the Pension Protection Fund ("PPF") levy. Beyond 2023 a
schedule of contributions for GBP3.5 million annually is in place
until 31 October 2040, but is reviewed and reconsidered between the
employer and the trustees at each triennial actuarial valuation;
the next review being no later than by 30 June 2022 after the
results of the 31 March 2021 triennial valuation are known.
On 14 August 2020 additional security was granted by certain
Group companies to the Scheme trustees such that at 31 March 2021
the gross value of the assets secured, which includes applicable
intra-group balances, goodwill and investments in subsidiaries at
net book value in the relevant component companies' accounts, but
which eliminate in the Group upon consolidation, amounted to
GBP251.2 million (2020: GBP2.8 million).
Excluding the assets which eliminate in the Group upon
consolidation the value of the security was GBP37.9 million (2020:
GBP2.8 million).
For the purposes of IAS19, the results of the actuarial
valuation as at 31 March 2018, which was carried out by a qualified
independent actuary, have been updated on an approximate basis to
31 March 2021. There have been no changes in the valuation
methodology adopted for this period's disclosures compared to the
previous period's disclosures.
The Scheme exposes the Group to actuarial risks and the key
risks are set out in the table below. In each instance these risks
would detrimentally impact the Group's statement of financial
position and may give rise to increased interest costs in the Group
income statement. The trustees could require higher cash
contributions or additional security from the Group.
The trustees manage governance and operational risks through a
number of internal controls policies, including a risk register and
integrated risk management.
Risk Description Mitigation
--------------------------------------------
Investment risk Weaker than expected The trustees continually monitor
investment returns investment risk and performance
result in a worsening and have established an investment
in the Scheme's funding sub-committee which includes a
position. Group representative, meets regularly
and is advised by professional
investment advisors. A number
of the investment managers operate
tactical investment management
of the plan assets.
The Scheme currently invests approximately
54% of its asset value in a portfolio
of diversified growth funds, 42%
in liability-driven investments
and 4% in cash and liquidity funds.
--------------------------------------------
Interest rate A decrease in corporate The trustees' investment strategy
risk bond yields increases includes investing in liability-driven
the present value investments and bonds whose values
of the IAS 19 defined increase with decreases in interest
benefit obligations. rates.
A decrease in gilt Approximately 96% of the Scheme's
yields results in funded liabilities are currently
a worsening in the hedged against interest rates
Scheme's funding position. using liability-driven investments.
Note that the Scheme hedges interest
rate risk on a statutory and long-term
funding basis (gilts) whereas
AA corporate bonds are implicit
in the IAS 19 discount rate and
so there is some mismatching risk
to the Group should yields on
gilts and corporate bonds diverge.
------------------------------ --------------------------------------------
Inflation risk An increase in inflation The trustees' investment strategy
results in higher includes investing in liability-driven
benefit increases investments which will move with
for members which inflation expectations with approximately
in turn increases 83% of the Scheme's inflation
the Scheme's liabilities. linked liabilities being hedged
on a funded basis. The growth
assets held are expected to provide
protection over inflation in the
long term.
------------------------------ --------------------------------------------
Mortality risk An increase in life The trustees' actuary provides
expectancy leads to regular updates on mortality,
benefits being payable based on scheme experience, and
for a longer period the assumption continues to be
which results in an reviewed.
increase in the Scheme's
liabilities.
------------------------------ --------------------------------------------
The amounts recognised in the statement of financial position in
respect of the defined benefit scheme were as follows -
2021 2020
GBP000 GBP000
------------------------------------------------------ ---------- ----------
Present value of funded obligations (204,654) (210,386)
Fair value of scheme assets 167,379 172,766
Recognised liability for defined benefit obligations (37,275) (37,620)
---------- ----------
The present value of Scheme liabilities is measured by
discounting the best estimate of future cash flows to be paid out
of the Scheme using the projected unit credit method. The value
calculated in this way is reflected in the net liability in the
statement of financial position as shown above.
The projected unit credit method is an accrued benefits
valuation method in which allowance is made for projected earnings
increases. The accumulated benefit obligation is an alternative
actuarial measure of the Scheme's liabilities whose calculation
differs from that under the projected unit credit method in that it
includes no assumption for future earnings increases. In this case,
as the Scheme is closed to future accrual, the accumulated benefit
obligation is equal to the valuation using the projected unit
credit method.
All actuarial remeasurement gains and losses will be recognised
in the year in which they occur in other comprehensive income.
The cumulative remeasurement net loss reported in the statement
of comprehensive income since 1 April 2004 is GBP49.336
million.
IFRIC 14 has no effect on the figures disclosed because the
Company has an unconditional right to a refund under the resulting
trust principle.
Movements in the net liability for defined benefit obligations
recognised in the consolidated statement of financial position
-
2021 2020
GBP000 GBP000
------------------------------------------------------- --------- ---------
Net liability for defined benefit obligations
at the start of the year (37,620) (49,121)
Contributions paid 2,834 5,051
Net credit / (expense) recognised in the consolidated
income statement (see below) 4,052 (1,122)
Remeasurement (losses) / gains recognised in
other comprehensive income (6,541) 7,572
Net liability for defined benefit obligations
at the end of the year (37,275) (37,620)
--------- ---------
Movements in the present value of defined benefit obligations
-
2021 2020
GBP000 GBP000
---------------------------------------------- -------- ---------
Defined benefit obligation at the start of
the year 210,386 215,391
Interest expense 4,730 5,036
Actuarial gains due to scheme experience - (393)
Actuarial (gains)/ losses due to changes in
demographic assumptions (6,727) 1,528
Actuarial losses due to changes in financial
assumptions 12,280 237
Benefits paid (9,557) (11,413)
Past service credit (see note 6) (6,458) -
Defined benefit obligation at the end of the
year 204,654 210,386
-------- ---------
With the exception of that described below there have been no
plan amendments, curtailments or settlements during the period.
The Scheme introduced a Bridging Pension Option ("BPO") at
retirement during the year. A change to the Scheme rules was needed
in order to provide this option and an announcement was made to
members shortly before 31 March 2021.
The Company and trustees agreed to set the BPO exchange terms
such that 20% of the value is retained within the Scheme. Based
upon the assumption that 40% of members will opt for BPO in excess
of the standard pension commencement lump sum available from the
Scheme, this resulted in a reduction in the current value of the
accrued liabilities and as a result a past service credit has been
recognised in the income statement of GBP6.689 million in the
current year and presented within exceptional items.
The English High Court ruling in Lloyds Banking Group Pension
Trustees Limited v Lloyds Bank plc and others was published on 26
October 2018 and held that UK pension schemes with Guaranteed
Minimum Pensions ("GMPs") accrued from 17 May 1990 must equalise
for the different effects of these GMPs between men and women. The
case also gave some guidance on related matters, including the
methods for equalisation.
The trustees of the plan will need to obtain legal advice
covering the impact of the ruling on the plan, before deciding with
the employer on the method to adopt. The legal advice will need to
consider (amongst other things) the appropriate GMP equalisation
solution, whether there should be a time limit on the obligation to
make back-payments to members (the "look-back" period) and the
treatment of former members (members who have died without a spouse
and members who have transferred out for example).
The trustees commissioned scheme-specific calculations to
determine the likely impact of the ruling on the Scheme. An
allowance for the impact of GMP equalisation was included within
the 31 March 2019 accounting figures increasing liabilities by
1.68%, a resulting past service cost of GBP3.559 million was
recognised in the income statement at that time. There has been no
change to the allowance made for the purposes of the 2021 and 2020
accounting disclosures.
On 20 November 2020, the High Court issued a supplementary
ruling in the Lloyds bank GMP equalisation case with respect to
members that have transferred out of their scheme prior to the
ruling. The results mean that Trustees are obliged to make top-up
payments that reflect equalisation benefits and to make top-up
payments where this was not the case in the past. Also, a defined
benefit scheme that received a transfer is concurrently obliged to
provide equalised benefits in respect to the transfer payments and,
finally, there were no exclusions on the grounds of discharge
forms, CETV legislation, forfeiture provisions or the Limitation
Act 1980.
The impact of this ruling is estimated to cost GBP0.231 million
(approximately 0.1% of liabilities). This additional service cost
has been recognised through the income statement as a past service
cost in the year ending 31 March 2021 and has been presented within
exceptional items.
The Scheme's liabilities are split between active, deferred and
pensioner members at 31 March as follows -
2021 2020
% %
----- -----
Active - -
Deferred 35 43
Pensioners 65 57
100 100
----- -----
Movements in the fair value of Scheme assets -
2021 2020
GBP000 GBP000
----------------------------------------------- -------- ---------
Fair value of Scheme assets at the start of
the year 172,766 166,270
Interest income 3,888 3,914
(Loss) / return on Scheme assets excluding
interest income (988) 8,944
Contributions by employer 2,834 5,051
Benefits paid (9,557) (11,413)
Expenses paid (1,564) -
Fair value of Scheme assets at the end of the
year 167,379 172,766
-------- ---------
Actual return on Scheme assets 2,900 12,858
-------- ---------
The fair value of Scheme asset investments was as follows -
2021 2020
GBP000 GBP000
--------------------------------------------- -------- --------
Diversified growth funds 90,177 115,046
Bonds and liability-driven investment funds 71,044 56,725
Cash and liquidity funds 6,158 995
Total assets 167,379 172,766
-------- --------
None of the fair values of the assets shown above include any of
the Group's own financial instruments or any property occupied, or
other assets used by the Group.
All of the Scheme assets have a quoted market price in an active
market with the exception of the trustees' bank account
balance.
Diversified growth funds are pooled funds invested across a
diversified range of assets with the aim of giving long-term
investment growth with lower short-term volatility than
equities.
It is the policy of the trustees and the Group to review the
investment strategy at the time of each funding valuation. The
trustees' investment objectives and the processes undertaken to
measure and manage the risks inherent in the Scheme are set out in
the Statement of Investment Principles.
A proportion of the Scheme's assets is invested in the BMO LDI
Nominal Dynamic LDI Fund and in the BMO LDI Real Dynamic LDI Fund
which provides a degree of asset liability matching.
The net (gain) / expense recognised in the consolidated income
statement was as follows -
2021 2020
GBP000 GBP000
--------------------------------------------------- -------- -------
Past service credit (6,458) -
Net interest on the net defined benefit liability 842 1,122
Scheme administration expenses 1,564 -
(4,052) 1,122
-------- -------
In the comparative period scheme administration expenses were
presented as a deduction from contributions paid by employer.
The net (gain) / expense is recognised in the following line
items in the consolidated income statement -
2021 2020
GBP000 GBP000
-------------------------------------------------- -------- -------
Charged to operating profit 1,117 -
Credited to exceptional items (6,011) -
Other finance revenue and expense - net interest
on the net defined benefit liability 842 1,122
(4,052) 1,122
-------- -------
The principal actuarial assumptions at the balance sheet date
(expressed as weighted averages) were -
2021 2020
------------------------------------------------ ------ ------
Discount rate at 31 March 2.00% 2.30%
Future salary increases N/A N/A
Inflation (RPI) (non-pensioner) 3.25% 2.80%
Inflation (CPI) (non-pensioner) 2.75% 2.30%
Allowance for revaluation of deferred pensions
of RPI or 5% p.a. if less 3.25% 2.80%
Allowance for revaluation of deferred pensions
of CPI or 5% p.a. if less 2.75% 2.30%
Allowance for pension in payment increases
of RPI or 5% p.a. if less 3.15% 2.70%
Allowance for pension in payment increases
of CPI or 3% p.a. if less 2.30% 2.30%
Allowance for pension in payment increases
of RPI or 5% p.a. if less, minimum 3% p.a. 3.65% 3.00%
Allowance for pension in payment increases
of RPI or 5% p.a. if less, minimum 4% p.a. 4.20% 4.00%
The mortality assumptions adopted at 31 March 2021 are 143% and
153% respectively of the standard tables S3PMA / S3PFA (2020:137%
S3PMA/S3PFA_M), year of birth, no age rating for males and females,
projected using CMI_2020 converging to 1.00% p.a (2020: 1.00%) with
a smoothing parameter 7.0 (2020: 7.5).
It is recognised that the Core CMI_2020 model is likely to
represent an overly cautious view of experience in the near term.
As a result, management have applied judgement and the CMI_2020
model has been adopted with a 2020 weighting parameter of 10% to
represent possible future trend as a best estimate. These
assumptions imply the following life expectancies:
2021 2020
------------------------------------------------- ----------- -----------
Life expectancy for a male (current pensioner)
aged 65 19.0 years 19.6 years
Life expectancy for a female (current pensioner)
aged 65 21.0 years 21.3 years
Life expectancy at 65 for a male aged 45 19.9 years 20.6 years
Life expectancy at 65 for a female aged 45 22.2 years 22.6 years
It is assumed that 75% of the post A-Day maximum for active and
deferred members will be commuted for cash (2020 - 75%).
Bridging Pension Option ("BPO") take-up is assumed to be 40%
(2020: n/a).
The pension scheme liabilities are derived using actuarial
assumptions for inflation, future salary increases, discount rates,
mortality rates and commutation. Due to the relative size of the
Scheme's liabilities, small changes to these assumptions can give
rise to a significant impact on the pension scheme deficit reported
in the Group statement of financial position.
The sensitivity to the principal actuarial assumptions of the
present value of the defined benefit obligation is shown in the
following table -
2021 2021 2020 2020
% GBP000 % GBP000
----------------------- -------- -------- -------- --------
Discount rate (1)
Increase of 0.25% per
annum (3.43%) (7,014) - -
Decrease of 0.25% per
annum 3.61% 7,396 3.60% 7,754
Decrease of 1.0% per
annum 15.71% 32,147 15.7% 33,031
Inflation (2)
Increase of 0.25% per
annum 1.14% 2,334 2.00% 4,208
Increase of 1.0% per
annum 4.89% 10,004 7.60% 15,989
Decrease of 0.1% per
annum (0.45%) (923) (0.80%) (1,683)
Life expectancy
Increase of 1 year 5.06% 10,355 3.80% 7,995
1 At 31 March 2021, the assumed discount rate is 2.00% (2020:
2.30%). An increase in the discount rate was not calculated in the
comparative period.
2 At 31 March 2021, the assumed rate of RPI inflation is 3.25%
and CPI inflation 2.75% (2020: RPI 2.80% and CPI 2.30%).
The sensitivities shown above are approximate. Each sensitivity
considers one change in isolation. The inflation sensitivity
includes the impact of changes to the assumptions for revaluation
and pension increases.
The weighted average duration of the defined benefit obligation
at 31 March 2021 is 15 years (2020: 14 years).
The life expectancy assumption at 31 March 2021 is based upon
increasing the age rating assumption by one year. In the prior year
the life expectancy assumption was applied by allowing for an
increase/decrease in life expectation from age 60 of one year,
based upon the approximate weighted average age of the scheme.
Other than those specifically mentioned above, there were no
changes in the methods and assumptions used in preparing the
sensitivity analysis from the prior year.
The history of the Scheme's deficits and experience gains and
losses is shown in the following table -
2021 2020
GBP000 GBP000
------------------------------------------------------ ---------- ----------
Present value of funded obligation (204,654) (210,386)
Fair value of scheme asset investments 167,379 172,766
Recognised liability for defined benefit obligations (37,275) (37,620)
Actual return on scheme assets 2,900 12,858
Actuarial gains due to scheme experience - 393
Actuarial gains / (losses) due to changes in
demographic assumptions 6,727 (1,528)
Actuarial losses due to changes in financial
assumptions (12,280) (237)
14 Ordinary share capital
Ordinary shares of 5 pence each -
Number
of shares GBP000
---------------------------------------- ----------- -------
Issued and fully paid at 31 March 2020 73,419,193 3,671
Issued and fully paid at 31 March 2021 73,419,193 3,671
----------- -------
There are 15,974 vested shares outstanding in respect of a
buyout award granted to a former director of the Company which will
become issuable at the end of a holding period on 18 July 2021.
There are 133,000 potential share options outstanding under the
performance share plan at 31 March 2021.
15 Cash generated from operations
2021 2020
GBP000 GBP000
----------------------------------------------------- -------- ---------
Profit / (loss) for the year 7,412 (11,409)
Adjustments for -
Pension scheme contributions net of admin costs
settled by the Company (2,179) (1,551)
Pension scheme admin costs settled by the Scheme 910 -
Depreciation charge 5,774 6,765
Amortisation of intangible assets 206 172
Exceptional impairment of tangible assets, arising
on rationalisation of business - 1,501
Exceptional impairment of intangible assets,
arising on rationalisation of business - 1,405
Exceptional gain in respect of retirement benefits (6,458) -
(Profit) / loss on business disposal (1,250) 2,962
Loss / (profit) on disposal of other plant and
equipment 10 (307)
Loss on disposal of intangible non-current assets 5 -
Cash flow relating to provision for site closure
costs (23) (310)
Share based payment charge 1 76
Financial income (42) (104)
Financial expense 2,701 2,690
Taxation 457 1,449
Operating cash flow before changes in working
capital 7,524 3,339
Changes in working capital
Decrease / (increase) in inventories 768 (653)
(Increase) / decrease in contract assets (1,492) 16,942
(ncrease) / decrease in trade and other receivables (308) 2,531
Increase / (decrease) in trade and other payables 864 (367)
Increase in contract liabilities 3,846 11
Cash generated from operations 11,202 21,803
-------- ---------
16 Post balance sheet events
On 4 May 2021, a further GBP0.2 million was received by HSBC
from the Administrators of Wipac Ltd and has been applied as a
repayment against the Group's term loan. At 31 March 2021 no asset
has been recognised for this nor for further potential post balance
sheet proceeds which would also be used to repay the Group's term
loan. Management's best estimate of the contingent asset at 31
March 2021 in respect of these remaining potential proceeds is
GBP0.35 million; the receipt of the GBP0.2 million does not change
this.
At 31 March 2021, the Group has recognised GBP2.1 million ($2.9
million) in loans and borrowings in respect to a Paycheck
Protection Program loan, see note 7. The loan was received from
Commercial Bank and Trust of Pennsylvania as a promissory note,
underwritten by the US Government's Small Business Administration
("SBA"). On 5 May 2021, CTP USA received confirmation of
forgiveness of the loan by the SBA resulting in its conversion from
a loan to a grant. The full amount will be recognised in the income
statement in the year ending 31 March 2022.
Information for shareholders
Reconciliation of non-GAAP financial measures
2021 2020
Notes GBP000 GBP000
--------------------------------------------------- ------ --------- ---------
Profit / (loss) for the period 7,412 (11,409)
Add back: (profit) / loss on discontinued
operations, net of tax 4 (1,198) 9,509
Statutory profit / (loss) after tax from
continuing operations 6,214 (1,900)
Add back: Income tax expense from continuing
operations 4 457 1,355
Profit / (loss) before tax from continuing
operations 6,671 (545)
Add back: Net financing charge from continuing
operations 2,659 2,388
Operating profit from continuing operations 9,330 1,843
Add back: Exceptional items from continuing
operations 6 (4,490) 5,470
Underlying operating profit from continuing
operations 4,840 7,313
Add back: Amortisation of intangible assets
from continuing operations 206 172
Underlying earnings before interest, tax
and amortisation (EBITA) from continuing
operations 5,046 7,485
Add back: Depreciation of property, plant
and equipment from continuing operations 5,774 5,951
Underlying earnings before interest, tax,
depreciation and amortisation (EBITDA) from
continuing operations 10,820 13,436
--------- ---------
Profit / (loss) before tax from continuing
operations 6,671 (545)
Add back: Exceptional items from continuing
operations 6 (4,490) 5,470
Underlying profit before tax from continuing
operations 2,181 4,925
--------- ---------
Income tax expense from continuing operations 4 457 1,355
Add back: Exceptional tax expense from continuing
operations 8 - 13
Group underlying tax expense from continuing
operations 457 1,368
--------- ---------
Group statutory effective tax rate from
continuing operations 6.9% (248.6%)
Group underlying effective tax rate from
continuing operations 21.0% 27.8%
Cash at bank and in hand 20,122 19,309
Loans and borrowings - current (9,721) (42,804)
Loans and borrowings - non-current (37,997) (3,862)
Net debt (27,596) (27,357)
Add back: lease liabilities 7,055 5,250
Net debt excluding lease liabilities (20,541) (22,107)
--------- ---------
Information on consolidated statement of
cash flows
Net cash from operating activities 8,397 19,302
Less: net cash used in / (from) operating
activities from discontinued operations 5 52 (12,353)
Net cash from operating activities from
continuing operations 8,449 6,949
--------- ---------
Net cash used in investing activities (6,006) (721)
Less: net cash from investing activities
from discontinued operations 5 (1,250) (2,700)
Net cash used in investing activities from
continuing operations (7,256) (3,421)
--------- ---------
Net cash from / (used in) financing activities 5,050 (3,131)
Less: net cash used in financing activities
from discontinued operations - 1,721
Net cash from financing activities from
/ (used in) continuing operations 5,050 (1,410)
--------- ---------
Glossary
COMPOUND ANNUAL GROWTH RATE The geometric progression ratio
("CAGR") that provides a constant rate of
return over a time period
CONSTANT CURRENCY Retranslated at the prior year's
average exchange rate. Included
to explain the effect of changing
exchange rates during volatile times
to assist the reader's understanding
------------------------------------------
GROUP CAPITAL EXPENDITURE Fixed asset additions
------------------------------------------
NET BANK INTEREST Interest receivable on cash at bank
less interest payable on bank loans
and overdrafts. Reported in this
manner due to the global nature
of the Group and its banking agreements
------------------------------------------
NET DEBT Cash and cash deposits less loans
and borrowings. Used to report the
overall financial debt of the Group
in a manner that is easy to understand
------------------------------------------
NET DEBT EXCLUDING LEASE Net debt, as defined above, excluding
LIABILITIES lease liabilities. Used to report
the overall non-leasing debt of
the Group in a manner that is easy
to understand
------------------------------------------
OPERATIONAL GEARING Ratio of fixed overheads to sales
------------------------------------------
UNDERLYING Adjusted to exclude all exceptional
items
------------------------------------------
UNDERLYING EBITDA Profit before interest, tax, depreciation
and amortisation adjusted to exclude
all exceptional items
------------------------------------------
UNDERLYING EARNINGS PER SHARE Earnings per share adjusted to exclude
all exceptional items
------------------------------------------
UNDERLYING OPERATING PROFIT Operating profit adjusted to exclude
all exceptional items
------------------------------------------
UNDERLYING PROFIT BEFORE Profit before tax adjusted to exclude
TAX all exceptional items
------------------------------------------
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END
FR FLMMTMTITTRB
(END) Dow Jones Newswires
June 30, 2021 02:00 ET (06:00 GMT)
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