TIDMSIXH
RNS Number : 6228I
600 Group PLC
15 December 2020
The 600 Group PLC
Unaudited Interim Results for the six months ended 30 September
2020
The 600 Group PLC ("the Group"), the diversified industrial
engineering company (AIM: SIXH), today announces its unaudited
interim results for the six months ended 30 September 2020.
Financial highlights
-- Revenues down 29% to $25.4m (FY20 H1: $35.7m), mainly due to
significant disruption caused by the COVID-19 pandemic
-- Underlying* operating profit of $0.2m (FY20 H1: $2.5m)
-- Net debt excluding leases but including $2.2m of USA PPP
funding of $16.7m (FY 20 H1: $16.9m, FY20 year end: $14.2m)
-- Operations continue to produce positive cashflows
Strategic & operational highlights
-- Quick response to challenging market conditions with
businesses adapting new working practices, reducing overheads and
deferring all non-critical capital expenditure
-- Debt levels stabilised as a result of significant steps taken
in the prior year to de-risk the Group
-- Continued investment in synergy benefits between businesses
in the USA and cross fertilisation of technology and customer
contacts continues
-- Establishing operations in Germany to promote the direct sale
of higher specification machines and support the distribution
businesses in this important market
* from continuing operations, before adjusting items .
Paul Dupee, Executive Chairman of the Group, commented:
"The reporting period has been heavily impacted by the COVID-19
pandemic. However, the Group responded quickly to the challenges,
reducing costs and keeping our core competencies together.
The de-risking of the Group, both operationally and financially,
in the last year has created a platform from which we can leverage
the strength of the Group's brands and grow the business into
increasingly diversified niche markets worldwide both organically
and by acquisition once activity levels normalise .
Whilst short-term macro-economic uncertainty remains, I am
confident that we will come out of this crisis a stronger and
leaner business."
Enquiries:
The 600 Group PLC Tel: 01924 415000
Paul Dupee, Executive Chairman
Instinctif Partners Tel: 0207 457 2020
Mark Garraway
Rosie Driscoll
Spark Advisory Partners Limited (NOMAD) Tel: 020 3368 3553
Matt Davis
WH Ireland (Broker) Tel: 020 7220 1666
Harry Ansell
The 600 Group Plc
Executive Chairman's Statement for the six months ended 30
September 2020
Overview
The six month period ended 30 September 2020 bore the brunt of
the impact from the COVID-19 pandemic with the Group trading at a
loss in May and June as all facilities were affected by local and
national shutdowns and the UK factory operation closed completely
for the month of May.
Revenues and orders inevitably fell, but the Board and local
management teams responded quickly, adopting short time and home
working and furloughing some staff with others accepting temporary
salary reductions. The Group took advantage of government stimulus
packages including loans under the USA Government Paycheck
Protection Program (PPP) and the UK Coronavirus Large Business
Interruption Scheme (CLBILS). The UK and Australian businesses also
received direct assistance to help maintain employment and this is
shown as other income in the Consolidated Income Statement.
Overheads were reduced and all non-critical capital expenditure
deferred.
Debt levels have been stabilized as a result of significant
de-risking of the Group in the prior year with the receipt of the
pension surplus following the successful buy out of the scheme and
the sale of the loss making Gamet bearings operation and associated
freehold property. Debt during the six months to September 2020
remained in line with the $14m of the March 2020 year end apart
from the $2.2m of USA PPP funds, which are currently shown in debt
but under the terms of the funding, are expected to be largely
forgiven following claim submissions to be filed in the next month.
Debt was further reduced by $1.6m following the period end, when in
October the Brisbane freehold was sold as part of the restructuring
of the Australian operations.
Results
Revenue was down at $25.4m (FY 20 H1: $35.7m) with net
underlying operating profit (excluding adjusting items) at $0.2m
(FY20 H1:$2.5m).
After taking account of interest on bank borrowings, loan notes
and lease liabilities, the underlying loss for the Group pre-tax
before adjusting items was $0.6m (FY20 H1: profit $1.7m) and a loss
of $1.2m (FY 20 H1: profit $1.5m) after adjusting items.
The total loss for the financial period on continuing activities
was $1.1m (FY 20 H1: profit $1.1m), providing Basic earnings loss
of 0.93 cents (equivalent to 0.74p loss) per share (FY 20 H1: 0.92
cents (equivalent to 0.72p). The underlying continuing earnings per
share (excluding adjusting items) were loss 0.36c (equivalent
to
0.29p loss) (FY 20 H1: 1.31c (equivalent to 1.03p).
Whilst these results are disappointing the Group has continued
to trade at a positive cash position with adjusted EBITDA, after
allowing for property rentals, at $0.5m in the six months to
September 2020 which compares to $2.7m in the previous half
year.
Given the current trading and continuing uncertainty no dividend
is proposed.
Financial position
Working capital levels reduced during the period with falls in
inventory levels and receivables by $1m. Trade and other payables,
which include customer deposits, reduced by $2.3m with suppliers
paid down and supply lines adjusted to the reduced volumes.
All non essential capital expenditure was deferred due to the
COVID-19 pandemic and only $0.18m was expended against $0.36m in
the prior half year.
The three USA businesses took advantage of Government assistance
under PPP legislation and in total $2.2m was received in early May
to assist with maintaining employment and meeting other operating
costs. These loans may be forgiven as claims to be submitted in the
next month show expenditure against specified costs and
continuation of employment numbers. Any amounts not forgiven become
a two year loan at 1% interest. The UK machine tools business
received a $1.5m loan under the Government CLBILS assistance in
late August. This loan is a bullet repayment in three years time in
September 2023 with interest at 1.92%.
Both Bank of America and HSBC have been very supportive during
these difficult times and the annual reviews of the working capital
facilities are currently in progress and are expected to be renewed
in the normal course on the same terms. The Group remains covenant
compliant.
Total debt, excluding leases, was $16.7m at 30 September 2020
which includes the $2.2m of PPP funding and an increase of $0.4m on
the retranslation of the sterling based loan notes, compared to
$16.9m at September 2019 and $14.2m at the end of March 2020.
Debt levels reduced in late October 2020 by $1.6m on receipt of
the proceeds of the sale of the Brisbane freehold property as part
of the restructuring of the Australian operation. The property has
been shown as an asset held for sale in the statement of financial
position at 30 September 2020.
Adjusting items
Adjusting Items have been noted separately to provide a clearer
picture of the Group's underlying trading performance and are set
out in note 3. In the current period the initial costs of the Group
restructuring announced in the Annual Report in November 2020 of
$0.2m and the amortisation of acquisition intangibles relating to
the acquisition of CMS of $0.2 have been recorded as adjusting
items in operating expenses. The amortisation of the loan note
discounting and costs of $0.3m are shown as adjusting items within
finance costs.
Operating activities
Machine tools and precision engineered components
Machine tool activity globally has been severely affected by the
COVID-19 pandemic with overall volumes down over 31% compared to
the same period last year. The UK business had seen significant
improvement, before the COVID-19 pandemic struck, as a result of
the restructuring of operation and re-launch as Colchester Machine
Tool Solutions in the new European technology Centre in Elland.
This allowed the business to continue trading satisfactorily
through April 2020, but, with most customers closed as the National
lockdown continued, the decision was taken to close the operation
for the month of May. The business has since operated at a reduced
level utilising Government assistance with some staff furloughed
and others accepting temporary pay cuts or reduced working hours.
Whilst order activity has seen an increase in October and November,
short term macroeconomic uncertainty remains combined with
potential supply disruption created by Brexit and port
congestion.
An operation is being established in Germany to promote the
direct sale of higher specification machines, support the
distribution businesses and to reduce the impact of a no deal
Brexit in this important market.
The USA business similarly suffered significant volume
reductions but continued to operate on reduced staffing levels and
has also seen an upturn in order activity in recent months.
The Australian business was not as significantly affected being
only nearly 20% down but did operate on reduced staff levels and
took advantage of Government assistance wherever possible. The
restructuring of the operation continued during the period and the
freehold premises in Brisbane was sold in late October with the
continuing activity taking a smaller space in the existing facility
on a rental basis.
The results of the division were as follows:
FY21 H1 FY20 H1
$m $m
Revenues 15.55 22.62
Operating profit* 0.74 1.66
Operating margin* 4.8% 7.3%
*from continuing operations, before adjusting items.
Industrial Laser systems
The industrial laser businesses suffered from local restrictions
in the USA with many customers unable to accept site visits and
significant uncertainty delaying many projects. Revenues overall
were down 24.5%. As a consequence of the businesses being largely
technical and manufacturing orientated they were not able to be as
flexible as the largely distribution machine tools operation and,
therefore, operating inefficiencies were greater. The TYKMA
Electrox business has seen improved order intake in recent months
but the CMS operation, which relies on larger projects with longer
lead times, has yet to see a sustained pick up in activity.
The Group is continuing to investigate synergy benefits between
the two businesses and the cross fertilisation of technology and
customer contacts continues.
FY21 H1 FY20 H1
$m $m
Revenues 9.85 13.04
Operating profit* 0.24 1.82
Operating margin* 2.4% 14.0%
*from continuing operations, before adjusting items.
Summary and outlook
The reporting period has been heavily impacted by the COVID-19
pandemic. However, the Group responded quickly to the challenges,
reducing costs and keeping our core competencies together.
The de-risking of the Group, both operationally and financially,
in the last year has created a platform from which we can leverage
the strength of the Group's brands and grow the business into
increasingly diversified niche markets worldwide both organically
and by acquisition once activity levels normalise.
Whilst short-term macro-economic uncertainty remains, I am
confident that we will come out of this crisis a stronger and
leaner business.
Paul Dupee
Executive Chairman
15 December 2020
The 600 Group Plc
Condensed consolidated income statement (unaudited)
For the 26 week period ended 30 September 2020
Before After Before After
Adjusting Adjusting Adjusting Adjusting Adjusting Adjusting
Items Items Items Items Items Items
26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended ended ended
30 September 30 September 30 September 28 September 28 September 28 September 30 March
202 0 2 020 2 020 2019 2019 2019 2 020
$000 $000 $000 $000 $000 $000 $000
---------------------- ------------ ------------ ------------ ------------ -------------- ------------ --------
C ontinuing
Revenue 25,398 - 25,398 3 5,657 - 35,657 67,206
Cost of sales (16,405) - (16,405) ( 22,922) - (22,922) (43,491)
Adjusting items in
cost
of sales - - - - - - (254)
Gross profit 8,993 - 8,993 1 2,735 - 12,735 23,461
Net operating expenses (9,201) - (9,201) ( 10,209) - (10,209) (20,988)
Adjusting Items in
operating
expenses - (370) (370) - (713) (713) (1,742)
Other income -
Government
funding 380 - 380
Profit on disposal of
pension scheme - - - - 809 809 809
Operating
profit/(loss) 1 72 (370 ) (1 98 ) 2 ,526 96 2,622 1,540
Bank interest 6 - 6 - - - 5
Interest on pension
surplus - - - - - - 22
------------ ------------ ------------ ------------ -------------- ------------ --------
Financial income 6 - 6 - - - 27
------------ ------------ ------------ ------------ -------------- ------------ --------
Bank and other
interest ( 555) - (555) (662) - (662) (1,282)
Interest on lease (382
liabilities (1 91) - (191) (2 01) - (201) )
Loan note amortisation - ( 300) ( 300) (259) ( 259) (536)
------------ ------------ ------------ ------------ -------------- ------------ --------
Financial expense ( 746) ( 300) ( 1,046) (863) (259) ( 1,122) (2,200)
(Loss)/profit before (1,238
tax (568 ) (670) ) 1,663 (163) 1,500 (633)
Income tax c redit/
( charge) 140 - 140 (155) (283) (438 ) 1 ,228
---------------------- ------------ ------------ ------------ ------------ -------------- ------------ --------
(Loss)Profit for the
period on continuing
activities
attributable
to equity holders of
the parent (428) (6 70 ) (1,098) 1,508 (446) 1,062 595
(Loss) on discontinued
activity - - - (73) (93) (166) (960)
(Loss)/profit for the
period attributable
to equity holders of
the parent (428) (670) (1,098) 1,435 (539) 896 (365)
Basic EPS (0.36c) (0.93c) 1.31c 0.92c 0.51c
Diluted EPS (0.36c) (0.93c) 1.27c 0.90c 0.50c
Basic EPS after
discontinued (0.36c) (0.93c) 1.24c 0.78c (0.31c)
Diluted EPS after
discontinued (0.36c) (0.93c) 1.21c 0.76c (0.31c)
Condensed consolidated statement of
comprehensive income (unaudited)
For the 26 week period ended 30 September
2020
26 weeks 26 weeks 52 weeks
Ended Ended Ended
30 September 28 September 28 March
2020 2019 2020
$000 $000 $000
--------------------------------------------- ------------- ------------- ---------
(Loss)/profit for the period (1,098) 896 (365)
Other comprehensive (expense)/income:
Items that will not be reclassified
to the Income Statement:
Re-measurement of the net defined benefit
asset 3 - (36)
Property revaluation 441 - 199
Deferred taxation - - (282)
--------------------------------------------- ------------- ------------- ---------
Total items that will not be reclassified
to the Income Statement: 444 - (119)
Items that are or may in the future
be reclassified to the Income Statement:
Foreign exchange translation differences 41 (673) (606)
--------------------------------------------- ------------- ------------- ---------
Total items that are or may be reclassified
subsequently to the Income Statement: 41 (673) (606)
--------------------------------------------- ------------- ------------- ---------
Other comprehensive (expense)/income
for the period, net of income tax 485 223 (725)
Total comprehensive (expense)/income
for the period (613) 223 (1,090)
--------------------------------------------- ------------- ------------- ---------
Condensed consolidated statement of financial position (unaudited)
As at 30 September 2020
As at As at As at
30 September 28 September 28 March
2020 2019 2020
$000 $000 $000
------------------------------------ ------------- ------------- ---------
Non-current assets
Property, plant and equipment 2,876 4,109 4,060
Goodwill 13,174 15,112 13,174
Other Intangible assets 3,723 1,260 3,868
Deferred tax assets 4,415 4,603 4,415
Right of use assets 8,712 10,260 9,060
------------------------------------ ------------- ------------- ---------
32,900 35,344 34,577
------------------------------------ ------------- ------------- ---------
Current assets
Inventories 18,735 22,698 19,054
Trade and other receivables 7,473 10,379 8,084
Taxation 75 189 222
Deferred tax assets 1,463 - 1,148
Assets classified as held for sale 1,563 949 -
Cash and cash equivalents 3,450 2,534 2,878
------------------------------------ ------------- ------------- ---------
32,759 36,749 31,386
------------------------------------ ------------- ------------- ---------
Total assets 65,659 72,093 65,963
------------------------------------ ------------- ------------- ---------
Non-current liabilities
------------- ------------- ---------
Employee benefits (1,271) (1,274) (1,261)
Loans and other borrowings (15,874) (12,160) (11,654)
Lease Liabilities (8,336) (8,861) (8,344)
Deferred tax liability - (249) -
------------------------------------ ------------- ------------- ---------
(25,481) (22,544) (21,259)
------------------------------------ ------------- ------------- ---------
Current liabilities
Trade and other payables (5,956) (9,059) (8,298)
Deferred tax liability (195) - (236)
Lease Liabilities (1,222) (1,482) (1,608)
Provisions (613) (827) (590)
Loans and other borrowings (4,242) (7,271) (5,414)
------------- ------------- ---------
(12,228) (18,639) (16,146)
------------------------------------ ------------- ------------- ---------
Total liabilities (37,709) (41,183) (37,405)
------------------------------------ ------------- ------------- ---------
Net assets 27,950 30,910 28,558
------------------------------------ ------------- ------------- ---------
Shareholders' equity
Called-up share capital 1,803 1,803 1,803
Share premium account 3,828 3,828 3,828
Revaluation reserve 1,789 1,149 1,348
Equity reserve 201 201 201
Translation reserve (7,089) (7,197) (7,130)
Retained earnings 27,418 31,126 28,508
------------------------------------ ------------- ------------- ---------
Total equity 27,950 30,910 28,558
------------------------------------ ------------- ------------- ---------
Consolidated statement of changes in equity (unaudited)
As at 30 September 2020
Ordinary Share
share premium Revaluation Translation Equity Retained
capital account reserve reserve reserve Earnings Total
$000 $000 $000 $000 $000 $000 $000
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
At 30 March 2019 1,746 2,885 1,149 (6,524) 201 30,186 29,643
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Profit for the period - - - - - 896 896
Other comprehensive
income:
Foreign currency
translation - - - (673) - - (673)
Total comprehensive income - - - (673) - 896 223
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Transactions with owners:
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Share capital subscribed
for 57 943 - - - - 1,000
Credit for share-based
payments - - - - - 44 44
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Total transactions with
owners 57 943 - - - 44 1,044
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
At 28 September 2019 1,803 3,828 1,149 (7,197) 201 31,126 30,910
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Loss for the period - - - - - (1,261) (1,261)
Other comprehensive
income:
Foreign currency
translation - - - 67 - - 67
Property revaluation - - 199 - - - 199
Net defined benefit
movement - - - - - (36) (36)
Deferred tax - - - - - (282) (282)
------------ ---------- --------------- ----------- ------- -------- -------
Total comprehensive income - - 199 67 - (1,579) (1,313)
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Transactions with owners:
Dividend - - - - - (1,088) (1,088)
Credit for share-based
payments - - - - - 49 49
------------ ---------- --------------- ----------- ------- -------- -------
Total transactions with
owners - - - - - (1,039) (1,039)
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
At 28 March 2020 1,803 3,828 1,348 (7,130) 201 28,508 28,558
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Loss for the period - - - - - (1,098) (1,098)
Other comprehensive
income:
Foreign currency
translation - - - 41 - - 41
Property revaluation - - 441 - - - 441
Net defined benefit
movement - - - - - 3 3
Total comprehensive income - - 441 41 - (1,095) (613)
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Transactions with owners:
Credit for share-based
payments - - - - - 5 5
------------ ---------- --------------- ----------- ------- -------- -------
Total transactions with
owners - - - - - 5 5
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
At 30 September 2020 1,803 3,828 1,789 (7,089) 201 27,418 27,950
-------------------------- ------------ ---------- --------------- ----------- ------- -------- -------
Condensed consolidated cash flow statement (unaudited)
For the 26 week period ended 30 September 2020
26 weeks ended 26 weeks ended 52 weeks ended
30 September 28 September 28 March
2020 2019 2020
$000 $000 $000
---------------------------------------------------- --------------- -------------------- -------------------
Cash flows from operating activities
(Loss)/Profit for the period (1,098) 896 (365)
Adjustments for:
Amortisation of intangible assets 206 13 325
Depreciation 375 375 651
Depreciation of IFRS16 Right of use assets 586 610 1,254
Net financial expense/(income) 1,040 1,122 2,173
Non-cash adjusting items - 322 879
Loss on assets held for resale - - 127
Profit on disposal of pension - (809) (809)
(Profit)/loss on disposal of fixed assets ( 9) 8 32
Equity share option expense 5 44 93
Income tax expense/(credit) (140) 438 (1,228)
---------------------------------------------------- --------------- -------------------- -------------------
Operating cash flow before changes in working
capital and provisions 965 3,019 3,132
(Increase) /decrease in trade and other receivables 799 (577) 2,587
(Increase)/decrease in inventories 675 (3,176) 67
(Decrease)/increase in trade and other payables (2,728) 400 (973)
Employee benefit contributions (9) - (78)
Proceeds from Pension fund disposal - 5,213 5,213
Cash generated from/(used in) operations (298) 4,879 9,948
Interest paid (554) (451) (1,141)
Lease interest (191) - (375)
Income tax paid - (14) -
---------------------------------------------------- --------------- -------------------- -------------------
Net cash flows from operating activities (1,043) 4,414 8,432
---------------------------------------------------- --------------- -------------------- -------------------
Cash flows from investing activities
Interest received 6 - 5
Payment for acquisition of subsidiary, net of cash
acquired - (6,062) (6,072)
Proceeds from assets held for sale - - 926
Proceeds from sale of property, plant and equipment 81 - 57
Purchase of property, plant and equipment (180) (359) (649)
Development expenditure capitalised (38) (1) (351)
Net cash from investing activities (131) (6,422) (6,084)
---------------------------------------------------- --------------- -------------------- -------------------
Cash flows from financing activities
Dividends paid - - (1,088)
Proceeds from/(Net repayment of) external borrowing (1,479) 4,388 1,928
Government assistance loans 3,783
IFRS 16 Lease payments (674) (716) (1,212)
Net finance lease expenditure - (30) -
Net cash flows from financing activities 1,630 3,642 (372)
---------------------------------------------------- --------------- -------------------- -------------------
Net increase/(decrease) in cash and cash
equivalents 456 1,634 1,976
Cash and cash equivalents at the beginning of the
period 2,878 948 948
Effect of exchange rate fluctuations on cash held 116 (48) (46)
---------------------------------------------------- --------------- -------------------- -------------------
Cash and cash equivalents at the end of the period 3,450 2,534 2,878
---------------------------------------------------- --------------- -------------------- -------------------
Notes relating to the condensed consolidated financial
statements
For the 26-week period ended 30 September 2020
1. Basis of preparation and accounting policies
These interim consolidated financial statements have been
prepared using accounting policies based on International Financial
Reporting Standards (IFRS and IFRIC Interpretations) issued by the
International Accounting Standards Board ("IASB") as adopted for
use in the EU. They do not include all disclosures that would
otherwise be required in a complete set of financial statements and
should be read in conjunction with the 28 March 2020 Annual Report.
The financial information for the half years ended 30 September
2020 and 28 September 2019 does not constitute statutory accounts
within the meaning of Section 434 (3) of the Companies Act 2006 and
both periods are unaudited.
The annual financial statements of The 600 Group plc ('the
Group') are prepared in accordance with IFRS as adopted by the
European Union. The comparative financial information for the year
ended 28 March 2020 included within this report does not constitute
the full statutory Annual Report for that period. The statutory
Annual Report and Financial Statements for 2020 will be filed with
the Registrar of Companies following the Company's Annual General
Meeting on 22 December 2020. The Independent Auditors' Report on
the Annual Report and Financial Statements for the year ended 28
March 2020 was unqualified, did not draw attention to any matters
by way of emphasis and did not contain a statement under 498(2) -
(3) of the Companies Act 2006.
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2020 annual financial statements.
2. SEGMENT ANALYSIS
IFRS 8 - "Operating Segments" requires operating segments to be
identified on the basis of internal reporting about components of
the Group that are regularly reviewed by the chief operating
decision maker to allocate resources to the segments and to assess
their performance. The chief operating decision maker has been
identified as the Executive Directors. The Executive Directors
review the Group's internal reporting in order to assess
performance and allocate resources.
The Executive Directors consider there to be two continuing
operating segments being machine tools and precision engineered
Components and industrial laser systems.
The Executive Directors assess the performance of the operating
segments based on a measure of operating profit/(loss). This
measurement basis excludes the effects of Special Items from the
operating segments. Head Office and unallocated represent central
functions and costs.
The following is an analysis of the Group's revenue and results
by reportable segment:
Continuing
--------------------------------------------------
26 Weeks ended 30 September Machine
2020 Tools
& Precision Industrial
Engineered Laser Head Office
Components Systems & unallocated Total Discontinued Group Total
Segmental analysis of
revenue $000 $000 $000 $000 $000 $000
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Total revenue 15,551 9,847 - 25,398 - 25,398
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Operating profit/(loss)
pre adjusting items 737 238 (803) 172 - 172
Adjusting items - - (370) (370) - (370)
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Operating profit/(loss) 737 238 (1,173) (198) - (198)
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Other segmental information:
Reportable segment assets 34,542 14,602 16,515 65,659 - 65,659
Reportable segment liabilities (19,802) (5,250) (12,657) (37,709) - (37,709)
Intangible & Property,
plant and equipment additions 76 135 - 211 - 211
Depreciation and amortisation 494 497 176 1,167 - 1,167
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
2. SEGMENT ANALYSIS (continued)
Continuing
--------------------------------------------------
26 Weeks ended 28 September Machine
2019 Tools
& Precision Industrial
Engineered Laser Head Office
Components Systems & unallocated Total Discontinued Group Total
Segmental analysis of
revenue $000 $000 $000 $000 $000 $000
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Total revenue 22,622 13,036 - 35,657 867 36,524
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Operating profit/(loss)
pre adjusting items 1,661 1,825 (960) 2,526 (73) 2,453
Adjusting items - - 96 96 (93) 3
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Operating profit/(loss) 1,661 1,825 (864) 2,622 (166) 2,456
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Other segmental information:
Reportable segment assets 51,381 18,359 1,404 71,144 949 72,093
Reportable segment liabilities (23,969) (6,222) (10,992) (41,183) - (41,183)
Intangible & Property,
plant and equipment additions 204 156 - 360 - 360
Depreciation and amortisation 494 416 88 998 - 998
------------------------------- ------------ ---------- -------------- -------- -------------- -------------
Continuing
------------------------------------------------------
Machine
52 Weeks ended 28 March tools
2020 & precision
engineered Industrial Head Office
components laser systems & unallocated Total Discontinued
Segmental analysis of revenue $000 $000 $000 $000 $000 Group Total
-------------------------------- ------------ -------------- -------------- -------- ------------ -----------
Total revenue 43,511 23,695 - 67,206 830 68,036
-------------------------------- ------------ -------------- -------------- -------- ------------ -----------
Segmental analysis of operating
profit/(loss) before Adjusting
Items 3,216 1,689 (2,178) 2,727 (417) 2,310
-------------------------------- ------------ -------------- -------------- -------- ------------ -----------
Adjusting Items - (254) (933) (1,187) (543) (1,730)
-------------------------------- ------------ -------------- -------------- -------- ------------ -----------
Group operating profit/(loss) 3,216 1,435 (3,111) 1,540 (960) 580
-------------------------------- ------------ -------------- -------------- -------- ------------ -----------
Other segmental information:
Reportable segment assets 35,073 14,164 16,726 65,963 - 65,963
Reportable segment liabilities (18,085) (6,990) (12,330) (37,405) - (37,405)
Intangible & Property,
plant and equipment additions 368 330 302 1,000 - 1,000
Depreciation and amortisation 901 883 446 2,230 - 2,230
3. Adjusting ITEMS
The directors have highlighted transactions which are material
and unrelated to the normal trading activity of the Group.
In the opinion of the directors the disclosure of these
transactions should be reported separately for a better
understanding of the underlying trading performance of the Group.
These underlying figures are used by the Board to monitor business
performance, form the basis of bonus incentives and are used for
the purposes of the bank covenants.
The items below correspond to the table below;
a) The buy-out of the Group pension scheme was completed in
April 2019 and a profit of $0.8m was recorded in the prior year as
the amount received was higher than the carrying value of the asset
previously recognised.
b) As a result of the outsourcing of manufacturing in the UK in
the prior year, the existing premises were vacated and not sub-let;
as a result a right of use asset impairment charge of $0.4m was
recognised in the prior year, in addition to a provision for
associated unavoidable costs, including amortisation and interest
under IFRS 16 totaling $0.4m.
c) A credit of $0.022m was recorded in financial income in
respect of the final salary pension scheme.
d) The amortisation of the loan note costs and associated costs
are shown in financial expense. These are non cash movements and
relate to the discounting of the loan notes and associated costs
which unwind over the term of the notes.
e) A charge was incurred as a result of the acquisition of
Control Micro Systems Inc for legal and professional fees.
f) Amortisation of intangible assets, including customer
relationships, acquired through the Control Micro Systems Inc
deal.
g) A charge of $0.3m was expensed in cost of sales relating to
US duty and tariff charges from prior year.
h) Costs in relation to the Group reorganisation.
i) In the prior year a charge was incurred which included
additional costs of the closure of the Gamet business in October
2019 as well as a loss on disposal as a result of receiving less
than originally anticipated.
30 September 28 September 2 8 March
2020 2019 202 0
$000 $000 $000
--------------------------------------------------- ------------ ------------ ---------
Items included in c ost of sales :
US Tariffs & Duty charges relating to prior years
(g) - - (254)
--------------------------------------------------- ------------ ------------ ---------
- - (254)
--------------------------------------------------- ------------ ------------ ---------
Items included in operating profit:
Unavoidable lease costs (b) - - (3 78)
Right of use impairment (b) - - (3 92)
Restructuring costs (h) (195) - -
Acquisition costs (e) - (384) (684)
Amortisation of acquisition intangibles (f) (175) (322) (288)
Pensions legal costs (a) - (7) -
Profit on disposal of pension scheme (a) - 809 809
(370 ) ( 713) ( 933)
--------------------------------------------------- ------------ ------------ ---------
Items included in financial income/(expense):
Pensions interest on surplus (c) - - 2 2
Financial income - - 22
--------------------------------------------------- ------------ ------------ ---------
Amortisation of loan notes and associated expenses
(d) (300) (259) (536)
Total adjusting items before tax (670) (163) (1,701)
--------------------------------------------------- ------------ ------------ ---------
Income tax on adjusting items - (283) -
Total adjusting items after tax (670) (446) (1,701)
Loss on discontinued activity (i) - (93) (543)
--------------------------------------------------- ------------ ------------ ---------
4. Financial income and expensE
3 0 September 28 September 28 March
202 0 2019 2020
$000 $000 $000
Bank and other interest 6 - 5
Interest on Pension surplus - - 22
---------------------------------- ------------- ------------ --------
Financial income 6 - 27
---------------------------------- ------------- ------------ --------
Bank overdraft and loan interest (9 2) ( 206) ( 315)
Loan note interest (463 ) (451 ) (918 )
Finance charges on finance leases - (5) (12 )
Pensions interest on deficit - - ( 44)
IFRS 16 - Lease interest (191) (201) (375)
Amortisation of loan note costs (300 ) (259 ) (536)
Financial expense ( 1,046) ( 1,122) (2,200 )
---------------------------------- ------------- ------------ --------
5. Taxation
3 0 September 28 September 2 8 March
202 0 2019 202 0 9
$000 $000 $000
----------------------------------------- ------------- ------------ ---------
Current tax:
Corporation tax at 19% (2019: 19%): - - -
Overseas taxation:
- current period - ( 155) 151
----------------------------------------- ------------- ------------ ---------
Total current tax charge - ( 155) 151
----------------------------------------- ------------- ------------ ---------
Deferred taxation:
- current period 140 ( 283) 891
- effect of rate change in UK - - 143
- prior period - - 43
----------------------------------------- ------------- ------------ ---------
Total deferred taxation charge 1 40 ( 283) 1,077
----------------------------------------- ------------- ------------ ---------
Taxation charged to the income statement 140 ( 438) 1,228
----------------------------------------- ------------- ------------ ---------
6. Earnings per share
The calculation of the basic earnings per share loss of 0.93c
(2019:profit 0.92c) is based on the earnings for the financial
period attributable to the Parent Company's shareholders of a loss
of $1,098,000 (2019 Profit $1,062,000) and on the weighted average
number of shares in issue during the period of 117,473,341 (2019
115,421,143). At 30 September 2020, there were 7,780,000 (2019:
7,500,000) potentially dilutive shares on option and 43,950,000
(2019: 43,950,000) share warrants exercisable at 20p. The weighted
average effect of these as at 30 September 2020 was 1,630,000
shares (2019: 2,969,376) giving a diluted earnings per share loss
of 0.93c (2019: 0.90c).
30 September 2 8 September 28 M arch
2020 2019 2020
---------------------------------------- ------------ ------------- -----------
Weighted average number of shares Shares Shares Shares
117,47 3 ,3
Issued shares at start of period 41 112,973,341 112,973,341
Effect of shares issued in the period
(4,500,000 on 21 June 2019) - 2 ,447,802 3 ,476,712
---------------------------------------- ------------ ------------- -----------
Weighted average number of shares at
end of period 117,473,341 1 15,421,143 116,450,053
---------------------------------------- ------------ ------------- -----------
Weighted average number of 7,780,000
(2019: 7,500,000) potentially dilutive
shares 1,630,000 2 ,969,376 2,877,486
---------------------------------------- ------------ ------------- -----------
Total Weighted average diluted shares 119,103,341 1 18,390,519 119,327,539
---------------------------------------- ------------ ------------- -----------
3 0 September 28 September 28 March 2020
202 0 2019
$000 $000 $000
Total post tax earnings - continuing
operations (1,098) 1,062 59 5
Total post tax earnings including discontinued
operations (1,098) 896 (36 5 )
----------------------------------------------- ------------- ------------ -------------
Basic EPS (0.93c) 0.92c 0.51c
Diluted EPS (0.93c) 0.90c 0.5 0 c
----------------------------------------------- ------------- ------------ -------------
Total including discontinued operations
Basic EPS (0.93c) 0.78c (0.31c)
Diluted EPS (0.93c) 0.76c (0.31c)
----------------------------------------------- ------------- ------------ -------------
Underlying earnings $000 $000 $000
----------------------------------------------- ------------- ------------ -------------
Total post tax earnings - continuing
operations (1,098) 1,062 59 5
Adjusting items - per note 3 (670) (446) 1,701
Underlying earnings after tax (428) 1,508 2,29 6
----------------------------------------------- ------------- ------------ -------------
Underlying basic EPS (0.36c) 1.24c 1.97c
Underlying diluted EPS (0.36c) 1.21c 1.92c
7. RECONCILIATION OF NET CASH FLOW TO NET DEBT
3 0 September 28 September 28 March
2020 2019 2020
$000 $000 $000
------------------------------------------------- ------------- ------------ --------
Increase/(decrease) in cash and cash equivalents 4 56 1,634 (952)
(4,358
(decrease)/Increase in debt and finance leases 2 ,345 ) (341)
------------------------------------------------- ------------- ------------ --------
(decrease)/Increase in net debt from cash flows 2,801 ( 2,724) (1,293)
Net debt at beginning of period (24,142) (14,541) (14,541)
Effect of IFRS 16 leasing (221) - (9,755)
Cash and debt through acquisition - - 1,451
Government assistance loans ( 3,783) - -
Loan costs amortisation and adjustments (305) (177) (421)
Exchange effects on net funds (574) 545 491
------------------------------------------------- ------------- ------------ --------
Net debt at end of period (26,224) (16,897) (24,142)
------------------------------------------------- ------------- ------------ --------
8. Analysis of net DEBT
At Exchange/ At
2 8 March Reserve 30 September
2020 movement Other Cash flows 2020
$000 $000 $000 $000 $000
---------------------------------- --------- --------- ------- ---------- ------------
Cash at bank and in hand 2,755 110 - 456 3,321
Short term deposits (included
within cash and cash equivalents
on the balance sheet) 123 6 - - 129
2,878 116 - 456 3,450
Debt due within one year (5,414) - - 1,172 (4,242)
Debt due after one year (2,217) - - 307 (1,910)
Loan Notes due after one year (9,437) (439) (305) - (10,181)
Lease liabilities (9,952) (251) (221) 866 (9,558)
Government assistance loans - - (3,783) - (3,783)
Total (24,142) (574) (4,309) 2,801 (26,224)
---------------------------------- --------- --------- ------- ---------- ------------
9. FAIR VALUE
The group considers that the carrying amount of the following
financial assets and financial liabilities are
a reasonable approximation of their fair value:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Loans and other borrowings
10. Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Group remain
those set out in the 2020 Annual Report. Those which are most
likely to impact the performance of the Group in the remaining
period of the current financial year are the continuing issues
surrounding the COVID-19 pandemic and Brexit which may result in
exposure to increased input costs, supply chain and delivery issues
and a downturn in its customers' end markets, particularly in North
America and Europe.
11. Post balance sheet events
T he freehold property in Brisbane, Australia, which had been
transferred to assets held for sale at the end of the period was
subsequently sold for $1.6m on 24 October 2020.
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END
IR EANALFEPEFFA
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