Half-year Report

RNS Number : 1030S
Goodwin PLC
16 December 2016
 

GOODWIN PLC

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the half year ended 31st October 2016

 

CHAIRMAN'S STATEMENT 

 

The pre-tax profit for the Group for the first six month period ending 31st October 2016 was £6.05 million (2015:£6.03 million).

 

The current workload stands at £84 million and sales orders despatched up to 31st October were £69.9 million (2015:£61.2 million) but the margins are lower due to the increased competition in the tighter market.

 

Growth areas in the refractory products continue to provide good opportunity whilst a better base load within the longer term defence work has given some reassurance in comparison to the continued low new project and procurement activity within the oil, gas and mining industries.

 

Some cost cutting has taken place during the period but the total number employed remains at just over 1,200, in part due to growth in our new products produced by Dupré Minerals and Goodwin Refractory Services, helped by the Group's presence in China, Thailand, India, Korea and Brazil.

 

Cash flow, credit insurance and political risk together with foreign exchange timings are areas of risk which continue to require careful attention. With our capital expenditure very much reduced, other than customer project financed development we are restricting expenditure.

 

With the likely continued low oil and gas and metal ore prices and thus constrained profitability and capital expenditure by our oil, gas and mining customer base, it would be unrealistic to expect any significant recovery / improvement in pre-tax profitability until after 2018.   Indeed, if it were not for the diversity provided by our refractory division, life would be much more difficult.

 

As in the five downturns over the past 35 years, we are making good use of this quieter trading time by working hard obtaining approvals and bringing our new products to market, such as our axial piston shut off and control valves, our new range of duplex and high impact resistant carbon steels as well as products that use our AVD™ vermiculite dispersions, such as fire extinguishers, lithium battery transport bags and fire resistant paints. For all the mentioned products we have patents applied for and they should provide the Group with a sound base to start growing again, such that we can be as proud of the next twenty years as we have been of the past twenty.

 

J. W. Goodwin

Chairman                                                                                                                                     16th December 2016

 

 

Management report  

 

 

The turnover for the first six months of this new financial year increased by 14.2%. The pre-tax profit has increased by 0.3% in the first half of the financial year.

 

The further depressed state of capital expenditure on oil, gas and mining projects will be a challenge to our mechanical engineering companies in 2017.  The markets for the refractory engineering division as a whole remain stable.

 

Financial Highlights


Six months ended

Year Ended


31st October

2016

31st October 2015

30th April

2016


£'m

£'m

£'m


Unaudited

Unaudited

Audited

Consolidated Results




Revenue

 

69.9

61.2

123.5

Operating profit

 

6.5

6.2

12.7

Profit before tax

 

6.0

6.0

12.3

Profit after tax

4.2

4.8

8.9









Capital Expenditure

3.2

5.8

12.1









Earnings per share (Basic and Diluted)

54.53p

68.01p

122.75p





 

Turnover

 

Revenue of £69,889,000 for the half year represents a 14.2% increase over the £61,220,000 achieved during the same period last year.

 

Profit Before Tax

 

Profit before tax for the six months of £6,047,000 is up 0.3% from the £6,028,000 achieved for the same six month period last year.

 

Risks and Uncertainties

 

The Group, mainly through its centralised management structure, makes best endeavours to have in place internal control procedures to identify and manage the key risks and uncertainties affecting the Group. We would refer you to page 6 of the Group annual accounts to 30th April 2016, which describes the principal risks and uncertainties, and to note 20 (page 47), which describes in detail the key financial risks and uncertainties affecting the business such as credit risk and foreign exchange risk.

 

Judging the future relationship of the major currency pairs of the US Dollar, Sterling and the Euro continues to be a challenge.

 

Report on Expected Developments

This report describes the expected developments of the Group during the year ended 30th April 2017. The report may contain forward-looking statements and information based on current expectations, and assumptions and forecasts made by the Group. These expectations and assumptions are subject to various known and unknown risks, uncertainties and other factors, which could lead to substantial differences between the actual future results, financial performance and the estimates and historical results given in this report. Many of these factors are outside the Group's control. The Group accepts no liability to publicly revise or update these forward-looking statements or adjust them to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.

 

2017/16 Outlook

The mechanical engineering division companies, with the exception of Easat Radar Systems, are seeing their order backlog go down as it is likely to continue to do so in the calendar year 2017. Goodwin International, which had the highest activity level in value terms in the oil and gas industry, has in part mitigated the severe purchasing activity decline in this sector by winning significant levels of business in the nuclear engineering sector, that has business to place for the next ten years. The hardest hit company is the foundry, Goodwin Steel Castings.  Whilst over the past three years it has done better than most other competitive foundries worldwide, it is now short of order input and as such is looking to ramp up new business for submarines in the UK and USA, following Goodwin's recent approval to produce HY80 cast material.

 

Going concern

The Group cash flow has deteriorated since the start of the new financial year. It is not unusual for the Group to see a deteriorating cash flow picture in the first half of the financial year due to the impact of dividend payments, working capital movements and our capital expenditure programmes.

Whilst the reduced level of capital expenditure, as referred to within the Chairman's Statement, has been helpful for cash flow in the first half of this financial year, the impact has been offset by the currency effects of Brexit and associated timing issues related to our foreign exchange hedge trades.

 

The Group's bank facilities have coped and are coping well with these temporary timing issues. We expect the position to reverse in the second half of the financial year as we rebalance our positions with customer currency inflows.

 

 

Responsibility statement of the Directors in respect of the half-yearly financial report

The Directors confirm to the best of their knowledge that 1) this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that 2) the Interim Management Report and condensed financial statements include a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year) and 4.2.8R (being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so).

 

 

J. W. Goodwin

Chairman                                                                                                                                                    16th December 2016

 

 

 

Condensed consolidated income statement

for the half year to 31st October 2016

 


 

 

Unaudited

Half Year to

31st October

2016

 

 

Unaudited

Half Year to

31st October

2015

 

 

Audited

Year Ended

30th April

2016

 

£'000

£'000

 

£'000

 

 

 

 

 

 

 

Continuing operations

 

 

 

 

 

Revenue

69,889

61,220

 

123,539

 

Cost of sales

(51,442)

(43,966)

 

(89,196)

 

 

              

              

 

              

 

Gross profit

18,447

17,254

 

34,343

 


 

 

 

 

 

Distribution expenses

(1,731)

(1,571)

 

(3,311)

 

Administrative expenses

(10,210)

(9,463)

 

(18,284)

 

 

              

              

 

              

 

Operating profit

6,506

6,220

 

12,748

 


 

 

 

 

 

Financial expenses

(560)

(357)

 

(775)

 

Share of profit of associate companies

101

165

 

341

 

 

              

              

 

              

 

Profit before taxation

6,047

6,028

 

12,314

 

 

 

 

 

 

 

Tax on profit

(1,829)

(1,202)

 

(3,376)

 

 

              

              

 

              

 

Profit after taxation

4,218

4,826

 

8,938

 

 

              

              

 

              

 

Attributable to:

 

 

 

 

 

Equity holders of the parent

3,927

4,897

 

8,838

 

Non-controlling interests

291

(71)

 

100

 


              

              

 

              

 

Profit for the period

4,218

4,826

 

8,938

 

 

              

              

 

              

 

Basic and diluted earnings per ordinary share (note 7)

54.53p

68.01p

 

122.75p

 

 

              

              

 

              

 

 

 

Condensed consolidated statement of comprehensive income

for the half year to 31st October 2016

 







 


 

 

Unaudited

Half Year

to

31st

October

2016


 

 

Unaudited

Half Year to

31st October

2015


 

 

Audited

 Year

Ended

30th

April

2016

 


£'000


£'000


£'000

 







 

Profit for the period

4,218


4,826


8,938

 







 

Other comprehensive expense






 







 

Items that are or may be reclassified subsequently to the income statement






 

Foreign exchange translation differences

5,796


(1,529)


279

 

Effective portion of changes in fair value of cash flow hedges

 

(15,696)


 

272


 

(728)

 

Change in fair value of cash flow hedges transferred to the income statement

 

(608)


 

(190)


 

(1,923)

 

Tax on items that are or may be reclassified subsequently to the income statement

 

2,765


 

(16)


 

516

 







 

Other comprehensive expense

for the period, net of income tax

 

(7,743)


 

(1,463)


 

(1,856)

 







 

 

Total comprehensive income for the period

 

(3,525)


 

3,363


 

7,082

 







 

Attributable to:






 

Equity holders of the parent

(4,618)


3,550


7,018

 

Non-controlling interests

1,093


(187)


64

 







 







 


(3,525)


3,363


7,082

 







 



 

 

 

 

 

Condensed consolidated statement of changes in equity

for the half year to 31st October 2016

 


 

 

 

 

 

Share capital

 

 

 

 

 

 

Translation

reserve

 

 

 

 

Cash flow hedging reserve

 

 

 

 

 

Retained earnings

Total

attributable to

 equity holders of the

parent

 

 

 

 

Non- controlling interests

 

 

 

 

 

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

£'000

Half year to 31st October 2016 (Unaudited)








Balance at 1st May 2016

720

(1,041)

(594)

87,209

86,294

3,823

90,117

Total comprehensive income:








Profit

-

-

-

3,927

3,927

291

4,218

Other comprehensive income:








Foreign exchange translation difference

-

4,994

-

-

4,994

802

5,796

Net movements on cash flow hedges

-

-

(13,539)

-

(13,539)

-

(13,539)

Total comprehensive income for the period

-

4,994

(13,539)

3,927

(4,618)

1,093

(3,525)

Dividends paid

-

-

-

(3,114)

(3,114)

(339)

(3,453)









Balance at 31st October 2016

720

3,953

(14,133)

88,022

78,562

4,577

83,139

























Half year to 31st October 2015 (Unaudited)








Balance at 1st May 2015

720

(1,356)

1,541

81,836

82,741

3,781

86,522

Total comprehensive income:








Profit

-

-

-

4,897

4,897

(71)

4,826

Other comprehensive income:








Foreign exchange translation difference

-

(1,413)

-

-

(1,413)

(116)

(1,529)

Net movements on cash flow hedges

-

-

66

-

66

-

66

Total comprehensive income for the period

-

(1,413)

66

4,897

3,550

(187)

3,363

Purchase of non-controlling interest without a change in control

 

-

 

-

 

-

 

(479)

 

(479)

 

149

 

(330)

Dividends paid

-

-

-

(3,049)

(3,049)

(158)

(3,207)









Balance at 31st October 2015

720

(2,769)

1,607

83,205

82,763

3,585

86,348

























Year ended 30th April 2016

(Audited)








Balance at 1st May 2015

720

(1,356)

1,541

81,836

82,741

3,781

86,522

Total comprehensive income:








Profit

-

-

-

8,838

8,838

100

8,938

Other comprehensive income:








Foreign exchange translation difference

-

315

-

-

315

(36)

279

Net movements on cash flow hedges

-

-

(2,135)

-

(2,135)

-

(2,135)

Total comprehensive income for the period

-

315

(2,135)

8,838

7,018

64

7,082

Transactions with owners of the Company recognised directly in equity:






 

174

 

174

Purchase of non-controlling interest without a change in control

 

-

 

-

 

-

 

(360)

 

(360)

 

-

 

(360)

Dividends paid

-

-

-

(3,105)

(3,105)

(196)

(3,301)









Balance at 30th April 2016

720

(1,041)

(594)

87,209

86,294

3,823

90,117









 

Condensed consolidated balance sheet

as at 31st October 2016

 

 

 

Unaudited

as at

31st October

2016

 

 

Unaudited

as at

31st October

2015


 

 

Audited

as at

30th April

2016

 

£'000

£'000

 

£'000

Non-current assets

 

 

 

 

Property, plant and equipment

65,207

58,456

 

62,530

Investments in associates

2,032

1,580

 

1,640

Intangible assets

18,584

15,470

 

17,565


             

             


              


85,823

75,506

 

81,735


             

             


              

Current assets

 

 

 

 

Inventories

43,605

34,617

 

35,631

Trade and other receivables

32,819

27,539

 

33,792

Derivative financial assets

1,235

3,843

 

2,107

Cash and cash equivalents

5,269

5,188

 

4,970


             

             


              

 

82,928

71,187

 

76,500


             

             


              

Total assets

168,751

146,693

 

158,235


             

             


              

Current liabilities

 

 

 

 

Bank overdrafts

9,347

11,409

 

5,383

Interest-bearing loans and borrowings

3,074

2,243

 

3,148

Trade and other payables

26,647

25,579

 

32,608

Deferred consideration

500

500

 

500

Derivative financial liabilities

13,293

1,563

 

2,818

Liabilities for current tax

2,234

1,075

 

1,785

Warranty provision

132

95

 

151


             

             


              


55,227

42,464

 

46,393


             

             


              

Non-current liabilities

 

 

 

 

Interest-bearing loans and borrowings

29,571

14,053

 

18,497

Warranty provision

296

337

 

179

Deferred tax liabilities

518

3,491

 

3,049


             

             


              


30,385

17,881

 

21,725


             

             


              

Total liabilities

85,612

60,345

 

68,118


             

             


              

Net assets

83,139

86,348

 

90,117


             

             


              

Equity attributable to equity holders of the parent

 

 

 

 

Share capital

720

720

 

720

Translation reserve

3,953

(2,769)

 

(1,041)

Cash flow hedge reserve

(14,133)

1,607

 

(594)

Retained earnings

88,022

83,205

 

87,209


             

             


              

Total equity attributable to equity holders of the parent

78,562

82,763

 

86,294

Non-controlling interests

4,577

3,585

 

3,823


             

             


              

Total equity

83,139

86,348

 

90,117


             

             


              

 

Condensed consolidated cash flow statement

for the half year ended 31st October 2016


 

Unaudited

Half Year to

31st October

2016

 

Unaudited

Half Year to

31st October

2015

 

Audited

Year Ended

30th April

2016

 

£'000

£'000

£'000

 

Cash flow from operating activities




 

Profit from continuing operations after tax

4,218

4,826

8,938

 

 Adjustments for:




 

  Depreciation

2,718

2,401

4,748

 

  Amortisation of intangible assets

393

184

583

 

  Impairment of intangible assets

-

-

340

 

  Gain arising on bargain purchase

-

-

(143)

 

  Financial expense

560

357

775

 

  (Profit) / loss  on sale of property, plant and equipment

(2)

3

(456)

 

  Share of profit of associate companies

(101)

(165)

(341)

 

  Tax expense

1,829

1,202

3,376

 


                

                

                

 

Operating profit before changes in working capital and provisions

9,615

8,808

17,820

 

  Increase in trade and other receivables

(2,972)

(1,496)

(5,707)

 

  Increase in inventories 

(6,167)

(2,085)

(2,357)

 

  Decrease  in trade and other payables

 

 

 

 

      (excluding payments on account)

(5,732)

(2,630)

(1,453)

 

 (Decrease) / increase in payments on account

(1,207)

1,532

5,402

 


                

                

              

 

Cash (outflow) / inflow from operations

(6,463)

4,129

13,705

 

  Interest paid

(469)

(329)

(703)

 

  Corporation tax paid

(1,460)

(1,653)

(3,058)

 

  Interest element of finance lease obligations

(91)

(28)

(20)

 


                

                

              

 

Net cash from operating activities

(8,483)

2,119

9,924

 


                

                

             

 

Cash flow from investing activities

 

 

 

 

  Proceeds from sale of property, plant and equipment

79

47

968

 

  Acquisition of intangible assets

(60)

(3,500)

(4,319)

 

  Acquisition of property, plant and equipment

(3,218)

(6,015)

(7,707)

 

R&D expenditure capitalised

(354)

-

(1,430)

 

  Acquisition of subsidiary

-

(1,667)

(2,005)

 

  Additional payment for existing subsidiary

-

(383)

(330)

 

  Additional investment in associate companies

-

(60)

(30)

 

  Dividends received from associate company

-

-

173

 


                

                

              

 

Net cash outflow from investing activities

(3,553)

(11,578)

(14,680)

 


                

                

             

 

Cash flows from financing activities

 

 

 

 

  Payment of capital element of finance lease obligations

(466)

(158)

(274)

 

  Dividends paid

(3,114)

(3,049)

(3,105)

 

  Dividends paid to non-controlling interests

(339)

(158)

(196)

 

  Proceeds from loans and committed facilities

11,459

-

3,305

 

  Repayment of loans and committed facilities

(21)

(1,000)

(3,000)

 

Finance fees

-

-

(100)

 


             

             

             

 

Net cash inflow /  (outflow)  from financing activities

7,519

(4,365)

(3,370)

 


             

             

              

 

Net decrease  in cash and cash equivalents

(4,517)

(13,824)

(8,126)

 





 

  Opening cash and cash equivalents

(413)

7,732

7,732

 

  Effect of exchange rate fluctuations on cash held

852

(129)

(19)

 


             

             

              

 

Closing cash and cash equivalents

(4,078)

(6,221)

(413)

 

 

 

 

             

             

              

 

 

 

Notes

 to the condensed consolidated financial statements

1          Reporting entity

Goodwin PLC (the "Company") is a company incorporated in England. The unaudited condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2016 comprise the Company, its subsidiaries, and the Group's interests in associates (together referred to as the "Group").

The audited consolidated financial statements of the Group as at and for the year ended 30 April 2016 are available upon request from the Company's registered office at Ivy House Foundry, Hanley, Stoke on Trent ST1 3NR or via the Company's web site:  www.goodwin.co.uk.

2          Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted in the EU.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements of the Group as at and for the year ended 30th April 2016.

The comparative figures for the financial year ended 30th April 2016 are extracts and not the full Group's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The Audit Committee has reviewed these unaudited condensed consolidated interim financial statements and has advised the Board of Directors that, taken as a whole, they are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's half year performance.  These unaudited condensed consolidated interim financial statements were approved by the Board of Directors on 16th December 2016.

3          Significant accounting policies

The accounting policies applied by the Group in these unaudited condensed consolidated financial statements are the same as those applied by the Group in its audited consolidated financial statements as at and for the year ended 30th April 2016. New standards to be adopted in the current year as below, effective for annual periods beginning on or after 1st January 2016, are not expected to have a significant impact on the financial statements.

·    Amendments to IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets: Clarification of acceptable Methods of Depreciation and Amortisation (effective for annual periods beginning on or after 1st January 2016)

·    Accounting for Acquisitions of Interests in Joint Operations - Amendments to IFRS 11 (effective for annual periods beginning on or after 1st January 2016)

·    Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 and IAS 38. (effective for annual periods beginning on or after 1st January 2016)

·    Equity Method in Separate Financial Statements - Amendments to IAS 27 (effective for annual periods beginning on or after 1st January 2016)

·    Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28 (effective for annual periods beginning on or after 1st January 2016)

·    Annual Improvements to IFRSs - 2012-2014 Cycle (effective for annual periods beginning on or after 1st  January 2016)

·    Applying the Consolidation Exception - Amendments to IFRS 10, IFRS 12 and IAS 28 (effective for annual periods beginning on or after 1st January 2016)

·    Annual Improvements to IFRSs - 2012-2014 Cycle Investment entities (effective for annual periods beginning on or after 1st  January 2016)

·    Investment entities: Applying the Consolidation Exception - Amendments to IFRS 10, IFRS 12 and IAS 28  (effective for annual periods beginning on or after 1st January 2016)

·    Disclosure Initiative - Amendments to IAS 1 (effective for annual periods beginning on or after 1st January 2016)

·    IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1st January 2016)

·    IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1st January 2016)

New IFRS standards, amendments and interpretations not adopted

The IASB and IFRIC have issued additional standards and amendments which are effective for periods starting after the date of these financial statements. The following standards and amendments have not yet been adopted by the Group:

·    IFRS 15 Revenue from Contracts with Customers (not yet endorsed.  IASB effective date for annual periods beginning on or after 1st January 2017)

·    Disclosure Initiative - Amendments to IAS 7 (not yet endorsed.  IASB effective date 1st January 2017)

·    IFRS 9 Financial Instruments (effective for annual periods beginning on or after 1st January 2018)

·    IFRS 16 Leases (not yet endorsed.  IASB effective date 1st January, 2019)

 

4          Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.

In preparing these unaudited consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements as at and for the year ended 30th April 2016.

The tax charge in the period is based on management's estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period, and the impact of any disallowed costs.

 

5          Business Segments

Products and services from which reportable segments derive their revenues

In accordance with the requirements of IFRS8 "Operating Segments" the Group's reportable segments based on information reported to the Group's Board of Directors for the purposes of resource allocation and assessment of segment performance are as follows:

·     Mechanical Engineering    - casting, machining and general engineering

·     Refractory   Engineering    - powder manufacture and mineral processing

Information regarding the Group's operating segments is reported below. 

 

 

Segment revenues and profits

 






Mechanical Engineering

Refractory Engineering

Sub Total


Unaudited

Unaudited

Audited

Unaudited

Unaudited

Audited

Unaudited

Unaudited

Audited


Half Year Ended 31st October 2016    

Half Year Ended

31st

October

2015

Year

Ended

30th

April

2016

Half Year Ended

31st

October 2016

Half Year Ended

31st

October

2015

Year

Ended

30th

April

2016

Half Year Ended

31st

October 2016

Half Year Ended

31st

October

2015

 

Year

Ended

30th

April

2016

 


£000

£000

£000

£000

£000

£000

£000

£000

£000

Revenue










External sales

50,262

44,816

88,747

19,627

16,404

34,792

69,889

61,220

123,539

Inter-segment sales

13,910

7,526

18,248

2,988

1,965

4,534

16,898

9,491

22,782


              

              

              

              

              

                  

                  

                  

              

Total revenue

64,172

52,342

106,995

22,615

18,369

39,326

86,787

70,711

146,321


              

              

              

              

              

                  




Reconciliation to consolidated revenues:








Inter-segment sales







(16,898)

    (9,491)

(22,782)






              

              

              

Consolidated revenue for the period





69,889

61,220

123,539






              

              

              

 

 






Mechanical Engineering

Refractory Engineering

Sub Total


Unaudited

Unaudited

Audited

Unaudited

Unaudited

Audited

Unaudited

Unaudited

Audited


Half Year Ended

31st

October 2016    

Half Year Ended

31st October 2015

 

Year

Ended

30th

April

2016

 

Half Year Ended

31st

October 2016

 

Half Year Ended

31st

October

2015

 

Year

Ended

30th

April

2016

 

Half Year Ended

31st

October 2016

 

Half Year Ended

31st

October

2015

 

Year

Ended

30th

April

2016

 


£000

£000

£000

£000

£000

£000

£000

£000

£000

Profits










Segment result

including associates

4,798

5,355

10,961

2,241

1,616

4,211

7,039

6,971

15,172


              

              

              

              

              

                  




Group administration  costs





(604)

(586)

(2,083)

Group finance and treasury costs





(376)

(357)

(775)





(12)

-

-






              

              

              

Consolidated profit before tax for the  period





6,047

6,028

12,314

Tax





(1,829)

 (1,202)

(3,376)






              

              

              

Consolidated profit after tax for the  period





4,218

4,826

8,938






              

              

              

 

 

Segmental assets and liabilities

 


Segmental total assets

Segmental total liabilities

Segmental net assets



   









Unaudited

Unaudited

Audited

Unaudited

Unaudited

Audited

Unaudited

Unaudited

Audited


Half Year Ended

31st

October 2016

£'000

 

Half Year

Ended

31st

October

 2015

£'000

 

Year

Ended

30th

April

 2016

£'000

 

Half Year Ended

31st

October 2016

£'000

 

Half Year Ended

31st

October

2015

£'000

 

Year

Ended

30th

April

2016

£'000

 

Half Year Ended

31st

October 2016

£'000

 

Half Year Ended

31st

October

2015

£'000

 

Year

Ended

30th

April

 2016

£'000

 

Mechanical Engineering

93,637

71,353

82,569

70,179

50,452

65,432

23,458

20,901

17,137

Refractory Engineering

44,726

39,158

43,207

26,998

20,265

28,455

17,728

18,893

14,752


                 

                 

                 

                 

                 

                 

                 

                 

                 

Sub total reportable segment

138,363

110,511

125,776

97,177

70,717

93,887

41,186

39,794

31,889


                 

                 

                 

                 

                 

                 




 

 

Goodwin PLC (the Company) net assets





68,467

66,491

71,620

Elimination  of  Goodwill PLC investments





(22,441)

(24,764)

(22,441)

Goodwill





9,689

9,288

8,994

Hedge reserve consolidation adjustments





(14,133)

1,607

(594)

Other consolidation adjustments





371

(6,068)

649








                 

                 

                 

Consolidated total net assets





83,139

86,348

90,117








                 

                 

                 

 

Segmental property, plant and equipment (PPE) capital expenditure






 

Goodwin PLC





2,095

3,221

5,633

Mechanical Engineering





737

1,485

3,405

Refractory Engineering





386

1,091

3,030








                 

                 

                 






3,218

5,797

12,068








                 

                 

                 

 

Geographical segments

 


 Half Year Ended 31st October 2016

Half Year Ended 31st October 2015


Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited

Unaudited


 

 

Revenue

 

Operational assets

Non- current assets

PPE

Capital expenditure

 

 

Revenue

 

Operational assets

Non- current assets

PPE

Capital expenditure


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000










UK

11,352

52,149

70,611

2,631

15,193

65,166

64,065

4,708

Rest of Europe

15,031

10,646

2,480

265

11,825

5,254

762

               98

USA

3,919

-

-

-

5,890

-

-

-

Pacific Basin

20,615

14,564

5,825

63

15,941

11,935

5,813

532

Rest of World

18,972

5,780

6,907

259

12,371

3,993

4,866

459


              

                 

                 

                 

              

                 

                 

                 

Total

69,889

83,139

85,823

3,218

61,220

86,348

75,506

5,797


              

              

              

                 

              

              

              

                 












Year Ended 30th April 2016






Audited

 

 

Revenue

Audited

 

Operational assets

Audited

Non- current assets

Audited

PPE

Capital expenditure






£'000

£'000

£'000

£'000










UK





36,776

66,292

69,383

9,771

Rest of Europe





21,656

8,035

1,120

453

USA





13,974

-

-

-

Pacific Basin





26,958

11,497

5,610

708

Rest of World





24,175

4,293

5,622

1,136






                 

                 

                 

                 

Total





123,539

90,117

81,735

12,068






                 

                 

                 

                 

The Group operates in the above principal locations. In presenting the information on geographical segments, revenue is based on the location of its customers and assets on the location of the assets.

 

 6.      Dividends

The Directors do not propose the payment of an interim dividend.

 

Unaudited

Unaudited

Audited

 

Half Year to

31st October

2016

Half Year to

31st October

2015

Year Ended

30th April

2016

 

£000

£000

£000

Equity Dividends Paid:

 

 

 

Ordinary dividends paid during the period in respect of the year ended 30th April 2016: (42.348p per share)

3,049

-

-

 

Ordinary dividends paid during the period in respect of the year ended 30th April 2015: (42.348p per share)

 

-

 

3,049

 

3,049

 

_____

_____

_____

 

Total dividends paid during the period

 

3,049

 

3,049

 

3,049

 

_____

_____

_____

 

 

7.         Earnings per share

The calculation of the basic earnings per ordinary share is based on the number of ordinary shares in issue during all periods of 7,200,000 and on the profit for the six months attributable to ordinary shareholders of £3,927,000 (six months to 31st October 2015: £4,897,000).

 

8.          Capital Management, issuance and repayment of debt

At 31st October 2016 the capital utilised was £115,785,000 as shown below:

 

 

 

Unaudited

as at

31st October

2016

 

 

Unaudited

as at

31st October

2015

 

 

Audited

as at

30th April

2016

 

£'000

£'000

£'000


 

 

 

Cash and cash equivalents

(5,269)

(5,188)

(4,970)

Finance leases

3,878

407

4,339

Bank loans and committed facilities

28,767

15,889

17,306

Bank overdrafts

9,347

11,409

5,383

Deferred consideration

500

500

500


             

             

              

Net debt

37,223

23,017

22,558


             

             

              

Total equity attributable to equity holders of the parent

78,562

82,763

86,294


             

             

              

Capital

115,785

105,780

108,852


             

             

              

 

9.         Property, Plant and Equipment

Fixed asset additions were £3,218,000 during the six month period to 31st October 2016 (2015: £5,797,000), with the Group progressing on its capital projects. Other movements in fixed assets were: depreciation of £2,718,000 (2015: £2,401,000); an increase due to the effect of exchange adjustments of £2,254,000 (2015: decrease of £588,000); disposals of £77,000 ( 2015: £50,000) and an acquisition of £Nil (2015: £39,000).

10.       Intangible assets

During the six month period to 31st October 2016, intangible assets were increased by £414,000 (2015: £3,500,000), via acquisitions of £Nil (2015: £1,405,000) and by additions to goodwill of £70,000 (2015: £53,000).  The current period goodwill addition relates to additional deferred tax liabilities in existing subsidiaries; the prior half year addition was an increased interest in existing subsidiaries by virtue of a minority dividend having been paid.  Intangible assets have been reduced by amortisation of £393,000 (2015: £184,000) and increased by exchange adjustments of £928,000 (2015: decreased by £169,000).

 

11.        Hedge reserve

The Group is exposed to sales and purchases in foreign currency and in order to mitigate the foreign exchange risk, the Group at its discretion uses hedges where deemed appropriate by the Board.  The majority of the Group's hedging activity is in relation to UK subsidiary sales contracts in US Dollars and Euros. Since the UK took the decision to leave the EU on the 23rd June 2016, Sterling has depreciated against all major currencies including the US Dollar and the Euro. As at the 31st October 2016, the cash flow hedge reserve is significantly negative which reflects the marked to market values of currencies sold to / purchased from the banks in relation to the Group's underlying currency sales and purchase requirements and does not impact on the reported profits of the Group.

 

12.       Total financial assets and financial liabilities

The table below sets out the Group's accounting classification of its financial assets and financial liabilities, and their carrying values/fair values at 31st October 2016. The fair values of all financial assets and financial liabilities are not materially different to the carrying values.

 

 

 

 

 

Carrying value/

Fair value

 

 

 

 

£000

Financial assets

 

 

 

 

Cash and cash equivalents

 

 

 

5,269

Receivables

 

 

 

 

Trade receivables

 

 

 

28,534

Other receivables

 

 

 

4,285

Designated cash flow hedge relationships

 

 

 

 

Derivative financial assets designated and effective

  as cash flow hedging instruments

 

 

 

 

1,235

                                                             

 

 

 

              

Total financial assets

 

 

 

39,323

 

 

 

 

              

Financial liabilities

 

 

 

 

 

 

 

 

 

Financial liabilities at amortised cost

 

 

 

 

Bank overdraft

 

 

 

9,347

Trade payables

 

 

 

12,916

Other payables

 

 

 

13,731

Deferred consideration

 

 

 

500

Finance lease liabilities

 

 

 

3,878

Bank loans

 

 

 

28,767

Corporation tax

 

 

 

2,234

Designated cash flow hedge relationships

 

 

 

 

Derivative financial liabilities designated and

  effective as cash flow hedging instruments

 

 

 

 

13,293

 

 

 

 

              

Total financial liabilities

 

 

 

84,666

 

 

 

 

              

Derivative financial assets and financial liabilities fair values in the above table are derived using Level 2 inputs as defined by IFRS 7 as detailed in the paragraph below*. All other financial assets and financial liabilities fair values are determined using Level 3 inputs.

 

*IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the source of inputs used to derive the fair value. This classification uses the following three-level hierarchy: 

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); 

Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).


This information is provided by RNS
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