Half Yearly Report

RNS Number : 3996U
Goodwin PLC
21 December 2011
 



GOODWIN PLC

IVY HOUSE FOUNDRY, HANLEY, STOKE-ON-TRENT

 

INTERIM REPORT

31ST OCTOBER 2011

 

 

CHAIRMAN'S STATEMENT

 

 

I am pleased to report that the pre-tax profits for the Group for the six month period ending 31st October 2011 were £6.1 million  (2010 £5.8 million) on revenue of £54.3 million, which was up by 18% on the revenue of £45.9 million for the same period last year.

 

Gross margin earned by the Group for the first half year increased by 8.4 %. The order book for the Group remains healthy in these difficult times and represents an order backlog on average of just over six months.

 

I am happy to report that Goodwin International Ltd and Shell International Global Solutions B.V. have signed a five-year Enterprise Framework Agreement that makes Goodwin International Ltd the single-source supplier of dual plate check valves for Shell's capital expenditure projects and MRO (Maintenance, Repairs and Operations) on a global basis.

 

Two of our Refractories Engineering companies, Dupré Minerals and Hoben International have performed particularly well in the first half year and are well positioned to complete the year in a similarly satisfactory manner.

 

Also our Brazilian pump company which we set up three years ago has now started to make significant profits and has achieved good market penetration with companies such as Vale S.A. with the Goodwin submersible pump.

 

As we wrote in our half yearly report this time last year, our biggest risk / unknown is the relationship of the major currency pairs and with the current topical news on the Euro this situation remains. Our global competitiveness should in part be protected by our overseas manufacturing activities, but the continued volatility of exchange rates remains a concern as it must be to all international trading companies.

 

As at the time of writing, the order input so far this financial year is 14 % up on this time last year and is at an historical high for the Group.

 

 

J. W. Goodwin

Chairman

 

21st December 2011

 

 

 

Management report

 

Increased investment by the oil and gas energy industry has enabled us to win increased levels of order input.

 

The sales order backlog stands at just over six months at the end of October 2011.

 

Financial Highlights

Unaudited

Half Year to

31st October

2011

Unaudited Half Year to 31st October 2010

Audited

Year ended

30th April

2011


£'m

£'m

£'m

Consolidated Results




Sales revenue

 

54.28

45.93

92.91

Operating profit

 

6.48

6.06

8.92

Profit before tax

 

6.10

5.80

8.21

Profit after tax

4.50

4.15

4.21

Capital Expenditure

2.89

2.71

5.15

Earnings per share (Basic and Diluted)

57.44p

49.90p

50.39p





 

Turnover

 

Sales revenue of £54.3 million for the half year represents a 18% increase over the £45.9 million achieved during the same period last year.

 

Profit Before Tax

 

Profit before tax for the six months of £6.1 million is up 5% from the £5.8 million achieved for the same period last year.

 

Risks and Uncertainties

 

The Group has in place internal control procedures which, in conjunction with its centralised management structure, identify and manage the key risks and uncertainties affecting the Group.

 

We would refer you to note 19 (page 33) of the Group annual accounts to 30th April 2011 which describes in detail the key risks and uncertainties affecting the business such as credit risk and foreign exchange risk. This position remains unchanged at the end of October 2011.

 

As we wrote in our half yearly report this time last year, our biggest risk / unknown is the relationship of the major currency pairs and with the current topical news on the Euro this situation remains. Our global competitiveness should in part be protected by our overseas manufacturing activities, but the continued volatility of exchange rates remains a concern as it must be to all international trading companies.

 

Report on Expected Developments

 

This report describes the expected developments of the Group during the year ended 30th April 2012. 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.

 

2012 Outlook

 

The order input so far this financial year is 14 % up on this time last year and is at an historical high for the Group providing good opportunity for the second half of the year.

 

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

The directors confirm to the best of their knowledge that 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 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) of the United Kingdom's Financial Service Authority.

 

 

J. W. Goodwin

Chairman

 

21st December 2011

 

 

Condensed consolidated income statement

for the half year to 31st October 2011

 


 

Unaudited

Half year to

31st October

2011

 

Unaudited

Half year to

31st October

2010

 

 

Year Ended

30th April

2011


£'000

£'000

£'000

Continuing operations




Revenue

54,279

45,933

92,908

Cost of sales

(39,258)

(32,078)

(67,480)


              

              

              

Gross profit

15,021

13,855

25,428





Distribution costs

(1,501)

(1,475)

(3,243)

Administrative expenses

(7,039)

(6,319)

(13,268)


              

              

              

Operating profit

6,481

6,061

8,917





Financial expenses

(608)

(436)

(1,054)

Share of profit of associates

224

181

342


              

              

              

Profit before taxation

6,097

5,806

8,205





Tax on profit

(1,598)

(1,659)

(3,997)


              

              

              

Profit after taxation

4,499

4,147

4,208


              

              

              

Attributable to:




Equity holders of the parent

4,136

3,593

3,628

Minority interest

363

554

580


              

              

              

Profit for the period

4,499

4,147

4,208


              

              

              

Basic and diluted earnings per ordinary share

57.44p

49.90p 

50.39p


              

              

              

 

 

Condensed consolidated statement of comprehensive income

for the half year to 31st October 2011

 


Unaudited Half year to 31st October 2011

       Unaudited    Half year to 31st October 2010

 

Year Ended

30th April

2011


£'000

£'000

£'000





Profit for the period

4,499

4,147

4,208





Other comprehensive income




Foreign exchange translation differences

(141)

(159)

(245)

Effective portion of changes in fair value of cash flow hedges

1,825

2,067

(352)

Change in fair value of cash flow hedges transferred to profit and loss

(3,237)

(363)

3,726

Tax charge recognised on income and expenses recognised directly in equity

 

367

 

(477)

 

(878)


              

              

              

Other comprehensive (expenditure) / income for the period, net of income tax

 (1,186)

1,068

2,251


              

              

              

Total comprehensive income for the period

3,313

5,215

6,459


              

              

              

 

Attributable to:




Equity holders of the parent

2,889

4,699

5,953

Minority interest

424

516

506


              

              

              


3,313

5,215

6,459


              

              

              





 

Condensed consolidated statement of changes in equity

for the half year to 31st October 2011

 

 

Share capital

Translation reserve

Cash flow hedging reserve

Retained earnings

Total

Minority interest

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Half year to 31st October 2011

 

 

 

 

 

 

Balance at 1st May 2011

720

1,028

2,422

36,710

40,880

3,437

44,317

Total comprehensive income for the period

-

(202)

(1,045)

4,136

2,889

424

3,313

Dividends paid

-

-

-

(2,100)

(2,100)

(59)

(2,159)

 

        

        

        

        

        

        

        

Balance at 31st October 2011 (Unaudited)

720

826

1,377

38,746

41,669

3,802

45,471

 

        

        

        

        

        

        

        

Half year to 31st October 2010

 

 

 

 

 

 

Balance at 1st May 2010

720

1,199

(74)

35,082

36,927

3,242

40,169

Total comprehensive income for the period

-

(120)

1,227

3,592

4,699

516

5,215

Dividends paid

-

-

-

(2,000)

(2,000)

(256)

(2,256)

 

        

        

        

        

        

        

        

Balance at 31st October 2010 (Unaudited)

720

1,079

1,153

36,674

39,626

3,502

43,128

 

        

        

        

        

        

        

        

Year ended 30th April 2011

 

 

 

 

 

 

Balance at 1st May 2010

720

1,199

(74)

35,082

36,927

3,242

40,169

Total comprehensive income for the period

-

(171)

2,496

3,628

5,953

506

6,459

Dividends paid

-

-

-

(2,000)

(2,000)

(311)

(2,311)

 

        

        

        

        

        

        

        

Balance at 30th April 2011

720

1,028

2,422

36,710

40,880

3,437

44,317

 

        

        

        

        

        

        

        

Condensed consolidated balance sheet

as at 31st October 2011

 


Unaudited

as at

31st October

2011

Unaudited

as at

31st October

2010

 

As at

30th April

2011


£'000

£'000

£'000

Non-current assets




Property, plant and equipment

26,495

24,596

25,431

Intangible assets

10,498

11,094

10,035

Investments  in associates

1,366

1,055

1,137


              

              

              


38,359

36,745

36,603


              

              

              

Current assets

Inventories

26,867

20,227

25,096

Trade and other receivables

26,711

26,247

25,664

Derivative financial assets

1,952

2,934

4,349

Cash and cash equivalents

5,236

3,485

4,049


              

              

              


60,766

52,893

59,158


              

              

              

Total assets

99,125

89,638

95,761


              

              

              

Current liabilities




Bank overdrafts

3,611

1,882

834

Other interest-bearing loans and borrowings

223

680

226

Trade and other payables

21,704

21,690

26,185

Deferred consideration

3,128

2,617

2,774

Derivative financial liabilities

269

1,051

1,246

Liabilities for current tax

1,861

2,379

1,713


              

              

              


30,796

30,299

32,978


              

              

              

Non-current liabilities




Other interest-bearing loans and borrowings

18,854

10,768

12,326

Deferred consideration

-

3,479

2,677

Derivative financial liabilities

700

-

-

Deferred tax liabilities

3,304

1,964

3,463


              

              

              


22,858

16,211

18,466


              

              

              

Total liabilities

53,654

46,510

51,444


              

              

              

Net assets

45,471

43,128

44,317






Equity attributable to equity holders of the parent




Share capital

720

720

720

Translation reserve

826

1,079

1,028

Cash flow hedge reserve

1,377

1,153

2,422

Retained earnings

38,746

36,674

36,710


              

              

              


41,669

39,626

40,880





Minority interest

3,802

3,502

3,437


              

              

              

Total equity

45,471

43,128

44,317


 

Condensed consolidated cash flow statement

for the half year ended 31st October 2011

 


Unaudited

Half year to

31st October

2011

Unaudited

Half year to

31st October

2010

 

Year ended

30th April

2011


£'000

£'000

£'000

 

Cash flow from operating activities




 

Profit for the period

4,499

4,147

4,208

 

 Adjustments for:




 

  Depreciation

1,442

1,231

2,817

 

  Amortisation of intangible assets

342

232

478

 

  Financial expense

608

436

1,054

 

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

(126)

4

10

 

  Share of profit of associate companies

(224)

(181)

(342)

 

  Tax expense

1,598

1,659

3,997

 


              

              

              

 

Operating profit before changes in working capital and provisions

8,139

7,528

12,222

 

 Increase in trade and other receivables

(820)

(5,590)

(3,916)

 

  Increase in inventories 

(1,713)

(2,181)

(7,006)

 

  (Decrease) / increase in trade and other payables




 

  (excluding payments on account)

(3,048)

14

1,653

 

  (Decrease) / increase in payments on account

(925)

(617)

737

 


              

              

              

 

Cash generated from operations

1,633

(846)

3,690

 





 

  Interest paid

(445)

(237)

(647)

 

  Corporation tax paid

(1,244)

(1,489)

(2,517)

 

  Interest element of finance lease obligations

(23)

(14)

(35)

 


              

              

              

 

Net cash  (outflow) / inflow from operating activities

(79)

(2,586)

491

 


              

              

              

 

Cash flow from investing activities




 

  Proceeds from sale of property, plant and equipment

318

12

96

 

  Acquisition of property, plant and equipment

(2,890)

(3,504)

(6,274)

 

  Acquisition of intangible assets

-

(655)

(674)

 

  Acquisition of subsidiary net of cash acquired

(502)

-

-

 

  Acquisition of associated undertaking

-

-

(237)

 

  Payment of deferred purchase creditor

(2,800)

-

-

 

  Dividends received from associate company

-

-

247

 


              

              

              

 

Net cash from investing activities

(5,874)

(4,147)

(6,842)

 


              

              

              

 

Cash flows from financing activities




 

  Payment of capital element of finance lease obligations

(108)

(177)

(304)

 

  Dividends paid

(2,100)

(2,000)

(2,000)

 

  Dividends paid to minority interests

(59)

-

(311)

 

  Proceeds from new loans / lease agreements

6,633

696

2,359

 


              

              

              

 

Net cash from financing activities

4,366

(1,481)

(256)

 


              

              

              

 


                           

                           

              

 

Net decrease in cash and cash equivalents

(1,587)

(8,214)

(6,607)

 





 

  Opening cash and cash equivalents

3,215

9,823

9,823

 

  Effect of exchange rate fluctuations on cash held

(3)

(6)

(1)

 


              

              

              

 

Closing cash and cash equivalents

1,625

1,603

3,215

 


 

 

 

 

Notes

 to the condensed consolidated financial statements

 

1          Reporting entity

Goodwin PLC (the "Company") is a company incorporated in England. The condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2011 comprises the Company, its subsidiaries, and the Group's interests in associates (together referred to as the "Group").

The consolidated financial statements of the Group as at and for the year ended 30th April 2011 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 consolidated financial statements of the Group as at and for the year ended 30th April 2011.

The comparative figures for the financial year ended 30th April 2011 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.

These condensed consolidated interim financial statements were approved by the Board of Directors on 21st December 2011.

3          Significant accounting policies

The accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30th April 2011.

 

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 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 consolidated financial statements as at and for the year ended 30th April 2011.

 

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:

Engineering                          - casting, machining and general engineering

Refractories Engineering   - powder manufacture and mineral processing

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

 

Segment revenues and profits

 






Engineering

Refractories Engineering

Sub Total


Unuadited

Unaudited


Unaudited

Unaudited


Unuadited

Unaudited



Half year ended 31st October 2011    

Half year ended 31st October 2010

Year ended 30th April 2011

Half year ended 31st October 2011

Half year ended 31st October 2010

 

Year ended 30th April 2011

 

Half year ended 31st October 2011

 

Half year ended 31st October 2010

 

Year ended 30th April 2011

 


£000

£000

£000

£000

£000

£000

£000

£000

£000

Revenue










External sales

39,507

33,008

65,139

14,772

12,988

27,769

54,279

45,996

92,908

Intra-Group sales

10,762

7,004

18,014

2,639

2,337

4,046

13,401

9,341

22,060


              

              

              

              

              

            

                  

              

              

Total revenue

50,269

40,012

83,153

17,411

15,325

31,815

67,680

55,337

114,968


              

              

              

              

              

            

                  

                  

                  

 

Reconciliation to consolidated revenues:








Intra-Group sales







    (13,401)

(9,341)

(22,060)

Net consolidation adjustments







-

(63)

-






              

              

              

Consolidated revenue for the period





54,279

45,933

92,908






              

              

              

 






Engineering

Refractories Engineering

Sub Total



Restated*



Restated*



Restated*



Unaudited

Unaudited


Unaudited

Unaudited


Unuadited

Unaudited



Half year ended 31st October 2011    

Half year ended 31st October 2010

 

Year ended 30th April 2011

 

Half year ended 31st October 2011

 

Half year ended 31st October 2010

 

Year ended 30th April 2011

 

Half year ended 31st October 2011

 

Half year ended 31st October 2010

 

Year ended 30th April 2011

 


£000

£000

£000

£000

£000

£000

£000

£000

£000

Profits










Segment result including associates

4,230

4,945*

6,303

3,010

1,898*

4,275

7,240

6,843*

10,578


              

              

              

              

              

            




Group administration  costs





(535)

(601)*

(1,319)

Group finance and treasury costs





(608)

(436)*

(1,054)














              

              

              

Consolidated profit before  tax for the  period





6,097

5,806

8,205

Tax





 (1,598)

(1,659)

(3,997)






              

              

              

Consolidated profit after  tax for the  period





4,499

4,147

4,208






              

              

              

* Following a review by the directors during the year ended 30th April 2011, where certain administration, finance and treasury costs for the prior year were reclassified in the segmental analysis, the half year figures for 31st October 2010 in the above segmental analysis have been restated to ensure consistency in treatment between the subsidiaries in the Group and comparability with the current half year's segmental figures.

 

Segmental assets and liabilities

 


Segmental total assets

Segmental total liabilities

Segmental net assets



Restated*



Restated*






Unaudited

Unaudited


Unaudited

Unaudited


Unaudited

Unaudited



Half year ended 31st October 2011

 

Half year

ended 31st October

 2010

 

Year

ended 30th April

 2011

 

Half year ended 31st October 2011

 

Half year ended 31st October 2010

 

Year

ended 30th April

2011

 

Half year ended 31st October 2011

 

Half year ended 31st October 2010

 

Year

ended 30th April 2011

 


£000

£000

£000

£000

£000

£000

£000

£000

£000

Engineering

57,018

47,581*

54,891

42,406

31,214*

42,998

14,612

16,367

11,893

Refractories Engineering

23,227

20,972*

20,461

10,427

9,971*

9,548

12,800

11,001

10,913


                 

                 

                 

                 

                 

                 

                 

                 

                 

Sub total reportable segment

80,245

68,553*

75,352

52,833

41,185*

52,546

27,412

27,368

22,806


                 

                 

                 

                 

                 

                 




 

Goodwin PLC (the Company) net assets





25,631

22,672

27,996

Investments elimination / Goodwill adjustments





(7,668)

(6,062)

(7,374)

Other consolidation adjustments





(981)

(3,324)

(1,499)

Foreign exchange / IAS 39





1,077

2,474

2,388








                 

                 

                 

Consolidated total net assets





45,471

43,128

44,317








                 

                 

                 

 

* Segmental total assets and segmental total liabilities at 31st October 2010 have been restated to ensure consistency in treatment between the subsidiaries in the Group and comparability with the current half year's segmental figures. Segmental net assets are not affected by this restatement.

 

Geographical segments

 

 

 Half year ended

31st October 2011

Half year ended

31st October 2010


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 expendi-ture

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

UK

10,244

32,716

32,151

1,974

9,979

         32,531

31,587

1,360

Rest of Europe

12,900

4,388

623

                  71

9,594

3,427

701

148

USA

4,018

-

-

-

5,106

-

-

-

Pacific Basin

14,005

5,436

327

51

10,878

3,955

237

19

Rest of world

13,112

2,931

5,258

794

10,376

3,215

4,220

1,184

 

              

                 

                 

                 

                 

                 

                 

                 

Total

54,279

45,471

38,359

2,890

45,933

43,128

36,745

2,711

 

              

              

              

                 

                 

                 

                 

                 

 

 

 

 

 

Year ended 30th April 2011

 

 

 

 

 

Revenue

Operational assets

Non current assets

PPE Capital expendi-ture

 

 

 

 

 

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

UK

 

 

 

 

17,148

33,148

31,028

2,712

Rest of Europe

 

 

 

 

24,540

3,920

684

320

USA

 

 

 

 

         11,441

-

-

-

Pacific Basin

 

 

 

 

23,471

4,137

71

199

Rest of world

 

 

 

 

16,308

3,112

4,820

1,923

 

 

 

 

 

                 

                 

                 

                 

Total

 

 

 

 

92,908

44,317

36,603

5,154

 

 

 

 

 

                 

                 

                 

                 

 

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


 

Half year ended

31st October

2011

Half year ended

31st October

2010

Year ended

30th April

2011

 

£000

£000

£000

Equity Dividends Paid:

 

 

 

Paid ordinary dividend 30th April 2011:(29.166p per share)

2,100

-

-

Paid ordinary dividend 30th April 2010:(27.777p per share)

-

2,000

2,000

 

 

 

 

 

 

 

 

7          Earnings per share

The calculation of the 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 £4,136,000 (six months to 31st October 2010: £3,593,000). The company has no share options or other diluting interest and accordingly, there is no difference in the calculation of diluted earnings per share.

 

8.         Issuance and repayment of debt

During the six months to 31st October 2011, the Group has utilised a further £6,633,000 of its borrowing facilities.

 

9.         Property, Plant and Equipment

During the six month period, the Group incurred fixed asset expenditure of £2,890,000 (six months to 31st October 2010: £2,711,000) on various capital projects throughout the Group. Depreciation in the six months to 31st October 2011 was £1,442,000 (six months to 31 October 2010: £1,231,000). Other movements in the six months to 31st October 2011 were  exchange adjustments of £232,000, disposals of £192,000 and £40,000 of fixed assets as part of the acquisition of new subsidiaries.

 

10.       Intangible assets

During the six month period, additions to intangible fixed assets were £805,000 of intangibles acquired with acquisitions (note 11). Amortisation of intangible assets in the six months to 31st October 2011 was £342,000 (six months to 31st October 2010: £232,000).

 

11.       Acquisitions

Three small subsidiaries were acquired during the six months to 31st October 2011 for a consideration of £884,000. Taking into account deferred consideration of £337,000 and net cash acquired of £45,000, this resulted in the cash outflow for acquisitions of £502,000. Assets acquired included a provisional value of intangible assets of £805,000.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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