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Goodwin PLC (GDWN)

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Thursday 19 December, 2019

Goodwin PLC

Half-year Report

RNS Number : 3973X
Goodwin PLC
19 December 2019
 

 

 

GOODWIN PLC

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the half year ended 31st October 2019

 

CHAIRMAN'S STATEMENT

 

The pre-tax profit for the Group for the six month period ending 31st October 2019 was £7.4 million some 5.1% down (2018 £7.8 million). This deterioration was despite the turnover for the period being marginally in front with a 3.8% increase. This is a feature of the disruption caused by the commotions in our parliamentary system over the past six months where the uncertainty has temporarily stalled projects.

With further clarity over Brexit, we will be looking to start capitalising from the tremendous success our Group companies have had in winning large amounts of business from new market areas.

We have every reason to believe that the new financial year will allow our Group companies to start increasing profits.   We also expect to have further successes in winning significant new business due to the dedication and hard work of all who work within them.

T. J. W. Goodwin

 

Chairman

19th December 2019

 

Management Report

Financial Highlights

 

Unaudited
Half Year to

Unaudited
Half Year to

Audited
Year Ended

 

31st October

31st October

30th April

 

2019

2018

2019

 

£'m

£'m

£'m

Consolidated Results

 

 

 

Revenue

70.1

67.5

127.0

Operating profit

7.8

7.8

16.4

Profit before tax

7.4

7.8

16.4

Profit after tax

5.6

5.7

12.4

Capital Expenditure

2.9

5.7

10.7

Earnings per share - basic

72.92p

74.90p

159.79p

Earnings per share - diluted

69.77p

73.44p

149.65p

 

 

 

 

 

IFRS 16

The Group adopted IFRS 16 from 1 May 2019, using the modified retrospective approach to transition, such that prior periods have not been restated.  The impact of the change in accounting policy is outlined in note 5.

Turnover

Sales revenue of £70,090,000 for the half year represents a 3.8 % increase from the £67,548,000 achieved during the same period last year.

Profit Before Tax

Profit before tax for the six months of £7,406,000 is down 5.1% from the £7,804,000 achieved for the same six month period last year.

Key performance indicators

The key performance indicators for the business are listed below; the prior period KPIs have not been restated to reflect IFRS 16.

 

Unaudited
Half Year to

Unaudited
Half Year to

Audited
Year Ended

 

31st October

31st October

30th April

 

2019

2018

2019

 

 

 

 

Gross profit as a % of turnover

27.8

29.5

32.0

Other income (in £ millions)

0.7

-

-

Profit before tax (in £ millions)

7.4

7.8

16.4

 

 

 

 

Gearing % (excluding deferred consideration and right-of-use lease liabilities)

25.7

12.1

20.0

 

 

 

 

Depreciation (in £ millions)

3.2

2.8

5.8

Depreciation of right-of-use assets (in £ millions)

0.4

-

-

Amortisation (in £ millions)

0.5

0.5

1.3

Equity-settled share-based provision (in £ millions)

-

0.5

1.2

Total non cash charges (in £ millions)

4.1

3.8

8.3

 

Alternative performance measures mentioned above are defined in note 36 on page 82 of the Group Annual accounts to 30th April 2019.

2020/21 Outlook

The Group is likely to show a similar profitability in the next six months as it achieved in the first six months of the year, with an improving cash flow by the 30th April 2020.

In the Mechanical Engineering Division, although the petrochemical market has not yet recovered, we continue to have a positive outlook based on the fact that the demand for energy is set to increase.   This is propelled to a large extent by increases in wealth in the developing economies which obtain a growing share of their power from the US LNG market, in which Noreva and Goodwin International are well established.

Easat Radar Systems has been successful in winning an order to supply two turnkey surveillance systems for an Asian air force.  The order is the first overseas system order for the company opening the door to a larger market within which, with its competitive offering as a result of the acquisition of NRPL, the company is expected to prosper. 

Within the Refractory Engineering Division, there has been an unforeseen decrease in demand for the consumer orientated jewellery products for which we globally supply the casting powder. We believe this is due mainly to the uncertainty around the ongoing USA and China trade war and the rise in gold price since May that peaked in August and has declined ever since.   However, at the time of writing, it appears the market is beginning to improve.

Sales of the AVD fire extinguishers and extinguishing agent are starting to grow with a constant monthly sales stream. First adopters have primarily been companies that manufacture products incorporating lithium ion batteries, such as e-scooters, vehicles and green energy storage systems. We are in technical and supply discussion with several large battery manufacturers both in the UK and overseas which may bode well over time.

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 pages 10 and 11 of the Group Annual Accounts to 30th April 2019 which describe the principal risks and uncertainties, and to note 27 (starting on page 72) 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 2020. 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.

Going concern

The Group continues to trade profitably and with the current order book level we are confident that this will continue and improve, especially as we move in to the next financial year. As in previous periods, the levels of depreciation and amortisation (both non cash items) remain significant thus increasing the cash generating capability of the Group. As at 31st October 2019, the Group net debt stood at £27.2 million as set out in note 11 to these accounts. Whilst the net debt levels are higher than those recorded as at April 2019 and October 2018 the gearing level at 25.7% is still modest and our banking headroom (facilities versus utilisation) is significant. Furthermore, within the second half of this financial year we would expect to significantly reduce our investment in working capital.  Given the foregoing, the Directors do not see an issue with the continued ability of the Group to meet its financial commitments and so have drawn up these accounts on a going concern basis.

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).

 

T. J. W. Goodwin

 

Chairman

19th December 2019

 

 

 

 

Condensed Consolidated Statement of Profit or Loss

for the half year to 31st October 2019

 

 

Unaudited

Unaudited

Audited

 

Half Year to

Half Year to

Year Ended

 

31st October

31st October

30th April

 

2019

2018

2019

 

£'000

£'000

£'000

Continuing operations

 

 

 

Revenue

70,090

67,548

127,046

Cost of sales

(50,610)

(47,608)

(86,414)

 

                 

                 

                 

Gross profit

19,480

19,940

40,632

Other income

689

-

-

Distribution expenses

(1,629)

(1,564)

(3,016)

Administrative expenses

(10,715)

(10,539)

(21,205)

 

                 

                 

                 

Operating profit

7,825

7,837

16,411

Financial expenses

(449)

(303)

(234)

Share of profit of associate companies

30

270

233

 

                 

                 

                 

Profit before taxation

7,406

7,804

16,410

Tax on profit

(1,812)

(2,076)

(3,963)

 

                 

                 

                 

Profit after taxation

5,594

5,728

12,447

 

                 

                 

                 

Attributable to:

 

 

 

Equity holders of the parent

5,260

5,393

11,505

Non-controlling interests

334

335

942

 

                 

                 

                 

Profit for the period

5,594

5,728

12,447

 

                 

                 

                 

Basic earnings per ordinary share (Note 10)

72.92p

74.90p

159.79p

 

                 

                 

                 

Diluted earnings per ordinary share (Note 10)

69.77p

73.44p

149.65p

 

                 

                 

                 

 

Condensed Consolidated Statement of Comprehensive Income

for the half year to 31st October 2019

 

 

Unaudited

Unaudited

Audited

 

Half Year to

Half Year to

Year Ended

 

31st October

31st October

30th April

 

2019

2018

2019

 

£'000

£'000

£'000

 

 

 

 

Profit for the period

5,594

5,728

12,447

 

 

 

 

Other comprehensive income / (expense)

 

 

 

 

 

 

 

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

 

 

 

Foreign exchange translation differences

(162)

(259)

(383)

Goodwill arising from purchase of non-controlling interest in subsidiaries

(63)

-

(772)

Effective portion of changes in fair value of cash flow hedges

1,928

(3,023)

(644)

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

379

-

180

Cost of hedging

(239)

595

(440)

Tax on items that are or may be reclassified subsequently to profit or loss

(347)

413

154

 

                 

                 

                 

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

1,496

(2,274)

(1,905)

 

                 

                 

                 

Total comprehensive income for the period

7,090

3,454

10,542

 

                 

                 

                 

Attributable to:

 

 

 

Equity holders of the parent

6,761

3,183

9,528

Non-controlling interests

329

271

1,014

 

                 

                 

                 

 

7,090

3,454

10,542

 

                 

                 

                 

 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2019

 

 

Share capital

Translat-ion reserve

Share-based payments reserve

Cash flow hedge reserve

Cost of hedging reserve

Retained earnings

Total attribut-able to equity holders of the parent

Non-controll-ing interests

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Half year to 31st October 2019

(Unaudited)

 

 

 

 

 

 

 

 

 

Balance at 1st May 2019

720

1,044

4,991

(573)

(426)

99,409

105,165

4,126

109,291

Total comprehensive income:

 

 

 

 

 

 

 

 

 

Profit

-

-

-

-

-

5,260

5,260

334

5,594

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Goodwill arising from purchase of NCI interest in subsidiary

-

-

-

-

-

(63)

(63)

-

(63)

Foreign exchange translation differences

-

(198)

-

-

-

-

(198)

36

(162)

Net movements on cash flow hedges

-

-

-

1,937

(175)

-

1,762

(41)

1,721

Total comprehensive income for the period

-

(198)

-

1,937

(175)

5,197

6,761

329

7,090

Issue of shares

16

-

-

-

-

-

16

-

16

Dividends paid

-

-

-

-

-

(6,927)

(6,927)

-

(6,927)

Acquisition of NCI without a change of control

-

-

-

-

-

-

-

(11)

(11)

Other transactions

-

358

-

-

-

(358)

-

-

-

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

Balance at 31st October 2019

736

1,204

4,991

1,364

(601)

97,321

105,015

4,444

109,459

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2019

 

Share capital

Translat-ion reserve

Share-based payments reserve

Cash flow hedge reserve

Cost of hedging reserve

Retained earnings

Total attribut-able to equity holders of the parent

Non-controll-ing interests

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Half year to 31st October 2018

(Unaudited)

 

 

 

 

 

 

 

 

 

Balance at 1st May 2018

720

1,879

1,625

(224)

-

95,568

99,568

5,259

104,827

Adjustment on initial application of IFRS 9 (net of tax)

-

-

-

52

(52)

-

-

-

-

Adjustment on initial application of IFRS 15 (net of tax) - original

-

-

-

-

-

285

285

(56)

229

Adjustment on initial application of IFRS 15 (net of tax) - revision

-

-

-

-

-

(969)

(969)

(294)

(1,263)

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

Adjusted balance at 1st May 2018

720

1,879

1,625

(172)

(52)

94,884

98,884

4,909

103,793

Total comprehensive income:

 

 

 

 

 

 

 

 

 

Profit

-

-

-

-

-

5,393

5,393

335

5,728

Other comprehensive income:

 

 

 

 

 

 

 

 

 

Foreign exchange translation differences

-

(211)

-

-

-

-

(211)

(48)

(259)

Net movements on cash flow hedges

-

-

-

(2,594)

595

-

(1,999)

(16)

(2,015)

Total comprehensive income for the period

-

(211)

-

(2,594)

595

5,393

3,183

271

3,454

Equity-settled share-based payment transactions

-

-

523

-

-

-

523

-

523

Dividends paid

-

-

-

-

-

(6,074)

(6,074)

(451)

(6,525)

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

Balance at 31st October 2018

720

1,668

2,148

(2,766)

543

94,203

96,516

4,729

101,245

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

 

 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2019

 

 

Share capital

Translat-ion reserve

Share-based payments reserve

Cash flow hedge reserve

Cost of hedging reserve

Retained earnings

Total attribut-able to equity holders of the parent

Non-controll-ing interests

Total equity

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

Year ended 30th April 2019

 

 

 

 

 

 

 

 

 

 

Balance at 1st May 2018

720

1,879

1,625

(224)

-

95,568

99,568

5,259

104,827

 

Adjustment on initial application of IFRS 9 (net of tax)

-

-

-

52

(52)

-

-

-

-

Adjustment on initial application of IFRS 15 (net of tax)

-

-

-

-

-

(684)

(684)

(350)

(1,034)

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

Adjusted balance at 1st May 2018

720

1,879

1,625

(172)

(52)

94,884

98,884

4,909

103,793

Total comprehensive income:

 

 

 

 

 

 

 

 

 

 

Profit

-

-

-

-

-

11,505

11,505

942

12,447

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation differences

-

(430)

-

-

-

-

(430)

47

(383)

 

Goodwill arising from purchase of NCI interest in subsidiaries

-

(180)

-

-

-

(592)

(772)

-

(772)

 

Net movements on cash flow hedges

-

-

-

(401)

(374)

-

(775)

25

(750)

 

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

Total comprehensive income for the period

-

(610)

-

(401)

(374)

10,913

9,528

1,014

10,542

 

Equity-settled share-based payment transactions

-

-

1,220

-

-

-

1,220

-

1,220

 

Tax on equity-settled share-based payment transactions

-

-

2,146

-

-

-

2,146

-

2,146

 

Dividends paid

-

-

-

-

-

(6,126)

(6,126)

(451)

(6,577)

 

Acquisition of NCI without a change of control

-

-

-

-

-

-

-

(1,750)

(1,750)

 

Disposal of equity investments

-

(225)

-

-

-

-

(225)

-

(225)

 

Acquisition of subsidiary with NCI

-

-

-

-

-

-

-

142

142

 

Capital contribution

-

-

-

-

-

(262)

(262)

262

-

 

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

Balance at 30th April 2019

720

1,044

4,991

(573)

(426)

99,409

105,165

4,126

109,291

 

 

                 

                 

                 

                 

                 

                 

                 

                 

                 

                       

 

Condensed Consolidated Balance Sheet

as at 31st October 2019

 

 

Unaudited

Unaudited

Audited

 

 

as at

as at

as at     

 

 

31st October

31st October

 30th April

 

 

2019

2018

2019

 

 

£'000

£'000

£'000

Non-current assets

 

 

 

 

Property, plant and equipment

 

63,481

71,713

74,106

Right-of-use assets

 

11,798

-

-

Investment in associates

 

817

2,290

739

Intangible assets

 

22,483

21,308

22,354

Other financial assets at amortised cost

 

361

564

505

 

 

                 

                 

                 

 

 

98,940

95,875

97,704

 

 

                 

                 

                 

Current assets

 

 

 

 

Inventories

 

56,913

33,916

50,524

Contract assets

 

9,846

5,264

3,698

Trade and other financial assets

 

24,620

22,284

24,964

Other receivables

 

3,694

1,834

2,715

Deferred tax asset

 

84

-

-

Derivative financial assets

 

2,247

24

195

Cash and cash equivalents

 

9,416

7,577

9,640

 

 

                 

                 

                 

 

 

106,820

70,899

91,736

 

 

                 

                 

                 

Total assets

 

205,760

166,774

189,440

 

 

                 

                 

                 

Current liabilities

 

 

 

 

Bank overdrafts

 

3,340

3,654

9,147

Interest-bearing loans

 

4,080

5,088

112

Lease liabilities

 

2,131

902

939

Contract liabilities*

 

27,068

10,505

18,002

Trade payables and other financial liabilities

 

18,174

20,078

20,570

Other payables

 

6,471

4,461

4,771

Deferred consideration

 

204

500

204

Derivative financial liabilities

 

1,552

4,240

1,693

Liabilities for current tax

 

1,393

2,388

2,356

Warranty provision

 

235

99

261

 

 

                 

                 

                 

 

 

64,648

51,915

58,055

 

 

                 

                 

                 

Non-current liabilities

 

 

 

 

Interest-bearing loans

 

22,310

8,000

19,322

Lease liabilities

 

6,342

1,637

1,164

Warranty provision

 

219

439

232

Deferred tax liabilities

 

2,782

3,538

1,376

 

 

                 

                 

                 

 

 

31,653

13,614

22,094

 

 

                 

                 

                 

Total liabilities

 

96,301

65,529

80,149

 

 

                 

                 

                 

Net assets

 

109,459

101,245

109,291

 

 

                 

                 

                 

 

 

 

 

 

Equity attributable to equity holders of the parent

 

 

 

Share capital

 

736

720

720

Translation reserve

 

1,204

1,668

1,044

Share-based payments reserve

 

4,991

2,148

4,991

Cash flow hedge reserve

 

1,364

(2,766)

(573)

Cost of hedging reserve

 

(601)

543

(426)

Retained earnings

 

97,321

94,203

99,409

 

 

                 

                 

                 

Total equity attributable to equity holders of the parent

105,015

96,516

105,165

Non-controlling interests

 

4,444

4,729

4,126

 

 

                 

                 

                 

Total equity

 

109,459

101,245

109,291

*Contract liabilities include advance payments from customers of £26,820,000, with the balance of £248,000 being costs accrued for contracts.

 

Condensed Consolidated Statement of Cash Flows

for the half year ended 31st October 2019

 

Unaudited

Unaudited

Audited

 

Half Year  to 31st October 2019

Half Year       to 31st October    2018

Year ended 30th        April       2019

 

£'000

£'000

£'000

Cash flow from operating activities

 

 

 

Profit from continuing operations after tax

5,594

5,728

12,447

Adjustments for:

 

 

 

Depreciation

3,180

2,764

5,819

Depreciation of right-of-use assets

389

-

-

Amortisation of intangible assets

484

549

1,312

Financial expenses

449

303

234

Foreign exchange losses / (gains)

143

(127)

66

Loss / (profit) on sale of property, plant and equipment

2

(11)

13

Share of profit of associate companies

(30)

(270)

(233)

Equity-settled share-based provision

-

523

1,220

Tax expense

1,812

2,076

3,963

 

                 

                 

                 

Operating profit before changes in working capital and provisions

12,023

11,535

24,841

Increase in inventories

(6,430)

(2,442)

(11,816)

(Increase) / decrease in contract assets

(6,107)

(1,389)

1,361

Increase in trade and other receivables

(849)

(2,175)

(4,288)

Increase in contract liabilities

8,829

4,309

3,401

(Decrease) / increase in trade and other payables

(522)

3,005

1,965

(Increase) / decrease in unhedged derivative balances

(126)

617

(579)

 

                 

                 

                 

Cash inflow from operations

6,818

13,460

14,885

Interest paid

(320)

(193)

(524)

Corporation tax paid

(1,775)

(906)

(3,093)

Interest element of lease obligations

(48)

(32)

(64)

 

                 

                 

                 

Net cash from operating activities

4,675

12,329

11,204

 

 

 

 

Cash flow from investing activities

 

 

 

Proceeds from sale of property, plant and equipment

75

93

142

Acquisition of property, plant and equipment

(3,156)

(5,652)

(11,451)

Additional investment in existing subsidiaries

(74)

-

(2,668)

Acquisition of controlling interest in associates net of cash acquired

-

-

(425)

Acquisition of intangible assets

(74)

(232)

(315)

Development expenditure capitalised

(297)

(469)

(1,500)

Dividends received from associate companies

-

-

1,254

 

                 

                 

                 

Net cash outflow from investing activities

(3,526)

(6,260)

(14,963)

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from issue of share capital

16

-

-

Payment of lease liability principal

(714)

(455)

(911)

Proceeds from new leases

5,054

-

424

Dividends paid

(6,927)

(6,074)

(6,126)

Dividends paid to non-controlling interests

-

(451)

(451)

Net proceeds from loans and committed facilities

6,949

1,977

8,337

 

                 

                 

                 

Net cash inflow / (outflow) from financing activities

4,378

(5,003)

1,273

 

                 

                 

                 

Net increase / (decrease) in cash and cash equivalents

5,527

1,066

(2,486)

Cash and cash equivalents at beginning of year

493

2,900

2,900

Effect of exchange rate fluctuations on cash held

56

(43)

79

 

                 

                 

                 

Closing cash and cash equivalents

6,076

3,923

493

 

                 

                 

                 

 

 

 

Notes

to the Condensed Consolidated Financial Statements

1.         Reporting entity

Goodwin PLC (the "Company") is a company incorporated in England and Wales. The unaudited condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2019 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 30th April 2019 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 2019.

The comparative figures for the financial year ended 30th April 2019 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 <Signing date>.

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 2019, with the exception of IFRS 16 Leases (see note 5). The changes in accounting policies are to be reflected in the Group's consolidated financial statements as at and for the year ending 30th April 2020.

The following standards and amendments became effective and therefore were adopted by the Group.

· Amendments to IFRS 9 - Prepayment Features with Negative Compensation (effective for annual periods beginning on or after 1st January 2019)

· IFRIC Interpretation 23 - Uncertainty over Income Tax Treatments (effective for annual periods beginning on or after 1st January 2019)

· Amendments to IAS 28 - Long-term Interests in Associates and Joint Ventures (effective for annual periods beginning on or after 1st January 2019)

· Annual Improvements to IFRSs - 2015-17 Cycle - minor amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23 (effective for annual periods beginning on or after 1st January 2019)

· IFRS 16 - Leases (effective for annual periods beginning on or after 1st January 2019)

The impact of IFRS 16 Leases, which replaces IAS 17 Leases and IFRIC 4, is outlined in note 5 below.  The Group has considered the impact on profit, earnings per share and net assets in future periods, of the other new standards and interpretations referred to above, and none of the above standards or interpretations is expected to have a material impact.

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:

· Amendments to IFRS 3 - Definition of a business (effective for annual periods beginning on or after 1st January 2020)

· Amendments to IAS 1 and IAS 8 - Definition of material (effective for annual periods beginning on or after 1st January 2020)

· Amendments to References to the Conceptual Framework in IFRS Standards (effective for annual periods beginning on or after 1st January 2020)

 

 

4.         Accounting estimates and judgements

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 2019, with the exception of leases (see note 5).

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.         Changes in significant accounting policies

Except as described below, the accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 30th April 2019.

The changes in accounting policies are also expected to be reflected in the Group's consolidated financial statements as at and for the year ending 30th April 2020.

The Group adopted IFRS 16 Leases initially from 1st May 2019. A number of other new standards are effective from 1st May 2019 but they are not expected to have a material effect on the Group's financial statements.

Prior to 1st May 2019, the Group's policy for operating leases was to recognise the lease payments in the statement of profit or loss on a straight-line basis over the term of the lease.  With the implementation of IFRS 16, subject to the recognition exemptions as outlined below, a right-of-use asset is now recognised on the balance sheet together with an associated lease liability corresponding to the minimum envisaged lease period.  Within the profit or loss account, depreciation is charged based on the expired element of the minimum lease term and finance charges expensed on an effective interest rate basis.  Instead of being reported within Property, plant and equipment, such assets acquired under finance leases are now reported as right-of-use assets.

The updated Group accounting policy for leases is as follows:

Definition of a lease

A contract is a lease or contains a lease if it transfers the right to use an identified asset over the contract term, in exchange for payment.  In determining whether a contract gives the Group the right to use an asset, the Group assesses whether:

•              the contract involves the use of an identified asset

•              the Group has the right to obtain substantially all of the economic benefits of using the asset; and

•              the Group has the right to direct the use of the asset by deciding how the asset is employed.

Lease term

The lease term is the non-cancellable period of a lease, and options to extend the lease or terminate it, where it is probable that the Group will exercise the available options.  At the start of a lease, the Group makes a judgement about whether it is reasonably certain to exercise the options, and reassesses this judgement at every reporting period.  Contracts, where the original lease term has expired, with assets continuing to be leased on a short-term rolling basis of a few months, are treated as short-term leases.

Lease balances

A right-of-use asset and a lease liability are calculated at the beginning of a lease.  The right-of-use asset is measured initially at cost, being the opening lease liability, adjusted for any lease payments made by the start of the lease, adjusted for any initial direct costs, which have been incurred. 

The lease liability is measured initially at the present value of the lease payments, which are outstanding at the start date, discounted at either the rate implicit in the lease or the Group's incremental borrowing rate.  With the exception of leases containing an option to purchase, the Group uses its incremental borrowing rate as the discount rate.  Lease liabilities are measured at amortised cost, using the effective interest rate, and adjusted as required for any subsequent change to the lease terms.

The right-of-use asset is depreciated on a straight-line basis over the lease term, or from the start date of the lease to the end of the useful life of the right-of-use asset as appropriate.  The method of calculating the estimated useful lives of right-of-use assets and testing for impairment is the same as that for property, plant and equipment.

 

Recognition exemptions

Payments for short-term leases, lasting twelve months or less, without a purchase option continue to be reported as an operating expense on a straight line basis over the term of the lease. 

The cost of leasing low-value items will continue to be reported as an operating expense over the life of the lease.

Lease portfolios

The Group has leases for the following types of assets:

Land and buildings

The Group leases a number of factory buildings, warehouses and office buildings.

Plant and equipment

A number of significant items of plant, such as CNC machines and furnaces, have been leased under contracts with an option to buy the asset at the end of the lease term.  The Group also leases a small number of motor vehicles.

Printers and photocopiers

The Group has applied the recognition exemption for low-value assets to these leases.

Accounting estimates and judgements

The Group's contracts are such that the terms are generally very clear in establishing whether they are or contain leases, and consequently, significant judgements have not been required in assessing the contracts.  The Group's incremental borrowing rates have been estimated separately for each country, in which leases are held, with rates ranging from 2.0% to 7.7%.

Transition

IFRS 16 has been implemented using the modified retrospective approach, because it does not require a full restatement of comparatives, but the cumulative opening impact is posted to reserves on the transition date.

For leases, which were previously classified as finance leases under IAS 17, the carrying amount of the right-of-use asset and lease liability on transition is the same as the carrying amount of the lease asset and lease liability calculated in accordance with IAS 17.

A right-of-use asset and lease liability are now recognised for leases considered to be operating leases in accordance with IAS 17.  As it is not possible to calculate the rate implicit in these leases, the lease liabilities are calculated as the present value of the remaining lease payments, discounted using the group's estimated incremental borrowing rate (IBR).  Right-of-use assets are reported as the same value as the lease liability, adjusted for any lease prepayments or accruals, at the transition date.

Practical expedients

The following practical expedients have been applied at the IFRS 16 application date.

•              There has been no re-assessment of leases treated as finance leases under IAS 17 as at 30th April 2019.

•              A single discount rate has been applied for similar leases.

•              Long term leases, which expire within twelve months of the transition date, have been treated as short term leases, with no right-of-use asset and lease liability being calculated.

•              Initial direct costs have been excluded, when measuring the right-of-use asset at the transition date.

The reconciliation of lease liabilities is shown below

 

 

 

 

 

Unaudited

 

 

 

 

£'000

 

 

 

 

 

Operating lease commitments at 30th April 2019

 

 

 

1,369

Impact of discounting minimum lease payments

 

 

 

(63)

Leases expiring before 30th April 2020

 

 

 

(44)

Short-term leases

 

 

 

(111)

Low value leases

 

 

 

(68)

Other reconciling items

 

 

 

(28)

 

 

 

 

                 

 

 

 

 

 

Additional lease liability at 1st May 2019

 

 

 

1,055

 

 

 

 

                 

 

 

 

 

 

Finance lease liability at 30th April 2019

 

 

 

2,103

 

 

 

 

                 

 

 

 

 

 

Total lease liability at 1st May 2019

 

 

 

3,158

 

 

 

 

                 

 

 

 

 

 

 

The IFRS 16 impact on the statement of profit or loss for the six months to 31st October 2019 is as follows:

 

 

 

 

 

Unaudited

 

 

 

 

£'000

Under IFRS 16

 

 

 

 

Operating profit

 

 

 

248

Financial expenses

 

 

 

27

 

 

 

 

                 

 

 

 

 

 

Impact on profit before tax

 

 

 

275

 

 

 

 

                 

 

 

 

 

 

Previously, under IAS 17

 

 

 

 

Reported as operating lease expenses within operating profit

 

 

 

267

 

 

 

 

                 

 

 

 

 

 

The IFRS 16 impact on the balance sheet as at 31st October 2019 is as follows:

 

 

 

Unaudited

Unaudited

Unaudited

 

 

IFRS 16

IFRS 16 adjustments

IAS 17

 

 

£'000

£'000

£'000

 

 

 

 

 

Property, plant and equipment

 

63,481

10,017

73,498

Right-of-use assets

 

11,798

(11,798)

-

Lease liabilities

 

(8,473)

1,789

(6,684)

 

 

                 

                 

                 

 

 

 

 

 

Impact on net assets

 

66,806

8

66,814

 

 

                 

                 

                 

 

 

 

 

 

 

6.         Operating Segments

Products and services from which reportable segments derive their revenues

In accordance with the requirements of IFRS 8 "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 in the following tables. 

 

Segment Revenue

 

Mechanical Engineering

Refractory Engineering

Sub Total

 

Unaudited Half Year Ended   31st October 2019 

Unaudited Half Year Ended    31st October 2018 

Audited Year  Ended 30th    April  2019

Unaudited Half Year Ended   31st October 2019

Unaudited Half Year Ended   31st October 2018 

Audited Year  Ended  30th    April    2019

Unaudited Half Year Ended   31st October 2019

Unaudited Half Year Ended    31st October 2018 

Audited Year  Ended 30th   April   2019

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

Revenue

 

 

 

 

 

 

 

 

 

External sales

47,244

45,052

82,375

22,846

22,496

44,671

70,090

67,548

127,046

Inter-segment sales

13,085

10,591

21,714

4,757

4,423

8,726

17,842

15,014

30,440

 

                

                

                

                

                

                

                

                

                

Total revenue

60,329

55,643

104,089

27,603

26,919

53,397

87,932

82,562

157,486

 

                

                

                

                

                

                

 

 

 

Reconciliation to consolidated revenues:

 

 

 

 

 

 

 

Inter-segment sales

 

 

 

 

 

 

(17,842)

(15,014)

(30,440)

 

 

 

 

 

 

 

                

                

                

Consolidated revenue for the period

 

 

 

 

70,090

67,548

127,406

 

 

 

 

 

 

 

                

                

                

Segment profits

 

 

 

 

 

 

 

 

 

 

 

Mechanical Engineering

Refractory Engineering

Sub Total

 

Unaudited Half Year Ended      31st   October  2019 

Unaudited Half Year Ended       31st    October   2018 

Audited Year    Ended   30th      April     2019

Unaudited Half Year Ended   31st October 2019

Unaudited Half Year Ended   31st October 2018 

Audited Year  Ended  30th    April    2019

Unaudited Half Year Ended   31st October 2019

Unaudited Half Year Ended      31st   October 2018 

Audited Year  Ended 30th   April   2019

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

Profits

 

 

 

 

 

 

 

 

 

Segment result including associates

5,419

4,541

11,932

3,446

4,854

8,070

8,865

9,395

20,002

 

                 

                 

                 

                

                

                

 

 

 

Group administration costs

 

 

 

 

(1,010)

(765)

(2,138)

LTIP equity plan provision

 

 

 

-

(523)

(1,220)

Group finance expenses

 

 

 

 

(449)

(303)

(234)

 

 

 

 

 

 

 

                

                

                

Consolidated profit before tax for the period

 

 

 

 

7,406

7,804

16,410

Tax

 

 

 

 

(1,812)

(2,076)

(3,963)

 

 

 

 

 

 

 

                

                

                

Consolidated profit after tax for the period

 

 

 

 

5,594

5,728

12,447

 

 

 

 

 

 

 

                

                

                

Segment Assets and Liabilities

 

Segmental total assets

Segmental total liabilities

Segmental net assets

 

Unaudited Half Year Ended      31st   October  2019 

Unaudited Half Year Ended       31st    October   2018 

Audited Year    Ended   30th      April     2019

Unaudited Half Year Ended   31st October 2019

Unaudited Half Year Ended   31st October 2018 

Audited Year  Ended  30th    April    2019

Unaudited Half Year Ended   31st October 2019

Unaudited Half Year Ended      31st   October 2018 

Audited Year  Ended 30th   April   2019

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Mechanical Engineering

110,736

95,447

97,862

80,245

64,674

72,520

30,491

30,773

25,342

Refractory Engineering

44,191

40,207

43,950

23,125

19,859

25,541

21,066

20,348

18,409

 

                

                

                

                

                

                

                

                

                

Sub total reportable segment

154,927

135,654

141,812

103,370

84,533

98,061

51,557

51,121

43,751

 

                

                

                

                

                

                

 

 

 

Goodwin PLC (the Company) net assets

 

 

 

 

73,384

61,369

81,249

Elimination of Goodwin PLC investments

 

 

 

 

(25,301)

(20,960)

(25,374)

Goodwill

 

 

 

 

9,819

9,715

9,665

 

 

 

 

 

 

 

                

                

                

Consolidated total net assets

 

 

 

 

109,459

101,245

109,291

 

 

 

 

 

 

 

                

                

                

Segmental property, plant and equipment (PPE) capital expenditure

 

 

 

 

Goodwin PLC

 

 

 

 

1,456

2,408

3,602

Mechanical Engineering

 

 

 

 

1,172

3,039

6,461

Refractory Engineering

 

 

 

 

259

225

616

 

 

 

 

 

 

 

                

                

                

 

 

 

 

 

2,887

5,672

10,679

 

 

 

 

 

 

 

                

                

                

 

7.     Geographical segments

 

Half Year Ended 31st October 2019

Half Year Ended 31st October 2018

 

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

16,836

73,865

80,895

2,623

14,991

68,263

77,896

3,195

Rest of Europe

10,852

6,990

3,496

80

17,503

10,857

3,724

535

USA

6,787

-

-

-

2,138

-

-

-

Pacific Basin

18,111

15,464

7,528

45

14,762

15,064

7,888

17

Rest of World

17,504

13,140

7,021

139

18,154

7,061

6,367

1,925

 

                 

                 

                 

                 

                 

                 

                 

                 

Total

70,090

109,459

98,940

2,887

67,548

101,245

95,875

5,672

 

                 

                 

                 

                 

                 

                 

                 

                 

 

 

 

 

 

Year Ended 30th April 2019

 

 

 

 

 

Audited

Audited

Audited

Audited

 

 

 

 

 

Revenue

Operational assets

Non-current assets

PPE capital expenditure

 

 

 

 

 

£'000

£'000

£'000

£'000

UK

 

 

 

 

27,934

74,780

80,300

6,044

Rest of Europe

 

 

 

 

24,205

7,035

3,605

2,300

USA

 

 

 

 

8,100

-

-

-

Pacific Basin

 

 

 

 

28,956

14,779

6,855

84

Rest of World

 

 

 

 

37,851

12,697

6,944

2,251

 

 

 

 

 

                 

                 

                 

                 

Total

 

 

 

 

127,046

109,291

97,704

10,679

 

 

 

 

 

                 

                 

                 

                 

 

8.         Revenue

The Group's revenue is derived from contracts with customers.  The following tables provide an analysis of revenue by geographical market and by product line.

 

 

Mechanical Engineering

Refractory Engineering

Total

 

 

£'000

£'000

£'000

Primary Geographical markets

 

 

 

 

 

 

 

 

 

Unaudited half year ended 31st October 2019

 

 

 

 

UK

 

11,584

5,252

16,836

Rest of Europe

 

7,053

3,799

10,852

USA

 

6,735

52

6,787

Pacific Basin

 

6,988

11,123

18,111

Rest of World

 

14,884

2,620

17,504

 

 

                 

                 

                 

Total

 

47,244

22,846

70,090

 

 

                 

                 

                 

 

 

 

Mechanical Engineering

Refractory Engineering

Total

 

 

£'000

£'000

£'000

Primary Geographical markets

 

 

 

 

 

 

 

 

 

Unaudited half year ended 31st October 2018

 

 

 

 

UK

 

9,160

5,831

14,991

Rest of Europe

 

13,497

4,006

17,503

USA

 

2,097

41

2,138

Pacific Basin

 

6,570

8,192

14,762

Rest of World

 

13,728

4,426

18,154

 

 

                 

                 

                 

Total

 

45,052

22,496

67,548

 

 

                 

                 

                 

 

 

 

 

 

Product lines

 

 

 

 

 

 

 

 

 

Unaudited half year ended 31st October 2019

 

 

 

 

Standard products and consumables

 

5,131

22,846

27,977

Minimum period contracts for goods and services

 

2,171

-

2,171

Bespoke engineered products - over time

 

25,146

-

25,146

Bespoke engineered products - point in time

 

14,796

-

14,796

 

 

                 

                 

                 

Total

 

47,244

22,846

70,090

 

 

                 

                 

                 

 

 

 

 

 

Unaudited half year ended 31st October 2018

 

 

 

 

Standard products and consumables

 

3,935

22,496

26,431

Minimum period contracts for goods and services

 

2,006

-

2,006

Bespoke engineered products - over time

 

12,441

-

12,441

Bespoke engineered products - point in time

 

26,670

-

26,670

 

 

                 

                 

                 

Total

 

45,052

22,496

67,548

 

 

                 

                 

                 

 

 

 

 

 

9.         Dividends

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

 

 

 

Unaudited

Unaudited

Audited

 

 

Half Year to

Half Year to

Year Ended

 

 

31st October 2019

31st October 2018

30th April 2019

 

 

£'000

£'000

£'000

Equity Dividends Paid:

 

 

 

 

Ordinary dividends paid during the period in respect of the year ended 30th April 2019 (96.21p per share)

 

6,927

-

-

Ordinary dividends paid during the period in respect of the year ended 30th April 2018 (83.473p per share)

 

-

6,010

6,010

Dividends paid to minority shareholders in Noreva GmbH

 

-

64

116

 

 

                 

                 

                 

Total dividends paid during the period

 

6,927

6,074

6,126

 

 

                 

                 

                 

 

 

 

 

 

 

10.       Earnings Per Share

The calculation of the basic earnings per ordinary share is based on the number of ordinary shares in issue. For all periods up to and including 30th April 2019 this amounted to 7,200,000 shares and with effect from the 16th October 2019 this has increased to 7,363,200 shares. The weighted average number of ordinary shares in issue during the six months ended 31st October 2019 was 7,213,304.  The relevant profits attributable to ordinary shareholders were £5,260,000 (half year ended 31st October 2018: £5,393,000).

 

There is a share option scheme in place for the Directors of the Company under the Company's Equity Long Term Investment Plan (LTIP), based on the Company exceeding a target growth in the total shareholder return of the Company over the period from 1st May 2016 to 30th April 2019.  Under the scheme, a maximum of 489,600 share options vested at 1st May 2019, of which 163,200 were exercised during the current period. The total number of shares used as the denominator for the diluted earnings per share is 7,538,727 (half year ended 31st October 2018: 7,344,000; year ended 30th April 2019: 7,688,056).

11.       Capital Management, Issuance and Repayment of Debt

At 31st October 2019 the capital utilised was £132,217,000 as shown below:

 

 

 

Unaudited

Unaudited

Audited

 

 

as at

as at

as at

 

 

31st October 2019

31st October 2018

30th April 2019

 

 

£'000

£'000

£'000

 

 

 

 

 

Cash and cash equivalents

 

(9,416)

(7,577)

(9,640)

Lease liabilities - finance leases (note 15)

 

6,684

2,539

2,103

Bank loans and committed facilities

 

26,390

13,088

19,434

Bank overdrafts

 

3,340

3,654

9,147

Deferred consideration

 

204

500

204

 

 

                 

                 

                 

Net debt

 

27,202

12,204

21,248

Total equity attributable to equity holders of the parent

 

105,015

96,516

105,165

 

 

                 

                 

                 

Capital

 

132,217

108,720

126,413

 

 

                 

                 

                 

12.       Property, Plant and Equipment

 

 

 

Unaudited

Unaudited

 

 

as at

as at

 

 

31st October 2019

31st October 2018

 

 

£'000

£'000

 

 

 

 

Net book value at the beginning of the period

 

74,106

69,154

Additions

 

2,887

5,672

Transfer to right-of-use assets - on transition (as required by IFRS 16)

 

(3,959)

-

Transfer to right-of-use assets - finance lease (as required by IFRS 16)

 

(6,134)

-

Disposals (at net book value)

 

(77)

(82)

Depreciation

 

(3,180)

(2,764)

Exchange adjustment

 

(162)

(267)

 

 

                 

                 

Net book value at the end of the period

 

63,481

71,713

 

 

                 

                 

 

 

 

 

During October 2019, the Group took out a £5,000,000 seven year finance lease on two induction furnaces and a water quench facility, resulting in the equipment being transferred to the right-of-use assets category.

13.       Right-of-use assets

 

 

Unaudited as at 31st October 2019

 

 

Land and buildings - formerly operating leases

Plant and equipment - finance leases

Plant and equipment - formerly operating leases

 

 

Total

 

 

£'000

£'000

£'000

£'000

 

 

 

 

 

 

Balance recognised on transition

 

1,008

-

47

1,055

Transfer from property, plant and equipment

 

-

3,959

-

3,959

Additions

 

929

77

-

1,006

Finance lease transfer

 

-

6,134

-

6,134

Depreciation

 

(232)

(141)

(16)

(389)

Exchange adjustment

 

43

(10)

-

33

 

 

                 

                 

                 

                 

Net book value at the end of the period

 

1,748

10,019

31

11,798

 

 

                 

                 

                 

                 

 

 

 

 

 

 

14.       Intangible assets

 

 

 

Unaudited

Unaudited

 

 

as at

as at

 

 

31st October 2019

31st October 2018

 

 

£'000

£'000

 

 

 

 

Net book value at the beginning of the period

 

22,354

21,138

Additions

 

535

701

Amortisation

 

(484)

(549)

Exchange adjustment

 

78

18

 

 

                 

                 

Net book value at the end of the period

 

22,483

21,308

 

 

                 

                 

 

 

 

 

 

15.       Lease liabilities

 

 

 

Unaudited

Unaudited

Unaudited

 

 

as at

as at

as at

 

 

31st October 2019

31st October 2019

31st October 2019

 

 

Finance leases

Right-of-use leases

Total

 

 

£'000

£'000

£'000

 

 

 

 

 

Opening balance - IAS 17

 

2,103

-

2,103

Balance recognised on transition

 

-

1,055

1,055

Additions

 

5,054

1,006

6,060

Interest expense

 

21

27

48

Repayment of lease liabilities (including interest)

 

(518)

(244)

(762)

Exchange adjustment

 

24

(55)

(31)

 

 

                 

                 

                 

 

 

6,684

1,789

8,473

 

 

                 

                 

                 

 

 

 

 

 

16.  Total Financial Assets and Financial Liabilities

The following table sets out the Group's accounting classification of its financial assets and financial liabilities, and their carrying amounts at 31st October 2019.  The carrying amount is a reasonable approximation of fair value for all financial assets and financial liabilities.

 

 

 

Fair value - hedging instruments

FVTPL

Amortised cost

Total carrying amount / fair value amount

 

 

£'000

£'000

£'000

£'000

Financial assets measured at fair value

 

 

 

 

 

Forward exchange contracts used for hedging

 

2,143

-

-

2,143

Other forward exchange contracts

 

-

104

-

104

 

 

                 

                 

                 

                 

 

 

2,143

104

-

2,247

 

 

                 

                 

                 

                 

Financial assets not measured at fair value

 

 

 

 

 

Cash and cash equivalents

 

-

-

9,416

9,416

Contract assets

 

-

-

9,846

9,846

Trade receivables and other financial assets

 

-

-

24,981

24,981

 

 

                 

                 

                 

                 

 

 

-

-

44,243

44,243

 

 

                 

                 

                 

                 

Financial liabilities measured at fair value

 

 

 

 

 

Forward exchange contracts used for hedging

 

1,276

-

-

1,276

Other forward exchange contracts

 

-

276

-

276

Contingent consideration

 

-

204

-

204

 

 

                 

                 

                 

                 

 

 

1,276

480

-

1,756

 

 

                 

                 

                 

                 

 

 

 

 

 

 

Financial liabilities not measured at fair value

 

 

 

 

 

Bank overdrafts

 

-

-

3,340

3,340

Bank loans

 

-

-

26,390

26,390

Finance lease liabilities

 

-

-

8,473

8,473

Contract liabilities

 

-

-

27,068

27,068

Trade payables and other financial liabilities

 

-

-

18,174

18,174

 

 

                 

                 

                 

                 

 

 

-

-

83,445

83,445

 

 

                 

                 

                 

                 

 

The forward exchange contract assets and liabilities fair values in the above table are derived using Level 2 inputs as defined by IFRS 7 as detailed in the paragraph below.

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).

 


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