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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ct Automotive Group Plc | LSE:CTA | London | Ordinary Share | GB00BMHYGR77 | ORD GBP0.005 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -1.00 | -1.69% | 58.00 | 56.00 | 60.00 | 59.00 | 58.00 | 59.00 | 15,321 | 11:14:35 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Motor Vehicle Part,accessory | 128.9M | -24.66M | -0.3351 | -1.73 | 42.69M |
From May 2023 to May 2024
TIDMCTA
RNS Number : 1301N
CT Automotive Group PLC
21 September 2023
21 September 2023
CT AUTOMOTIVE GROUP PLC
("CT Automotive" or the "Group")
INTERIM RESULTS
Positive trading, efficiency initiatives delivering margin improvement
CT Automotive, a leading designer, developer and supplier of interior components to the global automotive industry, today announces its results for the half year ended 30 June 2023 ("H1 2023").
Simon Phillips, Chief Executive Officer of CT Automotive, commented:
"We are pleased with our first half performance. We drove strong revenue growth, returned to profitability and strengthened our balance sheet. Production volumes at the Group's facilities have recovered rapidly and we are making good progress with our margin enhancement initiatives.
CT Automotive is well-positioned to capitalise on the continued recovery in global automotive end-markets and our improved operating environment. Whilst cognisant of the macroeconomic uncertainty, the Board remains confident of meeting full year expectations."
Financial highlights
Hot Features
Premium
Restated
H1 23 H1 22
$m $m
------------------------------- -------- ---------
Revenue 68.2 54.2
Gross profit 17.8 10.5
Underlying EBITDA* 6.7 (4.6)
Underlying profit/(loss)
before taxation* 2.5 (8.4)
Profit/(loss) before taxation 1.3 (9.0)
Earnings/(loss) per share 1.7c (15.2)c
Net debt 9.0 20.2
------------------------------- -------- ---------
* Adjusted for non-underlying items as explained in Notes 4 and 13 of the condensed consolidated financial statements
Note: H1 2023 and H1 2022 are presented as continuing operations excluding UK discontinued operations. H1 2022 has been restated for prior period adjustments as explained in Note 15 of the condensed consolidated financial statements
-- Encouraging trading performance in H1 2023 as global production volumes recovered and automotive supply chain issues eased
-- Revenues for H1 2023 ahead of the Board's expectations up 26% at $68.2m -- Production revenue up 26% at $65.8m, reflecting the improved trading environment
-- Tooling revenue expected to be second-half weighted reflecting the timing of customer projects, with strong visibility on projects due to complete in H2 2023
-- Gross profit margins up to 26% (H1 2022: 19%), driven by a combination of higher revenue, stable production schedules, restructuring and efficiency initiatives
-- Balance sheet strengthened following the fundraising of $9.6m in May 2023
Operational highlights
-- Efficiency initiatives in China and Türkiye progressing as planned and are expected to deliver additional savings in H2 2023, further improving operating margins
-- Impact of hyperinflation in Türkiye partially offset by improved pricing and cost escalation system implemented with key customers
-- Performance of our new facility in Mexico is on track, with the plant generating $4.8m revenue during H1 2023
-- Improvement in Group distribution and logistics recovered as supply chains and container rates normalised
Current trading and outlook
-- We are encouraged by stabilising order volumes, pricing and inventory patterns since the start of FY23 and entered H2 2023 with good visibility
-- Notable increase in customer Requests For Quotes towards the end of H1 2023, resulting in 5 new production program wins in Q3 to date worth a total annual production turnover of $9.4m and tooling business awards of $6.9m
-- While macroeconomic uncertainty remains, there are continued signs that customer schedules are strengthening as original equipment manufacturers' (OEMs) automotive supply chain issues are continuing to improve
-- The Board remains confident of underlying margin run rate progression in H2 2023, supported by continued benefits expected from the Group's efficiency initiatives
-- As a result, the Board is confident in achieving its expectations for FY23
For further information, please contact:
CT Automotive via MHP Simon Phillips, Chief Executive Officer Anna Brown, Chief Financial Officer MHP (Financial PR) Tel: +44 (0)7834 623 818 Tim Rowntree CTAutomotive@mhpgroup.com Charlie Barker Veronica Farah Liberum (Nominated Adviser Tel: +44 (0)20 3100 2000 and Broker) Richard Lindley Benjamin Cryer
Notes to editors
CT Automotive is engaged in the design, development and manufacture of bespoke automotive interior finishes (for example, dashboard panels and fascia finishes) and kinematic assemblies (for example, air registers, arm rests, deployable cup holders and storage systems), as well as their associated tooling, for the world's leading automotive original equipment suppliers ("OEMs") and global Tier One manufacturers.
The Group is headquartered in the UK with a low cost manufacturing footprint. Key production facilities are located in Shenzhen and Ganzhou, China complemented by additional manufacturing facilities in Mexico, Türkiye and Czechia.
CT Automotive's operating model enables it to pursue a price leadership strategy, supplying high quality parts to customers at a lower overall landed cost than competitors. This has helped the Group build a high-quality portfolio of OEM customers, both directly and via Tier One suppliers including Forvia and Marelli. End customers include volume manufacturers, such as Nissan and Ford, and luxury car brands such as Bentley and Lamborghini. In addition, the Group supplies electric car manufacturers, including Lucid. It is also working with e.Go Mobile, a German manufacturer which plans to launch a series of small electric vehicles for the budget end of the market.
The Group currently supplies component part types to over 47 different models for 19 OEMs. Since its formation, the Group has been the only significant new entrant into the market, which is characterised by high barriers to entry.
Use of alternative performance measures
The commentary uses alternative performance measures, which are described as "Underlying". An explanation of the items identified as non-underlying and that have been adjusted can be found in Notes 4 and 13 of the condensed consolidated financial statements. Non-underlying items are items which due to their one-off, non-trading and non-recurring nature, have been separately classified by the Directors in order to draw them to the attention of the reader and allow for a greater understanding of the operating performance of the Group.
Strategic and Operational Review
Positive trading performance
The Group's trading performance in the first half of the year has been encouraging as global production volumes continued to recover and automotive supply chain issues eased.
Q1 2023 was characterised by low tendering activity as large OEMs began re-evaluating their post Covid strategies, in particular regarding their EV platforms. There was a notable increase in customer Requests For Quotes towards the end of H1 2023. This resulted in 5 new production program wins in Q3 to date with a total production annualised turnover of $9.4m and tooling business awards of $6.9m.
Revenues for H1 2023 were ahead of the Board's expectations at $68.2m, made up of $65.8m of production revenue (H1 2022: $52.3m) and $2.3m of tooling revenue (H1 2022: $1.9m). This was up 26% on a continuing basis compared to H1 2022 ($54.2m, excluding discontinued UK revenue of $3.0m).
Our tooling revenue is generated from the design and development of new programs, with 5 projects completing during H1 2023, generating $2.3m of tooling revenue (H1 2022: $1.9m). Our internal toolroom is fully utilised and ensures maximum product control and margins. Tooling revenue is expected to be weighted towards the second half this year reflecting the timing of customers' product launches and start of production. Currently, 11 projects are underway and are due to complete in H2 2023 with an expected revenue of c.$8-10m.
Gross margins have continued to improve and reached 26% (H1 2022: 19%) as the Group's ongoing efficiency initiatives in China and Türkiye progressed as planned. China represents 70% of our global production volumes and consequently remains the main focus of our margin improvement initiatives. These initiatives include the restructuring of tooling operations and manufacturing footprint, supplier and logistics rationalisation, as well as automation initiatives which are on track for H2 2023 implementation and will deliver further savings. As part of restructuring our manufacturing footprint, we are continuing to gradually consolidate some of our production lines in China to Ganzhou, benefitting from comparatively lower labour costs. We remain on track to deliver the margin improvement plan across the second half of 2023, with automation being a key driver.
The economic environment in Türkiye has continued to be impacted by hyperinflation. An improved pricing and cost escalation system with key customers, aimed at compensating for local inflation and the devaluation of the Turkish Lira, has been effective in protecting local operations.
The new production facility in Mexico, which we opened in late 2022 to support our North American customers, has performed as planned, generating $4.8m revenue during H1 2023. Further growth is expected as the factory continues to scale up with new project launches scheduled for Q1 2024.
Strengthened balance sheet to support growth initiatives
On 27 April 2023, we were pleased to announce the result of a placing, which secured c.$9.6m of gross proceeds from new and existing shareholders.
The net proceeds of the fundraise are being primarily used to strengthen the balance sheet and to provide the Group with the flexibility to take advantage of new pipeline opportunities as the business positions itself for further growth. A small portion of the net proceeds will be used to facilitate further efficiency savings, including through investment in injection moulding production processes and robotics.
At the half-year end the net debt reduced to $9.0m (30 June 2022: $20.2m; 31 December 2022: $12.2m).
People
Our performance during this period of recovery and efficiency initiatives would not have been possible without the dedication, enthusiasm and expertise of our people. They are critical to the continued evolution of the business.
We continue to invest in our systems and processes to ensure our people are safe, empowered and have sufficient opportunities to develop their careers while supporting the Group's long-term goals.
Board changes
A number of important changes to the Board structure and roles were made in H1 2023 to support the business.
We were pleased to appoint Anna Brown as CFO at the end of April 2023. Anna has substantial listed company and financial experience, and has made an immediate impact as we continue to improve governance and execute our growth strategy.
In July 2023 Ray Bench was appointed as Non-Executive Chairman , while Simon Phillips took on the role of Chief Executive Officer. Scott McKenzie, previously Chief Executive Officer, stepped down from the Board to a new role as Chief Operating Officer, Sales and Product Development.
Francesca Ecsery was appointed Senior Independent Non-Executive while Nick Timberlake joined the Board as a Non-Executive Director.
In August 2023, we also announced the appointment of Geraint Davies as an independent Non-Executive Director, joining our Board on 18 September 2023 as a Chair of the Audit & Risk Committee. He brings over 30 years' experience as a Partner in the "Big Four" accounting firms, working with global businesses in manufacturing, real estate, mining, distribution and financial services.
Outlook
The Board anticipates customer schedules to support continued strong demand in H2 2023, alongside stabilising pricing and inventory patterns. Trading since 30 June 2023 has been in line with the Board's expectations.
We are expecting to recognise c.$8-10m of revenue from the tooling projects which are due to complete in H2 2023, subject to customer-led timings for the start of production. H2 2023 gross margins are expected to further improve in line with the ongoing margin improvement plan.
Looking further ahead, the Board is mindful of the possibility that the continuing macroeconomic uncertainty with regards to interest rates and inflation may result in a softening of demand leading into 2024. That said, whilst volumes and demand remain strong compared to the pandemic period, automotive sector global production is still at least 7% lower compared to 2019 levels.
The Board remains confident of underlying margin run rate progression in H2 2023 and of achieving its expectations for FY23, supported by the benefit expected from the Group's efficiency initiatives.
Financial review
Revenue and margins
Total Group revenue for H1 2023 was $68.2m, up 26% on a continuing basis compared to H1 2022 ($54.2m, excluding discontinued UK revenue of $3.0m), as customer volumes and production schedules strengthened and automotive supply chain issues eased . Growth came from both improvement in production revenue which increased by 26% from $52.3m to $65.8m and an increase in tooling revenue from $1.9m to $2.3m.
Gross profit increased to $17.8m (H1 2022: $10.5m) and gross margins continued to improve and reached 26% (H1 2022: 19%) on the back of improved trading conditions and the Group's ongoing efficiency initiatives in China and Türkiye which started to deliver savings. These initiatives include the restructuring of tooling operations and manufacturing footprint, supplier and logistics rationalisation as well as automation initiatives which are on track for H2 2023 implementation.
Non-underlying items
During the first half of 2023 the Group recognised non-underlying items of $1.2m (H1 2022: $0.7m). These items primarily related to costs of $0.9m (H1 2022: nil) in connection with restructuring and margin improvement initiatives. These costs included redundancies while optimising our manufacturing footprint in China and Türkiye ($0.1m), a write down of unviable stock as part of destocking and distribution centre rationalisation programme ($0.3m) and a $0.5m charge in relation to previously completed tooling projects.
The Group has been undertaking an exercise to improve reporting and governance. This has resulted in a change in the method to estimate tooling overheads and, as a result of applying this new accounting estimate, the Group is releasing production overheads in relation to tooling projects that were capitalised in prior periods. The amount for the current financial period is $0.3m (H1 2022: nil).
This change is expected to result in a non-underlying charge of $1.8m for the full year as the Group releases the previously capitalised production overheads as tooling projects are completed in the current year, with the full amount to be released in FY23. There is no cash impact. Following the full release in the current year, the change will have no further impact on future periods.
For further details, see Notes 4 and 13 of the condensed consolidated financial statements.
EBITDA and operating result
H1 2023 underlying EBITDA was $6.7m (H1 2022: $4.6m loss) while reported EBITDA was $5.4m (H1 2022: $5.2m loss) as a result of improved gross profit and after taking account of distribution expenses of $2.7m (H1 2022: $4.0m) and administrative expenses of $13.0m (H1 2022: $15.0m). A $1.3m reduction in distribution expenses was due to container rates settling to pre-covid levels.
During H1 2023 the Group benefitted from $0.3m of foreign exchange gains (H1 2022: $2.6m loss) due to favourable exchange rate movements primarily against the US$. These are included in administrative expenses.
Depreciation and amortisation charges remained at similar levels for the year at $3.0m (H1 2022: $3.0m). Therefore, the resulting underlying operating profit was $3.7m (H1 2002: $7.5m loss) and reported operating profit was $2.4m (H1 2022: $8.2m loss).
Discontinued operations
During FY22, the Group announced the closure of Chinatool Automotive Systems Limited , a production facility in Newton Aycliffe, UK, which was impacted by severe labour shortages and inflationary increases in energy costs and wages. The formal liquidation process is currently underway. Loss for the period attributable to the discontinued operations was $0.4m (H1 2022: $0.7m loss) and primarily related to translational foreign exchange losses on the GBP denominated balance sheet items.
Prior period restatement
As previously disclosed in the 2022 Annual Report, during the preparation of FY22 year-end accounts, the Group identified prior period adjustments in relation to calculating the FY21 year-end inventory and transfer of tooling assets from the Group balance sheet to cost of sales upon the sale to the customer. Posting of the adjustments to FY21 year-end balance sheet had a knock-on effect on previously announced H1 2022 results.
The impact of posting the inventory adjustment resulted in an increase in the cost of sales in the period to 30 June 2022 by $1.1m and reduced inventories as at 30 June 2022 by $9.4m. The impact of posting the tooling adjustment resulted in the value reported in the cost of sales for the period to 30 June 2022 reducing by $0.4m and the value of property, plant and equipment decreasing by $2.2m. Therefore, the overall impact of prior period adjustments is an increase in the cost of sales for the period to 30 June 2022 by $0.7m and a reduction in net assets as at 30 June 2022 by $11.6m with a corresponding reduction in brought forward reserves of $10.9m.
Impact of hyperinflation
Applying the hyperinflation standard (IAS 29) in relation to Turkish operations resulted in an increase in Group revenue by $0.5m (H1 2022: $0.7m increase) and nil impact on Group EBITDA (H1 2022: $0.6m loss).
Capital structure, working capital and interest
Since December 2022 year end, the Group saw its net asset value increase to $11.1m (FY22: $2.6m) supported by the fundraise in May 2023 which generated net proceeds of $9.1m.
Non-current assets reduced to $16.9m (FY22: $19.9m), mainly reflecting a $3.0m (H1 2022: $3.0m) depreciation charge in relation to PPE, right of use assets and intangible assets.
During H1 2023, the Group saw a $6.9m increase in its current assets. This was primarily driven by an increase in trade debtors as the customer payment terms reverted back to normal and the proceeds of the fundraise, partially offset by the decrease in finished goods as the Group undertook a destocking exercise and distribution centre rationalisation programme. Trade and other payables reduced by $2.2m during H1 2023 as supplier payments have returned to normal and a portion of proceeds from the fundraise has been used to pay down suppliers in China and the UK.
The Group has continued to prudently manage its working capital by utilising available debt facilities and the proceeds of the fundraise. Cash and cash equivalents as at 30 June 2023 were $7.6m (FY22: $4.8m). Net debt as at 30 June 2023 was $9.0m (FY22: $12.2m) and included bank overdrafts, amounts drawn on the Group's trade loans and invoice finance facilities with HSBC. After taking account of current and non-current IFRS 16 lease liabilities, net debt as at 30 June was $19.2m (FY22: $24.2m).
The Group uses HSBC post-dispatch trade loans and invoice financing facilities as an additional working capital lever. As at 30 June 2023 the amounts drawn on the Group's trade loans and invoice finance facilities were $15.5m (FY22: $16.7m) against a total facility of c.$22m. Net finance costs increased to $1.1m (H1 2022: $0.8m) reflecting significantly higher UK interest rates.
On 27 April 2023 the Group announced a placing, raising total gross proceeds of $9.6m. The net proceeds of the fundraise of $9.1m have predominately been used to strengthen the balance sheet and to provide the Group with the flexibility to take advantage of growth opportunities. Additionally, a small portion of the net proceeds has been deployed to realise further efficiency savings, including through investment in injection moulding production processes and robotics .
Risks
The Board considers strategic and external, operational, financial and compliance risks and monitors them on a regular basis. Key risks and their mitigations were included on pages 32 to 37 of the 2022 Annual Report published on 15 June 2023 and there are no material changes since that date.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Note Unaudited Unaudited Year to
6 months 6 months to 31 December
to 30 June 30 June 2022
2023 2022 (Restated)
$'000 $'000 $'000
Revenue 2,3 68,152 54,195 124,269
Cost of sales (50,307) (43,657) (109,407)
________ ________ ________
Gross profit 17,845 10,538 14,862
Distribution expenses (2,692) (4,007) (5,059)
Other operating income 312 242 650
Administrative expenses (13,022) (14,959) (27,287)
________ ________ ________
EBITDA (before non-underlying
items) 6,671 (4,554) (7,129)
Depreciation and amortisation (2,991) (2,973) (5,422)
Non-underlying items 4 (1,237) (659) (4,283)
--------------------------------------- ----- ------------ ----------------- -------------
Operating Profit/(Loss) 2,443 (8,186) (16,834)
Finance income - - 10
Finance expenses (1,138) (824) (1,997)
________ ________ ________
Profit/(Loss) before tax 1,305 (9,010) (18,821)
Taxation (Charge)/Credit (351) 1,260 (3,054)
________ ________ ________
Profit/(Loss) for the period
from continuing operations 954 (7,750) (21,875)
________ ________ ________
Discontinued Operations
Profit/(Loss) for the period 16 (367) (671) (2,789)
from discontinued operations ________ ________ ________
Profit/(Loss) for the period 587 (8,421) (24,664)
attributable to equity shareholders ________ ________ ________
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Foreign currency translation
differences - foreign operations (1,180) (360) (927)
________ ________ ________
Other comprehensive loss for
the period, net of income tax (1,180) (360) (927)
________ ________ ________
Total comprehensive loss for
the period (593) (8,781) (25,591)
________ ________ ________
From continuing operations:
Basic earnings/(loss) per share 5 1.70c (15.2)c (42.9)c
Diluted earnings/(loss) per share 5 1.70c (15.2)c (42.9)c
From continuing and discontinued
operations
Basic earnings/(loss) per share 5 1.00c (16.5)c (48.4)c
Diluted earnings/(loss) per share 5 1.00c (16.5)c (48.4)c
Consolidated Balance Sheet
Note Unaudited Unaudited As at 31
as at 30 as at 30 June December
June 2023 2022 (Restated) 2022
$'000 $'000 $'000
Non-current assets
Goodwill 1,259 2,417 1,259
Intangible assets 392 575 528
Property, Plant and Equipment 6 6,199 7,839 7,302
Right of use assets 9,008 8,603 10,769
Deferred tax assets - 3,508 -
________ ________ ________
16,858 22,942 19,858
________ ________ ________
Current assets
Inventories 7 25,265 34,885 27,342
Tax receivable 344 1,134 227
Trade and other receivables 8 32,971 40,852 26,880
Cash and cash equivalents 14 7,592 5,835 4,829
________ ________ ________
66,172 82,706 59,278
________ ________ ________
Total assets 83,030 105,648 79,136
________ ________ ________
Current liabilities
Other interest-bearing loans
and borrowings 9 (16,601) (26,057) (17,058)
Trade and other payables 10 (43,695) (50,262) (45,924)
Derivative financial liabilities (189) (1,008) (671)
Tax payable (1,049) (516) (771)
Lease liabilities 9 (2,311) (2,050) (3,022)
________ ________ ________
(63,845) (79,893) (67,446)
________ ________ ________
Non-current liabilities
Derivative financial liabilities - - (95)
Lease liabilities 9 (7,905) (6,436) (8,900)
Deferred tax liabilities (175) - (118)
________ ________ ________
(8,080) (6,436) (9,113)
________ ________ ________
Total liabilities (71,925) (86,329) (76,559)
________ ________ ________
Net assets 11,105 19,319 2,577
________ ________ ________
Equity attributable to equity holders of the
parent
Share capital 17 484 342 342
Share premium 17 63,696 54,717 54,717
Translation reserve (1,527) 220 (347)
Merger reserve (35,812) (35,812) (35,812)
(Deficit)/ Retained earnings (15,736) (148) (16,323)
________ ________ ________
Total equity 11,105 19,319 2,577
________ ________ ________
Consolidated Statement of Changes in Equity
Share Share Translation Retained Merger Total
capital Premium reserve Earnings reserve equity
$'000 $'000 $'000 $'000 $'000 $'000
1 January
2022
342 54,717 580 7,430 (35,812) 27,257
Hyperinflationary
monetary adjustment
relating to 911 911
2021
Restated
at 1 Jan 2022 342 54,717 580 8,341 (35,812) 28,168
Total comprehensive income for the year
Loss for the
year - - - (24,664) - (24,664)
Other comprehensive
income - - (927) - - (927)
________ ________ ________ ________ ________ ________
Total comprehensive
income for
the year - - (927) (24,664) - (25,591)
________ ________ ________ ________ ________ ________
Balance at
31 December
2022 342 54,717 (347) (16,323) (35,812) 2,577
________ ________ ________ ________ ________ ________
Share Share Translation Retained Merger Total
capital Premium reserve earnings reserve equity
$'000 $'000 $'000 $'000 $'000 $'000
1 January
2023 342 54,717 (347) (16,323) (35,812) 2,577
Total comprehensive income for the period
Profit for
the period - - - 587 - 587
Other comprehensive
income/(loss) - - (1,180) - - (1,180)
________ ________ ________ ________ ________ ________
Total comprehensive
income for
the period - - (1,180) 587 - (593)
Share Issue 142 8,979 - - - 9,121
________ ________ ________ ________ ________ ________
Balance
at 30 June
2023 484 63,696 (1,527) (15,736) (35,812) 11,105
________ ________ ________ ________ ________ ________
Consolidated statement of cash flows
Unaudited Unaudited Year
6 months to 30 6 months to 31
June 2023 to 30 December
June 2022 2022
$'000 $'000 $'000
Cash flows from operating activities
Profit/(Loss) for the period 954 (7,750) (21,875)
Loss from discontinued operations (367) (671) (2,789)
________ ________ ________
Profit/(Loss) for the period after tax 587 (8,421) (24,664)
Adjustments for:
Depreciation and amortisation 2,991 2,972 5,947
Impairment of Goodwill - - 1,158
Finance income - - (10)
Prior period adjustment (See Note 15) - 681 -
Financial expense 942 881 2,090
Net fair value losses recognised in
Profit or Loss - - 750
Impairment of lease assets - - 429
Loss on disposal of Property, Plant
and Equipment 329 246 825
Gain on renegotiation of lease - - (168)
Taxation refund/ (paid) 353 (1,485) 3,103
Monetary gain from hyperinflationary
adjustments (429) 354 665
________ ________ ________
4,773 (4,772) (9,875)
Decrease/(increase) in trade and other
receivables (9,178) 4,709 14,786
(Increase)/decrease in inventories 3,212 (54) 1,104
(Decrease)/increase in trade and other
payables (968) (7,748) (618)
Tax refund - - 145
________ ________ ________
Net cash generated/(used in) operating
activities (2,161) (7,865) 5,542
________ ________ ________
Cash flows from investing activities
Purchase of intangible assets - (364) (633)
Purchase of property, plant and equipment (427) (1,779) (2,864)
Interest received - - 10
________ ________ ________
Net cash from/(used in) investing activities (427) (2,143) (3,487)
________ ________ ________
Cash flows from financing activities
Repayment of loan facilities - (2,500) (2,500)
Share issue (net of transaction costs) 9,120 - -
Principal repayment of lease liabilities (1,018) (1,693) (3,607)
Interest paid (945) (664) (2,090)
Repayment of term loan - - -
Repayment of CLBILs - - -
Receipt/(repayment) of trade loans (1,166) 3,680 4,131
Receipt/(repayment) of invoice finance (41) 2,331 (3,880)
________ ________ ________
Net cash from/(used in) financing activities 5,950 1,154 (7,946)
________ ________ ________
Net (decrease)/increase in cash and
cash equivalents 3,362 (8,854) (5,891)
Cash and cash equivalents at beginning
of period 4,471 9,807 9,807
Effect of exchange rate fluctuations
on cash held (1,350) 1,345 555
________ ________ ________
Cash and cash equivalents at end of
period (see Note 14) 6,483 2,298 4,471
________ ________ ________
Notes forming part of the consolidated unaudited financial statements
1 Accounting policies
Introduction
The consolidated condensed interim financial statements have been prepared in accordance International Financial Reporting Standards currently in force and in conformity with the requirements of the Companies Act 2006.
These consolidated condensed interim financial statements have been prepared on the basis of the same accounting policies as per the audited financial statements for the year ended 31 December 2022. The interim financial statements, which have been prepared in accordance with International Accounting Standard 34 (IAS 34), are unaudited and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022, prepared in accordance with IFRS, have been filed with Companies House. The Auditors' Report on these accounts was unqualified, did not include any matters to which the Auditors drew attention by way of emphasis without qualifying their report and did not contain any statements under section 498 of the Companies Act 2006.
The consolidated condensed interim financial statements are for the six months to 30 June 2023. The interim consolidated financial information does not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 31 December 2022, which were prepared in accordance with IFRS's and in conformity with the requirements of the Companies Act 2006.
The Group's business is not subject to significant seasonal variations.
The unaudited financial statements are prepared on the historical cost basis except that the derivative financial instruments are stated at their fair value and the hyperinflationary adjustments are applied to the results of our Turkish subsidiary.
Going Concern
The Directors have assessed the Group's business activities and the factors likely to affect future performance in light of the current and anticipated trading conditions. In making their assessment the Directors have reviewed the Group's latest budget, current trading, available debt facilities, proceeds from the recent fundraising and considered reasonably plausible downside scenarios and mitigating actions.
The Directors are confident that, after taking into account existing cash and debt facilities available to the Group and the net proceeds of the fundraising, the Group has adequate resources in place to continue in operational existence for a period of at least 12 months from the date of approval of these financial statements being to September 2024. In making their assessment the Directors have considered the key factors listed below:
Fundraising
On 27 April 2023 the Group announced that it undertook a fundraise and achieved total gross proceeds of $9.6m (before transaction costs of $0.5m). The net proceeds of the fundraise of approximately $9.1m were received mid-May 2023 and were used to strengthen the balance sheet and to provide the Group with flexibility to take advantage of growth opportunities. Additionally, a small portion of the net proceeds was deployed to realise further efficiency savings including through investment in injection moulding production processes and robotics.
HSBC facilities
The Group uses HSBC post-dispatch trade loans and invoice financing facilities as an additional working capital lever. During H1 23 these facilities were provided on a rolling 3-months basis. However, in light of the improved trading, the facilities have been formally renewed for a longer period, until 30 April 2024. The Directors have recently commenced the refinancing process to secure suitable funding options and believe that should the HSBC facilities be withdrawn after 30 April 2024, alternative funding options would be available to the Group.
As at 30 June 2023 the amounts drawn on the Group's trade loans and invoice finance facilities were $15.5m (FY22: $16.7m) against a total facility of c.$22m.
Scenario modelling
As a result of losses incurred during FY22, the Group has carefully considered its future liquidity position. In stress testing the forecast cash flows of the business, the Directors modelled a base case, several downside scenarios, a combined downside scenario and a set of mitigating actions to the combined downside scenario. The base case was modelled on a prudent basis, assuming flat revenues and using the production schedules and cost estimates. Positive cash headroom is maintained under the base case scenario.
Taking into account the trading conditions which existed during FY22 and outlook, the Directors have identified certain specific key risks to the base case assumptions and have modelled the scenarios as follows:
-- Reduction in revenue risk: the entire market is down by 10% due to global economic recession, reflecting a scenario similar to the 2008-2009 downturn;
-- Increased cost of sales risk: reflecting the impact of inflation in cost of sales by 5% and inability to recover from customers;
-- Stockholding risk: reflecting a scenario caused by disruption in customer schedules and therefore the need to hold more than normal stock levels required in the distribution centre's;
-- Availability of HSBC facilities: reflecting a withdrawal of HSBC facilities from 30 April 2024 and failure to replace the facilities with equivalent facilities on similar terms.
In addition, the directors have modelled the first three risks above into a combined downside scenario and considered several controllable mitigating actions. The principal mitigating actions have been modelled as managing buffer stock levels and payment terms with customers and suppliers. Such mitigating actions are within management's control and the business closely monitors appropriate lead indicators to implement these actions in sufficient time to achieve the required cash preservation impact.
Despite the combined impact of the above downside assumptions, the stress testing model demonstrates that the business is able to maintain a positive cash headroom.
As a result of the above considerations, the Directors consider that the Group has adequate resources in place for at least 12 months form the date of the approval of H1 23 financial statements and have therefore adopted the going concern basis of accounting in preparing the financial statements.
Revenue
Revenue is measured at the fair value of the consideration received or receivable. Provided it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, revenue is recognised in profit or loss as follows:
Serial production goods are recognised as sold at a point in time when control is passed to the customer, which depending on the incoterms (a series of pre-defined commercial terms published by the International Chamber of Commerce relating to international commercial law) can be when they are delivered to the customer site or when the customer collects them.
Revenue from Tooling and the provision of associated services is recognised at a point in time when the performance obligations in the contract are satisfied and control is passed to the customer, which is based on the date of issue of the parts submission warrant (PSW) or a similar approval from customers, or other evidence of the commencement of serial production. Monies received from customers in advance of completing the performance obligations are recognised as contract liabilities as at the balance sheet date and released to revenue when the related performance obligations are satisfied at a point in time.
Discounts on the serial production contracts are considered as one off and agreed with the customers as part of the negotiation and as per the terms of the contract, they are either paid in advance or otherwise. Discounts paid in advance are recognised as a prepayment and recognised as a debit to revenue in the period in which the related revenue is recognised. All other discounts are recognised as a debit to revenue based on the period in which the related revenues are recognised.
Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.
Depreciation is charged to the profit and loss account on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:
Assets under construction - not depreciated
Plant and equipment - 2-5 years straight line
Furniture, fixtures - 2-5 years straight line
and equipment
Motor vehicles - 2-5 years straight line
Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in first-out principle and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on normal operating capacity.
Net realisable value is the value that would arise on sale of stock in the normal course of business, minus a reasonable estimation of selling costs.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in profit or loss. Exchange differences arising on the retranslation of the foreign operation are recognised in other comprehensive income and accumulated in the foreign exchange reserve.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to the Group's presentational currency US Dollars at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign operations are reported as an item of other comprehensive income and accumulated in the translation reserve. When a foreign operation is disposed of, such that control is lost, the entire accumulated amount in the foreign currency translation reserve, is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while still retaining control, the relevant proportion of the accumulated amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate that includes a foreign operation while still retaining significant influence, the relevant proportion of the cumulative amount is reclassified to profit or loss.
Classification of financial instruments issued by the Group
Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and
(b) where the instrument will or may be settled in the company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the company's own equity instruments or is a derivative that will be settled by the company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of any issues are classified as a financial liability.
Non-derivative financial instruments
Financial assets and liabilities are recognised when the Group becomes party to the contractual provisions of the instrument.
Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Trade and other receivables
Trade and other receivables are initially measured at their transaction price. Trade receivables and other receivables are held to collect the contractual cash flows which are solely payments of principal and interest. Therefore, these receivables are subsequently measured at amortised cost using the effective interest rate method.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method. See Note 9 for full details of classes of interest-bearing borrowings.
Effective interest rate
The 'effective interest' is calculated using the rate that exactly discounts estimates future cash payments or receipts (considering all contractual terms) through the expected life of the financial asset or financial liability to its carrying amount before any loss allowance.
Share based payments
Where share options are awarded to employees, the fair value of the options at the date of the grant is charged to the income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.
Hyperinflation accounting
The Group has applied IAS 29, Financial Reporting in Hyperinflationary Economies, for its subsidiary in Türkiye, whose functional currency has experienced a cumulative inflation rate of more than 100%, over the past three years. Assets, liabilities, the financial position and results of foreign operations in hyperinflationary economies are translated to US Dollar at the exchange rate prevailing at the reporting date. The exchange differences are recognised directly in other comprehensive income and accumulated in the translation reserve in equity. Such translation differences are reclassified to profit or loss only on disposal or partial disposal of the overseas operation. Prior to translating the financial statements of foreign operations, the non-monetary assets and liabilities and comprehensive income (both previously stated at historic cost) are restated to account for changes in the general purchasing power of the local currencies based on the consumer price index published by the Turkish Statistical Institute. The consumer price index for the six months ended 30 June 2023 increased by 12%.
The Group's consolidated financial statements for the period include the results and financial position of its Turkish operations restated to the measuring unit current at the end of each period. Comparative amounts presented in the consolidated financial statements have not been restated. Hyperinflationary accounting needs to be applied as if Türkiye has always been a hyperinflationary economy. In the year of initial application, it was CT Automotive Group's policy choice, to recognise the differences between equity as reported at 31 December 2021 and the equity after the restatement of the non-monetary items using the measurement unit current at the reporting date within retained earnings. The restatement of the non-monetary items subsequent to this initial application have been recognised in administrative expenses within the Consolidated Statement of Profit
and Loss. .
Revenue
2
Unaudited Unaudited
6 months 6 months Year to
to 30 June to 30 June 31 December
2023 2022 2022
$'000 $'000 $'000
Disaggregation of revenue
An analysis of turnover by type is given
below:
Sale of parts 65,811 52,272 117,289
Sale of tooling (including design and
development) 2,341 1,923 6,980
________ ________ ________
Total revenues
68,152 54,195 124,269
________ ________ ________
All revenue is derived from goods transferred at a point in time.
An analysis of turnover by geographical market is given within Note 3.
3 Segment information
Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision Maker (CODM). The CODM has been identified as the management team including the Chief Executive Officer and Chief Financial Officer. The segmental analysis is based on the information that the management team uses internally for the purpose of evaluating the performance of operating segments and determining resource allocation between segments.
The Group has 3 strategic divisions which are its reportable segments.
The Group has the below main divisions:
1) Tooling - Design, development and sale of tooling for the automotive industry.
2) Production - Manufacturing and distributing serial production kinematic interior parts for the automotive industry.
3) Head office - Manages group financing and capital management
The Group evaluates segmental performance on the basis of revenue and profit or loss from operations calculated in accordance with IFRS.
Unaudited 6 months ended
30 June 2023
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 2,341 65,811 - 68,152
Depreciation and amortisation - (2,991) - (2,991)
Finance expense - (928) - (928)
________ ________ ________ ________
Group and segment Profit/(Loss)
before tax and discontinued
operations 295 5,088 (4,078) 1,305
________ ________ ________ ________
Unaudited 6 months ended 30 June 2022
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 1,923 52,272 - 54,195
Depreciation and amortisation - (2,973) - (2,973)
Finance expense - (824) (57) (881)
________ ________ ________ ________
Group and segment (Loss)/profit
before tax and discontinued
operations (1,035) (2,782) (5,193) (9,010)
________ ________ ________ ________
Year ended 31 December 2022
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 6,980 117,289 - 124,269
Depreciation and amortisation - (5,422) - (5,422)
Finance expense - (1,939) (58) (1,997)
________ ________ ________ ________
Group and segment (Loss)/profit
before tax and discontinued
operations 1,601 866 (21,288) (18,821)
________ ________ ________ ________
External revenue by location
of customers
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 June to 30 June 2022
2023 2022
$'000 $'000 $'000
UK 11,760 7,119 16,603
US 13,414 14,376 27,640
China 8,071 8,464 18,415
Türkiye 6,627 5,619 12,806
Czechia 14,020 10,767 21,399
Brazil 1,956 2,021 3,567
Spain 1,190 2,708 4,692
Thailand 692 1,023 2,378
Other 10,422 2,098 16,769
__________ __________ __________
68,152 54,195 124,269
__________ __________ __________
4 Non-underlying items
Unaudited Unaudited Year
6 months 6 months ended
to 30 June to 30 June 31 December
2023 2022 2022
$'000 $'000 $'000
AIM listing fees - 31 31
Release of previously capitalised tooling
overheads 345 - -
Restructuring and margin improvement
costs 884 - -
Impairment of Goodwill - - 1,158
Impact of applying IAS29 8 563 665
China housing fund contribution - - 453
Start-up costs in Mexico - - 1,738
Irrecoverable excess freight costs - 65 238
_______ _______ _______
Total 1,237 659 4,283
_______ _______ _______
Non-underlying items are items, which, due to their one-off, non-trading and non-recurring nature, have been separately classified by the Directors in order to draw them to the attention of the reader and allow for greater understanding of the operating performance of the Group. Each item has been identified and explained below:
Non-underlying items of $884,000 were incurred in connection with restructuring and delivering margin improvement initiatives. These costs included redundancies while optimising our manufacturing footprint in China and Türkiye of $71,000, a write down of unviable stock as part of destocking and distribution centre rationalisation programme of $350,000 and a $462,000 charge in relation to previously completed tooling projects.
The Group has been undertaking an exercise to improve reporting and governance. This has resulted in a change in the method to estimate tooling overheads, which will result in the release of previously capitalised production overheads in relation to tooling projects. The amount for the current financial period is $345,000.
Effective from 1 January 2022, the Group has applied IAS 29, Financial Reporting in Hyperinflationary Economies for its subsidiary in Türkiye. The impact of these adjustments in the period to 30 June 2023 increased reported revenue by $477,000 (H1 22: $675,000), increased cost of sales by $326,000 (H1 22: $1,039,000), increased administrative expenses by $159,000 (H1 22: $201,000) and increased other income by $nil (H1 22: $2,000).
5 Earnings/(Loss) per share
Unaudited Unaudited Year ended
6 months to 6 months to 31 December
30 June 2023 30 June 2022 2022
(restated)
Number Number Number
Weighted average number of equity
shares (Note 17) 56,599,354 50,933,289 50,933,289
$ $ $
Profit/(Loss) for the period
from continuing operations 954,000 (7,750,000) (21,875,000)
Cents Cents Cents
Basic and Diluted Profit/(Loss) 1.7 (15.2) (42.9)
per share from continuing operations
Basic and Diluted Profit/(Loss) (0.7) (1.3) (5.5)
per share from discontinued
operations
There are contingently issuable shares in existence (see Note 12) that can result in diluted Earnings/(Loss) per share being different from basic Earnings/(Loss) per share in 2023 and 2022.
The vesting conditions of these contingently issuable shares includes earnings-based targets for the Group for the financial years ending 31 December 2023, 31 December 2024 and 31 December 2025. For the period ending 30 June 2023, earnings levels are below the threshold required under the share options vesting conditions. If this level of earnings continued to the years to which the vesting conditions relate, then the options would not meet their vesting conditions. IAS 33 requires that the number of contingently issuable shares included in the calculation of diluted earnings per share is based on the number of shares issuable if the end of the reporting period were the end of the contingency period and therefore no adjustments have been made for these because not all necessary conditions of the contingently issuable shares have been satisfied.
6 Property, plant and equipment
Plant and Fixtures Motor
equipment and fittings vehicles Total
$'000 $'000 $'000 $'000
Cost
Balance as at 1 January
2022 15,266 3,879 34 19,179
Hyperinflationary adjustment 406 179 - 585
Additions 1,811 1,053 - 2,864
Disposals (2,654) (464) (11) (3,129)
Effect of movements in
foreign exchange (1,484) (372) - (1,856)
________ ________ ________ ________
Balance as at 31 December
2022 (audited)
Hyperinflationary adjustment 13,345 4,275 23 17,643
on assets b/fwd to June
2023 995 737 - 1,732
________ ________ ________ ________
Balance at 1 January 2023 14,340 5,012 23 19,375
Additions 240 81 106 427
Disposals (546) - - (546)
Re-classifications 1,079 (1,221) 142 -
Reclassifications from
ROU assets (834) - - (834)
Hyperinflationary adjustment 2 5 - 7
Effect of movements in
foreign exchange (758) (438) (11) (1,207)
________ ________ ________ ________
Balance as at 30 June
2023 (unaudited) 13,523 3,439 260 17,222
________ ________ ________ ________
Depreciation
Balance at 1 January 2022 8,740 2,724 34 11,498
Hyperinflationary adjustment 146 115 - 261
Depreciation charge for
the period 367 1,406 - 1,773
Disposals (1,826) (429) (11) (2,266)
Effect of movements in
foreign exchange (719) (206) - (925)
________ ________ ________ ________
Balance as at 31 December
2022 (audited)
Hyperinflationary adjustment 6,708 3,610 23 10,341
on assets b/fwd to June
2023 756 494 - 1,250
________ ________ ________ ________
Balance as at 1 January
2023 7,464 4,104 23 11,591
Depreciation charge for
the period 280 443 95 818
Disposals (435) - - (435)
Reclassifications 743 (850) 107 -
Reclassifications from
ROU assets (165) - - (165)
Hyperinflationary adjustment 39 28 - 67
Effect of movements in
foreign exchange (558) (286) (9) (853)
________ ________ ________ ________
Balance as at 30 June
2023 (unaudited) 7,368 3,439 216 11,023
________ ________ ________ ________
Net book value
At 31 December 2022 (audited) 6,637 665 - 7,302
________ ________ ________ ________
At 30 June 2023 (unaudited) 6,155 - 44 6,199
________ ________ ________ ________
Inventories
7
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
(restated)
$'000 $'000 $'000
Raw materials and consumables 6,277 9,336 6,605
Work in progress 8,773 7,325 7,735
Finished goods 10,215 18,224 13,002
_______ _______ _______
25,265 34,885 27,342
_______ _______ _______
Trade and other receivables
8
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Trade receivables 22,994 26,927 16,167
Other debtors 2,477 566 2,465
Loan receivables - - -
________ ________ ________
25,471 27,493 18,632
Prepayments and accrued income 7,500 13,359 8,248
________ ________ ________
Total trade and other receivables 32,971 40,852 26,880
________ ________ ________
The carrying value of trade and other receivables classified at amortised cost approximates fair value.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision to trade receivables. The expected loss rates are based on the Group's historical credit losses. Due to the nature of the Group's customers no credit loss provision has been made at the period end.
9 Loans and borrowings
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Non-current liabilities
Non-current portion of finance lease
liabilities (7,905) (6,436) (8,900)
________ ________ ________
(7,905) (6,436) (8,900)
________ ________ ________
Current liabilities
Current portion of secured bank loans (8,416) (9,132) (9,583)
Unsecure bank overdraft (1,109) (3,537) (358)
Invoice finance (7,076) (13,388) (7,117)
________ ________ ________
(16,601) (26,057) (17,058)
________ ________ ________
Current portion of finance lease liabilities (2,311) (2,050) (3,022)
________ ________ ________
(18,912) (28,107) (20,080)
________ ________ ________
(26,817) (34,543) (28,980)
________ ________ ________
10 Trade and other payables
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Current
Trade payables 20,484 26,544 21,793
Non-trade payables and accrued expenses 11,077 11,418 10,266
Employee social security and taxes 1,605 661 2,449
Contract liabilities 2,689 7,112 4,118
Other payables 7,840 4,527 7,298
________ ________ ________
43,695 50,262 45,924
________ ________ ________
11 Related parties
Key Management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the Directors of the Company.
The compensation of key management personnel (including the directors) is as follows:
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 to 30 June 2022
June 2023 2022
$'000 $'000 $'000
Key management remuneration including
social security costs 783 646 1,240
Company contributions to money purchase
pension plans 9 5 10
________ ________ ________
792 651 1,250
________ ________ ________
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 to 30 June 2022
June 2023 2022
$'000 $'000 $'000
Directors' remuneration 595 646 1,099
Company contributions to money purchase
pension plans 4 5 7
________ ________ ________
599 651 1,106
________ ________ ________
12 Share options
During 2022 CT Automotive Group PLC granted share options to 4 individuals. Subject to vesting conditions, the Directors will have the option to acquire a total of 3,022,852 Ordinary Shares at an exercise price of GBP0.005 per share.
The options will vest in 3 equal tranches on 23 December 2024, 23 December 2025 and 23 December 2026 subject to vesting conditions based on earnings-based targets for the financial years ended 31 December 2023, 31 December 2024 and 31 December 2025.
As David Wilkinson left the Group in April 2023, 1,018,665 options which were granted to him during 2022 were forfeited in 2023.
As at 30 June 2023 2,004,187 share options are outstanding.
13 Alternative performance measures
Alternative Performance Measures (APMs) are considered by the Directors
to better allow the readers of the accounts to understand the underlying
performance of the Group. The Directors also monitor these APMs
to assess financial performance throughout the period.
The APMs used by the Directors include:
* Underlying EBITDA - calculated as EBITDA adjusted for
non- underlying items
* Underlying EBITDA margin - calculated as underlying
EBITDA divided by revenue in the period
* Underlying operating profit - calculated as Operating
profit/(loss) adjusted for non-underlying items
* Underlying operating profit margin - calculated as
underlying operating profit divided by revenue in the
period
* Underlying profit before tax - calculated as Profit
before tax adjusted for non-underlying items
* Underlying profit before tax margin - calculated as
underlying profit before tax divided by revenue in
the period
EBITDA is calculated using Operating profit/(loss) before interest,
taxes, depreciation and amortisation.
Detail of each of the non-underlying items is disclosed in Note
4.
Underlying EBITDA and underlying EBITDA margin
Unaudited Unaudited Year ended
6 months 6 months 31
to 30 to 30 December
June June 2022
2023 2022
$'000 $'000 $'000
Underlying EBITDA 6,671 (4,554) (7,129)
Non- underlying items
* AIM listing fees - (31) (31)
* Release of previously capitalised tooling overheads (345) - -
(884) - -
* Restructuring and margin improvement costs
* Impairment of Goodwill - - (1,158)
* Impact of applying IAS 29 (8) (563) (665)
* China housing fund contribution - - (453)
* Start-up costs in Mexico - - (1,738)
* Irrecoverable excess freight costs - (65) (238)
_______ _______ _______
EBITDA 5,434 (5,213) (11,412)
_______ _______ _______
Underlying EBITDA margin 9.8% (8.4%) (5.8%)
Underlying operating Profit/(Loss) and underlying operating
profit margin
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 June to 30 June 2022
2023 2022
$'000 $'000 $'000
Underlying operating Profit/(Loss) 3,680 (7,527) (12,551)
Non-underlying items
* AIM listing fees - (31) (31)
* Release of previously capitalised tooling overheads (345) - -
(884) - -
* Restructuring and margin improvement costs
* Impairment of Goodwill - - (1,158)
* Impact of applying IAS 29 (8) (563) (665)
* China housing fund contribution - - (453)
* Start-up costs in Mexico - - (1,738)
* Irrecoverable excess freight costs - (65) (238)
_______ _______ _______
Operating Profit/(Loss) 2,443 (8,186) (16,834)
_______ _______ _______
Underlying operating Profit/(Loss)
margin 5.4% (13.9%) (10.1%)
Underlying Profit/(Loss) before tax and underlying Profit/(Loss)
before tax margin
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 June to 30 June 2022
2023 2022
$'000 $'000 $'000
Underling Profit/(Loss) before
tax 2,542 (8,351) (14,538)
Non-underlying items
* AIM listing fees - (31) (31)
* Release of previously capitalised tooling overheads (345) - -
(884) - -
* Restructuring and margin improvement costs
* Impairment of Goodwill - - (1,158)
* Impact of applying IAS 29 (8) (563) (665)
* China housing fund contribution - - (453)
* Start-up costs in Mexico - - (1,738)
* Irrecoverable excess freight costs - (65) (238)
_______ _______ _______
Profit/(Loss) before tax 1,305 (9,010) (18,821)
_______ _______ _______
Underlying Profit/(Loss) before
tax margin 3.7% (15.4%) (11.7%)
14 Cash and cash equivalents
Cash and cash equivalents for purposes of the statement of cash
flows comprises:
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Cash and cash equivalents 7,592 5,835 4,829
Unsecured bank overdraft (1,109) (3,537) (358)
________ ________ ________
6,483 2,298 4,471
________ ________ ________
15 Prior period restatement
As part of finalising FY22 year-end accounts, the Group has identified
prior period adjustments in relation to calculating the FY21 year-end
inventory and transfer of tooling assets from the Group balance
sheet to cost of sales upon the sale to the customer. Posting
of the adjustments to FY21 year-end balance sheet had a knock-on
effect on previously announced H1 22 results.
The impact of posting the inventory adjustment resulted in an
increase in the cost of sales in the period to 30 June 2022 by
$1,111,000 and reduced inventories as at 30 June 2022 by $9,387,000.
The impact of posting the tooling adjustment resulted in the value
reported in the cost of sales for the period to 30 June 2022 reducing
by $431,000 and the value of property, plant and equipment decreasing
by $2,196,000.
Therefore, the overall impact of prior period adjustments is an
increase in the cost of sales for the period to 30 June 2022 by
$681,000 and a reduction in net assets as at 30 June 2022 by $11,583,000
with a corresponding reduction in brought forward reserves of
$10,902,000.
16 Discontinued operations
On 30 September 2022, the Group made a decision to discontinue
Chinatool Automotive Systems Limited.
The results of discontinued operations, which have been included
in the profit for the period, were as follows:
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Revenue - 3,027 3,985
Cost of sales - (3,629) (5,420)
Other income - 1 21
Distribution expenses - - (110)
Administrative expenses (365) (237) (1,276)
Net finance income / expense - (57) (93)
________ ________ ________
Profit before tax (365) (895) (2,739)
Attributable tax (expense)/credit (2) 224 (49)
________ ________ ________
Loss on disposal of discontinued operations (367) (671) (2,789)
________ ________ ________
There were no significant external cash inflows or outflows during the six months ended 30 June 2023 in relation to discontinued operations.
Assets and liabilities of Chinatool Automotive Systems have not been classified as held for sale as at 30 June 2023 because all short-term assets and liabilities are expected to be either settled or transferred to continuing Group operations. These are included within the respective Group assets and liabilities and are as follows:
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000s $'000
Assets
Property, plant and equipment - 166 68
Right of use assets - 727 98
Inventories - 1,250 219
Trade and other receivables 23 8,131 171
Deferred tax liability - 173 -
Cash 4 43 34
_______ _______ _______
Total assets 27 10,490 590
Liabilities
Trade and other payables (1,684) (7,786) (810)
Overdraft - (1,497) (153)
Lease liability (333) (616) (494)
Current tax liability - (91) (46)
Deferred tax liability (90) - (37)
________ _______ ________
Total liabilities (2,107) (9,990) (1,540)
________ _______ ________
Net (liabilities)/ assets (2,080) 500 (950)
________ ________ ________
17 Share capital issue
On 27 April 2023 the Group undertook a fundraise and achieved
total gross proceeds of $9,623,000 (before transaction costs of
$502,000).
The fundraising was completed through a combination of subscription
and placement of 22,664,259 new ordinary shares at an issue price
of 34 pence per share. The new ordinary shares represent approximately
44% of the existing issued share capital.
The proceeds of the fund raise have been recognised within Share
Capital ($142,000) and Share Premium ($8,979,000), after transaction
costs.
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END
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