CT Automotive Group PLC Inventory balance sheet adjustments (2362Z)

TIDMCTA

RNS Number : 2362Z

CT Automotive Group PLC

12 May 2023

12 May 2023

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU NO. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").

CT AUTOMOTIVE GROUP PLC

("CT Automotive", the "Company" or the "Group")

Inventory balance sheet adjustments

The Company has identified an error with regards to the calculation of the year end inventory on consolidation, which relates to a number of years. This is expected to result in the reduction of inventory, and therefore net assets, by c.$8.4m at 31 December 2022, of which c.$8.3m existed at 31 December 2021. Therefore, the impact of these balance sheet movements results in a c.$0.1m increased loss in the year ended 31 December 2022, with the balance being attributable to prior years.

The adjustment relates to the calculation of the provision for unrealised profits resulting from intra Group sales and a corresponding absorption of overheads within inventory.

The reduction to inventory is a non-cash adjustment. There is no adverse impact to profitability in the current financial year ending 31 December 2023.

Trading in the current financial year has been encouraging, with strong customer demand and more stable production schedules. As a result, the Board remains confident of achieving market expectations for FY23.

For further information please contact:

 
 CT Automotive                         via MHP 
  Simon Phillips, Executive Chairman 
  Scott McKenzie, Chief Executive 
  Officer 
  Anna Brown, Chief Financial 
  Officer 
 
 MHP (Financial PR)                    Tel: [phone] 
  Tim Rowntree                          [e-mail] 
  Charlie Barker 
 
 Liberum (Nominated Adviser and        Tel: [phone] 
  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, Turkey and the Czech Republic.

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 roster of OEM end customers, both directly and via Tier One suppliers including Faurecia and Marelli. End customers include volume manufacturers, such as Nissan, and luxury car brands such as Bentley and Lamborghini. In addition, the Group supplies electric car manufacturers, including Lucid. It has also recently started 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.

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May 12, 2023 02:00 ET (06:00 GMT)