TIDMGDWN
RNS Number : 5902F
Goodwin PLC
29 July 2016
PRELIMINARY ANNOUNCEMENT
Goodwin PLC today announces its preliminary results for the year
ended 30th April 2016.
CHAIRMAN'S STATEMENT
The pre-tax profit for the Group for the twelve month period
ending 30th April 2016 was GBP12.3 million (2015: GBP20.1 million),
a decrease of 39% on a revenue of GBP124 million (2015: GBP127
million) which is 3% down on the figures reported for the same
period last financial year. The Directors propose an unchanged
ordinary dividend of 42.348p (2015: 42.348p).
The diversity of products that address different world markets
is part of the Group's strength, but even the history of diversity
between our foundry, our valve companies that primarily address the
oil, gas and LNG industries, our pump companies that primarily
address the mining industries, our radar systems company and our
ten refractory companies has not been enough to prevent the decline
in profits over the past two years.
The severe contraction of the oil and gas industry worldwide,
with over US$530 billion of cancelled or delayed projects, and the
mining industries who have had a very difficult year has presented
a challenge and the resultant reduced spending levels in the
jewellery markets and the slowdown in China have all been
unhelpful. There is, however, brightness on the horizon, with Easat
Radar Systems, which absorbed NRPL Aero Oy, Finland this last year,
and has a record work load of GBP12.5 million. Noreva GmbH has a
similar order book level for its nozzle valves, which results from
a combination of winning large orders in Saudi Arabia and from the
USA LNG industry, and also starts the new year with a record order
book.
Steps have been taken at Goodwin International over the past two
years to add additional market sectors to its portfolio of products
and customers by offering machining and high integrity fabrication
for other customers. This has resulted in additional order input
for the new financial year but as yet not enough to compensate for
the drop off of the oil and gas sector where we are still winning
some orders of the few that are available. Some of this new non
valve work will be spread out over multi-year contracts, but
nevertheless it has in part allowed the Group to mitigate some of
the major damage from such a vast contraction of the oil, gas and
mining industry activity where we will be unlikely to see
significant signs of regeneration for another two years.
Goodwin Refractory Services benefitted from the asset purchase
it made last year from a complementary French casting powder
company and grew its pre-tax profits by 47% to GBP1.47 million.
Similarly, in this new financial year, following intangible asset
purchases in October 2015 from Westland (GB Trading) Limited and
having spent six months of last year constructing a new perlite
plant at Hoben International, both Dupré Minerals and Hoben
International are expected to significantly improve their
profitability as compared to the financial year just completed.
All the above does not alter the fact that our steel foundry and
UK valve manufacturing activity have less orders and the ones we
have are on tighter margins, but at least the new areas of business
are softening the unwelcome severe downturn in the oil and gas and
mining industries. It would be appropriate to thank all those
involved in developing these new areas of business which have
programmes that run for many years.
The Group order work load as at 30th April 2016 is 16 % higher
than 12 months earlier and stood at GBP92 million. Although some of
this workload has tighter margins, it provides a better start to
the new year which will be difficult with world trading conditions
being less than buoyant.
Goodwin International will be launching its newly developed and
patented axial piston control and shut off valve at the Düsseldorf
Valve World Exhibition this coming November and, similarly in
Düsseldorf, Goodwin Steel Castings will be presenting a paper at
the Duplex Conference in October on higher performing duplex
stainless steel castings and welding electrode wire and rod.
The Group's net cash generated from operating activities prior
to investments amounted to GBP9.9 million (2015: GBP18.0 million)
and the Group's gearing at the year end was 26.1 % (2015: 12.3
%).
Shareholders' equity has risen from GBP82.7 million to GBP86.3
million. It has been decided by the Board that it would be
appropriate, subject to shareholder approval at the AGM, to
incentivise the Executive Directors of Goodwin PLC to drive back
the total shareholder return (TSR) towards the levels it enjoyed
two years ago by increasing Group turnover and pre-tax
profitability. Whilst this may not occur in one year, the three
year programme targeted to bring in new products and customers will
hopefully, with hard work, position the Group in a more favourable
situation. Accordingly, shareholders are also being asked to
approve a revised Directors' Remuneration Policy incorporating the
new long term incentive plan.
For the key performance indicators and ratios please refer to
the web site www.goodwin.co.uk/2016.
We take the opportunity of thanking the employees and the
Directors both in our UK and overseas companies for the hard work
put in to achieve these Group results.
28th July, 2016 J.W. Goodwin
Chairman
OBJECTIVES, STRATEGY AND BUSINESS MODEL
The Group's main OBJECTIVE is to have a sustainable long-term
engineering based business with good potential for profitable
growth while providing a fair return to our shareholders.
The Board's STRATEGY to achieve this is:
-- to supply a range of technically advanced products to growth
markets in the mechanical engineering and refractory engineering
segments in which we have built up a global reputation for
engineering excellence, quality, efficiency, reliability, price and
delivery;
-- to manufacture advanced technical products profitably,
efficiently, and economically;
-- to maintain an ongoing programme of investment in plant,
facilities, sales and marketing, research and development with a
view to increasing efficiency, reducing costs, increasing
performance, delivering better products for our customers,
expanding our global customer base and keeping us at the forefront
of technology within our markets;
-- to control our working capital and investment programme to
ensure a safe level of gearing;
-- to maintain a strong capital base to retain investor,
customer, creditor and market confidence and so help sustain future
development of the business;
-- to support a local presence and a local workforce in order to
stay close to our customers;
-- to invest in training and development of skills for the Group's future.
BUSINESS MODEL
The Group's focus is on manufacturing within two sectors;
mechanical engineering and refractory engineering and through this
division of our manufacturing activities, the Group benefits from
market diversity. Further details of our business and products are
shown on our website www.goodwin.co.uk/2016.
Mechanical Engineering
The Group produces a wide range of dual plate and axial nozzle
check valves to serve the oil, petrochemical, gas, LNG and water
markets. We create value by globally sourcing the best quality raw
material at good prices, manufacturing in highly efficient
facilities using up to date technology to provide the very reliable
products to the required specification, at competitive prices and
with timely deliveries.
Our mechanical engineering markets also include high alloy
castings, machining and general engineering products which
typically form part of large construction projects such as power
generation plants, oil refineries, high integrity offshore
structural components and bridges. The Group through its foundry
and CNC machine shop has the capability to pour the castings,
radiograph and also finish them in-house. This capability is also
targeting the defence industry.
Goodwin International, the largest company in the Mechanical
Engineering Division, designs and manufactures dual plate and axial
nozzle valves and also undertakes specialised CNC machining and
fabrication work. Noreva GmbH also designs and manufactures axial
nozzle valves. Both Goodwin International and Noreva purchase the
majority of their sand mould castings from Goodwin Steel Castings
and this vertical integration gives rise to competitive benefits,
increased efficiencies, and timely deliveries.
At Goodwin Pumps India we manufacture a superior range of
submersible slurry pumps for end users in India, China, Brazil and
Africa. Easat Radar Systems designs and builds bespoke
high-performance radar antennas to the global market of major
defence contractors, civil aviation authorities and border security
agencies. We create value on these by innovative design and
assembly in our own facilities using bought in or engineered
in-house components.
Refractory Engineering
Within the Refractory Engineering Division, Goodwin Refractory
Services (GRS), creates value by developing, manufacturing and
selling investment casting powders, waxes, silicone rubber and
machinery for use in the following operations: jewellery casting,
aerospace, tyre moulding and the compressor wheels for
turbochargers. The Division has nine other investment casting
powder companies around the world that carry out the same
activities as GRS, located in China, India, Thailand and Brazil.
These nine companies are vertically integrated with another of our
UK refractory companies, Hoben International, which manufactures
cristobalite that it sells to the ten group jewellery casting
manufacturing companies, as well as producing ground silica which
also goes into casting powders. Towards the end of the year Hoben
International started to manufacture and sell perlite products.
The other UK refractory company is Dupré Minerals which focuses
on producing exfoliated vermiculite that is used in insulation,
brake linings and fire protection products including textiles that
can withstand high temperatures. Dupré also sells consumables to
the shell moulding casting industry.
CONSOLIDATED INCOME STATEMENT
for the year ended 30th April, 2016
2016 2015
GBP000 GBP000
CONTINUING OPERATIONS
Revenue 123,539 127,049
Cost of sales (89,196) (85,754)
GROSS PROFIT 34,343 41,295
Distribution expenses (3,311) (3,586)
Administrative expenses (18,284) (17,262)
OPERATING PROFIT 12,748 20,447
Financial expenses (775) (682)
Share of profit of associate companies 341 288
PROFIT BEFORE TAXATION 12,314 20,053
Tax on profit (3,376) (4,601)
PROFIT AFTER TAXATION 8,938 15,452
ATTRIBUTABLE TO:
Equity holders of the parent 8,838 15,025
Non-controlling interests 100 427
PROFIT FOR THE YEAR 8,938 15,452
BASIC AND DILUTED EARNINGS PER ORDINARY
SHARE 122.75p 208.68p
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30th April, 2016
2016 2015
GBP000 GBP000
PROFIT FOR THE YEAR 8,938 15,452
OTHER COMPREHENSIVE EXPENSE
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY
TO THE INCOME STATEMENT:
Foreign exchange translation differences 279 (1,176)
Effective portion of changes in
fair value of cash flow hedges (728) 2,630
Change in fair value of cash flow
hedges transferred to the income
statement (1,923) (2,197)
Tax charge on items that may be
reclassified subsequently to the
income statement 516 (87)
OTHER COMPREHENSIVE EXPENSE FOR
THE YEAR, NET OF INCOME TAX (1,856) (830)
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR 7,082 14,622
ATTRIBUTABLE TO:
Equity holders of the parent 7,018 14,024
Non-controlling interests 64 598
7,082 14,622
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th April, 2016
Total
Cash attributable
flow to equity Non-
Share Translation hedge Retained holders controlling Total
capital reserve reserve earnings of interests equity
the parent
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
YEARED 30TH
APRIL, 2016
Balance at 1st
May, 2015 720 (1,356) 1,541 81,836 82,741 3,781 86,522
Total comprehensive
income:
Profit - - - 8,838 8,838 100 8,938
Other comprehensive
income:
Foreign exchange
translation
differences - 315 - - 315 (36) 279
Net movements
on cash flow
hedges - - (2,135) - (2,135) - (2,135)
TOTAL COMPREHENSIVE
INCOME FOR THE
YEAR - 315 (2,135) 8,838 7,018 64 7,082
Transactions
with owners of
the Company
recognised
directly in equity 174 174
Purchase of
non-controlling
interests without
a change in
control - - - (360) (360) - (360)
Dividends paid - - - (3,105) (3,105) (196) (3,301)
BALANCE AT 30TH
APRIL, 2016 720 (1,041) (594) 87,209 86,294 3,823 90,117
YEARED 30TH
APRIL, 2015
Balance at 1st
May, 2014 720 (9) 1,195 71,684 73,590 3,980 77,570
Total comprehensive
income:
Profit - - - 15,025 15,025 427 15,452
Other comprehensive
income:
Foreign exchange
translation
differences - (1,347) - - (1,347) 171 (1,176)
Net movements
on cash flow
hedges - - 346 - 346 - 346
TOTAL COMPREHENSIVE
INCOME FOR THE
YEAR - (1,347) 346 15,025 14,024 598 14,622
Purchase of
non-controlling
interest without
a change in
control - - - (1,824) (1,824) (709) (2,533)
Dividends paid - - - (3,049) (3,049) (88) (3,137)
BALANCE AT 30TH
APRIL, 2015 720 (1,356) 1,541 81,836 82,741 3,781 86,522
CONSOLIDATED BALANCE SHEET
at 30(th) April, 2016
2016 2015
GBP000 GBP000
NON-CURRENT ASSETS
Property, plant and equipment 62,530 55,659
Investment in associates 1,640 1,477
Intangible assets 17,565 10,865
81,735 68,001
CURRENT ASSETS
Inventories 35,631 32,771
Trade and other receivables 33,792 26,364
Derivative financial
assets 2,107 4,624
Cash and cash equivalents 4,970 7,732
76,500 71,491
TOTAL ASSETS 158,235 139,492
CURRENT LIABILITIES
Interest-bearing loans
and borrowings 8,531 277
Trade and other payables 32,608 26,938
Deferred consideration 500 500
Derivative financial
liabilities 2,818 2,587
Liabilities for current
tax 1,785 1,540
Warranty provision 151 224
46,393 32,066
NON-CURRENT LIABILITIES
Interest-bearing loans
and borrowings 18,497 17,149
Warranty provision 179 297
Deferred tax liabilities 3,049 3,458
21,725 20,904
TOTAL LIABILITIES 68,118 52,970
NET ASSETS 90,117 86,522
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT
Share capital 720 720
Translation reserve (1,041) (1,356)
Cash flow hedge reserve (594) 1,541
Retained earnings 87,209 81,836
TOTAL EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT 86,294 82,741
NON-CONTROLLING INTERESTS 3,823 3,781
TOTAL EQUITY 90,117 86,522
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30th April, 2016
2016 2016 2015 2015
GBP000 GBP000 GBP000 GBP000
CASH FLOW FROM OPERATING ACTIVITIES
Profit from continuing operations
after tax 8,938 15,452
Adjustments for:
Depreciation 4,748 4,903
Amortisation of intangible
assets 583 359
Impairment of intangible assets 340 59
Gain arising on bargain purchase (143) -
Financial expenses 775 682
(Profit) / Loss on sale of
property, plant and equipment (456) 175
Share of profit of associate
companies (341) (288)
Tax expense 3,376 4,601
OPERATING PROFIT BEFORE CHANGES
IN WORKING CAPITAL AND PROVISIONS 17,820 25,943
(Increase) / decrease in trade
and other receivables (5,707) 5,192
Increase in inventories (2,357) (1,743)
Decrease in trade and other
payables (excluding payments
on account) (1,453) (2,292)
Increase / (decrease) in payments
on account 5,402 (3,434)
CASH GENERATED FROM OPERATIONS 13,705 23,666
Interest paid (703) (705)
Corporation tax paid (3,058) (4,904)
Interest element of finance
lease obligations (20) (28)
NET CASH FROM OPERATING ACTIVITIES 9,924 18,029
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of property,
plant and equipment 968 199
Acquisition of intangible assets (4,319) (1,263)
Acquisition of property, plant
and equipment (7,707) (17,401)
R&D Expenditure capitalised (1,430)
Acquisition of subsidiaries
net of cash acquired (2,005)
Purchase of non-controlling
interest - (2,533)
Additional payment for existing
subsidiary (330) (80)
Additional investment in associate
companies (30) (64)
Dividends received from associate
companies 173 180
NET CASH OUTFLOW FROM INVESTING
ACTIVITIES (14,680) (20,962)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of capital element
of finance lease obligations (274) (449)
Dividends paid (3,105) (3,049)
Dividends paid to non-controlling
interests (196) (88)
Proceeds from loans and committed
facilities 3,305 10,000
Repayment of loans and committed
facilities (3,000) (2,000)
Finance fees (100) -
NET CASH (OUTFLOW) / INFLOW
FROM FINANCING ACTIVITIES (3,370) 4,414
NET (DECREASE) / INCREASE IN
CASH AND CASH EQUIVALENTS (8,126) 1,481
Cash and cash equivalents
at beginning of year 7,732 6,233
Effect of exchange rate fluctuations
on cash held (19) 18
CASH AND CASH EQUIVALENTS AT OF YEAR (413) 7,732
PRINCIPAL RISKS AND UNCERTAINTIES
The Group's operations expose it to a variety of risks and
uncertainties. These risks are no different to previous years, and
they are not expected to change substantially in the foreseeable
future. The Directors confirm that they have carried out a robust
assessment of the principal risks facing the company, including
those that would threaten its business model, future performance,
solvency or liquidity. The key risks are discussed below.
Market risk: The Group provides a range of products and
services, and there is a risk that the demand for these products
and services will vary from time to time because of competitor
action or economic cycles or international trade friction or even
wars. As shown in note 2 to the financial statements, the Group
operates across a range of geographical regions, and its turnover
is split across the UK, Europe, USA, the Pacific Basin and the rest
of the world. This spread reduces risk in any one territory.
Similarly, the Group operates in both mechanical engineering and
refractory engineering sectors, mitigating the risk of a downturn
in any one product area. The potential risk of the loss of any key
customer is limited as, typically, no single customer accounts for
more than 10% of turnover. As described in the Business Model, the
Group generates significant sales from the worldwide energy
markets. Whilst these markets may suffer short term short declines,
over the medium to long-term the growing worldwide demand for
energy will ensure these markets remain buoyant.
Technical risk: The Group develops and launches new products as
part of its strategy to enhance the long-term value of the Group.
Such development projects carry business risks, including
reputational risk, abortive expenditure and potential customer
claims which may have a material impact on the Group. The potential
risk here is seen as manageable given the Group is developing
products in areas in which it is knowledgeable and new products are
tested prior to their release into the market.
Product failure/Contractual risk: The risks that the Group
supplies products that fail or are not manufactured to
specification are risks that all manufacturing companies are
exposed to but we try to minimise these risks through the use of
highly skilled personnel operating within robust quality control
system environments using third party accreditations where
appropriate. With regard to the risk of failure in relation to new
products coming on line, the additional risks here are minimised at
the R&D stage, where prototype testing and the deployment of a
robust closed loop product performance quality control system
provides feed back to the design department for the products we
manufacture and sell. The risk of not meeting safety expectations,
or causing significant adverse impacts to customers or the
environment is countered by the combination of the controls
mentioned within this section. The risk of product obsolescence is
countered by R&D investment.
Health and safety: The Group's operations involve the typical
health and safety hazards inherent in manufacturing and business
operations. The Group is subject to numerous laws and regulations
relating to health and safety around the world. Hazards are managed
by carrying out risk assessments and introducing appropriate
controls, as well as attending safety training courses.
Acquisitions: The Group's growth plan over recent years has
included a number of acquisitions. There is the risk that these, or
future acquisitions, fail to provide the planned value. This risk
is mitigated through financial and technical due diligence during
the acquisition process and the Group's inherent knowledge of the
markets they operate in.
Financial risk: The principal financial risks faced by the Group
are changes in market prices (interest rates, foreign exchange
rates and commodity prices). Detailed information on the financial
risk management objectives and policies is set out in note 20 to
the financial statements. The Group has in place risk management
policies that seek to limit the adverse effects on the financial
performance of the Group by using various instruments and
techniques, including credit insurance, stage payments, forward
foreign exchange contracts, secured and unsecured credit lines, and
interest rate swaps.
Regulatory compliance: The Group's operations are subject to a
wide range of laws and regulations. Both within Goodwin PLC and its
subsidiaries, the Directors and Senior Managers within the
companies make best endeavours to comply with the relevant laws and
regulations.
Assessment of Principal Risks: Changes and likely impact: The
lead up to the vote on whether to leave or remain in the EU saw
delays in the release of public and private infrastructure
investments. Although a post balance sheet event the UK's vote to
exit from the EU will impose new challenges and uncertainties. The
review of trade agreements and legislation is an unknown. However,
we see the immediate effect of a weakening of sterling as being a
major competitive advantage in our favour. For year end 30th April,
2015 60% of our exports were to countries other than those in the
EU and this year over 50% of sales are to non EU areas where we
will now be more competitive.
Forward looking statements
The Preliminary Statement contains forward-looking type
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 for future events or
developments, whether as a result of new information, future events
or otherwise, except to the extent legally required.
Statement of directors' responsibilities in respect of the
annual report and the financial statements
We confirm that to the best of our knowledge:
-- the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss
of the Company and the undertakings included in the consolidation
taken as a whole; and
-- the Group Strategic Report includes a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and Accounts, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group's position and
performance, business model and strategy.
J. W. Goodwin, Chairman
R. S. Goodwin, Managing Director
J. Connolly, Director
M. S. Goodwin, Director
S. R. Goodwin, Director
S. C. Birks, Director
B. R. E. Goodwin, Director
T. J. W. Goodwin, Director
J. E. Kelly, Non-Executive Director
Accounting Policies
Goodwin PLC (the "Company") is incorporated in the UK.
The Group Financial Statements consolidate those of the Company
and its subsidiaries (together referred to as the "Group") and
equity account the Group's interest in associates.
The Group financial statements have been prepared and approved
by the Directors in accordance with International Financial
Reporting Standards as adopted by the EU ("Adopted IFRSs"). The
accounting policies are included in note 1 of the financial
statements to be published shortly. The comparative results for the
year ended 30th April, 2015 have also been prepared on this
basis.
New IFRS standards and interpretations adopted during 2016
In 2016 the following amendments had been endorsed by the EU,
became effective and therefore were adopted by the Group:
-- Annual improvements to IFRSs 2010-2012 Cycle (effective for
annual periods beginning on or after 1 February, 2015
-- Annual improvements to IFRSs 2011-2013 Cycle (endorsed on 18(th) December, 2014)
The adoption of these standards and amendments has not had a
material impact on the Group's financial statements.
The financial information previously set out does not constitute
the Company's statutory accounts for the years ended 30th April,
2016 or 2015 but is derived from those accounts. Statutory accounts
for 2015 have been delivered to the Registrar of Companies, and
those for 2016 will be delivered in due course. The auditors have
reported on those accounts; their report was:
i. unqualified;
ii. did not include references 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.
Copies of the 2016 accounts are expected to be posted to
shareholders within the next two weeks and will also be available
on the Company's website: www.goodwin.co.uk and from the Company's
Registered Office: Ivy House Foundry, Hanley, Stoke-on-Trent ST1
3NR.
Note 1
Segmental information
Products and services from which reportable segments derive
their revenues
For the purposes of management reporting to the chief operating
decision maker, the Board of Directors, the Group is organised into
two reportable operating divisions: mechanical engineering and
refractory engineering. Financial information for each operating
division is also available in a disaggregated form in line with the
identified cash generating units. Segment assets and liabilities
include items directly attributable to segments as well as those
that can be allocated on a reasonable basis. In accordance with the
requirements of IFRS 8 the Group's reportable segments, based on
information reported to the Group's Board of Directors for the
purposes of resource allocation and assessment of segment
performance are as follows;
-- Mechanical Engineering - casting, machining and general engineering
-- Refractory Engineering - powder manufacture and mineral processing
Information regarding the Group's operating segments is reported
below. Associates are included in Refractory Engineering.
Mechanical Refractory
Engineering Engineering Sub total
Year Ended 30th,
April 2016 2015 2016 2015 2016 2015
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Revenue
External sales 88,747 93,545 34,792 33,504 123,539 127,049
Inter-segment
sales 18,248 24,899 4,534 5,912 22,782 30,811
Total revenue 106,995 118,444 39,326 39,416 146,321 157,860
Reconciliation to
consolidated revenue:
Inter-segment
sales (22,782) (30,811)
Consolidated revenue
for the year 123,539 127,049
Profits
Segment result
including associates 10,961 16,397 4,211 5,139 15,172 21,536
Group centre (2,083) (801)
Group finance
expenses (775) (682)
Consolidated profit before
tax for the year 12,314 20,053
Tax (3,376) (4,601)
Consolidated profit after
tax for the year 8,938 15,452
Segmental Segmental total Segmental net
total assets liabilities assets
Year Ended 2016 2015 2016 2015 2016 2015
30th, April
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Segmental
net assets
Mechanical
Engineering 82,569 60,088 65,432 48,082 17,137 17,553
Refractory
Engineering 43,207 35,164 28,455 16,572 14,752 18,690
Sub total
reportable
segment 125,776 95,252 93,887 64,654 31,889 36,243
Goodwin PLC
net assets 71,620 68,794
Elimination of Goodwin
PLC investments (22,441) (24,122)
Goodwill 8,994 7,970
Other consolidation
adjustments 55 (2,363)
Consolidated
total net
assets 90,117 86,522
Segmental property, plant and
equipment (PPE) capital expenditure
Goodwin PLC 5,633 7,586
Mechanical Engineering 3,405 4,843
Refractory Engineering 3,030 4,542
12,068 16,971
Depreciation,
Amortisation,
Impairment
2016 2015
GBP000 GBP000
Mechanical
Engineering 2,690 2,188
Refractories
Engineering 1,200 957
Goodwin PLC 1,781 2,176
5,671 5,321
For the purposes of monitoring segment performance and
allocating resources between segments, the Group's Board of
Directors monitors the tangible and financial assets attributable
to each segment. All assets and liabilities are allocated to
reportable segments with the exception of those held by the parent
Company, Goodwin PLC, and those held as consolidation
adjustments.
Geographical segments
The Group operates in the following principal locations.
In presenting the information on geographical segments, revenue
is based on the location of its customers and assets on the
location of the assets.
Year ended 30th April, Year ended 30th April,
2016 2015
Revenue Operational Non- PPE Revenue Operational Non-current PPE
net assets current Capital net assets Capital
assets ex-penditure assets Expenditure
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
UK 36,776 66,292 69,383 9,771 25,415 63,150 56,658 11,876
Rest of
Europe 21,656 8,035 1,120 453 24,680 5,921 724 602
USA 13,974 - - - 13,009 - - -
Pacific
Basin 26,958 11,497 5,610 708 39,321 12,430 5,587 3,799
Rest of
World 24,175 4,293 5,622 1,136 24,624 5,021 5,032 694
Total 123,539 90,117 81,735 12,068 127,049 86,522 68,001 16,971
Note 2 Intangible assets
During the year, the Group added to its portfolio of goodwill
and intangible assets. The main additions are described below:
GBP3.5 million on manufacturing rights and customer lists
relating to the acquisition of the vermiculite and perlite
activities from Westland (GB Trading) Limited during October 2015
satisfied fully by cash.
GBP1.07 million of goodwill relating to the 100% acquisition by
Easat Radar Systems Limited (Easat) of NRPL Aero Oy, a Finnish
transceiver company. The transaction comprised cash of GBP1.56
million and the transfer of 20% of the equity of Easat to the
former owner of NRPL Aero Oy. Management have assessed the fair
value of the NRPL brand name to be GBP408,000 based on the expected
net present value of future cash flows.
GBP640,000 on the acquisition of the manufacturing rights and
non-compete agreements in relation to a Chinese lost wax investment
powder manufacturing company in China.
GBP736,000 has been capitalised during the year in relation to
transceiver development expenditure by NRPL.
GBP594,000 has been capitalised during the year in relation to
the development of a new check valve range by Goodwin
International.
Note 3 Acquisitions
Easat Radar Systems Limited (Easat) acquired 100% of the share
capital of NRPL Aero Oy during the year for a cash consideration of
GBP1.525 million plus 20% of the share capital of Easat. The fair
value of the Easat shares was assessed as 20% of the net asset
value of Easat as at the 31(st) May 2015. The transaction costs
involved in completing the acquisition were not significant. The
acquisition gives the Group the capability to supply complete radar
systems to the air traffic control and coastal surveillance market
place.
Ultratec Jewelry Supplies Limited acquired 100% of the share
capital of Shenzhen King-Top Modern Hi-Tech Company Limited in
January 2016 for a cash consideration of USD $600,000. The
transaction costs involved were not significant. The acquisition
has strengthened the Group's presence within the Chinese investment
powder supplies market.
Note 4
The directors propose the payment of an ordinary dividend of
42.348 per share (2015: ordinary dividend of 42.348p). If approved
by shareholders, the ordinary dividend will be paid on 7th October,
2016 to shareholders on the register at the close of business on
9th September, 2016.
Note 5
The earnings per ordinary share has been calculated on profit
after taxation for the year attributable to equity holders of the
parent of GBP8,838,000 (2015: GBP15,025,000) and by reference to
the 7,200,000 ordinary shares in issue throughout both years.
The Company has no share options or other diluting instruments
and accordingly there is no difference in the calculation of
diluted earnings per share.
Note 6
The Annual General Meeting will be held at 10.30 a.m. on 5th
October, 2016 at Crewe Hall, Weston Road, Crewe, Cheshire CW1
6UZ.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
July 29, 2016 02:00 ET (06:00 GMT)