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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
600 Group Plc | LSE:SIXH | London | Ordinary Share | GB0008121641 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.65 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Industrial Mach & Eq-whsl | 68.98M | 1.27M | 0.0108 | 2.45 | 3.11M |
TIDMSIXH
RNS Number : 6228I
600 Group PLC
15 December 2020
The 600 Group PLC
Unaudited Interim Results for the six months ended 30 September 2020
The 600 Group PLC ("the Group"), the diversified industrial engineering company (AIM: SIXH), today announces its unaudited interim results for the six months ended 30 September 2020.
Financial highlights
-- Revenues down 29% to $25.4m (FY20 H1: $35.7m), mainly due to significant disruption caused by the COVID-19 pandemic
-- Underlying* operating profit of $0.2m (FY20 H1: $2.5m)
-- Net debt excluding leases but including $2.2m of USA PPP funding of $16.7m (FY 20 H1: $16.9m, FY20 year end: $14.2m)
-- Operations continue to produce positive cashflows
Strategic & operational highlights
-- Quick response to challenging market conditions with businesses adapting new working practices, reducing overheads and deferring all non-critical capital expenditure
-- Debt levels stabilised as a result of significant steps taken in the prior year to de-risk the Group
-- Continued investment in synergy benefits between businesses in the USA and cross fertilisation of technology and customer contacts continues
-- Establishing operations in Germany to promote the direct sale of higher specification machines and support the distribution businesses in this important market
* from continuing operations, before adjusting items .
Paul Dupee, Executive Chairman of the Group, commented:
"The reporting period has been heavily impacted by the COVID-19 pandemic. However, the Group responded quickly to the challenges, reducing costs and keeping our core competencies together.
The de-risking of the Group, both operationally and financially, in the last year has created a platform from which we can leverage the strength of the Group's brands and grow the business into increasingly diversified niche markets worldwide both organically and by acquisition once activity levels normalise .
Whilst short-term macro-economic uncertainty remains, I am confident that we will come out of this crisis a stronger and leaner business."
Enquiries:
The 600 Group PLC Tel: 01924 415000 Paul Dupee, Executive Chairman Instinctif Partners Tel: 0207 457 2020 Mark Garraway Rosie Driscoll Spark Advisory Partners Limited (NOMAD) Tel: 020 3368 3553 Matt Davis WH Ireland (Broker) Tel: 020 7220 1666 Harry Ansell
The 600 Group Plc
Executive Chairman's Statement for the six months ended 30 September 2020
Overview
The six month period ended 30 September 2020 bore the brunt of the impact from the COVID-19 pandemic with the Group trading at a loss in May and June as all facilities were affected by local and national shutdowns and the UK factory operation closed completely for the month of May.
Revenues and orders inevitably fell, but the Board and local management teams responded quickly, adopting short time and home working and furloughing some staff with others accepting temporary salary reductions. The Group took advantage of government stimulus packages including loans under the USA Government Paycheck Protection Program (PPP) and the UK Coronavirus Large Business Interruption Scheme (CLBILS). The UK and Australian businesses also received direct assistance to help maintain employment and this is shown as other income in the Consolidated Income Statement. Overheads were reduced and all non-critical capital expenditure deferred.
Debt levels have been stabilized as a result of significant de-risking of the Group in the prior year with the receipt of the pension surplus following the successful buy out of the scheme and the sale of the loss making Gamet bearings operation and associated freehold property. Debt during the six months to September 2020 remained in line with the $14m of the March 2020 year end apart from the $2.2m of USA PPP funds, which are currently shown in debt but under the terms of the funding, are expected to be largely forgiven following claim submissions to be filed in the next month. Debt was further reduced by $1.6m following the period end, when in October the Brisbane freehold was sold as part of the restructuring of the Australian operations.
Results
Revenue was down at $25.4m (FY 20 H1: $35.7m) with net underlying operating profit (excluding adjusting items) at $0.2m (FY20 H1:$2.5m).
After taking account of interest on bank borrowings, loan notes and lease liabilities, the underlying loss for the Group pre-tax before adjusting items was $0.6m (FY20 H1: profit $1.7m) and a loss of $1.2m (FY 20 H1: profit $1.5m) after adjusting items.
The total loss for the financial period on continuing activities was $1.1m (FY 20 H1: profit $1.1m), providing Basic earnings loss of 0.93 cents (equivalent to 0.74p loss) per share (FY 20 H1: 0.92 cents (equivalent to 0.72p). The underlying continuing earnings per share (excluding adjusting items) were loss 0.36c (equivalent to
0.29p loss) (FY 20 H1: 1.31c (equivalent to 1.03p).
Whilst these results are disappointing the Group has continued to trade at a positive cash position with adjusted EBITDA, after allowing for property rentals, at $0.5m in the six months to September 2020 which compares to $2.7m in the previous half year.
Given the current trading and continuing uncertainty no dividend is proposed.
Financial position
Working capital levels reduced during the period with falls in inventory levels and receivables by $1m. Trade and other payables, which include customer deposits, reduced by $2.3m with suppliers paid down and supply lines adjusted to the reduced volumes.
All non essential capital expenditure was deferred due to the COVID-19 pandemic and only $0.18m was expended against $0.36m in the prior half year.
The three USA businesses took advantage of Government assistance under PPP legislation and in total $2.2m was received in early May to assist with maintaining employment and meeting other operating costs. These loans may be forgiven as claims to be submitted in the next month show expenditure against specified costs and continuation of employment numbers. Any amounts not forgiven become a two year loan at 1% interest. The UK machine tools business received a $1.5m loan under the Government CLBILS assistance in late August. This loan is a bullet repayment in three years time in September 2023 with interest at 1.92%.
Both Bank of America and HSBC have been very supportive during these difficult times and the annual reviews of the working capital facilities are currently in progress and are expected to be renewed in the normal course on the same terms. The Group remains covenant compliant.
Total debt, excluding leases, was $16.7m at 30 September 2020 which includes the $2.2m of PPP funding and an increase of $0.4m on the retranslation of the sterling based loan notes, compared to $16.9m at September 2019 and $14.2m at the end of March 2020.
Debt levels reduced in late October 2020 by $1.6m on receipt of the proceeds of the sale of the Brisbane freehold property as part of the restructuring of the Australian operation. The property has been shown as an asset held for sale in the statement of financial position at 30 September 2020.
Adjusting items
Adjusting Items have been noted separately to provide a clearer picture of the Group's underlying trading performance and are set out in note 3. In the current period the initial costs of the Group restructuring announced in the Annual Report in November 2020 of $0.2m and the amortisation of acquisition intangibles relating to the acquisition of CMS of $0.2 have been recorded as adjusting items in operating expenses. The amortisation of the loan note discounting and costs of $0.3m are shown as adjusting items within finance costs.
Operating activities
Machine tools and precision engineered components
Machine tool activity globally has been severely affected by the COVID-19 pandemic with overall volumes down over 31% compared to the same period last year. The UK business had seen significant improvement, before the COVID-19 pandemic struck, as a result of the restructuring of operation and re-launch as Colchester Machine Tool Solutions in the new European technology Centre in Elland. This allowed the business to continue trading satisfactorily through April 2020, but, with most customers closed as the National lockdown continued, the decision was taken to close the operation for the month of May. The business has since operated at a reduced level utilising Government assistance with some staff furloughed and others accepting temporary pay cuts or reduced working hours. Whilst order activity has seen an increase in October and November, short term macroeconomic uncertainty remains combined with potential supply disruption created by Brexit and port congestion.
An operation is being established in Germany to promote the direct sale of higher specification machines, support the distribution businesses and to reduce the impact of a no deal Brexit in this important market.
The USA business similarly suffered significant volume reductions but continued to operate on reduced staffing levels and has also seen an upturn in order activity in recent months.
The Australian business was not as significantly affected being only nearly 20% down but did operate on reduced staff levels and took advantage of Government assistance wherever possible. The restructuring of the operation continued during the period and the freehold premises in Brisbane was sold in late October with the continuing activity taking a smaller space in the existing facility on a rental basis.
The results of the division were as follows:
FY21 H1 FY20 H1 $m $m Revenues 15.55 22.62 Operating profit* 0.74 1.66 Operating margin* 4.8% 7.3%
*from continuing operations, before adjusting items.
Industrial Laser systems
The industrial laser businesses suffered from local restrictions in the USA with many customers unable to accept site visits and significant uncertainty delaying many projects. Revenues overall were down 24.5%. As a consequence of the businesses being largely technical and manufacturing orientated they were not able to be as flexible as the largely distribution machine tools operation and, therefore, operating inefficiencies were greater. The TYKMA Electrox business has seen improved order intake in recent months but the CMS operation, which relies on larger projects with longer lead times, has yet to see a sustained pick up in activity.
The Group is continuing to investigate synergy benefits between the two businesses and the cross fertilisation of technology and customer contacts continues.
FY21 H1 FY20 H1 $m $m Revenues 9.85 13.04 Operating profit* 0.24 1.82 Operating margin* 2.4% 14.0%
*from continuing operations, before adjusting items.
Summary and outlook
The reporting period has been heavily impacted by the COVID-19 pandemic. However, the Group responded quickly to the challenges, reducing costs and keeping our core competencies together.
The de-risking of the Group, both operationally and financially, in the last year has created a platform from which we can leverage the strength of the Group's brands and grow the business into increasingly diversified niche markets worldwide both organically and by acquisition once activity levels normalise.
Whilst short-term macro-economic uncertainty remains, I am confident that we will come out of this crisis a stronger and leaner business.
Paul Dupee
Executive Chairman
15 December 2020
The 600 Group Plc
Condensed consolidated income statement (unaudited)
For the 26 week period ended 30 September 2020
Before After Before After Adjusting Adjusting Adjusting Adjusting Adjusting Adjusting Items Items Items Items Items Items 26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 52 weeks ended ended ended ended ended ended ended 30 September 30 September 30 September 28 September 28 September 28 September 30 March 202 0 2 020 2 020 2019 2019 2019 2 020 $000 $000 $000 $000 $000 $000 $000 ---------------------- ------------ ------------ ------------ ------------ -------------- ------------ -------- C ontinuing Revenue 25,398 - 25,398 3 5,657 - 35,657 67,206 Cost of sales (16,405) - (16,405) ( 22,922) - (22,922) (43,491) Adjusting items in cost of sales - - - - - - (254) Gross profit 8,993 - 8,993 1 2,735 - 12,735 23,461 Net operating expenses (9,201) - (9,201) ( 10,209) - (10,209) (20,988) Adjusting Items in operating expenses - (370) (370) - (713) (713) (1,742) Other income - Government funding 380 - 380 Profit on disposal of pension scheme - - - - 809 809 809 Operating profit/(loss) 1 72 (370 ) (1 98 ) 2 ,526 96 2,622 1,540 Bank interest 6 - 6 - - - 5 Interest on pension surplus - - - - - - 22 ------------ ------------ ------------ ------------ -------------- ------------ -------- Financial income 6 - 6 - - - 27 ------------ ------------ ------------ ------------ -------------- ------------ -------- Bank and other interest ( 555) - (555) (662) - (662) (1,282) Interest on lease (382 liabilities (1 91) - (191) (2 01) - (201) ) Loan note amortisation - ( 300) ( 300) (259) ( 259) (536) ------------ ------------ ------------ ------------ -------------- ------------ -------- Financial expense ( 746) ( 300) ( 1,046) (863) (259) ( 1,122) (2,200) (Loss)/profit before (1,238 tax (568 ) (670) ) 1,663 (163) 1,500 (633) Income tax c redit/ ( charge) 140 - 140 (155) (283) (438 ) 1 ,228 ---------------------- ------------ ------------ ------------ ------------ -------------- ------------ -------- (Loss)Profit for the period on continuing activities attributable to equity holders of the parent (428) (6 70 ) (1,098) 1,508 (446) 1,062 595 (Loss) on discontinued activity - - - (73) (93) (166) (960) (Loss)/profit for the period attributable to equity holders of the parent (428) (670) (1,098) 1,435 (539) 896 (365) Basic EPS (0.36c) (0.93c) 1.31c 0.92c 0.51c Diluted EPS (0.36c) (0.93c) 1.27c 0.90c 0.50c Basic EPS after discontinued (0.36c) (0.93c) 1.24c 0.78c (0.31c) Diluted EPS after discontinued (0.36c) (0.93c) 1.21c 0.76c (0.31c) Condensed consolidated statement of comprehensive income (unaudited) For the 26 week period ended 30 September 2020 26 weeks 26 weeks 52 weeks Ended Ended Ended 30 September 28 September 28 March 2020 2019 2020 $000 $000 $000 --------------------------------------------- ------------- ------------- --------- (Loss)/profit for the period (1,098) 896 (365) Other comprehensive (expense)/income: Items that will not be reclassified to the Income Statement: Re-measurement of the net defined benefit asset 3 - (36) Property revaluation 441 - 199 Deferred taxation - - (282) --------------------------------------------- ------------- ------------- --------- Total items that will not be reclassified to the Income Statement: 444 - (119) Items that are or may in the future be reclassified to the Income Statement: Foreign exchange translation differences 41 (673) (606) --------------------------------------------- ------------- ------------- --------- Total items that are or may be reclassified subsequently to the Income Statement: 41 (673) (606) --------------------------------------------- ------------- ------------- --------- Other comprehensive (expense)/income for the period, net of income tax 485 223 (725) Total comprehensive (expense)/income for the period (613) 223 (1,090) --------------------------------------------- ------------- ------------- --------- Condensed consolidated statement of financial position (unaudited) As at 30 September 2020 As at As at As at 30 September 28 September 28 March 2020 2019 2020 $000 $000 $000 ------------------------------------ ------------- ------------- --------- Non-current assets Property, plant and equipment 2,876 4,109 4,060 Goodwill 13,174 15,112 13,174 Other Intangible assets 3,723 1,260 3,868 Deferred tax assets 4,415 4,603 4,415 Right of use assets 8,712 10,260 9,060 ------------------------------------ ------------- ------------- ---------
32,900 35,344 34,577 ------------------------------------ ------------- ------------- --------- Current assets Inventories 18,735 22,698 19,054 Trade and other receivables 7,473 10,379 8,084 Taxation 75 189 222 Deferred tax assets 1,463 - 1,148 Assets classified as held for sale 1,563 949 - Cash and cash equivalents 3,450 2,534 2,878 ------------------------------------ ------------- ------------- --------- 32,759 36,749 31,386 ------------------------------------ ------------- ------------- --------- Total assets 65,659 72,093 65,963 ------------------------------------ ------------- ------------- --------- Non-current liabilities ------------- ------------- --------- Employee benefits (1,271) (1,274) (1,261) Loans and other borrowings (15,874) (12,160) (11,654) Lease Liabilities (8,336) (8,861) (8,344) Deferred tax liability - (249) - ------------------------------------ ------------- ------------- --------- (25,481) (22,544) (21,259) ------------------------------------ ------------- ------------- --------- Current liabilities Trade and other payables (5,956) (9,059) (8,298) Deferred tax liability (195) - (236) Lease Liabilities (1,222) (1,482) (1,608) Provisions (613) (827) (590) Loans and other borrowings (4,242) (7,271) (5,414) ------------- ------------- --------- (12,228) (18,639) (16,146) ------------------------------------ ------------- ------------- --------- Total liabilities (37,709) (41,183) (37,405) ------------------------------------ ------------- ------------- --------- Net assets 27,950 30,910 28,558 ------------------------------------ ------------- ------------- --------- Shareholders' equity Called-up share capital 1,803 1,803 1,803 Share premium account 3,828 3,828 3,828 Revaluation reserve 1,789 1,149 1,348 Equity reserve 201 201 201 Translation reserve (7,089) (7,197) (7,130) Retained earnings 27,418 31,126 28,508 ------------------------------------ ------------- ------------- --------- Total equity 27,950 30,910 28,558 ------------------------------------ ------------- ------------- --------- Consolidated statement of changes in equity (unaudited) As at 30 September 2020 Ordinary Share share premium Revaluation Translation Equity Retained capital account reserve reserve reserve Earnings Total $000 $000 $000 $000 $000 $000 $000 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- At 30 March 2019 1,746 2,885 1,149 (6,524) 201 30,186 29,643 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Profit for the period - - - - - 896 896 Other comprehensive income: Foreign currency translation - - - (673) - - (673) Total comprehensive income - - - (673) - 896 223 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Transactions with owners: -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Share capital subscribed for 57 943 - - - - 1,000 Credit for share-based payments - - - - - 44 44 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Total transactions with owners 57 943 - - - 44 1,044 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- At 28 September 2019 1,803 3,828 1,149 (7,197) 201 31,126 30,910 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Loss for the period - - - - - (1,261) (1,261) Other comprehensive income: Foreign currency translation - - - 67 - - 67 Property revaluation - - 199 - - - 199 Net defined benefit movement - - - - - (36) (36) Deferred tax - - - - - (282) (282) ------------ ---------- --------------- ----------- ------- -------- ------- Total comprehensive income - - 199 67 - (1,579) (1,313) -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Transactions with owners: Dividend - - - - - (1,088) (1,088) Credit for share-based payments - - - - - 49 49 ------------ ---------- --------------- ----------- ------- -------- ------- Total transactions with owners - - - - - (1,039) (1,039) -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- At 28 March 2020 1,803 3,828 1,348 (7,130) 201 28,508 28,558 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Loss for the period - - - - - (1,098) (1,098) Other comprehensive income: Foreign currency translation - - - 41 - - 41 Property revaluation - - 441 - - - 441 Net defined benefit movement - - - - - 3 3 Total comprehensive income - - 441 41 - (1,095) (613) -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Transactions with owners: Credit for share-based payments - - - - - 5 5 ------------ ---------- --------------- ----------- ------- -------- ------- Total transactions with owners - - - - - 5 5 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- At 30 September 2020 1,803 3,828 1,789 (7,089) 201 27,418 27,950 -------------------------- ------------ ---------- --------------- ----------- ------- -------- ------- Condensed consolidated cash flow statement (unaudited) For the 26 week period ended 30 September 2020 26 weeks ended 26 weeks ended 52 weeks ended 30 September 28 September 28 March 2020 2019 2020 $000 $000 $000 ---------------------------------------------------- --------------- -------------------- ------------------- Cash flows from operating activities (Loss)/Profit for the period (1,098) 896 (365) Adjustments for: Amortisation of intangible assets 206 13 325 Depreciation 375 375 651
Depreciation of IFRS16 Right of use assets 586 610 1,254 Net financial expense/(income) 1,040 1,122 2,173 Non-cash adjusting items - 322 879 Loss on assets held for resale - - 127 Profit on disposal of pension - (809) (809) (Profit)/loss on disposal of fixed assets ( 9) 8 32 Equity share option expense 5 44 93 Income tax expense/(credit) (140) 438 (1,228) ---------------------------------------------------- --------------- -------------------- ------------------- Operating cash flow before changes in working capital and provisions 965 3,019 3,132 (Increase) /decrease in trade and other receivables 799 (577) 2,587 (Increase)/decrease in inventories 675 (3,176) 67 (Decrease)/increase in trade and other payables (2,728) 400 (973) Employee benefit contributions (9) - (78) Proceeds from Pension fund disposal - 5,213 5,213 Cash generated from/(used in) operations (298) 4,879 9,948 Interest paid (554) (451) (1,141) Lease interest (191) - (375) Income tax paid - (14) - ---------------------------------------------------- --------------- -------------------- ------------------- Net cash flows from operating activities (1,043) 4,414 8,432 ---------------------------------------------------- --------------- -------------------- ------------------- Cash flows from investing activities Interest received 6 - 5 Payment for acquisition of subsidiary, net of cash acquired - (6,062) (6,072) Proceeds from assets held for sale - - 926 Proceeds from sale of property, plant and equipment 81 - 57 Purchase of property, plant and equipment (180) (359) (649) Development expenditure capitalised (38) (1) (351) Net cash from investing activities (131) (6,422) (6,084) ---------------------------------------------------- --------------- -------------------- ------------------- Cash flows from financing activities Dividends paid - - (1,088) Proceeds from/(Net repayment of) external borrowing (1,479) 4,388 1,928 Government assistance loans 3,783 IFRS 16 Lease payments (674) (716) (1,212) Net finance lease expenditure - (30) - Net cash flows from financing activities 1,630 3,642 (372) ---------------------------------------------------- --------------- -------------------- ------------------- Net increase/(decrease) in cash and cash equivalents 456 1,634 1,976 Cash and cash equivalents at the beginning of the period 2,878 948 948 Effect of exchange rate fluctuations on cash held 116 (48) (46) ---------------------------------------------------- --------------- -------------------- ------------------- Cash and cash equivalents at the end of the period 3,450 2,534 2,878 ---------------------------------------------------- --------------- -------------------- -------------------
Notes relating to the condensed consolidated financial statements
For the 26-week period ended 30 September 2020
1. Basis of preparation and accounting policies
These interim consolidated financial statements have been prepared using accounting policies based on International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 28 March 2020 Annual Report. The financial information for the half years ended 30 September 2020 and 28 September 2019 does not constitute statutory accounts within the meaning of Section 434 (3) of the Companies Act 2006 and both periods are unaudited.
The annual financial statements of The 600 Group plc ('the Group') are prepared in accordance with IFRS as adopted by the European Union. The comparative financial information for the year ended 28 March 2020 included within this report does not constitute the full statutory Annual Report for that period. The statutory Annual Report and Financial Statements for 2020 will be filed with the Registrar of Companies following the Company's Annual General Meeting on 22 December 2020. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 28 March 2020 was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under 498(2) - (3) of the Companies Act 2006.
The Group has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2020 annual financial statements.
2. SEGMENT ANALYSIS
IFRS 8 - "Operating Segments" requires operating segments to be identified on the basis of internal reporting about components of the Group that are regularly reviewed by the chief operating decision maker to allocate resources to the segments and to assess their performance. The chief operating decision maker has been identified as the Executive Directors. The Executive Directors review the Group's internal reporting in order to assess performance and allocate resources.
The Executive Directors consider there to be two continuing operating segments being machine tools and precision engineered Components and industrial laser systems.
The Executive Directors assess the performance of the operating segments based on a measure of operating profit/(loss). This measurement basis excludes the effects of Special Items from the operating segments. Head Office and unallocated represent central functions and costs.
The following is an analysis of the Group's revenue and results by reportable segment:
Continuing -------------------------------------------------- 26 Weeks ended 30 September Machine 2020 Tools & Precision Industrial Engineered Laser Head Office Components Systems & unallocated Total Discontinued Group Total Segmental analysis of revenue $000 $000 $000 $000 $000 $000 ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Total revenue 15,551 9,847 - 25,398 - 25,398 ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Operating profit/(loss) pre adjusting items 737 238 (803) 172 - 172 Adjusting items - - (370) (370) - (370) ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Operating profit/(loss) 737 238 (1,173) (198) - (198) ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Other segmental information: Reportable segment assets 34,542 14,602 16,515 65,659 - 65,659 Reportable segment liabilities (19,802) (5,250) (12,657) (37,709) - (37,709) Intangible & Property, plant and equipment additions 76 135 - 211 - 211 Depreciation and amortisation 494 497 176 1,167 - 1,167 ------------------------------- ------------ ---------- -------------- -------- -------------- -------------
2. SEGMENT ANALYSIS (continued)
Continuing -------------------------------------------------- 26 Weeks ended 28 September Machine 2019 Tools & Precision Industrial Engineered Laser Head Office Components Systems & unallocated Total Discontinued Group Total Segmental analysis of revenue $000 $000 $000 $000 $000 $000 ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Total revenue 22,622 13,036 - 35,657 867 36,524 ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Operating profit/(loss) pre adjusting items 1,661 1,825 (960) 2,526 (73) 2,453 Adjusting items - - 96 96 (93) 3 ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Operating profit/(loss) 1,661 1,825 (864) 2,622 (166) 2,456 ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Other segmental information: Reportable segment assets 51,381 18,359 1,404 71,144 949 72,093 Reportable segment liabilities (23,969) (6,222) (10,992) (41,183) - (41,183) Intangible & Property, plant and equipment additions 204 156 - 360 - 360 Depreciation and amortisation 494 416 88 998 - 998 ------------------------------- ------------ ---------- -------------- -------- -------------- ------------- Continuing ------------------------------------------------------ Machine 52 Weeks ended 28 March tools 2020 & precision engineered Industrial Head Office components laser systems & unallocated Total Discontinued Segmental analysis of revenue $000 $000 $000 $000 $000 Group Total -------------------------------- ------------ -------------- -------------- -------- ------------ ----------- Total revenue 43,511 23,695 - 67,206 830 68,036 -------------------------------- ------------ -------------- -------------- -------- ------------ ----------- Segmental analysis of operating profit/(loss) before Adjusting Items 3,216 1,689 (2,178) 2,727 (417) 2,310 -------------------------------- ------------ -------------- -------------- -------- ------------ ----------- Adjusting Items - (254) (933) (1,187) (543) (1,730) -------------------------------- ------------ -------------- -------------- -------- ------------ ----------- Group operating profit/(loss) 3,216 1,435 (3,111) 1,540 (960) 580 -------------------------------- ------------ -------------- -------------- -------- ------------ ----------- Other segmental information: Reportable segment assets 35,073 14,164 16,726 65,963 - 65,963 Reportable segment liabilities (18,085) (6,990) (12,330) (37,405) - (37,405) Intangible & Property, plant and equipment additions 368 330 302 1,000 - 1,000 Depreciation and amortisation 901 883 446 2,230 - 2,230
3. Adjusting ITEMS
The directors have highlighted transactions which are material and unrelated to the normal trading activity of the Group.
In the opinion of the directors the disclosure of these transactions should be reported separately for a better understanding of the underlying trading performance of the Group. These underlying figures are used by the Board to monitor business performance, form the basis of bonus incentives and are used for the purposes of the bank covenants.
The items below correspond to the table below;
a) The buy-out of the Group pension scheme was completed in April 2019 and a profit of $0.8m was recorded in the prior year as the amount received was higher than the carrying value of the asset previously recognised.
b) As a result of the outsourcing of manufacturing in the UK in the prior year, the existing premises were vacated and not sub-let; as a result a right of use asset impairment charge of $0.4m was recognised in the prior year, in addition to a provision for associated unavoidable costs, including amortisation and interest under IFRS 16 totaling $0.4m.
c) A credit of $0.022m was recorded in financial income in respect of the final salary pension scheme.
d) The amortisation of the loan note costs and associated costs are shown in financial expense. These are non cash movements and relate to the discounting of the loan notes and associated costs which unwind over the term of the notes.
e) A charge was incurred as a result of the acquisition of Control Micro Systems Inc for legal and professional fees.
f) Amortisation of intangible assets, including customer relationships, acquired through the Control Micro Systems Inc deal.
g) A charge of $0.3m was expensed in cost of sales relating to US duty and tariff charges from prior year.
h) Costs in relation to the Group reorganisation.
i) In the prior year a charge was incurred which included additional costs of the closure of the Gamet business in October 2019 as well as a loss on disposal as a result of receiving less than originally anticipated.
30 September 28 September 2 8 March 2020 2019 202 0 $000 $000 $000 --------------------------------------------------- ------------ ------------ --------- Items included in c ost of sales : US Tariffs & Duty charges relating to prior years (g) - - (254) --------------------------------------------------- ------------ ------------ --------- - - (254) --------------------------------------------------- ------------ ------------ --------- Items included in operating profit: Unavoidable lease costs (b) - - (3 78) Right of use impairment (b) - - (3 92) Restructuring costs (h) (195) - - Acquisition costs (e) - (384) (684) Amortisation of acquisition intangibles (f) (175) (322) (288) Pensions legal costs (a) - (7) - Profit on disposal of pension scheme (a) - 809 809 (370 ) ( 713) ( 933) --------------------------------------------------- ------------ ------------ --------- Items included in financial income/(expense): Pensions interest on surplus (c) - - 2 2 Financial income - - 22 --------------------------------------------------- ------------ ------------ --------- Amortisation of loan notes and associated expenses (d) (300) (259) (536) Total adjusting items before tax (670) (163) (1,701) --------------------------------------------------- ------------ ------------ --------- Income tax on adjusting items - (283) - Total adjusting items after tax (670) (446) (1,701) Loss on discontinued activity (i) - (93) (543) --------------------------------------------------- ------------ ------------ ---------
4. Financial income and expensE
3 0 September 28 September 28 March 202 0 2019 2020 $000 $000 $000 Bank and other interest 6 - 5 Interest on Pension surplus - - 22 ---------------------------------- ------------- ------------ -------- Financial income 6 - 27 ---------------------------------- ------------- ------------ -------- Bank overdraft and loan interest (9 2) ( 206) ( 315) Loan note interest (463 ) (451 ) (918 ) Finance charges on finance leases - (5) (12 ) Pensions interest on deficit - - ( 44) IFRS 16 - Lease interest (191) (201) (375) Amortisation of loan note costs (300 ) (259 ) (536) Financial expense ( 1,046) ( 1,122) (2,200 ) ---------------------------------- ------------- ------------ --------
5. Taxation
3 0 September 28 September 2 8 March 202 0 2019 202 0 9 $000 $000 $000 ----------------------------------------- ------------- ------------ --------- Current tax: Corporation tax at 19% (2019: 19%): - - - Overseas taxation: - current period - ( 155) 151 ----------------------------------------- ------------- ------------ --------- Total current tax charge - ( 155) 151 ----------------------------------------- ------------- ------------ --------- Deferred taxation: - current period 140 ( 283) 891 - effect of rate change in UK - - 143 - prior period - - 43 ----------------------------------------- ------------- ------------ --------- Total deferred taxation charge 1 40 ( 283) 1,077 ----------------------------------------- ------------- ------------ --------- Taxation charged to the income statement 140 ( 438) 1,228 ----------------------------------------- ------------- ------------ ---------
6. Earnings per share
The calculation of the basic earnings per share loss of 0.93c (2019:profit 0.92c) is based on the earnings for the financial period attributable to the Parent Company's shareholders of a loss of $1,098,000 (2019 Profit $1,062,000) and on the weighted average number of shares in issue during the period of 117,473,341 (2019 115,421,143). At 30 September 2020, there were 7,780,000 (2019: 7,500,000) potentially dilutive shares on option and 43,950,000 (2019: 43,950,000) share warrants exercisable at 20p. The weighted average effect of these as at 30 September 2020 was 1,630,000 shares (2019: 2,969,376) giving a diluted earnings per share loss of 0.93c (2019: 0.90c).
30 September 2 8 September 28 M arch 2020 2019 2020 ---------------------------------------- ------------ ------------- ----------- Weighted average number of shares Shares Shares Shares 117,47 3 ,3 Issued shares at start of period 41 112,973,341 112,973,341 Effect of shares issued in the period (4,500,000 on 21 June 2019) - 2 ,447,802 3 ,476,712 ---------------------------------------- ------------ ------------- ----------- Weighted average number of shares at end of period 117,473,341 1 15,421,143 116,450,053 ---------------------------------------- ------------ ------------- ----------- Weighted average number of 7,780,000 (2019: 7,500,000) potentially dilutive shares 1,630,000 2 ,969,376 2,877,486 ---------------------------------------- ------------ ------------- ----------- Total Weighted average diluted shares 119,103,341 1 18,390,519 119,327,539 ---------------------------------------- ------------ ------------- ----------- 3 0 September 28 September 28 March 2020 202 0 2019 $000 $000 $000 Total post tax earnings - continuing operations (1,098) 1,062 59 5 Total post tax earnings including discontinued operations (1,098) 896 (36 5 ) ----------------------------------------------- ------------- ------------ ------------- Basic EPS (0.93c) 0.92c 0.51c Diluted EPS (0.93c) 0.90c 0.5 0 c ----------------------------------------------- ------------- ------------ ------------- Total including discontinued operations Basic EPS (0.93c) 0.78c (0.31c) Diluted EPS (0.93c) 0.76c (0.31c) ----------------------------------------------- ------------- ------------ ------------- Underlying earnings $000 $000 $000 ----------------------------------------------- ------------- ------------ ------------- Total post tax earnings - continuing operations (1,098) 1,062 59 5 Adjusting items - per note 3 (670) (446) 1,701 Underlying earnings after tax (428) 1,508 2,29 6 ----------------------------------------------- ------------- ------------ ------------- Underlying basic EPS (0.36c) 1.24c 1.97c Underlying diluted EPS (0.36c) 1.21c 1.92c
7. RECONCILIATION OF NET CASH FLOW TO NET DEBT
3 0 September 28 September 28 March 2020 2019 2020 $000 $000 $000 ------------------------------------------------- ------------- ------------ -------- Increase/(decrease) in cash and cash equivalents 4 56 1,634 (952) (4,358 (decrease)/Increase in debt and finance leases 2 ,345 ) (341) ------------------------------------------------- ------------- ------------ -------- (decrease)/Increase in net debt from cash flows 2,801 ( 2,724) (1,293) Net debt at beginning of period (24,142) (14,541) (14,541) Effect of IFRS 16 leasing (221) - (9,755) Cash and debt through acquisition - - 1,451 Government assistance loans ( 3,783) - - Loan costs amortisation and adjustments (305) (177) (421) Exchange effects on net funds (574) 545 491 ------------------------------------------------- ------------- ------------ -------- Net debt at end of period (26,224) (16,897) (24,142) ------------------------------------------------- ------------- ------------ --------
8. Analysis of net DEBT
At Exchange/ At 2 8 March Reserve 30 September 2020 movement Other Cash flows 2020 $000 $000 $000 $000 $000 ---------------------------------- --------- --------- ------- ---------- ------------ Cash at bank and in hand 2,755 110 - 456 3,321 Short term deposits (included within cash and cash equivalents on the balance sheet) 123 6 - - 129 2,878 116 - 456 3,450 Debt due within one year (5,414) - - 1,172 (4,242) Debt due after one year (2,217) - - 307 (1,910) Loan Notes due after one year (9,437) (439) (305) - (10,181) Lease liabilities (9,952) (251) (221) 866 (9,558) Government assistance loans - - (3,783) - (3,783) Total (24,142) (574) (4,309) 2,801 (26,224) ---------------------------------- --------- --------- ------- ---------- ------------
9. FAIR VALUE
The group considers that the carrying amount of the following financial assets and financial liabilities are
a reasonable approximation of their fair value:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Loans and other borrowings
10. Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Group remain those set out in the 2020 Annual Report. Those which are most likely to impact the performance of the Group in the remaining period of the current financial year are the continuing issues surrounding the COVID-19 pandemic and Brexit which may result in exposure to increased input costs, supply chain and delivery issues and a downturn in its customers' end markets, particularly in North America and Europe.
11. Post balance sheet events
T he freehold property in Brisbane, Australia, which had been transferred to assets held for sale at the end of the period was subsequently sold for $1.6m on 24 October 2020.
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IR EANALFEPEFFA
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December 15, 2020 02:00 ET (07:00 GMT)
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