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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Autins Group Plc | LSE:AUTG | London | Ordinary Share | GB00BD37ZH08 | ORD GBP0.02 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 11.00 | 10.00 | 12.00 | 11.00 | 11.00 | 11.00 | 148 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Motor Vehicle Part,accessory | 22.68M | -913k | -0.0167 | -6.59 | 6.01M |
From Apr 2019 to Apr 2024
TIDMAUTG
RNS Number : 2893R
Autins Group PLC
29 June 2020
29 June 2020
Autins Group plc
(the "Company" or the "Group")
Interim Results
Autins Group plc (AIM: AUTG), UK based manufacturer of the patented Neptune melt-blown material and specialist in the design, manufacture and supply of acoustic, filtration (PPE) and thermal insulation solutions, announces its results for the six months ended 31 March 2020.
Financial Summary
-- Revenue decreased by 3.2% to GBP13.22 m (H1 19: GBP13.66m) -- Gross profit increased by 6.1% to GBP3.84m (H1 19: GBP3.62m) -- Gross margins up to 29.0% (H1 19: 26.5%) -- EBITDA profit of GBP0.71m, incorporating IFRS16 adjustments -- Adjusted EBITDA(1) of GBP0.27m (H1 19: EBITDA loss of GBP0.16m) -- Adjusted Loss Before Tax(1,2) of GBP0.29m (H1 19: loss of GBP0.55m) -- Loss After Tax of GBP0.64m (H1 19: loss of GBP0.98m) -- Loss per Share of 1.62p (H1 19: loss of 4.42p) -- Adjusted net debt(3) of GBP2.34m (H1 19: GBP4.66m)
1: Adjusted EBITDA is stated on a consistent basis to H1 19.The H1 20 measure is therefore stated before IFRS 16 lease liability adjustments as well as adding back GBP0.16m of non recurring costs in respect of the change in CFO (H1 19 GBP0.31m related to restructuring of overhead costs and bank facilities).
2: Adjusted LBT further excludes GBP0.12m (H1 19: GBP0.12m) amortisation of intangible costs
3. Net debt is cash less bank overdrafts, invoice discounting, hire purchase finance and right of use lease liabilities. Adjusted net debt excludes the IFRS 16 lease liabilities, consistent with H1 19.
Operational Highlights
First Half
-- Autins was awarded nine new automotive contracts during H1, with an annualised value of GBP2.7m (of which GBP1.0m is expected to benefit FY20)
-- 69% of the contracts are in the UK, including our first win on the Mini platform, and 31% in Germany, including a first win on an Audi platform for the electric Etron
-- Operational cost and efficiency improvement targets of GBP2m p.a. were 85% achieved as at 31 March 2020
-- Strong operational recovery to profit (pre-exceptional costs) in Q2 2020 -- The Company appointed Kamran Munir as CFO on 1(st) January 2020
-- The Company secured GBP1.5m of long term Midlands Engine Investment Fund ("MEIF") funding to support growth and working capital
Post Period End
-- There has been a significant fall off in demand for automotive products during the first few months of H2 and we do not expect this to return to pre-COVID levels in the current financial year
-- As a result of COVID-19 and the subsequent closure of all OEM facilities in Europe, Autins closed its plants in all three countries on 22(nd) March 2020
-- The Company has utilised the furlough schemes (in UK, Germany and Sweden) to protect cash and retain skilled labour. Initially the majority of staff were furloughed. Recently, since automotive deliveries re-started and PPE orders have been won over the last few weeks, approximately 50% of the workforce have been re-engaged
-- The Company submitted an application for a GBP2.75m CBILS loan funding through its bankers, HSBC. A term sheet to secure this has been agreed by all respective parties, and preparation of formal legal documentation has commenced
-- During April, Autins launched a range of safety face masks in UK using the patented lightweight micro-fibre Neptune technology as the filtration layer and is seeking certification to the respirator BS EN149 FPP2 type for medical applications
-- Autins has received an initial order to supply 2 million foam parts for face visors and is looking to extend this demand
-- Since the reporting date a range of PPE products and solutions have been developed and sales in the last 2 months have reached GBP0.4m.
Gareth Kaminski-Cook, Chief Executive, said:
"Like many businesses we have not been able to operate as normal since the arrival of COVID-19. This has been a very tough few months which has seen a temporary but significant fall in automotive demand, necessitating the short term closure of our sites in UK, Germany and Sweden. We would like to thank all of our staff, both those furloughed and the few who remained at work, for having been highly cooperative and supportive during this period.
"An important focus was to secure funding for the Group. Through CBILS and other government schemes, I am delighted with the progress we have made.
"Whilst it is good to see our core automotive market is now beginning to return, we took the opportunity during this period to adapt and best play our part to make a difference in the fight against Covid-19, whilst protecting the Company, our employees and our shareholders.
"We are proud to have successfully applied our material, design and manufacturing skills to deliver much needed safety products based on Neptune, to Britain's key workers, the general public and people returning to their places of work.
We see a bright future where our unique patented Neptune technology underpins three strategies for growth, in automotive NVH, PPE markets of Europe and as a fundamental melt-blown material that has filtration capabilities, in addition to acoustic and thermal performance."
For further information please contact:
Autins Group plc Gareth Kaminski-Cook, Chief Executive Via Newgate Kamran Munir, CFO N+1 Singer Advisory LLP Tel: 020 7496 3000 (Nominated Adviser and Broker) Mark Taylor / Carlo Spingardi Newgate Communications Tel: 020 7653 9850 (Financial PR) Adam Lloyd Tom Carnegie
About Autins
Autins is a UK based manufacturer of the patented Neptune melt-blown material and specialises in the design, manufacture, and supply of acoustic, filtration and thermal products. Its key markets are automotive, flooring, office furniture, PPE and face mask products.
As previously announced, Autins took the decision in March to close the majority of its manufacturing plants and furlough a significant proportion of its staff as a result of plant shutdowns across the European automotive sector. Prior to the onset of the Covid-19 pandemic, the Board was pleased with the progress made by the Group, with the operating performance in the first five months of the financial year being ahead of management expectations and much improved compared to the same period last year. This has been driven by significant improvements in operational efficiencies and better overhead cost control. All three operating countries have been EBITDA positive and the Company continued to win significant new business.
Board changes and employees
The Group was pleased to announce the appointment of Kamran Munir as Chief Financial Officer in December 2019. Kamran took up his position in January 2020 and is a highly experienced strategic and operational CFO, with a background of large corporate and VC roles. He has already had a significant impact in improving the operational and financial performance of Autins.
Autins has adopted a Covid-19 safe working practices policy, with appropriate home working, social distancing measures and sanitising hygiene management measures. Employees have remained loyal, dedicated and flexible in support of the Company. We utilise a dedicated smart phone application to send instant messages and news to our workforce.
Operational and Financial Review
In the period, the Board and executive management set targets and actions to reduce the Group's operating cost structure by GBP2.0m per annum. As at 31st March 2020, 85% of the cost saving measures had been successfully implemented. Accordingly, within the H1 results, there is a significant Q2 vs Q1 performance improvement, which provides a stronger base for the future.
H1 gross margins improved by 3.8% between Q120 and Q220 to GBP2.1m and 30.9% (Q120: GBP1.7m, 27.1%). EBITDA in Q220 increased to GBP620k (Q120: GBP93k) showing a significant improvement of GBP521k compared to Q1. This was driven predominantly from lean manufacturing control methods, productivity increases and value engineering initiatives. Restructuring actions also reduced fixed headcount, associated overheads and some rents. None of these actions impacted growth potential.
In total H120 showed a solid improvement compared to H119 with gross margins up 2.5%, gross profit up GBP0.2m and adjusted EBITDA higher by GBP0.43m.
A key objective of the Group's on-going operational improvement programme is to increase the flexibility of the business so that its cost base can be adjusted quickly when faced with volatile demand and customer shutdowns. Further cost savings, against a Covid19 macro-economic backdrop, are expected.
Revenue
With continued reductions in UK and European car sales, revenue decreased 3.2% year on year to GBP13.22m (H119: GBP13.66m).
Component revenue at GBP12.14m was 14% lower year on year, but 1.3% higher than H219. Tooling revenue was higher at GBP1.08m (H119: GBP0.23m) driven by a ramp up in the number of projects approaching the start of production.
The key driver for reduced component revenue was the UK market, which decreased by 11.8% to GBP9.57m (H1 19: GBP10.85m). Swedish component manufacturing sales increased by 15% to GBP0.45m (H119: GBP0.39m) whilst German component revenues fell by 2% to GBP2.12 m (H119: GBP2.17m).
Direct sales to the Group's largest customer accounted for 56% of Group component revenue (H1 19: 57%, FY19: 55%). Concentration with this customer is expected to reduce with the increasing uptake of Neptune amongst other European OEMs and Tier One customers. Diversification of the business base away from automotive will continue with flooring sales from our German business accelerating in H2 of 2020, and with the benefit of additional sales following the introduction of new products and parts for the PPE market.
Gross margin
The Group's component gross margin increased to 29.0% (H119: 26.5%). Progress has been made on material buying and usage, supply chain costs, manufacturing efficiency and labour productivity , which have all contributed to improving the margin. Increased utilisation of the Neptune line is also having a positive impact, with increased dilution of fixed labour and operational costs associated with that manufacturing facility.
EBITDA and operating profit
The reported EBITDA of GBP0.71m (H119: EBITDA loss of GBP0.47m) and reported operating loss of GBP0.38m (H119: Loss of GBP1.00m) are stated after charging exceptional costs of GBP0.16m (H119: GBP0.31m) as detailed below. Reported EBITDA on a consistent basis excluding the impact of IFRS 16 would have been GBP0.11m for H120.
The reported operating loss is also stated after recognising GBP0.12m (H119: GBP0.12m) relating to amortisation arising on intangibles which were created at the Group's IPO.
The transition to IFRS 16 at 1 October 2019 has resulted in GBP0.36m of depreciation and GBP0.15m of financing charges being recorded in respect of right of use leased assets for H120, instead of rental charges of GBP0.47m, which would have been recorded under IAS17. Under the modified transition method adopted, there is no adjustment made to the prior year and a GBP0.51m charge has been taken straight to reserves at the transition date.
Exceptional items
The Group incurred GBP0.16m of costs in the period in respect of the change of Chief Financial Officer including recruitment fees and compensation payments. In H119, the Group incurred exceptional restructuring costs of GBP0.31m in relation to a cost out programme.
The Company acquired 100 per cent of the issued share capital of Acoustic Insulations Limited on 29th April 2014 as part of an overall refinancing package to fund strategic investments and additional working capital to support the growth of the Group. This acquisition recognised GBP1.90m of intangible assets which creates an annual amortisation charge of GBP0.24m.
Joint venture
The Group's share of joint venture activities relates solely to Indica Automotive, a UK based foam conversion business.
Turnover at Indica Automotive decreased 5.2% year on year to GBP1.46m (H119: GBP1.54m) with a profit after tax of GBP0.14m (H119: GBP0.24m). The Group remains the largest customer of the joint venture, and the ratio of sales to the Group as a percentage of total sales has not changed significantly from H119.
Net finance expense
Net finance expense for the period increased to GBP0.26m (H119: GBP0.09m), which included a GBP0.15m impact from the implementation of IFRS 16. The interest element of hire purchase agreements was similar at GBP0.02m (H119: GBP0.03m) with interest paid on bank borrowings of GBP0.09m (H119: GBP0.06m).
A new Midlands Engine Investment Fund ("MEIF") term loan facility of GBP1.5m was agreed during the period and incurred issue costs of GBP0.04m.
Taxation
Given the Group's current trading loss and the prevailing economic conditions, utilisation of trading losses previously recognised in deferred tax is considered less likely in the short term and has resulted in a reduced recognition of these in deferred tax at the period end.
We would expect the effective rate for full year profits otherwise to be significantly lower than the headline rates due to enhanced R&D claims and the utilisation of brought forward losses in all territories.
The Group continues to have taxable losses available within its UK and overseas subsidiaries which are expected to offset trading profits in both the UK and the higher corporation tax territories of Sweden and Germany in the medium term.
Dividends
The Board continues to believe that during the current period of economic uncertainty a suspension in dividend payments remains appropriate. As such, no interim dividend is proposed.
Net debt and financing
The Company secured a GBP1.5m five year term loan from the MEIF fund. This adds more certainty to the funding position and short term facilities were able to be reduced.
The Group ended the period with net debt (being the net of cash and cash equivalents and the Group's loans and borrowings) of GBP8.02m including GBP5.68m arising from IFRS 16. Adjusted net debt was GBP2.34m (H119: GBP4.66m; FY19: GBP2.31m). Net debt has remained consistent since the placing of shares in August 2019. Cash and cash equivalents were GBP2.0m (H119: GBP0.35m; FY19: GBP3.1m).
At 31 March 2020, the Group's HSBC facilities provided up to GBP6.0m (H119: GBP6.0m) of invoice discounting facility (subject to available accounts receivable balances) and GBP0.5m (H119: GBP0.5m) of asset finance facilities. At the end of the period, GBP2.33m of the invoice discounting facility was utilised (H119: GBP3.67m; FY19: GBP3.71m) with GBP0.4m used from the asset finance facility (H119: GBP0.4m, FY19: GBP0.5m), Overdrafts had been fully repaid to a balance GBPNil (H119: GBP1.25m, FY19: GBP1.25m).
Capital expenditure
The Group invested GBP0.1m (H119: GBP0.1m) in its facilities during the period and has no further significant new capital expenditure planned for the balance of the year.
Government support and cost conservation measures
Since the period end, Government loan support has been sought in all three countries, where the Group operates. EUR300k has been received in Germany and a facility of up to GBP50k (GBP equivalent) is being pursued in Sweden.
In the UK the Group is in receipt of a term sheet from its primary lender, offering a CBILS loan facility of GBP2.75m. This is now agreed with all parties and preparation of formal legal documentation has been commenced by the bank. The Company is able to draw up to GBP1m for 30 days, during the period in which the agreements are finalised with all parties.
Combined finance facilities from HSBC in the UK amount to GBP3.05m, as GBP300k of additional trade finance facilities are confirmed within the HSBC term sheet, subject to CBILS documentation completion.
The Group has utilised a number of Government support schemes during the pandemic, as a result of the majority of staff being placed on furlough, or equivalent overseas scheme. In Germany, this has been available to cover up to 100% of employee costs, in Sweden and UK this is up to 80%, subject to capped limits.
Furlough and overseas equivalent receipts for the Group in April and May have been in excess of GBP0.5m and the Group expects to recover in the region of a further GBP0.5m for the June to October period, as workers progressively return and furlough proportions reduce in line with Government guidance.
Cash conservation actions have also been taken with extended credit agreed with most trade creditors and buildings' landlords. Extended government payment schemes for payroll and VAT continue to be utilised. In addition, the Board has taken a 20% pay decrease since March 20, and this is expected to continue until the end of the financial year.
Going Concern
In approving these Interim Financial Statements, the Board have reviewed the current trading and cash flow forecasts and assessed available sources of finance.
Since the emergence of the Covid-19 crisis additional cashflow modelling of potential downside scenarios has been implemented to provide early assessments of liquidity risk. As a result of a strong focus on cash collections and prudent cost containment measures, the Group has seen its cash balances remain stable and headroom has slightly increased since the half year reporting date. Forward looking cash flow projections modelling the impact of an extended downturn, together with the other principal risks identified by the Group, have been prepared. These show that the Group, with the benefit of CBILS funding as described above, which includes GBP1m of liquidity headroom, could withstand a plausible downside trading scenario with reasonable sensitivities having been considered. Accordingly, these financial statements have been prepared on a going concern basis with the expectation that the CBILS legal process will complete within the coming weeks, substantively as per the agreed term sheet.
Outlook
Since the period end, the impact of Covid-19 has been significant and our manufacturing facilities have been largely shut down due to plant shutdowns across the European automotive sector. Recovery in UK and Sweden has slowly commenced in the last few weeks, although demand is weak, whilst the German automotive market recovery is looking stronger. Autins' UK and Sweden manufacturing output is currently operating at 30% and Germany at approximately 60% of pre-Covid-19 volumes. This reflects the different timing of the easing of lockdown restrictions in the different countries. The Board expects continued volume recovery in the coming months but does not anticipate that pre Covid-19 volumes will return during the current financial year. This will result in a significant reduction in revenues and a negative impact on the Group's financial performance in FY20.
During the pandemic, Autins has leveraged its material and manufacturing capabilities to design, develop and launch a range of face masks and filters based on our unique patented Neptune melt-blown technology. Medical (Type IIR) and PPE (FFP2) certification approvals (EN14683 and EN149) are currently being pursued to enable the Group to supply accredited masks, melt-blown Neptune filtration material and parts for products such as visors. Autins is one of only two UK based manufacturers of melt-blown non-woven material, providing a strategic advantage within the UK's "on-shore" PPE supply chain.
Autins is currently selling its PPE equipment into non-medical sectors, including businesses, keen to make the return to work safe for employees and the general public, via on-line and direct sales channels.
Whilst the Board continues to review possible scenarios and determine the actions it may take as the outlook becomes clearer, market forecasts remain withdrawn.
Autins will continue to pursue new contract wins within our traditional automotive market and also seek to develop the growth strategy for its flooring/building and PPE products. Additionally the Group will look to consolidate and build upon the margin improvements made thus far and identify further cost improvement actions.
Interim Consolidated Income Statement
Hot Features
Premium
Unaudited Unaudited Audited
Period Period Year Ended
1/10/19-31/3/20 1/10/18-31/3/19 30/09/19
Notes GBP'000 GBP'000 GBP'000
Revenue 2 13,215 13,657 26,860
Cost of sales (9,379) (10,041) (19,403)
Gross profit 3,836 3,616 7,457
Distribution and administrative
expenses excluding exceptional
costs and amortisation (3,936) (4,191) (8,342)
Amortisation of acquired
intangible assets 4 (119) (118) (237)
Other exceptional operating
costs 4 (160) (312) (433)
Total distribution and administrative
expenses (4,215) (4,621) (9,012)
Operating loss (379) (1,005) (1,555)
Finance expense (259) (90) (192)
Share of post-tax profit
of equity accounted
joint ventures 71 119 203
Loss before tax (567) (976) (1,544)
Tax (expense)/credit (73) - 45
Loss after tax for the period (640) (976) (1,499)
Earnings per share for loss
attributable to the owners
of the Parent during the
year
Basic (pence) 3 (1.62)p (4.42)p (6.25)p
================ ================ =============
Diluted (pence) 3 (1.62)p (4.42)p (6.25)p
================ ================ =============
Interim Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
Period Period Year Ended
1/10/19-31/3/20 1/10/18-31/3/19 30/09/19
GBP'000 GBP'000 GBP'000
Loss after tax for the period (640) (976) (1,499)
Other comprehensive (expenses)/income:
Items that may be reclassified
subsequently to
profit and loss:
Currency translation differences (11) 44 (15)
Other comprehensive (expense)/income
for the period (11) 44 (15)
Total comprehensive expense
for the period (651) (932) (1,514)
Interim Consolidated Statement of Financial Position
Unaudited Unaudited Audited
As at 31/3/20 As at 31/3/19 As at 30/9/19
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 10,353 10,935 10,727
Right-of-use assets 5,056 - -
Intangible assets 3,380 3,677 3,493
Investments in equity-accounted
joint ventures 193 224 217
Deferred tax asset 51 371 223
Total non-current assets 19,033 15,207 14,660
Current assets
Inventories 1,982 2,167 1,961
Trade and other receivables 5,548 7,262 6,729
Cash in hand and at bank 2,003 511 3,132
Total current assets 9,533 9,940 11,822
Total assets 28,566 25,147 26,482
Current liabilities
Trade and other payables 3,436 6,083 4,635
Loans and borrowings 2,651 4,762 5,143
Lease liabilities 696 - -
Total current liabilities 6,783 10,845 9,778
Non-current liabilities
Trade and other payables 113 124 115
Loans and borrowings 1,696 409 301
Lease liabilities 4,980 - -
Deferred tax liability 86 379 185
Total non-current liabilities 6,875 912 601
Total liabilities 13,658 11,757 10,379
Net assets 14,908 13,390 16,103
Equity attributable to equity
holders of the
Company
Share capital 792 442 792
Share premium account 15,866 12,938 15,883
Other reserves 1,886 1,886 1,886
Currency differences reserve (156) (86) (145)
Profit and loss account (3,480) (1,790) (2,313)
Total equity 14,908 13,390 16,103
Interim Consolidated Statement of Changes in Equity
Currency
Share premium differences Profit and Total
Share capital account Other reserves reserve loss account equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2019 as previously
stated 792 15,883 1,886 (145) (2,313) 16,103
Effect of adoption of IFRS
16 (note 1) - - - - (512) (512)
At 1 October 2019 as restated 792 15,883 1,886 (145) (2,825) 15,591
Comprehensive expense for
the period
Loss for the period - - - - (640) (640)
Other comprehensive expense - - - (11) - (11)
Total comprehensive expense
for the period - - - (11) (640) (651)
Contributions by and
distributions
to
owners
Share issue expenses (re August
2019 placing) - (17) - - - (17)
Share based payment - - - - (15) (15)
Total contributions by and
distributions to
owners - (17) - - (15) (32)
At 31 March 2020 792 15,866 1,886 (156) (3,480) 14,908
Share premium Currency Profit and Total
Share capital account Other reserves differences loss account equity
GBP'000 GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000
At 1 October 2018 442 12,938 1,886 (130) (824) 14,312
Comprehensive expense for
the period
Loss for the period - - - - (976) (976)
Other comprehensive income - - - 44 - 44
Total comprehensive expense
for the period - - - 44 (976) (932)
Contributions by and
distributions
to
owners
Share based payment - - - - 10 10
Total contributions by and
distributions to
owners - - - - 10 10
At 31 March 2019 442 12,938 1,886 (86) (1,790) 13,390
Share premium Currency Profit and Total
Share capital account Other reserves differences loss account equity
GBP'000 GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000
At 1 October 2018 442 12,938 1,886 (130) (824) 14,312
Comprehensive expense for
the year
Loss for the year - - - - (1,499) (1,499)
Other comprehensive expense - - - (15) - (15)
Total comprehensive expense
for the year - - - (15) (1,499) (1,514)
Contributions by and
distributions
to
owners
Shares issued 350 3,150 - - - 3,500
Share issue expenses - (205) - - - (205)
Share based payment - - - - 10 10
Total contributions by and
distributions to
owners 350 2,945 - - 10 3,305
At 30 September 2019 792 15,883 1,886 (145) (2,313) 16,103
Interim Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
Period Period Year ended
1/10/19-31/3/20 1/10/18-31/3/19 30/09/19
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss after tax (640) (976) (1,499)
Adjustments for:
Income tax 73 - (45)
Finance expense 259 90 192
Employee share-based payment
(credit)/charge (15) 10 10
Depreciation of property, plant
and equipment 796 396 800
Amortisation and impairment
of intangible assets 158 140 352
Share of post-tax profit of
equity accounted
joint ventures (71) (119) (203)
560 (459) (393)
Decrease/(increase) in trade
and other receivables 1,091 (316) 249
(Increase)/decrease in inventories (21) 133 361
(Decrease)/increase in trade
and other payables (1,012) 313 (1,229)
Cash from/(used in) operations 618 (329) (1,012)
Income taxes received - 7 15
Net cash flows from/(used in)
operating activities 618 (322) (997)
Investing activities
Purchase of property, plant
and equipment (85) (88) (232)
Purchase of intangible assets (60) (50) (152)
Dividend received from equity
accounted
joint venture 95 100 190
Net cash used in investing activities (50) (38) (194)
Financing activities
Interest paid (258) (90) (192)
Issue of shares - - 3,500
Share issue expenses paid (17) - (205)
Proceeds from loans and borrowings 1,500 1,196 863
Loan issue expenses paid (41) - -
Repayment of loans and borrowings (1,697) (336) (583)
Payment of lease liabilities (323) - -
Net cash (used in)/from financing
activities (836) 770 3,383
Net increase/(decrease) in cash
and cash equivalents (268) 410 2,192
Cash and cash equivalents at
beginning
of period 2,125 (67) (67)
Exchange gains on cash and cash
equivalents - 7 -
Cash and cash equivalents at
end of period 1,857 350 2,125
Cash and cash equivalents comprise:
Cash balances 2,003 511 3,132
Bank overdrafts (146) (161) (1,007)
1,857 350 2,125
Notes to the Interim Consolidated Financial Information
1. Accounting policies
Description of business
Autins Group is a public limited company domiciled in the United Kingdom and listed on the Alternative Investment Market of the London Stock Exchange ('AIM'). The principal activity of the Group is the supply of Noise Vibration and Harshness ('NVH') insulating materials primarily to the automotive industry. The address of the registered office is Central Point One, Central Park Drive, Rugby, Warwickshire, CV23 0WE.
Basis of preparation
In preparing these interim financial statements, the Board have considered and applied the impact of new standards which will become applicable for the FY20 Annual Report and Accounts which deal with the year ending 30 September 2020.
With the exception of the adoption of IFRS 16 Leases, which is effective for accounting periods starting on or after 1 January 2019, there are not expected to be any changes in the Group's accounting policies compared to those applied at 30 September 2019.
A full description of those accounting policies are contained within our FY19 Annual Report and Accounts which are available on our website .
This interim announcement has been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards issued by the International Accounting Standards Board, as adopted by the European Union as effective for periods beginning on or after 1 October 2019.
New accounting standards applicable to the period
The Group has adopted the following new standard (effective 1 October 2019) in these interim financial statements:
IFRS 16 Leases (effective 1 January 2019). IFRS 16 is effective for accounting periods beginning on or after 1 January 2019 and impacts the group results for the year ending 30 September 2020. It sets out the principles for the recognition, measurement, presentation and disclosure of leases and replaces IAS 17 Leases and IFRIC 4 Determining whether an arrangement contains a lease. Instead of recognising an operating expense from operating lease payments, the Group instead recognises and presents right of use assets and lease liabilities in its statement of financial position measured by discounting lease payments for qualifying contracts at an incremental interest rate. Interest is charged on its discounted lease liabilities and depreciation on its right-of-use assets, impacting profit/(loss) from operations and the finance expense.
On transition to IFRS 16 at 1 October 2019, the Group has adopted the modified retrospective approach applying certain practical expedients, excluding leases with a duration of less than one year. The net present value of the future lease payments at this date is recognised as an opening transition liability of GBP6.00m and right-of-use assets were recorded as a GBP5.49m adjustment to assets, measured primarily by reference to the net present value at lease inception depreciated to the date of transition, together giving rise to a GBP0.51m charge taken directly to retained earnings reflecting the difference between the finance charges arising in the initial years of the lease terms prior to the transition date determined using an effective interest rate and the straight line depreciation of the assets. Prepaid rent and lease incentive accruals previously recognised are removed and incorporated in the calculation of the IFRS 16 balances. Depreciation of GBP364,000 has been charged in respect of the assets for the period and finance charges of GBP147,000 incurred compared with GBP470,000 of operating lease rentals that would have been charged under the previous basis, an increase of GBP41,000 in the total charges included in the income statement (see tables in note 6 for the full impact on the financial statements). The comparatives for the year ended 30 September 2019 have not been adjusted and are presented in accordance with IAS17.
New accounting standards applicable to future periods
There are no new standards, interpretations and amendments which are not yet effective in these financial statements, expected to have a material effect on the Group's future financial statements.
The financial information does not contain all of the information that is required to be disclosed in a full set of IFRS financial statements. The financial information for the six months ended 31 March 2020 and 31 March 2019 is unreviewed and unaudited and does not constitute the Group's statutory financial statements for those periods within the meaning of the Companies Act 2006.
The comparative financial information for the full year ended 30 September 2019 has, however, been derived from the audited statutory financial statements for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying its report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.
The board have considered appropriate cash flow projections, modelling the impact of an extended downturn, together with the other principal risks identified by the Group, have been prepared. These show that the Group, with the benefit of CBILs funding as described above, which includes GBP1m of permanent liquidity headroom, could withstand a plausible downside trading scenario with reasonable sensitivities having been considered. Accordingly, these financial statements have been prepared on a going concern basis with the expectation that the CBILs process will complete within the coming weeks, substantively as per the agreed term sheet.
The financial information in the Interim Report is presented in Sterling, the Group's presentational currency.
Basis of consolidation
The consolidated financial statements present the results of the company and its subsidiaries (the "Group") as if they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.
The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date.
Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the management team including the Chief Executive, Chief Financial Officer and Chairman.
The Board considers that the Group's activity constitutes one primary operating and one separable reporting segment as defined under IFRS 8. Management consider the reportable segment to be Automotive NVH. Revenue and profit before tax primarily arises from the principal activity based in the UK. Management reviews the performance of the Group by reference to total results against budget.
The total profit measure is operating (loss)/profit as disclosed on the face of the consolidated income statement. No differences exist between the basis of preparation of the performance measures used by management and the figures in the Group financial information
2 Revenue
Unaudited Unaudited Audited
Period Period Year ended
1/10/19-31/3/20 1/10/18-31/3/19 30/09/19
GBP'000 GBP'000 GBP'000
Revenue arises from:
Component sales 12,144 13,427 25,411
Sales of tooling 1,071 230 1,449
13,215 13,657 26,860
Segmental information
The Group currently has one main reportable segment in each year/period, namely Automotive NVH which involves provision of insulation materials to reduce noise, vibration and harshness to automotive manufacturing. Turnover and Operating Profit are disclosed for other segments in aggregate as they individually do not have a significant impact on the Group result. These segments have no significant identifiable assets or liabilities.
Measurement of operating segment profit or loss, assets and liabilities
The accounting policies of the operating segments are the same as those applied by the Group in the FY19 annual report and accounts after making appropriate adjustments for the impact of IFRS16 and as disclosed in note 1.
The Group evaluates performance on the basis of operating (loss)/profit.
1/10/19-31/3/20
Automotive Others Total
NVH GBP'000 GBP'000
GBP'000
Group's revenue per Consolidated
Statement of Comprehensive
Income 12,382 833 13,215
Depreciation of owned assets 432 - 432
Depreciation of right-of-use
assets 364 - 364
Amortisation 158 - 158
Segment operating (loss)/profit (341) 42 (299)
Finance expense (259)
Share of post tax profit
of equity accounted
joint venture 71
Group loss before tax (487)
Segmental information (continued)
As at 31/3/20
Automotive Others Total
NVH GBP'000 GBP'000
GBP'000
Additions to non-current
assets 145 - 145
Reportable segment assets 28,453 - 28,453
Investment in joint ventures 193 - 193
Total Group assets 28,646 - 28,646
Reportable segment liabilities/
total Group liabilities 13,658 - 13,658
1/10/18-31/3/19
Automotive Others Total
NVH GBP'000 GBP'000
GBP'000
Group's revenue per Consolidated
Statement of Comprehensive
Income 12,491 1,166 13,657
Depreciation/Amortisation 536 - 536
Segment operating (loss)/profit (1,104) 99 (1,005)
Finance expense (90)
Share of post tax profit
of equity accounted
joint venture 119
Group profit before tax (976)
As at 31/3/19
Automotive Others Total
NVH GBP'000 GBP'000
GBP'000
Additions to non-current
assets 90 - 90
Reportable segment assets 24,923 - 24,923
Investment in joint ventures 224 - 224
Total Group assets 25,147 - 25,147
Reportable Segment liabilities/
Total Group liabilities 11,757 - 11,757
Segmental information (continued)
Automotive Year Ended
NVH Others 30/9/19 Total
GBP'000 GBP'000 GBP'000
Group's revenue per Consolidated
Statement of Comprehensive
Income 24,841 2,019 26,860
Depreciation 800 - 800
Amortisation and impairment 280 72 352
Segment operating(loss)/profit (1,584) 29 (1,555)
Finance expense (192)
Share of post tax profit
of equity accounted
joint venture 203
Group loss before tax (1,544)
Automotive As at 30/9/19
NVH Others Total
GBP'000 GBP'000 GBP'000
Additions to non-current assets 384 - 384 Reportable Segment assets 26,265 - 26,265 Investment in joint venture 217 - 217 Total Group assets 26,482 - 26,482 Reportable segment liabilities/ Total Group liabilities 10,379 - 10,379
Reporting of external revenue by location of customers is as follows:
Unaudited Unaudited Audited
Period Period Year ended
1/10/19-31/3/20 1/10/18-31/3/19 30/09/19
GBP'000 GBP'000 GBP'000
United Kingdom 10,568 11,077 20,826
Germany 1,613 1,778 3,707
Sweden 276 393 989
Other European 750 390 1,291
Rest of the World 8 19 47
13,215 13,657 26,860
3 Earnings per share
Unaudited Unaudited Audited
Period Period Year Ended
1/10/19-31/3/20 1/10/18-31/3/19 30/09/19
GBP'000 GBP'000 GBP'000
Loss used in calculating
basic and
diluted earnings per share (640) (976) (1,499)
Weighted average number
of GBP0.02 shares
for the purpose of basic
and diluted
earnings per share ('000) 39,601 22,101 23,971
Basic and diluted earnings
per share (pence) (1.62)p (4.42)p (6.25)p
Loss per share is calculated based on the share capital of Autins Group plc and the earnings of the Group for all periods. There are options in place over 552,262 (H1 19: 980,400) shares that were anti-dilutive at the period end, but which may dilute future earnings per share.
4 Non-recurring and exceptional items
Unaudited Unaudited Audited
Period Period Year Ended
1/10/19 - 31/3/20 1/10/18 - 31/3/19 30/09/19
GBP'000 GBP'000 GBP'000
Adjusted operating loss (100) (575) (885)
Amortisation of acquired
intangible assets 119 118 237
Other exceptional operating
costs
Change of Chief Financial
Officer 160 - -
Restructuring programme - 312 433
Reported operating loss (379) (1,005) (1,555)
The Company acquired 100 per cent of the issued share capital of Acoustic Insulations Limited on 29 April 2014 as part of an overall refinancing package to fund strategic investments and additional working capital to support the growth of the Group. This acquisition recognised GBP1,909k of intangible assets which creates an annual amortisation charge of GBP237k.
The Group incurred exceptional costs of GBP160k in the period in respect of the change of Chief Financial Officer including recruitment fees and compensation costs.
In response to the challenging trading conditions affecting the automotive industry the Group completed a significant overhead cost out programme in the prior period and year and sought to adjust its funding arrangements to suit a period of uncertainty. This programme required a number of redundancies (with associated costs) and additional legal and professional expenses associated with a review of the Group's overall banking facilities and structure resulting in an exceptional charges of GBP160k.
5 Taxation
Given the Group's trading loss and the ongoing impact of Covid-19 on the current year deferred taxation assets have been reduced in respect of the utilisation of losses carried forward as this is no longer considered sufficiently probable in the short term.
6 Impact of transition to IFRS16
Impact on the Interim Consolidated Statement of Comprehensive Income
Unaudited Period IFRS 16 adjustments Amounts without
1/10/19-31/3/20 As reported GBP'000 adoption of IFRS
GBP'000 16
GBP'000
Revenue 13,215 - 13,215
Cost of sales (9,299) (26) (9,325)
Gross profit 3,916 (26) 3,890
Other operating income
Distribution and administrative
expenses excluding exceptional
costs and amortisation (3,936) (80) (4,016)
Amortisation of acquired intangible
assets (119) - (119)
Other exceptional operating
costs (160) - (160)
Total distribution and administrative
expenses (4,215) (80) (4,295)
Operating loss (299) (106) (405)
Finance expense (259) 147 (112)
Share of post-tax profit of
equity accounted joint ventures 71 - 71
Loss before tax (487) 41 (446)
Tax expense (73) - (73)
Loss after tax for the period (560) 41 (519)
Other comprehensive expense
Currency translation differences (11) - (11)
Total comprehensive expense
for the period (571) 41 (530)
Loss per share
Basic and diluted earnings
per share (1.41)p 0.10p (1.31)p
Impact on the Interim Consolidated Statement of Financial Position
Unaudited IFRS 16 adjustments Amounts without
As at 31/3/20 As reported GBP'000 adoption of IFRS
GBP'000 16
GBP'000
Non-current assets
Property, plant and equipment 10,353 - 10,353
Right-of-use assets 5,056 (5,056) -
Intangible assets 3,380 - 3,380
Investments in equity-accounted
joint ventures 193 - 193
Deferred tax asset 51 - 51
Total non-current assets 19,033 (5,056) 13,977
Current assets
Inventories 2,062 - 2,062
Trade and other receivables 5,548 89 5,637
Cash in hand and at bank 2,003 - 2,003
Total current assets 9,613 89 9,702
Total assets 28,646 (4,967) 23,679
Current liabilities
Trade and other payables 3,436 156 3,592
Loans and borrowings 2,651 - 2,651
Lease liabilities 696 (696) -
Total current liabilities 6,783 (540) 6,243
Non-current liabilities
Trade and other payables 113 - 113
Loans and borrowings 1,696 - 1,696
Lease liabilities 4,980 (4,980) -
Deferred tax liability 86 - 86
Total non-current liabilities 6,875 (4,980) 1,895
Total liabilities 13,658 (5,520) 8,138
Net assets 14,988 553 15,541
Equity attributable to equity
holders of the
Company
Share capital 792 - 792
Share premium account 15,866 - 15,866
Other reserves 1,886 - 1,886
Currency differences reserve (156) - (156)
Retained earnings (3,400) 553 (2,847)
Total equity 14,988 553 15,541
Impact on the Interim Consolidated Statement of Cash Flows
Unaudited Period IFRS 16 adjustments Amounts without
1/10/19-31/3/20 As reported GBP'000 adoption of IFRS
GBP'000 16
GBP'000
Cash flows from operating activities
Loss after tax (560) 41 (519)
Adjustments for:
Income tax 73 - 73
Finance expense 259 (147) 112
Employee share-based payment
(credit)/charge (15) - (15)
Depreciation of property, plant
and equipment 796 (364) 432
Amortisation of intangible assets 158 - 158
Share of post-tax profit of
equity accounted
joint ventures (71) - (71)
640 (470) 170
Decrease in trade and other
receivables 1,091 - 1,091
(Increase) in inventories (101) - (101)
(Decrease) in trade and other
payables (1,012) - (1,012)
Cash from operations 618 - 148
Income taxes received - - -
Net cash flows from operating
activities 618 - 148
Investing activities
Purchase of property, plant
and equipment (85) - (85)
Purchase of intangible assets (60) - (60)
Dividend received from equity
accounted
joint venture 95 - 95
Net cash used in investing activities (50) - (50)
Financing activities
Interest paid (258) 147 (111)
Share issue expenses paid (17) - (17)
Proceeds from loans and borrowings 1,459 - 1,459
Repayment of loans and borrowings (1,697) - (1,697)
Payment of lease liabilities (323) 323 -
Net cash (used in)/from financing
activities (836) 470 (366)
Net increase/(decrease) in cash
and cash equivalents (268) - (268)
Cash and cash equivalents at
beginning
of period 2,125 - 2,125
Cash and cash equivalents at
end of period 1,857 - 1,857
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END
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