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Goodwin Plc LSE:GDWN London Ordinary Share GB0003781050 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  105.00 3.52% 3,090.00 2,900.00 3,070.00 3,070.00 2,990.00 2,990.00 2,945 16:35:28
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Industrial Engineering 144.5 12.1 107.9 28.6 238

Goodwin PLC Half-year Report

16/12/2020 7:00am

UK Regulatory (RNS & others)


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Goodwin PLC

16 December 2020

GOODWIN PLC

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the half year ended 31st October 2020

CHAIRMAN'S STATEMENT

The pre-tax profit for the Group for the six month period ending 31st October 2020 was GBP5.8 million (2019 GBP7.4 million) a 22% decrease on revenue of GBP62.6 million. The Group cash flow and banking headroom are in line with the Board's expectations, and the order book remains robust at GBP174 million as at 31st October 2020 but caution is needed with the Covid-19 uncertainty delaying some capital projects and the downturn in the oil and gas industry, which is now likely to be a permanent feature and so a smaller percentage of our targeted business going forwards.

Within the Refractory Engineering Division, the current activity levels are climbing to similar levels to those seen prior to the onset of Covid-19. However, we remain uncertain where we will stand after the effects of the second and possible third lock down. The Castaldo silicone rubber technology and plant that we purchased during the previous financial year has been successfully relocated from the USA to our company in Thailand, Siam Casting Powders. This plant is now installed, commissioned and producing.

Without neglecting the huge recognition due to the dedicated hard work of all Group employees, through careful management of overhead and expenditure combined with the quality of our customer base and the order book that has been built with them, the Group has suffered less than many throughout the pandemic, for which we are grateful. With the high levels of uncertainty that Covid-19 continues to subject the world to, coupled with the side effects of Brexit in the UK, there have been exceedingly challenging trading conditions, which should correct themselves with the markets we address, once normality can resume.

 
 T. J. W. Goodwin 
 Chairman           16th December 
                     2020 
 

Management report

Financial Highlights

 
                                                  Unaudited      Unaudited   Audited Year 
                                                  Half Year      Half Year          Ended 
                                            to 31st October             to 
                                                       2019 
                                               31st October   31st October     30th April 
                                                       2020           2019           2020 
                                                      GBP'm          GBP'm          GBP'm 
 Consolidated Results 
 Revenue                                               62.6           70.1          144.5 
 Operating profit                                       6.1            7.8           12.9 
 Profit before tax                                      5.8            7.4           12.1 
 Profit after tax                                       4.5            5.6            8.3 
----------------------------------------  -----------------  -------------  ------------- 
 Capital Expenditure (owned and finance 
  lease assets)                                         8.3            3.0            6.1 
----------------------------------------  -----------------  -------------  ------------- 
 Earnings per share - basic                          56.64p         72.92p        107.93p 
----------------------------------------  -----------------  -------------  ------------- 
 Earnings per share - diluted                        55.42p         69.77p        103.31p 
 

Turnover

Sales revenue of GBP62,628,000 for the half year represents a 11% decrease from the GBP70,090,000 achieved during the same period last year.

Profit Before Tax

Profit before tax for the six months of GBP5,774,000 is a 22% decrease from the GBP7,406,000 achieved for the same six month period last year.

Key performance indicators

The key performance indicators for the business are listed below:

 
 
                                                    Unaudited      Unaudited   Audited Year 
                                                    Half Year      Half Year          Ended 
                                                           to             to 
                                                 31st October   31st October     30th April 
                                                         2020           2019           2020 
 
 Gross profit as a % of turnover                         25.9           27.8           24.1 
 Other income (in GBP millions)                             -            0.7            0.7 
 Profit before tax (in GBP millions)                      5.8            7.4           12.1 
 
 Gearing % (excluding deferred consideration)            29.8           25.7           17.9 
 
 Non cash charges (in GBPmillions) 
 Depreciation (in GBP millions)                           2.7            3.2            5.9 
 Depreciation of finance leased assets 
  (in GBP millions)                                       0.2            0.1            0.3 
 Amortisation (in GBP millions)                           0.7            0.5            1.3 
 
 Total non cash charges (in GBP millions)                 3.6            3.8            7.5 
 
 

Alternative performance measures mentioned above are defined in note 36 on page 86 of the Group Annual accounts to 30th April 2020 .

2020/21 Outlook

With the upcoming completion of several radar systems in East Asia, the commencement of manufacturing works across our nuclear contracts and, hopefully, an improving Refractory Engineering Division performance, we expect the second half year pre-tax profits to be similar, if not improving on, the first half of this financial year.

Despite conditions remaining tough for our foundry, which is still transitioning away from its historic baseload of petrochemical related work, it is well placed to benefit from the upcoming increase in military expenditure and nuclear related casting requirements as its precision heavy castings niche skillset will be required. However, like all projects within this industry, a significant amount of time is required until the design and procurement of components can occur and value can be realised. Armed with the baseload of casting nuclear waste boxes we believe that going forward it will be able to build its way back to sustainable profitability over time.

Within the Refractory Engineering Division, trading conditions remain difficult due to several market sectors being affected by lockdowns with reduced confidence in consumer spending. The short to medium term outlook will be dependent on the market recovery and consumer spending.

The Board continues to manage working capital and expenditure to maintain a modest level of gearing. Prior to the end of this current financial year, we will be repaying the Bank of England CCFF loan that we took out as an insurance policy against global financial trauma caused by Covid-19.

Risks and Uncertainties

The Group, mainly through its centralised management structure, makes best endeavours to have in place internal control procedures to identify and manage the key risks and uncertainties affecting the Group. We would refer you to pages 11 to 13 of the Group Annual Accounts to 30th April 2020 which describe the principal risks and uncertainties, and to note 28 (starting on page 75) which describes in detail the key financial risks and uncertainties affecting the business such as credit risk and foreign exchange risk.

Judging the future relationship of the major currency pairs of the US Dollar, Sterling and the Euro continues to be a challenge.

Report on Expected Developments

This report describes the expected developments of the Group during the year ended 30th April 2021 . The report may contain forward-looking 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 to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.

Going concern

The Group continues to trade profitably and with the current order book level we are confident that this will continue and improve, especially as we move in to the next financial year, dependent, in the main, on Covid-19 related resolutions as discussed elsewhere in the accounts. As in previous periods, the levels of depreciation and amortisation (both non cash items) remain significant thus masking the true cash generating capability of the Group. As at 31st October 2020 , the Group net debt stood at GBP31.1 million (31st Oct 2019 GBP27.2 million) as set out in note 10 to these accounts. Whilst the net debt levels are higher than those recorded as at April 2020 and October 2019 the gearing level at 29.8% is still modest and our banking headroom (facilities versus utilisation) is significant. Furthermore, within the second half of this financial year we would expect to significantly reduce our investment in working capital. Given the foregoing, the Directors do not see an issue with the continued ability of the Group to meet its financial commitments and so have drawn up these accounts on a going concern basis.

Responsibility statement of the Directors in respect of the half-yearly financial report

The Directors confirm to the best of their knowledge that 1) this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that 2) the Interim Management Report and condensed financial statements include a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year) and 4.2.8R (being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last Annual Report that could do so).

 
 T.J. W. Goodwin 
 Chairman          16(th) December 
                    2020 
 

Condensed Consolidated Statement of Profit or Loss

for the half year to 31st October 2020

 
                                              Unaudited      Unaudited      Audited 
                                              Half Year      Half Year   Year Ended 
                                                     to             to 
                                           31st October   31st October   30th April 
                                                   2020           2019         2020 
                                                GBP'000        GBP'000      GBP'000 
 Continuing operations 
 Revenue                                         62,628         70,090      144,512 
 Cost of sales                                 (46,404)       (50,610)    (109,743) 
 
 Gross profit                                    16,224         19,480       34,769 
 Other income                                         -            689          690 
 Distribution expenses                          (1,320)        (1,629)      (2,792) 
 Administrative expenses                        (8,833)       (10,715)     (19,809) 
 
 Operating profit                                 6,071          7,825       12,858 
 Financial expenses                               (323)          (449)        (809) 
 Share of profit of associate companies              26             30           66 
 
 Profit before taxation                           5,774          7,406       12,115 
 Tax on profit                                  (1,289)        (1,812)      (3,775) 
 
 Profit after taxation                            4,485          5,594        8,340 
 
 Attributable to: 
 Equity holders of the parent                     4,171          5,260        7,866 
 Non-controlling interests                          314            334          474 
 
 Profit for the period                            4,485          5,594        8,340 
 
 Basic earnings per ordinary share 
  (Note 9)                                       56.64p         72.92p      107.93p 
 
 Diluted earnings per ordinary share 
  (Note 9)                                       55.42p         69.77p      103.31p 
 
 

Condensed Consolidated Statement of Comprehensive Income

for the half year to 31st October 2020

 
                                                Unaudited      Unaudited      Audited 
                                                Half Year      Half Year   Year Ended 
                                                       to             to 
                                             31st October   31st October   30th April 
                                                     2020           2019         2020 
                                                  GBP'000        GBP'000      GBP'000 
 
 Profit for the period                              4,485          5,594        8,340 
 
 Other comprehensive income / (expense) 
 
 Items that are or may be reclassified 
  subsequently to the income statement 
 Foreign exchange translation differences             593          (162)      (1,007) 
 Goodwill arising from purchase 
  of non-controlling interest in 
  subsidiaries                                          -           (63)         (72) 
 Effective portion of changes in 
  fair value of cash flow hedges                    (293)          1,928        (355) 
 Ineffective portion of changes 
  in fair value of cash flow hedges                 (617)              -            - 
 Change in fair value of cash flow 
  hedges transferred to profit or 
  loss                                                935            379          522 
 Effective portion of changes in 
  fair value of cost of hedging                        88          (515)        (843) 
 Ineffective portion of change in 
  fair value cost of hedging                          581              -            - 
 Change in fair value of cost of 
  hedging transferred to profit or 
  loss                                                281            276          395 
 Tax on items that are or may be 
  reclassified subsequently to profit 
  or loss                                           (186)          (347)           77 
 
 Other comprehensive income / (expense) 
  for the period, net of income tax                 1,382          1,496      (1,283) 
 
 Total comprehensive income for 
  the period                                        5,867          7,090        7,057 
 
 Attributable to: 
 Equity holders of the parent                       5,465          6,761        6,587 
 Non-controlling interests                            402            329          470 
 
                                                    5,867          7,090        7,057 
 
 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2020

 
                                                                                                          Total 
                                                                                                  attribut-able 
                                                                Cash                                  to equity 
                                              Share-based       flow          Cost                      holders 
                       Share   Translat-ion      payments      hedge    of hedging    Retained           of the   Non-controll-ing     Total 
                     capital        reserve       reserve    reserve       reserve    earnings           parent          interests    equity 
                     GBP'000        GBP'000       GBP'000    GBP'000       GBP'000     GBP'000          GBP'000            GBP'000   GBP'000 
  Half year 
  to 31st October 
  2020 
  (Unaudited) 
 Balance at 
  1st May 2020           736            361         5,244      (499)         (743)      99,918          105,017              4,585   109,602 
 Total 
 comprehensive 
 income: 
 Profit                    -              -             -          -             -       4,171            4,171                314     4,485 
 Other 
 comprehensive 
 income: 
 Foreign exchange 
  translation 
  differences              -            502             -          -             -           -              502                 91       593 
 Net movements 
  on cash flow 
  hedges                   -              -             -         68           724           -              792                (3)       789 
 Total 
  comprehensive 
  income for 
  the period               -            502             -         68           724       4,171            5,465                402     5,867 
 Issue of shares          16              -             -          -             -           -               16                  -        16 
 Dividends 
  paid                     -              -             -          -             -     (6,016)          (6,016)              (125)   (6,141) 
 
 Balance at 
  31st October 
  2020                   752            863         5,244      (431)          (19)      98,073          104,482              4,862   109,344 
 
 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2020

 
                                                                                                          Total 
                                                                                                  attribut-able 
                                                                Cash                                  to equity 
                                              Share-based       flow          Cost                      holders 
                       Share   Translat-ion      payments      hedge    of hedging    Retained           of the   Non-controll-ing     Total 
                     capital        reserve       reserve    reserve       reserve    earnings           parent          interests    equity 
                     GBP'000        GBP'000       GBP'000    GBP'000       GBP'000     GBP'000          GBP'000            GBP'000   GBP'000 
  Half year 
  to 31st October 
  2019 
  (Unaudited) 
 Balance at 
  1st May 2019           720          1,044         4,991      (573)         (426)      99,409          105,165              4,126   109,291 
 Total 
 comprehensive 
 income: 
 Profit                    -              -             -          -             -       5,260            5,260                334     5,594 
 Other 
 comprehensive 
 income: 
 Goodwill arising 
  from purchase 
  of NCI interest 
  in subsidiary            -              -             -          -             -        (63)             (63)                  -      (63) 
 Foreign exchange 
  translation 
  differences              -          (198)             -          -             -           -            (198)                 36     (162) 
 Net movements 
  on cash flow 
  hedges                   -              -             -      1,937         (175)           -            1,762               (41)     1,721 
 Total 
  comprehensive 
  income for 
  the period               -          (198)             -      1,937         (175)       5,197            6,761                329     7,090 
 Issue of shares          16              -             -          -             -           -               16                  -        16 
 Dividends 
  paid                     -              -             -          -             -     (6,927)          (6,927)                  -   (6,927) 
 Acquisition 
  of NCI without 
  a change of 
  control                  -              -             -          -             -           -                -               (11)      (11) 
 Other 
  transactions             -            358             -          -             -       (358)                -                  -         - 
 
 Balance at 
  31st October 
  2019                   736          1,204         4,991      1,364         (601)      97,321          105,015              4,444   109,459 
 
 

Condensed Consolidated Statement of Changes in Equity

for the half year to 31st October 2020

 
                                                                                                           Total 
                                                                                                   attribut-able 
                                                                 Cash                                  to equity 
                                               Share-based       flow          Cost                      holders 
                        Share   Translat-ion      payments      hedge    of hedging    Retained           of the    Non-controll-ing               Total 
                      capital        reserve       reserve    reserve       reserve    earnings           parent           interests              equity 
                      GBP'000        GBP'000       GBP'000    GBP'000       GBP'000     GBP'000          GBP'000             GBP'000             GBP'000 
 Year ended 
  30th April 
  2020 
 (Audited) 
 Balance at 
  1st May 2019            720          1,044         4,991      (573)         (426)      99,409          105,165               4,126             109,291 
 Total 
 comprehensive 
 income: 
 Profit                     -              -             -          -             -       7,866            7,866                 474               8,340 
 Other 
 comprehensive 
 income: 
 Foreign exchange 
  translation 
  differences               -          (964)             -          -             -           -            (964)                (43)             (1,007) 
 Goodwill 
  arising from 
  purchase 
  of NCI interest 
  in subsidiaries           -              -             -          -             -        (72)             (72)                   -                (72) 
 Net movements 
  on cash flow 
  hedges                    -              -             -         74         (317)           -            (243)                  39               (204) 
 Total 
  comprehensive 
  income for 
  the period                -          (964)             -         74         (317)       7,794            6,587                 470               7,057 
 Issue of 
  shares                   16              -             -          -             -           -               16                   -                  16 
 Tax on 
  equity-settled 
  share-based 
  payment 
  transactions              -              -           253          -             -           -              253                   -                 253 
 Dividends 
  paid                      -              -             -          -             -     (6,927)          (6,927)                   -             (6,927) 
 Acquisition 
  of NCI without 
  a change 
  of control                -              -             -          -             -           -                -                (11)                (11) 
 Disposal 
  of equity 
  investments               -           (77)             -          -             -           -             (77)                   -                (77) 
 Reclassification           -            358             -          -             -       (358)                -                   -                   - 
 
 Balance at 
  30th April 
  2020                    736            361         5,244      (499)         (743)      99,918          105,017               4,585             109,602 
 
 
 

Condensed Consolidated Balance Sheet

as at 31st October 2020

 
 
                                                                  Unaudited      Unaudited       Audited 
                                                                      as at          as at         as at 
                                                               31st October   31st October    30th April 
                                                                       2020           2019          2020 
                                                                    GBP'000        GBP'000       GBP'000 
 Non-current assets 
  Property, plant and equipment                                      80,132         75,279        74,969 
  Investment in associates                                              853            817           816 
  Intangible assets                                                  24,770         22,483        24,695 
  Derivative financial assets                                         1,145              -           749 
  Other financial assets at amortised cost                              137            361           252 
 
                                                                    107,037         98,940       101,481 
 
 Current assets 
  Inventories                                                        45,359         56,913        44,887 
  Contract assets                                                    15,685          9,846         6,558 
   Trade and other financial assets                                  23,959         24,620        24,486 
   Other receivables                                                  5,669          3,694         4,506 
  Deferred tax asset                                                    151             84            60 
  Derivative financial assets                                         1,067          2,247           456 
  Cash and cash equivalents                                          10,915          9,416         9,840 
 
                                                                    102,805        106,820        90,793 
 
 Total assets                                                       209,842        205,760       192,274 
 
 Current liabilities 
  Bank overdrafts and interest-bearing liabilities                   33,661          9,551        14,624 
  Contract liabilities *                                             25,461         27,068        18,965 
   Trade payables and other financial liabilities                    19,724         18,174        23,485 
   Other payables                                                     4,260          6,471         3,298 
  Deferred consideration                                                  -            204             - 
  Derivative financial liabilities                                    1,011          1,552         1,071 
  Liabilities for current tax                                         1,881          1,393         1,873 
  Warranty provision                                                     81            235           160 
 
                                                                     86,079         64,648        63,476 
 
 Non-current liabilities 
  Interest-bearing liabilities                                        9,709         28,652        15,599 
  Derivative financial liabilities                                      474              -           202 
  Warranty provision                                                    414            219           324 
  Deferred tax liabilities                                            3,822          2,782         3,071 
 
                                                                     14,419         31,653        19,196 
 
 Total liabilities                                                  100,498         96,301        82,672 
 
 Net assets                                                         109,344        109,459       109,602 
 
 
 Equity attributable to equity holders of the parent 
  Share capital                                                         752            736           736 
  Translation reserve                                                   863          1,204           361 
  Share-based payments reserve                                        5,244          4,991         5,244 
  Cash flow hedge reserve                                             (431)          1,364         (499) 
  Cost of hedging reserve                                              (19)          (601)         (743) 
  Retained earnings                                                  98,073         97,321        99,918 
 
 Total equity attributable to equity holders of the parent          104,482        105,015       105,017 
 Non-controlling interests                                            4,862          4,444         4,585 
 
 Total equity                                                       109,344        109,459       109,602 
 
 

* Contract liabilities include advance payments from customers of GBP24,991,000, with the balance of GBP470,000 being costs accrued for contracts.

Condensed Consolidated Statement of Cash Flows

for the half year ended 31st October 2020

 
 
                                                        Unaudited   Unaudited       Audited 
                                                             Half   Half Year    Year ended 
                                                          Year to     to 31st    30th April 
                                                     31st October     October          2020 
                                                             2020        2019 
                                                          GBP'000     GBP'000       GBP'000 
 Cash flow from operating activities 
 Profit from continuing operations after 
  tax                                                       4,485       5,594         8,340 
  Adjustments for: 
  Depreciation                                              2,715       3,180         5,874 
  Depreciation of right-of-use assets 
   - formerly finance leases                                  159         141           290 
  Depreciation of right-of-use assets 
   - formerly operating leases                                265         248           537 
  Amortisation of intangible assets                           745         484         1,328 
  Financial expenses                                          323         449           809 
  Foreign exchange losses                                      48         143           203 
  (Profit) / loss on sale of property, 
   plant and equipment                                       (32)           2            52 
  Share of profit of associate companies                     (26)        (30)          (66) 
  Profit on disposal of subsidiary                              -           -         (172) 
  Tax expense                                               1,289       1,812         3,775 
 
 Operating profit before changes in working 
  capital and provisions                                    9,971      12,023        20,970 
  Decrease / (increase) in inventories                         85     (6,430)         4,748 
  Increase in contract assets                             (9,083)     (6,107)       (2,863) 
  Increase in trade and other receivables                    (53)       (849)       (2,549) 
  Increase in contract liabilities                          6,509       8,829           874 
  (Decrease) / increase in trade and other 
   payables                                               (3,351)       (522)         2,310 
  Decrease / (increase) in unhedged derivative 
   balances                                                   181       (126)         (980) 
 
 Cash inflow from operations                                4,259       6,818        22,510 
  Interest paid                                             (346)       (320)         (747) 
  Interest element of lease obligations 
   - formerly finance leases                                 (14)        (21)          (41) 
  Interest element of lease obligations 
   - formerly operating leases                               (28)        (27)          (56) 
  Corporation tax paid                                      (958)     (1,775)       (2,493) 
 
 Net cash from operating activities                         2,913       4,675        19,173 
 
 Cash flow from investing activities 
  Proceeds from sale of property, plant 
   and equipment                                              136          75           139 
  Acquisition of property, plant and equipment            (7,965)     (3,156)       (6,062) 
  Additional investment in existing subsidiaries                -        (74)          (83) 
  Acquisition of intangible assets                          (600)        (74)       (1,855) 
  Development expenditure capitalised                       (450)       (297)       (1,105) 
 
 Net cash outflow from investing activities               (8,879)     (3,526)       (8,966) 
 
 Cash flows from financing activities 
  Proceeds from issue of share capital                         16          16            16 
  Payment of capital element of finance 
   lease obligations                                        (524)       (547)         (954) 
  Payment of capital element of operating 
   lease liabilities                                        (263)       (167)         (509) 
  Proceeds from new finance leases                            704          54           102 
  Dividends paid                                          (6,016)     (6,927)       (6,927) 
  Dividends paid to non-controlling interests               (125)           -             - 
   Net proceeds from loans and committed 
    facilities                                             11,659      11,949         7,556 
 
 Net cash inflow / (outflow) from financing 
  activities                                                5,451       4,378         (716) 
 
 Net (decrease) / increase in cash and 
  cash equivalents                                          (515)       5,527         9,491 
  Cash and cash equivalents at beginning 
   of year                                                  9,449         493           493 
  Effect of exchange rate fluctuations 
   on cash held                                               109          56         (535) 
 
 Closing cash and cash equivalents (note 
  13)                                                       9,043       6,076         9,449 
 
 

Notes

to the Condensed Consolidated Interim Financial Statements

   1.         Reporting entity 

Goodwin PLC (the "Company") is a company incorporated in England and Wales. The unaudited condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2020 comprise the Company, its subsidiaries, and the Group's interests in associates (together referred to as the "Group").

The audited consolidated financial statements of the Group as at and for the year ended 30th April 2020 are available upon request from the Company's registered office at Ivy House Foundry, Hanley, Stoke-on-Trent, ST1 3NR or via the Company's web site: www.goodwin.co.uk.

   2.         Statement of compliance 

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted in the EU. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements of the Group as at and for the year ended 30th April 2020.

The comparative figures for the financial year ended 30th April 2020 are extracts and not the full Group's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference 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.

The Audit Committee has reviewed these unaudited condensed consolidated interim financial statements and has advised the Board of Directors that, taken as a whole, they are fair, balanced and understandable and provide the information necessary for shareholders to assess the Group's half year performance. These unaudited condensed consolidated interim financial statements were approved by the Board of Directors on 16(TH) December 2020.

   3.         Significant accounting policies 

The accounting policies applied by the Group in these unaudited condensed consolidated financial statements are the same as those applied by the Group in its audited consolidated financial statements as at and for the year ended 30th April 2020. The changes in accounting policies are to be reflected in the Group's consolidated financial statements as at and for the year ending 30th April 2021.

The following standards and amendments became effective and therefore were adopted by the Group.

-- Amendments to IFRS 3 - Definition of a business (effective for annual periods beginning on or after 1st January 2020)

-- Amendments to IAS 1 and IAS 8 - Definition of material (effective for annual periods beginning on or after 1st January 2020)

-- Amendments to References to the Conceptual Framework in IFRS Standards (effective for annual periods beginning on or after 1st January 2020)

The Group has considered the impact on profit, earnings per share and net assets in future periods, of the other new standards and interpretations referred to above, and none of the above standards or interpretations is expected to have a material impact.

New IFRS standards, amendments and interpretations not adopted

The IASB and IFRIC have issued additional standards and amendments which are effective for periods starting after the date of these financial statements. The following standards and amendments have not yet been adopted by the Group:

-- Amendments to IFRS 16 - Covid-19 Related Rent Concessions (effective for annual periods beginning on or after 1st June 2020)

-- Annual Improvements to IFRS Standards 2018-2000 Cycle (effective for annual periods beginning on or after 1st January 2022)

-- Amendments to IFRS 3 - Reference to the Conceptual Framework (effective for annual periods beginning on or after 1st January 2022)

   4.         Accounting estimates and judgements 

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these unaudited consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements as at and for the year ended 30th April 2020.

The tax charge in the period is based on management's estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period, and the impact of any disallowed costs.

   5.         Operating Segments 

Products and services from which reportable segments derive their revenues

In accordance with the requirements of IFRS 8 "Operating Segments" 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 in the following tables.

Segment Revenue

 
                          Mechanical Engineering            Refractory Engineering                   Sub Total 
                      Unaudited   Unaudited             Unaudited   Unaudited             Unaudited   Unaudited 
                           Half        Half   Audited        Half        Half   Audited        Half        Half    Audited 
                           Year        Year      Year        Year        Year      Year        Year        Year       Year 
                          Ended       Ended     Ended       Ended       Ended     Ended       Ended       Ended      Ended 
                           31st        31st      30th        31st        31st      30th        31st        31st       30th 
                        October     October     April     October     October     April     October     October      April 
                           2020        2019      2020        2020        2019      2020        2020        2019       2020 
                        GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000     GBP'000     GBP'000    GBP'000 
 
       Revenue 
     External 
      sales              43,121      47,244   100,078      19,507      22,846    44,434      62,628      70,090    144,512 
     Inter-segment 
      sales               9,418      13,085    25,821       4,651       4,757     8,361      14,069      17,842     34,182 
 
     Total revenue       52,539      60,329   125,899      24,158      27,603    52,795      76,697      87,932    178,694 
 
             Reconciliation to consolidated 
                                  revenues: 
     Inter-segment 
      sales                                                                                (14,069)    (17,842)   (34,182) 
 
     Consolidated revenue for 
      the period                                                                             62,628      70,090    144,512 
 
 

Segment profits

 
 
                         Mechanical Engineering                  Refractory Engineering                   Sub Total 
                                                             Unaudited   Unaudited             Unaudited   Unaudited 
                                                                  Half        Half   Audited        Half        Half   Audited 
                   Unaudited       Unaudited                      Year        Year      Year        Year        Year      Year 
                   Half Year       Half Year       Audited       Ended       Ended     Ended       Ended       Ended     Ended 
                       Ended           Ended    Year Ended        31st        31st      30th        31st        31st      30th 
                31st October    31st October    30th April     October     October     April     October     October     April 
                        2020            2019          2020        2020        2019      2020        2020        2019      2020 
                     GBP'000         GBP'000       GBP'000     GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000 
 
   Profits 
 Segment 
  result 
  including 
  associates           4,587           5,419         8,065       2,309       3,446     7,034       6,896       8,865    15,099 
 
                  Group administration costs                                                       (799)     (1,010)   (2,175) 
                  Group finance and expenses                                                       (323)       (449)     (809) 
 
 Consolidated profit before 
  tax for the period                                                                               5,774       7,406    12,115 
 Tax                                                                                             (1,289)     (1,812)   (3,775) 
 
                   Consolidated profit after 
                          tax for the period                                                       4,485       5,594     8,340 
 
 

Segment Assets and Liabilities

 
                     Segmental total assets          Segmental total liabilities           Segmental net assets 
                 Unaudited   Unaudited             Unaudited   Unaudited             Unaudited   Unaudited 
                      Half        Half   Audited        Half        Half   Audited        Half        Half    Audited 
                      Year        Year      Year        Year        Year      Year        Year        Year       Year 
                     Ended       Ended     Ended       Ended       Ended     Ended       Ended       Ended      Ended 
                      31st        31st      30th        31st        31st      30th        31st        31st       30th 
                   October     October     April     October     October     April     October     October      April 
                      2020        2019      2020        2020        2019      2020        2020        2019       2020 
                   GBP'000     GBP'000   GBP'000     GBP'000     GBP'000   GBP'000     GBP'000     GBP'000    GBP'000 
 Mechanical 
  Engineering      105,602     110,736    95,193      78,068      80,245    72,207      27,534      30,491     22,986 
 Refractory 
  Engineering       42,239      44,191    41,962      21,643      23,125    22,850      20,596      21,066     19,112 
 
 Sub total 
  reportable 
  segment          147,841     154,927   137,155      99,711     103,370    95,057      48,130      51,557     42,098 
 
             Goodwin PLC (the Company) 
                            net assets                                                  76,944      73,384     83,415 
                Elimination of Goodwin 
                       PLC investments                                                (25,801)    (25,301)   (25,801) 
 Goodwill                                                                               10,071       9,819      9,890 
 
 Consolidated total net 
  assets                                                                               109,344     109,459    109,602 
 
 Segmental property, plant and equipment (PPE) 
  capital expenditure (owned and finance lease 
  assets) 
 Goodwin PLC                                                                             4,701       1,456      2,824 
                Mechanical Engineering                                                   2,489       1,249      2,655 
 Refractory Engineering                                                                  1,069         259        633 
 
                                                                                         8,259       2,964      6,112 
 
 
   6.     Geographical segments 
 
                        Half Year Ended 31st October                           Half Year Ended 31st October 
                                    2020                                                   2019 
            Unaudited     Unaudited     Unaudited      Unaudited   Unaudited     Unaudited     Unaudited      Unaudited 
              Revenue   Operational   Non-current    PPE capital     Revenue   Operational   Non-current    PPE capital 
                         net assets        assets    expenditure                net assets        assets    expenditure 
              GBP'000       GBP'000       GBP'000        GBP'000     GBP'000       GBP'000       GBP'000        GBP'000 
 UK            17,928        72,558        85,076          6,638      16,836        73,865        80,895          2,623 
 Rest of 
  Europe        9,598         9,208         3,515            183      10,852         6,990         3,496             80 
 USA            5,557             -             -              -       6,787             -             -              - 
 Pacific 
  Basin        13,267        14,734         8,875            615      16,377        15,464         7,528            122 
 Rest of 
  World        16,278        12,844         9,571            823      19,238        13,140         7,021            139 
 
 Total         62,628       109,344       107,037          8,259      70,090       109,459        98,940          2,964 
 
 
                                                                                Year Ended 30th April 2020 
                                                                     Audited       Audited       Audited        Audited 
                                                                     Revenue   Operational   Non-current    PPE capital 
                                                                                net assets        assets    expenditure 
                                                                     GBP'000       GBP'000       GBP'000        GBP'000 
 UK                                                                   39,609        76,467        84,198          5,148 
 Rest of 
  Europe                                                              20,004         8,346         3,439            173 
 USA                                                                  12,749             -             -              - 
 Pacific 
  Basin                                                               34,844        13,513         7,132            225 
 Rest of 
  World                                                               37,306        11,276         6,712            566 
 
 Total                                                               144,512       109,602       101,481          6,112 
 
 
   7.         Revenue 

The Group's revenue is derived from contracts with customers. The following tables provide an analysis of revenue by geographical market and by product line.

 
                                                     Mechanical          Refractory 
                                                    Engineering         Engineering               Total 
                                                        GBP'000             GBP'000             GBP'000 
 Primary Geographical markets 
 
 Unaudited half year ended 31st October 
 2020 
 UK                                                      12,548               5,380              17,928 
 Rest of Europe                                           6,677               2,921               9,598 
 USA                                                      5,444                 113               5,557 
 Pacific Basin                                            4,698               8,569              13,267 
 Rest of World                                           13,754               2,524              16,278 
 
 Total                                                   43,121              19,507              62,628 
 
 
 
 
 
                                              Mechanical     Refractory 
                                             Engineering    Engineering     Total 
                                                 GBP'000        GBP'000   GBP'000 
 Primary Geographical markets 
 
 Unaudited half year ended 31st October 
  2019 
 UK                                               11,584          5,252    16,836 
 Rest of Europe                                    7,053          3,799    10,852 
 USA                                               6,735             52     6,787 
 Pacific Basin                                     6,988          9,389    16,377 
 Rest of World                                    14,884          4,354    19,238 
 
 Total                                            47,244         22,846    70,090 
 
 
 Product lines 
 
 Unaudited half year ended 31st October 
  2020 
 Standard products and consumables                 4,487         19,507    23,994 
 Minimum period contracts for goods 
  and services                                     1,626              -     1,626 
 Bespoke engineered products - over 
  time                                            27,306              -    27,306 
 Bespoke engineered products - point 
  in time                                          9,702              -     9,702 
 
 Total                                            43,121         19,507    62,628 
 
 
 Unaudited half year ended 31st October 
  2019 
 Standard products and consumables                 5,131         22,846    27,977 
 Minimum period contracts for goods 
  and services                                     2,171              -     2,171 
 Bespoke engineered products - over 
  time                                            25,146              -    25,146 
 Bespoke engineered products - point 
  in time                                         14,796              -    14,796 
 
 Total                                            47,244         22,846    70,090 
 
 
 
   8.         Dividends 

The Directors do not propose the payment of an interim dividend.

 
                                               Unaudited      Unaudited      Audited 
                                               Half Year      Half Year   Year Ended 
                                                      to             to 
                                            31st October   31st October   30th April 
                                                    2020           2019         2020 
                                                 GBP'000        GBP'000      GBP'000 
 Equity Dividends Paid: 
 Ordinary dividends paid during the                6,016              -            - 
  period in respect of the year ended 
  30th April 2020 (81.71p per share) 
 Ordinary dividends paid during the 
  period in respect of the year ended 
  30th April 2019 (96.21p per share)                   -          6,927        6,927 
 
 Total dividends paid during the period            6,016          6,927        6,927 
 
 
 
   9.         Earnings Per Share 

The calculation of the basic earnings per ordinary share is based on the number of ordinary shares in issue. The weighted average number of ordinary shares in issue during the six months ended 31st October 2020 was 7,364,087 (31st October 2019 : 7,213,304). The relevant profits attributable to ordinary shareholders were GBP4,171,000, (six months ended 31st October 2019 : GBP5,260,000).

There is a share option scheme in place for the Directors of the Company under the Company's Equity Long Term Incentive Plan (LTIP), based on the Company exceeding a target growth in the total shareholder return of the Company over the period from 1st May 2016 to 30th April 2019. Under the scheme, a maximum of 489,600 share options vested at 1st May 2019 of which 163,200 were exercised during this period and 163,200 during the previous six month period. The total number of shares used as the denominator for the diluted earnings per share is 7,526,719 (half year ended 31st October 201 9: 7,538,727; year ended 30th April 20 20: 7,613,654).

   10.       Capital Management, Issuance and Repayment of Debt 

At 31st October 2020 the capital utilised was GBP135,603,000, as shown below:

 
                                            Unaudited      Unaudited      Audited 
                                                as at          as at        as at 
                                         31st October   31st October   30th April 
                                                 2020           2019         2020 
                                              GBP'000        GBP'000      GBP'000 
 
 Cash and cash equivalents                   (10,915)        (9,416)      (9,840) 
 Lease liabilities - finance leases 
  (note 14)                                     1,451          1,684        1,256 
 Bank loans and committed facilities 
  (note 14)                                    38,713         31,390       27,010 
 Bank overdrafts (note 14)                      1,872          3,340          391 
 Deferred consideration                             -            204            - 
 
 Net debt                                      31,121         27,202       18,817 
 Total equity attributable to equity 
  holders of the parent                       104,482        105,015      105,017 
 
 Capital                                      135,603        132,217      123,834 
 
 
   11.       Property, Plant and Equipment 
 
 
                                        Unaudited         Unaudited      Unaudited      Unaudited 
                                            as at             as at          as at          as at 
                                     31st October      31st October   31st October   31st October 
                                             2020              2020           2020           2020 
                                          GBP'000           GBP'000        GBP'000        GBP'000 
 
                                     Owned assets      Right-of-use   Right-of-use          Total 
                                                           assets -       assets - 
                                                           formerly       formerly 
                                                     finance leases      operating 
                                                                            leases 
 Net book value at the beginning 
  of the period                            69,626             3,805          1,538         74,969 
 Additions                                  7,498               761              -          8,259 
 Disposals (at net book value)              (104)                 -              -          (104) 
 Depreciation                             (2,715)             (159)          (265)        (3,139) 
 Exchange adjustment                           99                19             29            147 
 
 Net book value at the end 
  of the period                            74,404             4,426          1,302         80,132 
 
 
 
 
 
                                         Unaudited         Unaudited      Unaudited      Unaudited 
                                             as at             as at          as at          as at 
                                      31st October      31st October   31st October   31st October 
                                              2019              2019           2019           2019 
                                           GBP'000           GBP'000        GBP'000        GBP'000 
 
                                      Owned assets      Right-of-use   Right-of-use          Total 
                                                            assets -       assets - 
                                                            formerly       formerly 
                                                      finance leases      operating 
                                                                             leases 
 
 Net book value at the beginning 
  of the period                             74,106                 -              -         74,106 
 Balance recognised on transition 
  to IFRS 16                                     -                 -          1,055          1,055 
 Additions                                   2,887                77            929          3,893 
 Transfer to right-of-use 
  assets - on transition                   (3,959)             3,959              -              - 
 Disposals (at net book value)                (77)                 -              -           (77) 
 Depreciation                              (3,180)             (141)          (248)        (3,569) 
 Exchange adjustment                         (162)              (10)             43          (129) 
 
 Net book value at the end 
  of the period                             69,615             3,885          1,779         75,279 
 
 
 
   12.       Intangible assets 
 
                                                      Unaudited      Unaudited 
                                                          as at          as at 
                                                   31st October   31st October 
                                                           2020           2019 
                                                        GBP'000        GBP'000 
 
 Net book value at the beginning of the period           24,695         22,354 
 Additions                                                  564            535 
 Amortisation                                             (745)          (484) 
 Exchange adjustment                                        256             78 
 
 Net book value at the end of the period                 24,770         22,483 
 
 
 
   13.       Cash and cash equivalents 
 
 
                                              Unaudited      Unaudited      Audited 
                                                  as at          as at        as at 
                                           31st October   31st October   30th April 
                                                   2020           2019         2020 
                                                GBP'000        GBP'000      GBP'000 
 
 Cash and cash equivalents per balance 
  sheet                                          10,915          9,416        9,840 
 Bank overdrafts                                (1,872)        (3,340)        (391) 
 
 Cash and cash equivalents per cash 
  flow statement                                  9,043          6,076        9,449 
 
 
   14.       Interest-bearing liabilities 
 
 
                                               Unaudited      Unaudited      Audited 
                                                   as at          as at        as at 
                                            31st October   31st October   30th April 
                                                    2020           2019         2020 
                                                 GBP'000        GBP'000      GBP'000 
 
 Bank overdrafts                                   1,872          3,340          391 
 Bank loans and committed facilities              30,749          4,740       12,750 
 Lease liabilities - formerly finance 
  leases                                             731            948          992 
 Lease liabilities - formerly operating 
  leases                                             309            523          491 
 
 Due within one year                              33,661          9,551       14,624 
 
 
 
 Bank loans and committed facilities         7,964   26,650   14,260 
 Lease liabilities - formerly finance 
  leases                                       720      736      264 
 Lease liabilities - formerly operating 
  leases                                     1,025    1,266    1,075 
 
 Due after more than one year                9,709   28,652   15,599 
 
 
 
 
 Bank overdrafts                             1,872    3,340      391 
 Bank loans and committed facilities        38,713   31,390   27,010 
 Lease liabilities - formerly finance 
  leases                                     1,451    1,684    1,256 
 Lease liabilities - formerly operating 
  leases                                     1,334    1,789    1,566 
 
 Total                                      43,370   38,203   30,223 
 
 
   15.       Total Financial Assets and Financial Liabilities 

The following table sets out the Group's accounting classification of its financial assets and financial liabilities, and their carrying amounts at 31st October 2020. The carrying amount is a reasonable approximation of fair value for all financial assets and financial liabilities.

 
 
                                                                           Total carrying 
                                        Fair value                               amount / 
                                         - hedging             Amortised       fair value 
                                       instruments     FVTPL        cost           amount 
                                           GBP'000   GBP'000     GBP'000          GBP'000 
 Financial assets measured 
  at fair value 
 Forward exchange contracts 
  used for hedging                           1,152         -           -            1,152 
 Other forward exchange contracts                -     1,060           -            1,060 
 
                                             1,152     1,060           -            2,212 
 
 Financial assets not measured 
  at fair value 
 Cash and cash equivalents                       -         -      10,915           10,915 
 Contract assets                                 -         -      15,685           15,685 
 Trade receivables and other 
  financial assets                               -         -      24,096           24,096 
 
                                                 -         -      50,696           50,696 
 
 Financial liabilities measured 
  at fair value 
 Forward exchange contracts 
  used for hedging                             753         -           -              753 
 Other forward exchange contracts                -       732           -              732 
 
                                               753       732           -            1,485 
 
 
 Financial liabilities not 
  measured at fair value 
 Bank overdrafts                                 -         -       1,872            1,872 
 Bank loans                                      -         -      38,713           38,713 
 Finance lease liabilities                       -         -       1,451            1,451 
 Contract liabilities                            -         -      25,461           25,461 
 Trade payables and other 
  financial liabilities                          -         -      19,724           19,724 
 
                                                 -         -      87,221           87,221 
 
 
 

The forward exchange contract assets and liabilities fair values in the above table are derived using Level 2 inputs as defined by IFRS 7 as detailed in the paragraph below.

IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the source of inputs used to derive the fair value. This classification uses the following three-level hierarchy: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

END

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