TIDMCTA
RNS Number : 1301N
CT Automotive Group PLC
21 September 2023
21 September 2023
CT AUTOMOTIVE GROUP PLC
("CT Automotive" or the "Group")
INTERIM RESULTS
Positive trading, efficiency initiatives delivering margin
improvement
CT Automotive, a leading designer, developer and supplier of
interior components to the global automotive industry, today
announces its results for the half year ended 30 June 2023 ("H1
2023").
Simon Phillips, Chief Executive Officer of CT Automotive,
commented:
"We are pleased with our first half performance. We drove strong
revenue growth, returned to profitability and strengthened our
balance sheet. Production volumes at the Group's facilities have
recovered rapidly and we are making good progress with our margin
enhancement initiatives.
CT Automotive is well-positioned to capitalise on the continued
recovery in global automotive end-markets and our improved
operating environment. Whilst cognisant of the macroeconomic
uncertainty, the Board remains confident of meeting full year
expectations."
Financial highlights
Restated
H1 23 H1 22
$m $m
------------------------------- -------- ---------
Revenue 68.2 54.2
Gross profit 17.8 10.5
Underlying EBITDA* 6.7 (4.6)
Underlying profit/(loss)
before taxation* 2.5 (8.4)
Profit/(loss) before taxation 1.3 (9.0)
Earnings/(loss) per share 1.7c (15.2)c
Net debt 9.0 20.2
------------------------------- -------- ---------
* Adjusted for non-underlying items as explained in Notes 4 and
13 of the condensed consolidated financial statements
Note: H1 2023 and H1 2022 are presented as continuing operations
excluding UK discontinued operations. H1 2022 has been restated for
prior period adjustments as explained in Note 15 of the condensed
consolidated financial statements
-- Encouraging trading performance in H1 2023 as global
production volumes recovered and automotive supply chain issues
eased
-- Revenues for H1 2023 ahead of the Board's expectations up 26% at $68.2m
-- Production revenue up 26% at $65.8m, reflecting the improved trading environment
-- Tooling revenue expected to be second-half weighted
reflecting the timing of customer projects, with strong visibility
on projects due to complete in H2 2023
-- Gross profit margins up to 26% (H1 2022: 19%), driven by a
combination of higher revenue, stable production schedules,
restructuring and efficiency initiatives
-- Balance sheet strengthened following the fundraising of $9.6m in May 2023
Operational highlights
-- Efficiency initiatives in China and Türkiye progressing as
planned and are expected to deliver additional savings in H2 2023,
further improving operating margins
-- Impact of hyperinflation in Türkiye partially offset by
improved pricing and cost escalation system implemented with key
customers
-- Performance of our new facility in Mexico is on track, with
the plant generating $4.8m revenue during H1 2023
-- Improvement in Group distribution and logistics recovered as
supply chains and container rates normalised
Current trading and outlook
-- We are encouraged by stabilising order volumes, pricing and
inventory patterns since the start of FY23 and entered H2 2023 with
good visibility
-- Notable increase in customer Requests For Quotes towards the
end of H1 2023, resulting in 5 new production program wins in Q3 to
date worth a total annual production turnover of $9.4m and tooling
business awards of $6.9m
-- While macroeconomic uncertainty remains, there are continued
signs that customer schedules are strengthening as original
equipment manufacturers' (OEMs) automotive supply chain issues are
continuing to improve
-- The Board remains confident of underlying margin run rate
progression in H2 2023, supported by continued benefits expected
from the Group's efficiency initiatives
-- As a result, the Board is confident in achieving its expectations for FY23
For further information, please contact:
CT Automotive via MHP
Simon Phillips, Chief Executive
Officer
Anna Brown, Chief Financial
Officer
MHP (Financial PR) Tel: +44 (0)7834 623 818
Tim Rowntree CTAutomotive@mhpgroup.com
Charlie Barker
Veronica Farah
Liberum (Nominated Adviser Tel: +44 (0)20 3100 2000
and Broker)
Richard Lindley
Benjamin Cryer
Notes to editors
CT Automotive is engaged in the design, development and
manufacture of bespoke automotive interior finishes (for example,
dashboard panels and fascia finishes) and kinematic assemblies (for
example, air registers, arm rests, deployable cup holders and
storage systems), as well as their associated tooling, for the
world's leading automotive original equipment suppliers ("OEMs")
and global Tier One manufacturers.
The Group is headquartered in the UK with a low cost
manufacturing footprint. Key production facilities are located in
Shenzhen and Ganzhou, China complemented by additional
manufacturing facilities in Mexico, Türkiye and Czechia.
CT Automotive's operating model enables it to pursue a price
leadership strategy, supplying high quality parts to customers at a
lower overall landed cost than competitors. This has helped the
Group build a high-quality portfolio of OEM customers, both
directly and via Tier One suppliers including Forvia and Marelli.
End customers include volume manufacturers, such as Nissan and
Ford, and luxury car brands such as Bentley and Lamborghini. In
addition, the Group supplies electric car manufacturers, including
Lucid. It is also working with e.Go Mobile, a German manufacturer
which plans to launch a series of small electric vehicles for the
budget end of the market.
The Group currently supplies component part types to over 47
different models for 19 OEMs. Since its formation, the Group has
been the only significant new entrant into the market, which is
characterised by high barriers to entry.
Use of alternative performance measures
The commentary uses alternative performance measures, which are
described as "Underlying". An explanation of the items identified
as non-underlying and that have been adjusted can be found in Notes
4 and 13 of the condensed consolidated financial statements.
Non-underlying items are items which due to their one-off,
non-trading and non-recurring nature, have been separately
classified by the Directors in order to draw them to the attention
of the reader and allow for a greater understanding of the
operating performance of the Group.
Strategic and Operational Review
Positive trading performance
The Group's trading performance in the first half of the year
has been encouraging as global production volumes continued to
recover and automotive supply chain issues eased.
Q1 2023 was characterised by low tendering activity as large
OEMs began re-evaluating their post Covid strategies, in particular
regarding their EV platforms. There was a notable increase in
customer Requests For Quotes towards the end of H1 2023. This
resulted in 5 new production program wins in Q3 to date with a
total production annualised turnover of $9.4m and tooling business
awards of $6.9m.
Revenues for H1 2023 were ahead of the Board's expectations at
$68.2m, made up of $65.8m of production revenue (H1 2022: $52.3m)
and $2.3m of tooling revenue (H1 2022: $1.9m). This was up 26% on a
continuing basis compared to H1 2022 ($54.2m, excluding
discontinued UK revenue of $3.0m).
Our tooling revenue is generated from the design and development
of new programs, with 5 projects completing during H1 2023,
generating $2.3m of tooling revenue (H1 2022: $1.9m). Our internal
toolroom is fully utilised and ensures maximum product control and
margins. Tooling revenue is expected to be weighted towards the
second half this year reflecting the timing of customers' product
launches and start of production. Currently, 11 projects are
underway and are due to complete in H2 2023 with an expected
revenue of c.$8-10m.
Gross margins have continued to improve and reached 26% (H1
2022: 19%) as the Group's ongoing efficiency initiatives in China
and Türkiye progressed as planned. China represents 70% of our
global production volumes and consequently remains the main focus
of our margin improvement initiatives. These initiatives include
the restructuring of tooling operations and manufacturing
footprint, supplier and logistics rationalisation, as well as
automation initiatives which are on track for H2 2023
implementation and will deliver further savings. As part of
restructuring our manufacturing footprint, we are continuing to
gradually consolidate some of our production lines in China to
Ganzhou, benefitting from comparatively lower labour costs. We
remain on track to deliver the margin improvement plan across the
second half of 2023, with automation being a key driver.
The economic environment in Türkiye has continued to be impacted
by hyperinflation. An improved pricing and cost escalation system
with key customers, aimed at compensating for local inflation and
the devaluation of the Turkish Lira, has been effective in
protecting local operations.
The new production facility in Mexico, which we opened in late
2022 to support our North American customers, has performed as
planned, generating $4.8m revenue during H1 2023. Further growth is
expected as the factory continues to scale up with new project
launches scheduled for Q1 2024.
Strengthened balance sheet to support growth initiatives
On 27 April 2023, we were pleased to announce the result of a
placing, which secured c.$9.6m of gross proceeds from new and
existing shareholders.
The net proceeds of the fundraise are being primarily used to
strengthen the balance sheet and to provide the Group with the
flexibility to take advantage of new pipeline opportunities as the
business positions itself for further growth. A small portion of
the net proceeds will be used to facilitate further efficiency
savings, including through investment in injection moulding
production processes and robotics.
At the half-year end the net debt reduced to $9.0m (30 June
2022: $20.2m; 31 December 2022: $12.2m).
People
Our performance during this period of recovery and efficiency
initiatives would not have been possible without the dedication,
enthusiasm and expertise of our people. They are critical to the
continued evolution of the business.
We continue to invest in our systems and processes to ensure our
people are safe, empowered and have sufficient opportunities to
develop their careers while supporting the Group's long-term
goals.
Board changes
A number of important changes to the Board structure and roles
were made in H1 2023 to support the business.
We were pleased to appoint Anna Brown as CFO at the end of April
2023. Anna has substantial listed company and financial experience,
and has made an immediate impact as we continue to improve
governance and execute our growth strategy.
In July 2023 Ray Bench was appointed as Non-Executive Chairman ,
while Simon Phillips took on the role of Chief Executive Officer.
Scott McKenzie, previously Chief Executive Officer, stepped down
from the Board to a new role as Chief Operating Officer, Sales and
Product Development.
Francesca Ecsery was appointed Senior Independent Non-Executive
while Nick Timberlake joined the Board as a Non-Executive
Director.
In August 2023, we also announced the appointment of Geraint
Davies as an independent Non-Executive Director, joining our Board
on 18 September 2023 as a Chair of the Audit & Risk Committee.
He brings over 30 years' experience as a Partner in the "Big Four"
accounting firms, working with global businesses in manufacturing,
real estate, mining, distribution and financial services.
Outlook
The Board anticipates customer schedules to support continued
strong demand in H2 2023, alongside stabilising pricing and
inventory patterns. Trading since 30 June 2023 has been in line
with the Board's expectations.
We are expecting to recognise c.$8-10m of revenue from the
tooling projects which are due to complete in H2 2023, subject to
customer-led timings for the start of production. H2 2023 gross
margins are expected to further improve in line with the ongoing
margin improvement plan.
Looking further ahead, the Board is mindful of the possibility
that the continuing macroeconomic uncertainty with regards to
interest rates and inflation may result in a softening of demand
leading into 2024. That said, whilst volumes and demand remain
strong compared to the pandemic period, automotive sector global
production is still at least 7% lower compared to 2019 levels.
The Board remains confident of underlying margin run rate
progression in H2 2023 and of achieving its expectations for FY23,
supported by the benefit expected from the Group's efficiency
initiatives.
Financial review
Revenue and margins
Total Group revenue for H1 2023 was $68.2m, up 26% on a
continuing basis compared to H1 2022 ($54.2m, excluding
discontinued UK revenue of $3.0m), as customer volumes and
production schedules strengthened and automotive supply chain
issues eased . Growth came from both improvement in production
revenue which increased by 26% from $52.3m to $65.8m and an
increase in tooling revenue from $1.9m to $2.3m.
Gross profit increased to $17.8m (H1 2022: $10.5m) and gross
margins continued to improve and reached 26% (H1 2022: 19%) on the
back of improved trading conditions and the Group's ongoing
efficiency initiatives in China and Türkiye which started to
deliver savings. These initiatives include the restructuring of
tooling operations and manufacturing footprint, supplier and
logistics rationalisation as well as automation initiatives which
are on track for H2 2023 implementation.
Non-underlying items
During the first half of 2023 the Group recognised
non-underlying items of $1.2m (H1 2022: $0.7m). These items
primarily related to costs of $0.9m (H1 2022: nil) in connection
with restructuring and margin improvement initiatives. These costs
included redundancies while optimising our manufacturing footprint
in China and Türkiye ($0.1m), a write down of unviable stock as
part of destocking and distribution centre rationalisation
programme ($0.3m) and a $0.5m charge in relation to previously
completed tooling projects.
The Group has been undertaking an exercise to improve reporting
and governance. This has resulted in a change in the method to
estimate tooling overheads and, as a result of applying this new
accounting estimate, the Group is releasing production overheads in
relation to tooling projects that were capitalised in prior
periods. The amount for the current financial period is $0.3m (H1
2022: nil).
This change is expected to result in a non-underlying charge of
$1.8m for the full year as the Group releases the previously
capitalised production overheads as tooling projects are completed
in the current year, with the full amount to be released in FY23.
There is no cash impact. Following the full release in the current
year, the change will have no further impact on future periods.
For further details, see Notes 4 and 13 of the condensed
consolidated financial statements.
EBITDA and operating result
H1 2023 underlying EBITDA was $6.7m (H1 2022: $4.6m loss) while
reported EBITDA was $5.4m (H1 2022: $5.2m loss) as a result of
improved gross profit and after taking account of distribution
expenses of $2.7m (H1 2022: $4.0m) and administrative expenses of
$13.0m (H1 2022: $15.0m). A $1.3m reduction in distribution
expenses was due to container rates settling to pre-covid
levels.
During H1 2023 the Group benefitted from $0.3m of foreign
exchange gains (H1 2022: $2.6m loss) due to favourable exchange
rate movements primarily against the US$. These are included in
administrative expenses.
Depreciation and amortisation charges remained at similar levels
for the year at $3.0m (H1 2022: $3.0m). Therefore, the resulting
underlying operating profit was $3.7m (H1 2002: $7.5m loss) and
reported operating profit was $2.4m (H1 2022: $8.2m loss).
Discontinued operations
During FY22, the Group announced the closure of Chinatool
Automotive Systems Limited , a production facility in Newton
Aycliffe, UK, which was impacted by severe labour shortages and
inflationary increases in energy costs and wages. The formal
liquidation process is currently underway. Loss for the period
attributable to the discontinued operations was $0.4m (H1 2022:
$0.7m loss) and primarily related to translational foreign exchange
losses on the GBP denominated balance sheet items.
Prior period restatement
As previously disclosed in the 2022 Annual Report, during the
preparation of FY22 year-end accounts, the Group identified prior
period adjustments in relation to calculating the FY21 year-end
inventory and transfer of tooling assets from the Group balance
sheet to cost of sales upon the sale to the customer. Posting of
the adjustments to FY21 year-end balance sheet had a knock-on
effect on previously announced H1 2022 results.
The impact of posting the inventory adjustment resulted in an
increase in the cost of sales in the period to 30 June 2022 by
$1.1m and reduced inventories as at 30 June 2022 by $9.4m. The
impact of posting the tooling adjustment resulted in the value
reported in the cost of sales for the period to 30 June 2022
reducing by $0.4m and the value of property, plant and equipment
decreasing by $2.2m. Therefore, the overall impact of prior period
adjustments is an increase in the cost of sales for the period to
30 June 2022 by $0.7m and a reduction in net assets as at 30 June
2022 by $11.6m with a corresponding reduction in brought forward
reserves of $10.9m.
Impact of hyperinflation
Applying the hyperinflation standard (IAS 29) in relation to
Turkish operations resulted in an increase in Group revenue by
$0.5m (H1 2022: $0.7m increase) and nil impact on Group EBITDA (H1
2022: $0.6m loss).
Capital structure, working capital and interest
Since December 2022 year end, the Group saw its net asset value
increase to $11.1m (FY22: $2.6m) supported by the fundraise in May
2023 which generated net proceeds of $9.1m.
Non-current assets reduced to $16.9m (FY22: $19.9m), mainly
reflecting a $3.0m (H1 2022: $3.0m) depreciation charge in relation
to PPE, right of use assets and intangible assets.
During H1 2023, the Group saw a $6.9m increase in its current
assets. This was primarily driven by an increase in trade debtors
as the customer payment terms reverted back to normal and the
proceeds of the fundraise, partially offset by the decrease in
finished goods as the Group undertook a destocking exercise and
distribution centre rationalisation programme. Trade and other
payables reduced by $2.2m during H1 2023 as supplier payments have
returned to normal and a portion of proceeds from the fundraise has
been used to pay down suppliers in China and the UK.
The Group has continued to prudently manage its working capital
by utilising available debt facilities and the proceeds of the
fundraise. Cash and cash equivalents as at 30 June 2023 were $7.6m
(FY22: $4.8m). Net debt as at 30 June 2023 was $9.0m (FY22: $12.2m)
and included bank overdrafts, amounts drawn on the Group's trade
loans and invoice finance facilities with HSBC. After taking
account of current and non-current IFRS 16 lease liabilities, net
debt as at 30 June was $19.2m (FY22: $24.2m).
The Group uses HSBC post-dispatch trade loans and invoice
financing facilities as an additional working capital lever. As at
30 June 2023 the amounts drawn on the Group's trade loans and
invoice finance facilities were $15.5m (FY22: $16.7m) against a
total facility of c.$22m. Net finance costs increased to $1.1m (H1
2022: $0.8m) reflecting significantly higher UK interest rates.
On 27 April 2023 the Group announced a placing, raising total
gross proceeds of $9.6m. The net proceeds of the fundraise of $9.1m
have predominately been used to strengthen the balance sheet and to
provide the Group with the flexibility to take advantage of growth
opportunities. Additionally, a small portion of the net proceeds
has been deployed to realise further efficiency savings, including
through investment in injection moulding production processes and
robotics .
Risks
The Board considers strategic and external, operational,
financial and compliance risks and monitors them on a regular
basis. Key risks and their mitigations were included on pages 32 to
37 of the 2022 Annual Report published on 15 June 2023 and there
are no material changes since that date.
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Note Unaudited Unaudited Year to
6 months 6 months to 31 December
to 30 June 30 June 2022
2023 2022 (Restated)
$'000 $'000 $'000
Revenue 2,3 68,152 54,195 124,269
Cost of sales (50,307) (43,657) (109,407)
________ ________ ________
Gross profit 17,845 10,538 14,862
Distribution expenses (2,692) (4,007) (5,059)
Other operating income 312 242 650
Administrative expenses (13,022) (14,959) (27,287)
________ ________ ________
EBITDA (before non-underlying
items) 6,671 (4,554) (7,129)
Depreciation and amortisation (2,991) (2,973) (5,422)
Non-underlying items 4 (1,237) (659) (4,283)
--------------------------------------- ----- ------------ ----------------- -------------
Operating Profit/(Loss) 2,443 (8,186) (16,834)
Finance income - - 10
Finance expenses (1,138) (824) (1,997)
________ ________ ________
Profit/(Loss) before tax 1,305 (9,010) (18,821)
Taxation (Charge)/Credit (351) 1,260 (3,054)
________ ________ ________
Profit/(Loss) for the period
from continuing operations 954 (7,750) (21,875)
________ ________ ________
Discontinued Operations
Profit/(Loss) for the period 16 (367) (671) (2,789)
from discontinued operations ________ ________ ________
Profit/(Loss) for the period 587 (8,421) (24,664)
attributable to equity shareholders ________ ________ ________
Other comprehensive income
Items that are or may be reclassified
subsequently to profit or loss:
Foreign currency translation
differences - foreign operations (1,180) (360) (927)
________ ________ ________
Other comprehensive loss for
the period, net of income tax (1,180) (360) (927)
________ ________ ________
Total comprehensive loss for
the period (593) (8,781) (25,591)
________ ________ ________
From continuing operations:
Basic earnings/(loss) per share 5 1.70c (15.2)c (42.9)c
Diluted earnings/(loss) per share 5 1.70c (15.2)c (42.9)c
From continuing and discontinued
operations
Basic earnings/(loss) per share 5 1.00c (16.5)c (48.4)c
Diluted earnings/(loss) per share 5 1.00c (16.5)c (48.4)c
Consolidated Balance Sheet
Note Unaudited Unaudited As at 31
as at 30 as at 30 June December
June 2023 2022 (Restated) 2022
$'000 $'000 $'000
Non-current assets
Goodwill 1,259 2,417 1,259
Intangible assets 392 575 528
Property, Plant and Equipment 6 6,199 7,839 7,302
Right of use assets 9,008 8,603 10,769
Deferred tax assets - 3,508 -
________ ________ ________
16,858 22,942 19,858
________ ________ ________
Current assets
Inventories 7 25,265 34,885 27,342
Tax receivable 344 1,134 227
Trade and other receivables 8 32,971 40,852 26,880
Cash and cash equivalents 14 7,592 5,835 4,829
________ ________ ________
66,172 82,706 59,278
________ ________ ________
Total assets 83,030 105,648 79,136
________ ________ ________
Current liabilities
Other interest-bearing loans
and borrowings 9 (16,601) (26,057) (17,058)
Trade and other payables 10 (43,695) (50,262) (45,924)
Derivative financial liabilities (189) (1,008) (671)
Tax payable (1,049) (516) (771)
Lease liabilities 9 (2,311) (2,050) (3,022)
________ ________ ________
(63,845) (79,893) (67,446)
________ ________ ________
Non-current liabilities
Derivative financial liabilities - - (95)
Lease liabilities 9 (7,905) (6,436) (8,900)
Deferred tax liabilities (175) - (118)
________ ________ ________
(8,080) (6,436) (9,113)
________ ________ ________
Total liabilities (71,925) (86,329) (76,559)
________ ________ ________
Net assets 11,105 19,319 2,577
________ ________ ________
Equity attributable to equity holders of the
parent
Share capital 17 484 342 342
Share premium 17 63,696 54,717 54,717
Translation reserve (1,527) 220 (347)
Merger reserve (35,812) (35,812) (35,812)
(Deficit)/ Retained earnings (15,736) (148) (16,323)
________ ________ ________
Total equity 11,105 19,319 2,577
________ ________ ________
Consolidated Statement of Changes in Equity
Share Share Translation Retained Merger Total
capital Premium reserve Earnings reserve equity
$'000 $'000 $'000 $'000 $'000 $'000
1 January
2022
342 54,717 580 7,430 (35,812) 27,257
Hyperinflationary
monetary adjustment
relating to 911 911
2021
Restated
at 1 Jan 2022 342 54,717 580 8,341 (35,812) 28,168
Total comprehensive income for the year
Loss for the
year - - - (24,664) - (24,664)
Other comprehensive
income - - (927) - - (927)
________ ________ ________ ________ ________ ________
Total comprehensive
income for
the year - - (927) (24,664) - (25,591)
________ ________ ________ ________ ________ ________
Balance at
31 December
2022 342 54,717 (347) (16,323) (35,812) 2,577
________ ________ ________ ________ ________ ________
Share Share Translation Retained Merger Total
capital Premium reserve earnings reserve equity
$'000 $'000 $'000 $'000 $'000 $'000
1 January
2023 342 54,717 (347) (16,323) (35,812) 2,577
Total comprehensive income for the period
Profit for
the period - - - 587 - 587
Other comprehensive
income/(loss) - - (1,180) - - (1,180)
________ ________ ________ ________ ________ ________
Total comprehensive
income for
the period - - (1,180) 587 - (593)
Share Issue 142 8,979 - - - 9,121
________ ________ ________ ________ ________ ________
Balance
at 30 June
2023 484 63,696 (1,527) (15,736) (35,812) 11,105
________ ________ ________ ________ ________ ________
Consolidated statement of cash flows
Unaudited Unaudited Year
6 months to 30 6 months to 31
June 2023 to 30 December
June 2022 2022
$'000 $'000 $'000
Cash flows from operating activities
Profit/(Loss) for the period 954 (7,750) (21,875)
Loss from discontinued operations (367) (671) (2,789)
________ ________ ________
Profit/(Loss) for the period after tax 587 (8,421) (24,664)
Adjustments for:
Depreciation and amortisation 2,991 2,972 5,947
Impairment of Goodwill - - 1,158
Finance income - - (10)
Prior period adjustment (See Note 15) - 681 -
Financial expense 942 881 2,090
Net fair value losses recognised in
Profit or Loss - - 750
Impairment of lease assets - - 429
Loss on disposal of Property, Plant
and Equipment 329 246 825
Gain on renegotiation of lease - - (168)
Taxation refund/ (paid) 353 (1,485) 3,103
Monetary gain from hyperinflationary
adjustments (429) 354 665
________ ________ ________
4,773 (4,772) (9,875)
Decrease/(increase) in trade and other
receivables (9,178) 4,709 14,786
(Increase)/decrease in inventories 3,212 (54) 1,104
(Decrease)/increase in trade and other
payables (968) (7,748) (618)
Tax refund - - 145
________ ________ ________
Net cash generated/(used in) operating
activities (2,161) (7,865) 5,542
________ ________ ________
Cash flows from investing activities
Purchase of intangible assets - (364) (633)
Purchase of property, plant and equipment (427) (1,779) (2,864)
Interest received - - 10
________ ________ ________
Net cash from/(used in) investing activities (427) (2,143) (3,487)
________ ________ ________
Cash flows from financing activities
Repayment of loan facilities - (2,500) (2,500)
Share issue (net of transaction costs) 9,120 - -
Principal repayment of lease liabilities (1,018) (1,693) (3,607)
Interest paid (945) (664) (2,090)
Repayment of term loan - - -
Repayment of CLBILs - - -
Receipt/(repayment) of trade loans (1,166) 3,680 4,131
Receipt/(repayment) of invoice finance (41) 2,331 (3,880)
________ ________ ________
Net cash from/(used in) financing activities 5,950 1,154 (7,946)
________ ________ ________
Net (decrease)/increase in cash and
cash equivalents 3,362 (8,854) (5,891)
Cash and cash equivalents at beginning
of period 4,471 9,807 9,807
Effect of exchange rate fluctuations
on cash held (1,350) 1,345 555
________ ________ ________
Cash and cash equivalents at end of
period (see Note 14) 6,483 2,298 4,471
________ ________ ________
Notes forming part of the consolidated unaudited financial
statements
1 Accounting policies
Introduction
The consolidated condensed interim financial statements have
been prepared in accordance International Financial Reporting
Standards currently in force and in conformity with the
requirements of the Companies Act 2006.
These consolidated condensed interim financial statements have
been prepared on the basis of the same accounting policies as per
the audited financial statements for the year ended 31 December
2022. The interim financial statements, which have been prepared in
accordance with International Accounting Standard 34 (IAS 34), are
unaudited and do not constitute statutory accounts within the
meaning of section 434 of the Companies Act 2006. Statutory
accounts for the year ended 31 December 2022, prepared in
accordance with IFRS, have been filed with Companies House. The
Auditors' Report on these accounts was unqualified, did not include
any matters to which the Auditors drew attention by way of emphasis
without qualifying their report and did not contain any statements
under section 498 of the Companies Act 2006.
The consolidated condensed interim financial statements are for
the six months to 30 June 2023. The interim consolidated financial
information does not include all the information and disclosures
required in the annual financial statements and should be read in
conjunction with the Group's annual financial statements for the
year ended 31 December 2022, which were prepared in accordance with
IFRS's and in conformity with the requirements of the Companies Act
2006.
The Group's business is not subject to significant seasonal
variations.
The unaudited financial statements are prepared on the
historical cost basis except that the derivative financial
instruments are stated at their fair value and the
hyperinflationary adjustments are applied to the results of our
Turkish subsidiary.
Going Concern
The Directors have assessed the Group's business activities and
the factors likely to affect future performance in light of the
current and anticipated trading conditions. In making their
assessment the Directors have reviewed the Group's latest budget,
current trading, available debt facilities, proceeds from the
recent fundraising and considered reasonably plausible downside
scenarios and mitigating actions.
The Directors are confident that, after taking into account
existing cash and debt facilities available to the Group and the
net proceeds of the fundraising, the Group has adequate resources
in place to continue in operational existence for a period of at
least 12 months from the date of approval of these financial
statements being to September 2024. In making their assessment the
Directors have considered the key factors listed below:
Fundraising
On 27 April 2023 the Group announced that it undertook a
fundraise and achieved total gross proceeds of $9.6m (before
transaction costs of $0.5m). The net proceeds of the fundraise of
approximately $9.1m were received mid-May 2023 and were used to
strengthen the balance sheet and to provide the Group with
flexibility to take advantage of growth opportunities.
Additionally, a small portion of the net proceeds was deployed to
realise further efficiency savings including through investment in
injection moulding production processes and robotics.
HSBC facilities
The Group uses HSBC post-dispatch trade loans and invoice
financing facilities as an additional working capital lever. During
H1 23 these facilities were provided on a rolling 3-months basis.
However, in light of the improved trading, the facilities have been
formally renewed for a longer period, until 30 April 2024. The
Directors have recently commenced the refinancing process to secure
suitable funding options and believe that should the HSBC
facilities be withdrawn after 30 April 2024, alternative funding
options would be available to the Group.
As at 30 June 2023 the amounts drawn on the Group's trade loans
and invoice finance facilities were $15.5m (FY22: $16.7m) against a
total facility of c.$22m.
Scenario modelling
As a result of losses incurred during FY22, the Group has
carefully considered its future liquidity position. In stress
testing the forecast cash flows of the business, the Directors
modelled a base case, several downside scenarios, a combined
downside scenario and a set of mitigating actions to the combined
downside scenario. The base case was modelled on a prudent basis,
assuming flat revenues and using the production schedules and cost
estimates. Positive cash headroom is maintained under the base case
scenario.
Taking into account the trading conditions which existed during
FY22 and outlook, the Directors have identified certain specific
key risks to the base case assumptions and have modelled the
scenarios as follows:
-- Reduction in revenue risk: the entire market is down by 10%
due to global economic recession, reflecting a scenario similar to
the 2008-2009 downturn;
-- Increased cost of sales risk: reflecting the impact of
inflation in cost of sales by 5% and inability to recover from
customers;
-- Stockholding risk: reflecting a scenario caused by disruption
in customer schedules and therefore the need to hold more than
normal stock levels required in the distribution centre's;
-- Availability of HSBC facilities: reflecting a withdrawal of
HSBC facilities from 30 April 2024 and failure to replace the
facilities with equivalent facilities on similar terms.
In addition, the directors have modelled the first three risks
above into a combined downside scenario and considered several
controllable mitigating actions. The principal mitigating actions
have been modelled as managing buffer stock levels and payment
terms with customers and suppliers. Such mitigating actions are
within management's control and the business closely monitors
appropriate lead indicators to implement these actions in
sufficient time to achieve the required cash preservation
impact.
Despite the combined impact of the above downside assumptions,
the stress testing model demonstrates that the business is able to
maintain a positive cash headroom.
As a result of the above considerations, the Directors consider
that the Group has adequate resources in place for at least 12
months form the date of the approval of H1 23 financial statements
and have therefore adopted the going concern basis of accounting in
preparing the financial statements.
Revenue
Revenue is measured at the fair value of the consideration
received or receivable. Provided it is probable that the economic
benefits will flow to the Group and the revenue and costs, if
applicable, can be measured reliably, revenue is recognised in
profit or loss as follows:
Serial production goods are recognised as sold at a point in
time when control is passed to the customer, which depending on the
incoterms (a series of pre-defined commercial terms published by
the International Chamber of Commerce relating to international
commercial law) can be when they are delivered to the customer site
or when the customer collects them.
Revenue from Tooling and the provision of associated services is
recognised at a point in time when the performance obligations in
the contract are satisfied and control is passed to the customer,
which is based on the date of issue of the parts submission warrant
(PSW) or a similar approval from customers, or other evidence of
the commencement of serial production. Monies received from
customers in advance of completing the performance obligations are
recognised as contract liabilities as at the balance sheet date and
released to revenue when the related performance obligations are
satisfied at a point in time.
Discounts on the serial production contracts are considered as
one off and agreed with the customers as part of the negotiation
and as per the terms of the contract, they are either paid in
advance or otherwise. Discounts paid in advance are recognised as a
prepayment and recognised as a debit to revenue in the period in
which the related revenue is recognised. All other discounts are
recognised as a debit to revenue based on the period in which the
related revenues are recognised.
Revenue excludes value added tax or other sales taxes and is
after deduction of any trade discounts.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and accumulated impairment losses.
Where parts of an item of property, plant and equipment have
different useful lives, they are accounted for as separate items of
property, plant and equipment.
Depreciation is charged to the profit and loss account on a
straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. The estimated useful
lives are as follows:
Assets under construction - not depreciated
Plant and equipment - 2-5 years straight line
Furniture, fixtures - 2-5 years straight line
and equipment
Motor vehicles - 2-5 years straight line
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is based on the first-in first-out principle and
includes expenditure incurred in acquiring the inventories,
production or conversion costs and other costs in bringing them to
their existing location and condition. In the case of manufactured
inventories and work in progress, cost includes an appropriate
share of overheads based on normal operating capacity.
Net realisable value is the value that would arise on sale of
stock in the normal course of business, minus a reasonable
estimation of selling costs.
Foreign currency
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Foreign
currency monetary assets and liabilities are translated at the
rates ruling at the reporting date. Exchange differences arising on
the retranslation of unsettled monetary assets and liabilities are
recognised immediately in profit or loss. Exchange differences
arising on the retranslation of the foreign operation are
recognised in other comprehensive income and accumulated in the
foreign exchange reserve.
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on consolidation, are
translated to the Group's presentational currency US Dollars at
foreign exchange rates ruling at the balance sheet date. The
revenues and expenses of foreign operations are translated at an
average rate for the period where this rate approximates to the
foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve. When a foreign
operation is disposed of, such that control is lost, the entire
accumulated amount in the foreign currency translation reserve, is
reclassified to profit or loss as part of the gain or loss on
disposal. When the Group disposes of only part of its interest in a
subsidiary that includes a foreign operation while still retaining
control, the relevant proportion of the accumulated amount is
reattributed to non-controlling interests. When the Group disposes
of only part of its investment in an associate that includes a
foreign operation while still retaining significant influence, the
relevant proportion of the cumulative amount is reclassified to
profit or loss.
Classification of financial instruments issued by the Group
Financial instruments issued by the Group are treated as equity
only to the extent that they meet the following two conditions:
(a) they include no contractual obligations upon the Company (or
Group as the case may be) to deliver cash or other financial assets
or to exchange financial assets or financial liabilities with
another party under conditions that are potentially unfavourable to
the Group; and
(b) where the instrument will or may be settled in the company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the company's own
equity instruments or is a derivative that will be settled by the
company's exchanging a fixed amount of cash or other financial
assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
any issues are classified as a financial liability.
Non-derivative financial instruments
Financial assets and liabilities are recognised when the Group
becomes party to the contractual provisions of the instrument.
Non-derivative financial instruments comprise trade and other
receivables, cash and cash equivalents, loans and borrowings, and
trade and other payables.
Trade and other receivables
Trade and other receivables are initially measured at their
transaction price. Trade receivables and other receivables are held
to collect the contractual cash flows which are solely payments of
principal and interest. Therefore, these receivables are
subsequently measured at amortised cost using the effective
interest rate method.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition they are measured at amortised
cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
cash flow statement.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair
value less attributable transaction costs. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised
cost using the effective interest method. See Note 9 for full
details of classes of interest-bearing borrowings.
Effective interest rate
The 'effective interest' is calculated using the rate that
exactly discounts estimates future cash payments or receipts
(considering all contractual terms) through the expected life of
the financial asset or financial liability to its carrying amount
before any loss allowance.
Share based payments
Where share options are awarded to employees, the fair value of
the options at the date of the grant is charged to the income
statement over the vesting period. Non-market vesting conditions
are taken into account by adjusting the number of equity
instruments expected to vest at each balance sheet date so that,
ultimately, the cumulative amount recognised over the vesting
period is based on the number of options that eventually vest.
Hyperinflation accounting
The Group has applied IAS 29, Financial Reporting in
Hyperinflationary Economies, for its subsidiary in Türkiye, whose
functional currency has experienced a cumulative inflation rate of
more than 100%, over the past three years. Assets, liabilities, the
financial position and results of foreign operations in
hyperinflationary economies are translated to US Dollar at the
exchange rate prevailing at the reporting date. The exchange
differences are recognised directly in other comprehensive income
and accumulated in the translation reserve in equity. Such
translation differences are reclassified to profit or loss only on
disposal or partial disposal of the overseas operation. Prior to
translating the financial statements of foreign operations, the
non-monetary assets and liabilities and comprehensive income (both
previously stated at historic cost) are restated to account for
changes in the general purchasing power of the local currencies
based on the consumer price index published by the Turkish
Statistical Institute. The consumer price index for the six months
ended 30 June 2023 increased by 12%.
The Group's consolidated financial statements for the period
include the results and financial position of its Turkish
operations restated to the measuring unit current at the end of
each period. Comparative amounts presented in the consolidated
financial statements have not been restated. Hyperinflationary
accounting needs to be applied as if Türkiye has always been a
hyperinflationary economy. In the year of initial application, it
was CT Automotive Group's policy choice, to recognise the
differences between equity as reported at 31 December 2021 and the
equity after the restatement of the non-monetary items using the
measurement unit current at the reporting date within retained
earnings. The restatement of the non-monetary items subsequent to
this initial application have been recognised in administrative
expenses within the Consolidated Statement of Profit
and Loss. .
Revenue
2
Unaudited Unaudited
6 months 6 months Year to
to 30 June to 30 June 31 December
2023 2022 2022
$'000 $'000 $'000
Disaggregation of revenue
An analysis of turnover by type is given
below:
Sale of parts 65,811 52,272 117,289
Sale of tooling (including design and
development) 2,341 1,923 6,980
________ ________ ________
Total revenues
68,152 54,195 124,269
________ ________ ________
All revenue is derived from goods transferred at a point in
time.
An analysis of turnover by geographical market is given within
Note 3.
3 Segment information
Operating segments are reported in a manner consistent with
internal reporting provided to the Chief Operating Decision Maker
(CODM). The CODM has been identified as the management team
including the Chief Executive Officer and Chief Financial Officer.
The segmental analysis is based on the information that the
management team uses internally for the purpose of evaluating the
performance of operating segments and determining resource
allocation between segments.
The Group has 3 strategic divisions which are its reportable
segments.
The Group has the below main divisions:
1) Tooling - Design, development and sale of tooling for the
automotive industry.
2) Production - Manufacturing and distributing serial production
kinematic interior parts for the automotive industry.
3) Head office - Manages group financing and capital
management
The Group evaluates segmental performance on the basis of
revenue and profit or loss from operations calculated in accordance
with IFRS.
Unaudited 6 months ended
30 June 2023
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 2,341 65,811 - 68,152
Depreciation and amortisation - (2,991) - (2,991)
Finance expense - (928) - (928)
________ ________ ________ ________
Group and segment Profit/(Loss)
before tax and discontinued
operations 295 5,088 (4,078) 1,305
________ ________ ________ ________
Unaudited 6 months ended 30 June 2022
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 1,923 52,272 - 54,195
Depreciation and amortisation - (2,973) - (2,973)
Finance expense - (824) (57) (881)
________ ________ ________ ________
Group and segment (Loss)/profit
before tax and discontinued
operations (1,035) (2,782) (5,193) (9,010)
________ ________ ________ ________
Year ended 31 December 2022
Tooling Production Head office Total
$'000 $'000 $'000 $'000
Revenue
Total revenue from customers 6,980 117,289 - 124,269
Depreciation and amortisation - (5,422) - (5,422)
Finance expense - (1,939) (58) (1,997)
________ ________ ________ ________
Group and segment (Loss)/profit
before tax and discontinued
operations 1,601 866 (21,288) (18,821)
________ ________ ________ ________
External revenue by location
of customers
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 June to 30 June 2022
2023 2022
$'000 $'000 $'000
UK 11,760 7,119 16,603
US 13,414 14,376 27,640
China 8,071 8,464 18,415
Türkiye 6,627 5,619 12,806
Czechia 14,020 10,767 21,399
Brazil 1,956 2,021 3,567
Spain 1,190 2,708 4,692
Thailand 692 1,023 2,378
Other 10,422 2,098 16,769
__________ __________ __________
68,152 54,195 124,269
__________ __________ __________
4 Non-underlying items
Unaudited Unaudited Year
6 months 6 months ended
to 30 June to 30 June 31 December
2023 2022 2022
$'000 $'000 $'000
AIM listing fees - 31 31
Release of previously capitalised tooling
overheads 345 - -
Restructuring and margin improvement
costs 884 - -
Impairment of Goodwill - - 1,158
Impact of applying IAS29 8 563 665
China housing fund contribution - - 453
Start-up costs in Mexico - - 1,738
Irrecoverable excess freight costs - 65 238
_______ _______ _______
Total 1,237 659 4,283
_______ _______ _______
Non-underlying items are items, which, due to their one-off,
non-trading and non-recurring nature, have been separately
classified by the Directors in order to draw them to the attention
of the reader and allow for greater understanding of the operating
performance of the Group. Each item has been identified and
explained below:
Non-underlying items of $884,000 were incurred in connection
with restructuring and delivering margin improvement initiatives.
These costs included redundancies while optimising our
manufacturing footprint in China and Türkiye of $71,000, a write
down of unviable stock as part of destocking and distribution
centre rationalisation programme of $350,000 and a $462,000 charge
in relation to previously completed tooling projects.
The Group has been undertaking an exercise to improve reporting
and governance. This has resulted in a change in the method to
estimate tooling overheads, which will result in the release of
previously capitalised production overheads in relation to tooling
projects. The amount for the current financial period is
$345,000.
Effective from 1 January 2022, the Group has applied IAS 29,
Financial Reporting in Hyperinflationary Economies for its
subsidiary in Türkiye. The impact of these adjustments in the
period to 30 June 2023 increased reported revenue by $477,000 (H1
22: $675,000), increased cost of sales by $326,000 (H1 22:
$1,039,000), increased administrative expenses by $159,000 (H1 22:
$201,000) and increased other income by $nil (H1 22: $2,000).
5 Earnings/(Loss) per share
Unaudited Unaudited Year ended
6 months to 6 months to 31 December
30 June 2023 30 June 2022 2022
(restated)
Number Number Number
Weighted average number of equity
shares (Note 17) 56,599,354 50,933,289 50,933,289
$ $ $
Profit/(Loss) for the period
from continuing operations 954,000 (7,750,000) (21,875,000)
Cents Cents Cents
Basic and Diluted Profit/(Loss) 1.7 (15.2) (42.9)
per share from continuing operations
Basic and Diluted Profit/(Loss) (0.7) (1.3) (5.5)
per share from discontinued
operations
There are contingently issuable shares in existence (see Note
12) that can result in diluted Earnings/(Loss) per share being
different from basic Earnings/(Loss) per share in 2023 and
2022.
The vesting conditions of these contingently issuable shares
includes earnings-based targets for the Group for the financial
years ending 31 December 2023, 31 December 2024 and 31 December
2025. For the period ending 30 June 2023, earnings levels are below
the threshold required under the share options vesting conditions.
If this level of earnings continued to the years to which the
vesting conditions relate, then the options would not meet their
vesting conditions. IAS 33 requires that the number of contingently
issuable shares included in the calculation of diluted earnings per
share is based on the number of shares issuable if the end of the
reporting period were the end of the contingency period and
therefore no adjustments have been made for these because not all
necessary conditions of the contingently issuable shares have been
satisfied.
6 Property, plant and equipment
Plant and Fixtures Motor
equipment and fittings vehicles Total
$'000 $'000 $'000 $'000
Cost
Balance as at 1 January
2022 15,266 3,879 34 19,179
Hyperinflationary adjustment 406 179 - 585
Additions 1,811 1,053 - 2,864
Disposals (2,654) (464) (11) (3,129)
Effect of movements in
foreign exchange (1,484) (372) - (1,856)
________ ________ ________ ________
Balance as at 31 December
2022 (audited)
Hyperinflationary adjustment 13,345 4,275 23 17,643
on assets b/fwd to June
2023 995 737 - 1,732
________ ________ ________ ________
Balance at 1 January 2023 14,340 5,012 23 19,375
Additions 240 81 106 427
Disposals (546) - - (546)
Re-classifications 1,079 (1,221) 142 -
Reclassifications from
ROU assets (834) - - (834)
Hyperinflationary adjustment 2 5 - 7
Effect of movements in
foreign exchange (758) (438) (11) (1,207)
________ ________ ________ ________
Balance as at 30 June
2023 (unaudited) 13,523 3,439 260 17,222
________ ________ ________ ________
Depreciation
Balance at 1 January 2022 8,740 2,724 34 11,498
Hyperinflationary adjustment 146 115 - 261
Depreciation charge for
the period 367 1,406 - 1,773
Disposals (1,826) (429) (11) (2,266)
Effect of movements in
foreign exchange (719) (206) - (925)
________ ________ ________ ________
Balance as at 31 December
2022 (audited)
Hyperinflationary adjustment 6,708 3,610 23 10,341
on assets b/fwd to June
2023 756 494 - 1,250
________ ________ ________ ________
Balance as at 1 January
2023 7,464 4,104 23 11,591
Depreciation charge for
the period 280 443 95 818
Disposals (435) - - (435)
Reclassifications 743 (850) 107 -
Reclassifications from
ROU assets (165) - - (165)
Hyperinflationary adjustment 39 28 - 67
Effect of movements in
foreign exchange (558) (286) (9) (853)
________ ________ ________ ________
Balance as at 30 June
2023 (unaudited) 7,368 3,439 216 11,023
________ ________ ________ ________
Net book value
At 31 December 2022 (audited) 6,637 665 - 7,302
________ ________ ________ ________
At 30 June 2023 (unaudited) 6,155 - 44 6,199
________ ________ ________ ________
Inventories
7
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
(restated)
$'000 $'000 $'000
Raw materials and consumables 6,277 9,336 6,605
Work in progress 8,773 7,325 7,735
Finished goods 10,215 18,224 13,002
_______ _______ _______
25,265 34,885 27,342
_______ _______ _______
Trade and other receivables
8
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Trade receivables 22,994 26,927 16,167
Other debtors 2,477 566 2,465
Loan receivables - - -
________ ________ ________
25,471 27,493 18,632
Prepayments and accrued income 7,500 13,359 8,248
________ ________ ________
Total trade and other receivables 32,971 40,852 26,880
________ ________ ________
The carrying value of trade and other receivables classified at
amortised cost approximates fair value.
The Group applies the IFRS 9 simplified approach to measuring
expected credit losses using a lifetime expected credit loss
provision to trade receivables. The expected loss rates are based
on the Group's historical credit losses. Due to the nature of the
Group's customers no credit loss provision has been made at the
period end.
9 Loans and borrowings
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Non-current liabilities
Non-current portion of finance lease
liabilities (7,905) (6,436) (8,900)
________ ________ ________
(7,905) (6,436) (8,900)
________ ________ ________
Current liabilities
Current portion of secured bank loans (8,416) (9,132) (9,583)
Unsecure bank overdraft (1,109) (3,537) (358)
Invoice finance (7,076) (13,388) (7,117)
________ ________ ________
(16,601) (26,057) (17,058)
________ ________ ________
Current portion of finance lease liabilities (2,311) (2,050) (3,022)
________ ________ ________
(18,912) (28,107) (20,080)
________ ________ ________
(26,817) (34,543) (28,980)
________ ________ ________
10 Trade and other payables
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Current
Trade payables 20,484 26,544 21,793
Non-trade payables and accrued expenses 11,077 11,418 10,266
Employee social security and taxes 1,605 661 2,449
Contract liabilities 2,689 7,112 4,118
Other payables 7,840 4,527 7,298
________ ________ ________
43,695 50,262 45,924
________ ________ ________
11 Related parties
Key Management personnel are those persons having authority and
responsibility for planning, directing and controlling the
activities of the Group, including the Directors of the
Company.
The compensation of key management personnel (including the
directors) is as follows:
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 to 30 June 2022
June 2023 2022
$'000 $'000 $'000
Key management remuneration including
social security costs 783 646 1,240
Company contributions to money purchase
pension plans 9 5 10
________ ________ ________
792 651 1,250
________ ________ ________
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 to 30 June 2022
June 2023 2022
$'000 $'000 $'000
Directors' remuneration 595 646 1,099
Company contributions to money purchase
pension plans 4 5 7
________ ________ ________
599 651 1,106
________ ________ ________
12 Share options
During 2022 CT Automotive Group PLC granted share options to 4
individuals. Subject to vesting conditions, the Directors will have
the option to acquire a total of 3,022,852 Ordinary Shares at an
exercise price of GBP0.005 per share.
The options will vest in 3 equal tranches on 23 December 2024,
23 December 2025 and 23 December 2026 subject to vesting conditions
based on earnings-based targets for the financial years ended 31
December 2023, 31 December 2024 and 31 December 2025.
As David Wilkinson left the Group in April 2023, 1,018,665
options which were granted to him during 2022 were forfeited in
2023.
As at 30 June 2023 2,004,187 share options are outstanding.
13 Alternative performance measures
Alternative Performance Measures (APMs) are considered by the Directors
to better allow the readers of the accounts to understand the underlying
performance of the Group. The Directors also monitor these APMs
to assess financial performance throughout the period.
The APMs used by the Directors include:
* Underlying EBITDA - calculated as EBITDA adjusted for
non- underlying items
* Underlying EBITDA margin - calculated as underlying
EBITDA divided by revenue in the period
* Underlying operating profit - calculated as Operating
profit/(loss) adjusted for non-underlying items
* Underlying operating profit margin - calculated as
underlying operating profit divided by revenue in the
period
* Underlying profit before tax - calculated as Profit
before tax adjusted for non-underlying items
* Underlying profit before tax margin - calculated as
underlying profit before tax divided by revenue in
the period
EBITDA is calculated using Operating profit/(loss) before interest,
taxes, depreciation and amortisation.
Detail of each of the non-underlying items is disclosed in Note
4.
Underlying EBITDA and underlying EBITDA margin
Unaudited Unaudited Year ended
6 months 6 months 31
to 30 to 30 December
June June 2022
2023 2022
$'000 $'000 $'000
Underlying EBITDA 6,671 (4,554) (7,129)
Non- underlying items
* AIM listing fees - (31) (31)
* Release of previously capitalised tooling overheads (345) - -
(884) - -
* Restructuring and margin improvement costs
* Impairment of Goodwill - - (1,158)
* Impact of applying IAS 29 (8) (563) (665)
* China housing fund contribution - - (453)
* Start-up costs in Mexico - - (1,738)
* Irrecoverable excess freight costs - (65) (238)
_______ _______ _______
EBITDA 5,434 (5,213) (11,412)
_______ _______ _______
Underlying EBITDA margin 9.8% (8.4%) (5.8%)
Underlying operating Profit/(Loss) and underlying operating
profit margin
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 June to 30 June 2022
2023 2022
$'000 $'000 $'000
Underlying operating Profit/(Loss) 3,680 (7,527) (12,551)
Non-underlying items
* AIM listing fees - (31) (31)
* Release of previously capitalised tooling overheads (345) - -
(884) - -
* Restructuring and margin improvement costs
* Impairment of Goodwill - - (1,158)
* Impact of applying IAS 29 (8) (563) (665)
* China housing fund contribution - - (453)
* Start-up costs in Mexico - - (1,738)
* Irrecoverable excess freight costs - (65) (238)
_______ _______ _______
Operating Profit/(Loss) 2,443 (8,186) (16,834)
_______ _______ _______
Underlying operating Profit/(Loss)
margin 5.4% (13.9%) (10.1%)
Underlying Profit/(Loss) before tax and underlying Profit/(Loss)
before tax margin
Unaudited Unaudited Year ended
6 months 6 months 31 December
to 30 June to 30 June 2022
2023 2022
$'000 $'000 $'000
Underling Profit/(Loss) before
tax 2,542 (8,351) (14,538)
Non-underlying items
* AIM listing fees - (31) (31)
* Release of previously capitalised tooling overheads (345) - -
(884) - -
* Restructuring and margin improvement costs
* Impairment of Goodwill - - (1,158)
* Impact of applying IAS 29 (8) (563) (665)
* China housing fund contribution - - (453)
* Start-up costs in Mexico - - (1,738)
* Irrecoverable excess freight costs - (65) (238)
_______ _______ _______
Profit/(Loss) before tax 1,305 (9,010) (18,821)
_______ _______ _______
Underlying Profit/(Loss) before
tax margin 3.7% (15.4%) (11.7%)
14 Cash and cash equivalents
Cash and cash equivalents for purposes of the statement of cash
flows comprises:
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Cash and cash equivalents 7,592 5,835 4,829
Unsecured bank overdraft (1,109) (3,537) (358)
________ ________ ________
6,483 2,298 4,471
________ ________ ________
15 Prior period restatement
As part of finalising FY22 year-end accounts, the Group has identified
prior period adjustments in relation to calculating the FY21 year-end
inventory and transfer of tooling assets from the Group balance
sheet to cost of sales upon the sale to the customer. Posting
of the adjustments to FY21 year-end balance sheet had a knock-on
effect on previously announced H1 22 results.
The impact of posting the inventory adjustment resulted in an
increase in the cost of sales in the period to 30 June 2022 by
$1,111,000 and reduced inventories as at 30 June 2022 by $9,387,000.
The impact of posting the tooling adjustment resulted in the value
reported in the cost of sales for the period to 30 June 2022 reducing
by $431,000 and the value of property, plant and equipment decreasing
by $2,196,000.
Therefore, the overall impact of prior period adjustments is an
increase in the cost of sales for the period to 30 June 2022 by
$681,000 and a reduction in net assets as at 30 June 2022 by $11,583,000
with a corresponding reduction in brought forward reserves of
$10,902,000.
16 Discontinued operations
On 30 September 2022, the Group made a decision to discontinue
Chinatool Automotive Systems Limited.
The results of discontinued operations, which have been included
in the profit for the period, were as follows:
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000 $'000
Revenue - 3,027 3,985
Cost of sales - (3,629) (5,420)
Other income - 1 21
Distribution expenses - - (110)
Administrative expenses (365) (237) (1,276)
Net finance income / expense - (57) (93)
________ ________ ________
Profit before tax (365) (895) (2,739)
Attributable tax (expense)/credit (2) 224 (49)
________ ________ ________
Loss on disposal of discontinued operations (367) (671) (2,789)
________ ________ ________
There were no significant external cash inflows or outflows
during the six months ended 30 June 2023 in relation to
discontinued operations.
Assets and liabilities of Chinatool Automotive Systems have not
been classified as held for sale as at 30 June 2023 because all
short-term assets and liabilities are expected to be either settled
or transferred to continuing Group operations. These are included
within the respective Group assets and liabilities and are as
follows:
Unaudited Unaudited As at
as at 30 as at 30 31 December
June 2023 June 2022 2022
$'000 $'000s $'000
Assets
Property, plant and equipment - 166 68
Right of use assets - 727 98
Inventories - 1,250 219
Trade and other receivables 23 8,131 171
Deferred tax liability - 173 -
Cash 4 43 34
_______ _______ _______
Total assets 27 10,490 590
Liabilities
Trade and other payables (1,684) (7,786) (810)
Overdraft - (1,497) (153)
Lease liability (333) (616) (494)
Current tax liability - (91) (46)
Deferred tax liability (90) - (37)
________ _______ ________
Total liabilities (2,107) (9,990) (1,540)
________ _______ ________
Net (liabilities)/ assets (2,080) 500 (950)
________ ________ ________
17 Share capital issue
On 27 April 2023 the Group undertook a fundraise and achieved
total gross proceeds of $9,623,000 (before transaction costs of
$502,000).
The fundraising was completed through a combination of subscription
and placement of 22,664,259 new ordinary shares at an issue price
of 34 pence per share. The new ordinary shares represent approximately
44% of the existing issued share capital.
The proceeds of the fund raise have been recognised within Share
Capital ($142,000) and Share Premium ($8,979,000), after transaction
costs.
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END
IR FLFSDALIIFIV
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