TIDMSIXH
RNS Number : 5447K
600 Group PLC
22 December 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014, AS AMED (AS IT FORMS PART
OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018).
22 December 2022
The 600 Group PLC
Unaudited Interim Results for the six months ended 30 September
2022
The 600 Group PLC ("the Group"), the 600 Group plc, the
Industrial Laser Systems Business (AIM: SIXH), today announces its
unaudited interim results for the six months ended 30 September
2022.
Financial Highlights
-- Revenue up 12% to $17.0m (FY 22 H1: $15.2m)
-- Net underlying * operating loss of $0.7m (FY 22 H1: profit $0.7m)
-- Underlying * pre-tax loss of $0.8m (FY22 H1: profit $0.1m)
-- Group net debt excluding lease liabilities was $2.5m as at 30
September 2022 (31 March 2022: $17.0m) with long-term borrowings
paid down from the sale of the Machine Tool Division
Strategic & Operational Highlights
-- Completed the disposal of the Machine Tool division as the
Group refocused its strategy on the high-margin growth market of
Industrial Laser Systems
-- Continued growth in the Laser Division with revenue up 12% on the previous half year
o TYKMA Electrox has seen particularly strong growth with
revenue up 20% as it transitions from commodity products to
higher-margin custom and high-specification products
o CMS maintained its position despite not receiving any tablet
drilling machines during the previous year, making up the shortfall
from other activities and new market sectors
-- Retained focus on R&D with development of new techniques
and technology; further updates to proprietary software with
backward compatibility options
-- Good forward order book and enquiry pipeline; levels
maintained at $9.1m, excluding the large one-off $4.3m order for
four tablet drillers in CMS last year
* from continuing operations, before adjusting items .
Paul Dupee, Chairman of the Group, commented:
"The 600 Group has now completed its transformation to target
the high-margin, high-growth market of industrial laser systems.
Our top-line results for the first six months of the year were
encouraging with double-digit revenue growth and a particularly
strong performance from TYKMA Electrox. This business is
progressing well in its transition to high-specification products
with improved margins, a key reason behind the Group's revised
strategy.
"Like many engineering businesses, our profitability has been
impacted by supply issues and cost inflation resulting from the
aftermath of the Covid pandemic and conflict in Ukraine. However,
we have taken a proactive approach to manage our operations and
expect the lingering issues from extended build times to clear the
system by the end of the financial year.
"The 600 Group is a streamlined business with a low debt
profile, agile operations and a large addressable market serving
applications in key industries of the future. With highly trusted
technology solutions and a strong order book, we remain well
positioned to capture this market opportunity."
Enquiries:
The 600 Group PLC Tel: +1-407-818-1123
Paul Dupee, Executive Chairman
Instinctif Partners Tel: 0207 457 2020
Tim McCall / Joe Quinlan
Cenkos Securities plc (Nominated Adviser and Broker) Tel: 020 7397 8900
Ben Jeynes / Max Gould (Corporate Finance)
Alex Pollen / Henry Nicol (Sales)
About The 600 Group PLC
The 600 Group PLC is focused on the delivery of Industrial laser
systems which cover laser marking and processing including cutting,
drilling, ablation and a host of other niche applications in the
marking and micro machining sectors. They require no consumables
and can operate on a continuous high speed basis and can be
integrated into customers' production lines. The businesses have
their own technology and proprietary software. Customer
applications are diverse and range from aerospace to medical and
pharmaceuticals. The requirement for increased product and
component traceability is one of the market drivers.
More information on the Group can be viewed at: www.600group.com
The 600 Group Plc
Executive Chairman's Statement for the six months ended 30
September 2022
Overview
The six-month period ended 30 September 2022 began with the
completion of the sale of the Machine Tools Division for $21m on 11
April 2022 and the repayment of all $19m of the Group's debt,
including the loan notes.
The Laser Division has seen continued growth in this period with
revenue up 12% on the previous half year and particularly good
progress in the TYKMA Electrox business which is up over 20%, as it
continues the transition from commodity product to custom and high
specification. Order book levels have been maintained, excluding
the large one-off $4.3m order for four tablet drillers in CMS last
year, at $9.1m.
The Laser Division has not been immune from supply issues and
labor and input price increases during this period, as world
economies react to the aftermath of the Covid pandemic and the war
in Ukraine, which has impacted margins and overhead costs. Central
costs have increased on the prior half year with additional
resources, including new websites and marketing for all activities,
deployed to help organic growth and the search for external
synergistic developments.
Results
Revenue was up 12% at $17.0m (FY 22 H1: $15.2m) with a net
underlying operating loss (excluding adjusting items) of $0.7m (FY
22 H1: profit $0.7m).
The Group benefitted from the repayment of debt at the start of
the period with interest on borrowings and leases falling from
$0.6m in the prior six month period to $0.1m, giving an underlying
loss for the Group pre-tax, before adjusting items, of $0.8m (FY22
H1: profit $0.1m) and a loss of $0.9m (FY 22 H1: profit $0.1m)
after adjusting items.
The sale of the Machine Tools Division resulted in a profit of
$0.9m, after taking account of all costs related to the sale in the
period, which is shown in discontinued operations on the face of
the Consolidated Income Statement. There was no trading activity
for the Machine Tool Division in this period as the sale was
effective as at 31 March 2022.
Basic loss per share on continuing operations was 1.15 cents
(equivalent to 0.94p loss) per share (FY 21 H1: profit 0.14 cents
(equivalent to 0.10p profit). The underlying continuing earnings
per share (excluding adjusting items) was a 0.70c loss (equivalent
to 0.57p loss) (FY 21 H1: profit 0.09c (equivalent to 0.06p).
Given the continuing Global uncertainty, no dividend is
proposed.
Financial Position
Inventory levels have increased to support the continued uplift
in activity but also as a result of supply issues where several
months of critical components have been bought forward to secure
supply and also hedge against price increases. In addition, the
continual supply chain issues have extended manufacturing times and
increased work in progress with machines awaiting components to be
completed. Inventory overall has increase by $1.9m since 31 March
2022 to $10.0m.
Trade and other receivables have also seen an increase of $2.4m
since 31 March 2021 to $9.0m. Whilst normal trade terms for Lasers,
in particular on the custom higher specification sales, usually
benefit from a significant deposit with order which helps to keep
working capital lower, a number of orders were taken during the
pandemic in CMS with reduced margins and extended terms to cover
overheads and keep our skilled workforce together which, due to the
long lead times on manufacturing, are only just working through the
system.
Trade and other payables have decreased in the period by $0.3m
leaving the overall working capital increase at $4.6m.
As a consequence of this working capital increase and the
payment of costs relating to the Machine Tools Division disposal of
$1.3m, total net debt excluding leases at 30 September 2022 was
$2.5m against $17m at 31 March 2022 and $16.2m at 30 September
2021
Bank of America continue to be very supportive and have
maintained a working capital facilities totaling $7.5m with annual
review in August 2023. The Group remains covenant compliant.
Adjusting Items
Adjusting Items have been disclosed separately to provide a
clearer picture of the Group's underlying trading performance and
are set out in note 4. The amortisation of acquisition intangibles
relating to the acquisition of CMS of $0.2 has been recorded as an
adjusting item in operating expenses. As the loan notes were repaid
at the start of the period the related costs of $0.4m which were
being amortised have been written off in the period in financial
expense. In the prior half year period as a consequence of the
extension of the repayment date of the loan notes a credit of $0.6m
was recorded in financial income in respect of the adjustment to
the carrying value of the amortised cost. The loan note
amortization has also been recorded as an adjusting item. The loan
notes were repaid in full in April 2022.
Operating Activities
The Laser Division has continued to grow, particularly strongly
in the TYKMA Electrox business with the continued shift from
commodity products to the higher margin custom and high
specification products. CMS has maintained its position despite not
receiving any tablet drilling machines during the previous year.
This type of pharmaceutical business is particularly lumpy in
nature but the operation had made up the shortfall from other
activities and new market sectors.
The division continues to be forced to buy forward several
months of critical components to secure supply and also hedge
against price increases. Supply chain issues with delays in
receiving components, particularly in the micro processing sector,
have resulted in extended manufacturing times with re-designed
products and increased work in progress as machines await component
deliveries.
Input costs of materials and labor have both increased, driven
by market forces. Whilst sale price increases are being
implemented, a number of orders taken by CMS during the pandemic
were taken at marginally profitable levels in order to keep the
shop working and preserve our skilled workforce. Whilst the
government assistance helped during the pandemic period, due to the
extended build times on many of these products they are only now
being completed which is depressing gross margins in this business.
These products will clear the system by the end of the financial
year. In addition to lower margins, extended credit terms were also
given to customers which has resulted in increased receivables.
Once again, these non-standard terms will have worked through the
system by the end of the financial year.
The development of new techniques and technology is forefront to
the Division and the Group has continued to update its proprietary
software with backward compatibility options. This development
drive is supported by both internal R&D and the search for
appropriate bolt on acquisitions.
The results of the Division were as follows:
FY23 H1 FY22 H1
$m $m
Revenues 17.0 15.2
Operating profit* 1.15 1.79
Operating margin* 6.8% 11.8%
*from continuing operations, before adjusting items.
Summary and Outlook
The Group continued to grow and invest in its businesses in this
first six months of the financial year and has a good order book
and enquiry pipeline going into the second half of the year. Whilst
the lingering effects of work taken during the pandemic will impact
CMS in the short term, the de-risking of the Group, both
operationally and financially, as a result of the Machine Tool
Division sale has created a leaner and more focused technology
Group.
Whilst there will continue to be concerns over a recession,
COVID variants and supply chain disruption, given the continuing
good orderbook activity and backlog and the move to higher
specification and custom products, the Board believes the Group is
more resilient to market changes and this strategy will lead to
improved shareholder value in the future.
Paul Dupee
Executive Chairman
22 December 2022
The 600 Group Plc
Condensed consolidated income statement (unaudited)
For the 26 week period ended 30 September 2022
Restated
Before After Before After
Adjusting Adjusting Adjusting Adjusting Adjusting Adjusting
Items Items Items Items Items Items
26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 52 weeks
ended ended ended ended ended ended ended
30 September 30 September 30 September 30 September 30 September 30 September 31 March
2022 2 022 2 022 2021 2 021 2 021 2 022
$000 $000 $000 $000 $000 $000 $000
---------------------- ------------ ------------ ------------ ------------ -------------- ------------ --------
C ontinuing
Revenue 17,038 - 17,038 15,194 - 15,194 31,960
Cost of sales (10,149) - (10,149) (8,729) - (8,729) (18,490)
Adjusting items
in cost of
sales - - - - (74) (74) 76
Gross profit 6,889 - 6,889 6,465 (74) 6,391 13,546
Net operating
expenses (7,604) - (7,604) (5,801) - (5,801) (11,622)
Adjusting Items
in operating
expenses - (174) (174) - (149) (149) (707)
Operating
profit/(loss) (715) (174 ) (889) 664 ( 223) 441 1 ,217
Loan note amortisation
adjustment - (462) (462) - 556 556 556
------------ ------------ ------------ ------------ -------------- ------------ --------
Bank and other
interest (71 ) - (71) ( 502) - (502) (992)
Interest on
lease liabilities (31 ) - (31) (53 ) - (53) (89)
Loan note amortisation - - - - (370) (370) (530)
------------ ------------ ------------ ------------ -------------- ------------ --------
Financial
expense (102 ) (462) (564) (555 ) 186 (369) (1,055)
(Loss)/Profit
before tax (817) (636) (1,453) 109 (3 7 ) 72 162
Income tax
(charge)/credit (4) 108 104 (6) 104 98 322
---------------------- ------------ ------------ ------------ ------------ -------------- ------------ --------
(Loss)/Profit
for the period
on continuing
activities (821) (528) (1,349) 103 67 170 484
Profit on discontinued
operations - 886 886 431 1,182 1,613 785
(Loss)/Profit
for the period (821) 358 (463) 534 1,249 1,783 1,269
Continuing
EPS (0.70c) (1.15c) 0.09c 0.14c 0.41c
Continuing
Diluted (0.70c) (1.15c) 0.09c 0.14c 0.40c
Basic EPS (0.70c) (0.39c) 0.45c 1.52c 1.08c
Diluted EPS (0.70c) (0.39c) 0.45c 1.49c 1.06c
Condensed consolidated statement of
comprehensive income (unaudited)
For the 26 week period ended 30 September
2022
26 weeks 26 weeks 52 weeks
Ended Ended Ended
30 September 30 September 31 March
2022 2021 2022
$000 $000 $000
--------------------------------------------- ------------- -------------- ---------
Profit/(Loss) for the period (463) 1,783 1,269
Other comprehensive (expense)/income:
Items that will not be reclassified
to the Income Statement:
Re-measurement of the net defined benefit
asset - - (349)
Deferred taxation - - 106
--------------------------------------------- ------------- -------------- ---------
Total items that will not be reclassified
to the Income Statement: - - (243)
Items that are or may in the future
be reclassified to the Income Statement:
Foreign exchange translation differences (305) 205 903
--------------------------------------------- ------------- -------------- ---------
Total items that are or may be reclassified
subsequently to the Income Statement: (305) 205 903
--------------------------------------------- ------------- -------------- ---------
Other comprehensive income/(expense)
for the period, net of income tax (305) 205 660
Total comprehensive income/(expenses)
for the period (753) 1,988 1,929
--------------------------------------------- ------------- -------------- ---------
Condensed
consolidated
statement of
financial position
(unaudited)
As at 30 September
2022
As at As at As at
30 September 30 September 31 March
2022 2021 2022
$000 $000 $000
------------------------------------------------- ------------------------- ------------------------ ----------------
Non-current assets
Property, plant and equipment 1,827 2,918 1,842
Goodwill 13,174 13,174 13,174
Other Intangible assets 2,202 3,561 3,189
Deferred tax assets 299 4,140 236
Right of use assets 1,205 8,252 1,473
------------------------------------------------- ------------------------- ------------------------ ----------------
18,707 32,045 19,914
------------------------------------------------- ------------------------- ------------------------ ----------------
Current assets
Inventories 9,956 23,306 8,041
Trade and other receivables 8,981 9,791 6,587
Taxation 278 - 291
Deferred tax assets 99 809 99
Assets held for sale - - 31,954
Cash and cash equivalents 436 2,072 207
------------------------------------------------- ------------------------- ------------------------ ----------------
19,730 35,978 47,179
------------------------------------------------- ------------------------- ------------------------ ----------------
Total assets 38,437 68,023 67,093
------------------------------------------------- ------------------------- ------------------------ ----------------
Non-current liabilities
------------------------- ------------------------ ----------------
Employee benefits - (1,090) -
Loans and other borrowings - (12,040) (11,639)
Government Loans - (1,616) -
Lease Liabilities (809) (7,139) (1,081)
Provisions (92) (203) (174)
(901) (22,088) (12,894)
------------------------------------------------- ------------------------- ------------------------ ----------------
Current liabilities
Trade and other payables (5,997) (10,559) (6,227)
Lease Liabilities (486) (1,471) (486)
Taxation - (368) -
Provisions (178) (201) (178)
Liabilities held for sale - - (13,777)
Government Loans - (2,234) -
Loans and other borrowings (2,967) (2,398) (4,871)
------------------------- ------------------------ ----------------
(9,628) (17,231) (25,539)
------------------------------------------------- ------------------------- ------------------------ ----------------
Total liabilities (10,529) (39,319) (38,433)
------------------------------------------------- ------------------------- ------------------------ ----------------
Net assets 27,908 28,704 28,660
------------------------------------------------- ------------------------- ------------------------ ----------------
Shareholders' equity
Called-up share capital 1,807 1,803 1,803
Share premium account 3,828 3,828 3,828
Equity reserve 201 201 201
Translation reserve (6,018) (6,411) (5,713)
Retained earnings 28,090 29,283 28,541
------------------------------------------------- ------------------------- ------------------------ ----------------
Total equity 27,908 28,704 28,660
------------------------------------------------- ------------------------- ------------------------ ----------------
Consolidated statement of changes in equity (unaudited)
As at 30 September 2022
Ordinary Share
share premium Translation Equity Retained
capital account reserve reserve Earnings Total
$000 $000 $000 $000 $000 $000
----------------------------- -------- ------- ----------- ------- -------- ------
At 3 1 March 2021 1,803 3,828 (6,616) 201 27,462 26,678
----------------------------- -------- ------- ----------- ------- -------- ------
Profit for the period - - - - 1,783 1,783
Other comprehensive income:
Foreign currency translation - - 205 - - 205
Total comprehensive income - - 205 - 1,783 1,988
----------------------------- -------- ------- ----------- ------- -------- ------
Transactions with owners:
Credit for share-based
payments - - - - 38 38
-------- ------- ----------- ------- -------- ------
Total transactions with
owners - - - - 38 38
----------------------------- -------- ------- ----------- ------- -------- ------
At 30 September 2021 1,803 3,828 (6,411) 201 29,283 28,704
----------------------------- -------- ------- ----------- ------- -------- ------
Loss for the period - - - - (514) (514)
Other comprehensive income:
Foreign currency translation - - 698 - - 698
Net defined benefit movement - - - - (349) (349)
Deferred tax - - - - 106 106
-------- ------- ----------- ------- -------- ------
Total comprehensive income - - 698 - (757) (59)
----------------------------- -------- ------- ----------- ------- -------- ------
Transactions with owners:
----------------------------- -------- ------- ----------- ------- -------- ------
Credit for share-based
payments - - - - 15 15
----------------------------- -------- ------- ----------- ------- -------- ------
Total transactions with
owners - - - - 15 15
-------- ------- ----------- ------- -------- ------
At 3 1 March 2022 1,803 3,828 (5,713) 201 28,541 28,660
----------------------------- -------- ------- ----------- ------- -------- ------
loss for the period - - - - (463) (463)
Other comprehensive income:
Foreign currency translation - - (305) - - (305)
Total comprehensive income - - (305) - (463) (768)
----------------------------- -------- ------- ----------- ------- -------- ------
Transactions with owners:
Issue of shares (employee 4 - - - - 4
options)
Credit for share-based
payments - - - - 12 12
-------- ------- ----------- ------- -------- ------
Total transactions with
owners 4 - - - 12 16
----------------------------- -------- ------- ----------- ------- -------- ------
At 30 September 2022 1,807 3,828 (6,018) 201 28,090 27,908
----------------------------- -------- ------- ----------- ------- -------- ------
Condensed consolidated cash flow statement (unaudited)
For the 26 week period ended 30 September 2022
26 weeks 26 weeks ended 52 weeks
ended ended
30 September 30 September 31 March
2022 2021 2022
$000 $000 $000
-------------------------------------------- ------------- --------------- ---------
Cash flows from operating activities
Profit/ (loss) for the period (463) 1 ,783 1,269
Adjustments for:
Amortisation of intangible assets 174 207 251
Depreciation 295 383 783
Depreciation of IFRS16 Right of use
assets 268 637 1,312
Net financial expense/(income) 102 527 1,371
PPP Funding forgiven - - (2,297)
Non-cash adjusting items 636 74 406
(Profit)/loss on disposal of fixed
assets/ assets held for sale (8 86) 1 9 -
Equity share option expense 12 38 53
Income tax expense/(credit) ( 104) ( 1,089) 243
-------------------------------------------- ------------- --------------- ---------
Operating cash flow before changes
in working capital and provisions 34 2,57 9 3,391
(Increase) /decrease in trade and other
receivables (2,394) (1,280) (3,944)
(Increase)/decrease in inventories (1,915) (5,519) (3,801)
(Decrease)/increase in trade and other
payables (321) 2,274 2,915
Employee benefit contributions - (60) (60)
Cash generated from/(used in) operations (4,596) (2,006) (1,499)
Interest paid (71) (535) (1,069)
Lease interest (53) (185) (311)
Net cash flows from operating activities (4,720) (2,726) (2,879)
-------------------------------------------- ------------- --------------- ---------
Cash flows from investing activities
Interest received - 7 24
Proceeds net of costs from sale of
net Assets held for sale / property 20,042 - 225
Purchase of property, plant and equipment (181) (531) (780)
Development expenditure capitalised - (58) (54)
Net cash from investing activities 19,861 (582) (585)
-------------------------------------------- ------------- --------------- ---------
Cash flows from financing activities
Proceeds from/(Net repayment of) external
borrowing (14,104) 1,096 1,037
Government assistance loans (1,563) - -
IFRS 16 Lease payments (295) (586) (1,460)
Net cash flows from financing activities (15,962) 510 (423)
-------------------------------------------- ------------- --------------- ---------
Net increase/(decrease) in cash and
cash equivalents (821) (2,798) (3,887)
Cash and cash equivalents at the beginning
of the period 1,291 4,997 4,997
Effect of exchange rate fluctuations
on cash held (34) (127) 181
-------------------------------------------- ------------- --------------- ---------
Cash and cash equivalents at the end
of the period 436 2,072 1,291
-------------------------------------------- ------------- --------------- ---------
The consolidated cashflow includes all activity relating to
continuing and discontinued activity
Cash in discontinued entities (assets held for sale) 1,084
Cash in continuing entities 207
Cash and cash equivalents at the end of the period 1,291
Notes relating to the condensed consolidated financial
statements
For the 26-week period ended 30 September 2022
1. Basis of preparation and accounting policies
These interim consolidated financial statements have been
prepared using accounting policies based on International Financial
Reporting Standards in conformity with the requirements of the
Companies Act 2006. They do not include all disclosures that would
otherwise be required in a complete set of financial statements and
should be read in conjunction with the 31 March 2022 Annual Report.
The financial information for the half years ended 30 September
2022 and 30 September 2021 does not constitute statutory accounts
within the meaning of Section 434 (3) of the Companies Act 2006 and
both periods are unaudited.
The annual financial statements of The 600 Group plc ('the
Group') are prepared in accordance with International accounting
standard in conformity with the requirements of the Companies Act
2006. The comparative financial information for the year ended 31
March 2022 included within this report does not constitute the full
statutory Annual Report for that period. The statutory Annual
Report and Financial Statements for 2022 have been filed with the
Registrar of Companies. The Independent Auditors' Report on the
Annual Report and Financial Statements for the year ended 31 March
2022 was unqualified, did not draw attention to any matters by way
of emphasis and did not contain a statement under 498(2) - (3) of
the Companies Act 2006.
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2022 annual financial statements.
2. SEGMENT ANALYSIS
IFRS 8 - "Operating Segments" requires operating segments to be
identified on the basis of internal reporting about components of
the Group that are regularly reviewed by the Board to allocate
resources to the segments and to assess their performance.
The chief operating decision maker has been identified as the
Board.
The Board consider there to be one operating segment being
industrial laser systems with the Machine Tool Division being
discontinued following the sale agreed in March 2022.
The Board assess the performance of the operating segments based
on a measure of operating profit/(loss). This measurement basis
excludes the effects of Special Items from the operating segments.
Head Office and unallocated represent central functions and
costs.
The following is an analysis of the Group's revenue and results
by reportable segment:
26 Weeks ended 30 September
2022
Industrial
Laser Head Office
Systems & unallocated Group Total
Segmental analysis of revenue $000 $000 $000
-------------------------------- ---------- -------------- -------------
Total revenue 17,038 - 17,038
-------------------------------- ---------- -------------- -------------
Operating profit/(loss) pre-
adjusting items 1,151 (1,866) (715)
Adjusting items - (174) (174)
Group operating profit/(loss) 1,151 (2,040) (889)
-------------------------------- ---------- -------------- -------------
Other segmental information:
Reportable segment assets 20,919 17,838 38,757
Reportable segment liabilities (6,127) (4,402) (10,529)
Intangible & Property, plant
and equipment additions 180 - 180
Depreciation and amortisation 503 234 737
-------------------------------- ---------- -------------- -------------
Continuing Discontinued
Machine
Twenty six weeks ended tools
30 September 2021 & precision
Industrial Head Office engineered Group
laser systems & unallocated Total components Total
Segmental analysis of
revenue $000 $000 $000 $000 $000
-------------------------------- -------------- -------------- ---------- ------------ --------
Total revenue 15,194 - 15,194 18,806 34,000
-------------------------------- -------------- -------------- ---------- ------------ --------
Segmental analysis of
operating profit/(loss)
before Adjusting Items 1,791 (1,127) 664 780 3,756
-------------------------------- -------------- -------------- ---------- ------------ --------
Adjusting Items (74) (149) (223) - (223)
-------------------------------- -------------- -------------- ---------- ------------ --------
Group operating profit/(loss) 1,717 (1,276) 441 780 1,221
-------------------------------- -------------- -------------- ---------- ------------ --------
Other segmental information:
Reportable segment assets 19,745 16,651 36,396 31,627 68,023
Reportable segment liabilities (8,515) (20,759) (29,274) (10,045) (39,319)
Fixed asset additions 478 71 549 40 589
Depreciation and amortisation 505 225 730 497 1,227
Continuing Discontinued
Machine
Year ended 31 March 2022 tools
& precision
Industrial Head Office engineered Group
laser systems & unallocated Total components Total
Segmental analysis of
revenue $000 $000 $000 $000 $000
-------------------------------- -------------- -------------- ---------- ------------ --------
Total revenue 31,960 - 31,960 37,024 68,984
-------------------------------- -------------- -------------- ---------- ------------ --------
Segmental analysis of
operating profit/(loss)
before Adjusting Items 4,109 (2,261) 1,848 1.908 3,756
-------------------------------- -------------- -------------- ---------- ------------ --------
Adjusting Items 76 (707) (631) (242) (873)
-------------------------------- -------------- -------------- ---------- ------------ --------
Group operating profit/(loss) 4,185 (2,968) 1,217 1,666 2,883
-------------------------------- -------------- -------------- ---------- ------------ --------
Other segmental information:
Reportable segment assets 20,466 14,673 35,139 31,954 67,093
Reportable segment liabilities (9,040) (15,475) (24,515) (13,777) (38,292)
Fixed asset additions 577 33 610 169 780
Depreciation and amortisation 924 446 1,370 976 2,346
3. NET operating expenses
30 September 30 September 31 March 2022
2022 2021
$000 $000 $000
------------ ------------ -------------
- government assistance - - 1,451
Total other operating income - - 1,451
----------------------------- ------------ ------------ -------------
30 September 30 September 31 March 2022
2022 2021
$000 $000 $000
----------------------------- ------------ ------------ -------------
- administration expenses 7,604 5,801 13,073
Total operating expenses 7,604 5,801 13,073
----------------------------- ------------ ------------ -------------
Total net operating expenses 7,604 5,801 11,622
----------------------------- ------------ ------------ -------------
4. Adjusting ITEMS
The directors have highlighted transactions which are material
and unrelated to the normal trading activity of the Group.
In the opinion of the directors the disclosure of these
transactions should be reported separately for a better
understanding of the underlying trading performance of the Group.
These underlying figures are used by the Board to monitor business
performance, form the basis of bonus incentives and are used for
the purposes of the bank covenants.
The items below correspond to the table below;
a) A charge of $0.07m was expensed in cost of sales relating to
US duty and tariff charges from prior year in the six months to
September 2021 which was cancelled in the second half of the
year.
b) The amortisation of the loan note costs and associated costs
are shown in financial expense. These are non cash movements and
relate to the discounting of the loan notes and associated costs
which unwind over the term of the notes. In the current period as a
result of the repayment of the loan notes the remaining costs have
been expensed.
c) Amortisation of intangible assets, including customer
relationships, acquired through the Control Micro Systems Inc
deal.
30 September 30 September 31 March
2022 2021 2022
$000 $000 $000
---------------------------------------------------- ------------ ------------ --------
Items included in c ost of sales :
US Tariffs & Duty charges relating to prior years
(a) - (74) 76
---------------------------------------------------- ------------ ------------ --------
- (74) 76
---------------------------------------------------- ------------ ------------ --------
Items included in operating profit:
Costs relating to disposal of machine tool Division - 23 (364)
Amortisation of acquisition intangibles (c) (174) (172) (343)
(174 ) (149 ) (707 )
---------------------------------------------------- ------------ ------------ --------
Items included in financial income/(expense):
Amortisation of loan notes and associated expenses
(b) (462) (370) (530)
Loan note credit on extension of repayment date
(b) - 556 556
---------------------------------------------------- ------------ ------------ --------
Total adjusting items before tax (636) (37) (605)
---------------------------------------------------- ------------ ------------ --------
Income tax on adjusting items 108 104 -
---------------------------------------------------- ------------ ------------ --------
Total adjusting items after tax (528) 67 (605)
---------------------------------------------------- ------------ ------------ --------
5. Financial income and expensE
3 0 September 30 September 31 March
2022 2021 2021
$000 $000 $000
Bank overdraft and loan interest (43 ) (12 ) ( 77)
Other loan interest (28 ) (489 ) (914 )
Finance charges on finance leases - (1) (1 )
Lease interest (31) (53) (89)
------------------------------------------- --------------- ------------ --------
Financial expense before adjusting items (102) (555) (1,081)
Amortisation of loan note costs (462) (370 ) (530)
Loan note credit on extension of repayment
date - 556 556
Financial expense (564 ) (369 ) (1,055 )
------------------------------------------- --------------- ------------ --------
6. Taxation
3 0 September 30 September 31 March
2022 2021 2022
$000 $000 $000
-------------------------------------------- ------------- ------------ --------
Current tax:
Corporation tax at 2 5 % (2021: 19%): prior
year - - 283
Overseas taxation:
- current period (4) (6) 8
-------------------------------------------- ------------- ------------ --------
Total current tax charge (4) (6) 2 91
-------------------------------------------- ------------- ------------ --------
Deferred taxation:
- current period 108 - 3 1
- effect of rate change in UK - 104 -
Total deferred taxation credit 108 104 3 1
-------------------------------------------- ------------- ------------ --------
Taxation credit to the income statement 104 98 3 22
-------------------------------------------- ------------- ------------ --------
7. Earnings per share
The calculation of the basic earnings per share of a loss after
discontinued activities of 0.39c (2021 HY: profit 1.52c) is based
on the earnings for the financial period attributable to the Parent
Company's shareholders of a loss of $463,000 (2021 HY: profit
$1,783,000) and on the weighted average number of shares in issue
during the period of 117,762,521 (2021 HY: 117,473,341). At 30
September 2022, there were 3,300,000 (2021 HY: 3,790,000)
potentially dilutive shares (share options or warrants with a price
below the average price for the period) with a weighted average
effect of 2,088,927 shares (2021 HY: 2,100,375) giving a diluted
earnings per share of loss 0.39c (2021 HY: profit 1.49c). In
accordance with IAS 33 - Earnings per Share, the Group shows no
dilutive impact in respect of its share options as their conversion
to ordinary shares would decrease the loss per share from
continuing operations.
30 September 30 September 31 M arch
2022 2021 2022
--------------------------------------- -------------- ------------- ------------
Weighted average number of shares Shares Shares Shares
Issued shares at start of period 117,47 3 ,3 41 117,473,341 117,473,341
Weighted average number of shares
at end of period 1 17,762,521 1 17,473,341 1 17,473,341
--------------------------------------- -------------- ------------- ------------
Weighted average number of potentially
dilutive shares 2 ,088,927 2,100,375 2 ,496,578
--------------------------------------- -------------- ------------- ------------
Total Weighted average diluted
shares 1 19,851,448 1 19,573,3716 119,969 ,919
--------------------------------------- -------------- ------------- ------------
3 0 September 30 September 3 1 March
2022 2021 2022
$000 $000 $000
Total post tax earnings- continuing operations (1,349 ) 170 484
Total post tax earnings- including discontinued
operations (463 ) 1 ,783 1,269
Basic EPS - continuing operations (1.14 c) 0 .14 c 0.41c
Diluted EPS -continuing operations (1.14 c) 0.14c 0.40c
------------------------------------------------ ------------- ------------ ---------
Total including discontinued operations
------------------------------------------------ ------------- ------------ ---------
Basic EPS (0.39 c) 1.52c 1.08c
Diluted EPS (0.39 c) 1.49c 1.06c
------------------------------------------------ ------------- ------------ ---------
Underlying earnings $000 $000 $000
------------------------------------------------
Total post tax earnings - continuing
operations (1,349) 170 484
Adjusting items - per note 4 (528) 67 605
Underlying earnings after tax (8 21 ) 103 1,089
------------------------------------------------ ------------- ------------ ---------
Underlying basic EPS (0.7 0 c) 0.09c 0.93c
Underlying diluted EPS (0.7 0 c) 0.09c 0.91c
8. RECONCILIATION OF NET CASH FLOW TO NET DEBT
3 0 September 3 0 September 3 1 March
2022 2021 2022
$000 $000 $000
---------------------------------------- ------------- ------------- ----------
Increase/(decrease) in cash and cash
equivalents (8 21 ) ( 2,798) (3,887)
decrease/(Increase) in debt and finance
leases 1 5,478 ( 325) 734
---------------------------------------- ------------- ------------- ----------
decrease/(Increase) in net debt from
cash flows 1 4,657 ( 3,123) (3,153)
Net debt at beginning of period (24 ,862 ) (21 ,991 ) (21,9 91 )
Lease liabilities ( increase)/ decrease 5 ,795 ( 199) (1 18 )
Loan note amortization - 1 81 (5 30 )
Loan note adjustments 4 62 - 511
Exchange effects on net funds 122 3 06 419
---------------------------------------- ------------- ------------- ----------
Net debt at end of period (3,826) (2 4,826 ) (24,8 62 )
---------------------------------------- ------------- ------------- ----------
9. Analysis of net DEBT
Held for C ontinuing
Sale
Total
Group
At At At
3 1 3 1 March 3 1 March Exchange 3 0 September
March
2022 2022 2022 movement Other Cash 2022
flows
$000 $000 $000 $000 $000 $000 $000
-------------------- ---------------------- ----------- --------- -------- ------ ------- ---------------
Cash at bank and
in hand 1,084 76 1,160 (15) - (821) 324
(1 9
Short term deposits - 131 131 ) - - 112
(3 4
1,084 207 1,291 ) - (821) 436
Debt due within
one year (196) (4,870) (5,066) - - 2,099 (2,967)
Debt due after one (9 21 (9 27
year (6) ) ) - - 9 27 -
Government
assistance
loans ( 1,580) ( 1,580) 1 7 - 1 ,563 -
Loan Notes - ( 10,718) ( 10,718) 1 02 (4 62) 11 ,078 -
Lease liabilities (6,294) (1,568) (7,862) 37 6,257 273 (1,295)
Total (6,992) (17,870) (24,862) 122 5 ,795 15,119 (3,826)
-------------------- ---------------------- ----------- --------- -------- ------ ------- ---------------
10. FAIR VALUE
The group considers that the carrying amount of the following
financial assets and financial liabilities are
a reasonable approximation of their fair value:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Loans and other borrowings
11. Principal Risks and Uncertainties
The principal risks and uncertainties affecting the Group remain
those set out in the 2022 Annual Report. Those which are most
likely to impact the performance of the Group in the remaining
period of the current financial year are the continuing issues
surrounding the COVID-19 pandemic and the possible recession which
may result in exposure to increased input costs, supply chain and
delivery issues and a downturn in its customers' end markets,
particularly in North America and Europe.
12. Disposal of Machine Tools Division
On 5 March 2022, the 600 Group signed a contract with Timesavers
Acquisitions LLC to sell its Machine Tool Division. This sale
included the following legal entities: (a) Colchester GmbH, a
private company with limited liability organized under the Legal
Requirements of Federal Republic of Germany, (b) 600 UK Limited
(registered number 144979), a private limited company organized
under the Legal Requirements of England and Wales, (c) 600 Machine
Tools Pty Ltd. (ACN 000161106), a proprietary company organized
under the Legal Requirements of Australia, and (d) Clausing
Industrial, Inc., a Delaware corporation.
The price agreed for the transaction was $21m. While the
contract was signed in early March 2022, the completion date and
collection of funds happened on 8 and 11 April 2022. The agreement
included two escrow accounts of which the Retention escrow of
$0.15m remains outstanding. The working capital escrow was repaid
during the period to 30 September 2022 and an additional amount in
respect of settlement of the agreed working capital adjustment is
due to the Group within the next few weeks of $650,000.
With the contract signed before 31 March 2022 and the deal
closing after this date, the accounts to 31 March 2022 reflected
the profitability of the Machine Tool Division as "discontinued
operations". The 600 Group consolidated balance sheet at 31 March
2022 reflected the entities to be sold as "Assets held for sale"
and "liabilities held for sale". The sale of this division has been
recognized in these financial statements to 30 September 2022 with
a profit of $886,000 after associated costs in adjusting items
profit on discontinued operations. There is no trading activity for
the Machine Tools Division in the current period as the sale
agreement was effective as at 31 march 2022.
There was no adjustment for impairment to the value of the
assets transferred to held for sale in the year ended 31 March
2022.
As noted in this report, with the proceeds of the sale, all debt
of the 600 Group was repaid on 11 April 2022. After paying the loan
notes, the HSBC loans in the UK and all remaining loans with Bank
of America in the US, the Group continues to benefit from a
revolving credit line of $7.5m with Bank of America.
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