The following amendment has been made to the Final Results announcement released on 7 May 2025 at 07:00 under RNS No 6500H.

FY23 Adjusted EBITDA was misstated in the Financial Highlights table as $6.1m. The correct figure is $16.1m

All other details remain unchanged.

7 May 2025

CT Automotive Group PLC

("CT Automotive" or the "Group")

Technology Adoption Drives Significant and Sustainable Margin Improvement

CT Automotive, a leading designer, developer and supplier of interior components to the global automotive industry, today announces its results for the year ended 31 December 2024 ("FY24"). 

CEO Simon Phillips commented:

"Our response to the headwinds facing the auto industry in 2024 was to focus on what was within our control, namely strengthening our business and streamlining our operations. Foremost amongst our achievements was the 600 basis points improvement in our gross margin from 22% to 28% driven by our successful adoption of key digitisation and automation strategies. This enabled us to achieve a 5% increase in adjusted profits before tax to $8.7 million despite revenues reducing as anticipated by 16% as the pent-up consumer demand post-COVID that had driven sales in 2023 began to subside, leading OEMs to reduce inventories.

Looking ahead, in a rapidly evolving and uncertain geopolitical landscape we are maintaining a cautious approach. At the same time, as one of the industry's most efficient, reliable and cost-effective manufacturers we also believe the current unsettled environment will create some opportunities for us to help our customers find efficiencies and long-term solutions for their future production plans." 

In the short film below, CEO Simon Phillips answers 5 key questions on trading and outlook:

Financial highlights^*

*The above figures are derived from continuing operations only

** Adjusted for non-cash foreign exchange translation losses of $1.2m (FY23:nil) and non-recurring items of nil (FY23:2.4m) as explained in Notes 4 and 12 below

*** Net debt excludes IFRS 16 lease liabilities

FY24 Financial Highlights

·   Year on year revenue decreased to $119.7 million (FY23: $143.0 million) following industry-wide realignment of production as OEMs destocked to normal levels following the pent-up consumer demand post-COVID that had driven sales in 2023

o  Tooling revenues increased by 9% to $12.0 million (FY23: $10.9 million) on an improved margin

o  Production revenue reduced by 18% to $107.7 million (FY23: $132.0 million)

·    Gross profit margin increased by 600 basis points to 28% (FY23: 22%) driven by continued integration of AI, automation, and digitisation strategies alongside cost efficiencies gained across all manufacturing platforms.

·   Adjusted EBITDA increased by $0.2 million against the prior year to $16.3 million, which highlights the resilience of the business to continue to operate efficiently under tough industry conditions.

·    Adjusted PBT was $8.7 million (FY23: $8.3 million) driven by margin efficiencies, lower fixed costs and lower borrowing costs.

·    Net debt was $6.2 million (FY23: $3.8 million), aligning with our expectations as we concentrated on realigning vendor payment terms and following our investment of $3.2 million in capital expenditures to further drive growth.

FY24 Operational Highlights

·   Solid operational performance, with all manufacturing centres in China, Mexico and Türkiye improving their efficiency and driving the Group's overall gross margin performance.

·     In China, there was further consolidation of manufacturing facilities, with production now being concentrated in Ganzhou.

·     Türkiye remains at full capacity despite a difficult political and economic backdrop.

·   Mexico is well-positioned, with ongoing business from the US. Production is expected to step-up in 2025 as new programmes launch.

·    In 2024, eight significant new contracts were won valued at $38 million annually with production scheduled to begin at our facilities in Mexico and China in the second half of 2025 and into 2026.

Current Trading, Tariffs and Outlook

·   Trading in the first quarter of 2025 was in line with management expectations benefitting from ongoing operational efficiencies and the commencement of new production programmes. 

·      Naturally, the outlook for the business has become more complex with the uncertainty caused by tariffs and the extent to which this may impact customer production plans and global supply chains.

·     Importantly, the Group had already proactively near-shored a number of production programmes supplying the US, with products manufactured in its Chinese facilities transferring to Mexico. 

·    While tariffs present challenges, they also create opportunities. In Q1 2025, customers chose to relocate three new programmes to CT Automotive to be produced in our Mexico facility, primarily to mitigate the potential impact of tariffs adding approx. $10 million of annual revenue.

·    CT Automotive will continue to focus on the factors within its control, remaining agile and responsive to commercial opportunities, while accelerating the rollout of AI, automation, and digitisation across the business. These initiatives are central to driving further margin improvement and establishing a highly cost-efficient platform to support future growth.

·    Overall, the market environment has become significantly more uncertain however, the Board believes the business remains in a robust position and on track to deliver mid-single digit revenue growth together with further margin expansion in FY25.

Investor Presentation

Simon Phillips, Chief Executive Officer and Salman Mohammed, Chief Financial Officer, will provide a live presentation relating to the Full Year Results via Investor Meet Company on 8 May 2025, 10:00 BST.

Investors can sign up to Investor Meet Company for free and add to meet CT AUTOMOTIVE GROUP PLC via:

https://www.investormeetcompany.com/ct-automotive-group-plc/register-investor

Enquiries:

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 manufacturers ("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 with additional manufacturing facilities in Mexico and Türkiye and distribution facilities and assembly lines in Europe, Asia and the US.  The Company has a low cost design and administrative centre in India.

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, Ford, GM and Volkswagen Audi Group, and premium luxury car brands such as Bentley and Lamborghini.  In addition, the Group supplies all our customer base with a range of products for PHEV and BEV platforms and supplies electric car manufacturers, including Rivian and a US based major EV OEM.

The Group currently supplies component part types to over 55 different models for 22 OEMs. Since its formation, the Group has been one of the very few new entrants to the market, which is characterised by high barriers to entry.

CHAIR'S STATEMENT 

Overview

Against the backdrop of an automotive market in transition, I am pleased to present a robust performance by CT Automotive for the 12 months to 31 December 2024. As anticipated, car manufacturing volumes across the industry reduced in 2024, especially in the fourth quarter. Nevertheless, the Group capitalised on its investment in AI, digitisation and automation to significantly increase gross profit margins leading to an 5% increase in adjusted PBT.

Amid ongoing market volatility there are opportunities that play to CT Automotive's strengths. The emergence of Chinese OEMs establishing plants outside of China is putting pressure on established OEMs to focus intensively on improving profitability. As an agile operator with the ability to deliver low manufacturing costs in our product ranges, CT Automotive is positioned to deliver solutions to automakers under pressure to find cost savings.

Strategically well placed

CT Automotive remains strategically well-placed supplying 22 major OEMs globally. We view this as a good position to build from. Customers include premium brands such as Lamborghini and Bentley, volume producers such as Nissan and Ford and pure Electric Vehicle (EVs) brands such as Rivian. The volume of work for each customer varies but the potential to expand is made significantly easier by having an existing relationship.

Critical to this is being powertrain agnostic. CT Automotive manufactures high quality components for all vehicle types including Battery Electric Vehicles (BEV), Plug-in Hybrid Electric Vehicles (PHEV) and Internal Combustion Engines vehicles (ICE). The absence of power-train bias means that industry trends such as the speed of transition to EV, does not overly impact our business and instead the Company is positioned to flex to prevailing trends and demand requirements.

Core to the Company is our relentless commitment to reducing manufacturing costs, providing OEMs with the opportunity to meet their financial targets and in turn, achieving our own. Our ongoing investment in large-scale digitisation and automation in 2024 has significantly bolstered our cost-efficient, highly automated, and advanced manufacturing capabilities. We are confident this strengthened competitive position will help drive new business wins and increase participation in tenders across our existing customer base.

Geographically, the Group is strategically positioned across three key locations, China, Türkiye, and Mexico, enabling us to deliver optimal tax and cost efficiency for our customers. Our Mexico facility, which opened in 2022, has been a significant success, playing a crucial role in securing several new business wins in the second half of FY24 across a number of  OEMs and more recently in attracting new business from customers looking to reduce tariff exposure. We continue to assess the best locations globally from which to serve our customers and remain agile to relocate should that be in the best interests of the OEMs we support.

Changing Geopolitical environment

The US government's new approach to trade and the introduction of global trade tariffs are reshaping the dynamics of world markets. It remains too early to determine the full impact, as the situation is still rapidly evolving and is yet to stabilise.  The Company has already near-shored several production programmes supplying the US with products previously manufactured in its Chinese facilities transferring to Mexico.

CT Automotive generates approximately $25 million in annual sales tied to the U.S. market, with $15 million currently produced in China and $10 million from Mexico. The majority of the remaining Chinese manufactured product is due to transfer to Mexico this year. 

All applicable tariffs are either directly or indirectly passed on to our customers, though they still influence the broader economic landscape. Nine of the eleven vehicles sold into the US which we support are manufactured there, meaning these vehicles are not subject to the 25% import tariff on complete units.

Some Japanese automakers currently dual-source complete vehicles for the U.S. market from both Japan and US based plants. As a result of tariff pressure, they are increasingly shifting output to their US facilities, which has led to a net increase in demand for CT Mexico's production. The key risks CT faces from tariffs include a potential reduction in consumer demand due to higher vehicle prices, and supply chain disruptions that may impact production flow and delivery reliability. With so many moving parts it is too early to predict how the automotive market will fare, therefore from a Company perspective, we will continue to focus on the areas we can control, whilst closely monitoring the situation as it unfolds and react accordingly.

Board Changes

During 2024, we welcomed Salman Mohammed to the Board as Chief Financial Officer, replacing Anna Brown who stepped down from the role in October 2024. Salman was promoted from within the business having previously held the role of Group Financial Director and is a strong addition to the wider Executive team. At the end of the financial year, Francesca Ecsery, Non-Executive Director, stepped down from her role due to other commitments. Following Francesca's departure from the Board, Geraint Davies has been appointed as Senior Independent Director. 

We are grateful for both Anna and Francesca's contribution and wish them well for the future. 

Financial Performance

In FY24 the Group delivered a robust financial performance, maintaining strong profitability despite the challenges of reduced manufacturing volumes across the industry. The Group mitigated the impact of broader market headwinds through margin efficiency programs at all operational sites, its powertrain-agnostic position between ICE and EVs, and ongoing efforts to drive operational efficiencies via automation, digitisation, and a specific focus on AI.

As expected, production volumes declined in line with the broader automotive industry with total revenues 16% lower to $119.7 million (FY23: $143.0 million). This was made up of $107.7 million of production revenue and $12.0 million of tooling revenue.

The Group again delivered significant gross margin improvement from 22% to 28%. Despite the reduction in revenues, cost controls and operational efficiencies enabled the Company to increase adjusted profitability to $8.7 million (FY23: $8.3 million). Reported EPS increased by 3% to 10.4c (FY23: 10.1c) on continuing operations.

Cash Management remained a key focus in Q4 due to the downturn in the automotive industry, which led to net debt at 31 December increasing to $6.2 million versus $5.8 million at 30 June 2024 (excluding IFRS 16 lease liabilities).

In October, the Group entered into a new debt facility to refinance its existing working capital facility, providing total funding of up to $20 million and extending out to October 2027. The new agreement is with FGI Worldwide LLC and provides the flexibility to support the Group's future growth.

I am immensely proud of our performance in 2024 and I believe we are well positioned going forwards.

CEO'S STATEMENT

Introduction

Trading in 2024 was shaped by three key external factors: high interest rates, ongoing economic uncertainty, and the normalisation of production post-COVID. The pent-up consumer demand that had driven sales in 2023 began to subside, leading OEMs to reduce inventories. These were all factors outside the Group's control. In response, we focused on what we could control, specifically, cost of sales and optimising our fixed cost base. This strategy proved highly effective, as we leveraged efficiencies gained through the integration of AI, automation, and digitization. As a result, the Group achieved a significant improvement in gross profit margin, driving profitability even amid the sales slowdown.

Looking ahead to 2025, several factors are driving transformation within the automotive sector including the ongoing shift to electric vehicles (EVs), the rise of new Chinese automakers, and the recent introduction of tariffs. As a drivetrain-agnostic manufacturer, our products are compatible with all vehicle types, and on balance, we stand to benefit from the transition to hybrid and EV platforms, which typically require higher product content. While the impact of tariffs is still unfolding, our ability to shift production to Mexico, combined with the flexibility and lean structure of CT Automotive, positions us well to manage any impact and potentially to capture market share. 

Expansion of Sales Reach and Expertise

In 2024, a primary objective was to become one of the lowest-cost manufacturers in our industry, which we have now achieved. From this position the Company is well placed to offer cost effective solutions in our product categories and is using this advantage to win new customer orders.

To that end, the Company significantly invested in the sales function globally, extending its reach and expertise. Targeting OEMs and Tier 1 suppliers, the expanded sales team is showcasing the Company's competitive pricing structures, while maintaining the highest levels of quality and service.

In 2024, eight significant new contracts were won, across a number of OEM's, representing a key step in our strategic growth plan. These new contracts include programmes valued at $38m annually with production spread across our Mexico and Chinese production facilities commencing in H2 2025 and 2026. 

In Q1 2025, customers decided to transfer three existing production programs to CT Automotive to commence production in our Mexico facility, primarily to mitigate tariff exposure and due to CT Automotive's proven capability to quickly replicate production lines. All three programmes are scheduled to begin production in late 2025 and contribute approx. $10 million to annual revenue.

AI Transforming CT Automotive

AI is driving a profound transformation across our business, delivering tangible benefits from production planning to human resources. The primary and most immediate impact is cost reduction, with some applications achieving return on investment in under a year. Using AI-driven decision making, the Group is able to react to challenges and opportunities faster than ever before, ensuring a faster response to customer demands.

A prime example of AI in action is in our AI-powered production planning for injection moulding. Previously, this process involved a team of six people in our Chinese manufacturing sites but is now a fully AI automated process. This significantly reduced our changeover times, improved consistency and cut direct labour by 35%, saving circa $1 million during 2024.  We are currently engaged in feasibility studies to implement AI-driven production planning into our facilities in Türkiye and Mexico. Similarly, in quality control, AI has eliminated human error and provided consistent, reliable results in a fraction of the time, resulting in lower overheads, faster execution, and a higher standard of service for our customers.

China

This region delivered a stable performance in FY24, with strong demand particularly from Japan and Europe. As part of the Company's ongoing cost-reduction efforts, our manufacturing operations in China are now primarily concentrated at our Ganzhou plant, which benefits from lower labour costs. In Shenzhen tooling capabilities have been enhanced with new machinery reducing reliance on third party suppliers.

Türkiye

In Türkiye hyperinflation and volatile currency fluctuations persist, creating a challenging landscape for operations. Despite this, our manufacturing site in Gebze remains at full capacity. Looking ahead, we are actively exploring ways to enhance both the prospects and capacity of our manufacturing base in this region.

Mexico

Mexico is a key location for the Company. Established in 2022, the manufacturing plant is ideally situated for near-shoring production for North American OEM's allowing us to reduce costs and react more quickly to changes in customer production programmes. Customers who have chosen to transfer production to Mexico to date have not altered their plans following the change in US Government. In 2024, we secured new contracts that will bring $20 million in annual production to Mexico, highlighting the sites appeal and cost-effective production capabilities. To meet the growing demand projected for 2026 and beyond, additional investment will be required to expand operations.

Quality control

Customer satisfaction in the automotive industry requires the consistent delivery of high-quality products. Working with and gaining the trust of nearly all the world's largest OEMs would not be possible without rigorous internal quality control systems. Throughout the production process, there are continuous quality checks and our adoption of automated AI production processes ensures high quality consistency of product. Reflecting the performance levels achieved in quality control, our Mexico plant was certified under the IATF 16949:2016 standard in August 2024. The China and Türkiye plants were recertified under this standard in FY21.

Sustainability

CT Automotive is fully dedicated to sustainability and corporate social responsibility, monitoring the environmental impact of our operations and seeking ways to reduce our electricity usage, waste and water. In 2024, as part of furthering our commitment to sustainability, we were pleased to receive the Eco Vadis Silver Award. Placing us in the top 15% of companies assessed by Eco Vadis, we scored highly in Environment, Ethics, Labour and Human rights and Sustainable Procurement.

Our People

As always, I would like to recognise the excellent efforts from all our teams across the globe. In total, the business employs c.1,900 people and I would like to thank all of them for their contribution to the performance of the business in 2024 and for their ongoing commitment. We are able to be a dynamic and agile business due to the ability of our people to adapt and embrace change quickly, which has been and will continue to be, a central part of our success.

Current trading, tariffs and outlook

Trading in the first quarter of 2025 was positive benefitting from ongoing operational efficiencies and the commencement of new production programmes. 

Naturally, the outlook for the business has become more complex with the uncertainty caused by tariffs and the extent to which this may impact customer production plans and global supply chains.

Importantly, the Group had already proactively near-shored a number of production programmes supplying the US, with products manufactured in its Chinese facilities transferring to Mexico. 

While tariffs present challenges, they also create opportunities. In Q1 2025, customers chose to relocate three new programmes to CT to be produced in our Mexico facility to mitigate the potential impact of tariffs adding approx. $10 million of annual revenue.

CT Automotive will continue to focus on the factors within its control, remaining agile and responsive to commercial opportunities, while accelerating the rollout of AI, automation, and digitisation across the business. These initiatives are central to driving further margin improvement and establishing a highly cost-efficient platform to support future growth.

Overall, the market environment has become significantly more uncertain however, the Board believes the business remains in a robust position and on track to deliver mid-single digit revenue growth together with further margin expansion in FY25.

FINANCIAL REVIEW

Overview

Margin management remained the key priority in FY24 with the focus on cost efficiencies across all our manufacturing platforms. These efforts were rewarded with gross profit margin increasing to 28% from 22% driven primarily by the integration of AI, automation and digitization and reducing our direct workforce by 17%.

Group revenue decreased year-on-year to $119.7 million (2023: $143 million) as the pent-up consumer demand post-COVID that had driven sales in 2023 began to subside, leading OEMs to reduce inventories.

Adjusted EBITDA increased by $0.2 million against the prior year to $16.3 million  which highlights the resilience of the business in tough industry conditions.

Adjusted profit before tax rose by 5%, reaching $8.7 million compared to $8.3 million in FY23. This improvement was driven by margin efficiencies and lower fixed costs.

Basic earnings per share increased by 3% to 10.4c

Currency movements negatively impacted PBT by $1.8 million (FY23: $0.9 million gain). The currency movements were split between "cash impacting movements" of $0.6 million (FY23: $0.9 million gain) and "foreign exchange translation losses" of $1.2 million (FY23: nil). We continue to hedge our currency exposure between USD and CNY as part of our strategy to remove volatility vs future forecasts. Adjusted EBITDA and Adjusted profit before tax in FY24 only exclude "foreign exchange translation losses".

Revenues and Margins

Production revenue declined by 18% to $107.7 million, down from $132.0 million in FY23, as production volumes adjusted in the first half of FY24 to better align with consumer demand. The challenge persisted into Q4, with major OEMs opting to reduce inventory levels in response to rising interest rates and concerns regarding government-imposed EV quotas. Compared to the average run rate for Q1 to Q3, Q4 revenues dropped by $3.5 million. This decrease adversely affected margins, as a larger proportion of semi-fixed costs had to be absorbed.

In contrast, tooling revenue rose by 9.5% to $12.0 million, up from $10.9 million in FY23, boasting a favourable 30% margin. This growth positions tooling as a critical factor in driving future production revenue.

Despite the reduction in overall revenue, gross profit increased to $33.1 million from $30.9 million in 2023, and gross margins improved to 28%, compared to 22% in the previous year. This improvement reflects a dedicated focus on cost efficiencies across our manufacturing platforms, achieved through the strategic integration of AI, automation, and digitization, which collectively enabled the Group to enhance profitability amid industry-wide volume reductions.

Distribution and Administrative Expenses

On a reported basis distribution and administrative costs rose by 5%. Within administrative expenses, we incurred $1.8 million in foreign exchange losses compared to a gain of $0.9 million in FY23. Excluding these currency impacts, distribution and administrative costs decreased by 7% primarily through lower distribution costs in line with revenue, a reduction in our administrative workforce of 8% and lower depreciation and amortisation costs as the useful life of assets was reassessed following a review of all fixed assets across the group. 

Total currency-related losses included in administrative expenses amounted to $1.8 million, compared to a $0.9 million gain in FY23. This included $1.2 million in non cash foreign exchange translation losses (FY23: $nil), along with an additional $0.6 million loss (following a $0.9 million gain) attributed to revaluation of foreign currency bank accounts and forward hedges.

EBITDA and operating result

Adjusted EBITDA increased by $0.2 million to $16.3million. Throughout the year, our focus centred on enhancing margin efficiencies to navigate industry realignment and cement our position as a leading cost-effective manufacturer in the automotive components sector. We continuously seek to improve processes through technology adoption, aiming to enhance customer experiences.

Taxation

In FY24, the Group recognized a tax credit of $0.2 million, compared to a credit of $0.6 million in FY23. This year's tax credit results primarily from the utilization of prior year losses in the UK and China and adjustments reducing prior year tax accruals.

The Group employs a transfer pricing policy based on residual profit allocation, which assigns a risk level to each entity within the Group. Under this policy, profits are allocated to entities where key decisions are made, as these entities typically carry a higher risk profile. Notably, our Mexican facility is currently excluded from this policy, as it is regarded as a new entity with a fixed cost base designed to support future revenue growth, making it loss making. This arrangement undergoes an annual review to ensure its continued relevance and alignment with the Group's strategic objectives.

Discontinued operations
In FY24, the Group successfully completed the liquidation process of Chinatool Automotive Systems Limited (CAS), a decision initially announced in FY22 due to challenges posed by severe labour shortages and inflationary pressures on energy costs and wages. This strategic move resulted in a gain of $0.8 million attributed to the discontinued operation, compared to a $0.2 million loss in FY23. The gain primarily arose from the write-back of balance sheet items held prior to the announcement of the liquidation.

Profit from continuing operations and EPS

Adjusted profit before tax increased to $8.7 million from $8.3 million in FY23. The reported profit before tax also saw a rise, reaching $7.5 million compared to $5.9 million in FY23. This improvement reflects the Group's robust financial performance amid challenging conditions. Notably, non-recurring costs in FY24 were nil, compared to $2.4 million in FY23, as the net impact of hyperinflation in Türkiye was negligible.

Reported profit after tax from continuing operations climbed to $7.6 million, up from $6.6 million in the previous year. As a result, reported basic earnings per share (EPS) from continuing operations improved to 10.4 cents, up from 10.1 cents in FY23.

Non-recurring items

During FY24 non-recurring items representing a net cost of $nil (FY23: $2.4 million), highlighting the enhanced control environment across the Group and the swift response of senior management to emerging situations.

Capital structure, working capital and interest

Since the end of December 2023, the Group's net asset value has increased significantly to $26.2 million, up from $17.0 million. This growth has been supported by an increase in net current assets, which rose from $4.3 million to $13.9 million.

Despite the challenging trading conditions in Q4, characterized by reduced industry demand, the Group strategically focused on improving its financial position. Trade receivables decreased as a result of these conditions, alongside a concerted effort to reduce trade payables by $5.0 million, thereby strengthening the Group's working capital.

The Group has continued to manage its working capital prudently, effectively utilizing available debt facilities and cash generated from operations. As of December 31, 2024, cash and cash equivalents stood at $3.6 million, compared to $9.4 million in FY23.

Net debt as of December 31, 2024, was $6.2 million, up from $3.8 million in FY23, and was notably higher due to the timing of the December payroll payments in China, amounting to $1.7 million, which were paid in early January 2024.  On a comparable basis, net debt FY23 would have been $5.5 million. After applying IFRS 16 accounting standards for right-of-use assets related to current and non-current lease liabilities, net debt further adjusts to $13.5 million, compared to $12.7 million in the previous year.

Cash flow
The Group continues to demonstrate its strong cash-generating capability, achieving net cash from operations before investments in working capital of $16.1 million in FY24, compared to $14.6 million in the previous year. Of this amount, $8.5 million was reinvested into working capital, compared to $6.5 million in FY23.

Several factors influenced the working capital dynamics this year:

·      Trade and Other Receivables: There was a decrease of $5.8 million, primarily due to lower revenue in Q4 and the timing of tooling revenue recognition at year-end.

·      Inventories: Increased by $1.2 million, reflecting strategic inventory builds in Mexico to support upcoming program launches anticipated in FY25.

·      Trade and Other Payables: Decreased by $13.2 million as the Group addressed overdue vendor payments accumulated during the COVID-19 pandemic in China and adjusted for the net impact of deferred revenue timing on tooling projects.

Consequently, cash generated from operations was marginally lower than the previous year, totalling $7.6 million compared to $8.1 million in FY23.

Throughout the year, the Group paid $2.1 million in interest costs related to borrowings and lease liabilities, a decrease from $2.5 million in FY23. This reduction was due to a $3.3 million decrease in borrowings.

In alignment with its strategic vision for future growth, the Group invested $3.2 million in property, plant, and equipment, focusing on opportunities that enhance operational capabilities. This investment included advancements in robotics, which contributed to improved margin efficiencies throughout FY24.

FGI Facility

On October 11, 2024, the Group transitioned its borrowing facilities from HSBC trade loans and invoice financing to a new three-year agreement with FGI Worldwide LLC (FGI), set to conclude in October 2027. This strategic move offers enhanced financial flexibility by providing borrowing solutions in two key areas of the balance sheet:

1.    Inventory Financing: Focused on inventory transfers from China to the UK and USA.

2.    Accounts Receivables Financing: Covering the accounts receivables of the Group's facilities in the UK, USA, and Mexico. Notably, facilities in China and Türkiye are excluded from this borrowing arrangement.

Under the terms of the FGI facility, the Group is required to maintain a Fixed Cost Cover Ratio (FCCR) of at least 1.5x on a trailing twelve-month basis. As of December 31, 2024, the Group reported an FCCR of 1.9x, demonstrating substantial headroom above the minimum requirement. This robust performance underscores the Group's prudent financial management and operational efficiency.

The Group is committed to maintaining compliance with this covenant and submits updated FCCR calculations to FGI on a monthly basis. Additionally, comprehensive stress testing of future financial forecasts indicates significant headroom, assuring the Group's ability to comfortably sustain the ratio above the stipulated threshold, supporting ongoing financial stability and strategic growth initiatives.

Going Concern

The Directors believe that the Group is well placed to manage its business risks and having assessed the Group's business activities and factors likely to affect future performance, including a review of forecasts and predictions, taking account of reasonable possible changes in trading performances and  available borrowing facilities, they have a reasonable expectation that the Group has adequate resources to continue in operational existence for the next twelve months following the date of approval of the financial statements.

Therefore, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Refer to note 1 of accounting policies below.