- Title:
2021 Final Results - Time:
07:00:06 - Date:
3 Aug 2021 - Category:
Results - ID:
3165H
3 August 2021
FILTRONIC PLC
AUDITED FULL YEAR RESULTS FOR THE YEAR ENDED 31 MAY 2021
Filtronic plc (AIM: FTC), the designer and manufacturer of products for the aerospace, defence, telecoms infrastructure and critical communications markets, announces its full year results for the 12 months ended 31 May 2021.
Financial Highlights
|
|
2021 |
2020 |
||
| Revenue |
£15.6m |
£17.2m |
||
| Adjusted EBITDA* |
£1.8m |
£1.2m |
||
| Adjusted operating profit** |
£0.6m |
£0.4m |
||
| Exceptional items |
£0.06m |
(£0.6m) |
||
| Operating profit/(loss) |
£0.6m |
(£0.2m) |
||
| Profit/(loss) before taxation |
£0.2m |
(£0.4m) |
||
| Loss for the year from discontinued operations |
- |
(£1.4m) |
||
| Profit/loss for the year |
£0.1m |
(£2.0m) |
||
| Basic and diluted earnings/(loss) per share |
0.03p |
(0.93p) |
||
| Net cash/(debt) balance as at 31 May |
£0.4m |
(£0.7m) |
||
| Net cash when excluding right of use property leases |
£1.9m |
£0.4m |
||
| Cash generated from/(used in) operating activities |
£2.5m |
(£2.6m) |
||
*Adjusted EBITDA is earnings before interest, taxation, depreciation, amortisation and exceptional items.
** Adjusted operating profit is operating profit/(loss) before exceptional items.
Operational Highlights
· Healthy cash position will be used to drive further organic growth in our served markets which are showing strong signs of recovery from the pandemic with a stronger order book, improved customer forecasts and increased opportunities.
· Awarded a contract to develop and supply battlefield radio communications equipment valued at £1.3m through a new channel to market.
· Our "best-in-class" Tower Top Amplifier supplied to the market leading Original Equipment Manufacturer in critical communications saw its first significant revenue recognition in Q4 of the financial year.
· Expansion of our direct and indirect sales channels in the USA, Europe and Asia through a mix of agents and distributors to expand our sales reach.
· Winner of the prestigious Queen's Award for Enterprise in International Trade 2021.
Commenting on the outlook, Reg Gott, Chairman, said: "Our healthy cash reserves and continued generation of EBITDA provide a solid platform from which to build the business and make the necessary investments to facilitate further revenue growth. The biggest challenge we faced throughout the pandemic was customer engagement and new customer acquisition due to travel restrictions. We countered this by expanding our channels to market, across multiple territories, and executed on the marketing plan to raise the brand profile which has provided fresh momentum, stimulating a growing opportunity pipeline and a number of initial contract wins with key target customers. Alongside increased order-flow and strengthened customer forecasts there are signs of pent-up demand in our served markets that we are positioning ourselves to capitalise on.
The recent refresh of our strategic plan identified key objectives, milestones and the required advancement of our technology roadmap to further develop the business which we look forward to executing on over the coming year."
Annual General Meeting
The Annual General Meeting will take place at 11am on 28 October 2021 at Plexus building, Thomas Wright Way, Netpark, Sedgefield, County Durham, TS21 3FD.
|
|
Note: This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.
Forward-looking statements
The Chairman's statement and Chief Executive's review include statements that are forward looking in nature. These are made by the Directors in good faith based on the information available to them at the time of their approval of this report. Such statements are based on current expectations and are subject to a number of risks and uncertainties, including both economic and business risk factors that could cause actual events or results to differ materially from any expected future events referred to in these forward-looking statements. Unless otherwise required by applicable law, regulation or accounting standard, the Group undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
Chairman's statement
Dear fellow shareholder
At the time of writing this last year, we had just been through our first lockdown, and I was able to report the business had proved its resilience and met all customer commitments with minimal disruption to operational output. We entered FY2021 with cautious optimism, confident we could develop the business despite the global disruption from Covid-19. I am pleased to report the business has continued to demonstrate a strong level of robustness in the face of one of the most challenging environments most of us have ever faced. I must therefore take this opportunity to thank our employees for their efforts, strength of character and commitment shown over the last year. Whilst these strong character traits do not appear on the balance sheet, they have proved to be an invaluable asset to Filtronic as we have experienced another year of progress with material growth in adjusted earnings before interest, taxation, depreciation, amortisation and exceptional items ("adjusted EBITDA"), despite three periods of lockdown.
The key challenge presented by the pandemic has been to new customer acquisition as traditional selling channels have been constrained by travel restrictions. We have worked hard to counter this during the year by developing alternative methods to address the market through expansion of our agent and distribution network in a number of territories, revitalisation of the Filtronic brand and corporate identity and increased marketing communication to build brand awareness. These initiatives will serve us well as we look to satisfy key strategic objectives of revenue growth and on-boarding of new customers in the coming year.
Richard Gibbs, appointed as CEO last September, has brought a renewed vigour and strategic vision to the business and as a board we are delighted with his progress to date. Under his leadership of the business, we took the opportunity to realign our strategic plans to exploit the strengths of our capability, technology and market positions that we have developed since the business was refocused in FY2020, following the sale of the Telecoms Antenna Operation.
We are looking to support this realignment with the recruitment of key engineering management to our Senior Leadership Team, who have strong links to both industry and research institutions in our served markets. They will be tasked with further development of the technology roadmap, expansion of the product portfolio and, together with our commercial team, broadening our customer base.
Financial performance summary
Group sales from continuing operations increased in the second half of the year by 20% to £8.5m (H1 FY2021: £7.1m) albeit sales for the full year reduced by 9% to £15.6m. (2020: £17.2m) following the softer trading in H1 due to the impact of Covid. Quality of earnings continued to improve with an operating profit of £0.6m being achieved (2020: £0.2m operating loss). Adjusted EBITDA from continuing operations was £1.8m (2020: £1.2m) due to a stronger sales mix.
The Group was able to close the year with £2.9m of cash at bank (2020: £2.0m) giving healthy cash reserves in addition to our undrawn working capital debt facilities in the UK and USA which provide further headroom. The cash position grew as a consequence of improved operating cash generation from adjusted EBITDA. The Group had net cash when including all debt except right of use property leases, of £1.9m at the end of the financial year (2020: £0.4m). Net cash including right of use property leases was £0.8m (2020: £0.7m net debt).
Dividend
No dividend is proposed for the year (2020: £nil). The Board continues to be of the opinion that shareholders are better served by cash being retained in the business to fund future business development.
Board composition
After 15 years as a Non-Executive Director, with the last six years as Chairman, I have advised the Board of my intention to step down and retire at the AGM in October 2021. The Company is now stronger and is well positioned to continue to build and grow, and I feel the time is right for me to retire from the Board in order to complete the Board and Executive refresh process and make way for a new Chairman bringing new perspectives. I have enjoyed my time with Filtronic immensely and would like to extend a deep personal thank-you to all staff and shareholders for their support, especially during some of those more difficult times, but I would especially like to thank my fellow board members, for whom I have the greatest respect. I wish you all every success for the future.
A process to appoint my successor is currently underway. The Board will provide a further update once an appointment has been made.
Outlook
The Board is encouraged by the progress made in developing the business over the course of the year and, combined with the prospect of improved trading conditions, we look forward with renewed confidence to continuing our growth in both revenue and profitability. There are clear signs of pent-up demand in our end markets, which we are well positioned to capitalise on given the recent investments we have made and the evolving market landscape. The key short-term risk to delivery will be the global semiconductor component shortage which is affecting all sectors and companies relying on embedded electronics components. It is already proving disruptive with significantly increased supplier lead times, but we will leverage our supply chain expertise, our engineering capability and our operational agility to minimise the impact of this.
Further investment is planned for new product development including in W-band technology which will become a key frequency band in 5G telecoms and space applications as capacity within E-band is progressively consumed. These investments, along with further development of our core process technologies and channels to market will provide the building blocks for sustained growth in future years.
We started the new year with increased optimism based upon an improved opening order book over last year and a growing opportunity pipeline across a widening customer base.
Reg Gott
Chairman
2 August 2021
Chief executive's review
I am delighted to have the opportunity to write my first Chief Executive's Review after nine months at Filtronic. I have, of course, been aware of Filtronic throughout my career in the electronics industry, and during previous interactions with the Company I have always been impressed by the breadth of Filtronic's technology and the integrity of the Filtronic employees, both past and present. When presented with the chance to join the Filtronic team in September last year, I did not have to think too long and hard about taking up the opportunity. I am pleased to report that there have been no hidden surprises to date, and I remain more convinced than ever regarding the strength of the business, the quality of the Filtronic brand and our potential for growth by delivering innovative RF solutions.
FY2021 was a year of first half consolidation, followed by second half recovery and further adjusted EBITDA growth. After a slow start in the wake of a challenging market environment and the continuation of restrictions imposed by the global Covid pandemic, we had a more encouraging second half and finished the year with a strong order book and signs of confidence returning to our markets.
With the successful sale of the Telecom Antenna Operation in January 2020, the FY2021 trading results reveal the underlying strength and profitability of the core Filtronic business. Revenue is down slightly by 9% on prior year, mainly due to changes in customer schedules and delayed execution of critical communications programmes in the USA during the first half of the year. Adjusted EBITDA grew year-on-year by 51% based on increased operational efficiencies, coupled with consistent demand for higher margin products and strong demand for Filtronic engineering services.
The management team continue to ensure that Filtronic remains fully operational despite numerous lockdowns and disruption. We have modified our workspace and developed work procedures to the point where we can now accommodate all our employees back on site, and we are already starting to see the benefits of a strong collaborative team environment. This was in part, enabled by expanding our operational footprint at our largest site in Sedgefield which was key to maintaining a covid-safe environment, but it is also an important step to facilitate more space and capacity as we execute on our growth plans with additional headcount and increased operational capability. I would like to take this opportunity to recognise the resilience of the Filtronic team and thank them for their outstanding commitment and support during the last twelve months.
The most significant consequence of Covid-19 has been the impediment to business development and sales acquisition activities during the year. Our Business Development teams have not had the opportunity to visit customers, attend trade events, or host customer meetings at our facilities. To compensate, we have made considerable efforts to connect with customers via alternative channels. We have moved most of our marketing efforts online and made considerable enhancements to our website and social media presence. In doing so we have managed to significantly raise the profile of Filtronic in the market and improve the levels of lead generation. Voice of the customer ("VoC") feedback conducted during the year confirmed the strength of the Filtronic brand and our reputation for delivering innovative RF solutions. With a minor refresh we feel there is significant value in the Filtronic brand, and we will be working hard to promote this in the coming year.
The recent investments made in manufacturing automation in the facility at Sedgefield have resulted in significant improvements in capacity, productivity and quality, whilst offering enhanced capability to our customers. With well-executed inventory management, we have avoided supply chain issues and maintained a steady rate of production throughout the year, with excellent yields, and increasingly high levels of operational efficiency. This has given us the opportunity to respond quickly to fluctuating customer demand cycles and ensure that we remain on schedule with delivery commitments.
We made appropriate use of the UK and US government support schemes at various points throughout the year, and this allowed us to balance our cost base during the changing lockdown restrictions. Last financial year we consolidated manufacturing of critical communication products in the USA, to better support our customers and respond to an increased preference for onshoring and "buy America" products. This was well received by customers and enabled us to respond quickly as the critical communication market recovered, and federal stimulus packages begin to positively impact spending. There are signs that large organisations are looking towards moving to western supply chains as geo-political issues persist. The onshoring project has positioned us well to be part of any early-stage movement on this if the appetite to do so comes to fruition.
Customers and markets
Our customers in the critical communications market have seen demand fluctuate over the last year. End users revised deployment plans and our customers were unable to make the expected progress with existing project completions. New procurement decisions have been delayed subject to revised spending plans. The impact of this has been a fluctuating level of order intake throughout the year, and a reluctance to commit to next generation programmes and new product introductions.
By contrast, the aerospace and defence market has been a strong and steady contributor this year. In July 2020 we received a long awaited £4.9m defence contract, which provides for a two-year manufacturing supply agreement, and justifies the recent investments made in the advanced hybrid manufacturing facility on the Sedgefield site.
Demand for our 5G transceiver products reached a peak at the end of FY2020 as the major customer accumulated inventory in readiness for the rollout of their backhaul product portfolio. Deployment of 5G networks themselves has proved challenging to forecast, due in part to the slow rate at which governments around the world release E-band licences, and the mix of backhaul solutions within a proposed system configuration. We have worked closely with our customers to align delivery schedules and managed to level-load the production schedules for FY2021 and FY2022.
We continue to see the High-Altitude Pseudo Satellites ("HAPS") and Low Earth Orbit ("LEO") telecom applications as an attractive market for our E-band technology and we became full members of the HAPS Alliance during the last year. Having undertaken several successful engagements with US technology companies that are pioneers in this field, we now believe that we have a strong portfolio for both stratospheric and LEO space platforms and will look to capitalise on this IP as the applications evolve.
We closed the year with the welcome news that we had been awarded the prestigious Queen's Award for Enterprise 2021. This was a fitting recognition of the efforts made to support the global telecoms market over the last few years, and a testament to the reputation of Filtronic as a flag carrier for British technology.
There have been several other notable achievements over the last 12 months, all of which set the potential for future revenues, to which end I would highlight the following:
• The award of two funded development contracts for defence products associated with next generation radar systems. An early indication of the UK Government's commitment to significant Electronic Warfare ("EW") platform upgrades and an opportunity for Filtronic to influence the ultimate Original Equipment Manufacturer ("OEM") design.
• The award of a £1.3m defence contract for the design, development, and low-rate production of battlefield communication products. This represents our first direct engagement with a defence agency, and it will utilise the expertise of our Leeds design centre.
• We have started to see volume sales for our "best-in-class" Tower Top Amplifier ("TTA") product with design wins for both system upgrades and new state-wide installations in the USA.
• After successful conclusion of the trials associated with our 10Gbps backhaul track to train transceiver product in Asia, we have received enquiries for initial production volumes and delivered transceiver units for the start of UK trials.
• We successfully delivered high performance E-Band transceivers for use in two separate low latency private network applications associated with high frequency trading.
• We successfully transitioned from our Orpheus E-Band transceiver product to the next generation Morpheus II product during Q2 FY2021. Shortly afterwards we passed the milestone of 50,000 installations for our market leading E-band modules.
Outlook
As the world emerges from the devastating impact of the Covid-19 pandemic, we will inevitably face a period of economic uncertainty, an example of this being the current disruption to semiconductor supply chains. However, we feel we have the resources and reserves necessary to navigate against these headwinds and we look forward positively to the new trading period.
Filtronic's core markets of mobile telecommunications, critical communications and aerospace and defence, represent industry segments that have remained robust throughout the pandemic, and are well positioned to benefit from economic recovery and efforts to stimulate the economy. We can expect a renewed commitment to the roll out of 5G networks worldwide, and we believe that some of the delayed spending on critical communications infrastructure will begin to materialise.
Aerospace and defence programs are naturally longer-term initiatives, but we see an increased appetite by the governments in the UK, USA and Europe to support investment in next generation EW technologies, commercial space programmes and sovereign telecom supply chains, all of which plays to our strengths and provides potential growth opportunities for Filtronic.
Business plans for FY2022 reflect the somewhat unpredictable nature of the economic recovery, and in support of this we have conducted a full Strategic Planning Process ("STRAP") to generate our technology roadmaps and identify additional growth opportunities. We have a culture that is proactive and highly motivated to create sustainable growth and diversification of our customer base, and we have put in place initiatives to further develop our capability and secure new business opportunities including:
· Development of next generation MMIC designs that will enable us to continue the evolution of our mobile telecom backhaul solutions, from E-band into the adjacent licence bands of V-Band, W-Band and ultimately D-Band.
· Continued investment in our marketing organisation with an updated website platform and enhanced user content, a refresh of the Filtronic brand and a renewed commitment to respond to feedback from customers.
· Strengthening the sales organisation with the deployment of additional direct sales and business development resource in the UK and Western Europe.
· Establishing a Manufacturing Representative Network across the USA and Europe to enhance our sales reach, with a faster route to market through established sales channels without the high overhead cost incurred from enlarging our own sales team.
· Further investment in advanced equipment to continue the extension of our engineering design & test capability and incorporate higher-frequency higher-performance technologies.
· Aligning our business processes and equipping our facilities to achieve the accreditation necessary to undertake a higher security level of UK Defence programme work.
I am pleased with the progress we have made over the past year and I am excited by the potential that exists at Filtronic. We have come through the pandemic well, and there is an increasing need globally for our high-performance products and unique RF design capabilities. We have identified the specific market segments that we will pursue as the economy recovers and business constraints are removed and as a result we approach the new financial year with a renewed sense of optimism.
Richard Gibbs
Chief Executive Officer
2 August 2021
Financial review
Filtronic achieved material adjusted EBITDA growth within the continuing operation for the third consecutive year thanks to a strong sales mix and controlled overhead spend. Adjusted EBITDA for the year rose to £1.8m (2020: £1.2m) with £1.2m being generated in the second half following an uplift in sales against the first half. Consequently, the balance sheet strengthened and cash generation of £1.1m (2020: £0.6m outflow) in the period has given an excellent platform to develop the business and invest in opportunities that offer a high rate of return and provide the building blocks for future growth.
Revenues
Sales revenue for the Group decreased in the year by 9% to £15.6m (2020: £17.2m) because of delays to key programmes in the first half and the impact of Covid on one of our key markets. Despite this, it was encouraging to see 20% revenue growth to £8.5m in the second half of the year over the first half (H1 FY2021: £7.1m) as markets recovered and spending on core communication programmes increased having seen funds diverted to sectors tackling the pandemic. Trading in the second half gives optimism that companies are keen to progress their deferred infrastructure projects, evidenced by the stronger order book we carry into the new financial year and an increase in the number of enquiries received.
5G XHaul sales decreased year-on-year as our lead customer had built buffer stocks in the prior year to capitalise on market opportunities as they arose. Consequently, the reduction in demand was anticipated but further exacerbated as the switch to the next generation, Morpheus product, was delayed due to technical challenges unrelated to our product. Sales of XHaul derivatives to adjacent markets including HAPS, 'over-the-air' equipment and trackside-to-train applications were in line with those generated in the prior year. However, several customer funded product developments offer an opportunity to not only lower customer dependency but are themselves significant players in their respective markets.
Sales of defence products saw year-on-year growth of 24% and we are now enjoying consistent output of the products, helped by the substantial investments we made in plant and machinery in the previous year. In addition to this, we have been working on a number of smaller engineering programmes as we seek to develop further opportunities within our existing customer base. Broadening our customer base has been a key strategic objective of the business for some time and it is pleasing to see conversion of numerous opportunities with other defence contractors which, whilst small, and early-stage developments, have the potential to grow into something more significant if adopted into a defence programme.
Critical communication markets suffered during the pandemic with reduced demand for product but sales in the second half of the year increased by 41% to give 7% growth year-on-year. Given order-flow and customer forecasts it appears the pent-up demand in the market is now flowing down the supply chain. It was especially pleasing to see the first significant sales of the newly launched TTA products in the final quarter of the year. These sales are an important milestone for the product as it gains prominence throughout the network of field engineers, and we can position ourselves better to participate in state-wide rollouts.
Operating costs and headcount
Operating costs increased in the year to £9.5m (2020: £9.3m). The Group's largest overhead is salary related costs which increased by £0.2m following recruitment of additional engineering resource and the reinstatement of a marketing function to support revenue growth.
We were also able to fund part of this by naturally reducing the size of our manufacturing team due to efficiency and yield improvements from the capex investment last year, which is now optimised. Consequently, we have been able to reduce the total number of employees which is reflected in the average headcount for the year decreasing to 130 (2020: 141).
An analysis of the Group's average continuing headcount is presented below:
|
|
2021 |
2020 |
| Manufacturing |
86 |
99 |
| Research and development |
24 |
21 |
| Sales and marketing |
5 |
5 |
| Administration |
15 |
16 |
| Total headcount |
130 |
141 |
Costs have been managed tightly throughout the year and have included some consequential cost savings from the pandemic such as business travel and trade exhibitions which are not expected to continue in the long run. These are important expenses that facilitate customer engagement so we will be looking to take advantage of travel restrictions easing at the earliest opportunity.
We benefitted from the UK government's furlough scheme in the first half with £83k received following programme delays to a couple of key projects which offset overhead spend. This was offset against the salary cost in operating costs. In the USA, we secured $237k (£192k) of financial support through the Paycheck Protection Programme ("PPP") to retain staff during the pandemic. The loan was forgiven for repayment by the US government in the year and converted to a grant.
A large portion of our product development in the year was customer funded which maintains a healthy flow of cash during the project. Consequently, there was limited capitalisation of development costs as the costs are expensed in line with the revenue recognition. The impact of this was £0.6m more engineering costs being expensed than the prior year with only £0.1m capitalised (2020: £0.7m). Further commentary can be seen in the 'Research and development costs' section of this review.
Adjusted EBITDA and operating profit
The Group focuses on an alternative performance measure ("APM") to track performance of the business and a GAAP measure of operating profit. The APM is adjusted EBITDA as it measures the quality of earnings without the impact of exceptional items and non-cash expenses such as depreciation and amortisation. Operating profit was £0.6m (2020: £0.2m operating loss) whilst adjusted EBITDA was £1.8m (2020: £1.2m) representing a 50% increase. This was possible as the reduction in revenue was mitigated by a stronger sales mix. Gross profit increased considerably thanks to increased sales to the defence market where certain components are free issued by the customer and reduced sales into the telecoms market which is more price sensitive. Lower manufacturing overheads from reduced headcount and furlough payments more than offset the increased depreciation charge from the capital expenditure programme last year.
Given the operational gearing of our facility in the USA, where critical communications products are manufactured, increased volume enabled an uplift in the profitability of that site.
The full year impact of investments made last year in plant and machinery can be seen in the table below from an increased depreciation charge. Impairment of development costs previously capitalised was £45k as we mothballed a development due to concerns over successful commercialisation after further discussions with the customer. Amortisation has increased as we have started to amortise the Morpheus and TTA product developments.
|
|
2021 |
2020 |
| Reconciliation of adjusted operating profit/EBITDA |
£000 |
£000 |
| Operating profit/(loss) |
642 |
(188) |
| Exceptional items |
(64) |
569 |
| Adjusted operating profit |
578 |
381 |
| Impairment of development costs |
45 |
89 |
| Depreciation |
941 |
677 |
| Amortisation |
209 |
18 |
| Adjusted EBITDA |
1,773 |
1,165 |
Taxation
A tax charge of £0.2m (2020: £0.1m) has been recognised for the year. This is a result of the deferred tax position being reduced reflecting the usage in the year. This is a non-cash entry so payments will not be made of this value.
It is highly likely that governments around the world will increase their rates of corporation tax over the next few years to help pay for the cost of economic support during the pandemic. However, with substantial deferred tax assets, including those not recognised on the balance sheet, this is likely to have a minimal impact on cash.
Research and development costs ("R&D")
Total R&D costs in the year before capitalisation and amortisation of development costs were £1.7m (2020: £1.7m). The Group has utilised most of the engineering resource in the year on customer funded developments. This ensures we generate near-term revenue whilst there is an increased chance of commercialisation.
The Group remains committed to investment in R&D for the future growth of the business and consequently measures this as a KPI. Key areas of spend in the year included product development for markets spanning 5G XHaul, HAPS, 'over-the-air' mmWave equipment and defence. In addition to these, our stronger balance sheet gives us greater ability to invest in development of our own strategic technology roadmap to build long-term shareholder value in the years ahead.
The Group capitalises its development costs in line with IAS 38. A reconciliation of R&D costs before capitalisation and amortisation can be seen in the table below:
|
|
2021 |
2020 |
| Reconciliation of R&D costs |
£000 |
£000 |
| R&D costs in income statement |
1,845 |
1,152 |
| Capitalisation of development costs |
52 |
678 |
| Impairment of development costs |
(45) |
(89) |
| Amortisation of development costs |
(184) |
- |
| R&D cash spend |
1,668 |
1,741 |
Capital expenditure and right of use assets
Capital expenditure was reduced in the year following substantial investment in the prior year. The total amount of capital committed was £0.4m (2020: £1.8m) mainly for engineering equipment at our site in Sedgefield which will be used to expand our capability at higher frequencies. The assets externally financed through asset finance agreements were subsequently classified as right of use assets.
Inventory provision
Inventory is valued at the lower of cost and net realisable value. It is the Group's policy to regularly review the carrying value of its inventories and to make a provision for excess and obsolete inventory. As at 31 May 2021, the inventory provision was £1.5m (2020: £1.5m).
Warranty provision
In line with industry practice, the Group provides warranties to customers over the quality and performance of the products it sells. The Group's policy is to make a provision, calculated as a percentage of cost of goods sold, after reviewing costs associated with faulty products returned. As at 31 May 2021, the warranty provision was £0.3m (2020: £1.1m). The Group paid the final instalment of a specific customer warranty settlement liability in the year of $0.5m (£0.4m) drawing the matter to a close.
Funding and cash flow
The Group recorded an increase in cash and cash equivalents to £2.9m (2020: £2.0m) at the year-end.
Cash generated from operating activities in the year was £2.5m (2020: £2.6m outflow) as solid adjusted EBITDA coupled with an unwind of the working capital position drove strong cash generation. The inventory position unwound in the second half following the successful conclusion of the onshoring project of critical communication products from China to the USA. It was essential to hold higher levels of inventory during this project whilst we developed and gained confidence in the new supply chain whilst in the UK higher levels of inventory were held as mitigation against any disruption from Brexit.
However, we are currently in the middle of a global shortage of electronic components. Therefore, we plan to increase our inventory position once again to ensure we have material availability to fulfil orders and capitalise on opportunities when our competitors are forced to extend their lead times.
Net cash of all lease obligations when including all debt except property leases at the end of the period was £1.9m (2020: £0.4m) whilst overall net cash including property leases was £0.8m (2020: £0.7m net debt). At a time when many sectors are struggling with liquidity it is very pleasing to move the business into a net cash position demonstrating the resilience of the business during a very difficult trading environment.
To provide additional cash headroom Filtronic has a £3.0m invoice discounting facility with Barclays Bank plc in the UK and a $4.0m invoice factoring facility with Wells Fargo Bank in the USA. Both facilities were undrawn at 31 May 2021 (2020: undrawn).
Going concern
In assessing going concern, the Board have considered:
· The principal risks faced by the Group which are discussed within the 'Risk management' section of the Annual Report.
· The financial position of the Group including forecasts and financial plans.
· The healthy cash position at 31 May 2021 of £2.9m (2020: £2.0m) and the additional headroom available through the undrawn invoice discounting facilities.
· The ongoing impact of Covid-19 as the business has maintained its operational capability throughout the pandemic and met all customer commitments. Whilst travel restrictions impacted on new contract wins in FY2021, the improvement in customer forecasts and increased order-flow give confidence there is pent-up demand in our markets and new opportunities are starting to present themselves.
Therefore, the Directors are satisfied that the Group has adequate financial resources to continue in operational existence for a period of at least 12 months from the date of this report. Accordingly, the going concern basis has been adopted in the preparation of the Annual Report for the year ended 31 May 2021.
Michael Tyerman
Chief Financial Officer
2 August 2021
The Board
The directors that served during the year ended 31 May 2021, and to the date of this announcement, and their respective roles are set out below:
Reg Gott (Chairman)
Richard Gibbs (Chief Executive Officer) appointed 1 September 2020
Michael Tyerman (Chief Financial Officer)
Pete Magowan (Non-Executive Director)
John Behrendt (Non-Executive Director) appointed 1 January 2021
Michael Roller (Non-Executive Director) retired 29 October 2020
Consolidated Income Statement
for the year ended 31 May 2021
|
|
|
|
|
|
|
|
|
2021 |
2020 |
|
| Continuing operations |
Note |
£000 |
£000 |
|
|
|
|
|
|
|
| Revenue |
2 |
15,556 |
17,181 |
|
|
|
|
====== |
====== |
|
| Adjusted Earnings before interest, taxation, depreciation, amortisation and exceptional items |
|
1,773 |
1,165 |
|
| Depreciation |
|
(941) |
(677) |
|
| Amortisation of intangible assets |
|
(209) |
(18) |
|
| Impairment of development costs |
|
(45) |
(89) |
|
|
|
|
---------- |
---------- |
|
| Adjusted operating profit |
|
578 |
381 |
|
| Exceptional items |
3 |
64 |
(569) |
|
|
|
|
---------- |
---------- |
|
| Operating profit/(loss) |
|
642 |
(188) |
|
| Finance costs |
|
(431) |
(277) |
|
| Finance income |
|
- |
36 |
|
|
|
|
---------- |
---------- |
|
| Profit/(loss) before taxation |
|
211 |
(429) |
|
| Taxation |
5 |
(151) |
(89) |
|
|
|
|
---------- |
---------- |
|
| Profit/(loss) for the year from continuing operations |
|
60 |
(518) |
|
| Loss for the year from discontinued operations |
|
- |
(1,437) |
|
|
|
|
====== |
====== |
|
|
|
|
|
|
|
| Profit/(loss) for the year |
|
60 |
(1,955) |
|
|
|
|
====== |
====== |
|
|
|
|
|
|
|
|
|
|
---------- |
---------- |
|
| Basic and diluted earnings/(loss) per share |
4 |
0.03p |
(0.93p) |
|
|
|
|
====== |
====== |
|
|
|
|
|
|
|
The profit for the year is attributable to the equity shareholders of the parent company, Filtronic plc.
Consolidated Statement of Comprehensive Income
for the year ended 31 May 2021
|
|
|
2021 |
2020 |
|
|
|
£000 |
£000 |
|
|
|
|
|
| Profit/(loss) for the year |
|
60 |
(1,955) |
|
|
|
---------- |
---------- |
| Other comprehensive (expense)/income Items that are or may be subsequently reclassified to profit and loss: Transfer to income related to business disposal |
|
- |
117 |
| Currency translation movement arising on consultation |
|
(98) |
(111) |
|
|
|
---------- |
---------- |
| Total comprehensive expense for the year |
|
(38) |
(1,949) |
|
|
|
====== |
====== |
The total comprehensive expense for the year is attributable to the equity shareholders of the parent company Filtronic plc.
All income recognised in the year was generated from continuing operations.
Consolidated Balance Sheet
at 31 May 2021
|
|
|
2021 |
2020 |
|
|
Note |
£000 |
£000 |
| Non-current assets |
|
|
|
| Goodwill and other intangible assets |
|
1,716 |
1,847 |
| Right of use assets |
|
2,268 |
2,685 |
| Property, plant and equipment |
|
1,014 |
1,124 |
| Deferred tax |
|
1,218 |
1,868 |
|
|
|
---------- |
---------- |
|
|
|
6,216 |
7,524 |
|
|
|
---------- |
---------- |
| Current assets |
|
|
|
| Inventories |
|
2,190 |
2,945 |
| Trade and other receivables |
|
3,294 |
4,848 |
| Cash and cash equivalents |
|
2,906 |
2,028 |
|
|
|
---------- |
---------- |
|
|
|
8,390 |
9,821 |
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
|
---------- |
---------- |
| Total assets |
|
14,606 |
17,345 |
|
|
|
---------- |
---------- |
| Current liabilities |
|
|
|
| Trade and other payables |
|
2,380 |
3,463 |
| Provision |
|
397 |
1,110 |
| Deferred income |
|
184 |
568 |
| Financial liabilities |
|
63 |
177 |
| Lease liabilities |
|
542 |
662 |
|
|
|
---------- |
---------- |
|
|
|
3,566 |
5,980 |
|
|
|
---------- |
---------- |
| Non-current liabilities |
|
|
|
| Deferred Income |
|
128 |
- |
| Financial liabilities |
|
76 |
144 |
| Lease liabilities |
|
1,478 |
1,867 |
|
|
|
---------- |
---------- |
|
|
|
1,682 |
2,011 |
|
|
|
---------- |
---------- |
|
|
|
|
|
|
|
|
---------- |
---------- |
| Total liabilities |
|
5,248 |
7,991 |
|
|
|
---------- |
---------- |
|
|
|
---------- |
---------- |
| Net assets |
|
9,358 |
9,354 |
|
|
|
---------- |
---------- |
| Equity |
|
|
|
| Share capital |
6 |
10,795 |
10,794 |
| Share Premium |
7 |
11,039 |
11,000 |
| Translation Reserve |
|
(650) |
(552) |
| Retained earnings |
|
(11,826) |
(11,888) |
|
|
|
----------12,161 |
---------- |
| Total equity |
|
9,358 |
9,354 |
|
|
|
====== |
====== |
|
|
|
|
|
The total equity is attributable to the equity shareholders of the parent company Filtronic plc.
Company number 2891064
Richard Gibbs
Chief Executive Officer
Consolidated Statement of Changes in Equity
for the year ended 31 May 2021
|
|
Share capital |
Share premium |
Translation reserve |
Retained earnings |
Total equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
| Balance at 31 May 2019 |
10,789 |
10,715 |
(558) |
(9,933) |
11,013 |
| Loss for the year |
- |
- |
- |
(1,955) |
(1,955) |
| New shares issued |
5 |
285 |
- |
- |
290 |
| Share based payments |
- |
- |
117 |
- |
117 |
| Currency translation movement arising on consolidation |
- |
- |
(111) |
- |
(111) |
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
| Balance at 31 May 2020 |
10,794 |
11,000 |
(552) |
(11,888) |
9,354 |
|
|
|
|
|
|
|
| Profit for the year |
- |
- |
- |
60 |
60 |
| New shares issued |
1 |
39 |
- |
- |
40 |
| Share based payments |
- |
- |
- |
2 |
2 |
| Currency translation movement arising on consolidation |
- |
- |
(98) |
- |
(98) |
|
|
---------- |
---------- |
---------- |
----------- |
---------- |
| Balance at 31 May 2021 |
10,795 |
11,039 |
(650) |
(11,826) |
9,358 |
|
|
====== |
====== |
====== |
======= |
====== |
Consolidated Cash Flow Statement
for the year ended 31 May 2021
|
|
|
2021 |
2020 |
|
|
|
£000 |
£000 |
| Cash flows from operating activities |
|
|
|
| Profit/(loss) for the year from continuing operations |
|
60 |
(518) |
| Loss for the year from discontinued operations |
|
- |
(1,437) |
| Gain on sale of the Telecoms Antenna Operation |
|
- |
(671) |
| Taxation |
|
151 |
100 |
| Finance income |
|
- |
(36) |
| Finance costs |
|
431 |
280 |
|
|
|
---------- |
---------- |
| Operating profit/(loss) including discontinued operations |
|
642 |
(2,282) |
| Share-based payments |
|
2 |
- |
| Depreciation |
|
941 |
677 |
| Amortisation of intangible assets |
|
209 |
18 |
| Impairment of intangible assets |
|
45 |
89 |
| Movement in inventories |
|
626 |
(731) |
| Movement in trade and other receivables |
|
1,489 |
85 |
| Movement in trade and other payables |
|
(1,026) |
(1,054) |
| Movement in provisions |
|
(712) |
(1,155) |
| Change in deferred income |
|
(255) |
488 |
| Tax received |
|
495 |
1,227 |
|
|
|
---------- |
---------- |
| Net cash generated from/(used in) operating activities |
|
2,456 |
(2,638) |
|
|
|
---------- |
---------- |
| Cash flows from investing activities |
|
|
|
| Capitalisation of development costs |
|
(52) |
(678) |
| Acquisition of intangible assets |
|
(69) |
(27) |
| Acquisition of plant and equipment |
|
(177) |
(384) |
| Acquisition of right of use assets |
|
(106) |
(154) |
| Proceeds on sale of FTAO - net of sale costs |
|
- |
3,652 |
| Proceeds on sale of assets |
|
12 |
- |
|
|
|
---------- |
---------- |
| Net cash (used in)/generated from investing activities |
|
(392) |
2,409 |
|
|
|
---------- |
---------- |
| Cash flows from financing activities |
|
|
|
| Interest paid |
|
(225) |
(258) |
| Proceeds from bank loans |
|
131 |
192 |
| Repayment of bank loans |
|
(209) |
- |
| Exercise of employee share options |
|
40 |
290 |
| Repayment of lease liabilities |
|
(666) |
(375) |
| Repayment of interest-bearing borrowings |
|
(104) |
(202) |
|
|
|
---------- |
---------- |
| Net cash used in financing activities |
|
(1,033) |
(353) |
|
|
|
---------- |
---------- |
| Movement in cash and cash equivalents |
|
1,031 |
(582) |
| Currency exchange movement |
|
(153) |
(15) |
| Opening cash and cash equivalents |
|
2,028 |
2,625 |
|
|
|
---------- |
---------- |
| Closing cash and cash equivalents |
|
2,906 |
2,028 |
|
|
|
====== |
====== |
Notes to the Preliminary Financial Information
for the year ended 31 May 2021
1 Basis of Preparation
These preliminary results have been prepared on the basis of the accounting policies which are to be set out in Filtronic plc's Annual Report and financial statements for the year ended 31 May 2021.
In accordance with corporate governance requirements the directors have undertaken a review of forecasts and the Group's cash requirements to consider whether it is appropriate that the Group continues to adopt the going concern assumption.
At 31 May 2021, the Group had cash at bank of £2.9m and access to undrawn invoice discounting facilities of £3.0m and $4.0m in the UK and USA respectively (2020: undrawn).
As referred to in the Chairman's statement, the business continuity plans implemented during the Covid-19 pandemic have limited the adverse impact of Covid-19 and the business has sustained full 24/7 operational capability throughout the pandemic. Cash flow forecasts have been prepared to model various scenarios over a three-year period based on the Group's financial and trading position, principal risks and uncertainties and strategic plans. A downside scenario was modelled where sales were impacted by a range of adverse scenarios and forward-looking demand reduced to levels significantly lower than those initially modelled in the base case scenario.
A further model was prepared with a severe but plausible downside stress test applied to the downside model by assuming the loss of a significant contract within one its major customers. The scenarios modelled demonstrate the Group has adequate cash and borrowing capacity for the next twelve months despite the downside scenarios and therefore the directors continue to adopt the going concern basis to prepare the accounts.
There are a number of new standards, including, amendments to standards and interpretations that are effective for financial statements after this reporting period, but the Group has not adopted them early. None of these are expected to have a material impact on the results or financial position of the Group.
Whilst the information included in this preliminary announcement has been prepared on the basis of International Accounting Standards in conformity of the requirements of the Companies Act 2006, this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements within two months of this announcement.
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 May 2021 or 31 May 2020. The financial information for 2020 is derived from the statutory accounts for 2020 which have been delivered to the registrar of companies. The auditor has reported on the 2021 accounts; their report was:
(i) unqualified
(ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The statutory accounts for 2021 were finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the registrar of companies in due course.
Notes to the Preliminary Financial Information
for the year ended 31 May 2021
2 Segmental analysis
IFRS 8 requires consideration of the identity of the chief operating decision maker ('CODM') within the Group. In line with the Group's internal reporting framework and management structure, the key strategic and operating decisions are made by the Chief Executive Officer who reviews internal monthly management reports, budget and forecast information as part of this. Accordingly, the Chief Executive Officer is deemed to be the CODM.
The CODM has identified one operating segment within the Group as defined under IFRS 8. In turn, this is the only reportable segment of the Group as the entities in the Group have similar products and services, production processes and economic characteristics. Therefore, there is no allocation of operating expenses, profit measures or assets and liabilities to specific commercial markets.
Accordingly, the CODM assesses the performance of the operating segment on financial information which is measured and presented in a manner consistent with those in the financial statements by reference to Group results against budget.
The Group profit measures are adjusted operating profit and adjusted EBITDA, both disclosed on the face of the consolidated income statement. No differences exist between the basis of preparation of the performance measures used by management and the figures in the Group financial statements.
The Group has three customers representing individually over 10% of revenue each and in aggregate 87% of revenue. This is split as follows:
• Customer A - 35% (2020: 27%)
• Customer B - 33% (2020: 44%)
• Customer C - 19% (2020: 16%)
| Revenue by destination
|
Continuing operations |
Discontinued operations |
Total |
|||
|
|
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
| United Kingdom |
4,693 |
4,764 |
- |
- |
4,693 |
4,764 |
| Europe |
4,178 |
7,985 |
- |
- |
4,178 |
7,985 |
| Americas |
4,197 |
3,945 |
- |
65 |
4,197 |
4,010 |
| Rest of the World |
2,488 |
487 |
- |
991 |
2,488 |
1,478 |
|
|
--------- |
--------- |
---------- |
---------- |
---------- |
---------- |
|
|
15,556 |
17,181 |
- |
1,056 |
15,556 |
18,237 |
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|
|
Split of non-current assets by location |
|
2021 |
2020 |
|
|
|
|
|
|
£000 |
£000 |
|
|
|
|
|
|
|
|
||
| United Kingdom |
|
5,293 |
6,329 |
|
||
| Americas |
|
923 |
1,195 |
|
||
|
|
|
|
--------- |
--------- |
|
|
|
|
|
|
6,216 |
7,524 |
|
|
|
|
|
|
====== |
====== |
|
|
Non-current assets relate to property, plant and equipment, right of use assets, goodwill and other intangible assets and deferred tax.
Notes to the Preliminary Financial Information
for the year ended 31 May 2021
3 Exceptional items
Exceptional items are costs that are separately disclosed due to their material and non-recurring nature in order to reflect management's view of the underlying business.
Operating costs are stated after (crediting)/charging exceptional items as follows:
|
|
|
Year |
Year |
|
|
|
Ended |
Ended |
|
|
|
31 May |
31 May |
|
|
|
2021 |
2020 |
|
|
|
£000 |
£000 |
|
|
|
|
|
| Costs relating to the FTAO business disposal |
|
- |
145 |
| Restructuring costs |
|
- |
184 |
| Directors' resignation |
|
- |
240 |
| Historic claim |
|
(64) |
- |
|
|
|
---------- |
---------- |
|
|
|
(64) |
569 |
|
|
|
====== |
====== |
A provision relating to an historic claim is no longer required and has been credited to the income statement.
4 Earnings/(loss) per share
|
|
Continuing operations |
Discontinued operations |
Total Group |
|
|
|
||||||
|
|
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|
|
|
|||
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
| Profit/(loss) for the year |
60 |
(518) |
- |
(1,437) |
60 |
(1,955) |
|
|
|
|||
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
'000 |
'000 |
'000 |
'000 |
'000 |
'000 |
|
|
|
|||
| Basic weighted average number of shares |
213,397 |
211,021 |
213,397 |
211,021 |
213,397 |
211,021 |
|
|
|
|||
| Dilution effect of share options |
897 |
- |
897 |
- |
897 |
- |
|
|
|
|||
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
|||
| Diluted weighted average number of shares |
214,294 |
211,021 |
214,294 |
211,021 |
214,294 |
211,021 |
|
|
|
|||
|
|
|
---------- |
---------- |
---------- |
---------- |
---------- |
---------- |
|
|
|
||
| Basic and diluted earnings/(loss) per share |
|
0.03p |
(0.25p) |
- |
(0.68p) |
0.03p |
(0.93p) |
|
|
|
||
|
|
|
====== |
====== |
====== |
====== |
====== |
====== |
|
|
|
||
Notes to the Preliminary Financial Information
for the year ended 31 May 2021
5 Taxation
The reconciliation of the effective tax rate is as follows:
|
|
|
2021 |
|
2020 |
|
|
|
£000 |
|
£000 |
|
|
|
|
|
|
| Profit/(loss) before tax from continuing operations |
|
211 |
|
(429) |
| Loss before tax from discontinued operations |
|
- |
|
(2,097) |
|
|
|
--------- |
|
--------- |
| Profit/(loss) before taxation |
|
211 |
|
(2,526) |
|
|
|
====== |
|
====== |
|
|
|
2021 |
|
2020 |
|
|
|
£000 |
|
£000 |
| Profit/(loss) before taxation multiplied by standard rate of corporation tax in the UK - 19% |
|
40 |
|
(480) |
| Disallowable items |
|
213 |
|
286 |
| Deferred tax asset not recognised |
|
213 |
|
598 |
| Enhanced R&D tax credit |
|
(176) |
|
(630) |
| Adjustment in respect of prior year - R&D tax credit |
|
(371) |
|
240 |
| Foreign tax not at UK rate |
|
(15) |
|
25 |
| Derecognition of deferred tax asset |
|
247 |
|
61 |
|
|
|
--------- |
|
--------- |
| Taxation |
|
151 |
|
100 |
|
|
|
====== |
|
====== |
|
|
|
|
|
|
| Income tax charge attributable to: |
|
|
|
|
| Continuing operations |
|
151 |
|
89 |
| Discontinued operations |
|
- |
|
11 |
|
|
|
--------- |
|
--------- |
|
|
|
151 |
|
100 |
|
|
|
====== |
|
====== |
The main rate of UK corporation tax for the financial year was 19% whilst the US Federal Corporate tax rate is 21%. The deferred tax assets recognised in the year have been calculated at the rates expected to be in existence in the period of reversal.
On 3 March 2021, in the Budget, the UK government announced that the corporation tax rate will increase to 25% for companies with profits above £250,000 with effect from 1 April 2023, as well as announcing several other changes to allowances and treatment of losses. These changes were enacted on 24 May 2021.
Notes to the Preliminary Financial Information
for the year ended 31 May 2021
6 Share Capital
|
|
|
|
||
|
|
Ordinary shares of 0.1p each issued and fully paid |
|||
|
|
Number '000 |
£000 |
||
|
|
|
|
||
| At 1 June 2019 |
208,129 |
10,789 |
||
| Exercise of share options |
5,569 |
5 |
||
|
|
-------------- |
--------- |
||
| At 31 May 2020 |
213,698 |
10,794 |
||
| Exercise of share options |
717 |
1 |
||
|
|
------------ |
----------- |
||
| At 31 May 2021 |
214,415 |
10,795 |
||
|
|
======== |
====== |
||
All shares are allotted, called up and fully paid. Holders of the ordinary shares are entitled to receive dividends when declared and are entitled to one vote per share at meetings of the Company.
7 Share Premium
|
|
|
£000 |
|
|
|
|
|
|
| At 31 May 2019 |
|
10,715 |
|
| Exercise of share options |
|
285 |
|
|
|
|
----------- |
|
| At 31 May 2020 |
|
11,000 |
|
| Exercise of share options |
|
39 |
|
|
|
|
----------- |
|
| At 31 May 2021 |
|
11,039 |
|
|
|
|
======= |
|
8 Dividends
The directors are not proposing to pay a dividend for the year ended 31 May 2021 (2020: £nil).
Notes to the Preliminary Financial Information
for the year ended 31 May 2021
9 Analysis of net cash/(debt)
|
|
|
|
|
|
|
||||||
| Reconciliation of cash flow to movement in net cash/(debt) |
|
|
2021 |
2020 |
|
||||||
|
|
|
|
£000 |
£000 |
|
||||||
|
|
|
|
|
|
|
||||||
| Movement in cash and cash equivalents |
|
|
1,059 |
(582) |
|
||||||
| Movement in bank loans |
|
|
78 |
(92) |
|
||||||
| Movement in lease liability - plant and machinery |
|
|
546 |
(1,381) |
|
||||||
| Movement in lease liability - property lease |
|
|
(39) |
(1,148) |
|
||||||
| Effect of exchange rate fluctuations |
|
|
(181) |
(15) |
|
||||||
|
|
|
|
---------- |
---------- |
|
||||||
| Movement in net cash/(debt) |
|
|
1,463 |
(3,218) |
|
||||||
| Net opening (debt)/cash |
|
|
(710) |
2,508 |
|
||||||
|
|
|
|
---------- |
---------- |
|
||||||
| Net closing cash/(debt) |
|
|
753 |
(710) |
|
||||||
|
|
|
|
====== |
====== |
|
||||||
|
|
31 May 2020 |
Cash Flow |
Other movements |
31 May 2021 |
|
|
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
| Cash and cash equivalents |
2,028 |
1,059 |
(181) |
2,906 |
| Bank loans |
(209) |
73 |
5 |
(131) |
| Lease liability - plant and equipment |
(1,381) |
411 |
135 |
(835) |
|
|
--------- |
--------- |
--------- |
--------- |
| Net cash when including all debt except property leases |
438 |
1,543 |
(41) |
1,940 |
| Lease liability - property lease |
(1,148) |
255 |
(292) |
(1,185) |
|
|
--------- |
--------- |
--------- |
--------- |
| Net cash/(debt) |
(710) |
1,798 |
(333) |
755 |
|
|
====== |
====== |
====== |
====== |
Cash at bank earns interest at floating rates based on daily bank deposit rates. There are no restrictions on the availability of the cash and cash equivalents at 31 May 2021 (2020: £nil).
IFRS 16 requires the recognition of property leases on the balance sheet which is classified as a debt item.
2021 Final Results07:00:063 Aug 2021Results3165H