CHAMBERLIN PLC 16 April 2021
AIM: CMH
CHAMBERLIN PLC
("Chamberlin" or "the Company" or "the Group")
Interim Results
for the six months to 30 September 2020
Key Points
- H1 results from operations significantly improved compared to prior year despite headwinds due to COVID-19 and Brexit uncertainty.
- Revenues of £11.0m (2019: £12.8m) largely reflect impact of COVID-19 disruption which caused the closure of the Walsall foundry and machine shop in April 2020.
- In spite of the lower volumes, operating loss before non-underlying costs* reduced to £0.2m (2019: loss £1.0m).
Operating loss after non-underlying costs of £0.5m (2019: £1.7m). - Loss before tax of £0.6m (2019: loss of £1.8m).
- Net debt at 30 September 2020 of £4.7m (31 March 2020: £4.6m).
Post Balance Sheet Events
- The publication of the FY 2020 Accounts was delayed due, in part, to the impact of COVID 19 on the business and the audit process. In addition, the Company announced the loss of a major contract in December 2020 which has impacted on the Company's future prospects. This in turn led to the Company delaying publication of the FY 2021 Interim Results.
- Trading in the Company's shares on AIM has been suspended since 4 January 2021.
- The Company completed a £3.5m share placing and subscription on 26 March 2021 which has enabled the Company to proceed with finalising the FY 2020 Accounts and FY 2021 Interim Results. The Company is now well positioned to restructure and take advantage of future growth opportunities.
Chairman, Keith Butler-Wheelhouse, commented:
"Management are confident that sales at Chamberlin will stabilise in the first half of the 2021/22 financial year and will then grow from the post BorgWarner low, with the growth gathering pace in the second half. The Board expects growth from all business units and a return to profitability and cash generation post our restructuring."
*Underlying figures are stated before non-underlying costs (restructuring costs, hedge ineffectiveness, impairment, GMP equalization, onerous leases and share based payment costs) together with the associated tax impact.
Enquiries | |
Chamberlin plc | T: 01922 707100 |
Kevin Nolan, Chief Executive | |
Neil Davies, Finance Director | |
Cenkos Securities plc | T: 020 7397 8900 |
(Nominated Adviser and Broker) | |
Russell Cook, Katy Birkin | |
Peterhouse Capital Limited (Joint Broker) | T: 020 7469 0930 |
Heena Karani | |
Duncan Vasey |
1
Chairman's Statement
Chamberlin plc (AIM: CMH) announces its interim results for the six months ended 30 September 2020.
Revenues in the first six months reduced to £11.0m from £12.8m in the prior year, primarily reflecting the impact of COVID-19 induced shutdowns in April 2020 of our European automotive customer's sites. As a result of these closures, we were forced to shutdown our own operations at the Walsall foundry and machine shop in April. In the following five months, revenue for the Walsall foundry and machine shop recovered to around 96% of the comparable five-month period in the prior year.
Our Russell Ductile Castings foundry in Scunthorpe and Petrel, our hazardous area lighting business, both remained operational throughout the first half. Russell Ductile Castings have been able to capitalise on a reduction in foundry market capacity and the increasing demand for its products, with revenue 10% ahead of the previous half year. Petrel remained operational in the half-year, but was impacted by the impact of COVID-19 induced customer shutdowns and delays to the procurement of some large lighting projects. As a result, Petrel's revenue reduced by 34% to £1.1m (2019: £1.7m). However, the level of new orders has increased markedly and second half revenues are much improved.
Despite the overall reduction in revenue, the loss before taxation reduced to £0.6m in the first half from £1.8m in the prior year. Of this loss, £0.4m occurred during the enforced shutdown at Walsall in April. The reduction in losses compared to prior year was driven by tight cost control, an improved operational performance by Russell Ductile Castings, the ability to flex the workforce to the level of demand using the Government's furlough scheme and lower non-underlying costs of £0.2m (2019: £0.7m). Non-underlying costs included £0.1m of restructuring costs (2019: £0.7m).
Improved control of working capital and capital expenditure enabled net debt to increase only marginally to £4.7m from £4.6m at 31 March 2020.
Subsequent events
In December 2020, our principal customer BorgWarner gave notice of the early termination of all existing contracts, dealing a body blow to the company. This required Chamberlin to seek additional finance to remain solvent and pursue substantial further restructuring. A share issue was successfully undertaken in March 2021 generating £3.5m before costs.
The publication of these accounts was delayed until 16 April 2021 first by COVID-19, then by the loss of the BorgWarner contract and finally by the share issue.
Outlook
The Walsall foundry (including its associated machine shop) have experienced lower revenues in the second half, reflecting the progressive reduction in purchases from the historical principal customer BorgWarner. The prospects for utilisation of the machine shop remain unclear and the Board is continuing to review its options in the light of the continued reduction in purchases and the prevailing market conditions.
Meanwhile the prospects for growth at the Walsall foundry are encouraging. The casting of automotive turbocharger housings remains a dominant market for Chamberlin and demand across the sector remains stable. The capacity demands of BorgWarner previously left Chamberlin unable to supply prospective new, non-automotive customers, however, the Company is now able to exploit these new higher margin market opportunities. The Company is continuing with the cost reduction programme referred to above and further measures are planned. Overall, the headcount at 28 February 2021 was 239 and the restructuring programme plans to reduce the headcount to 138. The Board estimates that the annualised reduction in employment cost arising from the restructuring should not be less than £3.4 million.
Sales at RDC and Petrel in the second half are tracking ahead of the prior year and the outlook for both RDC and Petrel is encouraging, with the recent revenue growth expected to continue.
Management are confident that sales at Chamberlin will stabilise in the first half of the 2021/22 financial year and will then grow from the post BorgWarner low, with the growth gathering pace in the second half. The Board expects growth from all business units and a return to profitability and cash generation post our restructuring.
Keith Butler-Wheelhouse
Chairman
2
Consolidated Income Statement
for the six months ended 30 September 2020
Unaudited | Unaudited | |||||||||
six months ended | six months ended | Year ended | ||||||||
Note | 30 September 2020 | 30 September 2019 | 31 March 2020 | |||||||
# Non- | # Non- | # Non- | ||||||||
Underlying | underlying | Total | Underlying | underlying | Total | Underlying | underlying | Total | ||
£000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | ||
Revenue | 2 | 11,044 | - | 11,044 | 12,828 | - | 12,828 | 26,143 | - | 26,143 |
Cost of sales | (9,458) | - | (9,458) | (11,921) | - | (11,921) | (23,632) | - | (23,632) | |
Gross profit | 1,586 | - | 1,586 | 907 | - | 907 | 2,511 | - | 2,511 | |
Other operating expenses | 7 | (1,798) | (247) | (2,045) | (1,917) | (686) | (2,603) | (3,635) | (909) | (4,544) |
Operating loss | (212) | (247) | (459) | (1,010) | (686) | (1,696) | (1,124) | (909) | (2,033) | |
Finance costs | 3 | (99) | - | (99) | (147) | - | (147) | (310) | - | (310) |
Loss before tax | (311) | (247) | (558) | (1,157) | (686) | (1,843) | (1,434) | (909) | (2,343) | |
Tax expense | 4 | (104) | - | (104) | (143) | - | (143) | (50) | - | (50) |
Loss for the period | ||||||||||
attributable to equity holders | (415) | (247) | (662) | (1,300) | (686) | (1,986) | (1,484) | (909) | (2,393) | |
of the Parent Company | ||||||||||
Loss per share: | ||||||||||
Basic | 5 | (5.2)p | (3.1)p | (8.3)p | (16.3)p | (8.7)p | (25.0)p | (18.7)p | (11.4)p | (30.1)p |
Diluted | (5.2)p | (3.1)p | (8.3)p | (16.3)p | (8.7)p | (25.0)p | (18.7)p | (11.4)p | (30.1)p |
- Non-underlyingitems include restructuring costs, hedge ineffectiveness, impairment, GMP equalisation, onerous leases and share- based payment costs together with the associated tax impact as disclosed in note 7.
3
Consolidated Statement of Comprehensive Income
for the six months ended 30 September 2020
Loss for the period
Other comprehensive income
Ineffective portion of movement in cash flow hedges recycled to income statement
Movements in fair value of cash flow hedges taken to other comprehensive income
Deferred tax on movements in cash flow hedges
Net other comprehensive income/(expense) that may be recycled to profit and loss
Re-measurement (losses)/gains on pension scheme assets and liabilities
Deferred tax on re-measurement (losses)/ gains on pension assets and liabilities Net other comprehensive (expense)/ income that will not be reclassified to profit and loss
Other comprehensive expense for the period net of tax
Total comprehensive expense for the period attributable to equity holders of the Parent Company
Unaudited | Unaudited | |
six months ended | six months ended | Year ended |
30 September | 30 September | 31 March |
2020 | 2019 | 2020 |
£000 | £000 | £000 |
(662) | (1,986) | (2,393) |
124 | - | 138 |
(102) | (165) | (614) |
17 | 28 | 81 |
39 | (137) | (395) |
(611) | (261) | 460 |
116 | 50 | (87) |
(495) | (211) | 373 |
(456) | (348) | (22) |
(1,118) | (2,334) | (2,415) |
4
Consolidated Balance Sheet
at 30 September 2020
Unaudited | Unaudited | |||||
30 September | 30 September | 31 March | ||||
2020 | 2019 | 2020 | ||||
£000 | £000 | £000 | ||||
Non-current assets | ||||||
Property, plant and equipment | 6,809 | 7,714 | 7,209 | |||
Intangible assets | 303 | 264 | 341 | |||
Deferred tax assets | 657 | 820 | 611 | |||
7,769 | 8,798 | 8,161 | ||||
Current assets | ||||||
Inventories | 2,577 | 2,838 | 2,589 | |||
Trade and other receivables | 4,434 | 5,140 | 6,082 | |||
Cash at bank | 505 | 599 | 457 | |||
7,516 | 8,577 | 9,128 | ||||
Total assets | 15,285 | 17,375 | 17,289 | |||
Current liabilities | ||||||
Financial liabilities | 3,264 | 4,159 | 3,028 | |||
Trade and other payables | 5,937 | 5,153 | 7,481 | |||
9,201 | 9,312 | 10,509 | ||||
Non-current liabilities | ||||||
Financial liabilities | 1,941 | 2,491 | 2,037 | |||
Deferred tax liabilities | 57 | 35 | 39 | |||
Provisions | 200 | 200 | 200 | |||
Defined benefit pension scheme deficit | 2,442 | 2,791 | 1,959 | |||
4,640 | 5,517 | 4,235 | ||||
Total liabilities | 13,841 | 14,829 | 14,744 | |||
Capital and reserves | ||||||
Share capital | 1,990 | 1,990 | 1,990 | |||
Share premium | 1,269 | 1,269 | 1,269 | |||
Capital redemption reserve | 109 | 109 | 109 | |||
Hedging reserve | (260) | (41) | (299) | |||
Retained earnings | (1,664) | (781) | (524) | |||
Total equity | 1,444 | 2,546 | 2,545 | |||
Total equity and liabilities | 15,285 | 17,375 | 17,289 | |||
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Disclaimer
Chamberlin plc published this content on 16 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 April 2021 04:09:07 UTC.
