INDEX
1
Notice of Annual General Meeting
2
Notes to Notice of Annual General Meeting
GROUP STRATEGIC REPORT
3
Chairman’s Statement
6
Summary of Consolidated Statement of Profit or Loss
7
Objectives, Strategy and Business Model
12
Principal Risks and Uncertainties
14
Corporate Social Responsibility
DIRECTORS’ REPORTS
22Report of the Directors
25
Corporate Governance Report
28
Audit Committee Report
31
Directors’ Remuneration Policy and Report
38
Statement of Directors’ responsibilities in respect of the
Annual Report and the Financial Statements
AUDITOR’S REPORT
39Independent Auditor’s Report to the Members of Goodwin PLC
FINANCIAL STATEMENTS
49
Consolidated Statement of Profit or Loss
50
Consolidated Statement of Comprehensive Income
51
Consolidated Balance Sheet
52
Consolidated Statement of Changes in Equity
54
Consolidated Statement of Cash Flows
55
Notes to the Financial Statements
92
Company Balance Sheet
93
Company Statement of Comprehensive income
94
Company Statement of Changes in Equity
95
Notes to the Company Financial Statements
105
Alternative Performance Measures
106
FIVE YEAR FINANCIAL SUMMARY
FINANCIAL HIGHLIGHTS
Accounting policies
55
Estimates and judgements
62
Revenue
65
Alternative performance measures
105
Finance costs (net)
68
Right-of-use assets
71
Borrowings
77
Financial risk management
83
Subsequent events
90
Capital and reserves
81
Guarantees and contingencies
90
Segmental information
63
Capital commitments
90
Intangible assets
74
Staff numbers and costs
67
Cash and cash equivalents
77
Interest rate swap
88
Taxation
68
Company statements
92
Investments in subsidiaries
72
Trade and other
Deferred tax
80
Inventories
77
receivables
77
Dividend and capital
Property, plant and equipment
70
Trade and other
payables
79
expenditure policy
11
Provisions
80
Earnings per share
69
Related parties
90
GOODWIN PLC
www.goodwin.co.uk
Registered in England and Wales, Number 305907
Established 1883
Directors:
T. J. W. Goodwin
M. S. Goodwin
S. R. Goodwin
(Chairman)
(Managing Director)
(Managing Director)
Mechanical
Refractory
Engineering Division
Engineering Division
N. Brown
B. R. E. Goodwin
J. E. Kelly
(Non-Executive Director)
Secretary and registered office:
Registrar and share transfer office:
Mrs. J. L. Martin, L.L.B., A.C.I.S.
Computershare Investor Services PLC,
Ivy House Foundry, Hanley,
The Pavilions, Bridgwater Road,
Stoke-on-Trent, ST1 3NR
Bristol, BS99 6ZZ
Auditor:
RSM UK Audit LLP,
Festival Way, Festival Park, Stoke-on-Trent, ST1 5BB
NOTICE IS HEREBY GIVEN that the EIGHTY-NINTH ANNUAL GENERAL MEETING of the
Company will be held at 10.30am on Wednesday, 2nd October, 2024 at Crewe Hall, Weston
Road, Crewe, Cheshire CW1 6UZ for the purpose of considering and, if thought fit, passing the
following resolutions which are proposed as ordinary resolutions.
1.
To receive the Directors’ Reports and the audited financial statements for the year ended
30th April, 2024.
2.
To approve the payment of the proposed ordinary dividend on the ordinary shares.
3.
To re-elect Mr. N. Brown as a Director.
4.
To-re-elect Mrs. J. E. Kelly as a Non-Executive Director.
5.
To approve the Directors' Remuneration Report (excluding the Directors’ Remuneration
Policy) for the year ended 30th April, 2024, as stated on pages 33 to 37 of the Directors'
Report.
6.
To re-appoint RSM UK Audit LLP as auditor and to authorise the Directors to determine
their remuneration.
By Order of the Board
J. L. Martin
Secretary
Registered Office:
Ivy House Foundry,
Hanley, Stoke-on-Trent
6th August, 2024
1
NOTES TO NOTICE OF ANNUAL GENERAL MEETING:
1.
Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their
behalf at the meeting. A shareholder may appoint more than one proxy in relation to the Annual General Meeting
provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that
shareholder. A proxy need not be a shareholder of the Company. A proxy form which may be used to make such
appointment and give proxy instructions accompanies this notice.
2.
To be valid any proxy form or other instrument appointing a proxy must be received by post, by scanned copy sent to
proxies@goodwingroup.com or (during normal business hours only) by hand at Ivy House Foundry, Hanley, Stoke-on-
Trent, ST1 3NR no later than 10.30am on 30th September, 2024.
3.
The return of a completed proxy form or other such instrument will not prevent a shareholder attending the Annual
General Meeting and voting in person if he/she wishes to do so.
4.
Any person, to whom this notice is sent, who is a person nominated under section 146 of the Companies Act 2006 to
enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the shareholder by
whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the
Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it,
he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting
rights.
5.
The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 and 2 above does
not apply to Nominated Persons. The rights described in these paragraphs can only be exercised by shareholders of
the Company.
6.
To be entitled to attend and vote at the Annual General Meeting (and for the purpose of the determination by the
Company of the votes they may cast), shareholders must be registered in the Register of Members of the Company at
10.30am on 30th September, 2024 (or, in the event of any adjournment, 10.30am on the date which is two days before
the time of the adjourned meeting). Changes to the Register of Members after the relevant deadline shall be
disregarded in determining the rights of any person to attend and vote at the meeting.
7.
As at 5th August, 2024 (being the last business day prior to the publication of this Notice) the Company’s issued share
capital consists of 7,509,600 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company
as at 5th August, 2024 are 7,509,600.
8.
Shareholders should note that it is possible that, pursuant to requests made by shareholders of the Company under
section 527 of the Companies Act 2006, the Company may be required to publish on a website a statement setting out
any matter relating to: (i) the audit of the Company’s accounts (including the auditor’s report and the conduct of the
audit) that are to be laid before the Annual General Meeting; or (ii) any circumstance connected with an auditor of the
Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in
accordance with section 437 of the Companies Act 2006. The Company may not require the shareholders requesting
any such website publication to pay its expenses in complying with sections 527 or 528 of the Companies Act 2006.
Where the Company is required to place a statement on a website under section 527 of the Companies Act 2006, it
must forward the statement to the Company’s auditor not later than the time when it makes the statement available on
the website. The business which may be dealt with at the Annual General Meeting includes any statement that the
Company has been required under section 527 of the Companies Act 2006 to publish on a website.
9.
In order to facilitate voting by corporate representatives at the meeting, arrangements will be put in place at the
meeting so that (i) if a corporate shareholder has appointed the chairman of the meeting as its corporate
representative with instructions to vote on a poll in accordance with the directions of all of the other corporate
representatives for that shareholder at the meeting, then on a poll those corporate representatives will give voting
directions to the chairman and the chairman will vote (or withhold a vote) as corporate representative in accordance
with those directions; and (ii) if more than one corporate representative for the same corporate shareholder attends the
meeting but the corporate shareholder has not appointed the chairman of the meeting as its corporate representative,
a designated corporate representative will be nominated, from those corporate representatives who attend, who will
vote on a poll and the other corporate representatives will give voting directions to that designated corporate
representative. Corporate shareholders are referred to the guidance issued by The Chartered Governance Institute on
proxies and corporate representatives (www.cgi.org.uk) for further details of this procedure. The guidance includes a
sample form of representation letter if the chairman is being appointed as described in (i) above.
10.
None of the Directors has a service contract with the Company.
11.
If approved by shareholders at the Annual General Meeting on 2nd October, 2024, the ordinary dividends of 133 pence
per share will be payable in equal instalments of 66.5 pence per share on 4th October, 2024 and on or around 11th
April, 2025 to shareholders on the register on 13th September, 2024 and on or around 21st March, 2025 respectively.
2
GOODWIN PLC
CHAIRMAN’S STATEMENT
The “Trading” pre-tax profit for the Group for the twelve month period ended 30th April, 2024, was
£24.1 million (2023: £18.9 million) an increase of 27% on revenue of £191 million (2023: £186
million). As has been the case since 2022, the “Trading” pre-tax profit excludes the movement of
the mark to market valuation of our interest rate swap. The interest rate swap continues to benefit
the Group as it locked in a very preferential borrowing rate of less than 1% up to 2031 on the
Group’s first £30 million of debt. Currently, as of the date of writing this report, the Group’s
cumulative future orders stand at £264 million (August 2023: £271 million).
The Directors propose an increased dividend of 133 pence (2023: 115 pence) per share.
The Group has delivered a strong performance both financially and operationally, enabling
completion of investments for future long-term growth, as well as increasing shareholders returns
in the year. The continued increase in the performance of the Group in the financial year just
ended is a result of the hard work and strategy to break into new markets coming to fruition. The
profits have again taken a step forward as a direct result of the strategic investments that have
been made over the last decade, and particularly the supply of mission-critical, high integrity
components to the nuclear waste storage industry and key components for the naval propulsion
and hull construction markets from the Mechanical Engineering Division. During the year the
Group has, within its traditional markets, which include the supply of valves and submersible
pumps for the Mechanical Engineering Division, performed better than the previous year and the
Refractory Engineering Division has continued its development of the customer base for the
supply of the investment casting powders and ancillary products to the jewellery casting market.
Mechanical Engineering Division
I am pleased to report that the Mechanical Engineering Division has had a progressive year,
driven by an increase in activity levels of better quality contracts that have been won in the last
few years. The Division's profitability for the year ended 30th April, 2024 has increased by 55%
delivering a pre-tax profit of £18.9 million (2023: £12.2 million).
The increase in the volume of improved margin work has been achieved due to our highly trained
and skilled workforce, complimented by the annual addition of new apprentices, giving rise to
increased manufacturing capacity. Furthermore, working a three-shift system across many of its
operations has enabled the Division to progressively continue to ramp up activity levels so we can
satisfactorily process the order book that for many customers are multi-year programmes. It is
satisfying to note that even with this improvement in divisional activity, there remains room for
further growth across all companies, especially as the integration and alignment with our key
customers continues to develop and evolve.
The majority of the Division's forward order book relates to advanced solutions for the nuclear
waste storage industry and key components for the naval propulsion and hull construction sector.
From the discussions that the sales teams of both Goodwin International and Goodwin Steel
Castings have had with their key customers, it is expected that there will be more orders for the
same components in the coming years. Furthermore, a significant proportion of this workload
consists of repeat orders for components where we have already overcome many of the
manufacturing uncertainties, allowing us to realise future production efficiency gains on these
repeat components.
Easat Radar Systems now has a forward order book that should see it return to profitability this
coming year. The pipeline of opportunities continues to grow, with the level of engagement with
customers getting stronger as they recognise what Easat is capable of delivering. Taking a keen
interest in what is on the horizon for Easat, I have attended meetings to satisfy myself we have
the right contingent planning in place to deliver multiple
3
CHAIRMAN’S STATEMENT (continued)
simultaneous opportunities that are likely to transpire in due course. We cannot influence
customer timings, but can only reiterate that the Board continues to have confidence in Easat to
deliver the respectable results it is capable of in the near future.
The last major element of capital expenditure for the Group was Duvelco – for the initial polyimide
manufacturing facility, which is currently at the final stages of commissioning. With full production
expected to occur in the near future, Duvelco is actively having commercial discussions with
established distributors and end users. In addition to selling the polyimide resin powder, the
Group is in the process of making additional investments within its German based subsidiary,
Noreva, to directly manufacture the polyimide resin into pressed parts that are already commonly
purchased in the high-performance polyimide market.
Refractory Engineering Division
The Refractory Engineering Division has continued to move forwards its profitability, achieving
£13.5 million for the year ended 30th April, 2024, compared to £12.8 million in 2023, which
represents a 21.3% pre-tax profit margin (2023: 20.7%). The strengthening of Sterling over the
last twelve months, against the overseas subsidiaries' currencies, has reduced the reportable
profits and suppressed the true growth performance of the Division. There has also been a
market normalisation of reduced consumer spending post-COVID, but the Division continues to
display a strong performance.
Within the year, we have increased production capacity at Ultratec, our southern Chinese
investment powder manufacturing facility, to accommodate the growing local customer demand.
During the year, a restructuring and reorganisation operation was carried out in relation to our
companies in Thailand, resulting in operational cost savings of approximately half a million
pounds per annum post-completion.
Additionally, we are scheduled to be fully operational this year in the new Indian investment
powder manufacturing facility. This 76,000 square feet facility, built over the past two years, will
provide much-needed increased capacity to service current market requirements and support
significant market growth in India over the next five to ten years. Much of the growth in sales of
products to the jewellery casting markets in India is underpinned by domestic consumption, driven
by the ever-increasing levels of expendable income available to the population as the country
rapidly develops.
Sales of AVD fire extinguishers and extinguishing agents continue to grow, and we are excited
about the future of this product line. We have commenced production of specialist lithium fire
blankets within our India operations. These blankets, made from vermiculite dispersion-coated e-
glass fabrics, have significantly better thermal resistance properties than competitors' products
available in the market. The renovation of the newly acquired and equipped 50,000 square feet
facility in the UK is now complete. It accommodates our larger in-house vermiculite dispersion
plant, which produces the material that AVD is made from, as well as the AVD fire extinguisher
manufacturing and filling plant. We are awaiting certification from BSI for the fire extinguisher
production line and estimate we will begin filling and selling in-house produced extinguishers in
the second half of this financial year.
At Hoben International, we have gained planning approval for a 4.3 MW solar array field adjacent
to our manufacturing plant. However, despite being assured by the District Network Operator prior
to submitting the planning application that the local transformer and switch had adequate
capacity, we have now been told that we cannot have a connection. While frustrated by this
outcome, we are committed to finding a solution as soon as possible and will continue to fight for
our cause.
4
CHAIRMAN’S STATEMENT (continued)
Cashflow
As of 30th April, 2024, the Group’s net debt has reduced to £42.9 million from the net debt
position reported at 31st October, 2023, when it stood at £54.6 million, which corresponds to a
gearing ratio of 35.1%, down from 47.8% six months earlier.
The Group has demonstrated strong cash generation capabilities, reducing the net debt position
while still incurring £16.42 million of capital expenditures throughout the year and returning £17.5
million to shareholders, including a successful £8.9 million tender offer in May, 2023. Moving
forward, the cash generation throughout the Group companies remains robust. One of the factors
during the year that has contributed to the strong cash flows, is management’s focus to negotiate
and obtain multiple milestone payments on the longer-term contracts allowing us to increase
production levels without having to utilise our banking facilities to fund the work in progress.
Furthermore, over the last three years, due to the increased capital expenditure in the UK, the UK
companies have obtained a significant cashflow benefit from the first year capital allowance and
super deduction schemes that were in place in the UK. The net effect of these favourable tax
provisions has resulted in the UK companies deferring £8.1 million of UK corporation tax that
would have been payable. Further details can be found within note 9.
The Board's focus for the future remains on improving cash flows and managing working capital
efficiently as business activities increase.
Other than capital expenditure that is fully funded by customers and is cash flow neutral, for the
next three to four years the Board’s focus is on operational efficiency and obtaining output from
the substantial capital investments that have already been made on new product production lines
and increases in manufacturing capacity rather than embark on additional capital expenditure.
It is for this reason that moving forward the Group’s non-customer funded annual capital
expenditure will likely be only about one third of what it has averaged over the past three years.
This policy along with the substantial workload should result in continued significant cash
generation and the continuation of the dividend policy. Post year-end, the Group has renewed one
of its Revolving Credit Facilities, that was due to expire, for a four year term.
Over the past decade, the Group has achieved an average dividend growth rate of over 15% per
year, returning more than £60 million to shareholders and with the market capitalisation of the
Company in the year having risen to £512 million at 30th April, 2024 which is an increase of £221
million over the financial year, the Total Shareholders Return including the dividends paid over the
last 20 years is 4,632% (versus FTSE 100: 282%). See page 33 for full details. Furthermore, as
at the time of writing, the market capitalisation of the Group has continued to rise, leading to
Goodwin PLC’s inclusion in the FTSE 250 index.
We would like to take the opportunity of thanking all our employees, managers and Directors both
in the UK and overseas for working so hard to achieve the latest improved trading results, as well
as the long-term performance of the Group to date.
T. J. W. Goodwin
6th August, 2024Chairman
Alternative performance measures mentioned above are defined on page 105.
5
GOODWIN PLC
SUMMARY OF CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the year ended 30th April, 2024
2024*
2023*
Note
£’000
£’000
CONTINUING OPERATIONS
Revenue …
…
…
…
…
…
…
…
…
…
3, 4
191,258
185,742
Cost of sales
…
…
…
…
…
…
…
…
…
(113,371)
(116,973)
GROSS PROFIT *
…
…
…
…
…
…
…
…
…
77,887
68,769
Distribution expenses
…
…
…
…
…
…
…
…
(9,618)
(9,623)
Administrative expenses
…
…
…
…
…
…
…
(41,374)
(38,833)
OPERATING PROFIT …
…
…
…
…
…
…
…
…
26,895
20,313
Finance costs (net)
…
…
…
…
…
…
…
…
8
(2,870)
(1,438)
Share of profit of associate company
…
…
…
…
…
15
69
65
TRADING PROFIT
…
…
…
…
…
…
…
…
…
24,094
18,940
Additional year on year unrealised gain on
10 year interest rate swap derivative…
…
…
…
…
…
113
3,189
PROFIT BEFORE TAXATION
…
…
…
…
…
…
…
6
24,207
22,129
Tax on profit
…
…
…
…
…
…
…
…
…
9
(6,491)
(5,616)
PROFIT AFTER TAXATION…
…
…
…
…
…
…
…
17,716
16,513
ATTRIBUTABLE TO:
Equity holders of the parent
…
…
…
…
…
…
…
16,902
15,904
Non-controlling interests
…
…
…
…
…
…
…
814
609
PROFIT FOR THE YEAR
…
…
…
…
…
…
…
…
17,716
16,513
BASIC AND DILUTED EARNINGS PER ORDINARY SHARE (in pence)
10
224.53p
206.81p
*
The Board has taken the decision to present the statutory reporting of gross profit to allocate costs, which align more
appropriately with the Group’s operational structure and to ensure that the end user of the statutory accounts can review
the financial performance of the Group on the same basis as the Board. For further details please refer to the “Business
Diversity and Performance” section on page 9, and note 5 on page 66.
The full financial statements and accompanying notes are on pages 49 to 106.
6
OBJECTIVES, STRATEGY AND BUSINESS MODEL
The Group’s main OBJECTIVE and PURPOSE is to have a sustainable long-term engineering based
business with good potential for profitable growth while providing a fair return to our shareholders.
The Board’s VALUES of engineering excellence, quality, efficiency, reliability, competitive price and
delivery contribute to the delivery of its strategy.
The Board’s STRATEGY to achieve this is:
•
to supply a range of technically advanced products to growth markets in the Mechanical Engineering
and Refractory Engineering segments in which we have built up a global reputation for engineering
excellence, quality, efficiency, reliability, competitive price and delivery;
•
to manufacture advanced technical products profitably, efficiently and economically;
•
to maintain an ongoing programme of investment in plant, facilities, sales and marketing, research
and development with a view to increasing efficiency, reducing costs, increasing performance,
delivering better products for our customers, expanding our global customer base and keeping us at
the forefront of technology within our markets, whilst at all times taking appropriate steps to ensure
the health and safety of our employees and customers;
•
to control our working capital and investment programme to ensure a safe level of gearing;
•
to maintain a strong capital base to retain investor, customer, creditor and market confidence and so
help sustain future development of the business;
•
to support a local presence and a local workforce in order to stay close to our customers;
•
to invest in training and development of skills for the Group’s future;
•
engineering activity and investment into the reduction of CO2 emissions where it is commercially
viable taking into account the long-term effects of CBAM (Carbon Border Adjustment Mechanism);
•
to manage the environmental and social impacts of our business to support its long-term
sustainability.
BUSINESS MODEL
The Group’s focus is on manufacturing within two sectors, Mechanical Engineering and Refractory
Engineering, and through this division of our manufacturing activities, our overseas business facilities
and our global sales and marketing activities, the Group benefits from market diversity. Further details
of our business and products are shown on our website www.goodwin.co.uk.
Mechanical Engineering
The Group specialises in supplying precision engineered solutions and industrial goods into critical
applications, generally on a project basis, more often than not involving the complementary skill set of
other group companies to deliver the requirement. The projects normally involve international
procurement, high integrity castings, forgings or wrought high alloy steels, carbon fibre composite
structures, precision CNC machining, complex welding and fabrication, and other operations as are
required. In addition to specialist projects, the Group manufactures and sells a wide range of dual plate
check valves, axial nozzle check valves and axial piston control and isolation valves. These solutions
and products typically form part of large construction projects, including the construction of naval
propulsion and hull components, nuclear waste storage components, liquefied natural gas (LNG), gas,
oil, petrochemical, mining, and water markets.
We generate value by creating leading edge technology designs and manufacturing processes,
globally sourcing the best quality raw material at good prices, manufacturing in highly efficient facilities
using up to date technology to provide very reliable high performance products to the required
specification, at competitive prices and with timely deliveries.
The Group through its foundry, Goodwin Steel Castings Limited, has the capability to pour high
performance alloy castings up to 35 tonnes net in weight, radiograph and also finish CNC machine and
fabricate them at the foundry’s sister company, Goodwin International Limited. This capability is
targeting the naval defence industry and nuclear decommissioning, the oil and gas industry, as well as
large, global projects requiring high integrity machined castings.
7
OBJECTIVES, STRATEGY AND BUSINESS MODEL (continued)
Goodwin International Limited, the largest company in the Mechanical Engineering Division, not only
designs and manufactures dual plate check valves, axial nozzle check valves and axial piston control
and isolation valves but also undertakes specialised CNC machining and fabrication work for nuclear
decommissioning projects. Goodwin International Limited also has a division that is focused on
manufacturing / machining high precision, high integrity components for naval marine vessels. Noreva
GmbH also designs, manufactures and sells axial nozzle check valves and is building a facility to CNC
press polyimide components from Duvelco resin. Both Goodwin International Limited and Noreva
GmbH purchase the majority of their sand mould castings from Goodwin Steel Castings Limited for
their ranges of check valves and this vertical integration gives rise to competitive benefits, increased
efficiencies and timely deliveries.
At Goodwin Pumps India Private Limited we manufacture a superior range of submersible slurry
pumps for end users in India, Brazil, Australia, Canada, Peru and Africa. Easat Radar Systems Limited
and its subsidiary, Easat Finland Oy, design and build bespoke high-performance radar surveillance
systems for the global market of major defence contractors, civil aviation authorities and coastal border
security agencies. We create value on these by innovative design, assembly and testing in our own
facilities using bought in or engineered in-house components.
Duvelco, the newest company within the Mechanical Engineering Division, is a specialist polyimide
manufacturer, that will manufacture and sell polyimide resins into an established market that can then
be moulded into parts and shapes for the high temperature and critical applications, for which very few
polymers can be used.
Refractory Engineering
Within the Refractory Engineering Division, Goodwin Refractory Services Limited (GRS) generates
value primarily from designing, manufacturing and selling investment casting powders, injection
moulding rubbers and waxes to the jewellery casting industry. GRS also manufactures and sells these
products to the tyre mould and aerospace industries. The Refractory Engineering Division has five
other investment powder manufacturing and sales companies located in China, India and Thailand
which sell the casting powders, waxes and moulding rubbers directly and through distributors to the
jewellery casting industry and also directly to tyre mould and aerospace industries.
These companies are vertically integrated with another of our UK companies, Hoben International
Limited (Hoben), which manufactures cristobalite, which it sells to the six casting powder
manufacturing companies as well as producing ground silica that also goes into casting powders and
other UK uses of silica. Hoben also manufactures different grades of perlite, and a patented range of
biodegradable bags, known as Soluform, for use inside traditional hessian / jute bags for the
placement of concrete and other materials in or around rivers.
Dupré Minerals Limited (Dupré), a refractory company, focuses on producing exfoliated vermiculite that
is used in insulation, brake linings and fire protection products, including technical textiles that can
withstand exposure to high temperatures. Dupré also sells consumable refractories to the shell
moulding precision casting industry. Dupré has designed, patented and sells a range of fire
extinguishers and an extinguishing agent for lithium-ion battery fires that utilises a vermiculite
dispersion as the fire extinguishing agent.
8
OBJECTIVES, STRATEGY AND BUSINESS MODEL (continued)
BUSINESS DIVERSITY AND PERFORMANCE
“Trading” pre-tax profit for the Group for the year
ended 30th April, 2024 have increased 27% versus the
prior year.
The Mechanical Engineering Division has been the
driving force behind the increase, with its divisional
operating profits increasing by 55%. The Group’s
foundry, Goodwin Steel Castings, and the machine
shop, Goodwin International, have both delivered
improved results, both in terms of activity and margins.
The Division’s improved results were further supported
by the submersible pump company in Brazil
contributing similarly respectable profits in the year.
The Refractory Engineering Division delivered a
consistent level of operating profits, up 5% year on
year, the proportional split of operating profits for the
year has swung back in favour of the Mechanical
Engineering Division, as was expected. This 60:40 split
is expected to remain, moving forward, subject to the
speed that both sides bring online their respective
growth products.
Gross profit
The Board and management of the Group use
gross profit as one of the key metrics to manage the
performance of the Group. The Board has taken the
decision to present the statutory reporting of gross
profit to allocate costs, which align more
appropriately with the Group’s operational structure
and how it is calculated within the Group’s
management accounts, to ensure that the end user
of the statutory accounts can review the financial
performance of the Group on the same basis as the
Board. Historically, the calculation of cost of sales
within the statutory annual report included many
items that we deem internally as overheads. As a
result of this change the gross profit within the
Group profit and loss account has been amended
along with the gross profit %. These changes can
be seen on the next page within the Key
Performance Indicators table, where the changes
have been reflected within all of the years shown.
Diversification
The Group supplies a wide range of industries and
markets from 18 manufacturing locations in the UK,
Finland, Germany, South Africa, India, Thailand, China,
Australia and Brazil. During the year the geographical
split of the Group’s revenue continues to be well
spread. Whilst the United Kingdom is our largest
individual location, it is worth highlighting
that the segmental analysis, on page 64, is based on the geographical location of where our direct
customers are registered, which at times may not truly reflect the location of where the products are being
utilised. For instance, different countries will come to the prime contractors based in the United Kingdom to
procure components for ships that are being supplied to other countries, and our supply into these
programmes will continue to be shown within the United Kingdom segment.
9
OBJECTIVES, STRATEGY AND BUSINESS MODEL (continued)
KEY PERFORMANCE INDICATORS
The key performance indicators for the business are listed below:
The alternative performance measures referred to above are defined on page 105. The alternative
performance measures are important to management and the readers of the Annual Report in
assessing the Group’s performance and benchmarking it within its respective industries.
*
The gross profit percentages from 2015 to 2023 have been updated. Further details are included on
page 9.
10
OBJECTIVES, STRATEGY AND BUSINESS MODEL (continued)
DIVIDEND AND CAPITAL EXPENDITURE POLICY
The Board proposes to pay a dividend of 133 pence per share, up 16% on the previous year (2023:
115p). The proposed dividend has been calculated using the Group’s profit after taxation figure, plus
depreciation and amortisation for the year ending 30th April, 2024, after having excluded the non-cash
mark to market unrealised gain relating to the ten year interest rate swap.
During the year the Group has generated a significant quantum of cash in the second half of the year
to finish the year with a gearing ratio of 35.1% (31st October, 2023 47.8%). In the year a total of £17.5
million has been returned to its shareholders comprising a successful share buyback in May 2023,
where the aggregate number of 180,000 ordinary shares were repurchased by the company at a
tender price of £48 per share, and with the last dividend of 115p per share.
Similar to last year, the Board proposes to continue to smooth the Group's cash flow by splitting the
payment of the proposed ordinary dividends of 133 pence per share into equal instalments of 66.5
pence per share on 4th October, 2024 and on or around 11th April, 2025 to shareholders on the
register on 13th September, 2024 and on or around 21st March, 2025 respectively.
*Further details are included in the Alternative Performance Measures on page 105.
11
PRINCIPAL RISKS AND UNCERTAINTIES
The Group's operations expose it to a variety of risks and uncertainties. The Directors confirm that they continue to carry
out a robust assessment of the principal risks the Company faced, including those that would threaten its business model,
future performance, solvency or liquidity.
Market risk: The Group provides a range of products and services, and there is a risk that the demand for these products
and services will vary from time to time because of competitor action or economic cycles or international trade friction or
even wars. As shown in note 3 to the financial statements, the Group operates across a range of geographical regions,
and its turnover is split across the UK, Europe, USA, the Pacific Basin and the Rest of the World.
Operating in many territories helps spread market risk. Similarly, the Group operates in both Mechanical Engineering and
Refractory Engineering sectors, mitigating the impact of a downturn in any one product area as has been seen in recent
financial years.
The potential risk of the loss of any key customer is limited as no single customer accounts for more than 10% of annual
turnover.
As described in the Business Model, the Group generates significant sales from naval propulsion marine applications and
ship hull components as well as from valves it supplies to LNG, oil, chemical and water markets. The Mechanical
Engineering Division also sells submersible pumps that are supplied to the mining industries and radar systems that are
used for coastal surveillance and air traffic control applications. The Refractory Engineering Division sells vermiculite and
perlite to the insulating and fire prevention industry and our investment casting powder companies indirectly sell to the
jewellery consumer market through the supply of investment casting moulding powders, waxes, silicone and natural
rubber.
Technical risk: The Group develops and launches new products as part of its strategy to enhance the long-term value of
the Group. Such development projects carry business risks, including reputational risk, abortive expenditure and potential
customer claims which may have a material impact on the Group. The potential risk here is seen as manageable given the
Group is developing products in areas in which it is knowledgeable and new products are tested as far as possible prior to
their release into the market. The risk of product obsolescence is countered by research and development investment into
new products.
Product failure / contractual risk: The risks that the Group supplies products that fail or are not manufactured to
specification are risks that all manufacturing companies are exposed to but we try to minimise these risks through the use
of highly skilled personnel operating within robust quality control system environments, using third party accreditations
where appropriate. With regard to the risk of failure in relation to new products coming on line, the additional risks here are
minimised at the research and development stage, where prototype testing and the deployment of a robust closed loop
product performance quality control system provides feedback to the design department for the products we manufacture
and sell. The risk of not meeting safety expectations, or causing significant adverse impacts to customers or the
environment, is countered by the combination of the controls mentioned within this section and the purchase of product
liability insurance.
Supply chain and equipment risk: Failure of a major supplier or an essential item of equipment presents a constant risk
of disruption to the manufacturing in progress, especially during times of high inflation or increased shipping times and
costs. Where reasonably possible, management mitigates and controls the risk with the use of dual sourcing, continual
maintenance programmes, and by carrying adequate levels of stocks and spares to reduce any disruption.
Health and safety: The Group’s operations involve the typical health and safety hazards inherent in manufacturing and
business operations. The Group is subject to numerous laws and regulations relating to health and safety around the
world. Hazards are managed by carrying out risk assessments and introducing appropriate controls, as well as attending
safety training courses.
Acquisitions: The Group’s growth plan over recent years has included a number of acquisitions. There is the risk that
these, or future acquisitions, fail to provide the planned value. This risk is mitigated through financial and technical due
diligence during the acquisition process and the Group’s inherent knowledge of the markets they operate in.
Financial risk: The principal financial risks faced by the Group are changes in market prices (interest rates, foreign
exchange rates and commodity prices). As reported elsewhere within these financial statements, the Company, on 2nd
July, 2021 signed a contract to mitigate the impact of interest rate risk by taking out an interest rate swap derivative fixing
£30 million of notional debt at less than 1% versus the variable SONIA rate for a period of ten years, commencing 1st
September, 2021. Detailed information on the financial risk management objectives and policies is set out in note 28 to the
financial statements. The Group has in place risk management policies that seek to limit the adverse effects on the
financial performance of the Group by using various instruments and techniques, including credit insurance, stage
payments, forward foreign exchange contracts, secured and unsecured credit lines. Prior to the expiry date of the
Revolving Credit Facilities, the Board reviews the current and future requirements of the Group and arranges suitable
replacement facilities prior to the current facility expiring. Post year-end, the Group has renewed one of its Revolving
Credit Facilities, that was due to expire, for a four year term.
12
PRINCIPAL RISKS AND UNCERTAINTIES (continued)
Regulatory compliance: The Group’s operations are subject to a wide range of laws and regulations. Both within
Goodwin PLC and its subsidiaries, the Directors and Senior Managers within the companies make best endeavours to
ensure we comply with the relevant laws and regulations. The Group ensures that high ethical standards and values are
adopted, specifically with regards to sanctions, anti-corruption, anti-bribery and human rights. During the year, the Group
has carried out additional sanctions training and continued to refine and update its internal policies to reflect the
associated risks.
IT security: The Group performs regular and remote off-site backups of its IT systems, from time to time engaging
external companies to test and report any weaknesses and deficiencies found to enable solutions to be put in place to
mitigate and minimise the risk of an IT security breach.
Energy and Climate Change: The Group is actively developing and implementing its carbon neutral plan, which helps
mitigate the risk of the Group being exposed to the long-term effects of global warming and more specifically the upcoming
Carbon Border Adjustment Mechanism (CBAM) taxes that will likely ramp up over the next ten years, in addition to
significant increases in the cost of power that are a result of the fragile global energy system. The Group’s methods of
mitigation include fixed price energy contracts, incorporating price escalation clauses into the longer term contracts and
ultimately reducing the need to purchase energy from the national grid by installing renewable solutions like low cost solar
panels. To date the Group has installed 5.7MW of solar panels worldwide and despite the Distribution Network Operator in
the UK restricting future installations, planning has been obtained to install a further 5.3 MW of solar panels. Additional
information on the Group’s climate related risks and opportunities can be found within the Environmental section, on page
16.
13
CORPORATE SOCIAL RESPONSIBILITY
The Board as a whole is responsible for decisions relating to the long-term success of the Company and the way in which
their duties have been discharged during the year in terms of the strategic, operational and risk management decisions
and these can be found within the Strategic Report on pages 7 to 13.
As set out below and in line with Section 172 of the Companies Act 2006, through engagement the interests and views of
the Group’s employees and other stakeholders are considered by the Board within its decision-making process as well as
the impact they have on the environment, our reputation and the surrounding communities. Unless otherwise stated, the
principal decision made in the year, impacting its stakeholders, other than routine decisions that are made on a year-on-
year basis as part of running the business, such as setting the base increase in salaries, were a successful tender to buy
back 180,000 of ordinary shares at the tender price of £48 per share and increasing the Group’s charitable donations to
support the local community in the local Stoke-on-Trent area. The Board also made the decision to proceed with obtaining
planning for two solar array installations, with a combined power output of 5.3 MW, and, to plant over 500,000 trees as part
of its carbon offset scheme. Local authority planning permission has now been obtained for all three of these projects.
Non-Financial and Sustainability Information Statement
As per the latest disclosure requirement, under the Companies Regulations 2022, disclosures on Climate related financial
disclosures, Company’s employees, community issues, social matters, human rights and anti-corruption and bribery can
be found on pages 14 to 21 of the Annual Report.
Employees
Health and Safety: The Group acknowledges that many of its manufacturing processes and some materials that it
handles and sells are hazardous and that providing a safe environment for people at all of our facilities is an unconditional
priority for all of those charged with governance, in addition to each member of the workforce. In the year, as operations
change, the Group has managed the continually evolving risks that are inherent in manufacturing businesses by ensuring
risk assessments are carried out by all departments as soon as an operational change is envisaged. Such assessments
enable the introduction of the appropriate controls to help ensure that the workforce is protected from foreseeable hazards.
Furthermore, awareness and training to continually reduce risk and improve safety is a mind-set that is reinforced on a
daily basis through the Group’s global “Safety Spectrum” programme.
Employee consultation: The Group takes seriously its responsibilities to employees and, as a policy, provides
employees systematically with information on matters of concern to them. It is also the policy of the Group to consult
where appropriate, on an annual basis, with employees or their representatives so that their views may be taken into
account in making decisions likely to affect their interests. The Board considers the most effective form of engagement and
involvement of its employees for its size and complexity is by way of informal daily discussions between the employees,
the Senior Management and Board members who walk the floor, and the Company encourages its employees through its
salary and bonus arrangements. Engagement in the year is further supported through workforce representative meetings,
local working groups, team meetings, training, and an honest and open culture.
Employment of disabled persons: The policy of the Group is to offer the same opportunity, including training,
development and promotion, to disabled people, and those who become disabled, as to all others in respect of recruitment
and career advancement, provided their disability does not prevent them from carrying out the duties required of them in
accordance with the requirements of the Equality Act 2010.
Diversity Policy: The Group is committed to promoting diversity of gender, social and ethnic backgrounds and personal
strengths, in addition to ensuring that everyone has the same opportunities for employment and promotion based on
ability, qualifications and suitability for the work in question. The Group invests in training and development of skills for the
Group’s future and has a long-term aim that the composition of our workforce should reflect that of the community it
serves. The Group continues to strive to improve the balance of diversity by reviewing gender reporting and promoting
diversity through training and development, recruitment, our business culture and the Board’s Strategy. Whilst the senior
independent directorship is held by Jennifer Kelly, following the assessment that was carried out on 30th April, 2024, the
Board does not comply fully with the latest listing requirements that have come into effect, which require 40% of the Board
to be female and for at least one Board member to be from an ethnic minority background. Whilst we fully acknowledge
the necessity and benefits of a diversified leadership, we are unable to currently meet these specific targets due to the
Board consisting of primarily executive Directors because of its size and complexity, as set out on page 22. This coupled
with the fact that the appointments of the Board are made with the utmost consideration for the individual's qualifications,
experience, and ability to contribute to the strategic direction of the Company, we have found ourselves at present, based
on these criteria, unable to make the necessary adjustments without compromising the integrity and efficiency of our
Board. Nonetheless, we are continually examining ways of meeting these requirements over the long-term by continuing
to promote diversity at all levels of the Company, whilst also maintaining the Board's dynamism and the required level of
experience, ability and qualifications. The latest development is that, before the end of the calendar year 2024, the Board
expects to have appointed one additional Non-Executive Director to the Board, who will also sit on the Audit Committee
along with Jennifer Kelly and the Group Chairman, thereby putting the Group in line with Audit Committee composition
requirements, as set out within The Listing Rules.
14
CORPORATE SOCIAL RESPONSIBILITY (continued)
Diversity Policy: (continued)
The following tables set out the breakdown of our average number of employees and Board members by gender and age:
Breakdown by gender
Main Board and
Senior
Employees
Total
Year ended 30th April, 2024
Company Secretary
Management
Number of female employees
2
12
203
217
Number of male employees
5
65
938
1,008
Total number of employees
7
77
1,141
1,225
% of female employees
29%
16%
18%
18%
% of male employees
71%
84%
82%
82%
Breakdown by age
Main Board and
Senior
Employees
Total
Year ended 30th April, 2024
Company Secretary
Management
Number of employees aged 16-21
-
-
100
100
Number of employees aged 22-40
3
10
527
540
Number of employees aged 41-65
3
61
492
556
Number of employees aged over 65
1
6
22
29
Total employees
7
77
1,141
1,225
% aged 16-21
-
-
9%
8%
% aged 22-40
43%
13%
46%
45%
% aged 41-65
43%
79%
43%
45%
% aged over 65
14%
8%
2%
2%
Suppliers, Customers and Regulatory Authorities
The Board considers market trends regularly and reviews their likely long-term implications. Our business relationships
and procedures are developed over time and are regularly reviewed to ensure as a Group we conduct business
responsibly and sustainably. The Board, through its legal and compliance teams, continually monitors changes in
legislation and is committed to complying with all legal and regulatory requirements. Additionally, it acquires a first-hand
understanding of its business relationships and compliance through regular dialogue and site visits where appropriate.
Engagement is ensured from the initial tender processes to embedded sales and engineering project meetings and
reinforced by an open-door culture, whilst actively seeking feedback.
The five Executive Directors of the Board are actively involved with the day to day business and management of the
subsidiaries thereby allowing a good understanding of key members of the supply chain and also ensuring a fair purchase
culture.
Maintaining High Standards of Business Conduct
Ethics and Sustainability: We are committed to conducting business responsibly and ethically. We endeavour to ensure
that our staff, suppliers and business partners adopt the same or similar high ethical standards and values. This applies,
but is not limited to human rights, modern slavery, anti-bribery and corruption and is all enhanced by an anonymous
whistle-blowing system, which is rountinely reviewed and independently investigated if required.
Shareholders: Shareholder engagement occurs through the Annual Report, regulatory disclosures, our website, site visits
and the Annual General Meeting, coupled by supplementary RNS announcements made during the course of the year.
Throughout the year, the Chairman, on behalf of the Group, maintains an active dialogue with its shareholders, in order to
understand their views on governance and performance against the strategy, as well as providing its investors, including
institutional investors, an opportunity to ask questions, discuss the performance of the Group and make suggestions.
Further engagement is obtained through shareholder site visits, which are hosted directly by the Chairman and the other
members of the main Board. The Board aims to accommodate such requests as and when they are appropriate to do so.
The Group’s Directors and Non-Executive Director are also available before and after the Annual General Meeting to
discuss any matters shareholders might wish to raise. Such regular first-hand engagement with shareholders enables the
Chairman to provide the Board with updates so the views of shareholders are taken into consideration.
The Company has one class of ordinary shares, which have the same rights as regards voting, distributions and on
liquidation. Management are also significant shareholders in the Company, holding approximately 54.0% (2023: 52.74%)
of the register. In accordance with LR6.5, there is a controlling shareholder agreement in place.
15
CORPORATE SOCIAL RESPONSIBILITY (continued)
Maintaining High Standards of Business Conduct (continued)
Shareholders (continued)
Executive directors M.S. Goodwin, S.R. Goodwin, B.R.E. Goodwin and T.J.W. Goodwin are party to the controlling
shareholders agreement, as well as Audit Committee members, J.W. Goodwin and R.S. Goodwin. On this basis the Board
feels that the Executive Director’s vision is fully aligned with shareholders.
Communities: During the year the Group has continued to communicate to all employees our culture of responsibility and
support for local communities where possible. The Board encourages its sites to support their local communities through
charitable activities and initiatives to support the local area within which they operate. Engagement occurs through
dialogue with the local councils and charities.
Donations: The Group made no political donations during the year (2023: £nil). Donations by the Group for charitable
purposes amounted to £119,600 (2023: £91,000). The majority of these were made to local communities within the
Group’s operating environments.
Environment – Task Force on Climate-related Financial Disclosures (TCFD)
The following report includes the climate-related financial disclosures that are consistent with the eleven TCFD
recommendations. Climate change is a core challenge for the Group, as we transition and work towards becoming a
carbon neutral Group, whereby the carbon emitted from our activities is reduced and/or balanced by absorbing carbon
emissions. As an engineering Group, that includes a heavy goods steel foundry and high temperature refractory
processing business, the consumption of energy is an integral feature in the manufacture of the complex products that are
manufactured by the business. Over the past few years the Group has been actively developing and implementing our
carbon neutral plan and following a group wide assessment, we have set a target of becoming carbon neutral by 2035.
The initiative consists of five mechanisms to achieve our carbon neutral target:
Initiative
Description
Achievements to date
Future Plans
Mechanism
Reduce
Taking engineering steps
Modifications range from electric
Ongoing monitoring, review of
Consumption
to reduce our consumption
company cars, lighting, automatic
plant and modifications to our
of gas and electricity in our
switching off programming, base
manufacturing processes to
(Scope 1 & 2
companies by investing in
load monitoring and replacement of
reduce our overall energy usage,
more efficient plant and /
heavy duty fans, use of inverters that
CO2 emissions and waste.
emissions)
or changing our working
offer a greater power efficiency with
practices.
speed control. Compared to the
energy usage prior to the above
modifications, a reduction in excess
of 10% in electricity has been achieved.
Furthermore, changes within our
working practices specifically within
the foundry have enabled our overall
Scope 1 and 2 emissions during the
year to fall a further 11% despite
Goodwin Steel Castings activity
increasing by 36%.
Renewables
Utilisation of self-generated
To date, 5.7 MW of solar panels have
Over the short to medium term,
power through the use of
been installed around the Group,
now that planning has been
solar panels and wind
which as previously reported has
obtained from the local planning
turbines.
reduced our electricity purchased
authority, including Brassington,
from the grid by approximately 25%
a further 5.3 MW of solar power
versus when we did not have any
is planned and ready to be
solar panels.
installed but is now pending
The Group has also recently received
permissions from the Distribution
Network Operator.
planning permission to install a 5.3
MW of solar panels at its site in
Installation of two wind turbines
Brassington and Hanley, which will
at Hoben International has been
reduce the number of kwh currently
investigated and is currently
being purchased by a further 18%
subject to confirmation of the
once the Distribution Network
Government's onshore wind
Operator (DNO) provides connectivity.
policy.
Hydrogen
Finding and investing in a
Following extensive research with
Continue to seek alternatives to
hydrogen generation power
the use of a wind and solar powered
operating a 1580 degree Celsius
plant solution that can
electrolysis machine, hydrogen was
process without the use of natural
replace the natural gas
identified as a carbon free alternative
gas and / or obtain Government
utilised in our more energy
for our continuous gas burning
support for a green hydrogen
intensive processing
process. A bespoke first in class
plant.
activities.
solution was designed but following
two unsuccessful grant applications
the project is on hold due to it not
being commercially viable without
the support of Government.
16
CORPORATE SOCIAL RESPONSIBILITY (continued)
Environment – Task Force on Climate-related Financial Disclosures (TCFD) (continued)
Initiative
Description
Achievements to date
Future Plans
Mechanism
Offsetting
Investing in land suitable for
With the knowledge that the Group
We are pragmatically working
planting trees to offset the
would not be able to naturally reduce
on obtaining the best pricing for
CO2 that is generated from
its carbon footprint to zero, it has
the planting of the trees. Stage
activities that cannot be
purchased a 1,180 acre site in Wales
1 planting will commence at the
removed by the above three
and has now obtained planning
next appropriate planting
mechanisms.
permission to plant over 500,000 trees
window. It is expected that the
that will generate in the region of
entire scheme will be planted
120,000 tonnes of CO2 offset credits
within the next two to three
over the next 55 years. This will
years.
offset more than 100% of our steel
foundry’s gas consumption, the
largest gas consumer within the
Mechanical Engineering Division of
the Group.
3rd Party
Take strategic steps to
The Group has developed a draft
The Group endeavours to
Emissions
reduce Scope 3 emissions
Scope 3 emissions plan and with the
complete a comprehensive
that are produced not by the
help of a third party the Group has
assessment of our Scope 3
(Scope 3
Company itself but by those
started to quantify its Scope 3
emissions for the entire Group,
indirectly responsible within
emissions throughout the Corporate
enabling it to then analyse and
emissions)
its value chain.
Value Chain for 2 of its major
set specific Scope 3 medium
subsidiaries. A hybrid approach has
term KPIs to reduce them in the
been employed, using primary data
coming years.
if it was available and if not,
secondary data was sourced from
averaged data sets or financial
modelling using approved Scope 3
evaluator software.
Over the past five years, the Group has managed to reduce its overall Scope 1 and 2 emissions by 48%, even though
over the same time period the Group’s activity levels in terms of revenue has increased by 50%. This achievement is
highlighted through the Intensity Ratio that the Board uses as its key environmental KPI to measure its performance within
this area. Since April 2019 the Intensity Ratio has reduced by 67% from 372 tonnes per £1 million to 121 tonnes per £1
million of revenue.
The reason why we are only taking a fifty-five year view on the offsetting produced by the woodland project, despite the
fact that it will generate credits for one hundred years, is that by 2079 all electricity, used by the Group, will be generated
by green methods and all hydro carbon needed for very high temperature processing applications is expected to have
been converted to hydrogen, which will be generated using green electricity.
17
CORPORATE SOCIAL RESPONSIBILITY (continued)
Environment – Task Force on Climate-related Financial Disclosures (TCFD) (continued)
Governance
The Board has overall accountability for the management of all climate change related risks and opportunities, as well as
being responsible for the day to day implementation, monitoring and management of our climate goals. Climate-related
risk is considered by the Board as a standalone agenda item and accordingly receives regular updates on its
environmental assessments, commitments and performance from the respective individuals around the Group that have
been tasked with a climate-related job to carry out. The updates are obtained as and when matters and opportunities
arise, at which point they are then relayed on to the rest of the Board. The Group’s Audit Committee supports the Board in
ensuring climate-related issues are integrated into the Group’s activities and risk management processes, in addition to
reviewing and recommending policy proposals to the Board.
Risk Management
Climate change related matters are monitored by the Board and Audit Committee to ensure that they are embedded in our
risk management and planning process, in addition to our long-term strategic decision-making. Initially, climate-related
risks are identified through a combination of engagement, industry benchmarking, and analysis of regulatory and
environmental trends. This involves gathering insights from various sources, including scientific research, policy
developments, and input from key stakeholders. Once identified, these risks are evaluated based on their potential
financial and operational impacts using a materiality assessment.
Furthermore, the Board is directly able to determine which risks and opportunities could have a material impact on the
Group, as well as how to prioritise them, by having a flat management structure and taking a hands-on approach so that
they are actively immersed within all aspects of the business and each subsidiary.
It is the opinion of the Board that, with the Group's activities on green projects, climate change will have no significant
effect on the Group's financials, including:
1.
Contract profitability. Whilst there will be fewer contracts for the oil and gas markets, we have already substituted a
significant proportion of these contracts with new naval propulsion and hull component supply and nuclear waste
storage component activity. Whilst cost increases can be expected, the Group has the ability to pass these costs on to
the customers through the use of short validity periods on quotes as well as building in escalation clauses within its
longer term contracts. The fact that it is Group policy to manufacture and sell products with high technology and high
gross margins assists in insulating the Group from high energy costs.
2.
Going Concern of any Group company, as bank facilities will continue to be available and with the Group's strong cash
generation, it has the ability to reduce its debts at a faster rate, should it so wish.
3.
Cash flow, generating our own green electricity is a much lower cost than buying electricity from the grid and our
investments are self-financing and will ultimately save the Group significant money over the life of those assets and
projects.
4.
Carrying value and useful economic life of the Group's plant and equipment, investment and intangibles.
Had we still been heavily dependent on oil and gas project contracts and had done nothing on green power investments
the stated situation above would be different.
18
CORPORATE SOCIAL RESPONSIBILITY (continued)
Environment – Task Force on Climate-related Financial Disclosures (TCFD) (continued)
Metrics and Targets
Due to the diversification of our products and markets and for the type of energy intensive company it is, the Board has
determined that the total of Scope 1 and Scope 2 emissions versus alternatives is the most appropriate metric to use to
assess climate-related risks and opportunities in line with its strategy and risk management process. The Group's key
performance business metric is tonnes of CO2 emitted per £1 million pounds of turnover of the Group. See below for a
graphical disclosure of our historic emissions, achieved reduction and forecast target of being carbon neutral by 2035.
Scope 1 and 2 Emissions Data
Carbon Neutral target, whilst possible, is heavily dependent on our gas usage and the Government providing support to
industry to bridge the cost gap that will enable companies to invest in alternatives such as green hydrogen. Until this
occurs, the Group will not be able to reach its carbon neutral target as incurring the full cost that would be involved would
be unviable and not possible.
We calculate our GHG emissions using the GHG Protocol Corporate Accounting and Reporting Standard (revised edition).
19
CORPORATE SOCIAL RESPONSIBILITY (continued)
Environment – Task Force on Climate-related Financial Disclosures (TCFD) (continued)
Strategy
In line with the Task Force on Climate-related Financial Disclosures (TCFD) reporting requirements and in conjunction with
our detailed assessment that has been carried out against the TCFD guidance, the following table sets out the impact of
the short, medium and long-term risks and opportunities that the Group has identified in relation to climate change.
Policy & Legal
Technology Shifts
End Demand
Reputational
Physical
TCFD
Time
**
Frame*
offset programme &
reduction activities.
reducing
with carbon
emissions
tonne emitted.
Medium
scenarios by the likely
neutral
support from Gov.
of Green Hydrogen
standards leading to increased investment into
environmental
equipment and higher supply chain and material
– growth in EV
powered manufacturing processes onto a green
>3°C
exposure continues
to fall as the Group
Transition away
Risk: Reduced gross margin from sales of valves to
focuses on alternative
<2°C
Exposure has reduced
from 60% to 24%
>3°C
Cost of Capital
becomes tied to high levels of sustainability
Initiative
<2°C
Long
>3°C
Long
Employee Risk
be difficult due to increasing concerns of working
Initiative
<2°C
Long
>3°C
diversification
revenue.
<2°C
Long
Climate Events
>3°C
Business Continuity
plans
<2°C
Long
20
CORPORATE SOCIAL RESPONSIBILITY (continued)
Environment – Task Force on Climate-related Financial Disclosures (TCFD) (continued)
Strategy (continued)
* Short < 5 yearsMedium – up to 2035Long – 2035-2050
**
Polarisation scenario (>3ºC)
Our Polarisation Scenario sees a world where climate action is delayed by the polarisation of climate action.
This delay results in a world where physical climate change risks are the greatest across our two scenarios.
Paris Alignment Scenario (2-3ºC)
This scenario sees a market and society-led rapid transition to a lower carbon future through global Government
commitments to the Paris Agreement. This would result in increased regulation of climate action and a reduction of the
physical impacts of climate change compared with our Polarisation scenario.
For assessing the two scenarios and the impact of climate change on our business, we have completed in-house
assessments. The inputs included reviews of our product groups and our manufacturing sites. It was carried out by the
Board and senior management as well as having input from third party specialists as and when it has been required. The
source of the scenarios utilised has been a combination of publicly available ones that have been developed by policy
groups, which we have then adapted to be Company specific. For further details on the business resilience and the
measures being taken to increase the Group’s resilience to the identified climate change risks, see pages 16 to 17. The
measures include reducing consumption of power through process modifications, utilisation of renewables and hydrogen,
carbon offsetting via a woodland project and working with our value chain.
FORWARD-LOOKING STATEMENTS
The Group Strategic Report contains forward-looking type statements and information based on current expectations, and
assumptions and forecasts made by the Group. These expectations and assumptions are subject to various known and
unknown risks, uncertainties and other factors, which could lead to substantial differences between the actual future
results, financial performance and the estimates and historical results given in this report. Many of these factors are
outside the Group’s control. The Group accepts no liability to publicly revise or update these forward-looking statements or
adjust them for future events or developments, whether as a result of new information, future events or otherwise, except
to the extent legally required.
The Group Strategic Report was approved by the Board on 6th August, 2024 and is signed on its behalf by:
T. J. W. GoodwinM. S. GoodwinS. R. Goodwin
DirectorDirectorDirector
21
DIRECTORS’ REPORTS
REPORT OF THE DIRECTORS
The Director’s have pleasure in presenting their reports and audited financial statements for the year ended 30th April,
2024.
The Directors’ have presented their Group Strategic Report on pages 3 to 21. The Group Strategic Report is intended to
be an analysis of the development and performance of Goodwin PLC and contains a description of the principal risks and
uncertainties facing the Group and an indication of likely future developments and the required statements under Statutory
Instrument 2008/410 Schedule 7 of the Companies Act 2006. The Chairman’s Statement is part of the Group Strategic
Report of the Directors for the year and provides the financial review, including some of the key performance indicators
and future trends of the business. Also included in the Group Strategic Report for the year are the Group’s Objectives,
Strategy and Business Model on page 7, Principal Risks and Uncertainties on pages 12 and 13, and the Corporate Social
Responsibility Report on pages 14 to 21.
The Board considers that the Chairman’s Statement, the Group Strategic Report, the Directors’ Reports and the Financial
Statements, taken as a whole, in their opinion, are fair, balanced and understandable and that they
provide the information considered appropriate for shareholders to assess the Group’s position and performance during
the financial year and at the year end, and to assess the business model and strategy.
Proposed ordinary dividends
The Directors’ recommend that an ordinary dividend of 133 pence per share (2023: 115p) be paid in equal instalments of
66.5 pence per share on 4th October, 2024 and on or around 11th April, 2025 to shareholders on the register on 13th
September, 2024 and on or around 21st March, 2025 respectively. The ordinary dividend is subject to the approval of the
shareholders at the Annual General Meeting on 2nd October, 2024.
See comments on page 11 regarding the Dividend Policy.
Directors
The Directors of the Company who have served during the year are set out below.
M. S. Goodwin (Mechanical Divisional Managing Director)
S. R. Goodwin (Refractory Divisional Managing Director)
T. J. W. Goodwin (Chairman)
B. R. E. Goodwin
N. Brown
J. E. Kelly (Non-Executive Director)
The Chairman and the Divisional Managing Directors do not retire by rotation.
No Director has a service agreement with the Company, nor any direct beneficial interest in the share capital of any
subsidiary undertaking. The Chairman does not have any other significant external appointments.
Shareholdings
The Company has been notified that as at 2nd August, 2024, the following had an interest in 3% or more of the issued
share capital of the Company:
M. S. Goodwin, S. R. Goodwin, T.J.W. Goodwin and B. R. E. Goodwin 3,755,161 shares (50.0%). These shares are
registered in the name of J. M. Securities (No. 3) Limited. J. H. Ridley 500,709 shares (6.67%) and Rulegale Nominees
Limited (JAMSCLT) 355,990 shares (4.74%).
In line with LR 9.2.2AD R (1), relating to Controlling Shareholders, the Company confirms that a written and legally binding
agreement is in place, and has complied with the independence provisions set out in LR 6.5.4 R. The Company confirms
that, as far as it is aware, the controlling shareholders have complied with the agreement.
Share capital
The Company’s issued share capital comprises a single class of share capital which is divided into ordinary shares of 10p
each. Information concerning the issued share capital in the Company is set out in note 26 to the financial statements on
page 81 and 82.
The Company announced on 5th May, 2023 that it was proceeding with a Tender offer to tender up to 180,000 of its 10p
ordinary shares at the tender price of £48 per ordinary share. The tender offer was subsequently approved at a General
Meeting that was held on 30th May, 2023 and the following day the offer ended. The offer was oversubscribed by 229%
and, of the total number of Ordinary Shares validly tendered, all 180,000 Ordinary Shares have been purchased by the
Company and on 7th June, 2023 were cancelled off the register. The total cost of Ordinary Shares purchased was £8.87
million. The resulting number of shares as at 6th August, 2024 is 7,509,600.
All of the Company’s shares are ranked equally and the rights and obligations attaching to the Company’s shares are set
out in the Company’s Articles of Association, copies of which can be obtained from Companies House in England and
Wales or by writing to the Company Secretary. The Directors of the Company do not have any on-going powers in relation
to the purchase of its own shares and there are no restrictions on the voting rights of shares and there are no restrictions
in their transfer other than:
•
certain restrictions as may from time to time be imposed by laws and regulations (for example, insider trading laws); and
•
pursuant to the Market Abuse Regulation whereby Directors of the Company require approval to deal in the
22
DIRECTORS’ REPORTS
REPORT OF THE DIRECTORS (continued)
Share capital (continued)
Company’s shares.
Additionally, the Company is not aware of any agreements between shareholders of the Company that may result in
restrictions on the transfer of ordinary shares or voting rights.
Research and development
A key priority of the Group is to invest in research and development so as to ensure new products, techniques and
efficiencies are continually contributing to the performance of the Group. For the year ended 30th April, 2024 the research
and development primarily focused on further developing the products that are already manufactured and sold by the
various subsidiaries. Within Goodwin Steel Castings, the team has been working on material and process advancements
to yield improved mechanical and metallurgical properties in support of our customers' requirements. Dupré has been
successfully developing its range of fire extinguishers for lithium-ion battery fires so that they are not only compliant with
the KIWA test standard, which is one of the early certification schemes that exists for lithium-ion battery fires, but that the
products' superior technical advantages are accentuated within varying extinguisher arrangements that can apply.
Duvelco, alongside of the commissioning of the production plant, has been developing additional chemical formulations of
polyimide to the PMDA/4’4-ODA chemistry already developed.
Change in control
The Group’s committed loan facilities include a change of control clause, which states that a change of control of the
parent Company will be classed as an event of default and would enable the providers at their discretion to withdraw the
facilities.
Stakeholders relations
All shareholders are encouraged to participate in the Company’s Annual General Meeting. No shareholder meetings have
been called to discuss any business other than ordinary business at the Annual General Meeting.
The Board complies with the recommendations of the UK Corporate Governance Code that the notice of the Annual
General Meeting and related papers should be sent to shareholders at least twenty working days before the meeting.
The Directors attend the Annual General Meeting. The Chairman and other members of the Board and the Chair of the
Audit Committee and Audit Committee members will be available to answer questions at the forthcoming Annual General
Meeting. In addition, proxy votes will be counted and the results announced after any vote on a show of hands.
The Chairman ensures that the views of shareholders are communicated to the Board as a whole, ensuring that Directors
develop an understanding of the views of shareholders. Any individual requests for information from shareholders are
dealt with by the Chairman, and where any such requests are subject to restraint in that where any disclosure would give
rise to share price sensitive information, then the requests would be declined, or referred to the Board for release to all
shareholders through the Stock Exchange RNS.
Engagement with the Group’s suppliers, customers and other stakeholders can be found within the Strategic Report on
pages 14 to 16.
Going concern
The Directors, after having reviewed the Group forecasts and possible challenges that may occur over the short to
medium term, are confident that the Group has adequate resources to continue to operate for at least twelve months from
the date that these financial statements are approved and have continued to adopt the going concern principle in
preparing these financial statements.
As at 30th April, 2024, the Group’s gearing ratio stood at 35.1% (2023: 26.3%) against a substantial shareholders’ net
worth of £122 million (2023: £125 million). The retained reserves of the Group put it in a strong position to deal with any
material unforeseen adverse issues that may occur and have an impact on the Group's operations.
As part of the going concern process, the Group forecasts are stress tested by being subject to a number of severe but
conceivable financial challenges to ensure that the Group finances remain robust throughout the period being tested. The
stress test model begins with the Group forecasts, that have been consolidated from the individual forecasts generated by
the Directors of each of the subsidiaries and reflects their specific knowledge of their business and the markets, within
which they operate, to ensure that the forecasts that they produce reflect the market conditions, the business strategy and
expected outlook. Each of these subsidiary level forecasts is then reviewed, challenged and approved by the relevant
Divisional Managing Director, who is immersed in each of these businesses knows and understands each of their markets.
As the Group is so diverse, with two divisions in different sectors and multiple products within each division, several stress
test events are used to reduce the pre-tax profit forecasts by reducing revenues and consequently the pre-tax profit. Due
to the diversity, it is feasible that one or two events could take place, but it is highly improbable that all the stress test
events would occur at the same time. The stress tests implemented reduced revenues and consequently pre-tax profits,
which for these stress tests implemented reduced pre-tax profit by a combined amount of 44%, without reducing the
discretionary capital expenditure programme, maintaining overheads at their current expected levels, maintaining the
dividend policy and utilising the finance facilities at the same amounts that will be in place twelve months from the signing
of these accounts. The results of the stress test modelling did not highlight any going concern issues, breaches of
covenants or requirements for any further financing facilities in addition to those currently in place at year end. Post year
end, the Group has renewed one of its Revolving Credit Facilities,
23
DIRECTORS’ REPORTS
REPORT OF THE DIRECTORS (continued)
Going concern (continued)
that was due to expire, for a four-year term.
Whilst our carrying values of trade debtors and contract assets are significant, we see little risk here in terms of recovery
due to the quality of the customers that the Group contracts with. Where possible, we credit insure the majority of our trade
debtors and our pre-credit risk (work in progress), and for significant contracts where credit insurance is not available we
ensure, where possible, that those contracts are backed by letters of credit or cash positive milestone payments.
As discussed elsewhere within these accounts, the Mechanical Engineering order book remains high and the Refractory
Engineering segment continues to be buoyant.
The Directors are confident that the Group and Company will have sufficient funds to continue to meet their liabilities as
they fall due for at least twelve months from the date of approval of the financial statements and therefore have prepared
the financial statements on a going concern basis.
Viability Statement
In accordance with provision 31 of the UK Corporate Governance Code the Directors have assessed the Group’s viability
over a three year period to 30th April, 2027.
While the Board has no reason to believe that the Group will not be viable over a longer period, the Board believes that a
three year review period is prudent, and provides the readers of the report with a degree of confidence of the longer
viability of the Group.
In addition to the going concern review process, the Board has considered the impact of several possible adverse events
over an extended period (two more years, taking the total review period to 30th April, 2027), where it has predicted a
severe reduction in the pre-tax profit forecasts for each year. These extended possible adverse event scenarios, using the
same logic as outlined in the stress model within the going concern review section, have been modelled by reducing
revenues each year that consequently reduce pre-tax profits by a combined amount of 44% each year from the base case
forecast. The Board did see that the extended stress testing modelling would require lower capital expenditure than under
non stress test circumstances in the second and third years, but they did not foresee any reductions in either the Group
overheads or the dividend policy, which both could be reduced to offset an extended downturn in pre-tax profits, if
required. The results of the stress testing showed that the Group did not breach any of its banking covenants and has
sufficient financing facilities in place to deal with these extended adverse events and, given that the majority of the capital
expenditure policy is discretionary, the amounts included could be reduced further and that the overheads and dividend
policy could be reviewed and changed accordingly. Further resilience is obtained by the diversification of the Group, as
explained in more detail within the Going Concern commentary.
The workload within the Mechanical Engineering Division remains high and this is underpinning the performance in the
short to medium term. The Refractory Engineering Division remains buoyant in its core traditional sectors as well as
having additional newer products, that are gaining traction with their market sectors. The Directors are therefore able to
confirm that they have a reasonably confident expectation that the Group will be able to continue in its operations and
remain financially viable over this extended period to 30th April, 2027.
Corporate governance statement
The Company’s Corporate Governance Statement is set out on pages 25 to 27 and forms part of the Directors’ Report.
Financial Risk Management
The Group has in place risk management policies that seek to limit the adverse effects on the financial performance of the
Group by using various instruments and techniques, further details can be found within note 28 on page 83.
Subsequent events
After the balance sheet date an ordinary dividend of 133p per qualifying ordinary share was proposed by the Directors
(2023: Ordinary dividend of 115p).
After the year end, the Group has renewed a £10 million revolving credit facility, that was due to expire in September 2024,
on a four-year term, as a prudent policy to ensure that guaranteed facilities and the appropriate level of headroom is
available to the Group.
Auditor
In accordance with Section 489 of the Companies Act 2006 and the recommendation of the Board of Directors, a
resolution is to be proposed at the Annual General Meeting for the re-appointment of RSM UK Audit LLP as auditor of the
Company.
Approved by the Board of Directors and signed on its behalf by:
T. J. W. Goodwin6th August, 2024
Chairman
24
DIRECTORS’ REPORTS
CORPORATE GOVERNANCE REPORT
Introduction
Governance is led by the Group Chair and Board and are collectively responsible for setting the Company’s strategy to
deliver long-term value to shareholders and the wider stakeholders. The Board sets the Group’s culture and values, the
Board is responsible for the stewardship of the Company’s business to the shareholders and wider stakeholders.
The Board comprises five Executive Directors and an independent Non-Executive Director (NED); the Audit Committee
comprises the Non-Executive Director, who is the Audit Committee Chair, and three other members, the previous
Chairman, the previous Managing Director and the previous Company Secretary, all of whom had held their previous
positions for twenty-seven years and so have very substantial knowledge and experience of the diversified Group’s
people, product ranges and the very diversified overseas customers and markets in which the Group operates. The Board
and the Audit Committee fulfil the roles required for effective corporate governance and the Board considers that it has the
right governance in place to execute its strategy to achieve its objectives.
By the end of this calendar year, it is planned to reconfigure the Audit Committee by appointing a further Non-Executive
Director, who will join the Group Chairman and the existing Non-Executive Director on the Audit Committee, such that the
majority of its members are independent, which will allow the Group to comply with The Listing Rules as interpreted and
mandated by the Financial Conduct Authority (FCA).
The Board has always felt that it should be recognised that what may be appropriate for the larger company may not
necessarily be so for the smaller company, a point raised previously in the Cadbury Code of Best Practice. Whilst
conscious of its non-compliance with certain aspects of the Code as detailed below, we do not believe that at this stage in
the Group’s development and circumstances it is appropriate to change its own operational or governance structure with
the sole objective of achieving compliance with the revised Code given that the Board’s current corporate governance
strategy has been accepted by a large majority of its shareholders. The Group's governance structure, as set out below, is
a structured system of rules and practices that shapes how the Company operates, whilst also remaining dynamic, in
addition to providing the Board the necessary oversight to review its progress against its strategic plan.
For the past nine years the Company has had one Non-Executive Director who is also the Chair of the Audit Committee,
which has three other members as described above. This is not in full compliance with the Code, but for a smaller
company, due to the limits of time, availability and cost, the Board considered that this is an optimum compromise that is
beneficial to shareholders and the Group’s long-term interests. Moving forward, a second Non-Executive Director is
expected to be appointed by the end of the calendar year. The specialised recruiter, Norman Broadbent, has been
engaged to identify the right candidate for the role. For specific independent expertise the Board engages independent
consultants.
Compliance statement under the UK Corporate Governance Code 2018
The Company is required to report on compliance throughout the year. In relation to all of the provisions except those
mentioned below, the Company complied throughout the year.
As noted in the introduction above, the Group does not comply with aspects of the Code’s requirements under provisions
11 and 13 and provision 12 in terms of having a Senior Independent Director. The Group does not have a Remuneration
Committee or a Nominations Committee as required under provisions 17, 23, 24, 32, 33, 36, 40 and 41. Contrary to
provision 36, the Company does not have a formal policy for post-employment shareholding requirements as it does not
have any unvested or un-exercised vested share options in existence.
The roles of the Chairman in running the Board and the Managing Directors in running the Group’s businesses are well
understood. It is not considered necessary to have written job descriptions which is contrary to provision 14. In the best
interests of the Company it has been concluded that an independent Chairman is not necessary when considered with the
Company’s investor profile, thereby the Company does not comply with provision 9 of the Code.
The Chairman and Managing Directors do not retire by rotation, which is contrary to provision 18 of the Code and as
required by provision 7, the Board has a conflicts of interest policy which includes a procedure for disclosure and review of
any potential conflicts and, if appropriate, approval by the Board. The shareholding of the Executive Directors is not
considered a conflict in interests due to their contribution to the long-term sustainable success of the Group being aligned
with its other shareholders. For reasons as set out on the following pages within the Corporate Governance Report the
Company is not compliant with provisions 13, 22 and 29.
The Code is available to view on the website of the Financial Reporting Council at www.frc.org.uk
The Board
During the year, the Board met formally ten times, and details of attendees at these meetings are set out below:
M. S. Goodwin
…
…
…
…
… 10 out of 10 attended
S. R. Goodwin
…
…
…
…
… 10 out of 10 attended
T. J. W. Goodwin …
…
…
…
… 10 out of 10 attended
B. R. E. Goodwin …
…
…
…
… 10 out of 10 attended
N. Brown
…
…
…
…
…
… 10 out of 10 attended
J. E. Kelly
…
…
…
…
…
…9 out of 10 attended
The Chairman and Managing Directors do not retire by rotation. With this exception, all Directors retire at the first Annual
General Meeting after their initial appointment and then by rotation at least every three years, which is contrary to
provision 18 of the Code.
25
DIRECTORS’ REPORTS
CORPORATE GOVERNANCE REPORT (continued)
The Board) (continued)
The Board retains full responsibility for the direction and control of the Group and continually monitors and assesses the
culture to ensure that it is aligned with the Group's purpose, values and strategy. With the culture of the Group being well
established there have not been any specific actions taken in the year other than continuing to lead by example and
encouraging open communication, transparency and respect. Whilst there is no formal schedule of matters reserved for
the Board, all acquisitions and disposals of assets, investments and material capital-related projects are, as a matter of
course, specifically reserved for Board decision, but referred to the Audit Committee for comment.
The Board meets regularly to discuss corporate strategy; to formulate and monitor the progress of business plans for all
subsidiaries and to identify, evaluate and manage the business risks faced. The management philosophy of the Group is
to operate its subsidiaries on an autonomous basis, subject to overall supervision and evaluation by the Board, with
formally defined areas of responsibility and delegation of authority. The Group has formal lines of reporting in place with
subsidiary management meeting with the Board on a regular basis. Regular informal meetings are also held to enable all
members of the Board to discuss relevant issues with local management and staff at the business units. This is in addition
to the flat structure in place and the hands-on approach of the Directors, which is how the Board continually assesses
emerging risks. Following the identification of an emerging risk the Board dynamically sets out a plan and typically
appoints an individual with the necessary skill set, whether they be internal or external, to either manage or mitigate the
risk.
The Audit Committee
The Audit Committee is made up of the following: J.E. Kelly (Chair), J.W. Goodwin, R.S. Goodwin and P. Ashley and the
Audit Committee reports to the Board. The Audit Committee has met formally eight times since the issue of the Annual
Report for the year ended 30th April, 2023, with all members attending each meeting. The responsibility of the Audit
Committee is explained in the Audit Committee Report on pages 28 to 30. The Audit Committee takes into account the
Company’s corporate Mission Statement, Objectives and Strategy, and reviews investor correspondence and comments,
regulatory changes, current issues and market trends. The Audit Committee uses expert opinion where considered
appropriate.
As noted earlier on, it is planned to reconfigure the Audit Committee by the end of the calendar year by appointing a
further NED, who will join the Group Chairman and the existing Non-Executive Director on the Audit Committee, such that
the majority of its members are independent, which will allow the Group to comply with The Listing Rules as interpreted
and mandated by the FCA.
Board evaluation
The Divisional Managing Directors, Chairman and Audit Committee address the development, composition, diversity and
training needs of the Board as a whole. An evaluation of the effectiveness and performance of the Board and the Directors
of subsidiaries has been carried out by the Managing Directors, Chairman and Audit Committee, by way of personal
discussions and individual performance evaluation. As the Managing Directors and the Chairman are executive Directors,
which in addition to there not being defined performance obligations that individuals are assessed against, the Group does
not comply with provision 13 of the UK Corporate Governance Code. Furthermore, as the Chair does not individually
assess and or act on the results of the evaluation, the Group does not comply with provision 22. The Board recognises the
importance of its composition and diversity and remains committed to suitable corporate governance and believes that a
wide range of knowledge, skills and experience are among the essential drivers to long-term success. We continue to
evaluate the composition of the Board and recognise the value that non-executives typically offer, by ensuring that the
Board is acting in the best interests of the Company. The Board considers the value offered in this circumstance is
significantly less as the Executive Directors, who form part of the controlling concert party, are, in essence, custodians of
the business, resulting in their interests being the long-term growth and success of the business. Furthermore, the Board
would lose its dynamic management of the business that over the history of the Group has enabled it to vastly outperform
the FTSE 100 and FTSE 250, see page 33 for details. Additionally, when consideration is also given to the recommended
tenure of NEDs, the benefit of NEDs is initially limited by the fact that it takes a significant amount of time to understand
the vastly diverse and extremely technical products that the Group supplies. It is for this reason that J.E. Kelly is being
proposed to be re-elected as a Non-Executive Director. Despite the role having been held since 2015, the Board does not
consider her independence to be impaired as she has never been an employee of the Company, does not have and has
not had any material links or relationships with the Company, does not own or represent any shareholding in the Company.
The structure of the Board and its Audit Committee brings balance, astute guidance and deep understanding of the
business at both operational and Board level.
All Directors have reasonable access to the Company Secretary and to independent professional advice at the Company’s
expense.
External audit
The external auditor is appointed annually at the Annual General Meeting. The Board, following review and
recommendations received from the Audit Committee, considers the appointment of the auditor, and assesses on an
annual basis the qualification, expertise, cost and objectivity of the external auditor. The auditor's independence is
safeguarded by the Group following its policy and procedure on non-audit services. The policy recognises that certain
material or highly sensitive non-audit services may not be carried out by the external auditor, such as valuations or
advisory services. In addition to the auditor having their own policies and checks, the Audit
26
DIRECTORS’ REPORTS
CORPORATE GOVERNANCE REPORT (continued)
External audit (continued)
Committee monitors the level of non-audit services provided to the Group by the external auditor to ensure that their
independence is not compromised.
The effectiveness of the external audit is assessed annually, following completion of the audit. Following discussions with
all parties involved in the audit on an operational level, the Board discusses on the efficiency and performance of the
overall audit. This is then discussed with the Audit Committee, which evaluates the effectiveness of the audit process. Any
suggested improvements in audit processes from the prior year are reported back to the Board and the auditor partner so
that they can be taken into account when planning the audit for the following year.
Disclosure of information to auditor
The Directors who held office at the date of approval of this Corporate Governance Report confirm that, so far as they are
each aware, there is no relevant audit information of which the Company’s auditor is unaware; and each Director has
taken all the steps that he or she ought to have taken as a Director to make himself or herself aware of any relevant audit
information and to establish that the Company’s auditor is aware of that information.
Internal control and risk management
The Board has overall responsibility for the Group’s systems of internal controls and risk management which are designed
to manage rather than eliminate risk and provide reasonable reassurance against material misstatement or loss.
The Board has primary responsibility for controlling: operational risks; financial risks including funding and capital spend;
compliance risks; and political risks. The Audit Committee has been delegated responsibility for reviewing corporate
reporting, financial risk management and to regularly review the effectiveness of the Group’s internal controls together with
consideration of any reports from the external auditor. The Audit Committee Report is on pages 28 to 30. Except as noted
within this Corporate Governance Report, the Board confirms that the internal control systems comply with the UK
Corporate Governance Code.
The Group’s main systems of internal controls include regular visits and discussions between Board Directors and
subsidiary management, in-house General Counsel, health and safety committee and the Group Internal Auditor, on all
aspects of the business including financial reporting, risk reporting and compliance reporting. In addition, there is Board
representation with Goodwin PLC Directors on the boards of the subsidiaries. Any concerns are reported to the members
of the Audit Committee and to the Board. The Group maintains a risk register, has business continuity programmes and
has insurance programmes that are all regularly reviewed. These procedures have been in place throughout the year and
are ongoing to endeavour to ensure accordance with the FRC publication ‘Risk Management, Internal Control and Related
Financial and Business Reporting’. The Board considers that the close involvement of Board Directors in all areas of the
day to day operations of the Group’s business, including considering reports from management and discussions with
senior personnel throughout the Group, represents the most effective control over its financial and business risks system,
by providing an ongoing process for identifying, evaluating and managing the principal risks faced by the Group. In
particular, authority is limited to Board Directors in key risk areas such as treasury management, capital expenditure and
other investment decisions. The internal controls in relation to financial reporting include separation of functions, planning
and performance reporting. Financial targets are set annually and are monitored on a monthly basis at an individual and at
a consolidated level through the use of reports that typically include income statement and balance sheet data, in addition
to key indicators relevant to each business or division.
The close involvement of the Board in the day to day operations of the business ensures that the Board has the financial
and non-financial controls under constant review and so it is not currently considered that formal Board reviews of these
controls would provide any additional benefit in terms of the effectiveness of the Group’s internal control systems. This is
contrary to provision 29 of the UK Corporate Governance Code.
The Board recognises the importance of an effective internal audit function to assist with the management and review of
internal controls and business risk. The Group's internal auditor continues to make good progress reviewing internal
controls, procedures and accounting systems, though it remains planned that the activity of the Group internal auditor is
expanded, going forward, by the addition of an experienced assistant. As a consequence of Covid-19, many more Group
directors, management accountants and employees became much more proficient in using Zoom. This has, to some
extent, improved the level of coverage but it is a fact of life that the best results of internal audit are achieved by site visits.
The Board of Directors and Senior Management will continue to have close involvement on a day to day operational basis
and the scope and results of internal audit work to be performed will be kept under review in the coming year.
The Board considers that certain functions are best carried out by independent external bodies with specific expertise,
who then report to the Board directly or through the Audit Committee.
The Board confirms that it has not been advised of any material failures or weaknesses in the Group’s internal control
systems.
Approved by the Board of Directors and signed on its behalf by:
T. J. W. Goodwin6th August, 2024
Chairman
27
DIRECTORS’ REPORTS
AUDIT COMMITTEE REPORT
The key role of the Audit Committee is to provide confidence in the integrity of the Group’s financial risk management,
internal financial controls and corporate reporting. The Audit Committee, as empowered by the Group’s Board of Directors,
has responsibility for:
1.
Reviewing and checking the Group’s full year and half year Accounts and the Annual Report, as presented to the Audit
Committee.
2.
Reviewing the Group’s financial and non-financial internal controls and risk management systems and commenting on
whether they are relevant and effective.
3.
Making recommendations to the Group’s Board of Directors on the appointment and remuneration of the Group’s
external auditor; ensuring independence and objectivity of the auditor; the effectiveness of the audit process; that the
Group receives value for money from the audit and that no non-audit services are carried out by the auditor.
4.
Reviewing the scope of work for the internal audit function and the resultant reports.
5.
Reviewing significant accounting estimates and judgements relating to the financial statements with the external
auditor and members of the Board, and providing advice on whether the Annual Report and accounts as a whole are
fair, balanced and understandable.
The Audit Committee reports to the Board on how it has discharged its responsibilities.
The Audit Committee discharges each of its above responsibilities as follows:
1.
Examining the integrity of the Group’s Annual Report and half year Interim Report:
The Chair of the Audit Committee is an independent Non-Executive Director. The other members of the committee
either are persons with experience in the Group’s typical products and / or markets or have vast historical knowledge of
the business and activities of the Group. This, together with their regular involvement in reviewing the Group’s financial
performance and accounts, provides sufficient recent financial experience. Regular meetings are held between
members of the Audit Committee, Directors of Goodwin PLC and its subsidiaries, General Managers and Senior
Management of the UK subsidiaries. Members of the Audit Committee are involved in regular discussions with the
Directors, General Managers and Senior Management of each subsidiary where the positions taken on subjective
financial matters are discussed. Each overseas subsidiary is normally visited at least once during the year by a
member of the Audit Committee, and / or by a Main Board Director, for meetings with the General Managers and
Senior Management with reports sent back to the Audit Committee. Any areas where the Audit Committee feels that
the positions taken within any particular subsidiary are either inappropriate or merit further review are discussed with
the Board of Directors of Goodwin PLC.
For the half year Interim Report, the Audit Committee reviews the financial and non-financial content, including the
Chairman’s Statement, and reviews the financial statements and qualitative notes of the financial statements, to help
ensure that they are balanced, relevant, appropriately compliant with relevant accounting standards/legislation, and are
consistent and complete. The Audit Committee discusses with the Board of Directors their views as to whether the half
year Interim Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for
shareholders to assess the Group’s half year performance. The figures in the half year Interim Report are not audited,
but the external auditor is given sight of these before publication.
For the full year Annual Report, the Audit Committee reviews the financial and non-financial content of the Group
Strategic Report, including the Chairman’s Statement; the Corporate Governance Report; the Directors’ Report; the
Directors’ Remuneration Policy and Report; and reviews the financial statements and the qualitative notes to the
financial statements to examine whether the content is fair, balanced, relevant, understandable, appropriately
compliant with relevant accounting standards / legislation and consistent and complete. The Audit Committee has
discussed the full year Annual Report and their views with the Group external auditor. The Audit Committee confirmed
to the Board that in its opinion the proposed Annual Report for the year ended 30th April, 2024 appropriately
represents the Group’s trading position and, taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the Group’s full year performance, its position at the year end, and its
objectives, strategy and business model.
2.
Helping to ensure the Group carries effective and relevant financial and non-financial internal controls and
financial risk management systems:
To assess the effectiveness of systems for internal financial controls, financial reporting and financial risk management,
the Audit Committee reviews reports from Main Board Directors on the Group’s subsidiaries; reviews reports from the
Group Chief Accountant; reviews reports from General Managers of the Group’s subsidiaries; reviews quarterly
financial reports; reviews reports from internal and external audit; requests and reviews reports from independent
external consultants; and reviews the Group’s risk register, business continuity programmes and levels of insurance,
legal and health and safety reports.
2024 Audit Committee Risk Programme
The terms of reference for the Audit Committee and how it discharges its duties have been presented to the Board and
ratified.
28
DIRECTORS’ REPORTS
AUDIT COMMITTEE REPORT (continued)
2.
Helping to ensure the Group carries effective and relevant financial and non-financial internal controls and
financial risk management systems: (continued)
Risk Management
A framework exists to mentor each subsidiary in enhancing their risk analysis and controls. This framework continues
to be followed by Directors and General Managers, and, when appropriate, the Audit Committee reviews the status.
All subsidiaries in the Group are included in the risk analysis.
Our internal Group General Counsel monitors legal risks and provides legal and compliance training as required.
Market risk
No customer accounts for more than 10% of the annual Group turnover. The country and sector dependency for the
year is shown by the charts on page 9.
Technical risk
The performance of new products issued to market always has a degree of risk until a multi-year track record has been
attained. This statement relates to all Group companies in both the Mechanical and Refractory Engineering Divisions.
Product failure / contract risk
This has been reviewed and is unchanged from that previously stated.
Financial risk
This has been reviewed and is as stated in previous years with the perceived increased volatility in exchange rates and
the possibility of high foreign exchange hedging costs for forward long-term contracts.
The Board, with the support of the Audit Committee, has reviewed the accounting treatment of the ten year interest rate
hedge that was taken to protect the Group against the interest rate increases that have occurred to date.
The Audit Committee has in conjunction with the Board reviewed the Group’s guaranteed banking facilities in terms of
quantum and tenure.
Regulatory compliance
The Audit Committee continues to monitor regulatory compliance, training and competency.
Human Resources
The age profile of senior managers and perceived skill gaps within each Group company continue to be reviewed by
the Audit Committee. Focus has been to ensure that the Group continues to increase its accounting capacity.
Information Technology
During the year the Audit Committee continued to monitor the risks posed affecting information security and the steps
taken to minimise these.
Whistle-blowing Procedures
The Group has a whistle-blowing policy in place whereby employees can report any suspected misconduct or
concerns, either anonymously on a dedicated telephone line, or to the Chairman, the Company Secretary or the Chair
of the Audit Committee. Such calls are investigated and are reported to the Audit Committee. The Audit Committee has
confirmed to the Board that the Group’s whistle-blowing policy and procedures are appropriate.
The Audit Committee has confirmed its view to the Board that in its opinion, the Group carries relevant internal controls
and risk management systems appropriate to minimise the perceived risks of the Group’s business.
3.
The Group’s external auditor
Following the last audit tender process RSM UK Audit LLP (“RSM”) was appointed as the Group’s Auditor at the
Company’s AGM in October 2020. Following shareholder approval at the Annual General Meeting in September 2023,
RSM was re-appointed as the Group’s Auditor for the year ended 30th April, 2024. Due to the Group’s annual Audit fee
increasing very substantially since we appointed RSM four years ago, this year we put the Audit out for tender to three
other companies with the aspiration of obtaining more reasonable Audit fees. There are a limited number of Audit
companies that are suitable for auditing PLCs and we, unfortunately obtained little or no reduction (when taking into
account the cost of changing and initiating a new Auditor) in what we were being quoted by RSM for year ending 30th
April, 2025. Accordingly, shareholders are being asked to vote on the re-appointment of RSM at the AGM in October
2024. In line with regulation, the audit will be put out to tender at least every ten years. Subject to not bringing the
tender forward, the Group will be required to re-tender the audit in financial year 2034.
In addition to the auditor having their own policies and checks, to preserve objectivity and independence, the Audit
Committee has a policy that restricts the external auditor from carrying out any non-audit services
29
DIRECTORS’ REPORTS
AUDIT COMMITTEE REPORT (continued)
3.
The Group’s external auditor (continued)
during the year. Throughout the year, the Audit Committee monitors the level of non-audit services provided by RSM to
the Group and confirms that RSM did not provide any non-audit services to the Group during the year. The Company
has, for many years now, used a different accountancy practice to that of the statutory auditor for its UK tax services.
To further assess both objectivity and independence, the Audit Committee also takes into consideration any
relationships between the Group and the audit firm, the audit fee as a proportion of the overall fee income of the audit
firm and whether the Group has employed any former members of the external audit team.
The Audit Committee has met formally with the Group’s external auditor, RSM, to discuss the full year Annual Report,
and has met with and discussed matters with them as part of the audit process during the current financial year being
reported on. No material concerns were raised during these meetings or discussions.
The Audit Committee appraises the auditor’s effectiveness on an annual basis, through regular engagement with RSM
during the audit process, in addition to taking into account:
•
feedback from directors, senior managers and the Group Chief Accountant;
•
the quality and scope of all key external auditor plans and reports;
•
the delivery and performance against this plan;
•
the behaviour, qualifications and performance of their audit team;
•
RSM’s understanding of the Group’s business and industry sector.
The Audit Committee was satisfied with the external auditor’s independence of the audit process.
The Audit Committee has recommended to the Board to propose a Resolution to confirm the re-appointment of RSM
UK Audit LLP, as the external auditor, at the Annual General Meeting on 2nd October, 2024.
4.
Internal Audit
The scope of internal audit has been set by the Audit Committee and the results reviewed.
The internal audit function operates a random rotation policy which prioritises based on materiality and endeavours to
cover all Group subsidiaries at least once within a three-year cycle either via the Group Internal Auditor or by the
respective Group Managing Directors or members of the Audit Committee. Travel to overseas subsidiaries has now
commenced though remote desk-top internal audits of our overseas subsidiaries also continue. However, the larger
profit-earning overseas subsidiaries, Noreva, Gold Star Powders India, and Goodwin Pumps India have been subject
to full statutory audit by RSM Germany and India respectively.
5.
Accounting estimates and judgements relating to the Financial Statements
The Audit Committee again reviewed what it considered to be the accounting estimates and judgement areas within
the Group Annual Report for the year ended 30th April, 2024 as detailed in note 2 to the Financial Statements and
including:
•
Revenue recognition in relation to contracts recognised over time;
•
Duvelco viability;
•
The application of hedge accounting (IFRS 9).
The Audit Committee also took account of the findings of RSM in relation to their external audit work for the year.
J. E. Kelly6th August, 2024
Chair of the Audit Committee
30
DIRECTORS’ REPORTS
DIRECTORS’ REMUNERATION POLICY AND REPORT
This report includes the Group’s Remuneration Policy for Directors and sets out the Annual Directors’ Remuneration
Report.
Group’s Remuneration Policy for Directors
The Group’s policy in respect of Directors’ remuneration is to provide individual packages which are determined having
due regard to the Group’s current and projected profitability, the employee’s specific areas of responsibility and
performance, their related knowledge and experience in the Group’s specific fields of operation, the external labour
market and their personal circumstances whereby a package to remunerate and motivate the individual so as to best
serve the Group is set. The policy is designed to be simple and naturally aligned with the performance of the Group and
its overall strategic objective of growing the long-term profitability of the Group in a sustainable manner whilst delivering a
fair return to its shareholders. Consideration is given to the financial and non-financial performance of the individual and
how they have performed on delivering against each of the Group’s strategy points, and the Group’s culture, purpose and
values.
Individual salaries are also indirectly linked up and down to the time allocated and perceived effort by the Director to the
Group’s business. Many Directors, as indeed employees, put in hours of work way beyond what could be requested and
such personal devotion to duty by a Director is rewarded without formulae. All Board members have access to
independent advice when they considered it appropriate. In forming its policy, consideration has been given to the UK
Corporate Governance Code best practice provisions on remuneration policy, service contracts and compensation and
has considered the remuneration levels of Directors of comparative companies.
The remuneration policy for other employees is broadly based on principles consistent with the policy for Directors. Salary
reviews take into account Group performance as well as subsidiary performance, local pay and market conditions.
Directors are paid based on their level of activity within the Group, their knowledge and experience of the Group’s
activities or similar, the performance of the Group versus market opportunity whilst also considering the Director’s
personal circumstances and the salary needed to ensure continuity of employment. This in itself may result in de-creases
or increases in a Director's salary within any year as illustrated in the matrix below.
Element of
Purpose and
Operation
Maximum
Performance
Changes for
Pay
Link to Strategy
Targets
2023 / 2024
Salary
Reflects the Directors’
Reviewed
Generally in line
The Group’s
Directors set the
level of activity and
annually at the
with inflation and
performance,
base increase in
achievement within
anniversary of the
the wage / salary
good or bad, may
salaries. For the
the Group, their
previous salary
increase awarded
result in the salary
period May 2023
knowledge and
adjustment for
to employees, but
being changed.
to April 2024 the
experience of the
the individual
this is not rigid.
weighted average
Company’s activities
Director.
increase was
or similar, the
generally 6.1%.
performance of the
Group versus market
opportunity, whilst
also considering the
salary needed to
ensure continuity of
employment.
Pensions
All Executive Directors
Monthly
Currently 3%
N/A
No changes.
are entitled to have 3%
payments
of gross
added to their gross
remuneration
remuneration which,
by nature of salary
sacrifice, is put into a
pension scheme
where they have direct
dealings with the
selected investment
fund provider.
Other benefits
Fully expensed car or
N/A
N/A
N/A
See details of the
cash alternative,
Directors’
health insurance or
emoluments on
other services.
page 35.
Whilst being aware of the requirements to show in graph form the breakdown of base pay, bonus pay, pension and long-
term benefits, the Group is unable to comply with this requirement as Directors are not paid in accordance with any
specific performance criteria or KPIs.
We believe the above meets the requirement of Schedule 8, Companies Act 2006, regarding the changes in 2023 / 2024.
The Policy and Report is signed by the Chairman and the Managing Directors.
31
DIRECTORS’ REPORTS
DIRECTORS’ REMUNERATION POLICY AND REPORT (continued)
Group’s Remuneration Policy for Directors (continued)
In any company there are specific individual circumstances that on occasions will merit special treatment in a given year
for a Director either to keep or look after the person, indeed no different than we may do for an employee. However,
bearing in mind the performance of the Company over the past twenty years and more and that the Directors’ salaries are
anything but excessive versus the norm of other PLCs, this is the Board’s policy.
Total shareholder return (TSR) – unaudited
As is required by The Listing Rules, we show in graph form both the salary of the Managing Director (CEO equivalent) of
Goodwin PLC and the TSR over the past ten years. We, however, do not list out the salary of the Financial Director of
Goodwin PLC versus the TSR as in Goodwin PLC we have a Group Chief Accountant who carries out 75% of the duties of
a Financial Director, but we do not have what would generally be known as a Financial Director. This is for the reason that
certain decisions that outsiders might consider are the sole responsibility of the Financial Director are not. In Goodwin PLC
it is a team effort and such decisions are made not only by the Group Chief Accountant but also by the Managing Directors
and the Chairman.
Approval of the Company’s Directors’ Remuneration Policy
The Company put the Remuneration Policy to the vote at the Annual General Meeting on 5th October, 2022, when it was
passed by 99.94% of those who voted. The Company will be putting the Remuneration Policy to the vote again in 2025,
which is three years from the last vote, as is required by the Listing Rules.
For confidentiality and flexibility reasons, the Board policy is not to disclose exit / termination payments to Directors but the
policy is to remain within the law, to fairly compensate good leavers and minimise payments to bad leavers. In the last ten
years, the Company has managed to avoid paying any termination payments to bad leavers. It is, however, Board policy to
limit termination payments to a maximum of 100% of gross annual salary and should such an amount be exceeded, then it
will be reported in the Annual Report giving the reason why.
The Company takes seriously its responsibility for ensuring a fair deal between employees, shareholders, customers and
the local community and maintaining an appropriate balance.
The Company does not use or pay any external advisers or consultants for remuneration or incentive policy.
Shareholder engagement is by nature of the Annual Report, the Annual General Meeting and the votes therein.
32
DIRECTORS’ REPORTS
DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report
This report is submitted in accordance with the Directors’ Remuneration Report Regulations.
Consideration by the Directors of matters relating to Directors’ remuneration
The Company’s Remuneration Policy for Directors, including remuneration of its non-executive, is set by the Board as a
whole and is described in pages 31 to 32 therein. The Policy has been followed in the financial year to 30th April, 2024
and will be followed in the next financial year.
The Board of Directors are also the key management personnel as defined in IAS 24.
Service contracts
None of the Directors has a service contract. A Director may resign at any time by notice in writing to the Board. There are
no set minimum notice periods but all Directors other than the Chairman and Managing Directors are subject to retirement
by rotation and as employees also have notice periods in accordance with law. No compensation as of right is payable to
Directors on leaving office.
Relative importance of spend on pay
The table below shows shareholder distributions and total employee expenditure, and the percentage change in both:
2024
2023
£’000
£’000
%
Ordinary dividends proposed in respect of the year (£’000)
…
…
…
…
9,988
8,636
(15.7)
Total employee costs (£’000)
…
…
…
…
…
…
…
…
…
59,396
50,075
18.6
Average employee numbers
…
…
…
…
…
…
…
…
…
1,225
1,144
(7.1)
Total payroll costs, excluding the Managing Directors' salaries, have increased by 18.7%. The majority of this increase
relates primarily to the increased activity levels and overtime paid within the individual factories. Also within the 18.7%,
other than the weighted average base increase of 6.1%, there is an amount for individuals taking on increasing levels of
responsibility and attaining higher skill sets.
Approval of the Company’s Annual Directors’ Remuneration Report
An ordinary resolution for the approval of the Annual Directors’ Remuneration Report will be put to shareholders at the
forthcoming Annual General Meeting. The Annual Directors’ Remuneration Report presented in the accounts to 30th April,
2023 was put to the shareholders at last year’s Annual General Meeting on 29th September, 2023. The Annual Directors’
Remuneration Report was accepted with 99.96% of proxy votes cast in favour.
Total shareholder return (TSR) – unaudited
The following graphs compare the Group’s total shareholder return over the ten and twenty years ended 30th April, 2024
with various FTSE indices. The graphs also show the change in the earnings of the previous Managing Director for the
periods up to 30th April, 2019.
From 30th April 2019, the base earnings figure in the graphs is the amount earned by each Managing Director.
2020
2021
2022
2023
2024
£’000
£’000
£’000
£’000
£’000
Managing Directors’
310
355
374
406
435
base earnings
For reference the TSR of Goodwin PLC versus the FTSE 100 and the FTSE 350 is shown below for not only the last five
but also the last ten years and the last twenty years.
TSR for last 5 Years
TSR for last 10 Years
TSR for last 20 Years
Goodwin
FTSE 100
FTSE 350
…
…
…
154%
32%
30%
…
…
…
114%
76%
75%
…
…
…
4,632%
282%
302%
The following graphs have not been audited.
33
DIRECTORS’ REPORTS
DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report (continued)
The increase in the Goodwin PLC share price since 2004 plus
dividends re-invested would mean that £1.00 invested in 2004 by
30th April, 2024 would be worth £47.32.
The increase in the share price since 2014 plus dividends re-
invested would mean that £1.00 invested in 2014 would at 30th
April, 2024 be worth £2.14.
Note 1: The 2014 peak within the 20-year TSR chart above was due to the increased profitability of the Group (2014
PBT: £24.1 million) and the share price moving from £25 to £41 per share in that current year.
Consequently, the 10-year TSR chart is substantially impacted by the TSR data point starting at a record high, due to the
share price as at 30th April, 2014 being at £41 per share. The Total Shareholders Return for individuals having invested
six months before or after the 30th April, 2014 would have received a markedly higher overall TSR over the same period.
34
DIRECTORS’ REPORTS
DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report (continued)
The auditor is required to report on the following information contained in this section of the Annual Directors’
Remuneration Report.
Directors’ interests in the share capital of the Company as well as ex Directors – audited
The interests of the Directors in the share capital of the Company at the beginning and end of the financial year
were as follows:
Beneficial
M. S. Goodwin
…
…
…
…
…
…
54,535
69,054
S. R. Goodwin
…
…
…
…
…
…
57,344
78,786
T. J . W. Goodwin…
…
…
…
…
…
98,589
118,926
B. R. E. Goodwin …
…
…
…
…
…
33,428
54,536
N. Brown …
…
…
…
…
…
…
445
445
J. W. Goodwin*
…
…
…
…
…
…
39,167
52,041
R. S. Goodwin*
…
…
…
…
…
…
14,716
19,057
J. W. Goodwin* and R. S. Goodwin* **
…
…
-
3,646,045
M. S. Goodwin, S. R. Goodwin, T. J. W. Goodwin
3,755,161
and B. R. E. Goodwin**…
…
…
…
…
-
Non-beneficial
J. W. Goodwin* and E. M. Goodwin
…
…
14,166
14,166
*
J. W. Goodwin and R. S. Goodwin are Audit Committee members and ex-Directors of the Company.
**
Held via J.M. Securities (No. 3) Limited.
Between the end of the financial year and the signing of these accounts, S. R. Goodwin purchased 2,289 shares, T. J. W.
Goodwin purchased 2,829 shares and B. R. E. Goodwin purchased 2,186 shares.
Details of individual emoluments and compensation – audited
Year ended 30th April, 2024
Single Total Figure Table
Salary
Benefits
Non-Exec
Pension
Total
in kind
Director’s
contrib-
fees
utions
£’000
£’000
£‘000
£’000
£’000
M. S. Goodwin
…
…
…
…
…
…
…
430
5
-
-
435
S. R. Goodwin
…
…
…
…
…
…
…
430
5
-
-
435
T. J. W. Goodwin …
…
…
…
…
…
…
301
5
-
8
314
B. R. E. Goodwin …
…
…
…
…
…
…
308
5
-
8
321
N. Brown
…
…
…
…
…
…
…
…
198
12
-
6
216
J. E. Kelly
…
…
…
…
…
…
…
…
-
-
83
-
83
Total
…
…
…
…
…
…
…
…
1,667
32
83
22
1,804
Year ended 30th April, 2023
Single Total Figure Table
Salary
Benefits
Non-Exec
Pension
Total
in kind
Director’s
contrib-
fees
utions
£’000
£’000
£’000
£’000
£’000
M. S. Goodwin
…
…
…
…
…
…
…
399
5
-
2
406
S. R. Goodwin
…
…
…
…
…
…
…
399
5
-
2
406
T. J. W. Goodwin …
…
…
…
…
…
…
280
5
-
8
293
J. Connolly (retired on 31st March, 2023)
…
…
238
1
-
7
246
B. R. E. Goodwin …
…
…
…
…
…
…
256
5
-
8
269
N. Brown
…
…
…
…
…
…
…
…
184
11
-
6
201
J. E. Kelly
…
…
…
…
…
…
…
…
-
-
78
-
78
Total
…
…
…
…
…
…
…
…
1,756
32
78
33
1,899
Benefits in kind consist of the provision of a fully expensed car, a cash alternative scheme, healthcare insurance or other
services.
35
DIRECTORS’ REPORTS
DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report (continued)
Pay Comparison – audited
In accordance with the remuneration regulations, we are including in the report a table comparing the annual change of
each Director’s pay with that of the average employee’s pay. This is required over a rolling five year period, but as the
requirements came into effect for financial years ending 2021, the table below will only show the comparison from 30th
April, 2020.
Annual Percentage Change of Average Remuneration 2023 / 2024
2022 / 2023
2021 / 2022
2020 / 2021
of each Director
%
%
%
%
M. S. Goodwin
…
…
…
…
…
…
…
7.7
8.5 **
5
15
*
S. R. Goodwin
…
…
…
…
…
…
…
7.7
8.5 **
5
15
*
T. J. W. Goodwin …
…
…
…
…
…
…
7.5
8.5
5
32
*
J. Connolly (retired 31st March, 2023)
…
…
…
-
-
-
16
B. R. E. Goodwin …
…
…
…
…
…
…
19.7
10.4
10
42
N. Brown (appointed 11th December, 2020)
…
…
7.2
10
N/A
N/A
J. E. Kelly …
…
…
…
…
…
…
…
7.2
8.5
6
9
UK weighted average base increase awarded to employees
6.1
8.5
-
-
Any increases greater than the UK average employee percentage change are a reflection of the further development of
individual Directors’ in the areas of their new responsibilities.
*
The above increases are in relation to the appointment of M. S. Goodwin, S. R. Goodwin and T. J. W. Goodwin as
Mechanical Divisional Managing Director, Refractory Divisional Managing Director and Group Chairman respectively.
**
The percentage for M.S. Goodwin and S.R. Goodwin is higher due to the changes in their pension contributions which
affects these figures.
In 2024, the percentage for T. J. W. Goodwin and B. R. E. Goodwin is higher than it would have been due to the changes
in their pension contributions which affects these figures.
Average ‘mean pay’ % increase of the UK Workforce
As required to be disclosed by the remuneration regulations, the average ‘mean pay’ of the UK workforce has increased
by 11.9%, which takes into account salary, overtime worked (for shop-floor workers), bonuses and benefits in kind and is
based on all individuals employed by Goodwin PLC and its UK subsidiaries. The increase is a factor of the pay increases
awarded in the year, as well as the business needing to employ individuals with a greater and wider skillset as the Group
takes on more technical work.
2023 / 2024
2022 / 2023
2021 / 2022
2020 / 2021
%
%
%
%
UK workforce average ‘mean pay’ % increase ……
11.9
9.6
5
3
Pay Ratio of Managing Directors
In accordance with the Pay Ratio Regulations we are disclosing the comparison of our Managing Directors’ pay with that
of our average UK employees. It is appropriate that the Managing Directors’ pay was used in the comparison as we do not
have what is generally known as a Chief Executive Officer.
For the year ended 30th April, 2024 the pay for both the Managing Directors in the Single Total Pay Figure table is the
same. If the figures are different in any subsequent year, the higher of the two figures will be used in the pay ratio
comparison section.
The tables below show our Managing Directors’ pay ratio at the 25th, median and 75th percentile of our UK employees as
at 30th April, 2024:
Financial
Method
25th
Median
75th
Year
percentile
pay ratio
percentile
pay ratio
pay ratio
2024 FTSE 350
-
57:1
-
2024 ratios
Option A
14:1
10:1
7:1
2023 ratios
Option A
14:1
11:1
8:1
2022 ratios
Option A
14:1
11:1
8:1
2021 ratios
Option A
14:1
11:1
8:1
2020 ratios
Option A
12:1
10:1
7:1
36
DIRECTORS’ REPORTS
DIRECTORS REMUNERATION POLICY AND REPORT (continued)
Annual Directors’ Remuneration Report (continued)
Pay Ratio of Managing Directors (continued)
Financial
Managing
25th
Median
75th
Year
Directors
percentile
pay
percentile
£’000
pay
£’000
pay
£’000
£’000
2024 Total Pay
435
32
42
59
2023 Total Pay
406
29
38
52
2022 Total Pay
374
27
34
48
2021 Total Pay
355
26
33
45
2020 Total Pay
333
26
33
45
The 2024 pay ratio for the Managing Directors remains similar to the previous 5 years and significantly below the average
pay ratio for other companies in the FTSE 350.
Furthermore, there are currently no intentions to align the pay ratio of the Group’s Managing Directors with the FTSE 350
average.
Notes:
1.
Total pay has been calculated for each employee and, where applicable, prorated to calculate full-time equivalent pay.
It includes payments that are taxable plus any employer pension contributions.
2.
We offer competitive and fair rates of pay for all our UK employees taking into account personal circumstances.
3.
We have opted for Option A of the pay ratio regulations as this is the preferred option under the regulations and also
provides the most accurate data.
4.
The above figures are based on the total pay as at 30th April, 2024.
Total pension entitlements – unaudited
In line with the Government’s requirements the Group administers a pension scheme for all UK employees including
Executive Directors. Under this Auto Enrolment Pension arrangement each Executve Director is entitled to have an
amount of 3% of gross remuneration paid into a pension scheme where they have direct dealings with the selected
investment fund provider. The employee also contributes a minimum of 4% of remuneration to their fund. The pension
contributions are to defined contribution pension schemes which are independent of the Company.
The Company has no obligations to make any payments in relation to pensions when a Director leaves service by nature
of removal from office, resignation or retirement.
The Annual Directors’ Remuneration Report was approved by the Board on 6th August, 2024 and is signed on its behalf
by:
T. J. W. GoodwinM. S. GoodwinS. R. Goodwin
DirectorDirectorDirector
37
DIRECTORS’ REPORTS
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL
REPORT AND THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Strategic Report and the Report of the Directors’, the Directors’
Remuneration Report, the separate Corporate Governance Statement and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year. The
Directors have elected under company law and are required under the Listing Rules of the Financial Conduct Authority to
prepare Group financial statements in accordance with UK-adopted International Accounting Standards. The Directors
have elected under company law to prepare the Company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
The Group financial statements are required by law and UK-adopted International Accounting Standards to present fairly
the financial position and performance of the Group; the Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to financial statements giving a true and fair view are references
to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In
preparing each of the Group and Company financial statements, the Directors are required to:
a.
select suitable accounting policies and then apply them consistently;
b.
make judgements and estimates that are reasonable and prudent;
c.
for the Group financial statements, state whether they have been prepared in accordance with UK-adopted
International Accounting Standards;
d.
for the Company financial statements, state whether they have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
e.
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and
the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group
and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and
the Company and enable them to ensure that the financial statements and the Directors’ Remuneration Report comply
with the Companies Act 2006. They are responsible for safeguarding the assets of the Group and the Company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Directors’ statement pursuant to the Disclosure and Transparency Rules
Each of the Directors, whose names are listed on page 22, confirm that to the best of each person’s knowledge:
a.
the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit of the Company and the undertakings included in the
consolidation taken as a whole; and
b.
the Strategic Report contained in the Annual Report includes a fair review of the development and performance of the
business and the position of the Company and the undertakings included in the consolidation taken as a whole,
together with a description of the principal risks and uncertainties that they face.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Goodwin PLC website.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
T. J. W. GoodwinM. S. GoodwinS. R. Goodwin
DirectorDirectorDirector
6th August, 2024
38
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
to the members of Goodwin PLC
Opinion
We have audited the financial statements of Goodwin PLC (the ‘parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 30 April 2024 which comprise the Consolidated Statement of Profit or Loss, Consolidated Statement of
Comprehensive Income, Consolidated Statement of Changes in Equity, Consolidated Balance Sheet, Consolidated
Statement of Cash Flows, Company Balance Sheet, Company Statement of Changes in Equity and notes to the financial
statements, including significant accounting policies. The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law and UK-adopted International Accounting Standards. The
financial reporting framework that has been applied in the preparation of the parent Company financial statements is
applicable law and United Kingdom Accounting Standards including Financial Reporting Standard 101 "Reduced
Disclosure Framework", (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
·
the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at
30 April 2024 and of the Group’s profit for the year then ended;
·
the Group financial statements have been properly prepared in accordance with UK-adopted International
Accounting Standards;
·
the parent Company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
·
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the Group and parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed public interest entities and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Summary of our audit approach
Key audit matters
Group
Revenue recognition – revenue recognised over time
Carrying value of the Duvelco cash generating unit (CGU)
Hedge accounting - foreign exchange
Parent Company
No key audit matters noted
Materiality
Group
Overall materiality: £1,050,000 (2023: £778,000)
Performance materiality: £787,500 (2023: £583,000)
Overall materiality: £3,130,000 (2023: £2,910,000)
Performance materiality: £2,347,500 (2023: £2,182,500)
Scope
39
INDEPENDENT AUDITOR’S REPORT
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
Group and parent Company financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest
effect on the overall audit strategy, the allocation of resources in the audit and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the Group and parent Company financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Revenue recognition – Revenue recognised over time
Key audit matter description
addressed in the audit
40
!
INDEPENDENT AUDITOR’S REPORT
Key observations
Carrying value of the Duvelco cash generating unit (CGU)
Key audit matter description
quality of polymer required;
established.
in the audit
met.
actions taken to penetrate the key market sectors.
undertook audit procedures included below, we:
·
‘Impairment of assets’;
·
mathematical accuracy;
·
the discount rate;
41
INDEPENDENT AUDITOR’S REPORT
Performed sensitivity analysis in assessing the risks of impairment;
·
operational and technical management;
·
potential market sectors applicable to the product; and
·
Reviewed the disclosures in the financial statements.
of intangible asset.
Key observations
Hedge accounting - foreign exchange
·
·
·
·
·
·
·
·
·
42
INDEPENDENT AUDITOR’S REPORT
Our application of materiality
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing
and extent of our audit procedures. When evaluating whether the effects of misstatements, both individually and on
the financial statements as a whole, could reasonably influence the economic decisions of the users we take into
account the qualitative nature and the size of the misstatements. Based on our professional judgement, we
determined materiality as follows:
Group
Parent Company
Overall materiality
materiality
Rationale for benchmark applied
Performance materiality
performance materiality
the Audit Committee
An overview of the scope of our audit
The Group consists of 33 components, located in the following countries:
-
United Kingdom
-
China
-
Germany
-
South Korea
43
INDEPENDENT AUDITOR’S REPORT
-
India
-
Brazil
-
South Africa
-
Australia
-
Thailand
-
Finland
The coverage achieved by our audit procedures was:
components
Revenue
Total assets
before tax
Analytical procedures at Group level and testing of intercompany eliminations were performed for the remaining 23
components.
Of the above, full scope audits for three components were undertaken by component auditors.
The impact of climate change on the audit
In planning our audit, we considered the potential impact of the possible risks arising from climate change on the
Group’s and the Company’s financial statements and obtained an understanding of how management identifies and
responds to climate-related risks. Further information on management’s risk assessment, progress and
commitments is provided in the Group’s climate-related risk disclosures on pages 16 to 18 of the annual report.
We performed risk assessment procedures including making enquiries of management, reading board minutes and
applying our knowledge of the Group and the Company and the sector within which it operates, to assess the
potential impact on the financial statements.
Taking account of the nature of the business, the extent of the headroom in impairment testing, and useful economic
lives of tangible/intangible assets to changing regulation, weather patterns or business activities, we have not
assessed climate-related risk to be significant to our audit. There was also no impact on our key audit matters.
In accordance with our obligations with regards to other information, we have read the Group’s climate-related risk
disclosures on pages 16 to 18 of the annual report and in doing so have considered whether those disclosures are
materially inconsistent with the financial statements or our knowledge obtained during the course of the audit, or
otherwise appear to be materially misstated.
We have not been engaged to provide assurance over the accuracy of the climate-related risk disclosures set out on
pages @! to 18 in the Annual Report.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment
of the Group’s and parent Company’s ability to continue to adopt the going concern basis of accounting included:
-
Review of management’s approved Board paper which sets out the going concern basis, key forecasting
assumptions, sensitivities and conclusion;
-
Obtaining copies of management's forecasts and sensitivity analysis for the Group and checking the
mathematical accuracy of the forecasts;
-
Understanding and reviewing the results of the annual budget review process, including submissions from
the UK and overseas businesses which are approved by the Board;
-
Comparing the forecasts to historical trading results and the key assumptions for expected growth, margin
improvement and capital expenditure plans;
44
INDEPENDENT AUDITOR’S REPORT
-
Undertaking our own stress test to consider circumstances under which headroom would be eroded;
-
Verifying the committed funding available to the Group and parent Company for the forecast period and
the headroom this provided to the Group and parent Company.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group’s or the parent Company’s ability
to continue as a going concern for a period of at least twelve months from when the financial statements are
authorised for issue.
In relation to the entity reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether
the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and
our auditor’s report thereon. The Directors are responsible for the other information contained within the annual
report. Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance
with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
·
the information given in the Strategic Report and the Directors’ Report for the financial year for which the
financial statements are prepared is consistent with the financial statements; and
·
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the parent Company and their environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the
Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
45
INDEPENDENT AUDITOR’S REPORT
·
adequate accounting records have not been kept by the parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or
·
the parent Company financial statements and the part of the Directors’ remuneration report to be audited
are not in agreement with the accounting records and returns; or
·
certain disclosures of Directors’ remuneration specified by law are not made; or
·
we have not received all the information and explanations we require for our audit.
Corporate governance statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the parent Company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
·
Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting
and any material uncertainties identified set out on page 23;
·
Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers
and why the period is appropriate set out on page 24;
·
Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in
operation and meets its liabilities set out on page 24;
·
Directors’ statement on fair, balanced and understandable set out on page 22;
·
Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out
on page 12@!;
·
Section of the annual report that describes the review of effectiveness of risk management and internal
control systems set out on page 27; and,
·
Section describing the work of the Audit Committee set out on page 28.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement set out on page 38, the Directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain
sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the
determination of material amounts and disclosures in the financial statements, to perform audit procedures to
46
INDEPENDENT AUDITOR’S REPORT
help identify instances of non-compliance with other laws and regulations that may have a material effect on the
financial statements, and to respond appropriately to identified or suspected non-compliance with laws and
regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the
financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of
material misstatement due to fraud through designing and implementing appropriate responses and to respond
appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to
ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for
the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the Group
audit engagement team and component auditors:
·
obtained an understanding of the nature of the industry and sector, including the legal and regulatory
frameworks that the Group and parent Company operates in and how the Group and parent Company are
complying with the legal and regulatory frameworks;
·
inquired of management, and those charged with governance, about their own identification and
assessment of the risks of irregularities, including any known actual, suspected or alleged instances of
fraud;
·
discussed matters about non-compliance with laws and regulations and how fraud might occur including
assessment of how and where the financial statements may be susceptible to fraud, as defined in ISA
250B: having obtained an understanding of the effectiveness of the control environment.
All relevant laws and regulations identified at a Group level and areas susceptible to fraud that could have a material
effect on the financial statements were communicated to component auditors. Any instances of non-compliance with
laws and regulations identified and communicated by a component auditor were considered in our audit approach.
The most significant laws and regulations were determined as follows:
Legislation / Regulation
engagement team and component auditors included:
2006 / Listing Rules
Tax compliance regulations
regulations
Group's legal counsel.
The areas that we identified as being susceptible to material misstatement due to fraud were:
47
INDEPENDENT AUDITOR’S REPORT
Risk
Audit procedures performed by the audit engagement team:
time sales
over this risk. We also performed testing one:
investigated.
time sales
investigated.
recognised in the incorrect period.
controls
Testing the appropriateness of journal entries and other adjustments;
estimates are indicative of a potential bias; and
are unusual or outside the normal course of business.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the Board of Directors on 19 March
2021 to audit the financial statements for the year ending 30 April 2021 and subsequent financial periods.
The period of total uninterrupted consecutive appointments is four years, covering the years ended 30 April 2021
and 30 April 2024.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the parent
Company and we remain independent of the Group and the parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit Committee in accordance with ISAs (UK).
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR), these
financial statements forms part of the Annual Financial Report prepared in Extensible Hypertext Markup Language
(XHTML) format and filed on the National Storage Mechanism of the UK FCA. This auditor’s report provides no
assurance over whether the annual financial report has been prepared in XHTML format.
Ian Wall (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
Festival Way, Festival Park, Stoke-on-Trent, ST1 5BB.
6th August, 2024
48
FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the year ended 30th April, 2024
2024*
2023*
Note
£’000
£’000
CONTINUING OPERATIONS
Revenue …
…
…
…
…
…
…
…
…
…
3, 4
Cost of sales
…
…
…
…
…
…
…
…
…
(113,371 )
(116,973 )
GROSS PROFIT*
…
…
…
…
…
…
…
…
…
Selling and distribution costs …
…
…
…
…
…
…
(9,618 )
(9,623 )
Administrative expenses
…
…
…
…
…
…
…
(41,374 )
(38,833 )
OPERATING PROFIT …
…
…
…
…
…
…
…
…
Finance costs (net)
…
…
…
…
…
…
…
…
8
(2,870 )
(1,438 )
Share of profit of associate company
…
…
…
…
…
15
PROFIT BEFORE TAXATION AND MOVEMENT IN FAIR VALUE
OF INTEREST RATE SWAP**
…
…
…
…
…
…
…
Additonal year-on-year unrealised gain on
10 year interest rate swap derivative…
…
…
…
…
…
PROFIT BEFORE TAXATION
…
…
…
…
…
…
…
6
Tax on profit
…
…
…
…
…
…
…
…
…
9
(6,491 )
(5,616 )
PROFIT AFTER TAXATION…
…
…
…
…
…
…
…
ATTRIBUTABLE TO:
Equity holders of the parent
…
…
…
…
…
…
…
Non-controlling interests
…
…
…
…
…
…
…
PROFIT FOR THE YEAR
…
…
…
…
…
…
…
…
BASIC AND DILUTED EARNINGS PER ORDINARY SHARE (in pence)
10
*
The Board has taken the decision to present the statutory reporting of gross profit to allocate costs, which align more
appropriately with the Group’s operational structure and how it is calculated within the Group’s management accounts
to ensure that the end user of the statutory accounts can review the financial performance of the Group on the same
basis as the Board. For further details please refer to the “Business Diversity and Performance” section on page 9, and
note 5 on page 66.
**
The Chairman's Statement refers to trading profit, which is the profit before taxation less the further positive movement
in fair value of interest rate swap as trading profit.
The notes on pages 55 to 105 form part of these financial statements.
49
FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30th April, 2024
2024
2023
£’000
£’000
PROFIT FOR THE YEAR
…
…
…
…
…
…
…
…
…
OTHER COMPREHENSIVE (EXPENSE) / INCOME
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS:
Foreign exchange translation differences
…
…
…
…
…
…
(1,935 )
(1,412 )
Cash flow hedges – effective portion of changes in fair value
…
…
(936 )
Cash flow hedges – ineffectiveness transferred to profit or loss
…
…
Cash flow hedges – amounts transferred to profit or loss
…
…
…
(438 )
Cash flow hedges – deferred tax (charge) / credit…
…
…
…
…
(1,290 )
Cost of hedging – changes in fair value
…
…
…
…
…
…
(1,447 )
Cost of hedging – ineffectiveness transferred to profit or loss
…
…
(76 )
Cost of hedging – amounts transferred to profit or loss
…
…
…
Cost of hedging – deferred tax (charge) / credit
…
…
…
…
…
(184 )
OTHER COMPREHENSIVE (EXPENSE) / INCOME FOR THE YEAR,
NET OF INCOME TAX…
…
…
…
…
…
…
…
…
…
(2,245 )
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
…
…
…
…
ATTRIBUTABLE TO:
Equity holders of the parent
…
…
…
…
…
…
…
…
Non-controlling interests
…
…
…
…
…
…
…
…
The notes on pages 55 to 105 form part of these financial statements.
50
FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED BALANCE SHEET
at 30th April, 2024
2024
2023
Note
£’000
£’000
NON-CURRENT ASSETS
Property, plant and equipment
…
…
…
…
…
…
…
12
Right-of-use assets
…
…
…
…
…
…
…
…
13
Investment in associate
…
…
…
…
…
…
…
…
15
Intangible assets…
…
…
…
…
…
…
…
…
…
16
Derivative financial assets
…
…
…
…
…
…
…
…
17
CURRENT ASSETS
Inventories…
…
…
…
…
…
…
…
…
…
…
18
Contract assets
…
…
…
…
…
…
…
…
…
…
4
Trade and other receivables …
…
…
…
…
…
…
…
19
Corporation tax receivable
…
…
…
…
…
…
…
…
Derivative financial assets
…
…
…
…
…
…
…
…
17
Cash and cash equivalents
…
…
…
…
…
…
…
…
20
TOTAL ASSETS
…
…
…
…
…
…
…
…
…
…
CURRENT LIABILITIES
Borrowings
…
…
…
…
…
…
…
…
…
…
21
Contract liabilities*
…
…
…
…
…
…
…
…
…
4
Trade and other payables
…
…
…
…
…
…
…
…
22
Derivative financial liabilities …
…
…
…
…
…
…
…
23
Liabilities for current tax
…
…
…
…
…
…
…
…
Provisions for liabilities and charges
…
…
…
…
…
…
24
NON-CURRENT LIABILITIES
Borrowings
…
…
…
…
…
…
…
…
…
…
21
Contract liabilities
…
…
…
…
…
…
…
…
…
4
Derivative financial liabilities …
…
…
…
…
…
…
…
23
Provisions for liabilities and charges
…
…
…
…
…
…
24
Deferred tax liabilities …
…
…
…
…
…
…
…
…
25
TOTAL LIABILITIES…
…
…
…
…
…
…
…
…
…
NET ASSETS …
…
…
…
…
……………
…
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Share capital
…
…
…
…
…
…
…
…
…
…
26
Translation reserve
…
…
…
…
…
…
…
…
…
26
(2,391 )
(849 )
Share-based payments reserve
…
…
…
…
…
…
…
26
Cash flow hedge reserve
…
…
…
…
…
…
…
…
26
Cost of hedging reserve
…
…
…
…
…
…
…
…
26
(426 )
(976 )
Retained earnings
…
…
…
……………
…
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
NON-CONTROLLING INTERESTS
…
…
…
…
…
…
…
14
TOTAL EQUITY
…
…
…
…
…
…
…
…
…
…
* Contract liabilities are predominantly advance payments from customers.
These financial statements were approved by the Board of Directors on 6th August, 2024, and signed on its behalf by:
T. J. W. Goodwin
Director
M. S. Goodwin
Director
S. R. Goodwin
Director
Company Registration Number: 305907
The notes on pages 55 to 105 form part of these financial statements.
51
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30th April, 2024
Total
Share-
Cash
attributable
Trans-
based
flow
Cost of
to equity
Non-
Share
lation
payment
hedge
hedging
Retained
holders of
controlling
Total
capital
reserve
reserve
reserve
reserve
earnings
the parent
interests
equity
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
YEAR ENDED
30TH APRIL, 2024
Balance at 1st May, 2023
…
(849 )
(976 ) 119,055
Total comprehensive income:
Profit for the year
…
…
Other comprehensive income:
Foreign exchange translation
differences…
…
…
(1,542 )
(1,542 )
(393 )
(1,935 )
Effective portion of changes
in fair value
(948 )
(388 )
(378 )
Ineffectiveness transferred
to profit or loss…
…
…
Amounts reclassified
to profit or loss…
…
…
(438 )
(294 )
(294 )
Deferred tax (charge) / credit
(182 )
(99 )
(99 )
Other comprehensive
income / (expense) for
the year
(1,542 )
(871 )
(1,863 )
(382 )
(2,245 )
TOTAL COMPREHENSIVE
INCOME / (EXPENSE)
FOR THE YEAR
(1,542 )
(871 )
Transfers between reserves*
(5,244 )
Transactions with owners:
Buy back of shares
…
…
(18 )
(8,851 )
(8,869 )
(8,869 )
Dividends paid …
…
…
(8,636 )
(8,636 )
(473 )
(9,109 )
BALANCE AT
30TH APRIL, 2024
(2,391 )
(426 ) 123,714
*
The balance on the share-based payment reserve has been transferred to retained earnings as all previous share options have
vested.
The notes on pages 55 to 105 form part of these financial statements.
52
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (continued)
for the year ended 30th April, 2023
Total
Share-
Cash
attributable
Trans-
based
flow
Cost of
to equity
Non-
Share
lation
payment
hedge
hedging
Retained
holders of
controlling
Total
capital
reserve
reserve
reserve
reserve
earnings
the parent
interests
equity
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
YEAR ENDED
30TH APRIL, 2023
Balance at 1st May, 2022
…
(2,746 )
Total comprehensive income:
Profit for the year
…
…
Other comprehensive income:
Foreign exchange translation
differences
…
…
…
(1,312 )
(1,312 )
(100 )
(1,412 )
Effective portion of changes
in fair value
…
…
…
(1,447 )
Ineffectiveness transferred
to profit or loss
…
…
(76 )
Amounts reclassified to
profit or loss
…
…
…
Deferred tax (charge) / credit
(1,283 )
(916 )
(3 )
(919 )
Other comprehensive
income / (expense) for
the year
(1,312 )
(1,116 )
(76 )
TOTAL COMPREHENSIVE
INCOME / (EXPENSE)
FOR THE YEAR
(1,312 )
(1,116 )
Transactions with owners:
Dividends paid …
…
…
(8,289 )
(8,289 )
(556 )
(8,845 )
BALANCE AT
30TH APRIL, 2023
(849 )
(976 )
The notes on pages 55 to 105 form part of these financial statements.
53
FINANCIAL STATEMENTS
GOODWIN PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30th April, 2024
2024
2023
Note
£’000
£’000
CASH FLOW FROM OPERATING ACTIVITIES
Profit from continuing operations after tax
…
…
…
…
…
…
Adjustments for:
Depreciation of property, plant and equipment …
…
…
…
…
Depreciation of right-of-use assets …
…
…
…
…
…
…
Amortisation and impairment of intangible assets
…
…
…
…
Finance costs (net)
…
…
…
…
…
…
…
…
…
Currency (gains) / losses
…
…
…
…
…
…
…
…
(1,025 )
Loss / (profit) on sale of property, plant and equipment
…
…
…
(29 )
Unrealised gain on 10 year interest rate swap derivative
…
…
…
(113 )
(3,189 )
Share of profit of associate company
…
…
…
…
…
…
(69 )
(65 )
UK tax incentive credit on research and development…
…
…
…
(660 )
(610 )
Tax expense
…
…
…
…
…
…
…
…
…
…
OPERATING CASH FLOW BEFORE CHANGES IN WORKING
CAPITAL AND PROVISIONS
Decrease / (increase) in inventories
…
…
…
…
…
…
(8,377 )
Increase in contract assets
…
…
…
…
…
…
…
…
(5,849 )
(3,804 )
Decrease / (increase) in trade and other receivables
…
…
…
…
(5,304 )
Increase in contract liabilities…
…
…
…
…
…
…
…
Increase in trade and other payables
…
…
…
…
…
…
CASH GENERATED FROM OPERATIONS
Interest received*
…
…
…
…
…
…
…
…
…
Interest paid*
…
…
…
…
…
…
…
…
…
…
(5,022 )
(2,496 )
Corporation tax paid
…
…
…
…
…
…
…
…
…
(2,587 )
(3,251 )
NET CASH INFLOW FROM OPERATING ACTIVITIES …
…
…
…
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment…
…
…
…
Acquisition of property, plant and equipment
…
…
…
…
…
(15,363 )
(18,871 )
Acquisition of intangible assets
…
…
…
…
…
…
…
(582 )
(675 )
Development expenditure capitalised
…
…
…
…
…
…
(1,456 )
(1,196 )
Dividend from associate company …
…
…
…
…
…
…
NET CASH OUTFLOW FROM INVESTING ACTIVITIES
…
…
…
(16,878 )
(20,524 )
CASH FLOWS FROM FINANCING ACTIVITIES
(8,869 )
Buy back of shares
…
…
…
…
…
…
…
…
…
Payment of capital element of lease liabilities
…
…
…
…
…
(2,910 )
(1,874 )
Dividends paid
…
…
…
…
…
…
…
…
…
…
(8,636 )
(8,289 )
Dividends paid to non-controlling interests
…
…
…
…
…
(473 )
(556 )
Proceeds from new loans
…
…
…
…
…
…
…
…
Repayment of loans
…
…
…
…
…
…
…
…
…
(1,152 )
(1,181 )
Change in bank overdrafts
…
…
…
…
…
…
…
…
(71 )
NET CASH OUTFLOW FROM FINANCING ACTIVITIES
(281 )
NET INCREASE IN CASH AND CASH EQUIVALENTS
…
…
…
Cash and cash equivalents at beginning of year…
…
…
…
…
Effect of exchange rate fluctuations on cash held
…
…
…
…
(211 )
(312 )
CASH AND CASH EQUIVALENTS AT END OF YEAR …
…
…
…20
*
The prior year comparitives have been increased by £481,000 due to the interest received from the interest rate swap in
the current year being £1,269,000, as shown in note 8.
The notes on pages 55 to 105 form part of these financial statements.
54
FINANCIAL STATEMENTS
1.
Accounting policies
Goodwin PLC (the “Company”) is incorporated in England and Wales.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the
information about the Company as a separate entity and not about its Group.
The Group’s financial statements have been prepared in accordance with UK Company Law and UK adopted
International Accounting Standards (IAS) and interpretations issued by the IFRS Interpretations Committee (IFRS IC)
applicable to companies reporting under UK adopted IFRS.
The Company has elected to prepare its financial statements in accordance with Financial Reporting Standard (FRS)
101 issued in the UK. These are presented on pages 92 to 104.
The accounting policies set out below have been applied consistently to all periods presented in these Group financial
statements.
Judgements made by the Directors, in the application of these accounting policies that have significant effect on the
financial statements and estimates with a possible significant risk of material adjustment in the next year are discussed
in note 2.
Going concern
The Directors, after having reviewed the Group forecasts and possible challenges that may occur over short to medium
term, are confident that the Group has adequate resources to continue to operate for at least twelve months from the
date that these financial statements are approved and have continued to adopt the going concern principle in preparing
the financial statements.
As at 30th April 2024, the Group’s gearing ratio stood at 35.1% (2023: 26.3%) against a substantial shareholders'
net worth of £122 million (2023: £125 million). The retained reserves of the Group put it in a strong position to deal with
any material unforeseen adverse issues that may occur and have an impact on the Group’s operations.
As part of the going concern process, the Group forecasts are stress tested by being subject to a number of severe but
conceivable financial challenges to ensure that the Group finances remain robust throughout the period being tested.
The stress test model begins with the Group forecasts, that have been consolidated from the individual forecasts
generated by the Directors of each of the subsidiaries and reflects their specific knowledge of their business and the
markets within which they operate, to ensure that the forecasts that they produce reflect the market conditions, the
business strategy and expected outlook. Each of these subsidiary level forecasts is then reviewed, challenged and
approved by the relevant Divisional Managing Director, who is immersed in each of these businesses and knows and
understands each of their markets. As the Group is so diverse, with two divisions in different sectors and multiple
different products within each division, several stress test events are used to reduce the pre-tax profit forecasts by
reducing revenues and consequently the pre-tax profit. Due to the diversity of the Group, it is feasible that one or two
events could take place, but it is highly improbable that all the stress test events would occur at the same time. The
stress tests implemented reduced revenues and consequently pre-tax profits, which for these stress tests implemented
reduced pre-tax profit by a combined amount of 44%, without reducing the discretionary capital expenditure
programme, maintaining overheads at their current expected levels, maintaining the dividend policy and utilising the
finance facilities at the same amounts that will be in place twelve months from the signing of these accounts. The
results of the stress test modelling did not highlight any going concern issues, breaches of covenants or requirements
for any further financing facilities in addition to those currently in place at the year end. Post year end, the Group has
renewed one of its Revolving Credit Facilities, that was due to expire, for a four-year term.
Whilst our carrying values of trade debtors and contract assets are significant, we see little risk here in terms of
recovery due to the quality of the customers that the Group contracts with. Where possible, we credit insure the
majority of our trade debtors and our pre-credit risk (work in progress), and for significant contracts where credit
insurance is not available we ensure, where possible, that those contracts are backed by letters of credit or cash
positive milestone payments.
As discussed elsewhere within these accounts, the Mechanical Engineering order book remains high and the
Refractory Engineering segment continues to be buoyant.
The Directors are confident that the Group and Company will have sufficient funds to continue to meet their liabilities as
they fall due for at least twelve months from the date of approval of the financial statements and therefore have
prepared the financial statements on a going concern basis.
Measurement convention
The financial statements are rounded to the nearest thousand pounds. The financial statements are based on the
historical cost basis except where the measurement of balances at fair value is required as below.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group controls an
entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. The financial statements of subsidiaries are included in the
55
NOTES TO THE FINANCIAL STATEMENTS
1.
Accounting policies (continued)
Basis of consolidation (continued)
Associates are those entities in which the Group has significant influence, but not control, over the financial and
operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the
voting power of another entity. Associates are accounted for using the equity method and are initially recognised at
cost. The Group's investment includes goodwill identified on acquisition, net of any accumulated impairment losses.
The consolidated financial statements include the Group's share of the total recognised income and expense and
equity movements of equity accounted investees, from the date that significant influence commences until the date that
significant influence ceases. When the Group's share of losses exceeds its interest in an equity accounted investee,
the Group's carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that
the Group has incurred legal or constructive obligations or made payments on behalf of an investee.
Foreign currency
The functional and presentational currency of the Group is Pound Sterling (£). Where foreign currency transactions are
hedged, the transactions are recorded at their hedged rate. All other transactions in foreign currencies are translated
into the respective functional currencies of the Group entities at the foreign exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated
at the foreign exchange rate ruling at that date. Foreign exchange movements associated with hedged transactions are
recognised in the cash flow hedge reserve, whilst non-hedged foreign exchange differences arising on translation are
recognised in the statement of profit or loss within operating profit.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation,
are translated to Sterling at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of
foreign operations are translated at an average rate for the period where this rate approximates to the foreign
exchange rates ruling at the dates of the transactions.
Exchange differences arising from the translation of foreign operations are taken directly to the translation reserve.
They are released into the statement of profit or loss upon disposal of the foreign operation.
New IFRS standards and interpretations adopted during 2023 / 2024 The
IASB and IFRIC issued the following amendments:
•
•
•
•
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of
Accounting Policies – (effective for periods commencing on or after 1st January 2023).
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ‘Definition of Accounting
Estimates’ – (effective for periods commencing on or after 1st January 2023).
Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single
Transaction – (effective for periods commencing on or after 1st January 2023).
Amendments to IAS 12 Income Taxes: International Tax Reform - Pillar Two Model Rules (effective for periods
commencing on or after 1st January 2023).
The implementation of these amendments has not had a material impact on the Group’s financial statements.
New IFRS standards and interpretations not adopted
Amendments to existing standards or new standards and interpretations that have been issued but are not yet effective
and have not been adopted by the Group are listed below:
•
•
Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current
and Classification of Liabilities as Current or Non-current – Deferral of Effective Date – (effective for periods
commencing on or after 1st January 2024).
Amendments to IAS 1 Presentation of Financial Statements: Non-current liabilities with covenants – (effective for
periods commencing on or after 1st January 2024).
The Group does not expect that any standards, amendments or interpretations issued by the IASB, but not yet
effective, will have a material impact on the financial statements once adopted.
Revenue
Revenue is recognised when a customer obtains control of the goods or services i.e. upon the satisfaction of a
performance obligation. Judgement is required to determine the timing of the transfer of control, and whether it is at a
point in time or over time. Where a contract contains several performance obligations then the contract is unbundled
and each performance obligation is dealt with separately.
Standard inventory product lines and consumables
Typically applies to the sale of slurry pumps within the Mechanical Engineering Division and to the whole of the
Group’s Refractory Engineering Division. The revenue here relates to standard products manufactured for sale. The
56
NOTES TO THE FINANCIAL STATEMENTS
1.
Accounting policies (continued)
Revenue (continued)
control of the goods in accordance with the International Commercial (INCO) terms agreed. There are also bill and hold
arrangements, where control passes to the customer once the customer confirms that the job has been completed, but
where the goods are yet to be collected and remain at the Company premises.
Minimum period contracts for the provision of goods and services
Predominantly the supply of broadband and related services under minimum term contracts. Performance obligations
are satisfied over time and revenue is recognised equally over the term of the contract.
Engineered bespoke products – performance obligations satisfied over time
Typically applies to the Group’s Mechanical Engineering Division and covers sales orders which are customer
bespoke, and have a cancel for convenience clause. This clause then permits the Group subsidiary to claim profit as
the project progresses over time to completion and if the customer were to trigger the cancel for convenience clause
within the contract, claim profit from the customer to that point in time. In such cases, the performance obligations are
treated as satisfied over time (i.e. as the contract progresses) and revenue is taken based on the percentage
completion of the contract by the creation of a contract asset. Work in progress is eliminated and replaced by a
contract asset. Measuring progress requires judgement as to the stage of completion of each job, and the production of
forecasts of costs to complete, which contain allowances for technical risks and inherent uncertainties. The input
method is considered to be the most appropriate, because costs are the significant indicator of the job performance
and expected contract profitability. Using the input method, costs to date are factual and based on job cost records. As
jobs progress through the factories, the cost estimate sheets, generated at order placement, are adjusted for known
time-based or commodity-based variances. The cost estimate sheets are the source for the calculation of the total
estimated costs on a job. At both senior and middle management level, there is a high level of continuity and expertise
to interrogate the costings and so arrive at an appropriate assessment of the total costs on a job, and to then determine
the percentage of completion for each contract. The contracts within the Group do not include variable consideration.
Contract modifications
Where the Group has modifications or variations to a contract, then these are included in the contract calculations only
when there is a high probability that they are certain to occur, which the Group considers to be when there is a signed
agreement in place.
Engineered bespoke products – performance obligations satisfied at a point in time
Typically applies to the Group’s Mechanical Engineering segment and covers sales orders which are customer
bespoke, but permit the Group subsidiary to claim profit only on completion of the project or only the costs incurred to
date in the event the customer triggers the cancel for convenience clause within the contract. In such cases, the
performance obligation is deemed to be met and revenue taken as order lines are shipped in accordance with the
relevant shipping terms or via a bill and hold arrangement, whereby control passes to the customer, once the customer
confirms that the job has been completed, but where the goods are yet to be collected, and remain at the Company
premises.
Where the contract period is less that one year, the incremental costs of winning a contract are recognised as an
expense as they are incurred.
Contract assets / contract liabilities
Contract assets represent the Group’s rights to consideration for work completed but not invoiced at the reporting date
for bespoke product contracts where, as part of the contract terms, there is a termination for convenience clause which,
if invoked, allows the Group company to charge for profit earned to date. Contract assets are transferred to receivables
when the rights to consideration become unconditional, which is generally when the Group invoices the customer.
Where payments are received in advance and exceed the costs incurred in constructing the asset together with
forecast margin earned, the balances are disclosed as contract liabilities.
Employment costs
Pension costs
The Group contributes to a defined contribution pension scheme for UK employees under an Auto Enrolment Pension
arrangement as required by Government legislation. The assets of the scheme are held in independently administered
funds. Group pension costs are charged to the statement of profit or loss in the year for which contributions are
payable.
Contributions to the schemes are made on a monthly basis and at the end of the financial year there were one month’s
contributions outstanding, which were paid in the following month.
Termination costs
Employee termination costs are expended in the profit and loss figures in a year as soon as the expense is known and
is certain.
Share-based payment transactions
Share-based payments arrangements, in which the Group receives goods or services as consideration for its own
equity instruments, are accounted for as equity-settled share-based payment transactions, regardless of how the equity
57
NOTES TO THE FINANCIAL STATEMENTS
1.
Accounting policies (continued)
Employments costs (continued)
The grant date fair value of share-based payment awards granted to employees is recognised as an expense, with a
corresponding increase in equity, over the period in which the employees become unconditionally entitled to the
awards. The fair value of the awards is measured using an option valuation model, taking into account the terms and
conditions upon which the awards were granted.
Financial income and costs
Financial expenses comprise interest payable (together with the amortisation of any facility arrangement fees) and
interest on lease liabilities using the effective interest method. Borrowing costs that are directly attributable to the
acquisition, construction or production of an asset that takes a substantial time to be prepared for use are capitalised
as part of the cost of that asset. Interest income and interest payable is recognised in the statement of profit or loss as
it accrues.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the statement of profit or
loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided
for: the initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither accounting nor
taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent
that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or
substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.
Financial instruments
Measurement
Trade and other receivables, which do not contain a significant financing component, are measured, initially, at the
transaction price. All other financial assets and liabilities are measured at fair value, on initial recognition.
Non-derivative financial assets are measured subsequently at amortised cost if the objective is to hold them to
collect contractual cash flows and their contractual terms include cash flows on specified dates, which are payments
of principal and interest.
Impairment
The Group has elected to measure loss allowances for trade receivables and contract assets at an amount equal to
lifetime expected credit losses (ECLs). Specific impairments are made when there is a known impairment need
against trade receivables and contract assets. When estimating ECLs, the Group assesses reasonable, relevant
and supportable information, which does not require undue cost or effort to produce. This includes quantitative and
qualitative information and analysis, incorporating historical experience, informed credit assessments and forward-
looking information. Loss allowances are deducted from the gross carrying amount of the assets. Where material,
impairment losses related to trade and other receivables, including contract assets, are disclosed separately in the
statement of profit or loss.
Principal non-derivative financial assets
Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. They are recognised initially at the amount of consideration that is unconditional. Trade receivables are
held with the intention of collecting the contractual cash flows and are measured subsequently, therefore, at
amortised cost.
Other financial assets
Other financial assets principally comprise short-term balances, which include sales taxes repayable to the Group.
After being recognised initially at fair value, other receivables are measured, subsequently, at amortised cost. The
carrying amount of other receivables is considered to be a reasonable approximation of their fair value.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, together with cash deposits with an original maturity
58
NOTES TO THE FINANCIAL STATEMENTS
1.
Accounting policies (continued)
Financial instruments (continued)
Principal non-derivative financial liabilities
Bank borrowings
Interest-bearing bank loans and overdrafts are measured initially at their fair value less attributable transaction
costs. They are carried, subsequently, at amortised cost and finance charges are recognised in the statement of
profit or loss over the contract term, using an effective rate of interest.
Trade and other payables
Trade and other payables are recognised initially at fair value, and are subsequently reported at amortised cost.
Derivative financial assets and liabilities
Derivative financial assets and liabilities are recognised at fair value. The fair value of forward foreign exchange
contracts is equal to the present value of the difference between the contractual forward price and the current
forward price for the residual maturity of the contract adjusted for counterparty credit risk. The recognition of the
gain or loss on re-measuring to fair value those forward foreign exchange contracts, which are used for hedging, is
outlined below; for other forward exchange contracts and the interest rate swap derivative, the gain or loss is
recognised in the profit or loss.
Fair value derivation
IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the source
of inputs used to derive the fair value. This classification uses the following three-level hierarchy:
Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 — inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair value of derivative financial assets and liabilities is derived using level 2 inputs. As at the year-end, the
Group held currency derivatives and an interest rate swap derivative. For the currency derivatives, the valuations
are based on the period end currency rates, as adjusted for the forward points to maturity, the time value of money
and the banks’ assessed credit risk and margin. For the interest rate swap derivative, the valuation is arrived at by
comparing the forward interest curve as at 30th April, 2024 out to maturity against our fixed swap rate. The result is
then discounted for the time value of money and adjusted for credit risk and margin.
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset
or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative financial
instrument is recognised directly in the hedging reserve. Our hedge relationships are aligned with our risk management
objectives and strategy, resulting in a more qualitative and forward-looking approach in ensuring hedge effectiveness.
These hedging arrangements have been entered into to mitigate foreign currency exchange risk arising from certain
highly probable sales and purchases transactions denominated in foreign currencies.
For cash flow hedges, the associated cumulative gain or loss on the relevant derivative financial instrument is removed
from equity and recognised in the statement of profit or loss in the same period or periods during which the hedged
forecast transaction affects the statement of profit or loss. Any identified ineffective portion of the hedge is recognised
immediately in the statement of profit or loss. Until 30th April, 2023, only the change in spot rate was designated as the
hedging instrument, with the change in fair value relating to forward points being reported separately as deferred costs
of hedging within other comprehensive income as permitted by IFRS 9. From 1st May, 2023, the full value of the
change in fair value is designated as the hedging instrument and taken to the cash flow hedge reserve.
Where a derivative financial instrument is not hedge accounted, all changes in fair value are recognised immediately in
profit or loss.
When a hedging instrument expires or is sold, terminated or exercised, or the Group revokes designation of the hedge
relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss at that point
remains in equity and is recognised in accordance with the above policy when the transaction occurs. If the cash flow
hedge transaction is no longer expected to take place, the cumulative unrealised gain or loss recognised in equity is
recognised in the statement of profit or loss immediately, within administration expenses.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
59
NOTES TO THE FINANCIAL STATEMENTS
1.
Accounting policies (continued)
Property, plant and equipment (continued)
Depreciation is charged to the statement of profit or loss over the estimated useful lives of each part of an item of
property, plant and equipment on the following bases:
• Freehold land
…
…
…
…
Nil
• Freehold buildings …
…
…
…
25 – 50 years on reducing balance or cost
• Leasehold property
…
…
…
over period of lease
• Plant and machinery
…
…
…
4
–
20 years on reducing balance or cost
• Motor vehicles
…
…
…
…
4
–
7 years on reducing balance or cost
• Tooling
…
…
…
…
…
over estimated production life
• Other equipment
…
…
…
…
4
–
7 years on reducing balance or cost
…
Nil
Before being brought into use, assets are assessed individually to determine which is the most appropriate
depreciation method. At present, most assets are being depreciated on a reducing balance basis.
Definition of a lease
A contract is a lease or contains a lease if it transfers the right to use an identified asset over the contract term, in
exchange for payment. In determining whether a contract gives the Group the right to use an asset, the Group
assesses whether:
•
•
•
the contract involves the use of an identified asset;
the Group has the right to obtain substantially all of the economic benefit of using the asset; and
the Group has the right to direct the use of the asset by deciding how the asset is employed.
Lease term
The lease term is the non-cancellable period of a lease, and options to extend the lease or terminate it, where it is
probable that the Group will exercise the available options. At the start of a lease, the Group makes a judgement about
whether it is reasonably certain to exercise the options, and reassesses this judgement at every reporting period.
Contracts, where the original lease term has expired, with assets continuing to be leased on a short-term rolling basis
of a few months, are treated as short-term leases.
Lease balances
A
right-of-use asset and a lease liability are calculated at the beginning of a lease. The right-of-use asset is measured
initially at cost, being the opening lease liability, adjusted for any lease payments made by the start of the lease,
adjusted for any initial direct costs, which have been incurred.
The lease liability is measured initially at the present value of the lease payments, which are outstanding at the start
date, discounted at either the rate implicit in the lease or the Group’s incremental borrowing rate. With the exception of
leases containing an option to purchase, the Group uses its incremental borrowing rate as the discount rate. Lease
liabilities are measured at amortised cost, using the effective rate, and adjusted as required for any subsequent change
to the lease terms.
The right-of-use asset is depreciated on a straight-line basis over the lease term, or from the start date of the lease to
the end of the useful life of the right-of-use asset as appropriate. The method of calculating the estimated useful lives of
the right-of-use assets and testing for impairment is the same as that for property, plant and equipment.
Recognition exemptions
Payments for short-term leases, lasting twelve months or less, without a purchase option continue to be reported as an
operating expense on a straight-line basis over the term of the lease.
The cost of leasing low-value items will continue to be reported as an operating expense over the life of the lease.
Lease portfolios
The Group has leases for the following types of assets:
Land and buildings – the Group leases a number of factory buildings, warehouses and office buildings.
Plant and equipment – a number of significant items of plant, such as CNC machines and furnaces, have been leased
under contracts with an option to buy the asset at the end of the lease term. The Group also leases motor vehicles. For
motor vehicles the Group has applied the practical expedient in paragraph 15 of IFRS 16, whereby non-lease
components have not been separated from lease components, such that lease costs and service costs are treated as a
single lease component.
Printers and photocopiers – the Group has applied the recognition exemption for low-value assets to these leases.
Government grants
Government grants relating to income are recognised in the statement of profit or loss.
Government grants relating to assets are recognised in the balance sheet as a deduction in the carrying amount of the
60
NOTES TO THE FINANCIAL STATEMENTS
1.
Accounting policies (continued)
Intangible assets and goodwill
All business combinations are accounted for by applying the purchase method. Goodwill is recognised as the
difference between the consideration transferred and the fair value of identifiable assets, liabilities and contingent
liabilities assumed in a business combination. Identifiable intangibles are those which can be sold separately or which
arise from legal rights regardless of whether those rights are separable.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and
is not amortised but is tested annually for impairment.
Negative goodwill arising on an acquisition is recognised immediately in the statement of profit or loss.
Goodwill or negative goodwill resulting from increasing the percentage ownership of an existing subsidiary is reported
as an equity transaction with owners.
Expenditure on research activities is recognised in the statement of profit or loss as an expense as incurred.
Expenditure on development activities is capitalised if the product or process is technically and commercially feasible
and the Group has sufficient resources to complete development. The expenditure capitalised includes the cost of
materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in
the statement of profit or loss as an expense as incurred. Capitalised development expenditure is stated at cost less
accumulated amortisation and impairment losses.
Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and
impairment losses.
Amortisation is charged to the statement of profit or loss on a straight-line basis over the estimated useful lives of
intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are
systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the date
they are available for use. The estimated useful lives are as follows:
• Capitalised development costsMinimum expected order unit intake or minimum product life
• Manufacturing rights6 - 15 years
•
Brand names and intellectual property 3 - 20 years
•
Customer lists
2
- 10 years
•
Distribution rights
25 years
•
Software and licences
3
- 5 years
Non-compete agreements
15 years
Impairment of intangibles
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is
any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Recoverable
amount is the greater of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell or value in use.
For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the
recoverable amount is estimated at each balance sheet date.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. Impairment losses are recognised in the statement of profit or loss.
Reversals of impairment
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed when there is an indication that the impairment loss may no
longer exist and there has been a change in the estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset of CGU’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been
recognised.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in, first-out principle and
includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In
the case of manufactured inventories and work in progress, cost includes an appropriate share of overheads based on
normal operating capacity.
Provisions
General provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If
the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and, where appropriate, the risks specific to the
61
NOTES TO THE FINANCIAL STATEMENTS
1.
Accounting policies (continued)
Provisons (continued)
Warranty provisions
The Group carries a warranty provision where applicable. The warranties are committed at contract placement stage
and typically, where given to a customer, the warranty has a duration of between 1 and 3 years. At the expiry of the
warranty period, to the extent not utilised, the warranty provision is then released back into the statement of profit or
loss. The warranties are generally passive in nature confirming that the goods comply with contractual specifications
and given the incidence of product failure is low, the warranties have no tangible customer value.
2.
Accounting estimates and judgements
The Group makes judgements and estimates in applying the Group’s accounting policies, to prepare the financial
statements.
Key estimates and judgements
IFRS 15 Revenue Recognition
The Directors consider that a key estimate, which may have a material impact on the financial statements, is in relation
to IFRS 15 and, in particular, where we are required to account on a revenue over time basis on some of our
mechanical engineering work in progress contracts. When reviewing the terms of contracts with customers, judgement
is required to assess the number of performance obligations within the contracts and when to recognise contract
provisions.
For contracts where revenue is recognised over time, there is a need to estimate the costs to complete on these
contracts. The costs to complete estimates can be complex, as they need to consider several variable factors such as
the impact of delays, cost overruns and also any variations to contract. Once complete, these estimates then drive the
amount of revenue recognised. The estimates are prepared and reviewed by management with suitable experience
and qualifications, and who endeavour to ensure the revenue mandated to be recognised prior to the completion of the
contract is not under or overstated, based on possible technical risks and inherent uncertainties.
Whilst cost to complete estimates are based on management’s best knowledge at the time, it is clear, due to the very
nature of an estimate that the eventual outcomes may differ due to unforeseen events. However, the advanced stage
of completion of a number of contracts reduces the risk of unforeseen events arising, and given that the initial position
taken on material contracts at the balance sheet date is revisited as part of the post balance sheet review process prior
to the financial statements being signed off, we would conclude that the risk of a material impact on the financial
statements arising from changes in estimates here is low. If the costs to complete contracts, that had not been
completed as at the year end, were 1% higher than estimated at the year-end, for which this increase in costs could not
be passed on to the customer, then the impact to the current year’s revenue would be a reduction of £420,000.
Where there are claims which are subject to commercial negotiation, these are recognised only when there is a high
level of certainty, which the Group considers this to be when there is a signed agreement in place. Consideration is
given to the requirements of IFRS 15 in determining the appropriate accounting for the claim settlements which takes
into account the nature of the settlement and whether it relates to a point in time or over time revenue contract.
Determination of the basis for the amortisation / impairment of intangible assets
The Group carries different classes of intangible assets on its balance sheet, which include goodwill, manufacturing
rights, brand names and development costs. Capitalised intangible costs are amortised on a straight-line basis, which
commences when the Group is expected to benefit from cash inflows. A key estimate is required in determining the
useful economic life over which each asset is to be amortised, with current timeframes ranging from fifteen to twenty-
five years. In arriving at the appropriate timeframe for amortisation, there are essentially two key estimates, namely the
product life cycle and the amount of profit generated from the expected income streams. In terms of sensitivity, then, in
regard to the intangible assets other than goodwill, if we were to assume assets with estimated useful lives of fifteen
years or more were reduced by one third, then the pre tax profit and loss impact on the current year reported figures
would be to reduce profits by £471,000 (2023: £488,000). In accordance with IAS 38, the basis on which goodwill /
intangible assets are impaired / amortised is assessed annually. Sensitivity as regards goodwill is considered within
note 16 to these financial statements.
Duvelco viability
The Company has invested circa £18.5 million in the area of high-performance polyimide resins. The Company will
commence a period of testing and commissioning of the plant in Q2 and Q3 of financial year 2025 before any
commercial activity takes place. The judgement of the Board is that the market potential here is significant and that
future profitability is expected to be strong. Accordingly, the Directors do not see a need to impair our investment in this
area.
Apart from above, the Group does not have any key assumptions concerning the future, or other key sources of
estimation uncertainty in the reporting period that may have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year.
62
NOTES TO THE FINANCIAL STATEMENTS
2.
Accounting estimates and judgements (continued)
Other estimates and judgements
Other than as reported above, the Directors do not consider there to be any other key estimates or judgements in
preparing the financial statements. The estimates and judgements outlined below formed the main areas of focus for
the Directors throughout the year.
Inventory provisions
The Group's Directors in conjunction with senior management in the subsidiaries regularly review the recoverability of
their stated raw material and work in progress balances, paying particular attention to net realisable value and stock
obsolescence issues. The estimates are in relation to costs to complete and the expected level of future sales orders
for slow moving stocks. Where it is judged that a provision is deemed necessary, the appropriate adjustments are
made in the relevant subsidiary's books at the time a shortfall is identified.
Trade receivable provisions
Whilst trade debtors are insured wherever possible, the Directors are able to exercise judgement in relation to non-
credit insured contracts as set out in note 28 (a). The Group Directors, in conjunction with the subsidiary credit
controllers, closely monitor the adherence to payment terms across all accounts (whether insured or not) and make
provision for any losses that are likely to materialise. There is a requirement under IFRS 9 to consider the statistical
likelihood of a bad debt based off previous experience. Historically, the Group’s bad debt write offs have been
negligible and the Group results are not impacted by this requirement for a statistically based provision.
3.
Segmental information
Products and services from which reportable segments derive their revenues
For reporting to the chief operating decision maker, the Board of Directors’, and as outlined in the Business Model
section of the Strategic Report on page 7, the Group is organised into two reportable operating segments according to
the different products and services provided by the Mechanical Engineering and Refractory Engineering Divisions.
Segment assets and liabilities include items directly attributable to segments as well as group centre balances which
can be allocated on a reasonable basis. Associates are included in Refractory Engineering. In accordance with the
requirements of IFRS 8, information regarding the Group’s operating segments is reported below.
There are no other reportable segments apart from those identified.
Year ended 30th April, 2024
Year ended 30th April, 2023
Mechanical
Refractory
Mechanical
Refractory
Engineering
Engineering
Total
Engineering
Engineering
Total
£’000
£’000
£’000
£’000
£’000
£’000
Revenue
Total revenue
…
…
156,944
75,859
232,803
147,538
80,340
227,878
Intra-segment revenue
(28,912)
(12,633)
(41,545)
(23,771)
(18,365)
(42,136)
External revenue
…
128,032
63,226
191,258
123,767
61,975
185,742
Profit
Segment operating
profit…
…
…
18,861
13,423
32,284
12,171
12,772
24,943
Share of profit of
-
-
associate company
…
69
69
65
65
Segment profit
before taxation
18,861
13,492
32,353
12,171
12,837
25,008
Group centre costs
…
(5,389)
(4,630)
Finance costs (net)
…
(2,870)
(1,438)
Profit before taxation
and movement in fair
value of interest rate
swap
24,094
18,940
Percentage of segment
profit before tax
58%
42%
100%
49%
51%
100%
63
NOTES TO THE FINANCIAL STATEMENTS
3.
Segmental information (continued)
Products and services from which reportable segments derive their revenues (continued)
Year ended 30th April, 2024
Year ended 30th April, 2023
Group
Mechanical
Refractory
Group
Mechanical
Refractory
Centre Engineering Engineering
Total
Centre Engineering Engineering
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Net assets
Total assets
17,338
192,608
74,282
284,228
18,644
175,023
69,166
262,833
Total liabilities
(511)
(118,132)
(38,935)
(157,578)
(2,821)
(103,234)
(27,621) (133,676)
Total
16,827
74,476
35,347
126,650
15,823
71,789
41,545
129,157
For the purposes of monitoring segment performance and allocating resources between segments, the Group's Board
of Directors monitors the tangible and financial assets attributable to each segment. All assets and liabilities are
allocated to reportable segments with the exception of some of those held by the parent Company, Goodwin PLC.
Year ended 30th April, 2024
Year ended 30th April, 2023
Group
Mechanical
Refractory
Group
Mechanical
Refractory
Centre
Engineering Engineering
Total
Centre Engineering
Engineering
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Segmental capital expenditure
Property,
plant and
736
10,102
5,583
16,421
equipment
630
15,623
4,928
21,181
Right-of-use
180
934
634
1,748
assets
220
1,233
66
1,519
Intangible
372
1,209
456
2,037
assets
11
508
1,305
1,824
Total
1,288
12,245
6,673
20,206
861
17,364
6,299
24,524
Segmental depreciation, amortisation and impairment
Depreciation
1,181
4,978
1,945
8,104
1,070
4,872
1,528
7,470
Amortisation
85
446
810
1,341
and impairment
64
446
747
1,257
Total
1,266
5,424
2,755
9,445
1,134
5,318
2,275
8,727
Geographical segments
The Group operates in the following principal locations. In presenting the information on geographical segments,
revenue is based on the location of its customers and assets on the location of the assets.
Year ended 30th April, 2024
Year ended 30th April, 2023
Non-
Capital
Non-
Capital
Net
current
expendi-
Net
current
expendi-
Revenue
assets
assets
ture
Revenue
assets
assets
ture
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
UK
61,595
78,978
117,376
14,887
55,867
82,669
114,235
21,533
Rest of Europe
21,522
6,884
5,132
1,532
28,367
10,636
4,224
790
USA
21,480
-
-
-
19,854
-
-
-
Pacific Basin
42,903
17,374
7,009
692
34,725
15,982
7,029
330
Rest of World
43,728
23,414
14,292
3,095
46,929
19,870
8,930
1,871
Total
191,258
126,650
143,809
20,206
185,742
129,157
134,418
24,524
64
NOTES TO THE FINANCIAL STATEMENTS
4.
Revenue
The following tables provide an analysis of revenue by geographical market and by product line.
Geographical market
Year ended 30th April, 2024
Year ended 30th April, 2023
Mechanical
Refractory
Mechanical
Refractory
Engineering
Engineering
Total
Engineering
Engineering
Total
£’000
£’000
£’000
£’000
£’000
£’000
UK
45,870
15,725
61,595
41,112
14,755
55,867
Rest of Europe
13,460
8,092
21,522
21,269
7,098
28,367
USA
20,571
909
21,480
19,141
713
19,854
Pacific Basin
19,503
23,400
42,903
12,253
22,472
34,725
Rest of World
28,628
15,100
43,728
29,992
16,937
46,929
Total
128,032
63,226
191,258
123,767
61,975
185,742
Product lines
Year ended 30th April, 2024
Year ended 30th April, 2023
Mechanical
Refractory
Mechanical
Refractory
Engineering
Engineering
Total
Engineering
Engineering
Total
£’000
£’000
£’000
£’000
£’000
£’000
Standard products and
13,833
63,226
77,059
consumables
13,767
61,975
75,742
Bespoke products – point in time
17,380
-
17,380
30,002
-
30,002
Point in time revenue
31,213
63,226
94,439
43,769
61,975
105,744
Minimum period contracts
5,767
-
5,767
4,335
-
4,335
Bespoke products – over time
91,052
-
91,052
75,663
-
75,663
Over time revenue
96,819
-
96,819
79,998
-
79,998
Total revenue
128,032
63,226
191,258
123,767
61,975
185,742
The following table presents information about receivables, work in progress, contract assets and liabilities
from contracts with customers.20242023
£’000£’000
Trade receivables due within one year (note 19)
…
…
…
…
…
…
26,364
28,094
Work in progress (note 18) …
…
…
…
…
…
…
…
…
…
14,240
13,001
Contract assets
…
…
…
…
…
…
…
…
…
…
…
22,027
16,257
Contract liabilities
…
…
…
…
…
…
…
…
…
…
…
(14,856)
(32,747)
Contract liabilities due after more than one year
…
…
…
…
…
…
(19,268)
-
NOTES TO THE FINANCIAL STATEMENTS
4. Revenue (continued)
Product lines (continued)
2024
2023
£’000
£’000
Revenue recognised in the year, which was included in the contract liability
balance at the beginning of the period …
…
…
…
…
…
…
…
13,328
7,711
Revenue recognised from performance obligations, which were satisfied
(or partially satisfied) in previous periods *
…
…
…
…
…
…
…
936
5,259
* These figures relate to contract modifications, which are recognised only when there is a high level of certainty.
The Group reviewed the contract assets at year end and for all contracts did not have to make any impairment provision
(2023: none).
Incremental costs of obtaining contracts lasting less than one year, are recognised as an expense, when incurred, in
accordance with the practical expedient in IFRS 15, paragraph 94.
The Group’s revenue is not significantly impacted by seasonal or cyclical events. The potential risk of the loss of any key
customer is limited as no single customer accounts for more than 10% of annual revenue (2023: none).
Performance obligations
A performance obligation is the value of work still to complete on a contract.
The aggregate amount of the transaction price allocated to the performance obligations for longer-term contracts,
which are unsatisfied (or partially unsatisfied) as at the end of the reporting period is shown below.
2024
2023
£’000
£’000
Performance obligations due to be satisfied within one year …
…
…
…
48,932
42,316
Performance obligations due to be satisfied between 2-3 years …
…
…
…
91,239
59,575
Performance obligations due to be satisfied between 4-5 years …
…
…
…
20,596
33,494
Performance obligations due to be satisfied after more than 5 years
…
…
…
2,743
10,644
163,510
146,029
The Group has applied the practical expedient in IFRS 15, paragraph 121, and has not disclosed the remaining
performance obligations for contracts which have an original expected duration of one year or less.
5.
Expense classification
The Board has taken the decision to present the statutory reporting of gross profit to allocate costs, which align more
appropriately with the Group’s operational structure and how it is calculated within the Group’s management accounts
to ensure that the end user of the statutory accounts can review the financial performance of the Group on the same
basis as the Board.
Year ended 30th April, 2023
Original
Adjustment /
Current
presentation
Reclassification
presentation
£’000
£’000
£’000
Statement of profit or loss
Cost of sales
…
…
…
…
…
…
…
139,521
(22,548)
116,973
Selling and distribution costs
…
…
…
…
3,741
5,882
9,623
Administrative expenses
…
…
…
…
…
22,167
16,666
38,833
Total costs
165,429
-
165,429
Payroll costs (note 7)
Cost of sales
…
…
…
…
…
…
…
36,783
(15,079)
21,704
Selling and distribution costs
…
…
…
…
-
4,069
4,069
Administrative expenses
…
…
…
…
…
13,292
11,010
24,302
Total payroll costs
50,075
-
50,075
Right-of-use depreciation charge (note 13)
Cost of sales
…
…
…
…
…
…
…
731
(85)
646
Administrative expenses
…
…
…
…
…
467
85
552
Total right-of-use depreciation charge
1,198
-
1,198
66
NOTES TO THE FINANCIAL STATEMENTS
6.
Expenses and auditor’s remuneration
The following are included in profit before taxation:
2024
2023
Charged / (credited) to the statement of profit or loss
£’000
£’000
Depreciation:
6,607
Owned assets …
…
…
…
…
…
…
…
…
…
…
6,272
Right-of-use assets …
…
…
…
…
…
…
…
…
…
1,497
1,198
Amortisation and impairment of intangible assets
…
…
…
…
…
1,341
1,257
(Profit) / loss on sale of other tangible fixed assets
…
…
…
…
…
(29)
134
Research expenditure
…
…
…
…
…
…
…
…
…
…
2,598
3,783
Impairment / (reversal) of trade receivables
60
charged to the statement of profit or loss
…
…
…
…
…
…
…
(237)
Realised currency losses / (gains)
…
…
…
…
…
…
…
…
1,153
(678)
Unrealised currency (gains) / losses …
…
…
…
…
…
…
…
(567)
615
Fair value movement on unhedged currency contracts …
…
…
…
…
2
156
Hedge reserve ineffectiveness (gains) / losses
…
…
…
…
…
…
(461)
442
Fees receivable by the auditor and the auditor’s associates in respect of:
88
Audit of these financial statements
…
…
…
…
…
…
…
80
Audit of the financial statements of subsidiaries
…
…
…
…
…
369
344
Expenses relating to short-term property leases …
…
…
…
…
…
140
300
Expenses relating to short-term plant and equipment leases …
…
…
…
197
188
Expenses relating to leases of low-value assets
…
…
…
…
…
…
17
11
Government grants received
…
…
…
…
…
…
…
…
…
(24)
(331)
The fair value movement on unhedged currency contracts and ineffectiveness are reported within administrative
expenses.
7.
Staff numbers and costs
The average number of persons employed by the Group (including Directors) during the year, analysed by category,
was as follows:
2024
2023
Number
Number
Subsidiary employees
…
…
…
…
…
…
…
…
…
…
1,169
1,093
Goodwin PLC Company employees …
…
…
…
…
…
…
…
56
51
1,225
1,144
2024
2023
The aggregate payroll costs of these persons were as follows:
£’000
£’000
Wages and salaries …
…
…
…
…
…
…
…
…
…
52,699
44,125
Social security costs…
…
…
…
…
…
…
…
…
…
5,037
4,489
Other pension costs …
…
…
…
…
…
…
…
…
…
1,660
1,461
59,396
50,075
2024
2023
Payroll costs are reported as follows:
£’000
£’000
Cost of sales …
…
…
…
…
…
…
…
…
…
…
27,211
21,704
Selling and distribution costs
…
…
…
…
…
…
…
…
4,434
4,069
Administrative expenses
…
…
…
…
…
…
…
…
…
27,751
24,302
59,396
50,075
The prior year figures have been updated and reflect the current classification of costs. Refer to note 5 for details.
Details of the Directors’ remuneration can be found within the Directors’ Remuneration Report on pages 35 to 37. The
emoluments of the highest paid Director were £435,000 (2023: £406,000). The number of Directors, who were members
67
NOTES TO THE FINANCIAL STATEMENTS
8. Finance costs (net)
2024
2023
£’000
£’000
Income from interest rate swap
…
…
…
…
…
…
…
…
1,269
481
Other interest income
…
…
…
…
…
…
…
…
…
…
145
93
Interest income
…
…
…
…
…
…
…
…
…
…
…
1,414
574
Interest expense on lease liabilities
…
…
…
…
…
…
…
…
693
266
Interest expense on bank loans and overdrafts
…
…
…
…
…
…
4,310
2,237
Capitalised interest on assets in the course of construction
…
…
…
…
(719)
(491)
Interest expense
…
…
…
…
…
…
…
…
…
…
…
4,284
2,012
Finance costs (net)
…
…
…
…
…
…
…
…
…
…
2,870
1,438
Due to the increase in the interest rate swap in the current year, the comparative figures have been updated to show the
income from the interest rate swap separately.
The average interest rate used to calculate capitalised interest was 5.02% (2023: 3.13%). This takes into account the
benefit of the interest rate swap.
9. Taxation
Recognised in profit or loss
2024
2023
Current tax expense
£’000
£’000
3,207
Current year …
…
…
…
…
…
…
…
…
…
…
2,678
Under-provision in prior years
…
…
…
…
…
…
…
…
70
191
Deferred tax expense
3,277
2,869
Origination and reversal of temporary differences
3,460
– current year (see below)
…
…
…
…
…
…
…
…
1,926
Origination and reversal of temporary differences
-
– current year rate differences …
…
…
…
…
…
…
…
596
Origination and reversal of temporary differences
(246)
– (over) / under-provision in prior years
…
…
…
…
…
…
225
3,214
2,747
Total tax expense
…
…
…
…
…
…
…
…
…
…
6,491
5,616
UK corporation tax
The tax charge on the face of the P and L is the tax applicable to the profits of each Group company calculated at its
country tax rate. The UK taxation system has provisions within it that allow for 100%, and in previous recent tax years,
up to 130% first year capital allowances on certain assets purchased during the year. Due to the high capital expenditure
within the UK element of the Group over the last few years, the Group has been able to utilise these first year
allowances and the Super Deduction tax scheme within the UK Group taxation computations. This has resulted in a
lower amount of taxation actually being paid in the UK for both financial year 2024 and financial year 2023 and a
significant deferred tax charge of 50% of the calculated tax, which will not be paid until sometime in the future.
Origination and reversal of temporary differences – current year
The majority of the deferred tax expense shown above comes from the difference between the accounting treatment and
the tax treatment of plant and equipment expenditure. Under the current UK tax regime, most of the plant and equipment
expenditure is 100% offset against the profits in the year of expenditure and so produces a very low amount of taxation
payable. In future years, the tax benefit, gained from these first year allowances, reverses over time as future profits are
68
NOTES TO THE FINANCIAL STATEMENTS
9. Taxation (continued)
Reconciliation of effective tax rate
2024
2023
£’000
£’000
Profit before taxation
…
…
…
…
…
…
…
…
…
…
24,207
22,129
Tax using the UK corporation tax rate of 25.00% (2023:
19.49%)
…
…
…
6,052
4,313
Tax effect of amounts which are not deductible / (taxable)
in calculating taxable income:
-
Impact of super-deduction on property, plant and equipment additions
…
…
(337)
Non-taxable income
…
…
…
…
…
…
…
…
…
…
(11)
(17)
Non-deductible expenses
…
…
…
…
…
…
…
…
…
325
59
Other permanent timing differences …
…
…
…
…
…
…
…
(14)
(20)
(Over) / under-provision in prior years
…
…
…
…
…
…
…
(176)
416
Losses not recognised
…
…
…
…
…
…
…
…
…
…
163
160
Rate differences …
…
…
…
…
…
…
…
…
…
…
-
596
Withholding tax unrelieved
…
…
…
…
…
…
…
…
…
389
261
Difference in overseas tax rates
…
…
…
…
…
…
…
…
(227)
199
Effect of equity accounting for associate
…
…
…
…
…
…
…
(10)
(14)
Total tax expense …
…
…
…
…
…
…
…
…
…
…
6,491
5,616
Where subsidiary companies have incurred losses in the year, which are unlikely to be relieved against future profits in
the next twelve months, deferred tax assets are not recognised.
Withholding tax unrelieved represents withholding tax deducted on dividends and royalties from overseas subsidiaries
and associates.
Recognised in other comprehensive income
2024
2023
£’000
£’000
Deferred tax charge on the cash flow hedge and cost of hedging reserve …
…
(99)
(919)
10.Earnings per share
Number of
ordinary shares
Ordinary shares in issue
2024
2023
Opening shares in issue…
…
…
…
…
…
…
…
…
…
7,689,600
7,689,600
Shares bought back in the year (note 26)
…
…
…
…
…
…
…
(180,000)
-
Total ordinary shares …
…
…
…
…
…
…
…
…
…
7,509,600
7,689,600
2024
2023
£’000
£’000
Relevant post-tax profits attributable to ordinary shareholders
…
…
…
16,902
15,904
Weighted average number of ordinary shares in issue …
…
…
…
…
7,527,797
7,509,600
2024
2023
pence
pence
Basic and diluted earnings per share…
…
…
…
…
…
…
…
224.53
206.81
11.Dividends
2024
2023
Paid ordinary dividends during the year in respect of prior years
£’000
£’000
8,636
115p (2023: 107.80p) per qualifying ordinary share
…
…
…
…
…
8,289
After the balance sheet date an ordinary dividend of 133 pence per qualifying ordinary share was proposed by the
Directors (2023: Ordinary dividend of 115 pence).
The proposed current year ordinary dividend of £9,988,000 has not been provided for within these financial
69
NOTES TO THE FINANCIAL STATEMENTS
12.Property, plant and equipment
Assets in
Other
course of
Land and
Plant and
equipment
construc-
buildings
machinery
tion
Total
Cost
£’000
£’000
£’000
£’000
£’000
Balance at 1st May, 2022
…
…
…
52,204
84,993
6,771
9,865
153,833
Additions …
…
…
…
…
…
633
3,692
364
16,492
21,181
Reclassification …
…
…
…
…
-
3,612
37
(3,649)
-
Transfer to / from ROU*
…
…
…
-
(336)
191
-
(145)
Disposals …
…
…
…
…
…
-
(1,935)
(719)
-
(2,654)
Exchange adjustment …
…
…
…
(461)
(228)
(68)
(71)
(828)
Balance at 30th April, 2023
…
…
52,376
89,798
6,576
22,637
171,387
Depreciation
Balance at 1st May, 2022
…
…
…
10,710
50,472
5,057
-
66,239
Charged in year …
…
…
…
…
1,437
4,335
500
-
6,272
Transfer to / from ROU*
…
…
…
-
14
94
-
108
Disposals …
…
…
…
…
…
(3)
(1,699)
(600)
-
(2,302)
Exchange adjustment …
…
…
…
(82)
(45)
(46)
-
(173)
Balance at 30th April, 2023
…
…
12,062
53,077
5,005
-
70,144
Net book value
As at 1st May, 2022
…
…
…
…
41,494
34,521
1,714
9,865
87,594
As at 30th April, 2023
…
…
…
40,314
36,721
1,571
22,637
101,243
Cost
Balance at 1st May, 2023
…
…
…
52,376
89,798
6,576
22,637
171,387
Additions …
…
…
…
…
…
3,476
2,884
489
9,572
16,421
Reclassification – others
…
…
…
4,881
7,511
-
(12,392)
-
Transfer to ROU*
…
…
…
…
-
(4,723)
-
-
(4,723)
Disposals …
…
…
…
…
…
(382)
(400)
(498)
(110)
1,390
Exchange adjustment …
…
…
…
(398)
(221)
(95)
(75)
(789)
Balance at 30th April, 2024
…
…
59,953
94,849
6,472
19,632
180,906
Depreciation
Balance at 1st May, 2023
…
…
…
12,062
53,077
5,005
-
70,144
Charged in year …
…
…
…
…
1,605
4,468
534
-
6,607
Transfer to ROU*
…
…
…
…
-
80
-
-
80
Disposals …
…
…
…
…
…
(258)
(304)
(465)
-
(1,027)
Exchange adjustment …
…
…
…
(122)
(44)
(69)
-
(235)
Balance at 30th April, 2024
…
…
13,287
57,277
5,005
-
75,569
Net book value
At 30th April, 2024
…
…
…
46,666
37,572
1,467
19,632
105,337
*
Assets are transferred from the right-of-use assets category on the settlement of a lease purchase agreement and
payment of the option to purchase fee.
Additions
During the year the Group expended £16.42 million on property, plant and equipment. The major items purchased
during the year were the continued investment in the plant for Duvelco, the India refractory building, finalisation of the
Goodwin Steel Casting projects and purchasing a property for Dupré’s dispersion production.
Other equipment
Other equipment comprises motor vehicles, IT hardware and office equipment.
Assets in course of construction
2024
2023
£’000
£’000
Land and buildings
…
…
…
…
…
…
…
…
…
…
2,757
4,280
Plant and machinery
…
…
…
…
…
…
…
…
…
…
16,875
18,357
19,632
22,637
70
NOTES TO THE FINANCIAL STATEMENTS
12.Property, plant and equipment (continued)
Depreciation
Depreciation is reported as follows:
2024
2023
£’000
£’000
Cost of sales
…
…
…
…
…
…
…
…
…
…
…
6,383
6,068
Administrative expenses
…
…
…
…
…
…
…
…
…
224
204
6,607
6,272
Security
The net book value of assets pledged as security for borrowings (note 21) is:
2024
2023
£’000
£’000
Land and buildings
…
…
…
…
…
…
…
…
…
…
7,271
7,460
Plant and machinery
…
…
…
…
…
…
…
…
…
…
4,537
10,069
11,808
17,529
13. Right-of-use assets
Land and
Plant and
Other
buildings
machinery
equipment
Total
Cost
£’‒
£’‒
£’‒
£’‒
Balance at 1st May, 2022
…
…
…
2,761
3,883
1,842
8,486
Additions
…
…
…
…
…
…
6
1,316
197
1,519
Transfer to property, plant and equipment
‒
336
(191)
145
Disposals
…
…
…
…
…
…
(79)
(107)
(24)
(210)
Exchange adjustment
…
…
…
…
(42)
24
5
(13)
Balance at 30th April, 2023
2,646
5,452
1,829
9,927
Depreciation
Balance at 1st May, 2022
…
…
…
1,134
570
591
2,295
Charged in year
…
…
…
…
…
480
289
429
1,198
Reclassification
…
…
…
…
…
‒
(14)
(94)
(108)
Disposals
…
…
…
…
…
…
(79)
(107)
(24)
(210)
Exchange adjustment
…
…
…
…
(24)
10
3
(11)
Balance at 30th April, 2023
1,511
748
905
3,164
Net book value
As at 1st May, 2022
…
…
…
…
1,627
3,313
1,251
6,191
As at 30th April, 2023
…
…
…
1,135
4,704
924
6,763
Cost
Balance at 1st May, 2023…
…
…
…
2,646
5,452
1,829
9,927
Additions
…
…
…
…
…
…
1,418
150
180
1,748
Transfer from property, plant and equipment
‒
4,723
‒
4,723
Disposals
…
…
…
…
…
…
(1,078)
‒
‒
(1,078)
Exchange adjustment
…
…
…
…
(52)
(13)
(5)
(70)
Balance at 30th April, 2024
2,934
10,312
2,004
15,250
Depreciation
Balance at 1st May, 2023
…
…
…
1,511
748
905
3,164
Charged in year
…
…
…
…
…
615
457
425
1,497
Transfer to property, plant and equipment
‒
(80)
‒
(80)
Disposals
…
…
…
…
…
…
(1,035)
‒
‒
(1,035)
Exchange adjustment
…
…
…
…
(32)
(6)
(2)
(40)
Balance at 30th April, 2024
1,059
1,119
1,328
3,506
Net book value
At 30th April, 2024
1,875
9,193
676
11,744
71
NOTES TO THE FINANCIAL STATEMENTS
13. Right-of-use assets (continued)
Depreciation
Depreciation is reported as follows:
2024
2023
£’000
£’000
Cost of sales……
…
…
…
…
…
…
…
…
…
882
646
Administrative expenses
…
…
…
…
…
…
…
…
…
615
552
1,497
1,198
The prior year numbers have been updated to reflect the change in expense classification, as explained in note 5.
14.
Investments in subsidiaries
The Group has the following principal subsidiaries. Non-principal subsidiaries are listed in note 33:
Company name
Registered
Country of
Class of
Subsidiaries:
address*
Incorporation
shares held
% held
Mechanical Engineering:
100
Goodwin Steel Castings Limited
…
…
…
1
England and Wales Ordinary
Goodwin International Limited …
…
…
…
1
England and Wales Ordinary
100
Easat Radar Systems Limited
…
…
…
…
1
England and Wales Ordinary
77
Easat Radar Systems Limited
…
…
…
…
1
England and Wales Preference
100
Goodwin Korea Company Limited
…
…
…
3
South Korea
Ordinary
95
Goodwin Pumps India Private Limited
…
…
4
India
Ordinary
100
Goodwin Shanghai Company Limited …
…
…
5
China
Ordinary
100
Noreva GmbH
…
…
…
…
…
…
6
Germany
Ordinary
100
Goodwin Indústria e Comércio de Bombas
100
Submersas Ltda
…
…
…
…
…
…
7
Brazil
Ordinary
Internet Central Limited
…
…
…
…
…
1
England and Wales Ordinary
100
Goodwin Submersible Pumps Australia Pty. Limited
8
Australia
Ordinary
100
Metal Proving Services Limited …
…
…
…
1
England and Wales Ordinary
100
Easat Finland Oy (previous name – NRPL Oy)
…
9
Finland
Ordinary
77
Goodwin Submersible Pumps Africa Pty. Limited
…
14
South Africa
Ordinary
100
Duvelco Limited
…
…
…
…
…
…
1
England and Wales Ordinary
100
Refractory Engineering:
100
Goodwin Refractory Services Limited …
…
…
1
England and Wales Ordinary
Dupré Minerals Limited
…
…
…
…
…
1
England and Wales Ordinary
100
Hoben International Limited
…
…
…
…
2
England and Wales Ordinary
100
Goodwin Refractory Services India Private Limited**
4
India
Ordinary
100
Siam Casting Powders Limited …
…
…
…
10
Thailand
Ordinary
61.5
Ultratec Jewelry Supplies Limited
…
…
…
11
China
Ordinary
75.5
SRS (Qingdao) Casting Materials Company Limited
12
China
Ordinary
75.5
Jewelry Plaster Limited
…
…
…
…
…
13
Thailand
Ordinary
61.5
*The registered address for each company can be found in note 35.
**During the year, Gold Star Powders India Private Limited was merged with Goodwin Refractory Services India Private
Limited.
All of the above companies are included as part of the consolidated accounts. All the companies are involved in mechanical or
refractory engineering, with the exception of Internet Central Limited, which is an internet service provider.
Non-controlling interests (NCI)
The following subsidiaries each have non-controlling interests:
Company name
Registered
Country of
Class of
Subsidiaries:
address*
Incorporation
shares held
% held
Mechanical Engineering:
23
Easat Radar Systems Limited
…
…
…
…
1
England and Wales Ordinary
Goodwin Korea Company Limited
…
…
…
3
South Korea
Ordinary
5
Easat Finland Oy (previous name – NRPL Oy)
…
9
Finland
Ordinary
23
Refractory Engineering:
38.5
Goodwin Refractory Services (Thailand) Limited
…
10
Thailand
Ordinary
Jewelry Plaster Limited
…
…
…
…
…
13
Thailand
Ordinary
38.5
Jewelry Wax Limited
…
…
…
…
…
13
Thailand
Ordinary
38.5
Siam Casting Powders Limited …
…
…
…
10
Thailand
Ordinary
38.5
GRS Silicone Company Limited …
…
…
…
16
China
Ordinary
24.5
SRS (Qingdao) Casting Materials Company Limited
12
China
Ordinary
24.5
Shenzhen King-Top Modern Hi-Tech Company Limited 15
China
Ordinary
24.5
Ultratec Jewelry Supplies Limited
…
…
…
11
China
Ordinary
24.5
Ying Tai (UK) Limited
…
…
…
…
…
1
England and Wales Ordinary
24.5
72
NOTES TO THE FINANCIAL STATEMENTS
14.
Investments in subsidiaries (continued) Non-
controlling interests (NCI) (continued)
The Board considers a material company to be one that has either 10% of the EBITDA (earnings before interest, tax,
depreciation and amortisation) or 10% of the net assets of the Group. As such, the Board does not consider any of its
subsidiary companies, which have non-controlling interests, to be material. The financial information on all subsidiaries with
non-controlling interests has been aggregated, analysing the data by segment, as the entities in each segment have similar
characteristics and risk profiles, to provide additional information on these companies.
Non-controlling interests (NCI) – movements in reserves by segment
Year ended 30th April, 2024
Year ended 30th April, 2023
Mechanical
Refractory
Mechanical
Refractory
Engineering
Engineering
Total
Engineering
Engineering
Total
£’000
£’000
£’000
£’000
£’000
£’000
Profit / (loss) allocated to
(226)
1,040
814
non-controlling interests
(264)
873
609
Dividends paid to non-
-
(473)
(473)
controlling interests
…
-
(556)
(556)
Accumulated reserves
held by non-controlling
(1,168)
5,537
4,369
interests …
…
…
(927)
5,337
4,410
The summarised financial information below represents the amounts in the financial statements of the subsidiaries,
before any intercompany eliminations, and does not reflect the Group’s share of those amounts.
Non-current assets
…
5,000
11,083
16,083
2,125
11,148
13,273
Current assets …
…
8,026
16,790
24,816
9,026
16,882
25,908
Current liabilities
…
(4,531)
(5,889)
(10,420)
(13,019)
(6,587)
(19,606)
Non-current liabilities
(8,416)
(183)
(8,599)
(1,104)
(110)
(1,214)
Total net assets of
companies with
79
21,801
21,880
non-controlling interests
(2,972)
21,333
18,361
Revenue of companies with
10,160
25,129
35,289
non-controlling interests
19,692
24,814
44,506
Profit / (loss) for the
year of companies with
(1,062)
3,327
2,265
non-controlling interests
(1,191)
3,481
2,290
Total comprehensive
income of companies with
(1,175)
4,429
3,254
non-controlling interests
(1,240)
3,922
2,682
Net cash flow from
(3,684)
4,337
653
operating activities
…
(212)
2,357
2,145
Net cash flow from
(319)
(846)
(1,165)
investing activities
…
(8)
(255)
(263)
Net cash flow from
4,014
(2,052)
1,962
financing activities
…
(23)
(3,059)
(3,082)
15.
Investment in associate
The Group’s share of profit after tax in its immaterial associate for the year ended 30th April, 2024 was £69,000
(2023: £65,000).
Summary financial information of the Group’s share of its associate company is as follows:
2024
2023
£’000
£’000
Balance at 1st May
…
…
…
…
…
…
…
…
…
…
964
896
Profit before tax
…
…
…
…
…
…
…
…
…
…
…
79
79
Tax …
…
…
…
…
…
…
…
…
…
…
…
…
(10)
(14)
Dividends
…
…
…
…
…
…
…
…
…
…
…
…
(131)
-
Exchange adjustment
…
…
…
…
…
…
…
…
…
…
(74)
3
Balance at 30th April…
…
…
…
…
…
…
…
…
…
828
964
Assets
…
…
…
…
…
…
…
…
…
…
…
…
844
974
Liabilities
…
…
…
…
…
…
…
…
…
…
…
…
(16)
(10)
828
964
73
NOTES TO THE FINANCIAL STATEMENTS
16.Intangible assets
Brand
names
and
Manufact- Software Develop-
intellectual
uring
and
ment
Goodwill
property
rights
Licences
costs
Total
£’000
£’000
£’000
£’000
£’000
£’000
Cost
Balance at 1st May, 2022
10,010
9,662
4,899
1,500
11,326
37,397
Additions …
…
…
-
525
56
47
1,196
1,824
Disposals …
…
…
-
-
-
(121)
-
(121)
Exchange adjustment …
61
3
-
18
-
82
Balance at 30th April, 2023
10,071
10,190
4,955
1,444
12,522
39,182
Amortisation and impairment
Balance at 1st May, 2022
339
6,834
2,294
1,195
1,918
12,580
Amortisation for the year
-
280
316
139
522
1,257
Disposals …
…
…
-
-
-
(120)
-
(120)
Exchange adjustment …
-
-
-
17
-
17
Balance at 30th April, 2023
339
7,114
2,610
1,231
2,440
13,734
Net book value
As at 1st May, 2022
…
9,671
2,828
2,605
305
9,408
24,817
As at 30th April, 2023
…
9,732
3,076
2,345
213
10,082
25,448
Cost
Balance at 1st May, 2023
10,071
10,190
4,955
1,444
12,522
39,182
Additions …
…
…
-
28
-
553
1,456
2,037
Disposals …
…
…
-
-
(17)
(48)
-
(65)
Exchange adjustment
…
(183)
(61)
(19)
(20)
3
(280)
Balance at 30th April, 2024
9,888
10,157
4,919
1,929
13,981
40,874
Amortisation and impairment
Balance at 1st May, 2023
339
7,114
2,610
1,231
2,440
13,734
Amortisation for the year
-
304
306
139
592
1,341
Disposals …
…
…
-
-
(17)
(48)
-
(65)
Exchange adjustment
-
(18)
(2)
(16)
-
(36)
Balance at 30th April, 2024
339
7,400
2,897
1,306
3,032
14,974
Net book value
At 30th April, 2024
…
9,549
2,757
2,022
623
10,949
25,900
Customer lists are included within brand names and intellectual property or within manufacturing rights, depending on
the nature of the acquisition; non-compete agreements are disclosed within manufacturing rights. During the year, the
Group added to its portfolio of intangible assets.
Amortisation and impairment charges are reported in cost of sales in the statement of profit or loss.
Impairment testing for cash-generating units containing intangible assets
The Group tests intangible assets annually for impairment or more frequently if there are indications that an intangible
asset might be impaired. For the purpose of impairment testing, an intangible asset is allocated to the relevant
subsidiary (cash generating unit (“CGU”)), which is the lowest level within the Group at which the intangible asset is
74
NOTES TO THE FINANCIAL STATEMENTS
16.
Intangible assets (continued)
Impairment testing for cash-generating units containing intangible assets (continued)
2024
Other
2023
Other
intangible
intangible
Property
assets
Property
assets
plant and
(excluding
plant and
(excluding
equipment
Goodwill
software)
Total
equipment
Goodwill
software)
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Mechanical Engineering
Duvelco
15,902
-
2,578
18,480
12,156
-
1,837
13,993
Noreva
4,642
4,490
-
9,132
4,172
4,623
-
8,795
Easat Group
341
1,193
3,125
4,659
395
1,228
3,050
4,673
Other
-
-
2,952
2,952
-
-
3,102
3,102
Refractory Engineering
Goodwin Refractory
3,429
3,346
-
6,775
Services Holdings Ltd
3,993
3,346
23
7,362
Perlite and
710
-
1,568
2,278
vermiculite
828
-
1,801
2,629
Castaldo
154
-
2,144
2,298
217
-
1,739
1,956
Other
-
520
3,361
3,881
-
535
3,951
4,486
Total
25,178
9,549
15,728
50,455
21,761
9,732
15,503
46,996
An impairment test is a comparison of the carrying value of the assets of a CGU to their recoverable amount, based on
a value-in-use calculation. The recoverable amount is the greater of value-in-use and fair value less costs of disposal.
Where the recoverable amount is less than the carrying value, an impairment results. During the year, each CGU
containing an intangible asset was separately assessed and tested for impairment.
As part of testing intangible assets for impairment, detailed forecasts of operating cash flows for the next five years are
used, which are based on budgets and plans approved by the Board. The forecasts represent the best estimate of
future performance of the CGU based on past performance and expectations for the market development of the CGU.
A number of key assumptions are used as part of impairment testing. These key assumptions, such as the CGU’s
position within its relevant market; its ability to generate profitable orders within that market; expected growth rates both
in the market and geographically, are made by management who also take into account past experience and
knowledge of forecast future performance together with other relevant external sources of information.
The projections use various growth rates, such as increases in revenue and / or increases in gross margin, whichever
is relevant to that CGU, consistent with the profit forecasts of the CGU for the next five years. The growth rates are
identified by experienced managers within that CGU, who have significant experience and knowledge of that CGU and
its market place. In the current and previous financial year, a zero growth rate has been assumed for any terminal
values, in line with the conservative approach of the Group. The forecasts are then discounted at an appropriate pre-
tax weighted average cost of capital rate considering the perceived levels of risk for that CGU. Further sensitivity tests
are then performed reducing the discounted cash flows by 10%, which the Group sees as being an appropriate
reduction due to the prudent forecasts that it has already used within the testing, and also increasing the discount rate
by a range of up to 10% to confirm there is no need to consider further a need for impairment.
The table below shows the range of rates used in the impairment testing.
Mechanical Engineering
Growth rates
…
…
…
…
…
…
…
…
…
…
Pre-tax weighted average cost of capital
…
…
…
…
…
…
Refractory Engineering
Growth rates
…
…
…
…
…
…
…
…
…
…
Pre-tax weighted average cost of capital
…
…
…
…
…
…
2024
2023
£’000
£’000
%
%
…
0-10
0-8
…
10-11
11-13
…
0-7
0-6
…
10-11
12
Strategic investments in new and high growth CGUs are excluded from the growth rates above as the percentage
growth from nil is not meaningful. This predominantly relates to Duvelco, in which the Group has invested £18.5 million,
for new products where the Group is forecasting the revenues to increase significantly. The growth being forecasted for
this CGU is significantly higher than for the other more established CGUs, whereby including them in the table would
distort the growth forecast reported for the established CGUs. This growth expectation is described as a key judgement
in note 2. We have reviewed the forecasted revenues of these sensitive CGUs and then stressed the revenues by
75
NOTES TO THE FINANCIAL STATEMENTS
16.
Intangible assets (continued)
Impairment testing for cash-generating units containing intangible assets (continued)
50% of the expected forecasted revenues and can confirm that at these dramatically reduced revenue levels none of
the three intangible assets would need to be impaired.
The estimates and assumptions made in connection with the impairment testing could differ from future actual results of
operations and cash flows. A reasonably likely variation in the assumptions, as disclosed, would not give rise to an
impairment. However, future events could cause the Group to conclude that impairment indicators exist and that the
asset values associated with a given operation have become impaired.
Duvelco
The Company has invested circa £18.5 million in the area of high-performance polyimide resins. The Company will
commence a period of testing and commissioning of the plant in Q2 and Q3 of the financial year 2024 before any
commercial activity takes place. The judgement of the Board is that the market potential here is significant and that
future profitability is expected to be strong. Accordingly, the Directors’ do not see a need to impair our investment in this
area.
17.
Derivative financial assets
2024
2023
Note
£’000
£’000
Due within one year
Interest rate swap…
…
…
…
…
…
…
…
…
…
1,228
1,127
Derivative assets designated as cash flow hedging instruments*
…
…
743
1,489
Derivative assets not designated as cash flow hedging instruments*
…
36
68
2,007
2,684
Due after more than one year
Interest rate swap…
…
…
…
…
…
…
…
…
…
28 (d)
4,814
4,802
Derivative assets designated as cash flow hedging instruments
…
…
28 (d)
902
1,130
5,716
5,932
Total
Interest rate swap…
…
…
…
…
…
…
…
…
…
6,042
5,929
Derivative assets designated as cash flow hedging instruments
…
…
1,645
2,619
Derivative assets not designated in a cash flow relationship …
…
…
36
68
7,723
8,616
2024
2023
Maturity date – interest rate swap
…
…
…
…
…
…
…
August 2031
August 2031
May 2024 to
May 2023 to
Maturity date – derivative assets
…
…
…
…
…
…
…
April 2027
April 2027
*
The prior year comparatives for the analysis between hedged and non-hedged derivatives have been updated, as
outlined below.
Year ended 30th April, 2023
Original
Reclassification
Closing
presentation
presentation
£’000
£’000
£’000
Due within one year
Derivative assets designated as
cash flow hedging instruments
…
…
…
…
1,429
60
1,489
Derivative assets not designated as
cash flow hedging instruments
…
…
…
…
128
(60)
68
1,557
‒
1,557
76
NOTES TO THE FINANCIAL STATEMENTS
18.Inventories
2024
2023
Net balances
£’000
£’000
Raw materials and consumables
…
…
…
…
…
…
…
…
21,840
23,101
Work in progress …
…
…
…
…
…
…
…
…
…
…
14,240
13,001
Finished goods
…
…
…
…
…
…
…
…
…
…
…
10,729
11,853
46,809
47,955
Provisions held
(533)
Raw materials and consumables
…
…
…
…
…
…
…
…
(814)
Work in progress …
…
…
…
…
…
…
…
…
…
…
(1,320)
(1,283)
Finished goods
…
…
…
…
…
…
…
…
…
…
…
(555)
(495)
(2,408)
(2,592)
Inventory impaired during the year …
…
…
…
…
…
…
…
(881)
(1,099)
Release of inventory impairment
…
…
…
…
…
…
…
…
-
885
19.Trade and other receivables
Balances due within one year
2024
2023
£’000
£’000
Trade receivables …
…
…
…
…
…
…
…
…
…
…
26,364
28,094
Other financial assets
…
…
…
…
…
…
…
…
…
…
1,443
1,663
Advance payments to suppliers
…
…
…
…
…
…
…
…
423
857
Prepayments and other non-financial assets
…
…
…
…
…
…
3,473
3,918
Deferred tax asset (see note 25)
…
…
…
…
…
…
…
…
191
57
31,894
34,589
Financial assets
…
…
…
…
…
…
…
…
…
…
…
27,807
29,757
Non-financial assets
…
…
…
…
…
…
…
…
…
…
4,087
4,832
31,894
34,589
20.Cash and cash equivalents
2024
2023
£’000
£’000
Cash in hand
…
…
…
…
…
…
…
…
…
…
…
72
99
Bank balances
…
…
…
…
…
…
…
…
…
…
…
30,606
19,562
30,678
19,661
Bank overdraftss …
…
…
…
…
…
…
…
…
…
…
(48)
(119)
Net cash and cash equivalents
…
…
…
…
…
…
…
…
30,630
19,542
21.
Borrowings
Information is provided below about the contractual terms of the Group’s lease liabilities, bank loans and borrowings.
The bank loans repayable by instalment are secured against a property in Germany together with furnaces and land in
the UK (see note 12). For more information about the Group’s exposure to interest rate and foreign currency risk, see
note 28.
Year ended 30th April, 2024
Year ended 30th April, 2023
Non-current
Current
Total
Non-current
Current
Total
liabilities
liabilities
liabilities
liabilities
liabilities
liabilities
£’000
£’000
£’000
£’000
£’000
£’000
Bank overdrafts…
…
-
48
48
-
119
119
Bank loans - repayable
5,966
1,106
7,072
by instalments …
…
6,985
1,154
8,139
Bank loans - revolving
49,000
10,000
59,000
36,000
3,500
39,500
Lease liabilities…
…
6,940
2,873
9,813
4,271
1,956
6,227
61,906
14,027
75,933
47,256
6,729
53,985
The current revolving loan facility has been re-financed after the year end.
77
NOTES TO THE FINANCIAL STATEMENTS
21.
Borrowings (continued)
Reconciliation of liabilities arising from financing activities
Bank
overdrafts
Bank loans -
used for cash
repayable by
Bank loans -
Lease
management
instalments
revolving
Other loans
liabilities
Total
£’000
£’000
£’000
£’000
£’000
£’000
Opening balance at
1st May, 2022
…
…
-
9,064
28,000
202
5,874
43,140
Non-cash movements
-
-
-
-
2,242
2,242
Change in bank overdrafts
119
-
-
-
-
119
Cash flows - proceeds
from new flows
…
-
-
11,500
-
-
11,500
Cash flows - repayment
of borrowings
…
…
-
(979)
-
(202)
(1,874)
(3,055)
Foreign exchange
movement
…
…
-
54
-
-
(15)
39
Closing balance
‒
30th April, 2023
119
8,139
39,500
6,227
53,985
Opening balance at
-
1st May, 2023
…
…
119
8,139
39,500
6,227
53,985
Conversion of loan to lease
-
-
(3,500)
-
3,500
-
Non-cash movements
-
-
-
-
3,040
3,040
Change in bank overdrafts
(71)
-
-
-
-
(71)
Cash flows - proceeds
from new loans
…
-
98
23,000
-
-
23,098
Cash flows - repayment
of borrowings
…
…
-
(1,152)
-
-
(2,910)
(4,062)
Foreign exchange
movement
…
…
-
(13)
-
-
(44)
(57)
Closing balance
-
30th April, 2024
48
7,072
59,000
9,813
75,933
During the current year and previous year, additional leases have been taken out to fund ongoing projects.
Contractual undiscounted cash flows
Year ended 30th April, 2024
Year ended 30th April, 2023
Minimum
Minimum
loan
loan
payments
Interest
Principal
payments
Interest
Principal
£’000
£’000
£’000
£’000
£’000
£’000
Bank loans - repayable
by instalments
Less than one year
…
1,471
365
1,106
1,514
360
1,154
Between two and
2,427
592
1,835
three years
…
…
2,739
599
2,140
Between four and
1,072
484
588
five years
…
…
1,449
463
986
More than five years …
4,968
1,425
3,543
5,347
1,488
3,859
9,938
2,866
7,072
11,049
2,910
8,139
Lease liabilities
Less than one year
…
3,430
557
2,873
2,231
275
1,956
Between two and
5,296
572
4,724
three years
…
…
3,160
289
2,871
Between four and
1,777
111
1,666
five years
…
…
1,182
44
1,138
More than five years …
598
48
550
268
6
262
11,101
1,288
9,813
6,841
614
6,227
78
NOTES TO THE FINANCIAL STATEMENTS
22.Trade and other payables
2024
2023
£’000
£’000
Trade payables …
…
…
…
…
…
…
…
…
…
…
…
20,432
22,400
Other financial liabilities…
…
…
…
…
…
…
…
…
…
…
2,144
988
Other taxation and social security
…
…
…
…
…
…
…
…
…
3,092
1,776
Accrued expenses…
…
…
…
…
…
…
…
…
…
…
…
4,904
6,062
Advance payments from customers …
…
…
…
…
…
…
…
…
258
539
30,830
31,765
Financial liabilities…
…
…
…
…
…
…
…
…
…
…
…
30,572
31,226
Non-financial liabilities …
…
…
…
…
…
…
…
…
…
…
258
539
30,830
31,765
The prior year figure for financial liabilities has been updated to include accrued expenses.
23.Derivative financial liabilities
2024
2023
Note
£’000
£’000
Due within one year
Derivative liabilities designated as cash flow hedging instruments*
…
…
28 (d)
247
2,352
Derivative liabilities not designated as cash flow hedging instruments*
…
…
28 (d)
4
31
251
2,383
Due after more than one year
Derivative liabilities designated as cash flow hedging instruments …
…
…
28 (d)
277
-
277
-
Total
Derivative liabilities designated as cash flow hedging instruments …
…
…
524
2,352
Derivative liabilities not designated as cash flow hedging instruments
…
…
4
31
528
2,383
2024
2023
May 2024 -
May 2023
Maturity date
………………………
…
…
April 2029
April 2024
*
The prior year comparatives for the analysis between the hedged and non-hedged derivatives have been updated,
as outlined below.
Year ended 30th April, 2023
Original
Closing
presentation
Reclassification
presentation
£’000
£’000
£’000
Due within one year
Derivative liabilities designated as
cash flow hedging instruments * …
…
…
…
1,773
579
2,352
Derivative liabilities not designated as
cash flow hedging instruments * …
…
…
…
610
(579)
31
2,383
-
2,383
79
NOTES TO THE FINANCIAL STATEMENTS
24.Provisions
2024
2023
£’000
£’000
Balance at 1st May
…
…
…
…
…
…
…
…
…
…
…
512
456
Increase in provision
…
…
…
…
…
…
…
…
…
…
…
172
249
Release of provision
…
…
…
…
…
…
…
…
…
…
…
(164)
(216)
Exchange adjustment
…
…
…
…
…
…
…
…
…
…
…
(15)
23
Balance at 30th April…
…
…
…
…
…
…
…
…
…
…
505
512
Warranty due within one year …
…
…
…
…
…
…
…
…
…
231
266
Warranty due after one year
…
…
…
…
…
…
…
…
…
…
274
246
Balance at 30th April…
…
…
…
…
…
…
…
…
…
…
505
512
Provisions include warranties for products sold which generally cover a period of between 1 and 3 years.
25.
Deferred tax assets and liabilities
Deferred tax balances are attributable to the following:
Year ended 30th April, 2024
Year ended 30th April, 2023
Assets
Liabilities
Net
Assets
Liabilities
Net
£’000
£’000
£’000
£’000
£’000
£’000
Property, plant
67
(12,738)
(12,671)
and equipment …
…
67
(10,159)
(10,092)
Intangible assets
…
-
(2,043)
(2,043)
-
(2,021)
(2,021)
Derivative financial
34
(329)
(295)
instruments
…
…
65
(144)
(79)
Tax losses
…
…
23
-
23
350
-
350
Other temporary
688
(310)
378
differences
…
…
684
(148)
536
812
(15,420)
(14,608)
1,166
(12,472)
(11,306)
Deferred tax balances are reported in the balance sheet as follows:
2024
2023
£’000
£’000
Deferred tax asset (see note 19)
…
…
…
…
…
…
…
…
191
57
Deferred tax liability
……
…
…
…
…
…
…
…
…
(14,799)
(11,363)
(14,608)
(11,306)
80
NOTES TO THE FINANCIAL STATEMENTS
25.
Deferred tax assets and liabilities (continued)
Property,
Derivative
Other
plant and
Intangible
financial
Tax
temporary
equipment
assets
instruments
losses
differences
Total
£’000
£’000
£’000
£’000
£’000
£’000
Balance at
1st May, 2022
(8,281)
(2,186)
12
2,496
308
(7,651)
Recognised in
profit and loss
(1,832)
165
828
(2,146)
283
(2,747)
Recognised in
other comprehensive
income
-
-
(919)
-
-
(919)
Exchange
adjustment
21
-
-
-
10
11
Balance at
30th April, 2023
(10,092)
(2,021)
(79)
350
536
(11,306)
Balance at
1st May, 2023
(10,092)
(2,021)
(79)
350
536
(11,306)
Recognised in
profit and loss
(2,584)
(22)
(117)
(327)
(164)
(3,214)
Recognised in
other comprehensive
income
-
-
(99)
-
-
(99)
Exchange
adjustment
5
-
-
-
6
11
Balance at
30th April, 2024
(12,671)
(2,043)
(295)
23
378
(14,608)
Deferred tax assets not recognised on losses
2024
2023
£’000
£’000
Gross tax losses …
…
…
…
…
…
…
…
…
…
…
3,062
2,348
Deferred tax assets not recognised …
…
…
…
…
…
…
…
681
521
The Group has not recognised a deferred tax asset against taxable losses incurred by some of its subsidiaries.
Typically, these are subsidiaries, which are still in their formative years and, whilst profitability and the associated
recoverability of tax losses is expected in the long-term, it is deemed prudent to not recognise a deferred tax asset at
this stage, as a result of the uncertainty.
26.Capital and reserves
Share capital
2024
2023
Authorised, allotted, called up and fully paid:
£’000
£’000
7,689,600 (2023: 7,689,600) ordinary shares of 10p each
…
…
…
…
769
769
Buy back of 180,000 ordinary shares of 10p each… …
…
…
…
…
(18)
-
751
769
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one
vote per share at meetings of the Company.
The Company announced on 5th May, 2023 that it was proceeding with a Tender offer to tender up to 180,000 of its
ordinary shares at the tender price of £48 per ordinary share. The tender offer was subsequently approved at a
General Meeting that was held on 30th May, 2023 and the following day the offer ended. The offer was oversubscribed
by 229% and, of the total number of Ordinary Shares validly tendered, all 180,000 Ordinary Shares have been
purchased by the Company, and on 7th June, 2023 were cancelled off the register. The total cost of Ordinary Shares
purchased was £8.87 million.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial
81
NOTES TO THE FINANCIAL STATEMENTS
26.
Capital and reserves (continued)
Share-based payments reserve
The share-based payments reserve is a non-cash-impacting provision, as required by IFRS 2, relating to the Equity
Long Term Incentive Plan (LTIP), which vested at 1st May, 2019. As all share options have now been exercised and
the Company has no follow-on LTIP incentive plans in place or proposed, the balance on the reserve has been
transferred to retained earnings in the current year.
Cash flow hedge reserve and cost of hedging reserve
2024
2023
Note
£’000
£’000
Derivative assets designated as cash flow hedging instruments
…
…
17
1,645
2,619
Derivative liabilities designated as cash flow hedging instruments …
…
23
(524)
(2,352)
Net value of derivatives designated in cash flow hedging instruments
…
1,121
267
Ineffectiveness ……
…
…
…
…
…
…
…
…
58
519
Gross balances in the hedging reserves for continuing hedges
…
…
1,179
786
Matured derivative contracts
…
…
…
…
…
…
…
…
(676)
(72)
Deferred tax balance recognised in other comprehensive income
…
…
(295)
(196)
208
518
Cash flow hedge reserve
Attributable to equity holders of the parent
Attributable to non-controlling interests …
Cost of hedging reserve
Attributable to equity holders of the parent
Attributable to non-controlling interests …
Total
…
…
…
…
…
633
1,504
…
…
…
…
…
1
(12)
634
1,492
…
…
…
…
…
(426)
(976)
…
…
…
…
…
-
2
(426)
(974)
208
518
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedge
instruments related to hedged transactions that have not yet occurred. The cost of hedging reserve relates to the
associated costs attaching to the cash flow hedge reserve, such as counterparty risk and forward point adjustments.
The matured derivative contracts carried forward as part of the hedge reserve are those where the hedge was still
effective at maturity but the underlying transactions had not occurred.
Hedge effectiveness is tested using the hypothetical derivative method, whereby changes in the fair value of the
hedging instrument are compared with changes in the fair value of the hedged forecast sales and purchases.
Hedge ineffectiveness arises due to:
•
differences in the timing of the cash flows of the forecast sales and purchases occurring and the hedging
instruments maturing;
•
changes in the forecast values for the cash flows of hedged items and hedging instruments; and
•
the effect of the counterparties' credit risk on the fair value of the foreign currency forward contracts.
The change in value used to calculate hedge ineffectiveness is shown below:
2024
2023
£’000
£’000
Highly probable forecast sales…
…
…
…
…
…
…
(1,195)
(7)
Highly probable forecast purchases …
…
…
…
…
…
…
16
(245)
Derivative forward exchange contracts
…
…
…
…
…
…
1,121
(267)
(58)
(519)
27.
Capital management
The Group’s main objective when managing capital is to safeguard the Group’s ability to continue as a going concern
in order to provide returns to shareholders. The Board maintains a strong capital base so as to maintain investor,
creditor and market confidence and to sustain future development of the business. Operations are funded through
various shareholders’ funds, bank debt, leases and, where appropriate, deferred consideration on acquisitions. The
capital structure of the Group reflects the judgement of the Board as to the appropriate balance of funding required. At
82
NOTES TO THE FINANCIAL STATEMENTS
27.
Capital management (continued)
2024
2023
£’000
£’000
Cash and cash equivalents
…
…
…
…
…
…
…
…
…
(30,678)
(19,661)
Total lease liabilities
…
…
…
…
…
…
…
…
…
…
9,813
6,227
Bank overdrafts …
…
…
…
…
…
…
…
…
…
…
48
119
Bank loans - repayable by instalments
…
…
…
…
…
…
…
7,072
8,139
Bank loans - rolling credit facilities…
…
…
…
…
…
…
…
59,000
39,500
Net debt in accordance with IFRS 16
…
…
…
…
…
…
…
45,255
34,324
Operating lease debt (former IAS 17 definition)…
…
…
…
…
…
(2,324)
(1,502)
Relevant net debt for KPI purposes…
…
…
…
…
…
…
…
42,931
32,822
Total equity attributable to equity holders of the parent
…
…
…
…
122,281
124,747
Capital
165,212
157,569
The Group aims to maintain a strong credit rating and headroom whilst optimising return to shareholders through an
appropriate balance of debt and equity funding. At 30th April, 2024 net debt was £42.9 million (2023: £32.8 million).
The gearing ratio is 35.1% (2023: 26.3%).
The Group manages its capital structure and makes adjustments to it with regard to the risks inherent in the business
and in light of changes to economic conditions.
Working capital is managed in order to generate maximum conversion of profits into cash and cash equivalents.
Dividends are based on current year profits, thereby maintaining equity.
The policy for debt is to ensure a smooth debt maturity profile with the objective of ensuring continuity of funding. The
repayment profile for the debt is shown in note 28 (b).
There were no changes in the Group’s approach to capital management during the year, although next year it is
planned to reduce the net debt to reduce bank interest costs.
28.
Financial risk management
The Group’s operations expose it to a variety of financial risks that include the effects of changes in market prices
(interest rates, foreign exchange rates and commodity prices), credit risk and liquidity. The Group has in place risk
management policies that seek to limit the adverse effects on the financial performance of the Group by using various
instruments and techniques.
Risk management policies have been set by the Board and applied by the Group.
a)
Credit risk
The Group’s financial assets are cash and cash equivalents; trade and other receivables; contract assets;
derivative financial assets; the carrying amounts of which represent the Group’s maximum exposure to credit risk
in relation to financial assets.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by
international credit rating agencies.
The Group’s credit risk is primarily attributable to its trade receivables and is managed through the following
processes:
i)
The majority of orders accepted by Group companies are backed by credit insurance;
ii)
Some orders are accepted with no credit insurance but with letters of credit;
iii)
Some orders are accepted with no credit insurance and no letter of credit but with an internal analysis of the
customer’s size, creditworthiness, historic profitability and payment record;
iv)
A few orders (less than 10%), with a material value, are taken at risk following review by at least two Board
members;
v)
Major orders are normally accompanied by stage payments which go towards mitigating our credit risk.
Whilst the theoretical credit risk would be the actual balances themselves as reported within the table below, this
assumes that the credit insurance company is also a credit risk for the invoiced trade debtors and contract assets
underwritten by them. Our insurer enjoys a strong credit rating with the likes of Moody’s, S&P and Fitch. As a
result, and after having looked back on the Group’s track record of negligible impairment losses on these type of
assets over the last ten years, the Directors are of the opinion that there is no cost / benefit in performing an ECL
83
NOTES TO THE FINANCIAL STATEMENTS
28.
Financial risk management (continued)
(b)
Credit risk (continued)
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk at the reporting date was:
Carrying amount
Note
2024
2023
£’000
£’000
Contract assets………
…
…
…
…
…
4
22,027
16,257
Trade and other financial assets – due within one year
…
…
19
27,807
29,757
Cash at bank and cash equivalents
…
…
…
…
…
20
30,678
19,661
Derivative financial assets – due after more than one year
…
17
5,716
5,932
Derivative financial assets – due within one year …
…
…
17
2,007
2,684
Hypothetical Credit Risk Exposure – assuming no credit insurance
At the reporting date, the maximum exposure to credit risk for trade receivables, before taking into account credit
insurance, by geographic region was:
Carrying amount
2024
2023
£’000
£’000
UK …
…
…
…
…
…
…
…
…
…
…
…
6,193
7,663
Rest of Europe
…
…
…
…
…
…
…
…
…
…
2,914
4,799
USA …
…
…
…
…
…
…
…
…
…
…
…
3,441
3,267
Pacific Basin
…
…
…
…
…
…
…
…
…
…
6,836
6,315
Rest of World
…
…
…
…
…
…
…
…
…
…
6,980
6,050
26,364
28,094
The ageing of trade receivables and impairments at the reporting date was:
2024
Impairment
2023
Impairment
Net
Gross
provision
Net
Gross
provision
£’000
£’000
£’000
£’000
£’000
£’000
Not past due …
…
…
18,781
18,781
-
18,666
18,666
-
Past due 1-30 days …
…
3,846
3,846
-
4,940
4,942
(2)
Past due 31-90 days…
…
2,361
2,379
(18)
2,409
2,440
(31)
Past due more than 90 days
1,376
1,636
(260)
2,079
2,288
(209)
26,364
26,642
(278)
28,094
28,336
(242)
Management believes that there are no significant credit risks remaining with the above net receivables and that
the credit quality of customers is good, based on a review of past payment history and the current financial status
of the customers. Included in trade receivables are retentions which are job specific and have varying due dates
depending on the complexity of the job. These are included in the not past due category. The Group has not
renegotiated the terms of any trade receivables and has not pledged any trade receivables as security.
The Directors estimate that the fair value of the Group’s trade and other receivables is approximate to their
carrying values.
An analysis of the provision for impairment of receivables is as follows:
2024
2023
£’000
£’000
Opening balance at 1st May
…
…
…
…
…
…
…
…
242
700
Increase in provision
…
…
…
…
…
…
…
…
…
79
74
Release of provision
…
…
…
…
…
…
…
…
…
(34)
(362)
Provision utilised during the year
…
…
…
…
…
…
…
-
(164)
Exchange adjustment
…
…
…
…
…
…
…
…
…
(9)
(6)
Closing balance at 30th April …
…
…
…
…
…
…
…
278
242
b)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable
losses or risking damage to the Group’s reputation.
At the year end the Group had the following unutilised bank facilities in respect of which all conditions precedent
84
NOTES TO THE FINANCIAL STATEMENTS
28.
Financial risk management (continued)
(b)
Liquidity risk (continued)
2024
2023
£’000
£’000
Uncommitted
…
…
… …
…
…
…
…
…
…
6,002
6,050
Committed …
…
…
… …
…
…
…
…
…
…
10,500
33,500
Total unutilised bank facilities
16,502
39,550
The Group’s principal borrowing facilities are provided by three banks in the form of borrowings and short-term
overdraft facilities. The quantum of borrowing facilities available to the Group is reviewed regularly in light of
current working capital requirements and the need for capital investment for the long-term future for the Group.
After the year-end, the Group has renewed a £10 million revolving credit facility that was due to expire in
September 2024 on a four year term, as a prudent policy to ensure that guaranteed facilities and the appropriate
level of headroom is available to the Group.
Maturity analysis
The table below analyses the Group’s financial liabilities into maturity groupings based on the period outstanding
at the balance sheet date up to the contractual maturity date. All figures are contracted
gross cash flows that have not been discounted. The comparative figures for trade and other financial
liabilities have been amended. See note 22 for details.
Total
contractual
Within
cash
Carrying
1 year
2-3 years
4-5 years
5+ years
flows
amount
Contractual maturities of
£’000
£’000
£’000
£’000
£’000
£’000
non-derivative financial
liabilities 2023
Bank overdrafts
…
…
…
119
-
-
-
119
119
Bank loans - repayable
by instalments
…
…
…
1,514
2,739
1,449
5,347
11,049
8,139
Bank loans - revolving
…
…
3,500
10,000
26,000
-
39,500
39,500
Lease liabilities
…
…
…
2,231
3,160
1,182
268
6,841
6,227
Trade and other
-
-
-
financial liabilities
…
…
…
31,226
31,226
31,226
Total derivatives
38,590
15,899
28,631
5,615
88,735
85,211
Derivatives forward exchange contracts
(Inflow)
…
…
…
…
(40,946)
(67)
-
-
(41,013)
-
Outflow
…
…
…
…
42,379
74
-
-
42,453
2,383
Total derivatives
1,433
7
-
-
1,440
2,383
Total
contractual
Within
cash
Carrying
1 year
2-3 years
4-5 years
5+ years
flows
amount
Contractual maturities of
£’000
£’000
£’000
£’000
£’000
£’000
non-derivative financial
liabilities 2024
Bank overdrafts
…
…
…
48
-
-
-
48
48
Bank loans - repayable
by instalments
…
…
…
1,471
2,445
1,073
4,968
9,957
7,072
Bank loans - revolving
…
…
10,000
21,000
28,000
-
59,000
59,000
Lease liabilities
…
…
…
3,430
5,296
1,777
598
11,101
9,813
Trade and other
-
-
-
financial liabilities
…
…
…
30,572
30,572
30,572
Total derivatives
45,521
28,741
30,850
5,566
110,678
106,505
Derivatives forward exchange contracts
(Inflow)
…
…
…
…
(30,870)
(22,291)
(4,091)
-
(57,252)
-
Outflow
…
…
…
…
31,087
22,433
4,197
-
57,717
528
Total derivatives
217
142
106
-
465
528
85
NOTES TO THE FINANCIAL STATEMENTS
28. Financial risk management (continued)
Foreign exchange risk (continued)
Bank loans repayable by instalments include a loan of £1.2 million with the final payment due in the year ended
30th April, 2039, and a loan of £4 million with the final payment due in the year ended 30th April, 2042.
c)
Market risk
Foreign exchange risk
The Group is subject to fluctuations in exchange rates on its net investments overseas and transactional monetary
assets and liabilities not denominated in the operating (or “functional”) currency of the operating unit involved.
The Group is exposed to fluctuations in several currencies which give rise to the net currency gains and losses
recognised in the statement of profit or loss.
In respect of other monetary assets and liabilities held in currencies, the Group ensures that the net exposure is
eliminated through the use of forward exchange contracts or spot transactions at the time the contractual
commitment is in place.
Currency derivatives
The Group utilises currency derivatives to hedge future highly probable transactions. There is an economic
relationship between the hedged items and the hedging instrument as the notional amount and maturity dates of
the hedging instrument match the expected values and timing of the highly probable sales and purchases. The
Group has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the currency
derivatives is the same as the currency risk of the highly probable sales and purchases. Forecast transactions
The Group classifies its forward exchange contracts hedging forecast transactions as cash flow hedges and states
them at fair value.
Recognised assets and liabilities
Changes in the fair value of forward exchange contracts that economically hedge monetary assets and liabilities in
foreign currencies and for which no hedge accounting is applied are recognised in the statement of profit or loss.
Both the changes in fair value of the forward contracts and the foreign exchange gains and losses relating to the
86
NOTES TO THE FINANCIAL STATEMENTS
28.
Financial risk management (continued)
c)
Market risk (continued)
Currency profile of financial assets and liabilities:
The non-derivative foreign currency balances have been translated into Sterling using the reporting date
spot rates below.
US
2024
US
2023
Dollar
Euro
Other
Total
Dollar
Euro
Other
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Non-derivatives
Trade and other
7,682
1,534
32
9,248
receivables
7,615
2,807
77
10,499
Cash and cash
1,585
15
38
1,638
equivalents
1,195
3,508
350
5,053
Trade and other
(217)
(78)
(78)
(373)
payables
(823)
(808)
(72)
(1,703)
Total
non-derivatives
9,050
1,471
(8)
10,513
7,987
5,507
355
13,849
Derivatives fair value
Forward
exchange
contracts
1,650
30
-
1,680
- assets
2,304
58
325
2,687
Forward
exchange
contracts
(380)
(58)
(90)
(528)
-
- liabilities
(2,289)
(94)
(2,383)
1,270
(28)
(90)
1,152
15
(36)
325
304
Derivatives nominal value
Forward
exchange
contracts
78,187
22,099
111
100,397
- assets
101,350
9,299
4,807
115,456
Forward
exchange
contracts
42,709
10,865
3,677
57,251
-
- liabilities
33,207
7,805
41,012
Total gross
contractual
cash flows
120,896
32,964
3,788
157,648
134,557
17,104
4,807
156,468
The following significant exchange rates applied during the year, for reporting purposes:
Exchange rates
2024
2023
Average
Reporting
Average
Reporting
exchange rate
date spot rate
exchange rate
spot rate
US Dollar (USD)
…
…
…
…
1.2577
1.2520
1.2016
1.2566
Euro (EUR) …
…
…
…
…
1.1615
1.1710
1.1520
1.1390
Hypothetical Sensitivity analysis
Despite this sensitivity analysis, which is required to be calculated by the accounting standards, not reflecting the
true exposure of the Group, the Group has calculated the following sensitivities based on available data from the
financial derivatives known as forward contracts that it has in place at the year-end and utilises to hedge its
exposure to the principal foreign currencies in which the Group operates. As foreign exchange rates and interest
rates continue to fluctuate significantly, the Board considers it most appropriate to provide the hypothetical
sensitivities for a 1% change, because these figures can be extrapolated proportionately to obtain an estimate of
the impact of larger movements. The Group’s exposure to foreign currency movements for all other foreign
87
NOTES TO THE FINANCIAL STATEMENTS
28.
Financial risk management (continued) Hypothetical
Sensitivity analysis (continued)
2024
2023
Effect on
Effect on profit
Effect on
Effect on profit
equity
before tax
equity
before tax
£’000
£’000
£’000
£’000
GBP strengthens by 1% against USD
(843)
(244)
845
428
GBP strengthens by 1% against EUR
(199)
(22)
67
53
GBP weakens by 1% against USD
861
249
(845)
(428)
GBP weakens by 1% against EUR
203
22
(67)
(53)
d)
Interest rate risk
The Group is subject to fluctuations in interest rates on its borrowings and surplus cash. The Group is aware of
the financial products available to hedge against adverse movements in interest rates. Formal reviews are
undertaken to determine whether such instruments are appropriate for the Group.
Interest rate swaps
In July 2021, the Company signed a contract to mitigate the impact of interest rate risk by taking out an interest
rate swap derivative fixing £30 million of notional debt at less than 1% versus the variable inter-bank lending rate
(SONIA) for a period of 10 years, from 1st September, 2021 to 31st August, 2031. Hedge accounting is not
applied for this instrument and all movements in fair value are recognised in profit or loss.
The table below shows the Group’s financial assets and liabilities split by those bearing fixed and floating rates
and those that are non interest-bearing.
2024
2023
Non-
Non-
Fixed
Floating
interest-
Fixed
Floating
interest-
rate
rate
bearing
Total
rate
rate
bearing
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Cash and cash
-
30,678
30,678
-
equivalents
-
-
19,661
19,661
Contract assets
-
-
22,027
22,027
-
-
16,257
16,257
Trade and financial
-
-
27,807
27,807
assets
-
-
29,757
29,757
Derivative assets
-
-
7,723
7,723
-
-
8,616
8,616
Contract liabilities*
-
-
(34,124)
(34,124)
-
-
(32,747)
(32,747)
Trade and other
-
-
(30,572)
(30,572)
financial liabilities
-
-
(31,226)
(31,226)
Derivative liabilities
-
-
(528)
(528)
-
-
(2,383)
(2,383)
Bank overdrafts
-
(48)
-
(48)
-
(119)
-
(119)
Bank loans -
repayable by
(3,058)
(4,014)
-
(7,072)
-
instalments
(3,920)
(4,219)
(8,139)
Bank loans -
-
(59,000)
-
(59,000)
-
-
revolving
(39,500)
(39,500)
Lease liabilities
(2,558)
(7,255)
-
(9,813)
(1,880)
(4,347)
-
(6,227)
(5,616)
(39,639)
7,667
(52,922)
(5,800)
(28,524)
(11,726)
(46,050)
*The contract liabilities are predominantly advance payments from customers.
The fixed interest rates for bank loans repayable by instalments are 1.96% to 3.15%. Floating interest rates for
bank loans are calculated as SONIA or UK base rate, with bank margins of less than 2.1%.
Sensitivity analysis
88
NOTES TO THE FINANCIAL STATEMENTS
29.
Total financial assets and liabilities
IFRS 7 requires that the classification of financial instruments at fair value be determined by reference to the source of
inputs used to derive the fair value. This classification uses the following three-level hierarchy:
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The table below sets out the Group’s accounting classification of financial assets and liabilities and their fair values at
30th April, 2024 and 30th April, 2023.
Year ended 30th April, 2024
Year ended 30th April, 2023
Carrying
Carrying
Level
amount
Fair value
amount
Fair value
Financial assets
£’000
£’000
£’000
£’000
Amortised cost
Cash and cash equivalents
…
Other
30,678
30,678
19,661
19,661
Contract assets
…
…
…
Other
22,027
22,027
16,257
16,257
Trade receivables …
…
…
Other
26,364
26,364
28,094
28,094
Other financial assets
…
…
Other
1,443
1,443
1,663
1,663
Fair value through profit and loss
Derivative financial assets*
…
Level 2
36
36
68
68
Interest rate swap
…
…
Level 2
6,042
6,042
5,929
5,929
Fair value – hedging instrument
Derivative financial assets*
…
Level 2
1,645
1,645
2,619
2,619
Total financial assets
…
88,235
88,235
74,291
74,291
Financial liabilities
Amortised cost
Contract liabilities
…
…
Other
34,124
34,124
32,747
32,747
Trade payables
…
…
…
Other
20,432
20,432
22,400
22,400
Other financial liabilities
…
Other
5,236
5,236
2,764
2,764
Lease liabilities
…
…
…
Other
9,813
11,101
6,227
6,841
Bank overdrafts
…
…
…
Other
48
48
119
119
Bank loans -
7,072
9,938
repayable by instalments
…
Other
8,139
11,049
Bank loans -
59,000
59,000
rolling credit facilities
…
…
Other
39,500
39,500
Fair value through profit and loss
Derivative financial liabilities*…
Level 2
4
4
31
31
Fair value – hedging instrument
Derivative financial liabilities*…
Level 2
524
524
2,352
2,352
Total financial liabilities
…
136,253
140,407
114,279
117,803
*
The prior year comparatives for the analysis between hedged and unhedged derivatives have been updated, as
outlined in note 17 and note 23.
Derivative financial instruments not designated as cash flow hedging instruments are measured at fair value
through profit and loss.
The fair value of the short-term cash and cash equivalents, trade and other receivables, contract assets, trade and
89
NOTES TO THE FINANCIAL STATEMENTS
30.
Capital commitments
Contracted capital commitments at 30th April, 2024 for which no provision has been made in these financial
statements were £2,265,096 (2023: £4,576,000).
31.
Guarantees and contingencies
The table below sets out the number and value of unexpired bank guarantee bonds as at 30th April, 2024 and 30th
April, 2023. These guarantee bonds are required as part of the terms and conditions within our Mechanical
Engineering contracts.
20242023
£’000£’000
154 guarantee and bonds contracts (2023: 146)……………8,6689,180
32.
Subsequent events
After the balance sheet date an ordinary dividend of 133 pence per qualifying ordinary share was proposed by the
Directors (2023: Ordinary dividend of 115 pence).
The current year proposed ordinary dividend of £9,988,000 has not been provided for within these financial statements
(2023: Proposed ordinary dividend of £8,636,000 was not provided for within the comparative figures).
After the year end the Group has renewed a £10 million revolving credit facility, that was due to expire in September
2024, on a four year term, as a prudent policy to ensure that guaranteed facilities and the appropriate level of
headroom is available to the Group.
33.
Non-principal subsidiaries and associates
Company name
Registered
Country of
Class of
Non-principal Subsidiaries:
address*
Incorporation
shares held
% held
Mechanical Engineering:
Easat Radar Systems India Private Limited
…
…
4
India
Ordinary
100
Goodwin Submersible Pumps West Africa Limited
…
17
Ghana
Ordinary
100
Refractory Engineering:
Gold Star Brasil Industria E Comercio de Materials Para
Fundicao Ltda …
…
…
…
…
…
…
7
Brazil
Ordinary
100
Jewelry Wax Limited
…
…
…
…
…
…
13
Thailand
Ordinary
61.5
GRS Silicone Company Limited
…
…
…
…
16
China
Ordinary
75
Shenzhen King-Top Modern Hi-Tech Company Limited
15
China
Ordinary
75
AVD Fire Limited (company number 14933398) …
…
1
England and Wales
Ordinary
100
Non-principal holding companies:
Goodwin Refractory Services Holdings Limited…
…
1
England and Wales
Ordinary
100
Goodwin Refractory Services Thailand Limited …
…
10
Thailand
Ordinary
61.5
Ying Tai (UK) Limited
…
…
…
…
…
…
1
England and Wales
Ordinary
75
Non-principal Associates:
Tet Goodwin Property Company Limited …
…
…
10
Thailand
Ordinary
49
Dormant companies:
Gold Star Powders Limited
…
…
…
…
…
1
England and Wales
Ordinary
100
Net Central Limited
…
…
…
…
…
…
1
England and Wales
Ordinary
100
Sandersfire International Limited
…
…
…
…
1
England and Wales
Ordinary
100
Soluform Limited
…
…
…
…
…
…
1
England and Wales
Ordinary
100
Specialist Refractory Services Limited
…
…
…
1
England and Wales
Ordinary
100
*The registered address for each company can be found in note 35.
All of the above companies are included as part of the consolidated accounts. The trading companies are all involved in
mechanical or refractory engineering.
34.
Related parties
Transactions between the Company and its subsidiaries have been eliminated on consolidation and are not reported
in this note. Year end balances and transactions during the year with the Group’s associate company, Tet Goodwin
Property Company Limited, are shown below.
20242023
£’000£’000
Rental cost ……………………………
290
318
90
NOTES TO THE FINANCIAL STATEMENTS
35.
Registered offices of subsidiaries and associates
The registered offices of the companies listed in notes 14 and 33 are listed below.
1.
Ivy House Foundry, Hanley, Stoke-on-Trent ST1 3NR
2.
Brassington, Nr. Matlock, Derbyshire DE4 4HF
3.
13-1, Jungbong-daero, 396 Beon-Gil, Seo-gu, Incheon, South Korea
4.
No 39/1-5, Old Mahabalipuram Road, Kalavakkam, Thiruporur Chengalpattu District – 603110, India
5.
Suite C, F1, Building #14, Xiya Road No.11, Waigaoqiao Free Trade Zone, 200131, Shanghai, China
6.
Hocksteiner Weg 56, D - 41189 Mönchengladbach, Germany
7.
Rua das Margaridas s/n, No. 70, Barrio Terra Preta - Mairipora – SP, CEP 07662-025, São Paulo, Brazil
8.
Confidential Tax and Business Services, Level 1, 449 Gympie Road, Kedron Qld 4031, Australia
9.
Koivupuistontie 34, 01510 Vantaa, Finland
10.
99/9 Moo5 Khlong Yong, Bhudhamontol, Nakhonpathom, 73170 Thailand
11.
No.73, Jiao Xin Road, Lanhe Town, Nansha District, Guangzhou City, 511480, China
12.
400 metres North from Nan Zhai Committee, Xifuzhen Street, Chengyang District, Qingdao City, 266106,
China
13.
311/4-5, Mu 10, Khlong Maduea Sub-district, Krathum Baen District, Samut Sakhon Province, Thailand
14.
Unit 1 Bridgeway Business Park, Cnr Sam Green Road and Pinnacle Close, Tunney Extension 9, Germiston,
Gauteng, 1401, South Africa
15.
No.2-1, Shanzixia Road, Dakang Community, Yuanshan Street, Longgang District, Shenzhen City,
Guangdong, China
16.
101,102 or No5, 165 Minsheng Road, Lanhe Town, Nansha District, Guangzhou, China
17.
91
NOTES TO THE FINANCIAL STATEMENTS
GOODWIN PLC
COMPANY BALANCE SHEET
at 30th April, 2024
2024
2023
NON-CURRENT ASSETS
Note
£’000
£’000
Property, plant and equipment …
…
…
…
…
…
C4
37,621
42,946
Investment properties
…
…
…
…
…
…
…
C4
36,791
30,547
Right-of-use assets…
…
…
…
…
…
…
…
C4
9,345
4,817
Investments …
…
…
…
…
…
…
…
…
C5
29,832
25,822
Intangible assets
…
…
…
…
…
…
…
…
C6
15,398
16,108
Derivative financial assets
…
…
…
…
…
…
28, C7
4,837
4,802
Group receivables …
…
…
…
…
…
…
…
C8
40,703
31,756
174,527
156,798
CURRENT ASSETS
1,006
Other receivables
…
…
…
…
…
…
…
…
C8
938
Derivative assets
…
…
…
…
…
…
…
…
28, C7
1,517
1,127
Cash at bank and in hand
…
…
…
…
…
…
21,616
12,962
24,139
15,027
TOTAL ASSETS
…
…
…
…
…
…
…
…
198,666
171,825
CURRENT LIABILITIES
Borrowings …
…
…
…
…
…
…
…
…
C9
13,305
6,053
Trade and other payables…
…
…
…
…
…
…
C10
22,968
19,743
36,273
25,796
NON-CURRENT LIABILITIES
Borrowings …
…
…
…
…
…
…
…
…
C9
59,106
45,074
Accruals and deferred income …
…
…
…
…
…
883
780
Deferred tax liabilities
…
…
…
…
…
…
…
C11
11,006
8,300
70,995
54,154
TOTAL LIABILITIES
…
…
…
…
…
…
…
…
107,268
79,950
NET ASSETS …
…
…
…
…
…
…
…
…
91,398
91,875
EQUITY
Called up share capital
…
…
…
…
…
…
…
C12
751
769
Share-based payments reserve
…
…
…
…
…
-
5,244
Cash flow hedge reserve …
…
…
…
…
…
…
315
-
Cost of hedging reserve …
…
…
…
…
…
(72)
-
Profit and loss account
…
…
…
…
…
…
…
90,404
85,862
TOTAL EQUITY
…
…
…
…
…
…
…
…
91,398
91,875
Profit after tax for the year
…
…
…
…
…
…
16,785
11,569
These financial statements were approved by the Board of Directors on 6th August, 2024 and signed on its behalf by:
T. J. W. Goodwin M. S. Goodwin Director Director
S. R. Goodwin
Director
Company Registration Number: 305907
The notes on pages 95 to 104 form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
GOODWIN PLC
COMPANY STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30th April, 2024
2024
2023
£’000
£’000
PROFIT FOR YEAR
16,785
11,569
OTHER COMPREHENSIVE INCOME / (EXPENSE) ITEMS THAT
MAY BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS:
Cash flow hedges - effective portion of changes in fair value
…
…
…
…
416
-
Cash flow hedges - ineffectiveness transferred to profit or loss
…
…
…
…
(16)
-
Cash flow hedges - amounts transferred to profit or loss
…
…
…
…
…
20
-
Cash flow hedges - deferred tax charge …
…
…
…
…
…
…
…
(105)
-
Cost of hedging - changes in fair value
…
…
…
…
…
…
…
…
(100)
-
Cost of hedging - ineffectiveness transferred to profit or loss
…
…
…
…
4
-
Cost of hedging - deferred tax credit
…
…
…
…
…
…
…
…
24
-
OTHER COMPREHENSIVE EXPENSE FOR THE YEAR, NET OF INCOME TAX
243
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
17,028
11,569
The notes on pages 95 to 104 form part of these financial statements.
93
NOTES TO THE FINANCIAL STATEMENTS
GOODWIN PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
at 30th April, 2024
Share-
based
Cash flow
Cost of
Share
payments
hedge
hedging
Retained
Total
capital
reserve
reserve
reserve
earnings
equity
£’000
£’000
£’000
£’000
£’000
£’000
YEAR ENDED 30TH APRIL, 2024
769
5,244
-
-
85,862
91,875
Balance at 1st May, 2023
…
Profit for the year
…
…
-
-
-
-
16,785
16,785
Effective portion of changes
-
-
-
in fair value
…
…
…
416
(100)
316
Ineffectiveness transferred
-
-
-
to profit or loss
…
…
…
(16)
4
(12)
Amounts reclassified
to profit or loss
…
…
…
-
-
20
-
-
20
Deferred tax (charge) / credit …
-
-
(105)
24
-
(81)
Other comprehensive income /
(expense) for the year
-
-
315
(72)
-
243
TOTAL COMPREHENSIVE INCOME /
-
-
FOR THE YEAR
315
(72)
16,785
17,028
Transfers between reserves *…
-
(5,244)
-
-
5,244
-
Transactions with owners
-
-
-
Buy back of shares
…
…
(18)
(8,851)
(8,869)
Dividends paid
…
…
…
-
-
-
-
(8,636)
(8,636)
BALANCE AT 30TH APRIL, 2024
751
-
315
(72)
90,404
91,398
YEAR ENDED 30TH APRIL, 2023
Balance at 1st May, 2022
…
769
5,244
-
-
82,582
88,595
Profit for the year
…
…
-
-
-
-
11,569
11,569
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR
-
-
-
-
11,569
11,569
Transactions with owners
-
-
-
-
Dividends paid
…
…
…
(8,289)
(8,289)
BALANCE AT 30TH APRIL, 2023
769
5,244
-
-
85,862
91,875
*
The balance on the share-based payment reserve has been transferred to retained earnings as all previous share options
have vested.
The notes on pages 95 to 104 form part of these financial statements.
94
NOTES TO THE FINANCIAL STATEMENTS
C1Accounting policies
Principal accounting policies
These financial statements present information about the Company as an individual undertaking and not about its
Group. These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (“FRS 101”).
Basis of accounting
Goodwin PLC (the “Company”) is a Company incorporated and domiciled in England and Wales.
These financial statements have been prepared in accordance with International Accounting Standards as adopted
by the UK and in conformity with the requirements of the Companies Act 2006.
The Company proposes to continue to adopt the reduced disclosure framework of FRS 101 in its next financial
statements. The accounting policies set out below have, unless otherwise stated, been applied consistently to all
periods presented in these financial statements.
The Company is exempt under S408 (3) Companies Act 2006 from the requirement to present its own profit and
loss account.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the
following disclosures:
•
A cash flow statement and related notes;
•
Comparative period reconciliations for share capital, tangible fixed assets and intangible assets;
•
Disclosures in respect of transactions with wholly-owned subsidiaries;
•
Disclosures in respect of capital management and
•
The effects of new but not yet effective IFRSs.
As the consolidated financial statements of Goodwin PLC include the equivalent disclosures, the Company has
also taken the exemptions under FRS 101 available in respect of certain disclosures required by IFRS 13 Fair
Value Measurement and the disclosures required by IFRS 7 Financial Instrument Disclosures.
Judgements made by the Directors, in the application of these accounting policies, that have significant effect on
the financial statements and estimates with a significant risk of material adjustment in the next year are discussed
in note 2 of the Group financial statements.
Measurement convention
The financial statements have been prepared under the historical cost accounting rules except where the
measurement of balances at fair value is required as below.
Investments in subsidiary undertakings
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost less amounts
written off for impairment.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies at the foreign exchange
rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the
balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences
arising on translation are recognised in the statement of profit or loss within operating profit.
Financial instruments
Financial assets and financial liabilities are recognised on the Company’s balance sheet when the Company has
become a party to the contractual provisions of the instrument. The principal financial assets and liabilities of the
Company are as follows:
Principal non-derivative financial assets
Other receivables
Other receivables principally comprise short-term sales taxes repayable to the Company and receivables from
Group undertakings. After being recognised initially at fair value, other receivables are measured, subsequently,
at amortised cost. The carrying amount of other receivables is considered to be a reasonable approximation of
their fair value. A provision for expected credit losses (ECL) is not seen as necessary given that the
counterparties here are Group undertakings. The Company is privy to both the accounts and future prospects of
its subsidiary and associate companies. Accordingly, impairment provisions are raised where the carrying value
of a subsidiary company / associated company cannot be fully supported.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand including cash deposits with an original maturity
of three months or less.
Equity instruments
95
NOTES TO THE FINANCIAL STATEMENTS
C1Accounting policies (continued)
Principal non-derivative financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements into which the
Company has entered.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded initially at their fair value less attributable transaction
costs. They are subsequently carried at their amortised cost and finance charges are recognised in the
statement of profit or loss over the term of the instrument using an effective rate of interest.
Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently at amortised cost using the
effective interest method where material.
Derivative assets and liabilities
Derivative financial assets and liabilities are recognised at fair value. The fair value of forward foreign exchange
contracts is equal to the present value of the difference between the contractual forward price and the current
forward price for the residual maturity of the contract adjusted for counterparty credit risk. The recognition of the
gain or loss on re-measuring to fair value those forward foreign exchange contracts, which are used for
hedging, is outlined below; for other forward foreign exchange contracts and the interest rate swap derivative,
the gain or loss is recognised in the profit or loss.
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised
asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative
financial instrument is recognised directly in the hedging reserves. Our hedge relationships are aligned with our
risk management objectives and strategy, resulting in a more qualitative and forward-looking approach in
ensuring hedge effectiveness. These hedging arrangements have been entered into to mitigate foreign currency
exchange risk arising from certain highly probable sales and purchase transactions denominated in foreign
currencies.
For cash flow hedges, the associated cumulative gain or loss on the relevant derivative financial instrument is
removed from equity and recognised in the statement of profit or loss in the same period or periods during
which the hedged forecast transaction affects the statement of profit or loss. Any identified ineffective portion of
the hedge is recognised immediately in the statement of profit or loss. The full value of the change in fair value
is designated as the hedging instrument and taken to the cash flow hedge reserve.
Where a derivative financial instrument is not hedge accounted, all changes in fair value are recognised
immediately in profit or loss.
When a hedging instrument expires or is sold, terminated or exercised, or the Company revokes designation of
the hedge relationship but the hedged forecast transaction is still expected to occur, the cumulative gain or loss
at that point remains in equity and is recognised in accordance with the above policy when the transaction
occurs. If the cash flow hedge transaction is no longer expected to take place, the cumulative unrealised gain or
loss recognised in equity is recognised in the statement of profit or loss immediately, within administrative
expenses.
Intangible fixed assets and amortisation
Manufacturing rights, brand names and customer lists purchased by the Company are amortised to nil by equal
annual instalments over their estimated useful lives. Expenditure on development activities is capitalised if the
product or process is technically and commercially feasible and the Company has sufficient resources to complete
development. The expenditure capitalised includes the cost of materials, direct labour and an appropriate
proportion of overheads.
Amortisation rates are as follows:
Manufacturing rights …
…
…
…
11 - 15 years
Brand names ……
…
…
…
20 years
Software and licences
…
…
…
3 - 5 years
Intellectual property rights …
…
…
15 - 20 years
Non-compete agreements …
…
…
2 - 15 years
Capitalised development costs
…
…
Minimum expected order unit intake or minimum product life
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Where
parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items of property, plant and equipment.
Depreciation is charged to the statement of profit or loss over the estimated useful lives of each part of an item of
property, plant and equipment on the following bases:
Freehold land
…
…
…
…
…
Nil
Freehold buildings
…
…
…
…
25 -50 years on reducing balance or cost
Plant and machinery …
…
…
…
4
-20 years on reducing balance or cost
Motor vehicles …
…
…
…
…
4
-7 years on reducing balance or cost
Tooling
…
…
…
…
…
Over estimated production life
Other equipment
…
…
…
…
4
- 7 years on reducing balance or cost
96
NOTES TO THE FINANCIAL STATEMENTS
C1Accounting policies (continued)
Property, plant and equipment (continued)
Assets in the course of construction are not depreciated.
Before being brought into use, assets are assessed individually to determine which is the most appropriate
depreciation method. At present, most assets are being depreciated on a reducing balance basis.
Investment properties
Investment properties are properties which are held either to earn rental income or for capital appreciation or for
both. Investment properties are stated at cost less accumulated depreciation.
Depreciation is charged to the statement of profit or loss on a straight-line basis or reducing balance basis over the
estimated useful lives of investment properties which is typically 25 years.
Government grants
Government grants relating to income are recognised in the statement of profit or loss.
Unamortised government grants relating to property, plant and equipment are recognised in the balance sheet as
deferred income. Amortisation of such grants is credited to profit and loss in accordance with the useful lives of the
assets to which they relate.
Provisions
A provision is recognised in the balance sheet when the Company has a present legal or constructive obligation as
a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks
specific to the liability.
Leases
Definition of a lease
A contract is a lease or contains a lease if it transfers the right to use an identified asset over the contract term, in
exchange for payment. In determining whether a contract gives the Company the right to use an asset, the
Company assesses whether:
•
the contract involves the use of an identified asset;
•
the Company has the right to obtain substantially all of the economic benefit of using the asset; and
•
the Company has the right to direct the use of the asset by deciding how the asset is employed.
Lease term
The lease term is the non-cancellable period of a lease, and options to extend the lease or terminate it, where it is
probable that the Company will exercise the available options. At the start of a lease, the Company makes a
judgement about whether it is reasonably certain to exercise the options, and reassesses this judgement at every
reporting period. Contracts, where the original lease term has expired, with assets continuing to be leased on a
short-term rolling basis of a few months, are treated as short-term leases.
Lease balances
A right-of-use asset and a lease liability are calculated at the beginning of a lease. The right-of-use asset is
measured initially at cost, being the opening lease liability, adjusted for any lease payments made by the start of
the lease, adjusted for any initial direct costs, which have been incurred.
The lease liability is measured initially at the present value of the lease payments, which are outstanding at the
start date, discounted at either the rate implicit in the lease or the Company’s incremental borrowing rate. With the
exception of leases containing an option to purchase, the Company uses its incremental borrowing rate as the
discount rate. Lease liabilities are measured at amortised cost, using the effective rate, and adjusted as required
for any subsequent change to the lease terms.
The right-of-use asset is depreciated on a straight-line basis over the lease term, or from the start date of the lease
to the end of the useful life of the right-of-use asset as appropriate. The method of calculating the estimated useful
lives of the right-of-use assets and testing for impairment is the same as that for property, plant and equipment.
Recognition exemptions
Payments for short-term leases, lasting twelve months or less, without a purchase option, are reported an as
operating expense on a straight-line basis over the term of the lease.
The cost of leasing low-value items is reported as an operating expense over the life of the lease.
Finance costs (net)
Finance costs comprise interest payable and interest on finance leases using the effective interest method,
together with the amortisation of any facility arrangement fees. Borrowing costs that are directly attributable to the
acquisition, construction or production of an asset, which takes a substantial time to be prepared for use, are
capitalised as part of the cost of that asset.
Interest income and interest payable is recognised in the statement of profit or loss as it accrues.
Pension costs
The Company contributes to a defined contribution pension scheme for employees under an Auto Enrolment
97
NOTES TO THE FINANCIAL STATEMENTS
C1Accounting policies (continued)
Pension costs (continued)
in independently administered funds. Company pension costs are charged to the statement of profit or loss in the
year for which contributions are payable.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the statement of profit
or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in
equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax
rates enacted or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.
Interest swap derivative
The mark to market value of the Company’s interest rate swap derivative is treated as not being hedged with the
movement on the mark to market valuation being taken through the profit and loss account.
C2Auditor’s remuneration
Included in the profit / (loss) before taxation are the following:
20242023
£’000£’000
Fees receivable by the auditor and the auditor’s associates in respect of:
Audit of these financial statements
…
…
…
…
…
…
…
88
80
Amounts paid to the Company’s auditor in respect of services to the Company, other than the audit of the
Company’s financial statements, have not been disclosed as the information is required instead to be disclosed on
a consolidated basis (see note 6 of the Group financial statements).
C3Staff numbers and costs
The average number of persons employed by the Company (including Directors) during the year, analysed by
category, was as follows:
Number of employees
20242023
Administration staff …………………… ……
56
51
20242023
£’000£’000
The aggregate payroll costs of these persons were as follows:
Wages and salaries
…
…
…
…
…
…
…
…
…
…
6,451
4,951
Social security costs
…
…
…
…
…
…
…
…
…
…
615
616
Other pension costs
…
…
…
…
…
…
…
…
…
…
104
99
7,170
5,666
Details of the Directors’ remuneration can be found within the Directors’ Remuneration Report on page 35. The
emoluments of the highest paid Director were £435,000 (2023: £406,000). The number of Directors who were
98
NOTES TO THE FINANCIAL STATEMENTS
C4 Tangible fixed assets
Investment
Property, Plant and Equipment
properties
Other
Assets in
Land and
Plant and
equipment
course of
buildings
machinery
*
construction
Total
£’000
£’000
£’000
£’000
£’000
£’000
Cost
Balance at 1st May, 2023
39,378
1,244
42,464
2,017
21,198
66,923
Additions
…
…
2,829
-
436
248
6,292
6,976
Reclassification …
…
4,693
-
5,630
-
(10,323)
(4,693)
Transfer to ROU**
…
-
-
(4,878)
-
(355)
(5,233)
Disposals
…
…
-
-
-
(169)
-
(169)
Intercompany transfers
-
-
-
-
(281)
(281)
Balance at 30th April, 2024
46,900
1,244
43,652
2,096
16,531
63,523
Depreciation
Balance at 1st May, 2023
8,831
724
21,709
1,544
-
23,977
Charged in the year
…
1,278
20
2,094
140
-
2,254
Transfer to ROU**
…
-
-
(166)
-
-
(166)
Disposals
…
…
-
-
-
(163)
-
(163)
Balance at 30th April, 2024
10,109
744
23,637
1,521
-
25,902
Net book value
At 30th April, 2023
…
30,547
520
20,755
473
21,198
42,946
At 30th April, 2024
36,791
500
20,015
575
16,531
37,621
*
Other equipment comprises motor vehicles, IT hardware and office equipment.
**
This is a transfer to the right-of-use assets category, relating to ongoing investment in Green Projects.
Security
The net book value of assets pledged as security for borrowings (note C9) is:
2024
2023
£’000
£’000
Investment property
…
…
…
…
…
…
…
…
…
4,407
4,500
Plant and machinery
…
…
…
…
…
…
…
…
…
4,537
4,800
8,944
9,300
The Company’s investment properties have been valued, using the cost model, and depreciated over their
estimated useful lives – typically 25 years. In the opinion of the Directors, the fair value of the investment
properties as at 30th April, 2024 was estimated to be in the range of £45-55 million, compared with the net book
value of £37 million.
Investment property income and operating expenses
The Company rents investment properties to its UK subsidiaries. There are no formal agreements in place and for
this reason, it is not possible to disclose a maturity analysis of lease payments.
2024
2023
£’000
£’000
Property income …
…
…
…
…
…
…
…
…
…
1,561
1,503
Operating expenses
…
…
…
…
…
…
…
…
…
(814)
(819)
99
NOTES TO THE FINANCIAL STATEMENTS
C4 Tangible fixed assets (continued)
Right-of-use assets
Plant and
Other
machinery
equipment
Total
£’000
£’000
£’000
Cost
Balance at 1st May, 2023
…
…
…
…
…
4,309
1,764
6,073
Additions
…
…
…
…
…
…
…
-
178
178
Transfer from property, plant and equipment…
…
5,233
-
5,233
Balance at 30th April, 2024
9,542
1,942
11,484
Depreciation
Balance at 1st May, 2023
…
…
…
…
…
377
879
1,256
Charged in the year …
…
…
…
…
…
292
425
717
Transfer from property, plant and equipment…
…
166
-
166
Balance at 30th April, 2024
835
1,304
2,139
Net book value
At 30th April, 2023
…
…
…
…
…
…
3,932
885
4,817
At 30th April, 2024
8,707
638
9,345
C5 Fixed asset investments
Shares in
Shares in
associated
Group
undertakings
undertakings
Total
£’000
£’000
£’000
Cost
Balance at 1st May, 2023
…
…
…
…
…
237
31,498
31,735
Additions
…
…
…
…
…
…
…
-
4,010
4,010
Transfers
…
…
…
…
…
…
…
126
(126)
-
Balance at 30th April, 2024
363
35,382
35,745
Impairment
Balance at 1st May, 2023
…
…
…
…
…
-
5,913
5,913
Balance at 30th April, 2024
-
5,913
5,913
Net book value
At 30th April, 2023
…
…
…
…
…
…
237
25,585
25,822
At 30th April, 2024
363
29,469
29,832
A list of principal subsidiaries and associates is given in note 14 and a list of non-principal subsidiaries and
associates is given in note 33 of the Group financial statements.
During the year, Easat Radar Systems Limited issued preference shares of £4 million to its parent company,
Goodwin PLC.
AVD Fire Limited, a 100% owned UK trading subsidiary, is exempt from the requirement to have an audit and to file
audited financial statements by virtue of Section 479A of the Companies Act 2006. In adopting the exemption,
Goodwin PLC has provided a guarantee to this subsidiary in accordance with Section 479C of the Companies Act
100
NOTES TO THE FINANCIAL STATEMENTS
C6 Intangible assets
Brand names
and
Manu-
Software
Develop-
intellectual
facturing
and
ment
property
rights
Licences
costs
Total
£’000
£’000
£’000
£’000
£’000
Cost
Balance at 1st May, 2023
…
…
8,568
1,672
410
11,429
22,079
Additions
…
…
…
…
28
-
374
-
402
Intercompany transfers
…
…
(413)
-
-
464
51
Disposals
…
…
…
…
-
-
(48)
-
(48)
Balance at 30th April, 2024
8,183
1,672
736
11,893
22,484
Amortisation
Balance at 1st May, 2023
…
…
2,251
1,188
301
2,231
5,971
Amortisation for the year
…
…
380
56
85
642
1,163
Disposals
…
…
…
…
-
-
(48)
-
(48)
Balance at 30th April, 2024
2,631
1,244
338
2,873
7,086
Net book value
At 30th April, 2023
…
…
…
6,317
484
109
9,198
16,108
At 30th April, 2024
5,552
428
398
9,020
15,398
Note 16 in the Group financial statements includes details of the Company’s significant intangible assets.
C7 Derivative assets
2024
2023
£’000
£’000
Due after more than one year
4,814
Interest rate swap
…
…
…
…
…
…
…
…
…
…
4,802
Derivative assets designated as cash flow hedging instruments
…
…
23
-
4,837
4,802
Due within one year
Interest rate swap
…
…
…
…
…
…
…
…
…
…
1,230
1,127
Derivative assets designated as cash flow hedging instruments
…
…
287
-
1,517
1,127
The Group utilises interest rate swap derivatives to hedge against future movements in floating interest rates
against the Group's floating rate debt. Hedge accounting is not applied for these instruments and all movements in
101
NOTES TO THE FINANCIAL STATEMENTS
C8 Other receivables
2024
2023
£’000
£’000
Due after more than one year
Interest-bearing
604
Amounts owed by Group undertakings – repayable on demand *
…
…
-
Amounts owed by Group undertakings – repayable within five years …
…
205
8,495
Non interest-bearing
1,224
Amounts owed by Group undertakings – repayable on demand *
…
…
-
Amounts owed by Group undertakings – repayable within five years …
…
38,670
23,261
40,703
31,756
Due within one year
Other debtors ………
…
…
…
…
…
…
…
…
7
166
Prepayments and accrued income
…
…
…
…
…
…
…
759
653
Corporation tax receivable…
…
…
…
…
…
…
…
…
240
119
1,006
938
*
Amounts owed by Group undertakings are considered to be repayable within five years, as the Company
supports the working capital requirements of the Group undertakings and repayment is required by the Company
only when there are excess funds within each specific Group undertaking.
C9Borrowings
This note provides information about the contractual terms of the Company’s interest-bearing bank loans and
borrowings. For more information about the Group’s exposure to interest rate risk, see note 28 (d) of the Group
financial statements.
2024
2023
Non-
Non-
current
Current
Total
current
Current
Total
liabilities liabilities
borrowings
liabilities
liabilities borrowings
£’000
£’000
£’000
£’000
£’000
£’000
Bank overdrafts …
…
…
-
-
-
-
119
119
Bank loans repayable
4,995
1,005
6,000
by instalments
…
…
…
5,906
1,026
6,932
Bank loans - rolling
49,000
10,000
59,000
credit facilities
…
…
…
36,000
3,500
39,500
Other loans
…
…
…
-
-
-
-
-
-
Lease liabilities …
…
…
5,111
2,300
7,411
3,168
1,408
4,576
59,106
13,305
72,411
45,074
6,053
51,127
Lease liabilities
Lease liabilities are payable as follows:
2024
2023
Minimum
Minimum
lease
lease
payments
Interest
Principal
payments
Interest
Principal
£’000
£’000
£’000
£’000
£’000
£’000
Less than one year
…
…
2,774
474
2,300
1,644
236
1,408
Between two and
4,363
467
3,896
three years
…
…
…
2,551
251
2,300
Between four and
1,268
53
1,215
five years
…
…
…
897
29
868
8,405
994
7,411
5,092
516
4,576
102
NOTES TO THE FINANCIAL STATEMENTS
C9Borrowings (continued)
Bank loan repayable by instalments
The loans are secured against three furnaces and land (see note C4). Bank loans are repayable as follows:
2024
2023
Minimum
Minimum
loan
loan
payments
Interest
Principal
payments
Interest
Principal
£’000
£’000
£’000
£’000
£’000
£’000
Less than one year
…
…
1,348
343
1,005
1,362
336
1,026
Between two and
2,233
557
1,676
three years
…
…
…
2,527
559
1,968
Between four and
906
456
450
five years
…
…
…
1,275
431
844
More than five years
…
…
4,230
1,361
2,869
4,503
1,409
3,094
8,717
2,717
6,000
9,667
2,735
6,932
C10 Trade and other payables
2024
2023
£’000
£’000
Trade payables
…
…
…
…
…
…
…
…
…
…
507
852
Amounts owed to Group undertakings – interest-bearing…
…
…
…
311
5,200
Amounts owed to Group undertakings – non interest-bearing …
…
…
20,073
12,622
Other taxation and social security
…
…
…
…
…
…
…
788
365
Other creditors
…
…
…
…
…
…
…
…
…
…
-
12
Accruals and deferred income
…
…
…
…
…
…
…
…
1,289
692
22,968
19,743
C11 Provisions for deferred tax
Property,
plant and
Tax
equipment
losses
Derivatives
Total
£’000
£’000
£’000
£’000
Balance at 1st May, 2023
…
…
…
…
…
8,650
(350)
-
8,300
Recognised in profit or loss
…
…
…
…
2,298
327
-
2,625
Recognised in other
-
-
comprehensive income
…
…
…
…
…
81
81
Balance at 30th April, 2024
10,948
(23)
81
11,006
C12 Called up share capital
2024
2023
£’000
£’000
Authorised, allotted, called up and fully paid:
Balance at 1st May, 7,689,000 (2023: 7,689,600 ordinary shares of 10p each)
…
769
769
Buy back of 180,000 ordinary shares of 10p each…
…
…
…
…
…
(18)
-
Balance at 30th April
751
769
Details of the share buy back are contained in note 26 of the Group financial statements.
C13Related party balances and transactions
The Company has applied the exemptions available under FRS 101 in respect of the disclosure of transactions
with wholly-owned subsidiary companies. The Company has transacted with Easat Radar Systems Limited,
Goodwin Korea Company Limited, Jewelry Plaster Limited, Easat Finland Oy, Siam Casting Powers Limited,
103
NOTES TO THE FINANCIAL STATEMENTS
C13 Related party balances and transactions (continued)
2024
2023
£’000
£’000
Related party balances
Interest-bearing balances
-
Amounts owed by Group undertakings – repayable within five years
…
…
7,998
Non interest-bearing balances
6,955
Amounts owed by Group undertakings – repayable within five years
…
…
735
Non interest-bearing payable balances
-
Amounts owed by Group undertakings – repayable on demand
…
…
…
(149)
Related party transactions
Dividend income
…
…
…
…
…
…
…
1,248
773
Interest income
…
…
…
…
…
…
…
31
237
Management fee income
…
…
…
…
…
…
…
289
536
Rental income
…
…
…
…
…
…
…
119
141
Royalty income
…
…
…
…
…
…
…
162
164
Sale of tangible and intangible assets
…
…
…
…
…
…
…
674
-
Interest expense
…
…
…
…
…
…
…
97
-
Purchase of intangible assets
…
…
…
…
…
…
…
149
-
Compensation of key management personnel
Key management personnel are defined in the Directors’ Remuneration Report on page 35, and their
remuneration is disclosed on page 35 of the Group financial statements.
C14Commitments
Contracted capital commitments at 30th April, 2024 for which no provision has been made in these financial
statements were £259,135 (2023: £1,510,000).
C15Subsequent events
After the balance sheet date, ordinary dividends were declared of £9,988,000, which have not been provided for
within these financial statements.
C16 Dividends
2024
2023
Paid ordinary dividends during the year in respect of prior years
£’000
£’000
8,636
115p (2023: 107.08p) per qualifying ordinary share
…
…
…
…
8,289
After the balance sheet date an ordinary dividend of 133 pence per qualifying ordinary share was proposed by the
Directors (2023: Ordinary dividend of 115 pence).
The proposed current year ordinary dividend of £9,988,000 has not been provided for within these financial
statements (2023: Proposed ordinary dividend of £8,636,000 was not provided for).
C17Accounting estimates and judgements
The material accounting estimates and judgements for the Company follow that of the Group which have been
104
NOTES TO THE FINANCIAL STATEMENTS
Alternative performance measures
Measure
Method of calculation / reference
Page No.
2024
2023
Gross profit (£’000)
Consolidated statement of profit or loss
49
77,887
68,769
Revenue (£’000)
Consolidated statement of profit or loss
49
191,258
185,742
Gross profit as percentage of
revenue (%) *
Gross profit / revenue
40.7%
37.0%
Profit before tax (£’000)
Consolidated statement of profit or loss
49
24,207
22,129
Unrealised gain on 10 year
(113)
interest rate swap derivative
Consolidated statement of profit or loss
49
(3,189)
Trading profit (£,000)
24,094
18,940
Operating profit (£’000)
Consolidated statement of profit or loss
49
26,895
20,313
Capital employed (£’000)
Note 27
82
165,212
157,569
Return on capital employed (%)
Operating profit / capital employed
16.3%
12.9%
Net debt (£’000)
Note 27
82
42,931
32,822
Net assets attributable to equity
122,281
holders of the parent (£’000)
Consolidated balance sheet
51
124,747
Gearing (%)
Net debt / equity, as above
35.1%
26.3%
Net profit attributable to equity
16,902
holders of the parent (£’000)
Consolidated statement of profit or loss
49
15,904
Net assets attributable to equity
122,281
holders of the parent (£’000)
Consolidated balance sheet
51
124,747
Return on investment (%)
Net profit / net assets
13.8%
12.7%
Revenue (£’000)
Consolidated statement of profit or loss
49
191,258
185,742
Average number of employees
Note 7
67
1,225
1,144
Revenue per employee (£,000)
Group revenue / average employees
156,129
162,362
Annual post tax profit (£’000)
Consolidated statement of profit or loss
49
17,716
16,513
Interest rate SWAP mark to market
(85)
net of tax @ 25% (2023: 19.49%) (£’000)
Consolidated statement of profit or loss
49
(2,576)
Deferred tax rate difference (£’000)
Note 9
68
-
596
Depreciation owned assets (£’000)
Note 6
67
6,607
6,272
Depreciation right-of-use assets (£’000)
Note 6
67
1,497
1,198
Amortisation and impairment (£’000)
Note 6
67
1,341
1,257
Exclude operating
(723)
lease depreciation (£’000)
(538)
Annual post tax profit +
depreciation + amortisation
26,353
22,722
* The gross profit for the previous year has been updated, as outlined in note 5.
105
FIVE YEAR FINANCIAL SUMMARY
2020
2021
2022
2023
2024
Continuing operations
£’000
£’000
£’000
£’000
£’000
Revenue…
…
…
…
…
…
…
…
144,512
131,231
144,108
185,742
191,258
Trading profit …
…
…
…
…
…
…
12,115
16,514
17,201
18,940
24,094
Profit before taxation
…
…
…
…
…
12,115
16,514
19,941
22,129
24,207
Tax on profit
…
…
…
…
…
…
…
(3,775)
(3,508)
(6,321)
(5,616)
(6,491)
Profit after taxation …
…
…
…
…
…
8,340
13,006
13,620
16,513
17,716
Basic earnings per ordinary share (in pence)…
…
107.93p
167.82p
169.14p
206.81p
224.53p
Diluted earnings per ordinary share (in pence)
…
103.31p
164.23p
169.14p
206.81p
224.53p
Total equity
…
…
…
…
…
…
…
109,602
118,028
119,743
129,157
126,650
Trading profit is defined as profit before tax, less the impact of the interest rate swap valuation. The calculation is reported
in the Alternative Performance Measures on page 105.
106