TIDMVULC
RNS Number : 5892O
Vulcan Industries PLC
01 February 2023
1 February 2023
Vulcan Industries plc
("Vulcan" or the "Company")
Third Quarter Results for the 9 Months ended 31 December
2022
Vulcan Industries plc (AQSE: VULC) is pleased to announce its
unaudited results for the 9-month period ended 31 December
2022.
Principal activity
The Company was established to develop an innovative platform
from which to service a global client base. Vulcan's strategy is
based on identifying businesses which represent opportunities for
operational synergies to ensure shareholder value regardless of
prevailing economic conditions."
Review of business and future developments
Since admission, the focus has been to restructure the existing
businesses to recover from the financial impact of COVID-19 and lay
the foundations to develop the Group going forward. The initial
step in this process was the acquisition on 24 March 2022 of the
entire share capital of Aftech Limited ("Aftech"). Aftech brings
additional complementary areas of fabrication skills and product
offering.
With continued operating losses from the legacy businesses
placing significant strains on working capital, the board took the
strategic decision to dispose of loss making businesses. In March
2022 the Company disposed of its interest in M&G Olympic
Products Limited and in the first half of the current year has
disposed of IVI Metallics Limited ("IVI") and Orca Doors Limited
("Orca"). In the current quarter the Company disposed of its
interest in Time Rainham Limited ("TRR").
Accordingly, the comparative results of the Group have been
restated to reflect these disposals.
The financial results for the Group for the 9-month period to 31
December 2022 ("Q3FY23") show continuing revenue of GBP938,000 for
the period (Q3FY22: GBPnil). The loss before interest, tax,
depreciation and amortization is GBP293,000 (Q3FY22: GBP759,000).
After depreciation and amortization of GBP38,000 (Q3FY22: GBPnil)
and finance costs of GBP366,000 (Q3FY22: GBP290,000) the Group is
reporting a loss after taxation on continuing activities of
GBP683,000 (Q3FY22:1,049,000). As a result of the disposals, the
Group is reporting a profit on discontinued activities of
GBP1,708,000 (Q3FY22: loss GBP731,000)
At 31 December 2022, the Group balance sheet shows cash balances
of GBP72,000 (Q3FY22: GBP21,000) and net debt was GBP3,127,000
(Q3FY22: GBP4,082,000). Net liabilities at 31 December 2022 were
GBP1,680,000 (Q3FY22 Net liabilities GBP3,717,000).
Outlook
In the nine months of the current year, the Group has continued
to lay the foundations for its future development by disposing of
the loss-making legacy businesses of IVI, Orca and TRR.
The Company has identified further potential additional
acquisition opportunities and will make further announcements as
these progress.
Unaudited Consolidated Statement
of Comprehensive Income
The comparatives have been restated
to reflect discontinued activities
Year ended
9 Months to 9 Months to 31 March
31 December 31 December 2022
2022 2021 As restated
------------ ------------
Note GBP'000 GBP'000 GBP'000
Continuing activities
Revenue 968 - 46
Cost of sales (564) - (29)
============ ------------ ============
Gross profit 374 - 17
Operating expenses (665) (479) (762)
Other gains and losses (60) (280) (280)
Finance costs (346) (290) (390)
------------ ------------ ============
Loss before tax (697) (1,049) (1,415)
Income tax 14 - -
------------ ------------ ============
Loss for the period from continuing
activities (683) (1,049) (1,415)
Discontinued activities
Profit / (loss) for the period
from discontinued activities 3 1,508 (731) (2,272)
------------ ------------ ------------
Profit / (loss) for the period
attributable to the owners of
the Company 825 (1,780) (3,687)
Other Comprehensive Income - - -
for the period
------------ ------------ ============
Total Comprehensive Income
for the period attributable
to owners of the Company 825 (1,780) (3,687)
============ ============ ============
Earnings per share
* Basic and Diluted earnings per share for loss from
continuing operations attributable to the owners of
the Company (pence) 4 (0.01p) (0.33p) (0.40p)
============ ============ ============
* Basic and Diluted earnings per share attributable to
the owners of the Company (pence) 4 0.14p (0.55p) (1.06p)
============ ============ ============
Unaudited Consolidated Statement
of Financial Position
At At At
31 December 31 December 31 March
2022 2021 2022
Note Note GBP'000
Non -- current assets
Goodwill 718 1,571 945
Other intangible assets 277 732 317
Investments 500 - 500
Property, plant and equipment 141 311 295
Right of use assets - 564 403
------------ ------------ -------------
Total non-current assets 1,636 3,178 3,647
------------ ------------ -------------
Current assets
Inventories 22 613 252
Trade and other receivables 513 1,702 833
Cash and bank balances 72 21 69
------------ ------------ -------------
Total current assets 607 2,336 1,154
------------ ------------ -------------
Total assets 2,243 5,514 3,614
------------ ------------ -------------
Current liabilities
Trade and other payables (788) (5,090) (2,698)
Lease liabilities - (161) (125)
Borrowings 7 (3,198) (2,757) (2,968)
------------ ------------ -------------
Total current liabilities (3,986) (8,008) (5,791)
------------ ------------ -------------
Non -- current liabilities
Lease liabilities - (395) (266)
Borrowings 7 - (791) (674)
Deferred tax liabilities (38) (38) (38)
------------ ------------ -------------
Total non-current liabilities (38) (1,224) (978)
------------ ------------ -------------
Total liabilities (4,024) (9,232) (6,769)
------------ ------------ -------------
Net liabilities (1,780) (3,718) (3,155)
============ ============ =============
Equity
Share capital 8 244 138 211
Share premium account 7,455 4,541 6,645
Shares to be issued - - 293
Retained earnings (9,479) (8,397) (10,304)
Total equity attributable to
the owners of the company (1,780) (3,718) (3,155)
============ ============ =============
Notes to the unaudited consolidated financial statements
for the 9-month period ended 31 December 2022
1. General information
Vulcan Industries PLC is incorporated in England and Wales as a
public company with registered number 11640409. The address of the
Company's registered office is 8th Floor, The Broadgate Tower, 20
Primrose Street, London, EC2A 2EW.
These summary financial statements are presented in Sterling and
are rounded to the nearest GBP'000. which is also the currency of
the primary economic environment in which the Company and Group
operate (their functional currency).
Basis of accounting
The condensed consolidated financial statements of the Group for
the 9 months ended 31 December 2022. which are unaudited and have
not been reviewed by the Company's Auditor, have been prepared in
accordance with the International Financial Reporting Standards
('IFRS'), and accounting policies adopted by the Group as set out
in the annual report for the period ended 31 March 2022 (available
at www.vulcanplc.com). The Group does not anticipate any
significant change in these accounting policies for the year ended
31 March 2023.
This report has been prepared to comply with the requirements of
the Access Rulebook of the AQSE Growth Market . In preparing this
report, the Group has adopted the guidance in the Access Rulebook
for interim accounts which do not require that the interim
condensed consolidated financial statements are prepared in
accordance with IAS 34, 'Interim financial reporting'. Whilst the
financial figures included in this report have been computed in
accordance with IFRSs applicable to interim periods, this report
does not contain sufficient information to constitute an interim
financial report as that term is defined in IFRSs.
The financial information contained in this report also does not
constitute statutory accounts under the Companies Act 2006, as
amended. The financial information for the period ended 31 March
2022 is based on the statutory accounts for the year then ended and
the income statement has been restated to reflect the disposal of
certain subsidiaries in the current period. The Auditors reported
on those accounts. Their report was qualified as follows:
Due to the disposal of some of the group's subsidiaries they
were unable to obtain sufficient appropriate audit evidence on the
following areas:
- the discontinued operations in the Consolidated Statement of
Comprehensive Income relating to M&G Olypmic Products
Limited:
- the cut off for the revenue of IVI Metallics Limited: the
sales cut off sample for which we did not receive information was
GBP89,000, including post year end sales of GBP59,000
- we were appointed subsequent to the year end and were not able
to observe the counting of the physical inventory and were unable
to verify by alternative means the inventory quantities held at the
year end.
The auditors referred to going concern as a key audit matter.
They drew attention to note 3 in the financial statements, which
shows conditions which indicate that a material uncertainty exists
that may cast significant doubt on the company's ability to
continue as a going concern. Their opinion was not modified in
respect of this matter.
The financial statements have been prepared on the historical
cost basis, except for the certain financial instruments that are
measured at fair values at the end of each reporting period, as
explained in the accounting policies below. Historical cost is
generally based on the fair value of the consideration given in
exchange for goods and services.
The principal accounting policies adopted are set out below.
Significant accounting policies
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up for the period ended 31 March 2022.
Control is achieved when the Company has the power:
-- over the investee;
-- is exposed, or has rights, to variable returns from its
involvement with the investee; and
-- has the ability to use its power to affects its returns.
The Company reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains
control over the subsidiary and ceases when the Company loses
control of the subsidiary. Specifically, the results of
subsidiaries acquired or disposed of during the year are included
in profit or loss from the date the Company gains control until the
date when the Company ceases to control the subsidiary.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses
and cash flows relating to transactions between the members of the
Group are eliminated on consolidation.
Business combinations
Acquisitions of businesses are accounted for using the
acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the
sum of the acquisition-date fair values of assets transferred by
the Group, liabilities incurred by the Group to the former owners
of the acquiree and the equity interest issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are
recognised in profit or loss as incurred. At the acquisition date,
the identifiable assets acquired and the liabilities assumed are
recognised at their fair value at the acquisition date, except that
deferred tax assets or liabilities and assets or liabilities
related to employee benefit arrangements are recognised and
measured in accordance with IAS 12 and IAS 19 respectively.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer's
previously held equity interest in the acquiree (if any) over the
net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed.
Goodwill
Goodwill is initially recognised and measured as set out
above.
Goodwill is not amortised but is reviewed for impairment at
least annually. For the purpose of impairment testing, goodwill is
allocated to each of the Group's cash-generating units (or groups
of cash-generating units) expected to benefit from the synergies of
the combination. Cash-generating units to which goodwill has been
allocated are tested for impairment annually, or more frequently
when there is an indication that the unit may be impaired. If the
recoverable amount of the cash-generating unit is less than the
carrying amount of the unit, the impairment loss is allocated first
to reduce the carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro-rata on the basis of
the carrying amount of each asset in the unit. An impairment loss
recognised for goodwill is not reversed in a subsequent period.
On disposal of a cash-generating unit, the attributable amount
of goodwill is included in the determination of the profit or loss
on disposal.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable for goods and services provided in the
normal course of business, net of discounts, value added taxes and
other sales related taxes.
Performance obligations and timing of revenue recognition:
All of the Group's revenue is derived from selling goods with
revenue recognised at a point in time when control of the goods has
transferred to the customer. This is generally when the goods are
collected or delivered to the customer, or in the case of
fabrication project work, when the project has been accepted by the
customer. There is limited judgement needed in identifying the
point control passes: once physical delivery of the products to the
agreed location has occurred, the Group no longer has physical
possession, usually it will have a present right to payment.
Consideration is received in accordance with agreed terms of
sale.
Determining the contract price:
The Group's revenue is derived from:
a) sale of goods with fixed price lists and therefore the amount
of revenue to be earned from each transaction is determined by
reference to those fixed prices; or
b) individual identifiable contracts, where the price is defined
Allocating amounts to performance obligations:
For most sales, there is a fixed unit price for each product
sold. Therefore, there is no judgement involved in allocating the
price to each unit ordered.
There are no long-term or service contracts in place. Sales
commissions are expensed as incurred. No practical expedients are
used.
Current and deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off.
2. Critical accounting judgements and key sources of estimation uncertainty
In applying the Group's accounting policies, the directors are
required to make judgements (other than those involving
estimations) that have a significant impact on the amounts
recognised and to make estimates and assumptions about the carrying
amounts of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions are
based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
Going concern
The directors are confident that the existing financing set out
in note 6 will remain available to the Group and, as demonstrated
by equity raised since the period end, that additional sources of
finance will be available. The directors, with the operating
initiatives already in place and funding options available, are
confident that the Group will achieve its cash flow forecasts.
Therefore, the directors have prepared the financial statements on
a going concern basis. These financial statements do not include
the adjustments that would result if the Group were unable to
continue as a going concern.
3. Discontinued activities
6 Months to 6 Months to Year ended
30 September 30 September 31March
2022 2021 2022
GBP'000 GBP'000 GBP'000
Revenue 926 4,399 5,049
Cost of sales (825) (3,456) (4,061)
-------------- -------------- -----------
Gross margin 101 943 988
Operating expenses (234) (1,649) (1,700)
Other Income 39 41 20
Impairment charge - - (2,189)
Finance costs (49) (67) (113)
-------------- -------------- -----------
Loss before tax on discontinued activities (143) (731) (2,994)
Tax credit on discontinued activities - - 68
Profit on disposal of discontinued
activities 1,651 - 654
Profit / (loss) on discontinued activities 1,508 (731) (2,272)
============== ============== ===========
The Company disposed of M&G Olympic products Limited on 30
March 2022, Orca Doors Limited on 18 July 2022, IVI Metallics
Limited on 31 July 2022 and Time Rainham Limited on 15 November
2022.
4. Earnings per share
The calculation of the basic earnings 9 Months to 9 Months to Year ended
loss per share is based on the following 31 December 31 December 31March
data 2022 2021 2022
GBP'000 GBP'000 GBP'000
Loss for the period from continuing
activities (683) (1,049) (1,415)
------------- --------------- ---------------
Earnings / (loss) for the period for
the purposes of basic loss per share
attributable to equity holders of
the Company 825 (1,780) (3,687)
------------- --------------- ---------------
Weighted average number of Ordinary
Shares for the purposes of basic loss
per share 569,089,870 321,836,699 346,819,139
Basic loss per share (pence) from
continuing activities (0.01p) (0.33p) (0.4p)
============= =============== ===============
Earnings / (loss) per share (pence)
attributable to equity holders of
the Company 0.14p (0.55p) (1.06p)
============= =============== ===============
The Company has issued options over ordinary shares which could
potentially dilute basic earnings per share in the future. There is
no difference between basic loss per share and diluted loss per
share as the potential ordinary shares are anti-dilutive.
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