22 December 2023
Vulcan Industries plc
("Vulcan" or the "Company")
Interim Results for the 6 Months ended 30 September 2023
Vulcan Industries plc (AQSE: VULC) is pleased to announce its unaudited interim
results for the 6-month period ended 30 September 2023.
Principal activity
Vulcan seeks to acquire and consolidate industrial and renewable SMEs and
projects for value and to enhance performance in part through group synergies,
but primarily by unlocking growth which is not being achieved as a standalone
private company.
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. On 6 March 2023, the Company broadened its activities into the energy
sector with the acquisition of the entire share capital of Forepower Lincoln
(250) Limited ("FPL(250)"). FPL(250) is a 248 MW Battery Energy Storage System
("BESS") project, currently seeking formal planning consent.
During the period under review, early stage project planning was progressed, and
funding alternatives explored.
COVID-19 had a significant impact on the financial performance of the Group
since admission. The results for the years ended 31 March 2021 and 31 March
2022, reflected the impact of various lock downs and the subsequent challenging
market conditions. A strategic review, lead the board to conclude that, in order
to lay firm foundations for future growth, it was necessary to dispose of the
loss making businesses. M&G Olympic Products Limited was disposed of in March
2022 and both Orca Doors Limited ("Orca") and IVI Metallics Limited ("IVI") were
disposed of in July 2022. Time Rainham Limited ("TRR") was disposed of in
November 2022.
Consequently, the results for Orca, IVI and TRR are disclosed as discontinued
activities and the comparatives have been restated accordingly. The financial
results for the Group for the six months ending 30 September 2023, show a fall
in continuing revenue to £562,000 (2022: £695,000) and a fall in the continuing
loss before interest, tax, depreciation and amortisation to £178,000 (2022:
£215,000). After continuing depreciation and amortization of £19,000 (2022:
£21,000) and continuing finance costs of £178,000 (2022: £217,000), the Group is
reporting a reduced loss before taxation on continuing activities of £375,000
(2022: £453,000). The disposals of Orca, IVI and TRR generated a profit on
discontinued activities of £nil (2022: profit £1,177,000) after reporting a loss
after tax to the date of disposal of £nil (2022: £196,000). The reported loss
after tax for the Group is £375,000 (2022: Profit £724,000).
At 30 September 2023, the Group balance sheet shows net assets of £153,000
(2022: net liabilities £2,089,000).
Outlook
The disposals of the loss making legacy businesses of Orca, IVI and TRR during
the year ended 31 March 2023 added significant benefit to the Group balance
sheet and stemmed continued cash outflows. During the period, the Group has
continued to lay the foundations for its future development. The acquisition of
the FPL(250) project has broadened the sectors of Group activities. As announced
on 25 October 2023, the Company has disposed of 49.9% of its holding in FPL
(250) in order to fund the development of the project. Progress has been made in
the planning process and further announcements will be made once expected
milestones are achieved. The development phase of the project offers potential
to expand the fabrication activities of Aftech. In addition there is a strong
pipeline of further BESS and other opportunities which the Company will seek to
bring into the Group in due course.
Unaudited Consolidated
Statement of
Comprehensive Income
The comparatives have
been restated to
reflect discontinued
activities
6 Months to 6 Months to Year ended
30 September 2023 30 September 2022 31 March
2023
Note £'000 £'000 £'000
Continuing activities
Revenue 562 695 1,165
Cost of sales (308) (422) (674)
Gross profit 254 273 491
Operating expenses (415) (450) (849)
Other gains and losses (36) (59) (224)
Finance costs 3 (178) (217) (438)
Loss before tax (375) (453) (1,020)
Income tax - - 71
Loss for the period (375) (453) (949)
from continuing
activities
Discontinued
activities
Profit for the period 4 - 1,177 1,588
from discontinued
activities
(Loss) / profit for (375) 724 639
the period
attributable to the
owners of the Company
Other Comprehensive - - -
Income for the period
Total Comprehensive (375) 724 639
Income for the period
attributable to owners
of the Company
Earnings per share
- Basic and 5 (0.04p) (0.08p) (0.16p)
Diluted earnings per
share for loss from
continuing operations
attributable to the
owners of the Company
(pence)
- Basic and 5 (0.04p) 0.13p 0.11p
Diluted earnings per
share attributable to
the owners of the
Company (pence)
Unaudited
Consolidated
Statement of
Financial
Position
At At At
30 30 31
September September March
2023 2022
2023
Note £'000 £'000 £'000
Non-current
assets
Goodwill 718 945 718
Other 6 3,193 292 3,178
intangible
assets
Investments 500 500 500
Property, 127 156 131
plant and
equipment
Total non 4,538 1,893 4,527
-current
assets
Current
assets
Inventories 30 51 32
Trade and 521 731 511
other
receivables
Cash and bank 70 91 2
balances
Total current 621 873 545
assets
Total assets 5,159 2,766 5,072
Current
liabilities
Trade and (1,657) (1,451) (1,344)
other
payables
Borrowings 7 (995) (3,366) (3,187)
Total current (2,652) (4,817) (4,531)
liabilities
Non-current
liabilities
Borrowings 7 (2,329) - -
Deferred tax (25) (38) (31)
liabilities
Total non (2,354) (38) (31)
-current
liabilities
Total (5,006) (4,855) (4,562)
liabilities
Net assets / 153 (2,089) 510
(liabilities)
Equity
Share capital 8 350 234 348
Share premium 9,843 7,257 9,827
account
Shares to be - - -
issued
Retained (10,040) (9,580) (9,665)
earnings
Total equity 153 (2,089) 510
attributable
to the owners
of the
company
Unaudited Consolidated Share Shares to Share Retained Total
statement of changes in be issued Premium earnings Equity
equity Capital
£'000 £'000 £'000 £'000 £'000
At 1 April 2022 211 293 6,645 (10,304) (3,155)
Total Comprehensive income - - - 724 724
for the period
Transactions with -
shareholders
Issue of shares 23 (293) 612 - 342
Total transactions with 23 (293) 612 - 342
shareholders for the
period
At 30 September 2022 234 - 7,257 (9,580) (2,089)
Total Comprehensive income - - - (85) (85)
for the period
Transactions with
shareholders
Issue of shares 114 2,570 - 2,684
Shares to be issued - - - - -
Total transactions with 114 - 2,570 - 2,684
shareholders for the
period
At 31 March 2023 348 - 9,827 (9,665) 510
Total Comprehensive income - - - (375) (375)
for the period
Transactions with
shareholders
Issue of shares 2 - 16 - 18
Total transactions with 2 - 16 -
shareholders for the
period
At 30 September 2023 350 - 9,843 (10,040) 153
*
Unaudited Consolidated 6 Months to 30 6 Months to 30 Year Ended
Statement of Cash Flows September 2023 September 2022
31March
2023
£'000 £'000 £'000
Loss for the period from (375) (453) (949)
continuing activities
Adjustments for:
Finance costs 190 217 463
Depreciation of property, 4 11 29
plant and equipment
Depreciation of right of use - - -
assets
Amortisation of intangible 15 25 30
assets
Share based payment - 69 100
Operating cash flows before (166) (131) (327)
movements in working capital
Decrease / (increase) in 2 (34) (6)
inventories
Increase in trade and other (10) (260) (118)
receivables
Increase in trade and other 98 478 139
payables
Cash (used in) / from (76) 53 (312)
operating activities
Income tax credit received - - 28
Income tax paid - - (3)
Cash (used in) /from operating (76) 53 (287)
activities -continuing
Cash (used in) / from - 254 (278)
operating activities
-discontinued
Cash (used in) / from (76) 307 (565)
operating activities
Investing activities
Purchases of property, plant - (1) (2)
and equipment
Disposal of subsidiaries -net - - 731
debt retained
Net cash (used in) / from - (1) 729
investing activities -
continuing
Net cash (used in) / from - - -
investing activities -
discontinued
Net cash (used in) / from - (1) 729
investing activities
Financing activities
Interest paid (11) (205) (271)
Proceeds from loans and 150 - 70
borrowings
Repayment of borrowings (13) (74) (169)
Proceeds on issue of shares 18 275 258
Net cash from / (used in) 144 (4) (112)
financing activities
-continuing
Net cash used in financing - (280) (119)
activities-discontinued
Net cash from / (used in) 144 (284) (231)
financing activities
Net increase / (decrease) in 68 22 (67)
cash and cash equivalents
Cash and cash equivalents at 2 69 69
beginning of the period
Effect of foreign exchange - - -
rate changes
Cash and cash equivalents at 70 91 2
end of the period
Notes to the unaudited consolidated financial statements
for the 6-month period ended 30 September 2023
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 £'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 6 months
ended 30 September 2023, 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 2023
(available at www.vulcanplc.com). The Group does not anticipate any significant
change in these accounting policies for the year ended 31 March 2024.
This interim 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 2023 is based on the statutory
accounts for the year then ended. The Auditors reported on those accounts.
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 30 September 2023. 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 7 will
remain available to the Group and 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. Finance costs
6 Months to 30 6 Months to 30 Year ended
September 2023 September 2022
31March
2023
£'000 £'000 £'000
Interest receivable
Interest on quoted 12 12 25
bond
12 12 25
Interest payable
Interest on loans, 190 247 434
bank overdrafts and
leases
Loan arrangement fees - 18 68
and other finance
costs
190 265 502
Net finance costs 178 253 477
Of which relating to: £'000 £'000 £'000
Continuing activities 178 217 438
Discontinued - 36 39
activities
178 253 477
4. Discontinued activities
6 Months to 30 6 Months to 30 Year ended
September 2023 September 2022
31March
2023
£'000 £'000 £'000
Revenue - 926 943
Cost of sales - (825) (873)
Gross margin - 101 70
Operating expenses - (270) (280)
Other Income - 9 33
Finance costs - (36) (39)
Loss before tax on - (196) (216)
discontinued
activities
Tax credit on - -
discontinued
activities
Profit on disposal of - 1,372 1,804
discontinued
activities
Profit on discontinued - 1,177 1,588
activities
The Company disposed of Orca Doors Limited on 18 July 2022, IVI Metallics
Limited on 31 July 2023 and Time Rainham Limited on 8 November 2022.
5. Earnings per share
The 6 Months to 30 6 Months to 30 September 2022 Year ended
calculation September 2023
of the basic 31March
earnings
loss per 2023
share is
based on the
following
data
£'000 £'000 £'000
Loss for the (375) (453) (949)
period from
continuing
activities
Earnings / (375) 724 639
(loss) for
the period
for the
purposes of
basic loss
per share
attributable
to equity
holders of
the Company
Weighted 872,986,621 554,051,792 595,784,173
average
number of
Ordinary
Shares for
the purposes
of basic
loss per
share
Basic loss (0.04p) (0.08p) (0.16p)
per share
(pence) from
continuing
activities
Earnings / (0.04p) 0.13p 0.11p
(loss) per
share
(pence)
attributable
to equity
holders of
the Company
The Company has issued options and warrants 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.
6. Other intangible assets
BESS Identified Total
Project intangible
assets
Cost £'000 £'000
At 31 March 2022 - 1,200 1,200
On disposal of - (720) (720)
subsidiary
At 30 September - 480 480
2022
On acquisition of 274 - 274
subsidiary
Recognised on 2,600 - 2,600
acquisition
Additions 34 - 34
On disposal of - (180) (180)
subsidiary
At 31 March 2023 2,908 300 3,208
Additions 30 - 30
At 30 September 2,938 300 3,238
2023
Amortisation
At 31 March 2022 - 883 883
Charge for the - 25 25
period
Disposal (720) (720)
At 30 September - 188 188
2022
Charge for the - 15 15
period
Disposal - (173) (173)
At 31 March 2023 - 30 30
Charge for the - 15 15
period
At 30 September - 45 45
2023
Carrying value at 2,938 255 3,193
30 September 2023
Carrying value at 2,908 270 3,178
31 March 2023
Carrying value at - 292 292
30 September 2022
Identified intangible assets arising on acquisition comprise; marketing related
assets such as brands and domain names; customer related assets such as customer
relationships, lists and existing order books. These are amortised, depending
upon the nature of the asset and the business acquired over 1 to 10 years on a
straight-line basis.
BESS Project
£'000
Fair value on acquisition 2,874
Additions 34
At 31 March 2023 2,908
Additions 30
At 31 March 2023 2,938
Forepower Lincoln (250) Limited is a 248MW Battery Energy Storage System Project
("BESS") which was acquired on 6 March 2023. The value at 31 March 2023
represents the project costs incurred by FPL(250) together with a fair value
adjustment on acquisition of £2.6 million, being the consideration paid by the
company. The fair valuation adjustment reflects a discount from comparable
market values for similar projects to take into account the early stage of
development of the project. On 25 October 2023, the Company disposed of 49.9% of
its holding in FPL (250) in order to fund the development of the project and
value is expected to be generated as the project moves through the planning
process and obtains a firm connection date to the national grid. Further uplifts
in value are expected as project mile-stones are achieved.
7. Borrowings
At At At
30 September 2023 30 September 2022 31 March
2023
£'000 £'000 £'000
Non-current
liabilities
Secured
Convertible loan 475 - -
note
Other Loans 1,854 - -
2,329 - -
Current liabilities
Secured
Corona virus 700 703 700
business
interruption loan
Factoring facility 250 334 145
Convertible loan - 475
note
Other Loans 45 1,854 1854
Unsecured
Other Loans - 13
Convertible loan 475
note
995 3,366 3,187
Total Borrowings 3,324 3,366 3,187
The convertible loan note has a coupon of 5%. The lender has the right to
convert the outstanding principal into ordinary share of the Company at a price
of 1p per share. In the event that the lender does not exercise its conversion
rights by 30 June 2025, the loan shall become immediately repayable by the
Company.
Other loans falling due in more than one year of £1,854,000 (HY22 £1,854,000)
are secured by means of a debenture and chattels mortgage. The loans mature in
April and July 2025. The loans bear an interest rate of 18% per annum.
Following the disposal of IVI Metallics Limited and its subsequent
administration, pursuant to the cross guarantee, HSBC issued a final demand for
repayment for the outstanding principal under its CBIL. The Company is in
negotiations with the bank to reschedule the loan. Pending the outcome, the
outstanding capital is classified as falling due within one year.
The factoring facilities are secured on certain trade receivables. There is a
factoring charge of 1% of the Gross debt and a discount rate of 5% above bank
base rate on net advances. The agreement provides for 3 months' notice by either
party and certain minimum fee levels.
Other loans falling due in less than one year of £45,000 (HY22 £nil) are secured
by means of a debenture over the assets of Forepower Lincoln (250) Limited. The
Loan is interest free.
Reconciliation to cash flow statement
At 1 Drawn down Repaid At 30
April September
2023 2023
£'000 £'000 £'000 £'000
Secured borrowings
Other Loans 1,854 45 - 1,899
Convertible Loan Note 475 - - 475
CBIL 700 - - 700
Factoring facilities 145 105 - 250
3,174 150 - 3,324
Other loan 13 - (13) -
Total borrowings 3,187 150 (13) 3,324
8. Share capital
Number £'000
Issued and fully paid:
At 31 March 2022 526,334,602 218
Issued during the period 55,081,892 16
At 30 September 2022 581,416,494 234
Issued during the period 289,111,111 114
At 31 March 2023 870,527,605 348
Issued during the period 3,333,333 2
At 30 September 2023 873,860,938 350
9. Post balance sheet events
On 25 October 2023, the Company disposed of 49.9% of its holding in FPL (250) in
order to fund the development of the BESS project.
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