Autins Group Regulatory News (AUTG)

4 March 2024

Autins Group plc

(the "Company" or the "Group")

Full Year Results

Autins Group plc (AIM: AUTG), the UK and European manufacturer of the patented Neptune melt-blown material and specialist in the design, manufacture and supply of acoustic and thermal insulation solutions, announces its results for the financial year ended 30 September 2023.

Financial Summary

· Revenue increased by 20.2% to £22.7 million (FY22: £18.9 million)

· Gross profit increased by 57.8% to £6.7 million (FY22: £4.2 million)

· Gross margin increased by 7.1% to 29.5% (FY22: 22.4%)

· EBITDA increased by £2.3m to £1.2 million (FY22: loss of £1.1 million)

· Operating loss decreased to £0.7 million (FY22: loss of £3.0 million)

· Loss after tax decreased to £0.9 million (FY22: loss of £3.3 million)

· Loss per share decreased to 1.67p (FY22: loss of 6.34p)

· Net cash inflow from operating activities increased to £2.1 million (FY22: £0.5 million net outflow)

· Net debt[1] decreased to £1.6 million (FY22: £2.0 million)

· Cash and cash equivalents increased to £2.1 million (FY22: £1.8 million)

· Group cash headroom[2] increased to £4.1m (FY22: £3.5m)

Operational Highlights

· 11 new customer wins; 6 in the UK and Sweden and 5 in Germany, including supply into the all-electric Nissan Leaf, various JLR vehicles, Fisker Ocean, Lamborghini and several tiers

· Successfully launched our new 100% recyclable Neptune-R material, which has already generated strong customer interest

· Achieved an 88% reduction in carbon emissions across the Group by converting to renewable energy sources and improving efficiencies in the plants, surpassing the 84% target

· Continued improvement in cost control as a result of staff restructuring actions and labour productivity gains

· Significantly reduced staff churn to below 10%, fostering stability and a highly engaged workforce

· Customer contracts and price and material improvements have concluded and are having positive effects

· Exciting product development pipeline and recent product launches signalling future growth opportunities

Outlook

· The Company has announced today the appointment of Andrew ('Andy') Bloomer as Chief Executive Officer with effect from 22 April 2024. Gareth Kaminski-Cook will step down from the Board and his role of CEO at the same time

· The Company has seen further growth in sales and EBITDA in Q1 FY24 and expects its operating performance to continue to stabilise in FY24 despite the risk of some fluctuations in model level volumes

· The Company intends to invest in its sales, marketing and R&D capabilities during FY24, to further embed the Company into its customers' supply chains, and to ensure it is well positioned to take advantage of the improving automotive backdrop

· Post year end, we have obtained further banking support from both of our major lenders, with revised covenants and repayment profiles agreed with both

Gareth Kaminski-Cook, Chief Executive, said:

"The Group has navigated its way through a turbulent few years and is now on an upward trajectory, delivering a stronger financial performance during 2023. With an overall improvement in the automotive market, we will continue to focus on developing our commercial capability to deliver sales growth and maximise the opportunity we have with our Neptune-R material, especially in electric vehicles. I am delighted to be handing over to Andy Bloomer who brings a very deep knowledge of the automotive industry and has a very strong commercial background. It has been a great honour to lead the Group over the past 5 years and I am confident that Andy will successfully deliver Autins' next stage of sales led growth"

For further information please contact:

About Autins

Autins is a UK and continental Europe based industrial materials technology business that specialises in the design, manufacture, and supply of acoustic and thermal products. Its key markets are automotive, flooring, office furniture and commercial vehicles where it supplies products and services to more than 160 customer locations across Europe.

Autins is the UK and European manufacturer of the patented Neptune melt-blown material and specialises in the design, manufacture, and supply of acoustic and thermal insulation solutions.

Chairmans Statement

Overview

FY23 has been a transitional year in which the Group has moved from a significant EBITDA loss to a positive EBITDA position. We have improved our commercial terms with our customers and focused on improving our operating performance, with a particular focus on better sourcing of raw materials and improved labour efficiencies in our production activities.

The overall trading environment is increasingly positive with European OEMs reporting increased production of vehicles and a reduction in supply chain disruptions. This is much welcomed after the key component shortages and uncertainty of recent years. It provides a much more stable footing for the Group to invest and grow. We benefitted from 11 new customer wins during FY23.

Over the year, we have made notable progress in many areas; we have been able to invest in new machinery, resume capital repayments of our CBILS loan and change and expand the composition of our Board. Further, the Group has focused on measuring and improving its environmental impacts with some notable success.

Financial performance

Group sales in the second half of the year were £11.9m, up 26% on the equivalent prior year period (H2 22: £9.5m). Overall Group sales for FY23 increased by 20% to £22.7m (FY22: £18.9m).

Group automotive component sales grew by 31% in the year to £19.9m (FY22: £15.2m). It was pleasing to see this growth across all of our geographies with the UK up 26%, Sweden up 23% and Germany up 55% (assisted by a full year effect of prior year new business wins). However, negative sentiment in the flooring market in Germany continued, albeit we still saw overall sales growth in that region of 14% to £7.5m (FY22: £6.6m).

Gross margin recovered to 29.5% (FY22: 22.4%) due to a combination of better commercial terms with our customers and continued focus on manufacturing efficiencies.

The operating loss for the Group has reduced to £0.7m (FY22: loss of £3.0m).

Net debt (excluding IFRS 16 debt) decreased to £1.6m (FY22: £2.0m) and cash and cash equivalents increased to £2.1m (FY22: £1.8m). This is due to the business generating net operating cash of £2.1m (FY22: net operating cash loss of £0.5m) driven by the Group's improved operating performance and positive working capital management in the period.

We recommenced repayments of our CBILS loan in July 23 and, post year end, we have obtained further banking support from both of our major lenders, with revised covenants and repayment profiles agreed with both.

People

Our staff have yet again demonstrated their unwavering commitment and enthusiasm for the business. They have reacted well to the increased activity within the business and continue to challenge costs and strive for more efficiency. I would like to thank them all for their hard work during the year.

In May 2023, we appointed Andrew Burn to the Board as a Non-Executive Director to replace Neil MacDonald, who stepped down in June 2023. Furthermore, after the year end, we appointed Mark Taylor as a Non-Executive Director. Both Andrew and Mark bring significant new skills and experience to the Board which will strongly support the business in our strategic delivery.

We have also announced today the appointment of Andrew ('Andy') Bloomer as Chief Executive Officer with effect from 22 April 2024. Gareth Kaminski-Cook will step down from the Board and his role of CEO at the same time.

Andy brings extensive experience of the European automotive manufacturing industry, particularly with electric vehicles and specialist fibre applications, having most recently held the role of Sales & Marketing Director EMEA at London-listed Morgan Advanced Materials plc. Andy's very relevant industry experience and commercial focus will enable us to maximise the increasing opportunities that we are currently seeing in the automotive market and accelerate our growth.

I would like to thank Gareth personally and on behalf of the Board for his dedicated service over the past five years, resulting in the start of the recovery of the business over the past 12 months. We all wish Gareth well in the future.

Environmental, Social and Governance

Our commitment to lower the environmental impact of our products has continued in FY23. Our investment in R&D enabled us to launch our new recyclable Neptune-R material during the period. This has generated strong interest from our customers, where the material has already achieved the highest performance rating approval by one major OEM, and others have partnered with us to develop new thermal ducting products. We also believe that our products can support the thermal efficiency of the cabins of vehicles which would have a beneficial impact for electric vehicles in reducing power loss to heating of the cabin to the detriment of range.

We have dedicated more time to understanding our environmental impact as a business and considering how we can seek to continuously improve such impact going forward. We have reduced our carbon footprint significantly in the year by changing our energy sourcing from 27% to 100% renewable sources in both the UK and Germany. We will continue to focus on reducing overall energy used through on-going operational efficiency improvements.

During the year, through our operational improvement programme, we were successful in recalibrating our Neptune production line to reduce off-cut waste. This contributed to a 64% reduction in waste year on year. We will continue to challenge ourselves to reduce our environmental impact in all aspects of our operations.

The Board remains committed to robust corporate governance and risk management to ensure the delivery of our strategic ambitions and the financial health of the Group. We apply the Quoted Companies Alliance Corporate Governance Code (the "QCA Code"). Since November 2023, the Board has increased to three independent non-executive directors in line with QCA Code guidelines.

Outlook

The automotive market appears to be stabilising after a number of years of turbulence and uncertainty. This should support the Group in delivering further growth in sales and profitability, a trend that has continued into Q1 FY24. However, we anticipate that profitability in H2 FY24 will be affected by plans to invest in sales, marketing and R&D, together with meeting statutory increases in salary costs.

Our focus now is to develop our commercial capability to deliver sales growth and embed Neptune-R material with our customer base, especially in electric vehicles. We will seek to leverage our technical capabilities to engineer innovative solutions for our customers and embed ourselves further into their supply chain. We will also continue to invest in new product development.

Overall, the Board believes that the Group will continue to stabilise its operating performance in FY24, despite the risk of some fluctuations in model level volumes. However, the increasing level of opportunities that we are seeing in the automotive market provide optimism for future sales growth.

Adam Attwood

Chairman

Chief Executive Officer's review

Automotive sales growth, margin recovery and new sustainable materials

The Group has delivered a much-improved financial performance this year and continued to build its credentials as an agile engineering problem solver that specialises in providing innovative thermal and acoustic solutions for electric vehicles using sustainable materials.

With great patience and support from our shareholders, outstanding cooperation and understanding of our customers and exceptional commitment and hard work from the Autins team, we have transitioned from survival to growth, and this has flowed through to an EBITDA improvement of £2.3m in the year.

Thermal and acoustic solutions that contribute to a quieter, cleaner and more energy-efficient world.

We are acoustic and thermal specialists and apply our in-house materials expertise to manufacture products that solve challenging engineering problems, primarily for the automotive, commercial vehicle and flooring sectors.

We manufacture in the UK, Germany and Sweden and have world-class quality and performance metrics, making us a truly trusted, local European partner.

We have our own patented NeptuneTM technology which is manufactured in our UK facilities and provides a real point of difference, as it is superior to all competitor materials in terms of reducing thermal losses and acoustic noise, whilst boasting leading levels of recycled material content and recyclability.

A year of turnaround

I am pleased to report that the improvements reported at the half year continued to gain momentum as the full impact of price increases, cost savings and better volumes further improved revenue, margins and profit. This resulted in revenue growing by £3.8m, or 20.2% margin recovery of 7.1% to 29.5% and a £2.3m year on year improvement in EBITDA.

UK and Swedish automotive revenue grew 26% and 23% respectively and we were delighted to see our German automotive sales grow by 55% as project wins, primarily with Neptune for EVs, began production. The flooring market, however, remains depressed as European construction was negatively impacted by the tough economic background, which restricted the overall growth in Germany to 14%.

Our Neptune product range had another strong year as sales grew 35% and is a key factor for winning new business. In the year we won 11 new customers, 6 in the UK and Sweden and 5 in Germany, including to supply into the all-electric Nissan Leaf, various JLR vehicles, Fisker Ocean, Lamborghini and a number of tiers. The launch of our 100% recyclable Neptune-R is creating excitement in the customer base, as it satisfies the strong desire by customers to move to ever more environmentally friendly solutions. VW have approved it at a Class 1 acoustic level.

A value proposition built around strong ESG credentials

Customers increasingly want to source from companies genuinely committed to providing product solutions with the best environmental credentials. New European standards are being introduced requiring minimum recycled content in materials used and minimum recyclable content of the whole vehicle. This is why we have developed Neptune-R and SilentShell, both single material products that can be recycled, and Neptune Green which has a higher recycled content. We are also maximising the recycled content within all our products. The innovation strategy is prioritising thermal and acoustic solutions for electric vehicles (EVs) made from materials with lower impact on the environment.

During the year we have worked with customers to reduce the thermal losses in their cars. In one case the customer had an urgent issue where the cabins were overheating - the cool air in the HVAC ducting was leaking out before it got to the cabin. Autins was drafted in and within 6 weeks had designed and moved to full production of an engineered solution that not only made the cabin comfortable but also drew less energy from the battery and extended the vehicle range. We are now partnering on several strategic follow-up thermal projects for EVs to solve similar issues and also reduce the number of materials being used, the process steps and the carbon footprint.

In last year's report, I stated a target to reduce our carbon emissions across the Group by 84%. During the period, we managed to achieve a reduction of 88% across the Group by converting to renewable energy sources and improving efficiencies in the plants, particularly on the Neptune line in Tamworth, where we have introduced a "new to the world" in-line quality scanner. This gives us real-time quality control on every part of the material produced, enabling us to reduce scrap and waste and reduce energy used, whilst improving the customer experience. In the UK we also managed to reduce water usage by another 21%, by creating a closed-loop system, and overall waste was reduced by 38%.

I also stated that we needed to reduce the churn of staff from a post-Covid high of above 30% to below 10%. Through continuous engagement with our staff and a number of creative initiatives including the use of banked hours, increased rates for overtime work and efficiency bonus schemes, we have met that target and created a stable environment where the workforce and staff alike are again highly engaged, collaborative and motivated.

Transitioning to agile Acoustic and Thermal NVH engineered solutions

We continue to focus on the future and growth. We know that we are price competitive and have very strong and trusted relationships with all of our customers, because of our culture and our quality and service performance. We do not let customers down and we communicate proactively.

We are now at a point where we need to start investing carefully so that we capture the available growth. We purchased a cut and seal machine for Germany so that we can keep up with demand from VW and meet the demand from new customer Fisker, which began production in April 2023.

Demand for NVH continues to grow as OEMs seek more comfort, but now they also need to reduce the thermal losses to protect the battery range in their EVs and they need to do this with sustainable insulation materials. Autins is poised to help our customers increase their vehicle range and increase acoustic comfort with environmentally friendly solutions.

The strategy has therefore shifted to increase the total number of enquiries that come into the business and the amount of time our commercial team can spend on proactively opening up new relationships and new customers.

We have recently launched new products, but we also have a very exciting product development pipeline coming through. These projects need pushing forward, so we have appointed a Thermal and Acoustic Technical lead to accelerate them.

We are also rolling out a CRM system to increase the efficiency and transparency of our commercial activities and to create more pull-through from our customer and prospect base, by running marketing campaigns. This will be supported by dedicated outsourced marketing support.

Our people have again been fantastic. Their commitment and resilience during the last couple of years has been inspiring and I would like to personally thank them for all their hard work and positive energy.

Much has been done, but there is much more to do. We will continue to manage our costs with prudence and protect our margins, but growth is again our number one priority.

Gareth Kaminski-CookChief Executive Officer

Financial review

Repositioning, Restructuring and Reaching for Gains

Significant financial performance improvement achieved in FY23 over FY22:

· Revenue increased by 20.2% to £22.7m

· Gross profit increased to £6.7m from £4.2m

· Gross margins recovered from 22.4% to 29.5%

· EBITDA improved by £2.3m to £1.2m

· Cashflow from operating activities significantly improved to £2.1m

· Operating working capital improved by £0.8m

· Cash and equivalents increased to £2.1m from £1.8m

· CBIL loan repayments were recommenced in July 2023

Key actions taken to reposition the business:

· New contracts were won which have growth potential for 2024 and beyond

· Contractual pricing and margin improvements achieved

· Restructuring and labour productivity gains continued to offset labour rate increases

· Materials projects for both cost and efficiency were instrumental to gross profit improvement

· Utilities costs were hedged in April 2022, helping to contain subsequent global rate increases

· In isolation, the completed actions had an annualised profitability run rate improvement that was greater than £2.5m

· Investment spend continued during the year, including new equipment and premises being acquired in Germany.

FY2023 Performance Overview

A number of planned repositioning actions were taken during the year, which improved the financial performance of the Group. Significant customer contract and price improvements were largely concluded during H1, albeit some further improvements did continue into H2. Materials improvement projects were mostly implemented during H1 and these had full impact in H2.

Staff restructuring actions were initiated in October 2022, and these started to deliver benefits from December 2022 onwards. Our staff's response to this process was excellent, and all worked co-operatively with us throughout. Subsequently they accepted targets to improve productivity, adopted multi-skilling and simultaneously embraced a flexible two-way banked hours and enhanced overtime regime, which enabled them to improve their personal earnings, whilst assisting smooth production for the Group and improved cost control.

New waste management and recycling initiatives also assisted profitability and reduced our carbon footprint. Utilities costs, driven by macroeconomic circumstances, increased year on year for the Group by c.£0.5m, albeit the impact was contained through forward contract arrangements. Ultimately, these increases were more than offset by the other efficiency actions noted above. A decision was also taken to move towards renewable energy sources even though there were some adverse short term cost implications of this.

Overheads were largely consistent year on year with planned improvements offsetting general inflationary factors. In Germany, we invested in a further storage location, which added to overhead costs and also purchased new critical capital equipment. This was to help accommodate volume recovery for their key customer and growth in other automotive contracts, whilst simultaneously improving efficiency and capacity.

In summary, in FY23 the Group improved revenues, margins and costs resulting in a £2.3m EBITDA increase over the prior year. This, coupled with strong working capital management, improved Cashflow from operating activities to £2.1m. Enhanced backdated R&D cash tax credits of £0.3m were also received, and disposal of our JV share to our JV partner, Indica Industries, for £0.3m immediately prior to the year-end also realised a further gain of £0.2m. All actions combined with improved trading, meant that, as at 30 September 2023, cash and equivalents had improved by £0.3m and net debt, excluding IFRS16 liabilities, by £0.4m, as compared to the prior year, with H2 performance being markedly stronger than H1.

Revenues and Margins

Revenues increased significantly across all Group companies in FY23. Germany based automotive OEMs experienced solid volume recovery, which was mirrored in their purchases from Autins GmbH. However, flooring sales in Germany did decline in line with household economic conditions. Recovery in the UK was much more muted, and H1 actually experienced some volume reduction from extended semi-conductor and other supply chain disruption, which then eased in H2. The UK business won a significant new contract that commenced in July 2023, which added to H2 performance and will have a revenue impact in excess of £1m in FY24. In Sweden, revenues increased by 23%, mainly reflecting volume recovery as well as some small new contract wins.

Neptune sales continued to grow in both absolute value and as a proportion of overall Group revenue. This included new pioneering BEV range improving thermal applications, in which Neptune was technically proven to be the class leading material. Neptune growth usually improves overall Group margin as our internal fixed cost absorption also increases, as compared with fixed margins on bought in materials.

Group gross margins improved by 7.1%. Most of this improvement came from customer price and contract improvements and the impact of new contract wins. The remainder of the improvement primarily derived from materials projects and labour restructuring. Currency movements also assisted recovery in H2 as US$ denominated materials purchases, that were considerably impacted with weak GBP against US$ in Autumn 2022, then steadily improved as GBP recovered back towards US$1.30. Utilities cost increases had an impact as described above.

From a country perspective gross margins recovered in the UK by 11.8%, remained consistent in Sweden, and reduced in Germany by 2.3%, where materials costs and operational challenges restricted some of the expected recovery. Gross margin recovery is, of course, pivotal in repositioning the trading position of the Group for profitable future growth, and further actions are ongoing to assist with this.

Other operating costs and EBITDA

In the UK the national minimum wage increased to £10.42 from £9.50 in April 2023, a 9.7% increase. In line with this, we increased all our UK production hourly pay scales. Multi-skilling, productivity and other progressive performance criteria allow our staff to earn well above the minimum wage rate, and our flexible overtime and banked hours arrangements help give staff some control over total earnings and work life balance. This in turn improves production flows that optimise total labour and other variable costs, which improve profitability. Staff retention was also strong, and allowing for retirees and redundancies, was measured above 92% for the year.

Transport costs across the Group also improved, driven by rate negotiations with suppliers and improved planning and logistics, coupled with smoother schedule requirements from customers. Conversely, there were general inflationary factors in many other cost categories, the most notable being energy as described above. The Group also incurred some non-repeating expenditure and one significant key customer bad debt. The total cost of these items was £0.25m, charged in Administrative expenses. Combined Distribution and Administrative expenses were £7.4m, compared with £7.2m in the prior year. Again, these increases were more than offset by other actions and cost control measures already described resulting in EBITDA improving by £2.3m, as noted above.

H2 EBITDA at £0.81m was also significantly ahead of H1 EBITDA of £0.36m. H2 Cashflow from operating activities was £1.71m, being significantly ahead of H1 at £0.35m. This validates the impact of the profit improvement actions and helps demonstrate the performance run rate that we are building from into FY24.

Loss before tax

The total depreciation and amortisation charge for the year was consistent with the prior year at £1.9m. The finance expense reduced slightly to £0.5m (FY22 £0.54m) as some capital repayments were made on fixed rate borrowings. There was a £0.2m profit on disposal from our JV share to our JV partner Indica industries. Existing customer contract product supply was secured with a simultaneous new exclusive agreement signed with Indica UK.

Currency

The Group's overseas operations and certain key raw material suppliers require the Group to trade in currencies other than Sterling, its base currency. During the year, operational transactions were conducted in US Dollar, Swedish Krona and Euro. Certain key raw materials for production are currently imported from South Korea with transactions conducted in US Dollars. The Group has taken steps to mitigate overall sourcing and currency risks by establishing alternative purchase sources which can be transacted in alternative currencies.

With Euro revenues and Neptune sales both continuing to grow, the Group continues to benefit from natural hedging, arising from its structure and trading balances, which means that the Group's results in both FY23 and FY22 have only been marginally impacted as a result of currency translations. In H2 the Group has made use of a new forward currency buying facility to partially hedge currency exposure for between 6-12 months on a rolling basis. Formal hedge accounting has not been adopted.

Borrowing and net finance expense

Total borrowings for the Group reduced slightly to £3.7m (FY22 £3.8m), with CBIL loan repayments recommencing in July 2023, whilst HP liabilities slightly increased following the purchase of new plant and equipment in Germany in H2. The UK Invoice Finance facility remained entirely undrawn at the year end. All term loans have fixed interest rates, and the slight reduction in the finance expense is a consequence of borrowing reduction following repayments made. As noted above, cash and cash equivalents increased year on year and overall cash headroom remains strong. This assists our ability to make significant capital repayments for both the CBIL and MEIF term loans in the coming year. The Group has agreed a revised repayment profile for the MEIF term loan, which requires full settlement by 31 December 2024. The lender has also waived covenants indefinitely. Payments for the MEIF loan had previously been paused, and repayment is subject to compliance with revised CBIL loan covenants, recently agreed with HSBC to facilitate this.

The Board continues to review the Group's banking and funding arrangements with a view to ensuring that they remain appropriate for its planned growth.

Cash, working capital and net debt

The Group ended the year with an improved net debt position of £1.6m excluding IFRS16 calculated lease liabilities (FY22: £2.0m).

The Group has continued to optimise working capital during the year. Special focus remains on timely collection of trade debtors and timely payment of trade creditors. Active customer credit terms management also released in excess of £0.4m of cash across the Group. Far East purchases are obtained on open credit terms from the respective suppliers. The Group continues to hold c.£0.3m of strategic buffer stocks, albeit these have reduced since the prior year as supply chain issues eased. In total, operating working capital improved by £0.8m across the Group, despite increasing sales.

Taxation

The effective tax rate in the year was below that expected based on current UK corporation tax levels. Given the quantum of losses compared to expected profitability in the next two years, the Group has not recognised the majority of current year losses as a deferred tax asset.

The Group's technical and R&D teams have, as in prior years, continued to enhance materials applications, improve processes and develop new products. The Group strategy remains to utilise losses to obtain actual R&D tax credit cash refunds to maximise liquidity. An R&D tax credit claim was submitted for FY22 in September 2023 and £0.1m of cash has been received subsequent to the FY23 year-end (FY22: £0.1m cash received).

The Group's German subsidiary has largely utilised its historical tax losses, which may result in a degree of tax at a higher rate on future profits in Germany. Brought forward taxable losses are available in Sweden that will, in the short term, at least partially offset their expected trading profits. Transfer pricing principles are actively considered and managed across the Group, which helps to optimise the combined tax position.

Earnings per share and Dividends

Loss per share was 1.67 pence (FY22: Loss per share 6.34 pence) reflecting the reduced loss in the year. The weighted average number of shares was 54,600,984 in the year (FY22: 51,683,793). The Board are not proposing a final dividend for the current year (FY22: £nil) and no interim dividend was paid (FY22: £nil).

Going concern

The financial statements, based on current and forecast trading, the annual cash flow forecasts, and the available sources of finance, have been prepared on the going concern basis, further details of which are provided in the basis of preparation of financial statements note.

Kamran Munir

Chief Financial Officer

Consolidated income statement

All amounts relate to continuing operations.

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity

For the year ended 30 September 2023

Consolidated statement of cash flows

For the year ended 30 September 2023

Reconciliation of movements in net cash/financing liabilities

Material non cash transactions

Financing liabilities include lease liabilities, primarily in respect of property leases, following the adoption of IFRS 16 from 1 October 2019. Additions of £610,000 net of foreign exchange movements of £42,000 are shown in non-cash movements together with financing charges of £265,000 (FY22: £534,000 of additions net of foreign exchange movements of £30,000 together with financing charges of £299,000).

Basis of preparation of financial statements

While the financial information included in this annual financial results announcement has been prepared in accordance with the recognition and measurement principles of International Accounting Standards in conformity with the requirements of the Companies Act 2006 and UK adopted IFRSs., this announcement does not contain sufficient information to comply therewith.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 September 2023 or 2022 but is derived from those accounts. Statutory accounts for the year ended 30 September 2022 have been delivered to the Registrar of Companies and those for the year ended 30 September 2023 will be delivered following the Company's annual general meeting.

The auditors have reported on those accounts; their reports were unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports.

Their reports for the year end 30 September 2023 and 30 September 2022 did not contain statements under s498 (2) or (3) of the Companies Act 2006.

The consolidated financial statements are drawn up in sterling, the functional currency of Autins Group plc. The level of rounding for the financial statements is the nearest thousand pounds.

Going Concern

The Directors have concluded that, based on current and forecast trading, the annual cash flow forecasts, and the available sources of finance, that it is appropriate to prepare these financial statements on the going concern basis.

The Directors have prepared trading and cash flow forecasts through to 30 September 2025. The forecasts incorporate the actual trading and cash flow performance through to 31 January 2024, which show an improved position compared to the same period in the prior year.

The trading forecasts take into consideration:

· the current and expected demand schedules from the Group's key automotive customers, changes in expected demand for flooring products in Germany and the levels of enquiries for new business;

· the impact of current and future expected demand levels for new vehicles, the migration to EV's and publicly available forward looking market information on market sizes and dynamics; and

· the current cost structure of the Group and an allowance for known increases, for example in relation to increases in the minimum wage from April 2024, and various projects to improve efficiency in the production and procurement processes.

The key sensitivities in the trading forecasts are automotive revenue levels, end market vehicle sales mix and the timing of orders placed by customers. These sensitivities have been factored into the forecasts.

The cash flow forecasts are derived from the trading forecasts and include the repayment of loans in accordance with the agreements with the lenders, further details of which are provided below. The cash flow forecasts also assume that working capital is managed in line with the commercial agreements and provide a contingency.

The facilities available to the Group comprise a UK invoice finance facility of up to £3.5 million and combined overdraft facilities in Germany and Sweden of £0.2 million, none of which are currently drawn. As at 26 February 2024, shortly before the reporting date, the cash headroom, including the undrawn facilities is £3.7 million (30 September 2023: £4.1 million). The minimum cash headroom, comprising cash at bank and available facilities, in the forecasts for a period of 12 months from the date of signing these financial statements is £1.0 million in March 2025, following the full repayment of the MEIF term loan.

As at 30 September 2023, the Group had:

· a UK CBILS loan of £1.7 million;

· a MEIF loan of £1.5 million; and

· a German Government loan of £0.2 million.

The UK CBILS loan is repayable in quarterly instalments of £146,154 through to 2026. A revised facility agreement was signed in relation to this loan on 29 February 2024 which included covenants in relation to minimum EBITDA levels, minimum levels of cash at bank plus available facilities (liquidity) and maximum net leverage (total debt, excluding IFRS 16 liabilities, as a multiple of EBITDA), which are measured quarterly and minimum debt service (EBITDA as a multiple of debt service costs, excluding the IFRS 16 debt service cost and the MEIF term loan repayment), which is measured annually. The forecasts demonstrate that in the period of 12 months from signing these financial statements the covenants are fully complied with.

A revised facility agreement was also signed on 29 February 2024 in relation to the MEIF loan, which schedules full repayment of the loan by 31 December 2024. This facility does not include any covenants.

The German Government loan is repayable in quarterly instalments of £8,000 through to 2030.

Changes in accounting policies

These financial statements have been prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 for periods beginning on or after 1 October 2022 with no new standards adopted in these financial statements.

New accounting standards applicable to future periods

There are no new standards, interpretations and amendments which are not yet effective in these financial statements, expected to have a material effect on the Group's future financial statements.

1. Revenue and segmental information

Revenue analysis

Segmental information

The Group currently has one main reportable segment in each year, namely Automotive (NVH) which involves provision of insulation materials to reduce noise, vibration and harshness to automotive manufacturing. Turnover and operating profit are disclosed for other segments in aggregate, mainly flooring, as they individually do not have a significant impact on the Group result. These segments have no material identifiable assets or liabilities.

Factors that management used to identify the Group's reportable segments

The Group's reportable segments are strategic business units that offer different products and services.

Measurement of operating segment profit or loss

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

The Group evaluates performance on the basis of operating profit/(loss). Automotive remained the only significant segment in the year although the German subsidiary has developed and maintained acoustic flooring sales to offset some of the impact of the depressed automotive market.

The Group's non-automotive revenues, mainly acoustic flooring, is included within the others segment.

Segmental analysis for the year ended 30 September 2023

Segmental analysis for the year ended 30 September 2022

Revenues from one UK customer in FY23 total £7,658,000 and £3,800,000 of revenue arose from two other European customers (FY22: one customer £6,673,000 and £2,287,000 of revenue arose from another European customer). This largest customer purchases goods from Autins Limited in the United Kingdom and there are no other customers which account for more than 10% of total revenue.

External revenues by location of customers

The material non-current assets outside of the United Kingdom are £892,000 (2022: £788,000) of fixed assets including right-of-use assets and £488,000 (FY22: £519,000) of goodwill in respect of the Swedish subsidiary, together with £564,000 of fixed assets (FY22: £264,000) in Germany. £268,000 (FY22: £491,000) of cash balances are held in Germany with the cash partly utilised to repay intercompany debt owed to a UK group company.

2. Operating Loss

The operating loss is stated after charging/(crediting):

3. Finance expense

4. Earnings per share

Earnings per share have been calculated based on the share capital of Autins Group plc and the earnings of the Group for both years. There are options in place over nil (FY22: 2,523,648) shares that were anti-dilutive at the year-end but which may dilute future earnings per share.

5. Annual report and accounts

The annual report and accounts will be posted to shareholders shortly and will be available to members of the public at the Company's registered office at Central Point One, Central Park Drive, Rugby, CV23 0WE and on the Company's website www.autins.co.uk/investors.

6. Annual General Meeting

The Annual General Meeting of Autins Group plc will be held at the Company's main offices at Central Point One, Central Park Drive, Rugby, Warwickshire, CV23 0WE on Thursday 28 March 2024 commencing at 11.00am.