Half Yearly Report

RNS Number : 9621V

Goodwin PLC

19 December 2013

 



GOODWIN PLC

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the half year ended 31st October 2013

Chairman's Statement 

I am pleased to report that the pre-tax profits for the Group for the six month period ending 31st October 2013 were £12.3 million (2012: £10.4 million), an increase of 18% from a revenue of £71.3 million.

The Group order book remains healthy and represents an order back log on average of just over six months although this is not evenly spread amongst the 20 trading companies.  The continued excellent profitability achieved results from the dynamic performance of our employees and our companies being able to address the market needs.

The significant capital expenditure programme detailed in the year end accounts is progressing according to plan and should help the Group continue to grow in years to come be it by nature of additional trained skilled workers and managers, additional manufacturing facilities or additional products for our companies to make and sell.

The Company has since the year end secured an additional £8 million of committed bank facilities as, despite the cash generation we are planning over the next two years, the Board considered it a prudent policy to guarantee that our facilities would continue to be available to the Group should they be needed.

The Company's strategy focus and business as described on the investors section of the website www.goodwin.co.uk/2013/full-presentation continues to be based on maintaining an engineering commitment with investment criteria aimed at profitable, efficient, economic supply of technically advanced products to growth markets.

The challenge faced in nearly all our Group companies is to ensure we have in place enough competent trained people to cope with our growth and global activities. It is our team of people that is creating the success and growth and it remains a key corporate management activity to ensure that this demand is satisfied. We have many young people progressing within the Company and our investment in and further training of these people will determine the future. In the mean time, the Board wishes to thank all our employees for their unwavering loyalty, devotion and hard work.

J. W. Goodwin

Chairman

19th December 2013

Management report

The turnover for the first 6 months of this new financial year increased slightly by 4% but was some 10% behind the possibility based on work load due to delays on certain contracts resulting from changed order requirements and slow processing of documents for approval. This has had an unacceptable effect on the Group cash flow and management is seeking to redress this issue in the second half of the financial year. Management have also had to contend with the disruption caused by the significant construction and training programmes currently being undertaken.

The pre-tax profit has increased by 18% in the first half of the financial year and the current order backlog is sufficient for the activity level in the Group in the second half of the financial year to be similar to the first half. Goodwin International in particular out of the engineering companies again has performed exceptionally well and has continued to expand its manufacturing facilities to cope with the work load.

Financial Highlights	Unaudited Half Year to 31st October 2013	Unaudited Half Year to 31st October 2012	Audited Year Ended 30th April 2013
	£'m	£'m	£'m
Consolidated Results
Sales revenue	71.3	68.4	127.0
Operating profit	12.5	10.8	21.2
Profit before tax	12.3	10.4	20.3
Profit after tax	9.8	7.8	15.7
Capital Expenditure	8.3	4.2	9.4
Earnings per share (Basic and Diluted)	131.28p	105.74p	211.76p

Turnover

Sales revenue of £71.3 million for the half year represents a 4% increase over the £68.4 million achieved during the same period last year.

Profit Before Tax

Profit before tax for the six months of £12.3 million is up 18% from the £10.4 million achieved for the same six month period last year.

Risks and Uncertainties

The Group has in place internal control procedures which, in conjunction with its centralised management structure, identify and manage the key risks and uncertainties affecting the Group.

We would refer you to note 20 (page 35) of the Group annual accounts to 30th April 2013 which describes in detail the key risks and uncertainties affecting the business such as credit risk and foreign exchange risk. This position remains unchanged at the end of October 2013.

As we wrote in our half yearly report this time last year, our biggest risk / unknown is the relationship of the major currency pairs. The US Dollar at the moment seems to be firming up at a weaker position than of late, which will start to put pressure on margins when we are competing with suppliers in the USA or countries that have their currencies closely linked to the US Dollar. There also appears to be a similar weakness in the Euro with the exchange rate to the Pound Sterling often being around the 1.20 mark. The Japanese have also taken aggressive steps to weaken their currency which perversely may help us win more business in Japan as their main contractors  become more competitive when they are bidding internationally. Our global competitiveness should in part be protected by our overseas manufacturing and material sourcing activities, but the continued volatility of exchange rates remains a concern as it must be to all international trading companies.

Report on Expected Developments

This report describes the expected developments of the Group during the year ended 30th April 2014. The report may contain forward-looking 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 to future events or developments, whether as a result of new information, future events or otherwise, except to the extent legally required.

2014 Outlook

The order book is again at a new historical high for the Group providing opportunity for a similar pre-tax profit result in the second half of the financial year.

All three grant assisted projects are progressing well with the third group of 25 apprentices starting in February 2014. The major building programme on the site adjacent to the foundry will have its first phase completed on schedule by January 2014, as will the construction work at Goodwin International. The foundry has made for Toshiba in Japan the super nickel castings for the NET POWER high efficiency turbine and has also cast the same castings in a next generation super nickel alloy.

Responsibility statement of the directors in respect of the half-yearly financial report

The Directors confirm to the best of their knowledge that 1) this condensed set of financial statements has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that 2) the Interim Management Report and condensed financial statements include a fair review of the information required by Disclosure and Transparency Rules 4.2.7R (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year) and 4.2.8R (being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so).

J. W. Goodwin

Chairman                                                                                                                                                    19th December 2013

Condensed consolidated income statement

for the half year to 31st October 2013

	Unaudited Half Year to 31st October 2013	Unaudited Half Year to 31st October 2012	Audited Year Ended 30th April 2013
	£'000	£'000	£'000
Continuing operations
Revenue	71,264	68,393	126,964
Cost of sales	(48,806)	(48,598)	(86,404)
Gross profit	22,458	19,795	40,560
Distribution expenses	(1,823)	(1,591)	(3,378)
Administrative expenses	(8,104)	(7,405)	(16,026)
Operating profit	12,531	10,799	21,156
Financial expenses	(395)	(537)	(1,133)
Share of profit of associate companies	144	136	273
Profit before taxation	12,280	10,398	20,296
Tax on profit	(2,488)	(2,550)	(4,609)
Profit after taxation	9,792	7,848	15,687
Attributable to:
Equity holders of the parent	9,452	7,613	15,247
Non-controlling interests	340	235	440
Profit for the period	9,792	7,848	15,687
Basic and diluted earnings per ordinary share	131.28p	105.74p	211.76p

Condensed consolidated statement of comprehensive income

for the half year to 31st October 2013

	Unaudited Half Year to 31st October 2013	Unaudited Half Year to 31st October 2012	Audited  Year Ended 30th April 2013
	£'000	£'000	£'000
Profit for the period	9,792	7,848	15,687
Other comprehensive income/(expense)
Items that are or may be reclassified subsequently to profit or loss
Foreign exchange translation differences	(1,111)	(203)	1,123
Effective portion of changes in fair value of cash flow hedges	1,742	(492)	(170)
Net change in fair value of cash flow hedges reclassified to profit or loss	256	486	(492)
Tax on items that are or may be reclassified subsequently to profit or loss	(429)	(2)	149
Other comprehensive income/(expense) for the period, net of income tax	458	(211)	610
Total comprehensive income for the period	10,250	7,637	16,297
Attributable to:
Equity holders of the parent	10,191	7,399	15,627
Non-controlling interests	59	238	670
	10,250	7,637	16,297

Condensed consolidated statement of changes in equity

for the half year to 31st October 2013

	Share capital	Translation reserve	Cash flow hedging reserve	Retained earnings	Total attributable to  equity holders of the parent	Non- controlling interests	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Half year to 31st October 2013 (Unaudited)
Balance at 1st May 2013	720	1,723	(746)	56,657	58,354	4,173	62,527
Total comprehensive income:
Profit	-	-	-	9,452	9,452	340	9,792
Other comprehensive income:
Foreign exchange translation difference	-	(830)	-	-	(830)	(281)	(1,111)
Net movements on cash flow hedges	-	-	1,569	-	1,569	-	1,569
Total comprehensive income for the period	-	(830)	1,569	9,452	10,191	59	10,250
Transactions with owners of the Company recognised directly in equity:
Purchase of non-controlling interest without a change in control	-	-	-	18	18	(18)	-
Dividends paid	-	-	-	(3,811)	(3,811)	-	(3,811)
Balance at 31st October 2013	720	893	823	62,316	64,752	4,214	68,966
Half year to 31st October 2012 (Unaudited)
Balance at 1st May 2012	720	830	(233)	43,720	45,037	3,671	48,708
Total comprehensive income:
Profit	-	-	-	7,613	7,613	235	7,848
Other comprehensive income:
Foreign exchange translation difference	-	(206)	-	-	(206)	3	(203)
Net movements on cash flow hedges	-	-	(8)	-	(8)	-	(8)
Total comprehensive income for the period	-	(206)	(8)	7,613	7,399	238	7,637
Transactions with owners of the Company recognised directly in equity:
Dividends paid	-	-	-	(2,310)	(2,310)	-	(2,310)
Balance at 31st October 2012	720	624	(241)	49,023	50,126	3,909	54,035
Year ended 30th April 2013 (Audited)
Balance at 1st May 2012	720	830	(233)	43,720	45,037	3,671	48,708
Total comprehensive income:
Profit	-	-	-	15,247	15,247	440	15,687
Other comprehensive income:
Foreign exchange translation difference	-	893	-	-	893	230	1,123
Net movements on cash flow hedges	-	-	(513)	-	(513)	-	(513)
Total comprehensive income for the period	-	893	(513)	15,247	15,627	670	16,297
Transactions with owners of the Company recognised directly in equity:
Dividends paid	-	-	-	(2,310)	(2,310)	(168)	(2,478)
Balance at 30th April 2013	720	1,723	(746)	56,657	58,354	4,173	62,527

Condensed consolidated balance sheet

as at 31st October 2013

	Unaudited as at 31st October 2013	Unaudited as at 31st October 2012	Audited as at 30th April 2013
	£'000	£'000	£'000
Non-current assets
Property, plant and equipment	38,632	28,465	33,308
Intangible assets	11,419	12,045	11,496
Investments  in associates	1,339	1,383	1,314
	51,390	41,893	46,118
Current assets
Inventories	27,823	30,475	31,833
Trade and other receivables	40,012	36,144	34,953
Derivative financial assets	2,672	624	809
Cash and cash equivalents	3,523	2,813	5,514
	74,030	70,056	73,109
Total assets	125,420	111,949	119,227
Current liabilities
Bank overdrafts	3,487	14,540	77
Other interest-bearing loans and borrowings	2,953	371	1,902
Trade and other payables	30,003	20,857	29,994
Deferred consideration	500	500	500
Derivative financial liabilities	1,549	1,412	1,231
Liabilities for current tax	3,194	2,859	2,423
Warranty provision	212	587	378
	41,898	41,126	36,505
Non-current liabilities
Other interest-bearing loans and borrowings	11,525	13,663	17,130
Warranty provision	537	349	484
Deferred tax liabilities	2,494	2,776	2,581
	14,556	16,788	20,195
Total liabilities	56,454	57,914	56,700
Net assets	68,966	54,035	62,527
Equity attributable to equity holders of the parent
Share capital	720	720	720
Translation reserve	893	624	1,723
Cash flow hedge reserve	823	(241)	(746)
Retained earnings	62,316	49,023	56,657
Total equity attributable to equity holders of the parent	64,752	50,126	58,354
Non-controlling interests	4,214	3,909	4,173
Total equity	68,966	54,035	62,527

Condensed consolidated cash flow statement

for the half year ended 31st October 2013

		Unaudited Half Year to 31st October 2013		Unaudited Half Year to 31st October 2012		Audited Year Ended 30th April 2013
	£'000		£'000		£'000
Cash flow from operating activities
Profit from continuing operations after tax	9,792		7,848		15,687
Adjustments for:
Depreciation	1,749		1,629		2,792
Amortisation of intangible assets	357		396		738
Financial expense	395		537		1,133
Loss / (profit) on sale of property, plant and equipment	11		(20)		(20)
Share of profit of associate companies	(144)		(136)		(273)
Tax expense	2,488		2,550		4,609
Operating profit before changes in working capital and provisions	14,648		12,804		24,666
Increase in trade and other receivables	(5,319)		(11,880)		(9,144)
Decrease in inventories	3,606		2,028		1,098
(Decrease) / increase in trade and other payables
excluding payments on account	(2,105)		(6,588)		85
Increase in payments on account	3,097		1,091		1,577
Cash generated from operations	13,927		(2,545)		18,282
Interest paid	(424)		(514)		(1,097)
Corporation tax paid	(2,222)		(2,027)		(4,581)
Interest element of finance lease obligations	(13)		(22)		(19)
Net cash  inflow / (outflow) from operating activities	11,268		(5,108)		12,585
Cash flow from investing activities
Proceeds from sale of property, plant and equipment	10		127		144
Proceeds from disposal of intangible property	-		-		265
Acquisition of property, plant and equipment	(8,459)		(4,065)		(9,409)
Purchase of non-controlling interest	(241)		-		-
Additional payment for existing subsidiary	(45)		(8)		(8)
Payment of deferred purchase creditor	-		(2,756)		(2,755)
Dividends received from associate company	-		-		308
Net cash outflow from investing activities	(8,735)		(6,702)		(11,455)
Cash flows from financing activities
Dividends paid	(3,811)		(2,310)		(2,310)
Dividends paid to non-controlling interests	-		-		(168)
Proceeds from loans	5,000		1,589		5,028
Repayment of loans	(9,139)		(4,071)		(3,077)
Payment of capital element of finance lease obligations	(188)		(104)		(303)
Receipt of grant for fixed assets	364		-		-
Net cash outflow from financing activities	(7,774)		(4,896)		(830)
Net (decrease) /increase  in cash and cash equivalents	(5,241)		(16,706)		300
Opening cash and cash equivalents	5,437		5,019		5,019
Effect of exchange rate fluctuations on cash held	(160)		(40)		118
Closing cash and cash equivalents	36		(11,727)		5,437

Notes

 to the condensed consolidated financial statements

1          Reporting entity

Goodwin PLC (the "Company") is a company incorporated in England. The unaudited condensed consolidated interim financial statements of the Company as at and for the six months ended 31st October 2013 comprises the Company, its subsidiaries, and the Group's interests in associates (together referred to as the "Group").

The audited consolidated financial statements of the Group as at and for the year ended 30th April 2013 are available upon request from the Company's registered office at Ivy House Foundry, Hanley, Stoke on Trent ST1 3NR or via the Company's web site:  www.goodwin.co.uk.

2          Statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted in the EU.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the audited consolidated financial statements of the Group as at and for the year ended 30th April 2013.

The comparative figures for the financial year ended 30th April 2013 are extracts and not the full Group's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

These unaudited condensed consolidated interim financial statements were approved by the Board of Directors on 19th December 2013.

3          Significant accounting policies

The accounting policies applied by the Group in these unaudited condensed consolidated financial statements are the same as those applied by the Group in its audited consolidated financial statements as at and for the year ended 30th April 2013. New standards to be adopted in the current year, being IFRS 13, Amendments to IAS1 and the Annual Improvements project, are not expected to have a significant impact on the financial statements.

4          Estimates

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.

In preparing these unaudited consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the audited consolidated financial statements as at and for the year ended 30th April 2013.

The tax charge in the period is based on management's estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period, and the impact of any disallowed costs.

5          Business Segments

Products and services from which reportable segments derive their revenues

In accordance with the requirements of IFRS8 "Operating Segments" the Group's reportable segments based on information reported to the Group's Board of Directors for the purposes of resource allocation and assessment of segment performance are as follows:

·      Mechanical Engineering    - casting, machining and general engineering

·      Refractories Engineering   - powder manufacture and mineral processing

Information regarding the Group's operating segments is reported below. 

Segment revenues and profits

	Mechanical Engineering			Refractories Engineering			Sub Total
	Unaudited	Unaudited	Audited	Unaudited	Unaudited	Audited	Unaudited	Unaudited	Audited
	Half Year Ended 31st October 2013	Half Year Ended 31st October 2012	Year Ended 30th April 2013	Half Year Ended 31st October 2013	Half Year Ended 31st October 2012	Year Ended 30th April 2013	Half Year Ended 31st October 2013	Half Year Ended 31st October 2012	Year Ended 30th April 2013
	£000	£000	£000	£000	£000	£000	£000	£000	£000
Revenue
External sales	55,258	53,502	97,227	16,006	14,891	29,737	71,264	68,393	126,964
Intra-Group sales	10,660	11,525	22,407	2,169	2,362	4,588	12,829	13,887	26,995
Total revenue	65,918	65,027	119,634	18,175	17,253	34,325	84,093	82,280	153,959
Reconciliation to consolidated revenues:
Intra-Group sales							(12,829)	(13,887)	(26,995)
Consolidated revenue for the period							71,264	68,393	126,964

	Mechanical Engineering			Refractories Engineering			Sub Total
	Unaudited Half Year Ended 31st October 2013	Unaudited Half Year Ended 31st October 2012	Audited Year Ended 30th April 2013	Unaudited Half Year Ended 31st October 2013	Unaudited Half Year Ended 31st October 2012	Audited Year Ended 30th April 2013	Unaudited Half Year Ended 31st October 2013	Unaudited Half Year Ended 31st October 2012	Audited Year Ended 30th April 2013
	£000	£000	£000	£000	£000	£000	£000	£000	£000
Profits
Segment result including associates	11,167	9,402	18,889	1,665	1,628	3,154	12,832	11,030	22,043
Group administration  costs							(157)	(95)	(614)
Group finance and treasury costs							(395)	(537)	(1,133)
Consolidated profit before tax for the  period							12,280	10,398	20,296
Tax							(2,488)	(2,550)	(4,609)
Consolidated profit after tax for the  period							9,792	7,848	15,687

Segmental assets and liabilities

	Segmental total assets			Segmental total liabilities			Segmental net assets
	Unaudited	Unaudited	Audited	Unaudited	Unaudited	Audited	Unaudited	Unaudited	Audited
	Half Year Ended 31st October 2013 £'000	Half Year Ended 31st October  2012 £'000	Year Ended 30th April  2013 £'000	Half Year Ended 31st October 2013 £'000	Half Year Ended 31st October 2012 £'000	Year Ended 30th April 2013 £'000	Half Year Ended 31st October 2013 £'000	Half Year Ended 31st October 2012 £'000	Year Ended 30th April  2013 £'000
Mechanical Engineering	73,875	66,599	66,047	49,287	45,999	50,339	24,588	20,600	15,708
Refractories Engineering	23,456	24,497	25,079	9,822	11,429	11,749	13,634	13,068	13,330
Sub total reportable segment	97,331	91,096	91,126	59,109	57,428	62,088	38,222	33,668	29,038

Goodwin PLC (the Company) net assets							41,103	29,167	43,214
Investments elimination / goodwill adjustments							(8,524)	(7,249)	(8,357)
Other consolidation adjustments							(1,835)	(1,551)	(1,368)
Consolidated total net assets							68,966	54,035	62,527

Geographical segments

	Half Year Ended 31st October 2013				Half Year Ended 31st October 2012
	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited	Unaudited
	Revenue	Operational assets	Non current assets	PPE Capital expenditure	Revenue	Operational assets	Non current assets	PPE Capital expenditure
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
UK	14,442	55,063	44,776	7,652	14,227	41,255	35,223	2,724
Rest of Europe	11,393	4,725	442	108	10,848	4,139	343	236
USA	9,485	-	-	-	2,970	-	-	-
Pacific Basin	19,377	7,624	1,356	126	25,758	6,412	808	896
Rest of World	16,567	1,554	4,816	429	14,590	2,229	5,519	298
Total	71,264	68,966	51,390	8,315	68,393	54,035	41,893	4,154

					Year Ended 30th April 2013
					Audited Revenue	Audited Operational assets	Audited Non current assets	Audited PPE Capital expenditure
					£'000	£'000	£'000	£'000
UK					26,865	47,952	38,815	8,116
Rest of Europe					21,456	4,909	555	62
USA					8,010	-	-	-
Pacific Basin					43,056	7,339	1,430	1,171
Rest of World					27,577	2,327	5,318	449
Total					126,964	62,527	46,118	9,798

The Group operates in the above 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.

 6.      Dividends

The Directors do not propose the payment of an interim dividend.

	Unaudited		Unaudited	Audited
		Half Year to 31st October 2013	Half Year to 31st October 2012	Year Ended 30th April 2013
		£000	£000	£000
Equity Dividends Paid:
Ordinary dividends paid during the period in respect of the year ended 30th April 2013: (35.29p per share)		2,541	-	-
Extraordinary dividends paid during the period in respect of the year ended 30th April 2013: (17.645p per share)		1,270	-	-
Ordinary dividends paid during the period in respect of the year ended 30th April 2012: (32.082p per share)		-	2,310	2,310
		_____	_____	_____
		3,811	2,310	2,310
		_____	_____	_____

7.         Earnings per share

The calculation of the earnings per ordinary share is based on the number of ordinary shares in issue during all periods of 7,200,000 and on the profit for the six months attributable to ordinary shareholders of £9,452,000 (six months to 31st October 2012: £7,613,000). The Company has no share options or other diluting interest and accordingly, there is no difference in the calculation of diluted earnings per share.

8.         Capital Management, issuance and repayment of debt

At 31^st October 2013 the capital utilised was £79,694,000 as shown below:

	Unaudited	Unaudited	Audited
	as at 31st October 2013	as at 31st October 2012	as at 30th April 2013
	£'000	£'000	£'000
Cash and cash equivalents	(3,523)	(2,813)	(5,514)
Bank overdrafts	3,487	14,540	77
Finance leases	869	1,164	1,059
Bank loans	13,609	12,870	17,973
Deferred consideration	500	500	500
	_____	_____	_____
Net debt	14,942	26,261	14,095
Total equity attributable to equity holders of the parent	64,752	50,126	58,354
	_____	_____	_____
Capital	79,694	76,387	72,449
	_____	_____	_____

9.         Property, Plant and Equipment

Fixed asset additions were £8,315,000 during the six month period to 31^st October 2013, with the Group progressing on its capital projects, most of which were still in the course of construction at the period end. Other movements in fixed assets were: capital grants received of £364,000; capitalised interest of £42,000; depreciation of £1,749,000; and other reductions due to the effect of exchange adjustments of £900,000, and disposals of £20,000.

During the six month period to 31^st October 2012: the Group had fixed asset additions of £4,154,000 on various capital projects throughout the Group; depreciation of £1,629,000; and other movements were the effect of exchange adjustments of £161,000, and disposals of £107,000.

10.       Intangible assets

During the six month period to 31^st October 2013, intangible assets were increased by additions to goodwill of £286,000, being increased interest in existing subsidiaries by virtue of a minority dividend been paid and the acquisition of part of a minority interest in an existing subsidiary; reduced by amortisation of £357,000 and reduced by exchange adjustments of £6,000.

During the six month period to 31^st October 2012, intangible assets were reduced by amortisation of £396,000 and exchange adjustments of £90,000.

11.       Total financial assets and financial liabilities

The table below sets out the Group's accounting classification of its financial assets and financial liabilities, and their carrying values/fair values at 31 October 2013. The fair values of all financial assets and financial liabilities are not materially different to the carrying values.

				Carrying value/ Fair value
				£000
Financial assets
Cash and cash equivalents				3,523
Receivables
Trade receivables				36,090
Other receivables and prepayments				3,922
At fair value through profit or loss
Derivative financial assets not designated in a cash   flow hedge relationship				428
Designated cash flow hedge relationships
Derivative financial assets designated and effective   as cash flow hedging instruments				2,244
Total financial assets				46,207
Financial liabilities
Financial liabilities at amortised cost
Bank overdraft				3,487
Trade payables				14,217
Other payables				7,369
Deferred consideration				500
Finance lease liabilities				869
Bank loans				13,609
Warranty provisions				749
Corporation tax				3,194
At fair value through profit or loss
Derivative financial liabilities not designated in a   cash flow hedge relationship				333
Designated cash flow hedge relationships
Derivative financial liabilities designated and   effective as cash flow hedging instruments				1,216
Total financial liabilities				45,543

Derivative financial assets and financial liabilities fair values in the above table are derived using Level 2 inputs as defined by IFRS 7 as detailed in the paragraph below*. All other financial assets and financial liabilities fair values are determined using Level 3 inputs.

*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).                                                                         

 

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