Annual Results for year ended 31 December 2022

About this update from Strip Tinning Holdings Plc

[{"type":"text","content":"\n \n 07 June 2023 \n Strip Tinning Holdings plc \n (\"Strip Tinning\" or the \"Company\") \n Annual Results for year ended 31 December 2022 \n Strip Tinning Holdings plc (AIM: STG), a leading supplier of specialist connectors to the automotive sector, is pleased to announce its full year results for the year ended 31 December 2022. \n 2022 has been a transitional year for the Company, executed against a very challenging business environment which was heralded by Russia's invasion of the Ukraine, which started just six days after the Company's admission to AIM. Strip Tinning has emerged stronger and leaner and has maintained its core investment programmes despite the disappointing FY 22 results. \n FY23 developments and market outlook: \n ·      EBITDA positive for each of the first five months of FY 23 and the Board is confident in meeting market expectations for FY 23¹ \n ·      Growing pipeline of EV opportunities \n o  New order worth £0.8m for sample cell contact system modules from the Company's leading EV customer announced in April \n o  New opportunities for serial production nominations and a growing number of new leads \n ·      Strong glazing order book showing greater resilience than originally expected for FY 23 \n ·      Improving prospects for the automotive light vehicle markets, seeing positive growth as the threat of recession diminishes, supply chain shortages ease and pent-up demand is satisfied \n ·      The Board is confident of a return to revenue growth in FY 24, with high exposure to the fast-growing EV space both through our glazing products and our products for EV battery packs \n FY22 Financial highlights: \n ·      Total Revenues of £10.2m (FY 21: £11.2m) \n ·      EV product sales trebled to £1.3m (FY 21: £0.4m) \n ·      Glazing product sales of £8.9m (FY 21: £10.8m) \n ·      Adjusted EBITDA loss of £2.2m (FY 21: £0.5m profit) \n ·      Cash of £1.3m (FY 21: £0.3m) \n   \n FY22 Operational highlights: \n ·      Increased EV sales highlight the continuing focus of vehicle manufacturers on electric ranges, a continuing trend from which the Company is well-positioned to benefit \n ·      Prudent action taken to accelerate the capture of the EV opportunity as well as profitability in Glazing, with investment into   people, operations and products \n ·      Robust action taken on Glazing product prices to ensure that the Company returns to profitability despite strong inflationary cost pressures \n ·      New and improved products, product launch and production processes to the benefit of both customers and the Company \n ·      £1.4m grant won during FY 22 to support production scale up of the EV business \n ·      Improved productivity, helping to alleviate pressures from labour market constraints \n ·      Strengthened management team with extensive experience within the sector, from which the business is already benefitting \n ·      Uptick in EV performance driven by multiple development programmes and production orders \n   \n   \n \n Richard Barton, Group Chief Executive Officer of Strip Tinning, commented: \"We are pleased that trading in each of the first five months of FY 23 has been EBITDA positive, representing a significant turn-around from the losses of 2022, deriving primarily from action taken during the prior period. We are highly exposed to the fast-growing EV sector and we are benefitting from our glazing order book showing greater resilience for 2023 than expected. The improving market outlook and growing pipeline of opportunities is providing the Group with a firm foundation on which to return to a growth trajectory.\" \n Strip Tinning will be hosting a webinar for private investors on Friday 9 th June 2023 at 13:00. If you would like to register for the webinar, please click the link below: \n https://www.investormeetcompany.com/strip-tinning-holdings-plc/register-investor \n   \n (1) Strip Tinning understands that market expectations for the year ended 31 December 2023 are for revenues of £9.4m, Adjusted EBITDA of £0.1 m and net cash/debt of -£3.6m. (Source: FactSet) \n Enquiries: \n Strip Tinning Holdings plc                                                                               Via Alma PR \n Richard Barton, Chief Executive Officer                                                              \n Adam Le Van, Chief Financial Officer \n   \n Singer Capital Markets (Nominated Adviser and Sole Broker)               +44 (0) 20 7496 3000 \n Rick Thompson \n James Fischer \n   \n Alma PR (Financial PR)                                                                                    [email protected] \n Josh Royston                                                                                        +44 (0) 20 3405 0205      \n Joe Pederzolli                                                               \n   \n A copy of this announcement, together with the Annual Report and Accounts will be available to view on the Company's website in due course at www.striptinning.com . \n   \n \n Chairman's statement \n Although since coming to market we have been hampered by market conditions we could not have foreseen, we can take a great deal of pride in the way in which we have responded to market headwinds and emerged as a leaner organisation. While this set of financial results is far from what we had hoped for, we can look to the future with optimism as a result of the action taken during the period under review. \n I would like to take this opportunity to thank all the employees of Strip Tinning who have worked exceptionally hard this year to achieve a significant financial and operational turnaround of the business, and to prepare it for renewed growth moving forwards. We were delighted to be able to reward our staff for their loyalty and hard work last October with the Issue of Shares under our SIP scheme, which had been a longstanding ambition of the Board, creating shared ownership of the business among key employees. \n I would also like to thank all our shareholders in Strip Tinning for backing the business at IPO and for their pragmatic response to the vastly different set of results from those we were all working towards at the point of the IPO. \n Our vastly experienced Board has proven of immense value during the year, positioning the business to be better positioned to take advantage of recovery and the continued opportunities Strip Tinning sees in its markets. As might be expected, in order to address the adverse trading environment, the Board has met at-least monthly throughout the year, and in August I was delighted to take up my current position as Executive Chair. I look forward to continuing in my position and driving the Company back towards growth. \n Looking to the future, we look forward to capitalising on the increasing momentum we are seeing across the business, and whilst we continue to remain highly vigilant of the wider macro-economic environment, we are increasingly confident of a year of progress in FY23. \n   \n Adam Robson \n Executive Chairman \n   \n   \n   \n   \n Chief Executive Officer's Report \n   \n 2022 has been a transitional year for the Company, executed against a very challenging business environment which was heralded by Russia's invasion of the Ukraine, which started just six days after the Company's admission to AIM .  I am proud the way the business has responded to the most turbulent time in trading. The challenges we faced have meant that this year the Company has delivered its worst financial results in its 60 year history but, at the same time, it has emerged stronger and leaner, and has maintained its core investment programmes. The results of these changes are already being seen; the Company has delivered a positive adjusted EBITDA in all its unaudited monthly results for 2023 and the Board is confident that the Company will return to revenue growth in 2024.  \n   \n Business Environment \n   \n The Company's products are used in the production of all classes of automotive light vehicles, but predominantly for passenger cars made in Europe where ACEA reported that car production fell by 1.6% in 2022.  Having started the year relatively strongly, albeit off a low base caused by the global shortages of chips, production softened further following Russia's invasion of the Ukraine. This directly led to a collapse of car production in Russia (which at the time accounted for 15% of Strip Tinning's sales through it is Tier 1 customers) and a knock-on decline in production across Europe due to supply chain disruptions for the Ukraine in particular.   This subsequently triggered a fall in demand for the Company's products.  \n   \n At the same time as transitioning to being a listed business, the war in the Ukraine as well as other headwinds arising from the COVID pandemic presented numerous challenges to the Company.  We also faced the specific major setback in August 2022 of the cancellation of our EV volume nomination for the supply of a Cell Contacting Management System (CCMS) to a leading German OEM by the electric vehicle technology innovator making the battery packs.  This was an undoubted disappointment for the EV division as the contract acted as a validation of the Strip Tinning EV product offering.  The business has worked hard to reach a fair and acceptable settlement (which is close to being finalised) and has ensured that the correct lessons have been learnt.  The resulting changes are now bearing fruit in the new programmes we have in our sales pipeline.    \n   \n Business improvements completed during 2022 \n   \n In the face of the aforementioned challenges, the Company had to focus down on achieving very material improvements in a number of key areas, which it successfully did. These were: \n   \n ·      Management team - we are fortunate to have recruited a new Managing Director, Mark Perrins, who brings with him a proven automotive track record in operational turnarounds.  Mark has developed a highly performing senior leadership team from existing and new managers. This team has driven through the improvements already achieved and is now taking the business forward towards growth and improving margins. \n ·      New and improved products, product launch and production processes to the benefit of both customers and the Company. \n ·      EV product sales trebled to £1.25m (2021: £0.4m) on the back of multiple development programmes and production orders.  \n ·      On time deliveries have improved with ERP improvements and arrears have been eliminated. Our new SAP ERP will be fully functional by the end of 2023.  \n ·      Productivity has improved greatly thanks to the hard work and support of all our employees. The Glazing connector factory layout had been completely relocated and reorganised to optimise process flow and improve quality. Sales per head in Q1 2023 is now 20.3% higher than it was in Q1 2022. This has also helped to alleviate pressures from labour market constraints. \n ·      Supplier management and development have become even more critical in the new environment, with suppliers imposing on us unprecedented lead-times and price increases.  We have strengthened our supplier management team and invested to develop new suppliers, notably on supply of copper materials where we have an industry leading position.  \n ·      Energy consumption has been a focus in pursuit of both off-setting energy price inflation and reducing our carbon footprint. Improved productivity and investment to eliminate capacity bottlenecks has allowed us to end night shift working and this in particular has helped to reduce energy consumption.   \n   \n Whilst achieving all of the above, we have maintained a strategic focus on our long-term growth objectives, most important of which is our entry into the rapidly growing market for CCMS for use in the battery packs of Electric Vehicles (EVs).   We have supplied CCMS on to a number of production vehicles and this proof of our capabilities has allowed us to build credibility and we now have a strong pipeline of much larger programmes for which we are already delivering sample parts.  We expect the first of these to turn into a volume production nomination later in 2023.  This sales pipeline is also being supported by an investment of over £2 million in a CCMS production line which will have capacity to produce up to 220,000 units per annum.  \n   \n We were delighted to win during 2022 a grant from the Advanced Propulsion Centre (APC) Scale-up Readiness Validation (SuRV) competition worth up to £1.4 million. This grant is being received via six quarterly drawdowns covering the period to end of January 2024.  This grant has made a valuable contribution to our cash position which we have further strengthened through improved terms and collection of receivables form our customers and greater control of our stocks.  \n   \n Finally, with the support of our customers during the period, we raised our Glazing product prices to reflect the pressures felt by all businesses trading internationally.  Customers have engaged constructively with our price increases, and appreciate Strip Tinning's commitment to remain a strong, long-term supplier in the Glazing market.  That said, with a strong focus on profitable production, it has not made sense to continue to supply all the products manufactured in 2022.  These changes have made a very material difference to our profitability in 2023, as seen in the much-improved financial results announced to date.  \n   \n The elimination of low margin products does mean that Glazing product sales in 2023 are forecast to decline but we believe that we retain the support of our customers and we expect that we will see a return to sales growth in 2024. We are committed to growing both our core Glazing products (used to connect the electronic functions embedded within the glass panels of automotive vehicles and occasionally other applications such as buildings) and our new EV related products.  Our pipeline of sales opportunities is growing in both market segments. We were particularly pleased to announce in March a new order for a large number of sample CCMS modules from our leading EV customer, supplying into the autonomous vehicle industry in the USA. The order reflects the ongoing strength of the relationship between both parties and the significant progress being made by the end user towards commercialisation, having already received the necessary regulatory approvals. The value of the order is c.£775k, with the majority of the parts expected to be shipped in 2023 and the Company anticipates next receiving C-sample orders as a result. The order is a strong endorsement of Strip Tinning's offering and underpins the Company's well-established reputation as a supplier of cell contact systems to the fast-growing EV space.  \n   \n ESG \n   \n In January 2023 Strip Tinning was pleased to receive confirmation from Integrum that it has maintained its best-in-class A grade ESG rating, first obtained at the time of the IPO. \n   \n Outlook \n   \n Whilst the FY22 result is not what the Board had originally set out to achieve for shareholders at the start of the financial year, it nevertheless believes that material progress has been in 2022 which will bear fruit in the medium term. In the year ahead, automotive light vehicle markets are expected to see positive growth as the threat of recession diminishes, supply chain shortages ease and pent-up demand is satisfied. According to ACEA^, European passenger car production has growth17.8% in the first 5 months of 2023 compared to the same period in 2022 and the EV growth rate has been 45.1%, representing 12% of the total market. We are fortunate to have a strong and diverse base of end-user OEM customers and good exposure to the fast- growing EV sector, both through our glazing products and our products for EV battery packs.  In 2023 the Company is expecting to make over 30% of all its sales into electric and hybrid vehicles, and growth for this market is forecast to remain very strong driving high demand in particular for the new EV battery related products manufactured by the Company 1 . \n   \n Despite the challenging macroeconomic outlook, the business has delivered a small adjusted EBITDA profit in the first five months of the current year and a full year adjusted EBITDA profit is expected to be achieved in total. This outlook puts the business onto a sound footing for greater success in 2024. The Company is able to manage its cash requirements whilst maintaining EV and Glazing investment plans to build capacity, improve capabilities and drive productivity.  Strip Tinning is confident that these investments, coupled with strong customer relationships, will lead to valuable new supply nominations in 2023, taking the Company back to growth in 2024. \n   \n (1)   https://www.acea.auto/pc-registrations/new-car-registrations-17-2-in-april-battery-electric-11-8-market-share/ \n   \n R W Barton \n Chief Executive Officer \n   \n   \n   \n Consolidated statement of comprehensive income \nfor the year ended 31 December 2022 \n \n \n \n \n \n \n \n Note \n \n \n      2022 \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Revenue \n \n \n 3 \n \n \n 10,230 \n \n \n 11,150 \n \n \n \n \n Cost of sales \n \n \n \n \n \n (9,731) \n \n \n (7,872) \n \n \n \n \n Gross profit \n \n \n \n \n \n 499 \n \n \n 3,278 \n \n \n \n \n Other operating income \n \n \n 4 \n \n \n 439 \n \n \n 31 \n \n \n \n \n Administrative expenses \n \n \n 4 \n \n \n (5,864) \n \n \n (4,213) \n \n \n \n \n Impairment loss \n \n \n 4 \n \n \n (577) \n \n \n - \n \n \n \n \n Operating loss \n \n \n 4 \n \n \n (5,503) \n \n \n (904) \n \n \n \n \n Finance expense \n \n \n 6 \n \n \n (147) \n \n \n (158) \n \n \n \n \n Loss before taxation \n \n \n \n \n \n (5,650) \n \n \n (1,062) \n \n \n \n \n Taxation \n \n \n 7 \n \n \n 725 \n \n \n 237 \n \n \n \n \n Loss and total comprehensive expense for the financial year \n \n \n \n \n \n (4,925) \n \n \n (825) \n \n \n \n \n   \n   \n Basic and diluted loss per share (pence) \n \n \n   \n   \n 8 \n \n \n   \n (33.7) \n \n \n   \n (8.25) \n \n \n \n \n   \n All amounts relate to continuing operations. \n   \n There is no other comprehensive income in either the current or prior year. \n   \n Under the merger accounting principles applied, the statement includes the results of the company and its subsidiary as if they had been combined throughout the current and prior year. \n   \n \n \n \n Consolidated statement of financial position as at 31 December 2022 \n \n \n \n \n \n \n \n Note \n \n \n   \n \n \n  31 December 2022 \n       \n \n \n 31 \n  December \n 2021 \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Assets \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Non current assets \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Intangible assets \n \n \n 9 \n \n \n   \n \n \n 1,277 \n \n \n 1,561 \n \n \n \n \n Right-of-use assets \n \n \n 10 \n \n \n   \n \n \n 1,151 \n \n \n 1,142 \n \n \n \n \n Property, plant and equipment \n \n \n 11 \n \n \n   \n \n \n 2,950 \n \n \n 3,089 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n 5,378 \n \n \n 5,792 \n \n \n \n \n Current assets \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Inventories \n \n \n 13 \n \n \n   \n \n \n 1,848 \n \n \n 2,014 \n \n \n \n \n Trade and other receivables \n \n \n 14 \n \n \n   \n \n \n 3,381 \n \n \n 3,778 \n \n \n \n \n Tax recoverable \n \n \n \n \n \n   \n \n \n 559 \n \n \n 279 \n \n \n \n \n Cash at bank and in hand \n \n \n \n \n \n   \n \n \n 1,290 \n \n \n 337 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n 7,078 \n \n \n 6,408 \n \n \n \n \n Total assets \n \n \n \n \n \n   \n \n \n 12,456 \n \n \n 12,200 \n \n \n \n \n Liabilities \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Current liabilities \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 15 \n \n \n   \n \n \n (3,045) \n \n \n (4,413) \n   \n \n \n \n \n Borrowings \n \n \n 16 \n \n \n   \n \n \n (553) \n \n \n (559) \n \n \n \n \n Lease liabilities \n \n \n 17 \n \n \n   \n \n \n (182) \n \n \n (152) \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n (3,780) \n \n \n (5,124) \n \n \n \n \n Non current liabilities \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Accruals and deferred income \n \n \n 15 \n \n \n   \n \n \n (37) \n \n \n (162) \n \n \n \n \n Borrowings \n \n \n 16 \n \n \n   \n \n \n (992) \n \n \n (1,235) \n \n \n \n \n Lease liabilities \n \n \n 17 \n \n \n   \n \n \n (995) \n \n \n (1,104) \n \n \n \n \n Provisions \n \n \n 20 \n \n \n   \n \n \n (227) \n \n \n - \n \n \n \n \n Deferred taxation \n \n \n 21 \n \n \n   \n \n \n - \n \n \n (338) \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n (2,251) \n \n \n (2,839) \n \n \n \n \n Total liabilities \n \n \n \n \n \n   \n \n \n (6,031) \n \n \n (7,963) \n \n \n \n \n Net assets \n \n \n \n \n \n   \n \n \n 6,425 \n \n \n 4,237 \n \n \n \n \n Equity \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Called up share capital \n \n \n 22 \n \n \n   \n \n \n 154 \n \n \n - \n \n \n \n \n Share premium account \n \n \n 22 \n \n \n   \n \n \n 6,966 \n \n \n - \n \n \n \n \n Merger reserve \n \n \n 22 \n   \n \n \n   \n \n \n (100) \n \n \n - \n \n \n \n \n Other reserve \n \n \n 22 \n \n \n   \n \n \n (3) \n \n \n - \n \n \n \n \n Accumulated loss/retained earnings \n \n \n \n \n \n   \n \n \n (592) \n \n \n 4,237 \n \n \n \n \n Total equity \n \n \n \n \n \n   \n \n \n 6,425 \n \n \n 4,237 \n \n \n \n \n   \n   \n These financial statements were approved and authorised for issue by the board on 6 June 2023 and were signed on its behalf by: \n   \n   \n A Le Van \n Director \n Strip Tinning Holdings plc                                                                                                      Registered number: 13832126 \n \n \n \n Company statement of financial position as at 31 December 2022 \n \n \n \n \n \n \n \n Note \n \n \n   \n \n \n   \n \n \n  31 December 2022 \n       \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n \n \n Assets \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Non current assets \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Investments \n \n \n 12 \n \n \n   \n \n \n   \n \n \n 3,841 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Current assets \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Trade and other receivables \n \n \n 14 \n \n \n   \n \n \n   \n \n \n 5,791 \n \n \n \n \n Cash at bank and in hand \n \n \n \n \n \n   \n \n \n   \n \n \n 414 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n 6,205 \n \n \n \n \n Total assets \n \n \n \n \n \n   \n \n \n   \n \n \n 10,046 \n \n \n \n \n Liabilities \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Current liabilities \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Trade and other payables \n \n \n 15 \n \n \n   \n \n \n   \n \n \n (67) \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Total liabilities \n \n \n \n \n \n   \n \n \n   \n \n \n (67) \n \n \n \n \n Net assets \n \n \n \n \n \n   \n \n \n   \n \n \n 9,979 \n \n \n \n \n Equity \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Called up share capital \n \n \n 22 \n \n \n   \n \n \n   \n \n \n 154 \n \n \n \n \n Share premium account \n \n \n 22 \n \n \n   \n \n \n   \n \n \n 6,966 \n \n \n \n \n Merger reserve \n \n \n 22 \n \n \n   \n \n \n   \n \n \n 3,645 \n \n \n \n \n Other reserve \n \n \n 22 \n \n \n   \n \n \n   \n \n \n (3) \n \n \n \n \n Accumulated loss \n \n \n \n \n \n   \n \n \n   \n \n \n (783) \n \n \n \n \n Total equity \n \n \n \n \n \n   \n \n \n   \n \n \n 9,979 \n \n \n \n \n As permitted by section 408 of the Companies Act 2006, the parent Company's profit and loss account has not been included in these financial statements. The Company recorded a loss for the period from incorporation to 31 December 2022 of £879,000. \n   \n                                                                 \n \n \n \n Consolidated statement of changes in equity for the year ended 31 December 2022 \n \n \n \n \n \n \n \n   \n Called up share capital \n £'000 \n \n \n Share premium account \n £'000 \n \n \n Merger reserve \n   \n £'000 \n \n \n Other reserve \n   \n £'000 \n \n \n   \n Accumulated loss \n £'000 \n \n \n   \n Total \n  Equity \n £'000 \n \n \n \n \n Balance as at 1 January 2021 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 5,104 \n \n \n 5,104 \n \n \n \n \n Loss and total comprehensive expense for the financial year \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (825) \n \n \n (825) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share based payment (note 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 145 \n \n \n 145 \n \n \n \n \n Share options deferred tax credit \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 225 \n \n \n 225 \n \n \n \n \n Dividends paid (by Strip Tinning Limited) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (412) \n \n \n (412) \n \n \n \n \n Total contributions by owners \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (42) \n \n \n (42) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance as at 31 December 2021 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 4,237 \n \n \n 4,237 \n \n \n \n \n Loss and total comprehensive expense for the financial year \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (4,925) \n \n \n (4,925) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share based payment (note 22, 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n (3) \n \n \n 96 \n \n \n 93 \n \n \n \n \n Capital reorganisation (note 22) \n \n \n 100 \n \n \n - \n \n \n (100) \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Issue of share capital (note 22) \n \n \n 54 \n \n \n 6,966 \n \n \n - \n \n \n - \n \n \n - \n \n \n 7,020 \n \n \n \n \n Total contributions by owners \n \n \n 54 \n \n \n 6,966 \n \n \n - \n \n \n (3) \n \n \n 96 \n \n \n 7,113 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Balance as at 31 December 2022 \n \n \n 154 \n \n \n 6,966 \n \n \n (100) \n \n \n (3) \n \n \n (592) \n \n \n 6,425 \n \n \n \n \n   \n Company statement of changes in equity for the year ended 31 December 2022 \n \n \n \n \n \n \n \n   \n Called up share capital \n £'000 \n \n \n Share premium account \n £'000 \n \n \n Merger reserve \n   \n £'000 \n \n \n Other reserve \n   \n £'000 \n \n \n Accumulated loss \n £'000 \n \n \n Total equity \n £'000 \n \n \n \n \n On incorporation \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Loss and total comprehensive expense for the financial year \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (879) \n \n \n (879) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Issue of share capital in exchange for Strip Tinning Limited shares (note 22) \n \n \n 100 \n \n \n - \n \n \n 3,645 \n \n \n - \n \n \n - \n \n \n 3,745 \n \n \n \n \n Issue of share capital (note 22) \n \n \n 54 \n \n \n 6,966 \n \n \n - \n \n \n - \n \n \n - \n \n \n 7,020 \n \n \n \n \n Share based payment (note 22, 23) \n \n \n - \n \n \n - \n \n \n - \n \n \n (3) \n \n \n 96 \n \n \n 93 \n \n \n \n \n Total contributions by owners \n \n \n 154 \n \n \n 6,966 \n \n \n 3,645 \n \n \n (3) \n \n \n - \n \n \n 10,858 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Balance as at 31 December 2022 \n \n \n 154 \n \n \n 6,966 \n \n \n 3,645 \n \n \n (3) \n \n \n (783) \n \n \n 9,979 \n \n \n \n \n \n \n \n Consolidated cash flow statement for the year ended 31 December 2022 \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Cash flow from operating activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Loss for the financial year \n \n \n \n \n \n (4,925) \n \n \n (825) \n \n \n \n \n Adjustment for: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Depreciation of property, plant and equipment \n \n \n 11 \n \n \n 592 \n \n \n 561 \n \n \n \n \n Depreciation of right-of-use assets \n \n \n 10 \n \n \n 203 \n \n \n 160 \n \n \n \n \n Amortisation of intangible assets \n \n \n 9 \n \n \n 180 \n \n \n 191 \n \n \n \n \n Impairment of intangible fixed assets \n \n \n 9 \n \n \n 577 \n \n \n - \n \n \n \n \n Loss on disposal of tangible fixed assets \n \n \n \n \n \n 55 \n \n \n - \n \n \n \n \n Foreign exchange movements \n \n \n \n \n \n (9) \n \n \n - \n \n \n \n \n Amortisation of government grants \n \n \n \n \n \n (49) \n \n \n (31) \n \n \n \n \n IPO financing related costs in administrative expenses \n \n \n \n \n \n 314 \n \n \n - \n \n \n \n \n Share based payment \n \n \n 23 \n \n \n 96 \n \n \n 145 \n \n \n \n \n Finance costs \n \n \n 6 \n \n \n 147 \n \n \n 158 \n \n \n \n \n Taxation credit \n \n \n 7 \n \n \n (725) \n \n \n (237) \n \n \n \n \n Changes in working capital : \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Decrease/(increase) in inventories \n \n \n 13 \n \n \n 166 \n \n \n (492) \n \n \n \n \n Decrease/(increase) in trade and other receivables \n \n \n 14 \n \n \n 397 \n \n \n (1,605) \n \n \n \n \n (Decrease)/increase in trade and other payables \n \n \n 15 \n \n \n (1,309) \n \n \n 3,022 \n \n \n \n \n Cash (used in)/generated from operations \n \n \n \n \n \n (4,290) \n \n \n 1,047 \n \n \n \n \n Income tax received \n \n \n \n \n \n 107 \n \n \n 24 \n \n \n \n \n Net cash (used in)/generated from operating activities \n \n \n \n \n \n (4,183) \n \n \n 1,071 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Purchase of property, plant and equipment \n \n \n 11 \n \n \n (508) \n \n \n (737) \n \n \n \n \n Proceeds on disposal of intangible fixed assets \n \n \n \n \n \n 15 \n \n \n - \n \n \n \n \n Purchase of intangible assets \n \n \n 9 \n \n \n (488) \n \n \n (732) \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n (981) \n \n \n (1,469) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Issue of share capital \n \n \n 22 \n \n \n 8,094 \n \n \n - \n \n \n \n \n Share issue costs paid \n \n \n 22 \n \n \n (1,077) \n \n \n - \n \n \n \n \n Dividends paid to shareholders (by Strip Tinning Limited) \n \n \n \n \n \n - \n \n \n (412) \n \n \n \n \n IPO financing related costs paid \n \n \n \n \n \n (314) \n \n \n - \n \n \n \n \n Interest paid \n \n \n \n \n \n (147) \n \n \n (158) \n \n \n \n \n Payment of lease liabilities \n \n \n \n \n \n (199) \n \n \n (136) \n \n \n \n \n Loan advanced \n \n \n \n \n \n - \n \n \n 355 \n \n \n \n \n Hire purchase finance received \n \n \n \n \n \n 311 \n \n \n 401 \n \n \n \n \n Loan repayments \n \n \n \n \n \n (73) \n \n \n - \n \n \n \n \n Repayment of capital element of hire purchase contracts \n \n \n \n \n \n (487) \n \n \n (545) \n \n \n \n \n Net cash generated from/(used in) financing activities \n \n \n \n \n \n 6,108 \n \n \n (495) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Net increase/(decrease) in cash and cash equivalents \n \n \n \n \n \n 944 \n \n \n (893) \n \n \n \n \n Cash and cash equivalents at the beginning of the year \n \n \n \n \n \n 337 \n \n \n 1,230 \n \n \n \n \n Foreign exchange movements \n \n \n \n \n \n 9 \n \n \n - \n \n \n \n \n Cash and cash equivalents at the end of the year (all cash at bank and in hand) \n \n \n \n \n \n 1,290 \n \n \n 337 \n \n \n \n \n \n \n \n Notes to the financial statements \nfor the year ended 31 December 2022 \n 1  Corporate information \n   \n Strip Tinning Holdings plc is a public company incorporated in the United Kingdom and listed on the Alternative Investment Market. The registered address of the Company is Arden Business Park, Arden Road, Frankley Birmingham, West Midlands, B45 0JA. \n The principal activity of the Company is as a holding company for a subsidiary which manufactures automotive busbar, ancillary connectors and flexible printed circuits (together the 'Group'). \n   \n 2  Accounting policies \n   \n Basis of preparation \n The Group financial statements have been prepared in accordance with UK adopted international accounting standards (\"IFRS\") and in accordance with the requirements of the Companies Act 2006. \n   \n The parent Company financial statements have been prepared under applicable United Kingdom Financial Reporting Standards 101: Reduced Disclosure Framework (\"FRS101\") and the requirements of the Companies Act 2006. The following FRS 101 disclosure exemptions have been taken in respect of the parent Company only information: \n ·      IAS 7 Statement of cash flows; \n ·      IFRS 7 Financial instruments disclosures and; \n ·      IAS 24 Key management remuneration. \n   \n The principal accounting policies applied in the preparation of these consolidated and separate financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. There are no changes as a result of revised standards to the policies applied by Strip Tinning Limited in its 2021 financial statements. \n   \n The financial statements have been prepared under the historical cost convention. The financial statements and the accompanying notes are presented in thousands of pounds sterling ('£'000'), the functional and presentation currency of the Company, except where otherwise indicated. \n   \n Going concern \n After making appropriate enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. In adopting the going concern basis for preparing the financial statements, the directors have considered a base case going concern model and then modelled a series of severe but plausible downside scenarios such as reductions in sales from potential conflicts, reduced market demand for the company products, material price increases, the loss of a major customer, or an unfavourable settlement of the remaining liability associated with the termination of the EV contract. The results of this stress testing suggested that with the financing arrangements available to the business and / or realistic mitigating actions, the Group has adequate resources to continue in operational existence. For this reason, the directors continue to adopt the going concern basis in preparing the Group's and Company's financial statements. \n   \n 2    Accounting policies (continued) \n   \n Standards, amendments and interpretations in issue but not yet effective \n Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for accounting periods beginning on or after 1 January 2023 and which the Group has chosen not to adopt early. These include the following standards which may be relevant to the Group: \n - Amendment to IAS 1 regarding the classification of liabilities being based on an entity's rights at the end of a reporting period and disclosure in respect of material accounting policies; \n - IAS 8 Amendments regarding the definition of accounting estimates; \n - IAS 12 Amendments regarding deferred tax on leases which give rise to equal amounts of taxable and deductible temporary differences on recognition; \n - IFRS 16 Amendments to clarify how a seller-lessee subsequently measures sale and leaseback transactions \n As a result of initial review of the new standards, interpretations and amendments which are not yet effective in these financial statements, none are expected to have a material effect on the Company or Group's future financial statements. \n   \n Use of estimates and judgments \n The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience, as well as expectations of future events and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. \n 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 and in any future periods affected. The estimates and judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. \n   \n Right-of-use assets \n Estimation \n The application of IFRS16 involves an estimation of the appropriate incremental borrowing rate and of the relevant lease period. The rate is reviewed in conjunction with the rates on similar borrowings and a judgement has been made where there are break options by reference to business plans and the most likely outcome. An increase in the rate of 1% would have reduced the opening asset and liability by £67,000 with no impact on net assets, reduced the depreciation charges by £6,000 a year and increased finance charges for 2021 and 2022 by approximately £10,000. \n   \n Property, plant and equipment \n Estimation \n Property, plant and equipment as set out in note 11 is depreciated over the estimated useful lives of the assets. Useful lives are based on management's estimates of the period that the assets will generate revenue, which are reviewed annually for continued appropriateness and events which may cause the estimate to be revised. \n   \n 2    Accounting policies (continued) \n   \n Intangible assets \n Judgement \n The capitalisation of development costs set out in note 9 is subject to a degree of judgement in respect of the point when the commercial viability of new technology and know-how is reached, supported by the results of testing and customer trials. The carrying values are shown in note 9. \n Estimation \n Capitalisation criteria in respect of financial recoverability involves estimated forecasts of future sales and margins with assumptions based on experience and trends when they are prepared which may change over time. At 31 December 2022 there was the specific impairment referred to in note 9 and the group has performed a sensitivity analysis and noted that a reasonable change in the underlying significant assumptions is not expected to result in an impairment of an intangible asset. \n Amortisation commences once management consider that the asset is available for use, i.e. when it is judged to be in the location and condition necessary for it to be capable of operating in the manner intended by management and the cost is amortised over the estimated 5 to 8 year useful life of the know-how based on experience of and future expected customer product cycles and lives. \n   \n Deferred taxation \n Judgement \n The recognition of deferred tax assets involves the assessment of forecasts in respect of future results and taxable profits and judgement as to the likelihood that these will be achieved and realise the assets. \n   \n Inventory \n Judgement \n The calculation of net realisable value provisions against inventory requires, in particular, an assessment of whether materials or components can be utilised in future production. Management use past experience and expectations of future orders to judge whether inventory will not be used and therefore requires a provision. \n   \n   \n Basis of consolidation \n   \n The Company was incorporated on 6 January 2022 with one £0.01 ordinary share and on 2 February 2022, became the Group parent Company when it issued 9,999,999 £0.01 ordinary shares in exchange for all the ordinary shares in Strip Tinning Limited. In addition, options over ordinary shares in Strip Tinning Limited were converted, on equivalent terms, to options over 813,045 shares in the Company. This is considered not to be a business combination and outside the scope of IFRS3  Business Combinations. This is a key judgement. and as a transaction where there was no change in the shareholders or holdings is accordingly accounted for using merger accounting with no change in the book values of assets and liabilities with no fair value accounting applied. \n These consolidated financial statements of the Group are the first set of financial statements for the newly formed Group. The prior period comparatives are those of Strip Tinning Limited since no substantive economic changes have occurred. \n The consolidated financial statements present the results of the Company and its subsidiary as if they have always formed a single group. Intercompany transactions and balances between Group companies are therefore eliminated in full. The share capital presented is that of Strip Tinning Holdings plc from the date of the capital reorganisation in 2022 with the difference on elimination of Strip Tinning Limited's capital being shown as a merger reserve. \n The consolidated statement of comprehensive income reflects the consolidated results for the full financial year ended 31 December 2022, inclusive of the results of the newly incorporated parent entity, plc, from 6 January 2022 onwards. \n A subsidiary is an entity over which the Group has control. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. \n   \n 2      Accounting policies (continued) \n Revenue \n Revenue principally comprises income from the sale of automotive glazing components comprising busbar, ancillary connectors and flexible printed circuits together with a small degree of product tooling purchased by customers and represents the amount receivable for the sale of these component products or tooling, excluding VAT and trade discounts. Tooling is usually retained by the Group and held as a fixed asset. \n There are framework agreements with major customers including pricing per component and purchase orders are then received from customers for each delivery. Revenue is recognised to the extent that the performance obligations, being the agreement to transfer the product meeting the technical specifications is satisfied, which is when the customer obtains control of the product or of the tooling and is able to benefit from or direct the use of the product. The transfer takes place in accordance with the terms agreed with each customer, either at the point in time the goods are despatched to or received by the customer. Product is tested before dispatch, but any product returned by the customer as faulty is treated as a reduction in revenue. \n Any tooling revenue is recognised in full once the tooling project is complete and in use to make parts for the customer. \n When an amount has been invoiced or payment received in advance of the associated performance obligations being fulfilled, any amounts due are recognised as trade receivables and deferred income is recorded for the sales value of the performance obligations that have not been provided.  \n   \n Grants \n Income based grants \n Income based grants are recognised in other operating income based on the specific terms related to them as follows: \n ·      A grant is recognised in other operating income when the grant proceeds are received (or receivable) provided that the terms of the grant do not impose future performance-related conditions. \n ·      If the terms of a grant impose performance-related conditions including incurring related expenditure,  then the grant is only recognised in income as the related performance conditions are met. \n ·      Any grants that are received before the revenue recognition criteria are met are recognised in the statement of financial position as an other creditor within liabilities. \n Capital grants \n Grants received relating to tangible and intangible fixed assets are treated as deferred income and released to the income statement over the expected useful lives of the assets concerned. \n   \n Employee benefits \n The Group operates a defined contribution pension scheme. Contributions are recognised in the statement of comprehensive income in the year in which they become payable in accordance with the rules of the scheme. \n   \n Share based payment \n The Company operates an equity-settled share-based compensation plan in which the Group receives services from employees as consideration for share options. The fair value is established at the point of grant using an appropriate pricing model and then the cost is recognised as an expense in administrative expenses in the statement of comprehensive income, together with a corresponding increase directly in equity over the period in which the services are fulfilled. This is the estimated period to vesting in respect of employees. The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. \n Deferred tax credits in respect of the potential future tax deduction from exercise of options are initially included in the tax in the statement of comprehensive income. To the extent the potential corporate tax deduction exceeds the share based payment charges, the deferred tax is taken directly to retained earnings in equity in accordance with IAS12. \n 2    Accounting policies (continued) \n Income tax \n Current income tax assets and/or liabilities comprise obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid/due at the reporting date. Current tax is payable on taxable profits, which may differ from profit or loss in the financial statements. Calculation of current tax is based on the tax rates and tax laws that have been enacted or substantively enacted at the reporting period. \n Deferred taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the deferred tax asset arises from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). \n Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. \n Computer software \n Computer software assets are capitalised at the cost of acquiring and bringing into use the software. Subsequent to initial recognition it is stated at cost less accumulated amortisation and accumulated impairment. Software is amortised on a straight line basis over its estimated useful life of two years. Amortisation on all intangible assets is recognised in administrative expenses in the Statement of Comprehensive Income. \n Research and development costs \n An internally generated intangible asset arising from development (or the development phase) of an internal project to improve the efficiency, design or capability of the Group's product range is recognised if, and only if, all of the following have been demonstrated: \n   \n ·      It is technically feasible to complete the development such that it will be available for use, sale or licence; \n ·      There is an intention to complete the development; \n ·      There is an ability to use, sell or licence the resultant asset; \n ·      The method by which probable future economic benefits will be generated is known; \n ·      There are adequate technical, financial and other resources required to complete the development; \n ·      There are reliable measures that can identify the expenditure directly attributable to the project during its development. \n The amount recognised is the expenditure incurred from the date when the project first meets the recognition criteria listed above.  Expenses capitalised consist of employee costs incurred on development, direct costs including material or testing and an apportionment of appropriate overheads. \n Where the above criteria are not met, research and development expenditure is charged to the income statement in the period in which it is incurred. \n Capitalised development costs are initially measured at cost. After initial recognition, they are recognised at cost less any accumulated amortisation and any accumulated impairment losses. \n The depreciable amount of a development cost intangible asset with a finite useful life is amortised on a straight line basis over its useful life, currently expected to range from 5 to 8 years. Amortisation begins when the asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. \n The amortisation period and the amortisation method for the assets with a finite useful life is reviewed at least each financial year-end. If the expected useful of the asset is different from previous estimates, the amortisation period is changed accordingly.             \n Patent costs \n Patent cost assets are initially measured at cost. After initial recognition, they are recognised at cost less any accumulated amortisation and any accumulated impairment losses. The costs are amortised over a 5 year estimated useful life. \n 2     Accounting policies (continued) \n Property plant and equipment \n Property, plant and equipment is recognised as an asset only if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. An item of property, plant and equipment that qualifies for recognition as an asset is measured at its cost. Cost of an item of property, plant and equipment comprises the purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. \n After recognition, all property, plant and equipment (including plant, computer equipment and fixtures) is carried at cost less any accumulated depreciation and any accumulated impairment losses. Depreciation is provided at rates calculated to write down the cost of assets, less estimated residual value, over their expected useful lives on the following basis: \n Leasehold improvements                                           straight line over life of lease \n Plant and machinery                                    2-15 year straight line \n Office equipment                                                          2 year straight line \n Tooling                                                                            5 year straight line \n The residual value and the useful life of an asset is reviewed at least at each financial year-end and if expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors . \n Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying value of the asset and are recognised in profit or loss. \n Right-of-use assets and lease liabilities \n   \n Assets and liabilities arising from a lease with a duration of more than one year are initially measured at the present value of the lease payments and payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments are discounted using the interest rate implicit in the lease or the incremental borrowing rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. \n Lease payments are allocated between repayments of the discounted liability, presented as a separate category within liabilities, and the lease liability finance charges. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost comprising the amount of the initial measurement of lease liability, any lease payments made at or before the commencement date less any lease incentives received and any initial direct costs and are presented as a separate category within tangible fixed assets. \n Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease \nterm on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.   \n Any payments associated with short-term leases of equipment and all leases of low-value assets would be recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. There have been no significant short lease costs in the reporting period. Associated costs of all leases, such as maintenance, service charges and insurance, are expensed as incurred. \n   \n Impairment of intangible assets, right-of-use assets and property, plant and equipment \n For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash flows. As a result, some assets are tested individually for impairment and some are tested at the overall Group level. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the \"cash-generating unit\". \n All individual assets or cash-generating units are reviewed for indicators of impairment at the end of each period and tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. \n An asset or cash-generating unit is impaired when its carrying amount exceed its recoverable amount. The recoverable amount is measured as the higher of fair value less cost of disposal and value in use. The value in use is calculated as being net projected cash flows based on financial forecasts discounted back to present value.The impairment loss is allocated to reduce the carrying amount of the asset pro-rata on the basis of the carrying amount of each asset in the unit. Non-financial assets that suffered an impairment are reviewed for a possible reversal of the impairment at the end of each reporting period. An impairment loss is reversed if the asset's or cash-generating unit's recoverable amount exceeds its carrying amount. \n   \n 2   Accounting policies (continued) \n Inventories \n Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value.  Cost comprises all costs of purchase of raw materials or bought in manufacturing components on a first in first out basis, costs of conversion and an appropriate proportion of fixed and variable overheads incurred in bringing the finished goods inventories to their present location and condition. Net realisable value represents the estimated selling price less costs to complete and sell. Where necessary, provision is made to reduce cost to no more than net realisable value having regard to the nature and condition of inventory, as well as its anticipated utilisation and saleability. \n Financial instruments \n Financial assets \n Financial assets are recognised in the statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument and are classified based upon the purpose for which the asset was acquired. The Group's business model is to hold all assets recognised within these financial statements to collect the cash flows. \n Financial assets are initially recognised at fair value, which is usually the cost, plus directly attributable transaction costs. These comprise trade and other receivables and cash and cash equivalents.Financial assets are subsequently measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. \n The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables.  The Group measures loss allowances at an amount equal to lifetime ECL, which is estimated using past experience of the historical credit losses experienced over the three year period prior to the period end. Historical loss rates are then adjusted for current and forward-looking information on macroeconomic factors affecting the Group's customers, such as inflation rates. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. \n The Group recognises loss allowances for expected credit losses (ECLs) on financial assets measured at amortised cost. \n A financial asset is derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and reward are transferred. \n Financial liabilities \n Financial liabilities include loans, hire purchase borrowings, lease liabilities, trade and other payables and any derivatives in respect of forward foreign exchange contracts. Financial liabilities are obligations to pay cash or other financial assets and are recognised in the statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the instrument. \n Trade and other payables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Loans and hire purchase borrowings are are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument and subsequently carried at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. \n Derivatives would be measured at fair value through profit and loss for any movements. None have been entered into within the period of these financial statements. \n A financial liability is derecognised only when the contractual obligation is extinguished, that is, when the obligation is discharged, cancelled or expires. \n The Group utilises hire purchase asset backed finance to fund tangible fixed assets, drawing down finance against individual assets or bundles of assets, which may directly finance the asset purchase or be drawn down retrospectively. The economic ownership of assets subject to hire purchase agreements are transferred to the Group if the Group bears substantially all the risks and rewards of ownership of the asset. The related asset is recognised and measured in accordance with the tangible fixed asset policy with initial cost being the fair value of the asset. A corresponding hire purchase liability.is recognised in respect of the capital repayments to be made. These interest bearing liabilities are then measured at amortised cost with the interest, under the effective interest method, expensed over the repayment period at a constant rate. \n Cash and cash equivalents \n Cash and cash equivalents comprise cash on hand and demand deposits, together with other short term, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value \n   \n 2    Accounting policies (continued) \n   \n Foreign currencies \n Transactions entered into by the Group in a currency other than the functional currency of sterling are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the income statement in administrative expenses. \n Provisions \n Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an economic outflow will occur and a reliable estimate  can be made including any additional evidence from post period end events.  Where the timing of the estimate  represents a relatively certain amount it is provided for within accruals. \n Equity and reserves \n Share capital represents the nominal value of shares that have been issued. Share premium represents the excess consideration received over the nominal value of share capital upon the sale of shares, less any incidental costs of issue. The company's merger reserve arises from the fair value attributed to the shares issued in exchange for the subsidiary's shares as no share premium account is recognised under Companies Act merger relief. On consolidation a merger reserve arises as a result of the difference between the nominal value of the parent company shares issued in exchange for subsidiary shares and the nominal value of those subsidiary shares. \n Retained earnings include all current and prior period retained profits. \n Presentation of non statutory measures \n The Group classifies certain one-off charges or credits that have a material impact on the financial results but are not related to the core underlying trading as 'exceptional' or 'non-recurring' items. These are disclosed separately in note 4 and adjusted results to provide further understanding of the financial performance of the Group. \n   \n 3    Segmental reporting \n   \n IFRS 8, Operating Segments, requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the Group's chief operating decision maker. The chief operating decision maker is considered to be the executive Directors. \n   \n The Group previously comprised only one operating segment for the sale of automotive circuit components for glazing products. The operating segments are monitored by the chief operating decision maker and strategic decisions are made on the basis of adjusted segment operating results. All assets, liabilities and revenues are located in, or derived in, the United Kingdom. However, the Group has commenced the development and initial sales of its glazing circuits for electric vehicles ('EV' segment) which are expected to grow to be a material segment. Separate management reporting and information has now been prepared for 2022 at a revenue and gross profit level only for a Glazing segment (sale of glazing circuits for petrol/diesel vehicles) and EV as follows: \n \n \n \n \n   \n \n \n Glazing \n \n \n EV \n \n \n Total \n \n \n \n \n Year ended 31 December 2022 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n 8,977 \n \n \n 1,253 \n \n \n 10,230 \n \n \n \n \n Cost of sales \n \n \n (8,650) \n \n \n (1,081) \n \n \n (9,731) \n \n \n \n \n Gross profit \n \n \n 327 \n \n \n 172 \n \n \n 499 \n \n \n \n \n Other operating income \n \n \n   \n \n \n   \n \n \n 439 \n \n \n \n \n Administrative expenses \n \n \n   \n \n \n   \n \n \n   (5,864) \n \n \n \n \n Impairment loss (in EV) \n \n \n   \n \n \n   \n \n \n (577) \n \n \n \n \n Finance expense \n \n \n   \n \n \n   \n \n \n (147) \n \n \n \n \n Taxation \n \n \n   \n \n \n   \n \n \n 725 \n \n \n \n \n Loss for the year \n \n \n   \n \n \n   \n \n \n (4,925) \n \n \n \n \n   \n   \n Some estimated information was derived for the year ended 31 December 2021 for EV showing sales of £0.35m and net costs of about £1.1m as a result of the increasing investment and development in this area of activity. \n 3    Segmental reporting (continued) \n   \n Turnover with the largest customers (including customer groups) representing in excess of 10% of total revenue in the year for 3 customers (2021: 4 customers) has been as follows: \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n Year ended 31     December   2022 \n \n \n   \n \n \n Year ended 31 December 2021 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n Customer A \n \n \n \n \n \n \n \n \n 2,062 \n \n \n \n \n \n 1,680 \n \n \n \n \n Customer B \n \n \n \n \n \n \n \n \n 1,709 \n \n \n \n \n \n 2,392 \n \n \n \n \n Customer C \n \n \n \n \n \n \n \n \n 1,189 \n \n \n \n \n \n 552 \n \n \n \n \n Customer D \n \n \n \n \n \n \n \n \n 867 \n \n \n \n \n \n 2,091 \n \n \n \n \n Customer E \n \n \n \n \n \n \n \n \n 693 \n \n \n \n \n \n 1,230 \n \n \n \n \n   \n All revenue arises at a point in time and relates to the sale of automotive busbar, ancillary connectors and flexible printed circuit product. Turnover by geographical destination is as follows: \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n Year ended 31 December 2022 \n \n \n   \n \n \n Year ended 31 December 2021 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n UK \n \n \n \n \n \n \n \n \n 967 \n \n \n \n \n \n 319 \n \n \n \n \n Rest of Europe \n \n \n \n \n \n \n \n \n 5,571 \n \n \n \n \n \n 6,074 \n \n \n \n \n Rest of the World \n \n \n \n \n \n \n \n \n 3,692 \n \n \n \n \n \n 4,757 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 10,230 \n \n \n \n \n \n 11,150 \n \n \n \n \n   \n 4    Operating loss \n   \n The operating loss is stated after charging/(crediting): \n \n \n \n \n \n \n \n          2022 \n £'000 \n \n \n 2021 \n £'000 \n \n \n \n \n Operating loss is stated after charging/(crediting): \n \n \n   \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Other operating income \n \n \n   \n \n \n \n \n \n \n \n  Amortisation of deferred government capital grant income \n \n \n (49) \n \n \n (31) \n \n \n \n \n  Government revenue grant income in respect of development work \n \n \n (389) \n \n \n - \n \n \n \n \n  Government job retention scheme income \n \n \n (1) \n \n \n (1) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Amortisation of intangible assets \n \n \n 180 \n \n \n 191 \n \n \n \n \n Depreciation of property, plant and equipment \n \n \n 592 \n \n \n 561 \n \n \n \n \n Depreciation of right-of-use assets \n \n \n 203 \n \n \n 160 \n \n \n \n \n Loss on disposal of fixed assets \n \n \n 55 \n \n \n - \n \n \n \n \n Cost of inventory sold \n \n \n 5,092 \n \n \n 4,379 \n \n \n \n \n Research and development expenditure expensed in the year \n \n \n 925 \n \n \n 114 \n \n \n \n \n Short term lease rentals \n \n \n 22 \n \n \n 24 \n \n \n \n \n Foreign exchange (gains)/losses \n \n \n (45) \n \n \n 164 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Exceptional or non-recurring costs \n \n \n   \n \n \n \n \n \n \n \n  IPO preparation related costs \n \n \n 381 \n \n \n 198 \n \n \n \n \n  Restructuring related costs \n \n \n 529 \n \n \n - \n \n \n \n \n  Contract termination costs \n \n \n 382 \n \n \n - \n \n \n \n \n  Impairment of intangible fixed assets \n \n \n 577 \n \n \n - \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Auditor's remuneration \n \n \n   \n \n \n \n \n \n \n \n For audit \n \n \n 85 \n \n \n 62 \n \n \n \n \n For tax advisory services \n \n \n - \n \n \n 6 \n \n \n \n \n For other assurance services \n \n \n - \n \n \n 15 \n \n \n \n \n   \n £232,000 of fees payable to the auditors in respect of IPO reporting accountants related services were expensed or included in costs taken to the share premium account. \n   \n   \n 5    Staff and key management \n   \n \n \n \n \n   \n Average monthly number of employees \n \n \n   \n \n \n   \n \n \n Year ended 31 December 2022 \n \n \n   \n \n \n Year ended 31 December 2021 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n Number \n \n \n   \n \n \n Number \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Management \n \n \n \n \n \n \n \n \n 15 \n \n \n \n \n \n 4 \n \n \n \n \n Sales \n \n \n \n \n \n \n \n \n 2 \n \n \n \n \n \n 5 \n \n \n \n \n Production \n \n \n \n \n \n \n \n \n 146 \n \n \n \n \n \n 140 \n \n \n \n \n Administration \n \n \n \n \n \n \n \n \n 5 \n \n \n \n \n \n 4 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 168 \n \n \n \n \n \n 153 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Payroll costs \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n Gross salaries \n \n \n \n \n \n \n \n \n 4,577 \n \n \n \n \n \n 3,860 \n \n \n \n \n Social security costs \n \n \n \n \n \n \n \n \n 511 \n \n \n \n \n \n 369 \n \n \n \n \n Share based payment \n \n \n \n \n \n \n \n \n 96 \n \n \n \n \n \n 145 \n \n \n \n \n Contributions to money purchase pension schemes \n \n \n \n \n \n \n \n \n 318 \n \n \n \n \n \n 233 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 5,502 \n \n \n \n \n \n 4,607 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n In view of the size and nature of the Group, the Key Management Personnel in the period is considered to comprise only the directors of the parent and subsidiary companies. The Company directors' remuneration was as follows (disclosed in aggregate in respect of Strip Tinning Limited directors in the prior year). \n   \n \n \n \n \n Year ended 31 December 2022 \n \n \n Salary \n \n \n   \n \n \n Benefits in kind \n \n \n   \n \n \n Share based payment \n \n \n   \n \n \n Pension \n \n \n   \n \n \n Total \n \n \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n R W Barton \n \n \n 15 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n 15 \n \n \n \n \n P George \n \n \n 37 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n 37 \n \n \n \n \n A Le Van \n \n \n 140 \n \n \n   \n \n \n 4 \n \n \n   \n \n \n 12 \n \n \n   \n \n \n 8 \n \n \n   \n \n \n 164 \n \n \n \n \n A D Robson \n \n \n 86 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n 86 \n \n \n \n \n M Taylor \n \n \n 37 \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n - \n \n \n   \n \n \n 37 \n \n \n \n \n \n \n \n 315 \n \n \n   \n \n \n 4 \n \n \n   \n \n \n 12 \n \n \n   \n \n \n 8 \n \n \n   \n \n \n 339 \n \n \n \n \n Year ended 31 December 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Aggregate emoluments \n \n \n 335 \n \n \n \n \n \n - \n \n \n \n \n \n 145 \n \n \n \n \n \n 13 \n \n \n \n \n \n 493 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Retirement benefits were accruing to 1 director in respect of defined contribution schemes (2021: 2). The highest paid director in 2022 received £156,000 of remuneration and £8,000 of employer pension contributions. \n Key management remuneration was £941,000 (2021: £535,000) including £23,000 of pension contributions (2021: £13,000). \n   \n   \n   \n   \n   \n   \n 6    Finance costs \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n Year ended 31 December 2022 \n \n \n   \n \n \n Year ended 31 December 2021 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest payable on hire purchase obligations \n \n \n \n \n \n \n \n \n 55 \n \n \n \n \n \n 71 \n \n \n \n \n Bank interest \n \n \n \n \n \n \n \n \n 26 \n \n \n \n \n \n 21 \n \n \n \n \n Lease liability finance charges \n \n \n \n \n \n \n \n \n 66 \n \n \n \n \n \n 66 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 147 \n \n \n \n \n \n 158 \n \n \n \n \n   \n   \n   \n   \n 7    Income tax \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n Year ended 31 December 2022 \n \n \n   \n \n \n Year ended 31 December 2021 \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n \n \n Current tax: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n UK corporation tax \n \n \n \n \n \n \n \n \n (308) \n \n \n \n \n \n (195) \n \n \n   \n \n \n \n \n Adjustment for prior periods \n \n \n \n \n \n \n \n \n (79) \n \n \n \n \n \n - \n \n \n   \n \n \n \n \n Total current tax credit \n \n \n \n \n \n \n \n \n (387) \n \n \n \n \n \n (195) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Deferred tax: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Origination and reversal of temporary differences \n \n \n \n \n \n \n \n \n (349) \n \n \n \n \n \n (161) \n \n \n   \n \n \n \n \n Effect of change in tax rate \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n 135 \n \n \n   \n \n \n \n \n Adjustment for prior periods \n \n \n \n \n \n \n \n \n 11 \n \n \n \n \n \n (16) \n \n \n   \n \n \n \n \n Total deferred tax credit \n \n \n \n \n \n \n \n \n (338) \n \n \n \n \n \n (42) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n Total tax credit \n \n \n \n \n \n \n \n \n (725) \n \n \n \n \n \n (237) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n The tax rate used for the reconciliation is the corporate tax rate of 19% (2021: 19%) payable by corporate entities in the UK on taxable profits under UK tax law. In May 2021 an increase to 25% from April 2023 was substantively enacted and, as the expected period of reversal, is accordingly applied to deferred tax balances at 31 December 2021 and 2022. \n The credit for the year can be reconciled to the loss for the year as follows: \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n Year ended 31 December 2022 \n \n \n   \n \n \n Year ended 31 December 2021 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Loss before taxation \n \n \n \n \n \n \n \n \n (5,650) \n \n \n \n \n \n (1,062) \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Income tax calculated at 19% (2021: 19%) \n \n \n \n \n \n \n \n \n (1,074) \n \n \n \n \n \n (202) \n \n \n \n \n Expenses not deductible \n \n \n \n \n \n \n \n \n 92 \n \n \n \n \n \n 35 \n \n \n \n \n Enhanced research and development allowances \n \n \n \n \n \n \n \n \n (132) \n \n \n \n \n \n (84) \n \n \n \n \n Enhanced capital allowances \n \n \n \n \n \n \n \n \n (29) \n \n \n \n \n \n (41) \n \n \n \n \n Deduction on exercise of share options \n \n \n \n \n \n \n \n \n (34) \n \n \n \n \n \n - \n \n \n \n \n Differing deferred and corporate tax rates \n \n \n \n \n \n \n \n \n (83) \n \n \n \n \n \n - \n \n \n \n \n Deferred tax asset in respect of share options \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n (64) \n \n \n \n \n Effect of change in deferred tax rate \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n 135 \n \n \n \n \n Deferred tax not recognised in respect of losses \n \n \n \n \n \n \n \n \n 603 \n \n \n \n \n \n - \n \n \n \n \n Adjustment for prior periods \n \n \n \n \n \n \n \n \n (68) \n \n \n \n \n \n (16) \n \n \n \n \n Total tax credit \n \n \n \n \n \n \n \n \n (725) \n \n \n \n \n \n (237) \n \n \n \n \n   \n In addition, a deferred tax credit of £nil (2021: £225,000) has been taken directly to retained earnings in equity in accordance with IAS12. This is in respect of the extent to which the potential corporate tax deduction exceeds the share based payment charges. \n 8    Earnings per share \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n Year ended 31 December 2022 \n \n \n   \n \n \n Year ended 31 December 2021 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Loss used in calculating earnings per share (£'000) \n \n \n \n \n \n \n \n \n (4,925) \n \n \n \n \n \n (825) \n \n \n \n \n Weighted average number of shares ('000) \n \n \n \n \n \n \n \n \n 14,612 \n \n \n \n \n \n 10,000 \n \n \n \n \n Basic and diluted loss per share (pence) \n \n \n \n \n \n \n \n \n (33.7) \n \n \n \n \n \n (8.25) \n \n \n \n \n   \n   \n Earnings per share has been calculated based on the share capital of the parent company (and equivalent share capital for 2021). There are options in place over 254,051 (2021: 813,045) shares that were anti-dilutive at the year end but which may dilute future earnings per share. \n \n \n   \n 9    Intangible assets \n   \n   \n \n \n \n \n   \n   Group \n \n \n Development costs \n £'000 \n \n \n Patents           \n   \n £'000 \n \n \n Computer \n software \n £'000 \n \n \n Total \n   \n £'000 \n \n \n \n \n Cost \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n At 1 January 2021 \n \n \n 1,298 \n \n \n 138 \n \n \n 90 \n \n \n 1,526 \n \n \n \n \n Additions \n \n \n 487 \n \n \n 9 \n \n \n 236 \n \n \n 732 \n \n \n \n \n At 31 December 2021 \n \n \n 1,785 \n \n \n 147 \n \n \n 326 \n \n \n 2,258 \n \n \n \n \n Additions \n \n \n 430 \n \n \n 1 \n \n \n 57 \n \n \n 488 \n \n \n \n \n Disposals \n \n \n - \n \n \n - \n \n \n (15) \n \n \n (15) \n \n \n \n \n Removal of fully impaired assets \n \n \n (594) \n \n \n - \n \n \n - \n \n \n (594) \n \n \n \n \n At 31 December 2022 \n \n \n 1,621 \n \n \n 148 \n \n \n 368 \n \n \n 2,137 \n \n \n \n \n Accumulated amortisation \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n At 1 January 2021 \n \n \n 296 \n \n \n 127 \n \n \n 83 \n \n \n 506 \n \n \n \n \n Charge for the year \n \n \n 180 \n \n \n 5 \n \n \n 6 \n \n \n 191 \n \n \n \n \n At 31 December 2021 \n \n \n 476 \n \n \n 132 \n \n \n 89 \n \n \n 697 \n \n \n \n \n Charge for the year \n \n \n 176 \n \n \n 4 \n \n \n - \n \n \n 180 \n \n \n \n \n Impairment in the year \n \n \n 577 \n \n \n - \n \n \n - \n \n \n 577 \n \n \n \n \n Removal of fully impaired assets \n \n \n (594) \n \n \n - \n \n \n - \n \n \n (594) \n \n \n \n \n At 31 December 2022 \n \n \n 635 \n \n \n 136 \n \n \n 89 \n \n \n 860 \n \n \n \n \n Net book amount \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n At 31 December 2022 \n \n \n 986 \n \n \n 12 \n \n \n 279 \n \n \n 1,277 \n \n \n \n \n At 31 December 2021 \n \n \n 1,309 \n \n \n 15 \n \n \n 237 \n \n \n 1,561 \n \n \n \n \n   \n   \n The Group has a programme of research and development projects to improve the efficiency and functionality of its products. Capitalised development costs relate to the projects evaluated as viable and where the successful developments are being applied and contributing to revenue. \n Included within the carrying amount of the above, are assets held under hire purchase agreements of £159,000 (2021: £159,000) relating to software. Amortisation charged on these assets in the year amounted to £nil (2021: £nil ). \n The 2022 impairment charge results from cancellation of a contract by a customer for which design and development work had been carried out and capitalised in 2021. \n   \n   \n   \n   \n   \n 10  Right-of -use assets \n   \n   \n \n \n \n \n   \n   Group \n \n \n Property leasehold \n  assets           \n   \n £'000 \n \n \n Plant and machinery \n  assets \n £'000 \n \n \n Total \n   \n £'000 \n \n \n \n \n Cost \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n At 1 January 2021 \n \n \n 1,656 \n \n \n 136 \n \n \n 1,792 \n \n \n \n \n Additions \n \n \n - \n \n \n 66 \n \n \n 66 \n \n \n \n \n Disposals \n \n \n - \n \n \n (77) \n \n \n (77) \n \n \n \n \n At 31 December 2021 \n \n \n 1,656 \n \n \n 125 \n \n \n 1,781 \n \n \n \n \n Additions \n \n \n 212 \n \n \n - \n \n \n 212 \n \n \n \n \n Disposals \n \n \n - \n \n \n (13) \n \n \n (13) \n \n \n \n \n At 31 December 2022 \n \n \n 1,868 \n \n \n 112 \n \n \n 1,980 \n \n \n \n \n Accumulated depreciation \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n At 1 January 2021 \n \n \n 465 \n \n \n 91 \n \n \n 556 \n \n \n \n \n Charge for the year \n \n \n 122 \n \n \n 38 \n \n \n 160 \n \n \n \n \n Disposals \n \n \n \n \n \n (77) \n \n \n (77) \n \n \n \n \n At 31 December 2021 \n \n \n 587 \n \n \n 52 \n \n \n 639 \n \n \n \n \n Charge for the year \n \n \n 168 \n \n \n 35 \n \n \n 203 \n \n \n \n \n Disposals \n \n \n - \n \n \n (13) \n \n \n (13) \n \n \n \n \n At 31 December 2022 \n \n \n 755 \n \n \n 74 \n \n \n 829 \n \n \n \n \n Net book amount \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n At 31 December 2022 \n \n \n 1,113 \n \n \n 38 \n \n \n 1,151 \n \n \n \n \n At 31 December 2021 \n \n \n 1,069 \n \n \n 73 \n \n \n 1,142 \n \n \n \n \n   \n   \n The financing charges in respect of right-of-use assets are disclosed in note 6 and the lease liabilities in 17. Short term rentals are disclosed in note 4 with no low value leases in either year. Right-of-use assets and l ease liabilities relate principally to property leases. The Group leases its main operating premises, typically on a ten year lease, subject to periodic rent reviews and potential breaks, with the intention and assumption made in measuring assets and liabilities that the full period will be utilised. Total cash outflows in respect of leases were £276,000 for the year ended 31 December 2022 (2021: £202,000). \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n 11  Property, plant and equipment \n   \n   \n \n \n \n \n   \n Group \n \n \n Leasehold improvements \n £000 \n \n \n Plant and machinery           \n £'000 \n \n \n Tooling           \n   \n £'000 \n \n \n Office equipment \n £'000 \n \n \n Total \n   \n   \n £'000 \n \n \n \n \n Cost \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n At 1 January 2021 \n \n \n 402 \n \n \n 5,222 \n \n \n 1,018 \n \n \n 122 \n \n \n 6,764 \n \n \n \n \n Additions \n \n \n 95 \n \n \n 515 \n \n \n 94 \n \n \n 33 \n \n \n 737 \n \n \n \n \n Disposals \n \n \n - \n \n \n (633) \n \n \n - \n \n \n - \n \n \n (633) \n \n \n \n \n At 31 December 2021 \n \n \n 497 \n \n \n 5,104 \n \n \n 1,112 \n \n \n 155 \n \n \n 6,868 \n \n \n \n \n Additions \n \n \n 19 \n \n \n 408 \n \n \n 65 \n \n \n 16 \n \n \n 508 \n \n \n \n \n Disposals \n \n \n (69) \n \n \n (31) \n \n \n (22) \n \n \n - \n \n \n (122) \n \n \n \n \n At 31 December 2022 \n \n \n 447 \n \n \n 5,481 \n \n \n 1,155 \n \n \n 171 \n \n \n 7,254 \n \n \n \n \n Accumulated depreciation \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n At 1 January 2021 \n \n \n 236 \n \n \n 3,000 \n \n \n 512 \n \n \n 103 \n \n \n 3,851 \n \n \n \n \n Charge for the year \n \n \n 27 \n \n \n 374 \n \n \n 139 \n \n \n 21 \n \n \n 561 \n \n \n \n \n Disposals \n \n \n - \n \n \n (633) \n \n \n - \n \n \n - \n \n \n (633) \n \n \n \n \n At 31 December 2021 \n \n \n 263 \n \n \n 2,741 \n \n \n 651 \n \n \n 124 \n \n \n 3,779 \n \n \n \n \n Charge for the year \n \n \n 31 \n \n \n 322 \n \n \n 216 \n \n \n 23 \n \n \n 592 \n \n \n \n \n Disposals \n \n \n (62) \n \n \n (1) \n \n \n (4) \n \n \n - \n \n \n (67) \n \n \n \n \n At 31 December 2022 \n \n \n 232 \n \n \n 3,062 \n \n \n 863 \n \n \n 147 \n \n \n 4,304 \n \n \n \n \n Net book amount \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n At 31 December 2022 \n \n \n 215 \n \n \n 2,419 \n \n \n 292 \n \n \n 24 \n \n \n 2,950 \n \n \n \n \n At 31 December 2021 \n \n \n 234 \n \n \n 2,363 \n \n \n 461 \n \n \n 31 \n \n \n 3,089 \n \n \n \n \n   \n Included within the carrying amount of the above, are assets held under hire purchase agreements of £1,705,000 (2021: £1,482,000) relating to plant and machinery and £100,000 (2021: £190,000) relating to tooling. Depreciation charged on these assets in the year amounted to £213,000 (2021: £297,000). \n 12  Investments \n   \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n Shares in group undertakings \n       \n \n \n \n \n Company \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n \n \n Additions and at 31 December 2022 \n \n \n   \n \n \n   \n \n \n 3,841 \n \n \n \n \n   \n The Company acquired all of the shares in Strip Tinning Limited by a share for share exchange on 2 February 2022 with the £3,745,000 cost of investment recorded in accordance with IAS 27. £96,000 of additions also arise as a result of the treatment of the share based payment charge in the subsidiary as a capital contribution. Strip Tinning Limited is incorporated and registered in England at Arden Business Park, Arden Road, Frankley Birmingham, West Midlands, B45 0JA.It manufactures automotive busbar, ancillary connectors and flexible printed circuits. \n   \n   \n   \n 13  Inventories \n \n \n \n \n \n \n \n   \n \n \n 31 December 2022 \n \n \n  31 December 2021 \n       \n \n \n \n \n Group \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Raw materials and consumables \n \n \n   \n \n \n 1,536 \n \n \n 1,714 \n \n \n \n \n Finished goods and goods for resale \n \n \n   \n \n \n 312 \n \n \n 300 \n \n \n \n \n \n \n \n   \n \n \n 1,848 \n \n \n 2,014 \n \n \n \n \n An inventory impairment loss of £479,000 (2021: £nil) was recognised in the year. \n   \n   \n 14  Trade and other receivables \n   \n \n \n \n \n   \n \n \n   \n \n \n Group \n \n \n \n \n \n Company \n \n \n \n \n   \n \n \n   \n \n \n 31 December 2022 \n \n \n  31 December 2021 \n       \n \n \n 31 December 2022 \n \n \n \n \n Current \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Trade receivables \n \n \n   \n \n \n 2,691 \n \n \n 3,039 \n \n \n - \n \n \n \n \n Impairment provision \n \n \n   \n \n \n - \n \n \n (25) \n \n \n - \n \n \n \n \n Net trade receivables \n \n \n   \n \n \n 2,691 \n \n \n 3,014 \n \n \n   \n \n \n \n \n Amounts owed by group undertakings \n \n \n   \n \n \n - \n \n \n - \n \n \n 5,776 \n \n \n \n \n Other receivables \n \n \n   \n \n \n 267 \n \n \n 131 \n \n \n - \n \n \n \n \n Prepayments \n \n \n   \n \n \n 423 \n \n \n 633 \n \n \n 15 \n \n \n \n \n \n \n \n   \n \n \n 3,381 \n \n \n 3,778 \n \n \n 5,791 \n \n \n \n \n                 \n The directors consider that the carrying amount of trade and other receivables approximates to their fair value. \n Amounts owed by group undertakings are unsecured, interest free and have no fixed repayment date. \n The impairment charge and movement in the expected credit loss provision against trade receivables is as follows: \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n At 1 January 2022/2021 \n \n \n \n \n \n \n \n \n 25 \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n Impairment charge for the year \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n 25 \n \n \n \n \n \n \n \n \n \n \n Debt written off \n \n \n \n \n \n \n \n \n (25) \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n At 31 December 2022/2021 \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n 25 \n \n \n \n \n \n \n \n \n \n \n   \n   \n   \n   \n Ageing of trade receivables past their due dates but not provided were: \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n Less than 30 days overdue \n \n \n   \n \n \n 30 to 60  days overdue \n \n \n   \n \n \n More than 60 days overdue \n \n \n \n \n \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n   \n \n \n £'000 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31 December 2021 \n \n \n 405 \n \n \n \n \n \n 119 \n \n \n \n \n \n 148 \n \n \n \n \n 31 December 2022 \n \n \n 498 \n \n \n   \n \n \n 289 \n \n \n   \n \n \n 237 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n The directors consider the credit quality of trade and other receivables that are neither past due nor impaired to be of good quality with the impairment charge arising principally from one former customer. \n 15  Trade and other payables \n   \n \n \n \n \n   \n \n \n   \n \n \n Group \n \n \n \n \n \n Company \n \n \n \n \n   \n \n \n   \n \n \n 31 December 2022 \n \n \n  31 December 2021 \n       \n \n \n 31 December 2022 \n \n \n \n \n Current \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Trade payables \n \n \n   \n \n \n 2,211 \n \n \n 2,985 \n \n \n 67 \n \n \n \n \n Other payables \n \n \n   \n \n \n 41 \n \n \n - \n \n \n - \n \n \n \n \n Taxation and social security \n \n \n   \n \n \n 117 \n \n \n 336 \n \n \n - \n \n \n \n \n Accruals \n \n \n   \n \n \n 476 \n \n \n 715 \n \n \n - \n \n \n \n \n Deferred income \n \n \n   \n \n \n 200 \n \n \n 377 \n \n \n - \n \n \n \n \n \n \n \n   \n \n \n 3,045 \n \n \n 4,413 \n \n \n 67 \n \n \n \n \n Non current liabilities \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Accruals \n \n \n   \n \n \n - \n \n \n 19 \n \n \n - \n \n \n \n \n Deferred income (grants) \n \n \n   \n \n \n 37 \n \n \n 143 \n \n \n - \n \n \n \n \n \n \n \n   \n \n \n 37 \n \n \n 162 \n \n \n - \n \n \n \n \n   \n   \n 16  Borrowings \n   \n \n \n \n \n   \n \n \n   \n \n \n Group \n \n \n \n \n \n Company \n \n \n \n \n   \n \n \n   \n \n \n 31 December 2022 \n \n \n  31 December 2021 \n       \n \n \n 31 December 2022 \n \n \n \n \n Current liabilities \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Loans \n \n \n   \n \n \n 74 \n \n \n 61 \n \n \n - \n \n \n \n \n Hire purchase liabilities \n \n \n   \n \n \n 479 \n \n \n 498 \n \n \n - \n \n \n \n \n \n \n \n   \n \n \n 553 \n \n \n 559 \n \n \n - \n \n \n \n \n Non current liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Loans \n \n \n   \n \n \n 208 \n \n \n 294 \n \n \n - \n \n \n \n \n Hire purchase liabilities \n \n \n   \n \n \n 784 \n \n \n 941 \n \n \n - \n \n \n \n \n \n \n \n   \n \n \n 992 \n \n \n 1,235 \n \n \n - \n \n \n \n \n   \n Hire purchase obligations are secured by fixed charges over intangible and tangible fixed assets and floating charges over other assets and undertakings of the Group. All obligations fall due within five years with the exception of £40,000 as at 31 December 2021. This related to a hire purchase liability of £304,000 repayable over 6 years with interest at 7%. The total payments including interest in respect of hire purchase liabilities are shown in note 18. \n   \n   \n   \n 17  Lease liabilities \n   \n   \n \n \n \n \n Group \n \n \n 31 December 2022 \n \n \n  31 December 2021 \n       \n \n \n \n \n \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Current \n \n \n 182 \n \n \n 152 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Due in one to five years \n \n \n 588 \n \n \n 551 \n \n \n \n \n Due in more than five years \n \n \n 407 \n \n \n 553 \n \n \n \n \n \n \n \n 995 \n \n \n 1,104 \n \n \n \n \n   \n The total payments including interest in respect of lease liabilities are shown in note 18. \n   \n   \n 18  Movements in total financing liabilities \n  ...

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