Building products for a sustainable future
The Alumasc Group plc
Report and Accounts 2022
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Strategic report
Building products for
a sustainable future
by delivering on our purpose to provide high-quality,
low carbon, sustainable products and solutions
We are a UK-based supplier of sustainable building products, systems
and solutions, the majority of which manage the scarce resources
of water and energy within the built environment, and improve the
quality of life for the owner/occupier using recyclable materials.
Strategic report
Governance
Financial Statements & Company Information
Board of Directors
52
Corporate Governance Statement 54
59
Nomination Committee Report
60
Audit Committee Report
64
Directors’ Remuneration Report
Directors’ Report
73
Statement of Directors’
Responsibilities
76
Highlights
Chair’s Statement
& Investment Case
Our Strategy
Our Business Model
Operating Segments
Chief Executive’s Review
Financial Review
ESG Report
TCFD
Section 172 Statement
Principal Risks and Uncertainties
Risk Management Process
Non-financial Information
Statement
1
6
8
10
12
18
22
25
40
42
46
50
51
Independent Auditor’s Report
77
Consolidated Statement of Comprehensive Income 81
82
Consolidated Statement of Financial Position
83
Consolidated Statement of Cash Flows
84
Consolidated Statement Of Changes In Equity
85
Notes to the Financial Statements
112
Company Statement of Financial Position
113
Company Statement of Cash Flows
114
Company Statement of Changes in Equity
115
Notes to the Company Financial Statements
129
Financial Summary
130
Additional Shareholder Information
132
List of Subsidiaries
133
Business and Operating Locations
134
Company Information and Advisers
135
Notice of Annual General Meeting
The Alumasc Group plc Report and Accounts 2022
Highlights
Strategic report
Governance
Financial statements
Financial Highlights
Operational Highlights
• Strong revenue and profit growth in
core businesses
• Operating margin increased despite input
cost increases
• Investment in sales and product
management resource to improve capability
• Strategic decision to sell Levolux to focus on
core businesses
• Actively looking for synergistic acquisitions
• Focused on investments in new products,
manufacturing capability and automation
• Close alignment to the sustainability
agenda – awarded London Stock Exchange
Green Economy Mark
• Pensions deficit reduced further, resulting in
agreement to reduce annual contributions
to £1.2m from £2.3m
Revenue*
£89.4m
2020/2021: £77.8m
Underlying* PBT
£12.7m
2020/2021: £10.0m
Reported PBT
£(5.0)m
2020/2021: £9.8m
Underlying* EPS
28.6p
2020/2021: 22.5p
Dividends per share
10.0p
2020/2021: 9.5p
Net bank debt
£4.7m
2020/2021: £0.9m
* From continuing operations. A reconciliation of
underlying to statutory profit before tax is provided
in note 5 to the Group financial statements.
The Alumasc Group plc Report and Accounts 2022
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Strategic report
Highlights continued
Making a difference
Creating long-term stakeholder value by understanding
and managing our impact on the planet.
Our values:
• Trustworthy
• Responsible
• Passionate about sustainability
Social
Creating a safe, healthy and
empowering working environment
Our focus
• Health & Safety
• Diversity/equal opportunities
• Employee engagement
• Community engagement
Our goals
• Zero harm
• Diverse and empowering place to work
• Support local communities
Read more
Sustainability: Social – p36
Environment
Governance
Minimising the impact of our operations
while making and selling products which
have a positive impact on the environment
Our focus
• Environmental solutions
• Sustainable materials
• Energy management
• Packaging/waste reduction
Our goals
• Provide environmental solutions for the built environment
• Promote circular economy
• Minimise GHG emissions
• Reduce and recycle waste
Read more
Our environmental solutions – p27 and 28
Sustainability: Environmental – p26
Our values: Conducting ourselves in an
open, ethical and responsible manner
Our focus
• Board oversight
• Meaningful governance
• Code of Conduct
• Anti-modern slavery/human trafficking
• Anti-bribery and corruption
• Responsible Tax policy
• Supplier treatment policies
• Risk management
Our goals
• Developing long-term relationships
with stakeholders
• Meet or exceed all applicable regulations
• Ethical supply chain
• Understand and manage our risks
Read more
Sustainability: Governance – p38
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Strategic report
Governance
Financial statements
Alignment with United Nations Sustainable Development Goals (UN SDGs).
Indicators
•
Increased proportion of domestic and
industrial wastewater flows safely treated
Improved water use efficiency
Increased level of integrated water
resources management
•
•
Indicators
• Develop quality, reliable, sustainable
•
and resilient infrastructure
Upgrade infrastructure and industry to
make it sustainable, resource-efficient
and environmentally sound
• Enhance industrial technological capability
Indicators
• Enhance inclusive and sustainable
urbanisation
Increase weather resilience
•
• Provide access to safe, inclusive and
accessible, green and public spaces
Impacts
• Roofing and Water Management products
support Sustainable Urban Drainage
Systems (SUDS)
Impacts
• GHG emission management
• Renewable energy sourcing
• Sustainable products
Impacts
• Roofing division provides urban green
and amenity space, aiding biodiversity
Insulation and ventilation products improve
energy performance contributing towards
zero carbon buildings
•
• Drainage products and green and blue
roofs assist stormwater management
Indicators
• Promote sustainable management
and efficient use of natural resources
• Reduce waste generation through
prevention, reduction, recycling and reuse
Impacts
• Durable products designs to last for life of building
• Maximise recycled content
• Products repairable and recyclable at end of life
• Use of recycled packaging
• Waste reduction
Other UN SDGs supported
• Shareholder engagement
• Customer engagement
• Banker engagement
• Employee diversity
• Community and
environmental
engagement
• Employee health and safety
• Employee engagement
• Health & Safety
• Supplier engagement
The Alumasc Group plc Report and Accounts 2022
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Strategic report
Highlights continued
Sustainability at heart
Water Management
Building Envelope
See page 12
for more on our
Water Management division
See page 14
for more on our
Building Envelope division
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The Alumasc Group plc Report and Accounts 2022
Housebuilding Products
See page 16
for more on our
Housebuilding Products division
Strategic report
Governance
Financial statements
At Alumasc sustainability is
at the heart of what we do.”
Chief Executive“
Paul Hooper
The Alumasc Group plc Report and Accounts 2022
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Strategic report
Chair’s Statement
Strong performance
“ Alumasc’s business has
demonstrated strong
momentum and resilience,
delivering underlying profits
from continuing operations
substantially ahead of
a successful prior year.”
I am pleased to present my first
report as Chair, following the
retirement of John McCall on
31 December 2021. On behalf
of Alumasc’s stakeholders, I
would like to once again record
my sincere thanks to John for
his leadership, contribution and
unwavering support to Alumasc
over many years.
In another year of unprecedented
challenges, including continued
Covid disruption, the war in
Ukraine, cost inflation not seen
for a generation and labour
shortages, Alumasc’s business has
demonstrated strong momentum
and resilience, delivering
underlying profits from continuing
operations substantially ahead of
a successful prior year.
Performance
Revenues grew by 15% from £77.8 million
to £89.4 million* and underlying pre tax
profits from £10.0 million to £12.7 million*.
Alumasc’s Net Debt increased to £4.7
million, compared to £0.9 million to last
year. This reflects higher inventory levels
to protect against material shortages as
well as Capex of £2.6 million, repaying
pandemic related government support
of £0.7 million, dividend payments of
£3.4 million and pension contributions
of ££2.6 million. Our bank credit facilities
have recently been increased to £29.0
million, to allow Alumasc to invest both
for organic and inorganic growth.
Strategy – organic growth
Alumasc’s divisions have been encouraged
to reset their plans to deliver faster and
more ambitious growth. As a result, the
divisions have invested in additional
high-quality people to accelerate product
development and sales and we expect
to reap the benefits in the coming years.
In addition, following the successful cost
reductions achieved from streamlining our
operations in 2020, Alumasc is examining
the potential to drive further efficiencies
across the Group.
Strategy – corporate transactions
Following a strategic review, the Alumasc
Board agreed that Levolux, with its focus
on installation, was non-core and it would
be better positioned under new ownership.
Levolux was sold on 26 August 2022 to
Talrus Limited, a company associated with
leading private investors, Rcapital. They are
well placed to support the Levolux business
and management team, and we wish the
Levolux team and Talrus well.
Alumasc is also actively looking for
synergistic acquisitions to supplement
its organic growth.
ESG
Our contribution to environmental
sustainability through the energy and water
efficient products that we develop and
sell was recognised by the London Stock
Exchange awarding Alumasc its Green
Economy Mark in the year. This is awarded
to companies that derive the majority of
their revenues from environmentally
friendly solutions and is appropriate
recognition of the many Alumasc
colleagues who strive daily to produce
solutions to combat climate change for
our customers and planet.
In the rest of this report are examples
of some of our climate friendly products,
as well as the social/community
contributions made by Alumasc’s people
and the Board’s commitment to high
standards of corporate governance.
Pension scheme
As shown in Note 22, the defined benefit
pension scheme deficit has further reduced
in the year from £4.6 million to £2.1 million.
I would like to thank both our Management
Team and the Pension Scheme Trustees
for the collaborative approach they
have adopted to make further inroads
to the deficit for the benefit of Scheme
Members, through a combination of
Company pension contributions, sensible
asset investment decisions and the impact
of gilt yields on liability calculations.
Agreement has also been reached with the
Trustees to reduce the Company’s pension
contributions to £1.2 million pa (previously
£2.3 million) until the next triennial valuation
in 2025, in recognition of the reduced
scheme deficit.
Dividends
I am pleased to confirm that the Board
continues to pursue a progressive dividend
policy. An interim dividend of 3.35p per
share was paid in April 2022 and our
proposed final dividend, if approved by
shareholders, is 6.65p, making a total
distribution for the year of 10.0p per share
(2020/21: 9.5p per share).
Board
As mentioned elsewhere, John McCall
and Jon Pither, having given a combined
nearly 70 years of loyal service to Alumasc,
retired during the year. On behalf of all
our stakeholders, I thank them for their
immense contribution and wish them
long and happy retirements.
*
From continuing operations. See Note 5 to the Group Financial Statements for reconciliation to statutory profits.
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The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Stephen Beechey took on the role of
Remuneration Committee Chair following
Jon’s retirement. The Board was very
pleased to welcome Karen McInerney to
the Board as a Non-executive Director and
Chair of the Audit Committee in the year.
Karen brings a wealth of financial, treasury
and risk management experience from
having worked in a small listed company
which is now a FTSE 250 group and we
are already benefitting from her insights.
Looking ahead and
Alumasc’s people
Whilst economic and geopolitical
conditions continue to be unpredictable
and will doubtless lead to some volatility,
Alumasc has a clear long-term strategy of
organic and inorganic growth focused on
sustainable building products.
Our people have demonstrated remarkable
resilience and adaptability in the past two
and a half years, and I am sure they will
continue to do so in the times ahead to
deliver a strong performance for our various
stakeholders. The Board and I thank our
staff colleagues for their continued hard
work and commitment.
Vijay Thakrar
Chair
6 September 2022
Case for investing in Alumasc
Re-shaped portfolio provides a platform for strategic acceleration
• All divisions capable of delivering sustained and profitable organic growth
• Focussed group of niche businesses supplying high quality construction products
• Scope to accelerate growth through people and product investment and value
accretive acquisitions
Business set to benefit from long term structural growth drivers
• 80% of Alumasc products specified to deliver environmental benefits
• Commitment to sustainability in construction recognised by the LSE Green
Economy mark
• Sustainability focus underpins potential for growth ahead of underlying markets
Premium products and brands, with strong market positions
• High margin, premium products typically specified by customers and regulations
• Trusted brands across commercial, new build residential and RMI markets
• Leading niche market positions with a growing digital presence
•
Increasing recognition in overseas export markets
Entrepreneurial, de-centralised model to optimise efficiency and agility
• Divisional structure with underlying brands given freedom to exploit market
opportunities
• Customer-centric culture focussed on delivering excellent service
• Well invested and efficient manufacturing facilities alongside robust supply chains
Strengthened financial position provides capacity to invest for growth
• Very low levels of indebtedness, with leverage below 0.5x EBITDA
• Pension position further strengthened with reduced deficit of c.£2m and annual
contributions reducing by c.50%
• Ability to invest for growth, whilst driving improved returns on capital
Potential to deliver significant shareholder value
• Targeting further improvement in Group margins and cash generation
• Acquisition activity expected to accelerate, with a strong pipeline of opportunities
• Delivering a progressive dividend policy
The Alumasc Group plc Report and Accounts 2022
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Strategic report
Our Strategy
Our strategy –
sustainability at its heart
Our strategic objectives
FY22* progress
Revenue growth
• Attractive positions in niche markets,
supported by long term growth drivers
• Differentiation through premium brands
service/support, sustainable products, materials
• New channels, new geographies, adjacent
markets and cross-selling
• M&A used to accelerate progress
Margin improvement
• Brand strength, supported by quality
know-how and customer service
• Develop higher value – continue adding
green products and solutions
• Manufacturing efficiency
• New Product Development
Revenue
£89.4m
2020/2021: £77.8m
Return on sales
14.9%
2020/2021: 13.5%
Efficiency
• Efficient centre, day-to-day responsibility
devolved to agile and customer-focused
operating companies
Investment in people, capacity and capability
•
• Working capital managed to maximise
efficiency while ensuring adequate inventory
levels
Cash conversion
as a % of
operating profit
85%
2020/2021: 121%
Return on
Invested Capital
25.8%
2020/21: 18.4%
Responsible business with focus
on sustainability
• Capability investment to increase use
of recycled material
• Collaboration with raw material suppliers
to improve recycled content
• Electricity from renewable sources
• Continued investment in energy-efficient
plant and machinery
• Transition to electric vehicles
• Number of days lost annually due to
accidents at our sites
Use of recycled
materials
75%
2020/2021: 75%
Intensity ratio
(scopes 1&2) per
£m of revenue
23.36%
Intensity ratio reduction since
baseline year 2016/2017: 52.46%
Cash generative growth which supports
• Capital and people investment to support
organic growth
• Working capital
• Bolt-on M&A
• Progressive dividend
Capital expenditure
Dividend
£2.6m
2020/2021: £2.0m
10.0p
2020/2021: 9.5p
* From continuing operations
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The Alumasc Group plc Report and Accounts 2022
To be discussed
Strategic report
Governance
Financial statements
Building products for a sustainable future
by delivering on our purpose to provide high-quality,
low carbon, sustainable products and solutions.
Our measures
Ambition
• Growth in revenue from
continuing operations
• Increase in market share
• Growth of export markets
• Customer satisfaction
• Underlying operating profit
as a percentage of revenue
• Investment in efficiencies,
including new technology
• Growth in margin
• New products
Increased market share
Future goals
•
• Market known Brands
• Develop new markets
Increase in sales and profits
Future goals
•
• Sustainable solutions
• Develop new markets
• Manufacturing efficiency
• Underlying operating profit as a
percentage of shareholders’ funds,
including historic goodwill and
excluding cash/debt, pension deficit
(net of tax) and lease liabilities
Future goals
• Optimal inventory levels to maximise
working capital efficiency
Increase return of profit per head
Increased digitalisation to reduce costs
•
•
• Proportion of our raw material
consumption satisfied by
recycled materials
• Scope 1 & 2 market-based emissions
as a percentage of turnover
• Number of days lost annually
due to accidents at our sites
Future goals
• Continual increase in proportion of recycled/
recyclable products
• Staff wellbeing
• 0% of waste to landfill
• Transition of fleet to electric vehicles
• Organic and inorganic growth
• Training
• Progressive dividend
Future goals
• Targeted investment in capacity,
capability and efficiency
• M&A in value-accretive areas
The Alumasc Group plc Report and Accounts 2022
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Strategic report
Our Business Model
Living our Purpose of Building Products
for a Sustainable Future
We provide high-quality, low carbon, sustainable products, systems, and
solutions. We behave with integrity, building strong relationships and
trust with our customers and colleagues, and
deliver on our promises.
What we rely on
What we do and how we do it
Business Segments
Drivers
Water Management
See page 12
for more on our
Water Management
Water Management
Building Envelope
See page 14
for more on our
Building Envelope
Energy Management
Specified roofing solutions
Housebuilding Products
See page 16
for more on our
Housebuilding Products
Ease of construction
Underpinned by Sustainability and supporting the SDGs
Low carbon products | Durable and recyclable products | Sustainable Solutions for the Built environment
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The Alumasc Group plc Report and Accounts 2022
Resources Management style and peopleWe have an inclusive management style that helps empower our employeesWe value our staff and have de-centralised operating unitsOur people bring technical knowledge about our products and systems and passion for customer serviceEfficient central supportTechnical know-howWe are experts in what we doCreating new products to support sustainability in the building environmentIP/BrandsWe have registered patents and patents for our innovative products to protect our IP and have premium brandsCapital Investment in new technologyUse of new technology to support operationsProviding cleaner and energy efficient manufacturing To be discussed
Strategic report
Governance
Financial statements
Sustainable building
products backed by
strong brands
Customers/channels
to market
The value we create
80%
Specified Products
80% of Group revenues
are linked to specification
and regulation
80%+
Structural Growth
Over 80% of Group revenues
derive from environmental
products, systems and solutions
Customers
Housebuilders
Contractors
Merchants and
distributors
International market development
Export revenues, currently
15% of Group sales, are being
targeted in selected markets
Online digital platforms
Low carbon products | Durable and recyclable products | Sustainable Solutions for the Built environment
The Alumasc Group plc Report and Accounts 2022
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Repeat customersWe establish excellent relationships with our customersMotivated employeesOur staff are motivated, are trained and incentivised to provide exceptional customer serviceSustainable growthLong-term customers, excellent products and processesAim to grow the business with firm foundations and good brand reputationMargin improvement/ Superior returnsBy using new technology and having efficient operations, we can maintain and improve marginCombating climate changeBy providing sustainable and long-lasting productsZero carbon manufacturing by the Housebuilding Products divisionCommunitiesSupporting our communities Providing apprenticeships and local jobs Strategic report
Operating Segments
Water Management
Alumasc Water Management Solutions (‘AWMS’) deliver ‘Rain to Drain’ solutions that set
the standard for urban water management. Alumasc has been promoting the efficient
use, retention, recycling and disposal of water for almost 90 years.
Under the AWMS banner, customers benefit from rainwater and drainage products
that capture, retain and control the flow of rainwater in the most effective way inside
and outside buildings from origination source to water course, sewer or ground.
Growth drivers
• Legislation aimed at conservation,
attenuation and control of water
• Structural engineering specifications
• Building regulations
• Sustainable drainage
Operations and supply chain
• UK in-house manufacture
• Worldwide supply chain including
suppliers in Europe and North America
Routes to market
• Merchants and distributors
(some via preferred installers)
• Direct to customer via online
digital platforms
Opportunities and potential
• Outperformance of the UK
construction market through
continued market share gain
and introduction of new products
and systems
• Development of further synergies
in our ‘Rain to Drain’ strategy
•
Increase divisional export sales
with focus on systems using
Gatic and Wade products
• Grow operating margins through
new product introductions,
improving customer service
and operational efficiency
• Selective bolt-on acquisitions that
provide synergies, new products
and access to new channels
Financial Highlights
2021/2022
Revenue
£47.6m
2020/2021: £38.4m
Underlying operating margin*
18.4%
2020/2021: 15.9%
Underlying operating profit*
Operating profit
£8.8m
2020/2021: £6.1m
£8.7m
2020/2021: £6.0m
* Prior to brand amortisation charges of £0.1 million in both years.
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The Alumasc Group plc Report and Accounts 2022
Alumasc in action: Fulham
Football Club case study
A bespoke Gatic CastSlot system was
installed as part of the redevelopment
of the riverside stand for Craven
Cottage, home to Fulham FC. The
project incorporates Gatic CastSlot
Treadsafe, which was chosen to drain
away any excess surface water from
the seating/standing areas along the
deck of the stand.
The unobtrusive profile of CastSlot sits
neatly within concrete, asphalt, and block
surface finishes and features an electro
painted ductile iron throat section. This
is securely fixed to the galvanised steel
channel body to provide an exceptionally
robust yet discreet drainage system.
The treadsafe option was chosen for this
project. Treadsafe is available for areas
where there is regular foot traffic and
is available with a 10mm or 30mm
opening – ideal for stadium standing
and seating areas.
Bespoke access boxes were also created
for the new stand, and channel throat
depths were also extended for level
changes, allowing a constant invert
within the channel.
The major challenge for the project was
to extend the throat of the slot, which is
something that other similar products
manufactured by our competitors are
unable to do. With Gatic’s method of
manufacture, this was not a problem.
Specifiers and designers often incorporate
Gatic systems in their designs due to the
previous successes, the performance of
the product, the service and continual
technical support.
Established since 1928, the Gatic range
is renowned for innovation, quality and
performance across many prestigious
projects in the construction, transport
and utility markets.
Strategic report
Governance
Financial statements
“
Our core focus is on meeting customer and market
requirements. Our high-quality, durable products
have seen an increase in demand from customers
requiring sustainable drainage solutions.”
Paul Hooper
Chief Executive and Water Management Divisional Managing Director
The Alumasc Group plc Report and Accounts 2022
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Strategic report
Operating Segments continued
Building Envelope
We work with our customers to help create a sustainable future with efficient buildings
that connect people and communities. Our comprehensive range of building envelope
solutions includes roof waterproofing systems, green and landscaped garden roofing.
Our team collaborates with our clients to create tailored building envelope solutions
that address a multitude of challenges that we all face in protecting our environment
for future generations, including:
• Efficient use and reuse of materials
• Energy consumption reduction
• Comfort in use through control of heat, light, air and water
• Creation of additional amenity space
• Carbon capture
Growth drivers
• Architectural specification
• Building regulations relating
to energy management
• Demand for sustainable solutions
Operations and supply chain
•
Partial UK manufacture providing
fabrication, assembly and finishing
operations
• Diversified specialist supply chain of
mainly UK and European based suppliers
Routes to market
• Direct to main building contractors
in the UK
• Through general contractors
Opportunities and potential
• Business development opportunities
arising from the Alumasc Building
Envelope specification sales approach
• Market share gains through
product leadership and outstanding
customer service
Financial Highlights
2021/2022
Revenue
£29.4m
2020/2021: £28.4m
Underlying operating margin*
12.2%
2020/2021: 13.2%
Underlying operating profit*
Operating profit
£3.6m
2020/2021: £3.8m
£3.1m
2020/2021: £3.8m
*
From continuing operations. Underlying figures presented prior to restructuring costs of £0.5 million
in 2021/22.
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The Alumasc Group plc Report and Accounts 2022
“
The Building Envelope Division
continued its pursuit to face
the everyday challenges of
climate change and the drive
from clients and building
users to provide systems and
solutions that reduce carbon
from the atmosphere, are safe
to install and are comprised of
the highest levels of recycled
raw materials attainable.”
Gilbert Jackson
Executive Director and Building Envelope
Divisional Managing Director
Strategic report
Governance
Financial statements
One Chamberlain
Square Paradise Project
Creating Paradise:
Alumasc Delivers for the
Complete Building Envelope
for One Chamberlain Square
Paradise Project
One Chamberlain Square is the lead
project in a wider vision to create
Paradise in Birmingham — the most
important development the city has
seen in a generation.
With the help of Alumasc offering solutions
for the entire building envelope, One
Chamberlain Square is set to be a vibrant
mixed-use development that will also be
the new home of professional services firm
PwC, but will endeavour to maintain a balance
between busy urban hub and the natural world.
In order to do this, Alumasc provided a range of
products and services encompassing the entire
building envelope, specified by Weedon Architects.
This included a Blackdown Extensive Brown Roof,
applied over Hydrotech Hot Melt Waterproofing,
alongside Harmer Roof Outlets and bespoke
solutions from Roof-Pro, for building D: an eight-story
commercial building over a podium car park.
On the roof of Paradise
Blackdown’s Extensive Brown Roof is a green roof in the
making. A Brown Roof was applied over approximately
4000m2 of roof space for this project, One Chamberlain’s
‘brown’ roof is installed without plant life and will naturally
seed from plant material that either blows in from the local
environment or that is introduced by birds. In this way, it
literally replaces the green space that has been taken up by the
construction of the building it lies on, encouraging biodiversity
by providing and strengthening habitats for wildlife local to the
area, with truly local plant life.
“
This is an extremely high-profile development, which
demanded trusted, standard setting products. All systems
decided on were chosen on quality, durability and
enhanced design life compared to competition.”
Owen Doherty
Director at Weedon Architects and Project Architect
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Strategic report
Operating Segments continued
Housebuilding
Products
16
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Our brands
Financial Highlights
2021/2022
Revenue
£12.4m
2020/2021: £11.1m
Underlying operating margin*
19.7%
2020/2021: 23.0%
Underlying operating profit*
Operating profit
£2.4m
2020/2021: £2.6m
£2.4m
2020/2021: £2.5m
* Prior to restructuring costs of £0.1 million in 2020/21.
Growth drivers
• Growth in UK housebuilding
demand and current under
supply of houses
• Legislation and building regulations
• Ease of construction
Operations and supply chain
• Nearly all in-house manufacture
Routes to market
• Merchants and distributors
• House builder specification
Opportunities and potential
• Outperformance relative to the UK
construction market with continued
market share growth through
product range development and
best-in-class customer service
• Leveraging strong sales
channels through product
portfolio development excellent
customer service
• Margin improvement through
operational efficiency and additional
operational flexibility, utilising the
new factory commissioned in early
2018 and ongoing investment in new
machines and automation
“
Wider industry cost pressures, including rising
energy costs and increasing wages, resulted in
higher costs for many materials. Our focused
commercial controls and strong customer
relationships have enabled us to effectively
manage these input-cost pressures and
largely mitigate the impact.“
Michael Leaf
Executive Director and Housebuilding
Products Divisional Managing Director
The Alumasc Group plc Report and Accounts 2022
17
Timloc Building Products’ ability to deliver
products next day with low carriage paid
order values is what sets them apart
from competitors and has enabled them
to become market leaders within their
sector. Timloc is also at the forefront
of sustainability within their industry,
manufacturing multiple-use products
that are designed for the lifespan of a
building and are recyclable at the end
of the building life. Currently 75% of
Timloc products are manufactured
from recycled materials.
Timloc Building Products is the first
building products manufacturer in the UK
to achieve a carbon neutral status after
implementing various ‘green’ initiatives to
reduce and offset their carbon emissions
to zero. In addition, Timloc became the
first building products manufacturer in
the UK to use electricity generated from
100% renewable sources.
Timloc’s continued innovation and
product development has seen the
introduction of further new products
and product ranges to market over
the last 12 months. This includes
the Fire Rated cavity stop sock range
and expansion of its roofline offering.
Strategic report
Chief Executive’s Review
Group performance from continuing operations:
Revenue (£m)
Underlying profit before tax (£m)*
Statutory profit before tax (£m)
Underlying earnings per share (pence)*
Basic earnings per share (pence)
Dividends per share (pence)
2021/22
2020/21 % change
89.4
12.7
12.0
28.6
26.8
10.0
77.8
10.0
9.5
22.5
20.6
9.5
+15%
+27%
+27%
+27%
+30%
+5%
*
A reconciliation of underlying to statutory profit before tax is provided in note 5 to the Group financial statements.
Covid-19
The response of our employees to the
challenges faced this year has been
exceptional. Covid-19 has brought many
difficult challenges. Our number one priority
is always the health, safety and wellbeing
of our people and visitors to sites. We have
complied with, as a minimum, government
regulations. Unannounced HSE visits have
confirmed this with very positive feedback
being received. Our new norm allowed us
to adapt our working practices to have
more people working from home while
maintaining a good premium customer
service. I am very proud of our incredible
people and all that they have achieved.
Overview of performance
Despite the prior year delivering a record
result assisted by circa £2.5 million of pent
up revenue demand from the Covid affected
lockdown year of 19/20, I am pleased to
report a further record year driven by
record revenue (since the focus on only
premium Building Products began in 2016)
which increased by 15% over the prior year.
The year was particularly affected by
significant raw material and freight cost
increases, in many cases well ahead of
inflation. These were successfully recovered
through sales price increases.
The star performer of the year was
undoubtedly the Water Management
Division. Following its prior year record 27%
profit growth to £6.1 million it grew a further
43% to £8.8 million, increasing its operating
margin to 18.4% from 15.9%. This was an
outstanding performance and was driven
by a 24% revenue increase to £47.6 million.
The remaining two divisions had credible
performances against a difficult background
of increasing global supply chain challenges,
almost achieving the same results as the
previous financial year. Both the divisions
grew their sales albeit with margins down
slightly against the prior year. New products
again played a major role, particularly
at the Housebuilding Products Division
which in the past 18 months launched a
record number of products. This was again
supported by its industry leading next day
service, both of which have significantly
contributed to its performance.
18
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Executing our priorities in FY21/22
Management accelerated the pace of
strategic development during its 2022
financial year:
1. Levolux divestment
Following a strategic review it became
clear that Levolux was no longer core to
the development of the Group. Its business
model is different to the rest of the Group’s.
Its focus is on design and installation,
despite management’s best efforts to be a
supply only company which is not what the
customers want.
Levolux was sold on 26 August 2022
to Talrus Limited who are well placed
to support the Levolux business and
management team to return the
business to sustainable profit.
2.
Implementation of a more
cost-efficient operating structure
The Group’s relentless focus on cost
efficiency has supported the improvement
in underlying operating margin from 8.4%
in the 2018 financial year to 14.9% in 2022.
Further efficiencies across the facilities
will continue to be sought.
3.
Prioritising and focusing investment
to drive profitable growth
Capital expenditure was £2.6 million,
very slightly ahead of depreciation.
Once again investment has been
focused on our businesses with the
greatest manufacturing activity: our
Water Management business and our
Housebuilding Products business. We
continue to invest in tooling at strategic
suppliers for the Water Management
business which has improved manufacturing
efficiencies and significantly lowered the
carbon footprint of our suppliers along with
ensuring continuity of supply. Investment
continued at our Housebuilding Products
Division, including to support new product
launches. The benefit of the investments is
evident in the relatively strong performances
of these businesses. There has also been a
further reduction in our carbon emissions
brought about by the additional investment
in more efficient machinery at Timloc along
with the Group’s recent introduction of
electric vehicles to the company fleet.
4.
Proactive management of
our portfolio of businesses
The Group continues to seek to grow
through bolt-on acquisitions. With the
Group’s platform simplified and focused
following the disposal of Levolux, we are
well placed to leverage our strong financial
position and capitalise on the opportunities
presented by our growing pipeline of
acquisition targets.
5. Remaining closely aligned
with the sustainability agenda
With the ever increasing low carbon and
sustainable agenda Alumasc is in a perfect
position to increase supply solutions to its
customers who target these criteria. An
example of this is its innovative Roofing
solutions, such as Olivine, which can
actually reduce CO² in the environment.
Within the Water Management Division,
the increasing scarcity of water can be
managed very successfully. There are
examples where both divisions combine
to provide a ‘Blue Roof’. This, in effect,
produces an equivalent to an attenuation
tank on a flat roof allowing the controlled
egress into the water effluent systems while
saving clients the significant alternative
cost of an attenuation tank installation.
Our Housebuilding Products Division has
significantly contributed to the energy
conservation and air tightness within new
build housing with its ventilation products,
cavity closers, cavity stop socks and
radiator seal. It is constantly innovating
and launching new products that meet
or exceed the latest legislation including
the latest uplift in Building Regulations
(Part F and Part L). A recent example of
this is the new InVentive Roof Tile Vent
Range, a significant product launch for
2022/23 which opens a new channel with
Roofing Merchants.
The division is well placed to assist
housebuilders with the introduction of
housing to the Future Homes Standard
in 2025 and further changes in legislation.
All divisions are totally committed to,
and insist on, the use of recycled and
recyclable material where appropriate.
Alumasc is very proud to be able to state
that 75% of the Group’s products are made
from readily recyclable material and 26% of
the Group’s raw materials are sourced from
recycled material.
The Housebuilding Products Division is
already operating at a carbon neutral
level and there are plans in place for the
rest of the Group to follow suit over time.
The relentless pursuit of both innovative
energy and water management solutions
combined with the increasing use of
recycled material will continue. Alumasc
is already well placed in this regard.
Our bespoke approach to product and
specification means customers will be able
to meet more stringent environmental
criteria in the years ahead.
The Alumasc Group plc Report and Accounts 2022
19
Strategy and performance
against strategic objectives
Alumasc’s strategy is to:
1.
Build leading positions in specialist
markets to grow revenues faster
than the UK construction market
UK revenue growth from continuing
operations was 9% which we believe
was at a faster growth rate than the
UK construction market. For instance,
there is no doubt that market share
was taken both in the UK Roofing
market and the UK market in which
Gatic Slotdrain operates.
2.
Augment UK revenue growth
through the development of
selected export markets
Compared to the prior year in which
export revenues from continuing
operations were 10% of Group
revenues, this year export revenues
from continuing operations reached
15% and grew by just over £6.0 million
(80%) assisted by Gatic Cover work
on the Chek Lap Kok Airport third
runway in Hong Kong.
3.
Grow profit at a faster rate
than revenue by improving
operating margins
The Group’s operating profit from
continuing operations grew by
£2.8 million (27%) to £13.3 million.
Strategic report
Chief Executive’s Review continued
Overview of performance
Continuing operations
Revenue analysis
Revenue from continuing operations grew
by £11.6 million (15%) compared to the
prior year. This was the resultant benefit of
investing in high-quality Roofing salespeople,
launching new products, winning market
share, growing Gatic SlotDrain sales and
winning the Gatic Covers project at Chek
Lap Kok Airport in Hong Kong.
Gross margin
Alumasc’s Gross Margin fell by 0.5 percentage
points, to 37.3%, following a successful pass
through of raw material price increases.
Net fixed and operating expenses
Net fixed and operating expenses increased
by £1.5 million during the year mainly due to
increased sales resource, marketing, product
managers and inflationary pay increases.
Underlying operating profit
Underlying operating profit was £13.3 million
compared with £10.5 million in the prior year.
Underlying profit before tax
Underlying profit before tax was
£12.7 million (2020/21: £10.0 million).
Non-underlying, non-recurring items
Non-underlying and non-recurring items
amounted to a £0.7 million net cost in the
period compared with a £0.5 million net
cost in the prior year. Further details are
given in the Financial Review.
Discontinued operations
The Levolux trading loss, and the
£14.9 million non-cash write down of the
associated assets held for sale resulted in a
loss after tax from discontinued operations
of £16.7 million (2020/21: £0.2 million profit).
Levolux – discontinued/divested/
held for sale
Following its substantial turnaround in the
prior year Levolux fell back with a loss which
was very disappointing. This was principally
linked to the reduction in commercial
activity in the UK and USA, in some cases
the result of main contractors delaying
the placing of orders to try to obtain
lower prices during the above mentioned
period of significant cost increases.
This was all against a background in which
Covid-19 affected activity and, in particular,
during further lockdowns in North America.
A strategic review has determined that
Levolux should be divested. Therefore,
following a sales process Levolux was sold
on 26 August 2022 for a nominal initial
consideration of £1 together with £1 million
of deferred consideration which is repayable
from proceeds in excess of £1 million arising
from any subsequent disposal.
Profit after tax for the year
The Group’s resulting overall statutory
loss after tax for the year was £7.0 million
(2020/21: £7.6 million profit).
Divisional review
Water Management
Revenue
£47.6 million (2020/21: £38.4 million)
Underlying operating profit*
£8.8 million (2020/21: £6.1 million)
Underlying operating margin*
18.4% (2020/21: 15.9%)
Operating profit
£8.7 million (2020/21: £6.0 million)
* Prior to brand amortisation charges of £0.1 million in both years.
Water Management produced a record
profit of £8.8 million which was £2.7
million (43%) higher than the previous
year. This followed the prior year record
growth of £1.3 million (27%) versus the
19/20 year.
Significant material cost increases were
passed on in the year. The performance
in this division was assisted by the
winning of the contract to supply the
third runway with Gatic Covers at
Chek Lap Kok Airport in Hong Kong.
The drivers of the improvement were
revenue related (which increased
by £9.2 million (24%)) and product
portfolio management, including new
product launches, general efficiency
improvement and tight cost control.
Water Management’s operating profit
return on sales increased to 18.4% from
a prior year of 15.9%. This was a very
encouraging performance.
Divisional review
Building Envelope
Revenue
£29.4 million (2020/21: £28.4 million)
Underlying operating profit*
£3.6 million (2020/21: £3.8 million)
Underlying operating margin*
12.2% (2020/21: 13.2%)
Operating profit
£3.1 million (2020.21: £3.8 million)
*
From continuing operations. Underlying figures presented prior to restructuring costs of £0.5 million
in 2021/22.
The Building Envelope Division sells
principally into the high end UK
commercial and residential new
build construction market.
Alumasc Roofing’s performance was
strong and in particular within the
Refurbishment sector. The five new
salespeople recruited in the prior year
significantly strengthened some of the
more weak areas of sales in the UK
whilst technical services staffing
was increased across the country.
It went from strength to strength and
increased its revenue stream whilst also
securing additional market share. This
business now has a very strong and
capable sales force. Significant cost
increases were passed on in the year.
20
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Divisional review
Housebuilding Products
Revenue
£12.4 million (2020/21: £11.1 million)
Underlying operating profit*
£2.4 million (2020/21: £2.6 million)
Underlying operating margin*
19.7% (2020/21: 23.0%)
Operating profit
£2.4 million (2020/21: £2.5 million)
* Prior to restructuring costs of £0.1 million in 2020/21.
Timloc, our Housebuilding Products
Division, had another strong year. In
addition, during a challenging year,
Timloc continued to launch new products,
improve efficiencies and maintain 100%
OTIF to customers. Timloc continues to
receive very positive feedback from its
customers on its excellent service and
promotes this through its #TrustTimloc
to deliver strapline.
New product development is an
important factor in Timloc’s success and
during the year it saw continued growth
of recently launched new products and
launched further new products
including FrStop cavity stop socks,
Non-combustible products and a
number of Roofline Products. A very
exciting full launch of its new Tile Vent
Range will take place in Q1 of the new
financial year, with early indications of
success encouraging.
With its constant focus on improving
efficiencies, new product development
and customer service Timloc is well
positioned to maximise opportunities
presented by the housebuilding sector.
Outlook
Alumasc’s cost savings programme, liquidity
management, strong balance sheet and
improved commercial positioning underpin
a robust platform that is well positioned to
benefit from the long term growth drivers
in its markets. Alumasc’s primary aim is to
manage the long-term sustainability of the
business and to focus on its key strategic
objectives, growing revenues faster than
the UK construction market and being a
supplier of sustainable building products.
The Board believes that Alumasc’s strong
strategic and market positions underpin its
established track record over many years of
outperforming the UK construction market,
together with:
•
•
the outstanding Water Management
Division’s performance which is really
benefiting from both its UK and export
re-focused strategy, as well as its
extensive online offering;
the strong Roofing performance where it
enters the new year with a very healthy
order book;
•
•
•
the strong performance of the
Housebuilding Products Division against
a structural market shortage of housing
in the UK;
focused investments in new products,
manufacturing capability and
automation;
investments in sales resources and
product managers to grow the business
both in the UK and internationally;
• actions taken to deliver operational
efficiencies across the Group; and
• close alignment to the sustainability
agenda.
Demand remains strong entering the new
financial year, which has started in line
with management’s expectations.
Notwithstanding uncertainty over the
current macro-economic outlook, a strong
platform is now in place which provides
the Board with confidence for another
strong year.
Paul Hooper
Chief Executive
6 September 2022
The Alumasc Group plc Report and Accounts 2022
21
Strategic report
Financial Review
Reconciliation of underlying to statutory profit before tax from continuing operations
The underlying profit before tax from continuing operations for the 2021/22 financial year of £12.7 million reconciles to the statutory profit
before tax from continuing operations of £12.0 million as follows:
2021/22
£m
2020/21
£m
12.7
(0.1)
(0.1)
(0.5)
–
12.0
10.0
(0.1)
(0.2)
(0.1)
(0.1)
9.5
Dividends
The Board have recommended to
shareholders a final dividend of 6.65 pence
per share (2020/21: 6.25 pence), which
will absorb an estimated £2.4 million of
shareholders’ funds. This has not been
accrued in these accounts as it was
proposed after the end of the financial
year. Subject to shareholder approval at
the Annual General Meeting, it will be paid
on 4 November 2022 to members on the
share register on 30 September 2022.
Together with the interim dividend of
3.35p (2020/21: 3.25p) paid to shareholders
on 6 April 2022, this will bring the total
distribution for the year to 10.0 pence
per share (2020/21: 9.5 pence), which is
covered 2.9 times (2020/21: 2.4 times)
by underlying earnings per share from
continuing operations.
The Board continues to follow a progressive
distribution policy, where dividends
rise broadly in line with earnings, while
maintaining a prudent level of cover.
Underlying profit before tax
Brand amortisation
Net IAS 19 defined benefit pension scheme costs
Restructuring costs
IAS 19 past service cost in respect of GMP equalisation
Statutory profit before tax
The reconciling items were:
• Amortisation of acquired brands of
£0.1 million (2020/21: £0.1 million). This
is a non-cash charge arising from the
application of accounting standards, to
write off the estimated value of brands
associated with acquired businesses
over their anticipated useful life.
• Net IAS 19 defined benefit pension
scheme costs of £0.1 million (2020/21:
£0.2 million) are also non-cash charges.
These relate to the Group’s legacy
defined benefit pension scheme, which
was closed to future accrual in 2009.
The value of the charge is determined
by actuarial assessment and represents
the notional financing cost of the
Group’s pension deficit.
• One-off restructuring costs of £0.5
million (2020/21: £0.1 million), reflecting
the cost of exiting the Group’s remaining
roofing installation business and
following changes in the estimated
cost of several reorganisation projects,
which were announced during the
2019/20 financial year.
• A one-off IAS 19 past service cost in the
prior year of £0.1 million, representing
an increase in the estimated cost of
guaranteed minimum pension equalisation
between men and women, following
a High Court ruling in November 2020.
Taxation
The Group’s underlying effective tax rate on
continuing operations was 19.4% (2020/21:
19.5%), slightly above the UK statutory
corporation tax rate of 19% due to certain
costs that are disallowable for tax purposes.
We expect the Group’s underlying tax rate
to be approximately 21% in the 2022/23
financial year, due to the planned increase
in the main UK corporation tax rate from
19% to 25% from 1 April 2023.
The Group’s effective tax rate on statutory
profit before tax was 20.6% (2020/21:
22.6%). Reconciliations from the actual to
statutory rates of tax are provided in note
10. The reconciling items mainly relate to
the tax treatment of the one-off items in
the Group’s income statement and the
deferred tax impact of the planned increase
in the corporation tax rate to 25% from
1 April 2023.
Earnings per share
Underlying earnings per share from
continuing operations for the year was
28.6 pence (2020/21: 22.5 pence). This
increase is consistent with the increased
underlying profit before tax for the year.
Basic earnings per share from continuing
operations of 26.8 pence (2020/21:
20.6 pence) reflected the increase in
underlying profit before tax for the year.
22
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
2021/22
£m
2020/21
£m
13.3
2.7
16.0
(4.0)
(0.7)
11.3
(2.3)
9.0
(2.6)
(0.4)
(1.6)
(2.6)
(0.9)
(0.5)
(3.4)
(3.0)
(0.8)
(3.8)
4.7
10.5
2.7
13.2
0.6
(1.1)
12.7
(1.0)
11.7
(2.0)
(0.2)
(0.2)
(2.6)
(0.9)
–
(1.9)
3.9
(0.5)
3.4
0.9
Summarised Cash Flow Statement
Underlying operating profit from continuing operations
Underlying depreciation/amortisation
Underlying EBITDA
Change in working capital
Deferred VAT repaid
Operating cash flow from continuing operations
Discontinued operation
Operating cash flow from continuing and discontinued operations
Capital expenditure
Interest
Tax
Pension deficit funding
Lease payments
Purchase of own shares
Dividend payments
Sub total
Non-underlying payments
Movement in net bank debt
Net bank debt at the year end
Cashflows and net debt
The Group’s cash management activities
during the year were focused on repayment
of the final tranches of Covid-related
VAT and pension deferrals, and the
management of working capital during
a period of strong demand coupled with
significant price inflation and continued
supply chain disruption.
The Group’s operating cashflow from
continuing operations was £11.3 million
(2020/21: £12.7 million), after a cash outflow
into working capital of £4.7 million, which
includes payment of £0.7 million of VAT
deferred from 2019/20 (2020/21: £0.5 million
outflow, including £1.1 million of deferred
VAT payments). Operating cashflow from
continuing operations as a percentage
of underlying operating profit was 85%
(2020/21: 121%), reflecting selective
investment in inventory to maintain customer
service and manage cost price increases,
coupled with the cost price inflation and
strong revenue growth in the period. As a
consequence, average trade working capital
as a percentage of revenue was 18.1% over
2021/2022 (2020/21: 13.9%). After a £2.3
million cash outflow from discontinuing
operations (2020/21: £1.0 million outflow), the
total operating cash inflow from continuing
and discontinued operations was £9.0 million
(2020/21: £11.7 million).
Capital expenditure was £2.6 million
(2020/21: £2.0 million), representing 104%
of depreciation (2020/21: 86%). The main
investments were on capacity and efficiency
improvements at our Housebuilding
Products facility in Howden, East Yorkshire,
and at Water Management. The Board
see further opportunities for targeted
investments to deliver organic growth,
and expect capital expenditure to remain
above depreciation for the medium term.
Tax payments of £1.6 million were made in
the year (2020/21: £0.2 million). The prior
year included a £0.4 million receipt of tax
overpayments from 2018/19.
The Group recorded a net cash outflow for
the year of £3.8 million (2020/21: £3.4 million
inflow), increasing net debt at 30 June 2022
to £4.7 million (30 June 2021: £0.9 million).
Statement of financial position
and return on investment
Group net assets decreased by £10.4 million
in the year to £25.7 million at 30 June 2022,
a consequence of the write down of assets
held for sale in relation to the Levolux
business, partially offset by a reduction in
the pension deficit.
The Group defines its capital invested as
the sum of shareholders’ funds, including
historic goodwill but excluding net bank
debt, pension deficit (net of tax) and lease
liabilities. Post tax return on investment
(underlying operating profit from continuing
operations divided by capital invested)
was 25.8% (2020/21: 18.4%), reflecting
the improved operating performance.
Pensions
The Group accounts for its defined benefit
retirement obligations in accordance
with IAS 19 Employee Benefits, based on
the market value of scheme assets and
a valuation of scheme liabilities using a
discount rate based on AA corporate bond
yields at year end. Mortality and inflation
assumptions have been aligned to updated
actuarial information. The IAS 19 defined
benefit pension scheme deficit at 30 June
2022, before deferred taxes, was £2.1 million
(30 June 2021: £4.6 million). Scheme assets
decreased in the year by £25.4 million to
£87.2 million. Scheme liabilities decreased
by £27.9 million to £89.3 million, due to an
increase in the discount rate.
The Alumasc Group plc Report and Accounts 2022
23
Strategic report
Financial Review continued
Going concern
In assessing the Group’s ability to
continue as a going concern, the Board
has considered medium-term forecasts
based on the Group’s approved budget
and three-year plan including stress test
scenarios modelled on both a resumption
of Government lockdowns and a 20%
reduction in revenue.
Under the stress test scenarios, there
remained adequate headroom in banking
facilities and no breach of banking
covenants over the 13-month period to
September 2023. The Board also took note
of the Group’s further ability to reduce its
cost base and/or conserve cash resources
at short notice if necessary.
A reverse stress test scenario, that would
lead to a breach of the Group’s banking
covenants, was also modelled. The Board
considered the risk of such a scenario
arising to be remote.
Having taken into account the scenario
models above, and in light of the bank
facility headroom under various scenarios,
the Directors consider that the Group
has adequate resources to continue
trading for the foreseeable future.
Accordingly, they continue to adopt
the going concern basis in preparing
the financial statements. See note 1
for the full Going Concern assessment.
Simon Dray
Group Finance Director
Payments into the scheme in the year
were £2.6 million (2020/21 £2.6 million),
including £0.2 million (2020/21 £0.4 million)
of payments deferred from 2019/20 under a
Covid-19 cash conservation scheme agreed
with the trustees.
Future contributions are agreed with the
scheme’s trustees, based on actuarial
valuations rather than the IAS 19 deficit.
Following the triennial review in March 2022,
the Group has agreed reduced annual
payments of £1.2 million from 1 October
2022. These payments are designed to
enable the scheme to reach a fully funded
position, using prudent assumptions about
the future, over a reasonable timescale.
Banking facilities and covenants
The Group maintains facilities with its
banking partners to ensure the availability
of sufficient liquidity to meet the Group’s
operational and strategic needs, at optimal
cost. The Group projects facility utilisation
and compliance with the associated
covenants during its short-term forecasting,
annual budgeting and strategic planning
exercises to ensure adequate headroom
is maintained.
During the year, the Group entered into a
£25.0 million committed revolving credit
facility which expires in August 2025 and
two further single-year extension periods
to August 2026 and August 2027. A further
£20.0 million is available through an
uncommitted accordion facility.
Alumasc’s current banking facilities comprise:
• An unsecured committed three-year
revolving credit facility of £25.0 million,
with an expiry date of August 2025
and a further two one-year extension
periods; and
• Overdraft facilities, repayable on
demand, of £4.0 million.
The covenants associated with these facilities
are set out below, together with the reported
figures at 30 June 2022 and 2021:
Net debt: EBITDA
Interest cover
Covenant
30 June 2022
30 June 2021
<2.5
>3.5
0.4
31.7
0.1
42.1
24
The Alumasc Group plc Report and Accounts 2022
ESG Report
Strategic report
Governance
Financial statements
Environmental
Sustainability is at the heart of our business model. The majority of our products are
sustainable and are designed to combat climate change in the built environment. We
have a sustainability framework and roadmap that covers our supply chain, businesses,
energy, and our conduct. Our sustainability approach allows us to map the areas of our
business and the activities we undertake. We have also developed key metrics to help
us monitor our ESG journey.
Environmental Highlights
Scope 1 and 2 reductions
this year
Intensity ratio (scopes 1 and 2)
per £m of revenue this year
Renewable energy
23.36%
28.96%
Reduction since the baseline year
2016/2017: 55.90%
Reduction since the baseline year in
2016/2017: 52.46%
100%
electricity from renewable sources
Environmental
Our products help to build a better future,
and help our customers have solutions to
adapt their environment to help reduce the
impact of climate change. Alumasc has
made a commitment to reduce the impact
of our own activities and operations. In
2020, we targeted a 10% reduction in our
GHG emission intensity by 2022. The actual
reduction over this period was 32%. We
are targeting a further reduction in our
GHG emissions intensity of 10% by 2025.
By 2030
Our GHG target reduction to be >10.00 for
the intensity ratio tCO2e per £1m of revenue.
Our Greenhouse Gas (GHG)
emission management
Last year all our electricity sources were
switched from renewable-only sources.
We continue to work with Carbon Footprint
Limited to monitor and report on our GHG
emissions and to review opportunities to
reduce our emissions. This year we have
worked with them to produce a plan for
our carbon reduction journey. Each of
our businesses have been encouraged to
reduce their emissions and to come up with
innovative ways to protect our environment.
Our stories of achievements made in the
year can be found on page 29.
Our subsidiaries are encouraged to improve
their energy efficiency and progress is
monitored at monthly Board meetings.
Significant emissions come from our own
vehicle fleet and from our manufacturing
operations (Scopes 1 and 2). We are
working to reduce our vehicle emissions,
through our travel policy and the adoption
of videoconferencing. We encourage the
increased use of electric vehicles and aim
to have 100% electric forklift trucks as
part of our programme. Electric vehicle
charging points have been installed
at our St Helen’s site. Operational and
manufacturing efficiency is promoted by
capital expenditure investments in new
technology, this in turn reduces energy
consumption and emissions. We are looking
to introduce the recommendations received
from our Energy Saving Opportunity
Scheme. During the year Carbon Footprint
Ltd completed audits at a number of sites
and their recommendations are being
followed up and implemented to improve
energy efficiency.
All sites except one site have adopted
ISO14001:2015 and have been audited as
part of the process to confirm that they have
accredited Environmental Management
Systems and the final site is expected to
be accredited before the end of 2023.
External ISO consultants provide assurance
on our environmental systems, and these
are maintained and reviewed by our
colleagues. All observations following an
ISO audit are communicated with the
management teams.
Carbon Footprint was appointed to
independently assess our Greenhouse
Gas emissions in accordance with the UK
Government’s ‘Environmental reporting
guidelines: Including streamlined Energy
and Carbon Reporting Requirements.’
The assessment has used the 2022
emission conversion factors published by
Department for Environment, Food and
Rural Affairs (Defra) and the Department
for Business, Energy & Industrial Strategy
(BEIS). The assessment follows the GHG
Protocol methodology by reporting both
the location-based and market-based
emissions from electricity usage and
electricity transmission and distribution.
The table on page 29 summarises the
GHG emissions for the reporting year:
1 July 2021 to 30 June 2022. Alumasc
has been assessing emissions since 2017
using Carbon Footprints’s Sustrax II.
The emissions assessed reflect the
move to 100% renewable energy tariff.
The Alumasc Group plc Report and Accounts 2022
25
Strategic report
ESG Report continued
Environmental continued
ESG targets – Roadmap to 2050
Roadmap measure
2021 data
2022 data
2030 target
2050 target
Turnover derived from
environmental solutions
77%
77%
>80%
>80%
Sustainable products
Product recycled content
27%
27%
>40%
>50%
Product recyclability
74%
>75%
>80%
>90%
GHG emissions
GHG emission intensity ration tCO2e
per £1m of revenue
23.21
17.78
>10.00
Net zero
Waste reduction
Waste to landfill
Plastic packaging
Reduction of preventable plastic
packaging
Health & Safety
Lost days due to accidents
Diversity & Inclusion
Gender diversity2
–
–
83
3:13
99%
100%
100%
50%
100%
100%
891
3:13
0
2:1
0
1:1
1 51 days lost related to one accident.
2 Male: Female.
3 Rounded figures.
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Strategic report
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Financial statements
Our sustainable products
Colour Coated Galvanised Steel
Rain Collector
Galvanised Steel Guttering
As a society we have become ever more
eco-conscious, we are making decisions
based on the long-term rather than the
short-term. Galvanised steel guttering can
be infinitely recycled and is always likely to
be recycled. Not only is it a simple process
to recycle, but as scrap metal, steel will
always have a value, because of this, in the
UK, 87% of constructional steel is recycled,
10% is reused and only 3% goes to landfill.
When it’s wet our metal guttering helps
ensure efficient rainwater drainage and
now, we want to help people conserve as
much of that water as possible rather than
allow it to disappear down the drains. To
help collect and save this water, we’ve
chosen to stock efficient, stylish and
sustainable rainwater diverter products.
These products are a great way of
harnessing rainfall when it’s plentiful and
using it when it’s not. When water is scarce,
it’s ideal to be able to access free, collected
rainwater to use to keep our gardens
thriving and wash our cars for example.”
Collecting rainwater made easy
With climate change appearing to be a
reality that we are all having to face and
although any change here in the UK is not
as dramatic as being witnessed in many
countries across the globe, we do seem to
be experiencing warmer temperatures and
more erratic weather patterns. Because
of this, increasingly, the collecting and
conserving of rainwater is becoming a
priority for many property owners.
So, Rainclear Systems chose to stock a
rain-collector made from galvanised steel.
Anthony Hitchman, Managing Director
of Rainclear Systems explained:
“There are many respected studies on
climate change that indicate that here
in the UK we’re most probably due for
warmer wetter winters, an increase in heavy
summer downpours along with intermittent
periods of the prolonged drought and water
shortage. At Rainclear, we have always
stocked products that help people cope
with our unpredictable weather.
Accessed 2021 – www.futurelearn.com/courses/sustainable-construction-development
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ESG Report continued
Environmental continued
Re-use of packaging: Rainclear
Rainclear, part of Water Management
Solutions, uses packaging made from
100% recycled paper for shipping.
This reuse saves:
• approximately 15 trees per year
• 60% reduction of water and
energy consumption
• 50% reduction of C02
when compared to using virgin
fibre paper.
Galvanised steel guttering
Our sustainable products include Galvanised steel guttering that does not crack or warp
as is the case with plastic guttering. The galvanising process (the application of a protective
zinc coating) means that galvanised steel guttering is rust-resistant for up to 15 years, and
longer if maintained.
Galvanised steel guttering provides a durable and elegant finishing touch to a home
renovation or self-build project, with its sustainable design and a low carbon footprint that
respects the environment. Galvanised steel guttering can be infinitely recycled. Not only
is it a simple process to recycle, but as scrap metal, steel will always have a value.
Accessed 2022 – Steel recycling – Galvanizers Association –
https://www.industrytransition.org/insights/g7-green-steel-production/.
Green Economy Mark
• Alumasc has been recognised by the London Stock Exchange as a contributor to the
global green economy
• The Mark is awarded to companies and funds that derive more than 50% of revenues
from environmental solutions
• The Alumasc Group plc provided high-quality, low carbon, sustainable building
products, systems and solutions which help manage the scarce resources of energy and
water in the built environment and improve the quality of life for the owner/occupier
The classification, first introduced in 2019, was created to highlight companies and
investment funds listed on all segments of the London Stock Exchange’s main market
and AIM that are driving the global green economy.
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Governance
Financial statements
Greenhouse Gas Report (GHG) emission management
Alumasc appointed Carbon Footprint Ltd, a leading carbon and energy management
company, to independently assess its Greenhouse Gas (GHG) emissions in accordance
with the UK Government’s ‘Environmental reporting guidelines: including Streamlined
Energy and Carbon Reporting requirements’.
The assessment has used the 2022 emission conversion factors published by Department
for Environment, Food and Rural Affairs (Defra) and the Department for Business, Energy
& Industrial Strategy (BEIS). The assessment follows the GHG Protocol methodology by
reporting both the location-based and market-based emissions from electricity usage
and electricity transmission and distribution.
The table below summarises the GHG emissions for reporting year: 1 July 2021 to
30 June 2022. As a business we have been assessing our carbon emissions using the
Carbon Footprint Sustrax II since 2017. This year we have assessed both our location-based
and market-based emissions to account for the change to a 100% renewable energy tariff
used across the Group.
Activity
Baseline Year
2016/17
Previous Year
2020/21
Current year
2021/22
Total energy consumed (kWh)1
n/a
11,231,556
8,276,380
Definitions
Location-based approach – reflects
the emissions from electricity coming
from the national grid energy supply.
Market-based approach – reflects the
emissions from the electricity sources
or products (energy tariffs), that the
consumer has specifically chosen.
Energy efficiency actions
Alumasc agreed an audit schedule for
2021/2022 with Carbon Footprint and they
have visited a number of sites. This supports
Alumasc’s drive to reduce emissions.
Energy and carbon saving measures have
been implemented during the 2021/22
assessment period, including:
• Adoption of new energy efficient
technology
Location based Scope 1
Location based Scope 2
Location based Scope 3
Scope 1 & 2 Location-based
Gross Emissions (tCO2e)
Total Location-based Gross
Emissions (tCO2e)
Total Market-based Gross
Emissions (tCO2e)
Carbon offsets (tCO2e)
Total Net Location-based
Emissions (tCO2e)
Intensity ratio: tCO2e (gross
Scope 1 & 2) per employee2
Intensity ratio: tCO2e (gross
Scope 1 & 2) per £M revenue2
1,900.99
1,749.33
465.07
1,426.64
673.99
237.05
1,363.62
246.31
168.03
• Start of migration of the vehicle fleet
to electric vehicles
• Continued reduction in travel by use
of videoconferencing
3,650.32
2,100.63
1,609.93
4,115.39
2,337.68
1,777.96
–
0.00
1,804.06
0.00
1,518.93
24.00
4,115.00
2,337.68
1,777.96
7.14
34.84
4.68
23.21
3.51
16.56
1
kWh figure includes Alumasc’s energy usage from building energy and fuels (Scope 1 & 2, excluding
refrigerants) & grey fleet (Scope 3) only, as per the SECR guidelines.
2 Location-based GHG emissions.
The Alumasc Group plc Report and Accounts 2022
29
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ESG Report continued
Environmental continued
ESG achievements at Building Envelope
During the year Building Envelope achieved the following targets:
• 100% of marketing promotional materials for Roofing are now paper-free.
Business cards are also now digital, to accompany all e-brochures.
North Tees and Hartlepool
NHS Foundation Trust Undergoes Sustainable Refurbishment
We overhauled the existing roof delivering 3,500m2
of flat roofing refurbishments for the hospital.
The product used was Alumasc Self-Adhesive
Olivine and Caltech Alpha systems.
The roof has CO2 neutralising benefits along with
the sensitively managed flame-free installation
using low odour liquid.
Performance
The Olivine felt system is comprised of a CO2
neutralising, reinforced SBS polymer modified
bituminous waterproofing membrane, underlays,
insulation boards, and air and vapour control layers.
Our Self-Adhesive Olivine system not only requires
a flame-free installation but is surfaced with a
natural olivine granule, a magnesium iron silicate.
The olivine granules initiate a chemical reaction
with CO2 from rainwater which converts to silicon
dioxide (sand) and magnesium carbonate, two
elements harmless to the environment.
1m2 of olivine has the capacity to capture
approximately 1.75kg of CO2.
How this aligns with our
Sustainable Development Goals
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Governance
Financial statements
CO2nstruct Zero Business
Champion
On 4 April 2022 Housebuilding Products
(Timloc Building Products) signed up to become
a CO2nstruct Zero Business Champion. CO2nstruct
Zero was launched last year to unify industry
efforts to cut carbon.
See
17 for more
How this aligns with our
Sustainable Development Goals
Renewable Electricity
We have procured 100% renewable electricity
across the Group in 2022, consequently reducing
our carbon emissions by 246 tonnes.
See
29 for more
How this aligns with our
Sustainable Development Goals
Reduction of waste to landfill
Most of our sites have already achieved 100%
of waste going to landfill.
See
26 for more
How this aligns with our
Sustainable Development Goals
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Environmental continued
Electric Vehicle (EV) charging points
Our St Helens site has installed EV charging
points to encourage greater use of electric motor
vehicles either selected from our fleet provider
or personally purchased by staff.
See
26 to 31 for more on environmental highlights
Cycle to work scheme
We operate the cycle to work scheme at all our
sites. Two have new cycle shelters, Burton Latimer
and Halstead. This is a great programme that
helps with fitness and removes vehicle emissions.
How this aligns with our
Sustainable Development Goals
How this aligns with our
Sustainable Development Goals
“
I like to cycle to work as the business
provides the benefit of the Cycle
2 Work Scheme. I live locally and
benefit from this.”
Shaun
Burton Latimer
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Diversity & Inclusion (D&I)
Our current gender balance is representative
of the wider industry demographics and will
take some time to address. However the Board
recognises the benefits that a diverse and
inclusive workplace brings and our businesses
are taking steps to improve it.
See
38 for more
How this aligns with our
Sustainable Development Goals
Strategic report
Governance
Financial statements
Staff health, safety & wellbeing
The protection of staff health, safety, & wellbeing
are at the core of everything we do. We have set
targets for a reduction in lost days due to injury.
(see page 39).
We have an app that has the provision of services
to help with mental wellbeing, it offers up to ten
counselling sessions for any member of staff or
their family and an online GP 24/7 for all staff.
See
38 to 39 for more
How this aligns with our
Sustainable Development Goals
Talent, training and development
Alumasc’s Board reviewed its Group-wide
talent pipeline and the programme of courses
available to develop our people. This forms part
of Alumasc’s career development and succession
planning for key roles. We are hiring apprentices
to help with long-term career development in
the business.
See
39, 42 to 43 for more
How this aligns with our
Sustainable Development Goals
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ESG Report continued
Social
Fundraising
Ball of Funk
Alumasc Roofing, and Frank Besant along with friends,
organised a Charity Ball – ‘Ball of Funk’ evening featuring DJs,
live music, bubbles, and glamour. All of the £1,625 of profits
have been donated to Sam’s Diamonds Cancer Support.
“
I wanted to donate the clear profits to
a cause like Sam’s Diamonds that really
means something to so many people.
With the way the world has been for the
last nearly two years it was great to let
loose, smile and party together again.”
Frank Besant
Importance of social / culture
The Board sets the culture and the tone from the top. The right
culture is embedded into our business and adopted by our
employees. It is also reflected in our processes and operations and
in all our dealings with our stakeholders. Our purpose is to be the
leading provider of sustainable building products and systems.
This green ethos is both motivational and necessary to combat
climate change.
It is important for us to engage with our local communities, and we
do this with our charitable activities that deliver a range of benefits,
enabling us to support local groups that provide benefits to the
community, and to build local relationships. Further information
can be found on pages 35 to 36.
Halstead in bloom
As part of supporting our local communities our Wade
business sponsored Halstead in Bloom. We are supporting
our local community by enhancing the environment with
shrubs and flowers.
Half-Marathon Hero
We are inspired by our Area Technical Manager Donna Lynne
Owen from Alumasc Roofing, who recently ran the Swansea
half marathon. Everyone has a cause close to their heart and
Donna supported Cancer Research UK and Maggie’s Centres
who provide vital support for anyone affected by cancer.
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Financial statements
Kirsty, Heather and Chris from #Team
Timloc took part in the Hull4Heroes
skydive on Sunday 29 May 2022.
The Team jumped 15,000 ft to raise
£1,000 bringing it to a donation
of £2,500 overall.
Colchester Pride story
This June we celebrated Pride Month and to help our surrounding
communities, we chose to hold a number of events for charities
local to our AWMS offices who specifically support the LGBTQ+
community. We are proud to have fundraised for Youth Works
Northamptonshire and Colchester Pride.
At AWMS Halstead funds were raised for Colchester Pride
(https://www.colchesterpride.org/). The two sites raised more
than £250 for these good causes.
Charity Skydive
In May 2022, three members of team Timloc completed a
15,000ft charity skydive in aid of Timloc’s charity partner
Hull4Heroes. The trio collectively raised an amazing £1,000
for the charity organisation that provides veterans and
their families with support, including, mental wellbeing,
mentoring, employment, and housing, to help make the
transition back into civilian life as smooth as possible.
The Alumasc Group plc Report and Accounts 2022
35
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ESG Report continued
Social continued
Other Stories
Hull 4 Ukraine
Hull 4 Heroes recently set up the Hull 4 Ukraine appeal
to coordinate relief aid for refugees currently fleeing
the conflict in Ukraine. The Timloc team contributed
donations including blankets, clothing, toiletries and
food for the cause along with a pallet of over 200
boxes for packaging the donations.
Loft Doors
Timloc donated loft doors to be used in rehabilitation
bungalows as part of the Matt Hampson Foundation,
a charity founded by its namesake to provide
treatment and support to young people seriously
injured through sport.
Archi Velo
Craig Begg was raising money for charity throughout
August by entering the Archi Velo 170km. Instead of
cycling the 170km he has upped the ante to 1000km!
Craig said, “I’m supporting this charity as I have
met some great clients and friends during most
of my working life and enjoyed being involved in
design elements of some of the UK’s most prominent
construction projects.”
All net proceeds have gone to the Architects
Benevolent Society.
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The Alumasc Group plc Report and Accounts 2022
Sparkling Twenties Ball
Alumasc Roofing sponsored Sam’s Diamonds Sparkling Twenties
Charity Ball in November 2021. The award which we sponsored
was the ‘Partner Award’ and the ball raised just over £3,500.
Prickles and Paws
The Hedgehog Highway by Timloc plays a big
part for charities. From every sale of the Hedgehog Highway a
donation is made to hedgehog organisations to help continue
their extensive work in rescuing, rehabilitating and rehoming sick
or injured hedgehogs. Timloc Building Products has donated
over £1,750 to various hedgehog charities across the UK so far.
Strategic report
Governance
Financial statements
Women in Construction
Alumasc supported Women in Construction week
(#WomenConstruction Week and #BreaktheBias)
on social media, posting on LinkedIn and Twitter. The programme
is to encourage a stronger more diverse workforce in the sector.
Housebuilding Products encouraged people to be tagged offering
a hamper as a prize. We used quotes, profiles, and insights to
encourage support for the campaign. Karen McInerney our Non-
executive Director also posted in support of female talent at
Alumasc. Some of the following profiles are from this campaign.
“
Working within the
construction industry
is great fun."
Gemma Lewis
Area Technical Manager
“I first started at Keyline doing an admin role. From
there with the support of the branch manager my
development in building and construction grew. I
enjoy the variety of people I meet and support every
day. I love driving by a project – be it a school, a
heritage site or even just a house – knowing I have
had a hand in it coming to life and completion. I
have had the opportunity to work on some great
buildings. I am the only female in the Northern
Alumasc Team but my colleagues are brilliant and
we are an Alumasc family – all there for each other.”
Nicola McGowan
Area Sales Manager, Scotland
“I have worked at Alumasc for two years, initially
starting as an agency working with a busy paint
shop department. I started packing and progressed
through product knowledge. Within the team I
have recently progressed further to run the powder
centre and also assist in the wet spray line. I have
been a Fire Marshal for the business for a year and
have recently put my name forward to complete
the First Aid and Spill Kit training. I am very happy
and enjoy my current role and look forward to
future opportunities within the business.”
Marta Barczak
Production Operative – Paint Shop, Burton Latimer
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37
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ESG Report continued
Governance
Our Governance framework is built by our internal
policies and regulations, and our key policies
include: diversity and equal opportunities; IT
Security; Health & Safety; Anti-bribery, Gifts &
Hospitality; and Tax. Our governance framework
reflects our listed status (see pages 55 to 58), and
we follow the QCA Code (see page 54). We ensure
our training programmes are delivered either face-
to-face by professionals and internal staff or online,
and are regularly updated to ensure staff are aware
of our policies and requirements.
Code of conduct
Our Governance is built on the expected ethical standards and
behaviours of our employees as outlined in our Code of Conduct.
We expect employees to have a high degree of integrity and to be
honest, responsible, and trustworthy in what they say and do. Upon
joining all employees are provided with the Employee Handbook
that incorporates our Code of Conduct. We remind staff of this
requirement through training and briefings.
Site visit at Wade. The June Board Meeting was held at Wade in Halstead,
and there was an opportunity for the Board members to have a site tour and
to meet staff.
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The Alumasc Group plc Report and Accounts 2022
Diversity and Inclusion
Alumasc is an equal opportunities employer. Recruitment, training
and development are based on the aptitude and abilities of
employees regardless of religion, ethnicity, gender and sexual
orientation. Employees with disabilities are given equality of
opportunity with respect to entering and continuing employment
with Alumasc. We have examples in the year where adaptions
of the workplace or working environment have facilitated
opportunities for disabled staff. The Group aims to provide training
opportunities that are identical, as far as possible, for disabled
and non-disabled employees. Should employees become disabled
after joining the Company, every effort is made to ensure that their
employment continues, and appropriate training is given. A formal
Equality and Diversity Policy has been approved by the Board and
applies to all our businesses.
We are committed to promoting diversity, inclusion, and equal
opportunities from recruitment, employment and career
progression to learning and development. We are proud to support
staff having training and undertaking studies for qualifications to
progress their careers.
Alumasc recognises the benefit of having the widest range of
experience, knowledge, and skills. Management undertakes reviews
of staff performance and recognise their achievements. Career
progression is extremely important to us for succession planning.
Promotions are usually announced at the end of the financial year.
Anti-modern Slavery and Human Trafficking
Alumasc has an Anti-modern Slavery and Human Trafficking Policy
(see – www.alumasc.co.uk/wp-content/uploads/2021/05/Anti-
Modern-Slavery-and-Human-Trafficking-Policy.pdf) and an annual
statement for the Group on Anti-modern Slavery is published on
the UK government site and on our website www.alumasc.co.uk in
line with Home Office guidance, along with our previous disclosures.
Our Statement for this year will be published in compliance with
government requirements before the deadline. Last year the Anti-
modern Slavery and Human Trafficking Policy was enhanced by the
addition of the International Labour Organization’s signs of forced
labour and our training also reflects this. Employees can report
anything observed to their line manager if it does not look right
or to contact on the Speak Up hotline.
Alumasc expects its suppliers and those in the supply chain, where
possible, to confirm that they have the same or very similar policies
in place for Anti-modern slavery.
Strategic report
Governance
Financial statements
Anti-Bribery and Corruption
Alumasc has a zero-tolerance approach towards bribery and
corruption. Our Groups Anti-Bribery Policy gives straightforward
and clear advice on the ethical standards and the compliance
required. We have long-term relationships with our suppliers that
are built on trust and reliability. During the year Alumasc refreshed
its Gifts & Hospitality Policy and this was reviewed and approved
by the Board. A report this year was made on our Anti-bribery
programme to the Audit Committee, please see page 63 for
further information.
Confidential Helpline
We have a Speak Up helpline that is available to all staff, where
matters can be reported in confidence in accordance with our
policy. Even if the report after investigation does not reveal any
matter, our culture is that there will be no negativity as a result.
We have also set up a confidential email: speakup@alumasc.co.uk,
that can be used by staff and suppliers. Training is provided to
staff to employees via face-to-face training or via online modules.
We have advertised the helpline to our staff, and we will investigate
any matter raised.
Tax and other laws and regulations
Alumasc’s aim is to create long-term sustainable value, and this
means complying with our Code of Conduct and all applicable
laws. In line with our Group’s Tax Policy, we pay tax in full and in a
timely manner when it is due. Our dealings with the tax authorities
are open and transparent, we undertake commercial transaction in
a tax efficient manner, and we take advantage of allowances and
reliefs when they are available. We have a zero-tolerance policy
towards tax evasion and its facilitation. The Group Finance Director
is responsible for the policy’s implementation, and this is supported
by advice and training from our external tax advisers.
Headcount by gender
Non-executive Directors
Executive Directors
Senior managers
Employees
Total
Male
Female
Total
2
4
37
292
335
1
0
9
114
124
3
4
46
406
459
We are committed to protect the Health &
Safety of our people, to improve the quality of
the working environment and make a positive
contribution to our local communities.
Health & Safety
Alumasc has a clear primary focus to ensure the Health &
Safety of our employees, and this is always the first item at
our plc Board and subsidiary meetings. Our CEO is responsible
for Health & Safety. All significant incidents are discussed
weekly and are reviewed. This ensures that Health & Safety
policy implementation and near miss reporting is discussed.
We have a target of zero harm and as part of our targets we
report on lost days and the learning from any incident. We
recognise the importance of understanding and continually
strive to improve our Health & safety culture. Health & Safety
training programmes are delivered to our staff to build on our
compliance with Industry best practice and to ensure that
focus is on continuous improvement.
The culture is to ensure that all employees understand the
importance and take shared ownership to enhance our Health &
Safety performance. Engaged and informed employees help us
improve our Health & Safety and environmental performance.
We use targeted role related training, e-learning to promote
employee awareness of their responsibilities, hazards
associated with operations and safe ways of working. We
operate a formal method of reporting of recording near misses,
hazards, and lost days. Near miss reporting is encouraged
across the business at all levels. Near miss reporting has
remained at a high level. Reporting assists with continual
improvements and provides information to management on
how to improve processes and to ensure safe ways of working.
The number of incidents where there were days lost during the
year was 89, in 2021 this was 83 days. The cumulative PRI score
was 5.03 compared to 4.94 in 2021/22.
Our main Health & Safety KPI, the performance rate index (a
relative measure capturing the total amount of lost time and
other safety incidents, relating the result to the overall number
of hours worked). This is used to measure improvements in our
Health & Safety performance.
Our sites and operations have Health & Safety Committees.
We are audited by specialist external Health & Safety
consultants and the results of these audits are provided to
the plc Board. Any resulting action plans are also discussed
at management meetings.
There has been an overall trend of Health & Safety improvements,
due to the focus on our zero-harm target and to continuous
improvement by employees and management. The risks
encountered arise due to working with machinery, materials
handling, operating forklift trucks, and car and lorry use. The
business carries out robust Health & Safety risk assessments
and oversight ensures that recommendations are implemented.
The Alumasc Group plc Report and Accounts 2022
39
Strategic report
ESG Report continued
Task Force on Climate-related Financial Disclosures (TCFD)
We recognise that as a responsible business we need to understand the environmental, social and
governance (ESG) issues that are relevant to our business. Each of these requirements are balanced
and managed effectively to allow us to create long-term value for our stakeholders.
Acute physical risks
• Flooding/draining and
water attenuation
Chronic physical risks
• Rainfall patterns
Transitional risks
• Policy & Legal
• Heat stress/temperature extremes
• Technology
• Extreme storms/rainwater systems
•
Infrastructure failures
• New products
• Cost of raw materials
• Create new innovative low carbon
products to add to our products
portfolio
TCFD
Our overall approach to sustainability is driven by our purpose to become the leading supplier of sustainable building products, systems,
and solutions in our chosen markets. We are building on our sustainability strategy by our implementation of the recommendations
of TCFD and through our core business strategy and purpose. We have a clear role to provide sustainable products to further assist
the reduction of carbon in the built environment. We anticipate that our disclosures will develop over time and our journey has already
achieved carbon reduction. The following table provides an overview of our TCFD steps taken during the year and our next steps:
Strategy
Risk Management/opportunities
Our business strategy is designed to provide sustainable and
environmentally friendly solutions for our customers. We use
innovation to identify market opportunities to identify new
solutions that help companies comply with regulations.
Internally, we aim to manufacture and supply goods in an
efficient manner through the use of new technologies and
machinery, reducing the energy used to make products. Our
strategy covering short, medium, and longer-term objectives
is outlined on pages 2 to 36 of this report.
As part of our strategy each division was asked to consider how
new product development could address market opportunities
resulting from Climate Change.
This year we have added climate change as a risk on the Group
risk register and climate change risks were also considered
and reported using a questionnaire. All divisions were asked to
consider the impact of Climate Change on their divisions and
to incorporate this into our risk management process.
A full description of the risk process is on page 50. There are also
key market opportunities for our business through innovative
Climate Change combating products, such as Olivine roofing
(see page 30), air sealant housebuilding products, fully recyclable
and durable metal systems, and through sustainable rainwater
products (see page 27).
Governance of sustainability
Metrics and targets
The Governance is as follows:
Board of Directors: The Board can challenge the Executive
Directors and leadership on the approach and performance
considering sustainability/Climate Change risks. The Board is
involved in approving metrics and targets and sustainability is
discussed at every Board meeting. Key Board activities during
the year are disclosed on pages 55 to 58. The Board has set the
culture for sustainability and cross divisional teams are managing
the implementation. The Board has sustainability knowledge
from Industry and access to ESG advisers and had a presentation
during the year.
Our Executive directors and senior management are critical
to our development of new and innovative products for our
customers that will help have a low or zero carbon in the built
environment. Internally we seek to ensure they have efficient
manufacturing processes.
Executive Committee: The Group’s Managing Directors have
been critical to the process as they share the responsibility on
our sustainable business approach.
Remuneration Committee: During the year, the Remuneration
Committee considered ESG targets, and how these could be
linked to climate change related targets (see pages 64 and 65).
40
The Alumasc Group plc Report and Accounts 2022
We report on our business unit targets on a monthly basis and
internally on a six monthly basis. Data is provided from our
business units to our external partners, Valpak assists us with
our collection of data and reporting for packaging and waste
and Carbon Footprint, assist with the collation of our emissions
under Scope 1, 2 and 3 (disclosed on page 29). Our intention is
to report upon our key metrics in 2023. Key metrics used are:
• Zero waste to landfill
• Energy efficiency
• Our electricity supply is procured from renewable sources
(see page 25)
• We keep our property portfolio under review and seek to
have energy saving and Climate Change resilience in place
through our business continuity planning. Audits of our
buildings for energy saving opportunities have been carried
out in 2021/22 (see page 29)
• Some divisions have developed KPIs for using recycled and
recyclable materials for packaging
Strategic report
Governance
Financial statements
As part of our TCFD programme this year
we considered the risks below and asked two
business units to provide a response on their
approach. As part of our risk programme, we
will include more risk scenarios for each division
to consider in 2022/23.
The risks identified are being managed
by each business division with central
oversight by the subsidiary Boards, who
report consolidated risk registers to the
main Board of Directors.
Please see our Principal Risks and
Uncertainties section for more information
on how we manage risks (pages 46 to 50).
Supply chain
We have engaged with suppliers and in
particular the supply chain, for example at
packaging to have more environmentally
friendly packaging, where possible.
Inbound cardboard can be re-used as
outbound void packaging. For plastic
products manufactured by Housebuilding
Products 75% of our products are made
from recycled plastics and Rainclear seeks
to sell products (where available) that use
recycled metals to reduce the embodied
carbon significantly. When products are
not manufactured by us, Rainclear asks the
supplier for data to confirm the recycled
material content.
Our operations
We are already acting on climate related
risks and have achieved the following by:
further saving of 35% of electricity usages
by moving to use one building rather than
three and by using new laser technology.
•
Improving the use of recycled materials
across our businesses
•
100% renewal energy
• Zero waste to landfill
• Looking to re-use packaging where
possible at Rainclear
• Energy saving audits of our buildings
• Net Zero planned by 2050
We are looking to reduce our carbon
emissions through using new technology
and through manufacturing and we have
a science-based target to cut our carbon-
based emissions by a further 10% by 2025
and by 2050 we aim to be a net zero
carbon emission business – see our journey
to Net Zero on page 26.
Decarbonise our buildings: We have had
an energy saving audit of our buildings in
2021/22 and at our Wade site in Halstead,
we generate c.35% of energy via our PV
cells on the factory roof. Further at Wade
by using new technology and moving
the slot drain manufacturing there was a
Starting a low-carbon fleet: We are
committed to transitioning our fleet over
time to electric vehicles. EV options are now
available for cars and there has been strong
support from employees.
Supply chain: We have looked at sourcing
in the UK and EU for parts and are making
on-shoring or near shoring decisions where
environmental and cost benefits coexist
for example, at our Wade business we are
considering some near shoring options.
Helping customers to cut carbon: We
have used teams and zoom to interact
with customers reducing carbon and we
have low or zero carbon products for the
built environment.
Other environmental aspects: Recycling
and use of recycled materials has been a
strong driver for our businesses. We keep
under review our plastics use and are in
the process of making our packaging
recyclable, where possible. See page 17 for
information about Housebuilding Products
a CO2nstruct Zero Business Champion.
The Alumasc Group plc Report and Accounts 2022
41
Strategic report
Section 172 Statement
Our section 172 statement for the year ended 30 June 2022, gives insight into
how our stakeholders have influenced decisions during the financial year.
A key focus for the Board is to understand
the impact its decisions or actions could
have on stakeholders under s 172 of the
Companies Act 2006. The Board looks to
promote the success of the Company for
the benefit of its members as a whole, and
the Board confirms that during the financial
year it has given consideration to the
following (in addition to other matters):
•
•
•
•
the likely consequence of any decisions
in the long-term;
the interests of the Company’s
employees;
the need to foster the Company’s
business relationships with suppliers,
customers and others;
the impact of the Company’s operations
on the community and the environment;
• maintaining a reputation for high
standards of business conduct; and
•
the need to act fairly between members
of the Company.
Stakeholders
Engagement/activity
Matters considered/actions
Value created
Actions taken
Alumasc is keen to know its investors’ views. We hold
Analysts’ presentations and investor briefings at year
end and half-year for existing and potential investors.
Our Annual General Meeting also has a dial in number
as well as an opportunity to meet the Board in person.
We also offer one-to-one meetings in person or via Zoom/
Teams as required. Our Investor section of our website
is updated with news, and we also provide information
via LinkedIn, Facebook, Twitter, and Instagram. We are
registered for the green economy mark at the LSE that
has recognised our sustainability programme (see page 28).
Contact can be made with us via our contact email –
alumasc@camarco.co.uk
We also engage with shareholders in respect of
remuneration via our Remuneration Committee
Chair or the Chair (see page 64).
We engage with our employees and provide
communications about results and Board changes. Local
divisions hold meetings with staff to ensure they are aware
of any activities and to receive feedback. We work to protect
our employees Health & Safety, and wellbeing. As well as
this we provide courses and training to aid understanding
and development, with health & safety being the first item
on parent and subsidiary company Board meetings. We
regularly review remuneration at all levels in the Group
and some of our colleagues participate in incentive
arrangements to share rewards and align shareholder
and staff interests.
•
Investment opportunities
• Progressive dividend policy,
• Following the pandemic payment of
• New innovations and products
• Sustainability and ESG
• Support for M&A activity
• Short-term need for higher stocking, due
to supply chain concerns, and the need
to have stock to hand to meet customer
orders, in turn leading to high net debt
reinstated with dividends of
10.0p for 2022 (9.5p for 2021)
•
Increased the number of Fund
manager investors on our register
• Provided more information on
our ESG metrics and targets
a dividend has been a sensitive issue.
Following the high performance and
selected discussions with shareholders
and pension trustees, the Board agreed
to the payment of the final dividend
in 2021 and interim dividend in 2022.
Total 2022 (and 2021 comparative)
• On 26 August 2022 Levolux Ltd, as it
was non-core, was sold to Talrus Ltd,
a company associated with leading
private investors Rcapital
• Extra investment into Health & Safety
• Health & Wellbeing improvements
• Board agreed to recruit more new
training, supervisor courses, and
helping to reduced sickness and
apprenticeships and to hire graduates
qualifications
absences, and dissatisfaction
• Communicated our vision for the
• Motivated workforce
strategy of Alumasc with colleagues
• Foster expertise and knowledge to
• Regular training and development
enlarge the talent pool for the future
for staff
• Positive culture of honesty and trust
• Providing appraisals, career planning,
and teamwork
(where possible) to fill vacancies.
Steps to improve the diversity of
the workforce were also considered
• Statistics on gender ratios are now
presented to each subsidiary Board
and opportunities for career progression
• Enhancing working conditions
•
Improving processes and initiatives
• Supporting staff with our wellbeing app
• Retain colleagues due to increased
engagement and satisfaction and
we have awarded a 4.5% pay rise
across the business
• Promoting further diversity and
inclusion and a list of steps either
being taken or commenced was
advised to the Board
The Trustees of the Alumasc Group Pension Scheme have
a collaborative relationship with the Company. Alumasc
makes sure that the Trustees are advised and consulted
on in respect of any significant changes in the Company.
We work with the Trustees and have Company
representatives on the Investment Sub-Committee.
• Following the triennial valuation Alumasc
• Liability reduction helping the
• The Group has had a collaborative
has had an early dialogue with the
Pension Trustees in connection with
members of the pension scheme
(both current and deferred) and
contributions and other matters. We
all other stakeholders
have achieved an early resolution of
the Contributions Schedule following
good engagement with the Trustees
• Lock-in profits and de-risk
investments for the longer-term and
lower the risk for investment returns
relationship with the pension Trustees and
been involved in the investment strategy.
The deficit has fallen and the contributions
have been reduced to £1.2m starting on
1 October 2022 and will run to 31 March
2028 in line with the Company’s proposal to
achieve funding on a low dependancy basis
Shareholders
Drivers
• Return on investment
• ESG programme,
sustainability at
the core
• Clear strategy
• Transparent risk
management
Employees
Drivers
• Safe working
environment
• Good working culture
and appropriate
reward/incentivisation
• Training and
development, an
opportunity to progress
• Retention
• Communications
• Sponsoring diversity
and inclusion
Pension Trustees
Drivers
• Reducing the deficit
through outperforming
investments
• Need to de-risk and
lock-in investment gains
• Regular dialogue/
communications with
the Trustees
• Protecting the
pensioner members
and deferred members
42
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Stakeholders
Engagement/activity
Matters considered/actions
Value created
Actions taken
Alumasc is keen to know its investors’ views. We hold
Analysts’ presentations and investor briefings at year
end and half-year for existing and potential investors.
Our Annual General Meeting also has a dial in number
as well as an opportunity to meet the Board in person.
We also offer one-to-one meetings in person or via Zoom/
Teams as required. Our Investor section of our website
is updated with news, and we also provide information
via LinkedIn, Facebook, Twitter, and Instagram. We are
registered for the green economy mark at the LSE that
has recognised our sustainability programme (see page 28).
Contact can be made with us via our contact email –
alumasc@camarco.co.uk
We also engage with shareholders in respect of
remuneration via our Remuneration Committee
Chair or the Chair (see page 64).
We engage with our employees and provide
communications about results and Board changes. Local
divisions hold meetings with staff to ensure they are aware
of any activities and to receive feedback. We work to protect
our employees Health & Safety, and wellbeing. As well as
this we provide courses and training to aid understanding
and development, with health & safety being the first item
on parent and subsidiary company Board meetings. We
regularly review remuneration at all levels in the Group
and some of our colleagues participate in incentive
arrangements to share rewards and align shareholder
and staff interests.
•
Investment opportunities
• New innovations and products
• Sustainability and ESG
• Support for M&A activity
• Short-term need for higher stocking, due
to supply chain concerns, and the need
to have stock to hand to meet customer
orders, in turn leading to high net debt
• Progressive dividend policy,
reinstated with dividends of
10.0p for 2022 (9.5p for 2021)
•
Increased the number of Fund
manager investors on our register
• Provided more information on
our ESG metrics and targets
• Following the pandemic payment of
a dividend has been a sensitive issue.
Following the high performance and
selected discussions with shareholders
and pension trustees, the Board agreed
to the payment of the final dividend
in 2021 and interim dividend in 2022.
Total 2022 (and 2021 comparative)
• On 26 August 2022 Levolux Ltd, as it
was non-core, was sold to Talrus Ltd,
a company associated with leading
private investors Rcapital
• Extra investment into Health & Safety
training, supervisor courses, and
qualifications
• Health & Wellbeing improvements
helping to reduced sickness and
absences, and dissatisfaction
• Communicated our vision for the
• Motivated workforce
strategy of Alumasc with colleagues
• Foster expertise and knowledge to
• Regular training and development
enlarge the talent pool for the future
for staff
• Positive culture of honesty and trust
• Providing appraisals, career planning,
and teamwork
• Board agreed to recruit more new
apprenticeships and to hire graduates
(where possible) to fill vacancies.
Steps to improve the diversity of
the workforce were also considered
• Statistics on gender ratios are now
presented to each subsidiary Board
and opportunities for career progression
• Enhancing working conditions
•
Improving processes and initiatives
• Supporting staff with our wellbeing app
• Retain colleagues due to increased
engagement and satisfaction and
we have awarded a 4.5% pay rise
across the business
• Promoting further diversity and
inclusion and a list of steps either
being taken or commenced was
advised to the Board
The Trustees of the Alumasc Group Pension Scheme have
a collaborative relationship with the Company. Alumasc
makes sure that the Trustees are advised and consulted
on in respect of any significant changes in the Company.
We work with the Trustees and have Company
representatives on the Investment Sub-Committee.
• Following the triennial valuation Alumasc
• Liability reduction helping the
• The Group has had a collaborative
has had an early dialogue with the
Pension Trustees in connection with
contributions and other matters. We
have achieved an early resolution of
the Contributions Schedule following
good engagement with the Trustees
members of the pension scheme
(both current and deferred) and
all other stakeholders
• Lock-in profits and de-risk
investments for the longer-term and
lower the risk for investment returns
relationship with the pension Trustees and
been involved in the investment strategy.
The deficit has fallen and the contributions
have been reduced to £1.2m starting on
1 October 2022 and will run to 31 March
2028 in line with the Company’s proposal to
achieve funding on a low dependancy basis
Shareholders
Drivers
• Return on investment
• ESG programme,
sustainability at
the core
• Clear strategy
• Transparent risk
management
Employees
Drivers
• Safe working
environment
• Good working culture
and appropriate
reward/incentivisation
• Training and
development, an
opportunity to progress
• Retention
• Communications
• Sponsoring diversity
and inclusion
Pension Trustees
Drivers
• Reducing the deficit
through outperforming
investments
• Need to de-risk and
lock-in investment gains
• Regular dialogue/
communications with
the Trustees
• Protecting the
pensioner members
and deferred members
The Alumasc Group plc Report and Accounts 2022
43
Strategic report
Section 172 Statement continued
“
The Board considers
as part of its decision-
making process its
impact on stakeholders.”
Vijay Thakrar
Chair
Stakeholders
Engagement/activity
Matters considered/actions
Value created
Actions taken
Customers
Drivers
• Seek to address
climate change in
the built environment –
new solutions
• Durable and long-
lasting products
providing quality
and a fair price
• First class customer
service
Suppliers
Drivers
• Supply chain resilience
and excellent logistics
for supply chain
management
• Quality products/raw
materials
• Sustainability
• Environmental and
ethical sourcing
• We have good relationships with our customers and have
dedicated account managers in place. We collaborate
with customers and provide training and events for
customers, and develop products/services tailored
to their wishes
• We are present at trade events and can provide
information and expertise to assist customers
• We are interested in customers’ requirements
for building products to manage waste water,
drainage, housebuilding and roofing requirements
• Customers provide feedback on
•
Increased revenue and profit growth
• Listened to feedback and created new
• Greater understanding our clients’
products such as tile vents following requests.
needs with regard to sustainability
• Designing new sustainable products
to meet requests and demand
• Helping to improve the built
environment
• Our relationships and excellent service
give us a competitive advantage
products, their use and we in turn
consult with customers when we
develop new products. New
products are often launched after
customer requests and feedback
• We seek to collaborate with
customers on significant projects
• We continue to prioritise customer
service and look to make continuous
improvements, with targets to increase
order fulfilment on time and in full
• We form long-term supplier relationships, often seeking
• Reliable sourcing of products
• Key supplier data, particularly
• We engage with suppliers in
solutions and partnering for new ideas
• We ask our key suppliers to confirm compliance with our
code of ethics, including providing environmental data
• Reduction in waste and landfill
from packaging changes and other
sustainability assists with disclosures
connection with their carbon
to end customers and investors
footprint and sustainable materials
initiatives to protect the environment
• Strong supply chain logistics,
• Stable and reliable production and
quality and timely delivery services
supply of goods from vendors
•
Innovation and new products
• Quality assurance and confirmation that
• Ethical and sustainable supply chain
on a risk basis suppliers comply with our
ethical and environmental requirements
Local communities and the environment
Drivers
• Engagement with football and cricket teams, and
• Make donations to local charities
• Creating awareness of Alumasc
• We have supported local community
• Sustainable business
operation, with low
environmental impact
• Charitable giving
• Sports sponsorship
• Future employment
opportunities
nearby businesses. We look to reduce our environmental
impact year-on-year. We also seek to help with
biodiversity where possible
• Sponsorship of local matters that improve the
environment (e.g. Halstead in Bloom – see pages
34 to 36)
and not for profit organisations
in local communities and creating
organisations and further information
(see pages 34 to 36)
job opportunities
about this can be found on pages 33 to 36
• Long-standing supporter of local
• Brand awareness
sports clubs and charitable events
• Creating jobs for low-socio-
• Fundraising takes place for staff
economic families
nominated local charities and not
for profit organisations
•
Increasing awareness for recycling and
the need for staff in UK manufacturing
• Creating apprenticeships to employ
local people
•
Improving the environment
• Supporting the creation of
apprenticeships
44
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Customers
Drivers
• Seek to address
climate change in
the built environment –
new solutions
• Durable and long-
lasting products
providing quality
and a fair price
• First class customer
service
Suppliers
Drivers
for supply chain
management
• Quality products/raw
materials
• Sustainability
• Environmental and
ethical sourcing
• Sustainable business
operation, with low
environmental impact
• Charitable giving
• Sports sponsorship
• Future employment
opportunities
Stakeholders
Engagement/activity
Matters considered/actions
Value created
Actions taken
• We have good relationships with our customers and have
dedicated account managers in place. We collaborate
with customers and provide training and events for
customers, and develop products/services tailored
to their wishes
• We are present at trade events and can provide
information and expertise to assist customers
• We are interested in customers’ requirements
for building products to manage waste water,
drainage, housebuilding and roofing requirements
• Customers provide feedback on
•
Increased revenue and profit growth
• Listened to feedback and created new
products, their use and we in turn
consult with customers when we
develop new products. New
products are often launched after
customer requests and feedback
• We seek to collaborate with
customers on significant projects
• We continue to prioritise customer
service and look to make continuous
improvements, with targets to increase
order fulfilment on time and in full
• Greater understanding our clients’
needs with regard to sustainability
• Helping to improve the built
environment
• Our relationships and excellent service
give us a competitive advantage
products such as tile vents following requests.
• Designing new sustainable products
to meet requests and demand
• We form long-term supplier relationships, often seeking
• Reliable sourcing of products
• Key supplier data, particularly
• Supply chain resilience
solutions and partnering for new ideas
and excellent logistics
• We ask our key suppliers to confirm compliance with our
code of ethics, including providing environmental data
• Reduction in waste and landfill
from packaging changes and other
initiatives to protect the environment
• Stable and reliable production and
sustainability assists with disclosures
to end customers and investors
• Strong supply chain logistics,
quality and timely delivery services
supply of goods from vendors
•
Innovation and new products
• Quality assurance and confirmation that
on a risk basis suppliers comply with our
ethical and environmental requirements
• Ethical and sustainable supply chain
• We engage with suppliers in
connection with their carbon
footprint and sustainable materials
Local communities and the environment
Drivers
• Engagement with football and cricket teams, and
nearby businesses. We look to reduce our environmental
impact year-on-year. We also seek to help with
biodiversity where possible
• Sponsorship of local matters that improve the
environment (e.g. Halstead in Bloom – see pages
34 to 36)
• Make donations to local charities
and not for profit organisations
(see pages 34 to 36)
• Long-standing supporter of local
sports clubs and charitable events
• Creating awareness of Alumasc
• We have supported local community
in local communities and creating
job opportunities
organisations and further information
about this can be found on pages 33 to 36
• Brand awareness
• Creating jobs for low-socio-
• Fundraising takes place for staff
economic families
nominated local charities and not
for profit organisations
•
Increasing awareness for recycling and
the need for staff in UK manufacturing
• Creating apprenticeships to employ
local people
•
Improving the environment
• Supporting the creation of
apprenticeships
The Alumasc Group plc Report and Accounts 2022
45
Strategic report
Principal Risks and Uncertainties
Key for change since last year
No change
Increase Decrease
Risks and Uncertainties
Mitigating actions taken
Climate Change
Risk/Impact
Potential to impact our supply
chain and increase volatility
in the prices of raw materials,
and other supplies.
Sudden climate changes
events, such as increased
severe weather conditions
and storms could impact our
supply chains and shipments.
Regulations increasing
costs could be imposed
on manufacturing, certain
processes, fuels/goods used,
impacting prices for products
that customers require.
Geo-political
uncertainty/Inflation
Risk/Impact
Macroeconomic uncertainty
on a global basis due to the
pandemic in countries following
a zero covid policy in China and
other countries, and following
the Russian invasion of Ukraine
and subsequent war in Ukraine.
Markets are not settled post
Brexit and ongoing logistics
delays continue.
Inflation and interest rates
resulting in increased prices for
raw material, energy supplies
and services, also impacting
pay and other costs.
Supply chain/Inflation
Risk/Impact
International supply chain
risks have increased through
local lockdowns due to the
Covid-19 pandemic, skilled staff
shortages, increased tariffs/
duties, Brexit risks in Europe
and together political/global
volatility, and shortages of
skilled logistics staff.
Change
No change
•
Improving partnerships and relationships in our supply chain to combat
disruption and potential price increases
• Greater resilience by using suppliers from different geographical locations
• Ensuring suppliers and logistics partners understand the risks of climate change
• Strategic buying of core products and careful stocking
• Development of targets for our Scope 1, 2 and 3 emissions
•
Investment in new technology to manufacture new products to address the
needs of climate change, with improved energy efficiency
• Strategy includes helping customers address climate change, by selling
and creating innovative new products with sustainable qualities and
eco-friendly credentials
• Strategic positioning in export markets/sectors anticipated to grow faster
than the UK construction market
• Revenues are derived from a variety of end-use construction markets –
Increase
this provides resilience
• Development of added value systems and solutions that are required by
legislation, building regulation and/or specified by architects and engineers
• Continuous development and introduction of innovative green products,
systems, solutions, and services that are market leading and differentiated
against the competition
• The Group has limited exposure to currency risk, mainly the Euro and US Dollar.
These exposures are for the most part hedged, with hedging percentages
increased to manage potential FX volatility associated with Brexit
• Brexit developments being monitored closely, strong relationships monitored
and regular dialogue with key European suppliers. Contingency planning is
in place for key residual risk areas, including increased inventory of materials/
products imported from the EU
• Robust management has ensured cost increases are passed on to customers
• Annual strategic reviews, including supplier, quality, reliability, and sustainability
• Regular key supplier visits, good relationships maintained including quality
control reviews and training
Increase
• Logistics delays due to driver shortages have been managed and delivery times
agreed/managed with customers. Shortages of ships for cargo transportation
also impact delivery times. Delays in logistics are due to shortage of
transportation/staff and a steep rise in demand post Covid
• Regular supplier quality, value for money and risk reviews
• Avoidance of strategic dependence on single sources of supply
• Contingency plans in place to manage Brexit and Asian sourcing risks
• Supplier questionnaires and export checks are completed to ensure compliance
with Group policies including anti-bribery and anti-modern slavery
• Training provided on customs duties, particularly on managing new
arrangements post Brexit
• Brand and product strength generally enable increases in raw material prices
to be passed on through selling prices
46
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Key for change since last year
No change
Increase Decrease
Risks and Uncertainties
Mitigating actions taken
Cyber security and
Business Interruption
Risk/Impact
Cyber security risks and Business
Interruption risks are increasing
globally and have increased
during the Covid-19 pandemic
and following the Russian
invasion of Ukraine.
•
IT disaster recovery plans are in place for all businesses and tested regularly
– reviews are being held with each business to ensure that the Recovery Time
Objective (RTO) is adequate for the business
• Business continuity plans are in place, or being evolved where we are relocating
operations, at each business
• Awareness training and management briefings held on cyber security risks
and actions taken as preventative measures
• New security protocols and software are installed and continually reviewed
to help mitigate cyber threats
• Regular reviews of cyber security, including external penetration testing
and reviews with external IT professionals
• Critical plant and equipment are identified, with associated breakdown/recovery
plans in place
• Business interruption insurance to cover residual risks
• Further systems are being implemented to underpin the business strategic
growth plans and drive efficiency. Implementation risks are mitigated via the
use of third-parties, qualified project managers, and increased user-testing
Change
Increase
Credit risk
Risk/Impact
The risk is that credit is
extended and customers are
unable to settle invoices. The
Group manages credit risks
and the contribution from
the UK Government Export
Credit Scheme for overseas
opportunities has supported
export opportunities.
• Most credit risks are insured, including all contracting credit risk
• Large export contracts are backed by letters of credit, performance bonds,
guarantees or similar, where possible
• Due to Covid-19 and related uncertainties credit risks have increased, which
has also been an area impacted by local lockdowns due to the pandemic
• Any risks taken above insured limits are subject to strict delegated
authority limits
• Credit checks when accepting new customers/new work
• The Group employs experienced credit controllers and aged debt reports
are reviewed in monthly Board meetings
No change
Covid-19 pandemic
Risk/Impact
The pandemic is still impacting
our customers’ and suppliers’
businesses and the supply chain.
Impact in countries overseas
impacting customer and
suppliers – with lockdowns.
There is an established
approach for our divisions
and processes incorporated
into business as usual.
Adverse impact on the welfare
of staff.
• The primary focus has been on the health and wellbeing of staff and additional
communication channels were established. In addition, a new wellbeing app
has been made available to all staff to help to mitigate stress at home and in
the workplace
Decrease
• Staff have moved to a hybrid working model where appropriate.
All manufacturing sites have been operational with additional Covid-19
protocols in place
• Exports and internet sales have been buoyant and helped us to connect
with new customers/market share
• Some business opportunities and mitigations used during the pandemic (including
use of video conferencing) continue to provide ways to trade efficiently and improve
margin/revenue due to cost reduction/efficiencies. Best practices and new ways of
working that proved to be effective will be adopted going forward
• With new ways of working the business is very agile and can quickly implement
any new Government guidelines to protect employees and customers from
Covid-19. There is now greater use of IT and other flexible ways of working
have been adopted
The Alumasc Group plc Report and Accounts 2022
47
Strategic report
Principal Risks and Uncertainties continued
Key for change since last year
No change
Increase Decrease
Risks and Uncertainties
Mitigating actions taken
Health & safety risks
Risk/Impact
Health & safety incident could
occur despite a strong culture
and previous management
performance.
Staff recruitment and
retention risks
Risk/Impact
Potential lack of skilled
employees being available for
recruitment and risk of loss due
to inflation in the jobs market.
Risk of not being able to take-
on/retain key skilled staff.
Product/service
differentiation relative to
competition not developed
or maintained legislative
and media risks
Risk/Impact
Failure to innovate and have an
agile and entrepreneurial but
compliant business behaviour.
Increasing regulation and media
focus in products/service have
impacted the risk profile.
• Health & safety and the wellbeing of staff is the main priority of management
and the first Board agenda item
• Risk assessments are carried out and safe systems of work documented
and communicated
• All safety incidents and significant near misses are reported at Board level
monthly, with appropriate remedial action taken
• Group health & safety best practice days are held twice a year, chaired by
the Chief Executive
• Annual audits of health & safety are conducted in all Group businesses by
independent consultants and other specialist advisers
• Health & Safety training is provided, and implementation is monitored
• Specific focus on improving safety of higher risk operations, with external
consultancy support as needed
• Very serious near misses are reported to the Board
• Remuneration packages are appropriate to the position: staff are encouraged
and supported to grow their careers through training and development
• Board and Executive Committee focus on staff retention and reward,
supported by HR and external advice
• Employee numbers and changes monitored in monthly subsidiary
Board meetings
• Retention plans for key, high performing, and high-potential employees
• The Remuneration Committee considers retention and motivation when
considering the remuneration framework
• Succession planning
• A devolved operating model with both Group and local management
responsible for developing a deep knowledge of our specialist markets
and identifying opportunities and emerging market trends
•
Innovation best practice is planned at Group level and carried out more
regularly in each business. New product ideas are discussed as part of the
businesses’ strategy
• Annual Group strategy meetings encourage innovation and ‘blue sky’ thinking
• New product introduction/development KPI used to monitor progress
• Monitoring the market for potentially new and/or disruptive technologies
• Customer feedback considered in the design and/or supply of additional
products and services
• Devolved structure allows an agile approach to business and an ability to
meet increasing demand for products
• Employed new product managers to help identify gaps in the market and
to ensure we have a leading edge portfolio of products and services
Change
No change
Increase
No change
48
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Strategic report
Governance
Financial statements
Key for change since last year
No change
Increase Decrease
Risks and Uncertainties
Mitigating actions taken
Loss of key customers
Risk/Impact
The risk is the loss of markets or
customers. The Group operates
credit insurance (see credit risk)
to cover the potential impact
of loss of revenue. Service and
client relationship need to be
maintained to retain and grow
the business.
• Cross selling of products encouraged to grow revenues, and to introduce
customers to all our product ranges
• Develop and maintain strong customer relationships through service excellence
and dedicated account management
• Product, system, and service differentiation and reliability
• Project tracking and enquiry/quote conversion rate KPI
•
Increasing use of, and investment in, customer relationship management
(CRM) software
• Organisational and business agility to understand and adapt to changing
and emerging customer needs
Change
No change
Legacy defined benefit
pension obligations
Risk/Impact
The long-term funding of the
pension scheme removes funds
that need to be re-invested into
new technology to grow the
business. The pension scheme’s
obligations need to reduce by
investments and by the maturity
of the Scheme to prevent it
holding back the business.
Product warranty/
recall risks
Risk/Impact
Risk is one of product recall
with subsequent cost and
reputational risks, however the
Group does not have a history
of significant warranty claims
or product recalls.
• Continue to grow the business so that the relative affordability of pension deficit
contributions is improved over time. Active management of scheme liabilities
and assets to reduce deficit, with particular success during the year
Decrease
• Continue to maintain constructive relationship with Pension Trustees
• Affordable pension funding commitments agreed and met
• Regular review at Group Board level
• Use of specialist advisers
•
Investment performance and risk/return balance overseen by an Investment
Committee that receives specialist investment advice
• The Trustees are pursuing a lower risk investment strategy to match liability
risks and reduce future volatility
• Robust internal quality systems, compliance with relevant legislation, building
regulations and industry standards (e.g., ISO, BBA etc.), and product testing,
as appropriate
No change
• Group insurance programme to cover larger potential risks
• Back-to-back warranties obtained from suppliers where possible
The Alumasc Group plc Report and Accounts 2022
49
Strategic report
Risk Management Process
Alumasc’s Risk
Management Process
The Group’s risk management process is
designed to ensure that material risks to
the business are identified, considered,
analysed, and managed as part of
our strategy and business decisions.
The Board has overall responsibility for
Alumasc’s risk management. Day-to-day
risk management is delegated to the
appropriate personnel throughout the
organisation and they are responsible for
monitoring risk and mitigation strategies.
Risk Appetite
Some risk is inherent in doing business.
Alumasc’s risk appetite reflects the amount
of risk that the Board is prepared to accept
to achieve our strategic goals. The business
recognises, discusses, and agrees the
amount of strategic risk that it is prepared
to take to achieve its strategic goals. Risk
mitigation and avoidance strategies are put
in place to minimise any impacts from those
risks should they arise. Where possible and
cost effective, insurance is maintained to
pass risk on to third parties. The recognition
of risk and its impact is part of the decision-
making process.
Identification of risks
Risk identification is part of day-to-day
operations and business activity. Business
leaders and line managers are empowered
to manage risk on a day-to-day basis, and
it forms part of business team meetings.
Identified risks are assigned business
owners who are responsible for ensuring
that the risk mitigation strategies are
in place. Significant projects, including
property moves, installation of new
manufacturing equipment, or new
product launches specific registers
relating to these matters are established.
The Board formally reviews the risk register
and considers any material changes
and the related changes to mitigations
or controls. In addition, any accidents,
or significant commercial, financial or
regulatory matters are reported to the
Board as they arise.
As part of the process the operational risks
are determined by the trading business
units in consultation with their local teams.
The Strategic Risks are managed by the
Leadership Teams and the Executive
Directors, and those risks are discussed
at the plc Board.
Emerging Risks
These are considered by the Executive
Directors and the subsidiary boards,
and local management teams, and with
professionals on the leadership teams
who can consider emerging risks that
could potentially adversely impact the
business or its stakeholders; steps are
taken to mitigate these emerging risks
as appropriate. As part of the process
the leadership and management have
contact with customers and suppliers.
Climate Change
As part of our approach to manage
Climate Change risk Alumasc is using
the framework in order to shape its
environmental response internally and
to consider market impacts that has
implication for new product development.
Alumasc has as part of its approach
already used its disclosures and data
collection to help shape its policy as part
of TCFD. We use the following information
and report further on pages 25 to 32.
Our risk process is as follows:
• For Greenhouse gas emissions on
Scope 1, 2 and 3, the data reported has
been verified by Carbon Footprint, this
information has to date informed our
policy of using 100% renewable energy
and helped us to consider future policies
for our motor fleet
• Senior leadership including Executive
Directors have considered climate
change and governance is in place
via our subsidiaries and divisional
management and The Alumasc Group
plc Board
• Scenarios will be are being developed
using workshops in 2022/23, to cover
buildings, weather and other implications
resulting from climate change
As a result of our work on risk assessment
Climate Change has been added as a
principal risk as part of the businesses
internal and product development activity
to reduce the impact of GHG emissions.
See risk on page 46 for more detail on
our approach.
This Strategic Report was approved
by the Board on 6 September 2022.
1. Identification (by the local
management teams)
• Each risk from the prior year is
reviewed to see if it is still valid
or requires updating
• Emerging risks analysed
• Major regulatory changes –
new plans and initiatives
• Complex processes considered
• The external environment
2. Discussion at Subsidiary
and Group Boards
• Registers reviewed with Management
and Leadership teams
3. Prioritisation
• Rank and priorities risks-based
Impact/Likelihood
• Likelihood: the chance of the risk
occurring
• The impact of a risk (should it arise)
on the division’s financial targets
4. Mitigation process
• Creation of an action plan for high
and medium level risks
– Noting what actions are needed
– Risk ownership noted
– What new activity needs to be
implemented
5. Mitigation actions
• Subsidiary companies/divisions develop
what activity needs to be carried out
• Determination of ownership of the
mitigation process
• Recording of what needs to happen
and the frequency
50
The Alumasc Group plc Report and Accounts 2022
Non-financial Information Statement
Strategic report
Governance
Financial statements
The table below provides the non-financial information required by Section 414CB of the Companies Act 2006 and highlights where the
references can be found:
Non-financial information
Reporting requirement
Business Model
Description of management of principal
risks and impact of business activity
Environmental matters
• Climate change principal risk
• Providing sustainable solutions
for the built environment
Employees
• Health & Safety
• Engaged, motivated, and
diverse workforce
• Training and development
• Apprenticeships
Social and Community
• Developing sustainable
long-term actions
• Brand awareness
Respect for Human Rights
Development and actions
Incorporating how sustainability is part of our model and focus for our products
to tackle these challenges in the built environment.
Full description of key risks and our risk assessment processes.
Clear focus on providing solutions to help solve environmental challenges of our
customers resulting from climate change. Seeking to reduce emission with targets
for year-on-year reductions. Reductions in material to landfill and demonstrating
that already Housebuilding Products is a net zero manufacturer. This year a new
principal risk – Climate Change has been included.
Focused on the Health & Safety and Wellbeing of staff, motivation, and retention
in difficult economic times. Making employees feel engaged and promoting a
transparent and open culture. Recruiting and retaining a diverse workforce is
critical for the Group.
Page no.s
9 and 10
46 to 49
26 to 30,
39 to 41,
46
42 to 43,
38 to 39
We are committed to be a responsible business, promoting sustainable operations
and ensuring our operations respect the environment. We encourage employees
to raise funds for local groups and charities.
34 to 36
The Group does not have a Human Rights policy; however, we do have an
Anti-slavery and Human Trafficking Policy and this can be found on our website.
The Group has a zero-tolerance policy to modern slavery and human trafficking.
38
Anti-bribery and anti-corruption
The Group has a zero-tolerance policy for any form of bribery or corruption.
The Gifts and Hospitality policy was updated this year.
39 and 63
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51
Governance
Board of Directors
Committed and
experienced leadership
Vijay Thakrar
BSc, FCA
Chair
A
N
R
Paul Hooper
BSc, MBA, DipM
Chief Executive
Appointed: 2019
Vijay Thakrar is a chartered accountant
who was a partner at Deloitte and EY
before taking up a number of non-
executive director (NED) roles. He has
served as NED on various Boards,
including The Quoted Companies
Alliance and Quorn Foods. He is
currently on the Boards of Alpha FX
Group plc, RSM Group and Treatt plc,
where he is Chair Designate. He is also a
member of the Audit & Risk Committee
of the John Lewis Partnership, a role
which he will step down from by the
end of January 2023.
Appointed: 2001
Paul Hooper joined Alumasc as Group
Managing Director in April 2001. His
earlier career included a first Managing
Director role with BTR plc in 1992. He
subsequently joined Williams Holdings
plc in Special Operations, implementing
acquisitions in Europe and North
America, prior to joining Rexam PLC
as a Divisional Managing Director with
responsibility for operations in Europe
and South East Asia. Paul is also a
non-executive director on the Board
of Titon Holdings plc.
A
N
R
N
Audit Committee
Nomination Committee
Remuneration Committee
Chair of Committee
Simon Dray
BSc, FCA
Group Finance Director
Appointed: 2021
Simon Dray has a 30-year career in a range of senior
finance functions with multi-national companies.
After qualifying as a chartered accountant with
Deloitte, Simon moved to work in industry. From 2002
to 2008 he worked at Halma plc as Group Financial
Controller, before joining Low & Bonar plc in 2008,
working in a variety of senior finance roles including
interim CFO before becoming Director of Strategy
and M&A. Simon brings experience of heading up
finance departments for publicly listed companies
and significant M&A experience.
52
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Governance
Financial statements
Stephen Beechey
BSc, MA, MRICS,
MCIOB, MAPM
Non-executive Director
A
N
R
Appointed: 2019
Stephen Beechey has worked in the
construction industry for over 30 years
and he has a broad understanding of
all aspects of the business. He is also an
executive director of the Wates Group, one
of the largest privately-owned construction,
development and property services
companies in the UK, where he sits on
the Group Executive Committee and the
Construction Group Board, he is a director
of the Construction Skills Certification
Scheme Ltd. Stephen chairs the Alumasc
Remuneration Committee and is a member
of the Audit and Nomination Committees.
Karen McInerney
BA Hons, FCA
Non-executive Director
A
N
R
Appointed: 2022
Karen McInerney is a qualified chartered
accountant with 27 years’ experience at
Computacenter plc, where she currently
leads financial operations as Group Financial
Controller. Karen has a wealth of experience
in accounting, financial reporting, acquisitions,
as a pension trustee, tax and treasury
management, Audit Committee/governance
matters, and is also a member of the Risk
Committee at Computacenter plc. Karen
holds the position of Chair of The Alumasc
Audit Committee and is a member of the
Remuneration and Nomination Committees.
Board Tenure
>15 Years: 1
<5 Years: 6
Gilbert Jackson
Executive Director
Michael Leaf
Executive Director
Appointed: 2019
Gilbert Jackson, currently responsible for
the Building Envelope division of Roofing
and Levolux, has extensive experience in
building products and the construction
industry. He championed the idea
of specification led cross-selling of a
warranted system approach. Gilbert
joined Alumasc in 2011, having previously
worked at Polypipe Civils Ltd, Marley
Waterproofing and IKO.
Appointed: 2019
Michael Leaf joined Alumasc in 2011 as Managing
Director of Timloc Building Products where he has
overseen significant growth in both the revenues
and profitability of the business. Michael has also
performed a number of other roles during his time with
Alumasc including the management of the Pendock
and Engineering businesses prior to their sale. Michael
is currently the Divisional Managing Director of the
Housebuilding Products division. For the last 25 years
Michael has held a number of senior positions within the
building products industry and prior to joining Alumasc,
Michael was a Director at Ideal Standard (UK) Ltd.
The Alumasc Group plc Report and Accounts 2022
53
Governance
Corporate Governance Statement
“
The Board views good
corporate governance as
the key to providing a clear
framework for long-term
sustainable growth.”
Vijay Thakrar
Chair
Our governance framework
Our Corporate governance framework is designed to promote decision-making to support our strategy
to be a leading sustainable building products business for the benefit of our stakeholders.
The composition of the Board and its Committees as at 6 September 2022, is as follows:
The Alumasc Group Plc Board Of Directors
(Biographical details can be found on pages 52 and 53)
Audit
Committee
Remuneration
Committee
Nomination
Committee
Membership as at
6 September 2022
Membership as at
6 September 2022
Membership as at
6 September 2022
Karen McInerney
(Chair)
Stephen Beechey
Vijay Thakrar
Stephen Beechey
(Chair)
Karen McInerney
Vijay Thakrar
Vijay Thakrar
(Chair)
Stephen Beechey
Karen McInerney
see pages 60-63
see pages 64-72
see page 59
Director induction
On appointment to the Board, Mrs Karen
McInerney was provided with:
• Meetings with the Group Company
Secretary, all Board Members and
Key Management Team members
• A tailored induction appropriate
to her position
• A briefing from the Nomad
The Board adopted the QCA Corporate
Governance Code 2018 (the QCA Code)
on 25 June 2019 pursuant to Rule 26
of the AIM rules and a summary of our
approach is set out on pages 56 to 58.
The following section outlines how the
Group fully complies with the QCA
Code and how the Board and
Committees operate.
Executive Committee
Further information on our Corporate Governance can also be
found on our website (www.alumasc.co.uk)
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Governance
Financial statements
Deliver growth
Principle 1:
Establish a strategy
and business model
which promotes
long-term value
for shareholders.
The Executive Committee, led by the Chief Executive Officer, the Executive Directors and Executive
Committee members are responsible for recommending to the Board the strategy of the Group. The
strategic focus of the Group also reflects and takes into account views of the Group’s key stakeholders: its
shareholders; employees; trustees of its pensions schemes; customers; suppliers; and bankers. The Board
reviews management’s recommendations, challenges them and approves the strategic approach. In the year
we reviewed our strategic alignment with environmental sustainability products and considered how Alumasc
could accelerate organic and non-organic growth. The Executive Committee and the management teams of
the Group’s divisions are focused on delivering the agreed plans.
Further details of the Company’s business model and strategy are set out on pages 9 to 10.
Principle 2:
Seek to understand
and meet shareholder
needs and
expectations.
Alumasc has regular dialogue with existing and potential investors. Meetings are organised at least twice
a year providing investors with a forum to understand the business and our risks/opportunities. During the
financial year we had an increased level of contact with investors and analysts via Zoom and Teams calls as
a result of the pandemic. We plan to hold a Capital Markets Day for Investors in October 2022 to build further
engagement with investors, to coincide with our Annual General Meeting.
Principle 3:
Take into account
wider stakeholder and
social responsibilities
and their implications
for long-term success.
We recognise the importance of balancing the interest of our key stakeholders: employees; customers;
investors; suppliers; and the communities in which we operate. Engagement with our stakeholders makes
us a stronger business. Corporate and social responsibilities are taken seriously and Alumasc is aware
of its role and the need to build strong relationships across a range of stakeholder groups. Protecting
employees’ Health & Safety is a number one priority and is always the first agenda item for all subsidiary
and plc board meetings.
Our s.172 Statement on pages 42 to 45 provides more information on how we take into account our
responsibilities to our various stakeholders.
Principle 4:
Embed effective
risk management
considering both
opportunities and
threats throughout
the organisation.
The Board recognises that it is responsible for deciding on the nature and extent of key risks the Group
decides to take in achieving its strategic objectives and the Board maintains a robust risk register and internal
controls system to support this. The Board reviews and considers its risk appetite on an annual basis. The
Board’s policy on risk management encompasses all significant business risks to the Group, including strategic,
commercial, financial, operational and Health & Safety risks, which could undermine the achievement of
business objectives. The Board sees the monitoring of principal risks as critical for business.
Our principal risks and risk management approach is outlined on pages 46 to 50.
The Board maintains overall responsibility for the Group’s approach to risk management, however it has also
delegated some responsibility in respect of financial controls to the Audit Committee. Any new and material
risks identified by management are communicated promptly to the Board.
Please see page 39 on compliance with Group policies.
The Alumasc Group plc Report and Accounts 2022
55
Governance
Corporate Governance Statement continued
Deliver growth
Principle 5:
Maintain the Board
as a well-functioning,
balanced team led
by the Chair.
The Board consists of three Independent Non-executive Directors (one of whom is Chair), Chief Executive,
Group Finance Director and two Executive Directors (each of whom is the Managing Director of a Division).
This combination provides the Board as a whole with appropriate understanding of the Company’s business
balanced by independent challenge/perspectives from Non-executives.
Clear separation of roles between the Chair and the Chief Executive Officer is in place. The Chair takes
responsibility for the running of the Board; no individual or group dominates the Board’s decision-making,
and the Chair ensures that all Board members are properly briefed on all key matters. The Chair has overall
responsibility for corporate governance matters.
Board agendas are approved by the Chair. Directors are provided with regular, timely information on the
performance of the divisions within the Group. The Chair facilitates the meetings and ensures there is time for
each Director to contribute. Directors contribute their independent judgement and experience to challenge and
explore key matters. The Board is provided with Health & Safety reports, finance and management reports and
other information on a regular basis.
The Chief Executive Officer, with the other Executive Directors, has responsibility for implementing the strategy of
the Board and for managing day-to-day business activities. The Company Secretary is responsible for ensuring
that Board procedures are followed together with all applicable rules and regulations.
All Non-executive Directors have confirmed and demonstrated that they have adequate time available to meet
the requirements of the role and they have no conflicts of interest. Any change in commitments is notified as soon
as possible by the Directors to the Chair and Company Secretary. Non-executive Directors are expected to devote
such time as is necessary for the proper performance of their duties, including preparation for and attendance at
Board, Committee or shareholder meetings.
The Board has delegated authority to the Audit, Remuneration and Nomination Committees to support the
work of the Board in the performance of its duties. Their reports are on pages 59 and 64 to 72, and their terms
of reference can be found at www.alumasc.co.uk. The Board checks annually and can confirm that it believes
that the members of the Committees have the appropriate skills and knowledge to carry out their roles.
In accordance with the Articles of Association, any Director appointed during the year is required to retire and seek
election by shareholders at the next Annual General Meeting (AGM) following their appointment. Additionally, the
Directors are expected to seek re-appointment after serving three years in office as a Director and to retire by
rotation each year and seek re-election at the AGM. The Non-executive Director who was appointed during the
year, Mrs Karen McInerney, is required to offer herself for election at the forthcoming AGM. The Directors required
to retire are those who have served three years since their previous re-election or were appointed during the year.
Standing for re-election are Vijay Thakrar, Paul Hooper and Stephen Beechey.
All Directors have access to independent professional advice if required and at the Company’s expense. This is in
addition to the access that every Director has to the Company Secretary. The Company Secretary is charged by
the Board with ensuring that Board procedures are followed.
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Governance
Financial statements
Deliver growth
Principle 5:
Continued
Principle 6:
Ensure that between
them the directors
have the necessary
up-to-date
experience, skills
and capabilities.
Scheduled Board meeting attendance
Directors
V Thakrar
S Beechey
Position
Chair
Non-executive Director
K McInerney
Non-executive Director
P Hooper
S Dray
G Jackson
M Leaf
J S McCall
J P Pither
Chief Executive
Group Finance Director
Executive Director
Executive Director
Former Chair and Non-executive Director
Former Non-executive Director
(Attended/eligible to attend)
7/7
6/71
4/42
7/7
7/7
7/7
7/7
3/33
1/14
1 Mr Stephen Beechey was unable to attend one Board meeting due to a conflict of meetings.
2 Mrs Karen McInerney was appointed on 1 January 2022.
3 Mr John McCall retired on 31 December 2021.
4 Mr Jon Pither retired on 21 October 2021.
Profiles of the Board members appear on pages 52 and 53 of this report and on our website
(https://www.alumasc.co.uk/investors/board-directors). These profiles detail the high level and
range of business experience which enables the Group to be managed effectively.
During the year, the Board undertook a formal review of the Directors’ skills and experience, covering a range
of areas considered necessary for the Directors, as a group, to be able to provide appropriate leadership to
the Company.
It was felt that, while there are areas where collectively the Board has areas of strength (such as strategic
and management/leadership experience), there are also areas in which the Board needs to develop its
capabilities. Two particular such areas identified are:
Digitalisation – using this both to drive growth/efficiency and managing its risks. Following the review, the
Board has asked the Group’s Head of IT to provide regular updates to the Board on emerging IT issues, and
how the risks for Alumasc, including cyber security and Group-wide IT processes, are being managed and
what further enhancements/training are needed. On digital growth opportunities, some business units have
high levels of expertise and success.
The Board has scheduled time to engage with the leaders of those units to increase the Board’s
understanding of the digital growth and efficiency opportunities and how they could be rolled out across
the Group. Areas of potential efficiency include greater digitalisation of our processes.
Marketing and social media – how social media can be used more extensively in our marketing. There are
examples of some really successful social media activities in various business units. The Group is considering
how it can best coordinate these activities (including with our Group Financial PR advisors) and share best
practice across the Group, with periodic updates being provided to the Board. We have also recently further
strengthened our in-house knowledge and recruited Product Managers with expertise in this area.
The Alumasc Group plc Report and Accounts 2022
57
Governance
Corporate Governance Statement continued
Deliver growth
Principle 7:
Evaluate Board
performance
based on clear and
relevant objectives
seeking continuous
improvement.
The Board also undertook a formal evaluation of its effectiveness during the year.
While many areas of how the Board operates are felt to be strong (such as review/oversight of strategy and
understanding of the Board’s responsibilities to a wide range of stakeholders), there are some areas where the
Board felt it could improve:
Staff engagement – divisional management engage extensively with staff colleagues and it was felt that
Board visibility could be improved, especially following the easing of restrictions that arose during the Covid
pandemic. The Board has therefore scheduled its future meetings such that each of our divisions is visited
at least annually. There will be sufficient time allocated at each visit to view and understand the operations
and engage with staff colleagues. In addition, all colleagues across the Group now receive a bi-annual Group
update from the Chair and CEO, covering financial performance as well as ESG matters, which has been
positively welcomed. This augments the divisional communications that are already in place.
Internal governance and reporting – it was felt that we should review opportunities to maximise the value
derived from our existing internal governance processes. The Board will consider this more closely in coming
months. One enhancement made recently is the introduction of an electronic Board portal for sharing
papers both for Group/plc and Divisional Board and Committee meetings. This is already leading to greater
streamlining and efficiency in our internal governance and reporting, as well as reduction in use of paper.
Principle 8:
Promote corporate
culture that is based
on ethical values
and behaviours.
Our Chair and Chief Executive Officer lead on corporate culture and encourage the values embodied in the
Code of Conduct. All employees are expected to maintain an appropriate standard of conduct in all business
dealings and the Directors set the tone at the top.
Alumasc Group personnel are asked to maintain appropriate standards and to comply with Health & Safety
regulations and deal ethically with customers and suppliers. The Group has a robust Compliance framework
with policies that govern its activities in respect of zero tolerance towards Modern Slavery, Anti-bribery,
Whistleblowing and Data Protection, Non-facilitation of Tax evasion and Supplier standards. The Company
reviews compliance with these policies. Alumasc has a series of requirements for its suppliers and these are
reviewed from time to time by internal procurement professionals.
Any matters of concern can also be raised to the Chair or to the Chair of our Audit Committee, as appropriate.
Principle 9:
Maintain Governance
structures
and processes that
are fit for purpose
and support good
decision-making
by the Board.
There are seven scheduled Board meetings each year. Before each Board meeting an agenda is prepared
and circulated to the Directors, together with papers in good time before each meeting.
The Board is responsible for the overall governance of the Company. Its responsibilities include setting the
strategic direction of the Company, ensuring there is appropriate leadership to put the strategy into action
and to supervise the management of the business. There is a formal Schedule of Matters Reserved for the
Board and this includes discussions about the overall Group long-term strategy. The Board also considers
annual budgets, annual and interim results, dividend policies, material contract approvals, large capital
expenditure requests, trading announcements, acquisitions/disposals and senior appointments.
Governance for Alumasc goes beyond basic compliance, and it has effective governance and
transparent decision-making, at divisional and Group level, that link to Group strategy.
Principle 10:
Communicate
how the Company
is governed and
is performing
by maintaining
a dialogue with
shareholders and
other relevant
Stakeholders.
The business sets a high priority on maintaining good communications with its stakeholders. On our website
(www.alumasc.co.uk) the ‘Investors’ section is regularly updated. We communicate with our shareholders and
analysts through: the Annual Report, the half-year announcements, the AGM and roadshows/meetings with
Investors and at Analysts’ briefings.
The Board also pays attention to the voting recommendations provided by third-party proxy voting services,
as well as the voting outcomes of specific resolutions with a view to determining whether any further action
is required.
The Company maintains a dedicated email address for use by current and/or potential investors
(alumasc@camarco.co.uk). After the AGM the Company announces the results of the voting, including details
of the proxy votes cast or received. In addition, this information is available on our investor section of the
website (www.alumasc.co.uk).
The Board also receives information on the views of shareholders from its brokers and Nomad. Feedback from
analysts, other advisers and investors is also reviewed. Discussions are held to enable, where needed, closer
alignment between the way in which the Group is led and shareholder views.
Information on engaging with wider stakeholders is provided in the s.172 Statement on pages 42 to 43.
58
The Alumasc Group plc Report and Accounts 2022
Nomination Committee Report
Strategic report
Governance
Financial statements
Dear shareholder
I am pleased to present the Committee’s report on its work for the
year ended 30 June 2022, as well additional information about its
ongoing objectives and responsibilities.
As reported in the Chair’s Statement, two long standing Board
members retired during the year, Jon Pither on 21 October 2021
and John McCall on 31 December 2021. Between them, they
served Alumasc loyally for nearly 70 years and, on behalf of all our
stakeholders, I thank John McCall and Jon Pither for their leadership,
contribution and unwavering support of the business over many
years. Their wise counsel will be sorely missed and I wish them both
a happy and long retirement.
I was appointed Chair in succession to John McCall and would like
to thank the Board for their support and confidence. I stepped down
as Audit Committee Chair and the Committee undertook a thorough
process to recruit my successor. The Committee was delighted to
appoint Karen McInerney as a Non-executive Director and Chair of
the Audit Committee as well as a member of the Remuneration and
Nomination Committees. Karen has significant financial, treasury
and risk management experience and has already demonstrated the
benefit of her diverse thinking in Board discussions.
Also, following Jon Pither’s retirement, Stephen Beechey became
Chair of the Remuneration Committee. Stephen has significant
experience of remuneration matters in the Construction and Building
Industry and is already bringing that to bear.
Our Chief Executive, Paul Hooper, was invited to become a Non-
executive director of Titon Holdings plc in the year. The Committee
reviewed this and was pleased to support the appointment, as it
helps broaden Paul’s skills and experience from which Alumasc will
also benefit.
During the Spring, the Committee and Board conducted a review of
the Board’s skills and experience together with a formal evaluation.
The results and focus areas from this are summarised in our
Corporate Governance Report on pages 55 to 58.
The Committee also reviewed and updated its Terms of Reference.
The Committee’s focus in the period ahead will be on:
• Ensuring that the Board has an appropriate and diverse mix of
skills and experience to drive Alumasc forward
• Succession and resilience planning across our senior leadership
teams in the business
• Supporting the development across the business of our next
generation of leaders
During the year there were three formal scheduled Committee
meetings. In addition, several unscheduled meetings were held,
attendance at the scheduled meetings is shown in the table. The Group
Company secretary attends all formal meetings of the Committee, and
the Committee may also ask other executives to attend, as necessary.
Board re-appointments
Having been appointed in the year Mrs Karen McInerney will offer
herself for election at the forthcoming AGM. Those who have come
to the end of their three-year term and will seek re-election are
referenced on page 56 of our Governance report and in the Notice
of AGM on page 135.
Vijay Thakrar
Chair of the Nomination Committee
6 September 2022
The Alumasc Group plc Report and Accounts 2022
59
Meeting attendance
Details of the Committee members who served
during the year can be found below.
Meeting attendance
Mr Vijay Thakrar (Chair)1
Mr John McCall2
Mr Jon Pither3
Mr Stephen Beechey
Mrs Karen McInerney4
Attended/
eligible to attend
3/3
2/2
0/0
3/3
1/1
Notes:
1. Vijay Thakrar was appointed as Committee Chair
on 1 January 2022
2. John McCall retired as Chair on 31 December 2021
3. Jon Pither retired as a Non-executive Director on
21 October 2021
4. Karen McInerney was appointed as a Non-executive
Director and Committee member on 1 January 2022
“
I thank John McCall and Jon Pither
for their leadership, contribution and
unwavering support of the business
over many years.”
Vijay Thakrar
Chair of the Nomination Committee
Governance
Audit Committee Report
Meeting attendance
Details of the Committee members who served
during the year can be found below.
Members
Karen McInerney (Chair)1
Vijay Thakrar
Stephen Beechey
John Pither2
Attended/
eligible to attend
3/3
4/4
4/4
1/1
1
Karen McInerney was appointed as a Non-executive
Director and Chair on 1 January 2022
2 Jon Pither retired on 21 October 2021
The members of the Committee are as follows:
• Karen McInerney (Chair)
• Vijay Thakrar
• Stephen Beechey
The Group Chief Executive, Group Finance Director,
Group Financial Controller and the external auditors
usually attend the meetings of the Committee by
invitation. The Committee met four times in the year,
all of which were attended by the external auditors,
and a record of the meeting attendance by Committee
members is set out above. Following each Audit
Committee meeting that the external auditors attend,
the Committee meets with the auditors without
members of the management team being present.
“
The Alumasc Board as a whole
acknowledges that it is ultimately
responsible for the Group’s system
of internal control and for reviewing
its effectiveness.”
Karen McInerney
Chair of the Audit Committee
60
The Alumasc Group plc Report and Accounts 2022
Statement from the Chair
of the Audit Committee
Dear Shareholders
I am pleased to present the Audit Committee’s report for the year
ended 30 June 2022. This is my first report since succeeding Vijay
Thakrar as Chair of the Committee on 1 January 2022. I would like,
on behalf of the Committee, to express our gratitude for Vijay’s
contribution to the leadership of this Committee over the last three
years, and to Jon Pither, who retired from the Committee and the
Board on 21 October 2021.
The Committee’s main duties are as follows:
• monitoring and reviewing the integrity of the financial reporting
process and reviewing the full year financial statements, interim
statements and any trading updates provided to the market,
including the appropriateness of judgements and estimates
taken in preparing the financial statements and preparations
for the introduction of new accounting standards;
• monitoring and reviewing the effectiveness of the Group’s
internal financial controls including approval of the resourcing,
scope and review of the results of the Company’s internal
audit activities;
• monitoring and reviewing the external auditor’s independence
and objectivity and the effectiveness of the audit process,
taking into consideration relevant UK professional and
regulatory requirements;
• making recommendations to the Board, for it to put to the
shareholders for their approval in general meeting, in relation
to the appointment, re-appointment and removal of the
external auditor and to approve the remuneration and terms
of engagement of the external auditor;
•
•
reviewing any proposal for the external auditor to supply
non-audit services, in view of Group policy and relevant
ethical guidance regarding the provision of non-audit
services by the external audit firm; and
reporting any matters to the Board in respect of which
it considers that action or improvement is needed and
making recommendations as to the steps to be taken.
Activities of the Committee in the 2021/22
Financial Year
The main activities of the Committee during the year were:
• overseeing the tender process for the Group’s external audit,
making recommendations to the Board with regard to the
choice of the Group’s external auditors, as described further
below, and overseeing the induction of the new external auditor;
•
reviewing and challenging management’s forecasts and
scenarios, its liquidity position and the appropriateness of
adopting a going concern basis in these financial statements;
• monitoring the integrity of the interim and full year results
announcements and financial statements, trading statements
and any other announcements containing financial information,
and considering the application of key accounting policies and
accounting standards and the key estimates and judgements
taken by management in the preparation of those statements
and the external auditor’s comments in those areas;
Strategic report
Governance
Financial statements
•
•
reviewing the Annual Report to ensure it is fair, balanced and
understandable, and recommending its approval to the Board;
reviewing and approving the audit plan of the external auditor,
including the scope of the work, the key areas of focus in terms
of audit risk and judgement, and the basis on which the auditor
assesses materiality, and assessing their independence;
• evaluating the effectiveness of the external audit;
•
•
reviewing the treatment of the disposal of the Levolux business
as a discontinued operation in the 2021/22 financial statements;
reviewing and approving the plan and scope of internal audit
work, considering internal audit reports issued during the year
and discussing key matters and improvement points arising from
those audits with management; and
• assisting with the induction of the new Group Finance Director.
Activities of the Committee in the 2022/23
Financial Year
The additional objectives of the Committee during the coming
year are:
•
•
reviewing the scope of the internal audit work programme and
its resourcing; and
reviewing the continued upgrading of the Group’s Enterprise
Resource Planning (ERP) systems, to ensure adequate financial
controls remain in place.
Significant areas of judgement considered in
relation to the financial statements
The Committee considered, in conjunction with management and
the external auditor, the significant areas of estimation, judgement
and possible error in preparing the financial statements and
disclosures, discussed how these were addressed and approved
the conclusions of this work. The principal areas of focus in this
regard were:
(i) Revenue recognition
Revenue recognition on construction projects carried out in the
Building Envelope division, which has bespoke construction projects
with performance obligations that can span more than one
accounting period, leads to the application of judgement in the
recognition of revenue and profit over time, including estimation of
the percentage of contract completion and estimates of costs to
complete the work, as described in the accounting policy note on
page 90. Having reviewed these judgements taken at the year end
with management and the external auditors, the Committee was
satisfied with management’s judgements for the level of revenue
and profit recognised on construction projects for the financial year.
(ii) Defined benefit pension scheme valuation
As described in the risk review on page 49, Alumasc has relatively
significant legacy defined benefit pension obligations in the
context of the overall size of the Group. Therefore, relatively small
changes to market assumptions (particularly the discount rate and
inflation rate); and actuarial assumptions used to value defined
benefit pension obligations under IAS 19 can have a material
impact on the Group’s Consolidated Statement of Financial
Position and Consolidated Statement of Comprehensive Income.
Further details are given in note 22 to the consolidated financial
statements. Having reviewed the valuation assumptions adopted
by management, in conjunction with actuarial advice received
and the review of those assumptions by the external auditors, the
Committee was satisfied that the Group balance sheet reflects
an estimated valuation of the Group’s pension obligations that
is consistent with IAS 19’s valuation methodology.
(iii) Accuracy and valuation of inventory
The Group’s businesses carry significant levels of inventory, both
manufactured in-house and bought-in. The accuracy of the records
of physical inventory on hand and the valuation of that inventory,
including judgements as to the value of manufacturing cost to
be absorbed into the inventory valuation and the net realisable
value particularly of old and slow-moving inventory, can affect
both the Group’s Consolidated Statement of Financial Position
and its Consolidated Statement of Comprehensive Income.
Inventory records, including an analysis of trends and the evolution
of management judgements on valuation are reviewed by the
Executive Directors in monthly meetings with operating company
management and in associated Board reports. Internal audit has
particular focus on checking the accuracy of the inventory records
through attendance at stock counts and reviewing the application
of judgements taken by local management surrounding valuation.
Physical stock counts are held at the financial year end and half
year end, and more regularly when needed. The Committee reviews
regular reports from executive management, internal audit and the
results of the external audit to satisfy itself that inventory values
across the Group are materially accurate.
(iv) Going concern
The Committee has reviewed and challenged management
base case trading and cashflow scenarios covering the period to
September 2023, including stress tested and reverse stress tested
scenarios as set out on page 85. The Committee has also discussed
these issues with the external auditors to seek their opinion. In light
of these actions and, taking account of the comments on page
85, the Committee considers that the disclosure of the Board’s
assessment of Going concern is complete and understandable.
The Alumasc Group plc Report and Accounts 2022
61
Governance
Audit Committee Report continued
Appointment of Crowe UK LLP (Crowe) as the
Group’s external auditors
At the request of the Board, in February 2022 the Committee led a
tender process for the future appointment of the Group’s external
auditors. BDO and five other firms were invited to participate in this
process. The principal criteria by which the tendering firms were
assessed were:
•
•
•
•
•
the quality and robustness of the proposed audit process and
approach, as evidenced by presentations to the Committee and
information gathered as part of the tender process, together
with independent information in the public domain on the track
record of the tendering firms with regard to audit quality;
the degree of alignment between the tendering audit firms and
Alumasc with regard to understanding of the business, past
experience of auditing building products, construction and
manufacturing companies, the identification of key audit risks
and the proposed approach to auditing those risks;
the quality of leadership of the audit team and key audit team
members and the degree of challenge to management that the
audit team would bring;
the perceived ability for the auditors to add value to Alumasc as
part of the audit through their observations of the business and
making recommendations for improvement; and
the efficiency and value for money of the audit relative to the
scope of work required.
The conclusion of the audit tender process was a recommendation
from the Committee to the Board to appoint Crowe as the Group’s
auditors for the 2021/22 financial year onwards, which the Board
accepted. The Committee would like to thank BDO for their service
as the Group’s auditors and the professionalism with which they
approached the tender process and handover to Crowe.
Assessment of the effectiveness of external audit
The Committee assessed the performance of Crowe both through
formal Committee meetings, Crowe’s reports to the Committee and
more informal interaction since their appointment. The Committee
also received structured feedback following the year end audit from
senior Group level and operational management on such matters
as to Crowe’s objectivity, proficiency, resourcing and audit strategy
and planning.
Having considered this information, the Committee concluded that
Crowe’s first external audit of Alumasc was robust and effective.
Assessment of the independence of the
external auditor
The Group’s policy on the independence of auditors is
consistent with ethical standards published by the Financial
Reporting Council.
As described above, the Group changed its external auditors
during the year from BDO to Crowe. The Committee assessed
Crowe’s effectiveness and independence on their appointment
and will re-assess them annually in future.
Any non-audit services proposed to be carried out by the
external auditor are discussed and approved in advance by
the Committee. During the financial year under review and
following their appointment as auditors Crowe did not carry
out any non-audit work.
Crowe have confirmed to the Committee that they consider
themselves to be independent within the meaning of regulatory
and professional requirements.
In view of all the above, the Committee is satisfied with the
independence of the external auditor.
Appointment and re-appointment of the
external auditor
As described above, the audit for Alumasc’s financial year ended
30 June 2022 was Crowe’s first following their appointment in
April 2022. As this appointment was made by the Board after the
Group’s AGM in October 2021, resolutions are being put to the
AGM to be held in October 2022 both to confirm Crowe’s initial
appointment and to recommend their appointment for the
2022/23 financial year.
Effective internal control and risk management
The Alumasc Board as a whole acknowledges that it is ultimately
responsible for the Group’s system of internal control and for
reviewing its effectiveness. The system is designed to be robust in
its management of the risk of failure to achieve business objectives.
This risk, however, cannot be wholly eliminated and therefore the
system can only provide reasonable and not absolute assurance
against the risk of material misstatement, fraud or loss.
The Group has an ongoing process for identifying, evaluating and
managing the significant risks faced by the business. The process
was in place during the year and remained in place on the date
that the Annual Report and financial statements were approved
by the Board. The main elements of the Group’s internal control
process are as follows:
(i) Risk management
Risk management is a continuing activity throughout the year,
dealt with through the board meetings of operating companies.
In addition, a formal business risk review exercise is conducted
every year at each operating company and for the Group as a
whole. This identifies the most important risks, their likelihood of
occurrence and possible business and financial implications and
the effectiveness of mitigating controls. A Group level summary of
these risk reviews is provided on pages 46 to 49. Each operating
company has implemented procedures for controlling
the risks relevant to their business.
Based on their attendance at the board meetings of each
operating company, the Executive Directors report periodically to
the Board on the risk management processes that have been in
place during the year and the effectiveness of the level of control
in managing the identified risks. The Board is able to confirm that
these procedures are ongoing.
62
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
(ii) Financial reporting and monitoring
The Board receives regular financial reports, including monthly
management accounts, quarterly re-forecasts, annual budgets
and three-year plans. These procedures are intended to ensure
that the Board maintains full and effective control over material
financial issues. An Executive Committee, comprising the Group’s
Executive Directors and the Divisional Managing Directors of
the Group’s operating segments, reviews trading activities and
addresses matters of common interest with regard to Health &
Safety, strategic development, performance, risk and other matters
of mutual Group interest.
Day to day management of the Group companies is delegated
to operational management with a clearly defined system of
control, including:
• an organisational structure with an appropriate delegation of
authority within each company;
•
the identification and appraisal of business and financial risks
both formally, within the annual process of preparing business
plans and budgets, and informally, through close monitoring
of operations;
• a comprehensive financial reporting system within which actual
results are compared with approved budgets, re-forecasts and
the previous year’s figures on a monthly basis and reviewed at
both local and Group level; and
• an investment evaluation procedure to ensure an appropriate
level of scrutiny and approval for all significant items of capital
expenditure. Capital expenditure plans are discussed during the
annual budget process and any project costing over £250,000
requires Board approval.
(iii) Internal Controls Assurance
The Audit Committee on behalf of the Board has reviewed during
the year the effectiveness of the system of internal financial control
from information provided by management, the Group’s external
auditors and the results from internal audits. The Board as a whole
assessed internal control more generally, including the key risks
affecting the Group in the delivery of its long-term strategies, as
summarised on pages 46 to 49. No material weaknesses in internal
control were identified in the year.
(iv) Internal Audit
The Committee’s view is that the size and complexity of the
Group and the close involvement of the Executive Directors make
it unnecessary for Alumasc to have a dedicated internal audit
function, although part of the Group Financial Controller’s role,
and that of her team, is to carry out internal audits in each of the
Group’s principal operating locations each year. This position is kept
under annual review by the Committee, bearing in mind the size of
the Group at that time, the complexity of its systems and processes,
and whether the experience of the staff carrying out internal audit
visits is appropriate for the areas under review.
The principal focus of this internal audit work is to check the
existence and effective operation of key internal financial controls.
The Committee reviews and approves the proposed scope of
internal audit activities each year, and ensures that key risk
areas are covered, and that agreed recommendations arising
from previous internal and external audits are re-reviewed to
assess whether they have been implemented. The Committee
has requested future work to be focused on high risk areas that
could have a material business or financial impact.
Code of Conduct
The Group has in place a Code of Conduct, setting out the
standards of business practice that the Group expects from its
executives and employees. This policy is subject to periodic review
to ensure it reflects the operation of the Group and the business
environment in which it operates.
Whistleblowing policy
The Group has a Whistleblowing policy, which provides a formal
mechanism whereby every Group employee can, on a confidential
basis, raise concerns over potential malpractice or impropriety
within the Group. Speakup posters are being designed for
distribution around the Group.
Anti-bribery and corruption policy
The Group has in place a policy with regards to compliance with the
Bribery Act 2010 and this has been refreshed in the year along with
the training materials together with the Gifts and Hospitality Policy.
The Group’s Anti-bribery and Corruption Policy reflects the Board’s
zero tolerance approach to bribery and corruption of all kinds.
This policy has been cascaded down into the operating companies
with relevant training provided. Any matters of particular concern,
whether arising from due diligence or otherwise with regard to
related parties, are raised and discussed at monthly operating
company board meetings. An annual update on the Anti-Bribery
programme is provided to the Committee.
Tax policy
The Group has in place a tax policy, which sets out the Group’s desire
to conduct its operations in a tax-efficient manner in compliance
with all relevant legislation, to engage with tax authorities in an
honest and transparent way. In accordance with this policy and
its Code of Conduct, the Group operates a zero-tolerance policy
towards tax evasion and the activities which facilitate it. The Group
is committed to ensuring its businesses meet the compliance
obligations of the UK corporate criminal offences legislation
regarding the failure to prevent the facilitation of tax evasion.
Copies of the Group’s Code of Conduct and associated policies
can be found on the Group’s website www.alumasc.co.uk
Karen McInerney
Chair of the Audit Committee
6 September 2022
The Alumasc Group plc Report and Accounts 2022
63
Governance
Directors’ Remuneration Report
Meeting attendance
Details of the Committee members who served
during the year can be found below.
Members
Stephen Beechey (Chair)1
Jon Pither2
Karen McInerney3
Vijay Thakrar
Attended/
eligible to attend
3/3
1/1
2/2
3/3
1
Stephen Beechey was appointed Committee Chair on
25 November 2021
2 Jon Pither retired on 21 October 2021
3 Karen McInerney was appointed as a Non-executive
Director on 1 January 2022
The main duties of the Remuneration Committee
are set out in the Committee’s terms of reference,
and these can be found at www.alumasc.co.uk
Additional attendees by request include the
Chief Executive, the Group Finance Director
and Company Secretary; they take no part in
discussions relating to their own remuneration.
“
Our incentives are aligned to
our business growth strategy
and protecting the interests of
our stakeholders. The incentive
outcomes for the year reflect
the performance of the business
during this challenging period.”
Stephen Beechey
Remuneration Committee Chair
64
The Alumasc Group plc Report and Accounts 2022
Statement from the Chair
of the Remuneration
Committee
Dear Shareholders
Having been appointed as Committee Chair on 25 November
2021 I am pleased to present my first Report of the Remuneration
Committee (the Committee) for the financial year ended
30 June 2022.
As an AIM listed entity, the Company is not required to apply
the full Listing Rules of the Financial Conduct Authority or the
requirements under SI 2008/410 schedule 8 and hence is not
required to present a report on remuneration.
However, the Board considers it appropriate for the Company
to provide shareholders with information in respect of executive
remuneration that follows the ‘spirit’ of the regulations given
previous disclosures before the Company re-listed on AIM.
This Remuneration Report sets out the remuneration paid to the
Directors during the period. The performance of The Alumasc
Group plc has seen growth and improvement during the year and
has managed to keep up momentum after the step-change in
performance in 2021. The focus of health, safety and wellbeing of
our workforce, our customers and our communities was a key driver
in the year.
Market share increased in the year and sales growth was strong
in the UK and exports accounted for 15% of sales. The business
performed well and improved UPBT (Underlying Profit Before Tax)
to £12.7m from continuing operations.
Pandemic
Remuneration continued to be considered against the backdrop
of Covid-19. The health safety and wellbeing of staff needed to be
maintained whilst offering a competitive service and developing
product ranges.
Where practical, staff worked from home, and those involved in
production worked in a Covid-19 secure environment with clear
processes and procedures in place to protect the workforce.
Performance and remuneration outcomes for the
year ended 30 June 2022
The financial and operating performance for the Group in 2022
is set out on pages 81 to 129.
2022 was a challenging year with the second half particularly
impacted following the approach to zero-Covid-19 in China and
the geo-political crisis following the invasion of Ukraine by Russia.
In addition, markets were volatile with continued supply chain
challenges, together with increasing raw material prices.
We discussed rewards in view of the impact of Covid-19, the
geo-political situation and inflation. The rewards for the workforce
were also considered.
Strategic report
Governance
Financial statements
Some of the senior executives had to carry out more than one role
and remuneration was discussed in this context. New challenges
of working during the pandemic led us to consider how we could
incentivise Directors and management to deliver during this
difficult time.
The Group achieved the following results for the year:
• Group revenues from continuing operations were £89.4m,
growth of 15%
• Underlying profit before tax from continuing operations of
£12.7m, up 27%
• Underlying earnings per share from continuing operations of
28.6p, also up 27%
• Significant work on the disposal of Levolux Ltd, which completed
on 26 August 2022
The 2021/22 annual bonus was based on Group Underlying PBT
targets. The business delivered total UPBT of £10.8m in 2022
and this resulted in bonuses from all operations, a reconciliation
of statutory profit before tax is provided in Note 5 to the Group
financial statements.
In October 2019, awards were granted under the LTIP to senior
executives based on EPS and TSR performance for the three-year
period ending October 2022. The total UPBT was £10.8m and this
resulted in 99.4% of the award vesting and the TSR measure will
be known when assessed in October 2022. If on target, 99.4% of
the 2019 LTIP will vest. Full details of the performance targets and
outcome is reported on page 71 and 72.
The Remuneration Committee believes the incentive outcomes
reflect the performance of the business during this challenging
period. The Remuneration Committee has not applied its discretion
during the year to any part of the Directors’ remuneration.
2022/23 Policy implementation
Salaries of the general workforce have been increased by 4.5%
with effect from 1 July 2022 and Directors’ base salaries have also
been increased by 4.5%.
The metrics selected for the 2022/23 annual bonus are 90% in
relation to underlying profit before tax (UPBT) and 10% for ESG
metrics specifically relating to reducing greenhouse gas emissions
and for reducing/eliminating lost days due to accidents. This is
consistent with Alumasc’s commitment to the health of our plant
and our people.
It has also been decided to base 25% of the bonuses of our
two Divisional Executive Directors on the delivery of Group-wide
UPBT targets as opposed to using solely divisional targets,
as previously. This is considered to achieve a better balance
between their responsibilities as Group Directors and as Divisional
Managing Directors.
An LTIP award will be granted in 2022 and this award will vest
after three years subject to UPBT and TSR performance metrics.
Details of the measures and targets are provided on page 71.
The Committee considers that the overall remuneration is fair,
balanced, and reasonable and takes into account the interests of
all stakeholders. It is also focused on our long-term growth strategy.
Key decisions
During the year there were three formal meetings and the following
topics were discussed:
•
review of base salaries of the Group Executive Directors;
• variable pay, in particular long-term incentive plan (LTIP) targets
for the current year;
• Gender Pay gap;
• consideration of a Group-wide salary increase;
•
•
the review of performance criteria for the current LTIP;
the Committee’s Terms of Reference were reviewed and updated;
• ESG metrics for bonus targets were considered and agreed;
• pension arrangements for the Chief Executive were discussed
and a way forward was agreed; and
•
the 2022/2023 bonus scheme and future operation of this to
encourage growth and to implement the stretch targets.
If you have any questions on this report or our approach to
remuneration more generally, please feel free to contact me via
the Company Secretary. I would be pleased if you would support
this report for its advisory vote at the forthcoming AGM.
Stephen Beechey
Remuneration Committee Chair
6 September 2022
The Alumasc Group plc Report and Accounts 2022
65
Governance
Directors’ Remuneration Report continued
Annual Report on Remuneration
The following sections show how the Remuneration Policy
approved in 2020 was applied in the year ending 30 June 2022.
Single total figure of remuneration
The remuneration of the Non-executive Directors for the years 2021/22 is as follows:
Director
Vijay Thakrar1
John McCall2
Jon Pither3
Stephen Beechey
Karen McInerney
Total
Base salaries/fees
Benefits in kind
of total Remuneration
2021/22
£’000
2020/21
£’000
2021/22
£’000
2020/21
£’000
2021/22
£’000
2020/21
£’000
Single figure
73
50
38
43
23
227
40
100
40
35
–
215
2
3
–
–
–
5
–
6
–
–
–
6
75
53
38
43
23
232
40
106
40
35
–
221
1 Upon appointment as Chair on 1 January 2022, Mr Vijay Thakrar was awarded salary/fees of £100,000 p.a., plus medical and car insurance cover.
2 John McCall retired on 31 December 2021.
3 Jon Pither retired on 21 October 2021.
Mrs Karen McInerney was appointed as a Non-executive Director and Chair of the Audit Committee on a fee of £45,000 p.a.
Mr Jon Pither retired from the Company as a Non-executive Director on 21 October 2021, and was paid for consultancy work until April 2022.
A pay increase of 4.5% was awarded to Executive and Non-executive Directors with effect from 1 July 2022, consistent with all staff across
the Group.
Information on Directors’ service contracts can be found on our website at www.alumasc.co.uk. The remuneration of the Executive
Directors for the years 2021/22 and 2020/21 was as follows:
Base salaries/fees1
Bonuses
Benefits in kind2
Pension
contributions
or payments in
lieu of pension
contributions
Long-term
incentives with
performance
period ending
during the year
Single figure of
total remuneration
Director
Paul Hooper
Gilbert Jackson
Michael Leaf
Simon Dray
Total
2021/22
£’000
2020/21
£’000
2021/22
£’000
2020/21
£’000
2021/22
£’000
2020/21
£’000
2021/22
£’000
2020/21
£’000
2021/22
£’000
2020/21
£’000
2021/22
£’000
2020/21
£’000
282
204
192
173
851
274
187
172
55
96
-
96
60
688
252
218
123
113
24
478
19
8
11
12
50
19
12
10
4
45
56
18
20
15
109
54
19
17
5
95
251
97
87
–
435
–
–
–
–
–
704
327
406
260
565
341
312
88
1,697
1,306
1
Salaries are recorded on an accounting basis of the amounts paid during the year. Payments for new Directors reflect the payments made since their appointment
date. A salary increase of 4.5% was awarded to Executive Directors with effect from 1 July 2022 and, as disclosed in last year’s report, the salaries of Mr Gilbert
Jackson and Mr Michael Leaf were increased by £15,000p.a. each from 1 September 2021 to reflect their increased responsibilities in joining the Group Board together
with a 2021 general pay increase in line with the workforce.
2 Benefits in kind includes car allowance, health benefits, life cover and a disability insurance policy.
Mr Paul Hooper is a director of Titon Holdings plc and he was appointed on 1 April 2022. Subject to Nomination Committee approval,
Executive Directors are permitted to accept external board or committee appointments provided they do not interfere with their
obligations to the Company.
66
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Benefits
The Group operates a policy whereby Executive Directors are provided with health insurance, disability insurance and life cover, and are
given a car or a cash alternative to a company car and associated expenses.
Annual bonus outcome for 2021/22
For the year to 30 June 2022 the level at which any annual bonus to Executive Directors would become payable is outlined in the table
below. The Executive Directors had a maximum bonus opportunity of 50% of their salaries.
Targets 2021/20221
£9m UPBT
£10.5m UPBT
£11.8m UPBT
£10.8m UPBT2
68% of maximum
Threshold
On Target
Maximum
Actual
Resulting bonus
1
Divisional targets for bonus payments were in place for Mr Gilbert Jackson and Mr Michael Leaf. The Building Envelope division did not meet its threshold target.
Housebuilding Products met its target required to have a bonus payout.
2 From all operations, a reconciliation of underlying statutory profit before tax is provided in Note 5 to the Group financial statements.
The performance of the Group has resulted in the following payouts:
• Paul Hooper – 34% of salary
• Gilbert Jackson – 0% of salary
• Michael Leaf – 50% of salary
• Simon Dray – 34% of salary
2019 LTIP outturn
Awards were made to Paul Hooper under the LTIP on 17 October 2019. These were subject to EPS and TSR performance criteria. The
minimum EPS target required growth of above RPI +2.5% per annum using a base UPBT figure. This target was met (subject to TSR
confirmation), and awards are expected to vest at 99.4% of the award as per the table on page 71.
In lieu of an LTIP Gilbert Jackson and Michael Leaf were awarded a cash-equivalent divisional based award in 2019. The divisional target
was not met for Gilbert Jackson and there would be no payment. Michael Leaf met his divisional target and will be awarded £42,000 as
a result.
The Committee exercised no discretion in determining the vesting and considered that the formulaic outcome reflected the underlying
performance of the Group.
During the year, 2018 LTIPs were exercised and the information is included in the table on page 70.
Pensions
The Group makes provision to pay into a defined contribution pension scheme of each Executive’s choosing or a cash alternative (after
deduction for employer’s national insurance contributions).
Pension contributions are as follows:
Director
Paul Hooper1
Gilbert Jackson
Michael Leaf
Simon Dray
Pension contribution (% of base salary)
20%1
10%
10%
10%
1
It has been agreed with Paul Hooper that his pension contribution will be adjusted to align with the workforce rate of 10% for pensions with effect from 1 January 2023.
The Alumasc Group plc Report and Accounts 2022
67
Governance
Directors’ Remuneration Report continued
Payments in compensation to past Directors for loss of office
As set out in last year’s report, Mr Andrew Magson resigned as a Director and left the business on 30 September 2020. As a good leaver,
he continued to have an interest in unvested LTIP awards, and approximately 22,175 LTIPs are due to vest subject to TSR confirmation on
18 October 2022, and the award will depend on the TSR outturn.
Scheme interests awarded during the year
LTIP awards were granted on 19 October 2021 as detailed in the table below.
Scheme
Basis of award granted
Paul Hooper
2021 LTIP
Simon Dray
2021 LTIP
Gilbert Jackson
2021 LTIP
Michael Leaf
2021 LTIP
75% of base salary
at a price of 240p
40% of base salary
at a price of 240p
40% of base salary
at a price of 240p
40% of base salary
at a price of 240p
1 Based on share price of 240p on the day of grant.
No. of
shares
awarded
90,823
Face value
of award1
£217,975
37,538
£90,091
44,503
£106,807
41,156
£98,774
% vesting for
threshold
performance
Vesting and
performance period
25%
25%
25%
25%
3 years
3 years
3 years
3 years
These awards will vest on 15 October 2024 and are subject to two measures and an underpin. The underpin requires UPBT of at least
£9.0 million to be delivered (in the year ending 30 June 2024) below which no award would vest. However, if this is achieved, 65% out of the
75% of salary award granted to the Chief Executive and for the Group Finance Director is based on EPS growth targets (threshold of RPI+
2.5% p.a. growth and maximum of RPI + 10% p.a.) and the remaining 10% is based on relative Total Shareholder Return (TSR) performance
against the constituents of the FTSE All Share Index. For the Executive Directors, they were given the same underpin with divisional targets.
Statement of Directors’ shareholdings and share interests
Directors’ shareholdings
At the date of this report
At 30 June 2021
Vijay Thakrar
John McCall1
Jon Pither2
Paul Hooper
Simon Dray
Gilbert Jackson
Michael Leaf3
Stephen Beechey
Karen McInerney
1 John McCall retired on 31 December 2021.
2 Jon Pither retired on 21 October 2021.
3 Michael Leaf holds shares in part via his PCA.
50,000
N/a
N/a
891,286
20,000
22,950
50,621
27,418
Nil
36,496
4,359,668
432,586
769,956
Nil
Nil
16,375
27,418
Nil
The Directors’ shareholdings are beneficial with the exception of 434,000 shares in which Mr McCall had a non-beneficial holding.
Directors are encouraged to hold shares in the Company.
At the year end, the Employee Benefit Trust, established to hold shares in relation to the ESOS and the LTIP, held 327,493 ordinary shares.
The market value of the shares held in trust as at 30 June 2022 was £519,076.
68
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Performance graph
The graph shows the total shareholder return (TSR) on an equivalent holding in the Company compared with the FTSE All Share Index.
450p
400p
350p
300p
250p
200p
150p
100p
50p
0p
i
)
s
d
n
e
d
v
D
s
s
o
r
G
i
(
x
e
d
n
I
n
r
u
t
e
R
l
a
t
o
T
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Jul-17
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Alumasc
FTSE All Share
Long Term Incentive Plans
The table below reconciles movements in LTIP awards during the year.
of which
Market
price at
award
date*
Earliest
exercise
date
Date
of award
Paul Hooper
Oct 2018
130.5p Oct 2021
Oct 2019
Oct 2020
83.5p Oct 2022
79.0p Oct 2023
Interest
as at
1 July
2021
149,081
149,081
156,529
Oct 2021
240.0p Oct 2024
–
vested
in year
exercised
in year
111,810
(111,810)
–
–
–
–
–
–
Total
454,691
111,810
(111,810)
Gilbert Jackson Oct 2018
130.5p Oct 2021
Oct 2020
79.0p Oct 2023
Oct 2021
240.0p Oct 2024
Total
Michael Leaf
Oct 2018
130.5p Oct 2021
Oct 20201
79.0p Oct 2023
Oct 2021
240.0p Oct 2024
Total
Simon Dray
Oct 2021
240.0p Oct 2024
Total
43,303
56,923
–
43,303
(43,303)
–
–
–
–
100,226
43,303
(43,303)
38,798
52,308
–
38,798
(38,798)
–
–
–
–
91,106
38,798
(38,798)
nil
nil
–
–
–
–
were
granted in
year
–
–
-
90,823
90,823
–
–
44,503
44,503
–
–
41,156
41,156
37,538
37,538
Interest
as at
30 June
2022
–
149,081
156,529
90,823
lapsed
in year
(37,271)
–
–
–
(37,271)
396,433
–
–
–
–
–
–
–
–
–
–
56,923
44,503
101,426
–
52,308
41,156
93,464
37,538
37,538
*
The market price at the award date is based on the price on the day the Employee Trust or the Company granted the award. This price can differ from the market
value at the date the Remuneration Committee recommended the award to the Trust or Company.
1 This award was based on a notional share price of 130p.
The Alumasc Group plc Report and Accounts 2022
69
Governance
Directors’ Remuneration Report continued
2019 Long Term Incentive Plans vesting after the year end
Director
Paul Hooper
Date of vesting1
18 October 2022
Percentage of
award vesting
Number of shares
expected to vest in
October 20222
99.4%
148,186
1 The outturn of the 2019 LTIP has been provided in the table above. The vesting outturn for the CEO is subject to confirmation of TSR. It reflects the percentage vesting.
2 Based on a 99.4% vest.
Non-executive Directors
The policy of the Board is that the remuneration of the Non-executive Directors should be consistent with the levels of remuneration paid
by companies of a similar size and complexity. Non-executive Directors receive an annual fee and are reimbursed expenses incurred in
performing their duties. They do not receive any performance related remuneration or pension contributions.
The Chair and Non-executive Directors have letters of appointment and details of their terms can be seen in the Appendix to Schedule 1
published on our website.
Chief Executive remuneration
The following table sets out the total remuneration and the amount vesting under short-term and long-term incentives (as a percentage
of the maximum that could have been achieved) in each of the past five years for the Chief Executive.
Chief Executive single
figure of total remuneration
Annual bonus pay-out against
maximum opportunity
Long-term incentive vesting
against maximum opportunity
Year
2021/22
2020/21
2019/20
2018/19
2017/18
2016/17
2015/16
2014/15
2013/14
2012/13
£000
704
565
352
343
332
510
493
633
323
355
%
68%
100%
3.7%1
3.8%
0%
22%
20%
71%
13%
63%
%
99.4%2
75%
0%
0%
0%
72%3
50%
50%
0%
0%
1 This represents a bonus relating to 2019 in respect of the sales of the Facades business.
2 This is based on an assumption TSR will be achieved in October 2022.
3 Adjusted to reflect actual figures following the vesting of the 2015 LTIP award in March 2018.
Percentage change in Chief Executive’s remuneration
The table below shows the percentage change in remuneration (excluding LTIPs) between the years ended 30 June 2021 and 30 June 2022
for the Chief Executive and all Group employees. All employees in general received 4.5% on 1 July 2022.
Salary
Benefits
Bonus
Total
1 This reflects the fact that there were 391 employees at 30 June 2021 and 404 at 30 June 2022.
Relative importance of spend on pay
2020/21
2021/22
Percentage increase
70
The Alumasc Group plc Report and Accounts 2022
CEO
3%
0%
(56%)
(22%)
Total employee pay
£’000
17,405
18,429
5.9%
Employees1
2.5%
2.7%
(9.9)%
0.5%
Dividends
£’000
1,878
3,434
82.9%
Strategic report
Governance
Financial statements
Relative importance of spend on pay
20,000
15,000
0
0
0
£
’
10,000
5,000
0
17,405
18,429
Total employee pay
Dividends
1,878
3,424
2020/21
2021/22
Implementation of the Directors’ Remuneration Policy for the Financial Year 2022/23
The information below sets out how the Company intends to implement the Directors’ Remuneration Policy for the year in 2022/23.
Base salary
The salaries of the Executive Directors have been reviewed and increased in line with the workforce from 1 July 2022 at the rate of 4.5%.
The provision of benefits will remain unchanged.
Non-executive Directors
The Board’s policy is that the remuneration of the Non-executive Directors should be consistent with the levels of remuneration paid by
companies of a similar size and complexity. Non-executive Directors receive an annual fee and are reimbursed for expenses incurred in
performing their duties. Fees for Non-executive Directors were increased by 4.5% with effect from 1 July 2022, in line with the Executive
Directors and the workforce.
2022/23 Bonus
Targets for the annual 2022/23 bonus for the Executive Directors will be determined by performance against a sliding scale of demanding
Underlying Profit Before Tax targets set at the beginning of the financial year and ESG targets related to GHG emissions and Health &
Safety/accident improvements.
We have introduced stretch targets to drive ambitious organic growth. Currently, the maximum bonus potential for Executive Directors is
set at 50% of their salaries. The proposal is to award 30% of salaries for delivery of budgeted underlying profit before tax (UPBT) rising
to 50% for delivery of UPBT targets above budget and up to 100% maximum for achieving stretch UPBT targets. Similar increases in
ambitious stretch targets and potential bonus rewards will also be implemented for the wider senior management team, which will help to
align the interest of shareholders, the Executive Directors and the wider senior management team who are responsible for the day-to-day
operations of Alumasc.
The targets themselves are commercially sensitive and will be disclosed in next year’s annual report when reporting on the actual
bonus outcomes.
Long-term Incentive Plan
It is intended that the awards under the 2022 LTIP will be made to the Executive Directors in October 2022.
For any of the 2022 LTIP awards to vest, a UPBT underpin will need to be met. That UPBT underpin will be a base of £10.5m plus RPI + 2.5%
p.a. in the 3 years to 30 June 2025.
Subject to achieving the UPBT growth underpin, the awards will vest depending on growth in UPBT and TSR.
The Alumasc Group plc Report and Accounts 2022
71
Governance
Directors’ Remuneration Report continued
Underlying PBT
65% out of the 75% of salary award for the Chief Executive and 30% out of the 40% of salary awards for the other Executive Directors will
be dependent on UPBT growth.
Awards will vest depending on growth achieved using a notional base UPBT figure of £10.5 million. Performance is based on the third year
of the performance period, being the financial year ending 30 June 2025.
Awards will vest according to the following targets:
UPBT growth (from a base of £10.5 million)
Proportion of the award that vests
Less than RPI + 2.5% p.a.
0.0%
Between RPI + 2.5% p.a. and RPI + 10% p.a.
25% to 100% on a straight-line basis
RPI + 10% p.a. or higher
100%
Total shareholder return
10% out of the 75% of salary award for the Chief Executive and 10% out of the 40% for the other Executive Directors is subject to a
relative TSR measure.
If the Company’s TSR is below the FTSE All Share index, no part of this award will vest. If performance is at median/index, then 25% will
vest. For performance at upper quartile or higher, this part of the award will vest in full. For performance between median/index and upper
quartile, vesting will be on a straight-line basis.
Statement of voting – 2021 AGM
At the 2021 AGM the Directors’ Remuneration Report received the following vote from shareholders:
For
Against
Total votes cast (for and against)
Voted withheld*
Total votes cast (including withheld votes)
Total number
of votes cast
% of votes cast
16,383,262
20,011
16,403,273
4,245
16,407,527
99.85%
0.12%
99.97%
0.03%
100%
* A vote withheld is not a vote in law and is not counted in the calculation of the proportion of votes cast “For” or “Against” a resolution.
This Report was approved by the Board of Directors on 6 September 2022 and signed on its behalf by the Remuneration Committee Chair.
Stephen Beechey
Chair of the Remuneration Committee
6 September 2022
72
The Alumasc Group plc Report and Accounts 2022
Directors’ Report
Strategic report
Governance
Financial statements
The Directors present their Annual Report and the consolidated financial statements for The Alumasc Group plc for the financial year
ended 30 June 2022. The report also includes the Corporate Governance Report on pages 54 to 58 for the purposes of s 463 of the
Companies Act 2006 (CA2006).
Strategic report
The Companies Act 2006 (CA 2006) requires this Annual Report to present a fair, balanced and understandable view of Alumasc’s business
during the year ended 30 June 2022 and of the position of the Group at the end of the financial period, together with a description of the
principal risks and uncertainties facing the business. The Company has taken advantage of section 414C (11) of the CA 2006 to include
disclosures in the Strategic report on these items and the further items listed in the ‘Other information’ section on pages 130 to 131. The
Strategic report can be found on pages 2 to 50. Our principal risks and uncertainties are set out on pages 46 to 50 and include each risk
and details on how we manage or mitigate these risks. The Directors carried out an assessment of how we manage these risks, including
those that could threaten our business model, future performance, or liquidity.
Corporate governance statement
Certain information needs to be included in a corporate governance statement in the Directors’ Report. Information that fulfils these
requirements can be found in the Corporate Governance Statement on pages 55 to 58 and is incorporated into the Directors’ Report
by reference.
Management report
For the purposes of compliance with Accounts regulations Schedule 7 paragraph 1A, the required content of the management report
can be found in the Strategic report and this Directors’ Report, including the sections of the Annual Report incorporated by reference.
Directors
The Directors who served during the financial year and up to the date of approval of these financial statements, unless otherwise
stated, were:
John McCall (retired 31 December 2021)
Jon Pither (retired 21 October 2021)
Vijay Thakrar (appointed Chair 1 January 2022)
Paul Hooper
Stephen Beechey
Karen McInerney (appointed 1 January 2022)
Simon Dray
Gilbert Jackson
Michael Leaf
The biographies of the Directors can be found on pages 52 to 53. Details of the Directors’ service agreements can be found on our website
at www.alumasc.co.uk. Information about Directors’ interests in the Company’s shares are shown on page 68. In accordance with the
Articles of Association, standing for election at the AGM will be Karen McInerney as she was appointed during the year and Mr Vijay
Thakrar, Mr Paul Hooper, and Mr Stephen Beechey will be standing for re-election in accordance with the Articles of Association that
requires Directors to be reappointed on their third AGM at which they were appointed or re‐appointed.
Directors’ & Officers’ Insurance
The Company maintains a Directors’ & Officers’ Insurance Policy for the Directors, the Company Secretary, officers, and those in a position
of management supervision of Alumasc and its subsidiaries. This insurance is to protect against legal actions brought against Directors &
Officers in a personal capacity.
Dividend
The Directors are recommending a final dividend of 6.65 pence per ordinary share (2020/21: 6.25 pence) which will, if approved at the
AGM, will be paid on 4 November 2022 to shareholders on the register at the close of business on 30 September 2022, being a total of
10 pence for the year. The interim dividend of 3.35 pence was paid on 6 April 2022.
The Company operates a dividend re‐investment plan, details are available from Equiniti Registrars.
The right to receive any dividend has been waived by the Trustees of the Company’s Employee Benefit Trust over any shares that the
Trustees may hold from time to time. Details of the Employee Trust’s current holding can be found in the Directors’ Remuneration Report
on page 68.
The Alumasc Group plc Report and Accounts 2022
73
Governance
Directors’ Report continued
Companies Act s.172
The Directors are mindful of the requirements of s.172 of the Companies Act 2006 and take these into account when fulfilling their duties
to promote the long-term success of the Group.
Information about how the Company considers its obligations under s.172 of the Companies Act 2006 are discussed in the Strategic report
(on pages 42 to 45).
Covid-19
Alumasc has closely monitored Covid-19 and the impact on our operations, although this has declined in 2022. Our main focus has been
on the safety and wellbeing of our employees, customers, suppliers and other stakeholders. All our factories are fully operational and
where presence at site is not required staff have been hybrid working or working from home.
Employees
The Group is an equal opportunities employer and its policies for recruitment, training, career development and promotion are based
on the aptitude and abilities of the individual regardless of religion, gender, sexual orientation, and educational and/or professional
backgrounds. An analysis of our employees by gender at 30 June 2022 can be found on page 39. Information about Employees can
be found on pages 34 to 39.
In the Corporate Governance Report and Strategic report section, there are disclosures on how the Company provides information
to employees, how the views of employees are taken into account in decision-making and how strategic information is shared
(see pages 42, 55 and 58).
Global Greenhouse Gas emissions
Information about the Group’s Greenhouse Gas emissions is given in our ESG (Environmental, Social and Governance) Report on
pages 25 to 39.
Political donations
No political donations were made during the year by the Company and its subsidiaries (2020/2021: nil).
Research and development
The Group continues to devote effort and resources to the research and development of new products and solutions. Research and
development expenditure during the year totalled £0.2 million (2020/2021: £0.2 million).
Disclosure of information to the auditor
As far as the Directors are aware, there is no relevant audit information of which the Company’s auditor is unaware; each Director has
taken all reasonable steps that he ought to have taken as a Director to make himself aware of any relevant audit information and to
establish that the Company’s auditor is aware of that information.
Other information
Other information relevant to the Directors’ Report can be found in the following sections of the Annual Report:
Information
Articles of Association
Directors’ interests
Long-term incentive plans
Financial risk management
Page/s
Location in Annual Report
130
68
Additional information for shareholders
Directors’ Remuneration Report
69-72
Directors’ Remuneration Report
Note 12 and the significant accounting policies sections,
Financial Statements
Future developments
2, 7, 9, 21
Strategic report1
Health & Safety and employee related policies
10, 38 & 39
Strategic report: Environmental Social & Governance
Report1
Major shareholdings
Movements in share capital
Purchase of own shares
131
Additional information for shareholders
110 & 111
Notes 16 and 17, Financial statements
130
Additional information for shareholders
Share capital – structure, voting, restrictions and other rights
130, 131
Additional information for shareholders and in Note 15 to
the Financial statements
1 The Board has taken advantage of section 414C(11) of the Companies Act 2006 to include disclosures in the Strategic report on these items.
74
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Fair, Balanced and Understandable
The Board has concluded that the 2022 Annual Report is fair, balanced and understandable and provides the necessary information for
shareholders and other readers of the Report and Accounts to assess the Group’s position and performance, business model and strategy.
Auditor
A resolution to appoint Crowe UK LLP as auditor will be proposed at the forthcoming Annual General Meeting.
Annual General Meeting (AGM)
The notice convening the AGM, to be held on 27 October 2022 at 10.00am at Timloc Building Products, Timloc House, Ozone Park,
Howden, East Riding of Yorkshire DN14 7SD is included within this document on pages 135 to 140 together with an explanation of the
business to be conducted at the meeting. The Notice of the AGM contains the information about the arrangements for the meeting.
The Directors believe that the proposals set out for approval at the AGM will promote the success of the Company. Accordingly, they
recommend unanimously that members vote in favour of each resolution. Members who are in any doubt as to what action to take are
advised to consult appropriate independent advisers.
The Directors’ Report was approved by the Board on 6 September 2022.
On behalf of the Board
Helen Ashton
Group Company Secretary
6 September 2022
The Alumasc Group plc Report and Accounts 2022
75
Governance
Statement of Directors’ Responsibility
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and
regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have
elected to prepare the Group financial statements in accordance with UK adopted international accounting standards and the Company
financial statements in accordance with UK Adopted International Accounting Standards and applicable law. Under company law the
Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs
of the Group and the company and of the profit or loss of the Group for that year. The Directors are also required to prepare financial
statements in accordance with the rules of the London Stock Exchange for companies trading securities on A.I.M.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with UK Adopted International Accounting Standards, subject to any material
departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions
and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial
statements comply with the requirements of the Companies Act 2006. They are also responsible for safe-guarding the assets of the
Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that:
• so far as each of the Directors is aware, there is no relevant audit information of which the Company’s auditors are unaware; and
•
the Directors have taken all steps that they ought to have taken as Directors to make themselves aware of any relevant audit
information and to establish that the auditors are aware of that information.
The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website. Financial
statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the
company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial
statements contained therein.
On behalf of the Board
Paul Hooper
Chief Executive
6 September 2022
76
The Alumasc Group plc Report and Accounts 2022
Independent Auditor’s Report
to the Members of The Alumasc Group plc
Strategic report
Governance
Financial statements
Opinion
We have audited the financial statements of The Alumasc Group plc (the “Parent Company”) and its subsidiaries (the “Group”) for the year
ended 30 June 2022, which comprise:
•
•
•
•
•
the consolidated statement of comprehensive income for the year ended 30 June 2022;
the Group and Parent Company statements of financial position as at 30 June 2022;
the Group and Parent Company statements of cash flows for the year then ended;
the Group and Parent Company statements of changes in equity for the year then ended; and
the notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and
UK-adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the
parent company financial statements is to UK adopted international accounting standards.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 30 June 2022
and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
the Parent Company financial statements have been properly prepared in accordance with UK adopted international accounting
standards; and
•
the financial statements have been properly prepared in accordance with the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.
We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements
in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the preparation
of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Groups and Parent Company’s ability to
continue to adopt the going concern basis of accounting included:
• obtaining managements forecasts covering the period 1 July 2022 to 30 September 2023. We have assessed how these forecasts
have been prepared, including the appropriateness of management’s forecasts and sensitivities to the underlying assumptions, as
well as verifying the numerical inputs and accuracy of calculations;
• Challenge the key assumptions used in the forecasts, including the increase in sales material prices and the access to funding for
the period under review;
• Challenged management on the stress test scenarios to understand the impact on revenue, funding requirements and profitability; and
• Reviewing the disclosures made in the financial statements relating to going concern and agreeing it is consistent with
management’s assessment.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the Group or Parent Company’s ability to continue as a going concern for a period of at least
twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The Alumasc Group plc Report and Accounts 2022
77
Financial statements
Independent Auditor’s Report continued
to the Members of The Alumasc Group plc
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be
expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our
testing and to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined overall materiality for the Group financial statements as a whole to be £500,000,
based at planning on approximately 5% of profit before tax including the trading results of the discontinued operation. The Parent
Company materiality was determined as £350,000 based on a percentage of net assets, subject to a cap to restrict the amount to no
more than Group performance materiality.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and
our evaluation of the specific risk of each audit area having regard to the internal control environment and is approximately £350,000.
The Parent Company performance materiality is approximately £250,000.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and
directors’ remuneration.
We agreed with the Audit Committee to report to it all identified errors in excess of £25,000. Errors below that threshold would also be
reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.
Overview of the scope of our audit
The Group and its subsidiaries are accounted for at one location, being the Parent Company’s registered office. We performed full scope
audits of the complete financial information of The Alumasc Group plc and the five components, Alumasc Building Products Limited,
Levolux Limited, Benjamin Priest Limited, Alumasc Precision Limited and Alumasc Limited. The work was performed directly by the Group
audit team. The operations that were subject to full-scope audit made up 100% of the consolidated revenues, total profit before tax on
continuing operations and total assets and liabilities. The Groups other subsidiary, Elkington China Limited, was subject to a desktop
review as it is not individually financially significant enough to require a full scope audit for Group purposes.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we
identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Key audit matter
How the scope of our audit addressed the key audit matter
Valuation of defined benefit pension scheme net liabilities
(Note 22)
The Group operates a defined benefit pension scheme that
provides benefits to a number of current and former employees.
At 30 June 2022, the defined benefit pension schemes’ net
liabilities were £2.1 million. The gross value of pension scheme
assets amounted to £87.2 million, with gross liabilities £89.3 million.
The valuation of the defined benefit pension scheme net liabilities
in accordance with IAS 19 ‘Employee Benefits’ involves significant
judgement and is subject to complex actuarial assumptions. Small
variations in those actuarial assumptions can lead to a materially
different defined benefit pension scheme asset or liability being
recognised within the Group financial statements. Therefore, we
identified the valuation of the defined benefit pension scheme as
a significant risk, which was one of the most significant assessed
risks of material misstatement.
Our audit procedures included:
• Documenting our understanding of management’s processes for
evaluating the defined benefit scheme and assessing the design
effectiveness of related key controls;
• Evaluating the independence and competence of management’s
actuary;
• Benchmarking the key assumptions used by management in the
Group’s valuation using an independent auditor expert actuary,
comparing the data used to external market data;
• Corroborating the valuation and existence of pension scheme
assets to third party statements;
• Assessing disclosures made in the financial statements to
determine compliance with IAS 19;
78
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Key audit matter
How the scope of our audit addressed the key audit matter
Recognition of revenue and attributable profit (or losses)
on contracts (Note 2 and 3)
Revenue is recognised on the stage of completion of individual
contracts. The stage of completion is calculated by assessing
the contract costs incurred to date as a proportion of the total
forecast costs of the contract, including contingencies where
appropriate. If the contract is early stage, revenue and costs
are matched until the contract is sufficiently progressed to
reliably forecast the outcome.
The extent of revenue and profit (or loss) to recognise on a partially
completed contract represents an area of significant judgement
within the financial statements, which involves an assessment
of both current and future contract performance.
The potential outcomes for contracts can have an individual
or collectively material impact on the financial statements,
whether through error or management bias and as such this
was considered a significant audit risk.
Our audit procedures included:
• Documenting our understanding and evaluated management’s
processes for evaluating the costs incurred on a contract to date
and stage of completion of contract;
• Obtained a breakdown of contracts consisting of the revenue
and costs in the year;
• Selected a sample of both contracts completed and contracts
open at the year-end date based on criteria including contract
value and loss making contracts;
• Obtained copies of contracts to corroborate the total transaction
price and the terms of the contract;
• Tested a sample of invoices raised during the year through to
cash collected;
• Challenged management over the recognition of income and
whether performance obligations had been met in line with
requirements of IFRS 15;
• Tested a sample of costs to third party documentation and
ensured the costs had been allocated to the correct contract;
• Meetings with contract managers on the performance of each
contract sampled and discussions on final account negotiations,
margin and costs to complete;
• We assessed management’s ability to accurately forecast by
reviewing a sample of open contracts from the prior period and
agreeing to final completed costs and performance of contract.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They were not designed
to enable us to express an opinion on these matters individually and we express no such opinion.
Other information
The directors are responsible for the other information contained within the annual report. The other information comprises the
information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our audit
•
the information given in the strategic report and the directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
•
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the
audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received
from branches not visited by us; or
•
the Parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
The Alumasc Group plc Report and Accounts 2022
79
Financial statements
Independent Auditor’s Report continued
to the Members of The Alumasc Group plc
Responsibilities of the directors for the financial statements
As explained more fully in the directors’ responsibilities statement set out on page 76, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and Parent Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the legal and regulatory frameworks within which the Group operates, focusing on those laws and
regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and
regulations we considered in this context were relevant company law and taxation legislation in the UK being the principal jurisdiction in
which the Group operates.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of
controls by management. Our audit procedures to respond to these risks included enquiries of management about their own identification
and assessment of the risks of irregularities, sample testing on the posting of journals and reviewing accounting estimates for biases in
particular where significant judgements are involved (see Key Audit Matters above).
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements
may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from fraud because fraud may
involve sophisticated and carefully organised schemes designed to conceal it, including deliberate failure to record transactions, collusion
or intentional misrepresentations being made to us.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Mark Evans (Senior Statutory Auditor)
for and on behalf of
Crowe U.K. LLP
Statutory Auditor
Black Country House
Rounds Green Road
Oldbury
B69 2DG
6 September 2022
80
The Alumasc Group plc Report and Accounts 2022
–
–
–
–
(150)
(128)
(278)
(278)
(268)
(546)
(165)
(711)
77,805
(48,364)
29,441
(18,935)
(150)
(128)
(19,213)
10,228
(757)
9,471
(2,118)
7,353
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2022
Strategic report
Governance
Financial statements
Year ended 30 June 2022
Year ended
30 June 2021 (restated)*
Underlying
£’000
Notes
Non-
underlying
£’000
Total
£’000
Underlying
£’000
Non-
underlying
£’000
Total
£’000
Continuing operations:
Revenue
Cost of sales
Gross profit
Net operating expenses
3, 4
89,381
(56,015)
33,366
Net operating expenses before non-underlying items
(20,033)
IAS 19 past service pension cost
Other non-underlying items
5
5
–
–
89,381
77,805
(56,015)
(48,364)
33,366
29,441
(20,033)
(18,935)
–
–
–
–
–
–
(634)
(634)
–
–
Net operating expenses
(20,033)
(634)
(20,667)
(18,935)
Operating profit
Net finance costs
Profit before taxation
Tax expense
4, 5
13,333
(634)
12,699
10,506
9
5
(608)
(60)
(668)
(489)
12,725
(694)
12,031
10,017
10, 12
(2,469)
48
(2,421)
(1,953)
8,064
Profit for the year from continuing operations
10,256
(646)
9,610
Discontinued operations:
(Loss)/profit after taxation for the period from
discontinued operations
Profit/(loss) for the year
Other comprehensive income:
Items that will not be reclassified to profit or loss:
6
(1,577)
(15,080)
(16,657)
401
8,679
(15,726)
(7,047)
8,465
(168)
(879)
233
7,586
Actuarial (loss)/gain on defined benefit pensions, net of tax
(25)
10,393
Items that are or may be reclassified
subsequently to profit or loss:
Effective portion of changes in fair value of cash
flow hedges, net of tax
Exchange differences on retranslation of foreign operations
Other comprehensive gain for the year, net of tax
Total comprehensive (loss)/profit for the year, net of tax
Earnings per share
Basic earnings per share
– Continuing operations
– Discontinued operations
Diluted earnings per share
– Continuing operations
– Discontinued operations
12
12
480
161
641
616
(6,431)
Pence
26.8
(46.5)
(19.7)
26.4
(46.5)
(20.1)
(385)
(46)
(431)
9,962
17,548
Pence
20.6
0.6
21.2
20.2
0.6
20.8
*
The results for the year to 30 June 2021 have been re-presented to show the Levolux business as a discontinued operation. See note 6 for details.
Reconciliations of underlying to statutory profit and earnings per share are provided in notes 5 and 12 respectively.
The Alumasc Group plc Report and Accounts 2022
81
Financial statements
Consolidated Statement of Financial Position
At 30 June 2022
Notes
2022
£’000
2022
£’000
2021
£’000
2021
£’000
Assets
Non-current assets
Property, plant and equipment – owned assets
Property, plant and equipment – right-of-use assets
Goodwill
Other intangible assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Derivative financial assets
Cash at bank
Total assets
Liabilities
Non-current liabilities
13
13
14
15
10
16
17
21
27
12,573
4,926
8,526
2,126
529
13,394
18,786
325
8,284
Interest bearing loans and borrowings
19, 27
(13,000)
Lease liability
Employee benefits payable
Provisions
Deferred tax liabilities
Current liabilities
Trade and other payables
Lease liability
Provisions
Corporation tax payable
Derivative financial liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Capital reserve – own shares
Hedging reserve
Foreign currency reserve
Profit and loss account reserve
Total equity
20
22
23
10
18
20
23
21
24
25
25
25
25
(4,251)
(2,114)
(1,061)
(1,730)
(19,031)
(881)
(1,360)
(309)
–
4,517
445
(601)
263
216
20,892
11,734
5,469
18,705
3,321
1,145
28,680
40,374
40,789
69,469
37,259
77,633
10,871
21,389
–
4,999
(5,936)
(4,811)
(4,581)
(1,267)
(966)
(22,156)
(17,561)
(21,581)
(43,737)
25,732
(23,927)
(41,488)
36,145
(21,011)
(795)
(834)
(1,019)
(268)
4,517
445
(406)
(217)
55
31,751
25,732
36,145
The financial statements were approved by the Board of Directors and authorised for issue on 6 September 2022.
Paul Hooper
Director
6 September 2022
Company number 1767387
Simon Dray
Director
82
The Alumasc Group plc Report and Accounts 2022
Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Strategic report
Governance
Financial statements
Operating activities
Operating profit from continuing operations
Adjustments for:
Depreciation
Amortisation
Gain on disposal of property, plant and equipment
IAS 19 past service pension cost
Increase in inventories
Increase in receivables
Increase in trade and other payables
Movement in provisions
Cash contributions to retirement benefit schemes
Share based payments
Cash generated by operating activities of continuing operations
Operating profit from discontinued operations
Depreciation/amortisation
Movement in working capital from discontinued operations
Cash utilised by operating activities of discontinued operations
Tax paid
Net cash inflow from operating activities
Investing activities
Purchase of property, plant and equipment
Payments to acquire intangible fixed assets
Proceeds from sales of property, plant and equipment
Net cash outflow from investing activities
Financing activities
Bank interest paid
Equity dividends paid
Draw down/(repayment) of amounts borrowed
Principal paid on lease liabilities
Interest paid on lease liabilities
Purchase of own shares
Refinancing costs
Net cash inflow/(outflow) from financing activities
Net increase/(decrease) in cash at bank and bank overdraft
Net cash at bank and bank overdraft brought forward
Net increase/(decrease) in cash at bank and bank overdraft
Effect of foreign exchange rate changes
Net cash at bank and bank overdraft carried forward
Year ended
30 June
2022
£’000
Year ended
30 June
2021
£’000
Notes
12,699
10,228
2,459
2,098
257
(18)
–
(2,573)
(2,536)
279
(298)
(2,561)
118
7,826
(2,125)
224
(438)
(2,339)
(1,615)
3,872
(2,449)
(123)
22
(2,550)
(356)
(3,434)
7,000
(713)
(169)
(526)
–
1,802
3,124
4,999
3,124
161
8,284
193
(16)
150
(2,546)
(4,570)
6,557
(310)
(2,614)
397
9,567
330
216
(1,513)
(967)
(161)
8,439
(1,666)
(330)
46
(1,950)
(207)
(1,878)
(14,000)
(692)
(178)
–
(65)
(17,020)
(10,531)
15,576
(10,531)
(46)
4,999
7, 13
7, 15
5
22
26
6
11
27
27
27
The Alumasc Group plc Report and Accounts 2022
83
Financial statements
Consolidated Statement Of Changes In Equity
For the year ended 30 June 2022
Share
capital
£’000
Share
premium
£’000
Notes
Capital
reserve
– own
shares
£’000
Hedging
reserve
£’000
Foreign
currency
reserve
£’000
4,517
445
(416)
168
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
10
–
–
–
–
–
(475)
90
–
–
–
–
–
–
4,517
445
(406)
(217)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(597)
402
–
–
–
–
–
593
(113)
–
–
–
–
–
–
–
11
11
101
–
(46)
–
–
–
–
–
–
–
–
55
–
161
–
–
–
–
–
–
–
–
–
Profit
and loss
account
reserve
£’000
15,026
7,586
–
–
–
Total
equity
£’000
19,841
7,586
(46)
(475)
90
10,393
10,393
237
–
397
237
10
397
(1,878)
(1,878)
(10)
(10)
31,751
36,145
(7,047)
(7,047)
–
–
–
(25)
(140)
–
–
118
161
593
(113)
(25)
(140)
(597)
402
118
(3,434)
(3,434)
(331)
(331)
At 1 July 2020
Profit for the period
Exchange differences on
retranslation of foreign operations
Net loss on cash flow hedges
Tax on derivative financial liability
Actuarial gain on defined benefit
pensions, net of tax
Tax on share options
Own shares used to satisfy exercise
of share awards
Share based payments
Dividends
Exercise of share based incentives
At 1 July 2021
Loss for the period
Exchange differences on
retranslation of foreign operations
Net gain on cash flow hedges
Tax on derivative financial asset
Actuarial loss on defined benefit
pensions, net of tax
Tax on share options
Acquisition of own shares
Own shares used to satisfy exercise
of share awards
Share based payments
Dividends
Exercise of share based incentives
At 30 June 2022
4,517
445
(601)
263
216
20,892
25,732
84
The Alumasc Group plc Report and Accounts 2022
Notes to the Financial Statements
For the year ended 30 June 2022
Strategic report
Governance
Financial statements
1 Basis of preparation
The Alumasc Group plc is incorporated and domiciled in England and Wales. The Company’s ordinary shares are traded on the
Alternative Investment Market (“AIM”).
The Group’s financial statements have been prepared in accordance with UK adopted international accounting standards.
Going concern
Management continued to take actions to allow the business to trade effectively and manage the risks associated with the
Covid-19 pandemic.
At 30 June 2022 the Group had cash and cash equivalents of £8.3 million and had utilised £13.0 million of its committed £20.0
million revolving credit facility. This provided total headroom of some £15.3 million against committed facilities and, together with
£4.0 million overdraft facilities, there is headroom of some £19.3 million against total facilities at 30 June 2022. On 25 August 2022
the Group entered into a £25.0 million committed revolving credit facility which expires in August 2025 with two further single year
extension periods to August 2026 and August 2027.
In assessing going concern to take account of the continued uncertainties caused by Covid-19, the Group has modelled a Base
Case (BC) trading scenario on a “bottom up” basis. Given the continuing uncertainty regarding the impact of Covid-19 (including
potential further waves of the pandemic) on the economy, customer behaviour and ultimately on the Group’s performance,
the Group has also modelled a stress test scenario which assumes a 20% reduction in revenue, with no cost reduction or cash
conservation measures, and a Covid-19 model, which assumes a five month disruption of trade consistent with that experienced
during the first wave of the pandemic. Under the lowest point in these stress tested scenarios, the Group retains adequate
headroom against its total banking facilities for the next 13 months to the end of September 2023, with no breach of banking
covenants across this period.
The Group has modelled an additional scenario (a reverse stress test) that would lead to a breach of its banking covenants. It is
considered that the risk of such a scenario arising is remote. Management have also identified a number of mitigating actions
that the Group would take to stay within its banking facilities and comply with the associated covenants throughout the period.
Having taken into account all of the aforementioned comments, actions and factors in relation to going concern and the potential
impact of Covid-19, and in light of the bank facility headroom under various scenarios, the Directors consider that the Group has
adequate resources to continue trading for the foreseeable future. Accordingly, they continue to adopt the going concern basis in
preparing the financial statements.
2 Summary of significant accounting policies
The accounting policies adopted are consistent with those of the previous financial year. The following new standards,
amendments and interpretations are effective for the period beginning on or after 1 July 2021 and have been adopted for the
Group financial statements where appropriate with no material impact on the disclosures and results made by the Group:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16); and
• Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41).
Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and each of its subsidiaries for the year to
30 June each year.
Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control, and continue to
be consolidated until the date that such control ceases. Control in this context means the power to govern the financial and operating
policies of the investee so as to obtain benefit from its activities and is achieved through direct or indirect ownership of voting
rights. The financial statements of subsidiaries are prepared for the same reporting year as the Parent Company, using consistent
accounting policies. All inter-company balances and transactions, including unrealised profits arising from them, are eliminated.
Judgements and estimates
The main sources of estimation uncertainty that could have a significant risk of causing material adjustment to the carrying
amounts of assets and liabilities at 30 June 2022 within the next financial year are the valuation of defined benefit pension
obligations, the valuation of the Group’s acquired goodwill, the recognition of revenues and profit on contracts with customers
where revenue is recognised over time.
Valuation of defined benefit pension obligations requires estimation of future changes in inflation, mortality rates and the selection
of an appropriate discount rate (see note 22).
Goodwill is tested at least annually for impairment, with appropriate assumptions and estimates built into the value in use
calculations to determine if an impairment of the carrying value is required. See note 14 for further disclosure of the assumptions
and estimates applied.
The Alumasc Group plc Report and Accounts 2022
85
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
2 Summary of significant accounting policies continued
Judgements and estimates continued
Revenue and associated margin recognised over time on contracts with customers is recognised using the input method under
IFRS 15 and therefore progressively as costs are incurred, having regard to latest estimates of cost to complete and expected
project margins. Contract revenue includes an assessment of contract variations when their recovery is considered highly
probable. Judgement is therefore required in the application of the Group’s policy regarding revenue and profit recognition
relating to estimates of costs to complete contracts, the final profit margin on those contracts and the inclusion of potential
contract variations prior to these being fully agreed.
Goodwill
Goodwill arises on the acquisition of subsidiaries. As part of its transition to IFRS, the Group elected to re-state only those
business combinations that occurred on or after 1 July 2004. In respect of acquisitions prior to 1 July 2004, goodwill represents the
amount recognised under the Group’s previous accounting framework, UK GAAP. For acquisitions on or after 1 July 2004, goodwill
represents the excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities of the acquiree. When the excess is negative (negative goodwill), it is recognised immediately in the
income statement.
After initial recognition, goodwill is stated at cost less any accumulated impairment losses, with the carrying value being reviewed
for impairment at least annually, and whenever events or changes in circumstances indicate that the carrying value may be
impaired. The carrying amount of goodwill allocated to a cash-generating unit is taken into account when determining the
gain or loss on disposal of the unit, or of an operation within it.
Other intangible assets
Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment
losses. Intangible assets acquired separately from a business are carried initially at fair value. An intangible asset acquired as part
of a business combination is recognised separately from goodwill if the asset is separable or arises from contractual or other legal
rights and its fair value can be measured reliably. Expenditure on internally developed intangible assets, excluding development
costs, is taken to the income statement in the year in which it is incurred.
Development expenditure is recognised as an intangible asset only after all the following criteria are met:
• the project’s technical feasibility and commercial viability can be demonstrated;
• the availability of adequate technical and financial resources and an intention to complete the project have been confirmed; and
• the correlation between development costs and future revenues has been established.
Intangible assets with a finite life are amortised on a straight line basis over their expected useful lives, as follows:
Computer software – 2 to 5 years
Brands
– 3 to 25 years
The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the
carrying value may not be recoverable. In addition, the carrying value of capitalised development expenditure is reviewed for
impairment before being brought into use and annually thereafter.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Cost
comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs
directly attributable to making the asset capable of operating as intended. Under IFRS transitional provisions, the Group elected
to bring in previous valuations of freehold and long leasehold land and buildings at a valuation frozen under FRS 15, and these
amounts are carried forward at deemed cost.
Freehold land is not depreciated.
The cost of other property, plant and equipment is written off by equal monthly instalments over their estimated useful lives
as follows:
– over the period of the lease
– 25 to 50 years
Right-of-use assets
Freehold buildings
Long leasehold improvements – over the period of the lease
Short leasehold improvements – over the period of the lease
Plant and equipment
Motor vehicles
– 3 to 15 years
– 4 to 5 years
Where parts of an item of property, plant and equipment have different useful lives, each part is accounted for as a separate item.
Useful lives and residual values are reviewed annually and where adjustments are required these are made prospectively.
86
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Strategic report
Governance
Financial statements
2 Summary of significant accounting policies continued
Impairment of fixed assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell, and its value in use. It
is determined for each individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the related cash-generating units
monitored by management, usually at business segment level or business level as the case may be.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment
losses of continuing operations are recognised in the statement of comprehensive income in those expense categories consistent
with the function of the impaired asset.
Leases
(i) Identification of a lease
At inception of a contact the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an identified asset the Group assesses whether:
• the contract involves the sole use of a specific identified asset – this may be specified explicitly or implicitly, and should be
physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
• the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of
use; and
• the Group has the right to direct the use of the asset.
This policy is applied to contracts entered into, or amended, on or after 1 July 2019, as the Group has opted to apply the practical
expedient to “grandfather” the assessment of which contracts are, or contain, leases.
(ii) As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are
determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot readily be determined, the Group’s incremental
borrowing rate. The Group uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise fixed payments. The Group does not make other
types of payment referred to in IFRS 16 for its leases.
Generally the lease liability represents the present value of contractual future lease payments including optional renewal periods
where the Group is reasonably certain to exercise the extension option. The Group does not typically enter into purchase options
or variable lease payments.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change
in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount
expected to be payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a
purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘Property, plant and equipment’
and discloses the corresponding “Lease liability” in the statement of financial position.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12
months or less, and leases of low-value assets, which it defines as having a purchase cost of £5,000 or less. The Group recognises
the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
The Alumasc Group plc Report and Accounts 2022
87
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
2 Summary of significant accounting policies continued
Impairment of fixed assets continued
(iii) As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and
rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an
operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major
part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses
the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the
underlying asset. If a head lease is a short-term lease to which the Group applies an exemption under IFRS 16 then it classifies the
sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the contract.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as
part of ‘Rental income’ (see note 3).
Financial assets
When financial assets are recognised initially under IFRS 9, they are measured at fair value, being the transaction price plus directly
attributable transaction costs.
Inventories
Inventories are valued at the lower of cost and net realisable value on a first in first out basis after making due allowance for any
obsolete or slow moving items. In the case of finished goods and work in progress, cost comprises direct materials, direct labour
and an appropriate proportion of manufacturing overheads. The allocation of manufacturing overheads has regard to normal
production.
The Group holds certain raw materials from suppliers on a consignment basis, which are accounted for when consumed. This
inventory remains the property of the supplier until used.
Pension costs
The Group operates both defined benefit and defined contribution pension schemes as follows:
(i) Defined benefit pensions
The Group operates a principal defined benefit scheme, The Alumasc Group Pension Scheme (“AGPS”), which requires deficit
reduction contributions to be made to a separately administered fund. The scheme was closed to future benefit accrual in 2010,
which did not result in a curtailment gain or loss. Prior to this, benefits were accrued under the Career Average Revalued Earnings
(CARE) basis.
Prior to the closure of the scheme to future benefit accrual, the cost of providing benefits under the defined benefit plan was
determined using the projected unit credit method, which attributes entitlement to benefits to the current period (to determine
current service cost) and is based on actuarial advice.
The Group determines finance income/expense for the period relating to defined benefit pension scheme by applying the discount
rate used for valuing the scheme’s liabilities to the value of the net pension liability at the beginning of the year.
The net pension scheme finance costs are charged to finance costs within the statement of comprehensive income.
Actuarial gains and losses are recognised in full in the consolidated statement of comprehensive income. These comprise, for
scheme assets, the difference between the expected and actual return on assets, and, for scheme liabilities, the difference between
the actuarial assumptions and actual experience, and the effect of changes in actuarial assumptions.
The defined benefit pension asset or liability in the statement of financial position comprises the total for each plan of the present
value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan
assets from which the obligations are to be settled directly. Fair value is based on market price information and in the case of
quoted securities is the published bid price. The value of a net pension benefit asset is restricted to the sum of any unrecognised
past service costs and the present value of any amount the Group expects to recover by way of refunds from the plan or
reductions in the future contributions.
(ii) Defined contribution pensions
The pension cost charge to the statement of comprehensive income of the Group’s defined contribution schemes represents
the contributions payable by the Group to the funds. The assets of the schemes are held separately from those of the Group in
independently administered funds.
88
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
2 Summary of significant accounting policies continued
Income taxes
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities,
based on tax rates and laws that are enacted or substantively enacted by the statement of financial position date.
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, with the following exceptions:
• where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not
a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
•
in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future; and
• deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when
the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the statement of
financial position date.
Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income
tax is recognised in the consolidated statement of comprehensive income.
Foreign currencies
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the
transactions. Exchange differences resulting from the settlement of such transactions and from the translation at exchange rates
ruling at the year end date of monetary assets and liabilities denominated in currencies other than the functional currency are
recognised in the consolidated statement of comprehensive income.
Own shares
The Alumasc Group plc shares held by the Group are classified in shareholders’ equity as ‘own shares’ and are recognised at cost.
Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale
and the original cost being taken to reserves. No gain or loss is recognised in the performance statements on the purchase, sale,
issue or cancellation of equity shares.
A Trust holds the shares in its name and shares are awarded to employees on request by the Group. The Group controls and bears
the expenses of the Trust.
Equity settled share based payment transactions
The fair value of long term incentive awards and share options granted to employees is recognised as an employee expense from
the date of grant, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to
the awards. The amount recognised as an expense is adjusted to reflect the actual number of shares for which the related service
and non-market vesting conditions are met.
Derivative financial instruments and hedging
The Group uses derivative financial instruments to hedge its exposure to foreign exchange risk.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently re-measured at fair value. The gain or loss on re-measurement to fair value is recognised immediately in the
statement of comprehensive income. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or
loss depends on the nature of the item being hedged.
The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar
maturity profiles.
For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented
at its inception. This documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk
being hedged and how effectiveness will be measured throughout its duration. Such items are expected at inception to be
highly effective.
For the purpose of hedge accounting, the hedges used by the Group are classified as cash flow hedges, as they hedge exposure to
variability in cash flows that are attributable to a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction.
The portion of the gain or loss on a cash flow hedge that is determined to be an effective hedge is initially recognised directly in
other comprehensive income, while the ineffective portion is recognised in the statement of comprehensive income.
The Alumasc Group plc Report and Accounts 2022
89
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
2 Summary of significant accounting policies continued
Derivative financial instruments and hedging continued
Amounts taken to other comprehensive income are transferred to the income statement at the time when the underlying
transaction being hedged affects profit or loss, such as when the forecast sale or purchase of the hedged item occurs. Where
the hedged item is the cost of a non-financial asset or liability, the amounts taken to equity are transferred to the initial carrying
amount of the non-financial asset or liability.
If the forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to the statement
of comprehensive income.
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge
is revoked, amounts previously recognised in equity remain in equity until the forecast transaction being hedged occurs and are
transferred to the income statement or to the initial carrying amount of a non-financial asset or liability as above. If the related
transaction is not expected to occur, the amount is taken to the statement of comprehensive income.
Any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge accounting are taken to the
consolidated statement of comprehensive income.
Information regarding both the qualitative and quantitative characteristics of the Group’s treasury activities is presented to enable
the improved evaluation of the Group’s exposure to risks arising from financial instruments.
Revenue recognition
Revenue represents the total amounts receivable by the Group for goods supplied and services provided, excluding VAT and rebates.
Building Envelope
The performance obligations and transaction price are defined within signed contracts between the customer and Levolux. These
contracts contain one performance obligation as the scope of work and pricing of the contract is to deliver an interrelated service.
The revenue for the performance obligation is recognised on an input cost method over time, measured by reference to the stage
of completion of the contract. Revenue and associated profit are therefore recognised progressively as costs are incurred and
having regard to latest estimates of cost to complete and expected project margins.
Due to the nature of the services provided, instructed variations to contracts are usually accounted for as if it was part of the
existing contract, as the variations do not result in a distinct good or service being delivered. Where the variation to the original
contract is for extra goods or services which are distinct from the original performance obligations under the contract, this is
accounted for as a separate contract. Claims for extra revenue for variations or extra work over and above the original contract
are only recognised when management determines the revenue to be highly probable.
Other revenue streams
The revenue for each performance obligation is generally recognised at a point in time upon despatch of goods, or receipt of
goods by the customer, depending on the terms of trade of each operating entity.
See note 23 for disclosure of the Group’s warranty provision held at the reporting date.
Trade and other receivables
Trade receivables are recognised and carried at the lower of their original invoiced value and recoverable amount. Impairment losses
against financial assets carried at amortised cost are recognised by reference to any expected credit losses against those assets.
Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of cash flows comprise cash at bank and in hand and short-term
deposits with an original maturity of three months or less, net of bank overdrafts.
Interest bearing loans and borrowings
All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. After initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains
and losses arising on the repurchase, settlement or cancellation of liabilities are recognised respectively in finance revenue and
finance costs. Borrowing costs are recognised as an expense over the period to maturity of the underlying instrument.
Provisions
A provision is recognised when the Group has a legal or constructive obligation as a result of a past event and it is probable
that an outflow of economic benefits will be required to settle the obligation. Where the Group expects some or all of a provision
to be reimbursed, for example under an insurance policy, the reimbursement is recognised as a separate asset but only when
recovery is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net
of any reimbursement.
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Strategic report
Governance
Financial statements
2 Summary of significant accounting policies continued
Other income
Government grant income is shown gross in other income to match the costs as incurred by the Group. Where retention of a
government grant is dependent on the Group satisfying certain criteria, it is initially recognised as deferred income. When the
criteria for retention have been satisfied, the deferred income balance is released to the consolidated statement of comprehensive
income or deducted from the cost of the asset purchased.
New standards and interpretations not applied
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are
effective in future accounting periods that the Group has decided not to adopt early. The following amendments are effective
for the period beginning 1 July 2022:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
• Classification of Liabilities as Current or Non-current (Amendments to IAS 1);
• Definition of Accounting Estimates (Amendments to IAS 8); and
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
Management is currently assessing the impact of these new accounting standards and amendments but does not believe that the
amendments will have a significant impact.
3 Revenue
Revenue, as disclosed in the statement of comprehensive income and total income is analysed as follows:
Revenue arising from:
Goods transferred to customers, recognised at a point in time
Contracts recognised over time
Revenue (per statement of comprehensive income)
Rental income
Total income
2021/22
£’000
2020/21
£’000
88,558
823
89,381
75,623
2,182
77,805
40
40
89,421
77,845
The vast majority of the Group’s contracts where revenue is recognised over time are for the design, delivery and installation of
goods for which those contracts can span over more than one accounting period. Accordingly, at each reporting date there are
likely to be several of these types of contract which have commenced but for which the performance obligations are not yet
fully satisfied.
4 Segmental analysis
In accordance with IFRS 8 “Operating Segments”, the segmental analysis below follows the Group’s internal management
reporting structure.
The Chief Executive reviews internal management reports on a monthly basis, with performance being measured based on the
segmental operating result as disclosed below. Performance is measured on this basis as management believe this information is
the most relevant when evaluating the impact of strategic decisions because of similarities between the nature of products and
services, routes to market and supply chains in each segment.
Inter-segment transactions are entered into applying normal commercial terms that would be available to third parties. Segment
results, assets and liabilities include those items directly attributable to a segment. Unallocated assets comprise cash and cash
equivalents, deferred tax assets, income tax recoverable and corporate assets that cannot be allocated on a reasonable basis to
a reportable segment. Unallocated liabilities comprise borrowings, employee benefit obligations, deferred tax liabilities, income
tax payable and corporate liabilities that cannot be allocated on a reasonable basis to a reportable segment.
The Alumasc Group plc Report and Accounts 2022
91
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
4 Segmental analysis continued
Year to 30 June 2022
Water Management
Building Envelope
Housebuilding Products
Trading
Unallocated costs
Total from continuing operations
Segmental operating result
Brand amortisation (see note 5)
Restructuring costs (see note 5)
Total operating profit from continuing operations
Segmental
operating
result
£’000
Revenue
£’000
47,564
29,389
12,428
89,381
89,381
8,753
3,580
2,447
14,780
(1,447)
13,333
£’000
13,333
(70)
(564)
12,699
Segment
assets
£’000
Segment
liabilities
£’000
35,084
9,990
15,851
60,925
8,544
69,469
(11,236)
(8,625)
(7,346)
(27,207)
(16,530)
(43,737)
Capital expenditure
Property,
plant &
equipment
£’000
Other
intangible
assets
£’000
Depreciation
£’000
Amortisation
£’000
1,427
141
1,310
2,878
5
2,883
70
12
41
123
–
123
1,207
360
866
2,433
82
2,515
190
187
48
425
–
425
Water Management
Building Envelope
Housebuilding Products
Trading
Unallocated
Total
Year to 30 June 2021
Water Management
Building Envelope
Housebuilding Products
Trading
Unallocated costs
Total from continuing operations
Segmental operating result
Brand amortisation (see note 5)
Past service cost in respect of GMP equalisation (see note 5)
Restructuring costs (see note 5)
Total operating profit from continuing operations
92
The Alumasc Group plc Report and Accounts 2022
Segmental
operating
result
£’000
Revenue
£’000
38,370
28,362
11,073
77,805
77,805
6,115
3,757
2,552
12,424
(1,918)
10,506
£’000
10,506
(70)
(150)
(58)
10,228
Strategic report
Governance
Financial statements
4 Segmental analysis continued
Segment
assets
£’000
Segment
liabilities
£’000
Capital expenditure
Property,
plant &
equipment
£’000
Other
intangible
assets
£’000
Depreciation
£’000
Amortisation
£’000
Water management
Building Envelope
Housebuilding Products
Trading
Unallocated
Total
Analysis by geographical segment 2021/22
Sales to external customers
Segment non-current assets
United
Kingdom
£’000
75,714
28,150
Analysis by geographical segment 2020/21
Sales to external customers
Segment non-current assets
United
Kingdom
£’000
70,205
39,225
29,866
25,500
14,747
70,113
7,520
77,633
Europe
£’000
2,983
–
Europe
£’000
3,004
–
(9,635)
(10,208)
(7,114)
(26,957)
(14,531)
(41,488)
North
America
£’000
21
–
North
America
£’000
57
–
1,455
215
769
2,439
–
2,439
Middle
East
£’000
2,006
–
Middle
East
£’000
1,286
–
271
36
23
330
–
330
Far
East
£’000
8,071
1
Far
East
£’000
2,663
4
1,081
175
798
2,054
92
2,146
Rest of
World
£’000
586
–
Rest of
World
£’000
590
–
137
180
44
361
–
361
Total
£’000
89,381
28,151
Total
£’000
77,805
39,229
Segment revenue by geographical segment represents revenue from external customers based upon the geographical location of the
customer. The analyses of segment non-current assets are based upon location of the assets and exclude discontinued operations.
5 Underlying to statutory profit before tax reconciliation
Underlying operating profit/profit before tax from
continuing operations
Brand amortisation
IAS 19 net pension scheme finance costs (note 9)
IAS 19 past service cost in respect of GMP equalisation
Restructuring costs
Profit before tax from continuing operations
Underlying operating (loss)/profit of Levolux (note 6)
Brand amortisation Levolux (note 6)
Write down of assets held for sale (note 6)
Statutory operating profit/(loss)/profit before tax
2021/22
2020/21
Operating
profit
£’000
Profit
before tax
£’000
Operating
profit
£’000
Profit
before tax
£’000
13,333
12,725
10,506
10,017
(70)
–
–
(564)
12,699
(1,957)
(168)
–
10,574
(70)
(60)
–
(564)
12,031
(1,957)
(168)
(14,912)
(5,006)
(70)
–
(150)
(58)
10,228
498
(168)
–
10,558
(70)
(268)
(150)
(58)
9,471
498
(168)
–
9,801
In the presentation of underlying profits, management disclose the amortisation of acquired brands and IAS 19 pension costs
consistently as non-underlying items because they are material non-cash and non-trading items that would typically be excluded
in assessing the value of the business.
The Alumasc Group plc Report and Accounts 2022
93
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
5 Underlying to statutory profit before tax reconciliation continued
In addition, management has presented the following specific items that arose in 2021/22 and 2020/21 financial years as
non-underlying as they are non-recurring items that are judged to be significant enough to affect the understanding of the
year-on-year evolution of the underlying trading performance of the business:
• one-off costs of material restructuring of separate businesses within the Group in both 2021/22 and 2020/21;
• the one off IAS 19 past service pension cost relating to Guaranteed Minimum Pension (“GMP”) equalisation between men and
women, in the prior financial year; and
• the one-off deferred tax rate change adjustment charge of £319k relating to the increase in main rate of UK corporation tax
from 19% to 25% in the prior financial year.
6 Discontinued operations
Discontinued operations relate to the Levolux business which was divested by the Group on 26 August 2022 and therefore disclosed
as held for sale at 30 June 2022. At the year end the discontinued operation had liabilities of £3,859,000. The assets held for resale
were written down to a value equivalent to the liabilities to reflect the sales proceeds of £1 received on 26 August 2022.
The results of Levolux included in the consolidated statement of comprehensive income are as follows:
Revenue
Underlying operating (loss)/profit
Brand amortisation
Write down of goodwill
Write down of brand
Write down of Assets held for sale
(Loss)/profit before taxation
Tax credit/(charge) (see note 10)
(Loss)/profit after taxation
Year to
30 June
2022
£’000
Year to
30 June
2021
£’000
7,820
12,660
(1,957)
(168)
(10,179)
(874)
(3,859)
(17,037)
380
(16,657)
498
(168)
–
–
–
330
(97)
233
7 Expenses by nature
The following items have been charged/(credited) in arriving at operating profit from continuing operations:
Raw materials and consumables
Depreciation of property, plant & equipment
Amortisation of intangible assets
Brand amortisation
Gain on disposal of property, plant and equipment
Unsettled foreign exchange (gains)/losses
Employee benefit expense
Restructuring & relocation costs
IAS 19 Past service cost in respect of GMP equalisation
Short term and low value lease payments
Research and development
Auditor’s remuneration:
Audit of these financial statements
Audit of financial statements of subsidiaries pursuant to legislation
Non-audit services
Other operating charges
94
The Alumasc Group plc Report and Accounts 2022
2021/22
£’000
48,291
2,515
187
70
(18)
(3)
2020/21
£’000
37,814
2,146
123
70
(16)
66
20,144
18,978
564
–
544
242
73
47
–
58
150
533
114
67
43
35
4,026
76,682
7,396
67,577
Strategic report
Governance
Financial statements
8 Employee costs and numbers
Employee benefit expense from continuing operations:
Wages and salaries
Social security
Defined contribution pension costs (note 22)
IAS 19 net defined benefit pension scheme finance costs
Total
Average number of employees:
Operational
Administrative, support and management
9 Net finance costs
Finance costs – Bank overdrafts
– Revolving credit facility
– Interest on lease liabilities
– IAS 19 net pension scheme finance costs
2021/22
£’000
2020/21
£’000
17,463
1,715
966
20,144
60
20,204
16,816
1,573
589
18,978
268
19,246
2021/22
Number
2020/21
Number
210
194
404
196
195
391
2021/22
£’000
2020/21
£’000
48
391
169
608
60
668
24
287
178
489
268
757
The Alumasc Group plc Report and Accounts 2022
95
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
10 Tax expense
(a) Tax on profit
Tax charged in the statement of comprehensive income
Current tax:
UK corporation tax – continuing operations
– discontinued operations
Overseas tax
Amounts (over)/under provided in previous years
Total current tax
Deferred tax:
Origination and reversal of temporary differences
Amounts under/(over) provided in previous years
Rate change adjustment
Total deferred tax
Total tax expense
Tax charge on continuing operations
Tax (credit)/charge on discontinued operations
Total tax expense
Tax recognised in other comprehensive income
Deferred tax:
Actuarial (losses)/gains on pension schemes
Cash flow hedge
Tax charged to other comprehensive income
Total tax charge in the statement of comprehensive income
2021/22
£’000
2020/21
£’000
1,094
(380)
207
(16)
905
833
78
225
1,136
2,041
2,421
(380)
2,041
1,346
97
46
23
1,512
405
(21)
319
703
2,215
2,118
97
2,215
(9)
113
104
2,099
(90)
2,009
2,145
4,224
(b) Reconciliation of the total tax charge
The total tax rate applicable to the tax expense shown in the statement of total comprehensive income of 20.6% is higher than
(2020/21: 22.6% was higher than) the standard rate of corporation tax in the UK of 19.0% (2020/21: 19.0%).
The differences are reconciled below:
Profit before tax from continuing operations
(Loss)/profit before tax from discontinued operations
Accounting profit before tax
Current tax at the UK standard rate of 19.0% (2020/21: 19.0%)
Expenses not deductible for tax purposes
Income not taxable
Rate change adjustment
Tax (over)/under provided in previous years – current tax
Tax under/(over) provided in previous years – deferred tax
96
The Alumasc Group plc Report and Accounts 2022
2021/22
£’000
2020/21
£’000
12,031
(2,125)
9,906
1,882
42
(170)
225
(16)
78
9,471
330
9,801
1,862
32
–
319
23
(21)
2,041
2,215
Strategic report
Governance
Financial statements
10 Tax expense continued
(c) Unrecognised tax losses
The Group has agreed tax capital losses in the UK amounting to £16.3 million (2021: £16.3 million) that relate to prior years. Under
current legislation these losses are available for offset against future chargeable gains. The capital losses are able to be carried
forward indefinitely. Revaluation gains on land and buildings amount to £1.0 million (2021: £1.0 million). These have been offset in
the prior year against the capital losses detailed above. A deferred tax asset has not been recognised in respect of the net capital
losses carried forward of £15.3 million (2021: £15.3 million) as they do not meet the criteria for recognition.
(d) Deferred tax
A reconciliation of the movement in deferred tax during the year is as follows:
At 1 July 2020
Accelerated
capital
allowances
£’000
550
Charged/(credited) to the statement of
comprehensive income – current year
Credited to the statement of comprehensive
income – prior year
(Credited)/charged to equity
At 30 June 2021
Charged/(credited) to the statement of
comprehensive income – current year
Charged/(credited) to the statement of
comprehensive income – prior year
(Credited)/charged to equity
359
(5)
–
904
463
79
–
Short term
temporary
differences
£’000
Brands
£’000
Hedging
£’000
Total
deferred
tax
liability
£’000
Pension
deferred
tax asset
£’000
Share
options
£’000
–
1,007
(3,661)
(83)
307
417
–
2,099
(1,145)
(21)
(327)
966
433
625
78
253
1,730
–
(9)
(529)
(75)
(65)
(16)
–
(156)
493
96
–
–
589
22
(60)
(1)
–
–
–
39
–
–
(90)
(51)
–
–
113
62
–
(237)
(320)
8
–
140
(172)
At 30 June 2022
1,446
(135)
529
Deferred tax assets and liabilities are presented as non-current in the consolidated statement of financial position.
Deferred tax assets have been recognised where it is probable that they will be recovered. Deferred tax assets of £3.8 million
(2021: £3.8 million) in respect of net capital losses of £15.3 million (2021: £15.3 million) have not been recognised, see note 10 (c).
(e) Factors affecting the tax charge in future periods
In the Budget on 3 March 2021, the Government announced its intention to increase the main rate of UK corporation tax from
19% to 25% with effect from 1 April 2023. Existing temporary differences on which deferred tax has been provided may therefore
unwind in future periods at this increased rate. Since the 25% tax rate change was substantively enacted at the 30 June 2022
balance sheet date, deferred tax assets and liabilities have been calculated to reflect the expected timing of reversal of the related
temporary difference.
11 Dividends
Interim dividend for 2022 of 3.35p paid on 6 April 2022
Final dividend for 2021 of 6.25p paid on 29 October 2021
Interim dividend for 2021 of 3.25p paid on 6 April 2021
Final dividend for 2020 of 2.0p paid on 30 October 2020
2021/22
£’000
2020/21
£’000
1,201
2,233
–
–
3,434
–
–
1,163
715
1,878
A final dividend of 6.65 pence per equity share, at a cash cost of £2,381,000, has been proposed for the year ended 30 June 2022,
payable on 4 November 2022. In accordance with IFRS accounting requirements this dividend has not been accrued in these
consolidated financial statements.
The Alumasc Group plc Report and Accounts 2022
97
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
12 Earnings per share
Basic earnings per share is calculated by dividing the net profit for the period attributable to ordinary equity shareholders of the
parent by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share is calculated
by dividing the net profit attributable to ordinary equity shareholders of the parent by the weighted average number of ordinary
shares in issue during the period, after allowing for the exercise of outstanding share options. The following sets out the income
and share data used in the basic and diluted earnings per share calculations:
2021/22
£’000
9,610
(16,657)
(7,047)
000s
35,825
586
36,411
2020/21
£’000
7,353
233
7,586
000s
35,766
637
36,403
Pence
Pence
26.8
(46.5)
(19.7)
20.6
0.6
21.2
2021/22
Pence
2020/21
Pence
26.4
(46.5)
(20.1)
20.2
0.6
20.8
2021/22
£’000
12,031
2020/21
£’000
9,471
70
60
–
564
12,725
(2,469)
10,256
35,825
28.6p
70
268
150
58
10,017
(1,953)
8,064
35,766
22.5p
Net profit attributable to equity holders of the parent – continuing operations
Net profit attributable to equity holders of the parent – discontinued operations
Weighted average number of shares
Dilutive potential ordinary shares – employee share options
Basic earnings per share:
Continuing operations
Discontinued operations
Diluted earnings per share:
Continuing operations
Discontinued operations
Calculation of underlying earnings per share:
Reported profit before taxation from continuing operations
Brand amortisation
IAS 19 net pension scheme finance costs
Pension GMP equalisation
Restructuring & relocation costs
Underlying profit before taxation from continuing operations
Tax at underlying Group tax rate of 19.4% (2020/21: 19.5%)
Underlying earnings from continuing operations
Weighted average number of shares
Underlying earnings per share from continuing operations
98
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
13 Property, plant and equipment
Right-of-use
assets
£’000
Freehold
land and
buildings
£’000
Long
leasehold
improvements
£’000
Short
leasehold
improvements
£’000
Plant &
equipment
£’000
Cost
At 1 July 2020
Additions
Disposals
At 1 July 2021
Additions
Disposals
At 30 June 2022
6,270
374
–
6,644
420
(155)
6,909
5,899
1,232
–
–
–
–
5,899
1,232
–
–
–
–
5,899
1,232
Accumulated depreciation and impairment losses
414
761
–
1,175
963
–
(155)
1,320
140
–
1,460
131
–
–
1,983
1,591
4,926
5,469
5,856
4,308
4,439
4,579
389
79
–
468
54
–
–
522
710
764
843
At 1 July 2020
Depreciation charge for year
On disposals
At 1 July 2021
Depreciation charge for year
Write down of Assets held for sale
On disposals
At 30 June 2022
Net book value at 30 June 2022
Net book value at 30 June 2021
Net book value at 1 July 2020
14 Goodwill
Cost:
At 1 July and 30 June
Impairment:
At 1 July
Write down of Assets held for sale
At 30 June
Net book value at 30 June
Total
£’000
28,800
2,439
(1,232)
30,007
2,883
(1,077)
31,813
11,855
2,146
(1,197)
12,804
2,515
45
(1,050)
14,314
17,499
17,203
16,945
310
–
–
310
24
(179)
155
239
16
–
255
21
–
(179)
97
58
55
71
15,089
2,065
(1,232)
15,922
2,439
(743)
17,618
9,493
1,150
(1,197)
9,446
1,346
45
(716)
10,121
7,497
6,476
5,596
2022
£’000
2021
£’000
19,428
19,428
723
10,179
10,902
723
–
723
8,526
18,705
The Alumasc Group plc Report and Accounts 2022
99
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
14 Goodwill continued
Goodwill acquired through acquisitions has been allocated to cash generating units for impairment testing as set out below:
Alumasc Roofing
Timloc
Levolux
Rainclear
Wade
At 30 June
2022
£’000
3,820
2,264
–
225
2,217
8,526
2021
£’000
3,820
2,264
10,179
225
2,217
18,705
Impairment testing of acquired goodwill
The Group considers each of the operating businesses that have goodwill allocated to them, which are those units for which a
separate cashflow is computed, to be a cash generating unit (CGU). Each CGU is reviewed annually for indicators of impairment.
In assessing whether an asset has been impaired, the carrying amount of the CGU is compared to its recoverable amount. The
recoverable amount is the higher of its fair value less costs to sell and its value in use. In the absence of any information about the
fair value of a CGU, the recoverable amount is deemed to be its value in use. Each of the CGUs are either operating segments as
shown in note 4, or sub-sets of those operating segments.
For the purpose of impairment testing, the recoverable amount of CGUs is based on value in use calculations. The value in use is
derived from discounted management cash flow forecasts for the businesses, based on budgets and plans covering a five year
period. The growth rate used to extrapolate the cash flows beyond this period was 1% (2021: 1%) for each CGU.
Key assumptions included in the recoverable amount calculation are the discount rate applied and the cash flows generated by:
(i) Revenues
(ii) Gross margins
(iii) Overhead costs
Each assumption has been considered in conjunction with the local management of the relevant operating businesses who have
used their past experience and expectations of future market and business developments, including Covid-19, in arriving at the
figures used.
The range of pre-tax rates used to discount the cash flows of these cash generating units with on-balance sheet goodwill was 12%
(2021: between 11% and 12%). These rates were based on the Group’s estimated weighted average cost of capital (W.A.C.C.), which
was risk-adjusted for each CGU taking into account both external and internal risks. The Group’s W.A.C.C. in 2022 was similar to
the rate used in 2021.
The surplus headroom above the carrying value of goodwill at 30 June 2022 was significant in the case of Timloc, Rainclear, Wade
and Alumasc Roofing, with no impairment arising from either a 2% increase in the discount rate; a growth rate of -1% used to
extrapolate the cash flows; or a reduction of 25% in the cash flow generated in the terminal year.
The carrying value of goodwill at 30 June 2022 for Levolux was written down to £nil to reflect the sale of the business on
26 August 2022.
100
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Brands
£’000
Computer
software
£’000
5,843
–
–
2,644
330
(7)
Total
£’000
8,487
330
(7)
5,843
2,967
8,810
–
–
123
(9)
123
(9)
5,843
3,081
8,924
3,248
238
–
3,486
238
874
–
1,887
123
(7)
2,003
187
19
(9)
5,135
361
(7)
5,489
425
893
(9)
4,598
2,200
6,798
1,245
2,357
2,595
881
964
757
2,126
3,321
3,352
15 Other intangible assets
Cost:
At 1 July 2020
Additions
Disposals
At 1 July 2021
Additions
Disposals
At 30 June 2022
Accumulated amortisation:
At 1 July 2020
Amortisation for the year
On disposals
At 1 July 2021
Amortisation for the year
Write down of Assets held for sale
On disposals
At 30 June 2022
Net book value at 30 June 2022
Net book value at 30 June 2021
Net book value at 1 July 2020
The Wade brand is being amortised over a life of 25 years from February 2018.
The Levolux brand was written down to £nil at 30 June 2022 to reflect the sale of the business on 26 August 2022.
16 Inventories
Raw materials
Work in progress
Finished goods
2022
£’000
4,067
280
9,047
13,394
2021
£’000
2,724
195
7,952
10,871
During the year the Group’s inventory provision increased by £9,000 (2021: decreased by £58,000). At 30 June 2022 the Group’s
inventory provision was £1,166,000 (2021: £1,157,000).
17 Trade and other receivables
Trade receivables
Contract assets
Other receivables
Prepayments
2022
£’000
16,801
–
543
1,442
2021
£’000
15,945
2,772
384
2,288
18,786
21,389
The Alumasc Group plc Report and Accounts 2022
101
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
17 Trade and other receivables continued
Contract assets arise from the Group’s Building Envelope division where revenue is recognised at the balance sheet date prior
to the physical invoice being raised to the customer.
Trade receivables and contract assets are non-interest bearing, are generally on terms of 30-90 days and are shown net of
provisions for lifetime expected credit losses.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss
provision for trade receivables, other receivables and contract assets. To measure expected credit losses on a collective basis,
trade receivables and contract assets are grouped based on similar credit risk and ageing.
The Group calculates the rate of provision for each customer based on the risk score assigned by reputable credit management
agencies. The risk score assigned is input into the Group’s expected credit loss matrix with a higher risk customer attracting a
higher level of provision. The Group’s matrix is designed such that the level of provision increases as the receivable balance ages
as overdue receivables are of inherently higher risk.
As at 30 June 2022, trade receivables and other receivables at nominal value of £410,000 (2021: £750,000) were impaired and
provided for. Movements in the provision for impairment of receivables were as follows:
At 1 July
(Credit)/charge for the year
Amounts written off
Write down of Assets held for sale
At 30 June
2022
£’000
2021
£’000
750
(156)
(44)
(140)
410
469
336
(55)
–
750
The table below sets out the ageing of the gross trade receivable and contract asset balances against terms and the level of
provision held against each ageing category:
Current
Less than 30 days past due
Less than 60 days past due
Less than 90 days past due
Greater than 90 days past due
18 Trade and other payables
Trade payables
Other taxation and social security
Other payables
Contract liabilities
Accruals
2022
2021
Gross
receivable
£’000
Loss
provision
£’000
Gross
receivable
£’000
Loss
provision
£’000
14,402
2,363
277
30
139
17,211
130
135
46
16
83
410
16,874
1,566
434
180
413
656
27
18
12
37
19,467
750
2022
£’000
14,257
1,916
724
–
2,134
19,031
2021
£’000
14,827
2,326
666
745
2,447
21,011
Contract liabilities arise from the Group’s Business Envelope division and represent payments in advance of revenue recognised
under IFRS 15.
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The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
19 Borrowings
Non-current liabilities:
Non-current instalments due on bank debt
2022
£’000
2021
£’000
13,000
5,936
At 30 June 2022 the Group had a £20.0 million committed revolving credit facility which had an expiry date of April 2023. On
25 August 2022 the Group entered into a £25.0 million committed revolving credit facility which expires in August 2025 and two
further single year extension periods to August 2026 and August 2027. The Group has the option to cancel and repay elements
of the committed facility at short notice should it wish to do so. The extension periods are subject to request by the Group and
acceptance by the lender.
The following financial covenants apply to the new facility: Group interest cover, based on underlying EBITDA (i.e. from continuing
operations and before non-recurring items), to be at least three and a half times; and net bank debt as a multiple of underlying
EBITDA (i.e. from continuing operations and before non-recurring items) to be below two and a half times, with an acquisition
spike to be below two and three quarter times.
At 30 June 2022 the Group also had £4.0 million (2021: £4.0 million) of bank overdraft facilities, renewed until August 2023 and
repayable on demand. The Group has an offset arrangement in place against uncommitted overdraft facilities.
20 Lease liabilities
Non-current lease liabilities
Current lease liabilities
Total lease liabilities
2022
£’000
4,251
881
5,132
2021
£’000
4,811
795
5,606
Lease liabilities are initially measured at the present value of future lease payments, discounted using the Group’s incremental
borrowing rate.
At 1 July
Additions
Disposals
Interest on lease liabilities
Amounts paid on lease liabilities
At 30 June
2022
£’000
5,606
420
(181)
169
(882)
5,132
2021
£’000
5,924
374
–
178
(870)
5,606
21 Financial instruments
Financial risk management
The Group’s treasury activities are carried out in accordance with policies set by the Board and are managed on a centralised
basis across the Group. The purpose of treasury activities is to ensure that adequate, cost effective funding is available to the
Group at all times and that exposure to interest rate, foreign exchange and counterparty risks are managed within acceptable
levels. The Group uses derivative financial instruments as economic hedges to manage foreign exchange and, where necessary,
interest rate risks. It is the Group’s policy that no trading in financial instruments is undertaken. Hedge accounting treatment has
been applied to all of these hedging activities. All derivative financial instruments are measured at fair value at each balance
sheet date.
The Alumasc Group plc Report and Accounts 2022
103
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
21 Financial instruments continued
Financial assets and liabilities
Set out below is a comparison by category of carrying amounts and fair values of all the Group’s financial assets and liabilities.
Financial assets:
Cash at bank
Trade receivables
Contract assets
Other receivables
Derivative financial asset
Financial liabilities:
Bank loans
Lease liabilities
Trade and other payables
Derivative financial liabilities
30 June 2022
30 June 2021
Carrying
amount
£’000
Fair value
£’000
Carrying
amount
£’000
Fair value
£’000
8,284
16,801
–
543
325
8,284
16,801
–
543
325
4,999
15,945
2,772
384
–
4,999
15,945
2,772
384
–
25,953
25,953
24,100
24,100
13,000
13,000
5,132
17,115
–
5,132
17,115
–
5,936
5,606
17,940
268
5,936
5,606
17,940
268
35,247
35,247
29,750
29,750
Derivative financial assets and liabilities are carried at fair value as a designated hedge instrument. The other financial assets and
liabilities are measured at amortised cost.
Trade and other payables balances do not include other taxation and social security costs or contract liabilities.
The table below summarises the maturity profile of the Group’s financial liabilities at 30 June 2022 and 2021 based on contractual
undiscounted payments. The total interest bearing loans and borrowings value in the table below includes future unaccrued
interest, whilst the bank overdraft and loans balance in the table above shows only the carrying amount at the year end date.
At 30 June 2022
Interest bearing loans and borrowings
Lease liabilities
Trade and other payables
At 30 June 2021
Interest bearing loans and borrowings
Lease liabilities
Trade and other payables
On
demand
£’000
Less than
3 months
£’000
3 to 12
months
£’000
More than
1 year
£’000
–
–
4,964
4,964
–
–
6,698
6,698
90
264
11,210
11,564
79
246
10,384
10,709
270
794
941
13,300
5,560
–
2,005
18,860
237
738
858
1,833
6,237
6,486
–
12,723
Total
£’000
13,660
6,618
17,115
37,393
6,553
7,470
17,940
31,963
Liquidity risk management
The Group manages liquidity risk by monitoring its net cash/debt position regularly and ensuring that committed and uncommitted
banking facilities are in place to provide adequate headroom for anticipated future cash flows. Details of the facilities are given
above. The Group’s net bank debt position at 30 June 2022 was £4.7 million (2021: £0.9 million).
104
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Strategic report
Governance
Financial statements
21 Financial instruments continued
Liquidity risk management continued
Details of the Group’s approach to capital structure are given within the Financial Review on page 23. The maturity profile of the
Group’s interest bearing financial liabilities is as follows:
Floating rate interest bearing financial liabilities:
In one to five years
2022
£’000
13,000
13,000
2021
£’000
5,936
5,936
Interest rate risk
The Group’s marginal pre-tax cost of debt finance at interest rates in place at 30 June 2022 under the banking facilities in existence
at that time was approximately 2.2% (2021: 1.3%).
The floating rate financial liabilities comprise the drawn down element of the revolving credit facility in existence at the balance
sheet date that bears interest based on LIBOR. The following table demonstrates the sensitivity to a reasonable possible change in
interest rates, with all other variables held constant, of the Group’s profit before tax (through the impact of floating rate borrowings):
Increase
Decrease
Basis Points
Effect on profit
before tax
+50
–50
(34)
34
Credit risk
The risk of financial loss due to a counterparty’s failure to honour its obligations arises principally in relation to transactions where
the Group provides goods and services on deferred payment terms. There are no concentrations of credit risk which amount to
more than 10% of Group revenues. The maximum credit risk exposure relating to financial assets is represented by its carrying
value less amounts recoverable from credit insurance contracts as at the balance sheet date. The Group’s cash deposits and
derivative transactions are only lodged with approved institutions that have strong credit ratings.
Group policies are aimed at minimising credit losses, and require that deferred terms are granted only to customers who
demonstrate an appropriate payment history and satisfy creditworthiness procedures. Individual exposures are monitored with
customers subject to credit terms to ensure that the Group’s exposure to bad debts is minimised. Goods may be sold on a payment
with order basis to mitigate credit risk. Most Group businesses purchase credit insurance and the Group has increased its overall
levels of credit insurance in recent years.
The ageing of gross trade receivables and contract assets is set out in note 17.
Foreign currency risk
The Group has transactional currency exposures. Such exposures arise from sales or purchases by operating companies in
currencies other than the companies’ operating currency (mainly Pounds Sterling). Transactional currency risks are managed by
offsetting as far as possible purchases and sales by Group companies in the same currency. A proportion of the residual risk is
managed, where appropriate, through the use of forward currency contracts.
None of the derivative financial instruments held at 30 June 2022 or 30 June 2021 related to derivative trading activity. Where
cash flow hedge accounting is applied, gains or losses on the financial instrument hedges are held in equity and only recognised
in the consolidated statement of comprehensive income when the losses or gains on the hedged transactions are recognised in
the consolidated statement of comprehensive income.
The following shows the amounts of foreign currency denominated receivables, payables and cash balances at 30 June stated in
local currency:
2022
Receivable
ccy’ 000
2022
Payable
ccy’ 000
2022
Cash
ccy’ 000
2022
Net total
ccy’ 000
2021
Receivable
ccy’ 000
2021
Payable
ccy’ 000
2021
Cash
ccy’ 000
2021
Net total
ccy’ 000
Euros
US Dollars
183
607
Hong Kong Dollars
30,096
(168)
(946)
(144)
54
475
69
136
350
852
20,929
50,881
6,249
(91)
(980)
(119)
96
66
355
(62)
4,181
10,311
The Alumasc Group plc Report and Accounts 2022
105
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
21 Financial instruments continued
Foreign currency risk continued
The following table demonstrates the impact on the Group’s profit after tax and equity when the fair value of unhedged monetary
assets and liabilities at 30 June are retranslated at exchange rates either 10% above or below the year end exchange rate:
2022 Increase
Decrease
2021 Increase
Decrease
Effect on profit after tax and equity
in Sterling
Exchange
rate change
US $
£’000
Euro
£’000
Hong Kong $
£’000
+10%
–10%
+10%
–10%
13
(16)
46
(56)
3
(4)
28
(34)
101
(124)
89
(109)
Hedging activities
The net fair values of the Group’s derivative financial instruments at 30 June designated as hedging instruments are set out below:
Forward foreign exchange contracts
2022
£’000
325
2021
£’000
(268)
At 30 June 2022 the Group had forward foreign exchange contracts with principal amounts equivalent to £9,278,000 (2021:
£7,997,000). The forward foreign exchange contracts hedge foreign currency cost and price risks of various currency purchases
and sales across the Group. The cash flows associated with the forward foreign exchange hedges are generally expected to occur
within the next 18 months.
The derivative financial instruments carried at fair value have been valued using directly observable market inputs and therefore
they are all considered to have been valued at Level 2, as described in the amendments to IFRS 7.
22 Retirement benefit obligations
The Group operates a number of defined contribution schemes and a defined benefit pension scheme, funded by the payment of
contributions into separately administered funds. The defined benefit scheme, which has been closed to future accrual since 2010,
provides defined benefits based on a career average revalued earnings (CARE) basis.
Defined contribution schemes
Of the amount charged to operating profit in the statement of comprehensive income for pension contributions, £1,090,000 (2021:
£666,000) was in respect of defined contribution schemes. At 30 June 2022 there was an accrual of £110,000 payable in respect of
defined contribution scheme contributions (2021: £98,000).
Defined benefit schemes
On 5 March 2019 the Group merged its two former defined benefit pension schemes and a bulk transfer of members from the
Benjamin Priest Group Pension Scheme (“BPGPS”) was made to the Alumasc Group Pension Scheme (“AGPS”).
The level of Company cash contributions agreed with the Pension Trustees is £1.2 million per annum, to include deficit reduction
contributions and scheme running expenses, over a 7-8 year period from October 2022. These contribution levels are reviewed
every three years with the next review due in June 2025. In April 2020 management consulted with the Group’s Pension Trustees
and agreed to a deferral of three month’s pension contributions to assist with the Group’s Covid-19 cash conservation programme.
The deferral amounted to £575k in aggregate, which would otherwise have been payable between April 2020 and June 2020. The
deferred amount was fully settled during the financial year.
Disclosures in accordance with IAS 19 are set out below in respect of the defined benefit scheme. Pension charges are determined
with the advice of an independent qualified actuary on the basis of annual valuations using the projected unit credit method.
106
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
22 Retirement benefit obligations continued
Defined benefit schemes continued
The principal assumptions used for the purpose of the IAS 19 valuations are set out below:
Discount rate
Expected rate of deferred pension increases
Future pension increases
Retail Price Index inflation rate
Consumer Price Index inflation rate
Post retirement mortality
Current pensioners at 65 – male
Current pensioners at 65 – female
Future pensioners at 65 in 2042 – male
Future pensioners at 65 in 2042 – female
The Alumasc
Group Scheme
2022
%
The Alumasc
Group Scheme
2021
%
3.75
2.50
1.80
2.50
3.05–3.60
3.10–3.65
3.15
2.50
3.20
2.50
Years
Years
21.5
23.5
22.8
24.9
21.5
23.4
22.8
24.9
A discount rate of 3.75% has been used in calculating the present value of liabilities of the pension scheme at 30 June 2022. A 0.1%
change to this rate would have changed the present value of the pension fund liabilities at that date by approximately £1,099,000
before tax.
A Retail Price Index inflation rate of 3.15% and a Consumer Price Index inflation rate of 2.50% have been used in calculating the
present value of liabilities of the pension scheme at 30 June 2022. A 0.1% change to these rates would have changed the present
value of the pension fund liabilities at that date by approximately £381,000 before tax.
In valuing the liabilities of the pension scheme at 30 June 2022, mortality assumptions have been assumed as indicated above.
If life expectancy had been changed to assume that all members of the scheme live for one year longer on average, the value of
the reported liabilities at 30 June 2022 would have increased by approximately £4,417,000 before tax.
The combined assets and liabilities of the scheme at 30 June are:
Scheme assets at fair value:
Equities
Liability Driven Investment Funds
Government bonds
Corporate bonds and insured annuities
Multi-asset fund
Property
Cash
Present value of scheme liabilities
Defined benefit pension deficit
2022
£’000
30,160
10,425
–
17,347
18,945
7,696
2,659
87,232
(89,346)
(2,114)
2021
£’000
50,653
14,277
–
13,021
23,142
7,217
4,319
112,629
(117,210)
(4,581)
2020
£’000
2019
£’000
44,222
17,922
–
13,135
19,576
7,019
1,594
103,468
(122,737)
(19,269)
43,758
16,194
–
12,483
19,692
6,123
2,217
100,467
(113,418)
(12,951)
2018
£’000
40,966
–
13,681
12,041
23,853
6,783
1,387
98,711
(113,851)
(15,140)
Of the above assets, all have a quoted market price with the exception of £1,194,000 of insured annuities (2021: £1,484,000) and
£845,000 of property (2021: £886,000).
The Alumasc Group plc Report and Accounts 2022
107
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
22 Retirement benefit obligations continued
Defined benefit schemes continued
The whole of the defined benefit pension deficit is shown as a non-current liability.
Amounts recognised in the statement of comprehensive income in respect of the defined benefit plan, before taxation, are as follows:
Included in net operating expenses:
Past service pension cost – Guaranteed minimum pension equalisation
–
(150)
2021/22
£’000
2020/21
£’000
Included in net finance costs:
Net pension scheme finance costs
Included in other comprehensive income:
Actuarial (loss)/gain on plan assets
Actuarial gain on retirement benefit obligations
Net actuarial (loss)/gain (pre-tax)
Total recognised in the statement of comprehensive income (pre-tax)
The actual return on plan assets for 2021/22 was a loss of £22,728,000 (2020/21: gain of £11,537,000).
Changes in the present value of the defined benefit obligation before taxation are as follows:
At 1 July
Interest cost
Past service cost – GMP equalisation
Benefits paid
Actuarial gain
At 30 June
Changes in the fair value of plan assets before taxation are as follows:
At 1 July
Expected return on plan assets
Actuarial (loss)/gain
Contributions by employer
Benefits paid
At 30 June
(60)
(268)
(24,731)
24,697
(34)
(94)
10,054
2,438
12,492
12,074
2022
£’000
2021
£’000
(117,210)
(122,737)
(2,063)
–
5,230
24,697
(1,751)
(150)
4,990
2,438
(89,346)
(117,210)
2022
£’000
112,629
2,003
(24,731)
2,561
(5,230)
87,232
2021
£’000
103,468
1,483
10,054
2,614
(4,990)
112,629
The cumulative amount of actuarial losses recognised since 1 July 2004 in the Group statement of comprehensive income is
£11,602,000 (2020/21: losses of £11,568,000).
108
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Dilapidations
£’000
Note (i)
Warranty
£’000
Note (ii)
Restructuring
£’000
Note (iii)
971
225
–
1,196
271
(6)
1,461
527
934
1,461
206
990
1,196
287
255
(102)
440
(116)
(121)
203
76
127
203
163
277
440
1,118
67
(720)
465
620
(328)
757
757
–
757
465
–
465
Total
£’000
2,376
547
(822)
2,101
775
(455)
2,421
1,360
1,061
2,421
834
1,267
2,101
23 Provisions
At 1 July 2020
Charge for the year
Utilised
At 1 July 2021
Charge/(credit) for the year
Utilised
At 30 June 2022
At 30 June 2022
Current liabilities
Non-current liabilities
At 30 June 2021
Current liabilities
Non-current liabilities
(i) Dilapidations
The provision is in respect of a number of the Group’s properties where the Group has obligations to make good dilapidations and
required restoration. The non-current liabilities are estimated to be payable over periods from one to fifteen years.
(ii) Warranty
Warranty provisions are generally utilised within five years. Provisions are not discounted to present values since the impact of
reflecting the time value of money on these balances is not considered to be material.
(iii) Restructuring
Restructuring provisions are held mainly in respect of the restructuring of the Levolux business and are expected to be utilised
within 12 months.
24 Share capital
Allotted, called up and fully paid:
2022
£’000
2021
£’000
36,133,558 (2021: 36,133,558) ordinary shares of 12.5p each
4,517
4,517
25 Movements in equity
Share capital and share premium
The balances classified as share capital and share premium are the proceeds of the nominal value and premium value respectively
on issue of the Company’s equity share capital net of issue costs.
Capital reserve – own shares
The capital reserve – own shares relates to 327,493 (2021: 360,017) ordinary own shares held by the Company. The market value of
shares at 30 June 2022 was £519,076 (2021: £954,045). These are held to help satisfy the exercise of awards under the Company’s
Long Term Incentive Plans. During the year 297,021 (2021: 9,228) shares with an original cost of £402,000 (2021: £10,000) were used
to satisfy the exercise of awards. A Trust holds the shares in its name and shares are awarded to employees on request by the
Group. The Group bears the expenses of the Trust.
The Alumasc Group plc Report and Accounts 2022
109
Financial statements
Notes to the Financial Statements continued
For the year ended 30 June 2022
25 Movements in equity continued
Hedging reserve
This reserve records the post-tax portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be
an effective hedge.
Foreign currency reserve
This foreign currency reserve is used to record exchange differences arising from the translation of the financial statements of
foreign subsidiaries.
26 Share based payments
The Company operates two types of share based payment schemes, the main features of each scheme as detailed in the
Directors’ Remuneration Report on pages 64 to 72.
Weighted
average
exercise
price
Weighted
average
exercise
price
(pence) Granted
(pence) Exercised
Weighted
average
exercise
price
(pence)
n/a
214,020
n/a
(228,511)
0.91
160,000
2.26
(78,810)
n/a
1.22
Weighted
average
exercise
price
(pence)
Weighted
average
exercise
price
(pence)
As at
30 June
2022
n/a
1.16
698,858
460,000
n/a
1.30
Lapsed
(109,713)
(41,190)
Weighted
average
exercise
price
Weighted
average
exercise
price
(pence) Granted
(pence) Exercised
Weighted
average
exercise
price
(pence)
Weighted
average
exercise
price
(pence)
Weighted
average
exercise
price
(pence)
As at
30 June
2021
Lapsed
n/a
1.23
265,760
170,000
n/a
0.79
–
(30,000)
n/a
1.29
(257,688)
(150,000)
n/a
1.61
823,062
420,000
n/a
0.91
As at
1 July
2021
823,062
420,000
As at
1 July
2020
814,990
430,000
LTIP(i)
ESOS(ii)
LTIP(i)
ESOS(ii)
(i) Long term incentive plan.
(ii) Executive share option scheme.
ESOS
For the share options outstanding at 30 June 2022 the weighted average remaining contractual life is 8.0 years (30 June 2021:
8.1 years). The exercise price of the options outstanding ranges between 79 pence and 226 pence. 30,000 share options are
exercisable at 30 June 2022 (30 June 2021: 40,000).
LTIP
The October 2019 LTIP awards are expected to vest in October 2022.
Fair value of awards
The Black-Scholes option pricing model has been used to calculate the fair value of the options and the amount to be expensed in
the statement of comprehensive income. The fair values of awards granted in the year, together with the assumptions used in the
option pricing model are as follows:
ESOS
LTIP
2022
226p
226p
30%
3
1.0%
4.3%
33p
2021
79p
79p
30%
3
1.0%
2.5%
14p
2022
226p
nil
30%
3
1.0%
4.3%
211p
2021
79p
nil
30%
3
1.0%
2.5%
73p
Share price at grant date
Exercise price
Expected volatility
Expected life (years)
Risk free rate
Dividend yield at date of grant
Fair value per option
110
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
26 Share based payments continued
Fair value of awards continued
The expected volatility is based on historical volatility over the last three years. The risk free rate of return is based on the yield on
government bonds due to mature on the expected maturity of the award.
The net charge recognised for share based payments in respect of employee services rendered during the year to 30 June 2022
was £118,000 (2020/21: £397,000). Of this, £98,000 (2020/21: £383,000) is in respect of key management personnel, which are the
Directors of The Alumasc Group plc.
27 Movement in borrowings
At 1 July 2020
Cash flow movements
Non-cash movements
Effect of foreign exchange rates
At 1 July 2021
Cash flow movements
Non-cash movements
Effect of foreign exchange rates
At 30 June 2022
Cash at
bank/bank
overdrafts
£’000
15,576
(10,531)
–
(46)
4,999
3,124
–
161
Bank
loans
£’000
Net bank
(debt)/cash
£’000
Lease
liabilities
£’000
Total
borrowings
£’000
(19,909)
14,000
(27)
–
(5,936)
(7,000)
(64)
–
(4,333)
3,469
(27)
(46)
(937)
(3,876)
(64)
161
(5,924)
(10,257)
692
(374)
–
(5,606)
713
(239)
–
4,161
(401)
(46)
(6,543)
(3,163)
(303)
161
8,284
(13,000)
(4,716)
(5,132)
(9,848)
28 Financial commitments
(i) Capital commitments
At 30 June 2022 £121,000 (2021: £421,000) of capital expenditure had been authorised but not contracted, and no capital
expenditure had been authorised and contracted but not provided for by the Group (2021: £nil).
(ii) Lease commitments
The Group has entered into commercial leases which predominantly relate to certain properties within the Group. The Group also
leases a small number of motor vehicles and items of plant and equipment. The leases have varying terms and renewal rights.
29 Related party disclosure
The Group’s principal actively trading subsidiaries at 30 June 2022 are listed below:
Principal subsidiaries
Principal activity
Country of incorporation
Alumasc Building Products Limited
Building products
Levolux Limited
Building products
England
England
A full list of the Group’s subsidiaries is shown on page 132.
% of equity interest and
votes held
2022
100
100
2021
100
100
Terms and conditions of transactions with related parties
Sales to and purchases from related parties are made at arms-length market prices. Outstanding balances at the year end are
unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables.
Transactions with other related parties
Key management personnel are determined as the Directors of The Alumasc Group plc. Details of transactions with the Directors
and their compensation are detailed in the Directors’ Remuneration Report on pages 64 to 72.
30 Contingent liabilities
At the balance sheet date there existed contingent liabilities amounting to £533,000 (2021: £529,000) in relation to outstanding
Guarantees and £129,000 (2021: £197,000) in relation to outstanding Performance Bonds.
The Alumasc Group plc Report and Accounts 2022
111
Financial statements
Company Statement of Financial Position
At 30 June 2022
Notes
2022
£’000
2021
£’000
Assets
Non-current assets
Property, plant & equipment – owned assets
Property, plant & equipment – right-of-use assets
Investments in Group companies
Deferred tax assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Non-current liabilities
Interest bearing loans and borrowings
Lease liability
Amounts due to subsidiary undertakings
Employee benefits payable
Provisions
Deferred tax liabilities
Current liabilities
Lease liability
Trade and other payables
Derivative financial liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Capital reserve – own shares
Profit and loss account reserve
Total equity
5
5
6
9
7
19
442
456
55,571
222
56,691
805
2,627
3,432
60,123
10, 19
(13,000)
(473)
(9,823)
(110)
(196)
(24)
507
468
69,994
401
71,370
393
875
1,268
72,638
(5,936)
(476)
(20,266)
(246)
(250)
(34)
(23,626)
(27,208)
(3)
(1,436)
–
(3)
(1,587)
–
(1,439)
(1,590)
(25,065)
(28,798)
35,058
43,840
4,517
445
(601)
30,697
35,058
4,517
445
(406)
39,284
43,840
11
20
13
14
9
11
8
12
15
16
16
16
As permitted by Section 408 of the Companies Act 2006, the Company profit and loss account is not presented. The loss for the
year after tax was £4,798,000 (2021: £5,423,000 profit). The financial statements were approved by the Board of Directors and
authorised for issue on 6 September 2022.
Paul Hooper
Director
6 September 2022
Company number 1767387
Simon Dray
Director
112
The Alumasc Group plc Report and Accounts 2022
Company Statement of Cash Flows
For the year ended 30 June 2022
Strategic report
Governance
Financial statements
Operating activities
Operating profit
Adjustments for:
Depreciation
(Increase)/decrease in receivables
Decrease in trade and other payables
Movement in provisions
Cash contributions to retirement benefit schemes
Share based payments
Net cash inflow from operating activities
Investing activities
Purchase of property, plant and equipment
Net cash outflow from investing activities
Financing activities
Bank interest paid
Equity dividends paid
Draw down/(repayment) of amounts borrowed
(Repayment)/draw down of amounts borrowed from subsidiaries
Refinancing costs
Purchase of own shares
Payment of lease liabilities
Net cash outflow from financing activities
Net increase/(decrease) in cash at bank and bank overdraft
Net cash at bank and bank overdraft brought forward
Net increase/(decrease) in cash at bank and bank overdraft
Net cash at bank and bank overdraft carried forward
Notes
2021/22
£’000
2020/21
£’000
9,195
5,612
82
(412)
(170)
(54)
(141)
118
91
76
(494)
150
(143)
397
8,618
5,689
(5)
(5)
(157)
(3,434)
7,000
(9,724)
–
(526)
(20)
(6,861)
1,752
875
1,752
2,627
–
–
(186)
(1,878)
(14,000)
5,438
(65)
–
(20)
(10,711)
(5,022)
5,897
(5,022)
875
5
13
4
19
19
19
The Alumasc Group plc Report and Accounts 2022
113
Financial statements
Company Statement of Changes in Equity
For the year ended 30 June 2022
At 1 July 2020
Profit for the period
Net loss on cash flow hedges
Tax on derivative financial liability
Actuarial gain on defined benefit pensions, net of tax
Dividends
Share based payments
Own shares used to satisfy exercise of share awards
Tax on share options
Exercise of share based incentives
At 1 July 2021
Loss for the period
Actuarial loss on defined benefit pensions, net of tax
Dividends
Share based payments
Acquisition of own shares
Own shares used to satisfy exercise of share awards
Tax on share options
Exercise of share based incentives
At 30 June 2022
Share
capital
£’000
Share
premium
£’000
Capital
reserve
– own
shares
£’000
Hedging
reserve
£’000
Profit
and loss
account
reserve
£’000
Total
equity
£’000
4,517
445
(416)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
10
–
–
4,517
445
(406)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(597)
402
–
–
4,517
445
(601)
9
–
(11)
2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
34,543
39,098
5,423
5,423
–
–
572
(11)
2
572
(1,878)
(1,878)
397
–
237
(10)
397
10
237
(10)
39,284
43,840
(4,798)
(4,798)
(2)
(2)
(3,434)
(3,434)
118
–
–
(140)
(331)
118
(597)
402
(140)
(331)
30,697
35,058
114
The Alumasc Group plc Report and Accounts 2022
Notes to the Company Financial Statements
For the year ended 30 June 2022
Strategic report
Governance
Financial statements
1 Basis of preparation
The Alumasc Group plc is incorporated and domiciled in England and Wales. The Company’s ordinary shares are traded on the
Alternative Investment Market (“AIM”).
The Company financial statements have been prepared and approved by the Directors in accordance with UK adopted
international accounting standards.
The financial statements are prepared on the historical cost basis except for derivative financial instruments and equity settled
share based payments which are stated at their fair value.
The financial statements are prepared on a consistent basis with The Alumasc Group plc consolidated financial statements.
Going concern
As the Company acts as a holding Company for the Group’s investments, its results and cashflows are based on the performance
of the Group’s operating companies. The Company is the principal of the Alumasc Group’s overall borrowing facilities and treasury
operations are managed on a centralised basis throughout the Group. The Company’s borrowings are subject to cross-guarantees
and offset arrangements with positive cash balances elsewhere in the Group.
The Group’s Going Concern assessment, which also takes account of the uncertainties caused by Covid-19, is detailed on page 85.
The Group’s business activities, together with the factors likely to affect its future development, performance and position, are set
out in the Strategic Report on pages 1 to 51. The financial position of the Group, its cash flows and liquidity position are set out in
these financial statements. Details of the Group’s borrowing facilities are described within note 10.
On 25 August 2022 the Group entered into a £25.0 million committed revolving credit facility which expires in August 2025 and two
further single year extension periods to August 2026 and August 2027. The Group has the option to cancel and repay elements
of the committed facility at short notice should it wish to do so. The extension periods are subject to request by the Group and
acceptance by the lender. In addition, the Group has overdraft facilities totalling £4.0 million. At 30 June 2022 the Group’s net debt
was £4.7 million (2021: £0.9 million).
On the basis of the Group’s financing facilities and current operating and financial plans and sensitivity analyses, the Board is
satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and accordingly
continues to adopt the going concern basis in preparing the financial statements.
2 Summary of significant accounting policies
The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these
financial statements.
The following new standards, amendments and interpretations are effective for the period beginning on or after 1 July 2022 and
have been adopted for the Company financial statements where appropriate:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
• Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
• Amendments to IAS 1: Classification of Liabilities as Current or Non-current.
Judgements and estimates
The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of
assets and liabilities within the next financial year are the measurement and valuation of defined benefit pension obligations and
the valuation of the Company’s investments in subsidiaries.
Measurement of defined benefit pension obligations requires estimation of future changes in inflation, mortality rates and the
selection of a suitable discount rate (see note 13).
The valuation of the Company’s investments is reviewed where impairment indicators are identified with key assumptions and
estimates being applied by management in assessing whether any impairment is required. See note 6 for further details.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. Cost
comprises the aggregate amount paid and the fair value of any other consideration given to acquire the asset and includes costs
directly attributable to making the asset capable of operating as intended.
Under IFRS transitional provisions, the Company elected to bring in previous valuations of freehold and long leasehold land and
buildings at a valuation frozen under FRS 15, and these amounts are carried forward at deemed cost.
Freehold land is not depreciated.
The Alumasc Group plc Report and Accounts 2022
115
Financial statements
Notes to the Company Financial Statements continued
For the year ended 30 June 2022
2 Summary of significant accounting policies continued
Property, plant and equipment continued
The cost of other property, plant and equipment is written off by equal monthly instalments over their estimated useful lives as follows:
Right-of-use assets
Freehold buildings
Long leasehold property – over the period of the lease
Plant and equipment
– over the period of the lease
– 25 to 50 years
– 3 to 15 years
Where parts of an item of property, plant and equipment have different useful lives, each part is accounted for as a separate item.
Useful lives and residual values are reviewed annually and where adjustments are required these are made prospectively.
Impairment of fixed assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable
amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell, and its value
in use. It is determined for each individual asset, unless the asset does not generate cash inflows that are largely independent of
those from other assets or Groups of assets.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment
losses of continuing operations are recognised in the statement of comprehensive income in those expense categories consistent
with the function of the impaired asset.
Leases
(i) Identification of a lease
At inception of a contact the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset the Company assesses whether:
• the contract involves the sole use of a specific identified asset – this may be specified explicitly or implicitly, and should be
physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified;
• the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of
use; and
• the Company has the right to direct the use of the asset.
This policy is applied to contracts entered into, or amended, on or after 1 July 2019 as the Company has opted to apply the
practical expedient to ‘grandfather’ the assessment of which contracts are, or contain, leases.
(ii) As a lessee
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are
determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental
borrowing rate. The Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise fixed payments. The Company does not make other
types of payment referred to in IFRS 16 for its leases.
Generally the lease liability represents the present value of contractual future lease payments including optional renewal periods
where the Group is reasonably certain to exercise the extension option. The Company does not typically enter into purchase
options or variable lease payments.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount
expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a
purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use
asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
116
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
2 Summary of significant accounting policies continued
Leases continued
(ii) As a lessee continued
The Company presents right-of-use assets that do not meet the definition of investment property in ‘Property, plant and
equipment’ and discloses the corresponding lease liability in the statement of financial position.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of
12 months or less, and leases of low-value assets, which it defines as having a purchase cost of £5,000. The Company recognises
the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
(iii) As a lessor
IFRS 16 lessor accounting requirements remain similar to requirements under IAS 17 with the change in accounting standard having
no impact on the Company’s financial statements. When the Company acts as a lessor, it determines at lease inception whether
each lease is a finance lease or an operating lease.
To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and
rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an
operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major
part of the economic life of the asset.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses
the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the
underlying asset. If a head lease is a short-term lease to which the Company applies an exemption under IFRS 16 then it classifies
the sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, the Company applies IFRS 15 to allocate the consideration in the
contract.
The accounting policies applicable to the Company as a lessor in the comparative period were not different from IFRS 16.
However, when the Company was an intermediate lessor the sub-leases were classified with reference to the underlying asset.
Financial assets
When financial assets are recognised initially under IFRS 9, they are measured at fair value, being the transaction price plus directly
attributable transaction costs.
Pension costs
The Company operates a defined benefit pension scheme, which is constituted as a separately administered fund and which is
closed to future accrual. Deficit reduction contributions are agreed with the pension trustees on the basis of actuarial advice to
fund this scheme. The Company also operates a defined contribution scheme where agreed contractual contributions are paid
into a separately administered fund.
(i) Defined benefit pensions
Prior to the closure of the defined benefit scheme to future benefit accrual, the cost of providing benefits under the defined benefit
plan was determined using the projected unit credit method, which attributes entitlement to benefits to the current period (to
determine current service cost) and is based on actuarial advice.
The Company determines finance income/expense for the period relating to the defined benefit pension scheme by applying the
discount rate used for valuing the scheme’s liabilities to the value of the net pension liability at the beginning of the year.
The net pension scheme finance costs are charged to finance costs within the statement of comprehensive income.
Actuarial gains and losses are recognised in full in the statement of comprehensive income. These comprise, for scheme assets,
the difference between the expected and actual return on assets, and, for scheme liabilities, the difference between the actuarial
assumptions and actual experience, and the effect of changes in actuarial assumptions.
The defined benefit pension asset or liability in the statement of financial position comprises the total of the present value of the
defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets from
which the obligations are to be settled directly. Fair value is based on market price information and in the case of quoted securities
is the published bid price. The value of a net pension benefit asset is restricted to the sum of any unrecognised past service costs
and the present value of any amount the Company expects to recover by way of refunds from the plan or reductions in the
future contributions.
(ii) Defined contribution pensions
The pension cost charge to the statement of comprehensive income of the Company’s defined contribution scheme represents the
contributions payable by the Company to the fund. The assets of the scheme are held separately from those of the Company in an
independently administered fund.
The Alumasc Group plc Report and Accounts 2022
117
Financial statements
Notes to the Company Financial Statements continued
For the year ended 30 June 2022
2 Summary of significant accounting policies continued
Income taxes
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities,
based on tax rates and laws that are enacted or substantively enacted by the statement of financial position date.
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, with the following exceptions:
• where the temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
•
in respect of taxable temporary differences associated with investments in subsidiaries and associates, where the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future; and
• deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when
the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the statement of
financial position date.
Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income
tax is recognised in the statement of comprehensive income.
Foreign currencies
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the
transactions. Exchange differences resulting from the settlement of such transactions and from the translation at exchange rates
ruling at the year end date of monetary assets and liabilities denominated in currencies other than the functional currency are
recognised in the income statement.
Own shares
The Alumasc Group plc shares held by the Company are classified in shareholders’ equity as ‘own shares’ and are recognised at
cost. Consideration received for the sale of such shares is also recognised in equity, with any difference between the proceeds from
sale and the original cost being taken to reserves. No gain or loss is recognised in the performance statements on the purchase,
sale, issue or cancellation of equity shares.
A Trust holds the shares in its name and shares are awarded to employees on request by the Company. The Company controls and
bears the expenses of the Trust.
Equity settled share based payment transactions
The fair value of long term incentive awards and share options granted to employees is recognised as an employee expense from
the date of grant, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to
the awards. The amount recognised as an expense is adjusted to reflect the actual number of shares for which the related service
and non-market vesting conditions are met.
Investment in subsidiaries
Investments in subsidiaries are stated at cost, less provisions for impairment where appropriate.
Derivative financial instruments and hedging
The Company uses derivative financial instruments to hedge its, and the Group’s exposure to interest rate and foreign exchange risk.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently re-measured at fair value. The gain or loss on re-measurement to fair value is recognised immediately in the
statement of comprehensive income. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or
loss depends on the nature of the item being hedged.
The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar
maturity profiles.
For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented
at its inception. This documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk being
hedged and how effectiveness will be measured throughout its duration. Such items are expected at inception to be highly effective.
For the purpose of hedge accounting, the hedges used by the Company are classified as cash flow hedges, as they hedge
exposure to variability in cash flows that are attributable to a particular risk associated with a recognised asset or liability or a
highly probable forecast transaction.
118
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
2 Summary of significant accounting policies continued
Derivative financial instruments and hedging continued
The portion of the gain or loss on a cash flow hedge that is determined to be an effective hedge is initially recognised directly in
equity, while the ineffective portion is recognised in the statement of comprehensive income.
Amounts taken to equity are transferred to the income statement at the time when the underlying transaction being hedged
affects profit or loss, such as when the forecast sale or purchase of the hedged item occurs. Where the hedged item is the cost of a
non-financial asset or liability, the amounts taken to equity are transferred to the initial carrying amount of the non-financial asset
or liability. If the forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to the
statement of comprehensive income.
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge
is revoked, amounts previously recognised in equity remain in equity until the forecast transaction being hedged occurs and are
transferred to the income statement or to the initial carrying amount of a non-financial asset or liability as above. If the related
transaction is not expected to occur, the amount is taken to the statement of comprehensive income.
Any gains or losses arising from changes in the fair value of derivatives that do not qualify for hedge accounting are taken to the
statement of comprehensive income.
Trade and other receivables
Trade receivables are recognised and carried at the lower of their original invoiced value and recoverable amount. Provision is
made when there is objective evidence that the Company will not be able to recover balances in full.
Cash and cash equivalents
Cash and cash equivalents in the statement of cash flows comprise cash at bank and in hand, and short-term deposits with an
original maturity of three months or less, net of bank overdrafts.
Interest bearing loans and borrowings
All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. After initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Gains
and losses arising on the repurchase, settlement or cancellation of liabilities are recognised respectively in finance revenue and
finance costs. Borrowing costs are recognised as an expense over the period to maturity of the underlying instrument.
Provisions
A provision is recognised when the Company has a legal or constructive obligation as a result of a past event and it is probable
that an outflow of economic benefits will be required to settle the obligation. Where the Company expects some or all of a
provision to be reimbursed, for example under an insurance policy, the reimbursement is recognised as a separate asset but only
when recovery is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net
of any reimbursement.
New standards and interpretations not applied
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are
effective in future accounting periods that the Company has decided not to adopt early. The following amendments are effective
for the period beginning 1 July 2022:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
• Classification of Liabilities as Current or Non-current (Amendments to IAS 1);
• Definition of Accounting Estimates (Amendments to IAS 8); and
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
3 Expenses by nature
The following item has been charged in arriving at operating profit:
Auditor’s remuneration – audit of the financial statements of the Company
2021/22
£’000
18
2020/21
£’000
18
The Alumasc Group plc Report and Accounts 2022
119
Financial statements
Notes to the Company Financial Statements continued
For the year ended 30 June 2022
4 Dividends
Interim dividend for 2022 of 3.35p paid on 6 April 2022
Final dividend for 2021 of 6.25p paid on 29 October 2021
Interim dividend for 2021 of 3.25p paid on 6 April 2021
Final dividend for 2020 of 2.0p paid on 30 October 2020
2021/22
£’000
1,201
2,233
–
–
3,434
2020/21
£’000
–
–
1,163
715
1,878
A final dividend of 6.65 pence per equity share, at a cash cost of £2,381,000, has been proposed for the year ended 30 June 2022,
payable on 4 November 2022. In accordance with IFRS accounting requirements this dividend has not been accrued in these
consolidated financial statements.
5 Property, plant and equipment
Cost:
At 1 July 2020
Disposals
At 30 June 2021
Additions
Disposals
At 30 June 2022
Depreciation:
At 1 July 2020
Charge for the year
At 1 July 2021
Charge for the year
Disposals
At 30 June 2022
Net book value:
At 30 June 2022
At 30 June 2021
At 1 July 2020
Right-of-use
asset (property)
£’000
Freehold land
and buildings
£’000
Long leasehold
property
£’000
Plant and
equipment
£’000
485
–
485
–
–
485
8
9
17
12
–
29
456
468
477
749
–
749
–
–
749
322
11
333
8
–
341
408
416
427
235
–
235
–
–
235
235
–
235
–
–
235
–
–
–
738
(130)
608
5
(24)
589
446
71
517
62
(24)
555
34
91
292
Total
£’000
2,207
(130)
2,077
5
(24)
2,058
1,011
91
1,102
82
(24)
1,160
898
975
1,196
Included within freehold land and buildings is land of £336,000 (2021: £336,000) which is not depreciated.
120
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
6 Investments in Group companies
Cost:
At 1 July 2020, 1 July 2021 and 30 June 2022
Provisions:
At 1 July 2020
Provided in year
At 30 June 2021
Provided in year
At 30 June 2022
Net book value:
At 30 June 2022
At 1 July 2021
At 1 July 2020
£’000
89,911
19,917
–
19,917
14,423
34,340
55,571
69,994
69,994
At close of business on 30 June 2022 the principal actively trading subsidiary undertakings and related classes of business are
as follows: Alumasc Building Products Limited (building products) and Levolux Limited (building products). During the year the
investment in Levolux Limited was fully written down to £nil to reflect the sale of the business on 26 August 2022.
All subsidiary companies are wholly owned and owned directly or indirectly by The Alumasc Group plc and have a registered office
of Burton Latimer, Kettering, Northamptonshire, NN15 5JP.
7 Trade and other receivables
Other receivables
Prepayments
8 Trade and other payables
Other payables
Other taxation and social security
Accruals
2022
£’000
598
207
805
2022
£’000
671
176
589
1,436
2021
£’000
107
286
393
2021
£’000
622
336
629
1,587
The Alumasc Group plc Report and Accounts 2022
121
Financial statements
Notes to the Company Financial Statements continued
For the year ended 30 June 2022
9 Deferred tax
A reconciliation of the movement in deferred tax during the year is as follows:
At 1 July 2020
(Charged)/credited to the statement
of comprehensive income
(Charged)/credited to equity
At 30 June 2021
(Charged)/credited to the statement
of comprehensive income
(Charged)/credited to equity
At 30 June 2022
Pension
deferred tax
asset
£’000
Short term
temporary
differences
£’000
Hedging
£’000
Share
options
£’000
Total
deferred
tax asset
£’000
Deferred tax
liabilities
£’000
200
(23)
(115)
62
(34)
–
28
16
3
–
19
3
–
22
(2)
–
2
–
–
–
–
–
83
237
320
(8)
(140)
172
214
63
124
401
(39)
(140)
222
(75)
41
–
(34)
10
–
(24)
Deferred tax assets and liabilities are presented as non-current in the statement of financial position. Deferred tax assets have
been recognised where it is probable that they will be recovered. Deferred tax liabilities relate to accelerated capital allowances.
10 Borrowings
Non-current liabilities:
Non-current instalments due on bank loan
2022
£’000
2021
£’000
13,000
5,936
At 30 June 2022 the Group had a £20.0 million committed revolving credit facility which had an expiry date of April 2023. On
25 August 2022 the Group entered into a £25.0 million committed revolving credit facility which expires in August 2025 and two
further single year extension periods to August 2026 and August 2027. The Group has the option to cancel and repay elements
of the committed facility at short notice should it wish to do so. The extension periods are subject to request by the Group and
acceptance by the lender.
The following financial covenants apply to the new facility: Group interest cover, based on underlying EBITDA (i.e. from continuing
operations and before non-recurring items), to be at least three and a half times; and net bank debt as a multiple of underlying
EBITDA (i.e. from continuing operations and before non-recurring items) to be below two and a half times, with an acquisition spike
to be below two and three quarter times.
At 30 June 2022 the Company and Group also had £4.0 million (2021: £4.0 million) of bank overdraft facilities, renewed until August
2023 and repayable on demand. The Group has an offset arrangement in place against uncommitted overdraft facilities.
11 Lease liabilities
Non-current lease liabilities
Current lease liabilities
Total lease liabilities
2022
£’000
473
3
476
2021
£’000
476
3
479
Lease liabilities are initially measured at the present value of future lease payments, discounted using the Company’s incremental
borrowing rate.
122
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
12 Financial instruments
Financial assets and liabilities
Set out below is a comparison by category of carrying amounts and fair values of all the Company’s financial assets and liabilities:
Financial assets:
Trade and other receivables
Cash at bank
Financial liabilities:
Bank loans
Lease liabilities
Trade, intercompany and other payables
30 June 2022
30 June 2021
Carrying
amount
£’000
Fair value
£’000
Carrying
amount
£’000
Fair value
£’000
598
2,627
3,225
13,000
476
11,881
25,357
598
2,627
3,225
13,000
476
11,881
25,357
107
875
982
5,936
479
21,853
28,268
107
875
982
5,936
479
21,853
28,268
Derivative financial assets and liabilities are carried at fair value as a designated hedge instrument. The other financial assets and
liabilities are measured at amortised cost.
Trade and other receivables exclude prepayments and accrued income, which do not meet the definition of a financial asset.
Market values have been used to determine the fair value of bank borrowings. The fair value of forward foreign exchange
contracts has been determined by marking those contracts to market against prevailing forward foreign exchange rates.
The table below summarises the maturity profile of the Company’s financial liabilities at 30 June 2022 and 2021 based on
contractual undiscounted payments. The total interest bearing loans and borrowings value in the table below includes future
unaccrued interest, whilst the bank overdraft and loans balance in the table above shows only the carrying amount at the year
end date.
At 30 June 2022
Interest bearing loans and borrowings
Lease liabilities
Trade, intercompany and other payables
At 30 June 2021
Interest bearing loans and borrowings
Lease liabilities
Trade, intercompany and other payables
On demand
£’000
Less than
3 months
£’000
3 to 12
months
£’000
More than
1 year
£’000
Total
£’000
–
–
–
–
–
–
–
–
–
–
1,123
1,123
79
–
1,074
1,153
–
3
305
308
237
3
434
674
13,000
13,000
473
10,453
23,926
6,237
476
20,345
27,058
476
11,881
25,357
6,553
479
21,853
28,885
The Company’s liquidity risk management is consistent with that of the Group as outlined in the notes to the consolidated financial
statements. The Company’s net debt position at 30 June 2022 was £10.4 million (2021: £5.1 million).
The Company’s overdraft and revolving credit banking facilities are part of the Group’s overall credit facilities and are subject
to cross guarantees from other Group companies. The Group as a whole had net bank debt at 30 June 2022 of £4.7 million
(2021: £0.9 million).
The Alumasc Group plc Report and Accounts 2022
123
Financial statements
Notes to the Company Financial Statements continued
For the year ended 30 June 2022
12 Financial instruments continued
Liquidity risk management
The maturity profile of the Company’s interest bearing financial liabilities is as follows:
Floating rate interest bearing financial liabilities:
In less than one year
In two to five years
2022
£’000
–
13,000
13,000
2021
£’000
–
5,936
5,936
Interest rate risk management
The Company’s interest rate risk management is consistent with that of the Group as outlined in the notes to the consolidated
financial statements.
Credit risk
The Company’s credit risk management is consistent with that of the Group as outlined in the notes to the consolidated
financial statements.
Foreign currency risk
The Group has transactional currency exposures as disclosed within the notes to the consolidated financial statements. The
Company manages this risk, in part, through the use of forward currency contracts. None of the derivative financial instruments
held at 30 June 2022 or 30 June 2021 related to derivative trading activity. Where cash flow hedge accounting is applied, gains or
losses on the financial instrument hedges are held in equity and only recognised in the income statement when the losses or gains
on the hedged transactions are recognised in the income statement.
13 Retirement benefit obligations
Defined contribution schemes
£130,000 (2021: £94,000) was charged to operating profit in the statement of comprehensive income for defined contribution
pension scheme contributions. At 30 June 2022 there was an accrual of £108,000 payable in respect of the defined contribution
scheme (2021: £94,000).
Defined benefit scheme
The Company participates in a defined benefit scheme, The Alumasc Group Pension Scheme, which has been closed to future
accrual since 2010.
The defined benefit scheme maintained by the Company is a part of a plan that shares risks between various Group entities
under common control. In determining the allocation of net defined benefit cost and contributions between the various sponsoring
employers, the Directors have used as a basis the sponsoring employer at the date the scheme was closed to future accrual.
Following the conclusion of the 2022 triennial actuarial review in the 2022/23 financial year, the Company’s deficit reduction
contributions decreased from £124,000 to £66,000 per year, with effect from 1 October 2022.
The principal assumptions used by the actuary in valuing the assets and liabilities of the scheme for IAS 19 purposes were:
Discount rate
Expected rate of deferred pension increases
Future pension increases
Retail Price Index inflation rate
Consumer Price Index inflation rate
Post retirement mortality:
Current pensioners at 65 – male
Current pensioners at 65 – female
Future pensioners at 65 in 2042 – male
Future pensioners at 65 in 2042 – female
124
The Alumasc Group plc Report and Accounts 2022
2022
%
3.75
2.50
2021
%
1.80
2.50
3.05 – 3.60
3.10 – 3.65
3.15
2.50
Years
21.5
23.5
22.8
24.9
3.20
2.50
Years
21.5
23.4
22.8
24.9
Strategic report
Governance
Financial statements
13 Retirement benefit obligations continued
Defined benefit scheme continued
A discount rate of 3.75% has been used in calculating the present value of liabilities of the pension scheme at 30 June 2022.
A 0.1% change to this rate would have changed the present value of the pension fund liabilities at that date by approximately
£48,000 before tax.
A Retail Price Index inflation rate of 3.15% and a Consumer Price Index inflation rate of 2.50% have been used in calculating the
present value of liabilities of the pension scheme at 30 June 2022. A 0.1% change to these rates would have changed the present
value of the pension fund liabilities at that date by approximately £17,000 before tax.
In valuing the liabilities of the pension scheme at 30 June 2022, mortality assumptions have been assumed as indicated above.
If life expectancy had been changed to assume that all members of the scheme live for one year longer on average, the value
of the reported liabilities at 30 June 2022 would have increased by approximately £194,000 before tax.
The following information relates to the Company’s element of the assets and liabilities of the scheme.
The combined assets and liabilities of the scheme at 30 June are:
Equities
Gilts
Liability Driven Investment Funds
Bonds and insured annuities
Multi-asset fund
Property and cash
Total market value of assets
Actuarial value of liability
2022
£’000
1,318
–
458
758
827
452
3,813
(3,923)
2021
£’000
2,344
–
661
602
1,071
533
5,211
(5,457)
2020
£’000
2,012
–
815
598
891
391
4,707
(5,761)
2019
£’000
1,982
–
731
564
889
376
4,542
(5,249)
2018
£’000
1,730
620
–
503
1,024
332
4,209
(5,052)
Defined benefit pension deficit
(110)
(246)
(1,054)
(707)
(843)
Of the above assets, all have a quoted market price with the exception of £52,000 of insured annuities (2020/21: £69,000) and
£37,000 of property (2020/21: £41,000).
The whole of the defined benefit pension deficit is shown as a non-current liability.
Amounts recognised in the statement of comprehensive income in respect of the defined benefit pension plan, before taxation, are
as follows:
Included in net operating expenses:
Past service pension cost – Guaranteed minimum pension equalisation
Included in net finance costs:
Net pension scheme finance costs
Included in other comprehensive income:
Actuarial (loss)/gain on plan assets
Actuarial gain on retirement benefit obligations
Total recognised in the statement of comprehensive income
The actual return on plan assets for 2021/22 was a loss of £1,251,000 (2020/21: gain of £635,000).
2021/22
£’000
2020/21
£’000
–
(3)
(1,361)
1,359
(2)
(5)
(8)
(14)
553
134
687
665
The Alumasc Group plc Report and Accounts 2022
125
Financial statements
Notes to the Company Financial Statements continued
For the year ended 30 June 2022
13 Retirement benefit obligations continued
Defined benefit scheme continued
Changes in the present value of the defined benefit obligation before taxation are as follows:
At 1 July
Interest cost
Past service pension cost – Guaranteed minimum pension equalisation
Benefits paid
Actuarial gain
At 30 June
Changes in the fair value of plan assets before taxation are as follows:
At 1 July
Expected return on plan assets
Actuarial (loss)/gain
Contributions by employer
Benefits paid
At 30 June
2022
£’000
(5,457)
(113)
–
288
1,359
(3,923)
2022
£’000
5,211
110
(1,361)
141
(288)
3,813
2021
£’000
(5,761)
(96)
(8)
274
134
(5,457)
2021
£’000
4,707
82
553
143
(274)
5,211
The cumulative amount of net actuarial losses recognised in the statement of comprehensive income is £734,000 (2020/21: losses
of £732,000).
14 Provisions
At 1 July 2020
Charged
At 30 June 2021
Utilised
At 30 June 2022
£’000
100
150
250
(54)
196
The Company has provided £196,000 (2021: £250,000) in relation to the anticipated cost of dilapidations and required restoration
to its leasehold properties.
15 Share capital
Allotted, called up and fully paid:
36,133,558 (2021: 36,133,558) ordinary shares of 12.5p each
2022
£’000
4,517
2021
£’000
4,517
16 Movements in equity
Share capital and share premium
The balances classified as share capital and share premium are the proceeds of the nominal value and premium value respectively
on issue of the Company’s equity share capital net of issue costs.
Capital reserve – own shares
The capital reserve – own shares relates to 327,493 (2021: 360,017) ordinary own shares held by the Company. The market value of
shares at 30 June 2022 was £519,076 (2021: £954,045). These are held to help satisfy the exercise of awards under the Company’s
Long Term Incentive Plans. During the year 297,021 (2021: 9,228) shares with an original cost of £402,000 (2021: £10,000) were used
to satisfy the exercise of awards. A Trust holds the shares in its name and shares are awarded to employees on request by the
Group. The Group bears the expenses of the Trust.
126
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
16 Movements in equity continued
Hedging reserve
This reserve records the post-tax portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be
an effective hedge.
Distributable reserves
The Company’s profit and loss account reserve shown on the balance sheet is £30,697,000 (2021: £39,284,000).
Cumulative actuarial losses relating to defined benefit pension schemes of £734,000 (2021: losses of £732,000) have been
deducted in calculating the distributable reserves figure above.
17 Share based payments
The Company operates two types of share based payment schemes, the main features of each scheme as detailed in the
Directors’ Remuneration Report on pages 64 to 72.
Weighted
average
exercise
price
Weighted
average
exercise
price
(pence) Granted
(pence) Exercised
Weighted
average
exercise
price
(pence)
Weighted
average
exercise
price
(pence)
As at
30 June
2022
Lapsed
n/a
1.01
128,361
20,000
n/a
(146,410)
–
(72,668)
n/a
503,968
2.26
(20,000)
1.29
–
–
70,000
Weighted
average
exercise
price
Weighted
average
exercise
price
(pence) Granted
(pence) Exercised
Weighted
average
exercise
price
(pence)
n/a
1.21
156,529
20,000
n/a
0.79
–
–
–
–
Weighted
average
exercise
price
(pence)
n/a
1.74
As at
30 June
2021
594,685
70,000
Lapsed
(169,619)
(10,000)
Weighted
average
exercise
price
(pence)
n/a
1.29
Weighted
average
exercise
price
(pence)
n/a
1.01
As at
1 July
2021
594,685
70,000
As at
1 July
2020
607,775
60,000
LTIP(i)
ESOS(ii)
LTIP(i)
ESOS(ii)
(i) Long term incentive plan.
(ii) Executive share option scheme.
ESOS
For the share options outstanding at 30 June 2022 the weighted average remaining contractual life is 8.0 years (30 June 2021:
6.9 years). The exercise price of the options outstanding ranges between 79 pence and 226 pence. 10,000 share options are
exercisable at 30 June 2022 (30 June 2021: 20,000).
LTIP
The October 2019 LTIP awards are expected to vest in October 2022.
Fair value of awards
The Black-Scholes option pricing model has been used to calculate the fair value of the options and the amount to be expensed
in the income statement. The fair values of awards granted in the year, together with the assumptions used in the option pricing
model are as follows:
Share price at grant date
Exercise price
Expected volatility
Expected life (years)
Risk free rate
Dividend yield at date of grant
Fair value per option
ESOS
LTIP
2022
226p
226p
30%
3
1.0%
4.3%
33p
2021
79p
79p
30%
3
1.0%
2.5%
14p
2022
226p
nil
30%
3
1.0%
4.3%
211p
2021
79p
nil
30%
3
1.0%
2.5%
73p
The expected volatility is based on historical volatility over the last three years. The risk free rate of return is based on the yield on
government bonds due to mature on the expected maturity date of the award.
The net charge recognised for share based payments in respect of employee services rendered during the year to 30 June 2022 is
£118,000 (2020/21: £397,000).
The Alumasc Group plc Report and Accounts 2022
127
Financial statements
Notes to the Company Financial Statements continued
For the year ended 30 June 2022
18 Financial commitments
(i) Capital commitments
The Company had no capital commitments at the year end (2021: £nil).
(ii) Lease commitments
The Company has entered into commercial leases on certain properties and items of plant and equipment. The leases have
varying terms and renewal rights.
The total future minimum sub-lease receipts under non-cancellable leases where the Company acts as a lessor are as follows:
Less than one year
Between one and five years
After five years
19 Movement in borrowings
At 1 July 2020
Cash flow movements
Non-cash movements
At 1 July 2021
Cash flow movements
Non-cash movements
At 30 June 2022
Property
2022
£’000
Property
2021
£’000
40
160
400
600
40
160
440
640
Bank
overdrafts
/cash
£’000
5,897
(5,022)
–
875
1,752
–
2,627
Bank
loans
£’000
(19,909)
14,000
(27)
(5,936)
(7,000)
(64)
Net bank
(debt)/cash
£’000
Lease
liabilities
£’000
Total
borrowings
£’000
(14,012)
8,978
(27)
(5,061)
(5,248)
(64)
(482)
3
–
(479)
3
–
(14,494)
8,981
(27)
(5,540)
(5,245)
(64)
(13,000)
(10,373)
(476)
(10,849)
The Company is part of a Group offset banking arrangement, together with its subsidiary undertakings.
20 Related party disclosure
Terms and conditions of transactions with related parties
A full list of the Company’s subsidiaries is shown on page 132.
The total non-current position with regards to amounts owed to subsidiary undertakings at 30 June 2022 was a £9,823,000 liability
(2021: £20,266,000 liability).
Amounts owed to subsidiary undertakings have no fixed repayment date and accrue interest at a rate equivalent to the Alumasc
Group’s effective rate of interest. The Directors believe that in substance these amounts are non-current.
Transactions with other related parties
Key management personnel are determined as the Directors of The Alumasc Group plc. Details of transactions with the Directors
and their compensation are detailed in the Directors’ Remuneration Report on pages 64 to 72.
21 Contingent liabilities
The Company is party to, together with subsidiary undertakings, cross guarantee banking arrangements in favour of the Group’s
relationship banks. At the year end, subsidiary undertakings had utilised none (2020: none) of the overdraft facilities guaranteed
by the Company.
128
The Alumasc Group plc Report and Accounts 2022
Financial Summary
Strategic report
Governance
Financial statements
Income Statement Summary
Continuing operations:
Revenue
Gross profit
Gross margin
Underlying operating profit
Underlying operating margin
Net interest cost on borrowings
Interest on lease liabilities
2015/16
£’000
2016/17
£’000
2017/18
£’000
2018/19
£’000
2019/20
£’000
2020/21
£’000
2021/22
£’000
55,646
63,969
65,091
71,315
60,299
77,805
89,381
21,629
38.9%
6,056
10.9%
(215)
–
22,880
35.8%
6,714
10.5%
22,353
34.3%
5,438
8.4%
24,184
33.9%
6,973
9.8%
20,432
33.9%
5,053
8.4%
29,441
33,366
37.8%
37.3%
10,506
13,333
13.5%
14.9%
(132)
–
(212)
–
(281)
–
(343)
(153)
(311)
(178)
(439)
(169)
Underlying profit before tax
5,841
6,582
5,226
6,692
4,557
10,017
12,725
Non-underlying items*
Profit before taxation
Taxation
Profit for the year from continuing operations
Discontinued operations - Profit/(loss) after tax
Profit/(loss) for the year
Underlying earnings per share from continuing
operations (pence)
Basic earnings per share (pence)
Dividends per share (pence)
Balance Sheet Summary at 30 June
Shareholders’ funds
Net debt/(cash)
Lease liabilities
Pension deficit (net of tax)
Discontinued operations
(1,334)
4,507
(1,319)
3,188
3,296
6,484
13.0
18.2
6.5
(720)
5,862
(1,492)
4,370
2,170
6,540
14.7
18.3
7.15
(914)
(4,431)
4,312
2,261
(967)
(256)
3,345
2,005
972
4,317
1,636
3,641
11.6
12.0
7.35
14.8
10.1
7.35
(1,138)
3,419
(442)
2,977
(721)
2,256
10.2
6.3
2.0
(546)
9,471
(694)
12,031
(2,118)
(2,421)
7,353
9,610
233
(16,657)
7,586
(7,047)
22.5
21.2
9.5
28.7
(19.7)
10.0
16,580
20,437
(8,632)
(6,076)
–
–
24,421
4,812
–
25,445
5,095
–
19,841
4,333
5,924
18,588
17,095
12,566
10,749
15,608
(479)
(334)
(714)
359
–
36,145
25,732
937
5,606
3,436
–
4,716
5,132
1,585
–
Capital Invested - continuing operations
26,057
31,122
41,085
41,648
45,706
46,124
37,165
Underlying return on capital invested (post-tax)**
17.7%
18.6%
12.0%
13.4%
9.2%
18.4%
25.8%
Underlying tax rate
20.8%
20.6%
20.2%
20.4%
20.3%
19.5%
19.4%
*
Non-underlying items comprise brand amortisation and IAS 19 pension costs in all years. Further details of the 2020/21 and 2021/22 non underlying items can be found in note 5 of
the Report and Accounts 2022.
** Underlying operating profit after tax from continuing operations calculated using the underlying tax rate, as a percentage of average capital invested from continuing operations.
The Alumasc Group plc Report and Accounts 2022
129
Financial statements
Additional Shareholder Information
In accordance with the requirements of the Companies Act 2006 (Act) the following section describes the matters that are required
for inclusion in the Directors’ report. Further details of matters required to be included in the Directors’ report that are incorporated
by reference into this report are set out below.
Directors
The names of the members of the Board as at the date of this report and their biographical details are set out on pages 52 and 53.
Share capital
The issued share capital of the Company and the details of the movements in the Company’s share capital during the year are
shown in Notes 15 and 16 to the financial statements.
The holders of ordinary shares are entitled to receive dividends when declared, to receive the Company’s Annual Report and
Accounts, to attend and speak at general meetings of the Company, and to appoint proxies and exercise voting rights.
Articles of Association
The Articles of Association set out the internal regulation of the Company and cover such matters as the rights of shareholders,
the appointment or removal of Directors and the conduct of the Board and general meetings. Copies are available upon request
from the Group Company Secretary and are available at the Company’s AGM. Further powers are granted by members in general
meeting and those currently in place are set out in detail in the appropriate section of this report.
Directors’ interests
Other than the Directors’ service agreements or letters of appointment, none of the Directors of the Company had a personal
interest in any business transactions of the Company or its subsidiaries. Directors’ interests in shares and share awards of the
Company, in respect of which transactions are notifiable to the Company and the FCA under Article 19 of the Market Abuse
Regulation, are disclosed in the Remuneration Report on pages 68 and 69.
Directors’ powers
The Directors are responsible for the strategic management of the Company and their powers to do so are determined by the
provisions of the Act and the Company’s Articles of Association.
Employee benefit trust
A waiver of dividend exists in respect of 327,495 shares held by the Alumasc Group Employee Share Ownership Trust (Trust) as of
30 June 2022. There are no restrictions on the transfer of ordinary shares in the Company.
The rights attached to shares in the Company are provided by the Articles of Association, which may be amended or replaced by
means of a special resolution of the Company in a general meeting. The Directors’ powers are conferred on them by UK legislation
and by the Company’s Articles of Association.
No ordinary shares carry any special rights about control of the Company and there are no restrictions on voting rights except that
a shareholder has no right to vote in respect of a share unless all sums due in respect of that share are fully paid.
Shares are admitted to trading on the AIM market of London Stock Exchange and may be traded through the CREST system.
Allotment of shares
At the AGM in 2021 the Directors were empowered by the shareholders to allot equity securities, up to 5% of the Company’s issued
share capital, for cash under section 570 of the Act. It is intended that this authority be renewed at the forthcoming AGM.
It is the Board’s intention, in line with guidance issued by the Pre-Emption Group, to also propose the renewal of the additional
special resolution to allow the Company to allot equity securities up to a further 5% of the Company’s issued share capital. This
is applicable when the Board determines a transaction to be an acquisition or other capital investment, as defined by the Pre-
Emption Group’s Statement of Principles and is announced contemporaneously with the allotment or has taken place in the
preceding six-month period and is disclosed in the announcement of the allotment.
Purchase of own shares
Shareholders also approved the authority for the Company to buy-back up to 14.9% of its own ordinary shares by market
purchase until 21 October 2022. The Directors will seek to renew this authority at the forthcoming AGM. This power will only
be exercised if the Directors are satisfied that any purchase will increase the earnings per share of the Group as a result of the
purchase and therefore, that the purchase is in the interests of shareholders. The Directors will also give careful consideration to
the financial position of the Company and its general financial position. Any shares purchased in this
way may be held in treasury which, the Directors believe, will provide the Company with flexibility in the management of its
share capital.
Where treasury shares are used to satisfy share awards, they will be classed as new issue shares for the purpose of the 10% limit on
the number of shares that may be issued over a ten-year period under the relevant share plan rules. The Company currently holds
no shares in treasury.
130
The Alumasc Group plc Report and Accounts 2022
Strategic report
Governance
Financial statements
Significant agreements – change of control
The Group has agreements in place with its relationship banks, which contain certain termination rights that would have an effect
on a change of control. The Directors believe these agreements to be commercially sensitive and consider that its disclosure would
be prejudicial to the Group; accordingly, they do not intend to disclose specific details. In addition, the Group’s share schemes
contain provisions that, in the event of a change of control, would result in outstanding options and awards becoming exercisable,
subject to the rules of the relevant schemes. There are no agreements between the Group and its Directors nor its employees
providing for compensation for loss of office or employment that occurs because of a takeover bid.
The total amount owing under the Group’s credit facilities as at 30 June 2022 is shown in note 19 to the financial statements. These
agreements contain clauses such that, in the event of a change of control, subject to the lender, the Company can offer to or must
repay all such borrowings together with accrued interest, fees and other sums owing as required by the individual agreements.
The rules of the Company’s incentive plans contain clauses relating to a change of control resulting from a takeover and in such
an event awards would vest subject to the satisfaction of any associated performance criteria.
Major shareholders
The Company’s share register recorded the following interests of 3% or more in the Company’s issued ordinary share capital as
at 30 June 2022. This information was also checked on 15 August 2022 being the latest practical date prior to the publication of
this report.
Shareholder
John McCall
AXA Framlington Investment Managers
Mr Philip H R Gwyn
Hargreaves Lansdown
Charles Stanley
Chelverton Asset Management
Unicorn Asset Management
Number of
Ordinary Shares
% of issued
share capital
4,359,668
3,300,000
3,057,605
2,557,845
1,825,088
1,400,000
1,300,000
12.07
9.13
8.46
7.08
5.05
3.87
3.60
Employment
Information about the Group’s employees, employment of disabled persons and employment practices is contained within our
ESG Report (Environmental, Social and Governance), the Section 172 Statement, and the Directors’ report on pages 25 to 45, and
73 to 75.
Greenhouse gas emissions (GHG)
Information about the Group’s Greenhouse Gas emissions is given in the ESG Report on pages 25 to 29.
Annual General Meeting
The Notice of the AGM, to be held on 27 October 2022 is available in this Report and Accounts on pages 135 to 140 and copies are
also available from the Company’s website at www.alumasc.co.uk/investors. The Notice details the business to be conducted at
the meeting and includes information concerning the deadlines for submitting proxy forms and in relation to voting rights.
Statement of disclosure of information to auditors
The Directors who held office at the date of approval of this Directors’ report confirm that, so far as they are aware, there is no
relevant audit information of which the Company’s auditor is unaware and each Director has taken all the steps that they ought
to have taken as a Director of the Company to make themselves aware of any relevant audit information and to establish that the
Company’s auditor is aware of that information.
The Alumasc Group plc Report and Accounts 2022
131
Financial statements
List of Subsidiaries
The Group’s subsidiary undertakings as at 30 June 2022 are shown below. Unless otherwise shown below all subsidiary undertakings
are incorporated in the UK. All subsidiaries are 100% owned. The UK registered offices are located at The Alumasc Group plc
registered address.
Subsidiary
Principal activity Country of incorporation
Alumasc Building Products Limited
Elkington China Limited
Alumasc Limited
Wade International Limited
Alumasc Precision Limited
A G Standard Company Limited
Access Floor Systems Limited
AEBP Walling Limited
AIBP 2 Limited
ALK Limited
Alumasc Exterior Building Products Limited
Alumasc Construction Products Limited
Alumasc D Developments Limited
Alumasc D D Limited
Alumasc-Grundy Limited
Alumasc Holdings Limited
Alumasc Interior Building Products Limited
Apex Gutter & Drainage Limited
Benion Limited
Benjamin Priest Group Limited
Benjamin Priest Limited
Blackdown Horticultural Consultants Ltd
BLK Limited
BLL Limited
Building Products Next Day Ltd
C C Realisations Limited
Cleomack (One) Limited
Cleomack (Three) Limited
Cleomack Limited
Condyle Limited
Copal Casting Limited
D E Limited
Doranda Limited
Drew Street Limited
Elkington Gatic Limited
Engird Limited
Euroroof Limited
Green Roof Solutions Limited
Harmer Holdings Limited
Harvey Reed Top Table Limited
Justcredit Limited
Kett Limited
Powke Limited
Rainclear Systems Limited
Roof-Pro Limited
Sillavan Anodes Limited
Sillavan Industries Limited
Sorrel 009 Limited
Sure-Foot Supports Limited
Technical Building Products Limited
The Green Building Products Company Limited
The Paint Factory Limited
Thermex AFC Limited
Thermex Industries Limited
Timloc Building Products Limited
Wade International (UK) Limited
Wade Drainage Products Limited
Wergs Limited
Yenots Limited
132
The Alumasc Group plc Report and Accounts 2022
UK
Hong Kong
UK
Building products
Building products
Building products
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Business and Operating Locations
Strategic report
Governance
Financial statements
Water Management
Skyline, Alumasc Rainwater & Harmer
Burton Latimer
Station Road
Burton Latimer
Kettering
Northamptonshire NN15 5JP
Tel: +44 (0)1536 383810
Email: info@alumascwms.co.uk
Web: www.alumascwms.co.uk
Rainclear Systems
Unit 34 A
Techno Trading Estate
Ganton Way
Swindon SN2 8ES
Tel: +44 (0)800 644 4426
Email: sales@rainclear.co.uk
Web: www.rainclear.co.uk
Wade & Gatic (Slotdrain)
Third Avenue
Halstead
Essex CO9 2SX
Tel: +44 (0)1787 475151
Email: info@alumascwms.co.uk
Web: www.alumascwms.co.uk
Gatic (Covers)
Hammond House
Poulton Close
Dover
Kent CT17 0UF
Tel: +44 (0)1304 203545
Email: info@alumascwms.co.uk
Web: www.alumascwms.co.uk
Elkington China Ltd
Unit 2, 16/F, Cheung Tat Centre,
18 Cheung Lee Street
Chai Wan
Hong Kong
Tel: +(852) 2305 0100
Email: ecl@biznetvigator.com
Web: www.alumascwms.co.uk
Building Envelope
Waterproofing Systems
Alumasc Roofing
White House Works
Bold Road
St Helens
Merseyside WA9 4JG
Tel: +44 (0)1744 648 400
Email: info@alumascroofing.co.uk
Web: www.alumascroofing.co.uk
Green roofing
Blackdown Greenroofs
3 The Waggon Shed
Flax Drayton Farm
South Petherton
Somerset TA13 5LR
Tel: +44 (0)1460 234582
Email: enquiries@blackdown.co.uk
Web: www.blackdown.co.uk
Rooftop management systems
Roof Pro Systems
Polwell Lane
Off Station Road
Burton Latimer
Kettering
Northants NN15 5PS
Tel: +44 (0)1536 383865
Email: cad@roof-pro.co.uk
Web: www.roof-pro.co.uk
Housebuilding Products
Ventilation products, access panels/doors cavity closers/
dry roof verge products
Timloc Building Products
Timloc House
Ozone Park
Howden
East Riding of Yorkshire DN14 7SD
Tel: +44 (0)1405 765567
Email: sales@timloc.co.uk
Web: www.timloc.co.uk
The Alumasc Group plc Report and Accounts 2022
133
Financial statements
Company Information and Advisers
Registered Office
The Alumasc Group plc
Burton Latimer
Kettering
Northamptonshire
NN15 5JP
Tel: +44 (0)1536 383844
www.alumasc.co.uk
info@alumasc.co.uk
Registered No: 1767387
Company Advisers
Registrars
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Auditors
Crowe U.K. LLP
Black Country House
Rounds Green Road
Oldbury
West Midlands
B69 2DG
Investment Bankers
Rothschild & Co
3 Lombard Street
London
EC3V 9AA
Bankers
HSBC Bank plc
4th Floor
120 Edmund Street
Birmingham
B3 2QZ
Barclays Bank PLC
Ashton House
497 Silbury Boulevard
Milton Keynes
MK9 2LD
Solicitors
Freeths LLP
The Colmore Building
20 Colmore Circus
Queensway
Birmingham
B4 6AT
DLA Piper UK LLP
160 Aldersgate Street
London
EC1A 4HT
Brokers
Peel Hunt LLP
100 Liverpool Street
London
EC2M 1JJ
NOMAD
finnCap
One Bartholomew Close
London
EC1A 7BL
134
The Alumasc Group plc Report and Accounts 2022
Notice of Annual General Meeting
Notice is given that the 2022 Annual General Meeting (AGM) of The Alumasc Group plc (the Company) will be held at Timloc
Building Products, Timloc House, Ozone Park, Howden, East Riding of Yorkshire DN14 7SD at 10am on Thursday 27 October 2022
to consider the following:
Ordinary business
Resolutions 1 to 9 will be proposed as ordinary resolutions.
1 To receive the reports of the Directors and Auditor and the accounts for the year ended 30 June 2022
2 To receive the report of the Remuneration Committee for the year ended 30 June 2022
3 To declare a final dividend of 6.65 pence per share
4 To re-elect Vijay Thakrar as a Director
5 To re-elect Paul Hooper as a Director
6 To re-elect Stephen Beechey as a Director
7 To elect Karen McInerney as a Director
8
To re-appoint Crowe U.K. LLP as Auditor of the Company to hold office until the conclusion of the next Annual General
Meeting of the Company at which accounts are laid before the Company
9 That the Audit Committee be authorised to determine the Auditor’s remuneration
Special business
The following resolution will be proposed as an ordinary resolution.
10 Renewal of Directors’ authorities to allot shares
That the Directors be and are hereby generally and unconditionally authorised in accordance with Section 551 of the
Companies Act 2006 to exercise all the powers of the Company to allot shares in the Company or to grant rights to subscribe
for or to convert any security into shares in the Company up to an aggregate nominal amount of £1,505,564 provided that
this authority shall expire at the conclusion of the next Annual General Meeting of the Company, save that the Directors shall
be entitled to make offers or agreements before the expiry of this authority which would or might require shares to be allotted
or rights to be granted pursuant to any such offers or agreements after this authority had expired. All unexercised authorities
previously granted to the Directors are hereby revoked.
The following three resolutions will be proposed as special resolutions.
11 Disapplication of statutory pre-emption rights: General
That the Board be authorised to allot equity securities (as defined in the Companies Act 2006) for cash under the authority
given by resolution 10 and/or to sell ordinary shares held by the Company as treasury shares for cash as if Section 561 of the
Companies Act 2006 did not apply to any such allotment or sale, such authority to be limited to:
a.
allotments for rights issues and other pre-emptive issues; and
b.
to the allotment of equity securities or sale of treasury shares (otherwise than under paragraph (i) above) up to a nominal
amount of £225,834. This amount to be not more than 5% of the issued ordinary share capital (excluding treasury shares)
of the Company as at the latest practicable date prior to publication of the notice of meeting,
such authority to expire at the end of the next AGM of the Company (or, if earlier, at the close of business on 26 October 2023).
12 Disapplication of statutory pre-emption rights: Acquisition or capital investment
That if resolution 8 granting authority to allot shares is passed, the Board be authorised in addition to any authority granted
under the first disapplication resolution to allot equity securities (as defined in the Companies Act 2006) for cash under the
authority given by that resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if Section
561 of the Companies Act 2006 did not apply to any such allotment or sale, such authority to be:
(i)
limited to the allotment of equity securities or sale of treasury shares up to a nominal amount of £225,834. This amount
to be not more than 5% of the issued ordinary share capital (excluding treasury shares) of the Company as at the latest
practicable date prior to publication of the notice of meeting; and
(ii) used only for the purposes of financing (or refinancing, if the authority is to be used within six months after the original
transaction) a transaction which the Board of the Company determines to be an acquisition or other capital investment
of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the
Pre-Emption Group prior to the date of this notice.
The Alumasc Group plc Report and Accounts 2022
135
Notice of Annual General Meeting continued
13 Company’s authority to purchase its own shares
That the Company be generally and unconditionally authorised to make market purchases (within the meaning of Section
693(4) of the Companies Act 2006) of ordinary shares of 12.5 pence each in the Company provided that:
(i)
the maximum number of ordinary shares hereby authorised to be acquired is 5,383,900 which represents 14.9% of the
issued share capital of the Company at the date of this Notice;
(ii) the minimum price (exclusive of taxes and expenses) which may be paid for such ordinary shares is 12.5 pence per share;
(iii) the maximum price (exclusive of taxes and expenses) which may be paid for such ordinary shares is an amount equal to
105% of the average of the middle market quotations for ordinary shares (derived from the Daily Official List of the London
Stock Exchange plc) for the five dealing days immediately preceding the day on which such ordinary shares are contracted
to be purchased;
(iv) the authority hereby conferred shall expire on 26 October 2023, or, if earlier, on the date of the next Annual General
Meeting of the Company except that the expiry of such authority shall not exclude any purchase of ordinary shares made
pursuant to a contract concluded before the authority expired and which would or might be executed wholly or partly after
its expiration; and
(v) this authority supersedes the Company’s authority to make market purchases granted by Special Resolution passed at the
last AGM.
By order of the Board
Helen Ashton
Group Company Secretary
6 September 2022
Burton Latimer
Kettering
Northamptonshire
NN15 5JP
Registered No:
01767387
136
The Alumasc Group plc Report and Accounts 2022
Explanatory Notes
to the Notice of Annual General Meeting
Covid-19:
At the date of the approval of this Notice although Covid-19 is still affecting people, there are currently no public health measures
in place and we will monitor any development. However, we will organise a conference call facility and the number will be published
on our website. Please note that if you attend by conference call you will not be included in the quorum.
Resolutions 1 to 10 are being proposed as Ordinary resolutions and Resolutions 11 to 13 are being proposed
as Special resolutions
Resolution 1 – Annual Report and Accounts for the year
The Directors will present to the shareholders the Annual Report and Accounts for the year ended 30 June 2022, together with the
Directors’ and Auditors’ report on those accounts.
Resolution 2 – Directors’ Remuneration Report
The Directors’ Remuneration Report is set out on pages 64 to 72. Resolution 2 is an advisory vote and does not affect the future
remuneration paid to any Director. It provides details of the remuneration paid for the year ended 30 June 2022.
Resolution 3 – To declare a dividend
Shareholders are being asked to approve a final dividend of 6.65 pence per ordinary share. If the recommended final dividend is
approved it is expected to be paid on 4 November 2022 to all shareholders on the register on 30 September 2022.
Resolutions 4 to 7 – Re-election and Election of Directors
The Company’s Articles of Association require that Directors must retire by rotation and seek re-election at the third Annual
General Meeting after the general meeting at which the postholder was appointed or re-appointed. New Directors need to seek
election in their first year of appointment. Biographical details of each Director can be found on pages 52 and 53 of this 2022
Annual Report and Accounts.
Resolution 4 – Re-election of Vijay Thakrar
Your Board recommends that Vijay Thakrar be re-elected as a Director.
Resolution 5 – Re-election of Paul Hooper as a Director
Your Board recommends that Paul Hooper be re-elected as a Director.
Resolution 6 – Re-election of Stephen Beechey as a Director
Your Board recommends that Stephen Beechey be re-elected as a Director.
Resolution 7 – To elect Karen McInerney as a Director
Your Board recommends that Karen McInerney be elected as a Director.
The Board has concluded that the Directors standing for election and re-election are effective, committed to their role, and subject
to shareholder approval, should continue in office. The Director who was appointed during the year is standing for election as
required by the Company Articles of Association.
Resolutions 8 and 9 – Re-appointment of Crowe U.K. LLP (Crowe) as Auditor and to authorise the Auditor’s remuneration
At each general meeting at which the Company’s accounts are presented the Company is required to appoint the Auditor to
serve until the next general meeting at which accounts are presented. The Directors appointed Crowe U.K. LLP in the year and
are recommending that Crowe be re-appointed as Auditor. Resolution 9 authorises the Audit Committee of the Board to set the
Auditor’s remuneration. This resolution follows standard practice.
Resolution 10 – Renewal of Directors’ authority to allot shares
By virtue of Section 551 of the Companies Act 2006 the Directors require the authority of shareholders of the Company to allot
shares or other relevant securities of the Company. This authorises the Directors to make allotments of up to an additional
12,044,519 shares (being approximately one third of the issued share capital of the Company as at the date of this Notice).
This authority will lapse at the conclusion of the next Annual General Meeting, unless renewed earlier. The Directors have no
present intention to exercise the authority proposed to be conferred by this Resolution.
The Alumasc Group plc Report and Accounts 2022
137
Explanatory Notes continued
to the Notice of Annual General Meeting
Resolutions 11 and 12 – Disapplication of statutory pre-emption rights
Special resolutions 11 and 12 will allow the Directors to allot equity securities for cash pursuant to the authority under ordinary
resolution 8, or by way of a sale of treasury shares, without in the first instance offering them to existing shareholders in proportion
to their holdings.
The authority sought will authorise the Directors to issue shares in connection with: (a) a rights issue or other pre-emptive offer
and otherwise to issue shares for cash up to a nominal value of £225,834 which includes the sale on a non pre-emptive basis of
any shares the Company holds in treasury for cash. This amount represents just under 5% of the total ordinary share capital in
issue at the date of this Notice (being the latest practicable date prior to publication of this Notice). In addition, (b) the financing
(or re-financing, if the authority is to be used within six months after the original transaction) for an acquisition or other capital
investment which the Board determines to be as contemplated by the Pre-Emption Group’s Statement of Principles, to issue shares
for cash up to a nominal value of £225,834 which includes the sale on a non pre-emptive basis of any shares the Company holds
in treasury for cash. This amount also represents just under 5% of the total ordinary share capital in issue at 31 August 2022.
This disapplication authority is in line with guidance with the Pre-Emption Group’s Statement of Principles. The authority will expire
at the conclusion of the 2023 Annual General Meeting of the Company or, if earlier, on 26 October 2023.
The authority sought under this resolution provides the Company with greater flexibility in pursuing its strategy of building a
focused premium building products company which should generate long-term growth for shareholders. It is the current intention
to renew this authority annually.
The Directors have no present intention of exercising their authority under resolutions 11 and 12.
Resolution 13 – Company’s authority to purchase its own shares
The Directors consider it desirable that the Company should have the authority to make market purchases of its own shares. This
resolution renews the Company’s general authority to buy its own shares on similar terms to previous years’ authority. The purpose
of this Resolution is to authorise the Directors generally to purchase up to 5,383,900 ordinary shares in the market (being 14.9% of
the issued share capital of the Company as at 31 August 2022). The Directors will only exercise the authority granted by Resolution
13 (if passed) if to do so would result in an increase in earnings per share and is in the best interests of shareholders generally. This
authority will lapse on 26 October 2023, unless renewed earlier.
Recommendation
Your Directors believe that the resolutions set out in Resolutions 1 to 13 are in the best interests of the shareholders as a whole
and unanimously recommend that you vote in favour of these resolutions. They intend to do so in respect of their own beneficial
holdings.
Voting at the AGM
Your vote is important, and you are encouraged to complete and return the proxy form to the Company’s registrars, Equiniti,
Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, not less than 48 hours before the time fixed for holding the AGM.
Please refer to the notes on pages 138 to 140 of this Notice for further details. Please consider appointing the Chairman of the AGM
as your proxy with voting instructions, to ensure your vote is counted.
Notes to the Notice of Annual General Meeting
(1) A member may appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the
meeting. A member may appoint more than one proxy in relation to the Annual General Meeting provided that each proxy is
appointed to exercise the rights attached to a different share or shares held by that member. A proxy need not be a member
of the Company but must attend the Annual General Meeting to represent you.
(2) To be valid, any proxy form or other instrument appointing a proxy and power of attorney or other authority, if any, under
which it is signed or a notarial certified or office copy of such power or authority must be received by post or (during normal
business hours only) by hand by Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA not later than 48 hours
before the time fixed for the meeting or any adjournment thereof. Completion and return of the form of proxy will not prevent
a member from attending and voting at the meeting instead of the proxy if they so wish. Amended instructions must also be
received by Equiniti by the deadline for receipt of proxy forms. A member must inform Equiniti in writing of any termination of
the authority of a proxy.
(3) As an alternative to completing and returning the printed form of proxy, a member may submit your proxy appointment
electronically by accessing www.sharevote.co.uk where full details of the procedure are given. For security purposes, members
will need their voting ID, task ID and shareholder reference number as printed on the form of proxy in order to validate the
submission of their proxy appointment online. Any such proxy appointment must be received not later than 48 hours before the
time fixed for the meeting or any adjournment thereof. To appoint more than one proxy electronically, please contact Equiniti
on 0371 384 2030 (from overseas +44 121 415 7047. Lines are open 8.30am to 5.30pm, Monday to Friday (excluding public
holidays in England and Wales)).
138
The Alumasc Group plc Report and Accounts 2022
(4) If a member has more than one holding registered in his/her name he/she should receive no more than one copy of the Annual
Report and one form of proxy which will be valid in respect of all his/her shareholdings. A form of proxy is enclosed. To request
a form of proxy please contact Equiniti on 0371 384 2030 (from overseas +44 121 415 7047. Lines are open 8.30am to 5.30pm,
Monday to Friday (excluding public holidays in England and Wales)).
(5) Any person to whom this Notice is sent who is a person nominated under Section 146 of the Companies Act 2006 (CA2006) to
enjoy information rights (a Nominated Person) may, under an agreement between him/her and the shareholder by whom he/
she was nominated, have the right to be appointed (or to have someone else appointed) as a proxy for the Annual General
Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any
such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
(6) The statement of rights of shareholders in relation to the appointment of proxies in notes 1, 2, and 3 above to this Notice of
Annual General Meeting does not apply to Nominated Persons. The rights described in these sections can only be exercised
by the shareholders of the Company. Nominated Persons are reminded that they should contact the registered holder of their
shares (and not the Company) on matters relating to their investments in the Company.
(7) The Company specifies that only those shareholders registered in the register of members of the Company as at 6.30pm
on 25 October 2022 (or, in the event of any adjournment, at 6.30pm on the date which is two days before the time of the
adjourned meeting) shall be entitled to attend (in person or by proxy) or vote at the meeting or any adjourned meeting in
respect of the number of shares registered in their name at that time.
Changes to entries on the register of members made after the relevant deadline shall be disregarded in determining the rights
of any person to attend or vote at the meeting. Please note that a proxy need not be a shareholder.
(8) CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do
so for the Annual General Meeting to be held on 27 October 2022 and any adjournment(s) thereof by using the procedure
described in the CREST manual. CREST personal members or other CREST sponsored members, and those CREST members
who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be
able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a
CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland’s specifications and must
contain the information required for such instructions as described in the CREST manual (available at www.euroclear.com). The
message, regardless of whether it constitutes the appointment of a proxy or relates to an amendment to the instruction given
to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA19)
by the latest time(s) for receipt for proxy appointments specified in the Notice of Annual General Meeting. For this purpose, the
time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application
Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee
through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK
& Ireland does not make available special procedures in CREST for any particular messages. Normal system timings and
limitations will apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned
to take, (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service
provider(s), to procure that his/her
CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted
by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST
sponsor(s) or voting service provider(s) are referred, in particular, to those sections of the CREST manual concerning practical
limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances
set out in regulation 35(5)(a) of the Uncertificated Securities Regulations 2001 (as amended).
(9) Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of
the same powers as the corporation could exercise if it were an individual member provided that they do not do so in relation
to the same shares.
(10) As at 31 August 2022 (being the last practicable business day prior to the publication of this Notice) the Company’s issued share
capital consists of 36,133,558 ordinary shares, carrying one vote each.
(11) Copies of the service contracts of Executive Directors, letters of appointment for Non-executive Directors, Directors’ deeds of
indemnity and a copy of the Company’s Articles of Association are available for inspection at the Company’s registered office
on each business day during normal business hours and will also be available at the place of the Annual General Meeting from
at least 15 minutes prior to the meeting and until the conclusion of the meeting.
The Alumasc Group plc Report and Accounts 2022
139
Explanatory Notes continued
to the Notice of Annual General Meeting
(12) It is possible that, pursuant to requests made by members of the Company under Section 527 of the CA2006, the Company
may be required to publish on its website a statement setting out any matter relating to: (a) the audit of the Company’s
accounts (including the Auditor’s report and the conduct of the audit) that are to be laid before the Annual General Meeting;
or (b) any circumstance connected with an Auditor of the Company ceasing to hold office since the previous meeting at
which annual accounts and reports were laid. The Company may not require the shareholders requesting any such website
publication to pay its expenses in complying with Sections 527 or 528 of the CA 2006.
Where the Company is requested to place a statement on a website under Section 527 of the CA 2006 it must forward the
statement to the Company’s Auditor not later than the time when it makes the statement available on the website.
The business which may be dealt with at the Annual General Meeting includes any statement that the Company has been
required under Section 527 of the CA 2006 to publish on its website.
(13) A member attending the meeting has the right to ask questions relating to the business being dealt with at the meeting in
accordance with Section 319A of the CA 2006. The Company must cause to be answered any such question but no such
answer need be given if: (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of
confidential information; (b) the answer has already been given on a website in the form of an answer to a question; or (c) it is
undesirable in the interests of the Company or the good order of the meeting that the question be answered.
(14) A copy of this Notice of Annual General Meeting and other information required by Section 311A of the CA 2006 can be found
at www.alumasc.co.uk.
(15) Members who have general queries about the meeting should address such questions, in the first instance, to the Company’s
Registrars, Equiniti 0371 384 2030 (from overseas +44 121 415 7047. Lines are open 8.30am to 5.30pm, Monday to Friday
(excluding public holidays in England and Wales)). Members may not use any electronic address provided in this Notice of
Annual General Meeting or any related documents to communicate with the Company for any purposes other than those
expressly stated.
(16) Voting at the meeting on all resolutions will be conducted by way of a show of hands. As soon as practicable following the
meeting, the results of the voting at the meeting and the number of proxy votes cast for and against and the number of votes
actively withheld in respect of each of the resolutions proposed at the meeting will be announced via a Regulatory Information
Service and also placed on the Company’s website.
140
The Alumasc Group plc Report and Accounts 2022
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The Alumasc Group plc
Station Road
Burton Latimer
Kettering
NN15 5JP
https://www.alumasc.co.uk