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Annual Report for the Financial Year ending & Trading Outlook
By: Laura Okell on Aug 1, 2023 6:13:07 PM
Grainger and Worrall Limited and Grainger and Worrall Machining Limited are pleased to announce that their Annual Report for the financial year ending 31 October 2022 have been filed at Companies house.
These results relate to the 17-month period ending 31 October 2022 and therefore relate to a period prior to the management buyout of group by Evolution Castings Group Limited which now only comprises the wholly owned subsidiaries Grainger & Worrall Limited, Grainger & Worrall Machining Limited and Grainger & Worrall Inc.
For the 17-month trading period ending 31 October 2022 the companies reported a combined turnover of £77.6 million after removing inter company trading and a combined EBITDA loss of £5.3 million although this did include significant costs relating to the business’s restructuring.
The key highlights in the period were:
- During the trading period the business continued to experience operational and financial challenges.
- In August 2022, the businesses filed their accounts for the prior year to 31 May 2021 and whilst the going concern of the company was supported with a new funding agreement with National Westminster Bank plc and UKEF, the auditors concluded that there was a material uncertainty in the going concern.
- In November 2022 the directors determined that it was essential to make a step change in the approach being adopted with the turnaround and additional situational and sector expertise was brought into the business alongside the existing statutory directors. As a consequence, rapid actions were taken to address the liquidity challenges in the business, enhance engagement with internal and external stakeholders and make fundamental operational changes.
- The consequence of these actions meant that the financial challenges in the business started to be address together with a much-improved engagement with the workforce and external stakeholders. Operationally, the Group also began to overcome its challenges and greater clarity appeared over the business issues and how they could be resolved which included a restructuring of the organisation and the exit of loss-making activities.
- Most importantly significant efforts were made to change the culture in the business and create an inclusive environment. In early April 2023, despite the business’s challenges a pay award of £1.2 million was made to the workforce, the largest pay increase ever awarded by the business. More focus is now being brought on diversity and inclusivity with a recently formed Evolution Women forum.
- The significant improvements in the business then enabled the management buyout of the businesses to be effected in June 2023 and cemented the resetting of the organisation’s culture and move towards a more diversified product base of combustion engine parts, electric vehicle related products and very large castings for a range of sectors.
Significantly, in the financial statements that have just been posted and primarily because of the recent management buyout the auditors have now concluded that there are no material uncertainties that may cast significant doubt on the business’s ability to continue as a going concern.
Iain Johnson, Group Chief Financial Officer said:
“The results we are releasing today are of no surprise. The business had been experiencing significant challenges during the period and a very intensive turnaround was put into effect during late 2022 which led to the management buyout by the Evolution Castings Group team in June 2023. The very positive changes in the business are now being felt in our performance and most importantly by the team, suppliers and customers.
The results also included significant provisions in relation to a bad debt from a company that was part of the group prior to the management buy out.”
There has been a significant positive shift in the business thanks to everyone’s efforts and with reset of the company’s liquidity in June 2023 our auditors have now been able to conclude that there are no material uncertainties that may cast doubt on the Company’s ability to continue as a going concern. This is a fundamental change to where the business was last year.”
Andrew Burn, Chairman stated,
“The extent of the group’s losses in the reported period were expected and have been planned for. What is important for everyone to remember is that these are the results for the period when the business was experiencing significant difficulties.
I am pleased to say that as a result of the turnaround and the management buyout the business is in a much stronger position now. We now have a team of over 770 people, and we have been consistently making profits each month since April 2023. We have turned the corner and we are seeing the impact of this on our stakeholders.
We have a brilliant team and very experienced and dedicated individuals, and we are now focussing on putting in place much stronger learning and development activities and rebooting our ESG strategy. We are keen to embrace diversity and are cultivating a much more inclusive environment in the business, for example one of our very bright up and coming engineers is taking the lead in creating Evolution Women, a forum within the business that will focus on attracting more women into the group and encouraging women into engineering.
Our suppliers are also hopefully feeling the differences with increased demand and our turnover grows and I am delighted to say that a couple of weeks ago we were able to bring all of our suppliers back into terms and credit rating agencies have become increasingly supportive. Customer demand has been growing thanks to the amazing knowledge and expertise of our team with enquiries that we are dealing with being valued at over £100 million as we become market focussed and emphasise the group’s unique selling points.
Today, thanks to incredible efforts of our stakeholders and the whole team, the business it is now a very different place. We still have much more to do but we are well on the way with our journey.”
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