“I am delighted to present CT Automotive plc (LON:CTA) first set of results as a listed company. This has been one of the most exciting and challenging years at CT, concluding with the successful listing in late December. I am proud of what we have achieved and the position that the Group now holds.”
Simon Phillips
Founder and Executive Chairman
Introduction
We achieved record revenues, despite the well-documented challenges in our end markets, and, with the funding from the IPO, are well placed to capitalise on the growth opportunities ahead as global vehicle production volumes recover in 2022 and beyond.
This would not have been possible without the resilience and collaboration shown by our people in such an extraordinary year. They have consistently risen to whatever challenges they face which fills me with confidence for the future of CT.
As part of the listing, we have strengthened our Board, and I would like to welcome Tracey James, Francesca Ecsery and Ray Bench, our three new non-executive directors. In the short time working with us, they have already added strong insight and improved direction to our Board, so I am excited to see this develop over the coming years.
Finally, I’d like to again thank and welcome our new investors who supported us at IPO. With their backing, we look forward to continuing to build on our growth track record.
Business Overview
2021 was a year of two halves. The first six months continued the strong recovery trend which started at the end of 2020 following the end of most COVID-related lockdowns, precipitating the ramping up of light vehicle production. However, during this period, automotive supply chain shortages started to arise, most notably semiconductors.
Although this didn’t directly impact our supply chain, it caused automotive production lines to slow down and, at times, come to a halt. Original equipment manufacturers (OEMs) have consequently become more selective about which models to produce to maximise available resources, typically favouring electric vehicles (EVs). Due to our
customer mix and the vehicle models we are nominated on, these supply chain issues most significantly impacted the second six months of trading for CT. Nonetheless, we were still able to deliver record revenues ahead of our expectations set out at listing, with revenue of $132.9m, up from $109.9m in 2020.
The listing has allowed the Group to repay various credit facilities, including the term loan which arose from the previous management buy-out in 2016. We have maintained our existing working capital facilities in the form of invoice finance and import trade loan facilities. The Group’s balance sheet has therefore been significantly strengthened to position the business perfectly for the next phase of growth.
Dividend
As outlined at our listing in late December, our focus will be on continuing to invest in the business for future growth, including the setup of the new plant in Mexico. As a result, the Board is recommending no dividend for the 2021 financial year.
This is in line with our capital allocation policy and reflects our confidence in the growth opportunities we see ahead.
Regulatory and governance
As part of the listing, the Board adopted the QCA Corporate Governance Code and will actively monitor the effectiveness of our governance processes. Details of this are found within page 35.
As a result of the pandemic and related travel restrictions, all Board meetings continue to be held remotely. Although this has not impacted the effectiveness of the Board, we are hopeful that in-person Board meetings will be possible at some point in 2022. The first evaluation of effectiveness for the Board and committees will be completed in late 2022, following a full year of adoption.
Supporting our people
People and culture remains a core focus at CT. Our growth to this point is driven by the strength and commitment of our people.
Keeping our people safe is a top priority for CT. Health and safety is paramount at all sites, with strict guidelines and regular external audits to ensure best practice processes. Our health and safety KPIs have been presented in the
Sustainability Report and S172 statement on page 14.
The Board is also in the process of implementing a group-wide employee engagement surveys to ensure honest and
regular feedback on any issues or concerns or recommendations. As we strive to constantly innovate and improve, we value the input from our people to achieve this.
Our market
The thoughts of everyone at CT are with the people of Ukraine at this time. We continue to monitor the situation closely, which has impacted the European automotive industry. Most notably, some automakers source wire harnesses from Ukraine and have been forced to halt production whilst they re-source supply. For CT, this only impacted one customer for which production restarted within four weeks and is expected to recover the lost volumes across 2022. The short-term impact on global volumes was also offset by increased volumes in the US during that four- week period.
Looking ahead
This is a very exciting time for CT Automotive. As the global supply chain issues continue to ease through 2022, there is unprecedented, pent-up consumer demand within the automotive industry. The supply chain issues within the industry are primarily impacting our customers, rather than our direct supply chain, as we continue to be able to source our required raw materials. Although there is inflationary pressure mounting, the Group primarily utilises open book pricing models, and hence there are mechanisms in place to pass costs through to customers. To support this and the future development of the Group, we employed Stuart Lorraine as our Global Supply Chain and Commercial Director in March 2022. Stuart has a wealth of experience within the industry, including previously working at OEMs, and has already helped mitigate any margin compression.
In addition, we have already achieved a number of significant new business wins in 2022 and are well progressed in setting up the new plant in Puebla, Mexico, with production on track to commence in H2 2022. This progress has been detailed further within the Chief Executive Officer’s review.
These factors along with our strong track record of growth, client relationships and manufacturing excellence fill me with confidence that we are well positioned for a strong and extended period of growth.
Simon Phillips
Founder and Executive Chairman
