Final Results
Holders Technology plc
Providers of PCB materials, LED components and lighting solutions.
Audited results for the year ended 30 November 2011
Holders Technology plc ("Holders Technology" or "the Group") announces its
audited results for the year ended 30 November 2011.
Holders Technology's Printed Circuit Board ("PCB") divisions overall had strong
growth in the first half, then contraction in the second half. The lighting and
LED businesses grew throughout the year, albeit from a lower base. Holders
Technology recorded the following results:
* Revenue for the year grew 20% to £19.6m (2010: £16.3m)
* LED revenue grew 317% to £3.2m
* Gross profit of £4.5m (2010: £4.2m)
* Operating profit of £0.4m (2010: £0.5m profit)
* Proposed final dividend of 3.25p (2010: 3.25p)
Chairman's statement
In my statement accompanying the half year results for the year ending 30th
November 2011 I was able to say that the strong growth which we had seen in our
PCB business in the preceding year had continued, particularly in our German
operations. This position changed very significantly in the second half of the
year adversely impacting our PCB operations in mainland Europe.
The positive points regarding our PCB operations were that we continued to see
the benefits of our extended and renewed product range which enabled us to
reduce the tendency for margins to come under severe pressure during times of
turnover decline.
In periods of great economic uncertainty it is inevitable that reductions in
end user demand will be magnified by a tendency for our customers, their
suppliers, to de-stock, this was the case in the second half of the year. We do
not believe that we have lost ground to competitors in the PCB markets which we
serve.
The growth in total turnover which the Group saw in the year to 30th November
2011 was due to the LED sector of the Group's business. Our UK LED activities,
being more established, made the greatest contribution to this growth but in
the closing months of the year our European operations, benefiting from the
infrastructure investment we have made, began to make significant progress.
The year overall was a financially testing one for the Group. The strong
turnover growth achieved in our new LED business required significant
investment in stock and other working capital but our traditional financial
strength enabled us to accommodate these requirements despite profitability
being constrained.
It was encouraging that, in addition to extending our LED infrastructure to
serve the European market, we were also successful in expanding the range of
products we are able to offer. This enhanced range was augmented by a number of
customised modules tailored to selected product markets. Our ability to utilise
assembly services from our other various facilities materially assisted in this
process.
The strategy we have pursued in the PCB market of seeking to offer a
comprehensive service covering both high volume commodity products and more
specialist niche products, has enabled us successfully to weather the cyclical
swings in that business. While applying the same general principles to our LED
activities we will also heighten our concentration on providing complete
lighting solutions to selected industrial and commercial segments of the
market.
As in previous years I would like to record the Board's thanks to all of our
employees who have responded well to the challenges which the last year gave
rise to; we value their support. The year saw Paul Geraghty join the Board as
Financial Director. I am pleased to be able to report that Jim Shawyer, who
held that post for eleven years, has agreed to continue as a consultant to the
Group.
The current problems in the Euro area coupled with an uncertain UK economy and
the volatility of exchange rates makes the task of predicting the outcome for
the current year particularly difficult. The opening months of the current
financial year have seen a marked decline in our PCB business but, as a Group,
we have the benefit of considerable experience in weathering downturns in the
PCB industry by balancing the need to preserve revenues whilst strictly
controlling costs and this we are continuing to do.
In contrast to the PCB market, the LED market continues to experience rapid
growth. To ensure that we have the capability to serve our defined areas of
this market we will, in the current year, continue to make significant further
investments designed to ensure we are able to build a secure platform for
sustained growth in future years.
In summary, we foresee the current year as one of both significant challenge
and great opportunity.
R W Weinreich
Chairman and Chief Executive
13 February 2012
Consolidated income statement
for the year ended 30 November 2011
Total Total
Note 2011 2010
£'000 £'000
Continuing operations
Revenue 19,636 16,314
Cost of sales (15,127) (12,116)
Gross profit 4,509 4,198
Distribution costs (404) (390)
Administrative expenses (3,828) (3,273)
Impairment of goodwill 2 - (57)
Acquisition costs 2 - (26)
Other operating income/ 98 39
(expenses)
Operating profit/(loss) 375 491
Finance costs (12) (1)
Profit before taxation 363 490
Tax expense 3 (123) (59)
Profit for the year 240 431
Profit for the year attributable
to:
Owners of the parent 264 507
Non-controlling interest (24) (76)
Profit for the financial year 240 431
Total and continuing
Basic earnings per share 5 6.70p 12.87p
Diluted earnings per share 5 6.63p 12.87p
Consolidated statement of comprehensive income
for the year ended 30 November 2011
Group
2011 2010
£'000 £'000
Profit for the year 240 431
Reclassification adjustment related to 412 -
terminated foreign operations
Exchange differences on translating 60 (180)
foreign operations
Total comprehensive income for the 712 251
year
Total comprehensive income for the year
attributable to:
Owners of the parent 788 305
Non-controlling interests (76) (54)
712 251
Statements of changes in equity
Group Share Share Capital Translation Retained Total Non-controlling Total
capital premium redemption reserve earnings attributable interest equity
reserve to owners of
parent
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 December 416 1,531 1 831 2,972 5,751 145 5,896
2009
Dividends - - - - (211) (211) - (211)
Employee share-based - - - - (4) (4) - (4)
payment options
Transactions with - - - - (215) (215) - (215)
owners
Profit/(loss) for the - - - - 507 507 (76) 431
year
Non-controlling interest - - - - - - - -
investment
Exchange differences on - - - (202) - (202) 22 (180)
translating foreign
operations
Total comprehensive - - - (202) 507 305 (54) 251
income for the year
Balance at 30 November 416 1,531 1 629 3,264 5,841 91 5,932
2010
Dividends - - - - (211) (211) - (211)
Employee share-based - - - - (4) (4) - (4)
payment options
Transactions with - - - - (215) (215) - (215)
owners
Profit/(loss) for the - - - - 264 264 (24) 240
year
Reclassification (412) 412 - - -
adjustment related to
terminated foreign
operations
Exchange differences on - - - 51 - 51 9 60
translating foreign
operations
Total comprehensive - - - (361) 676 315 (15) 300
income for the year
Balance at 30 November 416 1,531 1 268 3,725 5,941 76 6,017
2011
Company Share Share Capital Retained Total
capital premium redemption earnings equity
reserve
£'000 £'000 £'000 £'000 £'000
Balance at 1 December 2009 416 1,531 1 939 2,887
Loss and total comprehensive income - - - (185) (185)
for the period
Dividends - - - (211) (211)
Share-based payment charge - - - (4) (4)
Balance at 30 November 2010 416 1,531 1 539 2,487
Profit and total comprehensive income - - - 404 404
for the period
Dividends - - - (211) (211)
Share-based payment charge - - - (4) (4)
Balance at 30 November 2011 416 1,531 1 728 2,676
Balance sheets
at 30 November 2011
Company number: 1730535 Group Company
2011 2010 2011 2010
£'000 £'000 £'000 £'000
Assets
Non-current assets
Goodwill 318 318 - -
Property, plant and equipment 576 582 29 3
Investments in subsidiaries - - 2,780 3,622
Investment in joint venture - - 15 15
Investments in associates - - - -
Deferred tax assets 66 73 - -
960 973 2,824 3,640
Current assets
Inventories 3,834 3,826 - -
Trade and other receivables 2,951 2,721 676 423
Current tax assets 95 56 - -
Cash and cash equivalents 67 888 15 63
6,947 7,491 691 486
Liabilities
Current liabilities
Trade and other payables (1,591) (2,182) (766) (1,562)
Borrowings (26) (52) (6) -
Current tax liabilities (35) (55) (33) (32)
(1,652) (2,289) (805) (1,594)
Net current assets 5,295 5,202 (114) (1,108)
Non-current liabilities
Borrowings - (4) - -
Retirement benefit liability (167) (192) - -
Contingent consideration (29) (45) (29) (45)
Deferred tax liabilities (28) (2) (5) -
(224) (243) (34) (45)
6,017 5,932 2,676 2,487
Shareholders' equity
Share capital 416 416 416 416
Share premium account 1,531 1,531 1,531 1,531
Capital redemption reserve 1 1 1 1
Retained earnings 3,725 3,264 728 539
Cumulative translation 268 629 - -
adjustment reserve
Equity attributable to the 5,941 5,841 2,676 2,487
shareholders of the parent
Non-controlling interest 76 91 - -
6,017 5,932 2,676 2,487
Cash flow statements
for the year ended 30 November 2011
Group Company
2011 2010 2011 2010
£'000 £'000 £'000 £'000
Cash flows from operating
activities
Operating profit/(loss) 375 491 (158) (117)
Share-based payment credit (4) (4) (4) (4)
Depreciation 144 152 3 1
Impairment of goodwill - 57 - -
Impairment of fixes assets 20 - - -
Currency translation 40 (137) - -
(Gain)/ Loss on sale of (16) 16 - -
property, plant and equipment
(Increase)/decrease in (8) (1,870) - -
inventories
(Increase)/decrease in trade and (257) (274) (253) 67
other receivables
Increase/(decrease) in trade and (582) 867 (796) 1,108
other payables
Movement in contingent (16) (16)
consideration
Investment in subsidiary fair 16
value adjustment
Cash (used in)/generated from (304) (702) (1,208) 1,055
operations
Corporation tax (paid)/received (155) (75) (156) 157
Net cash (used in)/generated (459) (777) (1,364) 1212
from operations
Cash flows from investing
activities
Net borrowings acquired with - (44) -
subsidiary undertaking
Increase in investment in - - - (1,296)
subsidiaries
Proceeds from disposal of - - 1,157 67
subsidiary
Purchase of property, plant and (137) (118) (29) (1)
equipment
Proceeds from sale of property, plant 24 (21) - -
and equipment
Income from investments - - 77 160
Interest received - - 6 5
Net cash (used in)/generated from (113) (141) 1,211 (1,065)
investing activities
Cash flows from financing
activities
Interest paid (12) (1) (2) -
Loan repayments (27) (26) - -
Finance lease principal (3) (3) - -
repayments
Equity dividends paid (211) (211) (211) (211)
Net cash used in financing (253) (241) (213) (211)
activities
Net change in cash and cash (825) (1,159) (54) (64)
equivalents
Cash and cash equivalents at 888 2,095 63 127
start of period
Effect of foreign exchange rates 4 (48) - -
Cash and cash equivalents at end 67 888 9 63
of period
Notes
1. Basis of preparation
The Group and parent company financial statements have been prepared in
accordance with EU endorsed International Financial Reporting Standards (IFRS),
International Financial Reporting Interpretations Committee (IFRIC)
interpretations and with those parts of the Companies Act applicable to
companies reporting under IFRS. All accounting standards and interpretations
issued by the International Accounting Standards Board and the International
Financial Reporting Interpretations Committee effective at the time of
preparing these financial statements have been applied.
2. Exceptional items
Exceptional items consist of the following:
2011 2010
£'000 £'000
Impairment of goodwill - (57)
Acquisition costs - (26)
- (83)
The impairment of goodwill in 2010 derives from the directors' assessment of
goodwill attributable to Holders' Far East operations. The acquisition costs in
2010 relate to the acquisition of JK Components Limited (since renamed Holders
Components Limited) in December 2009.
3. Taxation
4.
2011 2010
£'000 £'000
Analysis of the charge in the period
Current tax
- Current period 91 136
- Adjustments in respect of prior periods 5 (27)
96 109
Deferred tax 27 (50)
Total tax 123 59
Tax reconciliation
The tax for the period is higher (2010: lower) than the standard rate of
corporation tax in the UK, effectively 26.67% (2010: 28%) for the company's
financial year. The differences are explained below:
2011 2010
£'000 £'000
Profit/(loss) before taxation 363 490
Profit/(loss) before taxation multiplied by 92 137
rate of corporation tax in the UK of 26.67 %
(2010: 28%)
Effects of:
Differences between capital allowances and 6 (2)
depreciation
Amounts not deductible for taxation purposes 46 23
Non taxable income (42) -
Adjustments in respect of prior years 5 (27)
Taxation losses 11 (74)
Other temporary differences 5 2
Taxation 123 59
4. The directors have proposed a final dividend of 3.25p per share payable on
22 May 2012 to shareholders on the register at close of business on 4 May
2012. The total dividend for the year, including the interim dividend of
2.1p (2010: 2.1p) per share paid on 4 October 2011, amounts to £211,000
(2010: £211,000), which is equivalent to 5.35p (2010: 5.35p) per share.
5. The basic earnings per share are based on the earnings for the financial
year attributable to the equity shareholders of £264,000 (2010: £507,000)
and on ordinary shares 3,939,551 (2010: 3,939,551), the weighted average
number of shares in issue during the year, excluding treasury shares.
Diluted earnings per share are based on 3,979,008 ordinary shares (2010:
3,939,551), being the weighted average number of ordinary shares after an
adjustment of 39,457 shares (2010: nil) in relation to share options.
6. This preliminary statement, which has been approved by the Board on 13
February 2012, is not the Company's statutory accounts. The statutory
accounts for each of the two years to 30 November 2010 and 30 November 2011
received audit reports, which were unqualified and did not contain
statements under section 498(2) and section 498(3) of the Companies Act
2006. The 2010 accounts have been filed with the Registrar of Companies but
the 2011 accounts are not yet filed.
ENDS For further information, contact:
Mr Rudi Weinreich, Executive Chairman, Holders Technology plc,
on 020 8236 1490
Mr Paul Geraghty, Group Finance Director, Holders Technology plc,
on 020 8236 1490
Mr Shane Gallwey, Director, Corporate Finance, Northland Capital Partners Ltd,
on 020 7796 8823
Website www.holderstechnology.com
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