Final Results
Holders Technology plc
Specialised Materials, LED components and Lighting Solutions
Audited results for the year ended 30 November 2012
Holders Technology plc ("Holders Technology" or "the Group") announces its
audited results for the year ended 30 November 2012. Holders Technology
supplies special laminates and materials for printed circuit boards, and
operates as a LED solutions provider to the lighting and industrial markets.
The overall results for 2012 were mixed: the PCB divisions faced challenging
market conditions throughout 2012, especially during the first half of the
year. PCB operations in China were significantly restructured, resulting in a
non-cash impairment cost. The LED divisions overall performed well and made a
positive contribution.
Holders Technology recorded the following results:
* Revenue 21% lower at £15.6m
* PCB revenue 30% lower; LED revenue 27% higher
* Margins 1.6% higher at 24.6%
* Overheads reduced by £355,000
* Impairment costs for China PCB operations £287,000
* Group Loss before impairment costs £78,000
* Group Loss after impairment costs £365,000
* Cash balances £700,000. No debt.
* Proposed final dividend 1.0 pence per share
Chairman's statement
In the Chairman's Statement accompanying the Report and Accounts for the year
to 30th November 2011 I said, "We see the forthcoming year as one of both
significant challenge and great opportunity". Those words proved to be well
chosen in that our PCB operations faced severe challenges particularly in the
first half of the year, while our LED activities achieved significant sales
growth and, for the first time, made a positive contribution to the overall
Group result.
Our PCB activities continue to maintain their position in the markets they
serve but inevitably they have been adversely affected by the continuing
economic problems impacting both the UK and Europe generally. In total our PCB
sales in the year declined by 30% but margin was maintained. Given the severe
difficulties we experienced in the first half of the year it is pleasing to be
able to report that some recovery was seen in the second half of the year.
Further reductions in overheads combined with continuing successful efforts to
redeploy PCB staff to our LED operations ameliorated the full potential impact
of this marked fall in sales.
By contrast the general LED market is expanding, as a result of technical
performance improvements and market acceptance of their economic benefits.
These factors taken together give us grounds for expecting that this market
will see continuing substantial growth. In the year to 30th November 2012 our
LED sales grew by 27% and margins increased by 11%; our LED activities now
contribute 26% of total Group margin.
Our Chinese and Indian ventures were entered into largely to service certain of
our PCB customers who, at the time, required support in these markets. The
venture in China also facilitated the sourcing of lower cost Far Eastern
products for the Group to distribute in Europe.
While the Group has seen past benefits from both of these areas of activity,
changing market conditions have required us to critically appraise our Chinese
operations. The ability to utilise our Chinese and Indian low cost assembly
operations to enable our European LED activities to offer customised lighting
solutions is of benefit and will be retained. However, our Chinese PCB
activities no longer offer the same prospects and we have therefore
restructured our Chinese operations. The details of the non cash impairment
cost of this restructuring amounting to £287,000 in total, are set out in the
Financial Review which follows this Statement.
As a Group our general strategy remains unchanged; we seek to maintain our
position in the PCB markets we serve while further expanding our LED
activities. As part of this policy during the last year we entered the market
for energy efficient lighting and encouraging progress has been made
particularly in the retail area.
Implementing change is difficult and disruptive and the cooperation of our
staff in assisting the process within the Group has been vital in achieving the
progress we have made; on behalf of the Board and shareholders I would like to
thank them for their continuing commitment.
As a Board we have carefully considered the outcome for the year to 30th
November 2012, the prospects for the future and the company's strong cash
position. In light of these factors we consider it both justifiable and prudent
to recommend a final dividend of 1.0p per share.
Inevitably having a 30th November year end will always result in a slow start
to our Financial Year but I can report that the opening months of the current
year have seen trading at better levels than resulted from the very difficult
conditions we experienced in the opening months of the preceding year. The cost
reductions already implemented across the Group, which have included salary
sacrifices by the plc board, will further benefit the financial results for the
first half of the current year.
We believe our PCB activities can maintain their relative position and be of
continuing major benefit to the Group. The growing opportunities we see in our
LED markets coupled with the commitment of our staff and the strength of our
balance sheet leaves us well placed to make further progress in this area.
Overall we expect a stronger performance by the Group in the current year.
R W Weinreich
Executive Chairman
14 March 2013
Consolidated income statement
for the year ended 30 November 2012
-------------
Note 2012 2011
£'000 £'000
Continuing operations
Revenue 15,605 19,636
Cost of sales (11,763) (15,127)
Gross profit 3,842 4,509
Distribution costs (376) (404)
Administrative expenses (3,550) (3,828)
Impairment costs 2 (287) -
Other operating income 6 98
Operating (loss)/ profit (365) 375
Finance income 1 -
Finance expenses (15) (12)
(Loss)/ profit before taxation (379) 363
Tax expense 3 (58) (123)
(Loss)/ profit for the year (437) 240
(Loss)/ profit for the year
attributable to:
Owners of the parent (374) 264
Non-controlling interest (63) (24)
(Loss)/ profit for the (437) 240
financial year
Total and continuing
Basic (loss)/ earnings per 5 (9.49p) 6.70p
share
Diluted (loss)/ earnings per 5 (9.49p) 6.63p
share
Consolidated statement of comprehensive income
for the year ended 30 November 2012
2012 2011
£'000 £'000
(Loss)/ profit for the year (437) 240
Reclassification adjustment related to - 412
terminated foreign operations
Change in actuarial assumption re (45) -
pension liability
Exchange differences on translating (163) 60
foreign operations
Total comprehensive income and expense (645) 712
for the year
Total comprehensive income and expense
for the year attributable to:
Owners of the parent (577) 788
Non-controlling interests (68) (76)
(645) 712
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 1 416 1,531 1 629 3,264 5,841 91 5,932
December 2010
Dividends - - - - (211) (211) - (211)
Employee - - - - (4) (4) - (4)
share-based
payment options
Transactions - - - - (215) (215) - (215)
with owners
Profit/(loss) - - - - 264 264 (24) 240
for the year
Reclassification - - - (412) 412 - - -
adjustment
related to
terminated
foreign
operations
Exchange - - - 51 - 51 9 60
differences on
translating
foreign
operations
Total - - - (361) 676 315 (15) 300
comprehensive
income for the
year
Balance at 30 416 1,531 1 268 3,725 5,941 76 6,017
November 2011
Dividends - - - - (168) (168) - (168)
Employee - - - - 1 1 - 1
share-based
payment options
Transactions - - - - (167) (167) - (167)
with owners
Profit/(loss) - - - - (374) (374) (63) (437)
for the year
Effect of change - - - - (45) (45) - (45)
in actuarial
assumption re
pension
liability
Exchange - - - (163) - (163) (5) (168)
differences on
translating
foreign
operations
Total - - - (163) (586) (749) (68) (817)
comprehensive
income for the
year
Balance at 30 416 1,531 1 268 3,139 5,192 8 5,200
November 2012
Company Share Share Capital Retained Total equity
capital premium redemption earnings
reserve
£'000 £'000 £'000 £'000 £'000
Balance at 1 416 1,531 1 539 2,487
December 2010
Profit and total - - - 404 404
comprehensive
income for the year
Dividends - - - (211) (211)
Share-based payment - - - (4) (4)
charge
Balance at 30 416 1,531 1 728 2,676
November 2011
Profit and total - - - (166) (166)
comprehensive
income for the year
Dividends - - - (168) (168)
Share-based payment - - - 1 1
charge
Balance at 30 416 1,531 1 395 2,343
November 2012
Balance sheets
at 30 November 2012
Company number: 1730535 Group Company
2012 2011 2012 2011
£'000 £'000 £'000 £'000
Assets
Non-current assets
Goodwill 318 318 - -
Property, plant and equipment 398 556 21 29
Investments in subsidiaries - - 2,780 2,780
Investment in joint venture - - 15 15
Investments in associates - - - -
Deferred tax assets 41 72 - -
757 946 2,816 2,824
Current assets
Inventories 3,140 3,834 - -
Trade and other receivables 2,397 2,951 387 676
Current tax assets 57 95 - -
Cash and cash equivalents 700 67 6 15
6,294 6,947 393 691
Liabilities
Current liabilities
Trade and other payables (1,556) (1,591) (800) (766)
Borrowings - (26) - (6)
Current tax liabilities (35) (35) (32) (33)
(1,591) (1,652) (832) (805)
Net current assets 4,703 5,295 (439) (114)
Non-current liabilities
Borrowings - - - -
Retirement benefit liability (199) (167) - -
Contingent consideration (29) (29) (29) (29)
Deferred tax liabilities (32) (28) (5) (5)
(260) (224) (34) (34)
5,200 6,017 2,343 2,676
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 3,139 3,725 395 728
Cumulative translation 105 268 - -
adjustment reserve
Equity attributable to the 5,192 5,941 2,343 5,941
shareholders of the parent
Non-controlling interest 8 76 - -
5,200 6,017 2,343 2,676
The financial statements were approved by the Board on 14 March 2013 and signed
on its behalf by:
R W Weinreich
Director
Cash flow statements
for the year ended 30 November 2012
Group Company
2012 2011 2012 2011
£'000 £'000 £'000 £'000
Cash flows from operating
activities
Operating (loss)/ profit (365) 375 (175) (158)
Share-based payment credit 1 (4) 1 (4)
Depreciation 151 144 9 3
Impairment costs 287 20 - -
Currency translation 10 40 - -
(Gain)/ Loss on sale of (3) (16) - -
property, plant and equipment
(Increase)/decrease in 488 (8) - -
inventories
(Increase)/decrease in trade 415 (257) 289 (253)
and other receivables
Increase/(decrease) in trade (92) (582) 34 (796)
and other payables
Investment in subsidiary fair - - - 16
value adjustment
Cash (used in)/generated from 892 (288) 158 (1,192)
operations
Corporation tax (paid)/ 15 (155) (1) (156)
received
Net cash (used in)/generated 907 (443) 157 (1,348)
from operations
Cash flows from investing
activities
Proceeds from disposal of - - - 1,157
subsidiary
Purchase of property, plant (74) (137) (1) (29)
and equipment
Proceeds from sale of property, 18 24 - -
plant and equipment
Income from investments - - - 77
Interest received 1 - 14 6
Net cash (used in)/generated from (55) (113) 13 1,211
investing activities
Cash flows from financing
activities
Interest paid (15) (12) (5) (2)
Loan repayments (26) (27) - -
Movement in contingent - (16) - (16)
consideration
Finance lease principal - (3) - -
repayments
Equity dividends paid (168) (211) (168) (211)
Net cash used in financing (209) (253) (173) (213)
activities
Net change in cash and cash 643 (825) (3) (54)
equivalents
Cash and cash equivalents at 67 888 9 63
start of period
Effect of foreign exchange (10) 4 - -
rates
Cash and cash equivalents at 700 67 6 9
end 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. Impairment costs
Impairment costs consist of the following:
2012 2011
£'000 £'000
Impairment of China PCB assets (168) -
Impairment of China PCB inventories (119) -
(287) -
The impairment charges relate to the directors' assessment of the fair value of
PCB assets and PCB inventories held by Holders Technology China operations.
3. Taxation
2012 2011
£'000 £'000
Analysis of the charge in the period
Current tax
- Current period 30 91
- Adjustments in respect of prior periods (7) 5
23 96
Deferred tax 35 27
Total tax 58 123
Tax reconciliation
The tax for the period is higher (2011: higher) than the standard rate of
corporation tax in the UK, effectively 24.67% (2011: 26.67%) for the company's
financial year. The differences are explained below:
2012 2011
£'000 £'000
Profit/(loss) before taxation (379) 363
Profit/(loss) before taxation multiplied by rate (98) 92
of corporation tax in the UK of 24.67 % (2011:
26.67%)
Effects of:
Differences between capital allowances and (2) 6
depreciation
Amounts not deductible for taxation purposes 44 46
Non taxable income - (42)
Adjustments in respect of prior years - 5
Taxation losses 43 11
Other temporary differences 71 5
Taxation 58 123
4. The directors have proposed a final dividend of 1.0p per share payable on
21 May 2013 to shareholders on the register at close of business on 1 May
2013. The total dividend for the year, including the interim dividend of
1.0p (2011: 2.1p) per share paid on 2 October 2012, amounts to £79,000
(2011: £211,000), which is equivalent to 2.0p (2011: 5.35p) per share.
5. The basic earnings per share are based on the loss for the financial year
attributable to the equity shareholders of £374,000 (2011: profit of £
264,000) and on ordinary shares 3,939,551 (2011: 3,939,551), the weighted
average number of shares in issue during the year, excluding treasury
shares. Diluted earnings per share are based on 3,939,551 ordinary shares
(2011: 3,979,008), being the weighted average number of ordinary shares
after an adjustment of nil shares (2011: 39,457) in relation to share
options.
6. This preliminary statement, which has been approved by the Board on 14
March 2013, is not the Company's statutory accounts. The statutory accounts
for each of the two years to 30 November 2011 and 30 November 2012 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 2011
accounts have been filed with the Registrar of Companies but the 2012
accounts are not yet filed.
For further information, contact:
Rudi Weinreich, Executive Chairman, Holders Technology plc,
Tel. 020 8236 1490
Paul Geraghty, Group Finance Director, Holders Technology plc,
Tel. 020 8236 1490
William Vandyk, Director, Northland Capital Partners Ltd,
Tel. 020 7796 8822
Website www.holderstechnology.com
ENDS
Friday, 3rd January 2025
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