Half-yearly Report
Holders Technology plc
Providers of specialised materials, equipment and components to the electronics
and lighting industries
Half yearly results for the 6 months ended 31 May 2011
Holders Technology plc (AIM: HDT) announces its unaudited half yearly results
for the 6 month period ended 31 May 2011.
Highlights
Half year ended 31 May
2011 2010
Revenue £10.1m £7.1m
PBT £0.3m £0.1m
Operating cash flow before tax (£0.7m) (£0.8m)
Earnings per share 5.58p 1.88p
Interim dividend per share 2.10p 2.10p
Net assets per share at 31 May 155p 138p
Chairman's statement
The first half of the year saw strong growth in both our Printed Circuit Board
(PCB) business and in our new Light Emitting Diode (LED) activities.
PCB operations
Our German operations enjoyed robust demand from established larger customers.
This was reinforced by an increasing level of interest in the new materials we
have introduced over the last two years. PCB operations in the UK were stable
overall with somewhat weaker demand from certain customers being offset by the
increased take up of new materials and products.
LED operations
As I set out in my statement accompanying the Report and Accounts for the year
ending 30th November 2010, we planned that the current year would be one of
significant investment in our new LED activities. This programme is in hand and
the initial results of this are now being seen. Our UK operations, having the
advantage of an initial base on which to build, have progressed faster than our
European activities and we have seen a substantial growth in UK sales of LED
products. In Europe we have completed the necessary changes to our systems and
the training of existing staff; a programme of augmenting the sales teams is in
hand and will continue over the coming months.
The combination of significant growth in our PCB activities coupled with the
necessary process of building stocks to support the LED business in both the UK
and Germany has required a marked increase in working capital. Our policy has
always been to take a conservative approach to funding our activities and we
have ensured that the required investment has been covered by utilising our
cash reserves and a modest level of bank debt.
Jim Shawyer has served the group as Financial Director for over ten years but
due to a change in personal circumstances he has indicated his desire to step
down from this role. Jim is working with the rest of the board to identify a
suitable successor and will continue, post an appointment being made, to
support the group in a consultancy role.
While we remain conscious of the current economic uncertainties we believe we
are well placed to defend our position in the PCB markets and, with the LED
lighting market expanding, to achieve significant growth in our sector of this
market.
The half yearly report was approved by the board on 20 July 2011 and signed on
its behalf by:
Rudolf W. Weinreich Holders Technology plc
Executive Chairman Devonshire House
Manor Way
Borehamwood
Hertfordshire WD6 1QQ
20 July 2011
Consolidated income statement
for the half year ended 31 May 2011 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2011 May 2010 Nov 2010
Notes £'000 £'000 £'000
Revenue - continuing operations 3 10,153 7,130 16,314
Cost of sales (7,722) (5,235) (12,116)
Gross profit 2,431 1,895 4,198
Distribution costs (227) (207) (390)
Administrative expenses (1,920) (1,554) (3,273)
Impairment of goodwill - (57)
Acquisition costs - - (26)
Other operating income/ 15 (15) 39
(expenses)
Operating profit 299 119 491
Finance income 6 3 -
Finance costs (1) (1) (1)
Profit before taxation 304 121 490
Tax expense 4 (90) (50) (59)
Profit for the period 214 71 431
Profit for the period
attributable to:
Owners of the parent 220 74 507
Non-controlling interests (6) (3) (76)
Profit for the period 214 71 431
Total and continuing
Earnings per share 6 5.58p 1.88p 12.87p
Diluted earnings per share 6 5.54p 1.88p 12.87p
Consolidated statement of comprehensive income
for the half year ended 31 May 2011 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2011 May 2010 Nov 2010
£'000 £'000 £'000
Profit for the period 214 71 431
Exchange differences on (180)
translation of foreign operations 86 (120)
300 (49) 251
Attributable to:
Owners of the parent 317 (90) 305
Non-controlling interests (17) 41 (54)
300 (49) 251
Consolidated statement of changes in equity
for the half year ended 31 May 2011 (Unaudited)
Share Share Capital Translation Retained Total Non- Total
capital premium Redemptin reserve earnings attributabe controlling equity
£'000 £'000 Reserve £'000 £'000 to owners interest £'000
£'000 of parent £'000
£'000
Balance at 1 December
2009
416 1,531 1 831 2,972 5,751 145 5,896
Dividends - - - - (211) (211) - (211)
Employee share-based - - - - (4) (4) - (4)
payment options
Transactions with - - - - (215) (215) - (215)
owners
Profit/(Loss) for - - - - 507 507 (76) 431
the period
Exchange differences - - - (202) - (202) 22 180
on translating
foreign operations
Total comprehensive (202) 507 305 (54) 251
income for the year
Balance at 30 416 1,531 1 629 3,264 5,841 91 5,932
November 2010
Dividends - - - - (128) (128) - (128)
Employee share-based - - - - 6 6 - 6
payment options
Transactions with - - - - (122) (122) - (122)
owners
Profit/(loss) for - - - - 220 220 (6) 214
the period
Currency translation - - - 97 - 97 (11) 86
differences
Total comprehensive 97 220 317 (17) 300
income for the period
Balance at 31 May 416 1,531 1 726 3,362 6,036 74 6,110
2011
Consolidated balance sheet
at 31 May 2011 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2011 May 2010 Nov 2010
£'000 £'000 £'000
Assets
Non-current assets
Goodwill 319 346 318
Property, plant and equipment 534 603 582
Deferred tax assets 73 30 73
926 979 973
Current assets
Inventories 4,229 2,154 3,826
Trade and other receivables 3,475 3,027 2,721
Current tax 19 73 56
Cash and cash equivalents 336 1,028 888
8,059 6,282 7,491
Liabilities
Current liabilities
Overdrafts (323) - -
Trade and other payables (2,152) (1,221) (2,182)
Borrowings (36) (82) (52)
Current tax liabilities (121) (62) (55)
(2,632) (1,365) (2,289)
Net current assets 5,427 4,917 5,202
Non-current liabilities
Borrowings - (3) (4)
Retirement benefit liability (195) (133) (192)
Deferred tax liabilities (3) (7) (2)
Other liabilities (45) (28) (45)
(243) (171) (243)
Net assets 6,110 5,725 5,932
Shareholders' equity
Share capital 416 416 416
Share premium account 1,531 1,531 1,531
Capital redemption reserve 1 1 1
Retained earnings 3,362 2,924 3,264
Cumulative translation 726 667 629
adjustment
Equity attributable to the
shareholders of the parent 6,036 5,539 5,841
Non-controlling interest 74 186 91
6,110 5,725 5,932
Consolidated cash flow statement
for the half year ended 31 May 2011 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2011 May 2010 Nov 2010
£'000 £'000 £'000
Cash flows from operating activities
Operating profit 299 119 491
Share-based payment charge/(credit) 6 6 (4)
Depreciation 71 83 152
Impairment of goodwill - - 57
Currency translation 91 (155) (137)
(Gain)/loss on sale of property, plant (15) 15 16
and equipment
(Increase)/decrease in inventories (403) (188) (1,870)
(Increase)/decrease in trade and other (754) (596) (274)
receivables
(Decrease)/increase in trade and other (38) (117) 867
payables
Cash used in operations (743) (833) (702)
Corporation tax (paid)/received 14 (28) (75)
Net cash used in operations (729) (861) (777)
Cash flows from investing activities
Net borrowings acquired with subsidiary - (44) (44)
undertaking
Purchase of property, plant and (23) (51) (118)
equipment
Proceeds from sale of property, plant
and equipment 20 15 21
Interest received - - -
Net cash used in investing activities (3) (80) (141)
Cash flows from financing activities
Interest paid (1) (1) (1)
Loan repayments (19) - (26)
Finance lease repayments (1) - (3)
Equity dividends paid (128) (128) (211)
Net cash used in financing activities (149) (129) (241)
Net change in cash and cash equivalents (881) (1,070) (1,159)
Cash and cash equivalents at start of 888 2,095 2,095
period
Effect of foreign exchange rates 6 3 (48)
Cash and cash equivalents at end of period 13 1,028 888
Notes:
1. General information
Holders Technology plc is incorporated in the United Kingdom under the
Companies Act 2006. The principal activity of the group is to provide
specialised materials, equipment and components to the electronics industry.
2. Basis of preparation
The condensed consolidated half year financial statements have been prepared in
accordance with the AIM Rules for Companies and prepared on a basis consistent
with International Financial Reporting Standards ("IFRS") as adopted by the EU
and the accounting policies set out in the group's financial statements for the
year ended 30 November 2010.
The condensed consolidated half year financial statements are unaudited and
include all adjustments which management considers necessary for a fair
presentation of the group's financial position, operating results and cash
flows for the 6 month periods ended 31 May 2011 and 31 May 2010.
The half year financial statements do not constitute statutory accounts as
defined by Section 434 of the Companies Act 2006. A copy of the group's
financial statements for the year ended 30 November 2010 prepared in accordance
with IFRS as adopted by the EU has been filed with the Registrar of Companies.
The auditors' report on those financial statements was not qualified and did
not contain statements under s498(2) of s498(3) of the Companies Act 2006.
As permitted, the group has chosen not to adopt IAS 34 `Interim Financial
Statements' in preparing these half year financial statements and therefore the
half year financial information is not in full compliance with IFRS.
The preparation of half year financial statements requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
These half year financial statements have been prepared under the historical
cost convention.
The board of Holders Technology plc approved this half yearly report on 20 July
2011.
3. Segmental information
Management currently identifies two operating segments:
* PCB, which distributes materials, equipment and supplies to the PCB
industry.
* LED, which distributes LED-related components and lighting products to the
lighting industry.
Analysis by operating segment
for the half year ended 31 May
PCB LED Other Total
2011 2010 2011 2010 2011 2010 2011 2010
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 8,742 6,880 1,411 250 - - 10,153 7,130
Cost of sales (6,503) (5,055) (1,219) (180) - - (7,722) (5,235)
Gross profit 2,239 1,825 192 70 - - 2,431 1,895
Distribution costs (204) (191) (23) (16) - - (227) (207)
Administration expenses (1,486) (1,371) (451) (76) 17 (81) (1,920) (1,528)
Acquisition costs - - - (26) - - - (26)
Other operating income/ 15 (15) - - - - 15 (15)
(expenses)
Segment operating profit 564 248 (282) (48) 17 (81) 299 119
4. The tax charge for the six months ended 31 May 2011 is calculated based on
the tax rates applicable in the country in which each company operates.
Taxation includes a charge of £16,000 (2010: £27,000) relating to overseas
operations.
5. A final dividend of 3.25p per share on the total issued share capital of
3,939,551 10p ordinary shares, excluding treasury shares, was paid on 24
May 2011 in respect of the year ended 30 November 2010.
An interim dividend payment of 2.1p per share (2010: 2.1p per share) will be
payable on 4 October 2011 to shareholders on the register at 9 September 2011.
The shares will go ex-dividend on 7 September 2011. The interim dividend had
not yet been approved by the board at 31 May 2011 and accordingly, has not been
included as a liability as at that date.
6. The basic earnings per share are based on the profit for the period of £
220,000 (2010: £74,000) and on ordinary shares 3,939,551 (2010: 3,939,551),
the weighted average number of shares in issue during the year. Diluted
earnings per share are based on 3,972,169 ordinary shares (2010:
3,939,551), being the weighted average number of ordinary shares after an
adjustment of 32,618 shares (2010: nil) in relation to share options.
7. A copy of this half yearly report is being sent to shareholders and is
available for inspection at the company's registered office, Devonshire
House, Manor Way, Borehamwood, Herts WD6 1QQ and via its website
www.holderstechnology.com.
For further information, contact:
Holders Technology Plc 020 8731 4336
Rudi Weinreich, Executive Chairman
Victoria Blaisdell, Group Managing Director
Jim Shawyer, Group Finance Director
Northland Capital Partners Limited- Nomad & Broker 020 7796 8800
Shane Gallwey
Website www.holderstechnology.com
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