Half-yearly Report
Holders Technology plc
Providers of specialised materials, components and solutions to the
electronics and lighting industries
Half yearly results for the 6 months ended 31 May 2012
Holders Technology plc (AIM: HDT) announces its unaudited half yearly results
for the 6 month period ended 31 May 2012.
Highlights
Half year ended 31 May
2012 2011
Revenue £8.0m £10.1m
(Loss)/ Profit before tax (£0.1m) £0.3m
Operating cash flow before tax £0.8m (£0.7m)
Earnings per share (1.98p) 5.58p
Interim dividend per share 1.00p 2.10p
Net assets per share at 31 May 147p 155p
Chairman's statement
The results for the six months to 31st May 2012 were below our
expectations for the period.
PCB operations
The first half was very adversely impacted by the continuing
economic uncertainties in the European PCB market, particularly in the opening
months of the period. The latter months saw some recovery and overall our PCB
activities recorded a broadly breakeven position.
LED operations
The goal we set for our LED activities in the period was to
continue building this area of our business and progress towards this was
made. Whilst preserving profitability in UK operations we are seeking to
further widen both the customer base of the UK business and the range of
solutions it is able to offer. Progress continues to be made in regard to both
of these objectives.
The task for our LED division in Europe is both to widen the
customer base and to extend the range of solutions whilst moving towards
breakeven. Progress towards this latter objective continues to be made with
improvements in the qualified order prospects pipeline providing particular
encouragement for potential future growth.
As a Group we remain committed to rigorous control of both costs
and working capital and we continue to achieve our objectives in this regard.
We do this to ensure we remain able to invest in the LED segment of our
business. Financial flexibility also enables us periodically to purchase
certain commodity products in larger lots thus assisting our efforts to
maintain acceptable margins.
It has been, and continues to be, our policy to ensure that
dividends paid reflect the success of the company. Given the loss in the first
half we believe it is appropriate to declare an interim dividend of 1p per
share (2011: 2.10p).
I started this statement by saying that the results for this half
year were below our initial expectations. We have thoroughly reviewed the
prospects for the second half of the year, and while we do expect an
improvement in trading which will offset the shortfall in the first half, it
appears probable that the outturn for the full year will be below market
expectation.
We are operating in difficult conditions but as a board we continue
to believe that we are making progress in strengthening the Group so as to be
able to benefit when more settled times return.
Rudolf W. Weinreich Holders Technology plc
Executive Chairman Elstree House
Elstree Way
Borehamwood
18 July 2012 Hertfordshire WD6 1SD
Consolidated income statement
for the half year ended 31 May 2012 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2012 May 2011 Nov 2011
Notes £'000 £'000 £'000
Revenue - continuing operations 3 7,980 10,153 19,636
Cost of sales (6,045) (7,722) (15,127)
Gross profit 1,935 2,431 4,509
Distribution costs (199) (227) (404)
Administrative expenses (1,835) (1,920) (3,828)
Other operating income/(expenses) - 15 98
Operating profit (99) 299 375
Finance income 1 6 -
Finance costs (1) (1) (12)
Profit before taxation (99) 304 363
Taxation 4 15 (90) (123)
(Loss)/ profit for the period (84) 214 240
(Loss)/ profit for the period
attributable to:
Owners of the parent (78) 220 264
Non-controlling interests (6) (6) (24)
(Loss)/ profit for the period (84) 214 240
Total and continuing
Earnings per share 6 (1.98p) 5.58p 6.70p
Diluted earnings per share 6 (1.90p) 5.54p 6.63p
Consolidated statement of comprehensive income
for the half year ended 31 May 2012 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2012 May 2011 Nov 2011
£'000 £'000 £'000
(Loss)/ profit for the period (84) 214 240
Reclassification adjustment
related to terminated foreign 412
operations
Exchange differences on
translation of foreign 2 86 60
operations
(82) 300 712
Attributable to:
Owners of the parent (75) 317 788
Non-controlling interests (7) (17) (76)
(82) 300 712
Consolidated statement of changes in equity
for the half year ended 31 May 2012 (Unaudited)
Total
Capital attributable Non-
Share Share redemption Translation Retained to owners controlling Total
capital premium reserve reserve earnings of parent interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 December 2010 416 1,531 1 629 3,264 5,841 91 5,932
Dividends - - - - (211) (211) - (211)
Employee share-based
payment options - - - - (4) (4) - (4)
Transactions with owners - - - - (215) (215) - (215)
Profit/(loss) for the period - - - - 264 264 (24) 240
Reclassification adjustment
related to terminated foreign
operations - - - (412) 412 - - -
Exchange differences on
translating foreign
operations - - - 51 - 51 9 60
Total comprehensive
income for the year (361) 676 315 (15) 300
Balance at 30 November 2011 416 1,531 1 268 3,725 5,941 76 6,017
Dividends - - - - (128) (128) - (128)
Employee share-based
payment options - - - - - - - -
Transactions with owners - - - - (128) (128) - (128)
Loss for the period - - - - (78) (78) (6) (84)
Exchange differences on
translating foreign
operations - - - 3 - 3 (1) 2
Total comprehensive
income for the period 3 (78) (75) (7) (82)
Balance at 31 May 2012 416 1,531 1 271 3519 5,738 69 5,807
Consolidated balance sheet
at 31 May 2012 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2012 May 2011 Nov 2011
£'000 £'000 £'000
Assets
Non-current assets
Goodwill 319 319 318
Property, plant and 502 534 556
equipment
Deferred tax assets 73 73 72
894 926 946
Current assets
Inventories 3,109 4,229 3,834
Trade and other receivables 2,786 3,475 2,951
Current tax 187 19 95
Cash and cash equivalents 741 336 67
6,823 8,059 6,947
Liabilities
Current liabilities
Overdrafts (81) (323) -
Trade and other payables (1,546) (2,152) (1,591)
Borrowings (22) (36) (26)
Current tax liabilities (35) (121) (35)
(1,684) (2,632) (1,652)
Net current assets 5,139 5,427 5,295
Non-current liabilities
Borrowings - - -
Retirement benefit liability (169) (195) (167)
Deferred tax liabilities (28) (3) (28)
Other liabilities (29) (45) (29)
(226) (243) (224)
Net assets 5,807 6,110 6,017
Shareholders' equity
Share capital 416 416 416
Share premium account 1,531 1,531 1,531
Capital redemption reserve 1 1 1
Retained earnings 3,519 3,362 3,725
Cumulative translation 271 726 268
adjustment
Equity attributable to the 5,738 6,036 5,941
shareholders of the parent
Non-controlling interest 69 74 76
5,807 6,110 6,017
Consolidated cash flow statement
for the half year ended 31 May 2012 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2012 May 2011 Nov 2011
£'000 £'000 £'000
Cash flows from operating activities
Operating profit (99) 299 375
Share-based payment charge/(credit) - 6 (4)
Depreciation 74 71 144
Impairment of fixed assets - - 20
Currency translation 5 91 40
(Gain)/loss on sale of property, plant - (15) (16)
and equipment
(Increase)/decrease in inventories 725 (403) (8)
(Increase)/decrease in trade and 165 (754) (257)
other receivables
(Decrease)/increase in trade and (44) (38) (582)
other payables
Movement in contingent consideration - - (16)
Cash generated from/ (used in) 826 (743) (304)
operations
Corporation tax (paid)/received (78) 14 (155)
Net cash generated from/ (used in) 748 (729) (459)
operations
Cash flows from investing activities
Purchase of property, plant and (24) (23) (137)
equipment
Proceeds from sale of property, 1 20 24
plant and equipment
Interest received 1 - -
Net cash used in investing activities (22) (3) (113)
Cash flows from financing activities
Interest paid (1) (1) (12)
Loan repayments (4) (19) (27)
Finance lease repayments - (1) (3)
Equity dividends paid (128) (128) (211)
Net cash used in financing activities (133) (149) (253)
Net change in cash and cash 593 (881) (825)
equivalents
Cash and cash equivalents at 67 888 888
start of period
Effect of foreign exchange rates - 6 4
Cash and cash equivalents at end of period 660 13 67
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, components and solutions to the electronics and
lighting industries.
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 2011.
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 2012 and 31 May 2011.
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 2011 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 18
July 2012.
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 solutions to the
lighting industry.
Analysis by operating segment
for the half year ended 31 May
PCB LED Other Total
2012 2011 2012 2011 2012 2011 2012 2011
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 5,931 8,742 2,049 1,411 - - 7,980 10,153
Cost of sales (4,454) (6,503) (1,591) (1,219) - - (6,045) (7,722)
Gross profit 1,477 2,239 458 192 - - 1,935 2,431
Distribution costs (172) (204) (27) (23) - - (199) (227)
Administration
expenses (1,302) (1,486) (503) (451) (30) 17 (1,835) (1,920)
Other operating income/(expenses) - 15 - - - - - 15
Segment operating
profit 3 564 (72) (282) (30) 17 (99) 299
4. The tax provision for the six months ended 31 May 2012 is calculated based
on the tax rates applicable in the country in which each company operates.
Taxation includes a tax credit of £39,000 (2011: tax charge of £16,000)
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 22 May
2012 in respect of the year ended 30 November 2011.
An interim dividend payment of 1.0p per share (2011: 2.1p per share) will be
payable on 2 October 2012 to shareholders on the register at 7 September 2012.
The shares will go ex-dividend on 5 September 2012. The interim dividend had
not been approved by the board at 31 May 2012 and accordingly, has not been
included as a liability as at that date.
6. The basic earnings per share are based on the loss for the period of
£78,000 (2011: profit £220,000) and on ordinary shares 3,939,551 (2011:
3,939,551), the weighted average number of shares in issue during the year.
Diluted earnings per share are based on 4,094,745 ordinary shares (2011:
3,972,169), being the weighted average number of ordinary shares after an
adjustment of 155,194 shares (2011: 32,618) 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, Elstree House,
Elstree Way, Borehamwood, Herts WD6 1SD and via its website
www.holderstechnology.com.
For further information, contact:
Holders Technology Plc 020 8236 1490
Rudi Weinreich, Executive Chairman
Victoria Blaisdell, Group Managing Director
Paul Geraghty, Group Finance Director
Northland Capital Partners Limited - Nomad & Broker 020 7796 8800
Shane Gallwey
Website www.holderstechnology.com
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