Half-year Report

RNS Number : 9869J

Holders Technology PLC

23 August 2019

 

Holders Technology plc

Half Yearly Report 2019

Specialised PCB Materials, Lighting and Control Solutions

Highlights

Holders Technology plc supplies specialty laminates and materials for printed circuit board manufacturers ("PCB") and operates as a lighting and control solutions ("LCS") provider to the lighting market and commercial buildings sector.

Unaudited results for the half year ended 31 May are summarised as follows:

		2019	2018
		£'000	£'000
Revenue	PCB	4,291	4,756
	LCS	1,737	1,426
	Total	6,028	6,182
Gross profit		1,579	1,585
Margins		26.2%	25.6%
Overheads		1,570	1,520
Operating profit		9	65
Finance income		11	-
Profit before tax		20	65
Taxation		29	-
Profit after tax		49	65
Earnings per share		1.17p	1.56p
Interim dividend per share		0.25p	0.25p
Net assets per share		100p	96p

Contents

1.   Chairman's statement

3.   Consolidated income statement

3.   Consolidated statement of comprehensive income

4.   Consolidated statement of changes in equity

5.   Consolidated balance sheet

6.   Consolidated cash flow statement

7.   Notes

Chairman's statement

Half year ended 31 May 2019

These interim results show a mixed outcome as compared to the equivalent period in 2018. PCB revenues have been adversely impacted by the overall economic environment, and the challenges faced by the automotive industry in Germany.  In contrast, revenues from the LCS divisions have grown strongly.

Group revenue decreased by 2.5% to £6.0m (H1 2018: £6.2m), gross margins increased by 0.6% to 26.2%, and the pre-tax result was a profit of £20,000 (H1 2018: profit of £65,000).

PCB

PCB sales in the period decreased by 9.8%, from £4,756,000 in 2018 to £4,291,000, while PCB gross margins decreased by 0.7% to 22.5%. At the end of the period the upgraded aluminium cutting and punching line in Germany was brought into full operation.  The improved cutting line is expected to provide higher throughput and result in efficiency gains in future periods.

PCB overheads as a percentage of sales increased by 1.7% to 18.1%. Overall our PCB activities recorded a pre-tax profit of £30,000 (H1 2018: profit £159,000).

LCS

Lighting and Control Solutions divisions in the UK and Germany made good progress during the period.  Revenue grew by 21.8% from £1,426,000 to £1,737,000, and gross margins improved from 33.7% to 35.2%.  Overheads as a percentage of revenue decreased from 33.2% to 31.1%, leading to a profit of £31,000 (H1 2018: loss £38,000).

Taxation

HMRC have now accepted our final claim for EU Cross Border tax which was shown as a liability of £43,000 at the end of November 2018.  The liability has been removed from the accounts during the period which resulted in a credit of £14,000 to interest paid and a credit of £29,000 to taxation.

Board Changes

On 7 May Thomas Bray stepped down from the Board, and I would like to thank him for his contribution to the Group over the last six years.  Thomas' role will be partly filled by Mat Hanson who joined us in February and is now UK Sales Director for our Lighting and Control Solutions division.  We plan to add further technical and sales capacity to LCS divisions in the UK and Germany over the next few months to support growing customer demand and our expanding portfolio of products and services. 

Summary

Our PCB business continues to face challenges due to unfavourable market conditions.  However, PCB operations remain profitable, and management has recently implemented targeted cost savings to further improve profitability.  The LCS divisions have achieved good growth and a modest profit in the first half, and the pipeline of sales opportunities is encouraging, with the acceptance in the market of wireless lighting controls.

Rudolf W. Weinreich                                                                                                     Holders Technology plc                               

Executive Chairman                                                                                                        27-28 Eastcastle Street

                                                                                                                                                London  W1W 8HD

For further information, contact:

Holders Technology plc

Rudi Weinreich, Executive Chairman                                                                                               01896 758781

Victoria Blaisdell, Group Managing Director

Paul Geraghty, Group Finance Director

SP Angel Corporate Finance LLP - Nomad and Broker

Matthew Johnson/ Jamie Spotswood, Corporate Finance                                                            020 3470 0470

Website

www.holdersgroup.com

Consolidated income statement

for the half year ended 31 May 2019 (Unaudited)

				Half year ended 31 May 2019		Half year ended 31 May 2018		Full year ended 30 Nov 2018
Notes				£'000		£'000		£'000
Revenue			3	6,028		6,182		12,486
Cost of sales				(4,449)		(4,597)		(9,220)
Gross profit				1,579		1,585		3,266
Distribution costs				(199)		(210)		(422)
Administrative expenses				(1,369)		(1,300)		(2,696)
Other operating (expenses)/ income				(2)		-		36
Operating profit				9		65		184
Finance income/ (costs)				11		-		(7)
Profit before taxation				20		65		177
Taxation			4	29		-		(8)
Profit for the period				49		65		169
Total and continuing
Basic earnings per share			6	1.17p		1.56p		4.06p
Diluted earnings per share			6	1.17p		1.46p		4.03p

Consolidated statement of comprehensive income

for the half year ended 31 May 2019 (Unaudited)

		Half year ended 31 May 2019		Half year ended 31 May 2018		Full year ended 30 Nov 2018
		£'000		£'000		£'000
Profit/ (loss) for the period		49		(65)		169
Exchange differences on translation of foreign operations		6		(12)		15
Total comprehensive income/ (expense) for the period		55		53		184

Consolidated statement of changes in equity

for the half year ended 31 May 2019 (Unaudited)

	Share   capital	Share premium	Capital redemption       reserve	Translation            reserve	Retained             earnings	Total    equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance 1 Dec 2017	416	1,590	1	207	1,718	3,932
Dividends	-	-	-	-	(21)	(21)
Share based payments	-	-	-	-	4	4
Transactions with owners	-	-	-	-	(17)	(17)
Profit for the year	-	-	-	-	169	169
Other comprehensive income for the year	-	-	-	15	-	15
Total comprehensive income for the year	-	-	-	15	169	184
Balance 30 Nov 2018	416	1,590	1	222	1,870	4,099
Dividends	-	-	-	-	(21)	(21)
New shares issued	6	-	-	-	-	6
Transactions with owners	6	-	-	-	(21)	(15)
Profit for the period	-	-	-	-	49	49
Other comprehensive expense for the period	-	-	-	6	-	6
Total comprehensive income for the period	-	-	-	6	49	55
Balance 31 May 2019	422	1,590	1	228	1,898	4,139

 

Consolidated balance sheet

at 31 May 2019 (Unaudited)

			Half year ended 31 May 2019		Half year ended 31 May 2018		Full year ended 30 Nov 2018
			£'000		£'000		£'000
Assets
Non-current assets
	Goodwill		318		318		318
	Property, plant and equipment		338		374		357
	Deferred tax assets		9		9		10
			665		701		685
Current assets
	Inventories		2,459		2,304		2,849
	Trade and other receivables		1,542		1,986		1,791
	Cash and cash equivalents		674		633		403
			4,675		4,923		5,043
Liabilities
Current liabilities
	Trade and other payables		(988)		(1,328)		(1,373)
	Current tax liabilities		-		(94)		(43)
			(988)		(1,422)		(1,416)
Net current assets			3,687		3,501		3,627
Non-current liabilities
	Retirement benefit liability		(207)		(227)		(204)
	Deferred tax liabilities		(6)		-		(9)
			(213)		(227)		(213)
Net assets			4,139		3,975		4,099
Shareholders' equity
	Share capital		422		416		416
	Share premium account		1,590		1,590		1,590
	Capital redemption reserve		1		1		1
	Retained earnings		1,898		1,773		1,870
	Cumulative translation adjustment		228		195		222
Equity attributable to the shareholders of the parent			4,139		3,975		4,099

Consolidated cash flow statement

for the half year ended 31 May 2019 (Unaudited)

		Half year ended 31 May 2019		Half year ended 31 May 2018		Full year ended 30 Nov 2018
		£'000		£'000		£'000
Cash flows from operating activities
	Profit before tax from continuing operations	20		65		177
	Share-based payment charge	-		-		4
	Depreciation	76		43		71
	Decrease/ (increase) in inventories	375		104		(427)
	Decrease/ (increase) in trade and other receivables	104		286		(407)
	(Decrease)/ increase in trade and other payables	(221)		(338)		571
	Interest (credit)/ expense	(14)		-		8
	Cash generated from/ (used in) operations	340		160		(3)
	Interest paid	-		-		(8)
	Corporation tax paid	-		(36)		(88)
	Net cash generated from/ (used in) operations	340		124		(99)
Cash flows from investing activities
	Purchase of property, plant and equipment	(57)		(49)		(58)
	Net cash used in investing activities	(57)		(49)		(58)
Cash flows from financing activities
	Equity dividends paid	(21)		(10)		(21)
	Ordinary shares issued	6		-		-
	Net cash used in financing activities	(15)		(10)		(21)
Net change in cash and cash equivalents		268		65		(178)
	Cash and cash equivalents at start of period	403		579		579
	Effect of foreign exchange rates	3		(11)		2
Cash and cash equivalents at end of period		674		633		403

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 2018.

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 2018 and 31 May 2019.

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 2018 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 22 August 2019.

3.            Segmental information

        Management currently identifies two operating segments:

-     PCB, which distributes materials, equipment and supplies to the PCB industry.

-     LCS, which provides lighting and control solutions to the lighting market and commercial buildings sector.

Notes (continued):

3.            Segmental information (continued)

Analysis by operating segment

                for the half year ended 31 May

	PCB		LCS		Central Costs		Total
	2019	2018	2019	2018	2019	2018	2019	2018
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	4,291	4,756	1,737	1,426	-	-	6,028	6,182
Cost of sales	3,324	3,651	1,125	946	-	-	4,449	4,597
Gross Profit	967	1,105	612	480	-	-	1,579	1,585
Distribution costs	159	165	40	45	-	-	199	210
Administration costs	778	781	541	473	52	56	1,371	1,310
Segment Profit/ (Loss)	30	159	31	(38)	(52)	(56)	9	65

4.            The tax provision for the six months ended 31 May 2019 is calculated based on the tax rates applicable in the country in which each company operates.

5.            A final dividend of 0.50p per share on the total issued share capital of 4,224,164 10p ordinary shares was paid on 21 May 2019 in respect of the year ended 30 November 2018. 

An interim dividend payment of 0.25p per share (2018: 0.25p per share) will be payable on 8 October 2019 to shareholders on the register at 13 September 2019.  The shares will go ex-dividend on 12 September 2019.  The interim dividend had not been approved by the board at 31 May 2019 and accordingly, has not been included as a liability as at that date.

6.            The basic earnings per share for continuing operations are based on the profit for the period of £49,000 (2018: profit £65,000) and on 4,172,759 ordinary shares (2018: 4,159,551), the weighted average number of shares in issue during the period.  Diluted earnings per share for continuing operations are based on 4,194,313 ordinary shares (2018: 4,159,551), being the weighted average number of ordinary shares after an adjustment of 21,554 shares (2018: nil shares) 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 offices at Holders Technology (UK) Ltd., Units 1-4, Block 9, Tweedbank Industrial Estate, Galashiels TD1 3RS and via its website www.holdersgroup.com.

 

END

 

 

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