Final Results

Titon Holdings PLC 13 December 2001 TITON HOLDINGS PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2001 Chairman's Statement Financial Results Profit Before Taxation for the year was 6.4% down on last year at £1.81 million (2000: £1.94 million) and basic earnings per share were 7.3% down at 11.25p (2000: 12.14p). Turnover increased to £14.74 million (2000: £14.64 million). Capital expenditure for the year of £0.55 million has been considerably lower than the previous year, during which we completed our factory extension. (2000: £1.15 million). A significant proportion of this year's expenditure has been on tooling for new product ranges, which will begin to benefit us during the coming year. Net cash balances have increased throughout the period to stand at £4.28 million (2000: £3.83 million). The Directors are proposing a final dividend of 4.7p per ordinary share (2000: 4.5p), making a total of 7.0p for the year. (2000: 6.8p). The dividend will be payable on 22 February 2002 to shareholders on the register on 25 January 2002. The ex-dividend date will be 23 January 2002. Sales Commentary As reported in the Interim results, the severe winter weather had stalled our growth during the first part of our financial year. However, I am pleased to record that there has since been an improvement in sales, with certain sectors of operation showing encouraging progress. Although unable to record an overall improvement on last year's results, the modest growth in the second half is most satisfactory in a very competitive market. Our sales, marketing and administration staff has been strengthened with several new members this year, thus reinforcing our commitment of service to our customers, and our improving and aggressive approach to our market. Ongoing training for our enlarged team enables us to provide the customer with a first class level of technical support and service for our varied and expanding range of products. We continue to gain market penetration with our Select range of ventilators and window handles, and increasing demand is justifying the investment in the automation of assembly on these lines. I am also pleased to record that in keeping with our own products, our bought-in product ranges have also shown improving sales during the second half. The modest growth shown by our exports last year has not been maintained, and has resulted in the need to reduce our export department for the coming year. Although the European and Scandinavian markets are not reaching earlier growth estimates, there are promising signs for the future. The United States market has not fulfilled our expectations in recent years, and steps have been taken to reappraise and initiate changes, although our presence will remain aggressive and committed. Manufacturing The significant investment in our manufacturing plant over the last few years has enabled us to maintain our gross margins, despite pressure on sales prices and a greater complexity of product lines. The delay in completion of automatic assembly of the Select range of handles has not reduced our commitment to completing this project and recent results are encouraging. Additional product variations have recently contributed to a high workload for our technical and engineering team, which is being further strengthened. Titon continues to invest in high quality machinery, and in employee training, to be prepared for all eventualities in a competitive and rapidly changing market place. Personnel I am pleased to announce that Mr David Ruffell will become Chief Executive of the Titon Group as from 1 January 2002. It has always been my intention, following the sad death of Mr Peter Farrar, that I would not retain this post indefinitely and throughout our planned and graduated process of change David has displayed the enthusiasm and ability to provide the driving force that will take Titon forward in the future. I am delighted with his decision to accept this post. I would like to thank all employees for their continued and dedicated efforts throughout another challenging year Prospects This has been a difficult year of trading, with inclement winter weather, and a disappointing time for our exports. Although we have no control over the elements, we have taken steps to reduce our overheads in our Export Department, and when emerging and expected new business becomes viable, the Company will re-invest in these markets to be able to capitalise on growth opportunities. New Building Regulation changes will become operational in 2002, and the Titon team is currently evaluating their impact on the Company, and on the market, to determine any products that may be required to service these changes. As these Regulations, in the main, concern ventilation related products, it is expected that opportunities for expansion may be forthcoming. Our commitment to growth continues, however, world events may not pass us by. It is possible that global economic slowdown may impact on the business although this has not been evident during the first two months of the current year. It is not easy to judge how the next period will evolve, but with the enthusiastic team at Titon, and with new and exciting products becoming available, we remain optimistic about the future. John Anderson Chairman and Chief Executive 13th December 2001 Titon Holdings Plc Consolidated Profit and Loss Account for the year ended 30 September 2001 Restated 2001 2000 £'000 £'000 Turnover 14,737 14,641 Cost of sales 10,265 10,253 ----------- ----------- Gross profit 4,472 4,388 Distribution costs 719 713 Administrative expenses 2,160 1,942 ----------- ----------- 2,879 2,655 ----------- ----------- Operating profit 1,593 1,733 Interest receivable 225 211 Interest payable and similar charges (4) (7) ----------- ----------- Profit on ordinary activities before taxation 1,814 1,937 Taxation on profit on ordinary activities 570 598 ----------- ----------- Profit on ordinary activities after taxation attributable to the members of Titon Holdings plc 1,244 1,339 Dividends 774 751 ----------- ----------- Retained profit for the financial year 470 588 ----------- ----------- Earnings per share - basic 11.25p 12.14p - diluted 11.23p 12.12p Dividends per share Interim paid 2.30p 2.30p Final proposed 4.70p 4.50p ----------- ----------- 7.00p 6.80p ----------- ----------- CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the year ended 30 September 2001 Restated 2001 2000 £'000 £'000 Profit for the year and total recognised gains and losses relating to the year 1,244 1,339 Prior year adjustment (67) - Exchange difference on retranslation of net assets of subsidiary undertaking - - ------- ------- Total gains and losses recognised since the last annual report 1,177 1,339 ------- ------- Titon Holdings Plc Consolidated Balance Sheet at 30 September 2001 Restated 2001 2000 £'000 £'000 Fixed assets Tangible assets 3,550 3,629 Current assets Stocks 2,235 2,119 Debtors 3,186 2,913 Cash at bank and in hand 4,462 3,907 --------- -------- 9,883 8,939 Creditors: Amounts falling due within one year (2,961) (2,599) --------- -------- Total assets less current liabilities 6,922 6,340 --------- -------- Deferred taxation (89) (56) --------- -------- 10,383 9,913 --------- -------- Capital and reserves Called up share capital 1,106 1,106 Share premium account 819 819 Profit and loss account 8,458 7,988 --------- -------- Equity shareholders' funds 10,383 9,913 --------- -------- Titon Holdings Plc Consolidated Cash Flow Statement for the year ended 30 September 2001 2001 2000 £'000 £'000 Net cash inflow from operating activities (note 2) 2,061 2,230 --------- --------- Returns on investments and servicing of finance Interest received 225 211 Interest paid (4) (7) --------- --------- 221 204 --------- --------- Taxation UK corporation tax (527) (412) --------- --------- Capital expenditure Purchase of tangible fixed assets (588) (1,236) Sale of tangible fixed assets 37 79 --------- -------- (551) (1,157) --------- --------- Equity dividends paid (752) (727) --------- --------- Net cash inflow before use of management of 452 138 liquid resources and financing Management of liquid resources Purchase of treasury deposits (600) (87) Financing Issue of ordinary share capital - 20 --------- -------- (Decrease)/increase in cash (note 3) (148) 71 --------- -------- TITON HOLDINGS PLC Notes to the preliminary results for year ended 30 September 2001 Notes: 1. Earnings per share has been calculated in accordance with FRS14. Basic earnings per share has been calculated by dividing the profit attributable to shareholders of £1,244,000 (2000: £1,339,000) by the weighted average number of ordinary shares in issue during the year of 11,062,200 (2000: 11,022,073) The diluted earnings per share has been calculated by dividing the profit attributable to shareholders £1,244,000 (2000: £1,339,000) by the weighted average number of ordinary shares and dilutive ordinary shares during the year of 11,074,916 (2000: 11,050,032). All dilutive ordinary shares relate to share options. 2. Reconciliation of operating profit to net cash inflow from operating activities 2001 2000 £'000 £'000 Operating profit 1,593 1,733 Depreciation 640 702 Increase in stocks (116) (73) (Increase)/decrease in debtors (273) 187 Increase/(decrease) in creditors 227 (283) Profit on sale of fixed assets (10) (36) -------- ------- Net cash inflow from operating activities 2,061 2,230 -------- ------- 3. Reconciliation of net cash inflow to movement in net funds 2001 2000 £'000 £'000 Increase/(decrease) in cash in the year (148) 71 Increase in liquid resources 600 87 ------- ------- Change in net funds resulting from cashflows and movement in net funds in the year 452 158 Opening net funds 3,827 3,669 ------- ------- Closing net funds 4,279 3,827 ------- ------- 4. The Preliminary Announcement does not constitute statutory accounts. The auditors' report on the full accounts for the ended 30 September 2001 has yet to be signed. 5. The actual results for the year ended 30 September 2000 as shown in this statement are an abridged version of the Group's 2000 accounts which have been filed with Registrar of Companies and which received an unqualified audit report. The results for the year ended 30 September 2001 have been prepared on a basis consistent with the accounting policies set out in the statutory accounts for the year ended 30 September 2000, with the exception of deferred taxation, as explained below. FRS 19 'Deferred Taxation' was issued on 7 December 2000 and is mandatory for years ending on or after 23 January 2002. The Group has decided to adopt FRS 19 early. The Group has accounted for this by way of a prior year adjustment and accordingly the prior years balance sheet and profit and loss account have been restated. The effect on the current year Group profit and loss is an increase in the tax charge of £33,000. Comparative figures have been restated, resulting in a decrease in the prior year tax charge of £11,000. The effect on the Group opening balance sheet at 1 October 1999 was a deferred tax liability of £67,000, which after a movement of £11,000 credit in the tax charge for the year ended 30 September 2000, gives an opening balance at 1 October 2000 of £56,000, which can be seen in the attached Group Balance Sheet. 6. The Preliminary Announcement was approved by the Board of Directors on 12 December 2001. 7. This statement is being sent to shareholders and will be available from the Company's registered office at International House, Peartree Road, Stanway, Colchester, Essex CO3 5JX.

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