Interim Results to 31.03.08

Titon Holdings PLC 08 May 2008 Titon Holdings Plc Interim Results for the six months ended 31 March 2008 Business Review Financial performance Profit before taxation for the six months was 65.6% lower than the same period last year at Â£151,000 (2007: Â£439,000) on turnover 2.0% lower at Â£8,500,000 (2007: Â£8,670,000). We have maintained our sales levels in the UK, whilst our export sales for the period have fallen by 17% to Â£891,000 (2007: Â£1,075,000). Earnings per share for the period were 64.3% lower at 1.06p (2007: 2.97p) and the Directors have declared an interim dividend of 1.0p per share (2007: 2.3p per share). Tight control over Working Capital along with reduced levels of capital expenditure have helped cash balances to increase by Â£256,000 over the six-month period to stand at Â£1,921,000 (2007: Â£1,671,000). Trading commentary As I reported in the last Annual Report and Accounts, trading during the second half of the 2006/2007 financial year was very difficult and the Group only just returned a profit over that six month period. I informed shareholders at the time that a programme of measures had been initiated that was designed to restore profitability during the current year. I am pleased to report that the result of these measures has been a modest profit for the first six months of this year. Some of the profit improvement measures that are being implemented will be phased in over the year as contractual commitments end and will not have had a full impact in the first half-year. We will continue to make every effort to improve the Group's profitability. One of the results of our cost reduction programme has been a 5% fall in our payroll costs in the period when compared to the 2nd half of 2006/7. Our employees have not been given a pay increase this year and I would like to take this opportunity to thank them all for their contribution in these difficult circumstances. Overall employee numbers were 239 at the end of March 2008 compared to 256 at 30 September 2007. Escalating raw material price increases have been a great issue for most manufacturers although, during this first half-year, we have been able to pass on some of this increased cost to our customers. We have, however, continued to see costs increase - not least as a result of the Euro strengthening by a further 12% in the six months against Sterling. Towards the end of the period, confidence within the UK housing market has been adversely affected by the international financial credit crisis and the number of new housing starts has significantly reduced. It is apparent that the effects of this are not limited to the UK, with most European markets experiencing similar declines. The full impact of this change in market confidence is as yet unknown, but will almost certainly require a further adjustment to our cost base in the second half-year. Prospects New building processes are being introduced as construction of 'tighter' homes becomes a requirement for the Government's 'Sustainable Homes' initiative. Titon has already adjusted to the requirement for improved ventilation systems for domestic use and is able to supply highly efficient units that provide excellent SAP (Standard Assessment Procedure) ratings. Additional products to be introduced later in the summer will further improve upon the performance of those currently available. Integrated within these systems our natural ventilation products will ensure both 'energy neutral' and 'fail-safe' options to help minimise the impact on our national energy resources; a factor which we believe to be essential as we progress. As previously mentioned, most sectors of our markets remain under pressure and there is no doubt that the remainder of this year will be challenging. We will continue with our longer-term investment plans in the UK powered ventilation market whilst re-organising our traditional UK hardware business to reflect the current market conditions Principal risk and uncertainties The key financial and non-financial risks faced by the Group are disclosed in the Group's Annual Report and Accounts for the year ended 30 September 2007 within the Directors' Report (page 7) available at www.titonholdings.com. The Board considers that these remain a current reflection of the risks and uncertainties facing the business. Statement of Directors' responsibilities The Directors confirm that this condensed set of consolidated financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8. The Directors of Titon Holdings Plc are listed in the Titon Holdings Plc Annual Report and Accounts 2007. A list of current directors is maintained on the Group's website: www.titonholdings.com. On behalf of the Board J N Anderson D A Ruffell Chairman Chief Executive 8 May 2008 Titon Holdings Plc Consolidated Interim Income Statement for the six months ended 31 March 2008 Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Note Â£'000 Â£'000 Â£'000 Revenue 2 8,500 8,670 17,285 Cost of sales 6,640 6,641 13,482 --------- --------- --------- Gross Profit 1,860 2,029 3,803 Distribution costs 310 292 618 Administration costs 1,446 1,349 2,828 --------- --------- --------- 1,756 1,641 3,446 Operating profit 104 388 357 Finance income 47 51 102 --------- --------- --------- Profit before taxation 151 439 459 Tax expense 3 (39) (126) (15) --------------------------------------- --------- --------- --------- Profit for the period attributable to the equity holders of the parent 7 112 313 444 --------------------------------------- --------- --------- --------- Earnings per share - basic 5 1.06p 2.97p 4.21p - diluted 5 1.06p 2.97p 4.21p Titon Holdings Plc Consolidated Interim Statement of Recognised Income and Expense for the six months ended 31 March 2008 Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Note Â£'000 Â£'000 Â£'000 Profit for the period attributable to the equity holders of the parent 7 112 313 444 Exchange difference on re-translation of net assets of overseas subsidiary undertakings 7 4 16 --------------------------------------- --------- --------- --------- Total recognised income and expense for the period attributable to equity holders of the parent 119 317 460 --------------------------------------- --------- --------- --------- Titon Holdings Plc Consolidated Interim Balance Sheet at 31 March 2008 31.3.08 31.3.07 30.9.07 Note Â£'000 Â£'000 Â£'000 Assets Property, plant and equipment 6 4,481 4,854 4,662 Intangible assets 39 63 58 -------- -------- -------- Total non-current assets 4,520 4,917 4,720 Inventories 2,924 3,344 2,983 Trade and other receivables 4,027 3,785 3,785 Corporation tax 17 - 31 Cash at bank 1,958 1,674 1,678 -------- -------- -------- Total current assets 8,926 8,803 8,477 ------------------------------------------- -------- -------- -------- Total Assets 13,446 13,720 13,197 ------------------------------------------- -------- -------- -------- Liabilities Deferred tax 170 185 170 -------- -------- -------- Total non-current liabilities 170 185 170 Trade and other payables 2,493 2,491 2,190 Bank overdraft 37 3 13 Corporation tax - 118 - -------- -------- -------- Total current liabilities 2,530 2,612 2,203 ----------------------------------------- -------- -------- -------- Total Liabilities 2,700 2,797 2,373 ----------------------------------------- -------- -------- -------- Equity Share capital 1,056 1,056 1,056 Share premium reserve 865 865 865 Capital redemption reserve 56 56 56 Translation reserve 40 21 33 Share schemes reserve 3 3 3 Retained earnings 8,726 8,922 8,811 ----------------------------------------- -------- -------- -------- Total Equity attributable to the equity holders of the parent 7 10,746 10,923 10,824 ----------------------------------------- -------- -------- -------- ----------------------------------------- -------- -------- -------- Total Liabilities and Equity 13,446 13,720 13,197 ----------------------------------------- -------- -------- -------- Titon Holdings Plc Consolidated Interim Cash Flow Statement for the six months ended 31 March 2008 Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Note Â£'000 Â£'000 Â£'000 Cash generated from operating activities Operating profit 104 388 357 Depreciation of property, plant & equipment 333 339 675 Amortisation on intangible assets 12 17 35 Decrease / (increase) in inventories 64 (391) (33) Increase in receivables (240) (160) (149) Increase / (decrease) in payables and other current liabilities 303 129 (168) Profit on sale of plant & equipment (6) - (31) Share based payment - equity settled - 1 1 --------------------------------------- -------- -------- ------- Cash generated from operations 570 323 687 --------------------------------------- -------- -------- ------- Income taxes paid (25) (68) (121) --------------------------------------- -------- -------- ------- Net cash generated from operating activities 545 255 566 --------------------------------------- -------- -------- ------- Cash flows from investing activities Purchase of plant & equipment 6 (153) (195) (363) Purchase of intangible assets - (13) (26) Proceeds from sale of plant & equipment 14 11 66 Interest received 47 51 102 --------------------------------------- -------- -------- ------- Net cash used in investing activities (92) (146) (221) --------------------------------------- -------- -------- ------- Cash flows from financing activities Dividends paid to equity shareholders 4 (197) (507) (749) --------------------------------------- -------- -------- ------- Net cash used in financing activities (197) (507) (749) --------------------------------------- -------- -------- ------- Net increase / (decrease) in cash & cash equivalents 256 (398) (404) Cash & cash equivalents at beginning of period 1,665 2,069 2,069 --------------------------------------- -------- -------- ------- Cash & cash equivalents at end of period 1,921 1,671 1,665 --------------------------------------- -------- -------- ------- Cash & cash equivalents comprise: Cash at bank 1,958 1,674 1,678 Bank overdraft (37) (3) (13) --------------------------------------- -------- -------- ------- Cash & cash equivalents at end of period 1,921 1,671 1,665 --------------------------------------- -------- -------- ------- Titon Holdings Plc Notes to the Condensed Consolidated Interim Statements at 31 March 2008 1. Basis of preparation These condensed and consolidated interim financial statements of the Group for the six months ended 31 March 2008 incorporate Titon Holdings Plc ("the Company") and its subsidiaries (together referred to as "the Group"). The consolidated interim financial statements have been prepared using accounting policies set out in the Annual Report and Accounts 2007 and in accordance with IAS 34, 'Interim financial reporting', as adopted by the European Union and were authorised by the Board of Directors for release on 8 May 2008. The accounting standard IFRS 7, Financial Instruments: Disclosures is mandatory for accounting periods beginning on or after 1 January 2007. As this interim statement contains only condensed financial statements, full IFRS 7 disclosures are not required at this stage. The full disclosures, including any sensitivity analysis to market risk will be given in the Group's Annual Report. The consolidated interim financial statements for the six months ended 31 March 2008 and 31 March 2007 have not been audited or reviewed. The results for the year end 30 September 2007 and the balance sheet as at that date are abridged from the Group's Annual Report and Financial Statements 2007, prepared under IFRS, which have been delivered to the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain an emphasis of matter paragraph and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The interim statement does not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. 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 0JL. 2. Segment reporting For management and internal reporting purposes, the Group's operations are currently analysed according to geographical regions. This is the basis on which the Group reports its primary segment information. The Group's business is comprised of the following reportable geographic segments: United Kingdom Rest of the World Segment information about the geographic regions is presented below. United Kingdom Rest of the World Six Months Six Months Year to Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 to 31.3.08 to 31.3.07 30.9.07 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 External 7,609 7,595 15,275 891 1,075 2,010 Intercompany - - - 135 185 297 ------------- ------- ------- ------ ------- ------- ------ Total Revenue 7,609 7,595 15,275 1,026 1,260 2,307 ------------- ------- ------- ------ ------- ------- ------ Segment result 1,059 1,132 2,173 61 111 138 Consolidated Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Â£'000 Â£'000 Â£'000 External 8,500 8,670 17,285 Intercompany 135 185 297 ------------- ------- ------- ------ Total Revenue 8,635 8,855 17,582 ------------- ------- ------- ------ Segment result 1,120 1,243 2,311 Unallocated expenses (1,016) (855) (1,954) ------- ------- ------ Operating profit 104 388 357 Finance income 47 51 102 ------- ------- ------ Profit before tax 151 439 459 Tax expense (39) (126) (15) --------------------------------------- ------- ------- ------ Profit for the period attributable to the equity holders of the parent 112 313 444 --------------------------------------- ------- ------- ------ Balance Sheet 31.3.08 31.3.07 30.9.07 Â£'000 Â£'000 Â£'000 Assets - Segment total assets United Kingdom 13,210 13,400 12,980 Rest of World 236 320 217 ------------------------------------------ ------- -------- ------- Consolidated 13,446 13,720 13,197 ------------------------------------------ ------- -------- ------- Liabilities - Segment total liabilities United Kingdom 2,664 2,769 2,351 Rest of World 36 28 22 ----------------------------------------- ------- -------- ------- Consolidated 2,700 2,797 2,373 ----------------------------------------- ------- -------- ------- 3. Tax expense Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Â£'000 Â£'000 Â£'000 UK corporation tax 29 105 34 Adjustment in respect of over provision in prior years 4 - (28) --------------------------------------- ----------- -------- ------- Total UK corporation tax 33 105 6 --------------------------------------- ----------- -------- ------- Overseas tax 6 6 9 Adjustment in respect of over provision - - - in prior years --------------------------------------- ----------- -------- ------- Total overseas tax 6 6 9 --------------------------------------- ----------- -------- ------- Total current tax 39 111 15 --------------------------------------- ----------- -------- ------- Deferred tax - 15 - ----------- -------- ------- Total tax 39 126 15 ----------- -------- ------- Tax for the interim period is charged at 23.2% (six months to 31 March 2007: 28.7%) representing the best estimate of the average annual effective income tax rate for the full financial year. 4. Dividends An interim dividend in respect of the six months ended 31 March 2008 of 1.0p per share, amounting to a total dividend of Â£106,000 was approved by the Directors of Titon Holdings Plc on 7 May 2008. These consolidated interim statements do not reflect the dividend payable. The interim dividend will be payable on 26 June 2008 to the shareholders on the register on 30 May 2008. The ex dividend date is 28 May 2008. The following dividends have been recognised and paid by the Company: Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Date Pence paid per share Â£'000 Â£'000 Â£'000 Final in respect of the year end 30.09.06 21.2.07 4.8 - 507 507 Interim in respect of the year end 30.09.07 30.6.07 2.3 - - 242 Final in respect of the year end 30.09.07 18.2.08 2.3 197 - - -------- -------- ------- 197 507 749 -------- -------- ------- 5. Earnings per ordinary share Basic earnings per share has been calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period, being 10,555,650 (six months ended 31 March 2007: 10,555,650; year ended 30 September 2007: 10,555,650). Diluted earnings per share has been calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares and potential dilutive ordinary shares during the period, being 10,555,650 (six months ended 31 March 2007: 10,555,650; year ended 30 September 2007: 10,555,650). 6. Property, plant and equipment Acquisition and disposals During the six months ended 31 March 2008, the Group acquired assets with a cost of Â£153,000 (six months to 31 March 2007: Â£195,000; year ended 30 September 2007: Â£363,000). Assets with a net book value of Â£8,000 were disposed of during the six months ended 31 March 2007 (six months ended 31 March 2006: Â£11,000; year ended 30 September 2007: Â£35,000). 7. Changes in Equity Share Share Capital Translation Share Retained Total capital premium redemption reserve schemes earnings Equity reserve reserve reserve Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 At 01.10.2006 1,056 865 56 17 2 9,116 11,112 Profit for period - - - - - 313 313 Dividends paid - - - - - (507) (507) Share-based payment expense - - - - 1 - 1 Translation differences on overseas operations - - - 4 - - 4 -------------------------------------------------------------------------------- At 31.03 2007 1,056 865 56 21 3 8,922 10,923 Profit for period - - - - - 131 131 Dividends paid - - - - - (242) (242) Translation differences on overseas operations - - - 12 - - 12 -------------------------------------------------------------------------------- At 30.09.2007 1,056 865 56 33 3 8,811 10,824 Profit for period - - - - - 112 112 Dividends paid - - - - - (197) (197) Translation differences on overseas operations - - - 7 - - 7 -------------------------------------------------------------------------------- At 31.03.2008 1,056 865 56 40 3 8,726 10,746 -------------------------------------------------------------------------------- 8. Related party transactions There have been no additional significant or unusual related party transactions to those disclosed in the Group's Annual Report for 30 September 2007. 9. Subsidiaries Liquidation of subsidiary Titon BV a subsidiary company formerly incorporated in the Netherlands was liquidated on 5 October 2007. A final distribution was made to the parent company Titon Holdings Plc. Foreign exchange differences which had arisen from the translation of the financial statements of Titon BV were recycled and taken to the income statement. Titon Holdings Plc Directors and Advisors DIRECTORS Executive J N Anderson (Chairman) D A Ruffell (Chief Executive) T N Anderson R Brighton N C Howlett C S Jarvis C J Martin Non-Executive P W E Fitt (Vice-Chairman) P E O'Sullivan K A Ritchie SECRETARY AND REGISTERED OFFICE D A Ruffell International House Peartree Road Stanway Colchester Essex CO3 0JL COMPANY REGISTRATION NUMBER 1604952 (Registered in England & Wales) WEBSITE www.titonholdings.com AUDITORS REGISTRARS AND TRANSFER OFFICE BDO Stoy Hayward LLP Capita Registrars Ltd 55 Baker Street Northern House London Woodsome Park W1U 7EU Fenay Bridge Huddersfield HD8 0LA BROKERS Evolution Securities Limited 100 Wood Street London EC2V 7AN BANKERS Barclays Bank Plc Witham Business Centre Witham, Essex CM8 2AT SOLICITORS Macfarlanes 10 Norwich Street London EC4A 1BD This information is provided by RNS The company news service from the London Stock Exchange

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