Interim Results

Titon Holdings PLC 10 May 2007 Consolidated Interim Financial Statements for the six months ended 31 March 2007 Chairman's Statement FINANCIAL PERFORMANCE I am pleased to announce a 4.5% improvement in profit before taxation for the six months to Â£439,000 (2006: Â£420,000) on a 5.8% increase in revenue to Â£8,670,000 (2006: Â£8,195,000). Earnings per share for the period were 3.8% higher at 2.97p (2006: 2.86p) and the Directors have approved an unchanged interim dividend of 2.3p per ordinary share (2006: 2.3p). The dividend will be payable on the 28 June 2007 to shareholders on the register on 1 June 2007. The ex-dividend date is 30 May 2007. Capital expenditure has been much lower this period at Â£208,000 (2006: Â£1,142,000) and cash balances at the end of the period were Â£1,671,000 (2006: Â£2,392,000) TRADING COMMENTARY First half year performance has been very much as expected, with growth opportunities being largely curtailed by a subdued UK window market. Over the previous few years I have reported on the Building Regulation change for England and Wales, and the impact it is likely to have on Titon. A major outcome of this process has been our diversification into mechanical ventilation systems. One of the factors driving the demand for these systems is the increase in building air tightness levels arising from the Building Regulation. This progression towards more airtight construction has been further reinforced by the recently published 'Code for Sustainable Homes', as has the need for greater energy efficient products. In response to this requirement, we have recently sourced several new powered ventilation products which are among the most energy efficient on the market. We believe that these products will give us a good opportunity to further establish our name in this growing marketplace. Sales of our recently launched Trimvent Select Xtra trickle ventilator range to suit passive ventilation requirements for the new Regulation are progressing satisfactorily, although much of current house building is still being processed under previous Regulations. The Trimvent Select Xtra range will be expanded as the year progresses. I reported in my last Statement that, following the Government U-turn on introducing a Regulation for background ventilation in existing dwellings, the window industry had been tasked to introduce a 'Good Practice' guide for fitting trickle ventilators to replacement windows. However, it is now evident that this guidance is having a minimal impact on ventilator demand and part of the investment committed by Titon in 2005/2006 to increase sales and capacity will have a slower payback than anticipated. It has been a big disappointment and a potential setback for improving air quality in existing homes. Our export sales, which have shown steady growth over the past few years, have continued to improve. However, the weakness of the US dollar, combined with the steep fall in house building activity in the USA, has limited overall export growth to 6%. I have previously reported on our intent to seek overseas supply options to help reduce our product costs. I am now able to report that, effective from June 2007, we will be sourcing our zinc die casting components from Slovenia and closing our in-house operation, achieving significant annual savings from the venture. As part of the arrangement with our Slovenian supplier, Titus Lama, we will be selling to them our entire die casting plant and equipment whilst retaining all product design rights. PROSPECTS The UK window market, which provides a large proportion of our business, is declining as social housing programmes near completion and as quality imported windows gain a greater market share. However, we anticipate increasing our market share of the available trickle ventilator market through our Trimvent Select Xtra range. The progress of Titon towards becoming a domestic ventilation systems supplier will continue and will be aided by the introduction of leading edge energy efficient products. Further growth in our exports, in our sales into the aluminium window market and our powered ventilation products is anticipated. Providing that any further increases in UK interest rates do not significantly impact on the UK house building industry, we believe that the improvement in the financial results can be maintained. J N Anderson Chairman 10 May 2007 Consolidated Interim Income Statment for the six months ended 31 March 2007 Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Note Â£'000 Â£'000 Â£'000 Revenue 2 8,670 8,195 16,600 Operating profit 388 354 782 Finance income 51 66 112 -------------------------------- Profit before taxation 439 420 894 Tax expense 3 (126) (118) (219) -------------------------------------------------------------------------------- Profit for the period attributable to the equity holders of the parent 7 313 302 675 -------------------------------------------------------------------------------- Earnings per share - basic 5 2.97p 2.86p 6.40p - diluted 5 2.97p 2.85p 6.40p Consolidated Interim Statement of Recognised Income and Expense for the six months ended 31 March 2007 Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Note Â£'000 Â£'000 Â£'000 Profit for the period attributable to the equity holders of the parent 7 313 302 675 Exchange difference on re-translation of net assets of overseas subsidiary undertakings 4 12 20 -------------------------------------------------------------------------------- Total recognised income and expense for the period attributable to equity holders of the parent 317 314 695 -------------------------------------------------------------------------------- Consolidated Interim Balance Sheet at 31 March 2007 31.3.07 31.3.06 30.9.06 Note Â£'000 Â£'000 Â£'000 Assets Property, plant and equipment 6 4,854 4,984 5,009 Intangible assets 63 57 67 ---------------------------- Total non-current assets 4,917 5,041 5,076 Inventories 3,344 2,863 2,950 Trade and other receivables 3,785 3,828 3,624 Cash and cash equivalents 1,674 2,473 2,078 ---------------------------- Total current assets 8,803 9,164 8,652 -------------------------------------------------------------------------------- Total Assets 13,720 14,205 13,728 -------------------------------------------------------------------------------- Liabilities Deferred tax 185 104 170 ---------------------------- Total non-current liabilities 185 104 170 Trade and other payables 2,491 2,883 2,362 Bank overdraft 3 81 9 Corporation tax 118 166 75 ---------------------------- Total current liabilities 2,612 3,130 2,446 -------------------------------------------------------------------------------- Total Liabilities 2,797 3,234 2,616 -------------------------------------------------------------------------------- Equity Share capital 1,056 1,055 1,056 Share premium reserve 865 863 865 Capital redemption reserve 56 56 56 Translation reserve 21 9 17 Share schemes reserve 3 2 2 Retained earnings 8,922 8,986 9,116 -------------------------------------------------------------------------------- Total Equity attributable to the equity holders of the parent 7 10,923 10,971 11,112 -------------------------------------------------------------------------------- Total Liabilities and Equity 13,720 14,205 13,728 -------------------------------------------------------------------------------- Consolidated Interim Cash Flow Statement for the six months ended 31 March 2007 Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Note Â£'000 Â£'000 Â£'000 Cash generated from operating activities Profit before taxation 439 420 894 Depreciation of property, plant & equipment 339 315 682 Amortisation on intangible assets 17 20 25 Interest Income (51) (66) (112) Increase in inventories (391) (343) (424) (Increase)/decrease in receivables (160) (130) 76 Increase/(decrease) in payables and other current liabilities 129 456 (66) Profit on sale of plant & equipment - (10) (22) Share based payment - equity settled 1 1 1 -------------------------------------------------------------------------------- Cash generated from operations 323 663 1,054 -------------------------------------------------------------------------------- Income taxes paid (68) (96) (221) -------------------------------------------------------------------------------- Net cash generated from operating activities 255 567 833 -------------------------------------------------------------------------------- Cash used in investing activities Purchase of plant & equipment 6 (195) (1,071) (1,485) Purchase of intangible assets (13) (71) (86) Proceeds from sale of plant & 11 24 58 equipment Interest received 51 66 112 ---------------------------- --------------------------------------------------- Net cash used in investing activities (146) (1,052) (1,401) ---------------------------- --------------------------------------------------- Cash flows from financing activities Dividends paid to equity shareholders 4 (507) (506) (749) Proceeds from issue of share capital - 24 27 ---------------------------- --------------------------------------------------- Net cash used in financing activities (507) (482) (722) -------------------------------------------------------------------------------- Net decrease in cash & cash equivalents (398) (967) (1,290) Cash & cash equivalents at beginning of period 2,069 3,359 3,359 -------------------------------------------------------------------------------- Cash & cash equivalents at end of period 1,671 2,392 2,069 -------------------------------------------------------------------------------- Cash & cash equivalents comprise: Cash at bank 1,674 2,473 2,078 Bank overdraft (3) (81) (9) -------------------------------------------------------------------------------- Cash & cash equivalents at end of period 1,671 2,392 2,069 -------------------------------------------------------------------------------- Notes to the Consolidated Interim Statement at 31 March 2007 1. Basis of preparation The consolidated interim financial statements of the Group for the six months ended 31 March 2007 incorporates 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 2006 and were authorised by the Board of Directors for release on 10 May 2007. The consolidated interim financial statements for the six months ended 31 March 2007 and 31 March 2006 have not been audited. The results for the year end 30 September 2006 and the balance sheet as at that date are abridged from the Group's Annual Report and Financial Statements 2006, 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 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 Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Â£'000 Â£'000 Â£'000 External 7,595 7,180 14,427 Intercompany - - - -------------------------------------------------------------------------------- Total Revenue 7,595 7,180 14,427 -------------------------------------------------------------------------------- Segment result 1,132 1,079 2,197 -------------------------------------------------------------------------------- Rest of the World Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Â£'000 Â£'000 Â£'000 External 1,075 1,015 2,173 Intercompany 185 163 291 -------------------------------------------------------------------------------- Total Revenue 1,260 1,178 2,464 -------------------------------------------------------------------------------- Segment result 111 98 247 -------------------------------------------------------------------------------- Consolidated Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Â£'000 Â£'000 Â£'000 External 8,670 8,195 16,600 Intercompany 185 163 291 -------------------------------------------------------------------------------- Total Revenue 8,855 8,358 16,891 -------------------------------------------------------------------------------- Segment result 1,243 1,177 2,444 Unallocated expenses (855) (823) (1,662) -------------------------------------------------------------------------------- Operating profit 388 354 782 Finance income 51 66 112 -------------------------------------------------------------------------------- Profit before tax 439 420 894 Tax expense (126) (118) (219) -------------------------------------------------------------------------------- Profit for the period attributable to the equity holders of the parent 313 302 675 -------------------------------------------------------------------------------- 3.Tax expense Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Â£'000 Â£'000 Â£'000 UK corporation tax 105 108 191 Adjustment in respect of over provision in prior years - - (33) -------------------------------------------------------------------------------- Total UK corporation tax 105 108 158 -------------------------------------------------------------------------------- Overseas tax 6 10 7 Adjustment in respect of over provision in prior years - - (11) -------------------------------------------------------------------------------- Total overseas tax 6 10 (4) -------------------------------------------------------------------------------- Total current tax 111 118 154 -------------------------------------------------------------------------------- Deferred tax 15 - 65 -------------------------------------------------------------------------------- Total tax 126 118 219 -------------------------------------------------------------------------------- Tax for the interim period is charged at 28.7% (six months to 31 March 2006: 28.1%) 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 2007 of 2.3p per share, amounting to a total dividend of Â£243,000, was approved by the Directors of Titon Holdings Plc on 9 May 2007. These consolidated interim statements do not reflect the dividend payable. The interim dividend will be payable on 28 June 2007 to the shareholders on the register on 1 June 2007. The ex dividend date is 30 May 2007. The following dividends have been recognised and paid by the Company: Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Date Pence paid per share Â£'000 Â£'000 Â£'000 Final 24.2.06 4.8 - 506 506 Interim 30.6.06 2.3 - - 243 Final 21.2.07 4.8 507 - - -------- -------- ------- 507 506 749 -------- -------- ------- 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 2006: 10,552,500; year ended 30 September 2006: 10,547,501). 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 2006: 10,586,129; year ended 30 September 2006: 10,549,207). All dilutive ordinary shares relate to share options. 6. Property, plant and equipment Acquisition and disposals During the six months ended 31 March 2007, the Group acquired assets with a cost of Â£195,000 (six months to 31 March 2006: Â£1,071,000; year ended 30 September 2006: Â£1,485,000). Assets with a net book value of Â£11,000 were disposed of during the six months ended 31 March 2007 (six months ended 31 March 2006: Â£11,000; year ended 30 September 2006: Â£36,000). 7. Changes in Equity Share Share Capital Translation Share Retained Total capital premium redemption reserve schemes earnings Equity reserve reserve Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 At 1 Oct 2005 1,053 841 56 (3) 1 9,190 11,138 Profit for the period - - - - - 302 302 Dividends paid - - - - - (506) (506) Shares issued under the Company's share option scheme 2 22 - - - - 24 Share-based payment expense - - - - 1 - 1 Translation differences on overseas operations - - - 12 - - 12 -------------------------------------------------------------------------------- At 31 Mar 2006 1,055 863 56 9 2 8,986 10,971 Profit for the period - - - - - 373 373 Dividends paid - - - - - (243) (243) Shares issued under the Company's share option scheme 1 2 - - - - 3 Translation differences on overseas operations - - - 8 - - 8 -------------------------------------------------------------------------------- At 30 Sep 2006 1,056 865 56 17 2 9,116 11,112 Profit for the period - - - - - 313 313 Dividends paid - - - - - (507) (507) Share-based payment expense - - - - 1 - 1 Translation differences on overseas operations - - - 4 - - 4 -------------------------------------------------------------------------------- At 31 Mar 2007 1,056 865 56 21 3 8,922 10,923 -------------------------------------------------------------------------------- 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 United Kingdom COMPANY REGISTRATION NUMBER 1604952 (Registered in England & Wales) AUDITORS BDO Stoy Hayward LLP 8 Baker Street London W1U 3LL BROKERS Evolution Securities Limited 100 Wood Street London EC2V 7AN SOLICITORS Macfarlanes 10 Norwich Street London EC4A 1BD REGISTRARS AND TRANSFER OFFICE Capita IRG Plc Northern House Woodsome Park Fenay Bridge Huddersfield HD8 0LA BANKERS Barclays Bank Plc Witham Business Centre Witham Essex CM8 2AT This information is provided by RNS The company news service from the London Stock Exchange

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