Half-yearly Report
Holders Technology plc
Providers of specialised materials, equipment and services to the
electronics industry
Half yearly results for the 6 months ended 31 May 2010
Holders Technology plc (AIM: HDT) announces its unaudited half yearly results
for the 6 month period ended 31 May 2010.
Highlights
Half year ended 31 May
2010 2009
Revenue £7.1m £6.5m
PBT £0.1m (£0.6m)
Operating cash flow before tax (£0.8m) (£0.4m)
Earnings per share 1.78p (11.61p)
Interim dividend per share 2.10p 2.10p
Net assets per share at 31 May 138p 138p
Chairman's statement
The first half of the current year showed a marked recovery when compared to
the first half of the preceding year and the picture for the PCB industry in
Europe has shown a general improvement.
Further to reduce costs in order to meet competitive pressures we have
continued to seek to source more product lines from China and the Far East.
This has inevitably lengthened our supply chain and has required a significant
increase in working capital in the period.
The benefits we are seeing from these new sourcing arrangements and our
continued drive to contain other costs lead us to believe that, providing
there is no marked downturn in market demand, the PCB element of our business
will perform in line with our expectations for the balance of the current
year.
In my statement accompanying the Report and Accounts for the year to 30th
November 2009 I commented on our acquisition of JK Components Limited, a
distributor of Light Emitting Diodes (LED's) and stated we would be looking to
build a platform to enable us to serve both the UK and the wider European
market. It is pleasing to be able to report that encouraging progress towards
that goal is being made. Whilst a substantial investment programme continues
to be required, the business is now on a stronger footing and a consistent
increase in monthly sales is being achieved. We are currently undertaking a
further extension to our activities in this area and we continue to believe
that we will be able to demonstrate the benefits of this in the second half of
the current year.
In summary whilst fully aware of global economic uncertainties we are
cautiously optimistic that the year as a whole will show progress in our core
PCB business and demonstrate the validity of our decision to widen our
activities into the LED market.
Against this background we have considered it appropriate to declare an
unchanged interim dividend of 2.1p for the current year, which will be paid on
5 October 2010 to shareholders who are on the register on 10 September 2010.
The half yearly report was approved by the board on 21 July 2010.
Condensed consolidated statement of comprehensive income
for the half year ended 31 May 2010 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2010 May 2009 Nov 2009
Notes £'000 £'000 £'000
Revenue - continuing operations 3 6,880 6,537 12,966
- acquisitions 7 250 - -
7,130 6,537 12,966
Cost of sales (5,235) (5,138) (9,770)
Gross profit 1,895 1,399 3,196
Distribution costs (207) (109) (301)
Administrative expenses (1,554) (1,744) (3,044)
Fundamental restructuring - (176) (176)
Other operating income (15) (4) (90)
Operating profit 119 (634) (415)
Finance income 3 39 20
Finance expense (1) (13) (13)
Profit before taxation 121 (608) (408)
Taxation 4 (50) 104 9
Profit after taxation 71 (504) (399)
Attributable to:
Equity shareholders of the company 74 (483) (375)
Non-controlling interest (3) (21) ((24))
71 (504) (399)
Earnings/(Loss) per share 6 1.78p (11.61)p (9.52)p
Diluted earnings/(loss) per 6 1.78p (11.61)p (9.52)p
share
Consolidated statement of recognised income and expense
for the half year ended 31 May 2010 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2010 May 2009 Nov 2009
£'000 £'000 £'000
Exchange differences on
translation of foreign
operations (120) 167 288
(Loss)/Profit for the period 71 (504) (399)
(49) (337) (111)
Attributable to:
Equity shareholders of the (90) (301) (64)
company
Non-controlling interest 41 (36) (47)
(49) (337) (111)
Condensed consolidated statement of financial position
at 31 May 2010 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2010 May 2009 Nov 2009
Notes £'000 £'000 £'000
Assets
Non-current assets
Goodwill 346 204 207
Property, plant and 603 614 655
equipment
Deferred tax 30 29 29
979 847 891
Current assets
Inventories 2,154 2,829 1,866
Trade and other receivables 3,027 2,105 2,301
Current tax 73 232 69
Cash and cash equivalents 1,028 1,179 2,095
6,282 6,345 6,331
Liabilities
Current liabilities
Trade and other payables (1,292) (1,148) (1,107)
Borrowings (3) (157) -
Current tax (62) (2) (35)
Other liabilities (8) - -
(1,365) (1,307) (1,142)
Net current assets 4,917 5,038 5,189
Non-current liabilities
Finance leases (3) - -
Retirement benefit liability (133) (165) (176)
Deferred tax liabilities (7) - (8)
Other liabilities (28) - -
(171) (165) (184)
Net assets 5,725 5,720 5,896
Shareholders' equity
Share capital 416 416 416
Share premium account 1,531 1,531 1,531
Capital redemption reserve 1 1 1
Retained earnings 2,924 2,963 2,972
Cumulative translation 667 702 831
adjustment
Equity attributable to the equity
shareholders of the company 5,539 5,613 5,751
Non-controlling interest in equity 186 107 145
5,725 5,720 5,896
Consolidated cash flow statement
for the half year ended 31 May 2010 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2010 May 2009 Nov 2009
£'000 £'000 £'000
Cash flows from operating activities
Operating profit 119 (634) (415)
Share-based payment charge/(credit) 6 6 (10)
Depreciation 83 92 180
Currency translation (155) 165 182
Loss on sale of property, plant and 15 4 13
equipment
(Increase)/Decrease in inventories (188) (21) 942
(Increase)/Decrease in trade and (596) 595 410
other receivables
(Decrease)/Increase in trade and (117) (517) (517)
other payables
Cash (used in)/generated from (833) (310) 785
operations
Corporation tax (paid)/received (28) (58) 51
Net cash generated (used in)/from (861) (368) 836
operations
Cash flows from investing activities
Net borrowings acquired with (42) - -
subsidiary undertaking
Purchase of property, plant and (53) (52) (168)
equipment
Proceeds from sale of property, plant
and equipment
15 7 -
Interest received - 20 20
Net cash used in investing activities (80) (25) (148)
Cash flows from financing activities
Interest paid (1) (13) (13)
Equity dividends paid (128) (128) (211)
Net cash used in financing activities (129) (141) (224)
Net change in cash and cash equivalents (1,070) (534) 464
Cash and cash equivalents at start of 2,095 1,537 1,537
period
Effect of foreign exchange rates 3 19 94
Cash and cash equivalents at end of period 1,028 1,022 2,095
Consolidated statement of changes in equity
for the half year ended 31 May 2010 (Unaudited)
Group Capital Cumulative Share- Non-
Share Share redemption translation Retained holders' controlling Total
capital premium reserve adjustment earnings Equity interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 December 2008 416 1,531 1 520 3,568 6,036 130 6,166
(Loss) for the period - - - - (483) (483) (21) (504)
Dividends - - - - (128) (128) - (128)
Currency translation differences - - - 182 - 182 (15) 167
Investment by non-controlling interest - - - - - - 13 13
Share-based payment credit - - - - 6 6 - 6
Balance at 31 May 2009 416 1,531 1 702 2,963 5,613 107 5,720
Profit/(loss) for the period - - - - 108 108 (3) 105
Dividends - - - - (83) (83) - (83)
Currency translation differences - - - 129 - 129 (8) 121
Investment by non-controlling interest - - - - - - 49 49
Share-based payment charge - - - - (16) (16) - (16)
Balance at 30 November 2009 416 1,531 1 831 2,972 5,751 145 5,896
Profit/(loss) for the period - - - - 74 74 (3) 71
Dividends - - - - (128) (128) - (128)
Currency translation differences - - - (164) - (164) 44 (120)
Share-based payment credit - - - - 6 6 - 6
Balance at 31 May 2010 416 1,531 1 667 2,924 5,539 186 5,725
Notes:
1. General information
Holders Technology plc is incorporated in the United Kingdom under the
Companies Act. The principal activity of the group is to provide materials,
equipment and services to the electronics industry.
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 2009.
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 2010 and 31 May 2009.
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 2009 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 s237(2) of s237(3) of the
Companies Act 1985.
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 21
July 2010.
3. Segmental information
The primary format used for segmental reporting is by geographic segment, as
the group operates in only one business segment. Segment results, assets and
liabilities include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. The group operates in the UK,
Europe and Asia.
Analysis by geographic segment
for the half year ended 31 May
UK Rest of Europe Asia Eliminations Total
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 2,705 2,679 4,046 3,430 379 428 - - 7,130 6,537
Inter-segment
revenue 19 38 68 197 20 20 (107) (255) - -
______ ______ ______ ______ ______ ______ ______ ______ ______ ______
2,724 2,717 4,114 3,627 399 448 (107) (255) 7,130 6,537
Segment result 53 23 73 (598) (7) (59) - - 119 (634)
Finance income 3 39
Finance expenses (1) (13)
______ ______
Profit before
taxation 121 (608)
Taxation (50) 104
______ ______
Profit for the year from continuing
operations 71 (504)
______ ______
for the year ended 30 November 2009
Rest of
UK Europe Asia Eliminations Total
£'000 £'000 £'000 £'000 £'000
Revenue 5,218 6,788 960 - 12,966
Inter-segment
revenue 56 235 41 (332) -
______ ______ ______ ______ ______
5,274 7,023 1,001 (332) 12,966
Segment result 199 (567) (47) - (415)
Finance income 20
Finance expenses (13)
______
Profit before
taxation (408)
Taxation 9
_________
Profit for the year from continuing
operations (399)
______
4. The tax credit/(charge) for the six months ended 31 May 2010 is calculated
based on the tax rates applicable in the country in which each company
operates. Taxation includes a (charge)/credit of( £27,000) (2009: £120,000)
relating to overseas operations.
5. A second interim dividend of 3.25p per share on the total issued share
capital of 4,159,551 10p ordinary shares, excluding treasury shares, was paid
on 31 March 2010 in respect of the year ended 30 November 2009.
An interim dividend payment of 2.1p per share (2009: 2.1p per share) will be
payable on 5 October 2010 to shareholders on the register at 10 September
2010. The shares will go ex-dividend on 8 September 2010. The interim dividend
was not approved by the board at 31 May 2010 and accordingly, has not been
included as a liability as at that date.
6. The basic earnings per share are based on the profit for the period of
£74,000 (2009: loss £483,000) and on ordinary shares 4,159,551 (2009:
4,159,551), the weighted average number of shares in issue during the year.
Diluted earnings per share are based on 4,159,551 ordinary shares (2009:
4,159,551), being the weighted average number of ordinary shares after an
adjustment of nil shares (2009: nil) in relation to share options.
7. Acquisition
On 21 December 2009, the company acquired 100% of the share capital of J K
Components Limited (JK). JK is a distributor of components to the electronics
industry. The consideration for the acquisition was £1 plus deferred
consideration representing 50%, 30% and 15% respectively of the net profits
for each of the three years following the date of acquisition. The following
sets out the effect on the consolidated balance sheet:
Balance sheet Provisional Provisional
of acquired fair value fair value
business adjustment of acquired
business
£'000 £'000 £'000
Property, plant and equipment 13 - 13
Inventories 100 - 100
Trade and other receivables 130 - 130
Cash and cash equivalents 5 - 5
Trade and other payables (306) - (306)
Obligations under finance leases (6) - (6)
Overdrafts (43) - (43)
Net liabilities acquired (107) - (107)
Fair value of deferred consideration 36
Goodwill arising on acquisition 143
Costs of £26,000 relating to the acquisition have been charged to the income
statement in the period ending 31 May 2010.
8. A copy of this half yearly report is being sent to shareholders and is
available for inspection at the company's registered office, Devonshire House,
Manor Way, Borehamwood, Herts WD6 1QQ and via its website
www.holderstechnology.com.
For further information, contact:
Holders Technology Plc 020 8731 4336
Mr Rudi Weinreich, Chairman and Chief Executive
Mr Jim Shawyer, Group Finance Director
Astaire Securities Plc - Nomad & Broker 020 7492 4750
Shane Gallwey
Website www.holderstechnology.com
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