Audited Results for year ended 30 November 2016

RNS Number : 1351X

Holders Technology PLC

17 February 2017

 

Holders Technology plc

Specialised PCB Materials, LED Components and Lighting Solutions

Audited results for the year ended 30 November 2016   

Holders Technology plc ("Holders Technology" or "the Group") announces its audited results for the year ended 30 November 2016.  Holders Technology supplies specialty laminates and materials for printed circuit board manufacture ("PCB"), and operates as an LED solutions provider to the lighting and industrial markets.                          

PCB and LED segments achieved modest revenue growth in the year, and margins were maintained.  PCB overheads were reduced, while LED overheads increased due to additional sales recruitment.  The result before restructuring and impairment costs was somewhat behind 2015.     

During the year, PCB divisions were restructured and costs reduced, and the LED Opteon Germany division was closed.  The restructuring costs are shown below.

The directors propose to pay a final dividend of 0.25p per share on 23 May 2017.

Highlights included:                                                                                                                      

·     Results compared to 2015:

Group revenue                                            1.7% higher                       

PCB revenue                                                0.4% higher                       

LED revenue                                                5.3% higher                       

Group margins                                            Unchanged

·     Operating loss before impairment

and restructuring costs                                                  £191,000

·     Operating loss                                                                 £374,000

·     Cash balances                                                                 £781,000 (£338,000 higher than 2015)

Chairman's statement

In my statement accompanying the 2015 Annual Report and Accounts I stated that the board was evaluating various options to return Holders Technology Group ("The Group") to profitability. As a result of this review some changes to our management team were made, coupled with a significant restructuring programme and the closure of an unprofitable division.  A number of sales staff have been changed and investments made to enhance our plant and machinery.

Inevitably changes of this nature impose a major short term cost but we believe they are essential to achieving our goal of restored profitability.

The overall Group result, excluding restructuring costs, was broadly similar to the preceding year with revenue increasing by 1.7% from £11.2 to £11.4m. The 2016 year did not include any revenue from our former Indian joint venture which we exited in 2015 but the impact of the stronger Euro following the EU referendum in June had a significant offsetting impact on the 2016 result. 

The Group operating result before impairment and restructuring costs was a loss of £191,000 (2015: operating loss £126,000).  Impairment and restructuring costs increased the operating loss to £374,000 (2015: £151,000).

The PCB divisions together had revenues of £8.3m (2015: £8.3m) and achieved an operating profit of £115,000 (2015: loss £3,000) before restructuring costs of £116,000.  Including restructuring and impairment costs, the PCB divisions made an operating loss of £1,000 (2015: loss £28,000).

Our German operations remain the predominant element of the Group's PCB sales, the second half of the year saw some benefit from the restructuring programme and the operations were profitable. The UK PCB operations, as anticipated, saw a reduction in revenue but the major changes made within this entity enabled it to achieve a small positive contribution for the year.

Total LED revenues amounted to £3.0m (2015: £2.9m).  Combined operating losses before restructuring costs of £67,000 totalled £275,000 (2015: loss of £26,000).  The LED divisions made an operating loss after restructuring costs of £342,000 (2015: £26,000).

The various LED elements of our business had very mixed results but taken together they were behind our expectations. While the UK division, Holders Components, achieved growth in both revenue and profitability and Holders Germany maintained its position, NRGstar saw a marked decline as did Opteon Germany.  Action has been taken to change the sales teams in a number of these entities and Opteon Germany has been closed.

Last year I reported that the Group faced a potential EU Cross Border Group Relief claim totalling £192,000 and that we had fully provided for this amount in that year's accounts. While some of the claim has been agreed a balance of £126,000 is still subject to further discussion.

2016 was a difficult year for the Group but our staff showed commitment and support throughout the year for which we thank them.

The Board has a continuing belief in the Group's ability to overcome the difficulties it confronts.  It is heartened by the initial signs of improved PCB performance, and by the customer interest in the new "smart lighting" products added into the LED divisions. Given this belief the Board considers it appropriate to recommend a final dividend of 0.25p for the 2016 year. 

R W Weinreich 

Executive Chairman

16 February 2017

Group income statement for the year ended 30 November 2016

			Note	2016	2015
				£'000	£'000
Revenue				11,380	11,195
Cost of sales				(8,539)	(8,396)
Gross profit				2,841	2,799
Distribution costs				(399)	(364)
Administrative expenses				(2,749)	(2,652)
Restructuring costs				(183)	-
Impairment costs				-	(25)
Other operating income				116	91
Operating loss				(374)	(151)
Finance income				3	1
Finance expenses				(7)	(16)
Loss before taxation				(378)	(166)
Tax expense			2	(17)	(195)
Loss for the financial year				(395)	(361)
Basic loss per share			4	(9.72p)	(9.16p)
Diluted loss per share			4	(9.72p)	(9.16p)
Total loss per share			4	(9.72p)	(9.16p)

 

 

Group statement of comprehensive income for the year ended 30 November 2016

			2016 £'000	2015 £'000
Loss for the year			(395)	(361)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations			346	(246)
Total comprehensive income and expense for the year			(49)	(607)

Statements of changes in equity for the year ended 30 November 2016

Group	Share capital	Share premium	Capital redemption reserve	Translation reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 November 2014	416	1,531	1	34	2,512	4,494
Dividends	-	-	-	-	(20)	(20)
Employee share-based payment options	-	-	-	-	3	3
Transactions with owners	-	-	-	-	(17)	(17)
Loss for the year	-	-	-	-	(361)	(361)
Exchange differences on translating foreign operations	-	-	-	(246)	-	(246)
Total comprehensive income for the year	-	-	-	(246)	(361)	(607)
Balance at 30 November 2015	416	1,531	1	(212)	2,134	3,870
Dividends	-	-	-	-	(20)	(20)
Shares issued	-	59	-	-	-	59
Transactions with owners	-	59	-	-	(20)	39
Loss for the year	-	-	-	-	(395)	(395)
Exchange differences on translating foreign operations	-	-	-	346	-	346
Total comprehensive income for the year	-	-	-	346	(395)	(49)
Balance at 30 November 2016	416	1,590	1	134	1,719	3,860

Company	Share capital	Share premium	Capital redemption reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000
Balance at 1 December 2014	416	1,531	1	51	1,999
Profit/ (loss) and total comprehensive income for the year	-	-	-	138	138
Dividends	-	-	-	(20)	(20)
Share-based payment charge	-	-	-	3	3
Balance at 30 November 2015	416	1,531	1	172	2,120
Profit/ (loss) and total comprehensive income for the year	-	-	-	437	437
Dividends	-	-	-	(20)	(20)
Shares issued	-	59	-	-	59
Share-based payment charge	-	-	-	-	-
Balance at 30 November 2016	416	1,590	1	589	2,596

Balance sheets at 30 November 2016

		Group		Company
		2016	2015	2016	2015
		£'000	£'000	£'000	£'000
Assets
Non-current assets
Goodwill		318	316	-	-
Property, plant and equipment		400	327	6	4
Investments in subsidiaries		-	-	2,291	2,291
Investment in joint venture		-	-	-	15
Deferred tax assets		9	16	-	-
		727	659	2,297	2,310
Current assets
Inventories		2,365	2,533	-	-
Trade and other receivables		1,790	1,556	592	433
Current tax assets		-	59	-	-
Cash and cash equivalents		781	443	318	25
		4,936	4,591	910	458
Liabilities
Current liabilities
Trade and other payables		(1,457)	(975)	(611)	(627)
Current tax liabilities		(122)	(213)	-	(21)
		(1,579)	(1,188)	(611)	(648)
Net current assets		3,357	3,403	299	(190)
Non-current liabilities
Retirement benefit liability		(219)	(181)	-	-
Deferred tax liabilities		(122)	(11)	-	-
		(224)	(192)	-	-
		3,860	3,870	2,596	2,120
Shareholders' equity
Share capital		416	416	416	416
Share premium account		1,590	1,531	1,590	1,531
Capital redemption reserve		1	1	1	1
Retained earnings		2,719	2,134	589	172
Cumulative translation adjustment reserve		134	(212)	-	-
		3,860	3,870	2,596	2,120

Statements of cash flows for the year ended 30 November 2016

		Group		Company
		2016	2015	2016	2015
		£'000	£'000	£'000	£'000
Cash flows from operating activities
Operating loss		(374)	(151)	(24)	(92)
Share-based payment charge		-	3	1	3
Depreciation		74	86	2	8
Decrease/(Increase) in inventories		192	(102)	-	-
(Increase)/decrease in trade and other receivables		(298)	295	41	17
Increase/(decrease) in trade and other payables		824	(86)	(16)	65
Cash generated from operations		418	45	3	1
Corporation tax paid		(48)	(7)	(1)	(1)
Net cash generated from operations		370	38	2	-
Cash flows from investing activities
Purchase of property, plant and equipment		(110)	(161)	(4)	(4)
Proceeds from sale of property, plant and equipment		-	3	3	-
Proceeds from joint venture		22	32	50	-
Dividends received from Group undertakings		-	-	200	13
Interest received		3	1	6	4
Net cash (used in)/generated from investing activities		(85)	(37)	252	16
Cash flows from financing activities
Interest paid		(7)	(16)	-	-
Proceed from sale of shares		59	-	59	-
Settlement of contingent consideration		-	-	-	-
Equity dividends paid		(20)	(20)	(20)	(20)
Net cash generated from/ (used in) financing activities		32	(36)	39	(20)
Net change in cash and cash equivalents		317	(155)	293	(20)
Cash and cash equivalents at start of period		443	634	25	45
Effect of foreign exchange rates		21	(36)	-	-
Cash and cash equivalents at end of period		781	443	318	25

Notes

1.    Basis of preparation

The Group and parent company financial statements have been prepared in accordance with EU endorsed International Financial Reporting Standards (IFRS), International Financial Reporting Interpretations Committee (IFRIC) interpretations and with those parts of the Companies Act applicable to companies reporting under IFRS.  All accounting standards and interpretations issued by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee effective at the time of preparing these financial statements have been applied.

2.    Taxation

	2016 £'000	2015 £'000
Analysis of the charge in the period
Current tax
-   Current period	-	6
-   Adjustments in respect of prior periods	17	179
	17	185
Deferred tax	-	10
Total tax	17	195
Tax reconciliation
The tax for the period is higher (2015: higher) than the standard rate of corporation tax in the UK, effectively 20.0% (2015: 20.0%) for the company's financial year.  The differences are explained below:

	2016 £'000	2015 £'000
Loss before taxation	(378)	(166)
Loss before taxation multiplied by the rate of corporation tax in the UK of 20.0 % (2015: 20.0%)	(76)	(33)
Effects of:
Differences between capital allowances and depreciation	-	4
Adjustments in respect of prior years	17	176
Taxation losses	64	35
Other temporary differences	12	13
Taxation	17	195

3.    The directors have proposed a final dividend of 0.25p per share payable on 23 May 2017 to shareholders on the register at close of business on 5 May 2017.  The total dividend for the year, including the interim dividend of 0.25p (2015: 0.25p) per share paid on 11 October 2016, amounts to £20,000 (2015: £20,000), which is equivalent to 0.50p (2015: 0.50p) per share.

4.    The basic earnings per share are based on the loss for the financial year of £395,000 (2015: loss of £361,000) and on ordinary shares 4,063,813 (2015: 3,939,551), the weighted average number of shares in issue during the year.  There was no earnings dilution calculated in 2015 and 2016 as a loss was recorded by the Group.

5.    This preliminary statement, which has been approved by the Board on 16 February 2016, is not the Company's statutory accounts.  The statutory accounts for each of the two years to 30 November 2015 and 30 November 2016 received audit reports, which were unqualified and did not contain statements under section 498(2) and section 498(3) of the Companies Act 2006.  The 2015 accounts have been filed with the Registrar of Companies but the 2016 accounts are not yet filed.

For further information, contact:

Rudi Weinreich, Executive Chairman, Holders Technology plc,

Tel. [phone]

Paul Geraghty, Group Finance Director, Holders Technology plc,

Tel. [phone]

William Vandyk, Director, Corporate Finance, Northland Capital Partners Ltd,

Tel. [phone]

Website www.holdersgroup.com   

ENDS    

 

END

 

 

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