TIDMHDT

RNS Number : 9869J

Holders Technology PLC

23 August 2019

Holders Technology plc

Half Yearly Report 2019

Specialised PCB Materials, Lighting and Control Solutions

Highlights

Holders Technology plc supplies specialty laminates and materials for printed circuit board manufacturers ("PCB") and operates as a lighting and control solutions ("LCS") provider to the lighting market and commercial buildings sector.

Unaudited results for the half year ended 31 May are summarised as follows:

 
                             2019      2018 
                            GBP'000   GBP'000 
                           --------  -------- 
 
 Revenue           PCB        4,291     4,756 
  LCS                         1,737     1,426 
  Total                       6,028     6,182 
                           -------- 
 
 Gross profit                 1,579     1,585 
 Margins                      26.2%     25.6% 
 
 Overheads                    1,570     1,520 
 
 Operating profit                 9        65 
 
 Finance income                  11         - 
 Profit before tax               20        65 
 
 Taxation                        29         - 
 Profit after tax                49        65 
                           ========  ======== 
 
 Earnings per share           1.17p     1.56p 
 Interim dividend 
  per share                   0.25p     0.25p 
 Net assets per share          100p       96p 
-------------------------  --------  -------- 
 

Contents

   1.   Chairman's statement 
   3.   Consolidated income statement 
   3.   Consolidated statement of comprehensive income 
   4.   Consolidated statement of changes in equity 
   5.   Consolidated balance sheet 
   6.   Consolidated cash flow statement 
   7.   Notes 

Chairman's statement

Half year ended 31 May 2019

These interim results show a mixed outcome as compared to the equivalent period in 2018. PCB revenues have been adversely impacted by the overall economic environment, and the challenges faced by the automotive industry in Germany. In contrast, revenues from the LCS divisions have grown strongly.

Group revenue decreased by 2.5% to GBP6.0m (H1 2018: GBP6.2m), gross margins increased by 0.6% to 26.2%, and the pre-tax result was a profit of GBP20,000 (H1 2018: profit of GBP65,000).

PCB

PCB sales in the period decreased by 9.8%, from GBP4,756,000 in 2018 to GBP4,291,000, while PCB gross margins decreased by 0.7% to 22.5%. At the end of the period the upgraded aluminium cutting and punching line in Germany was brought into full operation. The improved cutting line is expected to provide higher throughput and result in efficiency gains in future periods.

PCB overheads as a percentage of sales increased by 1.7% to 18.1%. Overall our PCB activities recorded a pre-tax profit of GBP30,000 (H1 2018: profit GBP159,000).

LCS

Lighting and Control Solutions divisions in the UK and Germany made good progress during the period. Revenue grew by 21.8% from GBP1,426,000 to GBP1,737,000, and gross margins improved from 33.7% to 35.2%. Overheads as a percentage of revenue decreased from 33.2% to 31.1%, leading to a profit of GBP31,000 (H1 2018: loss GBP38,000).

Taxation

HMRC have now accepted our final claim for EU Cross Border tax which was shown as a liability of GBP43,000 at the end of November 2018. The liability has been removed from the accounts during the period which resulted in a credit of GBP14,000 to interest paid and a credit of GBP29,000 to taxation.

Board Changes

On 7 May Thomas Bray stepped down from the Board, and I would like to thank him for his contribution to the Group over the last six years. Thomas' role will be partly filled by Mat Hanson who joined us in February and is now UK Sales Director for our Lighting and Control Solutions division. We plan to add further technical and sales capacity to LCS divisions in the UK and Germany over the next few months to support growing customer demand and our expanding portfolio of products and services.

Summary

Our PCB business continues to face challenges due to unfavourable market conditions. However, PCB operations remain profitable, and management has recently implemented targeted cost savings to further improve profitability. The LCS divisions have achieved good growth and a modest profit in the first half, and the pipeline of sales opportunities is encouraging, with the acceptance in the market of wireless lighting controls.

Rudolf W. Weinreich Holders Technology plc

Executive Chairman 27-28 Eastcastle Street

London W1W 8HD

For further information, contact:

Holders Technology plc

Rudi Weinreich, Executive Chairman

01896 758781

Victoria Blaisdell, Group Managing Director

Paul Geraghty, Group Finance Director

SP Angel Corporate Finance LLP - Nomad and Broker

Matthew Johnson/ Jamie Spotswood, Corporate Finance 020 3470 0470

Website

www.holdersgroup.com

Consolidated income statement

for the half year ended 31 May 2019 (Unaudited)

 
                                          Half year   Half year   Full year 
                                           ended 31    ended 31    ended 30 
                                           May 2019    May 2018    Nov 2018 
                                         ==========  ==========  ========== 
                                  Notes     GBP'000     GBP'000     GBP'000 
 Revenue                              3       6,028       6,182      12,486 
 Cost of sales                              (4,449)     (4,597)     (9,220) 
                                         ==========  ==========  ========== 
 Gross profit                                 1,579       1,585       3,266 
 Distribution costs                           (199)       (210)       (422) 
 Administrative expenses                    (1,369)     (1,300)     (2,696) 
 Other operating (expenses)/ 
 income                                         (2)           -          36 
                                         ==========  ==========  ========== 
 Operating profit                                 9          65         184 
 Finance income/ (costs)                         11           -         (7) 
                                         ==========  ==========  ========== 
 Profit before taxation                          20          65         177 
 Taxation                             4          29           -         (8) 
                                         ==========  ==========  ========== 
 Profit for the period                           49          65         169 
                                         ==========  ==========  ========== 
 
   Total and continuing 
 Basic earnings per share             6       1.17p       1.56p       4.06p 
                                         ==========  ==========  ========== 
 Diluted earnings per share           6       1.17p       1.46p       4.03p 
                                         ==========  ==========  ========== 
 
 
 

Consolidated statement of comprehensive income

for the half year ended 31 May 2019 (Unaudited)

 
                                        Half year         Half year   Full year 
                                         ended 31          ended 31    ended 30 
                                         May 2019          May 2018    Nov 2018 
                                       ==========  ================  ========== 
                                         GBP'000            GBP'000     GBP'000 
 
 Profit/ (loss) for the period                 49              (65)         169 
 Exchange differences on 
  translation of foreign operations             6              (12)          15 
                                       ==========  ================  ========== 
 Total comprehensive income/ 
  (expense) for the period                     55                53         184 
                                       ==========  ================  ========== 
 
 

Consolidated statement of changes in equity

for the half year ended 31 May 2019 (Unaudited)

 
                                                      Capital 
                                       Share          redemption      Translation      Retained 
                    Share capital       premium       reserve         reserve          earnings           Total equity 
                  ===============  ============  ==================  ===============  ================  ============== 
                     GBP'000            GBP'000             GBP'000       GBP'000          GBP'000        GBP'000 
 
 Balance 1 Dec 
  2017                        416         1,590                   1              207             1,718           3,932 
 
   Dividends                    -             -                   -                -              (21)            (21) 
 Share based 
  payments                      -             -                   -                -                 4               4 
                  ===============  ============  ==================  ===============  ================  ============== 
 Transactions 
  with owners                   -             -                   -                -              (17)            (17) 
                  ===============  ============  ==================  ===============  ================  ============== 
 Profit for the 
  year                          -             -                   -                -               169             169 
 Other 
  comprehensive 
  income for the 
  year                          -             -                   -               15                 -              15 
                  ===============  ============  ==================  ===============  ================  ============== 
 Total 
  comprehensive 
  income for the 
  year                          -             -                   -               15               169             184 
                  ===============  ============  ==================  ===============  ================  ============== 
 Balance 30 Nov 
  2018                        416         1,590                   1              222             1,870           4,099 
                  ===============  ============  ==================  ===============  ================  ============== 
 
   Dividends                    -             -                   -                -              (21)            (21) 
 New shares 
  issued                        6             -                   -                -                 -               6 
                  ===============  ============  ==================  ===============  ================  ============== 
 Transactions 
  with owners                   6             -                   -                -              (21)            (15) 
                  ===============  ============  ==================  ===============  ================  ============== 
 Profit for the 
  period                        -             -                   -                -                49              49 
 Other 
  comprehensive 
  expense for 
  the period                    -             -                   -                6                 -               6 
                  ===============  ============  ==================  ===============  ================  ============== 
 Total 
  comprehensive 
  income for the 
  period                        -             -                   -                6                49              55 
                  ===============  ============  ==================  ===============  ================  ============== 
 Balance 31 May 
  2019                        422         1,590                   1              228             1,898           4,139 
                  ===============  ============  ==================  ===============  ================  ============== 
 

Consolidated balance sheet

at 31 May 2019 (Unaudited)

 
                                    Half year   Half year   Full year 
                                     ended 31    ended 31    ended 30 
                                     May 2019    May 2018    Nov 2018 
                                   ==========  ==========  ========== 
                                      GBP'000     GBP'000     GBP'000 
 Assets 
 Non-current assets 
  Goodwill                                318         318         318 
  Property, plant and equipment           338         374         357 
  Deferred tax assets                       9           9          10 
                                   ==========  ==========  ========== 
                                          665         701         685 
                                   ==========  ==========  ========== 
 
 Current assets 
  Inventories                           2,459       2,304       2,849 
  Trade and other receivables           1,542       1,986       1,791 
  Cash and cash equivalents               674         633         403 
                                   ==========  ==========  ========== 
                                        4,675       4,923       5,043 
 Liabilities 
 Current liabilities 
  Trade and other payables              (988)     (1,328)     (1,373) 
  Current tax liabilities                   -        (94)        (43) 
                                   ==========  ==========  ========== 
                                        (988)     (1,422)     (1,416) 
 
 Net current assets                     3,687       3,501       3,627 
                                   ==========  ==========  ========== 
 
 Non-current liabilities 
  Retirement benefit liability          (207)       (227)       (204) 
  Deferred tax liabilities                (6)           -         (9) 
                                        (213)       (227)       (213) 
 
 Net assets                             4,139       3,975       4,099 
                                   ==========  ==========  ========== 
 
 Shareholders' equity 
  Share capital                           422         416         416 
  Share premium account                 1,590       1,590       1,590 
  Capital redemption reserve                1           1           1 
  Retained earnings                     1,898       1,773       1,870 
  Cumulative translation 
   adjustment                             228         195         222 
                                   ==========  ==========  ========== 
 Equity attributable to 
  the shareholders of the 
  parent                                4,139       3,975       4,099 
 
 
 

Consolidated cash flow statement

for the half year ended 31 May 2019 (Unaudited)

 
                                             Half year   Half year   Full year 
                                              ended 31    ended 31    ended 30 
                                              May 2019    May 2018    Nov 2018 
                                            ==========  ==========  ========== 
                                               GBP'000     GBP'000     GBP'000 
 Cash flows from operating activities 
  Profit before tax from continuing 
   operations                                       20          65         177 
  Share-based payment charge                         -           -           4 
  Depreciation                                      76          43          71 
  Decrease/ (increase) in inventories              375         104       (427) 
  Decrease/ (increase) in trade 
   and other receivables                           104         286       (407) 
  (Decrease)/ increase in trade 
   and other payables                            (221)       (338)         571 
  Interest (credit)/ expense                      (14)           -           8 
 
  Cash generated from/ (used in) 
   operations                                      340         160         (3) 
 
  Interest paid                                      -           -         (8) 
  Corporation tax paid                               -        (36)        (88) 
  Net cash generated from/ (used 
   in) operations                                  340         124        (99) 
                                            ==========  ==========  ========== 
 
 Cash flows from investing activities 
  Purchase of property, plant and 
   equipment                                      (57)        (49)        (58) 
 
  Net cash used in investing activities           (57)        (49)        (58) 
                                            ==========  ==========  ========== 
 
 Cash flows from financing activities 
  Equity dividends paid                           (21)        (10)        (21) 
  Ordinary shares issued                             6           -           - 
 
  Net cash used in financing activities           (15)        (10)        (21) 
                                            ==========  ==========  ========== 
 
 Net change in cash and cash equivalents           268          65       (178) 
 
  Cash and cash equivalents at start 
   of period                                       403         579         579 
  Effect of foreign exchange rates                   3        (11)           2 
 
 Cash and cash equivalents at end 
  of period                                        674         633         403 
                                            ==========  ==========  ========== 
 
 

Notes

   1.            General information 

Holders Technology plc is incorporated in the United Kingdom under the Companies Act 2006. The principal activity of the group is to provide specialised materials, components and solutions to the electronics and lighting industries.

   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 2018.

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 2018 and 31 May 2019.

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 2018 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 s498(2) of s498(3) of the Companies Act 2006.

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 22 August 2019.

   3.            Segmental information 

Management currently identifies two operating segments:

   -     PCB, which distributes materials, equipment and supplies to the PCB industry. 

- LCS, which provides lighting and control solutions to the lighting market and commercial buildings sector.

Notes (continued):

   3.            Segmental information (continued) 

Analysis by operating segment

for the half year ended 31 May

 
                           PCB                 LCS            Central Costs           Total 
                       2019      2018      2019      2018      2019      2018      2019      2018 
                    GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
                   ========  ========  ========  ========  ========  ========  ========  ======== 
 
 Revenue              4,291     4,756     1,737     1,426         -         -     6,028     6,182 
 Cost of sales        3,324     3,651     1,125       946         -         -     4,449     4,597 
                   ========  ========  ========  ========  ========  ========  ========  ======== 
 Gross Profit           967     1,105       612       480         -         -     1,579     1,585 
 Distribution 
  costs                 159       165        40        45         -         -       199       210 
 Administration 
  costs                 778       781       541       473        52        56     1,371     1,310 
                   ========  ========  ========  ========  ========  ========  ========  ======== 
 Segment Profit/ 
  (Loss)                 30       159        31      (38)      (52)      (56)         9        65 
                   ========  ========  ========  ========  ========  ========  ========  ======== 
 

4. The tax provision for the six months ended 31 May 2019 is calculated based on the tax rates applicable in the country in which each company operates.

5. A final dividend of 0.50p per share on the total issued share capital of 4,224,164 10p ordinary shares was paid on 21 May 2019 in respect of the year ended 30 November 2018.

An interim dividend payment of 0.25p per share (2018: 0.25p per share) will be payable on 8 October 2019 to shareholders on the register at 13 September 2019. The shares will go ex-dividend on 12 September 2019. The interim dividend had not been approved by the board at 31 May 2019 and accordingly, has not been included as a liability as at that date.

6. The basic earnings per share for continuing operations are based on the profit for the period of GBP49,000 (2018: profit GBP65,000) and on 4,172,759 ordinary shares (2018: 4,159,551), the weighted average number of shares in issue during the period. Diluted earnings per share for continuing operations are based on 4,194,313 ordinary shares (2018: 4,159,551), being the weighted average number of ordinary shares after an adjustment of 21,554 shares (2018: nil shares) in relation to share options.

7. A copy of this half yearly report is being sent to shareholders and is available for inspection at the company's offices at Holders Technology (UK) Ltd., Units 1-4, Block 9, Tweedbank Industrial Estate, Galashiels TD1 3RS and via its website www.holdersgroup.com.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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