TIDMTON
RNS Number : 4515Y
Titon Holdings PLC
13 May 2021
13 May 2021
LEI: 213800ZHXS8G27RM1DD7
Titon Holdings Plc
Unaudited Interim Results for the six months to 31 March
2021
Titon Holdings Plc ("Titon", the "Group" or the "Company"), a
leading international manufacturer and supplier of ventilation
systems and window and door hardware, today announces its Interim
Results for the six months ended 31 March 2021.
Financial Results
Six months Six months % Change
ended 31 March ended 31 March
2021 2020
Net revenue GBP11.68m GBP11.22m +4.1%
EBITDA GBP1.13m GBP0.32m +253%
Profit/(Loss) before GBP0.55m GBP(0.27)m n/a
tax
Basic earnings/(loss)
per share 4.29p (2.73)p n/a
Interim dividend per 1.5p 0p n/a
share GBP4.63m GBP3.69m +25.5%
Cash balance
Financial highlights
-- Net revenue increased by 4.1% due to stronger trading
conditions as the impact of the COVID-19 pandemic reduced and
activity picked-up in our UK and European end markets with sales in
these markets up 16.6%
-- EBITDA increased to GBP1.13 million (2020: GBP0.32m) and was
slightly ahead of budget, reflecting the growth in revenues as well
as higher gross margins (31.9% in H1 2021 against 27.3% in H1
2020)
-- Profit before tax of GBP0.55m after depreciation and amortisation charges of GBP0.51m
-- Cash balance of GBP4.63m at the end of the period (2020:
GBP3.69m) after the resumption of dividends paid to Titon
shareholders as well as further dividend payments to minority
shareholders of Titon Korea
-- Interim dividend of 1.5p per share approved by the Board to
be paid on 25 June 2021 reflecting the improved trading results
Operational highlights
-- Continued recovery in trading in the UK after the impact of
the first national lockdown in 2020 and improvement in European
markets
-- UK Ventilation Systems sales rose by 15% against 2020, and UK
Window and Door Hardware sales rose by 9%
-- European sales increased by 52.1% as construction markets
returned to more normal patterns after the impact of Brexit and
Covid-19 in 2020
-- UK and European businesses both returned to segmental profitability in the period
-- Trading conditions in South Korea remained challenging due to
a weak housing market and the movement to mechanical ventilation
products, which our colleagues in South Korea are addressing
Outlook
-- The Bank of England has forecast a strong rebound in economic
growth in 2021 of 7.25% and Experian have forecast an increase of
19% in new build housing expenditure in 2021 in the UK
-- H2 2021 has started positively, with April 2021 trading
slightly ahead of management's expectations. However, procurement
of certain raw materials and components may become more of a
challenge in the second half, as is being widely reported
-- Uncertainty remains about the potential levels of
unemployment in the UK and the high levels of Government debt as
well as any measures that may need to be taken by the UK Government
to combat any further spread of Covid-19
-- European construction markets are expected to remain open in
2021 but the levels of economic activity remain subject to any
country-specific measures taken to combat Covid-19
-- The Board of Titon remains confident in the long-term
prospects of the Group given the broad product spread, encouraging
trading in H1 2021 and the Group's strong balance sheet which
included cash of GBP4.63m at the period end.
Executive Chairman Keith Ritchie said: "We are pleased with the
trading performance of the Group over the six months period to 31
March 2021, which has seen good levels of sales in our main UK and
European markets for our products and allowed both our UK and
European segments to return to profitability, driving a significant
improvement in EBITDA for the period. We remain positive about
trading prospects for the second half of the year but we remain
aware of the potential for constraints in the supply of raw
materials and components to continue for the remainder of 2021,
which could have the effect of slowing down our activities.
At all times, the health and safety of our staff and
stakeholders is one of our priorities and we continue to follow the
UK Government's guidance on social distancing. The benefit of the
vaccination programme is now really being shown in the Covid-19
data released daily by the UK Government, and we hope that the
Government's roadmap out of lockdown continues on track, which will
help to restore consumer confidence and support the UK economic
recovery.
As always we take comfort from the strength of our balance
sheet, the cash resources that we have, the range of products that
we manufacture and sell and markets in which we trade. The Group is
well capitalised with a strong balance sheet and no debt. We remain
confident in the long-term prospects of the business."
For further information please contact
Titon Holdings Plc
Keith Ritchie: +44 (0) 7748 146834
Shore Capital - Nominated Adviser and Broker
Edward Mansfield +44 (0)20 7408 4090
Daniel Bush
Titon Holdings PLC
Interim results for the six months to 31 March 2021
Chairman's statement
I am pleased to report that we are in a much better position
both as a business and a country this year than we were at this
time last year. In the UK, the data on the impact of the Covid-19
pandemic has improved significantly since the start of 2021. This
is due to the vaccination programme, which is proving very
successful in protecting so many people and the gradual lifting of
restrictions from the third national lockdown imposed in January
2021. From Titon's perspective we have remained open throughout the
period, along with the construction sector, and we have seen a
sustained recovery in demand since the middle of 2020. As a result,
I can report a return to profitability in H1 2021 as trading since
our 30 September 2020 financial year end has been slightly ahead of
budget. We have continued to follow the Government's guidelines for
safe working in our factory in Haverhill and our office based staff
have continued to work from home where they can. We are now turning
our attention to introducing on-going flexible working for our
office-based employees so that they can both spend time in the
office and also work from home, which we will commence gradually
over the next few months.
Income Statement
In the six months to 31 March 2021, Titon's net revenue (which
excludes inter-segment activity) increased by 4.1% to GBP11.7
million (2020: GBP11.2 million). We have been pleased with the
levels of activity in the construction sector both here in the UK
and in Europe and we have also weathered the impact of the UK
leaving the EU's single market and customs union on 31 December
2020. We can report an increase in UK and European sales of 16.6%
against the six months to 31 March 2020.
Gross margin rose to 31.9% (2020: 27.3%) due to the higher
contributions from all of our operations in the UK and Europe.
EBITDA was 259% higher at GBP1.13 million (2020: GBP0.32 million),
whilst we made an operating profit of GBP0.62 million (2020 loss:
GBP0.23 million). The results from the Group's associate, Browntech
Sales Co. Ltd (BTS) in South Korea, amounted to a loss of GBP59,000
(2020 loss: GBP39,000) as a result of the continuing weak housing
market in Korea and the Korean market shift towards mechanical
ventilation. In aggregate, the Group made a profit before tax of
GBP0.55 million (2020 loss: GBP0.27 million).
The earnings per share was 4.29 pence (2020 loss: 2.73 pence)
with the total statutory profits of GBP0.48m (2020 loss: GBP0.30m)
and an apportionment to minority shareholders lower at GBP2,000
(2020: GBP49,000) which reflected the weaker trading incurred by
the Group's 51% owned subsidiary, Titon Korea.
As a result of the continued recovery in trading the Board has
approved the payment of an interim dividend in respect of the 6
months ending 31 March 2021 of 1.5 pence per share (2020: nil pence
per share). The interim dividend is payable on 25 June 2021 to
shareholders on the register at 21 May 2021. The ex-dividend date
is 20 May 2021.
Balance sheet and cash flow
Net assets including non-controlling interests rose by 1.2% or
GBP0.2 million to GBP16.5 million (31 March 2020: GBP16.3 million)
with net cash of GBP4.63 million (31 March 2020: GBP3.69 million)
which is equivalent to 28.0% of net assets (31 March 2020: 22.7%).
The Group had no financial indebtedness at 31 March 2021.
During the period a further dividend of GBP0.4 million was paid
by Titon Korea to the Company in respect of our 51% shareholding,
with GBP0.4 million also being paid to our Korean partners who are
the 49% minority shareholders. The cash held by Titon Korea has
remained consistent at GBP0.3 million at 31 March 2021 (31 March
2020: GBP0.3 million).
The half year saw cash used in operations of GBP0.13 million
(2020: generated GBP0.54 million), primarily due to working capital
components rising in line with the increased levels of activity.
Capital expenditure in the period was GBP0.19 million (2020:
GBP0.19 million) as we continued to carefully manage expenditure on
major items of capital equipment. Capital expenditure will be
higher in the second half as we have recently purchased a new Amada
punch press to increase capacity in our factory, at a total cost of
GBP0.3m. Net current assets were GBP9.2 million at 31 March 2021
(2020: GBP8.8 million) with a Quick Ratio(1) of 2.19 (2020:1.97).
Asset Turn was 2.11 (2020: 1.87).
Segmental and operational review
The contrast with last year is stark with the recovery in
activity continuing throughout the period under review. With our
total revenue increasing 4.1% on 2020, we have recorded strong
growth in revenue for every part of our UK and European businesses
but saw reductions in revenue in both the USA and South Korea.
This revenue growth, when combined with a 4.6% increase in Group
gross margin, lower operating costs due to a reduction in business
activities such as travel and marketing and a lower bad debt
provision has resulted in a significant improvement in Group
operating profits.
UK and Continental Europe
Sales in our UK Window and Door Hardware business were 9% up on
the same period last year as the new build and replacement window
markets both grew due to the improved market conditions in 2021
against the uncertainty caused by the 2019 General Election and
Brexit in the prior period. The increase in home DIY activity in
2020 and 2021 has been well documented and our UK business has been
a beneficiary of this recovery and growth trend. The new build
market has also contributed to a good performance from Ventilation
Systems in the UK, which saw sales of mechanical ventilation
products rise by 15% over the same period last year. One particular
feature was increased sales of the Titon FireSafe(R) Air Brick ,
which was designed as a response to the Hackitt review of building
safety following the Grenfell fire. Total UK revenues increased
8.6% on 2020.
Sales to Europe performed strongly in the six months to 31 March
2021, up 52.1% on the same period in 2020. Export sales of
Ventilation Systems products rose by 67.4% in the period under
review as our network of European customers increased and we
introduced new products. Despite the well-publicised logistics
difficulties that arose in January 2021 after the UK finally left
the EU single market and customs union, sales have continued at a
very similar rate in our Q2 against our Q1 numbers. This reflects
the continuing construction activity in the EU despite the Covid-19
pandemic. We have continued to invest time and money in developing
new products for our customers in Europe and are hopeful that sales
will continue to grow in the second half. Export sales of Window
and Door Hardware products also improved in the period and were up
by 19% against the same period in 2020.
I can report that our UK and European segments both returned to
segmental profitability in the six months to 31 March 2021, after
generating losses in 2020.
South Korea
We noted in the Group's 2020 Annual Report that sales in South
Korea had been badly impacted by the reduction in house building
and the delay of a number of building projects. This has continued
to be the situation in South Korea for the period under review. We
have also been affected by the trend towards mechanical ventilation
in domestic buildings. This has resulted in the contribution from
Titon Korea falling significantly in this period compared to last
year. Our partners in South Korea are working hard to introduce new
natural and mechanical ventilation products to address the market
trends. The contribution from Browntech Sales Co. Limited (BTS),
the Group's associate company, which primarily distributes
ventilation products in South Korea, was also affected by lower
sales in the half year and this resulted in BTS making a small loss
for the period. BTS has, subsequent to the end of this half year,
sold another of its investment properties.
In terms of the segmental contribution from South Korea, the two
businesses, Titon Korea and BTS are added together. The revenue,
which is solely that from Titon Korea (the Group's share of BTS's
profits/losses are accounted for as an associate) was 27% lower at
GBP2.1 million (2020: GBP2.8 million). The segment contribution,
which includes the pre-tax profit of Titon Korea plus 49% of the
post-tax loss of BTS, was a loss of GBP54,000 (2020 profit:
GBP42,000).
United States
Sales in our US business remain a very small portion of the
Group's overall sales and fell 26% from the same period last year
at GBP294,000 (2020: GBP397,000). This is largely due to a fall in
the construction of multi-occupancy housing requiring trickle
vents, in favour of single houses not requiring trickle vents in
our key market areas. This is again disappointing and we have seen
few signs of the situation changing rapidly. Although Titon Inc.
made a small pre-tax loss in the period, when we include the
inter-segmental profits made at our Haverhill factory on products
sold in the US, the contribution to Group profit before tax was
positive.
Board
Since the end of the period under review David Ruffell, Chief
Executive Officer, has left Titon. David worked for Titon for over
33 years and I thank him for the contribution he has made to the
Group. As we have already announced we have recruited a new Chief
Executive, Matthew Norris, who is due to start in July 2021.
We were saddened to hear during this period of the death of
Professor Patrick O'Sullivan who was a Non-Executive Director of
the Group for many years until he retired from the Board in 2013.
Professor O'Sullivan was a highly respected academic and civil
servant who helped introduce ventilation into the Building
Regulations and was a source of guidance to the Board on the
direction of travel for ventilation regulations in the UK.
Once again, I personally would like to thank all of my
colleagues on the Board for their hard work and counsel during
these extraordinary times.
Employees
Our employees have continued to show a high level of dedication
to the business. As noted above, we have followed the Government
guidelines for safe working in the Haverhill factory to ensure they
are protected as much as possible and our Colchester based staff
have been largely working from home. I have seen how much they have
contributed to the results for the period and I offer my and the
Board's thanks for all their efforts.
Investors
Following the recovery in trading that we noted in the 2020
Annual Report and the strong cash position of the Group we were
able to pay a final dividend for the period ended 30 September
2020. I am pleased that due to the strong cash position of the
Group and the trading results in the first half year we will pay an
interim dividend of 1.5 pence per share for the period.
We have continued to work closely with Shore Capital, our
Nominated Adviser and Broker and they have re-commenced research
coverage, including forecasts on the Group. Their most recent
publication in January 2021 emphasised Titon's "rock-solid balance
sheet and exposure to the green economy".
Outlook
At this point we are expecting the UK economy to rebound
strongly as the national lockdowns ease, reinforced by the Bank of
England upgrading its UK economic growth forecast for 2021 to
7.25%, which should be positive for our own business in the UK.
Experian have recently forecasted a continuing rebound in
construction activity in 2021 of 11.3% in 2021 and 5.2% in 2022
following the fall of 14% in 2020. They are also forecasting an
increase of 18.5% in UK new build housing expenditure in 2021 and a
10% increase in public and private housing repairs, maintenance and
improvements. Against this is the considerable uncertainty due to
the potential levels of unemployment when the Government's Job
Retention Scheme expires in the autumn and the very high levels of
Government debt that will be around for the foreseeable future, as
well as lingering uncertainty about the UK Government's on-going
public health approach to controlling the spread of Covid-19.
We have also now seen the proposed changes to the UK Building
Regulations for ventilation, which we believe will be positive for
us as the need to ventilate is linked more closely with the
introduction of energy efficiency measures that the Government is
pushing to reduce the carbon footprint of the housing stock.
Current trading
We are positive about the prospects for our business in the UK
for the second half year but caution that we have experienced some
procurement difficulties and an element of scarcity in recent
months for basic materials, such as plastics, cardboard and metals,
all of which are vital to our production. We are also seeing price
increases imposed by our suppliers, which will impact on our
margins but will be mitigated by our own pricing strategies. The
shortages of building materials including components is industry
wide and now being more widely reported.
In Europe, the impact of the pandemic has been felt at different
times to the UK and the outlook is less positive as the roll-out of
vaccinations has been more haphazard. However, we have some very
loyal customers in Europe, who continue to show interest in our
mechanical ventilation products and we are cautiously optimistic
that the second half year will continue to show good sales.
In South Korea, the economy is forecast to grow this year by
3.0%, according to the Bank of Korea. However, we are anticipating
that revenues for the remainder of the fiscal year will continue to
be significantly affected by the transition to mechanical
ventilation from our natural ventilation products in South Korea as
our partners work hard to re-position the business.
As I continue to observe, we can take comfort from the strength
of our balance sheet and the cash resources that we have, which at
31 March 2021 stood at GBP4.6m. The Group remains well capitalised
with a strong balance sheet and no debt. As a result, we remain
confident in the long-term prospects of the business.
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 2020 within the Strategic Report (page 6)
available at www.titon.com . Assessments of exposure to financial
and other risks remain significantly more difficult currently given
the uncertainties about the impact of Covid-19, the extent and
duration of social distancing measures, government support measures
and the overall impact on the global economy. The Board has
considered the potential impact of these matters on the Group's
specific circumstances, including current and potential cash
resources together with the diverse range of customers and
suppliers, across different geographic areas and markets. As a
consequence the Directors continue to believe that the Group is
well placed to manage business risks successfully.
The Directors have reviewed the budgets, projected cash flows,
principal risks and other relevant information for a period of 12
months from the period end date. On the basis of this review the
Directors have a reasonable expectation that the Group and Company
have adequate resources to continue in operational existence for a
period of at least twelve months and beyond. For this reason the
Directors believe it is appropriate to continue to adopt the going
concern basis in preparing the financial statements.
A list of current directors is maintained on the Group's website
www.titon.com.
On behalf of the Board
KA Ritchie
Chairman
13 May 2021
Notes
1. The Quick Ratio measures liquidity and is calculated by
dividing Current Assets less inventories by Current Liabilities
Titon Holdings Plc
Consolidated Interim Income Statement
for the six months ended 31 March 2021
6 months 6 months Year to
to 31.3.21 to 31.3.20 30.9.20
unaudited unaudited audited
Note GBP'000 GBP'000 GBP'000
Revenue 2 11,684 11,224 20,652
Cost of sales (7,973) (8,157) (15,200)
Grant Income 13 - 202
Gross profit 3,724 3,067 5,654
Distribution costs (575) (747) (1,289)
Administrative expenses (2,280) (2,293) (4,305)
Research and development expenses (256) (259) (446)
Grant Income - - 326
Other income 4 5 21
---------------------------------------- ---- ------------------- ---------- --------
Operating profit / (loss) 617 (227) (39)
Finance income - 7 10
Finance costs (9) (11) (36)
Share of post-tax (loss) / profit
from associates (59) (39) 83
---------------------------------------- ---- ------------------- ---------- --------
Profit / (loss) before tax 549 (270) 18
Income tax (expense) / credit 3 (71) 16 104
Profit / (loss) after income tax 478 (254) 122
---------------------------------------- ---- ------------------- ---------- --------
Attributable to:
Equity holders of the parent 476 (303) 58
Non-controlling interest 2 49 64
---------------------------------------- ---- ------------------- ---------- --------
Profit/ (loss) for the period 478 (254) 122
---------------------------------------- ---- ------------------- ---------- --------
Earnings per share attributed to equity
holders of the parent:
Basic 5 4.29p (2.73)p 0.52p
Diluted 5 4.26p (2.73)p 0.52p
Consolidated Interim Statement of Comprehensive Income
for the six months ended 31 March 2021
6 months 6 months Year to
to 31.3.21 to 31.3.20 30.9.20
unaudited unaudited Audited
GBP'000 GBP'000 GBP'000
Profit / (loss) for the period 478 (254) 122
Other comprehensive income - items
which may be reclassified to profit
or loss in subsequent periods:
Exchange difference on re-translation
of net assets of overseas operations (195) (162) (62)
--------------------------------------- ---------- ---------- -------
Total comprehensive income / (expense)
for the period 283 (416) 60
Attributable to :
Equity holders of the parent 330 (428) (17)
Non-controlling interest (47) 12 77
283 (416) 60
--------------------------------------- ---------- ---------- -------
Titon Holdings Plc
Consolidated Interim Statement of Financial Position
at 31 March 2021
31.3.21 31.3.20 30.9.20
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment* 3,244 3,865 3,469
Right-of-use assets* 619 567 772
Intangible assets 808 630 753
Investments in associates 2,739 2,753 2,877
Deferred tax assets 284 266 333
--------- --------- -------
Total non-current assets 7,694 8,081 8,204
--------- --------- -------
Inventories 4,278 4,688 4,367
Trade and other receivables 4,453 4,583 3,779
Income tax receivable - 33 -
Cash and cash equivalents 4,633 3,695 5,572
--------- --------- -------
Total current assets 13,364 12,999 13,718
Total Assets 21,058 21,080 21,922
-------------------------------- --------- --------- -------
Liabilities
Lease liabilities 379 550 531
--------- --------- -------
Total non-current liabilities 379 550 531
--------- --------- -------
Trade and other payables 3,889 3,949 4,303
Lease liabilities 258 259 277
Income tax payable - 14 -
Total current liabilities 4,147 4,222 4,580
Total Liabilities 4,526 4,772 5,111
-------------------------------- --------- --------- -------
Equity
Share capital 1,119 1,113 1,113
Share premium reserve 1,077 1,049 1,049
Capital redemption reserve 56 56 56
Treasury shares (27) (27) (27)
Foreign exchange reserve 180 277 327
Retained earnings 13,697 13,039 13,425
-------------------------------- --------- --------- -------
Total Equity attributable
to the equity holders
of the parent 16,102 15,507 15,943
Non-controlling Interest 430 801 868
Total Equity 16,532 16,308 16,811
Total Liabilities and
Equity 21,058 21,080 21,922
-------------------------------- --------- --------- -------
*Reclassification of assets at 31 March 2020 due to first time
adoption of IFRS16.
Titon Holdings Plc
Consolidated Interim Statement of Changes in Equity
at 31 March 2021
Share Share Capital Foreign Treasury Retained Total Non- Total
capital premium redemption exchange Shares earnings controlling Equity
reserve reserve reserve interest
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30
September
2019 (as
restated) 1,113 1,049 56 402 (27) 13,669 16,262 1,459 17,721
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Accounting
policy
change IFRS
9 - - - - - (19) (19) (2) (21)
At 1 October
2019 1,113 1,049 56 402 (27) 13,650 16,243 1,457 17,700
Translation
differences
on overseas
operations - - - (125) - - (125) (37) (162)
Loss for the
period - - - - - (303) (303) 49 (254)
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Total
comprehensive
expense for
the period - - - (125) - (303) (428) 12 (416)
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Dividends paid - - - - - (332) (332) - (332)
Dividends paid
to NCI in
subsidiary - - - - - - - (668) (668)
Share-based
payment
credit - - - - - 24 24 - 24
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
At 31 March
2020 1,113 1,049 56 277 (27) 13,039 15,507 801 16,308
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Accounting
policy
change IFRS
9 - - - - - 3 3 2 5
Translation
differences
on overseas
operations - - - 50 - - 50 50 100
Profit for the
period - - - - - 361 361 15 376
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Total
comprehensive
income for
the
period - - - - - 361 411 65 476
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Share-based
payment
credit - - - - - 22 22 - 22
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
At 30
September
2020 1,113 1,049 56 327 (27) 13,425 15,943 868 16,811
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Translation
differences
on overseas
operations - - - (147) - - (147) (49) (196)
Profit for the
period - - - - - 476 476 2 478
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Total
comprehensive
income for
the
period - - - (147) - 476 329 (47) 282
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Dividends paid - - - - - (223) (223) - (223)
Dividends paid
to NCI in
subsidiary - - - - - - - (391) (391)
Share-based
payment
credit - - - - - 19 19 - 19
Exercise of
share options 6 28 - - - - 34 - 34
At 31 March
2021 1,119 1,077 56 180 (27) 13,697 16,102 430 16,532
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Titon Holdings Plc
Consolidated Interim Statement of Cash Flow
for the six months ended 31 March 2021
6 months 6 months Year to
to 31.3.21 to 31.3.20 30.9.20
unaudited unaudited audited
Note GBP'000 GBP'000 GBP'000
Cash generated from operating activities
Profit / (loss) before tax 549 (270) 18
Depreciation of property, plant &
equipment 235 273 559
Depreciation of right-of-use assets 161 151 257
Amortisation of intangible assets 118 118 236
Profit on sale of plant & equipment - (20) (16)
Share based payment - equity settled 19 24 46
Finance income - (7) (10)
Finance costs 17 11 36
Share of associate's post-tax loss
/ (profit) 59 39 (83)
------------------
1,158 319 1,043
Decrease in inventories 89 180 519
(Increase) / decrease in receivables (745) 796 1,667
(Decrease) / increase in payables
and other current liabilities (635) (751) (468)
----------------------------------------- ---- -------------------- ------------------ ------------------
Cash generated (used in) / by operations (133) 544 2,761
----------------------------------------- ---- -------------------- ------------------ ------------------
Income taxes paid (22) (83) (43)
----------------------------------------- ---- -------------------- ------------------ ------------------
Net cash (used in) / generated by
operating activities (155) 461 2,718
----------------------------------------- ---- -------------------- ------------------ ------------------
Cash flows from investing activities
Purchase of plant & equipment (14) (158) (246)
Purchase of intangible assets (173) (30) (271)
Proceeds from sale of plant & equipment - 30 46
Finance income - 7 10
Net cash (used in) / generated by
investing activities (187) (151) (461)
----------------------------------------- ---- -------------------- ------------------ ------------------
Cash flows from financing activities
Dividends paid to equity shareholders
of the parent 4 (223) (332) (332)
Dividends paid to non-controlling
shareholders of a subsidiary (391) (668) (668)
Payment of lease liability - (191) (261)
Finance costs (17) (11) (36)
Exercise of Share Options 34 - -
Net cash (used in) / generated by
financing activities (597) (1,202) (1,297)
----------------------------------------- ---- -------------------- ------------------ ------------------
Net (decrease) / increase in cash
** (894) (865) 960
Foreign exchange (45) (27) 25
Cash at beginning of the period 5,572 4,587 4,587
----------------------------------------- ---- -------------------- ------------------ ------------------
Cash at end of the period 4,633 3,695 5,572
----------------------------------------- ---- -------------------- ------------------ ------------------
**The net decrease in Group cash since 30 September 2020 is
GBP939,000 (2020: GBP892,000) after allowing for foreign exchange
movements.
Notes to the Condensed Consolidated Interim Statements
at 31 March 2021
1 Accounting policies
a ) General information
Titon Holdings Plc (the 'Company') is incorporated and domiciled
in England and its shares are publicly traded on AIM. The
registered office address is 894 The Crescent, Colchester Business
Park, Colchester, Essex, CO4 9YQ. The company's registered number
is 1604952. The principal activities of the Group are as described
in Note 2.
The Board considers the principal risks and uncertainties
relating to the Group for the next six months to be the same as
detailed in the last Annual Report and Financial Statements to 30
September 2020. The Group's financial risk management objectives
and policies are consistent with those disclosed in the
consolidated financial statements as at and for the year ended 30
September 2020.
b) Basis of preparation
These condensed consolidated interim financial statements of the
Group for the six months ended 31 March 2021 comprise the Company
and its subsidiaries (together referred to as the 'Group').
The condensed consolidated interim financial statements have
been prepared in accordance with the AIM rules. Neither the six
months results for 2021 nor the six months results for 2020 have
been audited nor reviewed pursuant to guidance issued by the
Auditing Practices Board. This condensed Interim Group financial
Statements do not comprise statutory accounts within the meaning of
Section 435 of the Companies Act 2006. The comparative figures for
the year ended 30 September 2020 do not constitute statutory
accounts within the meaning of Section 435 of the Companies Act
2006, but they have been derived from the audited Report and
Accounts for that year, which have been filed with the Registrar of
Companies. The independent auditor's report on those accounts was
unqualified, did not draw attention to any matters by way of
emphasis and did not contain a statement under Section 498(2) or
(3) of the Companies Act 2006.
This report should be read in conjunction with the Group's
Annual Report and Accounts for the year ended 30 September 2020,
which have been prepared in accordance with IFRS's as adopted by
the European Union.
These unaudited interim Group Financial Statements were approved
for issue on 13 May 2021. Copies will be sent to shareholders
within the next few weeks and will be available on the Group's
website at www.titon.com/uk/investors/ and from the Company's
registered office at 894 The Crescent, Colchester Business Park,
Colchester, Essex CO4 9YQ.
c) Accounting policies
These condensed consolidated interim financial statements have
been prepared in accordance with the recognition and measurement
requirements of the UK adopted international accounting
standards.
In preparing these condensed consolidated interim financial
statements the Board have considered the impact of new standards
which will be applied in the 2021 Annual Report and Accounts.
There are not expected to be any changes in the accounting
policies compared to those applied at 30 September 2020.
A full description of accounting policies is contained with our
2020 Annual Report and Financial Statements, which is available on
our website.
New accounting standards
The Group does not expect any other standards issued by the
IASB, but not yet effective, to have a material impact on the
Group.
2 Revenue and segmental information
In identifying its operating segments, management generally
follows the Group's reporting lines, which represent the main
geographic markets in which the Group operates. The segment
reporting below is shown in a manner consistent with the internal
reporting provided to the Board, which is the Chief Operating
Decision Maker (CODM). These operating segments are monitored and
strategic decisions are made on the basis of segment operating
results. The Group operates in four main business segments which
are:
Segment Activities undertaken include:
United Kingdom Sales of passive and powered ventilation products
to housebuilders, electrical contractors and
window and door manufacturers. In addition to
this, it is a leading supplier of window and
door hardware
South Korea Sales of passive ventilation products to construction
companies
North America Sales of passive ventilation products to window
and door manufacturers
All other Sales of passive and powered ventilation products
countries to distributors, window manufacturers and construction
companies
Inter-segment revenue is transacted on an arm's length basis and
charged at prevailing market prices for a specific product and
market or cost plus where no direct comparative market price is
available. Segment results include items directly attributable to a
segment as well as those that can be allocated on a reasonable
basis. Research and development entity-wide financial expenses are
allocated to the business activities for which R&D is
specifically performed. Administration Expenses are currently
allocated to operating segments in the Group's reporting to the
CODM and include central and parent company overheads relating to
Group management, the finance function and regulatory
requirements.
The measurement policies the Group uses for segment reporting
under IFRS 8 are the same as those used in its financial
statements.
The Group recognises revenue at a single point in time in its UK
and US subsidiary. The nature of business practice at its South
Korean subsidiary means that the Group recognises revenue there
over time, this being at first fix and second fix stages. As
invoicing for both first fix and second fix components usually
takes place at the first fix stage, the revenue on the second fix
products is deferred in the Financial Statements until the point
that those second fix products are accepted by the customer.
The total assets for the segments represent the consolidated
total assets attributable to these reporting segments. Parent
company results and consolidation adjustments reconciling the
segmental results and total assets to the consolidated financial
statements are included within the United Kingdom segment figures
stated.
Operating segment United South North All other Total
Kingdom Korea America countries
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months ended 31 March
2021
Segment revenue 7,910 2,051 294 1,598 11,853
Inter-segment revenue (169) - - - (169)
------------------------------------- --------- -------- --------- ----------- --------
Total Revenue 7,741 2,051 294 1,598 11,684
------------------------------------- --------- -------- --------- ----------- --------
Segment (loss) / profit 517 (54) 22 64 549
Income tax expense (71)
------------------------------------- --------- -------- --------- ----------- --------
Profit for the period 478
------------------------------------- --------- -------- --------- ----------- --------
Depreciation and amortisation 336 17 - - 353
------------------------------------- --------- -------- --------- ----------- --------
Depreciation of Right-of-use-assets 68 93 - - 161
------------------------------------- --------- -------- --------- ----------- --------
Total assets 16,168 4,705 185 - 21,058
------------------------------------- --------- -------- --------- ----------- --------
Total assets include:
Investments in associates 2,739 - - - 2,739
Additions to non-current
assets (other than financial
instruments and deferred
tax assets) 181 6 - - 187
------------------------------------- --------- -------- --------- ----------- --------
The South Korean Segment profit includes the Group's share of
the post-tax profit from the Group's associate undertaking,
Browntech Sales Co. Ltd. Sales to Browntech Sales Co. Ltd. of
GBP2.05 million represent 18% of Group Revenue. There are no other
concentrations of revenue above 10% during the year (see Note 6 -
Related party transactions).
IFRS 8 requires entity-wide disclosures to be made about the
regions in which it earns its revenues and holds its non-current
assets which are shown below.
United Europe USA and Asia All other Total
Kingdom Canada regions
Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
by entities' country of
domicile 9,339 - 294 2,051 - 11,684
by country from which
derived 7,741 1,565 294 2,051 33 11,684
------------------------- --------- -------- -------- -------- ---------- --------
Non-current assets
By entities' country of
domicile 4,628 - 43 3,023 - 7,694
------------------------- --------- -------- -------- -------- ---------- --------
Operating segment United South North All other Total
Kingdom Korea America countries
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months ended 31 March
2020
Segment revenue 7,139 2,819 397 1,033 11,388
Inter-segment revenue (164) - - - (164)
------------------------------------- --------- -------- --------- ----------- --------
Total Revenue 6,975 2,819 397 1,033 11,224
------------------------------------- --------- -------- --------- ----------- --------
Segment (loss) / profit (203) 66 27 (160) (270)
Income tax credit 16
------------------------------------- --------- -------- --------- ----------- --------
Loss for the period (254)
------------------------------------- --------- -------- --------- ----------- --------
Depreciation and amortisation 370 21 - - 391
------------------------------------- --------- -------- --------- ----------- --------
Depreciation of Right-of-use-assets 77 74 - - 151
------------------------------------- --------- -------- --------- ----------- --------
Total assets 14,837 6,046 197 - 21,080
------------------------------------- --------- -------- --------- ----------- --------
Total assets include:
Investments in associates 2.528 - - - 2,528
Additions to non-current
assets (other than financial
instruments and deferred
tax assets) 139 240 - - 379
------------------------------------- --------- -------- --------- ----------- --------
The South Korean Segment profit includes the Group's share of
the post-tax profit from the Group's associate undertaking,
Browntech Sales Co. Ltd. Sales to Browntech Sales Co. Ltd. of
GBP2.8 million represent 25% of Group Revenue. There are no other
concentrations of revenue above 10% during the year (see Note 6 -
Related party transactions).
IFRS 8 requires entity-wide disclosures to be made about the
regions in which it earns its revenues and holds its non-current
assets which are shown below.
6 months ended 31 March United Europe USA and Asia All other Total
2020 Kingdom Canada regions
Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
by entities' country of
domicile 8,008 - 397 2,819 - 11,224
by country from which
derived 6,962 1,029 397 2,819 17 11,224
------------------------- --------- -------- -------- -------- ---------- --------
Non-current assets
By entities' country of
domicile 4,934 - 39 3,108 - 8,081
------------------------- --------- -------- -------- -------- ---------- --------
For the year ended United South North All other
30 September 2020 Kingdom Korea America countries Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 12,570 4,919 777 2,751 21,017
Inter-segment revenue (365) - - - (365)
------------------------------ -------- ------- -------- ---------- ------------------------------
Total Revenue 12,205 4,919 777 2,751 20,652
------------------------------ -------- ------- -------- ---------- ------------------------------
Segment profit (205) 222 182 (181) 18
Tax expense 104
------------------------------ -------- ------- -------- ---------- ------------------------------
Profit for the year 122
------------------------------ -------- ------- -------- ---------- ------------------------------
Depreciation and amortisation 891 161 - - 1,052
------------------------------ -------- ------- -------- ---------- ------------------------------
Total assets 15,555 6,058 309 - 21,922
------------------------------ -------- ------- -------- ---------- ------------------------------
Total assets include:
Investments in associates 2,877 - - - 2,877
Additions to non-current
assets
(other than financial
instruments
and deferred tax
assets) 481 297 - - 778
------------------------------ -------- ------- -------- ---------- ------------------------------
The South Korea Segment profit includes the Group's share of the
profits from Browntech Sales Co. Ltd., (BTS), the Group's associate
undertaking in South Korea, of GBP83,000. Sales to BTS of GBP4.92m
represented 24% of Group Revenue (2019: GBP8.33m - 31%). There are
no other concentrations of revenue above 10% during the year (see
Note 6 - Related party transactions).
IFRS 8 requires entity wide disclosures to be made about the
regions in which it earns its revenues and holds its non-current
assets which are shown below.
For the year ended United Europe USA and South All other Total
30 September 2020 Kingdom Canada Korea regions
Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
By entities' country
of domicile 14,956 - 777 4,919 - 20,652
By country from which
derived 12,205 2,694 777 4,919 57 20,652
---------------------- -------- ------- ------- ------- --------- -------
Non-current assets
By entities' country
of domicile 4,903 - 40 3,261 - 8,204
---------------------- -------- ------- ------- ------- --------- -------
3 Taxation
6 months 6 months Year to
to 31.3.21 to 31.3.20 30.9.20
Current income tax: GBP'000 GBP'000 GBP'000
Corporation tax expense (22) (52) (38)
Adjustment in respect of prior years - - 7
---------- ---------- -------
(22) (52) (31)
---------- ---------- -------
Deferred tax:
Origination and reversal of temporary
differences (49) 68 135
Income tax (expense) / credit (71) 16 104
-------------------------------------- ---------- ---------- -------
Taxation for the interim period is charged at 12.9% (six months
to 31 March 2020: credited at 5.9%) representing the best estimate
of the average annual income tax rate for the full financial
year.
4 Dividends
The following dividends have been recognised and paid by the
Company:
6 months 6 months Year
to
to 31.3.21 to 31.3.20 30.9.20
Date Pence
Paid per GBP'000 GBP'000 GBP'000
share
Final in respect of the
year end 30.09.19 21.02.20 3.00 - 332 332
Final in respect of the
year end 30.09.20 12.03.21 2.00 223 - -
---------- ---------- ---------
223 332 332
---------- ---------- ---------
5 Earnings per ordinary share
Basic earnings per share has been calculated by dividing the
profits or losses attributable to shareholders of Titon Holdings
Plc by the weighted average number of ordinary shares in issue
during the period, being 11,105,179 (six months ended 31 March
2020: 11,083,750; year ended 30 September 2020: 11,083,750).
Diluted earnings per share (EPS) is calculated by dividing the
profits or losses attributable to shareholders by the weighted
average number of ordinary shares and potential dilutive ordinary
shares during the period, being 11,168,179 at 31 March 2021, except
that at this date, when the inclusion of potential ordinary shares
(POSs) in the calculation would increase the EPS, or decrease the
loss per share, from continuing operations, then these POSs are
anti-dilutive and are ignored in diluted EPS. Potential dilutive
ordinary shares at: six months ended 31 March 2020: 11,200,107 and
year ended 30 September 2020: 11,167,125.
6 Related party transactions
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation and are not
disclosed in this note. Transactions between subsidiary companies
and the associate company, which is a related party, were as
follows:
Sale of goods Amount owed by related
party
6 months 6 months Year 6 months 6 months Year
to 31.3.21 to 31.3.20 to to 31.3.21 to 31.3.20 to
to 30.9.20 to 30.9.20
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Browntech Sales
Co. Ltd 2,051 2,819 4,919 - 827 293
------------ ------------ ------------ ------------ ------------ ------------
There have been no additional significant or unusual related
party transactions to those disclosed in the Group's Annual Report
for 30 September 2020.
7 Liability statement
Neither the Group nor the Directors accept any liability to any
person in relation to the interim statement except to the extent
that such liability could arise under English Law. Accordingly, any
liability to a person who has demonstrated reliance on any untrue
or misleading statement or omission shall be determined in
accordance with section 90A of the Financial Services and Markets
Act 2000.
Directors and Advisers
Directors
Executive
KA Ritchie (Chairman)
D A Ruffell (Chief Executive) resigned 30 April 2021
T N Anderson
T D Gearey
Non-executive
J N Anderson (Deputy Chairman)
K Sargeant
N C Howlett
B Ratzke
Secretary and registered office
C Isom
894 The Crescent
Colchester Business Park
Colchester
Essex CO4 9YQ
COMPANY REGISTRATION NUMBER
1604952 (Registered in England & Wales)
WEBSITE
www.titon.com/uk/investors
auditors
BDO LLP
55 Baker Street
London
W1U 7EU
NOMINATED ADVISER
Shore Capital and Corporate Ltd
Cassini House
57-58 St. James's Street
London
SW1A 1LD
BROKER
Shore Capital Stockbrokers Ltd
Cassini House
57-58 St. James's Street
London
SW1A 1LD
REGISTRARS AND TRANSFER OFFICE
Link Market Services Ltd
10(th) Floor
Central Square
Leeds
LS1 4DL
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