Holders Technology - Final Results

Holders Technology

02/03/2018 07:00

RNS Number : 4694G

Holders Technology PLC

02 March 2018

Holders Technology plc

Specialised PCB Materials, LED Components and Smart Lighting

Unaudited results for the year ended 30 November 2017

Holders Technology plc ("Holders Technology" or "the Group") announces its unaudited results for the year ended 30 November 2017. Holders Technology supplies specialty laminates and materials for printed circuit board manufacture ("PCB"), and operates as an LED solutions provider to the lighting and selected industrial markets.

The Group made notable progress during the year, with encouraging revenue growth, improved margins, and a return to profitability.

The Group now comprises two PCB divisions based in the UK and Germany, and two LED divisions also based in the UK and Germany. In the opinion of the directors, all divisions achieved satisfactory growth by the year end.

NRGstar was discontinued during the period, and Opteon Germany was discontinued at the end of 2016. Both operations' results are shown separately as discontinued operations.

The directors will recommend payment of a final dividend of 0.25p per share.

Highlights included:

'000
Change compared to 2016
Continuing Revenue
PCB
9,453
13% Increase *1
LED
2,755
17% Increase *2
Group
12,208
14% Increase *3
Continuing Operating Profit/ (Loss)
PCB
214
215,000 Improvement
LED
(92)
137,000 Improvement
Central Costs
(57)
26,000 Increase
Group
65
326,000 Improvement
Discontinued Loss
Group
(42)
71,000 Improvement
Profit for the Year
Group
17
412,000 Improvement
Cash Balances
Group
579
202,000 Reduction
Earnings per Share
Continuing
1.42p
8.36p Improvement
Total
0.41p
10.13p Improvement
Debt
Group
Nil
No change
*Increase includes 17% / 24% / 36% arising from exchange rate movements


Chairman's statement

In my last Annual Statement, I reported that a number of changes were being made to the Group's management and sales teams and that along with this, further investments in PCB machinery were being made. The aim of these measures was to enable the Group to return to profitability and I am very pleased to be able to report that the Group did achieve an operating profit for the year of 65,000 from continuing operations (2016: operating loss of 261,000).

The Group now comprises PCB and LED divisions, based in both the UK and Germany. Two unprofitable activities NRGStar, based in the UK, and Opteon, based in Germany, were closed with their combined results recording a loss of 42,000 (2016: loss 113,000).

The overall Group result for the year showed continuing revenues of 12.2m (2016: 10.7m), with gross margins of 26.3% (2016: 24.9%) and a profit after tax of 17,000 (2016: loss 395,000). Approximately 0.7m of the Group revenue growth related to the Euro strengthening against sterling.

The PCB divisions together had revenue of 9.5m (2016: 8.3m) and achieved an operating profit of 214,000 (2016: loss 1,000) with margins improving from 22.2% to 24.2%. Approximately 0.6m of the PCB revenue growth related to the Euro strengthening against sterling.

Our German PCB operations, the largest single element of the Group, had a successful year with satisfactory growth from both existing and new product lines. Investments were made in machinery and improved systems during the year and we plan further investment in 2018.

UK PCB operations achieved encouraging revenue growth from a number of new product lines. The directors expect modest revenue improvement in 2018.

LED revenues overall amounted to 2.8m (2016: 2.4m) with gross margins decreased slightly to 33.4% (2016: 34.2%) and operating losses being reduced from 229,000 in 2016 to 92,000 in 2017. Approximately 0.1m of the LED revenue growth related to the Euro strengthening against sterling.

The LED divisions both had stronger second halves in 2017 with the UK division, in particular, substantially improving its performance. The product range continues to develop with smart lighting controls a key focus for the future. Both divisions were profitable in the second half of the year.

On behalf of the Board I would like to record our thanks to all of our staff for their hard work during 2017 which resulted in a profitable year for the Group. With 2017 seeing a return to profitability the board and management team remain fully committed to achieving further improvement in both sales and profitability in 2018 and beyond. The Board considers it appropriate to recommend a final dividend of 0.25p in respect of the 2017 year.

R W Weinreich

Executive Chairman

1 March 2018

Group income statement for the year ended 30 November 2017

Note
2017
2016
'000
Restated
'000
Revenue
12,208
10,698
Cost of sales
(9,003)
(8,038)
Gross profit
3,205
2,660
Distribution costs
(438)
(385)
Administrative expenses
(2,695)
(2,539)
Restructuring costs
-
(116)
Other operating (expenses)/ income
(7)
119
Operating profit/ (loss)
65
(261)
Finance income
-
3
Finance expenses
(11)
(7)
Profit/ (loss) before taxation
54
(265)
Tax credit/ (expense)
2
5
(17)
Profit/ (loss) after taxation from continuing operations
59
(282)
Loss from discontinued operations
4
(42)
(113)
Profit/ (loss) for the year attributable to equity shareholders
17
(395)
Basic earnings/ (loss) per share - continuing operations
5
1.42p
(6.94p)
Diluted earnings/ (loss) per share - continuing operations
5
1.34p
(6.94p)
Basic and diluted loss per share - discontinued operations
5
(1.01p)
(2.78p)
Total earnings/ (loss) per share
5
0.41p
(9.72p)

Group statement of comprehensive income for the year ended 30 November 2017

2017
'000
2016
'000
Profit/ (loss) for the year
17
(395)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
73
346
Total comprehensive income and expense for the year
90
(49)

Statements of changes in equity for the year ended 30 November 2017

Group
Share capital
Share premium
Capital redemption reserve
Translation reserve
Retained earnings
Total equity
'000
'000
'000
'000
'000
'000
Balance at 1 December 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)
Other comprehensive income
-
-
-
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
Dividends
-
-
-
-
(21)
(21)
Shares based payments
-
-
-
-
3
3
Transactions with owners
-
-
-
-
(18)
(18)
Profit for the year
-
-
-
-
17
17
Other comprehensive income
-
-
-
73
-
73
Total comprehensive income for the year
-
-
-
73
17
90
Balance at 30 November 2017
416
1,590
1
207
1,718
3,932

Group balance sheet at 30 November 2017

2017
2016
'000
'000
Assets
Non-current assets
Goodwill
318
318
Property, plant and equipment
369
400
Investments in subsidiaries
-
-
Deferred tax assets
9
9
696
727
Current assets
Inventories
2,408
2,365
Trade and other receivables
2,272
1,790
Cash and cash equivalents
579
781
5,259
4,936
Liabilities
Current liabilities
Trade and other payables
(1,675)
(1,457)
Current tax liabilities
(122)
(122)
(1,797)
(1,579)
Net current assets
3,462
3,357
Non-current liabilities
Retirement benefit liability
(226)
(219)
Deferred tax liabilities
-
(5)
(226)
(224)
3,932
3,860
Shareholders' equity
Share capital
416
416
Share premium account
1,590
1,590
Capital redemption reserve
1
1
Retained earnings
1,718
1,719
Cumulative translation adjustment reserve
207
134
3,932
3,860

Statement of cash flows for the year ended 30 November 2017

2017
2016
Restated
'000
'000
Cash flows from operating activities
Profit/ (loss) before tax from continuing operations
54
(265)
Share-based payment charge
3
-
Depreciation
72
74
(Increase)/ decrease in inventories
(34)
387
Increase in trade and other receivables
(368)
(220)
Decrease in trade and other payables
Interest income
Interest expense
128
-
11
349
(3)
7
Cash (used in)/ generated from operations
(134)
329
Interest paid
Corporation tax paid
(11)
-
(7)
(48)
(Loss)/ profit from discontinued operations
(9)
89
Net cash (used in)/ generated from operations
(154)
363
Cash flows from investing activities
Purchase of property, plant and equipment
(41)
(110)
Proceeds from sale of property, plant and equipment
4
-
Proceeds from sale of joint venture
-
22
Interest received
-
3
Net cash (used in)/generated from investing activities
(37)
(85)
Cash flows from financing activities
Proceeds from sale of shares
-
59
Equity dividends paid
(21)
(20)
Net cash (used in)/ generated from financing activities
(21)
39
Net change in cash and cash equivalents
(212)
317
Cash and cash equivalents at start of period
781
443
Effect of foreign exchange rates
10
21
Cash and cash equivalents at end of period
579
781


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

2017
'000
2016
'000
Analysis of the charge in the period
Current tax
- Current period
-
-
- Adjustments in respect of prior periods
-
17
-
17
Deferred tax
(5)
-
Total tax
(5)
17
Tax reconciliation
The tax for the period is lower (2016: higher) than the standard rate of corporation tax in the UK, effectively 20.0% (2016: 20.0%) for the company's financial year. The differences are explained below:

2017
'000
2016
'000
Profit/ (loss) before taxation
54
(265)
Profit/ (loss) before taxation multiplied by the rate of corporation tax in the UK of 20.0 % (2016: 20.0%)
11
(53)
Effects of:
Adjustments in respect of prior years
-
17
Taxation losses
(16)
53
Taxation
(5)
17

3. The directors have proposed a final dividend of 0.25p per share payable on 22 May 2018 to shareholders on the register at close of business on 4 May 2018. The total dividend for the year, including the interim dividend of 0.25p (2016: 0.25p) per share paid on 10 October 2017, amounts to 20,000 (2016: 20,000), which is equivalent to 0.50p (2016: 0.50p) per share.

4. Discontinued operations

At the end of 2016 it was announced that Opteon, the finished goods operations in Germany, would be discontinued, and in March 2017 the equivalent activity in UK, branded as NRGstar, also ceased. This point marked the Group's cessation of this type of LED operation, and a re-focus on sales of LED components, lighting solutions and smart lighting systems.

The discontinuation of Opteon operations was not disclosed as a discontinued operation within the 2016 financial statements. The 2016 figures have been restated to disclose Opteon as discontinued. The Board are of the view that this presentation of information enables users of the financial statements to understand the financial effects of these operations no longer being part of the Group. The impact of the discontinuation of NRGstar operations is shown for both the current and prior year results.

Notes continued

4. Discontinued operations (continued)

Discontinued operations - Income statement
2017
NRGstar
'000
Total
'000
NRGstar
'000
2016
Opteon
'000
Total
'000
Revenue
50
50
344
338
682
Cost of sales
(45)
(45)
(250)
(251)
(501)
Gross profit
5
5
94
87
181
Distribution expenses
(1)
(1)
(10)
(4)
(14)
Administration expenses
(46)
(46)
(128)
(82)
(210)
Other operating expenses
-
-
-
(3)
(3)
Operating loss
(42)
(42)
(44)
(2)
(46)
Impairment costs
-
-
-
(67)
(67)
Loss before tax
(42)
(42)
(44)
(69)
(113)
Taxation on discontinued operations
-
-
-
-
-
Loss for the period from discontinued operations
(42)
(42)
(44)
(69)
(113)

Discontinued operations - Cash Flow statement
2017
NRGstar
'000
Total
'000
NRGstar
'000
2016
Opteon
'000
Total
'000
Cash flows from operating activities
Loss before tax
(42)
(42)
(44)
(69)
(113)
Depreciation
8
8
-
2
2
Increase in inventories
60
60
1
121
122
(Increase)/ decrease in trade and other receivables
109
109
(55)
123
68
(Decrease)/ increase in trade and other payables
(144)
(144)
(25)
35
10
Net change in cash and cash equivalents
(9)
(9)
(123)
212
89

5. The basic earnings per share for the continuing business are based on the profit for the financial year of 59,000 (2016: loss of 282,000) and on ordinary shares of 4,159,551 (2016: 4,063,813), the weighted average number of shares in issue during the year. Diluted earnings per share as based on 4,414,419 ordinary shares, being the weighted average number of ordinary shares after an adjustment of 254,868 in relation to share options. There was no earnings dilution calculated in 2016 as a loss was recorded by the Group.

6. This preliminary statement, which has been approved by the Board on 1 March 2018, is not the Company's statutory accounts. The statutory accounts for the year to 30 November 2016 received an audit report which was unqualified and did not contain statements under section 498(2) and section 498(3) of the Companies Act 2006.

For further information, contact:

Rudi Weinreich, Executive Chairman, Holders Technology plc,

Tel. 07800 600 520

Paul Geraghty, Group Finance Director, Holders Technology plc,

Tel. 07800 600 520

Tom Price, Director, Corporate Finance, Northland Capital Partners Ltd,

Tel. 020 3861 6625

Website www.holdersgroup.com

This information is provided by RNS

The company news service from the London Stock Exchange

END

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