Holders Technology - Final Results

Holders Technology

16/03/2020 07:00

RNS Number : 1795G

Holders Technology PLC

16 March 2020

 

Holders Technology plc

("The Group")

 

Specialised PCB Materials, Lighting and Control Solutions

 

Final results for the year ended 30 November 2019

 

 

Holders Technology plc (AIM: HDT) announces its audited results for the year ended 30 November 2019.

 

The Group supplies specialty laminates and materials for printed circuit board manufacture ("PCB") and operates as a Lighting and Control Solutions ("LCS") provider.  The Group operates from the UK and from Germany, with a PCB division and an LCS division in each country.

 

LCS divisions made further progress during the year and achieved profitability, and the PCB UK division in the UK made modest progress.  Market conditions for the PCB division in Germany remained difficult which resulted in reduced revenue and profitability for the division.  The UK legacy tax liabilities were resolved with a favourable outcome.  The overall profit after tax was a modest improvement compared to 2018, from slightly reduced revenue.

 

The directors will recommend payment of a final dividend of 0.75p per share, a total of 1.00p for the year (2018 total: 0.75p).

 

The results are summarised below.

2019
2018
£'000
£'000
· Revenue
PCB
8,647
9,374
LCS
3,515
3,112
Group
12,162
12,486
· Operating Profit/ (Loss)
PCB
230
280
LCS
69
(13)
Central costs
(155)
(83)
Group
144
184
· Profit before tax
Group
150
177
Tax credit/ (expense)
31
(8)
Profit after tax
181
169
· Cash Balances
Group
734
403
· Basic Earnings per Share
Group
4.31p
4.06p
· Diluted Earnings per Share
Group
4.30p
4.03p

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

For further information, contact:

Holders Technology plc
01896 758781
Rudi Weinreich, Executive Chairman
Victoria Blaisdell, Group Managing Director
Paul Geraghty, Group Finance Director
Website www.holdersgroup.com
SP Angel Corporate Finance LLP - Nominated Advisor & Broker
020 3470 0470
Matthew Johnson / Caroline Rowe


 

Chairman's statement

 

The Group operates from the UK and from Germany, with a PCB division and an LCS division in each country. 

 

I am pleased to report that both LCS divisions have continued to make good progress during 2019, and PCB UK has achieved modest growth.  Market conditions for PCB Germany however have remained difficult.  As a consequence, Group revenue was slightly lower than 2018.  Operating profitability was lower than 2018, while after-tax profitability improved slightly compared to 2018.

 

Revenue for the year was £12.2m (2018: £12.5m), with gross margins of 27.9% (2018: 26.2%).  The operating profit for the year was £144,000 (2018: operating profit of £184,000), and the profit after tax was £181,000 (2018: profit £169,000).

 

The PCB divisions together had revenue of £8.6m (2018: £9.4m) and achieved an operating profit of £230,000 (2018: profit £280,000).  Margins increased from 23.5% to 24.3%.

 

Economic conditions in Germany, especially in the manufacturing sector, remained difficult during 2019.  This adversely impacted our German PCB operations, the largest single element of the Group, with lower revenue and profitability than in 2018.

 

UK PCB operations achieved a modest improvement in the year despite the continuing challenging market. 

 

LCS revenues overall amounted to £3.5m (2018: £3.1m) with gross margins increasing from 34.1% to 36.7% and a profit of £69,000 was achieved (2018: loss of £13,000). In the second half the sales and technical team was considerably strengthened, and further LCS investments are planned for 2020.

 

HMRC has now agreed the 2005 Cross-Border Corporation Tax claim reported previously.  As a result, the related £29,000 tax and £14,000 interest liabilities recognised at last year end were reversed during the year.

 

On behalf of the Board I would like to record our thanks to our staff for their hard work during 2019 which resulted in a profitable year for the Group. Given the improved earnings, the Board recommends an increased final dividend of 0.75p in respect of the 2019 year.

 

The outlook for 2020 is in many ways the same as 2019.  Our LCS divisions are well placed to deliver further improvements, whilst improvement in results from the German PCB operations is heavily dependent on recovery in the German automotive sector and wider economy.

 

 

 

 

R W Weinreich 

Executive Chairman

13 March 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group income statement for the year ended 30 November 2019

 

Note
2019
2018
£'000
£'000
Revenue
12,162
12,486
Cost of sales
(8,770)
(9,220)
Gross profit
3,392
3,266
Distribution costs
(419)
(422)
Administrative expenses
(2,890)
(2,696)
Other operating (expenses)/ income
61
36
Operating profit
144
184
Finance income
6
-
Finance expenses
-
(7)
Profit before taxation
150
177
Tax credit/ (expense)
2
31
(8)
Profit after taxation attributable to equity shareholders
181
169
Basic earnings per share
4
4.31p
4.06p
Diluted earnings per share
4
4.30p
4.03p

 

 

 

Group statement of comprehensive income for the year ended 30 November 2019

 

2019
£'000
2018
£'000
Profit for the year
181
169
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
(94)
15
Total comprehensive income for the year
87
184

 

Statement of changes in equity for the year ended 30 November 2019

 

 

Group
Share capital
Share premium
Capital redemption reserve
Translation reserve
Retained earnings
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
Balance at 1 December 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
Exchange differences on translating foreign operations
-
-
-
15
-
15
Total comprehensive income for the year
-
-
-
15
169
184
Balance at 30 November 2018
416
1,590
1
222
1,870
4,099
Dividends
-
-
-
-
(32)
(32)
Shares issued
6
-
-
-
-
6
Share based payments
-
-
-
-
4
4
Transactions with owners
6
-
-
-
(28)
(22)
Profit for the year
-
-
-
-
181
181
Exchange differences on translating foreign operations
-
-
-
(94)
-
(94)
Total comprehensive income for the year
-
-
-
(94)
181
87
Balance at 30 November 2019
422
1,590
1
128
2,023
4,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group balance sheet at 30 November 2019

 

2019
2018
£'000
£'000
Assets
Non-current assets
Intangible fixed assets
394
416
Property, plant and equipment
237
259
Deferred tax assets
12
10
643
685
Current assets
Inventories
2,530
2,849
Trade and other receivables
1,758
1,791
Cash and cash equivalents
734
403
5,022
5,043
Liabilities
Current liabilities
Trade and other payables
(1,280)
(1,373)
Current tax liabilities
-
(43)
(1,280)
(1,416)
Net current assets
3,742
3,627
Non-current liabilities
Retirement benefit liability
(212)
(204)
Deferred tax liabilities
(9)
(9)
(221)
(213)
4,164
4,099
Shareholders' equity
Share capital
422
416
Share premium account
1,590
1,590
Capital redemption reserve
1
1
Retained earnings
2,023
1,870
Cumulative translation adjustment reserve
128
222
4,164
4,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of cash flows for the year ended 30 November 2019

 

2019
2018
£'000
£'000
Cash flows from operating activities
Profit before tax from continuing operations
150
177
Share-based payment charge
4
4
Depreciation
74
71
Decrease/ (Increase) in inventories
237
(427)
(Increase) in trade and other receivables
(140)
(407)
Increase in trade and other payables
Interest (Income)/ Expense
92
(6)
571
8
Cash used in operations
411
(3)
Interest paid
Corporation tax paid
(8)
-
(8)
(88)
Net cash (used in)/ generated from operations
403
(99)
Cash flows from investing activities
Purchase of property, plant and equipment
(42)
(58)
Proceeds from sale of property, plant and equipment
1
-
Net cash (used in)/generated from investing activities
(41)
(58)
Cash flows from financing activities
Sale of shares
6
-
Equity dividends paid
(32)
(21)
Net cash used in financing activities
(26)
(21)
Net change in cash and cash equivalents
335
(178)
Cash and cash equivalents at start of period
403
579
Effect of foreign exchange rates
(4)
2
Cash and cash equivalents at end of period
734
403


 

 

 

 

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

2019
£'000
2018
£'000
Analysis of the charge in the period
Current tax
- Current period
-
-
- Credit adjustment in respect of prior periods
(29)
-
(29)
-
Deferred tax
(2)
8
Total tax
(31)
8
Tax reconciliation
The tax for the period is lower (2018: lower) than the standard rate of corporation tax in the UK, effectively 19.0% (2018: 19.0%) for the company's financial year. The differences are explained below:

 

2019
£'000
2018
£'000
Profit before taxation
150
177
Profit before taxation multiplied by the rate of corporation tax in the UK of 19.0% (2018: 19.0%)
29
34
Effects of:
Accelerated capital allowances
-
2
Adjustment from prior years
(29)
-
Taxation losses
(31)
(28)
Taxation
(31)
8

 

3.    Dividends

The directors have proposed a final dividend of 0.75p per share payable on 19 May 2020 to shareholders on the register at close of business on 1 May 2020.  The total dividend for the year, including the interim dividend of 0.25p (2018: 0.25p) per share paid on 8 October 2019, amounts to £42,000 (2018: £32,000), which is equivalent to 1.00p (2018: 0.75p) per share. 

 

4.    The basic earnings per share are based on the profit for the financial year of £181,000 (2018: profit of £169,000) and on ordinary shares of 4,199,735 (2018: 4,159,551 shares), the weighted average number of shares in issue during the year.  Diluted earnings per share is based on 4,207,199 ordinary shares (2018: 4,190,594 shares), being the weighted average number of ordinary shares after an adjustment of 7,464 (2018: 31,043) in relation to share options.

 

5.    This statement, which has been approved by the Board on 13 March 2020, is not the Company's statutory accounts.  The statutory accounts for each of the two years to 30 November 2018 and 30 November 2019 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 2018 accounts have been filed with the registrar of Companies, but the 2019 statutory accounts are not yet filed.

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