RNS Number : 9453J
Holders Technology PLC
27 August 2021
Holders Technology plc
("Holders Technology" or the "Company")
Half Year Report
Holders Technology, (AIM: HDT), is pleased to announce its unaudited half year results for the six months ended 31 May 2021.
Highlights
Holders Technology supplies specialty laminates and materials for printed circuit board manufacturers ("PCB") and operates as a lighting and control solutions ("LCS") provider.
Unaudited results for the half year ended 31 May 2021 are summarised as follows:
2021
2020
£'000
£'000
Revenue
PCB
3,798
4,157
LCS
1,991
1,170
Total
5,789
5,327
Gross profit
1,718
1,398
Margins
29.7%
26.2%
Overheads
1,616
1,482
Operating profit
102
(84)
Finance expense
(10)
(6)
Income from joint ventures
12
-
Profit before tax
104
(90)
Taxation
-
-
Profit after tax
104
(90)
Earnings per share
2.46p
(2.13p)
Interim dividend per share
0.50p
0.25p
Net assets per share
95p
99p
Chairman's statement
Half year ended 31 May 2021
Following a very challenging time in the last financial year, I am pleased to report that revenue has increased in the half year to 31 May 2021, and that the Group has returned to profitability. The improving economic environment has affected both business segments in different ways. Details of this are set out below.
Group revenue increased by 8.7% to £5.8m (H1 2020: £5.3m), gross margins increased from 26.2% to 29.7%, and pre-tax profit was £104,000 (H1 2020: loss of £90,000).
PCB
As the global economy returned to growth, the PCB industry experienced significant instability, with widespread raw material shortages and marked cost increases both for goods and freight. PCB sales in the period decreased by 8.6% compared to the same period in 2020, from £4,157,000 to £3,798,000. PCB gross margins, however, increased by 2.2% to 25.5%. Administration expenses were similar to the previous year in value terms, although as a percentage of sales they increased from 16.4% to 17.8%. Overall, PCB activities recorded a pre-tax profit of £134,000 (H1 2020: profit of £124,000).
On 24 August 2021 we announced that our UK and Germany operating subsidiaries had conditionally agreed to sell certain PCB assets to the Ventec International Group for a cash consideration of c. £1,600,000. The sale proceeds will be used for investment in the continuing PCB and LCS segments and for general working capital purposes.
LCS
The LCS divisions recovered strongly in 2021 as the economy improved and building projects resumed: revenue increased by 70.2% overall to £1,991,000 (2020: £1,170,000). Margins improved from 36.8% to 37.7%, and overheads as a percentage of sales fell from 49.7% to 32.3%. The overall result for the LCS divisions was a profit of £53,000 (H1 2020: loss of £174,000).
The two LCS joint ventures, Holders Technology Austria, and Holders Technology Data Analytics, made further progress during the period and together contributed £12,000 profit (H1 2020: nil profit because both joint ventures commenced trading in H2 2020).
Cash and Debt
Group cash at the period end was £1,277,000 (H1 2020: £723,000). Other than lease liabilities, the company has no debt.
Outlook
The outlook for the second half of the year is encouraging, although there is still a level of uncertainty regarding global supply chains. Holders continues to expand its product and services portfolio, as well as investing in people and additional technology to support this expansion. The company also seeks additional complementary revenue streams when opportunities arise. Its ability to do this will be enhanced by the asset disposal outlined above.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.
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/ Caroline Rowe, Corporate Finance 020 3470 0470
Website
www.holdersgroup.com
Consolidated income statement
for the half year ended 31 May 2021 (Unaudited)
Half year ended 31 May 2021
Half year ended 31 May 2020
Full year ended 30 Nov 2020
Notes
£'000
£'000
£'000
Revenue
4
5,789
5,327
9,838
Cost of sales
(4,071)
(3,929)
(7,135)
Gross profit
1,718
1,398
2,703
Distribution costs
(213)
(186)
(348)
Administrative expenses
(1,399)
(1,294)
(2,562)
Other operating expenses
(4)
(2)
(42)
Operating profit/ (loss)
102
(84)
(249)
Income from joint ventures
12
-
1
Finance costs
(10)
(6)
(16)
Profit/ (loss) before taxation
104
(90)
(264)
Taxation
5
-
-
-
Profit/ (loss) for the period
104
(90)
(264)
Total and continuing
Basic earnings per share
7
2.46p
(2.13p)
(6.25p)
Diluted earnings per share
7
2.46p
(2.13p)
(6.25p)
Consolidated statement of comprehensive income
for the half year ended 31 May 2021 (Unaudited)
Half year ended 31 May 2021
Half year ended 31 May 2020
Full year ended 30 Nov 2020
£'000
£'000
£'000
Profit/ (loss) for the period
104
(90)
(264)
Reserves adjustment for IFRS 16
-
(10)
-
Exchange differences on translation of foreign operations
(89)
133
120
Total comprehensive income for the period
15
33
(144)
Consolidated statement of changes in equity
for the half year ended 31 May 2021 (Unaudited)
Share capital
Share premium
Capital redemption reserve
Translation reserve
Retained earnings
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
Balance 1 Dec 2019
422
1,590
1
128
2,023
4,164
Dividends
-
-
-
-
(21)
(21)
Transactions with owners
-
-
-
-
(21)
(21)
Loss for the year
-
-
-
-
(264)
(264)
Exchange differences on translating foreign operations
-
-
-
(120)
-
120
Total comprehensive income for the year
-
-
-
120
(264)
(144)
Balance 30 Nov 2020
422
1,590
1
248
1,738
3,999
Dividends
-
-
-
-
(10)
(10)
-
-
-
-
(10)
(10)
Profit for the period
-
-
-
-
104
104
Exchange differences on translating foreign operations
-
-
-
(89)
-
(89)
Total comprehensive income for the period
-
-
-
(89)
104
15
Balance 31 May 2021
422
1,590
1
125
1,832
4,004
Consolidated balance sheet
at 31 May 2021 (Unaudited)
Half year ended 31 May 2021
Half year ended 31 May 2020
Full year ended 30 Nov 2020
Notes
£'000
£'000
£'000
Assets
Non-current assets
Intangible fixed assets
378
388
381
Property, plant and equipment
3
1,127
654
560
Investment in joint venture
40
15
28
Deferred tax assets
12
12
12
1,557
1,069
981
Current assets
Inventories
1,953
2,358
2,340
Trade and other receivables
1,642
1,461
1,420
Cash and cash equivalents
1,277
723
1,113
4,872
4,542
4,873
Liabilities
Current liabilities
Trade and other payables
(1,270)
(765)
(1,274)
Lease liabilities
3
(930)
(419)
(105)
Current tax liabilities
-
-
-
(2,200)
(1,184)
(1,379)
Net current assets
2,672
3,358
3,494
Non-current liabilities
Retirement benefit liability
(216)
(221)
(223)
Lease liabilities
-
-
(244)
Deferred tax liabilities
(9)
(9)
(9)
(225)
(230)
(476)
Net assets
4,004
4,197
3,999
Shareholders' equity
Share capital
422
422
422
Share premium account
1,590
1,590
1,590
Capital redemption reserve
1
1
1
Retained earnings
1,829
1,923
1,738
Cumulative translation adjustment
162
261
248
Equity attributable to the shareholders of the parent
4,004
4,197
3,999
Consolidated cash flow statement
for the half year ended 31 May 2021 (Unaudited)
Half year ended 31 May 2021
Half year ended 31 May 2020
Full year ended 30 Nov 2020
£'000
£'000
£'000
Cash flows from operating activities
Profit/ (loss) before tax
104
(90)
(264)
Depreciation
131
150
292
Decrease in inventories
323
261
284
(Increase)/ decrease in trade and other receivables
(579)
(75)
385
Increase/ (decrease) in trade and other payables
350
(139)
(50)
Interest expense
10
6
16
Cash generated from operations
339
123
663
Income from investments
(12)
-
(1)
Interest paid
(10)
(6)
(16)
Net cash generated from operations
317
117
646
Cash flows from investing activities
Purchase of property, plant, and equipment
(30)
(21)
(25)
Investment in joint venture
-
(15)
(27)
Net cash used in investing activities
(30)
(36)
(52)
Cash flows from financing activities
Equity dividends paid
-
-
(21)
Lease repayments
(95)
(116)
(213)
Net cash used in financing activities
(95)
(116)
(234)
Net change in cash and cash equivalents
192
(35)
360
Cash and cash equivalents at start of period
1,113
734
734
Effect of foreign exchange rates
(28)
24
19
Cash and cash equivalents at end of period
1,277
723
1,113
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 2020.
The 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 2020 and 31 May 2021.
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 2020 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 26 August 2021.
3. IFRS 16 Leases
On 1 January 2021 the lease on the premises at Kirchheimbolanden, Germany was renewed for a 5-year term. As required under IFRS 16, the lease has been shown as a right-of-use asset and lease liability on the balance sheet, both at an initial value of £676,000.
4. Segmental information
Management currently identifies two operating segments:
1. PCB distributes materials, equipment, and supplies to the PCB industry.
2. LCS provides lighting and control solutions.
Analysis by operating segment for the half year ended 31 May
PCB
LCS
Central Costs
Total
2021
2020
2021
2020
2021
2020
2021
2020
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Revenue
3,798
4,157
1,991
1,170
-
-
5,789
5,327
Cost of sales
2,830
3,189
1,241
740
-
-
4,071
3,929
Gross Profit
968
968
750
430
-
-
1,718
1,398
Distribution costs
159
164
54
22
-
-
213
186
Administration costs and other operating expenses
675
680
643
582
85
34
1,403
1,296
Segment Profit/ (Loss)
134
124
53
(174)
(85)
(34)
102
(84)
5. The tax provision for the six months ended 31 May 2021 is calculated based on the tax rates applicable in the country in which each company operates.
6. A final dividend of 0.25p per share on the total issued share capital of 4,224,164 10p ordinary shares was approved by the board on 29 January 2021, and paid on 1 June 2021, in respect of the year ended 30 November 2020.
An interim dividend payment of 0.50p per share (2020: 0.25p per share) will be payable on 5 October 2021 to shareholders on the register at 10 September 2021. The shares will go ex-dividend on 9 September 2021. The interim dividend had not been approved by the board at 31 May 2021 and accordingly, has not been included as a liability as at that date.
7. The basic earnings per share for continuing operations are based on the profit for the period of £104,000 (2020: loss £90,000) and on 4,224,164 ordinary shares (2020: 4,224,164), the weighted average number of shares in issue during the period. There were no share options in issue in 2020 or 2021 and therefore diluted earnings per share and basic earnings per share are the same value for each year.
8. A copy of this half yearly report will be 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.holderstechnology.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.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
IR FLFERTIIRFIL
