REG - Holders Technology - Final Results

Holders TechnologyAnnouncement

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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