REG - Holders Technology - Half-year Report
Holders Technology plc
Half Yearly Report 2019
Specialised PCB Materials, Lighting and Control Solutions
Highlights
Holders Technology plc supplies specialty laminates and materials for printed circuit board manufacturers ("PCB") and operates as a lighting and control solutions ("LCS") provider to the lighting market and commercial buildings sector.
Unaudited results for the half year ended 31 May are summarised as follows:
2019
2018
£'000
£'000
Revenue
PCB
4,291
4,756
LCS
1,737
1,426
Total
6,028
6,182
Gross profit
1,579
1,585
Margins
26.2%
25.6%
Overheads
1,570
1,520
Operating profit
9
65
Finance income
11
-
Profit before tax
20
65
Taxation
29
-
Profit after tax
49
65
Earnings per share
1.17p
1.56p
Interim dividend per share
0.25p
0.25p
Net assets per share
100p
96p
Contents
1. Chairman's statement
3. Consolidated income statement
3. Consolidated statement of comprehensive income
4. Consolidated statement of changes in equity
5. Consolidated balance sheet
6. Consolidated cash flow statement
7. Notes
Chairman's statement
Half year ended 31 May 2019
These interim results show a mixed outcome as compared to the equivalent period in 2018. PCB revenues have been adversely impacted by the overall economic environment, and the challenges faced by the automotive industry in Germany. In contrast, revenues from the LCS divisions have grown strongly.
Group revenue decreased by 2.5% to £6.0m (H1 2018: £6.2m), gross margins increased by 0.6% to 26.2%, and the pre-tax result was a profit of £20,000 (H1 2018: profit of £65,000).
PCB
PCB sales in the period decreased by 9.8%, from £4,756,000 in 2018 to £4,291,000, while PCB gross margins decreased by 0.7% to 22.5%. At the end of the period the upgraded aluminium cutting and punching line in Germany was brought into full operation. The improved cutting line is expected to provide higher throughput and result in efficiency gains in future periods.
PCB overheads as a percentage of sales increased by 1.7% to 18.1%. Overall our PCB activities recorded a pre-tax profit of £30,000 (H1 2018: profit £159,000).
LCS
Lighting and Control Solutions divisions in the UK and Germany made good progress during the period. Revenue grew by 21.8% from £1,426,000 to £1,737,000, and gross margins improved from 33.7% to 35.2%. Overheads as a percentage of revenue decreased from 33.2% to 31.1%, leading to a profit of £31,000 (H1 2018: loss £38,000).
Taxation
HMRC have now accepted our final claim for EU Cross Border tax which was shown as a liability of £43,000 at the end of November 2018. The liability has been removed from the accounts during the period which resulted in a credit of £14,000 to interest paid and a credit of £29,000 to taxation.
Board Changes
On 7 May Thomas Bray stepped down from the Board, and I would like to thank him for his contribution to the Group over the last six years. Thomas' role will be partly filled by Mat Hanson who joined us in February and is now UK Sales Director for our Lighting and Control Solutions division. We plan to add further technical and sales capacity to LCS divisions in the UK and Germany over the next few months to support growing customer demand and our expanding portfolio of products and services.
Summary
Our PCB business continues to face challenges due to unfavourable market conditions. However, PCB operations remain profitable, and management has recently implemented targeted cost savings to further improve profitability. The LCS divisions have achieved good growth and a modest profit in the first half, and the pipeline of sales opportunities is encouraging, with the acceptance in the market of wireless lighting controls.
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/ Jamie Spotswood, Corporate Finance 020 3470 0470
Website
Consolidated income statement
for the half year ended 31 May 2019 (Unaudited)
Half year
ended 31
May 2019
Half year
ended 31
May 2018
Full year
ended 30
Nov 2018
Notes
£'000
£'000
£'000
Revenue
3
6,028
6,182
12,486
Cost of sales
(4,449)
(4,597)
(9,220)
Gross profit
1,579
1,585
3,266
Distribution costs
(199)
(210)
(422)
Administrative expenses
(1,369)
(1,300)
(2,696)
Other operating (expenses)/ income
(2)
-
36
Operating profit
9
65
184
Finance income/ (costs)
11
-
(7)
Profit before taxation
20
65
177
Taxation
4
29
-
(8)
Profit for the period
49
65
169
Total and continuing
Basic earnings per share
6
1.17p
1.56p
4.06p
Diluted earnings per share
6
1.17p
1.46p
4.03p
Consolidated statement of comprehensive income
for the half year ended 31 May 2019 (Unaudited)
Half year
ended 31
May 2019
Half year
ended 31
May 2018
Full year
ended 30
Nov 2018
£'000
£'000
£'000
Profit/ (loss) for the period
49
(65)
169
Exchange differences on translation of foreign operations
6
(12)
15
Total comprehensive income/ (expense) for the period
55
53
184
Consolidated statement of changes in equity
for the half year ended 31 May 2019 (Unaudited)
Share capital
Share
premium
Capital
redemption reserveTranslation reserve
Retained earnings
Total equity
£'000
£'000
£'000
£'000
£'000
£'000
Balance 1 Dec 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
Other comprehensive income for the year
-
-
-
15
-
15
Total comprehensive income for the year
-
-
-
15
169
184
Balance 30 Nov 2018
416
1,590
1
222
1,870
4,099
Dividends
-
-
-
-
(21)
(21)
New shares issued
6
-
-
-
-
6
Transactions with owners
6
-
-
-
(21)
(15)
Profit for the period
-
-
-
-
49
49
Other comprehensive expense for the period
-
-
-
6
-
6
Total comprehensive income for the period
-
-
-
6
49
55
Balance 31 May 2019
422
1,590
1
228
1,898
4,139
Consolidated balance sheet
at 31 May 2019 (Unaudited)
Half year
ended 31
May 2019
Half year
ended 31
May 2018
Full year
ended 30
Nov 2018
£'000
£'000
£'000
Assets
Non-current assets
Goodwill
318
318
318
Property, plant and equipment
338
374
357
Deferred tax assets
9
9
10
665
701
685
Current assets
Inventories
2,459
2,304
2,849
Trade and other receivables
1,542
1,986
1,791
Cash and cash equivalents
674
633
403
4,675
4,923
5,043
Liabilities
Current liabilities
Trade and other payables
(988)
(1,328)
(1,373)
Current tax liabilities
-
(94)
(43)
(988)
(1,422)
(1,416)
Net current assets
3,687
3,501
3,627
Non-current liabilities
Retirement benefit liability
(207)
(227)
(204)
Deferred tax liabilities
(6)
-
(9)
(213)
(227)
(213)
Net assets
4,139
3,975
4,099
Shareholders' equity
Share capital
422
416
416
Share premium account
1,590
1,590
1,590
Capital redemption reserve
1
1
1
Retained earnings
1,898
1,773
1,870
Cumulative translation adjustment
228
195
222
Equity attributable to the shareholders of the parent
4,139
3,975
4,099
Consolidated cash flow statement
for the half year ended 31 May 2019 (Unaudited)
Half year
ended 31
May 2019
Half year
ended 31
May 2018
Full year
ended 30
Nov 2018
£'000
£'000
£'000
Cash flows from operating activities
Profit before tax from continuing operations
20
65
177
Share-based payment charge
-
-
4
Depreciation
76
43
71
Decrease/ (increase) in inventories
375
104
(427)
Decrease/ (increase) in trade and other receivables
104
286
(407)
(Decrease)/ increase in trade and other payables
(221)
(338)
571
Interest (credit)/ expense
(14)
-
8
Cash generated from/ (used in) operations
340
160
(3)
Interest paid
-
-
(8)
Corporation tax paid
-
(36)
(88)
Net cash generated from/ (used in) operations
340
124
(99)
Cash flows from investing activities
Purchase of property, plant and equipment
(57)
(49)
(58)
Net cash used in investing activities
(57)
(49)
(58)
Cash flows from financing activities
Equity dividends paid
(21)
(10)
(21)
Ordinary shares issued
6
-
-
Net cash used in financing activities
(15)
(10)
(21)
Net change in cash and cash equivalents
268
65
(178)
Cash and cash equivalents at start of period
403
579
579
Effect of foreign exchange rates
3
(11)
2
Cash and cash equivalents at end of period
674
633
403
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 2018.
The condensed consolidated 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 2018 and 31 May 2019.
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 2018 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 22 August 2019.
3. Segmental information
Management currently identifies two operating segments:
- PCB, which distributes materials, equipment and supplies to the PCB industry.
- LCS, which provides lighting and control solutions to the lighting market and commercial buildings sector.
Notes (continued):
3. Segmental information (continued)
Analysis by operating segment
for the half year ended 31 May
PCB
LCS
Central Costs
Total
2019
2018
2019
2018
2019
2018
2019
2018
£'000
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Revenue
4,291
4,756
1,737
1,426
-
-
6,028
6,182
Cost of sales
3,324
3,651
1,125
946
-
-
4,449
4,597
Gross Profit
967
1,105
612
480
-
-
1,579
1,585
Distribution costs
159
165
40
45
-
-
199
210
Administration costs
778
781
541
473
52
56
1,371
1,310
Segment Profit/ (Loss)
30
159
31
(38)
(52)
(56)
9
65
4. The tax provision for the six months ended 31 May 2019 is calculated based on the tax rates applicable in the country in which each company operates.
5. A final dividend of 0.50p per share on the total issued share capital of 4,224,164 10p ordinary shares was paid on 21 May 2019 in respect of the year ended 30 November 2018.
An interim dividend payment of 0.25p per share (2018: 0.25p per share) will be payable on 8 October 2019 to shareholders on the register at 13 September 2019. The shares will go ex-dividend on 12 September 2019. The interim dividend had not been approved by the board at 31 May 2019 and accordingly, has not been included as a liability as at that date.
6. The basic earnings per share for continuing operations are based on the profit for the period of £49,000 (2018: profit £65,000) and on 4,172,759 ordinary shares (2018: 4,159,551), the weighted average number of shares in issue during the period. Diluted earnings per share for continuing operations are based on 4,194,313 ordinary shares (2018: 4,159,551), being the weighted average number of ordinary shares after an adjustment of 21,554 shares (2018: nil shares) in relation to share options.
7. A copy of this half yearly report is being 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.holdersgroup.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.ENDIR LLFIRTFIFFIA
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