REG - Holders Technology - Half-year Report

Holders TechnologyAnnouncement

27/08/2021 07:00

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.
 
 
 
 

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