REG - Holders Technology - Half-year Report
26/08/2022 07:00
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RNS Number : 2808X Holders Technology PLC 26 August 2022
Holders Technology plc
("Holders Technology", the "Company" or the "Group")
Half Year Report
Holders Technology, (AIM: HDT), is pleased to announce its unaudited half year
results for the six months ended 31 May 2022.
Highlights
Holders Technology operates as a lighting and wireless control solutions
("LCS") provider and supplies specialty laminates and materials for printed
circuit board ("PCB") manufacturers.
Unaudited results for the half year ended 31 May 2022 are summarised as
follows:
2022 2021
£'000 £'000
Revenue LCS 2,227 1,991
PCB 1,227 3,798
Total 3,454 5,789
Gross profit 1,207 1,718
Margins 34.9% 29.7%
Overheads 1,450 1,616
Operating (loss)/ profit (243) 102
Finance expense (1) (10)
Income from joint ventures 18 12
(Loss)/ profit before tax (226) 104
Taxation - -
(Loss)/ profit after tax (226) 104
(Loss)/ earnings per share (5.35p) 2.46p
Interim dividend per share 0.50p 0.50p
Net assets per share 99p 95p
Chairman's statement
Half year ended 31 May 2022
The Group has undergone a transformation during the last two financial
years. In 2021, the Group disposed of its lower growth, lower margin PCB
consumable activities. During 2022 the Group has refocused on its continuing
specialist PCB businesses and invested further in the LCS divisions. Details
of this are set out below.
Revenue for the 6 months to 31 May 2022 was £3,454,000. Revenue for the 6
months to 31 May 2021 ("H1 2021") from the continuing business (i.e. excluding
discontinued PCB revenues) was £3,373,000, and therefore growth from the
continuing revenues was 3.3%. This figure however does not include the Group
share of joint venture revenues of £193,000 (2021: 48,000); if this is
included then Group revenue growth was 7.5%.
Gross margins increased from 29.7% to 34.9%, and the pre-tax Group result was
a loss of £226,000 (H1 2021: profit of £104,000).
LCS
UK revenue growth was strong however market demand in Germany was weakened by
project delays and cancellations. LCS revenue increased by 11.9% overall to
£2,227,000 (2021: £1,991,000) and by 18.7%, when including the Group share
of the joint venture revenue. We have continued to invest across the Group
in staff, technology and product development. These costs have initially
contributed to a margin decrease from 37.7% to 34.3%, which we are seeking to
improve. The overall result for the LCS divisions was an operating loss of
£216,000 (H1 2021: profit of £53,000).
In addition to the above, the four LCS joint ventures, Holders Technology
Austria, Holders Technology Data Analytics, Holders Technology New Zealand and
Holders Technology Australia made further progress during the period and
overall were profitable.
PCB
Results from the restructured PCB divisions were broadly in line with
expectations, in spite of difficult market conditions. Revenues from the
continuing product ranges decreased by 11.2% from £1,382,000 to £1,227,000,
partly because shorter supplier lead times enabled customers to hold less
stock. Gross margins improved from 25.5% to 36.1%, due to the product mix of
the retained PCB business and the overall result was an operating profit of
£83,000 (H1 2021: £134,000 profit).
Cash and Debt
Group cash at the period end was £2,490,000 (31 May 2021: £1,277,000).
Other than lease liabilities, the Company has no debt.
Outlook
The second half of the financial year has started well, with improving revenue
and profitability. We will continue with our strategy to invest in sales and
technical resources, new products and technology to enable the Group to be a
leader in our markets. Whilst we are cautious regarding the global economic
outlook, we remain confident that future performance will demonstrate the
validity of this approach.
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 (http://www.holdersgroup.com)
Consolidated income statement
for the half year ended 31 May 2022 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2022 May 2021 Nov 2021
Notes £'000 £'000 £'000
Revenue 3 3,454 5,789 12,386
Cost of sales ( ) (2,247) (4,071) (8,516)
Gross profit ( ) 1,207 1,718 3,870
Distribution costs ( ) (88) (213) (408)
Administrative expenses ( ) (1,359) (1,399) (3,001)
Impairment of goodwill ( ) - - (146)
Other operating expenses ( ) (3) (4) 8
Operating (loss)/ profit ( ) (243) 102 323
Income from joint ventures ( ) 18 12 3
Profit on disposal of assets ( ) - - 471
Finance costs ( ) (1) (10) (10)
(Loss)/ profit before taxation (226) 104 787
Taxation 4 - - (92)
(Loss)/ profit for the period ( ) (226) 104 695
( )
Total and continuing
Basic (loss)/ earnings per share 6 (5.35p) 2.46p 16.45p
Diluted (loss)/ earnings per share 6 (5.35p) 2.46p 16.45p
Consolidated statement of comprehensive income
for the half year ended 31 May 2022 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2022 May 2021 Nov 2021
£'000 £'000 £'000
Profit/ (loss) for the period (226) 104 695
Exchange differences on translation of foreign operations ( )
7 (89) (134)
Total comprehensive income for the period ( )
(219) 15 561
( )
Consolidated statement of changes in equity
for the half year ended 31 May 2022 (Unaudited)
Share capital Share Capital Translation reserve Retained earnings Total equity
redemption reserve
premium
£'000 £'000 £'000 £'000 £'000 £'000
Balance 1 Dec 2020 422 1,590 1 248 1,738 3,999
- - - - (32) (32)
Dividends
Transactions with owners - - - - (32) (32)
Profit for the year - - - - 695 695
Exchange differences on translating foreign operations - - - (134) - (134)
Total comprehensive income for the year - - - (134) 695 561
Balance 30 Nov 2021 422 1,590 1 114 2,401 4,528
Dividends - - - - (106) (106)
- - - - (106) (106)
Loss for the period - - - - (226) (226)
Exchange differences on translating foreign operations - - - 7 - 7
Total comprehensive income for the period - - - 7 (226) (219)
Balance 31 May 2022 422 1,590 1 121 2,069 4,203
Consolidated balance sheet
at 31 May 2022 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2022 May 2021 Nov 2021
Notes £'000 £'000 £'000
Assets
Non-current assets
Intangible fixed assets 172 378 220
Property, plant and equipment 186 1,127 82
Leased assets 87
Investment in joint ventures 130 40 111
Deferred tax assets 12 12 12
500 1,557 512
Current assets
Inventories 1,623 1,953 1,180
Trade and other receivables 1,173 1,642 1,593
Cash and cash equivalents 2,490 1,277 3,192
5,286 4,872 5,695
Liabilities
Current liabilities
Trade and other payables (1,389) (1,270) (1,661)
Lease liabilities 3 - (930) (58)
Current tax liabilities - - -
(1,389) (2,200) (1,719)
Net current assets 3,897 2,672 4,246
Non-current liabilities
Retirement benefit liability (185) (216) (186)
Lease liabilities - - (35)
Deferred tax liabilities (9) (9) (9)
(194) (225) (230)
Net assets 4,203 4,004 4,528
Shareholders' equity
Share capital 422 422 422
Share premium account 1,590 1,590 1,590
Capital redemption reserve 1 1 1
Retained earnings 2,069 1,829 2,401
Cumulative translation adjustment 121 162 114
Equity attributable to the shareholders of the parent
4,203 4,004 4,528
Consolidated cash flow statement
for the half year ended 31 May 2022 (Unaudited)
Half year Half year Full year
ended 31 ended 31 ended 30
May 2022 May 2021 Nov 2021
£'000 £'000 £'000
Cash flows from operating activities
(Loss)/ profit before tax (244) 104 787
Depreciation 43 131 168
Gain on disposal of property, plant and equipment - - (471)
Impairment - Goodwill - - 146
(Increase)/ decrease in inventories (442) 323 1,093
(Increase)/ decrease in trade and other receivables (83) (579) (527)
Increase/ (decrease) in trade and other payables 233 350 702
Interest expense 1 10 10
Cash generated from operations (492) 339 1,908
Income from investments (18) (12) (3)
Tax paid - - (92)
Interest paid (1) (10) (10)
Net cash generated from operations (511) 317 1,803
Cash flows from investing activities
Purchase of property, plant, and equipment (69) (30) (65)
Investment in joint venture 18 - (80)
Proceeds from sale of property, plant and equipment
- - 553
Net cash used in investing activities (51) (30) 408
Cash flows from financing activities
Equity dividends paid (106) - (32)
Lease repayments (26) (95) (37)
Net cash used in financing activities (132) (95) (69)
Net change in cash and cash equivalents (694) 192 2,142
Cash and cash equivalents at start of period 3,192 1,113 1,113
Effect of foreign exchange rates (8) (28) (63)
Cash and cash equivalents at end of period 2,490 1,277 3,192
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 2021.
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 2021 and 31 May 2022.
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 2021 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 25 August 2022.
Notes (continued):
3. Segmental information
Management currently identifies two operating segments:
1. LCS provides lighting and control solutions.
2. PCB distributes materials, equipment, and supplies to the PCB
industry.
Analysis by operating segment for the half year ended 31
May
LCS PCB Central Costs Total
2022 2021 2022 2021 2022 2021 2022 2021
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Revenue 2,227 1,991 1,227 3,798 - - 3,454 5,789
Cost of sales 1,463 1,241 784 2,830 - - 2,247 4,071
Gross Profit 764 750 443 968 - - 1,207 1,718
Distribution costs 65 54 23 159 - - 88 213
Administration costs and other operating expenses 915 643 338 675 109 85 1,253 1,403
Operating Profit/ (Loss) (216) 53 82 134 (109) (85) (243) 102
4. The tax provision for the six months ended 31 May 2022 is
calculated based on the tax rates applicable in the country in which each
company operates.
5. A special dividend of 2.00p per share on the total issued share
capital of 4,224,164 10p ordinary shares was approved by the board on 21
December 2021 and paid on 28 January 2022.
A final dividend of 0.50p (2021: 0.25p per share) per share on the total
issued share capital of 4,224,164 10p ordinary shares was approved by the
board on 28 January 2022, and paid on 31 May 2022, in respect of the year
ended 30 November 2021.
An interim dividend payment of 0.50p per share (2021: 0.25p per share) will be
payable on 4 October 2022 to shareholders on the register on 9 September
2022. The shares will go ex-dividend on 8 September 2022. The interim
dividend had not been approved by the board on 31 May 2022 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 loss for the period of £226,000 (2021: profit £104,000) and on
4,224,164 ordinary shares (2021: 4,224,164), the weighted average number of
shares in issue during the period. There were no share options in issue in
2021 or 2022 and therefore diluted earnings per share and basic earnings per
share are the same value for each year.
7. 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
(http://www.holderstechnology.com) .
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