17 Feb 2017 07:00
Holders Technology plc
Specialised PCB Materials, LED Components and Lighting Solutions
Audited results for the year ended 30 November 2016
Holders Technology plc ("Holders Technology" or "the Group") announces its audited results for the year ended 30 November 2016. Holders Technology supplies specialty laminates and materials for printed circuit board manufacture ("PCB"), and operates as an LED solutions provider to the lighting and industrial markets.
PCB and LED segments achieved modest revenue growth in the year, and margins were maintained. PCB overheads were reduced, while LED overheads increased due to additional sales recruitment. The result before restructuring and impairment costs was somewhat behind 2015.
During the year, PCB divisions were restructured and costs reduced, and the LED Opteon Germany division was closed. The restructuring costs are shown below.
The directors propose to pay a final dividend of 0.25p per share on 23 May 2017.
Highlights included:
· Results compared to 2015:
Group revenue 1.7% higher
PCB revenue 0.4% higher
LED revenue 5.3% higher
Group margins Unchanged
· Operating loss before impairment
and restructuring costs £191,000
· Operating loss £374,000
· Cash balances £781,000 (£338,000 higher than 2015)
Chairman's statement
In my statement accompanying the 2015 Annual Report and Accounts I stated that the board was evaluating various options to return Holders Technology Group ("The Group") to profitability. As a result of this review some changes to our management team were made, coupled with a significant restructuring programme and the closure of an unprofitable division. A number of sales staff have been changed and investments made to enhance our plant and machinery.
Inevitably changes of this nature impose a major short term cost but we believe they are essential to achieving our goal of restored profitability.
The overall Group result, excluding restructuring costs, was broadly similar to the preceding year with revenue increasing by 1.7% from £11.2 to £11.4m. The 2016 year did not include any revenue from our former Indian joint venture which we exited in 2015 but the impact of the stronger Euro following the EU referendum in June had a significant offsetting impact on the 2016 result.
The Group operating result before impairment and restructuring costs was a loss of £191,000 (2015: operating loss £126,000). Impairment and restructuring costs increased the operating loss to £374,000 (2015: £151,000).
The PCB divisions together had revenues of £8.3m (2015: £8.3m) and achieved an operating profit of £115,000 (2015: loss £3,000) before restructuring costs of £116,000. Including restructuring and impairment costs, the PCB divisions made an operating loss of £1,000 (2015: loss £28,000).
Our German operations remain the predominant element of the Group's PCB sales, the second half of the year saw some benefit from the restructuring programme and the operations were profitable. The UK PCB operations, as anticipated, saw a reduction in revenue but the major changes made within this entity enabled it to achieve a small positive contribution for the year.
Total LED revenues amounted to £3.0m (2015: £2.9m). Combined operating losses before restructuring costs of £67,000 totalled £275,000 (2015: loss of £26,000). The LED divisions made an operating loss after restructuring costs of £342,000 (2015: £26,000).
The various LED elements of our business had very mixed results but taken together they were behind our expectations. While the UK division, Holders Components, achieved growth in both revenue and profitability and Holders Germany maintained its position, NRGstar saw a marked decline as did Opteon Germany. Action has been taken to change the sales teams in a number of these entities and Opteon Germany has been closed.
Last year I reported that the Group faced a potential EU Cross Border Group Relief claim totalling £192,000 and that we had fully provided for this amount in that year's accounts. While some of the claim has been agreed a balance of £126,000 is still subject to further discussion.
2016 was a difficult year for the Group but our staff showed commitment and support throughout the year for which we thank them.
The Board has a continuing belief in the Group's ability to overcome the difficulties it confronts. It is heartened by the initial signs of improved PCB performance, and by the customer interest in the new "smart lighting" products added into the LED divisions. Given this belief the Board considers it appropriate to recommend a final dividend of 0.25p for the 2016 year.
R W Weinreich
Executive Chairman
16 February 2017
Group income statement for the year ended 30 November 2016
|
|
| Note | 2016 | 2015 |
|
|
|
| £'000 | £'000 |
|
|
|
|
|
|
Revenue |
|
|
| 11,380 | 11,195 |
Cost of sales |
|
|
| (8,539) | (8,396) |
Gross profit |
|
|
| 2,841 | 2,799 |
Distribution costs |
|
|
| (399) | (364) |
Administrative expenses |
|
|
| (2,749) | (2,652) |
Restructuring costs |
|
|
| (183) | - |
Impairment costs |
|
|
| - | (25) |
Other operating income |
|
|
| 116 | 91 |
Operating loss |
|
|
| (374) | (151) |
Finance income |
|
|
| 3 | 1 |
Finance expenses |
|
|
| (7) | (16) |
Loss before taxation |
|
|
| (378) | (166) |
Tax expense |
|
| 2 | (17) | (195) |
Loss for the financial year |
|
|
| (395) | (361) |
|
|
|
|
|
|
Basic loss per share | 4 | (9.72p) | (9.16p) | ||
Diluted loss per share | 4 | (9.72p) | (9.16p) | ||
Total loss per share | 4 | (9.72p) | (9.16p) | ||
Group statement of comprehensive income for the year ended 30 November 2016
|
|
| 2016 £'000 | 2015 £'000 |
Loss for the year |
|
| (395) | (361) |
Items that may be reclassified subsequently to profit or loss: |
|
|
| |
Exchange differences on translating foreign operations |
|
| 346 | (246) |
Total comprehensive income and expense for the year |
|
| (49) | (607) |
Statements of changes in equity for the year ended 30 November 2016
Group | Share capital | Share premium | Capital redemption reserve | Translation reserve | Retained earnings | Total equity |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
Balance at 30 November 2014 | 416 | 1,531 | 1 | 34 | 2,512 | 4,494 |
Dividends | - | - | - | - | (20) | (20) |
Employee share-based payment options | - | - | - | - | 3 | 3 |
Transactions with owners | - | - | - | - | (17) | (17) |
Loss for the year | - | - | - | - | (361) | (361) |
Exchange differences on translating foreign operations | - | - | - | (246) | - | (246) |
Total comprehensive income for the year | - | - | - | (246) | (361) | (607) |
Balance at 30 November 2015 | 416 | 1,531 | 1 | (212) | 2,134 | 3,870 |
Dividends | - | - | - | - | (20) | (20) |
Shares issued | - | 59 | - | - | - | 59 |
Transactions with owners | - | 59 | - | - | (20) | 39 |
Loss for the year | - | - | - | - | (395) | (395) |
Exchange differences on translating foreign operations | - | - | - | 346 | - | 346 |
Total comprehensive income for the year | - | - | - | 346 | (395) | (49) |
Balance at 30 November 2016 | 416 | 1,590 | 1 | 134 | 1,719 | 3,860 |
Company | Share capital | Share premium | Capital redemption reserve | Retained earnings | Total equity |
| £'000 | £'000 | £'000 | £'000 | £'000 |
Balance at 1 December 2014 | 416 | 1,531 | 1 | 51 | 1,999 |
Profit/ (loss) and total comprehensive income for the year | - | - | - | 138 | 138 |
Dividends | - | - | - | (20) | (20) |
Share-based payment charge | - | - | - | 3 | 3 |
Balance at 30 November 2015 | 416 | 1,531 | 1 | 172 | 2,120 |
Profit/ (loss) and total comprehensive income for the year | - | - | - | 437 | 437 |
Dividends | - | - | - | (20) | (20) |
Shares issued | - | 59 | - | - | 59 |
Share-based payment charge | - | - | - | - | - |
Balance at 30 November 2016 | 416 | 1,590 | 1 | 589 | 2,596 |
Balance sheets at 30 November 2016
|
| Group | Company | ||
|
| 2016 | 2015 | 2016 | 2015 |
|
| £'000 | £'000 | £'000 | £'000 |
Assets |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Goodwill |
| 318 | 316 | - | - |
Property, plant and equipment |
| 400 | 327 | 6 | 4 |
Investments in subsidiaries |
| - | - | 2,291 | 2,291 |
Investment in joint venture |
| - | - | - | 15 |
Deferred tax assets |
| 9 | 16 | - | - |
|
| 727 | 659 | 2,297 | 2,310 |
Current assets |
|
|
|
|
|
Inventories |
| 2,365 | 2,533 | - | - |
Trade and other receivables |
| 1,790 | 1,556 | 592 | 433 |
Current tax assets |
| - | 59 | - | - |
Cash and cash equivalents |
| 781 | 443 | 318 | 25 |
|
| 4,936 | 4,591 | 910 | 458 |
Liabilities |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
| (1,457) | (975) | (611) | (627) |
Current tax liabilities |
| (122) | (213) | - | (21) |
|
| (1,579) | (1,188) | (611) | (648) |
Net current assets |
| 3,357 | 3,403 | 299 | (190) |
Non-current liabilities |
|
|
|
|
|
Retirement benefit liability |
| (219) | (181) | - | - |
Deferred tax liabilities |
| (122) | (11) | - | - |
|
| (224) | (192) | - | - |
|
| 3,860 | 3,870 | 2,596 | 2,120 |
Shareholders' equity |
|
|
|
|
|
Share capital |
| 416 | 416 | 416 | 416 |
Share premium account |
| 1,590 | 1,531 | 1,590 | 1,531 |
Capital redemption reserve |
| 1 | 1 | 1 | 1 |
Retained earnings |
| 2,719 | 2,134 | 589 | 172 |
Cumulative translation adjustment reserve |
| 134 | (212) | - | - |
| 3,860 | 3,870 | 2,596 | 2,120 | |
Statements of cash flows for the year ended 30 November 2016
|
| Group | Company | ||
|
| 2016 | 2015 | 2016 | 2015 |
|
| £'000 | £'000 | £'000 | £'000 |
Cash flows from operating activities |
|
|
|
|
|
Operating loss |
| (374) | (151) | (24) | (92) |
Share-based payment charge |
| - | 3 | 1 | 3 |
Depreciation |
| 74 | 86 | 2 | 8 |
Decrease/(Increase) in inventories |
| 192 | (102) | - | - |
(Increase)/decrease in trade and other receivables |
| (298) | 295 | 41 | 17 |
Increase/(decrease) in trade and other payables |
| 824 | (86) | (16) | 65 |
Cash generated from operations |
| 418 | 45 | 3 | 1 |
Corporation tax paid |
| (48) | (7) | (1) | (1) |
Net cash generated from operations |
| 370 | 38 | 2 | - |
Cash flows from investing activities |
|
|
|
|
|
Purchase of property, plant and equipment |
| (110) | (161) | (4) | (4) |
Proceeds from sale of property, plant and equipment | - | 3 | 3 | - | |
Proceeds from joint venture | 22 | 32 | 50 | - | |
Dividends received from Group undertakings | - | - | 200 | 13 | |
Interest received |
| 3 | 1 | 6 | 4 |
Net cash (used in)/generated from investing activities | (85) | (37) | 252 | 16 | |
Cash flows from financing activities |
|
|
|
|
|
Interest paid |
| (7) | (16) | - | - |
Proceed from sale of shares |
| 59 | - | 59 | - |
Settlement of contingent consideration |
| - | - | - | - |
Equity dividends paid |
| (20) | (20) | (20) | (20) |
Net cash generated from/ (used in) financing activities |
| 32 | (36) | 39 | (20) |
Net change in cash and cash equivalents |
|
317 |
(155) |
293 |
(20) |
Cash and cash equivalents at start of period |
| 443 | 634 | 25 | 45 |
Effect of foreign exchange rates |
| 21 | (36) | - | - |
Cash and cash equivalents at end of period |
| 781 | 443 | 318 | 25 |
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
| 2016 £'000 | 2015 £'000 |
| Analysis of the charge in the period |
|
|
Current tax |
|
|
- Current period | - | 6 |
- Adjustments in respect of prior periods | 17 | 179 |
| 17 | 185 |
Deferred tax | - | 10 |
Total tax | 17 | 195 |
|
|
|
Tax reconciliation |
|
|
|
|
|
The tax for the period is higher (2015: higher) than the standard rate of corporation tax in the UK, effectively 20.0% (2015: 20.0%) for the company's financial year. The differences are explained below: | ||
| 2016 £'000 | 2015 £'000 |
Loss before taxation | (378) | (166) |
|
|
|
Loss before taxation multiplied by the rate of corporation tax in the UK of 20.0 % (2015: 20.0%) |
(76) |
(33) |
|
|
|
Effects of: |
|
|
Differences between capital allowances and depreciation | - | 4 |
Adjustments in respect of prior years | 17 | 176 |
Taxation losses | 64 | 35 |
Other temporary differences | 12 | 13 |
Taxation | 17 | 195 |
3. The directors have proposed a final dividend of 0.25p per share payable on 23 May 2017 to shareholders on the register at close of business on 5 May 2017. The total dividend for the year, including the interim dividend of 0.25p (2015: 0.25p) per share paid on 11 October 2016, amounts to £20,000 (2015: £20,000), which is equivalent to 0.50p (2015: 0.50p) per share.
4. The basic earnings per share are based on the loss for the financial year of £395,000 (2015: loss of £361,000) and on ordinary shares 4,063,813 (2015: 3,939,551), the weighted average number of shares in issue during the year. There was no earnings dilution calculated in 2015 and 2016 as a loss was recorded by the Group.
5. This preliminary statement, which has been approved by the Board on 16 February 2016, is not the Company's statutory accounts. The statutory accounts for each of the two years to 30 November 2015 and 30 November 2016 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 2015 accounts have been filed with the Registrar of Companies but the 2016 accounts are not yet filed.
For further information, contact:
Rudi Weinreich, Executive Chairman, Holders Technology plc,
Tel. 01896 758781
Paul Geraghty, Group Finance Director, Holders Technology plc,
Tel. 01896 758781
William Vandyk, Director, Corporate Finance, Northland Capital Partners Ltd,
Tel. 020 3861 6625
Website www.holdersgroup.com
ENDS