6 Feb 2015 07:00
Holders Technology plc
Specialised PCB Materials, LED Components and Lighting Solutions
Audited results for the year ended 30 November 2014
Holders Technology plc ("Holders Technology" or "the Group") announces its audited results for the year ended 30 November 2014. Holders Technology supplies special laminates and materials for printed circuit board manufacture ("PCB"), and operates as a LED solutions provider to the lighting and industrial markets.
The overall results for 2014 were disappointing. The three PCB divisions achieved similar revenue to 2013 but with reduced margins. The NRGstar and Opteon LED divisions both achieved improved revenue and recorded results close to breakeven, but results from Holders Components LED divisions in UK and Germany were behind expectation.
Highlights relating to continuing operations included:
· Group revenue 6% lower than 2013
· PCB revenue unchanged from 2013
· LED revenue 25% lower than 2013
· Operating loss before exceptional costs £290,000
· Cash balances £0.63 million. No debt.
Chairman's statement
The year to 30th November 2014 was particularly challenging for the company. Performance from both the PCB and LED divisions of our business was below the levels we had initially expected for the year. The Group operating result before exceptional items was a loss of £290,000 (2013: operating profit £105,000).
The PCB market in 2014 continued to be demanding however the PCB divisions remained profitable. The German division, comprising 74% of Group PCB sales, had a good first half and weaker second half. UK operations were in turn adversely impacted by slower customer demand and the loss of two customers which ceased trading. Results from our small Indian venture were satisfactory. PCB revenues were £11.0m; with margins at 23.1% (2013: 24.0%).
In October 2014 we announced the termination of a major PCB supplier agreement, effective 1st January 2015. Since the announcement the UK PCB division has been significantly restructured. This resulted in exceptional costs of £67,000 in 2014.
The LED results overall showed modest progress, despite revenue overall being lower than 2013. The NRGstar and Opteon Germany divisions both improved revenue and operating result. Holders Components Germany was adversely impacted by increased sales and marketing costs; however the order book for 2015 is encouraging. Holders Components UK revenue was lower than 2013 due to the loss of a major customer which went into administration. Sales revenue is now more evenly spread over a number of customers with good sales prospects being generated. Overall LED revenues were £2.5m (2013: £3.3m); with margins improved to 28.9% (2013: 25.4%).
Once again I would like to thank all our staff for their hard work and support throughout a demanding financial year.
Given the board's continuing belief in the Group's future we consider it appropriate to recommend a final dividend for the past year of 0.25p per share.
In the current year we expect overall PCB results in the first half to be lower than in the preceding year due to the impact of the termination of the supplier agreement referred to earlier. We anticipate an improved second half due to the contribution from alternative suppliers, with further progress being made by all the LED divisions in 2015.
R W Weinreich
Executive Chairman
5 February 2015
Consolidated income statement for the year ended 30 November 2014
Note | 2014 | 2013 | |||
£'000 | £'000 | ||||
Continuing operations | |||||
Revenue | 13,478 | 14,265 | |||
Cost of sales | (10,224) | (10,798) | |||
Gross profit | 3,254 | 3,467 | |||
Distribution costs | (414) | (381) | |||
Administrative expenses | (3,167) | (3,049) | |||
Restructuring costs | (67) | - | |||
Other operating (expenses)/ income | 37 | 68 | |||
Operating (loss)/ profit | (357) | 105 | |||
Finance income | 2 | 4 | |||
Finance expenses | (7) | (12) | |||
(Loss)/ profit before taxation | (362) | 97 | |||
Tax expense | 2 | (11) | (24) | ||
(Loss)/ profit for the year from continuing operations | (373) | 73 | |||
Loss for the year from discontinued operations | 3 | - | (269) | ||
(Loss)/ profit for the year | (373) | (196) | |||
(Loss)/ profit for the year attributable to: | |||||
Owners of the parent | (373) | (179) | |||
Non-controlling interest | - | (17) | |||
(Loss)/ profit for the financial year | (373) | (196) | |||
Basic (loss)/ earnings per share - continuing operations | 5 | (9.47p) | 1.85p | ||
Diluted (loss)/ earnings per share - continuing operations | 5 | (9.47p) | 1.78p | ||
Basic and diluted loss per share - discontinued operations | 5 | - | (6.83p) | ||
Total loss per share | 5 | (9.47p) | (4.98p) | ||
Consolidated statement of comprehensive income for the year ended 30 November 2014
2014 £'000 | 2013 £'000 | ||||
(Loss)/ profit for the year | (373) | (196) | |||
Items that will not be reclassified subsequently to profit or loss: | |||||
Change in actuarial assumption re pension liability | - | - | |||
Items that may be reclassified subsequently to profit or loss: | |||||
Exchange differences on translating foreign operations | (112) | 114 | |||
Total comprehensive income and expense for the year | (485) | (82) | |||
Total comprehensive income and expense for the year attributable to: | |||||
Owners of the parent | (485) | (70) | |||
Non-controlling interests | - | (12) | |||
(485) | (82) | ||||
Statements of changes in equity for the year ended 30 November 2014
Group | Share capital | Share premium | Capital redemption reserve | Translation reserve | Retained earnings | Total attribut-able to owners of parent | Non-controlling interest | Total equity |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 December 2012 | 416 | 1,531 | 1 | 105 | 3,139 | 5,192 | 8 | 5,200 |
Dividends | - | - | - | - | (78) | (78) | - | (78) |
Employee share-based payment options | - | - | - | - | 9 | 9 | - | 9 |
Transactions with owners | - | - | - | - | (69) | (69) | - | (69) |
Profit/(loss) for the year | - | - | - | - | (179) | (179) | (17) | (196) |
Reclassification adjustment related to terminated foreign operations | - | - | - | (45) | 45 | - | - | - |
Exchange differences on translating foreign operations | - | - | - | 109 | - | 109 | 5 | 114 |
Total comprehensive income for the year | - | - | - | 64 | (134) | (70) | (12) | (82) |
Balance at 30 November 2013 | 416 | 1,531 | 1 | 169 | 2,936 | 5,053 | (4) | 5,049 |
Dividends | - | - | - | - | (79) | (79) | - | (79) |
Employee share-based payment options | - | - | - | - | 9 | 9 | - | 9 |
Transactions with owners | - | - | - | - | (70) | (70) | - | (70) |
Profit/(loss) for the year | - | - | - | - | (373) | (373) | - | (373) |
Reclassification adjustment related to terminated foreign operations | - | - | - | (23) | 19 | (4) | 4 | - |
Exchange differences on translating foreign operations | - | - | - | (112) | - | (112) | - | (112) |
Total comprehensive income for the year | - | - | - | (135) | (354) | (489) | 4 | (485) |
Balance at 30 November 2014 | 416 | 1,531 | 1 | 34 | 2,512 | 4,494 | - | 4,494 |
Company | Share capital | Share premium | Capital redemption reserve | Retained earnings | Total equity |
£'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 December 2012 | 416 | 1,531 | 1 | 395 | 2,343 |
Profit/ (loss) and total comprehensive income for the year | - | - | - | (284) | (284) |
Dividends | - | - | - | (78) | (78) |
Share-based payment charge | - | - | - | 9 | 9 |
Balance at 30 November 2013 | 416 | 1,531 | 1 | 42 | 1,990 |
Profit/ (loss) and total comprehensive income for the year | - | - | - | 79 | 79 |
Dividends | - | - | - | (79) | (79) |
Share-based payment charge | - | - | - | 9 | 9 |
Balance at 30 November 2014 | 416 | 1,531 | 1 | 51 | 1,999 |
Balance sheets at 30 November 2014
Company number: 1730535 | Group | Company | |||
Note | 2014 | 2013 | 2014 | 2013 | |
£'000 | £'000 | £'000 | £'000 | ||
Assets | |||||
Non-current assets | |||||
Goodwill | 318 | 320 | - | - | |
Property, plant and equipment | 274 | 320 | 8 | 16 | |
Investments in subsidiaries | - | - | 2,291 | 2,308 | |
Investment in joint venture | - | - | 15 | 15 | |
Deferred tax assets | 35 | 41 | - | - | |
627 | 681 | 2,314 | 2,339 | ||
Current assets | |||||
Inventories | 2,742 | 2,799 | - | - | |
Trade and other receivables | 1,945 | 1,927 | 250 | 225 | |
Current tax assets | 72 | 26 | - | - | |
Cash and cash equivalents | 634 | 1,290 | 45 | 480 | |
5,393 | 6,042 | 295 | 705 | ||
Liabilities | |||||
Current liabilities | |||||
Trade and other payables | (1,257) | (1,413) | (562) | (1,019) | |
Current tax liabilities | (48) | (34) | (47) | (32) | |
(1,305) | (1,447) | (609) | (1,051) | ||
Net current assets | 4,088 | 4,595 | (314) | (346) | |
Non-current liabilities | |||||
Retirement benefit liability | (201) | (205) | - | - | |
Deferred tax liabilities | (20) | (22) | (1) | (3) | |
(221) | (227) | (1) | (3) | ||
4,494 | 5,049 | 1,999 | 1,990 | ||
Shareholders' equity | |||||
Share capital | 416 | 416 | 416 | 416 | |
Share premium account | 1,531 | 1,531 | 1,531 | 1,531 | |
Capital redemption reserve | 1 | 1 | 1 | 1 | |
Retained earnings | 2,512 | 2,936 | 51 | 42 | |
Cumulative translation adjustment reserve | 34 | 169 | - | - | |
Equity attributable to the shareholders of the parent | 4,494 | 5,053 | 1,999 | 1,990 | |
| Non-controlling interest | - | (4) | - | - | |
4,494 | 5,049 | 1,999 | 1,990 | ||
Statements of cash flows for the year ended 30 November 2014
Group | Company | ||||
2014 | 2013 | 2014 | 2013 | ||
£'000 | £'000 | £'000 | £'000 | ||
Cash flows from operating activities | |||||
Operating (loss)/ profit | (357) | (148) | 76 | (369) | |
Share-based payment credit | 9 | 9 | 9 | 9 | |
Depreciation | 108 | 110 | 8 | 8 | |
Impairment costs | (32) | 213 | 17 | 472 | |
(Gain)/ Loss on sale of property, plant and equipment | - | 1 | - | - | |
(Increase)/decrease in inventories | 5 | 348 | - | - | |
(Increase)/decrease in trade and other receivables | (36) | 322 | (25) | 162 | |
Increase/(decrease) in trade and other payables | (188) | (87) | (457) | 219 | |
Cash (used in)/generated from operations | (491) | 768 | (372) | 501 | |
Corporation tax (paid)/received | (39) | (18) | - | 72 | |
Net cash (used in)/generated from operations | (530) | 750 | (372) | 573 | |
Cash flows from investing activities | |||||
Purchase of property, plant and equipment | (74) | (48) | - | (3) | |
Proceeds from sale of property, plant and equipment | 3 | 1 | - | - | |
Proceeds from sale of subsidiary | 32 | - | - | - | |
Dividends received from group undertakings | - | - | 13 | - | |
Interest received | 2 | 4 | 3 | 13 | |
Net cash (used in)/generated from investing activities | (37) | (43) | 16 | 10 | |
Cash flows from financing activities | |||||
Interest paid | (7) | (14) | - | (2) | |
Loan repayments | - | - | - | - | |
Settlement of contingent consideration | - | (29) | - | (29) | |
Equity dividends paid | (79) | (78) | (79) | (78) | |
Net cash used in financing activities | (86) | (121) | (79) | (109) | |
Net change in cash and cash equivalents |
(653) |
586 |
(435) |
474 | |
Cash and cash equivalents at start of period | 1,290 | 700 | 480 | 6 | |
Effect of foreign exchange rates | (3) | 4 | - | - | |
Cash and cash equivalents at end of period | 634 | 1,290 | 45 | 480 | |
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
2014 £'000 | 2013 £'000 | |
| Analysis of the charge in the period | ||
Current tax | ||
- Current period | (1) | 30 |
- Adjustments in respect of prior periods | 14 | 4 |
13 | 34 | |
Deferred tax | (2) | (10) |
Total tax | 11 | 24 |
Tax reconciliation | ||
The tax for the period is higher (2013: higher) than the standard rate of corporation tax in the UK, effectively 20.00% (2013: 23.67%) for the company's financial year. The differences are explained below: | ||
2014 £'000 | 2013 £'000 | |
Profit/(loss) before taxation | (362) | 97 |
Profit/ (loss) before taxation multiplied by the rate of corporation tax in the UK of 20.00 % (2013: 23.67%) |
(77) |
23 |
Effects of: | ||
Differences between capital allowances and depreciation | (3) | (2) |
Different overseas tax rates | 2 | - |
Adjustments in respect of prior years | 16 | - |
Taxation losses | - | 2 |
Other temporary differences | 73 | 1 |
Taxation | 11 | 24 |
3. Discontinued operations
On 3 January 2014, the Group's 70% shareholding in Topgrow Technologies Ltd was sold for a cash consideration of 441,000 Hong Kong dollars.
The Topgrow Technologies Ltd disposal has been presented as discontinued operations in the income statement and the Board are of the view that this presentation of information enables the users of the financial statements to understand the financial effects of these operations no longer being part of the Group.
In the cash flow statement, the cash flows of the discontinued business have been aggregated with those of continuing businesses, but are also shown separately in the note below.
The information presented in this note is presented at the lower of cost and fair value less costs to sell as prescribed in IFRS 5. As a result of this treatment as impairment charge of £213,000 relating to fixed assets, inventories and receivables has been recognised in the income statement in the year 30 November 2013. This, combined with an operating loss of £56,000, results in a loss on discontinued operations of £269,000.
The results from discontinued operations which have been included in the income statement are as below:
2014 £'000 | 2013 £'000 | |
Revenue | - | 990 |
Cost of sales | - | (714) |
Gross profit | - | 276 |
Distribution costs | - | (26) |
Administrative expenses | - | (266) |
Other operating costs | - | (24) |
Operating loss | - | (40) |
Impairment costs | - | (213) |
Finance expense | - | (2) |
Loss before tax | - | (255) |
Taxation on discontinued operations | - | (14) |
Loss for the period from discontinued operations | - | (269) |
4. The directors have proposed a final dividend of 0.25p per share payable on 19 May 2015 to shareholders on the register at close of business on 29 April 2015. The total dividend for the year, including the interim dividend of 1.0p (2013: 1.0p) per share paid on 7 October 2014, amounts to £49,000 (2013: £79,000), which is equivalent to 1.25p (2013: 2.0p) per share.
5. The basic earnings per share are based on the loss for the financial year attributable to the equity shareholders of £357,000 (2013: profit of £105,000) and on ordinary shares 3,939,551 (2013: 3,939,551), the weighted average number of shares in issue during the year, excluding treasury shares. Diluted earnings per share are based on 3,939,551 ordinary shares (2013: 4,094,272), being the weighted average number of ordinary shares after an adjustment of nil shares (2013: 154,271) in relation to share options. There was no earnings dilution calculated in 2014 as a loss was recorded by the group.
6. This preliminary statement, which has been approved by the Board on 5 February 2015, is not the Company's statutory accounts. The statutory accounts for each of the two years to 30 November 2013 and 30 November 2014 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 2013 accounts have been filed with the Registrar of Companies but the 2014 accounts are not yet filed.
For further information, contact:
Rudi Weinreich, Executive Chairman, Holders Technology plc,
Tel. 020 8236 1490
Paul Geraghty, Group Finance Director, Holders Technology plc,
Tel. 020 8236 1490
William Vandyk, Director, Corporate Finance, Northland Capital Partners Ltd,
Tel. 020 7382 1100
Website www.holderstechnology.com
ENDS