HDT.L Regulatory News (HDT)

9 Mar 2006 07:01

Holders Technology PLC09 March 2006 Holders Technology plc Providers of specialised materials, equipment and services for the electronics and telecommunications industries Audited results for the year ended 30 November 2005 Holders Technology plc announces its audited results for the year ended 30November 2005. Highlights In a difficult year for the European electronics industry, Holders has focusedon restructuring and cutting costs, whilst investing for the future in the FarEast. • Turnover fell 6% to £14.7m with operating profit declining by 33% to £0.5m• Net operating cash inflow of £0.8m• Dutch and German operations restructured• New Chinese subsidiary being set up• Marked improvement in the current year expected• Final dividend maintained at 2.75p Chairman's statement Financials In the year to 30 November 2005, turnover decreased to £14.7m (2004: £15.7m).The group achieved a pre-tax profit of £0.3m (2004: £0.7m). The earnings pershare were 8.57p (2004: 11.00p). Your directors are recommending a finaldividend of 2.75p (2004: 2.75p) per share, which will be payable on 23 May 2006to shareholders on the register at close of business on 28 April 2006. Theshares will go ex dividend on 26 April 2006. In the Chairman's statement which accompanied the Report and Accounts for theyear to 30 November 2004, I cautioned shareholders that the year to 30 November2005 would be a challenging one for the Group; this proved to be the case.Demand in all of our main markets was subdued during the year and we experienceda number of non recurring costs. It remains the Group's policy to insure againstdebtor default wherever possible; despite this approach the Group suffered baddebts of £144,000 in the year to 30 November 2005. The necessary restructuring of our European operations, which included majormanagement changes within our Dutch operations in order to simplify itsstructure, gave rise to non-recurring expenditure of £131,000. Settlement of adelayed, disputed employee pension claim arising from the acquisition of theGerman Cimatec business required £84,000 by way of provision for a payment tothe staff member and associated legal costs. The restructuring is now completedand leaves us well placed to serve our European markets with a significantlylower cost base. Our activities in China are centred on Topgrow Technologies; this company has ajoint venture with Waysky and a minority holding in Sino Pacific which providessub contract drilling services to Chinese PCB manufacturers. Taken togetherthese operations broke even in the year. This is encouraging given that theseactivities remain in their build up phase and that Topgrow suffered majorquality problems with supplies into China through much of the year. Inevitably, given the competitive market place and the relative weakening ofsterling against the dollar over the year, we experienced pressure on marginsbut we have, and will continue, to offset this by improving our systems andcontaining overheads wherever possible. In addition to the restructuring measures undertaken last year we have realignedsubsidiary management teams so as to enable them to focus on their specificmarkets thus freeing central management time to pursue potential new directionsfor the Group. The closure of Screen Circuit BV has enabled us to claim tax credits of £0.1mrelating to Screen Circuit's losses in the years 2003 to 2005. We alsoreclaimed tax on foreign dividends relying on the Manninen and Lenz precedent.As a result of these two tax claims, the overall effect of taxation on theresults for 2005 is a credit of £0.1m, compared with a charge of £0.3m in 2004. Careful management of working capital enabled the group to generate £0.8m ofoperating cash flow (2004: £0.8m) and the group continues to maintain a strongbalance sheet. During the last year we have investigated a number of opportunities to widen thebase of the Group by diversifying into areas of technical distribution outsidethe PCB industry. We have set ourselves strict criteria for any acquisitionsand will only pursue opportunities which we see as being capable of generatinggrowth with low risk. We believe that we have a number of contributions whichwe can make to such companies and a distribution network which we can more fullyexploit. These efforts will continue in the current year. Given the changes we have made to the Group we believe that we are well placedto take advantage of improvements to trading volumes as these arise. Our focuswill be on improving the profitability of the ongoing business in what we expectto be a more settled year, expanding our Chinese operations and consideringselected add on acquisitions where these can be made on attractive terms. Taken together we believe these measures will enable us to achieve a markedimprovement in the current year and improve the stability of earnings in thefuture. R W WeinreichChairman and Chief Executive 9 March 2006 Consolidated profit and loss accountfor the year ended 30 November 2005 Note 2005 2004 £'000 £'000Group turnoverCurrent year acquisition 292 -Other continuing operations 14,448 15,658 Group turnover 14,740 15,658Cost of sales (10,471) (11,023) Gross profit 4,269 4,635Distribution costs (406) (483)Administrative expenses (3,400) (3,498)Other operating income 46 66 Analysis of group operating profitCurrent year acquisition 14 -Other continuing operations 495 720 Group operating profit 509 720Share of associates operating (loss) / profit (25) 4 Total operating profit 484 724Cost of fundamental restructuring (215) -Deferred consideration arising on sale of former subsidiary 24 24 Profit on ordinary activities before interest and tax 293 748 Interest receivable 5 15Interest payable and similar charges (24) (31) Profit on ordinary activities before taxation 274 732Tax on profit on ordinary activities 1 88 (274) Profit on ordinary activities after taxation 362 458Minority interests - equity (7) (2) Profit for the financial year 355 456Dividends (all equity) 2 (197) (197) Transfer to reserves 158 259 Basic earnings per share 3 8.57p 11.00p Diluted earnings per share 3 8.38p 10.83p Consolidated balance sheetat 30 November 2005 Note 2005 2004 £'000 £'000Fixed assetsIntangible assets 410 424Tangible fixed assets 509 640Investment in associated undertaking 103 97 1,022 1,161 Current assetsStocks 2,624 2,607Debtors 2,970 2,804Cash at bank and in hand 734 480 6,328 5,891Creditors: amounts falling due within one year (2,202) (2,217) Net current assets 4,126 3,674 Total assets less current liabilities 5,148 4,835 Creditors: amounts falling due after one year (6) (25) Provision for liabilities and charges (186) (104) 4,956 4,706 Capital and reservesCalled up share capital 414 414Share premium account 1,525 1,525Capital redemption reserve 1 1Profit and loss account 2,769 2,643 Equity shareholders' funds 4,709 4,583 Minority interests - equity 247 123 4,956 4,706 Consolidated cash flow statementfor the year ended 30 November 2005 Note 2005 2004 £'000 £'000 Net cash inflow from operating activities 753 837 Returns on investment and servicing of financeInterest received 5 15Interest paid (21) (25)Finance lease interest (3) (6) Net cash outflow from returns on investment andservicing of finance (19) (16) Taxation paidUK Corporation tax (254) (63)Overseas corporation tax (10) (157) (264) (220) Capital expenditurePayments to acquire tangible fixed assets (116) (253)Receipts from sales of tangible fixed assets 58 554 (58) 301 Acquisitions and disposalsAcquisition of business 4 - (76)Net cash acquired with subsidiary undertaking 9 8Investment in associated undertaking (31) (24)Deferred consideration arising on sale of former subsidiary 24 24 2 (68) Equity dividends paid (197) (187) Cash flow before financing 217 647 FinancingCapital element of finance leases (42) (32)Repayment of bank loan - (598) (42) (630) Increase in cash 175 17 Notes 1. Taxation comprises United Kingdom corporation tax of £(118,000) (2004:£198,000), foreign tax of £22,000 (2004: £107,000) and deferred taxation of£8,000 (2004: £(31,000)). 2. The directors have recommended a final dividend of 2.75p (2004: 2.75p)per share payable on 23 May 2005 to shareholders on the register at close ofbusiness on 28 April 2005. The total dividend for the year, including theinterim dividend of 2.0p (2004: 2.0p) per share paid on 20 September 2005,amounts to £197,000 (2004: £197,000), which is equivalent to 4.75p (2004: 4.75p)per share. 3. The basic earnings per share are based on the profit for the financialyear of £355,000 (2004: £456,000) and on 4,144,551 ordinary shares (2004:4,144,551), the weighted average number of shares in issue during the year.Diluted earnings per share are based on 4,234,551 ordinary shares (2004:4,209,551), being the weighted average number of ordinary shares after anadjustment of 90,000 shares (2004: 65,000) in relation to share options. 4. Acquisition On 1 December 2004, Topgrow Technologies Limited acquired a 60% interest inWaysky Technology Limited. This transaction has been accounted for as anacquisition. The following sets out the effect on the consolidated balancesheet: Balance sheet of Fair value Fair value of acquired business adjustment acquired business £'000 £'000 £'000 Debtors 135 - 135Cash 9 - 9Creditors (110) - (110) Net assets acquired 34 - 34 Net assets acquired 34Minority interest (52)Goodwill capitalised 18 Consideration - The acquired businesses generated turnover of £233,000 and a loss before tax of£1,000 in the eleven months to 30 November 2004. 5 This preliminary statement which has been approved by the Board on 9 March2006 is not the Company's statutory accounts. The statutory accounts for eachof the two years to 30 November 2004 and 30 November 2005 received auditreports, which were unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. The 2004 accounts have been filed withthe Registrar of Companies but the 2005 accounts are not yet filed. ENDS For further information, contact: Mr Rudi Weinreich, Chairman and Chief Executive, Holders Technology plc, on 020 8731 4336 Mr Jim Shawyer, Group Finance Director, Holders Technology plc, On 020 8731 4336 Mr Barrie Newton, Director, Rowan Dartington and Company Limited, on 0117 933 0011 This information is provided by RNS The company news service from the London Stock Exchange