12 Feb 2016 07:00
Holders Technology plc
Specialised PCB Materials, LED Components and Lighting Solutions
Audited results for the year ended 30 November 2015
Holders Technology plc ("Holders Technology" or "the Group") announces its audited results for the year ended 30 November 2015. 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.
LED results showed good improvement during 2015 and this, despite disappointing PCB results, led to material improvement in the group operating result. Group revenue was reduced compared to 2014 due principally to sterling strengthening and the loss of a large PCB distributorship at the end of 2014. Gross margins improved and cash balances remained satisfactory.
The directors propose to pay a final dividend of 0.25p per share.
Highlights included: Statutory basis Like-for-like basis*
· Results compared to 2014:
Group revenue 17% lower 11% lower
PCB revenue 25% lower 19% lower
LED revenue 18% higher 24% higher
Group margins 1.3% higher
· Operating loss before impairment and restructuring costs £126,000
· Cash balances £0.44 million. No debt.
*Like-for-like basis assumes constant sterling exchange rate.
Chairman's statement
As noted in the Interim Report, 2015 revenues were materially reduced by sterling's strengthening against the Euro, and reduced UK PCB sales as a result of a discontinued distribution contract. Overall group revenues decreased from £13.5m to £11.2m; however excluding the two above factors, 2015 group revenues showed a decline of 1.4% compared to 2014.
Results for the year to 30 November 2015 were mixed; LED divisions made good progress whilst German PCB results were disappointing. The Group operating result before impairment and restructuring costs was a loss of £126,000 (2014: operating loss £290,000). The operating result after impairment and restructuring costs was a loss of £151,000 (2014: operating loss £357,000).
The PCB market in 2015 continued to be demanding and the PCB divisions together recorded a small loss. The German operation, comprising 75% of Group PCB sales, suffered lower revenue as a result of sharply reduced customer demand. In addition, sales to a major customer were suspended due to a fire at one of their factories but since the year-end sales to this customer have recommenced.
UK PCB operations were able partly to mitigate the impact of the discontinued distribution contract with increased sales of replacement products and cost reductions. The results achieved by our small Indian venture remained modest and this investment was sold in December 2015. Total PCB revenues were £8.3m (2014: £11.0m); with margins at 22.3% (2014: 23.1%).
The LED divisions overall showed significant progress with an overall result for this division close to breakeven. The Holders Components divisions in the UK and Germany, aided by a number of new suppliers added during the year, achieved strong revenue growth and improvements both to margins and profitability. The smaller NRGstar and Opteon Germany also showed improved revenues and operating results. In total LED revenues amounted to £2.9m (2014: £2.5m); with a combined operating loss of £26,000 (2014: loss of £355,000).
In October we announced an unforeseen taxation liability in respect of EU Cross Border Group Relief ("CBGR") claims relating to our former Swedish and Dutch subsidiaries. The board considers the maximum potential liability to be up to £192,000 and has made a provision of this amount as at 30 November 2015, although the Board believes a lower amount may be payable at the final settlement. Since the announcement no further discussions have taken place with HMRC.
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.
Shareholders can be assured that we will continue to evaluate all possible routes to returning the Group to satisfactory profitability. In the current year, given market conditions, it will be difficult for our PCB activities to make a positive contribution. The outlook for our LED operations is significantly more encouraging and we anticipate continued progress from this area of activity.
R W Weinreich
Executive Chairman
11 February 2016
Group income statement for the year ended 30 November 2015
Note | 2015 | 2014 | |||
£'000 | £'000 | ||||
Revenue | 11,195 | 13,478 | |||
Cost of sales | (8,396) | (10,224) | |||
Gross profit | 2,799 | 3,254 | |||
Distribution costs | (364) | (414) | |||
Administrative expenses | (2,652) | (3,167) | |||
Restructuring costs | - | (67) | |||
Impairment costs | (25) | - | |||
Other operating income | 91 | 37 | |||
Operating loss | (151) | (357) | |||
Finance income | 1 | 2 | |||
Finance expenses | (16) | (7) | |||
Loss before taxation | (166) | (362) | |||
Tax expense | 2 | (195) | (11) | ||
Loss for the financial year | (361) | (373) | |||
Basic loss per share | 4 | (9.16p) | (9.47p) | ||
Diluted loss per share | 4 | (9.16p) | (9.47p) | ||
Total loss per share | 4 | (9.16p) | (9.47p) | ||
Group statement of comprehensive income for the year ended 30 November 2015
2015 £'000 | 2014 £'000 | |||
Loss for the year | (361) | (373) | ||
Items that may be reclassified subsequently to profit or loss: | ||||
Exchange differences on translating foreign operations | (246) | (112) | ||
Total comprehensive income and expense for the year | (607) | (485) | ||
Statements of changes in equity for the year ended 30 November 2015
Group | Share capital | Share premium | Capital redemption reserve | Translation reserve | Retained earnings | Non-controlling interest | Total equity |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 30 November 2013 | 416 | 1,531 | 1 | 169 | 2,936 | (4) | 5,049 |
Dividends | - | - | - | - | (79) | - | (79) |
Employee share-based payment options | - | - | - | - | 9 | - | 9 |
Transactions with owners | - | - | - | - | (70) | - | (70) |
(Loss) for the year | - | - | - | - | (373) | - | (373) |
Reclassification adjustment related to terminated foreign operations | - | - | - | (23) | 19 | 4 | - |
Exchange differences on translating foreign operations | - | - | - | (112) | - | - | (112) |
Total comprehensive income for the year | - | - | - | (135) | (354) | 4 | (485) |
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 |
Company | Share capital | Share premium | Capital redemption reserve | Retained earnings | Total equity |
£'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 December 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 |
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 |
Balance sheets at 30 November 2015
Group | Company | ||||
2015 | 2014 | 2015 | 2014 | ||
£'000 | £'000 | £'000 | £'000 | ||
Assets | |||||
Non-current assets | |||||
Goodwill | 316 | 318 | - | - | |
Property, plant and equipment | 327 | 274 | 4 | 8 | |
Investments in subsidiaries | - | - | 2,291 | 2,291 | |
Investment in joint venture | - | - | 15 | 15 | |
Deferred tax assets | 16 | 35 | - | - | |
659 | 627 | 2,310 | 2,314 | ||
Current assets | |||||
Inventories | 2,533 | 2,742 | - | - | |
Trade and other receivables | 1,556 | 1,945 | 433 | 250 | |
Current tax assets | 59 | 72 | - | - | |
Cash and cash equivalents | 443 | 634 | 25 | 45 | |
4,591 | 5,393 | 458 | 295 | ||
Liabilities | |||||
Current liabilities | |||||
Trade and other payables | (975) | (1,257) | (627) | (562) | |
Current tax liabilities | (213) | (48) | (21) | (47) | |
(1,188) | (1,305) | (648) | (609) | ||
Net current assets | 3,403 | 4,088 | (190) | (314) | |
Non-current liabilities | |||||
Retirement benefit liability | (181) | (201) | - | - | |
Deferred tax liabilities | (11) | (20) | - | (1) | |
(192) | (221) | - | (1) | ||
3,870 | 4,494 | 2,120 | 1,999 | ||
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 | 2,134 | 2,512 | 172 | 51 | |
Cumulative translation adjustment reserve | (212) | 34 | - | - | |
3,870 | 4,494 | 2,120 | 1,999 | ||
Statements of cash flows for the year ended 30 November 2015
Group | Company | ||||
2015 | 2014 | 2015 | 2014 | ||
£'000 | £'000 | £'000 | £'000 | ||
Cash flows from operating activities | |||||
Operating (loss)/ profit | (151) | (357) | (92) | 76 | |
Share-based payment credit | 3 | 9 | 3 | 9 | |
Depreciation | 86 | 108 | 8 | 8 | |
Impairment costs | - | (32) | - | 17 | |
(Increase)/decrease in inventories | (102) | 5 | - | - | |
(Increase)/decrease in trade and other receivables | 295 | (36) | 17 | (25) | |
Increase/(decrease) in trade and other payables | (86) | (188) | 65 | (457) | |
Cash generated from/ (used in) operations | 45 | (491) | 1 | (372) | |
Corporation tax (paid)/received | (7) | (39) | (1) | - | |
Net cash generated from/ (used in) operations | 38 | (530) | - | (372) | |
Cash flows from investing activities | |||||
Purchase of property, plant and equipment | (161) | (74) | (4) | - | |
Proceeds from sale of property, plant and equipment | 3 | 3 | - | - | |
Proceeds from sale of subsidiary | - | 32 | - | - | |
Dividends received from group undertakings | - | - | - | 13 | |
Interest received | 1 | 2 | 4 | 3 | |
Net cash (used in)/generated from investing activities | (157) | (37) | - | 16 | |
Cash flows from financing activities | |||||
Interest paid | (16) | (7) | - | - | |
Loan repayments | - | - | - | - | |
Settlement of contingent consideration | - | - | - | - | |
Equity dividends paid | (20) | (79) | (20) | (79) | |
Net cash used in financing activities | (36) | (86) | (20) | (79) | |
Net change in cash and cash equivalents |
(155) |
(653) |
(20) |
(435) | |
Cash and cash equivalents at start of period | 634 | 1,290 | 45 | 480 | |
Effect of foreign exchange rates | (36) | (3) | - | - | |
Cash and cash equivalents at end of period | 443 | 634 | 25 | 45 | |
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
2015 £'000 | 2014 £'000 | |
| Analysis of the charge in the period | ||
Current tax | ||
- Current period | 6 | (1) |
- Adjustments in respect of prior periods | 179 | 14 |
185 | 13 | |
Deferred tax | 10 | (2) |
Total tax | 195 | 11 |
Tax reconciliation | ||
The tax for the period is higher (2014: higher) than the standard rate of corporation tax in the UK, effectively 20.0% (2014: 20.0%) for the company's financial year. The differences are explained below: | ||
2015 £'000 | 2014 £'000 | |
Loss before taxation | (166) | (362) |
Loss before taxation multiplied by the rate of corporation tax in the UK of 20.0 % (2014: 20.0%) |
(33) |
(77) |
Effects of: | ||
Differences between capital allowances and depreciation | 4 | (3) |
Different overseas tax rates | - | 2 |
Adjustments in respect of prior years | 176 | 16 |
Taxation losses | 35 | - |
Other temporary differences | 13 | 73 |
Taxation | 195 | 11 |
3. The directors have proposed a final dividend of 0.25p per share payable on 24 May 2016 to shareholders on the register at close of business on 6 May 2016. The total dividend for the year, including the interim dividend of 0.25p (2014: 1.0p) per share paid on 5 October 2015, amounts to £20,000 (2014: £49,000), which is equivalent to 0.50p (2014: 1.25p) per share.
4. The basic earnings per share are based on the loss for the financial year of £361,000 (2014: loss of £373,000) and on ordinary shares 3,939,551 (2014: 3,939,551), the weighted average number of shares in issue during the year, excluding treasury shares. There was no earnings dilution calculated in 2014 and 2015 as a loss was recorded by the group.
5. This preliminary statement, which has been approved by the Board on 11 February 2016, is not the Company's statutory accounts. The statutory accounts for each of the two years to 30 November 2014 and 30 November 2015 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 2014 accounts have been filed with the Registrar of Companies but the 2015 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 7382 1100
Website www.holdersgroup.com