10 Feb 2010 07:00
Holders Technology plc Providers of specialised materials, equipment and services to the electronics industry Audited results for the year ended 30 November 2009
Holders Technology plc ("Holders Technology" or "the group") announces its audited results for the year ended 30 November 2009.
The European printed circuit board (PCB) industry suffered a sharp decline in late 2008 and the first half of 2009. Thereafter, conditions stabilised. Holders Technology recorded the following results:
- Revenue declined 26% to £13.0m (2008: £17.5m)
- Gross profit of £3.2m (2008: £4.4m)
- Operating loss of £0.2m before exceptional items (2008: £0.7m profit)
- The Dutch business successfully merged with German operations
- £0.8m positive cash flow generated from operations
- Net cash of £2.1m at year end (2008: £1.5m)
- Second interim dividend of 3.25p to be paid on 31 March 2010 in place of
final dividend
Chairman's statement
The first half of the year to 30th November 2009 was a period which saw a dramatic downturn in a number of our markets and a pre tax loss of £0.6m was recorded.
I am glad to be able to report that the second half of the year saw a recoveryin profitability with the pre tax loss for the year as a whole reduced to £0.4m. The loss of £0.4m was in large part attributable to the £0.2m of costsincurred in restructuring our operations.Revenue for the year at £13.0m showed a marked reduction from the £17.5mrecorded in the preceding year; the recovery in profitability in the secondhalf of the year was largely due to the cost reduction measures undertaken. Thereduced revenue and the rigorous control of working capital coupled with thebenefits accruing from the cost reduction programme led to the year end netcash position improving to £2.1m. In light of the improved trading in thesecond half of the year and the strong cash position the board felt justifiedin declaring a second interim dividend for the year in lieu of a finaldividend.It is still early to comment on the current year but to date we have seen somerecovery particularly as compared to the exceptionally difficult comparablemonths of the preceding year. The current year will enjoy the full benefit ofthe restructuring savings and we hope to see gains from the measures we havetaken both to extend our specialist product ranges and more competitively tosource certain of our commodity product offerings.
In short we expect to achieve some recovery in the current year but I would caution against any expectations that the PCB markets we serve will continue to be anything other than challenging. The continuing difficulties in securing insurance in respect of debtors may have some impact on sales as we are unwilling unduly to extend credit to customers.
On behalf of the board and, I am sure, all shareholders I would like to thank all our staff for the sacrifices they have made and continue to make. Their willingness to accept the measures we have been obliged to introduce has ensured that as a group we have been able to maintain the service levels necessary to retain customers in difficult market conditions.
In previous statements I have commented on our wish to consider acquisitions.Over the past two years we have considered a number of opportunities but theyhave failed to match the criteria we set ourselves. In order to reduce risk wesought only to consider areas where we could understand both the technology andthe markets served. While we sought areas where we could see significant growthwe were concerned to ensure that we had the ability to add value to anyacquisition made.
In late December we completed the acquisition of JK Components Ltd (JK) a distributor of Light Emitting Diodes (LED) components. JK while small has a range of products sourced from established Far Eastern suppliers and has established a market position in the UK. We believe we are well placed further to extend both the range of products offered and the markets served.
The markets for LEDs are growing very quickly and while there are a significantnumber of companies competing in these markets we expect to be able to buildfurther on the base JK has created. We anticipate that evidence of thisprogress will be forthcoming in the current year but our key objective thisyear is to invest and build a platform for sustained growth both within the UKand throughout the geographical markets we currently address in future years.The current year will present challenges but the measures we have already takenwill, we believe, lead to a year of improved overall trading in our establishedPCB market. I anticipate that the acquisition and development of JK will enableus to provide evidence of an attractive widening of the Group's activities.
R W Weinreich
Chairman and Chief Executive
9 February 2010
Consolidated income statement
for the year ended 30 November 2009
Before exceptional Exceptional Total Total items items Note 2009 2009 2009 2008 £'000 £'000 £'000 £'000 Continuing operations Revenue 12,966 - 12,966 17,481 Cost of sales (9,770) - (9,770) (13,057) Gross profit 3,196 - 3,196 4,424 Distribution costs (301) - (301) (427) Administrative expenses (3,044) - (3,044) (3,285) Fundamental restructuring - (176) (176) (64) Impairment of goodwill - - - (100) Impairment of investment in - - - (51) associates Other operating expenses (90) - (90) 11 Operating (loss)/profit (239) (176) (415) 508 Finance income 20 - 20 43 Finance expenses (13) - (13) (38)
(Loss)/profit before taxation (232) (176) (408)
513 Taxation 3 9 - 9 (243)
(Loss)/profit after taxation (223) (176) (399)
270 Attributable to:
Equity shareholders of the (375)
322 company
Minority interests - equity (24)
(52) (Loss)/profit for the (399) 270 financial year Total and continuing Basic (loss)/earnings per (9.52p) 8.21p share Diluted (loss)/earnings per (9.52p) 8.21p share
Consolidated balance sheet
at 30 November 2009 Group Company Note 2009 2008 2009 2008 £'000 £'000 £'000 £'000 Assets Non-current assets Goodwill 207 201 - -
Property, plant and equipment 655 651 3 3 Investments in subsidiaries - - 2,669 2,352 Investment in joint venture - - 15
15 Investments in associates - - - - Deferred tax assets 29 31 2 - 891 883 2,689 2,370 Current assets Inventories 1,866 2,808 - -
Trade and other receivables 2,301 2,700 557
472 Current tax assets 69 99 - 16 Cash and cash equivalents 2,095 1,774 127 297 6,331 7,381 684 785 Liabilities Current liabilities Trade and other payables (1,107) (1,663) (454) (377) Borrowings - (237) - - Current tax liabilities (33) (33) (32) - (1,142) (1,933) (486) (377) Net current assets 5,189 5,448 198 408 Non-current liabilities
Retirement benefit liability (176) (165) -
- Deferred tax liabilities (8) - - - (184) (165) - - 5,896 6,166 2,887 2,778 Shareholders' equity Share capital 4 416 416 416 416 Share premium account 4 1,531 1,531 1,531 1,531 Capital redemption reserve 4 1 1 1 1 Retained earnings 4 2,972 3,568 939 830 Cumulative translation 4 831 520 - - adjustment reserve Equity attributable to the 5,751 6,036 2,887 2,778 shareholders of the parent
Minority interests in equity 4 145 130 -
- 5,896 6,166 2,887 2,778
Consolidated cash flow statement
forthe year ended 30 November 2009
Group Company Note 2009 2008 2009 2008 £'000 £'000 £'000 £'000 Cash flows from operating activities Operating profit (415) 508 (215) (120)
Share-based payment (credit)/ (10) 12 (10)
12 charge Depreciation 180 184 2 1 Impairment of goodwill - 100 - - Impairment of investment in - - 177 - subsidiary Impairment of investment in - 51 - - associates Currency translation 182 293 - -
Loss on sale of property, plant 13 2 -
- and equipment Decrease/(increase) in 942 (140) - - inventories Decrease/(increase) in trade 410 (86) (85) (266) and other receivables (Decrease)/increase in trade (517) 349 77 (277) and other payables Cash generated from/(used in) 785 1,273 (54) (650) operations
Corporation tax received/(paid) 51 (566) 47
(46) Net cash generated from/(used 836 707 (7) (696) in) operations Cash flows from investing activities Increase in investment in - (23) - - associate Increase in investment in - - (494) - subsidiaries Investment in joint venture - - - -
Purchase of property, plant and (168) (132) (2)
(2) equipment
Proceeds from sale of property, - 24 -
- plant and equipment Income from investments - - 541 499 Interest received 20 43 3 24 Net cash generated/(used) in (148) (88) 48 521 investing activities Cash flows from financing activities Proceeds from exercise of - 13 - 13 employee share options Interest paid (13) (38) - - Equity dividends paid (211) (210) (211) (210) Net cash used in financing (224) (235) (211) (197) activities Net change in cash and cash 464 384 (170) (372) equivalents Cash and cash equivalents at 1,537 1,101 297 669 start of period Effect of foreign exchange 94 52 - - rates Cash and cash equivalents at 2,095 1,537 127 297 end of period Notes 1. Basis of preparation The group and parent company financial statements have been prepared inaccordance with EU endorsed International Financial Reporting Standards (IFRS),International Financial Reporting Interpretations Committee (IFRIC)interpretations and with those parts of the Companies Act applicable tocompanies reporting under IFRS. All accounting standards and interpretationsissued by the International Accounting Standards Board and the InternationalFinancial Reporting Interpretations Committee effective at the time ofpreparing these financial statements have been applied.
2. Exceptional items
Exceptional items consist of the following:
2008 2008 £'000 £'000 Fundamental restructuring (176) (64) Impairment of goodwill - (100)
Impairment of investment in associate - (51)
(176) (215) The fundamental restructuring charge consists of redundancy and leasetermination costs at the group's Dutch operation and redundancies at the Germanoperation. 3. Taxation 4. 2009 2008 £'000 £'000
Analysis of the charge in the period
Current tax - Current period 18 228
- Adjustments in respect of prior periods (38) (3)
(20) 225 Deferred tax (note 24) 11 18 Total tax (9) 243 Tax reconciliation
The tax for the period is higher (2008: higher) than the standard rate of corporation tax in the UK, effectively 28% (2008: 28.67%) for the company's financial year. The differences are explained below:
2009 2008 £'000 £'000 (Loss)/profit before taxation (408) 513
Profit before taxation multiplied by rate of (113) 147 corporation tax in the UK of 28% (2008:
28.67%) Effects of:
Differences between capital allowances and (9) (3)
depreciation
Amounts not deductible for taxation purposes (24) 79 Adjustments in respect of prior years 9 2
Taxation losses 99 34 Other timing differences 29 (8) Different overseas tax rates - (8) Taxation (9) 243
4. Statement of changes in shareholders' equity
Group Capital Cumulative Share Share redemption translation Retained
Shareholders' Minority Total
capital premium reserve adjustment earnings
equity interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 416 1,531 1 37 3,431 5,416
97 5,513 December 2007 Profit/(loss) for - - - - 322 322 (52) 270 the period Dividends - - - - (210) (210) - (210) Issue of treasury - - - - 13 13 - 13 shares Currency - - - 483 - 483 85 568 translation differences Share-based - - - - 12 12 - 12 payment credit
Balance at 30 416 1,531 1 520 3,568 6,036
130 6,166 November 2008 (Loss)/profit for - - - - (375) (375) (24) (399) the period Dividends - - - - (211) (211) - (211) Minority interest - - - - - - 62 62 investment Currency - - - 311 - 311 (23) 288 translation differences Share-based - - - - (10) (10) - (10) payment charge
Balance at 30 416 1,531 1 831 2,972 5,751 145 5,896 November 2009
5. The directors have declared a second interim dividend of 3.25p per share
payable on 31 March 2010 to shareholders on the register at close of
business on 5 March 2010. This is in place of the final dividend, which for
2008 was 3.25p and paid on 19 May 2009. The total dividend for the year,
including the first interim dividend of 2.1p (2008: 2.1p) per share paid on
6 October 2009, amounts to £211,000 (2008: £211,000), which is equivalent
to 5.35p (2008: 5.35p) per share.
6. The basic loss per share are based on the loss for the financial year
attributable to the equity shareholders of £375,000 (2008: profit £322,000)
and on ordinary shares 3,939,551 (2008: 3,922,611), 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 (2008:
3,922,611), being the weighted average number of ordinary shares after an
adjustment of nil shares (2008: nil) in relation to share options.
7. This preliminary statement, which has been approved by the Board on 9
February 2010, is not the Company's statutory accounts. The statutory accounts
for each of the two years to 30 November 2008 and 30 November 2009 received
audit reports, which were unqualified and did not contain statements under
section 237 (2) or (3) of the Companies Act 1985, and section 498(2) and
section 498(3) of the Companies Act 2006 respectively. The 2008 accounts have
been filed with the Registrar of Companies but the 2009 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 Shane Gallwey, Director, Corporate Finance, Astaire Securities Plc,
on 020 7448 4400.
Website www.holderstechnology.com
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