HDT.L Regulatory News (HDT)

21 August 2020

Holders Technology plc

("Holders Technology" or the "Company")

Half Year Report 2020

Holders Technology, (AIM: HDT), is pleased to announce its unaudited half year results for the six months ended 31 May 2020.

Highlights

Holders Technology plc supplies specialty laminates and materials for printed circuit board manufacturers ("PCB") and operates as a lighting and control solutions ("LCS") provider to the lighting market and commercial buildings sector.

Unaudited results for the half year ended 31 May 2020 are summarised as follows:

Chairman's statement

Inevitably these interim results were heavily impacted by the economic consequences of the Covid-19 pandemic. The two segments of our business were affected differently. Details of this are set out below.

We have taken full benefit of all applicable assistance schemes, both in the UK and Germany, in order to reduce our costs. We have supplemented these with pay and other cost reductions wherever we can.

Against the background of the exceptionally difficult conditions, the board considers the result for the first half to be acceptable.

Group revenue decreased by 11.6% to £5.3m (H1 2019: £6.0m), gross margins were unchanged at 26.2%, and the pre-tax result was a loss of £90,000 (H1 2019: profit of £20,000).

PCB

PCB sales in the period decreased by 3.1%, from £4,291,000 in 2019 to £4,157,000, and PCB gross margins increased by 0.8% to 23.3%. The first half revenues benefitted from increased demand from healthcare applications and a degree of stockpiling by our customers due to global uncertainty. The Government support referred to above enabled us to reduce PCB overheads as a percentage of sales by 1.7% to 16.4%. Overall, our PCB activities recorded a pre-tax profit of £124,000 (H1 2019: profit of £30,000).

LCS

Lighting and Control Solutions division operations in the UK and Germany experienced a difficult first half due to the economic impact of Covid-19. A number of projects were delayed in the UK and the market in Germany weakened. Revenue reduced by 32.6% from £1,737,000 in H1 2019 to £1,170,000 but gross margins improved from 35.2% to 36.8%. Overheads as a percentage of revenue increased from 31.1% to 49.7%. The overall result for the LCS divisions was a loss of £174,000 (H1 2019: profit of £31,000).

In March 2020, the Group invested c. £15,000 in a 50:50 Joint Venture with a sales partner based in Austria. The new company, called Holders Technology Austria GmbH, will develop intelligent lighting business in Austria, Switzerland, Czechia, and Slovakia.

Cash and Debt

During the Covid-19 crisis management have increased focus on controlling days of stock and debtors' days. Net cash of £107,000 was generated from operations. Group cash at the period end was £723,000 (H1 2019: £674,000). Other than lease liabilities, the company has no debt.

Outlook

At present we have only limited visibility as to the likely level of trading in the second half of the year. We are encouraged by recent improvements in some divisions, both in quotations and order intake, as compared to the first half but cannot be certain that this will follow through to the end of the year. Our management team and work force remain committed to managing costs and containing working capital, so that the business may benefit from any improvement in trading conditions.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

For further information, contact:

Rudolf W. Weinreich Holders Technology plc

Executive Chairman 27-28 Eastcastle Street

London W1W 8HD

For further information, contact:

Holders Technology plc

Rudi Weinreich, Executive Chairman 01896 758781

Victoria Blaisdell, Group Managing Director

Paul Geraghty, Group Finance Director

SP Angel Corporate Finance LLP - Nomad and Broker

Matthew Johnson/ Caroline Rowe, Corporate Finance

Abigail Wayne, Corporate Broking 020 3470 0470

Website

www.holdersgroup.com

Consolidated income statement

for the half year ended 31 May 2020 (Unaudited)

Consolidated statement of comprehensive income

for the half year ended 31 May 2020 (Unaudited)

Consolidated statement of changes in equity

for the half year ended 31 May 2020 (Unaudited)

Consolidated balance sheet

at 31 May 2020 (Unaudited)

Consolidated cash flow statement

for the half year ended 31 May 2020 (Unaudited)

Notes

1. General information

Holders Technology plc is incorporated in the United Kingdom under the Companies Act 2006. The principal activity of the group is to provide specialised materials, components and solutions to the electronics and lighting industries.

2. Basis of preparation

The condensed consolidated half year financial statements have been prepared in accordance with the AIM Rules for Companies and prepared on a basis consistent with International Financial Reporting Standards ("IFRS") as adopted by the EU and the accounting policies set out in the group's financial statements for the year ended 30 November 2019.

The half year financial statements are unaudited and include all adjustments which management considers necessary for a fair presentation of the group's financial position, operating results and cash flows for the 6-month periods ended 31 May 2019 and 31 May 2020.

The half year financial statements do not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. A copy of the group's financial statements for the year ended 30 November 2019 prepared in accordance with IFRS as adopted by the EU has been filed with the Registrar of Companies. The auditors' report on those financial statements was not qualified and did not contain statements under s498(2) of s498(3) of the Companies Act 2006.

As permitted, the group has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these half year financial statements and therefore the half year financial information is not in full compliance with IFRS.

The preparation of half year financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income, and expenses. Actual results may differ from these estimates.

These half year financial statements have been prepared under the historical cost convention.

The board of Holders Technology plc approved this half yearly report on 20 August 2020.

3. IFRS 16 Leases

The half year statements include the impact of IFRS 16 "Leases" for the first time. The group has adopted IFRS 16 retrospectively from 1 January 2019, but has not restated comparatives for the 2019 periods, under the transitional provisions in the standard. The reclassifications and adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 December 2020.

On adoption of IFRS 16, the group recognised lease liabilities in relation to leases which had previously been classified as operating leases under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019.

Right of use ("ROU") assets and lease liabilities were recognised as follows:

As a result of the above adjustments, retained reserves at 1.12.19 were reduced by £10,000.

The impact on the 6-month period to 31 May 2020 was a credit to administrative expenses of £6,000 (all PCB segment), and a charge to interest of the same amount.

4. Segmental information

Management currently identifies two operating segments:

1. PCB distributes materials, equipment and supplies to the PCB industry.

2. LCS provides lighting and control solutions to the lighting market and commercial buildings sector.

Analysis by operating segment for the half year ended 31 May

5. The tax provision for the six months ended 31 May 2020 is calculated based on the tax rates applicable in the country in which each company operates.

6. A final dividend of 0.25p per share on the total issued share capital of 4,224,164 10p ordinary shares was paid on 23 June 2020 in respect of the year ended 30 November 2019.

An interim dividend payment of 0.25p per share (2019: 0.25p per share) will be payable on 6 October 2020 to shareholders on the register at 11 September 2020. The shares will go ex-dividend on 10 September 2020. The interim dividend had not been approved by the board at 31 May 2020 and accordingly, has not been included as a liability as at that date.

7. The basic earnings per share for continuing operations are based on the loss for the period of £90,000 (2019: profit £49,000) and on 4,224,164 ordinary shares (2019: 4,172,759), the weighted average number of shares in issue during the period. Diluted earnings per share for continuing operations are based on 4,224,164 ordinary shares (2019: 4,194,313), being the weighted average number of ordinary shares after an adjustment of nil shares (2019: 21,554 shares) in relation to share options.

8. A copy of this half yearly report is being sent to shareholders and is available for inspection at the company's offices at Holders Technology (UK) Ltd., Units 1-4, Block 9, Tweedbank Industrial Estate, Galashiels TD1 3RS and via its website www.holdersgroup.com.