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Holders Technology plc

Half Yearly Report 2017

Specialised PCB Materials, LED Components, and Lighting Solutions

Highlights

Holders Technology plc supplies specialty laminates and materials for printed circuit board manufacturers ("PCB"), and operates as an LED solutions provider to the lighting and industrial markets.

Unaudited results for the period ended 31 May are summarised as follows:

Contents

1. Chairman's statement

2. Consolidated income statement

2. Consolidated statement of comprehensive income

3. Consolidated statement of changes in equity

4. Consolidated balance sheet

5. Consolidated cash flow statement

6. Notes

Chairman's statement

Half year ended 31 May 2017

These interim results show an improvement as compared to the equivalent period in 2016. Revenue increased by 2.2% to £5.8m (2016: £5.7m) and the operating loss before restructuring costs reduced from £68,000 to £48,000 (there were no restructuring costs in 2017). The group result before taxation improved from a £171,000 loss to a £53,000 loss. Group revenues were increased by the strength of the Euro during the period.

PCB

PCB sales in the period increased by 14% from £4,014,000 in 2016 to £4,577,000, and PCB margins increased by 2.8% to 23.9%. Our continuing PCB activities, in the UK and Germany, benefitted from improved market conditions and achieved an increase in sales in the period. Both divisions saw some additional benefit from recently introduced products and a continuing gain from production efficiencies. We continue to invest in improvements both to our IT systems and production equipment.

Following the restructuring process announced last year, PCB overheads as a percentage of sales were reduced by 3.0% to 17.2%. Overall our PCB activities recorded a profit of £157,000 (2016: loss £99,000).

LED

I announced in my previous report accompanying the 2016 Report & Accounts, that the Opteon Germany division had been closed, and the NRGstar results were disappointing. The activities of the NRGstar division are being discontinued. This has inevitably resulted in lower total LED sales as compared to the 2016 interim figures. We expect to see the benefit of these measures in the second half of the current year.

Taken together, the continuing LED divisions achieved improved margins during the period and experienced encouraging customer reaction to recently introduced new products in the smart lighting field.

Total LED revenue for the period was £1,210,000 (2016: £1,648,000). Margins decreased slightly from 32.3% to 31.4%. The overall LED result was a £194,000 loss (2016: £61,000 loss).

Summary

PCB activities, which comprise some 80% of the Group, were ahead of our expectations in the first half and should be well placed for the balance of the year. We expect our LED divisions in the second half of the year to see the benefit of a lower overall cost base and a positive impact from the smart lighting technologies we are now able to offer.

Rudolf W. Weinreich Holders Technology plc

Executive Chairman 27-28 Eastcastle Street

London

W1W 8HD

Consolidated income statement

for the half year ended 31 May 2017 (Unaudited)

Consolidated statement of comprehensive income

for the half year ended 31 May 2017 (Unaudited)

Consolidated statement of changes in equity

for the half year ended 31 May 2017 (Unaudited)

Consolidated balance sheet

at 31 May 2017 (Unaudited)

Consolidated cash flow statement

for the half year ended 31 May 2017 (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 2016.

The condensed consolidated 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 2016 and 31 May 2017.

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 2016 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 27 July 2017.

3. Segmental information

Management currently identifies two operating segments:

- PCB, which distributes materials, equipment and supplies to the PCB industry.

- LED, which distributes LED-related components and lighting solutions to the lighting industry.

Notes (continued):

3. Segmental information (continued)

Analysis by operating segment

for the half year ended 31 May

4. The tax provision for the six months ended 31 May 2017 is calculated based on the tax rates applicable in the country in which each company operates. Taxation includes £12,000 charge (2016: £nil) relating to overseas operations.

5. A final dividend of 0.25p per share on the total issued share capital of 4,159,551 10p ordinary shares, excluding treasury shares, was paid on 23 May 2017 in respect of the year ended 30 November 2016.

An interim dividend payment of 0.25p per share (2016: 0.25p per share) will be payable on 10 October 2017 to shareholders on the register at 15 September 2017. The shares will go ex-dividend on 14 September 2017. The interim dividend had not been approved by the board at 31 May 2017 and accordingly, has not been included as a liability as at that date.

6. The basic earnings per share for continuing operations are based on the loss for the period of £65,000 (2016: loss £171,000) and on 4,159,551 ordinary shares (2016: 3,968,076), the weighted average number of shares in issue during the period. Diluted earnings per share for continuing operations are based on 4,159,551 ordinary shares (2016: 3,968,076), being the weighted average number of ordinary shares after an adjustment of nil shares (2016: nil) in relation to share options.

7. 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.