22 Jul 2010 07:00
Holders Technology plc Providers of specialised materials, equipment and services to the electronics industry Half yearly results for the 6 months ended 31 May 2010
Holders Technology plc (AIM: HDT) announces its unaudited half yearly results for the 6 month period ended 31 May 2010.
HighlightsHalf year ended 31 May 2010 2009Revenue £7.1m £6.5mPBT £0.1m (£0.6m)Operating cash flow before tax (£0.8m) (£0.4m)Earnings per share 1.78p (11.61p)Interim dividend per share 2.10p 2.10pNet assets per share at 31 May 138p 138p
Chairman's statement
The first half of the current year showed a marked recovery when compared tothe first half of the preceding year and the picture for the PCB industry inEurope has shown a general improvement.
Further to reduce costs in order to meet competitive pressures we have continued to seek to source more product lines from China and the Far East. This has inevitably lengthened our supply chain and has required a significant increase in working capital in the period.
The benefits we are seeing from these new sourcing arrangements and our continued drive to contain other costs lead us to believe that, providing there is no marked downturn in market demand, the PCB element of our business will perform in line with our expectations for the balance of the current year.
In my statement accompanying the Report and Accounts for the year to 30thNovember 2009 I commented on our acquisition of JK Components Limited, adistributor of Light Emitting Diodes (LED's) and stated we would be looking tobuild a platform to enable us to serve both the UK and the wider Europeanmarket. It is pleasing to be able to report that encouraging progress towardsthat goal is being made. Whilst a substantial investment programme continuesto be required, the business is now on a stronger footing and a consistentincrease in monthly sales is being achieved. We are currently undertaking afurther extension to our activities in this area and we continue to believethat we will be able to demonstrate the benefits of this in the second half ofthe current year.
In summary whilst fully aware of global economic uncertainties we are cautiously optimistic that the year as a whole will show progress in our core PCB business and demonstrate the validity of our decision to widen our activities into the LED market.
Against this background we have considered it appropriate to declare an unchanged interim dividend of 2.1p for the current year, which will be paid on 5 October 2010 to shareholders who are on the register on 10 September 2010.
The half yearly report was approved by the board on 21 July 2010.
Condensed consolidated statement of comprehensive income for the half year ended 31 May 2010 (Unaudited)
Half year Half year Full year ended 31 ended 31 ended 30 May 2010 May 2009 Nov 2009 Notes £'000 £'000 £'000Revenue - continuing operations 3 6,880 6,537 12,966- acquisitions 7 250 - - 7,130 6,537 12,966Cost of sales (5,235) (5,138) (9,770)Gross profit 1,895 1,399 3,196Distribution costs (207) (109) (301)Administrative expenses (1,554) (1,744) (3,044)Fundamental restructuring - (176) (176)Other operating income (15) (4) (90)Operating profit 119 (634) (415)Finance income 3 39 20Finance expense (1) (13) (13)Profit before taxation 121 (608) (408)Taxation 4 (50) 104 9Profit after taxation 71 (504) (399)Attributable to: Equity shareholders of the company 74 (483) (375)Non-controlling interest (3) (21) ((24)) 71 (504) (399) Earnings/(Loss) per share 6 1.78p (11.61)p (9.52)pDiluted earnings/(loss) per 6 1.78p (11.61)p (9.52)pshare
Consolidated statement of recognised income and expense for the half year ended 31 May 2010 (Unaudited)
Half year Half year Full year ended 31 ended 31 ended 30 May 2010 May 2009 Nov 2009 £'000 £'000 £'000Exchange differences ontranslation of foreignoperations (120) 167 288(Loss)/Profit for the period 71 (504) (399) (49) (337) (111)Attributable to:Equity shareholders of the (90) (301) (64)companyNon-controlling interest 41 (36) (47) (49) (337) (111) Condensed consolidated statement of financial positionat 31 May 2010 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2010 May 2009 Nov 2009 Notes £'000 £'000 £'000AssetsNon-current assets Goodwill 346 204 207 Property, plant and 603 614 655 equipment Deferred tax 30 29 29 979 847 891 Current assets Inventories 2,154 2,829 1,866 Trade and other receivables 3,027 2,105 2,301 Current tax 73 232 69 Cash and cash equivalents 1,028 1,179 2,095 6,282 6,345 6,331Liabilities
Current liabilities
Trade and other payables (1,292) (1,148) (1,107) Borrowings (3) (157) - Current tax (62) (2) (35) Other liabilities (8) - - (1,365) (1,307) (1,142)
Net current assets 4,917 5,038 5,189
Non-current liabilities
Finance leases (3) - - Retirement benefit liability (133) (165) (176) Deferred tax liabilities (7) - (8) Other liabilities (28) - - (171) (165) (184) Net assets 5,725 5,720 5,896
Shareholders' equity
Share capital 416 416 416 Share premium account 1,531 1,531 1,531 Capital redemption reserve 1 1 1 Retained earnings 2,924 2,963 2,972 Cumulative translation 667 702 831 adjustmentEquity attributable to the equityshareholders of the company 5,539 5,613
5,751
Non-controlling interest in equity 186 107
145 5,725 5,720 5,896 Consolidated cash flow statementfor the half year ended 31 May 2010 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2010 May 2009 Nov 2009 £'000 £'000 £'000
Cash flows from operating activities
Operating profit 119 (634) (415) Share-based payment charge/(credit) 6 6 (10) Depreciation 83 92 180 Currency translation (155) 165 182 Loss on sale of property, plant and 15 4 13 equipment (Increase)/Decrease in inventories (188) (21) 942 (Increase)/Decrease in trade and (596) 595 410 other receivables (Decrease)/Increase in trade and (117) (517) (517) other payables Cash (used in)/generated from (833) (310) 785 operations Corporation tax (paid)/received (28) (58) 51 Net cash generated (used in)/from (861) (368) 836 operations
Cash flows from investing activities
Net borrowings acquired with (42) - - subsidiary undertaking Purchase of property, plant and (53) (52) (168) equipment Proceeds from sale of property, plant and equipment 15 7 - Interest received - 20 20 Net cash used in investing activities (80) (25) (148)
Cash flows from financing activities
Interest paid (1) (13) (13) Equity dividends paid (128) (128) (211) Net cash used in financing activities (129) (141) (224)
Net change in cash and cash equivalents (1,070) (534)
464 Cash and cash equivalents at start of 2,095 1,537 1,537 period Effect of foreign exchange rates 3 19 94
Cash and cash equivalents at end of period 1,028 1,022 2,095
Consolidated statement of changes in equityfor the half year ended 31 May 2010 (Unaudited)Group Capital Cumulative Share- Non- Share Share redemption
translation Retained holders' controlling Total
capital premium reserve
adjustment earnings Equity interest equity
£'000 £'000 £'000
£'000 £'000 £'000 £'000 £'000
Balance at 1 December 2008 416 1,531 1 520 3,568 6,036 130 6,166(Loss) for the period - - - - (483) (483) (21) (504)Dividends - - - - (128) (128) - (128)Currency translation differences - - - 182 - 182 (15) 167Investment by non-controlling interest - - -
- - - 13 13Share-based payment credit - - - - 6 6 - 6Balance at 31 May 2009 416 1,531 1 702 2,963 5,613 107 5,720
Profit/(loss) for the period - - - - 108 108 (3) 105Dividends - - - - (83) (83) - (83)Currency translation differences - - - 129 - 129 (8) 121Investment by non-controlling interest - - - - - - 49 49Share-based payment charge - - - - (16) (16) - (16)Balance at 30 November 2009 416 1,531 1 831 2,972 5,751 145 5,896Profit/(loss) for the period - - - - 74 74 (3) 71Dividends - - - - (128) (128) - (128)Currency translation differences - - - (164) - (164) 44 (120)Share-based payment credit - - - - 6 6 - 6Balance at 31 May 2010 416 1,531 1 667 2,924 5,539 186 5,725Notes:1. General information
Holders Technology plc is incorporated in the United Kingdom under the Companies Act. The principal activity of the group is to provide materials, equipment and services to the electronics industry.
2. Basis of preparation
The condensed consolidated half year financial statements have been preparedin accordance with the AIM Rules for Companies and prepared on a basisconsistent with International Financial Reporting Standards ("IFRS") asadopted by the EU and the accounting policies set out in the group's financialstatements for the year ended 30 November 2009.
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 2010 and 31 May 2009.
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 2009 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 s237(2) of s237(3) of the Companies Act 1985.
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 makejudgements, estimates and assumptions that affect the application of policiesand reported amounts of assets and liabilities, income and expenses. Actualresults 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 21 July 2010.
3. Segmental information
The primary format used for segmental reporting is by geographic segment, asthe group operates in only one business segment. Segment results, assets andliabilities include items directly attributable to a segment as well as thosethat can be allocated on a reasonable basis. The group operates in the UK,Europe and Asia.Analysis by geographic segmentfor the half year ended 31 May UK Rest of Europe Asia Eliminations Total 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009 £'000 £'000 £'000 £'000 £'000 £'000
£'000 £'000 £'000 £'000
Revenue 2,705 2,679 4,046 3,430 379 428 - - 7,130 6,537Inter-segmentrevenue 19 38 68 197 20 20 (107) (255) - - ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ 2,724 2,717 4,114 3,627 399 448 (107) (255) 7,130 6,537 Segment result 53 23 73 (598) (7) (59) - - 119 (634) Finance income 3 39Finance expenses (1) (13) ______ ______Profit beforetaxation 121 (608)Taxation (50) 104 ______ ______Profit for the year from continuingoperations
71 (504)
______ ______for the year ended 30 November 2009 Rest of UK Europe Asia Eliminations Total £'000 £'000 £'000 £'000 £'000 Revenue 5,218 6,788 960 - 12,966Inter-segmentrevenue 56 235 41 (332) - ______ ______ ______ ______ ______ 5,274 7,023 1,001 (332) 12,966 Segment result 199 (567) (47) - (415) Finance income 20Finance expenses (13) ______Profit beforetaxation (408)Taxation 9 _________Profit for the year from continuingoperations (399) ______4. The tax credit/(charge) for the six months ended 31 May 2010 is calculatedbased on the tax rates applicable in the country in which each companyoperates. Taxation includes a (charge)/credit of( £27,000) (2009: £120,000)relating to overseas operations.
5. A second interim dividend of 3.25p per share on the total issued share capital of 4,159,551 10p ordinary shares, excluding treasury shares, was paid on 31 March 2010 in respect of the year ended 30 November 2009.
An interim dividend payment of 2.1p per share (2009: 2.1p per share) will bepayable on 5 October 2010 to shareholders on the register at 10 September2010. The shares will go ex-dividend on 8 September 2010. The interim dividendwas not approved by the board at 31 May 2010 and accordingly, has not beenincluded as a liability as at that date.
6. The basic earnings per share are based on the profit for the period of £74,000 (2009: loss £483,000) and on ordinary shares 4,159,551 (2009: 4,159,551), the weighted average number of shares in issue during the year. Diluted earnings per share are based on 4,159,551 ordinary shares (2009: 4,159,551), being the weighted average number of ordinary shares after an adjustment of nil shares (2009: nil) in relation to share options.
7. Acquisition
On 21 December 2009, the company acquired 100% of the share capital of J KComponents Limited (JK). JK is a distributor of components to the electronicsindustry. The consideration for the acquisition was £1 plus deferredconsideration representing 50%, 30% and 15% respectively of the net profitsfor each of the three years following the date of acquisition. The followingsets out the effect on the consolidated balance sheet: Balance sheet Provisional Provisional of acquired fair value fair value business adjustment of acquired business £'000 £'000 £'000 Property, plant and equipment 13 - 13Inventories 100 - 100Trade and other receivables 130 - 130Cash and cash equivalents 5 - 5Trade and other payables (306) - (306)Obligations under finance leases (6) - (6)Overdrafts (43) - (43)Net liabilities acquired (107) - (107)
Fair value of deferred consideration
36
Goodwill arising on acquisition
143
Costs of £26,000 relating to the acquisition have been charged to the income statement in the period ending 31 May 2010.
8. A copy of this half yearly report is being sent to shareholders and is available for inspection at the company's registered office, Devonshire House, Manor Way, Borehamwood, Herts WD6 1QQ and via its website www.holderstechnology.com.
For further information, contact:
Holders Technology Plc 020 8731 4336Mr Rudi Weinreich, Chairman and Chief ExecutiveMr Jim Shawyer, Group Finance Director
Astaire Securities Plc - Nomad & Broker 020 7492 4750 Shane Gallwey
Website www.holderstechnology.com
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