21 Jul 2009 08:17
Holders Technology plc
Providers of specialised materials, equipment and services to the electronics
industry Half yearly results for the 6 months ended 31 May 2009
Holders Technology plc announces its unaudited half yearly results for the 6 month period ended 31 May 2009.
Chairman's statement
The first half of the current year proved to be extremely difficult for yourcompany. Our UK subsidiary which serves a PCB market with a bias towardsaerospace and industrial electronics, very creditably, achieved some modestgrowth in turnover in the period but this was not the case elsewhere in Europe.The German PCB market is particularly dependent on the automotive and capitalgoods sectors, both of which have seen a severe contraction in output. TheEuropean PCB market has contracted dramatically and inevitably our operationsin these markets have suffered marked reductions in turnover.The combination of severely reduced sales volumes and adverse movements inexchange rates resulted in reduced margins which we were unable fully to offsetby further reducing our overhead costs during the period. The severe downturnin the European PCB market has slowed the take up of the new products we areseeking to introduce but we have seen some encouraging signs that we will beable to secure market positions for these new lines when markets settle.It remains our policy whenever possible to insure our trade receivables butthis is becoming increasingly difficult to do as insurance cover has beenwithdrawn for some of the larger PCB manufacturers. We have sought to manageour exposure but we have made provision for a bad debt of 135,000 in respectof a European customer.
Against this background we have finalised plans further to rationalise our European activities by integrating our Dutch operations into our German facility. This will enable us significantly to reduce our fixed costs and with some modest recovery in sales volumes we expect these activities to achieve profitability. Inevitably the costs of making these necessary changes are significant and have adversely impacted the results for the half year.
We have reviewed our Chinese activities and have agreed measures to reduce certain costs within the two entities involved. We will continue to monitor the overall activity closely.
Shareholders should note that our balance sheet and cash position remains strong and we intend that this will continue to be the case. As a board we have, we believe, done all we can to protect the company during a very challenging time and all board members have agreed to salary reductions as a sign of commitment to restoring the financial results to more acceptable levels.
It remains very difficult to predict the extent and timing of recovery in thevarious markets which we address; our feeling is that while we are not seeingfurther weakening we have yet clearly to see signs of recovery. I have tried toset out the steps we are taking to deal with the position; we believe thatthese will be of significant benefit to the second half of the currentfinancial year. Against this background and given our strong cash position wehave decided to maintain the interim dividend but we will carefully considerthe results for the second half of the current year and the prospects for thenext financial year when making our recommendation regarding the final dividendfor the current year.The half yearly report was approved by the board on 20 July 2009 and signed onits behalf by:Rudolf W. Weinreich Chairman and Chief Executive 20 July 2009
Consolidated income statement
for the half year ended 31 May 2009 (Unaudited)
Half year Half year Full-year ended 31 ended 31 ended 30 May 2009 May 2008 Nov 2008 '000 '000 '000 Notes Revenue 1 6,537 8,783 17,481 Cost of sales (5,138) (6,572) (13,057) Gross profit 1,399 2,211 4,424 Distribution costs (109) (155) (427) Administrative expenses (1,744) (1,636) (3,285) Fundamental restructuring (176) - (64) Impairment of goodwill - - (100) Impairment of investment in - - (51)associates Other operating income (4) - 11 Operating profit (634) 420 508 Finance income 39 18 43 Finance expense (13) (13) (38) Share of loss of associate - (3) - Profit before taxation (608) 422 513 Taxation 2 104 (118) (243) Profit after taxation (504) 304 270 Attributable to:
Equity shareholders of the company (483) 317
322 Minority interest (21) (13) (52) (504) 304 270 (Loss)/Earnings per share 5 (11.61)p 8.10p 8.21p Diluted (loss)/earnings per 5 (11.61)p 8.10p 8.21pshare
Consolidated statement of recognised income and expense
for the half year ended 31 May 2009 (Unaudited)
Half year Half year Full-year ended 31 ended 31 ended 30 May 2009 May 2008 Nov 2008 GBP'000 '000 '000
Exchange differences on translation 167 349
568of foreign operations (Loss)/Profit for the period (504) 304 270 (337) 653 838 Attributable to: Equity shareholders of the (301) 650 805company Minority interest (36) 3 33 (337) 653 838 Consolidated balance sheetat 31 May 2009 (Unaudited) Half year Half year Full-year ended 31 ended 31 ended 30 May 2009 May 2008 Nov 2008 '000 '000 '000 Notes Assets Non-current assets Goodwill 204 403 201 Property, plant and 614 693 651 equipment Investments in associates - 26 - Deferred tax 29 - 31 847 1,122 883 Current assets Inventories 2,829 3,150 2,808
Trade and other receivables 2,105 2,870
2,700 Current tax 232 - 99
Cash and cash equivalents 1,179 1,039
1,774 6,345 7,059 7,381 Liabilities Current liabilities Trade and other payables (1,148) (1,552) (1,663) Borrowings (157) (216) (237) Current tax (2) (109) (33) (1,307) (1,877) (1,933) Net current assets 5,038 5,182 5,448 Non-current liabilities Retirement benefit (165) (149) (165) liability Deferred consideration - (104) - (165) (253) (165) Net assets 5,720 6,051 6,166 Shareholders' equity Share capital 3 416 416 416 Share premium account 3 1,531 1,531 1,531 Capital redemption reserve 3 1 1 1 Retained earnings 3 2,963 3,633 3,568 Cumulative translation 3 702 370 520 adjustment Equity attributable to the 5,613 5,951 6,036equity shareholders of the company
Minority interests in equity 3 107 100
130 5,720 6,051 6,166
Consolidated cash flow statement
for the half year ended 31 May 2009 (Unaudited)
Half year Half year Full-year ended 31 ended 31 ended 30 May 2009 May 2008 Nov 2008 '000 '000 '000
Cash flows from operating activities
Operating profit (634) 420 508 Share-based payment charge 6 12 12 Depreciation 92 92 184 Impairment of goodwill - - 100 Impairment of investment in - - 51 associates Currency translation 165 301 293 (Gain)/loss on sale of property, 4 - 2 plant and equipment
(Increase)/Decrease in inventories (21) (505) (140)
Decrease/(Increase) in trade and 595 (218) (86) other receivables (Decrease)/Increase in trade and (517) 163 349 other payables Cash (used in)/generated from (310) 265
1,273 operations Corporation tax paid (58) (299) (566) Net cash generated (used in)/from (368) (34) 707 operations
Cash flows from investing activities Increase in investment in associate - -
(23)
Purchase of property, plant and (52) (123)
(132) equipment Proceeds from sale of property, plant 7 1 24 and equipment Interest received 20 18 43 Net cash generated used in investing (25) (104) (88) activities
Cash flows from financing activities Proceeds from exercise of employee - - 13 share options Interest paid (13) (13) (38) Equity dividends paid (128) (127) (210) Finance lease principal repayments - - -
Net cash used in financing activities (141) (140) (235)
Net change in cash and cash equivalents (534) (278)
384
Cash and cash equivalents at start of 1,537 1,101 1,101 period Effect of foreign exchange rates 19 -
52
Cash and cash equivalents at end of 1,022 823 1,537period Notes: 1. Basis of preparation The consolidated half year financial statements have been prepared inaccordance with the AIM Rules for Companies and prepared on a basis consistentwith International Financial Reporting Standards ("IFRS") as adopted by the EUand the accounting policies set out in the group's financial statements for theyear ended 30 November 2008.The consolidated half year financial statements are unaudited and include alladjustments which management considers necessary for a fair presentation of thegroup's financial position, operating results and cash flows for the 6 monthperiods ended 31 May 2009 and 31 May 2008.The half year financial statements do not constitute statutory accounts asdefined by Section 434 of the Companies Act 2006. A copy of the group'sfinancial statements for the year ended 30 November 2008 prepared in accordancewith 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 didnot 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 20 July 2009.
2. The tax credit/(charge) for the six months ended 31 May 2009 is calculated
based on the tax rates applicable in the country in which each company
operates. Taxation includes a credit/(charge) of 120,000 (2008: (54,000))
relating to overseas operations.
3. 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 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000GBP'000 Balance at 1 416 1,531 1 520 3,568 6,036 130 6,166December 2008 Profit/(loss) for - - - - (483) (483) (21) (504)the period Dividends - - - - (128) (128) - (128) Currency - - - 182 - 182 (15) 167translation differences Investment by - - - - - - 13 13minority interest Share-based payment - - - - 6 6 - 6credit Balance at 31 May 416 1,531 1 702 2,963 5,613 107 5,7202009
4. A final dividend of 3.25p per share on the total issued share capital,
excluding treasury shares, of 3,939,551 10p ordinary shares was paid on 19
May 2009 in respect of the year ended 30 November 2008.
An interim dividend payment of 2.1p per share (2008: 2.1p per share) will bepayable on 6 October 2009 to shareholders on the register at 11 September 2009.The shares will go ex-dividend on 9 September 2009. The interim dividend wasnot approved by the board at 31 May 2009 and accordingly, has not been includedas a liability as at that date.
5. The basic earnings per share are based on the loss for the period of
483,000 (2008: profit 317,000) and on ordinary shares 3,939,551 (2008:
3,915,551), the weighted average number of shares in issue during the year.
Diluted earnings per share are based on 3,939,551 ordinary shares (2008:
3,914,551), being the weighted average number of ordinary shares after an
adjustment of nil shares (2008: nil) in relation to share options.
6. 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 Plc020 8731 4336
Mr Rudi Weinreich, Chairman and Chief Executive
Mr Jim Shawyer, Group Finance Director
AstaireSecurities Plc - Nomad & Broker 020 7448 4400
Shane Gallwey
Website www.holderstechnology.com
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