21 Jul 2011 07:00
Holders Technology plc
Providers of specialised materials, equipment and components to the electronics
and lighting industries Half yearly results for the 6 months ended 31 May 2011
Holders Technology plc (AIM: HDT) announces its unaudited half yearly results for the 6 month period ended 31 May 2011.
HighlightsHalf year ended 31 May 2011 2010 Revenue £10.1m £7.1m PBT £0.3m £0.1m Operating cash flow before tax (£0.7m) (£0.8m) Earnings per share 5.58p 1.88p Interim dividend per share 2.10p 2.10p Net assets per share at 31 May 155p 138p
Chairman's statement
The first half of the year saw strong growth in both our Printed Circuit Board (PCB) business and in our new Light Emitting Diode (LED) activities.
PCB operations
Our German operations enjoyed robust demand from established larger customers. This was reinforced by an increasing level of interest in the new materials we have introduced over the last two years. PCB operations in the UK were stable overall with somewhat weaker demand from certain customers being offset by the increased take up of new materials and products.
LED operations
As I set out in my statement accompanying the Report and Accounts for the year ending 30th November 2010, we planned that the current year would be one of significant investment in our new LED activities. This programme is in hand and the initial results of this are now being seen. Our UK operations, having the advantage of an initial base on which to build, have progressed faster than our European activities and we have seen a substantial growth in UK sales of LED products. In Europe we have completed the necessary changes to our systems and the training of existing staff; a programme of augmenting the sales teams is in hand and will continue over the coming months.
The combination of significant growth in our PCB activities coupled with the necessary process of building stocks to support the LED business in both the UK and Germany has required a marked increase in working capital. Our policy has always been to take a conservative approach to funding our activities and we have ensured that the required investment has been covered by utilising our cash reserves and a modest level of bank debt.
Jim Shawyer has served the group as Financial Director for over ten years but due to a change in personal circumstances he has indicated his desire to step down from this role. Jim is working with the rest of the board to identify a suitable successor and will continue, post an appointment being made, to support the group in a consultancy role.
While we remain conscious of the current economic uncertainties we believe we are well placed to defend our position in the PCB markets and, with the LED lighting market expanding, to achieve significant growth in our sector of this market.
The half yearly report was approved by the board on 20 July 2011 and signed onits behalf by:Rudolf W. Weinreich Holders Technology plc Executive Chairman Devonshire House Manor Way Borehamwood Hertfordshire WD6 1QQ 20 July 2011 Consolidated income statementfor the half year ended 31 May 2011 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2011 May 2010 Nov 2010 Notes £'000 £'000 £'000
Revenue - continuing operations 3 10,153 7,130 16,314
Cost of sales (7,722) (5,235) (12,116) Gross profit 2,431 1,895 4,198 Distribution costs (227) (207) (390) Administrative expenses (1,920) (1,554) (3,273) Impairment of goodwill - (57) Acquisition costs - - (26) Other operating income/ 15 (15) 39(expenses) Operating profit 299 119 491 Finance income 6 3 - Finance costs (1) (1) (1) Profit before taxation 304 121 490 Tax expense 4 (90) (50) (59) Profit for the period 214 71 431 Profit for the period attributable to: Owners of the parent 220 74 507 Non-controlling interests (6) (3) (76) Profit for the period 214 71 431 Total and continuing Earnings per share 6 5.58p 1.88p 12.87p Diluted earnings per share 6 5.54p 1.88p 12.87pConsolidated statement of comprehensive incomefor the half year ended 31 May 2011 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2011 May 2010 Nov 2010 £'000 £'000 £'000 Profit for the period 214 71 431 Exchange differences on (180)translation of foreign operations 86 (120) 300 (49) 251 Attributable to: Owners of the parent 317 (90) 305 Non-controlling interests (17) 41 (54) 300 (49) 251 Consolidated statement of changes in equityfor the half year ended 31 May 2011 (Unaudited) Share Share Capital Translation Retained Total Non- Total capital premium Redemptin reserve earnings attributabe controlling equity £'000 £'000 Reserve £'000 £'000 to owners interest £'000 £'000 of parent £'000 £'000 Balance at 1 December 2009 416 1,531 1 831 2,972 5,751 145 5,896 Dividends - - - - (211) (211) - (211) Employee share-based - - - - (4) (4) - (4)payment options Transactions with - - - - (215) (215) - (215)owners Profit/(Loss) for - - - - 507 507 (76) 431the period Exchange differences - - - (202) - (202) 22 180on translating foreign operations Total comprehensive (202) 507 305 (54) 251income for the year Balance at 30 416 1,531 1 629 3,264 5,841 91 5,932November 2010 Dividends - - - - (128) (128) - (128) Employee share-based - - - - 6 6 - 6payment options Transactions with - - - - (122) (122) - (122)owners Profit/(loss) for - - - - 220 220 (6) 214the period Currency translation - - - 97 - 97 (11) 86differences Total comprehensive 97 220 317 (17) 300income for the period Balance at 31 May 416 1,531 1 726 3,362 6,036 74 6,1102011 Consolidated balance sheetat 31 May 2011 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2011 May 2010 Nov 2010 £'000 £'000 £'000 Assets Non-current assets Goodwill 319 346 318 Property, plant and equipment 534 603 582 Deferred tax assets 73 30 73 926 979 973 Current assets Inventories 4,229 2,154 3,826 Trade and other receivables 3,475 3,027 2,721 Current tax 19 73 56 Cash and cash equivalents 336 1,028 888 8,059 6,282 7,491 Liabilities Current liabilities Overdrafts (323) - - Trade and other payables (2,152) (1,221) (2,182) Borrowings (36) (82) (52) Current tax liabilities (121) (62) (55) (2,632) (1,365) (2,289) Net current assets 5,427 4,917 5,202 Non-current liabilities Borrowings - (3) (4) Retirement benefit liability (195) (133) (192) Deferred tax liabilities (3) (7) (2) Other liabilities (45) (28) (45) (243) (171) (243) Net assets 6,110 5,725 5,932 Shareholders' equity Share capital 416 416 416 Share premium account 1,531 1,531 1,531 Capital redemption reserve 1 1 1 Retained earnings 3,362 2,924 3,264 Cumulative translation 726 667 629 adjustment Equity attributable to the shareholders of the parent 6,036 5,539 5,841 Non-controlling interest 74 186 91 6,110 5,725 5,932 Consolidated cash flow statementfor the half year ended 31 May 2011 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2011 May 2010 Nov 2010 £'000 £'000 £'000 Cash flows from operating activities Operating profit 299 119 491 Share-based payment charge/(credit) 6 6 (4) Depreciation 71 83 152 Impairment of goodwill - - 57 Currency translation 91 (155) (137) (Gain)/loss on sale of property, plant (15) 15 16 and equipment (Increase)/decrease in inventories (403) (188) (1,870) (Increase)/decrease in trade and other (754) (596) (274) receivables (Decrease)/increase in trade and other (38) (117) 867 payables Cash used in operations (743) (833) (702) Corporation tax (paid)/received 14 (28) (75) Net cash used in operations (729) (861) (777) Cash flows from investing activities Net borrowings acquired with subsidiary - (44) (44) undertaking Purchase of property, plant and (23) (51) (118) equipment Proceeds from sale of property, plant and equipment 20 15 21 Interest received - - - Net cash used in investing activities (3) (80) (141) Cash flows from financing activities Interest paid (1) (1) (1) Loan repayments (19) - (26) Finance lease repayments (1) - (3) Equity dividends paid (128) (128) (211) Net cash used in financing activities (149) (129) (241)
Net change in cash and cash equivalents (881) (1,070) (1,159)
Cash and cash equivalents at start of 888 2,095 2,095 period Effect of foreign exchange rates 6 3 (48)
Cash and cash equivalents at end of period 13 1,028 888
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, equipment and components to the electronics industry.
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 2010.
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 2011 and 31 May 2010.
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 2010 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 July 2011.
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 products to the lighting industry. Analysis by operating segmentfor the half year ended 31 May PCB LED Other Total 2011 2010 2011 2010 2011 2010 2011 2010 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue 8,742 6,880 1,411 250 - - 10,153 7,130 Cost of sales (6,503) (5,055) (1,219) (180) - - (7,722) (5,235) Gross profit 2,239 1,825 192 70 - - 2,431 1,895 Distribution costs (204) (191) (23) (16) - - (227) (207) Administration expenses (1,486) (1,371) (451) (76) 17 (81) (1,920) (1,528) Acquisition costs - - - (26) - - - (26) Other operating income/ 15 (15) - - - - 15 (15)(expenses) Segment operating profit 564 248 (282) (48) 17 (81) 299 119
4. The tax charge for the six months ended 31 May 2011 is calculated based on
the tax rates applicable in the country in which each company operates.
Taxation includes a charge of £16,000 (2010: £27,000) relating to overseas
operations.
5. A final dividend of 3.25p per share on the total issued share capital of
3,939,551 10p ordinary shares, excluding treasury shares, was paid on 24
May 2011 in respect of the year ended 30 November 2010.
An interim dividend payment of 2.1p per share (2010: 2.1p per share) will be payable on 4 October 2011 to shareholders on the register at 9 September 2011. The shares will go ex-dividend on 7 September 2011. The interim dividend had not yet been approved by the board at 31 May 2011 and accordingly, has not been included as a liability as at that date.
6. The basic earnings per share are based on the profit for the period of £
220,000 (2010: £74,000) and on ordinary shares 3,939,551 (2010: 3,939,551), the weighted average number of shares in issue during the year. Diluted earnings per share are based on 3,972,169 ordinary shares (2010: 3,939,551), being the weighted average number of ordinary shares after an adjustment of 32,618 shares (2010: 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 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 4336 Rudi Weinreich, Executive Chairman Victoria Blaisdell, Group Managing Director Jim Shawyer, Group Finance Director
Northland Capital Partners Limited- Nomad & Broker 020 7796 8800
Shane Gallwey
Website www.holderstechnology.com
XLON