19 Jul 2012 07:00
Holders Technology plc Providers of specialised materials, components and solutions to the electronics and lighting industries Half yearly results for the 6 months ended 31 May 2012
Holders Technology plc (AIM: HDT) announces its unaudited half yearly results for the 6 month period ended 31 May 2012.
Highlights Half year ended 31 May 2012 2011Revenue £8.0m £10.1m(Loss)/ Profit before tax (£0.1m) £0.3mOperating cash flow before tax £0.8m (£0.7m)Earnings per share (1.98p) 5.58pInterim dividend per share 1.00p 2.10pNet assets per share at 31 May 147p 155p
Chairman's statement
The results for the six months to 31st May 2012 were below our expectations for the period.
PCB operations
The first half was very adversely impacted by the continuingeconomic uncertainties in the European PCB market, particularly in the openingmonths of the period. The latter months saw some recovery and overall our PCBactivities recorded a broadly breakeven position.
LED operations
The goal we set for our LED activities in the period was to continue building this area of our business and progress towards this was made. Whilst preserving profitability in UK operations we are seeking to further widen both the customer base of the UK business and the range of solutions it is able to offer. Progress continues to be made in regard to both of these objectives.
The task for our LED division in Europe is both to widen the customer base and to extend the range of solutions whilst moving towards breakeven. Progress towards this latter objective continues to be made with improvements in the qualified order prospects pipeline providing particular encouragement for potential future growth.
As a Group we remain committed to rigorous control of both costs and working capital and we continue to achieve our objectives in this regard. We do this to ensure we remain able to invest in the LED segment of our business. Financial flexibility also enables us periodically to purchase certain commodity products in larger lots thus assisting our efforts to maintain acceptable margins.
It has been, and continues to be, our policy to ensure that dividends paid reflect the success of the company. Given the loss in the first half we believe it is appropriate to declare an interim dividend of 1p per share (2011: 2.10p).
I started this statement by saying that the results for this half year were below our initial expectations. We have thoroughly reviewed the prospects for the second half of the year, and while we do expect an improvement in trading which will offset the shortfall in the first half, it appears probable that the outturn for the full year will be below market expectation.
We are operating in difficult conditions but as a board we continue to believe that we are making progress in strengthening the Group so as to be able to benefit when more settled times return.
Rudolf W. Weinreich Holders Technology plcExecutive Chairman Elstree House Elstree Way Borehamwood18 July 2012 Hertfordshire WD6 1SDConsolidated income statementfor the half year ended 31 May 2012 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2012 May 2011 Nov 2011 Notes £'000 £'000 £'000
Revenue - continuing operations 3 7,980 10,153 19,636 Cost of sales
(6,045) (7,722) (15,127)Gross profit 1,935 2,431 4,509Distribution costs (199) (227) (404)Administrative expenses (1,835) (1,920) (3,828)Other operating income/(expenses) - 15 98Operating profit (99) 299 375Finance income 1 6 -Finance costs (1) (1) (12)Profit before taxation (99) 304 363Taxation 4 15 (90) (123)(Loss)/ profit for the period (84) 214 240(Loss)/ profit for the periodattributable to:Owners of the parent (78) 220 264Non-controlling interests (6) (6) (24)(Loss)/ profit for the period (84) 214 240Total and continuingEarnings per share 6 (1.98p) 5.58p 6.70pDiluted earnings per share 6 (1.90p) 5.54p 6.63p Consolidated statement of comprehensive incomefor the half year ended 31 May 2012 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2012 May 2011 Nov 2011 £'000 £'000 £'000(Loss)/ profit for the period (84) 214 240Reclassification adjustmentrelated to terminated foreign 412operationsExchange differences ontranslation of foreign 2 86 60operations (82) 300 712Attributable to:Owners of the parent (75) 317 788Non-controlling interests (7) (17) (76) (82) 300 712 Consolidated statement of changes in equityfor the half year ended 31 May 2012 (Unaudited) Total Capital attributable Non- Share Share redemption Translation Retained to owners controlling Total capital premium reserve reserve earnings of parent interest equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 December 2010 416 1,531 1 629 3,264 5,841 91 5,932Dividends - - - - (211) (211) - (211)Employee share-basedpayment options - - - - (4) (4) - (4)Transactions with owners - - - - (215) (215) - (215)Profit/(loss) for the period - - - - 264 264 (24) 240Reclassification adjustmentrelated to terminated foreignoperations - - - (412) 412 - - -Exchange differences ontranslating foreignoperations - - - 51 - 51 9 60Total comprehensiveincome for the year (361) 676 315 (15) 300Balance at 30 November 2011 416 1,531 1 268
3,725 5,941 76 6,017Dividends - - - - (128) (128) - (128)Employee share-basedpayment options - - - - - - - -Transactions with owners - - - - (128) (128) - (128)Loss for the period - - - - (78) (78) (6) (84)Exchange differences ontranslating foreignoperations - - - 3 - 3 (1) 2Total comprehensiveincome for the period 3 (78) (75) (7) (82)Balance at 31 May 2012 416 1,531 1 271 3519 5,738 69 5,807 Consolidated balance sheetat 31 May 2012 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2012 May 2011 Nov 2011 £'000 £'000 £'000AssetsNon-current assets Goodwill 319 319 318 Property, plant and 502 534 556 equipment Deferred tax assets 73 73 72 894 926 946
Current assets
Inventories 3,109 4,229 3,834 Trade and other receivables 2,786 3,475 2,951 Current tax 187 19 95 Cash and cash equivalents 741 336 67 6,823 8,059 6,947
Liabilities
Current liabilities
Overdrafts (81) (323) - Trade and other payables (1,546) (2,152) (1,591) Borrowings (22) (36) (26) Current tax liabilities (35) (121) (35) (1,684) (2,632) (1,652) Net current assets 5,139 5,427 5,295 Non-current liabilities Borrowings - - - Retirement benefit liability (169) (195) (167) Deferred tax liabilities (28) (3) (28) Other liabilities (29) (45) (29) (226) (243) (224) Net assets 5,807 6,110 6,017 Shareholders' equity Share capital 416 416 416 Share premium account 1,531 1,531 1,531 Capital redemption reserve 1 1 1 Retained earnings 3,519 3,362 3,725 Cumulative translation 271 726 268 adjustmentEquity attributable to the 5,738 6,036 5,941shareholders of the parent Non-controlling interest 69 74 76 5,807 6,110 6,017 Consolidated cash flow statementfor the half year ended 31 May 2012 (Unaudited) Half year Half year Full year ended 31 ended 31 ended 30 May 2012 May 2011 Nov 2011 £'000 £'000 £'000
Cash flows from operating activities
Operating profit (99) 299 375 Share-based payment charge/(credit) - 6 (4) Depreciation 74 71 144 Impairment of fixed assets - - 20 Currency translation 5 91 40 (Gain)/loss on sale of property, plant - (15) (16) and equipment (Increase)/decrease in inventories 725 (403) (8) (Increase)/decrease in trade and 165 (754) (257) other receivables (Decrease)/increase in trade and (44) (38) (582) other payables Movement in contingent consideration - - (16) Cash generated from/ (used in) 826 (743) (304) operations Corporation tax (paid)/received (78) 14 (155) Net cash generated from/ (used in) 748 (729) (459) operations
Cash flows from investing activities
Purchase of property, plant and (24) (23) (137) equipment Proceeds from sale of property, 1 20 24 plant and equipment Interest received 1 - - Net cash used in investing activities (22) (3) (113)
Cash flows from financing activities
Interest paid (1) (1) (12) Loan repayments (4) (19) (27) Finance lease repayments - (1) (3) Equity dividends paid (128) (128) (211) Net cash used in financing activities (133) (149) (253) Net change in cash and cash 593 (881) (825)equivalents Cash and cash equivalents at 67 888 888 start of period Effect of foreign exchange rates - 6 4
Cash and cash equivalents at end of period 660 13
67 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 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 2011.
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 2012 and 31 May 2011.
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 2011 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 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 18 July 2012.
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.
Analysis by operating segmentfor the half year ended 31 May PCB LED Other Total 2012 2011 2012 2011 2012 2011 2012 2011 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Revenue 5,931 8,742 2,049 1,411 - - 7,980 10,153Cost of sales (4,454) (6,503) (1,591) (1,219) - - (6,045) (7,722)Gross profit 1,477 2,239 458 192 - - 1,935 2,431Distribution costs (172) (204) (27) (23) - - (199) (227)Administrationexpenses (1,302) (1,486) (503) (451) (30) 17 (1,835) (1,920)
Other operating income/(expenses) - 15 - - -
- - 15Segment operatingprofit 3 564 (72) (282) (30) 17 (99) 299
4. The tax provision for the six months ended 31 May 2012 is calculated based on the tax rates applicable in the country in which each company operates. Taxation includes a tax credit of £39,000 (2011: tax charge of £16,000) 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 22 May 2012 in respect of the year ended 30 November 2011.
An interim dividend payment of 1.0p per share (2011: 2.1p per share) will bepayable on 2 October 2012 to shareholders on the register at 7 September 2012.The shares will go ex-dividend on 5 September 2012. The interim dividend hadnot been approved by the board at 31 May 2012 and accordingly, has not beenincluded as a liability as at that date.
6. The basic earnings per share are based on the loss for the period of £78,000 (2011: profit £220,000) and on ordinary shares 3,939,551 (2011: 3,939,551), the weighted average number of shares in issue during the year. Diluted earnings per share are based on 4,094,745 ordinary shares (2011: 3,972,169), being the weighted average number of ordinary shares after an adjustment of 155,194 shares (2011: 32,618) 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, Elstree House, Elstree Way, Borehamwood, Herts WD6 1SD and via its website www.holderstechnology.com.
For further information, contact:
Holders Technology Plc 020 8236 1490Rudi Weinreich, Executive ChairmanVictoria Blaisdell, Group Managing DirectorPaul Geraghty, Group Finance Director
Northland Capital Partners Limited - Nomad & Broker 020 7796 8800 Shane Gallwey
Website www.holderstechnology.com