16 Jul 2008 07:00
Holders Technology plc
Providers of specialised materials, equipment and services to the electronics industry
Interim results for the 6 months ended 31 May 2008
Holders Technology plc announces its unaudited interim results for the 6 month period ended 31 May 2008.
| Highlights | Half year ended 31 May | |
| 2008 | 2007 | |
| Revenue | £8.8m | £9.5m |
| PBT | £0.4m | £0.5m |
| Operating cash flow before tax | £0.3m | £0.4m |
| Earnings per share | 8.10p | 8.70p |
| Interim dividend per share | 2.10p | 2.10p |
| Net assets per share at 31 May | 155p | 134p |
CHAIRMAN'S STATEMENT
Activities
In the Chairman's statement accompanying the Annual Report and Accounts for the year to 30th November 2007 I stated that we were basing our plans for the current year on an assumed weakening of economic activity in Europe. This has proved to be the case with all our European activities experiencing the impact of this slow down; the UK has experienced the least impact and Scandinavia the most. As is always the case special factors have impacted each of our operations but the overall position is one of reduced volumes.
Exact comparisons with the first half of last year are complicated by exchange rate movements. The first half of the current year saw the Euro strengthening significantly particularly against both sterling and the dollar. The period also saw a change of accounting treatment in respect of certain of our Chinese activities which now, as associated companies, are no longer consolidated in the Group accounts.
In general we have maintained margins and where possible we have taken steps to reduce overheads. Post tax profits have benefited from lower rates of corporation tax in both the UK and Germany.
The Group as a whole continues to be cash generative with the increase in inventories in the first half being caused by special factors including the build up of launch stocks for a new product in certain markets. We maintain our policy of continuing to hold a strong balance sheet with negligible borrowings and £823,000 net cash at the balance sheet date.
Outlook
Our continuing policy of seeking to identify new suppliers of innovative materials is being successfully realised but the impact of this on the current year is too early to forecast. Whilst we expect the second half of the current year to continue to be challenging in Europe we believe that in both China and India we will see some growth, albeit from a modest base.
The interim financial statements were approved by the board on 15 July 2008 and signed on its behalf by:
| Rudolf W. Weinreich Chairman and Chief Executive | Holders Technology plc Devonshire House Manor way Borehamwood Hertfordshire WD6 1QQ |
| 15 July 2008 |
Enquiries:
| Rudi Weinreich, Chairman and Chief Executive, Holders Technology plc | 020 8731 4336 |
| Jim Shawyer, Finance Director, Holders Technology plc | 020 8731 4336 |
| Website: www.holderstechnology.com | |
| John Wakefield, Director, Corporate Finance, Blue Oar Securities Plc | 0117 933 0020 |
Consolidated Interim Income Statement
for the half-year ended 31 May 2008 (Unaudited)
| Half-year |
| Half-year | Full-year | |||
| ended 31 | ended 31 | ended 30 | ||||
| May 2008 | May 2007 | Nov 2007 | ||||
| Notes | £'000 | £'000 | £'000 | |||
| Revenue | 1 | 8,783 | 9,458 | 18,853 | ||
| Operating profit | 420 | 542 | 1,202 | |||
| Finance income | 18 | 6 | 27 | |||
| Finance expense | (13) | (7) | (23) | |||
| Share of loss of associate | (3) | - | - | |||
| Profit before taxation | 422 | 541 | 1,206 | |||
| Taxation | 2 | (118) | (200) | (454) | ||
| Profit after taxation | 304 | 341 | 752 | |||
| Attributable to: | ||||||
| Equity shareholders of the company | 317 | 362 | 744 | |||
| Minority interest | (13) | (21) | 8 | |||
| 304 | 341 | 752 | ||||
| Earnings per share | 5 | 8.10p | 8.70p | 17.97p | ||
| Diluted earnings per share | 5 | 8.10p | 8.66p | 17.78p |
Consolidated Statement of Recognised Income and Expense
for the half-year ended 31 May 2008 (Unaudited)
| Half-year |
| Half-year | Full-year | |||
| ended 31 | ended 31 | ended 30 | ||||
| May 2008 | May 2007 | Nov 2007 | ||||
| £'000 | £'000 | £'000 | ||||
| Exchange differences on translation of foreign operations | 349 | (125) | 121 | |||
| Profit for the period | 304 | 362 | 752 | |||
| 653 | 237 | 873 |
CONSOLIDATED INTERIM BALANCE SHEET
at 31 May 2008 (Unaudited)
| Half-year | Half-year | Full-year | ||||
| ended 31 | ended 31 | ended 30 | ||||
| May 2008 | May 2007 | Nov 2007 | ||||
| Notes | £'000 | £'000 | £'000 | |||
| Assets | ||||||
| Non-current assets | ||||||
| Goodwill | 403 | 413 | 397 | |||
| Property, plant and equipment | 693 | 627 | 622 | |||
| Investments in associates | 26 | - | 28 | |||
| 1,122 | 1,040 | 1,047 | ||||
| Current assets | ||||||
| Inventories | 3,150 | 2,976 | 2,645 | |||
| Trade and other receivables | 2,870 | 3,676 | 2,637 | |||
| Cash and cash equivalents | 1,039 | 701 | 1,275 | |||
| 7,059 | 7,353 | 6,557 | ||||
| Liabilities | ||||||
| Current liabilities | ||||||
| Trade and other payables | (1,552) | (2,020) | (1,399) | |||
| Borrowings | (216) | (335) | (174) | |||
| Current tax | (109) | (277) | (275) | |||
| (1,877) | (2,632) | (1,848) | ||||
| Net current assets | 5,182 | 4,721 | 4,709 | |||
| Non-current liabilities | ||||||
| Retirement benefit liability | (149) | (99) | (139) | |||
| Deferred consideration | (104) | (104) | (104) | |||
| (253) | (203) | (243) | ||||
| Net assets | 6,051 | 5,558 | 5,513 | |||
| 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 | 3,633 | 3,534 | 3,431 | ||
| Cumulative translation adjustment | 3 | 370 | (75) | 37 | ||
| Equity attributable to the equity shareholders of the company | 5,951 | 5,407 | 5,416 | |||
| Minority interests in equity | 3 | 100 | 151 | 97 | ||
| 6,051 | 5,558 | 5,513 |
CONSOLIDATED INTERIM CASH FLOW STATEMENT
for the half-year ended 31 May 2008 (Unaudited)
| Half-year | Half-year | Full-year | |||
| ended 31 | ended 31 | ended 30 | |||
| May 2008 | May 2007 | Nov 2007 | |||
| £'000 | £'000 | £'000 | |||
| Cash flows from operating activities | |||||
| Operating profit | 420 | 542 | 1,202 | ||
| Share-based payment charge | 12 | 12 | 12 | ||
| Depreciation | 92 | 98 | 288 | ||
| Currency translation | 301 | 7 | 102 | ||
| (Gain)/loss on sale of tangible fixed assets | - | - | 1 | ||
| (Increase)/Decrease in inventories | (505) | 177 | 508 | ||
| (Increase)/Decrease in trade and other receivables | (218) | (835) | 231 | ||
| Increase/(Decrease) in trade and other payables | 163 | 357 | (362) | ||
| Cash generated from operations | 265 | 358 | 1,982 | ||
| Tax paid | (299) | (180) | (418) | ||
| Net cash generated (used in)/from operations | (34) | 178 | 1,564 | ||
| Cash flows from investing activities | |||||
| Disposal of investment in associate | - | 119 | 119 | ||
| Purchase of property, plant and equipment | (123) | (217) | (403) | ||
| Proceeds from sale of property, plant and equipment | 1 | - | 15 | ||
| Interest received | 18 | 6 | 27 | ||
| Net cash generated used in investing activities | (104) | (92) | (242) | ||
| Cash flows from financing activities | |||||
| Purchase of treasury shares | - | - | (398) | ||
| Interest paid | (13) | (7) | (23) | ||
| Equity dividends paid | (127) | (125) | (212) | ||
| Finance lease principal repayments | - | (6) | (6) | ||
| Net cash used in financing activities | (140) | (138) | (639) | ||
| Net change in cash and cash equivalents | (278) | (52) | 683 | ||
| Cash and cash equivalents at start of period | 1,101 | 418 | 418 | ||
| Cash and cash equivalents at end of period | 823 | 366 | 1,101 |
Notes:
1) Basis of preparation
The consolidated interim 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 2007.
The consolidated interim 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 2008 and 31 May 2007.
The interim financial statements do not constitute statutory accounts as defined by Section 240 of the Companies Act 1985. A copy of the group's financial statements for the year ended 30 November 2007 prepared in accordance with IFRS 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 interim financial statements and therefore the interim financial information is not in full compliance with IFRS.
The preparation of interim 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 interim financial statements have been prepared under the historical cost convention.
The board of Holders Technology plc approved this interim report on 15 July 2008.
2) The tax charge for the six months ended 31 May 2008 is calculated based on the tax rates applicable in the country in which each company operates. The effective rate of tax is 28.0% (2007: 37.0%). Taxation includes a charge of £54,000 (2007: £76,000) 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 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
|
|
| ||||||||
| Balance at 1 December 2007 | 416 | 1,531 | 1 | 37 | 3,431 | 5,416 | 97 | 5,513 | |
| Profit/(loss) for the period | - | - | - | - | 317 | 317 | (13) | 304 | |
| Dividends | - | - | - | - | (127) | (127) | - | (127) | |
| Currency translation differences | - | - | - | 333 | - | 333 | 16 | 349 | |
| Share-based payment credit | - | - | - | - | 12 | 12 | - | 12 | |
| Balance at 31 May 2008 | 416 | 1,531 | 1 | 370 | 3,633 | 5,951 | 100 | 6,051 | |
4) A final dividend of 3.25p per share on the total issued share capital, excluding treasury shares, of 3,914,551 10p ordinary shares was paid on 20 May 2008 in respect of the year ended 30 November 2007.
An interim dividend payment of 2.1p per share (2007: 2.1p per share) will be payable on 23 September 2008 to shareholders on the register at 29 August 2008. The shares will go ex-dividend on 27 August 2008. The interim dividend was not approved by the board at 31 May 2008 and accordingly, has not been included as a liability as that date.
5) The basic earnings per share are based on the profit for the period of £317,000 (2007: £362,000) and on ordinary shares 3,914,551 (2007: 4,159,551), the weighted average number of shares in issue during the year. Diluted earnings per share are based on 3,914,551 ordinary shares (2007: 4,178,518), being the weighted average number of ordinary shares after an adjustment of nil shares (2007: 18,967) in relation to share options.
6) A copy of this interim 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.