10 Feb 2011 07:00
Embargoed for release until 7.00am on Thursday10February 2011
Holders Technology plc
Providers of specialised materials, equipment and components to the electronics
industry Audited results for the year ended 30 November 2010
Holders Technology plc ("Holders Technology" or "the group") announces its audited results for the year ended 30 November 2010.
Holders Technology participated strongly in the Electronics industry's recoveryfrom the 2008/2009 recession. Growth was particularly good in Germany. Initialsteps were taken to enter the LED market. Holders Technology recorded thefollowing results:
• Revenue grew 26% to £16.3m (2009: £13.0m)
• Gross profit of £4.2m (2009: £3.2m)
• Operating profit of £0.6m before exceptional items (2009: £0.2m loss)
• Operating profit of £0.5m after exceptional items (2009:£0.4m loss)
• £0.6m invested to develop the LED business
• Net cash of £0.9m at year end (2009: £2.1m)
• Proposed final dividend of 3.25p
Chairman's statement
Your company saw a strong recovery in its PCB area of trading in the year to30th November 2010 with operating profit of £0.6m, before exceptional items, ascompared to the preceding year loss of £0.2m. This was most marked in ourGerman subsidiary where we saw very significant recovery both in turnover andin operating profit. The result for the year was assisted by the incorporationwithin the German company of those elements of our European operationspreviously conducted through our Dutch subsidiary.
The result for the UK Company, which was less severely impacted than was our German business in 2009, was broadly flat in 2010 £5.1m (2009 £5.2m).
The contribution made by our Chinese and our Indian activities in the year wasmodest; Indian turnover was broadly flat with a small profit being recorded.China registered a decline in turnover and a loss of £0.1m. As a result of thiswe have considered it appropriate to write off the remaining £57,000 ofgoodwill relating to our Chinese interests. Having a window onto the Chinesemarket remains of value as it enables us to source materials which are ofbenefit to other operations within the Group.
Our policy of continuously seeking supplies of new products for the PCB market bore considerable fruit in the year with our extended range of laminates showing very strong growth in the period.
On behalf of shareholders, I and the Board would like to record our appreciation of the commitment shown by our staff in the PCB areas of our business which enabled us to achieve the recovery we saw in the year.
The other major event of the year was the expansion of our activities in theLED (Light Emitting Diode) market. Shareholders will recall that in December2009 we acquired JK Components Limited ("JK"), a small UK company distributingmainly within the UK LED products sourced from certain Far Eastern suppliers.I said in the statement accompanying the 2009 accounts that our key objectivefor LED's in the year to 30 November 2010 was to invest and build a platformfor sustained growth firstly within the UK and then throughout the geographicalmarkets we currently address.I am pleased to be able to report that during the year we made good progresstowards achieving these goals. Master distribution agreements for Europe withthe suppliers used by JK were secured and we have expanded our Germanoperation, both with personnel and additional storage facilities, giving us aplatform for coverage of the continental European market. Further developmentis envisaged this year and to date we have invested £0.6m. Our LED operationsrecorded a loss of £0.1m in the year.We remain of the view that the move into the LED market is a major opportunityfor the group. In order to assist shareholders in understanding the reasoningunderlying that belief, I would direct your attention to the section within thebusiness review following this statement which sets in context the LED strategywe are pursuing.Management team
In order fully to grasp the opportunities available to the group, the board hasdecided to rearrange the top management team. While I will remain as ExecutiveChairman, Victoria Blaisdell, currently Corporate Development Director, will,from 1st March 2011, take the role of Group Managing Director. Victoria hasbeen involved in both our PCB and LED activities and has recently, withconsiderable success, concentrated more heavily on the LED area of ouractivities.
Outlook
While inevitably, as a company strongly reliant on European trading, we cannotbe wholly insulated from the impact of wider economic influences, we believethat in our traditional PCB business we are well placed to preserve ourposition as a major supplier to the European market.Whilst the LED and lighting market is fast growing, the level of competition issignificant. Nevertheless, we believe that we have a major opportunitysubstantially to grow our business in this area. This will require significantinvestment but the potential returns that we can see over future years do, webelieve, fully justify that investment being made.R W WeinreichChairman and Chief Executive9 February 2011Consolidated income statementfor the year ended 30 November 2010 Before Exceptional Total Total exceptional items items 2010 2010 2010 2009 Note £'000 £'000 £'000 £'000 Continuing operations Revenue 16,314 - 16,314 12,966 Cost of sales (12,116) - (12,116) (9,770) Gross profit 4,198 - 4,198 3,196 Distribution costs (390) - (390) (301) Administrative expenses (3,273) - (3,273) (3,044) Fundamental - - - (176)restructuring Impairment of goodwill 2 - (57) (57) - Acquisition costs 2 - (26) (26) - Other operating income/ 39 - 39 (90)(expenses) Operating profit/(loss) 574 (83) 491 (415) Finance income - - - 20 Finance costs (1) - (1) (13) Profit/(loss) before 573 (83) 490 (408)taxation Tax expense 3 (59) - (59) 9 Profit/(loss) for the 514 (83) 431 (399)year Profit/(loss) for the year attributable to: Owners of the parent 507 (375) Non-controlling (76) (24)interest Profit/(loss) for the 431 (399)financial year Total and continuing Basic earnings/(loss) 5 12.87p (9.52p)per share Diluted earnings/(loss) 5 12.87p (9.52p)per share Consolidated statement of comprehensive incomefor the year ended 30 November 2010 Group 2010 2009 £'000 £'000 Profit/(loss) for the year 431 (399)
Exchange differences on translating foreign operations (180)
288
Total comprehensive income for the year 251
(111)
Total comprehensive income for the year attributable to:
Owners of the parent 305 (64) Non-controlling interests (54) (47) 251 (111)
Statements of changes in equity
Group Share Share Capital Translation Retained
Total Non-controlling Total
capital premium redemption reserve earnings attributable interest equity reserve to owners of parent £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 December 416 1,531 1 520 3,568 6,036 130 6,1662008 Dividends - - - - (211) (211) - (211)
Employee share-based - - - - (10)
(10) - (10)payment options Transactions with - - - - (221) (221) - (221)owners Profit/(loss) for the - - - - (375) (375) (24) (399)year
Non-controlling interest - - - - -
- 62 62investment
Exchange differences on - - - 311 - 311 (23) 288translating foreign operations Total comprehensive - - - 311 (375) (64) 15 (49)income for the year Balance at 30 November 416 1,531 1 831 2,972 5,751 145 5,8962009 Dividends - - - - (211) (211) - (211) Employee share-based - - - - (4) (4) - (4)payment options Transactions with - - - - (215) (215) - (215)owners Profit/(loss) for the - - - - 507 507 (76) 431year
Exchange differences on - - - (202) - (202)
22 (180)translating foreign operations Total comprehensive - - - (202) 507 305 (54) 251income for the year Balance at 30 November 416 1,531 1 629 3,264 5,841 91 5,9322010 Company Share Share Capital Retained Total capital premium redemption earnings equity reserve £'000 £'000 £'000 £'000 £'000 Balance at 1 December 2008 416 1,531 1 830 2,778
Profit and comprehensive income for - - - 330
330the period Dividends - - - (211) (211) Share-based payment charge - - - (10) (10) Balance at 30 November 2009 416 1,531 1 939 2,887
Loss and comprehensive income for the - - - (185)
(185)period Dividends - - - (211) (211) Share-based payment charge - - - (4) (4)
Balance at 30 November 2010 416 1,531 1 539 2,487Balance sheetsat 30 November 2010Company number: 1730535 Group Company 2010 2009 2010 2009 £'000 £'000 £'000 £'000Assets Non-current assets Goodwill 318 207 - -
Property, plant and equipment 582 655 3 3 Investments in subsidiaries - - 3,622 2,669 Investment in joint venture - - 15 15 Investments in associates - -
- - Deferred tax assets 73 29 - 2 973 891 3,640 2,689 Current assets Inventories 3,826 1,866 - -
Trade and other receivables 2,721 2,301
423 557 Current tax assets 56 69 - -
Cash and cash equivalents 888 2,095
63 127 7,491 6,331 486 684 Liabilities Current liabilities Trade and other payables (2,182) (1,107) (1,562) (454) Borrowings (52) - - - Current tax liabilities (55) (35)
(32) (32) (2,289) (1,142) (1,594) (486) Net current assets 5,202 5,189 (1,108) 198 Non-current liabilities Borrowings (4) - - -
Retirement benefit liability (192) (176)
- - Contingent consideration (45) - (45) - Deferred tax liabilities (2) (8) - - (243) (184) (45) - 5,932 5,896 2,487 2,887 Shareholders' equity Share capital 416 416 416 416 Share premium account 1,531 1,531 1,531 1,531 Capital redemption reserve 1 1 1 1 Retained earnings 3,264 2,972 539 939 Cumulative translation 629 831 - -adjustment reserve
Equity attributable to the 5,841 5,751 2,487 2,887shareholders of the parent Non-controlling interest 91 145 - - 5,932 5,896 2,487 2,887 Cash flow statementsfor the year ended 30 November 2010 Group Company 2010 2009 2010 2009 £'000 £'000 £'000 £'000 Cash flows from operating activities Operating profit/(loss) 491 (415) (117) (215) Share-based payment credit (4) (10) (4) (10) Depreciation 152 180 1 2 Impairment of goodwill 57 - - - Impairment of investment in - - - 177subsidiary Currency translation (137) 182 - -
Loss on sale of property, plant 16 13
- -and equipment (Increase)/decrease in (1,870) 942 - -inventories (Increase)/decrease in trade (274) 410 67 (85)and other receivables Increase/(decrease) in trade 867 (517) 1,108 77and other payables Cash (used in)/generated from (702) 785 1,055 (54)operations
Corporation tax (paid)/received (75) 51
157 47 Net cash (used in)/generated (777) 836 1,212 (7)from operations Cash flows from investing activities Net borrowings acquired with (44) - - -subsidiary undertaking Increase in investment in - - (1,296) (494)subsidiaries Proceeds from disposal of - - 67 -subsidiary
Purchase of property, plant and (118) (168)
(1) (2)equipment
Proceeds from sale of property, 21 -
- -plant and equipment Income from investments - - 160 541 Interest received - 20 5 3
Net cash (used in)/generated from (141) (148)
(1,065) 48investing activities Cash flows from financing activities Interest paid (1) (13) - - Loan repayments (26) - - - Finance lease principal (3) - - -repayments Equity dividends paid (211) (211) (211) (211) Net cash used in financing (241) (224) (211) (211)activities Net change in cash and cash (1,159) 464 (64) (170)equivalents Cash and cash equivalents at 2,095 1,537 127 297start of period Effect of foreign exchange (48) 94 - -rates Cash and cash equivalents at 888 2,095 63 127end of period Notes 1. Basis of preparation The group and parent company financial statements have been prepared inaccordance with EU endorsed International Financial Reporting Standards (IFRS),International Financial Reporting Interpretations Committee (IFRIC)interpretations and with those parts of the Companies Act applicable tocompanies reporting under IFRS. All accounting standards and interpretationsissued by the International Accounting Standards Board and the InternationalFinancial Reporting Interpretations Committee effective at the time ofpreparing these financial statements have been applied.
2. Exceptional items
Exceptional items consist of the following:
2010 2009 £'000 £'000 Fundamental restructuring - (176) Impairment of goodwill (57) - Acquisition costs (26) - (83) (176) The impairment of goodwill derives from the directors' assessment of goodwillattributable to Holders' Far East operations. The acquisition costs relate tothe acquisition of JK Components Limited (since renamed Holders Components
Limited) in December 2009. 3. Taxation 2009 2009 £'000 £'000
Analysis of the charge in the period
Current tax - Current period 136 18
- Adjustments in respect of prior periods (27)
(38) 109 (20) Deferred tax (50) 11 Total tax 59 (9) Tax reconciliation
The tax for the period is lower (2009: higher) than the standard rate of corporation tax in the UK, effectively 28% (2009: 28%) for the company's financial year. The differences are explained below:
2009 2009 £'000 £'000 Profit/(loss) before taxation 490 (408)
Profit before taxation multiplied by rate of 137
(113)
corporation tax in the UK of 28% (2009: 28%)
Effects of:
Differences between capital allowances and (2)
(9)depreciation
Amounts not deductible for taxation purposes 23
(24)
Adjustments in respect of prior years (27)
9 Taxation losses (74) 99 Other temporary differences 2 29 Taxation 59 (9)
4. The directors have proposed a final dividend of 3.25p per share payable on
24 May 2011 to shareholders on the register at close of business on 6 May
2011. The total dividend for the year, including the interim dividend of
2.1p (2009: 2.1p) per share paid on 5 October 2010, amounts to £211,000
(2009: £211,000), which is equivalent to 5.35p (2009: 5.35p) per share.
5. The basic earnings per share are based on the earnings for the financial
year attributable to the equity shareholders of £507,000 (2009: loss £
375,000) and on ordinary shares 3,939,551 (2009: 3,939,551), the weighted
average number of shares in issue during the year, excluding treasury
shares. Diluted earnings per share are based on 3,939,551 ordinary shares
(2009: 3,939,551), being the weighted average number of ordinary shares
after an adjustment of nil shares (2009: nil) in relation to share options.
6. This preliminary statement, which has been approved by the Board on 9
February 2011, is not the Company's statutory accounts. The statutory
accounts for each of the two years to 30 November 2009 and 30 November 2010
received audit reports, which were unqualified and did not contain
statements under section 498(2) and section 498(3) of the Companies Act
2006. The 2009 accounts have been filed with the Registrar of Companies but
the 2010 accounts are not yet filed.
ENDS
For further information, contact:
Mr Rudi Weinreich, Chairman and Chief Executive, Holders Technology plc, on 020 8731 4336
Mr Jim Shawyer, Group Finance Director, Holders Technology plc, On 020 8731 4336
Mr Shane Gallwey, Director, Corporate Finance, Northland Capital Partners Ltd, on 020 7492 4750
Website www.holderstechnology.com
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