Titon Regulatory News (TON)

Titon Holdings Plc

Interim Financial Statements

for the six months ended 31 March 2014

Business Review

Financial performance

Group Profit before Taxation for the six-month period ended 31 March 2014 was £551,000 (2013: £79,000) on Revenues 20.4% higher at £8,840,000 (2013: £7,340,000).

Earnings per share for the period were 2.39p (2013: 0.57p) and the Directors have declared an unchanged interim dividend of 1.0p per share (2013: 1.0p per share).

Net Cash Balances at 31 March 2014 were £1,851,000 (2013: £2,118,000).

Trading commentary

I am pleased to report that we have made significant progress in the six months ended 31st March 2014 as Group Profit before tax has risen to £551,000 versus £79,000 last year. As noted in our First Quarter 'Interim Management Statement' we have benefited from some good trading results from our partnership in Korea, which has continued in the Second Quarter.

Our overall revenues have grown when compared to last year by 20.4% which is pleasing. The main reason for the increase is the higher level of sales outside of the UK, which have risen by 62.4% over the comparative period. In the UK business has continued to be difficult although we have seen an improvement in sales from our Ventilation Systems division as the period progressed. At our UK Window and Door Hardware division sales are up marginally over last year. We have devoted significant time and resources in the last two years to widening the scope and scale of our window and door products but this has not yet resulted in the increase in sales that we expect. We will continue to work hard to achieve this in the second half year. In our Ventilation Systems division, as I noted last year, the social housing market has started to grow again after two difficult years and our range of Mechanical Ventilation with Heat Recovery ("MVHR") units is popular with our customers. We have introduced a number of new products and refinements to our MVHR range in the last few months. I would like to thank all of our talented staff for their hard work and their commitment in both Hardware and Ventilation Systems divisions.

In Korea our partnership has, again, shown improvement over last year with sales growing by 89.2% as we have expanded our penetration into both the private and government housing markets. David Ruffell and I visited Korea again at the end of February this year and were greatly impressed with the progress being made there and by the dedication and hard work shown by our Korean colleagues. We thank them sincerely for all of their efforts.

Export Sales from our UK factory were up by 12% over the comparative period due largely to some long awaited growth from our USA subsidiary following the protracted slowdown in construction activity there.

We were very pleased to see the introduction of our new online purchasing website, TitonDirect.co.uk , during the period. This website promotes some of our most popular window handles, trickle vents and whole house ventilation systems, as well as spare parts such as MVHR filters and window handle keys. Every business is looking to offer products online and we are no different and now that the website has been up and running for a few weeks we will start to develop it further.

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Prospects

We anticipate that conditions in our main UK markets will remain muted during the next six months. We have seen some improvement within the Hardware division but we are not expecting that it will grow significantly in the second half year. There have been signs of progress in the Ventilation Systems division in the period, which we do expect to continue in the second half, along with a wider range of products, which should lead to increased sales.

We are optimistic that our partnership in Korea will continue to grow during 2014 and we will continue to support them, particularly on the design side, wherever possible.

Our balance sheet remains strong and we have significant cash balances, which will allow us to continue to invest in new products and markets in 2014.

Principal risk and uncertainties

The key financial and non-financial risks faced by the Group are disclosed in the Group's Annual Report and Accounts for the year ended 30 September 2013 within the Strategic Report (page 7) available at www.titonholdings.com. The Board considers that these remain a current reflection of the risks and uncertainties facing the business.

Responsibility Statement

The Directors confirm that, to the best of their knowledge, this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the European Union and that this Interim Report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R. 

The Directors of Titon Holdings Plc are listed on page 14 of this document. A list of current directors is maintained on the Group's website: www.titonholdings.com.

On behalf of the Board

KA Ritchie DA Ruffell

Chairman Chief Executive

7 May 2014

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Titon Holdings Plc

Consolidated Interim Income Statement

for the six months ended 31 March 2014

Consolidated Interim Statement of Comprehensive Income

for the six months ended 31 March 2014

 The notes on pages 7 to 13 form an integral part of this condensed interim information.

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Titon Holdings Plc

Consolidated Statement of Financial Position

at 31 March 2014

The notes on pages 7 to 13 form an integral part of this condensed interim information.

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Titon Holdings Plc

Consolidated Interim Statement of Changes in Equity

The notes on pages 7 to 13 form an integral part of this condensed interim information.

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Titon Holdings Plc

Consolidated Interim Statement of Cash Flows

for the six months ended 31 March 2014

The notes on pages 7 to 13 form an integral part of this condensed interim information.

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Titon Holdings Plc

Notes to the Condensed Consolidated Interim Statements

at 31 March 2014

1 Basis of preparation

Titon Holdings Plc (the 'Company') is a company domiciled in England. The condensed consolidated interim financial statements of the Group for the six months ended 31 March 2014 comprise the Company and its subsidiaries (together referred to as the 'Group').

Prior period figures for Distribution Costs and Administration Expenses shown in the Consolidated Interim Income Statement on page 2 have been restated to provide a comparable cost basis with the costs and expenses reported in the six month period to 31 March 2014. Distribution costs for the six month period to 31 March 2013 have been restated at £269,000 (previously reported as £380,000) and Administration Expenses have been restated at £1,550,000 (previously reported as £1,439,000). Distribution costs for the year to 30 September 2013 have been restated at £554,000 (previously reported as £793,000) and Administration Expenses have been restated at £3,134,000 (previously reported as £2,895,000).

This restatement has had no effect on the profits recorded for the 6 month period to 31 March 2013 or the year to 30 September 2013.

The IASB has issued the following revised and updated IFRIC amendments which have been adopted, although they have no impact on the Group's reporting; amendments to:

Otherwise, the condensed interim financial statements have been prepared using accounting policies set out in the Report and Accounts 2013 and have been applied consistently to all periods presented in these financial statements. They are in accordance with IAS 34. The six months results for both 31 March 2013 and 2014 have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. The financial information for the year end 30 September 2013 does not constitute the full statutory accounts for that period. The Company's Report and Accounts 2013 have been delivered to the Registrar of Companies. The independent auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.

The condensed interim financial statements do not constitute full accounts within the meaning of Section 434 of the Companies Act 2006.

The interim report was approved by the Board and authorised for issue on 7 May 2014. Copies of the interim report will be sent to shareholders in the next few weeks.

This statement is being sent to shareholders, will be available on the Group's website at www.titonholdings.com and from the Company's registered office at International House, Peartree Road, Stanway, Colchester, Essex CO3 0JL.

2 Segment reporting

In identifying its operating segments, management generally follows the Group's reporting lines, which represent the main geographic markets in which the Group operates. The segment reporting below is shown in a manner consistent with the internal reporting provided to the Board, which is the Chief Operating Decision Maker (CODM). These operating segments are monitored and strategic decisions are made on the basis of segment operating results.

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Notes to the Condensed Consolidated Interim Statements

at 31 March 2014

2 Segment reporting (continued)

The Group operates three main business segments which are :

Inter-segment revenue is transacted on an arm's length basis and charged at prevailing market prices for a specific product and market or cost plus where no direct comparative market price is available. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Research and development entity-wide financial expenses are not allocated to the business activities for which R&D is specifically performed and it is not therefore reported as a separate operating segment. Sales Administration and Other Expenses are not currently allocated to operating segments in the Group's reporting to the CODM, and Other Expenses include mainly central and parent company overheads relating to group management, the finance function and regulatory requirements. 

The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its financial statements.

The total assets for the segments represent the consolidated total assets attributable to these reporting segments. Parent company results and consolidation adjustments reconciling the segmental results and total assets to the consolidated financial statements, are included within the United Kingdom segment figures stated below.

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 Notes to the Condensed Consolidated Interim Statements

at 31 March 2014

2 Segment reporting (continued)

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Notes to the Condensed Consolidated Interim Statements

at 31 March 2014

2 Segment reporting (continued)

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Notes to the Condensed Consolidated Interim Statements

at 31 March 2014

2 Segment reporting (continued)

IFRS 8 requires entity-wide disclosures to be made about the regions in which it earns its revenues and holds its non-current assets which are shown below.

One customer accounted for more than 10% of Group revenue and sales to this customer totaled £2,631,000 (included within South East Asia)

.

One customer accounted for more than 10% of Group revenue and sales to this customer totaled £1,413,000 (included within South East Asia)

One customer accounted for more than 10% of Group revenue and sales to this customer totaled £3,680,000 (included within South East Asia)

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Notes to the Condensed Consolidated Interim Statements

at 31 March 2014

3 Tax

Tax for the interim period is charged at 22.0% (six months to 31 March 2013: 20.0%) representing the best estimate of the average annual effective income tax rate for the full financial year.

4 Dividends

An interim dividend in respect of the six months ended 31 March 2014 of 1.0p per share, amounting to a total dividend of £106,000 was approved by the Directors of Titon Holdings Plc on 7 May 2014. These consolidated interim statements do not reflect the dividend payable.

The interim dividend will be payable on 24 June 2014 to the shareholders on the register on 30 May 2014. The ex dividend date is 28 May 2014.

The following dividends have been recognised and paid by the Company:

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Notes to the Condensed Consolidated Interim Statements

at 31 March 2014

5 Earnings per ordinary share

Basic earnings per share has been calculated by dividing the profits attributable to shareholders by the weighted average number of ordinary shares in issue during the period, being 10,555,650 (six months ended 31 March 2013: 10,555,650; year ended 30 September 2013: 10,555,650).

Diluted earnings per share has been calculated by dividing the profits attributable to shareholders by the weighted average number of ordinary shares and potential dilutive ordinary shares during the period, being 10,670,161 (six months ended 31 March 2013: 10,555,650; year ended 30 September 2013: 10,555,650).

6 Property, plant and equipment

Additions and disposals

During the six months ended 31 March 2014, the Group acquired assets with a cost of £127,000 (six months to 31 March 2013: £55,000; year ended 30 September 2013: £280,000).

7 Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Transactions between subsidiary companies and the associate company, which is a related party, were as follows:

There have been no additional significant or unusual related party transactions to those disclosed in the Group's Annual Report for 30 September 2013.

8 Liability statement

Neither the Group nor the Directors accept any liability to any person in relation to the Interim Statement except to the extent that such liability could arise under English Law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A of the Financial Services and Markets Act 2000.

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Directors and Advisors

Directors

Executive

KA Richie (Chairman)

D A Ruffell (Chief Executive)

T N Anderson

N C Howlett

C S Jarvis

Non-executive

J N Anderson (Deputy Chairman)

Secretary and registered office

D A Ruffell

International House

Peartree Road

Stanway

Colchester

Essex CO3 0JL

COMPANY REGISTRATION NUMBER

1604952 (Registered in England & Wales)

WEBSITE

www.titonholdings.com

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