Last checked at 14 May 2009 09:30
Titon Holdings Plc
Interim Financial Statements
for the six months ended 31 March 2009
Business Review
Financial performance
Turbulent trading conditions have resulted in a Loss before Tax of £366,000 for the six months to 31 March 2009 (2008: £151,000 profit). Group Revenue for the period was 20.4% lower at £6,768,000 (2008: £8,500,000).
Loss per share for the period was 3.02p (2008: earnings of 1.06p) and the Directors have declared an unchanged interim dividend of 1.0p per share (2008: 1.0p per share).
Our focus on cash preservation has continued and we are pleased to report Net Cash Balances at the end of period of £2.53million - unchanged from the start of the period. The maintenance of our cash position, despite the Loss before Tax, is largely due to reductions in inventory levels - from £2.51 million at 30 September 2008 to £2.15 million at 31 March 2009.
Trading commentary
The sharp deterioration in construction market activity experienced during 2007/2008 has, if anything worsened during the 6 month period as most of the economies in which we operate have officially entered into recession. Sales in the UK were down by 23.6% compared to the same period last year as speculative housing developments virtually ceased and commercial building programs slowed markedly. Similarly, most of our export markets have seen significant contractions in activity. Other participants within our market have reported sales declines of a similar magnitude.
Our strategy throughout this period has been to reduce our costs in line with the sales decline, to preserve our cash, and to continue to invest into the areas of the business where we anticipate growth opportunities, particularly Mechanical Ventilation Systems in the UK and in our South Korean 'Joint Venture'.
As we have downsized our business it has regrettably led to further redundancies - 16 during the period at a cost of £82,000. Employee numbers at the end of March 2009 were 169 compared to 239 a year earlier and we would like to offer our appreciation and our sincere best wishes to those who have had to seek employment elsewhere.
£126,000 of the Loss before Tax for the period arises from our South Korean 'Joint Venture' where the global recession has led to a slower than expected take-up of our products in that country as economic activity has weakened. The Directors are, however, pleased with the progress that is being made and anticipate a positive contribution in the second half year from this market.
Prospects
The new range of Titon designed and manufactured heat recovery products has been very well received, and a further increase in these product options, as well as new central mechanical extract units, will be available in the coming weeks. These highly efficient units, providing excellent SAP (Standard Assessment Procedure) ratings, are being launched at the time that the requirement for energy efficient products is expanding rapidly as a result of the Code for Sustainable Buildings.
Given the strong balance sheet, and the maintenance of the Board's firm control on costs and cash flow, the Group is well positioned to take full advantage of an upturn in the market whenever it may occur.
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 2008 within the Directors' Report (pages 6 and 7) available at www.titonholdings.com. The Board considers that these remain a current reflection of the risks and uncertainties facing the business.
Responsibilities Statement
The Directors confirm that this condensed set of consolidated financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8.
The Directors of Titon Holdings Plc are listed in the Titon Holdings Plc Annual Report and Accounts 2008. A list of current directors is maintained on the Group's website: www.titonholdings.com .
On behalf of the Board
J N Anderson D A Ruffell
Chairman Chief Executive
13 May 2009
Consolidated Interim Income Statement
for the six months ended 31 March 2009
| Six | 6 Months | 6 Months | Year to | |
| to 31.3.09 | to 31.3.08 | 30.9.08 | ||
| unaudited | unaudited | audited | ||
| Note | £'000 | £'000 | £'000 | |
| Revenue | 2 | 6,768 | 8,500 | 16,375 |
| Cost of sales | (5,481) | (6,640) | (12,803) | |
| Gross profit | 1,287 | 1,860 | 3,572 | |
| Distribution costs | (278) | (310) | (762) | |
| Administration costs | (1,393) | (1,446) | (2,958) | |
| Finance income | 29 | 47 | 101 | |
| Share of losses from associates | (11) | - | (12) | |
| (Loss) / profit before tax | (366) | 151 | (59) | |
| Tax credit / (expense) | 3 | 47 | (39) | (205) |
| (Loss) / profit for the period attributable to the equity holders of the parent | 7 | (319) | 112 | (264) |
| (Loss) / earnings per share - basic | 5 | (3.02p) | 1.06p | (2.50p) |
| - diluted | 5 | (3.02p) | 1.06p | (2.50p) |
Consolidated Interim Statement of Recognised Income and Expense
for the six months ended 31 March 2009
| Six | 6 Months | 6 Months | Year to | |
| to 31.3.09 | to 31.3.08 | 30.9.08 | ||
| unaudited | unaudited | audited | ||
| Note | £'000 | £'000 | £'000 | |
| (Loss) / profit for the period attributable to the equity holders of the parent | 7 | (319) | 112 | (264) |
| Exchange difference on re-translation of net assets of overseas subsidiary undertakings | 17 | 7 | (32) | |
| Total recognised income and expense for the period attributable to equity holders of the parent | (302) | 119 | (296) |
Consolidated Interim Balance Sheet
at 31 March 2009
| 31.3.09 | 31.3.08 | 30.9.08 | ||
| unaudited | unaudited | audited | ||
| Note | £'000 | £'000 | £'000 | |
| Assets | ||||
| Property, plant and equipment | 6 | 4,225 | 4,481 | 4,395 |
| Intangible assets | 56 | 39 | 61 | |
| Investments in associates | 202 | - | 213 | |
| Financial assets | 100 | - | 100 | |
| Total non-current assets | 4,583 | 4,520 | 4,769 | |
| Inventories | 2,150 | 2,924 | 2,507 | |
| Trade and other receivables | 3,015 | 4,027 | 3,224 | |
| Corporation tax | 42 | 17 | - | |
| Cash and cash equivalents | 2,546 | 1,958 | 2,546 | |
| Total current assets | 7,753 | 8,926 | 8,277 | |
| Total Assets | 12,336 | 13,446 | 13,046 | |
| Liabilities | ||||
| Deferred tax | 366 | 170 | 366 | |
| Total non-current liabilities | 366 | 170 | 366 | |
| Trade and other payables | 2,130 | 2,493 | 2,427 | |
| Bank overdraft | 17 | 37 | 18 | |
| Corporation tax | - | - | 5 | |
| Total current liabilities | 2,147 | 2,530 | 2,450 | |
| Total Liabilities | 2,513 | 2,700 | 2,816 | |
| Equity | ||||
| Share capital | 1,056 | 1,056 | 1,056 | |
| Share premium reserve | 865 | 865 | 865 | |
| Capital redemption reserve | 56 | 56 | 56 | |
| Translation reserve | 18 | 40 | 1 | |
| Share schemes reserve | 6 | 3 | 6 | |
| Retained earnings | 7,822 | 8,726 | 8,246 | |
| Total Equity attributable to the equity holders of the parent | 7 | 9,823 | 10,746 | 10,230 |
| Total Liabilities and Equity | 12,336 | 13,446 | 13,046 |
Consolidated Interim Cash Flow Statement
for the six months ended 31 March 2009
| 6 Months | 6 Months | Year to | ||
| to 31.3.09 | to 31.3.08 | 30.9.08 | ||
| unaudited | unaudited | audited | ||
| Note | £'000 | £'000 | £'000 | |
| Cash generated from operating activities | ||||
| (Loss) / profit before tax | (366) | 151 | (59) | |
| Depreciation of property, plant & equipment | 323 | 333 | 641 | |
| Amortisation on intangible assets | 15 | 12 | 37 | |
| Decrease / (increase) in inventories | 370 | 64 | 476 | |
| Decrease / (increase) in receivables | 213 | (240) | 225 | |
| (Decrease) / increase in payables and other current liabilities | (297) | 302 | (11) | |
| Profit on sale of plant & equipment | (2) | (6) | - | |
| Share based payment - equity settled | - | - | 3 | |
| Interest received | (29) | (47) | (101) | |
| Share of associate loss | 11 | - | 12 | |
| Cash generated from operations | 238 | 569 | 1,764 | |
| Income taxes (paid) / received | - | (25) | 27 | |
| Net cash generated from operating activities | 238 | 544 | 1791 | |
| Cash flows from investing activities | ||||
| Acquisition of shares in associate | - | - | (225) | |
| Purchase of property, plant & equipment | 6 | (153) | (153) | (405) |
| Purchase of intangible assets | (10) | - | (40) | |
| Proceeds from sale of plant & equipment | 2 | 14 | 42 | |
| Interest received | 29 | 47 | 101 | |
| Net cash used in investing activities | (132) | (92) | (527) | |
| Cash flows from financing activities | ||||
| Dividends paid to equity shareholders | 4 | (105) | (196) | (301) |
| Issue of loan to associate | - | - | (100) | |
| Net cash used in financing activities | (105) | (196) | (401) | |
| Net increase / (decrease) in cash & cash equivalents | 1 | 256 | 863 | |
| Cash & cash equivalents at beginning of period | 2,528 | 1,665 | 1,665 | |
| Cash & cash equivalents at end of period | 2,529 | 1,921 | 2,528 | |
| Cash & cash equivalents comprise: | ||||
| Cash at bank | 2,546 | 1,958 | 2,546 | |
| Bank overdraft | (17) | (37) | (18) | |
| Cash & cash equivalents at end of period | 2,529 | 1,921 | 2,528 |
Notes to the Condensed Consolidated Interim Statements at 31 March 2009 1 Basis of preparation
These condensed and consolidated interim financial statements of the Group for the six months ended 31 March 2009 incorporate Titon Holdings Plc ("the Company") and its subsidiaries (together referred to as "the Group").
The consolidated interim financial statements have been prepared using accounting policies set out in the Annual Report and Accounts 2008 and in accordance with IAS 34, 'Interim financial reporting', as adopted by the European Union and were authorised by the Board of Directors for release on 13 May 2009.
The consolidated interim financial statements for the six months ended 31 March 2009 and 31 March 2008 have not been audited or reviewed. The results for the year end 30 September 2008 and the balance sheet as at that date are abridged from the Group's Annual Report and Financial Statements 2008, prepared under IFRS, which have been delivered to the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain an emphasis of matter paragraph and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The interim statement does not constitute full accounts within the meaning of Section 240 of the Companies Act 1985.
This statement is being sent to shareholders and will be available from the Company's registered office at International House, Peartree Road, Stanway, Colchester, Essex CO3 0JL.
2 Segment reporting
For management and internal reporting purposes, the Group's operations are currently analysed according to geographical regions. This is the basis on which the Group reports its primary segment information.
The Group's business is comprised of the following reportable geographic segments:
United Kingdom
Rest of the World
Segment information about the geographic regions is presented below.
| Six | United Kingdom | Rest of the World | Consolidated | ||||||
| 6 Months | 6 Months | Year to | 6 Months | 6 Months | Year to | 6 Months | 6 Months | Year to | |
| to 31.3.09 | to 31.3.08 | 30.9.08 | to 31.3.09 | to 31.3.08 | 30.9.08 | to 31.3.09 | to 31.3.08 | 30.9.08 | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| External | 5,811 | 7,609 | 14,538 | 957 | 891 | 1,837 | 6,768 | 8,500 | 16,375 |
| Intercompany | - | - | - | 121 | 135 | 300 | 121 | 135 | 300 |
| Total Revenue | 5,811 | 7,609 | 14,538 | 1,078 | 1,026 | 2,137 | 6,889 | 8,635 | 16,675 |
| Segment result | 593 | 1,059 | 2,080 | (41) | 61 | 74 | 552 | 1,120 | 2,154 |
| Unallocated expenses | (936) | (1,016) | (2,302) | ||||||
| Losses from associates | (11) | - | (12) | ||||||
| Finance income | 29 | 47 | 101 | ||||||
| (Loss) / profit before tax | (366) | 151 | (59) | ||||||
| Tax credit / (expense) | 47 | (39) | (205) | ||||||
| (Loss) / profit for the period attributable to the equity holders of the parent | (319) | 112 | (264) | ||||||
Notes to the Condensed Consolidated Interim Statements
at 31 March 2009
2 Segment reporting (continued)
| Balance Sheet | 31.3.09 | 31.3.08 | 30.9.08 |
| | £’000 | £’000 | £’000 |
| Assets - Segment total assets | | | |
| United Kingdom | 11,507 | 13,210 | 12,604 |
| Rest of World | 829 | 236 | 442 |
| Consolidated | 12,336 | 13,446 | 13,046 |
| Liabilities - Segment total liabilities | | | |
| United Kingdom | 2,246 | 2,664 | 2,668 |
| Rest of World | 267 | 36 | 148 |
| Consolidated | 2,513 | 2,700 | 2,816 |
3 Tax
| Six | 6 Months | 6 Months | Year to | |
| to 31.3.09 | to 31.3.08 | 30.9.08 | ||
| £'000 | £'000 | £'000 | ||
| UK corporation tax | (61) | 29 | (26) | |
| Adjustment in respect of over provision in prior years | 8 | 4 | 5 | |
| Total UK corporation tax | (53) | 33 | (21) | |
| Overseas tax | 22 | 6 | 31 | |
| Adjustment in respect of over provision in prior years | (16) | - | - | |
| Total overseas tax | 6 | 6 | 31 | |
| Total current tax | (47) | 39 | 10 | |
| Deferred tax | - | - | 195 | |
| Total tax | (47) | 39 | 205 |
Tax for the interim period is charged at 12.8% (six months to 31 March 2008: 23.2%) representing the best estimate of the average annual effective income tax rate for the full financial year.
Notes to the Condensed Consolidated Interim Statements
at 31 March 2009
4 Dividends
An interim dividend in respect of the six months ended 31 March 2009 of 1.0p per share, amounting to a total dividend of £105,000 was approved by the Directors of Titon Holdings Plc on 13 May 2009. These consolidated interim statements do not reflect the dividend payable.
The interim dividend will be payable on 25 June 2009 to the shareholders on the register on 29 May 2009. The ex dividend date is 27 May 2009.
The following dividends have been recognised and paid by the Company:
| Six | 6 Months | 6 Months | Year to | ||
| to 31.3.09 | to 31.3.08 | 30.9.08 | |||
| Date | Pence | ||||
| paid | per share | £'000 | £'000 | £'000 | |
| Final in respect of the year end 30.09.07 | 18.2.08 | 2.3 | - | 196 | 196 |
| Interim in respect of the year end 30.09.08 | 26.06.08 | 1.0 | - | - | 105 |
| Final in respect of the year end 30.09.08 | 19.02.09 | 1.0 | 105 | - | - |
| 105 | 196 | 301 |
5 Loss / earnings per ordinary share
Basic loss / earnings per share has been calculated by dividing the profit 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 2008: 10,555,650; year ended 30 September 2008: 10,555,650).
Diluted loss/ earnings per share has been calculated by dividing the loss / profit attributable to shareholders by the weighted average number of ordinary shares and potential dilutive ordinary shares during the period, being 10,555,650 (six months ended 31 March 2008: 10,555,650; year ended 30 September 2008: 10,555,650).
6 Property, plant and equipment
Acquisition and disposals
During the six months ended 31 March 2009, the Group acquired assets with a cost of £163,000 (six months to 31 March 2008: £153,000; year ended 30 September 2008: £445,000). Assets with a net book value of £nil were disposed of during the six months ended 31 March 2009 (six months ended 31 March 2008: 8,000; year ended 30 September 2008: £31,000).
Notes to the Condensed Consolidated Interim Statements
at 31 March 2009
7 Changes in Equity
| | Share capital | Share premium reserve | Capital redemption reserve | Translation reserve | Share schemes reserve | Retained earnings | Total Equity |
| | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
| | | | | | | | |
| At 1 October 2007 | 1,056 | 865 | 56 | 33 | 3 | 8,811 | 10,824 |
| Profit for the period | - | - | - | - | - | 112 | 112 |
| Dividends paid | - | - | - | - | - | (197) | (197) |
| Share-based payment expense | - | - | - | - | - | - | - |
| Translation differences on overseas operations | - | - | - | 7 | - | - | 7 |
| | | | | | | | |
| At 31 March 2008 | 1,056 | 865 | 56 | 40 | 3 | 8,726 | 10,746 |
| Loss for the period | - | - | - | - | - | (376) | (376) |
| Dividends paid | - | - | - | - | - | (104) | (104) |
| Share-based payment expense | - | - | - | - | 3 | - | 3 |
| Translation differences on overseas operations | - | - | - | (39) | - | - | (39) |
| | | | | | | | |
| At 30 September 2008 | 1,056 | 865 | 56 | 1 | 6 | 8,246 | 10,230 |
| Loss for the period | - | - | - | - | - | (319) | (319) |
| Dividends paid | - | - | - | - | - | (105) | (105) |
| Translation differences on overseas operations | - | - | - | 17 | - | - | 17 |
| At 31 March 2009 | 1,056 | 865 | 56 | 18 | 6 | 7,822 | 9,823 |
8 Related party transactions
There have been no additional significant or unusual related party transactions to those disclosed in the Group's Annual Report for 30 September 2008.
9 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.
Directors and Advisors
Directors
Executive
J N Anderson (Chairman)
D A Ruffell (Chief Executive)
T N Anderson
R Brighton
N C Howlett
C S Jarvis
C J Martin
Non-Executive
P W E Fitt (Vice-Chairman)
P E O'Sullivan
K A Ritchie
Secretary and registered office
D A Ruffell
International HousePeartree Road
StanwayColchester
Essex CO3 0JL
COMPANY REGISTRATION NUMBER
1604952 (Registered in England & Wales)
WEBSITE
www.titonholdings.com
| auditors BDO Stoy Hayward LLP 55 Baker Street London W1U 7EU | REGISTRARS AND TRANSFER OFFICE Capita Registrars Ltd Northern House Woodsome Park Fenay Bridge Huddersfield HD8 0LA | |
| BROKERS Evolution Securities Limited 100 Wood Street London EC2V 7AN | ||
| BANKERS Barclays Bank Plc Witham Business Centre Witham, Essex CM8 2AT | | |
| SOLICITORS Macfarlanes 10 Norwich Street London EC4A 1BD | | |