Titon Regulatory News (TON)

10 May 2007 07:01

Titon Holdings PLC10 May 2007 Consolidated Interim Financial Statementsfor the six months ended 31 March 2007 Chairman's Statement FINANCIAL PERFORMANCE I am pleased to announce a 4.5% improvement in profit before taxation for thesix months to £439,000 (2006: £420,000) on a 5.8% increase in revenue to£8,670,000 (2006: £8,195,000). Earnings per share for the period were 3.8%higher at 2.97p (2006: 2.86p) and the Directors have approved an unchangedinterim dividend of 2.3p per ordinary share (2006: 2.3p). The dividend will bepayable on the 28 June 2007 to shareholders on the register on 1 June 2007.The ex-dividend date is 30 May 2007. Capital expenditure has been much lower this period at £208,000 (2006:£1,142,000) and cash balances at the end of the period were £1,671,000 (2006:£2,392,000) TRADING COMMENTARY First half year performance has been very much as expected, with growthopportunities being largely curtailed by a subdued UK window market. Over the previous few years I have reported on the Building Regulation changefor England and Wales, and the impact it is likely to have on Titon. A majoroutcome of this process has been our diversification into mechanical ventilationsystems. One of the factors driving the demand for these systems is the increasein building air tightness levels arising from the Building Regulation. Thisprogression towards more airtight construction has been further reinforced bythe recently published 'Code for Sustainable Homes', as has the need for greaterenergy efficient products. In response to this requirement, we have recentlysourced several new powered ventilation products which are among the most energyefficient on the market. We believe that these products will give us a goodopportunity to further establish our name in this growing marketplace. Sales of our recently launched Trimvent Select Xtra trickle ventilator range tosuit passive ventilation requirements for the new Regulation are progressingsatisfactorily, although much of current house building is still being processedunder previous Regulations. The Trimvent Select Xtra range will be expanded asthe year progresses. I reported in my last Statement that, following the Government U-turn onintroducing a Regulation for background ventilation in existing dwellings, thewindow industry had been tasked to introduce a 'Good Practice' guide for fittingtrickle ventilators to replacement windows. However, it is now evident that thisguidance is having a minimal impact on ventilator demand and part of theinvestment committed by Titon in 2005/2006 to increase sales and capacity willhave a slower payback than anticipated. It has been a big disappointment and apotential setback for improving air quality in existing homes. Our export sales, which have shown steady growth over the past few years, havecontinued to improve. However, the weakness of the US dollar, combined with thesteep fall in house building activity in the USA, has limited overall exportgrowth to 6%. I have previously reported on our intent to seek overseas supply options to helpreduce our product costs. I am now able to report that, effective from June2007, we will be sourcing our zinc die casting components from Slovenia andclosing our in-house operation, achieving significant annual savings from theventure. As part of the arrangement with our Slovenian supplier, Titus Lama, wewill be selling to them our entire die casting plant and equipment whilstretaining all product design rights. PROSPECTS The UK window market, which provides a large proportion of our business, isdeclining as social housing programmes near completion and as quality importedwindows gain a greater market share. However, we anticipate increasing ourmarket share of the available trickle ventilator market through our TrimventSelect Xtra range. The progress of Titon towards becoming a domestic ventilation systems supplier will continue and will be aided by the introduction of leading edge energy efficient products. Further growth in our exports, in our sales into the aluminium window market andour powered ventilation products is anticipated. Providing that any furtherincreases in UK interest rates do not significantly impact on the UK housebuilding industry, we believe that the improvement in the financial results canbe maintained. J N AndersonChairman10 May 2007 Consolidated Interim Income Statmentfor the six months ended 31 March 2007 Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Note £'000 £'000 £'000 Revenue 2 8,670 8,195 16,600 Operating profit 388 354 782 Finance income 51 66 112 -------------------------------- Profit before taxation 439 420 894Tax expense 3 (126) (118) (219)--------------------------------------------------------------------------------Profit for the period attributable tothe equity holders of the parent 7 313 302 675-------------------------------------------------------------------------------- Earnings per share - basic 5 2.97p 2.86p 6.40p - diluted 5 2.97p 2.85p 6.40p Consolidated Interim Statement of Recognised Income and Expensefor the six months ended 31 March 2007 Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Note £'000 £'000 £'000 Profit for the period attributable tothe equity holders of the parent 7 313 302 675 Exchange difference on re-translationof net assets of overseas subsidiaryundertakings 4 12 20--------------------------------------------------------------------------------Total recognised income and expensefor the period attributable to equityholders of the parent 317 314 695-------------------------------------------------------------------------------- Consolidated Interim Balance Sheetat 31 March 2007 31.3.07 31.3.06 30.9.06 Note £'000 £'000 £'000AssetsProperty, plant and equipment 6 4,854 4,984 5,009Intangible assets 63 57 67 ----------------------------Total non-current assets 4,917 5,041 5,076 Inventories 3,344 2,863 2,950Trade and other receivables 3,785 3,828 3,624Cash and cash equivalents 1,674 2,473 2,078 ----------------------------Total current assets 8,803 9,164 8,652--------------------------------------------------------------------------------Total Assets 13,720 14,205 13,728-------------------------------------------------------------------------------- LiabilitiesDeferred tax 185 104 170 ----------------------------Total non-current liabilities 185 104 170 Trade and other payables 2,491 2,883 2,362Bank overdraft 3 81 9Corporation tax 118 166 75 ----------------------------Total current liabilities 2,612 3,130 2,446--------------------------------------------------------------------------------Total Liabilities 2,797 3,234 2,616-------------------------------------------------------------------------------- EquityShare capital 1,056 1,055 1,056Share premium reserve 865 863 865Capital redemption reserve 56 56 56Translation reserve 21 9 17Share schemes reserve 3 2 2Retained earnings 8,922 8,986 9,116--------------------------------------------------------------------------------Total Equity attributable to theequity holders of the parent 7 10,923 10,971 11,112--------------------------------------------------------------------------------Total Liabilities and Equity 13,720 14,205 13,728-------------------------------------------------------------------------------- Consolidated Interim Cash Flow Statementfor the six months ended 31 March 2007 Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Note £'000 £'000 £'000Cash generated from operatingactivitiesProfit before taxation 439 420 894Depreciation of property, plant &equipment 339 315 682Amortisation on intangible assets 17 20 25Interest Income (51) (66) (112)Increase in inventories (391) (343) (424)(Increase)/decrease in receivables (160) (130) 76Increase/(decrease) in payables andother current liabilities 129 456 (66)Profit on sale of plant & equipment - (10) (22)Share based payment - equity settled 1 1 1--------------------------------------------------------------------------------Cash generated from operations 323 663 1,054--------------------------------------------------------------------------------Income taxes paid (68) (96) (221)--------------------------------------------------------------------------------Net cash generated from operatingactivities 255 567 833-------------------------------------------------------------------------------- Cash used in investing activitiesPurchase of plant & equipment 6 (195) (1,071) (1,485)Purchase of intangible assets (13) (71) (86)Proceeds from sale of plant & 11 24 58equipmentInterest received 51 66 112---------------------------- ---------------------------------------------------Net cash used in investing activities (146) (1,052) (1,401)---------------------------- ---------------------------------------------------Cash flows from financing activitiesDividends paid to equity shareholders 4 (507) (506) (749)Proceeds from issue of share capital - 24 27---------------------------- ---------------------------------------------------Net cash used in financing activities (507) (482) (722)-------------------------------------------------------------------------------- Net decrease in cash & cash equivalents (398) (967) (1,290)Cash & cash equivalents at beginningof period 2,069 3,359 3,359--------------------------------------------------------------------------------Cash & cash equivalents at end ofperiod 1,671 2,392 2,069--------------------------------------------------------------------------------Cash & cash equivalents comprise:Cash at bank 1,674 2,473 2,078Bank overdraft (3) (81) (9)--------------------------------------------------------------------------------Cash & cash equivalents at end ofperiod 1,671 2,392 2,069-------------------------------------------------------------------------------- Notes to the Consolidated Interim Statementat 31 March 2007 1. Basis of preparation The consolidated interim financial statements of the Group for the six monthsended 31 March 2007 incorporates Titon Holdings Plc ("the Company") and itssubsidiaries (together referred to as "the Group"). The consolidated interim financial statements have been prepared usingaccounting policies set out in the Annual Report and Accounts 2006 and wereauthorised by the Board of Directors for release on 10 May 2007. The consolidated interim financial statements for the six months ended31 March 2007 and 31 March 2006 have not been audited. The results for the yearend 30 September 2006 and the balance sheet as at that date are abridged fromthe Group's Annual Report and Financial Statements 2006, prepared under IFRS,which have been delivered to the Registrar of Companies. The auditors' report onthose Financial Statements was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The interim statement does notconstitute 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 theCompany'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 arecurrently analysed according to geographical regions. This is the basis on whichthe Group reports its primary segment information. The Group's business is comprised of the following reportable geographicsegments:United KingdomRest of the World Segment information about the geographic regions is presented below. United Kingdom Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 £'000 £'000 £'000External 7,595 7,180 14,427Intercompany - - --------------------------------------------------------------------------------- Total Revenue 7,595 7,180 14,427-------------------------------------------------------------------------------- Segment result 1,132 1,079 2,197-------------------------------------------------------------------------------- Rest of the World Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 £'000 £'000 £'000External 1,075 1,015 2,173Intercompany 185 163 291-------------------------------------------------------------------------------- Total Revenue 1,260 1,178 2,464 -------------------------------------------------------------------------------- Segment result 111 98 247 -------------------------------------------------------------------------------- Consolidated Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 £'000 £'000 £'000External 8,670 8,195 16,600Intercompany 185 163 291-------------------------------------------------------------------------------- Total Revenue 8,855 8,358 16,891-------------------------------------------------------------------------------- Segment result 1,243 1,177 2,444Unallocated expenses (855) (823) (1,662)-------------------------------------------------------------------------------- Operating profit 388 354 782Finance income 51 66 112--------------------------------------------------------------------------------Profit before tax 439 420 894Tax expense (126) (118) (219)-------------------------------------------------------------------------------- Profit for the period attributable to theequity holders of the parent 313 302 675-------------------------------------------------------------------------------- 3.Tax expense Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 £'000 £'000 £'000UK corporation tax 105 108 191Adjustment in respect of over provisionin prior years - - (33)--------------------------------------------------------------------------------Total UK corporation tax 105 108 158-------------------------------------------------------------------------------- Overseas tax 6 10 7Adjustment in respect of over provisionin prior years - - (11)--------------------------------------------------------------------------------Total overseas tax 6 10 (4)--------------------------------------------------------------------------------Total current tax 111 118 154--------------------------------------------------------------------------------Deferred tax 15 - 65--------------------------------------------------------------------------------Total tax 126 118 219-------------------------------------------------------------------------------- Tax for the interim period is charged at 28.7% (six months to 31 March 2006:28.1%) representing the best estimate of the average annual effective income taxrate for the full financial year. 4. Dividends An interim dividend in respect of the six months ended 31 March 2007 of 2.3p pershare, amounting to a total dividend of £243,000, was approved by the Directorsof Titon Holdings Plc on 9 May 2007. These consolidated interim statements donot reflect the dividend payable. The interim dividend will be payable on 28 June 2007 to the shareholders on theregister on 1 June 2007. The ex dividend date is 30 May 2007. The following dividends have been recognised and paid by the Company: Six Months Six Months Year to to 31.3.07 to 31.3.06 30.9.06 Date Pence paid per share £'000 £'000 £'000 Final 24.2.06 4.8 - 506 506Interim 30.6.06 2.3 - - 243Final 21.2.07 4.8 507 - - -------- -------- ------- 507 506 749 -------- -------- ------- 5. Earnings per ordinary share Basic earnings per share has been calculated by dividing the profit attributableto shareholders by the weighted average number of ordinary shares in issueduring the period, being 10,555,650 (six months ended 31 March 2006: 10,552,500;year ended 30 September 2006: 10,547,501). Diluted earnings per share has been calculated by dividing the profitattributable to shareholders by the weighted average number of ordinary sharesand potential dilutive ordinary shares during the period, being 10,555,650 (sixmonths ended 31 March 2006: 10,586,129; year ended 30 September 2006:10,549,207). All dilutive ordinary shares relate to share options. 6. Property, plant and equipment Acquisition and disposals During the six months ended 31 March 2007, the Group acquired assets with a costof £195,000 (six months to 31 March 2006: £1,071,000; year ended 30 September2006: £1,485,000). Assets with a net book value of £11,000 were disposed ofduring the six months ended 31 March 2007 (six months ended 31 March 2006:£11,000; year ended 30 September 2006: £36,000). 7. Changes in Equity Share Share Capital Translation Share Retained Total capital premium redemption reserve schemes earnings Equity reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1 Oct 2005 1,053 841 56 (3) 1 9,190 11,138 Profit for theperiod - - - - - 302 302Dividends paid - - - - - (506) (506)Shares issuedunder theCompany'sshare optionscheme 2 22 - - - - 24Share-basedpaymentexpense - - - - 1 - 1Translationdifferences onoverseasoperations - - - 12 - - 12--------------------------------------------------------------------------------At 31 Mar 2006 1,055 863 56 9 2 8,986 10,971 Profit for theperiod - - - - - 373 373Dividends paid - - - - - (243) (243)Shares issuedunder theCompany'sshare optionscheme 1 2 - - - - 3Translationdifferences onoverseasoperations - - - 8 - - 8--------------------------------------------------------------------------------At 30 Sep 2006 1,056 865 56 17 2 9,116 11,112 Profit for theperiod - - - - - 313 313Dividends paid - - - - - (507) (507)Share-basedpaymentexpense - - - - 1 - 1Translationdifferences onoverseasoperations - - - 4 - - 4--------------------------------------------------------------------------------At 31 Mar 2007 1,056 865 56 21 3 8,922 10,923-------------------------------------------------------------------------------- Directors and Advisors DIRECTORS ExecutiveJ N Anderson (Chairman)D A Ruffell (Chief Executive)T N AndersonR BrightonN C HowlettC S JarvisC J MartinNon-ExecutiveP W E Fitt (Vice-Chairman)P E O'SullivanK A Ritchie SECRETARY AND REGISTERED OFFICED A RuffellInternational HousePeartree RoadStanwayColchesterEssex CO3 0JLUnited Kingdom COMPANY REGISTRATION NUMBER1604952 (Registered in England & Wales) AUDITORSBDO Stoy Hayward LLP8 Baker StreetLondonW1U 3LL BROKERSEvolution Securities Limited100 Wood StreetLondonEC2V 7AN SOLICITORSMacfarlanes10 Norwich StreetLondon EC4A 1BD REGISTRARS AND TRANSFER OFFICECapita IRG PlcNorthern HouseWoodsome ParkFenay BridgeHuddersfieldHD8 0LA BANKERSBarclays Bank PlcWitham Business CentreWithamEssex CM8 2AT This information is provided by RNS The company news service from the London Stock Exchange