Titon Regulatory News (TON)

8 May 2008 07:00

Titon Holdings PLC08 May 2008 Titon Holdings PlcInterim Results for the six months ended 31 March 2008 Business Review Financial performance Profit before taxation for the six months was 65.6% lower than the same periodlast year at £151,000 (2007: £439,000) on turnover 2.0% lower at £8,500,000(2007: £8,670,000). We have maintained our sales levels in the UK, whilst ourexport sales for the period have fallen by 17% to £891,000 (2007: £1,075,000). Earnings per share for the period were 64.3% lower at 1.06p (2007: 2.97p) andthe Directors have declared an interim dividend of 1.0p per share (2007: 2.3pper share). Tight control over Working Capital along with reduced levels of capitalexpenditure have helped cash balances to increase by £256,000 over the six-monthperiod to stand at £1,921,000 (2007: £1,671,000). Trading commentary As I reported in the last Annual Report and Accounts, trading during the secondhalf of the 2006/2007 financial year was very difficult and the Group only justreturned a profit over that six month period. I informed shareholders at thetime that a programme of measures had been initiated that was designed torestore profitability during the current year. I am pleased to report that theresult of these measures has been a modest profit for the first six months ofthis year. Some of the profit improvement measures that are being implementedwill be phased in over the year as contractual commitments end and will not havehad a full impact in the first half-year. We will continue to make every effortto improve the Group's profitability. One of the results of our cost reduction programme has been a 5% fall in ourpayroll costs in the period when compared to the 2nd half of 2006/7. Ouremployees have not been given a pay increase this year and I would like to takethis opportunity to thank them all for their contribution in these difficultcircumstances. Overall employee numbers were 239 at the end of March 2008compared to 256 at 30 September 2007. Escalating raw material price increases have been a great issue for mostmanufacturers although, during this first half-year, we have been able to passon some of this increased cost to our customers. We have, however, continued tosee costs increase - not least as a result of the Euro strengthening by afurther 12% in the six months against Sterling. Towards the end of the period, confidence within the UK housing market has beenadversely affected by the international financial credit crisis and the numberof new housing starts has significantly reduced. It is apparent that the effectsof this are not limited to the UK, with most European markets experiencingsimilar declines. The full impact of this change in market confidence is as yetunknown, but will almost certainly require a further adjustment to our cost basein the second half-year. Prospects New building processes are being introduced as construction of 'tighter' homesbecomes a requirement for the Government's 'Sustainable Homes' initiative. Titonhas already adjusted to the requirement for improved ventilation systems fordomestic use and is able to supply highly efficient units that provide excellentSAP (Standard Assessment Procedure) ratings. Additional products to beintroduced later in the summer will further improve upon the performance ofthose currently available. Integrated within these systems our naturalventilation products will ensure both 'energy neutral' and 'fail-safe' optionsto help minimise the impact on our national energy resources; a factor which webelieve to be essential as we progress. As previously mentioned, most sectors of our markets remain under pressure andthere is no doubt that the remainder of this year will be challenging. We willcontinue with our longer-term investment plans in the UK powered ventilationmarket whilst re-organising our traditional UK hardware business to reflect thecurrent market conditions Principal risk and uncertainties The key financial and non-financial risks faced by the Group are disclosed inthe Group's Annual Report and Accounts for the year ended 30 September 2007within the Directors' Report (page 7) available at www.titonholdings.com. TheBoard considers that these remain a current reflection of the risks anduncertainties facing the business. Statement of Directors' responsibilities The Directors confirm that this condensed set of consolidated financialstatements has been prepared in accordance with IAS 34 as adopted by theEuropean Union, and that the interim management report herein includes a fairreview 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 AnnualReport and Accounts 2007. A list of current directors is maintained on theGroup's website: www.titonholdings.com. On behalf of the Board J N Anderson D A RuffellChairman Chief Executive 8 May 2008 Titon Holdings Plc Consolidated Interim Income Statementfor the six months ended 31 March 2008 Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Note £'000 £'000 £'000 Revenue 2 8,500 8,670 17,285 Cost of sales 6,640 6,641 13,482 --------- --------- ---------Gross Profit 1,860 2,029 3,803 Distribution costs 310 292 618Administration costs 1,446 1,349 2,828 --------- --------- --------- 1,756 1,641 3,446 Operating profit 104 388 357 Finance income 47 51 102 --------- --------- --------- Profit before taxation 151 439 459 Tax expense 3 (39) (126) (15)--------------------------------------- --------- --------- ---------Profit for the period attributable tothe equity holders of the parent 7 112 313 444--------------------------------------- --------- --------- --------- Earnings per share - basic 5 1.06p 2.97p 4.21p - diluted 5 1.06p 2.97p 4.21p Titon Holdings Plc Consolidated Interim Statement of Recognised Income and Expensefor the six months ended 31 March 2008 Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Note £'000 £'000 £'000 Profit for the period attributable tothe equity holders of the parent 7 112 313 444 Exchange difference on re-translationof net assets of overseas subsidiaryundertakings 7 4 16--------------------------------------- --------- --------- ---------Total recognised income and expensefor the period attributable to equity holders of the parent 119 317 460 --------------------------------------- --------- --------- --------- Titon Holdings Plc Consolidated Interim Balance Sheetat 31 March 2008 31.3.08 31.3.07 30.9.07 Note £'000 £'000 £'000Assets Property, plant and equipment 6 4,481 4,854 4,662Intangible assets 39 63 58 -------- -------- --------Total non-current assets 4,520 4,917 4,720 Inventories 2,924 3,344 2,983Trade and other receivables 4,027 3,785 3,785Corporation tax 17 - 31Cash at bank 1,958 1,674 1,678 -------- -------- --------Total current assets 8,926 8,803 8,477------------------------------------------- -------- -------- --------Total Assets 13,446 13,720 13,197------------------------------------------- -------- -------- -------- Liabilities Deferred tax 170 185 170 -------- -------- --------Total non-current liabilities 170 185 170 Trade and other payables 2,493 2,491 2,190Bank overdraft 37 3 13Corporation tax - 118 - -------- -------- --------Total current liabilities 2,530 2,612 2,203----------------------------------------- -------- -------- --------Total Liabilities 2,700 2,797 2,373----------------------------------------- -------- -------- -------- Equity Share capital 1,056 1,056 1,056Share premium reserve 865 865 865Capital redemption reserve 56 56 56Translation reserve 40 21 33Share schemes reserve 3 3 3Retained earnings 8,726 8,922 8,811----------------------------------------- -------- -------- --------Total Equity attributable to the equityholders of the parent 7 10,746 10,923 10,824----------------------------------------- -------- -------- -------- ----------------------------------------- -------- -------- -------- Total Liabilities and Equity 13,446 13,720 13,197----------------------------------------- -------- -------- -------- Titon Holdings Plc Consolidated Interim Cash Flow Statementfor the six months ended 31 March 2008 Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Note £'000 £'000 £'000Cash generated from operating activities Operating profit 104 388 357Depreciation of property, plant &equipment 333 339 675Amortisation on intangible assets 12 17 35Decrease / (increase) in inventories 64 (391) (33)Increase in receivables (240) (160) (149)Increase / (decrease) in payables andother current liabilities 303 129 (168)Profit on sale of plant & equipment (6) - (31)Share based payment - equity settled - 1 1--------------------------------------- -------- -------- -------Cash generated from operations 570 323 687--------------------------------------- -------- -------- ------- Income taxes paid (25) (68) (121)--------------------------------------- -------- -------- -------Net cash generated from operatingactivities 545 255 566--------------------------------------- -------- -------- ------- Cash flows from investing activities Purchase of plant & equipment 6 (153) (195) (363)Purchase of intangible assets - (13) (26)Proceeds from sale of plant & equipment 14 11 66Interest received 47 51 102--------------------------------------- -------- -------- -------Net cash used in investing activities (92) (146) (221)--------------------------------------- -------- -------- -------Cash flows from financing activities Dividends paid to equity shareholders 4 (197) (507) (749)--------------------------------------- -------- -------- -------Net cash used in financing activities (197) (507) (749)--------------------------------------- -------- -------- ------- Net increase / (decrease) in cash &cash equivalents 256 (398) (404)Cash & cash equivalents at beginningof period 1,665 2,069 2,069--------------------------------------- -------- -------- -------Cash & cash equivalents at end ofperiod 1,921 1,671 1,665--------------------------------------- -------- -------- ------- Cash & cash equivalents comprise:Cash at bank 1,958 1,674 1,678Bank overdraft (37) (3) (13)--------------------------------------- -------- -------- -------Cash & cash equivalents at end ofperiod 1,921 1,671 1,665--------------------------------------- -------- -------- ------- Titon Holdings Plc Notes to the Condensed Consolidated Interim Statementsat 31 March 2008 1. Basis of preparation These condensed and consolidated interim financial statements of the Group forthe six months ended 31 March 2008 incorporate Titon Holdings Plc ("theCompany") 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 2007 and inaccordance with IAS 34, 'Interim financial reporting', as adopted by theEuropean Union and were authorised by the Board of Directors for release on8 May 2008. The accounting standard IFRS 7, Financial Instruments: Disclosures is mandatoryfor accounting periods beginning on or after 1 January 2007. As this interimstatement contains only condensed financial statements, full IFRS 7 disclosuresare not required at this stage. The full disclosures, including any sensitivityanalysis to market risk will be given in the Group's Annual Report. The consolidated interim financial statements for the six months ended 31 March2008 and 31 March 2007 have not been audited or reviewed. The results for theyear end 30 September 2007 and the balance sheet as at that date are abridged from the Group's Annual Report and Financial Statements 2007, prepared underIFRS, 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 Section237(2) or (3) of the Companies Act 1985. The interim statement does notconstitute full accounts within the meaning of Section 240 of the Companies Act1985. 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 Rest of the World Six Months Six Months Year to Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 to 31.3.08 to 31.3.07 30.9.07 £'000 £'000 £'000 £'000 £'000 £'000 External 7,609 7,595 15,275 891 1,075 2,010 Intercompany - - - 135 185 297 ------------- ------- ------- ------ ------- ------- ------ Total Revenue 7,609 7,595 15,275 1,026 1,260 2,307 ------------- ------- ------- ------ ------- ------- ------ Segment result 1,059 1,132 2,173 61 111 138 Consolidated Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 £'000 £'000 £'000 External 8,500 8,670 17,285Intercompany 135 185 297------------- ------- ------- ------Total Revenue 8,635 8,855 17,582------------- ------- ------- ------ Segment result 1,120 1,243 2,311Unallocated expenses (1,016) (855) (1,954) ------- ------- ------ Operating profit 104 388 357Finance income 47 51 102 ------- ------- ------ Profit before tax 151 439 459 Tax expense (39) (126) (15)--------------------------------------- ------- ------- ------Profit for the period attributable tothe equity holders of the parent 112 313 444--------------------------------------- ------- ------- ------ Balance Sheet 31.3.08 31.3.07 30.9.07 £'000 £'000 £'000Assets - Segment total assets United Kingdom 13,210 13,400 12,980Rest of World 236 320 217------------------------------------------ ------- -------- -------Consolidated 13,446 13,720 13,197------------------------------------------ ------- -------- -------Liabilities - Segment total liabilities United Kingdom 2,664 2,769 2,351Rest of World 36 28 22----------------------------------------- ------- -------- -------Consolidated 2,700 2,797 2,373----------------------------------------- ------- -------- ------- 3. Tax expense Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 £'000 £'000 £'000 UK corporation tax 29 105 34Adjustment in respect of over provision in prior years 4 - (28)--------------------------------------- ----------- -------- -------Total UK corporation tax 33 105 6--------------------------------------- ----------- -------- ------- Overseas tax 6 6 9Adjustment in respect of over provision - - -in prior years --------------------------------------- ----------- -------- -------Total overseas tax 6 6 9--------------------------------------- ----------- -------- -------Total current tax 39 111 15--------------------------------------- ----------- -------- -------Deferred tax - 15 - ----------- -------- -------Total tax 39 126 15 ----------- -------- ------- Tax for the interim period is charged at 23.2% (six months to 31 March 2007:28.7%) 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 2008 of 1.0p pershare, amounting to a total dividend of £106,000 was approved by the Directorsof Titon Holdings Plc on 7 May 2008. These consolidated interim statements donot reflect the dividend payable. The interim dividend will be payable on 26 June 2008 to the shareholders on theregister on 30 May 2008. The ex dividend date is 28 May 2008. The following dividends have been recognised and paid by the Company: Six Months Six Months Year to to 31.3.08 to 31.3.07 30.9.07 Date Pence paid per share £'000 £'000 £'000 Final in respect of theyear end 30.09.06 21.2.07 4.8 - 507 507 Interim in respect ofthe year end 30.09.07 30.6.07 2.3 - - 242 Final in respect of theyear end 30.09.07 18.2.08 2.3 197 - - -------- -------- ------- 197 507 749 -------- -------- ------- 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 2007: 10,555,650;year ended 30 September 2007: 10,555,650). 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 2007: 10,555,650; year ended 30 September 2007:10,555,650). 6. Property, plant and equipment Acquisition and disposals During the six months ended 31 March 2008, the Group acquired assets with a costof £153,000 (six months to 31 March 2007: £195,000; year ended 30 September2007: £363,000). Assets with a net book value of £8,000 were disposed of duringthe six months ended 31 March 2007 (six months ended 31 March 2006: £11,000;year ended 30 September 2007: £35,000). 7. Changes in Equity Share Share Capital Translation Share Retained Total capital premium redemption reserve schemes earnings Equity reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 01.10.2006 1,056 865 56 17 2 9,116 11,112 Profit for period - - - - - 313 313Dividends paid - - - - - (507) (507)Share-basedpayment expense - - - - 1 - 1Translationdifferences onoverseas operations - - - 4 - - 4-------------------------------------------------------------------------------- At 31.03 2007 1,056 865 56 21 3 8,922 10,923 Profit for period - - - - - 131 131Dividends paid - - - - - (242) (242)Translationdifferences onoverseas operations - - - 12 - - 12-------------------------------------------------------------------------------- At 30.09.2007 1,056 865 56 33 3 8,811 10,824 Profit for period - - - - - 112 112Dividends paid - - - - - (197) (197)Translationdifferences onoverseas operations - - - 7 - - 7--------------------------------------------------------------------------------At 31.03.2008 1,056 865 56 40 3 8,726 10,746-------------------------------------------------------------------------------- 8. Related party transactions There have been no additional significant or unusual related party transactionsto those disclosed in the Group's Annual Report for 30 September 2007. 9. Subsidiaries Liquidation of subsidiary Titon BV a subsidiary company formerly incorporated in the Netherlands wasliquidated on 5 October 2007. A final distribution was made to the parentcompany Titon Holdings Plc. Foreign exchange differences which had arisen fromthe translation of the financial statements of Titon BV were recycled and takento the income statement. Titon Holdings PlcDirectors and Advisors DIRECTORS ExecutiveJ N Anderson (Chairman)D A Ruffell (Chief Executive)T N AndersonR BrightonN C HowlettC S JarvisC J Martin Non-Executive P W E Fitt (Vice-Chairman)P E O'SullivanK A Ritchie SECRETARY AND REGISTERED OFFICED A RuffellInternational HousePeartree RoadStanwayColchesterEssexCO3 0JL COMPANY REGISTRATION NUMBER1604952 (Registered in England & Wales) WEBSITEwww.titonholdings.com AUDITORS REGISTRARS AND TRANSFER OFFICEBDO Stoy Hayward LLP Capita Registrars Ltd55 Baker Street Northern HouseLondon Woodsome ParkW1U 7EU Fenay Bridge Huddersfield HD8 0LABROKERSEvolution Securities Limited100 Wood StreetLondonEC2V 7AN BANKERSBarclays Bank PlcWitham Business CentreWitham, EssexCM8 2AT SOLICITORSMacfarlanes10 Norwich StreetLondonEC4A 1BD This information is provided by RNS The company news service from the London Stock Exchange