Titon Regulatory News (TON)

7 Dec 2006 07:01

Titon Holdings PLC07 December 2006 Titon Holdings PlcPreliminary announcement for the year ended 30 September 2006 Chairman's Statement Financial Performance Profit before taxation for the year to 30 September 2006 was 24.5% down at £0.89million (2005: £1.18 million), on Revenue 1.0% higher at £16.60 million (2005:£16.44 million). Earnings per share were 20.8% lower at 6.40p (2005: 8.08p).This has been a heavy year for capital expenditure with a £1.48 million spend,compared to a £0.68 million depreciation charge, reducing our year-end cashreserves to £2.07 million (2005: £3.36 million). The Directors are proposing a final dividend of 4.8p (2005: 4.8p), which whenadded to the interim dividend paid in May 2006, makes a total for the year of7.1p (2005: 7.1p). The dividend will be payable on 23 February 2007 toshareholders on the register on 2 February 2007. The ex-dividend date is 31January 2007. Trading Commentary This has been a difficult year, largely due to a combination of uncertainty inthe timing of Building Regulation implementation and a significant downturn inmarket activity in the months of April and May, which disguised an improvedperformance toward the end of the year. In my 2006 interim report I informed shareholders that the new BuildingRegulations (England and Wales) for Ventilation were published in April 2006,and that the requirement to fit trickle ventilators in all replacement windowshad been included with effect from October 2006. It is now most disappointing tohave to report that this important part of the Regulation was controversiallywithdrawn only two weeks before the proposed implementation date. The reason isthat, following a challenge from sections of the window industry, the Governmentdepartment involved decided that the costs might outweigh the benefits. One of the key objectives highlighted in the original Regulatory ConsultationDocument was to address major health issues, such as asthma and otherrespiratory illnesses, through the improvement of indoor air quality. It is welldocumented that new tightly sealed double-glazed windows can reduce indoor airquality to an unacceptable level and this was an opportunity for the Governmentto introduce consistent regulation for controlled ventilation. However, ratherthan introduce such regulation it has allowed the window industry to fit trickleventilators on the basis of "Good Practice", which in the view of the Directorsmay not achieve the health benefits hoped for by Government. We have investedsome £0.3 million on specific plant and tooling to introduce product for thispart of the Regulation, as well as a great deal of design, development andtechnical resource. We must now wait and see what the impact of the GoodPractice Document will be in order to determine whether value is achieved forthis investment. The indecision and change has been most disconcerting and Iwill update shareholders further at the interim stage of 2006/2007. We have launched our new Titon range of Trimvent Select Xtra ventilators forboth the new-build and replacement window market and they have been wellreceived by the industry. These products provide a much increased airflowperformance over the majority of ventilators on the market and we are confidentthat, in combination with our powered ventilation range, they will provideeffective compliant solutions for all domestic ventilation needs. We haveprovided an enhanced level of marketing activity to support our enlarged directsales force and are pleased with the level of new customers and thespecifications being gained. Our Export sales have again increased and now account for 13% of total revenue.One disappointing aspect of our overseas activity was our US subsidiary, TitonInc, where revenue was 9% lower, reflecting the downturn in US building activityover the year. I reported last year that measures taken to reduce our cost base and improvemanufacturing efficiency had benefited us. The difficulties of manufacturing inthe UK are well known and efficiency improvements need to be ongoing in orderfor us to remain competitive. For this reason we continue to seek cost effectivesupply options from overseas to complement our UK manufacturing base. Employees Our overall employee base remains similar to last year, but includes a greaternumber of sales personnel. Our employees remain a vital part of the strength ofour business and their continued support for the Group is most important as weseek new initiatives. I wish to thank them all for their efforts during thesedifficult and changing times. Prospects The implications of the Government U-turn on the replacement window regulationshave yet to be determined. We will actively support the window industry withtheir efforts to introduce and adhere to Ventilation Good Practice and hope thatthis may have a positive impact. As far as new build is concerned, our newTrimvent Select Xtra products and our ability to provide total solutions viapowered and passive products should enable us to increase market share. The new financial year has started with reasonably strong sales being recorded.Although the recent increase in UK interest rates is likely to have adetrimental effect on demand as the year progresses, the Directors believe thatthe enhanced product offering, an increase in market activity and further costsaving initiatives should offset this. John AndersonChairman 6 December 2006 Titon Holdings PlcPreliminary announcement for the year ended 30 September 2006 Consolidated Income Statementfor the year ended 30 September 2006 2006 2005 £'000 £'000Revenue 16,600 16,436Cost of sales 12,439 12,372--------------------------------------------------------------------------------Gross profit 4,161 4,064 Distribution costs 690 648Administrative expenses 2,689 2,388-------------------------------------------------------------------------------- 3,379 3,036 ----------------------Operating profit 782 1,028Finance income 112 151--------------------------------------------------------------------------------Profit before tax 894 1,179Tax expense 219 328--------------------------------------------------------------------------------Profit for the year attributableto the equity holders of the parent 675 851--------------------------------------------------------------------------------Earnings per share - basic 6.40p 8.08p - diluted 6.40p 8.06p Consolidated Statement of Recognised Income & Expensefor the year ended 30 September 2006 2006 2005 £'000 £'000Profit for the year attributable to theequity holders of the parent 675 851 Exchange difference on retranslation ofnet assets of subsidiary undertakings 20 (3)--------------------------------------------------------------------------------Total recognised income and expense for the year 695 848attributable to equity holders of the parent-------------------------------------------------------------------------------- Titon Holdings PlcPreliminary announcement for the year ended 30 September 2006 Consolidated Balance Sheetat 30 September 2006 2006 2005 £'000 £'000AssetsProperty, plant and equipment 5,009 4,242Intangible assets 67 6 --------------------Total non-current assets 5,076 4,248 --------------------Inventories 2,950 2,511Trade and other receivables 3,624 3,695Cash and cash equivalents 2,078 3,380 --------------------Total current assets 8,652 9,586--------------------------------------------------------------------------------Total Assets 13,728 13,834--------------------------------------------------------------------------------LiabilitiesDeferred tax 170 104 -------------------Total non-current liabilities 170 104 -------------------Trade and other payables 2,362 2,427Bank overdraft 9 21Corporation tax 75 144 -------------------Total current liabilities 2,446 2,592--------------------------------------------------------------------------------Total Liabilities 2,616 2,696--------------------------------------------------------------------------------EquityShare capital 1,056 1,053Share premium reserve 865 841Capital redemption reserve 56 56Translation reserve 17 (3)Share schemes reserve 2 1Retained earnings 9,116 9,190--------------------------------------------------------------------------------Total Equity attributable to equity holdersof the parent 11,112 11,138 -------------------------------------------------------------------------------- --------------------------------------------------------------------------------Total Liabilities and Equity 13,728 13,834-------------------------------------------------------------------------------- Titon Holdings PlcPreliminary announcement for the year ended 30 September 2006 Consolidated Cash Flow Statementfor the year ended 30 September 2006 2006 2005 £'000 £'000Cash generated from operating activities Operating profit 782 1,028Depreciation of plant & equipment 682 594Amortisation on intangible assets 25 5(Increase) / decrease in inventories (424) 69Decrease / (increase) in receivables 76 (494)(Decrease) / increase in payablesand other current liabilities (66) 270Profit on sale of plant & equipment (22) (19)Share based payment - equity settled 1 1--------------------------------------------------------------------------------Cash generated from operations 1,054 1,454--------------------------------------------------------------------------------Income taxes paid (221) (271)--------------------------------------------------------------------------------Net cash generated from operating activities 833 1,183--------------------------------------------------------------------------------Cash flows from investing activities Purchase of property, plant & equipment (1,485) (569)Purchase of intangible assets (86) -Proceeds from sale of plant & equipment 58 30Interest received 112 151--------------------------------------------------------------------------------Net cash used in investing activities (1,401) (388)--------------------------------------------------------------------------------Cash flows from financing activities Dividends paid to equity shareholders (749) (747)Proceeds from issue of share capital 27 ---------------------------------------------------------------------------------Net cash used in financing activities (722) (747)-------------------------------------------------------------------------------- Net (decrease) / increase in cash & cash equivalents (1,290) 48Cash & cash equivalents at beginning of the year 3,359 3,311--------------------------------------------------------------------------------Cash & cash equivalents at end of the year 2,069 3,359-------------------------------------------------------------------------------- Titon Holdings PlcNotes to the preliminary announcement for the year ended 30 September 2006 1) Earnings per ordinary share The calculation of the basic and diluted earnings per share is based on thefollowing data: 2006 2005 £'000 £'000EarningsEarnings for the purposes of basic earnings per sharebeing profit after taxation attributable to membersof Titon Holdings Plc 675 851-------------------------------------------------------------------------------- Shares Number Number Weighted average number of ordinary shares for thepurposes of basic earnings per share 10,547,501 10,528,800Effect of dilutive potential ordinary shares : share options 1,706 48,052--------------------------------------------------------------------------------Weighted average number of ordinary shares for thepurposes of diluted earnings per share 10,549,207 10,576,852--------------------------------------------------------------------------------Earnings per share (pence)Basic 6.40p 8.08pDiluted 6.40p 8.06p-------------------------------------------------------------------------------- All dilutive ordinary shares relate to share options. 2) Dividends 2006 2005 £'000 £'000 Final dividend of 4.8 pence ( 2005 : 4.8 pence) per 506 505ordinary share paid and proposed during the yearrelating to the previous year's results--------------------------------------------------------------------------------Interim dividend of 2.3 pence ( 2005: 2.3 p) per 243 242ordinary share paid during the period-------------------------------------------------------------------------------- 749 747-------------------------------------------------------------------------------- The directors are proposing a final dividend of 4.8 pence (2005 : 4.8 pence) pershare totalling £507,000 (2005 - £506,000), subject to approval by theshareholders at the Annual General Meeting. This dividend has not been accruedat the balance sheet date. Titon Holdings PlcNotes to the preliminary announcement for the year ended 30 September 2006 3) Analysis of cash and cash equivalents 2006 2005 £'000 £'000Cash available on demand 58 118Short-term deposits 2,020 3,262Overdraft (9) (21)-------------------------------------------------------------------------------- 2,069 3,359--------------------------------------------------------------------------------Net cash (decrease) / increase in cash and cash equivalents (1,290) 48Cash and cash equivalents at beginning of year 3,359 3,311--------------------------------------------------------------------------------Cash and cash equivalents at end of year 2,069 3,359-------------------------------------------------------------------------------- 4) Basis of Preparation This is the first year when the consolidated financial statements have beenprepared in accordance with International Financial Reporting Standards (IFRS)issued by the International Accounting Standards Board (IASB). The comparativesfor 2005 have accordingly been restated from UK Generally Accepted AccountingPractice (UK GAAP). The accounting polices of the Group under IFRS, including the exemptions takenunder IFRS 1 "First-time Adoption of International Financial ReportingStandards", together with the restated IFRS financial statements for 2005, whichinclude reconciliations of UK GAAP to IFRS, are set out in detail in the 2006Interim Statement which is available from the Group's website on www.titon.com,and will be included in the full 2006 annual report and accounts. The financial information set out above does not constitute the Group'sstatutory accounts for the years ended 30 September 2006 or 2005. Statutoryaccounts for 2005, which were prepared under UK GAAP, have been delivered to theRegistrar of Companies. The auditors have reported on those accounts; theirreport was unqualified and did not contain a statement under section 237(2) or(3) of the Companies Act 1985. The statutory accounts for 2006 which areprepared under IFRS adopted by the EU, on which the auditors have not yetreported, will be finalised on the basis of the financial information presentedby the Directors in this preliminary announcement and will be delivered to theRegistrar of Companies following the Company's Annual General Meeting. This information is provided by RNS The company news service from the London Stock Exchange