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Holders Technology PLC  -  HDT   

Half-year Report

Released 07:00 28-Jul-2017

RNS Number : 3475M
Holders Technology PLC
28 July 2017
 

 

 

 

 

 

 

 

Holders Technology plc

Half Yearly Report 2017

 

Specialised PCB Materials, LED Components, and Lighting Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highlights

 

Holders Technology plc supplies specialty laminates and materials for printed circuit board manufacturers ("PCB"), and operates as an LED solutions provider to the lighting and industrial markets.

 

Unaudited results for the period ended 31 May are summarised as follows:

 

 

 

2017

2016

 

 

£'000

£'000

 

 

 

 

Revenue

PCB

4,577

4,014

 

LED

1,210

1,648

 

Total

5,787

5,662

 

 

 

 

Gross profit

1,472

1,381

Margins

 

25.4%

24.4%

 

 

 

 

Overheads

1,520

1,546

 

 

 

 

Operating loss before restructuring costs (2016 only)

(48)

(68)

 

 

 

 

Loss before taxation

 (53)

(171)

 

 

 

 

Earnings per share

(1.56p)

(4.31p)

Interim dividend per share

0.25p

0.25p

Net assets per share

92p

94p

 

 

Contents

 

1.   Chairman's statement

 

2.   Consolidated income statement

 

2.   Consolidated statement of comprehensive income

 

3.   Consolidated statement of changes in equity

 

4.   Consolidated balance sheet

 

5.   Consolidated cash flow statement

 

6.   Notes

 

Chairman's statement

Half year ended 31 May 2017

 

 

These interim results show an improvement as compared to the equivalent period in 2016. Revenue increased by 2.2% to £5.8m (2016: £5.7m) and the operating loss before restructuring costs reduced from £68,000 to £48,000 (there were no restructuring costs in 2017).  The group result before taxation improved from a £171,000 loss to a £53,000 loss.  Group revenues were increased by the strength of the Euro during the period.

 

PCB

 

PCB sales in the period increased by 14% from £4,014,000 in 2016 to £4,577,000, and PCB margins increased by 2.8% to 23.9%. Our continuing PCB activities, in the UK and Germany, benefitted from improved market conditions and achieved an increase in sales in the period. Both divisions saw some additional benefit from recently introduced products and a continuing gain from production efficiencies. We continue to invest in improvements both to our IT systems and production equipment.  

 

Following the restructuring process announced last year, PCB overheads as a percentage of sales were reduced by 3.0% to 17.2%. Overall our PCB activities recorded a profit of £157,000 (2016: loss £99,000).

 

LED

 

I announced in my previous report accompanying the 2016 Report & Accounts, that the Opteon Germany division had been closed, and the NRGstar results were disappointing.  The activities of the NRGstar division are being discontinued. This has inevitably resulted in lower total LED sales as compared to the 2016 interim figures.  We expect to see the benefit of these measures in the second half of the current year.

 

Taken together, the continuing LED divisions achieved improved margins during the period and experienced encouraging customer reaction to recently introduced new products in the smart lighting field.

 

Total LED revenue for the period was £1,210,000 (2016: £1,648,000).  Margins decreased slightly from 32.3% to 31.4%.  The overall LED result was a £194,000 loss (2016: £61,000 loss).

 

Summary

 

PCB activities, which comprise some 80% of the Group, were ahead of our expectations in the first half and should be well placed for the balance of the year. We expect our LED divisions in the second half of the year to see the benefit of a lower overall cost base and a positive impact from the smart lighting technologies we are now able to offer.  

 

 

 

Rudolf W. Weinreich                                                                                                     Holders Technology plc                               

Executive Chairman                                                                                                        27-28 Eastcastle Street

                                                                                                                                                London

                                                                                                                                                W1W 8HD

 

 

 

 

 

 

 

Consolidated income statement

for the half year ended 31 May 2017 (Unaudited)

 

 

 

Half year

ended 31

May 2017

 

Half year

ended 31

May 2016

 

Full year

ended 30

Nov 2016

Notes

£'000

 

£'000

 

£'000

 

Revenue

5,787

 

5,662

 

11,380

Cost of sales

(4,315)

 

(4,281)

 

(8,539)

Gross profit

 

1,472

 

1,381

 

2,841

Distribution costs

(190)

 

(200)

 

(399)

Administrative expenses

(1,330)

 

(1,249)

 

(2,749)

Restructuring costs

-

 

(103)

 

(183)

Other operating income

-

 

-

 

116

Operating loss

 

(48)

 

(171)

 

(374)

 

Finance income

-

 

-

 

3

Finance costs

(5)

 

-

 

(7)

Loss before taxation

 

(53)

 

(171)

 

(378)

Taxation

4

(12)

 

-

 

(17)

Loss for the period

 

(65)

 

(171)

 

(395)

 

Total and continuing

 

 

 

 

 

 

Basic loss per share

6

(1.56p)

 

(4.31p)

 

(9.72p)

Diluted loss per share

6

(1.56p)

 

(4.31p)

 

(9.72p)

 

 

 

                 

 

 

Consolidated statement of comprehensive income

for the half year ended 31 May 2017 (Unaudited)

 

 

 

Half year

ended 31

May 2017

 

Half year

ended 31

May 2016

 

Full year

ended 30

Nov 2016

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Loss for the period

(65)

 

 

(171)

 

(395)

Exchange differences on translation of foreign operations

 

 

49

 

 

143

 

 

346

Total comprehensive expense for the period

 

(16)

 

            

(28)

 

  

(49)

 

 

 

 

 

 

 

 

Consolidated statement of changes in equity

for the half year ended 31 May 2017 (Unaudited)

 

 

  Share   capital

    Share

premium

     Capital
redemption       reserve

Translation            reserve

Retained             earnings

  Total    equity

 

   £'000

     £'000

           £'000

     £'000

     £'000

  £'000

 

 

 

 

 

 

 

Balance 1 Dec 2015

416

1,531

1

(212)

2,134

3,870

 

Dividends

-

-

-

-

(20)

(20)

Shares issued

 -

59

-

-

-

59

Transactions with owners

 -

59

-

-

(20)

39

Loss for the year

 -

-

-

-

(395)

(395)

Exchange differences on translating foreign operations

 -

-

-

346

-

346

Total comprehensive income for the year

 -

-

346

(395)

(49)

Balance 30 Nov 2016

416 

1,590

1

134

1,719

3,860

 

Dividends

-

-

-

-

(10)

(10)

Transactions with owners

 -

-

-

-

(10)

(10)

Loss for the period

 -

-

-

-

(65)

(65)

Exchange differences on translating foreign operations

 -

-

-

49

-

49

Total comprehensive income for the period

 -

49

(65)

(16)

Balance 31 May 2017

416 

1,590

1

183

1,644

3,834

 

 

Consolidated balance sheet

at 31 May 2017 (Unaudited)

 

 

 

Half year

ended 31

May 2017

 

Half year

ended 31

May 2016

 

Full year

ended 30

Nov 2016

 

 

£'000

 

£'000

 

£'000

Assets

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Goodwill

 

320

 

317

 

318

 

Property, plant and equipment

404

 

319

 

400

 

Deferred tax assets

16

 

16

 

9

 

 

740

 

652

 

727

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Inventories

 

2,568

 

2,226

 

2,365

 

Trade and other receivables

 

1,820

 

1,641

 

1,790

 

Cash and cash equivalents

371

 

726

 

781

 

 

4,759

 

4,593

 

4,936

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

(1,295)

 

(1,035)

 

(1,457)

 

Current tax liabilities

(135)

 

(106)

 

(122)

 

 

(1,430)

 

(1,141)

 

(1,579)

 

 

 

 

 

 

 

 

Net current assets

 

3,329

 

3,452

 

3,357

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Retirement benefit liability

 

(223)

 

(190)

 

(219)

 

Deferred tax liabilities

(12)

 

(13)

 

(5)

 

 

(235)

 

(203)

 

(224)

 

 

 

 

 

 

 

 

Net assets

 

3,834

 

3,901

 

3,860

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

Share capital

 

416

 

416

 

 

Share premium account

 

1,590

 

1,590

 

1,590

 

Capital redemption reserve

 

1

 

1

 

1

 

Retained earnings

 

1,644

 

1,963

 

1,719

 

Cumulative translation adjustment

 

 

183

 

(69)

 

134

Equity attributable to the shareholders of the parent

 

 

3,834

 

 

3,901

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated cash flow statement

for the half year ended 31 May 2017 (Unaudited)

 

 

Half year

ended 31

May 2017

 

Half year

ended 31

May 2016

 

Full year

ended 30

Nov 2016

 

 

£'000

 

£'000

 

£'000

 

 

Cash flows from operating activities

 

 

 

 

 

 

Operating loss

(48)

 

(171)

 

(374)

 

 

Share-based payment charge/(credit)

-

 

10

 

-

 

 

Depreciation

43

 

38

 

74

 

 

Loss on sale of tangible fixed assets

1

 

-

 

-

 

 

(Increase)/decrease in inventories

(203)

 

439

 

192

 

 

Increase in trade and other receivables

(30)

 

(109)

 

(298)

 

 

(Decrease)/increase in trade and other payables

(157)

 

(86)

 

824

 

 

 

 

 

 

 

 

 

 

Cash (used in)/ generated from operations

(394)

 

293

 

418

 

 

Corporation tax received/ (paid)

-

 

(46)

 

(48)

 

 

 

 

 

 

 

 

 

 

Net cash (used in)/ generated from operations

(394)

 

247

 

370

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchase of property, plant and equipment

(39)

 

(12)

 

(110)

 

 

Proceeds from sale of property, plant and equipment

 

3

 

 

-

 

 

-

 

 

Proceeds from sale of joint venture

 

 

 

 

22

 

 

Interest received

-

 

-

 

3

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

(36)

 

(12)

 

(85)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Interest paid

(5)

 

-

 

(7)

 

 

Proceeds from sale of shares

-

 

59

 

59

 

 

Equity dividends paid

(10)

 

(10)

 

(20)

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

(15)

 

49

 

32

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

(445)

 

284

 

317

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at start of period

781

 

443

 

443

 

 

Effect of foreign exchange rates

35

 

(1)

 

21

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

371

 

726

 

781

 

 

 

 

 

 

Notes

 

1.            General information

 

Holders Technology plc is incorporated in the United Kingdom under the Companies Act 2006.  The principal activity of the group is to provide specialised materials, components and solutions to the electronics and lighting industries.

 

2.            Basis of preparation

 

The condensed consolidated half year financial statements have been prepared in accordance with the AIM Rules for Companies and prepared on a basis consistent with International Financial Reporting Standards ("IFRS") as adopted by the EU and the accounting policies set out in the group's financial statements for the year ended 30 November 2016.

 

The condensed consolidated half year financial statements are unaudited and include all adjustments which management considers necessary for a fair presentation of the group's financial position, operating results and cash flows for the 6 month periods ended 31 May 2016 and 31 May 2017.

 

The half year financial statements do not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. A copy of the group's financial statements for the year ended 30 November 2016 prepared in accordance with IFRS as adopted by the EU has been filed with the Registrar of Companies. The auditors' report on those financial statements was not qualified and did not contain statements under s498(2) of s498(3) of the Companies Act 2006.

 

As permitted, the group has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these half year financial statements and therefore the half year financial information is not in full compliance with IFRS.

 

The preparation of half year financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.  Actual results may differ from these estimates. 

 

        These half year financial statements have been prepared under the historical cost convention.

 

        The board of Holders Technology plc approved this half yearly report on 27 July 2017.

 

3.            Segmental information

 

        Management currently identifies two operating segments:

-     PCB, which distributes materials, equipment and supplies to the PCB industry.

-     LED, which distributes LED-related components and lighting solutions to the lighting industry.

 

 

 

 

 

 

 

Notes (continued):

 

3.            Segmental information (continued)

 

Analysis by operating segment

                for the half year ended 31 May

 

               

 

PCB

LED

Central Costs

Total

 

2017

2016

2017

2016

2017

2016

2017

2016

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

Revenue

4,577

4,014

1,210

1,648

-

-

5,787

5,662

Cost of sales

3,485

3,166

830

1,115

-

-

4,315

4,281

Gross Profit

1,092

848

380

533

    -

-

1,472

1,381

Distribution costs

149

138

41

62

-

-

190

200

Administration costs

786

809

533

538

11

5

1,330

1,352

Segment loss

157

(99)

(194)

(67)

(11)

(5)

(48)

(171)

 

 

 

4.            The tax provision for the six months ended 31 May 2017 is calculated based on the tax rates applicable in the country in which each company operates.  Taxation includes £12,000 charge (2016: £nil) relating to overseas operations.

 

5.            A final dividend of 0.25p per share on the total issued share capital of 4,159,551 10p ordinary shares, excluding treasury shares, was paid on 23 May 2017 in respect of the year ended 30 November 2016. 

 

An interim dividend payment of 0.25p per share (2016: 0.25p per share) will be payable on 10 October 2017 to shareholders on the register at 15 September 2017.  The shares will go ex-dividend on 14 September 2017.  The interim dividend had not been approved by the board at 31 May 2017 and accordingly, has not been included as a liability as at that date.

 

6.            The basic earnings per share for continuing operations are based on the loss for the period of £65,000 (2016: loss £171,000) and on 4,159,551 ordinary shares (2016: 3,968,076), the weighted average number of shares in issue during the period.  Diluted earnings per share for continuing operations are based on 4,159,551 ordinary shares (2016: 3,968,076), being the weighted average number of ordinary shares after an adjustment of nil shares (2016: nil) in relation to share options.

 

7.            A copy of this half yearly report is being sent to shareholders and is available for inspection at the company's offices at Holders Technology (UK) Ltd., Units 1-4, Block 9, Tweedbank Industrial Estate, Galashiels TD1 3RS and via its website www.holdersgroup.com.

 

 

 

 


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Half-year Report - RNS