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Holders Technology PLC  -  HDT   

Final Results

Released 07:00 02-Mar-2018

RNS Number : 4694G
Holders Technology PLC
02 March 2018
 

Holders Technology plc

 

Specialised PCB Materials, LED Components and Smart Lighting

 

Unaudited results for the year ended 30 November 2017

               

 

 

Holders Technology plc ("Holders Technology" or "the Group") announces its unaudited results for the year ended 30 November 2017.  Holders Technology supplies specialty laminates and materials for printed circuit board manufacture ("PCB"), and operates as an LED solutions provider to the lighting and selected industrial markets.                       

The Group made notable progress during the year, with encouraging revenue growth, improved margins, and a return to profitability.

 

The Group now comprises two PCB divisions based in the UK and Germany, and two LED divisions also based in the UK and Germany.  In the opinion of the directors, all divisions achieved satisfactory growth by the year end.

 

NRGstar was discontinued during the period, and Opteon Germany was discontinued at the end of 2016.  Both operations' results are shown separately as discontinued operations.

 

The directors will recommend payment of a final dividend of 0.25p per share.

 

Highlights included:

 



£'000

Change compared to 2016

·     Continuing Revenue

PCB

9,453

13% Increase *1


LED

2,755

17% Increase *2


Group

12,208

14% Increase *3





·     Continuing Operating Profit/ (Loss)

PCB

214 

£215,000 Improvement


LED

(92)

£137,000 Improvement


Central Costs

(57)

£26,000 Increase


Group

65

£326,000 Improvement





·     Discontinued Loss

Group

(42)

£71,000 Improvement





·     Profit for the Year

Group

17

£412,000 Improvement





·     Cash Balances

Group

579

£202,000 Reduction





·     Earnings per Share

Continuing

1.42p

8.36p Improvement


Total

0.41p

10.13p Improvement





·     Debt

Group

Nil

No change





       *Increase includes 17% / 24% / 36% arising from exchange rate movements


 

 

 

 

 

Chairman's statement

 

In my last Annual Statement, I reported that a number of changes were being made to the Group's management and sales teams and that along with this, further investments in PCB machinery were being made. The aim of these measures was to enable the Group to return to profitability and I am very pleased to be able to report that the Group did achieve an operating profit for the year of £65,000 from continuing operations (2016: operating loss of £261,000).

 

The Group now comprises PCB and LED divisions, based in both the UK and Germany. Two unprofitable activities NRGStar, based in the UK, and Opteon, based in Germany, were closed with their combined results recording a loss of £42,000 (2016: loss £113,000).

 

The overall Group result for the year showed continuing revenues of £12.2m (2016: £10.7m), with gross margins of 26.3% (2016: 24.9%) and a profit after tax of £17,000 (2016: loss £395,000). Approximately £0.7m of the Group revenue growth related to the Euro strengthening against sterling.

 

The PCB divisions together had revenue of £9.5m (2016: £8.3m) and achieved an operating profit of £214,000 (2016: loss £1,000) with margins improving from 22.2% to 24.2%. Approximately £0.6m of the PCB revenue growth related to the Euro strengthening against sterling.

 

Our German PCB operations, the largest single element of the Group, had a successful year with satisfactory growth from both existing and new product lines. Investments were made in machinery and improved systems during the year and we plan further investment in 2018.

 

UK PCB operations achieved encouraging revenue growth from a number of new product lines.  The directors expect modest revenue improvement in 2018.

 

LED revenues overall amounted to £2.8m (2016: £2.4m) with gross margins decreased slightly to 33.4% (2016: 34.2%) and operating losses being reduced from £229,000 in 2016 to £92,000 in 2017.  Approximately £0.1m of the LED revenue growth related to the Euro strengthening against sterling.

 

The LED divisions both had stronger second halves in 2017 with the UK division, in particular, substantially improving its performance. The product range continues to develop with smart lighting controls a key focus for the future.  Both divisions were profitable in the second half of the year.

 

On behalf of the Board I would like to record our thanks to all of our staff for their hard work during 2017 which resulted in a profitable year for the Group. With 2017 seeing a return to profitability the board and management team remain fully committed to achieving further improvement in both sales and profitability in 2018 and beyond. The Board considers it appropriate to recommend a final dividend of 0.25p in respect of the 2017 year.

 

 

R W Weinreich 

Executive Chairman

1 March 2018


 

Group income statement for the year ended 30 November 2017

 




Note

2017

2016





£'000

Restated

£'000







Revenue




12,208

10,698

Cost of sales




(9,003)

(8,038)

Gross profit




3,205

2,660

Distribution costs




(438)

(385)

Administrative expenses




(2,695)

(2,539)

Restructuring costs




-

(116)

Other operating (expenses)/ income




(7)

119

Operating profit/ (loss)




65

(261)

Finance income




-

3

Finance expenses




(11)

(7)

Profit/ (loss) before taxation




54

(265)

Tax credit/ (expense)



2

5

(17)

Profit/ (loss) after taxation from continuing operations




59

(282)

Loss from discontinued operations



4

(42)

(113)

Profit/ (loss) for the year attributable to equity shareholders




17

(395)







Basic earnings/ (loss) per share - continuing operations

5

1.42p

(6.94p)

Diluted earnings/ (loss) per share - continuing operations

5

1.34p

(6.94p)

Basic and diluted loss per share - discontinued operations

5

(1.01p)

(2.78p)

Total earnings/ (loss) per share

5

0.41p

(9.72p)

 

 

 

Group statement of comprehensive income for the year ended 30 November 2017

 




2017

£'000

2016

£'000

Profit/ (loss) for the year



17

(395)

Items that may be reclassified subsequently to profit or loss:




     Exchange differences on translating foreign operations



73

346

Total comprehensive income and expense for the year



90

(49)


Statements of changes in equity for the year ended 30 November 2017

 

 

Group 

Share capital

Share premium

Capital redemption reserve

Translation reserve

Retained earnings

Total equity


£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 December 2015

416

1,531

1

2,134

3,870

Dividends

-

-

-

-

(20)

           (20)

Shares issued

-

59

-

-

-

59

Transactions with owners

-

59

-

-

(20)

39

Loss for the year

-

-

-

-

(395)

(395)

Other comprehensive income

-

-

-

346

-

346

Total comprehensive income for the year

-

-

-

346

(395)

(49)

Balance at 30 November 2016

416

1,590

1

134

1,719

3,860

Dividends

-

-

-

-

(21)

                  (21)

Shares based payments

-

-

-

-

3

3

Transactions with owners

-

-

-

-

(18)

(18)

Profit for the year

-

-

-

-

17

17

Other comprehensive income

-

-

-

73

-

73

Total comprehensive income for the year

-

-

-

73

17

90

Balance at 30 November 2017

416

1,590

1

207

1,718

3,932

 

 

  

Group balance sheet at 30 November 2017

 





2017

2016





£'000

£'000

Assets






Non-current assets






Goodwill




318

318

Property, plant and equipment




369

400

Investments in subsidiaries




-

-

Deferred tax assets




9

9





696

727

Current assets






Inventories




2,408

2,365

Trade and other receivables




2,272

1,790

Cash and cash equivalents




579

781





5,259

4,936

Liabilities






Current liabilities






Trade and other payables




(1,675)

(1,457)

Current tax liabilities




(122)

(122)





(1,797)

(1,579)

Net current assets




3,462

3,357

Non-current liabilities






Retirement benefit liability




(226)

(219)

Deferred tax liabilities




-

(5)





(226)

(224)





3,932

3,860

Shareholders' equity






Share capital




416

416

Share premium account




1,590

1,590

Capital redemption reserve




1

1

Retained earnings




1,718

1,719

Cumulative translation adjustment reserve




207

134

 




3,932

3,860

 


  

 

Statement of cash flows for the year ended 30 November 2017

 





2017

 2016

Restated

 





£'000

£'000

 

Cash flows from operating activities






 

Profit/ (loss) before tax from continuing operations




 

54

 

(265)

 

Share-based payment charge




3

-

 

Depreciation




72

74

 

(Increase)/ decrease in inventories




(34)

387

 

Increase in trade and other receivables




(368)

(220)

 

Decrease in trade and other payables

Interest income

Interest expense




128

-

11

349

(3)

7

 

Cash (used in)/ generated from operations




(134)

329

 

Interest paid

Corporation tax paid




(11)

-

(7)

(48)

 

(Loss)/ profit from discontinued operations




(9)

89

 

Net cash (used in)/ generated from operations




(154)

363

 

Cash flows from investing activities






 

Purchase of property, plant and equipment




(41)

(110)

 

Proceeds from sale of property, plant and equipment



4

-

Proceeds from sale of joint venture



-

22

Interest received




-

3

 

Net cash (used in)/generated from investing activities



(37)

(85)

Cash flows from financing activities






 

Proceeds from sale of shares




-

59

 

Equity dividends paid




(21)

(20)

 

Net cash (used in)/ generated from financing activities




 

(21)

 

39

 

 

Net change in cash and cash equivalents




 

(212)

 

317

 

Cash and cash equivalents at start of period




781

443

 

Effect of foreign exchange rates




10

21

 

Cash and cash equivalents at end of period




579

781

 

 

 

 


Notes

 

1.    Basis of preparation

The Group and parent company financial statements have been prepared in accordance with EU endorsed International Financial Reporting Standards (IFRS), International Financial Reporting Interpretations Committee (IFRIC) interpretations and with those parts of the Companies Act applicable to companies reporting under IFRS.  All accounting standards and interpretations issued by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee effective at the time of preparing these financial statements have been applied.

 

2.    Taxation


2017

£'000

2016

£'000

Analysis of the charge in the period



Current tax



-   Current period

-

-

-   Adjustments in respect of prior periods

-

17


-

17

Deferred tax

(5)

-

Total tax

(5)

17




Tax reconciliation






The tax for the period is lower (2016: higher) than the standard rate of corporation tax in the UK, effectively 20.0% (2016: 20.0%) for the company's financial year.  The differences are explained below:

 


2017

£'000

2016

£'000

Profit/ (loss) before taxation

54

(265)




Profit/ (loss) before taxation multiplied by the rate of corporation tax in the UK of 20.0 % (2016: 20.0%)

 

11

 

(53)




Effects of:



Adjustments in respect of prior years

-

17

Taxation losses

(16)

53

Taxation

(5)

17

 

3.    The directors have proposed a final dividend of 0.25p per share payable on 22 May 2018 to shareholders on the register at close of business on 4 May 2018.  The total dividend for the year, including the interim dividend of 0.25p (2016: 0.25p) per share paid on 10 October 2017, amounts to £20,000 (2016: £20,000), which is equivalent to 0.50p (2016: 0.50p) per share.

 

4.    Discontinued operations

At the end of 2016 it was announced that Opteon, the finished goods operations in Germany, would be discontinued, and in March 2017 the equivalent activity in UK, branded as NRGstar, also ceased.  This point marked the Group's cessation of this type of LED operation, and a re-focus on sales of LED components, lighting solutions and smart lighting systems.

 

The discontinuation of Opteon operations was not disclosed as a discontinued operation within the 2016 financial statements.  The 2016 figures have been restated to disclose Opteon as discontinued.  The Board are of the view that this presentation of information enables users of the financial statements to understand the financial effects of these operations no longer being part of the Group.  The impact of the discontinuation of NRGstar operations is shown for both the current and prior year results.

 

Notes continued

 

4.    Discontinued operations (continued)

 

Discontinued operations - Income statement

2017

NRGstar

£'000

 

Total

£'000

 

NRGstar

£'000

2016

Opteon

£'000

 

Total

£'000

Revenue

50

50

344

338

682

Cost of sales

(45)

(45)

(250)

(251)

(501)

Gross profit

5

5

94

87

181

Distribution expenses

(1)

(1)

(10)

(4)

(14)

Administration expenses

(46)

(46)

(128)

(82)

(210)

Other operating expenses

-

-

-

(3)

(3)

Operating loss

(42)

(42)

(44)

(2)

(46)

Impairment costs

-

-

-

(67)

(67)

Loss before tax

(42)

(42)

(44)

(69)

(113)

Taxation on discontinued operations

-

-

-

-

-

Loss for the period from discontinued operations

(42)

(42)

(44)

(69)

(113)

 

Discontinued operations - Cash Flow statement

2017

NRGstar

£'000

 

Total

£'000

 

NRGstar

£'000

2016

Opteon

£'000

 

Total

£'000

Cash flows from operating activities






Loss before tax

(42)

(42)

(44)

(69)

(113)

Depreciation

8

8

-

2

2

Increase in inventories

60

60

1

121

122

(Increase)/ decrease in trade and other receivables

 

109

 

109

 

(55)

 

123

 

68

(Decrease)/ increase in trade and other payables

(144)

(144)

(25)

35

10

Net change in cash and cash equivalents

(9)

(9)

(123)

212

89

 

5.    The basic earnings per share for the continuing business are based on the profit for the financial year of £59,000 (2016: loss of £282,000) and on ordinary shares of 4,159,551 (2016: 4,063,813), the weighted average number of shares in issue during the year.  Diluted earnings per share as based on 4,414,419 ordinary shares, being the weighted average number of ordinary shares after an adjustment of 254,868 in relation to share options.  There was no earnings dilution calculated in 2016 as a loss was recorded by the Group.

 

6.    This preliminary statement, which has been approved by the Board on 1 March 2018, is not the Company's statutory accounts.  The statutory accounts for the year to 30 November 2016 received an audit report which was unqualified and did not contain statements under section 498(2) and section 498(3) of the Companies Act 2006. 

 

For further information, contact:

 

Rudi Weinreich, Executive Chairman, Holders Technology plc,

Tel. 07800 600 520

Paul Geraghty, Group Finance Director, Holders Technology plc,

Tel. 07800 600 520

Tom Price, Director, Corporate Finance, Northland Capital Partners Ltd,

Tel. 020 3861 6625

 

Website www.holdersgroup.com   


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Final Results - RNS