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Holders Technology PLC  -  HDT   

Half-year Report

Released 07:00 27-Jul-2018

RNS Number : 9411V
Holders Technology PLC
27 July 2018
 

 

 

 

 

 

 

 

Holders Technology plc

Half Yearly Report 2018

 

Specialised PCB Materials, LED Components, and Lighting Control 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:

 

 

 

2018

2017

 

 

£'000

£'000

 

 

 

 

Revenue

PCB

4,756

4,577

 

LED

1,426

1,210

 

Total

6,182

5,787

 

 

 

 

Gross profit

1,585

1,472

Margins

 

25.6%

25.4%

 

 

 

 

Overheads

1,520

1,525

 

 

 

 

Profit/ (loss) before taxation

 65

(53)

 

 

 

 

Earnings per share

1.56p

(1.56p)

Interim dividend per share

0.25p

0.25p

Net assets per share

96p

92p

 

 

Contents

 

1.   Chairman's statement

 

3.   Consolidated income statement

 

3.   Consolidated statement of comprehensive income

 

4.   Consolidated statement of changes in equity

 

5.   Consolidated balance sheet

 

6.   Consolidated cash flow statement

 

7.   Notes

 

Chairman's statement

Half year ended 31 May 2018

 

 

These interim results show an improvement as compared to the equivalent period in 2017. Revenue increased by 6.8% to £6.2m (2017: £5.8m) and the pre-tax result was a profit of £65,000 (2017: loss of £53,000).  2.3% of the group revenue improvement was as a result of Euro strengthening against sterling.

 

PCB

 

PCB sales in the period increased by 3.9%, from £4,577,000 in 2017 to £4,756,000, while PCB gross margins decreased by 0.7% to 23.2%. During the period we committed to a €300,000 upgrade of our German aluminium cutting and punching line, for delivery in Q1 2019.  The improved cutting line is expected to provide higher throughput and result in further efficiencies.

 

PCB overheads as a percentage of sales decreased by 0.8% to 16.4%, which offsets the lower PCB margin. Overall our PCB activities recorded a pre-tax profit of £159,000 (2017: profit £157,000).

 

LED

 

Following the LED restructuring reported last year, I am pleased to report that both LED divisions made good progress during the period.  Revenue grew by 17.9% from £1,210,000 to £1,426,000, and gross margins improved from 31.4% to 33.7%.  Overheads as a percentage of revenue decreased from 44.0% to 33.2%, and while the result was £38,000 loss, it represented a significant improvement measured against the same period last year (2017: loss £194,000).

 

Customer interest in our smart lighting control solutions has been very encouraging and we begin the second half of the 2018 financial year with a strong order book.

 

Taxation

 

Further progress has been made in finalising the disputed EU Cross Border tax liability with HMRC.  A potential £130,000 liability was fully provided for in the 2017 accounts, of which £36,000 was paid during the first half and £52,000 is expected to be paid during the second half of 2018, leaving £42,000 under discussion.

 

Summary

 

The board is encouraged that a profitable result overall has been achieved for the first half.    The PCB divisions operate in a mature sector, but we see potential growth opportunities from a number of new products and efficiency gains from additional investments.  The LED divisions have made good progress and achieved a strong order book.

 

 

 

Rudolf W. Weinreich                                                                                                     Holders Technology plc                               

Executive Chairman                                                                                                        27-28 Eastcastle Street

                                                                                                                                                London

                                                                                                                                                W1W 8HD

 

 

 For further information, contact:

 

Rudi Weinreich, Executive Chairman, Holders Technology plc,

Tel. 01896 758781

 

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   

 

 

 

 

for the half year ended 31 May 2018 (Unaudited)

 

 

 

Half year

ended 31

May 2018

 

Half year

ended 31

May 2017

 

Full year

ended 30

Nov 2017

Notes

£'000

 

£'000

 

£'000

 

Revenue

3

6,182

 

5,787

 

12,208

Cost of sales

 

(4,597)

 

(4,315)

 

(9,003)

Gross profit

 

1,585

 

1,472

 

3,205

Distribution costs

 

(210)

 

(190)

 

(438)

Administrative expenses

 

(1,300)

 

(1,330)

 

(2,695)

Other operating income

 

-

 

-

 

(7)

Operating profit/ (loss)

 

65

 

(48)

 

65

Finance costs

 

-

 

(5)

 

(11)

Profit/ (loss) before taxation

 

65

 

(53)

 

54

Taxation

4

-

 

(12)

 

5

Profit/ (loss) after tax from continuing operations

 

65

 

(65)

 

59

Loss from discontinued operations

 

-

 

-

 

(42)

Profit/ (loss) for the period

 

65

 

(65)

 

17

 

Total and continuing

 

 

 

 

 

 

Basic earnings/ (loss) per share

6

1.56p

 

(1.56p)

 

1.42p

Diluted earnings/ (loss) per share

6

1.46p

 

(1.56p)

 

1.34p

 

 

 

                 

 

 

for the half year ended 31 May 2018 (Unaudited)

 

 

 

Half year

ended 31

May 2018

 

Half year

ended 31

May 2017

 

Full year

ended 30

Nov 2017

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Profit/ (loss) for the period

65

 

(65)

 

17

Exchange differences on translation of foreign operations

 

 

(12)

 

 

49

 

 

73

Total comprehensive income/ (expense) for the period

 

 

53

 

            

(16)

 

  

90

 

 

 

 

 

 

 

 

 

Consolidated statement of changes in equity

for the half year ended 31 May 2018 (Unaudited)

 

 

  Share   capital

    Share

premium

     Capital
redemption       reserve

Translation            reserve

Retained             earnings

  Total    equity

 

   £'000

     £'000

           £'000

     £'000

     £'000

  £'000

 

 

 

 

 

 

 

Balance 1 Dec 2016

416

1,590

1

134

1,719

3,860

 

Dividends

-

-

-

-

(21)

(21)

Share based payments

 -

-

-

-

3

3

Transactions with owners

 -

-

-

-

(18)

(18)

Profit for the year

 -

-

-

-

17

17

Other comprehensive income for the year

 -

-

-

73

-

73

Total comprehensive income for the year

 -

-

73

17

90

Balance 30 Nov 2017

416 

1,590

1

207

1,718

3,932

 

Dividends

-

-

-

-

(10)

(10)

Transactions with owners

 -

-

-

-

(10)

(10)

Profit for the period

 -

-

-

-

65

65

Other comprehensive expense for the period

 -

-

-

(12)

-

(12)

Total comprehensive income for the period

 -

(12)

65

53

Balance 31 May 2018

416 

1,590

1

195

1,773

3,975

 

at 31 May 2018 (Unaudited)

 

 

 

Half year

ended 31

May 2018

 

Half year

ended 31

May 2017

 

Full year

ended 30

Nov 2017

 

 

£'000

 

£'000

 

£'000

Assets

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Goodwill

 

318

 

320

 

318

 

Property, plant and equipment

 

374

 

404

 

369

 

Deferred tax assets

 

9

 

16

 

9

 

 

 

701

 

740

 

696

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Inventories

 

2,304

 

2,568

 

2,408

 

Trade and other receivables

 

1,986

 

1,820

 

2,272

 

Cash and cash equivalents

 

633

 

371

 

579

 

 

 

4,923

 

4,759

 

5,259

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

(1,328)

 

(1,295)

 

(1,667)

 

Current tax liabilities

 

(94)

 

(135)

 

(130)

 

 

 

(1,422)

 

(1,430)

 

(1,797)

 

 

 

 

 

 

 

 

Net current assets

 

3,501

 

3,329

 

3,462

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Retirement benefit liability

 

(227)

 

(223)

 

(226)

 

Deferred tax liabilities

 

-

 

(12)

 

-

 

 

 

(227)

 

(235)

 

(226)

 

 

 

 

 

 

 

 

Net assets

 

3,975

 

3,834

 

3,932

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

Share capital

 

416

 

416

 

416

 

Share premium account

 

1,590

 

1,590

 

1,590

 

Capital redemption reserve

 

1

 

1

 

1

 

Retained earnings

 

1,773

 

1,644

 

1,718

 

Cumulative translation adjustment

 

 

195

 

183

 

207

Equity attributable to the shareholders of the parent

 

 

3,975

 

 

3,834

 

 

3,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for the half year ended 31 May 2018 (Unaudited)

 

 

Half year

ended 31

May 2018

 

Half year

ended 31

May 2017

 

Full year

ended 30

Nov 2017

 

 

£'000

 

£'000

 

£'000

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

Profit/ (loss) before tax from continuing operations

65

 

(48)

 

54

 

 

Share-based payment charge/(credit)

-

 

-

 

3

 

 

Depreciation

43

 

43

 

72

 

 

Loss on sale of tangible fixed assets

-

 

1

 

-

 

 

Decrease/ (increase) in inventories

104

 

(203)

 

(34)

 

 

Decrease/ (increase) in trade and other receivables

286

 

(30)

 

(368)

 

 

(Decrease)/ increase in trade and other payables

(338)

 

(162)

 

128

 

 

Interest expense

-

 

5

 

11

 

 

 

 

 

 

 

 

 

 

Cash generated from/ (used in) operations

160

 

(394)

 

(134)

 

 

 

 

 

 

 

 

 

 

Interest paid

-

 

(5)

 

(11)

 

 

Corporation tax paid

(36)

 

-

 

-

 

 

Loss from discontinued operations

-

 

-

 

(9)

 

 

Net cash generated from/ (used in) operations

124

 

(399)

 

(154)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchase of property, plant and equipment

(49)

 

(39)

 

(41)

 

 

Proceeds from sale of property, plant and equipment

 

-

 

 

3

 

 

4

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

(49)

 

(36)

 

(37)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Equity dividends paid

(10)

 

(10)

 

(21)

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

(10)

 

(10)

 

(21)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

65

 

(445)

 

(212)

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at start of period

579

 

781

 

781

 

 

Effect of foreign exchange rates

(11)

 

35

 

10

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

633

 

371

 

579

 

 

 

 

 

 

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 2017.

 

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 2017 and 31 May 2018.

 

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 2017 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 26 July 2018.

 

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

 

2018

2017

2018

2017

2018

2017

2018

2017

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

Revenue

4,756

4,577

1,426

1,210

-

-

6,182

5,787

Cost of sales

3,651

3,485

946

830

-

-

4,597

4,315

Gross Profit

1,105

1,092

480

380

    -

-

1,585

1,472

Distribution costs

165

149

45

41

-

-

210

190

Administration costs

781

786

473

533

56

11

1,310

1,330

Segment Profit/ (Loss)

159

157

(38)

(194)

(56)

(11)

65

(48)

 

 

 

4.            The tax provision for the six months ended 31 May 2018 is calculated based on the tax rates applicable in the country in which each company operates.

 

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 22 May 2018 in respect of the year ended 30 November 2017. 

 

An interim dividend payment of 0.25p per share (2017: 0.25p per share) will be payable on 9 October 2018 to shareholders on the register at 14 September 2018.  The shares will go ex-dividend on 13 September 2018.  The interim dividend had not been approved by the board at 31 May 2018 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 profit for the period of £65,000 (2017: loss £65,000) and on 4,159,551 ordinary shares (2017: 4,159,551), the weighted average number of shares in issue during the period.  Diluted earnings per share for continuing operations are based on 4,456,906 ordinary shares (2017: 4,159,551), being the weighted average number of ordinary shares after an adjustment of 297,355 shares (2017: nil shares) 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