Preliminary Results
Embargoed for release until 7.00am on Thursday10February 2011
Holders Technology plc
Providers of specialised materials, equipment and components to the electronics
industry
Audited results for the year ended 30 November 2010
Holders Technology plc ("Holders Technology" or "the group") announces its
audited results for the year ended 30 November 2010.
Holders Technology participated strongly in the Electronics industry's recovery
from the 2008/2009 recession. Growth was particularly good in Germany. Initial
steps were taken to enter the LED market. Holders Technology recorded the
following results:
• Revenue grew 26% to £16.3m (2009: £13.0m)
• Gross profit of £4.2m (2009: £3.2m)
• Operating profit of £0.6m before exceptional items (2009: £0.2m loss)
• Operating profit of £0.5m after exceptional items (2009:£0.4m loss)
• £0.6m invested to develop the LED business
• Net cash of £0.9m at year end (2009: £2.1m)
• Proposed final dividend of 3.25p
Chairman's statement
Your company saw a strong recovery in its PCB area of trading in the year to
30th November 2010 with operating profit of £0.6m, before exceptional items, as
compared to the preceding year loss of £0.2m. This was most marked in our
German subsidiary where we saw very significant recovery both in turnover and
in operating profit. The result for the year was assisted by the incorporation
within the German company of those elements of our European operations
previously conducted through our Dutch subsidiary.
The result for the UK Company, which was less severely impacted than was our
German business in 2009, was broadly flat in 2010 £5.1m (2009 £5.2m).
The contribution made by our Chinese and our Indian activities in the year was
modest; Indian turnover was broadly flat with a small profit being recorded.
China registered a decline in turnover and a loss of £0.1m. As a result of this
we have considered it appropriate to write off the remaining £57,000 of
goodwill relating to our Chinese interests. Having a window onto the Chinese
market remains of value as it enables us to source materials which are of
benefit to other operations within the Group.
Our policy of continuously seeking supplies of new products for the PCB market
bore considerable fruit in the year with our extended range of laminates
showing very strong growth in the period.
On behalf of shareholders, I and the Board would like to record our
appreciation of the commitment shown by our staff in the PCB areas of our
business which enabled us to achieve the recovery we saw in the year.
The other major event of the year was the expansion of our activities in the
LED (Light Emitting Diode) market. Shareholders will recall that in December
2009 we acquired JK Components Limited ("JK"), a small UK company distributing
mainly within the UK LED products sourced from certain Far Eastern suppliers.
I said in the statement accompanying the 2009 accounts that our key objective
for LED's in the year to 30 November 2010 was to invest and build a platform
for sustained growth firstly within the UK and then throughout the geographical
markets we currently address.
I am pleased to be able to report that during the year we made good progress
towards achieving these goals. Master distribution agreements for Europe with
the suppliers used by JK were secured and we have expanded our German
operation, both with personnel and additional storage facilities, giving us a
platform for coverage of the continental European market. Further development
is envisaged this year and to date we have invested £0.6m. Our LED operations
recorded a loss of £0.1m in the year.
We remain of the view that the move into the LED market is a major opportunity
for the group. In order to assist shareholders in understanding the reasoning
underlying that belief, I would direct your attention to the section within the
business review following this statement which sets in context the LED strategy
we are pursuing.
Management team
In order fully to grasp the opportunities available to the group, the board has
decided to rearrange the top management team. While I will remain as Executive
Chairman, Victoria Blaisdell, currently Corporate Development Director, will,
from 1st March 2011, take the role of Group Managing Director. Victoria has
been involved in both our PCB and LED activities and has recently, with
considerable success, concentrated more heavily on the LED area of our
activities.
Outlook
While inevitably, as a company strongly reliant on European trading, we cannot
be wholly insulated from the impact of wider economic influences, we believe
that in our traditional PCB business we are well placed to preserve our
position as a major supplier to the European market.
Whilst the LED and lighting market is fast growing, the level of competition is
significant. Nevertheless, we believe that we have a major opportunity
substantially to grow our business in this area. This will require significant
investment but the potential returns that we can see over future years do, we
believe, fully justify that investment being made.
R W Weinreich
Chairman and Chief Executive
9 February 2011
Consolidated income statement
for the year ended 30 November 2010
Before Exceptional Total Total
exceptional items
items
2010 2010 2010 2009
Note £'000 £'000 £'000 £'000
Continuing operations
Revenue 16,314 - 16,314 12,966
Cost of sales (12,116) - (12,116) (9,770)
Gross profit 4,198 - 4,198 3,196
Distribution costs (390) - (390) (301)
Administrative expenses (3,273) - (3,273) (3,044)
Fundamental - - - (176)
restructuring
Impairment of goodwill 2 - (57) (57) -
Acquisition costs 2 - (26) (26) -
Other operating income/ 39 - 39 (90)
(expenses)
Operating profit/(loss) 574 (83) 491 (415)
Finance income - - - 20
Finance costs (1) - (1) (13)
Profit/(loss) before 573 (83) 490 (408)
taxation
Tax expense 3 (59) - (59) 9
Profit/(loss) for the 514 (83) 431 (399)
year
Profit/(loss) for the
year attributable to:
Owners of the parent 507 (375)
Non-controlling (76) (24)
interest
Profit/(loss) for the 431 (399)
financial year
Total and continuing
Basic earnings/(loss) 5 12.87p (9.52p)
per share
Diluted earnings/(loss) 5 12.87p (9.52p)
per share
Consolidated statement of comprehensive income
for the year ended 30 November 2010
Group
2010 2009
£'000 £'000
Profit/(loss) for the year 431 (399)
Exchange differences on translating foreign operations (180) 288
Total comprehensive income for the year 251 (111)
Total comprehensive income for the year attributable to:
Owners of the parent 305 (64)
Non-controlling interests (54) (47)
251 (111)
Statements of changes in equity
Group Share Share Capital Translation Retained Total Non-controlling Total
capital premium redemption reserve earnings attributable interest equity
reserve to owners of
parent
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 December 416 1,531 1 520 3,568 6,036 130 6,166
2008
Dividends - - - - (211) (211) - (211)
Employee share-based - - - - (10) (10) - (10)
payment options
Transactions with - - - - (221) (221) - (221)
owners
Profit/(loss) for the - - - - (375) (375) (24) (399)
year
Non-controlling interest - - - - - - 62 62
investment
Exchange differences on - - - 311 - 311 (23) 288
translating foreign
operations
Total comprehensive - - - 311 (375) (64) 15 (49)
income for the year
Balance at 30 November 416 1,531 1 831 2,972 5,751 145 5,896
2009
Dividends - - - - (211) (211) - (211)
Employee share-based - - - - (4) (4) - (4)
payment options
Transactions with - - - - (215) (215) - (215)
owners
Profit/(loss) for the - - - - 507 507 (76) 431
year
Exchange differences on - - - (202) - (202) 22 (180)
translating foreign
operations
Total comprehensive - - - (202) 507 305 (54) 251
income for the year
Balance at 30 November 416 1,531 1 629 3,264 5,841 91 5,932
2010
Company Share Share Capital Retained Total
capital premium redemption earnings equity
reserve
£'000 £'000 £'000 £'000 £'000
Balance at 1 December 2008 416 1,531 1 830 2,778
Profit and comprehensive income for - - - 330 330
the period
Dividends - - - (211) (211)
Share-based payment charge - - - (10) (10)
Balance at 30 November 2009 416 1,531 1 939 2,887
Loss and comprehensive income for the - - - (185) (185)
period
Dividends - - - (211) (211)
Share-based payment charge - - - (4) (4)
Balance at 30 November 2010 416 1,531 1 539 2,487
Balance sheets
at 30 November 2010
Company number: 1730535 Group Company
2010 2009 2010 2009
£'000 £'000 £'000 £'000
Assets
Non-current assets
Goodwill 318 207 - -
Property, plant and equipment 582 655 3 3
Investments in subsidiaries - - 3,622 2,669
Investment in joint venture - - 15 15
Investments in associates - - - -
Deferred tax assets 73 29 - 2
973 891 3,640 2,689
Current assets
Inventories 3,826 1,866 - -
Trade and other receivables 2,721 2,301 423 557
Current tax assets 56 69 - -
Cash and cash equivalents 888 2,095 63 127
7,491 6,331 486 684
Liabilities
Current liabilities
Trade and other payables (2,182) (1,107) (1,562) (454)
Borrowings (52) - - -
Current tax liabilities (55) (35) (32) (32)
(2,289) (1,142) (1,594) (486)
Net current assets 5,202 5,189 (1,108) 198
Non-current liabilities
Borrowings (4) - - -
Retirement benefit liability (192) (176) - -
Contingent consideration (45) - (45) -
Deferred tax liabilities (2) (8) - -
(243) (184) (45) -
5,932 5,896 2,487 2,887
Shareholders' equity
Share capital 416 416 416 416
Share premium account 1,531 1,531 1,531 1,531
Capital redemption reserve 1 1 1 1
Retained earnings 3,264 2,972 539 939
Cumulative translation 629 831 - -
adjustment reserve
Equity attributable to the 5,841 5,751 2,487 2,887
shareholders of the parent
Non-controlling interest 91 145 - -
5,932 5,896 2,487 2,887
Cash flow statements
for the year ended 30 November 2010
Group Company
2010 2009 2010 2009
£'000 £'000 £'000 £'000
Cash flows from operating
activities
Operating profit/(loss) 491 (415) (117) (215)
Share-based payment credit (4) (10) (4) (10)
Depreciation 152 180 1 2
Impairment of goodwill 57 - - -
Impairment of investment in - - - 177
subsidiary
Currency translation (137) 182 - -
Loss on sale of property, plant 16 13 - -
and equipment
(Increase)/decrease in (1,870) 942 - -
inventories
(Increase)/decrease in trade (274) 410 67 (85)
and other receivables
Increase/(decrease) in trade 867 (517) 1,108 77
and other payables
Cash (used in)/generated from (702) 785 1,055 (54)
operations
Corporation tax (paid)/received (75) 51 157 47
Net cash (used in)/generated (777) 836 1,212 (7)
from operations
Cash flows from investing
activities
Net borrowings acquired with (44) - - -
subsidiary undertaking
Increase in investment in - - (1,296) (494)
subsidiaries
Proceeds from disposal of - - 67 -
subsidiary
Purchase of property, plant and (118) (168) (1) (2)
equipment
Proceeds from sale of property, 21 - - -
plant and equipment
Income from investments - - 160 541
Interest received - 20 5 3
Net cash (used in)/generated from (141) (148) (1,065) 48
investing activities
Cash flows from financing
activities
Interest paid (1) (13) - -
Loan repayments (26) - - -
Finance lease principal (3) - - -
repayments
Equity dividends paid (211) (211) (211) (211)
Net cash used in financing (241) (224) (211) (211)
activities
Net change in cash and cash (1,159) 464 (64) (170)
equivalents
Cash and cash equivalents at 2,095 1,537 127 297
start of period
Effect of foreign exchange (48) 94 - -
rates
Cash and cash equivalents at 888 2,095 63 127
end of period
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. Exceptional items
Exceptional items consist of the following:
2010 2009
£'000 £'000
Fundamental restructuring - (176)
Impairment of goodwill (57) -
Acquisition costs (26) -
(83) (176)
The impairment of goodwill derives from the directors' assessment of goodwill
attributable to Holders' Far East operations. The acquisition costs relate to
the acquisition of JK Components Limited (since renamed Holders Components
Limited) in December 2009.
3. Taxation
2009 2009
£'000 £'000
Analysis of the charge in the period
Current tax
- Current period 136 18
- Adjustments in respect of prior periods (27) (38)
109 (20)
Deferred tax (50) 11
Total tax 59 (9)
Tax reconciliation
The tax for the period is lower (2009: higher) than the standard rate of
corporation tax in the UK, effectively 28% (2009: 28%) for the company's
financial year. The differences are explained below:
2009 2009
£'000 £'000
Profit/(loss) before taxation 490 (408)
Profit before taxation multiplied by rate of 137 (113)
corporation tax in the UK of 28% (2009: 28%)
Effects of:
Differences between capital allowances and (2) (9)
depreciation
Amounts not deductible for taxation purposes 23 (24)
Adjustments in respect of prior years (27) 9
Taxation losses (74) 99
Other temporary differences 2 29
Taxation 59 (9)
4. The directors have proposed a final dividend of 3.25p per share payable on
24 May 2011 to shareholders on the register at close of business on 6 May
2011. The total dividend for the year, including the interim dividend of
2.1p (2009: 2.1p) per share paid on 5 October 2010, amounts to £211,000
(2009: £211,000), which is equivalent to 5.35p (2009: 5.35p) per share.
5. The basic earnings per share are based on the earnings for the financial
year attributable to the equity shareholders of £507,000 (2009: loss £
375,000) and on ordinary shares 3,939,551 (2009: 3,939,551), the weighted
average number of shares in issue during the year, excluding treasury
shares. Diluted earnings per share are based on 3,939,551 ordinary shares
(2009: 3,939,551), being the weighted average number of ordinary shares
after an adjustment of nil shares (2009: nil) in relation to share options.
6. This preliminary statement, which has been approved by the Board on 9
February 2011, is not the Company's statutory accounts. The statutory
accounts for each of the two years to 30 November 2009 and 30 November 2010
received audit reports, which were unqualified and did not contain
statements under section 498(2) and section 498(3) of the Companies Act
2006. The 2009 accounts have been filed with the Registrar of Companies but
the 2010 accounts are not yet filed.
ENDS
For further information, contact:
Mr Rudi Weinreich, Chairman and Chief Executive, Holders Technology plc,
on 020 8731 4336
Mr Jim Shawyer, Group Finance Director, Holders Technology plc,
On 020 8731 4336
Mr Shane Gallwey, Director, Corporate Finance, Northland Capital Partners Ltd,
on 020 7492 4750
Website www.holderstechnology.com
Wednesday, 15th May 2024
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