Half-year Report

RNS Number : 9453J
Holders Technology PLC
27 August 2021
 

 

Holders Technology plc

("Holders Technology" or the "Company")

Half Year Report

 

Holders Technology, (AIM: HDT), is pleased to announce its unaudited half year results for the six months ended 31 May 2021.

 

Highlights

 

Holders Technology supplies specialty laminates and materials for printed circuit board manufacturers ("PCB") and operates as a lighting and control solutions ("LCS") provider.

 

Unaudited results for the half year ended 31 May 2021 are summarised as follows:

 

 

 

 

 

2021

2020

 

 

 

£'000

£'000

 

 

 

 

 

Revenue

 

PCB

3,798

4,157

 

 

LCS

1,991

1,170

 

 

Total

5,789

5,327

 

 

 

 

 

Gross profit

 

 

1,718

1,398

Margins

 

 

29.7%

26.2%

 

 

 

 

 

Overheads

 

 

1,616

1,482

 

 

 

 

 

Operating profit

 

102

(84)

 

 

 

 

 

Finance expense

 

(10)

(6)

Income from joint ventures

 

12

-

Profit before tax

 

104

(90)

 

 

 

 

 

Taxation

 

 

-

-

Profit after tax

 

 

104

(90)

 

 

 

 

 

Earnings per share

 

2.46p

(2.13p)

Interim dividend per share

 

0.50p

0.25p

Net assets per share

 

95p

99p

 

 

 

Half year ended 31 May 2021

 

Following a very challenging time in the last financial year, I am pleased to report that revenue has increased in the half year to 31 May 2021, and that the Group has returned to profitability.  The improving economic environment has affected both business segments in different ways.  Details of this are set out below.

 

Group revenue increased by 8.7% to £5.8m (H1 2020: £5.3m), gross margins increased from 26.2% to 29.7%, and pre-tax profit was £104,000 (H1 2020: loss of £90,000). 

 

PCB

 

As the global economy returned to growth, the PCB industry experienced significant instability, with widespread raw material shortages and marked cost increases both for goods and freight.  PCB sales in the period decreased by 8.6% compared to the same period in 2020, from £4,157,000 to £3,798,000. PCB gross margins, however, increased by 2.2% to 25.5%.  Administration expenses were similar to the previous year in value terms, although as a percentage of sales they increased from 16.4% to 17.8%.  Overall, PCB activities recorded a pre-tax profit of £134,000 (H1 2020: profit of £124,000).

 

On 24 August 2021 we announced that our UK and Germany operating subsidiaries had conditionally agreed to sell certain PCB assets to the Ventec International Group for a cash consideration of c. £1,600,000.  The sale proceeds will be used for investment in the continuing PCB and LCS segments and for general working capital purposes.

 

LCS

 

The LCS divisions recovered strongly in 2021 as the economy improved and building projects resumed: revenue increased by 70.2% overall to £1,991,000 (2020: £1,170,000).  Margins improved from 36.8% to 37.7%, and overheads as a percentage of sales fell from 49.7% to 32.3%.  The overall result for the LCS divisions was a profit of £53,000 (H1 2020: loss of £174,000). 

 

The two LCS joint ventures, Holders Technology Austria, and Holders Technology Data Analytics, made further progress during the period and together contributed £12,000 profit (H1 2020: nil profit because both joint ventures commenced trading in H2 2020).  

 

Cash and Debt

 

Group cash at the period end was £1,277,000 (H1 2020: £723,000).  Other than lease liabilities, the company has no debt. 

 

Outlook

 

The outlook for the second half of the year is encouraging, although there is still a level of uncertainty regarding global supply chains.  Holders continues to expand its product and services portfolio, as well as investing in people and additional technology to support this expansion.  The company also seeks additional complementary revenue streams when opportunities arise. Its ability to do this will be enhanced by the asset disposal outlined above.

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

 

 

Rudolf W. Weinreich    Holders Technology plc 

Executive Chairman  27-28 Eastcastle Street

  London W1W 8HD

 

 

For further information, contact:

 

Holders Technology plc

Rudi Weinreich, Executive Chairman                                                                                               01896 758781

Victoria Blaisdell, Group Managing Director

Paul Geraghty, Group Finance Director

 

SP Angel Corporate Finance LLP - Nomad and Broker

Matthew Johnson/ Caroline Rowe, Corporate Finance     020 3470 0470

 

Website

www.holdersgroup.com

 

 

 

Consolidated income statement

for the half year ended 31 May 2021 (Unaudited)

 

 

 

Half year

ended 31

May 2021

 

Half year

ended 31

May 2020

 

Full year

ended 30

Nov 2020

Notes

£'000

 

£'000

 

£'000

 

Revenue

4

5,789

 

5,327

 

9,838

Cost of sales

 

(4,071)

 

(3,929)

 

(7,135)

Gross profit

 

1,718

 

1,398

 

2,703

Distribution costs

 

(213)

 

(186)

 

(348)

Administrative expenses

 

(1,399)

 

(1,294)

 

(2,562)

Other operating expenses

 

(4)

 

(2)

 

(42)

Operating profit/ (loss)

 

102

 

(84)

 

(249)

Income from joint ventures

 

12

 

-

 

1

Finance costs

 

(10)

 

(6)

 

(16)

Profit/ (loss) before taxation

 

104

 

(90)

 

(264)

Taxation

5

-

 

-

 

-

Profit/ (loss) for the period

 

104

 

(90)

 

(264)

 

Total and continuing

 

 

 

 

 

 

Basic earnings per share

7

2.46p

 

(2.13p)

 

(6.25p)

Diluted earnings per share

7

2.46p

 

(2.13p)

 

(6.25p)

 

 

 

                 

 

 

 

Consolidated statement of comprehensive income

for the half year ended 31 May 2021 (Unaudited)

 

 

 

Half year

ended 31

May 2021

 

Half year

ended 31

May 2020

 

Full year

ended 30

Nov 2020

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Profit/ (loss) for the period

104

 

(90)

 

(264)

Reserves adjustment for IFRS 16

 

-

 

(10)

 

-

Exchange differences on translation of foreign operations

 

 

(89)

 

 

133

 

 

120

Total comprehensive income for the period

 

 

15

 

 

33

 

 

(144)

 

 

 

 

 

 

 

 

 

 

Consolidated statement of changes in equity

for the half year ended 31 May 2021 (Unaudited)

 

 

Share capital

Share

premium

Capital
redemption   reserve

Translation    reserve

Retained   earnings

Total equity

 

  £'000

  £'000

  £'000

  £'000

  £'000

  £'000

 

 

 

 

 

 

 

Balance 1 Dec 2019

422

1,590

1

128

2,023

4,164

 

Dividends

-

-

-

-

(21)

(21)

Transactions with owners

 -

-

-

-

(21)

(21)

Loss for the year

 -

-

-

-

(264)

(264)

Exchange differences on translating foreign operations

 -

-

-

(120)

-

120

Total comprehensive income for the year

 -

-

120

(264)

(144)

Balance 30 Nov 2020

422 

1,590

1

248

1,738

3,999

Dividends

-

-

-

-

(10)

(10)

 

-

-

-

-

(10)

(10)

Profit for the period

 -

-

-

-

104

104

Exchange differences on translating foreign operations

 -

-

-

(89)

-

(89)

Total comprehensive income for the period

 -

(89)

104

15

Balance 31 May 2021

422 

1,590

1

125

1,832

4,004

 

 

Consolidated balance sheet

at 31 May 2021 (Unaudited)

 

 

 

Half year

ended 31

May 2021

 

Half year

ended 31

May 2020

 

Full year

ended 30

Nov 2020

 

Notes

£'000

 

£'000

 

£'000

Assets

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Intangible fixed assets

 

378

 

388

 

381

 

Property, plant and equipment

3

1,127

 

654

 

560

 

Investment in joint venture

 

40

 

15

 

28

 

Deferred tax assets

 

12

 

12

 

12

 

 

 

1,557

 

1,069

 

981

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Inventories

 

1,953

 

2,358

 

2,340

 

Trade and other receivables

 

1,642

 

1,461

 

1,420

 

Cash and cash equivalents

 

1,277

 

723

 

1,113

 

 

 

4,872

 

4,542

 

4,873

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

(1,270)

 

(765)

 

(1,274)

 

Lease liabilities

3

(930)

 

(419)

 

(105)

 

Current tax liabilities

 

-

 

-

 

-

 

 

 

(2,200)

 

(1,184)

 

(1,379)

 

 

 

 

 

 

 

 

Net current assets

 

2,672

 

3,358

 

3,494

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Retirement benefit liability

 

(216)

 

(221)

 

(223)

 

Lease liabilities

 

-

 

-

 

(244)

 

Deferred tax liabilities

 

(9)

 

(9)

 

(9)

 

 

 

(225)

 

(230)

 

(476)

 

 

 

 

 

 

 

 

Net assets

 

4,004

 

4,197

 

3,999

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

Share capital

 

422

 

422

 

422

 

Share premium account

 

1,590

 

1,590

 

1,590

 

Capital redemption reserve

 

1

 

1

 

1

 

Retained earnings

 

1,829

 

1,923

 

1,738

 

Cumulative translation adjustment

 

 

162

 

261

 

248

Equity attributable to the shareholders of the parent

 

 

4,004

 

 

4,197

 

 

3,999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated cash flow statement

for the half year ended 31 May 2021 (Unaudited)

 

 

Half year

ended 31

May 2021

 

Half year

ended 31

May 2020

 

Full year

ended 30

Nov 2020

 

 

£'000

 

£'000

 

£'000

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

Profit/ (loss) before tax

104

 

(90)

 

(264)

 

 

Depreciation

131

 

150

 

292

 

 

Decrease in inventories

323

 

261

 

284

 

 

(Increase)/ decrease in trade and other receivables

(579)

 

(75)

 

385

 

 

Increase/ (decrease) in trade and other payables

350

 

(139)

 

(50)

 

 

Interest expense

10

 

6

 

16

 

 

 

 

 

 

 

 

 

 

Cash generated from operations

339

 

123

 

663

 

 

 

 

 

 

 

 

 

 

Income from investments

(12)

 

-

 

(1)

 

 

Interest paid

(10)

 

(6)

 

(16)

 

 

Net cash generated from operations

317

 

117

 

646

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Purchase of property, plant, and equipment

(30)

 

(21)

 

(25)

 

 

Investment in joint venture

-

 

(15)

 

(27)

 

 

 

 

 

 

 

 

 

 

Net cash used in investing activities

(30)

 

(36)

 

(52)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Equity dividends paid

-

 

-

 

(21)

 

 

Lease repayments

(95)

 

(116)

 

(213)

 

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

(95)

 

(116)

 

(234)

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

192

 

(35)

 

360

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at start of period

1,113

 

734

 

734

 

 

Effect of foreign exchange rates

(28)

 

24

 

19

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

1,277

 

723

 

1,113

 

 

 

 

 

 

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 2020.

 

The 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 2020 and 31 May 2021.

 

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 2020 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 August 2021.

 

3.             IFRS 16 Leases

 

  On 1 January 2021 the lease on the premises at Kirchheimbolanden, Germany was renewed for a 5-year term.  As required under IFRS 16, the lease has been shown as a right-of-use asset and lease liability on the balance sheet, both at an initial value of £676,000. 

 

4.  Segmental information

 

  Management currently identifies two operating segments:

 

1.  PCB distributes materials, equipment, and supplies to the PCB industry.

2.  LCS provides lighting and control solutions.

 

 

 

Analysis by operating segment for the half year ended 31 May 

 

PCB

LCS

Central Costs

Total

 

2021

2020

2021

2020

2021

2020

2021

2020

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

Revenue

3,798

4,157

1,991

1,170

-

-

5,789

5,327

Cost of sales

2,830

3,189

1,241

740

-

-

4,071

3,929

Gross Profit

968

968

750

430

  -

-

1,718

1,398

Distribution costs

159

164

54

22

-

-

213

186

Administration costs and other operating expenses

675

680

643

582

85

34

1,403

1,296

Segment Profit/ (Loss)

134

124

53

(174)

(85)

(34)

102

(84)

 

 

5.  The tax provision for the six months ended 31 May 2021 is calculated based on the tax rates applicable in the country in which each company operates.

 

6.  A final dividend of 0.25p per share on the total issued share capital of 4,224,164 10p ordinary shares was approved by the board on 29 January 2021, and paid on 1 June 2021, in respect of the year ended 30 November 2020. 

 

An interim dividend payment of 0.50p per share (2020: 0.25p per share) will be payable on 5 October 2021 to shareholders on the register at 10 September 2021.  The shares will go ex-dividend on 9 September 2021.  The interim dividend had not been approved by the board at 31 May 2021 and accordingly, has not been included as a liability as at that date.

 

7.  The basic earnings per share for continuing operations are based on the profit for the period of £104,000 (2020: loss £90,000) and on 4,224,164 ordinary shares (2020: 4,224,164), the weighted average number of shares in issue during the period.  There were no share options in issue in 2020 or 2021 and therefore diluted earnings per share and basic earnings per share are the same value for each year.

 

8.  A copy of this half yearly report will be 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.holderstechnology.com.

 

 

 

 

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