Half-year Report

RNS Number : 2808X

Holders Technology PLC

26 August 2022

 

Holders Technology plc

("Holders Technology", the "Company" or the "Group")

Half Year Report

Holders Technology, (AIM: HDT), is pleased to announce its unaudited half year results for the six months ended 31 May 2022.

Highlights

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

Unaudited results for the half year ended 31 May 2022 are summarised as follows:

			2022	2021
			£'000	£'000
Revenue		LCS	2,227	1,991
		PCB	1,227	3,798
		Total	3,454	5,789
Gross profit			1,207	1,718
Margins			34.9%	29.7%
Overheads			1,450	1,616
Operating (loss)/ profit			(243)	102
Finance expense			(1)	(10)
Income from joint ventures			18	12
(Loss)/ profit before tax			(226)	104
Taxation			-	-
(Loss)/ profit after tax			(226)	104
(Loss)/ earnings per share			(5.35p)	2.46p
Interim dividend per share			0.50p	0.50p
Net assets per share			99p	95p

Chairman's statement

Half year ended 31 May 2022

The Group has undergone a transformation during the last two financial years.  In 2021, the Group disposed of its lower growth, lower margin PCB consumable activities.  During 2022 the Group has refocused on its continuing specialist PCB businesses and invested further in the LCS divisions.  Details of this are set out below.

Revenue for the 6 months to 31 May 2022 was £3,454,000.  Revenue for the 6 months to 31 May 2021 ("H1 2021") from the continuing business (i.e. excluding discontinued PCB revenues) was £3,373,000, and therefore growth from the continuing revenues was 3.3%.  This figure however does not include the Group share of joint venture revenues of £193,000 (2021: 48,000); if this is included then Group revenue growth was 7.5%.

Gross margins increased from 29.7% to 34.9%, and the pre-tax Group result was a loss of £226,000 (H1 2021: profit of £104,000). 

LCS

UK revenue growth was strong however market demand in Germany was weakened by project delays and cancellations.  LCS revenue increased by 11.9% overall to £2,227,000 (2021: £1,991,000) and by 18.7%, when including the Group share of the joint venture revenue.  We have continued to invest across the Group in staff, technology and product development.  These costs have initially contributed to a margin decrease from 37.7% to 34.3%, which we are seeking to improve.  The overall result for the LCS divisions was an operating loss of £216,000 (H1 2021: profit of £53,000). 

In addition to the above, the four LCS joint ventures, Holders Technology Austria, Holders Technology Data Analytics, Holders Technology New Zealand and Holders Technology Australia made further progress during the period and overall were profitable.

PCB

Results from the restructured PCB divisions were broadly in line with expectations, in spite of difficult market conditions.  Revenues from the continuing product ranges decreased by 11.2% from £1,382,000 to £1,227,000, partly because shorter supplier lead times enabled customers to hold less stock.  Gross margins improved from 25.5% to 36.1%, due to the product mix of the retained PCB business and the overall result was an operating profit of £83,000 (H1 2021: £134,000 profit).

Cash and Debt

Group cash at the period end was £2,490,000 (31 May 2021: £1,277,000).  Other than lease liabilities, the Company has no debt. 

Outlook

The second half of the financial year has started well, with improving revenue and profitability.  We will continue with our strategy to invest in sales and technical resources, new products and technology to enable the Group to be a leader in our markets.  Whilst we are cautious regarding the global economic outlook, we remain confident that future performance will demonstrate the validity of this approach. 

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 2022 (Unaudited)

				Half year ended 31 May 2022		Half year ended 31 May 2021		Full year ended 30 Nov 2021
Notes				£'000		£'000		£'000
Revenue			3	3,454		5,789		12,386
Cost of sales				(2,247)		(4,071)		(8,516)
Gross profit				1,207		1,718		3,870
Distribution costs				(88)		(213)		(408)
Administrative expenses				(1,359)		(1,399)		(3,001)
Impairment of goodwill				-		-		(146)
Other operating expenses				(3)		(4)		8
Operating (loss)/ profit				(243)		102		323
Income from joint ventures				18		12		3
Profit on disposal of assets				-		-		471
Finance costs				(1)		(10)		(10)
(Loss)/ profit before taxation				(226)		104		787
Taxation			4	-		-		(92)
(Loss)/ profit for the period				(226)		104		695
Total and continuing
Basic (loss)/ earnings per share			6	(5.35p)		2.46p		16.45p
Diluted (loss)/ earnings per share			6	(5.35p)		2.46p		16.45p

Consolidated statement of comprehensive income

for the half year ended 31 May 2022 (Unaudited)

		Half year ended 31 May 2022		Half year ended 31 May 2021		Full year ended 30 Nov 2021
		£'000		£'000		£'000
Profit/ (loss) for the period		(226)		104		695
Exchange differences on translation of foreign operations		7		(89)		(134)
Total comprehensive income for the period		(219)		15		561

Consolidated statement of changes in equity

for the half year ended 31 May 2022 (Unaudited)

	Share capital	Share premium	Capital redemption   reserve	Translation     reserve	Retained  earnings	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance 1 Dec 2020	422	1,590	1	248	1,738	3,999
Dividends	-	-	-	-	(32)	(32)
Transactions with owners	-	-	-	-	(32)	(32)
Profit for the year	-	-	-	-	695	695
Exchange differences on translating foreign operations	-	-	-	(134)	-	(134)
Total comprehensive income for the year	-	-	-	(134)	695	561
Balance 30 Nov 2021	422	1,590	1	114	2,401	4,528
Dividends	-	-	-	-	(106)	(106)
	-	-	-	-	(106)	(106)
Loss for the period	-	-	-	-	(226)	(226)
Exchange differences on translating foreign operations	-	-	-	7	-	7
Total comprehensive income for the period	-	-	-	7	(226)	(219)
Balance 31 May 2022	422	1,590	1	121	2,069	4,203

Consolidated balance sheet

at 31 May 2022 (Unaudited)

			Half year ended 31 May 2022		Half year ended 31 May 2021		Full year ended 30 Nov 2021
		Notes	£'000		£'000		£'000
Assets
Non-current assets
	Intangible fixed assets		172		378		220
	Property, plant and equipment		186		1,127		82
	Leased assets						87
	Investment in joint ventures		130		40		111
	Deferred tax assets		12		12		12
			500		1,557		512
Current assets
	Inventories		1,623		1,953		1,180
	Trade and other receivables		1,173		1,642		1,593
	Cash and cash equivalents		2,490		1,277		3,192
			5,286		4,872		5,695
Liabilities
Current liabilities
	Trade and other payables		(1,389)		(1,270)		(1,661)
	Lease liabilities	3	-		(930)		(58)
	Current tax liabilities		-		-		-
			(1,389)		(2,200)		(1,719)
Net current assets			3,897		2,672		4,246
Non-current liabilities
	Retirement benefit liability		(185)		(216)		(186)
	Lease liabilities		-		-		(35)
	Deferred tax liabilities		(9)		(9)		(9)
			(194)		(225)		(230)
Net assets			4,203		4,004		4,528
Shareholders' equity
	Share capital		422		422		422
	Share premium account		1,590		1,590		1,590
	Capital redemption reserve		1		1		1
	Retained earnings		2,069		1,829		2,401
	Cumulative translation adjustment		121		162		114
Equity attributable to the shareholders of the parent			4,203		4,004		4,528

Consolidated cash flow statement

for the half year ended 31 May 2022 (Unaudited)

		Half year ended 31 May 2022		Half year ended 31 May 2021		Full year ended 30 Nov 2021
		£'000		£'000		£'000
Cash flows from operating activities
	(Loss)/ profit before tax	(244)		104		787
	Depreciation	43		131		168
	Gain on disposal of property, plant and equipment	-		-		(471)
	Impairment - Goodwill	-		-		146
	(Increase)/ decrease in inventories	(442)		323		1,093
	(Increase)/ decrease in trade and other receivables	(83)		(579)		(527)
	Increase/ (decrease) in trade and other payables	233		350		702
	Interest expense	1		10		10
	Cash generated from operations	(492)		339		1,908
	Income from investments	(18)		(12)		(3)
	Tax paid	-		-		(92)
	Interest paid	(1)		(10)		(10)
	Net cash generated from operations	(511)		317		1,803
Cash flows from investing activities
	Purchase of property, plant, and equipment	(69)		(30)		(65)
	Investment in joint venture	18		-		(80)
	Proceeds from sale of property, plant and equipment	-		-		553
	Net cash used in investing activities	(51)		(30)		408
Cash flows from financing activities
	Equity dividends paid	(106)		-		(32)
	Lease repayments	(26)		(95)		(37)
	Net cash used in financing activities	(132)		(95)		(69)
Net change in cash and cash equivalents		(694)		192		2,142
	Cash and cash equivalents at start of period	3,192		1,113		1,113
	Effect of foreign exchange rates	(8)		(28)		(63)
Cash and cash equivalents at end of period		2,490		1,277		3,192

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 2021.

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 2021 and 31 May 2022.

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 2021 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 25 August 2022.

Notes (continued):

3.  Segmental information

  Management currently identifies two operating segments:

1.  LCS provides lighting and control solutions.

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

Analysis by operating segment for the half year ended 31 May 

	LCS		PCB		Central Costs		Total
	2022	2021	2022	2021	2022	2021	2022	2021
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	2,227	1,991	1,227	3,798	-	-	3,454	5,789
Cost of sales	1,463	1,241	784	2,830	-	-	2,247	4,071
Gross Profit	764	750	443	968	-	-	1,207	1,718
Distribution costs	65	54	23	159	-	-	88	213
Administration costs and other operating expenses	915	643	338	675	109	85	1,253	1,403
Operating Profit/ (Loss)	(216)	53	82	134	(109)	(85)	(243)	102

4.          The tax provision for the six months ended 31 May 2022 is calculated based on the tax rates applicable in the country in which each company operates.

5.         A special dividend of 2.00p per share on the total issued share capital of 4,224,164 10p ordinary shares was approved by the board on 21 December 2021 and paid on 28 January 2022. 

A final dividend of 0.50p (2021: 0.25p per share) per share on the total issued share capital of 4,224,164 10p ordinary shares was approved by the board on 28 January 2022, and paid on 31 May 2022, in respect of the year ended 30 November 2021. 

An interim dividend payment of 0.50p per share (2021: 0.25p per share) will be payable on 4 October 2022 to shareholders on the register on 9 September 2022.  The shares will go ex-dividend on 8 September 2022.  The interim dividend had not been approved by the board on 31 May 2022 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 £226,000 (2021: profit £104,000) and on 4,224,164 ordinary shares (2021: 4,224,164), the weighted average number of shares in issue during the period.  There were no share options in issue in 2021 or 2022 and therefore diluted earnings per share and basic earnings per share are the same value for each year.

7.        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 .

 

END

 

 

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