Half-year Report

Holders Technology PLC

16 August 2023

 

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 2023.

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 2023 are summarised as follows:

			2023	2022
			£'000	£'000
Revenue		LCS	2,764	2,227
		PCB	1,101	1,227
		Total	3,865	3,454
Gross profit			1,261	1,207
Margins			32.6%	34.9%
Overheads			1,736	1,450
Operating (loss)/ profit			(475)	(243)
Finance expense			18	(1)
Income from joint ventures			(50)	18
(Loss)/ profit before tax			(507)	(226)
Taxation			-	-
(Loss)/ profit after tax			(507)	(226)
(Loss)/ earnings per share			(11.99p)	(5.35p)
Interim dividend per share			0.25p	0.50p
Net assets per share			85p	99p

Chairman's statement

Half year ended 31 May 2023

The results for the first half of 2023 are disappointing but an improvement for the second half is anticipated. The first half saw weak customer demand due to a generally adverse economic climate. Coupled with this, some PCB customers were holding higher than anticipated levels of stock at the beginning of the period, and this contributed to lower demand than we would normally expect in the first quarter. When this became apparent, the Group reduced its cost base which was of some benefit in the latter part of the first half of the year and is expected further to benefit the second half of the year.

Revenue for the six months to 31 May 2023 was £3,865,000 (2022: £3,454,000), and the growth in revenue was 11.9%. The figures do not include the Group share of joint venture revenues of £196,000 (2022: £193,000). Gross margins reduced from 34.9% to 32.6% and the pre-tax Group results was a loss of £507,000 (2022: loss of £226,000).

LCS

LCS revenue increased by 24.1% to £2,764,000 (2022: £2,227,000) with stronger growth in the UK than in Germany. The higher cost base as a result of actions taken to expand our activities contributed to a margin decrease from 34.3% to 32.4%. The overall result for the LCS divisions was an operating loss of £364,000 (2022: loss of £216,000).

The LCS joint ventures also suffered from unfavourable market conditions and in aggregate were loss making, recording a loss of £50,000 for the half year (2022: profit of £18,000.)

PCB

Results from the PCB division saw revenues decreasing by 10.3% from £1,227,000 to £1,101,000. This decrease was largely due to customers holding higher stocks at the beginning of 2023. Gross margins reduced from 36.1% to 33.1% and the overall result was an operating profit of £2,000 (2022: £82,000 profit).

Cash and Debt

Group cash at the period end was £1,808,000 (31 May 2022: £2,490,000). Other than lease liabilities, the Company has no debt. 

Outlook

Although in the second half of the current year the Group will benefit from the cost saving measures already in hand, we remain cautious as regards our expectations for the second half of the current year. Despite the current economic situation and the consequent difficult market conditions, we remain confident for the longer term and continue to believe that performance will improve as markets settle.

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	01896 758781
Rudi Weinreich, Executive Chairman
Victoria Blaisdell, Group Managing Director
Mehul Shah, Group Finance Director
Website www.holderstechnology.com
SP Angel Corporate Finance LLP - Nominated Adviser & Broker	020 3470 0470
Matthew Johnson / Harry Davies-Ball (Corporate Finance)
Abigail Wayne (Sales)

Website

www.holderstechnology.com

Consolidated income statement

for the half year ended 31 May 2023 (Unaudited)

				Half year ended 31 May 2023		Half year ended 31 May 2022		Full year ended 30 Nov 2022
Notes				£'000		£'000		£'000
Revenue			3	3,865		3,454		8,319
Cost of sales				(2,604)		(2,247)		(5,425)
Gross profit				1,261		1,207		2,894
Distribution costs				(92)		(88)		(197)
Administrative expenses				(1,618)		(1,359)		(2,943)
Impairment of goodwill				-		-		-
Other operating expenses				(26)		(3)		8
Operating (loss)/ profit				(475)		(243)		(238)
Income from joint ventures				(50)		18		(8)
Profit on disposal of assets				-		-		-
Finance costs				18		(1)		(13)
(Loss)/ profit before taxation				(507)		(226)		(259)
Taxation			4	-		-		-
(Loss)/ profit for the period				(507)		(226)		(259)
Total and continuing
Basic (loss)/ earnings per share			6	(11.99p)		(5.35p)		(6.13p)
Diluted (loss)/ earnings per share			6	(11.99p)		(5.35p)		(6.13p)

Consolidated statement of comprehensive income

for the half year ended 31 May 2023 (Unaudited)

		Half year ended 31 May 2023		Half year ended 31 May 2022		Full year ended 30 Nov 2022
		£'000		£'000		£'000
Profit/ (loss) for the period		(507)		(226)		(259)
Exchange differences on translation of foreign operations		(47)		7		29
Total comprehensive income for the period		(554)		(219)		(230)

Consolidated statement of changes in equity

for the half year ended 31 May 2023 (Unaudited)

	Share capital	Share premium	Capital redemption     reserve	Translation             reserve	Retained              earnings	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance 1 Dec 2021	422	1,590	1	114	2,401	4,528
Dividends	-	-	-	-	(126)	(126)
Transactions with owners	-	-	-	-	(126)	(126)
Loss for the year	-	-	-	-	(259)	(259)
Exchange differences on translating foreign operations	-	-	-	29	-	29
Total comprehensive income for the year	-	-	-	29	(259)	(230)
Balance 30 Nov 2022	422	1,590	1	143	2,016	4,172
Dividends	-	-	-	-	(21)	(21)
	-	-	-	-	(21)	(21)
Loss for the period	-	-	-	-	(507)	(507)
Exchange differences on translating foreign operations	-	-	-	(47)	-	(47)
Total comprehensive income for the period	-	-	-	(47)	(507)	(554)
Balance 31 May 2023	422	1,590	1	96	1,488	3,597

Consolidated balance sheet

at 31 May 2023 (Unaudited)

			Half year ended 31 May 2023		Half year ended 31 May 2022		Full year ended 30 Nov 2022
		Notes	£'000		£'000		£'000
Assets
Non-current assets
	Intangible fixed assets		186		172		190
	Property, plant and equipment		320		186		226
	Leased assets		151				63
	Investment in joint ventures		62		130		103
	Deferred tax assets		12		12		12
			731		500		594
Current assets
	Inventories		1,248		1,623		1,362
	Trade and other receivables		1,481		1,173		1,636
	Cash and cash equivalents		1,808		2,490		2,270
			4,537		5,286		5,268
Liabilities
Current liabilities
	Trade and other payables		(1,244)		(1,389)		(1,456)
	Lease liabilities	3	(73)		-		(51)
	Current tax liabilities		(60)		-		-
			(1,377)		(1,389)		(1,507)
Net current assets			3,160		3,897		3,761
Non-current liabilities
	Retirement benefit liability		(206)		(185)		(165)
	Lease liabilities		(79)		-		(9)
	Deferred tax liabilities		(9)		(9)		(9)
			(294)		(194)		(183)
Net assets			3,597		4,203		4,172
Shareholders' equity
	Share capital		422		422		422
	Share premium account		1,590		1,590		1,590
	Capital redemption reserve		1		1		1
	Retained earnings		1,488		2,069		2,016
	Cumulative translation adjustment		96		121		143
Equity attributable to the shareholders of the parent			3,597		4,203		4,172

Consolidated cash flow statement

for the half year ended 31 May 2023 (Unaudited)

		Half year ended 31 May 2023		Half year ended 31 May 2022		Full year ended 30 Nov 2022
		£'000		£'000		£'000
Cash flows from operating activities
	(Loss)/ profit before tax	(507)		(244)		(259)
	Depreciation	29		43		141
	Gain on disposal of property, plant and equipment	-		-		3
	Impairment - Goodwill	-		-		-
	(Increase)/ decrease in inventories	112		(442)		(173)
	(Increase)/ decrease in trade and other receivables	(446)		(83)		(409)
	Increase/ (decrease) in trade and other payables	543		233		169
	Interest expense/(income)	(16)		1		13
	Cash generated from operations	(285)		(492)		(515)
	Income/(loss) from investments	-		(18)		8
	Tax paid	-		-		-
	Interest paid	-		(1)		(21)
	Net cash generated from operations	(285)		(511)		(528)
Cash flows from investing activities
	Purchase of property, plant, and equipment	(184)		(69)		(212)
	Investment in joint venture	50		18		-
	Proceeds from sale of property, plant and equipment	-				2
	Interest Received	16		-		42
	Net cash used in investing activities	(118)		(51)		(168)
Cash flows from financing activities
	Equity dividends paid	(21)		(106)		(126)
	Lease repayments	(33)		(26)		(57)
	Net cash used in financing activities	(54)		(132)		(183)
Net change in cash and cash equivalents		(457)		(694)		(879)
	Cash and cash equivalents at start of period	2,270		3,192		3,192
	Effect of foreign exchange rates	(5)		(8)		(43)
Cash and cash equivalents at end of period		1,808		2,490		2,270

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 2022.

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 2022 and 31 May 2023.

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 2022 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 15 August 2023.

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
	2023	2022	2023	2022	2023	2022	2023	2022
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	2,764	2,227	1,101	1,227	-	-	3,865	3,454
Cost of sales	1,868	1,463	736	784	-	-	2,604	2,247
Gross Profit	896	764	365	443	-	-	1,261	1,207
Distribution costs	70	65	22	23	-	-	92	88
Administration costs and other operating expenses	1,190	915	341	338	113	109	1,644	1,362
Operating Profit/ (Loss)	(364)	(216)	2	82	(113)	(109)	(475)	(243)

4.            The tax provision for the six months ended 31 May 2023 is calculated based on the tax rates applicable in the country in which each company operates.

5.            A final dividend of 0.50p (2022: 0.50p per share) per share on the total issued share capital of 4,224,164 10p ordinary shares was approved by the board on 24 January 2023, and paid on 31 May 2023, in respect of the year ended 30 November 2022. 

An interim dividend payment of 0.25p per share (2022: 0.50p per share) will be payable on 4 October 2023 to shareholders on the register on 8 September 2023.  The shares will go ex-dividend on 7 September 2023.  The interim dividend had not been approved by the board on 31 May 2023 and accordingly, has not been included as a liability as at that date.

6.            The basic earnings per share are based on the loss for the period of £507,000 (2022: loss £226,000) and on 4,224,164 ordinary shares (2022: 4,224,164), the weighted average number of shares in issue during the period.  There were no share options in issue in 2022 or 2023 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