6m results to 31 March 2006
Titon Holdings PLC
11 May 2006
Titon Holdings Plc
2006 Interim Statement
for the six months ended 31 March 2006
Chairman's Statement
FINANCIAL PERFORMANCE
Profit before taxation for the six months to 31 March 2006 was 24.9% lower than
the same period last year at £420,000 (2005: £559,000) on turnover 3.5% higher
at £8,195,000 (2005: £7,917,000). Basic earnings per share were 22.9% lower at
2.86p (2005: 3.71p) and the Directors have declared an unchanged interim
dividend of 2.3p (2005: 2.3p).
Capital expenditure during the six months was high at £1,142,000. Of this amount
£416,000 relates to investment in our Plastic Injection Moulding Plant and
£247,000 is in respect of tooling for new products.
These are the first results published under International Financial Reporting
Standards (IFRS). The previously published results for 2005, prepared under UK
Generally Accepted Accounting Principles (UK GAAP), have been restated and all
comparative figures are in accordance with IFRS. The adjustments to the results
for 2005 are shown in the notes to the 2006 Interim Statement.
TRADING COMMENTARY
Sales of Titon manufactured products continue to be affected by tough UK market
competition. The 3.5% sales growth experienced during the period relates to
products that were bought in for resale; with our own product sales falling
slightly. Two of the areas of our business in which we have recently invested
in direct sales staff, namely 'Ventilation Systems' and 'Aluminium Fittings',
are predominantly selling bought in products. These sectors of operation
continue to grow steadily, whilst our traditional markets remain challenging.
This is due to a combination of increased competition and reduced customer
demand, as evidenced in many other markets in the UK. Our export sales are 33%
ahead of last year, which is most encouraging.
I reported in my end of year statement that the Draft of the new Building
Regulations (England & Wales) for Ventilation had been published giving us some
direction for the future. Subsequently, the final document was issued in April,
which included some significant changes in content and timings from the Draft
document. As a result of the very short timescale between publication and
proposed implementation, the requirement to fit trickle ventilators in
replacement windows has been deferred until October 2006 delaying any expected
benefits.
I have, over recent years, consistently reported significant capital investment
in production processes to drive down the cost of manufacturing and this has
been maintained during the past 6 months. Despite this, the increases in cost
of basic raw materials, and other associated production and distribution costs
have continued to impact on our margins.
PROSPECTS
General conditions within the UK window and door market remain difficult and
delayed implementation of the new Building Regulations means they are unlikely
to offer much short term improvement. In the longer term, however, we are
confident it will provide us with opportunities for growth - particularly as we
consolidate our ability to provide total ventilation systems to the industry.
Significantly, we are shortly to launch a new improved version of the Trimvent
Select Ventilator range designed specifically for the new regulations. The
products, which are to be marketed under the brand name 'Trimvent Select Xtra',
give an improved level of airflow over the current products and will enable
easier compliance for both developers and window fabricators.
Unfortunately, given the factors noted above, and particularly the delays in
Regulation implementation, I expect that second half earnings will be broadly
similar to the first half.
J N Anderson
Chairman
10 May 2006
Titon Holdings Plc
Consolidated Interim Income Statement
for the six months ended 31 March 2006
Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
Note £'000 £'000 £'000
Revenue 2 8,195 7,917 16,436
Operating profit 354 482 1,028
Interest income 66 77 151
-------- -------- --------
Profit before taxation 420 5599 1,179
Taxation expense 3 (118) (168) (328)
-------- -------- --------
Profit for the period attributable to
the members of Titon Holdings Plc 7 302 391 851
-------- -------- --------
Earnings per share - basic 6 2.86p 3.71p 8.08p
- diluted 6 2.85p 3.70p 8.06p
Consolidated Statement of Recognised Income & Expense
for the six months ended 31 March 2006
Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
Note £'000 £'000 £'000
Profit for the period attributable to
the members of Titon Holdings Plc 5 302 391 851
Exchange difference on re-translation
of net assets of subsidiary
undertakings 9 12 - (3)
-------- -------- --------
Total recognised income & expense
relating to the period 314 391 848
-------- -------- --------
Titon Holdings Plc
Consolidated Interim Balance Sheet
at 31 March 2006
31.3.06 31.3.05 30.9.05
Note £'000 £'000 £'000
Assets
Intangible assets 57 8 6
Property, plant and equipment 4,984 4,134 4,242
-------- -------- --------
Total non-current assets 5,041 4,142 4,248
Stocks 2,863 2,563 2,511
Trade and other receivables 3,828 3,468 3,695
Cash at bank and in hand 2,473 3,154 3,380
-------- -------- --------
Total current assets 9,164 9,185 9,586
-------- -------- --------
Total Assets 14,205 13,327 13,834
-------- -------- --------
Liabilities
Deferred tax liability 104 95 104
-------- -------- --------
Total non-current liabilities 104 95 104
Trade and other payables 2,850 2,113 2,406
Bank overdraft 81 - 21
Corporation tax liabilities 166 182 144
Employee benefits 33 15 21
-------- -------- --------
Total current liabilities 3,130 2,310 2,592
-------- -------- --------
Total Liabilities 3,234 2,405 2,696
-------- -------- --------
Equity
Called up share capital 1,055 1,053 1,053
Share premium 863 841 841
Capital redemption reserve 56 56 56
Translation reserve 9 - (3)
Share schemes reserve 4 2 - 1
Retained earnings 8,986 8,972 9,190
-------- -------- --------
Total Equity 5 10,971 10,922 11,138
-------- -------- --------
-------- -------- --------
Total Liabilities and Equity 14,205 13,327 13,834
-------- -------- --------
Titon Holdings Plc
Consolidated Interim Statement of Cash Flows
for the six months ended 31 March 2006
Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
Note £'000 £'000 £'000
Cash flows from operating activities
Profit before tax 420 559 1,179
Adjustments for:
Depreciation 335 297 599
Interest income (66) (77) (151)
Share based payment expense 1 - 1
Increase in trade and other (130) (267) (494)
receivables
(Increase) / decrease in stocks (343) 17 69
Increase/ (decrease) in trade and
other payables 456 (28) 270
Profit on sale of plant & equipment (10) (2) (19)
-------- -------- --------
Cash generated from operations 663 499 1,454
-------- -------- --------
Interest income 66 77 151
Corporation taxes paid (96) (82) (271)
-------- -------- --------
Net cash generated from operating
activities 633 494 1,334
-------- -------- --------
Cash used in investing activities
Purchase of plant & equipment and
intangible assets 8 (1,142) (151) (569)
Proceeds from sale of plant & 24 5 30
equipment
-------- -------- --------
Net cash used in investing activities (1,118) (146) (539)
-------- -------- --------
Cash flows used in financing
activities
Dividends paid 6 (506) (505) (747)
Shares issued under the Company's 24 - -
share option scheme
-------- -------- --------
Net cash used in financing activities (482) (505) (747)
-------- -------- --------
Net (decrease) / increase in cash &
cash equivalents (967) (157) 48
Cash & cash equivalents at beginning
of period 3,359 3,311 3,311
-------- -------- --------
Cash & cash equivalents at end of
period 2,392 3,154 3,359
-------- -------- --------
Cash & cash equivalents comprise:
Cash at bank 2,473 3,154 3,380
Bank overdraft (81) - (21)
-------- -------- --------
Cash & cash equivalents at end of
period 2,392 3,154 3,359
-------- -------- --------
Titon Holdings Plc
1 Significant accounting policies
The consolidated interim financial statements of the Group for the six months
ended 31 March 2006 incorporates Titon Holdings Plc ("the Company") and its
subsidiaries (together referred to as "the Group").
The consolidated interim financial statements were authorised for release on 10
May 2006.
(a) Basis of preparation
Prior to 2005, the Group prepared its audited annual financial statements and
unaudited interim results under UK Generally Accepted Accounting Principles (UK
GAAP). From 1 October 2005, the Group is required under European Union
regulation 1606/2002 to prepare its Group consolidated annual financial
statements in accordance with International Financial Reporting Standards (IFRS)
as endorsed by the European Union and implemented in the UK.
These consolidated interim financial statements have been prepared on the basis
of IFRS that are effective or available for early adoption at the Group's first
IFRS annual reporting date, 30 September 2006. Based on IFRS, the Board of
Directors have made assumptions about the accounting policies expected to be
adopted when the first IFRS annual financial statements are prepared for the
year ended 30 September 2006.
These are the Group's first IFRS consolidated interim financial statements for
part of the period covered by the first IFRS annual financial statements. IFRS 1
First-time Adoption of International Financial Reporting Standards has been
applied that includes allowable exemptions. The consolidated interim financial
statements do not include all of the information required for full annual
financial statements and do not comply with all the disclosures in IAS 34
Interim Financial Reporting and are, therefore, not in full compliance with
IFRS.
An explanation of how the transition to IFRS has affected the reported financial
position and financial performance of the Group is provided in notes 7, 9 and
10.
The restated figures are based on current interpretations of IFRS which may be
subject to change as industry practice develops. This statement includes
reconciliations of equity and the income statement for comparative periods
reported under UK GAAP (previous GAAP) to those reported for those periods under
IFRS.
No adjustments have been made for any changes in estimates made at the time of
approval of the UK GAAP financial statements for the year ended 30 September
2005 or the interim statement for the period ended 31 March 2005 on which the
IFRS financial information is based, as required by IFRS 1.
The financial statements are presented in pounds sterling, rounded to the
nearest thousand.
The IFRS that will be effective or available for voluntary early adoption in the
financial statements for the period ended 30 September 2006 are still subject to
change and to the issue of additional interpretation(s) and therefore cannot be
determined with certainty. Accordingly, the accounting policies for that annual
period that are relevant to this interim financial information will be
determined only when the first IFRS financial statements are prepared at 30
September 2006.
The preparation of the consolidated interim financial statements in accordance
with IFRS resulted in changes to the accounting polices compared with the most
recent annual financial statements prepared under UK GAAP. The accounting
policies set out below have been applied consistently to all periods presented
in these consolidated interim financial statements. They have also been applied
in preparing an opening IFRS balance sheet at 1 October 2004 for the purposes of
transition to IFRS, as required by IFRS 1. The impact of the transition from UK
GAAP to IFRS is explained in notes 7, 9 and 10.
The Group results for the year ended 30 September 2005 and the balance sheet as
at that date are abridged (after adjustment for IFRS conversion) from the
Company's Annual Report and Financial Statements 2005 which have been delivered
to the Registrar of Companies. The auditors' report on those Financial
Statements was unqualified and did not contain a statement under Section 237(2)
or (3) of the Companies Act 1985.
These abridged results as restated for IFRS conversion, along with the results
for the six month periods ended 31 March 2005 and 31 March 2006, and the balance
sheets at those dates, have not been audited.
The interim statement does not constitute full accounts within the meaning of
Section 240 of the Companies Act 1985.
This statement is being sent to shareholders and will be available from the
Company's registered office at International House, Peartree Road, Stanway,
Colchester, Essex CO3 0JL.
(b) Basis of consolidation
Subsidiaries are entities controlled by the Company. Control exists when the
Company has the power, directly or indirectly to govern the financial and
operating policies of an entity so as to obtain benefits from its activities.
The Group's consolidated interim financial statements incorporate the financial
statements of the Company together with those of subsidiaries. Intragroup
balances, and any unrealised gains and losses or income and expenses arising
from intragroup transactions, are eliminated in preparing the interim financial
statements.
(c) Foreign currency
i Foreign currency transactions
Foreign currency transactions are translated at the rates ruling on the
transaction date or at the contracted rate if the transactions have been entered
into at a fixed rate. Foreign currency monetary assets and liabilities are
retranslated at the rates ruling at the balance sheet date, or if applicable at
the contracted rate. Any differences on exchange are taken to the income
statement.
All sales from the Group's UK business are invoiced in sterling. Purchases made
by the UK business from one overseas supplier are invoiced to the Group in the
local currency of that supplier. Any currency risk is mitigated by the Group
fixing an exchange rate with that supplier on a quarterly basis.
ii Financial statements of foreign operations
The financial statements of overseas subsidiaries are translated into sterling
at the rates of exchange ruling at the balance sheet date. The exchange
difference arising on the retranslation of opening net assets is taken directly
to the translation reserve.
The revenues and expenses of foreign operations are translated to pounds
sterling at rates approximating to the foreign exchange rates ruling at the
dates of the transactions.
iii Net investment in foreign operations
Exchange differences arising from the translation of the net investment in
foreign operations are taken to the translation reserve. They are recycled and
taken to the income statement upon disposal of the operation. The Company has
elected, in accordance with IFRS 1, that in respect of all foreign operations,
any differences that have arisen before 1 October 2004 have been set to zero.
(d) Property, plant and equipment
i Owned assets
Items of property, plant and equipment are stated at cost or deemed cost less
accumulated depreciation (see below) and impairment losses (see accounting
policy (i)).
ii Subsequent costs
The Group recognises in the carrying amount of an item of property, plant and
equipment the cost of replacing part of such an item when that cost is incurred,
if it is probable that the future economic benefits embodied within the item
will flow to the Group and the cost of the item can be measured reliably. All
other costs are recognised in the income statement as incurred.
iii Depreciation
Depreciation is provided to write off the cost, less estimated residual values,
of all fixed assets, except freehold land, over their expected useful lives. It
is calculated, on a straight line basis, at the following annual rates:
Freehold buildings - 2%
Improvements to leasehold property - 20%
Plant and equipment - 10% to 33%
Motor vehicles - 25%
The carrying values of tangible fixed assets are reviewed for impairment when
events or changes in circumstances indicate the carrying value may not be
recoverable.
(e) Intangible assets
i Goodwill
Prior to the adoption of FRS 10 all goodwill was set off against reserves as a
matter of accounting policy. If a subsidiary is subsequently sold, any goodwill
arising on acquisition that was written off directly to reserves is taken into
account in determining the profit or loss on sale.
The accounting treatment of business combinations that occurred prior to 1
October 2004 has not been restated in preparing the Group's opening IFRS balance
sheet at 1 October 2004.
ii Other intangible assets
Intangible assets other than goodwill that are acquired by the Group are stated
at cost less accumulated amortisation (see below) and impairment losses (see
accounting policy (i)).
iii Subsequent expenditure
Subsequent expenditure on capitalised intangible assets is capitalised only when
it increases the future economic benefits embodied in the specific asset to
which it relates. All other expenditure is expensed as incurred.
iv Amortisation
Amortisation is charged to the income statement on a straight-line basis over
the estimated useful lives of intangible assets from the date that they are
available for use.
(f) Stocks
Stocks are stated at the lower of cost and net realisable value. Cost is
calculated as follows:
Raw materials - cost of purchase on first in, first out basis.
Work in progress and finished goods - cost of raw materials and labour, together
with attributable overheads based on the normal level of activity.
Net realisable value is based on estimated selling price less further costs to
completion and disposal.
A charge is made to the income statement for the change in value of slow moving
finished goods stocks. This provision is reviewed at each balance sheet date.
(g) Trade and other receivables
Trade and other receivables are stated at their cost less the estimated
impairment (see accounting policy (i)).
(h) Cash and cash equivalents
Cash at bank comprises cash balances and treasury deposits.
The Group has no long term borrowings and any available cash surpluses are
placed on deposit.
(i) Impairment
The carrying amount of the Group's assets, other than deferred tax assets are
reviewed at each balance sheet date to determine whether there is any indication
of impairment. If any such indication exists, the assets recoverable amount is
estimated.
Other intangible assets were tested for impairment at 1 October 2004, the date
of transition to IFRS, and at 30 September 2005 and 31 March 2006.
i Reversals of impairment
In respect of other assets, an impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the assets carrying amount does not
exceed the carrying amount that would have been determined, net of depreciation
or amortisation, if no impairment loss had been recognised.
(j) Employee benefits
i Pension costs
The Group operates a defined contribution pension scheme. The assets of the
scheme are held separately from those of the Group in independently administered
funds. Contributions to the pension scheme are charged to the income statement
in the year in which they become payable.
ii Share-based payment transactions
The Company provides share option schemes for Directors and for other members of
staff.
The fair value of the employee services received in exchange for the grant of
options is recognised as an expense to the income statement. Fair value has been
determined by using IFRS accepted valuation methodologies (see note 4). The
amount expensed to the income statement over the vesting period is determined by
reference to the fair value of the options, excluding the impact of any
non-market vesting conditions. Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest. At each
balance sheet date the Group revises its estimates of the number of options
awards that are expected to vest. The impact of the revision of original
estimates, if any, is recognised in the income statement, with a corresponding
adjustment to equity, over the remaining vesting period. No adjustment is made
for failure to achieve market vesting conditions.
iii Accrued holiday pay
Provision is made at each balance sheet date for holidays accrued but not taken
at the salary of the relevant employee at that date.
(k) Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, and it is probable
that an outflow of economic benefits will be required to settle the obligation.
(l) Trade and other payables
Trade and other payables are stated at cost.
(m) Research and development expenditure
Expenditure on research is charged to the income statement in the period in
which it is incurred. Development costs are capitalised where they meet the
criteria set out in IAS 38 - Intangible Assets.
(n) Turnover
Turnover (revenue) represents the value of goods despatched to outside customers
at invoiced amounts, less value added tax, net of customer settlement discounts.
(o) Interest income
Interest income comprises interest receivable on funds invested net of interest
payable on bank overdrafts.
(p) Corporation and deferred tax
Tax on the profit or loss for the periods presented comprises current and
deferred tax.
i Corporation tax
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantially enacted at the balance sheet date, and
any adjustment to tax payable in respect of previous years.
ii Deferred taxation
Deferred tax is provided using the balance sheet liability method, providing for
temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not provided for: goodwill not
deductible for tax purposes, the initial recognition of assets or liabilities
that affect neither accounting nor taxable profit, and the differences relating
to investments in subsidiaries to the extent that they will probably not reverse
in the foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of asset and
liabilities, using tax rates enacted or substantively enacted at the balance
sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
(q) Leased assets
Operating leases represent leasing agreements that do not give rights
approximating to ownership. Annual rentals are charged to the income statement
on a straight-line basis over the lease term.
Titon Holdings Plc
2 Segment reporting
Segment information is presented in the interim financial statements in respect
of the Group's geographic segments, which reflect management and internal
reporting structures and also the Group's operating segments.
The Group's business is comprised of the following reportable geographic
segments:
United Kingdom
Rest of the World
Inter-segment pricing is determined on an arm's length basis. Segment results
include items directly attributable to a segment as well as those that can be
allocated on a reasonable basis.
Geographic segments
United Kingdom
Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
£'000 £'000 £'000
Revenue 7,180 7,162 14,592
Segment 1,079 1,329 2,601
result
Rest of the World
Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
£'000 £'000 £'000
Revenue 1,015 755 1,844
Segment 98 29 145
result
Consolidated
Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
£'000 £'000 £'000
Revenue 8,195 7,917 16,436
Segment result 1,177 1,358 2,746
Unallocated expenses (823) (876) (1,718)
------- -------- -------
Operating profit 354 482 1,028
Interest income 66 77 151
------- -------- -------
420 559 1,179
(118) (168) (328)
------- -------- -------
Profit for the period
attributable to the
members of Titon Holdings Plc 302 391 851
------- -------- -------
Titon Holdings Plc
3 Corporation Taxes
Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
£'000 £'000 £'000
Current tax
UK corporation tax 108 168 313
Adjustment in respect of prior years - - (28)
-------- -------- -------
Total UK corporation tax 108 168 285
Foreign tax 10 - 34
Deferred tax expense - - 9
-------- -------- -------
Taxation expense 118 168 328
-------- -------- -------
Tax for the interim period is charged at 28.0% (Six months to 31 March 2005:
30.0%) representing the best estimate of the average annual effective income tax
rate for the full financial year.
Titon Holdings Plc
4 Employee benefits
Employee benefits include:
Fair value of share option awards
In accordance with IFRS 2, the fair value of outstanding equity settled share
based option awards to employees, which have been granted after 7 November 2002,
but not vested as at 1 January 2005, are recognised as an expense to the income
statement.
The Black Scholes option pricing model has been used for calculating the fair
value of the Company's share options. The Directors believe that this model is
the most suitable for calculating the fair value of the equity based share
options offered to employees under the Company's share schemes. The calculated
fair values of the share option awards are adjusted to reflect actual and
expected vesting levels.
The amount charged to the income statement in respect of share based payments is
as follows:
Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
£'000 £'000 £'000
Share based payment expense 1 - 1
-------- -------- --------
Two issues of share options have been granted since 7 November 2002 and are
recognised for valuation under IFRS 2.
Share options granted
Date Granted 21.05.2004 18.05.2005
Number of Shares 36,150 26,300
Subscription price (exercise price per share -
pence) 91.0p 99.0p
Exercisable from 21.05.2007 18.05.2008
Exercisable until 21.05.2014 18.05.2015
Expected dividend yield (%) 6.50 6.50
Risk free rate of return (%) 5.10 4.75
Share price volatility (%) 29.0 29.0
Fair value per share (pence) 15.3p 15.5p
Assumptions used in the option pricing model.
a) The vesting period for a share option is expected to be 6 years from the
date of grant of the share option.
b) Each issue of share option awards is re-assessed, at each balance sheet
date, to calculate the total fair value of share options. The fair value of
share options is charged to the income statement over the 6 year expected
vesting period.
c) Share price volatility is calculated by looking back six years from the
date of grant for each share option, as it is expected that the historic
volatility in the share price is the best measure of likely movement in the
share price in the future and therefore during the expected average vesting
period of six years from the date of grant, until the date of exercise.
d) Volatility has been calculated using the historic weekly movement,
rather than daily movement, in the Company's share price as this is, in the
opinion of the Directors, the most reasonable measure of the share price.
e) Dividend yields are expected to be similar to those in recent years.
f) A risk free rate of return has been used based on the Bank of England
zero coupon rates.
Titon Holdings Plc
5 Equity
Called up Share Capital Trans- Share Retained Total
share premium redemp- lation scheme earnings Equity
capital reserve reserve reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 October
2004 1,053 841 56 - - 9,086 11,036
Profit for the
period - - - - - 391 391
Dividends paid - - - - - (505) (505)
--------------- -------- ------- ------ ------ ------ ------ -------
At 31 March
2005 1,053 841 56 - - 8,972 10,922
Share-based
payment
expense - - - - 1 - 1
Translation
differences on
overseas
operations - - - (3) - - (3)
Profit for
period - - - - - 460 460
Dividends paid - - - - - (242) (242)
--------------- ------- ------ ------ ------ ------ ----- ------
At 30
September 2005 1,053 841 56 (3) 1 9,190 11,138
Share options
exercised 2 22 - - - - 24
Share-based
payment
expense - - - - 1 - 1
Translation
differences on
overseas
operations - - - 12 - - 12
Profit for
period - - - - - 302 302
Dividends paid - - - - - (506) (506)
--------------- ------- ------ ------ ------ ------ ------ ------
At 31 March
2006 1,055 863 56 9 2 8,986 10,971
--------------- ------- ------ ------ ------ ------ ------ -------
Titon Holdings Plc
6 Dividends and earnings per share
Dividends
An interim dividend in respect of the six months ended 31 March 2006 of 2.3p per
share, amounting to a total dividend of £243,000, was approved by the Directors
of Titon Holdings Plc on 10 May 2006. These consolidated interim statements do
not reflect the dividend payable.
The interim dividend will be payable on 3 July 2006 to the shareholders on the
register on 9 June 2006. The ex dividend date is 7 June 2006.
The following dividends have been recognised and paid by the Company:
Six Six Months Six Months Year to
to 31.3.06 to 31.3.05 30.9.05
Date Pence
paid per share £'000 £'000 £'000
Final 18.2.05 4.8 - 505 505
Interim 01.7.05 2.3 - - 242
Final 24.2.06 4.8 506 - -
-------- -------- -------
506 505 747
-------- -------- -------
Dividends and earnings per share (continued)
Earnings per share
Basic earnings per share has been calculated by dividing the Profit attributable
to shareholders by the weighted average number of ordinary shares in issue
during the period, being 10,552,500 (Six months ended 31 March 2005: 10,528,800;
Year ended 30 September 2005: 10,528,800).
Diluted earnings per share has been calculated by dividing the Profit
attributable to shareholders by the weighted average number of ordinary shares
and potential dilutive ordinary shares during the period, being 10,586,129 (Six
months ended 31 March 2005: 10,574,796; Year ended 30 September 2005:
10,576,852). All dilutive ordinary shares relate to share options.
Titon Holdings Plc
7 Reconciliation of Profit
Six Months Year to
to 31.3.05 30.9.05
Six Note UK GAAP Effect of IFRS UK GAAP Effect of IFRS
Transition Transition
to IFRS to IFRS
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 7,917 - 7,917 16,436 - 16,436
Operating
profit (a) 482 - 482 1,029 (1) 1,028
Interest
income 77 - 77 151 - 151
------- ------- ------- ------- ------- -------
Profit
before 559 - - 559 1,180 (1) 1,179
taxation
Taxation
expense (168) - (168) (328) - (328)
------- ------- ------- ------- ------- -------
Profit for
the
period
attributable
to the
members 391 - 391 852 (1) 851
of Titon ------- ------- ------- ------- ------- -------
Holdings Plc
(a) Share based payments
The effect of accounting for equity settled share based payment transactions at
fair values is to reduce operating profit by £1,000 for the year ended 30
September 2005.
8 Property, plant and equipment
Acquisition and disposals
During the six months ended 31 March 2006, the Group acquired assets with a cost
of £1,142,000 (six months to 31 March 2005: £151,000; Year ended 30 September
2005: £569,000). Assets with a net book value of £11,000 were disposed of during
the six months ended 31 March 2006 (six months ended 31 March 2005: £3,000; Year
ended 30 September 2005: £13,000).
Titon Holdings Plc
9 Reconciliation of Equity
At 1.10.04
UK GAAP Effect of IFRS
Note Transition
To IFRS
£'000 £'000 £'000
Assets
Intangible assets (a) - 11 11
Property, plant and (a) 4,291 (11) 4280
equipment
-------- -------- --------
Total non-current assets 4,291 - 4,291
Stocks 2,580 - 2,580
Trade and other receivables 3,201 - 3,201
Cash at bank and in hand 4,017 - 4,017
-------- -------- --------
Total current assets 9,798 - 9,798
-------- -------- --------
Total Assets 14,089 - 14,089
-------- -------- --------
Liabilities
Deferred taxation liability 95 - 95
-------- -------- --------
Total non-current liabilities 95 - 95
Trade and other payables (d) 2,660 (505) 2,155
Bank overdraft 706 - 706
Corporation tax liability 97 - 97
Employee benefits - - -
-------- -------- --------
Total current liabilities 3,463 (505) 2,958
-------- -------- --------
Total Liabilities 3,558 (505) 3,053
-------- -------- --------
Equity
Called up share capital 1,053 - 1,053
Share premium 841 - 841
Capital redemption reserve 56 - 56
Translation reserve - - -
Share schemes reserve ( c) - - -
Retained earnings 8,581 505 9,086
-------- -------- --------
Total Equity 10,531 505 11,036
-------- -------- --------
-------- -------- --------
Total Liabilities and Equity 14,089 - 14,089
-------- -------- --------
At 31.3.05
UK GAAP Effect of IFRS
Note Transition
To IFRS
£'000 £'000 £'000
Assets
Intangible assets (a) - 8 8
Property, plant and (a) 4,142 (8) 4,134
equipment
------- -------- --------
Total non-current assets 4,142 - 4,142
Stocks 2,563 - 2,563
Trade and other receivables 3,468 - 3,468
Cash at bank and in hand 3,154 - 3,154
------- -------- --------
Total current assets 9,185 - 9,185
------- -------- --------
Total Assets 13,327 - 13,327
------- -------- --------
Liabilities
Deferred taxation liability 95 - 95
------- -------- --------
Total non-current liabilities 95 - 95
Trade and other payables (d) 2,355 (242) 2,113
Bank overdraft - - -
Corporation tax liability 182 - 182
Employee benefits 15 - 15
------- -------- --------
Total current liabilities 2,552 (242) 2,310
------- -------- --------
Total Liabilities 2,647 (242) 2,405
------- -------- --------
Equity
Called up share capital 1,053 - 1,053
Share premium 841 - 841
Capital redemption reserve 56 - 56
Translation reserve - - -
Share schemes reserve (c) - - -
Retained earnings 8,730 242 8,972
------- -------- --------
Total Equity 10,680 242 10,922
------- -------- --------
------- -------- --------
Total Liabilities and Equity 13,327 - 13,327
------- -------- --------
At 30.9.05
UK GAAP Effect of IFRS
Note Transition
To IFRS
£'000 £'000 £'000
Assets
Intangible assets (a) - 6 6
Property, plant and (a) 4,248 (6) 4,242
equipment
------- -------- --------
Total non-current assets 4,248 - 4,248
Stocks 2,511 - 2,511
Trade and other receivables 3,695 - 3,695
Cash at bank and in hand 3,380 - 3,380
------- -------- --------
Total current assets 9,586 - 9,586
------- -------- --------
Total Assets 13,834 - 13,834
------- -------- --------
Liabilities
Deferred taxation liability 104 - 104
------- -------- --------
Total non-current liabilities 104 104
Trade and other payables (d) 2,911 (505) 2,406
Bank overdraft 21 - 21
Corporation tax liability 144 - 144
Employee benefits 21 - 21
------- -------- --------
Total current liabilities 3,097 (505) 2,592
------- -------- --------
Total Liabilities 3,201 (505) 2,696
------- -------- --------
Equity
Called up share capital 1,053 - 1,053
Share premium 841 - 841
Capital redemption reserve 56 - 56
Translation reserve (b) - (3) (3)
Share schemes reserve ( c) 1 1
Retained earnings 8,683 507 9,190
------- -------- --------
Total Equity 10,633 505 11,138
------- -------- --------
------- -------- --------
Total Liabilities and Equity 13,834 - 13,834
------- -------- --------
Reconciliation of Equity (continued)
Notes to the reconciliation of Equity
(a) Intangible assets
Computer software previously included within Property Plant and Equipment under
UK GAAP is reclassified under IFRS as intangible assets. On transition to IFRS
at 1 October 2004 assets with a net book value of £11,000 have been reclassified
as intangible assets.
(b) Foreign exchange translation of overseas operations
The effect at 30 September 2005 is to increase retained earnings and decrease
the translation reserve by £3,000.
(c) Share based payments
The effect of IFRS accounting for equity settled share based payment
transactions at fair values is to recognise a cost of £1,000 for share option
awards for the period ended 30 September 2005. Accordingly, the share scheme
reserve at 30 September 2005 is increased by £1,000 and retained earnings are
decreased by £1,000.
(d) Dividends
Under UK GAAP dividends were provided for when proposed even if this was after
the balance sheet date. Under IAS 10 Events after the Balance Sheet Date this is
not allowed.
Accordingly, Trade and other payables at:
• 30 September 2004 have been reduced by £505,000, for the proposed final
dividend for the period ending 30 September 2004. The dividend was paid from
reserves in the period ended 31 March 2005.
• 31 March 2005 have been reduced by £242,000, for the proposed interim
dividend for the period ending 31 March 2005. The dividend was paid from
reserves in the period ended 30 September 2005.
• 30 September 2005 have been reduced by £505,000, for the proposed final
dividend for the period ending 30 September 2005. The dividend was paid from
reserves in the period ended 31 March 2006.
Titon Holdings Plc
10 Explanation of transition to IFRS
As stated in note 1(a) these are the Group's first consolidated interim
financial statements for part of the period covered by the first IFRS annual
consolidated financial statements prepared in accordance with IFRS.
The accounting policies in note 1 have been applied in preparing the
consolidated interim financial statements for the six months ended 31 March
2006, the comparative information for the six months ended 31 March 2005, the
financial statements for the year ended 30 September 2005 and the preparation of
an opening IFRS balance sheet at 1 October 2004 (the Group's date of
transition).
In preparing the opening balance sheet, comparative information for the six
months ended 31 March 2005 and financial statements for the year ended 30
September 2005, the Group has adjusted amounts previously reported in financial
statements prepared in accordance with UK GAAP.
IFRS 1 - First-time Adoption of International Financial Reporting Standards
permits or requires certain exemptions from the general principle of
retrospective application. Where permitted, the Group has utilised exemptions
when retrospective application would result in little or no added usefulness in
terms of the information presented and where retrospective application would
require the use of hindsight, which is specifically precluded by IFRS 1.
The following summarises the Group's application of the IFRS 1 exemptions:
Cumulative translation differences
IAS 21 - The Effects of Changes in Foreign Exchange Rates requires the
classification of translation differences arising in connection with foreign
operations to be classified as a separate component of equity. IFRS 1 exempts a
first-time adopter from the retrospective application of IAS 21. The Group has
applied this exemption, with the effect that cumulative translation differences
for all foreign operations as at the date of transition are deemed to be nil.
Share based payments
The Group has applied IFRS 2 Share-based Payments to share option awards granted
after 7 November 2002 not accounted for under UK GAAP.
There is no material effect of accounting for equity settled share based payment
transactions at fair values to retained earnings at 1 October 2004.
This information is provided by RNS
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