Interim Results to 31.03.08
Titon Holdings PLC
08 May 2008
Titon Holdings Plc
Interim Results for the six months ended 31 March 2008
Business Review
Financial performance
Profit before taxation for the six months was 65.6% lower than the same period
last year at £151,000 (2007: £439,000) on turnover 2.0% lower at £8,500,000
(2007: £8,670,000). We have maintained our sales levels in the UK, whilst our
export sales for the period have fallen by 17% to £891,000 (2007: £1,075,000).
Earnings per share for the period were 64.3% lower at 1.06p (2007: 2.97p) and
the Directors have declared an interim dividend of 1.0p per share (2007: 2.3p
per share).
Tight control over Working Capital along with reduced levels of capital
expenditure have helped cash balances to increase by £256,000 over the six-month
period to stand at £1,921,000 (2007: £1,671,000).
Trading commentary
As I reported in the last Annual Report and Accounts, trading during the second
half of the 2006/2007 financial year was very difficult and the Group only just
returned a profit over that six month period. I informed shareholders at the
time that a programme of measures had been initiated that was designed to
restore profitability during the current year. I am pleased to report that the
result of these measures has been a modest profit for the first six months of
this year. Some of the profit improvement measures that are being implemented
will be phased in over the year as contractual commitments end and will not have
had a full impact in the first half-year. We will continue to make every effort
to improve the Group's profitability.
One of the results of our cost reduction programme has been a 5% fall in our
payroll costs in the period when compared to the 2nd half of 2006/7. Our
employees have not been given a pay increase this year and I would like to take
this opportunity to thank them all for their contribution in these difficult
circumstances. Overall employee numbers were 239 at the end of March 2008
compared to 256 at 30 September 2007.
Escalating raw material price increases have been a great issue for most
manufacturers although, during this first half-year, we have been able to pass
on some of this increased cost to our customers. We have, however, continued to
see costs increase - not least as a result of the Euro strengthening by a
further 12% in the six months against Sterling.
Towards the end of the period, confidence within the UK housing market has been
adversely affected by the international financial credit crisis and the number
of new housing starts has significantly reduced. It is apparent that the effects
of this are not limited to the UK, with most European markets experiencing
similar declines. The full impact of this change in market confidence is as yet
unknown, but will almost certainly require a further adjustment to our cost base
in the second half-year.
Prospects
New building processes are being introduced as construction of 'tighter' homes
becomes a requirement for the Government's 'Sustainable Homes' initiative. Titon
has already adjusted to the requirement for improved ventilation systems for
domestic use and is able to supply highly efficient units that provide excellent
SAP (Standard Assessment Procedure) ratings. Additional products to be
introduced later in the summer will further improve upon the performance of
those currently available. Integrated within these systems our natural
ventilation products will ensure both 'energy neutral' and 'fail-safe' options
to help minimise the impact on our national energy resources; a factor which we
believe to be essential as we progress.
As previously mentioned, most sectors of our markets remain under pressure and
there is no doubt that the remainder of this year will be challenging. We will
continue with our longer-term investment plans in the UK powered ventilation
market whilst re-organising our traditional UK hardware business to reflect the
current market conditions
Principal risk and uncertainties
The key financial and non-financial risks faced by the Group are disclosed in
the Group's Annual Report and Accounts for the year ended 30 September 2007
within the Directors' Report (page 7) available at www.titonholdings.com. The
Board considers that these remain a current reflection of the risks and
uncertainties facing the business.
Statement of Directors' responsibilities
The Directors confirm that this condensed set of consolidated financial
statements has been prepared in accordance with IAS 34 as adopted by the
European Union, and that the interim management report herein includes a fair
review of the information required by DTR 4.2.7 and DTR 4.2.8.
The Directors of Titon Holdings Plc are listed in the Titon Holdings Plc Annual
Report and Accounts 2007. A list of current directors is maintained on the
Group's website: www.titonholdings.com.
On behalf of the Board
J N Anderson D A Ruffell
Chairman Chief Executive
8 May 2008
Titon Holdings Plc
Consolidated Interim Income Statement
for the six months ended 31 March 2008
Six Months Six Months Year to
to 31.3.08 to 31.3.07 30.9.07
Note £'000 £'000 £'000
Revenue 2 8,500 8,670 17,285
Cost of sales 6,640 6,641 13,482
--------- --------- ---------
Gross Profit 1,860 2,029 3,803
Distribution costs 310 292 618
Administration costs 1,446 1,349 2,828
--------- --------- ---------
1,756 1,641 3,446
Operating profit 104 388 357
Finance income 47 51 102
--------- --------- ---------
Profit before taxation 151 439 459
Tax expense 3 (39) (126) (15)
--------------------------------------- --------- --------- ---------
Profit for the period attributable to
the equity holders of the parent 7 112 313 444
--------------------------------------- --------- --------- ---------
Earnings per share - basic 5 1.06p 2.97p 4.21p
- diluted 5 1.06p 2.97p 4.21p
Titon Holdings Plc
Consolidated Interim Statement of Recognised Income and Expense
for the six months ended 31 March 2008
Six Months Six Months Year to
to 31.3.08 to 31.3.07 30.9.07
Note £'000 £'000 £'000
Profit for the period attributable to
the equity holders of the parent 7 112 313 444
Exchange difference on re-translation
of net assets of overseas subsidiary
undertakings 7 4 16
--------------------------------------- --------- --------- ---------
Total recognised income and expense
for the period attributable to equity
holders of the parent 119 317 460
--------------------------------------- --------- --------- ---------
Titon Holdings Plc
Consolidated Interim Balance Sheet
at 31 March 2008
31.3.08 31.3.07 30.9.07
Note £'000 £'000 £'000
Assets
Property, plant and equipment 6 4,481 4,854 4,662
Intangible assets 39 63 58
-------- -------- --------
Total non-current assets 4,520 4,917 4,720
Inventories 2,924 3,344 2,983
Trade and other receivables 4,027 3,785 3,785
Corporation tax 17 - 31
Cash at bank 1,958 1,674 1,678
-------- -------- --------
Total current assets 8,926 8,803 8,477
------------------------------------------- -------- -------- --------
Total Assets 13,446 13,720 13,197
------------------------------------------- -------- -------- --------
Liabilities
Deferred tax 170 185 170
-------- -------- --------
Total non-current liabilities 170 185 170
Trade and other payables 2,493 2,491 2,190
Bank overdraft 37 3 13
Corporation tax - 118 -
-------- -------- --------
Total current liabilities 2,530 2,612 2,203
----------------------------------------- -------- -------- --------
Total Liabilities 2,700 2,797 2,373
----------------------------------------- -------- -------- --------
Equity
Share capital 1,056 1,056 1,056
Share premium reserve 865 865 865
Capital redemption reserve 56 56 56
Translation reserve 40 21 33
Share schemes reserve 3 3 3
Retained earnings 8,726 8,922 8,811
----------------------------------------- -------- -------- --------
Total Equity attributable to the equity
holders of the parent 7 10,746 10,923 10,824
----------------------------------------- -------- -------- --------
----------------------------------------- -------- -------- --------
Total Liabilities and Equity 13,446 13,720 13,197
----------------------------------------- -------- -------- --------
Titon Holdings Plc
Consolidated Interim Cash Flow Statement
for the six months ended 31 March 2008
Six Months Six Months Year to
to 31.3.08 to 31.3.07 30.9.07
Note £'000 £'000 £'000
Cash generated from operating activities
Operating profit 104 388 357
Depreciation of property, plant &
equipment 333 339 675
Amortisation on intangible assets 12 17 35
Decrease / (increase) in inventories 64 (391) (33)
Increase in receivables (240) (160) (149)
Increase / (decrease) in payables and
other current liabilities 303 129 (168)
Profit on sale of plant & equipment (6) - (31)
Share based payment - equity settled - 1 1
--------------------------------------- -------- -------- -------
Cash generated from operations 570 323 687
--------------------------------------- -------- -------- -------
Income taxes paid (25) (68) (121)
--------------------------------------- -------- -------- -------
Net cash generated from operating
activities 545 255 566
--------------------------------------- -------- -------- -------
Cash flows from investing activities
Purchase of plant & equipment 6 (153) (195) (363)
Purchase of intangible assets - (13) (26)
Proceeds from sale of plant & equipment 14 11 66
Interest received 47 51 102
--------------------------------------- -------- -------- -------
Net cash used in investing activities (92) (146) (221)
--------------------------------------- -------- -------- -------
Cash flows from financing activities
Dividends paid to equity shareholders 4 (197) (507) (749)
--------------------------------------- -------- -------- -------
Net cash used in financing activities (197) (507) (749)
--------------------------------------- -------- -------- -------
Net increase / (decrease) in cash &
cash equivalents 256 (398) (404)
Cash & cash equivalents at beginning
of period 1,665 2,069 2,069
--------------------------------------- -------- -------- -------
Cash & cash equivalents at end of
period 1,921 1,671 1,665
--------------------------------------- -------- -------- -------
Cash & cash equivalents comprise:
Cash at bank 1,958 1,674 1,678
Bank overdraft (37) (3) (13)
--------------------------------------- -------- -------- -------
Cash & cash equivalents at end of
period 1,921 1,671 1,665
--------------------------------------- -------- -------- -------
Titon Holdings Plc
Notes to the Condensed Consolidated Interim Statements
at 31 March 2008
1. Basis of preparation
These condensed and consolidated interim financial statements of the Group for
the six months ended 31 March 2008 incorporate Titon Holdings Plc ("the
Company") and its subsidiaries (together referred to as "the Group").
The consolidated interim financial statements have been prepared using
accounting policies set out in the Annual Report and Accounts 2007 and in
accordance with IAS 34, 'Interim financial reporting', as adopted by the
European Union and were authorised by the Board of Directors for release on
8 May 2008.
The accounting standard IFRS 7, Financial Instruments: Disclosures is mandatory
for accounting periods beginning on or after 1 January 2007. As this interim
statement contains only condensed financial statements, full IFRS 7 disclosures
are not required at this stage. The full disclosures, including any sensitivity
analysis to market risk will be given in the Group's Annual Report.
The consolidated interim financial statements for the six months ended 31 March
2008 and 31 March 2007 have not been audited or reviewed. The results for the
year end 30 September 2007 and the balance sheet as at that date are abridged
from the Group's Annual Report and Financial Statements 2007, prepared under
IFRS, which have been delivered to the Registrar of Companies. The auditors'
report on those financial statements was unqualified and did not contain an
emphasis of matter paragraph and did not contain a statement under Section
237(2) or (3) of the Companies Act 1985. 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.
2. Segment reporting
For management and internal reporting purposes, the Group's operations are
currently analysed according to geographical regions. This is the basis on which
the Group reports its primary segment information.
The Group's business is comprised of the following reportable geographic
segments:
United Kingdom
Rest of the World
Segment information about the geographic regions is presented below.
United Kingdom Rest of the World
Six Months Six Months Year to Six Months Six Months Year to
to 31.3.08 to 31.3.07 30.9.07 to 31.3.08 to 31.3.07 30.9.07
£'000 £'000 £'000 £'000 £'000 £'000
External 7,609 7,595 15,275 891 1,075 2,010
Intercompany - - - 135 185 297
------------- ------- ------- ------ ------- ------- ------
Total Revenue 7,609 7,595 15,275 1,026 1,260 2,307
------------- ------- ------- ------ ------- ------- ------
Segment result 1,059 1,132 2,173 61 111 138
Consolidated
Six Months Six Months Year to
to 31.3.08 to 31.3.07 30.9.07
£'000 £'000 £'000
External 8,500 8,670 17,285
Intercompany 135 185 297
------------- ------- ------- ------
Total Revenue 8,635 8,855 17,582
------------- ------- ------- ------
Segment result 1,120 1,243 2,311
Unallocated expenses (1,016) (855) (1,954)
------- ------- ------
Operating profit 104 388 357
Finance income 47 51 102
------- ------- ------
Profit before tax 151 439 459
Tax expense (39) (126) (15)
--------------------------------------- ------- ------- ------
Profit for the period attributable to
the equity holders of the parent 112 313 444
--------------------------------------- ------- ------- ------
Balance Sheet 31.3.08 31.3.07 30.9.07
£'000 £'000 £'000
Assets - Segment total assets
United Kingdom 13,210 13,400 12,980
Rest of World 236 320 217
------------------------------------------ ------- -------- -------
Consolidated 13,446 13,720 13,197
------------------------------------------ ------- -------- -------
Liabilities - Segment total liabilities
United Kingdom 2,664 2,769 2,351
Rest of World 36 28 22
----------------------------------------- ------- -------- -------
Consolidated 2,700 2,797 2,373
----------------------------------------- ------- -------- -------
3. Tax expense
Six Months Six Months Year to
to 31.3.08 to 31.3.07 30.9.07
£'000 £'000 £'000
UK corporation tax 29 105 34
Adjustment in respect of over provision
in prior years 4 - (28)
--------------------------------------- ----------- -------- -------
Total UK corporation tax 33 105 6
--------------------------------------- ----------- -------- -------
Overseas tax 6 6 9
Adjustment in respect of over provision - - -
in prior years
--------------------------------------- ----------- -------- -------
Total overseas tax 6 6 9
--------------------------------------- ----------- -------- -------
Total current tax 39 111 15
--------------------------------------- ----------- -------- -------
Deferred tax - 15 -
----------- -------- -------
Total tax 39 126 15
----------- -------- -------
Tax for the interim period is charged at 23.2% (six months to 31 March 2007:
28.7%) representing the best estimate of the average annual effective income tax
rate for the full financial year.
4. Dividends
An interim dividend in respect of the six months ended 31 March 2008 of 1.0p per
share, amounting to a total dividend of £106,000 was approved by the Directors
of Titon Holdings Plc on 7 May 2008. These consolidated interim statements do
not reflect the dividend payable.
The interim dividend will be payable on 26 June 2008 to the shareholders on the
register on 30 May 2008. The ex dividend date is 28 May 2008.
The following dividends have been recognised and paid by the Company:
Six Months Six Months Year to
to 31.3.08 to 31.3.07 30.9.07
Date Pence
paid per share £'000 £'000 £'000
Final in respect of the
year end 30.09.06 21.2.07 4.8 - 507 507
Interim in respect of
the year end 30.09.07 30.6.07 2.3 - - 242
Final in respect of the
year end 30.09.07 18.2.08 2.3 197 - -
-------- -------- -------
197 507 749
-------- -------- -------
5. Earnings per ordinary 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 10,555,650 (six months ended 31 March 2007: 10,555,650;
year ended 30 September 2007: 10,555,650).
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 10,555,650 (six
months ended 31 March 2007: 10,555,650; year ended 30 September 2007:
10,555,650).
6. Property, plant and equipment
Acquisition and disposals
During the six months ended 31 March 2008, the Group acquired assets with a cost
of £153,000 (six months to 31 March 2007: £195,000; year ended 30 September
2007: £363,000). Assets with a net book value of £8,000 were disposed of during
the six months ended 31 March 2007 (six months ended 31 March 2006: £11,000;
year ended 30 September 2007: £35,000).
7. Changes in Equity
Share Share Capital Translation Share Retained Total
capital premium redemption reserve schemes earnings Equity
reserve reserve reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 01.10.2006 1,056 865 56 17 2 9,116 11,112
Profit for period - - - - - 313 313
Dividends paid - - - - - (507) (507)
Share-based
payment expense - - - - 1 - 1
Translation
differences on
overseas operations - - - 4 - - 4
--------------------------------------------------------------------------------
At 31.03 2007 1,056 865 56 21 3 8,922 10,923
Profit for period - - - - - 131 131
Dividends paid - - - - - (242) (242)
Translation
differences on
overseas operations - - - 12 - - 12
--------------------------------------------------------------------------------
At 30.09.2007 1,056 865 56 33 3 8,811 10,824
Profit for period - - - - - 112 112
Dividends paid - - - - - (197) (197)
Translation
differences on
overseas operations - - - 7 - - 7
--------------------------------------------------------------------------------
At 31.03.2008 1,056 865 56 40 3 8,726 10,746
--------------------------------------------------------------------------------
8. Related party transactions
There have been no additional significant or unusual related party transactions
to those disclosed in the Group's Annual Report for 30 September 2007.
9. Subsidiaries
Liquidation of subsidiary
Titon BV a subsidiary company formerly incorporated in the Netherlands was
liquidated on 5 October 2007. A final distribution was made to the parent
company Titon Holdings Plc. Foreign exchange differences which had arisen from
the translation of the financial statements of Titon BV were recycled and taken
to the income statement.
Titon Holdings Plc
Directors and Advisors
DIRECTORS
Executive
J N Anderson (Chairman)
D A Ruffell (Chief Executive)
T N Anderson
R Brighton
N C Howlett
C S Jarvis
C J Martin
Non-Executive
P W E Fitt (Vice-Chairman)
P E O'Sullivan
K A Ritchie
SECRETARY AND REGISTERED OFFICE
D A Ruffell
International House
Peartree Road
Stanway
Colchester
Essex
CO3 0JL
COMPANY REGISTRATION NUMBER
1604952 (Registered in England & Wales)
WEBSITE
www.titonholdings.com
AUDITORS REGISTRARS AND TRANSFER OFFICE
BDO Stoy Hayward LLP Capita Registrars Ltd
55 Baker Street Northern House
London Woodsome Park
W1U 7EU Fenay Bridge
Huddersfield
HD8 0LA
BROKERS
Evolution Securities Limited
100 Wood Street
London
EC2V 7AN
BANKERS
Barclays Bank Plc
Witham Business Centre
Witham, Essex
CM8 2AT
SOLICITORS
Macfarlanes
10 Norwich Street
London
EC4A 1BD
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