Preliminary Results 30.9.2003

Titon Holdings PLC 11 December 2003 Titon Holdings Plc Preliminary Results for the year ended 30 September 2003 CHAIRMAN'S STATEMENT FINANCIAL RESULTS Profit before taxation for the year was 1.9% lower than last year at £1.52 million (2002: £1.55 million), on turnover 6.7% higher at £16.31 million (2002: £15.28 million). Interest income has reduced, and at the operating level, profits were just 1.4% down at £1.37 million (2002: £1.39 million). Earnings per share have increased by 3.5% to 10.19p (2002: 9.85p). The Directors are proposing a final dividend of 4.8p per ordinary share (2002: 4.8p), making a total of 7.1p for the year (2002: 7.1p). The dividend will be payable on 20 February 2004 to shareholders on the register on 23 January 2004. The ex-dividend date will be 21 January 2004. In January 2003 the Company repurchased and cancelled 560,000 of its shares, representing some 5.1% of total shares in issue at the time. These shares were repurchased at an average price of £1.00 each. Following the repurchase of shares and the investment in new premises, net cash balances at the year-end have reduced to stand at £3.67 million (2002: £4.87 million). SALES COMMENTARY Despite strong profit growth reported by some UK house builders over the past year, market conditions for many component suppliers remains extremely competitive. This is particularly the case in the window industry, where there is significant overcapacity amongst both timber manufacturers and PVCu fabricators. The result of this for Titon is that the growth in turnover that we have achieved has been largely offset by margin reduction, due to the difficulty of passing on cost increases to our customers. The UK market for our wide range of background ventilation products is still very much driven by Regulation although more often today by best practice and by consumer awareness. As mentioned in my previous reports to shareholders, the Regulation that underpins our business is presently under review, with important drafts to be announced in the spring of 2004. We have invested a significant amount of resource over the past year in monitoring this regulatory evolvement as well as in the development and testing of new products in readiness for any possible change. We are currently launching our new 'Omniglaze' glazed-in ventilator and over the coming months will introduce other new products to the market, including for the first time, extract power units. Whilst ventilation products are the most important part of our product portfolio, we have seen encouraging sales growth in other important sectors of our UK market. Sales of most of our ranges of window handle and stay product ranges have seen advances this year, even to the extent of presenting us with occasional supply problems in this area of operation. The Company distributes a wide range of window hinge and locking systems that it sources both from UK and from Western European manufacturers. Sales of these products have also improved during the year, and we are greatly encouraged by the contribution being made by our recently formed Commercial Department, which has greatly raised our profile within the aluminium door and window market. It is particularly pleasing to report a significant and broadly based increase in our export sales. The market in the USA has shown some improvement and we are demonstrating our commitment to this by relocating one of the Directors of our main operating subsidiary to our Indiana office for an extended period. MANUFACTURING The refurbishment of the 23,000 sq ft recently purchased unit adjacent to our existing factory complex, as reported at the half year, is almost complete. The total cost of this building will be approximately £1 million and will enable us to terminate at least one existing lease. The building will be used to house our Finished Goods Warehouse and Despatch Department and will be operational early in the New Year. The difficulties of manufacturing in the UK have been widely acknowledged and Titon is not immune to these pressures. Over the past decade we have invested considerably in high quality plant, tooling and premises as well as in the automation of assembly processes. Despite this, we find it increasingly difficult to maintain a satisfactory margin, which is not being helped by greatly increased costs in areas such as insurance premiums, National Insurance Contributions and Health and Safety compliance. Whilst we will endeavour to control these costs where possible, we are in many ways reliant upon those whose decisions and influences are making the majority of UK manufacturing less competitive. PERSONNEL The Company was greatly saddened by the death of a longstanding Director, Mr Ron Cheek during the summer. Ron had been with Titon from the early years and ended his career as Managing Director of our Sales and Marketing Division. Although semi-retired due to poor health for the past two years, he was still able to contribute until his death. Ron was a great friend, work colleague and industry specialist and he will be greatly missed by all. I am pleased to report that Mr Tyson Anderson will be joining the Board of Titon Holdings Plc effective from 1 January 2004. Tyson has had 14 years service within the Group and has been Marketing Director of the main operating subsidiary, Titon Hardware Limited, since 1999. The entire Titon team provides the basis for the underlying strength of the Company and, on behalf of the Board, I should like to thank them for their contribution during what has been a demanding twelve months. PROSPECTS There is still uncertainty in the UK Regulatory area, but Titon will continue to investigate and develop further innovative ideas in ventilation products to meet any proposals emanating from revised Building Regulations. Our new venture into powered ventilation products follows considerable research and we are confident that the niche products chosen to compliment our current background ventilation ranges will be successful. It has been most encouraging to see growth in sectors of our business other than UK ventilation and we anticipate that this will continue. We will explore all possibilities to remain competitive and are confident that, if market conditions remain stable, opportunities to improve the Company's position can be developed. John Anderson Chairman 10 December 2003 CONSOLIDATED PROFIT AND LOSS ACCOUNT Preliminary Results for the year ended 30 September 2003 2003 2002 £'000 £'000 Turnover 16,310 15,283 Cost of sales 11,889 10,979 --------------- --------------- Gross profit 4,421 4,304 Distribution costs 669 681 Administrative expenses 2,383 2,237 --------------- --------------- 3,052 2,918 --------------- --------------- Operating profit 1,369 1,386 Interest receivable 153 171 Interest payable and similar charges -3 -4 --------------- --------------- Profit on ordinary activities before taxation 1,519 1,553 Taxation on profit on ordinary activities 433 463 --------------- --------------- Profit on ordinary activities after taxation attributable to the members of Titon Holdings Plc 1,086 1,090 Dividends 718 785 --------------- --------------- Retained profit for the financial year 368 305 --------------- --------------- Earnings per share - basic 10.19p 9.85p - diluted 10.16p 9.83p All amounts relate to continuing activities. There are no recognised gains and losses other than the profit attributable to the shareholders of the Company of £1,086,000 in the year ended 30 September 2003 and the profit of £1,090,000 in the year ended 30 September 2002. CONSOLIDATED BALANCE SHEET Preliminary Results for the year ended 30 September 2003 2003 2002 £'000 £'000 Fixed assets Tangible assets 4,025 3,347 Current assets Stocks 2,442 2,237 Debtors 3,248 3,241 Cash at bank and in hand 3,897 5,004 --------------- --------------- 9,587 10,482 Creditors: Amounts falling due within one year -3,046 -3,043 --------------- --------------- Net current assets 6,541 7,439 --------------- --------------- Total assets less current liabilities 10,566 10,786 Deferred taxation -68 -98 --------------- --------------- 10,498 10,688 --------------- --------------- Capital and reserves Called up share capital 1,050 1,106 Share premium account 819 819 Share capital redemption reserve 56 - Profit and loss account 8,573 8,763 -------------- ---------------- Equity shareholders' funds 10,498 10,688 --------------- --------------- COMPANY BALANCE SHEET Preliminary Results for the year ended 30 September 2003 2003 2002 £'000 £'000 Fixed assets Tangible assets 2,813 2,058 Investments 204 202 --------------- --------------- 3,017 2,260 Current assets Debtors 2,103 1,811 Cash at bank and in hand 3,800 4,900 --------------- --------------- 5,903 6,711 Creditors: Amounts falling due within one year -730 -739 --------------- --------------- Net current assets 5,173 5,972 --------------- --------------- Total assets less current liabilities 8,190 8,232 Deferred taxation -174 -182 --------------- --------------- 8,016 8,050 --------------- --------------- Capital and reserves Called up share capital 1,050 1,106 Share premium account 819 819 Share capital redemption reserve 56 - Profit and loss account 6,091 6,125 --------------- --------------- Equity shareholders' funds 8,016 8,050 --------------- --------------- CONSOLIDATED CASH FLOW STATEMENT Preliminary Results for the year ended 30 September 2003 2003 2002 £'000 £'000 Net cash inflow from operating activities 1,667 2,114 --------------- --------------- Returns on investments and servicing of finance Interest received 153 171 Interest paid -3 -4 --------------- --------------- 150 167 --------------- --------------- Taxation UK corporation tax -449 -520 --------------- --------------- Capital expenditure Purchase of tangible fixed assets -1,309 -429 Sale of tangible fixed assets 43 33 --------------- --------------- -1,266 -396 --------------- --------------- Equity dividends paid -746 -774 --------------- --------------- Cash (outflow)/inflow before use of management of -644 591 liquid resources and financing Management of liquid resources Disposal/(purchase) of treasury deposits 1,100 -600 Financing Purchase of ordinary share capital -560 - --------------- --------------- Decrease in cash -104 -9 --------------- --------------- Notes to the Preliminary Results for the year ended 30 September 2003 1. Earnings per share has been calculated in accordance with FRS14. Basic earnings per share has been calculated by dividing the profit attributable to shareholders of £1,086,000 (2002: £1,090,000) by the weighted average number of ordinary shares in issue during the year of 10,657,159 (2002: 11,062,200). The diluted earnings per share has been calculated by dividing the profit attributable to shareholders of £1,086,000 (2002: £1,090,000) by the weighted average number of ordinary shares and potential dilutive ordinary shares during the year of 10,693,452 (2002: 11,090,291). all dilutive ordinary shares relate to share options. 2. Reconciliation of operating profit to net cash inflow from operating activities 2003 2002 £'000 £'000 Operating profit 1,369 1,386 Depreciation 602 603 Increase in stocks -205 -2 Increase in debtors -7 -76 (Decrease)/increase in creditors -78 207 Profit on sale of fixed assets -14 -4 ----------- ----------- Net cash inflow from operating activities 1,667 2,114 ----------- ----------- 3. Reconciliation of net cash flow to movement in net funds 2003 2002 £'000 £'000 Decrease in cash in the year -104 -9 (Decrease)/increase in liquid resources -1,100 600 ----------- ----------- Change in net funds resulting from cashflows and movement in net funds in the year -1,204 591 Opening net funds 4,870 4279 ----------- ----------- Closing net funds 3,666 4,870 ----------- ----------- 4. The Preliminary Announcement does not constitute statutory accounts. The auditors' report on the full accounts for the year ended 30 September 2003 has yet to be signed. 5. The actual results for the year ended 30 September 2002 as shown in this statement are an abridged version of the Group's 2002 accounts which have been filed with the Registrar of Companies and which received an unqualified audit report. The results for the year ended 30 September 2003 have been prepared on a basis consistent with the accounting policies set out in the statutory accounts for the year ended 30 September 2002. 6. The Preliminary Announcement was approved by the Board of Directors on 10 December 2003. 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. This information is provided by RNS The company news service from the London Stock Exchange

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