Preliminary Results - year en

RNS Number : 8571D
Titon Holdings PLC
10 December 2009
 





Titon Holdings Plc

Preliminary Announcement for the year ended 30 September 2009



Business Review



Financial Performance

Loss before Tax for the year to 30 September 2009 was £210,000 (2008: loss £59,000), on Revenue 14.2% lower at £14.05 million (2008: £16.38 million).  Losses per share were 1.91p (2008: 2.50p); the prior year figure having been adversely affected by a high deferred tax charge.


As reported at the interim stage, the loss for the first six months of the year was £366,000 as the sharp downturn in construction activity had a major impact on profitability. Difficult trading conditions continued into the third quarter but the fourth quarter saw some confidence return to the market and sales volumes improved. This increase in sales activity, combined with a much-reduced cost base, has allowed a modest profit of £156,000 to be recorded for the second half of the year.


One of our key objectives throughout the recession has been to preserve cash resources. We are pleased to report that Net Cash Balances at the year end were £3.10 million compared to £2.54 million at the start of the year. This has been achieved despite providing a further £400,000 working capital to the Korean manufacturing operation and maintaining the interim dividend. Tight control over our inventory levels has been necessary and these have fallen by £450,000 (18%) over the year to a level of £2.06 million (2008: £2.51 million).


Given the loss for the full year the Directors have considered very carefully the level of final dividend that should be paid and are proposing 1.0p per share (2008: 1.0p). This, when added to the interim dividend paid on 24 June 2009 makes a total for the year of 2.0p (2008: 2.0p). If approved by shareholders, at the forthcoming Annual General Meeting, the dividend will be payable on 22 February 2010 to shareholders on the register on 22 January 2010. The ex dividend date is 20 January 2010.


Trading Commentary

Trading results for the year reflect the severe conditions experienced across the majority of the markets in which we operate. Whilst the first half of the year for the industry continued to be tough, by June there were some signs of recovery. Even though it was still evident that many of our customers were experiencing difficulties, a measured optimism began to emerge. An increase in activity began to occur in the market, and those who were benefiting from this slight improvement started to place increased orders with us. In turn, this increase began to put stress on our reduced production capabilities, and consequently a small number of new temporary staff were employed.  


Sales of our in-house manufactured mechanical ventilation range have shown strong growth throughout the year, albeit from a low base. We have steadily increased our mechanical ventilation sales team and our technical back up team over the year in order to capitalise on the market leading products that we have designed. Titon is now recognised as a significant player in the growing market of energy efficient ventilation systems and we anticipate building on this in the coming year.  


Our 'joint venture' with our South Korean distributor, Browntech Sales Co. Ltd., is developing into a vibrant operation. It is understandable that there was a temporary slowdown in demand for its products during the early part of this year due to the global recession, but the business is now moving forward. Although this operation has been loss-making over the year, the increase in new contracts for our Titon Korea factory indicates a promising future for our investment.

 



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Titon Holdings Plc

Preliminary Announcement for the year ended 30 September 2009


Business Review (continued)



Employees

As reported at the interim stage, further redundancies have been made during the year mainly as a result of the decline in our window and door hardware sales. The total number of redundancies was 19 at a cost of £136,000. The downsizing that we have undertaken has been part of a traumatic period for the Group and those who have had to take redundancy, along with their families, have naturally suffered from this difficult process. Once again, we express our gratitude and best wishes to them. 


The total number of employees was 171 as at 30 September 2009, 24 lower than at the end of September 2008. This decrease is in addition to the reduction of 61 in the previous financial year



Prospects

Market conditions continue to be uncertain, and forecasting remains extremely difficult. However, Titon remains financially strong and is well positioned to take maximum advantage of the UK market when it eventually emerges out of recession. We now have a highly focused work force, and a very exciting and competitive range of new powered ventilation products. Our in-house design and development team continues to develop innovative products to take advantage of the changing trends in domestic ventilation, and all of our sales teams are proactively seeking out new areas of opportunity. The next revision of the Building Regulations for England and Wales is expected to be announced over the coming weeks and to take effect some time in 2010. These Regulations are likely to increase the requirement for energy efficient ventilation systems over the next few years as building quality levels are further enhanced. The inclusion of trickle ventilators in all replacement windows is, once again, being considered.


Our global markets, whilst mirroring the problems experienced in our home market, have also shown a slight improvement in the last quarter, and we have shown our further commitment to this vital part of our business by increasing our export sales staff. Further initiatives to increase our overseas sales are planned for the coming year.


Whilst there are now a few encouraging signs in most of our markets, we acknowledge that 2009/2010 will still be a challenging one for Titon, but one which we approach with cautious enthusiasm.


On behalf of the Board 



N Anderson                                                                                                                  D A Ruffell

Chairman                                                                                                                       Chief Executive


9 December 2009

 


Page 2  



Titon Holdings Plc

Preliminary Announcement for the year ended 30 September 2009


Unaudited Consolidated Income Statement

for the year ended 30 September 2009


 
 
 
Unaudited
 
 
 
 
2009
2008
 
 
 
£'000
£'000
Revenue
 
 
14,053
16,375
Cost of sales
 
 
(10,993)
(12,803)
Gross profit
 
 
3,060
3,572
Distribution costs
 
 
(625)
(762)
Administrative expenses
 
 
(2,654)
(2,958)
Finance income
 
 
37
101
Share of losses from associate
 
 
(28)
(12)
Loss before tax
 
 
(210)
(59)
Tax credit / (expense)
 
 
8
(205)
Loss for the year attributable to the equity holders of the parent
 
 
 
(202)
 
(264)
Loss per share - basic - basic
 
 
(1.91p)
(2.50p)
                                 - diluted
 
 
(1.91p)
(2.50p)
 
 
 
 
 


 





Unaudited Consolidated Statement of Recognised Income and Expense 

for the year ended 30 September 2009


 
 
Unaudited
2009
£000
 
2008
£000
Loss for the year attributable to the
equity holders of the parent
(202)
(264)
Exchange difference on retranslation
of overseas operations
(14)
(32)
Total recognised income and expense for the year attributable to equity holders of the parent
(216)
(296)



 

Page 3





Titon Holdings Plc

Preliminary Announcement for the year ended 30 September 2009


Unaudited Consolidated Balance Sheet

at 30 September 2009

 

 
 
 
Unaudited
 
    
 
 
2009
2008
 
 
 
£'000
£'000
Assets
 
 
 
 
Property, plant and equipment  
 
 
3,972
4,395
Intangible assets
Investments in associates
Financial assets  
 
 
88
185
103
61
213
100
Total non-current assets
 
 
4,348
4,769
Inventories
 
 
2,057
2,507
Trade and other receivables
 
 
2,947
3,224
Corporation tax
 
 
8
-
Cash and cash equivalents
 
 
3,096
2,546
Total current assets
 
 
8,108
8,277
Total Assets
 
 
12,456
13,046
Liabilities
 
 
 
 
Deferred tax
 
 
361
366
Total non-current liabilities
 
 
361
366
Trade and other payables
 
 
2,266
2,427
Bank overdraft
 
 
23
18
Corporation tax 
 
 
-
5
Total current liabilities
 
 
2,289
2,450
Total Liabilities
 
 
2,650
2,816
Equity
 
 
 
 
Share capital
 
 
1,056
1,056
Share premium reserve
 
 
865
865
Capital redemption reserve
 
 
56
56
Translation reserve
 
 
(13)
1
Share schemes reserve
 
 
9
6
Retained earnings
 
 
7,833
8,246
Total Equity attributable to equity holders of the parent
 
 
9,806
10,230
 
 
 
 
 
Total Liabilities and Equity
12,456
13,046


 


Page 4





Titon Holdings Plc

Preliminary Announcement for the year ended 30 September 2009


Unaudited Consolidated Cash Flow Statement

for the year ended 30 September 2009


 
 
Unaudited
 
    
 
2009
2008
 
 
£'000
£'000
Cash generated from operating activities
 
 
 
Loss before tax
 
(210)
(59)
Depreciation of property, plant & equipment
 
616
641
Amortisation on intangible assets
 
30
37
Decrease in inventories
 
437
476
Decrease in receivables
 
274
541
(Decrease) / increase in payables and other current liabilities
 
(161)
225
Loss / (profit) on sale of plant & equipment
 
8
(11)
Share based payment - equity settled
 
3
3
Interest received
 
(37)
(101)
Share of associate loss
 
28
12
Cash generated from operations
 
988
1,764
Income taxes (paid) / refunded
 
(11)
27
Net cash generated from operating activities
 
977
1,791
Cash flows from investing activities
 
 
 
Acquisition of shares in associate
 
-
(225)
Purchase of property, plant & equipment 
 
(206)
(405)
Purchase of intangible assets
 
(57)
(40)
Proceeds from sale of plant & equipment
 
5
42
Interest received
 
37
101
Net cash used in investing activities
 
(221)
(527)
Cash flows from financing activities
 
 
 
Dividends paid to equity shareholders
 
(211)
(301)
Issue of loan to associate
 
-
(100)
Net cash used in financing activities
 
(211)
(401)
 
 
 
 
Net increase in cash & cash equivalents
 
545
863
Cash & cash equivalents at beginning of the year
 
2,528
1,665
Cash & cash equivalents at end of the year
 
3,073
2,528


 



Page 5

Titon Holdings Plc

Notes to the Preliminary Announcement for the year ended 30 September 2009




1    Loss per ordinary share


The calculation of the basic and diluted loss per share is based on the following data:

 

 
Unaudited
 
 
2009
2008
 
£'000
£'000
Numerator
 
 
Loss for the purposes of basic loss per share being loss
after tax attributable to members of Titon Holdings Plc
(202)
(264)
 
 
 
Denominator
Number
Number
Weighted average number of ordinary shares for the purposes of
 
 
basic loss per share - at the beginning and end of the year
10,555,650
10,555,650
Loss per share (pence)
 
 
Basic
(1.91p)
(2.50p)
Diluted
(1.91p)
(2.50p)



2   Dividends

 

 
Unaudited
 
 
2009
2008
 
£'000
£'000
Final dividend of 1.0 pence (2008: 2.3 pence) per ordinary share paid and proposed during the year relating to the previous year's results
 
106
196
 
Interim dividend of 1.0 pence (2008: 1.0 pence) per ordinaryshare paid during the year
105
106
 
Unclaimed dividend returned
-
(1)
 
 
211
301

 


The Directors are proposing a final dividend of 1.0 pence (2008: 1.0 pence) per share. This will result in a final dividend totalling £106,000 (2008: £106,000), subject to approval by the shareholders at the Annual General Meeting. This dividend has not been accrued at the balance sheet date.

    



Page 6



Titon Holdings Plc

Notes to the Preliminary Announcement for the year ended 30 September 2009



  Analysis of cash and cash equivalents


The table below provides an analysis of net cash and cash equivalents during the year ended 30 September 2009:

 

 
Unaudited
 
 
2009
2008
    
£'000
£'000
Cash available on demand
221
1,046
Short-term deposits
2,875
1,500
Cash at bank
3,096
2,546
Overdraft
(23)
(18)
 
3,073
2,528
 
 
 
Net increase in cash equivalents
545
863
Cash and cash equivalents at beginning of year
2,528
1,665
Cash and cash equivalents at end of year
3,073
2,528




4     Revenue and segmental information

       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


        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.

 


Page 7



Titon Holdings Plc

Notes to the Preliminary Announcement for the year ended 30 September 2009




        Revenue and segmental information (continued)



Segment information about the geographic regions is presented below.


Geographic segments 

 

 
United Kingdom
Rest of the World
   Consolidated
 
2009
2008
2009
2008
2009
2008
 
£'000
£'000
£'000
£'000
£'000
£'000
External
11,864
14,538
2,189
1,837
14,053
16,375
Intercompany
-
-
177
300
177
300
Total Revenue
11,864
14,538
2,366
2,137
14,230
16,675
Segment result
1,551
2,080
44
74
1,595
2,154
Unallocated expenses
 
 
 
 
(1,814)
(2,302)
Losses from associate
 
 
 
 
(28)
(12)
Finance income
 
 
 
 
37
101
Loss before tax
 
 
 
 
(210)
(59)
Tax credit / (expense)
 
 
 
 
8
(205)
Loss for the year attributable to the equity holders of the parent
 
 
 
(202)
(264)

 


Balance Sheet    
2009
2008
 
£'000
£'000
Assets - Segment total assets
 
 
United Kingdom
11,544
12,604
Rest of World
904
442
Consolidated
12,448
13,046
Liabilities - Segment total liabilities
 
 
United Kingdom
2,403
2,668
Rest of World
239
148
Consolidated
2,642
2,816


Page 8


Titon Holdings Plc

Notes to the Preliminary Announcement for the year ended 30 September 2009


5 Tax (credit) / expense

 

    
 
2009
2008
 
 
£'000
£'000
UK corporation tax credit
 
(8)
(26)
Adjustment in respect of under provision in prior years    
 
6
5
Total UK corporation tax
 
(2)
(21)
Total overseas tax
 
-
31
Total current tax
 
(2)
10
Deferred tax 
 
(6)
195
Total tax (credit) / expense
 
(8)
205

 

 

The charge for the year can be reconciled to the loss
 
 
 per the income statement as follows:  
2009
2008

 
£'000
£'000
Loss before tax
Effect of:
 
(210)
(59)
Expected tax charge based on the standard rate of
 
 
corporation tax in the UK of 21% (2008: 20.5%)
(44)
(12)
Additional deduction for R&D expenditure 
(29)
(33)
Expenses not deductible for tax purposes
40
31
Unrelieved tax losses and other deductions
27
19
Adjustment in respect of IBAs
(6)
221
Effect of difference in exchange rates
(2)
-
Adjustments in respect of prior periods
6
(21)
Total tax (credit) / expense for the year
(8)
205


The effective tax rate for the year is 3.8% (2008347%)


The total tax charge for 2008 was affected by the adjustment for Industrial Buildings Allowances (IBAs) which will be phased out over a period of four years.


 


Page 9



Titon Holdings Plc

Notes to the Preliminary Announcement for the year ended 30 September 2009




6  Basis of preparation


The financial information for the year ended 30 September 2009 together with the comparative year has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs) as adopted by the European Union.

The accounting polices of the Group under International Financial Reporting Standards (IFRSs) are set out in detail in the 2008 Financial Statement which is available from the Group's website at www.titonholdings.com. There have been no changes to the accounting policies during the year.


The information in this preliminary announcement does not constitute the statutory accounts of the Group within the meaning of Section 435 of the Companies Act 2006 for the year ended 30 September 2009 or 2008.


The financial information for the year ended 30 September 2008 is derived from the statutory accounts for that year which have been delivered to the Registrar of CompaniesThe auditors have reported on those accounts; their report was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under the Companies Act 1985, s 237(2) or (3). The statutory accounts for 2009, on which the auditors have not yet reported, will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held on 17 February 2010.



 



Titon Holdings Plc

Registered Office: International House, Peartree Road, Stanway, Colchester, Essex CO3 0JL. Registered in England and Wales (registered no. 1604952).





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