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Holders Technology (HDT)

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Monday 16 March, 2020

Holders Technology

Final Results

RNS Number : 1795G
Holders Technology PLC
16 March 2020
 

Holders Technology plc

("The Group")

 

Specialised PCB Materials, Lighting and Control Solutions

 

Final results for the year ended 30 November 2019

 

 

Holders Technology plc (AIM: HDT) announces its audited results for the year ended 30 November 2019.

 

The Group supplies specialty laminates and materials for printed circuit board manufacture ("PCB") and operates as a Lighting and Control Solutions ("LCS") providerThe Group operates from the UK and from Germany, with a PCB division and an LCS division in each country.

 

LCS divisions made further progress during the year and achieved profitability, and the PCB UK division in the UK made modest progress.  Market conditions for the PCB division in Germany remained difficult which resulted in reduced revenue and profitability for the division.  The UK legacy tax liabilities were resolved with a favourable outcome.  The overall profit after tax was a modest improvement compared to 2018, from slightly reduced revenue.

 

The directors will recommend payment of a final dividend of 0.75p per share, a total of 1.00p for the year (2018 total: 0.75p).

 

The results are summarised below.

 

 

2019

2018

 

 

£'000

£'000

 

 

 

 

· Revenue

PCB

8,647

9,374

 

LCS

3,515

3,112

 

Group

12,162

12,486

 

 

 

 

· Operating Profit/ (Loss)

PCB

230

280

 

LCS

69

(13)

 

Central costs

(155)

(83)

 

Group

144

184

 

 

 

 

· Profit before tax

Group

150

177

Tax credit/ (expense)

 

31

(8)

Profit after tax

 

181

169

 

 

 

 

· Cash Balances

Group

734

403

 

 

 

 

· Basic Earnings per Share

Group

4.31p

4.06p

· Diluted Earnings per Share

Group

4.30p

4.03p

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

For further information, contact:

Holders Technology plc

01896 758781

Rudi Weinreich, Executive Chairman

 

Victoria Blaisdell, Group Managing Director

 

Paul Geraghty, Group Finance Director

 

Website www.holdersgroup.com

 

 

 

SP Angel Corporate Finance LLP - Nominated Advisor & Broker

020 3470 0470

Matthew Johnson / Caroline Rowe

 

 

Chairman's statement

 

The Group operates from the UK and from Germany, with a PCB division and an LCS division in each country. 

 

I am pleased to report that both LCS divisions have continued to make good progress during 2019, and PCB UK has achieved modest growth.  Market conditions for PCB Germany however have remained difficult.  As a consequence, Group revenue was slightly lower than 2018.  Operating profitability was lower than 2018, while after-tax profitability improved slightly compared to 2018.

 

Revenue for the year was £12.2m (2018: £12.5m), with gross margins of 27.9% (2018: 26.2%).  The operating profit for the year was £144,000 (2018: operating profit of £184,000), and the profit after tax was £181,000 (2018: profit £169,000).

 

The PCB divisions together had revenue of £8.6m (2018: £9.4m) and achieved an operating profit of £230,000 (2018: profit £280,000).  Margins increased from 23.5% to 24.3%.

 

Economic conditions in Germany, especially in the manufacturing sector, remained difficult during 2019.  This adversely impacted our German PCB operations, the largest single element of the Group, with lower revenue and profitability than in 2018.

 

UK PCB operations achieved a modest improvement in the year despite the continuing challenging market. 

 

LCS revenues overall amounted to £3.5m (2018: £3.1m) with gross margins increasing from 34.1% to 36.7% and a profit of £69,000 was achieved (2018: loss of £13,000). In the second half the sales and technical team was considerably strengthened, and further LCS investments are planned for 2020.

 

HMRC has now agreed the 2005 Cross-Border Corporation Tax claim reported previously.  As a result, the related £29,000 tax and £14,000 interest liabilities recognised at last year end were reversed during the year.

 

On behalf of the Board I would like to record our thanks to our staff for their hard work during 2019 which resulted in a profitable year for the Group. Given the improved earnings, the Board recommends an increased final dividend of 0.75p in respect of the 2019 year.

 

The outlook for 2020 is in many ways the same as 2019.  Our LCS divisions are well placed to deliver further improvements, whilst improvement in results from the German PCB operations is heavily dependent on recovery in the German automotive sector and wider economy.

 

 

 

 

R W Weinreich  

Executive Chairman

13 March 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group income statement for the year ended 30 November 2019

 

 

 

 

Note

2019

2018

 

 

 

 

£'000

£'000

 

 

 

 

 

 

Revenue

 

 

 

12,162

12,486

Cost of sales

 

 

 

(8,770)

(9,220)

Gross profit

 

 

 

3,392

3,266

Distribution costs

 

 

 

(419)

(422)

Administrative expenses

 

 

 

(2,890)

(2,696)

Other operating (expenses)/ income

 

 

 

61

36

Operating profit

 

 

 

144

184

Finance income

 

 

 

6

-

Finance expenses

 

 

 

-

(7)

Profit before taxation

 

 

 

150

177

Tax credit/ (expense)

 

 

2

31

(8)

Profit after taxation attributable to equity shareholders

 

 

 

181

169

 

 

 

 

 

 

Basic earnings per share

4

4.31p

4.06p

Diluted earnings per share

4

4.30p

4.03p

 

 

 

Group statement of comprehensive income for the year ended 30 November 2019

 

 

 

 

2019

£'000

2018

£'000

Profit for the year

 

 

181

169

 

 

 

 

Items that may be reclassified subsequently to profit or loss:

 

 

 

  Exchange differences on translating foreign operations

 

 

(94)

15

Total comprehensive income for the year

 

 

87

184

 

Statement of changes in equity for the year ended 30 November 2019

 

 

Group  

Share capital

Share premium

Capital redemption reserve

Translation reserve

Retained earnings

Total equity

Balance at 1 December 2017

416

1,590

1

207

1,718

3,932

Share based payments

-

-

-

-

4

4

Transactions with owners

-

-

-

-

(17)

(17)

Profit for the year

-

-

-

-

169

169

Exchange differences on translating foreign operations

 

-

 

-

 

-

 

15

 

-

 

15

Total comprehensive income for the year

 

-

 

-

 

-

 

15

 

169

 

184

Balance at 30 November 2018

416

1,590

1

222

1,870

4,099

Shares issued

6

-

-

-

-

6

Share based payments

-

-

-

-

4

4

Transactions with owners

6

-

-

-

(28)

(22)

Profit for the year

-

-

-

-

181

181

Exchange differences on translating foreign operations

 

-

 

-

 

-

 

(94)

 

-

 

(94)

Total comprehensive income for the year

 

-

 

-

 

-

 

(94)

 

181

 

87

Balance at 30 November 2019

422

1,590

1

128

2,023

4,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group balance sheet at 30 November 2019

 

 

 

 

 

2019

2018

 

 

 

 

£'000

£'000

Assets

 

 

 

 

 

Non-current assets

 

 

 

 

 

Intangible fixed assets

 

 

 

394

416

Property, plant and equipment

 

 

 

237

259

Deferred tax assets

 

 

 

12

10

 

 

 

 

643

685

Current assets

 

 

 

 

 

Inventories

 

 

 

2,530

2,849

Trade and other receivables

 

 

 

1,758

1,791

Cash and cash equivalents

 

 

 

734

403

 

 

 

 

5,022

5,043

Liabilities

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

 

 

 

(1,280)

(1,373)

Current tax liabilities

 

 

 

-

(43)

 

 

 

 

(1,280)

(1,416)

Net current assets

 

 

 

3,742

3,627

Non-current liabilities

 

 

 

 

 

Retirement benefit liability

 

 

 

(212)

(204)

Deferred tax liabilities

 

 

 

(9)

(9)

 

 

 

 

(221)

(213)

 

 

 

 

4,164

4,099

Shareholders' equity

 

 

 

 

 

Share capital

 

 

 

422

416

Share premium account

 

 

 

1,590

1,590

Capital redemption reserve

 

 

 

1

1

Retained earnings

 

 

 

2,023

1,870

Cumulative translation adjustment reserve

 

 

 

128

222

 

 

 

 

4,164

4,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of cash flows for the year ended 30 November 2019

 

 

 

 

 

2019

 2018

 

 

 

 

 

£'000

£'000

 

Cash flows from operating activities

 

 

 

 

 

 

Profit before tax from continuing operations

 

 

 

150

177

 

Share-based payment charge

 

 

 

4

4

 

Depreciation

 

 

 

74

71

 

Decrease/ (Increase) in inventories

 

 

 

237

(427)

 

(Increase) in trade and other receivables

 

 

 

(140)

(407)

 

Increase in trade and other payables

Interest (Income)/ Expense

 

 

 

92

(6)

571

8

 

Cash used in operations

 

 

 

411

(3)

 

Interest paid

Corporation tax paid

 

 

 

(8)

-

(8)

(88)

 

Net cash (used in)/ generated from operations

 

 

 

403

(99)

 

Cash flows from investing activities

 

 

 

 

 

 

Purchase of property, plant and equipment

 

 

 

(42)

(58)

 

Proceeds from sale of property, plant and equipment

 

 

1

-

 

Net cash (used in)/generated from investing activities

 

 

(41)

(58)

 

Cash flows from financing activities

 

 

 

 

 

 

Sale of shares

 

 

 

6

-

 

Equity dividends paid

 

 

 

(32)

(21)

 

Net cash used in financing activities

 

 

 

(26)

(21)

 

 

Net change in cash and cash equivalents

 

 

 

 

335

 

(178)

 

Cash and cash equivalents at start of period

 

 

 

403

579

 

Effect of foreign exchange rates

 

 

 

(4)

2

 

Cash and cash equivalents at end of period

 

 

 

734

403

 

 

 

 

 

Notes

 

1.  Basis of preparation

The Group and parent company financial statements have been prepared in accordance with EU endorsed International Financial Reporting Standards (IFRS), International Financial Reporting Interpretations Committee (IFRIC) interpretations and with those parts of the Companies Act applicable to companies reporting under IFRS.  All accounting standards and interpretations issued by the International Accounting Standards Board and the International Financial Reporting Interpretations Committee effective at the time of preparing these financial statements have been applied.

 

2.  Taxation

 

2019

£'000

2018

£'000

Analysis of the charge in the period

 

 

Current tax

 

 

-  Current period

-

-

-  Credit adjustment in respect of prior periods

(29)

-

 

(29)

-

Deferred tax

(2)

8

Total tax

(31)

8

 

 

 

Tax reconciliation

 

 

 

 

 

The tax for the period is lower (2018: lower) than the standard rate of corporation tax in the UK, effectively 19.0% (2018: 19.0%) for the company's financial year.  The differences are explained below:

 

 

2019

£'000

2018

£'000

Profit before taxation

150

177

 

 

 

Profit before taxation multiplied by the rate of corporation tax in the UK of 19.0% (2018: 19.0%)

 

29

 

34

 

 

 

Effects of:

 

 

Accelerated capital allowances

-

2

Adjustment from prior years

(29)

-

Taxation losses

(31)

(28)

Taxation

(31)

8

 

3.  Dividends

The directors have proposed a final dividend of 0.75p per share payable on 19 May 2020 to shareholders on the register at close of business on 1 May 2020.  The total dividend for the year, including the interim dividend of 0.25p (2018: 0.25p) per share paid on 8 October 2019, amounts to £42,000 (2018: £32,000), which is equivalent to 1.00p (2018: 0.75p) per share.  

 

4.  The basic earnings per share are based on the profit for the financial year of £181,000 (2018: profit of £169,000) and on ordinary shares of 4,199,735 (2018: 4,159,551 shares), the weighted average number of shares in issue during the year.  Diluted earnings per share is based on 4,207,199 ordinary shares (2018: 4,190,594 shares), being the weighted average number of ordinary shares after an adjustment of 7,464 (2018: 31,043) in relation to share options.

 

5.  This statement, which has been approved by the Board on 13 March 2020, is not the Company's statutory accounts.  The statutory accounts for each of the two years to 30 November 2018 and 30 November 2019 received audit reports which were unqualified and did not contain statements under section 498(2) and section 498(3) of the Companies Act 2006.  The 2018 accounts have been filed with the registrar of Companies, but the 2019 statutory accounts are not yet filed.


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