TIDMHDT

RNS Number : 7525W

Holders Technology PLC

21 August 2020

21 August 2020

Holders Technology plc

("Holders Technology" or the "Company")

Half Year Report 2020

Holders Technology, (AIM: HDT), is pleased to announce its unaudited half year results for the six months ended 31 May 2020.

Highlights

Holders Technology plc supplies specialty laminates and materials for printed circuit board manufacturers ("PCB") and operates as a lighting and control solutions ("LCS") provider to the lighting market and commercial buildings sector.

Unaudited results for the half year ended 31 May 2020 are summarised as follows:

 
                                 2020         2019 
                                GBP'000      GBP'000 
                            --------------  -------- 
 
 Revenue            PCB              4,157     4,291 
  LCS                                1,170     1,737 
  Total                              5,327     6,028 
                            -------------- 
 
 Gross profit                        1,398     1,579 
 Margins                             26.2%     26.2% 
 
 Overheads                           1,482     1,570 
 
 Operating (loss)/ 
  profit                              (84)         9 
 
 Finance (expense)/ 
  income                               (6)        11 
 (Loss)/ profit before 
  tax                                 (90)        20 
 
 Taxation                                -        29 
 (Loss)/ profit after 
  tax                                 (90)        49 
                            ==============  ======== 
 
 (Loss)/ earnings 
  per share                        (2.13p)     1.17p 
 Interim dividend 
  per share                          0.25p     0.25p 
 Net assets per share                  99p      100p 
--------------------------  --------------  -------- 
 

Chairman's statement

Inevitably these interim results were heavily impacted by the economic consequences of the Covid-19 pandemic. The two segments of our business were affected differently. Details of this are set out below.

We have taken full benefit of all applicable assistance schemes, both in the UK and Germany, in order to reduce our costs. We have supplemented these with pay and other cost reductions wherever we can.

Against the background of the exceptionally difficult conditions, the board considers the result for the first half to be acceptable.

Group revenue decreased by 11.6% to GBP5.3m (H1 2019: GBP6.0m), gross margins were unchanged at 26.2%, and the pre-tax result was a loss of GBP90,000 (H1 2019: profit of GBP20,000).

PCB

PCB sales in the period decreased by 3.1%, from GBP4,291,000 in 2019 to GBP4,157,000, and PCB gross margins increased by 0.8% to 23.3%. The first half revenues benefitted from increased demand from healthcare applications and a degree of stockpiling by our customers due to global uncertainty. The Government support referred to above enabled us to reduce PCB overheads as a percentage of sales by 1.7% to 16.4%. Overall, our PCB activities recorded a pre-tax profit of GBP124,000 (H1 2019: profit of GBP30,000).

LCS

Lighting and Control Solutions division operations in the UK and Germany experienced a difficult first half due to the economic impact of Covid-19. A number of projects were delayed in the UK and the market in Germany weakened. Revenue reduced by 32.6% from GBP1,737,000 in H1 2019 to GBP1,170,000 but gross margins improved from 35.2% to 36.8%. Overheads as a percentage of revenue increased from 31.1% to 49.7%. The overall result for the LCS divisions was a loss of GBP174,000 (H1 2019: profit of GBP31,000).

In March 2020, the Group invested c. GBP15,000 in a 50:50 Joint Venture with a sales partner based in Austria. The new company, called Holders Technology Austria GmbH, will develop intelligent lighting business in Austria, Switzerland, Czechia, and Slovakia.

Cash and Debt

During the Covid-19 crisis management have increased focus on controlling days of stock and debtors' days. Net cash of GBP107,000 was generated from operations. Group cash at the period end was GBP723,000 (H1 2019: GBP674,000). Other than lease liabilities, the company has no debt.

Outlook

At present we have only limited visibility as to the likely level of trading in the second half of the year. We are encouraged by recent improvements in some divisions, both in quotations and order intake, as compared to the first half but cannot be certain that this will follow through to the end of the year. Our management team and work force remain committed to managing costs and containing working capital, so that the business may benefit from any improvement in trading conditions.

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

For further information, contact:

Rudolf W. Weinreich Holders Technology plc

Executive Chairman 27-28 Eastcastle Street

London W1W 8HD

For further information, contact:

Holders Technology plc

Rudi Weinreich, Executive Chairman 01896 758781

Victoria Blaisdell, Group Managing Director

Paul Geraghty, Group Finance Director

SP Angel Corporate Finance LLP - Nomad and Broker

Matthew Johnson/ Caroline Rowe, Corporate Finance

Abigail Wayne, Corporate Broking 020 3470 0470

Website

www.holdersgroup.com

Consolidated income statement

for the half year ended 31 May 2020 (Unaudited)

 
                                          Half year   Half year   Full year 
                                           ended 31    ended 31    ended 30 
                                           May 2020    May 2019    Nov 2019 
                                         ==========  ==========  ========== 
                                  Notes     GBP'000     GBP'000     GBP'000 
 Revenue                              4       5,327       6,028      12,162 
 Cost of sales                              (3,929)     (4,449)     (8,770) 
                                         ==========  ==========  ========== 
 Gross profit                                 1,398       1,579       3,392 
 Distribution costs                           (186)       (199)       (419) 
 Administrative expenses                    (1,294)     (1,369)     (2,890) 
 Other operating (expenses)/ 
 income                                         (2)         (2)          61 
                                         ==========  ==========  ========== 
 Operating (loss)/ profit                      (84)           9         144 
 Finance (costs)/ income                        (6)          11           6 
                                         ==========  ==========  ========== 
 Profit before taxation                        (90)          20         150 
 Taxation                             5           -          29          31 
                                         ==========  ==========  ========== 
 Profit for the period                         (90)          49         181 
                                         ==========  ==========  ========== 
 
   Total and continuing 
 Basic earnings per share             7     (2.13p)       1.17p       4.31p 
                                         ==========  ==========  ========== 
 Diluted earnings per share           7     (2.13p)       1.17p       4.30p 
                                         ==========  ==========  ========== 
 
 
 

Consolidated statement of comprehensive income

for the half year ended 31 May 2020 (Unaudited)

 
                                        Half year         Half year   Full year 
                                         ended 31          ended 31    ended 30 
                                         May 2020          May 2019    Nov 2019 
                                       ==========  ================  ========== 
                                         GBP'000            GBP'000     GBP'000 
 
 (Loss)/ profit for the period               (90)                49         181 
 Reserves adjustment for                     (10)                 -           - 
  IFRS 16 
 Exchange differences on 
  translation of foreign operations           133                 6        (94) 
                                       ==========  ================  ========== 
 Total comprehensive income 
  for the period                               33                55          87 
                                       ==========  ================  ========== 
 
 

Consolidated statement of changes in equity

for the half year ended 31 May 2020 (Unaudited)

 
                                                         Capital 
                                         Share         redemption        Translation        Retained 
                    Share capital       premium          reserve           reserve          earnings      Total equity 
                  =================  ============  ==================  ===============  ===============  ============= 
                     GBP'000              GBP'000             GBP'000       GBP'000          GBP'000       GBP'000 
 
 Balance 1 Dec 
  2018                          416         1,590                   1              222            1,870          4,099 
 
   Dividends                      -             -                   -                -             (32)           (32) 
 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 30 Nov 
  2019                          422         1,590                   1              128            2,023          4,164 
                  =================  ============  ==================  ===============  ===============  ============= 
 Loss for the 
  period                          -             -                   -                -             (90)           (90) 
 Reserves 
  adjustment for 
  IFRS 16                        --             -                   -                -             (10)           (10) 
 Exchange 
  differences on 
  translating 
  foreign 
  operations                      -             -                   -              133                -            133 
                  =================  ============  ==================  ===============  ===============  ============= 
 Total 
  comprehensive 
  income for the 
  period                          -             -                   -              133            (100)             33 
                  =================  ============  ==================  ===============  ===============  ============= 
 Balance 31 May 
  2020                          422         1,590                   1              261            1,923          4,197 
                  =================  ============  ==================  ===============  ===============  ============= 
 

Consolidated balance sheet

at 31 May 2020 (Unaudited)

 
                                           Half year   Half year   Full year 
                                            ended 31    ended 31    ended 30 
                                            May 2020    May 2019    Nov 2019 
                                          ==========  ==========  ========== 
                                   Notes     GBP'000     GBP'000     GBP'000 
 Assets 
 Non-current assets 
  Intangible fixed assets                        388         318         394 
  Property, plant and equipment                  245         338         237 
  Right-of-use assets                  3         409           -           - 
  Investment in joint venture                     15           -           - 
  Deferred tax assets                             12           9          12 
                                          ==========  ==========  ========== 
                                               1,069         665         643 
                                          ==========  ==========  ========== 
 
 Current assets 
  Inventories                                  2,358       2,459       2,530 
  Trade and other receivables                  1,461       1,542       1,758 
  Cash and cash equivalents                      723         674         734 
                                          ==========  ==========  ========== 
                                               4,542       4,675       5,022 
 Liabilities 
 Current liabilities 
  Trade and other payables                     (765)       (988)     (1,280) 
  Lease liabilities                    3       (419)           -           - 
  Current tax liabilities                          -           -           - 
                                          ==========  ==========  ========== 
                                             (1,184)       (988)     (1,280) 
 
 Net current assets                            3,358       3,687       3,742 
                                          ==========  ==========  ========== 
 
 Non-current liabilities 
  Retirement benefit liability                 (221)       (207)       (212) 
  Deferred tax liabilities                       (9)         (6)         (9) 
                                               (230)       (213)       (221) 
 
 Net assets                                    4,197       4,139       4,164 
                                          ==========  ==========  ========== 
 
 Shareholders' equity 
  Share capital                                  422         422         422 
  Share premium account                        1,590       1,590       1,590 
  Capital redemption reserve                       1           1           1 
  Retained earnings                            1,923       1,898       2,023 
  Cumulative translation 
   adjustment                                    261         228         128 
                                          ==========  ==========  ========== 
 Equity attributable to 
  the shareholders of the 
  parent                                       4,197       4,139       4,164 
 
 
 

Consolidated cash flow statement

for the half year ended 31 May 2020 (Unaudited)

 
                                             Half year   Half year   Full year 
                                              ended 31    ended 31    ended 30 
                                              May 2020    May 2019    Nov 2019 
                                            ==========  ==========  ========== 
                                               GBP'000     GBP'000     GBP'000 
 Cash flows from operating activities 
  (Loss)/ profit before tax from 
   continuing operations                          (90)          20         150 
  Share-based payment charge                         -           -           4 
  Depreciation                                     150          76          74 
  Decrease in inventories                          261         375         237 
  (Increase)/ decrease in trade 
   and other receivables                          (75)         104       (140) 
  (Decrease)/ increase in trade 
   and other payables                            (139)       (221)          92 
  Interest expense/ (credit)                         6        (14)         (6) 
 
  Cash generated from operations                   113         340         411 
 
  Interest paid                                    (6)           -         (8) 
  Net cash generated from operations               107         340         403 
                                            ==========  ==========  ========== 
 
 Cash flows from investing activities 
  Purchase of property, plant, and 
   equipment                                      (21)        (57)        (42) 
  Purchase of ROU assets                         (514)           -           - 
  Proceeds from sale of property, 
   plant, and equipment                              -           -           1 
  Investment in joint venture                     (15)           -           - 
 
  Net cash used in investing activities          (550)        (57)        (41) 
                                            ==========  ==========  ========== 
 
 Cash flows from financing activities 
  Equity dividends paid                              -        (21)        (32) 
  Ordinary shares issued                             -           6           6 
  Proceeds of lease agreements                     524           -           - 
  Lease payments                                 (116)           -           - 
 
  Net cash used in financing activities            408        (15)        (26) 
                                            ==========  ==========  ========== 
 
 Net change in cash and cash equivalents          (35)         268         336 
 
  Cash and cash equivalents at start 
   of period                                       734         403         403 
  Effect of foreign exchange rates                  24           3         (5) 
 
 Cash and cash equivalents at end 
  of period                                        723         674         734 
                                            ==========  ==========  ========== 
 
 

Notes

   1.            General information 

Holders Technology plc is incorporated in the United Kingdom under the Companies Act 2006. The principal activity of the group is to provide specialised materials, components and solutions to the electronics and lighting industries.

   2.            Basis of preparation 

The condensed consolidated half year financial statements have been prepared in accordance with the AIM Rules for Companies and prepared on a basis consistent with International Financial Reporting Standards ("IFRS") as adopted by the EU and the accounting policies set out in the group's financial statements for the year ended 30 November 2019.

The half year financial statements are unaudited and include all adjustments which management considers necessary for a fair presentation of the group's financial position, operating results and cash flows for the 6-month periods ended 31 May 2019 and 31 May 2020.

The half year financial statements do not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. A copy of the group's financial statements for the year ended 30 November 2019 prepared in accordance with IFRS as adopted by the EU has been filed with the Registrar of Companies. The auditors' report on those financial statements was not qualified and did not contain statements under s498(2) of s498(3) of the Companies Act 2006.

As permitted, the group has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these half year financial statements and therefore the half year financial information is not in full compliance with IFRS.

The preparation of half year financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income, and expenses. Actual results may differ from these estimates.

These half year financial statements have been prepared under the historical cost convention.

The board of Holders Technology plc approved this half yearly report on 20 August 2020.

   3.           IFRS 16 Leases 

The half year statements include the impact of IFRS 16 "Leases" for the first time. The group has adopted IFRS 16 retrospectively from 1 January 2019, but has not restated comparatives for the 2019 periods, under the transitional provisions in the standard. The reclassifications and adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 December 2020.

On adoption of IFRS 16, the group recognised lease liabilities in relation to leases which had previously been classified as operating leases under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019.

Right of use ("ROU") assets and lease liabilities were recognised as follows:

 
                                          PCB       LCS      Total 
                                        GBP'000   GBP'000   GBP'000 
                                       ========  ========  ======== 
 
 At 1 December 
  2019 
 ROU assets           Property              279         -       279 
  Equipment                                 243         -       243 
  Motor vehicles                              -         7         7 
                                       ========  ========  ======== 
  Total                                     522         7       529 
 Lease liabilities                          534         5       539 
 
 At 31 May 2020 
 ROU assets           Property              186         -       186 
  Equipment                                 221         -       221 
  Motor vehicles                              -         2         2 
                                       ========  ========  ======== 
  Total                                     407         2       409 
 Lease liabilities                          417         2       419 
                                       ========  ========  ======== 
 

As a result of the above adjustments, retained reserves at 1.12.19 were reduced by GBP10,000.

The impact on the 6-month period to 31 May 2020 was a credit to administrative expenses of GBP6,000 (all PCB segment), and a charge to interest of the same amount.

   4.          Segmental information 

Management currently identifies two operating segments:

   1.    PCB distributes materials, equipment and supplies to the PCB industry. 

2. LCS provides lighting and control solutions to the lighting market and commercial buildings sector.

Analysis by operating segment for the half year ended 31 May

 
                           PCB                 LCS            Central Costs           Total 
                       2020      2019      2020      2019      2020      2019      2020      2019 
                    GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000   GBP'000 
                   ========  ========  ========  ========  ========  ========  ========  ======== 
 
 Revenue              4,157     4,291     1,170     1,737         -         -     5,327     6,028 
 Cost of sales        3,189     3,324       740     1,125         -         -     3,929     4,449 
                   ========  ========  ========  ========  ========  ========  ========  ======== 
 Gross Profit           968       967       430       612         -         -     1,398     1,579 
 Distribution 
  costs                 164       159        22        40         -         -       186       199 
 Administration 
  costs                 680       778       582       541        34        52     1,296     1,371 
                   ========  ========  ========  ========  ========  ========  ========  ======== 
 Segment Profit/ 
  (Loss)                124        30     (174)        31      (34)      (52)      (84)         9 
                   ========  ========  ========  ========  ========  ========  ========  ======== 
 

5. The tax provision for the six months ended 31 May 2020 is calculated based on the tax rates applicable in the country in which each company operates.

6. A final dividend of 0.25p per share on the total issued share capital of 4,224,164 10p ordinary shares was paid on 23 June 2020 in respect of the year ended 30 November 2019.

An interim dividend payment of 0.25p per share (2019: 0.25p per share) will be payable on 6 October 2020 to shareholders on the register at 11 September 2020. The shares will go ex-dividend on 10 September 2020. The interim dividend had not been approved by the board at 31 May 2020 and accordingly, has not been included as a liability as at that date.

7. The basic earnings per share for continuing operations are based on the loss for the period of GBP90,000 (2019: profit GBP49,000) and on 4,224,164 ordinary shares (2019: 4,172,759), the weighted average number of shares in issue during the period. Diluted earnings per share for continuing operations are based on 4,224,164 ordinary shares (2019: 4,194,313), being the weighted average number of ordinary shares after an adjustment of nil shares (2019: 21,554 shares) in relation to share options.

8. A copy of this half yearly report is being sent to shareholders and is available for inspection at the company's offices at Holders Technology (UK) Ltd., Units 1-4, Block 9, Tweedbank Industrial Estate, Galashiels TD1 3RS and via its website www.holdersgroup.com .

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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