Holders Technology plc Audited results

Holders Technology plc announces its audited results for the year ended 30 November 2011.

Holders Technology’s Printed Circuit Board (“PCB”) divisions overall had strong growth in the first half, then contraction in the second half. The lighting and LED businesses grew throughout the year, albeit from a lower base. Holders Technology recorded the following results:

•  Revenue for the year grew 20% to £19.6m (2010: £16.3m)
•  LED revenue grew 317% to £3.2m
•  Gross profit of £4.5m (2010: £4.2m)
•  Operating profit of £0.4m (2010: £0.5m profit)
•  Proposed final dividend of 3.25p (2010: 3.25p)

  
Chairman’s statement
In my statement accompanying the half year results for the year ending 30th November 2011 I was able to say that the strong growth which we had seen in our PCB business in the preceding year had continued, particularly in our German operations. This position changed very significantly in the second half of the year adversely impacting our PCB operations in mainland Europe.

The positive points regarding our PCB operations were that we continued to see the benefits of our extended and renewed product range which enabled us to reduce the tendency for margins to come under severe pressure during times of turnover decline.

In periods of great economic uncertainty it is inevitable that reductions in end user demand will be magnified by a tendency for our customers, their suppliers, to de-stock, this was the case in the second half of the year. We do not believe that we have lost ground to competitors in the PCB markets which we serve.

The growth in total turnover which the Group saw in the year to 30th November 2011 was due to the LED sector of the Group’s business. Our UK LED activities, being more established, made the greatest contribution to this growth but in the closing months of the year our European operations, benefiting from the infrastructure investment we have made, began to make significant progress.

The year overall was a financially testing one for the Group. The strong turnover growth achieved in our new LED business required significant investment in stock and other working capital but our traditional financial strength enabled us to accommodate these requirements despite profitability being constrained.

It was encouraging that, in addition to extending our LED infrastructure to serve the European market, we were also successful in expanding the range of products we are able to offer. This enhanced range was augmented by a number of customised modules tailored to selected product markets. Our ability to utilise assembly services from our other various facilities materially assisted in this process.

The strategy we have pursued in the PCB market of seeking to offer a comprehensive service covering both high volume commodity products and more specialist niche products, has enabled us successfully to weather the cyclical swings in that business. While applying the same general principles to our LED activities we will also heighten our concentration on providing complete lighting solutions to selected industrial and commercial segments of the market.

As in previous years I would like to record the Board’s thanks to all of our employees who have responded well to the challenges which the last year gave rise to; we value their support. The year saw Paul Geraghty join the Board as Financial Director. I am pleased to be able to report that Jim Shawyer, who held that post for eleven years, has agreed to continue as a consultant to the Group.

The current problems in the Euro area coupled with an uncertain UK economy and the volatility of exchange rates makes the task of predicting the outcome for the current year particularly difficult. The opening months of the current financial year have seen a marked decline in our PCB business but, as a Group, we have the benefit of considerable experience in weathering downturns in the PCB industry by balancing the need to preserve revenues whilst strictly controlling costs and this we are continuing to do.

In contrast to the PCB market, the LED market continues to experience rapid growth. To ensure that we have the capability to serve our defined areas of this market we will, in the current year, continue to make significant further investments designed to ensure we are able to build a secure platform for sustained growth in future years. The company foresees the current year as one of both significant challenge and great opportunity.