Holders Technology PLC – HDT – Half-year Report

Holders Technology PLC – HDT – Half-year Report

Holders Technology, (AIM: HDT), is pleased to announce its unaudited half year results for the six months ended 31 May 2021.

 

Highlights

 

Holders Technology supplies specialty laminates and materials for printed circuit board manufacturers ("PCB") and operates as a lighting and control solutions ("LCS") provider.

 

Unaudited results for the half year ended 31 May 2021 are summarised as follows:

 

 

2021

2020

£'000

£'000

Revenue

PCB

3,798

4,157

LCS

1,991

1,170

Total

5,789

5,327

Gross profit

1,718

1,398

Margins

29.7%

26.2%

Overheads

1,616

1,482

Operating profit

102

(84)

Finance expense

(10)

(6)

Income from joint ventures

12

-

Profit before tax

104

(90)

Taxation

-

-

Profit after tax

104

(90)

Earnings per share

2.46p

(2.13p)

Interim dividend per share

0.50p

0.25p

Net assets per share

95p

99p

 

 

 

Half year ended 31 May 2021

 

Following a very challenging time in the last financial year, I am pleased to report that revenue has increased in the half year to 31 May 2021, and that the Group has returned to profitability.  The improving economic environment has affected both business segments in different ways.  Details of this are set out below.

 

Group revenue increased by 8.7% to £5.8m (H1 2020: £5.3m), gross margins increased from 26.2% to 29.7%, and pre-tax profit was £104,000 (H1 2020: loss of £90,000).  

 

PCB

 

As the global economy returned to growth, the PCB industry experienced significant instability, with widespread raw material shortages and marked cost increases both for goods and freight.  PCB sales in the period decreased by 8.6% compared to the same period in 2020, from £4,157,000 to £3,798,000. PCB gross margins, however, increased by 2.2% to 25.5%.  Administration expenses were similar to the previous year in value terms, although as a percentage of sales they increased from 16.4% to 17.8%.  Overall, PCB activities recorded a pre-tax profit of £134,000 (H1 2020: profit of £124,000).

 

On 24 August 2021 we announced that our UK and Germany operating subsidiaries had conditionally agreed to sell certain PCB assets to the Ventec International Group for a cash consideration of c. £1,600,000.  The sale proceeds will be used for investment in the continuing PCB and LCS segments and for general working capital purposes.

 

LCS

 

The LCS divisions recovered strongly in 2021 as the economy improved and building projects resumed: revenue increased by 70.2% overall to £1,991,000 (2020: £1,170,000).  Margins improved from 36.8% to 37.7%, and overheads as a percentage of sales fell from 49.7% to 32.3%.  The overall result for the LCS divisions was a profit of £53,000 (H1 2020: loss of £174,000). 

 

The two LCS joint ventures, Holders Technology Austria, and Holders Technology Data Analytics, made further progress during the period and together contributed £12,000 profit (H1 2020: nil profit because both joint ventures commenced trading in H2 2020).  

 

Cash and Debt

 

Group cash at the period end was £1,277,000 (H1 2020: £723,000).  Other than lease liabilities, the company has no debt. 

 

Outlook

 

The outlook for the second half of the year is encouraging, although there is still a level of uncertainty regarding global supply chains.  Holders continues to expand its product and services portfolio, as well as investing in people and additional technology to support this expansion.  The company also seeks additional complementary revenue streams when opportunities arise. Its ability to do this will be enhanced by the asset disposal outlined above.

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