AIM-listed Titon Holdings, a manufacturer and supplier of ventilation systems and window and door hardware, reported solid interim results on 13 May. The company's share price has barely moved since then, which is surprising given that smaller companies have often attracted interest on the back of similar reassuring news in recent months. Looking ahead, the company is expecting the UK economy to rebound strongly as lockdowns ease.
The AIM-listed company has developed a range of additives, concentrates and master-batches which are marketed under its d2p trademark. These can be incorporated into products to provide protection against microbes, insects and rodents, as well as against fire. Other d2p products include odour, moisture and ethylene adsorbers and other food-preserving technologies. Anti-microbial household gloves and toothbrushes are already being produced and other d2p finished products are being developed for retail sale. A biodegradable plastic technology, which helps tackle the problem of microplastics by turning ordinary plastic into biodegradable materials after use, continues to be developed and the technology is branded d2w. This means a plastic can be bioassimilated in the open environment in a similar way to a leaf. In some countries, such as Saudi Arabia, Jordan, Bahrain and the UAE, oxo-biodegradable plastic is mandatory. The d2Detector, a portable device which analyses plastics and detects counterfeit products, has also been developed and d2t tagging and tracer technology is available for further security.
Final results for 2020 were released at the end of March. Group revenues were £9.77m (2019: £8.22m) and gross profit £4.11m (2019: £3.78m). The reported loss before tax was £0.44m (2019: £0.70m) and basic loss per share 0.19p (2019: 0.41p). Cash used in operations increased to £1.44m (2019: £0.73m) but net current assets improved to £3.63m (2019: £2.85m). Net cash was £0.47m as at 31 December 2020 versus £0.88m a year earlier.
The company is taking legal action against the Commission, Parliament and Council of the EU. All costs of preparing the case have already been paid and any significant further costs would only be incurred if the action went to trial. An update was anticipated from the company after 14 April, once its legal team has evaluated the defences, so news on this could come at any time. Regardless of the outcome, this issue is a distraction and clarity is likely to be welcomed by the market. The company has a lot of potential and is poised to move into profitability if revenues can be driven modestly higher. Our share tip is SPECULATIVE BUY.
Brought to you by City Confidential
All research on the website has been prepared and issued by cityconfidential for publication in the United Kingdom. All information used in the publication of this research, has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness. Opinions contained in this research represent those of the research department of brokerlink at the time of publication. The research on this website is intended for professional advisors in the United Kingdom for use in their role as advisors. It is not intended for private individuals or investors. This is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Research is provided for information purposes only and should not be construed as an offer or solicitation for investment. This research is non-objective. cityconfidential does not conduct investment business and as such does not hold any positions in the securities mentioned in this report. However its directors, officers, employees and contractors may have a position in any or related securities. cityconfidential may perform services or solicit business from any of the companies mentioned in this research. The value of securities mentioned can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this research. Past performance is not necessarily a guide to future performance.
cityconfidential is owned by Independent Financial Publications, which is authorised and regulated by the Financial Services Authority.