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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Titon Holdings Plc | LSE:TON | London | Ordinary Share | GB0008941402 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 85.00 | 80.00 | 90.00 | 85.00 | 85.00 | 85.00 | 10,020 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Manufacturing Industries,nec | 22.33M | -686k | -0.0610 | -13.93 | 9.56M |
From Apr 2019 to Apr 2024
TIDMTON
RNS Number : 5777N
Titon Holdings PLC
10 May 2018
Titon Holdings PLC LEI: 213800ZHXS8G27RM1DD7
Interim results for the six months to 31 March 2018
Titon Holdings Plc, a leading international manufacturer and supplier of ventilation systems and window and door hardware, today announces its Interim Results for the six months ended 31 March 2018.
TITON DELIVERS DOUBLE DIGIT PROFIT GROWTH IN HALF YEAR
Financial Results
Hot Features
Premium
2018 2017 % Change
Net revenue GBP14.5m GBP14.0m +3
EBITDA GBP1.29m GBP1.17m +11
EBIT(1) GBP0.95m GBP0.85m +11
Profit before tax GBP1.34m GBP1.18m +13
Earnings per share
(EPS) 8.64p 6.09p +42
Dividend per share
(DPS) 1.75p 1.50p +17
Financial highlights
-- Group net revenue rose 3% to GBP14.5 million (2017: GBP14.0 million) or 5% on a constant currency basis
-- EBITDA increased 11% to GBP1.29 million (2017: GBP1.17 million)
-- Profit before tax of GBP1.34 million, up 13% (2017: GBP1.18 million) or 16% on a constant currency basis
-- Earnings per share (EPS) rose 42% to 8.64 pence (2017: 6.01 pence) -- 17% increase in the interim dividend to 1.75 pence per share (2017: 1.50 pence)
-- Net cash of GBP2.74 million (2017: GBP2.71 million); and a Quick Ratio(2) of 1.93 (2017: 1.94)
-- Return on net assets (RONA) (3) was 18.9% (2017: 19.1%) with Asset Turn(3) of 2.1x (2017: 2.3x)
Operational highlights
-- South Korea's net profit after tax contribution rose by 22% to GBP0.9 million and it is the Group's largest income generator on this basis; and in Q1 of calendar 2018, South Korean GDP grew by 2.8%
-- The UK saw its contribution rise significantly as there was no repeat of the previous year's business closure costs
-- Window and door hardware in the UK produced a good result as both revenue and profit rose
-- A new fully accredited Passivhaus mechanical ventilation-with-heat-recovery unit has been introduced to the UK and continental European markets
Executive Chairman Keith Ritchie said: "It was another very good six months for Titon with a 13% increase in profit before tax to GBP1.34 million. The interim dividend was also increased by 17%.
"In South Korea, the geopolitical climate has taken an extraordinarily positive shift with the recent summit between South Korean President Moon Jae-in and North Korea's Leader Kim Jong-un. This was unthinkable even at the turn of the year and has been welcomed in Asia and around the Globe. It remains to be seen whether full de-nuclearisation in North Korea will follow, but this new openness, and a prospective meeting between Donald Trump and Kim Jong-un, is very good news. In any event, South Korea is an extraordinarily robust economy. GDP grew at 2.9% last year and FocusEconomics is forecasting growth of 2.9% in both 2018 and 2019.
"In the UK we expect stronger seasonal growth in demand for our products through the summer. UK GDP was impacted by the weather in the first quarter of the calendar year and, while it is set to grow below trend, consensus forecasts put GDP at between +1 and 2% this year and next. At the same time, while the pace of UK housebuilding activity is expected to slow, Experian is forecasting average volume growth of more than 3% per annum through020. This is despite continued uncertainty surrounding the Brexit negotiations and the absence of even a transitional agreement.
"Titon has a unique international spread of markets, particularly given its relative scale. We make good products, some of them prosaic, some truly innovative. Backing this up is a traditionally strong balance sheet and a team that I am proud of. I look forward to further progress in the second half of the year in line with market expectations".
For further information please contact Keith Ritchie: +44 (0) 1206 713821
Titon Holdings PLC
Interim results for the six months to 31 March 2018
Chairman's statement
It was a very good half year result for Titon with revenue of GBP14.5 million and a 13% increase in profit before tax to GBP1.34 million. The interim dividend was also increased by 17% with cover at 4.1 times.
Income Statement
In the six months to 31 March 2018, Titon's net revenue (which excludes inter-segment activity) rose 3% to GBP14.5 million (2017: GBP14.0 million). On a constant currency basis, however, the increase is 5%.
The gross margin dipped from 28.4% to 26.2% due largely to poor trading in the US. Meantime, EBITDA was 11% higher at GBP1.29 million (2017: GBP1.17 million). Earnings before interest and tax (EBIT) or operating profit also rose 11% to GBP0.95 million (2017: GBP0.85 million) and the operating margin increased from 6.1% to 6.6%. Net interest contributed GBP9,000 (2017: GBP7,000) while the share of profits from the Group's associate rose 18% to GBP379,000 (2017: GBP320,000) resulting in profit before tax of GBP1.34 million, which was an increase of 13% (2017: GBP1.18 million) or, on a constant currency basis, the rise was 16%.
EPS were a very significant 42% higher at 8.64 pence (2017: 6.09 pence) which was driven by a much lower effective rate of tax i.e. 24% down to 10% which was on account of trading losses in the US.
Finally, the non-controlling interests' or minorities' deduction increased 9% from GBP237,000 to GBP258,000 which reflects the higher contribution from Titon Korea, 51% owned.
An Interim Dividend in respect of the six months ended 31 March 2018 of 1.75 pence per share (2017: 1.50 pence) was approved by the Directors of Titon Holdings Plc on 9 May 2018. The Interim Dividend is payable on 21 June 2018 to shareholders on the Register at 18 May 2018. The ex-dividend date is 17 May 2018.
Balance sheet and cash flows
Net assets including non-controlling interests rose 11% or GBP1.8 million to GBP17.4 million (2017: GBP15,6 million) with net cash at GBP2.74 million (2017: GBP2.71 million) which is equivalent to 15.7% of net assets (2017: 17.3%). Net cash at the end of the fiscal year to 30 September 2017 was GBP3.3 million.
In the half year, there was a GBP277,000 outflow at the 'cash generated from operations' line (2017: inflow of GBP995,000). This was driven by a seasonal spike in working capital, largely debtors at GBP1.24 million. In mitigation, capital expenditure was lower but dividends were 20% higher. This meant that between 30 September 2017 and 31 March 2018, there was a net cash outflow of GBP534,000 (2017: inflow of GBP267,000).
Net current assets were GBP11.0 million (2017: GBP9.6 million) with a Quick Ratio(2) of 1.93 (2017: 1.94).
RONA(3) was 18.9% (2017: 19.1%) with Asset Turn at 2.1 (2017: 2.3).
Operations
In South Korea, Titon's subsidiary company, Titon Korea (51% owned), manufactures natural window ventilation products and is the national market leader. In the half year, it increased revenue by 25% to GBP5.7 million. A significant shortage of labour, combined with a government policy of aggressively increasing minimum wage rates, has led to a substantial increase in labour costs and has been the main factor in limiting Titon Korea's profit growth to 7% at GBP635,000 for the six months (2017: GBP593,000). Net Margin remained very healthy at 11.2% (2017:13.1%).
The Group's associate company, Browntech Sales Co. Limited ('BTS') also operates exclusively in South Korea and it generated an 18% increase in its contribution in the half year to GBP379,000 (2017: GBP320,000), which is the entire Associate contribution in the Group Income Statement. In terms of activity, BTS distributes ventilation products in South Korea as well as investing and developing in the domestic residential real estate market.
The combined contribution to Group Net profit after Taxation by the two South Korean companies was up 13% to GBP0.88 million (2017: GBP0.78 million). South Korea remains the most profitable area of operation for the Group, generating 74% of Group net profit after tax in the period (2017: 87%).
Page 1
Titon Holdings PLC
Interim results for the six months to 31 March 2018
Operations (continued)
Revenue derived from the UK was flat at GBP7.5 million (2017: GBP7.5 million) which reflects the absence of the closure costs of the fabrication venture. The UK's segment contribution, however, increased markedly to almost GBP500,000 which is a 32% rise year-on-year after the exit costs are added back to the corresponding half year. Margins also rose, on the same basis, from 4.9 to 6.5%.
At home, our window and door hardware business produced a good result in the half year as both sales and profit rose. We have been pleased, too, with rising demand for a number of the Group's new trickle vents. In addition, sales of both Titon manufactured and bought-in hardware products have continued to grow. Elsewhere, sales in our Ventilation Systems Division edged up in the half year. Several new sales staff have also been added here as we expand our coverage throughout the UK. Export sales of our Ventilation Systems products, however, were not as strong in the first six months of the fiscal year as we had anticipated. In response, we have developed products for cold climates in Eastern Europe, which will allow us to broaden our market coverage in this region. We also continue to expand our range of mechanical ventilation products for UK and European markets and have also just introduced a fully accredited Passivhaus mechanical-ventilation-with heat-recovery unit for highly energy efficient homes, which distinguishes Titon from a number of its competitors here.
Finally, in the US, revenue was sharply lower in the period which led to a trading loss for our US based subsidiary, Titon Inc., and which compares with a profit in the period ended 31 March 2017. However, the region made a positive contribution because its products are manufactured at our UK facility. After a number of years of rising sales in the US, this is a disappointing result. There has been a general market slowdown in one of our core markets in Washington State as well as the completion of several profitable contracts in other areas.
Employees
In my outlook statement, I say that we have "a team that I am proud of"; and we do. Without them, we would not have the high quality, diversified business that is Titon. To all of them, I offer my and the Board's sincere thanks.
Investors
We continue to work with Hardman & Co., the corporate research house, to expand our presence in the private investor world. Hardman writes and distributes, in my view, highly cogent research on the Group. This has had a very positive effect on the Group's share price.
Since January this year, MiFID II (Markets in Financial Instruments Directive, Number 2) has been implemented across 17 EU countries including the UK. Essentially, it means that investment banks are now legally bound to charge fund managers for investment research. As a result of this Directive, it was predicted that less notes would be written on many companies particularly the small and middle-sized such as Titon. This prediction has proved to be correct and, in fact, the coverage of small market capitalisation companies is in steeper decline than expected before the change. The corporate research sector, including Hardman & Co., is not impacted by MiFID II.
Finally, I reiterate Titon's dividend reinvestment programme. This is a straight-forward and cost-effective way to increase a shareholding in Titon. It can be achieved by visiting the portal for our Registrars, Link Market Services Limited.
Outlook
It was another very good six months for Titon with a 13% increase in profit before tax to GBP1.34 million. The interim dividend was also increased by 17%.
In South Korea, the geopolitical climate has taken an extraordinarily positive shift with the recent summit between South Korean President Moon Jae-in and North Korea's Leader Kim Jong-un. This was unthinkable even at the turn of the year and has been welcomed in Asia and around the Globe. It remains to be seen whether full de-nuclearisation in North Korea will follow, but this new openness, and a prospective meeting between Donald Trump and Kim Jong-un, is very good news. In any event, South Korea is an extraordinarily robust economy. GDP grew at 2.9% last year and FocusEconomics is forecasting growth of 2.9% in both 2018 and 2019.
Page 2
Titon Holdings PLC
Interim results for the six months to 31 March 2018
Outlook (continued)
In the UK we expect stronger seasonal growth in demand for our products through the summer. UK GDP was impacted by the weather in the first quarter of the calendar year and, while it is set to grow below trend, consensus forecasts put GDP at between +1 and 2% this year and next. At the same time, while the pace of UK housebuilding activity is expected to slow, Experian is forecasting average volume growth of more than 3% per annum through 2020. This is despite continued uncertainty surrounding the Brexit negotiations and the absence of even a transitional agreement.
Titon has a unique international spread of markets, particularly given its relative scale. We make good products, some of them prosaic, some truly innovative. Backing this up, is a traditionally strong balance sheet and a team that I am proud of. I look forward to further progress in the second half of the year in line with market expectations".
Principal risk and uncertainties
The key financial and non-financial risks faced by the Group are disclosed in the Group's Annual Report and Accounts for the year ended 30 September 2017 within the Strategic Report (page 6) available at www.titonholdings.com The Board considers that these remain a current reflection of the risks and uncertainties facing the business. The Board also considers that it is appropriate to adopt the going concern basis of accounting in preparing these financial statements and has not identified any material uncertainties which would prevent us so doing.
Responsibility Statement
The Directors confirm that, to the best of their knowledge, this condensed set of consolidated financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and that this Interim Report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.
The Directors of Titon Holdings Plc are listed on page 15 of this document. A list of current directors is maintained on the Group's website www.titonholdings.com
On behalf of the Board
KA Ritchie
Chairman
9 May 2018
Notes:
(1.) EBIT is shown before the contribution from the Associate.
(2) . The Quick Ratio measures liquidity and is calculated by dividing Current Assets-less-inventories by Current Liabilities
(3) RONA is calculated by dividing Profit before tax by Net Assets including non-controlling interests, net of cash and intangibles and here it is an annualised number; Asset Turn is calculated by dividing the group's net revenue by Net Assets as defined above.
Page 3
Titon Holdings Plc
Consolidated Interim Income Statement
for the six months ended 31 March 2018
6 months 6 months Year to
to 31.3.18 to 31.3.17 30.9.17
unaudited unaudited audited
Note GBP'000 GBP'000 GBP'000
Revenue 2 14,485 14,012 28,011
Cost of sales 1 (10,686) (10,032) (20,746)
---------------------------------------- ---- ---------- ---------- --------
Gross profit 3,799 3,980 7,265
Distribution costs (328) (488) (717)
Administrative expenses (2,278) (2,361) (4,249)
Research and development expenses 1 (247) (282) (467)
Other income 3 5 18
---------------------------------------- ---- ---------- ---------- --------
Operating profit 949 854 1,850
Finance income 9 7 10
Share of profits from associates 379 320 633
---------------------------------------- ---- ---------- ---------- --------
Profit before tax 1,337 1,181 2,493
Income tax expense 3 (132) (281) (269)
Profit after income tax 1,205 900 2,224
---------------------------------------- ---- ---------- ---------- --------
Attributable to:
Equity holders of the parent 947 663 1,804
Non-controlling interest 258 237 420
---------------------------------------- ---- ---------- ---------- --------
Profit for the period 1,205 900 2,224
---------------------------------------- ---- ---------- ---------- --------
Earnings per share attributed to equity
holders of the parent:
Basic 5 8.64p 6.09p 16.55p
Diluted 5 8.53p 5.99p 16.24p
Consolidated Interim Statement of Comprehensive Income
for the six months ended 31 March 2018
6 months 6 months Year to
to 31.3.18 to 31.3.17 30.9.17
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Profit for the period 1,205 900 2,224
Other comprehensive income - items
which may be reclassified to profit
or loss in subsequent periods:
Exchange difference on re-translation
of net assets of overseas operations 195 143 (443)
-------------------------------------- ---------- ---------- -------
Total comprehensive income for the
period 1,400 1,043 1,781
Attributable to:
Equity holders of the parent 1,082 757 1,509
Non-controlling interest 318 286 272
-------------------------------------- ---------- ---------- -------
1,400 1,043 1,781
-------------------------------------- ---------- ---------- -------
The notes on pages 8 to 15 form an integral part of this condensed interim information.
Page 4
Titon Holdings Plc
Consolidated Statement of Financial Position
at 31 March 2018
31.3.18 31.3.17 30.9.17
unaudited unaudited audited
Note GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 6 3,418 3,576 3,548
Intangible assets 530 529 638
Investments in associates 2,411 1,824 1,966
Deferred tax 123 154 116
Total non-current assets 6,482 6,083 6,268
Inventories 5,721 4,976 4,670
Trade and other receivables 8,103 6,772 6,644
Corporation tax 79 - 79
Cash and cash equivalents 2,735 2,705 3,269
--------- --------- ------------------
Total current assets 16,638 14,453 14,662
Total Assets 23,120 20,536 20,930
------------------------------ ------------- --------- --------- ------------------
Liabilities
Deferred tax 51 40 39
Total non-current liabilities 51 40 39
Trade and other payables 5,436 4,706 4,627
Corporation tax 235 176 63
Total current liabilities 5,671 4,882 4,690
Total Liabilities 5,722 4,922 4,729
------------------------------ ------------- --------- --------- ------------------
Equity
Share capital 1,113 1,095 1,098
Share premium reserve 1,049 975 985
Capital redemption reserve 56 56 56
Treasury shares (27) (27) (27)
Translation reserve 351 605 216
Retained earnings 12,552 10,910 11,887
------------------------------ ------------- --------- --------- ------------------
Total Equity attributable
to the equity holders
of the parent 15,094 13,614 14,215
Non-controlling Interest 2,304 2,000 1,986
Total Equity 17,398 15,614 16,201
Total Liabilities and
Equity 23,120 20,536 20,930
------------------------------ ------------- --------- --------- ------------------
The notes on pages 8 to 15 form an integral part of this condensed interim information.
Page 5
Titon Holdings Plc
Consolidated Interim Statement of Changes in Equity
at 31 March 2018
Share Share Capital Translation Treasury Retained Total Non- Total
capital premium redemption reserve Shares earnings controlling Equity
reserve reserve interest
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2016 1,091 950 56 511 (27) 10,479 13,060 1,714 14,774
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Translation
differences
on overseas
operations - - - 94 - - 94 49 143
Profit for the
period - - - - - 663 663 237 900
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Total
comprehensive
income for
the
period - - - 94 - 663 757 286 1,043
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Dividends paid - - - - - (245) (245) - (245)
Share-based
payment
expense - - - - - 13 13 - 13
Ordinary
shares
issued 4 25 - - - - 29 - 29
At 31 March
2017 1,095 975 56 605 (27) 10,910 13,614 2,000 15,614
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Translation
differences
on overseas
operations - - - (389) - - (389) (197) (586)
Profit for the
period - - - - - 1,141 1,141 183 1,324
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Total
comprehensive
income for
the
period - - - (389) - 1,141 752 (14) 738
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Dividends paid - - - - - (165) (165) - (165)
Share-based
payment
expense - - - - - 1 1 - 1
Ordinary
shares
issued 3 10 - - - - 13 - 13
At 30
September
2017 1,098 985 56 216 (27) 11,887 14,215 1,986 16,201
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Translation
differences
on overseas
operations - - - 135 - - 135 60 195
Profit for the
period - - - - - 947 947 258 1,205
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Total
comprehensive
income for
the
period - - - 135 - 947 1,082 318 1,400
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
Dividends paid - - - - - (295) (295) - (295)
Share-based
payment
expense - - - - - 13 13 - 13
Ordinary
shares
issued 15 64 - - - - 79 - 79
At 31 March
2018 1,113 1,049 56 351 (27) 12,552 15,094 2,304 17,398
--------------- -------- -------- ----------- ------------ --------- --------- -------- ------------ --------
The notes on pages 8 to 15 form an integral part of this condensed interim information.
Page 6
Titon Holdings Plc
Consolidated Interim Statement of Cash Flows
for the six months ended 31 March 2018
6 months 6 months Year to
to 31.3.18 to 31.3.17 30.9.17
unaudited unaudited audited
Note GBP'000 GBP'000 GBP'000
Cash generated from operating activities
Profit before tax 1,337 1,181 2,493
Depreciation of property, plant
& equipment 233 214 438
Amortisation of intangible assets 112 98 175
Increase in inventories (934) (330) (133)
(Increase) / decrease in receivables (1,235) 24 (161)
Increase / (decrease) in payables
and other current liabilities 597 129 57
Profit on sale of plant & equipment (12) (7) -
Share based payment - equity settled 13 13 14
Interest received (9) (7) (10)
Share of associate's profit (379) (320) (633)
-------
Cash (used) / generated from operations (277) 995 2,240
----------------------------------------- ---- -------------------- ------------------ -------
Income taxes refunded / (paid) 45 (247) (390)
----------------------------------------- ---- -------------------- ------------------ -------
Net cash (used) / generated from
operating activities (232) 748 1,850
----------------------------------------- ---- -------------------- ------------------ -------
Cash flows from investing activities
Purchase of plant & equipment 6 (125) (279) (520)
Purchase of intangible assets (4) - (186)
Proceeds from sale of plant & equipment 34 7 45
Interest received 9 7 10
----------------------------------------- ---- -------------------- ------------------ -------
Net cash used in investing activities (86) (265) (651)
----------------------------------------- ---- -------------------- ------------------ -------
Cash flows from financing activities
Exercise of share options 79 29 42
Dividends paid to equity shareholders 4 (295) (245) (410)
Net cash used in financing activities (216) (216) (368)
----------------------------------------- ---- -------------------- ------------------ -------
Net (decrease) / increase in cash
& cash equivalents (534) 267 831
Cash & cash equivalents at beginning
of the period 3,269 2,438 2,438
----------------------------------------- ---- -------------------- ------------------ -------
Cash & cash equivalents at end of
the period 2,735 2,705 3,269
----------------------------------------- ---- -------------------- ------------------ -------
Cash & cash equivalents comprise:
Cash at bank 2,735 2,705 3,269
Cash & cash equivalents at end of
the period 2,735 2,705 3,269
----------------------------------------- ---- -------------------- ------------------ -------
The notes on pages 8 to 15 form an integral part of this condensed interim information.
Page 7
Notes to the Condensed Consolidated Interim Statements
at 31 March 2018
1 Basis of preparation
Titon Holdings Plc (the 'Company') is a company domiciled in England. The condensed consolidated interim financial statements of the Group for the six months ended 31 March 2018 comprise the Company and its subsidiaries (together referred to as the 'Group').
The IASB has issued revised and updated IFRIC amendments which are effective for later reporting periods. These include IFRS 9, 15 and 16.
Management is commencing work in respect of IFRS 9 to evaluate the impact of certain financial instruments held by its associate and in relation to its methodology for providing credit losses on trade receivables.
The Group has commenced its evaluation of the impact of IFRS 15 and currently expects the impact on the UK business may be limited, but is working with its Korean operations to determine the effect on the timing of revenue recognition in both Titon Korea and the Group's associate, Browntech Sales Co. Ltd.
In respect of IFRS 16 property and vehicle leases are currently being treated as operating leases and the Group believes that there will be a material impact on the Group's financial statements when they are accounted for differently under IFRS 16.
Effective
date
(periods
beginning)
1 January
* IFRS 15 Revenue from Contracts with Customers. IFRS 2018
15 is intended to clarify the principles of revenue
recognition and establish a single framework for
revenue recognition. IFRS 15 supersedes: IAS 11
Construction Contracts, IAS 18 Revenue, IFRIC 13
Customer Loyalty Programmes, IFRIC 15 Agreements for
the Construction of Real Estate, IFRIC 18 Transfers
of Assets from Customers and SIC-31 Revenue-Barter
Transactions Involving Advertising Services. The core
principle is that an entity should recognise revenue
to depict the transfer of promised goods or services
to customers in an amount that reflects the
consideration to which the entity expects to be
entitled in exchange for those goods or services.
1 January
* IFRS 16 Leases. This IFRS sets out the principles for 2019
the recognition, measurement, presentation and
disclosure of leases for both parties to a contract,
i.e. the customer ('lessee') and the supplier
('lessor'). IFRS 16 eliminates and replaces the
classification of leases as either operating leases
or finance leases as is required by IAS 17 and,
instead, introduces a single lessee accounting model.
The amendments are not yet endorsed for use in the EU
as the expected date of endorsement is not yet
determined.
Otherwise, the condensed interim financial statements have been prepared using accounting policies set out in the Report and Accounts 2017 and have been applied consistently to all periods presented in these financial statements. They are in accordance with IAS 34. The six months results for both 31 March 2017 and 2018 have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. The financial information for the year end 30 September 2017 does not constitute the full statutory accounts for that period. The Company's Report and Accounts 2017 have been delivered to the Registrar of Companies. The independent auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
The condensed interim financial statements do not constitute full accounts within the meaning of Section 434 of the Companies Act 2006.
The interim report was approved by the Board and authorised for issue on 9 May 2018. Copies of the interim report will be sent to shareholders in the next few weeks.
This statement is being sent to shareholders, will be available on the Group's website at www.titonholdings.com and from the Company's registered office at 894 The Crescent, Colchester Business Park, Colchester, Essex CO4 9YQ.
Page 8
Notes to the Condensed Consolidated Interim Statements
at 31 March 2018
2 Revenue and segmental information
In identifying its operating segments, management generally follows the Group's reporting lines, which represent the main geographic markets in which the Group operates. The segment reporting below is shown in a manner consistent with the internal reporting provided to the Board, which is the Chief Operating Decision Maker (CODM). These operating segments are monitored and strategic decisions are made on the basis of segment operating results. The Group operates three main business segments which are:
Segment Activities undertaken include:
United Kingdom Sales of passive and powered ventilation products
to house builders, electrical contractors and window
and door manufacturers. In addition to this, it
is a leading supplier of window and door hardware.
South Korea Sales of passive ventilation products to construction
companies.
North America Sales of passive ventilation products to window
and door manufacturers.
All other Sales of passive and powered ventilation products
countries to distributors, window manufacturers and construction
companies
Inter-segment revenue is transacted on an arm's length basis and charged at prevailing market prices for a specific product and market or cost plus where no direct comparative market price is available. Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Research and development entity-wide financial expenses are allocated to the business activities for which R&D is specifically performed. Sales Administration and Other Expenses are currently allocated to operating segments in the Group's reporting to the CODM. Other Expenses include mainly central and parent company overheads relating to group management, the finance function and regulatory requirements.
The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its financial statements.
The total assets for the segments represent the consolidated total assets attributable to these reporting segments. Parent company results and consolidation adjustments reconciling the segmental results and total assets to the consolidated financial statements, are included within the United Kingdom segment figures stated over page.
Page 9
Notes to the Condensed Consolidated Interim Statements
at 31 March 2018
2 Revenue and segmental information (continued)
Operating segment United South North All other Total
Kingdom Korea America countries
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months ended 31 March
2018
Segment revenue 7,457 5,665 330 1,237 14,689
Inter-segment revenue (204) - - - (204)
------------------------------- --------- -------- --------- ----------- --------
Total Revenue 7,253 5,665 330 1,237 14,485
------------------------------- --------- -------- --------- ----------- --------
Segment profit 484 1,015 (77) (85) 1,337
Tax expense (132)
------------------------------- --------- -------- --------- ----------- --------
Profit for the period 1,205
------------------------------- --------- -------- --------- ----------- --------
Depreciation and amortisation 299 46 - - 345
Total assets 12,815 9,965 340 - 23,120
Total assets include:
Investments in associates 2,411 - - - 2,411
Additions to non-current
assets (other than financial
instruments and deferred
tax assets) 129 - - - 129
------------------------------- --------- -------- --------- ----------- --------
The South Korean Segment profit includes the Group's share of the profits from the Associate. One customer accounted for more than 10% of Group revenue and sales to this customer totalled GBP5.66m (included within South East Asia).
IFRS 8 requires entity-wide disclosures to be made about the regions in which it earns its revenues and holds its non-current assets which are shown below.
6 months ended 31 March United Europe North Asia All other Total 2018 Kingdom America regions Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 by entities' country of domicile 8,490 - 330 5,665 - 14,485 by country from which derived 7,005 1,419 330 5,721 10 14,485 ------------------------- --------- -------- --------- -------- ---------- -------- Non-current assets By entities' country of domicile 4,109 - 1 2,372 - 6,482 ------------------------- --------- -------- --------- -------- ---------- --------
Page 10
Notes to the Condensed Consolidated Interim Statements
at 31 March 2018
2 Revenue and segmental information (continued)
Operating segment United South North All other Total
Kingdom Korea America countries
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
6 months ended 31 March
2017
Segment revenue 7,512 4,520 1,047 1,308 14,387
Inter-segment revenue (375) - - - (375)
------------------------------- --------- -------- --------- ----------- --------
Total Revenue 7,137 4,520 1,047 1,308 14,012
------------------------------- --------- -------- --------- ----------- --------
Segment profit (2) 913 261 9 1,181
Tax expense (281)
------------------------------- --------- -------- --------- ----------- --------
Profit for the period 900
------------------------------- --------- -------- --------- ----------- --------
Depreciation and amortisation 278 33 1 - 312
Total assets 12,048 7,906 582 - 20,536
Total assets include:
Investments in associates 1,824 - - - 1,824
Additions to non-current
assets (other than financial
instruments and deferred
tax assets) 255 24 - - 279
------------------------------- --------- -------- --------- ----------- --------
The South Korean segment profit includes the Group's share of the profits from the Associate. One customer accounted for more than 10% of Group revenue and sales to this customer totalled GBP4.52m (included within South East Asia). The United Kingdom segment loss includes GBP370,000 of closure costs.
IFRS 8 requires entity-wide disclosures to be made about the regions in which it earns its revenues and holds its non-current assets which are shown below.
6 months ended United Europe North Asia All other Total 31 March 2017 Kingdom America regions Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 by entities' country of domicile 8,445 - 1,047 4,520 - 14,012 by country from which derived 7,110 1,266 1,047 4,585 4 14,012 ---------------------- --------- -------- --------- -------- ---------- -------- Non-current assets By entities' country of domicile 4,245 - 2 1,836 - 6,083 ---------------------- --------- -------- --------- -------- ---------- --------
Page 11
Notes to the Condensed Consolidated Interim Statements
at 31 March 2018
2 Revenue and segmental information (continued)
Operating segment United South North All other Total
Kingdom Korea America countries
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
12 months ended 30 September
2017
Segment revenue 14,823 9,530 1,781 2,735 28,869
Inter-segment revenue (858) - - - (858)
------------------------------- --------- -------- --------- ----------- --------
Total Revenue 13,965 9,530 1,781 2,735 28,011
------------------------------- --------- -------- --------- ----------- --------
Segment profit 706 1,638 166 (17) 2,493
Tax expense (269)
------------------------------- --------- -------- --------- ----------- --------
Profit for the period 2,224
------------------------------- --------- -------- --------- ----------- --------
Depreciation and amortisation 563 49 1 - 613
Total assets 12,916 7,704 310 - 20,930
Total assets include:
Investments in associates 1,741 - - - 1,741
Additions to non-current
assets (other than financial
instruments and deferred
tax assets) 672 34 - - 706
------------------------------- --------- -------- --------- ----------- --------
The South Korean Segment profit includes the Group's share of the profits from the Associate. Sales to Browntech Sales Co. Ltd (the Group's associate undertaking in South Korea) of GBP9.53m represent 34.0% of Group Revenue. There are no other concentrations of revenue above 10% during the year (see Note 7 - Related party transactions).
IFRS 8 requires entity-wide disclosures to be made about the regions in which it earns its revenues and holds its non-current assets which are shown below.
12 months ended United Europe North Asia All other Total 30 September 2017 Kingdom America regions Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 by entities' country of domicile 16,700 - 1,781 9,530 - 28,011 by country from which derived 13,965 2,565 1,781 9,684 16 28,011 ---------------------- --------- -------- --------- -------- ---------- -------- Non-current assets By entities' country of domicile 4,295 - 1 1,972 - 6,268 ---------------------- --------- -------- --------- -------- ---------- --------
Page 12
Notes to the Condensed Consolidated Interim Statements
at 31 March 2018
3 Tax
6 months 6 months Year to
to 31.3.18 to 31.3.17 30.9.17
Current income tax: GBP'000 GBP'000 GBP'000
Corporation tax expense (127) (219) (249)
Adjustment in respect of prior years - (43) (43)
---------- ---------- -------
(127) (262) (292)
---------- ---------- -------
Deferred tax:
Origination and reversal of temporary
differences (5) (19) 23
Income tax expense (132) (281) (269)
-------------------------------------- ---------- ---------- -------
Tax for the interim period is charged at 13.8% (six months to 31 March 2017: 32.6%) representing the best estimate of the average annual income tax rate for the full financial year.
4 Dividends
An interim dividend in respect of the six months ended 31 March 2018 of 1.75p per share, amounting to a total dividend of GBP192,000 was approved by the Directors of Titon Holdings Plc on 9 May 2018. These consolidated interim statements do not reflect the dividend payable.
The interim dividend will be payable on 21 June 2018 to the shareholders on the register on 18 May 2018. The ex-dividend date is 17 May 2018.
The following dividends have been recognised and paid by the Company:
6 months 6 months Year
to
to 31.3.18 to 31.3.17 30.9.17
Date Pence
Paid per GBP'000 GBP'000 GBP'000
share
Final in respect of the
year end 30.09.16 21.02.17 2.25 - 245 245
Interim in respect of the
year end 30.09.17 22.06.17 1.50 - - 165
Final in respect of the
year end 30.09.17 27.02.18 2.70 295 - -
---------- ---------- ---------
295 245 410
---------- ---------- ---------
Page 13
Notes to the Condensed Consolidated Interim Statements
at 31 March 2018
5 Earnings per ordinary share
Basic earnings per share has been calculated by dividing the profits attributable to shareholders by the weighted average number of ordinary shares in issue during the period, being 10,964,409 (six months ended 31 March 2017: 10,878,695; year ended 30 September 2017: 10,903,394).
Diluted earnings per share has been calculated by dividing the profits attributable to shareholders by the weighted average number of ordinary shares and potential dilutive ordinary shares during the period, being 11,101,308 (six months ended 31 March 2017: 11,077,090; year ended 30 September 2017: 11,111,249).
6 Property, plant and equipment
Additions and disposals
During the six months ended 31 March 2018, the Group acquired assets with a cost of GBP129,000 (six months to 31 March 2017: GBP279,000; year ended 30 September 2017: GBP706,000).
7 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
Transactions between subsidiary companies and the associate company, which is a related party, were as follows:
Sale of goods Amount owed by related
party
6 months 6 months Year 6 months 6 months Year
to 31.3.18 to 31.3.17 to to 31.3.18 to 31.3.17 to
to 30.9.17 to 30.9.17
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Browntech Sales
Co. Ltd 5,665 4,520 9,530 3,413 2,879 2,798
------------ ------------ ------------ ------------ ------------ ------------
There have been no additional significant or unusual related party transactions to those disclosed in the Group's Annual Report for 30 September 2017.
8 Liability statement
Neither the Group nor the Directors accept any liability to any person in relation to the Interim Statement except to the extent that such liability could arise under English Law. Accordingly, any liability to a person who has demonstrated reliance on any untrue or misleading statement or omission shall be determined in accordance with section 90A of the Financial Services and Markets Act 2000.
Page 14
Directors and Advisors
Directors
Executive
KA Ritchie (Chairman)
D A Ruffell (Chief Executive)
T N Anderson
T D Gearey
Non-executive
J N Anderson (Deputy Chairman)
K Sargeant
N C Howlett
Secretary and registered office
D A Ruffell
894 The Crescent
Colchester Business Park
Colchester
Essex CO4 9YQ
COMPANY REGISTRATION NUMBER
1604952 (Registered in England & Wales)
WEBSITE
www.titonholdings.com
auditors
BDO LLP
55 Baker Street
London
W1U 7EU
REGISTRARS AND TRANSFER OFFICE
Link Market Services Ltd
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0LA
Page 15
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QKLFBVEFXBBQ
(END) Dow Jones Newswires
May 10, 2018 02:00 ET (06:00 GMT)
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