TIDMTON
RNS Number : 9417Z
Titon Holdings PLC
19 May 2023
19 May 2023
LEI: 213800ZHXS8G27RM1D97
THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT
QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION FOR THE
PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014
AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018.
Titon Holdings Plc
Unaudited Interim Results for the six months to 31 March 2023
and Investor Presentation via Investor Meet Company
Titon Holdings Plc ("Titon", the "Group" or the "Company"), a
leading international manufacturer and supplier of ventilation
systems and window and door hardware, today announces its unaudited
interim results for the six months ended 31 March 2023 ("H1
2023").
Financial Results
Six months Six months % Change
ended 31 March ended 31 March
2023 2022
Net revenue GBP12.08m GBP11.48m 5.2%
EBITDA GBP0.18m GBP0.28m (35.7)%
Loss before tax GBP0.45m GBP0.25m (80.0)%
Basic loss per share 2.86p 1.46p (96.0)%
Interim dividend per 0.5p 1.5p (66.7)%
share
Cash balance GBP1.61m GBP3.73m (56.8)%
Financial highlights
-- Group net revenue rose by 5.2% due to stronger trading in the
UK and Europe, which was slightly ahead of the Board's
expectations
-- EBITDA was GBP0.18 million (2022: GBP0.28m), reflecting lower
gross margins (26% in H1 2023 against 28% in H1 2022) as the Group
continued to manage labour, material and energy cost inflation
-- Loss before tax of GBP0.45m after depreciation and
amortisation charges of GBP0.49m (H1 2022 loss before tax:
GBP0.25m)
-- Cash balance of GBP1.6m at the end of the period (30
September 2022: GBP1.7m) after the payment of dividends to Titon
shareholders. The balance includes a receipt of a dividend from the
Group's Associate, Browntech Sales Co. Ltd
-- Interim dividend of 0.5p per share approved by the Board to be paid on 7 July 2023.
Operational highlights
-- Ventilation Systems sales rose by 31% against H1 2022, driven
by a strong European performance where sales rose by 124% as
component shortages eased and production caught up with demand
-- Window and Door Hardware sales fell by 9%. We continue to
develop a new product partnership, whilst sales of Titon
manufactured products increased by 16%
-- Good progress made against all 2023 key business imperatives,
having caught up on our order backlog and improved management of
stock levels for the main product lines
-- Trading conditions in South Korea remained challenging due to
the weak housing market and the movement to mechanical ventilation
products. Sales were marginally lower against the same period last
year and losses were higher
-- New product development is continuing with a number of new
mechanical and hardware product launches planned, targeting
specific applications and market opportunities.
Current trading and outlook
-- In March 2023 the Office for Budget Responsibility forecast
two quarters of negative growth in GDP before the economy starts
growing again in Q3 2023. The Construction Products Association now
forecasts that private housebuilding output will fall by 17% in
2023 before recovering by 4% in 2024 and with falls in RM&I of
9% in 2023 and rising by 2% in 2024 in the UK
-- The Board remains committed to achieving all of its business
imperatives for the rest of the year and continues to focus on
managing the cost base and improving efficiency throughout the
business
-- Against the macro-economic backdrop, the Group anticipates
that H2 revenues from the UK and Europe will be slightly lower than
H1 as the slowdown in the housing market activity occurs. On a full
year basis, we continue to expect trading at our UK and European
businesses to be in line with our prior expectations, supported by
the H1 performance
-- In South Korea we anticipate that trading conditions will
remain difficult and we expect that losses will continue in H2. As
a result of the weaker trading in South Korea, we anticipate that
the Group's full year results will be lower than previously
expected. As previously reported, we intend to streamline the
corporate structure and operations of the Korean business
-- The Board of Titon remains confident in the long-term
prospects of the Group given the broad product spread and the
Group's strong balance sheet at the period end, together with the
growth opportunities available to the Group, supported by recent
regulatory changes and new product development.
Non-executive Chair Keith Ritchie said:
"The trading performance of the Group over the six months period
to 31 March 2023 generated good levels of sales in our main UK and
European markets for our products. Trading in South Korea remained
difficult as the construction market saw projects delayed, and
losses were higher than we expected. Although our full year
performance in the UK and Europe is expected to be consistent with
our prior expectations, our Group results for the full year to 30
September 2023 will be lower than we previously expected as a
result of the weak trading in South Korea that we continue to
suffer from. We have continued to invest in our products and people
during the period, with a number of new hires as we seek to change
and improve the business. We have started a recruitment process to
hire a new Chief Executive after the departure of Alexandra French
and will update shareholders at the appropriate time.
We continue to benefit from the strength of our balance sheet,
the range of products that we manufacture and sell and markets in
which we trade. The Group is well capitalised with a strong balance
sheet and no debt. We remain confident in the long-term prospects
of the business."
Notice of Investor Presentation
Titon is pleased to announce that Keith Ritchie (Non-executive
Chair) and Carolyn Isom (Chief Financial Officer) will provide a
live presentation relating to the Interim Report via Investor Meet
Company on 26 May 2023 at 9.30am.
The presentation is open to all existing and potential
shareholders. Questions can be submitted pre-event via your
Investor Meet Company dashboard up until 9am the day before the
meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add
to meet Titon via:
https://www.investormeetcompany.com/titon-holdings-plc/register-investor
Investors who already follow Titon on the Investor Meet Company
platform will automatically be invited.
For the purposes of UK MAR and Article 2 of the binding
technical standards published by the Financial Conduct Authority in
relation to MAR as regards Commission Implementing Regulation (EU)
2016/1055, this announcement is made by Keith Ritchie,
Non-executive Chair.
For further information please contact
Titon Holdings Plc
Keith Ritchie +44 (0) 7748 146834
Shore Capital - Nominated Adviser and Broker
Daniel Bush +44 (0)20 7408 4090
Tom Knibbs
Titon Holdings PLC
Interim results for the six months to 31 March 2023
Chair's statement
As we anticipated and set out in the Group's 2022 Annual Report,
the business environment has remained challenging for us in the six
months to 31 March 2023 as the pressure on our margins continued,
resulting in a reported Group loss before tax for the period of
GBP0.45m (2022 loss before tax: GBP0.25m). However, I am pleased to
report that sales were 5% higher than in the period to 31 March
2022 although, as we had forecast, our gross margins are lower
compared to last year due to the cost increases we have continued
to suffer. I am pleased that in this period we received a dividend
from our Associate Company in South Korea of GBP0.3m, which has
benefited our cash position. As indicated in the Group's AGM
trading update, overall revenues in the six months to 31 March 2023
were slightly in line with the Board's expectations.
We identified a number of key business imperatives that we
wanted to deliver on in 2023 and I am pleased to report that
progress has been made in all of these. I can also report that our
new ERP system, which caused us some significant challenges in 2022
is working well and we now seek to enhance this system to bring
further process improvement and automation where we can. We are
committed to achieving all the business imperatives for the rest of
the year and these will be replaced by our next set of objectives
which will be separate from the work required to set out our
medium-term strategic plan, which we will commence this year.
Income Statement
In the six months to 31 March 2023, Titon's net revenue (which
excludes inter-segment activity) increased by 5.2% to GBP12.1
million (2022: GBP11.5 million). Sales of Window and Door Hardware
products fell by 9% in the period due to the lower sales of
bought-in hardware products following the ending of a distributor
relationship, which benefited the prior year revenues, offset
somewhat by growth in sales of Titon manufactured hardware
products. Sales of Ventilation Systems products rose by 31% as the
backlog of orders from both our UK and European customers were
manufactured and despatched. Sales in Titon Korea, our 51% owned
subsidiary fell slightly by 1% reflecting the continuing difficult
trading conditions and market dynamics in South Korea.
Gross margins fell to 26.1% (2022: 28.0%) due mainly to the cost
increases we have been unable to reflect in our own pricing to
customers, but also the lower contribution from Titon Korea. EBITDA
was 36% lower at GBP0.18 million (2022: GBP0.28 million), whilst we
made an operating loss of GBP0.39 million (2022 loss: GBP0.21
million). The results from the Group's associate, Browntech Sales
Co. Ltd (BTS) in South Korea, amounted to a loss of GBP54,000 (2022
loss: GBP29,000) as a result of the continuing weak new build
market in Korea and the Korean market shift towards mechanical
ventilation. In aggregate, the Group made a loss before tax of
GBP0.45 million (2022 loss before tax: GBP0.25 million).
The Group's loss per share for the period was 2.86 pence (2022:
loss per share of 1.46 pence) with the total loss after tax of
GBP0.39m (2022 loss: GBP0.21m) and an apportionment to minority
shareholders of a loss of GBP93,000 (2022: loss of GBP47,000) which
reflected the weak trading incurred by Titon Korea.
Whilst it is always disappointing to make a loss in the period,
the Group continues to maintain a strong balance sheet and the
Board has therefore approved the payment of an interim dividend in
respect of the 6 months ending 31 March 2023 of 0.5 pence per share
(2022: 1.50 pence per share). The interim dividend is payable on 7
July 2023 to shareholders on the register at 26 May 2023. The
ex-dividend date is 25 May 2023.
Balance sheet and cash flow
Net assets including non-controlling interests fell by 3.3% or
GBP0.5 million to GBP15.4 million (30 September 2022: GBP16.0
million) with net cash (excluding lease liabilities) of GBP1.6
million (30 September 2022: GBP1.7 million) which is equivalent to
11.1% of net assets (30 September 2022: 10.8%). The Group had no
financial indebtedness at 31 March 2023, other than lease
liabilities. The cash held by Titon Korea reduced to GBP0.05
million at 31 March 2023 (30 September 2022: GBP0.07 million).
The half year saw cash generated by operations of GBP0.02
million (2022: cash used in operations GBP0.29 million), primarily
due to actively improving our working capital management through
accurate targeting of stock levels for the main product lines.
Capital expenditure in the period was GBP0.26 million (2022:
GBP0.39 million) as we continue investing in plant and machinery
and tooling. We were pleased to receive a dividend from BTS in
March 2023 amounting to GBP0.3 million (net of withholding tax)
(2022: nil).
Net current assets were GBP8.0 million at 31 March 2023 (30
September 2022: GBP7.6 million) with a Quick Ratio(1) of 1.23 (30
September 2022: 1.2). Asset Turn was 1.85 (30 September 2022:
1.65).
Segmental and operational review
As we noted in the Annual Report, we had identified a number of
business imperatives that we wanted to deliver on in the current
financial period to stabilise the UK and European businesses and to
return the Group to growth. The key imperative that we identified
was to catch up with backlog of orders caused by the initial
implementation issues of the new ERP system in May 2022 and the
previous supply chain challenges we had faced and I am pleased to
report that we have achieved that. The other key imperative is to
reduce the site inventory held and I am pleased to see that this
has also started to improve and will continue throughout the rest
of this financial year. Revenues in South Korea have stabilised
although new building projects continue to be delayed and sales in
Titon Inc. have fallen slightly compared to last year.
Gross margins have fallen by 1.9% compared to the same period
last year due mainly to the material, labour and energy cost
increases we have experienced that we haven't been able to pass on,
as previously reported, and the lower contribution from Titon
Korea. The reduction in gross margin and an increase in overheads,
resulting from enhancing our management team and technology, has
meant that our operating result is a loss of GBP0.39m versus an
operating loss of GBP0.21m in 2022. Titon Korea contributed
GBP0.19m of this loss (2022 loss: GBP0.12m).
UK and Europe
I am pleased to report that sales in the UK and Europe have
increased over the same period last year, rising by 6% as we worked
hard to reduce the backlog of orders. Sales in UK Window and Door
Hardware have fallen by 9%. Sales of Titon manufactured products
rose by 16% against the same prior period but sales of bought-in
products fell by 51% due to the lower sales of hardware products
following the ending of our distributor relationship with Sobinco,
which benefited the prior year's H1 revenues, whilst we develop our
new distribution partnership with Roto in order to replace some of
those products.
In our Ventilation Systems division, sales in the UK have risen
by 6% against the same period last year as sales of Mechanical
Ventilation with Heat Recovery products grew. However, sales of
ducting bought-in products fell as the production back-log resulted
in lower enquiries for whole house systems in the period. Sales of
the new Titon Ultimate(R) dMEV extract fan started to increase with
revenues growing by approximately four times in the period as some
initial production issues were resolved. We expect sales of this
product to continue to increase in the second half of the year.
Sales of the Titon FireSafe(R) Air Brick range continue at healthy
levels as demand continues for this safety product.
In Europe, Ventilation Systems sales rose by 124% as the
production backlog eased and outstanding orders for our Export
customers were delivered. Exports of our Window and Door Hardware
products were up 15% in the period.
South Korea
Revenues from South Korea were marginally lower than in 2022.
This reflects the difficult conditions for new build in Korea and
the continuing delays in starting new projects. In terms of the
segmental contribution from South Korea, the two businesses, Titon
Korea and BTS are aggregated. The revenue in the Group's accounts,
which is solely that from Titon Korea (the Group's share of BTS's
profits/losses are accounted for as an associate) was flat at
GBP1.5 million (2022: GBP1.5 million).
The segment contribution, which includes the pre-tax loss of
Titon Korea plus 49% of the post-tax loss of BTS, was a loss of
GBP245,000 (2022 loss: GBP152,000) which was higher than we
previously expected.
United States
Sales in our US business remain a very small portion of the
Group's overall sales and were broadly flat against the same period
last year at GBP279,000 (2022: GBP290,000). Titon Inc. made a small
pre-tax profit in the period.
Board
As we announced on 6 April 2023, Alexandra French stepped down
from her role as Chief Executive and left the Board with immediate
effect. I thank Alexandra for all her hard work over the 11 months
that she was Chief Executive. We have started a recruitment process
for her successor and will update shareholders in due course.
I am pleased to say that there have been no other changes to the
Board in the period under review.
I personally thank my colleagues on the Board for their hard
work and counsel over recent months.
Employees
As usual our employees have continued to show a high level of
dedication to the business. In the period under review, we have
managed to catch up on our backlog of customer orders which has now
meant we can return to the high customer service levels our
customers had previously enjoyed. We have trained our factory
employees to be flexible so that they can be allocated to wherever
our production need is which has greatly assisted us in achieving
the position we are in now. Our office staff have also worked
tirelessly to ensure that business as usual has been resumed. I
offer my, and the Board's, thanks for all their efforts.
Investors
Despite the recent weak trading performance, we will pay an
interim dividend of 0.5 pence per share for the period.
We held our AGM in March 2023 in Haverhill and it was good to
have the opportunity to meet some new shareholders and to show them
around the factory and the progress we are making. We always
appreciate their interest in Titon.
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 2022 within the Strategic Report (page 6)
available at www.titon.com . Assessments of exposure to financial
and other risks are always difficult given the uncertainties about
the inflationary risks in the UK economy. The Board has considered
the potential impact of these matters on the Group's specific
circumstances, including current and potential cash resources
together with the diverse range of customers and suppliers, across
different geographic areas and markets. Consequently, the Directors
continue to believe that the Group is well placed to manage
business risks successfully.
The Directors have reviewed the budgets, projected cash flows,
principal risks and other relevant information for a period of 12
months from the period end date. Based on this review the Directors
have a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for a
period of at least twelve months and beyond. For this reason, the
Directors believe it is appropriate to continue to adopt the going
concern basis in preparing the financial statements.
Outlook
The economic outlook for the UK has improved in recent months
compared to the forecasts at the beginning of 2023 when most
forecasts were that the UK would suffer a recession in 2023. The
Office for Budget Responsibility forecast in March this year that
there would be two quarters of falling GDP before the economy
starts growing again in Q3 2023. The Construction Products
Association (CPA) also expects that the UK economy will flat line
in 2023 rather than entering a technical recession, so there is
some positive news generally compared to earlier forecasts.
However, the CPA expects to see private housing output to fall by
17% in 2023 due to the sharp rise in interest rates over the last
12 months before recovering in 2024 by 4% and for private repairs,
maintenance and improvements to fall by 9% in 2023 before rising by
2% in 2024. These are significant forecast reductions in
activities, and we will be impacted by them if they are on this
scale. The changes to UK Building Regulations in 2022 have now all
just about come into effect as the transition rules for house
builders using mechanical ventilation expire in June 2023. We do
expect to see a further shift by them in future away from natural
ventilation to mechanical ventilation as they are required to build
more tightly. This will certainly give us opportunities to sell
higher value whole house systems, at the expense of some trickle
vent sales, into new build.
Our new product development continues to progress well. We are
in the process of launching our higher performing, easier to
specify HRV4 unit, which will replace a number of existing MVHR
variants in our range and will be attractive in both our UK and
European markets. We exhibited this at the recent ISH show in
Germany and received positive interest from our customers. Our new
Ultimate dMEV fan is proving popular and we expect sales to
continue to accelerate as the new build regulation revisions hit
the market, with further versions of that product to come for the
social housing sector. Also shown at the ISH exhibition was the
Ultimate Active vent prototype. As previously mentioned, we aim to
gain interest and then specifications for its use, where it
improves householder thermal comfort compared to standard trickle
vents. We also continue to develop some new hardware products for
specific market sectors and look forward to growth in the aluminium
window and door sector through our new partnership with Roto.
In South Korea we still do not expect a rebound in profitability
until the transition from natural ventilation products to
mechanical products takes effect although we do hope to see a small
increase in sales in 2023/24 as the transition starts to take
effect. We are working with our partners in Korea to streamline the
corporate structure and operations of the Korean business. We are
forecasting a higher loss from our Korean operations than we
previously indicated.
While we recruit a new Chief Executive, we are confident that
our senior leadership team, led by Board members Carolyn Isom and
Tyson Anderson will continue making progress to return the Group to
profitability. Now we have cleared the backlog and our Operations
Director is more embedded, having only joined in November 2022, we
are pleased that we can now offer competitive lead times to our
customers. We have also increased our capacity to be able to meet
market demand. Our newly appointed Commercial Director joins us in
this month as we look to enhance our sales strategies.
Current trading
I am pleased to report that the supply chain component issues I
have flagged in recent financial statements have now largely eased
and the CPA also recently noted that materials and product
availability has improved recently.
H1 trading in the UK and Europe was slightly above the Board's
expectations. We expect that revenues in the second half year will
be slightly lower than the first half, which benefited from the
backlog of orders that we had at the start of the financial year.
As a result of this we have decided to slow down our hiring plans
in the second half and to focus on reducing costs and improving
efficiency throughout the business in the UK and Europe. In South
Korea we anticipate that trading conditions will remain difficult
and we expect that losses will continue in H2. As a result of the
weak trading in South Korea we anticipate that the Group's full
year results will be lower than previously expected.
Despite the challenges the business has faced, we continue to
have a strong balance sheet, very talented employees and a good
range of products in both our divisions that give us confidence in
our medium-term future.
A list of current directors is maintained on the Group's website
www.titon.com.
On behalf of the Board
Keith A Ritchie
Chair
18 May 2023
Notes
1. The Quick Ratio measures liquidity and is calculated by
dividing Current Assets less inventories by Current Liabilities
Titon Holdings Plc
Consolidated Interim Income Statement
for the six months ended 31 March 2023
6 months 6 months Year to
to 31.3.23 to 31.3.22 30.9.22
unaudited unaudited audited
Note GBP'000 GBP'000 GBP'000
Revenue 2 12,077 11,478 22,087
Cost of sales (8,918) (8,261) (16,270)
Gross profit 3,159 3,217 5,817
Distribution costs (593) (612) (1,393)
Administrative expenses (2,704) (2,504) (4,586)
Administrative expenses - exceptional - - (349)
Research and development expenses (261) (330) (629)
Other income 12 15 21
---------------------------------------- ---- ---------- ---------- --------
Operating loss (387) (214) (1,119)
Finance expense (10) (7) (16)
Finance income 3 - 9
Share of post-tax (loss) / profit
from associates (54) (29) 173
---------------------------------------- ---- ---------- ---------- --------
Loss before tax (449) (250) (953)
Income tax credit 3 57 37 410
Loss after income tax (392) (213) (543)
---------------------------------------- ---- ---------- ---------- --------
Attributable to:
Equity holders of the parent (320) (166) (436)
Non-controlling interest (72) (47) (107)
---------------------------------------- ---- ---------- ---------- --------
Loss for the period (392) (213) (543)
---------------------------------------- ---- ---------- ---------- --------
Loss per share attributed to equity
holders of the parent:
Basic (2.86p) (1.46p) (3.89p)
Diluted (2.86p) (1.44p) (3.89p)
Consolidated Interim Statement of Comprehensive Income
for the six months ended 31 March 2023
6 months 6 months Year to
to 31.3.23 to 31.3.22 30.9.22
unaudited unaudited Audited
GBP'000 GBP'000 GBP'000
Loss for the period (392) (213) (543)
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 (114) 27 112
-------------------------------------- ---------- ---------- -------
Total comprehensive expense for the
period (506) (186) (431)
Attributable to :
Equity holders of the parent (428) (142) (333)
Non-controlling interest (79) (44) (98)
(506) (186) (431)
-------------------------------------- ---------- ---------- -------
Titon Holdings Plc
Consolidated Interim Statement of Financial Position
at 31 March 2023
31.3.23 31.03.22 30.09.22
unaudited unaudited audited
GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 3,264 3,445 3,321
Right-of-use assets 573 613 553
Intangible assets 760 925 915
Investments in associates 2,482 2,668 2,909
Deferred tax assets 747 308 697
--------- --------- --------
Total non-current assets 7,826 7,959 8,395
--------- --------- --------
Inventories 6,917 5,320 6,571
Trade and other receivables 4,199 3,896 4,920
Cash and cash equivalents 1,610 3,728 1,726
--------- --------- --------
Total current assets 12,726 12,944 13,217
Total Assets 20,556 20,903 21,612
------------------------------- --------- --------- --------
Liabilities
Lease liabilities 409 430 378
--------- --------- --------
Total non-current liabilities 409 430 378
--------- --------- --------
Trade and other payables 4,500 3,937 5,051
Lease liabilities 230 229 232
Total current liabilities 4,730 4,166 5,283
Total Liabilities 5,139 4,596 5,661
------------------------------- --------- --------- --------
Equity
Share capital 1,122 1,119 1,122
Share premium reserve 1,091 1,077 1,091
Capital redemption reserve 56 56 56
Treasury shares - (27) -
Foreign exchange reserve 90 120 198
Retained earnings 12,831 13,603 13,179
------------------------------- --------- --------- --------
Total Equity attributable
to the equity holders
of the parent 15,190 15,948 15,646
Non-controlling Interest 227 359 305
Total Equity 15,417 16,307 15,951
Total Liabilities and
Equity 20,556 20,903 21,612
------------------------------- --------- --------- --------
Titon Holdings Plc
Consolidated Interim Statement of Changes in Equity
at 31 March 2023
Share Share Capital Foreign Treasury Retained Total Non- Total
capital premium redemption exchange Shares earnings controlling Equity
reserve reserve reserve interest
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
At 30
September
2021 1,119 1,077 56 96 (27) 14,093 16,414 403 16,817
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Translation
differences
on overseas
operations - - - 24 - 1 25 3 28
Profit for the
period - - - - - (166) (166) (47) (213)
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Total
comprehensive
Income /
(loss)
for the
period - - - 24 - (165) (141) (44) (185)
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Dividends paid - - - - - (335) (335) - (335)
Share-based
payment
credit - - - - - 10 10 - 10
At 31 March
2022 1,119 1,077 56 120 (27) 13,603 15,948 359 16,307
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Translation
differences
on overseas
operations - - - 78 - - 78 - 78
Loss for the
year - - - - - (270) (270) (54) (324)
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Total
comprehensive
income /
(loss)
for the
period - - - 78 - (270) (192) (54) (246)
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Dividends paid - - - - - (167) (167) - (167)
Share-based
payment
credit - - - - - 13 13 - 13
Exercise of
share options 3 14 - - - - 17 - 17
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Transfer of
treasury
shares 27 27 27
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
At 30
September
2022 1,122 1,091 56 198 - 13,179 15,646 305 15,951
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Translation
differences
on overseas
operations - - - (108) - - (108) (6) (114)
Loss for the
period - - - - - (320) (320) (72) (392)
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Total
comprehensive
income /
(loss)
for the
period - - - (108) - (320) (428) (78) (506)
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Dividends paid - - - - - (56) (56) - (56)
Share-based
payment
credit - - - - - 28 28 - 28
At 31 March
2023 1,122 1,091 56 90 - 12,831 15,190 227 15,417
--------------- --------- --------- ----------- --------- --------- ---------- -------- ------------ --------
Titon Holdings Plc
Consolidated Interim Statement of Cash Flow
for the six months ended 31 March 2023
6 months 6 months Year to
to 31.3.23 to 31.3.22 30.09.22
unaudited unaudited Audited
Note GBP'000 GBP'000 GBP'000
Cash generated from operating activities
Loss before tax (449) (250) (953)
Depreciation of property, plant &
equipment 308 279 518
Depreciation of right-of-use assets 100 85 232
Amortisation of intangible assets 163 126 298
Profit on sale of plant & equipment (10) 22 (19)
Share based payment - equity settled 28 10 23
Finance Income (3) - (9)
Finance costs 10 7 16
Share of associate's post-tax loss
/ (profit) 54 29 (173)
--------
201 308 (67)
Increase in inventories (264) (270) (1,529)
(Increase) / decrease in receivables 1,203 367 (696)
(Decrease) / increase in payables
and other current liabilities (1,116) (690) 498
----------------------------------------- ---- ---------- ---------- --------
Cash generated by / (used in) operations 24 (285) (1,794)
----------------------------------------- ---- ---------- ---------- --------
Cash flows from investing activities
Purchase of plant & equipment (258) (256) (386)
Purchase of intangible assets (8) (126) (288)
Proceeds from sale of plant & equipment 42 42 44
Finance income 3 - 9
Dividends received from associate
company 290 - -
Net cash generated by / (used) in
investing activities 69 (340) (621)
----------------------------------------- ---- ---------- ---------- --------
Cash flows from financing activities
Dividends paid to equity shareholders
of the parent 4 (56) (335) (502)
Payment of lease liability (114) (109) (226)
Finance costs (10) (7) (16)
Exercise of Share Options - - 44
Net cash used in financing activities (180) (451) (700)
----------------------------------------- ---- ---------- ---------- --------
Net decrease in cash (87) (1,076) (3,115)
Foreign exchange (29) 10 47
Cash at beginning of the period 1,726 4,794 4,794
----------------------------------------- ---- ---------- ---------- --------
Cash at end of the period 1,610 3,728 1,726
----------------------------------------- ---- ---------- ---------- --------
Notes to the Condensed Consolidated Interim Statements
at 31 March 2023
1 Accounting policies
a ) General information
Titon Holdings Plc (the 'Company') is incorporated and domiciled
in England and its shares are publicly traded on AIM. The
registered office address is 894 The Crescent, Colchester Business
Park, Colchester, Essex, CO4 9YQ. The company's registered number
is 1604952. The principal activities of the Group are as described
in Note 2.
The Board considers the principal risks and uncertainties
relating to the Group for the next six months to be the same as
detailed in the last Annual Report and Financial Statements to 30
September 2022. The Group's financial risk management objectives
and policies are consistent with those disclosed in the
consolidated financial statements as at and for the year ended 30
September 2022.
b) Basis of preparation
These condensed consolidated interim financial statements of the
Group for the six months ended 31 March 2023 comprise the Company
and its subsidiaries (together referred to as the 'Group').
The condensed consolidated interim financial statements have
been prepared in accordance with the AIM rules. Neither the six
months results for 2023 nor the six months results for 2022 have
been audited nor reviewed pursuant to guidance issued by the
Auditing Practices Board. This condensed Interim Group financial
Statements do not comprise statutory accounts within the meaning of
Section 435 of the Companies Act 2006. The comparative figures for
the year ended 30 September 2022 do not constitute statutory
accounts within the meaning of Section 435 of the Companies Act
2006, but they have been derived from the audited Report and
Accounts for that year, which have been filed with the Registrar of
Companies. The independent auditor's 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.
This report should be read in conjunction with the Group's
Annual Report and Accounts for the year ended 30 September 2022,
which have been prepared in accordance with International Financial
Reporting Standards and Interpretations (collectively IFRSs) as
adopted in the UK.
These unaudited interim Group Financial Statements were approved
for issue on 18 May 2023. Copies will be sent to shareholders
within the next few weeks and will be available on the Group's
website at www.titon.com/uk/investors/ and from the Company's
registered office at 894 The Crescent, Colchester Business Park,
Colchester, Essex, CO4 9YQ.
c) Accounting policies
These condensed consolidated interim financial statements have
been prepared in accordance with the recognition and measurement
requirements of the UK adopted international accounting
standards.
In preparing these condensed consolidated interim financial
statements the Board have considered the impact of new standards
which will be applied in the 2023 Annual Report and Accounts.
There are not expected to be any changes in the accounting
policies compared to those applied at 30 September 2022.
A full description of accounting policies is contained with our
2022 Annual Report and Financial Statements, which is available on
our website.
New accounting standards
The Group does not expect any other standards issued by the
IASB, but not yet effective, to have a material impact on the
Group.
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 in four main business segments which
are:
Segment Activities undertaken include:
United Kingdom Sales of passive and powered ventilation products
to housebuilders, 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. Administration Expenses are currently
allocated to operating segments in the Group's reporting to the
CODM and include 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 Group recognises revenue at a single point in time in its UK
and US subsidiary. The nature of business practice at its South
Korean subsidiary means that the Group recognises revenue there
over time, this being at first fix and second fix stages. As
invoicing for both first fix and second fix components usually
takes place at the first fix stage, the revenue on the second fix
products is deferred in the Financial Statements until the point
that those second fix products are accepted by the customer.
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.
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
2023
Segment revenue 8,240 1,489 279 2,303 12,311
Inter-segment revenue (234) - - - (234)
------------------------------------- --------- -------- --------- ----------- --------
Total Revenue 8,006 1,489 279 2,303 12,077
------------------------------------- --------- -------- --------- ----------- --------
Segment (loss) / profit (211) (245) 6 - (450)
Income tax credit 57
------------------------------------- --------- -------- --------- ----------- --------
Loss for the period (392)
------------------------------------- --------- -------- --------- ----------- --------
Depreciation and amortisation 400 39 - - 439
------------------------------------- --------- -------- --------- ----------- --------
Depreciation of Right-of-use-assets 78 22 - - 100
------------------------------------- --------- -------- --------- ----------- --------
Total assets 16,131 4,205 220 - 20,556
------------------------------------- --------- -------- --------- ----------- --------
Total assets include:
Investments in associates 2,482 - - - 2,482
Additions to non-current
assets (other than financial
instruments and deferred
tax assets) 251 15 - - 266
The South Korean Segment loss includes the Group's share of the
post-tax loss from the Group's associate undertaking, Browntech
Sales Co. Ltd. Sales to Browntech Sales Co. Ltd. of GBP1.49 million
represent 12% of Group revenue. There are no other concentrations
of revenue above 10% during the year (see Note 6 - 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.
United Europe USA and Asia All other Total
Kingdom Canada regions
Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
by entities' country of
domicile 10,309 - 279 1,489 - 12,077
by country from which
derived 8,006 2,303 279 1,489 - 12,077
------------------------- --------- -------- -------- -------- ---------- --------
Non-current assets
By entities' country of
domicile 4,869 - 35 2,926 - 7,830
------------------------- --------- -------- -------- -------- ---------- --------
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
2022
Segment revenue 8,655 1,501 290 1,181 11,627
Inter-segment revenue (149) - - - (149)
------------------------------------- --------- -------- --------- ----------- --------
Total Revenue 8,506 1,501 290 1,181 11,478
------------------------------------- --------- -------- --------- ----------- --------
Segment (loss) / profit 87 (153) (18) (166) (250)
Income tax credit 37
------------------------------------- --------- -------- --------- ----------- --------
Loss for the period (213)
------------------------------------- --------- -------- --------- ----------- --------
Depreciation and amortisation 366 39 - - 405
------------------------------------- --------- -------- --------- ----------- --------
Depreciation of right-of-use-assets 62 23 - - 85
------------------------------------- --------- -------- --------- ----------- --------
Total assets 16,270 4,399 234 - 20,903
------------------------------------- --------- -------- --------- ----------- --------
Total assets include:
Investments in associates 2,668 - - - 2,668
Additions to non-current
assets (other than financial
instruments and deferred
tax assets) 367 15 - - 382
------------------------------------- --------- -------- --------- ----------- --------
The South Korean Segment loss includes the Group's share of the
post-tax profit from the Group's associate undertaking, Browntech
Sales Co. Ltd. Sales to Browntech Sales Co. Ltd. of GBP1.50 million
represent 13% of Group Revenue. There are no other concentrations
of revenue above 10% during the year (see Note 6 - 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.
6 months ended 31 March United Europe USA and Asia All other Total
2022 Kingdom Canada regions
Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
by entities' country of
domicile 9,687 - 290 1,501 - 11,478
by country from which
derived 8,506 1,152 290 1,501 29 11,478
------------------------- --------- -------- -------- -------- ---------- --------
Non-current assets
By entities' country of
domicile 5,081 - 33 2,845 - 7,959
------------------------- --------- -------- -------- -------- ---------- --------
For the year ended United South North All other
30 September 2022 Kingdom Korea America countries Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 16,497 3,037 538 2,303 22,375
Inter-segment revenue (288) - - - (288)
------------------------------ -------- ------- -------- ---------- --------------------
Total Revenue 16,209 3,037 538 2,303 22,087
------------------------------ -------- ------- -------- ---------- --------------------
Segment (loss) /
profit (651) (37) 160 (425) (953)
Tax credit 410
------------------------------ -------- ------- -------- ---------- --------------------
Loss for the year (543)
------------------------------ -------- ------- -------- ---------- --------------------
Depreciation and amortisation 920 42 - - 962
------------------------------ -------- ------- -------- ---------- --------------------
Total assets 16,953 4,491 166 - 21,611
------------------------------ -------- ------- -------- ---------- --------------------
Total assets include:
Investments in associates 2,910 - - - 2,910
Additions to non-current
assets
(other than financial
instruments
and deferred tax
assets) 671 3 - - 674
------------------------------ -------- ------- -------- ---------- --------------------
The South Korea Segment loss includes the Group's share of the
post-tax profits from Browntech Sales Co. Ltd., (BTS), the Group's
associate undertaking in South Korea, of GBP173,000. Sales to BTS
of GBP4.71m represented 21% of Group Revenue (2021: GBP3.58m -
15%). There are no other concentrations of revenue above 10% during
the year (see Note 6 - 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.
For the year ended United Europe USA and South All other Total
30 September 2022 Kingdom Canada Korea regions
Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
By entities' country
of domicile 18,512 - 538 3,037 - 22,087
By country from which
derived 16,209 2,303 538 3,037 - 22,087
---------------------- -------- ------- ------- ------- --------- -------
Non-current assets
By entities' country
of domicile 5,355 - 46 3,061 - 8,461
---------------------- -------- ------- ------- ------- --------- -------
3 Taxation
6 months 6 months Year to
to 31.3.23 to 31.3.22 30.9.22
GBP'000 GBP'000 GBP'000
Deferred tax:
Origination and reversal of temporary
differences 57 37 410
Income tax credit 57 37 410
-------------------------------------- ---------- ---------- -------
Taxation for the interim period is credited at 12.7% (six months
to 31 March 2022: credited at 11.2%) representing the best estimate
of the average annual income tax rate for the full financial
year.
4 Dividends
The following dividends have been recognised and paid by the
Company:
6 months 6 months Year
to
to 31.3.23 to 31.3.22 30.9.22
Date Pence
Paid per GBP'000 GBP'000 GBP'000
share
Final 2021 dividend 04.03.22 3.00 - 334 -
Interim 2022 dividend 27.05.22 1.50 - 167
Final 2022 dividend 31.03.23 0.50 56 - -
---------- ---------- ---------
56 334 167
---------- ---------- ---------
5 Earnings per ordinary share
Basic earnings per share has been calculated by dividing the
profits or losses attributable to shareholders of Titon Holdings
Plc by the weighted average number of ordinary shares in issue
during the period, being 11,197,707 (six months ended 31 March
2022: 11,124,517; year ended 30 September 2022: 11,196,627).
Diluted earnings per share (EPS) is calculated by dividing the
profits or losses attributable to shareholders by the weighted
average number of ordinary shares and potential dilutive ordinary
shares during the period, being 11,213,324 at 31 March 2023, except
that at this date, when the inclusion of potential ordinary shares
(POSs) in the calculation would increase the EPS, or decrease the
loss per share, from continuing operations, then these POSs are
anti-dilutive and are ignored in diluted EPS. Potential dilutive
ordinary shares at: six months ended 31 March 2022: 11,219,391 and
year ended 30 September 2022: 11,214,800.
6 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 31.3.23 to 31.3.22 to to 31.3.23 to 31.3.22 to
30.9.22 30.9.22
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Browntech Sales
Co. Ltd 1,489 1,501 3,037 108 155 180
------------ ------------ --------- ------------ ------------ ---------
There have been no additional significant or unusual related
party transactions to those disclosed in the Group's Annual Report
for 30 September 2022.
7 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.
Directors and Advisers
Directors
Executive
C V Isom (Chief Financial Officer)
A C French (Chief Executive) (resigned 6 April 2023)
Non-executive
K A Ritchie (Group Non-Executive Chair)
T N Anderson (Deputy Chair)
N C Howlett
J Ward
G P Hooper
Secretary and registered office
C V Isom
894 The Crescent
Colchester Business Park
Colchester
Essex
CO4 9YQ
COMPANY REGISTRATION NUMBER
1604952 (Registered in England & Wales)
WEBSITE
www.titon.com/uk/investors
auditor
MHA
6(th) Floor, 2 London Wall Place
London
EC2Y 5AU
NOMINATED ADVISER
Shore Capital and Corporate Ltd
Cassini House
57-58 St. James's Street
London
SW1A 1LD
BROKER
Shore Capital Stockbrokers Ltd
Cassini House
57-58 St. James's Street
London
SW1A 1LD
REGISTRARS AND TRANSFER OFFICE
Link Market Services Ltd
10(th) Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
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END
IR ZZGMKKRLGFZM
(END) Dow Jones Newswires
May 19, 2023 02:00 ET (06:00 GMT)
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