RNS Number:1216T
Titon Holdings PLC
11 December 2003
Titon Holdings Plc
Preliminary Results for the year ended 30 September 2003
CHAIRMAN'S STATEMENT
FINANCIAL RESULTS
Profit before taxation for the year was 1.9% lower than last year at #1.52
million (2002: #1.55 million), on turnover 6.7% higher at #16.31 million (2002:
#15.28 million). Interest income has reduced, and at the operating level,
profits were just 1.4% down at #1.37 million (2002: #1.39 million). Earnings per
share have increased by 3.5% to 10.19p (2002: 9.85p).
The Directors are proposing a final dividend of 4.8p per ordinary share (2002:
4.8p), making a total of 7.1p for the year (2002: 7.1p). The dividend will be
payable on 20 February 2004 to shareholders on the register on 23 January 2004.
The ex-dividend date will be 21 January 2004.
In January 2003 the Company repurchased and cancelled 560,000 of its shares,
representing some 5.1% of total shares in issue at the time. These shares were
repurchased at an average price of #1.00 each.
Following the repurchase of shares and the investment in new premises, net cash
balances at the year-end have reduced to stand at #3.67 million (2002: #4.87
million).
SALES COMMENTARY
Despite strong profit growth reported by some UK house builders over the past
year, market conditions for many component suppliers remains extremely
competitive. This is particularly the case in the window industry, where there
is significant overcapacity amongst both timber manufacturers and PVCu
fabricators. The result of this for Titon is that the growth in turnover that we
have achieved has been largely offset by margin reduction, due to the difficulty
of passing on cost increases to our customers.
The UK market for our wide range of background ventilation products is still
very much driven by Regulation although more often today by best practice and by
consumer awareness. As mentioned in my previous reports to shareholders, the
Regulation that underpins our business is presently under review, with important
drafts to be announced in the spring of 2004. We have invested a significant
amount of resource over the past year in monitoring this regulatory evolvement
as well as in the development and testing of new products in readiness for any
possible change. We are currently launching our new 'Omniglaze' glazed-in
ventilator and over the coming months will introduce other new products to the
market, including for the first time, extract power units.
Whilst ventilation products are the most important part of our product
portfolio, we have seen encouraging sales growth in other important sectors of
our UK market. Sales of most of our ranges of window handle and stay product
ranges have seen advances this year, even to the extent of presenting us with
occasional supply problems in this area of operation.
The Company distributes a wide range of window hinge and locking systems that it
sources both from UK and from Western European manufacturers. Sales of these
products have also improved during the year, and we are greatly encouraged by
the contribution being made by our recently formed Commercial Department, which
has greatly raised our profile within the aluminium door and window market.
It is particularly pleasing to report a significant and broadly based increase
in our export sales. The market in the USA has shown some improvement and we are
demonstrating our commitment to this by relocating one of the Directors of our
main operating subsidiary to our Indiana office for an extended period.
MANUFACTURING
The refurbishment of the 23,000 sq ft recently purchased unit adjacent to our
existing factory complex, as reported at the half year, is almost complete. The
total cost of this building will be approximately #1 million and will enable us
to terminate at least one existing lease. The building will be used to house our
Finished Goods Warehouse and Despatch Department and will be operational early
in the New Year.
The difficulties of manufacturing in the UK have been widely acknowledged and
Titon is not immune to these pressures. Over the past decade we have invested
considerably in high quality plant, tooling and premises as well as in the
automation of assembly processes. Despite this, we find it increasingly
difficult to maintain a satisfactory margin, which is not being helped by
greatly increased costs in areas such as insurance premiums, National Insurance
Contributions and Health and Safety compliance. Whilst we will endeavour to
control these costs where possible, we are in many ways reliant upon those whose
decisions and influences are making the majority of UK manufacturing less
competitive.
PERSONNEL
The Company was greatly saddened by the death of a longstanding Director, Mr Ron
Cheek during the summer. Ron had been with Titon from the early years and ended
his career as Managing Director of our Sales and Marketing Division. Although
semi-retired due to poor health for the past two years, he was still able to
contribute until his death. Ron was a great friend, work colleague and industry
specialist and he will be greatly missed by all.
I am pleased to report that Mr Tyson Anderson will be joining the Board of Titon
Holdings Plc effective from 1 January 2004. Tyson has had 14 years service
within the Group and has been Marketing Director of the main operating
subsidiary, Titon Hardware Limited, since 1999.
The entire Titon team provides the basis for the underlying strength of the
Company and, on behalf of the Board, I should like to thank them for their
contribution during what has been a demanding twelve months.
PROSPECTS
There is still uncertainty in the UK Regulatory area, but Titon will continue to
investigate and develop further innovative ideas in ventilation products to meet
any proposals emanating from revised Building Regulations. Our new venture into
powered ventilation products follows considerable research and we are confident
that the niche products chosen to compliment our current background ventilation
ranges will be successful.
It has been most encouraging to see growth in sectors of our business other than
UK ventilation and we anticipate that this will continue. We will explore all
possibilities to remain competitive and are confident that, if market conditions
remain stable, opportunities to improve the Company's position can be developed.
John Anderson
Chairman
10 December 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Preliminary Results for the year ended 30 September 2003
2003 2002
#'000 #'000
Turnover 16,310 15,283
Cost of sales 11,889 10,979
--------------- ---------------
Gross profit 4,421 4,304
Distribution costs 669 681
Administrative expenses 2,383 2,237
--------------- ---------------
3,052 2,918
--------------- ---------------
Operating profit 1,369 1,386
Interest receivable 153 171
Interest payable and similar charges -3 -4
--------------- ---------------
Profit on ordinary activities before
taxation 1,519 1,553
Taxation on profit on ordinary
activities 433 463
--------------- ---------------
Profit on ordinary activities after taxation
attributable to the members of Titon
Holdings Plc 1,086 1,090
Dividends 718 785
--------------- ---------------
Retained profit for the financial year 368 305
--------------- ---------------
Earnings per share - basic 10.19p 9.85p
- diluted 10.16p 9.83p
All amounts relate to continuing activities.
There are no recognised gains and losses other than the profit attributable to
the shareholders of the Company of #1,086,000 in the year ended 30 September
2003 and the profit of #1,090,000 in the year ended 30 September 2002.
CONSOLIDATED BALANCE SHEET
Preliminary Results for the year ended 30 September 2003
2003 2002
#'000 #'000
Fixed assets
Tangible assets 4,025 3,347
Current assets
Stocks 2,442 2,237
Debtors 3,248 3,241
Cash at bank and in hand 3,897 5,004
--------------- ---------------
9,587 10,482
Creditors:
Amounts falling due within one year -3,046 -3,043
--------------- ---------------
Net current assets 6,541 7,439
--------------- ---------------
Total assets less current liabilities 10,566 10,786
Deferred taxation -68 -98
--------------- ---------------
10,498 10,688
--------------- ---------------
Capital and reserves
Called up share capital 1,050 1,106
Share premium account 819 819
Share capital redemption reserve 56 -
Profit and loss account 8,573 8,763
-------------- ----------------
Equity shareholders' funds 10,498 10,688
--------------- ---------------
COMPANY BALANCE SHEET
Preliminary Results for the year ended 30 September 2003
2003 2002
#'000 #'000
Fixed assets
Tangible assets 2,813 2,058
Investments 204 202
--------------- ---------------
3,017 2,260
Current assets
Debtors 2,103 1,811
Cash at bank and in hand 3,800 4,900
--------------- ---------------
5,903 6,711
Creditors:
Amounts falling due within one year -730 -739
--------------- ---------------
Net current assets 5,173 5,972
--------------- ---------------
Total assets less current liabilities 8,190 8,232
Deferred taxation -174 -182
--------------- ---------------
8,016 8,050
--------------- ---------------
Capital and reserves
Called up share capital 1,050 1,106
Share premium account 819 819
Share capital redemption reserve 56 -
Profit and loss account 6,091 6,125
--------------- ---------------
Equity shareholders' funds 8,016 8,050
--------------- ---------------
CONSOLIDATED CASH FLOW STATEMENT
Preliminary Results for the year ended 30 September 2003
2003 2002
#'000 #'000
Net cash inflow from operating
activities 1,667 2,114
--------------- ---------------
Returns on investments and servicing of finance
Interest received 153 171
Interest paid -3 -4
--------------- ---------------
150 167
--------------- ---------------
Taxation
UK corporation tax -449 -520
--------------- ---------------
Capital expenditure
Purchase of tangible fixed assets -1,309 -429
Sale of tangible fixed assets 43 33
--------------- ---------------
-1,266 -396
--------------- ---------------
Equity dividends paid -746 -774
--------------- ---------------
Cash (outflow)/inflow before use of
management of -644 591
liquid resources and financing
Management of liquid resources
Disposal/(purchase) of treasury
deposits 1,100 -600
Financing
Purchase of ordinary share capital -560 -
--------------- ---------------
Decrease in cash -104 -9
--------------- ---------------
Notes to the Preliminary Results for the year ended 30 September 2003
1. Earnings per share has been calculated in accordance with
FRS14. Basic earnings per share has been calculated by dividing the profit
attributable to shareholders of #1,086,000 (2002: #1,090,000) by the weighted
average number of ordinary shares in issue during the year of 10,657,159 (2002:
11,062,200).
The diluted earnings per share has been calculated by dividing the profit
attributable to shareholders of #1,086,000 (2002: #1,090,000) by the weighted
average number of ordinary shares and potential dilutive ordinary shares during
the year of 10,693,452 (2002: 11,090,291). all dilutive ordinary shares relate
to share options.
2. Reconciliation of operating profit to net cash inflow from operating
activities
2003 2002
#'000 #'000
Operating profit 1,369 1,386
Depreciation 602 603
Increase in stocks -205 -2
Increase in debtors -7 -76
(Decrease)/increase in creditors -78 207
Profit on sale of fixed assets -14 -4
----------- -----------
Net cash inflow from operating activities 1,667 2,114
----------- -----------
3. Reconciliation of net cash flow to movement in net funds
2003 2002
#'000 #'000
Decrease in cash in the year -104 -9
(Decrease)/increase in liquid resources -1,100 600
----------- -----------
Change in net funds resulting from cashflows and movement
in net funds in the year -1,204 591
Opening net funds 4,870 4279
----------- -----------
Closing net funds 3,666 4,870
----------- -----------
4. The Preliminary Announcement does not constitute statutory
accounts. The auditors' report on the full accounts for the year ended 30
September 2003 has yet to be signed.
5. The actual results for the year ended 30 September 2002 as shown in this
statement are an abridged version of the Group's 2002 accounts which have been
filed with the Registrar of Companies and which received an unqualified audit
report.
The results for the year ended 30 September 2003 have been prepared on a basis
consistent with the accounting policies set out in the statutory accounts for
the year ended 30 September 2002.
6. The Preliminary Announcement was approved by the Board of Directors on 10
December 2003.
This statement is being sent to shareholders and will be available from the
Company's registered office at International House, Peartree Road, Stanway,
Colchester, Essex CO3 0JL.
This information is provided by RNS
The company news service from the London Stock Exchange
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