23 January 2025
LEI: 213800ZHXS8G27RM1D97
Titon Holdings
Plc
Final results for the year
to 30 September 2024
Titon Holdings Plc ("Titon", or
the "Group"), a leading international manufacturer and supplier of
ventilation systems, and window and door hardware, announces its
audited final results for the year ended 30 September 2024
("FY24").
Summary Financial Results (continuing
operations2):
|
|
2024
|
2023
(restated)2
|
|
|
|
£'000
|
£'000
|
|
|
Revenue
|
15,476
|
19,846
|
|
|
Gross profit margin
|
28.0%
|
28.4%
|
|
|
Underlying1 EBITDA
|
5
|
813
|
|
|
Underlying1 loss before exceptionals and
tax
|
(916)
|
(155)
|
|
|
Exceptional items
|
(1,515)
|
(39)
|
|
|
Reported operating loss before income tax
|
(2,431)
|
(194)
|
|
|
|
|
|
|
|
Year-end net cash and cash equivalents
|
2,281
|
2,238
|
|
Financial overview
· Net
Revenue decreased by 22% to £15.5 million (2023: £19.8 million),
primarily due to continued subdued market conditions in the
housebuilding sector.
· Gross margin maintained at 28.0% (2023: 28.4%) as the Group
carefully managed cost and volume pressures.
· Underlying EBITDA1 of £5,000 (2023: £813,000) with
reduced revenues mitigated by restructuring and actions taken to
reduce costs and improve efficiency in FY24.
· Underlying1 loss before exceptional costs of £0.9
million (2023: £0.2 million), principally reflecting the decline in
sales. The Group saw an improving trend as revenues stabilised and
losses reduced significantly in H2 after the benefits of cost
actions started to be realised.
· Exceptional costs within continuing operations of £1.5
million comprise the previously guided inventory write-down and
restructuring costs.
· Loss
from discontinued operations for FY24 was reported at £1.8 million
(2023: £0.76 million), principally comprising a write down of the
carrying value of the investment in our associate, Browntech Sales
Co. Ltd, of £1.48 million (2023: £nil) prior to disposal of the
South Korean operations post FY24 period-end.
· Strong balance sheet maintained with no borrowings and cash
levels consistent across the year, at £2.3 million (2023: £2.2
million), before the receipt of the £0.7m consideration from the
sale of the South Korean operations post FY24
period-end.
A
year of significant strategic progress
· Despite the challenging market conditions, the Group made
significant strategic progress in the year to improve the
performance of Titon and return it to profitability and sustainable
growth, including:
o The appointment of a new Chief Executive Officer and the
continued strengthening of the leadership team.
o Completion of a review of the Group's strategy and the
initiation of a comprehensive 5-year transformation strategy to
streamline operations, enhance the Group's capabilities, diversify
the business, improve and focus the product range on select core
markets, and prioritise high-margin opportunities for
Titon.
o Improvements to gross margins from strategic actions and
restructuring to reduce overhead costs in H2, allowing the Group to
significantly reduce net losses as H2 FY24 progressed, almost
achieving operational breakeven in the final two months of FY24, a
trend that has continued to improve into the start of the current
financial year.
o Continued commitment to
innovation, demonstrated by the release of new offerings in both
the Mechanical Ventilation and Window and Door Hardware businesses.
For example, we achieved sales of £0.6m of our HRV4 range which was
launched in the summer of FY23.
o Completion of the sale of the South Korean operations,
realising £0.7 million in cash, with funds received in December
2024.
Current trading and outlook
· The
Board remains confident in the Group's foundations and its
strategic roadmap to achieve a blended organic revenue growth rate
of 10% and a net margin of 15% by 2028. The initial progress made
in realigning our business and focussing on key markets provides a
solid foundation for growth and, together with tentative early
signs of a market recovery and forecast construction market growth,
provides confidence in the medium and long-term future of the
business.
· Early indications from the implementation of the Group's
transformation strategy have been promising with an improving
financial trajectory as restructuring measures undertaken in 2024
have improved the Group's breakeven level of revenues.
· The
Group's order book more than doubled across H2 FY24, with a
book-to-bill ratio of 1.13 by the end of the FY24 financial year
(0.92 as at 30 September 2023) which the Board believes is a
positive indicator of improved order momentum.
· Trading in the first quarter of 2025 has been slightly ahead
of the Board's expectations, with operating losses lower than the
same period in each of the last two financial years, and the Group
anticipates generating positive cash flows from operations in the
coming year.
· The
Board is confident that further meaningful strategic progress will
be made across the business in 2025 and, whilst uncertainties in
the macroeconomic landscape are likely to persist, it remains
confident that the Group is establishing a solid foundation for
sustained growth and long-term success.
Commenting, Chief Executive Officer, Tom Carpenter
said:
"We are encouraged by the positive momentum the business saw
in the latter half of FY24 and into the current financial year,
supported by a strong uptick in the Mechanical Ventilation Systems
order book and steadier revenues across both business units. Our
focus on cash management, gross margin improvement and cost
reduction has helped preserve a healthy cash balance, enabling us
to continue investing in the business and in new products to
enhance our competitiveness. Looking ahead, we recognise that much
work remains and view 2025 as a transitional year as we execute our
turnaround strategy to drive meaningful growth and profitability
for the Group."
1 Underlying loss before tax
and underlying EBITDA are non IFRS measures that the Board use to
measure underlying performance excluding exceptional
items.
2 The Group's FY23 results
have been restated to classify the Group's South Korean operations
as a discontinued operation, consistent with the FY24 reporting
approach. Revenue and performance metrics, including the changes
reported in FY24 against FY23, stated in this report therefore
represent the continuing operations of the Group, excluding the
results of the Group's former South Korean subsidiary and
associated company
This announcement is released by
the Company and contains information that qualified or may have
qualified as inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 ("MAR") as it forms part
of UK domestic law by virtue of the EUWA ("UK MAR"), encompassing
information relating to the Group's final results. 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 Carolyn Isom, CFO.
For
further information please contact:
Titon Holdings Plc
Tel: +44 (0)1206 713800
Tom Carpenter, Chief
Executive
Carolyn Isom, Chief Financial
Officer
Shore Capital - Nominated Adviser and Broker
Tel: +44 (0)20 7408 4090
Daniel Bush
Tom Knibbs
The
full text of the Report and Accounts for the year to 30 September
2024 is contained below. This document can be accessed with the
benefit of page referencing on the Company's website:
https://www.titon.com/uk/wp-content/uploads/sites/10/2025/01/Annual-Report-and-Financial-Statements-2024.pdf
Annual Report and Financial
Statements
for the
year ended 30 September 2024
Chair's Statement
This year has been a period of
significant transition for Titon Holdings plc. Approaching the
conclusion of my first year as Chair, I reflect on the progress
made in establishing a clear direction for the company's future.
With Tom Carpenter joining as Chief Executive in April, working
alongside Carolyn Isom, our Chief Financial Officer, we have
started implementing meaningful changes to streamline operations
and enhance our team's capabilities. I am confident that these
foundations, coupled with the opportunities ahead, position Titon
well to realise its full potential.
Financial performance
In the year ended 30 September
2024, the Group's net revenue from continuing operations declined
to £15.5m (2023: £19.8m2), reflecting ongoing pressures
in the housebuilding sector, particularly within the new build
market. This led to an underlying operating loss1 before
exceptionals and income tax for continuing operations of £0.9m
(2023: underlying operating loss of £0.2m). Despite these
challenges, there were clear signs of progress during the second
half of the year, with improvements in underlying operating
performance, moving us closer to breakeven.
The Group carefully managed cost
and volume pressures to deliver a relatively stable gross margin of
28.0% (2023: 28.4%). Underlying EBITDA1 for the year
remained positive at £0.005m (2023: £0.7m) and with strong working
capital management, we ended the year with a marginally increased
cash position on last year of £2.3m (2023: £2.2m). Given the
receipt of a further £0.7m net cash proceeds from the disposal of
our interests in the Group's South Korean operations post year end;
our cash position will provide the financial stability required to
support future strategic investments.
We recognise the need to deliver
enhanced profitability and cash generation in future years and are
encouraged by the strategic progress seen in the latter part of the
year and the continuation of this into the new financial year.
Strategy
Under the leadership of our
recently appointed Chief Executive, we launched a comprehensive
five-year strategic plan with our core goal and purpose being the
ambition to drive value for our shareholders and stakeholders. A
significant milestone within this strategy was the decision to exit
the loss-making South Korean business, enabling us to focus on core
markets closer to home where we see the greatest potential for
growth and profitability. By simplifying our operations, driving a
more focussed product range and prioritising high-margin
opportunities, we are laying the foundations to create a more agile
organisation, capable of responding effectively to evolving market
demands. We continue to explore ways to expand the market
opportunity and business, reviewing new adjacent market sectors,
widening customer networks and reviewing and improving the product
range. The early results of this strategy are promising, and we are
committed to its successful execution.
Dividends
Consistent with the decision taken
at the time of the Group's interim results, the Board has taken the
difficult decision not to recommend a final dividend for this
financial year. This approach reflects our priority to rebuild
profitability and invest in opportunities that drive long-term
shareholder value. We understand the importance of dividends to our
shareholders and are committed to reinstating a progressive
dividend policy as soon as our performance supports it.
Our people and culture
Our progress would not have been
possible without the resilience and commitment of our people. Over
the past year, they have adapted to significant changes in
leadership and key initiatives while navigating difficult market
conditions. I am grateful for their efforts and the culture of
ambition and collaboration they have fostered, which is central to
Titon's strategy and ambitions.
Board
We have seen significant board
changes during the year; I expect more stability going forward. I
joined in January 2024, and we welcomed Chief Executive Tom
Carpenter in April 2024. Tyson Anderson and Nick Howlett left the Board during the latter part of the
year, and I want to thank them for their contributions during their
many years with Titon. I am confident that we now have a strong and
effective Board capable of guiding Titon through the next stage of
its evolution.
Investors
Open communication with our
investors is a cornerstone of our approach. Throughout the year, we
have ensured regular engagement and provided updates on our
progress, an area we have focussed on enhancing this year. We
remain committed to transparency and welcome dialogue with our
shareholders as we continue to execute our strategy.
Outlook
The recent cash completion of our
exit from the South Korean operations has reinforced our focus and
strengthened our financial position. As we look ahead, we see 2025
as a pivotal year for Titon. While challenges persist, the progress
made in realigning our business and focussing on key markets gives
us confidence in our future. The performance in the first quarter
of 2025 has been slightly ahead of our expectations and the
increased order book and book to bill ratio is encouraging. Early
signs of market recovery, alongside our strategic initiatives,
provide a solid foundation for growth. On behalf of the Board, I
thank all our stakeholders for their ongoing support as we work to
deliver long term sustainable value.
On behalf of the Board.
Jamie Brooke
Chair
22 January 2025
Notes:
(Non IFRS GAAP measures)
1 The Group uses some
alternative performance measures (APMs) to track and assess the
underlying performance of the business. These measures include
underlying operating loss, underlying loss before tax and
underlying EBITDA. The reconciliation of the Group's reported
profit before tax to adjusted profit measures of
performance is summarised in the table on page
10.
2 The Group's FY23 results
have been restated to classify the Group's South Korean operations
as a discontinued operation, consistent with the FY24 reporting
approach. Revenue and performance metrics, including the changes
reported in FY24 against FY23, stated in this report therefore
represent the continuing operations of the Group, excluding the
results of the Group's former South Korean subsidiary and
associated company.
Strategic
Report
The Strategic Report has been prepared in accordance with
Section 414C of the Companies Act 2006 (the "Act"). Its purpose is
to inform shareholders of Titon Holdings Plc ("Titon" or "the
Company" or "the Group") and help them to assess how the Directors
have performed their legal duty under Section 172 of the Act to
promote the success of the Group.
Chief Executive's Review
Overview of 2024
Titon endured a challenging year
during 2024, as headwinds in our core residential new-build
construction market resulted in a significant drop in both sales
and profitability. However, despite this we made significant
strategic progress. We introduced new leadership to the business
and adopted a more focused and disciplined approach to our decision
making. During this period, we restructured the company reducing
our operating costs and reached an agreement to divest our stake in
the loss-making South Korean business.
Despite recent years of
underperformance, Titon's core strengths remain firmly in place. We
are free of borrowings, we have maintained our year-end cash
position at essentially the same level as at the start of the
period, our product offerings remain competitive, and our workforce
is committed and engaged.
Considering our performance over
the financial year, it is important to provide context regarding
the factors that have shaped Titon's current position and to
outline the actions being undertaken to restore the company to
growth and profitability. Historically, until 2019, our South
Korean business was the primary driver of the Group's
profitability. This strong performance obscured inefficiencies and
weak performance within our core UK business. The subsequent
decline in the South Korean market, compounded by the disruptions
of the Covid-19 pandemic, a significant downturn in the residential
new-build construction sector, and a period of inconsistent
leadership, culminated in the underperformance recorded in
FY24.
I joined Titon in April 2024,
midway through the financial year. My initial assessment was that,
while the company had made efforts to strengthen its management
team and reduce operational costs, it remained overly
inward-looking and lacked strategic clarity and direction. Over
time, organic expansion had introduced complexity, resulting in a
reactive approach, diminished operational effectiveness and an
urgent need for simplification and streamlining. Since joining, my
focus has been on developing a comprehensive transformation
strategy and initiating key actions to drive alignment, improve
efficiency, and position the business for sustainable
growth.
Our South Korean business had
become loss making and was no longer a strategic fit and was a
clear contributor to the unnecessary complexity in the Group.
Consequently, in collaboration with the Board, the decision was
made to negotiate an exit from the business. On 24 October 2024, we
announced that an agreement had been reached to sell our South
Korean interests to our partners for a net cash sum of £0.7m. The
completion of this transaction was announced on 16 December
2024.
Summary Results
Continuing operations
· Revenue decrease of 22.0% to £15.5m (2023: £19.8m)
· Group underlying operating loss before tax and exceptional
items of £0.9m (2023: £0.2m)
· Group operating loss before tax including exceptional items
of £2.4m (2023: £0.2m)
· Loss
per share of 17.41 pence (2023: 1.51 pence)
· Year-end net cash of £2.3m (2023: £2.2m)
· Loss
for the year from discontinued operations of £1.8m (2023: loss of
£0.8m)
Business model
In assessing the performance of
the business, the Directors evaluate the two primary operating
business units:
·
Window and Door Hardware: This business unit
designs, manufactures and sells natural ventilation products
(trickle vents) and hardware solutions for the window and door
fabricator markets across the UK, Europe and the United States.
Sales from this business unit accounted for 54% of the Groups
revenue from continuing operations in this period (2023:
50%).
·
Mechanical Ventilation Systems: This business
unit designs, manufactures and sells mechanical ventilation systems
tailored for residential applications across UK and Europe. Sales
from this business unit accounted for 46% of the Groups revenue
from continuing operations in this period (2023: 50%).
The principal activities within
these business units include design, manufacturing, marketing, and
sales.
Titon's strategy is to grow both
business units through market expansion, market penetration, and
the development of new innovative products.
The Group generally organises its
sales and marketing activities into these business units, with
manufacturing and all other services supporting them both on a shared basis. The executive
leadership team manages both business units.
In the UK, the Group has a direct
sales force for each business unit and aims to win specifications
for its products through its dealings with
developers/housebuilders, architects, building services engineers,
window and door profile manufacturers and local authorities. Where
a project isn't specified, Titon aims to sell directly to its wide
customer base of electrical contractors, installers and window
fabricators.
Titon operates in a wide range of
export markets and has made sales to a significant number of
countries from the UK during this year. Our policy for exporting,
in respect of both Window and Door Hardware and Mechanical
Ventilation Systems, is to appoint local distributors. Within the
Mechanical Ventilation Systems business unit, the Group also
supplies OEM (Original Equipment Manufacturer) products for its
customers.
The Group also has a wholly owned
subsidiary, Titon Inc., based in Indiana in the USA. Sales into
this market accounted for 5% of Group revenue from continuing
operations during the year (2023: 4%).
The Group manufactures products in
the UK, which are sold domestically and exported. Products
manufactured in our UK factory account for 73% (2023: 80%) of
overall Group turnover The remaining 27% (2023: 20%) of revenue is
obtained by the sale of products bought-in from third party
manufacturers. These bought-in products tend to be complementary to
and are generally sold alongside our own manufactured
lines.
Our markets
Both business units primarily
serve the residential new build market. The United Kingdom remains
our largest market, accounting for 81% of Group revenue. This
sector is heavily influenced by regulations governing indoor air
quality, occupant comfort, security and energy
efficiency.
In 2024, the UK residential
new-build market experienced a substantial contraction. The Office
for National Statistics reported a 56% decline in new build starts,
while Savills highlighted an 11% reduction in completions during
the first half of the year compared to 2023. However, market
forecasts anticipate a return to modest growth in 2025 and 2026.
These projections, combined with the objectives of the new UK
government and recent growth in our order book, provide a cautious
optimism as we enter 2025.
Window and door hardware
Our window and door hardware
business unit supplies trickle vents and a wide range of
fenestration hardware directly to window, door, and profile
manufacturers. Titon holds a leading position in the UK market for
trickle vents, offering the most extensive product range available.
Additionally, we supply an array of complementary products,
including locks, handles, and hinges.
The market can be broadly
segmented into PVCu and aluminium products. PVCu dominates the
high-volume market, while aluminium is primarily used in premium
residential and non-residential applications. For PVCu customers,
competitive pricing and exceptional customer service are critical,
with most transactions being short cycle, typically fulfilled
within the same month. In the aluminium market, product
specification, technical expertise, and performance are paramount
areas where Titon is well-positioned to excel.
Despite significant contraction in
the window and door hardware market linked to new-build projects,
evidenced by the exit of several PVCu fabricators, we see
opportunities for growth. These include cross-selling a broader
product range to existing customers and expanding our focus on the
aluminium segment. We anticipate that these initiatives, alongside
a broader market recovery, will support modest growth in this
business unit in 2025.
In 2024, the window and door
hardware business unit reported a 16.8% decline in revenue,
decreasing from £10.0m in 2023 to £8.3m. This contraction was
primarily driven by the UK market, where revenues fell 19.9%
year-on-year. In contrast, exports, which represent a smaller
portion of total revenue, declined by only 0.9% and remained
profitable throughout the year.
A review identified key
differences between the UK and export markets. The UK business has
been predominantly focused on PVCu window and door manufacturers,
while the export business serves higher-end aluminium and wood
window manufacturers. The UK window and door hardware business
contracted in line with the broader UK PVCu market, leading to
intensified price competition amidst declining market
volumes.
While we remain committed to
serving PVCu customers, we shifted our focus towards aluminium
product offerings in the UK during the second half of the year.
This strategic pivot began delivering measurable results, improving
margins and contributing to an underlying profit for the business
unit in the final quarter of 2024 and this has continued into
FY25.
Overall, the Group strategy review
has enabled us to realign our focus toward markets and
opportunities with stronger margins and enhanced returns on
investment. Key decisions, including an increased emphasis on the
UK aluminium window and door segment, have collectively positioned
us more favourably for the year ahead.
Mechanical ventilation systems
Our mechanical ventilation systems
business unit delivers a comprehensive range of solutions to the
residential new-build market, with Mechanical Ventilation Heat
Recovery (MVHR) systems representing our largest product category.
As modern homes become increasingly airtight and well-insulated,
effective ventilation has transitioned from an optional feature to
an essential requirement. This business unit has therefore expanded
significantly over the last 15 years and is expected to enjoy
further growth over the medium term. This evolution presents growth
opportunities for Titon by providing innovative systems meeting
both current standards and emerging regulations, such as Part O
requirements aimed at mitigating overheating risks.
Operating in a project-driven
environment, this business unit typically secures medium to
long-term contracts for building developments, with orders
fulfilled over months or years. In 2024, market growth for
ventilation systems was primarily driven by social housing
refurbishment projects, while the residential new-build segment
contracted. Simpler refurbishment-oriented solutions, such as
Positive Input Ventilation (PIV) systems, performed well, whereas
more complex Whole House MVHR systems remained flat. Looking ahead,
we expect demand for MVHR solutions to increase in 2025.
The mechanical ventilation systems
business unit experienced a 27% decline in revenue during 2024,
falling from £9.8m in 2023 to £7.2m. This decline was predominantly
driven by ongoing challenges in the European segment, where we
supply customised mechanical ventilation products to OEM partners
and distributors under their branding. The existing business model
has proven ineffective, yielding unsatisfactory margins and returns
relative to the resources deployed.
Following a strategic review, we
have decided to deprioritise new OEM activities in the European
region, concentrating on standard products and engaging only in
business opportunities that meet minimum margin
thresholds.
In contrast, the UK ventilation
systems business demonstrated more promising trends despite a 16.6%
year-on-year decline in revenue. Notably, the second half of 2024
saw a substantial increase in ordering activity, with sales growing
9% compared to the first half of the year. Additionally, our market
share in MVHR systems improved after four consecutive quarters of
decline. Between the start and end of the reporting period, the UK
Ventilation Systems order book had more than doubled, positioning
the business for a positive start in 2025.
Strategy
While the company has faced
significant challenges due to market conditions, our results make
it evident that the strategies employed in recent years have not
delivered the desired outcomes. Comparative benchmarking against
our peers reveals that Titon operates with lower margins, slower
growth, and reduced productivity. To address these shortcomings,
the management team and the Board have undertaken a comprehensive
review of the Group's strategy and developed a clear 5-year
strategy and turnaround plan to reposition the company for
sustainable success.
Our benchmarking indicates that
competitors are achieving profitable growth which when combined
with Titon's established product range, production assets,
distribution network and relationships, demonstrates that Titon has
the potential to do the same. Accordingly, we have set an ambitious
target of achieving a blended organic revenue growth rate of 10%
and a net margin of 15% by the end of 2028.
Our purpose is to be the premier
partner for solutions that enhance in-building air quality,
occupant comfort, and security. By delivering competitive solutions
and exceptional service, we aim to outpace our competitors and
solidify our position as a leading player in our target
markets.
Our revenues are currently heavily
reliant on the UK New Build market, leaving both business units
particularly vulnerable to downturns in this sector. Additionally,
our Window and Door Hardware business unit has been overly
concentrated on lower-margin PVCu fabricators, limiting
profitability.
While the UK New Build market
remains a key focus, we recognise the need for both business units
to diversify into adjacent markets to support sustainable future
growth. For example, the Ventilation Systems business can expand
into the Social Housing sector, while the Window and Door Hardware
business unit can target the RMI and Non-Residential Commercial
markets, particularly for aluminium windows and doors.
Geographically, while we will
continue to engage with mainland Europe and the United States on a
tactical basis, prioritising opportunities where margins are
attractive, and our approved and new products align, we believe our
core strategic focus must remain on the United Kingdom. This
approach will enable us to build a stronger foundation for
sustainable growth and resilience. We believe our local design,
testing and sales competency here makes us unique.
The Mechanical Ventilation Systems
business unit will concentrate on influencing project
specifications early in the process through expert design and
technical support. Meanwhile, the Window and Door Hardware business
unit will prioritise delivering high-quality products, supported by
exceptional customer service. To achieve our strategic objectives,
we are focused on excelling in the following five key
areas:
1.
Superior Products: A
streamlined product portfolio to prioritise differentiation and
market relevance.
2.
Consultative Selling:
Proactive engagement with customers early in the project lifecycle
to influence and shape specifications.
3.
Customer Service: Added
value delivered through reliability, responsiveness, and
comprehensive support.
4.
Marketing: Effective
communication of our value proposition, brand, and the generation
of leads.
5.
Efficient Manufacturing and
Organisation: Optimised costs, improved processes, and
enhanced productivity.
To support these priorities, we
have launched a series of internal programs aimed at:
· Improving margins and optimising our product
offerings.
· Enhancing our marketing and improving commercial
operations.
· Entering new adjacent markets.
· Driving operational excellence and increasing organisational
efficiency.
· Engaging employees and developing a high-performance
culture.
These initiatives are designed as
long-term efforts focused on sustainable, incremental improvements
rather than quick fixes. By simplifying our business, strengthening
our operations, and optimising our organisational structure, we aim
to build a resilient and profitable business that delivers value to
all stakeholders.
Organisational structure
We have continued to strengthen
our senior leadership team, successfully recruiting a Sales
Director for our Mechanical Ventilation Systems business unit at
the end of the financial year. This was a strategic appointment
that reflects our commitment to driving growth and supporting new
sector expansion in this key market.
Additionally, we look forward to
onboarding our new Operations Director in February 2025, who we
believe will bring added expertise and change management into our
leadership team.
Outlook
While the financial results for
the year reflect a challenging period, Titon has made significant
progress during this period. I am immensely proud of our team's
resilience and adaptability, which have enabled us to navigate
challenging circumstances and emerge in a stronger position. There
is a growing sense that we have turned a corner.
Our order book saw growth in the
second half of FY24; we entered into the current financial year
with orders at the same levels we exited FY23 and with an improved
book-to-bill ratio of 1.13 (FY23 exit book to bill ratio of
0.92).
The new financial year has begun
positively, with operating profits in the first 3 months of the
year exceeding those of the same period over each of the prior two
years. Our cash flow generation remains robust, and our cash
reserves have also grown with the receipt of funds realised from
the sale of our South Korean operations. These developments
underscore the early success of our turnaround strategy.
As of January 2025, the UK economy
is projected to grow modestly, with forecasts ranging between 1.5%
and 2.0% for the year, alongside government targets to boost
residential construction, which provides a level of cautious
optimism regarding improving market conditions. Whilst we
acknowledge the ongoing uncertainties in our relevant sectors and
the broader UK economy, we anticipate 2025 to be a transitional
year for Titon as we continue to make progress against our
turnaround plan. The Board remains confident that both of our
business units will achieve meaningful progress in 2025, and
further establish a solid foundation for sustained growth and
long-term success.
Financial and operational review
The Consolidated Income Statement
is set out on page 47. A summary of the results for continuing
operations along with other selected Key Performance Indicators
("KPIs") is as follows:
|
|
2024
|
|
2023
|
|
|
|
£'000
|
|
£'000
|
|
|
Revenue
|
15,476
|
|
19,846
|
|
|
Gross
profit
|
4,333
|
|
5,628
|
|
|
Gross
profit margin
|
28.0%
|
|
28.4%
|
|
|
Underlying loss before
exceptionals and tax1
|
(916)
|
|
(155)
|
|
|
Exceptional items
|
(1,515)
|
|
(39)
|
|
|
Operating loss before income
tax
|
(2,431)
|
|
(194)
|
|
|
Income
tax credit
|
473
|
|
25
|
|
|
Loss after income
tax
|
(1,958)
|
|
(169)
|
|
|
Revenue per
employee
|
109
|
|
111
|
|
|
Loss after tax per
employee
|
(13.8)
|
|
(0.9)
|
|
|
Underlying
EBITDA1
|
5
|
|
813
|
|
|
Loss for the year from
discontinued operations
|
(1,813)
|
|
(756)
|
|
|
Year-end net cash and cash
equivalents
|
2,281
|
|
2,238
|
|
Titon faced a challenging
financial year in 2024, reflecting ongoing pressures in its core
markets and the impact of strategic decisions taken to reposition
the business for long-term growth. Revenue decreased by 22%,
falling from £19.8m in 2023 to £15.5m in 2024. This decline was
largely driven by weaker performance in both business units,
primarily influenced by headwinds in the UK New Build
market.
Gross profit reduced from £5.6m in
2023 to £4.3m in 2024, with the gross profit margin remaining
relatively stable at 28.0% compared to 28.4% in the previous year.
This stability underscores the company's ability to manage cost
pressures effectively despite the lower revenue base.
The underlying loss before
exceptionals and tax widened to £0.9m in 2024, compared to a loss
of £0.2m in 2023, reflecting the effect of lower revenue on the
Group's overhead cost base.
Exceptional items for the year
amounted to £1.5m, a significant increase compared to £0.04m in
2023. These exceptional costs were primarily comprised of £0.2m
restructuring costs and £1.3m in a one-off, non-cash inventory
write down. The inventory write-down was the result of a
comprehensive Board review of the slow-moving inventory and
obsolescence allowance. During the Covid-19 pandemic, the company
made substantial purchases of excess inventory in anticipation of
extended supply lead times. While this decision was deemed
necessary to mitigate supply chain disruptions during the global
crisis, the Group now recognises the need to reassess and
recalibrate its purchasing strategy. Given the decline in trading
conditions and the performance challenges faced over the past year,
the decision was made to increase the allowance for slow-moving and
obsolete inventory. This adjustment reflects a more cautious
approach to inventory management moving forward, ensuring that
future purchasing aligns more closely with market conditions and
performance expectations. The impact of this one-off write-down,
while non-cash, underscores the company's commitment to maintaining
a more efficient and aligned inventory strategy as it moves forward
with its turnaround efforts.
As a result, the operating loss
before tax significantly increased to £2.4m in 2024, compared to
£0.2m in the prior year.
The loss on discontinued
operations reflects the overall impact on the sale of our Korean
business. More details on this can be read in note 26.
On a per-employee basis, revenue
fell slightly from £111,000 in 2023 to £109,000 in 2024, while the
loss after tax per employee rose sharply from £900 to £13,800,
reflecting the overall downturn in profitability.
Despite the challenging year, the
company maintained a robust cash position, ending the year with net
cash and cash equivalents of £2.3m, a slight increase from £2.2m in
2023. This stability highlights the company's strong cash
management practices and provides a solid foundation for executing
its turnaround strategy. The Group received a cash consideration
payment of £0.7m after the FY24 year end in respect of its disposal
of the South Korean operations announced in October
2024.
Alternative performance measures
The Group uses a range of non-IFRS
performance measures to monitor the performance of the business.
The Group believes these provide information on the ongoing trading
of the business to help investors and other stakeholders evaluate
the performance of the business and are measures commonly used by
certain investors for evaluating the performance of the Group. In
particular, the Group uses measures that reflect the underlying
performance, on the basis that this aids the user in understanding
the core business performance of the Group. The Group reports
underlying performance in addition to the financial information
prepared under IFRS. The Board believes that underlying performance
provides additional and consistent measures of underlying
performance by removing items that are not closely related to the
Group's day-to-day trading activities, and which would typically be
excluded in assessing the value of the business. Underlying
performance is used by the Board for internal performance analysis,
planning and employee compensation arrangements. This term is not
defined under IFRS and may therefore not be comparable with
similarly titled measures reported by other companies. They are
therefore not intended to be a substitute for, or superior to, IFRS
measures of performance. A reconciliation of underlying to IFRS
performance is shown below. The Board uses its judgement to
consider the classification of items as non-underlying at the
beginning of each financial year and prior to commencement of any
significant restructuring or similar event, subject to the relevant
criteria. Underlying performance may be adjusted for significant
one-off items such as restructuring costs, gains and losses on
disposal of assets, impairment charges and their reversal, the
costs of litigation and its outcome, and one-off non-trading income
and costs. Restructuring costs, which may include redundancy costs
and associated professional fees, are only included as
non-underlying when they will not be incurred in the ongoing
business, and they are incremental to normal operations undertaken
to add value to the business.
The following table shows how
these APMs are calculated:
|
Continuing
operations
|
2024
|
|
2023
|
|
|
£'000
|
|
£'000
|
|
Loss
before income tax
|
(2,431)
|
|
(194)
|
|
Exceptional items (note 27)
|
1,515
|
|
39
|
|
Underlying operating loss
before income tax
|
(916)
|
|
(155)
|
|
Net
interest cost
|
19
|
|
14
|
|
Depreciation and amortisation
|
902
|
|
869
|
|
Underlying
EBITDA
|
5
|
|
728
|
Key Performance Indicators (KPIs)
The Board looks at a range of KPIs
to monitor the performance of the Group throughout the financial
year. These include KPIs to track delivery of the business
strategy. At individual team and departmental level relevant KPIs
are also monitored and tracked regularly. The financial KPIs
monitored by the Board regularly include:
|
KPI
|
Timing
|
|
Group Revenue
|
Measured against budget and prior
year on monthly basis
|
|
Group Profit Before Tax
EBITDA
|
Measured against budget and prior
year on monthly basis
Measured against budget and prior
year on monthly basis
|
|
Individual legal entities' performance
Individual business unit performance
|
Measured against budget and prior
year on monthly basis
Measured against targets and prior
year on weekly basis
|
|
Sales,
margins and prices of core products
|
Top 20 products reviewed monthly
(at business unital management levels and operating
segments)
|
|
Sales to customers
|
Top 20 customers (at business
unital management levels and operating segments). Sales by
individual area sales managers reviewed weekly
|
|
Purchases
|
Top 25 suppliers and delivery
performance reviewed monthly
|
|
Net cash
|
Reviewed monthly by Board and by
senior management
|
|
Working capital
|
Inventory, average debtor days and
average creditor days reviewed monthly by Board and senior
management
|
Graphical representations of some
of these KPIs and other financial performance measures for
continuing operations only for the years ended 30 September are as
follows:
The following graphs show the performance for discontinued
operations:
2023/24 performance
The
financial results for the year are shown above and are discussed
throughout the Annual Report. The significant outcomes for the year
are as follows:
·
New Chief Executive, Tom Carpenter welcomed to
the Group.
·
New Chair, Jamie Brooke welcomed to the
Group.
·
A comprehensive review
was conducted during the year, culminating in the establishment and
implementation of a clear 5-year strategy and turnaround plan for
the business. Significant improvement in working capital including
stock levels and cash generation, reflecting the investment in
people and processes.
·
Achieved sales of £0.6m of our HRV4 range which
was launched in the summer of FY23.
·
Launch of several new key products including the
Hexalock door lock product and the Titon HRV Cool Plus.
·
Continued development of the ERP system to
deliver further improvements to business processes.
·
Implementation of a new CRM system and
improvement to lead management.
·
Continued delivery of all business imperatives as
detailed in last year's report.
·
As part of our drive to improve operating costs
and simplify the business, we restructured the business in July and
reduced the size of our Board.
·
Recruitment was completed for key new strategic
hire of Sales Director - Ventilation Systems.
·
As part of our strategy review and turnaround
efforts, we have undertaken a comprehensive review of roles and
responsibilities within the Group. This process has led to several
key changes designed to ensure that we are operating to our
strengths while maintaining a lean and efficient organisational
structure. By aligning roles more closely with core competencies
and business priorities, we aim to enhance productivity and
streamline decision-making processes.
·
We have continued to enhance leaner, more
efficient processes for some of our manufacturing activities to
increase output to support future growth. We have made further
improvements in our Sales Inventory and Operations Planning (SIOP)
process to create a longer-term, forward-looking plan that will
enable us to achieve our business goals.
·
We reviewed the gross margins mix of our business
units and refocused our attention on meaningful improvements on
margin.
·
Since May 2024, we have seen a significant
increase in orders, with our orders now at similar levels to the
start of the previous financial year. Where we ended FY23 with a
book-to-bill ratio of 0.92, we end FY24 with a book-to-bill of
1.13.
2024/25 activities
The focus for 2024/2025 is to
return to profit through delivery of the strategic initiatives
outlined in the goals and strategy section on pages 5 to 6. We have
set budgets for both business units of our Group which reflect our
view of market conditions: the continued positive impact from the
revisions of building regulations and associated standards and our
internal growth ambitions. Specific initiatives for the current
fiscal year include:
·
Gross Margin Improvement: Enhancing margins
through manufacturing efficiencies, value engineering, and better
product mix.
·
Product Roadmap: Streamlining our product
portfolio, focusing on market-driven innovation and patentable
technologies.
·
Digital & Inbound Marketing: Improving our
online presence, refining our value proposition, and generating
high-quality leads.
·
Commercial Excellence: Aligning the entire
organisation behind exceptional customer service, including after
sales support.
·
Entry Into Adjacent Markets: Diversifying beyond
the residential sector to create a more balanced
business.
·
Operational Excellence: Implementing LEAN
principles, reducing waste, and optimising processes.
·
Organisation Development: Aligning structure,
roles, and responsibilities with business unit performance and
individual strengths.
·
Employee Engagement & Culture: Cultivating
the "Titon Way" to foster accountability, pride, and continuous
professional development.
·
Total Quality: Enhancing quality metrics,
eliminating waste, and pursuing Six Sigma methodologies to become a
world-class manufacturer.
Environmental Social and
Governance Report
Environmental, Social and
Governance (ESG) reporting remains increasingly important for
investors, and we also want to continue demonstrating that we
recognise our own responsibilities to the environment. In 2019 we
publicly committed to becoming a net zero company by
2050.
The UK Government introduced
regulations in April 2023 that require climate-related financial disclosures to be made for publicly
quoted companies, large private companies and LLPs. For companies
quoted on AIM this applies if the business has more than 500
employees, so Titon is not currently required to make these
disclosures but again, the direction of travel is clear and
supports our intentions. We intend to disclose as much as is
practical of our climate related activities.
We believe Titon contributes to
making the world a better place with its purpose being the
provision of fresh, clean air. Nothing has changed this belief in
2024, indeed the incidences of poorly ventilated housing,
especially in the social housing and private rental markets means
that good ventilation is even more necessary than
before.
In the drive for energy efficiency
and ensuring that buildings are adequately ventilated, we work with
a network of stakeholders, including our customers in the window
and door market and the house building market in the UK and Europe.
We also work with trade association Beama Ltd to promote
ventilation in the UK.
Environmental Pillar
The Board recognises its
responsibility to minimise the impact of the Group's activities on
the environment.
The Group seeks to reduce its
environmental impact in a way that benefits a broad group of
stakeholders, including customers, shareholders, employees and the
local community. The Group follows and is certified and audited to
ISO 14001:2015 for Environmental Management Systems within its UK
manufacturing operation and places great emphasis on ensuring that
it conducts its operations such that:
·
Emissions to air, releases to water and land
filling of waste do not cause unacceptable environmental impacts
and do not offend the community.
·
Significant plant and process changes are
assessed and positively pursued to prevent adverse
environmental impacts.
·
Energy is used efficiently, and consumption is
monitored.
·
Natural resources are used
efficiently.
·
Raw material waste is minimised.
·
Waste is reduced, reused or recycled where
practicable.
·
The amount of packaging used for our products is
minimised.
During the previous financial year
Titon joined forces with a Carbon Partner, Auditel, to deliver our
objective of becoming Carbon Neutral, while on our longer-term
journey to reaching Net Zero. This is initially a three-year
programme to calculate our Scope 1,2 and 3 emissions, which will be
increasingly necessary to meet customer requests, and will also
focus on additional actions we can take to reduce those emissions.
Our goal is to align our carbon footprint reduction targets with
broader cost-saving initiatives. We have recently completed the
work for 2023 and will be completing 2024 in due course. Once we
have completed the data gathering, our carbon footprint will be
calculated and audited, and we will have a roadmap of how we
achieve our ambitions, with clear milestones in place. We aim to
report more on this in next year's annual report. We look forward
to working with our supply chain to reduce the Scope 3 emissions as
they will form the largest part of our overall
emissions.
We remain focussed on reducing our
energy usage and maintain detailed records of each area's gas and
electricity consumption with the aim of taking prompt action if any
unexplained increase is observed. The consumption was recorded as
follows:
|
|
2024
|
2023
|
Reduction
|
|
|
kWh
|
kWh
|
|
|
Natural gas
|
361
|
442
|
18%
|
|
Electricity
|
167
|
216
|
22%
|
|
Transport
|
250
|
381
|
35%
|
|
Total kWh
|
778
|
1,039
|
25%
|
In accordance with Statutory
Instrument 2008/410 the Group presents the following information in
respect of its CO2 emissions during the period.
Global Greenhouse Gas (GHG) emissions data for the period
are:
|
|
2024
|
2023
|
|
Source:
|
tCO2e
|
tCO2e
|
|
Scope 1 emissions
|
|
|
|
Combustion of fuel and operation
of facilities
|
420
|
532
|
|
Scope 2 emissions
|
|
|
|
Electricity, heat, steam and
cooling purchased for own
use
|
167
|
216
|
|
Total tonnes of
CO2 equivalent
|
588
|
748
|
|
CO2 emissions normalised per £ million
of sales of manufactured products
|
42.4
|
40.9
|
These sources fall within our
consolidated financial reporting. We do not have responsibility for
any emission sources outside of our consolidated financial
reporting, including those of our Associate Company.
We have used the GHG Protocol
Corporate Accounting and Reporting Standard (revised edition), data
gathered to fulfil our requirements under the CRC Energy Efficiency
scheme, and emission factors from UK Government's GHG Conversion
Factors for Company Reporting 2023.
We have taken action over recent
years to reduce our environmental footprint and will continue to do
so. Actions we have already taken include:
· An
investment of over £150,000 in solar panels, which are installed on
the roof of our Haverhill factory. These panels continue to
generated over 125 Mwh of electricity per year, which we use in the
factory or sell back to the National Grid;
· Installation of LED lighting throughout the Colchester office
and the Haverhill factory;
· Replacing all diesel cars in the company car fleet with
electric vehicles, wherever possible, when they come up for
renewal. We have EV charging points installed at both the
Colchester office and Haverhill site;
· Replacement of older fixed asset plant and machinery with
new, more efficient units, for example our Amada Press which we
purchased in April 2021.
· Installation of a reverse osmosis plant in our paint
facility, which has reduced the usage of caustic soda and
hydrochloric acid by 50%, with an added health and safety
benefit.
· We
have an ongoing initiative to reduce single use packaging for raw
material supplies and have replaced our own plastic packaging with
either cardboard or recycled plastic, wherever possible.
· We
targeted to reduce waste to landfill from the Haverhill production
site by 50% by end 2024 which we achieved, and we have set the same
target for 2024, with a further goal of zero waste to landfill in
subsequent years.
We apply the waste hierarchy, as
laid down in law, and which forms part of our ISO 14001:2015
certification. The basic principles are "Reduce, Reuse and Recycle"
and are incorporated in the Titon Recycling Policy under which we
aim to reduce waste in all our packaging, products and
processes.
We will continue to take all
actions that reduce our energy, water and waste usage. We will also
look to report our environmental footprint using a third-party
reporting mechanism.
Social Pillar
The Group has various published
policies relating to the Social pillar. These are communicated
through our Intranet, noticeboards and the Employee Handbook. Our
comprehensive Employee Handbook published in 2021 includes all of
our employment policies, a summary of the Health and Safety policy,
our Diversity Policy, our Safeguarding and IT Security and our
Environmental policies. The chapter entitled "Valuing Diversity and
Respect at Work" covers the following matters:
· Equal Opportunities
Policy: Titon is committed to
encouraging equality and diversity among our workforce. Our
objective is to create a working environment in which there is no
unlawful discrimination and where all decisions are based on merit.
The policy applies to all employees, workers, agency workers,
contractors and job applicants and covers all of the nine protected
characteristics set out in the Equality Act 2010.
· Bullying and Harassment
Policy: we are committed to
providing a working environment free from bullying and harassment
and this policy covers both at work and out of the workplace,
including work trips, work-related events and social functions. It
also includes all employees, agency, casual workers and independent
contractors.
· Grievance
Policy: every employee has the
right to raise a grievance if they have a genuine complaint about
their job, work or terms and conditions of employment and the
policy principles are written down in the Handbook.
· Disciplinary
Policy: the policy sets out the
process for dealing with disciplinary and performance issues and to
ensure that any matters are dealt with fairly and
consistently.
· Whistleblowing
Policy: Titon is committed to the
highest possible standards of ethical, moral and legal business
conduct. The policy aims to provide a route for employees to raise
any concerns they may have on matters that could have a serious
impact on Titon such as incorrect financial reporting, unlawful
actions or serious improper conduct.
The Safeguarding and IT Security
Policy includes the policies on Anti-Corruption and Modern Slavery
and Human Trafficking. Under the Anti-Corruption Policy the Titon
Group lists a number of fundamental principles and values which it
believes are the foundation of sound and fair business practice and
which are important to uphold. It is the Titon policy to comply
with all laws, rules and regulations governing anti-bribery and
corruption in all countries in which Titon operates. As a UK
company Titon is also bound by English law which covers our conduct
both in the UK and abroad. The penalties for breaching this law are
significant both for the individuals involved and the Company and
we take our legal obligations very seriously.
Titon is committed to the
principles of the Modern Slavery Act 2015 and the abolition of
modern slavery and human trafficking. We do not enter into business
with any organisation which knowingly supports or is found to be
involved in slavery, servitude and forced or compulsory labour. Due
to the nature of our business, we have assessed that we have a low
risk of modern slavery in our business and supply chains. Our
supply chains are limited, and we procure goods and services from a
restricted range of UK and overseas suppliers. We will continue to
embed these principles through our procurement and employment
policies and practices.
Employee Gender Breakdown
As at the end of the financial
year the analysis by gender of employees, was as
follows:
|
|
|
2024
|
2024
|
2024
|
2023
|
2023
|
2023
|
|
|
|
Male
|
Female
|
Total
|
Male
|
Female
|
Total
|
|
Directors
|
4
|
1
|
5
|
5
|
1
|
6
|
|
|
Senior
Managers
|
7
|
3
|
10
|
6
|
2
|
8
|
|
|
Other
|
73
|
46
|
119
|
111
|
58
|
169
|
|
|
Total
|
84
|
50
|
134
|
122
|
61
|
183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We are committed to respecting
human rights across our business operations and aim to comply with
all local and international legislation and
standards.
Corporate Governance Pillar
We have presented our Corporate
Governance position for many years, firstly under the UK Corporate
Governance Code when we were quoted on the Main Market of the
London Stock Exchange and since 2020 under the Quoted Companies
Alliance (QCA) code after we moved to AIM. Please see page 35 of
this Report for the detailed Corporate Governance Report. Our
website also contains more details of the governance disclosure
including how we apply the 10 principles identified by the QCA
Code.
In summary, we are confident that
we have applied the 10 principles identified by the QCA Code
throughout the accounting period in question. There is a new QCA
code for 2024 applicable to Titon from 1 October 2024 and we will
transition to report on this in the next financial year as it takes
effect, but we are confident that we already meet most of the new
principles.
Health and safety
Health and safety is a top
priority for the Group and we expect all employees to take
responsibility for keeping themselves and each other safe. It is
critical as a manufacturing business that our employees operate in
a safe environment and that our Health and Safety culture, policies
and practices are as good as they can be. We are always looking to
improve them and importantly adhere to
them. We continually review and update our Health and Safety
policies and have a dedicated Health and Safety Manager role in the
business. During 2024, we continued to put increased focus on
hazard spotting, reporting and resolution by all employees in order
to further improve the safety of our work environment. We are
pleased to witness significant improvements in this area. The Group
has also developed a Health and Safety roadmap that allows us to
track and manage our health and safety compliance, training and
priority projects.
The approach to health and safety
management for the Group is as follows:
|
Board of
Directors
|
Overall responsibility for setting
policy and performance, promoting excellence in EHS as a personal
and organisational core value and role modelling the expected
behaviours.
|
|
Senior leadership
team
|
Meets weekly to review statistics,
every reported incident and the status of the EHS roadmap. The
Chief Executive, Chief Financial Officer and all Executive
Directors attend. Also promotes excellence in EHS and shows the
expected behaviours.
|
|
Local
management
|
Meets daily to review health and
safety incidents and issues. Responsible for setting expectations,
following the rules set, managing EHS risks and promptly addressing
EHS incidents and issues, including non-compliance.
|
|
All
employees
|
Have the responsibility to look
after the health and safety of themselves and others by proactive
hazard reporting and resolution, prompt reporting of all incidents
and cooperating with instruction and training.
|
|
Health and Safety
Manager
|
Responsible for driving a positive
health and safety culture, supporting resolution of day-to-day
issues, leading on incident investigation and implementing lessons
learned, and implementation of changes to policy.
|
|
Health and Safety
Committee
|
Is represented by operational team
members across all departments and is chaired by the Operations
Director with support from the Health and Safety Manager. The
committee meets monthly to discuss and address operational health
and safety issues. Minutes are produced and distributed along with
an action plan.
|
The accident statistics for our UK
operations are as follows:
· January to
December
2024
19 reported accidents, 2 RIDDOR reported
· January to
December
2023
54 reported accidents, 0 RIDDOR reported
Compared to 2023, we have seen a
reduction in the number of accidents reported in 2024, and the vast
majority of these have been minor. We see this reduction as a
result of our continued promotion of a positive health and safety
culture. Our continued focus on a 'safety first' culture means
we actively encourage the reporting of all incidents, no matter how
minor, so that we can track trends and root causes, which are
reviewed monthly by our internal health and safety committee and
representatives. We also have a robust hazard reporting
process in place where anyone can identify a hazard and, where
possible resolve it. During 2024 over 470 individual hazards
(risks) were reported with 93% of those hazards resolved in year.
The group is very pleased to see that our safety culture continues
to improve, that all incidents are properly reported and
investigated, and that hazard reporting and resolution will help
prevent the occurrence of more serious incidents.
RIDDOR is the Reporting of
Injuries, Diseases and Dangerous Occurrences Regulations 2013.
These Regulations require employers, the self-employed and those in
control of premises to report specified workplace incidents. As at
31 December 2024, we had reached 230 days without a RIDDOR report
being required, which is a reflection of the minor severity rating
of our incidents.
Statement by the Directors in relation to their statutory
duty in accordance with section 172(1) of the Companies Act
2006
In compliance with the Companies
Act 2006, the Board of Directors are required to act in accordance
with a set of general duties. During the year to 30 September 2024,
the Board of Directors consider that they have, individually and
collectively, acted in a way they consider, in good faith, would be
most likely to promote the success of the Company for the benefit
of its shareholders as a whole, having regard to a number of
broader matters including the likely consequence of decisions for
the long term and the Company's wider relationships. In doing so,
the Board holds regard to the matters contained in section 172(1)
(a)-(f) of the Companies Act 2006.
The Directors fulfil their duties
by ensuring that there is a strong governance structure in place
across the Group's operations, backed up by robust
processes.
The strategy for the Group is
regularly monitored by the Board during the year. In respect of
major matters discussed at board level, the likely impact on all
stakeholders are carefully considered and where possible, decisions
are carefully explained and discussed with affected stakeholders
before actions are implemented to engender the necessary
support.
The Group's key stakeholders and
why and how we engage with them are set out below:
|
Stakeholder
Group
|
Why do we engage with
them?
|
How does the Board engage
with them?
|
|
Shareholders
|
The Board
needs to know investors' views so they can be considered when
making strategic and governance decisions.
We aim to
provide fair, balanced and understandable information about the
business to enable informed investment decisions to be
made.
|
We have
regular dialogue with institutional investors and significant
individual shareholders in order to develop an understanding of
their views.
We also
consider the views of our Nominated Adviser and Broker in this
respect and the feedback they receive from shareholders.
Our AGM
is an important forum for private shareholders to meet the board
and ask any questions they may have.
Our
website has an investors section which gives investors direct
access to reports, press releases and other information. There is
also a contact mailbox facility.
We use
Investor Meet Company to present our interim and final results
presentations each year.
|
|
Employees
|
Employee
engagement is critical to our success. We aim to create a diverse
and inclusive workplace where employees can reach their full
potential. This ensures we can retain and develop talented
people.
We have
the highest regard for the health, safety and wellbeing of our
employees.
|
We engage
with our employees through site communications, consultation with
employees, briefings, question boxes, performance reviews, surveys
and notice boards. Employees are also written to individually on
matters which are deemed important. Every employee is issued with a
comprehensive employee handbook with all of the employment
conditions and policies set out clearly so that everyone can see
what is expected of them.
We
perform an annual staff survey and also have recently introduced
monthly pulse surveys.
We
continue to make every effort to protect our employees.
|
|
Customers
|
Our
strategy of attaining sustainable growth in profit and building
goodwill in our brands will only be achieved through an
understanding of the needs of our customers and the markets we
serve.
|
We engage
with our customers through:
· Regular
visits and meetings including virtual meetings
· Industry
exhibitions
· Customer
site tours and presentations
· Our
website
· Supplying
samples and supporting literature
· Delivering
a high standard of technical support
· Providing
design services and support
· Providing
accredited Continuing Professional Development (CPD)
courses
|
|
Suppliers
|
Our
suppliers make an important contribution to our business success.
Engaging with our supply chain means that we can ensure security of
supply and speed to market. Carefully selected high-quality
suppliers ensure we deliver market leading innovative products to
meet our customers' expectations.
|
Our
supplier relationship management is led by our procurement team and
supported by R&D and Sales. We engage with our suppliers by
holding regular meetings with them and via a feedback process
through monitoring their performance.
|
|
Community/
Environment
|
The Board
has a full understanding of the importance of good community
relations. We aim to contribute positively to the communities and
environment in which we operate.
|
We
provide ventilation products that are beneficial to health and that
are better for the environment.
Many of
our capital expenditure projects focus on improving energy
efficiency and reducing environmental emissions from our
factories.
We have
ISO 14001 Accreditation in the UK.
We work
with our stakeholders to promote good indoor air
quality.
|
|
Government and Regulatory
Bodies
|
Government set the regulatory framework within which we
operate. We engage to ensure we can help in shaping new
policies, regulations and standards, which assist in improving
indoor air quality, and ensure compliance with existing
legislation.
|
We
participate in industry bodies and working groups and selective
All-Party Parliamentary Groups
and plenary sessions.
We
participate in and respond to industry and government
consultations.
|
Application of s.172 during the year
We have continued to comply with
the requirements under s.172. Key decisions made
included:
· Restructured the
Board to ensure its effectiveness.
· Onboarded our
new Chief Executive and Chair.
· Produced our
5-year strategic plan.
· Recruited our
Sales Director - Ventilation Systems, a strategic hire.
· Agreed and
negotiated a divestment from our South Korean
operations.
· Agreed a new share
option plan to be presented to shareholders for approval at the
AGM.
Report on Risk
Management
Principal risks and uncertainties
The Group has established
procedures for monitoring and controlling principal operational
risks and these are detailed below. The Board is responsible for
ensuring that the Group maintains an effective risk management
system. It determines the Group's approach to risk, its policies
and the procedures that are implemented to mitigate exposure to
risk.
Process for managing
risk
The Board continually assesses and
monitors the key risks in the business and has developed a risk
management matrix to identify, report and manage its principal
risks and uncertainties. This includes the recording of all
principal risks and uncertainties, which are reviewed annually.
Risks are fully analysed, their potential impact on the business
assessed and relevant mitigations established. The risk matrix is
reviewed regularly at Board Meetings along with the appropriateness
and effectiveness of the key mitigating controls.
The table below highlights the
principal risks and uncertainties which could have a material
impact on the Group's performance and prospects and the mitigating
activities which are aimed at reducing the impact or likelihood of
a major risk materialising. The Board does recognise, however, that
it will not always be possible to eliminate these risks
entirely.
Risk
Matrix
|
Risk
|
Potential
Impact
|
Mitigations
|
|
Business
disruption
The
Group's manufacturing and distribution operations could be
subjected to disruption due to factors including incidents such as
a major fire, a failure of essential IT equipment or a major
cyber-attack on the Group.
There is
also a risk of business disruption if key sub-contractors
experience an incident on their site or were to cease
trading.
|
Incidents
such as a fire at the Group's or
sub-contractor premises or the failure of IT systems could result
in the temporary cessation in activity or disruption of the Group's
production facilities impeding the Group's ability to deliver its
products to its customers.
A
cyber-attack could leave the Group open to a ransom demand or
compromise data security both for the Group and
customers.
|
The Group
has developed business continuity and disaster recovery
plans.
The Group
maintains a significant amount of insurance to cover business
interruption and damage to property from such events. Additional
measures have been taken to ensure the security of the Group and
customer data.
The Group
has an annual building insurance review where actions are raised
and subsequently cleared internally, providing evidence to the
insurer.
The Group
gets a fire risk assessment carried out by an external party every
2 years (last completed 29 October 2024) and annually internally
and actions/suggestions raised are reviewed and actioned
accordingly.
A fire
suppression system is installed in relevant manufacturing
areas.
Visits
take place by the local fire service to review and provide feedback
on fire safety systems and practices.
The Group
implemented multifactor authentication for relevant employees. The
Group has implemented a Cyber Security training and awareness
programme for all employees.
The
Group's strategy is to maintain essential systems in the
Cloud.
The Group
has an email security gateway system in place.
The Group
has a register of Titon owned tooling held at
sub-contractors.
The Group
looks to review sub-contractor insurance and business continuity
policies.
|
|
Risk
|
Potential
Impact
|
Mitigations
|
|
Supply chain
risks
The risk
of extended lead times beyond forecast windows due to restricted
component availability.
The risk
of continued material price inflation and hence margin
erosion.
The risk
of international trade sanctions or interruption of supply due to
geopolitical uncertainty, such as the Russian invasion of Ukraine
and supply interruptions in China.
|
Decrease
in cash due to increased stock holding.
Loss of
customers due to an inability to meet demand or uncompetitive
pricing.
Increased
risk of obsolescence.
Delays in
supplying customers and additional administrative costs.
Prices
may increase which could impact our sales and
profitability.
|
The Group
operates strategic purchasing of key long lead time
items.
The Group
holds weekly Sales Inventory and Operations Planning
reviews.
The Group
has a policy of dual sourcing key components where
possible.
The Group
ensures robust supplier relationship management.
The Group
can implement customer agreements to incorporate specification
changes if required.
The Group
will obtain supplier declarations and compliance information when
required.
|
|
Recruitment and retention of
key staff
The Group
is dependent on the continued employment and performance of its
senior management and other skilled personnel.
|
Loss of
any key staff without adequate and timely replacement could disrupt
business operations and the Group's ability to implement and
deliver its growth strategies and financial
targets.
|
The Group
aims to provide competitive remuneration packages and bonus schemes
to retain and motivate key staff.
|
|
Recruitment and retention of
staff
The Group
is dependent on the continued employment and performance of all
staff.
|
Failure
to maintain adequate staffing levels could impact on all business
activities and the Group's ability to meet its defined
targets.
|
The Group
reviews market conditions, cost of living and the National Living
Wage and aims to provide competitive remuneration packages and
bonus schemes to retain and motivate staff.
The Group
has a robust recruitment and onboarding process.
The Group
has several employee engagement initiatives in place including
training and personal development opportunities and performance
review and objective setting processes.
The Group
has a two-way employee feedback process in place.
|
|
Economic
conditions
The Group
is dependent on the level of activity in the construction industry
in the countries in which it markets its products and is therefore
susceptible to any changes in economic conditions.
|
Lower
levels of construction industry activity within any of the key
markets in which the Group operates could reduce sales and
production volumes adversely, thus affecting the Group's financial
results. This is considered to be a high risk to the Group given
the current inflationary pressures and a predicted low growth
economy.
|
The Group
closely monitors trends in the industry using a wide range of
external data including the Construction Products Association's
reports and forecasts for the UK and other reports in the rest of
the world. Current forecasts for residential new-build and
refurbishment markets in the UK suggest moderate growth in
2025.
The Group
spreads its risk by having multiple product lines and customer
bases across multiple markets and channels. We continually monitor
our reliance on single key customers and actively seek to expand
our customer base.
The Group
monitors product demand on a weekly basis and is able to respond
accordingly in re-allocating or varying resources.
|
|
Risk
|
Potential
Impact
|
Mitigations
|
|
Government action and
policy
The
Group's business is significantly affected by Building Regulations
in its core markets as well as by Government action and policies
relating to public and private investment.
|
Many of
the Group's products are provided to customers in order to help
them to comply with Building Regulations in respect of ventilation.
Changes to Regulations could adversely impact on sales volumes
affecting the Group's financial results.
Additionally, significant downward trends in Government
spending could have an adverse impact on the construction industry
which could impact on sales and production volumes affecting the
Group's financial results.
|
The Group
monitors and attempts to influence Building Regulations through its
work with industry working groups.
Changes
in regulations and Government policy also provide the Group with
new commercial opportunities.
|
|
Product
liability
The Group
manufactures electrical products that could cause injury to people
or property. The Group's products are also often incorporated into
the fabric of a building or dwelling, which could be difficult to
access, repair, recall or replace in the event of product
failure.
|
A product
safety issue or a failure or recall could result in a liability
claim for personal injury or other damage leading to substantial
money settlements, damage to the Group's brand reputation, costs
and expenses and diversion of key management's attention from the
operation of the Group, which could all affect the Group's
financial results.
|
The Group
operates comprehensive quality assurance systems and procedures
within its UK manufacturing processes and is subject to regular
external audit as part of its ISO 9001 accreditation.
Comprehensive end of line testing is carried out on all
in-house manufactured electrical products. Sample testing is
carried out on bought-in hardware products.
Wherever
required, the Group obtains certifications over its products to the
relevant standards of the countries in which it markets its
products. These certifications incorporate electrical safety
testing.
The Group
endeavors to ensure that its products are in compliance with
relevant fire safety regulations.
The Group
maintains product liability insurance to cover personal injury and
property damage claims from product failures as well as
professional indemnity cover for areas of the business where advice
about products is provided as part of the sales process.
|
|
Financial risk
management
The
Group's operations expose it to a variety of financial risks
including fraud, credit and foreign exchange risk.
|
Losses
from any of these financial risks could impact the Group's
financial results.
|
The Group
has financial risk management procedures and controls in place that
seek to limit the adverse effects of the financial
risks.
The Group
took out credit insurance during the year to mitigate the risk of
losses from bad debts.
|
|
Reliance on key customers
and suppliers
Parts of
the Group's business are dependent on key customers and key
suppliers.
|
Failure
to manage relationships with key customers and suppliers could lead
to a loss of business affecting the financial results of the
Group.
|
The
Group's strategic objective is to broaden its customer base
wherever possible.
The Group
focuses on delivering high levels of customer service and maintains
strong relationships with major customers through direct engagement
at all levels. We also maintain close links with suppliers to
ensure products are up to date and service levels are
maintained.
The Group
maintains ISO 9001 standard and a robust complaints
process.
The Group
closely manages its pricing, rebates and commercial terms with its
customers and suppliers to ensure that they remain
competitive.
The Group
has a policy of dual sourcing key components where
possible.
|
This
Strategic Report was approved by the Board on 22 January
2025 and signed on its behalf by:
T
Carpenter
Chief Executive
Directors' Report
The Directors present their report and the Group and Company
financial statements for the year ended 30 September
2024.
The Directors of Titon Holdings
Plc throughout the financial year or subsequent to the year-end are
listed on pages 36 to 37.
A detailed commentary on the
results for the year and discussion of future developments is given
in the Financial and Operational Review on pages 9 to 13 and an
explanation of the Group's business strategy is included within the
Strategic Report on pages 6 to 8.
The Group's compliance with the
QCA Code is set out in the report on page 36.
Substantial shareholders
As at 30 September 2024, the
Company was aware of the following voting interests in its ordinary
share capital, other than Directors' holdings, of 3 per cent or
more in the ordinary share capital of the Company:
|
Name
|
Shares
|
%
|
|
Harwood
Capital LLP
|
3,150,000
|
28.00
|
|
J N
Anderson
|
868,902
|
7.74
|
|
P E
Anderson
|
718,900
|
6.39
|
|
C
Ritchie
|
709,280
|
6.31
|
|
R
Anderson
|
593,750
|
5.28
|
|
D J
Barry
|
561,500
|
4.99
|
Share capital
The total issued ordinary share
capital at 30 September 2024 consisted of 11,248,750 Titon Holdings
Plc shares of 10p each.
Details of the authorised and
issued share capital of the Company as at 30 September 2024 are set
out in note 19 of the Notes to the Financial Statements.
All of the Company's shares are
ranked equally and the rights and obligations attaching to the
Company's shares are set out in the Company's Articles of
Association, copies of which can be obtained from Companies House
in England and Wales and on the Company's website at
www.titon.com/uk/investors/.
There are no restrictions on the
voting rights of shares and there are no restrictions on their
transfer other than:
·
certain restrictions as may from time to time be
imposed by laws and regulations (for example insider trading laws);
and
· pursuant to
Article 19(11) of 'UK MAR' (the EU Market Abuse Regulation as
amended by the Market Abuse Exit Regulations 2020) whereby
Directors of the Company require approval to deal in the Company's
shares (see https://www.fca.org.uk/markets/market-abuse/regulation).
Additionally, the Company is not
aware of any agreements between shareholders of the Company that
may result in restrictions on the transfer of ordinary shares or
voting rights.
Proposed dividends
The Directors do not recommend the
payment of a final ordinary dividend (2023: 0.5 pence final
dividend paid). No interim dividend was paid during the year (2023:
0.5 pence), so the total dividend for the year ended 30 September
2024 is nil pence per share (2023: 1.0 pence).
Research and development
The Directors consider that
research and development continues to play an important role in the
Group's success as the need to provide increasingly energy
efficient ventilation products remains a feature of our market over
the coming years. Further details on our research and development
activities can be found in the Strategic Report.
Investment in research and
development during the year amounted to £613,000 (2023: £658,000),
of which £465,000 (2023: £467,000) was expensed to the income
statement and £148,000 (2023: £191,000) was capitalised as shown in
note 11
Financial risk management
The Directors assess the financial
risks facing the business and spend appropriate time considering
them. The Group has a system of risk management, which identifies
these items and seeks ways of mitigating such risks as far as is
possible. The Report on Risk Management set out on pages 20 to 23
includes information on financial risk and also see note 21 to the
Financial Statements.
Employees
The Group recognises the
importance of its employees in achieving its objectives and has
contractual arrangements in place to encourage and reward loyalty
and to safeguard the interests of the Group.
Employees are provided with
information about the Group's activities via consultation with
employees, other staff meetings and staff notice boards. The Group
aims to foster an environment in which employees and management can
enjoy a free flow of information and ideas.
The Group is an equal
opportunities employer and its policies for recruitment, training,
career development and promotion are based on the aptitude and
abilities of the individual. All these policies are included in the
Employee Handbook which is issued to every employee. See the
Strategic Report for more details.
he Group recognises the importance
of its employees in achieving its objectives and has contractual
arrangements in place to encourage and reward loyalty and to
safeguard the interests of the Group.
Employees are provided with
information about the Group's activities via the Employee
Consultative Committee, other staff meetings and staff notice
boards. The Group aims to foster an environment in which employees
and management can enjoy a free flow of information and
ideas.
The Group is an equal
opportunities employer and its policies for recruitment, training,
career development and promotion are based on the aptitude and
abilities of the individual.
The Group's approach and
responsibilities for social and community issues are not covered in
this report.
Disabled employees
The Group gives full consideration
to the career development and promotion of disabled persons, and to
applications for employment from disabled persons, where the
requirements of the job can be adequately fulfilled by a
handicapped or disabled person.
The Group considers the training
requirements of each disabled person on an individual basis. Where
an employee becomes disabled during the course of their employment,
the Group will consider providing the employee with such means,
including appropriate training, as will enable the employee to
continue to carry out their job, where it reasonably can, or will
attempt to provide an alternative suitable position.
Capital management
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern, so that it can continue to provide returns for
its shareholders and benefits for its other
stakeholders.
The Group considers its capital to
comprise ordinary share capital, share premium, the capital
redemption reserve and accumulated retained earnings (see
'Consolidated Statement of Changes in Equity' on page 51). The
translation reserve is not considered as capital. In order to
maintain or adjust its working capital at an acceptable level and
to meet strategic investment needs, the Group may adjust the amount
of dividends paid to shareholders, return capital to shareholders
or sell assets.
The Group does not seek to
maintain any particular debt to capital ratio but will consider
investment opportunities on their merits and fund them in the most
effective manner.
Environmental issues
An explanation of how the Group
deals with its environmental responsibilities is included within
the Strategic Report, under the heading Environmental Social and
Governance.
Directors' responsibilities
The Directors are responsible for
preparing the annual report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors
to prepare financial statements for each financial year. The
Directors have elected to prepare the Group and Company financial
statements in accordance with International Financial Reporting
Standards and International Financial Reporting Standards adopted
in the United Kingdom ("UK adopted IFRS"). Under company law the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss for the
Group for that period.
In preparing these financial
statements, the Directors are required to:
·
Select suitable accounting policies and then
apply them consistently.
·
Make judgements and accounting estimates that are
reasonable and prudent.
·
State whether they have been prepared in
accordance with IFRSs,, subject to any
material departures disclosed and explained in the financial
statements.
·
Prepare the financial
statements on the going concern basis unless it is inappropriate to
presume that the group and parent company will continue in
business; and
·
Prepare a Directors' Report, a Strategic Report
and Directors' Remuneration Report which comply with the
requirements of the Companies Act 2006.
·
Prepare financial statements in accordance with
the rules of the London Stock Exchange for companies trading
securities on AIM.
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the Group's transactions and disclose with reasonable
accuracy at any time the financial position of the Group and enable
them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities.
Website publication
The Directors are responsible for
ensuring that the annual report and the financial statements are
made available on a website. Financial statements are published on
the Company's website, which can be found at
www.titon.com/uk/investors/
in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial
statements, which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company's website is the
responsibility of the Directors. The Directors are also responsible
for disclosing additional information under Rule 26 of the AIM
Rules, which is available at www.titon.com/uk/investors/.
The Directors' responsibility also extends to the ongoing integrity
of the financial statements contained therein.
The Directors confirm to the best
of their knowledge:
·
the Group financial statements have been prepared
in accordance with International Financial Reporting Standards
(IFRSs) as issued by the IASB and adopted by the UK and give a true
and fair view of the assets, liabilities, financial position and
profit and loss of the Group; and
·
the Annual Report includes a fair review of the
development and performance of the business and the financial
position of the Group and the parent company, together with a
description of the principal risks and uncertainties that they
face.
Directors' statement as to disclosure of information to
auditors
The Directors at the time of
approving the Directors' Report are listed on page 32. Having made
enquiries of fellow Directors and of the Officers of the Company,
each of the Directors confirms that:
·
to the best of each Director's knowledge and
belief, there is no relevant audit information of which the
Company's auditors are unaware; and
·
each Director has taken all steps a Director
ought to have taken to make themselves aware of any information
needed by the Company's auditors for the purpose of their audit and
to establish that the Company's auditors are aware of that
information.
Directors' liability insurance and
indemnity
The Company has purchased
liability insurance cover, which remained in force at the date of
the report, for the benefit of the Directors of the Company which
gives appropriate cover for legal action brought against them. The
Company also provides an indemnity for its Directors (to the extent
permitted by law) in respect of liabilities which could occur as a
result of their office. This indemnity does not provide cover
should a Director be proved to have acted fraudulently or
dishonestly.
Purchase of own shares
The Company has authority from
shareholders to purchase up to 10% of its own ordinary shares in
the market. This authority was not used during the year nor in the
period to 22 January 2025 and the Board intends to seek shareholder
approval to renew the authority at the forthcoming Annual General
Meeting.
In accordance with the Companies
(Acquisition of Own Shares) (Treasury Shares) Regulations 2003,
companies are permitted to hold purchased shares rather than
cancelling them. At 30 September 2024 and 22 January 2025 the
Company held no shares in treasury. The Company may use this power
in the future depending on market conditions and the financial
position of the Company.
Events after the reporting date Since the reporting date, the disposal of both the subsidiary
Titon Korea and associate Browntech Sales Co. Ltd was completed.
£0.7m was received 13 December 2024, marking the cessation of
Korean operations from that date.
Auditors
MHA have expressed their
willingness to continue in office and a resolution to reappoint
them will be proposed the Annual General Meeting.
Going concern
The Group's business activities,
its financial position, together with the factors likely to affect
the Group's performance, are set out in the Strategic Report. In
addition, note 21 to the financial statements includes the Group's
risk management objectives and policies, managing its financial
risk and its exposures to credit risk, foreign exchange risk and
liquidity risk.
The financial statements have been
prepared on a going concern basis. In adopting the going concern
basis the Directors have considered all of the above factors,
including the principal risks set out on pages 20 to 23. Under the
worst-case scenario considered, which is severe and considered
highly unlikely, the Group remains liquid for a period of 12 months
from the date of reporting and the Directors therefore believe, at
the time of approving the financial statements that the Group is
well placed to manage its business risks successfully and remains a
going concern. The key facts and assumptions in reaching this
determination are summarised below.
The financial position remains
robust with cash of £2.3m available to the Group and no debt and
therefore no bank covenants in place. Our base case scenario has
been prepared using forecasts from each of our operating companies,
with each considering both the challenges and opportunities they
are facing because of various market forecasts. Due to the strength
of the Group's balance sheet and market outlook, the Directors
believe there is no material uncertainty around going concern. To
this end a reverse stress test scenario has also been modelled,
with the most extreme conditions being considered. 50% of budgeted
revenue was removed for all continuing operations within the Group
from 1 April 2025 to 31 January 2026 with all direct costs being
reduced accordingly but with all other costs and outflows remaining
the same. The result of this scenario is that we remain cash
positive within 12 months of the signing date. This extreme
scenario excludes all other resources we would have at our disposal
as means of raising further cash, such as:
· the Group owns
the freehold interest in our Haverhill site which had a fair value
of £5.4m in September 2022. This could be used as collateral to
borrow funds from our bank in the form of a mortgage;
· the Group has
significant fixed assets that would have a second-hand market value
that could be realised;
· a rights issue
could be made;
· the Group has a
large stock balance that could be sold on if there was reduced
production;
· salary costs
could be reduced by virtue of either restructuring or through pay
reductions;
Annual General Meeting The Annual General Meeting
of Titon Holdings Plc ("the Company") will be held at the Company's
premises at Falconer Road, Haverhill, CB9 7XU on 25 March 2025
commencing at 10.00 a.m. A notice convening the Annual General
Meeting of the Company for the year ended 30 September 2024 may be
found on page 87 of this document.
Shareholders are being asked to
vote on various items set below (the "Resolutions"). Resolutions 1
to 12 as listed below, are required to be passed as ordinary
resolutions.
Resolution 1 - to receive and adopt the audited
accounts
The Directors recommend that
shareholders adopt the reports of the Directors and the Auditors
and the audited accounts of the Company for the financial year
ended 30 September 2024.
The Directors' Report was approved
by the Board on 22 January 2025 and signed by order of the
Board.
Resolution 2 - to declare a final dividend
The Directors recommend a final
dividend of nil pence per ordinary share.
Resolution 3 - to re-elect Mr Jamie Brooke as a
Director
The Deputy Chair confirms that
since his appointment 2 January 2024, Mr Brooke has shown to be
effective and demonstrates commitment in his role.
Resolution 4 - to re-elect Mr Thomas Carpenter as a
Director
The Chair confirms that following
performance evaluation Mr Carpenter continues to be effective and
demonstrates commitment in his role.
Resolution 5 - to re-elect Ms Carolyn Isom as a
Director
The Chair confirms that following
performance evaluation Ms Isom continues to be effective and
demonstrates commitment in her role.
Resolution 6 - to re-elect Mr Paul Hooper as a
Director
The Chair confirms that following
performance evaluation Mr Hooper continues to be effective and
demonstrates commitment in his role.
Resolution 7 - to re-elect Mr Jeff Ward as a
Director
The Chair confirms that following
performance evaluation Mr Ward continues to be effective and
demonstrates commitment in his role.
Resolution 8 - to re-appoint MHA as
auditors
This resolution proposes that MHA
should be re-appointed as the Company's Auditors and authorises the
Audit Committee to determine their remuneration.
Resolution 9 - to approve the Directors' Remuneration
Report
Resolution 9 in the Notice of
Annual General Meeting, which will be proposed as an Ordinary
Resolution, is to receive and approve the Directors' Remuneration
Report as set out on pages 30 to 34.
Resolution 10 - authority to allot shares
The Companies Act 2006 prevents
directors of a public company from allotting unissued shares, other
than pursuant to an employee share scheme, without the authority of
shareholders in general meeting. In certain circumstances this
could be unduly restrictive. The Directors' existing authority to
allot shares, which was granted at the Annual General Meeting held
on 26 March 2024, will expire at the forthcoming Annual General
Meeting.
Resolution 10 in the notice of
Annual General Meeting will be proposed, as an Ordinary Resolution,
to authorise the Directors to allot ordinary shares in the capital
of the Company up to a maximum nominal amount of £270,000,
representing approximately 24% of the nominal value of the ordinary
shares in issue on 22 January 2025.
The authority conferred by the
resolution will expire on 24 June 2026 or, if sooner, at the 2026
Annual General Meeting.
The Directors have no present
plans to allot unissued shares other than on the exercise of share
options under the Company's employee share option schemes. However,
the Directors believe it to be in the best interests of the Company
that they should continue to have this authority so that such
allotments can take place to finance appropriate business
opportunities that may arise.
Resolution 11 - Approval of the EMI Share Option Plan 2025
and the Standalone Non-Tax Advantaged Option
Agreement
Resolution 11 will approve the
replacement of the Titon EMI Share Option Plan 2021 with the Titon
EMI Share Option Plan 2025 (the principal terms of which are
summarised in the Appendix below and the Rules of which are
produced in draft form to this meeting and, for the purposes of
identification, initialled by the Chair) which shall be and it is
hereby adopted and the Rules be and are hereby approved in such
draft form, subject to such amendments thereto approved by, or by a
committee of, the Directors as are necessary to carry the same into
effect and/or are necessary or desirable to obtain HMRC or other
regulatory approval thereto and the Directors be authorised to do
all acts and things which they may consider necessary or expedient
for implementing and giving effect to the said plan.
That, going forward, any options
subject to the Rules of the Titon EMI Share Option Plan 2025 shall
be granted with an exercise price being equal to the Company's
volume weighted average share price in Bloomberg for the preceding
6 month period ending on the date immediately before an option is
granted, being the valuation methodology approved by HMRC by way of
letter dated 10 December 2024 and subsequent email dated 7 January
2025.
To incentivise non-employees of
the Company, the standalone non-tax advantaged option agreement
(the principal terms of which largely replicate the Titon EMI Share
Option Plan 2025) which is produced in draft form to this meeting,
and for the purposes of identification, initialled by the Chair) be
and are hereby adopted and approved in such draft form, subject to
such amendments thereto approved by, or by a committee of, the
Directors as are necessary to carry the same into effect and/or are
necessary or desirable to obtain HMRC or other regulatory approval
thereto and the Directors be authorised to do all acts and things
which they may consider necessary or expedient for implementing and
giving effect to the standalone non-tax advantaged option
agreement.
Resolution 12 - Approval for the Directors to vote in any
meeting regarding the Titon EMI Share Option Plan 2025 and the
Standalone Non-Tax Advantaged Option Agreement
Resolution 12 in the Notice of
Annual General Meeting will give the Directors power to vote and be
counted in a quorum at any meeting of the Directors at which any
matter connected with the EMI Share Option Plan 2025 or the
Standalone Non-Tax Advantaged Option Agreement is considered,
regardless of any interest they may have in the plan or any non-tax
advantaged options under consideration. This is subject to the
provision that no Director may vote when the Directors are
considering his own individual rights of participation in the
proposed share plan or non-tax advantaged option
agreement.
In addition, there are two
resolutions, being Resolutions 13 and 14, as listed below, which
will be required to be passed as special resolutions.
Resolution 13 - to disapply pre-emption
rights
Unless they are given an
appropriate authority by shareholders, if the Directors wish to
allot any of the unissued shares for cash or grant rights over
shares or sell treasury shares for cash (other than pursuant to an
employee share scheme) they must first offer them to existing
shareholders in proportion to their existing holdings. These are
known as pre-emption rights.
The existing disapplication of
these statutory pre-emption rights, which was granted at the Annual
General Meeting held on 26 March 2024 will expire at the
forthcoming Annual General Meeting. Accordingly, Resolution 13 in
the Notice of Annual General Meeting will be proposed, as a Special
Resolution, to give the Directors power to allot shares or sell
treasury shares without the application of these statutory
pre-emption rights: first, in relation to offers of equity
securities by way of rights issue, open offer or similar
arrangements; and second, in relation to the allotment of equity
securities for cash up to a maximum aggregate nominal amount of
£112,488 (representing approximately 10.0% of the nominal value of
the ordinary shares in issue on 22 January 2025). The power
conferred by this Resolution will expire on 24 June 2026 or, if
sooner, at the 2026 Annual General Meeting.
Resolution 14 - Company's authority to purchase its own
shares
Resolution 14 in the Notice of
Annual General Meeting, which will be proposed as a Special
Resolution, will authorise the Company to make market purchases of
up to 1,124,875 ordinary shares. This represents approximately 10%
of the Company's ordinary shares in issue on 22 January 2025. The
maximum price per share that may be paid shall be the higher of:
(i) 5% above the average of the middle market quotations for
an
ordinary share for the five
business days immediately before the day on which the purchase is
made (exclusive of expenses); and (ii) the higher of the price of
the last independent trade and the highest current independent bid
on the trading venue where the purchase is carried out (exclusive
of expenses). The minimum price shall not be less than 10p per
share. The authority conferred by this resolution will expire on 24
June 2026 or, if sooner, at the 2026 Annual General
Meeting.
Your directors are committed to
managing the Company's capital effectively and although they have
no plans to make such purchases, buying back the Company's ordinary
shares is one of the options they keep under review. Purchases
would only be made after considering the effect on earnings per
share and the benefits for shareholders generally.
The Company may hold in treasury
any of its own shares that it purchases in accordance with the
Companies Act 2006 and the authority conferred by this resolution.
This would give the Company the ability to re-issue treasury shares
quickly and cost effectively and would provide the Company with
greater flexibility in the management of its capital base. The
Company does not currently hold any shares in treasury.
As at 22 January 2025 there were
options outstanding over 285,000 ordinary shares which, if
exercised at that date, would have represented 2.5% of the
Company's issued ordinary share capital. If the authority given by
Resolution 12 was to be fully used, these would then represent 2.5%
of the Company's issued ordinary share capital.
Recommendation
The Directors believe that the
resolutions which are to be proposed at the Annual General Meeting
are in the best interests of the Company and its shareholders as a
whole and recommend that all shareholders vote in favour of them,
as each of the Directors intends to do, in respect of his or her
beneficial holding.
The Directors' Report was approved
by the Board on 22 January 2025 and signed on its behalf
by:
C
V Isom
Company Secretary
Directors' Remuneration
Report
Statement from the Chair of the
Committee
I am pleased to present the
Directors' Remuneration Report for the year ended 30 September
2024.
There has been no change to the
Directors' Remuneration Policy during the period and there have
been no significant changes in individual Director's levels of base
remuneration during the year. There is however a resolution to
introduce a new EMI share option scheme to replace the existing
scheme. Details of this are disclosed in the Directors' report and
the notice of AGM. There were no performance related bonuses paid
in the year as the Group did not meet its targets set out at the
beginning of the year. However, the Remuneration Committee did
agree discretionary amounts payable both to C Isom in respect of
her covering the role of Chief Executive while the position was
vacant, and to G P Hooper while he temporarily covered the Chair
position, while that was also vacant. On behalf of the Board, I
would like to express my thanks to them both for agreeing to the
extra responsibility for those periods.
An Ordinary Resolution will be put
to shareholders at the forthcoming Annual General Meeting to be
held on 25 March 2025, to receive and adopt the Directors'
Remuneration Report.
The Directors' interests in the
ordinary share capital of the Company at the year-end are reported
below on page 32.
Remuneration Committee
The Committee presently consists
of the Chair, Mr J Ward, Mr G P Hooper and Mr J Brooke, all
Non-executive Directors. The Committee has been established by the
Board to set Remuneration Policy and to deal with all matters
relating to Directors' Remuneration and reporting thereon. It has
clear Terms of Reference established by the Board.
Directors' remuneration compared
to certain other distributions are as follows:
|
|
2024
|
2023
|
Percentage
change
|
|
|
£'000
|
£'000
|
|
|
Directors' remuneration
|
632
|
576
|
10%
|
|
Other employee
remuneration
|
5,567
|
6,450
|
(14%)
|
|
Dividend payments to
shareholders
|
56
|
112
|
(50%)
|
Audited
Directors' Remuneration
The remuneration paid to the
Directors during the year, together with a comparison of the
previous year, is as follows:
|
Year
ended
30
September
|
Salary
and
fees
(a)
(b)
|
Benefits in
kind
|
Short
term performance related remuneration
(c)
|
Pension
benefits
|
Total
|
|
Executive Directors:
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
C V Isom
|
2024
|
106
|
2
|
30
|
23
|
161
|
|
|
2023
|
105
|
1
|
-
|
18
|
124
|
|
|
|
|
|
|
|
|
|
T Carpenter
|
2024
|
68
|
-
|
-
|
10
|
78
|
|
|
2023
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
A C French (d)
|
2024
|
-
|
-
|
-
|
-
|
-
|
|
|
2023
|
139
|
-
|
-
|
2
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-executive Directors:
|
|
|
|
|
|
|
|
T N Anderson (e)
|
2024
|
140
|
2
|
-
|
8
|
150
|
|
|
2023
|
89
|
1
|
-
|
9
|
99
|
|
|
|
|
|
|
|
|
|
N C Howlett (f)
|
2024
|
74
|
-
|
-
|
19
|
93
|
|
|
2023
|
56
|
-
|
-
|
5
|
61
|
|
|
|
|
|
|
|
|
|
G P Hooper (c)
|
2024
|
40
|
-
|
4
|
-
|
44
|
|
|
2023
|
40
|
-
|
-
|
-
|
40
|
|
|
|
|
|
|
|
|
|
J Ward
|
2024
|
40
|
-
|
-
|
-
|
40
|
|
|
2023
|
40
|
-
|
-
|
-
|
40
|
|
|
|
|
|
|
|
|
|
K A Ritchie (g)
|
2024
|
21
|
-
|
-
|
-
|
21
|
|
|
2023
|
70
|
1
|
-
|
-
|
71
|
|
|
|
|
|
|
|
|
|
J Brooke
|
2024
|
45
|
-
|
-
|
-
|
45
|
|
|
2023
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
|
Totals
|
2024
|
534
|
4
|
34
|
60
|
632
|
|
|
2023
|
539
|
3
|
-
|
34
|
576
|
(a) A 'salary sacrifice'
system is in operation, where the Company makes a pension
contribution on behalf of each Director, where applicable, and
their salary is reduced by a corresponding amount.
(b) The remuneration package of
each Executive Director includes non-cash benefits, which for C V
Isom and T Carpenter also included the provision of a company car.
The aggregate gains made by Directors on the exercise of share
options during 2024 were £nil (2023: £nil).
(c) In
accordance with the proposals adopted by shareholders, performance
related remuneration is not due for this period to Executive
Directors. However, the Remuneration Committee approved a one-off
payment of £30,000 to C V Isom in recognition of 'acting up' for a
period of a year while the Chief Executive position was vacant.
Also, a one-off payment of £4,000 was also made to G P Hooper in
recognition of him 'acting up' as Chair for the interim period
between K Ritchie's resignation and J Brooke's appointment.
(d) A C French joined the Board on
3 May 2022 and left the Board on 6 April 2023.
(e) T N Anderson was a beneficiary
of an agreement with the Company relating to his departure from the
Company on 11 July 2024 entitling him to a payment of £19,250 which
is included in salary above as well as payment in lieu of notice
amounting to £46,890.
(f) N C Howlett was a beneficiary
of an agreement with the Company relating to his departure from the
Company on 3 September July 2024 entitling him to a payment of
£21,000 which is included in salary above as well as payment in
lieu of notice amounting to £14,500.
(g) K A Ritchie moved from
Executive Chair to Non-executive Chair from 1 October 2023 and
retired from the Group 28 February 2024.
Directors and their interests in shares
The Directors of the Company
during the year and at the year-end and their beneficial interests
in the ordinary share capital were as follows:
|
|
30 September
2024
Ordinary shares
of
10p each
|
30
September 2023
Ordinary
shares of
10p
each
|
|
J Brooke
|
Non-executive Director
|
-
|
-
|
|
C V Isom
|
Chief Financial Officer
|
-
|
-
|
|
T Carpenter
|
Chief Executive
|
-
|
-
|
|
G P Hooper
|
Non-executive Director
|
35,498
|
35,498
|
|
J Ward
|
Non-executive Director
|
-
|
-
|
On 28 October 2024 the Company
announced that the following purchases of ordinary shares of 10p
each had been made by Directors:
|
J Brooke
|
Non-executive Director
|
106,310
|
|
T Carpenter
|
Chief Executive
|
66,500
|
|
J Ward
|
Non-executive Director
|
20,000
|
Share options
Details of the interests of
Directors, who served during the year, in options over ordinary
shares are as follows:
|
|
|
Exercise
price per share
|
At
1
October
2023
|
Granted
during
the year
|
Exercised
during
the year
|
Lapsed
during
the year
|
At
30
September
2024
|
|
|
|
|
Number
|
Number
|
Number
|
Number
|
Number
|
|
T N Anderson
|
(a)
|
58.0p
|
25,000
|
-
|
-
|
25,000
|
-
|
|
T Carpenter
|
(c)
|
70.0p
|
-
|
150,000
|
-
|
-
|
150,000
|
|
C V Isom
|
(b)
|
138.5p
|
50,000
|
-
|
-
|
-
|
50,000
|
|
|
|
|
|
|
|
|
|
Share options
Share
options are exercisable between the following dates:
|
(a)
|
15
January 2017
|
and
|
15
January 2024
|
|
|
(b)
|
15 July
2024
|
and
|
15 July
2031
|
|
|
(c)
|
16 July
2027
|
and
|
15 June
2034
|
The Directors may only exercise
share options if the growth in the earnings per share of the
Company over any period of three consecutive financial years of the
Company following the date of grant, exceeds the growth in the
retail price index over the same period by at least 9 per
cent.
At 30 September
2024 the market price of the Company's shares was 65p. The
range during the year was 63p to 90p.
Directors' Remuneration Policy
Introduction
Our policy is to provide
remuneration packages that are competitive, fair, and designed to
retain, motivate, and reward Directors. We consider the size and
complexity of the Group, and we benchmark against similar companies
in our sector. Under UK law, this policy must be approved by
shareholders at least every three years and is subject to a binding
vote.
Remuneration
Components
Basic salary -
Executive Directors' basic salaries are set by
the Remuneration Committee, considering each individual's role,
responsibilities, performance, and market comparisons. Annual
salary reviews take into account inflation and the salary
adjustments made to other employees. Reviews take effect from 1
October each year.
Benefits -
Executive Directors receive certain taxable
non-cash benefits, including company cars. They also participate in
the Group Life Insurance Scheme, which provides a lump sum payment
of four times their basic salary in the event of death. Private
medical insurance is also provided for both the Executive and their
families.
Pension contributions -
Executive Directors are members of the Company's
defined contribution pension scheme in which the Company's
contribution is a fixed percentage at 5% of basic salary. Benefits
are not pensionable.
Annual Bonus -
Each year, the Committee sets financial and/or
strategic performance targets. Typically, the bonus is based on
achieving EBITDA targets, but the Committee may adjust the measures
when appropriate.
·
Minimum performance: No bonus
·
Target performance: A bonus of 50% of base
salary
·
Maximum performance: A bonus of up to 100% of
base salary
The performance criteria and any
discretion exercised by the Committee will be clearly
disclosed.
Share option schemes
The Company operates a government
approved share option scheme for Directors and staff, granted at
the Remuneration Committee's discretion.
An additional government EMI
scheme has been proposed to the AGM, to be held in March 2025,
where the vesting of options is dependent on the achievement of
certain share price targets. (More information is included in the
Directors' Report and the Notice of AGM).
Directors' service
contracts
Non-Executive Directors have
service contracts that terminate at the conclusion of the Company's
AGM unless they are re-elected as a Director, and they receive fees
determined by the Remuneration Committee. Non-Executive Directors
do not receive pension contributions or participate in share option
schemes, with the exception of the Chair, who will be included
under the new option scheme should this be approved at the Annual
General Meeting.
The Company's policy on the
duration of, and notice periods and termination payments under,
Directors' contracts is designed to attract and retain persons of
the calibre required by the Company, with due regard being given to
the interests of shareholders.
There are no special predetermined
termination payments. Any compensation for loss of office will be
determined on a case-by-case basis.
Directors must not hold other
directorships or business interests without Board approval to
prevent conflicts of interest.
Other policy matters
Any views expressed by
shareholders on the remuneration being paid to Directors would be
taken into consideration by the Remuneration Committee when
reviewing the Directors' Remuneration Policy and in the annual
review of Directors' salaries.
It is the Company's policy that
Directors' notice periods and termination payments will be based on
prevailing best practice guidelines.
Approval
This Remuneration Report and
Remuneration Policy was approved by the Remuneration Committee on
22 January 2025 and signed on its behalf by:
J
Ward
Remuneration Committee
Chair
Corporate Governance
Report
Chair's Introductory Statement
As noted in our ESG report we
present the Corporate Governance Report for the last financial
year. We continue to apply the Quoted Companies Alliance Corporate
Governance Code ("QCA Code") as this fits more naturally with our
listing on the AIM Market. The QCA Code is available from the QCA
and it involves us following ten general principles and ensuring
that a number of minimum disclosure requirements are made in the
Annual Report or on the Company's website,
www.titon.com/uk/investors/.
The website also contains more details of the governance
disclosures. It is then up to us to determine how the ten
principles will be applied. We note that the QCA code has been
updated and will be applying the new Code in future
reports.
J
Brooke
Chair
Compliance with QCA
Code
The Board is accountable to the
Company's shareholders for good corporate governance and the
Company's website sets out how the 10 principles identified in the
QCA Code are applied by the Company. Titon's business approach is based on openness and high
levels of accountability and there is a commitment to high
standards of corporate governance throughout the Group. With an
international presence, the Group acts in accordance with the
national laws of the various countries in which it operates and
encourages the highest standards of business practice and
procedure.
The Board is confident that the
goals and strategy that we have set for our business have been
followed during the year under review. We have continued to treat
our employees fairly, to invest in research and development and to
communicate openly and honestly with our shareholders, to highlight
three of our specific goals.
The Board seeks to instil a
healthy corporate culture in all of its dealings with its
stakeholders and believes that Titon is regarded by those
stakeholders in a positive light and will meet its obligations in a
fair and transparent way. le see the Audit and Risk Committee
Report for a description of the main features of the internal
control process and the risk management system in relation to the
financial reporting process adopted by the Group. The disclosure of
information on significant shareholdings in the Company is shown in
the Directors' Report.
The Directors consider that the
Annual Report and Financial Statements taken as a whole are fair,
balanced and understandable and provide the information necessary
for shareholders to assess the Group's performance, business model
and strategy.
The Group consolidated accounts
are prepared by the Group Financial Controller and are reviewed by
the Chief Financial Officer. The review includes a detailed
inspection of the accounts of all the constituent companies that
comprise the Group along with the relevant consolidation
adjustments and journals.
Composition and operation of the
Board of Directors
As at 30 September 2024 the Board
consisted of the Non-executive Chair, the Chief Executive, the
Chief Financial Officer, and two Non-executive
Directors.
The Board as a whole comprises a
wealth of skills and experience from the wide range of activities
undertaken by its individual members, as follows:
Jamie Brooke was appointed to
the Board on 2 January 2024 and is Non-executive Chair. Jamie has
worked in quoted fund management and private equity, originally
starting out with 3i Plc. Most recently he worked with Hanover
Investors and, prior to this, with the Volantis team under the
umbrellas of Lombard Odier, Henderson and Gartmore. Jamie is
currently a Non-executive Director at Flowtech Fluidpower Plc,
Chapel Down Group Plc, Oryx International Growth Fund Plc, Triple
Point Venture VCT Plc and Kelso Group Holdings Plc. He is also a
member of the Investment Advisory Group to Rockwood Strategic Plc.
He trained as an ACA with Deloitte. Jamie has a service contract
which terminates at the 2025 Annual General Meeting unless he is
re-elected;
Tom Carpenter joined Titon in
April 2024 as Chief Executive. He has a track record of growing
businesses both organically and inorganically and has experience of
working in publicly listed companies having joined Belden Inc. in
2016. Tom has held leadership positions within Belden including
Vice President of Strategy and Business Development, and as
Managing Director of PPC Broadband Inc., a subsidiary of Belden.
Prior to this, Tom held various leadership positions including as
Chief Executive Officer at M2FX Limited. Tom holds a Masters in
Business Administration from Loughborough University and a Degree
in Manufacturing Systems Engineering from Nottingham Trent
University.
Carolyn Isom joined Titon in
December 2019 as Finance Director of Titon Hardware and was
appointed to the Titon Holdings Board as Chief Financial Officer in
December 2021. She is ACCA qualified and has worked for a number of
companies in the construction sector.
Jeff Ward joined the Board of
Titon on 1 April 2022. Jeff is currently CEO of Guardian Fall, one
of the largest independent height safety companies in the world. He
was previously CEO of Centurion Safety Products from December 2015
until July 2020 and before then held a number of leadership roles
in hardware and safety businesses where he was responsible for a
range of activities, including sales, marketing, supply chain and
strategy. Jeff holds an MBA from Warwick Business School and also
serves as a Director of the British Safety Industry Federation.
Jeff has a service contract which terminates at the 2025 Annual
General Meeting unless he is re-elected;
Paul Hooper joined the Board
of Titon on 1 April 2022. Paul is currently Chief Executive of The
Alumasc Group plc, a position he has held since April 2003. Alumasc
is a UK-based supplier of sustainable building products and
solutions. He joined Alumasc in April 2001 as Group Managing
Director. His earlier career included a first Managing Director
role with BTR plc in 1992. He subsequently joined Williams Holdings
plc in Special Operations, implementing acquisitions in Europe and
North America, prior to joining Rexam PLC as a Business unital
Managing Director with responsibility for operations in Europe and
South East Asia. Paul holds an MBA from Cranfield School of
Management. Paul has a service contract which terminates at the
2025 Annual General Meeting unless he is re-elected;
All Executive Directors are
subject to annual appraisals of their performance and membership of
relevant board committees, as appropriate, during the financial
year. This takes the form of a review of the targets and objectives
for the period, a meeting with the appraiser and the setting of
targets and objectives for the current year. It also includes a
process whereby a failure to meet the targets is discussed and
changes are agreed to improve performance. A continuing failure to
meet targets or performance could lead ultimately to dismissal. The
Non-executive Directors also provide feedback and appraisal of the
Executive Directors on an ad hoc basis, and this is included in the
appraisals of the relevant individuals.
The Non-executive Chair has a
range of responsibilities to perform including, inter alia, the
proper functioning of the Board of Directors and over-seeing the
strategic development of the Company and Group. The Chief Executive
has a specific range of responsibilities including setting the
strategic development of the Group, the day-to-day management of
the Group and implementing the strategy agreed by the Board. The
two current Non-executive Directors provide a range of skills and
wide experience to the Group alongside the necessary independence,
as required under principle 5, as follows:
1. Mr G P Hooper is
deemed to be independent for the purposes of the Code as he has no
previous links with the Group. Mr G P Hooper was nominated as the
Senior Independent Director of the Board in December
2024.
2. Mr J Ward is deemed
to be independent for the purposes of the Code as he has no
previous links with the Group.
3. Mr J Brooke is
deemed to be independent for the purposes of the Code as he has no
previous links with the Group.
The Board has a schedule of
matters specifically reserved to it for decision including major
capital expenditure decisions, business acquisitions and disposals
and the setting of treasury policy. This also includes matters such
as material financial commitments, commencing or settling major
litigation and appointments to main and subsidiary company boards.
The Executive Directors are involved with day-to-day matters
arising and the size of the Group allows the Board to have rapid
access to any issues which arise in dealings with
stakeholders.
Scheduled Board meetings in 2024
took place monthly with further ad hoc meetings arranged as
necessary. To enable the Board to function effectively and
Directors to discharge their responsibilities, full and timely
access is given to all relevant information. In the case of Board
meetings, this consists of comprehensive management reporting
information and discussion documents regarding specific matters.
All directors commit sufficient time to the Group to discharge
their responsibilities: the executive directors on a full-time
basis, the Non-executive Directors, as required by the needs of the
business.
The individual attendance by
Executive Directors and Non-executive Directors at the Board and
principal Board Committee Meetings held during the financial year
is shown in the table below.
|
|
Main
Board
|
Remuneration
Committee
|
Audit
Committee
|
Nominations
Committee
|
|
Total meetings
held
|
11
|
1
|
3
|
1
|
|
J
Brooke
|
8
|
1
|
2
|
-
|
|
T N
Anderson
|
8
|
-
|
-
|
-
|
|
C V
Isom
|
11
|
1
|
3
|
-
|
|
T
Carpenter
|
4
|
1
|
1
|
-
|
|
N C
Howlett
|
10
|
-
|
-
|
1
|
|
G P
Hooper
|
11
|
1
|
3
|
1
|
|
J
Ward
|
10
|
1
|
-
|
1
|
|
K A
Ritchie
|
6
|
-
|
2
|
1
|
There is an agreed procedure for
Directors to take independent professional advice if necessary and
at the Company's expense. This is in addition to the access which
every Director has to the Company Secretary. The Company Secretary
is charged by the Board with ensuring that Board procedures are
followed.
When new members are appointed to
the Board, they are provided with advice from the Company Secretary
in respect of their role and duties as a public company director.
Furthermore, all Directors have ongoing access to the Company
Secretary for advice during the course of their
appointment.
Appointments to the Board of both
Executive and Non-executive Directors are considered by the
Nominations Committee for endorsement by the Board as a
whole.
Any Director appointed during the
year is required, under the provisions of the Company's Articles of
Association, to retire and seek election by the shareholders at the
next Annual General Meeting. The Articles of Association also
require that one third of the Directors retire by rotation each
year and seek re-election at the Annual General Meeting. The
Directors required to retire are those in office longest since
their previous re-election and in practice this means that each
Director retires at least every three years, in accordance with the
requirements of the Code. It is the Company's practice that all of
the Non-executive Directors will seek re-election at each Annual
General Meeting.
All of the Non-executive Directors
retire at the next Annual General Meeting and being eligible, offer
themselves for re-election.
A statement of Directors'
interests and copies of their service contracts are available for
inspection during usual business hours at the registered office of
the Company, on any weekday (excluding public holidays), and will
be available at the place of the Annual General Meeting for at
least fifteen minutes prior to and during the meeting.
The Remuneration
Committee
The Remuneration Committee Report
is set out on pages 30 to 34. The Remuneration Committee's terms of
reference, established by the Board, are to:
·
determine and to keep under review the Group's
policy on remuneration;
·
determine the basic salaries and non-cash
emoluments payable to all Executive Directors, including Executive
Directors of subsidiary Group companies, giving due consideration
to individual responsibility and performance and to salaries paid
to Executive Directors of similar companies in comparable business
sectors;
·
select the performance targets for the Executive
Directors' bonus arrangements;
·
select the performance conditions relating to the
Group's Share Option Schemes. Such performance conditions to be
aimed to align Directors' interests to shareholder
value;
·
make recommendations to the Board of Directors on
other matters relating to remuneration in the Group; and
·
prepare an annual report on remuneration to the
Company's shareholders for approval by the Board for submission to
a vote of shareholders at the Company's Annual General Meeting and
to advise the Board if it believes that, in any year, there are
particular matters relating to remuneration which should be put to
the Company's shareholders.
Nominations Committee
The Nominations Committee is
responsible for proposing candidates as Directors of Titon Holdings
Plc for endorsement by the Board. The selection of suitable
candidates will be based on the suitability of the person for the
position regardless of age, ethnicity or gender. Candidates may be
either internal or external and executive search consultants may be
used in the process. The Nominations Committee was active during
the year while recruiting the new Chief Executive. The Nominations
Committee at 30 September 2024 comprised the Chair, Mr J Brooke, Mr
J Ward and Mr G P Hooper.
Communications with
shareholders
The Board recognises the
importance of communications with shareholders. The Strategic
Report on pages 2 to 23 gives a detailed review of the business,
and there is regular dialogue with institutional shareholders at
the time of the Group's preliminary announcement of the year end
results and at the half year. The main contact with shareholders is
through the Chair or Chief Executive.
The Group's results and other
announcements are published on the London Stock Exchange RNS
service and on the Company's website.
The Board uses the Annual General
Meeting to communicate with private and institutional investors and
welcomes their participation.
The Corporate Governance Report
was approved by the Board on 22 January 2025 and signed on its
behalf by:
J
Brooke
Chair
Audit Committee
Report
The Audit and Risk Committee
reports to the Board on matters concerning the Group's internal
financial controls, financial reporting and risk management
systems, identifying any matters in respect of which it considers
that action or improvement is needed and making recommendations as
to the steps to be taken.
Composition of the Audit and Risk
Committee
The Audit and Risk Committee is
appointed by the Board for a period of three years and comprised
the Chair, Mr G P Hooper who has extensive financial experience
from his career and position as Chief Executive of The Alumasc
Group Plc and Mr J Brooke who qualified as an ACA with Deloitte and
has chaired and sat on multiple Plc audit committees. I confirm
that the Titon Audit and Risk Committee continues to have
competence relevant to the sector in which the Group
operates.
Role of the Audit and Risk
Committee
The Audit and Risk Committee
operates within defined terms of reference and its main functions
are:
·
to monitor the internal financial control and
risk management systems on which the Group is reliant;
·
to consider whether there is a need for the Group
to have its own internal audit function;
·
to monitor the integrity of the Group's financial
statements and formal announcements relating to the Group's
financial performance, reviewing significant financial reporting
judgements contained in them;
·
to review arrangements by which staff may, in
confidence, raise concerns about possible improprieties in matters
of financial reporting or any other matter;
·
to meet the independent Auditor of the Group to
review their proposed audit programme of work and the subsequent
Audit Report and to assess the effectiveness of the audit process
and the levels of fees paid in respect of both audit and non-audit
work;
·
to make recommendations to the Board in relation
to the appointment, re-appointment or removal of the Auditor, and
to negotiate their remuneration and terms of engagement on audit
and non-audit work; and
·
to monitor and review annually the external
Auditor's independence, objectivity, effectiveness, resources and
qualification.
Review of financial statements
and risks identified
Financial statements issued by the
Group need to be fair, balanced, and understandable. The Committee
reviews the Annual Report as a whole and makes recommendations to
the Board. The Committee has advised the Board that, in its
opinion, the Annual Report and Financial Statements are fair,
balanced and understandable and provides the information necessary
for shareholders to assess the Group's position and performance,
business model and strategy. The Company's unaudited interim
results are also reviewed by the Committee prior to their
publication.
The Committee assesses annually
whether it is appropriate to prepare the Group's financial
statements on a going concern basis and makes its recommendation to
the Board. The Board's conclusions are set out in the Directors'
Report. The Committee has been fully involved in all of the
financial forecasting that has been performed and the cash
management steps which have been taken and has made a
recommendation to the Board that the Group should continue to
prepare the financial statements on a going concern
basis.
In planning its own work, and
reviewing the audit plan of the Auditors, the Committee takes
account of the most significant issues and risks, both operational
and financial, likely to impact on the Group's financial
statements.
The Committee considers that the
timing of revenue recognition is a significant area of risk to
accurate financial reporting and ensures that necessary credit note
provisions and warranty provisions are made. In relation to
activities in South Korea, revenues are only recognised once the
third-party customer has accepted the successful installation of
either the first fix or the second fix products into buildings
rather than the delivery of such product from our
factory.
The carrying value of the Group's
assets is an area where the Committee places great emphasis. In
particular, calculating the carrying value for the Group's
inventory is a vital factor as the Group has a wide range of
product lines that may fluctuate regularly in terms of their sales
volumes. Consequently, every product line is assessed at the
year-end to ensure that accurate provisions for obsolescence are
made.
A significant risk considered by
the Committee throughout the year was the Group's investment in its
South Korean business and in particular the accuracy of accounting
information. This risk has been removed due to sale of the South
Korean operations post year end.
Internal audit
The Board believes that due to the
size of the business there is currently no requirement for an
internal audit function. This matter is reviewed
annually.
Internal control
The respective responsibilities of
the Directors in connection with the financial statements are set
out on pages 25 and 26, and those of the Auditors are detailed in
the Independent Auditor's Report on page 45.
The Committee is responsible for
ensuring that suitable internal controls systems to prevent and
detect fraud and error are designed and is also responsible for
reviewing the effectiveness of such controls. The Board confirms
that there is an ongoing process for identifying, evaluating and
managing the significant risks faced by the Group in line with the
FRC's Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting,
published in September 2014 and the FRC's Guidance on Audit
Committees published in April 2016. This process has been in place
for the year under review and up to the date of approval of this
report and accords with the guidance. In particular, the Committee
has reviewed and updated the process for identifying and evaluating
the significant risks affecting the Group and policies by which
these risks are managed. The risks of any failure of such controls
are identified in a Risk Matrix (set out in the Risk Management
Report on pages 20 to 23) which is regularly reviewed by the Board
and which identifies the likelihood and severity of the impact of
such risks and the controls in place to mitigate the probability of
such risks occurring.
Internal control systems are
designed to meet the Group's particular needs and the risks to
which it is exposed. They do not eliminate the risk of failure to
achieve business objectives. The following are the key components
which the Group has in place to provide effective internal
control:
·
an appropriate control environment through the
definition of the organisation structure and authority
levels;
·
the identification of the major business risks
facing the Group and the development of appropriate procedures and
controls to manage these risks;
·
a comprehensive budgeting and reporting system
with monthly results compared with budgets and with previous years;
and
·
the principal aspects of the Group's internal
control processes used in preparing the Group's consolidated
accounts include second reviews of consolidation workings and Board
review of the composition of the Group's financial
information.
The Directors acknowledge that
they are responsible for establishing and maintaining the Group's
system of internal control and risk management and reviewing their
effectiveness, which they have done during the year. Internal
control systems are designed to meet the particular needs of the
Group and the risks to which it is exposed and by their nature can
provide reasonable but not absolute assurance against material
misstatement or loss. Appropriate risk monitoring systems
have been in place throughout the year and up to the date of
approval of the Annual Report and have been regularly reviewed by
the Board. The Report on Risk Management sets out the principal
risks identified by the Directors, the potential impact and the
mitigation measures which apply. No significant weaknesses have
been identified in this report by the Directors during the
year.
The Company has a shareholding in
an associate company. Controls within this entity are not reviewed
as part of the Company's formal review processes due to the local
delegation of managerial responsibilities, but instead are reviewed
as part of regular management process.
External audit
process
The Audit Committee meets at least
twice a year with the Auditor, who provides a planning report in
advance of the annual audit and a report on the annual audit. The
Committee has an opportunity to question and challenge the Auditor
in respect of each of these reports. No significant deficiencies
were noted by the Auditor in respect of the period ended 30
September 2024. The Committee also discussed the basis of
preparation of the going concern opinion and the key audit matters
with the Auditor.
After each audit, the Committee
reviews the audit process and considers its
effectiveness.
Auditor assessment and independence
The Group's external auditor is
MHA.
The Committee reviewed MHA's
independence policies and procedures including quality assurance
procedures and it was confirmed that those policies and procedures
were fit for purpose. Accordingly, the Committee recommends that
MHA should be reappointed as the Group's auditor for the next
financial year and a resolution to that effect will be proposed at
the 2024 Annual General Meeting.
The fees for audit services
provided by MHA for 2024 were £143,000 (2023: £143,000). The
Committee discussed the non-audit services provided by MHA during
the year. The cost of non-audit services provided by the Auditor
for the financial year ended 30 September 2024 was £1,000 (2023:
£1,000).
G P Hooper
Audit and Risk Committee
Chair
22 January 2025
Independent Auditor's Report
To the Members of Titon Holdings Plc
For the purpose of this report,
the terms "we" and "our" denote MHA in relation to UK legal,
professional and regulatory responsibilities and reporting
obligations to the members of Titon Holdings plc. For the purposes
of the table on pages 41 to 43 that sets out the key audit matters
and how our audit addressed the key audit matters, the terms "we"
and "our" refer to MHA. The Group financial statements, as defined
below, consolidate the accounts of Titon Holdings plc and its
subsidiaries (the "Group"). The "Parent Company" is defined as
Titon Holdings plc, as an individual entity. The relevant
legislation governing the Company is the United Kingdom Companies
Act 2006 ("Companies Act 2006").
Opinion
We have audited the financial
statements of Titon Holdings plc for the year ended 30 September
2024.
The financial statements that we
have audited comprise:
· the
Consolidated Income Statement
· the
Consolidated Statement of Comprehensive Income
· the
Consolidated Statement of Financial Position
· the
Company Statement of Financial Position
· the
Consolidated Statement of Changes in Equity
· the
Company Statement of Changes in Equity
· the
Consolidated Statement of Cash Flows
· the
Company Statement of Cash Flows
· Notes 1 to 28 to the consolidated financial statements,
including significant accounting policies
· Notes 1 to 28 to the company financial statements, including
significant accounting policies.
The financial reporting framework
that has been applied in the preparation of the Group and Parent
Company's financial statements is applicable law and International
Financial Reporting Standards and Interpretations (collectively
"IFRSs'") as adopted in the United Kingdom ("UK-adopted
IFRS").
In our opinion, the financial
statements:
· give
a true and fair view of the state of the Group's and of the Parent
Company's affairs as at 30 September 2024 and of the Group's loss
for the year then ended;
· have
been properly prepared in accordance with International Financial
Reporting Standards and Interpretations (collectively "IFRSs'") as
adopted in the United Kingdom ("UK-adopted IFRS"); and
· have
been prepared in accordance with the requirements of the Companies
Act 2006.
Basis for opinion
We conducted our audit in
accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor Responsibilities for
the Audit of the Financial Statements section of our report. We are
independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC's Ethical Standard as
applied to listed entities, and we have fulfilled our ethical
responsibilities in accordance with those requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial
statements, we have concluded that the Directors' use of the going
concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the Directors'
assessment of the Group's and the Parent Company's ability to
continue to adopt the going concern basis of accounting
included:
· The
consideration of inherent risks to the Group's and the Parent
Company's operations and specifically their business
model.
· The
evaluation of how those risks might impact on the available
financial resources.
· Review of the mathematical accuracy of the cashflow forecast
model prepared by management and corroboration of key data inputs
to supporting documentation for consistency of assumptions used
with our knowledge obtained during the audit.
· Liquidity considerations including examination of cash flow
projections at Group and Parent Company level.
· The
evaluation of the base case scenarios and stress scenarios, in
respect of the Group and the Parent Company, and the respective
sensitivities and rationale.
· Assessments of the forecasts Group and Parent Company levels,
including consideration of reserve levels and future business
plans.
· Review of the assets available for security.
Based on the work we have
performed, we have not identified any material uncertainties
relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's and Parent
Company's ability to continue as a going concern for a period of at
least twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the
responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Overview of our audit approach
|
Scope
|
Our audit was scoped by obtaining
an understanding of the Group, including the Parent Company, and
its environment, including the Group's system of internal control,
and assessing the risks of material misstatement in the financial
statements. We also addressed the risk of management override
of internal controls, including assessing whether there was
evidence of bias by the directors that may have represented a risk
of material misstatement.
We undertook full scope audits on
the complete financial information of the Parent Company and main
trading subsidiary. Specified audit procedures were performed by
the component auditors on other entities over specific material
balances.
|
|
Materiality
|
2024
|
2023
|
|
|
Group
|
£176k
|
£224k
|
1% (2023: 1%) of
Group revenue
|
|
Parent Company
|
£97k
|
£131k
|
2% (2023: 2% net
assets) of net assets less Group restriction
|
|
Key audit matters
|
|
|
Recurring
|
·
Revenue Recognition
·
Inventory Valuation
|
|
|
|
|
|
|
|
|
|
|
|
Key Audit Matters
Key Audit Matters are those
matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the
current period and include the most significant assessed risks of
material misstatement (whether or not due to fraud) that we
identified. These matters included those matters which had the
greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
|
|
|
Revenue Recognition
|
|
Key
audit matter description
|
The group recognised revenue from
continuing operations of £15,476m in the financial year (see note
4). The operating segments for continued operations are split
across United Kingdom, North America and Europe. Revenue is
primarily generated from the sale of goods and is measured at the
fair value of the consideration received.
Revenue is one of the most prominent
key performance indicators for the business.
There is a risk that revenue is not
recognised in line with IFRS15 in the appropriate period with
regards to the cut-off of transactions around the
year-end.
Additionally, there is risk over the
revenue occurrence and that transactions are not genuine.
Therefore, revenue may be overstated.
|
|
How the scope of our audit
responded to the key audit matter
|
Our audit work included, but was not
restricted to the following
· we
have completed a walkthrough of each of the key revenue streams
from start to finish, reviewing the documentation of details of the
current internal processes, systems and controls to better
understand them;
· we
have completed controls testing over the revenue controls in place
to ensure there are appropriate controls in place over the
occurrence of revenue.
· we
have completed cut-off testing by selecting a sample of sales
transactions across the various streams either side of the year end
to ensure the revenue has been accounted for in the correct
period;
· substantive testing has been carried out across the different
income streams by picking samples from finance system and tracing
to the appropriate supporting documentation;
· we
have evaluated the Group's revenue recognition in the context of
the 5-step approach as set out within IFRS15.
· we
have directed and assessed the work completed by the component
auditors regarding the method of revenue recognition, its
compliance with the principles of IFRS15 and consideration of the
adequacy of the work performed.
|
|
Key observations
communicated to the Group's Audit Committee
|
Nothing has come to our attention,
based on the results of the testing performed that indicates that
the recognition criteria employed by management is materially
inconsistent with the requirements of IFRS15.
|
|
|
|
Inventory Valuation
|
|
Key audit matter
description
|
At 30 September 2024, the group had
total inventories of £3,496m (see note 14). During the year, an
additional inventory write down of £1.3m that has been included as
an exceptional item.
The inventory held by the Group is a
key material area to the financial statements and accounts for a
large amount of the Group's current assets. Due to the nature of
the Group's operations, the inventory balance is inherently linked
to both the purchases and the sales cycles.
The Group uses a standard costing
model to determine the value of inventory. This carries a risk of
material misstatement due to the use of key management judgements
in respect of overhead and labour recovery rates.
We consider inventory to be a key
audit matter due to its significant importance to the Group's
operations and its linkage to multiple areas of the financial
statements.
|
|
How the scope of our audit
responded to the key audit matter
|
Our audit work included, but was not
restricted to the following:
· we
have reviewed the inventory listing and stock physically present in
the warehouses for any slow-moving or obsolete inventory items
which require write down or providing for and then also reviewed
and considered the appropriateness of the provision made by
management, as well as reperforming the calculations made by
management;
· we
have obtained management's calculations for inventory write downs
and completed additional observations and testing to review whether
there is a need for additional inventory write down;
· we
have performed substantive testing for a sample of inventory items
held at the year end to the original purchase invoice and also to
post year-end sales to ensure inventory is held at the lower of
cost and net realisable value in the financial
statements;
· we
have obtained and reviewed management's calculations and key
judgements regarding the standard costing model used and assessed
the appropriateness of the costs included. We have also tested on a
sample basis payroll and overhead costs back to source invoices and
documentation to confirm the accuracy of the figures used; we have
directed and assessed the work completed by the component auditor
to ensure that the work performed on overseas subsidiaries
sufficiently addresses the risk at Group level.
|
|
Key observations
communicated to the Group's Audit Committee
|
Nothing has come to our attention
from the outcome of our procedures which indicates any material
issues with the valuation of inventory or the provisions for slow
moving, damaged or obsolete goods.
|
Our application of materiality
Our definition of materiality
considers the value of error or omission on the financial
statements that, individually or in aggregate, would change or
influence the economic decision of a reasonably knowledgeable user
of those financial statements. Misstatements below these
levels will not necessarily be evaluated as immaterial as we also
take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole. Materiality is used
in planning the scope of our work, executing that work and
evaluating the results.
Materiality in respect of the
Group was set at £175,500 (2023: 224,000) which was determined on
the basis of 1% (2023: 1%) of the Group's total revenue.
Materiality in respect of the Parent Company was set at £97,000
(2023: £131,000), determined on the basis of 2% (2023: 2%) of the
Parent Company's net assets less group restriction. For the Parent
Company's materiality, a group restriction was then applied using a
mathematical distribution method to allocate materiality to
components, which resulted in a lower materiality for the Parent
Company. Group revenue and net assets were deemed to be the
appropriate benchmark for the calculation of materiality as these
are key areas of the financial statements and also metrics by which
the performance and risk exposure of the Group and Parent Company
are principally assessed and with which the users of the financial
statements are principally concerned.
Performance materiality is the
application of materiality at the individual account or balance
level, set at an amount to reduce, to an appropriately low level,
the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a
whole.
Performance materiality for the
Group was set at £122,500 (2023: £156,800) and at £67,900 (2023:
£91,700) for the Parent Company which represents 70% (2023: 70%) of
the above materiality levels.
The determination of performance
materiality reflects our assessment of the risk of undetected
errors existing, the nature of the systems and controls and the
level of misstatements arising in previous audits.
We agreed to report any corrected
or uncorrected adjustments exceeding £8,750 and £4,850 in respect
of the Group and Parent Company respectively to the Audit Committee
as well as differences below this threshold that in our view
warranted reporting on qualitative grounds.
Overview of the scope of the Group and Parent Company
audits
Our assessment of audit risk,
evaluation of materiality and our determination of performance
materiality sets our audit scope for each company within the Group.
Taken together, this enables us to form an opinion on the
consolidated financial statements. This assessment takes into
account the size, risk profile, organisation / distribution and
effectiveness of group-wide controls, changes in the business
environment and other factors such as recent internal audit results
when assessing the level of work to be performed at each
component.
In assessing the risk of material
misstatement to the consolidated financial statements, and to
ensure we had adequate quantitative and qualitative coverage of
significant accounts in the consolidated financial statements, of
the 5 reporting components of the group, we identified 2 components
in the UK and audited by the Group audit team, being Titon Holdings
Plc and Titon Hardware Ltd, a further 2 which are based in South
Korea being Titon Korea Co. Ltd and Browntech Sales Co. and the
other being Titon Inc. based in the USA.
Full scope audits - Of the 5
components selected, audits of the complete financial information
of 2 components were undertaken, these entities were selected based
upon their size or risk characteristics.
Specified procedures -
|
|
Number of Components
|
Revenue
|
Total Assets
|
Loss before tax
|
|
Full scope audit
|
2
|
97.8%
|
100%
|
55%
|
|
Specific Procedures
|
3
|
2.2%
|
0%
|
45%
|
|
Total
|
5
|
100%
|
100%
|
100%
|
The Group Engagement Team ('GET')
maintained oversight of the Group audit specifically through
communication with the component auditors in South Korea. This was
achieved through the issuance of detailed Group audit instructions
and regular communications in South Korea which allowed for
detailed review and discussion of key audit risks and the work
performed to address these.
The control environment
We evaluated the design and
implementation of those internal controls of the Group, including
the Parent Company, which are relevant to our audit, such as those
relating to the financial reporting cycle. We also tested operating
effectiveness and placed reliance on certain controls over stock
cycle, revenue, purchase, and payroll controls.
Climate-related risks
In planning our audit and gaining
an understanding of the Group and Parent Company, we considered the
potential impact of climate-related risks on the business and its
financial statements. We have agreed with managements' assessment
that climate-related risks are not material to these financial
statements.
Reporting on other
information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The directors are responsible for the other
information contained within the annual report. Our opinion on the
financial statements does not cover the other information and,
except to the extent otherwise explicitly stated in our report, we
do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements, or our knowledge obtained in the
course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this
regard.
Strategic report and directors report
In our opinion, based on the work
undertaken in the course of the audit:
· the
information given in the strategic report and the directors' report
for the financial year for which the financial statements are
prepared is consistent with the financial statements;
and
· the
strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and
understanding of the Group and the Parent Company and their
environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the
directors' report.
Matters on which we are required to report by
exception
We have nothing to report in
respect of the following matters in relation to which the Companies
Act 2006 requires us to report to you if, in our
opinion:
· adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
· the
parent company financial statements are not in agreement with the
accounting records and returns; or
· certain disclosures of directors' remuneration specified by
law are not made; or
· we
have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the
directors' responsibilities statement, the directors are
responsible for the preparation of the financial statements and for
being satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial
statements, the directors are responsible for assessing the Group's
and the Parent Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the Group or Parent Company or to cease
operations, or have no realistic alternative but to do
so.
Auditor responsibilities for the audit of the financial
statements
Our objectives are to obtain
reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our
responsibilities for the financial statements is located on the
FRC's website at: www.frc.org.uk/auditorsresponsibilities
. This description forms part of our auditor's
report.
Extent to which the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud,
are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of
irregularities, including fraud.
These audit procedures were
designed to provide reasonable assurance that the financial
statements were free from fraud or error. The risk of not detecting
a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error and detecting irregularities
that result from fraud is inherently more difficult than detecting
those that result from error, as fraud may involve collusion,
deliberate concealment, forgery or intentional misrepresentations.
Also, the further removed non-compliance with laws and regulations
is from events and transactions reflected in the financial
statements, the less likely we would become aware of it.
Identifying and assessing potential risks arising from
irregularities, including fraud
The extent of the procedures
undertaken to identify and assess the risks of material
misstatement in respect of irregularities, including fraud,
included the following:
· We
considered the nature of the industry and sector, the control
environment, business performance including remuneration policies
and the Group's, including the Parent Company's own risk assessment
that irregularities might occur as a result of fraud or error. From
our sector experience and through discussion with the directors, we
obtained an understanding of the legal and regulatory frameworks
applicable to the Group focusing on laws and regulations that could
reasonably be expected to have a direct material effect on the
financial statements, such as provisions of the Companies Act 2006
and UK tax legislation.
· We
enquired of the directors and management including the audit
committee concerning the Group's and the Parent Company's policies
and procedures relating to:
- identifying, evaluating
and complying with the laws and regulations and whether they were
aware of any instances of non-compliance;
- detecting and
responding to the risks of fraud and whether they had any knowledge
of actual or suspected fraud; and
- the internal controls
established to mitigate risks related to fraud or non-compliance
with laws and regulations.
· We
assessed the susceptibility of the financial statements to material
misstatement, including how fraud might occur by evaluating
management's incentives and opportunities for manipulation of the
financial statements. This included utilising the spectrum of
inherent risk and an evaluation of the risk of management override
of controls. We determined that the principal risks were related to
posting inappropriate journal entries to increase revenue or reduce
costs, creating fictitious transactions to hide losses or to
improve financial performance, and management bias in accounting
estimates.
Audit response to risks identified
In respect of the above
procedures:
· we
corroborated the results of our enquiries through our review of the
minutes of the Group's and the Parent Company's Board and audit
committee meetings.
· audit procedures performed by the engagement team in
connection with the risks identified included:
- reviewing financial
statement disclosures and testing to supporting documentation to
assess compliance with applicable laws and regulations expected to
have a direct impact on the financial statements.
- testing journal
entries, including those processed late for financial statements
preparation, those posted by infrequent or unexpected users, those
posted to unusual account combinations;
- evaluating the business
rationale of significant transactions outside the normal course of
business, and reviewing accounting estimates for bias;
- enquiry of management
around actual and potential litigation and claims.
- challenging the
assumptions and judgements made by management in its significant
accounting estimates; and
· obtaining confirmations from third parties to confirm
existence of a sample of balances.
· we
communicated relevant laws and regulations and potential fraud
risks to all engagement team members, including experts, and the
component auditors and remained alert to any indications of fraud
or non-compliance with laws and regulations throughout the
audit.
Use
of our report
This report is made solely to the
Parent Company's members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Parent Company's members
those matters we are required to state to them in an auditor's
report and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone other than
the Parent Company and the Parent Company's members as a body, for
our audit work, for this report, or for the opinions we have
formed.
Andrew Moyser FCA
FCCA
(Senior Statutory Auditor)
for and on behalf of MHA,
Statutory Auditor
London, United
Kingdom
22 January 2025
MHA is the trading name of
MacIntyre Hudson LLP, a limited liability partnership in England
and Wales (registered number OC312313)
Consolidated Income
Statement
|
|
for the year ended 30 September 2024
|
|
2024
|
2023
|
|
|
|
Note
|
£'000
|
£'000
Restated
|
|
Continuing operations
|
|
|
|
|
Revenue
|
3
|
15,476
|
19,846
|
|
Cost of sales
|
|
(11,143)
|
(14,218)
|
|
Gross profit
|
|
4,333
|
5,628
|
|
Distribution costs
|
|
(1,106)
|
(1,486)
|
|
Administrative expenses
|
|
(3,695)
|
(3,842)
|
|
Research and development
expenses
|
|
(465)
|
(467)
|
|
Other income
|
|
36
|
26
|
|
Underlying operating loss
|
|
(897)
|
(141)
|
|
Finance income
|
5
|
1
|
5
|
|
Finance expense
|
5
|
(20)
|
(19)
|
|
Underlying loss before income tax excluding
exceptionals
|
6
|
(916)
|
(155)
|
|
Exceptional items
|
27
|
(1,515)
|
(39)
|
|
Operating loss before income tax
|
|
(2,431)
|
(194)
|
|
Income tax credit
|
7
|
473
|
25
|
|
Loss for the year from continuing operations excluding
exceptional items
|
|
(443)
|
(130)
|
|
Loss for the year from continuing operations including
exceptional items
|
|
(1,958)
|
(169)
|
|
Loss for the year from discontinued
operations
|
26
|
(1,813)
|
(756)
|
|
Loss for the year
|
|
(3,771)
|
(925)
|
|
Attributable to:
|
|
|
|
|
Equity holders of the
parent
|
|
(3,702)
|
(686)
|
|
Non-controlling
interest
|
|
(69)
|
(239)
|
|
Loss for the year
|
|
(3,771)
|
(925)
|
|
Loss per
share for continuing operations attributed to equity holders of the
parent:
|
|
|
|
|
Basic
|
9
|
(17.41p)
|
(1.51p)
|
|
Diluted
|
9
|
(17.41p)
|
(1.51p)
|
|
Loss per share attributed to
equity holders of the parent:
|
|
|
|
|
Basic
|
9
|
(32.92p)
|
(6.12p)
|
|
Diluted
|
9
|
(32.92p)
|
(6.12p)
|
|
|
|
|
|
Consolidated Statement of Comprehensive
Income
for the year ended 30 September 2024
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
Loss for the year
|
(3,771)
|
(925)
|
|
Other comprehensive income
- items which may be reclassified to profit or loss in subsequent
periods:
|
|
|
|
Exchange
difference on retranslation of net assets of overseas
operations
|
(2)
|
(83)
|
|
Total comprehensive loss for the
year
|
(3,773)
|
(1,008)
|
|
Total comprehensive loss for the
year is attributable to:
|
|
|
|
Equity holders of the
parent
|
(3,703)
|
(775)
|
|
Non-controlling
interest
|
(70)
|
(233)
|
|
|
(3,773)
|
(1,008)
|
|
Total comprehensive loss for the
year attributable to equity holders of the parent arises
from:
|
|
|
|
Continuing operations
|
(1,888)
|
|
|
Discontinued operations
|
(1,815)
|
|
|
|
(3,703)
|
|
|
|
|
|
|
The notes on pages 54 to 85 form
an integral part of these financial statements.
Consolidated Statement of Financial
Position
|
|
at 30 September
2024
|
|
2024
|
2023
|
|
|
|
Note
|
£'000
|
£'000
|
|
Assets
|
|
|
|
|
Property, plant and
equipment
|
10
|
2,765
|
3,183
|
|
Right-of-use assets
|
10
|
402
|
565
|
|
Intangible assets
|
11
|
825
|
926
|
|
Investments in
associates
|
13
|
-
|
2,295
|
|
Deferred tax assets
|
16
|
741
|
264
|
|
Total non-current assets
|
|
4,733
|
7,233
|
|
Inventories
|
14
|
3,496
|
6,139
|
|
Trade and other
receivables
|
15
|
2,986
|
3,754
|
|
Cash and cash
equivalents
|
20
|
2,281
|
2,238
|
|
Total current assets
|
|
8,763
|
12,131
|
|
Current assets classified as held
for sale
|
26
|
788
|
-
|
|
Total Assets
|
|
14,284
|
19,364
|
|
Liabilities
|
|
|
|
|
Lease liabilities
|
18
|
329
|
426
|
|
Total non-current liabilities
|
|
329
|
426
|
|
Trade and other
payables
|
17
|
2,759
|
3,968
|
|
Lease liabilities
|
18
|
150
|
206
|
|
Total current liabilities
|
|
2,909
|
4,174
|
|
Current liabilities directly
associated with the assets held for sale
|
26
|
138
|
-
|
|
Total Liabilities
|
|
3,376
|
4,600
|
|
Equity
|
|
|
|
|
Share capital
|
19
|
1,125
|
1,123
|
|
Share premium
|
19
|
1,106
|
1,096
|
|
Capital redemption
reserve
|
|
56
|
56
|
|
Foreign exchange
reserve
|
|
108
|
109
|
|
Retained earnings
|
|
8,540
|
12,320
|
|
Total Equity attributable to equity holders of the
parent
|
|
10,935
|
14,704
|
|
Non-controlling Interest
|
|
(27)
|
60
|
|
Total Equity
|
|
10,908
|
14,764
|
|
Total Liabilities and Equity
|
|
14,284
|
19,364
|
|
|
|
|
|
|
|
The notes
on pages 54 to 85 form an integral part of these financial
statements.
These
financial statements were approved and
authorised for issue by the Board on 22 January 2025 and
signed on its behalf by:
J Brooke
Chair
Company Statement of Financial Position
at 30 September
2024
Company No. 01604952
|
|
|
|
2024
|
2023
|
|
|
Note
|
£'000
|
£'000
|
|
Assets
|
|
|
|
|
Property, plant and
equipment
|
10
|
1,645
|
1,709
|
|
Investments in
subsidiaries
|
12
|
194
|
554
|
|
Investments in
associates
|
13
|
-
|
225
|
|
Trade and other
receivables
|
15
|
4,962
|
4,811
|
|
Deferred tax assets
|
16
|
4
|
7
|
|
Total non-current assets
|
|
6,805
|
7,306
|
|
|
|
|
|
|
Trade and other
receivables
|
15
|
6
|
4
|
|
Cash and cash
equivalents
|
20
|
13
|
94
|
|
Total current assets
|
|
19
|
98
|
|
Assets classified as held for
sale
|
26
|
705
|
-
|
|
Total Assets
|
|
7,529
|
7,404
|
|
Trade and other
payables
|
17
|
182
|
107
|
|
Total current liabilities
|
|
182
|
107
|
|
Total Liabilities
|
|
182
|
107
|
|
Equity
|
|
|
|
|
Share capital
|
19
|
1,125
|
1,123
|
|
Share premium account
|
19
|
1,106
|
1,096
|
|
Capital redemption
reserve
|
|
56
|
56
|
|
Retained earnings
|
|
5,060
|
5,022
|
|
Total Equity
|
|
7,347
|
7,297
|
|
Total Liabilities and Equity
|
|
7,529
|
7,404
|
|
|
|
|
|
|
As permitted by section 408(3) of
the Companies Act 2006 the Company has elected not to present its
own Statement of Profit and Loss for the year. Titon Holdings Plc
reported a profit before tax for the financial year ended
30 September 2024 of £116,000 (2023: £281,000). The notes on
pages 54 to 85 form an integral part of
these financial statements.
These financial
statements were approved and authorised for issue by the
Board on 22 January 2025 and signed on its behalf by:
J
Brooke
Chair
Consolidated Statement of Changes in Equity
at 30 September
2024
|
|
Share
Capital
|
Share
premium
|
Capital
redemption
reserve
|
Foreign
exchange
reserve
|
Retained
earnings
|
Total
|
Non-
controlling interest
|
Total
Equity
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
At 30 September
2022
|
1,122
|
1,091
|
56
|
198
|
13,179
|
15,646
|
305
|
15,951
|
|
Translation differences
on overseas operations
|
-
|
-
|
-
|
(89)
|
-
|
(89)
|
6
|
(83)
|
|
Loss for
the year
|
-
|
-
|
-
|
-
|
(673)
|
(673)
|
(252)
|
(925)
|
|
Total
Comprehensive Income for the year
|
-
|
-
|
-
|
(89)
|
(673)
|
(673)
|
(245)
|
(1,008)
|
|
Dividends
paid
|
-
|
-
|
-
|
-
|
(112)
|
(112)
|
-
|
(112)
|
|
Share-based payment
expense
|
-
|
-
|
-
|
-
|
(72)
|
(72)
|
-
|
(72)
|
|
Exercise of share
options
|
1
|
5
|
-
|
-
|
-
|
6
|
-
|
6
|
|
Transfer of treasury
shares
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
1
|
(1)
|
|
At 30 September
2023
|
1,123
|
1,096
|
56
|
109
|
12,320
|
14,704
|
60
|
14,764
|
|
Translation differences
on overseas operations
|
-
|
-
|
-
|
(1)
|
-
|
(1)
|
(1)
|
(2)
|
|
Loss for
the year
|
-
|
-
|
-
|
-
|
(3,702)
|
(3,702)
|
(69)
|
(3,771)
|
|
Total
Comprehensive Income for the year
|
-
|
-
|
-
|
-
|
(3,702)
|
(3,703)
|
(70)
|
(3,773)
|
|
Dividends
paid
|
-
|
-
|
-
|
-
|
(56)
|
(56)
|
-
|
(56)
|
|
Share-based payment
expense
|
-
|
-
|
-
|
-
|
(22)
|
(22)
|
-
|
(22)
|
|
Exercise of share
options
|
2
|
10
|
-
|
-
|
-
|
12
|
-
|
12
|
|
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
(17)
|
(17)
|
|
At 30 September
2024
|
1,125
|
1,106
|
56
|
108
|
8,540
|
10,935
|
(27)
|
10,908
|
The notes on pages 54 to 85 form
an integral part of these financial statements.
The
following describes the nature and purpose of each reserve within
equity:
|
Reserve
|
Description and
purpose
|
|
Share
capital
Share
premium
|
Nominal
value of the issued share capital of the Company
Premium
on shares issued in excess of nominal value
|
|
Capital
redemption
|
Amounts
transferred from share capital on redemption of issued
shares
|
|
Foreign
exchange reserve
|
Cumulative gains/losses arising on
retranslating the net assets of overseas operations into
Sterling
|
|
Retained
earnings
|
All other net gains and losses and
transactions with owners (e.g. dividends) not recognised
elsewhere
|
|
Non-controlling interest
|
Interest in subsidiaries not owned
by Titon Holdings Plc shareholders
|
Company Statement of Changes in Equity
at 30 September
2024
|
|
Share
Capital
|
Share
premium
|
Capital
redemption
reserve
|
Retained
earnings
|
Total
Equity
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
At 30 September
2022
|
1,122
|
1,091
|
56
|
4,925
|
7,194
|
|
Profit
for the year
|
-
|
-
|
-
|
281
|
281
|
|
Total
Comprehensive Income for the year
|
-
|
-
|
-
|
281
|
281
|
|
Share-based payment expense
|
-
|
-
|
-
|
(72)
|
(72)
|
|
Dividends
paid
|
-
|
-
|
-
|
(112)
|
(112)
|
|
Exercise
of Share options
|
1
|
5
|
-
|
-
|
6
|
|
At 30 September
2023
|
1,123
|
1,096
|
56
|
5,022
|
7,297
|
|
Profit
for the year
|
-
|
-
|
-
|
116
|
116
|
|
Total
Comprehensive Income for the year
|
-
|
-
|
-
|
116
|
116
|
|
Share-based payment credit
|
-
|
-
|
-
|
(22)
|
(22)
|
|
Dividends
paid
|
-
|
-
|
-
|
(56)
|
(56)
|
|
Exercise
of Share options
|
2
|
10
|
-
|
-
|
12
|
|
At 30 September
2024
|
1,125
|
1,106
|
56
|
5,060
|
7,347
|
The notes on pages 54 to 85 form
an integral part of these financial statements.
The
following describes the nature and purpose of each reserve within
equity:
|
Reserve
|
Description and purpose
|
|
Share
capital
|
Nominal value of the issued share
capital of the Company
|
|
Share
premium
|
Premium
on shares issued in excess of nominal value
|
|
Capital
redemption
|
Amounts
transferred from share capital on redemption and cancellation of
issued shares
|
|
Treasury
shares
|
Weighted
average cost of own shares held in Treasury
|
|
Retained
earnings
|
All other net gains and losses and
transactions with owners (e.g. dividends) not recognised
elsewhere
|
Group and Company Statement of
Cash Flows
|
for for the year ended
30 September 2024
|
|
|
|
|
|
|
Group
|
Company
|
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Cash generated from operating activities
|
|
|
Restated
|
|
|
|
(Loss) / profit before tax from
continuing operations
|
|
(2,431)
|
(194)
|
-
|
278
|
|
(Loss) / profit before income tax
from discontinued operations
|
|
(1,813)
|
(645)
|
119
|
-
|
|
Depreciation of property, plant
& equipment
|
10
|
531
|
533
|
64
|
64
|
|
Depreciation of right-of-use
assets
|
10
|
195
|
240
|
-
|
-
|
|
Amortisation of intangible
assets
|
11
|
240
|
195
|
-
|
-
|
|
Profit on sale of plant &
equipment
|
|
(12)
|
(25)
|
-
|
(11)
|
|
Loss on disposal of
investment
|
26
|
1,558
|
-
|
(119)
|
|
|
Share based payment credit -
equity settled
|
23
|
(22)
|
(72)
|
(22)
|
(72)
|
|
Dividend received from
Associate
|
|
-
|
-
|
-
|
(291)
|
|
Finance income
|
5
|
(1)
|
(5)
|
-
|
(1)
|
|
Finance costs
|
5
|
20
|
27
|
-
|
-
|
|
Share of associate's post-tax
loss
|
26
|
114
|
241
|
-
|
-
|
|
|
|
(1,621)
|
295
|
42
|
(33)
|
|
Decrease in inventories
|
|
2,643
|
431
|
-
|
-
|
|
Decrease / (increase) in
receivables
|
|
698
|
1,288
|
(150)
|
(45)
|
|
(Decrease) / increase in payables
and other current liabilities
|
|
(1,118)
|
(1,082)
|
71
|
(27)
|
|
Cash generated by / (used in) operations
|
|
602
|
932
|
(37)
|
(105)
|
|
Income taxes received
|
|
-
|
220
|
-
|
-
|
|
Net cash generated by / (used in) operating
activities
|
|
602
|
1,152
|
(37)
|
(105)
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Purchase of plant &
equipment
|
10
|
(92)
|
(433)
|
-
|
-
|
|
Purchase of intangible
assets
|
11
|
(221)
|
(205)
|
-
|
-
|
|
Proceeds from sale of plant &
equipment
|
|
34
|
58
|
-
|
11
|
|
Finance income
|
5
|
1
|
5
|
-
|
1
|
|
Dividends received from associate
company
|
|
-
|
290
|
-
|
290
|
|
Net cash (used in) / generated by investing
activities
|
|
(278)
|
(285)
|
-
|
302
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Dividends paid to equity
shareholders of the parent
|
8
|
(56)
|
(112)
|
(56)
|
(112)
|
|
Payment of lease
liability
|
18
|
(177)
|
(243)
|
-
|
-
|
|
Finance costs
|
5
|
(20)
|
(27)
|
-
|
-
|
|
Exercise of share
options
|
23
|
12
|
5
|
12
|
5
|
|
Net cash used in financing activities
|
|
(241)
|
(377)
|
(44)
|
(107)
|
|
Net increase in cash
|
|
83
|
490
|
(81)
|
90
|
|
Effect of exchange rate
changes
|
|
(25)
|
22
|
-
|
-
|
|
Cash at beginning of the
year
|
|
2,238
|
1,726
|
94
|
4
|
|
Cash reclassified to assets held
for resale
|
|
(15)
|
-
|
-
|
-
|
|
Cash and Cash Equivalents at end of the
year
|
|
2,281
|
2,238
|
13
|
94
|
The notes on pages 54 to 85 form
an integral part of these financial
statements.
Notes to the Consolidated Financial
Statements
at 30 September
2024
General information
The consolidated financial statements of the Group for the
year ended 30 September 2024 incorporates Titon Holdings Plc ("the
Company") and its subsidiaries (together referred to as "the
Group").
Titon Holdings Plc is a Company
incorporated in England and Wales and domiciled in the United
Kingdom. The Company's shares are publicly traded on the AIM market
of the London Stock Exchange. The nature of the Group's operations
and its principal activities are set out in the Strategic Report on
page 5. The consolidated financial statements were authorised for
release on 22 January 2025.
1
Material accounting policies
(a)
Basis of preparation
Statement of compliance
The Group and Parent Company
financial statements have been prepared in accordance with
International Financial Reporting Standards and Interpretations
(collectively "IFRSs'") as adopted in the United Kingdom
("UK-adopted IFRS").
The principal material accounting
policies adopted in the preparation of the financial statements are
set out below. The policies have been consistently applied to all
the years presented, unless otherwise stated.
The consolidated financial
statements are presented in GBP, which is the functional currency
of the Parent and all values are rounded to the nearest thousand
(£000), except as otherwise indicated.
The preparation of financial
statements in compliance with adopted IFRS requires the use of
certain critical accounting estimates. It also requires Group
management to exercise judgement in applying the Group's material
accounting policies. The areas where significant judgements and
estimates have been made in preparing the financial statements and
their effect are disclosed in note 2.
There were no new or amended
standards that were required to be adopted by the Group in these
financial statements. The Group does not expect any standards
issued by the IASB, but not yet effective, to have a material
impact on the group.
Going concern
The financial statements have been
prepared on a going concern basis. In adopting the going concern
basis the Directors have considered potential worst-case scenarios
that could have a material impact on the business and from its
other principal risks set out on pages 20 to 23. Under the
worst-case scenario considered, which is severe and considered
highly unlikely, the Group remains liquid for a period of more than
12 months from the date of reporting and the Directors therefore
believe, at the time of approving the financial statements that the
Group is well placed to manage its business risks successfully and
remains a going concern. The key facts and assumptions in reaching
this determination are detailed on pages 26 to 27.
Use of judgement and estimates
In the application of the Group's
accounting policies, management is required to make judgements,
estimates and assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other sources.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and
future periods. The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting date that
have a significant risk of causing a material adjustment to the
carrying amounts of the assets and liabilities within the next
financial year are described under the relevant notes.
New and amended standards adopted by the
Group
A number of new standards or
amendments to existing standards and interpretations became
applicable for the current reporting period:
· Disclosure of Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2
· Definition of Accounting Estimates - Amendments to IAS
8
· Deferred Tax relating to Assets and Liabilities arising from
a Single Transaction - Amendment to IAS 12
The above standards and amendments
did not have a material impact on the Group or Parent Company
financial statements.
Adopted IFRS not yet applied
At the date of approval of these
financial statements the following standards and interpretations
have been published, but have not yet been applied by the Group in
these financial statements:
The following amendment became
effective as at 1 January 2024:
· Amendments to IAS 1 'Classification of liabilities as current
or non-current'
The Directors do not expect that
the adoption of the Standard listed above will have a material
impact on the consolidated financial statements of the Group in
future periods.
IFRS 18 and 19 are applicable for
financial years beginning on or after 1 January 2027 and is not yet
endorsed for use in the United Kingdom. The Company is considering
the impact of IFRS 18 on its future reporting.
(b)
Basis of consolidation
Subsidiaries
The Group's consolidated financial
statements incorporate the financial statements of the Company
(Titon Holdings Plc) and the entities controlled by the Company
(its subsidiaries) made up to 30 September 2024. Control exists
when the Company is exposed to, or has rights to, variable returns
from its involvement with the subsidiary and has the ability to
affect those returns through its power over the
subsidiary.
Intragroup balances, and any
unrealised gains and losses or income and expenses arising from
intragroup transactions, are eliminated in preparing the financial
statements.
Non-controlling interests
A non-controlling interest is the
equity in a subsidiary not attributable, directly or indirectly, to
a parent. Non-controlling interests at the end of reporting period
represent the non-controlling shareholders' portion of the fair
values of the identifiable assets and liabilities of the subsidiary
at the acquisition date and the non-controlling interests' portion
of movements in equity since the date of the combination.
Non-controlling interest is presented within equity, separately
from the parent's shareholders' equity.
Losses within a subsidiary are
attributed to the non-controlling interest even if that results in
deficit balance.
Associates
Where the Group has the power to
participate in (but not control) the financial and operating policy
decisions of another entity, it is classified as an associate.
Associates are initially recognised in the Consolidated Statement of Financial position at
cost.
The Group's share of
post-acquisition profits and losses is recognised in the
consolidated profit or loss, except that losses in excess of the
Group's investment in the associate are not recognised unless there
is an obligation to make good those losses. Profits or losses
arising on transactions between the Group and its associates are
recognised only to the extent of unrelated investors' interests in
the associate.
The investors' share in the
associate's profits or losses resulting from these transactions is
eliminated against the carrying value of the associate. Any premium
paid for an associate above the fair value of the Group's share of
the identifiable assets, liabilities and contingent liabilities
acquired is capitalised and included in the carrying amount of the
associate. The carrying amount of the investment in associates is
subject to impairment in the same way as goodwill arising on a
business combination (see accounting policy (h)).
Business combinations
The consolidated financial
statements incorporate the results of business using the
acquisition method. In the Consolidated Statement of Financial
Position, the Group's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair
values at the acquisition date. The Group's share of the results of
acquired operations are included in the consolidated income
statement from the date on which control is
obtained.
©
Foreign currency
Transactions entered into by group
entities in a currency other than the currency of the primary
economic environment in which they operate (their "functional
currency") are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are
translated at the rates ruling at the reporting date. Exchange
differences arising on the retranslation of unsettled monetary
assets and liabilities are recognised immediately in the
consolidated profit or loss.
On consolidation, the results of
overseas operations are translated into Sterling, which is the
presentational currency of the Parent and Group, at rates
approximating those ruling when the transactions took place. All
assets and liabilities of overseas operations are translated at the
rate ruling at the reporting date. Exchange differences arising on
translating the opening net assets at opening rate and the results
of overseas operations at actual rate are recognised directly in
other comprehensive income.
Upon disposal of all overseas
operations, exchange differences arising from the translation of
the financial statements of foreign operations are recycled and
taken to the consolidated profit or loss as part of the profit or
loss on disposal. The Company has elected, in accordance with IFRS
1, that in respect of all foreign operations, any differences that
have arisen before 1 October 2004 have been set to zero. Any gain
or loss on the subsequent disposal of those foreign operations
would exclude translation differences that arose before the date of
transition to IFRS and include only subsequent translation
differences.
More than 94% (2023: 89%) of sales
from the Group's UK business are invoiced in Sterling.
(c)
Property, plant and equipment
Items of property, plant and
equipment are stated at cost less accumulated depreciation and
impairment losses.
Cost includes the original
purchase price of the asset and the costs attributable to bringing
the asset to its working condition for intended use. All other
repairs and maintenance costs are recognised in the income
statement as incurred.
Freehold land is not depreciated.
Depreciation is provided on all other items of property, plant and
equipment to write down the cost to their residual values over the
estimated useful lives. It is applied at the following
rates:
Freehold
buildings
- 2% per annum straight line
Improvements to leasehold
property - 10% to 20% per annum straight line (or
the lease term, is shorter)
Plant and
equipment
- 10% to 33.3% per annum straight line
Motor
vehicles
- 25% per annum straight line
The estimated useful lives,
residual values and depreciation methods are reviewed at each year
end, with the effect of any changes in estimates accounted for on a
prospective basis.
The gain or loss arising on the
disposal of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset and is
recognised in the statement of comprehensive income.
The carrying values of tangible
property, plant and equipment are reviewed for impairment when
events or changes in circumstances indicate the carrying value may
not be recoverable (see accounting policy (h)).
The Group also recognises
right-of-use assets and lease liabilities under IFRS 16 (see note
18), for most leases with the exception of low value assets based
on the value of the underlying asset when new or for short-term
leases with a lease term of 12 months or less. Right-of-use assets,
which include Property (factory units and office accommodation),
plant and equipment and motor vehicles are initially measured at an
amount equal to the lease liability, adjusted by the amount of any
prepaid or accrued lease payments, and are depreciated on a
straight-line basis to write off the carrying value of the assets
over the contractual term of each lease.
The carrying values of
right-of-use assets are reviewed for impairment when events, such
as a change in the term of the lease, or in other circumstances
indicate the carrying value may not be recoverable (see accounting
policy (h)).
(e) Intangible assets
Intangible assets other than
goodwill that are acquired by the Group are stated at cost less
accumulated amortisation and impairment losses (see accounting
policy (h)). Amortisation is charged to Administrative Expenses
within the Consolidated Income Statement. The
gain or loss arising on the disposal of an intangible asset, other
than goodwill, is determined as the difference between the sales
proceeds (where appropriate) and the carrying amount of the asset
and is recognised in the statement of comprehensive
income.
i
Goodwill
Goodwill represents the excess of
the cost of an acquisition over the fair value of the Group's share
of the net identifiable assets of the acquired subsidiary or
associate at the date of acquisition and subject to annual
impairment testing. Goodwill on acquisitions of subsidiaries is
included in intangible assets. Goodwill associated with the
acquisition of associates is included within the investment in
associates.
Goodwill is not subject to
amortisation but is tested for impairment annually. On disposal of
a subsidiary the attributable amount of goodwill is included in the
determination of the profit or loss recognised in the income
statement on disposal.
ii Internally generated
intangible assets (development costs)
Capitalised development costs are
amortised over the periods the Group expects to benefit from
selling the products developed.
Expenditure on internally
developed products is capitalised if all of the following can be
demonstrated:
·
it is technically feasible to complete the
intangible asset so that it will be available for use or
sale;
·
there is an intention to complete the intangible
asset and use or sell it;
·
an ability to use or sell the intangible
asset;
·
how the intangible asset will generate probable
future economic benefits;
·
the availability of adequate technical, financial
and other resources to complete the development; and
·
the ability to measure reliably the expenditure
attributable to the intangible asset during its
development.
Development costs are amortised
using the straight-line method over their remaining estimated
useful lives from the date that the products are available for sale
to customers, which is normally between 3 and 5 years. The
remaining useful lives of such development assets are assessed by
the Directors annually.
Development expenditure not
satisfying the above criteria and expenditure on the research phase
of internal projects is recognised in the consolidated income
statement as incurred.
iii Computer
software
Costs incurred on the acquisition
of computer software are capitalised if they meet the recognition
criteria of IAS 38 as described above. Computer software costs
recognised as assets are written off over their estimated useful
lives, which is normally between 3 and 10 years.
iv Other intangible
assets
Other intangible assets arising on
business combinations, including patents, are recorded at fair
value at the date of acquisition. Amortisation is charged to the
income statement on a straight-line basis over the estimated useful
lives, which is normally 5 years. The
remaining useful lives of such assets are assessed by the Directors
annually.
v Assets under
development
Assets under development are not
amortised until they are complete and are available for use by the
Group.
vi Subsequent
expenditure
Subsequent expenditure on
capitalised intangible assets is capitalised only when it increases
the future economic benefits embodied in the specific asset to
which it relates. All other expenditure is expensed as
incurred.
f) Inventories
Inventories are stated at the
lower of cost and net realisable value, using the FIFO method. Cost
is calculated as follows:
Raw materials and Bought In
finished
goods
- cost of purchase
Work in
progress and manufactured finished goods -
cost of raw materials and labour, together with
attributable overheads based on the normal level
of activity
Net realisable value is based on
estimated selling price less further costs to completion and
disposal. Slow moving and obsolete inventory is written off to
profit or loss. The charge is reviewed at each reporting
date.
(g) Cash and cash equivalents
Cash and cash equivalents comprise
cash balances, deposits held at call with banks, other short term
highly liquid investments with original maturities of twelve months
or less from inception. The Group has no long-term borrowings and
any available cash surpluses are placed on deposit.
(h) Impairment
The carrying amount of the Group's
assets, other than deferred tax assets, are reviewed at each
balance sheet date to determine whether there is any indication of
impairment. If any such indication exists, the asset's recoverable
amount is estimated. Impairment losses are recognised in the income
statement.
The recoverable amount of an asset
is the greater of its fair value less costs to sell and its value
in use. The value in use is determined as the net present value of
future cash flows expected to be derived from the asset, discounted
using a pre-tax discount rate, with the individual cash generating
units cash flow forecast risks adjusted. The cash generating units
are determined as being the individual trading entities.
Reversals of impairment
Other than in respect of goodwill,
an impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment
loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment
loss had been recognised.
(i) Employee benefits
Share-based payment
transactions
The Company provides share option
schemes for Directors and for other members of staff.
In accordance with IFRS 2 -
Share-based Payments, the fair value of the employee services
received in exchange for the grant of options is recognised as an
expense to the income statement over the vesting period of the
option and the corresponding credit recognised to the Retained
Earnings within equity. The Black-Scholes option pricing model has
been used for calculating the fair value of the Group's share
options. The Directors believe that this model is the most suitable
for calculating the fair value of the equity-based share
options.
The fair value of the options is
determined excluding the impact of any non-market vesting
conditions. Non-market vesting conditions are included in
assumptions about the number of options that are expected to vest.
At each balance sheet date, the Group revises its estimates of the
number of option awards that are expected to vest. The impact of
the revision of original estimates, if any, is recognised in the
income statement, with a corresponding adjustment to equity. No
adjustment is made for failure to achieve market vesting conditions
providing all other vesting conditions are met.
Pension costs
The Group operates a defined
contribution pension scheme. The assets of the scheme are held
separately from those of the Group in independently administered
funds. Contributions to the pension scheme are charged to the
income statement in the year in which they become
payable.
Accrued holiday pay
Provision is made at each balance
sheet date for holidays accrued but not taken at the salary of the
relevant employee at that date.
(j) Provisions
A provision is recognised in the
balance sheet when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an
outflow of economic benefits will be required to settle the
obligation. They are discounted at a pre-tax rate reflecting
current market assessments of the time value of money and risks
specific to the liability.
Provisions are not disclosed
separately but are included in note 17.
(k)
Revenue
Sales of Products
Revenue is primarily generated
from the sale of goods and is measured at the fair value of the
consideration received, which represents the transaction price at
the date of the sale, net of any trade discounts, settlement
discounts, rebates, and value-added tax. The Group has concluded
that it acts as the principal in its revenue arrangements, as it
has control over the goods before transferring them to the
customer.
The Group evaluates whether there
are other promises within the contract that constitute separate
performance obligations to which a portion of the transaction price
should be allocated, such as warranties and volume rebates. In
determining the transaction price for the sale of ventilation
products, the Group considers the impact of any variable
consideration.
Revenue from the sale of goods
arises from transactions with both third parties and related
parties. It is recognised when control of the goods is transferred
to the customer, which typically occurs upon delivery, in
accordance with the terms of the trade contract. Prior to entering
into a contract, the Group assesses the customer's creditworthiness
using a credit reference agency. If sufficient credit cannot be
granted, payment is required in advance of delivery. These advance
payments are recorded under other creditors and recognised as
revenue once the goods have been delivered.
Due to the nature of business
practices at its South Korean subsidiary, the Group recognises
revenue there over time. This is done in two stages: at the first
fix and second fix stages. Invoicing for both stages typically
occurs at the first fix stage; however, revenue for the second fix
stage is deferred in the financial statements until the second fix
products are accepted by the customer.
Volume rebates
The Group provides retrospective
volume rebates to certain customers once the quantity of products
purchases during the period exceeds a threshold as specified in the
agreement. The sales rebate is deducted from sales, and any
liability at the period end is included in other
payables.
Warranty obligations
Some goods sold by the Group
include warranties that require the Group to repair or replace
defective products during the warranty period if the products fail
to meet agreed specifications. In accordance with IFRS 15, these
warranties are not treated as separate performance obligations, and
no revenue is allocated to them. Instead, a provision is made for
the associated costs in accordance with IAS 37 (Provisions,
Contingent Liabilities, and Contingent Assets). The warranty
provision is included in other payables in note 17 and is
calculated as a percentage of applicable sales over a three-year
period. The Group does not offer extended warranties to
customers.
(l) Finance income
Finance income comprises interest
receivable on funds invested.
(m) Corporation and deferred
taxes
Tax on the profit or loss for the
periods presented comprises current and deferred tax.
Current tax
Current tax is the expected
corporation tax payable on the taxable income for the year, using
rates and laws enacted or substantively enacted at the balance
sheet date, and any adjustment to tax payable in respect of
previous years.
Deferred tax
Deferred tax is provided using the
balance sheet liability method, using rates and laws enacted or
substantively enacted at the balance sheet date, providing for
temporary differences between the carrying amounts of assets and
liabilities for financial and reporting purposes and the amounts
used for taxation purposes.
Temporary differences are not
provided on goodwill that is not deductible for tax purposes or on
the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit, to the extent that they will
probably not reverse in the foreseeable future. The amount of
deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and
liabilities, using tax rates enacted or substantively enacted at
the balance sheet date.
A deferred tax asset is recognised
only to the extent that it is probable that future taxable profits
will be available against which the asset can be utilised. Deferred
tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
Deferred tax assets and
liabilities are offset when the Group has a legally enforceable
right to offset current tax assets and liabilities and the deferred
tax assets and liabilities relate to taxes levied by the same tax
authority on either:
· the same taxable
group company; or
·
different Group entities which intend either to
settle current tax assets and liabilities on a net basis, or to
realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax
assets or liabilities are expected to be settled or
recovered.
(n) Leased assets
All leases are accounted for by
recognising a right-of-use asset and a lease liability except
for:
· Leases of low
value assets; and
· Leases with a
duration of twelve months or less.
Lease liabilities are measured at
the present value of the contractual payments due to the lessor
over the lease term, with the discount rate determined by reference
to the rate inherent in the lease unless (as is typically the case)
this is not readily determinable, in which case the Group's
incremental borrowing rate on commencement of the lease is used.
Variable lease payments are only included in the measurement of the
lease liability if they depend on an index or rate. In such cases,
the initial measurement of the lease liability assumes the variable
element will remain unchanged throughout the lease term. Other
variable lease payments are expensed in the period to which they
relate. On initial recognition, the carrying value of the lease
liability also includes:
· Amounts expected
to be payable under any residual value guarantee;
· The exercise
price of any purchase option granted in favour of the Group if it
is reasonably certain to assess that option;
· Any penalties
payable for terminating the lease, if the term of the lease has
been estimated on the basis of termination option being
exercised.
Right-of-use assets are initially
measured at the amount of the lease liability, reduced for any
lease incentives received, and increased for:
· Lease payments
made at or before commencement of the lease;
· Initial direct
costs incurred; and
· The amount of
any provision recognised where the Group is contractually required
to dismantle, remove or restore the leased asset (typically
leasehold dilapidations - see Note 18).
Subsequent to initial measurement
lease liabilities increase as a result of interest charged at a
constant rate on the balance outstanding and are reduced for lease
payments made. Right-of-use assets are depreciated on a
straight-line basis over the remaining term of the lease or over
the remaining estimated useful life of the asset if, rarely, this
is judged to be shorter than the lease term.
When the Group revises its
estimate of the term of any lease (because, for example, it
re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the
lease liability to reflect the payments to make over the revised
term, which are discounted at the same discount rate that applied
on lease commencement. The carrying value of lease liabilities is
similarly revised when the variable element of future lease
payments dependent on a rate or index is revised. In both
cases
an equivalent adjustment is made
to the carrying value of the right-of-use asset, with the revised
carrying amount being amortised over the remaining (revised) lease
term.
(o) Dividends
Dividends are recognised when they
become legally payable. In the case of interim dividends to equity
shareholders, this is when paid. In the case of final dividends,
this is when approved by the shareholders at the Annual General
Meeting.
(p) Financial assets
The Group's financial assets
include cash and cash equivalents and trade receivables. All
financial assets are recognised when the Group becomes party of the
contractual provisions if the instrument.
Trade receivables are recognised
and carried at amortised cost less expected credit loss. IFRS 9
requires the Group to recognise expected credit losses ('ECL')
whereby expected losses as well as incurred losses are provided
for. The Group applies the simplified approach, using a provision
matrix, when determining ECL provisions for trade receivables. In
making the assessment of credit risk and estimating ECL provisions,
the Group uses reasonable and supportable information about past
events, current conditions and forecasts of future events and
economic conditions.
From time to time, the Group
elects to renegotiate the terms of trade receivables due from
customers with which it has previously had a good trading history.
Such renegotiations will lead to changes in the timing of payments
rather than changes to the amounts owed, and if the revised present
value of cash flows is not significantly different from the
carrying amount, no impairment is recorded.
Cash and cash equivalents comprise
cash balances, deposits held at call with banks, other short term
highly liquid investments with original maturities of twelve months
or less from inception.
(q) Financial liabilities
The Group holds only one class of
financial liabilities, namely trade payables. Trade payables and
other short-term monetary liabilities are initially recognised at
fair value and subsequently carried at amortised cost.
(r) Exceptional items
Material items of income or
expense that are deemed exceptional due to their size or incidence,
such a restructuring costs, are disclosed separately in the
Consolidated Income Statement.
2 Critical
accounting estimates and judgements
The Group makes estimates and
judgements regarding the future. Estimates and judgements are
continually evaluated based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and
assumptions.
The judgements and estimates that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
Estimates
Valuation of inventory
The Group reviews its inventory on
a regular basis and, where appropriate, makes provision for slow
moving and obsolete stock based on estimates of future sales
activity. The estimate of the future sales activity will be based
on both historical experience and expected outcomes based on
knowledge of the markets in which the Group operates (see note 14
of the Consolidated Financial Statements). The Group also
calculates an amount representing wages and overheads for direct
labour and includes an estimate of this amount in the valuation of
inventory.
Revenue
recognition
The
timing of revenue recognition is a significant area of risk to
accurate financial reporting and the Group also ensures that
accurate estimates of credit note provisions and warranty
provisions are made.
Depreciation of property, plant and equipment and
right-of-use assets
Depreciation is provided so as to
write down the assets to their residual values over their estimated
useful lives as set out in note 1 (d). The selection of these
estimated lives requires the exercise of management
judgement.
Useful lives of intangible assets
Intangible assets are amortised
over their useful lives. Useful lives are based on the management's
estimates of the period that the assets will generate revenue,
which are periodically reviewed for continued appropriateness.
Changes to estimates can result in significant variations in the
carrying value and amounts charged to the consolidated income
statement in specific periods (see notes 1 (e) and 11 of the
Consolidated Financial Statements).
Expected credit losses and financial asset
impairment
Expected credit losses are
assessed under IFRS 9 using reasonable information about past
events and current conditions and forecasts of future events. Asset
impairment considers the likely returns from financial assets owned
by the Group and their recoverability, based on market values and
management's judgement of any other relevant factors.
Judgements
Recognition of deferred tax
asset
The extent to which deferred
taxation assets can be recognised is based on an assessment of the
probability that future taxable income will be available against
which the deductible temporary differences and taxation loss carry
- forward amounts can be utilised. The deferred tax asset of
£741,000 (2023: £264,000) has been recognised on the basis that the
Group is forecasting sufficient levels of profits in future
periods.
Impairment
The Group reviews all other
non-financial assets for impairment, which requires management
judgements and estimates on the assets' recoverable amounts. These
judgements and estimates are reviewed on an annual basis. The
Directors conclude that there are no major sources of estimation
uncertainty in relation to these assets that have a material
adjustment to the carrying values.
3 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 countries
|
Sales of passive and powered
ventilation products 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.
Details of the deferred revenue
movements during the year is as follows:
|
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
Deferred Revenue at beginning of
year
|
270
|
396
|
|
Released in the year
|
(270)
|
(396)
|
|
Provided for in the
year
|
-
|
270
|
|
Deferred Revenue at end of
year
|
-
|
270
|
The deferred revenue noted above
is the Group's only contract liability and is shown within Other
Payables.
The Group has no material contract
assets.
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 in the remainder of this note
3.
Operating
segment
|
For the year ended
30 September 2024
|
United
Kingdom
|
North
America
|
Europe
and all other
countries
|
Consolidated
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Segment revenue
|
12,909
|
777
|
2,228
|
15,914
|
|
Inter-segment revenue
|
(438)
|
-
|
-
|
(438)
|
|
Total Revenue from
continuing operations
|
12,471
|
777
|
2,228
|
15,476
|
|
Segment profit /
(loss)
|
(737)
|
106
|
(285)
|
(916)
|
|
Tax credit / (expense)
|
582
|
(14)
|
-
|
568
|
|
Loss for the year from
continuing operations
|
(155)
|
92
|
(285)
|
(348)
|
|
Depreciation and amortisation
|
902
|
-
|
-
|
902
|
|
Total
assets
|
14,215
|
164
|
-
|
14,379
|
|
Total
assets include:
Assets
held for sale
|
788
|
-
|
-
|
788
|
|
Additions
to non-current assets
(other
than financial instruments
and
deferred tax assets)
|
313
|
-
|
-
|
313
|
The South Korea Segment has been
reclassified as discontinued operations.
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
30 September 2024
|
United
Kingdom
|
Europe
|
USA and
Canada
|
Total
|
|
Revenues from continuing operations
|
£'000
|
£'000
|
£'000
|
£'000
|
|
By
entities' country of domicile
|
14,699
|
-
|
777
|
15,476
|
|
By
country from which derived
|
12,471
|
2,228
|
777
|
15,476
|
|
Non-current assets
|
|
|
|
|
|
By
entities' country of domicile
|
4,720
|
-
|
13
|
4,733
|
Operating
segment
|
For the year ended
30 September 2023
|
United
Kingdom
|
North
America
|
Europe
and all other
countries
|
Continuing operations
|
South
Korea
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Segment revenue
|
15,781
|
842
|
3,623
|
20,246
|
2,488
|
22,734
|
|
Inter-segment revenue
|
(400)
|
-
|
-
|
(400)
|
-
|
(400)
|
|
Total
Revenue
|
15,381
|
842
|
3,623
|
19,846
|
2,488
|
22,334
|
|
Segment profit /
(loss)
|
(247)
|
164
|
(111)
|
(194)
|
(645)
|
(839)
|
|
Tax credit
|
|
|
|
25
|
(111)
|
(86)
|
|
Loss for the
year
|
|
|
|
(169)
|
(756)
|
(925)
|
|
Depreciation and amortisation
|
|
-
|
-
|
869
|
99
|
968
|
|
Total
assets
|
15,521
|
243
|
-
|
15,764
|
3,599
|
19,363
|
|
Total
assets include:
Investments in associates
|
2,295
|
-
|
-
|
2,295
|
-
|
2,295
|
|
Additions
to non-current assets
(other
than financial instruments
and
deferred tax assets)
|
701
|
1
|
-
|
702
|
(30)
|
672
|
The South Korea Segment loss
includes the Group's share of the losses from Browntech Sales Co.
Ltd., (BTS), the Group's associate undertaking in South Korea, of
£241,000.
Sales to BTS of £4.038m
represented 18% of Group Revenue (2022: £4.71m - 21%). There are no
other concentrations of revenue of 10% or more during the year (see
Note 24 - 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
30 September 2023
|
United
Kingdom
|
Europe
|
USA and
Canada
|
South
Korea
|
All
other
regions
|
Total
|
|
Revenues
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
By
entities' country of domicile
|
19,004
|
-
|
842
|
2,488
|
-
|
22,334
|
|
By
country from which derived
|
15,381
|
3,623
|
842
|
2,488
|
-
|
22,334
|
|
Non-current assets
|
|
|
|
|
|
|
|
By
entities' country of domicile
|
4,683
|
-
|
24
|
2,526
|
-
|
7,233
|
Information about the Group's products
Within geographical segments the
Directors also monitor the revenue performance of the Group within
its two identified business streams. The Group's operations are
separated between background ventilators and window and door
hardware products and mechanical ventilation products. The
following table provides an analysis of the Group's external
revenue, irrespective of the geographical region of
sale.
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
Background ventilators and window
and door hardware products
|
8,333
|
10,013
|
|
Mechanical ventilation products
|
7,143
|
9,833
|
|
Revenue
|
15,476
|
19,846
|
|
|
|
|
|
4 Directors and employees
|
|
Group
|
Company
|
|
|
2024
|
2023
|
2024
|
2023
|
|
Staff costs, including Directors,
were as follows:
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Wages and salaries
|
5,669
|
6,534
|
249
|
293
|
|
Employer's social security costs
and similar taxes
|
576
|
718
|
19
|
37
|
|
Defined contribution pension
cost
|
530
|
512
|
4
|
2
|
|
Share
based payment expense - equity settled
|
(22)
|
(72)
|
(22)
|
-
|
|
|
6,753
|
7,692
|
250
|
332
|
|
|
|
Group
|
Company
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
The average monthly number of
employees during
the year was as
follows:
|
Number
|
Number
|
Number
|
Number
|
|
|
Manufacturing
|
100
|
142
|
-
|
-
|
|
|
Sales, marketing, and
administration
|
64
|
60
|
4
|
4
|
|
|
|
164
|
202
|
4
|
4
|
|
|
|
|
|
|
|
|
|
|
Details of Directors' emoluments,
pension contributions and interests in share options are given in
the Directors' Remuneration Report set out on pages 30 to 34. The
directors' remuneration disclosures on those pages are an integral
part of these financial statements and have been
audited.
5 Finance income and expense
|
Finance
income
|
Group
|
Company
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Bank
interest receivable on short term deposits
|
1
|
5
|
-
|
1
|
|
Finance expense
|
Group
|
Company
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Interest
expense on lease liabilities
|
20
|
27
|
-
|
-
|
6 Loss before tax
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
|
This is arrived at after charging /
(crediting):
|
|
|
|
|
Depreciation of property, plant
& equipment
|
475
|
533
|
|
|
Depreciation of right-of-use
assets
|
187
|
240
|
|
|
Amortisation of intangible
assets
|
240
|
194
|
|
|
Research and development
expenditure written off
|
465
|
467
|
|
|
Short term rentals - vehicles and
plant & equipment
|
32
|
18
|
|
|
Foreign exchange (gain) /
loss
|
(23)
|
55
|
|
|
Share-based payment
credit
|
(22)
|
(72)
|
|
Profit on disposal of property,
plant & equipment
|
(12)
|
(25)
|
|
|
|
|
|
|
|
Auditors' remuneration:
|
|
|
|
|
- for the audit of these
accounts
|
22
|
20
|
|
|
- for the audit of the accounts of
the Company's subsidiaries
|
112
|
110
|
|
|
- for the audit of the accounts of
the Group's associate
|
9
|
13
|
|
|
- non-audit services - comprising
other assurance services
|
1
|
1
|
|
|
|
|
|
|
|
|
|
7
Tax
credit
|
|
|
|
2024
|
2023
|
|
Current income tax:
|
|
£'000
|
£'000
|
|
Corporation tax credit
|
|
-
|
121
|
|
Adjustment in respect of prior
years
|
|
-
|
220
|
|
|
|
-
|
341
|
|
Deferred tax:
|
|
|
|
|
Origination and reversal of
temporary differences
Adjustment in respect of prior
year
|
Note
16
|
473
-
|
(150)
(277)
|
|
Discontinued operation
|
Note
26
|
-
|
111
|
|
Income tax credit
|
|
473
|
25
|
|
|
|
|
|
|
|
|
|
|
2024
|
2023
|
|
The charge for the year can be
reconciled to the profit
|
£'000
|
£'000
|
|
per the income statement as
follows:
|
|
|
|
Loss before income tax from
continuing operations
|
(2,431)
|
(194)
|
|
Effect of:
|
|
|
|
Expected tax credit based on the
standard rate of
|
|
|
|
Corporation tax in the UK of 25%
(2023: 22%)
|
608
|
43
|
|
Additional deduction for R&D
expenditure
|
-
|
42
|
|
Adjustment in respect of prior
years
|
-
|
(57)
|
|
Expenses not deductible for tax
purposes
|
(7)
|
(3)
|
|
Unrelieved tax losses
|
(128)
|
-
|
|
Income tax credit
|
473
|
25
|
|
|
|
|
|
The tax rate in the United
Kingdom, being the economic environment in which the Company
conducts its business was 19% until 31 March 2023, at which point
the rate increased to 25%. A hybrid rate of 22% therefore applies
to the year ended 30 September 2023. The rate of 25% applies to the
year ended 30 September 2024.
8
Dividends
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
Final
2023 dividend of 0.50 pence (2022: 0.50 pence) per
ordinary
share
proposed and paid during the year relating to the
previous
year's results
|
56
|
56
|
|
Interim
dividend of 0.50 pence (2023: 1.50 pence) per
ordinary
share
paid during the
year
|
-
|
56
2
|
|
|
56
|
112
|
|
|
|
|
|
The Directors are proposing a
final dividend of nil pence (2023: 0.5 pence) per share. This will
result in a final dividend totalling £nil (2023: £56,244), subject
to approval by the shareholders at the Annual General Meeting. This
dividend has not been accrued at the balance sheet date.
9 Loss per ordinary share
The calculation of the basic and
diluted earnings per share is based on the following
data:
|
|
|
2024
|
2023
|
|
|
|
|
£'000
|
£'000
|
|
|
Numerator
|
|
|
|
Loss for the purposes of basic
earnings per share being
|
|
|
|
loss after tax attributable to
members of Titon Holdings Plc
|
(3,702)
|
(686)
|
|
|
Loss for the purposes of basic
earnings per share being loss after tax of continuing
operations
|
(1,958)
|
(169)
|
|
|
Loss for the purposes of basic
earnings per share being loss after tax of discontinued
operations
|
(1,813)
|
(756)
|
|
|
Denominator
|
Number
|
Number
|
|
|
Weighted average number of
ordinary shares for the purposes of basic
|
|
|
|
|
loss per share
|
11,247,056
|
11,205,723
|
|
|
Effect of dilutive potential
ordinary shares: share options
|
-
|
10,829
|
|
|
Weighted average number of
ordinary shares for the purposes of diluted loss per
share
|
11,247,056
|
11,216,552
|
|
|
Loss per share (pence) continuing
operations
|
|
|
|
|
Basic
|
(17.41p)
|
(1.51p)
|
|
|
Diluted
|
(17.41p)
|
(1.51p)
|
|
|
Loss per share (pence) discontinued
operations
|
|
|
|
|
Basic
|
(16.12p)
|
(6.75p)
|
|
|
Diluted
|
(16.12p)
|
(6.75p)
|
|
|
Total loss per share (pence)
|
|
|
|
|
Basic
|
(32.92p)
|
(6.12p)
|
|
|
Diluted
|
(32.92p)
|
(6.12p)
|
|
|
|
|
|
|
|
|
The total number of options in
issue is also disclosed in note 23.
10
Property, plant and equipment
|
Group
|
Freehold
land
and
buildings
|
Improvements
to
leasehold
property
|
Plant
and
equipment
|
Motor
vehicles
|
Total
|
|
Cost
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
At 1
October 2022
|
3,455
|
191
|
8,811
|
269
|
12,726
|
|
Additions
|
-
|
-
|
392
|
41
|
433
|
|
Disposals
|
-
|
-
|
(23)
|
(134)
|
(157)
|
|
Foreign
exchange revaluation
|
-
|
(1)
|
(22)
|
-
|
(23)
|
|
At 1
October 2023
|
3,455
|
190
|
9,158
|
176
|
12,979
|
|
Additions
|
-
|
-
|
92
|
-
|
92
|
|
Disposals
|
-
|
(31)
|
(684)
|
(80)
|
(795)
|
|
Foreign
exchange revaluation
|
-
|
3
|
59
|
-
|
62
|
|
At 30 September
2024
|
3,455
|
162
|
8,625
|
96
|
12,338
|
|
Depreciation
|
|
|
|
|
|
|
At 1
October 2022
|
1,682
|
110
|
7,382
|
231
|
9,405
|
|
Charge
for the year
|
64
|
25
|
428
|
16
|
533
|
|
Disposals
|
-
|
-
|
(23)
|
(102)
|
(125)
|
|
Foreign
exchange revaluation
|
-
|
(1)
|
(16)
|
-
|
(17)
|
|
At 1
October 2023
|
1,746
|
134
|
7,771
|
145
|
9,796
|
|
Charge
for the year
|
64
|
16
|
369
|
26
|
475
|
|
Disposals
|
-
|
(29)
|
(588)
|
(81)
|
(698)
|
|
At 30 September
2024
|
1,810
|
121
|
7,552
|
90
|
9,573
|
|
Net book
value
|
|
|
|
|
|
|
At 30 September
2024
|
1,645
|
41
|
1,073
|
6
|
2,765
|
|
At 30
September 2023
|
1,709
|
56
|
1,387
|
31
|
3,183
|
|
At 1
October 2022
|
1,773
|
81
|
1,429
|
38
|
3,321
|
The Directors are not aware of any
events or changes in circumstances during the year which would have
a significant impact on the carrying value of the Group's property,
plant and equipment at the balance sheet date.
At 30 September 2024, the Group
had entered into contractual commitments for the acquisition of
plant and equipment amounting to £4,000 (2023: £53,000).
|
Group: right-of-use assets
|
Leasehold
property
|
Plant
and
equipment
|
Motor
vehicles
|
Total
|
|
|
Cost
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
At 1
October 2022
|
550
|
72
|
436
|
1,058
|
|
|
Additions
|
-
|
186
|
69
|
255
|
|
|
Disposals
|
-
|
-
|
(64)
|
(64)
|
|
|
Foreign
exchange revaluation
|
(3)
|
|
(5)
|
(8)
|
|
|
At 1
October 2023
|
547
|
258
|
436
|
1,241
|
|
|
Additions
|
-
|
11
|
63
|
74
|
|
|
Disposals
|
(98)
|
-
|
(225)
|
(323)
|
|
|
At 30 September
2024
|
449
|
269
|
274
|
992
|
|
|
Depreciation
|
|
|
|
|
|
|
At 1
October 2022
|
166
|
19
|
320
|
505
|
|
|
Charge
for the year
|
67
|
35
|
138
|
240
|
|
|
Disposals
|
-
|
-
|
(64)
|
(64)
|
|
|
Foreign
exchange revaluation
|
-
|
-
|
(49)
|
(5)
|
|
|
At 1
October 2023
|
277
|
54
|
345
|
676
|
|
|
Charge
for the year
|
66
|
63
|
58
|
187
|
|
|
Disposals
|
(79)
|
-
|
(194)
|
(273)
|
|
|
At 30 September
2024
|
264
|
117
|
209
|
590
|
|
|
Net book
value
At 30 September
2024
|
185
|
152
|
65
|
402
|
|
|
At 30
September 2023
|
270
|
204
|
91
|
565
|
|
At 30 September 2024, the Group
had entered into contractual commitments for the acquisition of
motor vehicles under finance leases amounting to £nil (2023:
£48,000).
Company
The Company has no right-of-use
assets (2023: £nil).
|
|
Freehold
land
and
buildings
|
|
Cost
|
£'000
|
|
At 1
October 2022
|
3,455
|
|
At 1
October 2023
|
3,455
|
|
At 30 September
2024
|
3,455
|
|
Depreciation
|
|
|
At 1
October 2022
|
1,682
|
|
Charge
for the year
|
64
|
|
At 1
October 2023
|
1,746
|
|
Charge
for the year
|
64
|
|
At 30 September
2024
|
1,810
|
|
Net book
value
|
|
|
at 30 September
2024
|
1,645
|
|
At 30
September 2023
|
1,709
|
|
At 1
October 2022
|
1,773
|
11
Intangible assets
|
Group
|
Computer
software
|
Development
costs
(internally
generated)
|
Goodwill
|
Patents
|
Total
|
|
Cost
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
At 1
October 2022
|
1,400
|
1,364
|
78
|
258
|
3,100
|
|
Additions
|
14
|
191
|
-
|
-
|
205
|
|
At 1
October 2023
|
1,414
|
1,555
|
78
|
258
|
3,305
|
|
Additions
|
73
|
148
|
-
|
-
|
221
|
|
Disposals
|
-
|
-
|
(78)
|
(258)
|
(336)
|
|
At 30 September
2024
|
1,487
|
1,703
|
-
|
-
|
3,190
|
|
Amortisation
|
|
|
|
|
|
|
At 1
October 2022
|
846
|
1,086
|
-
|
253
|
2,185
|
|
Charge
for the year
|
45
|
148
|
-
|
1
|
194
|
|
At 1
October 2023
|
891
|
1,234
|
-
|
254
|
2,379
|
|
Charge
for the year
|
84
|
156
|
-
|
-
|
240
|
|
Disposals
|
-
|
-
|
-
|
(254)
|
(254)
|
|
At 30 September
2024
|
975
|
1,390
|
-
|
-
|
2,365
|
|
Net book
value
|
|
|
|
|
|
|
at 30 September
2024
|
512
|
313
|
-
|
-
|
825
|
|
At 30
September 2023
|
523
|
321
|
78
|
4
|
926
|
|
At 1
October 2022
|
554
|
278
|
78
|
5
|
915
|
All assets have an average useful
life of 3.0 years (2023: 3.1 years).
Company
The Company has no intangible
assets (2023: £nil).
12
Investments in subsidiaries
Investments comprise direct
shareholdings of the ordinary share capital in the following
subsidiaries, all of which are included in the Consolidated
Financial Statements. A list of the investments in subsidiaries,
including the name, country of incorporation and proportion of
ownership is as follows:
|
Name of
subsidiary
|
Principal
activity
|
Country of
incorporation
|
Address
|
Proportion of voting
rights held at 30
September 2023 and
2024
|
|
Titon Hardware Ltd
|
Design,
manufacture and marketing of window fittings and
ventilators
|
England
|
894 The
Crescent,
Colchester Business Park, Colchester
CO4
9YQ
|
100%
|
|
Titon Automation Ltd
|
Dormant company
|
England
|
As
above
|
100%
|
|
Titon Components Ltd
|
Dormant company
|
England
|
As
above
|
100%
|
|
Titon Developments Ltd
|
Dormant company
|
England
|
As
above
|
100%
|
|
Titon Investments Ltd
|
Dormant company
|
England
|
As
above
|
100%
|
|
Titon Inc.
|
Distribution of Group
products
|
USA
|
PO Box
241, Granger, Indiana 46530
|
100%
|
|
Titon Korea Co. Ltd
|
Manufacture of window ventilators
|
Republic
of Korea
|
257-4
Ra-dong, Munwon-gil, Jori-eup, Paju-si, Gyeonggi-do
|
51%
|
|
Titon HK Holdings Ltd
|
Dormant company
|
Hong
Kong, China
|
402
Jardine House,
1
Connaught Place Central
|
100%
|
For the subsidiaries listed above,
the country of operation is the same as the country of
incorporation.
The assets and liabilities have
been reclassified as held for sale for Titon Korea Co. Ltd in the
year to 30 September 2024.
|
Company Investment
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
At 30 September
|
194
|
554
|
13 Investments in
associates
The following entity meets the
definition of an associate, the Group considers it has power to
exercise significant influence, and has been equity accounted in
these consolidated financial statements:
|
Name of associate
|
Principal
activity
|
Country of
incorporation
|
Address
|
Proportion of
voting
rights held at 30 September
2023 and 2024
|
|
Browntech Sales Co. Ltd
|
Sales of window
ventilators
|
Republic
of Korea
|
257-4
Ra-dong, Munwon-gil, Jori-eup, Paju-si, Gyeonggi-do
|
49%
|
The remaining 51% shareholding of
BTS is held by South Korean investors who, through their voting
shares, have operational control of the company.
|
Company Investment
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
At 30 September
|
-
|
225
|
The aggregated amounts relating to
BTS are as follows:
|
As at 30 September
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
Current assets
|
-
|
3,404
|
|
Non-current assets
|
-
|
1,242
|
|
Total Assets
|
-
|
4,646
|
|
Current liabilities
|
-
|
222
|
|
Non-current liabilities
|
-
|
325
|
|
Total Liabilities
|
-
|
547
|
|
|
|
|
|
Net Assets
|
-
|
4,099
|
|
|
|
|
|
Group 49% share of Net
Assets
|
-
|
2,098
|
|
Group investment in
Goodwill
|
-
|
197
|
|
Group share of
investment
|
-
|
2,295
|
As at 30 September 2024 the
investment was reclassified as held for sale as detailed in note
26.
14
Inventories
|
Group
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
Raw materials and
consumables
|
1,914
|
3,087
|
|
Work in progress
|
15
|
40
|
|
Finished
goods and goods for resale
|
1,567
|
3,012
|
|
|
3,496
|
6,139
|
The carrying value of inventory represents cost
less appropriate write down, where the estimated realisable value
is less than the carrying value. During the year there was a
net debit of £1.35m (2023: net debit of £48,197) to the
Consolidated Income Statement in relation to an inventory write
down, allowing for slow moving and obsolete stock. £1.3m of that
debit has been included in exceptional items, as a one off
exceptional write down recognised in the year. The movements in the
inventory write-down are included within cost of sales in the
Consolidated Income Statement. The amount of inventories recognised
as an expense during the year is £11,142,114 (2023:
£16,413,000).
Company
The Company had no inventories at
30 September 2024 (2023: £nil).
15
Trade and other receivables
Current
|
|
|
Group
|
Company
|
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Trade receivables
|
2,190
|
3,247
|
1
|
1
|
|
Less: Impairment
Allowance
|
(53)
|
(174)
|
-
|
-
|
|
Trade receivables - net
|
2,137
|
3,073
|
1
|
1
|
|
Related
parties' receivables
|
-
|
42
|
-
|
-
|
|
Other
receivables
|
47
|
183
|
5
|
-
|
|
Current
tax debtor
|
121
|
121
|
-
|
-
|
|
Prepayments and accrued income
|
681
|
335
|
-
|
3
|
|
Total
trade and other receivables
|
2,986
|
3,754
|
6
|
4
|
|
|
|
|
|
|
|
Non-current
|
|
Group
|
Company
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Related
parties' receivables
|
-
|
-
|
4,962
|
4,811
|
|
Less: Impairment
allowance
|
-
|
-
|
-
|
-
|
|
Total
trade and other receivables (See Note 24)
|
-
-
|
--
-
|
4,962
|
4,811
|
|
|
|
|
|
|
|
|
Other than the amounts due from
related parties there were no significant concentrations of credit
risk at either 30 September 2024 or 30 September 2023.
The average credit period taken on
sale of goods by the Group's trade debtors is 41 days (2023: 51
days).
Trade receivables included in the
Statement of Financial Position are stated net of expected credit
loss (ECL) provisions which have been calculated using a provision
matrix grouping trade receivables on the basis of their shared
credit risk characteristics. An analysis of the provision held
against trade debtors is set out below:
|
|
|
Group
|
Group
|
|
|
|
|
2024
|
2024
|
2023
|
2023
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Gross
trade and related
party receivables
|
Impairment Allowance
(ECL)
|
Gross
trade and related party receivables
|
Impairment Allowance (ECL)
|
|
Current - not overdue
|
1,250
|
(3)
|
1,978
|
(24)
|
|
Up to 30 days past due
|
745
|
(18)
|
965
|
(25)
|
|
Up to 60 days past due
|
140
|
(4)
|
157
|
(37)
|
|
Up to 90 days past due
|
55
|
(28)
|
146
|
(88)
|
|
Over 90 days past due
|
-
|
-
|
-
|
-
|
|
|
2,190
|
(53)
|
3,246
|
(174)
|
|
|
|
|
|
|
|
|
|
The main factors considered in
determining the level of the loss provisions set are external
customer credit ratings information, prevailing market and economic
conditions and the historic levels of losses experienced by the
Group.
There are no indications as at 30
September 2024 that the debtors will not meet their payment
obligations in respect of the amount of trade and related party
receivables recognised in the balance sheet that are overdue and
unprovided. The proportion of trade debtors at 30 September 2024
that are overdue for payment is 43% (2023: 39%).
The carrying amount of a financial
asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables, where the carrying
amount is reduced through the use of a provision account. When a
trade receivable is considered uncollectible, based on its age and
likely recoverability, it is written off against the provision
account. Subsequent recoveries of amounts previously written off
are credited against the provision account. Changes in the carrying
amount of the provision account are recognised in the income
statement.
No expected credit loss provision
has been provided for related party receivables at Company level
due to the level of materiality of any likely
adjustment.
|
|
|
Group
|
|
|
Movements on the impairment
allowance of trade and
related party receivables are as
follows:
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
At the beginning of the
year
|
174
|
209
|
|
Impairment allowance
|
52
|
102
|
|
Receivables written off during the
year as uncollectible
|
(100)
|
(71)
|
|
Unused
amounts reversed
|
(73)
|
(66)
|
|
At the
end of the year
|
53
|
174
|
|
|
|
|
|
|
16
Deferred tax
Group
Deferred tax is calculated in full
on temporary differences under the liability method using a tax
rate of 25% (2023: 25.0%). The movement on the deferred tax account
is as shown below:
|
|
Total
deferred tax at 1 October 2023
£'000
|
Effect
of rate change on opening balances
£'000
|
Foreign
exchange movement
£'000
|
Credited
/
(expensed) to
Income
Statement
£'000
|
Total
deferred tax at
30
September
2024
£'000
|
Asset
2024
UK
£'000
|
Asset
2024
Non-UK
£'000
|
|
UK
accelerated capital allowances
|
(403)
|
-
|
-
|
56
|
(347)
|
(347)
|
-
|
|
Non-UK
accelerated capital allowances
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
UK other
temporary and deductible differences
|
63
|
-
|
-
|
(15)
|
48
|
48
|
-
|
|
Non-UK
other temporary and deductible differences
|
-
|
-
|
3
|
-
|
3
|
-
|
3
|
|
UK
available losses
|
580
|
-
|
|
447
|
1,027
|
1,027
|
-
|
|
Non-UK
available losses
|
24
|
-
|
-
|
(14)
|
10
|
-
|
10
|
|
Total deferred tax
|
264
|
-
|
3
|
474
|
741
|
728
|
13
|
The UK
deferred tax asset has been recognised to the extent that it is
probable there will be future taxable profits to set the asset
against. The Group has considered the carrying value of its
deferred tax asset at each reporting date and concluded that based
on management's long-term plan, which includes tax adjusted
projections, sufficient taxable profits will be generated in future
years to recover such recognised deferred tax assets. This has
given rise to a non-recognised deferred tax asset of £128k (FY23:
£nil) on £512k (FY23: £nil) of UK tax losses.
|
|
Total
deferred tax at 1 October 2022
£'000
|
Effect
of rate change on opening balances
£'000
|
Foreign
exchange movement
£'000
|
Credited/
(expensed) to
Income
Statement
£'000
|
Total
deferred tax at
30
September
2023
£'000
|
Asset
2023
UK
£'000
|
Asset
2023
Non-UK
£'000
|
|
UK
accelerated capital allowances
|
-
|
-
|
-
|
(403)
|
(403)
|
(403)
|
-
|
|
Non-UK
accelerated capital allowances
|
2
|
-
|
-
|
(2)
|
-
|
-
|
-
|
|
UK other
temporary and deductible differences
|
(14)
|
-
|
--
|
77
|
63
|
63
|
-
|
|
Non-UK
other temporary and deductible differences
|
27
|
-
|
-
|
(27)
|
-
|
-
|
-
|
|
UK
available losses
|
553
|
-
|
-
|
27
|
580
|
580
|
-
|
|
Non-UK
available losses
|
129
|
(4)
|
(1)
|
(100)
|
24
|
-
|
24
|
|
Total deferred tax
|
697
|
(4)
|
(1)
|
(428)
|
264
|
240
|
24
|
Company
Deferred tax is calculated in full
on temporary differences under the liability method using a tax
rate of 25% (2023: 25%). The movement on the deferred tax account
is as shown below:
|
|
|
Total
deferred tax at 1 October 2023
£'000
|
Effect
of
rate
change on opening balances
£'000
|
Credited
/ (expensed) to
Income
Statement
£'000
|
Total
deferred tax at
30
September
2024
£'000
|
|
|
UK
Accelerated capital allowances
|
-
|
-
|
-
|
-
|
|
|
UK other
temporary and deductible differences
|
4
|
-
|
-
|
4
|
|
|
UK
available losses
|
3
|
-
|
(3)
|
-
|
|
|
Total deferred tax
|
7
|
-
|
(3)
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
deferred tax at 1 October 2022
£'000
|
Effect
of
rate
change on opening balances
£'000
|
Credited
to
Income
Statement
£'000
|
Total
deferred tax at
30
September
2023
£'000
|
|
|
UK
Accelerated capital allowances
|
-
|
-
|
-
|
-
|
|
|
UK other
temporary and deductible differences
|
4
|
-
|
-
|
4
|
|
|
UK
available losses
|
-
|
-
|
3
|
3
|
|
|
Total deferred tax
|
4
|
-
|
3
|
7
|
|
17
Trade and other payables -
current
|
|
|
Group
|
Company
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
|
|
|
|
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Trade payables
|
1,446
|
2,045
|
66
|
29
|
|
|
Other payables
|
218
|
803
|
-
|
-
|
|
|
Other tax and social security
taxes
|
450
|
378
|
-
|
-
|
|
|
Accruals
and deferred income
|
645
|
742
|
116
|
78
|
|
|
|
2,759
|
3,968
|
182
|
107
|
|
|
|
|
|
|
|
|
|
|
Group trade payables and accruals
principally comprise amounts outstanding for trade purchases and
ongoing costs. Year-end Group trade creditors represent 55 days
(2023: 46 days) average purchases. The contractual maturities of
these liabilities are from 30 days up to approximately 60
days.
The Directors consider that the
carrying amount of trade payables is approximate to their fair
value.
18
Leases
Nature of leasing activities (in the capacity as
lessee)
The group leases a number of
properties in the jurisdictions from which it operates. In some
jurisdictions it is customary for lease contracts to provide for
payments to increase each year by inflation and in others to be
reset periodically to market rental rates. In some jurisdictions
the periodic rent for property leases is fixed over the lease
term.
The group also leases certain
items of plant and equipment. In some contracts for services with
distributors, those contracts contain a lease of vehicles. Leases
of plant, equipment and vehicles comprise only fixed payments over
the lease terms.
The group sometimes negotiates
break clauses in its property leases. On a case-by-case basis, the
group will consider whether the absence of a break clause would
expose the group to excessive risk. Typically factors considered in
deciding to negotiate a break clause include:
· the length of the lease term;
· the economic stability of the environment in
which the property is located; and
· whether the location represents a new area of
operations for the group
At 30 September 2024 the carrying
amounts of lease liabilities are not reduced by the amount of
payments that would be avoided from exercising break clauses as
there are no break clauses available. Lease liabilities are
initially measured at the present value of future lease payments,
discounted using the Group's incremental borrowing rate.
|
Right-of-Use
Assets
|
Freehold
land
and
buildings
|
Plant
and equipment
|
Motor
vehicles
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
At 1
October 2023
|
270
|
204
|
91
|
565
|
|
Additions
/ Disposals
|
(98)
|
11
|
(162)
|
(249)
|
|
Depreciation
|
13
|
(63)
|
136
|
86
|
|
At 30 September
2024
|
185
|
152
|
65
|
402
|
|
Lease Liabilities
|
£'000
|
|
At 1
October 2023
|
632
|
|
Additions
|
71
|
|
Disposals
|
(46)
|
|
Interest
expense
|
20
|
|
Lease
payments
|
(198)
|
|
At 30 September
2024
|
479
|
18
Leases (continued)
|
Lease
liabilities
|
Up to 1
year
|
Between
1 and 2 years
|
Between
2 and 5 years
|
Over 5
years
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
At 30 September
2023
|
206
|
175
|
196
|
55
|
632
|
|
At 30 September
2024
|
150
|
144
|
139
|
46
|
479
|
|
Lease expense
|
2024
|
|
|
|
£'000
|
|
|
Short
term lease expense
|
32
|
|
|
Low value
lease expense
|
-
|
|
|
Aggregate
undiscounted commitments for short term leases
|
-
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
19
Share capital
|
|
|
2024
|
2023
|
|
Authorised
|
£'000
|
£'000
|
|
13,600,000
ordinary shares of 10p each
|
1,360
|
1,360
|
|
|
|
|
|
Each share has equal voting and
dividend rights.
The Company's issued and fully
paid ordinary shares of 10p during the year is:
|
|
|
2024
|
2024
|
2023
|
2023
|
|
|
|
Number
|
£'000
|
Number
|
£'000
|
|
At the
beginning of the year
|
11,228,750
|
1,123
|
11,218,750
|
1,122
|
|
|
Share
options exercised during the year
|
20,000
|
2
|
10,000
|
1
|
|
|
At the end of the year
|
11,248,750
|
1,125
|
11,228,750
|
1,123
|
|
|
|
|
|
|
|
|
|
|
|
|
Share premium
|
|
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
|
At the
beginning of the year
|
1,096
|
1,091
|
|
Share
options exercised during the year
|
10
|
5
|
|
At the end of the year
|
1,106
|
1,096
|
|
|
|
|
|
Share options
Options have been granted over the
following number of ordinary shares which were
outstanding:
|
Date granted
|
Exercise
price
|
Number
of
shares
|
Exercisable between
|
|
|
|
|
|
|
|
|
30.01.18
|
156.5p
|
65,000
|
30.01.21
|
and
|
30.01.28
|
|
15.07.21
|
138.5p
|
70,000
|
15.07.24
|
and
|
15.07.31
|
|
16.07.24
|
70.0p
|
150,000
|
16.07.27
|
and
|
16.07.34
|
|
|
|
|
|
|
|
|
At 30 September
2024
|
285,000
|
|
|
|
|
At 30
September 2023
|
207,000
|
|
|
|
No share options were exercised
between 30 September 2024 and 22 January 2025.
20 Cash and cash
equivalents
Financial assets
The Group has floating rate
financial assets which comprise treasury deposits, cash to finance
its operations together with the retained profits generated by
operating companies (refer to the 'Financial Assets' note 1(p) on
page 60 for further details).
The Group has no long-term
borrowings and any available cash surpluses are placed on deposit.
The Group uses cash on deposit to manage short term liquidity risks
which may arise.
|
|
|
Group
|
Company
|
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
Currency
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
Sterling
|
2,170
|
1,905
|
13
|
94
|
|
|
US Dollar
|
89
|
223
|
-
|
-
|
|
|
Euro
|
22
|
78
|
-
|
-
|
|
|
South Korean Won
|
-
|
32
|
-
|
-
|
|
|
|
|
2,281
|
2,238
|
13
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group's floating rate
financial assets (see below) at 30 September were:
The Sterling financial assets
comprises cash held on current account with banks
The Group's cash and floating rate
financial assets at 30 September comprise:
|
|
|
Group
|
Company
|
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Bank current accounts
|
2,281
|
2,238
|
13
|
94
|
|
|
|
|
|
|
|
|
|
|
|
|
The Group had no floating term
deposits at 30 September 2024 (2023: nil).
Financial liabilities
The Group had no floating rate
financial liabilities at 30 September 2024 (2021: £nil). Any
liability is offset against bank deposits for the purposes of
interest payment calculation. The Board considers the fair value of
the Group's financial assets and liabilities to be the same as
their book value.
21
Financial instruments - risk management
The Group is exposed through its
operations to credit risk, foreign exchange risk and liquidity
risk.
In common with other businesses,
the Group is exposed to risks that arise from its use of financial
instruments. This note, read in conjunction with the 'Capital
Management' section of the Directors' Report on page 25, and the
Report on Risk Management on pages 20 to 23 describe the Group's
objectives, policies and processes for managing those risks.
Further quantitative information in respect of these risks is
presented throughout these financial statements.
There have been no substantive
changes in the Group's exposure to financial instrument risks, its
objectives, policies and processes for managing those risks from
previous periods unless otherwise stated in this note.
General objectives, policies and processes
The Board has overall
responsibility for the determination of the Group's risk management
objectives and policies and, whilst retaining ultimate
responsibility for them, it has delegated the authority for
designing and operating processes that ensure the effective
implementation of the objectives and policies to the Group's
finance function. The Audit Committee reviews and reports to the
Board on the effectiveness of policies and processes put in
place.
The overall objective of the Board
is to set policies that seek to reduce risk as far as possible
without unduly affecting the Group's competitiveness and
flexibility. Further details regarding these policies are set out
on pages 38 to 39.
Principal financial instruments
The principal financial
instruments used by the Group, from which financial instrument
risks arise are trade receivables, cash at bank, bank overdrafts,
trade and other payables and loans to related parties (see Notes
15, 17 and 20).
Credit risk
Credit risk is the risk of
financial loss to the Group if a customer, associate company or
counterparty to a financial instrument fails to meet its
contractual obligations. The Group is mainly exposed to credit risk
from credit sales. It is Group policy, implemented locally, to
assess the credit risk of new customers before entering contracts
along with local business practices. The Group is not reliant on
any key customers.
The Group's finance function has
established a credit policy under which each new customer is
analysed individually for creditworthiness before the Group's
standard payment and delivery terms and conditions are offered. The
Group's review includes external ratings, when available, and trade
references. Purchase limits are established for each customer,
which represents the maximum open amount without requiring senior
management's approval. These limits are reviewed on an on-going
basis. Customers that fail to meet the Group's benchmark
creditworthiness may transact with the Group on a prepayment
basis.
Credit risk also arises from cash
and cash equivalents and deposits with banks. The Group has cash
and cash equivalents with banks with a minimum long term "A"
rating.
Quantitative disclosures of the
credit risk exposure in relation to Trade and other receivables are
provided in note 15.
Liquidity risk
Liquidity risk arises from the
Group's management of working capital in that the Group may
encounter difficulty in meeting its financial obligations as they
fall due. The Group's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they
become due (see Note 17). To achieve this aim, it seeks to maintain
cash balances to meet expected requirements for a period of
90 days or longer. The Board receives cash
flow projections as well as information regarding cash balances. At
the reporting date, these projections indicated that the Group
expected to have sufficient liquid resources to meet its
obligations under all reasonably expected circumstances.
The liquidity risk of each Group
entity is managed locally. Each operation has a facility with the
Group, the amount of the facility being based on budgets. The
budgets are set locally and agreed by the Board in advance,
enabling the Group's cash requirements to be anticipated. Where
facilities of Group entities need to be increased, approval must be
sought from the Board.
Foreign exchange risk
Foreign exchange risk arises
because the Group has operations located in various parts of the
world whose functional currency is not the same as the functional
currency in which the Group companies are operating. Although its
global market penetration reduces the Group's operational risk in
that it has diversified into several markets, the Group's net
assets arising from such overseas operations are exposed to
currency risk resulting in gains or losses on retranslation into
Sterling. Only in exceptional circumstances would the Group
consider hedging its net investments in overseas operations as
generally it does not consider that the reduction in foreign
currency exposure warrants the cash flow risk created from such
hedging techniques.
Foreign exchange risk also arises
when individual Group entities enter into transactions denominated
in a currency other than their functional currency.
The Group's policy is, where
possible, to allow Group entities to settle liabilities denominated
in their functional currency (primarily Sterling, US Dollar or
South Korean Won) with the cash generated from their own operations
in that currency. Where Group entities have liabilities denominated
in a currency other than their functional currency (and have
insufficient reserves of that currency to settle them) cash already
denominated in that currency will, where possible, be transferred
from elsewhere within the Group.
The Group has two overseas
subsidiaries in the USA and South Korea. Their revenues and
expenses, other than those incurred with the UK business, are
primarily denominated in their functional currency. The Board does
not believe that there are any significant risks arising from the
movements in exchange rates with these companies due to the
insignificance to the Group of Titon Inc.'s net assets and the
long-term nature of the Group's investment in Titon
Korea.
The UK businesses make purchases
from approximately twenty overseas suppliers who invoice in the
local currency of that supplier. This, in addition to the Euro and
US Dollar cash balances held in the UK and the 5% (2023: 10%) of
sales from the UK businesses not invoiced in Sterling, gives rise
to foreign currency exposure which is detailed in the table
below.
As of 30 September the Group's UK
net exposure to foreign exchange risk was as
follows:
|
Net
foreign currency financial assets / (liabilities)
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
Euro
|
132
|
(176)
|
|
US
Dollar
|
316
|
469
|
|
Total net exposure
|
448
|
293
|
The effect of a 10% weakening of
the Euro and the US Dollar against Sterling at the reporting date
of 30 September 2024 on these denominated trade and other
receivables, trade and other payables and cash balances carried at
that date would, had all other variables held constant, have
resulted in a decrease in pre-tax profit for the year and decrease
of net assets of £41,000 (2023: £27,000). A 10% strengthening
in the exchange rate would, on the same basis, have increased
pre-tax profit and increased net assets by £45,000 (2023: increase
of £29,000).
22 Pension
The Group operates a defined
contribution pension scheme. The assets of the scheme are held
separately from those of the Group in independently administered
funds. The pension cost charge represents contributions payable by
the Group to these funds during the year (see note 4). The
unpaid contributions outstanding at the year end, included in
accruals (note 17) are £52,000 (2023: £37,000).
23 Share-based
payments
Equity settled share option schemes
The Group provides share option
schemes for Directors and for other members of staff.
There are presently three equity
settled share option schemes; one HMRC approved and one unapproved
in which employees may be invited to participate, which were both
introduced in March 2010. The third scheme was introduced in July
2021 and an additional tranche was introduced in July 2024 and is
HMRC registered. The exercise of options granted under these
schemes is dependent upon the growth in the earnings per share of
the Group, over any three consecutive financial years following the
date of grant, exceeding the growth in the retail price index over
the same period by at least 9 per cent.
The vesting period of all share
option schemes is three years. If the options remain unexercised
after a period of ten years from the date of grant, or on an
employee leaving the Group, the options expire.
In the year to 30 September 2024
there were 150,000 share options granted (2023: nil).
Details of the share options
granted and exercised during the year and the assumptions used in
the Black-Scholes model for each share-based payment are as
follows:
|
Date of
share option grant
|
|
15/01/14
|
30/01/18
|
15/07/21
|
01/07/22
|
|
22/07/24
|
Number
of
share
options
|
|
|
Exercise price (pence)
|
|
58.0
|
156.5
|
138.5
|
95.0
|
|
70.0
|
|
|
|
Number of share options granted
initially
|
|
320,000
|
205,000
|
260,000
|
150,000
|
|
150,000
|
|
|
|
Number of share options
outstanding at 01/10/22
|
|
65,000
|
132,000
|
90,000
|
150,000
|
|
-
|
437,000
|
|
|
Share
options lapsed
|
|
(10,000)
|
(60,000)
|
-
|
(150,000)
|
|
-
|
(220,000)
|
|
|
Share
options exercised
|
|
(10,000)
|
-
|
-
|
-
|
|
-
|
(10,000)
|
|
|
Number of share options
outstanding at 30/09/23
|
|
45,000
|
72,000
|
90,000
|
-
|
|
-
|
207,000
|
|
|
Share
options (lapsed) / granted
|
|
(25,000)
|
(7,000)
|
(20,000)
|
-
|
|
150,000
|
98,000
|
|
|
Share
options exercised
|
|
(20,000)
|
-
|
-
|
-
|
|
-
|
(20,000)
|
|
|
Number of share options
outstanding at 30/09/24
|
|
-
|
65,000
|
70,000
|
-
|
|
150,000
|
285,000
|
|
|
The
inputs to the Black-Scholes pricing model are:
|
|
|
|
|
|
|
|
|
|
|
Expected
volatility %
|
|
116
|
88
|
97
|
97
|
|
97
|
|
|
Expected
option life (years)
|
|
6
|
6
|
6
|
6
|
|
6
|
|
|
Risk free
rate %
|
|
2.18
|
1.13
|
0.46
|
0.46
|
|
0.46
|
|
|
Expected
dividend yield %
|
|
5
|
3
|
3
|
3
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
During the year no additional
share options, included in the table above, met the conditions of
exercise (2023: nil).
At the end of the financial year
135,000 share options met the conditions of exercise and have a
weighted average exercise price of 147p (2023: 45,000 at 58p). The
285,000 share options outstanding at 30 September 2024 had a
weighted average exercise price of £1.07 (2023: 207,000 at £1.273)
and a weighted average remaining contractual life of 7.93 years
(2023: 5.46 years).
The share price at 30 September
2024 was 65.0p (2023: 80.0p). The average market price during the
year was 75.8p (2023: 76.4p).
The Group uses a Black-Scholes
pricing model to determine the annual fair value charge for its
share-based payments. Expected volatility is based on historical
volatility over the last six years' data of the Company. The
calculated fair values of the share option awards are adjusted to
reflect actual and expected vesting levels.
In accordance with IFRS 2, the
fair value of equity-settled share-based payments to employees is
determined at the date of grant and is expensed on a straight-line
basis over the vesting period on the Group's estimate of shares
that will eventually vest. A credit of £22,000 was recognised in
respect of share options in the year (2023: credit £72,000) of
which £9,000 (2023: £11,000) was the charge made in respect of key
management personnel.
24 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.
Related
party transactions are made on terms equivalent to those that
prevail in arm's length transactions only where such terms can be
substantiated.
During the
year the Company recharged management service fees and rent to
other wholly owned Group members totalling £640,000 (2023:
£590,000). See Note 15 for the related party balances at 30
September 2024.
Transactions for the year between the Group companies and the
associate company, which is a related party, were as
follows:
|
|
Sales of
goods
|
Amount owed (to)/
by
related
party
|
|
|
2024
|
2023
|
2024
|
2023
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Browntech
Sales Co. Ltd
|
2,492
|
2,488
|
47
|
42
|
Trading debts between subsidiaries
and BTS are created only when the ultimate customer has accepted
the successful inclusion of our products into
buildings.
Key management who hold the
authority and responsibility for planning, directing and
controlling activities of the Group are comprised solely of the
Directors. Aside from compensation arrangements including share
options, there were no transactions, agreements or other
arrangements, direct or indirect, during the year in which the
Directors had any interest, The Directors' remuneration is
disclosed in the Remuneration Report on page 31 of this
document.
Remuneration paid to key
management personnel during the year was as follows:
|
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
Short
term benefits
|
624
|
604
|
|
Post-employment benefits
|
59
|
34
|
|
Share
based payments
|
9
|
11
|
|
|
692
|
649
|
The Non-executive Directors
received fees for their services to the Titon Holdings Plc Board as
disclosed in the Directors' Remuneration Report.
J N Anderson, a substantial
shareholder and founder of the Group, received £3,791 during the
year for advisory services (2023: £5,000). The agreement for these
services was terminated 2 July 2024.
25 Contingent
liability
A composite company unlimited
guarantee has been given by Titon Hardware Limited, to its bankers
to secure all the liabilities of Titon Holdings Plc.
26 Discontinued
operations
a) Description
On 24 October 2024 the Group
announced its intention to exit from Korea and had agreed a
conditional sale for both the subsidiary Titon Korea and the
associate Browntech Sales Co. Ltd. The associated assets and
liabilities were consequently presented as held of sale in these
financial statements.
The process was completed 13
December 2024 where all the conditions of the agreement were met by
both parties and is reported in the current period as a
discontinued operation. Financial information relating to the
discontinued operation is detailed below.
b) Financial Performance and cash flow
information
The financial performance and cash
flow information presented are for the 12 months ended 30 September
2024 and 30 September 2023.
|
|
|
|
2024
|
2023
|
|
|
|
Note
|
£'000
|
£'000
|
|
Revenue
|
3
|
2,492
|
2,488
|
|
Cost of sales
|
|
(2,298)
|
(2,196)
|
|
Gross profit
|
|
194
|
292
|
|
Distribution costs
|
|
(44)
|
(60)
|
|
Administrative expenses
Income tax
|
|
(291)
-
|
(636)
(111)
|
|
Goodwill write off
|
|
(78)
|
-
|
|
Loss after income tax from discontinued
operations
|
|
(219)
|
(515)
|
|
Share of post-tax loss from
associate
|
|
(114)
|
(241)
|
|
Write-down to adjust the carrying
value of assets held for sale in associate to fair value less costs
to sell
|
26(c)
|
(1,480)
|
-
|
|
Loss from discontinued operations
|
|
(1,813)
|
(756)
|
|
|
|
|
|
|
Net cash outflow from operating
activities
|
|
(43)
|
29
|
|
Net cash inflow from investing
activities
|
|
24
|
(14)
|
|
Net cash outflow from financing
activities
|
|
-
|
(65)
|
|
Exchange movement
|
|
2
|
8
|
|
Net decrease in cash generated by
subsidiary
|
|
(17)
|
(42)
|
|
|
|
|
|
c) Details of the write-down to adjust the carrying value of assets held for
sale for the associate
to fair value less costs to sell
|
|
|
|
2024
|
|
|
|
|
|
£'000
|
|
|
Consideration agreed net of taxes
and legal fees
|
|
704
|
|
|
Carrying amount of
investment
|
|
(2,184)
|
|
|
Write-down to adjust the carrying value of assets held for
sale to fair value less costs to sell
|
|
(1,480)
|
|
|
|
|
|
|
The following assets and
liabilities were reclassified as held for sale in relation to the
discontinued operation as at 30 September 2024, in relation to the
subsidiary Titon Korea Ltd and associate Browntech Sales Co.
Ltd:
|
|
|
|
2024
|
|
|
|
|
|
£'000
|
|
|
Other receivables
|
|
21
|
|
|
Amounts owed from related
parties
|
|
47
|
|
|
Cash
|
|
15
|
|
|
Total assets of subsidiary
|
|
83
|
|
|
Investment in associate
|
|
705
|
|
|
Total assets held for sale
|
|
788
|
|
|
Trade payables
|
|
(76)
|
|
|
Other payables
|
|
(62)
|
|
|
Total liabilities
|
|
(138)
|
|
|
Net liabilities of subsidiary
|
|
(54)
|
|
|
|
|
|
|
The only asset held for sale
relating to the Company's financial position is the investment in
associate of £705k shown above.
27 Exceptional
items
|
|
2024
|
2023
|
|
|
£'000
|
£'000
|
|
Restructuring costs
|
216
|
39
|
|
Allowance
for slow moving inventories
|
1,299
|
-
|
|
Exceptionals total
|
1,515
|
39
|
28 Events after the reporting
date
Since the year end, the sale of
Titon Korea and Browntech Sales Co. Ltd was completed. £710,178 was
received 13 December 2024.
There have been no other events
after the reporting date that materially affect the position of the
Group.
Summarised consolidated results
|
|
|
2024
|
2023
|
2022
|
2021
|
2020
|
|
Continuing
operations
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
Revenue
|
15,476
|
19,846
|
19,050
|
19,835
|
15,733
|
|
Gross
profit
|
4,333
|
5,921
|
5,817
|
7,350
|
5,654
|
|
Exceptional items
|
(1,515)
|
(39)
|
(349)
|
-
|
-
|
|
Operating
(loss) / profit
|
(2,431)
|
(194)
|
(916)
|
1,117
|
(239)
|
|
Income
tax credit / (expense)
|
473
|
25
|
419
|
(35)
|
146
|
|
(Loss) /
profit after tax
|
(1,958)
|
(169)
|
(497)
|
1,082
|
(93)
|
|
Discontinued operations
|
(1,813)
|
(756)
|
(46)
|
(79)
|
215
|
|
Total (loss) / profit after
tax
|
(3,771)
|
(925)
|
(543)
|
1,003
|
122
|
|
Dividends
|
56
|
112
|
502
|
390
|
332
|
|
Basic
(loss) / earnings per share
|
(32.92p)
|
(6.12p)
|
(3.89p)
|
9.24p
|
0.52p
|
|
|
|
|
|
|
|
|
Assets
Employed
|
|
|
|
|
|
|
Property,
plant &
equipment
|
2,765
|
3,183
|
3,321
|
3,476
|
3,469
|
|
Net cash
and cash equivalents
|
2,281
|
2,238
|
1,726
|
4,794
|
5,572
|
|
Net
current assets
|
6,504
|
7,957
|
7,934
|
9,313
|
9,138
|
|
|
|
|
|
|
|
|
Financed
by
|
|
|
|
|
|
|
Shareholders' funds: all equity
|
10,935
|
14,704
|
15,707
|
16,414
|
15,943
|
|
|
|
|
|
|
|
|
The
five-year summary does not form part of the audited financial
statements and is not an IFRS statement.
Directors and Advisers
Directors
Executive
T Carpenter (Chief Executive,
appointed April 2024)
C V Isom (Chief Financial
Officer)
Non-executive
J Brooke (Group Non-Executive
Chair, appointed January 2024)
T N Anderson (Deputy Chair,
resigned July 2024)
N C Howlett (resigned September
2024)
G P Hooper
J Ward
K A Ritchie (resigned February
2024)
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
6th 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
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
