TIDMTON
RNS Number : 3151K
Titon Holdings PLC
13 December 2018
13 December 2018 LEI: 213800ZHXS8G27RM1DD7
Titon Holdings PLC
Preliminary results for the year to 30 September 2018
Another record year of delivery
Titon Holdings Plc ("Titon", the "Group" or the "Company"), a
leading international manufacturer and supplier of ventilation
systems, and window and door hardware, is pleased to announce its
preliminary results for the year ended 30 September 2018.
Summary Financial Results
2018 2017 Change
Net revenue GBP29.9m GBP28.0m +7%
EBITDA GBP2.85m GBP2.46m +16%
EBIT GBP2.19m GBP1.85m +18%
Profit before tax GBP2.98m GBP2.49m +20%
Earnings per share (EPS) 19.17p 16.55p +16%
Full year dividends per
share (DPS) 4.75p 4.20p +13%
Financial Highlights
-- Group net revenue rose 7% to a record GBP29.9 million (2017:
GBP28.0 million), an increase of 8% on a constant currency
basis.
-- Gross profit margin increased by 0.9%, to 26.8%.
-- Profit before tax of GBP2.98 million increased by 20% (2017: GBP2.49 million).
-- Proposed final dividend of 3.0 pence per share, up 11% (2017:
2.7 pence), taking dividends for the full year to 4.75 pence, an
increase of 13% (2017: 4.2 pence).
-- Net cash at 30 September 2018 of GBP3.42 million (2017: GBP3.27 million).
-- Maiden cash dividend of GBP433,000 paid by Titon Korea to the Company.
-- Group return on capital employed (ROCE) (1) of 15.3% (2017: 15.1%).
-- Trading for the first two months of 2019 in line with expectations.
Operational highlights
-- Titon Korea's revenue grew by 21% and its net profit after
tax rose by 24%; it remains the Group's largest contributor to
Group profits.
-- The UK and European based businesses saw revenue rise 7% in the year:
-- Mechanical ventilation products again performed well, with
good growth in exports in both existing and new markets in
Continental Europe, up by 13%.
-- The UK hardware business also improved on last year with
Titon branded door and window products recording 34% growth in
revenue; other sub-sectors also continued to grow.
-- Sales in the USA have fallen significantly in the year due to
the completion of a large subsidised maintenance programme and a
general slowdown in Titon's regional markets. Titon's US business
represents only 2% of Group revenue (2017: 6%) and there are a
number of projects in the pipeline, which, if delivered, will
return the US business to growth.
-- The Group has also continued to promote the benefits of good indoor air quality in the UK.
Executive Chairman Keith Ritchie said: "It was another record
year for Titon with revenues of GBP30 million and profit before tax
growing by 20%, to GBP2.98 million. The total dividend for the year
was also increased by 13% which is now the 6(th) consecutive year
of rising dividends underpinned by a robust balance sheet and a
growing cash position.
"The UK economy continues to grow at a modest rate in both
historic and relative terms with consensus forecasts for GDP growth
clustered around 1.5% per annum in both 2019 and 2020. These
forecasts, too, are made assuming that the UK reaches an agreement
with the EU about withdrawing in an orderly manner and any
continuing uncertainty is unwelcome to our business. In the first
two months of the new fiscal year, we have been pleased with UK and
Continental European trading, which is in line with the same period
in 2017, when October and November were particularly good
months.
"In South Korea, the World's 12th largest economy(2) and the
Group's largest net profit contributor, Q3 of calendar 2018 saw
slightly slower GDP growth in relative terms at 2.0% compared with
2.8% in Q2 due largely to weaker construction and business
investment. We anticipate that increasing levels of air pollution
may raise demand for mechanical ventilation units over natural
ventilation products in fiscal 2019, resulting in a slowdown in our
core natural ventilation business. We are, however, in the process
of developing new solutions for the South Korean ventilation
market. Most importantly, the trajectory of the South Korean
economy remains enviably positive with FocusEconomics forecasting
GDP growth of 2.6% in both 2019 and 2020 as Government spending
increases and monetary policy remains accommodative. We are
therefore positive on the medium-term outlook for our South Korean
business.
"Titon builds and delivers popular products across a unique
geographical spread. It has good people and a perennially strong
balance sheet. We also continue to look for new opportunities for
growth within our target markets. 2019 may be a more testing year
in South Korea and the UK, compounded by the continuing uncertainty
over Brexit. However, provided that Brexit doesn't negatively
impact the UK economy we expect another year of growth in revenue
and profits for Titon in line with market expectations.
For further information please contact:
Titon Holdings Plc
Keith Ritchie, Executive Chairman Tel: +44 (0)1206
713821
Shore Capital - Nominated Adviser and Tel: +44 (0)20
Broker 7408 4090
Dru Danford
Edward Mansfield
Daniel Bush
Notes:
(1) ROCE is calculated by dividing EBIT by capital employed
(capital employed being the sum of shareholders' funds,
non-controlling interests and all debt less intangible assets and
cash)
(2) International Monetary Fund data at May 2018
Chairman's Statement
It was another record year for Titon, generating revenue of
GBP30 million and delivering a 20% increase in profit before tax to
GBP3.0 million. The total declared dividend for the year was also
increased by 13%.
Profit and loss
In the year ended 30 September 2018, the Group's net revenue
(which excludes inter-segment activity) rose 7% to GBP29.9 million
(2017: GBP28.1 million). On a constant currency basis, however, the
increase is 8%.
The gross margin increased from 25.9% to 26.8% and EBITDA was
16% higher at GBP2.85 million (2017: GBP2.46 million). Earnings
before interest and tax (EBIT) or operating profit rose 18% to
GBP2.19 million (2017: GBP1.85 million) with the operating margin
higher at 7.3% (2017: 6.6%).
Net interest contributed GBP13,000 (2017: GBP10,000) while the
share of profits from the Group's associate (in South Korea) rose
23% to GBP778,000 (2017: GBP633,000) resulting in profit before tax
of GBP2.98 million, which was an increase of 20% (2017: GBP2.49
million). On a constant currency basis there was no material change
to the 2018 profit before tax.
Earnings per share for the year increased 16% to 19.2 pence
(2017: 16.5 pence). The effective rate of taxation increased to 12%
(2017: 11%).
The Directors are proposing a final dividend of 3.0 pence per
share (2017: 2.7 pence). When added to the interim dividend of 1.75
pence, paid on 21 June 2018 (2017: 1.5 pence), this represents a
total dividend for the year of 4.75 pence (2017: 4.20 pence) a 13%
rise on 2017. If approved by shareholders at the forthcoming Annual
General Meeting on 20 February 2019, the dividend is payable on 26
February 2019 to shareholders on the register at 18 January 2019.
The ex-dividend date is 17 January 2019.
Statements of financial position and cash flows
Net assets including non-controlling interests rose GBP2.3
million to GBP18.5 million with net cash at GBP3.42 million (2017:
GBP3.27 million) which is equivalent to 18.5% of net assets (2017:
20.2%). Inventory levels at the year-end increased by GBP997,000 on
2017 due to strong business growth in South Korea and the
introduction of new products into the UK and European markets. In
turn, this meant that cash generated from operations in the year
was GBP1.94 million (2017: GBP2.24 million). Capital expenditure
increased to GBP893,000 (2017: GBP706,000) and dividends paid to
the shareholders of Titon Holdings Plc increased by 19% to
GBP489,000 (2017: GBP410,000). Titon Korea also paid a maiden
dividend in the year and this led to a cash outflow from the Group
to the Non-Controlling Interests of GBP416,000 (2017: GBP0), whilst
simultaneously repatriating a similar amount to the UK as a
dividend to Titon Holdings Plc. The result of the above is an
overall net increase in the Group's cash reserves in the period of
GBP146,000 (2017: GBP831,000). Net current assets were GBP11.2
million (2017: GBP9.9 million) with a Quick Ratio(1) of 1.97 (2017:
2.13).
ROCE(2) was 15.3% (2017: 15.1%) with Capital Turn at 2.1 (2017:
2.3).
Segment analysis
The directors look initially at geographical areas to evaluate
the Group's performance and then consider product group splits at
the secondary level.
UK and Europe
Revenue from the UK and Europe increased by 7% in fiscal 2018.
This increase was derived chiefly from a strong performance in the
Hardware business comprising sales of our traditional trickle
vents, and window and door hardware. Here, sales into the aluminium
window and door sector continued to perform strongly, up 12%. I am
also pleased to report that sales of Titon branded door and window
hardware products had a strong year with a 34% annualised revenue
increase in the year, which reflects a lot of hard work put into
this product area.
Results from the Ventilation System's sales of mechanical
ventilation products saw an increase of 7.5% in revenue, with
pleasing demand for exports again as new customers have been
introduced. The latter reflects a continued targeting of and
investment in new geographical markets, particularly Eastern
Europe. Within the UK, sales were up marginally on 2017 as we
restructured our sales areas outside of London and the South
East.
Titon continues to invest in research and development which, in
turn, yields a continuing number of new products for both the
Ventilation Systems and Hardware businesses and this will also be
true in 2019. The importance of air quality, both outdoors and
indoors, continues to expand as the impact of poor quality air
becomes more understood by the medical profession, governments and
consumers. Titon has worked with one of our trade associations,
Beama (British Electrotechnical & Allied Manufacturers
Association), which represents manufacturers of electro technical
products, such as ventilation products, to promote the benefits of
good indoor air quality. In October 2018, the Healthy Homes and
Buildings All Party Parliamentary Group published a White Paper
entitled Building our Future, Laying the Foundations for Healthy
Homes and Buildings. I am very pleased to say that Titon was a
significant contributor to this paper, which we hope will lead to
healthier homes and higher sales of ventilation products.
The value of UK private and public housebuilding output is
forecast to increase in 2018 by 4.5% against calendar 2017
according to the Construction Products Association. At the same
time, the expected value of repair, maintenance and improvement
(RMI) in the private and public residential sectors is forecast to
be flat in 2018 against 2017.
South Korea
In South Korea, the Group's subsidiary, Titon Korea (51% owned),
manufactures natural window ventilation products and is the
national market leader with an estimated market share in this core
sub-sector in excess of 75%. In fiscal 2018, it also had another
very good year with revenue increasing by 21% to GBP11.6 million,
due to higher private sector demand, and its contribution to Group
profit after tax was up by 24% to GBP1.0million.
The Group's associate company, Browntech Sales Co. Limited
('BTS') also operates exclusively in South Korea and it generated
another higher contribution in the year, with the Group recognising
a share of profits from BTS of GBP778,000 (2017: GBP633,000) up 23%
on 2017. In terms of activity, BTS distributes ventilation products
in South Korea and both invests in and develops schemes in the
domestic residential real estate market. There are three such
schemes active at this time: the first in the form of a secured
loan, which is expected to be repaid in 2019; the second, a
residential refurbishment in Seoul, which is tenanted; and the
third, the development of a residential property in Seoul, which
has now been completed and is currently being marketed. Taking
Titon Korea and BTS together, South Korea is the largest
contributor to the Group's profit after tax at GBP1.8million for
the year. (2017: GBP1.5million).
United States
Finally, as I noted in the interim results, revenue in the US
was substantially lower and this continued in the second half,
although the US represents only a small proportion of Group sales
(2% in 2018 and 6% in 2017). In fact, sales for the year were down
by almost two-thirds against 2017, which was very disappointing and
due largely to the ending of a subsidised window replacement
programme in New York and a general market slowdown in one of our
core markets in Washington State. It is important to add, however,
that we benefit from very low fixed costs in our US business and
the region has made a positive contribution overall to the Group's
results.
Board
We have not made any changes to the Board in the last twelve
months. However, we have agreed, in connection with our move to
AIM, that we will appoint another independent Non-executive
Director to the Board in 2019. The process of selecting an
appropriate person for this role is underway and an announcement
will be made in due course.
Employees
Once again, I offer my sincere thanks to all of the employees of
Titon as the success of the Group is down to their hard work and
talents. We continue to grow and develop as a business and it would
not be possible without their contribution. As with last year, we
have continued to make increases in the wages of our UK weekly paid
employees in line with the National Minimum Wage.
Investors
We have now completed our move from the Main Market of the
London Stock Exchange to the AIM market, which was effective from
10 December 2018. We are very pleased that shareholders voted in
favour of this change as the Board believes it offers significant
benefits to existing shareholders and new investors in Titon.
We have continued to engage the corporate research house Hardman
& Co. which regularly writes and distributes investment
research on Titon and which we believe has both widened interest in
the Group and continues to have a positive impact in the share
price over the past three years. We have engaged Shore Capital as
our Nominated Advisor and Broker for the purposes of the move to
AIM and they will initiate research coverage on Titon in early
2019. Finally, here, I would like to mention again the Group's
dividend reinvestment programme (DRIP) which has operated for a
number of years. This represents a straight-forward and cost
effective way for shareholders to increase their holdings in Titon
should they wish to do so.
Outlook
It was another record year for Titon with revenue of GBP30
million and profit before tax ahead by a fifth to GBP2.98 million.
The dividend for the year was also increased by 13% which is the
6th consecutive year of rising dividends.
The UK economy continues to grow at a modest rate in both
historic and relative terms with consensus forecasts for GDP growth
clustered around 1.5% per annum in both 2019 and 2020. These
forecasts, too, are made assuming that the UK reaches an agreement
with the EU about withdrawing in an orderly manner and any
continuing uncertainty is unwelcome to our business. By way of a
failsafe, though, we have already placed orders for certain extra
components with our EU suppliers. That said, in the first two
months of the new fiscal year, we are very pleased with UK and
continental European trading, which is in line with the same period
in 2017 when October and November were particularly good
months.
In South Korea, the World's 12th largest economy(3) and the
Group's largest net profit contributor, Q3 of calendar 2018 saw
slightly slower GDP growth in relative terms at 2.0% compared with
2.8% in Q2 due largely to weaker construction and business
investment. We anticipate that rising levels of air pollution may
raise demand for mechanical ventilation units over natural
ventilation products in fiscal 2019, resulting in a slowdown in our
core natural ventilation business. We are, however, in the process
of developing new solutions for the South Korean ventilation
market. Most importantly, the trajectory of the South Korean
economy remains enviably positive with FocusEconomics forecasting
GDP growth of 2.6% in both 2019 and 2020 as Government spending
increases and monetary policy remains accommodative. We are
therefore positive on the medium-term outlook for our South Korean
business.
Titon builds and delivers popular products and has a unique
geographical spread. It has good people and a perennially strong
balance sheet. We also continue to look for new opportunities for
growth within our target markets. 2019 will be a more testing year
in the UK and in South Korea as noted above. However, provided that
Brexit doesn't negatively impact the UK economy we expect another
year of growth in revenue and profits for Titon in line with market
expectations.
On behalf of the Board.
K A Ritchie
Chairman
12 December 2018
Notes:
(1) The Quick Ratio measures liquidity and is calculated as
follows Current Assets-less-Stocks divided by Current
Liabilities
(2) ROCE is calculated by dividing EBIT by capital employed
(capital employed being the sum of shareholders' funds,
non-controlling interests and all debt less intangible assets and
cash); with Capital Turn calculated by dividing revenue by capital
employed
(3) International Monetary Fund data at May 2018
Unaudited Consolidated Income Statement
for the year ended 30 September 2018
Unaudited
2018 2017
GBP'000 GBP'000
Revenue 29,946 28,011
Cost of sales (21,920) (20,746)
------------------------------------------- ----------- ----------
Gross profit 8,026 7,265
Distribution costs (704) (717)
Administrative expenses (4,707) (4,249)
Research and development expenses (446) (467)
Other income 19 18
------------------------------------------- ----------- ----------
Operating profit 2,188 1,850
Finance income 13 10
Share of post-tax profits from associate 778 633
------------------------------------------- ----------- ----------
Profit before tax 2,979 2,493
Income tax expense (352) (269)
------------------------------------------- ----------- ----------
Profit after income tax 2,627 2,224
------------------------------------------- ----------- ----------
Attributable to:
Equity holders of the parent 2,113 1,804
Non-controlling interest 514 420
Profit for the year 2,627 2,224
------------------------------------------- ----------- ----------
Earnings per share attributed to equity
holders of the parent:
Basic 19.17p 16.55p
Diluted 18.88p 16.24p
Unaudited Consolidated Statement of Comprehensive Income
for the year ended 30 September 2018
Unaudited
2018 2017
GBP'000 GBP'000
Profit for the year 2,627 2,224
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 423 (443)
Total comprehensive income for the year 3,050 1,781
Attributable to:
Equity holders of the parent 2,399 1,509
Non-controlling interest 651 272
------------------------------------------- ----------- ---------
3,050 1,781
------------------------------------------- ----------- ---------
Unaudited Consolidated Statement of Financial Position
at 30 September 2018
Unaudited
2018 2017
GBP'000 GBP'000
Assets
Property, plant and equipment 3,655 3,548
Intangible assets 737 638
Investments in associates 2,876 1,966
Deferred tax assets 52 116
Total non-current assets 7,320 6,268
----------- ---------
Inventories 5,667 4,670
Trade and other receivables 7,799 6,644
Income tax receivable 12 79
Cash and cash equivalents 3,415 3,269
----------- ---------
Total current assets 16,893 14,662
-------------------------------------- ----------- ---------
Total Assets 24,213 20,930
-------------------------------------- ----------- ---------
Liabilities
Deferred tax liability 37 39
----------- ---------
Total non-current liabilities 37 39
----------- ---------
Trade and other payables 5,554 4,627
Income tax payable 154 63
Total current liabilities 5,708 4,690
-------------------------------------- ----------- ---------
Total Liabilities 5,745 4,729
-------------------------------------- ----------- ---------
Equity
Share capital 1,113 1,098
Share premium reserve 1,049 985
Capital redemption reserve 56 56
Treasury shares (27) (27)
Foreign exchange reserve 502 216
Retained earnings 13,554 11,887
-------------------------------------- ----------- ---------
Total Equity attributable to equity
holders of the parent 16,247 14,215
-------------------------------------- ----------- ---------
Non-controlling Interest 2,221 1,986
-------------------------------------- ----------- ---------
Total Equity 18,468 16,201
-------------------------------------- ----------- ---------
Total Liabilities and Equity 24,213 20,930
-------------------------------------- ----------- ---------
Unaudited Consolidated Statement of Changes in Equity
at 30 September 2018
Share Share Capital Foreign Treasury Retained Total Non- Total
Capital premium redemption exchange shares earnings controlling equity
reserve reserve reserve interest
GBP'000 GBP'000 GBP'000 GBP'000 GBP000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October
2016 1,091 950 56 511 (27) 10,479 13,060 1,714 14,774
---------------- --------- --------- ------------ ---------- ---------- ---------- --------- ------------- ---------
Translation
differences
on overseas
operations - - - (295) - - (295) (148) (443)
Profit for the
year - - - - - 1,804 1,804 420 2,224
---------------- --------- --------- ------------ ---------- ---------- ---------- --------- ------------- ---------
Total
Comprehensive
Income for
the
year - - - (295) - 1,804 1,509 272 1,781
---------------- --------- --------- ------------ ---------- ---------- ---------- --------- ------------- ---------
Dividends paid - - - - - (410) (410) - (410)
Share-based
payment
expense - - - - - 14 14 - 14
Ordinary
shares
issued 7 35 - - - - 42 - 42
---------------- --------- --------- ------------ ---------- ---------- ---------- --------- ------------- ---------
At 30
September
2017 1,098 985 56 216 (27) 11,887 14,215 1,986 16,201
---------------- --------- --------- ------------ ---------- ---------- ---------- --------- ------------- ---------
Translation
differences
on overseas
operations - - - 286 - - 286 137 423
Profit for the
year - - - - - 2,113 2,113 514 2,627
---------------- --------- --------- ------------ ---------- ---------- ---------- --------- ------------- ---------
Total
Comprehensive
income for
the
year - - - 286 - 2,113 2,399 651 3,050
---------------- --------- --------- ------------ ---------- ---------- ---------- --------- ------------- ---------
Dividends paid - - - - - (489) (489) - (489)
Dividends paid
to NCI in
subsidiary - - - - - - (416) (416)
Share-based
payment
expense - - - - - 43 43 - 43
Ordinary
shares
issued 15 64 - - - - 79 - 79
At 30
September
2018 1,113 1,049 56 502 (27) 13,554 16,247 2,221 18,468
---------------- --------- --------- ------------ ---------- ---------- ---------- --------- ------------- ---------
Unaudited Consolidated Statement of Cash Flows
for the year ended 30 September 2018
Unaudited
2018 2017
GBP'000 GBP'000
Cash generated from operating activities
Profit before tax 2,979 2,493
Depreciation of property, plant & equipment 448 438
Amortisation of intangible assets 209 175
Profit on sale of plant & equipment (16) -
Share based payment expense - equity
settled 43 14
Finance income (13) (10)
Share of associate's post-tax profit (778) (633)
------------------------------------------------- ----------- ---------
2,872 2,477
Increase in inventories (836) (133)
Increase in receivables (890) (161)
Increase in payables and other current
liabilities 792 57
Cash generated from operations 1,938 2,240
------------------------------------------------- ----------- ---------
Income taxes paid (132) (390)
------------------------------------------------- ----------- ---------
Net cash generated from operating activities 1,806 1,850
------------------------------------------------- ----------- ---------
Cash flows from investing activities
Purchase of plant & equipment (578) (520)
Purchase of intangible assets (315) (186)
Proceeds from sale of plant & equipment 46 45
Finance income 13 10
Net cash used in investing activities (834) (651)
------------------------------------------------- ----------- ---------
Cash flows from financing activities
Exercise of Share Options 79 42
Dividends paid to equity shareholders
of the parent (489) (410)
Dividends paid to Non-controlling shareholders (416) -
of a subsidiary
Cash withdrawn from / (transferred to)
treasury deposit accounts 300 (100)
Net cash used in financing activities (526) (468)
------------------------------------------------- ----------- ---------
Net increase in cash (excluding movement
on treasury deposits)* 446 731
Cash at beginning of the year (excluding
treasury deposits) 2,069 1,338
Cash at end of the year (excluding treasury
deposits) 2,515 2,069
------------------------------------------------- ----------- ---------
The cash and cash equivalents figure on the Consolidated
Statement of Financial Position includes both the cash at the year
end and the cash on treasury deposit of GBP900,000 (2017:
GBP1,200,000) and totals GBP3,415,000 at 30 September 2018 (2017:
GBP3,269,000).
*The net increase in cash including the movements on treasury
deposits for the year is GBP146,000 (2017: GBP831,000).
In respect of this change in presentation of the Consolidated
Statement of Cash Flows, the comparative figures have been
amended.
Notes to the Preliminary Announcement for the year ended 30
September 2018
1 Earnings per ordinary share
The calculation of the basic and diluted earnings per share is
based on the following data:
2018 2017
GBP'000 GBP'000
Numerator
Earnings for the purposes of basic earnings
per share being
earnings after tax attributable to members
of Titon Holdings Plc 2,113 1,804
----------------------------------------------- ------------ ------------
Denominator Number Number
Weighted average number of ordinary shares
for the purposes of basic
earnings per share 11,024,243 10,903,394
Effect of dilutive potential ordinary shares
: Share Options 165,212 207,855
------------ ------------
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share 11,189,455 11,111,249
------------ ------------
Earnings per share (pence)
Basic 19.17p 16.55p
Diluted 18.88p 16.24p
----------------------------------------------- ------------ ------------
2 Dividends
2018 2017
GBP'000 GBP'000
Final 2017 dividend of 2.70 pence (2016:
2.25 pence) per ordinary
share proposed and paid during the year relating
to the previous year's results 295 245
Interim dividend of 1.75 pence (2017: 1.50
pence) per ordinary
share paid during the year 194 165
489 410
---------------------------------------------------- --------- ---------
The Directors are proposing a final dividend of 3.0 pence (2017:
2.70 pence) per share. This will result in a final dividend
totalling GBP334,013 (2017: GBP296,561), subject to approval by the
shareholders at the Annual General Meeting. This dividend has not
been accrued at the balance sheet date.
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 Sales of passive and powered ventilation products
countries to distributors, window manufacturers and construction
companies.
Inter-segment revenue is transacted on an arm's length basis and
charged at prevailing market prices for a specific product and
market or cost plus where no direct comparative market price is
available. Segment results include items directly attributable to a
segment as well as those that can be allocated on a reasonable
basis. Research and development entity-wide financial expenses are
allocated to the business activities for which R&D is
specifically performed. Sales Administration and Other Expenses are
currently allocated to operating segments in the Group's reporting
to the CODM. Other Expenses include mainly central and parent
company overheads relating to Group management, the finance
function and regulatory requirements.
The measurement policies the Group uses for segment reporting
under IFRS 8 are the same as those used in its financial
statements. The total assets for the segments represent the
consolidated total assets attributable to these reporting segments.
Parent company results and consolidation adjustments reconciling
the segmental results and total assets to the consolidated
financial statements, are included within the United Kingdom
segment figures stated below.
Operating segment
The Directors' primary review of performance is by geographical
regions.
For the year ended United South North All other
30 September 2018 Kingdom Korea America countries Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 15,221 11,561 652 2,941 30,375
Inter-segment revenue (429) - - - (429)
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Total Revenue 14,792 11,561 652 2,941 29,946
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Segment profit 1,005 2,084 (109) (1) 2,979
Tax expense (352)
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Profit for the year 2,627
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Depreciation and amortisation 607 49 1 - 657
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Total assets 14,087 9,888 238 - 24,213
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Total assets include:
Investments in associates 2,651 - - - 2,651
Additions to non-current
assets
(other than financial
instruments
and deferred tax
assets) 889 4 - - 893
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
The South Korea Segment profit includes the Group's share of the
profits from the Associate of GBP778,000
Sales to Browntech Sales Co. Ltd (the Group's associate
undertaking in South Korea) of GBP11.56m represent 38% of Group
Revenue (2017: GBP9.53m - 34%). There are no other concentrations
of revenue above 10% during the year. (see Note 5 - Related party
transactions).
IFRS 8 requires entity wide disclosures to be made about the
regions in which it earns its revenues and holds its non-current
assets which are shown below.
For the year ended United Europe North Asia All other Total
30 September 2018 Kingdom America regions
Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
By entities' country
of domicile 17,733 - 652 11,561 - 29,946
By country from which
derived 14,792 2,804 652 11,639 59 29,946
------------------------ ---------- --------- ---------- --------- ----------- ---------
Non-current assets
By entities' country
of domicile 4,439 - 23 2,858 - 7,320
------------------------ ---------- --------- ---------- --------- ----------- ---------
Operating segment
For the year ended United South North All other
30 September 2017 Kingdom Korea America countries Consolidated
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 14,823 9,530 1,781 2,735 28,869
Inter-segment revenue (858) - - - (858)
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Total Revenue 13,965 9,530 1,781 2,735 28,011
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Segment profit 706 1,638 166 (17) 2,493
Tax expense (269)
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Profit for the year 2,224
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Depreciation and amortisation 563 49 1 - 613
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Total assets 12,916 7,704 310 - 20,930
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
Total assets include:
Investments in associates 1,741 - - - 1,741
Additions to non-current
assets
(other than financial
instruments
and deferred tax
assets) 672 34 - - 706
-------------------------------- ---------- --------- ---------- ------------ --------------------------------
The South Korea Segment profit includes the Group's share of the
profits from the Associate of GBP633,000
Sales to Browntech Sales Co. Ltd (the Group's associate
undertaking in South Korea) of GBP9.53m represent 34% of Group
Revenue (2016: GBP7.11m - 30%). There are no other concentrations
of revenue above 10% during the year (see Note 5 - Related party
transactions).
IFRS 8 requires entity wide disclosures to be made about the
regions in which it earns its revenues and holds its non-current
assets which are shown below.
For the year ended United Europe North Asia All other Total
30 September 2017 Kingdom America regions
Revenues GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
By entities' country
of domicile 16,700 - 1,781 9,530 - 28,011
By country from which
derived 13,965 2,565 1,781 9,684 16 28,011
------------------------ ---------- --------- ---------- --------- ----------- ---------
Non-current assets
By entities' country
of domicile 4,295 - 1 1,972 - 6,268
------------------------ ---------- --------- ---------- --------- ----------- ---------
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 trickle
ventilation 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.
2018 2017
GBP'000 GBP'000
Trickle ventilation and window and door
hardware products 23,194 21,734
Mechanical ventilation products 6,752 6,277
----------------------------------------- --------- ---------
Revenue 29,946 28,011
----------------------------------------- --------- ---------
4 Tax expense
2018 2017
Current income tax: GBP'000 GBP'000
Corporation tax expense (307) (249)
Adjustment in respect of prior years 17 (43)
--------- ---------
(290) (292)
Deferred tax:
Origination and reversal of temporary differences (62) 23
Income tax expense (352) (269)
---------------------------------------------------- --------- ---------
The charge for the year can be reconciled
to the profit
per the income statement as follows:
Profit before tax
Effect of: 2,979 2,493
Expected tax charge based on the standard
rate of
Corporation tax in the UK of 19.0% (2017:
19.5%) (566) (486)
Additional deduction for R&D expenditure 148 171
Effect of Associate's results reported net
of tax 151 127
Expenses not deductible for tax purposes (31) (11)
Difference in overseas tax rates (47) (27)
Withholding taxes paid on Subsidiary's dividend (24) -
Adjustments in respect of prior periods 17 (43)
Income tax expense (352) (269)
-------------------------------------------------- ------- -------
5 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.
During the year the Company recharged management service fees
and rent to other wholly-owned Group members totalling GBP384,000
(2017: GBP351,000).
Titon Korea Co. Ltd., the 51% owned subsidiary, paid a dividend
during the year to its shareholders amounting to GBP849,000 (2017:
GBPnil). Of this amount, GBP433,000, before withholding tax, was
paid to the Company with the other GBP416,000 being paid to the
non-controlling interests.
Transactions for the year between the subsidiary companies and
the associate company, which is a related party, were as
follows:
Sales of goods Amount owed by
related party
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
------------------ --------- --------- --------- ---------
Browntech Sales
Co. Ltd 11,561 9,530 4,059 2,798
------------------ --------- --------- --------- ---------
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, there were no transactions, agreements or other
arrangements, direct or indirect, during the year in which the
Directors had any interest.
6 Principal risk and uncertainties
The key financial and non-financial risks faced by the Group are
disclosed in the Group's Annual Report and Accounts for the year
ended 30 September 2017 within the Report on Risk Management (pages
9 to 13) available at www.titonholdings.com. The Board considers
that these remain a current reflection of the risks and
uncertainties facing the business.
7 Basis of preparation
The financial information for the year ended 30 September 2018
together with the comparative year has been prepared in accordance
with the recognition and measurement criteria of International
Financial Reporting Standards (IFRSs) as adopted by the European
Union.
The accounting policies of the Group under International
Financial Reporting Standards (IFRSs) are set out in detail in the
2017 Financial Statements which are available from the Group's
website at www.titonholdings.com.
Except for the implementation of the amendments below, which had
no material impact on the Group, there have been no changes to the
accounting policies during the year.
* Recognition of deferred tax assets for unrealised
losses (Amendments to IAS 12). The amendments to IAS
12 are intended to clarify the requirements on
recognition of deferred tax assets for unrealised
losses on debt instrument financial assets measured
at fair value.
* Disclosure Initiative: Amendments to IAS 7. The
amendments to IAS 7 are intended to improve
information provided to users of financial statements
about changes in financial liabilities, and financial
assets if they meet the same definition, arising from
an entity's financing activities. Entities will be
required to disclose the cash flow and non-cash
changes arising from these financing activities.
The information in this preliminary announcement does not
constitute the statutory accounts of the Group within the meaning
of Section 435 of the Companies Act 2006 for the year ended 30
September 2018 or 2017.
The financial information for the year ended 30 September 2017
is derived from the statutory accounts for that year which have
been delivered to the Registrar of Companies. The auditors have
reported on those accounts; their report was unqualified, did not
draw attention to any matters by way of emphasis, and did not
contain a statement under 498(2) or 498(3) of the Companies Act
2006.
The financial information for the year ended 30 September 2018
is unaudited. The statutory accounts for that year will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting which will be held on 20 February 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR DMMMZNZZGRZM
(END) Dow Jones Newswires
December 13, 2018 02:00 ET (07:00 GMT)
Titon (LSE:TON)
Historical Stock Chart
From Apr 2024 to May 2024
Titon (LSE:TON)
Historical Stock Chart
From May 2023 to May 2024