Holders Technology plc
Annual Report & Accounts 2019
Specialised PCB Materials, Lighting and Control Solutions
Holders Technology plc | Annual Report & Accounts 2018
Year in Brief
Holders Technology plc (“The Group”) supplies specialty laminates and materials for printed circuit board
manufacture (“PCB”) and operates as a Lighting and Control Solutions (“LCS”) provider.
The Group operates from the UK and from Germany, with a PCB division and an LCS division in each country.
LCS divisions made further progress during the year and achieved profitability, and the PCB division in the
UK made modest progress. Market conditions for the PCB division in Germany remained difficult which
resulted in reduced revenue and profitability for the division. The UK legacy tax liabilities were resolved with
a favourable outcome. The overall profit after tax was a modest improvement compared to 2018, from
slightly reduced revenue.
The directors will recommend payment of a final dividend of 0.75p per share, a total of 1.00p for the year
(2018 total: 0.75p).
The results are summarised below.
Holders Technology plc | Annual Report & Accounts 2019
Highlights20192018£'000£'000Continuing RevenuePCB8,6479,374LCS3,5153,112Group12,16212,486Gross MarginsPCB24.3%23.5%LCS36.7%34.1%Group27.9%26.2%Operating Profit/ (Loss)PCB230280LCS69(13)Central costs(155)(83)Group144184Profit before taxGroup150177Tax credit/ (expense)31(8)Profit after taxGroup181169Basic earnings per share4.31p4.06pDiluted earnings per share4.30p4.03pDividend paid & proposed1.00p0.75pCash734403
Contents
STRATEGIC REPORT
Page
Chairman’s statement
Operating and business review
Financial review
BOARD REPORTS
Company information
Report of the directors
Directors’ remuneration report
Corporate governance
AUDITOR’S REPORT
Independent auditor’s report to the members of Holders Technology plc
FINANCIAL STATEMENTS
Group income statement
Group statement of comprehensive income
Statements of changes in equity
Balance sheets
Statements of cash flows
Notes to the financial statements
AGM
Notice of annual general meeting
Five-year summary
1
2
4
6
7
10
11
15
21
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25
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54
Holders Technology plc | Annual Report & Accounts 2019
STRATEGIC REPORT
Chairman’s Statement
The Group operates from the UK and from Germany,
with a PCB division and an LCS division in each country.
UK PCB operations achieved a modest improvement in
the year despite the continuing challenging market.
I am pleased to report that both LCS divisions have
continued to make good progress during 2019, and PCB
UK has achieved modest growth. Market conditions
for PCB Germany however have remained difficult. As
a consequence, Group revenue was slightly lower than
2018. Operating profitability was lower than 2018,
while
slightly
compared to 2018.
after-tax profitability
improved
Revenue for the year was £12.2m (2018: £12.5m), with
gross margins of 27.9% (2018: 26.2%). The operating
profit for the year was £144,000 (2018: operating profit
of £184,000), and the profit after tax was £181,000
(2018: profit £169,000).
The PCB divisions together had revenue of £8.6m
(2018: £9.4m) and achieved an operating profit of
£230,000 (2018: profit £280,000). Margins increased
from 23.5% to 24.3%.
Economic conditions in Germany, especially in the
manufacturing sector, remained difficult during 2019.
This adversely impacted our German PCB operations,
the largest single element of the Group, with lower
revenue and profitability than in 2018.
LCS revenues overall amounted to £3.5m (2018:
£3.1m) with gross margins increasing from 34.1% to
36.7% and a profit of £69,000 was achieved (2018: loss
of £13,000). In the second half the sales and technical
team was considerably strengthened, and further LCS
investments are planned for 2020.
HMRC has now agreed the 2005 Cross-Border
Corporation Tax claim reported previously. As a result,
the related £29,000 tax and £14,000 interest liabilities
recognised at last year end were reversed during the
year.
On behalf of the Board I would like to record our thanks
to our staff for their hard work during 2019 which
resulted in a profitable year for the Group. Given the
improved earnings, the Board recommends an
increased final dividend of 0.75p in respect of the 2019
year.
The outlook for 2020 is in many ways the same as 2019.
Our LCS divisions are well placed to deliver further
improvements, whilst improvement in results from the
German PCB operations is heavily dependent on
recovery in the German automotive sector and wider
economy.
R W Weinreich
Executive Chairman
13 March 2020
Holders Technology plc | Annual Report & Accounts 2019
1
STRATEGIC REPORT
Operating and Business Review
Corporate strategy
The board seeks to enhance shareholder value over the
medium to long term. Our strategy to achieve this is to
focus resources on business activities which can
generate profitable and sustainable growth.
In doing so, we ensure that risk is carefully managed,
and that high standards of corporate governance and
transparency are maintained.
Where a suitable
investment opportunity is identified, we invest within
the bounds of internally generated cash flow and bank
facilities.
Business strategy
The Group has operated for many years as a distributor
of specialised and consumable materials to the PCB
industry in the UK and continental Europe. The
European PCB industry has strengths in the defence,
aerospace, automotive and medical sectors.
The Group continues to pursue a PCB strategy based
on dual positioning: both as a low-cost source of
standard products used throughout the industry; and
as an exclusive supplier of technically sophisticated
products to the PCB sector.
The Group’s LCS product and service offering ranges
from the sale of lighting components to supporting
customers with the design and assembly of complete
light engines. The LCS divisions also offer a complete
ecosystem of wireless control solutions, as well as the
provision of technical support and project services.
The Group has supported projects in the commercial,
education, healthcare and leisure sectors.
Our lighting and wireless controls strategy is to provide
a competitive and complementary premium product
range for our selected markets, enhanced by strong
technical support, services and industry knowledge.
The former “LED” divisions of the Group have been
renamed “LCS” or Lighting and Controls Solutions
divisions to recognise their broader offering of
complete light engines and wireless controls solutions.
Overall, PCB operations provide a steady profitable
revenue stream, and Lighting and Controls operations
offer the opportunity for higher growth/ higher margin
returns. In combination they also allow certain
efficiency gains.
Market Overview
2019 overall saw lower PCB revenue caused by the
overall weaker global economy.
With the acceptance of LED lighting in the marketplace
and an understanding of the energy saving benefits,
the market has moved to developing solutions for
Smart Lighting and incorporating lighting within the
‘Internet of Things’. The Group is well placed in
incorporate this smart,
offering solutions which
wireless technology and is working with key suppliers
in this sector.
PCB operations
UK
UK trading operations are based
in Galashiels,
Scotland. The PCB industry in the UK is oriented
towards the aerospace and defence industries, both of
which require a broad range of products. During the
year the division benefitted from a wider product
range, and improved product availability. The division
achieved modest growth in revenue and profitability.
Continental Europe
The German PCB industry is dominated by demand
from the automotive and industrial sectors. This was
impacted in 2019 by the weaker German economy and
we have seen continuing business uncertainty at the
start of 2020 due to the overall economic environment.
Lighting and Controls Solutions
UK
The LCS division Holders Components UK specialises in
providing Lighting and Controls solutions to Original
Equipment Manufacturers (OEMs), as well as working
closely with the lighting specification market. During
2019, the division benefited from an extended product
range and considerably strengthened sales and
technical teams.
Holders Technology plc | Annual Report & Accounts 2019
2
STRATEGIC REPORT
Operating and Business Review
(continued)
UK (continued)
Overall growth during 2019 was encouraging,
especially in the first half. The division has seen strong
interest in smart lighting control solutions during the
first quarter of 2020.
Continental Europe
The LCS division Holders Components Germany
specialises in providing Lighting and Controls solutions
to customers in continental Europe. The division also
made good progress in 2019 with an enhanced sales
team. In 2020, the division will add further resources
to the sales and technical teams to enhance the focus
on promoting the technology and services to the
lighting specification market.
Conclusion
During 2019 we continued to invest in new products,
equipment, and strong technical salespeople, further
developed our value-added services and focussed on
improving our processes to become more efficient. We
plan further investment in 2020 to broaden our sales
territory.
The outlook for LCS divisions is encouraging, and for
PCB UK is satisfactory. However, the outlook for PCB
Germany is heavily dependent on improvement in the
wider German economy.
Victoria Blaisdell
Group Managing Director
13 March 2020
Holders Technology plc | Annual Report & Accounts 2019
3
STRATEGIC REPORT
Financial Review
Key performance indicators
The board believes that the following key performance
indicators are of most significance to assessment of the
Group’s performance and financial position:
• Revenue
The turnover level is an important indication of the
strength of the Group’s product range and coverage.
• Profitability
Profitability is largely a function of the gross margins
achieved and management’s success in containing
administrative expenses in relation to turnover.
• Liquidity
The Group operates in a cyclical industry and the
directors have consistently adopted a conservative
approach to financing the Group’s activities. The key
measure is net liquid funds, as described below.
• Efficiency
Production efficiency is important in a competitive
PCB market.
Revenue
Group revenue from continuing operations decreased
from £12.5m to £12.2m.
Overall PCB revenue
decreased by 7.8%, whilst Lighting and Controls
revenue increased by 12.9%.
Profitability
The operating profit was £144,000 compared to an
operating profit of £184,000 in 2018. The gross profit
margin was 27.9% compared to 26.2% in 2018.
Administration costs as a proportion of revenue
increased from 21.6% in 2018 to 23.8% in 2019.
Administration costs increased from £2.7m to £2.9m.
Taxation
At the beginning of the year the Group had a potential
UK tax and interest liability of £43,000 in respect of EU
Cross Border Group Relief claims from former Swedish
operations. In 2019, the claim relating to this liability
was accepted by HMRC and the liability was reversed.
Post tax result
The profit for the financial year after tax, attributable
to equity shareholders was £181,000 (2018: profit of
£169,000).
The basic earnings per share was
4.31p(2018: 4.06p per share) and the fully diluted
profit per share was 4.30p (2018: 4.03p). hare) and
the fully diluted profit per share was 4.30p (2018:
4.03p
Dividends
The board proposes a final dividend of 0.75p per share
to be paid on 19 May 2020 to shareholders on the
register on 1 May 2020. Including the 0.25p interim
dividend already paid on 8 October 2019 the total
dividend for 2019 would be 1.00p (2018: 0.75p).
Principal risks and uncertainties
The directors believe that the following are the
principal risks and uncertainties faced by the Group:
• Competition
Both the PCB and Lighting and Controls sectors are
highly competitive, and the Group faces competition
from a wide range of companies. The Group
continually seeks the most cost-effective sources for
its products in order to remain competitive.
• Customers
The Group is exposed to the risk of bad debts. Within
the major European markets, the Group uses credit
analysis data to monitor customer risk levels and
maintain appropriate credit limits. Credit insurance
is used for UK and European customers whenever it
is economically available.
• Suppliers
As with any distribution business, the Group is
dependent on maintaining supply. The Group has
diversified its product range and sources in order not
to be overly dependent on any single supplier.
• Key Management
In order to ensure retention of key management, the
a
Group
stimulating working environment and clear two-way
communication.
remuneration,
competitive
offers
• Business Interruption
In order to minimise the
impact of business
interruption, the Group offers dual capacity in UK and
Germany, regularly maintains key machinery, and
holds appropriate business interruption insurance.
• Financial Control
Internal controls and multiple authorisation levels,
with monthly review of results and cash, are used to
combat fraud and potential misstatement of results.
Holders Technology plc | Annual Report & Accounts 2019
4
STRATEGIC REPORT
Financial Review (continued)
• Brexit
The Group has insignificant revenue from sales
between the UK and mainland EU, and therefore the
Board does not anticipate a significant impact on
revenue arising from the EU Withdrawal process.
• Coronavirus
The Group follows government health advice in
respect of the Covid-19 virus and is working to ensure
business continuity is maintained as far as is practical
during the current global pandemic.
Cash flow, liquidity and financing
The Group’s cash position improved during the year.
Cash balances increased from £403,000 to £734,000.
The improvement mainly came from the trading result
plus a stock reduction of £237,000. The stock
reduction mainly comprised aluminium buffer stock
which had
increased during 2018 to cover the
upgraded coil machine installation in early 2019.
The Group maintains overdraft and trade financing
facilities with its banks to meet short term financing
requirements during the year. An overdraft facility of
£100,000 is in place, however this has not been needed
nor used during the period under review. The trade
financing facility is used for occasional letters of credit
and duty deferment.
At 30 November 2019 the Group had net liquid funds
(trade and other receivables plus cash minus current
liabilities) of £1.2m (2018: £0.8m). Net assets per
ordinary share at 30 November 2019 were £0.99 (2018:
£0.99).
Derivatives and other financial instruments
Operations are financed by a mixture of retained
profits and overdrafts. The Board’s current policy is to
use variable rate overdraft facilities in order to
maintain short term flexibility.
The Group’s financial instruments, other than forward
currency contracts, comprise borrowings, cash and
items, such as trade receivables and payables that arise
directly from its operations. The main purpose of these
instruments is to raise finance for operations if
necessary.
It is, and has been throughout the period under review,
in financial
the Group’s policy that no trading
instruments shall be undertaken.
Currency risk and exposure
The Group enters into derivatives transactions, in the
form of forward currency contracts that are used to
manage the currency risks arising from purchases from
foreign suppliers where the products are sold in local
currencies.
The overseas sales operations during the year were
predominantly in the European Union. The Group has
currency exposures primarily in US dollars and Euros.
Although daily transactional exposures are regularly
covered by forward contracts, the Group has an
underlying exposure, particularly to the Euro. No
forward currency contracts were held at the year end.
Net assets
Net assets at the 2019 year-end were £4,164,000
(2018: £4,099,000). The increase mainly came from
the Group net profit of £181,000 minus £94,000 of
foreign
exchange differences
operations.
from Euro-based
Conclusion
The Group continues to operate a conservative
financial policy, which leaves it well placed to benefit
from future growth opportunities.
Paul Geraghty
Group Finance Director
13 March 2020
STRATEGIC REPORT
The Strategic Report on pages 1-5 was approved by the
Board on 13 March 2020 and signed on its behalf by
Paul Geraghty
Group Finance Director
13 March 2020
Holders Technology plc | Annual Report & Accounts 2019
5
BOARD REPORTS
Company Information
Directors
R W Weinreich, Executive Chairman
V M Blaisdell, BSc, Group Managing Director
P K I Geraghty BSc, FCA, Group Finance Director
D A Mahony, BA (Econ), MSc, Non-Executive Director
Secretary
P K I Geraghty BSc, FCA
Registered office
27-28 Eastcastle Street
London W1W 8DH
Website
www.holdersgroup.com
Registered number
1730535
Auditors
Bankers
Registrars
Saffery Champness LLP
71 Queen Victoria Street
London EC4V 4BE
HSBC
North London Corporate Centre
1 Old Street
London EC1V 9HL
Neville Registrars
Neville House
Steelpark Road
Halesowen
West Midlands B62 8HD
Nominated Adviser and
Broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
Holders Technology plc | Annual Report & Accounts 2019
6
BOARD REPORTS
Report of the Directors
Business review and future developments
A review of the year and likely developments is contained in the Strategic Report.
Results and dividends
The Group made a profit after taxation for the financial year attributable to shareholders of £181,000 (2018: profit
£169,000).
Full details are contained in the Group income statement on page 21. The directors have proposed a final dividend of
0.75p per share payable on 19 May 2020 to shareholders on the register at close of business on 1 May 2020. The total
dividend for the year, including the interim dividend of 0.25p (2018: 0.25p) per share paid on 8 October 2019, amounts
to £42,000 (2018: £32,000), which is equivalent to 1.00p (2018: 0.75p) per share.
Financial risk management
Details of the Group’s financial risk management are contained in note 4 to the financial statements.
Directors
The directors are listed on page 6. All directors served throughout the year except for Thomas Bray who stepped down
from the Board on 8 May 2019. The beneficial shareholdings of the directors at 30 November 2019 are set out in note
23 to the financial statements.
Rudi Weinreich, aged 73, Chairman and Chief Executive, was born in Austria. He has been responsible for all aspects
of the business since he started it in 1972.
Victoria Blaisdell, aged 47, joined the Group in 2004 and is now Group Managing Director. Prior to joining the Group,
she worked in the IT industry for over 12 years and worked in several countries as a Senior Consultant for a large
American telecom consulting company.
Paul Geraghty, aged 59, joined the Group in 2011 as Group Finance Director and Company Secretary. He previously
held senior financial roles in engineering companies, including Elektron Components Limited and Protec plc.
David Mahony, aged 76, is the Senior Non-Executive Director, appointed in 1988.
Substantial shareholdings
At 11 March 2020 the company had been informed of the following interests, in addition to the interests of R W
Weinreich, amounting to 3% or more in the issued ordinary share capital of the company:
Andre Marcou
Armstrong Investments Limited
Rath Dhu Limited
David Barry
Charles Stanley & Co. Limited
Stockinvest Limited
Hugh S Pearson Gregory
Number
%
520,000
275,000
235,000
231,000
210,000
171,500
161,290
12.31%
6.51%
5.56%
5.47%
4.97%
4.06%
3.82%
Holders Technology plc | Annual Report & Accounts 2019
7
BOARD REPORTS
Report of the Directors (continued)
Annual General Meeting
The Annual General Meeting of the Company will be held at the Dyrham Park Country Club, Galley Lane, Barnet EN5
4RA at 11.30 a.m. on 24 April 2020.
Special business at the Annual General Meeting
An ordinary resolution (set out as resolution 5 in the Notice of the Annual General Meeting) will be proposed to give
the directors authority to allot 1,408,055 ordinary shares being approximately 33% of the issued ordinary share capital
of the company as at the date of this report which includes 220,000 ordinary shares being the maximum number of
shares the company may be obliged to issue under its employee share option scheme. The authority, when given, will
expire at the conclusion of next year's annual general meeting. The directors have no present intention of exercising
this authority, other than in relation to the current share option scheme.
A special resolution (set out as resolution 6 in the Notice of Annual General Meeting) will be proposed to empower
the directors to allot securities of the company up to a specified amount in connection with rights issues without
having to obtain prior approval from shareholders on each occasion and also to allot a smaller number of these for
cash without first being required to offer such shares to existing shareholders. The number of ordinary shares which
may be issued for cash under the latter authority will not exceed 211,208 being approximately 5% of the issued
ordinary share capital of the company as at the date of this report. The proposed power will expire at the conclusion
of next year's Annual General Meeting.
A special resolution (set out as resolution 7 in the Notice of Annual General Meeting) will be proposed to authorise
the company to buy on the open market up to 422,416 ordinary shares of 10p each, representing 10% of the issued
ordinary share capital of the company as at the date of this report, excluding treasury shares. The directors, in reaching
any decision to purchase ordinary shares, will take into account the company’s cash resources, capital requirements
and the effect of any purchase on earnings per share.
Going Concern
The company’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Strategic Report on pages 1 to 5. The financial position of the company, its cash flows,
liquidity position and borrowing facilities are described in the Financial Review on page 4. In addition, notes 2, 3, 4,
19 and 24 to the financial statements include the company’s objectives, policies and processes for managing its capital;
its financial risk management objectives; details of its financial instruments and foreign exchange risk mitigation
activities; and its exposures to credit risk and liquidity risk. Budgets and forecasts indicate a satisfactory going concern
position.
The company enjoys a positive cash position, and benefits from a number of customers and suppliers across different
geographic areas and industries. Management have prepared budgets and forecasts covering the period to May 2021.
As a consequence, the directors believe that the company is well placed to manage its business risks successfully
despite the current uncertain economic outlook and therefore conclude it is appropriate to prepare the financial
statements on a going concern basis.
Holders Technology plc | Annual Report & Accounts 2019
8
BOARD REPORTS
Report of the Directors (continued)
Statement of directors' responsibilities
The directors are responsible for preparing the Strategic Report, Report of the Directors and the Financial Statements
in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have elected to prepare the financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs). 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 and profit or loss of the
Company and Group for that period. In preparing these financial statements, the directors are required to:
•
• make judgments and accounting estimates that are reasonable and prudent;
•
state whether applicable IFRSs have been followed, 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
company will continue in business.
select suitable accounting policies and then apply them consistently;
•
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company 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 company and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors confirm that:
•
so far as each of the directors is aware, there is no relevant audit information of which the company’s auditors
are unaware; and
the directors have taken all steps that they ought to have taken as directors in order to make themselves aware
of any relevant audit information and to establish that the auditors are aware of that information.
•
The directors are responsible for the maintenance and integrity of the corporate and financial information included
on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ indemnity arrangements
The company has purchased and maintained throughout the year directors’ and officers’ liability insurance in respect
of its directors. The directors also have the benefit of the indemnity provision contained in the company’s Articles of
Association. These provisions, which are qualifying third party indemnity provisions as defined by the Companies Act,
were in force since 30 April 2007, and are currently in force.
Auditors
On 1 November 2019, Saffery Champness LLP were appointed as auditors of the Group and its UK subsidiary. Saffery
Champness LLP are willing to continue in office as auditors of the company and a resolution to reappoint them will be
proposed at the forthcoming Annual General Meeting.
By order of the board
Paul Geraghty
Secretary
13 March 2020
Holders Technology plc | Annual Report & Accounts 2019
9
BOARD REPORTS
Directors’ Remuneration Report
The directors present the directors’ remuneration report for the financial year ended 30 November 2019. As the
company is listed on AIM, it does not have to comply with the requirements of the remuneration report contained in
the listing rules.
Remuneration policy
The company policy is to design prudent executive remuneration packages to attract, motivate and retain directors of
a high calibre and to reward them for enhancing value to shareholders. The determination of the annual remuneration
packages of the senior executive directors and key members of senior management are undertaken as set out in the
corporate governance report on page 11.
There are three main elements of the remuneration packages of the executive directors:
• Basic annual salary and benefits;
• Share option incentives; and
• Pension arrangements.
The company believes that share option incentives encourage long term commitment to shareholder value and ensure
that rewards for executive directors and senior managers are aligned with the interests of shareholders.
Contributions are made to the pension schemes of certain directors.
Executive directors may accept up to two external non-executive appointments, as long as these are not with
competing companies and are not likely to lead to conflicts of interest. This policy is followed where such
appointments would beneficially broaden experience and knowledge.
Executive directors’ remuneration and terms of appointment
Base salaries are reviewed annually and are set to reflect responsibilities, experience and marketability. Regard is also
given to the level of rewards made in the year to staff. The mechanism for supervising the company share option
scheme and the granting of options under it is set out in the corporate governance report on page 11.
None of the directors have service contracts with a notice period exceeding one year. Each director is entitled to
contributions to personal pension schemes and certain benefits in kind, which include car allowance and private health
insurance.
Non-executive director’s remuneration
The fees paid to the non-executive director are determined by the board. Non-executive directors are normally
appointed for an initial period of three years. Appointments are made subject to retirement by rotation or removal
under the company’s articles of association. The non-executive director does not participate in the company's option
scheme.
Details of the directors’ remuneration, pension entitlements, shareholdings and share options are included in note 23
to the financial statements.
Holders Technology plc | Annual Report & Accounts 2019 10
BOARD REPORTS
Corporate Governance
CORPORATE GOVERNANCE REPORT
The QCA Code sets out 10 principles which it advocates
should be applied. These are listed below together with
a short explanation of how the Group applies each of
the principles. Where the Group does not fully apply a
principle, an explanation as to why has been provided.
Principle One: Business Model and Strategy
For each business unit the Board has adopted a
strategy to promote long-term value for shareholders
as outlined in the Operating and Business Review on
pages 2 to 3.
Principle Two: Understanding Shareholder Needs and
Expectations
is committed
The Board
to maintaining good
communications and constructive dialogue with its
shareholders. Institutional shareholders and analysts
are welcome to discuss issues and provide feedback at
meetings with
In addition, all
the Company.
shareholders are encouraged to attend the Company’s
Annual General Meeting. Investors also have access to
current information on the Company through its
website, www.holdersgroup.com.
Paul Geraghty,
Group Finance Director is available in the first instance
to respond to investor enquiries.
Principle
Responsibilities
Three:
Stakeholder
and
Social
The Board recognises that the long-term success of the
Group is reliant upon the efforts of the employees,
customers and suppliers to the Group. The Board has
put in place a range of processes and systems to ensure
close contact with
is
maintained.
The Board also ensures that key
relationships with customers and suppliers are the
responsibility of one of the directors or the Divisional
Managing Directors.
these key stakeholders
The Board at all times seeks to act in a legally compliant
and socially responsible manner and also seeks to
ensure that senior management act in a similar
fashion.
Principle Four: Risk Management
procedures are in place, and that these are being
effectively implemented so as to identify, evaluate and
manage the risks faced by the Group. The nature of the
risks and degree of exposure are reviewed periodically.
The following principal risks, and controls to mitigate
them, have been identified:
Activity
Risk
Impact
Control(s)
Competition
Loss of
revenue
Reduced
profitability
Customers
and
Suppliers
Loss of major
customer/
supplier
Reduction
in
profitability
Key
Manage-
ment
Recruitment/
retention of
key
management
Reduced
perfor-
mance
Business
Interruption
Loss of
operating
capability.
Potential
loss of
business
Financial
Control
Fraud or
misstatement
of accounts
Financial
loss
Continually
seek cost-
effective
products
Multiple-level
contact.
Reduce
dependence on
any one
customer/
supplier.
Regular review.
Competitive
short term and
long-term
remuneration
and incentives.
Stimulating
environment
with clear
communication.
Business
interruption
insurance. Dual
capacity UK and
Germany.
Ongoing
renewal and
maintenance of
machinery.
Multiple
authorisation
levels and
internal
controls.
Segregation of
duties.
Monthly review
of results and
cash.
The directors are responsible to the Board for ensuring
both that
There are a range of Group policies which cover
matters such as share dealing. The current Board takes
Holders Technology plc | Annual Report & Accounts 2019 11
BOARD REPORTS
Corporate Governance (continued)
the view that an internal audit function is not necessary
or practical due to the size of the Group and the close
day to day control exercised by the executive directors.
However, the Board will continue to monitor the need
for an internal audit function.
Principle Five: A Well-Functioning Board of Directors
The Board comprises:
Executive Chairman
•
Rudi Weinreich
• Group Managing Director Victoria Blaisdell
• Group Finance Director
• Non-executive Director
Paul Geraghty
David Mahony*
Currently the Group Managing Director and Group
Finance Director are full time employees.
The
Executive Chairman and Executive Director are part
time employees, and the non-Executive Director David
Mahony is a part time consultant. Biographical details
of the current directors are set out within Principle Six
below. At each Annual General Meeting, one-third of
the Board members retire by rotation and offer
themselves for re-election.
*David Mahony is deemed by the Board to be
independent even though he has served on the Board
since the company was floated on the Unlisted
Securities Market in 1988. The Board believes that Mr
Mahony’s broad senior level experience enables him to
be classed as independent.
The letters of appointment of all directors are available
for inspection at the Company’s Tweedbank office
during normal business hours.
The Executive and Non-Executive Directors are bound
by contracts which require no more than one year’s
notice. The Non-executive Director receives a fee for
his services as a director which is approved by the
Board, based upon the time commitment and
responsibilities of his roles, of current market rates for
comparable appointments, and within any constraints
imposed by the current financial position of the Group.
The Non-executive Director is also reimbursed for
travelling and other incidental expenses incurred on
Group business.
Directors’ emoluments, including Directors’ interest in
share options over the Group’s share capital, are set
out in Note 23 of the 2019 Annual Report.
The Board meets each month. It has an established
Audit Committee and a Remuneration Committee,
particulars of which appear hereafter. The Board has
resolved that any appointments to the Board are made
by the Board as a whole and therefore a Nominations
Committee has not been created.
Attendance at Board and Committee Meetings
The Board retains full control of the Group with day-to-
day operational control delegated to Executive
Directors. The full Board meets monthly and on other
occasions as it considers necessary. During 2019 there
were twelve Board meetings, one Remuneration
Committee meeting and two Audit Committee
meetings. All meetings were fully attended by their
constituent directors apart from one board meeting
where apologies were received from David Mahony.
Principle Six: Appropriate Skills and Experience of the
Directors
The Board currently consists of four directors. The
Board believes that the Board composition
is
appropriate to provide the necessary skills, balance
and experience for the needs of the company.
Board biographies:
• Rudi Weinreich, Executive Chairman, born in
1946 in Austria, was sole executive director of
the Group until 1987. He has been responsible
for all aspects of the business since the
business commenced in 1972 and continues to
be closely involved with all aspects of the
Group.
• Victoria Blaisdell BSc, born in 1972, joined the
Group in 2004 and is now the Group Managing
Director. She previously worked in the IT
industry and has worked in several countries as
a Senior Consultant for one of the largest
global IT consultancies.
• Paul Geraghty BSc, FCA, born in 1960, joined
the Group in 2011 as Group Finance Director
and Company Secretary. He previously held
senior
engineering
roles
companies, including Elektron Components
Limited and Protec plc.
financial
in
Holders Technology plc | Annual Report & Accounts 2019 12
BOARD REPORTS
Corporate Governance (continued)
Principle Six: Appropriate Skills and Experience of the
Directors (continued)
• David Mahony BA (Economics), MSc, born in
1944, is the Senior Non-executive Director,
appointed in 1988. He is also a Director of
Tower Mint Limited. David spent thirty-five
years with Hambros Bank in Corporate Finance
and as an Industrial Advisor, during which time
he was Chairman or Director of various PLC,
AIM and Private companies.
Principle Seven: Evaluation of Board Performance
In 2020 the Board will strengthen its hitherto informal
monitoring of individual directors’ performance by
instituting a formal system whereby the Chairman and
non-executive director will formally meet to evaluate
and record the performance of the executive directors
whilst the executive directors will perform the same
exercise in regard to the Chairman and any non-
executive directors. This process of board evaluation
will also examine issues relating to succession planning
as necessary.
Principle Eight: Corporate Culture
The Board recognises the importance of appropriate
ethical values and behaviour in relation to the Group’s
activities and encourages suitable behaviour and
principles from employees and suppliers. These
principles are set out in the company’s Ethics Policy
and the Board keeps a watching brief over
its
application.
The Company has adopted, for the Board and Senior
Management, a Share Dealing Code in accordance with
AIM Rule 21.
Principle Nine:
Structures and Processes
Maintenance of Governance
Ultimate authority for all aspects of the Group’s
activities rests with the Board. Rudi Weinreich is
Executive Chairman of the Board, which sets the
overall business strategy. Victoria Blaisdell is Group
Managing Director responsible for the performance of
the Group in line with its agreed business strategy.
The following matters are reserved for the Board:
• Senior appointments and remuneration
• Budget approval
• Acquisitions
• Major capital expenditure
• Major sales quotations and purchase orders
• Foreign exchange policy
• Significant legal, health and safety matters
• Stock exchange
compliance and other
corporate governance issues
Principle Nine:
Structures and Processes (continued)
Maintenance of Governance
Mr Weinreich when required acts in an Executive
capacity, for example by deputising for the German
Managing Director when necessary.
The board
recognises that his role
is therefore not 100%
it believes that, given Mr
independent however
Weinreich’s unique skills and experience, this is a cost-
effective beneficial arrangement for the size of the
company.
In accordance with the Companies Act 2006, the Board
complies with its duties: to act within its powers; to
promote the success of the Company; to exercise
independent judgement; to exercise reasonable care,
skill and diligence; to avoid conflicts of interest; not to
accept benefits from third parties and always to
declare any interest in a proposed transaction or
arrangement.
Audit Committee
For the period under review the Audit Committee
comprised David Mahony. Paul Geraghty as Group
Finance Director is invited to attend Audit Committee
meetings when appropriate. The Audit Committee
meets as required and specifically to review the Interim
Report and Annual Report. There were two meetings
of the Audit Committee during 2019. The Audit
Committee also reviews the findings of the external
auditor and reviews accounting policies and material
accounting judgements.
Holders Technology plc | Annual Report & Accounts 2019 13
BOARD REPORTS
Corporate Governance (continued)
Audit Committee (continued)
The independence and effectiveness of the external
auditor
is reviewed annually. The possibility of
undertaking an audit tender process is considered on a
regular basis. The Audit Committee meets at least once
per year with the auditor to discuss their independence
and objectivity, the Annual Report, any audit issues
arising, internal control processes, appointment and
fee levels and any other appropriate matters. As well
as providing audit related services, the auditor also
provides taxation and other advice. The fees in respect
of audit and tax services are set out in Note 8 of the
Annual Report. Fees for non-audit services paid to the
auditor are not deemed to be of such significance to
them as to impair their independence and therefore
the Audit Committee considers that the objectivity and
independence of the auditor is safeguarded.
Remuneration Committee
For the period under review the Remuneration
Committee comprised David Mahony. The purpose of
the Remuneration Committee is to ensure that the
Executive Directors and other employees are fairly
rewarded for their individual contribution to the
overall performance of the Group. The Committee
considers and recommends
the
remuneration of the Executive Directors and is kept
informed of the remuneration packages of senior staff
and invited to comment on these. There was one
Remuneration Committee meeting during 2019.
the Board
to
recommends
The Board retains responsibility for remuneration
policy. Executive remuneration packages are designed
to attract and retain executives of the necessary skill
and calibre to run the Group. The Remuneration
Committee
the
remuneration packages by reference to individual
performance, general market changes and any
constraints imposed by the then financial position of
the Group. The Remuneration Committee has
responsibility for recommending the adoption of any
long-term incentive schemes.
the Board
to
Principle Nine:
Structures and Processes (continued)
Maintenance of Governance
There are three main elements of the remuneration
packages for Executive Directors and staff:
1. Basic salaries and benefits in kind: Basic salaries are
recommended to the Board by the Remuneration
Committee, considering the performance of the
in
individual and the rates for similar positions
comparable companies. Certain benefits in kind are
available to senior staff and Executive Directors.
2. Share options: The Company operates an approved
share option scheme for Executive Directors and
certain other employees both to motivate those
individuals through equity participation, and to align
the interests of senior employees with those of
shareholders. Exercise of share options under the
schemes is subject to specified exercise periods and
compliance with the AIM Rules. The schemes are
overseen by the Remuneration Committee which
recommends to the Board all grants of share options
specifying the terms under which eligible individuals
may be invited to participate.
3. Bonus Scheme: The Group has a discretionary bonus
scheme for staff and Executive Directors which is
specific to each individual and the role performed by
that individual within the Group. Salaries and benefits
were reviewed in November 2019 to cover the period
to 30 November 2020. Future reviews will be held in
November/ December each year for implementation
from 1 December.
Principle Ten: Shareholder Communication
is committed
to maintaining good
The Board
communication with its shareholders. All shareholders
are encouraged to attend the Company’s Annual
General Meeting. Investors also have access to current
information on the Company though its website,
www.holderstechnology.com, and via Paul Geraghty,
Group Finance Director, who is available to answer
investor queries.
Holders Technology plc | Annual Report & Accounts 2019 14
AUDITOR’S REPORT
Independent auditor’s report to the members of Holders Technology plc
Opinion
We have audited the financial statements of Holders Technology PLC (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 30 November 2019 which comprise the Group Income Statement, the Group Statement of
Comprehensive Income, the Group and Company Balance Sheet, the Group and Company Statements of Changes in
Equity, the Group and Company Statement of Cash Flows and notes to the financial statements, including a summary
of significant accounting policies. The financial reporting framework that has been applied in the preparation of the
Group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the
European Union. The financial reporting framework that has been applied in the preparation of the Company financial
statements is applicable law and United Kingdom Accounting Standards including Financial Reporting Standard 101
‘Reduced Disclosure Framework’ (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of affairs of the group and of the parent company
as at 30 November 2019 and of the group’s profit for the period then ended;
the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the Company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the financial statements 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’s responsibilities for the audit of the
financial statements section of our report. We are independent of the group and the parent company 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 SME listed entities, and we have fulfilled our other ethical responsibilities in accordance
with these 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report
to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is
not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern
basis of accounting for a period of at least twelve months from the date when the financial statements are
authorised for issue.
Holders Technology plc | Annual Report & Accounts 2019 15
AUDITOR’S REPORT
Independent auditor’s report (continued)
Key audit matters
Key audit matters are those matters that, in our professional judgment, 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 that 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.
Key Audit Matter
How our audit addressed the key audit matter
Valuation and provisioning of stock
Both the UK and German trading subsidiaries hold
significant reserves of stock in order that they can
satisfy customer orders promptly.
At 30 November 2019 the Group held stock with a
carrying value of £2.53m.
Stock valuation and provisioning was considered to
be a key audit matter because of the materiality of
the balance, and it was an area assessed as one of
the most significant areas to present a risk of
material misstatement.
Our audit procedures included the following:
• Testing a sample of stock to ensure it is being held at the
lower of cost and net realisable value
• Attending the year end stock count to assess the systems
for recording stocks in order to gain comfort over the stock
quantities reported in the accounts
• Reviewed management’s stock provision and assessed the
underlying assumptions for reasonableness. We have also
challenged managements assumptions to ensure these are
in line with write off’s experienced post year end
• Review the aging of stock lines for post year-end sales to
ensure there are no issues from a provisioning perspective
• Reviewing a sample of purchases and sales made around
the year end to ensure cut off has been correctly applied
Based on our procedures, we noted no material exceptions
and considered management’s key assumptions to be within
reasonable ranges. We consider that stock valuation and
provisioning is reasonable.
Holders Technology plc | Annual Report & Accounts 2019 16
AUDITOR’S REPORT
Independent auditor’s report (continued)
Key audit matters (continued)
Key Audit Matter
How our audit addressed the key audit matter
Valuation of investments in subsidiaries
The parent company holds investments in its
subsidiary companies.
At 30 November 2019 the carrying value of
investments in subsidiaries was £2.291m.
The valuation of investments in subsidiaries was
considered to be a key audit matter because of the
materiality of the balance on the parent company’s
balance sheet, and it was an area assessed as one
of the most significant areas to present a risk of
material misstatement.
Our audit procedures included the following:
• Assessed whether the company’s accounting policy for
impairment of investments is in accordance with IAS 36
• Reviewed and challenged management’s discounted cash
flow forecasts for each of the subsidiary entities and
assessed the underlying assumptions for reasonableness
using sensitivity analysis
• Assessed historical forecasting by comparing this against
actual results to test the accuracy of management’s
forecasting
Compared and challenged management’s valuation of
investments through the discounted cash flow prepared to
determine their value with the amounts that they are held
at on the balance sheet and considered the potential need
for impairment
Based on our procedures, we noted no material exceptions
and considered management’s key assumptions to be within
reasonable ranges. We consider that the valuation of
investments in subsidiaries is reasonable.
Our application of materiality
We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified
misstatements and in forming our audit opinion. Our overall objective as auditor is to obtain reasonable assurance
that the financial statements as a whole are free from material misstatement, whether due to fraud or error. We
consider a misstatement to be material where it could reasonably be expected to influence the economic decisions of
the users of the financial statements.
We have determined a materiality of £122,000 for both the Group and the Company financial statements. This is
based on 1% of revenue per draft financials at the planning stage.
Holders Technology plc | Annual Report & Accounts 2019 17
AUDITOR’S REPORT
Independent auditor’s report (continued)
An overview of the scope of our audit
We tailored the scope of our audit to ensure that we obtained sufficient evidence to support our opinion on the
financial statements as a whole, taking into account the structure of the Group and the company, the accounting
processes and controls and the industry in which the Group operates.
As Group auditors we carried out the audit of the Company financial statements and, in accordance with ISA (UK) 600,
obtained sufficient evidence regarding the audit of the Group’s material German subsidiary, Holders Technology
GmbH. We also performed a full scope audit of the Group’s UK subsidiary, Holders Technology UK Limited. These
subsidiaries were deemed to be significant to the Group financial statements due to their size. The Group audit team
directed, supervised and reviewed the work of the component auditors in Germany, which involved issuing detailed
instructions and holding discussions with component audit teams, performing detailed file reviews and visiting
Germany to review the work performed. Audit work in Germany was performed at materiality levels of £89,000, lower
than Group materiality.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
financial statements. In particular we looked at where the Directors made subjective judgements, for example in
respect of significant accounting estimates that involved making assumption and considering future events that are
inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating
whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
Other information
The directors are responsible for the other information. The other information comprises the information included in
the annual report other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. 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.
Holders Technology plc | Annual Report & Accounts 2019 18
AUDITOR’S REPORT
Independent auditor’s report (continued)
Matters on which we are required to report under the Companies Act 2006
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.
Matters on which we are required to report by exception
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.
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 set out on page 9, 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 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 the parent company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s 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 the 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 audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Holders Technology plc | Annual Report & Accounts 2019 19
AUDITOR’S REPORT
Independent auditor’s report (continued)
Use of our report
This report is made solely to the 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 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 company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Jamie Cassell
(Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
Statutory Auditor, Chartered Accountants
71 Queen Victoria Street
London
EC4V 4BE
13 March 2020
Holders Technology plc | Annual Report & Accounts 2019 20
FINANCIAL STATEMENTS
Group Income Statement for the year ended 30 November 2019
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other operating income
Operating profit
Finance income/ (expenses)
Profit before taxation
Tax credit/ (expense)
Profit for the year attributable to equity shareholders
Note
5
7
6
8
2019
£’000
12,162
(8,770)
3,392
(419)
(2,890)
61
144
6
150
31
181
2018
£’000
12,486
(9,220)
3,266
(422)
(2,696)
36
184
(7)
177
(8)
169
Basic earnings per share
Diluted earnings per share
11
11
4.31p
4.30p
4.06p
4.03p
Group statement of comprehensive income for the year ended 30 November 2019
Profit for the year
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
Total comprehensive income for the year
2019
£’000
181
(94)
87
2018
£’000
169
15
184
Holders Technology plc | Annual Report & Accounts 2019 21
FINANCIAL STATEMENTS
Statements of Changes in Equity for the year ended 30 November 2019
Group
Balance at 30 November 2017
Dividends
Share based payments
Transactions with owners
Profit for the year
Exchange differences on translating
foreign operations
Total comprehensive income for the
year
Balance at 30 November 2018
Dividends
Shares issued
Share based payments
Transactions with owners
Profit for the year
Exchange differences on translating
foreign operations
Total comprehensive income for the
year
Balance at 30 November 2019
Share
capital
Share
premium
account
Capital
redemption
reserve
Translation
reserve
Retained
earnings
Total
equity
£'000
416
£'000
1,590
£'000
1
£'000
207
£'000
1,718
£'000
3,932
-
-
-
-
-
-
-
-
-
-
-
416
-
1,590
-
6
-
6
-
-
-
-
-
-
-
-
-
422
-
1,590
-
-
-
-
-
-
1
-
-
-
-
-
-
-
1
-
-
-
-
15
15
222
-
-
-
-
-
(94)
(94)
128
(21)
4
(17)
169
(21)
4
(17)
169
-
15
169
1,870
184
4,099
(32)
-
4
(28)
181
(32)
6
4
(22)
181
-
(94)
181
2,023
87
4,164
Company
Balance at 30 November 2017
Dividends
Share based payments
Transactions with owners
Loss and total comprehensive
income for the year
Balance at 30 November 2018
Dividends
Shares issued
Share based payments
Transactions with owners
Loss and total comprehensive
income for the year
Balance at 30 November 2019
Share
capital
£'000
416
Share
premium
account
£'000
1,590
Capital
redemption
reserve
£'000
1
-
-
-
-
416
-
6
-
6
-
422
-
-
-
-
1,590
-
-
-
-
-
1,590
-
-
-
-
1
-
-
-
-
-
1
Retained
earnings
£'000
529
(21)
4
(17)
(92)
420
(32)
-
4
(28)
(131)
261
Total
equity
£'000
2,536
(21)
4
(17)
(92)
2,427
(32)
6
4
(22)
(131)
2,274
Holders Technology plc | Annual Report & Accounts 2019 22
FINANCIAL STATEMENTS
Balance Sheets at 30 November 2019
Company number: 1730535
Assets
Non-current assets
Intangible fixed assets
Property, plant and equipment
Investments in subsidiaries
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Net current assets
Non-current liabilities
Retirement benefit liability
Deferred tax liabilities
Shareholders’ equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Cumulative translation adjustment reserve
Note
Group
2019
£’000
2018
£’000
13
14
15
21
16
17
18
20
21
22
22
22
394
237
-
12
643
2,530
1,758
-
734
5,022
(1,280)
-
(1,280)
3,742
(212)
(9)
(221)
4,164
422
1,590
1
2,023
128
4,164
416
259
-
10
685
2,849
1,791
-
403
5,043
(1,373)
(43)
(1,416)
3,627
(204)
(9)
(213)
4,099
416
1,590
1
1,870
222
4,099
Company
2019
£’000
-
-
2,291
-
2,291
-
166
-
167
333
(350)
-
(350)
(17)
-
-
-
2,274
422
1,590
1
261
-
2,274
2018
£’000
-
2
2,291
-
2,293
-
628
-
11
639
(505)
-
(505)
134
-
-
-
2,427
416
1,590
1
420
-
2,427
Parent Company Income Statement
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not
presented as part of these financial statements. The parent company’s loss for the financial year was £131,000
(2018: loss £92,000).
The financial statements were approved by the Board on 13 March 2020 and signed on its behalf by:
R W Weinreich
Director
Holders Technology plc | Annual Report & Accounts 2019 23
FINANCIAL STATEMENTS
Statements of Cash Flows for the year ended 30 November 2019
Cash flows from operating activities
Profit/ (loss) before tax from continuing
operations
Share-based payment charge
Depreciation
Decrease/ (Increase) in inventories
(Increase)/ Decrease in trade and other
receivables
Increase/ (Decrease) in trade and other payables
Interest (income)/ expense
Cash generated from/ (used in) operations
Interest paid
Corporation tax paid
Net cash generated from/ (used in) operations
Cash flows from investing activities
Purchase of property, plant, and equipment
Proceeds from sale of property, plant, and equipment
Interest received
Net cash (used in)/generated from investing activities
Cash flows from financing activities
Sale of shares
Equity dividends paid
Net cash used in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at start of period
Effect of foreign exchange rates
Cash and cash equivalents at end of period
Group
2019
£’000
2018
£’000
Company
2019
£’000
2018
£’000
150
4
74
237
(140)
92
(6)
411
(8)
-
403
(42)
1
-
(41)
6
(32)
(26)
336
403
(5)
734
177
4
71
(427)
(407)
571
8
(3)
(8)
(88)
(99)
(58)
-
-
(58)
-
(21)
(21)
(178)
579
2
403
(131)
4
2
-
328
(22)
(15)
166
-
-
166
-
-
15
15
6
(32)
(26)
155
11
1
167
(92)
4
-
-
(17)
133
(18)
10
-
-
10
-
-
18
18
-
(21)
(21)
7
4
-
11
Holders Technology plc | Annual Report & Accounts 2019 24
FINANCIAL STATEMENTS
Notes to the Financial Statements
1. General information
Holders Technology plc, a public company limited by shares, is incorporated in the United Kingdom under the
Companies Act.
These consolidated financial statements are presented in pounds sterling and all information has been rounded
to the nearest thousand pounds. Foreign operations are consolidated in accordance with the policies set out in
note 2 below.
2. Accounting policies
Basis of preparation
The Group and parent company financial statements have been prepared in accordance with EU endorsed
International Financial Reporting Standards (IFRS), International Financial Reporting Interpretations Committee
(IFRIC) interpretations and with those parts of the Companies Act applicable to companies reporting under IFRS.
All accounting standards and interpretations issued and adopted by the EU by the International Accounting
Standards Board and the International Financial Reporting Interpretations Committee effective at the time of
preparing these financial statements have been applied.
The Group and parent company financial statements have been prepared under the historical cost convention
with the exception of forward currency contracts which are carried at fair value. A summary of the significant
Group accounting policies adopted in the preparation of the financial statements is set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
Change in accounting policies
The Group has not adopted any new standards or amendments that have a significant impact on the Group’s
results or financial position. IFRS 9 Financial Instruments and IFRS 15 have been adopted for the first time in
2019 however their impact on the results and financial position has not been material.
Going concern
The company’s business activities, together with the factors likely to affect its future development, performance
and position are set out in the Strategic Report on pages 1 to 5. The financial position of the company, its cash
flows, liquidity position and borrowing facilities are described in the Financial Review on page 4. In addition, notes
2, 3, 4, 19 and 24 to the financial statements include the company’s objectives, policies and processes for
managing its capital; its financial risk management objectives; details of its financial instruments and foreign
exchange risk mitigation activities; and its exposures to credit risk and liquidity risk.
The company has numerous financial resources, as shown in the financial statements, together with a number of
customers and suppliers across different geographic areas and industries. The Board pursues a cautious strategy,
combined with effective cost control in order to maintain a strong working capital position. Budgets and forecasts
indicate a satisfactory going concern position. As a consequence, the directors believe that the company is well
placed to manage its business risks successfully despite the current uncertain economic outlook and therefore
conclude it is appropriate to prepare the financial statements on a going concern basis.
Holders Technology plc | Annual Report & Accounts 2019 25
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
Standards and Interpretations to Standards not yet effective
The following Standards and Interpretations have been issued, but are not yet effective and have not been early
adopted by the Group:
•
•
•
•
•
•
•
IFRS 16 Leases (Effective 1 January 2019)
IFRIC 23 Uncertainty over Income tax treatments (Effective 1 January 2019)
IFRS 9 Amendments Prepayment features with negative compensation (Effective 1 January 2019)
Amendments to references to conceptual framework in IFRS standards (Effective 1 January 2020)
Definition of material reform (Effective date 1 January 2020)
Amendments to IFRS9, IAS 39 and IFRS 7 Interest rate benchmark reform (Effective 1 January 2020)
Amendments to IAS 1 Classification of liabilities as current or non-current
The directors anticipate that, with the exception of IFRS 16 mentioned below, the adoption of these standards
and interpretations in future periods will have no material impact on the financial statements of the Group except
for additional disclosures when the relevant standard comes into effect. The group’s revenues normally comprise
items where parties, products, prices and ownership transfers are very unambiguous.
The Group has a number of property and other leases that are currently accounted for as operating leases with
no balance sheet impact. The introduction of IFRS 16 will require these leases to be accounted for as finance
leases showing as assets and corresponding financial liabilities. The Group is still quantifying the impact that this
will have on the financial statements. There is not expected to be a significant profit impact although there will
be classification changes which, on the Group Income statement, will reduce administration expenses and
increase depreciation and finance expenses. On the Group Balance sheet, non-current assets will increase
representing the value-in-use of the leases, and with corresponding current and non-current liabilities
representing the outstanding lease payments due.
Use of estimates
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates. Critical judgements and key estimates and assumptions
are disclosed in note 3.
Principles of consolidation
The consolidated financial statements incorporate the financial statements of the company and all its subsidiaries.
Intra-Group transactions, including sales, profits, receivables and payables, have been eliminated in the Group
consolidation.
Subsidiaries
Subsidiaries are entities controlled by the company. Control is achieved where the Group is exposed or has rights
to variable returns from its involvement with the investee and has the ability to affect those returns through the
power over the investee. The financial statements of subsidiaries are included from the date that control
commences until the date that control ceases. In the parent company accounts investments and long-term loans
to subsidiaries are initially recorded at cost. The investment value is subsequently recorded at cost less any
impairment value.
Holders Technology plc | Annual Report & Accounts 2019 26
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
Goodwill and business combinations
The results of subsidiaries acquired in the period are included in the income statement from the date they are
acquired. On acquisition, all of the subsidiaries’ assets and liabilities that exist at the date of acquisition are
recorded at their fair values reflecting their condition at that date. For business combinations occurring since 1
December 2009, the requirements of IFRS 3R have been applied. The consideration transferred by the Group to
obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred,
liabilities incurred, and the equity interests issued by the Group, which includes the fair value of any asset or
liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. The
Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of
whether they have been previously recognised in the acquiree's financial statements prior to the acquisition.
Assets acquired and liabilities assumed are measured at their acquisition-date fair values.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the
sum of a) fair value of consideration transferred, b) the recognised amount of any non-controlling interest in the
acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-
date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated
above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately. As
permitted by IFRS 1, goodwill arising on acquisitions before 1 December 2005 (date of transition to IFRS) has been
frozen at the UK GAAP amounts subject to being tested for impairment at that date.
Impairment charges
The company considers at each reporting date whether there is any indication that assets are impaired. If there
is such an indication, the company carries out an impairment test by measuring an asset’s recoverable amount,
which is the higher of its fair value less costs to sell and its value in use. Goodwill, which is allocated to individual
cash generating units, is reviewed annually for impairment. Value in use represents the present value of the
future cash flows expected to be derived from the cash generating unit. The present value is discounted using a
pre-tax rate that reflects current market assessments of the time value of money and of the risks specific to the
cash generating unit for which future cash flow estimates have not been adjusted. If the recoverable amount is
less than the carrying amount an impairment loss is recognised, and the asset is written down to its recoverable
amount.
Revenue recognition
The adoption of IFRS 15 commenced on 1 January 2018. The application of IFRS 15 requires that a 5-step,
principles-based model should be applied to all contracts with customers. IFRS 15 has not had a significant
impact on the financial position or performance of the company. Revenue arises principally from the sale of
specialised materials and finished goods. There is also an insignificant amount of commissioning revenue.
• Sale of specialised materials and finished goods are for a fixed price which is recognised when the Group
transfers control of the assets to the customer. Invoices for goods fall due for settlement upon dispatch to
the customer, the customer has full discretion over the use of the components and there is no unfulfilled
obligation that could affect the customer’s acceptance of the products. Transfer of control does not occur
until the risks of obsolescence and loss have been transferred, and either the products have been accepted
in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective
evidence that all criteria for acceptance have been satisfied.
• Sales of commissioning services are recognised depending on the substance and legal form of the contracts
with its customers. Revenue is recognised once a legally binding contract between the Group and its
customers has been established and the delivery of the service including support and maintenance has
commenced. Revenues are recognised as each element of commissioning service is invoiced in line with the
contract, with associated costs for labour and subsistence accrued for as necessary.
Holders Technology plc | Annual Report & Accounts 2019 27
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
Financial instruments
The Group has adopted IFRS 9 which became effective on 1 January 2018. Financial assets and financial liabilities
are recognised in the Group’s Balance Sheet when the Group becomes a party to the contractual provisions of
the instrument. Examples of the Group’s financial instruments include:
• Cash and cash equivalents
• Trade and other receivables
• Trade and other payables
• Derivative financial instruments
• Equity instruments
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. The company considers all highly liquid
investments with original maturity dates of three months or less to be cash equivalents. Bank overdrafts that are
repayable on demand and form an integral part of the Group’s cash management system are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
Trade and other receivables
The Group’s trade receivables do not carry a significant financing element as defined by IFRS 15. Therefore, trade
receivables are recorded initially and throughout the life of the receivable, at fair value less an amount equal to
lifetime expected credit losses (“ECL”).
Trade and other payables
Trade and other payables are not interest bearing and are initially stated at fair value and subsequently measured
at amortised cost using the effective interest rate.
Derivative financial instruments
The Group uses derivative financial instruments to mitigate its exposure to foreign exchange risks arising from
operational, financing and investment activities. In accordance with its treasury policy, the Group does not hold
or issue derivative financial instruments for trading purposes.
Derivative financial instruments are recognised initially at cost. Subsequent to initial recognition, derivative
financial instruments are stated at fair value. The gain or loss on re-measurement to fair value is recognised
immediately in the income statement.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting
all its liabilities. Equity instruments issued by the company are recorded at the proceeds received, net of directly
attributable issue costs.
Holders Technology plc | Annual Report & Accounts 2019 28
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
Property, plant, and equipment
The cost of items of property, plant and equipment is its purchase cost, together with any incidental costs of
acquisition.
Depreciation is calculated to write off assets over their expected useful lives. Where there is evidence of
impairment, property, plant and equipment is written down to the recoverable amount. Depreciation is calculated
at the following rates:
Leasehold building improvements
Motor vehicles
Plant and machinery
Office equipment
Over the period of the lease
20% on either cost or written down value
20% - 33% on either cost or written down value
25% on cost
Methods of depreciation, recoverable amounts and useful lives are reviewed and adjusted, if appropriate, at each
balance sheet date. Provision is made against the carrying value of items of property, plant and equipment where
impairment in value is deemed to have occurred.
Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is determined on a first-in-first-out basis.
Net realisable value is based on the estimated sales price after allowing for all further costs of completion and
disposal. Where necessary, provision is made for obsolete, slow-moving and defective inventory.
Leased assets
Leases are classified as operating leases when a significant portion of the risks and rewards of ownership are
retained by the lessor. Rentals payable under operating leases are charged to the income statement on a straight-
line basis over the periods of the leases.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of each transaction.
Foreign currency monetary assets and liabilities are retranslated using the exchange rates at the balance sheet
date. Gains and losses arising from changes in exchange rates after the date of the transaction are recognised in
the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a
foreign currency are translated at the exchange rate at the date of the original transaction.
In the consolidated financial statements, the net assets of the Group’s foreign operations are translated at the
rate of exchange at the balance sheet date. Income and expense items are translated at the average rates for the
period where these rates approximate to actual rates. Otherwise actual rates are used. The resulting exchange
differences are charged/ credited to other comprehensive income and recognised in the currency translation
reserve in equity. Such translation differences are recognised in the income statement on the disposal of the
foreign operation. All other currency differences are taken to the income statement. Profit and losses on holding
foreign currency balances are treated as a finance cost.
Holders Technology plc | Annual Report & Accounts 2019 29
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
Taxes
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered)
using the tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured using the tax rates that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the asset is realised, or the liability settled. Deferred tax is not
discounted.
Provision is not made for deferred tax on the unremitted earnings of foreign subsidiaries where such remittances
are not considered probable as the Group’s policy is to reinvest profits to fund growth locally. Provision is made
where it is likely that dividends will be remitted within the foreseeable future.
A deferred tax asset is recognised only when it is probable that suitable taxable profits will be available in the
foreseeable future from which the reversal of the temporary differences can be deducted.
Employee share option scheme
The fair value of employee share plans is calculated using an appropriate actuarial model. In accordance with IFRS
2 the resulting cost is charged to the income statement over the vesting period of the plans, with a corresponding
credit to retained earnings. The value of the charge is adjusted to reflect the expected and the actual levels of
options vesting.
The proceeds received, net of any directly attributable transaction costs, are credited to share capital and share
premium when the options are exercised.
Pension contributions
The Group does not operate a pension scheme. Pension costs relate to Group contributions to the personal
pension schemes of certain directors and employees. The contributions are recognised as an employee benefit
expense when they are due. There is also a retirement benefit liability arising from an asset purchase of Cimatec
GmbH as disclosed in note 20. The liability in respect of defined benefit pension plans is the present value of the
defined benefit obligation at the end of the accounting period less the fair value of plan assets, together with
adjustments for past-service costs. Independent actuaries annually calculate the defined benefit obligation.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged
or credited to equity in other comprehensive income in the period in which they arise.
Dividends payable
Distributions to equity holders are disclosed as a component of the movement in shareholders’ equity. A liability
is recorded for a final dividend when the dividend is approved by the company’s shareholders, and, for an interim
dividend, when the dividend is paid.
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.
Holders Technology plc | Annual Report & Accounts 2019 30
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
Treasury shares
When the company purchases its own equity share capital (treasury shares), the consideration paid, including any
directly attributable incremental costs (net of tax), is deducted from equity attributable to the company’s equity
holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or
reissued, any consideration received, net of any directly attributable incremental transaction costs and the related
tax effects, is included in equity attributable to the company’s equity holders.
Profit or loss from discontinued operations
A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for
sale, and:
•
•
represents a separate major line of business or geographical area of operations or
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations or
is a subsidiary acquired exclusively with a view to re-sale.
•
3. Critical accounting judgements and key sources of estimation uncertainty
Critical judgement in applying the Group’s accounting policies
Stock Provision
Provisions are made for slow moving, excess and obsolete stock. Each stock line across the Group is reviewed, and
consideration is given to current inventory, historic sales, purchasing history, sales orders on hand, potential
obsolescence and market factors. The review takes place quarterly, and changes in provisions are reviewed to
highlight opportunities for improved accuracy.
Estimation uncertainty
Impairment testing
Impairment testing of goodwill and investment in subsidiaries involves comparing the carrying value of an asset
with its value in use, based upon a discounted cash flow model. This model involves making assumptions involving
future revenues and profits as well as long-term growth rates and the appropriate discount rate. Further details
are set out in note 13. Management is not aware of any probable scenarios that would require changes in its key
estimates, and lead to impairment. The key assumption impacting the value in use is the revenue forecast.
4. Financial risk management
Treasury management
Group treasury policies are reviewed and approved by the board. The objectives of Group treasury policies are to
ensure that adequate financial resources are available for development of the business while at the same time
managing financial risks. Derivative financial instruments are used to reduce financial risk exposures arising from
the Group’s business activities and not for speculative purposes.
The Group Finance Director manages the Group’s treasury activities, and reports to the board thereon. The
Group’s business activities expose it to a variety of financial risks that include:
Liquidity risk;
•
• Credit risk;
• Cash flow interest rate risk; and
• Currency risk.
Holders Technology plc | Annual Report & Accounts 2019 31
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
4. Financial risk management (continued)
The policies for managing these risks are described below:
Liquidity risk
The Group finances its operations through a combination of bank borrowings, leases and cash generated from
operations. The Group’s treasury policy aims to ensure that there are sufficient funds available to meet the
projected cash flow requirements in the business plan.
The Group’s principal source of funding is cash generated from operations. Liquidity is maintained through
committed bank credit facilities (note 19).
Credit risk
Credit risk on trade receivables is managed by monitoring the amount and duration of exposures to individual
customers depending on their credit rating. Where possible, trade receivables are insured. The amounts of trade
receivables presented in the balance sheet are net of allowances for doubtful accounts based on expected credit
losses as required by IFRS 9.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are high
credit quality financial institutions.
The Group has no significant concentration of credit risk, with exposure spread over a large number of customers
and counterparties.
Currency risk
The Group is exposed to currency risk through movements in exchange rates on its purchases and sales that are
not denominated in the local functional currencies. The Group uses forward foreign exchange contracts to
mitigate the currency risk associated with these transactions, where material exposure exists. The contracts are
denominated primarily in US dollars, Japanese Yen and Euros. Such contracts are accounted for in accordance
with the policies set out in note 2. At the year-end forward purchase contracts totalling JPY12.6m were held as
described in note 19.
Cash flow interest rate risk
The Group is exposed to cash flow interest rate risk on bank borrowings, which are arranged at floating rates. The
board monitors the overall level of bank debt and interest costs to limit any adverse effects on the financial
performance of the Group. The Group does not use interest rate swaps to reduce its exposure to interest rate
fluctuations at the present time.
Fair value estimation
The fair values of cash and cash equivalents, receivables, payables and borrowings with a maturity of less than
one year approximate their book values.
Holders Technology plc | Annual Report & Accounts 2019 32
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
5. Segment reporting
The group has four operating divisions: PCB UK, PCB Germany, LCS UK and LCS Germany. Both PCB divisions have
very similar products, processes, customers, distribution means and margins. Strategic and operational decisions
are normally made on the basis that together they comprise one “PCB” reportable segment. The same is true of
the “LCS” divisions, which share many common characteristics. The two reported segments are therefore:
• PCB, comprising PCB UK and PCB Germany, distributes materials, equipment and supplies to the PCB industry
• LCS, which distributes Lighting and Controls-related components, lighting products and lighting solutions. This
comprises LCS UK and LCS Germany. These divisions were previously named “LED”.
PCB
LCS
Other
Total
Revenue
Cost of sales
2019
£’000
8,647
(6,546)
(1,588)
2,101
(336)
Gross profit
Distribution costs
Administrative
expenses
Other operating
income/ (expenses)
Segment operating
profit/ (loss)
Other segmental information
Depreciation
(Note 14)
Segment assets
Segment liabilities
53
230
62
6,810
(1,553)
2018
£’000
9,374
(7,168)
2,206
(331)
2019
£’000
3,515
(2,224)
1,291
(83)
2018
£’000
3,112
(2,052)
1,060
(91)
2019
£’000
2018
£’000
-
-
-
-
-
-
-
-
2019
£’000
12,162
(8,770)
3,392
(419)
2018
£’000
12,486
(9,220)
3,266
(422)
(1,625)
(1,149)
(985)
(153)
(86)
(2,890)
(2,696)
30
280
73
10
69
11
3
(2)
3
61
(13)
(155)
(83)
144
2
2
1
75
36
184
76
7,282
(2,136)
1,743
(3,117)
1,807
(3,306)
(2,888)
3,169
(3,361)
3,813
5,665
(1,501)
5,728
(1,629)
“Other” amounts relate to central Group activities, which are not identifiable to the operating segments.
Analysis of external revenue by geographic region
UK
EU
Rest of World
Total
2019
£’000
2018
£’000
2019
£’000
Revenue - PCB
- LCS
Non-current assets
1,377
1,789
3,166
440
1,341
1,628
2,969
489
5,598
1,625
7,223
191
2018
£’000
6,582
1,369
7,951
184
2019
£’000
2018
£’000
2019
£’000
2018
£’000
1,672
101
1,773
12
1,451
115
1,566
12
8,647
3,515
12,162
643
9,374
3,112
12,486
685
UK revenues originate from UK which is where the UK segments are domiciled. EU and Rest of World revenues
originate from Germany which is where the operating segments are domiciled. Over 90% of Rest of World
revenues are from European countries outside the EU. No customer contributed more than 10% of external
revenue.
Holders Technology plc | Annual Report & Accounts 2019 33
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
6. Finance income and expenses
Interest income/ (expense) on tax liability
Interest expense on and pension liability
7. Profit for the year
The following items have been included in arriving at the profit for the year:
Costs of inventories recognised as an expense
Write-down of inventory to net realisable value
Depreciation of property, plant and equipment (note 14)
Staff costs
Fees payable to the company’s auditors for the audit of the
financial statements
Fees payable to the company’s auditors for other services:
- Audit of the financial statements of the company’s subsidiaries
pursuant to legislation
Operating leases - land and buildings
Foreign exchange gain
8. Taxation
Analysis of the charge in the period
Current tax
- Current period
- Credit adjustment in respect of prior years
Deferred tax charge/ (credit) (note 21)
Total tax
2019
£’000
14
(8)
2019
£’000
8,809
121
75
2,329
24
40
185
(34)
2019
£’000
-
(29)
(29)
(2)
(31)
2018
£’000
(1)
(6)
2018
£’000
8,950
76
76
2,315
24
27
148
(30)
2018
£’000
-
-
-
8
8
Tax reconciliation
The tax for the period is lower (2018: lower) than the standard rate of corporation tax in the UK, effectively 19.0%
(2018: 19.0%) for the company’s financial year. The differences are explained below:
Profit before taxation
Profit/ (loss) before taxation multiplied by the rate of corporation
tax in the UK of 19.0% (2018: 19.0%)
Effects of:
Accelerated capital allowances
Adjustment from prior years
Taxation losses
Taxation
2019
£’000
150
29
-
(29)
(31)
(31)
2018
£’000
177
34
2
-
(28)
8
Holders Technology plc | Annual Report & Accounts 2019 34
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
9. Profit of the parent company for the financial year
The result for the financial year dealt with in the accounts of the parent company was a loss of £131,000 (2018
loss: £92,000).
As permitted by Section 408 of the Companies Act 2006, no separate income statement is presented in respect
of the parent company.
11. Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the period. The weighted average number of
treasury shares is deducted from the number of shares issued in arriving at the weighted average number of
shares outstanding during the period.
For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume
conversion of all potentially dilutive ordinary shares. Potentially dilutive ordinary shares are those share options
granted to employees where the exercise price is less than the average market price of the company’s ordinary
shares during the period, and where exercise would decrease earnings per share or increase loss per share from
continuing operations.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out
below:
Weighted average number of ordinary shares
Dilutive effect of share options
Fully diluted weighted average number of ordinary shares
2019
Number
4,199,735
7,464
4,207,199
2018
Number
4,159,551
31,043
4,190,594
2019
Pence per share
2018
Pence per share
Basic earnings per share:
Continuing operations
Diluted earnings per share:
Continuing operations
12. Ordinary dividends
Final dividend for the year ended 30 November 2018 of 0.50p (year ended
30 November 2017 final dividend: 0.25p)
Interim dividend paid in respect of the year of 0.25p (2018: 0.25p)
Amounts recognised as distributions to equity holders
4.31
4.30
2019
£’000
21
11
32
4.06
4.03
2018
£’000
10
11
21
The directors propose a final dividend in respect of the year ended 30 November 2019 of 0.75p per share. If
approved by shareholders, it will be paid on 19 May 2020 to shareholders registered on 1 May 2020.
Holders Technology plc | Annual Report & Accounts 2019 35
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
13. Intangible fixed assets
Group
Cost
At 1 December 2017
Currency translation
Additions
Disposals
At 30 November 2018
Currency translation
At 30 November 2019
Depreciation
At 1 December 2017
Provided in year
Disposals
At 30 November 2018
Currency translation
Provided in year
At 30 November 2019
Net book value
At 30 November 2019
At 30 November 2018
Goodwill
£’000
Computer
software
£’000
Total
£’000
424
-
-
-
424
(4)
420
106
-
-
106
(4)
-
102
318
318
242
3
10
(59)
196
(8)
188
131
19
(52)
98
(4)
18
112
76
98
666
3
10
(59)
620
(12)
608
237
19
(52)
204
(8)
18
214
394
416
Analysis by cash generating unit
£’000
£’000
£’000
PCB
Lighting and Controls
146
172
318
76
-
76
146
172
318
As permitted by IFRS 1, goodwill arising on acquisitions before 1 December 2005 (date of transition to IFRS) has
been frozen at the UK GAAP amounts subject to being tested for impairment at that date, the results of which
assessment indicated no such impairment.
Under UK GAAP, goodwill of £239,000 arising on acquisitions prior to 1 July 1998 was eliminated directly against
reserves. The gain or loss on the disposal of a previously acquired business reflects the attributable amount of
purchased goodwill in respect of that business. As the Group has opted not to restate business combinations prior
to the date of transition, the goodwill written off to reserves under UK GAAP has been frozen and remains in
reserves. Goodwill previously written off to reserves is not written back to the income statement on subsequent
disposal.
Holders Technology plc | Annual Report & Accounts 2019 36
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
13. Goodwill (continued)
The recoverable amount of a cash-generating unit is based on its value-in-use. Value-in-use is the present value
of the projected cash flows of the cash-generating unit (CGU). The key assumptions regarding the value-in-use
calculations are those regarding the discount rates and growth rates. Management estimates discount rates using
pre-tax rates that reflect current market assessments of a number of factors that impact on the time value of
money and any risk specific to the CGU. The rate includes management’s assessment of a normal level of debt:
equity ratio within similar companies in its sector and reflects the risks specific to the relevant business segment.
The Group prepares cash flow forecasts based on the latest financial budgets approved by management, which
cover a three-year period. The model includes the impact of expected changes in stock levels, anticipated capital
expenditure, tax costs, and dividends. Terminal values are calculated using a growth rate approximating the long-
term average growth rates for the product sectors concerned. The growth rates were assessed at 1.5% for PCB
Germany and 2.5% for LCS UK. The discount rate applied for PCB was 10%, and the discount rate for LCS was 15%.
14. Property, plant, and equipment
Short leasehold
land and
buildings
£’000
Group
Motor vehicles,
plant and machinery,
office equipment
£’000
Company
Total
Office
equipment
Total
£’000
£’000
£’000
Cost
At 30 November 2017
Currency translation
Additions
Disposals
At 30 November 2018
Currency translation
Additions
Disposals
At 30 November 2019
Depreciation
At 30 November 2017
Currency translation
Provided in year
Disposals
At 30 November 2018
Currency translation
Provided in year
Disposals
At 30 November 2019
92
-
-
-
92
-
-
-
92
92
-
-
-
92
-
-
-
92
Net book value
At 30 November 2019
At 30 November 2018
-
-
2,061
6
60
(52)
2,075
(36)
42
(593)
1,488
1,803
5
56
(48)
1,816
(30)
57
(592)
1,251
237
259
2,153
6
60
(52)
2,167
(36)
42
(593)
1,580
1,895
5
56
(48)
1,908
(30)
57
(592)
1,343
237
259
61
-
1
-
62
-
-
-
62
59
-
1
-
60
-
2
-
62
-
2
61
-
1
-
62
-
-
-
62
59
-
1
-
60
-
-
-
62
-
2
Holders Technology plc | Annual Report & Accounts 2019 37
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
15. Investments in subsidiaries
Cost
At 1 December 2017
At 1 December 2018
At 30 November 2019
Investments
at Cost
£’000
2,291
2,291
2,291
The following subsidiary undertakings were included in the consolidated financial statements at the year end.
Name
Registered office
Nature of business
Holders Technology GmbH
Holders Technology UK Limited
Holders Components Limited
Opteon Limited
16. Inventories
Woogmorgen 12, 67272
Kirchheimbolanden, Germany
27-28 Eastcastle Street, London
W1W 8DH, UK
Monkwood Cottage, Whitakers
Way, Loughton IG101SQ, UK
Monkwood Cottage, Whitakers
Way, Loughton IG101SQ, UK
Specialised materials and
components
Specialised products and
components
Dormant
Dormant
Interest in ordinary
shares & voting rights
100%
100%
100%
100%
Raw materials and consumables
Goods for resale
17. Trade and other receivables
Trade receivables
Less: provision for impairment
Net trade receivables
Amounts due from Group
undertakings
Other receivables
Prepayments and accrued income
Group
Company
2019
£’000
1,120
1,410
2,530
2018
£’000
1,474
1,375
2,849
2019
£’000
-
-
-
Group
Company
2019
£’000
1,532
(18)
1,514
-
13
231
1,758
2018
£’000
1,559
(31)
1,528
-
50
213
1,791
2019
£’000
-
-
-
151
3
12
166
2018
£’000
-
-
-
2018
£’000
-
-
-
601
15
12
628
Holders Technology plc | Annual Report & Accounts 2019 38
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
17. Trade and other receivables (continued)
The Group applies the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade
receivables, as these to not have a significant financing component. The expected lifetime credit losses reflect
assumptions on the ageing of overdue debts that may become unrecoverable, equivalent to a Group rate of 1.2%
(2018: 2.0%). The provision is based upon historical observed default rates over the expected life of trade
receivables, adjusted for an assessment of the current economic environment.
All trade receivables that are more than 365 days overdue have been provided for except where monies have been
received after the reporting date. The Group also provides for all other specifically identified amounts that are less
than 365 days overdue based on known impairment indicators including known trading difficulties. The table
below shows the movements in the provision for impairment of trade receivables:
Group
Impairment at 1 December
Currency translation
Impairment losses recognised
Amounts written off as irrecoverable
Amounts recovered
Impairment losses reversed
Balance 30 November
Ageing of past due unimpaired debt:
Past due 0-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-365 days
Past due > 365 days
18. Trade and other payables
Trade payables
Amounts due to Group undertakings
Other taxation and social security
Other payables
Accruals
2019
£’000
31
-
10
(7)
(16)
-
18
2019
£’000
326
34
-
-
-
360
Group
Company
2019
£’000
436
-
212
150
482
1,280
2018
£’000
529
-
132
115
597
1,373
2019
£’000
10
295
-
-
45
350
2018
£’000
21
-
20
(5)
-
(5)
31
2018
£’000
224
33
3
-
-
260
2018
£’000
15
428
-
5
57
505
Holders Technology plc | Annual Report & Accounts 2019 39
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
19. Financial instruments
a) The carrying amount and fair value of financial assets and liabilities at 30 November
Financial assets
Cash and cash equivalents
Trade and other receivables
Loans and receivables at amortised
cost
Financial liabilities
Trade and other payables
Financial liabilities at amortised cost
Derivatives
Liabilities at fair value through profit
and loss
Net financial assets
Group
2019
£’000
734
1,527
2,261
1,068
1,068
-
-
1,183
2018
£’000
403
1,578
1,981
1,241
1,241
-
-
740
Company
2019
£’000
2018
£’000
167
154
321
55
55
-
-
266
11
616
627
77
77
-
-
550
The carrying value of the Group’s financial assets and liabilities are considered to approximate their respective fair
values. The value of foreign exchange forward contracts has not been included as it is considered to be not
material.
b) Interest rate and currency profile of financial assets and liabilities
Currency profiles of the Group’s financial assets and liabilities are set out below:
Group
Financial
liabilities
£’000
191
753
124
1,068
258
835
148
1,241
Net financial
assets /
(liabilities)
£’000
990
248
(45)
1,193
526
288
(74)
740
Company
Financial
liabilities
£’000
53
2
-
55
65
12
-
77
Net financial
assets /
(liabilities)
£’000
52
214
-
266
(50)
600
-
550
Financial
assets
£’000
105
216
-
321
15
612
-
627
Financial
assets
£’000
1,181
1,001
79
2,261
784
1,123
74
1,981
Sterling
Euro
US dollar
At 30 November 2019
Sterling
Euro
US dollar
At 30 November 2018
All the Group’s financial assets and liabilities are non-interest bearing or have floating interest rates. There are no
fixed rate financial assets. Floating rate financial assets earn interest at rates based on local bank deposit rates.
Floating rate financial liabilities bear interest at rates based on the Bank of England Base Rate or relevant national
equivalents.
Holders Technology plc | Annual Report & Accounts 2019 40
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
19. Financial instruments (continued)
c) Currency profile of net foreign currency monetary assets and liabilities
The table below shows the net monetary assets/(liabilities) of the Group that are not denominated in the
functional currency of the operating unit and which therefore give rise to exchange gains and losses in the income
statement.
Group
US
dollar
£’000
Euro
£’000
Total
£’000
Euro
£’000
Company
US
dollar
£’000
-
-
Total
£’000
214
600
Sterling
At 30 November 2019
Sterling
248
(45)
203
214
At 30 November 2018
304
(74)
230
600
d) Market risk: objectives, policies, and strategies
The Group’s interest rate risks, liquidity risks and currency risks are managed centrally within policies approved by
the board.
No mitigation of interest rates using interest rate swaps has been undertaken. The net interest receivable for the
year was nil compared to nil receivable last year. No speculative transactions are undertaken. At present, forward
foreign exchange contracts are only used to hedge the value of anticipated purchase orders to be placed in foreign
currencies.
e) Market risk: sensitivities
A sensitivity analysis for financial assets and liabilities affected by market risk is set out below. Each risk is analysed
separately and shows the sensitivity of financial assets and liabilities when a certain parameter is changed. The
sensitivity analysis has been performed on balances at 30 November each year and therefore is not representative
of transactions throughout the year. The rates used are based on historical trends and, where relevant, projected
forecasts.
(i) Currencies
The Group is exposed to currency risk in relation to the value of its financial assets and liabilities that are
denominated in currencies other than sterling (see note 19(b) above), arising from fluctuations in exchange rates.
The table below shows the impact on the value of the Group’s reported net financial assets at 30 November of
exchange rates either strengthening or weakening by 10 per cent against sterling and the impact this would have
on the reported profit or loss and equity. The Group’s reported profit is not materially impacted by the effect of
changes in exchange rates on the value of its net financial assets, but equity would be £222,000 lower if sterling
strengthened by 10 per cent and £272,000 higher if sterling weakened by 10 per cent.
Holders Technology plc | Annual Report & Accounts 2019 41
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
19. Financial instruments (continued)
Group
2019
Effect of sterling strengthening
by 10%
Effect of sterling weakening by
10%
Net financial assets/(liabilities)
As
reported
Rate
+10%
Profit
Equity
Rate
-10%
Profit
Equity
Denominated in sterling
Not denominated in sterling
Net financial assets
£’000
1,020
203
1,223
£’000
£’000
£’000
£’000
£’000
£’000
-
(18)
(18)
-
(21)
(21)
-
(222)
(222)
-
23
23
-
26
26
-
272
272
Effect of sterling strengthening by
10%
Effect of sterling weakening by
10%
2018
Net financial assets/(liabilities)
Denominated in sterling
Not denominated in sterling
Net financial assets
As
reported
£’000
510
230
740
Rate
+10%
£’000
-
(21)
(21)
Profit
£’000
-
(27)
(27)
Equity
£’000
-
(209)
(209)
Rate
-10%
£’000
-
26
26
Profit
£’000
-
33
33
Equity
£’000
-
256
256
Company
2019
Effect of sterling strengthening
Effect of sterling weakening by
by 10%
10%
Net financial assets/(liabilities)
As
reported
£’000
Rate
+10%
£’000
Profit
£’000
Equity
£’000
Rate
-10%
£’000
Profit
£’000
Equity
£’000
Denominated in sterling
Not denominated in sterling
Net financial assets
82
214
296
-
(19)
(19)
-
(19)
(19)
-
-
-
-
24
24
-
24
24
-
-
-
Effect of sterling strengthening
by 10%
Effect of sterling weakening by
2018
Net financial assets/(liabilities)
Denominated in sterling
Not denominated in sterling
Net financial assets
As
reported
£’000
(50)
600
550
Rate
+10%
£’000
-
(55)
(55)
Profit
£’000
-
(55)
(55)
Equity
£’000
-
-
-
Rate
-10%
£’000
-
67
67
10%
Profit
£’000
-
67
67
Equity
£’000
-
-
-
Holders Technology plc | Annual Report & Accounts 2019 42
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
19. Financial instruments (continued)
(ii) Interest rates
Changes in market interest rates expose the Group to the risk of fluctuations in the cash flow relating to its financial
assets and liabilities that attract interest at floating rates (see note 19(b)). Based upon the interest rate profile of
the Group’s financial assets and liabilities as at both 30 November 2019 and 30 November 2018, there would be
no material impact of a one percentage point change in the market interest rates on the Group’s profit and equity.
f) Liquidity risk
The Group monitors its liquidity to maintain a sufficient level of undrawn debt facilities together with central
management of the Group’s cash resources to minimise liquidity risk. All the trade and other payables at 30
November 2019 amounting to £1,068,000 (2018: £1,241,000) are payable within three months.
Borrowing facilities
The Group has various borrowing facilities available to it. The unutilised portion of the facilities at 30 November
2019 amounted to £100,000 (2018: £300,000).
g) Credit risk
Group policies are aimed at minimising losses due to customer payment default. Deferred payment terms are only
granted to those customers who satisfy creditworthiness criteria and individual exposures to customers are
monitored. Where possible, operations purchase credit insurance.
The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region
is as follows:
UK
Rest of Europe
At 30 November
h) Capital risk
Group
Company
2019
£’000
704
823
1,527
2018
£’000
717
861
1,578
2019
£’000
104
50
154
2018
£’000
15
601
616
The Group’s primary objective is to ensure its continued ability to provide a consistent return for its equity
shareholders through a combination of capital growth and proposed dividend policy. It aims to minimise any
capital risk by maintaining a conservative financing structure. The board’s current policy is to use the Group’s cash
resources for any capital requirements and, where necessary, by adjustment to the value of dividends paid to
shareholders.
i) Exchange rate instruments
The Group forward exchange contracts to a vale of £89,000 at 30 November 2019 (2018: £605,000). When
appropriate during the year, contracts were taken out to mitigate trade payables denominated in foreign
currencies. The fair value of these instruments was £nil (2018: £nil).
Holders Technology plc | Annual Report & Accounts 2019 43
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
20. Retirement benefit liability
Group
At 1 December 2017
Currency translation
Change in actuarial assumptions
Utilised
At 1 December 2018
Currency translation
Change in actuarial assumptions
Utilised
At 30 November 2019
Retirement benefit liability
£’000
226
1
(27)
4
204
(6)
9
5
212
The retirement benefit liability arose from the 2002 acquisition of assets by Holders Technology GmbH from
Cimatec GmbH. Following the bankruptcy of Cimatec GmbH, a German court determined that Cimatec’s pension
obligation to one former Cimatec employee must be met by Holders Technology GmbH. The provision represents
the estimated net present value of the liability to pay an annuity to that employee upon retirement, which began
in 2008. The assumptions are: discount rate 0.73%, salary increase 0.0%, rate of pension increase (every 3 years
5.25%).
No other Holders Technology employees have any retirement benefit rights from their previous employment at
Cimatec.
21. Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using tax rates of 19.0% to
30.0% (2018: 19.0% to 30.0%). The movement on the deferred tax asset account is as shown below:
At 1 December – net deferred tax assets
Income statement credit/(charge)
At 30 November
Group
Company
2019
£’000
1
2
3
2018
£’000
9
(8)
1
2019
£’000
-
-
-
2018
£’000
-
-
-
The movements in deferred tax assets and liabilities (prior to the offsetting of balances within the same jurisdiction
as permitted by IAS 12) during the period are shown below:
Deferred tax assets
Group
At 1 December 2017
Credited to income statement
At 30 November 2018
Charged to income statement
At 30 November 2019
Pension
liability
£’000
16
(6)
10
2
12
Total
£’000
16
(6)
10
2
12
Holders Technology plc | Annual Report & Accounts 2019 44
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
21. Deferred tax (continued)
At the year end the amount of temporary differences associated with the undistributed earnings of overseas
subsidiaries for which deferred tax liabilities had not been recognised was insignificant. Deferred tax assets are
only recognised where in the Directors’ opinion there is a reasonable expectation of the tax asset being realised.
Assets are recognised based on business forecasts and the local tax environment.
Deferred tax liabilities
Group
At 1 December 2017
Transfer from income statement
At 30 November 2018
Transfer from income statement
At 30 November 2019
The Company had no deferred tax assets or liabilities.
22. Share Capital
Authorised
6,000,000 ordinary shares of 10p each (2018: 6,000,000)
Allotted and fully paid ordinary shares of 10p each
At 30 November 2018
Shares issued 16 April 2019
At 30 November 2019
Other Reserves
Share premium account
Capital redemption reserve
Accelerated
capital
allowances
£’000
7
2
9
-
9
2019
£’000
600
2018
£’000
600
Number
of shares
4,159,551
64,613
4,224,164
2019
£’000
1,590
1
2018
£’000
1,590
1
The Share Premium Account is the excess amount received for shares issued over their nominal value.
The Capital Redemption Reserve is the cumulative nominal value of own shares acquired by the company.
Holders Technology plc | Annual Report & Accounts 2019 45
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
23. Employees and staff costs
Group
Company
Wages and salaries
Social security costs
Other pension costs
Share based payments
2019
£’000
1,902
331
126
-
2,359
2018
£’000
1,875
321
119
-
2,315
Average monthly number of permanent employees, including executive directors:
Group
Administration and sales
Service and fabrication
Part-time
Directors’ remuneration
2019
£’000
209
21
73
-
303
2019
Number
24
27
51
1
52
2018
£’000
175
17
84
-
276
2018
Number
30
29
59
3
62
Directors’ remuneration for the year was as follows:
Company
Basic salary fees, bonuses
and expenses
Benefits in
kind
Total emoluments
R Weinreich (Chairman)
V Blaisdell
P Geraghty
T Bray
D Mahony
£’000
15
134
66
37
18
270
£’000
7
-
2
-
-
9
2019
£’000
22
134
68
37
18
279
Pension entitlement
Directors are entitled to receive their remuneration either as salary or as pension contributions.
Pension contributions to directors’ personal pension schemes are as follows:
Pension Contributions
V Blaisdell
P Geraghty
T Bray
2019
£’000
24
51
1
76
2018
£’000
19
95
58
95
18
285
2018
£’000
22
63
2
87
Holders Technology plc | Annual Report & Accounts 2019 46
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
23 Employees and staff costs (continued)
Directors’ shareholdings
The shareholdings of those serving at the end of the year were as follows:
R Weinreich
D Mahony
V Blaisdell
T Bray
The shareholdings are all beneficial.
Directors’ interests in share options
At start of
year or on
date of
appointment
100,000
120,000
100,000
320,000
No. of options
exercised or
lapsed during
year
(100,000)
-
-
(100,000)
T Bray
V Blaisdell
P Geraghty
Ordinary shares
2019
1,871,202
20,000
34,102
-
2018
1,871,202
20,000
34,102
200,000
At end of
year
Minimum
Threshold
Maximum
Threshold
Exercise
price
Date from
which
exercisable
Expiry
date
-
120,000
100,000
220,000
41.25p
41.25p
100.00p
100.00p
10.0p
10.0p
27/03/20
27/03/20
27/03/21
27/03/21
The share price at 30 November 2019 was 42p (2018: 39p) whilst during the year the high and low prices were
46p and 35p.
Key management compensation
Group
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Key management includes Directors and senior executives.
2019
£’000
522
81
-
-
603
2018
£’000
481
89
-
-
570
Holders Technology plc | Annual Report & Accounts 2019 47
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
23 Employees and staff costs (continued)
Total share options in issue
Total options in issue 1 December
Issued during year
Exercised
Forfeited
Leavers
Total options in issue 30 November
At the year-end no share options were exercisable.
24. Financial commitments
2019
No
370,000
-
(150,000)
-
-
220,000
2018
No
400,172
-
(30,172)
-
-
370,000
Capital commitments
As at 30 November 2019 the group had capital commitments for plant and machinery totalling £236,000 (2018:
£266,000).
Operating lease commitments
The Group leases various offices and warehouses under non-cancellable operating lease agreements. The lease
terms are between 1 and 5 years. The majority of lease agreements are renewable at the end of the lease period
at market rate. Total aggregate minimum lease payments under non-cancellable operating leases were:
Land and buildings
- No later than one year
- Later than one year and no later than five years
- Later than 5 years
Motor vehicles, plant and machinery
- No later than one year
- Later than one year and no later than five years
Other equipment
- No later than one year
- Later than one year and no later than five years
2019
£’000
2018
£’000
186
94
-
12
11
43
193
192
223
-
13
12
-
-
25. Share based payments
The Company operates a share option scheme under which a variable number of options are exercisable at a price
of 10p. The number of options available at this price is determined by the average share price for the 20 days
preceding the first exercise date. If this average share price equals or exceeds the maximum threshold shown in
Note 23, then 100% of the options may be exercised. If the average share price is below the maximum threshold,
then the number of options available is reduced pro rata.
Holders Technology plc | Annual Report & Accounts 2019 48
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
25. Share based payments (continued)
Options to subscribe for ordinary shares of 10p each are as follows:
Subscription
Price
30.0p
41.25p
Dates when exercisable
23 March 2019 to 23 March 2020
27 March 2020 to 27 March 2021
Number of shares
2019
150,000
220,000
2018
150,000
220,000
The estimated fair values were calculated using the option pricing model with the following inputs:
Grant date
Share price at date of grant
Exercise price
No. of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rates
Expected dividends
Possibility of ceasing employment before
vesting
Expectations of meeting performance
criteria
Fair value of option
27 March
2017
37.50
41.25
2
220,000
3
13%
3
3.5
0.0%
1.6%
10.0%
75%
3p
23 March
2016
27.50
30.00
2
150,000
3
13%
3
3.5
0.0%
1.4%
10.0%
75%
4p
The expected volatility is based on historical volatility over the expected life period. The expected life is the
average expected period to exercise based on historical experience and the terms of the scheme. The risk-free
return is the yield on zero-coupon UK government bonds of a term consistent with the assumed option life.
The Group recognised £4,000 charge (2018: £4,000 charge) related to equity-settled share-based payment
transactions during the year.
Holders Technology plc | Annual Report & Accounts 2019 49
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
26. Related party transactions (continued)
Group
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed.
Dividends were paid to directors as follows:
R W Weinreich
D A Mahony
V M Blaisdell
T G Bray
2019
£’000
14
-
-
-
14
Company
The company carried out the following transactions with its subsidiaries and joint venture:
Consultancy fees charged to subsidiaries and joint venture
Interest on short term loans
2019
£’000
297
15
2018
£’000
9
-
-
1
10
2018
£’000
300
15
Holders Technology plc | Annual Report & Accounts 2019 50
FINANCIAL STATEMENTS
FIVE-YEAR SUMMARY
Group revenue – continuing
Group revenue – discontinued
2019
2018
2017
2014
2013
£’000
£’000
£’000
£’000
£’000
12,162
12,486
12,208
10,698
11,195
50
682
Gross profit
Distribution costs
3,392
3,266
3,205
2,660
2,799
(419)
(422)
(438)
(385)
(364)
Administrative expenses
(2,890)
(2,696)
(2,695)
(2,539)
(2,652)
Restructuring costs and impairment charges
Other operating income
Group operating profit/ (loss)
Finance income
Finance expenses
-
61
144
6
-
-
36
184
-
(7)
-
(7)
65
-
(11)
(116)
119
(25)
91
(261)
(151)
3
(7)
1
(16)
Profit/ (loss) before taxation from continuing operations
150
177
54
(265)
(166)
Tax credit/ (expense)
31
(8)
5
(17)
(195)
Profit/ (loss) after tax from continuing operations
Loss from discontinued operations
Profit/ (loss) for the year attributable to equity shareholders
181
169
59
-
-
181
169
(42)
17
(282)
(113)
(395)
(361)
-
(361)
Earnings per share – continuing business
Earnings per share – basic
Earnings per share - diluted
4.31p
4.30p
4.06p
4.03p
1.42p
1.34p
(9.72p)
(9.16p)
(9.72p)
(9.16p)
Dividends per share in respect of each year
1.00p
0.75p
0.50p
0.50p
0.50p
Equity attributable to shareholders of the parent
4,164
4,099
3,932
3,860
3,870
Holders Technology plc | Annual Report & Accounts 2019 51