Titon Holdings PLC Trading Update (8469H)
November 29 2022 - 2:00AM
UK Regulatory
TIDMTON
RNS Number : 8469H
Titon Holdings PLC
29 November 2022
LEI: 213800ZHXS8G27RM1D97
This announcement contains inside information
29 November 2022
Titon Holdings Plc
Trading Update
Titon Holdings Plc ("Titon", the "Group" or the "Company")
provides the following update on the Group's expected results for
the year to 30 September 2022 ("FY21/22") and on the outlook for
the year to 30 September 2023 ("FY22/23").
FY21/22 results
Trading in UK and Europe through to the end of the FY21/22
period continued in line with the Group's expectations following
its update on 22 July 2022, as the Group managed the inflationary
environment, the ERP system implementation and the supply chain
challenges that were present in FY21/22.
However, as a result of the previously reported weak housing
market and shift in market demand to mechanical ventilation
products from natural ventilation in the South Korean market,
Titon's South Korean business has reported to the Group a further
decline in results for FY21/22. As a result, Titon now expects that
the Group's overall underlying loss before tax and exceptional
items will be moderately larger than previously anticipated.
The Group's financial results for FY21/22 remain subject to the
completion of the Group's audit. The Group expects that its final
audited results for FY21/22 will be published in January 2023.
Current trading and outlook
Trading in the first two months of the Group's current financial
year to 30 September 2023 ("FY22/23") has been in line with our
expectations in the UK and Europe.
While supply chain shortages have eased, the Group continues to
manage inflationary margin erosion through customer price
increases, material cost savings and internal efficiencies. The
Group has increased the output of Ventilation Systems products as
supply shortages have eased and we have invested to increase
capacity for our Hardware products to satisfy the increased demand
resulting from the Building Regulation changes in June 2022.
In the UK and Europe, we currently expect to report a loss
before tax and exceptional items in H1 FY22/23, but we expect to
return to profitability in H2 FY22/23. Whilst FY22/23 results
overall will be somewhat lower than our previous expectations, we
expect FY22/23 will show a full year improvement in performance
when compared to our expected FY21/22 results.
Having filled key management vacancies, we now have a strong and
experienced leadership team in place whose focus is to improve
business performance. In addition, we have an ongoing strong order
book with our customers.
Titon Korea is expected to remain loss-making in FY22/23 due to
the challenging market conditions, as the Group has yet to see
significant sales of mechanical ventilation products launched in
response to the shift in demand in that market.
Strong balance sheet
The Group continues to maintain a healthy balance sheet with no
indebtedness. Group cash at 30 September 2022 was GBP1.7m.
Following the investment in the Group's inventory holding during
FY21/22 in order to mitigate the previous supply chain issues, a
strategic focus in FY22/23 will be to reduce our inventory holding
to normalised levels, to match order book demand and maximise our
liquidity and overall working capital positions.
Alexandra French, CEO, commented:
"After a challenging year, we are comforted that the UK and
Europe business performed in line with our revised expectations and
has had a reasonable start to the new financial year. However, we
are obviously disappointed to report that overall, the Group's
trading performance for the FY21/22 full year will be lower than
previously indicated due to the poor performance of our Korean
subsidiary.
From a UK and European perspective, we now have a strong
leadership team in place who have defined a clear vision for the
business, and we are confident that this will enable us to deliver
stability and ultimately a return to profit in these regions in H2
FY22/23. Titon Korea's return to profitability is now likely to be
in the medium term while it develops its position in the mechanical
ventilation market and we are therefore evaluating options for
streamlining the corporate structure and operations of the Korean
business.
We thank all of our customers for their valued business, and we
look forward to returning to our strong levels of customer service.
We also thank our employees for their continued hard work and
commitment during what has been a difficult year. Despite these
difficulties we remain confident in our medium-term future,
supported by our strong financial position. "
ENDS
For further information please contact:
Titon Holdings Plc
Keith Ritchie Tel: +44 (0)7748
Alexandra French 146834
Tel: +44 (0)7949
409132
Shore Capital (Nominated Adviser and Broker) Tel: +44 (0)20 7408
Daniel Bush 4090
Tom Knibbs
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END
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