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Holders Technology – FY increased loss, though argues “heartened” by recent signs. Hmmm…

By Steve Moore | Friday 17 February 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Having previously concluded that shares in Holders Technology (HDT) were on the bargepole list, I note the announcement of results for its year ended 30th November 2016.

This notes a 1.7% increase in revenue to £11.38 million, but the income statement still shows an increased pre-tax loss of £0.38 million. This includes £0.18 million of “restructuring costs”, but even adjusting for those, the loss was still increased from a prior year adjusted £0.14 million.

A net £0.72 million working capital inflow helped cash (net) actually increase by £0.34 million to £0.78 million, but this is not a sustainable practice. It does though currently help see a 0.25p per share dividend (£0.01 million) maintained and Executive Chairman Rudi Weinreich concludes;

“The board has a continuing belief in the group's ability to overcome the difficulties it confronts. It is heartened by the initial signs of improved printed circuit board performance, and by the customer interest in the new ‘smart lighting’ products added into the LED divisions.”

However, similar has been heard before here – and thus this doesn’t exactly inspire great confidence. As such, I’ll wait to see hard evidence of improvement before re-considering the stance of bargepole stock.

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