Business
Trading Statement
Trading Statement.
About this update from Titon Holdings Plc
[{"type":"text","content":"\n Titon Holdings PLC\n24 August 2007\n\n\n Titon Holdings PLC (\"Titon\" or the \"Company\")\n\n Trading Update\n\n\nThe Board today announces a trading update following completion of the first 10\nmonths of the current financial year ended 30 September 2007.\n\nAs set out in the interim results in May 2007, the financial performance of the\nCompany for the first 6 months was in line with management expectations.\nHowever, during the second half of the financial year it has become clear to\nmanagement that the financial performance of the Company for the full year is\nlikely to be below market expectations.\n\nSince the interim period, operating margins have been adversely impacted by\nincreases in raw material prices which the Company has been unable to pass on to\ncustomers because of difficult market conditions. Production efficiency and\noverheads have also been affected by the introduction of new ventilation\nproducts, as a result of Building Regulation changes and then the unexpected\nregulatory U-turn. Additionally, the Company has experienced lower sales to\nEurope along with reduced profitability in the US due to the strength of\nSterling.\n\nThe Directors are focused on carrying out a programme to increase market share\nand reduce costs significantly in 2007/2008. As part of this process the Company\nhas closed its in-house zinc die casting plant and began outsourcing these\ncomponents. In order to ensure continuity of supply during the process,\ninventories were increased giving rise to additional production costs throughout\nthe summer. The cost of closing this facility during the period has been\napproximately £50,000, however the Directors expect to see cost reductions as a\nresult of this action from the 2007/2008 financial year.\n\nTaking account the above factors, the Directors believe the profit before tax\nfor the full year will be no less than £400,000.\n\nDavid Ruffell, Chief Executive of Titon, commented:\n\n\"Clearly the trading performance of the Company has been disappointing in the\nsecond half of the current financial year, principally due to higher material\ncosts and the impact of the changes in Building Regulation guidance on\nventilation. However, the Board is focused on improving sales and margins, and\non reducing costs within the business. The Company intends to update\nshareholders further i...