21st Dec 2021 16:07
(Alliance News) - Two changes at the top of Titon Holdings PLC added to challenge the building supplies maker faced over the past year from cost increases and supply problems, but it still managed to book higher annual profit and revenue.
The Colchester, Essex-based manufacturer of ventilation systems and window & door hardware on Tuesday reported increased profitability but expressed concern over higher prices for supplies and component shortages going into 2022.
In the financial year that ended September 30, Titon said pretax profit leapt to GBP1.1 million from just GBP18,000 in financial 2020. cited a strong performance in its UK business for the improvement.
Revenue rose 13% to GBP23.4 million from GBP20.7 million. Its UK business led the rise, while in South Korea revenue fell.
Titon said revenue in its South Korea business fell by 27% to GBP3.6 million from GBP4.9 million as a result of a slowdown in residential construction activity and delays in projects, the impact of the pandemic, and supply chain issues. Revenue from its UK business, however, rose 34% to GBP16.1 million from 12.2 million.
Titon noted price increases for raw materials, components and labour and said it expects to see this continue throughout 2022. Continuing component shortages was also an area of concern looking forward. Nonetheless, Titon said it remains optimistic over the medium-term prospects for the group.
Titon declared an increased final dividend of 3.0 pence per share, up 50% from 2.0p the previous financial year. That provided a full-year payout of 4.5p, more than doubled from 2.0p.
Back in April, David Ruffell stepped down as chief executive after 33 years at the helm. Matthew Norris was hired to replace him and joined the company in May, but has since resigned and will leave in February. Executive Chair Keith Ritchie, who has been stepping in as interim CEO, said a search for a new chief executive is underway.
"We have been pleased that sales have rebounded following the impact of the first UK lockdown in March 2020, as the house building and [repair, maintenance and improvement] sectors have recovered," Ritchie said.
"The on-going supply challenges are a well-publicised issue affecting the whole industry. Whilst we expect this will hold back 2022 performance to some degree, we will continue to do everything we can to manage and alleviate these challenges."
Analysts at Titon's broker, Shore Capital, called the financial 2021 results "stellar", with pretax profit 12% ahead of its expectations and revenue 3% ahead.
Shore said the cost pressures mentioned by Titon mean the broker now expects margins to suffer in financial 2022. It expects margin at the earnings before interest and tax level to be 3.9% in the year ahead, down from its previous forecast of 5.8%, before recovering to 5.8% in financial 2023.
Shares in Titon were up 4.6% at 115.00 pence on Tuesday afternoon in London, having initially fallen in morning trade.
By Heather Rydings; [email protected]; and Tom Waite; [email protected]
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