12th Dec 2019 11:43
(Alliance News) - Titon Holdings PLC on Thursday reported a drop in annual profit as the firm continues to deal with market difficulties for its South Korea unit.
Shares in the ventilation system, window and door hardware firm were down 9.9% in London in midday trade at 121.60 pence each.
In the financial year to September 30, Titon's pretax profit dropped 29% to GBP2.0 million from GBP2.8 million the year before.
Revenue slipped 8.7% to GBP27.2 million from GBP29.8 million.
Titon was able to maintain its full-year dividend, however, paying out 4.75 pence, flat on the year before.
"It has been a more challenging year for Titon with revenue lower by 9% year-on-year and, whilst the gross margin rose and underlying Ebitda was just 3% lower, underlying profit before tax declined by 22%," Executive Chair Keith Ritchie said.
He added: "The prime factor in this performance was the slow-down in South Korea, which I reported on earlier in the year."
Back in February, Titon warned that trading in South Korea would be well below market forecasts as South Koreans chose mechanical rather than natural units to tackle air pollution.
Titon has been trying to re-design its units and bring in new products, but was unable to do this during financial 2019.
Then in mid-March, Titon investigated the reduced trading performance of its Titon Korea unit and found accounting errors. Some of the costs associated with its products sold in earlier accounting periods, including in its year to September, were not "fully take into account" with gross profit on those products not recorded correctly.
The company noted its UK, European and US operations traded "satisfactorily" in the period.
"Our business model is robust but we continue to face political and economic uncertainties which have contributed to a challenging first two months of the fiscal year. Titon builds and delivers popular products across a unique geographical spread and a number of core market positions. We have good people, a strong balance sheet and continue to seek new growth opportunities in our target markets," Ritchie added.
By Paul McGowan; [email protected]
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