19th May 2023 14:34
(Alliance News) - Titon Holdings PLC on Friday posted mixed results, exceeding analyst expectations for revenue growth in the UK and Europe, but disappointing on a worsened performance in South Korea.
For the six months ended March 31, the Colchester, Essex-based ventilation systems and window & door hardware supplier reported net revenue of GBP12.1 million, up 5.2% from GBP11.5 million the year before.
Its pretax loss, however, widened to GBP449,000 from GBP250,000, as administrative expenses rose to GBP2.7 million from GBP2.5 million year-on-year. Earnings before interest, tax, depreciation and amortisation were down 36% to GBP180,000 from GBP280,000.
The UK and Europe segment generated revenue of GBP10.3 million in the first half, up 6.0% on the previous year, and prompting Shore Capital to up its expectations for the full-year. Analysts at the broker now expect full-year revenue from this segment between GBP19.0 million and GBP19.5 million.
They attributed growth in this segment to the Ventilation Systems division, particularly to mechanical ventilation heat recovery units, which are increasingly being installed in new residential dwellings in the UK.
"We see MVHR as a multi-year trend driven by tighter building regulations, designed to reduce energy consumption and CO2 emissions," Shore Capital said.
South Korea, meanwhile, failed to perform. Shore Capital said that it expects the segment's pretax loss of GBP245,000 to be duplicated in the second half. As a result, analysts have increased the full-year pre-tax loss estimate for the segment from GBP200,000 to GBP500,000.
They were, however, "encouraged by management's focus on reducing these losses going forward", and also thought there was "potential for a strategic review of this business".
In its release on Friday, Titon said it remained committed to achieving all of its business imperatives for the rest of the year, but was anticipating full-year results to be "lower than expected" due to weak trading in South Korea.
Shore Capital echoed this sentiment. Analysts said they are now expecting pretax loss to widen from GPB443,000 to GBP700,000, which was "entirely due to the revised estimate for South Korea.
By Holly Beveridge, Alliance News reporter
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