HRC WORLD PLC
NASDAQ FIRST NORTH,
COPENHAGEN
TICKER: HRC
ISIN: GB00BZ3CDY20
23 JULY 2018
FINANCIAL RESULTS
TO 31 MARCH 2018
HRC World Plc ("HRC" or the
"Company" or the "Group"), a company establishing Hard Rock Cafés
across China, presents its results for the fifteen months ended 31
March 2018. The audited financial statements are appended to this
announcement.
Chairman's
Statement
"It is my pleasure to present you
HRC World's Annual Report for the period ended 31 March 2018. We
have successfully completed our admission to trading of Ordinary
Shares on Nasdaq First North, Copenhagen, Denmark (Admission) on
the 6 February 2018 . At the same time, the Group was formed
through the acquisition by the Company of the subsidiaries, namely
HRC Asia Ltd, HRCL (CC) Ltd, Ada Holdings Limited and its Wholly
Foreign Owned Enterprises (WFOEs) in China, representing Hard Rock
Café in Shanghai, Hangzhou, Chengdu as well as a project management
company based in Shanghai.
The Group has already established
2 Hard Rock Cafés, namely, Hard Rock Café Shanghai and Hard Rock
Café Hangzhou, with a 3rd Café in Chengdu expected to open in
Q3'2018. On 15 February 2018, Mr Alex George was appointed as the
CEO cum Executive Director of the Group."
Strategy and
Objectives
The Group's business strategy is
to open the first 3 restaurants in Shanghai, Hangzhou and Chengdu -
first two having been in operations for more than one and a half
years now while the third one, in Chengdu is expected to open in
few months' time. Thereafter the Group plans to embark on an
aggressive expansion plan that will see opening of one additional
restaurant per month until at least 30 restaurants are running. The
Group is of the opinion that having any lesser number of operating
restaurants will not give it the desired economies of scale to
implement China country-wide marketing strategies - which is
important in an emerging market like China.
Accordingly, the Group has
been in discussion with the franchisor and subsequently has
procured rights or first rights of refusal to open Hard Rock Café
restaurants ("Restaurants") and Rock Shop merchandise outlets
across most major cities in China. It is also in discussion to
procure further rights to operate in Taiwan.
Since Hard Rock Café is renowned
for its casual American dining coupled with live-band
entertainment, the Group plan to further capitalise on the concept
by rotating the bands playing at each of the Group's restaurants
such that there is always a new band playing and thus encouraging
more frequent visits by patrons. The Group also plans to organise
in-house music competitions as well as global Hard Rock band
competitions to gain stronger visibility of the brand in China as
well as globally.
Financial
Overview
The Group generated a total of USD
7.42 mil (2016: USD 0.42 mil) in revenue from the operations with
Cost of Sales of USD 6.13 mil (2016: USD 0.39 mil), resulting in
Gross Profit of USD 1.29 mil (2016: USD 0.03 mil). However, after
deducting all expenses and considering that the Group is still in
business expansion stage, it recorded a loss of USD 6.20 mil
(compared to FY 2016 loss of USD 4.09 mil).
The Group has total non-current
assets amounting to USD 4.10 mil at 31 March 2018 compared to USD
3.57 mil at 31 December 2016. Total equity stood at USD 6.03 mil
for the current period compared to liabilities of USD 3.43 mil for
the FY ending 31 Dec 2016.
The consolidated net loss per
share for the 15 months period ended 31 March 2018 was US$ 0.175
per share and 150,000,000 shares were outstanding at the close of
the financial period ended 31 March 2018.
During the 15-month period ended
31 March 2018 the Group raised new capital from investors and
underwent a reconstruction under which shareholder loans were
capitalised, thereby strengthening the Company's capital base. The
Company is still in a relatively early stage of development as its
existing restaurants and stores become established in each new
location and as new sites are identified. The expansion and
development will need to continue before profitability is
achieved.
Whereas the Group's consolidated
net assets were positive at 31 March 2018, as a result of the issue
of new shares and a debt conversion during the period under review,
the early stage nature of the Group's activities mean that the
underlying business is still loss making and a fund-raise is
expected by the Company within the next 12 months.
Going
Concern
The financial statements have been
prepared on a going concern basis. Whereas the Group's consolidated
net assets were positive at 31 March 2018, as a result of the issue
of new shares and a debt conversion during the period under review,
the early stage nature of the Group's activities mean that the
underlying business is still loss making. In order to achieve its
business plan the Group will need to finance its capital
expenditure and working capital requirements from its existing
resources, from future revenues generated by the restaurants as
they become established and from external sources of finance as
required. Accordingly, the Group is planning to raise further funds
within the next 12 months.
After making due enquiries, the
Directors have a reasonable expectation that the Group has adequate
resources, supplemented by the additional funds to be raised, to
continue as a going concern for the foreseeable future and that the
carrying values of intangible assets are not impaired. Thus, they
continue to adopt the going concern basis of accounting in
preparing these financial statements.
Future
Developments
The Group is fully focused on
maximising its brand equity and business expansion in China. It is
currently in process of completing the Hard Rock Café in Chengdu,
which is estimated to take another 2 or 3 months to complete. In
addition, the Group has started exploring feasibility in
establishing Hard Rock Cafés in other cities such as Guangzhou,
Wuhan and Shenzhen in the immediate future.
Apart from existing Hard Rock Café franchise, the Group is also in
talks with other food and beverage chains that have similar
aspirations as the Group in expanding businesses in tandem with
music and pop culture infusion.
The Company has been well received
by both investors and customers alike and this further propels the
Group in seeking business expansion beyond Hard Rock Café
franchise. We remain committed to managing our cash resources and
exposure to risk carefully whilst reviewing opportunities that add
long term shareholder value. Each and every day, our team will
continue to work tirelessly for each and every stakeholder.
THE DIRECTORS OF
HRC WORLD PLC ACCEPT RESPONSIBILITY FOR THIS ANNOUNCEMENT
About HRC World
Plc
HRC World Plc is an England & Wales incorporated public company
with registration number 10829936 and is quoted on Nasdaq First
North (Copenhagen). HRC World through its subsidiaries owns
franchise rights for establishment of Hard Rock Cafés across
China.
Further information may be found at the Company's
website: www.hrcplc.co.uk
Company contact details
HRC World Plc
+603 7786 0500
info@hrcplc.co.uk
Certified Adviser
Keswick Global AG
info@keswickglobal.com
+43 1 740 408045
180723 HRCW 2018 Annual Report -
final
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: HRC World PLC via Globenewswire
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