TIDMFOX
RNS Number : 3078P
Fox Marble Holdings PLC
07 February 2019
7 February 2019
Fox Marble Holdings plc
("Fox Marble" or the "Company")
Operating Update and Issue of Shares
-- Unaudited sales for the year ended 31 December 2018 of c.
EUR1.4 million, (2017 - c. EUR1.2million).
-- Production for the year ended 31 December 2018 of 12,561
tonnes (2017 - 8,811 tonnes) driven by an increase in production in
Prilep in the last quarter of the year, not yet reflected in
sales.
-- Fundraising completed raising GBP2 million with the funds
planned to increase capital equipment at the quarries in order to
expand production and meet the confirmed demand for material in
2019.
-- Block order book from existing customers for the year ended
31 December 2019 of around EUR3 million.
Operating Update
Fox Marble, the AIM listed company focused on marble quarrying
and finishing in Kosovo and the Balkans region, is pleased to
provide the following operational update ahead of the publication
of its preliminary results for year ended 31 December 2018 which
are anticipated to be notified in May 2019.
Sales
Unaudited sales for the year ended 2018 were c. EUR1.4 million,
with a further EUR0.3 million in advances which have not yet been
recognised in sales. Whilst sales growth has not been as strong as
expected, this has been driven by lower than expected quarry
production volumes in Maleshevë. The demand for our Illirico Selene
marble is currently outpacing production. We have seen encouraging
signs in the development of our customer base, with a core of
recurring block sale customers, with steady and regular demand for
our material. We expect these customers to form the backbone of
expected revenues in 2019.
-- In 2018, the Company has seen its first significant orders
from China. A single Chinese customer has purchased and paid for
894 tonnes of Illirico Selene in three separate shipments. This
customer has confirmed it wishes to take 300 tonnes of this
material each month for the next 12 months.
-- Turkey continues to be a consistent market for the Company,
with over 1,200 tonnes of material sold in 2018. The customer has
confirmed its expected demand in 2019 will be increased to 2,000
tonnes.
-- In January 2019, the Company announced that it had started
production of a new material at the Prilep quarry called
Alexandrian Blue. The new material has dense blue grey banding with
smaller bands of white which produce a marked blue tone and is akin
to the highly desirable Zebrino marble from Northern Italy. This
new material will be quarried alongside Alexandrian White which is
already in commercial production at the quarry. Fox Marble sold,
and received payment for, 441 tonnes of Alexandrian Blue extracted
in December 2018 to a single customer. Following this order, the
Company entered into a sales agreement with this customer to
purchase Alexandrian Blue with an expected value in excess of EUR1
million over the next twelve months. The same customer has
confirmed its intention to purchase 3,500 tonnes of Illirico
Selene.
-- In 2018, the Company has established an office in Dubai to
service the Gulf Cooperation Council region and has entered into a
forward purchase agreement for processed marble including a
$500,000 advance. The Company completed two large cut-to-size
orders to a client in the UAE at the end of 2018, including the
production of 50,000 10 cm x 10 cm tiles, which were secured via
our new Dubai office.
Quarry Production
Our focus has continued to be on the Maleshevë quarry in Kosovo
and Prilep quarry in Macedonia. Total production has increased to
12,561 tonnes, a 42% increase since 2017.
Production at the Maleshevë quarry, which produces the Illirico
Bianco and Illirico Selene stone was 7,278 tonnes (2017 - 6,526
tonnes). This was below the Company's expectations for the year,
particularly in relation to the second half of 2018. The Company
intends to make a significant investment in capital equipment in
order to address the production shortfall and meet demand for these
types of stone.
In Prilep, the introduction of a new quarry team at the site in
November 2018 increased the total production for the quarry to
5,282 tonnes (2017 - 2,285 tonnes). This 130% increase in
production was achieved primarily in the last six weeks of the
year, and provides an encouraging outlook for 2019 production at
this quarry. The Company is also intending to invest in capital
equipment in this quarry.
Factory
2018 was a transformative year for our factory. With full slab
production operational from the end Q3 2017, 2018 was focused on
meeting growing demand for cut to size stone in addition to
finished slabs. The Italian Gravellona Machine Marmo Computer
Numerical Control ("CNC") machine was installed in March 2018 and
was very quickly producing its first tiles for export. Since then,
cut to size capacity has been increased with the purchase of four
bridge saws, two edge polishers, a cylinder (column) milling
machine and a dedicated tile polishing line which will become
operational in Q1 2019. Operating processes have been consistently
refined and the factory is now operating two full shifts year
round.
The factory has been showcased as a key example of the benefits
of investment in Kosovo and visited by various dignitaries
including the Prime Minister of Kosovo, HE Ramush Haradinaj, the
British Ambassador, Ruairi O'Connell and the Chairman of the Kosovo
All Parties Parliamentary Group from Westminster, Martin Vickers
MP.
Outlook for 2019
The investment in capital equipment is expected to significantly
increase production, and allow further development of both major
quarries. Currently the Company has confirmed orders from existing
customers of approximately 16,000 tonnes of block material with
anticipated gross revenue value of around EUR3 million for the year
end 31 December 2019.
Fox Marble does not expect to be significantly impacted by the
expected departure of the United Kingdom from the European Union,
due to the location of its operations and the majority of its
customer base being located outside the European Union. The Board
will continue to monitor the situation in order to address and
mitigate associated risks as they arise.
Issue of shares and convertible loan notes
Fox Marble has issued 13,263,161 new ordinary shares in the
Company ("New Ordinary Shares") at 9.5p per share. Gross proceeds
of this issue of equity amounts to GBP1,260,000. The New Ordinary
Shares will rank pari passu with the existing ordinary shares.
Admission to AIM of the New Ordinary Shares will occur on or around
12 February 2019.
Fox Marble has issued a further GBP700,000 in Convertible Loan
Notes under the same terms as existing Loan Notes issued by the
Company. The Convertible Loan Notes will carry an interest rate of
8%, per annum. The Convertible Loan Notes are due for conversion or
repayment on 4 February 2022 with a conversion price set at
10.5p.
Proceeds from the issue of shares are intended to be used to
fund capital equipment at the Fox Marble's quarry sites to expand
production capabilities to supply increased demand for material in
2019.
Chris Gilbert, CEO, commented "Our efforts in marketing our
material globally are bearing fruit as we develop our markets in
India, China Turkey and Italy. We have repeat orders from multiple
customers, ordering marble principally from our quarries in Prilep
in Macedonia and Maleshevë in Kosovo. We have generated significant
demand for our product, as such we are increasing our investment in
these two quarries to increase our production capacity and grow
revenues. I expect this trend to continue this year and look
forward to being able to report that Fox Marble has a stable and
growing customer base with increasing revenues across the
Group.
Our factory is now capable of processing a full range of marble
products. We look forward to the sales of processed marble
increasingly contributing to the bottom line throughout the
year.
I expect to be advising the market of further sales as a result
of our continuing focus on marketing selling and distributing our
highly desirable premium quality stone throughout the world. Our
new offices in Dubai and Mumbai will contribute to this momentum
going forward."
Total Voting Rights
In accordance with Rule 5.6.1 of the Disclosure Rules and
Transparency Rules of the Financial Services Authority ("DTRs"),
the Company's issued share capital at 12 February 2019 will consist
of 231,148,483 ordinary shares of 1 pence each. The Company does
not hold any ordinary shares in treasury. Therefore the total
number of voting rights in the Company is 231,148,483.
The above figure of 231,148,483 may be used by shareholders in
the Company as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the share capital of the Company
under the DTRs.
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
For more information on Fox Marble please visit
www.foxmarble.net or contact:
Fox Marble Holdings plc
Chris Gilbert, Chief Executive Officer Tel: +44 (0) 20 7380
0999
Fiona Hadfield, Finance Director Tel: +44 (0) 20 7380
0999
Brandon Hill Capital (Broker)
Oliver Stansfield Tel: +44 (0) 20 3463
5000
Cairn Financial Advisers LLP (Nomad)
Liam Murray / Sandy Jamieson Tel: +44 (0) 20 7213
0880
Notes to Editors:
Fox Marble (AIM: FOX), is a marble production, processing and
distribution company in Kosovo and the Balkans region.
Its marble products, which includes Illirico Bianco, Illirico
Selene, Grigio Argento and are gaining traction globally both to
international wholesale companies as well as being supplied
directly into luxury residential properties. In the UK these
include among others St George's Homes and Capital and Counties
Plc's Lillie Square development. In Sydney, Australia Rosso Cait,
Alexandrian White and Breccia Paradisea marble have been used in
what is expected to be Australia's most expensive residential
property. These sales serve to demonstrate the desirability of
Fox's premium marble products as the stone of choice in some of the
most prestigious and expensive residential developments around the
world.
Fox Marble holds 40 year mining licences for six separate marble
quarries with a maiden JORC resource indicating an in-situ
valuation of approximately Euro 16.5 billion. Fox has taken three
of the six sites into production (the Drini and Maleshevë quarries,
both in Kosovo and from the Prilep Quarry in Macedonia) and
continues to increase production. Notably, Fox has access to over
300 million cubic metres (over 1bn tons) of premium quality
marble.
Marble demand continues to grow with stable pricing,
predominantly driven by the construction and real-estate
industries, on which Fox is looking to capitalise.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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