Half Yearly Report
September 13 2010 - 2:00AM
UK Regulatory
TIDMKEN
RNS Number : 5327S
Kenetics Group Limited
13 September 2010
For release: 0700, 13 September 2010
KENETICS GROUP LIMITED
INTERIM FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2010
Kenetics Group Limited
("Kenetics" or "the Company" or "the Group")
Interim Results
Kenetics Group Limited (AIM: KEN) the Radio Frequency Identification (RFID)
company focused on Security and RFID systems and products, announces its interim
results for the six month period ended 30 June 2010.
Key Points
· Consolidated turnover fell 17% to GBP472,000 (H1 2009: GBP570,000).
· Consolidated loss on ordinary activities after tax and expenses was up 6.4%
GBP217,000 (H1 2009: GBP204,000).
· Increase in materials cost due to the manufacturing of the production units
of On-Board Bus Equipment ("OBE") in fulfillment of the Singapore Land Transport
Authority ("LTA") contracts, which was offset by reduction in employee benefits
expenses and other operating expenses.
· In-house testing of the OBE systems for the LTA contracts has been
completed.
· Delivery of the production systems will begin in September 2010 for
deployment in October 2010.
Commenting on the results, Ken Wong, Chairman and CEO said: "We feel confident
that the LTA trials will be successfully completed by the end of the year and
the Company will continue to seize the opportunities not only in Singapore but
also in the region to grow the business"
+---------------------------------------------+
| For further information, please contact: |
+---------------------------------------------+
| Ken Wong, Chairman and CEO |
+---------------------------------------------+
| Kenetics Group Limited |
+---------------------------------------------+
| Tel: +65 6749 0083 |
+---------------------------------------------+
| Website:www.kenetics-group.com |
+---------------------------------------------+
+--------------------------------------------------------------------------------+
| Dominique Doussot |
+--------------------------------------------------------------------------------+
| ZAI Corporate Finance Ltd |
+--------------------------------------------------------------------------------+
| (Nominated Advisor) |
+--------------------------------------------------------------------------------+
| Tel: +44 207 060 1760 |
+--------------------------------------------------------------------------------+
+--------------------------------------------------------------------------------+
| Alex Mattey / Ian Callaway |
+--------------------------------------------------------------------------------+
| SVS Securities (PLC) |
+--------------------------------------------------------------------------------+
| (Broker) |
+--------------------------------------------------------------------------------+
| Tel: +44 207 638 5600 |
+--------------------------------------------------------------------------------+
+----------------------------------------+----------------------------------------+
| | Jeremy Carey / Andrew Dunn |
+----------------------------------------+----------------------------------------+
| | Tavistock Communications Ltd |
+----------------------------------------+----------------------------------------+
| | Tel: +44 207 920 3150 |
+----------------------------------------+----------------------------------------+
CHAIRMAN'S STATEMENT
The first half year performance has been affected by the delay in the start of
the deployment and trials for the OBE systems for the LTA contracts. This delay
was mainly due to operational issues which arose during the testing of the OBE
systems and the integration of the systems with the fare collection software
developed for the Singapore public transport operations, which include both the
bus and rail systems.
The testing of the OBE system has now been completed and the certification of
the system is expected to be completed by end September 2010 before the actual
installation begins.
I am pleased to announce that the deployment and trials will start on 1 October
2010 with 10 buses and all 170 buses to be commissioned by end Nov 2010. The
trial period will be shortened to two months, from Oct 2010 to Dec 2010, as many
issues were resolved during the in-house testing phases. It is expected by LTA
that the two month trial period will be sufficient to detect and resolve any
further issues that may arise. Delivery of the first 40 systems is scheduled for
the 17 September 2010 and the balance of 130 system by the end of October 2010.
The Contactless Smart Card (CSC) Reader developed for the LTA rail (subway)
systems has been successfully completed. The readers have been deployed in
eleven stations and are currently undergoing a three month trial. I am pleased
to mention that the reader has now been adopted for the bus systems as well. It
will be deployed together with the OBE system trials in October 2010. 880
readers are manufactured and awaiting loading of the fare collection software by
LTA. 631 reader units had been programmed as at 30 Aug 2010.
In my statement with the full year results for 2009, the directors stated that
the Group would be seeking additional funds in the form of equity financing in
two phases during 2010. On 21 June 2010, we announced that we had raised
GBP300,000 (gross) by way of a Placing of 7,500,000 new shares at 4.0p per
share, to provide continued working capital to fulfill the LTA contracts. The
second phase will focus in raising GBP2 million to provide the necessary
financial resources to bid for the subsequent commercial roll-out contracts for
both the rail and bus systems.
Despite the delay in the deployment of the OBE systems for the bus trials, the
Company is leveraging on the completion of the development and testing of the
OBE hardware and systems. Working with its partners, Kenetics has been involved
in marketing the OBE systems to other countries, particularly in South East
Asia. A trial system with two buses is expected to begin in Vietnam by the end
of 2010. The Board feels confident that the LTA trials will be successfully
completed by the end of the year and the Company will continue to seize the
opportunities not only in Singapore but also in the region to grow the business
Ken Wong, Chairman and CEO
Kenetics Group Limited
10 September 2010
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
CONDENSED CONSOLIDATED INCOME STATEMENT
+------------------------------+-----+-------------+-------------+-------------+
| | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| | | 6 months | 6 months | 12 months |
+------------------------------+-----+-------------+-------------+-------------+
| | | Ended | Ended | Ended |
+------------------------------+-----+-------------+-------------+-------------+
| | | 30 June | 30 June | 31 December |
+------------------------------+-----+-------------+-------------+-------------+
| | | 2010 | 2009 | 2009 |
+------------------------------+-----+-------------+-------------+-------------+
| | | (Unaudited) | (Unaudited) | (Audited) |
+------------------------------+-----+-------------+-------------+-------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+------------------------------+-----+-------------+-------------+-------------+
| | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| Continuing operations | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| Revenue | | 472 | 570 | 1,422 |
+------------------------------+-----+-------------+-------------+-------------+
| Other operating income | | - | 36 | 80 |
+------------------------------+-----+-------------+-------------+-------------+
| Changes in inventories of | | | | |
| finished | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| goods and | | 12 | (21) | (47) |
| work-in-progress | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| Raw materials and | | (227) | (163) | (430) |
| consumables used | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| Employee benefits expenses | | (278) | (329) | (723) |
+------------------------------+-----+-------------+-------------+-------------+
| Depreciation of plant and | | (21) | (25) | (51) |
| equipment | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| Other operating expenses | | (131) | (202) | (378) |
+------------------------------+-----+-------------+-------------+-------------+
| Loss arising on derivative | | | | |
| financial instrument | | - | (52) | (20) |
+------------------------------+-----+-------------+-------------+-------------+
| Finance costs | | (43) | (17) | (58) |
+------------------------------+-----+-------------+-------------+-------------+
| Loss before income tax | | (216) | (203) | (205) |
+------------------------------+-----+-------------+-------------+-------------+
| Income tax expense | | (1) | (1) | 17 |
+------------------------------+-----+-------------+-------------+-------------+
| Loss for the period | | (217) | (204) | (188) |
+------------------------------+-----+-------------+-------------+-------------+
| | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| Loss attributable to: | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| Owners of the Company | | (217) | (204) | (188) |
+------------------------------+-----+-------------+-------------+-------------+
| Minority interests | | - | - | - |
+------------------------------+-----+-------------+-------------+-------------+
| | | (217) | (204) | (188) |
+------------------------------+-----+-------------+-------------+-------------+
| | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| | | | | |
+------------------------------+-----+-------------+-------------+-------------+
| Loss per share (pence) - | | | | |
| Basic | | (0.81) | (0.77) | (0.68) |
| and diluted | | | | |
+------------------------------+-----+-------------+-------------+-------------+
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| | | 6 months | 6 months | 12 months |
+--------------------------------+----+-------------+-------------+------------+
| | | Ended | Ended | Ended |
+--------------------------------+----+-------------+-------------+------------+
| | | 30 June | 30 June | 31 |
| | | | | December |
+--------------------------------+----+-------------+-------------+------------+
| | | 2010 | 2009 | 2009 |
+--------------------------------+----+-------------+-------------+------------+
| | | (Unaudited) | (Unaudited) | (Audited) |
+--------------------------------+----+-------------+-------------+------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| Loss for the period | | (217) | (204) | (188) |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| Other comprehensive income: | | | | |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| Foreign currency translation | | 4 | (4) | (1) |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| Total comprehensive expensefor | | | | |
| the period | | (213) | (208) | (189) |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| Total comprehensive | | | | |
+--------------------------------+----+-------------+-------------+------------+
| expense attributable to: | | | | |
+--------------------------------+----+-------------+-------------+------------+
| Owners of the Company | | (213) | (208) | (189) |
+--------------------------------+----+-------------+-------------+------------+
| Minority interests | | - | - | - |
+--------------------------------+----+-------------+-------------+------------+
| | | (213) | (208) | (189) |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
| | | | | |
+--------------------------------+----+-------------+-------------+------------+
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
+----------------------------------------+-------------+--------------+-------------+
| | | | |
+----------------------------------------+-------------+--------------+-------------+
| | 30 June | 30 June | 31 December |
+----------------------------------------+-------------+--------------+-------------+
| | 2010 | 2009 | 2009 |
+----------------------------------------+-------------+--------------+-------------+
| | (Unaudited) | (Unaudited) | (Audited) |
+----------------------------------------+-------------+--------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+-------------+--------------+-------------+
| Non-current assets | | | |
+----------------------------------------+-------------+--------------+-------------+
| Plant and equipment | 308 | 100 | 208 |
+----------------------------------------+-------------+--------------+-------------+
| Available for sale financial asset | - | - | - |
+----------------------------------------+-------------+--------------+-------------+
| Total non-current assets | 308 | 100 | 208 |
+----------------------------------------+-------------+--------------+-------------+
| | | | |
+----------------------------------------+-------------+--------------+-------------+
| Current assets | | | |
+----------------------------------------+-------------+--------------+-------------+
| Contract work-in-progress | 355 | - | 526 |
+----------------------------------------+-------------+--------------+-------------+
| Inventories | 642 | 449 | 504 |
+----------------------------------------+-------------+--------------+-------------+
| Trade receivables | 26 | 90 | 204 |
+----------------------------------------+-------------+--------------+-------------+
| Other receivables | 174 | 186 | 208 |
+----------------------------------------+-------------+--------------+-------------+
| Cash and cash equivalents | 146 | 183 | 137 |
+----------------------------------------+-------------+--------------+-------------+
| Total current assets | 1,343 | 908 | 1,579 |
+----------------------------------------+-------------+--------------+-------------+
| Total assets | 1,651 | 1,008 | 1,787 |
+----------------------------------------+-------------+--------------+-------------+
| | | | |
+----------------------------------------+-------------+--------------+-------------+
| EQUITY AND LIABILITIES | | | |
+----------------------------------------+-------------+--------------+-------------+
| Equity attributable to owners of the | | | |
| Company | | | |
+----------------------------------------+-------------+--------------+-------------+
| Share capital | 408 | 264 | 333 |
+----------------------------------------+-------------+--------------+-------------+
| Share premium | 628 | 280 | 403 |
+----------------------------------------+-------------+--------------+-------------+
| Share option reserve | - | 5 | 4 |
+----------------------------------------+-------------+--------------+-------------+
| Merger reserve | 370 | 370 | 370 |
+----------------------------------------+-------------+--------------+-------------+
| Foreign currency translation reserve | 24 | 17 | 20 |
+----------------------------------------+-------------+--------------+-------------+
| Accumulated losses | (1,591) | (1,374) | (1,374) |
+----------------------------------------+-------------+--------------+-------------+
| Total equity | (161) | (438) | (244) |
+----------------------------------------+-------------+--------------+-------------+
| | | | |
+----------------------------------------+-------------+--------------+-------------+
| Non-current liabilities | | | |
+----------------------------------------+-------------+--------------+-------------+
| Amount owing to director | - | 318 | - |
+----------------------------------------+-------------+--------------+-------------+
| Bank loan | - | 81 | 29 |
+----------------------------------------+-------------+--------------+-------------+
| Total non-current liabilities | - | 399 | 29 |
+----------------------------------------+-------------+--------------+-------------+
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (continued)
+------------------------------------+-------------+-------------+------------+
| | | | |
+------------------------------------+-------------+-------------+------------+
| | 30 June | 30 June | 31 |
| | | | December |
+------------------------------------+-------------+-------------+------------+
| | 2010 | 2009 | 2009 |
+------------------------------------+-------------+-------------+------------+
| | (Unaudited) | (Unaudited) | (Audited) |
+------------------------------------+-------------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+-------------+-------------+------------+
| Current liabilities | | | |
+------------------------------------+-------------+-------------+------------+
| Excess of progress billings over | | | |
+------------------------------------+-------------+-------------+------------+
| contract work-in-progress | - | - | 8 |
+------------------------------------+-------------+-------------+------------+
| Trade payables | 169 | 55 | 265 |
+------------------------------------+-------------+-------------+------------+
| Other payables | 212 | 137 | 165 |
+------------------------------------+-------------+-------------+------------+
| Amount owing to directors | 599 | 190 | 792 |
+------------------------------------+-------------+-------------+------------+
| Convertible loan | 491 | 416 | 463 |
+------------------------------------+-------------+-------------+------------+
| Derivative financial instrument | 20 | 52 | 20 |
+------------------------------------+-------------+-------------+------------+
| Bank loan | 220 | 103 | 202 |
+------------------------------------+-------------+-------------+------------+
| Bank overdraft - secured | 101 | 94 | 87 |
+------------------------------------+-------------+-------------+------------+
| Total current liabilities | 1,812 | 1,047 | 2,002 |
+------------------------------------+-------------+-------------+------------+
| Total liabilities | 1,812 | 1,446 | 2,031 |
+------------------------------------+-------------+-------------+------------+
| Total equity and liabilities | 1,651 | 1,008 | 1,787 |
+------------------------------------+-------------+-------------+------------+
| | | | |
+------------------------------------+-------------+-------------+------------+
| | | | |
+------------------------------------+-------------+-------------+------------+
KENETICS GROUP LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR 6 MONTHS ENDED 30 JUNE 2010
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| | Attributable to owners of the Company | | | | |
+---------------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+----------+---------------------+----------+-----------+
| | | | | | | | Equity | | | | | | | | | | | | |
| | | | | | | | component | | | | Foreign | | | | | | | | |
| | | | | | Share | | of | | | | currency | | | | Total | | Non- | | |
| | Sharecapital | | Share | | option | | convertible | | Merger | | translation | | Accumulated | | | | controllinginterest | | Total |
| Group | | | premium | | reserve | | loan | | reserve | | reserve | | losses | | | | | | equity |
| | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
| | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Balance as | | | | | | | | | | | | | | | | | | | |
| at 01/01/09 | 264 | | 280 | | 3 | | 16 | | 370 | | 21 | | (1,186) | | (232) | | - | | (232) |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Share | - | | - | | 2 | | | | | | | | - | | 2 | | | | 2 |
| option | | | | | | | - | | - | | - | | | | | | - | | |
| granted | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Equity | | | | | | | | | | | | | | | | | | | |
| component | - | | - | | - | | (16) | | - | | | | 16 | | | | - | | |
| of | | | | | | | | | | | - | | | | - | | | | - |
| convertible | | | | | | | | | | | | | | | | | | | |
| loan | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Total | | | | | | | | | | | (4) | | | | (208) | | | | |
| comprehensive | | | | | | | | | | | | | | | | | | | |
| expense for | - | | - | | - | | - | | - | | | | (204) | | | | - | | (208) |
| the period | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Balance as | 264 | | 280 | | 5 | | - | | 370 | | 17 | | (1,374) | | (438) | | - | | (438) |
| at 30/06/09 | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Share | - | | - | | (1) | | | | | | | | | | (1) | | - | | (1) |
| options | | | | | | | - | | - | | - | | - | | | | | | |
| granted | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Equity | | | | | | | | | | | | | | | (16) | | | | (16) |
| component | - | | - | | | | | | | | | | (16) | | | | - | | |
| of | | | | | - | | - | | - | | - | | | | | | | | |
| convertible | | | | | | | | | | | | | | | | | | | |
| loan | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Issue of | | | | | | | | | | | | | | | | | | | |
| ordinary | 69 | | 123 | | - | | - | | - | | - | | - | | 192 | | - | | 192 |
| shares | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Total | | | | | | | | | | | | | | | | | | | |
| comprehensive | - | | - | | - | | - | | - | | 3 | | 16 | | 19 | | - | | 19 |
| income for | | | | | | | | | | | | | | | | | | | |
| the period | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Balance as | | | | | | | | | | | | | | | | | | | |
| at 31/12/09 | 333 | | 403 | | 4 | | - | | 370 | | 20 | | (1,374) | | (244) | | - | | (244) |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Share | - | | - | | (4) | | - | | - | | - | | - | | (4) | | - | | (4) |
| options | | | | | | | | | | | | | | | | | | | |
| granted | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Issue of | | | | | | | | | | | | | | | | | | | |
| ordinary | 75 | | 225 | | | | - | | | | | | - | | 300 | | - | | 300 |
| shares | | | | | - | | | | - | | - | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Total | - | | - | | | | | | | | | | (217) | | | | | | |
| comprehensive | | | | | - | | - | | - | | | | | | (213) | | | | |
| expense for | | | | | | | | | | | 4 | | | | | | - | | (213) |
| the period | | | | | | | | | | | | | | | | | | | |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
| Balance as | | | | | | | | | | | | | | | | | | | |
| at 30/06/10 | 408 | | 628 | | - | | - | | 370 | | 24 | | (1,591) | | (161) | | - | | (161) |
+---------------+--------------+----------+---------+----------+---------+----------+-------------+----------+---------+----------+-------------+----------+----------------+----------+--------------+----------+---------------------+----------+-----------+
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
+--------------------------------------+--------------+-------------+------------+
| | | | |
+--------------------------------------+--------------+-------------+------------+
| | 6 months | 6 months | 12 months |
+--------------------------------------+--------------+-------------+------------+
| | Ended | Ended | Ended |
+--------------------------------------+--------------+-------------+------------+
| | 30 June | 30 June | 31 |
| | | | December |
+--------------------------------------+--------------+-------------+------------+
| | 2010 | 2009 | 2009 |
+--------------------------------------+--------------+-------------+------------+
| | (Unaudited) | (Unaudited) | (Audited) |
+--------------------------------------+--------------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+--------------+-------------+------------+
| Cash flows from operating activities | | | |
+--------------------------------------+--------------+-------------+------------+
| Loss before income tax | (216) | (203) | (205) |
+--------------------------------------+--------------+-------------+------------+
| | | | |
+--------------------------------------+--------------+-------------+------------+
| Adjustments for: | | | |
+--------------------------------------+--------------+-------------+------------+
| Depreciation | 21 | 25 | 51 |
+--------------------------------------+--------------+-------------+------------+
| Interest expense | 43 | 18 | 58 |
+--------------------------------------+--------------+-------------+------------+
| Interest income | - | (1) | - |
+--------------------------------------+--------------+-------------+------------+
| Provision for diminution of | | | |
| investment in | | | |
+--------------------------------------+--------------+-------------+------------+
| subsidiary | (4) | - | - |
+--------------------------------------+--------------+-------------+------------+
| Share options expenses | - | 2 | 1 |
+--------------------------------------+--------------+-------------+------------+
| Loss arising on derivative financial | - | 52 | 20 |
| instrument | | | |
+--------------------------------------+--------------+-------------+------------+
| Unrealised exchange loss | 18 | 41 | 61 |
+--------------------------------------+--------------+-------------+------------+
| Cash outflow before working capital | (138) | (66) | (14) |
| changes | | | |
+--------------------------------------+--------------+-------------+------------+
| (Increase)/decrease in contract | 194 | (161) | (495) |
| work-in-progress | | | |
+--------------------------------------+--------------+-------------+------------+
| (Increase)/decrease in trade and | 241 | (156) | |
| other | | | (283) |
| receivables | | | |
+--------------------------------------+--------------+-------------+------------+
| Decrease/(increase) in inventories | (106) | 1 | (217) |
+--------------------------------------+--------------+-------------+------------+
| Increase/(decrease) in trade and | | 64 | |
| other | (103) | | 271 |
| payables | | | |
+--------------------------------------+--------------+-------------+------------+
| Cash generated from/(used in) | 88 | (318) | (738) |
| operations | | | |
+--------------------------------------+--------------+-------------+------------+
| Interest paid | (8) | (3) | (13) |
+--------------------------------------+--------------+-------------+------------+
| Income tax paid | (1) | (1) | 17 |
+--------------------------------------+--------------+-------------+------------+
| Net cash flows generated from/(used | 79 | (322) | |
| in) | | | (734) |
| operations | | | |
+--------------------------------------+--------------+-------------+------------+
| | | | |
+--------------------------------------+--------------+-------------+------------+
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (continued)
+---------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------+-------------+-------------+------------+
| | 6 months | 6 months | 12 months |
+---------------------------------------+-------------+-------------+------------+
| | Ended | Ended | Ended |
+---------------------------------------+-------------+-------------+------------+
| | 30 June | 30 June | 31 |
| | | | December |
+---------------------------------------+-------------+-------------+------------+
| | 2010 | 2009 | 2009 |
+---------------------------------------+-------------+-------------+------------+
| | (Unaudited) | (Unaudited) | (Audited) |
+---------------------------------------+-------------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------+-------------+-------------+------------+
| Cash flows from investing activities | | | |
+---------------------------------------+-------------+-------------+------------+
| Purchase of plant and equipment | (109) | (20) | (147) |
+---------------------------------------+-------------+-------------+------------+
| Interest received | - | 1 | 1 |
+---------------------------------------+-------------+-------------+------------+
| Net cash flows (used in)/ generated | | (19) | |
| from | (109) | | (146) |
| investing activities | | | |
+---------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------+-------------+-------------+------------+
| Cash flows from financing activities | | | |
+---------------------------------------+-------------+-------------+------------+
| Receipt of loan from director | 45 | 258 | 513 |
+---------------------------------------+-------------+-------------+------------+
| Issue of ordinary shares | - | - | 193 |
+---------------------------------------+-------------+-------------+------------+
| Repayment of hire purchase loan | - | (1) | (1) |
+---------------------------------------+-------------+-------------+------------+
| Proceeds from bank loan | 33 | 208 | 313 |
+---------------------------------------+-------------+-------------+------------+
| Repayment of bank loan | (59) | (25) | (81) |
+---------------------------------------+-------------+-------------+------------+
| Difference of fixed deposit balance | | | |
| due | (1) | - | (1) |
| to accumulation of interest | | | |
+---------------------------------------+-------------+-------------+------------+
| Net cash flows generated from | 18 | 440 | 936 |
| financing activities | | | |
+---------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------+-------------+-------------+------------+
| Net increase/(decrease) in cash in | | | |
| hand | (12) | 99 | 56 |
| and at bank | | | |
+---------------------------------------+-------------+-------------+------------+
| Effect of exchange rate changes | (2) | 9 | 6 |
+---------------------------------------+-------------+-------------+------------+
| Cash in hand and at bank at beginning | (69) | (131) | (131) |
| of period | | | |
+---------------------------------------+-------------+-------------+------------+
| Cash in hand and at bank at end of | (83) | (23) | (69) |
| period | | | |
+---------------------------------------+-------------+-------------+------------+
| Fixed deposit | 128 | 112 | 119 |
+---------------------------------------+-------------+-------------+------------+
| Bank overdraft | 101 | 94 | 87 |
+---------------------------------------+-------------+-------------+------------+
| Cash and cash equivalents per balance | 146 | 183 | 137 |
| sheet | | | |
+---------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------+-------------+-------------+------------+
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
1. Business of Kenetics Group Limited
The Company was incorporated in Jersey on 22 June 2006. The condensed
consolidated financial information of the Company for the six months ended 30
June 2010 comprise the Company and its subsidiaries, Kenetics Innovations Pte
Ltd and Kenetics Innovations (Beijing) Co., Ltd.
The registered office of the Company is located at Walker House, PO Box 498,
28-34 Hill Street, St Helier, Jersey JE4 5TF.
The Group is in the business of electronics design and manufacturing and
producing of electrical and electronic goods.
2. Basis of preparation of interim condensed consolidated financial
information
These interim consolidated financial statements are for the six months ended 30
June 2010 and have been prepared in accordance with International Accounting
Standard 34 "Interim Financial Statements". The accounting policies applied are
consistent with International Financial Reporting Standards (IFRS) adopted for
use by the European Union. The accounting policies and methods of computation
used in the interim consolidated financial statements are consistent with those
used in the Annual Report for 2009 and are expected to be applied for the year
ended 31 December 2010.
The interim results for the six months ended 30 June 2010 are not necessarily
indicative of the results to be expected for the full year 2010
3. Share Capital
On 16 June 2010, 7.5 million new ordinary shares for a total consideration of
GBP300,000 were issued to provide for additional working capital for the LTA
projects. The share premium for the issue amounts to GBP225,000.
For details of the above, please refer to the announcement made by the Company
on 21 June 2010.
4. Loss per share
Basic loss per share has been calculated on the basis of the losses
attributable to ordinary shareholders divided by 26,915,219 (30/06/09:
26,349,466, 31/12/09: 27,480,973), being the weighted average number of ordinary
shares issued by the Company.
In accordance with IAS 33 and as the Group has reported a loss for the period,
the potential ordinary shares are not dilutive.
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
5. Exchange rates
The reporting currency of the Company is deemed to be Sterling Pounds.
The functional currencies of Kenetics Innovations Pte Ltd and Kenetics
Innovations (Beijing) Co Ltd are in Singapore dollars and Chinese Renminbi
respectively. The following exchange rates have been used in preparing this
financial information:
+------------------+------------------+------------------+
| | | |
+------------------+------------------+------------------+
| | S$1 = GBP | RMB1 = GBP |
+------------------+------------------+------------------+
| 30 June 2010 | 0.47441 | 0.09773 |
+------------------+------------------+------------------+
| Average rates | 0.47145 | 0.09675 |
+------------------+------------------+------------------+
6. Income tax
There was no income tax expense for the 6 months ended 30 June 2010, as the
Group has been loss making during this period. The income tax expense for the 6
months ended 30 June 2010 amounted to GBP662 was an under-provision of tax in
prior year.
7. Segment reporting
The Group has adopted IFRS 8 which is required for all annual reports and
interim financial statements starting 1 January 2009 or later.
For management purposes, the Group is currently organised around differences in
regulatory environment and geographical areas; and has three reportable segments
as follows:
I. The Singapore segment designs, manufactures and produce all kinds of
electrical and electronic goods.
II. The China segment imports and exports goods and services, and to
act as an agent.
III. The UK segment provides management services to entities in the
group.
Except as indicated above, no operating segments have been aggregated to form
the above reportable operating segments.
Group financing (including finance costs) is managed on a group basis and is not
allocated to operating segments. Transfer prices between operating segments are
on an arm's length basis in a manner similar to transactions with third parties.
KENETICS GROUP LIMITED
FOR 6 MONTHS ENDED 30 JUNE 2010
+---------------+----------+---------+-----+----+----------+----------+---------+----------+----------+----------+---------+------+----------+----------+----------+----------+---------+------+----------+----------+----------+----------+---------+----+------+
| Segment reporting (cont'd) | | | | | | | | | |
+------------------------------------------+--------------------------+--------------------+----------+---------------------------+----------+-------------------------------------------------+----------+-----------------------------------------------+------+
| Operating | UK | | Singapore | | China | | Elimination | | Consolidated Total |
| Segments | | | | | | | | | |
+---------------+-------------------------------+----------+-------------------------------+----------+-------------------------------------------------+----------+-------------------------------------------------+----------+--------------------------------+
| | 6 | 6 | 12 | | 6 | 6 | 12 | | 6 | 6 | 12 | | 6 | 6 | 12 | | 6 | 6 | 12 |
| | Months | Months | Months | | Months | Months | Months | | Months | Months | Months | | Months | Months | Months | | Months | Months | Months |
| | Ended | Ended | Ended | | Ended | Ended | Ended | | Ended | Ended | Ended | | Ended | Ended | Ended | | Ended | Ended | Ended |
| | 30 | 30 | 31 | | 30 | 30 | 31 | | 30 | 30 | 31 | | 30 | 30 | 31 | | 30 | 30 | 31 |
| | June2010 | June | December | | June2010 | June | December | | June2010 | June | December | | June2010 | June | December | | June2010 | June | December |
| | | 2009 | 2009 | | | 2009 | 2009 | | | 2009 | 2009 | | | 2009 | 2009 | | | 2009 | 2009 |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 | | GBP'000 | GBP'000 | GBP'000 |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| Total | - | - | - | | 472 | 570 | 1,422 | | - | - | - | | - | - | - | | 472 | 570 | 1,422 |
| external | | | | | | | | | | | | | | | | | | | |
| revenue | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| Inter-segment | - | - | 198 | | - | - | - | | - | - | - | | - | - | (198) | | - | - | - |
| Revenue | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| Finance | - | - | - | | - | 1 | 1 | | - | - | - | | - | - | - | | - | 1 | 1 |
| Income | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| Depreciation | - | - | - | | 20 | 26 | 49 | | 1 | 1 | 2 | | - | (2) | - | | 21 | 25 | 51 |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| Unallocated | - | - | - | | - | - | - | | - | - | - | | - | - | - | | 43 | 17 | 58 |
| | | | | | | | | | | | | | | | | | | | |
| finance | | | | | | | | | | | | | | | | | | | |
| costs | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| Reportable | (166) | (112) | (80) | | (47) | 11 | (115) | | (7) | (26) | (41) | | 4 | (76) | 31 | | (216) | (203) | (205) |
| segment | | | | | | | | | | | | | | | | | | | |
| profit | | | | | | | | | | | | | | | | | | | |
| /(loss) | | | | | | | | | | | | | | | | | | | |
| before | | | | | | | | | | | | | | | | | | | |
| tax | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| Income | (1) | (1) | (1) | | - | - | 18 | | - | - | - | | - | - | - | | (1) | (1) | 17 |
| tax | | | | | | | | | | | | | | | | | | | |
| expense | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| Reportable | (167) | (113) | (81) | | (47) | 11 | (97) | | (7) | (26) | (41) | | 4 | (76) | 31 | | (217) | (204) | (188) |
| segment | | | | | | | | | | | | | | | | | | | |
| profit | | | | | | | | | | | | | | | | | | | |
| /(loss) | | | | | | | | | | | | | | | | | | | |
| after | | | | | | | | | | | | | | | | | | | |
| tax | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+----------+----------+----------+---------+----------+----------+----------+---------+----------------------------+----------+----------+---------+----------------------------+----------+----------+---------+-----------+
| | | | | | | | | | | | | | | | | | | | | | | | | | |
+---------------+----------+---------+-----+----+----------+----------+---------+----------+----------+----------+---------+------+----------+----------+----------+----------+---------+------+----------+----------+----------+----------+---------+----+------+
Kenetics Group Limited - Interim financial information
Six months ended 30 June 2010
7. Segment reporting (cont'd)
+--------------------------------+-------------------+------+-----------+----------+----------------+
| Geographical information | | | |
+--------------------------------+--------------------------+----------------------+----------------+
| | Sales to external customers |
+--------------------------------+------------------------------------------------------------------+
| | 6 months | 6 months | 12 months |
+--------------------------------+-------------------+------------------+---------------------------+
| | Ended | Ended | Ended |
+--------------------------------+-------------------+------------------+---------------------------+
| | 30 June | 30 June | 31 December |
+--------------------------------+-------------------+------------------+---------------------------+
| | 2010 | 2009 | 2009 |
+--------------------------------+-------------------+------------------+---------------------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-------------------+------------------+---------------------------+
| Asia Pacific | 387 | 489 | 1,262 |
+--------------------------------+-------------------+------------------+---------------------------+
| Europe | 80 | 78 | 154 |
+--------------------------------+-------------------+------------------+---------------------------+
| Others | 5 | 3 | 6 |
+--------------------------------+-------------------+------------------+---------------------------+
| | 472 | 570 | 1,422 |
+--------------------------------+-------------------+------------------+---------------------------+
| | | | | | |
+--------------------------------+-------------------+------+-----------+----------+----------------+
8. Nature of financial information
The interim financial information set out above is neither audited nor reviewed
and does not represent the statutory financial statements for Kenetics Group
Limited or for any of the entities comprising the Kenetics Group for the period
ended 30 June 2010. The figures for the year ended 31 December 2009 were
extracted from the consolidated financial statements which have been presented
to the shareholders. The auditors' report on those financial statements was
unqualified.
The Board approved the interim financial information for the period ended 30
June 2010 on 10 September 2010.
These interim results are available on the Company's website
www.kenetics-group.com.
9. Subsequent event
On 1 July 2010, the Company entered into an interest-bearing redeemable
convertible loan agreement with an external party, to obtain a principal loan of
GBP300,000. The principal loan will be due for repayment on 30 June 2012 and the
interest will be payable monthly at the rate of 12% per annum. The loan may be
converted on written notification at any time after the expiry of the loan in
whole or in part provided the always that the total number of shares shall not
at any time exceed 1% of the Borrower's total shareholding.
The Company has received the loan amount of GBP300,000 in cash.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLGDCUXBBGGG
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