TIDMZBO
RNS Number : 1931A
Zibao Metals Recycling Holdings PLC
22 December 2017
22 December 2017
Zibao Metals Recycling Holdings Plc
("Zibao" or "the Company" or "the Group")
Half Year Results
Zibao Metals Recycling Holdings Plc (AIM: ZBO), a Hong Kong
based, recyclable metal trader and processor is pleased to announce
its half year results for the six months ended 30 September
2017.
The Group figures are presented in Hong Kong Dollars.
Highlights
-- Revenue increased by 22% to HKD 479 million from HKD 394 million.
-- Gross profit decreased by 10% to HKD 3.83 million from HKD
4.26 million while selling and distribution expenses have increased
marginally to HKD 79,500 from HKD 53,000.
-- Profit before tax decreased 6.8% to HKD 0.47 million (2016:
HKD 0.51 million) mainly due to tighter margins caused by the
difficult trading conditions. The decrease was partially offset by
a reduction in administration expenses of HKD 0.41 million.
-- The closing cash position at period end was HKD 3.13 million (2016: HKD 0.87 million).
Joe Zhou, Zibao Chairman commented:
"The market conditions in the PRC and Europe continue to be
challenging. However, we continue to control costs and manage the
credit risks prudently. We believe that the Group is well
positioned to benefit from a future recovery."
For further information please contact:
Zibao Metals Recycling Holdings PLC Tel: +852 2769 7662
Wenjie "Joe" Zhou, Chairman www.zibaometals.com
Jianfeng "Eddy" Li, Chief Executive Officer
Chor Wei "Alan" Ong, Finance Director
SPARK Advisory Partners Limited (Nominated
Adviser) +44 203 368 3551
Mark Brady/Neil Baldwin
About Zibao Metals Recycling Holdings PLC
Established in its current form in 2009, and incorporated as a
UK registered company in 2014, Zibao is a trader and processor in
non-ferrous metals - principally aluminium and copper. It imports
these from a variety of international sources or indirectly from
importers based in the People's Republic of China ('PRC') and
resells them into the PRC to (a) operators who process them into a
'clean' form for sale to foundries (b) Customers who buy them in
clean form. In addition, Zibao also operates a non-ferrous metal
processing and stockholding yard based in Nanhai. The purchases by
the yard are from importers based in the PRC and the customers are
based in PRC.
The Company was formed by Wenjie 'Joe' Zhou, whose family has
had interests in recyclable metals for nearly twenty years. During
this period he has established good relationships with a range of
overseas suppliers, importers based in the PRC and developed an
in-depth knowledge of the PRC rules and regulations for the metals
recycling industry.
Metals recycling is a multi-million pounds global industry and
China is the world's leading importer of copper and aluminium and
needs recycling to supplement its growing demand.
Chairman's Statement
We are pleased to report the Company's interim results for the
six months ended 30 September 2017, in which Zibao further
developed the business and continued to lay the foundation on which
the business's future growth will be built.
Results
The Group's turnover was HKD 479 million, an increase of
approximately 22% on the corresponding period last year, mainly due
to an increasing demand from both new and existing customers.
Profit before tax decreased during the period by 6.8% to HKD 0.47
million reflecting lower gross profit margins due to competition. A
factor in the increase in orders was the slight loosening of credit
in the PRC. Despite this, the overall PRC economy remains weak and
margins continue to be tight. As a result, the Group's gross profit
margins on sales have fallen due to increased competition from
other suppliers.
Suppliers
Six new suppliers have been secured in the first half of the
year, further strengthening the overall supplier base. Each
supplier is vetted by the Group before becoming an approved trading
partner. The Group seeks to cultivate strong and long-term
relationships with its suppliers, helping maintain product quality
and promoting integrity and reliability throughout its supply
chain.
Customers
Ten new customers were added in the first half of the year and
at the same time the Group also saw existing customers increase
their order volumes.
Outlook
Market conditions in the PRC and Europe for the business remain
challenging. The Group will continue its policy of tightly
controlling costs and managing the credit risk prudently.
The Board believes that the Group is well positioned to benefit
from any future recovery.
The Directors are currently carrying out a review of our current
business, with a view to ensuring the Group is well placed to take
advantage of any market recovery, whilst also ensuring that any
potential future risks are mitigated as best as possible. In
addition, the Board would consider looking at other opportunities
which would add to our existing business; this may involve the
Group acquiring complementary businesses, should suitable
opportunities arise, although there is nothing in contemplation at
this time.
Finally, I would like to take this opportunity to thank our long
standing customers and suppliers as well as our employees for their
loyalty and hard work.
Joe Zhou
Chairman
22 December 2017
Consolidated Statement of Comprehensive Income
6 months 6 months
to 30 September to 30 September
2017 2016 Year to
31 March
Notes 2017
HKD'000 HKD'000 HKD'000
UNAUDITED UNAUDITED AUDITED
Continuing operations
Revenue 3 478,904 394,128 808,873
Cost of sales (475,075) (389,873) (800,804)
-------------- -------------- --------------
Gross profit 3,829 4,255 8,069
Other revenues 6 1 368
Selling and distribution expenses (79) (53) (115)
Administrative expenses (3,283) (3,695) (7,213)
-------------- -------------- --------------
Operating profit 473 508 1,109
Finance cost - - -
-------------- -------------- --------------
Profit before tax 473 508 1,109
Income tax expense 10 10 (80)
-------------- -------------- --------------
Profit and total comprehensive
income for the period 483 518 1,029
Profit and total comprehensive
income for the year attributable
to the owners of the Company 483 518 1,029
Earnings per share 5 HKD HKD HKD
Basic 0.004 0.004 0.008
Diluted 0.004 0.004 0.008
Consolidated Statement of Financial Position
Notes As at 30 September 2017 As at 30 September 2016 As at 31 March 2017
HKD'000 HKD'000 HKD'000
UNAUDITED UNAUDITED AUDITED
Assets
Non-Current Assets
Property, plant and equipment 37,395 41,222 40,475
Intangible assets 1,507 1,608 1,557
-------------- -------------- --------------
38,902 42,830 42,032
-------------- -------------- --------------
Current Assets
Inventories 21,620 32,333 35,153
Trade receivables 14,840 5,908 1,685
Prepayments, deposits and other
receivables 9,425 5,675 5,661
Cash and cash equivalents 6 3,131 870 1,288
-------------- -------------- --------------
49,016 44,786 43,787
-------------- -------------- --------------
Total Assets 87,918 87,616 85,819
Equity and liabilities
Equity attributable to owners of
the company
Share capital 7 15,549 15,549 15,549
Share premium 42,167 42,167 42,167
Group reorganisation reserve (527) (527) (527)
Share based payments reserve 662 662 662
Foreign Exchange reserve (3,394) (1,265) (1,267)
Retained earnings 8,711 7,717 8,228
-------------- -------------- --------------
Total Equity 63,168 64,303 64,812
-------------- -------------- --------------
Non-current liabilities
Deferred tax 148 168 157
-------------- -------------- --------------
148 168 157
-------------- -------------- --------------
Current liabilities
Trade payables 9,001 9,649 6,106
Accrued liabilities and other
payables 5,971 4,102 5,074
Amount due to a director - - -
Tax payable 9,630 9,394 9,670
Dividends payable - - -
-------------- -------------- --------------
24,602 23,145 20,850
-------------- -------------- --------------
Total Liabilities 24,750 23,313 21,007
-------------- -------------- --------------
Total Equity and Liabilities 87,918 87, 616 85,819
Consolidated Statement of Cash Flows
6 months to 30 6 months to 30 Year to 31 March 2017
Notes September 2017 September 2016
HKD'000 HKD'000 HKD'000
UNAUDITED UNAUDITED AUDITED
Cash flows from
operating activities
Net cash from operating activities (786) (6,529) (5,387)
Taxation (40) 370 474
---------- ---------- ----------
Net cash (used in)/ generated from
operating activities (826) (6,159) (4,913)
Investing activities
Addition of property, plant and equipment (14) (10) (27)
Disposals of property, - - -
plant and equipment
Interest received - - -
Acquisition of - - -
subsidiary net of cash
acquired
---------- ---------- ----------
Net generated from / (cash used) in
investing activities (14) (10) (27)
---------- ---------- ----------
Financing activities
Dividend paid - - -
Net proceeds from the - - -
issue of Ordinary
shares
---------- ---------- ----------
Net cash from / (used - - -
in) in financing
activities
---------- ---------- ----------
Taxation - - -
Net increase / (decrease) in cash and cash
equivalents (840) (6,169) (4,940)
Cash and cash equivalents at beginning of
the period 1,288 5,289 5,289
Effect of foreign exchange rate changes 2,683 1,750 939
---------- ---------- ----------
Cash and cash equivalents at the end of the
period 3,131 870 1,288
Represented by:
Bank balances and cash 3,131 870 1,288
---------- ---------- ----------
3,131 870 1,288
Notes for Consolidated Statement of Cash Flows
6 months to 30 September 6 months to 30
2017 September 2016 Year to 31 March 2017
HKD'000 HKD'000 HKD'000
UNAUDITED UNAUDITED AUDITED
Profit before income tax 473 508 1,109
Adjustments for:
Depreciation on property, plant and
equipment 405 768 941
Interest income 6 - -
Amortisation 50 50 101
Foreign Exchange Difference (2,127) (1,400) -
(Increase) / decrease in inventories 13,534 (6,281) (9,101)
Decrease/(Increase) in trade
receivables (13,155) (3,245) 978
Decrease / (Increase) in prepayments,
deposits and other receivables (3,764) 2,909 3,015
Increase / (decrease) in trade
payables 2,896 (317) (3,860)
Increase / (decrease) in accrued
liabilities and other payables 896 479 1,430
---------- ---------- ----------
Cash generated from / (used in)
operations (786) (6,529) (5,387)
Consolidated Statement of Changes in Equity
Share Share Share Group Foreign Retained Total
Capital premium based Reorgan-isation exchange Earnings
payment Reserve reserve
reserves
HKD'000 HKD'000 HKD'000 HKD'000 HKD'000 HKD'000 HKD'000
As at 31 March
2016 15,549 42,167 662 (527) 135 7,199 65,185
Total comprehensive
income for the
period - - - - - 518 518
Foreign exchange
difference - - - - (1,400) - (1,400)
---------- ---------- ---------- ---------- ---------- ---------- ----------
As at 30 September
2016 15,549 42,167 662 (527) (1,265) 7,717 64,303
Total comprehensive
income for the
period - - - - - 511 511
Foreign exchange
difference - - - - (2) - (2)
---------- ---------- ---------- ---------- ---------- ---------- ----------
As at 31 March
2017 15,549 42,167 662 (527) (1,267) 8,228 64,812
Total comprehensive
income for the
period - - - - - 483 483
Foreign exchange
difference - - - - (2,127) - (2,127)
---------- ---------- ---------- ---------- ---------- ---------- ----------
15,549 42,167 662 (527) (3,394) 8,711 63,168
---------- ---------- ---------- ---------- ---------- ---------- ----------
Notes to the interim financial information
1. General information
Zibao Metals Recycling Holdings Plc is a company incorporated in
England on 9 October 2013 under the Companies Act 2006 but
domiciled in Hong Kong. It was listed on the AIM market on 20 June
2014. The Group's principal activity is that of trading and
processing scrap metals.
2. Basis of preparation and significant accounting policies
This interim report, which incorporates the financial
information of the Company, has been prepared using the historical
cost convention, on a going concern basis and in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union, using accounting policies which are consistent
with those set out in the financial statements for the year ended
31 March 2017.
Taxes
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
Standards and Interpretations adopted with no material effect on
financial statements
There are no IFRS or IFRIC interpretations that are effective
for the first time in this financial period that would be expected
to have a material impact on the Group.
Standards, interpretations and amendments to published standards
that are not yet effective.
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
financial period beginning 1 April 2018 and have not been early
adopted:
Reference Title Summary Application date Application
of standard date of
Group
---------- ----------------- ------------------------------- ------------------- -----------
IFRS 9 Financial Revised standard for Periods commencing 1 April
Instruments accounting for financial on or after 1 2018
instruments January 2018
---------- ----------------- ------------------------------- ------------------- -----------
IFRS 15 Revenue from Specifies how and when Periods commencing 1 April
contracts to recognise revenue on or after 1 2018
with customers from contracts as well January 2018
as requiring more informative
and relevant disclosures
---------- ----------------- ------------------------------- ------------------- -----------
IFRS 16 Leases Original issue Periods commencing 1 April
on or after 1 2019
January 2019
---------- ----------------- ------------------------------- ------------------- -----------
IFRS 17 Insurance IFRS 17 Insurance Contracts Periods Commencing 1 April
Contracts on or after 1 2021
January 2021
---------- ----------------- ------------------------------- ------------------- -----------
IFRIC 22 Foreign Currency Interpretation that Periods commencing 1 April
Transactions addresses foreign currency on or after 1 2018
and Advance transactions or parts January 2018
Consideration transactions
---------- ----------------- ------------------------------- ------------------- -----------
The directors anticipate that the adoption of these standards
and the interpretations in future periods will have no material
impact on the financial statements of the Group.
3. Segmental reporting
In the opinion of the directors, the Group has one class of
business, being the trading of scrap materials. The Group's primary
reporting format is determined by the geographical segment
according to the location of its establishments. There is currently
only one geographic reporting segment, which is China. All revenues
and costs are derived from the single segment.
4. Directors' remuneration
6 months 6 months
to 30 September to 30 September Year to 31
2017 2016 March 2017
Salaries, Salaries, Salaries,
fees and fees and fees and
options options options
HKD'000 HKD'000 HKD'000
UNAUDITED UNAUDITED AUDITED
Wenjie Zhou 120 240 360
Jianfeng Li 120 120 240
Alan Ong 58 67 134
Chin Phang Kwok 58 67 134
Peter Greenhalgh 58 67 134
Ajay Rajpal 58 66 134
-------------- -------------- --------------
472 627 1,136
_________ _________ _________
5. Earnings per share
Profit per share data is based on the Group profit for the
period and the weighted average number of shares in issue.
6 months to 30 September 6 months to 30 September
2017 2016 Year to 31 March 2017
HKD'000 HKD'000 HKD'000
UNAUDITED UNAUDITED AUDITED
Profit for the period
attributable to owners of
Company 483 518 1,029
Weighted average number of
ordinary shares for the
purposes of basic earnings
per share (000's) 122,010 122,010 122,010
Weighted average number of
ordinary shares for the
purposes of diluted
earnings per share
(000's) 125,453 125,453 125,453
6 months to 30 September 6 months to 30 September
2017 2016 Year to 31 March 2017
HKD'000 HKD'000 HKD'000
UNAUDITED UNAUDITED AUDITED
Basic earnings per share
Total basic earnings per
share 0.004 0.004 0.008
Diluted earnings per share
Total basic and diluted earnings per share 0.004 0.004 0.008
---------- ---------- ----------
6. Cash and cash equivalents Group
As at 30 As at 30 As at 31
September September March 2017
2017 2016
HKD'000 HKD'000 HKD'000
UNAUDITED UNAUDITED AUDITED
Cash and bank balances 3,131 870 1,288
-------------- -------------- --------------
Cash and bank balances
as presented in balance
sheets 3,131 870 1,288
Add: Pledged fixed deposits - - -
-------------- -------------- --------------
Cash and cash equivalents
as presented in consolidated
statement of cash flows 3,131 870 1,288
_________ _________ _________
7. Share capital
The issued share capital as at 30 September 2017 was 122,010,000
ordinary shares of GBP0.01 each (30 September 2016: 122,010,000
ordinary shares of GBP0.01, 31 March 2017: 122,010,000 ordinary
shares of GBP0.01)
8. Related-party transactions
During the period, the Group entered into the following trading
transactions with related parties that are not members of the
Group:
Sales of goods
----------------- -----------------------------------------------------
6 months to 30 6 months to 30 Year to 31 March
September 2017 September 2016 2017
HKD' HKD' HKD'
000 000 000
----------------- ---------------- ---------------- -----------------
Wang Kei Yip
Development
Limited 4,387 15,777 31,541
----------------- ---------------- ---------------- -----------------
The following balances were outstanding at the end of the
period:
Amounts owed by related Amounts owed to related
parties parties
----------------- --------------------------------------- ------------------------------------
As at 30 As at 30 As at As at 30 As at 30 As at
September September 31 March September September 31 March
2017 2016 2017 2017 2016 2017
HKD' HKD' HKD' HKD' HKD' HKD'
000 000 000 000 000 000
----------------- ------------ ------------ ----------- ----------- ----------- ----------
Wang Kei Yip
Development
Limited - - - 597 241 237
----------------- ------------ ------------ ----------- ----------- ----------- ----------
Ben Lee is the brother in law of the director, and is a director
of Wang Kei Yip Development Limited. Wang Kei Yip Development
Limited is therefore a related party.
The amount due to Wenjie Zhou was unsecured, interest-free and
had no fixed term of repayment. All the above transactions were
done at arm's length.
9. The unaudited results for the period ended 30 September 2017
do not constitute statutory accounts within the meaning of Section
434 of the Companies Act 2006. The comparative figures for the
period ended 31 March 2017 were extracted from the audited
financial statements which contained an unqualified audit report
and did not contain statements under Sections 498 to 502 of the
Companies Act 2006.
10. This interim financial statement will be, in accordance with
the AIM Rules for Companies, available shortly on the Company's
website at www.zibaometals.com.
11. The Company is incorporated in the UK but is treated as a
Hong Kong resident for tax purposes.
Macau and Hong Kong tax has been provided at a rate of 12% and
16.5% respectively.
There was deferred taxation in respect of the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR KMMZZRZMGNZG
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