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ZBO - Zibao Metals Recycling Holdings News Story

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Sector
Basic Materials
Size
Micro Cap
Market Cap £488k
Enterprise Value £-251k
Revenue £33.9m
Position in Universe 1820th / 1838

Zibao Metals Rec Hol - Half Year Results

Fri 22nd December, 2017 9:06am
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 totighter 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

Wenjie "Joe" Zhou, Chairman

Jianfeng "Eddy" Li, Chief Executive Officer

Chor Wei "Alan" Ong, Finance Director

SPARK Advisory Partners Limited (Nominated Adviser)

Mark Brady/Neil Baldwin

Tel: +852 2769 7662

www.zibaometals.com

+44 203 368 3551

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 479million, 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







Notes

6 months to 30 September 2017

6 months to 30 September 2016

Year to 31 March 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

UNAUDITED

HKD'000

UNAUDITED

HKD'000

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






Notes

6 months to 30 September 2017

6 months to 30 September 2016

Year to 31 March 2017



HKD'000

UNAUDITED

HKD'000

UNAUDITED

HKD'000

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 2017

6 months to 30 September 2016

Year to 31 March 2017



HKD'000

UNAUDITED

HKD'000

UNAUDITED

HKD'000

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 Capital

Share premium

Share based payment reserves

Group Reorgan-isation

Reserve

Foreign exchange reserve

Retained Earnings

Total


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

Application date of standard

Application date of Group

IFRS 9

Financial Instruments

Periods commencing on or after 1 January 2018

1 April 2018

IFRS 15

Revenue from contracts with customers

Periods commencing on or after 1 January 2018

1 April 2018

IFRS 16

Leases

Original issue

Periods commencing on or after 1 January 2019

1 April 2019

IFRS 17

Insurance Contracts

IFRS 17 Insurance Contracts

Periods Commencing on or after 1 January 2021

1 April 2021

IFRIC 22

Foreign Currency Transactions and Advance Consideration

Interpretation that addresses foreign currency transactions or parts transactions

Periods commencing on or after 1 January 2018

1 April 2018

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 to 30 September 2017

6 months to 30 September 2016

Year to 31 March 2017


Salaries, fees and options

Salaries, fees and options

Salaries, fees and 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 2017

6 months to 30 September 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 2017

6 months to 30 September 2016

Year to 31 March 2017


HKD'000

UNAUDITED

HKD'000

UNAUDITED

HKD'000

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 September 2017

As at 30 September 2016

As at 31 March 2017



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 0.01 each (30 September 2016: 122,010,000 ordinary shares of 0.01, 31 March 2017: 122,010,000 ordinary shares of 0.01)

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 September 2017

HKD'

000

6 months to 30 September 2016

HKD'

000

Year to 31 March 2017

HKD'

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 parties

Amounts owed to related parties

As at 30 September

2017

HKD'

000

As at 30 September

2016

HKD'

000

As at 31 March

2017

HKD'

000

As at 30 September

2017

HKD'

000

As at 30 September

2016

HKD'

000

As at 31 March

2017

HKD'

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
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