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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Glbal Lck Grp | LSE:GLOK | London | Ordinary Share | VGG393181034 | ORD NPV (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 1.125 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMGLOK
RNS Number : 3697S
Global Lock Safety (Intl) Grp CoLtd
23 September 2014
Global Lock Safety (International) Group Co., Limited
("Global Lock" or "Company")
Interim results for the six months ended 30 June 2014
Global Lock, the provider of security solutions to retailers and other organisations in China, is pleased to announce its unaudited interim results for the six months ended 30 June 2014.
The exchange rate on 23 September 2014 was GBP1 to RMB 10.0595.
Highlights:
l Revenue for the period RMB 41.73m (2013:RMB42.07m)
l Profit for the period RMB 2.31m (2013: profit 1.75m)
l Net assets (including non-controlling interest) of RMB 54.26m (2013: RMB 48.35m)
l Cash and cash equivalents RMB 5.02m (2013: RMB 5.48m )
l Loss per share RMB 0.003 (2013: loss per share RMB0.004)
Mr. Moxiang Li, Group CEO, commented: "I am pleased to be able to report our results for the 6 month period ended 30 June 2014. These results are pleasing as we have maintained a broadly similar level of revenue as the corresponding period in 2013 but at the same time increased our profit for the period by 32% to RMB 2.31m. This is largely attributable to the cost saving and operational efficiency measures that we have put in place over the last 12 months. As part of this. we are currently in the process of evaluating our AIM listing in order to ensure that it continues to be of benefit both to Global Lock and its shareholders. Further announcements will be made at the appropriate time."
Further Enquiries:
Global Lock Safety (International) Group
Mr. Moxiang LI, Chief Executive Officer Tel:+86 755 86556800 Mr. Andrew Gee, Non-Executive Director Tel:+44 777 565 3564 Allenby Capital Limited Tel: +44 203 328 5656
Mr. Nick Naylor
Mr. Alex Price
CHAIRMAN'S STATEMENT
As at June 30 2014, the Company's revenues were RMB41.73m, broadly in line with 2013's half year revenues of RMB 42.07m. As at June 30 2013, Global Lock had 72 branches, 31,165 customers and 1,022 employees. Theses compare with the first half year of 2013 as shown in the following table:
30 June 2014 30 June 2013 % increase No. of branches 72 72 0 ------------- ------------- ----------- No. of customers 31,165 26,833 16.1% ------------- ------------- ----------- No. of employees 1,022 1,191 -14.2% ------------- ------------- ----------- Revenues (RMB million) 41.73 42.07 -0.71% ------------- ------------- -----------
The improved performance in the first half year of 2014 is attributable to the following factors:
l a significant improvement in revenue quality due to strict control of receivables;
l better customer service following customer visits to gain feedback;
l staffing optimisation coupled with efficient performance assessment, and improved operational procedures as well as the simplification of approval processes;
l efficient execution of the branch incentive system and an overall upgrade of technology; and
l a general improvement in operational efficiency
Milestones and achievements
The Group held its Annual Planning Meeting in Changsha from 9 to 11 January 2014 to review the achievements of 2013 and to plan for 2014, as well as to determine the operating targets for the forthcoming year. Attendees included the Group's Chairman, members of Senior Management, and Branch Managers and accountants. Outstanding branches were rewarded for achieving exceptional profit levels, in meeting their operating targets and for attaining excellent security service levels. In addition, numbers of high-achieving individuals were also rewarded.
The Company completed the construction of its Master Alarm Response Centre located in Shenzhen, which now receives and handles alarms from all branches and issue instructions to guard patrols. The centre has the capacity to provide alarm response and processing services for more than 500,000 clients at the same time and has already resulted in cost savings. At the same time, alarm response efficiency is improving through the use of a real time video monitoring system. Global Lock believes that the Master Alarm Response Centre will become one of the largest in China, integrating front-end terminal alarm/monitoring servers, detectors, cameras and patrol guard intelligent terminals, back-end automatic command & control and video analysis system, cloud computing, data storage system, financial management system and client management systems to create a fully integrated platform.
Now that the center has been put into operation, the Board is currently reviewing the staffing of its branches and plans to combine the role of alarm patrol with alarm technicians. The Board anticipates that this will result in a reduction of the number of the Group's employees by around 300 in the coming one year.
A pilot programme on branch managerial and financial staffing optimisation has been undertaken. The aim of this programme is to appoint one regional manager and one accountant to each designated region with a view to increasing operational efficiencies and reducing labour costs.
The integration of the management information system and Kingdee EAS was completed in early June 2014 and the Board expect that this will improve management efficiency and provide decision-makers with real-time financial and business data.
Recent developments and trading update
At 31 August 2014, Global Lock had a total of 30,974 clients which represents a small decrease on the 31,165 customers as at 30 June 2014. The number of branches remained unchanged from the year end at 72.
The Group held its Interim Meeting in Shenzhen from 8 August to 12 August 2014 to review its operational performance during the first half year of 2014, as well as to determine the operating targets and strategic developments for H2:2014.
On 12 August 2014 the Global Lock Hunan branch executed a Special Merchants Service Agreement with CHINAUMS Merchant Services Company Limited (which is a company wholly-owned by China UnionPay and engaged in business in relation to Chinese bank cards, transactions via bank cards and express financial services), under which China UnionPay and China CITIC Bank will work together to issue a Global Lock CITIC UnionPay Card targeted at the Group's customers. The Board anticipate that this card will enable the Group's clients to access financing services via a third party and in so doing they anticipate that this will improve the Group's competiveness and ability to attract clients.
The Group is currently planning on opening three branches in Datong, Shan Xi province (northwest of China) giving the Group a presence in the northwest of China for the first time and the initial preparations for this have commenced.
On 9 September 2014, the Group signed a Strategic Cooperation Agreement with Shenzhen Skyeyes Company Limited for the supply of tailored security devices to the Group.
Future developments and plans
The Group considers that there is currently considerable market fragmentation and, as such, is evaluating the acquisition of a number of competitors in order to increase the size of the Group's operations and benefit from the economies of scale that these acquisitions will generate. At the same time, the board is also evaluating the potential acquisition of various complimentary businesses. The Board aims to develop strategic cooperation through its products, services and channels in order to identify new partners, expand its target market and increase the Group's revenue. Further announcements on these developments will be made at the appropriate time.
MR. MOXIANG LI, CHAIRMAN
23 September 2014
Condensed consolidated statement of comprehensive income
Note 6 months 6 months 12 months ended 30 ended 30 ended June 2014 June 2013 31 Dec 2013 Unaudited Unaudited Audited RMB'000 RMB'000 RMB'000 Revenue Fees income 5 41,738 42,066 118,056 Sales business tax (1,512) (2,063) (5,289) ------------ ------------ ----------- 40,226 40,003 112,767 Cost of sales (6,644) (6,441) (43,653) ------------ ------------ ----------- Gross profit 33,582 33,562 69,114 Selling and distribution costs (26,628) (27,538) (55,271) Administrative expenses (3,827) (3,575) (6, 516) Other income 46 17 26 Profit from operations 3,173 2,466 7,353 Finance cost (849) (649) (1,268) Profit on ordinary activities before taxation 2,324 1,817 6,085 Taxation 7 (16) (67) (738) ------------ ------------ ----------- Profit for the year 2,308 1,750 5,347 Other comprehensive income - - - ------------ ------------ ----------- Total comprehensive income for the year 2,308 1,750 5,347 ============ ============ =========== (Loss)/profit attributable to: Owners of the parent (838) (1,016) (433) Non-controlling interests 3,145 2,766 5,780 ------------ ------------ ----------- 2,307 1,750 5,347 ============ ============ =========== Total comprehensive (loss)/income attributable to: Owners of the parent (838) (1,016) (433) Non-controlling interests 3,145 2,766 5,780 ------------ ------------ ----------- 2,307 1,750 5,347 ============ ============ =========== Loss per share (in RMB) 8 Basic (0.003) (0.004) (0.002) Diluted (0.003) (0.004) (0.002)
All operations are continuing.
Condensed consolidated statement of financial position
Note 30 June 2014 30 June 2013 31 Dec 2013 Unaudited Unaudited Audited RMB'000 RMB'000 RMB'000 Non-current assets Intangible assets 10 35,161 37,169 36,204 Property, plant and equipment 9 21,008 22,220 22,047 Investments 3,000 3,000 3,000 Total non-current assets 59,169 62,389 61,251 ------------- ------------- ------------ Current assets Inventories 6,963 3,674 4,853 Due from customers for construction contracts 8,540 10,176 10,380 Trade and other receivables 67,037 53,555 60,274 Cash and cash equivalents 5,023 5,475 3,257 ------------- ------------- ------------ Total current assets 87,563 72,880 78,764 ------------- ------------- ------------ Total assets 146,732 135,269 140,015 ============= ============= ============ Equity and reserves Share capital 12 20,324 20,324 20,324 Statutory reserve 188 66 188 Other Reserves 963 963 963 Retained earnings (9,244) (8,867) (8,406) ------------- ------------- ------------ Total equity and reserves 12,231 12,486 13,069 Non-controlling interest 13 42,024 35,865 38,879 ------------- ------------- ------------ Total equity 54,255 48,351 51,948 ------------- ------------- ------------ Non-current liabilities Borrowings 11 1,810 1,809 803 ------------- ------------- ------------ Total non-current liabilities 1,810 1,809 803 ------------- ------------- ------------ Current liabilities Borrowings 6,700 2,169 2,105 Trade and other payables 82,473 82,940 63,946 Taxation 1,494 - 1,213 ------------- ------------- ------------ 90,667 85,109 87,264 ------------- ------------- ------------ Total liabilities 92,477 86,918 88,067 ------------- ------------- ------------ Total equity and liabilities 146,732 135,269 140,015 ============= ============= ============
Condensed consolidated statement of cash flows
6 months 6 months 12 months ended 30 ended 30 ended 31 June 2014 June 2012 Dec 2013 Unaudited Unaudited Audited RMB'000 RMB'000 RMB'000 Cash flows from operating activities Profit before interest and tax 2,324 1,817 6,085 Adjustments for: Amortization of intangible assets 1,257 1,614 3,831 Depreciation of property, plant and equipment 4,542 3,026 6,124 Loss on disposal - - - Financial income - - - Financial costs 849 649 1,268 Impairment of property, plant - and equipment - - ----------- ----------- ---------- Operating profit before changes in working capital 8,972 7,106 11,611 Increase in inventories (2,110) (1,202) (2,381) Increase in trade and other receivables (4,923) (12,425) (19,348) Increase in trade and other payables 16,433 2,179 13,288 ----------- ----------- ---------- Cash from/(used in) operations 18,372 (4,342) 8,867 Income taxes paid - (67) (109) ----------- ----------- ---------- Net cash from/(used in) operating activities 18,372 (4,409) 8,758 ----------- ----------- ---------- Cash flows from investing activities Purchase of property, plant and equipment (3,503) (3,560) (5,475) Expenditure on intangibles (214) (2,187) (290) Purchase of customer relationship - - (3,485) Acquisition of subsidiary - - (500) Net cash used in investing activities (3,744) (5,747) (9,750) ----------- ----------- ---------- Cash flows from financing activities Transaction with directors (17,642) 11,951 2,258 Interest paid (849) (649) (1,268) Borrowings 6,000 - - Loan repayment (398) (1,059) (2,129) Net cash from financing activities (12,889) 10,243 (1,139) ----------- ----------- ---------- Net change in cash and cash equivalents 1,766 87 (2,131) Cash and cash equivalents at beginning of the period 3,257 5,388 5,388 ----------- ----------- ---------- Cash and cash equivalents at end of the period 5,023 5,475 3,257 =========== =========== ==========
Condensed consolidated statement of changes in equity
Share Statutory Other Retained Non-controlling Total capital reserve reserve earnings Total interest equity RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 Balance at 1 January 2013 20,324 188 963 (8,406) 13,069 38,879 51,948 Total comprehensive (loss)/income for the year - - - (838) (838) 3,145 2,307 Balance at 30 June 2014 20,324 122 963 (9,244) 12,231 42,024 54,245 ========= ========== ========= ========== ======== =================== ======== Balance at 1 January 2013 20,324 66 963 (7,335) 14,018 33,083 47,101 Total comprehensive (loss)/income for the period - - - (1,016) (1,016) 2,766 1,750 Acquisition of non-controlling interest without a change in control - - - (516) (516) 16 (500) --------- ---------- --------- ---------- -------- ------------------- -------- Balance at 30 June 2013 20,324 66 963 (8,867) 12,486 35,865 48,351 ========= ========== ========= ========== ======== =================== ======== Balance at 1 January 2013 20,324 66 963 (7,335) 14,018 33,083 47,101 Total comprehensive (loss)/income for the period - - - (433) (433) 5,780 5,347 Acquisition of non-controlling interest without a change in control - - - (516) (516) 16 (500) Transfer of statutory reserve - 122 - (122) - - - --------- ---------- --------- ---------- -------- ------------------- -------- Balance at 31 December 2013 20,324 188 963 (8,406) 13,069 38,879 51,948 ========= ========== ========= ========== ======== =================== ========
Notes to the condensed consolidated financial statements
1. General information
Global Lock Safety (International) Group Co., Limited ("Global Lock") is a company incorporated in British Virgin Islands ("BVI") under the BVI Companies Act, 2004. The address of the registered office is Akara Building, 24 De Castro Street, Wickhams Cay 1, Road Town, Tortola, BVI. Global Lock is an investment company.
The nature of the Global Lock Group's operation and its principal activity is the provision of security solutions to retail stores across the People's Republic of China ("PRC"). The principal place of business of the Global Lock Group's operation is at Room 507, Unit 1, Jinghua Zhong Industrial Park, Jinlong Avenue 2, Baolong Industrial Park, Longgang District, Shenzhen, China.
The group carries out its trading business through Shenzhen Global Lock Security System Engineering Co., Ltd (Shenzhen GLOK), a company incorporated in PRC. Global Lock Safety (Shenzhen) Limited ("Global Lock WFOE"), a wholly owned subsidiary of Global Lock has entered into certain long term contractual agreements with Shenzhen GLOK that all profits generated by Shenzhen GLOK are to be paid to Global Lock WFOE.
These condensed financial statements present information about the group and are set out in Renminbi ("RMB") of the PRC, which is the functional currency of the group.
These condensed financial statements are presented in the nearest thousands.
2. Basis of preparation
These condensed financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting.
The interim report is unaudited and does not constitute the company's statutory accounts for the six months ended 30 June 2014.
The results of Shenzhen GLOK were fully consolidated in these financial statements under IAS 27 through the contractual agreements where full managerial, operational and financial control of Shenzhen GLOK has been granted to Global Lock WFOE.
As announced on 17 May 2013, Global Lock WFOE and Shenzhen GLOK have agreed to vary the exclusive Technology Support Agreement with effect from 1 January 2012 so that instead of the service fee being calculated by reference to the operating revenue of Shenzhen GLOK in any profitable quarter it will be 25 per cent. of Shenzhen GLOK's profit before tax for the financial year in question.
3. Significant accounting policies
The condensed financial statements have been prepared under the historical cost convention.
The same accounting policies, presentation and methods of computation have been followed in these condensed financial statements as were applied in the preparation of the group's financial statements for the year ended 31 December 2013.
Notes to the condensed consolidated financial statements - continued
4. Seasonality of interim operations
The revenue of the group has increased significantly compared to the first six months of last year. This is mainly due to accountability management in the branch level and sales teams and collaboration with China Legal Daily (an official newspaper distributed to all Chinese government department and law enforcement agencies). As a result of this, the number of customers has increased from 26,833 to 31,165
5. Segment information
The group's revenue and profit before taxation were all derived from only one segment which is its principal activity. All revenue originates in the PRC and assets are mainly held in the PRC. As a result of this, management considered that no segment reporting is required.
6. Share-based payment charge
On 17 October 2010, Global Lock granted Allenby Capital, its NOMAD "warrants to subscribe for ordinary share" which is equal to 1% of the fully diluted equity (the equity share capital of GLOK from time to time plus all equity share capital which would arise on exercise in full of all rights to subscribe for or convert into equity share capital).
Judgements and estimates are required in determining the share based payment charge as an expense in the income statement. The directors have used Black-Scholes model which has been widely used in valuing the share based payment charge. The directors are in the opinion that the model used has been adjusted to their best estimate in arriving at the charge.
7. Taxation
A company is deemed to be resident in PRC if it is established in PRC or its effective management is in PRC. Residents are taxed on their worldwide income. Non-residents are taxed on PRC source income and income effectively connected with their establishments in PRC.
Global Lock is regarded as resident for the tax purposes in BVI. There are no applicable taxes in the BVI for the company.
GLOK Shenzhen and Shenzhen GLOK are regarded as residents for the tax purposes in PRC and subject to national income tax rate at 25%. Due to its high technology enterprise status, the company is entitled to a reduction in tax rate at 15%.
Interim income tax is accrued based on 15% tax rate.
Notes to the condensed consolidated financial statements -continued
8. Earnings per share
Basic loss per share
Basic loss per share is calculated by dividing the loss attributable to equity shareholders of the company by the weighted average number of ordinary shares in issue during the year.
30 June 2014 RMB'000 Loss attributable to equity holders of the company (838) ======== Weighted average number of shares in issue (thousands) 250,000 ========
Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The dilutive potential ordinary shares in the company are share options. A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company's shares) based on the monetary rights attached to outstanding share options. The number of shares calculated above is compared with the number of shares that would have issued assuming the exercise of the share options.
Weighted average number of ordinary shares (diluted):
30 June 2014 (thousands) At beginning of the period 250,000 Effect of conversion of share options - ------------ At end of period 250,000 ============ 9. Property, plant and equipment
During the period, the group made additions of approximate RMB 3.5 million to property, plant and equipment.
10. Intangible assets
During the period, the group spent approximate RMB 0.21 million on development projects
Notes to the condensed consolidated financial statements - continued
11. Share capital
The issued share capital of the company as at 30 June 2014 is RMB 20,323,800 fully paid. There were no movements in the issued share capital of the company in the current interim reporting periods.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. All shares rank equally with regard to the company's residual assets.
At 30 June 2013, the company had the following outstanding share options:
Date of grant: 17 Oct 2010 Number of option: 1% of the fully diluted equity
Option price: 16 pence (the lowest closing bid price of the ordinary shares for the one week period following Admission on 21 October 2010)
Exercise period: 21.10.2010 - 20.10.2015 12. Borrowing
During the period, the company obtained two borrowing at RMB 3 million each where both are short term loans and will be repayable within 1 year. The borrowing rates are 6.8% and 22.5% respectively and the proceeds were used for short term working capital needs.
13. Related party transactions
As at balance sheet date, the amount due to Mr Moxiang Li is RMB 12,608,580.46 (H1 2013: RMB 30,251,362). The loan amounts are interest free and repayable on demand.
In addition, the company's Chairman, Mr Moxiang Li, is the controlling party of, and has a 99% beneficial ownership in, Shenzhen Global Lock Security System Engineering Co., Limited group, and the remaining 1% beneficial ownership held by Mr. Jiafa Wang. Both of their beneficial interests represent the non-controlling interests in these financial statements
Xinhua Xianghui Electronic Technology Co., Limited
Xinhua Xianghui, the key supplier of the Group's equipment, is owned by some of the directors. Details of transactions with Xinhua Xianghui are presented below:
6 months ended 6 months ended 30 June 2014 30 June 2013 RMB RMB Purchase of equipment 4,063,826 3,560,000 Balance payable 3,130,046 2,673,257 Prepayment for machinery equipment 6,118,000 1,715,279
Notes to the condensed consolidated financial statements - continued
Family Fortune International Co., Ltd
The Group has a non-trade balance receivable from a shareholder of the Company, Family Fortune International Co., Ltd, of RMB 102,650 (H1 2013: RMB 49,650).
Shenzhen Family Fortune Investment Co., Ltd
The Group has non-trade balance receivable to Shenzhen Family Fortune Investment Co., Ltd, a company with some common directors, of RMB 1,989,549.54 (H1 2013: RMB 1,323,450).
Shenzhen Lin En Energy Investment Co., Ltd
The Group has non-trade balance receivable to Shenzhen Lin En Energy Investment Co., Ltd, a company with some common directors, of RMB 198,418 (H1 2013: RMB 198,418).
Shenzhen Family Fortune Security System Engineering Co., Ltd
The Group has non-trade balance receivable to Shenzhen Family Fortune Security System Engineering Co., Ltd, a company with some common directors, of RMB 206,559.63 (H1 2013: RMB 198,418).
Global Lock International Investment Ltd
The Group has non-trade balance receivable to Global Lock International Investment Ltd, a company with some common directors, of RMB 7,235 (H1 2013: RMB 7,235).
End
This information is provided by RNS
The company news service from the London Stock Exchange
END
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