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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Kurawood | LSE:KURA | London | Ordinary Share | GB00B246X642 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.35 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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KURAWOOD PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDING 31 MARCH 2008
Highlights
* Results for the 6 month period show a loss on ordinary activities of £
821,740 (full year 2007: £5,477,094).
* Cash, cash on deposit and cash equivalents is £2,785,875 (September 2007: £
4,953,040).
* Annual capacity reaching 300,000 cubic metres.
* Initial orders received from Floors-to-Go Ltd, a major UK-wide retailer.
* New sales manager has been appointed to focus on the trade sales.
* Footprint in Asia established with Hong Kong based Matrex Global Limited.
* First UK patent to protect the ability of VecowoodTM and any other modified
non-engineered softwood to be powder coated.
Roy Tilleard, Chairman and CEO comments: "Kurawood continues to make good
progress. Our increased production capacity enables us to target large trade
accounts to complement our approach to retail product sales in the UK."
Chairman & Chief Executive's Business Review
The first half of the year has been a period of good progress as the Group
continues to build up its manufacturing capacity and its logistics and
distribution networks. There have been a number of significant achievements in
the period, in particular the strategic decision to increase capacity earlier
in the year, which has been validated by the growing pipeline of enquiries and
orders.
Principal achievements
The Aviation Avenue processing plant has been commissioned ahead of schedule
We announced in February 2008 our intention to invest in an enlarged production
facility, moving from 30,000 to 300,000 cubic metres of nameplate capacity by
the end of June 2008. This deadline has been met with the physical construction
of our facility now complete. We anticipate a period of about six to eight
weeks will be required to optimise the operation of the facility to cope with
the range of dimensions and volumes of timber to be processed. This scaling-up
of capacity is of great consequence as customers place critical importance on
Kurawood's ability to speedily deliver in sufficient volumes to meet their
demands.
Initial orders have been received
On 19 June 2008, we announced that the Group has secured a series of purchase
orders for its products from the flooring specialists Floors-2-Go Ltd, under
which Kurawood will supply Floors-2-Go with its first modified timber solid
flooring for retail sale in the UK. The deal will improve the public profile of
Kurawood as Floors-2-Go will stock and display three colours of flooring in all
of their 135 stores nation-wide in the UK. Further orders from Floors-2-Go are
expected in due course.
Customers will be able to purchase modified timber solid flooring with the
characteristics of hardwood flooring such as walnut, oak and cherry by the end
of this summer.
Building on the initial pipeline of orders, Kevin Fraser, Sales and Marketing
Director, continues to work on a full diary of meetings and commitments with
potential customers in order to maintain the momentum built up to date.
The Group has strengthened its sales force
In the UK the sales team has been strengthened by the appointment of a new
sales manager, Mr Suki Baines. Suki brings with him 17 years experience in the
wood industry and a number of valuable contacts.
Suki's experience will complement that of the Kevin and accordingly, we have
created a new rough timber trade sales division, separate from the finished
products division to maximise the potential of the growing sales team. By
targeting both areas concurrently, we are confident of taking full advantage of
the market appetite and interest in our products.
Suki and Kevin are supported in their marketing efforts by a structured flow of
trade and press articles aimed at building the company's profile within the
industry.
Global footprint has expanded
Earlier this week, the Company also announced that it had signed an agency
agreement with Hong Kong based Matrex Global Limited ("Matrex"). Matrex, acting
in the their capacity as a fully commissioned agent has undertaken to market
and promote VecowoodTM and is guaranteeing to Kurawood the due performance of
any contract of sale with customers located in the territories of China, Japan,
Korea, Taiwan, Vietnam and Australia.
The appointment is for an initial period of five years and is subject to Matrex
achieving aggregate net sales targets of US$ 5 million in the first year,
rising to US$ 25 million in year 5.
This is a particularly exciting development as, by this agreement, the Group
has established a footprint in the key growth markets of Asia and can build on
the contacts and local knowledge of the experienced management team at Matrex.
Building market awareness
To maintain the advantage arising from these developments and in order to
benchmark our products and processes, in May 2008 the Company became a member
of the Wood Protection Association's Modified Wood Group (MWG). The aim of the
MWG is to identify and establish benchmark performance standards for modified
wood which will form the basis for Specifiers' Manuals and Guides to provide UK
specifiers with added confidence in modified timber such as Kurawood. We are
joined in the MWG by Osmose and Accoya and we consider that our membership will
allow us to actively lead developments in the market.
Intellectual Property protected
The Group has obtained its first UK patent to protect the ability of VecowoodTM
and any modified non-engineered softwood to be powder coated. The research
leading to the patent application was driven by the fact that natural timber,
from a species such as pine, when impregnated with Kurawood's proprietary
VecoTM formulation, imparts certain properties to the resultant VecowoodTM
which improve the ability of the powder coating to adhere to its surface.
One such benefit of this is that, like powder coated Aluminium and uPVC, powder
coated VecowoodTM products (items such as window frames and doors) can be
provided with similar service life guarantees whilst being manufactured from
renewable materials. This breakthrough process fits well with one of the
elements of the UK Government's Code for Sustainable Homes, which seeks to
promote the use of resources, such as solid wood, that are more sustainable and
environmentally friendly than their Aluminium, uPVC or even engineered wood
counterparts.
Balance sheet and cash flow reflect continued capital expenditure and
operational ramp-up
The Group has recorded an operating loss of £818,506 (full year to September
2007: loss of £5,477,094) reflecting the ramp-up in production facilities and
related costs in association with promoting our products in the UK and abroad.
The group has experienced a net cash outflow of £2,175,896 (full year to
September 2007: inflow of £4,948,538) while net assets at £6,912,242 are down
only slightly on September 2007 (£7,187,838).
Capital expenditure in the six months to March 2008 was £189,673 (full year to
September 2007: nil). Cash raised in fund raising on floatation has also been
used to pay down creditors and for operational expenditure. Cash, cash on
deposit and cash equivalents was £2,785,875 (September 2007: £4,953,040). The
Company continues to draw down on its existing cash facilities with spend in
the year being largely in respect of capital expenditure and working capital
requirements.
The Group is well positioned for continued growth
We believe that despite the softening of economic conditions the UK, the growth
prospects of the Company have been secured by the establishment of a footprint
in Asia following the completion of the Matrex deal. Furthermore, continued
increases in global hardwood prices will reinforce the competitive advantage of
our products.
With the expanded capacity in our production facility, the Group is well
positioned to take advantage of, and to deliver on, the orders coming on line.
It has been a period of good growth and once again we would like to thank all
our shareholders, advisers and partners for their continued support.
Enquiries:
Justin Martin, Kurawood plc
Tel: +44 (0)1624 820040
James Caithie, Dowgate Capital Advisers Ltd
Tel: +44 (0)20 7492 4777
Ruari McGirr/Mark Anwyl, St Helen's Capital plc
Tel: +44 (0)20 7628 5582
John Bick, Hansard Group
Tel: +44 (0)20 7245 1100
KURAWOOD PLC
UNAUDITED CONSOLIDATED CONDENSED INCOME STATEMENT
FOR THE 6 MONTHS ENDED 31 MARCH 2008
Note 6 months ended 6 months ended Year ended
31 March 31 March 30 September
2008 2007 2007
£ £ £
Revenue - 28,275 36,400
Cost of sales (93,834) (16,492) (21,853)
******* ******* *******
GROSS PROFIT (93,834) 11,783 14,547
Administrative expenses - (724,672) (100,694) (347,623)
recurring
Administrative expenses - - (9,199) (5,144,018)
exceptional
******* ******* *******
OPERATING LOSS (818,506) (98,110) (5,477,094)
Financial income 79,174 34 9,573
Financial expenses (82,408) (50,795) (129,311)
******* ******* *******
LOSS ON ORDINARY ACTIVITIES (821,740) (148,871) (5,596,832)
BEFORE TAXATION
Tax on loss on ordinary - - -
activities
******* ******* *******
LOSS ON ORDINARY ACTIVITIES (821,740) (148,871) (5,596,832)
AFTER TAXATION
******* ******* *******
All amounts relate to continuing operations.
There were no recognised gains and losses for 2008 or 2007 other than those
included in the profit and loss account.
BASIC AND DILUTED LOSS PER Note 6 months ended 6 months ended Year ended
SHARE
31 March 31 March 30 September
2008 2007 2007
Continuing Operations 1 £(0.05) £(2.98) £(4.49)
******* ******* *******
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEET
AS AT 31 MARCH 2008
Note 31 March 31 March 30 September
2008 2007 2007
NON-CURRENT ASSETS
Goodwill 4,979,371 - 4,614,030
Other intangible assets 1,957,076 3 1,876,308
Property, plant and equipment 200,489 2,627 8,775
******* ******* *******
7,136,936 2,630 6,499,113
******* ******* *******
CURRENT ASSETS
Inventories 50,955 58,210 56,487
Trade and other receivables 202,776 - 193,513
Cash deposits 2,000,000 2,000,000
Cash and cash equivalents 785,875 513 2,953,040
******* ******* *******
3,039,606 58,723 5,203,040
******* ******* *******
TOTAL ASSETS 10,176,542 61,353 11,702,153
******* ******* *******
EQUITY
Share capital 3 213,362 50,000 213,362
Share premium 9,186,106 - 9,186,106
Other reserves 790,078 - 243,934
Retained earnings (3,277,304) (1,447,926) (2,455,565)
******* ******* *******
TOTAL EQUITY 6,912,242 (1,397,926) 7,187,838
******* ******* *******
NON-CURRENT LIABILITIES
Deferred income tax liability 594,986 594,986
Long term borrowings 2 2,538,702 274,560 2,538,702
******* ******* *******
3,133,688 274,560 3,133,688
******* ******* *******
CURRENT LIABILITIES
Short term borrowings 2 - 660,000 -
Current portion of long term 2 - 312,881 -
borrowings
Trade and other payables 130,612 211,838 1,380,627
******* ******* *******
130,612 1,187,719 1,380,627
******* ******* *******
TOTAL LIABILITIES 3,264,300 1,462,279 4,514,315
******* ******* *******
TOTAL EQUITY AND LIABILITIES 10,176,542 61,353 11,702,153
******* ******* *******
UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTHS ENDED 31 MARCH 2008
Share Share Translation Other Retained Total
Reserve Reserves Earnings
Capital Premium Equity
£ £ £ £ £ £
Total equity at 213,362 9,186,106 - 3,688 (2,215,318) 7,187,838
1 October 2007
Transfer to - - 240,246 - (240,246) -
translation
reserve
****** ******* ******* ******* ******* *******
Restated total 213,362 9,186,106 240,246 3,688 (2,455,564) 7,187,838
equity at 1
October 2007
Loss for the 6 - - - - (821,740) (821,740)
months
Employee share - - 56,250 - 56,250
options charge
for the period
Net gain on - - 31,394 - - 31,394
hedge of net
investment in
foreign
subsidiary
Currency - - 458,500 - - 458,500
difference on
translation of
foreign
operations
****** ******* ******* ******* ******* *******
Total equity at 213,362 9,186,106 730,140 59,938 (3,277,304) 6,912,242
31 March 2008
****** ******* ******* ******* ******* ******
Differences on translation of net foreign investments of £240,246 as at 1
October 2007 which were previously stated within retained earnings have been
reclassified to a separate translation reserve.
UNAUDITED CONSOLIDATED CONDENSED CASH FLOW STATEMENT
FOR THE 6 MONTHS ENDED 31 MARCH 2008
6 months ended 6 months ended Year ended
31 March 31 March 30 September
2007
2008 2007
Note £ £ £
Cash flows from operating
activities
Cash used in operations 4 (1,983,578) (4,862) (543,225)
Interest paid (81,777) (33) (129,311)
Interest received 80,904 34 9,573
******* ******* *******
Net cash used in operating (1,984,451) (4,861) (662,963)
activities
******* ******* *******
Cash flows from investing
activities
Acquisition of subsidiary, net - - (313,460)
of cash acquired
Cash acquired with subsidiary - - 70
Purchases of property, plant (189,673) - -
and equipment
Proceeds from sale of - 400 400
equipment
Exchange and other non-cash (1,772) - -
movements
******* ******* *******
Net cash raised by / (used) in (191,445) 400 (312,990)
investing activities
******* ******* *******
Cash flows from financing
activities
Proceeds from borrowings - - 2,538,702
Repayment of borrowings - - (536,679)
Proceeds from issue of shares - - 4,544,852
Share issue costs paid - - (622,384)
******* ******* *******
Net cash (used in) / raised by - - 3,924,491
financing activities
******* ******* *******
Net increase / (decrease) in (2,175,896) (4,461) 4,948,538
cash, cash equivalents and
cash deposits
Cash, cash equivalents and 4,953,040 4,974 4,974
cash deposits at beginning of
period 8,731 - (472)
Exchange losses on cash and
cash equivalents
******* ******* *******
Cash and cash equivalents and 2,785,875 513 4,953,040
cash deposits at end of the
period
******* ******* *******
KURAWOOD PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE 6 MONTHS ENDED 31 MARCH 2007
1. LOSS PER SHARE
Basic and diluted loss per share has been calculated by dividing the loss for
the financial period attributable to ordinary shareholders, amounting to £
821,740 (2007 - £148,871) by 17,000,000 (2007 - 633,825) ordinary shares, the
weighted average number in issue during the period. The weighted average number
of shares deemed to be in existence in the period to September 2007 was 633,825
following the share-for-share swap in which 50,000 ordinary shares of £1.00
were exchanged for 633,825 ordinary shares (note 12).
2. BORROWINGS
Amounts falling due within one year
31 March 31 March 30 September
2008 2007 2007
£ £
Short term loan - 660,000 -
Current portion of long term - 312,881 -
borrowings
******* ******* **********
- 972,881 -
******* ******* *******
Amounts falling due after more than one year
31 March 31 March 30 September
2008 2007 2007
£ £ £
Bank loans 1,964,351 - 1,964,351
Other loans 574,351 274,560 574,351
******* ******* *******
2,538,702 274,560 2,538,702
******* ******* *******
Current portion of long term borrowings at 31 March 2007 of £312,881 (30
September 2007: nil ) was in relation to a loan from General Capital Venture
Finance Limited ("General Capital"). On or before 12 September 2007, General
Capital entered into a Loan Settlement Agreement with the Company. Under the
terms of the Loan Settlement Agreement, the Company paid General Capital £
690,000 in settlement of all amounts due to General Capital in respect of
principal and interest on the loan.
The short term borrowings at 31 March 2007 wholly represented monies owed to
third party holders of subordinated loans.
On or before 12 September 2007, all subordinated loans entered into a
Conversion Agreement with the Company. Under the terms of the Conversion
Agreement, upon admission of the Company to AIM on 18 September 2007, all
holders of the subordinated loans agreed to the cancellation of their loans in
exchange for ordinary shares in the Company.
The bank loans represent a five year £2 million treasury loan facility with
Barclays Private Clients International Limited ("Barclays") net of issue costs.
The facility is granted on an interest only basis for a period of 1 year from
the date of drawdown. Interest will accrue at a margin of 0.25% and be debited
to the Company's current account. The loan will be repaid by annual capital
repayments of £500,000 payable on the second, third, fourth and fifth
anniversary of the date of drawdown.
Other loans in the current year wholly represent monies owed to General Capital
under the terms of a Vaporisation Agreement that General Capital entered into
with the Company on or before 12 September 2007. Under the terms of the
Vaporisation Agreement, the Company purchased certain previously issued
warrants from General Capital for £600,000 that was satisfied by the issue of a
loan note by the Company.
The short-term and long-term loans had the following interest and currency
profile:
Fixed rate Variable rate Financial
financial liabilities on
financial liabilities which no
liabilities interest is paid
31 March 2008 £ £ £
Sterling 574,351 1,964,351 -
******* ******* *******
31 March 2007
Sterling 587,441 - 660,000
******* ******* *******
30 September 2007
Sterling 574,351 1,964,351 -
******* ******* *******
3. SHARE CAPITAL
31 March 31 March 30 September
2008 2007 2007
£ £ £
Authorised
26,136,880 ordinary shares of £ 261,369 50,000 261,369
0.01 each (2006: 50,000 ordinary
shares of £1 each)
4,336,175 deferred shares of £ 43,362 - 43,362
0.01 each (2006: Nil)
******* ******* *******
304,731 50,000 304,731
******* ******* ******
Authorised, allotted, called up
and fully paid
17,000,000 ordinary shares of £ 170,000 50,000 170,000
0.01 each (2006: 50,000 ordinary
shares of £1 each)
4,336,175 deferred shares of £ 43,362 - 43,362
0.01 each (2006: Nil)
******* ******* *******
213,362 50,000 213,362
******* ******* ******
On 12 September 2007, the authorised share capital of the Company was increased
from £50,000 to £304,730.55 divided into 26,136,880 ordinary shares of £0.01
each and 4,336,175 deferred shares of £0.01 each by creation of 25,473,055
ordinary shares of £0.01 each ranking pari passu in all respects with the
existing ordinary shares of the Company.
Also on 12 September 2007, all ordinary shares of £1 each were subdivided in
663,825 ordinary shares of £0.01 each and 4,336,175 deferred shares of £0.01
each. Ownership of deferred shares does not entitle the holder to any voting
rights or a right to any dividend. On distribution of the assets of the Company
upon liquidation a deferred share shall only be entitled to share in the assets
of the Company after £1m per share has been paid on each ordinary share.
4. CASH USED IN OPERATIONS
6 months ended 6 months ended Year ended
31 March 2008 31 March 2007 30 September 2007
£ £ £
Loss on ordinary activities (821,740) (148,871) (5,596,832)
before tax
Depreciation of property, plant 5,150 388 709
and equipment
Finance income (79,174) (34) (9,573)
Finance charge 82,408 50,795 129,311
Share option charge 56,250 - 3,688
Fair value charge on shares - - 4,440,323
issued for directors and
consultants services at par
Amortisation of intangible 65,246 - 4,281
assets
Impairments of intangible - - -
assets
(Increase) / Decrease in 5,531 7,694 9,417
inventories
(Increase) / Decrease in (8,894) 24,864 (164,034)
receivables
Increase / (Decrease) in (1,288,355) 60,302 639,485
payables
******* ******* *******
Cash used in operations (1,983,578) (4,862) (543,225)
******* ******* *******
END
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