Zibao Metals Recycling Holdings PLC Half Yearly Report (6664I)

TIDMZBO

RNS Number : 6664I

Zibao Metals Recycling Holdings PLC

10 December 2015

10 December 2015

Zibao Metals Recycling Holdings Plc

("Zibao" or the "Company")

Half Year Results

Zibao Metals Recycling Holdings Plc (AIM: ZBO), a Hong Kong based, recyclable metal trader is pleased to announce its half year results for the six months ended 30 September 2015.

The Group figures are presented in Hong Kong Dollars (HKD 11.63 to GBP1.00 on 8 December 2015).

Highlights

   --      Revenue reduced by 23% to HKD 161 million  from HKD 208.3 million 

-- PBT decreased 97% to HKD 0.2 million (2014: HKD 5.9 million before admission costs) mainly due to lower gross profit margins

   --      Profit from operations decreased 95% to HKD 0.2 million (2014: HKD 4.4 million) 
   --      Cash position at period end at HKD 3.1 million (2014: HKD 1.9 million) 

Joe Zhou, Zibao Chairman commented: "The market condition the PRC and Europe continues to be challenging. The Group will continue to control its costs and manage the credit risks prudently. The Group believes that it will be well positioned to benefit from a future recovery."

For further information please contact:

 
 Zibao Metals Recycling Holdings        Tel: [phone] 
  PLC                                    7662 
  Wenjie "Joe" Zhou, Chairman            www.zibaometals.com 
  Jianfeng "Eddy" Li, Chief Executive 
  Officer 
  Chor Wei "Alan" Ong, Finance 
  Director 
 ZAI Corporate Finance Limited          Tel: +44 (0)20 
  (Nominated Adviser and Broker)         7060 2220 
  Ray Zimmerman/Tim Cofman/ Songdi       www.zaicf.com 
  Lin 
 

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 in non-ferrous metals - principally aluminium and copper. It imports these from a variety of international sources and resells them into the People's Republic of China to operators who process them into a 'clean' form for sale to foundries.

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 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 2015,

Results

The Group's turnover was HKD 161 million, a decline of approximately 23% mainly due to decline in sales to existing customers. Profit before tax declined in the period by 97% to HKD 0.2 million mainly due to lower margins from sale to new customers with shorter credit periods., During the six months ended 30 September 2015, as a result of market uncertainty, the Group diversified away from its previous customer base and tightened its credit policy.

Suppliers

Two new suppliers have been secured in the first half of the year, which strengthens the overall supplier panel to over 57 members. Each supplier is vetted by the Group before becoming an approved trading partner. As a result of this process, the Group cultivates strong and long-term relationships with its suppliers, reducing the risk of lower product quality and promoting integrity and reliability throughout our supply chain.

Customers

New potential customers were approached in the first half of the year. During the period, the Group has seen customers struggle with their levels of working capital due to Chinese banks tightening their credit policies and the directors welcome the recently announced drop in interest rates, which they believe should have a positive impact on demand. During the six months ended 30 September 2015, the Group diversified away from its previous customer base due to the Group's tightening credit policy due to market uncertainty.

Outlook

The market condition the PRC and Europe continues to be challenging. The Group will continue to control its costs and manage the credit risks prudently. The Group believes that it will be well positioned to benefit from a future recovery.

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

10 December 2015

Consolidated Statement of Comprehensive Income

 
 
                                                   6 months         6 months 
                                                      to 30            to 30 
                                                  September        September          Year to 
                                                       2015             2014         31 March 
                                     Notes                                               2015 
                                                    HKD'000          HKD'000          HKD'000 
                                                  Unaudited        Unaudited          Audited 
 Continuing operations 
 Revenue                               3            160,989          208,280          403,798 
 Cost of sales                                    (156,806)        (197,862)        (386,189) 
                                             --------------   --------------   -------------- 
 Gross profit                                         4,183           10,418           17,609 
 Other revenues                                           2                -            1,031 
 Selling and distribution 
  expenses                                            (265)            (454)            (692) 
 Administrative expenses                            (3,731)          (4,460)          (8,524) 
----------------------------------  ------  ---------------  ---------------  --------------- 
 - Admission expenses                                     -            (581)            (581) 
 - Other administrative 
  expenses                                          (3,731)          (3,879)          (7,943) 
----------------------------------  ------  ---------------  ---------------  --------------- 
                                             --------------   --------------   -------------- 
 Operating profit                                       189            5,504            9,424 
 
   Finance cost                                           -            (150)            (250) 
                                             --------------   --------------   -------------- 
 Profit before tax                                      189            5,354            9,174 
 
 Income tax expense                                       -            (963)          (1,431) 
                                             --------------   --------------   -------------- 
 Profit and total comprehensive 
  income for the period                                 189            4,391            7,743 
 
 
   Profit and total comprehensive 
   income for the year 
   attributable to the 
   owners of the Company                                189            4,391            7,743 
 
 
 
 Earnings per share                    5                HKD              HKD              HKD 
 Basic                                                0.002            0.049            0.082 
 Diluted                                              0.002            0.048            0.080 
 
 
 
 

Consolidated Statement of Financial Position

 
 
                                       Notes   As at 30 September 2015   As at 30 September 2014   As at 31 March 2015 
                                                               HKD'000                   HKD'000               HKD'000 
                                                             Unaudited                 Unaudited               Audited 
 Assets 
 Non-Current Assets 
 Property, plant and equipment                                  44,563                       115                45,448 
 Intangible assets                                               1,772                         -                 1,772 
                                                        --------------            --------------        -------------- 
                                                                46,335                       115                47,220 
                                                        --------------            --------------        -------------- 
 Current Assets 
 Inventories                                                    18,355                    23,805                17,233 
 Trade receivables                                               9,099                    29,900                14,774 
 Taxes recoverable                                               9,107                         -                     - 
 Prepayments, deposits and other 
  receivables                                                    4,864                     8,497                22,905 
 Cash and cash equivalents               7                       3,077                     1,938                 1,104 
                                                        --------------            --------------        -------------- 
                                                                44,502                    64,140                56,016 
                                                        --------------            --------------        -------------- 
 Total Assets                                                   90,837                    64,255               103,236 
 
 Equity and liabilities 
 Equity attributable to owners of 
 the company 
 Share capital                           8                      15,549                    12,643                15,549 
 Share premium                                                  42,167                    13,821                42,167 

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December 10, 2015 07:15 ET (12:15 GMT)