Majestic Corporation PLC Interim Results to 30 June 2024

RNS Number : 0753G

Majestic Corporation PLC

30 September 2024

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

 

30 September 2024

 

Majestic Corporation plc

(the "Company" or "Majestic")

Interim Results to 30 June 2024

 

Majestic Corporation plc (AQUIS: MCJ), a sustainable circular economy solutions provider specialising in recycling precious and non-ferrous metals, is pleased to announce its interim results for the 6-month period ended 30 June 2024.

 

Financial highlights:

• Revenue was US$25.0m (HY 2023: US$13.0m)

• Profit before tax US$1.2m (HY 2023: US$0.9m)

• Net assets increased to US$8.7m (as at 30 June 2023: US$7.6m)

• Cash in bank and on hand of US$0.4m (as at 30 June 2023: US$1.0m)

• Earnings per share increased to 5.2 cents (HY 2023: 3.7 cents)

• Post period end the Company received Enterprise Investment Scheme status.

 

 

 

 

Peter Lai, Chairman, CEO and Founder of Majestic said:

"I am delighted to report an outstanding set of interim results which has seen revenue growth of 92%, profit before tax growth of 41% and earnings per share growth of 40%, compared to the 6 months to 30 June 2023. Growth was driven largely from the performance of the UK market, our battery materials and solar recycling operations.

As industries continue to prioritise sustainability and seek to secure control over critical resources, Majestic's expertise in precious and industrial metals gives us a clear advantage.

Whilst growth in the second half will not be of the same magnitude, the combination of our strategic agility and market insight ensures Majestic's sustained growth and long-term success.

-Ends-

 

For further information, please visit www.majestic-corp.com, or contact:

 

Majestic Corporation plc Peter Lai (Chairman, CEO and Founder) Andrew Male (Non-Executive Director)	E: [e-mail]   T: [phone] E: [e-mail]
Guild Financial Advisory Limited - Corporate Adviser Ross Andrews Evangeline Klaassen	T: [phone] E: [e-mail]   T: [phone] E: [e-mail]
Redchurch Communications - Financial PR & IR John Casey / Nicky Bagheri	T: [phone] E: [e-mail]

 

About Majestic Corporation plc

Majestic Corporation plc is an emerging leader in sustainable circular economy solutions, specialising in recycling and recovering precious and base metals from everyday materials such as electronics, catalytic converters, and solar and battery materials. The company serves some of the world's largest brands, including Original Equipment Manufacturers (OEMs), blue-chip multinational corporations, financial and leasing businesses, and state and federal governments.

Through its subsidiaries and affiliate companies in strategically located regions, including Europe, North America, and Asia (ex. China), Majestic procures, processes, and ships e-waste to smelter and refinery partners who extract precious and base metals for re-entry into global supply chains. Majestic and its network's areas of focus include catalytic converters, printed circuit boards, solar panels, battery materials, precious metals recovery, and non-ferrous metals.

As Majestic continues to expand its footprint as a circular economy solutions provider, it remains committed to making a positive environmental impact, adhering to ESG values, and driving its business model through immediate and short-cycle cash flow, which strengthens the Company's performance and sustainability.

 

CHAIRMAN AND CEO'S REPORT

FOR THE PERIOD ENDED 30 JUNE 2024

The Board of Majestic Corporation plc is pleased to announce the Company's unaudited interim results for the six months ended 30 June 2024.

Statement from Chairman and CEO

This has been another strong period for Majestic Corporation. Revenue grew by US$12.0m, an increase of 92% from the prior period, with profit rising by 41% to US$1.2m and earnings per share increasing by 40% to 5.2 cents, compared to the 6 months to 30 June 2023. As a result of the increase in inventories during the period cash reduced but remained at a healthy US$0.4m Growth was driven by several key initiatives, all supported by our focus on ensuring the agility and resilience of our business model.

I have always believed that flexibility and responsiveness are critical in dealing with a thriving and unpredictable market. This agility, embedded in the leadership style, enables our company and team to swiftly adapt to changing conditions, seize opportunities, and remain at the forefront of our industry.

Majestic is on track to implement a fully modular approach to new processes allowing us to transfer, implement, and scale our model anywhere, regardless of location. Additionally, our network of smelters, built on relationships and performance that take decades to establish, provides the flexibility to react swiftly to both internal and external demands, ensuring we can scale and adapt as needed.

The UK market has also been a strong contributor to our growth. Our deepening relationship with affiliates such as Telecycle has also culminated in a conditional agreement for acquisition.

While our investments in Southeast Asia are still in the early stages, we are confident that our expertise and established network in the region will enable us to deliver attractive returns. We've already made significant strides, laying the foundation for sustainable growth in these markets and this region.

Our battery materials and solar recycling operations have been particularly noteworthy during this period of growth. These emerging segments have contributed significantly to our increase in revenue, and we expect them to remain key drivers as the demand for sustainable solutions continues to rise.

This period of growth did not come without challenges. Supply chain bottlenecks and rising costs were felt across the board, but we have addressed these issues through strategic investments in our logistics and procurement processes. These steps will not only resolve current inefficiencies but also improve overall operational efficiency as we continue to scale.

 

Outlook

The Board remains cautiously optimistic. Majestic's ability to adapt quickly to market changes positions it as a leader in the evolving recycling sector. With rising barriers to entry, growing demand for recycled materials, and fewer mines opening, Majestic is poised to capitalize on these trends. As industries continue to prioritise sustainability and seek to secure control over critical resources, Majestic's expertise in precious and industrial metals gives the Company a clear advantage. This combination of strategic agility and market insight ensures our sustained growth and long-term success.

Financial Highlights

• Revenue was US$25.0m (HY 2023: US$13.0m)

• Profit before tax US$1.2m (HY 2023: US$0.9m)

• Net assets increased to US$8.7m (as at 30 June 2023: US$7.6m)

• Cash in bank and on hand of US$0.4m (as at 30 June 2023: US$1.0m)

• Earnings per share increased to 5.2 cents (HY 2023: 3.7 cents)

• Post period end the Company received Enterprise Investment Scheme status.

 

Strategic Report

The principal activity of the Group continues to be specialists in recycling and recovering precious and base metals from everyday materials such as electronics, catalytic converters, and solar and battery materials. We have procurement warehouse locations in the United States, and the UK and long-term suppliers in Italy, Lithuania, Mexico and Australia. In addition, we have processing facilities in Malaysia capable of handling twenty thousand tons a year. With our reputation, quality, and volume, we can deliver directly to refineries.

The success of our strategy rests on the Company's profitability first, and we eliminate risk by hedging our sales, especially at times of uncertainty. The result announced today demonstrates this to be successful strategy.

 

Peter Lai Chairman & CEO

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2024

(Expressed in United States Dollar)
	Notes	Unaudited Six months ended				Audited Year ended		Unaudited Six months ended
		30.06.2024				31.12.2023		30.06.2023
Turnover	4	24,987,840				29,391,849		13,011,621
Cost of goods sold		(23,232,770)				(27,363,482)		(11,764,400)
Gross Profit		1,755,070				2,028,367		1,247,221
Other income	4	1,060				6,489		5,158
Administrative expenses		(539,520)				(1,046,396)		(390,528)
Profit from operation and before taxation	5	1,216,610				988,460		861,851
Taxation		(175,643)				(153,752)		(121,150)
Profit for the period		1,040,967				834,708		740,701
Other comprehensive income for the period		-				-		-
Total comprehensive income for the period		1,040,967				834,708		740,701
Earnings per share (cents per share)		5.2				4.17		3.7

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2024

(Expressed in United States Dollar)

 

	Notes	Unaudited Six months ended 30.06.2024		Audited Year ended   31.12.2023		Unaudited Six months ended 30.06.2023
CURRENT ASSETS
Inventories	8	16,066,683		15,145,754		9,221,001
Trade receivables	9	1,492,140		966,181		1,524,470
Prepayments and deposits		2,211,995		2,371,160		2,474,396
Amounts due from related companies		540,602		614,529		860,333
Amount due from director		197,539		135,967		104,443
Cash in bank and on hand		414,646		652,758		974,305
		20,923,605		19,886,349		15,158,948
CURRENT LIABILITIES
Trade payables	10	6,282,547		5,475,539		3,180,375
Deposits received		3,335,862		3,315,906		1,391,555
Accruals and other payables		29,178		84,804		36,764
Amounts due to related companies		645,041		1,926,252		1,337,309
Import loans	11	1,726,477		1,395,477		1,531,134
Tax payable		218,858		43,214		109,978
		12,237,963		12,241,189		7,587,115
NET CURRENT ASSETS		8,685,642		7,645,160		7,571,833
NET ASSETS		8,685,642		7,645,160		7,571,833
CAPITAL AND RESERVE
Called up share capital	12	135,919		135,919		135,919
Share premium		403,217		403,217		403,217
Capital reserve		4,767,431		4,767,431		4,767,431
Merger reserve		(44,525)		(44,525)		(44,525)
Foreign currency reserve		(38,888)		(38,403)		(17,723)
Retained profit		3,462,488		2,421,521		2,327,514
		8,685,642		7,645,160		7,571,833

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2024 (Expressed in United States Dollar)

 

	Share capital	Share premium	Capital reserve	Merger reserve	Foreign currency reserve	Retained profits	Total
Balance as 1 January 2023	135,919	403,217	4,767,431	(44,525)	(17,723)	1,586,813	6,831,132
Profit for the period	-	-	-	-	-	834,708	834,708
Foreign currency reserve	-	-	-	-	(20,680)	-	(20,680)
Balance as 31 December 2023	135,919	403,217	4,767,431	(44,525)	(38,403)	2,421,521	7,645,160
Profit for the period	-	-	-	-	-	1,040,967	1,040,967
Foreign currency reserve	-	-	-	-	(485)	-	(485)
Balance as 30 June 2024	135,919	403,217	4,767,431	(44,525)	(38,888)	3,462,488	8,685,642

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIOD ENDED 30 JUNE 2024 (Expressed in United States Dollar)

 

	Unaudited Six months ended 30.06.2024	Audited Year ended 31.12.2023	Unaudited Six months ended 30.06.2023
OPERATING ACTIVITIES
Profit for the period	1,040,967	834,708	740,701
Adjustment:
Exchange difference Cost of goods sold	(485) 23,232,770	(20,680) 27,363,482	- 11,764,400
Operating profit before working capital changes	24,273,252	28,177,510	12,505,101
Changes in working capital
Purchase of inventories	(24,153,699)	(34,126,140)	(12,602,305)
(Increase)/decrease in trade and other receivables	(354,439)	1,515,589	649,082
(Decrease)/Increase in trade and other payables	(334,226)	4,927,287	128,258
NET CASH GENERATED/(USED) TO OPERATING ACTIVITIES	(569,112)	494,246	680,136
INVESTING ACTIVITIES
NET CASH USED TO INVESTING ACTIVITIES	-	-	-
FINANCING ACTIVITIES
Withdrawal/(Repayment) of import loans	331,000	(1,668,935)	(1,533,278)
NET CASH (USED)/GENERATED FROM FINANCING ACTIVITIES	331,000	(1,668,935)	(1,533,278)
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS	(238,112)	(1,174,689)	(853,142)
CASH AND CASH EQUIVALENTS AT BEGINNING OF INTERIM PERIOD - 1 JANUARY	652,758	1,827,447	1,827,447

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2024

(Expressed in United  States Dollar)

 

1.        GENERAL INFOMATION AND BASIS OF PREPARATION

The Company is a public company, limited by shares, and incorporated and domiciled in the United Kingdom. the company has its listing on the Aquis Growth Market with the ticker MCJ.

The address of its registered office and the principal place of business are located Unit 15 Drome Road, Deeside Industrial Park, Deeside, Wales, CH5 2NY, United Kingdom.

The financial statements are presented in United States Dollars (USD).

 

2.        BASIS OF PREPARATION AND ACCOUNTING POLICIES

On 8 March 2022, the Company acquired the entire shareholding of Majestic Corporation Limited via a share-for-share exchange. The insertion of the Company on top of the existing Majestic Corporation Group does not constitute a business combination under IFRS 3 Business Combinations. This transaction has been deemed to be an acquisition in line with guidance from the Interpretations Committee (IFRIC) and as such the consolidated accounts for the Group are treated as a continuation of the consolidated accounts of the Majestic Corporation Group.

Under the principles of continuation accounting the consolidated financial statement of the newly formed Group must reflect:

•  The assets and liabilities of the Majestic Corporation Group at pre-combination carrying amounts;

•  The retained earnings and other equity balances of the Majestic Corporation Group at pre-combination carrying amounts;

•  The assets and liabilities of the Company at fair value; and

•  The share capital of the Company.

 

Basis of preparation

These interim condensed consolidated financial statements (Interim Financial Statements) Majestic Corporation Group plc comprise the results of the Group for the 6 months ended 30 June 2024.

The consolidated reserves of the Group have been adjusted in the current period following the share-for-share exchange to reflect the share capital of the Company with the difference giving rise to a merger reserve.

The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting and the Disclosure and Transparency Rules of the Financial Conduct Authority. The annual financial statements of the Group will be prepared in accordance with UK adopted International Financial Reporting Standards. They do not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 and should be read in conjunction with the financial statements prepared for the Majestic Corporation Group for the twelve months ended 31 December 2023, which were prepared in accordance with International Financial Reporting Standards (IFRS) and are filed with the Companies Registry in Hong Kong and are available to shareholders on request"

The information for the period ended 30 June 2024 has neither been audited nor reviewed and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

 

3.        PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies adopted are set out below.

a.      Basis of accounting and accounting policies

The financial statements have been prepared under the historical cost basis.

 

b.      Revenue recognition

Revenue from the sales of goods is recognised when control of the goods has transferred, being when the goods have been shipped to the customer's specific location. Following delivery, the customer has full discretion over the usage of the goods, has the primary responsibility upon selling the goods and bears the risks in relation to the goods. A receivable is recognised by the Company when the goods are delivered to the customers as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due.

Interest income is recognised as other income as it accrues using the effective interest method.

 

c.      Cash and cash equivalents

Cash and cash equivalents include demand deposits and other short-term highly liquid investments with original maturities of three months or less.

 

d.     Trade and other receivables

Trade and other receivables are stated at estimated realisable value after each debt has been considered individually. Where the payment of a debt becomes doubtful a provision is made and charged to the income statement.

e.      Trade and other payables

Trade and other payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

 

f.      Translation of foreign currency

Foreign currency transactions during the period are translated into United States Dollars at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into United States Dollars at the market rates of exchange ruling at the reporting date. Exchange gains and losses on foreign currency translation are dealt with in the statement of income and retained earnings.

g.      Taxation

The tax expense in the consolidated income statement comprises current tax payable and deferred tax.

h.      Inventories

Inventories are stated at the lower of cost and net realisable value. In arriving at net realisable value an allowance has been made for deterioration and obsolescence.

i.       Good in transit

The risk and reward of the inventory transfers to customers once they have issued an analysis report confirming shipment has been accepted.

j.       Leases

Leases are classified as operating leases and the rentals receivable or payable under these leases are credited or charged to the statement of income and retained earnings on a straight-line basis over the duration of the leases.

k.      Going concern

The consolidated financial statements are prepared on the going concern basis. The financial position of the Company, its cash flows and liquidity position are described in the interim consolidated financial statements and notes. The Company has the financial resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of the report.

4.        TURNOVER AND OTHER INCOME

Turnover represents the amounts received and receivables for goods sold to the customers.

 

5.         PROFIT FROM OPERATION AND BEFORE TAXAION

Profit from operation and before taxation have been arrived at after charging:

 

	Unaudited	Unaudited
	30.06.2024	30.06.2023
Finance costs	82,519	58,828
Cost of goods sold	23,232,770	11,764,400

6.         DIRECTORS REMUNERATIONS
Director's remunerations disclosed is as follows:
	Unaudited	Unaudited
	30.06.2024	30.06.2023
Fees	-	-
Other emoluments	90,464	61,653
	90,464	61,653
7.         STAFF COST
	Unaudited	Unaudited
	30.06.2024	30.06.2023
Salary	68,386	58,449
Mandatory provident fund	5,040	4,192
	73,426	62,641

 

8.         INVENTORIES
Inventories comprise entirely of stock in trade.	Unaudited	Audited
	30.06.2024	31.12.2023
Stock in warehouse	4,614,358	6,975,542
Stock in transit	11,452,325	8,170,212
	16,066,683	15,145,754

 

9.        TRADE RECEIVABLES

 The ageing analysis of the trade receivables, based on invoice dates, is as follows:

	Unaudited	Audited
	30.06.2024	31.12.2023
Within one month	1,421,011	46,181
1-3 months	65,129	545,488
Over 3 months	-	4,512
	1,492,140	966,181

 

Trade receivables disclosed above include amounts which are past due at the end of the reporting period against which the Company has not recognized an allowance for doubtful receivables because there has not been a significant change in credit quality and the amounts are recoverable subsequent to the reporting date. The Company does not hold any collateral or other credit enhancements over these balances, nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.

10.       TRADE PAYABLES

 

The ageing analysis of the trade payables, based on invoice dates, is as follows:

 

	Unaudited	Audited
	30.06.2024	31.12.2023
Within one month	2,555,936	845,038
1-3 months	2,612,163	4,576,578
Over 3 months	1,114,448	53,923
	6,282,547	5,475,539

 

11.      IMPORT LOANS

The Company has obtained credit facilities from its bankers as secured by guarantees of the director and a related company together with fixed deposit of the Company. The loans are interest bearing at LIBOR+2.5% and repayable in 120 days from the drawdown date which has multiple repayment dates.

12.       SHARE CAPITAL

	Unaudited		Audited
	30.6.2024		31.12.2023
Issued and fully paid
20,000,000 ordinary shares of £0.005 each	135,919		135,919

 

13.      FINANCIAL RISK MANAGEMENT

Exposure to credit, liquidity, interest rate, foreign currency and equity price risks arises in the normal course of the Company's business. The Company's exposure to these risks and the financial risk management policies and practices used by the Company to manage these risks are described below.

 

a.          Credit risk management

In order to minimize credit risk, credit approvals and monitoring procedures are in place to ensure that follow-up action is taken to recover overdue debts.

 

b.          Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for management of the Company's short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

 

c.          Market risk management - interest rate risk

The Company draws import loans to maintain stable cashflow. The loan is interest bearing at LIBOR+2.5%. 5% is the sensitivity rate used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates. The Company's sensitivity to a 5% increase and decrease in LIBOR is as follow:

 

Unaudited               Unaudited

30.06.2024           31.06.2023

5% increase effect on profit for the year	(4,913)	(5,783)
5% decrease effect on profit for the year	4,913	5,783

 

d.         Market risk management - foreign currency risk

The Company undertakes most of the transactions denominated in United States Dollar with few transactions denominated in Euro. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The Company's sensitivity to a 5% increase and decrease in Euro against United States Dollar is as follow:

 

      Unaudited            Unaudited

          30.06.2024            31.06.2023         

 

5% increase effect on profit for the year	(128,619)	(68,934)
5% decrease effect on profit for the year	128,619	68,934

14.      EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the net profit/(loss) for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares in issue during the period. 

 

The following reflects the income and share data used in the basic and diluted earnings per share computations:

	Unaudited
	30.06.2024
Profits attributable to ordinary equity holders of the Company	1,040,967
Average number of shares	20,000,000
Earnings per share (cents per share)	5.2

There have been no other transactions involving actual ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of this financial information. 

15.      EVENTS AFTER BALANCE SHEET DATE

On 3 September 2024, the Company entered into a conditional share purchase agreement to acquire the entire issued share capital of Telecycle Europe Limited for a consideration of up to £2 million, to be satisfied in cash (the "Acquisition").

As Peter Lai is a Director and 71.85% shareholder of Majestic, as well as a Director and the sole shareholder of Telecycle, this Acquisition is considered a related party transaction under the Aquis Stock Exchange Rules.

On 4 September 2024, the Company announced that it had been granted Enterprise Investment Scheme status.

On 5 September 2024, the Company announced the appointment of Andrew Male as an Independent Non-Executive Director of the Company.

 

 

 

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