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Name | Symbol | Market | Type |
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-3x Short China | LSE:CHNS | London | Exchange Traded Fund |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
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0.2585 | 4.34% | 6.2168 | 6.2045 | 6.229 | 0 | 16:35:09 |
RNS Number:9759D China Shoto plc 18 September 2007 Press Release 18 September 2007 China Shoto plc ("China Shoto" or "the Company" or "the Group") Unaudited Interim Results China Shoto plc (AIM:CHNS), a leading Chinese producer of industrial batteries and power supply systems, announces its unaudited Interim Results for the six months ended 30 June 2007. Highlights * Turnover up 46.5% to #41.6 million (H1 2006: #28.4 million) * Profit after tax up 30.4% to #3.0 million (H1 2006: #2.3 million) * The second phase project of the Power Type Battery ("PTB") manufacturing facility extension was accomplished and commenced commercial production in May 2007 * Revenue of the power type batteries business up 105% to #13.5 million (H1 2006: #6.6 million) * Basic earnings per share up 22.5% to 12.29p (H1 2006: 10.03p) Commenting on the unaudited Interim Results, Cao Guifa, Executive Chairman, said: "The Group has made excellent progress despite a number of external factors such as increased raw materials cost, Renminbi appreciation and increased competition. We look forward to the future with confidence." - Ends - For further information: China Shoto plc Cao Guifa, Executive Chairman Tel: +44 (0) 20 7398 7700 www.chinashoto.com Seymour Pierce Limited Stuart Lane / John Depasquale Tel: +44 (0) 20 7107 8000 jdp@seymourpierce.com www.seymourpierce.com Media enquiries: Abchurch Communications Henry Harrison-Topham / Ariane Comstive Tel: +44 (0) 20 7398 7705 henry.ht@abchurch-group.com www.abchurch-group.com Chairman's Statement I am delighted to present China Shoto's interim results for the six months ended 30 June 2007. Building on a strong performance in 2006 the Group has continued its progress, which is an endorsement of our strategy of focusing sales efforts on growth opportunities in our core markets. In H1 2007, the Group achieved sales revenue of #41.6 million, an increase of 46.5% compared with #28.4 million in H1 2006; net profit was #3.0 million, an increase of 30.4% compared with #2.3 million in H1 2006. Despite a number of adverse external factors such as increased raw materials cost, Renminbi appreciation and increased competition in H1 2007, the Group has achieved excellent results and maintained growth and the Group anticipates that the second half working capital outflow will be reversed into the positive. The Group has become a certified supplier of Huawei Technologies which is China's largest next-generation telecommunications equipment manufacturer. Additionally sales revenue from the OEM market has rapidly increased from #1.13 million in H1 2006 to #2.87 million in H1 2007, an increase of 154%. Debtor days have been reduced from 102 days in H1 2006 to 78 days in H1 2007. However in the second quarter central purchases by China Mobile and China Unicom resulted in deliveries of larger quantities of back up batteries which were then treated as sales revenue. However, payments had not been received as at 30 June 2007 in accordance with the terms of these contracts, as a consequence of which the trade receivables increased by #5.81 million to #20.82 million compared with #15.01 million at the end of last year. Operation Review Back up Batteries: The revenue of the back-up batteries business was #24.5 million in H1 2007, contributing 59% of the Group's total revenues. Profit before tax was #3.3 million in H1 2007 an increase of 65% when compared with #2.0 million in H1 2006. China Mobile, China Unicom, China Telecom, China Netcom and China Tietong remain the major customers of the Group. Sales revenues to these telecommunication service operators continued to grow in H1 2007, up 51.3% to #17.4 million from #11.5 million in H1 2006 contributing 71% of the total back up battery business revenues. Power Type Batteries: The revenue of power type batteries was #13.5 million in H1 2007, contributing 32.5% of the total revenues and increasing by 105% compared with #6.6 million in H1 2006; the profit before tax was #0.73 million in H1 2007, an increase of 7.4% when compared with #0.68 million in H1 2006. During the period, the daily production capacity for power type batteries increased from 18,000 units to 24,000 units. This is the result of the completion in May 2007 of the second phase of construction of a new production facility undertaken by Best Co., the first phase having been completed in July 2006. The Group's primary market for these batteries is the electrical bicycle manufacturers in Tianjin, Jiangsu and Zhejiang provinces. In this market, we have targeted large manufacturers with an annual production of over 100,000 bicycles. In addition, the sales revenue from the retail market for electric bicycles and accessories was #3.4 million in H1 2007, contributing 25.2% of the total PTB revenue which represents a six fold increase on the #0.48 million reported in H1 2006. The Group intends to develop the retail market for the Group's power type batteries business in the future. Turbine Business: The sales revenue of the turbine business was #3.6 million in H1 2007 (compared with #6.6 million in H1 2006) representing 8.7% of Group revenues and a marginal contribution to Group profits. The turbine business is not expected to make a material contribution to the Group this financial year. Dividend policy Against a background of growing demands for its products, the Company has invested significantly in expanding its manufacturing capacity. The directors believe that investing for continued growth rather than distributing profits is in the best interests of the Company and its shareholders at the current time. Accordingly the directors are not recommending an interim dividend. A decision concerning the sum to be paid in respect of the final dividend will be taken at the end of the financial year. Board changes In the period there have been some changes to the Board; Zhu Shiping reached retirement age and stepped down from the Board, Wang Zhaobin retired by rotation, and David Thomas left the Board as non-executive director and Company Secretary. On 12 July 2007 the Board appointed Zhou Weigang and Zhou Ping as executive directors and Peter Crystal as a non-executive director to the Board with immediate effect. These directors will be subject to retirement by rotation at the AGM in 2008 at which time they will be eligible for re-election by the shareholders. Outlook We will continue to focus on strategic fast growing sectors of the Chinese market. The intention is to both increase the Company's own production capacity and where appropriate make selective acquisitions. We look forward to reporting continued progress for the whole year as a whole. Cao Guifa Chairman 17 September 2007 Consolidated income statement For the six months ended 30 June 2007 Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) #000 #000 #000 Revenue 41,592 28,367 66,454 Cost of sales (31,769) (20,624) (47,654) Gross profit 9,823 7,743 18,800 Other operating income 614 517 790 Selling and distribution expenses (3,811) (3,351) (8,579) Administrative expenses (2,639) (1,907) (5,172) Other operating expenses (3) (5) (47) Profit from operations 3,984 2,997 5,792 Finance income 48 27 91 Finance costs (563) (319) (822) Profit before tax 3,469 2,705 5,061 Tax (458) (401) (789) Profit after tax 3,011 2,304 4,272 Attibutable to: Equity holders of the parent 2,870 2,045 4,003 Minority interests 141 259 269 3,011 2,304 4,272 Earnings per share in pence: Basic 12.29p 10.03p 18.30p Diluted 12.08p 9.88p 17.93p All amounts relate to continuing operations. Consolidated balance sheet As at 30 June 2007 Notes 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) #000 #000 #000 Assets Non current assets Property, plant and equipment 13,183 9,559 12,409 Other investment 131 - 130 Land use right 1,574 1,328 1,361 Other intangible assets 161 200 167 Deferred tax assets 118 27 31 15,167 11,114 14,098 Current assets Inventories 17,135 7,026 10,122 Trade receivables 20,819 20,051 15,009 Other receivables and prepayments 8,542 6,780 7,224 Due from related parties 2,193 3,010 1,011 Short-term investments 578 2,214 947 Cash and cash equivalents 4,331 10,274 9,937 53,598 49,355 44,250 Total assets 68,765 60,469 58,348 Liabilities Current liabilities Bank borrowings 18,727 13,433 12,236 Trade payables 11,577 6,862 7,547 Notes payable 3,917 5,642 4,041 Other payables and accruals 6,740 8,164 6,805 Amount due to customers for construction 1,416 2,084 2,309 contract work Due to related parties - 180 656 Income tax payable 199 164 145 Deferred tax liabilities 56 - 21 Total liabilities 42,632 36,529 33,760 Capital and reserves Share capital 2,334 2,334 2,334 Share premium 8,630 8,630 8,630 Other reserves 2,916 2,916 2,916 Statutory reserves 5,071 4,024 5,071 Retained earnings 9,102 6,045 6,769 Foreign currency translation reserve (2,960) (1,146) (2,272) Total equity attributable to equity holders of the parent 25,093 22,803 23,448 Minority interests 1,040 1,137 1,140 Total equity and liabilities 68,765 60,469 58,348 Consolidated statement of changes in equity For the six months ended 30 June 2007 Attributable to equity holders Share Share Other Statutory Retained Currency Total Minority Total capital premium reserves reserves earnings translation interests reserve #000 #000 #000 #000 #000 #000 #000 #000 #000 Balance as at 1 January 2006 2,000 3,875 2,916 4,024 3,837 (590) 16,062 16,062 - Net profit for the financial - - - - 2,045 - 2,045 259 2,304 period Foreign currency translation - - - - - (556) (556) (556) Total recognized income and 1,489 1,748 expense Acquisition of subsidiary - - - - - - - 878 878 Issue of ordinary shares on 314 4,716 - - - 5,030 - 5,030 placing Share issue costs - (201) - - - - (201) (201) Exercise of share options 20 240 - - - - 260 - 260 Share based payment expense Employee share options - - - - 163 - 163 163 Balance as at 30 June 2006 2,334 8,630 2,916 4,024 6,045 (1,146) 22,803 1,137 23,940 (unaudited) Net profit for the financial - - - - 1,958 - 1,958 10 1,968 period Foreign currency translation - - - - - (1,126) (1,126) (7) (1,133) Total recognized income and 832 835 expense Transfer to statutory reserves - - - 1,047 (1,047) - - - - Share based payment expense Employee share options - - - - 163 - 163 - 163 Dividends paid - - - - (350) - (350) - (350) Balance as at 31 December 2006 2,334 8,630 2,916 5,071 6,769 (2,272) 23,448 1,140 24,588 (audited) Net profit for the financial - - - - 2,870 - 2,870 141 3,011 period Foreign currency translation - - - - - (688) (688) 5 (683) Total recognized income and 2,182 2,328 expense Share based payment expense Employee share options - - - - 163 - 163 - 163 Dividends paid to external - - - - (700) - (700) - (700) shareholders Dividends paid to minority - - - - - - - (246) (246) Balance as at 30 June 2007 2,334 8,630 2,916 5,071 9,102 (2,960) 25,093 1,040 26,133 (unaudited) Consolidated cash flow statement For the six months ended 30 June 2007 Notes Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) #000 #000 #000 Net cash from operating activities (10,941) (3,011) 1,606 Cash flows from investing activities Purchase of associate - - - Purchase of land use right (241) - (807) Purchase of property, plant and equipment (1,106) (1,025) (4,905) Purchase of subsidiary undertakings - (499) 666 Purchase of investment - - (130) Purchase of short-term investment 375 (88) 1,664 Proceeds from disposal of property, plant and equipment 288 - 186 Cash flows used in investing activities (684) (1,612) (3,326) Cash flows from financing activities Net cash inflow from share placing - 5,163 5,089 Increase in short-term bank borrowings 6,454 1,350 153 Interest paid (493) (319) (822) Dividends paid - - (350) Cash flows from financing activities 5,961 6,194 4,070 Net increase in cash and cash equivalents (5,664) 1,571 2,350 Cash and cash equivalents at beginning of year 9,937 8,300 8,300 Foreign exchange differences 58 403 (713) Cash and cash equivalents at end of period 4,331 10,274 9,937 Notes to the consolidated cash flow statement (a) Cash flows from operating activities Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 #000 #000 #000 (Unaudited) (Unaudited) (Audited) Profit before tax 3,469 2,705 5,061 Adjustments for: Amortisation of other intangible assets 7 1 14 Amortisation of land use right 34 65 29 Allowance for doubtful trade debts 546 - 104 Allowance for doubtful non-trade debts 10 - 200 Depreciation of property, plant and equipment 560 719 820 Losses on disposal of property, plant and equipment (10) - 21 Gain on disposal of short-term investment - - - Profit on acquisition of subsidiary undertaking - 287 - Share based payment expense 163 163 326 Financial income (48) (27) (91) Financial expense 493 319 822 Operating profit before working capital changes 5,224 4,232 7,306 Working capital changes: (Increase)/decrease in: Inventories (6,990) (3,479) (6,392) Trade receivables (8,572) (8,098) 714 Other receivables, deposits and prepayments (2,243) (3,300) (115) Due from related parties 937 (1,047) 952 Increase/(decrease) in: Trade payables 3,710 2,943 444 Other payable and accruals (2,480) 5,190 (593) Notes payables (153) 1,516 (85) Due to related parties - (585) (109) Cash generated from/(used in) operations (10,567) (2,628) 2,122 Interest received 48 27 91 Income tax paid (422) (410) (607) Net cash from operating activities (10,941) (3,011) 1,606 Notes to the consolidated financial statements For the six months ended 30 June 2007 1. General information China Shoto plc is a company incorporated in the United Kingdom on 10 May 2005 under the Companies Act 1985. The consolidated financial statements of the Company for the six months ended 30 June 2007 comprise China Shoto plc (the ' Company') and its subsidiary undertakings (the 'Group'). The consolidated interim financial statements were authorised for issue on 17 September 2007. 2. Accounting policies Basis of preparation The unaudited consolidated financial information has been prepared using accounting policies consistent with those International Financial Reporting Standards and Interpretations in force ('IFRS'), as adopted by the European Union, and on the basis of the accounting policies disclosed in the financial statements for the year ended 31 December 2006, which are also expected to apply for the year ending 31 December 2007. This report is prepared in compliance with IAS 34 'Interim Financial Reporting'. The comparatives for the full year ended 31 December 2006 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 237(2)-(3) of the Companies Act 1985. Foreign currencies The functional currency of the subsidiary undertakings is Renminbi ('RMB'), and the unaudited financial statements of the subsidiary undertakings have been drawn up in RMB. The presentation currency of the Group is pounds sterling and therefore the financial statements have been translated from RMB to pounds sterling at the following exchange rates: Period-end rates Average rates 30 June 2006 #1 = RMB 14.6280 #1 = RMB 14.2700 31 December 2006 #1 = RMB 15.3232 #1 = RMB 14.7505 30 June 2007 #1 = RMB 15.2455 #1 = RMB 15.1841 Assets and liabilities are translated into sterling at the closing rate, and all income and expenses are translated at the average rate during the financial period, being an approximation for the actual rates at the date of the transactions. All resulting exchange differences are taken to the Exchange reserve within equity. 3. Segment reporting Reporting format The primary segment reporting format is determined to be business segments as the Group's risks and rates of return are affected predominantly by differences in the products and services produced. The operating businesses are organized and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The operating businesses are all located in the People's Republic of China. Business segments The Group is comprised of the following business segments: The Power Type Batteries ('PTB') business segment is comprised of power-aided bicycle batteries. The Back up batteries business segment includes Value Regulated Lead Acid Batteries and Flooded and Gel Batteries. The Turbine business segment includes the development and construction of new turbines and the refurbishment and reconstruction of existing turbines. Allocation basis and transfer pricing Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The following tables present certain sales, profit, assets, liability and other information regarding the Group's business segment for the years ended 30 June 2007, 30 June 2006 and 31 December 2006. Six months to June 30 2007 Back up PTB Turbine Eliminations Consolidated Batteries #000 #000 #000 #000 #000 Unaudited Unaudited Unaudited Unaudited Unaudited Revenue: Sales to external customers 24,525 13,465 3,602 - 41,592 Inter-segment sales 3 - - (3) - Total revenue 24,528 13,465 3,602 (3) 41,592 Results: Segment profit 3,302 726 1 - 4,029 Unallocated corporate expenses (560) Profit from operations before taxation 3,469 Income taxation (458) Profit for the year 3,011 Six months to June 30 2006 Back up PTB Turbine Eliminations Consolidated Batteries #000 #000 #000 #000 #000 Unaudited Unaudited Unaudited Unaudited Unaudited Revenue: Sales to external customers 15,088 6,637 6,642 - 28,367 Inter-segment sales 176 - - (176) - Total revenue 15,264 6,637 6,642 (176) 28,367 Results: Segment profit 1,952 683 620 - 3,255 Unallocated corporate expenses (550) Profit from operations before 2,705 taxation Income taxation (401) Profit for the year 2,304 Twelve months to December 31 Back up PTB Turbine Eliminations Consolidated 2006 Batteries #000 #000 #000 #000 #000 Audited Audited Audited Audited Audited Revenue: Sales to external customers 39,218 20,326 6,910 - 66,454 Inter-segment sales 1,706 1,166 - (2,872) - Total revenue 40,924 21,492 6,910 (2,872) 66,454 Results: Segment profit 3,961 1,566 552 - 6,079 Unallocated corporate expenses (1,018) Profit from operations before 5,061 taxation Income taxation (789) Profit for the year 4,272 4. Income Tax Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Audited) #000 #000 #000 Income tax expense is as follows: Current income tax 509 406 778 Deferred income tax (51) (5) 11 458 401 789 5. Dividends Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 #000 #000 #000 (Unaudited) (Unaudited) (Audited) Interim dividends 700 - 350 China Shoto plc declared a dividend of 1.5p per ordinary share amounting to #350,215.5 on 3 November 2006 to its shareholders at that date. China Shoto plc declared a dividend of 3p per ordinary share amounting to #700,431 on 26 April 2007 to its shareholders at that date. 6. Earnings per share Earnings for the purpose of basic and diluted earnings per share are the net profit for the financial period for the six months ended 30 June 2007 of #2,870,000 (30 June 2006: #2,045,000) and twelve months ended 31 December 2006 of #4,003,000. The weighted average number of ordinary shares used in the calculation of earnings per share has been derived as follows: Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 #000 #000 #000 (Unaudited) (Unaudited) (Audited) Number of ordinary shares Weighted average number of ordinary shares - basic 23,343,770 20,388,348 21,880,671 Dilutive effect of share options 411,971 320,746 441,050 Weighted average number of ordinary shares - diluted 23,755,741 20,709,094 22,321,721 7. Share capital 30 June 30 June 31 December 2007 2006 2006 #000 #000 #000 (Unaudited) (Unaudited) (Audited) Authorised 100,000,000 Ordinary shares of 10p each 10,000 10,000 10,000 Allotted, called up and fully paid: 23,343,770 (2005 : 20,000,020) Ordinary shares of 10p each 2,334 2,334 2,334 The numbers of share capital is 20,000,020 as at 1 January 2006. The changes from1 January 2006 are the following: On 3 April and 5 May 2006, 200,000 ordinary shares of 10p were issued in respect of the exercise of share options granted to the Company's advisers at the time of the flotation. The weighted average price of options exercised in the year was 130 pence. On 12 June 2006, 3,143,750 ordinary shares of 10p were issued in connection with the placing. 8. Other Copies of this document will be made available to the public free of charge for a period of one month at the offices of Seymour Piece Limited, 20 Old Bailey, London, EC4M 7EN. This information is provided by RNS The company news service from the London Stock Exchange END IR LRMATMMIBBRR
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