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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Jarlway | LSE:JWY | London | Ordinary Share | GB00B09JC675 | ORD 0.25P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.375 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Jarlway
JARLWAY HOLDINGS PLC
INTERIM RESULTS
FOR THE 6 MONTHS ENDED 30 JUNE 2005
September 30, 2005. Jarlway Holdings plc ("the Company") (JWY), the holding
company for Jarlway Machinery Inc. ("Jarlway"), one of China's largest concrete
pump manufacturers, today announced its interim results for the six months ended
30 June 2005.
Financial Highlights:
-- Turnover of £2,594,000
-- Gross Profit of £1,030,000, gross margin 39.7%
-- Profit before income tax of £578,000, 22.3% of turnover
Operating Highlights:
-- Sale of 132 trailer pumps in the period
-- Admission to trading on AIM successfully completed after the period end
-- Government ban on on-site concrete mixing in 240 Chinese cities at the end
of 2005 predicted to have positive impact on use of concrete pumps
Mr Wu Zhi Jia, Chairman commented: "I am pleased to present our first interim
results since admission to trading on AIM in July 2005. These cover the six
months ended 30 June 2005 during which Jarlway continued to strengthen its
position in the Chinese market. We are satisfied with the results achieved in
the first half of the year and, despite certain challenging conditions that have
arisen in the beginning of the second half, we are confident in the Group's
long-term growth potential, especially given the government's recent initiative
to ban on-site concrete mixing from 2006 onwards which will directly benefit
Jarlway moving forward. Our objectives are to develop further our expertise in
producing high quality, reliable and innovative concrete pumps and to
consolidate our sales network throughout China in order to respond to the
growing demand in the construction industry domestically and internationally."
For further information, please contact:
Jarlway Holdings plc Shared Value Limited
KM Wong Alex Dee / Nicolas Duperrier
Tel: +852 9094 5465 Investor & Media relations
Tel. +44 (0) 20 7321 5010
Nabarro Wells & Co. Limited
Robert Lo
Tel: +44 (0) 20 7710 7400
Jarlway Machinery Inc. ("Jarlway") is one of the largest concrete pump
manufacturers in the People's Republic of China. Jarlway is engaged in the
development and sale of large-scale construction machinery including trailer
concrete pumps, truck mounted concrete line pumps and concrete boom pumps and
concrete mixing stations. Jarlway utilizes patented and reliable technology
supported by a network of 27 regional sales and service stations throughout most
of China. Jarlway's products are assembled under processes that have been
certificated to standards similar to ISO9001.
More information about Jarlway Holdings plc and its products can be found on
line at www.jarlway.com
Chairman's Review
Overview
During the first half of 2005, the concrete pumps market in China became more
challenging as a result of the tightening of macro-economic policy by the
Chinese government. Despite some resultant pricing pressure, the number of
trailer pumps sold has been broadly in line with expectations and the Group has
continued to upgrade its products so as to remain competitive and to make use of
the "Jarlway" brand name to realise its aim of becoming the leading concrete
pump manufacturer in China.
Operating Performance
During the first half of 2005 in the run-up to the Company's flotation, the
Company implemented measures to control closely production costs including
product design, sourcing of raw materials and production flow. Strict controls
have been placed on the procurement of raw materials and on the selection and
assessment of vendors. Quality controls are now more stringent on all parts and
components purchased.
Extensive market analysis has enabled the Company to concentrate its efforts and
resources on developing those market segments which offer the best potential
returns. The distribution network and the sales team have been strengthened and
Jarlway's products are now sold and serviced through the Company's 27 sales
offices covering most provinces in China.
An emphasis on quality management systems and a free one-year-after sales
service with regular engineer visits has led to lower warranty costs and a
higher degree of customer satisfaction, consolidating the "Jarlway" name as a
provider of quality products and services.
Management believes that Jarlway products are developing a reputation for
reliability and that this is attributable to the substantial use of components
sourced from international suppliers such as Schneider of France, Mitsubishi and
Panasonic of Japan, Rexroth of Germany, Galtech of Italy and Esso of the US. In
addition, Jarlway PRC's patented programmable logic controller (which controls
lubrication, ensuring that concrete is not degraded by grease contamination)
increases the reliability of Jarlway PRC's products. This is critical to
minimise potentially costly delays in construction projects. In 2004, Jarlway
PRC was awarded a ''Zero Defect'' user title by Rexroth.
In the first six months to 30 June 2005, Jarlway has continued to develop high
quality products to meet market demands. More investment was made in a new
generation of products including an "intelligent" trailer pump which is now
undergoing on-site testing and is expected to be launched into the market in the
second half of the year. The technical testing of a new model of line pump was
also completed and this product is expected to be launched late in 2005.
Financial Performance
Revenue for the period was £2,594,000, of which over 97% was attributable to the
sale of trailer pumps. The remainder came from the sale of spare parts and
maintenance work. Gross profit was £1,030,000, representing a margin of 39.7%
and profit before tax was £578,000, 22.3% of sales.
AIM Listing
The Company's shares were admitted to trading on AIM and dealings commenced on
18 July 2005. The gross amount raised was £1.25 million. Jarlway's new status as
a public listed company has raised its profile with its customers and will
provide trading benefits in the years ahead.
Outlook
Whilst the directors are pleased with the Company's performance in the first
half of the year, the second half has been less robust to date, with the
tightening of PRC Government fiscal policy resulting in a reduced ability of the
Company's Chinese customers to obtain mortgage finance for purchases.
Consequently, the Directors expect a lower level of unit sales of trailer pump
in the second half. Sales of larger ticket line and boom pumps are not now
expected before the fourth quarter. The Company has, however, made its first
sales into India and is receiving an encouraging level of enquiries from
potential export customers.
In the mid to long-term, there is enormous potential for the construction
machinery industry in China, with an initiative to ban on-site concrete mixing
from 2006 onwards. This practice has already been banned in 162 major cities
since 2004 and, by the end of 2005, on-site concrete mixing will be banned in
240 major cities in the country. This should increase the production volume of
ready-mix concrete and necessitate the use of concrete pumps in order to lay the
concrete before solidification.
Jarlway is well positioned to benefit from this change in policy thanks to the
development of its line and boom pumps. These have great mobility advantages
over trailer pumps. Because they are truck mounted, no heavy-lifting equipment
is needed to load the pump onto a lorry, nor does the 8 kilometre per hour road
speed limit apply to trailer pumps. The time required to relocate a line pump to
different locations is significantly less, making the line pump particularly
suitable for customers who need frequent pumping of concrete at different sites,
such as ready mixed concrete suppliers (concrete mixing plants) and concrete
machine leasing companies.
Boom pumps additionally possess a ''boom'', or pre-installed ducting. This
reduces time and related costs in connecting and disconnecting ducting before
and after concrete pumping. With a pumping rate of up to 140 to 180 cubic metres
of concrete an hour, management believes that the boom pump is capable of
performing the same amount of work done by five trailer pumps.
According to the "China Highway Network Planning", 85,000kms of highway is
scheduled to be completed by 2020 at a total investment in the region of RMB 2
trillion. The construction of the passenger network by China Railway will see
the procurement of related equipment and machinery entering its peak phase in
the coming two years. These projects, together with other massive infrastructure
projects involving the transportation of water and electricity resources within
the country, and special events like the 2008 Beijing Olympics and 2010 Shanghai
Expo, will involve heavy demand for every kind of construction machinery.
Management is confident that the Group is well positioned to weather current
market conditions and to take full advantage of the potential and become an even
stronger player in its field as the opportunities arise.
INTERIM CONSOLIDATED FINANCIAL STATEMENT
AS OF 30 JUNE 2005
UNAUDITED
- -
JARLWAY HOLDINGS PLC
CONSOLIDATED PROFIT & LOSS
For the six months ended 30 June 2005
Six months
ended
30 June 2005
(unaudited)
Note £'000
Turnover 5 2,594
Cost of sales (1,564)
-------------
Gross profit 1,030
Other revenue 3
Distribution costs (267)
Administrative expenses (188)
-------------
Profit for the period 578
Income tax 6 (44)
-------------
Profit after taxation 534
-------------
Earnings per share
Basic 7 6.71p
-------------
Proforma Basic 7 4.45p
-------------
JARLWAY HOLDINGS PLC
CONSOLIDATED BALANCE SHEET
As at 30 June 2005
As at
30 June 2005
(unaudited)
Note £'000
Assets
Non-current assets
Property, plant and equipment 391
Restricted bank balance, non-current 10 410
Other investments 6
Deferred tax assets 38
-----------
845
-----------
Current assets
Inventories 576
Trade and other receivables 6,235
Restricted bank balance, current 10 85
Cash and cash equivalents 236
-----------
7,132
-----------
-----------
Total assets 7,977
-----------
Equity and liabilities
Capital and reserves
Share capital 11 50
Retained profits 11 3,572
Merger reserve 11 (49)
-----------
Total equity 3,573
-----------
Non-current liabilities
Non-current portion of bank borrowings 144
-----------
144
-----------
Current liabilities
Trade and other payables 9 3,097
Current portion of bank borrowings 1,059
Income tax payable 104
-----------
4,260
-----------
Total liabilities 4,404
-----------
Total equity and liabilities 7,977
-----------
JARLWAY HOLDINGS PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2005
Six months
ended
30 June 2005
(unaudited)
£'000
Cash generated from operations 311
Tax paid (58)
-----
Net cash generated from operating activities 253
Net cash generated from investing activities 425
Net cash used in financing activities (588)
-----
Net increase in cash and cash equivalents 90
Cash and cash equivalents at 1 January 2005 120
Effect of exchange rate differences 26
-----
Cash and cash equivalents at 30 June 2005 236
-----
Operating activities:
Profit for the period 578
Adjustment for:
Investment revenue (3)
Depreciation of property, plant and equipment 12
-----
Operating cash flows before movements in working capital 587
Increase in inventories (235)
Increase in receivables (294)
Increase in payables 250
-----
308
Interest received 3
-----
Cash generated from operations 311
-----
JARLWAY HOLDINGS PLC
NOTES TO THE INTERIM RESULTS
For the six months ended 30 June 2005
1. The interim results for the period ended 30 June 2005 are unaudited and do
not constitute statutory accounts within the meaning of s.240 of the Companies
Act 1985. They have been prepared in accordance with accounting policies adopted
in the admission document issued in relation to the admission of Jarlway
Holdings plc to the AIM market ("AIM") on 18 July 2005 ("the Admission").
2. Pursuant to a share exchange agreement entered into on 19 April 2005 between
Jarlway Holdings plc and the shareholders of Jarlway International Limited,
Jarlway Holdings plc acquired the entire issued share capital of Jarlway
International Limited for a consideration which was satisfied by the issue and
allotment to the shareholders of Jarlway International Limited of an aggregate
of 50,000 Ordinary Shares including the subscriber shares, each of which was
credited as fully paid.
3. The Group comprises: Jarlway Holdings plc, the ultimate holding company;
Jarlway International Limited, an intermediate holding company; Jarlway
Machinery Inc, the trading subsidiary. The Group profit and loss account for the
period ended 30 June 2005 comprises the results of all of the above companies
for the six months ended 30 June 2005.
The results of Jarlway Machinery Inc. have been consolidated on the acquisition
basis by Jarlway International Limited. The results of Jarlway International
Limited have been consolidated on the merger basis following the share exchange
on 19 April 2005.
Due to the fact that Jarlway International Limited acquired Jarlway Machinery
Inc on 26 November 2004 the group has not presented comparative figures as it
was felt that these would not be meaningful.
The interim results recognise the factored debts secured by bank borrowings in
accordance with International Accounting Standards. The financial information
contained in the AIM admission document dated 18 July 2005 reflected these
transactions as contingent liabilities without provision. The effect of this
change in presentation is to increase trade and other receivables by £1,203,000,
non-current bank borrowings by £144,000 and current bank borrowings £1,059,000.
4. Renminbi ("RMB") is the currency of the primary economic environment in which
the entity operates ("The functional currency").
Pounds sterling is the currency in which the interim results are presented ("The
presentation currency"). For the purposes of the interim results, the financial
information has been translated from RMB to £ at the exchange rate ruling at 30
June 2005. The results of the foreign subsidiaries undertaking have been
translated at the average rate ruling during the period.
5. The principal activity of the Company is investment holding.
Details of the principal activities of the wholly-owned subsidiaries are as
follows:
JARLWAY HOLDINGS PLC
NOTES TO THE INTERIM RESULTS
For the six months ended 30 June 2005
Subsidiaries Principal activities
------------------------------------------------------------------------------------
Jarlway International Limited Investment holding
Jarlway Machinery Inc* Manufacturing and trading of concrete pumps
Turnover represented the sale of concrete pumps in the People's Republic of
China ("PRC" or "China") excluding Hong Kong.
*The holding in Jarlway Machinery Inc is held by Jarlway International Limited.
6. Taxation
Six months
ended
30 June
2005
(unaudited)
£'000
PRC Enterprise income tax on income for the period 44
-----------
7. The figures for basic earnings per share are based on the profit attributable
to the Group of £534,000 and the weighted average number of ordinary shares of
7,955,802.
The proforma basic earnings per share is based on the profit attributable to the
Group of £534,000 and on the assumption that the shares issued upon admission to
AIM has been in issue for the whole period, giving a weighted average number of
ordinary shares for the six month period of 12,007,159.
No diluted earnings per share have been presented as there are no dilutive
potential ordinary shares in issue for the six months ended 30 June 2005.
8. The Directors do not propose an interim dividend.
9. Included in trade and other payables is an amount due to a director of
£525,000. The amount due is unsecured, interest-free and has no fixed repayment
terms.
10. Restricted bank balance
As at
30 June
2005
(unaudited)
£'000
Current 85
Non-current 410
-----------
495
-----------
JARLWAY HOLDINGS PLC
NOTES TO THE INTERIM RESULTS
For the six months ended 30 June 2005
The restricted bank balance was pledged to secure bank borrowings granted to
Jarlway Machinery Inc. Amounts that will be released back to Jarlway Machinery
Inc within one year have been classified as current.
11. Reconciliation of movement in capital and reserves
Share Merger Retained
capital reserve profits
(unaudited) (unaudited) (unaudited)
£'000 £'000 £'000
As at 1 January 2005 50 (49) 2,828
Exchange translation difference - - 210
Profit for the period - - 534
----------- ----------- -----------
As at 30 June 2005 50 (49) 3,572
----------- ----------- -----------
12. Post balance sheet event
On 18 July 2005, trading of the ordinary shares of Jarlway Holdings plc
commenced on AIM, a market operated by the London Stock Exchange. 4,166,667 new
Ordinary Shares have been issued in a Placing at a Placing Price of 30p per
share. A further 246,666 new Ordinary Shares have been issued as part of the
settlement of adviser fees and commissions. The Placing Shares represent 17.1%
of the enlarged share capital. On Admission, the Company had 24,413,333 Ordinary
Shares in issue and a market capitalization at the Placing Price of £7.3
million. Certain warrants and options have been granted to the Company's broker,
directors and key employees of the Company.
Independent Review Report by MRI Moores Rowland LLP to the shareholders of
Jarlway Holdings plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 June 2005 set out on pages 6 to 11 and we have read the
other information contained in the interim report for any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the AIM admission document except where changes, and the
reason for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data, and based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2005.
MRI Moores Rowland LLP
Chartered Accountants
Registered Auditor
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