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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Kada Tech | LSE:KADA | London | Ordinary Share | BMG8310Y1066 | ORD USD0.10 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.505 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMKADA
RNS Number : 2829P
Kada Technology Holdings
30 September 2013
30 September 2013
Kada Technology Holdings Limited
("Kada" or the "Group")
Interim Results
Kada Technology Holdings Limited (AIM:KADA), the China-based provider of components and devices for the IT industry and consumer electronics,today announces its unaudited results for the six months ended 30 June 2013.
Highlights
- Revenues of US$46.7 million (H1 2011: US$64.4 million) - Profit before tax of US$1.7 million (H1 2012: US$8.0 million) - Earnings per share of US$0.03 (H1 2012: US$0.11) - Net assets US$29.6 million at 30 June 2013 (30 June 2012: US$28.1 million)
Commenting on the Interim Results, Ivor Shrago, Chairman of Kada, said: "The first six months of 2013 have proved to be a period of significant strategic change for Kada. Our Solutions Package business has continued to struggle as demand in China has cooled as use of smartphones and tablets has increased. Margins in our Electronic Components business have again been squeezed through increased competition and a deteriorating economic climate in China. The Company continues to focus on winning larger more established clients to improve its cashflow and offset inventory and accounts receivable risk. The Board believes that 2013 is a year to consolidate our trading business and develop our hardware and software solutions (i.e. media kiosk project) with potential clients so that they will be delivering material revenues in 2014."
- Ends -
For further information:
Kada Technology Holdings Limited Paul He Xuebo, Chief Executive Officer Tel: +44 (0) 20 7398 7719 www.kada-ir.com finnCap Limited Geoff Nash / Christopher Raggett Tel: +44 (0) 20 7220 0500 www.finncap.com
Notes to Editors
Kada was founded in 2004 and provides solutions for electronic devices, systems and media platforms (the "Solution Packages Business"). The Group also distributes and sells electronic components and provides technical support (the "Electronic Component Business"). Kada is headquartered in Shenzhen with offices in Hong Kong, Beijing, Shanghai, Zhuzhou and Mianyang in China, as well as Kuala Lumpur in Malaysia.
Kada's Distributorship Division distributes and trades a multitude of electronic components, (Kada is now mainly trading LCD, LCM and PCBA). Kada sources electronic components from a number of suppliers that are based locally as well as from countries including Taiwan, Hong Kong and the USA. Many of Kada's electronic components are used in the manufacture of consumer electronics, internet terminals and routers as well as communication devices and media players.
The Company's Solutions Business involves the design, development and sale of solutions packages for electronic devices (such as netbooks, Netbox, handheld/tablet PC). Solutions packages include product definition, structural, mechanical, visual and circuitry design, prototype testing, underlying software development, pilot production and production support. Solutions packages are either commissioned by customers or conceptualised in-house. The solutions packages offered by the Company are flexible ranging from designs of motherboard, to the development of a complete electronic device. Kada is currently expanding downstream into the provision and operation of a wireless media solution that incorporate small display terminals, mounted on a taxi's front passenger headrest that disseminates multimedia information and advertising programs for passengers. Taxis on the road will receive uploads of real-time information and data (for example local attractions, history, news highlights, public services information and simple interactive games and animations), via 3G or WiFi network, which are automatically displayed to the taxi passengers. Kada has rolled out the wireless taxi media solution in Mianyang city, Sichuan Province, PRCin late 2011, as a marketing showcase to demonstrate its wireless media technology capability.
For further information on the Group, please visit Kada's investor relations website at www.kada-ir.com.
Business Review
Both of our divisions have suffered as the Chinese economy slowed during the first half of the year. This has been compounded by the newly elected Government officials not taking their seats till April which has seen many state owned enterprises ("SOE")in China delay any spending decisions until later in 2013. During 2012 in our Electronic Components division, we had seen demand for our products from overseas fall but were pleased that we managed to win some domestic blue chip business (e.g. Putian). In 2013, we have seen domestic demand fall back but we continue to see good demand for LCD screens, albeit at increasingly tighter margins. The Board believe that given the changing economic climate its strategy of focusing on large SOE clients to limit any accounts receivable risk is a prudent one. We believe that now is the right time to consolidate our trading business, starting with our clients, so that the Company has a solid base from which to grow and add new revenue streams in 2014 and beyond.
As set out in our 2012 annual accounts we had seen a decline in revenues in our Solution Packages division as demand fell because of our customers continued focus on netbooks, smartphones and handheld PC's. This trend has continued to gather pace in the first half of 2013 meaning our revenues from this division are materially down. The Board had hoped that any slack in the Solution Packages business would be picked up by revenues from new products such as City Service Media Kiosk / Airport Trolley Media System / Wireless Taxi Media. However, although we are still excited about the potential of these new products we believe that any meaningful revenues from them will be first seen in 2014.
Financial Review
For the six months ended June 2013, turnover was USD46.7m (H1 2012: USD64.4m). Turnover for the electronic components division was USD46.0m(H1 2012: USD58.4m), and accounted for approximately 98.6% (H1 2012: 90.7%) of the Company's turnover. Turnover from solution packages business was USD0.65m (H1 2012: USD6.0) representing around 1.4% (H1 2012 9.3%) of the Company's turnover. Due to the drop in margin from electronic components division, the Company has an overall gross profit margin of around 4.96% in the first half of 2013 compared to 14.4% margin in the corresponding period in last year. The Company achieved a net profit of USD1.45m (H1 2012: 6.9m) for the period.
The drop in revenue in the Company's electronic components division was due to a drop in demand from our domestic clients. This was coupled with the increasing competitive Information and Communications Technology ("ICT") industry that has caused the Company to focus on more established but lower margin clients.
Due to the slowing economic environment there has been a slight increase in the amount of trade receivables outstanding compared to y/e 2012 as seen in the table below.
At At 30 June 2013 31 December 2012 USD'000 USD'000 (unaudited) (audited) Trade receivables 45,391 41,272 Prepayments to suppliers 10,212 5,709 Other receivables 536 611 56,139 47,592 -------------- ------------------
The Board believe that all trade receivables will be collected during the normal course of business and none should be considered bad debt.
Outlook
We believe that the second half of the year will see a similar level of performance to the first half. The Company continues to focus on winning new clients and particularly larger key clients to improve working capital and cash flow and consolidate its trading business. In addition, we focus on the collection of trade debtors and will seek to expedite the delivery of firm orders following pilot tests for our new products. The most advanced of which will be the media kiosk project which we expect to complete pilot testing in 2013 and deliver 30,000 units in 2014 (each priced at USD$1,385) and delivering a net profit margin of 9%. Although, we believe the media kiosk project will achieve revenue for the Company first, the wireless taxi media should complete testing in early 2014 with contract orders expected to follow. We look forward to updating shareholders on these developments in due course.
Ivor Shrago
Chairman
30 September 2013
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2013
6 months 6 months ended ended 30 Jun 30 Jun 2013 2012 Unaudited Unaudited USD'000 USD'000 Revenue 46,704 64,417 Cost of sales (44,388) (55,172) ---------- ---------- Gross profit 2,316 9,245 Other income 473 275 Selling and distribution expenses (167) (356) Administrative expenses (786) (959) Finance costs (172) (220) ---------- ---------- Profit before tax 1,664 7,985 Income tax expense (217) (1,103) ---------- ---------- Profit for the period 1,447 6,882 Other comprehensive income Exchange differences on translation of foreign operations 34 82 ---------- ---------- Total comprehensive income for the period 1,481 6,964 ========== ========== Attributable to: Equity Shareholders of the Company 1,507 6,995 Non-controlling interest (26) (31) ---------- ---------- 1,481 6,964 ========== ========== Earnings per ordinary share Basic and diluted 0.025 0.11 ========== ==========
Condensed consolidated statement of financial position
as at 30 June 2013
30 Jun 30 Jun 2011 2012 Unaudited unaudited USD'000 USD'000 ASSETS Non current asset Plant and equipment 106 142 Intangible assets 75 34 Deferred tax 590 601 ---------- ---------- 771 777 Current assets Inventories 2,214 833 Trade and other receivables 56,139 47,592 Tax recoverable 167 - Derivative financial assets - 81 Cash and cash equivalents 8,116 13,009 ---------- ---------- 66,636 61,515 ---------- ---------- Total assets 67,407 62,292 ========== ========== EQUITY AND LIABILITIES Capital and Reserves Share capital 5,796 5,796 Share premium 1,924 1,924 Other reserves (4,087) (4,121) Retained earnings 26,018 24,545 ---------- ---------- Equity attributable to owners 29,651 28,144 Minority Interest (36) (10) ---------- ---------- Total equity 29,615 28,134 ---------- ---------- Liabilities Non-current Deferred tax liabilities 50 50 Borrowings 2,607 958 ---------- ---------- 2,657 1,008 ---------- ---------- Current Borrowings 20,804 11,398 Trade and other payables 5,554 10,856 Corporate income tax payable 8,777 10,896 35,135 33,150 ---------- ---------- Total equity and liabilities 67,407 62,292 ========== ==========
Condensed consolidated statement of cash flows
for the six months ended 30 June 2013
6 months 6 months ended ended 30 Jun 30 Jun 2013 2012 Unaudited Unaudited USD'000 USD'000 Profit before income tax 1,664 7,985 Adjustments for: Interest expenses 172 220 Interest income (147) (185) Depreciation of property, plant and equipment 33 38 Amortisation of intangible assets 69 7 Derivative financial assets 81 38 ---------- ---------- 1,872 8,103 Operating profit before working capital changes (Increase)/decrease in inventories (1,381) 395 Increase in trade and other receivables (8,547) (3,433) Increase in other current assets - (8) Decrease in trade and other payables (5,302) (1,802) ---------- ---------- (13,358) 3,255 Cash generated from operations Interest received 147 185 Tax paid (2,503) - ---------- ---------- Net cash (used in)/ from operating activities (15,714) 3,440 ---------- ---------- Investing activities Purchase of property, plant and equipment - (2) Purchase of intangible assets (110) (1) Proceeds from sale of derivative financial assets - 125 ---------- ---------- Net cash (used in)/from investing activities (110) 122 ---------- ---------- Financing activities Dividend paid - (4,531) Interest paid (172) (220) Borrowings 11,055 1,052 Share redemption - ---------- ---------- Net cash inflow/(outflow) from financing activities 10,883 (3,699) ---------- ---------- Net decrease in cash and cash equivalents (4,914) (137) Cash and cash equivalents at beginning of period 13,009 9,365 Effect of foreign exchange rate changes 48 7 ---------- ---------- Cash and cash equivalents at end of period 8,116 9,235 ========== ==========
Condensed consolidated statement of changes in equity
for the period ended 30 June 2013
Share Share Combination Translation Statutory Retained Total capital Preimum reserve reserve reserve earnings equity USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 At 31 December 2011 - 1,333 113 164 17,839 19,449 Profit for the period - - - - 6,913 6,913 Other comprehensive income - - 82 - - 82 Reorganisation 5,721 (5,721) - - - - --------- --------- ------------ ------------ ---------- ---------- -------- At 30 June 2012 5,721 (4,388) 195 164 24,752 26,444 At 31 December 2012 5,796 1,924 (4,388) 190 77 24,545 28,144 Profit for the period - - - 32 2 1,473 821 Other comprehensive income - - - - - - 34 --------- --------- ------------ ------------ ---------- ---------- -------- At 30 June 2013 5,796 1,924 (4,388) 222 79 26,018 28,999 Attributable to non-controlling interest Shares Retained Total minority in subsidiary earnings interest USD'000 USD'000 USD'000 Balance at 31 December 2011 63 (13) 50 Losses for the period - (31) (31) Balance at 30 June 2012 63 (44) 19 --------------- ---------- --------------- Balance at 30 December 2012 63 (73) (10) Losses for the period - (26) (26) --------------- ---------- --------------- Balance at 30 June 2013 63 (99) (36) --------------- ---------- ---------------
Notes to the condensed consolidated financial statement
1. General information
Kada Technology Holdings Limited ("Kada") is a company incorporated under the law of Bermuda. The address of the registered office is Claredon House, 2 Church Street, Hamilton, HM11, Bermuda.
The principal activity of Kada and its subsidiaries (the "Group") is the development and provision of solutions for electronic devices, systems and media platforms. The Group also distributes and sells electronic components for which it provides technical support. Recently, the Group has ventured into the provision and operation of its own bespoke media platform. The principal place of business of the Group's operation is at Room 505, Building C, Huashan Science and Technology Building, Langshan Road, Nanshan District, Shenzhen.
These condensed financial statements are presented in the nearest thousands and US dollars, the presentation currency of the group. The functional currencies of the principal subsidiaries are Renminbi ("RMB") of the PRC and Hong Kong Dollar ("HKD").
2. Basis of preparationand accounting policies
The Group's interim financial information for the six months ended 30 June 2013, including comparative financial information, has been prepared on the basis of the accounting policies set out in the last audited consolidated financial statements, which are based upon the International Financial Reporting Standards ("IFRS") and interpretations as adopted by the EU. This interim report has been prepared in accordance with the AIM Rules for Companies and in accordance with IAS34 'Interim financial reporting', as issued by the International Accounting Standards Board and adopted by the European Union.
These condensed financial statements have been prepared under the historical cost basis except for certain financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange of assets.
The Group's interim results for the six month period ended 30 June 2013 are unaudited and were approved by the Board of Directors on [29 September 2013].
The preparation of the interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may subsequently differ from those estimates.
Notes to the condensed consolidated financial statement - continued
2. Basis of preparationand accounting policies - continued
In preparing the interim financial statements, the significant judgements made by management in applying the Group's accounting policies and key sources of estimation uncertainty were the same, in all material respects, as those applied to the audited consolidated financial statements for the year ended 31 December 2012.
3. Segmental analysis Solution Electronic package Component Total USD'000 USD'000 USD'000 6 months ended 30 June 2013 Revenue 652 46,052 46,052 ========= =========== ======== Segment results (106) 1,108 1,002 Unallocated profit 10 Profit before income tax 1,012 ========= =========== ======== 6 months ended 30 June 2013 Revenue 5,984 58,433 64,417 Segment results 3,856 4,237 8,093 Unallocated loss (108) Profit before income tax 7,985 ========= =========== ======== 4. Taxation
The group operates in Hong Kong and the PRC and disclosed the corporate income tax rate applicable in the jurisdiction in which the principal subsidiary domiciled which is in Hong Kong.
Kada is regarded as resident for the tax purposes in Bermuda. There are no applicable taxes in Bermuda for the company.
The taxation charge is based upon the expected effective rate for the period ended 30 June 2013.
Notes to the condensed consolidated financial statement - continued
5. Earnings per share 6 months 6 months to to 30 Jun 30 Jun 2013 2012 Proforma USD USD Earnings per share: 0.025 0.11
The above calculated on the profit for the financial periods attributable to the Equity shareholders of Kada Technology and assumes the 57,956,840 Ordinary Shares of US$0.10 each existed throughout the period ended 30 June 2013 and 30 June 2012, and year ended 31 December 2011.
As there were no potential dilutive ordinary shares during the financial years and period
presented in these consolidated financial statements, no diluted earning per share is
presented.
6. Share capital
The issued share capital of the company as at 30 June 2013 is USD 5,721,740 fully paid.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. All shares rank equally with regards to the company's residual assets.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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