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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Polymer Log. | LSE:POLL | London | Ordinary Share | NL0000687465 | ORD EUR0.01 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 8.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 0754C
Polymer Logistics N.V.
27 August 2008
Embargoed for 7.00am, Wednesday 27 August 2008
POLYMER LOGISTICS N.V.
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008
Polymer Logistics N.V. (the 'Group' or the 'Company'), a leading provider of sustainable 'one touch' Retail Ready Packaging (RRP)
solutions to retailers and suppliers in the UK, Continental Europe and the US, announces its interim results for the six months to 30 June
2008.
Financial Highlights
* Revenue up 79.4% to EUR21.0m (1H07: EUR11.7m)
* EBITDA of EUR2.8m (1H07: EUR2.7m) following a period of a substantial investment and expenses to support the launch of the business in
the US
* Post-tax loss of EUR2.0m (1H07: profit of EUR0.8m)
* Loss per share of EUR0.03 (1H07: earnings per share of EUR0.01)
* Positive cash flow from operations of EUR2.0m (1H07: EUR0.1m)
* Order pipeline as at 26 August 2008 for second half of 2008 is EUR20m
Operational Highlights
* Consolidation of new operations in US, Italy and Israel
* Increased penetration of customers and extended contract with HEB Texas and Fresh & Easy in the US
* Continued expansion of product range
* Investment programme in plant and equipment ongoing in second half
* Strengthened management team across the Group executing well
Zvi Yemini, Polymer Logistics' Chairman, commented:
"I am pleased to report the progress we have made in the first half, particularly the growth in our US and Italian businesses. We were
encouraged by the solid platform being built which allowed the Company to win two more contracts and secured the extension of an existing
contract during the first half of 2008. However, we are starting to feel some softness in the markets in which we operate, especially in the
UK where capital expenditure is being held back. Whilst we expect revenues and profitability from our pool business (accounting for 80% of
Group revenues) to be in line with market expectations, the economic slow-down combined with increases in raw material and transport prices
has negatively impacted our sales revenue and overall profitability. As a result, although revenues and operating profits are expected to be
significantly weighted towards the second half of the year, consistent with the normal seasonality of the business, we expect the bottom
line outcome for the year to be significantly below market expectations. Due to the uncertain full year outlook, the Board has recommended suspension of the payment of an interim dividend
pending a further review at the end of the current financial year.
"Analysing the Company's strengths, we believe that we now have a proven infrastructure in the countries where we operate and we are
taking appropriate measures to align costs to market conditions. In addition, the Company is developing into an increasingly geographically
diversified business, significantly reducing its high reliance on the UK market. Our order pipeline of EUR20m for the second half of 2008,
the cash generative qualities of the business and the increasing need for retailers and suppliers to conform to environmental packaging and
logistics practices underpins our confidence in the medium and long term prospects for the Group."
Enquiries:
Polymer Logistics N.V. +31 (0) 164 271 660
Gideon Feiner, Chief Executive Officer
Dana Gerner, Chief Financial Officer
Financial Dynamics +44 (0)20 7831 3113
Harriet Keen / Matt Dixon
Collins Stewart Europe Limited +44 (0)20 7523 8350
Mark Connelly / Oliver Quarmby
Notes to Editors:
Polymer Logistics is a provider of sustainable 'one-touch' logistics solutions to leading retailers and suppliers in the UK, Continental
Europe and the US.
Polymer Logistics' Retail Ready Packaging (RRP) is designed to be 'display ready' from factory to the point of sale. Consumers purchase
directly from RRP units in-store, with no requirement for retailers to unpack goods from the RRP units onto the shelves. The units are
reusable, thereby reducing the environmental impact due to the volume of waste created by disposable 'one-way' packaging made out of timber
or cardboard. In addition, Polymer Logistics' RRP units are stackable and foldable and are designed to maximize the capacity of delivery
vehicles which reduces the number of trips required to be taken in the logistics loop.
Polymer Logistics is based in The Netherlands with subsidiaries in the UK, Israel, Italy and the US and branch office in Spain. Its
principal customers are located in the United Kingdom Continental Europe and in the US. The Group has ongoing relationships with a number of
blue chip retailers including Tesco, Asda, Sainsbury and Fresh & Easy, as well as blue chip FMCG suppliers including Coca Cola Enterprises
Limited, Danone Waters, Britvic Soft Drinks and Arla Food.
Polymer Logistics listed on the AIM market of the London Stock Exchange in December 2006 and its ticker symbol is POLL. For further
information please visit the company website, www.polymerlogistics.com.
CHAIRMAN'S STATEMENT
The first half of 2008 was dedicated to consolidating the new operations established in 2007 in Italy, the US and Israel, and to driving
them to achieve profitability. Also in this period, we made a significant investment in the launch of the contracts won in the US in
California and Texas.
In the first half, significant effort was invested by our marketing team in completing the expansion of our product range which
commenced last year, creating new innovative product families which provide solutions to a broad range of Retail Ready Packaging needs. We
believe that these new product families will allow us to maintain our position with our current customer base, and increase penetration of
current and new customers' organisations.
The Fresh & Easy store opening programme was put on hold during the second quarter for a period of three months. Store opening restarted
in July and, although the delay has resulted in lower volumes than anticipated for the half year, management is now confident that, if the
rollout continues on track, the contract will make a positive contribution to profits towards the end of this year. In addition, the Group
increased its penetration to HEB Texas by providing not only pool services but also reverse logistics services (servicing the empty
returnable packaging upon return from HEB stores and depots).
The economic climate, increased oil prices, and resultant higher plastic raw materials and transport prices are negatively impacting the
Group. Consistent with the normal seasonality of the business, revenues and operating profits are expected to be significantly weighted
towards the second half of the year. We do not foresee a negative impact on the pool and service segments of the Company (accounting for 80%
of Group revenues), but, on a cautious view, our original expectations for sales orders for the current year may not be achieved, as most
retailers are exhausting their existing fleet and delaying the purchase of additional equipment. In addition, the Company, in line with its
competitors, has been unable to pass on all of the increased raw material costs to its customers in respect of product sales. Given the
above factors, whilst we expect pool revenues and profitability to be in line with market expectations, we expect the bottom line outcome
for the year to be significantly below market expectations.
In spite of the current market slow-down, management is confident that the infrastructure put in place over in the last two years, and
the long term relations with its customers, will support the medium term opportunities for the Company and will underpin the cash generative
qualities of the business.
Zvi Yemini
Chairman
26 August 2008
CHIEF EXECUTIVE'S STATEMENT
The first half was an important period for consolidating the Group's investments over the past year.
During the first half, the Company supported the emerging US business in California and Texas by building the team and infrastructure to
support its US operations.
The Company crystallised its strategy and implementation programme for the coming years and accordingly it:
· completed the expansion of its product offering which began in 2007, thereby introducing new generation innovative products;
· consolidated its management team world-wide, most notably with the appointment of a new Group COO; and
· focused on deeper penetration of its widening product portfolio in existing territories.
UK
Some of the existing UK portfolio is now reaching maturity. The Company has developed new innovative products with a view to gradually
replacing the current fleet. The Company is working with its leading customers on execution programmes to ensure continuity of service and
continued customer satisfaction.
Unfortunately, the current slow down in the economy is driving the retail market to seek savings by "sweating" existing equipment, with
little or no commitment to purchasing. Historically, a major part of the Company's sales to the UK market have occurred in the second half,
which this year, on a cautious view, is expected to see lower volumes than in the past.
Italy
In Italy, after executing a successful launch in 2007, the local management focused on driving profitability. The Italy operation has
improved its penetration with its customers and has maintained profits in line with budget.
Towards the end of the first half, the Company was requested by one of its customers to pay a rebate contribution of EUR1.0m towards
implementation costs. The Company's management, after considering the contract and relations with the customer, agreed to accept this
request. This request had a negative impact on the Company EBIT in the first half of EUR1.0m.
The Italian management's target is to increase business in Italy with other retailers, based on the existing operational sites in Milan
and Rome, and to introduce new solutions to the current customer base.
US
In the first half of 2008, management focused on:
· Reaching break-even on gross margins by 30 June 2008; and
· Increasing business with current customers to better utilise existing facilities.
Fresh & Easy, the Company's main customer in California, decided in April to put on hold its store opening programme for a period of
three months, recommencing in July. The Company's revenue per store is in line with budget, and although the delay has resulted in lower
volumes than anticipated in the first half, management is now confident that, if the rollout continues on track, the contract will make a
positive contribution to profits towards the end of this year.
With HEB in Texas, our team has succeeded in increasing its penetration by providing not only pool services but also reverse logistics
services. We believe that this operation will allow us to enhance our penetration into HEB with more products and services.
With our existing US customers we managed to increase penetration to more categories as well as extending the length of contract terms.
We are targeting additional local retailers in states in which we currently operate and some product trials have already commenced. The
Company is still seeking a resolution to the delayed Wal*Mart meat-crate supply contract and shareholders will be updated when further
progress has been made.
In spite of the progress made by our US team, we still had to heavily subsidise our operation in the first half due principally to the
delays to the Fresh & Easy contract, delaying our forecasted breakeven and resulting in a negative impact of EUR0.8m on the Company's EBIT.
Spain
The Company continued its pool operation in the Spanish market as in 2007 under its current agreement with a Spanish retailer.
Germany
The Company supplied the first orders of small innovative crates to a pool provider of a leading retailer in Germany. The new patent
pending crate was accepted with great enthusiasm by the retailer and passed the first trials successfully.
These sales have produced very marginal profits as the Company utilised R&D tooling for the initial production, which does not provide
the production efficiencies used in processing larger orders. Following approval of the products by the customer, the Company intends to use
efficient production tooling to service substantial additional orders, which should result in an increase in margins.
Israel
The Company signed a five-year contract to supply small foldable crates with a leading retailer in Israel which is expected to generate
revenues of approximately EUR3.5m over the next five years. The first crates will be supplied in the third quarter of 2008.
Investment Programme
During the period the Company invested in pool equipment principally to support growth in the US, worth a total of EUR2.0m (1H07:
EUR8.5m). Additional investments were made mainly in moulds for new products and production equipment totaling EUR2.3m (1H07: EUR7.0m).
In the second half of 2008, we will continue with our investments in pool equipment in connection with the roll out of our business with
Fresh & Easy in the US and completing the investments in moulds for our new product portfolio.
Management
As previously announced, the Board has promoted the Italian operation Manager, Gian Paulo Mezzanotte to the position of Group COO. In
the second half he will be working closely with Jim Vangelos, CEO of Polymer US, to manage the growth of the business in the US.
The strengthened management team across the Group is executing well.
Finance
The Company has long-term facilities of EUR23m, of which EUR19m was utilized as at 30 June 2008. The Company is comfortably meeting all
of its banks' covenants and net debt / EBITDA was around 2.6x at the end of the first half, compared to around 0.86x at the same period in
2007. EBITDA interest cover was around 3.6x at the end of the first half, compared to around 5.7x at the same period in 2007.
Dividend
It has been the Board's intention to pursue a progressive dividend policy in respect of excess capital over and above that required to
finance the organic growth of the Company's business. Although management remains confident about the medium and long term opportunities for
the Company and the cash generative qualities of the business, given the global economic climate and the uncertain full year outlook, the
Board is proposing a suspension of the payment of an interim dividend pending a further review at the end of the current financial year.
People
Our people are crucial to the continued success of the business and we would like to thank all of them for their continued hard work,
commitment and support throughout the period.
Outlook
We are starting to feel some softness in the markets in which we operate, especially in the UK where capital expenditure is being held
back. Whilst we expect revenues and profitability from our pool business (accounting for 80% of Group revenues) to be in line with market
expectations, the economic slow-down combined with increases in raw material and transport prices has negatively impacted our sales revenue
and overall profitability. As a result, although revenues and operating profits are expected to be significantly weighted towards the second
half of the year, consistent with the normal seasonality of the business, we expect the bottom line outcome for the year to be significantly
below market expectations.
Margins on product sales are principally impacted, as we are unable to pass-through in full increases in raw material costs to our sales
clients. However, the impact on pool margins is generally small as most of our income and costs are related to already in-use pool
equipment, while new business takes into account cost increases.
Analysing the Company's strengths, we believe that we now have a proven infrastructure in the countries where we operate and we are
taking appropriate measures to align costs to market conditions.
With increased revenues of EUR21m in the first half of 2008 (1H07: EUR11.7m), we are confident in our ability to continue to deliver
growth. The Company is developing into an increasingly geographically diversified business. The penetration into Italy (1H08: 47%; 1H07:
26%) and the US (1H08: 6%; 1H 07: 0%) has significantly reduced the Group's high reliance on the UK market (1H08: 37%; 1H07: 65%) and so
going forward the Company will see its revenues spread across a geographically wider base.
Our order pipeline of EUR20m for the second half of 2008, the cash generative qualities of the business and the increasing need for
retailers and suppliers to conform to environmental packaging and logistics practices underpins our confidence in the medium and long term
prospects for the Group.
Gideon Feiner
Chief Executive
26 August, 2008
CONSOLIDATED STATEMENTS OF INCOME
Euros in thousands, except share and per share data
Six months ended Year ended
June 30, December
31,
2008 2007 2007
Unaudited Audited
Revenues:
Income from rental services 16,943 8,908 25,331
Sale of goods 4,017 2,774 11,522
20,960 11,682 36,853
Cost of revenues:
Cost of rental services 9,021 5,197 12,504
Cost of goods sold 3,543 1,395 8,588
Depreciation of moulds and machines 916 133 757
13,480 6,725 21,849
Gross profit 7,480 4,957 15,004
Selling and marketing expenses 3,921 1,284 3,423
General and administrative expenses 4,240 3,380 7,544
Exceptional general and - - 466
administrative expenses
Finance income (171) (879) (945)
Finance costs 1,294 469 993
Other (income) expenses, net 69 11 (19)
Profit (loss) before taxes (1,873) 692 3,542
Income tax expense (income) 90 (62) 6
Net profit (loss) (1,963) 754 3,536
Basic earnings (loss) per share (in (0.03) 0.01 0.05
Euros)
Diluted earnings (loss) per share (in (0.02) 0.01 0.04
Euros)
Weighted average number of shares 77,734,759 77,462,083 77,482,468
used for computing basic earnings per
share
Weighted average number of shares 79,119,992 79,422,402 77,633,384
used for computing diluted earnings
per share
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
Euros in thousands
June 30, December 31,
2008 2007 2007
Unaudited Audited
ASSETS
Current assets:
Cash and cash equivalents 529 3,814 807
Trade receivables 10,705 7,307 13,874
Other accounts receivable and 3,915 4,734 4,656
prepayments
Income tax receivables 1 - 26
Inventories 2,079 2,104 3,073
17,229 17,959 22,436
Non-current assets:
Plant and equipment 17,358 *)12,857 16,100
Assets held for lease 35,334 30,799 35,047
Long term prepaid expenses of 370 *)346 346
operational lease
Finance lease receivables 3,265 5,222 4,263
Deposits 308 267 264
Deferred tax asset 1,653 1,111 1,518
Other accounts receivable - 226 -
58,288 50,828 57,538
Totalassets 75,517 68,787 79,974
*) Reclassified investment in patents registrations at the amount of EUR117 from Long term prepaid expenses of operational lease to
Plant and equipment
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED BALANCE SHEETS
Euros in thousands
June 30, December 31,
2008 2007 2007
Unaudited Audited
EQUITY AND LIABILITIES
Current liabilities:
Bank borrowings and current 9,747 4,866 13,891
maturities of long-term loans
Trade payables 7,353 11,032 13,074
Other accounts payable 3,315 *)5,675 *)1,789
Deposits from customers 2,521 **)2,630 **)2,713
Income taxes payable 426 231 552
23,362 24,434 32,019
Non-current liabilities:
Long-term loans 11,910 5,160 5,517
Deposits from customers - **)- **)-
Deferred taxes 209 116 167
Other long-term liabilities 140 *)45 *)66
12,259 5,321 5,750
Totalliabilities 35,621 29,755 37,769
Equity:
Issued capital 779 775 776
Share premium 34,898 34,295 34,785
Foreign currency translation reserve (176) (57) (32)
Retained earnings 4,395 4,019 6,676
Totalequity 39,896 39,032 42,205
Totalequity and liabilities 75,517 68,787 79,974
*) Reclassified other long-term liabilities at the amount of EUR45 and EUR66 as at June 30, 2007 and December 31, 2007 from Other
accounts payable to Other long-term liabilities.
**) Reclassified Deposits from customers from Non current liabilities to Current liabilities at the amount of EUR2,552 and EUR2,663 as
at June 30, 2007 and December 31, 2007, respectably. See also note 2.
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Euros in thousands
Issuedcapital Additionalpaid- Foreigncurrencytrans Retainedearnings Total
Totalrecognizedincom
incapital lationreserve
e
At January 1, 2008 776 34,785 (32) 6,676 42,205
Issuance of Ordinary shares 3 57 - - 60
upon exercise of options
Share-based payment 56 - - 56
Dividend payout - - - (318) (318)
Foreign currency translation - - (144) (144)
(144)
adjustment
Loss - - - (1,963) (1,963)
(1,963)
At June 30, 2008 (unaudited) 779 34,898 (176) 4,395 39,896
(2,107)
At January 1, 2007 775 34,365 (55) 3,265 38,350
Issuance of Ordinary shares on - (70) - - (70)
admission, net
Foreign currency translation - - (2) - (2)
(2)
adjustment
Net profit - - - 754 754
754
At June 30, 2007 (unaudited) 775 34,295 (57) 4,019 39,032
752
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Euros in thousands
Six months endedJune 30, Year endedDecember
31,
2008 2007 2007
Unaudited Audited
Cash flows from operating
activities:
Net profit (loss) (1,963) 754 3,536
Adjustments necessary to 3,963 (638) (2,682)
reflect cash flows provided by
(used in) operating activities
(a)
Net cash provided by (used in) 2,000 116 854
operating activities
Cash flows from investing
activities:
Purchase of assets held for (1,879) (8,540) (15,414)
lease
Purchase of plant and (2,301) (4,487) (8,732)
equipment
Purchase of long term assets - - (350)
Proceeds from sale of assets 9 - 17
held for lease
Proceeds from sale of plant 1 - 6
and equipment
Long-term deposits (44) (118) (115)
Net cash used in investing (4,214) (13,145) (24,588)
activities
Cash flows from financing
activities:
Proceeds from issuance of 60 (70) (40)
shares, net
Proceeds from long-term loans 5,086 3,000 5,001
from banks
Repayment of long-term loans (2,511) (1,829) (4,217)
from banks and others
Short-term bank credit, net (74) (4,010) 3,875
Dividend payout (285) - (125)
Receipt (repayment) of (192) 1 84
deposits from customers, net
Net cash provided by (used in) 2,084 (2,908) 4,578
financing activities
Net decrease in cash and cash (130) (15,937) (19,156)
equivalents
Net foreign exchange (148) (54) 158
difference
Cash and cash equivalents at 807 19,805 19,805
the beginning of the period
Cash and cash equivalents at 529 3,814 807
the end of the period
The accompanying notes are an integral part of the consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Euros in thousands
Six months endedJune 30, Year endedDecember
31,
2008 2007 2007
Unaudited Audited
(a) Adjustments
necessary to reflect
cash flows provided
by operating
activities:
Income and expenses
not involving
operating cash
flows:
Depreciation and 3,412 2,823 4,839
amortization
Deferred taxes, net (93) (104) (444)
Exchange differences (252) 94 (436)
on long-term
liabilities, net
Loss on disposal of 67 - 2
plant and equipment
and assets held for
lease
Share-based payment 56 - 461
3,190 2,813 4,422
Changes in operating
assets and
liabilities:
Decrease (increase) 4,167 (792) (6,401)
in trade and finance
lease receivables
Decrease (increase) 766 (1,434) (1,320)
in other accounts
receivable and
prepayments
(including
long-term)
Decrease (increase) 120 (1,966) (1,596)
in inventories
Increase (decrease) (4,354) *)724 *)2,175
in trade and other
accounts payable
Increase in other 74 *)17 *)38
long-term
liabilities
773 (3,451) (7,104)
3,963 (638) (2,682)
(b) Non-cash activities:
Long-term loan in - - 2,415
respect of purchase
of equipment
Reassignment of 274 300 514
assets held for
lease into inventory
Short-term payables - 347 -
in respect of
purchase of other
assets
Short-term payables - 2,480 -
in respect of
purchase of Fixed
assets
Depreciation of 109 446 712
moulds and machines
capitalized to
assets held for
lease
Short-term accounts 32 - -
payable in respect
of dividend payment
Conversion of 3,710 - -
short-term bank
credit to long-term
bank loans
CONSOLIDATED STATEMENTS OF CASH FLOWSEuros in thousands
Six months endedJune 30, Year endedDecember
31,
2008 2007 2007
Unaudited Audited
(c) Supplemental
disclosure of cash
flows:
Interest paid 777 469 991
Interest received 167 425 567
Income taxes paid 231 26 142
Income taxes 1 - 14
received
*) Reclassified of changes in Trade and other accounts payable to increase in Other long-term liabilities at the amount of EUR17 and
EUR38 as at June 30, 2007 and December 31, 2007, respectably.
The accompanying notes are an integral part of the consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Euro in thousands
NOTE 1:- CORPORATE INFORMATION
Polymer Logistics N.V. ("the Company") and its subsidiaries ("the Group") specialize in developing, manufacturing and providing services
for one-touch plastic pallet and bin solutions for the retail, industrial, and commercial markets. The Group's main markets are the UK and
Italy. Its main product lines include large plastic bins, pallets and dollies for the retail market. The Company is a public limited
liability company incorporated in the Netherlands. The Company's registered office is at Vierbundersweg 15, 5107 NL Dongen, the
Netherlands.
The interim condensed consolidated financial statement of the group as of June 30, 2008 and for the six months then ended ("the interim
statements") were authorized for issue in accordance with a resolution of the directors on August 26, 2008.
NOTE 2:- BASIS OF PREPARATION AND ACCOUNTING POLICIES
Basis of preparation
The interim condensed consolidated financial statement as of June 30, 2008 and for the six months then ended have been prepared in
accordance with IAS 34, "Interim Financial Reporting".
The interim condensed consolidated financial statement do not include all the information and disclosures required in the annual
financial statements, and should be read in conjunction with the Group's audited annual financial statements and accompanying notes as of
December 31, 2007.
Significant accounting policies
The accounting policies adopted in the preparation of the interim consolidated financial statement are consistent with those followed in
the preparation of the group's annual financial statements for the year ended 31 December 2007, except for the adoption of new Standards and
Interpretations noted below:
* IAS 37 Provisions, Contingent Liabilities and Contingent Assets - Deposits on returnable containers
Following the agenda decision by the IFRIC published in May 2008, the group accounting for deposits changed. The adoption of this decision
has resulted in a reassessment of deposits in the balance sheet with no impact on the Group's results.
* IFRIC 11 IFRS 2 - Group and Treasury Share Transactions
This Interpretation requires arrangements whereby an employee is granted rights to an entity's equity instruments, to be accounted for
as an equity-settled scheme, even if the entity buys the instruments from another party, or the shareholders provide the equity instruments
needed. The Interpretation had no impact on the financial position or performance of the Group.
* IFRIC 12 Service Concession Arrangements (currently not yet endorsed by the EU)
IFRIC Interpretation 12 was issued in November 2006 and becomes effective for annual periods beginning on or after 1 January 2008. This
Interpretation applies to service concession operators and explains how to account for the obligations undertaken and rights received in
service concession arrangements. This interpretation will have no impact on the Group.
NOTE 2:- BASIS OF PREPARATION AND ACCOUNTING POLICIES (Cont.)
* IFRIC 14 IAS 19 - The limit on a Defined Benefit Assets, Minimum Funding Requirements and their Interaction (currently not yet
endorsed by the EU)
This Interpretation provides guidance on how to assess the limit on the amount of surplus in a defined benefit scheme that can be
recognized as an asset under IAS 19 Employee Benefits. As the Group's defined benefit schemes are currently in deficit, the Interpretation
had no impact on the financial position or performance of the Group.
NOTE 3:- SEASONALITY OF OPERATIONS
Due to the seasonality nature of the group's activity, higher revenues and operation profits are usually expected in the second half of
the year than in the first six months. Higher sales during the period October to December and higher rental income during the period
November to December are mainly attributed to the increase demand during the peak holiday season.
The group expects that due to the current global economy slow-down, this seasonality will not be material in the current year.
NOTE 4:- CASH AND CASH EQUIVALENTS
For the purpose of the interim consolidated cash flow statement, cash and cash equivalents are comprised of the following:
Euros in thousands June 30,
2008 2007
Cash at banks and in hand 529 414
Short-term deposits - 3,400
529 3,814
NOTE 5:- DIVIDENDS PAID AND PROPOSED
Euros in thousands June 30,
2008 2007
Dividends on ordinary shares declared and paid during the six
months period:
Interim dividend for 2007: EUR0.004 163 -
Final dividend for 2007: EUR0.0017 122 -
285 -
Dividends on ordinary shares proposed for approval (not
recognized as a liability as at June 30):
Interim dividend for 2007: EUR0.004 - 310
A remaining unpaid dividend at the amount of EUR32 is classified in current liabilities.
NOTE 6:- INCOME TAX
The major components of income tax expenses in the interim consolidated income taxes are:
Euros in thousands For the six months ended June 30,
2008 2007
Current income tax 195 40
Deferred income tax (118) (102)
Current taxes in favor of previous 13 -
years
Income tax expenses (income) 90 (62)
NOTE 7:- PROPERTY, PLANT AND EQUIPMENT
Acquisitions and disposals
During the six months ended 30 June 2008, the group acquired assets at a cost of EUR4,289 (2007: EUR15,512). The Group main investments
were in production moulds and equipment and in pool equipment.
Assets with a net book value of EUR274 were reclassified to inventory by the group during the six months ended 30 June 2008 (2007:
EUR300).
NOTE 8:- SHARE BASED PAYMENT
On June 24 2008, 467,500 share options were granted to middle management and 1,610,000 shares options were granted to certain directors
of the Company under the Company's Share Option Scheme (the "Options"). The exercise price of the Options is 41.21p per share, which
represents a premium of 5% over the opening mid-market price per share as at the date of grant.
Each grant of Options will vest in three equal annual tranches, one in each of the three years after the date of grant. The Options will
be subject to performance conditions, measured over a performance period of one, two or three years corresponding to their vesting period.
The performance measure for the 2008 financial year is nominal compound annual growth of fully diluted earnings per share ("CAGR"). CAGR
will be calculated by taking the fully diluted earnings per share in 2007 and the fully diluted earnings per share in 2008, 2009, and 2010
respectively for the three tranches, and calculating the CAGR between the two. For nominal CAGR of between 5% and 12.5%, between 25% and
100% of the Options will vest, on a straight-line basis. For nominal CAGR of less than 5%, no Options will vest. Options will lapse at the
end of their performance period, to the extent that the performance condition has not been met. If the performance condition is met, Option
holders may choose when to exercise their Option, any time between vesting and the end of the ten-year option term. There are no cash settlement options. The fair value of options granted
during the six months ended 30 June 2008 was EUR 211.
NOTE 9:- INTEREST- BEARING LOANS AND BORROWINGS
In 2008 the group converted short term loans to long term loans as follows:
On 29 January 2008, the group converted Short term bank loan to Long term bank loan at the amount of NIS 10,000.The loan is unsecured
and is repayable in equal monthly payments of NIS 111 and ends on 29 July 2015. The loan bears interest of NIS Libor + 0.713% (5.963%).
On 17 March 2008, the group borrowed $2,500. The loan is unsecured and is repayable in full on 17 March 2012. The loan bears interest of
Libor + 2.64%.
On 17 March 2008, the group converted Short term bank loan to Long term bank loan at the amount of NIS 10,000. The loan is unsecured and
is repayable in full on 17 March 2013. The loan bears interest of NIS Libor + 1% (6.25%).
On 15 April 2008, the group borrowed EUR2,000. The loan is unsecured and is repayable in equal quarterly payments of EUR125 starting
from 30 April 2009 and ends on 31 January 2013. The loan bears interest of Euro Libor + 2.6%.
On 30 June 2008, the Company borrowed EUR1,500. The loan is unsecured and is repayable in equal monthly payments of EUR25 from July 2008
and ends on 30 June 2013. The loan bears interest of Euro Libor + 1.95%.
NOTE 10:- SUBSEQUENT EVENTS
None.
- - - - - - - - - -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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