Greencoat Renewables Regulatory News (GRP)

15 Aug 2007 07:01

GruppeM Investments PLC15 August 2007 15 August 2007 GruppeM Investments PLC (LSE: GRP, 'GruppeM' or the 'Company') Preliminary results for the 17 months ended 31 December 2006 GruppeM Investments PLC, the retailer of luxury motor cars in China, announcesits unaudited preliminary results for the 17 months ended 31 December 2006. Operational highlights: • 4th largest Porsche dealer in the Chinese market by volume • 278 Porsche cars ordered and 222 cars delivered by the Qingdao dealership in the period • Second Porsche dealership planned to open in September in Jinan - the capital of Shandong region • Increasing consumer demand for luxury sports cars • Significant post-balance sheet event: appointed as the only distributor of Aston Martin motor cars for Mainland China in August 2007 Financial highlights: • Revenues of £12.3 million (2005 restated: £0.12 million) • Loss before tax of £0.84 million (2005 restated: £0.56 million) • Loss per share 2.87p (2005 restated: 5.70p) Commenting on the results, Kenny Chen, Chief Executive Officer, said: "These results reflect our first significant period of trading and thereforetake into account the substantial set-up costs associated with the formation ofa luxury motor car retailing operation in China. The high quality of theinvestment we have made, both in terms of premises and personnel, will enablethe Company to take full advantage of the exciting opportunities which existwithin this fast-growing market. Demand for Porsche cars throughout theShandong region remains very strong and believe we are now in a sound positionto replicate the success of our Qingdao dealership in the region's capitalJinan. The appointment of GruppeM Investments PLC as the only distributor ofAston Martin motor cars in Mainland China will diversify our brand offering aswell as our revenue generating operations. We are looking forward to partneringthe premier British luxury motor manufacturer in one of the world's fastestgrowing luxury car markets. This will assist in our goal to become the leadingsupplier of luxury motor cars in China and ensure the Company is in an excellentposition to capture a greater share of a large market." Enquiries:GruppeM Investments PLC Shore Capital and Corporate Limited Kenny Chen Alex Borrelli/Pascal Keane Tel: +44 (0) 207 233 2952 Tel: +44 (0) 207 408 4090 CHAIRMAN'S STATEMENT Background GruppeM Investments PLC's initial annual report covered the period from itsincorporation on 16 July 2004 to 31 July 2005. The comparative period shown inthe financial statements below is therefore from 16 July 2004 to 31 July 2005.We have since changed our accounting reference date from 31 July to 31 December,to bring it into line with our Chinese trading operations. This means that theresults below are for a 17-month accounting period from 1 August 2005 to 31December 2006. GruppeM Investments PLC was floated on the AIM market in February 2005 andremained a cash shell until the reverse takeover of GruppeM Hong Kong Limited inOctober 2006. GruppeM Hong Kong Limited is a Hong Kong based holding companywith two Chinese based subsidiaries operating a Porsche franchise in theShandong region of China. It was incorporated on 1 February 2005 and was whollyowned and controlled by Pinocelle S.A. - a nominee company of Kenny Chen.Therefore, the reverse acquisition was deemed a related-party transaction asboth GruppeM Investments PLC and GruppeM Hong Kong Limited were under the commoncontrol of Kenny Chen. Accordingly, the consolidated figures presented belowhave been prepared under merger accounting rules, i.e., the financial statementsof GruppeM Investments PLC and GruppeM Hong Kong Limited have been aggregatedand presented as if the two companies had been part of the same group sinceincorporation. Financial timetable Further to our announcement on 13 June 2007, the results for the 17-month periodto 31 December 2006 have been delayed due to the audit of our Chinesesubsidiaries being interrupted by a routine but random audit by the Chinese taxauthority. Also, further to our announcement on 13 June 2007 following theengagement of PricewaterhouseCoopers China to perform the audit of oursubsidiaries in China, PricewaterhouseCoopers UK has advised us that, it isunable to accept the appointment in the UK (for the Group as a whole) due tocertain client acceptance procedures. Therefore, the results below areunaudited. Following this major setback to our timetable we are currently indiscussions with several other audit firms with a view to releasing the annualreport and accounts by the end of October 2007. Our unaudited interimstatements for the 6 months ended 30 June 2007 will be released by the end ofSeptember 2007. It is expected that the share suspension will be lifted, andtrading in the Company's shares will resume, following the posting of the annualreport and accounts at the end of October 2007. Results The Group has grown rapidly in the 17-month start-up period to 31 December 2006. Turnover increased significantly to £12.3 million (period to 31 July 2005:£0.12 million). The pre-tax loss from operations for the period was £0.84million against a loss of £0.56 million for the period to 31 July 2005. Lossesper share were 2.87 pence (2005: 5.70 pence). The directors will not berecommending the payment of a dividend until such time as the Group reaches anappropriate level of profitability. Porsche car sales from our Qingdao dealership were strong with 278 cars orderedand 222 cars delivered in the period with healthy margins earned. Of the 222cars sold, 91% were the large four-wheel-drive Cayenne model, however, demandfor the sports cars range is strengthening as the market becomes more aware ofthe Porsche brand and heritage. Sales of Porsche cars remain strong with nosigns of slowing. Demand continues to outstrip supply, with a waiting time ofapproximately 6 months from the customer placing the order to receiving the car. We are delighted that GruppeM Hong Kong Limited has now signed a formaldealership agreement with Porsche China. This replaces the letter of intentunder which the Qingdao dealership was operating until March 2007. Trading in the first half of 2007 has been brisk with the strong demand seen atthe end of 2006 continuing into this year. As a result, the board is confidentof delivering enhanced shareholder value for the financial year ending 31December 2007 as the business expands with future dealerships. Market prospects China's economy continues to grow strongly - recording double digit growth(11.9%) for the fifth year in a row - and is poised to overtake Germany as thethird largest economy in the world within the next year. In 2006 the Chinese automobile market became the second largest in the worldwith sales of 7.2 million. Sales of luxury cars increased by 25.1% over theprevious year to 320,000 (China Association of Auto Manufacturers). Accordingto China View, "sales of luxury cars are booming and top luxury automakers seeChina as an increasingly important market". The latest statistics released by the Chinese Ministry of Public Security on 4June 2007 show that, in the first 5 months of 2007, the number of private carsincreased by 16 per cent. to 13.4 million. It is anticipated that sales volumein the Chinese market will overtake the USA by 2010. Board changes There have been several board changes in the period. I took over from LordMarsh as Chairman, following the reverse acquisition of GruppeM Hong KongLimited in October 2006 and Peter Kent joined the board shortly afterwards.Julian Hardy also joined us as sales director at the time of the acquisition.Marvin Tien and Paul McIlwaine, our finance director, resigned during theperiod. We are currently interviewing suitable candidates to replace Paul andhope to make an announcement of his replacement in the near future. In Junethis year we were all saddened by the news that Stephen Chen had passed awayafter a long illness. We send our condolences to his wife and family. Strategy The board is aiming to expand the business both organically, by increasing ourPorsche retailing footprint in the Shandong region, and by partnering otherpremium brand manufacturers in order to distribute luxury cars throughoutMainland China. The Shandong region, with a population of approximately 92 million, is locatedon the burgeoning east coast of China between Beijing and Shanghai. InSeptember 2007 the Company is planning to open a further Porsche dealership inthe region's capital Jinan. Jinan has a population of 5.9 million, compared toQingdao with 7.2 million, and its information technology related economic outputranks number 4 in China. The Company is also in high-level discussions with other luxury carmanufacturers with a view to diversifying: our geographical market (to includethe whole of Mainland China); our operations (to include luxury car distributionas well as retail); and our brand offering. I am delighted to announce the recent appointment of GruppeM Investments PLC asthe only distributor of Aston Martin motor cars in Mainland China. Thisrepresents a fantastic opportunity for both parties to take full advantage ofthis exciting marketplace. We are confident that the combination of Britain'sfinest luxury sporting cars manufacturer, and our expertise in the Chinese carmarket, will pay great dividends and we look forward to a long and successfulfuture together. The board believes that the Company is in a position of strength to capitaliseon the current opportunities within the Chinese luxury car market in order togrow the business, and shareholder value, rapidly. I would like to thank all our employees for their contribution to our successand their support during the Company's early high-growth stage. Don McCrickard Chairman 15 August 2007 GRUPPEM INVESTMENTS PLCConsolidated income statement for the 17 months ended 31 December 2006 17 months Period from ended 31 16 July 2004 December 2006 to 31 July 2005 Unaudited Restated Unaudited Note £ £ Revenue 12,285,042 121,130Cost of sales (11,647,383) (193,425)Gross profit 637,659 (72,295)Distribution expenses (212,940) (1,487)Administrative expenses (1,314,707) (347,615)Exceptional items 2 - (142,512)(Loss) / profit from operations before interest (889,988) (563,909)Finance income and expense (net) (920) (6) (Loss) / profit for the period before taxation (890,908) (563,915) Tax 46,058 - (Loss) / profit for the period (844,850) (563,915) (Loss ) / earnings per share expressed in pence per share 3- Basic (2.87)p (5.70)p- Diluted (2.83)p (5.70)p Statement of recognised income and expense for the 17 months ended 31 December2006 17 months Period from 16 ended 31 July 2004 to 31 December2006 July 2005 Unaudited Restated Unaudited £ £(Loss) / profit for the financial year (844,850) (563,915)Exchange adjustments (40,712) 1,935Total recognised income and expense for the year (885,562) (561,980) All amounts relate to continuing activities. GRUPPEM INVESTMENTS PLCConsolidated balance sheet as at 31 December 2006 Notes As at As at 31 December 31 July 2006 2005 Unaudited Restated Unaudited £ £AssetsNon-current assets Property, plant and equipment 345,795 108,492 Deferred tax asset 56,246 - 402,041 108,492 Current assets Inventory 886,825 - Trade and other receivables 2,969,120 294,710 Cash and cash equivalents 132,350 135,733 3,988,295 430,443Total assets 4,390,336 538,935 LiabilitiesCurrent liabilities Current tax payable (11,640) - Trade and other payables (5,262,005) (722,785) (5,273,645) (722,785) Non-current liabilities Director's loan account (577,556) - Other loan (19,877) - Related party loan (182,000) (182,000) (779,433) (182,000)Total liabilities (6,053,078) (904,785) Capital and reserves Share capital 4 (1,000,000) (200,000) Merger reserve 5 1,392,156 - Foreign operation translation reserve (38,777) 1,935 Convertible loan (99,402) - Retained loss 5 1,408,765 563,915 1,662,742 365,850Total equity and liabilities (4,390,336) (538,935) GRUPPEM INVESTMENTS PLCConsolidated cash flow statement for the 17 months ended 31 December 2006 17 months Period from 16 ended 31 July 2004 to 31 December 2006 July 2005 Unaudited Restated Unaudited £ £ Cash flow from operating activities (Loss) / profit from operating activities (889,988) (563,909) Adjustments for: Depreciation 36,710 125 Forex adjustment on property, plant and equipment 6,622 -Net cash flow from operating activities before changes in working (846,656) (563,784)capital Increase in inventories (886,825) - Increase in payables 4,539,220 722,785 Increase in receivables (2,674,410) (294,710)Net cash flow from operating activities before interest and 131,329 (135,709)taxation paid Interest paid (16,594) (6) Taxation received 1,452 -Net cash flow from operating activities 116,187 (135,715) Investing activities Purchase of property, plant and equipment (280,635) (7,834) Assets under construction - (100,783) Interest received 76 -Net cash flow from investing activities (280,559) (108,617) Financing activities Proceeds from issue of ordinary shares - 200,000 Cost of share issue (592,156) - Issue of convertible loan notes 115,000 - Director's loan 577,556 - Other loan 19,877 - Related party loan - 182,000Net cash flow from financing activities 120,277 382,000 Net (decrease) / increase in cash and cash equivalents in the (44,095) 137,668periodCash and cash equivalents at the beginning of the year 135,733 -Effect of foreign exchange rate changes on cash and cash 40,712 (1,935)equivalentsCash and cash equivalents at the end of the year 132,350 135,733 NOTES TO THE PRELIMINARY ANNOUNCEMENT 1. Basis of preparation The financial information set out in this announcement does not constituteStatutory Accounts within the meaning of Section 240(5) of the Companies Act1985. The statutory accounts have not been delivered to the Registrar ofCompanies but will be delivered in due course. Adoption of IFRS for the 17 months ended 31 December 2006 The financial statements have been prepared in accordance with EU EndorsedInternational Financial Reporting Standards ("IFRS") and the Companies Act 1985applicable to companies reporting under IFRS. In the current period GruppeMInvestments PLC and its subsidiaries ("the Group") has adopted all of thestandards and interpretations issued by the International Accounting StandardsBoard and the International Financial Reporting Interpretations Committee thatare relevant to its operations and effective for the Group's financial periodbeginning on 1 August 2005. As at the date of approval of these consolidated financial statements, thefollowing interpretations were in issue but not yet effective: • IFRS 7, Financial Instruments: Disclosures; • IFRS 8, Operating Segments; • IFRIC 8, Scope of IFRS 2; • IFRIC 9, Reassessment of embedded derivatives; • IFRIC 10, Interim Financial Reporting and Impairment; • IFRIC 11, IFRS 2: Group and Treasury share transactions; and • IFRIC 12, Service concession arrangements. The directors do not anticipate that the adoption of these interpretations infuture reporting periods will have a material impact on the Group's results. Basis of consolidation The consolidated financial statements consist of GruppeM Investments PLC and itssubsidiaries. All intra-group transactions have been excluded. Theconsolidated financial statements of GruppeM Investments PLC have been preparedunder merger accounting rules. This means that the financial statements ofGruppeM Investments PLC, and its wholly owned subsidiary GruppeM Hong KongLimited, have been aggregated and presented as if the two companies have alwaysformed a group. Accordingly, although GruppeM Investments PLC acquired the entire share capitalof GruppeM Hong Kong Limited on 25 October 2006, the results for both companiesare reflected in the Group financial statements for the whole of the 17-monthperiod ended 31 December 2006 and the comparatives are presented on the samebasis. The reason being that due to common ownership of the respective entities,the business combination falls outside the scope of IFRS 3. Where necessary, adjustments are made to the financial statements of thesubsidiaries to bring their accounting policies into line with those used byother members of the Group. All intra-group transactions, balances, income andexpenses are eliminated on consolidation. 2. Exceptional expenses These expenses, in the prior year, relate to legal and professional expensesarising through the listing on AIM in February 2005, including the preparationof an AIM admission document. 3. Loss per ordinary share Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the year. In order to calculate diluted earnings per share, the weighted average number ofordinary shares in issue is adjusted to assume conversion of all dilutivepotential ordinary shares according to IAS 33. Dilutive potential ordinaryshares include convertible loan notes. 2006 2005 Weighted Per share Weighted Per share average amount average amount number of number of shares shares Loss Loss £ pence £ penceBasic EPSLoss attributable to ordinary (844,850) 29,411,765 (2.87) (563,915) 9,895,350 (5.70)shareholdersConvertible loan note - 405,882 - - - - Diluted EPS (844,850) 29,817,647 (2.83) (563,915) 9,895,350 (5.70) 4. Share capital 2006 2006 2005 2005 No. £ No. £Authorised:Ordinary shares of 1p each 200,000,000 2,000,000 100,000,000 1,000,000 Issued and fully paid:Ordinary shares of 1p each 100,000,000 1,000,000 20,000,000 200,000 Shares issued during the yearOrdinary shares No. Exercise / share £ issue priceAt 31 July 2005 20,000,000 200,000Acquisition of subsidiary 80,000,000 1p 800,000At 31 December 2006 100,000,000 1,000,000 On 25 October 2006 the Company issued 80,000,000 new ordinary shares of 1p eachto Pinocelle S.A. for GruppeM Hong Kong. The reverse acquisition has beenrecognised under the principles of merger accounting. 5. Movement on reserves The merger reserve represents a reserve arising on consolidation, being theshare capital and share premium account balances of GruppeM Hong Kong Limited at1 Februay 2005, i.e., its date of incorporation less the nominal value of theshares issued by the Company to acquire the shares, reflecting the position asif the merger had occurred on 1 February 2005. Group Foreign currency translation reserve Merger reserve Retained earnings £ £ £At 16 July 2004 - - -Loss for the year (563,915)Foreign exchange loss on translation 1,935Share issue expenses -Elimination of share capital -At 31 July 2005 - 1,935 (563,915) Loss for the year (844,850)Foreign exchange gain on translation (40,712)Share issue expenses 592,156Arising on share issue (3,200,000)Reversal of investment 4,000,000At 31 December 2006 1,392,156 (38,777) (1,408,765) Circulation to shareholders The annual report and accounts will be posted to shareholders in due course andwill be available to the public from the Company's registered office at GruppeMInvestments PLC, Suite 1.3 Buckingham Court, 78 Buckingham Gate, London, SW1E6PD. For more information please contact: GruppeM Investments PLCKenny ChenTel: +44 (0) 207 233 2952 Shore Capital and Corporate LimitedAlex BorrelliPascal KeaneTel: +44 (0) 207 408 4090 Further information on GruppeM Investments PLC can be found on the Company'swebsite: www.gruppemplc.com. This information is provided by RNS The company news service from the London Stock Exchange