LBB.L Regulatory News (LBB)

30 Sep 2008 07:00



Molectra Group Limited (the "Company")

Unaudited interim results for the 6 months ended 30 June 2008

Molectra Group Limited (AIM:MOLE), (formerly the Greenhouse Fund Limited), today reports its unaudited interim results for the 6 months ended 30 June 2008. 

Highlights for the period:

Additional investment in Molectra Australia

Two re-bonded crumb rubber contracts awarded

Highlights post period end:

Acquired remaining minority interests in Molectra Australia

Change in strategy from fund to operating company

Name change to Molectra Group Limited

New board appointments

Paul Gazzard, Chief Executive Officer commented: "The year to date has seen a transformation in both Molectra's operations and the Company's structure. The award of our first two contracts for re-bonded crumb rubber mark the change in Molectra's technology from the research and development phase to a commercially viable process.

The structural changes made to Molectra have created a well funded company with a highly experienced management team and an exciting technology. With several negotiations ongoing which may lead to further contracts, we view Molectra's future with confidence."

For further information please contact:

CHAIRMAN'S STATEMENT

These unaudited interim accounts cover the six months to 30 June 2008. 

Financial performance

As at 30 June 2008, the Company had net assets of £12,833,702 (2007: £13,574,110). The loss for the period was £1,465,372 (2007: £238,052) and the period end NAV was 8.27p (2007:8.74p). The increased loss was due to significantly increased corporate activity compared to the previous period, which resulted in large due diligence, legal and accounting costs.  

Portfolio update

Molectra Australia Pty Ltd ('MA') 

Development continued at Molectra Australia throughout the period. On 10 March 2008, MA entered into its first value added product ('VAP') contract, to supply anti-cast products made from its recycled re-bonded crumb rubber to the equine market. Anti-cast products are used to create a soft and impact resistant surface on stable walls to prevent injury to horses. The contract will be supplied out of the Brisbane plant, to an individual trading as HorseFabulous Products & Equipment, for distribution across Australasia.

On 10 June 2008, a second contract, to supply rubber automotive accessory products to an Australian distributor, was won. It is very encouraging that, despite Brisbane being a pilot plant, MA is able to enter commercial agreements and this bodes well for the future, once production volumes and efficiencies are improved.  

On 15 April 2008, it was announced that the AUD$1,700,000 outstanding loan from Molectra to MA would be repaid by the issue of further shares in Molectra, taking the Company's stake in MA to 64.3 per cent. 

There were significant post period end developments that are covered below. 

Other investments 

The five Bauxsol technology sub-licences are non-core to the Company's future strategy. A strategic review to maximise shareholder value from the licenses is currently under way, the outcome of which will be announced in due course. 

Post period developments 

On 16 July 2008, it was announced that the Company had agreed, subject to the approval of shareholders at an EGM, to acquire the 35.7% of MA's share capital that it did not already own. The consideration for the acquisition would be satisfied by the issue of 32,000,000 new Molectra ordinary shares. In addition, it was announced that the Company would acquire the intellectual property which MA relies upon for its business, for a consideration of 16,000,000 new ordinary shares. 

It was also proposed that Paul Gazzard and Rodger Sargent, directors of the Greenhouse Strategic Adviser, join the Board of the Company, along with John Dobozy, the inventor of the Molectra technology, and David Hassum.  

Given that the nature of the Company's business would be transformed by these proposals, it was also proposed that the Company's name be changed to Molectra Group Limited. It was further proposed that the Company would cease being an externally managed investment company and would become an internally managed company whose principal business would be conducted through its wholly owned subsidiary, MA. 

These proposals represented a fundamental change in the business, board and voting control of the Company, and constituted a reverse takeover under the AIM Rules, requiring the approval of shareholders at an EGM. All resolutions were passed by shareholders at the EGM, held on 12 August 2008.

The acquisition and change in strategy allows the Company to concentrate principally on the continued commercialisation of the MA tyre recycling process. Short term prospects involve securing additional contracts for the production and supply of the higher margin re-bonded crumb rubber products and, to date, two such contracts have been awarded, whilst discussions are continuing with a number of parties both in Australia and overseas which may lead to additional contracts being secured. 

Further investment will be made to enhance the production facility and increase capacity to accommodate the increasing production demand for VAP's. However, a key strategy for growth is the opportunity to establish tyre recycling plants for third parties, which is a potentially significant area of expansion. Target industries for such plants include the mining and waste management industries, where there are restrictions and regulations on the disposal of waste tyres. Over the medium to long term the Company will also continue to improve the MolectraVac microwave technology and seek to produce a carbon based product stream that is commercially viable.

The change of strategy from the portfolio approach of The Greenhouse Fund Limited to sole development of Molectra presents an exciting opportunity which I hope will allow to us to fully commercialise and enjoy the tremendous potential of Molectra's product range. I look forward to the future with great optimism.

Roger Maddock

Non-executive Director

Molectra Group Limited

30 September 2008