Led International Holdings Regulatory News (LED)

30 Mar 2007 07:00

LED International Holdings Ltd30 March 2007 LED INTERNATIONAL HOLDINGS LIMITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 LED International Holdings Limited ("LED Intl." or "the Company"), the AIMlisted (LED.L) manufacturer of LED screens and related products, todayannounces maiden results following its successful admission to AIM. Since February 2004, LED Intl. has specialised in the development, manufactureand sale of bespoke LED screens and other cost-effective, high quality LEDproducts such as signs, lamps, lighting and building illumination. Commenting on the results Lee Man Bun, Chairman of LED Intl. said: "Obtaining alisting and successfully raising funds were important developments for thebusiness as we work towards our goal of being one of the leading suppliers ofLED related solutions to media, marketing services and property relatedbusinesses." "The long term outlook is positive with the new management team on board and weare seeking to enhance earnings via suitable acquisition opportunities." Highlights include: • Turnover HK$55,482,048 • Profit on ordinary activities after taxation HK$13,681,428 • Gross margin of 32% with an operating profit of just under 25% • Earnings per share - basic HK$0.108 • Successful admission to AIM raising £500,000 • Strengthened Board and Management to establish stronger team on the technical, marketing and acquisition disciplines For further information please contact: LED International Holdings LtdKa Lok JimTel: +852 28104470 Tavistock CommunicationsMatt RidsdaleTel: +44 (0) 20 7920 3150 Corporate SynergyRomil Patel / Shane GallweyTel: + 44 (0) 207 448 4410 Chairman's Statement It gives me great pleasure to present the Company's maiden interim resultsfollowing its successful admission to AIM in October 2006. Obtaining a listingand successfully raising funds were important developments for the business aswe work towards our goal of being a sizeable player in LED related products.The management is pleased with the progress the business is making and theseresults reflect the successful execution of the board's strategy in this firstperiod since listing. I would like to take this opportunity to thank our management team and staff fortheir enthusiasm and commitment to the Company in this exciting period ofevolution. Our performance, successes and results to date are testament totheir continuing efforts and support. Financial Overview Overall, the Group's financial performance during the six months period showedhealthy and encouraging growth. Turnover for the six months ended 31 December2006 grew to HK$55,482,048 due primarily to strong demand from our growingcustomer base in the Peoples' Republic of China ("PRC"). Gross margin achieved during this period was 32% in line with expectationswhilst the operating profit showed a healthy margin at just under 25%,demonstrating the efficiencies and robustness of our business plan and lowercost base. Dividend The Directors are not recommending payment of an interim dividend at this stagein the Company's development. It is the management's belief that the cashgenerated by the business can be more effectively deployed by investing in ouroperations to ensure the successful execution of the management's strategy,maximising the opportunity to create value for our shareholders. The Board iscommitted to the ongoing review of the Company's dividend policy. Board Changes In March, Ka Lok Jim joined the Board as CEO. His experience in both Europe andthe PRC will be of great benefit to the Group and his technical and marketingexpertise will, I am sure, prove invaluable. The appointments we have made during the period have significantly strengthenedour operational capability in terms of manufacturing skills knowledge andcontacts in the PRC, giving the Company greater penetration in terms of productsolutions, marketing and acquisitions. We will seek further opportunities tostrengthen our management team during the coming months. Outlook and Future Prospects Although prospects in the long term are positive, in the short term our abilityto deliver results on target for the remainder of the year are highly dependentupon some large contracts we are currently negotiating but have yet to besigned. With the new management team in place, we are focusing resources ontendering for larger LED solution contracts from property development companiesin the PRC and continually reviewing acquisition targets which will help expandour LED product range and enhance future earnings. Lee Man BunChairman30 March 2007 CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE SIX MONTHS ENDED 31 DECEMBER 2006 Note Six months ended 31 December 2006 HK$ Turnover 2 55,482,048 Cost of Sales (37,594,742)Gross Profit 17,887,306Other Revenue 795,868 Distribution costs (477,105) Administration costs (2,682,194) Other operating costs (1,874,352) Operating profit 13,649,523 Interest income 31,905 Profit from ordinary activities 13,681,428 Taxation - Profit after taxation 13,681,428 Profit brought forward 36,186,972 Profit carried forward 49,868,400 EARNINGS PER SHARE IN HK$ - Basic 3 0.108 EARNINGS PER SHARE IN HK$ - Diluted 3 0.104 CONSOLIDATED BALANCE SHEET Note 31 December 2006 HK$Non-current assetsIntangible assets 8,372,294 Property, plant and equipment 42,222,532 Total non-current assets 50,594,826 Current assetsInventories 10,937,819Trade receivables 40,670,782Sundry debtors and prepayments 2,379,554Amounts due from related companies 13,547,323Cash and bank balances 7,054,074 Total current assets 74,589,552 Current liabilitiesTrade payables 747,509Sundry creditors and accrued expenses 2.328,461Deposits received 2,534,275Taxation liabilities 12,550,625 Total current liabilities 18,160,870 Total assets less liabilities 107,023,508 Shareholders' EquityCalled up share capital 5 13,687,007Share premium 14,166,991Merger reserve 6 26,524,532Translation reserve 2,776,578Accumulated profits 49,868,400 Shareholders' Equity 107,023,508 CONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 31 DECEMBER 2006 Note Six months ended 31 December 2006 HK$CASHFLOWS FROM OPERATING ACTIVITIESProfit from operations 13,649,523Adjustments for :- Amortisation 490,701 Depreciation 1,646,497 Operating profit before working capital changes 15,786,721Movements in working capital elements:- Inventories (8,738,592) Trade receivables (net of taxation liabilities) (5,870,741) Sundry debtors and prepayments (2,006,485) Amounts due from related companies 1,108,911 Trade payables 375,181 Sundry creditors and accrued expenses 1,176,579 Deposits received 1,776,260 Exchange translation 1,513,751 Net cash generated from operating activities 5,121,585 CASHFLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (4,084,568)Interest received 31,905 Net cash used in investing activities (4,052,663) CASHFLOWS FROM FINANCING ACTIVITIES Proceeds from the issue of new shares 14,751,501Expenses of share issues (8,834,509) Net cash generated from financing activities 5,916,992 NET INCREASE IN CASH AND CASH EQUIVALENTS 6,985,914 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 68,160 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 7,054,074 NOTES TO THE INTERIM FINANCIAL INFORMATIONFOR THE SIX MONTHS ENDED 31 DECEMBER 2006 1. INTERIM FINANCIAL INFORMATION LED International Holdings Limited (the "Company") was incorporated, and isregistered, in Hong Kong under the Hong Kong Companies Ordinance, on 4 July2006, as a company with limited liability. On 12 October 2006 the Companyraised £500,000 by the issuance of 12,500,000 ordinary shares. On 13 October2006, the Company acquired the entire share capital of LED International (FarEast ) Limited (formerly Hong Bang Technology (China) Limited), the immediateholding company of Shenzhen China-LED Photo-Technology Limited, a wholly ownedforeign enterprise in the PRC, for the issuance of 119,370,055 ordinary shares.On 23 October 2006, the Company raised £500,000 by the issuance of 5,000,000ordinary shares through a placement on gaining admission to AIM. The Directors have accounted for the aforementioned group reconstruction usingmerger accounting principles. Accordingly, the results have been prepared toshow the position as if the Company had been in existence and the parent of LEDInternational (Far East) Limited and its subsidiary throughout the reportingperiod. The results have been compiled by taking the results of the Company andthe consolidated results of LED International (Far East) Limited before thegroup reconstruction and adjusting for the capital structure of the new group. These interim financial results have been prepared in accordance withInternational Financial Reporting Standards ("IRFS"). The accounting policiesand presentation applied to these financial statements are consistent with thosedisclosed in Part IV "Accountants Report on Shenzhen China-LED Photo TechnologyLimited" in the Company's admission document dated 17 October 2006 for itsproposed placing and admission to AIM. These financial statements for the six months ended 31 December 2006 areunaudited but have been reviewed in accordance with the International Standardon Review Engagements 2410 issued by the International Auditing AssuranceStandards Board. These interim results do not constitute statutory financialstatements within the meaning of section 240 of the Companies Act 1985. The Renminbi is the currency of the primary economic environment in which thegroup entities operate (the "functional currency"). Hong Kong Dollar is thecurrency in which these financial statements are presented (the "presentationcurrency"). For financial reporting purposes, these financial statements havebeen translated from the functional currency to the presentation currency at theexchange rates ruling at the balance sheet date. The results of the foreignoperation have been translated at the average rates ruling during the reportingperiod. 2. TURNOVER The principal activity of the Company is investment holding. Details of the principal activities of the wholly owned subsidiaries are asfollows: Subsidiaries Principal activities LED International (Far East) Limited (formerly Hong Bang Technology Investment holding(China) Limited) Shenzhen China-LED Photo-Technology Limited Manufacturer of LED related products Turnover represented the revenue received or receivable for goods and servicesprovided in the normal course of business, net of discounts, VAT and other salesrelated taxes. 3. EARNINGS PER ORDINARY SHARE Basic and diluted earnings per share figures are based on the following profitsand numbers of shares Six months ended 31 December 2006 HK$ Basic Profit for the financial period 13,681,428 Number Weighted average number of shares 126,679,848 Diluted HK$ Profit for the financial period 13,681,428 Number Weighted average number of shares 131,481,338 The weighted average number of shares in issue for reporting period representsthe issued and outstanding shares of the Company arising from incorporation andissuance relating to group reorganisation at 119,370,065 which have been assumedto have been issued at the beginning of the reporting period along with sharesissued arising from placements made from the date of there issuance. Options issued on 23 October 2006 totalling 19,161,811 have been taken intoaccount in the weighted average number of shares for the diluted earnings pershare calculation. 4. DIVIDEND The Directors do not propose an interim dividend. 5. SHARE CAPITAL Six months ended 31 December 2006 HK$Authorised: 200,000,000 ordinary shares of HK$0.10 20,000,000 Allotted, issued and fully paid: 1 ordinary share of HK$1 (See * below) 1 12,500,000 ordinary shares of HK$0.10 1,250,000 119,370,055 ordinary shares of HK$0.10 11,937,006 5,000,000 ordinary shares of HK$0.10 500,000 13,687,007 * On 10 August 2006 these ordinary shares were subdivided into 10 shares atHK$0.10 each. 6. MERGER RESERVE The merger reserve of the Group represents (a) the difference between thenominal value of the shares of Shenzhen China-LED Photo-Technology Limitedacquired pursuant to a group reorganisation effected on 13 October 2006 over thenominal value of the share capital of LED International (Far East) Limitedissued in exchange therefor and (b) the difference between the nominal value ofshares of LED International (Far East) Limited acquired pursuant to thereorganisation over the nominal value of the share capital of the Company issuedin exchange therefor. 7. RELATED PARTY TRANSACTIONS The Group had the following material transactions with related parties duringthe period:- Strong Base Electronics - Optic Technology Corp Strong Base Electronics - Optic Technology Corp ("Strongbase") is a relatedparty by way of common ownership and control. The Group had the followingmaterial transactions with Strongbase during the period. Six months ended 31 December 2006 HK$Sales of finished goods 2,859,856Rental income received 759,556 Guangdong Yayi Photo-Technology Limited Guangdong Yayi Photo Technology Limited ("Yayi") is a related party by way ofcommon ownership and control. The Group had the following material transactionswith Yayi during the period. Six months ended 31 December 2006 HK$Sales of finished goods 3,376,454Purchases of raw materials and finished goods 14,283,526 This information is provided by RNS The company news service from the London Stock Exchange