30 Sep 2015 07:00
30 September 2015
RM2 International S.A.
Interim Results
RM2 International S.A. ("RM2" or the "Company"), the vertically-integrated innovator in pallet development, manufacture, supply and management, today announces its unaudited results for the six months ended 30 June 2015.
Financial Highlights
· | Revenues for the first six months of 2015 of US$1.77 million (H1 2014: US$0.78 million) |
· | Loss after tax for the period of US$25.4 million (H1 2014: US$22.2 million) |
· | Debt free with cash and cash equivalents of US$35.9 million at 30 June 2015 |
· | Production is expected to be not less than 2.5 million pallets in 2016, with a production run rate at the end of the fourth quarter of 2016 of c. 300,000 pallets per month |
Operational highlights
· | Senior level customer engagement increased |
· | New proposals for roll outs under negotiation |
· | Signed contracts with 15 customers including new contracts in September with two of the largest packaging companies in North America |
· | Trials with pre-screened customers underway with nine additional potential customers |
· | Three of the largest retailers in North America have approved the RM2 pallet for trial by their vendors |
Chief Executive Officer, John Walsh, commented:
"As we reported last week, we are delivering a quality, mass-produced product to our customers in ever-increasing volumes which will generate powerful performance for our shareholders."
For further information:
RM2 International S.A. | +44 (0)20 8820 1412 |
John Walsh, Chief Executive Officer Jean-Francois Blouvac, Chief Financial Officer Ruari McGirr, Head of Planning and Communication |
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RBC Capital Markets | +44 (0)20 7397 8900 |
Tristan Lovegrove Pierre Schreuder Ema Jakasovic |
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Citigate Dewe Rogerson | +44 (0)20 7638 9571 |
Kevin Smith Ellen Wilton |
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Notes to Editors
RM2 International S.A. specialises in pallet development, manufacture, supply and management to establish a leading presence in global pallet supply and improve the supply chain of manufacturing and distribution businesses through the effective and efficient use and management of composite pallets. It is quoted on the AIM market of the London Stock Exchange under the symbol RM2.L.
For further information, please visit www.rm2.com
Chairman's and CEO's Statement
We are pleased to announce RM2's interim results for the six months ended 30 June 2015.
Engagement with senior management of customers has begun to generate an increasing number of proposals for specific implementations and roll out opportunities. We are satisfied with the new proposals for roll outs under negotiation and are pleased with the progress we have made in securing contracts with two of the largest packaging companies in North America, each with the potential for significant expansion.
As previously announced, we continue to develop trial opportunities with additional customers. Trials are only undertaken after a thorough screening process in which the alignment of customer and Company metrics are demonstrated, and since initiating the assessment process, virtually every formal customer trial has led to a contract.
During the period under review, the Company has made significant advances in the development of the BLOCKPal™ pallet. Following direct customer feedback, the Company has reassessed the friction coating method and developed a new gel based system to address client concerns. The gel coating provides increased pallet durability, improves client experience including hygiene and health and safety concerns and is also expected to bring efficiencies and cost savings to the manufacturing process. The first gel coating systems are being commissioned, with the balance of the systems expected to be delivered during Q4.
The Company had expected substantial upswing to begin in Q3 2015 and accelerate through Q4. However, as a result of the decision to change to gel coating, announced on 24 September 2015, revenue and production numbers for full year 2015 will be significantly below previous guidance. Based on current contracts and trials as well as discussions underway, the Company is confident of being able to profitably deploy all the pallets produced.
Financial Results
The Company recorded revenues for the first six months of 2015 of US$1.77 million (H1 2014: US$0.78 million) and a loss after tax for the period of US$25.4 million (H1 2014: 22.2 million).
Cash and cash equivalents were US$35.9 million at 30 June 2015 (H1 2014: US$115.5 million); cash and cash equivalents were US$20.4 million and the raw material inventory was US$7.9 million at August 31, 2015.
Outlook
As highlighted in the operational update on 24 September, as a result primarily of the decision to change to gel coating, the Company will not achieve the substantial upswing in production that had been expected to begin in Q3 this year and accelerate through Q4. Production is expected to be not less than 2.5 million pallets in 2016, with a production run rate at the end of the fourth quarter of 2016 of c. 300,000 pallets per month. Based on current contracts and trials as well as discussions underway, the Company is confident of being able to deploy profitably all the pallets produced.
Ian Molson, Chairman and John Walsh, Chief Executive Officer
RM2 INTERNATIONAL S.A.
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2015
Notes | Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited (Reclassified) | Year to 31 December 2014 Audited |
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USD | USD | USD |
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Continuing operations |
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Revenue | 5 | 1,771,391 | 781,431 | 2,000,416 |
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Cost of sales | 6 | (17,187,856) | (8,733,328) | (21,609,717) |
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Gross profit | (15,416,465) | (7,951,897) | (19,609,301) |
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Administrative expenses |
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Selling, General and Administrative expense | 7 | (10,287,482) | (8,121,785) | (18,260,590) |
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IPO expenses | - | (4,570,385) | (4,570,385) |
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Other operating expenses | 8 | (64,014) | (758,708) | (656,023) |
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Other operating income | 8 | 740,357 | 93,874 | 670,927 |
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Operating loss | (25,027,604) | (21,308,901) | (42,425,373) |
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Impairment of financial asset | - |
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Finance costs | (867,840) | (1,143,630) | (5,666,397) |
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Finance income | 659,861 | 311,238 | 776,629 |
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Loss before tax | (25,235,583) | (22,141,293) | (47,315,141) |
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Income tax
| (172,828) | (93,218) | 97,391 |
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Loss for the period | (25,408,411) | i.1. (22,234,511) | i.2. (47,217,750) |
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Other comprehensive income |
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Other comprehensive income to be reclassified in profit or loss in subsequent periods: |
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Exchange difference on translation of foreign operations | (1,527,059) | 721,780 | 1,370,822 |
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Other comprehensive income for the year, net of tax | (1,527,059) | 721,780 | 1,370,822 |
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Total comprehensive income for the year | (26,935,415) | (21,512,731) | (45,846,928) |
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Loss for the year attributable to: |
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Parent company shareholders | (25,408,411) | (22,234,511) | (47,217,750) |
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Total comprehensive income for the year attributable to: |
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Equity holders of the parent | (26,935,415) | (21,512,731) | (45,846,928) |
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Losses per share |
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Basic losses per share attributable to ordinary equity holders of the parent | 17 | (0.08) | (0.07) | (0.15) |
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Diluted losses per share attributable to ordinary equity holders of the parent | 17 | (0.08) | (0.07) | (0.15) |
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RM2 INTERNATIONAL S.A.
Consolidated Statement of Financial Position
For the year six months ended 30 June 2015 | Notes |
30 June 2015 Unaudited | 30 June 2014 Unaudited Restated | 31 December 2014 Audited | ||||
USD | USD | USD | ||||||
Assets | ||||||||
Non-current assets | ||||||||
Property, plant & equipment - others | 9 | 35,710,996 | 22,706,731 | 26,260,546 | ||||
Property, plant & equipment - pallet pool | 10 | 10,844,909 | 264,588 | 2,754,506 | ||||
Investment property | 1,371,279 | 1,572,263 | 1,396,512 | |||||
Intangible assets | 11 | 3,006,148 | 4,569,210 | 3,606,693 | ||||
50,933,332 | 29,112,792 | 34,018,257 | ||||||
Current assets | ||||||||
Inventory | 12 | 15,985,591 | 3,945,946 | 7,017,188 | ||||
Trade and other receivables | 13 | 5,179,826 | 3,642,582 | 3,889,105 | ||||
Other current financial assets | 74,310 | 81,850 | 59,548 | |||||
Prepayments | 808,044 | 634,901 | 2,830,642 | |||||
Restricted cash | 2,027,062 | - | 2,149,975 | |||||
Cash and cash equivalents | 35,860,977 | 115,549,118 | 82,882,794 | |||||
59,935,811 | 123,854,397 | 98,829,252 | ||||||
Total assets | 110,869,142 | 152,967,189 | 132,847,509 | |||||
Equity and liabilities | ||||||||
Equity | ||||||||
Issued capital | 16 | 3,230,302 | 3,217,772 | 3,227,772 | ||||
Share premium | 16 | 219,357,851 | 219,357,851 | 219,357,851 | ||||
Retained earnings | (143,021,951) | (92,630,301) | (117,613,540) | |||||
Share based payment reserve | 18,339,362 | 16,343,324 | 16,958,803 | |||||
Foreign currency translation reserve | (128,322) | 749,695 | 1,398,737 | |||||
Treasury Stock | (3,424) | - | - | |||||
Equity attributable to parent company shareholders | 97,773,818 | 147,038,341 | 123,329,623 | |||||
Non-current liabilities | ||||||||
Interest bearing loans and borrowings | 14 | 2,030,092 | 2,338,804 | 2,053,541 | ||||
Deferred tax liabilities | 251,493 | 556,192 | 403,286 | |||||
2,281,585 | 2,894,996 | 2,456,827 | ||||||
Current liabilities | ||||||||
Interest bearing loans and borrowings | 14 | 18,860 | 84,657 | 28,573 | ||||
Trade and other payables | 15 | 9,789,422 | 2,654,073 | 6,160,275 | ||||
Deferred income | 634,004 | 16,857 | 678,397 | |||||
Current tax liabilities | 371,453 | 278,265 | 193,814 | |||||
10,813,739 | 3,033,852 | 7,061,059 | ||||||
Total liabilities | 13,095,324 | 5,928,848 | 9,517,886 | |||||
Total equity and liabilities | 110,869,142 | 152,967,189 | 132,847,509 | |||||
RM2 INTERNATIONAL S.A.
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2015
Attributable to parent company shareholders | |||||||||
Share capital | Share premium | Retained earnings | Foreign currency translation reserve | Treasury Shares | Share based payment reserve | Total equity | |||
USD | USD | USD | USD | USD | USD | USD | |||
As at 31 December 2013 (audited) | 1,561,828 | 31,134,458 | (100,836,892) | 27,915 | - | 15,743,333 | (52,369,358) | ||
Loss for the year | - | - | (22,234,511) | - | - | - | (22,234,511) | ||
Other comprehensive income | - | - | - | 721,780 | - | - | 721,780 | ||
Total comprehensive income | - | - | (22,234,511) | 721,780 | - | (21,512,731) | |||
Absorption of losses | (30,441,102) | 30,441,102 | - | - | - | - | |||
Shares issued in the period | 1,655,944 | 223,097,977 | - | - | - | - | 224,753,921 | ||
Transaction costs on capital operations | (4,433,482) | - | - | - | - | (4,433,482) | |||
Non-cash share based payments | - | - | - | - | - | 599,991 | 599,991 | ||
Transactions with shareholders | 1,655,944 | 188,223,393 | 30,441,102 | - | - | 599,991 | 220,920,430 | ||
As at 30 June 2014 (unaudited) | 3,217,772 | 219,357,851 | (92,630,301) | 749,695 | - | 16,343,324 | 147,038,341 | ||
Loss for the year | - | - | (24,983,239) | - | - | - | (24,983,239) | ||
Other comprehensive income | - | - | - | 649,042 | - | - | 649,042 | ||
Total comprehensive income | - | - | (24,983,239) | 649,042 | - | (24,334,197) | |||
Shares issued in the period | 10,000 | - | - | - | - | - | 10,000 | ||
Non-cash share based payments | - | - | - | - | - | 615,479 | 615,479 | ||
Transaction with shareholders | 10,000 | - | - | - | - | 615,479 | 625,479 | ||
As at 31 December 2014 (audited) | 3,227,772 | 219,357,851 | (117,613,540) | 1,398,737 | - | 16,958,803 | 123,329,623 | ||
Loss for the period | - | - | (25,408,411) | - | - | - | (25,408,411) | ||
Other comprehensive income | - | - | - | (1,527,059) | - | - | (1,527,059) | ||
Total comprehensive income | - | - | (25,408,411) | (1,527,059) | - | (26,935,470) | |||
Absorption of losses | - | - | - | - | - | - | - | ||
Shares issued in the period | 2,530 | - | - | - | - | - | 2,530 | ||
Repurchase of shares into treasury | - | - | - | - | (3,424) | - | (3,424) | ||
Non-cash share based payments | - | - | - | - | - | 1,380,559 | 1,380,559 | ||
Transaction with shareholders | 2,530 | - | - | - | (3,424) | 1,380,559 | 1,379,665 | ||
As at 30 June 2015 (unaudited) | 3,230,302 | 219,357,851 | (143,021,951) | (128,322) | (3,424) | 18,339,362 | 97,773,818 | ||
RM2 INTERNATIONAL S.A.
Consolidated Statement of Cash Flows
For the six months ended 30 June 2015
| Notes |
Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited |
Cash flows from operating activities | USD | USD | USD | |
Loss before tax | (25,235,583) | (22,141,293) | (47,315,141) | |
Adjustment to reconcile profit before tax to net cash flows | ||||
Amortisation and depreciation of non-current assets | 2,567,701 | 751,217 | 2,961,340 | |
Provision for bad debts | 90,750 | - | - | |
Non-cash share based charges | 1,380,559 | 599,991 | 1,215,470 | |
Transaction costs on capital operations, including IPO | - | 4,570,385 | 4,570,385 | |
Finance income | (67,166) | (311,328) | (332,634) | |
Finance expenses | 25,608 | 528,487 | 822,896 | |
Unrealised foreign exchange gains | 817,728 | 1,217,084 | 2,631,708 | |
Net loss/(gain) on disposal of Property, Plant and Equipment ("PPE") and intangible assets | (421,682) | 79,130 | 82,775 | |
Variation in working capital | ||||
(Increase)/decrease in inventory | (8,968,403) | (2,421,154) | (5,492,396) | |
Decrease/(increase)/in trade and other receivables | 642,028 | (2,117,850) | (4,557,881) | |
Increase/(decrease) in trade and other payables | 3,509,526 | (2,548,010) | 2,247,291 | |
Decrease/(increase)/ in restricted cash | - | (2,149,975) | (2,149,975) | |
Income tax paid | (90,450) | (137,270) | (809,493) | |
Net cash flows from operating activities | (25,749,384) | (24,080,586) | (46,125,654) | |
Cash flows from investing activities | ||||
(Increase)/decrease in intangible assets | - | (851,788) | (1,065,674) | |
(Increase)/decrease in PPE in the course of commissioning | (8,666,039) | - | (5,510,766) | |
(Increase)/decrease in other PPE | (2,819,557) | (9,662,972) | (9,799,439) | |
(Increase)/decrease in pallet pool | (8,842,115) | - | (2,466,928) | |
Loans granted to third parties | (14,762) | (15,872) | 6,430 | |
Finance income received | 67,166 | 311,328 | 332,634 | |
Net cash flows from investing activities | (20,275,247) | (10,219,304) | (18,503,743) | |
Cash flows from financing activities | ||||
Issuance of capital | 16 | 2,530 | 224,753,921 | 224,763,920 |
Purchase of treasury shares | (3,424) | - | - | |
Transaction costs on capital operations, charged against share premium account. | - | (4,433,482) | (4,433,482) | |
Transaction costs on capital operations, including IPO | - | (4,570,385) | (4,570,385) | |
Proceeds from other and related party borrowings | 70,284 | 21,436 | 28,277 | |
Repayment of other and related party borrowings | (28,273) | (338,918) | (360,573) | |
Finance Costs | (25,608) | (294,009) | (308,359) | |
Settlement of loans and costs following IPO | ||||
Repayment of other and related party borrowings | - | (24,700,000) | (24,700,000) | |
DPEI Warrant settlement | - | (40,000,000) | (40,000,000) | |
Interest paid on borrowings | - | (804,712) | (804,712) | |
Fees in relation to loans | - | (6,175,000) | (6,175,000) | |
Net cash flows from financing activities | 15,509 | 143,458,851 | 143,439,688 | |
Net change in cash and cash equivalents | (46,009,182) | 109,158,961 | 78,810,289 | |
Increase/decrease in cash and cash equivalents | (46,009,182) | 109,158,961 | 78,810,289 | |
Cash and cash equivalents at 1 January | 82,882,794 | 4,193,136 | 4,193,136 | |
Exchange adjustment of cash and cash equivalents | (1,012,635) | 47,046 | (120,631) | |
Cash and cash equivalents at end of period | 35,860,977 | 113,399,143 | 82,882,794 |
RM2 INTERNATIONAL S.A.
Notes (unaudited) to the Interim Consolidated Financial Information
1 Corporate information
RM2 International S.A. (the "Company") is a limited company (société anonyme) incorporated and domiciled in Luxembourg with the registration number B132.740. The registered office is located at Rue de la Chapelle 5, L1235 Luxembourg. The Company is the ultimate parent entity of the RM2 Group (the "Group").
The Group is principally engaged in manufacturing, leasing and selling shipping pallets and in providing related logistical services.
This unaudited interim consolidated financial information does not constitute statutory accounts.
2 Basis of preparation
This unaudited interim consolidated financial information is prepared in compliance with AIM Rule 18. As unaudited interim consolidated financial information, it does not include all the information required in annual financial information, and should be read in conjunction with the Group's historical financial information for the year ended 31 December 2014.
The accounting policies and basis of preparation adopted are consistent with those followed in the preparation of the Group's historical financial information for the year ended 31 December 2014. None of the newly applicable IFRS standards and amendments has had an impact on the Group's interim consolidated financial information.
Early adopted standards
The Group did not early-adopt any new or amended standards and does not plan to early-adopt any of the standards issued but not yet effective
Reclassification
The June 2014 figures have been reclassified to re allocate the production costs as costs of sales rather than as part of the Selling, General and Administrative expense. The production facility only undertakes manufacturing operations and therefore its operating costs are considered as cost of sales rather than any administrate expenses. Cost of sales is higher than the revenue, reflecting the under absorption of costs into goods sold and the pallet pool. The effect of the reclassification in June 2014 is to increase the cost of sales by $6,604,022 and to reduce Selling, General and Administrative expenses by the same amount.
3 Significant accounting judgements, estimates and assumptions
When preparing the unaudited interim consolidated financial information, Management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgments, estimates and assumptions made by Management, and will seldom equal the estimated results.
The judgments, estimates and assumptions applied in the interim consolidated financial information, including the key sources of estimation uncertainty, were the same as those applied in the Group's historical financial information for the year ended 31 December 2014.
4 Significant events and transactions
In accordance with Disclosure Transparency Rules 4.2.7(1) and 4.2.7(2), the Company herewith includes a statement of important events during the first six months of the year and a description of principal risks and uncertainties for the remaining six months.
The engagement with senior management of customers, which was reported by the Company in June, has begun to generate proposals for specific implementations and roll out opportunities. The Company has recently signed contracts with two of the largest packaging companies in North America, each with the potential for significant expansion. This brings total contracted customers to 15, the vast majority in leasing contracts (as opposed to pallet sales contracts). The Company is currently conducting trials with nine additional potential customers.
Direct feedback from customers has highlighted the need to change the friction coating method from powder coating to a gel-based system. The gel coating addresses customers' health, hygiene and safety needs better, increases durability over the life cycle of the pallet and is also expected to bring efficiencies and cost savings to the manufacturing process. The first gel coating systems are being commissioned, with the balance of the systems expected to be delivered during Q4.
As a result primarily of the decision to change to gel coating, the Company will not achieve the substantial upswing in production that had been expected to begin in Q3 this year and accelerate through Q4. This means that revenue and production numbers for the full year will be significantly below previous guidance.
5 Segmental reporting
The Group has only one operating segment for the disclosure of revenue, being the production, the sale and the rental of pallets including related logistical services. Asset allocation decisions are based on a single, integrated investment strategy, and the Group's performance is evaluated on an overall basis. The Group's revenue analysis, however, is broken down by revenue stream as disclosed below.
Operating segment is reported in a manner consistent with the internal reporting used by the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the chief executive officer.
The internal reporting of the Group's assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of IFRS.
There were no changes in the reportable segments during the year.
The diversification of the Group's customer portfolio is limited presently. During the period there was 1 customer who represent more than 10% of the Group's revenues.
Turnover
Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited | |
Sold, leased pallets and logistical services | 1,032,049 | 9,984 | 444,125 |
Third-party tracking services | 739,342 | 771,447 | 1,556,291 |
1,771,391 | 781,431 | 2,000,416 |
Geographical information
The parent company is based in Luxembourg. The information for the geographical area of non-current assets are presented for the most significant areas where the group has operations, being Luxembourg (country of domicile), the rest of Europe and North America.
Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited | |
Luxembourg | 2,247,274 | 2,653,080 | 3,451,895 |
Rest of Europe | 8,095,908 | 8,310,165 | 7,055,336 |
North America | 40,590,150 | 18,149,546 | 23,511,029 |
50,933,332 | 29,112,792 | 34,018,257 |
Non-current assets for this purpose consist of property, plant and equipment, investment properties and intangible assets.
6 Cost of sales
Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited | |
Cost of goods sold - Blockpal | 152,668 | - | 271,952 |
Cost of goods sold - services | 162,384 | 136,879 | 283,013 |
Amortization of pallet pool | 619,244 | 25,722 | 88,258 |
Cost of software, licenses and services | 734,892 | 653,649 | 1,393,418 |
Factory absorption | 14,485,152 | 5,950,373 | 16,767,957 |
Other | 1,033,516 | 1,966,705 | 2,805,119 |
17,187,856 | 8,733,328 | 21,609,717 | |
Factory absorption is the variance between the recorded cost to produce pallets and the standard expected cost to produce pallets. The standard cost is used to calculate the value of pallets produced for purposes of inventory and assets. The total cost of the production facility for which the total manufacturing capacity is circa 3 million pallets was not fully absorbed by production in the year and the under absorption is shown as a cost of sales. In addition, the factory absorption ratio was significantly negatively impacted by reduced pallet production attributable to the move from the Dixie road facility to the larger Ontario facility and the commissioning and ramp-up time associated with the on-streaming of new capital equipment.
7 Selling, General and Administrative Expense
Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited | |
Corporate costs | 1,102,090 | 1,920,758 | 4,532,516 |
Selling and distribution costs | 3,997,019 | 3,125,551 | 6,614,849 |
Non-cash share based payment | 1,380,559 | 599,991 | 1,215,470 |
Depreciation | 772,420 | 274,975 | 1,362,317 |
Other | 3,035,394 | 2,200,508 | 4,535,438 |
10,287,482 | 8,121,785 | 18,260,590 |
8 Other operating income and expenses
Other operating income | Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited |
Net gain/ (loss) on disposal of PPE | 421,682 | (76,972) | 1 |
Rental income | 153,683 | 167,752 | 329,450 |
Other | 164,992 | 3,094 | 341,476 |
Total other operating income | 740,357 | 93,874 | 670,927 |
Other operating expenses | Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited |
Direct operating expenses on rental-earning investment properties | 12,934 | 36,246 | 101,119 |
Other | 51,080 | 722,462 | 554,904 |
Total other operating expenses | 64,014 | 758,708 | 656,023 |
9 Property, plant and equipment- other
Land & Building | Plant & Equipment | Manufacturing equipment in commissioning | Total | |
USD | USD | USD | USD | |
Cost | ||||
As at 31 December 2013 (audited) | 1,942,669 | 12,824,716 | 3,537,463 | 18,304,848 |
Additions | - | 9,662,972 | - | 9,662,972 |
Disposals | (136,068) | - | - | (136,068) |
Other / transfers | 3,433 | (3,433) | - | - |
Exchange differences | (3,964) | (29,943) | - | (33,907) |
As at 30 June 2014 (unaudited) | 1,806,070 | 22,454,312 | 3,537,463 | 27,797,845 |
Additions | 110,702 | 25,766 | 5,510,766 | 5,647,234 |
Disposals | 14,406 | - | - | 14,406 |
Other / transfers | (3,433) | 3,433 | - | - |
Exchange differences | (190,578) | (870,451) | - | (1,061,029) |
As at 31 December 2014 (audited) | 1,737,167 | 21,613,060 | 9,048,229 | 32,398,456 |
Additions | - | 3,241,239 | 8,666,039 | 11,907,278 |
Exchange differences | 89,704 | (1,010,749) | (324,687) | (1,245,732) |
As at 30 June 2015 (unaudited) | 1,826,871 | 23,843,550 | 17,389,581 | 43,060,002 |
Depreciation and impairment | ||||
As at 31 December 2013 (audited) | 178,274 | 979,453 | 3,537,463 | 4,695,190 |
Depreciation charge for the period | 36,173 | 431,049 | - | 467,222 |
Disposals | (56,938) | - | - | (56,938) |
Other / transfers | 572 | (572) | - | - |
Exchange differences | (47) | (14,312) | - | (14,359) |
As at 30 June 2014 (unaudited) | 158,033 | 1,395,618 | 3,537,463 | 5,091,114 |
Depreciation charge for the period | 17,753 | 1,270,243 | - | 1,287,996 |
Disposals | 18,050 | - | - | 18,050 |
Other / transfers | (572) | 572 | - | - |
Exchange differences | (21,818) | (237,433) | - | (259,251) |
As at 31 December 2014 (audited) | 171,447 | 2,429,000 | 3,537,463 | 6,137,910 |
Depreciation charge for the period | 32,240 | 1,153,426 | - | 1,185,666 |
Exchange differences | (530) | (99,436) | - | (99,966) |
As at 30 June 2015 (unaudited) | 203,157 | 3,482,990 | 3,537,463 | 7,223,610 |
Net book value | ||||
As at 30 June 2015 (unaudited) | 1,527,488 | 20,331,390 | 13,852,118 | 35,710,997 |
As at 31 December 2014 (audited) | 1,565,720 | 19,184,060 | 5,510,766 | 26,260,546 |
As at 30 June 2014 (unaudited) | 1,648,037 | 21,058,694 | - | 22,706,731 |
10 Property, plant and equipment - Pallet pool
Pallet Pool | ||||
USD | ||||
Cost | ||||
As at 31 December 2013 (audited) | 419,153 | |||
Additions | - | |||
As at 30 June 2014 (unaudited) | 419,153 | |||
Additions | 2,466,928 | |||
As at 31 December 2014 (audited) | 2,886,081 | |||
Additions | 8,842,115 | |||
As at 30 June 2015 (unaudited) | 11,728,197 | |||
Depreciation and impairment | ||||
As at 31 December 2013 (audited) | 43,317 | |||
Depreciation charge for the period | 111,248 | |||
As at 30 June 2014 (unaudited) | 154,565 | |||
Depreciation charge for the period | (22,990) | |||
As at 31 December 2014 (audited) | 131,575 | |||
Depreciation charge for the period | 751,713 | |||
As at 30 June 2015 (unaudited) | 883,288 | |||
| ||||
Net book value | ||||
As at 30 June 2015 (unaudited) | 10,844,909 | |||
As at 31 December 2014 (audited) | 2,754,506 | |||
As at 30 June 2014 (unaudited) | 264,588 |
11 Intangible assets
Software | Trade names | Customer relationships | Acquired licences and similar intangible assets | Goodwill | Total | |
USD | USD | USD | USD | USD | USD | |
Cost | ||||||
As at 31 December 2013 (audited) | 1,964,184 | 163,682 | 491,046 | 47,033 | 1,130,872 | 3,796,817 |
Additions | 851,789 | - | - | - | 851,789 | |
Exchange differences | 80,109 | 6,675 | 20,027 | - | 46,122 | 152,933 |
As At 30 June 2014 (unaudited) | 2,896,082 | 170,357 | 511,073 | 47,033 | 1,176,994 | 4,801,539 |
Additions | - | - | - | 250,000 | - | 250,000 |
Exchange differences | (216,475) | (15,029) | (45,090) | - | (103,841) | (380,435) |
As at 31 December 2014 (audited) | 2,679,607 | 155,328 | 465,983 | 297,033 | 1073,153 | 4,671,104 |
Additions | - | - | - | - | - | - |
Exchange differences | 32,010 | 1,856 | 5,567 | - | 12,819 | 52,252 |
As At 30 June 2015 (unaudited) | 2,711,617 | 157,184 | 471,550 | 297,033 | 1,085,972 | 4,723,356 |
Depreciation and impairment | ||||||
As at 31 December 2013 (audited) | - | - | - | 45,233 | - | 45,233 |
Amortization charge for the period | 133,973 | 11,164 | 33,493 | 1,200 | - | 179,830 |
Exchange differences | 5,449 | 455 | 1,362 | - | - | 7,266 |
As at 30 June 2014 (unaudited) | 139,422 | 11,619 | 34,855 | 46,433 | - | 232,329 |
Amortization charge for the period | 753,709 | 19,443 | 58,331 | 599 | - | 832,082 |
As at 31 December 2014 (audited) | 893,131 | 31,062 | 93,186 | 47,032 | - | 1,064,411 |
Amortization charge for the period | 421,670 | 45,855 | 137,566 | - | - | 605,090 |
Exchange differences | 41,009 | 1,675 | 5,023 | - | - | 47,707 |
As at 30 June 2015 (unaudited) | 1,355,810 | 78,592 | 235,775 | 47,032 | 0 | 1,717,208 |
Net book value | ||||||
As at 30 June 2015 (unaudited) | 1,355,807 | 78,592 | 235,775 | 250,001 | 1,085,972 | 3,006,148 |
As at 31 December 2014 (audited) | 1,786,476 | 124,266 | 372,797 | 250,001 | 1,073,153 | 3,606,693 |
As at 30 June 2014 (unaudited) | 2,756,660 | 158,738 | 476,218 | 600 | 1,176,994 | 4,569,210 |
The goodwill arises from the acquisition of Equipment Tracking Limited in 2013.
12 Inventories
30 June 2015 Unaudited | 30 June 2014 Unaudited | 31 December 2014 Audited | |
Raw Materials | 7,314,957 | 2,759,664 | 3,108,970 |
Work in progress | 2,761,851 | 1,103,947 | 1,448,422 |
Finished goods-pallets | 5,908,783 | 82,335 | 2,459,796 |
Total Inventories | 15,985,591 | 3,945,946 | 7,017,188 |
13 Trade and other receivables
30 June 2015 Unaudited | 30 June 2014 Unaudited | 31 December 2014 Audited | |
Trade receivables | 1,491,809 | 220,020 | 648,353 |
Income tax receivables | 3,178 | 44 | 2,275 |
Other tax receivables | 2,845,690 | 2,033,312 | 2,179,364 |
Other receivables | 839,149 | 1,389,206 | 1,059,113 |
Total trade and other receivables | 5,179,826 | 3,642,582 | 3,889,105 |
14 Interest-bearing loans and borrowings
As at 30 June 2015 Unaudited | As at 30 June 2014 Unaudited | As at 31December 2014 Audited | |||
Effective interest rate | Maturity date | USD | USD | USD | |
Non-current interest-bearing loans and borrowings | |||||
CHF 2,100,000 Bank loan | 2.4% | 30 November 2015 |
2,020,661 |
2,328,583 | 2,021,220 |
(The loan is secured by a mortgage on the building held by the Group in Switzerland.) | |||||
Hire purchase liabilities in excess of one year | 9,431 | 10,221 | 33,321 | ||
Total non-current interest-bearing loans and borrowings |
2,030,092 |
2,338,804 |
2,053,541 | ||
Current interest-bearing loans and borrowings | |||||
Bank overdraft | Variable | On-demand | - | 53,996 | |
Hire purchase liabilities in excess of one year | 18,860 | 30,661 | 28,573 | ||
Total current interest-bearing loans and borrowings |
18,860 |
84,657 |
28,573 | ||
Total interest-bearing loans and borrowings | 2,048,952 | 2,423,461 | 2,082,114 | ||
|
15 Trade and other payables
30 June 2015 Unaudited | 30 June 2014 Unaudited | 31 December 2014 Audited | |
Trade payables | 7,519,744 | 1,786,215 | 4,572,320 |
Social Charges | 947,848 | 8,925 | 258,111 |
Current Tax Liabilities | 750,556 | 237,115 | 747,662 |
Other payables | 571,274 | 621,818 | 402,183 |
Total Trade and other payables | 9,789,422 | 2,654,073 | 6,160,275 |
16 Share capital and reserves
2015
On 12 March 2015, 253,000 restricted shares were granted to certain employees. The restricted shares vest three years from the date of grant if the recipients are still employed by the Group at such time.
On 17 June 2015, the Company repurchased 342,334 previously issued restricted shares. These shares are held as non-voting treasury shares.
As at June 30, 2015, RM2's issued share capital is 323,030,156 Ordinary Shares of US$0.01 each in the capital of the Company, of which 342,334 Ordinary Shares are held by the Company as non-voting treasury stock. The total number of voting rights in the Company is 322,687,822.
2014
On 6 January 2014 the Company completed an Initial Public Offering, listing its shares on the AIM market of the London Stock Exchange, through the issuance of 155,903,548 shares at £0.88 per share and receiving net proceeds of USD 215,760,052, after payment of fees. Following repayment of an aggregate of USD 71,679,712 in loans, fees and interest, the Company's balance sheet was free of debt (other than the mortgage on the office building in Switzerland) and the Company retained USD 144,080,340 to finance capital expenditure, production of inventory and operating expenses. The premium arising on the newly issued IPO shares has been taken to the Share Premium Account.
In addition, on 6 January 2014 the Company issued 4,157,428 Ordinary Shares at par to a significant shareholder.
On 24 January 2014, 2,316,405 restricted shares with Performance Conditions were granted to certain Directors (see note 22).
On 3 April 2014, 900,000 restricted shares were granted subject to certain vesting conditions.
On 13 June 2014, 2,317,000 restricted shares were granted, 1,000,000 of which were subject to Performance Conditions, and 1,317,000 of which were subject to certain vesting conditions.
On 22 September 2014 1,000,000 restricted shares were granted subject to Performance Conditions.
Ordinary shares issued and fully paid
Shares | USD | Par value per share | |
At 31 December 2013 (audited) | 156,182,775 | 1,561,828 | USD 0.01 |
IPO on 6 January 2014 | 155,903,548 | 1,599,036 | USD 0.01 |
Subscription for new shares on 6 January 2014 | 4,157,428 | 41,574 | USD 0.01 |
Subscription for restricted shares on 24 January 2014 | 2,315,405 | 23,164 | USD 0.01 |
Subscription for restricted shares on 3 April 2014 | 900,000 | 9,000 | USD 0.01 |
Subscription for restricted shares on 17 June 2014 | 2,317,000 | 23,170 | USD 0.01 |
At 30 June 2014 (unaudited) | 321,777,156 | 3,217,772 | USD 0.01 |
Subscription for restricted shares on 22 September 2014 | 1,000,000 | 10,000 | USD 0.01 |
At 31 December 2014 | 322,777,156 | 3,227,772 | USD 0.01 |
Subscription for restricted shares on 2 March 2015 | 253,000 | 2,530 | USD 0.01 |
At 30 June 2015 | 323,030,156 | 3,230,302 | USD 0.01 |
Share premium
USD | |
At 31 December 2013 (audited) | 31,134,458 |
IPO 6 January 2013 | 223,097,977 |
Absorption of the 31 December 2013 | (30,441,102) |
Transaction costs on issue of shares | (4,433,482) |
At 30 June 2014 (unaudited) | 219,357,851 |
At 31 December 2014 (audited) | 219,357,851 |
At 30 June 2015 (unaudited) | 219,357,851 |
17 Earnings per share
Basic earnings per share amounts are calculated by dividing the net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted earnings per share computations:
Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited | |
USD | USD | USD | |
Net loss attributable to ordinary equity holders of the parent for basic earnings | (25,408,411) | (22,234,511) | (47,217,750) |
Six months to 30 June 2015 Unaudited | Six months to 30 June 2014 Unaudited | Year ended 31 December 2014 Audited | |
Weighted average number of ordinary shares for basic earnings per share | 322,930,913 | 313,551,103 | 317,997,300 |
Weighted average number of ordinary shares adjusted for the effect of dilution | 322,944,891 | 313,551,103 | 317,997,300 |
Loss per share | |||
Basic | (0.08) | (0.07) | (0.15) |
Diluted | (0.08) | (0.07) | (0.15) |
Management considers that there is no dilutive effect from the options as they would be negative.
18 Publication of announcement and the Interim Results
A copy of this announcement and the Interim Results will be available on the Company's website and at the Company's registered office.