30 Dec 2019 16:50
30 December 2019
Zibao Metals Recycling Holdings Plc("Zibao" or "the Company" or "the Group")
Half Year Results
Zibao Metals Recycling Holdings Plc (AIM: ZBO), a Hong Kong based, recyclable metal trader and processor is pleased to announce its unaudited half year results for the six months ended 30 September 2019.
For further information please contact:
Zibao Metals Recycling Holdings PLC Wenjie "Joe" Zhou, Chairman Jianfeng "Eddy" Li, Chief Executive Officer
| Tel: +852 2769 7662 www.zibaometals.com
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SPARK Advisory Partners Limited (Nominated Adviser) Mark Brady/Neil Baldwin | +44 203 368 3551 |
Chairman's Statement
We are pleased to report the Company's unaudited interim results for the six months ended 30 September 2019.
Results
The Group's turnover was HKD 118 million [1H2018 : HKD 139 million], a decrease of approximately 15% on the corresponding period last year, mainly as a result of the continued impact of the change in regulations in the PRC restricting importation of scrap materials. The Group has not been able to secure new and compliant sources of supply, such that normal levels of trading can resume, and there is no visibility if and when this can happen.
Loss before tax during the period was HKD 0.53 million [1H2018 : HKD 2.4 million], as the Group continued with its cost control initiatives following the reduced levels of activity.
Outlook
Trading levels are not anticipated to return to normal or sustainable levels in the foreseeable future, and whilst the Group continues to manage its costs, it also continues to explore other strategies for the Group.
As announced on 12 December 2019, the Board are exploring the disposal of the Group's main trading subsidiary, Masterpiece Enterprises Limited. It is likely that any such disposal, if agreed, would also require shareholders' approval, in general meeting, as required by AIM Rule 15. Should this disposal be approved, the Company would also seek to raise some new equity through a placing of new shares.
We will keep shareholders advised of progress as and when appropriate.
Joe Zhou
Chairman
30 December 2019
Consolidated Statement of Comprehensive Income
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| Notes | 6 months to 30 September 2019 | 6 months to 30 September 2018 |
Year to 31 March 2019 |
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| HKD'000 | HKD'000 | HKD'000 |
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| UNAUDITED | UNAUDITED | AUDITED |
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Continuing operations |
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Revenue | 3 | 118,253 | 138,777 | 363,228 |
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Cost of sales |
| (117,335) | (138,434) | (377,678) |
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| ─────── | ─────── | ─────── |
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Gross profit |
| 918 | 343 | (14,450) |
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Other revenues |
| 359 | 157 | 23 |
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Selling and distribution expenses |
| (109) | (29) | (133) |
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Administrative expenses |
| (1,702) | (2,826) | (9,071) |
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Other Operating expenses |
| - | - | (20,000) |
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Impairment losses |
| - | - | (21,134) |
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| ─────── | ─────── | ─────── |
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Operating (loss)/ profit |
| (534) | (2,355) | (64,765) |
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Finance cost |
| - | - | - |
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| ─────── | ─────── | ─────── |
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(Loss)/Profit before tax |
| (534) | (2,355) | (64,765) |
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Income tax credit/ (expense) |
| 10 | 10 | (37) |
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| ─────── | ─────── | ─────── |
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(Loss)/profit for the year |
| (524) | (2,345) | (64,802) |
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Other Comprehensive income |
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Foreign exchange difference |
| - | - | (860) |
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| ─────── | ─────── | ─────── |
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(Loss)/Profit and total comprehensive income for the period |
| (524) | (2,345) | (65,662) |
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| ═══════ | ═══════ | ═══════ |
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(Loss)/Profit and total comprehensive income for the year attributable to the owners of the Company |
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(524) |
(2,345) |
(65,662) |
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| ═══════ | ═══════ | ═══════ |
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(Loss)/Earnings per share
| 5 | HKD | HKD | HKD |
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Basic |
| (0.004) | (0.019) | (0.531) |
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Diluted |
| (0.004) | (0.019) | (0.531) |
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| ═════ | ═════ | ═════ |
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Consolidated Statement of Financial Position
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| Notes | As at 30 September 2019 | As at 30 September 2018 | As at 31 March 2019 |
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| HKD'000 UNAUDITED | HKD'000 UNAUDITED | HKD'000 AUDITED |
Assets |
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Non-Current Assets |
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Property, plant and equipment |
| 17,398 | 39,778 | 17,658 |
Intangible assets |
| - | 1,406 | - |
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| ─────── | ─────── | ─────── |
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| 17,398 | 41,184 | 17,658 |
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| ─────── | ─────── | ─────── |
Current Assets |
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Inventories |
| - | 22,286 | 3,055 |
Trade receivables |
| 6,778 | 4,548 | 12,100 |
Prepayments, deposits and other receivables |
| 4,634 | 10,019 | 7,261 |
Tax recoverable |
| - | 3,268 | - |
Cash and cash equivalents | 6 | 7,463 | 5,396 | 8,943 |
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| ─────── | ─────── | ─────── |
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| 18,875 | 45,517 | 31,359 |
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| ─────── | ─────── | ─────── |
Total Assets |
| 36,273 | 86,701 | 49,017 |
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| ═══════ | ═══════ | ═══════ |
Equity and liabilities |
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Equity attributable to owners of the company |
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Share capital | 7 | 15,549 | 15,549 | 15,549 |
Share premium |
| 42,167 | 42,167 | 42,167 |
Group reorganisation reserve |
| (527) | (527) | (527) |
Share based payments reserve |
| 662 | 662 | 662 |
Foreign Exchange reserve |
| (1,770) | (910) | (1,770) |
Retained earnings |
| (55,405) | 7,576 | (54,881) |
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| ─────── | ─────── | ─────── |
Total Equity |
| 676 | 64,517 | 1,200 |
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| ─────── | ─────── | ─────── |
Non-current liabilities |
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Deferred tax |
| 108 | 128 | 118 |
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| ─────── | ─────── | ─────── |
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| 108 | 128 | 118 |
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| ─────── | ─────── | ─────── |
Current liabilities |
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Trade payables |
| 4,454 | 8,136 | 12,958 |
Accrued liabilities and other payables |
| 21,902 | 4,746 | 25,609 |
Tax payable |
| 9,133 | 9,174 | 9,132 |
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| ─────── | ─────── | ─────── |
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| 35,489 | 22,056 | 47,699 |
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| ─────── | ─────── | ─────── |
Total Liabilities |
| 35,597 | 22,184 | 47,817 |
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| ─────── | ─────── | ─────── |
Total Equity and Liabilities |
| 36,273 | 86,701 | 49,017 |
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| ═══════ | ═══════ | ═══════ |
Consolidated Statement of Cash Flows
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| Notes | 6 months to 30 September 2019 | 6 months to 30 September 2018 | Year to 31 March 2019 | |||
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| HKD'000 UNAUDITED | HKD'000 UNAUDITED | HKD'000 AUDITED | |||
Cash flows from operating activities |
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Net cash from operating activities | 1 | (1,740) | (6,879) | (3,985) | |||
Taxation |
| - | - | - | |||
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| ───── | ───── | ───── | |||
Net cash (used in)/ generated from operating activities |
| (1,740) | (6,879) | (3,985) | |||
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Investing activities |
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Sale/Addition of property, plant and equipment |
| 260 | - | (12) | |||
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| ───── | ───── | ───── | |||
Net generated from / (cash used) in investing activities |
| 260 | - | (12) | |||
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Net cash from / (used in) in financing activities |
| - | - | - | |||
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Taxation |
| - | - | - | |||
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Net decrease in cash and cash equivalents |
| (1,480) | (6,879) | (3,997) | |||
Cash and cash equivalents at beginning of the period |
| 8,943 | 12,275 | 12,275 | |||
Effect of foreign exchange rate changes |
| - | - | 665 | |||
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| ───── | ───── | ───── | |||
Cash and cash equivalents at the end of the period |
| 7,463 | 5,396 | 8,943 | |||
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| ═════ | ═════ | ═════ | |||
Represented by: |
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Bank balances and cash |
| 7,463 | 5,396 | 8,943 | |||
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Notes for Consolidated Statement of Cash Flows
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1. Net cash from operating activities |
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| 6 months to 30 September 2019 | 6 months to 30 September 2018 |
Year to 31 March 2019 | |||
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| HKD'000 UNAUDITED | HKD'000 UNAUDITED | HKD'000 AUDITED | |||
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Loss before income tax |
| (534) | (2,355) | (64,765) | |||
Adjustments for: |
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Depreciation on property, plant and equipment |
| 270 | 793 | 1,525 | |||
Interest income |
| - | - | - | |||
Amortisation |
| - | 50 | 101 | |||
Provision for Obsolete inventories |
| - | - | 15,722 | |||
Impairment of Property, plant and equipment |
| - | - | 19,778 | |||
Impairment of Goodwill |
| - | - | 1,355 | |||
(Increase) / decrease in inventories |
| 3,055 | 3,507 | 7,016 | |||
Decrease/(Increase) in trade receivables |
| 5,322 | 6,893 | (660) | |||
Decrease / (Increase) in prepayments, deposits and other receivables |
| 433 | (853) | 4,789 | |||
Increase / (decrease) in trade payables |
| (8,504) | (10,160) | (5,338) | |||
Increase / (decrease) in accrued liabilities and other payables |
| (1,782) | (4,754) | 16,492 | |||
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| ───── | ───── | ──── | |||
Cash used in operations |
| (1,740) | (6,879) | (3,985) | |||
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| ═════ | ═════ | ════ | |||
Consolidated Statement of Changes in Equity
| Share Capital | Share premium | Share based payment reserves | Group Reorgan-isation Reserve | Foreign exchange reserve
| Retained Earnings | Total |
| HKD'000 | HKD'000 | HKD'000 | HKD'000 | HKD'000 | HKD'000 | HKD'000 |
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As at 31 March 2018 | 15,549 | 42,167 | 662 | (527) | (910) | 9,921 | 66,862 |
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Total comprehensive income for the period | - | - | - | - | - | (2,345) | (2,345) |
Foreign exchange difference | - | - | - | - | - | - | - |
| ───── | ───── | ───── | ───── | ───── | ───── | ───── |
As at 30 September 2018 | 15,549 | 42,167 | 662 | (527) | (910) | 7,576 | 64,517 |
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Total comprehensive income for the period | - | - | - | - | - | (62,457) | (62,457) |
Foreign exchange difference | - | - | - | - | (860) | - | (860) |
| ───── | ───── | ───── | ───── | ───── | ───── | ───── |
As at 31 March 2019 | 15,549 | 42,167 | 662 | (527) | (1,770) | (54,881) | 1,200 |
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Total comprehensive income for the period | - | - | - | - | - | (524) | (524) |
Foreign exchange difference | - | - | - | - | - | - | - |
| ───── | ───── | ───── | ───── | ───── | ───── | ───── |
As at 30 September 2019 | 15,549 | 42,167 | 662 | (527) | (1,770) | (55,405) | 676 |
| ───── | ───── | ───── | ───── | ───── | ───── | ───── |
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Notes to the interim financial information
1. General information
Zibao Metals Recycling Holdings Plc is a company incorporated in England on 9 October 2013 under the Companies Act 2006 but domiciled in Hong Kong. It was listed on the AIM market on 20 June 2014. The Group's principal activity is that of trading and processing scrap metals.
2. Basis of preparation and significant accounting policies
This interim report, which incorporates the financial information of the Company, has been prepared using the historical cost convention, on a going concern basis and in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, using accounting policies which are consistent with those set out in the financial statements for the year ended 31 March 2019.
Taxes
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
Standards and Interpretations adopted with no material effect on financial statements
There are no IFRS or IFRIC interpretations that are effective for the first time in this financial period that would be expected to have a material impact on the Group.
IFRS16 is not material to the Group, therefore no adjustments have been made.
Standards, interpretations and amendments to published standards that are not yet effective.
The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial period beginning 1 April 2019 and have not been early adopted.
Reference | Title | Summary | Application date of standard | Application date of Group |
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IFRS 17 | Insurance Contracts | IFRS 17 Insurance Contracts | Periods Commencing on or after 1 January 2021 | 1 April 2021 |
The directors anticipate that the adoption of these standards and the interpretations in future periods will have no material impact on the financial statements of the Group.
3. Segmental reporting
In the opinion of the directors, the Group has one class of business, being the trading of scrap materials. The Group's primary reporting format is determined by the geographical segment according to the location of its establishments. There is currently only one geographic reporting segment, which is China. All revenues and costs are derived from the single segment.
4. Directors' remuneration
| 6 months to 30 September 2019 | 6 months to 30 September 2018 |
Year to 31 March 2019 |
| Salaries, fees and options | Salaries, fees and options | Salaries, fees and options |
| HKD'000 | HKD'000 | HKD'000 |
| UNAUDITED | UNAUDITED | AUDITED |
Wenjie Zhou | 120 | 120 | 240 |
Jianfeng Li | 120 | 120 | 240 |
Chor Wei Ong | 31 | 66 | 132 |
Chin Phang Kwok | 31 | 66 | 132 |
Peter Greenhalgh | 31 | 66 | 132 |
Ajay Rajpal | 31 | 66 | 132 |
| ─────── | ─────── | ─────── |
| 364 | 504 | 1,008 |
| _________ | _________ | _________ |
5. Loss per share
Loss per share data is based on the Group profit for the period and the weighted average number of shares in issue.
| 6 months to 30 September 2019 | 6 months to 30 September 2018 |
Year to 31 March 2019 |
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| HKD'000 | HKD'000 | HKD'000 |
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| UNAUDITED | UNAUDITED | AUDITED |
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Loss for the period attributable to owners of Company |
(524) |
(2,345) |
(65,662) |
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| ═════ | ═════ | ═════ |
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Weighted average number of ordinary shares for the purposes of basic earnings per share (000's) | 122,010 | 122,010 | 122,010 |
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Weighted average number of ordinary shares for the purposes of diluted earnings per share (000's) | 125,453 | 125,453 | 125,453 |
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| 6 months to 30 September 2019 | 6 months to 30 September 2018 |
Year to 31 March 2019 |
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| HKD'000 UNAUDITED | HKD'000 UNAUDITED | HKD'000 AUDITED |
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Basic loss per share |
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Total basic losses per share | (0.004) | (0.019) | (0.531) |
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Diluted loss per share |
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Total diluted earnings per share | (0.004) | (0.019) | (0.531) |
| ───── | ───── | ───── |
6. Cash and cash equivalents Group
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| As at 30 September 2019 | As at 30 September 2018 | As at 31 March 2018 |
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| HKD'000 | HKD'000 | HKD'000 |
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| UNAUDITED | UNAUDITED | AUDITED
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Cash and bank balances |
| 7,463 | 5,396 | 8,943 |
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| ─────── | ─────── | ─────── |
Cash and bank balances as presented in balance sheets |
| 7,463 | 5,396 | 8,943 |
Add: Pledged fixed deposits |
| - | - | - |
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| ─────── | ─────── | ─────── |
Cash and cash equivalents as presented in consolidated statement of cash flows |
| 7,463 | 5,396 | 8,943 |
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| _________ | _________ | _________ |
7. Share capital
The issued share capital as at 30 September 2019 was 122,010,000 ordinary shares of £0.01 each (30 September 2018: 122,010,000 ordinary shares of £0.01, 31 March 2019: 122,010,000 ordinary shares of £0.01)
8. The unaudited results for the period ended 30 September 2019 do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The comparative figures for the period ended 31 March 2019 were extracted from the audited financial statements which contained an unqualified audit report and did not contain statements under Sections 498 to 502 of the Companies Act 2006.
9. This interim financial statement will be, in accordance with the AIM Rules for Companies, available shortly on the Company's website at www.zibaometals.com.
10. The Company is incorporated in the UK but is treated as a Hong Kong resident for tax purposes.
Macau and Hong Kong tax has been provided at a rate of 12% and 16.5% respectively.
There was deferred taxation in respect of the period.