TIDMMCJ
RNS Number : 6816M
Majestic Corporation PLC
18 September 2023
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18 September 2023
Majestic Corporation Plc (the "Company" or "Majestic")
Interim Results to 30 June 2023
Majestic Corporation plc (AQUIS: MCJ), an emerging leader in the
precious metals and non-ferrous metals recycling, is pleased to
announce its interim results for the 6 month period ended 30 June
2023.
Financial highlights:
-- Revenue was US$13.0m (H1 2022: US$12.9m)
-- Profit before tax US$862k (H1 2022: US$980k)
-- Net assets increased to US$7.6m (as at 31 December 2022:
US$6.8m)
-- Cash in bank and on hand of US$1m (as at 31 December 2022:
US$1.8m)
Peter Lai, Chairman and CEO of Majestic said:
We have today published another strong set of interim results
achieved against a period of high interest rates, geopolitical
tension and with China, the biggest consumers of commodities,
experiencing shrinking GDP. We continue to closely monitor economic
developments, which predict a drop in industrial activities in key
sectors that are drivers for demand in commodities.
Despite these difficult conditions for global markets, which we
don't see improving in the short term, our focus remains on
safeguarding our competitiveness by further reducing our costs and
securing long term contracts with customers."
Improving performance in a year of macro and political
uncertainty is a tribute to the team's effort and risk management.
We are confident that the Company will continue to prosper in the
coming years."
Majestic Corporation Plc
Peter Lai (Chairman and CEO) Tel: +852 9726 2890
Joe Lee (Chief Financial Officer) Tel: +44 (0) 7539 103 502
Guild Financial Advisory Ltd - AQSE Corporate Adviser
Ross Andrews Tel: +44 (0) 7973 839 767
PKL Studios - Media enquiries kl@pklstudios.com
Vox Markets - Investor Relations Advisor majesticcorp@voxmarkets.co.uk
About the Company
Majestic Corporation is an emerging leader in the precious
metals and non- ferrous metals recycling. Working with suppliers
globally Majestic plays an integral role in the circular economy by
making resources available for future use.
CHAIRMAN AND CEO'S REPORT
FOR THE PERIODED 30 JUNE 2023
The Board of Majestic Corporation Plc is pleased to announce the
Company's unaudited interim results for the six months ended 30
June 2023.
Statement from Chairman and CEO
As a vertically integrated organisation, we process, upgrade and
recycle non-ferrous metals products and deliver it to refineries
directly. We continue to source material from the US, Mexico,
Australia and Europe (including the UK) and upgrade the products
through a network of facilities located in Italy and Malaysia. The
first half of the 2023 financial year has been challenging due to
the high level of uncertainty resulting from geopolitical
conflicts, logistical pressures and macroeconomic headwinds yet the
Company has performed well.
The Russian invasion of Ukraine continued to have a material
adverse impact on the business, to both the cost and supply of
precious metals. The Board will continue to monitor the effects on
our supply pressures, logistics, foreign exchange rate fluctuations
and commodity pricing.
Outlook
Looking forward to the current global situation, the rising
interest rates and inflation rates tends to have an adverse impact
on the price of commodities, however there is also usually a period
of resetting in many industries to reflect a more nationalistic
approach and control of a country's own critical metal supplies.
Majestic is well positioned to benefit from this, with the core
sectors being precious and industrial metals.
The Board remains cautiously optimistic and continues to
evaluate opportunities for generating value for shareholders.
CHAIRMAN AND CEO'S REPORT
FOR THE PERIODED 30 JUNE 2023
Financial Highlights
-- The 6 months result to 30 June 2023 marks the second interim
results following the successful listing of the company to the AQSE
exchange in March 2022.
-- The turnover for the 6-month period was another strong result at US$13m (H12022: $12.9M).
-- The Company has retained a strong cash position at 30 June
2023 with cash at bank US$1m (as at 31 December 2022: US$1.8m).
-- Underlying earnings before tax of US$862k (2022: US$980k).
Strategic Report
The principal activity of the Group continues to be urban
recycling of precious metals and non-ferrous metals from weee and
auto petroleum catalysts. We have procurement warehouse locations
in the USA, and the UK and long-term suppliers in Italy, Lithuania,
Mexico and Australia. In addition, we have processing facilities in
Malaysia capable of handling twenty thousand tons a year. With our
reputation, quality, and volume, we are able to deliver directly to
refineries.
The success of our strategy rests on the Company's profitability
first, and we eliminate risk by hedging our sales, especially at
the time of uncertainty. The result announced today demonstrates
this to be successful strategy.
Peter Lai Chairman & CEO
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE PERIODED 30 JUNE 2023
(Expressed in United States Dollar)
Notes
Unaudited Unaudited
30.6.2023 30.6.2022
Turnover 4 13,011,621 12,880,410
Cost of goods sold (11,764,400) (11,530,662)
------------------- -------------------
Gross Profit 1,247,221 1,349,748
Other income 4 5,158 88,364
Administrative expenses (390,528) (458,335)
------------------- -------------------
Profit from operation and before
taxation 5 861,851 979,777
Taxation (121,150) (148,523)
------------------- -------------------
Profit for the period 740,701 831,254
Other comprehensive income for - -
the period
=================== ===================
Total comprehensive income for
the period 740,701 831,254
=================== ===================
Earnings per share (cents per
share) 3.7 4.2
=================== ===================
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022 & 30 JUNE 2023
(Expressed in United States Dollar)
Notes Unaudited Audited 31.12.2022
30.06.2023
CURRENT ASSETS
Inventories 8 9,221,001 8,383,096
Trade receivables 9 1,524,470 1,669,301
Prepayments and deposits 2,474,396 2,717,785
Amounts due from related companies 860,333 1,163,131
Tax recoverable - 9,298
Amount due from director 104,443 53,209
Cash in bank and on hand 974,305 1,827,447
15,158,948 15,823,267
CURRENT LIABILITIES
Trade payables 10 3,180,375 1,621,771
Deposits received 1,391,555 2,934,416
Accruals and other payables 36,764 86,463
Amounts due to related companies 1,337,309 1,285,073
Import loans 11 1,531,134 3,064,412
Tax payable 109,978 -
------------------- -----------------------------
7,587,115 8,992,135
NET CURRENT ASSETS 7,571,833 6,831,132
------------------- -----------------------------
NET ASSETS 7,571,833 6,831,132
CAPITAL AND RESERVE
Called up share capital 12 135,919 135,919
Share premium 403,217 403,217
Capital reserve 4,767,431 4,767,431
Merger reserve (44,525) (44,525)
Foreign currency reserve (17,723) (17,723)
Retained profit 2,327,514 1,586,813
7,571,833 6,813,132
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIODED 30 JUNE 2023
(Expressed in United States Dollar)
Share Share premium Capital Merger Foreign Retained
capital reserve reserve currency Profits Total
reserve
Balance at 1 January
2022 1 - 4,767,431 - 1,365,099 6,132,531
Shares issued 135,918 - - 135,918
Profit for the
period 288,755 288,755
Bonus share issuer (67,041) (67,041)
Cash share issue - 492,340 - 492,340
IPO costs - (89,123) - (89,123)
Foreign currency
reserve (17,723) - (17,723)
Merger reserve (44,525) (44,525)
--------- ------------- ----------- ---------- ---------- ----------- -----------
Balance at 31
December 2022 135,919 403,217 4,767,421 (44,525) (17,723) 1,586,813 6,831,132
========= ============= =========== ========== ========== =========== ===========
Balance at 1 January
2023 135,919 403,217 4,767,421 (44,525) (17,723) 1,586,813 6,831,132
Profit for the
period 740,701 740,701
--------- ------------- ----------- ---------- ---------- ----------- -----------
Balance at 30 June
2023 135,919 403,217 4,767,421 (44,525) (17,723) 2,327,514 7,571,833
========= ============= =========== ========== ========== =========== ===========
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE PERIODED 30 JUNE 2023
(Expressed in United States Dollar)
OPERATING ACTIVITIES
Unaudited Unaudited
30.06.2023 30.06.2022
Profit for the period 740,701 831,254
Adjustment:
Cost of goods sold 11,764,400 11,530,662
------------- ------------
Operating profit before working capital changes 12,505,101 12,361,916
Changes in working capital
Purchase of inventories (12,602,305) (12,069,571)
(Increase)/decrease in trade and other receivables 649,082 23,461
(Decrease)/Increase in trade and other payables 128,258 581,642
NET CASH GENERATED/(USED) TO OPERATING ACTIVITIES 680,136 897,448
------------- ------------
INVESTING ACTIVITIES
NET CASH USED TO INVESTING ACTIVITIES - -
------------- ------------
FINANCING ACTIVITIES
Withdrawal/(Repayment) of import loans (1,533,278) (697,766)
NET CASH (USED)/GENERATED FROM FINANCING ACTIVITIES (1,533,278) (697,766)
------------- ------------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (853,143) 199,682
CASH AND CASH EQUIVALENTS AT BEGINNING OF
INTERIM PERIOD - 1ST JAN 1,827,447 2,467,428
------------- ------------
CASH AND CASH EQUIVALENTS AT OF
INTERIM PERIOD - 30TH JUNE 974,305 2,667,110
============= ============
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE
PERIODED 30 JUNE 2023
(Expressed in United States Dollar)
1. GENERAL INFOMATION AND BASIS OF PREPARATION
The Company is a public company, limited by shares, and
incorporated and domiciled in the United Kingdom. The company has
its listing on AQSE Growth Market.
The address of its registered office and the principal place of
business are located Unit 15 Drome Road, Deeside Industrial Park,
Deeside, Wales, CH5 2NY, United Kingdom.
The financial statements are presented in United States
Dollars.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
On 8 March 2022, the Company acquired the entire shareholding of
Majestic Corporation Limited via a share-for-share exchange. The
insertion of the Company on top of the existing Majestic
Corporation Group does not constitute a business combination under
IFRS 3 Business Combinations. This transaction has been deemed to
be an acquisition in line with guidance from the Interpretations
Committee (IFRIC) and as such the consolidated accounts for the
Group are treated as a continuation of the consolidated accounts of
the Majestic Corporation Group.
Under the principles of continuation accounting the consolidated
financial statement of the newly formed Group must reflect:
-- The assets and liabilities of the Majestic Corporation Group
at pre-combination carrying amounts;
-- The retained earnings and other equity balances of the
Majestic Corporation Group at pre-combination carrying amounts;
-- The assets and liabilities of the Company at fair value;
-- The share capital of the Company;
Basis of preparation
These interim condensed consolidated financial statements
(Interim Financial Statements) Majestic Corporation Group Plc
comprise the results of the Group for the 6 months ended 30 June
2023.
The consolidated reserves of the Group have been adjusted in the
current period following the share-for-share exchange to reflect
the share capital of the Company with the difference giving rise to
a merger reserve.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
UK adopted International Accounting Standard 34, "Interim Financial
Reporting and the Disclosure and Transparency Rules of the
Financial Conduct Authority. The annual financial statements of the
Group will be prepared in accordance with UK adopted International
Financial Reporting Standards. They do not constitute statutory
accounts within the meaning of section 434(3) of the Companies Act
2006 and should be read in conjunction with the financial
statements prepared for the Majestic Corporation Group for the
twelve months ended 31 December 2022, which were prepared in
accordance with International Financial Reporting Standards (IFRS)
and are filed with the Companies Registry in Hong Kong and are
available to shareholders on request"
The information for the period ended 30 June 2023 has neither
been audited nor reviewed and does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006.
3. PRINCIPAL ACCOUNTING POLICIES
The principal accounting policies adopted are set out below.
a. Basis of accounting and accounting policies
The financial statements have been prepared under the historical
cost basis.
b. Revenue recognition
Revenue from the sales of goods is recognised when control of
the goods has transferred, being when the goods have been shipped
to the customer's specific location. Following delivery, the
customer has full discretion over the usage of the goods, has the
primary responsibility upon selling the goods and bears the risks
in relation to the goods. A receivable is recognised by the Company
when the goods are delivered to the customers as this represents
the point in time at which the right to consideration becomes
unconditional, as only the passage of time is required before
payment is due.
Interest income is recognised as other income as it accrues
using the effective interest method.
c. Cash and cash equivalents
Cash and cash equivalents include demand deposits and other
short-term highly liquid investments with original maturities of
three months or less.
d. Trade and other receivables
Trade and other receivables are stated at estimated realisable
value after each debt has been considered individually. Where the
payment of a debt becomes doubtful a provision is made and charged
to the income statement.
e. Trade and other payables
Trade and other payables are recognised initially at the
transaction price and subsequently measured at amortised cost using
the effective interest method.
f. Translation of foreign currency
Foreign currency transactions during the period are translated
into United States Dollars at the exchange rates ruling at the
transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated into United States Dollars at the
market rates of exchange ruling at the reporting date. Exchange
gains and losses on foreign currency translation are dealt with in
the statement of income and retained earnings.
g. Taxation
The tax expense in the consolidated income statement comprises
current tax payable and deferred tax.
h. Inventories
Inventories are stated at the lower of cost and net realisable
value. In arriving at net realisable value an allowance has been
made for deterioration and obsolescence.
i. Good in transit
The risk and reward of the inventory transfers to customers once
they have issued an analysis report confirming shipment has been
accepted.
j. Leases
Leases are classified as operating leases and the rentals
receivable or payable under these leases are credited or charged to
the statement of income and retained earnings on a straight-line
basis over the duration of the leases.
k. Going concern
The consolidated financial statements are prepared on the going
concern basis. The financial position of the Company, its cash
flows and liquidity position are described in the interim
consolidated financial statements and notes. The Company has the
financial resources to continue in operation for the foreseeable
future, a period of not less than 12 months from the date of the
report.
4. TURNOVER AND OTHER INCOME
Turnover represents the amounts received and receivables for
goods sold to the customers. Turnover and other income recognised
during the period are as follows:
Unaudited Unaudited
-------------- -----------
30.6.2023 30.6.2022
-------------- -----------
Turnover
Sales to Japan 8,736,156 9,621,693
Sales to Malaysia 4,275,465 3,258,717
-------------- -----------
13,011,621 12,880,410
============== ===========
Unaudited Unaudited
-------------- ---------
30.6.2023 30.6.2022
-------------- ---------
Other income
Interest income 5,080 1,025
Exchange gain - 77,144
Government subsidies - 10,195
Miscellaneous income 78 -
-------------- ---------
5,158 88,364
============== =========
5. Profit from operation and before taxation have been arrived at after charging:
Unaudited Unaudited
30.6.2023 30.6.2022
------------- ------------
Finance costs 58,828 74,616
Cost of goods sold 11,764,400 11,530,662
============= ============
6. DIRECTORS REMUNERATIONS
Director's remunerations disclosed is
as follows:
Unaudited Unaudited
30.6.2023 30.6.2022
---------------------------- --------------
Fees - -
Other emoluments 61,653 79,286
---------------------------- --------------
61,653 79,286
============================ ==============
7. STAFF COST
Unaudited Unaudited
30.6.2023 30.6.2022
---------------------------- --------------
Salary 58,449 65,922
Mandatory provident fund 4,192 3,323
---------------------------- --------------
62,641 69,245
============================ ==============
8. INVENTORIES
Inventories comprise entirely of stock
in trade. Unaudited Audited
30.06.2023 31.12.2022
---------------------------- --------------
Stock in warehouse 3,854,471 2,695,214
Stock in transit 5,366,530 5,687,882
---------------------------- --------------
9,221,001 8,383,096
============================ ==============
9. TRADE RECEIVABLES
The ageing analysis of the trade receivables, based on invoice
dates, is as follows:
Unaudited Audited
30.06.2023 31.12.2022
---------- ----------
Within one month 197,341 215,252
1-3 months 1,153,564 1,454,049
Over 3 months 173,565 -
---------- ----------
1,524,470 1,669,301
========== ==========
Trade receivables disclosed above include amounts which are past
due at the end of the reporting period against which the Company
has not recognized an allowance for doubtful receivables because
there has not been a significant change in credit quality and the
amounts are recoverable subsequent to the reporting date. The
Company does not hold any collateral or other credit enhancements
over these balances, nor does it have a legal right of offset
against any amounts owed by the Company to the counterparty.
10. TRADE PAYABLES
The ageing analysis of the trade payables, based on invoice
dates, is as follows:
Unaudited Audited
30.06.2023 31.12.2022
---------- ----------
Within one month 1,792,810 413,533
1-3 months 1,056,135 1,207,323
Over 3 months 331,430 915
========== ==========
3,180,375 1,621,771
========== ==========
11. IMPORT LOANS
The Company has obtained credit facilities from its bankers as
secured by guarantees of the director and a related company
together with fixed deposit of the Company. The loans are interest
bearing at LIBOR+1.45% and repayable in 120 days from the drawdown
date which has multiple repayment dates.
12. SHARE CAPITAL
Unaudited Audited
30.06.2023 31.12.2022
---------- ----------
Issued and fully paid
20,000,000 ordinary shares of
GBP0.005 each 135,919 135,919
========== ==========
13. FINANCIAL RISK MANAGEMENT
Exposure to credit, liquidity, interest rate, foreign currency
and equity price risks arises in the normal course of the Company's
business. The Company's exposure to these risks and the financial
risk management policies and practices used by the Company to
manage these risks are described below.
a. Credit risk management
In order to minimize credit risk, credit approvals and
monitoring procedures are in place to ensure that follow-up action
is taken to recover overdue debts.
b. Liquidity risk management
Ultimate responsibility for liquidity risk management rests with
the board of directors, which has established an appropriate
liquidity risk management framework for management of the Company's
short, medium and long-term funding and liquidity management
requirements. The Company manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets
and liabilities.
c. Market risk management - interest rate risk
The Company draws import loans to maintain stable cashflow. The
loan is interest bearing at LIBOR+1.45%. 5% is the sensitivity rate
used when reporting interest rate risk internally to key management
personnel and represents management's assessment of the reasonably
possible change in interest rates. The Company's sensitivity to a
5% increase and decrease in LIBOR is as follow:
Unaudited Audited
30.06.2023 31.12.2022
5% increase effect on profit
for the year (5,783) (4,402)
5% decrease effect on profit
for the year 5,783 4,402
d. Market risk management - foreign currency risk
The Company undertakes most of the transactions denominated in
United States Dollar with few transactions denominated in Euro. 5%
is the sensitivity rate used when reporting foreign currency risk
internally to key management personnel and represents management's
assessment of the reasonably possible change in foreign exchange
rates. The Company's sensitivity to a 5% increase and decrease in
Euro against United States Dollar is as follow:
Unaudited Audited
30.06.2023 31.12.2022
---------- ----------
5% increase effect on profit
for the year (68,934) (64,398)
5% decrease effect on profit
for the year 68,934 64,398
14. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net
profit/(loss) for the period attributable to ordinary equity
holders of the parent by the weighted average number of ordinary
shares in issue during the period. As the condensed consolidated
interim financial statements have been presented as a continuation
of the existing group, the number of shares taken as being in issue
for both the current and preceding periods are deemed to be the
number of ordinary shares issued by Majestic Corporation Plc to
acquire Majestic Corporation Limited in the share for share
exchange. The weighted average number of shares is then adjusted to
reflect changes in the number of ordinary shares issued in Majestic
Corporation Limited that occurred during the previous period.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
Unaudited
30.06.2023
----------
Profits attributable to ordinary equity
holders of the Company 740,701
Average number of shares 20,000,000
Earnings per share (cents per share) 3.7
There have been no other transactions involving actual ordinary
shares or potential ordinary shares between the reporting date and
the date of authorisation of this financial information.
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END
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