TIDMFOX
RNS Number : 1803P
Fox Marble Holdings PLC
16 February 2021
16 February 2021
Fox Marble Holdings plc
("Fox Marble" or the "Company")
Operating Update, Issue of Equity and Notice of Results
Fox Marble, the AIM listed company focused on marble quarrying
and finishing in Kosovo and the Balkans region, is pleased to
provide the following operational update ahead of the publication
of its preliminary results for the year ended 31 December 2020
which are anticipated to be notified in May 2021.
Highlights
-- Sales for the year ended 31 December 2020 of EUR0.7 million (2019 - EUR1.4million).
-- Sales of processed marble increased to EUR0.6 million from
EUR0.2 million in 2019 reflecting the success of winning large
contracts to the Kosovo market. Sales of block marble fell to
EUR0.1 million from EUR1.2 million in 2019 as a result of Covid-19
restrictions.
-- Production for the year ended 31 December 2020 of 6,060
tonnes (2019 - 14,515 tonnes) due to planned stoppages as a result
of Covid-19.
-- Processing volumes increased 300% through the factory, as a
result of increased demand for material, as well as process
improvements made.
-- Fundraising completed raising GBP1.0 million in December 2020
together with litigation funding committed of GBP0.5 million to
fund arbitration case. Dentons Europe CS LLP engaged as counsel in
December 2020.
Sales
Sales of processed marble have increased to EUR0.6 million from
EUR0.2 million in 2019, of which EUR0.45 million occurred in H2
2020. A number of new contracts were signed for processing services
and processed marble which formed the backbone of sales through the
end of 2020 and are expected to continue into 2021.
-- The Suhareka square in Kosovo contract, announced on 14 April
2020, to supply up to 20,000 square metres of paving. Material
already specified and contracted under the first two stages of the
project has a total value in excess of EUR400,000, and once all
20,000 square metres have been supplied the project is expected to
be worth in excess of EUR750,000, as announced on 13 May 2020. Fox
Marble has supplied over 10,000 sqm of material since June
2020.
-- A contract to supply 20,000 square metres of cut and finished
paving tiles for installation in the town square for the
Municipality of Poduyeva in Kosovo, announced on 30 July 2020. Fox
Marble began supplying material for this project in August 2020 and
has supplied over 4,000 square metres of material to date. The
Company received confirmation of Phase II of the project in January
2021, and the total value of this contract is around EUR700,000
over 2020 and 2021, as announced on 30 July 2020 and a further
update announcement released by the Company on 4 February 2021.
-- A contract to supply 35,000 square metres of cut and polished
tiles to CC Apartments LLC, announced on 23 June 2020. CC
Apartments LLC is engaged in developing several prestigious
projects including apartments in Kosovo, as well as Albania and
surrounding countries. Fox Marble will be processing blocks of a
range of marble from its own quarries for this project and
supplying this material from its factory in Kosovo over the course
of 2021 starting next month. The total value of the contract is in
excess of EUR700,000.
Sales of block marble have fallen significantly in 2020 from
EUR1.2 million in 2019 to EUR0.1 million in 2020 due to the impact
of COVID-19 on block marble sales. From January 2020, COVID-19's
impact on the Chinese market had an immediate effect. As the
pandemic spread, global travel restrictions severely impeded the
international trade in blocks. As travel restrictions lift in 2021,
the Company expects to see growth in block sales.
Quarry Production
The Group elected to significantly scale back quarry production
in order to keep operational cash flow neutral in the face of the
fall in demand for block marble caused by COVID-19. As a result,
production fell from 14,515 tonnes in 2019 to 6,060 tonnes in 2020.
Production at Prilep was re-started in August 2020, though
production levels continued to be closely monitored. The Prilep
quarry continues to supply block material to the factory in
Kosovo.
Cervenillë quarry was the first of our sites opened in November
2012. It is open across three separate locations (Cervenillë A, B
& C) from which red (Rosso Cait), red tinged grey (Flora) light
and darker grey (Grigio Argento) marble can be accessed. The quarry
was re-opened in September 2020 to address the demand for Argento
Grigio from existing and future processed marble contracts.
The Syriganë quarry in Kosovo - sources of Breccia marbles, is
in good condition, with machinery on site and ready for deployment.
At present we do not have quarry teams on site, as we have a
significant reserve of stock of materials, however the quarries can
be staffed at short notice.
The foundation of a successful and growing natural stone company
is its reserves base. Fox Marble's strategy is to seek to grow this
over the medium term, should the appropriate opportunities be
available and subject to detailed drilling and exploration. Opening
new quarries over the medium term will provide the opportunity to
increase both block sales and processed marble from the factory.
The Company continues to keep new sites for development under
review.
Factory
Fox Marble's processing facility is a 5,400 square metre double
skinned steel factory for the cutting and processing of blocks into
polished slabs and tiles which was erected on a 10-hectare site
that the Company acquired in Lipjan in 2013, close to Pristina
airport in Kosovo.
In June 2020, the Company announced that it had acquired two
additional automatic CNC cutting machines to be installed in its
factory in Kosovo. The two machines were manufactured by Simec Srl
and Garcia Ramos SA and with the existing Gravellona Machine Marmo
CNC machine have doubled the capacity to cut tiles. The machines
have been installed and are now fully operational.
The machines, and procedural improvements implemented have
helped drive an increase in processing volumes 300% from 2019 to
2020. We continue to examine ways to increase levels of production
and operating efficiency through 2021.
Dispute and Arbitration Claim
Fox Marble has engaged the services of Dentons Europe CS LLP
("Dentons") to act on the Company's behalf in its circa EUR195
million claim against the Republic of Kosovo ("the Arbitration").
Dentons have agreed a fee arrangement which enables Fox Marble to
bring the Arbitration through to its conclusion.
To complement this arrangement with Dentons, the Company
announced on 16 December 2020 that it had secured firm commitments
of GBP0.5 million ("Litigation Fund") in the form of litigation
funding from private investors.
This funding, plus a pre-agreed return on investment, will only
be repaid if the Arbitration proceedings are successful.
The Company also conducted a placing raising GBP1.05 million
before expenses, which along with the Litigation Fund and the fee
arrangement with Dentons are collectively expected to cover all
costs throughout the Arbitration process and has allowed Fox Marble
to commence preparations for the formal proceedings against the
Republic of Kosovo.
Issue of shares
The Company has issued a total of 5,000,000 new ordinary shares
in the Company to five individuals in lieu of cash payments. The
issue of shares reflects the contributions made to the Company by
these individuals.
Application will be made for 5,000,000 ordinary shares issued to
be admitted to trading on AIM, which is expected to occur on or
around 19 February 2021 at 8.00am ("Admission") and will rank
equally in all respects with the Company's existing ordinary
shares.
Total Voting Rights
In accordance with Rule 5.6.1 of the Disclosure and Transparency
Rules ("DTRs"), the Company's issued share capital following
Admission will consist of 378,872,214 ordinary shares of 1 pence
each. The Company does not hold any ordinary shares in treasury.
Therefore, the total number of voting rights in the Company
following Admission is 378,872,214.
The above figure of 378,872,214 may be used by shareholders in
the Company as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the share capital of the Company
under the DTRs.
Chris Gilbert, CEO of Fox Marble, commented:
"2020 was a year dominated by the impact of COVID-19 , both on
the market in which Fox Marble operates and directly on Fox
Marble's operations. Despite a turbulent year, the Company has made
significant progress in several areas. Sales of processed marble
have increased significantly, driven by the large contracts signed
in 2020 within Kosovo, supported by targeted capital expenditure
and a focus on process improvements. Funding has been secured for
our Arbitration case, and we can now expect to see progress on this
matter. While the block marble market was very disappointing in
2020, we are starting to see some green shoots of recovery and are
confident that 2021 will see a gradual return to normal sales
volumes."
This announcement contains inside information for the purposes
of Regulation 11 of the Market Abuse (amendment) (EU exit)
Regulations 2019/310. The Directors of the Company take
responsibility for this announcement.
For more information on Fox Marble please visit
www.foxmarble.net or contact:
Fox Marble Holdings plc
Chris Gilbert, Chief Executive Officer Tel: +44 (0) 20 7380
0999
Fiona Hadfield, Finance Director Tel: +44 (0) 20 7380
0999
Brandon Hill Capital (Joint Broker)
Oliver Stansfield Tel: +44 (0) 20 3463
5000
Allenby Capital (Joint Broker)
Nick Naylor/Nick Athanas/Liz Kirchner Tel: +44 (0) 20 3394
(Corporate Finance) 2973
Amrit Nahal (Sales and Corporate Broking)
Cairn Financial Advisers LLP (Nomad)
Liam Murray / Sandy Jamieson Tel: +44 (0) 20 7213
0880
Notes to Editors:
Fox Marble ( AIM: FOX ), is a marble production, processing and
distribution company in Kosovo and the Balkans region.
Its marble products, which includes Alexandrian Blue,
Alexandrian White, Breccia Paradisea, Etruscan gold and Grigio
Argento and are gaining sales globally both to international
wholesale companies as well as being supplied directly into luxury
residential properties. In the UK these include among others St
George's Homes and Capital and Counties Plc's Lillie Square
development. In Sydney, Australia Rosso Cait, Alexandrian White and
Breccia Paradisea marble have been used in what is expected to be
Australia's most expensive residential property. These sales serve
to demonstrate the desirability of Fox's premium marble products as
the stone of choice in some of the most prestigious and expensive
residential developments around the world.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
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