RNS Number:7137R
Polymer Logistics N.V.
07 April 2008
7 April 2008
Polymer Logistics N.V.
("Polymer Logistics" or "the Company")
Preliminary Results
Polymer Logistics NV, a leading provider of sustainable 'one touch' Retail Ready
Packaging (RRP) solutions to retailers and suppliers in the UK, Continental
Europe and the US, announces preliminary results for the year ended 31 December
2007.
Financial Highlights
* Revenue growth of 64% to stand at Euro36.8m (2006: Euro22.5m)
* EBITDA (excluding exceptional G&A expenses) of Euro8.7m (2006: Euro8.2m)
* Post Tax Profit (excluding exceptional G&A expenses) increased by
13% to stand at Euro4.0m (2006: Euro3.6m)
* Earnings Per Share of Euro0.05 (2006: Euro0.07)
* Final gross dividend of 0.17c which, together with the interim dividend of
0.40c, equates to a full-year gross dividend of 0.57c (2006: N/A)
* Order pipeline remains strong standing at over Euro50.0m for 2008
Operational Highlights
* Successful launch of pool management system in US and Italy, both key
strategic markets for the Group
* Several new products launched to target client needs and offer new
revenue opportunities
* Significant strengthening of management resources to support
management execution
Commenting on the results Polymer Logistics Chief Executive, Gideon Feiner,
commented:
"2007 was a challenging year for Polymer Logistics. We executed 3 large
projects in 3 geographic areas: USA, Italy and Israel. We also managed to
achieve 45% growth in our core UK market. However, as highlighted in our Trading
Update in February, profits for 2007 fell below our expectations at the start of
the year.
"The Company's principal aims for 2008 are clear. We will continue to focus on
organic growth and meeting our business plan targets, managing the growth of our
new Italy and US contracts, and selectively pursuing new contract opportunities.
Our strengthened management team will provide us with a platform from which to
successfully execute this growth strategy. I and my fellow Board members look
forward with confidence to reporting a successful 2008."
Enquiries:
Polymer Logistics N.V. +31 (0) 164 271 660
Gideon Feiner, Chief Executive Officer
Dana Gerner, Chief Financial Officer
Financial Dynamics +44 (0)20 7831 3113
Harriet Keen / Matt Dixon / Erwan Gouraud
Collins Stewart Europe Limited +44 (0)20 7523 8350
Mark Connelly / Oliver Quarmby
Notes to Editors:
Polymer Logistics is a provider of sustainable 'one-touch' logistics solutions
to leading retailers and suppliers in the UK, Continental Europe and the US.
Polymer Logistics' Retail Ready Packaging (RRP) is designed to be 'display
ready' from factory to the point of sale. Consumers purchase directly from RRP
units in-store, with no requirement for retailers to unpack goods from the RRP
units onto the shelves. The units are reusable, thereby reducing the
environmental impact due to the volume of waste created by disposable 'one-way'
packaging made out of timber or cardboard. In addition, Polymer Logistics' RRP
units are stackable and foldable and are designed to maximise the capacity of
delivery vehicles which reduces the number of trips required to be taken in the
logistics loop.
Polymer Logistics is based in The Netherlands with subsidiaries in the UK,
Israel and the US and branch offices in Spain and Italy. Its principal
customers are located in the United Kingdom and Continental Europe. The Group
has ongoing relationships with a number of blue chip retailers including Tesco,
Asda, and Sainsbury, as well as blue chip FMCG suppliers including Coca Cola
Enterprises Limited, Danone Waters, Britvic Soft Drinks and Arla Food.
Polymer Logistics listed on the AIM market of the London Stock Exchange in
December 2006 and its ticker symbol is POLL. For further information please
visit the company website, www.polymerlogistics.com.
CHAIRMAN'S STATEMENT
Since coming to market, our company has expanded rapidly and added strong bases
for future sales growth in Italy and the USA alongside its core UK operations.
However, whilst we have made good progress in this regard, we have still to
achieve some of the objectives we set ourselves at the time of our IPO in 2006.
Although the Company has grown sales at a compound annual growth rate of more
than 50% since 2005, the Company fell some way short this year of its original
profit expectations. Nevertheless, the Board believes that the Company is now
better positioned to support its expected growth in 2008. The Company expanded
its operations in 2007 into 2 new geographic areas, winning new customers and
introducing new product lines, establishing its position as a leading Retail
Ready Packaging (RRP) solution provider in Europe and in the US.
The Board, aware of the growing pains the Company suffered in 2007, is fully
supportive of the latest steps to strengthen the management team and to focus on
controlled growth, including the appointment of a Group COO. The Board believes
that implementation of the management team's action plan for 2008 will allow the
Company to meet its business and financial targets.
Business Development and Strengthening Operations
The successful launch by the Company of its pool management operations in Italy
is a testimony to the Company's ability to manage large scale projects. In
2007, the Company also concentrated on executing its planned penetration of the
US market and was rewarded with 3 pool management agreements in the US with
leading retailers and a large fruit and vegetable provider.
The new contracts launched in Italy and the US in 2007, the long term sales
contracts and the current business in the UK and Germany provide the Company
with a strong order book for 2008 which currently stands at over Euro50 million.
The Company continues to pursue its innovative philosophy, and is involved in
several new product development initiatives with its customers, which should
lead to further organic growth.
As part of this philosophy, the Board recognised this year that the Company's
management team did not have sufficient resources at its disposal and we have
subsequently worked towards strengthening these resources. The Board therefore
resolved to create the position of Group Chief Operating Officer and has
appointed the current Head of the Company's Italian Operations, Mr. Gian Paolo
Mezzanotte, to this position. Prior to his involvement in Polymer Logistics, Mr
Mezzanotte previously acted as Sourcing Manager for Chep-Europe. In addition,
in the last quarter of 2007, the Company added 3 more senior managers to its
team: Human Resource, Information Systems, and IR & Business Development.
At the same time the Company established 3 new operating teams and invested time
in recruiting, training and assimilating them into the Company's culture:
* Italy - 17 people
* USA - 12 people
* Production Plant - 15 people
The Board believes it now has the requisite infrastructure to support the
successful implementation of its business plan for 2008.
People
Human resource was an important factor in Polymer Logistics' sales growth in
2007. The hard work of the Company's staff and the efforts of all employees to
ensure the smooth assimilation of the new customers in Italy, the US and Israel
were admirable. I am very proud to work with such dedicated and passionate
colleagues, and the Board would like to thank all of the Company's employees for
their substantial contribution towards meeting this year's challenges.
Looking Ahead
The Company's principal aims for 2008 are clear. We will continue to focus on
organic growth and meeting our business plan targets, managing the growth of our
new Italy and US contracts, and selectively pursuing new contract opportunities.
Our strengthened management team will provide us with a platform from which to
successfully execute this growth strategy. In doing this, we will aim to ensure
that we maintain the highest standards of customer satisfaction and through
these efforts generate value for our shareholders.
Although the Company succeeded this year in achieving over 50% sales growth and,
in so doing, validated its recurring revenue model, at the same time we did not
meet our expectations. The focus of the management team now rests on ensuring
that we meet expectations for the coming year and years ahead.
The Company begins 2008 with a stronger team and platform from which to grow and
with a solid order book. We remain committed to delivering shareholder value
and look forward with confidence to reporting on a successful 2008.
Annual Report and Accounts
A copy of the Annual Report and Accounts will be sent to all shareholders
shortly and will also be available from the Company's registered office:
Vierbundersweg 15, Dongen 5107 NL, the Netherlands.
The Annual Report and Accounts will also be published on the Company's website:
www.polymerlogistics.com
Zvi Yemini
Chairman
April 7th, 2008
CHIEF EXECUTIVE'S REVIEW
Introduction
2007 year was a year of great challenge for Polymer Logistics in which we
managed to achieve 45% growth in our core market in the UK and executed 3 large
projects in 3 geographic areas: the US, Italy and Israel.
During 2007, the Company continued to grow its product and service offering,
introducing a new suite of products mainly for the Italian and US markets. These
products have been well received by these customers and have allowed the Company
to win additional long-term pool management agreements. These include
agreements with Fresh & Easy and HEB, both in the US, which were launched in the
4th quarter of 2007 and are progressing well.
To support the growing demand for the Company's products, a production plant was
purchased in mid 2007. The Company is now consolidating its production operation
in the new plant (compared to our previous arrangement of working with several
subcontractors), with a strong emphasis on quality assurance.
Business Review:
In 2007 the Company faced 3 major challenges:
1. Italy - Launching the July 2006 pool-management contracts with
Carrefour and Ortofin by March 1st, 2007. The Company had to co-ordinate in a
short period:
* Product development of 5 different foldable crates and the design and
production of moulds;
* Production of the crates;
* Allocation and establishment of 2 automated wash-sites, each with
daily wash capacity of 100k crates;
* Establishment of a logistics network covering all of Italy;
* Signing circa 400 fruit & vegetable suppliers to Carrefour and
Ortofin on supply service agreements;
* Defining and assimilation of a dedicated pool-management software
system; and
* Establishment of a co-ordinated & professional team composed of sales,
customer service, logistics and finance personnel.
As reported in our Trading Update, a strike late last year by truck drivers in
Italy resulted in circa Euro0.5 million of lost revenues and Euro0.25 million of lost
profit during the period. Nevertheless, our Italian operation's current run rate
is very promising and the business demonstrates positive cash-flow.
2. US - 3 major pool-management contracts were signed and launched in 2007
in two states: California and Texas. This follows the Company's strategy to
work in areas where there is close proximity of production nodes to consumption
nodes.
* Fresh & Easy - In 2007 the Company signed a 5-year pool-management
contact with Fresh & Easy: the Tesco retail chain in the US. The Company was
chosen to be the pool-management provider to Fresh & Easy in Southern
California, Nevada and Arizona. Fresh & Easy opened, its first store on
schedule, in October 2007. The Company established a wash site adjacent to
the Fresh & Easy depot in Riverside, CA to support the service.
The Company notes the press reports of recent weeks relating to the progress
of Fresh & Easy in the US. There may, as a result, be a slow down in the
implementation of this contract. The Company is in regular contact with
Fresh & Easy and will continue to evaluate the impact this may have on its
business.
* Wild Rocket - the Company was approached during the year by Wild Rocket,
Fresh & Easy's main provider of fruit & vegetables, to manage its supply
chain between its growers and its processing plant. The Company signed a
5-year contract which was launched at the same time as the launch of the
Fresh & Easy contract and is progressing according to plan.
In both the Fresh & Easy and Wild Rocket projects, the Company is assimilating
for the first time a 'Tagging and Tracing' system for the management of the pool
equipment throughout the supply chain. This will enhance the Company's control
over the pool equipment.
* HEB - HEB is the largest retailer in Texas, with over 300 stores in Texas
and Mexico. The Company introduced in November 2007 via HEB the first
large fruit & vegetable bin (1/2-bin) in the US market. The Company also
signed a 5-year pool-management contract with HEB for the 1/2-bin, with
the intention to supply potatoes, onions, melons and citrus to all HEB
stores and this contract is progressing.
The simultaneous launch of these 3 new businesses in the USA required the
Company to develop products, logistics and human resources infrastructure as it
did in Italy, under very tight time constraints.
The Company also faced continued delays in the supply to Wal*Mart of Polymer's
meat-crate product which, as highlighted in September 2007, has led to the
Company incurring expenses not yet recovered. The Company continues to seek a
resolution to this matter and shareholders will be updated when a final position
has been reached.
3. Production Plant - as a result of the growing product portfolio and the
increased focus on quality assurance, the Company had to consolidate its
production in to one facility, instead of dividing it between several
subcontractors. In June 2007, the Company purchased a high quality plastic
production facility in Israel. Within less than a month the plant was fully
staffed and had commenced operations.
As of today, the Company has finalised the implementation of an ERP (Enterprise
Resource Planning software) system in the plant and has been awarded an ISO-9001
certification.
On Going Business:
o UK - the UK market remains the most receptive market to product
innovation as UK retailers are leaders in the use of logistics solutions such as
RRP. The Company continues its cooperation with leading UK retailers in product
development projects and is proud of its proven ability to successfully address
the challenges presented to it:
* The Company finalized the development process of 2 new innovative
solutions, which have been trialed and are expected to launch in the 1st half of
2008. These products will allow the Company to penetrate more new retail
categories.
* During the last quarter of 2007, the Company launched its new
foldable crate - FoldiNest (small 20kg foldable crate, which complements the
Company's existing non-foldable crates), winning a substantial purchase order
from a leading UK retailer.
In addition, the Company deepened its penetration in 2007 in the existing pool
management operation to cover more retail categories with existing customers.
Furthermore, the Company became a significant player in the sales market.
Whilst having grown its UK business in 2007 by 45%, the Company has identified
more potential for growth in the UK market, both with existing and new
customers.
o Germany - the Company continues its penetration efforts targeted toward
additional retailers with its Big-MaxiCrate bin. The Company also introduced in
2007 a new patent-pending foldable crate, designed for a local German pool
provider for the large discount market. This project is being rolled out during
the first half of 2008.
o Spain - the Company continued its operation in the Spanish market as in
2006 under its current agreement with a Spanish retailer.
o Long-term direct sales contracts -
* Norway Post - the Company continued to supply Norway Post under its
3-year contract signed in 2006: an example of the adaptability of our products
to markets outside of our traditional retail core.
* In addition, the company signed a 5-year sales agreement with a
leading retailer in Israel to supply its RRP needs.
* The Company's 8-year contract for supply of bins signed in the 2nd
quarter of 2006 with a major US dry-fruit producer was expected to be launched
in Sep-Oct 2007. The Company has finalized the product development and commenced
production of moulds. However, one of the mould providers for this project, with
which the Company has previously worked on several projects, became insolvent.
As reported in our Trading Update of 19 February 2008, this caused a three month
delay in the completion of the moulds phase and resulted in a hit of Euro0.75m to
the Profit and Loss account. The Company is currently introducing the first
moulded bins to the market.
CAPEX Investments
In 2007, the Company invested in the expansion of its pool equipment fleet
mainly for the Italian market and started building its product fleet for the US
market. Total investment in pool-equipment was Euro15.4m (�11.8m) (2006: Euro11.8m
(�8.0m)).
The Company invested Euro2.8m (�2.1m) in moulds for new products to support its
expansion into new markets and product categories.
A major component to support the business expansion into Italy and the US, as
detailed before, was the establishment of 3 wash-sites, two in Italy (Milan &
Rome) and one in California, at a total cost of Euro3.7m (�2.8m).
In addition to the purchase of the production plant at a cost of Euro3.2m (�2.5m),
the two fully robotized mould machines which were ordered at the end of 2006
were installed in the first quarter of 2007 at a cost of Euro1.2m (�0.9m). The
Company used a long-term bank facility to finance the Euro3.2m million purchase of
the production plant in Israel.
Challenges in 2007
The Company's management, immediately after the IPO in December 2006, was
required to focus its management effort on the launch of the Italian project
(March 2007). Thereafter and in parallel, management worked intensively on the
launch of the 3 newly signed projects in the US and the assimilation of the new
production plant.
As a result, we recognised that the Company's management did not have sufficient
resource and we subsequently worked towards strengthening the management team.
The Board therefore resolved to create the position of Group Chief Operating
Officer and has appointed the current head of the Company's Italian Operations
Manager, Mr. Gian Paolo Mezzanotte, to this position. Prior to his involvement
in Polymer Logistics, Mr Mezzanotte previously acted as Sourcing Manager for
Chep-Europe. In addition, in the last quarter of 2007, the Company added 3 more
senior managers to its team: Human Resource, Information Systems, and IR &
Business Development.
At the same time the Company established 3 new operating teams, investing time
on recruiting, training and assimilating new personnel into the Company culture:
* Italy - 17 people
* USA - 12 people
* Production Plant - 15 people
The Board believes it now has the requisite infrastructure to support the
successful implementation of its business plans for 2008.
Aborted Acquisition
The Company spent a considerable amount of time during 2007 and the early part
of 2008 in negotiations to acquire a business that the Directors believe would
have facilitated the implementation of its expansion plans in the US. By
February this year, the Company had reached the point where it had completed the
due diligence process and agreed terms in principle with the vendor. However,
following the trading update made by the Company on 19 February 2008, the Board,
having consulted with its advisers, decided that it was not the appropriate time
for the company to make a material acquisition and that it was more prudent to
focus management attention on ensuring that the Company's organic growth plans
are executed successfully. The decision not to proceed with the acquisition has
resulted in the Company incurring approximately Euro470K of abortive acquisition
costs which will be taken into the Profit & Loss account as an exceptional
charge in the respect of the 2007 financial year.
Year 2008 - Consolidation and Controlled Growth
The Company's principal aims for 2008 are clear. We will continue to focus on
organic growth and meeting our business plan targets, managing the growth of our
new Italy and US contracts, and selectively pursuing new contract opportunities.
Our strengthened management team will provide us with a platform from which to
successfully execute this growth strategy.
As a management team we will ensure that we have the resources in place to
support the projected growth in 2008 and to identify and manage potential risks.
We will continue to assimilate controls and balances, both via the ERP system
and via close monitoring of our main KPIs.
The Company remains focused on its customers' needs and continues to pursue its
objective of becoming a leading RRP solution provider to retailers and their
suppliers, challenging new categories and solving existing problems with
innovative solutions.
The Board is fully supportive of the Company's efforts to strengthen its
management resources and is confident in the ability of the Polymer Logistics'
team to deliver in the year ahead. We continue to see opportunities for growth
in our market and this, coupled with the current strong order book, gives us
confidence that we will achieve strong sales growth in 2008.
Gideon Feiner
Chief Executive Officer
April 7th, 2008
FINANCIAL REVIEW
Introduction
The 2007 financial reports are prepared under International Financial Reporting
Standards ("IFRS").
Financial Key Performance Results
2007 2006 Difference
Euro'000 Euro'000 %
Revenues 36,853 22,512 64%
Gross Profit 15,004 10,489 43%
40.7% 46.6%
EBIT (excluding extraordinary costs) 4,037 4,632 -13%
EBIT (excluding extraordinary costs) - % 10.9% 20.5%
Net Profit (excluding extraordinary costs) 4,002 3,554 13%
Net Profit (excluding extraordinary costs) - % 10.9% 15.8%
Net Profit 3,536 3,554 -0.5%
Net Profit - % 9.6% 15.8%
Basic earnings per share 0.05 0.07 -29%
Fully diluted earnings per share 0.04 0.06 -33%
Cash generated from operating activities 854 3,364
The Company suffered in 2007 from a decline in gross profit margins, mainly due
to a sharp increase in raw-material prices in the second half of 2007, which
accounted for circa 50% of the production costs. The raw-material price increase
mainly impacted direct sales margins, while the pool (rental) operation suffered
minimal effects. As the Company's direct sales operation traditionally ramps up
towards Christmas, the Company suffered from a sharp decline in this segment's
profitability, representing approximately Euro1.0m.
The declining GBP:Euro exchange rate in the second half of 2007 also had a
significant negative impact of Euro700K on the P&L statement.
Additional one-off events which affected the Company gross profit and EBIT
margins were:
1. A contract dispute with a retailer in Italy that did not meet its contract
commitment for pool equipment utilisation;
2. A mould maker going into receivership - causing the Company to miss its 2007
sales contract target (8-year sales contract with a US customers) and a delay of
profit of Euro0.75m into 2008;
3. A 1-week nationwide truck drivers strike in Italy prior to Christmas. The
whole business sector in Italy suffered from this strike, including the Company
which was prevented from supplying its RRP crates in the busiest week of
December. The Company lost Euro0.25m of profit that week.
The reduction in free cash-flow resulted from moving the production from 3rd
party subcontractors with advantageous credit terms to in-house production with
a resultant increase in employee costs coupled with a significant increase in
plastic raw material prices throughout the year.
The Company invested the proceeds of the 2006 IPO in CAPEX in order to support
the growth of the business both in pool equipment, wash sites and production
equipment (moulds and machinery). In addition, the Company raised net new debt
finance of Euro4.6m mainly for the purchase of the new production plant and
machines.
Significant Accounting Policies
The Company is reporting its results in accordance with the International
Financial Reporting Standards (IFRS) that are effective at 31 December 2007.
The consolidated financial statements are presented in Euros, the functional
currency of the Company and one of its subsidiaries in Israel. The functional
currency of the subsidiary in the UK is the British Pound; the functional
currency of the subsidiary in the US is the US Dollar; and the functional
currency of the remaining subsidiary in Israel is the New Israeli Shekel.
Cash flow
Cash and cash equivalents were reduced by Euro19.0m to Euro0.8m at 31 December 2007
(31 December 2006: Euro19.8m), mainly due to the utilisation of the IPO proceeds
for the establishment of the pool fleet and operation in Italy, as planned by
the Company.
In the year to 31 December 2007, the Company generated Euro0.9m from operating
activities (2006: Euro3.4m).
In 2007, the Company executed on its investment policy, investing Euro15.4m in
continuing to build its equipment pool, mainly for the Italian market (2006:
Euro7.5m).
The Company invested in 2007 a total of Euro2.8m (2006: Euro3.2m) in new moulds mainly
for the Italian and the US markets. The Company also increased its production
capabilities by purchasing a production plant from receivership for Euro3.2m and
purchasing two robotised mould machines at a total cost of Euro1.2m. The plant was
financed by a bank long-term desk facility and the machines were financed by an
85% supplier's loan for a period of five years.
In addition to previous years' investment, in 2007 the Company invested in the
establishment of 3 wash-sites, two in Italy (Milan & Rome) and one in
California, at a total cost of Euro3.7m (�2.8m).
The Company has agreed with its major banks on long-term facilities of Euro35m, of
which Euro17m was utilized as at 31 December 2007. The Company is comfortably
meeting all of its banks' covenants.
Taxation
The Company's subsidiary Polymer Logistics (Israel) Ltd ("PL Israel") enjoys an
"industrial company" status as defined by the Israeli Law of Encouragement of
Industry. PL Israel, under the Law of Capital Investment, is entitled to
certain reduced tax programs. The resulting benefits contribute to the
Company's low average corporation tax rate of 1% in 2007 (2006: 6.7%). The
Company expects the Group's ongoing corporation tax rate to be in the region of
10% for the foreseeable future.
Exchange rates
The Company reports its financial statements in Euros. However, the Group's
operations are based in the United Kingdom, Israel and the United States as well
as countries in the zone in which the Euro is the lawful currency. Transactions
in foreign currencies are recorded at the exchange rate prevailing at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the exchange rate prevailing at the balance sheet
date. All translation differences are recorded in the consolidated income
statement.
The assets and liabilities of the subsidiaries in the UK and in the United
States are translated into Euros at the exchange rate prevailing at the balance
sheet date. Revenues and expenses in the consolidated income statement are
translated at average exchange rates for the period. The exchange differences
arising on translation are recorded as a separate component of equity.
In the 2nd half of 2007, the sharp decline of the British Pound versus the Euro
resulted in an exchange difference expense in the Euro translated reports of the
UK subsidiary of circa Euro700k. However, the Company benefited from the decline in
value of long term sterling denominated loans versus the Euro of circa Euro500k,
which contributed directly to the Company's Equity
Earnings per share
Basic and fully diluted earnings per share for the year to 31 December 2007 were
Euro0.05 and Euro0.04 respectively (2006: Euro0.07 and Euro0.06 respectively). Although Net
Profit in 2007 was equal to Net Profit in 2006, the decline in earnings per
share is a result of the lower weighted average number of shares in 2006 (as the
Company's IPO took place in December 2006).
Subsequent events
There are no significant post balance sheet events.
Dividend
The Board declares a gross final dividend of 0.17c (0.135p) per Ordinary Share
which will be paid on 9 May 2008 to those shareholders on the register at the
close of business on 18 April 2008. Together with the interim dividend of 0.4c
this equates to a full-year gross dividend payout of 0.57c, covered nine times
by pre-exceptional earnings. The Board expects the dividend to grow
progressively from this level. Dividends paid to holders of Depositary
Interests will be paid in Sterling. The notional exchange rate for this payment
is Euro1.26: 1GBP. (Note that there is no currency election).
Dana Gerner
Director of Finance
April 7th, 2008
Consolidated Statements of Income
Euros in thousands, except share and per share data
Year ended December 31,
Note 2007 2007 2006 2006
Revenues:
Rental income 25,331 11,927
Sale of goods 11,522 10,585
36,853 22,512
Cost of revenues:
Cost of rentals 21a 12,504 6,057
Cost of goods sold 21b 8,588 5,608
Depreciation of moulds and machines 8 757 358
21,849 12,023
Gross profit 15,004 10,489
Selling and marketing expenses 21c 3,423 *) 1,165
General and administrative expenses 21d 7,544 *)4,692
Exceptional general and administrative
expenses 22 466 -
8,010 4,692
Finance income 21e (945) (280)
Finance costs 21f 993 1,053
Other (income) expenses, net 21g (19) 43
Profit before taxes 3,542 3,816
Income tax expenses 11 6 262
Net profit 3,536 3,554
Basic earnings per share (in Euros) 0.05 0.07
Diluted earnings per share (in Euros) 0.04 0.06
Weighted average number of shares used
for computing basic earnings per share 24 77,482,468 53,230,558
Weighted average number of shares used
for computing diluted earnings per share 24 79,633,384 56,452,942
*) Reclassified sales people salary expenses at the amount of Euro578 from general
and administrative expenses to selling and marketing expenses
Consolidated Balance Sheet
Euros in thousands
December 31,
Note 2007 2006
ASSETS
Current assets:
Cash and cash equivalents 3 807 19,805
Trade receivables 4 13,874 5,747
Other accounts receivable and prepayments 5 4,656 3,316
Income tax receivables 26 -
Inventories 6 3,073 1,312
22,436 30,180
Non-current assets:
Plant and equipment 7 16,100 6,621
Assets held for lease 8 35,047 23,126
Long term prepaid expenses of operational lease 9 346 -
Finance lease receivable 10 4,263 5,989
Deposits 264 149
Deferred tax asset 11 1,518 987
Other accounts receivable - 46
57,538 36,918
Total assets 79,974 67,098
EQUITY AND LIABILITIES
Current liabilities:
Bank borrowings and current maturities of long-term loans 12 13,891 8,660
Trade payables 13 13,074 7,549
Other accounts payable 14 1,855 5,416
Deposits from customers 16 50 104
Income taxes payable 552 303
29,422 22,032
Non-current liabilities:
Long-term loans 15 5,517 4,111
Deposits from customers 16 2,663 2,525
Deferred taxes 11 167 80
8,347 6,716
Total liabilities 37,769 28,748
Equity: 18
Issued capital 776 775
Share premium 34,785 34,365
Foreign currency translation reserve (32) (55)
Retained earnings 6,676 3,265
Total equity 42,205 38,350
Total equity and liabilities 79,974 67,098
Consolidated Statements of Changes in Equity
Euros in thousands
Foreign Retained
Additional currency earnings Total
Issued paid-in translation (accumulated Recognized
capital capital reserve deficit) Total Income
At January 1, 2006 514 11,491 (98) (289) 11,618
Issuance of Ordinary shares
on admission, net *) 207 22,615 - - 22,822
Issuance of Ordinary shares
upon exercise of options 54 240 - - 294
Share-based payment - 19 - - 19
Foreign currency translation
adjustment - - 43 - 43 43
Net profit - - - 3,554 3,554 3,554
At December 31, 2006 775 34,365 (55) 3,265 38,350 3,597
Issuance of Ordinary shares
on admission, net (58) (58)
Issuance of Ordinary shares
upon exercise of options 1 17 18
Share-based payment 461 461
Dividend payout (125) (125)
Foreign currency translation
adjustment 23 23 23
Net profit 3,536 3,536 3,536
At December 31, 2007 776 34,785 (32) 6,676 42,205 3,559
*) Net of issuance expenses of Euro3,229 and include tax effect of Euro 807
Consolidated Statements of Cash Flow
Euros in thousands
Year ended December 31,
2007 2006
Cash flows from operating activities:
Net profit 3,536 3,554
Adjustments necessary to reflect cash flows provided by (used in)
operating activities (a) (2,682) (190)
Net cash provided in operating activities 854 3,364
Cash flows from investing activities:
Purchase of assets held for lease (15,414) (7,480)
Purchase of plant and equipment (8,732) *) (3,163)
Purchase of long term assets (350) *) (66)
Proceeds from sale of assets held for lease 17 26
Proceeds from sale of plant and equipment 6 -
Long-term deposits (115) (114)
Net cash used in investing activities (24,588) (10,797)
Cash flows from financing activities:
Proceeds from issuance of shares, net (40) 22,309
Proceeds from long-term loans from banks 5,001 3,826
Repayment of long-term loans from banks and others (4,217) (6,105)
Short-term bank credit, net 3,875 3,104
Dividend payout (125) -
Receipt of deposits from customers, net 84 632
Repayment of long-term loans from related parties - (51)
Net cash provided by financing activities 4,578 23,715
Net increase (decrease) in cash and cash equivalents (19,156) 16,282
Net foreign exchange difference 158 9
Cash and cash equivalents at the beginning of the year 19,805 3,514
Cash and cash equivalents at the end of the year 807 19,805
*) Reclassified of Euro 66 from Purchase of plant and equipment to Purchase of long
term assets
Notes for the Consolidated Statements of Cash Flow
Euros in thousands
Year ended December 31,
2007 2006
(a) Adjustments necessary to reflect cash flows provided by (used in)
operating activities:
Income and expenses not involving operating cash flows:
Depreciation and amortization 4,839 3,549
Deferred taxes, net (444) 55
Exchange differences on long-term liabilities, net (436) (161)
Loss on disposal of plant and equipment and assets held for lease 2 48
Share-based payment 461 19
4,422 3,510
Changes in operating assets and liabilities:
Increase in trade and finance lease receivables (6,401) (5,538)
Increase in other accounts receivables and prepayments
(including long-term) (1,320) (2,375)
Decrease (increase) in inventories (1,596) 1,158
Increase in trade and other payables 2,213 3,055
(7,104) (3,700)
(2,682) (190)
(b) Non-cash activities:
Long-term loan in respect of purchase of equipment 2,415 -
Reassignment of assets held for lease into inventory 514 898
Short-term payables in respect of purchase of assets held for lease - 3,889
Depreciation of moulds and machines capitalized to assets
held for lease 712 431
(c) Supplemental disclosure of cash flows:
Interest paid 991 966
Interest received 567 280
Income taxes paid 142 25
Income taxes received 14 -
Notes to Consolidated Financial Statement
1. Financial Statements and Basis of Preparation
The financial information set out in this announcement does not constitute the
Company's statutory Financial Statements for the period ended 31st December,
2007.
The financial information is derived from the audited financial statements.
While the financial information included in this results announcement has been
prepared in accordance with the IFRS, this announcement does not itself content
sufficient information to comply with IFRS.
Copies of the Annual Report and Financial Statements for the year ended 31st
December 2007 will be available in due course from the Company Secretary,
Polymer Logistics NV, Vierbundersweg 15, Dongen 5107 NL, the Netherlands.
2. Summary of Significant Accounting Policies
a. Basis of Preparation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by the European
Union and International Financial Reporting Standards as issued by the IASB that
are effective at December 31. The consolidated financial statements have been
prepared on a historical cost basis.
b. Changes in accounting policy and disclosures
The accounting policies adopted are consistent with those of the previous year
except as follow:
The Group has adopted the following new and amended IFRS and IFRIC
interpretation during the year. Adoption of those revised standards and
interpretations did not have any effect on the financial performance or poison
of the Group. They did however give rise to additional disclosures, including in
some cases, revisions to accounting policies.
* IFRS 7 Financial instruments: Disclosures
* IAS 1 Amendment - Presentation of financial statements
* IFRIC 8 Scope of IFRS 2
* IFRIC 9 Reassessment of embedded derivates
* IFRIC 10 Interim Financial Reporting and Impairment
The Company has not early adopted IFRS and IFRIC Interpretations that have been
issued but are not effective as of December 31, 2007. Management expects that
adoption of those pronouncements will not have a material impact on the
financial position and results of operations of the Company in the period of
initial application.
The principal effects of these changes are as follows:
IFRS 7 Financial Instruments: Disclosures
This standard requires disclosures that enable users of the financial statements
to evaluate the significance of the Group's financial instrument and the nature
and extent of risks arising from those financial instruments. The new
disclosures are included throughout the financial statements. While there has
been no effect on the financial position or results, comparative information has
been revised where needed.
IAS 1 Presentation of Financial Statements
This amendment requires the Group to make new disclosures to enable users of the
financial statements to evaluate the Group's objectives. Policies and processes
for managing capital. These new disclosures are shown in Note 20.
IFRIC 8 Scope of IFRS 2
This interpretation requires IFRS 2 to be applied to any arrangements in which
the entity cannot identify specifically some or all of the goods received, in
particular where equity instruments are issued for consideration which appears
to be less than fair value. As equity instruments are only issued to employees
in accordance with the employee share scheme, the interpretation had no impact
on the financial position of performance of the Group.
IFRIC 10 Interim Financial Reporting and Impairment
The Group adopted Interpretation 10 as of 1 January 2007, which requires that an
entity must not reverse an impairment loss recognized in a previous interim
period in respect of good will or an investment in either an equity instrument
or a financial asset carried at cost. As he Group had no impairment losses
previously reversed, the interpretation had no impact on the financial position
or performance of the Group.
3. Taxes on Income
a. Taxes on income included in the statements of income:
Year ended December 31,
2007 2006
Current taxes 487 221
Deferred taxes (444) 55
Current taxes in respect of previous years (37) (14)
6 262
b. Deferred taxes:
Plant Employee Allowance
and benefit for doubtful Carryforward IPO
equipment liabilities accounts tax losses expenses Total
Balance at January 1,
2006 (93) 21 227 - 155
Amount recorded in
equity - - - 807 807
Amounts recorded in
statement of income 13 (10) (58) - (55)
Balance at December
31, 2006 (80) 11 - 169 807 907
Amounts recorded in
statement of income (90) 5 (13) 542 - 444
Balance at December
31, 2007 (170) 16 (13) 711 807 1,351
Presented in the balance sheet, as follows:
December 31,
2007 2006
Non-current assets 1,518 987
Long-term liabilities (167) (80)
1,351 907
An amount of fiscal losses of Euro466 has not been valued.
c. A reconciliation of theoretical tax expense assuming all income is
taxed at the statutory rate applicable to the income of companies in the
Netherlands, and the actual tax expense is as follows:
Year ended December 31,
2007 2006
Profit before taxes, as reported in the consolidated
statements of income 3,542 3,816
Statutory tax rate in the Netherlands 25.5% 29.5%
Theoretical tax expense 903 1,126
Increase (decrease) in taxes resulting from:
Non-deductible expenses 91 157
Tax losses not valued 119 -
Adjustments in respect of currency difference
for statutory tax purposes (1) (101) (87)
Difference in statutory tax rates in various jurisdiction
and other differences, net (941) (920)
Taxes in respect of previous years (65) (14)
6 262
(1) Polymer Logistics (Israel) calculates its taxable income in NIS.
4. Shareholders' Equity
a. The share capital is composed as follows:
Year ended December 31,
2007 2006
Number of shares
Share capital is comprised of Ordinary shares of Euro 0.01 par value
each
Authorized - Ordinary shares 117,000,000 117,000,000
Issued and fully paid - Ordinary shares 77,602,083 77,462,083
b. By a notary deed of conversion and amendment of the articles of
association of the Company dated November 8, 2006, the Company was converted
into a public limited liability company and the articles of association of the
Company were amended such that (i) the par value of the Ordinary shares in the
capital of the Company was changed to Euro 0.01, such that each Ordinary share with
a par value of Euro 0.45 was converted into 45 Ordinary shares of Euro 0.01 each; and
(ii) each Preferred A share with a par value of Euro 0.45 was converted into 45
Ordinary shares of Euro 0.01 each.
All share and per share amounts have been retroactively restated to
reflect this conversion of share capital.
c. In November 2006, the Company issued to the former Preferred A
shareholders an aggregate amount of 3,676,410 Ordinary shares for no
consideration.
d. In November 2006, the Company issued an additional aggregate amount of
1,584,090 Ordinary shares, of which 81,000 Ordinary shares were issued pursuant
to an option agreement dated December 31, 2003 at a price of Euro 0.617 per share,
and 1,503,090 Ordinary shares were issued pursuant to options under the
Company's employee stock option plan granted on December 30, 2004 of which
180,090 Ordinary shares were issued at a price of Euro 0.222 per share and
1,323,000 Ordinary shares were issued at a price of US$ 0.193 per share.
e. On December 13, 2006, upon admission of the Company Ordinary shares on
the AIM, the Company issued 20,731,708 Ordinary shares in consideration for Euro
25,183 before expenses of Euro 3,229 (net consideration of Euro 21,954).
f. On November 14, 2007 140,000 Ordinary shares were issued pursuant to
options under the Company's employee stock option plan granted on December 30,
2004 at a price of $ 0.193.
5. Earnings Per Share
The following reflects the income and share data used in the basic and diluted
earnings per share computations:
Year ended December 31,
2007 2006
Net profit for basic and diluted earnings per share 3,536 3,554
Weighted average number of Ordinary and Preferred
shares for basic earnings per share 77,482,468 53,230,558
Effect of dilution:
Share options 2,150,916 3,222,384
Adjusted weighted average number of Ordinary shares for
diluted earnings per share 79,633,384 56,452,942
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSFFULSASEEL
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