TIDMRM2
RNS Number : 0099L
RM2 International SA
28 September 2016
28 September 2016
RM2 International S.A.
Interim Results
RM2 International S.A. ("RM2" or the "Company"), the sustainable
composite pallet innovator, announces its unaudited results for the
six months to 30 June 2016.
Financial Highlights
-- Revenues for the first six months of 2016 of
US$3.7 million (H1 2015: US$1.8 million)
-- Loss after tax for the period of US$24 million
(H1 2015: US$25.0 million)
-- Debt free with cash balances of US$4.3 million
at 30 June 2016 (H1 2015: US$35.9 million) and
US$20.4 million at 31 August 2016
-- After the reporting period end, issuance of
US$20 million of convertible preferred shares
with a cumulative preferred 9% annual dividend
on July 18(th) , 2016
Operational Highlights
-- Recurring revenues being generated from customers
across a range of key industries
-- Long-term, scalable contracts signed with some
of the largest and most recognisable companies
in their sectors
-- Management team strengthened with the appointment
of Kevin Mazula as COO
-- Commencement of pallet deployment with Canada's
largest retailer, Loblaw's
-- Strategic, cost-saving manufacturing agreement
with Zhenshi Group for pallet production in
China
-- After the reporting period end, second contract
manufacturing agreement for pallet production
in Mexico with Jabil Circuits Inc.
John Walsh, Chief Executive Officer of RM2, commented:
"The first half of 2016 has been a period of significant
strategic progress for RM2. In March, Canada's largest retailer,
Loblaw's, began accepting RM2's pallets in its supply chain. This
was quickly followed by an agreement with Zhenshi for the
production of our pallets in China at a significantly reduced cost.
After the period end, we struck a further agreement with Jabil for
the mass production of our pallets in Mexico. When fully
operational, this will mean that RM2 will have a well-balanced
manufacturing capability in both North America and Asia, allowing
us to flex production more efficiently between two highly qualified
and professional manufacturers to better meet the demands of our
customers.
"Demand for our innovative and environmentally friendly BLOCKPal
pallet remains strong and we are in advanced discussions with a
number of new customers. We expect to make a number of further
announcements in the coming months."
For further information, please contact:
+44 (0)20 8820
RM2 International S.A. 1412
John Walsh, Chief Executive
Officer
Jean-Francois Blouvac, Chief
Financial Officer
+44 (0)20 7397
RBC Capital Markets 8900
Tristan Lovegrove
Jonathan Hardy
Ema Jakasovic
+44 (0)20 7638
Citigate Dewe Rogerson 9571
Simon Rigby
Rob Newman
Ellen Wilton
Notes to Editors
RM2 International S.A. specialises in pallet development,
manufacture, supply and management to establish a leading presence
in global pallet supply and improve the supply chain of
manufacturing and distribution businesses through the effective and
efficient use and management of composite pallets. It is quoted on
the AIM market of the London Stock Exchange under the symbol
RM2.L.
For further information, please visit www.rm2.com
Consolidated Statement of Comprehensive Income
Six months Six months Year to
to to 31 December
30 June 30 June 2015
2016 2015 Audited
Unaudited Unaudited
Notes (Restated)
USD USD USD
Continuing operations
Revenue 5 3,707,836 1,771,391 8,000,137
Cost of sales 6 (16,845,329) (17,187,856) (44,512,394)
------------- ------------- -------------
Gross profit (13,137,494) (15,416,465) (36,512,257)
Administrative expenses 7 (10,625,475) (10,287,482) (21,380,565)
Other operating expenses 8 (36,132) (64,014) (175,768)
Other operating income 8 142,151 740,357 904,676
------------- ------------- -------------
Operating loss (23,656,950) (25,027,604) (57,163,914)
Impairment of financial
asset
Finance costs (2,179,083) (867,840) (3,632,886)
Finance income 1,936,151 659,861 1,955,972
------------- ------------- -------------
Loss before tax (23,899,882) (25,235,583) (58,840,828)
Income tax 87,907 (172,828) 160,230
------------- ------------- -------------
Loss for the period (23,811,975) (25,408,411) (58,680,598)
============= ============= =============
Other comprehensive income
Other comprehensive income
to be reclassified in
profit or loss in subsequent
periods:
------------- ------------- -------------
Exchange difference on
translation of foreign
operations (201,940) (1,527,059) (4,264,343)
------------- ------------- -------------
Other comprehensive income
for the year, net of
tax (201,940) (1,527,059) (4,264,343)
Total comprehensive income
for the year (24,013,915) (26,935,470) (62,944,941)
============= ============= =============
Loss for the year attributable
to:
Equity holders of the
parent (23,811,975) (25,408,411) (58,680,598)
Total comprehensive income
for the year attributable
to:
Equity holders of the
parent (24,013,915) (26,935,470) (62,944,941)
Losses per share
Basic losses per share
attributable to ordinary
equity holders of the
parent 17 (0.06) (0.08) (0.17)
Diluted losses per share
attributable to ordinary
equity holders of the
parent 17 (0.06) (0.08) (0.17)
============= ============= =============
Consolidated Statement of Financial Position
30 June 30 June 31 December
2016 2015 2015
Notes Unaudited Unaudited Audited
USD USD USD
Assets
Non-current assets
Property, plant & equipment
- others 9 41,803,207 35,710,996 36,252,950
Property, plant & equipment
- pallet pool 10 16,997,686 10,844,907 17,484,281
Investment property 1,338,940 1,371,280 1,357,720
Intangible assets 11 2,646,054 3,006,148 3,349,359
62,785,888 50,933,332 58,444,310
Current assets
Inventories 12 21,863,720 15,985,591 19,846,627
Trade and other receivables 5,012,559 5,179,826 8,315,843
Other current financial
assets 67,624 74,310 62,074
Prepayments 664,068 808,044 1,942,980
Restricted cash 1,951,144 2,027,062 1,816,039
Cash and cash equivalents 4,282,928 35,860,977 34,515,597
-------------- -------------- --------------
33,842,043 59,935,811 66,499,160
Total assets 96,627,931 110,869,142 124,943,470
============== ============== ==============
Equity and liabilities
Equity
Issued capital 16 3,980,302 3,230,302 3,980,302
Share premium 16 263,317,090 219,357,851 263,317,090
Retained earnings (200,106,113) (143,021,951) (176,294,138)
Share based payment
reserve 19,585,089 18,339,362 19,044,095
Foreign currency translation
reserve (330,207) (128,322) (2,865,606)
Treasury Stock (3,424) (3,424) (3,424)
--------------
Equity attributable
to equity holders of
the parent 86,442,737 97,773,818 107,178,319
Non-current liabilities
Interest bearing loans
and borrowings 15 1,848,920 2,030,092 1,844,875
Deferred tax liabilities 46,949 251,493 184,330
--------------
1,895,869 2,281,585 2,029,205
Current liabilities
Interest bearing loans
and borrowings 15 58,034 18,680 116,440
Trade and other payables 14 7,037,065 9,789,422 14,466,289
Deferred income 661,673 634,004 630,841
Current tax liabilities 532,554 371,453 522,376
8,289,325 10,813,739 15,735,946
Total liabilities 10,185,194 13,095,324 17,765,151
Total equity and liabilities 96,627,931 110,869,142 124,943,470
============== ============== ==============
Consolidated statement of changes in equity
Attributable to equity holders of the parent
Foreign Share
currency Treasury based
Share Share Retained translation Shares payment Total
capital premium earnings reserve reserve equity
USD USD USD USD USD USD USD
As at 31
December
2014 (audited) 3,227,772 219,357,851 (117,613,540) 1,398,737 - 16,958,803 123,329,623
Loss for the
period - - (25,408,411) - - - (25,408,411)
Other
comprehensive
income - - - (1,527,059) - - (1,527,059)
---------------- ---------- ------------ -------------- ------------- ----------- ----------- -------------
Total
comprehensive
income - - (25,408,411) (1,527,059) - - (26,935,470)
Shares issued
in
the period 2,530 - - - - - 2,530
Purchase of
shares
into treasury - - - - (3,424) - (3,424)
Share based
payments - - - - - 1,380,559 1,380,559
Transaction
with
owners 2,530 - - - (3,424) 1,380,559 1,379,665
As at 30 June
2015
(unaudited) 3,230,302 219,357,851 (143,021,951) (128,322) (3,424) 18,339,362 97,773,818
================ ========== ============ ============== ============= =========== =========== =============
Loss for the
period - - (33,272,187) - - - (33,272,187)
Other
comprehensive
income - - - (2,737,284) - - (2,737,284)
---------------- ---------- ------------ -------------- ------------- ----------- ----------- -------------
Total
comprehensive
income - - (33,272,187) (2,737,284) - - (36,009,471)
Shares issued
in
the period 750,000 44,672,999 - - - - 45,422,999
Cost of share
issue - (713,760) - - - - (713.760)
Share based
payments - - - - - 704,733 704,733
Transaction
with
owners 750,000 43,959,239 - - - 704,733 45,413,972
As at 31
December
2015 (audited) 3,980,302 263,317,090 (176,294,138) (2,865,606) (3,424) 19,044,095 107,178,319
================ ========== ============ ============== ============= =========== =========== =============
Loss for the
period - - (23,811,975) - - - (23,811,975)
Other
comprehensive
income - - - 2,535,399 - - 2,535,399)
---------------- ---------- ------------ -------------- ------------- ----------- ----------- -------------
Total
comprehensive
income - - (23,811,411) 2,535,399 - - (21,276,576)
Share based
payments - - - - - 540,994 540,994
Transaction
with
owners - - - - - 540,994 540,994
As at 30 June
2016
(audited) 3,980,302 263,317,090 (200,106,113) (330,207) (3,424) 19,585,089 86,442,736
================ ========== ============ ============== ============= =========== =========== =============
Consolidated Statement of Cash Flows
Six months Six months Year
to to ended
30 June 30 June 31 December
2016 2015 2015
Notes Unaudited Unaudited Audited
Cash flows from operating USD
activities USD USD
Loss before tax (23,899,882) (25,235,583) (58,840,828)
Adjustment to reconcile
profit before tax to net
cash flows
Amortisation and depreciation
of non-current assets 4,440,260 2,567,701 6,835,642
Provision for bad debts 44,902 90,750 -
Share based payment charges 540,994 1,380,559 2,085,292
Transaction costs on capital - - -
operations, including
IPO
Finance income (68,726) (67,166) (68,726)
Finance expenses 60,240 25,608 60,240
Unrealised foreign exchange
gains 256,062 817,728 (355,126)
Net loss/(gain) on disposal
of PPE and intangible
assets 5,797 (421,682) (435,591)
Variation in working capital
(Increase)/decrease in
inventories (2,017,093) (8,968,403) (12,829,439)
Decrease/(increase)/in
trade and other receivables 4,544,547 642,028 (3,541,287)
Increase/(decrease) in
trade and other payables (7,398,391) 3,509,526 8,759,729
Decrease/(increase)/ in
restricted cash (135,105) - 333,936
Income tax paid (15,336) (90,450) (171,882)
Net cash flows from operating
activities (23,641,731) (25,749,384) (58,168,040)
Cash flows from investing
activities
Net purchase of from intangible
assets (18,066) - (900,035)
Purchase of PPE in course
of commissioning (1,469,914) (8,666,039) (15,578,162)
Net purchase of other
PPE (3,474,426) (2,819,557) 60,507
Purchase of pallet pool (1,668,992) (8,842,115) (17,895,718)
Loans granted to third
parties (5,552) (14,762) (2,524)
Finance income received 68,726 67,166 68,726
Net cash flows from investing
activities (6,568,224) (20,275,307) (34,247,206)
Cash flows from financing
activities
Issuance of capital 16 - 2,530 45,425,529
Purchase of treasury shares - (3,424) (3,424)
Transaction costs on capital
operations, charged against
share premium account 16 - - (713,760)
Proceeds from other and
related party borrowings 70,284 (3,223)
Repayment of other and
related party borrowings (54,361) (28,273) (117,575)
Finance costs (60,240) (25,608) (60,240)
Net cash flows from financing
activities (114,601) 15,509 44,527,307
Net change in cash and
cash equivalents (30,324,556) (46,009,182) (47,887,939)
============= ============= ==============
Increase/decrease in cash
and cash equivalents (30,324,558) (46,009,182) (47,887,939)
Cash and cash equivalents
at 1 January 34,515,597 82,882,794 82,882,794
Exchange adjustment of
cash and cash equivalents 91,887 (1,012,635) (479,258)
------------- ------------- --------------
Cash and cash equivalents
at end of period 4,282,928 35,860,977 34,515,597
============= ============= ==============
Notes (unaudited) to the Interim Consolidated Financial
Information
Corporate information
RM2 International S.A. (the "Company") is a limited company
(Société Anonyme) incorporated and domiciled in Luxembourg with the
registration number B132.740. The registered office is located at
Rue de la Chapelle 5, L1235 Luxembourg. The Company is the ultimate
parent entity of the RM2 Group (the "Group").
The Group is principally engaged in developing, leasing and
selling shipping pallets and in providing related logistical
services.
This unaudited interim consolidated financial information does
not constitute statutory accounts.
Basis of preparation
While being compliant with AIM Rule 18 minimum requirements, the
unaudited interim consolidated financial information does not
include all the information and disclosures required in the annual
financial information, and should be read in conjunction with the
Group's historical financial information for the year ended 31
December 2015.
The accounting policies and basis of preparation adopted are
consistent with those followed in the preparation of the Group's
historical financial information for the year ended 31 December
2015. None of the newly applicable IFRS standards and amendments
had an impact on the Group's interim consolidated financial
information.
Early adopted standards
The Group did not early adopt any new or amended standards and
does not plan to early adopt any of the standards issued but not
yet effective.
Significant accounting judgements, estimates and assumptions
When preparing the unaudited interim consolidated financial
information, Management undertakes a number of judgements,
estimates and assumptions about recognition and measurement of
assets, liabilities, income and expenses. The actual results may
differ from the judgements, estimates and assumptions made by
Management, and will seldom equal the estimated results.
The judgements, estimates and assumptions applied in the interim
consolidated financial information, including the key sources of
estimation uncertainty, were the same as those applied in the
Group's historical financial information for the years ended 31
December 2015.
Going Concern
The Group's financial result for the first half of 2016 was a
loss of USD 24.0m and the cash outflow was USD 30.2m, mainly
attributable to the manufacturing activity during the first three
months of the year. Cash reserves at 30 June 2016 were USD 4.3m.
Following the receipt of the proceeds from the issuance of
convertible preferred shares, the cash balance at 31 August 2016
was USD 18.4m, excluding restricted cash.
The financial performance of the Group was again heavily
impacted by manufacturing activities during the first quarter. The
re-sizing of the manufacturing operations in Canada, initiated in
early January 2016, generated a drop in the cost per unit by circa
20%, but the absolute value of production cost remained too high to
be sustainable. The factory produced significantly above the
standard cost, contributing more than USD 12.0m to the operating
loss of USD 24.0m. Following the suspension of production in
Canada, the plant's headcount continues to decrease, and at end of
August 2016 was down to 53. The plant's cash outflow consists of
payroll, rental of building and clearing the accounts payables
backlog and is now below USD 900,000 per month.
The precise timing of the commencement of manufacturing in China
is principally dependent on the lead-time required to clear customs
for the equipment sent from Canada. The pultrusion machines shipped
from Canada on July 15(th) are currently awaiting customs clearance
in Shanghai. The Group is actively working with Zhenshi on
revisions to their agreements arising from the review by the
Customs authorities and on preparing answers to other queries
raised by the Customs authorities. Once these matters are attended
to and the initial shipment is cleared, the Group will send further
Fabrication, Assembly and Coating equipment to China. The equipment
will be housed in a 20,000 square metre facility to be built out by
an affiliate of Zhenshi. The RM2 production process will utilise
10,000 square metres, leaving spare capacity for future
expansion.
The commercial pipeline remains promising and the inventory
built prior to the cessation of production is being allocated to
major customers. A significant sale of pallets, to be delivered in
Q4 2016 is under signature process with a major US-based company.
The Group continues to conduct pre-sale trials in the US of its
BLOCKpal product among international companies in retail, food
& frozen industries and FMCG sectors.
The business plan and cash flow forecast for the next 12-month
period starting from June 1, 2016 which is considered as the going
concern analysis period, have been updated by management using the
same conservative assumptions used in the last going concern
assessment. Management confirmed recurring net cash outflows of c.
USD 2.0m per month (including both commercial entities and the
plant). The expected sale of pallets in Q4 2016 is not factored
into the net monthly cash outflow of USD 2.0m and could bring
additional cash inflows up to USD1.0m per month in the course of
2017, subject to the delivery schedule required by the customer.
The one-time-costs relating to the transition to China previously
estimated at USD 8.8m now amount to USD 9.9m as the Group has
decided to upgrade some equipment before commissioning. At the end
of August, only USD 1.6m has been paid regarding these
one-time-costs.
While there are currently material uncertainties as mentioned in
the FY2015 financial statements which may cast significant doubt on
the Group's ability to continue as a going concern, it is possible
that the Group may be unable to realize its assets and discharge
its liabilities in the normal course of business. Management has,
however, identified four strategic cash-contribution-projects, any
one of which will contribute significantly to ensuring the going
concern of the Group. In addition to the significant sale of
pallets to be delivered before year-end, management has undertaken
a better monetization of the current pool of pallets and the real
estate building in Switzerland. Further, management continues to
work towards the placement of an additional USD 10.0m of
convertible preferred shares as authorized by the General Assembly.
Depending on which combination of these initiatives is realized and
their related size, the Group may recognize by year-end adequate
accounting impairment (non-cash items) on the values of these
assets. However, these four items allow the Group to confirm its
confidence in the going concern status of the Company through June
2017 and beyond. These assumptions are the Directors' best estimate
of the future development of the business. The Directors are
satisfied that the Group has adequate resources to continue in
operational existence for the foreseeable future and accordingly,
continue to adopt the going concern basis in preparing the
consolidated financial statements.
Business review and Key Performance Indicators
The business report considers the key performance indicators to
be the levels of production, the sales or leasing of pallets and
the cash reserves of the business.
Following the signature of the manufacturing agreement with the
Chinese partner Zhenshi in April 2016, the Group initiated the
decommissioning of equipment at the Canadian manufacturing site as
of 4 April, 2016, producing only marginal quantities of samples,
with determination of the future of the Canadian site remaining for
further consideration by the Board. Approximately 92,000 pallets
were produced in Canada in the first four months of 2016. The
addition of new manufacturing equipment as forecasted amounted to
USD 5.0m., bringing the net book value of industrial assets to USD
40.0m.
As the Group moves toward an outsourced production model, the
Group has carefully managed the inventory and the commercial
deployment over the first half of 2016. 20,000 pallets have been
deployed in the field, taking the total active pool size to 250,000
pallets. The pallet inventory has grown to 160,000 pallets, which
will be allocated to future contracts until outsourced production
starts in the course of 2017. The revenue generated by the lease
activity in the first half of 2016 was USD 2.7m, which almost
equals the full year 2015 rental revenue. The Group expects to
contract a significant sale of pallets in the last quarter.
The Group has announced the issuance of convertible preferred
shares with a cumulative preferred 9% dividend payable each year,
which has been supported by existing investors for USD 20.0m. Funds
were received on July 18(th) , 2016.
Cash reserves, excluding restricted cash, at 30 June 2016 were
USD 4.3m (Dec 2015 USD 34.5m).
Cash reserves, excluding restricted cash, at 31 August 2016 were
USD 18.4m.
Significant events and transactions
The Group's management believes that the Group is well
positioned despite the continuing difficult economic circumstances.
Factors contributing to the Group's manageable position are:
-- No significant decline in order intake was experienced
on larger projects. Further, the Group has several
long-term contracts with a number of its customers
-- The Group has entered deep discussions with major
banks to set up a large financing that will enable
the Group to produce and deploy a significant
number of pallets
-- The Group's major customers have not experienced
financial difficulties. Credit quality of trade
receivables as at 30 June 2016 is considered to
be good
Overall, the Group is in a manageable position thanks to a high
quality commercial pipeline, which will be deployed in a profitable
way once an adequate financing is in place. The Group's objectives
and policies for managing capital, credit risk and liquidity risk
are described in its recent annual financial statements.
Revenues and segment reporting
The Group has only one operating segment for the disclosure of
revenue. However the revenue analysis is broken down by revenue
stream as disclosed here below.
Operating segment is reported in a manner consistent with the
internal reporting used by the chief operating decision-maker. The
chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segment, has
been identified as the Board of Directors of the parent company
that makes strategic decisions.
The Group has determined the operating segments based on the
reports reviewed by the Board of Directors, which are used to make
strategic decisions.
The Board of Directors is responsible for the Group's entire
business and considers the business to have a single operating
segment that represent the production, the sale and the rent of
pallets including related logistical services. The asset allocation
decisions are based on a single, integrated investment strategy,
and the Group's performance is evaluated on an overall basis.
The internal reporting provided to the Board of Directors for
the Group's assets, liabilities and performance is prepared on a
consistent basis with the measurement and recognition principles of
IFRS.
There were no changes in the reportable segments during the
year.
The Group has a diversified customer portfolio. During the
period there was 1 client who represents more than 10% of the
Group's revenues.
Turnover
Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 Unaudited 2015 Unaudited Audited
Sold pallets 288,520 215,828 3,755,015
Leased pallets 2,722,840 816,221 2,740,530
Rendering of logistical
services 696,476 739,342 1,504,592
---------------- ---------------- -------------
3,707,836 1,771,391 8,000,137
================ ================ =============
Geographical information
Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 Unaudited 2015 Unaudited Audited
USA 2,811,930 856,565 6,308,906
Europe 895,906 914,826 1,691,232
3,707,836 1,771,391 8,000,137
================ ================ =============
The parent company is based in Luxembourg. The information for
the geographical area of non-current assets are presented for the
most significant areas where the group has operations, being
Luxembourg (country of domicile), rest of Europe and North
America.
Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 Unaudited 2015 Unaudited Audited
Luxembourg 2,280,246 2,247,274 3,249,373
Rest of Europe 6,425,322 8,095,908 6,379,028
North America 54,080,320 40,590,150 48,815,909
---------------- ---------------- -------------
62,785,888 50,933,332 58,444,310
================ ================ =============
Non-current assets for this purpose consist of property, plant
and equipment, investment properties and intangible assets.
Cost of sales
Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 Unaudited 2015 Unaudited Audited
Cost of pallets sold
- blockpall 238,726 152,668 2,128,000
Cost of pallets sold
- services 112,162 162,384 279,748
Amortization of pallet
pool 2,241,473 619,244 2,293,955
Cost of software, licenses
and services 691,405 734,892 1,551,590
Factory absorption 12,042,106 14,485,152 32,325,152
Impairment and repairs (7,831) - 1,921,988
Other 1,527,288 1,033,516 4,011,961
---------------- ---------------- -------------
16,845,329 17,187,856 44,512,394
================ ================ =============
Factory absorption is the variance between actuals costs to
produce pallets and the standard costs used in valuing the pallets
produced in inventory and assets. The total cost of the production
facility for which the total manufacturing capacity is circa 3
million pallets was not fully absorbed by production in the year
and the under absorption is shown as a cost of sales.
Administrative expenses
Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 Unaudited 2015 Unaudited Audited
Administration payroll 1,084,038 1,102,090 1,939,126
Selling and distribution 5,023,559 3,997,019 9,853,251
Share based payment
(non-cash item) 540,994 1,380,559 2,085,292
Depreciation 959,716 772,420 1,354,516
Other 3, 017,167 3,035,394 6,148,380
10,625,475 10,287,482 21,380,565
================ ================ =============
Other operating income and expenses
Other operating income Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 Unaudited 2015 Unaudited Audited
Net gain/ (loss) on
disposal of PPE - 421,682 435,591
Rental income 142,151 153,683 289,570
Other - 164,992 179,515
---------------- ---------------- -------------
Total other operating
income 142,151 740,357 904,676
================ ================ =============
Other operating expenses Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 Unaudited 2015 Unaudited Audited
Direct operating expenses
on rental-earning investment
properties 36,132 12,934 124,688
Other - 51,080 51,080
---------------- ---------------- -------------
Total other operating
expenses 36,132 64,014 175,768
================ ================ =============
Property, plant and equipment- other
Land & Plant Construction Total
Building & Equipment in progress
USD USD USD USD
Cost
As at 31 December
2014 (audited) 1,737,167 21,613,060 9,048,229 32,398,456
Additions - 3,241,239 8,666,039 11,907,278
Exchange differences (6,521) (1,039,920) (324,687) (1,371,128)
As at 30 June 2015
(unaudited) 1,730,646 23,814,379 17,389,581 42,934,606
Additions 26,952 (2,893,107) 6,912,123 4,045,967
Disposals - (23,469) - (23,469)
Other / transfers - 8,648,204 (8,648,204) -
Exchange differences (11,371) (1,879,609) (565,969) (2,456,950)
---------- ------------- ------------- ------------
As at 31 December
2015 (audited) 1,746,227 27,666,398 15,087,531 44,500,155
Additions - 3,474,469 1,469,914 4,944,383
Disposals - (30,654) - (30,654)
Other/transfer - 3,037,026 (3,037,026) -
Exchange differences 8,438 1,603,138 914,718 2,526,294
---------- ------------- ------------- ------------
As at 30 June 2016
(unaudited) 1,754,665 35,750,376 14,435,137 51,940,178
========== ============= ============= ============
Depreciation and impairment
---------- ------------- ------------- ------------
As at 31 December
2014 (audited) 171,447 2,429,000 3,537,463 6,137,910
Depreciation charge
for the period 32,240 1,153,426 - 1,185,666
Exchange differences (530) (99,436) - (99,966)
As at 30 June 2015
(unaudited) 203,157 3,482,990 3,537,463 7,223,610
Depreciation charge
for the period 29,415 1,297,725 - 1,327,140
Disposals - (23,469) - (23,469)
Impairment charge
for the year - 87,062 - 87,062
Exchange differences (2,553) (364,586) - (367,139)
---------- ------------- ------------- ------------
As at 31 December
2015 (audited) 230,019 4,479,722 3,537,463 8,247,204
Depreciation charge
for the period 33,151 1,698,761 - 1,731,912
Disposal - (24,857) - (24,857)
Exchange differences 1,373 181,338 - 182,711
---------- ------------- ------------- ------------
As at 30 June 2016
(unaudited) 264,543 6,334,964 3,537,463 10,136,970
========== ============= ============= ============
Net book value
As at 30 June 2016
(unaudited) 1,490,122 29,415,412 10,897,673 41,803,208
========== ============= ============= ============
As at 31 December
2015 (audited) 1,516,208 23,186,675 11,550,067 36,252,951
========== ============= ============= ============
As at 30 June 2015
(unaudited) 1,527,489 20,331,389 13,852,118 35,710,996
========== ============= ============= ============
Property, plant and equipment - Pallet pool
Pallet
Pool
USD
Cost
-----------
As at 31 December
2014 (audited) 2,886,081
Additions 8,842,115
As at 30 June 2015
(unaudited) 11,728,197
Additions 9,053,602
As at 31 December
2015 (audited) 20,781,799
Additions 1,668,994
As at 30 June 2016
(unaudited) 22,450,793
===========
Depreciation and impairment
-----------
As at 31 December
2014 (audited) 131,575
Depreciation charge
for the period 751,713
As at 30 June 2015
(unaudited) 883,288
Depreciation charge
for the period 2,414,230
As at 31 December
2015 (audited) 3,297,518
Depreciation charge
for the period 2,155,588
As at 30 June 2016
(unaudited) 5,453,106
===========
Net book value
As at 30 June 2016
(unaudited) 16,997,687
===========
As at 31 December
2015 (audited) 17,484,281
===========
As at 30 June 2015
(unaudited) 10,844,909
===========
Intangible assets
Software Trade Customer Acquired Goodwill Total
names relationships licences
and
similar
intangible
assets
USD USD USD USD USD USD
Cost
As at 31 December
2014 (audited) 2,679,607 155,328 465,983 297,033 1073,153 4,671,104
Additions - - - - - -
Exchange differences 32,010 1,856 5,567 - 12,819 52,252
---------- --------- --------------- ------------ ---------- ----------
As at 30 June
2015 (unaudited) 2,711,617 157,184 471,550 297,033 1,085,972 4,723,356
========== ========= =============== ============ ========== ==========
Additions - - - 900,035 - 900,035
Exchange differences (158,130) (9,167) (27,499) - (63,329) (258,125)
---------- --------- --------------- ------------ ---------- ----------
As at 31 December
2015 (audited) 2,553,487 148,017 444,051 1,197,068 1,022,643 5,365,266
Additions - - - 18,065 - 18,065
Exchange differences (243,192) (14,097) (42,291) - (97,396) (396,975)
---------- --------- --------------- ------------ ---------- ----------
As at 30 June
2016 (unaudited) 2,310,295 133,920 401,760 1,215,133 925,247 4,986,356
========== ========= =============== ============ ========== ==========
Depreciation
and impairment
As at 31 December
2014 (audited) 893,131 31,062 93,186 47,032 - 1,064,411
Amortization
charge for the
period 421,670 45,855 137,566 - - 605,090
Exchange differences 41,009 1,675 5,023 - - 47,707
---------- --------- --------------- ------------ ---------- ----------
As at 30 June
2015 (unaudited) 1,355,810 78,592 235,775 47,032 - 1,717,208
========== ========= =============== ============ ========== ==========
Amortization
charge for the
period 457,348 (15,283) (45,849) 29,732 - 425,948
Exchange differences (110,838) (4,106) (12,306) - - (127,250)
---------- --------- --------------- ------------ ---------- ----------
As at 31 December
2015 (audited) 1,702,319 59,203 177,620 76,764 - 2,015,906
Amortization
charge for the
period 406,958 14,154 42,462 70,450 - 605,090
Exchange differences (184,031) (6,397) (19,202) - - 47,707
---------- --------- --------------- ------------ ---------- ----------
As at 30 June
2015 (unaudited) 1,925,246 66,960 200,880 147,214 - 2,340,301
========== ========= =============== ============ ========== ==========
Net book value
As at 30 June
2016 (unaudited) 385,049 66,960 200,880 1,067,919 925,247 2,646,054
========== ========= =============== ============ ========== ==========
As at 31 December
2015 (audited) 851,168 88,814 266,431 1,120,304 1,022,643 3,349,359
========== ========= =============== ============ ========== ==========
As at 30 June
2015 (unaudited) 1,355,807 78,592 235,775 250,001 1,085,972 3,006,148
========== ========= =============== ============ ========== ==========
*Goodwill relates to the Equipment Tracking acquisition in
2013
Inventories
As at As at As at
30 June 30 June 31 December
2016 Unaudited 2015 Unaudited 2015 Audited
USD USD USD
Raw Material 6,908,874 7,314,957 10,456,947
Work in process 1,874,083 2,761,851 2,268,138
Finished pallets 13,080,763 5,908,783 7,121,542
---------------- ---------------- ----------------
Total inventory 21,863,720 15,985,591 19,846,627
================ ================ ================
Trade receivables
As at As at As at
30 June 30 June 31 December
2016 Unaudited 2015 Unaudited 2015 Audited
USD USD USD
Trade receivables 2,134,719 1,491,809 3,541,955
Income tax receivables 7,317 3,178 66
Other tax receivables 1,251,627 2,845,690 2,373,410
Other receivables 1,618,895 839,149 2,400,412
---------------- ---------------- --------------
Total Trade receivables 5,012,559 5,179,826 8,315,843
================ ================ ==============
Trade payables
As at As at As at
30 June 30 June 31 December
2016 Unaudited 2015 Unaudited 2015 Audited
USD USD USD
Trade payables 5,034,648 7,519,744 12,139,283
Employee compensation
payables 67,870 947,848 270,431
Current tax liabilities 243,717 750,556 423,531
Other payables 1,690,828 571,274 1,633,044
---------------- ---------------- --------------
Total Trade payables 7,037,064 9,789,422 14,466,289
================ ================ ==============
Interest-bearing loans and borrowings
As at As at As at
Effective 30 June 30 June 31 December
interest Maturity 2016 2015 2015
rate date Unaudited Unaudited Audited
USD USD USD
Non-current interest-bearing
loans and borrowings
CHF 1,875,000 Bank 1.8 30 November
loan % 2020 1,840,885 2,020,661 1,814,060
(The loan is secured
by a mortgage on
the building held
by the Group in
Switzerland.)
Hire purchase liabilities
in excess of one
year 8,035 9,431 30,815
Total non-current
interest-bearing
loans and borrowings 1,848,920 2,030,092 1,844,875
============ ============ =============
Current interest-bearing
loans and borrowings
Short-term part
of long term bank
loan Variable On-demand 50,000 - 100,000
Hire purchase liabilities
in excess of one
year 8,034 18,860 16,440
------------
Total current interest-bearing
loans and borrowings 58,034 18,860 116,440
============ ============ =============
Total interest-bearing
loans and borrowings 1,906,954 2,048,952 1,961,315
============ ============ =============
Share capital and reserves
2016
There have been no issues of shares during the period.
2015
On 12 March 2015, 253,000 restricted shares were granted to
certain employees. The restricted shares vest three years from the
date of grant if the recipients are still employed by the Group at
such time.
On 17 June 2015, the Company repurchased 333,334 previously
issued restricted shares. These shares are held as non-voting
treasury shares. These shares have been acquired from two former
employees benefiting from the ESOP plan. These shares have been
acquired at nominal value.
On 21 October 2015, the Company issued 75,000,000 ordinary
shares at GBP 0.40 per share.
On 3 November 2015, the Company awarded 5,500,000 options over
its ordinary shares of USD 0.01 each under its 2013 Stock Option
and Incentive Plan to its non-executive directors. The options have
an exercise price of 46.5p, being the closing share price on 2
November 2015, and duration of 10 years. The options will vest over
a 3 year period in equal annual instalments but cannot be exercised
until the stock closes above a thirty day average closing price of
100p.
On 3 November 2015, the Company awarded 800,000 options over its
ordinary shares of USD 0.01 each under its 2013 Stock Option and
Incentive Plan to some employees. The options have an exercise
price of 46.5p, being the closing share price on 2 November 2015,
and duration of 10 years. The options will vest over a 3 year
period in equal annual instalments.
As at 31 December 2015, RM2's issued share capital was
398,030,156 Ordinary Shares of USD 0.01 each in the capital of the
Company.
2014
On 6 January 2014 the Company completed the IPO issuing,
155,903,548 shares at GBP0.88 on AIM and receiving net proceeds,
after payment of fees of USD 215,760,052. Following repayment of
USD71,679,712 of development loans, fees and interest, the
Company's balance sheet was free of debt (other than the mortgage
on the office building in Switzerland) and retained USD144,080,340
to finance capital expenditure, production of inventory and
overheads. The premium arising on the newly issued IPO shares has
been taken to the Share Premium Account.
On 6 January 2014 the Company issued 4,157,428 Ordinary Shares
at par to a significant shareholder.
On 24 January 2014, 2,316,405 restricted shares were granted to
certain Directors having Performance Conditions (see note 22).
On 3 April 2014, 900,000 restricted shares were granted to a
consultant subject to certain vesting conditions.
On 13 June 2014, 2,317,000 restricted shares were granted to
certain employees, 1,000,000 of which were subject to Performance
Conditions, and 1,317,000 of which were subject to certain vesting
conditions.
On 22 September 2014 1,000,000 restricted shares were granted
subject to certain Performance Conditions.
Following such issuances, the Company had 322,777,156 Ordinary
Shares issued.
Ordinary shares issued and fully paid
Shares USD Par value
per share
At 30 June 2014 (unaudited) 321,777,156 3,217,772 USD 0.01
Subscription for restricted
shares on 22 September
2014 1,000,000 10,000 USD 0.01
At 31 December 2014 322,777,156 3,227,772 USD 0.01
Subscription for restricted
shares on 2 March 2015 253,000 2,530 USD 0.01
At 30 June 2015 323,030,156 3,230,302 USD 0.01
Subscription for new
shares on 21 October
2015 75,000,000 750,000 USD 0.01
At 31 December 2015 398,030,156 3,980,302 USD 0.01
At 30 June 2016 398,030,156 3,980,302 USD 0.01
As at 30 June 2015 and 30 June 2014, the share capital issued
composed of one Class of Ordinary Shares having equal rights.
Share premium
USD
At 30 June 2014 (unaudited) 219,357,851
At 31 December 2014 (audited) 219,357,851
At 30 June 2015 (unaudited) 219,357,851
Subscription for new shares on 21 October
2015 44,672,999
Transaction costs on issue of shares (713,760)
At 31 December 2015 (audited) 263,317,090
At 30 June 2016 (unaudited) 263,317,090
Earnings per share
Basic earnings per share amounts are calculated by dividing the
net profit for the year attributable to ordinary equity holders of
the parent by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of
ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 Unaudited 2015 Unaudited Audited
USD USD USD
Net loss attributable
to ordinary equity holders
of the parent for basic
earnings (23,811,975) (25,408,411) (58,680,598)
================ ================ =============
As at As at As at
30 June 30 June 31 December
2016 2015 2015
Weighted average number
of ordinary shares for
basic earnings per share 398,030,156 322,930,913 337,569,983
Weighted average number
of ordinary shares adjusted
for the effect of dilution 398,030,156 322,944,891 337,569,983
================ ================ =============
Loss per share
Basic (0.06) (0.08) (0.17)
Diluted (0.06) (0.08) (0.17)
================ ================ =============
Management considers that there is no dilutive effect from the
options as they would be negative.
Publication of announcement and the Interim Results
A copy of this announcement will be available at the Company's
registered office 14 days from the date of this announcement and on
its website.
This announcement is not being sent to shareholders. The Interim
Results will be posted to shareholders shortly and will be made
available on the website.
Subsequent event
Strategic alliance
On September 26, 2016, the Company announced that it has entered
into a strategic cost-saving manufacturing agreement with Jabil
Circuit, Inc. ("Jabil") for the mass production of the RM2 BLOCKpal
pallet in Mexico. The agreement with Jabil, a global leader in
digital manufacturing and supply chain solutions, will allow RM2 to
scale production to market demand. Initial production is expected
to be deployed in Q1 2017. Pallets produced at the facility will
initially be deployed with RM2's customers in North America.
This agreement is complementary to the agreement announced in
April this year for the production of pallets by Zhenshi Holdings
Groups Ltd in China, allowing RM2 to address the volume demands of
its clients. Production costs at the two facilities are expected to
be similar. The initial aggregate annual outsourcing capacity of
the Company remains at c1.5 million pallets.
Under this five-year, renewable agreement, the Company provides
existing machinery on a bailment basis to Jabil and makes no
initial capital outlay. Should the Company not order a minimum of
143,000 pallets per quarter, it is liable to a pay an
under-production gross-up payment to Jabil to enable Jabil to
recover USD2 million in capital commitment to the project.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BDLLLQKFZBBL
(END) Dow Jones Newswires
September 28, 2016 02:01 ET (06:01 GMT)
Rm2 (LSE:RM2)
Historical Stock Chart
From Jun 2024 to Jul 2024
Rm2 (LSE:RM2)
Historical Stock Chart
From Jul 2023 to Jul 2024