TIDMTNCI
RNS Number : 5204R
Tinci Holdings Ltd
12 September 2014
TINCI HOLDINGS LTD
INTERIM RESULTS
FOR THE 6 MONTHS ENDED 30 JUNE 2014
Tinci Holdings Ltd. (the "Company" or "Tinci") (TNCI), the AIM
quoted environmental engineering company, today announces its
unaudited interim results for the six months ended 30 June
2014.
Highlights:
-- Turnover of RMB 66.0 million against RMB 30.3 million in the
first half of 2013.
-- It remains difficult to win profitable new projects. Two
major new projects won in the half year.
-- Loss before tax of RMB 2.03 million (2013: Profit before tax
of RMB 2.23 million) after additional provision of RMB 7 million
against receivables.
-- Company continues to concentrate on developing Flue Gas
Desulphurisation ("FGD") joint ventures in niche markets.
Commenting on the results David Steeds, Chairman, said;
"Turnover for the first six months of 2014 showed a substantial
improvement on the corresponding period in 2013. However, it is
still difficult for Tinci's core FGD business to win new contracts
at reasonable margins. A thorough review of receivables led to an
increase in receivables provisions of RMB 7 million, which has
adversely impacted the result for the period. The management team
continues to keep costs under control so as to maintain profit
margins.
We were delighted to win contracts for RMB 75 million with
Lanzhou Petrochemical Fertilizer Plant and for RMB 29 million with
Baotou Power Plant during the period.
The management continues to work on a number of joint ventures
with our established partners in niche markets, particularly with
China National Petroleum Corporation."
For further information, please visit www.tinciholdings.com or
contact:
Tinci Holdings Ltd
David Steeds Tel: +44 (0)7836 578222
Joshua Cheng Tel: +1 512 577 4613
Westhouse Securities Limited
Martin Davison Tel: +44 (0) 20 7601 6100
Overview of Operating Performance
Turnover in the first half of 2014 was considerably stronger
than for the same period in 2013. Costs were also kept under firm
control but an increase in provisions against receivables of RMB 7
million has led to a small loss being reported in these results to
30 June 2014.
The Company again found it hard to win new customers at sensible
profit margins. However, during the period the Company won
contracts for RMB 75 million with Lanzhou Petrochemical Fertilizer
Plant and for RMB 29 million with Baotou Power Plant. Work on the
Lanzhou project commenced during the period.
As reported previously, the Company has concluded that it is
unlikely to expand its business simply by offering FGD in power
plants, where it is in competition with the power companies'
in-house FGD subsidiaries. The Company is instead focusing its FGD
business in China on the petrochemical sector, building on its good
relations with China National Petroleum Corporation as well as
existing clients with established and reliable relationships.
The Company's Order Book at 30 June 2014 amounted to RMB 128
million compared to RMB 70 million at 31 December 2012. RMB 70
million of the current order book relates to the two new contracts
outlined above.
Future Developments
Early indications are that trading in the second half of 2014
will be satisfactory and the result for the whole year is expected
to show a small profit, although it is too early to provide a clear
prediction of the financial results for the full year. Operating
cash flow is expected to be marginally positive for the full
year.
Meanwhile, the Company will continue to concentrate its
resources on developing its various joint ventures, in the hope of
achieving a breakthrough in one of these new businesses while
maintaining a stable income from FGD.
Financial Performance
Revenue in the first half of 2014 increased by 118% from RMB
30.3 million in the same period of 2013 to RMB 66 million. Loss
before tax was RMB 2.03 million compared with a profit before tax
of RMB 2.23 million for the same period last year.
Operating cash flow was negative in the first six months of 2014
due to a large increase in accounts receivable in the period. The
outflow from operations of RMB 10.0 million compares with an
outflow of RMB 19.4 million in the comparative period in 2013.
The Company aims to improve its financial performance by
focusing on collecting receivables, cutting
costs, and improving project management.
Outlook
The Board expects the FGD market in China to remain difficult
through the remainder of 2014 and
into 2015. The Company will continue to concentrate its efforts
on:
-- Developing FGD joint ventures in niche areas with established customers/partners.
-- Developing its investment in JiangSu AnDy in speciality
chemical products, which is meeting its internal targets for its
first year of operation
-- Promoting co-operation with China National Petroleum
Corporation on a catalytic refining project
-- Cutting costs and improving receivables collection.
-- Improving project management with effective budgeting and cost control.
Tinci Holdings Limited
Unaudited Interim Financial Information
For the six months ended 30 June 2014
Tinci Holdings Limited
Condensed consolidated statement of comprehensive
income(Unaudited)
for the six months ended 30 June 2014
Six months Year ended Six months
ended 30 31 December ended 30
Note June 2014 2013 June 2013
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Turnover 66,000 96,375 30,289
Other revenue 505 2,887 558
Raw material and consumables used -55,850 -78,905 -21,991
Staff costs and benefits expenses -3,111 -8,559 -2,653
Depreciation and amortisation
expenses -662 -1,217 -570
Other operating expenses -9,579 -10,075 -4,450
------------ ------------- ------------
(Loss)/profit from operations -2,697 506 1,183
Exchange (loss)/gain -3 8 -7
Finance costs -24 - -43
Non-operating income 6 - 550
Share of profit of an associate 610 856 322
Share of profit of a jointly controlled
entity 77 287 225
------------ ------------- ------------
(Loss)/profit on ordinary activities
before taxation -2,031 1,657 2,230
Taxation -510 -1,290 -264
------------ ------------- ------------
(Loss)/profit on ordinary activities
after taxation -2,541 367 1,966
============ ============= ============
(Loss)/profit for the period/year -2,541 367 1,966
Other comprehensive income/(loss)
Currency translation adjustments 1 -36 -23
Total comprehensive (loss)/income
for the period/year -2,540 331 1,943
============ ============= ============
Total comprehensive (loss)/income
attributable to:
Shareholders of the company -2,540 331 1,943
(Loss)/profit per ordinary share
Basic and diluted (loss)/profit
per share (Renminbi) 6 -0.048 0.007 0.037
Tinci Holdings Limited
Condensed consolidated statement of financial
position(Unaudited)
asat 30 June 2014
At 30 At 31 At 30
December
June 2014 2013 June 2013
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Non-current assets
Land use rights 352 357 363
Property, plant and equipment 10,059 10,518 10,166
Intangible assets 1,088 1,244 1,399
Interest in an associate 18,474 17,863 17,329
Interest in a jointly controlled
entity 1,256 1,179 1,117
Deferred tax assets 5,135 5,135 4,965
Total non-current assets 36,364 36,296 35,339
------------ ---------- ------------
Current assets
Amount due from customers for contract
work 143 13,545 232
Trade and other receivables, deposits
and prepayment 209,327 160,322 192,471
Restricted bank balances 7,109 6,398 7,554
Cash and bank balances 12,892 23,675 8,219
Total current assets 229,471 203,940 208,476
------------ ---------- ------------
Total assets 265,835 240,236 243,815
Current liabilities
Amounts due to customers for contract
work - -5,870 -
Derivative financial instruments - -33 -
Trade and other payables -108,939 -75,154 -89,662
Bills payable -18,170 -17,354 -11,652
Tax payable -318 -877 59
Total current liabilities -127,427 -99,288 -101,255
------------ ---------- ------------
Net assets 138,408 140,948 142,560
============ ========== ============
Equity
Share capital 7,796 7,796 7,796
Share premium 18,078 18,078 18,078
Reverse acquisition reserve 42,644 42,644 42,644
Share options reserve 793 793 802
Translation reserve -281 -282 -269
Retained earnings 69,378 71,919 73,509
Total shareholders' equity 138,408 140,948 142,560
============ ========== ============
Tinci Holdings Limited
Condensed consolidated statement of changes in shareholders'
equity(Unaudited)
for the six months ended 30 June 2014
Six months Year ended Six months
ended 30 31 December ended 30
June 2014 2013 June 2013
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
Shareholders' equity as at the beginning
of the period/year 140,948 140,617 140,617
------------ ------------- ------------
(Loss)/profit for the period/year -2,541 367 1,966
Other comprehensive (loss)/income
for the period/year
Exchange difference arising on consolidation 1 -36 -23
------------ ------------- ------------
Total comprehensive (loss)/income
for the period/year -2,540 331 1,943
Employee share option benefits 0 0
------------ ------------- ------------
Shareholders' equity as at the end
of the period/year 138,408 140,948 142,560
============ ============= ============
Tinci Holdings Limited
Condensed consolidated cash flow statement (Unaudited)
for the six months ended 30 June 2014
Six months Six months
ended Year ended ended
30 31 December 30
June 2014 2013 June 2013
(unaudited) (audited) (unaudited)
RMB'000 RMB'000 RMB'000
(Loss)/profit before taxation -2.031 1,657 2,230
Interest income -84 -1,233 -104
Interest expenses 24 0 43
Depreciation and amortisation expense 662 1,217 570
Unrealised gain on derivative financial
instruments 0 50 0
Bad debts written off and provision
for doubtful debts 7,000 4,024 2,000
Share of profit of an associate -611 -856 -322
Share of profit of a jointly controlled
entity -77 -287 -225
------------ ------------- ------------
Operating profit before movements
in working capital 4,883 4,572 4,192
Decrease in amount due from customers
for contract work 13,402 2,257 15,570
(Increase)/decrease in trade and
other receivables, deposits and prepayment -56,005 160 -33,775
Decrease/increase in amount due to
customers for contract work -5,870 5,870 0
Increase/(decrease) in trade and
other payables 33,752 -16,324 -1,816
Increase/(decrease) in bills payable 816 2,649 -3,053
------------ ------------- ------------
Cash used in operations -9,022 -816 -18,882
Interest received 84 156 104
Interest paid -24 0 -43
Current income tax paid -1,069 -861 -601
------------ ------------- ------------
Net cash equivalents used in operations -10,031 -1,521 -19,422
Cash flow from investing activities
Purchases of property, plant and
equipment -42 -938 -100
Advance to an associate 0 -4,750 0
Net cash used in investing activities -42 -5,688 -100
Cash flow from financing activities
Repayment of loan to a related party 0 2,000 0
Movement in restricted bank balances -711 6,643 5,487
Net cash (used in)/generated from
financing activities -711 8,643 5,487
------------ ------------- ------------
Net (decrease)/increase in cash and
cash equivalents -10,784 1,434 -14,035
Cash or cash equivalents at 1 January 23,675 22,277 22,277
Effect of foreign exchange rates
changes-net 1 -36 -23
------------ ------------- ------------
Cash or cash equivalents at 30 June/31December 12,892 23,675 8,219
ANALYSIS OF CASH AND CASH EQUIVALENTS
Cash and bank balances 12,892 23,675 8,219
Tinci Holdings Limited
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2014
1. General information
Tinci Holdings Ltd (the "Company") is incorporated in Hong Kong
under the Hong Kong Companies Ordinance. The Company is a public
listed company and its shares are quoted on the AIM market of the
London Stock Exchange. The principal place of business of the
Company and its subsidiaries (collectively "the Group") is
Guangzhou, China.
The interim results for the six months ended 30 June 2014 are
unaudited and do not constitute statutory accounts within the
meaning of s.240 of the Companies Act 1985.
2. Basis of preparation
The Directors are responsible for the preparation of the Group's
unaudited condensed consolidated financial statements. These
unaudited condensed consolidated financial statements should be
read in conjunction with the 2013 annual financial statements.
These condensed consolidated financial statements have been
prepared in accordance with International Accounting Standard
("IAS") 34 "Interim Financial Reporting".
The consolidated financial statements incorporate the financial
statements of the Company and its subsidiary undertakings.
3. Significant Accounting Policies
(a) The condensed consolidated financial statements have been
prepared on the historical cost basis.
The accounting policies used in the condensed consolidated
financial statements are consistent with those followed in the
preparation of the Group's annual consolidated financial statements
for the year ended 31 December 2013 except for those described in
note 3(b) below.
(b) The International Accounting Standards Board has issued a
number of new and revised International Financial Reporting
Standards ("IFRS"). In the current period, the Group initially
applied the following new and revised IFRS :-
IFRS 9 Financial Instruments
Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities
Amendments to IAS 39 Novation of Derivatives and Continuation of
Hedge Accounting
The initial application of these IFRS does not necessitate any
material changes in the Group's accounting policies or
retrospective adjustments of the comparatives presented.
(c) The Group has not early applied the new and revised
standards, amendments or interpretations of IFRS that have been
issued but are not yet effective at 30 June 2014. The directors of
the Company anticipate that the application of these new and
revised standards, amendments or interpretations will have no
material impact on the results and the financial position of the
Group.
Tinci Holdings Limited
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2014
4. Foreign currency
The functional currency of the subsidiary undertakings is
Renminbi ("RMB"), and the presentation currency of the Group is
RMB. Transactions in currencies other than RMB are recorded at
rates of exchange prevailing on the dates of the transactions. At
each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date, and gains or losses arising
on retranslation are included in the net profit for period.
Non-monetary assets and liabilities are translated using historical
rates, and exchange rate differences arising are classified as
equity and transferred to foreign currency translation reserve.
On consolidation, the assets and liabilities of foreign
operations are translated at the exchange rate prevailing on the
balance sheet date. Income and expense items are translated at the
average exchange rates for the period/year.
For the six months ended 30 June 2014, the foreign operations'
financial statements have been translated from GBP and HKD to RMB
at the following exchange rates:
Average Average
Period rates Year end Average Period rates
end rate Period rates rates end rate Period
as at to as at Year to as at to
30 June 30 June 31 December 31 December 30 June 30 June
2014 2014 2013 2013 2013 2013
RMB: GBP 10.4978 10.2896 10.0556 9.6885 9.4213 9.5697
RMB: HKD 0.7938 0.7920 0.7862 0.7979 0.7966 0.8034
5. Turnover
The principal activity of the Company is investment holding. The
principal activities of the Group during the period were
developing, selling and installing large-scale flue gas
desulphurisation equipment to power stations.
Details of the principal activities of the wholly-owned
subsidiaries are as follows:
Subsidiaries Principal activities
World International Investment Investment holding
Limited
Guangzhou Tinci Sanhe Developing, manufacturing and installing
Environmental Engineering Co. Ltd Flue Gas Desulphurisation Systems
Turnover represented the percentage of contract revenue
completed and recognised.
Turnover for the period is wholly attributable to activities
undertaken in China.
Tinci Holdings Limited
Notes to the condensed consolidated interim financial
statements
for the six months ended 30 June 2014
6. (Loss)/profit per ordinary share
Year ended
6 months ended 30
June 31 December
2014 2013 2013
(unaudited) (unaudited) (audited)
(Loss)/profit on ordinary activities
after taxation (in RMB'000) -2,541 1,966 367
=========== =========== ===========
Weighted average number of
ordinary
shares in issue (in thousands) 52,950 52,950 52,950
=========== =========== ===========
(Loss)/profit per ordinary
share
Basic and diluted (loss)/profit
per
share (in Reminbi) -0.048 0.037 0.007
=========== =========== ===========
7. Dividend
The Board is not recommending the payment of an interim dividend
for the six months ended 30 June 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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