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					Interim Report
     2011




               Metalrax Group PLC
  Interim Report for the 26 week period ended 3 July 2011
                      Stock Code: MRX
    Metalrax Group PLC                   www.metalraxgroup.co.uk
    Interim Report 2011



Highlights


     On-going revenues increased by                                                         Cash used in operating activities of £0.2m
     16% compared with the first half of 2010,                                              (2010: £0.8m inflow) reflects the increase in
     mainly due to the growth in export sales in                                            working capital levels required to fund the
     the Specialist Engineering division.                                                   growth in revenues.

     On-going gross margins have                                                            Net debt has been reduced to £6.1m
     decreased year on year by 1.3% to                                                      from £8.3m as at 31 December 2010
     24.6% (2010: 25.9%).                                                                   (2010 H1: £12.7m) following the disposal
                                                                                            of vacant properties and the completion
     Operating profit before exceptional items
                                                                                            of two further sale and leaseback
     and share option costs was £0.9m (2010:
                                                                                            transactions. Asset disposals generated
     £0.6m). The profit after tax was £0.1m
                                                                                            £4.1m in the 26 weeks to 3 July 2011.
     (2010: £0.4m loss).
                                                                                            The pension deficit has decreased by
                                                                                            £2.0m to £2.7m at 3 July 2011
                                                                                            (31 December 2010: £4.7m).

Results in Brief
26 week period ended 3 July 2011
                                                                                                                                      2011                    2010
                                                                                                                                       £’m                     £’m
On-going revenues1                                                                                                                   31.0                     26.6
On-going gross margins1                                                                                                            24.6%                    25.9%
Operating profit before exceptional items* and share option costs                                                                      0.9                      0.6
Profit/(loss) after taxation                                                                                                           0.1                    (0.4)
Basic earnings/(loss) per 5p ordinary share                                                                                         0.02p                  (0.32)p
Adjusted earnings/(loss) per 5p ordinary share†                                                                                     0.54p                    0.08p
Cash (used in)/generated from operations                                                                                             (0.2)                      0.8
Net debt                                                                                                                               6.1                    12.7
Gearing (net debt/net assets)                                                                                                      33.3%                    81.9%
Dividends paid per 5p ordinary share                                                                                                    nil                      nil
1
    The prior period on-going revenues and gross margins excludes the revenue and the cost of sales of businesses sold at the end of 2010, and provides prior period
    information that is comparable to the on-going revenues and gross margins of the Group.
* Exceptional items (note 5) are items of income and expenditure that, in the judgement of management, should be disclosed separately on the basis that they are
  material, either by their nature or their size, to the understanding of the financial statements and where not to do so would distort the comparability of financial
  performance between periods. Profits and losses on property sales are considered to be exceptional in nature.
† Adjusted earnings is after the add back of exceptional items, share option costs and debt issue cost amortisation, and the tax effect thereon (see note 8).


Contents
        Highlights                                                                      10      Consolidated Cash Flow Statement
01      Chairman’s and Chief Executive’s Statement                                      11      Reconciliation of Net Cash Flow to
                                                                                                Movement in Net Debt
04      Consolidated Income Statement
05      Consolidated Statement of Comprehensive Income
                                                                                        12      Notes to the Interim Report

06      Consolidated Balance Sheet
                                                                                        22      Independent Review Report to Metalrax Group PLC

07      Consolidated Statement of Changes in Equity
                                                                                        25      Group Operations/Advisers
  Metalrax Group PLC     Stock code: MRX                                                            01
  Interim Report 2011



Chairman’s and Chief Executive’s Statement


                                Andrew Walker        Andrew Richardson
                                Chairman             Chief Executive




Introduction                                         After tax, the Group is reporting a profit of £0.1m
The first half of 2011 saw the continuation of the   compared to a loss of (£0.4m) in the first half
Group’s return to operating profitability and is     of 2010.
the fourth consecutive half-year period to show
period-on-period sustainable revenue growth          This results in earnings per 5p ordinary share of
and higher return on capital employed. First         0.02p compared to a loss per 5p ordinary share
half revenues on an on-going basis grew 16%          of (0.32p) for the first half of 2010.
compared to the first half of 2010 albeit with
marked variations between the two divisions.         Dividend
                                                     The Group’s policy is to make dividend payments
The Group’s main strategic goals are high            that are covered 2.0 to 2.5 times by earnings and
return on investment and sustainable growth. In      in line with the Group’s policy there will be no
2011, the Group is focused on cash generation        interim dividend payment in respect of the period
to reduce Group borrowings and to this end           ended 3 July 2011.
completed a further £4.1m of property sales in        
the first half helping to reduce net debt to £6.1m   Operational Review
compared with £8.3m at the year-end (2010 H1:        Overview
£12.7m). The property disposals included the         The first half of 2011 showed a polarisation
sale and leaseback of two properties at Luton        between the divisions, where Specialist
(Toolspec) and Burnley (George Wilkinson). The       Engineering delivered on-going revenue growth
Board believe that the Group can generate better     of 30%, compared to an 8% decline in Consumer
long term returns with the headroom generated        Durables. This reflects the economic conditions
by these sale and leasebacks.                        of the markets in which the divisions operate;
                                                     the Group’s Specialist Engineering businesses
Results                                              have a higher proportion of export sales, selling
Operating profits before exceptional items and       to a wide range of sectors including power
share option costs at the Group level improved       generation, off highway, specialist vehicle and
to £0.9m (2010 H1: £0.6m). Building on the sales     construction where the first half of 2011 has seen
growth reported in the second half of 2010,          a continuing recovery from the low point in early
when revenues grew over 16% compared to              2009. The Consumer Durables division sales
the second half of 2009, it is pleasing to see       are mainly in the UK to large grocery multiples,
the momentum maintained with a 16% growth            independent retailers, catering equipment
in revenues on an on-going basis to £31.0m           distributors as well as the DIY sheds — markets
(2010 H1: £26.6m). On-going gross margin was         which have experienced difficult trading
impacted by input price rises and declined by 1.3    conditions in 2011, particularly in the second
points to 24.6%. Group operating profit before       quarter. The increased price of steel impacted
interest and tax grew to £0.7m (2010 H1: £0.5m)      both divisions in the Group and the challenge
increasing return on on-going sales to 2.2%          was to pass these input price increases on to the
(2010 H1: 1.7%).                                     end customers. The Group had good success
                                                     at achieving this although, due to the time lag
                                                     between receiving and passing on the price rises,
                                                     the margin percentage in the first half has been
                                                     adversely impacted.
                                                      
 02   Metalrax Group PLC    www.metalraxgroup.co.uk
      Interim Report 2011



Chairman’s and Chief Executive’s Statement
continued

Specialist Engineering                                 Cooper Coated Coil, the specialist coatings
This division accounted for 71% of the first           business continued to deliver strong revenue
half Group revenues. All six trading businesses        growth driven from increased export sales
showed strong sales growth, delivering 30%             as its UK consumer durables customer base
external sales growth overall on an on-going           experienced tougher trading. The business’s
basis resulting in revenues for the division of        significant sales growth was predominantly
£22.0m (2010 H1: £16.8m). As a result of the steel     volume driven. Following the installation of
price rises mentioned above, on-going gross            the waste heat recovery plant earlier this year,
margin declined to 26.0% (2010 H1: 27.9% on            Cooper Coated Coil is expecting significant
an on-going basis). Customer price increases           gas usage reductions that will flow through
have now been agreed and should be reflected in        to the bottom line and improve environmental
the second half margin. Despite the 2% margin          performance.
decline, the top line growth meant that at the          
operating level, this division delivered £2.0m of      Consumer Durables
profit, an increase of 39% over the prior year.        There are two trading businesses in this division;
The division contributed £0.9m of cash in the first    George Wilkinson whose main revenues are
half compared to £2.3m in the prior year. This         derived from sales of bakeware to the large
reduced cash generation was largely as a result        UK grocers and Samuel Groves who provide
of a £1.3m increase in trade receivable driven         bakeware and cookware into the professional
by the revenue growth; trade debtor days have          catering markets as well as some retail. The
reduced over the prior year.                           UK retail market conditions have been difficult
                                                       in the first half of 2011, particularly the second
Two of the division’s businesses, Toolspec and         quarter resulting in a (7.6%) decline in revenues
Weston Body Hardware have a high degree                for the division to £8.9m. A slight margin decline
of exposure to the off-highway and specialist          of 0.2 points combined with the lower revenues
vehicle sectors. Both businesses have continued        resulted in an operating loss before exceptional
to see strong signs of recovery in the first half of   items and share option costs for the half year
2011 following the difficult trading conditions in     of £0.2m (2010 H1: breakeven). This division
2009 resulting in year-on-year revenue growth          traditionally exhibits marked seasonality with
across the combined businesses in excess               profits and cash generation being stronger
of 35%.                                                in the second half of the year as its large
                                                       customers take promotional stock in the run
Post Glover LifeLink, the supplier of medical          up to Christmas. UK market share has been
electrical and safety equipment had a difficult        increased with new customer and contract wins
2010 as market conditions toughened for this           as well as sizeable second half promotions
late cycle business and so it was pleasing to          being confirmed although, ultimately, consumer
see the business increase its US Dollar sales by       spending needs to recover for this division to
over 6% in the first half of 2011. The weakening       feel the benefit of these.
of the US Dollar in the period has impacted the         
GBP equivalent, resulting in a flat GBP sales          Financial Review
performance year on year.                              The revenue growth in the first half, combined
                                                       with a reduction in overheads, resulted in a
                                                       £0.3m operating profit growth (before exceptional
                                                       items and share option costs) to £0.9m (2010
                                                       H1: £0.6m). Exceptional costs for the first half
                                                       of 2010 were £0.2m (2010 H1: £nil) which arose
                                                       as a result of the sale and leaseback of the
                                                       Burnley property.
                                                        
  Metalrax Group PLC      Stock code: MRX                                                           03
  Interim Report 2011




Balance Sheet                                         Outlook
Bank borrowings have been reduced at the half         The strong revenue growth from the Specialist
year end to £7.3m compared to a 2010 half year        Engineering division is encouraging and the
position of £14.6m (2010 year end: £9.8m). This       price rises implemented throughout the first half
represents gearing of 33.3% compared to the           should be reflected in an improved margin being
half-year in 2010 of 81.9% and translates to          reported in the second half. Whilst the Consumer
net debt after the unamortised financing costs        Durables division have secured new customers
of £6.1m (2010 year end net debt: £8.3m). The         and large promotional opportunities with UK
£2.5m of borrowings reduction since December          retailers for the second half, the division’s full
2010 was achieved through the sale of a number        year performance is exposed to fluctuations in
of non-core/vacant properties as well as the sale     UK consumer demand and the wider economic
and leaseback of two occupied sites (Burnley          conditions. Taking the Group as a whole, the
and Luton). With borrowings at this level, the        Board expects to meet market expectations for
Group is well positioned to refinance ahead of        the full year.
August 2012 when the current facilities expire.        
                                                      By order of the Board:
The pension deficit has decreased by £2.0m to
£2.7m at 3 July 2011 (31 December 2010: £4.7m).       Andrew J Walker
The decrease in deficit principally relates to        Chairman
the move from RPI to CPI for the revaluation of
certain pension liabilities.                          Andrew J Richardson
                                                      Group Chief Executive
Cash Generation                                       30 August 2011
The Group is reporting a cash outflow from
operations of £0.2m in the first half compared to
an inflow of £0.8m in the same period in 2010.
This £1.0m swing is driven by an increase in
working capital required to support the 16%
sales growth.

Financial Risks
The principal risks and uncertainties for the
remainder of the financial year are unchanged
from those described in the Annual Report at
31 December 2010, being economic, people,
pensions, property valuation, financial and
operation risks. Further detail is set out on pages
12 and 13 of the Annual Report for the year
ended 31 December 2010.
 
  04     Metalrax Group PLC              www.metalraxgroup.co.uk
         Interim Report 2011



Consolidated Income Statement
For the 26 week period ended 3 July 2011


                                                                                                            26 weeks                 26 weeks       Year
                                                                                                               ended                    ended ended 31
                                                                                                               3 July                   4 July December
                                                                                                                2011                     2010      2010
                                                                                                           Unaudited                 Unaudited   Audited
                                                                                                      Note       £’m                      £’m       £’m

On-going revenues                                                                                           4              31.0               26.6              60.0
Revenues of sold businesses                                                                                 4                —                 2.7               5.5
Total external revenues                                                                                     4              31.0               29.3               65.5
Cost of sales                                                                                                             (23.4)             (21.6)             (48.5)
Gross profit                                                                                                                7.6                 7.7             17.0
Distribution expenses                                                                                                      (2.5)               (2.9)             (5.8)
Administrative expenses                                                                                                    (4.4)               (4.3)             (9.1)
Operating profit before exceptional items*
and share option costs                                                                                                      0.9                 0.6               2.3
Exceptional items*                                                                                       4,5               (0.2)                 —                 —
Share option costs                                                                                         4                 —                 (0.1)             (0.2)
Operating profit                                                                                            4                0.7                0.5               2.1
Finance expense before amortisation of debt issue costs                                                                    (0.4)               (0.6)             (1.2)
Amortisation of debt issue costs                                                                                           (0.4)               (0.4)             (0.7)
Net finance expense                                                                                         6              (0.8)               (1.0)             (1.9)
(Loss)/profit before taxation                                                                                              (0.1)               (0.5)              0.2
Taxation credit                                                                                             7               0.2                 0.1               0.4
Profit/(loss) after taxation                                                                                                0.1                (0.4)              0.6
Loss from discontinued activities                                                                           4                —                   —               (0.3)
Profit/(loss) for the period                                                                                                0.1                (0.4)              0.3
Profit/(loss) for the period attributable
to equity shareholders of the parent                                                                                        0.1                (0.4)              0.3

Basic earnings per share                                                                                    8             0.02p              (0.32)p            0.29p
Continuing                                                                                                  8             0.02p              (0.32)p            0.47p
Discontinued                                                                                                8               —                   —              (0.18)p
Diluted earnings per share                                                                                  8             0.02p              (0.32)p            0.24p
Continuing                                                                                                  8             0.02p              (0.32)p            0.42p
Discontinued                                                                                                8               —                   —              (0.18)p

* Exceptional items (note 5) are items of income and expenditure that, in the judgement of management, should be disclosed separately on the basis that they are
  material, either by their nature or their size, to the understanding of the financial statements and where not to do so would distort the comparability of financial
  performance between periods. Profits and losses on property sales are considered to be exceptional in nature.
  Metalrax Group PLC     Stock code: MRX                                                05
  Interim Report 2011



Consolidated Statement of Comprehensive Income
For the 26 week period ended 3 July 2011


                                                            26 weeks     26 weeks       Year
                                                               ended        ended ended 31
                                                               3 July       4 July December
                                                                2011         2010      2010
                                                           Unaudited     Unaudited   Audited
                                                                 £’m          £’m       £’m
Profit/(loss) for the period/year                                 0.1         (0.4)      0.3
Other comprehensive income:
Loss on property devaluation                                       —            —       (0.8)
Actuarial gain/(loss) on defined benefit pension scheme           1.6         (1.1)      0.7
Exchange differences                                               —           0.1        —
Tax relating to components of other comprehensive income         (0.5)         0.3       0.2
Other comprehensive income for the period/year                    1.1         (0.7)      0.1
Total comprehensive income for the period/year                    1.2         (1.1)      0.4
Attributable to equity shareholders of the parent                 1.2         (1.1)      0.4
  06   Metalrax Group PLC    www.metalraxgroup.co.uk
       Interim Report 2011



Consolidated Balance Sheet
As at 3 July 2011


                                                                                          31
                                                               3 July       4 July December
                                                                2011         2010      2010
                                                            Unaudited    Unaudited   Audited
                                                       Note      £’m          £’m       £’m
Non-current assets
Goodwill                                                          7.0         7.0        7.0
Other intangible assets                                           0.6         0.6        0.6
Property, plant and equipment                                    13.2        20.0       14.5
Deferred tax asset                                                0.7         0.3        0.8
                                                                 21.5        27.9       22.9
Current assets
Inventories                                                       8.9         8.7        6.7
Trade and other receivables                                      13.0        11.2       13.7
Current tax asset                                                  —          0.1         —
Cash                                                              2.0         0.9        1.5
                                                                 23.9        20.9       21.9
Assets held for sale                                    10         —          0.6        2.5
Total assets                                                     45.4        49.4       47.3
Current liabilities
Bank borrowings                                                  (4.1)         (3.2)     (2.1)
Trade and other payables                                        (15.0)       (13.0)    (14.6)
Provisions                                                       (0.2)         (0.4)     (0.2)
                                                                (19.3)       (16.6)    (16.9)
Non-current liabilities
Bank borrowings                                                  (4.0)       (10.4)     (7.7)
Employee benefits                                       11       (2.7)         (5.9)    (4.7)
Provisions                                                       (1.1)         (1.0)    (1.1)
                                                                 (7.8)       (17.3)    (13.5)
Total liabilities                                               (27.1)       (33.9)    (30.4)
Net assets                                                       18.3        15.5       16.9
Shareholders’ equity
Share capital                                            9        6.0          6.0       6.0
Share premium                                                     2.7          2.7       2.7
Capital redemption reserve                                        0.3          0.3       0.3
Revaluation reserve                                               1.9          4.2       3.0
Other reserve                                                     0.7          0.7       0.6
Retained earnings                                                 6.7          1.6       4.3
Total equity                                                     18.3        15.5       16.9
  Metalrax Group PLC        Stock code: MRX                                                         07
  Interim Report 2011



Consolidated Statement of Changes in Equity
For the 26 week period ended 3 July 2011


                                                         Re-                 Capital
                             Share         Share    valuation      Other redemption    Retained
                            capital     premium      reserve     reserve     reserve   earnings    Total
                               £’m           £’m         £’m         £’m         £’m        £’m     £’m
Profit for the period            —            —           —           —           —         0.1     0.1
Other comprehensive
income
Realised on property
disposals                        —            —          (1.2)        —           —         1.2      —
Exchange differences             —            —            —          —           —          —       —
Actuarial loss on defined
benefit pension schemes          —            —           —           —           —         1.6     1.6
Tax relating to
components of other
comprehensive income             —            —          0.1          —           —        (0.5)    (0.4)
Total comprehensive
income for the period            —            —          (1.1)        —           —         2.4     1.3
Transactions with
owners
Credit to equity for
equity-settled share
option costs                     —            —           —          0.1          —          —      0.1
Balance at
1 January 2011                  6.0           2.7        3.0         0.6         0.3        4.3    16.9
Balance at
3 July 2011
(Unaudited)                     6.0           2.7        1.9         0.7         0.3        6.7    18.3
 08   Metalrax Group PLC    www.metalraxgroup.co.uk
      Interim Report 2011



Consolidated Statement of Changes in Equity continued
For the 26 week period ended 4 July 2010


                                                           Re-                Capital
                             Share         Share      valuation     Other redemption    Retained
                            capital     premium        reserve    reserve     reserve   earnings    Total
                              £’m           £’m            £’m       £’m         £’m         £’m     £’m
Loss for the period              —              —           —         —           —         (0.4)   (0.4)
Other comprehensive
income
Loss on property
revaluation                      —              —           —         —           —           —       —
Exchange differences             —              —           —         —           —          0.1     0.1
Actuarial loss on defined
benefit pension schemes          —              —           —         —           —         (1.1)   (1.1)
Tax relating to
components of other
comprehensive income             —              —           —         —           —          0.3     0.3
Total comprehensive
income for the period            —              —           —         —           —         (1.1)   (1.1)
Transactions with
owners
Credit to equity for
equity-settled share
option costs                     —              —           —        0.1          —          —       0.1
Balance at
1 January 2010                 6.0             2.7         4.2       0.6         0.3         2.7    16.5
Balance at
4 July 2010
(Unaudited)                     6.0            2.7         4.2       0.7         0.3         1.6    15.5
  Metalrax Group PLC    Stock code: MRX                                                        09
  Interim Report 2011



Consolidated Statement of Changes in Equity continued
For the year ended 31 December 2010


                                                     Re-                 Capital
                         Share         Share    valuation      Other redemption    Retained
                        capital     premium      reserve     reserve     reserve   earnings   Total
                          £’m           £’m          £’m        £’m         £’m         £’m    £’m
Profit for the year          —            —           —          —           —          0.3    0.3
Other comprehensive
income
Loss on property
revaluation                  —            —          (0.8)       —           —          —     (0.8)
Realised on
property disposals           —            —          (0.6)       —           —          0.6     —
Exchange differences         —            —            —         —           —           —      —
Actuarial gain on
defined benefit
pension schemes              —            —           —          —           —          0.7    0.7
Tax relating to
components of other
comprehensive income         —            —          0.2         —           —          —      0.2
Total comprehensive
income for the year          —            —          (1.2)       —           —          1.6    0.4
Transactions with
owners
Credit to equity for
equity-settled share
option costs                 —            —           —          —           —          —       —
Balance at
1 January 2010              6.0           2.7        4.2        0.6         0.3         2.7   16.5
Balance at
31 December 2010
(Audited)                   6.0           2.7        3.0        0.6         0.3         4.3   16.9
 10   Metalrax Group PLC    www.metalraxgroup.co.uk
      Interim Report 2011



Consolidated Cash Flow Statement
For the 26 week period ended 3 July 2011


                                                          26 weeks     26 weeks       Year
                                                             ended        ended ended 31
                                                             3 July       4 July December
                                                              2011         2010      2010
                                                         Unaudited     Unaudited   Audited
                                                               £’m          £’m       £’m
Loss before tax (including discontinued)                       (0.1)        (0.5)     (0.1)
Finance costs                                                   0.8          1.0       1.9
Depreciation and amortisation                                   0.6          0.8       1.6
Exceptional items                                               0.2           —       (0.1)
Share-based payment expense                                      —           0.1       0.2
Exchange gain                                                    —           0.1        —
(Increase)/decrease in inventories                             (2.2)        (1.5)      0.1
Decrease/(increase) in trade and other receivables              0.7          1.6      (1.2)
(Decrease)/increase in payables                                (0.3)        (0.9)      1.0
Increase in provisions                                         (0.1)         0.1        —
Other non-cash movements                                        0.2           —        0.6
Cash (used in)/generated from operations                       (0.2)         0.8       4.0
Interest paid                                                  (0.3)        (0.4)     (0.9)
Tax (paid)/recovered                                           (0.1)         0.2        —
Net cash (used in)/generated from operating activities         (0.6)         0.6       3.1
Investing activities
Purchase of property, plant and equipment                      (0.9)        (0.7)     (1.3)
Proceeds from sale of property, plant and equipment             4.1           —        2.4
Proceeds from sale of businesses                                 —            —        0.4
Net cash from/(used in) investing activities                    3.2         (0.7)      1.5
Financing activities
Increase/(decrease) in bank borrowings                          2.0         (1.5)     (2.6)
Repayment of bank borrowings                                   (4.1)          —       (3.0)
Net cash used in financing activities                          (2.1)        (1.5)     (5.6)
Net increase/(decrease) in cash and cash equivalents            0.5         (1.6)     (1.0)
Opening cash and cash equivalents                               1.5          2.5       2.5
Closing cash and cash equivalents                               2.0         0.9        1.5
  Metalrax Group PLC     Stock code: MRX                                           11
  Interim Report 2011



Reconciliation of Net Cash Flow to Movement in Net Debt
For the 26 week period ended 3 July 2011


                                                       26 weeks     26 weeks       Year
                                                          ended        ended ended 31
                                                          3 July       4 July December
                                                           2011         2010      2010
                                                      Unaudited     Unaudited   Audited
                                                            £’m          £’m       £’m
Net increase/(decrease) in cash in the period/year           0.5         (1.6)     (1.0)
Non-cash changes — amortisation of debt issue costs         (0.4)        (0.4)     (0.7)
(Increase)/decrease in borrowings                           (2.0)         1.5       2.6
Repayment of bank borrowings                                 4.1           —        3.0
Movement in net debt in the period/year                      2.2          (0.5)     3.9
Net debt at start of period/year                            (8.3)       (12.2)    (12.2)
Net debt at end of period/year                              (6.1)       (12.7)     (8.3)
 12   Metalrax Group PLC    www.metalraxgroup.co.uk
      Interim Report 2011



Notes to the Interim Report
For the 26 week period ended 3 July 2011


1 General information
The company is a public limited company incorporated and domiciled in the UK. The address of its registered
office is Ardath Road, Kings Norton, Birmingham, B38 9PN.

The company has its primary listing on the Alternative Investment Markets (“AIM”) following its delisting from
the London Stock Exchange on 25 June 2008.

This interim report was approved for issue on 30 August 2011.

This condensed consolidated interim financial information does not comprise statutory accounts within
the meaning of section 434 of the Companies Act 2006. The full accounts of Metalrax Group PLC for the
year ended 31 December 2010, which received an unqualified report from the auditors, did not contain an
emphasis of matter paragraph and did not contain any statement under section 498(2) or (3) of the Companies
Act 2006, have been filed with the Registrar of Companies.

The condensed consolidated interim financial information has been reviewed, not audited. The interim financial
information for 3 July 2011 has been reviewed by the auditors and their independent review report is included
within this financial information.


2 Basis of preparation
The condensed consolidated interim financial information for the 26 week period ended 3 July 2011 has been
prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with
International Accounting Standard 34 ‘Interim Financial Reporting’ (IAS34) as adopted by the European Union.

The condensed consolidated interim financial information should be read in conjunction with the annual
financial statements for the year ended 31 December 2010, which have been prepared in accordance with
IFRS as adopted by the European Union.

The condensed consolidated financial information has been prepared on the going concern basis, which
assumes that the Group will continue to be able to meet its liabilities as they fall due for the foreseeable future.
The Group’s current banking facilities expire on 31 August 2012. Refinancing discussions are in progress
and the Board has a reasonable expectation that the Group will be successful in obtaining the necessary
funding, and for this reason believes it is appropriate to continue to adopt the going concern basis in preparing
the condensed set of financial information. The set of condensed financial information do not include the
adjustments that would result if the Group was unable to continue as a going concern.


3 Accounting policies
The accounting policies applied are consistent with those in the annual financial statements for the year ended
31 December 2010, as described in those financial statements. The following relevant accounting standards
are applicable for the first time in the year ended 31 December 2011;


   IFRIC19 — ‘Extinguishing financial liabilities with equity instruments’
   Improvements to IFRSs (April 2010)
   IAS24 (Revised) — ‘Related party disclosures’
   Amendment to IFRIC14 — ‘Prepayment of a minimum funding requirement’
   Amendment to IAS32 — ‘Financial Instruments Presentation’

There has been no significant impact from the adoption of these accounting standards.
  Metalrax Group PLC       Stock code: MRX                                                                  13
  Interim Report 2011




3 Accounting policies (continued)
The following new standards and interpretations have been issued but are not effective for the year ended
31 December 2011 and have not been adopted early:


   Amendment to IAS1 ‘Financial Statement Presentation’
   Amendments to IFRS7 on derecognition
   Amendments to IFRS1 ‘First time adoption’
   Amendments to IAS12 ‘Income taxes’
   IAS19 (revised) — ‘Employee Benefits’
   IFRS10 — ‘Consolidated financial statements’
   IFRS11 — ‘Joint arrangements’
   IFRS12 — ‘Disclosure of interests in other entities’
   IFRS13 — ‘Fair value measurement’
   IAS27 — ‘Separate Financial Statements’
   IAS28 — ‘Investments in associates and joint ventures’

The directors are currently assessing the impact on the Group of these standards.

The financial statements have been prepared under the historical cost convention as modified by the
revaluation of properties.

The preparation of financial statements in conformity with generally accepted accounting principles requires the
use of certain critical accounting estimates. It also requires management to exercise judgement in the process
of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity,
or areas where assumptions and estimates are significant to the condensed consolidated interim financial
statements are disclosed within the Group’s accounting policies as disclosed in the IFRS financial statements
for the year ended 31 December 2010.


4 Segmental information
The Group has two divisions — Specialist Engineering and Consumer Durables. These segments are
consistent with information reported to the Group’s Chief Executive, being the Chief Operating Decision Maker,
for the purpose of resource allocation and performance assessment. The principal activities of the two divisions
are as follows:

Specialist Engineering — a variety of precision manufacturing activities that incorporate value adding
technology for unique applications in the medical, specialist metal coating and premium automotive sectors.

Consumer Durables — manufactures and markets bakeware and associated ranges of kitchen accessories to
both the retail and commercial markets in the UK and abroad.

The accounting policies of the reporting segments are the same as the Group’s accounting policies which are
described in the Group’s latest annual financial statements and those in note 3. Segment result represents the
profit or loss achieved by each segment without allocation of share option costs, central administration costs
including directors’ salaries, investment revenue and finance costs, and income tax expense.
  14   Metalrax Group PLC    www.metalraxgroup.co.uk
       Interim Report 2011



Notes to the Interim Report continued
For the 26 week period ended 3 July 2011


4 Segmental information (continued)

a) Segment revenues and results

26 week period ended 3 July 2011 — Unaudited
                                    Continuing businesses
                                                                                           Dis-
                                     Specialist Consumer         Central       Total continued      Total
                                    Engineering Durables        Services Continuing Businesses     Group
                                           £’m       £’m             £’m        £’m        £’m       £’m

On-going revenues                             24.1       9.0         0.1       33.2         —        33.2
Revenues of sold businesses                     —         —           —          —          —          —
Total revenues                                24.1       9.0         0.1       33.2         —        33.2
Inter-segment revenues                        (2.1)     (0.1)         —        (2.2)        —        (2.2)
Revenue from external customers               22.0       8.9         0.1       31.0         —        31.0
Gross profit                                    5.7      1.9          —         7.6         —         7.6
Gross margin — total and
on-going                                    26.0%      21.5%      100.0%      24.6%          —     24.6%
Operating profit/(loss) before
exceptional items and
share option costs                              2.0     (0.2)       (0.9)        0.9       (0.1)      0.8
Exceptional items                                —      (0.2)         —         (0.2)       0.2        —
Share option costs                               —        —           —           —          —         —
Operating profit/(loss)                         2.0     (0.4)       (0.9)       0.7         0.1       0.8
Finance expense (net)                                                           (0.8)      (0.1)     (0.9)
Loss before taxation                                                            (0.1)       —        (0.1)
Taxation                                                                         0.2        —         0.2
Profit after taxation                                                           0.1         —         0.1
  Metalrax Group PLC        Stock code: MRX                                                             15
  Interim Report 2011




4 Segmental information (continued)

a) Segment revenues and results (continued)

26 week period ended 4 July 2010 — Unaudited
                                    Continuing businesses
                                                                                               Dis-
                                       Specialist       Consumer     Central       Total continued     Total
                                     Engineering         Durables   Services Continuing Businesses    Group
                                            £’m              £’m        £’m         £’m        £’m      £’m

On-going revenues                              19.0           9.7       0.1        28.8         —      28.8
Revenues of sold businesses                     2.7            —         —          2.7         —       2.7
Total revenues                                 21.7           9.7       0.1        31.5         —      31.5
Inter-segment revenues                          (2.2)          —         —          (2.2)       —       (2.2)
Revenue from external customers                19.5           9.7       0.1        29.3         —      29.3
Gross profit                                    5.5           2.1       0.1         7.7         —       7.7
Gross margin — total                          28.1%         21.7%    100.0%       26.3%          —    26.3%
Gross margin — on-going                       27.9%         21.7%    100.0%       25.9%          —    25.9%
Operating profit/(loss) before
exceptional items and
share option costs                              1.4           —         (0.8)       0.6         —        0.6
Exceptional items                                —            —           —          —          —         —
Share option costs                               —            —         (0.1)      (0.1)        —       (0.1)
Operating profit/(loss)                         1.4           —         (0.9)       0.5         —       0.5
Finance expense (net)                                                              (1.0)                (1.0)
Loss before taxation                                                               (0.5)        —       (0.5)
Taxation                                                                            0.1         —        0.1
Loss after taxation                                                                (0.4)        —       (0.4)
  16   Metalrax Group PLC       www.metalraxgroup.co.uk
       Interim Report 2011



Notes to the Interim Report continued
For the 26 week period ended 3 July 2011


4 Segmental information (continued)

a) Segment revenues and results (continued)

Year ended 31 December 2010 — Audited
                                   Continuing businesses
                                                                                                   Dis-
                                           Specialist     Consumer       Central       Total continued      Total
                                         Engineering       Durables     Services Continuing Businesses     Group
                                                £’m            £’m          £’m         £’m        £’m       £’m

On-going revenues                                40.6          23.9         0.2        64.7         —       64.7
Revenues of sold businesses                       5.8            —           —          5.8         —        5.8
Total revenues                                   46.4          23.9         0.2        70.5         —       70.5
Inter-segment revenues                            (4.9)         (0.1)        —          (5.0)       —        (5.0)
Revenue from external customers                  41.5          23.8         0.2        65.5         —       65.5
Gross profit                                     11.7           5.2         0.1        17.0        (0.1)    16.9
Gross margin — total                            28.0%         21.9%       58.7%       25.8%          —     25.8%
Gross margin — on-going                         32.5%         21.9%       58.7%       28.3%          —     28.3%
Operating profit/(loss)
before share option costs                          3.4          1.0         (2.1)       2.3        (0.2)      2.1
Share option costs                                  —            —          (0.2)      (0.2)         —       (0.2)
Operating profit/(loss)                            3.4          1.0         (2.3)       2.1        (0.2)     (1.9)
Finance expense (net)                                                                  (1.9)       (0.1)     (2.0)
Profit/(loss) before taxation                                                           0.2        (0.3)     (0.1)
Taxation                                                                                0.4          —        0.4
Profit/(loss) after taxation                                                            0.6        (0.3)     0.3
  Metalrax Group PLC        Stock code: MRX                                                                   17
  Interim Report 2011




4 Segmental information (continued)

b) Segment assets/(liabilities)
                                                                     3 July             4 July      31 December
                                                                      2011               2010              2010
                                                                  Unaudited          Unaudited           Audited
                                                                       £’m                £’m               £’m
Specialist Engineering                                                   21.9              22.4              18.8
Consumer Durables                                                        10.6              14.0              14.1
Central Services                                                         10.9              13.6              11.3
Discontinued Businesses                                                   2.0               1.9               1.8
Total segment assets                                                     45.4               51.9              46.0
Unallocated assets and liabilities                                      (27.1)             (36.4)            (29.1)
Consolidated total assets                                                18.3              15.5              16.9

The unallocated assets and liabilities include debt, taxation, pensions and deferred taxation.


5 Exceptional items
                                                                   26 weeks          26 weeks               Year
                                                                      ended             ended             ended
                                                                      3 July            4 July      31 December
                                                                       2011              2010              2010
                                                                  Unaudited          Unaudited           Audited
                                                                        £’m               £’m               £’m
Loss on disposal of properties                                            0.2                —                  —

During the period, the Group disposed of two properties at Luton (Toolspec) and Burnley (George Wilkinson)
under sale and leaseback arrangements which realised a loss on disposal of £0.2m.

Included within the loss from discontinued activities in 2011, there is an exceptional credit of £0.2m relating to
the release of part of the Group’s onerous lease provision at Walsall following a reassessment of the on-going
rental costs by the directors.
 18   Metalrax Group PLC    www.metalraxgroup.co.uk
      Interim Report 2011



Notes to the Interim Report continued
For the 26 week period ended 3 July 2011


6 Finance expense (net)
                                                                  26 weeks          26 weeks               Year
                                                                     ended             ended             ended
                                                                     3 July            4 July      31 December
                                                                      2011              2010              2010
                                                                 Unaudited          Unaudited           Audited
                                                                       £’m               £’m               £’m
Interest payable on bank loans and overdrafts                            0.3                0.4               0.9
Amortisation of debt issue costs                                         0.4                0.4               0.7
Net finance cost of defined benefit pension schemes                      0.1                0.2               0.3
Net finance expense — continuing                                         0.8                1.0               1.9
Net finance expense — discontinued                                       0.1                 —                0.1
Total net finance expense                                                0.9                1.0               2.0


7 Income tax credit/(charge)
                                                                  26 weeks          26 weeks               Year
                                                                     ended             ended             ended
                                                                     3 July            4 July      31 December
                                                                      2011              2010              2010
                                                                 Unaudited          Unaudited           Audited
                                                                       £’m               £’m               £’m
Current tax charge                                                       (0.1)               —                (0.2)
Prior period adjustments to tax                                            —                0.1                 —
Deferred tax credit                                                       0.3                —                 0.6
Income tax credit                                                        0.2                0.1               0.4

Income tax credit/(charge) is recognised based on management’s best estimate of the weighted average
annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the
year to 31 December 2011 is 20.3%.

There is a net £0.3m (2010: £nil) deferred tax credit to the income statement in the period relating to the
recognition of previously unrecognised tax losses amounting to £1.4m.

The Finance Act (No 2) 2010 was substantively enacted on 20 July 2010 and included legislation to reduce the
main rate of corporation tax from 28% to 27% from 1 April 2011.

Further reductions to the UK corporation tax rate were announced in the June 2010 Budget. These changes,
which are expected to be enacted separately each year, proposed reducing the rate by 1% per annum to 24%
by 1 April 2014. These reductions have been amended by Budget 2011 on 23 March 2011. An additional
reduction of 1% is proposed to the Financial Year beginning 1 April 2011 and rates will be reduced by three
further one per cent cuts to 23% by the Financial Year beginning 1 April 2014. At the balance sheet date
the rate that had been substantively enacted was a reduction in the current tax rate to 26% and therefore
the deferred tax balance has been calculated at 26%. Management is currently assessing the impact of
these changes.
  Metalrax Group PLC         Stock code: MRX                                                                  19
  Interim Report 2011




8 Earnings/(loss) per ordinary share
The basic and diluted loss per share is calculated based on the profit/(loss) after tax for the period and the
adjusted profit/(loss) per share is calculated based on an adjusted profit/(loss) after tax as calculated below.
The weighted average number of shares used in the basic earnings per share calculation is 119,897,298
(30 June and 31 December 2010: 119,897,298).The weighted average number of shares used in the diluted
earnings per share calculation is 131,845,699 (31 December 2010: 131,845,699).

                                                                   26 weeks          26 weeks              Year
                                                                      ended             ended            ended
                                                                      3 July            4 July     31 December
                                                                       2011              2010             2010
                                                                  Unaudited          Unaudited          Audited
                                                                        £’m               £’m              £’m
Profit/(loss) for the period/year after tax                               0.1              (0.4)              0.6
Add back exceptional items                                                0.2                —                 —
Add back share option costs                                                —                0.1               0.2
Add back debt issue cost amortisation                                     0.4               0.4               0.7
Adjusted profit after tax                                                 0.7               0.1               1.5

Basic earnings/(loss) per 5p ordinary share (pence per share)           0.02              (0.32)             0.29
Diluted earnings/(loss) per 5p ordinary share (pence per share)         0.02              (0.32)             0.24
Adjusted basic earnings per 5p ordinary share
(pence per share)                                                       0.54               0.08              1.09

Earnings/(loss) per ordinary share for Continuing operations
                                                           26 weeks                  26 weeks              Year
                                                              ended                     ended            ended
                                                              3 July                    4 July     31 December
                                                               2011                      2010             2010
                                                          Unaudited                  Unaudited          Audited
                                                                £’m                       £’m              £’m
Profit/(loss) for the period/year after tax                               0.1              (0.4)              0.6
Add back exceptional items                                                0.2                —
Add back share option costs                                                —                0.1               0.2
Add back debt issue cost amortisation                                     0.4               0.4               0.7
Adjusted profit after tax                                                 0.7               0.1               1.5

Basic earnings/(loss) per 5p ordinary share (pence per share)           0.02              (0.32)             0.47
Diluted earnings/(loss) per 5p ordinary share (pence per share)         0.02              (0.32)             0.42
Adjusted basic earnings per 5p ordinary share
(pence per share)                                                       0.54               0.08              1.27

Diluted earnings per share needs to be disclosed when a Company could be called upon to issue shares that
would decrease net profit or increase net loss per share. There is no dilution in the loss per share calculation
at 3 July 2011.
  20   Metalrax Group PLC    www.metalraxgroup.co.uk
       Interim Report 2011



Notes to the Interim Report continued
For the 26 week period ended 3 July 2011


9 Share capital
                                                                 3 July             4 July     31 December
                                                                  2011               2010             2010
                                                              Unaudited          Unaudited          Audited
                                                                   £’m                £’m              £’m
Called up, issued and fully paid
119,897,298 (2009:119,897,298) ordinary shares of 5p each             6.0               6.0              6.0


10 Assets held for sale
The value of assets held for sale at 31 December 2010 was £2.5m. These relate to properties that were being
actively marketed and £1.7m was sold before the approval of the 2010 accounts and the remaining properties
were disposed of in the period. Sale proceeds of £2.5m were used to repay £2.5m of the senior debt facility.

At 4 July 2010, assets held for resale totalled £0.6m and the net disposal proceeds were used to repay £0.6m
of the senior debt facility.


11 Pensions
The valuation of the Group’s pension scheme obligation has been updated using an IAS19 valuation as at
3 July 2011, to reflect current market discount rates, current market values of investment and actual
investment returns. The amounts included in the balance sheet arising from the Group’s pension obligations
in respect of defined benefit schemes are as follows:

                                                                 3 July             4 July     31 December
                                                                  2011               2010             2010
                                                              Unaudited          Unaudited          Audited
                                                                   £’m                £’m              £’m
Total market value of plan assets                                     7.8               8.1              8.6
Present value of scheme liabilities                                 (10.5)            (14.0)           (13.3)
Pension scheme liability                                              (2.7)            (5.9)            (4.7)

The major assumptions used by the Actuary were:

                                                                 3 July             4 July     31 December
                                                                  2011               2010             2010
                                                              Unaudited          Unaudited          Audited
                                                                     %                  %                %
Inflation                                                            3.40             3.25              3.30
Rate of increase in salaries                                           —              3.25                —
Pension increases, subject to RPI                                    3.40             3.25              3.30
Revaluation, subject to CPI                                          2.50               —                 —
Discount rate                                                        5.50             5.30              5.40
Return on plan assets                                                5.20             5.20              5.10

No adjustments have been made in the period to the mortality assumptions used as at 31 December 2010.
  Metalrax Group PLC          Stock code: MRX                                                                 21
  Interim Report 2011




12 Related party transactions
All intra-group transactions have been eliminated on consolidation at 3 July 2011. There have been no other
related party transactions in the period from 1 January 2011 to 30 August 2011.


13 Principal risks and uncertainties
The principal risks and uncertainties which could affect the Group for the remainder of the financial year are
consistent with those detailed on pages 12 and 13 of the Annual Report and Accounts for the year ended
31 December 2010, a copy of which is available at www.metalraxgroup.co.uk, and are:

   Economic risk
   People risk
   Pensions risk
   Property valuations risk
   Financial risk
   Operational risk

The Company regularly assesses these risks together with the associated mitigating factors listed in the 2010
Annual Report. The levels of activity in the Group’s markets and the level of financial liquidity and flexibility
continue to be the areas designated as appropriate for added management focus.

The Outlook section of this half yearly report provides a commentary concerning the remainder of the
financial year.

Forward-looking statements
Certain statements in this interim results announcement are forward-looking statements. By their nature,
forward-looking statements involve a number of risks, uncertainties or assumptions that could cause actual
results or events to differ materially from those expressed or implied by the forward-looking statements. These
risks, uncertainties or assumptions could adversely affect the outcome and financial effects of the plans and
events described herein. Forward-looking statements contained in this interim results announcement regarding
past trends or activities should not be taken as a representation that such trends or activities will continue in
the future. You should not place undue reliance on forward-looking statements, which speak only as of the
date of this interim results announcement. Except as required by law, the Company is under no obligation to
update or keep current the forward-looking statements contained in this interim results announcement or to
correct any inaccuracies which may become apparent in such forward-looking statements.
 22   Metalrax Group PLC    www.metalraxgroup.co.uk
      Interim Report 2011



Independent Review Report to Metalrax Group PLC

Introduction
We have been engaged by the Company to review the condensed consolidated interim financial information
in the interim report for the 26 week period ended 3 July 2011, which comprises the consolidated income
statement, the consolidated statement of other comprehensive income, the consolidated statement of
changes in equity, the consolidated balance sheet, the consolidated cash flow statement, the reconciliation of
net cash flow to movement in net debt and related notes. We have read the other information contained in the
Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with
the information in the condensed set of financial statements.

Directors’ responsibilities
The interim report is the responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the interim report in accordance with the AIM Rules for Companies which require that
the financial information must be presented and prepared in a form consistent with that which will be adopted
in the company’s annual financial statements.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs
as adopted by the European Union. The condensed set of consolidated interim financial information included
in this Interim Report has been prepared in accordance with International Accounting Standard 34, “Interim
Financial Reporting”, as adopted by the European Union.

Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed consolidated interim financial
information in the interim report based on our review. This report, including the conclusion, has been prepared
for and only for the Company for the purpose of the AIM Rules for Companies and for no other purpose. We
do not, in producing this report, accept or assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save where expressly agreed by our prior
consent in writing.

Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland)
2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by
the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.

Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed
consolidated interim financial information in the interim report for the 26 week period ended 3 July 2011 is not
prepared, in all material respects, in accordance with International Accounting Standard 34, “Interim Financial
Reporting”, as adopted by the European Union, and the AIM Rules for Companies


PricewaterhouseCoopers LLP
Chartered Accountants
Birmingham
30 August 2011

Notes
(a)  The maintenance and integrity of the Metalrax Group PLC website is the responsibility of the directors;
     the work carried out by the auditors does not involve consideration of these matters and, accordingly, the
     auditors accept no responsibility for any changes that may have occurred to the financial statements since
     they were initially presented on the website.

(b)  Legislation in the United Kingdom governing the preparation and dissemination of financial statements may
     differ from legislation in other jurisdictions.
Metalrax Group PLC    Stock code: MRX   23
Interim Report 2011
24   Metalrax Group PLC    www.metalraxgroup.co.uk
     Interim Report 2011
Group Operations
Consumer Durables                          Specialist Engineering
George Wilkinson                           Advanced Handling                             Premier Architectural Metalwork
‘Progress’ consumer bakeware, kitchen      Providing integrated handling solutions       Architectural metalwork
tools and gadgets                          Northfields Industrial Estate,                Unit 300, Catesby Park, Eckersall Road,
‘Microwise’ microwave cookware             Market Deeping, Peterborough PE6 8LD          Kings Norton, Birmingham B38 8SE
Wood and metal wine racks                  Tel: 01778 345365 Fax: 01778 341654           Tel: 0121 451 1212 Fax: 0121 451 1220
Innovative kitchen products
                                           Cooper Coated Coil                            Toolspec
Bathroom furniture
                                           Surface coated metals                         Tube manipulation and assemblies
(formerly George Wilkinson (Burnley) and
                                           Units 38 & 39, Planetary Industrial Estate,   Sedgwick Road, Luton,
Microwise Cookware and RTA Wineracks)
                                           Wednesfield, Wolverhampton WV13 3XB           Bedfordshire, LU4 9DT
Progress Works, Elm Street,
                                           Tel: 01902 864422 Fax: 01902 864412           Tel: 01582 572626 Fax: 01582 596891
Burnley, Lancashire BB10 1PB
Tel: 01282 415511 Fax: 01282 433112        Post Glover LifeLink                          Weston Body Hardware
                                           Complete line of patient safety equipment     Locks, handles, latches and ancillary
Samuel Groves
                                           167 Gap Way, Erlanger,                        products
‘Mermaid‘ bakeware and cookware
                                           KY 41018, United States                       Crossgate Road,
‘Longlife‘ catering equipment
                                           Tel: (001) 859-283-5900                       Park Farm Industrial Estate,
Station Road, Langley Green,
                                           Fax: (001) 859-372-6272                       Redditch, Worcestershire B98 7SN
Oldbury, Birmingham B69 4LY
                                                                                         Tel: 01527 516060 Fax: 01527 526060
Tel: 0121 569 7900 Fax: 0121 569 7901




Advisers
Auditors                       Principal Bankers                 Brokers
PricewaterhouseCoopers LLP     The Royal Bank of Scotland        Arden Partners
Cornwall Court                 2 St Philips Place                125 Old Broad Street
19 Cornwall Street             Birmingham                        London
Birmingham                     B3 2RB                            EC2N 1AR
B3 2DT                         HSBC Bank plc
Financial Advisers             130 New Street
N M Rothschild & Sons          Birmingham
67 Temple Row                  B2 4JU
Birmingham                     Registrars
B2 5LS                         Computershare Investor
and                            Services PLC
Arden Partners                 P.O. Box 82
125 Old Broad Street           The Pavilions
London                         Bridgwater Road
                               Bristol
EC2N 1AR
                               BS99 7NH
Solicitors
Eversheds LLP                  Dedicated Shareholder
115 Colmore Row                enquiries:
Birmingham                     0870 707 1179
B3 3AL
Metalrax Group PLC
Registered Office
Ardath Road, Kings Norton
Birmingham, B38 9PN

Tel: 0845 030 3300
Fax: 0121 433 3325
Website: www.metalraxgroup.co.uk
Email: info@metalraxgroup.co.uk
Registered in England 793639
t Information (continued)
     Information about products
     The following table sets forth the total revenue from external customers by product and the percentage of total revenue by
     product during the Reporting Period:


                                                                                 For the six months ended 30 June
                                                                                   2011                          2010
                                                                             RMB’000            %             RMB’000            %
                                                                           (Unaudited)                   (Unaudited)


        Sale of marble slabs                                                    42,313        40.5                  —           —
        Sale of marble blocks                                                   62,159        59.5                  —           —


                                                                               104,472       100.0                  —           —


     Information about major customers
     Revenue from major customers, each of whom accounted for 10% or more of the total revenue, is set out below:


                                                                                          For the six months ended 30 June
                                                                                                      2011                    2010
                                                                                                RMB’000                  RMB’000
                                                                                              (Unaudited)               (Unaudited)


        Customer A                                                                                   31,410                     —
        Customer B                                                                                   28,990                     —
        Customer C                                                                                   16,726                     —
        Customer D                                                                                   13,598                     —




4. Other Income
     An analysis of other income is as follows:


                                                                                          For the six months ended 30 June
                                                                                                      2011                    2010
                                                                                                RMB’000                  RMB’000
                                                                                              (Unaudited)               (Unaudited)


        Interest income                                                                               4,180                      6
        Miscellaneous                                                                                   22                      —


                                                                                                      4,202                      6




26    China Kingstone Mining Holdings Limited   Interim Report 2011
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




5. Profit/(Loss) before Tax
     The Group’s profit/(loss) before tax is arrived at after charging:


                                                                                         For the six months ended 30 June
                                                                                                          2011                        2010
                                                                          Notes                    RMB’000                      RMB’000
                                                                                                (unaudited)                   (unaudited)


       Cost of inventories sold                                                                        14,239                               —


       Staff costs (including directors’ remuneration):
          Wages and salaries                                                                             9,191                       1,467
          Pension scheme contributions
            — Defined contribution scheme                                                                   657                           293
          Equity-settled share option expense                               13                         20,406                               —
          Other staff benefits                                                                           1,365                            454


                                                                                                       31,619                        2,214
          Less: Staff costs capitalized                                                                 (2,650)                     (1,517)


                                                                                                       28,969                             697


       Global offering costs                                                                           24,916                        2,058
       Interest on borrowings wholly repayable within five years                                         1,512                       1,514
       Guarantee costs                                                                                        —                           120
       Bank charges                                                                                         110                            24


       Total finance costs                                                                               1,622                       1,658


       Amortization of intangible assets                                     8                              725                             —
       Amortization of prepaid land lease payments                           8                                13                            —
       Depreciation of items of property, plant and equipment                8                           2,657                            425
       Less: Depreciation capitalized                                                                   (1,146)                           (360)


                                                                                                         1,511                             65
       Foreign exchange loss                                                                             2,064                              —
       Operating lease rentals for office                                                                   453                            34
       Loss on disposal of items of property, plant and equipment                                             —                            23




                                                                          China Kingstone Mining Holdings Limited   Interim Report 2011     27
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




6. Income Tax Expense
     The major components of income tax expense for the six months ended 30 June 2011 and 2010 are as follows:


                                                                                                    For the six months ended 30 June
                                                                                                                 2011                   2010
                                                                                                            RMB’000                 RMB’000
                                                                                                         (unaudited)              (unaudited)


        Current — Mainland China
           Charge for the period                                                                               15,453                      —
        Deferred                                                                                                5,415                    (954)


        Total tax expense/(credit) for the period                                                              20,868                    (954)


     The Group is subject to income tax on an entity basis on profits arising in or derived from the jurisdiction in which members of the
     Group are domiciled and operate.


     The Company is a tax exempted company registered in Cayman Islands and has registered in Hong Kong as an overseas
     company. The Company conducts substantially all of its business through its PRC subsidiaries.


     No provision for Hong Kong profits tax has been made as the Group had no assessable profits derived from or earned in Hong
     Kong during the Reporting Period.


     The provision for the PRC corporate income tax (“CIT”) is based on the respective CIT rates applicable to the subsidiaries located
     in Mainland China as determined in accordance with the relevant income tax rules and regulations of the PRC for the Reporting
     Period. The Group’s subsidiaries located in Mainland China are subject to the PRC CIT rate of 25% from 2008.


     Pursuant to the income tax rules and regulations of the PRC, a 10% withholding tax is levied on dividends declared to foreign
     investors from foreign investment enterprises established in the PRC effective from 1 January 2008.


     Pursuant to the resolution dated 30 June 2011 of the board of directors of the operating subsidiary in the PRC, Kingstone
     (Guangzhou) Stone Industry Co., Ltd. (“Guangzhou Kingstone”), the net profit of Guangzhou Kingstone for the Reporting Period,
     after appropriations to the statuary reserve fund, would be used for business development of Guangzhou Kingstone and would
     not be distributed to its shareholders. As a result, no deferred tax liabilities relating to withholding tax on the distributable profits of
     Guangzhou Kingstone for the Reporting Period have been recorded.




28    China Kingstone Mining Holdings Limited   Interim Report 2011
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




7. Earnings/(Loss) Per Share Attributable to Ordinary Equity Holders of the Company
     The calculation of the earnings per share amount is based on the profit attributable to owners of the Company for the Reporting
     Period amounting to RMB9,766,000 and 1,533,967,000 shares, being the weighted average number of ordinary shares in issue
     during the Reporting Period and the capitalization of capital reserve account at the date of listing on the SEHK.


     The weighted average number of shares used to calculate the basic earnings per share for the period ended 30 June 2011
     includes 58,000,000 and 442,000,000 shares issued on 17 March 2011 and 18 March 2011, respectively, in connection with the
     Company’s initial public offering on the SEHK.


     No loss per share information for the six months ended 30 June 2010 is presented as its inclusion, for the purpose of this report,
     is not considered meaningful due to the fact that only one share was issued by the Company during the six months ended 30
     June 2010.


     No adjustment has been made to the basic earnings per share in respect of a dilution as the Company did not have any potential
     dilutive shares in issue shares during the six months ended 30 June 2010 and the exercise price of the Company’s outstanding
     share options was higher than the average market price for the Company’s shares during the Reporting Period.



8. Property, Plant and Equipment, Intangible Assets and Prepaid Land Lease Payments
     Movements in property, plant and equipment, intangible assets and prepaid land lease payments during the Reporting Period are
     as follows:


                                                                          Property, plant                  Intangible              Prepaid land
                                                                         and equipment                          assets        lease payments
                                                                                 RMB’000                     RMB’000                     RMB’000
                                                                               (unaudited)                 (unaudited)                 (unaudited)


       Carrying amount at 1 January 2011                                           87,863                       23,645                        2,389
       Additions                                                                   48,976                       39,109                             —
       Depreciation/amortization charged for the period (Note 5)                    (2,657)                         (725)                          (13)


       Carrying amount at 30 June 2011                                            134,182                       62,029                        2,376




                                                                                   China Kingstone Mining Holdings Limited   Interim Report 2011    29
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




9. Cash and Cash Equivalents
                                                                                                        30 June        31 December
                                                                                                           2011                 2010
                                                                                                        RMB’000            RMB’000
                                                                                                    (unaudited)


        Cash and bank balances                                                                           374,223              80,082
        Time deposits with original maturity of less than three months                                   241,837                   —


                                                                                                         616,060              80,082
        Time deposits with original maturity of over three months                                        200,000                   —


        Cash and cash equivalents                                                                        816,060              80,082




10. Trade Receivables
                                                                                                        30 June        31 December
                                                                                                           2011                 2010
                                                                                                        RMB’000            RMB’000
                                                                                                    (unaudited)


        Trade receivables                                                                                 37,553               5,675


     An aged analysis of trade receivables, based on the goods delivery date, is as follows:


                                                                                                        30 June        31 December
                                                                                                           2011                 2010
                                                                                                        RMB’000            RMB’000
                                                                                                    (unaudited)


        Outstanding balances with ages:
           Within 30 days                                                                                 37,553               5,675


     The Group’s trading terms with its customers are mainly on credit. In view of the fact that the Group sells most of its products to
     a small number of customers, there is a high level of concentration of credit risk. The Group seeks to maintain strict control over
     its outstanding receivables to minimize credit risk. Trade receivables are non-interest-bearing.




30    China Kingstone Mining Holdings Limited   Interim Report 2011
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




11. Inventories
                                                                                                                30 June              31 December
                                                                                                                     2011                        2010
                                                                                                              RMB’000                      RMB’000
                                                                                                           (unaudited)


       At cost:
          Marble blocks and slabs                                                                                      405                           719
          Materials and supplies                                                                                    1,469                       1,120


                                                                                                                    1,874                       1,839




12. Trade Payables
                                                                                                                30 June              31 December
                                                                                                                     2011                        2010
                                                                                                              RMB’000                      RMB’000
                                                                                                           (unaudited)


       Trade payables                                                                                               4,832                            998


     An aged analysis of trade payables, based on the invoice date, is as follows:


                                                                                                                30 June              31 December
                                                                                                                     2011                        2010
                                                                                                              RMB’000                      RMB’000
                                                                                                           (unaudited)


       Outstanding balances with ages:
          Within 180 days                                                                                           4,679                            998
          180 days to 365 days                                                                                         153                            —


                                                                                                                    4,832                            998


     Trade payables are non-interest-bearing and are normally settled in 180 days.




                                                                                     China Kingstone Mining Holdings Limited   Interim Report 2011    31
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




13. Share Option Schemes
     Pre-IPO Share Option Scheme
     The Company has adopted the Pre-IPO Share Option Scheme on 24 January 2011 for the purpose of giving its employees,
     advisers, consultants and business partners an opportunity to have a personal stake in the Company and help motivate them to
     optimize their future performance and efficiency and/or to reward them for their past contributions, to attract and retain or
     otherwise maintain on-going relationships with such employees, advisers, consultants and business partners who are significant
     to and/or whose contributions are or will be beneficial to the performance, growth or success of the Company. Under the Pre-IPO
     Option Scheme, 40,000,000 share options were granted to two senior executives of the Company on 24 January 2011. The
     exercise price per share under the Pre-IPO Share Option Scheme is HK$0.6, being a discount of 73.33% to the global offering
     price. Those share options do not confer rights on the holders to dividends or to vote at shareholders’ meetings. No further
     options have been granted under the Pre-IPO Share Option Scheme after the Listing Date.


     The exercise price and exercise period of those share options under the Pre-IPO Share Option Scheme outstanding as at 30 June
     2011 (31 December 2010: not applicable) are as follows:


                                                                      Exercise price
        Number of options                                                 per share    Exercise period
        ’000                                                                    HK$


        40,000                                                                 0.60    From 18 March 2012 to 18 March 2016


     Accordingly, there was no exercise of those share options under the Pre-IPO Share Option Scheme during the Reporting Period.


     The fair value of those share options under the Pre-IPO Share Option Scheme granted during the Reporting Period was
     HK$64,400,000 (equivalent to approximately RMB54,460,504) or HK$1.61 each (equivalent to approximately RMB1.36 each) (six
     months ended 30 June 2010: not applicable) of which the Group recognized a share option expense of HK$24,130,787 (equivalent
     to approximately RMB20,406,000) during the Reporting Period (six months ended 30 June 2010: not applicable).


     The fair value of equity-settled share options granted during the Reporting Period was estimated as at the date of grant, using a
     binomial model, taking into account the terms and conditions upon which the options were granted. The following table lists the
     inputs to the model used:


        Dividend yield (%)                                                                                                        —
        Expected volatility (%)                                                                                               55.94
        Risk-free interest rate (%)                                                                                           1.784


     No other feature of the options granted under the Pre-IPO Share Option Scheme was incorporated into the measurement of fair
     value.


     At the end of the Reporting Period, the Company had 40,000,000 share options outstanding under the Pre-IPO Share Option
     Scheme. The exercise in full of the outstanding share options would, under the present capital structure of the Company, result in
     the issue of 40,000,000 additional shares of the Company and additional share capital of HK$4,000,000 and share premium of
     HK$20,000,000 (before issue expenses).




32    China Kingstone Mining Holdings Limited   Interim Report 2011
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




13. Share Option Schemes (continued)
     Pre-IPO Share Option Scheme (continued)
     At the date of approval of this interim condensed financial information, the Company had 40,000,000 share options outstanding
     under the Pre-IPO Share Option Scheme, which represented approximately 2% of the Company’s shares in issue as at that date.


     Share Option Scheme
     The Company has also adopted a share option scheme on 24 January 2011 (the “Share Option Scheme”) for the purpose of
     giving the eligible persons an opportunity to have a personal stake in the Company and help motivate them to optimize their future
     performance and efficiency to the Group and/or to reward them for their past contributions, to attract and retain or otherwise
     maintain on-going relationships with such eligible persons who are significant to and/or whose contributions are or will be
     beneficial to the performance, growth or success of the Group, and additionally in the case of executives, to enable the Group to
     attract and retain individuals with experience and ability and/or to reward them for their past contributions.


     The maximum number of shares which may be issued upon exercise of all options to be granted under the Share Option Scheme
     and any other schemes of the Group shall not in aggregate exceed 10% of the shares in issue as at the Listing Date (i.e. a
     maximum of 200,000,000 Shares). No option may be granted to any one person such that the total number of shares issued and
     to be issued upon exercise of options granted and to be granted to that person in any 12 month period exceeds 1% of the
     Company’s issued share capital from time to time.


     An option may be exercised in accordance with the terms of the Share Option Scheme at any time during a period as determined
     by the board of directors and not exceeding 10 years from the date of the grant. There is no minimum period for which an option
     must be held before it can be exercised. Participants of the Share Option Scheme are required to pay the Company HK$1.00
     upon acceptance of the grant on or before 28 days after the offer date. The subscription price in respect of any particular option
     is determined by the board of directors in its absolute discretion and shall not be less than whichever is the highest of:


     (i)     the nominal value of the shares;


     (ii)    the closing price of the shares as stated in the SEHK’s daily quotations sheet on the offer date; and


     (iii)   the average closing price of the shares as stated in the SEHK’s daily quotations sheets for the 5 business days (as defined
             in the Main Board Listing Rules Governing the Listing of Securities on the SEHK) immediately preceding the offer date.


     The Share Option Scheme shall be valid and effective for a period of 10 years from the Listing Date, after which no further options
     will be granted or offered.


     No option was granted under the Share Option Scheme for the Reporting Period.




                                                                                     China Kingstone Mining Holdings Limited   Interim Report 2011   33
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




14. Issued Capital
     Shares
                                                                                                    30 June          31 December
                                                                                                        2011                 2010
                                                                                                    HK$’000              HK$’000
                                                                                                (Unaudited)


        Authorized:
           5,000,000,000 (31 December 2010: 3,800,000) ordinary shares of HK$0.10 each              500,000                   380


        Issued and fully paid:
           2,000,000,000 (31 December 2010: 1) ordinary shares of HK$0.10 each                      200,000                     —


        Equivalent to RMB’000                                                                       168,348                     —


     During the Reporting Period, the movements in issued capital were as follows:


                                                                                                 Number of
                                                                                            shares in issue        Issued capital
                                                                                                                         RMB’000


        At 1 January 2011                                                                                  1                    —
        Capitalization of capital reserve (unaudited)                                         1,499,999,999               126,261
        Issuance of new shares (unaudited)                                                      500,000,000                42,087


        At 30 June 2011 (unaudited)                                                           2,000,000,000               168,348


     For the year ended 31 December 2010, the holding company has made additional capital injections aggregating to US$21 million.
     However, the Company has not issued new ordinary shares to the holding company and temporarily recorded the capital injection
     in the capital reserve. Pursuant to a written resolution of the sole shareholder on 24 January 2011, 1,499,999,999 shares at par
     value of HK$0.10 each were allotted and issued to the holders of shares on the register of members of the Company on 24
     January 2011 by way of capitalization of the capital reserve of the Company.




34    China Kingstone Mining Holdings Limited   Interim Report 2011
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




15. Commitments and Contingency
     (a) Capital commitments
           As at 30 June 2011, the Group had the following capital commitments principally for the construction and purchase of
           property, plant and equipment.


                                                                                                               30 June              31 December
                                                                                                                    2011                        2010
                                                                                                             RMB’000                      RMB’000
                                                                                                          (unaudited)


             Authorized, but not contracted for                                                                         —                            —
             Contracted, but not provided for                                                                      4,904                            404


     (b) Operating lease arrangements
           As lessee
           The Group leases certain land premises under operating lease arrangements, with leases negotiated for terms ranging from
           8 to 15 years with an option for renewal after that date, at which time all terms will be renegotiated.


           At each end of Reporting Period, the Group had total future minimum lease payments under non-cancellable operating
           leases falling due as follows:


                                                                                                               30 June              31 December
                                                                                                                    2011                        2010
                                                                                                             RMB’000                      RMB’000
                                                                                                          (unaudited)


             Within one year                                                                                          548                           132
             In the second to fifth years, inclusive                                                                  346                           366
             After five years                                                                                         478                           552


                                                                                                                   1,372                       1,050




16. Related Party Transactions
     During the six months ended 30 June 2011 and 2010, the Group had the following material transactions with related parties:


     (i)   Guangzhou Jiucheng Mining Co., Ltd., a related party controlled by the ultimate controlling shareholder of the Company,
           provided a counter-guarantee free of charge, to a third party guarantee company, which provided guarantee for the
           Group’s bank loans with a carrying amount of RMB4,000,000 as at 31 December 2009. The directors consider that the
           counter-guarantee provided by a related party was conducted based on terms more favorable than terms available from an
           independent third party. These guarantees were fully released in August 2010.




                                                                                    China Kingstone Mining Holdings Limited   Interim Report 2011    35
NOTES TO INTERIM CONDENSED FINANCIAL INFORMATION (continued)
For the six months ended 30 June 2011




16. Related Party Transactions (continued)
     (ii)    Mr. Huang Xianyou is the ultimate controlling shareholder of the Company. Pursuant to a financial support agreement
             entered into between Mr. Huang and Sichuan Jinshida on 14 March 2008, Mr. Huang agreed to provide interest-free
             funding with a cap amount of RMB100,000,000 to Sichuan Jinshida for its mining development for five years from 14 March
             2008. The directors consider that the interest-free financial support provided by the ultimate controlling shareholder was
             conducted based on terms more favorable than terms available from an independent third party. The above financial
             support agreement was terminated on 3 March 2011.



17 Events after the Reporting Period
     On 15 July 2011, the Group entered into an entrusted loan agreement with Guangdong Jiapeng Construction Co. Ltd. (“Guangdong
     Jiapeng Construction”) and the Industrial and Commercial Bank of China whereby the Group agreed to provide a loan of a
     principal amount of RMB35,000,000 with a maturity period of one year to Guangdong Jiapeng Construction. The loan is secured
     by certain accounts receivable of Guangdong Jiapeng Construction with a net carrying amount of approximately
     RMB194,000,000 and bears interest at a fixed rate of 7.216% per annum.


     On 26 July 2011, the Group acquired a 49% equity interest in Guangdong Jiapeng Construction, which is engaged in the design
     and construction of architecture decoration and curtain wall, at a cash consideration of RMB15,000,000, which was based on
     arm’s-length negotiations by references to Guangdong Jiapeng Construction’s owned construction licences and capabilities.


     On 29 August 2011, the Group acquired 100% equity interest in Beichuan Lida Mining Co. Ltd. (“Beichuan Lida”) for an aggregate
     consideration of RMB6,000,000, which is determined based on arm’s-length negotiations by references to recent transaction
     price of marble mines in the PRC similar to the marble mine in which Beichuan Lida is entitled to conduct mining.



18. Approval of the Interim Condensed Financial Information
     The interim condensed financial information was approved and authorized for issue by the board of directors on 30 August 2011.




36    China Kingstone Mining Holdings Limited   Interim Report 2011

				
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