Prince Catering and Management (Overseas) Limited
(the “Company” or “Prince”)
INTERIM RESULTS FOR PERIOD ENDED 30 JUNE 2006
Chief Executive’s Statement
Highlights
It is my pleasure to present the inaugural set of interim results on behalf of Prince, the first China-based catering service company trading on AIM. The directors believe that the Company’s admission to AIM has raised its profile and positioned it to build on its existing reputation and expand its market share of the luxury Cantonese restaurant market in the People’s Republic of China. Although the results for the period have been impacted by a one-off change in our tax position and slippage in the signing of expected contracts, we are encouraged by a sound performance in sales from our Group owned restaurants.
Overview
At present Prince and its subsidiaries (the “Group”) operate one restaurant through a wholly owned subsidiary, one restaurant through a 51% owned subsidiary and 11 others as managed restaurants. A further managed restaurant opened in Xi’an in September 2006 following the end of the period under review. In addition, the Group operates a hotel and a separate health club under management contracts, with a further hotel expected to open in Beijing later this year.
Background
Since the first Prince restaurant was established in Xi’an in 2002 the Group has grown rapidly and, as set out above, now manages 14 restaurants, all branded with the Prince name. Discussions are currently under way with potential investors for a further 3 restaurants, although at this stage the Directors do not know how many of the potential opportunities will be realised or exactly how many new restaurants will be opened.
Of the Group’s two main operating streams, the Directors believe that the management contract concept will become the main source of new income for the Group and is the area where the management will focus much of their efforts. The management contract concept has a higher profit margin and lower capital requirements than the Group owned restaurant concept as third party investors usually own the restaurant and are responsible for all associated costs, paying only a set fee to the Group to operate that restaurant on its behalf. Usually, but not always, the fee paid by the third party investor to the Group takes the form of an initial contract fee (in the region of £100,000) and monthly management fees, usually calculated as a percentage of restaurant turnover.
The income and fees received by the Group depend significantly on new restaurant openings. During the period under review the Group executed fewer management contracts for new restaurants than in the same 6 months’ period of 2005. This has affected the Group’s trading performance for that 6 months’ period.
Results
|
|
6 months ended |
6 months ended |
|
|
30/06/06 |
30/06/05 |
|
|
£'000 |
£'000 |
|
|
|
|
|
Turnover |
3,373 |
3,591 |
|
Profit before tax |
593 |
893 |
|
|
|
|
Turnover in the period under review decreased to £3,373,000, compared with the same period in 2005 (2005: £3,591,000). More specifically, the turnover generated from the two Group owned restaurants increased to £2,987,000 (2005: £2,937,000) whilst the turnover generated from managed restaurants, for the reasons set out above, decreased to £386,000 (2005: £654,000) . Overall, the profit before tax for the period under review decreased to £593,000 against the same period in 2005 (2005: £893,000 ).
In addition, profit after tax (not shown above) decreased to £481,000 (2005: £807,000) impacted by the expiry of a tax free period for one of the owned restaurants at the end of 2005.
Outlook
The second half of the year has started positively with the signing of a further management contract and the opening of the Xi’an Kingfar restaurant for which the management contract was executed earlier this year. Following various conversations with potential investors in the management contract concept, the Directors are confident for the future.
Mr Guangfan Mai
For more information please contact:
David Youngman, WH Ireland Limited +44 161 832 2174
|
CONSOLIDATED INCOME STATEMENT | ||||||||
|
Interim results for the six months to 30 June 2006 |
Notes |
6 months to 30 Jun 2006 |
6 months to 30 Jun 2005 |
Year to 31 Dec 2005 | ||||
|
|
|
(Unaudited) £’000 |
(Unaudited) £’000 |
(Audited) £’000 | ||||
|
Revenue |
|
3,373 |
3,591 |
7,296 | ||||
|
Cost of sales |
|
(1,211) |
(1,235) |
(2,502) | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
|
|
|
|
| ||||
|
Gross profit |
|
2,162 |
2,356 |
4,794 | ||||
|
Other operating income |
|
0 |
0 |
1 | ||||
|
Selling and distribution expenses |
|
(1,518) |
(1,418) |
(2,793) | ||||
|
Administrative expenses
|
|
(51) |
(45) |
(319) | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Profit from operations |
|
593
|
893 |
1,683 | ||||
|
Investment income |
|
0 |
0 |
2 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Profit before income tax |
|
593 |
893 |
1,685 | ||||
|
Income tax |
|
(112) |
(86) |
(182) | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Net profit for the period |
|
481 |
807 |
1,503 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Attributable to |
|
|
|
| ||||
|
Equity holders of the parent
|
|
408 |
742 |
1,353 | ||||
|
Minority interest
|
|
73 |
65 |
150 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
All amounts relate to continuing activities. No meaningful Earnings per Share calculation is possible as the group structure and AIM flotation occurred since June 2006 | ||||||||
|
CONSOLIDATED BALANCE SHEET | ||||||||
|
At 30 June 2006 |
Notes |
As at 30 June 06 |
As at 30 Jun 05 |
As at 31 Dec 05 | ||||
|
|
|
(Unaudited) £’000 |
(Unaudited) £’000 |
(Audited) £’000 | ||||
|
Non-current assets |
|
|
|
| ||||
|
Property, plant and equipment |
|
1,617 |
1,797 |
1,908 | ||||
|
Intangible assets |
|
30 |
52 |
44 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Total non-current assets |
|
1,647 |
1,849 |
1,952 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Current assets |
|
|
|
| ||||
|
Deferred tax assets |
|
4 |
25 |
14 | ||||
|
Inventories |
|
219 |
257 |
289 | ||||
|
Trade and other receivables |
|
1,743 |
2,460 |
1,922 | ||||
|
Cash and cash equivalents |
|
803 |
730 |
592 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Total current assets |
|
2,769 |
3,472 |
2,817 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Total assets |
|
4,416 |
5,321 |
4,769 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Equity and liabilities |
|
|
|
| ||||
|
Combined capital and reserves |
|
|
|
| ||||
|
Paid-up capital |
|
1,912 |
1,877 |
1,894 | ||||
|
Other reserves |
|
305 |
215 |
276 | ||||
|
Foreign currency translation reserve |
|
90 |
(44) |
287 | ||||
|
Retained earnings |
|
77 |
866 |
(162) | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
|
|
2,384 |
2,914 |
2,295 | ||||
|
Minority interest |
|
580 |
543 |
675 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Total Equity |
|
2,964 |
3,457 |
2,970 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Current liabilities |
|
|
|
| ||||
|
Trade and other payables |
|
1,315 |
1,748 |
1,641 | ||||
|
Dividends payable |
|
48 |
0 |
124 | ||||
|
Income tax payable |
|
71 |
111 |
29 | ||||
|
Deferred tax liability |
|
18 |
5 |
5 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Total liabilities |
|
1,452 |
1,864 |
1,799 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
Total equity and liabilities |
|
4,416 |
5,321 |
4,769 | ||||
|
|
|
_______ |
_______ |
_______ | ||||
|
COMBINED STATEMENTS OF CHANGES IN EQUITY | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||