TIDMCAMK
RNS Number : 7970S
Camkids Group PLC
29 September 2014
Press Release 29 September 2014
Camkids Group plc
("Camkids" or the "Group")
Interim results
Camkids Group plc (AIM: CAMK), a leading Chinese designer,
manufacturer and distributor of branded outdoor clothing, footwear
and equipment for children and teenagers, today announces a strong
set of interim results for the six months ended 30 June 2014.
Highlights
-- Revenues increased by 5.8% to RMB 458.8 million
(approximately GBP45.9 million) (H1-2013:
RMB 433.7 million) despite no longer manufacturing
OEM and ODM (which accounted for 4% of revenues
in H1-2013)
-- Gross profit rose by 5.5% to RMB 175.0 million
(approximately GBP17.5 million) (H1-2013:
RMB 165.9 million)
-- EBIT* increased by 3.5% to RMB 126.0 million
(approximately GBP12.6 million) (H1-2013:
RMB 121.7 million)
-- Net profit after tax rose by 0.5% to RMB 90.6
million (approximately GBP9.1 million) (H1-2013:
RMB 90.2 million)
-- Earnings per share of RMB 1.20 (approximately
12.0 pence) (H1-2013: RMB 1.20)
-- Net cash position 68.6% higher on 30 June
2014 at RMB 485.5 million (approximately GBP48.6
million) (30 June 2013: RMB 288.0 million)
representing 64 pence per share
-- Interim dividend of 2.4 pence per share in
scrip or 2.0 pence per share in cash (H1-2013:
2.3 pence per share) declared as part of the
Company's continuing commitment to paying
dividends (largest shareholder commits not
to increase his shareholding percentage through
scrip dividend)
* Earnings before interest and taxation ("EBIT") is a non IFRS
measure which the Group uses to assess its performance. It is
defined as earnings before interest and taxation.
The illustrative exchange rate as at 26 September 2014 is 1 GBP:
9.99 RMB.
Commenting on the interim results, Zhang Congming, Executive
Chairman of Camkids, said: "The Board is pleased with the strong
progress that the Group has made in the first half of 2014 and
Camkids continues to be well placed to offer consumers a high
quality product at a competitive price. Our core strategy of
focusing on the larger cities, municipalities and provinces remains
the same and is continuing to deliver solid trading results for us.
At the same time, however, by also increasing our focus on tier
three and tier four cities throughout China we believe that this
will help to negate some of the current challenges in our end
markets in terms of increased international competition and
pressure on pricing.
"The Board believes that our prospects are solid and we view the
future with confidence. As a management team, and on a personal
note as the Group's largest shareholder, we are committed to
Camkids' AIM listing and also to delivering attractive dividend
returns to shareholders."
- Ends -
For further information:
Camkids Group plc
Zhang Congming, Executive Chairman Tel: +44 (0) 20
7398 7714
Ng Pei Eng, Chief Finance Officer www.camkids-ir.com
Allenby Capital Limited
Alex Price / James Reeve / Nick Tel: +44 (0) 20
Athanas 3328 5656
a.price@allenbycapital.com www.allenbycapital.com
Media enquiries:
Abchurch Communications Limited
Henry Harrison-Topham / Canace Tel: +44 (0) 20
Wong 7398 7714
henry.ht@abchurch-group.com www.abchurch-group.com
Notes to editors
Camkids is a leading Chinese designer, manufacturer and
distributor of branded outdoor clothing, footwear and equipment for
children and teenagers.
Based in Fujian province in China, the Group focuses on
children's sportswear for outdoor activities, combining
functionality and innovation. The products are mid-range price
based, targeting mid and high range markets within China.
The three main product areas are:
-- Camkids outdoor clothing - all weather jackets, waterproof
trousers, shirts, tops and T-shirts, woollen sweaters, jeans,
trousers shorts and skirts;
-- Camkids footwear - hiking boots, outdoor leisure footwear, flip-flops, sandals and boots
-- Camkids equipment and accessories - telescopes, backpacks,
technical packs, tents, sleeping bags, headgear, caps, kettles,
headlights and torches.
The Group designs its entire product range and manufactures the
majority of its footwear. Outdoor apparel and accessories are
currently manufactured by third party OEMs.
Camkids' primary route to market for the sale of its products is
through its network of distributors. The Group has established an
extensive distribution network across 29 provinces, 4
municipalities and 5 autonomous regions within the PRC and is
successfully expanding its presence in tier 3 and tier 4 cities.
The Group has 17 authorised distributors operating over 1,285
franchised retail outlets, and is in the early stages of developing
an online e-commerce platform to target online retail.
Camkids has received a number of prestigious awards. In January
2014, the Group was recognised by Asia Brand Association as the Top
Brand in China for 2013 and one of the top ten Industry Customer
Satisfaction Brand's. The Group's Chairman also received one of
Brand China's 'People of the Year' awards.
For more information please visit www.camkids-ir.com.
Executive Chairman's statement
On behalf of Camkids Group, I am pleased to present the Group's
results for the six months ended 30 June 2014.
Overview
The Board confirms that Camkids has continued to make strong
progress during the first half of 2014. This is particularly
pleasing given the Board's decision to cease its OEM and ODM
manufacturing for international brands in H2-2013, a segment which
in H1-2013 accounted for 4% of Group revenues. This growth by the
Group has also been achieved despite a backdrop of a slowing
Chinese economy and in a sector (children's sportswear for outdoor
activities) in which a number of international brands have started
to provide larger discounts on their product ranges on sale in
China.
Camkids has anticipated and reacted well to these market
changes, in part by opening stores in tier three and four cities in
China. The Group continues to leverage on its competitive edge of
developing and distributing innovative branded outdoor clothing,
footwear and equipment for children and teenagers, which are priced
lower than those offered by the international brands operating in
China. Camkids provides consumers with high quality, functional
products whilst maintaining value for money and also playing to the
Chinese desire to buy from a well-recognised leading brand.
Financial results
The Board is pleased to report that revenue for the six months
ended 30 June 2014 increased by 5.8% to RMB 458.8 million (H1-2013:
RMB 433.7 million), with gross profit up by 5.5% to RMB 175.0
million (H1-2013: RMB 165.9 million). Earnings before interest and
taxation ("EBIT") increased by 3.5% to RMB 126.0 million (H1-2013:
RMB 121.7 million), whilst EPS remained steady at RMB 1.20
(H1-2013: RMB 1.20).
The Group's continues to be highly cash generative and, as at 30
June 2014, had a strong cash position of RMB 485.5 million which is
a 68.6% increase on the comparable period last year (H1-2013: RMB
288.0 million).
Sales and distribution
Whilst continuing to pursue its core strategy of focusing on the
larger cities, municipalities and provinces within the PRC, the
Group is also making strong progress with its strategic expansion
into tier three and tier four cities throughout China.
As outlined in the Group's trading update issued at the end of
July 2014, the Group had a total of 1,336 retail stores as at 30
June 2014, an increase of 51 retail stores from 31 December 2013
(H1-2013: 1,100 retail stores). All of the Camkids stores are
currently undergoing a planned refit to bring them into line with
the new Camkids branding and, once this is complete, the Group will
commence with its advertising and marketing plan which will start
with the launch of a new TV advertising campaign to attract new
customers. In advance of this new promotional push, the Group has
engaged a team of trainers to train all of Camkids distributors and
their retailers on Camkid's corporate culture, sales skills,
product knowledge, product display and building its brand with its
customers.
Since its launch in August 2013, the Group has continued to
develop its e-commerce business during the period under review and
Camkid's currently has over 200 product lines on offer through its
existing online partners of Taobao and JD.com. The Group is in the
midst of preparing for Chinese Double 11 day, a national online
shopping carnival scheduled for 11 November 2014, by placing more
online advertising across relevant websites. Double 11 day draws in
millions of Chinese shoppers looking for discounts and they spend
significant sums on China's ecommerce sites during that one day of
discounts. Whilst still in its infancy, the Board is pleased with
the progress the e-commerce division is making to the Group (in
H1-2014 it contributed 0.9% of Group revenue) and is confident that
it has significant potential for the Group.
As announced on 26 February 2014, Camkids held its Autumn /
Winter 2014 sales fair between 20 and 24 February 2014 which was
also attended by the Company's nominated adviser and broker,
Allenby Capital Limited. This was the first time the fair was held
in Beijing, as it had previously been held at the Group's
manufacturing facility in Fujian province. The fair in Beijing was
held at a time to coincide with an important industry trade show,
the ISPO Beijing 2014 China Kids Outdoor Development Forum, at
which Camkids was a major sponsor and presenter
(http://issuu.com/messemuenchen/docs/visitor_planner_updated).
Other brands presenting were Adidas, Li-Ning Adventure, Nordica and
RAB.
Research and development
The Group continues to focus on and invest heavily in research
and development and it remains an important part of the Group's
strategy of translating innovative ideas into product sales.
Recently, Camkids has formed a strategic collaboration with a
design school in China, where the students will design products for
the Group's R&D department.
Manufacturing facility
All five of Camkid's production lines have been operating at
over 85% capacity as the Group continues to see demand for its
products.
The local municipality has now commenced the process of widening
the main road adjacent to Camkids' premises. As previously
announced, this road widening does not affect any of the Group's
production lines, although it does impact staff accommodation in
the short-term and the overall size of the existing site in the
long-term. The Group has therefore rented a staff dormitory for
those employees affected by the road widening which is in walking
distance of the Camkids production facility and, as such,
production has been unaffected by these road works.
The Group has also decided to purchase an additional piece of
land not far away from the existing premises in order to develop
the Group's new facilities. This process is still ongoing and
whilst the Group has now identified a site, which is located near
to Jinjiang train station, a contract has not yet been signed. The
Board remains hopeful that negotiations will soon complete and
construction will commence in early 2015 with the new facility
being ready by 2016, at which point other Group operations will
also migrate to the new headquarters.
This move will also allow the Group to offer prime accommodation
to staff, which the Board believes will enable the Group to attract
and retain highly skilled staff. As outlined in the Final Results
statement issued in April 2014, the financing requirements for the
new facility will comfortably covered by the Group's net cash
reserves, which as at 30 June 2014 stood at RMB 485 million.
Dividend
The Board is also pleased to announce that the Group intends to
pay an interim dividend of 2.4 pence per share (H1-2013: 2.3 pence
share). Shareholders will have an option to receive either 2.4
pence per share in shares (scrip option), or 2.0 pence in cash. The
dividend timetable will be announced shortly.
Zhang Congming, Camkids' Chairman, considers that the current
share price of the Company is fundamentally undervalued. However,
at the same time, he understands the concerns of investors in
relation to an increase of his own shareholding. Accordingly, Mr
Zhang will take as much of his own dividend under the scrip option
but only in so far as this does not increase his percentage
shareholding which is currently 66.91% of the Company's issued
share capital. He will receive the remainder of his dividend in
cash.
The Board remains committed to a progressive dividend policy and
to delivering attractive dividend returns to shareholders going
forward.
Media comment on Chinese AIM companies
The Board is aware of a number of recent media articles written
on Chinese companies currently listed on AIM. These have mainly
been in response to fluctuations in dividend payments and concerns
on the commitment of those companies to AIM. The Board believes
that this media environment has had a negative impact on the
Group's share price.
The Board notes that Camkids is different in terms of product
range, target market and competitors profile from these companies
and considers that it should be considered on its own strong
fundamental. Camkids, as the leading brand in the children outdoor
segment in China, is quite different from companies operating in
the much more competitive performance shoe market, and adult
market. In essence, Camkids is an aspirational lifestyle brand
dedicated to children.
Camkids remains committed to its AIM listing and the executive
management team of the Company will be visiting with institutional
investors in London during the week of 6 October 2014.
Current trading
Since 30 June 2014, Camkids has remained active in its
promotional activities including being one of the main sponsors and
presenters at the Asia Outdoor Trade Show in Nanjing in July
(www.outdoor-show.com.cn/downloads/2014AO%20show%20guide%20web.pdf).
Other presenters included Northface, Gore Tex, Asics and Columbia.
In September 2014, Camkids made a charitable donation to schools in
Yunnan province which had been affected by the earthquake that
happened there in August 2014.
On 4 August 2014, the Group held its sales fair in Jinjiang City
showcasing to distributors the Spring / Summer collection, which in
terms of design and colour incorporated more outdoor inspiration.
The Board is pleased to report that the initial feedback on the
collection from distributors has been positive. The Group expects
to finalise the order book in early October 2014.
The Board is pleased that the hard work and commitment of the
Group's employees has been recognised externally and in early
September 2014 it was announced that Camkids had been included in
the rankings as one of "The Top 500 Asia Brands". In addition to
this prestigious award, the Group's Chairman has also been honoured
as one of the "Top ten new brand creators in Chinese industry".
Outlook
The Board is pleased with the good progress that the Group has
made in the first half of 2014 and Camkids continues to be well
placed to offer consumers a high quality product at a competitive
price.
Our core strategy of focusing on the larger cities,
municipalities and provinces remains the same and is continuing to
deliver solid trading results for us. At the same time, however, by
also increasing our focus on tier three and tier four cities
throughout China the Board believes that this will help to negate
some of the current challenges in our end markets in terms of
increased international competition and pressure on pricing.
The Board believes that our prospects are solid and we view the
future with confidence. As a management team, and on a personal
note as the Group's largest shareholder, we are committed to
Camkid's AIM listing and also to delivering attractive dividend
returns to shareholders.
Zhang Congming
Executive Chairman
26 September 2014
Financial Review
Operating results
Revenue growth for the period has been driven by:
-- an ability to develop innovative products that appeal to consumers;
-- a marketing strategy that strengthen and enhance the brand; and
-- an increase in number of stores and expansion into tier 3 and
tier 4 cities throughout China. As at 30 June 2014 Number of
stores: 1,336 (As at 30 June 2013: 1,100);
Revenue increased by 5.8% to RMB 458.8 million (H1-2013: RMB
433.7 million) with gross profit increasing by 5.5% to RMB 175.0
million (H1-2013: RMB 165.9 million). Operating profit before tax
increased by 3.7% to RMB 126.4 million (H1-2013: RMB 121.9
million).
The breakdown of proportion of the Group's revenue and gross
profit margin by products group for H1-2014 and H1-2013 is as
follows:
H1-2014 H1-2013
Product group % of Average % of Average
Group gross Group gross
total profit total profit
revenue margin revenue margin
--------- -------- --------- --------
Camkids clothing 52.9% 37.0% 51.4% 38.1%
Camkids footwear 38.2% 38.1% 35.8% 38.4%
Camkids accessories 8.9% 45.3% 8.9% 45.4%
OEM and ODM
footwear 0.0% 0.0% 3.9% 23.1%
--------- -------- --------- --------
100.0% 38.1% 100.0% 38.2%
--------- -------- --------- --------
The Group's top five distributors contributed 41.4% of total
revenue for the period (H1-2013: 49.1%).
Expenses
Selling and distribution expenses for the period under review
increased by 14.4%, approximately 5.8% of the Group's total revenue
(H1-2013: 5.3%). This is largely attributable to increased
advertising costs as the Group increased its promotional activities
and sponsored a number of local events to raise the Group's
profile.
Additionally, the costs incurred were associated with the fit
out of new and existing stores, as well as increased staff for the
e-commerce department. During the period, the Group opened 95 new
retail stores and renovated 129 of its existing stores.
Administrative expenses as a proportion of revenue were static
at approximately 4.9% (H1-2013: 4.9%), and were largely
attributable to participation in trade shows. During the period,
the Group participated in trade shows ISPO Beijing 2014 and The
16(th) Jinjiang Footwear (International) Exposition, China.
R&D expenses also increased during the period in order to
increase in headcount and some salary adjustments that were
required for staff retention.
Despite these expenses, the Group's operating profit before tax
increased by 3.7% to RMB 126.4 million resulting in an operating
profit before tax margin of 28.1% (H1-2013: 29.4%). Camkids will
continue to design and develop more innovative and high quality
products to seek to ensure the Group maintains its profit
margins.
Taxation
Camkids' PRC operating subsidiary is subject to an income tax
rate of 25%, which is in accordance with the PRC Enterprise Income
Tax Law that came into effect on 1 January 2008. The Group's
operating profit after tax increased to RMB 92.4million (H1-2013:
RMB 90.2 million), an increase of 2.5%.
Balance sheet
Camkids has maintained a strong balance sheet during the period,
with a net cash position of RMB 485.5 million as at 30 June 2014
(31 December 2013: RMB 313.4 million).
Net assets increased to RMB 806.1 million, an increase from RMB
711.9 million at 31 December 2013. This is mainly attributable to
the net profit recorded during the period. Trade receivables
decreased by RMB 142.2 million which is attributable to the sales
seasonality where the Spring/Summer sales are lower than
Autumn/Winter sales.
The Group's current payment terms remain at 120 days, all the
debts are within the credit terms and there were no bad debts
during the period.
Earnings per share
The earnings per share (basic and diluted) for H1-2014 based on
the weighted average number of ordinary shares outstanding for the
period ended 30 June 2014 of 75.4 million was approximately 12.0
pence (RMB 1.20), based on the exchange rate of 1 GBP: 9.99164 RMB
as at 26 September 2014.
Ng Pei Eng
Chief Finance Officer
26 September 2014
Consolidated statement of comprehensive income
Six months ended 30June 2014
Notes Unaudited Unaudited Audited
Six months Six months Year
to to ended
30 June 30 June 31 December
2014 2013 2013
RMB'000 RMB'000 RMB'000
Revenue 3 458,847 433,773 1,083,261
Cost of sales (283,840) (267,866) (681,630)
----------- ----------- ------------
Gross profit 175,007 165,907 401,631
Other income - 14 32
Selling and distribution
expenses (26,418) (23,090) (50,980)
Administrative
expenses (22,633) (21,135) (46,590)
----------- ----------- ------------
Operating profit 125,956 121,696 304,093
Finance income 719 413 1,085
Finance cost (238) (242) (480)
----------- ----------- ------------
Profit on ordinary
activities before
taxation 126,437 121,867 304,698
Income tax expense (35,806) (31,714) (78,560)
----------- ----------- ------------
Profit after
taxation 90,631 90,153 226,138
----------- ----------- ------------
Profit for the period 90,631 90,153 226,138
Other comprehensive
income - - -
----------- ----------- ------------
Total comprehensive
income attributable
to owners of the
parent 90,631 90,153 226,138
=========== =========== ============
Earnings per share
Basic and diluted
(RMB) 5 1.20 1.20 3.00
Consolidated statement of financial position
for the six months ended 30 June 2014
Notes Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 December
2014 2013 2013
RMB'000 RMB'000 RMB'000
Non-current assets
Land use rights 9,624 9,867 9,745
Property, plant
and equipment 36,494 38,450 37,446
---------- ------------
46,118 48,317 47,191
---------- ---------- ------------
Current assets
Inventories 7 30,967 24,810 31,790
Trade and other
receivables 8 333,417 317,143 475,595
Cash and bank
balances 491,505 294,015 319,432
---------- ------------
855,889 635,968 826,817
---------- ---------- ------------
Total assets 902,007 684,285 874,008
========== ========== ============
Current liabilities
Trade and other
payables 77,131 71,542 132,246
Short term borrowings 6,000 6,000 6,000
Income tax payable 12,799 11,737 23,870
---------- ---------- ------------
95,930 89,279 162,116
Non-current liabilities
Deferred tax 3,553 - -
---------- ---------- ------------
3,553 - -
Equity
Stated capital
account 61,499 61,499 61,499
Statutory reserves 43,169 23,545 43,169
Translation reserve 9,051 9,051 9,051
Accumulated profits 688,805 500,911 598,173
---------- ------------
802,524 595,006 711,892
Total equity and
liabilities 902,007 684,285 874,008
========== ========== ============
Consolidated statement of changes in equity
for the six months ended 30 June 2014
Stated
capital Translation Accumulated Statutory
account reserve profits reserve Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
As at 1 January
2014 61,499 9,051 598,173 43,169 711,892
Comprehensive
income
Profit for
the period - - 90,632 - 90,632
Other comprehensive
income
Movements
in foreign - - - - -
exchange reserve
--------- -------------- -------------- ------------ ----------
Total comprehensive
income 61,499 9,051 688,805 43,169 802,524
--------- -------------- -------------- ------------ ----------
As at 30 June
2014 61,499 9,051 688,805 43,169 802,524
--------- -------------- -------------- ------------ ----------
As at 1 January
2013 61,499 9,051 410,758 23,545 504,853
Comprehensive
income
Profit for
the period - - 90,153 - 90,153
Other comprehensive
income
Movements
in foreign - - - - -
exchange reserve
Total comprehensive
income 61,499 9,051 500,911 23,545 595,006
--------- -------------- -------------- ------------ ----------
As at 30 June
2013 61,499 9,051 500,911 23,545 595,006
--------- -------------- -------------- ------------ ----------
As at 1 January
2013 61,499 9,051 410,758 23,545 504,853
Comprehensive
income
Profit for
the year - - 226,138 - 226,138
Other comprehensive
income
Movements
in foreign - - - - -
exchange reserve
--------- -------- ----------- --------- ----------
Total comprehensive
income 61,499 9,051 636,896 23,545 730,991
Transaction
with owners
Dividends
paid (19,100) (19,100)
--------- -------- ----------- --------- ----------
Total transaction
with owners - - (19,100) - (19,100)
--------- -------- ----------- --------- ----------
Transfer to
statutory
reserve - - (19,624) 19,624 -
As at 31 December
2013 61,499 9,051 598,173 43,169 711,892
--------- -------- ----------- --------- ----------
Consolidated statement of cash flows
for the six months ended 30 June 2014
Unaudited Unaudited
Six months Six months Audited
to to Year ended
30 June 30 June 31 December
2014 2013 2013
RMB'000 RMB'000 RMB'000
Cash flow from operating
activities
Profit for the period
before taxation 126,437 121,867 304,698
Adjustment for:
Loss on disposal of
property, plant and
equipment 8 46 47
Depreciation of property,
plant and equipment 2,090 1,815 3,861
Amortisation charge 121 121 243
Interest income (719) (413) (1,085)
Interest expense 238 242 480
------------ ------------ ------------
Operating cash flows
before movements in
working capital 128,175 123,678 308,244
(Increase)/decrease
in inventories 823 209 (6,772)
(Increase)/decrease
in trade and other receivables 142,177 74,802 (83,648)
Increase/(decrease)
in trade and other payables (55,114) (62,566) (1,862)
------------ ------------ ------------
Cash generated from
operating activities 216,061 136,123 215,962
Interest received 719 413 1,085
Interest paid (238) (242) (480)
Income tax paid (43,323) (40,500) (75,213)
------------ ------------ ------------
Net cash generated from
operating activities 173,219 95,794 141,354
Cash flow from investing
activities
Proceeds from disposal
of property, plant and
equipment 8 118 120
Acquisition of property,
plant and equipment (1,154) (4,385) (5,431)
------------ ------------ ------------
Net cash used in investing
activities (1,146) (4,267) (5,311)
Cash flow from financing
activities
Issue of new shares - 65,714 65,714
New bank loans obtained 6,000 6,000 6,000
Repayment of bank borrowings (6,000) (6,000) (6,000)
Repayment of shareholders
loan - - (19,100)
Fixed deposit pledged
for security of bills
payable - 5,200 5,200
------------ ------------ ------------
Net cash used in financing
activities - 70,914 51,814
Net increase in cash
& cash equivalents 172,073 162,441 187,857
Cash and equivalent
at beginning of period 319,432 131,574 131,574
------------ ------------ ------------
Cash and cash equivalent
at end of period 491,505 294,015 319,432
------------ ------------ ------------
Notes to the financial information
1. General information
Camkids Group plc ("the Company" or "Camkids") was incorporated
and registered as a limited liability nil par value company under
the laws of Jersey on the 10 August 2012 and with company number
111245. The Company's registered office is at 13-14 Esplanade, St
Helier, Jersey JE1 1BD. The Company is domiciled in Jersey.
This financial information is for the Company and subsidiary
undertakings.
Camkids Group plc is a holding company for Camkids (HK) Holding
Limited and Jinjiang Mingwei Shoes & Garments Co., Ltd ("Ming
Wei") (together, the "Group").
The principal place of business of the Group is in the People's
Republic of China ("PRC").
This interim financial information is unaudited and has not been
reviewed by the auditors under International Standard on Review
Engagements (UK and Ireland) 2410.
This consolidated interim financial information has been
approved for issue by the board of directors on 26 September
2014.
2. Accounting policies
The June 2014 interim consolidated financial information has
been prepared in accordance with the principles of International
Financial Reporting Standards as adopted by the European Union
("IFRS") issued by the International Accounting Standards Board
("IASB"), including related Interpretations issued by the
International Financial Reporting Interpretations Committee
("IFRIC"). They do not include all of the information required for
full annual financial statements, and should be read in conjunction
with the consolidated financial statements of the Group for the
year ended 31 December 2013. All principal accounting policies of
the Group are consistent with those set out in the Annual Report
and Accounts for 2013, have been consistently applied to all
periods presented and are consistent with those which the Group
expects to apply in its forthcoming financial statements for the
year ending 31 December 2014.
The financial information is measured and presented in the
currency of the primary economic environment in which the key
trading entity operates (its functional currency). The financial
information of the Group is presented in Chinese Renminbi ("RMB").
The functional currency of Ming Wei is also Chinese Renminbi
("RMB"). All financial information presented in RMB has been
recorded to the nearest thousand.
Intra-group balances and transactions and any income and
expenses arising from intra-group transactions are eliminated on
consolidation. Unrealised gains and losses arising from
transactions with associates and joint ventures are eliminated
against the investment to the extent of the Group's interest in the
investee.
The financial information of the subsidiary is prepared for the
same reporting period as that of Group, using consistent accounting
policies.
3. Business segments
The Group applies IFRS 8 Operating segments. Per IFRS 8,
operating segments are based on internal reports about components
of the Group, which are regularly reviewed and used by the Board of
directors being the Chief Operating Decision Maker ("CODM") for
strategic decision making and resource allocation, in order to
allocate resources to the segment and to assess its performance.
The Group's reportable operating segments are as follows:
1) Design, manufacture and sale of outdoor footwear, apparels
and accessories under the "Camkids" brand to distributors in the
PRC.
2) Manufacture and sale of footwear under the terms of OEM
agreement entered with the PRC export intermediaries.
The CODM monitors the operating results of each segment for the
purpose of performance assessments and making decisions on resource
allocation. Performance is based on assessing progress made on
projects and the management of resources used. Segment assets and
liabilities are presented inclusive of inter-segment balances.
Geographical segments
As the business of the Group is principally engaged in the PRC,
no reporting by geographical location of operation is
presented.
The segment information provided to management for the
reportable segments for the six month ended 30 June 2014 is as
follows:
Six month ended 30 June 2014
Distribution sales OEM sales
Footwear Apparels Accessories Footwear Unallocated Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Revenue and results:
Revenue from external
distributors 175,220 242,682 40,945 - - 458,847
Segment profit 66,761 89,685 18,561 - - 175,007
Unallocated other
income and expenses (48,570) (48,570)
Profit before
tax 126,437
-----------
Assets and liabilities
Assets 27,252 47,481 12,066 - 815,208 902,007
Liabilities 27,319 31,456 4,027 - 34,905 97,707
Depreciation and
additions
Depreciation 475 662 465 - - 1,602
Additions to property,
plant and equipment 244 340 239 - - 823
Revenue from the Group's top three distributors represent
approximately RMB 124.5 million (or 27.1 per cent) of the total
revenue for the six month ended 30 June 2014, comprising RMB 44.0
million (9.6 per cent), RMB 43.2 million (9.4 per cent) and RMB
37.2million (8.1 per cent), respectively.
The segment information provided to management for the
reportable segments for the year ended 31 December 2013 is as
follows:
Year ended 31 December 2013
Distribution sales OEM sales
Footwear Apparels Accessories Footwear Unallocated Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Revenue and results:
Revenue from
external distributors 337,079 625,118 91,886 29,178 - 1,083,261
Segment profit 127,548 226,790 40,502 6,791 - 401,631
Unallocated other
income and expenses (96,933) (96,933)
Profit before
tax 304,698
------------
Assets and liabilities
Assets 30,583 42,652 13,470 906 786,397 874,008
Liabilities 27,266 73,515 8,960 - 52,375 162,116
Depreciation
and additions
Depreciation 809 1,231 1,009 86 - 3,135
Additions to
property, plant
and equipment 677 1,029 843 72 - 2,621
Revenue from the Group's top three distributors represent
approximately RMB 345.7 million (or 31.9 per cent) of the total
revenue for the year ended 31 December 2013, comprising RMB 120.2
million (11.1per cent), RMB 119.4 million (11.0per cent) and RMB
106.1 million (9.8per cent), respectively.
The segment information provided to management for the
reportable segments for the six month ended 30 June 2013 is as
follows:
Six month ended 30 June 2013
Distribution sales OEM
sales
Footwear Apparels Accessories Footwear Unallocated Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Revenue
and results:
Revenue
from external
distributors 155,296 222,835 38,528 17,114 - 433,773
Segment
profit 59,658 84,811 17,483 3,955 - 165,907
Unallocated
other
income
and expenses (44,040) (44,040)
Profit
before
tax 121,867
-----------
Assets
and liabilities
Assets 133,261 193,382 38,415 9,232 309,996 684,286
Liabilities 22,196 25,132 3,180 4,164 34,607 89,279
Depreciation
and additions
Depreciation 415 615 446 58 - 1,535
Additions
to property,
plant
and equipment 673 997 723 94 - 2,487
Revenue from the Group's top three distributors represent
approximately RMB 133.7 million (or 30.8 per cent) of the total
revenue for the six month ended 30 June 2013, comprising RMB 46.8
million (10.8 per cent), RMB 45.0 million (10.4 per cent) and RMB
41.8 million (9.6 per cent), respectively.
4. Taxation
6 months 6 months Year ended
to to 31 Dec
30 Jun 30 Jun 2013
2014 2013 RMB'000
RMB'000 RMB'000
--------- --------- -----------
Current income
tax 32,252 31,714 78,560
Deferred taxation 3,553 - -
Income tax expense 35,805 31,714 78,560
--------- --------- -----------
The taxation charge for the six month ended 30 June 2014 has
been based on the estimated effective rate of 25% in China.
5. Earnings per share
The calculation for basic and diluted earnings per share for the
relevant period was based on the profit attributable to ordinary
shareholders for the six months ended 30 June 2014, 30 June 2013,
and the year ended 31 December 2013 of RMB 94,185,000 (30 June
2013: RMB 90,153,000; 31 December 2013: RMB 226,138,000). The
weighted average number of ordinary shares outstanding during the
six months ended 30 June 2013, 30 June 2012, and the year ended 31
December 2012 and the effect of the potentially dilutive ordinary
shares to be issued (of which there are none) are shown below.
6 months 6 months Year ended
to to 31 Dec
30 Jun 30 Jun 2013
2014 2013 RMB'000
RMB'000 RMB'000
--------- --------- -----------
Profit attributable
to equity holders
(RMB'000) 90,631 90,153 226,138
Weighted average
number of shares
('000) 75,428 75,428 75,428
Basic and diluted
per share (RMB) 1.20 1.20 3.00
6. Dividend
The directors have declared and paid a final dividend of 2.0
pence per share, with scrip dividend alternative in respect of the
year ended 31 December 2013. The dividend payment date and the
first day of dealing in the new Ordinary Shares was on 11 July
2014.
7. Inventories
As at
---------------------------------
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2014 2013 2013
RMB'000 RMB'000 RMB'000
Raw material 4,473 3,818 1,903
Work in progress 5,191 4,302 5,268
Finished goods 21,303 16,690 24,619
---------- ---------- ---------
30,967 24,810 31,790
---------- ---------- ---------
8. Trade and other receivables
As at
---------------------------------
Unaudited Unaudited Audited
30 Jun 30 Jun 31 Dec
2014 2013 2013
RMB'000 RMB'000 RMB'000
Trade receivables 308,867 292,190 452,506
Advance payments
to suppliers 23,700 22,900 22,900
Other receivables 850 2,053 189
---------- ---------- ---------
333,417 317,143 475,595
---------- ---------- ---------
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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