SORB Sorbic Int

TIDMSORB

RNS Number : 4792W

Sorbic International PLC

10 November 2014

 
 Press Release    10 November 2014 
 

Sorbic International plc

("Sorbic" or the "Group")

Trading Update

Sorbic International plc (AIM:SORB), a leading sorbates producer in China, today provides the following update on trading ahead of the Company reporting its preliminary unaudited results for the year ended 30 September 2014 in December 2014.

The Board is pleased to report that the Group's operating subsidiary, Linyi Van Science and Technique Co., Ltd ("LVST") revenues for the year ended 30 September 2014 were RMB 143 million (GBP14.3 million)*, which is in line with expectations and similar to the prior year (2013: RMB 142 million, GBP14.6 million). During the second half of the year, LVST has witnessed increased fluctuations on the selling price of potassium sorbate. This has impacted on the LVST's overall operating margin for the full year, expected to be approximately 10% (2013: 13%), as well as, a reduction in LVST's operating EBITDA to RMB 11 million (GBP1.1 million)* (2013: RMB 16 million, GBP1.2 million). Market demand for Sorbic's products continues to be strong.

In the Interim Results statement issued on 23 June 2014, the Board reported that Mr Wang Yan Ting, the LVST's CEO had been reluctant to allow funds to be transferred out of China and that as a result, the Board was going to replace Mr Wang Yan Ting as Legal Representative. Following a Board meeting held in October 2014, Mr Wang Yan Ting has now agreed for such funds to be utilised for the repayment of the Loan Stock and discussions are now taking place to initiate the process. There are GBP2,688,000 of Convertible Loan Notes outstanding which are due to be redeemed by 31 December 2014, such a redemption will also include a 20% redemption premium as announced on 29 August 2014. Following the outcome from October's Board meeting, the Board has deferred the proposed Legal Representation changes.

In respect of the compensation negotiations in Inner Mongolia and the proposed Linyi relocation, discussions are progressing and the Board will provide a further update at the time of the Preliminary Results in December.

As at 30 September 2014, LVST had approximately RMB 70 million (GBP7 million)* in cash. Furthermore, in respect of the final audit, the preliminary audit work has not brought anything of significance for the Board's attention.

* During the year the GBP/RMB exchange rate has fluctuated between 9.7 and 10.6, accordingly an indicative average exchange rate of 10 has been used.

- Ends -

 
 For further information: 
 Sorbic International plc              Tel: +44 (0)7768 
                                                031 454 
 John McLean, Chairman      www.sorbicinternational.com 
 
 
 finnCap (Nomad) 
 Geoff Nash / Ben Thompson   Tel: +44 (0) 20 
                                   7220 0500 
 Hybridan LLP (Broker) 
 Claire Louise Noyce         Tel: +44 (0) 20 
                                   3713 4581 
 

Media enquiries:

 
 Abchurch Communications 
 Henry Harrison-Topham /             Tel: +44 (0)20 7398 
  Canace Wong                                       7714 
 canace.wong@abchurch-group.com   www.abchurch-group.com 
 

Notes to Editors: www.sorbicinternational.com

About Sorbic International plc

Sorbic International's principal activity is the production and sale of the food preservatives Sorbic Acid and Potassium Sorbate from its base in Linyi City, Shandong Province, Peoples Republic of China. Approximately half of Sorbic International's production is sold to overseas markets and half into the Chinese domestic market.

Sorbic Acid is a naturally occurring organic compound that is used in all kinds of foods for its anti-decomposition and anti-fungus function and also in grains, medicines, cosmetics, toothpaste, tobacco, animal feed, latex, paper-manufacturing and pesticides. Potassium Sorbate is used to inhibit moulds and yeasts in many foods, such as cheese, wine, yogurt, dried meat, baked goods, cosmetics and pharmaceuticals.

Sorbic International operates through its wholly owned subsidiary Linyi Van Science and Technique Co., Ltd ("LVST").

This information is provided by RNS

The company news service from the London Stock Exchange

END

TSTLLFLVLDLDIIS

Sorbic (LSE:SORB)
Historical Stock Chart
From May 2024 to Jun 2024

Sorbic (LSE:SORB)
Historical Stock Chart
From Jun 2023 to Jun 2024