13th Jan 2015 09:48
LONDON (Alliance News) - Fox Marble Holdings PLC saw its shares fall Tuesday after it said 2014 sales were lower than it had hoped because it took longer than expected to crystallise a number of potential transactions and offtakes.
However, it also said it is entering 2015 with a a strong order book after it converted a number of "material" contracts in the fourth quarter of last year.
The marble quarrying and finishing company with operations in Kosovo and the Balkans said it expects 2014 reported sales to be about EUR150,000, with much of the 2014 order book pushed into the first half of 2015. Confirmed orders so far for this year are a minimum of EUR150,000, it said.
An offtake deal it signed with Banyan in December provides for a minimum commitment of EUR1.5 million of block marble over the next 18 months, while a separate sales agency deal it signed with ZSC in the same month has a minimum quantity of 10,000 tonnes a month and any proceeds from this are not part of the confirmed orders for 2015.
Fox Marble also signed a deal with MGI in October last year, for a minimum quantity of 100 tonnes per month of Fox Marble's grey, red and breccia stones over a two year period. The company said it has now started shipments under this deal, with over 300 tonnes of marble shipped to date.
"Fox Marble anticipates that its order book will now grow at an increasing rate as existing and new distribution channels are developed further, sample delivery is executed and orders are sought. This process will be further aided by the fact the company now has a sizeable and varied inventory of marble for potential customers to review, a requisite for most buyers," it said.
In a trading statement, Fox Marble said it extracted over 14,000 tonnes of Marble in 2014, and is expecting to boost production this year.
"Despite unusually adverse weather in Kosovo during the year, Fox Marble has continued to successfully develop its quarries, which are now producing quality marble in large compact stone block sizes in Rahovec (grey, red and flora marble), Syrigane (Breccia Paradisea marble) and in the joint venture Sivec quarry site in Macedonia," it said.
"In order to meet increasing demand, Fox Marble has invested in further quarrying equipment in the year. The company has also procured two large chain saws to be deployed to the quarries to substantially increase production in 2015. The first of these will be delivered in January 2015," it added.
Chief Executive Chris Gilbert said 2015 will be an important year for the company, and he was positive about the outlook, noting that the company has expanded its reach from North America and Europe into China and South East Asia over the last year. It's now also targeting the Middle East and India.
"In what has remained a challenging environment for smaller listed companies, Fox Marble has entered 2015 in good shape. Whilst clearly the company would have preferred to have realised higher sales figures in 2014, the sales outlook for 2015 is much more robust," Gilbert said in the statement.
"We are encouraged by the strong finish to the year in terms of deferred income, signed offtakes and sales agency agreements. The planned completion of construction of the factory at the end of this quarter should further boost the economics and profitability of the company in 2015," the CEO added.
Still, its shares were down 4.6% at 18.60 pence in London on Tuesday morning.
The company added that cash reserves stood at EUR4.7 million at the end of 2014.
By Steve McGrath; [email protected]; @stevemcgrath1
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