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Interim Results

30th Sep 2015 07:00

RNS Number : 6372A

RM2 International SA

30 September 2015

RM2 International S.A.

Interim Results

RM2 International S.A. ("RM2" or the "Company"), the vertically-integrated innovator in pallet development, manufacture, supply and management, today announces its unaudited results for the six months ended 30 June 2015.

Financial Highlights

·	Revenues for the first six months of 2015 of US$1.77 million (H1 2014: US$0.78 million)
·	Loss after tax for the period of US$25.4 million (H1 2014: US$22.2 million)
·	Debt free with cash and cash equivalents of US$35.9 million at 30 June 2015
·	Production is expected to be not less than 2.5 million pallets in 2016, with a production run rate at the end of the fourth quarter of 2016 of c. 300,000 pallets per month

Operational highlights

·	Senior level customer engagement increased
·	New proposals for roll outs under negotiation
·	Signed contracts with 15 customers including new contracts in September with two of the largest packaging companies in North America
·	Trials with pre-screened customers underway with nine additional potential customers
·	Three of the largest retailers in North America have approved the RM2 pallet for trial by their vendors

Chief Executive Officer, John Walsh, commented:

"As we reported last week, we are delivering a quality, mass-produced product to our customers in ever-increasing volumes which will generate powerful performance for our shareholders."

For further information:

RM2 International S.A.	+44 (0)20 8820 1412
John Walsh, Chief Executive Officer Jean-Francois Blouvac, Chief Financial Officer Ruari McGirr, Head of Planning and Communication

RBC Capital Markets	+44 (0)20 7397 8900
Tristan Lovegrove Pierre Schreuder Ema Jakasovic

Citigate Dewe Rogerson	+44 (0)20 7638 9571
Kevin Smith Ellen Wilton

Notes to Editors

RM2 International S.A. specialises in pallet development, manufacture, supply and management to establish a leading presence in global pallet supply and improve the supply chain of manufacturing and distribution businesses through the effective and efficient use and management of composite pallets. It is quoted on the AIM market of the London Stock Exchange under the symbol RM2.L.

For further information, please visit www.rm2.com

Chairman's and CEO's Statement

We are pleased to announce RM2's interim results for the six months ended 30 June 2015.

Engagement with senior management of customers has begun to generate an increasing number of proposals for specific implementations and roll out opportunities. We are satisfied with the new proposals for roll outs under negotiation and are pleased with the progress we have made in securing contracts with two of the largest packaging companies in North America, each with the potential for significant expansion.

As previously announced, we continue to develop trial opportunities with additional customers. Trials are only undertaken after a thorough screening process in which the alignment of customer and Company metrics are demonstrated, and since initiating the assessment process, virtually every formal customer trial has led to a contract.

During the period under review, the Company has made significant advances in the development of the BLOCKPal™ pallet. Following direct customer feedback, the Company has reassessed the friction coating method and developed a new gel based system to address client concerns. The gel coating provides increased pallet durability, improves client experience including hygiene and health and safety concerns and is also expected to bring efficiencies and cost savings to the manufacturing process. The first gel coating systems are being commissioned, with the balance of the systems expected to be delivered during Q4.

The Company had expected substantial upswing to begin in Q3 2015 and accelerate through Q4. However, as a result of the decision to change to gel coating, announced on 24 September 2015, revenue and production numbers for full year 2015 will be significantly below previous guidance. Based on current contracts and trials as well as discussions underway, the Company is confident of being able to profitably deploy all the pallets produced.

Financial Results

The Company recorded revenues for the first six months of 2015 of US$1.77 million (H1 2014: US$0.78 million) and a loss after tax for the period of US$25.4 million (H1 2014: 22.2 million).

Cash and cash equivalents were US$35.9 million at 30 June 2015 (H1 2014: US$115.5 million); cash and cash equivalents were US$20.4 million and the raw material inventory was US$7.9 million at August 31, 2015.

Outlook

As highlighted in the operational update on 24 September, as a result primarily of the decision to change to gel coating, the Company will not achieve the substantial upswing in production that had been expected to begin in Q3 this year and accelerate through Q4. Production is expected to be not less than 2.5 million pallets in 2016, with a production run rate at the end of the fourth quarter of 2016 of c. 300,000 pallets per month. Based on current contracts and trials as well as discussions underway, the Company is confident of being able to deploy profitably all the pallets produced.

Ian Molson, Chairman and John Walsh, Chief Executive Officer

RM2 INTERNATIONAL S.A.

Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2015

		Notes		Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited (Reclassified)		Year to 31 December 2014 Audited
				USD	USD		USD
Continuing operations
Revenue		5		1,771,391	781,431		2,000,416
Cost of sales		6		(17,187,856)	(8,733,328)		(21,609,717)
Gross profit				(15,416,465)	(7,951,897)		(19,609,301)

Administrative expenses
Selling, General and Administrative expense		7		(10,287,482)	(8,121,785)		(18,260,590)
IPO expenses				-	(4,570,385)		(4,570,385)
Other operating expenses		8		(64,014)	(758,708)		(656,023)
Other operating income		8		740,357	93,874		670,927
Operating loss				(25,027,604)	(21,308,901)		(42,425,373)

Impairment of financial asset					-
Finance costs				(867,840)	(1,143,630)		(5,666,397)
Finance income				659,861	311,238		776,629
Loss before tax				(25,235,583)	(22,141,293)		(47,315,141)

Income tax				(172,828)	(93,218)		97,391
Loss for the period				(25,408,411)	i.1. (22,234,511)		i.2. (47,217,750)

Other comprehensive income
Other comprehensive income to be reclassified in profit or loss in subsequent periods:
Exchange difference on translation of foreign operations				(1,527,059)	721,780		1,370,822
Other comprehensive income for the year, net of tax				(1,527,059)	721,780		1,370,822

Total comprehensive income for the year				(26,935,415)	(21,512,731)		(45,846,928)

Loss for the year attributable to:
Parent company shareholders				(25,408,411)	(22,234,511)		(47,217,750)

Total comprehensive income for the year attributable to:
Equity holders of the parent				(26,935,415)	(21,512,731)		(45,846,928)

Losses per share
Basic losses per share attributable to ordinary equity holders of the parent		17		(0.08)	(0.07)		(0.15)
Diluted losses per share attributable to ordinary equity holders of the parent		17		(0.08)	(0.07)		(0.15)
RM2 INTERNATIONAL S.A. Consolidated Statement of Financial Position For the year six months ended 30 June 2015	Notes		30 June 2015 Unaudited			30 June 2014 Unaudited Restated	31 December 2014 Audited
			USD			USD	USD
Assets
Non-current assets
Property, plant & equipment - others	9		35,710,996			22,706,731	26,260,546
Property, plant & equipment - pallet pool	10		10,844,909			264,588	2,754,506
Investment property			1,371,279			1,572,263	1,396,512
Intangible assets	11		3,006,148			4,569,210	3,606,693
			50,933,332			29,112,792	34,018,257

Current assets
Inventory	12		15,985,591			3,945,946	7,017,188
Trade and other receivables	13		5,179,826			3,642,582	3,889,105
Other current financial assets			74,310			81,850	59,548
Prepayments			808,044			634,901	2,830,642
Restricted cash			2,027,062			-	2,149,975
Cash and cash equivalents			35,860,977			115,549,118	82,882,794
			59,935,811			123,854,397	98,829,252

Total assets			110,869,142			152,967,189	132,847,509

Equity and liabilities
Equity
Issued capital	16		3,230,302			3,217,772	3,227,772
Share premium	16		219,357,851			219,357,851	219,357,851
Retained earnings			(143,021,951)			(92,630,301)	(117,613,540)
Share based payment reserve			18,339,362			16,343,324	16,958,803
Foreign currency translation reserve			(128,322)			749,695	1,398,737
Treasury Stock			(3,424)			-	-
Equity attributable to parent company shareholders			97,773,818			147,038,341	123,329,623

Non-current liabilities
Interest bearing loans and borrowings	14		2,030,092			2,338,804	2,053,541
Deferred tax liabilities			251,493			556,192	403,286
			2,281,585			2,894,996	2,456,827

Current liabilities
Interest bearing loans and borrowings	14		18,860			84,657	28,573
Trade and other payables	15		9,789,422			2,654,073	6,160,275
Deferred income			634,004			16,857	678,397
Current tax liabilities			371,453			278,265	193,814
			10,813,739			3,033,852	7,061,059

Total liabilities			13,095,324			5,928,848	9,517,886

Total equity and liabilities			110,869,142			152,967,189	132,847,509

RM2 INTERNATIONAL S.A.

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2015

		Attributable to parent company shareholders
	Share capital		Share premium	Retained earnings	Foreign currency translation reserve	Treasury Shares	Share based payment reserve	Total equity
	USD		USD	USD	USD	USD	USD	USD
As at 31 December 2013 (audited)	1,561,828		31,134,458	(100,836,892)	27,915	-	15,743,333	(52,369,358)


Loss for the year	-		-	(22,234,511)	-	-	-	(22,234,511)
Other comprehensive income	-		-	-	721,780	-	-	721,780
Total comprehensive income	-		-	(22,234,511)	721,780		-	(21,512,731)

Absorption of losses			(30,441,102)	30,441,102	-	-	-	-
Shares issued in the period	1,655,944		223,097,977	-	-	-	-	224,753,921
Transaction costs on capital operations			(4,433,482)	-	-	-	-	(4,433,482)
Non-cash share based payments	-		-	-	-	-	599,991	599,991
Transactions with shareholders	1,655,944		188,223,393	30,441,102	-	-	599,991	220,920,430
As at 30 June 2014 (unaudited)	3,217,772		219,357,851	(92,630,301)	749,695	-	16,343,324	147,038,341

Loss for the year	-		-	(24,983,239)	-	-	-	(24,983,239)
Other comprehensive income	-		-	-	649,042	-	-	649,042
Total comprehensive income	-		-	(24,983,239)	649,042		-	(24,334,197)

Shares issued in the period	10,000		-	-	-	-	-	10,000
Non-cash share based payments	-		-	-	-	-	615,479	615,479
Transaction with shareholders	10,000		-	-	-	-	615,479	625,479
As at 31 December 2014 (audited)	3,227,772		219,357,851	(117,613,540)	1,398,737	-	16,958,803	123,329,623

Loss for the period	-		-	(25,408,411)	-	-	-	(25,408,411)
Other comprehensive income	-		-	-	(1,527,059)	-	-	(1,527,059)
Total comprehensive income	-		-	(25,408,411)	(1,527,059)		-	(26,935,470)

Absorption of losses	-		-	-	-	-	-	-
Shares issued in the period	2,530		-	-	-	-	-	2,530
Repurchase of shares into treasury	-		-	-	-	(3,424)	-	(3,424)
Non-cash share based payments	-		-	-	-	-	1,380,559	1,380,559
Transaction with shareholders	2,530		-	-	-	(3,424)	1,380,559	1,379,665
As at 30 June 2015 (unaudited)	3,230,302		219,357,851	(143,021,951)	(128,322)	(3,424)	18,339,362	97,773,818

RM2 INTERNATIONAL S.A. Consolidated Statement of Cash Flows For the six months ended 30 June 2015	Notes	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited
Cash flows from operating activities		USD	USD	USD
Loss before tax		(25,235,583)	(22,141,293)	(47,315,141)

Adjustment to reconcile profit before tax to net cash flows
Amortisation and depreciation of non-current assets		2,567,701	751,217	2,961,340
Provision for bad debts		90,750	-	-
Non-cash share based charges		1,380,559	599,991	1,215,470
Transaction costs on capital operations, including IPO		-	4,570,385	4,570,385
Finance income		(67,166)	(311,328)	(332,634)
Finance expenses		25,608	528,487	822,896
Unrealised foreign exchange gains		817,728	1,217,084	2,631,708
Net loss/(gain) on disposal of Property, Plant and Equipment ("PPE") and intangible assets		(421,682)	79,130	82,775

Variation in working capital
(Increase)/decrease in inventory		(8,968,403)	(2,421,154)	(5,492,396)
Decrease/(increase)/in trade and other receivables		642,028	(2,117,850)	(4,557,881)
Increase/(decrease) in trade and other payables		3,509,526	(2,548,010)	2,247,291
Decrease/(increase)/ in restricted cash		-	(2,149,975)	(2,149,975)
Income tax paid		(90,450)	(137,270)	(809,493)

Net cash flows from operating activities		(25,749,384)	(24,080,586)	(46,125,654)

Cash flows from investing activities
(Increase)/decrease in intangible assets		-	(851,788)	(1,065,674)
(Increase)/decrease in PPE in the course of commissioning		(8,666,039)	-	(5,510,766)
(Increase)/decrease in other PPE		(2,819,557)	(9,662,972)	(9,799,439)
(Increase)/decrease in pallet pool		(8,842,115)	-	(2,466,928)
Loans granted to third parties		(14,762)	(15,872)	6,430
Finance income received		67,166	311,328	332,634
Net cash flows from investing activities		(20,275,247)	(10,219,304)	(18,503,743)

Cash flows from financing activities
Issuance of capital	16	2,530	224,753,921	224,763,920
Purchase of treasury shares		(3,424)	-	-
Transaction costs on capital operations, charged against share premium account.		-	(4,433,482)	(4,433,482)
Transaction costs on capital operations, including IPO		-	(4,570,385)	(4,570,385)
Proceeds from other and related party borrowings		70,284	21,436	28,277
Repayment of other and related party borrowings		(28,273)	(338,918)	(360,573)

Finance Costs		(25,608)	(294,009)	(308,359)
Settlement of loans and costs following IPO
Repayment of other and related party borrowings		-	(24,700,000)	(24,700,000)
DPEI Warrant settlement		-	(40,000,000)	(40,000,000)
Interest paid on borrowings		-	(804,712)	(804,712)
Fees in relation to loans		-	(6,175,000)	(6,175,000)

Net cash flows from financing activities		15,509	143,458,851	143,439,688

Net change in cash and cash equivalents		(46,009,182)	109,158,961	78,810,289

Increase/decrease in cash and cash equivalents		(46,009,182)	109,158,961	78,810,289
Cash and cash equivalents at 1 January		82,882,794	4,193,136	4,193,136
Exchange adjustment of cash and cash equivalents		(1,012,635)	47,046	(120,631)
Cash and cash equivalents at end of period		35,860,977	113,399,143	82,882,794

RM2 INTERNATIONAL S.A.

Notes (unaudited) to the Interim Consolidated Financial Information

1 Corporate information

RM2 International S.A. (the "Company") is a limited company (société anonyme) incorporated and domiciled in Luxembourg with the registration number B132.740. The registered office is located at Rue de la Chapelle 5, L1235 Luxembourg. The Company is the ultimate parent entity of the RM2 Group (the "Group").

The Group is principally engaged in manufacturing, leasing and selling shipping pallets and in providing related logistical services.

This unaudited interim consolidated financial information does not constitute statutory accounts.

2 Basis of preparation

This unaudited interim consolidated financial information is prepared in compliance with AIM Rule 18. As unaudited interim consolidated financial information, it does not include all the information required in annual financial information, and should be read in conjunction with the Group's historical financial information for the year ended 31 December 2014.

The accounting policies and basis of preparation adopted are consistent with those followed in the preparation of the Group's historical financial information for the year ended 31 December 2014. None of the newly applicable IFRS standards and amendments has had an impact on the Group's interim consolidated financial information.

Early adopted standards

The Group did not early-adopt any new or amended standards and does not plan to early-adopt any of the standards issued but not yet effective

Reclassification

The June 2014 figures have been reclassified to re allocate the production costs as costs of sales rather than as part of the Selling, General and Administrative expense. The production facility only undertakes manufacturing operations and therefore its operating costs are considered as cost of sales rather than any administrate expenses. Cost of sales is higher than the revenue, reflecting the under absorption of costs into goods sold and the pallet pool. The effect of the reclassification in June 2014 is to increase the cost of sales by $6,604,022 and to reduce Selling, General and Administrative expenses by the same amount.

3 Significant accounting judgements, estimates and assumptions

When preparing the unaudited interim consolidated financial information, Management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgments, estimates and assumptions made by Management, and will seldom equal the estimated results.

The judgments, estimates and assumptions applied in the interim consolidated financial information, including the key sources of estimation uncertainty, were the same as those applied in the Group's historical financial information for the year ended 31 December 2014.

4 Significant events and transactions

In accordance with Disclosure Transparency Rules 4.2.7(1) and 4.2.7(2), the Company herewith includes a statement of important events during the first six months of the year and a description of principal risks and uncertainties for the remaining six months.

The engagement with senior management of customers, which was reported by the Company in June, has begun to generate proposals for specific implementations and roll out opportunities. The Company has recently signed contracts with two of the largest packaging companies in North America, each with the potential for significant expansion. This brings total contracted customers to 15, the vast majority in leasing contracts (as opposed to pallet sales contracts). The Company is currently conducting trials with nine additional potential customers.

Direct feedback from customers has highlighted the need to change the friction coating method from powder coating to a gel-based system. The gel coating addresses customers' health, hygiene and safety needs better, increases durability over the life cycle of the pallet and is also expected to bring efficiencies and cost savings to the manufacturing process. The first gel coating systems are being commissioned, with the balance of the systems expected to be delivered during Q4.

As a result primarily of the decision to change to gel coating, the Company will not achieve the substantial upswing in production that had been expected to begin in Q3 this year and accelerate through Q4. This means that revenue and production numbers for the full year will be significantly below previous guidance.

5 Segmental reporting

The Group has only one operating segment for the disclosure of revenue, being the production, the sale and the rental of pallets including related logistical services. Asset allocation decisions are based on a single, integrated investment strategy, and the Group's performance is evaluated on an overall basis. The Group's revenue analysis, however, is broken down by revenue stream as disclosed below.

Operating segment is reported in a manner consistent with the internal reporting used by the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the chief executive officer.

The internal reporting of the Group's assets, liabilities and performance is prepared on a consistent basis with the measurement and recognition principles of IFRS.

There were no changes in the reportable segments during the year.

The diversification of the Group's customer portfolio is limited presently. During the period there was 1 customer who represent more than 10% of the Group's revenues.

Turnover

	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited

Sold, leased pallets and logistical services	1,032,049	9,984	444,125
Third-party tracking services	739,342	771,447	1,556,291
	1,771,391	781,431	2,000,416

Geographical information

The parent company is based in Luxembourg. The information for the geographical area of non-current assets are presented for the most significant areas where the group has operations, being Luxembourg (country of domicile), the rest of Europe and North America.

	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited


Luxembourg	2,247,274	2,653,080	3,451,895
Rest of Europe	8,095,908	8,310,165	7,055,336
North America	40,590,150	18,149,546	23,511,029
	50,933,332	29,112,792	34,018,257

Non-current assets for this purpose consist of property, plant and equipment, investment properties and intangible assets.

6 Cost of sales

	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited


Cost of goods sold - Blockpal	152,668	-	271,952
Cost of goods sold - services	162,384	136,879	283,013
Amortization of pallet pool	619,244	25,722	88,258
Cost of software, licenses and services	734,892	653,649	1,393,418
Factory absorption	14,485,152	5,950,373	16,767,957
Other	1,033,516	1,966,705	2,805,119
	17,187,856	8,733,328	21,609,717

Factory absorption is the variance between the recorded cost to produce pallets and the standard expected cost to produce pallets. The standard cost is used to calculate the value of pallets produced for purposes of inventory and assets. The total cost of the production facility for which the total manufacturing capacity is circa 3 million pallets was not fully absorbed by production in the year and the under absorption is shown as a cost of sales. In addition, the factory absorption ratio was significantly negatively impacted by reduced pallet production attributable to the move from the Dixie road facility to the larger Ontario facility and the commissioning and ramp-up time associated with the on-streaming of new capital equipment.

7 Selling, General and Administrative Expense

	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited


Corporate costs	1,102,090	1,920,758	4,532,516
Selling and distribution costs	3,997,019	3,125,551	6,614,849
Non-cash share based payment	1,380,559	599,991	1,215,470
Depreciation	772,420	274,975	1,362,317
Other	3,035,394	2,200,508	4,535,438
	10,287,482	8,121,785	18,260,590

8 Other operating income and expenses

Other operating income	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited


Net gain/ (loss) on disposal of PPE	421,682	(76,972)	1
Rental income	153,683	167,752	329,450
Other	164,992	3,094	341,476
Total other operating income	740,357	93,874	670,927

Other operating expenses	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited


Direct operating expenses on rental-earning investment properties	12,934	36,246	101,119
Other	51,080	722,462	554,904
Total other operating expenses	64,014	758,708	656,023

9 Property, plant and equipment- other

	Land & Building	Plant & Equipment	Manufacturing equipment in commissioning	Total
	USD	USD	USD	USD
Cost
As at 31 December 2013 (audited)	1,942,669	12,824,716	3,537,463	18,304,848
Additions	-	9,662,972	-	9,662,972
Disposals	(136,068)	-	-	(136,068)
Other / transfers	3,433	(3,433)	-	-
Exchange differences	(3,964)	(29,943)	-	(33,907)
As at 30 June 2014 (unaudited)	1,806,070	22,454,312	3,537,463	27,797,845
Additions	110,702	25,766	5,510,766	5,647,234
Disposals	14,406	-	-	14,406
Other / transfers	(3,433)	3,433	-	-
Exchange differences	(190,578)	(870,451)	-	(1,061,029)
As at 31 December 2014 (audited)	1,737,167	21,613,060	9,048,229	32,398,456
Additions	-	3,241,239	8,666,039	11,907,278
Exchange differences	89,704	(1,010,749)	(324,687)	(1,245,732)
As at 30 June 2015 (unaudited)	1,826,871	23,843,550	17,389,581	43,060,002


Depreciation and impairment
As at 31 December 2013 (audited)	178,274	979,453	3,537,463	4,695,190
Depreciation charge for the period	36,173	431,049	-	467,222
Disposals	(56,938)	-	-	(56,938)
Other / transfers	572	(572)	-	-
Exchange differences	(47)	(14,312)	-	(14,359)
As at 30 June 2014 (unaudited)	158,033	1,395,618	3,537,463	5,091,114
Depreciation charge for the period	17,753	1,270,243	-	1,287,996
Disposals	18,050	-	-	18,050
Other / transfers	(572)	572	-	-
Exchange differences	(21,818)	(237,433)	-	(259,251)
As at 31 December 2014 (audited)	171,447	2,429,000	3,537,463	6,137,910
Depreciation charge for the period	32,240	1,153,426	-	1,185,666
Exchange differences	(530)	(99,436)	-	(99,966)
As at 30 June 2015 (unaudited)	203,157	3,482,990	3,537,463	7,223,610

Net book value
As at 30 June 2015 (unaudited)	1,527,488	20,331,390	13,852,118	35,710,997
As at 31 December 2014 (audited)	1,565,720	19,184,060	5,510,766	26,260,546
As at 30 June 2014 (unaudited)	1,648,037	21,058,694	-	22,706,731

10 Property, plant and equipment - Pallet pool

				Pallet Pool
				USD
Cost
As at 31 December 2013 (audited)				419,153
Additions				-
As at 30 June 2014 (unaudited)				419,153
Additions				2,466,928
As at 31 December 2014 (audited)				2,886,081
Additions				8,842,115
As at 30 June 2015 (unaudited)				11,728,197


Depreciation and impairment
As at 31 December 2013 (audited)				43,317
Depreciation charge for the period				111,248
As at 30 June 2014 (unaudited)				154,565
Depreciation charge for the period				(22,990)
As at 31 December 2014 (audited)				131,575
Depreciation charge for the period				751,713
As at 30 June 2015 (unaudited)				883,288

Net book value
As at 30 June 2015 (unaudited)				10,844,909
As at 31 December 2014 (audited)				2,754,506
As at 30 June 2014 (unaudited)				264,588

11 Intangible assets

	Software	Trade names	Customer relationships	Acquired licences and similar intangible assets	Goodwill	Total
	USD	USD	USD	USD	USD	USD
Cost
As at 31 December 2013 (audited)	1,964,184	163,682	491,046	47,033	1,130,872	3,796,817
Additions	851,789	-	-	-		851,789
Exchange differences	80,109	6,675	20,027	-	46,122	152,933
As At 30 June 2014 (unaudited)	2,896,082	170,357	511,073	47,033	1,176,994	4,801,539
Additions	-	-	-	250,000	-	250,000
Exchange differences	(216,475)	(15,029)	(45,090)	-	(103,841)	(380,435)
As at 31 December 2014 (audited)	2,679,607	155,328	465,983	297,033	1073,153	4,671,104
Additions	-	-	-	-	-	-
Exchange differences	32,010	1,856	5,567	-	12,819	52,252
As At 30 June 2015 (unaudited)	2,711,617	157,184	471,550	297,033	1,085,972	4,723,356



Depreciation and impairment
As at 31 December 2013 (audited)	-	-	-	45,233	-	45,233
Amortization charge for the period	133,973	11,164	33,493	1,200	-	179,830
Exchange differences	5,449	455	1,362	-	-	7,266
As at 30 June 2014 (unaudited)	139,422	11,619	34,855	46,433	-	232,329
Amortization charge for the period	753,709	19,443	58,331	599	-	832,082
As at 31 December 2014 (audited)	893,131	31,062	93,186	47,032	-	1,064,411
Amortization charge for the period	421,670	45,855	137,566	-	-	605,090
Exchange differences	41,009	1,675	5,023	-	-	47,707
As at 30 June 2015 (unaudited)	1,355,810	78,592	235,775	47,032	0	1,717,208

Net book value

As at 30 June 2015 (unaudited)	1,355,807	78,592	235,775	250,001	1,085,972	3,006,148
As at 31 December 2014 (audited)	1,786,476	124,266	372,797	250,001	1,073,153	3,606,693
As at 30 June 2014 (unaudited)	2,756,660	158,738	476,218	600	1,176,994	4,569,210

The goodwill arises from the acquisition of Equipment Tracking Limited in 2013.

12 Inventories

	30 June 2015 Unaudited	30 June 2014 Unaudited	31 December 2014 Audited


Raw Materials	7,314,957	2,759,664	3,108,970
Work in progress	2,761,851	1,103,947	1,448,422
Finished goods-pallets	5,908,783	82,335	2,459,796
Total Inventories	15,985,591	3,945,946	7,017,188

13 Trade and other receivables

	30 June 2015 Unaudited	30 June 2014 Unaudited	31 December 2014 Audited


Trade receivables	1,491,809	220,020	648,353
Income tax receivables	3,178	44	2,275
Other tax receivables	2,845,690	2,033,312	2,179,364
Other receivables	839,149	1,389,206	1,059,113
Total trade and other receivables	5,179,826	3,642,582	3,889,105

14 Interest-bearing loans and borrowings

			As at 30 June 2015 Unaudited	As at 30 June 2014 Unaudited	As at 31December 2014 Audited
	Effective interest rate	Maturity date	USD	USD	USD

Non-current interest-bearing loans and borrowings
CHF 2,100,000 Bank loan	2.4%	30 November 2015	2,020,661	2,328,583	2,021,220
(The loan is secured by a mortgage on the building held by the Group in Switzerland.)

Hire purchase liabilities in excess of one year			9,431	10,221	33,321

Total non-current interest-bearing loans and borrowings			2,030,092	2,338,804	2,053,541

Current interest-bearing loans and borrowings
Bank overdraft	Variable	On-demand	-	53,996
Hire purchase liabilities in excess of one year			18,860	30,661	28,573
Total current interest-bearing loans and borrowings			18,860	84,657	28,573

Total interest-bearing loans and borrowings			2,048,952	2,423,461	2,082,114

15 Trade and other payables

	30 June 2015 Unaudited	30 June 2014 Unaudited	31 December 2014 Audited


Trade payables	7,519,744	1,786,215	4,572,320
Social Charges	947,848	8,925	258,111
Current Tax Liabilities	750,556	237,115	747,662
Other payables	571,274	621,818	402,183
Total Trade and other payables	9,789,422	2,654,073	6,160,275

16 Share capital and reserves

2015

On 12 March 2015, 253,000 restricted shares were granted to certain employees. The restricted shares vest three years from the date of grant if the recipients are still employed by the Group at such time.

On 17 June 2015, the Company repurchased 342,334 previously issued restricted shares. These shares are held as non-voting treasury shares.

As at June 30, 2015, RM2's issued share capital is 323,030,156 Ordinary Shares of US$0.01 each in the capital of the Company, of which 342,334 Ordinary Shares are held by the Company as non-voting treasury stock. The total number of voting rights in the Company is 322,687,822.

2014

On 6 January 2014 the Company completed an Initial Public Offering, listing its shares on the AIM market of the London Stock Exchange, through the issuance of 155,903,548 shares at £0.88 per share and receiving net proceeds of USD 215,760,052, after payment of fees. Following repayment of an aggregate of USD 71,679,712 in loans, fees and interest, the Company's balance sheet was free of debt (other than the mortgage on the office building in Switzerland) and the Company retained USD 144,080,340 to finance capital expenditure, production of inventory and operating expenses. The premium arising on the newly issued IPO shares has been taken to the Share Premium Account.

In addition, on 6 January 2014 the Company issued 4,157,428 Ordinary Shares at par to a significant shareholder.

On 24 January 2014, 2,316,405 restricted shares with Performance Conditions were granted to certain Directors (see note 22).

On 3 April 2014, 900,000 restricted shares were granted subject to certain vesting conditions.

On 13 June 2014, 2,317,000 restricted shares were granted, 1,000,000 of which were subject to Performance Conditions, and 1,317,000 of which were subject to certain vesting conditions.

On 22 September 2014 1,000,000 restricted shares were granted subject to Performance Conditions.

Ordinary shares issued and fully paid

	Shares	USD	Par value per share


At 31 December 2013 (audited)	156,182,775	1,561,828	USD 0.01

IPO on 6 January 2014	155,903,548	1,599,036	USD 0.01
Subscription for new shares on 6 January 2014	4,157,428	41,574	USD 0.01
Subscription for restricted shares on 24 January 2014	2,315,405	23,164	USD 0.01
Subscription for restricted shares on 3 April 2014	900,000	9,000	USD 0.01
Subscription for restricted shares on 17 June 2014	2,317,000	23,170	USD 0.01

At 30 June 2014 (unaudited)	321,777,156	3,217,772	USD 0.01

Subscription for restricted shares on 22 September 2014	1,000,000	10,000	USD 0.01

At 31 December 2014	322,777,156	3,227,772	USD 0.01

Subscription for restricted shares on 2 March 2015	253,000	2,530	USD 0.01


At 30 June 2015	323,030,156	3,230,302	USD 0.01

Share premium

	USD

At 31 December 2013 (audited)	31,134,458
IPO 6 January 2013	223,097,977
Absorption of the 31 December 2013	(30,441,102)
Transaction costs on issue of shares	(4,433,482)
At 30 June 2014 (unaudited)	219,357,851

At 31 December 2014 (audited)	219,357,851

At 30 June 2015 (unaudited)	219,357,851

17 Earnings per share

Basic earnings per share amounts are calculated by dividing the net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited
	USD	USD	USD

Net loss attributable to ordinary equity holders of the parent for basic earnings	(25,408,411)	(22,234,511)	(47,217,750)

	Six months to 30 June 2015 Unaudited	Six months to 30 June 2014 Unaudited	Year ended 31 December 2014 Audited
Weighted average number of ordinary shares for basic earnings per share	322,930,913	313,551,103	317,997,300
Weighted average number of ordinary shares adjusted for the effect of dilution	322,944,891	313,551,103	317,997,300

Loss per share
Basic	(0.08)	(0.07)	(0.15)
Diluted	(0.08)	(0.07)	(0.15)

Management considers that there is no dilutive effect from the options as they would be negative.

18 Publication of announcement and the Interim Results

A copy of this announcement and the Interim Results will be available on the Company's website and at the Company's registered office.

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR XKLLLEKFFBBF

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