30th Jul 2014 07:00
OPERATIONAL REVIEW FOR THE
QUARTER ENDED 30 JUNE 2014
ANNOUNCEMENT 30 July 2014
Vmoto Limited (ASX/AIM: VMT), the global scooter manufacturing and distribution group specialising in "green" electric powered two wheel vehicles, provides the following update on its activities during the quarter ended 30 June 2014.
HIGHLIGHTS OF JUNE 2014 QUARTER
· Continued growth in quarterly positive operating cash flow to $143k; up 270% on March 2014 quarter
· Continued growth in quarterly unaudited normalised net profit after tax, to ~$465,000 (excluding one off share based expenses); up 101% on March 2014 quarter
· Continued growth in quarterly unit sales to over 22,400; up 57% on March 2014 quarter
- approximately 15,000 units sold to OEM customers, over 3,600 sold through Vmoto's retail stores, and balance sold through international and China distributors and customers
· China distribution footprint now encompasses 16 company owned retail stores, in addition to relationships with more than 10 external distributors and dealers across China
· First container delivered to Vietnamese distributor and received further orders for 120 units
· Delivered two sample scooters to Hong Kong distributor to supply to DHL, a leading international delivery and courier group
· First container of scooters delivered to Indonesian distributor
· Progressing new market entry opportunities, including Mexico and Nepal
· New website launched - www.vmoto.com
SECOND CONSECUTIVE POSITIVE QUARTERLY NET OPERATING CASH FLOW
Vmoto's cash flow for the June 2014 quarter continued to improve, with the Company achieving higher positive net operating cash flow of $143k, up 270% compared to March 2014 quarter, and a substantial turnaround from the operating cash outflow of $495k in June 2013 quarter.
Sales through the Company's retail stores and distributors, to OEM customers and internationally was over 22,400 units, up 57% compared to the March 2014 quarter.
During the quarter, the Company repaid RMB9.9 million (approximately A$1.7 million) and drew down RMB7 million (approximately A$1.2 million). As at 30 June 2014, the total operating facility drawn down was RMB19 million (approximately A$3.2 million) and the total undrawn operating facility was RMB15 million (approximately A$2.6 million).
As at 30 June 2014, the Company had cash of A$2.8 million (unaudited).
TRADING UPDATE - GROWTH CONTINUES
The Company continues to grow earnings, with normalised net profit after tax (excluding one off share based expenses of A$493,809 as a result of the issue of performance rights, shares and options as approved at the Company AGM on 20 May 2014) generated for the June 2014 quarter of approximately A$465,000 (unaudited).
The Company's growing revenues and profits are a clear demonstration of the increasing traction Vmoto brands are achieving in key markets in China and Asia. The Company is becoming increasingly recognised for its premium electric scooter products and is growing strongly and delivering on its strategy.
The breakdown of unit sales (unaudited) for the June 2014 quarter is set out below:
Unit sales | March 2014 Quarter | June 2014 quarter | Total
|
OEM | 8,133 | 14,963 | 23,096 |
China retail stores | 3,071 | 3,609 | 6,680 |
Other Chinese distributors | 1,015 | 1,630 | 2,645 |
International and others | 2,038 | 2,246 | 4,284 |
14,257 | 22,448 | 36,705 |
EXISTING AND NEW CUSTOMERS - KEY LONG TERM GROWTH DRIVERS
PowerEagle: During the June 2014 quarter, Vmoto sold approximately 15,000 units of electric scooters to PowerEagle. The Company's relationship with PowerEagle is strong and production continues with a target of 64,800 units for the 2014 calendar year under the Strategic Cooperation Agreement.
E-Tropolis: Vmoto is actively discussing with E-Tropolis plans to increase orders.
Hong Kong: During the quarter, Vmoto delivered two sample electric delivery scooters to its Hong Kong distributor to supply to the Hong Kong branch of DHL. DHL is the world's largest international logistics company and is present in over 220 countries representing a significant market for Vmoto. The feedback from the Hong Kong distributor has been positive to date.
Indonesia: Vmoto delivered the first container of its electric scooters to its Indonesian distributor during the quarter and expects to receive more orders from this distributor in the coming weeks. Indonesia, after China, is the second largest market in the world for petrol motor scooters (Source: Pike Research) and represents a large potential market for Vmoto.
Italy: Vmoto received an order for one container from its Italian distributor in June 2014. The products are under preparation with delivery expected to the distributor in August 2014.
Malaysia: Vmoto received an order for 72 units of its electric delivery scooters in completely knocked down ("CKD") form from its Malaysian Original Equipment Manufacturer ("OEM") customer during the quarter.
Mexico: Vmoto received sample orders from a new customer in Mexico in June 2014 and the samples are under preparation with delivery expected in August 2014.
Nepal: Vmoto recently received an order for one container from its new customer in Nepal. The Company is actively preparing the products for its new customer and hopeful that more orders will be received from the customer for this new market.
Taiwan: Vmoto has recently supplied samples of its electric scooters to Kentfa Advanced Technology Corp for evaluation and promotion in Taiwan. As part of its evaluation of Vmoto's products, Kentfa organised an electric motorbike test ride with the Taiwan Entrepreneur Association (Southern Chapter) on 7 April 2014 using Vmoto's electric two wheel vehicles. Feedback from the attendees was very positive. The samples supplied to the Taiwanese distributor have passed the required tests and have been delivered to the local homologation department for certifying.
Vietnam: Vmoto delivered its first container of electric scooters to Vietnam during the quarter and feedback from the distributor has been very positive. Vmoto has since received further orders for 120 units from its Vietnamese distributor.
Others: The Company's electric scooters were shipped to distributors in Africa, Canada, Greece, Japan and South Korea.
VMOTO'S RETAIL STORE AND DISTRIBUTION CHANNELS IN CHINA
The Company's total retail store footprint currently stands at 16 retail stores. In addition, Vmoto has relationships with more than 10 distributors and dealers who distribute Vmoto's products in China. The Company expects that the combined sales momentum will continue, with an increased emphasis to be placed on existing and new distributors and dealers. Vmoto retail store roll out is likely to slow to allow increased Vmoto management time to be allocated to provide more support to new and existing distributors and dealer. Combined profits from these two sales channels remains in line with management expectations.
COLLABORATIONS, TENDERS AND JOINT VENTURE OPPORTUNITIES
The Company continues to receive significant interest from other electric vehicle distributors and parties for potential collaboration or joint venture opportunities. Discussions with these groups are ongoing and any material developments will be announced as and when they occur.
EXHIBITIONS
During the quarter, the Company exhibited at the Post Expo Asia Pacific held in Hong Kong over May 20-21 2014. Significant interest was generated in Vmoto's products with guests at the exhibition including board level, senior management executives from national postal operators, private postal and mailing companies and parcel and courier companies from across Asia Pacific.
In addition, Vmoto's Taiwanese distributor exhibited Vmoto's electric two wheel vehicle products at the Taipei International Electric Vehicles Exhibition held on 9-12 April 2014 and again received positive feedback.
The Company's Vietnamese distributor participated and exibited in the 6th Entech Hanoi exhibition held over May 21-23 2014. Over 180 booths exhibited in the exhibition which was attended by over 140,000 visitors.
CORPORATE
During the quarter, the Company issued 9,035,000 shares on conversion of options and a further 2,666,666 shares were issued to directors following the vesting of performance rights. The Company also issued 4 million options and 20 million performance rights to directors of the Company following shareholder approval on 20 May 2014.
During the quarter the Company also released a new website at www.vmoto.com.
POSITIVE OUTLOOK
The June 2014 quarter was a very productive quarter for Vmoto, with the key highlights being the Company's increasing unit sales, as well as continued growth in positive cash flow. Current trading remains in line with management's expectations.
Utilisation of the Company's manufacturing facility in China is increasing and becoming more efficient as production grows to service PowerEagle and Vmoto's growing retail store footprint and distribution channels. This will continue and is expected to increase over the remaining months of the year. In addition the Company is seeking other means of increasing its own branded sales in China with discussions with other electric vehicle distributors or parties for potential collaboration or joint venture opportunities.
Internationally, the Company will continue to sell units into its existing markets and customers as well as continue discussions with a range of potential new customers across the globe.
For further information, please contact:
Vmoto | |
Charles Chen, Managing Director Olly Cairns, Non-Executive Director | +61 8 9226 3865 +61 8 9226 3865 |
Investors and media Market Eye Pty Ltd Ronn Bechler |
+61 400 009 774 ronn.bechler@marketeye.com.au |
finnCap Ltd Ed Frisby/Christopher Raggett (corporate finance) Tony Quirke/Mia Gardner (corporate broking) |
+44 20 7220 0500 |
About Vmoto
Vmoto Limited (ASX/AIM: VMT) is a global scooter manufacturing and distribution group. The Company specialises in high quality "green" electric powered two wheel vehicles and manufactures a range of western designed electric scooters from its low cost manufacturing facilities in Nanjing, China. Vmoto combines low cost Chinese manufacturing capabilities with European design. The group operates through two primary brands: Vmoto (aimed at the value market in Asia) and E-Max (targeting the Western markets, with a premium end product). As well as operating under its own brands, the Company also sells to a number of customers on an original equipment manufacturer ("OEM") basis.
Rule 4.7B
Appendix 4C
Quarterly report
for entities admitted
on the basis of commitments
Introduced 31/3/2000. Amended 30/9/2001, 24/10/2005.
Name of entity |
VMOTO LIMITED |
ABN | Quarter ended ("current quarter") | |
36 098 455 460 | 30 June 2014 |
Consolidated statement of cash flows
Cash flows related to operating activities
| Current quarter $A'000 | Year to date (6 months) $A'000 | |
1.1 | Receipts from customers
| 10,910 | 16,349 |
1.2 | Payments for (a) staff costs (b) advertising and marketing (c) research and development (d) leased assets (e) other working capital (including inventories) | (337) (79) - - (10,304)
| (639) (86) (3) - (15,339)
|
1.3 | Dividends received | - | - |
1.4 | Interest and other items of a similar nature received | 15 | 32 |
1.5 | Interest and other costs of finance paid | (62) | (133) |
1.6 | Income taxes paid | - | - |
1.7 | Other (provide details if material) | - | - |
Net operating cash flows | 143 | 181 | |
Current quarter $A'000 | Year to date (6 months) $A'000 | ||
1.8 | Net operating cash flows (carried forward) | 143 | 181 |
Cash flows related to investing activities | |||
1.9 | Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets |
- - - (9) - |
- - - (16) - |
1.10 | Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non-current assets (e) other non-current assets
|
- ‑ ‑ - ‑ |
- ‑ ‑ - ‑ |
1.11 | Loans to other entities | - | - |
1.12 | Loans repaid by other entities | - | - |
1.13 | Other (net cash acquired on acquisition of subsidiary) | - | - |
Net investing cash flows | (9) | (16) | |
1.14 | Total operating and investing cash flows | 134 | 165 |
Cash flows related to financing activities | |||
1.15 | Proceeds from issues of shares, options, etc. | 243 | 245 |
1.16 | Proceeds from sale of forfeited shares | - | - |
1.17 | Proceeds from borrowings | 1,203 | 3,390 |
1.18 | Repayment of borrowings | (1,702) | (5,401) |
1.19 | Dividends paid | ‑ | ‑ |
1.20 | Other (provide details if material) | - | (22) |
Net financing cash flows | (256) | (1,788) | |
Net increase (decrease) in cash held
|
(122) |
(1,623) | |
1.21 | Cash at beginning of quarter/year to date | 2,893 | 4,427 |
1.22 | Exchange rate adjustments to item 1.21 | (7) | (40) |
1.23 | Cash at end of quarter | 2,764 | 2,764 |
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
| Current quarter $A'000 | ||||||||||||||||
1.24 |
Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of payments to the parties included in item 1.18 |
109 - | |||||||||||||||
1.25 |
Aggregate amount of loans to the parties included in item 1.11 |
- | |||||||||||||||
1.26 |
Explanation necessary for an understanding of the transactions | ||||||||||||||||
|
| ||||||||||||||||
Non-cash financing and investing activities
2.1 | Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
|
Nil
|
2.2 | Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest
|
Nil
|
Financing facilities available
Add notes as necessary for an understanding of the position. (See AASB 1026 paragraph 12.2).
Amount available $A'000 | Amount used $A'000 | ||
3.1 | Loan facilities
| 5.815 | 3.250 |
3.2 | Credit standby arrangements*
| - | - |
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. | Current quarter $A'000 | Previous quarter $A'000 | |
4.1 | Cash on hand and at bank | 2,764 | 2,893 |
4.2 | Deposits at call | - | - |
4.3 | Bank overdraft | - | - |
4.4 | Other (provide details) | - | - |
Total: cash at end of quarter (item 1.23) | 2,764 | 2,893 | |
Acquisitions and disposals of business entities
Acquisitions (Items 1.13 and 2.1) | Disposals (Item 1.10(a)) | ||
5.1 | Name of entity | ||
5.2 | Place of incorporation or registration | ||
5.3 | Consideration for acquisition or disposal | ||
5.4 | Total net assets | ||
5.5 | Nature of business |
| |
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.
2 This statement does give a true and fair view of the matters disclosed.
Shannon Coates
Sign here: ............................................................ Date: 30 July 2014
(Company Secretary)
Print name: Shannon Coates
Notes
1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below.
· 6.2 - reconciliation of cash flows arising from operating activities to
operating profit or loss
· 9.2 - itemised disclosure relating to acquisitions
· 9.4 - itemised disclosure relating to disposals
· 12.1(a) - policy for classification of cash items
· 12.3 - disclosure of restrictions on use of cash
· 13.1 - comparative information
3. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
Related Shares:
VMT.L