30th Jul 2013 07:00
OPERATIONAL REVIEW FOR THE
QUARTER ENDED 30 JUNE 2013
ANNOUNCEMENT 30 July 2013
Vmoto Limited ("Vmoto" or "the Company") (ASX:VMT, 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 2013.
HIGHLIGHTS
·; Delivered approximately 13,400 units to Shanghai PowerEagle International Co Ltd ("PowerEagle") in the quarter. With a total of 22,100 units delivered in the year to date, the Company remains on track to fulfil PowerEagle's forecast production of 42,000 units for year ending 31 December 2013.
·; Launched six new models into the Chinese domestic market, the largest market for electric two wheel vehicles in the world. Across the industry 30 million units were manufactured in China in 2012 and this is expected to increase to 40 million units in 2015 (Source: 2012-2015 China Electric Two Wheel Vehicle Industry Research Report, published 13 November 2012).
·; Opened first Chinese flagship retail store in Nanjing, which has a residential population of over 8 million. The Company expects to open more retail stores in China in the near future.
·; Delivered two containers (96 units) of electric scooters to E-Tropolis during the quarter. A further delivery is expected to be made in July 2013.
·; Achieved maiden monthly profit in June 2013 and anticipates making a net profit after tax for the financial year to 31 December of between A$300k and A$600k
CASH FLOW
Operating cash flow for the June 2013 quarter improved by 23% in comparison with the previous quarter.
Vmoto's receipts from customers during the quarter increased significantly, mainly due to receipts for PowerEagle electric scooters delivered in the previous quarter, the increase in production and delivery of PowerEagle electric scooters during the quarter, the launch of new models of Vmoto's electric two wheel vehicles in China and the opening of Vmoto's first flagship retail store in China during the quarter.
During the quarter, employee payments decreased in comparison to the previous quarter as a result of ongoing rationalisation and close monitoring of staff costs.
Payments in respect of advertising and marketing during the quarter decreased in comparison to the previous quarter, while payments in respect of other working capital (including inventories) increased when compared to the previous quarter as the Company increased production of PowerEagle electric scooters and commenced production of new models of two wheel eletric vehicle products for the Chinese market.
In April 2013, the Company drew down RMB3million (approximately AUD472,000) from its operating facility. In May 2013, the Company repaid RMB13.9million (approximately AUD2.2million) and drew down RMB13.9million (approximately AUD2.3million) from its operating facility.
As at 30 June 2013, the total operating facility drawn down was RMB29.9million (approximately AUD5.2million) and the total undrawn operating facility was RMB4.1million (approximately AUD720,000).
EXISTING AND NEW CUSTOMERS
PowerEagle: During the June 2013 quarter, the Company delivered approximately 13,400 units of PowerEagle electric scooters to the customer. Production continues to be efficient and the Company remains on track to produce PowerEagle's forecast production of 42,000 units for the year ending 31 December 2013.
E-Tropolis: The Company delivered two containers (96 units) of electric scooters to E-Tropolis during the quarter. The Company received a deposit from E-Tropolis for a further container of electric scooters, anticipated to be delivered in July 2013.
USA: The Company delivered 75 units to KLD Energy in the USA during the quarter. KLD will install their own Samsung lithium battery packs and drive systems into the Vmoto "120" model. KLD's engineers are performing further test on the drive system and are scheduled to visit Vmoto's Nanjing manufacturing facility by the end of July 2013 for a required system update.
Denmark: The Company received an order of 72 units from its Denmark distributor and expects to receive the deposit in August 2013. The Denmark distributor and customer are planning to visit Vmoto's Nanjing manufacturing facility in mid August 2013.
Others: Containers were shipped to distributors in Netherlands, USA and South Korea, whilst European orders remain slow due to the poor economic climate.
JOINT VENTURE IN BRAZIL
As announced on 24 April 2013, the Company signed a joint venture agreement with Riba Motors Industria e Comercio Ltda ("Riba"), providing Vmoto access to Riba's assembly facility with direct distribution to Latin America, the world's second fastest growing electric scooter market (Source: Pike Research).
The JV with Riba as local partner offers significant cost savings for the Company and the opportunity for Vmoto to leverage Riba's expertise in the Latin America market.
Due to the recent unprecedented social turmoil and unrest in Brazil and significant interest received in the domestic Chinese market by Vmoto, the Company has determined that its resources and time are better spent focusing on the world's biggest market, China, which the Company anticipates will generate better returns in the short to medium term. Hence, the Company has opted to defer its marketing efforts in Brazil.
LAUNCH OF NEW MODELS/VERSIONS IN CHINA
In June 2013, Vmoto launched the first batch of six new models of electric two wheel vehicles in China (see ASX announcement dated 4 June 2013). These new models are updated versions of Vmoto's E-Max classic 80S and 120S electric scooters and newly developed electric two wheel vehicle models. The new models have been developed specifically to target the Chinese market, the design being modern and fashionable, at a reasonable price point.
As a result of the interest shown to date, the Company anticipates that sales of these models will have a positive impact on revenue in the current financial year. This is expected to compensate for the sales of the Company's existing E-Max models which have been slower than expected as a result of the inclement winter and poor economic climate experienced in Europe.
EXHIBITION
During the quarter, the Company, with its parts supplier, Taizhou Quanshun Motor Co, Ltd, co-exhibited 3 new electric two wheel vehicle models in Henan Province, China to promote Vmoto and its products.
Vmoto received significant interest from many Chinese distributors and dealers at the exhibition. Although Vmoto is a relatively new player in the electric two wheel market in China, many Chinese distributors and dealers have already placed sample and initial orders with the Company. Many distributors and dealers are also visiting Vmoto's manufacturing facility in Nanjing, China to discuss further cooperation with the Company.
The Company will be participating in one of the largest electric two wheel vehicle exhibitions in China "Jiangsu Electric Two Wheel Vehicle Exhibition" to be held in Nanjing, China in October 2013 in order to accelerate the marketing of new products launched by the Company.
VMOTO'S FLAGSHIP CHINESE RETAIL STORE
In June 2013, Vmoto opened its first Chinese flagship retail store in Lishui District, Nanjing. The store covers 260m2 and occupies a prime location in proximity to the busiest shopping street in Lishui District, Nanjing. As at the end of 2012, Nanjing had a residential population of over 8 million.
The opening of the new flagship retail store in China is a key milestone for the Company and it is considering further expansion in China, including opening more retail stores (one is currently being fitted out) and additional co-operation agreements with existing manufacturers and enterprises.
TRADING UPDATE
The Company delivered a profitable month in June 2013 and the net profit after tax figure (unaudited) was approximately A$80,000.
Based on demand shown to date, the Company anticipates that it will make a maiden annual profit for the financial year ending 31 December 2013 of between A$300,000 and A$600,000.
CORPORATE
Following shareholder approval at the Company's Annual General Meeting held on 17 May 2013, 5,000,000 Class E Options (each Option having an exercise price of $0.04 and expiry date of 23 May 2018) and 5,000,000 Class F Options (each Option having an exercise price of $0.08 and expiry date of 23 May 2018) were issued to Mr Simon Farrell, the Company's Non-Executive Chairman.
OUTLOOK
The Company continues to deliver on its existing OEM contracts with PowerEagle and has executed a number of strategies to continue to penetrate into Chinese market, the largest market for electric two wheel vehicles in the world, with across the industry 30 million units sold in 2012 and expected to increase to 40 million units in 2015.
The Company is also in discussions with a range of potential new customers across the globe, particularly India and Indonesia.
AUTHORISED BY:
Charles Chen
Managing Director
For further information, please contact:
Vmoto | |
Charles Chen, Managing Director Olly Cairns, Non-Executive Director | +86 139 1338 8886 +61 (8) 6267 9030 |
finnCap Ltd | +44 (0) 207 220 0500 |
Ed Frisby (corporate finance) Christopher Raggett (corporate finance) Tony Quirke (corporate broking) | |
About Vmoto
Vmoto is a global two wheel vehicle manufacturing and distribution group and is listed on the Australian Securities Exchange (ASX) and on the AIM market of the London Stock Exchange. The Company specialises in high quality "green" two wheel electric powered vehicles and manufactures a range of western designed electric (and some petrol) two wheel vehicles from its low cost manufacturing facilities in Nanjing, China, marketed in Europe through its operation in Bremen, Germany and marketed outside Europe through its operations in Australia. 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 2013 |
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
| 8,639 | 11,303 |
1.2 | Payments for (a) staff costs (b) advertising and marketing (c) research and development (d) leased assets (e) other working capital (including inventories) | (210) (8) (6) - (8,822)
| (539) (62) (11) - (11,698) |
1.3 | Dividends received | - | - |
1.4 | Interest and other items of a similar nature received | - | - |
1.5 | Interest and other costs of finance paid | (88) | (166) |
1.6 | Income taxes paid | - | - |
1.7 | Other (provide details if material) | - | 31 |
Net operating cash flows | (495) | (1,142) | |
Current quarter $A'000 | Year to date (6 months) $A'000 | ||
1.8 | Net operating cash flows (carried forward) | (495) | (1,142) |
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 |
- - - (72) - |
- - - (215) - |
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 | (72) | (215) | |
1.14 | Total operating and investing cash flows | (567) | (1,357) |
Cash flows related to financing activities | |||
1.15 | Proceeds from issues of shares, options, etc. | - | - |
1.16 | Proceeds from sale of forfeited shares | - | - |
1.17 | Proceeds from borrowings | 2,768 | 4,751 |
1.18 | Repayment of borrowings | (2,198) | (4,197) |
1.19 | Dividends paid | ‑ | ‑ |
1.20 | Other (provide details if material) | (80) | (222) |
Net financing cash flows | 490 | 332 | |
Net increase (decrease) in cash held
|
(77) |
(1,025) | |
1.21 | Cash at beginning of quarter/year to date | 895 | 1,835 |
1.22 | Exchange rate adjustments to item 1.21 | 82 | 90 |
1.23 | Cash at end of quarter | 900 | 900 |
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 |
34 - | |||||||||||||||
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
| 5,966 | 5,246 |
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 | 900 | 895 |
4.2 | Deposits at call | - | - |
4.3 | Bank overdraft | - | - |
4.4 | Other (provide details) | - | - |
Total: cash at end of quarter (item 1.23) | 900 | 895 | |
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.
Sign here: ............................................................ Date: 30 July 2013
(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