Sorbic International PLC Trading Update (4792W)
10 Novembre 2014 - 8:00AM
UK Regulatory
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
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