TIDMMCJ
RNS Number : 9292Z
Majestic Corporation PLC
20 September 2022
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PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES,
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20 September 2022
Majestic Corporation Plc
(the "Company" or "Majestic")
Interim Results to 30 June 2022
Majestic Corporation, an emerging leader in the precious metals
and non- ferrous metals recycling, is pleased to announce its
interim results for the six month period ended 30 June 2022.
Financial highlight s:
-- Successful listing on the AQUIS Market in March 2022
-- Revenue was US$12.9m (H1 2021: US$15.5m)
-- Profit before tax US$980k (H1 2021: US$766k)
-- Net assets increased to US$7.0m (as at 31 December 2021: US$6.1m)
-- Cash in bank and on hand of US$2.7m (as at 31 December 2021: US$2.5m)
Peter Lai, Chairman and CEO of Majestic said:
"We delivered a strong performance for the first half during a
time of macro and political uncertainty. This is a tribute to the
team's effort and risk management. Whilst the second half of the
year is expected to remain challenging the Board remains cautiously
optimistic, despite the difficult conditions for global markets
which are unlikely to improve for some time. I am confident in the
executive team and remain confident that the Group's strategy is
robust and we will continue to build long term shareholder
value."
For further information please contact:
Majestic Corporation Plc
Chairman and Chief Executive Officer
Peter Lai Tel: +852 9726 2890
Chief Financial Officer
Joe Lee Tel: +44 (0) 7539 103 502
Guild Financial Advisory Limited (Corporate Advisor)
Ross Andrews Tel: +44 (0)797 3839767
About the Company
Majestic Corporation is an emerging leader in the precious
metals and non- ferrous metals recycling. Working with suppliers
globally, Majestic plays an integral role in the circular
economy by making resources available for future use.
C HAIRMAN AND CEO'S REPORT
FOR THE PERIODED 30 JUNE 2022
The Board of Majestic Corporation Plc "MCJ" announces the
Company's unaudited interim results for the six months ended 30
June 2022.
Statement from Chairman and CEO
As a vertically integrated organisation, we process, upgrade and
recycle weee, non-ferrous metals products and deliver it to
refineries directly. We continue to source material from the US,
Mexico, Australia and Europe (including the UK) and upgrade the
products through a network of facilities located in Italy and
Malaysia. The first half of the 2022 financial year has been
challenging due to the high level of uncertainty resulting from
geopolitical conflicts, logistical pressures and macroeconomic
headwinds yet the Company has performed well.
The Russian invasion of Ukraine has had a direct adverse
material impact on the business, to both the cost and supply of
precious metals. Russia controls approximately 30% of the world's
"Precious Group Metals" (PGM's) and the invasion has caused
volatility in the market, affecting Majestic's procurement and
operations. The Company's European operation has experienced an
interruption in supply and a decrease in quantities. The Board will
continue to monitor the effects on our supply pressures, logistics,
foreign exchange rate fluctuations and commodity pricing.
In recent months, we have experienced inflationary pressures as
the Company's logistics cost has increased up to three times, and
the delay in shipping container availability has caused major
setbacks. The staff shortages with our operations in USA, Malaysia,
and in our suppliers has meant production has not been maximised
during this period. The second half of the financial year has
started to show signs of reversion to normal supply levels.
This second half of the year will mark the launch of our
inaugural ESG report, which will reveal Majestic's target metrics
on a range of ESG-related focus areas that the team will work on.
This includes working toward greater energy efficiency across
operations and ensuring equal opportunity to the men and women in
the industry and workforce at all levels. The ESG initiatives have
been organised based on themes and focus areas, crafted and
developed alongside ESG advisors.
Looking forward to the current global situation, the rising
interest rates and inflation rates tends to have an adverse impact
on the price of commodities, however there is also usually a period
of resetting in many industries to reflect a more nationalistic
approach and control of a countries' own critical metal supplies.
Majestic is well position to benefit from this, with the core
sectors being precious and industrial metals.
The Board remains cautiously optimistic and continues to
evaluate opportunities for generating value for shareholders.
C HAIRMAN AND CEO'S REPORT
FOR THE PERIODED 30 JUNE 2022
Financial Highlights
-- The 6 months result to 30 June 2022 marks the first interim
results following the successful listing of the company to the AQSE
exchange in March 2022.
-- The turnover for the 6-month period was another strong result at US$12.9m.
-- The Company has retained a strong cash position at 30 June
2022 with cash at bank increasing to US$2.7m (as at 31 December
2021: US$2.5m).
-- Underlying earnings before tax of US$980k was up 28% (2021: US$766k).
Strategic Report
The principal activity of the Group continues to be urban
recycling of precious metals and non-ferrous metals from weee and
auto petroleum catalysts. We have procurement warehouse locations
in the USA, and the UK and long-term supplier in Italy, Lithuania,
Mexico, and Australia. In addition, we have processing facilities
in Malaysia capable of handling twenty thousand tons a year. With
our reputation, quality, and volume, we are able to deliver
directly to refineries.
The success of our strategy rests on the company's profitability
first, and we eliminate risk by hedging our sales, especially at
the time of uncertainty. The result so far has proven very
profitable.
Long Term Objective
The group's long-term objective is to first set up a site in the
UK to train an operation team and eventually open facilities across
Europe and then eventually across the USA.
"Improving performance and profitability in a year of macro and
political uncertainty is a tribute to the team's effort of risk
management. We are confident that MCJ will continue to prosper in
the coming years."
Peter Lai Chairman & CEO
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE PERIODED 30 JUNE 2022
(Expressed in United States Dollar)
Notes
Unaudited Unaudited
30.6.202 30.6.202
2 1
Turnover 4 12,880,410 1 5,493,532
Cost of goods sold (11,530,662) ( 1 4,455,590)
------------- ---------------
Gross Profit 1,349,748 1 ,037,942
Other income 4 88,364 87,721
(359,846
Administrative expenses (458,335) )
------------- ---------------
Profit from operation and before
taxation 5 979,777 765,817
Taxation (148,523) (105,099)
------------- ---------------
Profit for the period 831,254 660,718
Other comprehensive income - -
for the period
------------- ---------------
Total comprehensive income
for the period 831,254 660,718
============= ===============
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2021 & 30 JUNE 2022
(Expressed in United States Dollar)
Unaudited Audited
Notes 30.06.2022 3 1 . 12
.202 1
CURRENT ASSETS
Inventories 8 6,657,285 6,118,375
Trade receivables 9 436,663 1,282,190
Prepayments and deposits 2 ,832,408 2 ,043,368
Amounts due from related
companies 1 ,566,271 1,533,245
Cash in bank and
on hand 2,667,110 2 ,467,428
1 4,159,737 13,444,606
------------ -----------
CURRENT LIABILITIES
Trade payables 10 1 ,991,092 1,354,152
Deposits received 200,990 347,600
Accruals and other
payables 5,890 38,242
Amount s due to related
compan ies 1 ,954,310 1,971,093
3 , 469 ,
Import loans 1 1 2,771,506 272
Tax payable 219,940 131,716
Amount due to director 3,678 -
7,147,406 7,312,075
------------ -----------
NET CURRENT ASSETS 7,012,331 6,132,531
NE T ASSETS 7,012,331 6,132,531
============ ===========
CAPITAL AND RESERVE
Share capital 12 131,652 1
Capital reserve
s 4,767,431 4,767,431
Merger reserves (83,105) -
Retained profits 2,196,353 1,365,099
7,012,331 6,132,531
============ ===========
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE PERIODED 30 JUNE 2022
(Expressed in United States Dollar)
Share Capital Merger Retained
capital Reserves reserve profits Total
s
Balance at 1 January
2021 1 4,767,431 - 629,652 5,397,084
Profit for the year - - - 735,447 735,447
Balance at 31 December
2021 1 4,767,431 - 1,365,099 6,132,531
Balance at 1 January
2022 1 4,767,431 - 1,365,099 6 ,132,531
Shares issued 131,652 - - - 131,652
Profit for the period - - - 831 , 254 831 , 254
Share premium on issue
of shares - - 469,906 - 469,906
IPO costs - - (437,101) - (437,101)
Share-for-share exchange/Other
movements (1) - (115,910) - (115,911)
Balance at 30 June 131,65
2022 2 4,767,431 (83,105) 2,196,353 7,012,331
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE PERIODED 30 JUNE 2022
(Expressed in United States Dollar)
Unaudited Unaudited
30.6.2022 30.6.2021
OPERATING ACTIVITIES
Profit for the period 831,254 660,718
Adjustment:
1 4 , 455
Cost of goods sold 11,530,662 , 590
Operating profit before working capital changes 12,361,916 15,116,308
Changes in working capital
Purchase of inventories (12,069,571) (17,215,810)
(Increase)/decrease in trade and other
receivables 23,461 (2,334,009)
Increase in trade and other payables 581,642 3,824,503
NET CASH GENERATED/(USED) TO OPERATING ACTIVITIES 897,448 (609,008)
INVESTING ACTIVITIES
NET CASH USED TO INVESTING ACTIVITIES - -
FINANCING ACTIVITIES
Withdrawal/(Repayment) of import loans (697,766) 153,257
NET CASH (USED)/GENERATED FROM FINANCING
ACTIVITIES (697,766) 153,257
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS 199,682 (455,751)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR 2,467,428 2,347,117
CASH AND CASH EQUIVALENTS AT OF PERIOD 2,667,110 1,891,366
============= =============
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2022
(Expressed in United States Dollar)
1. GENERAL INFOMATION AND BASIS OF PREPARATION
The Company is a public company, limited by shares, and
incorporated and domiciled in the United Kingdom. The company has
its listing on AQSE Growth Market.
The address of its registered office and the principal place of
business are located at 1 High Street Mews, Wimbledon Village,
London, United Kingdom.
The financial statements are presented in United States
Dollars.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
On 8 March 2022, the Company acquired the entire shareholding of
Majestic Corporation Limited via a share-for-share exchange. The
insertion of the Company on top of the existing Majestic
Corporation Group does not constitute a business combination under
IFRS 3 Business Combinations. This transaction has been deemed to
be an acquisition in line with guidance from the Interpretations
Committee (IFRIC) and as such the consolidated accounts for the
Group are treated as a continuation of the consolidated accounts of
the Majestic Corporation Group.
Under the principles of continuation accounting the consolidated
financial statement of the newly formed Group must reflect:
-- The assets and liabilities of the Majestic Corporation Group
at pre-combination carrying amounts;
-- The retained earnings and other equity balances of the
Majestic Corporation Group at pre-combination carrying amounts;
-- The assets and liabilities of the Company at fair value;
-- The share capital of the Company;
-- The income statement for the current period including the
results for the Majestic Corporation Group up to 8 March 2022 plus
the results for the newly formed Group from 8 March onwards
These interim condensed consolidated financial statements of the
Group are the first set of interim financial statements for the
newly formed Group. The prior period has been presented as a
continuation of the former Majestic Corporation Limited Group on a
consistent basis as if the group reorganisation had taken place at
the start of the earliest period presented, being 1 January 2021.
The prior period comparatives are those of the former Majestic
Corporation Limited Group since no substantive economic changes
have occurred. The consolidated reserves of the Group have been
adjusted in the current period following the share-for-share
exchange to reflect the share capital of the Company with the
difference giving rise to a merger reserve.
Basis of preparation
These interim condensed consolidated financial statements
(Interim Financial Statements) Majestic Corporation Group Plc
comprises the results of the Group for the 6 months ended 30 June
2022.
The consolidated reserves of the Group have been adjusted in the
current period following the share-for-share exchange to reflect
the share capital of the Company with the difference giving rise to
a merger reserve.
The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
UK adopted International Accounting Standard 34, "Interim Financial
Reporting and the Disclosure and Transparency Rules of the
Financial Conduct Authority. The annual financial statements of the
Group will be prepared in accordance with UK adopted International
Financial Reporting Standards. They do not constitute statutory
accounts within the meaning of section 434(3) of the Companies Act
2006 and should be read in conjunction with the financial
statements prepared for the Majestic Corporation Group for the
twelve months ended 31 December 2021, which were prepared in
accordance with International Financial Reporting Standards (IFRS)
and are filed with the Companies Registry in Hong Kong and are
available to shareholders on request"
The information for the period ended 30 June 2022 has neither
been audited nor reviewed and does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006.
3. PRINCIPAL ACCOUNTING POLICIES
The principal accounting policies adopted are set out below.
a. Basis of accounting and accounting policies
The financial statements have been prepared under the historical
cost basis.
b. Revenue recognition
Revenue from the sales of goods is recognised when control of
the goods has transferred, being when the goods have been shipped
to the customer's specific location. Follow delivery, the customer
has full discretion over the usage of the goods, has the primary
responsibility when on selling the goods and bears the risks in
relation to the goods. A receivable is recognised by the Company
when the goods are delivered to the customers as this represents
the point in time at which the right to consideration becomes
unconditional, as only the passage of time is required before
payment is due.
Interest income is recognised as other income as it accrues
using the effective interest method .
c. Cash and cash equivalents
Cash and cash equivalents include demand deposits and other
short-term highly liquid investments with original maturities of
three months or less.
d. Trade and other receivables
Trade and other receivables are stated at estimated realisable
value after each debt has been considered individually. Where the
payment of a debt becomes doubtful a provision is made and charged
to the income statement.
e. Trade and other payables
Trade and other payables are recognised initially at the
transaction price and subsequently measured at amortised cost using
the effective interest method.
f. Translation of foreign currency
Foreign currency transactions during the period are translated
into United States Dollars at the exchange rates ruling at the
transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated into United States Dollars at the
market rates of exchange ruling at the reporting date. Exchange
gains and losses on foreign currency translation are dealt with in
the statement of income and retained earnings.
g. Taxation
The tax expense in the consolidated income statement comprises
current tax payable and deferred tax.
h. Inventories
Inventories are stated at the lower of cost and net realisable
value. In arriving at net realisable value an allowance has been
made for deterioration and obsolescence.
i. Leases
Leases are classified as operating leases and the rentals
receivable or payable under these leases are credited or charged to
the statement of income and retained earnings on a straight-line
basis over the duration of the leases.
j. Going concern
The consolidated financial statements are prepared on the going
concern basis. The financial position of the Company, its cash
flows and liquidity position are described in the interim
consolidated financial statements and notes. The Company has the
financial resources to continue in operation for the foreseeable
future, a period of not less than 12 months from the date of the
report.
4. TURNOVER AND OTHER INCOME
Turnover represents the amounts received and receivables for
goods sold to the customers. Turnover and other income recognised
during the period are as follows:
Unaudited Unaudited
----------- ------------
3 0.6.2022 30.6.2021
----------- ------------
Turnover
12 , 810
Sales to Japan 9,621,693 , 838
2 , 682
Sales to Malaysia 3,258,717 , 694
12,880,410 1 5,493,532
=========== ============
Other income
Interest Income 1,025 1 65
Exchange gain 77,144 87,556
Government subsidies 10,195 -
----------- ------------
88,364 87,721
=========== ============
5. PROFIT FROM OPERATION AND BEFORE TAXAION
Profit from operation and before taxation have been arrived at
after charging:
Unaudited Unaudited
3 0.6.2022 30.6.2021
----------- ------------
Bad debt written off - 83,687
Finance costs 74,616 50,108
Cost of goods sold 11,530,662 1 4,455,590
=========== ============
6. DIRECTORS REMUNERATIONS
Director' s remunerations disclosed is as follows:
Unaudited Unaudited
30.6.202 30.6.202
2 1
---------- ----------
Fees - -
Other emoluments 79 , 286 39, 857
---------- ----------
7 9, 286 3 9, 857
========== ==========
7. STAFF COST
Unaudited Unaudited
30.6.202 2 30.6.202
1
----------- ----------
Salary 6 5 , 922 5 6 , 593
Mandatory provident fund 3, 323 3, 147
----------- ----------
6 9, 245 5 9, 740
=========== ==========
8. INVENTORIES
Inventories comprise entirely Unaudited Audited
of stock in trade.
30.06.2022 31.12.2021
----------- ------------
2 , 481 ,
Stock in warehouse 3,914,286 953
Stock in transit 2,742,999 3 , 636,422
----------- ------------
6 ,657,285 6,118,375
=========== ============
9. TRADE RECEIVABLES
The ageing analysis of the trade receivables, based on invoice
dates, is as follows:
Unaudited Audited
3 0 . 06 31.12.2021
.20 22
---------- -----------
Within one month 436,663 1,280,970
1-3 months - 1,220
Over 3 months - -
---------- -----------
436,663 1,282,190
========== ===========
Trade receivables disclosed above include amounts which are past
due at the end of the reporting period against which the Company
has not recognized an allowance for doubtful receivables because
there has not been a significant change in credit quality and the
amounts are recovered subsequent to the reporting date. The Company
does not hold any collateral or other credit enhancements over
these balances, nor does it have a legal right of offset against
any amounts owed by the Company to the counterparty.
10. TRADE PAYABLES
The ageing analysis of the trade payables, based on invoice
dates, is as follows:
Unaudited Audited
3 0 . 06 .20 3 1.12.2021
22
------------- ------------
Within one month 331,645 472,974
1-3 months 1,311,838 813,090
Over 3 months 347,609 68 , 088
------------- ------------
1 ,991,092 1,354,152
============= ============
11. IMPORT LOANS
The Company has obtained credit facilities from its bankers as
secured by guarantees of the director and a related company
together with fixed deposit of the Company. The loans are interest
bearing at LIBOR+1.45% and repayable in 120 days from the drawdown
date which has multiple repayment dates.
12. SHARE CAPITAL
Unaudited Audited
30.6.2022 31.12.2021
----------- -----------
Issued and fully paid
20,000,000 ordinary shares of GBP0.005
each 1 31 , 652 1
----------- ===========
13. LEASE COMMITMENTS
The Company had the following total future minimum lease
payments payable under non-cancellable operating leases:
Unaudited Audited
3 0.06.2022 31.12.2021
------------ -----------
- not later than one year 34,971 21 , 666
- later than one year and not 37,661
later than five years -
------------ -----------
72,632 21 , 666
============ ===========
14. FINANCIAL RISK MANAGEMENT
Exposure to credit, liquidity, interest rate, foreign currency
and equity price risks arises in the normal course of the Company's
business. The Company's exposure to these risks and the financial
risk management policies and practices used by the Company to
manage these risks are described below.
a. Credit risk management
In order to minimize credit risk, credit approvals and
monitoring procedures are in place to ensure that follow-up action
is taken to recover overdue debts.
b. Liquidity risk management
Ultimate responsibility for liquidity risk management rests with
the board of directors, which has established an appropriate
liquidity risk management framework for management of the Company's
short, medium and long-term funding and liquidity management
requirements. The Company manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets
and liabilities.
c. Market risk management - interest rate risk
The Company draws import loans to maintain stable cashflow. The
loan is interest bearing at LIBOR+1.45%. 5% is the sensitivity rate
used when reporting interest rate risk internally to key management
personnel and represents management's assessment of the reasonably
possible change in interest rates. The Company's sensitivity to a
5% increase and decrease in LIBOR is as follow:
Unaudited Audited
30.06.2022 31.12.2021
----------- -----------
5% increase effect on profit
for the year (1,655) ( 279 )
5% decrease effect on profit
for the year 1,655 279
d. Market risk management - foreign currency risk
The Company undertakes most of the transactions denominated in
United States Dollar with few transactions denominated in Euro. 5%
is the sensitivity rate used when reporting foreign currency risk
internally to key management personnel and represents management's
assessment of the reasonably possible change in foreign exchange
rates. The Company's sensitivity to a 5% increase and decrease in
Euro against United States Dollar is as follow:
Unaudited Audited
30.06.2022 31.12.2021
----------- -----------
5% increase effect on profit
for the year (96,800) (164,111)
5% decrease effect on profit
for the year 96,800 164,111
15. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net loss
for the period attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares in issue
during the period. As the condensed consolidated interim financial
statements have been presented as a continuation of the existing
group, the number of shares taken as being in issue for both the
current and preceding periods are deemed to be the number of
ordinary shares issued by Majestic Corporation Plc to acquire
Majestic Corporation Limited in the share for share exchange. The
weighted average number of shares is then adjusted to reflect
changes in the number of ordinary shares issued in Majestic
Corporation Limited that occurred during the previous period.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
Unaudited
30.06.2022
----------
Profits attributable to ordinary equity
holders of the Company 831,254
Average number of shares 20,000,000
Earnings per share (cents per share) 4.2
There have been no other transactions involving actual ordinary
shares or potential ordinary shares between the reporting date and
the date of authorisation of this financial information.
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