17 August 2006
Gold Frost Limited
("Gold Frost" or "the Company")
Unaudited Interim Results for the six months ended 30 June 2006
Gold Frost (ticker: GLF), the designer, developer and distributor of kosher
chilled, frozen and dairy food products announces its unaudited interim
financial results for the six months ended 30 June 2006.
Financial highlights:
* Revenues increased by 27.8% to $5.23m (H1 2005: $4.09m)
* Gross profit increased by 39.4% to $2.74m (H1 2005: $1.97m) with gross
margin improved to 52.4% (H1 2005: 48.1%)
* Operating income increased by 56.0% to $1.74m (H1 2005: $1.12m)
* Profit before tax increased by 64.5% to $1.94m (H1 2005: $1.18m)
* Net Profit increased by 78.5% to $1.39m (H1 2005: $0.78m) amounting to
93.4% of 2005 full year net profit (2005: $1.49m)
* Fully diluted earnings per share increased by 52.6% to 2.9 cents (H1 2005:
1.9 cents)
* Successful initial public offering and admission to AIM in March 2006 with
offering oversubscribed, raising proceeds of �4.5m through a placement of
ordinary shares with institutional investors
* Net cash of $12.2m (equating to 23 cents per ordinary share) as at 30 June
2006
Operating highlights:
* Increased revenues primarily due to increase in sales and marketing of
existing products to new and existing customers in Israel
* Growth in all product segments
* Approximately 70% of sales from its main product lines of Lurpak spreadable
butter, butter, Fetina, Swedish Lo-Chol and Odam
* Continued investment in developing new innovative products with health
benefits
* Two new products with health benefits released in the first six months of
2006, with another new product scheduled for release this quarter
Commenting on the results, Zwi Williger, Chief Executive Officer, said: "We are
very excited about our strong results for the second quarter and the first half
of 2006. We were able to achieve our revenue growth primarily through
increasing sales of our existing products to new and existing customers. We are
also pleased with the successful launch of two new products into the market and
expect to launch an additional product this quarter. Our strong financial
results for the first six months of 2006 demonstrate Gold Frost's ability to
capitalise on the growing interest of consumers in our current market for both
kosher and health products. The Company's growing product portfolio and
consumer demand for healthier foods means that there is a significant market
opportunity for Gold Frost to gain share within the dairy kosher and health
food market. The successful completion of our admission to AIM is a major step
for Gold Frost, providing us with additional capital to pursue our strategic
international expansion and product development whilst, at the same time,
helping to raise our international profile."
"The fundamentals of our business are strong," concluded Mr. Williger. "Our
innovative approach to the rapidly expanding kosher and health food market
continues to drive revenue and margin growth. In addition, we are making
progress with our strategic plan to expand internationally. We look forward to
the remainder of the year."
Enquiries:
Gold Frost Ltd
Zwi Williger, Chief Executive Officer +972 544 324924
Corporate Synergy Plc +44 207 448 4400
Luke Ahern / David Seal
Overview
Gold Frost is pleased to report a strong operating performance in the first six
months of 2006, reflecting the Company's success in increasing sales of its
existing products in Israel.
Revenues for the first six months of 2006 increased by 27.8% to $5.2m compared
with the corresponding period last year and Net Profit increased by 78.5% to
$1.39m (H1 2005: $0.78m). Gross margins improved to 52.4% (H1 2005: 48.1%) due
to tight control on costs as well as increased sales of higher margin branded
products.
The first six months of 2006 saw an increase in demand for all segments of Gold
Frost's products. Growth was driven by several factors. First, the sales team
was increased, enabling the Company to gain more access to existing customers
and to new customers. Secondly, the Company's products continued to gain market
acceptance due to a combination of superior taste and the fulfilment of kosher
quality assurance standards. Approximately 70% of sales were generated from its
main product lines of Lurpak spreadable butter, butter, Fetina (kosherised feta
cheese), Swedish Lo-Chol and Odam (an Edam style cheese).
The Company's growth strategy is to broaden the variety of branded kosherised
products that are great tasting and target them at the health conscious
consumers worldwide. In February 2006 the Company launched a kosherised "Lurpak
Spreadable Lighter" brand, which has 25% less fat and 35% less cholesterol when
compared to the "regular" product and has an increased shelf life of ten
months. In May 2006 the Company launched in Israel a kosherised light "Fetina"
which has 57% less fat compared to the "regular" Fetina product with 0%
cholesterol. Both products have received a strong initial uptake from
consumers. Gold Frost plans to launch another product in the third quarter.
Outlook
The Company's growing product portfolio and consumer demand for healthier foods
means that there is a significant market opportunity for Gold Frost to gain
share within the dairy kosher food market, which is estimated at $1.5bn per
annum in Israel alone for 2005.
Whilst the Company has yet to be granted its import license in the U.S., it
continues to explore ways to enter into both the U.S. and other markets.
Gold Frost has continued its strong top line and earnings momentum in the first
six months of the year, with improved margins being experienced at all levels.
Although the Company anticipates a degree of disruption from the recent
conflict in Israel, current trading remains robust and the Company look forward
to another year of strong growth in the current domestic market.
Profit and Loss statement
(US$ `000s) Unaudited Audited
Six months Six months Year
ended ended ended
June 30, June 30, December 31,
2 0 0 6 2 0 0 5 2 0 0 5
Sales 5,232 4,093 8,222
Cost of sales (2,489) (2,125) (4,318)
Gross profit 2,743 1,968 3,904
Operating expenses:
Sale and marketing (465) (834) (1,766)
General and administrative (536) (17) (31)
Total operating expenses (1,001) (851) (1,797)
Profit from operations 1,742 1,117 2,107
Financial income, net 197 62 117
Profit before tax 1,939 1,179 2,224
Income tax (550) (401) (735)
Net profit 1,389 778 1,489
Earnings per share (EPS)
(US$ Cents)
Basic 2.9 1.9 3.7
Fully diluted 2.9 1.9 3.7
Shares used in computation
of basic EPS 48,097,868 40,000,000 40,000,000
Shares used in computing
fully diluted EPS 48,227,972 40,000,000 40,000,000
Balance Sheets
(US$ `000s) Unaudited Audited
June 30, June 30, December 31,
2 0 0 6 2 0 0 5 2 0 0 5
Assets
Current assets
Cash and cash equivalent 11,592 4,526 4,281
Marketable securities 651 10 -
Related parties 2,247 1,045 1,443
Other receivables 36 1 67
Inventories 1,309 765 1,351
Total current assets 15,835 6,347 7,142
Fixed assets 317 - -
Other assets 2 - -
Total assets 16,154 6,347 7,142
Liabilities and equity
Current liabilities
Trade accounts payables 2,073 2,045 1,875
Other payables and current 1,095 889 1,165
liabilities
Total current liabilities 3,168 2,934 3,040
Accrued Severance Pay 7 - -
Shareholders' equity
Share capital 119 54 54
Additional paid in capital 7,200 387 387
Foreign currency translation 502 (86) (108)
adjustments
Retained earnings 5,158 3,058 3,769
12,979 3,413 4,102
Total liabilities and equity 16,154 6,347 7,142
Statements Of Cash Flows
(US$ `000s) Unaudited Audited
Six months Six months Year
ended ended ended
June 30, June 30, December 31,
2 0 0 6 2 0 0 5 2 0 0 5
Cash flows from operating activities:
Net Profit for the period 1,389 778 1,489
Adjustments to reconcile net profit to net
cash provided by operating activities:
Gain on trading investments (1) - -
Purchase of trading investments (629) (10) -
Deferred income tax (2) - -
Depreciation 48 - -
Decrease (increase) in other receivables 32 - (68)
Decrease (increase) in inventories 89 300 (313)
Increase (decrease) in trade accounts 125 150 (13)
payable
Increase (decrease) in other payables and (108) 167 447
current liabilities
Increase in Related parties balance (726) (630) (1,026)
Accrued severance pay, net 7 - -
Net cash provided by operating activities 224 (23) 516
Cash flows from Investing activities:
Additions to fixed assets (365) - -
Net cash used in investing activities (365) - -
Cash flows from financing activities:
Proceeds from IPO 6,878 - -
Decrease in short-term bank credit - (380) (371)
Net cash provided by (used in) financing 6,878 (380) (371)
activities
Effect of exchange rate changes on cash 574 (273) (288)
and cash equivalents
Increase (decrease) in cash and cash 7,311 102 (143)
equivalents
Cash and cash equivalents at the beginning 4,281 4,424 4,424
of the period
Cash and cash equivalents at the end of 11,592 4,526 4,281
the period
Note to the Interim Results - Basis of Preparation:
The results for the six months ended 30 June 2006 are unaudited. They have been
prepared on accounting bases and policies that are consistent with those used
in the preparation of the financial statements of the company for the 12 months
ended 31 December 2005, which were prepared with accordance with International
Financial Reporting Standards (IFRS).
Notes to Editors:
Gold Frost is a designer, developer and distributor of branded kosher dairy
food products with 18 varieties of products currently on sale in Israel. The
Company possesses proven R&D capability for "koshering" chilled, frozen, diary
and other products, a number of which have a health advantage by virtue of
being low in fat and cholesterol.
END
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