AFG Aquatic Food

TIDMAFG

RNS Number : 9533G

Aquatic Foods Group PLC

10 March 2015

 
 Press Release   10 March 2015 
 

Aquatic Foods Group Plc

("Aquatic Foods", the "Company" or the "Group")

Trading Update

Aquatic Foods Group Plc (AIM: AFG), a leading Chinese marine foods and seafood processor and producer, supplying to export and local markets, is pleased to provide the following positive trading update for the year ended 31 December 2014.

The Board is pleased to confirm that the Company expects to report consolidated results in line with expectations for the financial year ended 31 December 2014. Unaudited management accounts show revenues reaching approximately RMB 856 million (GBP89.1 million*), a 28% increase on the prior year (2013: RMB 667 million).

Growth in revenue was achieved across all product categories, with fish accounting for approximately 68% of revenues, followed by sea cucumber at approximately 16%. Compared to 2013, revenue generated from fish and sea cucumber increased by approximately 29% and 12% respectively. Gross margins were broadly stable across all product categories, achieving approximately 32% in aggregate in the year. Aquatic Foods remains highly cash generative and the Group maintains its strong balance sheet with cash as at 31 December 2014 amounting to RMB193 million approximately GBP20 million (2013: RMB 153 million). This robust cash position excludes the proceeds from the Placing and Admission to AIM, which occurred post period end on 3 February 2014 and totalled GBP 9.3 million.

As at 31 December 2014, Aquatic Foods had 50 regional distributors (2013: 48), covering 16 provinces, municipalities and autonomous regions in China, and hopes to capitalise on the increasing levels of disposable income currently seen across China which is occurring for both urban and rural residents. In 2014, the national per capita disposable income saw a real increase of 8.0% which the Group believes will lead to increased demand for healthy sustainably sourced pre-processed and ready to eat products. The Group's products are sold by a number of end retailers, including Walmart, Metro, RT-Mart and FS Mart. Aquatic Foods also exports its products to 11 countries, with Japan, South Korea and USA being the largest export markets for the Group. Revenue from exported products equated to approximately RMB 79.5 million, accounting for 9.3% of aggregate revenue in 2014 compared to 10.1% in 2013, which is in-line with the Group's strategy to increase its presence within the PRC.

Li Xianzhi, Chief Executive Officer of Aquatic Foods Group Plc, said: "The Board is extremely pleased with the excellent progress that the Group has made in 2014 and also with the strong start to the current financial year. Not only has Aquatic Foods seen strong organic growth in our Chinese domestic market but the Group has also successfully raised GBP9.3 million and had its shares admitted to trading on the AIM market in London. The significance of our AIM listing is that it will expedite our strategic plan of expanding our processing capabilities and distributor network across China, in order to further increase sales.

"On the back of continuing growth in China's per capita wealth and the resultant higher standard of living, demand has started to move towards pre-processed and ready to eat products as opposed to the procurement of daily foods from traditional markets. These consumers are the major consumption group of natural seafood products as they pursue a healthy lifestyle. Such consumers are concerned about food hygiene and safety and look to recognised branded goods where there is a perception of enhanced food safety. As a leading PRC marine foods and seafood processor, with a history in servicing demanding export markets, Aquatic Foods is known for adopting the highest standards for quality, safety and sustainability, and the Board is optimistic that Aquatic Foods' growth will be supported by its continued commitment to produce high-end, pre-processed, seafood products and that 2015 will be a promising year for the Group."

The Group expects to announce its Preliminary Results for the year ended 31 December 2014 in late April 2015 at which point it plans to hold an analyst briefing. Further details of the exact date of the release of the Group's results and the arrangements for the analyst briefing will be announced in due course.

*For illustrative purposes the exchange rate as at 31 December 2014 was 1 GBP: 9.6 RMB.

- Ends -

For further information:

 
 Aquatic Foods Group Plc 
 Sean Lim, Finance Director      Tel: +44 (0) 20 7398 
                                                 7719 
 John McLean, Deputy Chairman   www.aquatic-foods.com 
 
 
 SP Angel Corporate Finance LLP 
  Nominated Adviser and Broker 
 Stuart Gledhill / Liz Yong       Tel: +44 (0) 20 3470 
                                                  0470 
                                     www.spangel.co.uk 
 

Media enquiries:

 
 Abchurch Communications Limited 
 Henry Harrison-Topham / Jamie Hooper / Canace     Tel: +44 (0) 20 7398 
  Wong                                                             7719 
 AquaticFoods@abchurch-group.com                 www.abchurch-group.com 
 

Notes to Editors:

Aquatic Foods Group is a leading marine foods and seafood processor and supplier based in China. The Group initially built its business through focusing on the export market (principally Japan under the "Kanwa Foods" brand), and subsequently established the "Zhenhaitang" brand in 2007 in mainland China to take advantage of the growing market driven by growing disposable income within the Chinese middle-classes and a more health conscious consumer base.

The Group benefits from excellent food safety procedures developed over many years which have helped the Group to build a strong track record of supplying its products into overseas markets. This track record has enhanced the perception of the quality and reliability of the Group's products in China and has allowed the Group to expand significantly into local markets as demand for seafood products has increased. In a market that has seen regular public health scares relating to food safety, the Group considers that its adherence to these standards to be a key strength. The Group has obtained the following key standards:

   -      ISO 9001 Quality Management System certification 
   -      HACCP Food Safety System certification 
   -      BRC certification; and 
   -      Marine Stewardship Council certification 

Aquatic Foods works with a network of distributors to effectively market its products in China. The Group has continued to grow its distributor relationships and now distributes its products in 16 provinces, municipalities and autonomous regions in China through 50 regional distributors. These distributors in turn sell the Group's products to sub-distributors and retailers, including supermarket chains and hypermarkets.

Further information can be viewed at www.aquatic-foods.com.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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