TIDMCFC

RNS Number : 9800T

China Food Company PLC

15 December 2011

 
 Press Release   15 December 2011

China Food Company Plc

("China Food" or the "Company")

Trading Update

China Food Company plc (AIM: CFC), a leading Chinese manufacturer of cooking and dipping sauces, today provides an update on trading.

Further to the announcement of 18 November 2011, the Company is pleased to announce that:

 
 --   Overall revenues for the year to 31 December 2011 are 
       expected to reach GBP40 million (2010: GBP35.9 million) 
 --   Revenues from the Company's core soya sauce products are 
       expected to show growth of in excess of 20% 
 --   China Food remains profitable after accounting for launch 
       of 'Xaka' soya sauce and the Company's branding and launch 
       investment spend of approximately GBP3.5 million in the 
       last three months, which is in addition to the GBP0.9 
       million of preparatory marketing expenses that was incurred 
       in H1 2011 
 --   After allowing for these costs, the Board now expects 
       profit before interest and tax for the year ending 31 
       December will not be less than GBP1 million 
 --   Cash at bank at 31 October 2011 of GBP7.6 million, and 
       net debt of GBP10.1 million 
 --   The Company paid a maiden dividend in November 2011 
 --   Net assets at 31 October 2011 were approximately GBP37 
       million 
 --   The Company now expects to have 92 regional distributors 
       for its 'Xaka' soya sauce by the year end (up from 71 
       in mid-November) 
 --   Rollout of 'Xaka' continues to be well received and gross 
       margins remain in line with management expectations 
 --   The Company remains in discussions regarding the disposal 
       of its animal feed business 
 --   The Board is currently reviewing the management team with 
       a view to continuing to strengthen it

The Company expects to start 2012 with good momentum and will update shareholders on further progress and the outlook for 2012 following Chinese New Year in late January.

- Ends -

For further information:

 
 China Food Company Plc 
 John McLean, Non-Executive Chairman        Tel: +44 (0) 7768 031 
                                                              454 
 Raphael Tham Wai Mun, Chief Executive 
                                         www.chinafoodcompany.com 
 Numis 
 David Poutney - Head of Corporate           Tel: +44 (0) 20 7260 
  Broking                                                    1000 
 
  finnCap (Nomad) 
 Geoff Nash / Ben Thompson (Corporate        Tel: +44 (0) 20 7220 
  Finance)                                                   0500 
 Simon Starr (Broking)

Media enquiries:

 
 Abchurch Communications 
 Henry Harrison-Topham / Joanne Shears     Tel: +44 (0) 20 7398 
  / Mark Dixon                                             7709 
 mark.dixon@abchurch-group.com           www.abchurch-group.com

Notes to Editors:

China Food is a well-established food manufacturing business based in Shandong province in the People's Republic of China, a region with a population of circa 94 million. A recent report identified Shandong province as one of the five most attractive 'city clusters' in China, due to the high number of large cities in the province*. The Group manufactures numerous different product lines including soya sauce and bean paste, all targeting the Chinese domestic market, and sold through a network of distributors and outlets of supermarket chains in the north-eastern region of the PRC, such as Tesco, Walmart, Carrefour and Jialejia.

The Chinese sauces, dressings and condiments market is expected to be worth CNY115 billion (US$15 billion) by 2013**, driven by Chinese population growth and economic prosperity. The Chinese domestic market is rapidly expanding, and the Group is well positioned to benefit from China's demographic growth and increased urbanisation.

The first phase of expansion is now complete at the Group's new factory, which was officially opened on 12 May 2010, and this doubles China Food's current capacity. It is proposed that in due course there will be a further two phases, adding capacity of 100,000 tonnes through the building of 230 additional silos. The Group plans to expand into the neighbouring provinces such as Henan and Hebei.

The Group also operates an animal feed business, Fuss Feed. This business produces premix, concentrate and compound feedstuffs, and is the third largest animal feed business in Shandong, an important province for the production of livestock in China.

The Group's operations are highly scalable and able to support further growth, and with net assets of GBP37 million (as at 31 October 2011), the prospects for China Food are strong. Further information on China Food Company can be found at www.chinafoodcompany.com.

*McKinsey Quarterly Report: Is your emerging market strategy local enough?, April 2011

**Source: Datamonitor report: Sauces, Dressings and Condiments in China to 2013, April 2010

This information is provided by RNS

The company news service from the London Stock Exchange

END

TSTDKQDKPBDDOBD

China Food Co. (LSE:CFC)
Historical Stock Chart
From Aug 2024 to Sep 2024 Click Here for more China Food Co. Charts.
China Food Co. (LSE:CFC)
Historical Stock Chart
From Sep 2023 to Sep 2024 Click Here for more China Food Co. Charts.