King Tech International Inc. - Preliminary Unaudited Results
ANNOUNCEMENT OF PRELIMINARY UNAUDITED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2009
The Board of King Tech International Ltd (the "Company" or the "Group") announces the unaudited preliminary results for the year ended 31 December 2009. The Chairman`s statement and extracted financial information is provided below. The Company will announce its audited results as soon as they are available.
BOARD STATEMENT
The period under review has been one of the most challenging for the Company and road paving industry in mainland China ("PRC") and the Hong Kong Special Administrative Region ("HKSAR"). Although the business was severely constricted, it continued to operate through the global financial crisis and adapt to these adverse conditions.
The Company has been successful in expanding its Asphalt Rubber paving territory to Xinjiang and Hebei, PRC. This success represents a new milestone for King Tech and its ability to work with local governments at appropriate levels to assure access to the contract process. Xinjiang and Hebei will be one of the core business areas and extended term contracts in these regions are expected in the coming years.
Financial results
Turnover for the year was RMB 1.92 million (2008: RMB 8.12 million). The decrease in turnover reflects a changed emphasis in the manner in which the core business relates to its Chinese provincial joint venture businesses.
A significant cost-reduction program was undertaken to reduce the underlying cost base of the Group. Administration expenses were reduced by 40% and finance costs were reduced by 50% during the year. For strategic reasons, at the same time, the Company increased its marketing so as to gain access to more lucrative contracts. The end of year cash position of the Company was RMB 2,090,696 (2008: RMB 1,833,634).
The Group`s loss after taxation was RMB 16,243,933 (2008 : loss after taxation of RMB 22,561,458)and the basic and full diluted loss per share was 0.287 (2008: basic and fully diluted loss per share of 0.431).
Dividends
The Directors do not propose to declare a dividend.
Management Team
All members of the management team continue to work extremely hard to unlock new business opportunities and lead the Group back into growth. They believe passionately in the quality of their work and the direction of the Group. Their focus on creative output has resulted in a record winning year for industry awards.
Outlook
Clients and customers know the Company for its reliability and product quality. King Tech has created substantial business opportunities but needs considerable additional capital resources, primarily road paving machinery, to expand the core business so it can win bids on sizeable contracts (which increased marketing has been responsible for). A number of municipal and provincial demonstration projects are coming to fruition which the Company believes will create a strong preference for King Tech`s quality built roads. King Tech is the one PRC and HKSAR provider of internationally approved AR through its membership of the Arizona (USA) based Rubber Pavement Association
The Group is currently party to a number of collaboration opportunities with the Chinese provincial authorities as well as potential undertakings with toll road authorities and road owners in China. Moreover, the Company has been working closely with the HKSAR government and the local polytechnic university to develop Asphalt Rubber being the only specialist supplier throughout the region. The Group is confident that the AR business will not only quickly return to pre-financial crisis levels but will significantly increase beyond it.
We at King Tech have made the necessary sacrifices to enable the Company to turn around and prosper in the future.
Paul Lee
Chief Executive Officer
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