2008 Interim Results. Six months ended 30 June September RCG Holdings Limited

Transcription

1 2008 Interim Results Six months ended 30 June 2008 September 2008 RCG Holdings Limited 1

2 Agenda Highlights Corporate Introduction Business Review Financial Review Operational Highlights Business Outlook Appendix 2

3 Presentation Team Dr. Raymond Chu Chairman & Chief Executive Officer Responsible for the Group s global business development, operation & management Over 20 years experience in property and corporate finance matters Bachelor Degree in Law, Bristol University Co-founder of RCG KC Chong Chief Financial Officer Responsible for the Group s strategic financial planning, project accounting, financial budgeting and consolidated accounts Over 10 years experience in public listed companies A member of the Malaysian Institute of Accountants and CPA Australia Bachelor Degree in Accountancy, the University of Western Australia 3

4 Highlights Financial Highlights - Revenue increased by 65.3% to 63.9m (1H 2007 : 38.7m) - Profit after tax increased by 74.2% to 20.9m (1H 2007 : 12.0m) - Cash conversion ratio increased to 70.1% (1H 2007 : 23.7%) Operational Highlights - Acquisition of majority holding (60.0%) in Vast Base Technology Limited - Potential listing on the Hong Kong Stock Exchange Limited - Successful product launches into the enterprise and consumer sectors - Extensive contract wins in the Middle East and China - Successful collaboration with major PC brands 4

5 Corporate Introduction 5

6 Corporate Introduction Vision Statement : Bringing convenient means of security to everyday life Business Philosophy: Delivering innovative security solutions through strong sales networks to create sustainable growth and profits Operations: Biometrics, RFID & Security Market leader and most established Biometrics & RFID company in APAC Currently within FTSE AIM Top 100 More than 300 employees world-wide Market Capitalisation : million (26 Aug 2008) 6

7 Recognition & Awards RCG China Limited certified compliant with ISO 9001 : 2000 standard (March 2008) Industry awards: Best RFID system integrator in China and the Most well known RFID leading company in China awarded by the 3rd China international RFID technology Forum 2008 and Technology Exhibition (April 2008) Top five Emerging Tech Brand Award by PC.COM (January 2008) Asia Pacific Super Excellent Brand 2007/2008 award by Asia Entrepreneur Alliance (February 2008) 7

8 Business Review 8

9 Market Update By 2014, the Asia Pacific Region will generate the highest revenues for the Biometrics industry, surpassing Europe and United States. (1) The market value for Biometrics in the Asia Pacific region will grow to US$1.6 billion by 2012 from US$126 million in 2007, representing a Compounded Annual Growth Rate of 67%. (2) The global RFID market will increase from US$5.3 billion in 2008 to US$26.5 billion by (3) The 2008 spending on RFID in East Asia will be US$2.8 billion of US$5.3 billion globally. A majority of the 2008 East Asian spending is in China. (4) Sources: (1). The Future of Biometrics by Acuity Market Intelligence (2). Biometrics Markets in Asia Pacific by Frost & Sullivan (3). IDTechEx RFID Market projections 2008 to 2018 by IDTechEx (4). RFID in China by IDTechEx 9

10 Market Trends New analysis by Frost & Sullivan recently pointed towards the fusion of biometrics and RFID as the best technology for security 1 RCG identified this trend 2 years ago and successfully developed security products catering for the convergence and integration of the two technologies Sources: 1. Advances in Emerging Biometrics and RFID Technologies for Security, Frost & Sullivan, August

11 Business Segments Consumer Segment - Provision of innovative and reliable products for every day use Enterprise Segment - Provision of security-related solutions and products to modern enterprises Project Solutions Segment - Provision of security and enterprise automation solutions using biometrics, RFID and other technologies Major Achievements - The first facial recognition logon certified by Windows Vista - First of its kind notebook anti theft combining data communication and remote control ability Major Achievements - Convergence of biometrics and RFID devices - Multi modal biometrics security system - Slim, aesthetic fingerprint access control devices Major Achievements - RFID Ticket anti counterfeit system for LA Galaxy China Tour RFID fleet management solutions for the most established ports in Malaysia and PRC 11

12 Sales Coverage Sales Coverage of 22 areas globally. Number of client companies America USA Europe Greater China China Hong Kong Africa / Middle East Jordan Kuwait Great Britain Lebanon Qatar Oman South Africa UAE Macau North Asia South East Asia Brunei Cambodia Indonesia Malaysia Philippines Thailand Singapore Vietnam Japan Australia Australia Sales Coverage (Number of countries)

13 Major Projects Coverage Greentown Hospital Tianjin Port L.A. Galaxy Tour 2008 Tsing Hua University Phoenix Satellite TV Dubai International Financial Centre Jotun Group Bond Communications Emaar Properties PJSC project Rak Properties Sharjah Charity Johor Port Bhd 13

14 Financial Review 14

15 1H 2008 Profit and Loss 1H H 2007 Growth Turnover ( m) % COGS ( m) (31.8) (19.6) 62.2% Gross profit ( m) % Gross profit margin (%) % Central costs ( m) (12.0) (7.8) 53.8% EBITDA ( m) % Taxation ( m) (0.1) (0.0) - Profit after tax ( m) % Net profit margin (%) % Diluted EPS (p) % Exchange rate 1H 2008: 1 = HK$15.40 Exchange rate 1H 2007: 1 = HK$

16 Geographical Markets 1H m % 18.6% 59.8% Greater China Middle East 20.3% South East Asia Others H H2 007 Greater China Middle East South East Asia Others 1H 2007 Geographical growth 1H 2008 Greater China, 133.3% 58.4% 2.6% 13.2% 25.8% Middle East, 30.0% South East Asia, 69.0% Others, -20.0% Greater China Middle East South East Asia Others -50% 0% 50% 100% 150% 16

17 Composition by Business Segments 1H H 2007 Projects 16.3% Consumer Projects 11.1% Consumer 44.4% 4 5.5% 39.3% % Enterprise Enterprise 17

18 Breakdown by Business Segments 1H H 2007 Turnover ( m) Composition (%) Gross Margin Turnover ( m) Composition (%) Gross Margin Consumer e.g. Biomirage Storage Box, FxSecure Key, FxGuard Window Logon Enterprise e.g. i-series, s-series, m-series access control devices Projects / Solution e.g. event-ticketing, theme park solutions % 42.4% % 32.1% % 50.5% % 64.4% % 71.0% % 60.6% Total % 50.2% % 49.2% 18

19 1H 2008 Cash Flow Analysis m 1H H 2008 Operating profit Cash generated from operations Cash and cash equivalents 1H H 2007 Analysis Operating profit ( m) Increase due to higher revenue generation Cash generated from operations ( m) Cash and cash equivalents ( m) Cash conversion ratio at 70.1% (1H 2007, 23.7%) Decrease due to acquisitions of Chance Best & Vast Base Debtors turnover days Improved credit control 19

20 1H 2008 Balance Sheet Fixed Assets (including prepaid lease) Long Term Assets (Contract Rights) Goodwill and Intangible Assets (including R&D) 1H 2008 ( m) 1H 2007 ( m) Increase/ (Decrease) % % Current Assets (0.3%) Total Liabilities (18.4) (7.6) 142.1% Net Assets % Net Cash (38.6%) Exchange rate 1H 2008: 1 = HK$15.40 Exchange rate 1H 2007: 1 = HK$

21 Operation Highlights 21

22 Appointment of Non-Executive Director Jonathan Michael Caplan QC Appointed as Queen s Counsel in 1991 Legal specialisation includes criminal and civil fraud, corporate liability, media law and contempt, health and safety, gross negligence, public enquiries and disciplinary tribunals Current Chairman of BAFTA Management Limited 22

23 Proposed Listing Proposed listing on the main board of the Hong Kong Stock Exchange Limited in addition to the Group s existing quotes on the AIM and PLUS markets Application made on 14 August 2008 Increased liquidity and ease of access for Asian Investors The Group is expected to comply with a more stringent level of Code on Corporate Governance Practices 23

24 Geographical Expansion Extensive penetration in China Substantial project wins in the Middle East and Greater China Strengthen ties with partners and distributors in Southeast Asia 24

25 Corporate Social Responsibility 25

26 Business Outlook 26

27 Business Strategies Consumer Segment Enterprise Segment Project Solutions Segment - Provision of innovative and reliable products for every day use - Target emerging regions including Middle East, Greater China - Alliances with strategic partners to promote and distribute the products - Product bundling strategy - Leading and creating high value products and systems integrated with multi-modal technologies and applications - Focus on markets with high growth potential by expanding distribution networks - High quality control and provision of after sales services - Provision of turnkey solutions Ticket anti-counterfeit: - Event ticketing Healthcare: - Patient Monitoring System - Enterprise Asset Tracking Logistics: - Container Tracking Machine-to-Machine (M2M): - Fleet Management - Electricity Distribution Solution 27

28 Competitive Advantages Change of competitive landscape Increased demand from private sectors Geographical shift to Asia Pacific and Greater China Increasing demand for multi-modal biometrics RCG s competitive advantages Focused on enterprise and consumer sectors Extensive network in the Asia Pacific region Quality products ready for solution integration Capabilities of convergence of different technologies 28

29 Sustainable Growth Strong organic growth, healthy profit margin Innovative solutions based on reliable and high quality products Strong international sales team and distribution network with reputable partners Comprehensive IP generation and protection Benefited from growth in the market within which RCG operates 29

30 Summary Strong performance during 1H 2008 A shift of business model from product sales to total solutions Market and geographic shift has created a more favorable competition environment Confident of continuing robust growth into 2H

31 Appendix 31

32 Appendix 1 Shareholding information Current share price: 61.5p (26 Aug 2008) 6 month range in 2008: 50p (52 weeks low) 116p (52 weeks high) Number of shares in issue: 232,267,677 units, including 657,677 Treasury Shares Major shareholders as at 26 Aug 2008 Veron International Limited : 27.6% The Offshore Group Holdings Limited : 26.7% Dr. Raymond Chu & Full Future Group Limited : 7.7% 32

33 Appendix 2 Global Presence Los Angeles * Beijing Tianjin Jordan * Lebanon Shanghai Hong Kong Shenzhen Saudi Arabia Syria * * * * Kuwait Dubai Macau * Taipei Bangkok New Delhi ** * *** Hanoi Kuala Lumpur Cambodia Singapore Jakarta Johannesburg * * ** * Sydney RCG Headquarters & Regional Offices RCG Distributors 33

34 Important Notice This presentation has been prepared by RCG Holdings Limited (the "Company") in connection with a presentation to investors and proposed investors in the Company. This presentation does not constitute a prospectus or admission document relating to the Company, nor does it constitute or form part of any offer or invitation to purchase, sell or subscribe for, or any solicitation of any such offer to purchase, sell or subscribe for, any securities in the Company nor shall this presentation or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor. No reliance may be placed, for any purposes whatsoever, on the information contained in this presentation or on its completeness and this presentation should not be considered a recommendation by the Company or any of its affiliates in relation to any purchase of or subscription for securities of the Company. No representation or warranty, express or implied, is given by or on behalf of the Company, or any of its respective directors, partners, officers, employees, advisers or any other persons as to the accuracy, fairness or sufficiency of the information or opinions contained in this presentation. Save in the case of fraud, no liability is accepted for any errors, omissions or inaccuracies in such information or opinions. This presentation is being made only in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO"), (ii) persons in the business of disseminating information within the meaning of Article 47 of the FPO, (iii) high net-worth companies, unincorporated associations and other bodies within the meaning of Article 49 of the FPO and (iv) persons to whom it is otherwise lawful to make the presentation. The investment or investment activity to which this presentation relates is available only to such persons and will be engaged in only with such persons. Persons who fall outside categories (i) - (iii) above must check that they fall within category (iv). If they do not, they may not attend this presentation. Any person who does not fall within categories (i) - (iv) above may not rely on or act upon the matters communicated at this presentation. Any person falling outside categories (i) - (iv) who has received any document forming part of this presentation must return it immediately. Neither this presentation nor any copy of it may be (i) taken or transmitted into the United States of America, (ii) distributed, directly or indirectly, in the United States of America or to any US person (within the meaning of regulations made under the Securities Act 1933, as amended), (iii) taken or transmitted into or distributed in Canada, Australia, the Republic of Ireland or the Republic of South Africa or to any resident thereof, or (iv) taken or transmitted into or distributed in Japan or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of the securities laws or the laws of any such jurisdiction. The distribution of this document in other jurisdictions may be restricted by law and the persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. This presentation is being made on the basis that the recipients keep confidential any information contained herein or otherwise made available, whether orally or in writing, in connection with the Company. This presentation is confidential and must not be copied, reproduced, published, distributed, disclosed or passed to any other person at any time without the prior written consent of the Company. The information contained in this presentation may constitute inside information for the purposes of the Criminal Justice Act 1993 or the market abuse regime under Part VIII of the Financial Services and Markets Act 2000 and that, without limiting the obligations imposed under those Acts, you acknowledge that you will not deal in (or encourage any other person to deal in) the shares or securities of the Company nor base any behaviour on such information except in accordance with these Acts. 34