ZTC Telecoms plc

Trading update

RNS Number : 7504F
ZTC Telecommunications plc
13 October 2008
 

ZTC Telecommunications plc

('ZTC' or the 'Company')

Notification of release of annual accounts and Q3 trading update


The Board of ZTC wishes to announce that it intends to release its final results of the year ended 30 June 2008 on 17 November 2008.


In its pre-close statement made on 1 July 2008, the company announced that profit before tax for the year ended 30 June 2008 would be not less than 10% greater than the £2,016,000 reported for the year ended 30 June 2007.  Whilst the Board remains confident in the integrity of this guidance at this time, it is currently considering the sale of certain non - essential assets which, if sold before the completion of the audit, may generate a book loss which will be treated as a post balance sheet event, reducing reported profits for the year ended 30 June 2008.  At present no final decision regarding the possible sale has been reached and, further, it is possible that the loss which may be generated maybe of a quantum to render the original advice needing to be amended.


As has been widely reported, trading and credit conditions for SME's in the PRC have become increasingly difficult throughout the third quarter of 2008. This is due to deteriorating macro economic conditions outside the PRC and slowing economic growth and restrictive credit policies in China. As a consequence, our markets have become increasingly competitive, disruptive and oversupplied. ZTC has therefore achieved sales significantly below those seen in the same period last year.


As a consequence, the Company's working capital available to operate and expand its business has become constrained, as has been previously announced. The Company continues to review all aspects of its operations to reduce costs and improve efficiencies to improve the availability of working capital for new model and market development. The possible sale of assets referred to above is one example of a potential method of cash generation that is being actively considered.


The Board is also pleased to announce that it has received preliminary approval from the appropriate Chinese regulatory bodies stating that the Company no longer needs to increase its share capital prior to 31 December 2009, as formerly outlined in its Admission document dated 13 February 2007


Further narrative on the Company's current trading and the share capital reduction will be provided in the Chairman and Chief Executive's statements accompanying the 30 June 2008 results.


Frank Lewis, Chairman of ZTC, stated:


'We previously advised of slowing sales of mobile handsets in China and unfortunately our company has not been immune to these trends which have been accelerated by the deteriorating macro economic conditions which have intensified over the past few months. We are responding as rapidly has possible to position the Company to take advantage of the handset markets once they stabilise and substantial long term growth opportunities that China continues to offer.'



 

For further information:


ZTC Telecommunications plc 

Mark Syropoulo, Finance Director

+86 21 6867 0012

Frank Lewis, Chairman

+44 20 7429 6666


Fairfax I.S. PLC

Nominated Adviser & Broker

Adam Hart/Laura Littley

+44 20 7598 5368


Conduit PR
Jos Simson/Ben Way
+44 20 7429 6609



This information is provided by RNS
The company news service from the London Stock Exchange
 
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