RCG Holdings Limited Interim Results

RCG Holdings Limited, an international provider of biometric and RFID products and solution services with a primary focus in the Asia Pacific and the Middle East markets, today announces its interim results for the six months ended 30 June 2011.

Financial Highlights

• Revenue decreased by 32.3% to HK$977.1 million (£77.7million) (H1 2010: HK$1,442.7 million (£121.6 million))
• Gross profit decreased by 64.9% to HK$234.5 million (£18.6 million) (1H 2010: $668.2 million (£56.3 million))
• Gross profit margin was 24.0% (1H 2010: 46.3%)
• Operating loss of HK$670.0 million (£53.3 million) (1H 2010: EBITDA of HK$379.5 million (£32.0 million))
• Loss per share of HK$1.66 (13.2 pence) (1H 2010: EPS of HK$1.36 (11.5 pence) per share)
• Normalised EPS decreased by 83.3% to HK$0.29 (2.3 pence) per share (1H 2010: HK$1.74 (14.7 pence) per share)
• mSubscription, share transaction and placing exercises successfully raised HK$221.7 million to fund major projects and R&D activities

Operational Highlights

• Major projects won in the Solutions, Projects and Services business including the multiple platform gaming solutions for the Government of Sikkim, India and SIMCash mobile-phone payment based in Indonesia and Malaysia
• Rationalisation of the corporate structure through the disposal of less profitable and dormant business units (RCG Network, Skycomp Technology, UCH Technology,E-ctasia Technology, Towards Soft and Virtual Storage Center)
• Continued to focus on the Solutions, Projects and Services business segment with contract wins in governmental sector, healthcare, multi-national corporations and utility industries

Since period end

• On 15 July 2011, RCG announced completion of placing of 82,200,000 new shares, raising HK$82.2 million to fund the Company’s projects
• On 18 July 2011, RCG announced appointment of Mr. Chew Tean Danny as the Company’s Acting CEO with effect from 15 July 2011

Commenting on the results, Danny Chew Tean, Acting CEO of RCG, said:  “During the period RCG rationalised its corporate structure by disposing of business units which were unprofitable, and focused on long term projects.  The actions taken during the period position the Group well for long term development.  RCG will continue to exercise strict cost control and is very conscious of its working capital requirements.  The Board will continue reviewing and adjusting its sales and trading policies in order to improve its cash flow position.”