Prosperity Minerals Holdings (AIM: PMHL) today disclosed information relating to the sale of its Chinese cement business Upper Value Investments Limited, including its property valuation and half yearly results for the PMHL remaining group which stands at approximately US$155 million.
PMHL agreed to sell the business to TCC international Holdings (HKG: 1136) for £300 million back in November, bringing in cash reserves to fund the development of other businesses such as the group’s existing iron ore related operations, natural resources and real estate in China.
During the six months ended 30 September 2009, the PMHL Remaining Group recorded a turnover of US$397.3 million, which market a year on year improvement of 41%. The growth in turnover was mainly attributable to the 169% increase in the total tonnage of iron ore shipped by the PMHL Remaining Group to 5.2 Mt (million tonnes) from 2 Mt in the previous period. The group’s gross profit rose to US$11.88 million due to a recovery in global seaborne iron ore market. Losses for the period amounted to US$3.36 million compared to a profit of US$11.35 a year earlier.
The PHML Remaining Group's total cash balance stood at US$14 million at 30 September 2009 compared to US$20.2 million at the end of March and total borrowings were at US$15.75 million, down from US$21.5 million in March.
Upper Value posted revenues of US$94 million in the six month ended 30 September and US$87.6 million in the equivalent period of the previous year, while pre-tax profits amounted to US$1.43 million in 2009 and US$0.27 million the year before. Losses for the full year to 30 September stood at US$1.65 million compared to US$0.68 million a year ago.
The valuation of the property interests held by the target group consisting of property interest contracted to be held for future development in China, property interests held for self-occupation and under development, amounted to RMB 1.06 billion, or US$155 million.
Daniel Stewart & Company (DS&C) today published a note in response to the statement from Prosperity Minerals, reiterating its 'buy' recommendation for the stock, leaving the target price at 250 pence and expecting it to be closed as the company moves closer to the completion of the transaction.
Disclosure: The author holds no positions in the company