Interim Results

GruppeM Investments PLC 31 October 2007 31 October 2007 GruppeM Investments PLC (LSE: GRP, 'GruppeM' or the 'Company') Interim results for the six months ended 30 June 2007 GruppeM, the Aston Martin Importer for China and retailer of Porsche cars in the country's Shandong region, today announces its interim results for the six months ended 30 June 2007 which have been reviewed by the Company's auditors but are unaudited. Overview: • 203 cars ordered and 191 cars delivered by the Porsche Qingdao dealership in the six-month period; • Revenues of £11.6 million (2006: £5.3 million); • Profit before tax of £57,993 (2006: £252,918 loss); • Earnings per share 0.05p (2006: 1.27p loss). Significant post balance sheet events: • CLB Littlejohn Frazer, a top 30 firm of chartered accountants and business advisors, appointed as auditors; • Stephanie Wong taking up appointment as Finance Director on 1 November 2007; • GruppeM to launch Aston Martin brand into China at the end of November 2007, following agreement to import and distribute the brand to China retail dealerships. Commenting on the results and related developments, Kenny Chen, Chief Executive Officer, said: 'This has been a great six months for GruppeM as it develops its luxury sports cars portfolio. Demand for Porsche cars is continuing unabated with 203 cars being ordered in the period from our Qingdao dealership. We have been granted the right to retail Porsche cars within Shandong and are convinced that there is much greater demand for the brand within the region. The opening of our second Porsche dealership in the region's capital Jinan, (delayed to the first quarter of 2008 due to the building work overrunning), will enable us to begin meeting this demand and increasing sales volume going forward. Our high reputation, allied with our deep understanding of the Chinese luxury car market, has yielded an agreement with Aston Martin to import and distribute the marque to retail dealerships within China. We are confident that the Aston Martin brand, like other luxury brands before it, will be hugely popular within the Chinese marketplace. We are delighted to welcome Stephanie Wong as Finance Director to the Group. Stephanie is Chinese, qualified as a CPA and practised within the US, and has extensive experience of the Asia Pacific Region. We look forward to her starting on 1 November 2007.' Enquiries: GruppeM Investments PLC Shore Capital and Corporate Limited Kenny Chen Alex Borrelli Tel: +44 (0) 207 233 2952 Tel: +44 (0) 207 408 4090 CHAIRMAN'S STATEMENT Background GruppeM's most recent audited annual report covered the 17-month period to 31 December 2006. The interim financial statements below, for the six months ended 30 June 2007, have been reviewed by the Company's auditors but are unaudited. The comparative period is from 1 January 2006 to 30 June 2006. Board changes We are delighted to welcome Stephanie Wong to the board as Finance Director from 1 November 2007. Originally from Hong Kong, Stephanie qualified as a CPA in Texas in 1996, going on to complete an MBA at the University of Houston the following year. She has held various senior finance roles, latterly as the Asia Pacific Director of Finance and Operations for Fortinet Inc. - a leading provider of multi-threat security systems in relation electronic communications. The directors are confident that Stephanie's arrival will be a powerful addition to the management team based in China. Financial timetable and auditors GruppeM's annual report for the 17-month period ended 31 December 2006 was posted to shareholders today. Therefore, the directors anticipate that the share suspension will be lifted, and that trading in the Company's shares will resume, in the near future. The interim report, containing the unaudited results below, will also be posted to shareholders today. The release of our audited results for the 17 months ended 31 December 2006, and unaudited interim results for the six months ended 30 June 2007, has been delayed due to the audit of our Chinese subsidiaries being interrupted by a routine audit by the Chinese tax authority from which no material issues arose. The board is delighted to announce the appointment of CLB Littlejohn Frazer (' CLBLF') as our new auditor. CLBLF is an independent 'top 30' firm of chartered accountants and business advisers based in Canary Wharf in London. Results and business review The Group continues to grow rapidly thanks to the increasing volume of sales of Porsche cars. Turnover increased significantly to £11.6 million (period to 30 June 2006: £5.3 million). The pre-tax profit from operations for the period was £57,993 against a loss of £252,918 for the period to 30 June 2006. Earnings per share were 0.05 pence (2006: 1.27 pence loss). The directors will not be recommending the payment of an interim dividend. The Porsche Qingdao dealership performed strongly with 203 cars ordered and 191 cars delivered in the period. Demand for the brand remains strong with customers currently waiting approximately six months for their new car. The Company has recently opened a Porsche sales office in Jinan, the capital of the Shandong region, and has already made several sales. The new Porsche Jinan dealership and workshop is now planned to open in Q1 of 2008. We are pleased that GruppeM has been appointed as the only importer and distributor of Aston Martin motor cars to retail dealerships within China. Initially GruppeM will be supplying the brand to third-party dealers, rather than retailing the brand through its own dealerships. GruppeM is excited at the prospect of launching the Aston Martin brand into China at the end of November 2007. We are delighted to announce that the launch will be attended and supported by the Aston Martin board. Our success in regard to the appointment of GruppeM as sole importer and distributor of Aston Martin in China is consistent with HMG's clearly stated business strategy for the Chinese market, both in terms of exports and the need to strengthen the growth of City of London listed companies in the rapid growing economy of China. The British Embassy and other regional offices are supporting this initiative to the fullest. Market prospects According to the Xinhua News Agency's recent report, the world's luxury car makers are very enthusiastic about the great growth potential in China's auto industry. Porsche China's Managing Director was quoted as saying that he expects the growth in sales of the marque to increase beyond the doubling of volume seen last year. Also, the general manager of Bentley in China (which occupies a similar market position to Aston Martin) outlined that the sales to the end of September 2007 outstripped the total sales for 2006, and that he fully expects sales volume to reach 300 units by the end of this year. He commented that the fast expanding economy, and rising income, will inevitably boost consumer demand for luxury cars. We appreciate your continuing support in our efforts to increase our share of the burgeoning luxury car market in China. Finally, I would also like to thank all our employees and advisors for their contribution to our success. Don McCrickard Chairman 30 October 2007 GRUPPEM INVESTMENTS PLC CONSOLIDATED INCOME STATEMENT FOR THE 6 MONTHS ENDED 30 JUNE 2007 6 months ended 6 months 17 months 30 June ended ended 31 2007 30 June December 2006 2006 (unaudited) (unaudited) (audited) Note £ £ £ Revenue 11,551,698 5,258,243 12,099,616 Cost of sales (10,644,692) (4,876,656) (11,239,678) Gross Profit 907,006 381,587 859,938 Administrative expenses (839,768) (541,465) (1,823,174) Exceptional items - (88,125) - Operating Profit/(Loss) 67,238 (248,033) (963,236) Finance income and expense (net) (9,305) (4,915) 13,628 Profit/(Loss) for the Period before Taxation 57,993 (252,918) (949,608) Taxation (9,919) (163) (13,172) Profit/(Loss) for the Period 48,014 (253,081) (962,780) Earnings/(loss) per share expressed in pence per share - Basic 2 0.05p (1.27)p (3.27)p - Diluted 2 0.05p - - All amounts relate to continuing activities. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE FOR THE 6 MONTHS ENDED 30 JUNE 2007 6 months 6 months 17 months ended ended ended 31 30 June 30 June December 2006 2007 2006 (unaudited) (unaudited) (audited) £ £ £ Profit/(loss) for the financial period 48,014 (253,081) (962,780) Exchange adjustments 6,611 (22,700) (46,650) Total Recognised Income and Expense 54,625 (275,781) (1,009,430) for the Period GRUPPEM INVESTMENTS PLC CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2007 Notes As at As at As at 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) £ £ £ Assets Non-Current Assets Property, plant and equipment 456,029 509,322 499,850 456,029 509,322 499,850 Current Assets Inventory 152,894 62,585 836,672 Trade and other receivables 3,964,353 1,354,307 2,791,348 Cash and cash equivalents 139,729 45,652 126,556 4,256,976 1,462,544 3,754,576 Total Assets 4,713,005 1,971,866 4,254,426 Liabilities Current Liabilities Trade and other payables 2,692,856 2,276,518 2,433,149 2,692,856 2,276,518 2,433,149 Non-Current Liabilities Director's loan account 3,570,516 454,624 3,414,011 Convertible loan 100,366 - 99,402 Related party loan 182,000 182,000 182,000 3,852,882 636,624 3,695,413 Total Liabilities 6,545,738 2,913,142 6,128,562 Capital and Reserves Share capital 3 1,000,000 200,000 1,000,000 Merger reserve 4 (1,392,156) - (1,392,156) Foreign operation translation reserve 4 38,104 33,009 44,715 Retained deficit 4 (1,478,681) (1,174,285) (1,526,695) (1,832,733) (941,276) (1,874,136) Total Equity and Liabilities 4,713,005 1,971,866 4,254,426 GRUPPEM INVESTMENTS PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE 6 MONTHS ENDED 30 JUNE 2007 6 months 6 months 17 months ended ended ended 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) £ £ £ Cash Flow from Operating Activities Profit/(loss) from operating activities 67,238 (248,003) (963,236) Adjustments for: Depreciation 86,430 51,370 176,334 Exchange adjustment on property, plant and (2,569) 656 6,616 equipment Net Cash Flow from Operating Activities before 151,099 (195,977) (780,286) Changes in Working Capital Decrease/(increase) in inventories 683,778 92,022 (836,672) Increase in payables 490,648 417,488 2,045,882 (Increase)/decrease in receivables (1,403,946) 160,605 (2,496,638) Net Cash Flow from Operating Activities before (78,421) 474,138 (2,067,714) Interest and Taxation Paid Interest paid (8,365) (4,940) (2,046) Taxation (9,919) (163) (1,820) Net Cash Flow from Operating Activities (96,705) 469,035 (2,071,580) Investing Activities Purchase of property, plant and equipment (40,040) (550,703) (598,863) Sale of property, plant and equipment - - 24,555 Interest received 24 25 76 Net Cash Flow from Investing Activities (40,016) (550,678) (574,232) Financing Activities Cost of share issue - - (592,156) Issue of convertible loan notes - - 115,000 Director's loan 156,505 71,167 3,076,141 Net Cash Flow from Financing Activities 156,505 71,167 2,589,985 Net Increase/(Decrease) in Cash and Cash 19,784 (10,476) (55,827) Equivalents in the Period Cash and cash equivalents at the beginning of 126,556 43,081 135,733 the period Effect of foreign exchange rate changes on cash (6,611) 13,047 46,650 and cash equivalents Cash and Cash Equivalents at the end of the 139,729 45,652 126,556 Period NOTES TO THE INTERIM ANNOUNCEMENT 1. Basis of Preparation These interim statements have been prepared on a consistent basis with the Financial Statements for the period ended 31 December 2006. These interim statements do not constitute statutory Financial Statements within the meaning of Section 240(5) of the Companies Act 1985. Neither the results for the six months ended 30 June 2007, nor the comparatives for the six months ended 30 June 2006, have been audited. The statutory Financial Statements for the 17 months ended 31 December 2006 contained an unqualified auditors' report in accordance with Section 235 of the Companies Act 1985. This financial information has been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and IFRIC interpretations that are relevant to its operations. The financial information has been prepared under the historical cost convention. The preparation of this financial information in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial information and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Basis of Consolidation The consolidated Financial Statements consist of GruppeM Investments PLC and its subsidiaries. The consolidated Financial Statements of GruppeM Investments PLC have been prepared under merger accounting rules. This means that the Financial Statements of GruppeM Investments PLC, and its wholly owned subsidiary GruppeM Hong Kong Limited, have been aggregated and presented as if the two companies have always formed a group. Where necessary, adjustments are made to the Financial Statements of the subsidiaries to bring their accounting policies into line with those used by other members of the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. 2. Profit/(Loss) per Ordinary Share Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. In order to calculate diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares according to IAS 33. Dilutive potential ordinary shares include convertible loan notes and are assumed to have been converted into ordinary shares. 6 months to 30 June 2007 6 months to 30 June 2006 Weighted Per share Weighted Per share amount average amount average number of number of Profit shares Loss shares £ pence £ pence Basic EPS Profit/(loss) 48,014 100,000,000 0.05 (253,081) 20,000,000 (1.27) attributable to ordinary shareholders Convertible loan note - 2,300,000 - - - - Diluted EPS 48,014 102,300,000 0.05 (253,081) 20,000,000 (1.27) 3. Share Capital 30 June 2007 30 June 2007 30 June 2006 30 June 2006 No. £ No. £ Authorised: Ordinary shares of 1p each 200,000,000 2,000,000 100,000,000 1,000,000 Issued and fully paid: Ordinary shares of 1p each 100,000,000 1,000,000 20,000,000 200,000 4. Movement on Reserves The merger reserve represents a reserve arising on consolidation, being the share capital and share premium account balances of GruppeM Hong Kong Limited at 1 February 2005, i.e., its date of incorporation less the nominal value of the shares issued by the Company to acquire the shares, reflecting the position as if the merger had occurred on 1 February 2005. Group Share capital Merger Foreign Total reserve currency translation Retained reserve earnings £ £ £ £ £ At 1 January 2006 200,000 - 10,309 (921,204) (710,895) Loss for the period - - - (253,081) (253,081) Foreign exchange translation - - 22,700 - 22,700 At 30 June 2006 200,000 - 33,009 (1,174,285) (941,276) Acquisition 800,000 - - - 800,000 Arising on share issue, less expenses - (1,392,156) - - (1,392,156) Loss for the period - - - (352,410) (352,410) Foreign exchange translation - - 11,706 - 11,706 At 31 December 2006 1,000,000 (1,392,156) 44,715 (1,526,695) (1,874,136) Profit for the period - - - 48,014 48,014 Foreign exchange translation - - (6,611) - (6,611) At 30 June 2007 1,000,000 (1,392,156) 38,104 (1,478,681) (1,832,733) Independent Review Report to the Directors of GruppeM Investments PLC Introduction We have been instructed by the Company to review the financial information for the six months ended 30 June 2007 which comprises the consolidated income statement, the consolidated balance sheet, the consolidated statement of recognised income and expense, the consolidated cash flow statement and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the AIM Rules of the London Stock Exchange and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. Directors' Responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the AIM Rules of the London Stock Exchange which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the annual accounts except where any changes, and the reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with International Standards on Auditing (UK and Ireland) and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review Conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2007. CLB Littlejohn Frazer Chartered Accountants and Registered Auditors 1 Park Place Canary Wharf London E14 4HJ 30 October 2007 Circulation to Shareholders The interim report and accounts will be posted to shareholders in due course and will be available to the public from the Company's registered office at GruppeM Investments PLC, Suite 1.3 Buckingham Court, 78 Buckingham Gate, London, SW1E 6PD. For more information please contact: GruppeM Investments PLC Kenny Chen Tel: +44 (0) 207 233 2952 Shore Capital and Corporate Limited Alex Borrelli Tel: +44 (0) 207 408 4090 Further information on GruppeM Investments PLC can be found on the Company's website: www.gruppemplc.com. This information is provided by RNS The company news service from the London Stock Exchange

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