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Vmoto Limited ("Vmoto" or "the Company") is pleased to announce that it has commenced construction of Stage 2 of its manufacturing facility in Nanjing, China ("Nanjing Facility"). Stage 2 comprises an additional 19,937 square metres of factory floor space which, when added to the existing Stage 1 factory commissioned in 2009, will provide Vmoto with a total combined factory floor space of 30,137 square metres.

Stage 2 comprises a 10,000 square metre dedicated electric scooter production facility which will accommodate production for the Vmoto Emax electric scooter alliance, together with a 5,961 square metre spare parts storage and distribution centre. In addition, a 5 floor dormitory and staff dining quarters, comprising 4,000 square metres, will be included in Stage 2.

Construction of Stage 2, which commenced this week, is expected to take approximately 280 days and will require an investment by Vmoto of an estimated A$4 million, which is expected to be financed via a combination of cash flow and bank credit facility. Upon completion, the Stage 1 and 2 facilities will provide the Company with the capacity to manufacture scooters, ScarttÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s and other associated products, such as engines.

Vmoto is also in discussion with local Chinese Government authorities to acquire an additional adjoining parcel of land, totalling approximately 43,000 square metres, which would allow for further expansion of the Nanjing Facility as production continues to grow.

Vmoto has also recently been approved for a 10 million Chinese Yuan (AUD$1,575,000) operating facility by the China Rural Credit Cooperative Bank and has recently been advised by that bank that the facility can be increased to up to 50 million Yuan (AUD$7,880,000) as production increases at Nanjing. This facility is in addition to the 10 million Yuan facility already in place with the Peoples Bank of China.

The Company also advises that the Vmoto Emax strategic alliance, in which Vmoto holds a 60% interest, currently holds orders for 27 containers (approximately 1134 units) of electric scooters, required for immediate shipment. The existing Emax manufacturing facility in Wuxi, currently operated by Vmoto Emax, is now at capacity and the shutdown and transfer to the Nanjing Facility is planned to take place over May and June 2010. Following transfer, the initial production of electric scooters will be carried out at the Stage 1 Nanjing Facility pending completion of Stage 2.

In addition to the above mentioned orders, Vmoto confirms that a further 1,000 units of VmotoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s 125 EFI scooters for its Vietnamese customer are now in production, with shipment expected to take place within the next few weeks. Additional orders are expected as soon as the Nanjing Facility ramps up production to supply the units required under the previously announced 30,000 unit per annum contract.

Orders for a further 300 units of the new Scartt Version 2 have also been received and production of this order will commence soon.

VmotoÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Managing Director, Mr Patrick Davin, commented from Nanjing: "Everyone within the organisation is continuing to work hard and despite recent economic turmoil, Vmoto continues to gain strength and continues to grow. These new orders once again represent products from our own factory and will accordingly enjoy superior margins to the agency business, which as previously advised we want to become less reliant on.

 

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The outlook for Vmoto continues to grow with each announcement and they must now be looking at some serious positve cashflow with the orders continuing to grow rapidly.

The interesting aspect is that the volume of sellers continues to rise with each positive announcement.

It should not be too long before some serious instituitional buyers start to take notice of this growth story.

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It's no brainer really, A very smart and well managed company massively preparing for an ongoing expansion & eventual boom in cheap, convenient and environmentally sustainable inner city transport. As mentioned in previous announcements the Spanish postal service deal is the start of what will lead to a snowball trend in sales around the globe.
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494 million shares issued and top 20 holding 51% in last annual report......Mostly low volumes traded so many holding and waiting for future gains that Vmoto are sure to produce.

Few more postal companies around the world decide to make the switch to electric and there sure will be some decent profits reported!

Imo the ducks are aligning

Scartt....... Check out these two.. V1

 

http://www.trademe.co.nz/Trade-Me-Motors/M...n-275621142.htm

 

http://www.trademe.co.nz/Trade-Me-Motors/M...n-283262326.htm

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There was further positive coverage of Vmoto in this weeks BRW under "Electric Dreams for Spain"

(Pg 10 BRW Australia April 22-28 2010)

 

The article covered facts that we all already know, but perhaps this will help some "serious institutional buyers start to take notice of this growth story." (as stated by brucem1)

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  • 4 months later...

from Directors Summary

 

We are pleased to see from our results that the overall operating costs of the company are coming down dramatically despite the company becoming increasingly busy on the manufacturing front. Costs are down in every operating division which reflects the careful management of the operations in 2010. Salary related costs have actually been reduced despite increased staff numbers. Occupancy costs have reduced by nearly 50% as the need for rented manufacturing facilities and offices were replaced with our own wholly owned operations in Nanjing, China. The overall running costs would have improved even more had it not been for the additional costs associated with the acquisition and relocation of Emax, which added approximately AUD$1 million of costs to our bottom line. The continued cost reduction process has been a huge effort by all staff and now stands us in an excellent position as the factory continues with the scaling up of its mass production for the remainder of 2010 and into 2011.

 

In relation to the bottom line, an overall operating loss of approx AUD$3.5 million is totally unacceptable to management and shareholders however is hopefully understandable given the abovementioned information. Management now believes that all acquisitions required for its immediate growth plans have now been concluded and solid building blocks are in place to ensure for the long term profitable growth of the company. Efforts will now be put into the overall design, quality control and marketing of the companyÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s products in order to ensure the factory is run at maximum capacity and that profitability is maximized. We believe the worst of the growing pains are behind us and the frustrating wait for profit is now close at hand. I once again thank shareholders for their continued faith and support of Vmoto and your belief in the strategy of management to build a company with a strong foundation that will not only provide profitability in the immediate term but will enable the company to flourish in the longer term.

 

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This process has been slow and methodical and very well managed.

All the building blocks are now in place and the next 12 months will be the rewards so well deserved.

An excellent effort and shareholders should now benefit for their patience.

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