Operational update

AIM: FOX
13 December 2016

FOX MARBLE HOLDINGS PLC
(“Fox Marble” or the “Company”)

OPERATIONAL UPDATE

Fox Marble, the AIM listed company focused on the extraction, finishing and global distribution of marble, announces the following operational update ahead of its results for the year ended 31 December 2016.  

2016 Revenues

Fox Marble anticipates revenues from its quarried block marble and finished marble sales for the 12 months to 31 December 2016 to be in the region of €0.7m, (2015 full year revenues €0.2m), of which £0.6m is derived from converted order book sales. 

The Company’s order book for 2017 currently stands at €2.9m.  The order book reflects the continued global appetite for high quality marble from wholesalers, producers and architects, including Pisani, Eboracum and Antolini Luigi & C. Spa and notably significant orders during the course of the year from leading property developments such as St George’s Homes plc, and Capital and Counties plc’s Lillie Square development, the largest residential development in Europe.  However, the order book also reflects longer lead times in converting orders to realised sales during the course of 2016, which the Company expects will now be completed in 2017.

Fox Marble’s cash balance of €1.1m at 30 November 2016, includes €0.3m of cash advances related to outstanding orders included in the Company’s order book.

Not included in the current order book are a number of potential new off-take, distribution and sales agreements, that are currently under discussion with customers across the UK, Europe, USA and Asia, which the Company believes will positively impact Fox Marble’s revenues in 2017. Fox Marble will update the market on these developments in the near future.  There can be no assurance as to the extent and timing that orders will convert to revenues.

Quarrying and Processing

Fox Marble currently extracts commercial volumes of marble from its Kosovan quarries in Maleshevë (the Company’s newest quarry opened in October 2015 producing Illirico Bianco and Illirico Selene), Syriganë (producing Etruscan Gold and Breccia Paradisea marbles) and Cervenilla (producing Grigio Argento, Flora and Rosso Cait) and its Prilep quarry in Macedonia, which contains its white Sivec marble. Sales in 2016 include all the types of marble that the Company currently quarries in both block and processed marble form.

As Fox Marble continues to develop its quarries and accesses deeper benches, the consistency of the marble material improves. The Company’s desirable and competitively priced Bianco Illirico white marble and Illirico Selene grey marble product, from its newest quarry in Maleshevë, is already being used or specified by Fox Marble clients in some of the most prestigious residential developments in Europe. As such, the Company expects its Bianco Illirico white marble and Illirico Selene grey marble to become its largest product in terms of volumes of sales in 2017. 

New Factory Opening

In line with Fox Marble’s strategy of offering a low-cost, integrated approach to its marble production, processing and distribution globally, the Company is due to begin limited processing in its first wholly owned and operated processing factory in Kosovo by the end of December 2016.  The marble finishing factory in Kosovo has now entered the final stages of delivery, commissioning and testing overseen by Fox Marble’s technicians and its Carrara-trained manager.

The ability to produce a final polished and cut marble product should allow Fox Marble to accelerate sales conversion rates in particular for Balkan orders, where the Company remains the only operator of scale in the region, and to maintain and increase margins across the marble product range in 2017.  

Commenting on the Company’s progress, CEO Chris Gilbert, said:

“While we’ve seen our sales and order book grow and the quality of our product has enabled us to develop a number of high profile relationships, such as St George’s Homes and Capital and Counties Plc.’s Lillie Square development, the conversion of orders into delivered sales has taken longer than anticipated. We expect a large part of these orders will now be completed in 2017, leaving our estimated sales number for full year 2016 lower than expected.

“During 2016, we have also worked through a series of operational challenges. In particular with the new processing plant, as we build out our capabilities in what are still very new production environments. Completion of the new processing factory is now imminent and our operational progress has strengthened our unique position as the only operator of any scale in the Balkans with the access, know-how and capability to extract and supply marble of comparable quality to more developed markets at a lower cost.

“More broadly, marble continues to be highly valued and sought after across a range of markets globally and we continue to benefit from an extremely supportive political environment with the Kosovan government committed to put the region firmly on the map for marble production at scale.

“With these positive developments in mind, we believe that the underlying investment fundamentals remain strong and that we are now ideally positioned to deliver on our international growth strategy as a preeminent integrated marble production, sales and distribution company in 2017.”

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 of the European Parliament.

For more information on Fox Marble please visit www.foxmarble.net  or contact:

Fox Marble Holdings plc
Chris Gilbert, Chief Executive Officer
Tel: +44 (0) 20 7380 0999

Cairn Financial Advisers LLP (Nomad)
Liam Murray
Tel: +44 (0) 20 7213 0880

Brandon Hill Capital (Broker)
Oliver Stansfield
Tel: +44 (0) 20 3463 5000

Yellow Jersey PR
Felicity Winkles
Tel: +44 (0) 7748 843 871

Notes to Editors:

Fox Marble Holdings Plc is an AIM quoted natural stone extraction Company operating in Kosovo and the Balkans region, with headquarters in the United Kingdom.

The Company has 40 year mining licences for six separate marble quarries of which three are now in production and completed a maiden JORC resource indicating an in-situ valuation of approximately Euro 16.5 billion. Established in 2011, Fox Marble has access to over 300 million cubic metres (over 1bn tons) of marble of premium quality marble.

In addition, Fox Marble has rights to extract marble from two further premium quality marble quarries, at Drini and at Malesheva in Kosovo, which is in full production, and from the Prilep Quarry in Macedonia which is also in full production and, one of only two sources worldwide of the highly prized white sivec marble.