Aquatic Foods flops after dividend chopped

While volumes increased, margins were well down on last year due to what management attributed to the slowdown of economic growth in China, a highly competitive market and adverse impacts from foreign exchange.

Revenue in the six months ended 30 June decreased by 5.6% to RMB 419m (£48.3m).

But the AIM-listed company said overall gross margin had stabilised at 24.5% during the both quarters, having dropped significantly from the 33% in the first half of 2015.

Profit before tax therefore crashed 51.3% to RMB 49m, with earnings per share down 55% to RMB 0.33.

Cash was up to RMB 471m at period end but eh Interim dividend was slashed to 0.2p a share from 0.7p a year ago, reflecting the more challenging trading environment and perhaps also chief executive Li Xianzhi's statement that these current challenges "also present potential growth and expansion opportunities for the group" to grow within China through mergers and acquisitions and increasing process automation.

He further said AFG had "performed credibly" in the challenging economic environment, remaining cash generative as it grows sales channels and looks to increase focus on export markets.

"The directors have resolved to pay an interim dividend of 0.2p per share but will review the full year dividend in light of trading and market conditions at that time.

"The Directors expect the current challenging market conditions, reflected in cost inflation pressures combined with softening product pricing, to continue in the near term though the board is pleased to note that gross margins achieved by the company have stabilised."