4th Jun 2019 15:20
LONDON (Alliance News) - Walcom Group Ltd on Tuesday said it expects interim revenue to fall sharply on the prior year as trading was hurt by African swine fever.
The livestock products company noted, however, that it has not lost any major customers to competitors and that the decline in sales is a direct effect of the severe reduction in the swine population in China.
Walcom is "actively" working to increase its customer base and is hopeful trading conditions will improve in the second half of the year.
However, Walcom now expects revenue for the first half of 2019 to be "substantially" below the HKD34.7 million, about GBP3.5 million, achieved in 2018.
Separately, the company said it is still awaiting payment of HKD5.4 million from its largest customer in China. The company started legal proceedings against the customer to recover the
debt. However, currently it remains unclear as to when and how much of this overdue amount will
be recovered.
Walcom has a bank loan of CNY1.5 million, about GBP171,233, which is due for review and repayment by Monday next week.
The company has been in discussions with the bank which provided the loan and it has agreed that shortly after the repayment of the loan, the bank will issue a new loan of CNY1.0 million, due for review and repayment six months after drawdown. The bank has also agreed to issue of a further loan of CNY500,000 should the company's trading stabilise.
Walcom intends to use the loan to ease its working capital position in the short-term.
Finally, the company has appointed Hwai Chan as non-board deputy chief financial officer from Saturday last week. In mid-December last year, Walcom announced the resignation of Albert Wong as a director, who remained as non-board CFO and company secretary until the beginning of July.
After that, Francis Chi will assume the additional role of interim CFO and Chan the additional role of company secretary.
Chan has 20 years of experience in the financial industry, Walcom said. She is a qualified accountant by training and a member of both CPA Australia and the Malaysian Institute of Accountants.
Walcom shares were untraded on Tuesday, last closing at 0.38 pence each.
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