Half-year Report

29 September 2016

MediLink-Global UK Limited

("MediLink" or "the Company")

HALF-YEARLY REPORT for the six months to 30 june 2016

MediLink, the provider of electronic healthcard network services to insurance companies and corporate organisations, to help them facilitate the administration of medical claims and healthcare data management, announces its interim results for the six months ended 30 June 2016.

Financial highlights

· Revenue increased by 33.7% to £941,000 (H1 2015: £704,000);

· Revenue contribution from Malaysia operations increased by 57.3% to £648,000 (H1 2015: £412,000);

· Operating profit of £382,000 (H1 2015: operating loss of £112,000); and

· The improvement in operating performance was attributable to revenue growth in Malaysia arising from the software licensing contract with Etiqa Insurance Berhad and increased membership levels, combined with continued cost saving measures within MediLink's operations.

Operational highlights

Medilink Malaysia

· The Directors continue to believe there is growing demand in Malaysia for Third Party Administration ("TPA") services in the Small and Medium Enterprises Sector as well as Government-link agencies, Government-link bodies and Government-link Corporations. MedilinkGlobal (M) Sdn Bhd ("MGMY") is now focusing its business development effort in these growing market segments.

· During the period under review, the marginal increase in membership of 5,000 from the existing self-funded corporate clients of Medilink Malaysia, contributed to the revenue growth of the Group.

· AIA Bhd (AIA) contributed an additional 139,000 members to the membership growth of Medilink Malaysia during the period under review.

In collaboration with Qualitas Medical Group Sdn Bhd, a Malaysian based primary healthcare provider group with operations in Malaysia and several countries in the Asia Pacific region, Medilink Malaysia licensed the use of its Claims Management system and front-end electronic healthcard network infrastructure, to facilitate on-line-real-time member's eligibility validation and submission of primary care claims. Through this collaboration, an additional 15,000 members from a total of 10 employers newly acquired as of September 2016, were added to the Medilink service platform.

The Board of Directors of Medilink are confident that there will be a continuous positive effect for Medilink Malaysia in the years to come. Notwithstanding this, and further to the announcement released by the Company on 27 July 2016, the Board considers that it is no longer in the interests of the Company to continue to be admitted to trading on AIM. As such, the Company will be seeking shareholder approval for cancellation of the Company's shares from trading AIM in the near future.

Enquiries: 

CHAIRMAN'S STATEMENT

The Board of MediLink is pleased to present the Group's unaudited results for the six month period ended 30 June 2016, which show an encouraging trend in improved operating performance compared with the comparative period for the six months ended 30 June 2015.

FINANCIAL REVIEW

The Group recorded revenues of £941,000 (H1 2015: £704,000) and an operating profit before tax of £363,000 (H1 2015: operating loss of £112,000) for the six months ended 30 June 2016 from its continuing operations

Growth in revenues increased by 33.7% over the same period last year, with revenue from Malaysia growing by 57.3% and TPA income increasing by 21.5%. The Malaysian operating entities continued to make the largest contribution of 67% (H1 2015: 59%) of the Group's revenues for the period under review, whilst Singapore contributed 33% (H1 2015: 42%).

Revenue contribution from Malaysia operations increased by 57.3% to £648,000 (H1 2015: £412,000). The Company's operations in Singapore recorded a marginal increase in revenues, by 8.6% to £317,000, compared with the same period last year (FY 2015: £292,000). After taking into account inter-group transactions in the period, as detailed in note 5 to the interim results, the Group's revenue generated in the period totalled £941,000.

The Group achieved operating profit for the period compared to the same period last year as a result of revenue growth in Malaysia and the cost saving measures taken across all the subsidiaries of MediLink resulting in a 11% reduction in administrative costs.

PERIOD IN FOCUS

The first half of 2016 witnessed another increase in revenue in Malaysia from £412,000 in the first half of last year to £648,000 for the six months to 30 June 2016, representing a 57.3% growth over the same period last year. The number of enrolled members in Malaysia as at the end of June 2016 was approximately 1,050,000 (30 June 2015: 990,000) and this had grown to 1,100,000 by the end of August 2016, while the number of corporate clients contracted stood at 227 at 30 June 2016, compared to 226 at the same stage last year. The number of healthcare providers operating in our network in Malaysia now stands at 1,500 (1,500 at this stage last year).

In the period under review, the software licensing income contributed £198,000 (2015: £3,000), representing 27% of the 33.7% increase in the Company's turnover and 47% of the 57% increase in Malaysia revenue.

The reduction of administration costs, combined with the strong contribution from software licensing income and the growth in membership levels, has helped to generate a healthy operating profit in Malaysia, representing a significant improvement on the loss incurred in the corresponding period last year. Management are not anticipating a significant increase in operating costs in the second half of 2016.

Further to the completion and deployment of the Claims Management System licensing to Great Eastern Life Assurance Co., Ltd on 11 September 2015, the Malaysia entity had secured an 18-month contract with Etiqa Insurance Berhad for a licensing of its bespoke Electronic Claims Clearing System (E.C.C.S).

PROSPECTS

With the impact of continued growth in TPA membership revenue, as well as system licensing in our Malaysia operation, the Directors are confident that the Group's financial performance should continue to improve in the second half of 2016 and during the financial years thereafter.

Notwithstanding the improved financial performance, it is the opinion of the board that it is no longer in the long term interests of the Company and its shareholders to continue to be admitted to trading on AIM, as the Board considers that the costs associated with the listing are not commensurate with the benefits that the company is receiving. The Company is in the process of preparing a circular, setting out further details on the rationale for seeking cancellation and a further update will be provided in due course.

Norman Lott

Chairman

Consolidated Statement of Comprehensive Income

Six month period ended 30 June 2016

* In accordance with IAS33 "Earnings per share" and where the Group has reported a loss for the period, the potential shares are not dilutive. The Group has not issued any instrument with dilutive effect.

Consolidated Statement of Financial Position

As at 30 June 2016

Consolidated Statement of Cash Flows

Six months ended 30 June 2016

Consolidated Statement of Changes in Equity

Six months ended 30 June 2016

Notes to the Interim Financial Information

Six month period ended 30 June 2016

1. Basis of preparation

The financial information has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The principal accounting policies used in preparing the interim results are consistent with those the group expects to apply in its financial statements for the year ending 31 December 2016 and are consistent with those disclosed in the group's Report and Financial Statements for the year ended 31 December 2015.

The interim results have not been reviewed nor audited by the Company's auditors. The comparatives for the year ended 31 December 2015 are not the Company's full statutory financial statements for that period. A copy of the statutory financial statements for that period, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, but included an emphasis of matter in respect of going concern:

"In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosure made in note 2 (v) to the financial statements concerning the company's ability to continue as a going concern. The financial statements have been prepared on the going concern basis, which depends on the continued shareholder support and the generation of increased revenues. These conditions, along with the other matters explained in note 2 (v) to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern."

Whilst the financial information included in this Interim Financial information has been prepared in accordance with the recognition and measurement criteria of IFRS, it does not include sufficient information to comply with IFRS.

The interim results announcement was approved by the board on 29 September 2016.

2. Basic and diluted loss per ordinary share

Basic loss per share is calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period. In accordance with IAS 33 and where the Group has reported a loss for the period, the shares are not dilutive.

3. Dividend

The Directors do not propose a dividend in the period.

4. Taxation

No charge to taxation arises in the six months ended 30 June 2016.

5. Turnover and segmental analysis

Per IFRS 8 operating segments are based on internal reports about components of the group, which are regularly reviewed and used by the Board of Directors being the Chief Operating Decision Maker ("CODM") for strategic decision making and resource allocation, in order to allocate resources to the segment and to assess its performance. The Group's reportable operating segments are as follows:

(I) Third party administrator

(II) Software licensing

The CODM monitors the operating results of each segment for the purpose of performance assessments and making decisions on resource allocation. The management has organised the entity based on differences in products and services. Third party administrator segment is derived from aggregating China, Malaysia and Singapore entity while Software licensing segment represent a single entity from Malaysia. Performance is based on external and internal revenue generations and profit before tax, which the CODM believes are the most relevant in evaluating the results relative to other entities in the industry. Segment assets and liabilities are presented inclusive of inter segment balances, as inter-segment pricing. Information regarding each of the operations of each reportable segment is included below.

(i) The assets of third party administrator include the goodwill on consolidation of £1,338,000.

Revenues from the Group's major customers AIA Berhad amounted to £356,151: (H1 2015: £276,621) arising from sales in the third party administrator segment.

The assets of third party administrator include the goodwill on consolidation of £1,338,000.

The assets of third party administrator are including the goodwill on consolidation of £1,338,000 (2014: £1,338,000).

Revenues from a customer amounted to £280,142 (2014: £263,249) arising from sales by third party administrator segment.

The geographical split of revenue and non-current assets arises as follows:

6. Share capital

MGL have one class of ordinary share capital which carry no rights to fixed income, any preferences or restrictions.

Authorised share capital (unaudited):

7.  Foreign currency exchange rate

The following significant exchange rates applied during the period:

8. Nature of financial information

These interim results will be available shortly on the Company's website, www.medilink-global.com in accordance with the AIM Rules. Further copies can be obtained from the registered office at Queensway House, Hilgrove Street, St Helier, Jersey JE1 1ES.

9. Nature of financial information

There are no seasonal factors that materially affect the operations of any company in the Group.

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