Half Yearly Report

25 September 2013

MediLink-Global UK Limited

("MediLink" or "the Company")

HALF-YEARLY REPORT for the six months to 30 june 2013

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 2013.

Financial highlights

· Revenue increased by 14% to £1,093,000 (H1 2012: £958,000);

· Revenue contribution from China operations increased by 38% to £324,000 (H1 2012: £235,000);

· Operating loss reduced to £235,000 (H1 2012: £366,000 operating loss); and

· Improvement in operating performance was attributable to revenue growth in both Malaysia and China and continued cost saving measures within MediLink's operations in Singapore.

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, Medilink Malaysia has won TPA contracts with several clients including those detailed below:

v January 2013: Weir Minerals Malaysia

Medilink Malaysia was appointed to provide TPA services, serving its 1000 employees and dependents

v June 01, 2013: Kapar Energy Ventures Sdn Bhd

Medilink Malaysia was appointed to provide TPA services, serving its 800 employees and dependents

v June 01, 2013: Petaling Jaya City Council

Medilink Malaysia was appointed to provide TPA services, serving its 1700 employees and dependents

· The Board of Directors believes that AIA's acquisition of ING Malaysia has the potential to boost revenue growth for Medilink Malaysia in the future as a result of the expanded size and influence of the amalgamated organization, which now commands the No # 1 market position in the Malaysian insurance industry.

Medilink China

· In January 2013, a 3 year TPA contract (renewable on 31 December 2015) was entered into between Medilink China and PICC Health Insurance Company Limited, Shenzhen Branch.

· In February 2013, a 3 year contract between Medilink China and Sun Life Everbright Life Insurance Company Limited was concluded and will be renewable on 31 January 2016. The insurer was founded in 2002 and based in Tianjin, China. The company operates as a subsidiary of China Everbright (Group) Co., Ltd.

· In June 2013, a 1 year contract between Medilink China and Mongol Daatgal LLC, a Mongolian insurance company, was concluded and will be renewable on 31 May 2014.

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 2013, which show an encouraging trend in improved operating performance compared with the comparative period for the six months ended 30 June 2012.

FINANCIAL REVIEW

The Group recorded revenues of £1,093,000 (H1 2012: £958,000) and a reduced loss after tax of £237,000 (H1 2012: £367,000) for the six months ended 30 June 2013.

Growth in revenues increased by 14% over the same period last year, with revenue from Malaysia and China growing by 8% and 38% respectively. The Malaysian operating entities continued to make the largest contribution of 45% (H1 2012: 47%) of the Group's revenues for the period under review, whilst China and Singapore contributed 30% (H1 2012: 24%) and 25% (H1 2012: 29%) respectively.

The operating loss for the period was lower compared to the same period last year as a result of revenue growth in China and the cost saving measures taken particularly in relation to operations in Singapore.

PERIOD IN FOCUS

The first half of 2013 witnessed another increase in revenue in China from £235,000 in the first half of last year to £324,000 for the six months to 30 June 2013, representing a 38% growth over the same period last year. The number of enrolled members in China as at the end of August 2013 was approximately 19,500 (1 August 2012 - 17,500) while the number of insurance companies contracted stands at 29 compared to 25 at the same stage last year. The number of healthcare providers operating in our network in China now stands at 380 (294 at this stage last year). Maintaining overheads at the same levels as the corresponding period last year combined with the growth in membership levels has helped to reduce the operating loss in China significantly, by approximately 50%, for the first half of 2013 compared with the first half of 2012. Management are not anticipating a significant increase in operating costs in the second half of 2013.

The increase in costs from our Malaysia operations compared with the same period last year was due to the increase in manpower to provide services to our continuous growth in member enrollment from our self-insured corporate clients. As a result, a marginally higher loss of £8,000 in Malaysia was recorded compared to loss of £5,000 in the same period last year. However with the new contracts that have been secured and recent initiatives which have been put in place we envisage the prospects of the region will improve going forward.

On 16 September 2013, the Company completed the sale of 30% of its previously wholly owned subsidiary Medilink-Global TPA Pte Ltd ("MediLink Singapore"), for a consideration of SG$150,000 (approximately £75,000). The sale was made to WMG Management Pte. Ltd ("WMG"), a local strategic partner in Singapore. SG$75,000 of the consideration has been satisfied, as at today's date, through the settlement of advisory fees which MediLink owe Victor Lye, a director of WMG, relating to strategic advisory services provided by Mr Lye to promote MediLink Singapore in the region. The balance of the consideration of SG$75,000 will be settled by MediLink by 31 December 2013 and the net cash proceeds from the disposal will provide MediLink with additional working capital. The Directors of MediLink believe that working with a local partner in the region and having their active involvement, both with the ownership and management of MediLink Singapore, will significantly improve the prospects of that business. MediLink Singapore was originally acquired by the Company for SG$500,000 in 2009. MediLink will continue to hold 70% of MediLink Singapore following the completion of this sale. For the year ended 31 December 2012 MediLink Singapore generated revenue of GBP564,006 and net profit of GBP20,410. Unaudited net assets of MediLink Singapore as at 31 August 2013 were SG$23,095.

PROSPECTS

With the steady improvement in revenue generated from membership growth in our Malaysia and China operations, the Directors are confident that the Group's financial performance should continue to improve in the second half of 2013 and during the financial years thereafter.

Norman Lott

ChairmanConsolidated Statement of Comprehensive Income

Six month period ended 30 June 2013

* 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 2013

Consolidated Statement of Cash Flows

Six months ended 30 June 2013

Consolidated Statement of Changes in Shareholder' Equity

Notes to the Interim Financial Information

Six month period ended 30 June 2013

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 2013 and are consistent with those disclosed in the group's Report and Financial Statements for the year ended 31 December 2012.

The interim results have not been reviewed nor audited by the Company's auditors. The comparatives for the year ended 31 December 2012 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 24 September 2013.

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 2013.

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 £3,038,000.

Revenues from two customers amounted to £218,431: ING Insurance Bhd £126,652 and AXA Insurance Bhd £91,779 (1H 2012: £265,000: ING Insurance Bhd £158,000 and AXA Insurance Bhd £107,000), arising from sales in the third party administrator segment.

The assets of third party administrator include the goodwill on consolidation of £3,038,000.

The assets of third party administrator are including the goodwill on consolidation of £3,038,000.

Revenues from two customers amounted to £476,610: ING Insurance Bhd £243,685 and AXA Insurance Bhd £232,925, 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 Post Balance Sheet Event

The Board of Directors concluded a sale and purchase agreement dated 16 September 2013 to divest a 30% shareholding of Medilink-Global TPA Pte Ltd to a local strategic Singaporean partner for a total consideration of SG$150,000 (approximately £75,000). MediLink continue to hold 70% of Medilink-Global TPA Pte Ltd following the completion of this sale.

With a local strategic participation in the company's ownership, and the active involvement of a local director, the Board of Directors believe that the company will be able to move forward progressively and effectively

9 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.

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