Half Yearly Report

RNS Number : 3316T

Medilink-Global UK Limited

27 September 2010

 

27 September 2010

 

MediLink-Global UK Limited

("MediLink" or "the Company")

 

HALF-YEARLY REPORT for the six months to 30 june 2010

 

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 2010. Results are in line with management's expectations.

 

Financial highlights

 

·; Revenue increased by 14.3% to £769,000 (H1 2009: £673,000);

·; Contribution from China operations grew 3 times to 20% (H1 2009: 7%) of total revenue to £151,000 (2009: £44,000);

·; Revenue contribution from Singapore operations was £264,000 (H1 2009: £157,000); and

·; Operating loss of £330,000 (H1 2009: £427,000 operating loss), mainly attributable to costs of expansion in China.

 

Operational highlights

 

·; On 1 January 2010, the company entered into an arrangement with Qualitas to provide localized administration and Provider Network Management Services for Malaysia Out-Patient services.

·; On 1 February 2010, the company renewed a 3 year contract with Global Benefits Group.

·; On 12 February 2010, the company renewed a 2 year contract with American International Assurance Company (Bermuda) Limited.

 

Enquiries: 

 

MediLink-Global UK Limited	Allenby Capital Limited
Shia Kok Fat, Chief Executive Officer	Nick Athanas
Tel: 00 603 2296 3028	James Reeve
www.medilink-global.com	Tel: +44(0)20 3328 5656

 

 

CHAIRMAN'S STATEMENT

 

Medilink is pleased to present the group's unaudited results for the six month period ended 30 June 2010.

 

FINANCIAL REVIEW

 

The Group recorded revenues of £769,000 (H1 2009: £673,000) and a loss after tax of £334,000 (H1 2009: £441,000) for the six months ended 30 June 2010. Revenues have increased by 14% over the same period last year mainly due to the growth of the group's operations in China and Singapore. The Malaysian operating entities continued to make the largest contribution of 46% (H1 2009: 70%) of the Group revenue's for the period under review. Revenue generated in Malaysia in the period was £354,000 (H1 2009: £472,000) and this decrease is attributable to lower software licensing income in the period. However contributions from China and Singapore operations at 20% (H1 2009: 7%) and 34% (H1 2009: 23%) respectively are now making a more significant impact on the business. The operating loss for the period was lower compared to the same period last year as a result of the higher revenues generated for the period under review, which is in line with management expectations. The main factors contributing to the loss were the high operating costs in China associated with an accelerated pace of expansion in the region, the amortisation of intangible assets of £56,000 and the share of loss of the associated company in Thailand of £10,000 (2009: £20,000).

 

 

PERIOD IN FOCUS

 

The first half of 2010 witnessed an increase in member enrollment in China that led to a significant increase in revenue of 243% over the same period last year, from £44,000 to £151,000. The increase in members enrolled in China has risen by some 60% in the last six months and has more than trebled from the same stage last year. The number of healthcare providers operating in our network in China now stands at 266. In April 2010, the Company raised £321,198 (before expenses) at 18 pence per share in order to fund expansion of operations in China and provide additional working capital. China operation's suffered a 32% lower loss compared to the same period last year due to higher revenue in the first half of 2010 and the management is anticipating higher revenue growth in the second half of 2010.

 

The increase in revenue from our Singapore operations compared with the same period of last year was due to shorter reporting period of only 3 months in the first half of 2009 for our Singapore subsidiary, Lifeinc Holdings Pte Ltd, which was acquired in April 2009.

 

The revenue from Malaysia operations is 15% lower compared to the same period last year as a results of lower software licensing sales in the first half of 2010 and the management is expecting the software licensing sale to increase substantially in the second half of 2010. The head office in Malaysia has increased its operating capacity to support our expanding operations in China, Singapore and Thailand. As a result the operating costs in Malaysia have increased in the first half of the year. Management now believe the infrastructure is sufficient to support its international expansion plans and the Board does not anticipate any further increase in operating costs in Malaysia in the second half of 2010.

 

Thailand has now started to generate revenue form its Third Party Administrator services in the first half of 2010. There are currently 101 healthcare providers in our network in Thailand. There was no comparative revenue in 2009. As a result, our Thailand operations sustained a lower loss during the first half of 2010 compared with the same period last year. 

 

 

PROSPECTS

 

With the steady increase in member enrollment numbers in all regions especially in China, the Directors believe that the Group's financial performance should improve in the second half of 2010. Medilink China has made great advances and has now contracted to serve 11 prominent insurance companies in the region, compared with 6 at the same stage last year. The foundations have now been laid both in terms of infrastructure and clients to act as a base for the expansion of our subsidiaries to generate sufficient revenues to move towards profitability in the regions in which we operate.

 

Norman Lott

Chairman

Consolidated Statement of Comprehensive Income

Period ended 30 June 2010

		Period Ended 30.06.10	Period Ended 30.06.09	Year Ended 31.12.09
		Unaudited	Unaudited	Audited
	Note	£'000	£'000	£'000
Revenue	5	769	673	1,243
Cost of sales		(301)	(300)	(843)
Gross profit		468	373	400
Other income / (expense)		4	-	(45)
Administrative expenses		(802)	(800)	(1,256)
Operating loss		(330)	(427)	(901)
Share of associated undertakings' losses		(10)	(20)	(38)
Finance expenses		(3)	(1)	(3)
Loss before taxation		(343)	(448)	(942)
Taxation	4	9	7	18
Loss after taxation and for the period		(334)	(441)	(924)
Other Comprehensive Income
Exchange differences on translating  foreign operations		(58)	46	-
Total comprehensive income for the period net of tax		(392)	(395)	(924)
Loss per share (pence)
Basic	2	(0.32)	(0.43)	(0.89)
Diluted*	2	(0.32)	(0.43)	(0.89)

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

 

 

 

 

 

 

Consolidated Statement of Financial Position

As at 30 June 2010

		30.06.10	30.06.09	31.12.09
	Note	Unaudited	Unaudited	Audited
		£'000	£'000	£'000
ASSETS Non-current assets
Intangible assets		4,357	4,456	4,413
Property, plant and equipment		223	244	236
Investments		7	35	17
Total non-current assets		4,587	4,735	4,666
Current assets
Trade and other receivables		964	704	784
Cash and cash equivalents		461	469	315
Total current assets		1,425	1,173	1,099
TOTAL ASSETS		6,012	5,908	5,765
EQUITY Capital and Reserves
Share capital	6	5,282	5,167	5,193
Share premium account	6	951	678	737
Reserves		(1,301)	(474)	(909)
Total equity		4,932	5,371	5,021

 

Current liabilities
Trade and other payables			1,008	463	664
Borrowings			7	17	15
Total current liabilities			1,015	480	679
Non-current liabilities
Borrowings			-	3	1
Other payables			18	10	8
Deferred tax liabilities			47	44	56
Total non-current liabilities			65	57	65
TOTAL EQUITY AND LIABILITIES			6,012	5,908	5,765

 

 

Consolidated Statement of Cash Flows

Six months ended 30 June 2010

	30.06.10	30.06.09	31.12.09
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Cash flows from operating activities
Loss before taxation	(343)	(448)	(942)
Adjustments for:
Amortisation of intangible assets	56	34	104
Depreciation of property, plant and equipment	82	52	114
Provision for bonus payable in shares	-	-	94
Share of loss of associated company	10	20	38
Finance costs	3	1	3
Cash from operating activities before changes in working capital	(192)	(341)	(589)
Decrease in inventories	-	51	51
Increase in trade and other receivables	(180)	(301)	(381)
Increase in trade and other payables	344	194	388
Cash flows from operations	(28)	(397)	(531)
Tax paid	-	(7)	(4)
Interest paid	(3)	(1)	(3)
Net cash used in operations	(31)	(405)	(538)
Investing activities
Purchase of property, plant and equipment	(62)	(73)	(127)
Proceed from disposal of property, plant and equipment	15	-	-
Acquisition of a subsidiary	-	(208)	(208)
Investment in associated company	-	(35)	(35)
Net cash used in investing activities	(47)	(316)	(370)
Financing activities
Proceeds from issue of shares	321	-	97
Share issue costs	(18)	-	(11)
Repayment of bank borrowings	(9)	(10)	(15)
Repayment of hire purchase liabilities	(12)	(2)	(4)
Net cash generated by/(used in) financing activities	282	(12)	67
Net increase/(decrease) in cash and cash equivalents	204	(733)	(841)
Effect of exchange rate changes	(58)	46	-
Cash and cash equivalents at the beginning of the period	315	1,156	1,156
Cash and cash equivalents at the end of the period	461	469	315

Consolidated Statement of Changes in Shareholder' Equity

For the six month period ended 30 June 2010 (unaudited)
				Share capital	Share premium	Foreign exchange reserve	Retained Earnings	Total
				£'000	£'000	£'000	£'000	£'000
Balance as at 1 January 2009				5,167	678	(34)	(45)	5,766
Loss for the period				-	-	-	(441)	(441)
Exchange differences				-	-	46	-	(46)
Total comprehensive income for the period				-	-	46	(441)	(395)
Balance as at 30 June 2009				5,167	678	12	(486)	5,371

 

Balance as at 1 July 2009					5,167	678	12	(486)	5,371
Loss for the period					-	-	-	(483)	(483)
Exchange differences					-	-	(46)	-	(46)
Total comprehensive income for the period					-	-	(46)	(483)	(529)
Provision for bonus payable in shares					-	-	-	94	94
Issue of shares					26	70	-	-	96
Share issue costs					-	(11)	-	-	(11)
Balance as at 31 December 2009					5,193	737	(34)	(875)	5,021
Balance as at 1 January 2010				5,193		737	(34)	(875)	5,021
Loss for the period				-		-	-	(334)	(334)
Exchange differences				-		-	(58)	-	(58)
Total comprehensive income for the period				-		-	(58)	(334)	(392)
Share capital issued				89		232	-	-	321
Share issue costs				-		(18)	-	-	(18)
Balance as at 30 June 2010				5,282		951	(92)	(1,209)	4,932

 

Notes to the Interim Financial Statement

Period ended 30 June 2010

 

1 Basis of preparation

 

The financial statements have 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 those the group expects to apply in its financial statements for the year ending 31 December 2010 and are unchanged from those disclosed in the group's Report and Financial Statements for the year ended 31 December 2009.

 

The interim results have been reviewed but not audited by the Company's auditors. The comparatives for the period ended 31 December 2009 are not the Company's full statutory accounts for that period. A copy of the statutory accounts for that period, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified.

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 financial information set out in this announcement was approved by the board on 27 September 2010.

 

 

 

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 diluted

	Period ended 30.06.10	Period ended 30.06.09	Year ended 31.12.09
	£'000 (unaudited)	£'000 (unaudited)	£'000 (audited)
Loss after taxation	(334)	(441)	(924)
Basic weighted average shares in issue	104,247,178	103,330,630	103,600,630
Diluted weighted average shares in issue	104,247,178	103,330,630	103,600,630
Basic loss per share based on issued share capital as at 30 June 2010 (pence)	(0.32)	(0.43)	(0.89)
Diluted loss per share based on issued share capital as at 30 June 2010 (pence)	(0.32)	(0.43)	(0.89)

3 Dividend

 

The Directors do not propose a dividend in the period.

 

4 Taxation

 

The interim tax credit reflects an estimate of the likely effective tax rate for the period.

 

5 Turnover and segmental analysis

 

The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009. 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.

 

 

30 June 2010 (unaudited)	Third party administrator	Software licensing	Consolidation	Total
	£'000	£'000	£'000	£'000
External revenue	746	23		769
Internal revenue	-	47	(47)	-
Total revenue	746	70	(47)	769
Interest expenses	(3)	-	-	(3)
Depreciation and amortisation	(126)	(12)	-	(138)
Corporation tax	9	-	-	9
Earning before tax (EBT)	(294)	(49)	-	(343)
Assets	9,474	321	(3,783)	6,012
Liabilities	(3,333)	(291)	2,544	(1,080)

 

(i) The assets of third party administrator are including the goodwill on consolidation of £4,138,000.

Revenues from two customers amounted to £184,000 : ING Insurance Bhd £113,000 and AXA Insurance Bhd £71,000 (1H 2009: £ 177,000: ING Insurance Bhd £108,000 and AXA Insurance Bhd £69,000), arising from sales by third party administrator segment.

 

30 June 2009 (unaudited)	Third party administrator	Software licensing	Consolidation	Total
	£'000	£'000	£'000	£'000
External revenue	527	146	-	673
Internal revenue	-	47	(47)	-
Total revenue	527	193	(47)	673
Interest expenses	(1)	-	-	(1)
Depreciation and amortisation	(76)	(10)	-	(86)
Corporation tax	-	-	-	-
Earning before tax (EBT)	(448)	-	-	(448)
Assets	7,793	179	(2,064)	5,908
Liabilities	(1,609)	(95)	1,167	(537)

 

(i) The assets of third party administrator are including the goodwill on consolidation of £4,138,000.

 

 

 

31 December 2009 (audited)	Third party administrator	Software licensing	Consolidation	Total
	£'000	£'000	£'000	£'000
External revenue	1,096	147	-	1,243
Internal revenue	-	69	(69)	-
Total revenue	1,096	216	(69)	1,243
Interest revenue	1	-	-	1
Interest expenses	(3)	-	-	(3)
Depreciation and amortisation	(197)	(21)	-	(218)
Corporation tax	17	1	-	18
Earning before tax (EBT)	(932)	(10)	-	(942)
Assets	7,766	250	(2,251)	5,765
Liabilities	(1,935)	(176)	1,367	(744)

 

(ii) The assets of third party administrator are including the goodwill on consolidation of £4,138,000.

 

Revenues from two customers amounted to £349,000 : ING Insurance Bhd £204,000 and AXA Insurance Bhd £145,000, arising from sales by third party administrator segment.

 

 

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

 

30 June 2010 (unaudited)	UK	Singapore	China	Malaysia	Total
	£'000	£'000	£'000	£'000	£'000
Revenue	-	264	151	354	769
Intangible assets	219	-	-	-	219
Goodwill	4,138	-	-	-	4,138
PPE	-	24	68	131	223
30 June 2009 (unaudited)	UK	Singapore	China	Malaysia	Total
	£'000	£'000	£'000	£'000	£'000
Revenue	-	157	44	472	673
Intangible assets	318	-	-	-	318
Goodwill	4,138	-	-	-	4,138
PPE	-	6	18	220	244
31 Dec 2009 (audited)	UK	Singapore	China	Malaysia	Total
	£'000	£'000	£'000	£'000	£'000
Revenue	-	374	112	757	1,243
Intangible assets	275	-	-	-	275
Goodwill	4,138	-	-	-	4,138
PPE	-	21	44	171	236

 

 

 

 

6 Share capital

 

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

 

a) Authorised share capital (unaudited):

	Period ended 30 June 2010	Period ended 30 June 2009	Period ended 31 December 2009
	£'000	£'000	£'000
Authorised:
200,000,000 Ordinary shares of 5p each	10,000	10,000	10,000
Issued:
105,650,280 Ordinary shares of 5p each	5,282
103,865,847 Ordinary shares of 5p each		5,167
103,330,630 Ordinary shares of 5p each			5,193

b) Shares issued during the period (unaudited)

 

	GBP	Shares	Share Capital	Share Premium
			£'000	£'000
At 1 January 2010		103,865,847	5,193	737
Shares issued on 19 April (i)	0.18	1,784,433	89	232
Share issue costs		-	-	(18)
		105,650,280	5,282	951

 

(i) On 19 April 2010, the Company issued 1,784,433 ordinary shares of 5p each at a premium of 13p per share for a consideration of £321,198.

 

 

7 Foreign currency exchange rate

 

The following significant exchange rates applied during the period:

 

	Average Rate	Reporting Date
£1 : RMB	10.4028	10.1442
£1 : SGD	2.1316	2.0883
£1 : RM	5.0326	4.8435

 

 

8 Notice 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 31 Pier Road, St. Helier, Jersey, JE4 8PW.

 

 

- Ends -

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