TIDMMEDI
RNS Number : 8001O
Medilink-Global UK Limited
25 September 2013
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 GBP1,093,000 (H1 2012: GBP958,000);
-- Revenue contribution from China operations increased by 38%
to GBP324,000 (H1 2012: GBP235,000);
-- Operating loss reduced to GBP235,000 (H1 2012: GBP366,000 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:
MediLink-Global UK Limited Allenby Capital Limited
(Nominated Adviser and Broker)
Shia Kok Fat, Chief Executive Nick Athanas
Officer
Tel: 00 603 2296 3028 James Reeve
www.medilink-global.com Tel: +44(0)20 3328 5656
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 GBP1,093,000 (H1 2012:
GBP958,000) and a reduced loss after tax of GBP237,000 (H1 2012:
GBP367,000) 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 GBP235,000 in the first half of last year to GBP324,000
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 GBP8,000 in Malaysia was recorded compared to loss
of GBP5,000 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 GBP75,000). 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
Chairman
Consolidated Statement of Comprehensive Income
Six month period ended 30 June 2013
Period Period Year
Ended Ended Ended
30.06.13 30.06.12 31.12.12
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue 5 1,093 958 2,084
Cost of sales (598) (580) (1,274)
Gross profit 495 378 810
Other income / (expense) 3 6 15
Administrative expenses (733) (750) (1,527)
Operating loss (235) (366) (702)
Finance expenses (2) (1) (3)
Loss before taxation (237) (367) (705)
Taxation 4 - - -
Loss after taxation and
for the period (237) (367) (705)
========== ========== ==========
Other Comprehensive Income
Exchange differences on translating
foreign operations (115) (16) (32)
Total comprehensive income for the period
net of tax (352) (383) (737)
Loss per share (pence)
Basic 2 (0.20) (0.30) (0.58)
Diluted* 2 (0.20) (0.30) (0.58)
* 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
30.06.13 30.06.12 31.12.12
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 3,181 3,228 3,200
Property, plant and equipment 185 169 116
Total non-current assets 3,366 3,397 3,316
Current assets
Trade and other receivables 1,547 820 1,526
Cash and cash equivalents 615 260 196
Total current assets 2,162 1,080 1,722
TOTAL ASSETS 5,528 4,477 5,038
========== ========== =========
EQUITY
Capital and Reserves
Share capital 6 6,045 6,045 6,045
Share premium account 6 1,507 1,507 1,507
Reserves (5,342) (4,636) (4,990)
---------- ---------- ---------
Total equity 2,210 2,916 2,562
---------- ---------- ---------
Current liabilities 2,961 1,504 2,120
Total current liabilities 2,961 1,504 2,120
-------- -------- -------------
Non-current liabilities
Other payables 313 17 312
Deferred tax liabilities 44 40 44
Total non-current liabilities 357 57 356
-------- -------- -------------
TOTAL EQUITY AND LIABILITIES 5,528 4,477 5,038
======== ======== =============
Consolidated Statement of Cash Flows
Six months ended 30 June 2013
30.06.13 30.06.12 31.12.12
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (237) (367) (705)
Adjustments for:
Amortisation of intangible assets 23 50 88
Depreciation of property, plant and
equipment 87 37 120
Gain on disposal of property, plant
and equipment - - (1)
Finance costs 2 1 3
Cash from operating activities before
changes in working capital (125) (279) (495)
(Increase)/decrease in trade and other
receivables (12) 165 550
Increase in trade and other payables 845 41 729
---------
Cash flows from operations 708 (73) (316)
Interest paid - (1) (3)
Net cash used in operations 708 (74) (319)
Investing activities
Purchase of property, plant and equipment (151) (35) (48)
Net cash used in investing activities (151) (35) (48)
---------
Financing activities
Proceeds from borrowing from a shareholder - 95 -
Loan from a director - - 300
Repayment of hire purchase liabilities (2) - (5)
Net cash (used in)/generated by financing
activities (2) 95 295
Net increase/ (decrease) in cash and
cash equivalents 555 (14) (72)
Effect of exchange rate changes (136) (16) (22)
Cash and cash equivalents at the beginning
of the period 196 290 290
Cash and cash equivalents at the end
of the period 615 260 196
========== ========== =========
Consolidated Statement of Changes in Shareholder' Equity
For the six month period ended 30 June 2013
(unaudited)
Foreign
Share Share exchange Retained
Capital premium reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 January
2012 6,045 1,507 (95) (4,158) 3,299
Loss for the period - - - (367) (367)
Exchange differences - - (16) - (16)
-------- -------- ---------- --------- --------
Total comprehensive
income for the period - - (16) (367) (383)
Balance as at 30 June
2012 6,045 1,507 (111) (4,525) 2,916
-------- -------- ---------- --------- --------
Balance as at 1 July
2012 6,045 1,507 (111) (4,525) 2,916
Loss for the period - - - (338) (338)
Exchange differences - - (16) - (16)
------ ------ ------ -------- ------
Total comprehensive income
for the period - - (16) (338) (354)
Balance as at 31 December
2012 6,045 1,507 (127) (4,863) 2,562
------ ------ ------ -------- ------
Balance as at 1 January
2013 6,045 1,507 (127) (4,863) 2,562
Loss for the period - - - (237) (237)
Exchange differences - - (115) - (115)
------ ------ ------ -------- ------
Total comprehensive income
for the period - - (115) (237) (352)
Balance as at 30 June
2013 6,045 1,507 (242) (5,100) 2,210
------ ------ ------ -------- ------
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.
Period ended Period ended Year ended
30.06.13 30.06.12 31.12.12
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Loss after taxation (237) (367) (705)
Basic weighted average shares
in issue 120,909,108 120,909,108 120,909,108
Diluted weighted average
shares in issue 120,909,108 120,909,108 120,909,108
Basic loss per share (pence) (0.20) (0.30) (0.58)
------------- ------------- ------------
Diluted loss per share (pence) (0.20) (0.30) (0.58)
------------- ------------- ------------
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.
Third party Software
30 June 2013 (unaudited) administrator licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 1,044 49 (10) 1,083
Internal revenue - 10 - 10
Total revenue 1,044 59 (10) 1,093
-------------- ----------- ---------------- --------
Interest revenue - - - -
Depreciation and amortisation (110) - - (110)
Corporation tax - - - -
Earning before tax
(EBT) (240) 3 - (237)
Assets 6,496 147 (1,115) 5,528
Liabilities (6,138) (296) 3,116 (3,318)
-------------- ----------- ---------------- --------
(i) The assets of third party administrator include the goodwill
on consolidation of GBP3,038,000.
Revenues from two customers amounted to GBP218,431: ING
Insurance Bhd GBP126,652 and AXA Insurance Bhd GBP91,779 (1H 2012:
GBP265,000: ING Insurance Bhd GBP158,000 and AXA Insurance Bhd
GBP107,000), arising from sales in the third party administrator
segment.
Third party Software
30 June 2012 (unaudited) administrator licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 904 54 - 958
Internal revenue - 25 (25) -
-------------- ----------- ---------------- --------
Total revenue 904 79 (25) 958
-------------- ----------- ---------------- --------
Interest expenses (1) - - (1)
Depreciation and
amortisation (87) (1) - (87)
Corporation tax - - - -
Earning before tax
(EBT) (359) (9) - (367)
Assets 4,794 256 (573) 4,477
Liabilities (4,614) (353) 3,406 (1,561)
-------------- ----------- ---------------- --------
The assets of third party administrator include the goodwill on
consolidation of GBP3,038,000.
Third party Software
31 December 2012 (audited) administrator licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 1,993 91 - 2,084
Internal revenue - - - -
-------------- ----------- ---------------- --------
Total revenue 1,993 91 - 2,084
-------------- ----------- ---------------- --------
Interest revenue - - - -
Interest expenses (3) - - (3)
Depreciation and amortisation (207) (1) - (208)
Corporation tax - - - -
Earning before tax
(EBT) (520) (62) (123) (705)
Assets 2,714 148 2,176 5,038
Liabilities (5,398) (298) 3,220 (2,476)
-------------- ----------- ---------------- --------
The assets of third party administrator are including the
goodwill on consolidation of GBP3,038,000.
Revenues from two customers amounted to GBP476,610: ING
Insurance Bhd GBP243,685 and AXA Insurance Bhd GBP232,925, arising
from sales by third party administrator segment.
The geographical split of revenue and non-current assets arises
as follows:
30 June 2013 (unaudited) Jersey Singapore China Malaysia Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 276 324 493 1,093
Intangible assets 16 - - 123 139
Goodwill 3,038 - - - 3,038
PPE - - 53 132 185
-------- ------------------ ------- ----------- --------
30 June 2012 (unaudited) Jersey Singapore China Malaysia Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 275 235 448 958
Intangible assets 69 - - 121 190
Goodwill 3,038 - - - 3,038
PPE - 4 80 85 169
-------- ------------------ ------- ----------- --------
31 Dec 2012 (audited) Jersey Singapore China Malaysia Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 597 563 924 2,084
Intangible assets 33 - - 129 162
Goodwill 3,038 - - - 3,038
PPE - 1 61 54 116
-------- ------------------ ------- ----------- --------
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):
30 June 30 June 2012 31 December
2013 2012
GBP'000 GBP'000 GBP'000
Authorised:
200,000,000 Ordinary Shares
of 5p each 10,000 10,000 10,000
Issued:
120,909,108 Ordinary Shares
of 5p each 6,045 6,045 6,045
7 Foreign currency exchange rate
The following significant exchange rates applied during the
period:
Average Rate Reporting Date
------------- ------------- ---------------
GBP1 : RMB 9.5534 9.3884
------------- ------------- ---------------
GBP1 : SGD 1.9100 1.9267
------------- ------------- ---------------
GBP1 : MYR 4.7267 4.8002
------------- ------------- ---------------
GBP1 : HKD 11.8939 11.7952
------------- ------------- ---------------
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
GBP75,000). 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.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
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